Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924052840919 5W ft! I 9 OO Cornell > rOvAq Cornell University Law Library. THE GIFT OF V^hi AMERICAN CASES ON CONTRACT ARRANGED IN ACCORDANCE WITH THE ANALYSIS OF ANSON ON CONTRACT AND EDITED BY ERNEST W. HUFFCUT AND EDWIN H. WOODRUFF PROFESSORS IN THE CORNELL UNrCEBSITT COLLEGE OP LAW SECOND EDITION WITH 8UPPLEMENTAET CASES BANKS & COMPANY ALBANY, N.Y. 1900 COPTBTOHT, 1894, By EEBTEBT W. HUFFCtTT akd EDWIN H. WOODRUFF. COPTBIQBT, 1900, Bt EEIIEBT W. HUFFOUT AMD EDWIN H. WOODRUFF. NOTE TO SECOND EDITION. The supplementary cia^es added to this edition have been selected, for the (most pSwt, from'^among those decided during the six years that have passed since the first edition was pub- lished. A few earlier cases have been inserted at points where experience in the class-room has shown that additional case material is desirable. The supplementary cases (pp. 703-882) are arranged in the order of the main portion of the book. To facilitate the use of the supplementary cases, each case has a topical heading, at the left of which is the page number where the same heading is found in the main portion, and at the right the page number where the case should be added in the assignment of work. October, 1900. PREFACE. This volume is the outcome of a need experienced in the classes of a professional law school on the one hand, and the undergraduate classes of a university on the other. It is an additional proof of the value of law as a culture study, as well as a professional study, that the editors have encountered no difficulty in uniting in a selection of cases equally suited to both purposes. The admirable analysis by Sir William Anson in his "Principles of the English Law of Contract " has been followed in the arrangement of the cases. That work, prepared originally for under- graduate study at Oxford, has been found higlily valuable in the professional schools of this country, and is every- where recognized as a masterly exposition of the subject. It is believed, however, that the cases will be found equally well adapted for use with any of the elementary treatises, or in connection with lectures, or without either text or lectures. The selection is confined to American cases because the limits of a single volume did not admit of an adequate representation of both English and American decisions, and because excellent collections of English cases are already available. It is believed, moreover, that the decis- ions of the Federal courts, and the courts of the various States, now afford for the American law student a sufficient number of illustrative cases that are adequate in content, and that possess the additional value of being stated in iv PREFACE. terms reflecting the character and procedure of our own courts. The frequent, and often exhaustive discussion of English authorities in the cases selected, as well as in the leading treatises, removes all danger of losing sight of the fountain sources of our law. Subjects commonly treated at length in related courses — as the Statute of Frauds, capacity of parties, and inter- jyetation of contract — have been much abridged, the object being to indicate the trend of judicial decision without attempting to develop details or refinements. Compression at these points has permitted a fuller illus- tration of difficult or disputed topics, and the addition of some special topics not indicated by Anson, as substantial performance, joint obligations, and laws impairing the obligation of contracts. The subject of agency has been omitted altogether. Notes have been added where it seemed impracticable to develop a subject fully by the use of cases. In many of the cases it has been thought advisable, for the sake of brevity, to rewrite or abridge the statement of facts, and this has been done without calling special attention to the matter. Portions of opinions on points irrelevant to the subject illustrated are often omitted, but such I omissions are clearly indicated. Every citation in the opinions has been verified, and corrections made where the original is manifestly wrong. It is hoped that the addition of a full index may render the volume of service to practitioners as well as students. E. W. H. E. H. W. October, 1894. TABLE OF CONTENTS. By the use of this table the supplementary cases can be conveniently found under the proper topics. PART I. FAGE INTRODUCTION 1 PART II. FORMATION OF CONTRACT. CHAPTER I. Oppek and Acceptance. SECTIOW 1. Contract springs from acceptance of offer 7-9 2. Offer and acceptance may be made by words or conduct . 10-14 3. Offer must be communicated 14-20, 703-706 (i.) Ignorance of offered promise 14 (ii.) Ignorance of offered act 14 (ill.) Ignorance of offered terms 15-20 (iv.) Unauthorized communication 703 4. Acceptance must be communicated 21-29, 706-709 5. What amounts to communication of acceptance . . 29-35, 710-718 6. Offer may lapse or be revoked 35-62, 715-718 (i.) Lapse. a. Lapse by death 35 6. Lapse by failure to accept in prescribed manner ... 38 c. Lapse by expiration of time 41 (ii.) Revocation. a. Offer may be revoked before acceptance 49 6. Offer made irrevocable by acceptance 50 c. Offer under seal irrevocable 54 d. Must revocation be communicated ? .... 57, 715 7. Offer made to unascertained persons .... 62-71, 718-721 (i.) Offer of rewards 62, 718 (ii.) Invitations to treat 67 8. Offer must contemplate legal relations 71 9. Acceptance must be absolute 74 V vi TABLE OF CONTENTS. CHAPTER II. FOKH AND Co>fSIDERATION. SECTION PAGE 1. Contract of record 76-81 2. Contract under seal 82-92 3. Statute of frauds 92-132, 721-732 (i.) Requirements of form 92 (u.) Provisions of fourth section 110,721 (ill.) Provisions of seventeenth section 123 4. Consideration 133-214, 732-762 (i.) Necessity of consideration 133 (^ii.) Adequacy of consideration 138,732 Three tests of reality of consideration. a. Did the promisee suffer any detriment ? 1 50 6. Was the detriment of any ascertainable value ? (o) Pnmo /acie impossibility 152 (j3) Uncertainty 157, 736 (7) Forbearance to sue 162 (5) Compromise 165 (e) Gratuitous undeilaklngs 167 c. Was the detriment more than the promisee was legally bound to suffer ? (o) Delivering property wrongfully withheld .... 174 (/3) Performance of public duty 176 (7) Promise to perform existing contract . 177-187, 738-750 (J) Payment of smaller sum in satisfaction of larger . 187, 750 (e) Composition with creditors 195 (f) Mutual promises and subscriptions . . . 199, 754-762 {in.) Legality of consideration 199 (iv.) Past consideration 199 (a) Consideration moved by previous request .... 205 (j3) Voluntarily doing what another was legally bound to do . 206 (7) Reviving agreement barred by rule of law ... 208 CHAPTER III. Capacity or Pasties. 1. Political status 215 2. Infants 218 3. Corporations „ 222 4. Lunatics and drunken persons 224 6. Married women 233 TABLE OF CONTENTS. VU CHAPTER IV. Reality of Consent. 8e0tioh page 1. Mistake 238-264, 762-778 (i.) As to nature or existence of contract .... 238,762 (ii.) As to identity of person with whom contract is made . . 243 (iii.) As to subject-matter of contract. a. As to identity of subject-matter 246 6. As to existence of subject-matter . . . 247-262, 765-778 c. As to intention, known to other party 262 2. Misrepresentation 265-282 (f.) Distinguished from fraud 265 (ii.) Distinguished from terms 265 {Hi.') Effects of misrepresentation. a. In contracts generally 268 6. In contracts uberrimce fidei 273 (J/o.) Remedies for misrepresentation : estoppel .... 280 3. Fraud ... 282-307, 778-788 (i.) Essential features. a. It is a false representation 282, 778 6. It is a representation of /acf 288 c. Made with knowledge of falsity, or recklessly . . . 298 d. Made with intent that it be acted upon by person injured . 303 e. It must actually deceive 306 4. Duress 308-311, 788-795 6. Undue influence 311-314 CHAPTER V. Legality op Object. Nature of illegality in contract 316-372, 796-801 (f.) Contracts illegal by statute. a. General rules of construction 315 6. Contracts in breach of Sunday statutes 318 c. Wagers in general 324 d. Wagers on rise and fall of prices 325, 796 e. Wagering policies 333 (ii.) Contracts illegal at common law. a. Agreements to commit indictable oflense or civil wrong . . 338 6. Agreements to do what it is policy of law to prevent, (o) Agreements tending to injure the State with other States . 340 (/3) Agreements tending to injure the public service . . 340 (7) Agreements tending to pervert the course of justice . 348, 799 (5) Agreements tending to abuse of legal process . . . 354 (e) Agreements contrary to good morals 357 viii TABLE OF CONTENTS. BECTIOS ''■»^«" (f) Agreements affecting the freedom or security of marriage 369, 801 (ij) Agreements in restraint of trade 362 2. Effect of illegality upon contracts .... 373-411, 802-808 (i.) When contract is divisible 873,802 (ii.) When contract is indivisible 378, 802 {in.) Comparative effects of avoidance and illegality . . .383 (t».) The intention of the parties 390, 805-808 (v.) Securities for money due on illegal contract . . . . 396 (ci.) Relief from contract known to be iUegal 402 PART III. THE OPERATION OF CONTRACT. CHAPTER I. The Limits of the Contractual Obligatioit. 1. Third party incurring liabilities 412-419 (i.) Paying another's debt 412 {ii.) Inducing breach of contract 416 2. Third party acquiring rights: Promise for benefit of third party 420-437, 809-840 CHAPTER n. The Assionment op Contkact. 1. Assignment by act of parties 438-467 (i.) Assignment of liabilities 438 (ii.) Assignment of rights. a. At common law 442 6. In equity 452 c. By statute 459 d. By the law merchant : negotiability 460 2. Assignment by operation of law 468-485 (i.) Assignment of obligations upon transfer of interests in land . 468 a. Leasehold interests 468 6. Freehold interests 472 (ii.) Assignment of obligations upon marriage .... 478 (Hi.) Assignment of obligations by death 479 CHAPTER III. Joint Obligations. 1. Joint promises 486-492 (i.) Joint promisors 486 (ii.) Joint promisees 490 TABLE OF CONTENTS. IX SECTION PAGE 2. Joint and several promises 492-499 (i.) Joint and several promisors 492 (ii.') Joint or several promisees . 496 PART IV. THE INTERPRETATION OF CONTRACT. CHAPTER I. Rules relaxing to Evidence. 1. Proof of document 500 2. Evidence as to fact of agreement 502 3. Evidence as to terms of contract 503 a. Supplementary and collateral terms ..... 503 6. Explanation of terms 504 c. Usages of trade 608 CHAPTER II. Rules kelating to Consteuction. 1. General Rules 511 2. Rules as to time and penalties . 515 PART V. DISCHARGE OF CONTRACT. CHAPTER I. DiscHAHGE OP Contract bt Agkeement. 1. Waiver 522,840 2. Substituted contract 524 3. Provisions for discharge 531 CHAPTER II. Discharge op Contract bt Performance. 1. Payment 536 2. Tender 541 3. Substantial performance 542 CHAPTER m. Discharge op Contract bt Breach. 1. Position of party discharged by breach 555 2. Eonns of discharge by breach. (j.) Renunciation before performance due .... 565, 843 X TABLE OF CONTENTS. SECTION PAOE (it.) Impossibility created by one party before performance due . 560 (in.) Renunciation in course of performance .... 561,867 (ill.) Impossibility created by one party in course of performance . 574 (v.) Failure of performance. a. Absolute promises and concurrent conditions .... 576 6. Divisible promises and virtual failure of consideration . 584, 859 c. Conditions and warranties. (a) Condition, or vital promise 594 (jS) Warranty, or subsidiary promise 607 3. Remedies for breach of contract. (i.) Damages 611 (ii.) Specific performance and injunction 613 4. Discharge of right of action for breach. (i.) By consent of the parties 625,864,869 (ii.) By judgment 631,869,871 (iii.) By lapse of time 635 CHAPTER IV. Impossibilitt op Peeformakce. 1. General principles 639 2. Exceptions. (i.) Legal impossibility 645 (ii.) Destruction of subject-matter 649,873,875 (iii.) Death or disability of party in contract for personal service . 655 CHAPTER V. DiBCHAKGE BY OPEEATION OF LaTV. 1. Merger 659 2. Alteration or loss of written instrument 660 3. Bankruptcy 669 CHAPTER VI. Impairment op Obligation op Contract bt Stattjte. 1. Statutes discharging obligation of contracts 674 (i.) Discharge under bankruptcy statutes. a. As to antecedent debts 674 6. As to foreign creditors 683 (ii.) Discharge under statutes imposing new conditions . . , 686 2. Statutes impairing the remedy on contracts 690 3. Impairment of contracts of record 696 Contracts with the State ggg 4. Index 883 TABLE OF CASES REPORTED. oJWo Abbott V. Doane, 163 Mass. 433 . Ackert v. Barker, 131 Mass. 436 . Adams v. Messinger, 147 Mass. 185 Adams v. Union E. Co., 42 Atl. Rep. (R. I.) 615 Adams Eadiator &c. Works v. Schnader, 155 Penn. St Alden ^y. Thurber, 149 Mass. 271 . Alexander v. Brogley, 43 Atl. Eep. (N. J.) 888 . Alie V. Nadeau, 93 Me. 282 . AUen V. Brown, 44 K Y. 288 AUen V. Collier, 70 Mo. 138 . Allen V. Colliery Eng. Co., 46 Atl. Eep, AUer V. AUer, 40 N. J. Law 446 Anderson v. May, 50 Minn. 280 . Angus V. Scully, 57 N. E. (Mass.) 674 Anheuser-Busch Brewing Ass'n v. Mason, 44 Minn. 318 Arkansas &c. Co. v. Belden &c. Co., 127 U. S. 379 Bangor Bank v. Treat, 6 Greenl. (Me.) 207 . Barrett v. Buxton, 2 Aikens (Vt.), 167 . Bartholomew v. Jackson, 20 Johns. (N. Y.) 28 Bassett v. Hughes, 63 Wis. 319 . Beebe v. Johnson, 19 Wend. (N. Y.) 600 Bellows V. Sowles, 57 Vt. 164 .. . Bender v. Been, 78 Iowa, 283 Benton v. Springfield &c. Ass'n, 170 Mass. 534 Bernard v. Taylor, 23 Ore. 416 Bird V. Munroe, 66 Me. 337 . Bishop V. Eaton, 161 Mass. 496 . Bishop V. Palmer, 146 Mass. 469 . Bixby V. Moor, 51 N. H. 402 ... Blade v. Noland, 12 Wend. (N. Y.) 173 Boggs V. Curtin, 10 S. & E. (Penn.) 211 394, PASS 745 354 613 826 649 630 762 871 459 637 869 82 639 873 805 438 . 494 . 228 . 14 . 428 . 152 , 110 . 87 . 703 . 407 . 92 . 706 372, 380 . 378 . 666 . 497 xn TABLE OF CASES REPORTED. Boigneres v. Boulon, 54 Cal. 146 .... Borden v. Boardman, 157 Mass. 410 Boston Ice Co. ■;;. Potter, 123 Mass. 28 . Boston Safe Dep. &c. Co. v, Salem Water Co., 94 Fed, 238 Bragg V. Wetzell, 5 Blackf . (Ind.) 95 . Brauer v. Shaw, 168 Mass. 198 .... Brown v. Kinsey, 81 N. C. 245 . Brusie v. Peck Bros., 14 U. S. App. 21 . Biyant v. Isburgh, 13 Gray (Mass.) 607 Bryson v. Haley, 68 N. H. 337 . Buchanan v. TUden, 158 N. Y. 109 .. . Kep. PAOK 367 435 243 832 486 715 395 582 609 808 809 Carter v. United States Ins. Co., 1 Johns. Ch. (N. Y.) Chatham Furnace Co. v. Moffatt, 147 Mass. 403 . Claudeboye, The, 70 Fed. Eep. 631 Clark V. Marsiglia, 1 Den. (N. Y.) 317 . Clason V. Bailey, 14 Johns. (N. Y.) 484 Clayton v. Clark, 74 Miss. 499 Clifton V. Jackson Iron Co., 74 Mich. 183 Clough V. Seay, 49 Iowa, 111 Colby V. Dearborn, 59 N. H. 326 . Coleman v. Applegarth, 68 Md. 21 CoUyer v. Moulton, 9 R. I. 90 Compton V. Jones, 4 Cow. (N. Y.) 13 . Connolly v. SuUivan, 173 Mass. 1 Cook V. Bradley, 7 Conn. 57 . Cook V. Googins, 126 Mass. 410 . Cooper V. Lansing Wheel Co., 94 Mich. 272 Coplay Iron Co. v. Pope, 108 N. Y. 232 Cordes v. Miller, 39 Mich. 581 . Cort V. Lassard, 18 Ore. 221 . Coyner v. Lynde, 10 Ind. 282 Cross V. Cross, 58 N. H. 373 . Crumlish's Adm'r v. Cent. Imp. Co., 38 W. Va. 390 Cummings v. People, 60 111. 132 . Davison v. Von Lingen, 113 U. S. 40 . Dawe V. Morris, 149 Mass. 188 Dawkins ■;;. Sappington, 26 Ind. 199 Dearborn v. Bowman, 3 Metcalf (Mass.) 165 463 462 298 778 572 102 750 659 665 601 67 622 444 857 133 690 50 597 645 619 177 361 412 492 694, 265 . 292 14,65 . 199 TABLE OF CASES REPORTED. Xlll Delamater v. Miller, 1 Cow. (N. Y.) 75 . Derby v. Johnson, 21 Vt. 17 Dermott v. Jones, 2 Wall. (U. S.) 1 . Devecmon v. Shaw and Devries, Ex'rs, 69 Md. 199 Dexter v. Norton, 47 N. Y. 62 Diamond Match Co. v. Eoeber, 106 N. Y. 473 Dickinson v. Calahan's Adm'rs, 19 Perm. St. 227 . Dingley v. Oler, 117 U. S. 490 . Duplex Safety Boiler Co. v. Garden, 101 N. Y. 387 Dusenbury, Executor, v. Hoyt, 53 N. Y. 521 Duval V. Wellman, 124 N. Y. 156 . PAGE . 561 . 568 555, 641 . 141 . 649 . 362 . 479 . 556 . 546 . 208 361, 402 Economy &c. Co. v. West Jersey &c. Co., 44 Atl. E.ep. (K. J.) 854 824 Eliason et at. v. Henshaw, 4 Wheat. (U. S.) 225 . . . 38 Endriss v. Belle Isle lee Co., 49 Mich. 279 . . . . 180 Erie Ey. Co. v. Union &c. Co., 35 N. J. Law 240 . . . 373 Eield V. Mayor, 2 Seld. (N. Y.) 179 453 Eink V. Cox, 18 Johns. (N. Y.) 145 150 Eish V. Cleland, 33 111. 237 288 Eishell I). Gray, 60 N. J. L. 5 802 Eisher v. Deering, 60 111. 114 470 Eisher v. Seltzer, 23 Penn. St. 308 49^ Eisk V. Jefferson Police Jury, 116 U. S. 131 ... 693 Eitch V. Snedaker, 38 N. Y. 248 14, 62 Eleteher v. Peck, 6 Cranch (U. S.) 87 696^ Elynn v. Hurlock, 194 Penn. St. 462 869 Eogg V. Portsmouth Athenaeum, 44 N. H. 115 ... 10 Eonseca v. Cunard &c. Co., 153 Mass. 553 .... 15 Eord V. Mitchell, 15 Wis. 304 536 Poster V. Metts & Co., 55 Miss. 77 164 Ereyman v. Kneeht, 78 Penn. St. 141 607 Galusha v. Sherman, 81 N. W. (Wis.) 495 . . . . 792 Ganson v. Madigan, 15 Wis. 144 504 Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432 . . 859 Gibson v. Pelkie, 37 Mich. 380 247 Gillespie Tool Co. v. Wilson, 123 Penn. St. 19 . , .644 Gilman v. Lockwood, 4 Wall. (U. S.) 409 . . . . 683 Gleason v. Dyke, 22 Pick. (Mass.) 390 206 Goddard v. Binney, 115 Mass. 450 127 XIV TABLE OF CASES BEPOETEaJ. PAGS Gordon v. George, 12 Ind. 408 468 Gorham's Adm'r v. Meacham's Adm'r, 63 Vt. 231 . . 9, 88 GorreU v. Greensboro Water Supply Co., 124 N. C. 328 . 836 Graves v. Johnson, 156 Mass. 211 .... 340, 391 Greenwood v. Law, 55 N. J. Law 168 131 Gribben v. Maxwell, 34 Kans. 8 224 Gxigsby v. Stapleton, 94 Mo. 423 285 Guernsey v. Wood, 130 Mass. 503 685 Hale V. Spaulding, 145 Mass. 482 48T Hale V. Trout, 35 CaL 229 661 Hall V. Perkins, 3 Wend. (N. Y.) 626 311 Hamer v. Sidway, 124 N. Y. 538 143 Hamilton v. Home Ins. Co., 137 U. S. 370 . . . 353 n. Hamilton v. Liverpool &c. Ins. Co., 136 U. S. 242 . . 351 Handy v. St. Paul Globe Pub. Co., 41 Minn. 188 . . .318 Hart V. Georgia R. Co., 101 Ga. 188 736 Harvey v. Merrill, 150 Mass. 1 332, 383 Hayes v. Willio, 4 Daly (N. Y. C. P.) 259 . . . . 451 Heaton v. Angier, 7 N. H. 397 442 Hecht V. Batcbeller, 147 Mass. 335 255 Heermans v. Ellsworth, 64 N. Y. 159 457 Hertzog v. Hertzog, 29 Penn. St. 465 1 Heyn v. Philips, 37 Cal. 529 118 Hicks V. Burhans, 10 Johns. (N. Y.) 242 . . . . 205 Hill V. Grigsby, 35 Cal. 656 580 Hirth V. Graham, 50 Ohio St. 57 124 Hobbs V. Massasoit Whip Co., 158 Mass. 194 ... 24 Hough V. Barton, 20 Vt. 455 445 Howarth v. Warmser, 58 111. 48 479 Hughes V. Wamsutta Mills, 11 Allen (Mass.) 201 . . 647 Hunnewell v. Duxbury, 164 Mass. 286 303 Jaffray v. Davis, 124 N. Y. 164 187 Jeffries v. Ferguson, Adm'r, 87 Mo. 244 .... 489 Jessel V. WUliamsburgh Ins. Co., 3 Hill (N. Y.) 88 . . 444 Johnson's Adm'r v. Sellers' Adm'r, 33 Ala. 265 . . . 185 Jones V. Stanly, 76 N. C. 355 418 Keller v. Holderman, 11 Mich. 248 71 Kellett V. Eobie, 99 Wis. 303 840 TABLE OF CASES KEPOETED. XV Kidder v. Kidder, 33 Penn. St. 268 King V. Duluth &c. Ry., 61 Minn. 482 Knight V. Abbott, 30 Vt. 577 Kowalke v. Milwaukee &c. Co., 103 Wis. 472 Kromer v. Heim, 75 N. Y. 674 Kurtz V. Trank, 76 Ind. 594 . Kyle V. Kavanagh, 103 Mass. 356 Laidlaw v. Organ, 2 Wheat (U. S.) 178 Lawrence v. Fox, 20 N. Y. 268 . Lehow V. Simonton, 3 Colo. 346 .... Lewis V. Jewell,. 151 Mass. 345 .... Lingenfelder et al. v. Wainwright Brewing Co., 103 Lord V. Thomas, 64 N. Y. 107 . LoYe V. Harvey, 114 Mass. 80 ... . Mo, McClurg V. Terry, 21 N. J. Eq. 225 .. . McCreery v. Day, 119 N. Y. 1 McKinney v. Alvis, 14 111. 33 ... . McKown V. Furgason, 47 Iowa 636 Maclay v. Harvey, 90 111. 525 .... McMillan v. Ames, 33 Minn. 257 .... McEaven v. Crisler, 63 Miss. 542 .... Malone v. Boston & Worcester E. E., 12 Gray (Mass.) Manchester v. Braedner, 107 N. Y. 346 Manetti v. Doege, 48 N. Y. App. Div. 667 . Materne v. Horwitz, 101 N. Y. 469 .. , Mather v. Butler Co., 28 Iowa 253 .. . May V. Hanson, 6 Cal. 642 May V. Williams, 61 Miss. 125 ... . Merrill -y. Packer, 80 Iowa 642 .... Middlefield v. Church Mills Knitting Co., 160 Mass, Miles V. Schmidt, 168 Mass. 339 . Miller v. Covert, 1 Wend. (N. Y.) 487 . Mills V. Wyman, 3 Pick. (Mass.) 207 . Minneapolis and St. Louis Ey. v. Columbus EoUing 119 U. S. 149 Minnesota Oil Co. v. Collier &c. Co., 4 Dillon (U. S, 431 Mohr V. Miesen, 47 Minn. 228 .... Moore v. Phoenix Ins. Co., 62 N. H. 240 PAGE 625 738 541 765 627 358 246 . 282 . 422 . 420 . 306 578 181 . 700 . 324 . 72 . 524 . 443 . 301 . 41 . 54 666, 577 388 . 19 , 635 . 748 , 338 , 612 , 496 , 113 339 n. , 476 267 MiU, C. C.) 799 631 201 74 46 325 531 XVI TABLE OF CASES EEFOKTED. Morse v. Woodworth, 155 Mass. 233 Moulton V. Kershaw, 69 Wis. 316 Nassoiy v. Tomlinson, 148 N. Y. 326 . New V. Walker, 108 Ind. 365 .. . Nolan V. WMtney, 88 IST. Y. 648 . Norrington v. Wright, 115 U. S. 188 . Northern et al. v. The State on the Eelation of 1 Ind. 113 Northrup u Northiup, 6 Cow. (N. Y.) 296 . Lathrop, O'Brien v. Young, 95 N. Y. 428 . O'Donnell v. Leeman, 43 Me. 158 . )364 S. 183 Pangborn v. Westlake, 36 Iowa 546 Partridge v. Hood, 120 Mass. 403 Pennsylvania Coal Co. v. Blake, 85 N. Y. 226 Perkins v. Loekwood, 100 Mass. 249 Peters v. Westborough, 19 Pick. (Mass Phoenix Life Ins. Co. v. Eaddin, 120 U. Platner v. Patehin, 19 Wis. 333 . Poison V. Stewart, 167 Mass. 211 . Pope V. Allis, 115 V. S. 363 Pratt V. Trustees, 93 111. 475 Presbyterian Church of Albany v. Cooper, 112 N, Eay V. Thompson, 12 Cush. (Mass.) 281 Reed v. Insurance Co., 95 U. S. 23 Eeed v. Pierce, 36 Me. 455 . Reynolds v. Robinson, 110 N. Y. 654 Reynolds v. Stevenson, 4 Ind. 619 Ricketts v. Scothorn, 57 Neb. 51 . Robinson v. Magee, 9 Cal. 81 Rochester Lantern Co. v. Stiles &c. Co, Roehm v. Horst, 178 U. S. 1 Roosevelt v. Cebra, 17 Johns. (N. Y.) 108 Ross V. Drinkard's Adm'r, 35 Ala. 434 Rovegno v. Defferari, 40 Cal. 459 . Royal Ins. Co. v. Beatty, 119 Penn. St. 6 Russell V. Cook, 3 Hill (N. Y.) 504 135 N.Y, PASS 308 67 864 399 542 584 123 676 696, 76 602, 100 Y. 517 315 348 162 197 120 275 478 801 595 35 756 209 . 534 . 611 . 669 . 502 . 322 . 732 . 686 612, 447 . 843 . 683 . 291 . 261 . 21 . 165 TABLE OF CASES REPORTED. XVU (P' Sanders v. Pottlitzer Bros. Fruit Co., 144 N Santa Clara &c. Co. v. Hayes, 76 Cal. 387 Schnell v. Nell, 17 Ind. 29 . . . School Directors v. Boomliour, 83 111. 17 Sears v. Grand Lodge &c., 163 N. Y. 374 Shaber v. St. Paul Water Co., 30 Minn. 179 Shaw V. Eailroad Co., 101 U. S. 567 . Sheldon v. Davidson, 85 Wis. 138 Shelton v. Ellis, 70 Ga. 297 . Shepard v. Rhodes, 7 R. I. 470 . Sherman v. Kitsmiller, Adm'r, 17 S. & R Sherwin v. Fletcher, 168 Mass. 413 Sherwood v. Walker, 66 Mich. 568/ Siegel, Cooper & Co. v. Easton & Prince Co, 550 Silsbee v. Webber, 171 Mass. 378 . Slater Woollen Co. v. Lamb, 143 Mass. 420 Smith V. Mace, 44 N'. H. 553 Smith V. Whildin, 10 Penn. St. 39 Southard v. Boyd, 61 N. Y. 177 . Soutier v. Kellerman, 18 Mo. 509 . Spalding v. Rosa, 71 IST. Y. 40 Stensgaard v. Smith, 43 Minn. 11 Sterling v. Sinnickson, 2 South. (N. J.) 756 Stevens v. Coon, 1 Pinney (Wis.) 356 . Stevens v. Ludlum, 46 Minn. 160 . Story V. Lovett, 1 E. D. Smith (IST. Y. C. P.) Stovall V. McCutchen, 54 S. W. (Ky.) 969 Streeper v. Williams, 48 Penn. St. 450 Sturges V. Crowninshield, 4 Wheat. (U. S.) Sullivan V. Sullivan, 161 N. Y. 654 Sweigart v. Berk, 8 S. & E. (Penn.) 308 Tayloe v. Ins. Co., 9 Howard (U. S.) 390 Taylor & Co., Assigned Estate of, 192 Penn, Thorne v. Deas, 4 Johns. (N. Y.) 84 . Thurston v. Arnold, 43 Iowa, 43 . Tolhurst V. Powers, 133 N. Y. 460 Tracy v. Albany Exch. Co., 7 N. Y. 472 Trainer v. Trumbull, 141 Mass. 527 Trist V. Child, 21 Wall. (U. S.) 441 Y. 209 ,166 45 lU. 163 122 St. 304 PAGE . 710 372, 376 . 138 . 271 . 774 . 472 . 460 . 296 . 262 . 210 73, 157 . 761 . 249 . 875 . 788 . 222 . 660 . 176 . 347 . 508 . 656 . 26 . 359 . 155 303, 280 . 600 . 764 613, 517 . 674 . 821 . 490 . 29 . 796 . 167 604, 515 . 174 . 679 . 220 . 340 XVlll TABLE OF CASES REPORTED. Traeblood v. Trueblood, 8 Ind. 195 Tyler v. Carlisle, 79 Me. 210 PAOE 218 390 United States v. Grossmayer, 9 Wall. (U. S.) 72 340, 215 Vanuxem v. Burr, 151 Mass. 386 632 Vitty V. Ely, 51 N. Y. App. Div. 44 718 Walden v. Louisiana Ins. Co., 12 La. 134 .... 27.3 Walker v. Cronin, 107 Mass. 555 416 Walker u Ebert, 29 Wis. 194 238 Walker v. Whitehead, 16 Wall. (U. S.) 314 . . . . 690 Warner v. Texas & Pac. Ey., 164 U. S. 418 . . . . 721 Warnock v. Davis, 104 U. S. 775 333 Wells V. Caywood, 3 Col. 487 233 White V. Corlies, 46 N. Y. 467 21, 50, 7 Whitehead v. Burgess, 61 N. J. L. 75 822 Wilcox V. Iowa Wesleyan Univ., 32 Iowa. 367 . . . 268 Williams v. Carrington, 1 Hilton (N. Y. C. P.) 615 . . 195 Willoughby v. Willoughby, 5 N. H. 244 . . , . 496 Wilmington Transp. Co. v. O'Neil, 98 Cal. 1 ... 654 Windmuller v. Pope, 107 N. Y. 674 555 Wolcott V. Mount, 36 N. J. L. 262 . . . . 611, 598 Wolf V. Marsh, 64 Cal. 228 560 Wood V. Boynton, 64 Wis. 265 267 Wood V. Moriarty, 15 B,. I. 518 603, 430 Woodberry v. Warner, 63 Ark. 488 674 Woodruff V. Saul, 70 Ga. 271 272 TABLE OF CASES CITED. KoTi. — Thli table Includes only the oases cited by the editors in the notes. Cases digested, or to which particular attention is called, are indicated by a " d " after the page nnmber. Adams v. Gay, 323. Adams Badiator &c. Co. v. Schnader, 485. Albany City Sav. Inst, v, Burdick, 307. Alden v. Thurber, 524. Alexander v. Morgan, 470 d. Allen V. Baker, 485. Allen V. Bryson, 206 d. Allen V. Gardiner, 323. Allen V. Hammond, 248. Allison V. Chandler, 611. Alpaugh V. Wood, 487 d. Anderson v. Rice, 572. Anderson v. Spence, 118. Andrews v. Dyer, 507. Auditor v. Ballard, 67. B. Bacon v. Bouham, 456. Bagley v. Cleveland Rolling Mill Co., 603. Baldwin v. Hale, 682. Ballon V. Earle, 19. Barfleld v. Price, 247. ' Beach v. First M. E. Ch., 38. Beck &c. Co. V. Colorado &c. Co., 517-18 d. Bedell v. Herring, 243. Bedell v. Wilder, 248. Beecher v. Conradt, 582. Beeman v. Banta, 612. Bellows V. Sowles, 167. Beninger v. Corwin, 288. Bernard v. Taylor, 325, 658. Bigelow V. Stilphens, 666. Billmgs' Appeal, 485. Binghamton Bridge, The, 699 d. Bixby V. Dunlap, 418. Blewitt V. Boorum, 503. Bloch II. Isham, 476. Bloom V. Richards, 323. Blossom V. Dodd, 20. Boothby v. Scales, 611. Boston & Maine R. v. Bartlett, 62. Bourlier Bros. v. Macauley, 418 d. Bowery Nat. Bk. v. Wilson, 347, 462. Bowman v. Phillips, 361. Boyle V. Adams, 347. Boyson v. Thorn, 419 d. Bradley v. Levy, 572. Bradshaw v. Combs, 503. Brigg V. Hilton, 609. Britton v. Turner, 658. Bronson v. Kinzie, 690, 692. Brooks V. Cooper, 347. Brown v. Everhard, 503. Brown v. Farmers' Loan & Trust Co., 100 d. Brown v. Montgomery, 288 d. Brown v. Tuttle, 357. Brownlee v. Lowe, 187. Brunswick Gas Light Co. «. TTnited Gas &c. Co., 224 d. Bryan v. Watson, 323 d. Bums V. Lane, 292. Burton v. Larkin, 421. Butler V. Butler, 574. C. Cahen v. Piatt, 594. Canada So. Ry. v. Gebhard, 674. Canal Co. v. Ray, 530. Candee v. Smith, 489. Cape Fear &c. Nav. Co. v. Wilcox, 661. XX TABLE OF CASES CITED. Capen v. Barrows, 497 d. Carter v. Nichols, 457. Cary v. Gniman, 609. Catskill Bk. v. Messenger, 488. Central Trans. Co. ti. Pullman's Car Co., 223 d. Chafiee v. Jones, 489. Chalfant v. Payton, 360-1 d. Chamberlain v. Ins. Co., 437, 445. Chambers v. Baldwin, 419 d. Chapin v. Dobson, 503. Chapman v. Rose, 243. Chase ii. Pitz, 485. Chatham Furnace Co. v. Moflat, 271. Chipley v. Atkinson, 418 d. Chipman v. Morrill, 489. Christian College v. Hendley, 199. Clapp V. Pawtucket Inst, for Sav., 497 d. Clark V. Allen, 337. Clark V. Marsiglia, 613. Clark V. Mayor, 572 d. Clark V. Owens, 501. Cleary «. Sohier, 653. Clodfelter v. Cox, 459. Clough V. Baker, 576. Clough V. Goggins, 323. Coates V. Penn. Ins. Co., 421. Cole V. Hughes, 476. Collyer v. Moulton, 626. Connor v. Stanley, 314 d. Cooke V. Nathan, 292. Costello V. Ten Eyok, 323. Cotheal v. Talmage, 521. Cottage St. Ch. v. Kendall, 38, 199. Coulter V. Robertson, 401. Cowley V. Smyth, 301. Crane v. Ailing, 488. Crane v. Powell, 100. Cranson v. Goss, 323. Crawford v. Chapman, 472. Crocker v. Beal, 492. Crocker v. Whitney, 444. Cromwell v. Tate's Ex'r, 86. Crouch tJ. Gutraann, 543. Croyle v. Moses, 284 d. D. Da Lee v. Blackburn, 301. Danforth v. Tennessee &c. R'y Co., 568. Dartmouth College v. Woodward, 699 d. Davenport v. First Cong. Society, 187. Davis V. Bronson, 574 d. Davis V. Nuzum, 301. Davis V. Wells, 29. Davison v. Von Lingen, 515, 611. Day V. McAllister, 323. Day V. Pool, 609. Dazey v. Mills, 446. Dean v. Emerson, 376. Dean v. Morey, 284. Dean v. St. Paul & D. R. Co., 457. Dean v. Walker, 421. Deaver v. Bennett, 389. De Camp v. Hamma, 243. Delaware Railroad Tax, 699. Denny v. Bennett, 685. Denver Fire Ins. Co. ■». McClelland, 224. Devlin v. Mayor, 449 d. Diamond Match Co. v. Roeber, 521. Dickinson v. Calahan's Adm'r, 668. Dickson v. Dickson, 418. Dillon V. Anderson, 674. Dodge D. McClintock, 576. Doggett V. Emerson, 271. Donnell D. Manson, 492. Doolittle V. McCuUough, 572 d, 575 d. Doty V. Wilson, 208. Douglass V. Rowland, 29. Drummond v. Crane, 485. Duftany v. Ferguson, 291. Dulaney v. Rogers, 301. Duncan d. N. Y. Mut. Ins. Co., 248. Durant v. Rhener, 323. Durbin ». Kuney, 489. Duval V. Wellman, 658. E. Easterly v. Barber, 490 d. Eaton V. Avery, 306. Eberle v. Mehrback, 323. Eckstein v. Downing, 619. Eddy V. Davis, 582. Edwards u. Kearzey, 692 d. Edwards v. Peterson, 456. Edwards v. Skirving, 398. Eggleston v. Buck, 496. Ehle V. Purdy, 492. Eldred v. Bank, 489. TABLE OP CASES CITED. XXI ElUott V. BeU, 487. Elliott V. Caldwell, 545-6 d. Ely V. Hallett, 274. Emmeluth v. Home &c. Association, 497 d. Etting V. Bank of U. S., 284. Exchange Bk. v. McLoon, 457. Exhaust Vent. Co. v. Chicago &c. Ry., 554. Fami v. Teason, 492. Eaulkner v. Faulkner, 437 d. Fay & Co. v. Jenks & Co., 494 d. Fay V. Guynon, 446. Fetrow v. Wiseman, 219-20 d. Finn v. Donahue, 323. First N. B. v. Yocum, 301. First Pres. Ch. v. Cooper, 199. Fish V. Cleland, 314. Fitch V. Snedaker, 75. Foley V. Speir, 380. Ford V. Mitchell, 467. Foster v. Hooper, 489. Fowler v. Callan, 357. Franklin v. Long, 611. G. Gamewell Fire Alarm Tel. Co. v. Crane, 372. Gelpcke v. Dubuque, 376, 674. Gibbs V. Consolidated Gas Co., 372 d. Gibbs V. Linabury, 243. Gibson v. Cooke, 457. Giles V. Canary, 495 d. Given v. Driggs, 398. Given v. Wright, 699. Gleason v. Dyke, 415. Glenn v. Farmers' Bank, 401. Goddard v. Monitor Ins. Co., 274. Goldsborough ■». Gable, 185. Goodrich v. Tenney, 351. Goss V. Ellison, 488. Gottschalk v. Stein, 619. Gould V. Brown, 576. Grandin v. Grandin, 167 d. Gray v. Hamil, 205. Green v. Batson, 504. Green v. Gilbert, 658. Greenawalt v. Kohne, 504. Greenfield v. Gilman, 372 d. Gregory v. Schoenell, 273 d. Griffin v. Colver, 611. H. Hacker's Appeal, 86. Hale V. Spaulding, 503, 626. Hale V. Trout, 611. Halloran v. Whitoomb, 446. Halsted v. Francis, 437. Hamer v. Sidway, 6, 100. Hamilton v. Home Ins. Co., 363d. Hammond ■». Pennook, 271. Handy v. St. Paul Globe Co., 380. Hardy v. Waters, 219 d. Harms v. McCormick, 429. Hamer v. Dipple, 220. Hart V. Lyon, 476. Hartford Ins. Co. v. Olcott, 445. Haskins v. Eoyster, 418. Hastings v. DoUarhide, 219 d. Hastings v. Ins. Co. , 445. Haven v. Neal, 301. Hawkins v. Graham, 548 d. Hayward v. Leonard, 543. Hazard v. New. Eng. Marine Ins. Co. , 247 d. Heaton v. Angler, 530. Heckemann v. Young, 489. Hellams v. Abercrombie, 323. Hendriok v. Lindsay, 421 d. Higert v. Indiana Asbury Univ., 199. Hill V. Morse, 490 d. Hix V. Davis, 495. Hoeflinger v. Wells, 541 d. Holcomb V. Noble, 301. Homer v. Ins. Co. , 503. Hosmer v. Wilson, 572 d. Houghwout V. Boisaubin, 62. Howard v. Daly, 613. Howard v. Mfg. Co., 612. Howland v. Lounds, 65. Hubble V. Cole, 510. Hudson V. Hudson, 572 d. Hughes V. Oregon By. & Nav. Co., 429. Hull V. Buggies, 318, 391. Hunt V. Danforth, 469. Hunt V. Jones, 100. XXll TABLE OF CASES CITED. Indiana &c. Ry. v. Adamson, 492. J. Jackson «. Port, 469. Jacobs v. Uavis, 497. James v. Newton, 457. Jamieson v. Indiana Nat. Gas Co., 647. Janin v. Browne, 485. JeSerson v. Ascli, 428, 429. Jolinson V. Brooks, 618-19. Johnson v. Harvey, 490 d. Juilliard v. Greenman, 674. Kadisli V. Young, 574. Kane v. Clough, 456. Kane v. Hood, 582. Katz V. Bedford, 543. Kellogg V. Tompson, 503. Kelly V. Bradford, 543. Kendall v. Robertson, 401. Kershaw v. Kelsey, 217. Kidder v. Kidder, 488. Kimball, The, 541. King V. Eagle Mills, 301. Kitohin v. Loudenbaok, 156. Kurtz V. Frank, 556. Kyte V. Com. Un. Ins. Co., 534 d. Lacy V. Getman, 485, 658. Laidlaw v. Organ, 264. Lansing v. Dodd, 521. Lapish V. Wells, 284 d. La Rue v. Groezinger, 448-9 d. Lathrop v. Knapp, 199. Lawrence v. Miller, 658. Legal Tender Cases, 674. Lennox v. Eldred, 479. Lewis V. Browning, 35. Lewis V. McLemore, 271. Lindsay v. Smith, 376, 378. Linneman v. Moross, 437. Long V. Warren, 307. Loper V. Robinson, 301. Loud V. Pomona &c. Co., 576, 582. Louisiana v. Mayor, 81. Ludlow V. McCrea, 497. Lynch v. Mercantile Trust Co., 301. Lynch v. Sellers, 575. Lyon V. Mitchell, 347. M. McAlIester v. Sprague, 488-9 d. McCandless v. Alleghany Bessemer Steel Co., 177 d. McCauley v. Davidson, 174. McClair v. Austin, 572. MoCraoken v. Hayward, 692 d. McCreery v. Day, 631. McCulloch c. Eagle Ins. Co., 35. McDowell V. Laev, 429 d. Molntyre v. Buell, 301. McKenzie v. Harrison, 530 d. Maclay v. Harvey, 75. McMillan v. Ames, 86. Mactier v. Frith, 35. Madden v. Gilmer, 479. Madison Sq. Bk. v. Pierce, 415 d. Mandeville v. Welch, 457. Manhattan Life Ins. Co. ■». Buck, 658, Manning v. Sprague, 356 d. Marquis v. Laureston, 575. Marsh v. Low, 609. Marston v. Knight, 611. Mason v. Eldred, 489. Matteson v. Holt, 609. Matthews v. Associated Press, 371-2 d. Maynard v. Maynard, 288 d, 613. Megutre v. Corwine, 347. Melbourne &c. R. Co. v. Louisville &c. R. Co., 174. Merrill v. Packer, 156, 339 d. Merritt v. Earle, 323 d. Miller v. Ammon, 318. Miller v. The State, 699 d. Millard v. Thorn, 435 d. Minneapolis &c. Ry. v. Columbus Rolling Mill, 41. Moline Scale Co. v. Beed, 574. Moore v. Detroit Loo. Works, 180. Moore v. Ins. Co., 515. Moore v. Murdock, 323. Moreland v. Atchison, 292. Morley v. Lake Shore Ry., 696. Morrill v. Wallace, 268. Mott V. Oppenheimer, 476 d. TABLE OF CASES CITED. ZZIU Moulton V. Kershaw, 54. Muller V. Eno, 609. Mulvey »i King, 301. Murray v. Mumford, 492. Mustard v. Wohlford's Heirs, 220. Mutual &c. Ass'n v. Hurst, 206 d. Myrick v. Dame, 492. N. ITash V. Minn. &c. Co., 306. National Bank v. Union Ins. Co., 280 d. - National Eurnaee Co. v. Keystone Mfg. Co., 54. Naumberg v. Young, 503. Nebraska, City of, v. Nebraska &c. Coke Co., 574. New V. Walker, 467. New Jersey v. Wilson, 699 d. New Orleans Gas Co. v. Louisiana Light Co., 699 d. New York &c. Co. v. Memphis Water Co., 452-3 d. Niblo V. Binsse, 653. Nichols V. S. S. Co., 568. Norringtonv. Wri^t, 268, 515, 646. Norton v. Coons, 489. O. O'Brien v. Young, 6. Odell V. Gray, 467 d. O'Donnell v. Leeman, 518. Ogden V. Saunders, 682. Old Dominion S. 8. Co. v. McKenna, 417 d. Oliver v. Gilmore, 377. Oregon Steam Nav. Co. v. Winsor, 376. Osborne v. O'Reilly, 180. Osoanyan v. Arms Co., 347. Owen V. Hall, 666. Paddock v. Strobridge, 284. Parker v. Macomber, 658. Parsons v. Sutton, 613. Patrick v. Bowman, 35. Patterson v. Caldwell, 456. Peltz V. Eichele, 376. Fenniman's Case, 692 d. People V. Keyser, 492. Perry v. Mount Hope Iron Co., 36. Phillips 17. Gallant, 243. Pierson v. Hooker, 492. Pipp V. Reynolds, 437. Pope V. Porter, 594. Porter v. Dunn, 572. Powers V. Bumcratz, 29. Providence Bk. v. BUlinga, 699. R. Reece v. Kyle, 357. Rice V. Manley, 419 d. Rich V. N. Y. C. & H. R. R. R. Co., 6. Richards v. Amer. Desk &c. Co., 372. Richmond v. Moore, 323. Riegel v. Amer. Life Ins. Co., 248. Robinson V. Harbour, 582. Robinson v. Jewett, 187. Roebling &c. Co. v. Lock Stitch &c. Co., 574. Rogers v. Gosnell, 421. Rogers v. Hanson, 611. Rogers v. Rogers, 181. Rothholz V. Schwartz, 619. Rowland d: N. Y. &c. R. Co., 262. Rowley v. Stoddard, 488. Runkle v. Johnson, 582. Rupley V. Daggett, 262. Russell V. Stewart, 67. Salisbury v. Howe, 302. Salisbury v. Shirley, 469. Sanborn v. Cole, 501 d. Santa Clara &c. Co. v. Hayes, 372. Savings Bk. v. Shaffer, 666. Sayre v. Wilson, 504. Sceva V. True, 6. Sohnell v. Nell, 151, 167. School Directors v. Boomhour, 301. Schuler v. Myton, 187. Schumaker v. Mather, 307. Scott V. McMillan, 476. Searles v. Reed, 323. Seattle Bd. of Trade v. Hayden, 237. Sessions v. Johnson, 495 d. Seymour v. Western R. Co., 497. Shaffner v. Pinchback, 389. XXIV TABLE OF CASES CITED. Shamp V. Meyer, 421. Shaw V. Carpenter, 380. Sheldon v. Davidson, 307. Sherley v. Peehl, 62. Shermans. Kitsmiller, 611. Shoemaker v. Benedict, 489. Siler V. Gray, 485. Silshy Mfg. Co. v. Chico, 554. Sims 1). Ferrill, 291 d. Singleton v. Bremar, 398, 401. Slater Woollen Co. v. Lamb, 6. Slaughter's Adm'r v. Gerson, 307 d. Smith's Appeal, 376. Smith V. Collins, 81. Smith V. Hale, 614. Smith V. Ferine, 151. Solon V. Williamsburgh Sav. Bk., 86. Spurr V. Benedict, 271. Stamper v. Temple, 65. Stanton v. Embrey, 358-7 d. Stark V. Parker, 658. State V. Chandler, 494. Steele v. Lord, 669. Stewart v. Keteltas, 180. Stewart v. Stone, 653. Stewart v. Wyoming Banche Co., 284 d. Stockbridge v. West Stockbridge, 601 d. Strauss v. Meertief, 613. Sun Mut. Ins. Co. v. Ocean Ins. Co., 274 d. Swain v. Schieffelin, 612. Swan V. Scott, 398. Swann v. Swann, 323. Sweeney v. Thomason, 510. Tayloe v. Merchants' Fire Ins. Co., 541. Taylor v. Bemiss, 357 d. Taylor v. Leith, 271. Terry v. Anderson, 692. Thayer v. Daniels, 459. Thomas v. Barnes, 180. Thomas v. Rock Island &o. Mining Co., 457. Thompson v. Rose, 469. Thornton v. Wynn, 609. Thurston v. Arnold, 619. Tobias v. Rogers, 489-90 d. Toledo &c. Ry. Co. i>. Penn. Co., 417 d. Tool Co. V. Norris, 347 d. Traders' Bank v. Alsop, 401. Trainer v. Trumbull, 6. Trevor v. Wood, 35. Trimble v. Strother, 421. Trist V. Child, 457. Troewert v. Decker, 323. Trustees v. Stewart, 199. Trustees of Dartmouth Coll. v. Wood- ward, 699. Tucker v. White, 301. Tufts V. Lawrence, 574. Twenty-Third St. Bap. Ch. v. Cornell, 38. Tyler v. Carlisle, 411. U. Union Bk. v. Coster's Bx'rs, 20. Union Bk. v. Willis, 600. Univ. of Des Moines v. Livingstone, 199. Upton V. Tribilcock, 291. United States v. Behan, 567-8 d, 612. United States v. Bradley, 376. United States v. Peck, 561. V. Van Brunt v. Day, 603. Van Buskirk v. Hartford Ins. Co.^ 459 d. Van Clief v. Van Vechten, 546 d. Vassar v. Camp, 35 d. Voorhees v. Earl, 609. Vrooman v. Turner, 428 d. W. Wade V. Kalbfleisoh, 485. Wakeman v. Dalley, .301. Wakeman v. Wheeler & Wilson Mfg. Co., 611-12 d. Walker v. Brooks, 453. Walker v. Ebert, 467. Walker v. Mauro, 460 d. Walker v. Ocean Bk., 467 d. Walls V. Bailey, 510. Walter A. Wood & Co. ». Smith, 654 d. Ward V. Morrison, 450. Wamock v. Davis, 452. TABLE OF CASES CITED. XXV Webb V. Steele, 446 d. Webber v. Barry, 418 d. Wells V. Alexandre, 54. Wells V. Monihan, 100 d. Wells, Fargo & Co. v. Pacific Ins. Co., 268. Westman v. Krumweide, 503. Wharton v. Winch, 568 d. Wheat V. Cross, 35. Whitaker v. Whitaker, 151. White V. Rintoul, 118. Wlckham v. Grant, 273 d. Widiman v. Brown, 181. Wilkinson v. Heavenrich, 110. Williams v. IngersoU, 458-9 d. Wilson V. Tucker, 502. WindmuUer v. Pope, 611, Wolcott V. Mount, 268. Wolfe V. Howes, 658. Wood V. Orford, 479. Wood Mowing &c. Co. v. Gaertner, 503. Woods V. Woods, 690. Woodstock Iron Co. v. Richmond &c. Co., 347. Worley v. Sipe, 421. Wortendyke v. Meehan, 401. Worthington, Matter of, 452. Yorks V. Peck, 489. Young V. Stevens, 227. Zimmer v. K Y. C. &c. R., 19. CASES 01^ COI^TRACT. Paet I. INTRODUCTION. HEETZOG V. HEETZOG. 29 PENNSYLVANIA STATE, 166. —1867. This suit was brought by John Hertzog to recover from the estate of his father compensation for services rendered the latter in his lifetime, and for money lent. LowKiB, J. " Express contracts are, where the terms of the agree- ment are openly uttered and avowed at the time of the making : as, to deliver an ox or ten loads of timber, or to pay a stated price for certain goods. Implied are such as reason and justice dictate; and which, there- fore, the law presumes that every man undertakes to perform. As, if I employ a person to do any business for me, or perform any work, the law implies that I undertook and contracted to pay him as much as his labor deserves. If I take up wares of a tradesman without any agreement of price, the law concludes that I contracted to pay their real value." This is the language of Blackstone (2 Comm. 443), and it is open to some criticism. There is some looseness of thought in supposing that reason and justice ever dictate any contracts be- tween parties, or impose such upon them. All true contracts grow out of the intentions of the parties to transactions, and are dictated only by their mutual and accordant wills. When this intention is expressed, we call the contract an express one. When it is not expressed, it may be inferred, implied, or presumed, from circumstances as really existing, and then the contract, thus ascertained, is called an implied one. The instances given by Blackstone are an illustration of this. But it appears in another place (3 Comm. 159-166) that Black- stone introduces this thought about reason and justice dictating 2 INTRODUCTION. [Pam I. contracts, in order to embrace, under his definition of an implied contract, another large class of relations, which involve no in- tention to contract at all, though they may be treated as if they did. Thus, whenever, not our variant notions of reason and jus- tice, but the common sense and common justice of the country, and therefore the common law or statute law, impose upon any one a duty, irrespective of contract, and allow it to be enforced by a contract remedy, he calls this a case of implied contract. Thus out of torts grows the duty of compensation, and in many cases the tort may be waived, and the action brought in assumpsit. It is quite apparent, therefore, that radically different relations are classified under the same term, and this must often give rise to indistinctness of thought. And this was not at all necessary ; for we have another well-authorized technical term exactly adapted to the of&ce of making the true distinction. The latter class are merely constructive contracts, while the former are truly implied ones. In one case the contract is mere fiction, a form imposed in order to adapt the case to a given remedy ; in the other it is a fact legitimately inferred. In one, the intention is disregarded ; in the other, it is ascertained and enforced. In one, the duty defines the contract ; in the other, the contract defines the duty. We have, therefore, in law three classes of relation called contracts. 1. Constructive contracts, which are fictions of law adapted to enforce legal duties by actions of contract, where no proper contract exists, express or implied. 2. Implied contracts, which arise under circumstances which, according to the ordinary course of dealing and the common understanding of men, show a mutual intention to contract. 3. Express contracts, already sufficiently distinguished. In the present case there is no pretense of a constructive con- tract, but only of a proper one, either express or implied. And it is scarcely insisted that the law would imply one in such a case as this ; yet we may present the principle of the case the more clearly, by showing why it is not one of implied contract. The law ordinarily presumes or implies a contract whenever this is necessary to account for other relations found to have existed between the parties. Pakt I.] INTRODDCTION. 3 Thus if a man is found to have done work for another, and there appears no known relation between them that accounts for such service, the law presumes a contract of hiring. But if a man's house takes fire, the law does not presume or imply a contract to pay his neighbors for their services in saving his property. The common principles of human conduct mark self-interest as the motive of action in the one case, and kindness in the other ; and therefore, by common custom, compensation is mutually counted on in one case, and in the other not. On the same principle the law presumes that the exclusive possession of land by a stranger to the title is adverse, unless there be some family or other relation that may account for it. And such a possession by one tenant in common is not presumed adverse to his co-tenants, because it is, prima facie, accounted for by the relation. And so of possession of land by a son of the owner. And in Mayow's Case (Latch, 68) where an heir was in a foreign land at the time of a descent cast upon him, and his younger brother entered, he was presumed to have entered for the benefit of the heir. And one who enters as a tenant of the owner is not presumed to hold adversely even after his term has expired. In all such cases, if there is a relation adequate to account for the possession, the law accounts for it by that rela^ tion, unless the contrary be proved. A party who relies upon a contract must prove its existence ; and this he does not do by merely proving a set of circumstances that can be accounted for by another relation appearing to exist between the parties. Mr. Justice Rogers is entitled to the gratitude of the public for having, in several cases, demonstrated the force of this prin- ciple in interpreting transactions between parents and children : 3 Penn. R. 365; 3 Eawle, 249; 5 W. & S. 357, 513; and he has been faithfully followed in many other cases : 8 Watts, 366 ; 8 Penn. State R. 213; 9 Id. 262; 12 Id. 175 ; 14 Id. 201; 19 Id. 251, 366; 25 Id. 308; 26 Id. 372, 383. Every induction, inference, implication, or presumption in rea^ soning bf any kind, is a logical conclusion derived from, and demanded by, certain data or ascertained circumstances. If such circumstances demand the conclusion of a contract to account for them, a contract is proved; if not, not. If we find, as ascer- 4 INTRODUCTION. [Pabt I. tained circumstances, that a stranger has been in the employ- ment of another, we immediately infer a contract of hiring, because the principles of individuality and self-interest, common to human nature, and therefore the customs of society, require this inference. But if we find a son in the employment of his father, we do not infer a contract of hiring, because the principle of family affection is suflB.cient to account for the family association, and does not demand the inference of a contract. And besides this, the position of a son in a family is always esteemed better than that of a hired servant, and it is very rare for sons remaining in their father's family, even after they arrive at age, to become mere hired servants. If they do not go to work or business on their own account, it is generally because they perceive no suffi- cient inducement to sever the family bond, and very often because they lack the energy and independence necessary for such a course ; and very seldom because their father desires to use them as hired servants. Customarily no charges are made for board- ing and clothing and pocket-money on one side, or for work on the other ; but all is placed to the account of filial and parental duty and relationship. Judging from the somewhat discordant testimony in the present case, this son remained in the employment of his father until he was about forty years old ; for we take no account of his temporary absence. While living with his father, in 1842, he got married, and brought his wife to live with him in the house of his parents. Afterwards his father placed him on another farm of the father, and very soon followed him there, and they all lived together until the father's death in 1849. The farm was the father's, and it was managed by him and in his name, and the son worked on it under him. No accounts were kept between them, and the presumption is that the son and his family obtained their entire living from the father while they were residing with him. Does the law, under the circumstances, presume that the parties mutually intended to be bound, as by contract, for the service and compensation of the son and his wife ? It is not pretended that it does. But it is insisted that there are other circumstances Part I.] INTBODUCTION. 5 besides these ■which, taken together, are evidence of an express contract for compensation in some form, and we are to examine this. In this court it is insisted that the contract was that the farm should be worked for the joint benefit of the father and son, and that the profits were to be divided ; but there is not a shadow of evidence of this. And moreover it is quite apparent that it was wages only that was claimed before the jury for the services of the son and his wife, and all the evidence and the charge point only in that direction. There was no kind of evidence of the annual products. Have we then any evidence of an express contract of the father to pay his son for his work or that of his wife? We concede that, in a case of this kind, an express contract may be proved by indirect or circumstantial evidence. If the parties kept accounts between them, these might show it. Or it might be sufficient to show that money was periodically paid to the son as wages ; or, if there be no creditors to object, that a settle- ment for wages was had, and a balance agreed upon. But there is nothing of the sort here. The court told the jury that a contract of hiring might be inferred from the evidence of Stamm and Eoderick. Yet these witnesses add nothing to the facts already recited, except that the father told them, shortly before his death, that he intended to pay his son for his work. This is no making of a contract or admission of one ; but rather the contrary. It admits that the son deserved some reward from his father, but not that he had a contract for any. And when the son asked Roderick to see the father about pay- ing him for his work, he. did not pretend that there was any contract, but only that he had often spoken to his father about getting pay, and had always been put off. All this makes it very apparent that it was a contract that was wanted, and not at all that one already existed; and the court was in error in saying it might be inferred, from such talk, that there was a contract of any kind between the parties. The difficulty in trying causes of this kind often arises from juries supposing that, because they have the decision of the 6 INTRODUCTION. Pabt I.] cause, therefore they may decide according to general principles of honesty and fairness, without reference to the law of the case. But this is a despotic power, and is lodged with no por- tion of this government. Their verdict may, in fact, declare what is honest between the parties, and yet it may be a mere usurpation of power, and thus be an effort to correct one evil by a greater one. Citizens have a right to form connections on their own terms and to be judged accordingly. When parties claim by contract, the contract proved must be the rule by which their rights are to be decided. To judge them by any other rule is to interfere with the liberty of the citizen. It is claimed that the son lent $500 of his wife's money to his father. The evidence of the fact and of its date is somewhat indistinct. Perhaps it was when the farm was bought. If the money was lent by her or her husband, or both, before the law of 1848 relating to married women, we think he might sue for it without joining his wife. Judgment reversed and a new trial awarded. Note. — For cases on constructive, or quasi, contract, see Trainer v. Trumbull, 141 Mass. 52T, post, p. 220 ; Slater Woollen Co. v. Lamb, 143 Mass. 420, post, p. 222, and note ; Seem v. True, 63 N. H. 627 ; O'Brien v. Toung, 95 N. Y. 428, post, p. 76. For a case discussing obligation arising from delict as distinguished from obligation arising from breach of contract, see Rich v. New York Cent, dt Hud. JSiv. B. B. Co., 87 N. Y. 382 ; S. C, Burdick's Cases on Torts, p. 1. For a case discussing obligation springing from agreement and yet dis- tinguishable from contract see the latter portion of Hamer v. Sidway, 124 N. Y. 538, post, p. 143. Paet II. THE FORMATION OF THE CONTRACT. CHAPTER I. OFFER AND ACCEPTANCE. § 1. Every contract springs from the acceptance of an offer. WHITE V. COELIES. 46 NEW YORK, 467.— 1871. Appeal from judgment of the General Term of the first judicial district, affirming a judgment entered upon a verdict for plaintiff. The action was for an alleged breach of contract. The plaintiff was a builder. The defendants were merchants. In September, 1865, the defendants furnished the plaintiff with specifications for fitting up a suit of offices at 57 Broadway, and requested him to make an estimate of the cost of doing the work. On Septem- ber twenty-eighth the plaintiff left his estimate with the defend- ants, and they were to consider upon it, and inform the plaintiff of their conclusions. On the same day the defendants made a change in their specifications and sent a copy of the same, so changed, to the plaintiff for his assent under his estimate, which he assented to by signing the same and returning it to the defend- ants. On the day following, the defendants' book-keeper wrote the plaintiff the following note : " New York, September 29th. " Upon an agreement to finish the fitting up of offices 57 Broadway in two weeks from date, you can begin at once. " The writer will call again, probably between five and six this p.m. "W. H. R., " For J. W. CoRLiES & Co., 32 Dey street." 7 8 FORMATION OF CONTRACT. [Part H. No reply to this note was ever made by the plaintiff; and on the next day the same was countermanded by a second note from the defendants. Immediately on receipt of the note of September twenty-ninth, and before the countermand was forwarded, the plaintiff com- menced a performance by the purchase of lumber and beginning work thereon. And after receiving the countermand, the plaintiff brought this action for damages for a breach of contract. The court charged the jury as follows: "Prom the contents of this note which the plaintiff received, was it his duty to go down to Dey street (meaning to give notice of assent) before commenc- ing the work? In my opinion it was not. He had a right to act upon this note and commence the job, and that was a binding contract between the parties." To this defendants excepted. FoLGEE, J. We do not think that the jury found, or that the testimony shows, that there was any agreement between the parties, before the written communication of the defendants of September thirtieth was received by the plaintiff. This note did not make an agreement. It was a proposition, and must have been accepted by the plaintiff before either party was bound, in contract, to the other. The only overt action which is claimed by the plaintiff as indicating on his part an acceptance of the offer, was the purchase of the stuff necessary for the work, and commencing work, as we understand the testimony, upon that stuff. . We understand the rule to be, that where an offer is made by one party to another when they are not together, the acceptance of it by that other must be manifested by some appropriate act. It does not need that the acceptance shall come to the knowledge of the one making the offer before he shall be bound. But though the manifestation need not be brought to his knowledge before he becomes bound, he is not bound, if that manifestation is not put in a proper way to be in the usual course of events, in some reasonable time communicated to him. Thus a letter received by mail containing a proposal, may be answered by letter by mail, containing the acceptance. And in general, as soon as the answering letter is mailed, the contract is concluded. Though one party does not know of the acceptance, the manifestation thereof is put in the proper way of reaching him. Chap. I. § 1.] OFFER AND ACCEPTANCE. 9 In the case iu hand^ the plaintiff determined to accept. But a mental determination not indicated hj speech, or put in course of indication by act to the other party, is not an acceptance which will bind the other. Nor does an act, which, in itself, is no indication of an acceptance, become such, because accompanied by an unevinced mental determination. Where the act uninter- preted by concurrent evidence of the mental purpose accompany- ing it, is as well referable to one state of facts as another, it is no indication to the other party of an acceptance, and does not operate to hold him to his offer. Conceding that the testimony shows that the plaintiff did resolve to accept this offer, he did no act which indicated an acceptance of it to the defendants. He, a carpenter and builder, purchased stuff for the work. But it was stuff as fit for any other like work. He began work upon the stuff, but as he would have done for any other like work. There was nothing in his thought formed but not uttered, or in his acts, that indicated or set in motion an indication to the defendants of his acceptance of their offer, or which could necessarily result therein. But the charge of the learned judge was fairly to be understood by the jury as laying down the rule to them, that the plaintiff need not indicate to the defendants his acceptance of their offer; and that the purchase of stuff and working on it after receiving the note, made a, binding contract between the parties. In this we think the learned judge fell into error. The judgment appealed from must be reversed, and a new trial ordered, with costs to abide the event of the action. All concur, but Allen, J., not voting. Judgment reversed, and new trial ordered. GOEHAM'S ADM'E v. MEACHAM'S ADM'R. 63 VEKMONT, 231. — 1891. [Eeported herein at p. 8B.] 10 FORMATION OF CONTRACT. [Paet II. § 2. An offer or its acceptance or both may be made either by 'words or by conduct. FOGG V. POETSMOUTH ATHEN^ffiUM. 44 NEW HAMPSmRE, 116. — 1862. Assumpsit. The case was submitted to the decision of the court upon the following agreed statement of facts : The defendants are a corporation whose object is the support of a library and public reading-room, at which latter a large number of newspapers are taken. Some are subscribed and paid for by the defendants ; others are placed there gratuitously by the pub- lishers and others ; and some are sent there apparently for adver- tising purposes merely, and of course gratuitously. The Independent Democrat newspaper was furnished to the defendants, through the mail, by its then publishers, from Vol. 3, No. 1 (May 1, 1847). On the 29th day of November, 1848, a bill for the paper, from Vol. 3, No. 1 (May 1, 1847), to Vol. 6, No. 1 (May 1, 1849), two years, at $1.50 per year, was presented to the defendants by one T. H. Miller, agent for the then publishers, for payment. The defendants objected that they had never sub- scribed for the paper, and were not bound to pay for it. They at first refused on that ground to pay for it, but finally paid the bill to said Miller, and took upon the back thereof a receipt in the following words and figures : " Nov. 29, 1848. " The within, bill paid this day, and the paper is henceforth to be dis- continued. "T. H. Miller, for Hood & Co." Hood & Co. were the publishers of the paper from May 1, 1847, until February 12, 1849, when that firm was dissolved, and the paper was afterward published by the present plaintiffs. The change of publishers was announced, editorially and otherwise, in the paper of February 15, 1849, and the names of the new publishers were conspicuously inserted in each subsequent num- ber of the paper, but it did not appear that the change was actually known to Mr. Hatch, the secretary and treasurer of the Chap. I. § 2.] OFFER AND ACCEPTANCE. 11 corporation, who settled the above-named bill, and who continued in the office till January, 1850. The plaintiffs had no knowledge of the agreement of the agent of Hood & Co. to discontinue the paper, as set forth in the receipt of November 29, 1848, until notified thereof by the defendants, after they had furnished the paper to the defendants for a year or more; the books of Hood & Co., which came into their hands, only showing that the defendants had paid for the paper, in advance, to May 1, 1849. After the payment of the bill and the giving of the receipt above recited, the paper continued to be regularly forwarded by its publishers, through the mail, to the defendants, from the date of said receipt until May 1, 1849, the expiration of the period named in said bill ; and was in like manner forwarded from May 1, 1849, to January 1, 1860, or from Vol. 5, No. 1, to Vol. 15, No. 35, inclusive, the period claimed to be recovered for in this suit; and was during all that time constantly taken from the post-office by the parties employed by the defendants to take charge of their reading-room, build fires, etc., and placed in their reading-room. Payment was several times demanded during the latter period, of the defendants, by an agent or agents of the plaintiffs ; but the defendants refused to pay, on the ground that they were not subscribers for the paper. Conspicuously printed in each number of the paper sent to and received by the defendants were the following : " Terms of Publication : By mail, express, or carrier, $1.50 a year, in advance ; $2 if not paid within the year. No paper discontinued (except at the option of the publishers) unless all arrearages are paid." The questions arising upon the foregoing case were reserved and assigned to the determination of the whole court. Nesmith, J. There is no pretense upon the agreed statement of this case that the defendants can be charged upon the ground that they were subscribers for the plaintiffs' newspaper, or that they were liable in consequence of the existence of any express contract whatever. But the question now is, have the defendants so conducted as to make themselves liable to pay for the plaintiffs' newspaper for the six years prior to the date of the plaintiffs' 12 FORMATION OF CONTRACT. [Part II. writ, Tinder an implied contract raised by the law and made applicable to this case. If the seller does in any case what is usual, or what the nature of the case makes convenient and proper, to pass the effectual control of the goods from himself to the buyer, this is always a delivery. In like manner, as to the question of acceptance, we must inquire into the intention of the buyer, as evinced by his declarations and acts, the nature of the goods, and the circum- stances of the case. If the buyer intend to retain possession of the goods, and manifests this intention by a suitable act, it is an actual acceptance of them; or this intention may be mani- fested by a great variety of acts in accordance with the varying circumstances of each case. 2 Pars, on Con. 325. Again, the law will imply an assumpsit, and the owner of goods has been permitted to recover in this form of action, where they have been actually applied, appropriated, and converted by the defendant to his own beneficial use. Hitchin v. Campbell, 2 W. Black, 827; Johnson v. Spiller, 1 Doug. 167; Hill v. Davis, 3 N. H. 384, and the cases there cited. Where there has been such a specific appropriation of the property in question, the property passes, subject to the vendor's lien for the price. Bohde v. Thwaites, 6 B. & 0. 392. In Baines v. Jevons (7 C. & P. 617) the question was, whether the defendant had purchased and accepted a fire engine. It was a question of fact for the jury to determine. Lord Abinger told the jury, if the defendant had treated the fire engine as his own, and dealt with it as such, if so, the plaintiff was entitled to recover for its price. And the jury so found. 2 Greenl. JEv. sec. 108. In Weatherby v. Banham (5 C. & P. 228) the plaintiff was publisher of a periodical called the Eacing Calendar. It appeared that he had for some years supplied a copy of that work, as fast as the numbers came out, to Mr. Westbrook ; Westbrook died in the year 1820; the defendant, Bonham, succeeded to Westbrook's property, and went to live in his house, and there kept an inn. The plaintiff, not knowing of Westbrook's death, continued to send the numbers of the Calendar, as they were published, by the stage-coach, directed to Westbrook. The plaintiff proved by a Chap. I. § 2.] OFFER AND ACCEPTANCE. 13 servant that they were received by the defendant, and no evidence ■was given that the defendant had ever offered to return them. The action was brought to recover the price of the Calendar for the years 1825 and 1826. Talford, for the defendant, objected that there never was any contract between the plaintiff and the present defendant, and that the plaintiff did not know him. But Lord Tenterden said : " If the defendant received the books and used them, I think the action is maintainable. Where the books come addressed to the deceased gentleman whose estate has come to the defendant, and he keeps the books, I think, therefore, he is clearly liable in this form of action, being for goods sold and delivered." The preceding case is very similar, in many respects, to the case before us. Agreeably to the defendants' settlement with Hood & Co., their contract to take their newspaper expired on the first of May, 1849. It does not appear that the fact that the paper was then to stop was communicated to the present plaintiffs, who had previously become the proprietors and publishers of the newspaper establishment; having the defendants' name entered on their books, and having for some weeks before that time for- warded numbers of their newspaper, by mail, to the defendants, they, after the first day of May, continued so to do up to January 1, 1860. During this period of time the defendants were occa- sionally requested, by the plaintiffs' agent, to pay their bill. The answer was, by the defendants, we are not subscribers to your newspaper. But the evidence is, the defendants used, or kept the plaintiffs' books, or newspapers, and never offered to return a number, as they reasonably might have done, if they would have avoided the liability to pay for them. Nor did they ever decline to take the newspapers from the post-office. If the defendants would have avoided the liability to pay the plaintiffs, they might reasonably have returned the paper to the plaintiffs, or given them notice that they declined to take the paper longer. We are of the opinion that the defendants have the right to avail themselves of the statute of limitations. Therefore, the plaintiffs can recover no more of their account than is embraced in the six years prior to the date of their writ, and at the sum of 14 FORMATION OF CONTRACT. [Pabt H. $2 per year, with interest, from date of writ, or the date of the earliest demand of the plaintiffs' claim upon the defendants. § 3. An offer is made when, and not until, it is communicated to the offeree. (t.) Ignorance of offered promise. PITCH V. SNEDAKER. 38 NEW YORK, 248.— 1868. [Reported herein at p. 62.] DAWKINS V. SAPPINGTON. 26 INDIANA, 199. — 1866. [Beported herein at p. 6S.] (it.) Ignorance of offered act. BAETHOLOMEW v. JACKSON. 20 JOHNSON (N. Y.), 28.-1822. In error, on certiorari to a justice's court. Jackson sued Bartholomew before a justice, for work and labor, etc. B. pleaded non assumpsit. It appeared in evidence, that Jackson owned a wheat stubble-field, ia which B. had a stack of wheat, which he had promised to remove in due season for preparing the ground for a fall crop. The time for its removal having arrived, J. sent a message to B., which, in his absence, was delivered to his family, requesting the immediate removal of the stack of wheat, as he wished, on the next day, to burn the stubble on the field. The sons of B. answered, that they would remove the stack by 10 o'clock the next morning. J. waited until that hour, and then set fire to the stubble, in a remote part of the field. The fire spreading rapidly, and threatening to burn the stack of wheat, and J., finding that B. and his sons neglected to remove the stack, set to work and removed it himself, so as to secure it for B. ; and he claimed to recover damages for the work and Chap. I. § 3.] OFFER AND ACCEPTANCE. 15 labor in its removal. The jury gave a verdict for the plaintiS for 50 cents, on which the justice gave judgment, with costs. Platt, J. I should be very glad to affirm this judgment; for though the plaintiEE was not legally entitled to sue for damages, yet to bring a certiorari on such a judgment was most unworthy. The plaintiff performed the service without the privity or re- quest of the defendant, and there was, in fact, no promise, ex- press or implied. If a man humanely bestows his labor, and even risks his life, in voluntarily aiding to preserve his neigh- bor's house from destruction by fire, the law considers the ser- vice rendered as gratuitous, and it, therefore, forms no ground of action. The judgment must be reversed. Judgment reversed. (ni.) Ignorarvx of offered terms. FONSECA V. CUNAED STEAMSHIP COMPANY. 163 MASSACHUSETTS, 553. — 1891. Contract, with a count in tort, against the defendant, as owner of the steamship Samaria, for damage to the plaintiff's trunk and its contents. When the plaintiff engaged his passage in London, he received a passage ticket from the defendant's agent there. This ticket consisted of a sheet of paper of large quarto size, the face and back of which were covered with written and printed matter. Near the top of the face of the ticket, after the name of the defendant corporation and its list of offices in Great Britain, appeared in bold type the following: "Passengers' Contract Ticket." Upon the side margins were various printed notices to passengers, including the following : " All passengers are requested to take notice that the owners of the ship do not hold themselves responsible for detention or delay arising from accident, extraordinary or unavoidable circumstances, nor for loss, detention, or damage to luggage." The body of the face of the ticket contained statements of the rights of the passenger respecting his person and his baggage. 16 FORMATION OF CONTKACT. [Part U. the plaintiff's name, age, and occupation, the bills of fare for each day of the week, and the hovirs for meals, etc. At the bot- tom was printed the following: " Passengers' luggage is carried only upon the conditions set forth on the back hereof." Upon the back, among other printed matter, was the following: " The company is not liable for loss of or injury to the passenger or his luggage, or delay in the voyage, whether arising from the act of God, the Queen's enemies, perils of the sea, rivers, or navigation, restraint of princes, rulers, and peoples, barratry, or negligence of the company's ser- vants (whether on board the steamer or not), defect in the steamer, her machinery, gear, or fittings, or from any other cause of whatsoever nature." When the plaintiff received his ticket, his attention was not called in any way to any limitation of the defendant's liabilty. Knowlton, J. It is not expressly stated in the report, that the law of England was put in evidence as a fact in the case, but it seems to have been assumed at the trial, if not expressly agreed that this law should be considered, and the argument before this court has proceeded on the same assumption. It is conceded that the presiding justice correctly found and ruled as follows : "That the contract was a British contract; that, by the English law, a carrier may by contract exempt himself from liability, even for loss caused by his negligence ; that in this ease, as the carrier has so attempted, and the terms are broad enough to exonerate him, the question remains of assent on the part of the plaintiff." That part of his' ruling which is called in ques- tion by the defendant is as follows: "This has been decided in Massachusetts to be a question of evidence, in which the lex fori is to govern; that, although it has been decided that the law conclusively presumes that a consignor Iknows and assents to the terms of a bill of lading or a shipping receipt which- he takes _ without dissent, yet a passenger ticket, even though it be called a 'contract ticket,' does not stand on the same footing; that in this case assent is not a conclusion of law, and is not proved as a matter of fact." The principal question before us is whether the plaintiff, by reason of his acceptance, and use of his ticket, shall be conclu- Chap. I. § 3.] OFFER AND ACCEPTANCE. 17 sively held to have assented to its terms. It has often been decided, that one who accepts a contract, and proceeds to avail himself of its provisions, is bound by the stipulations and con- ditions expressed in it, whether he reads them or not. JRice v. Dwight Manuf. Co., 2 Cush. 80; Ghace v. Adams, 100 Mass. 505; Hoadley v. Northern Transportation Co., 115 Mass. 304; Monitor Ins. Co. v. Buffum, 115 Mass. 343; Germania Insur- ance Co. V. Memphis & Charleston Railroad, 72. N. Y. 90. This rule is as applicable to contracts for the carriage of persons or property as to contracts of any other kind. Chrace v. Adams, 100 Mass. 505; Boston & Maine Railroad v. Chipmanf 146 Mass. 107; Parker v. South Eastern Railway, 2 C. P. D. 416, 428; Harris v. Great Western Railway, 1 Q. B. D. 515; York Co. V. Central Railroad, 3 Wall. 107; Hill v. /Syracuse, Bing- hamton & New York Railroad, 73 N. T. 351. The cases in which it is held that one who receives a ticket that appears to be a mere check showing the points between which he is en- titled to be carried, and that contains conditions on its back which he. does not read, is not bound by such conditions, do not fall within this rule. Brown v. Eastern Railroad, 11 Cush. 97; Malone v. Boston & Worcester Railroad, 12 Gray, 388; Hen- derson V. Stevenson, L. E. 2 H. L. Se. 470; Quimby v, Van- derbilt, 17 I^. Y. 306; Railway Co. v. Stevens, 95 U. S. 655. Such a ticket does not purport to be a contract which expressly states the rights of the parties, but only a check to indicate the route over which the passenger is to be carried, and he is not expected to examine it to see whether it contains any unusual stipulations. The precise question in the present case is whether the " contract ticket " was of such a kind that the passenger tak- ing it should have understood that it was a contract containing stipulations which would determine the rights of the parties in reference to his carriage. If so, he would be expected to read it, and if he failed to do so, he is bound by its stipulations. It covered with print and writing the greater part of two large quarto pages, and bore the signature of the defendant company, affixed by its agent, with a blank space for the signature of the passenger. The fact that it was not signed by the plaintiff is immaterial. Quimby v. Boston & Maine Railroad, 150 Mass. 18 FORMATION OF CONTRACT. [Part II. 365, and cases there cited. It contained elaborate provisions in regard to the rights of the passenger on the voyage, and even went into such detail as to give the bill of fare for each meal in the day for every day of the week. No one who could read could glance at it without seeing that it undertook expressly to prescribe the particulars which should govern the conduct of the parties until the passenger reached the port of destination. In that particular, it was entirely unlike the pasteboard tickets which are commonly sold to passengers on railroads. In refer- ence to this question, the same rules of law apply to a contract to carry a passenger, as to a contract for the transportation of goods. There is no reason why a consignor who is bound by the provisions of a bill of lading, which he accepts without reading, should not be equally bound by the terms of a contract in similar form to receive and transport him as a passenger. In Henderson V. Stevenson, uhi supra, the ticket was for transportation a short distance, from Dublin to Whitehaven, and the passenger was held not bound to read the notice on the back, because it did not purport to be a contract, but a mere check given as evidence of his right to carriage. In later English cases, it is said that this decision went to the extreme limit of the law, and it has repeatedly been distinguished from cases where the ticket was in a different form. Parker v. South Eastern Railway, 2 C. P. D. 416, 428; Burke v. South Eastern Railway, 5 C. t. D. 1; Harris v. Great Western Railway, 1 Q. B. D. 515. The pas- senger in the last mentioned case had a coupon ticket, and it was held that he was bound to know what was printed as a part of the ticket. Steers v. Liverpool, New York & Philadelphia Steam- ship Co. (57 N. Y. 1) is in its essential facts almost identical with the case at bar, and it was held that the passenger was bound by the conditions printed on the ticket. In Quimby v. Soston & Maine Railroad, ubi supra, the same principle was applied to the case of a passenger travelling on a free pass, and no sound distinction can be made between that case and the case at bar. We are of opinion that the ticket delivered to the plaintiff purported to be a contract, and that the defendant corporation had a right to assume that he assented to its provisions. All Chap. I. § 3.] OFFER AND ACCEPTANCE. 19 these provisions are equally binding on him as if he had read them. The contract being valid in England, where it waa made, and the plaintiff's acceptance of it tinder the circumstances being equivalent to an express assent to it, and it not being illegal or immoral, it will be enforced here, notwithstanding that a similar contract made in Massachusetts would be held void as against public policy. Greenwood v. Curtis, 6 Mass. 358; Forepaugh V. Delaware, Lackawanna & Western Railroad, 128 Penn. St. 217, and cases cited; In re Missouri Steamship Co., 42 Ch. D. 321, 326, 327; Liverpool and Great Western Steam Co. v. Fhenix Ins. Co., 129 U. S. 397. Judgment for the defendant.^ MALONE V. BOSTON & WOECESTER RAILEOAD. 12 GRAY (Mass.), 388. — 1859. Action of tort against the defendants as common carriers, for the loss upon their railroad of a trunk and its contents. The ticket issued to plaintiff had printed upon its face, " Look on the back." On the back was a clause limiting the liability of defendant for baggage to fifty dollars, and a notice that other regulations were posted in the cars. In the cars was a similar notice as to liability for baggage. Plaintiff testified that he never saw the notice on the ticket or in the car. The trial judge submitted to the jury the question whether the plaintiff ever assented to the limitation, and charged that the receiving of the ticket raised no legal presumption that plain- tiff had the necessary notice. The jury returned a verdict for the plaintiff. Dewey, J. This case must be held to be analogous to the case of Bro^m v. Eastern Railroad (11 Cush. 97), and may, like that, be decided without any adjudication upon the broader question whether a limitation of the liability of the railroad company as to the amount and value of the baggage of passengers trans- 1 Accord: Zimmer v. 2V. T. O. etc. B., 137 N. Y. 460; Ballou v. Earle, 17 R. I. 441. 20 FORMATION OF CONTRACT. [Part U. ported on the road may not be effectually secured by the delivery of a ticket to the passenger so printed in large and fair type on the face of the ticket, that no one could read the part of the ticket indicating the place to which it purports to entitle him to be conveyed without also having brought to his notice the fact of limitation as to liability for his baggage. The present case as to the ticket only differs from the case of Brown v. Eastern Railroad, in having printed in small type on the face of the ticket, "Look on the back." But there is nothing on the face of the ticket alluding to the subject of baggage; no notice to look on the back for regulations as to baggage. The delivery of such a ticket does not entitle the railroad company to ask for instructions that there results therefrom a legal presumption of notice of the restricted liability as to the baggage of the passen- ger. The ruling as to the placards posted in the cars was correct, and no legal presumption of notice arose therefrom. The court properly submitted the question of notice to the jury as a ques- tion of fact. We have not particularly considered the question of liability of the defendants as to certain small items, if any, of the wear- ing apparel of the husband, that were contained in the lost trunk. The articles are stated in the bill of exceptions to have been "nearly wholly his wife's wearing apparel," and the court was not asked to direct the jury to exclude the other articles in assessing damages. Without expressing any opinion upon the point whether these articles, if any, of the husband's would be embraced in the baggage which the defendants assumed to trans- port as common carriers, the husband paying no fare for his personal transportation, the court are of opinion that in the present aspect of the case judgment should be entered generally on the verdict. Exceptions overruled.* » Accord : Slossom v. Dodd, 43 N. Y. 264. Chap. I. § i.] OFFER AND ACCEPTANCE. 21 § 4. Acceptance must be communicated by vrotda or conduct WHITE V. COELIES. 46 NEW YORK, 467. — 1871. [Reported herein at p. 7.] EOYAL INS. CO. v. BEATTY. 119 PENNSYLVANIA STATE, 6.— 1888. Assumpsit to recover upon two policies of insurance. At the close of the testimony, the defendant requested the court to charge the jury that there was no evidence of an acceptance by the defendant of the offer of the plaintiff to renew the policies, and to direct a verdict for the defendant. The court refused the request, and submitted the question to the jury. Verdict for plaintiff. Green, J. We find ourselves unable to discover any evidence of a contractual relation between the parties to this litigation. The contract alleged to exist was not founded upon any writing, nor upon any words, nor upon any act done by the defendant. It was founded alone upon silence. While it must be conceded that circumstances may exist which will impose ' a contractual obligation by mere silence, yet it must be admitted that such circumstances are exceptional in their character, and of ex- tremely rare occurrence. We have not been furnished with a perfect . instance of the kind by the counsel on either side of the present case. Those cited for defendant in error had some other element in them than mere silence, which contributed to the establishment of the relation. But in any point of view it is difficult to understand how a legal liability can arise out of the mere silence of the party sought to be affected, unless he was subject to a duty of speech, which was neglected to the harm of the other party. If there was no duty of speech, there could be no harmful omission arising from mere silence. Tate the present case as an illustration. The alleged contract was a contract of fire insurance. The plaintiff held two policies against the defendant, but they had expired before the loss occurred and had not been formally renewed. At 22 FORMATION OF CONTRACT. [Pabt II. the time of the fire, the plaintiff held no policy against the defend- ant. But he claims that the defendant agreed to continue the operation of the expired policies by what he calls " binding " them. How does he prove this ? He calls a clerk, who took the two policies in question, along with other policies of another person, to the agent of the defendant to have them renewed, and this is the account he gives of what took place : " The Royal Company had some policies to be renewed, and I went in and bound them. Q. State what was said and done. A. I went into the o£B.ce of the Royal Company and asked them to bind the two policies of Mr. Beatty expiring to-morrow. The court : Who were the policies for? A. For Mr. Beatty. The court: That is your name, is it not ? A. Yes, sir. These were the policies in question. I renewed the policies of Mr. Priestly up to the 1st of April. There was nothing more said about the Beatty pol- icies at that time. The court : What did they say ? A. They did not say anything, but I suppose that they went to their books to do it. They commenced to talk about the night privilege, and that was the only subject discussed." In his further examina- tion he was asked : " Q. Did you say anything about those policies (Robert Beatty's) at that time? A. No, sir; I only spoke of the two policies for William Beatty. Q. What did you say about them? A. I went in and said, 'Mr. Skinner, will you renew the Beatty policies and the night privilege for Mr. Priestly ? ' and that ended it. Q. Were the other com- panies bound in the same way ? A. Yes, sir ; and I asked the Royal Company to bind Mr. Beatty." The foregoing is the whole of the testimony for the^ plaintiff as to what was actually said at the time when it is alleged the policies were bound. It will be perceived that all that the wit- ness says is, that he asked the defendant's agent to bind the two policies, as he states at first, or to renew them, as he says last. He received no answer, nothing was said, nor was anything done. How is it possible to make a contract out of this ? It is not as if one declares or states a fact in the presence of another and the other is silent. If the declaration imposed a duty of speech on peril of an inference from silence, the fact of silence might justify the inference of an admission of the truth Chap. I. § 4.] OFFER AND ACCEPTANCE. 23 of the declared fact. It would then be only a question of hear- ing, which would be chiefly if not entirely for the jury. But here the utterance was a question and not an assertion, and there was no answer to the question. Instead of silence being evidence of an agreement to do the thing requested, it is evidence, either that the question was not heard, or that it was not intended to comply with the request. Especially is this the case when, if a compliance was intended, the request would have been followed by an actual doing of the thing requested. But this was not done ; how then can it be said it was agreed to be done ? There is liter- ally nothing upon which to base the inference of an agreement, upon such a state of facts. Hence the matter is for the court and not for the jury ; for if there may not be an inference of the controverted fact, the jury must not be permitted to make it. What has thus far been said relates only to the effect of the non-action of the defendant, either in responding or in doing the thing requested. There remains for consideration the effect of the plaintiff's non-action. When he asked the question whether defendant would bind or renew the policies and obtained no answer, what was his duty ? Undoubtedly to repeat his question until he obtained an answer. Por his request was that the defendant should make a contract with him, and the defendant says nothing. Certainly such silence is not an assent in any sense. There should be something done, or else something said before it is possible to assume that a contract was established. There being nothing done and nothing said, there is no footing upon which an inference of an agreement can stand. But what was the position of the plaintiff ? He had asked the defendant to make a contract with him and the defendant had not agreed to do so ; he had not even answered the question whether he would do so. The plaintifif knew he had obtained no answer, but he does not repeat the question ; he, too, is silent thereafter, and he does not get the thing done which he asks to be done. Assur- edly it was his duty to speak again, and to take further action if he really intended to obtain the defendant's assent. For what he wanted was something affirmative and positive, and without it he has no status. But he desists, and does and says nothing 24 FORMATION OF CONTRACT. [Pa»t U. further. And so it is that the whole of the plaintiff's case is an unanswered request to the defendant to make a contract with the plaintiff, and no further attempt by the plaintiff to obtain an answer, and no actual contract made. Out of such facts it is not possible to make a legal inference of a contract. The other facts proved and offered to be proved, but rejected improperly, as we think, and supposed by each to be consistent with his theory, tend much more strongly in favor of the de- fendant's theory than of the plaintiff's. It is not necessary to discuss them, since the other views we have expressed are fatal to the plaintiff's claim. Nor do I concede that if defendant heard plaintiff's request and made no answer, an inference of assent should be made. For the hearing of a request and not answering it is as consistent, indeed, more consistent, with a dis- sent than an assent. If one is asked for alms on the street, and hears the request, but makes no answer, it certainly cannot be inferred that he intends to give them. In the present case there is no evidence that defendant heard the plaintiff's request, and without hearing there was, of course, no duty of speech. Judgment reversed. HOBBS V. MASSASOIT WHIP CO. 168 MASSACHUSETTS, 194. — 1893. Holmes, J. This is an action for the price of eelskins sent by the plaintiff to the defendant, and kept by the defendant some months, until they were destroyed. It must be taken that the plaintiff received no notice that the defendants declined to accept the skins. The case comes before us on exceptions to an instruction to the jury, that, whether there was any prior con- tract or not, if the skins are sent to the defendant, and it sees fit, whether it has agreed to take them or not, to lie back, and to say nothing, having reason to suppose that the man who has sent them believes that it is taking them, since it says nothing about it, then, if it fails to notify, the jury would be warranted in finding for the plaintiff. Standing alone, and unexplained, this proposition might seem Chap. I. § i.] OFFER AND ACCEPTANCE. 25 to imply that one stranger may impose a duty upon another, and make him a purchaser, in spite of himself, by sending goods to him, unless he will take the trouble, and be at the expense, of notifying the sender that he will not buy. The case was argued for the defendant on that interpretation. But, in view of the evidence, we do not understand that to have been the meaning of the judge, and we do not think that the jury can have under- stood that to have been his meaning. The plaintiff was not a stranger to the defendant, even if there was no contract between them. He had sent eelskins in the same way four or five times before, and they had been accepted and paid for. On the de- fendant's testimony, it is fair to assume that, if it had admitted the eelskins to be over twenty-two inches in length, and fit for its business, as the plaintiff testified, and the jury found that they were, it would have accepted them ; that this was under- stood by the plaintiff; and, indeed, that there was a standing offer to him for such skins. In such a condition of things, the plaintiff was warranted in sending the defendant skins conform- ing to the requirements, and even if the offer was not such that the contract was made as soon as skins corresponding to its terms were sent; sending them did impose on the defendant a duty to act about them ; and silence on its part, coupled with a retention of the skins for an unreasonable time, might be found by the jury to warrant the plaintiff in assuming that they were accepted, and thus to amount to an acceptance. See Bushell V. Wheeler, 15 Q. B. 442; Benjamin on Sales, §§ 162, 164; Taylor v. Dexter Engine Co., 146 Mass. 613, 616. The proposi- tion stands on the general principle that conduct which imports acceptance or assent is acceptance or assent in the view of the law, whatever may have been the actual state of mind of the party, — a principle sometimes lost sight of in the cases. O'Donnell v. Clinton, 145 Mass. 461, 463 ; McCarthy v. Boston & Lowell Railroad, 148 Mass. 560, 552. Exceptions overruled. 26 FORMATION OF CONTRACT. [Part U. STENSGAAKD v. SMITH. 43 MINNESOTA, 11. — 1890. Dickinson, J. This action is for the recovery of damages for breach of contract. The rulings of the court below, upon the trial, were based upon its conclusion that no contract was shown to have been entered into between these parties. We are called upon to review the case upon this point. The plaintiff was engaged in business as a real-estate broker. On the 11th of December, 1886, he procured the defendant to execute the following instrument, which was mostly in printed form : " St. Paul, Dec. 11, 1886. " In consideration of L. T. Stensgaard agreeing to act as agent for the gale of the property hereinafter mentioned, I have hereby given to said L. T. Stensgaard the exclusive sale, for three months from date, of the following property, to wit : (Here follows a description of the property, the terms of sale, and some other provisions not necessary to be stated. ) I further agree to pay said L. T. Stensgaard a commission of two and one-half per cent on the first $2000, and two and one-half per cent on the balance of the purchase price, for his services rendered in selling of the above-men- tioned property, whether the title is accepted or not, and also whatever he may get or obtain for the sale of said property above $17,000 for such property, if the property is sold. "John Smith." The evidence showed that the plaintiff immediately took steps to effect the sale of the land, posted notices upon it, published advertisements in newspapers, and individually solicited purchas- ers. About a month subsequent to the execution by the defend- ant of the above instrument, he himself sold the property. This constitutes the alleged breach of contract for which a recovery of damages is sought. The court was justified in its conclusion that no contract was shown to have been entered into, and hence that no cause of action was established. The writing signed by the defendant did not of itself constitute a contract between these parties. In terms indi- cating that the instrument was intended to be at once operative, it conferred present authority on the plaintiff to sell the land, and included the promise of the defendant that, if the plaintiff should Chap. I. § 4.] OFFER AND ACCEPTANCE. 27 sell the land, lie should receive the stated compensation. This alone was no contract, for there was no mutuality of obligation, nor any other consideration for the agreement of the defendant. The plaintiff did not by this instrument obligate himself to do anything, and therefore the other party was not bound. Bailey V. Austrian, 19 Minn. 465 (535) ; Tarbox v. Ootzian, 20 Minn. 122 (139). If, acting under the authority thus conferred, the plaintiff had, before its revocation, sold the land, such performance would have completed a contract, and the plaintiff would have earned the compensation promised by the defendant for such per- formance. Andreas v. Holcomhe, 22 Minn. 339; Ellsworth v. Southern Minn. By. Extension Co., 31 Minn. 543. But so long as this remained a mere present authorization to sell, without contract obligations having been fixed, it was revocable by the defendant. The instrument does, it is true, commence with the words : " In consideration of L. T. Stensgaard agreeing to act as agent for the sale of the property, " etc. ; but no such agreement on the part of the plaintiff was shown on the trial to have been actually made, although it was incumbent upon him to establish the existence of a contract as the basis of his action. This instrument does not contain an agreement on the part of the plaintiff, for he is no party to its execution. It expresses no promise or agreement except that of the defendant. It may be added that the language of the " consideration " clause is not such as naturally expresses the fact of an agreement having been already made on the part of the plain- tiff. Of course, no consideration was necessary to support the present, but revocable, authorization to sell. It is difficult to give any practical effect to this clause in the construction of the instrument. It seems probable, in the absence of proof of such an agreement, that this clause had no reference to any actual agree- ment between these parties, but was a part of the printed matter which the plaintiff had prepared for use in his business, with the intention of making it effectual by his own signature. If he had appended to this instrument his agreement to accept the agency, or even if he had signed this instrument, this clause would have had an obvious meaning. This instrument, executed only by the defendant, was effectual, as we have said, as a present, but revocable, grant of authority to 28 FORMATION OF CONTRACT. [Part II. sell. It involved, moreover, an offer on the part of the defendant to contract with the plaintiff that the latter should have, for the period of three months, the exclusive right to sell the land. This action is based upon the theory that such a contract was entered into ; but, to constitute such a contract, it was necessary that the plaintiff should in some way signify his acceptance of the offer, so as to place himself under the reciprocal obligation to exert himself during the whole period named to effect a sale. No express agreement was shown. The mere receiving and retaining this instrument did not import an agreement thus to act for the period named, for the reason that, whether the plaintiff should be willing to take upon himself that obligation or not, he might accept and act upon the revocable authority to sell expressed in the writing ; and if he should succeed in effecting a sale before the power should be revoked, he would earn the commission specified. In other words, the instrument was presently effectual and of advantage to him, whether he chose to place himself under contract obligations or not. For the same reason the fact that for a day or a month he availed himself of the right to sell conferred by the defendant, by attempting to make a sale, does not justify the inference, in an action where the burden is on the plaintiff to prove a contract, that he had accepted the offer of the defendant to conclude a contract covering the period of three months, so that he could not have discontinued his efforts without rendering himself liable in damages. In brief, it was in the power of the plaintiff either to convert the defendant's offer and authorization into a complete contract, or to act upon it as a naked revocable power, or to do nothing at all. He appears to have simply availed himself, for about a month, of the naked present right to sell if he could do so. He cannot now complain that the land- owner then revoked the authority which was still unexecuted. It may be added that there was no attempt at the trial to show that the plaintiff notified the defendant that he was endeavoring to sell the land ; and there is but little, if any, ground for an infer- ence from the evidence that the defendant in fact knew it. The case is distinguishable from those where, under a unilat- eral promise, there has been a performance by the other party of services, or other thing to be done, for which, by the terms of Chap. I. § 5.] OFFER AND ACCEPTANCE. 29 the promise, compensation was to be made. Such was the case of Goward v. Waters (98 Mass. 596), relied upon by the appel- lant as being strictly analogous to this case. In the case before us, compensation was to be paid only in case of a sale of the land by the plaintiff. He can recover nothing for what he did, unless there was a complete contract ; in which case, of course, he might have recovered damages for its breach. Order affirmed. (A motion for a reargument of this ease was denied April 9, 1890.) Note. — Upon the question whether the acceptance of a guaranty must be express or may be implied from the giving of credit, see Davis v. Wells, 104 U. S. 159 ; Powers v. Sumcratz, 12 Oh. St. 273 ; Douglass v. Howland, 24 Wend. 35 ; Union Bk. v. Coster's Ex'rs, 3 N. Y. 203. § 5. Acceptance is commumcated -when it is made in a manner prescribed, or indicated by the offerer. TAYLOE V. MERCHANTS' FIRE INS. CO. 9 HOWARD (U. S.), 390. — 1850. Nelson, J. This is an appeal from a decree of the Circuit Court for the District of Maryland, which was rendered for the defendants. The case in the court below was this. William H. Tayloe, of Richmond County, Virginia, applied to John Minor, the agent of the defendants, residing at Fredericksburg in that State, for an insurance upon his dwelling-house to the amount of $8000 for one year, and, as he was about leaving home for the State of Alabama, desired the agent to make the application in his behalf. The application was made accordingly, under the date of 25th November, 1844, and an answer received from the secretary of the company, stating that the risk would be taken at seventy cents on the thousand dollars, the premium amounting to the sum of fifty-six dollars. The agent stated in the application to the company the reason why it had not been signed by Tayloe ; that he had gone to the State of Alabama on business, and would 30 FORMATION OF CONTRACT. [Part U. not return till February following ; and that he was desired to communicate to him at that place the answer of the company. On receiving the answer, the agent mailed a letter directed to Tayloe, under date of the 2d of December, advising him of the terms of the insurance, and adding, " Should you desire to effect the insurance, send me your check payable to my order for $57, and the business is concluded." The additional dollar was added for the policy. This letter, in consequence of a misdirection, did not reach Tayloe till the 20th of the month ; who, on the next day, mailed a letter in answer to the agent, expressing his assent to the terms, and inclosing his check for the premium as requested. He also desired that the policy should be deposited in the bank for safe-keeping. This letter of acceptance was received on the 31st at Fredericksburg by the agent, who mailed a letter in answer the next day, communicating to Tayloe his refusal to. carry into effect the insurance, on the ground that his acceptance came too late, the centre building of the dwelling-house in the meantime, on the 22d of the month, having been consumed by fire. The company, on being advised of the facts, confirmed the view taken of the case by their agent, and refused to issue the policy or pay the loss. A bill was filed in the court below by the insured against the company, setting forth, substantially, the above facts, and praying that the defendants might be decreed to pay the loss, or for such other relief as the complainant might be entitled to. I. Several objections have been taken to the right of the complainant to recover, which it will be necessary to notice; but the principal one is, that the contract of insurance was not complete at the time the loss happened, and therefore that the ris!^ proposed to be assumed had never attached. Two positions have been taken by the counsel for the com- pany for the purpose of establishing this ground of defense. 1. The want of notice to the agent of the company of the acceptance of the terms of the insurance ; and, 2. The non-payment of the premium. The first position assumes that, where the company have Chap. I. § 5.] OFFER AND ACCEPTANCE. 31 made an offer through the mail to insure upon certain terms, the agreement is not consummated by the mere acceptance of the offer by the party to whom it is addressed; that the contract is still open and incomplete until the notice of acceptance is received ; and that the company are at liberty to withdraw the offer at any time before the arrival of the notice ; and this even without communicating notice of the withdrawal to the appli- cant ; in other words, that the assent of the company, expressed or implied, after the acceptance of the terms proposed by the insured, is essential to a consummation of the contract. The effect of this construction is, to leave the property of the insured uncovered until his acceptance of the offer has reached the company, and has received their assent; for, if the contract is incomplete until notice of the acceptance, till then the company may retract the offer, as neither party is bound until the negotiation has resulted in a complete bargain between the parties. In our apprehension, this view of the transaction is not in accordance with the usages and practice of these companies in taking risks ; nor with the understanding of merchants and other business men dealing with them ; nor with the principles of law, settled in analogous cases, governing contracts entered into by correspondence between parties residing at a distance. On the contrary, we are of opinion that an offer under the circumstances stated, prescribing the terms of insurance, is intended, and is to be deemed, a valid undertaking on the part of the company, that 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 view of the effect of the correspondence seems to us to be but carrying out the intent of the parties, as plainly mani- fested by their acts and declarations. On the acceptance of the terms proposed, transmitted by due course of mail to the company, the minds of both parties have met on the subject, in the mode contemplated at the time of entering upon the negotiation, and the contract becomes com- 32 FORMATION OF CONTRACT. [Part U. plete. The party to whom the proposal is addressed has a right to regard it as intended as a continuing offer until it shall have reached him, and shall be in due time accepted or rejected. Such is the plain import of the offer. And besides, upon anj other view, the proposal amounts to nothing, as the acceptance would be but the adoption of the terms tendered, to be, in turn, proposed by the applicant to the company for their approval oi rejection. Tor, if the contract is still open until the company is advised of an acceptance, it follows, of course, that the accept- ance may be repudiated at any time before the notice is received. Nothing is effectually accomplished by an act of acceptance. It is apparent, therefore, that such an interpretation of the acts of the parties would defeat the object which both had in view in entering upon the correspondence. The fallacy of the argument, in our judgment, consists in the assumption, that the contract cannot be consummated without a knowledge on the part of the company that the offer has been accepted. This is the point of the objection. But a little re- flection will show, that in all cases of contracts entered into between parties at a distance by correspondence, it is impossible that both should have a knowledge of it the moment it becomes complete. This can only exist where both parties are present. The position may be illustrated by the case before us. If the contract became complete, as we think it did, on the accept- ance of the offer by the applicant, on the 21st December, 1844, the company, of course, could have no knowledge of it until the letter of acceptance reached the agent, on the 31st of the month ; and, on the other hand, upon the hypothesis it was not complete until notice of the acceptance, and then became so, the applicant could have no knowledge of it at the time it took effect. In either aspect, and, indeed, in any aspect in which the case can be presented, one of the parties must be unadvised of the time when the contract takes effect, as its consummation must depend upon the act of one of them in the absence of the other. The negotiation being carried on through the mail, the offer and acceptance cannot occur at the same moment of time ; nor, for the same reason, can the meeting of the minds of the parties .on the subject be known by each at the moment of concurrence ; the Chap. I. § 5.] OFFER AND ACCEPTANCE. 33 acceptance must succeed the offer after the lapse of some interval of time ; and if the process is to be carried farther in order to complete the bargain, and notice of the acceptance must be re- ceived, the only effect is to reverse the position of the parties, changing the knowledge of the completion from the one party to the other. It is obviously impossible, therefore, under the circumstances stated, ever to perfect a contract by correspondence, if a knowl- edge of both parties at the moment they become bound is an essential element in making out the obligation. And as it must take effect, if effect is given at all to an endeavor to enter into a contract by correspondence, in the absence of the knowledge of one of the parties at the time of its consummation, it seems to us more consistent with the acts and declarations of the parties, to consider it complete on the transmission of the acceptance of the offer in the way they themselves contemplated ; instead of post- poning' its completion till notice of such acceptance has been received and assented to by the company. For why make the offer, unless intended that an assent to its terms should bind them? And why require any further assent on their part, after an unconditional acceptance by the party to whom it is addressed ? We have said that this view is in accordance with the usages and practice of these companies, as well as with the general prin- ciples of law governing contracts entered into by absent parties. In the instructions of this company to their agent at Fred- ericksburg, he is advised to transmit all applications for insurance to the office for consideration ; and that, upon the receipt of an answer, if the applicant accepts the terms, the contract is con- sidered complete without waiting to communicate the acceptance to the company ; and the policy to be thereafter issued is to bear date from the time of the acceptance. The company desire no further communication on the subject, after they have settled upon the terms of the risk, and sent them for the inspection of the applicant, in order to the consummation of the bargain. The communication of the acceptance by the agent afterwards is to enable them to make out the policy. The contract is regarded as complete on the acceptance of the terms. 34 FORMATION OF CONTRACT. [Pabt U. This appears, also, to have been the understanding of the agent ; for, on communicating to the insured the terms received from the company, he observes, "Should you desire to effect the above insurance, send me your check payable to my order for fifty-seven dollars, and the business is concluded" ; obviously enough import- ing, that no other step would be necessary to give effect to the insurance of the property upon the terms stated. The cases of Adams v. Lindsell (1 Barn. & Aid. 681) and Mactier's Adm'rs v. FHth (6 Wend. 104) are authorities to show that the above view is in conformity with the general principles of law governing the formation of all contracts entered into between parties residing at a distance by means of corre- spondence. The unqualified acceptance by the one of the terms proposed by the other, transmitted by due course of mail, is regarded as closing the bargain from the time of the transmission of the acceptance. This is also the effect of the case of Eliason v. Henshaw (4 Wheat. 228) in this court, though the point was not necessarily involved in the decision of the case. The acceptance there had not been according to the terms of the bargain proposed, for which reason the plaintiff failed. 2. The next position against the claim is the non-payment of the premium. One of the conditions annexed to the policies of the company is, that no insurance will be considered as made or binding until the premium be actually paid; and one of the instructions to the agent was, that no credit should be given for premiums under any circumstances. But the answer to this objection is, that the premium, in judg- ment of law, was actually paid at the time the contract became complete. The mode of payment had not been prescribed by the company, whether in specie, bills of a particular bank, or other- wise ; the agent, therefore, was at liberty to exercise a discretion in the matter, and prescribe the mode of payment ; and, accord- ingly, we find him directing, in this case, that it may be paid by a check payable to his order for the amount. It is admitted that the insured had funds in the bank upon which it was drawn, at Chap. I. § 6.] X)FFER AND ACCEPTANCE. 35 all times from the date of the cheek till it was received by the agent, sufficient to meet it ; and that it would have been paid on presentment. It is not doubted that, if the check for the premium had been received by the agent from the hands of the insured, it would have been sufficient ; and in the view we have taken of the case, the transmission of it by mail, according to the directions given, amounts, in judgment of law, to the same thing. Doubtless, if the check had been lost or destroyed in the transmission, the insured would have been bound to make it good ; but the agent, in this respect, trusted to his responsibility, having full confi- dence in his ability and good faith in the transaction. * * * # * Decree reversed.^ § 6. Offer creates no legal rights until acceptance, but may lapse or be revoked. (i.) Lapse. a. Lapse by death. PEATT V. TRUSTEES. 93 ILLINOIS, 475. — 1879. Action on notes. Plaintiff had judgment below. ScHOLFiELD, J. AppcUces obtained judgment in the county court of Kane County against Mary L. Pratt, as administratrix of the estate of Philemon B. Pratt, deceased, on two promissory notes, executed by the deceased to the appellees on the 6th of July, 1871, — one for $300, payable one year after date, and the other for the sum of $327.50, payable two years after date, and both bearing in- terest at the rate of ten per cent per annum. Appeal was taken from that judgment to the Circuit Court of Kane County, where the cause was again tried at its October term, 1876, resulting, as 1 Accord : Mactier v. Frith, 6 Wend. 103 ; Vassar v. Camp, 11 N. Y. 441 ; Trevor v. Wood, 36 N. Y. 307 ; Wheat v. Cross, 31 Md. 99 ; Pat- rick V. Bowman, 149 U. S. 411 ; Perry v. Mount Hope Iron Co., 15 R. I. 380. In Vassar v. Camp it is held to be no defense to an action for breach of contract that the letter of acceptance was never received. Contra : M' Culloch V. Eagle Ins. Co., 1 Pick. 278 ; Lewis v. Browning, 130 Mass. 173. 86 FORMATION OF CONTRACT. [Past H. before, in a judgment in favor of appellees for the amount of the notes, principal and interest. Mary L. Pratt, administratrix, appeals from that judgment, and brings the rulings of the Circuit Court before us for review. The defense interposed to the notes is, that they were executed without any valid consideration. ***** The question to be considered is, did Pratt's death revoke the promise expressed in the notes, no money having been expended, or labor bestowed, or liability of any kind incurred, prior to his death, upon the faith of that promise ? The purpose in giving the notes was to enable the church repre- sented by appellees to purchase a bell. The cost of a bell of a particular size, etc., was estimated by Pratt, and he gave his notes for the amount of the estimate, intending that when the notes were paid the money should be devoted to paying for such a bell ; and when the notes matured, at Pratt's suggestion to let them stand, because, as he alleged, bell metal was getting cheaper, and they would thereby be enabled to procure a larger bell, no effort was made to collect the notes, and they were permitted to remain just as they were ; but there was no undertaking on the part of appellees nor the church which they represent to procure a bell, and there is no proof of any act done, or liability incurred by appellees, or any one else, in reliance upon these notes, before the death of Pratt. It is shown that the bell has been procured, and probably there is evidence sufftcient to show that this has been done on the faith of those notes, but it appears with a reasonable certainty that this has been since Pratt's death. If a contract therefor was made in Pratt's life-time, the record unfor- tunately does not show it. Collection of the notes cannot be enforced as a promise to make a gift. Pope v. Dodson, 58 111. 360; Blanchard v. Williamson, 70 Id. 652. Where notes are given by way of voluntary subscription, to raise a fund or pro- mote an object, they are open to the defense of a want of consider- ation, unless money has been expended, or liabilities incurred, which, by a legal necessity, must cause loss or iajury to the person so expending money, or incurring liability, if the notes are not paid. 1 Pars, on Bills and Notes, 202 ; 1 Pars, on Cont. 377, et seq. Chap. I. § 6.] OFFER AND ACCEPTANCE. 37 And so it has been held that the payee of a promissoiy note given to him in the expectation of his performing service, but withr out any contract binding him to serve, cannot maintain an action upon it. Eulse v. Hulse, 17 C. B. 711 ; 84 Eng. Com. Law, 709. In the absence of any one claiming rights as a bona fide assignee before maturity, it is not perceived that promissory notes, executed as these were, are, in any material respect, different from an ordinary subscription whereby the subscriber agrees under his hand, to pay so much in aid of a church, school, etc., where there is no corresponding undertaking by the payee. The promise stands as a mere offer, and may, by necessary con- sequence, be revoked any time before it is acted upon. It is the expending of money, etc., or incurring of legal liability, on the faith of the promise, which gives the right of action, and without this there is no right of action. McQlure v. Wilson, 43 111. 356, and cases there cited ; Trustees v. Garvey, 53 Id. 401 ; S. C, 5 Am. Sep. 51 ; Baptist Education Soc. v. Carter, 72 Id. 247. Being but an offer, and susceptible of revocation at any time before being acted upon, it must follow that the death of the promisor, before the offer is acted upon, is a revocation of the offer. This is clearly so upon principle. The subscription or note is held to be a mere offer until acted upon, because until then there is no mutuality. The continuance of an offer is in the nature of its constant repetition, which necessarily requires some one capable of making a repetition. Obviously this can no more be done by a dead man than a contract can, in the first instance, be made by a dead man. If the payees named in the notes may be held agents of the promisor, with power to contract for work to be done and money expended upon the faith of the notes, the case of Campanari v. Woodburn (15 C. B. 400 ; 80 Eng. Com. Law, 400) is directly in point, and holds that the death of the promisor was a revocation of the agency. In that case the plaintiff alleged that it was agreed between him and the defendant's intestate that he should endeavor to seU a certain picture, and that if he succeeded the intestate should pay him 100 pounds ; that he did so endeavor while the testator was alive, and through the efforts then made was enabled to effect a sale after the testator's death, but that 38 FORMATION OF CONTRACT. [Pabt H. tihe defendant had refused to pay 100 pounds. The count was held not to show a cause of action. Jervis, C. J., said that if the testator had countermanded the sale, he clearly would not ■ have been liable for commissions, although the plaintiff might have recovered for services already rendered and charges and expenses previously incurred. A fortiori the defendant was not responsible when the revocation proceeded from the act of God. An analogous case is Michigan State Bank v. Leavenworth (2 Williams [Vt.J, 209), where it was held that the operation of a letter of credit was confined to the life of the writer, and that no recovery can be had upon it for goods sold or advances made after his death. The question that has been raised, in some cases, whether a party acting in good faith upon the belief that the principal is alive, may recover, does not arise here, as there is nothing in the evi- dence to authorize the inference that the bell here was purchased under the belief that Pratt was still alive. "We are of the opinion, on the record before us, the judgment below was unauthorized. It must therefore be reversed and the cause remanded. Judgment reversed.' b. Lapse by failure to accept in manner prescribed. ELIASON et al. v. HENSHAW. 4 WHEATON (U. S.), 225. — 1819. Error to the Circuit Court for the District of Columbia. Washington, J. This is an action, brought by the defendant in error, to recover damages for the non-performance of an agreement, alleged to have been entered into by the plaintiffs in error, for the purchase of a quantity of flour, at a stipulated price. The evidence of this contract, given in the court below, is stated in a bill of exceptions, and is to the following effect : A letter from the plaintiffs to the defendant, dated the 10th of February, 1813, in which they say : " Capt. Conn informs us that ^Accord: Twenty-Third St. Bap. Ch. v. Cornell, 117 N. Y. 601. Cf. Cot- tage Street Church v. Kendall, 121 Mass. 528. For a similar case of revoca- tion by insanity, see Beach v. First M. E. Church, 96 111. 177. Chap. I. § 6.] OFFER AND ACCEPTANCE. 39 you have a quantity of flour to dispose of. We are in the prac- tice of purchasing flour at all times, in Georgetown, and will be glad to serve you, either in receiving your flour in store, when the markets are dull, and disposing of it, when the markets will answer to advantage, or we will purchase at market price, when delivered; if you are disposed to engage two or three hundred barrels at present, we will give you $9.60 per barrel, deliverable the first water, in Georgetown, or any service we can. If you should want an advance, please write us by mail, and will send you part of the money in advance." In a .postscript they add, "Please write by return of wagon, whether you accept our offer." This letter was sent from the house at which the writer then was, about two miles from Harper's Ferry, to the defendant, at hia mill, at Mill Creek, distant about twenty miles from Harper's Ferry, by a wagoner then employed by the defendant to haul flour from his mill to Harper's Ferry, and then about to return home with his wagon. He delivered the letter to the defendant, on the 14th*bf the same month, to which an answer, dated the succeeding day, was written by the defendant, addressed to the plaintiffs, at Georgetown, and dispatched by a mail which left Mill Creek on the 19th, being the first regular mail from that place to George- town. In this letter the writer says : " Your favor of the 10th inst. was handed me by Mr. Chenoweth last evening. I take the earliest opportunity to answer it by post. Your proposal to engage 300 barrels of flour, delivered in Georgetown, by the first water, at $9.50 per barrel, I accept; shall send on the flour by the first boats that pass down from where my flour is stored on the river; as to any advance, will be unnecessary — payment on delivery is all that is required." On the 25th of the same month, the plaintiffs addressed to the defendant an answer to the above, dated at Georgetown, in which they acknowledge the receipt of it, and add: "Not having heard from you before, had quite given over the expectation of getting your flour; more particularly, as we requested an answer by return of wagon the next day, and as we did not get it, had bought all we wanted." The wagoner, by whom the plaintiffs' first letter was sent, informed them, when he received it, that he should not probably return to Harper's Ferry, and he did not, in fact, return 40 FORMATION OF CONTRACT. [Past H. in the defendant's employ. The flour was sent down to George- town some time in March, and the delivery of it to the plaintiffs was regularly tendered and refused. Upon this evidence, the defendants in the court below, the plaintiEEs in error, moved that court to instruct the jury, that if they believed the said evidence to be true, as stated, the plaintiff in this action was not entitled to recover the amount of the price of the 300 barrels of flour, at the rate of $9.50 per barrel. The court being divided in opinion, the instruction prayed for was not given. The question is, whether the court below ought to have given the instruction to the jury, as the same was prayed for? If they ought, the judgment, which was in favor of the plaintiff in that court, must be reversed. It is an undeniable principle of the law of contracts, that an offer of a bargain by one person to another, imposes no obliga- tion upon the former until it is accepted by the latter, according to the terms in which the offer was made. Any qualification of, or departure from, those terms invalidates the offer, unless the same be agreed to by the person who made it. Until the terms of the agreement have received the assent of both parties, the negotiation is open, and imposes no obligation upon either. In this case, the plaintiffs in error offered to purchase from the defendant two or three hundred barrels of flour, to be delivered at Georgetown, by the first water, and to pay for the same $9.50 per barrel. To the letter containing this offer, they required an answer by the return of the wagon, by which the letter was dis- patched. This wagon was at that time in the service of the defendant, and employed by him in hauling flour from his mill to Harper's Ferry, near to which place the plaintiffs then were. The meaning of the writers was obvious. They could easily cal- culate, by the usual length of time which was employed by this wagon in traveling from Harper's Ferry to Mill Creek and back again with a load of flour, about what time they should receive the desired answer, and therefore it was entirely unimportant whether it was sent by that or another wagon, or in any other manner, provided it was sent to Harper's Ferry, and was not delayed beyond the time which was ordinarily employed by wagons engaged in hauling flour from the defendant's mill to Chap. I. § 6.] OFFER AND ACCEPTANCE. 41 Harper's Ferry. Whatever uncertainty there might have been as to the time when the answer would be received, there was none as to the place to which it was to be sent; this was distinctly indicated by the mode pointed out for the conveyance of the answer. The place, therefore, to which the answer was to be sent, constituted an essential part of the plaintiffs' offer. It appears, however, from the bill of exceptions, that no answer to this letter was at any time sent to the plaintiffs at Harper's Ferry. Their offer, it is true, was accepted by the terms of a letter addressed Georgetown, and received by the plaintiffs at that place; but an acceptance communicated at a place different from that pointed out by the plaintiffs, and forming a part of their proposal, imposed no obligation binding upon them, unless they had acquiesced in it, which they declined doing. It is no argument, that an answer was received at Georgetown; the plain- tiffs in error had a right to dictate the terms upon which they would purchase the flour, and unless they were complied with, they were not bound by them. All their arrangements may have been made with a view to the circumstance of place, and they were the only judges of its importance. There was, therefore, no contract concluded between these parties, and the court ought, therefore, to have given the instruction to the jury, which was asked for. Judgment reversed, and cause remanded, with directions to award a venire facias de novo.^ c. Lapse by expiration of time. MACLAY V. HAEVEY. 90 ILLINOIS, 625. — 1878. ScHOLFiELD, J. Appellant brought assumpsit against appellee in the court below, on an alleged contract whereby the latter employed the former to take charge of the millinery department of his store in Monmouth, in this State, for the season commenc- ing in April and ending in July, in the year 1876, and to pay her therefor $15 per week. 1 For lapse by conditional acceptance, see Minneapolis etc. By. v. Colum- bJts Soiling Mill, 119 U. S. 149, post, p. 74. 42 FORMATION OF CONTRACT. [Part II. Ths judgment was in favor of the appellee, and appellant now assigns numerous errors as grounds for its reversal. In our opinion, the case may be properly disposed of by the consideration of a single question. Appellant's right of recovery is based entirely upon an alleged special contract, and unless there was such a contract the judgment below is right, however errone- ous may have been the rulings under which it was obtained. After some preliminary correspondence, which is not before us, appellant, who was then residing in Peoria, received from appellee the following, by mail : " Monmouth, III., March 9, 1876. " Miss L. Maclay, Peoria, III. : I have been trying to find your address for some time, and was informed last evening that you were in Peoria. I write to inquire if you intend to work at millinery this season, and if you have made any arrangements or not. If you have not, can you take charge of my stock this season ? And if we can agree, I would want you for a permanent trimmer. " Please notify me by return mail, and terms, and we can confer further. "Yours in haste, "John Harvey." " Formerly Jno. Harvey & Co., when you trimmed for me." Appellant's reply to this is not before us. She says she stated her terms in it, and thereafter appellee wrote her the following, which she also received by mail : " Monmouth, III., March 21, 1876. " Miss L. Maclay, Peoria, 111. .- Your favor was received in due time, and contents noted. You spoke of wages at $15 per week, and fare one way. You will want to go to Chicago, I presume, and trim a week or ten days. " I would like for you to trim at H. W. Wetherell's or at Keith Bros. I wiU give you $15 per week and pay your fare from Chicago to Mon- mouth, and pay you the above wages for your actual time here in the house at that rate per season. " I presume that the wholesale men will allow you for your time in the house. You wUl confer a favor by giving me your answer by return mail. " Yours, "John Harvey." Appellant says she received this in the afternoon, and replied the next day by postal card, addressed to appellee, at Monmouth, as follows: Chap. I. § 6.] OFFER AND ACCEPTANCE. 43 " Peobia, March 23. "Mr. Harvey: Yours was promptly received, and I will go up to Chicago next week, and when my services are required you will let me know. " Very respectfully, "L. Maclat." Appellant did not place this in the post-office herself, but she says she gave it to a boy who did errands about the house of her sister, with whom she was then staying, directing him to place it in the office. The postmark on the card, which is shown to be always placed on mail matter the same day it is put in the office, shows that the card was not mailed until the 25th of March. Appellee receiving no reply from appellant, on Monday morn- ing, March 27, went to Peoria and endeavored to engage another milliner, and failing in this, endeavored to find appellant, but was unable to do so, and then returned to Monmouth, when he received the appellant's postal card, which had come to the office there during his absence. On Wednesday night of the same week appellee left Monmouth for Chicago, arriving at the last- named place on the following Thursday, March 30. Finding that the appellant was neither at Keith Bros, nor at Wetherell's, he proceeded to employ another milliner, and on the same day, and before leaving Chicago, wrote and mailed a letter directed to appellant's address at Peoria, notifying her of that fact, but this letter, in consequence of appellant's absence from Peoria, she did not receive for some time afterward. The millinery season commences from the 5th to the 10th of April and ends from the 20th of June to the 4th of July, as shown by the evidence. Appellee had not laid in his spring stock when he was corresponding with appellant, and he started to New York, from Chicago, for that purpose, on the evening of the day on which he addressed the letter to appellant notifying appellant of his employment of another milliner, the evening of the 30th of March. Appellant says she left Peoria for Chicago on Friday, which must have been the 31st of March. On arriving at Chicago she went to Wetherell's, and failing to get employ- ment there, did not go to Keith Bros., but went to another house in the same line of business, where she remained some days, and 44 FORMATION OF CONTRACT. [Part U. on the 8th of April she notified appellee, by letter, that she was sufficiently informed as to the " new ideas of trimming " and was ready to enter his service. Appellee replied to this, reciting the disappointments he claimed to have met with on her account, and again notifying her that he did not require her services. If a contract was consummated between the parties, it was by the mailing of appellant's postal card on the 25th of March. Appellee's letter of the 21st cannot be regarded as the consumma- tion of a contract, because it restates the terms with some varia- tion, though it may be but slight, and requires an acceptance upon the terms thus stated. This, until unequivocally accepted, was only a mere proposition or offer. Hough v. Brown, 19 N. Y. 111. It was said by the Lord Chancellor in Dunlop v. Higgins (1 H. L. Cas. 387) : " Where an individual makes an offer by post, stipulating for, or by the nature of the business having the right to expect, an answer by return of post, the offer can only endure for a limited time, and the making of it is accompanied by an implied stipulation that the answer shall be sent by return of post. If that implied stipulation is not satisfied, the person making the offer is released from it. When a person seeks to acquire a right, he is bound to act with a degree of strictness, such as may not be required where he is only endeavoring to excuse himself from a liability." This is regarded as a leading case on the question of acceptance of contract by letter, and the language quoted we regard as a clear and accurate statement of the law, as applicable to the present case. It is clear here that the nature of the business demanded a prompt answer, and the words, "you will confer a favor by giving me your answer by return mail," do, in effect, "stipulate" for an answer by return mail. Taylor v. Hennie, 35 Barb. 272. The evidence shows that there were two daily mails between Peoria and Monmouth, one arriving at Monmouth at 11 o'clock a.m., and the other at 6 o'clock p.m., and it did not require more than one day's time between the points. Appellee's letter to appellant making the offers, it will be remembered, bears date March 21st. Assuming the date of the appellant's postal card (which, she says, waa written on the morning after she received appellee's letter) to be correct, she received appellant's letter on the even- Chap. I. § 6.] OFFER AND ACCEPTANCE. 45 ing of the 22d. Appellee was, therefore, entitled to expect a reply mailed on the 23d, which he ought to have received on that day, or at farthest, by the morning of the 24th ; but appel- lant's reply was not mailed until the 25th. It does not relieve appellant of fault that she gave the postal card to a boy on the 23d, to have him mail it. Her duty was not to place an answer in private hands, but in the post-ofl&ce. The boy was her agent, not that of the appellee, and his negligence in mailing the postal card was her negligence. The question whether it would not have equally subserved appellee's object had he treated the postal card of appellant as the consummation of a contract is irrelevant. Appellant seeks to recover upon the strict letter of a special contract, and it is there- fore incumbent upon her to prove such contract. It is required of her, as we have seen, to prove an acceptance of appellee's offer within the time to which it was limited — that is to say, by the placing in the post-ofRce of an answer unequivocally accepting the offer in time for the return mail, which she did not do. Appellee was therefore under no obligation to regard the contract as closed. He might, it is true, have done so, but he was not legally bound in that respect, nor was he legally bound to notify appellant that her acceptance had not been signified within the time to which his offer was limited. She is legally chargeable with knowledge that her acceptance was not in time, and in order to fix a liability thereby upon the appellee, it was incum- bent upon her, before assuming that appellee waived this objec- tion, to ascertain that he in fact did so. Appellee was led by the postal card of appellant to believe that he would, when he arrived at Chicago on Thursday, fitad her either at Wetherell's or at Keith Bros. Had he done so, it was his intention to treat the contract as closed; but she was not there, and this intention was not acted upon, and so it is to be consid- ered as if it had never existed. Appellee, not finding appellant at Wetherell's or Keith Bros., as she had led him to believe he would, had no reason to assume that she was, in good faith, acting upon the assumption that her postal card had closed the contract, and he cannot therefore be held estopped from denying that it was not posted in time. In view of the lateness of the 46 FORMATION OF CONTRACT. [Part II. season and the danger to appellee's business from delay, of all ■which appellant was aware, it cannot be said appellee acted with undue haste in engaging another milliner. The judgment is affirmed. Judgment affixmed. DicESY, J., dissented. MINNESOTA OIL CO. v. COLLIER &c. CO. 4 DILLON (U. S. C. C), 431.-1876. Action for oil sold by plaintiff to defendant. Defendant sets up counter-claim for damages for non-delivery of oil bought of plaintiff. Defendant's counter-claim rests on these facts. On July 31st, plaintiff offered defendant by telegraph a quantity of oil at fifty- eight cents. The telegram was sent on Saturday, but was not delivered to defendant until Monday, August 2d, between eight and nine o'clock. On Tuesday, August 3d, about nine o'clock, defendant deposited a telegram accepting the offer. Later in the day, plaintiff sent defendant a telegram withdrawing the offer of July 31st, but defendant replied that sale was effected, and inquired when shipment would follow. It appeared that the market was very much unsettled, and that the price of oil was subject to sudden fluctuations during the month previous, and at the time of this negotiation, varying from day to day, and ranging between fifty-five and seventy-five cents per gallon. It is urged by the defendant that the dispatch of Tuesday, August 3, 1875, accepting the offer of the plaintiff transmitted July 31st, and delivered Monday morning, August 2d, concluded a contract for the sale of the twelve thousand four hundred and fifty gallons of oil. The plaintiff, on the contrary, claims, first, that the dispatch accepting the proposition made July 31st was not received until after the offer had been withdrawn ; second, that the acceptance of the offer was not in due time, that the delay was unreasona- ble, and therefore no contract was completed. CJHAP. I. § 6.] OFFER AND ACCEPTANCE. 47 Nelson, J. It is well settled by the authorities in this coun- try, and sustained by the later English decisions, that there is no difference in the rules governing the negotiation of contracts by correspondence through the post-office and by telegraph, and a contract is concluded when an acceptance of a proposition is deposited in the telegraph-oflfice for transmission. See Am. Law Beg. Vol. 14, No. 7, 401, "Contracts by Telegraph," article by Judge Redfield, and authorities cited; also Trevor v. Wood, 36 N. Y. 307. The reason for this rule is well stated in Adams v. Lindsell (1 Barn. & Aid. 681). The negotiation in that case was by post. The court said, " that if a bargain could not be closed by letter before the answer was received, no contract could be completed through the medium of the post-office; that if the one party was not bound by his offer when it was accepted (that is, at the time the letter of acceptance is deposited in the mail), then the other party ought not to be bound until after they had received a noti- fication that the answer had been received and assented to, and that it might so go on ad infinitum." See also 5 Pa. St. 339; 11 N. Y. 441; Mactier v. Frith, 6 Wend. 103; 48 N. H. 14; 8 English Common Bench, 225. In the case at bar the delivery of the message at the telegraph-office signified the acceptance of the offer. If any contract was entered into, the meeting of minds was at 8.53 of the clock on Tuesday morning, August 3d, and the subsequent dispatches are out of the case. 1 Parsons on Contracts, 482, 483. This rule is not strenuously dissented from on the argument, and it is substantially admitted that the acceptance of an offer by letter or by telegraph completes the contract, when such accept- ance is put in the proper and usual way of being communicated by the agency employed to carry it ; and that when an offer is made by telegraph, an acceptance by telegraph takes effect when the dispatch containing the acceptance is deposited for transmis- sion in the telegraph-office, and not when it is received by the other party. Conceding this, there remains only one question to decide, which will determine the issues : Was the acceptance of defendant deposited in the telegraph-office Tuesday, August 3d, within a reasonable time, so as to consummate a contract binding upon the plaintiff? 48 FOBMATION OF CONTRACT. [PAST II. It is undoubtedly the rule that when a proposition is made under the circumstances in this case, an acceptance concludes the contract tf the offer is still open, and the mutual consent necessary to convert the offer of one party into a binding con- tract by the acceptance of the other is established if such accept- ance is within a reasonable time after the offer was received. The better opinion is, that what is, or is not, a reasonable time, must depend upon the circumstances attending the negotia- tion, and the character of the subject-matter of the contract, and in no better way can the intention of the parties be determined. If the negotiation is in respect to an article stable in price, there is not so much reason for an immediate acceptance of the offer, and the same rule would not apply as in a case where the negotiation related to an article subject to sudden and great fluctuations in the market. The rule in regard to the length of the time an offer shall con- tinue, and when an acceptance completes the contract, is laid down in Parsons on Contracts (Vol. 1, p. 482). He says : " It may be said that whether the offer be made for a time certain or not, the intention or understanding of the parties is to govern. If no definite time is stated, then the inquiry as to a reasonable time resolves itself into an inquiry as to what time it is rational to suppose the parties contemplated; and the law will decide this to be that time which, as rational men, they ought to have understood each other to have had in mind." Applying this rule, it seems clear that the intention of the plaintiff, in making the offer by telegraph, to sell an article which fluctuates so much in price, must have been upon the understanding that the accept- ance, if at all, should be immediate, and as soon after the receipt of the offer as would give a fair opportunity for consideration. The delay here was too long, and manifestly unjust to the plain- tiff, for it afforded the defendant an opportunity to take advan- tage of a change in the market, and accept or refuse the offer as would best subserve its interests. Judgment will be entered in favor of the plaintiff for the amount claimed. The counter-claim is denied.. Judgment accordingly. Chap. I. § 6.] OFFER AND ACCEPTANCE. 49 (it.) Revocation. a. An offer may he revoked at any time before acceptance, FISHEE V. SELTZER. 23 PENNSYLVANIA STATE, 308. — 1864. Action by Eisher, late sheriff, to recover from Seltzer the difference between the amount bid at a sale of property and the amount realized at a second sale, with costs, etc. The sheriff, before the sale, had prescribed certain rules or conditions, among which were that "no person shall retract his or her bid," and that if a bidder failed to comply with all conditions of the sale, "he shall pay all costs and charges." At the sale Seltzer bid seven thousand dollars, under the belief that the property was to be sold free of a certain mortgage for six thousand dollars. Discovering his error, he retracted his bid before it was accepted, but the sheriff, denying this right of retraction, knocked down the property to him. He refused to take it. On a resale it brought only one thousand five hundred dollars. Judgment was entered for plaintiff for the costs of the second sale only. Plain- tiff prosecuted a writ of error. By court, Lewis, J. Mutuality is so essential to the validity of contracts not under seal, that they cannot exist without it. A bid at auction, before the hammer falls, is like an offer before acceptance. In such a case there is no contract, and the bid may be withdrawn without liability or injury to any one. The brief interval between the bid and its acceptance is the reasonable time which the law allows for inquiry, consideration, correction of mistakes, and retraction. This privilege is of vital impor- tance in sheriffs' sales, where the rule of caveat emptor operates with all its vigor. It is necessary, in order that bidders may not be entrapped into liabilities never intended. Without it, prudent persons would be discouraged from attending these sales. It is the policy of the law to promote competition, and thus to produce the highest and best price which can be obtained. The interests of debtors and creditors are thus promoted. By the opposite course, a creditor might occasionally gain an advantage, but an innocent man would suffer unjustly, and the general result 50 FORMATION OF CONTEACT. [Paet n. would be disastrous. A bidder at sheriff's sale has a right to withdraw his bid at any time before the property is struck down to him, and the sheriff has no authority to prescribe conditions which deprive him of that right. Where the bid is thus with- drawn before acceptance, there is no contract, and such a bidder cannot, in any sense, be regarded as a "purchaser." He is, there- fore, not liable for "the costs and charges" of a second sale. Where there has been no sale, there can be no resale. The judgment ought not to have been in favor of the plain- tiff, even for "the costs and charges" of the second sale; but as the defendant does not complain, we do not disturb it. Judgment afiEirmed. WHITE V. CORLIES. 46 NEW YORK, 467. — 1871. [Beported herein at p. 7.] h. An offer is made irrevocable by acceptance. COOPER V. LANSING WHEEL COMPANY. 94 MICfflGAN, 272. — 1892. Assumpsit. Defendant demurred to the declaration and the demurrer was sustained. Plaintiffs bring error. MoNTGOMERX, J. This is an appeal from a judgment sustain- ing a demurrer to plaintiffs' declaration. The first count of the declaration alleges an agreement " where- by the said defendant did undertake, promise, and agree, to and with the plaintiffs, to furnish, sell, and deliver to said plaintiffs all such number or quantity of wheels, at and for an agreed price, as said plaintiffs should or might require or want, during the season of the year 1890, in their said business of manufactur- ing; " that during the season of 1890 plaintiffs agreed to order, and did order, of defendant, all of such wheels as they might or should want or require in their said business; that certain orders so given were filled, and that certain other orders given in November and December, 1890, defendant refused to fill. Chap. I. § 6.] OFFER AND ACCEPTANCE. 51 The second count sets forth a written agreement, "which is as follows : "Owosso, Mich., Dec. 16, 1889. "Mess. Lansing Wheel Co., Lansing, Mich. " Gentlemen : Please enter our order for what wheels we may want during the season of 1890, at following prices and terms : B, |6 ; C, $5 ; D, |4 per set, f. o. b. Owosso, thirty days. All the wheels to be good stock, and smooth. Should we want a few D wheels to be extra nice stock, all selected white, they are to be furnished at same price, not to exceed 10 set in a 100. " Very respectfully yours, "Owosso Cart Co." Upon receipt of this instrument, defendant indorsed thereon the following: "Accepted. Lansing Wheel Co." Then follow the allegations as to the giving and filling of certain orders, and the refusal to fill certain other orders which were given. The defendant demurred to this declaration, the substantial ground of demurrer being that there was no mutuality of contract between the parties. It was early held in England that a proposition to sell goods at a certain specified price, and to give the offeree a stated time in which to accept or reject the offer, did not make a binding con- tract which could not be withdrawn before acceptance. See Cooke V. Oxley, 3 Term E. 653. The doctrine of this case has not, however, remained unchallenged. Mr. Story, in his work on Sales, expresses the opinion that the rule is unjust and inequita- ble. Section 127. He contends that the grant of time to accept the offer is not made without consideration. He suggests as one sufficient legal consideration the expectation or hope of the offerer, and further suggests that the making of such an offer might betray the other party into a loss of time and money, by inducing him to make examination, and to inquire into the value of the goods offered, and this inconvenience assumed by him is a sufficient consideration for the offer. There is much force in this reasoning, but it has not prevailed to abate the doctrine of Cooke v. Oxley further than this : That it is now generally held that if a proposition be made, to be 52 FORMATION OF CONTRACT. [Pabt H. accepted within a given time, it constitutes a continuing ofEer, whicli, hoTrever, may be retracted at any time. But if, at any time before it is retracted, it is accepted, such, offer and accept- ance constitute a valid contract. It was therefore within the power of defendant, in the present case, on the authority of the cases cited, to withdraw the offer made at any time before the plaintiffs had acted upon it. Authorities may be found which go further than this. The case of Bailey v. Austrian (19 Minn. 635) holds that a contract by which defendant agreed to supply plaintiffs with all the pig iron wanted by them in their business until December 31 next ensuing, at specified prices, and the plaintiffs simultaneously promised to purchase of defendant all of the iron which they might want in their said business during the time mentioned, at said prices, is not a mutual contract which can be enforced, on the ground that the plaintiffs did not engage to want any quan- tity whatever. The same court, in Tarhox v. Gotzian (20 Minn. 139) reaffirm this doctrine. In Keller v. Tbarru (3 Cal. 147) plaintiff counted upon an agree- ment by the defendant, whereby he undertook to sell and deliver to the plaintiff so many of the grapes then growing in his vine- yard as the plaintiff should wish to take, for which the plaintiff agreed to pay the defendant 10 cents per pound on delivery. The plaintiff averred that he subsequently notified the defendant that he wished to take 1900 pounds of grapes, and tendered the $190 in payment therefor, and requested the defendant to deliver such grapes to the plaintiff, but defendant refused to deliver the same, or any part thereof. The court held that this agreement, when first entered into, amounted to an offer upon the part of defendant, which the plaintiff had a right to accept or reject, and the defendant to retract at any time before acceptance ; but that, when the plaintiff named the quantity of grapes which he desired to take under the offer of defendant, the contract was complete, and both parties were bound by it. Substantially the same doctrine was held in Smith v. Morse, 20 La. Ann. 220. In Railroad Go. v. Bartlett (3 Gush. 224) it was held that a proposition in writing to sell land at a certain price, if taken with- in 30 days, is a continuing offer, which may be retracted at any Chap. I. § 6.] OFFER AND ACCEPTANCE. 53 time; but if, not being retracted, it is accepted within the time, sueli offer and acceptance constitute a valid contract. So it is generally held that in suits upon unilateral contracts, if the defendant has had the benefit of the consideration for which he bargained, he can be held bound. Jones v. Robinson, 17 Law J. Exeh. 36; Mills v. Blackall, 11 Q. B. 358; Morton y. Bum, 7 Adol. & E. 19; Kennaway v. Treleavan, 5 Mees. & W. 498; Richardson y. Hardwick, 106 U. S. 255. If it be held, as we think the correct doctrine is, that an offer to furnish such goods as the plaintiff may want within a stated time may, upon acceptance by the offeree before withdrawal, constitute a valid contract, it is difl&cult to see why, if the offeree orders any portion of the goods, and the offerer has the benefit of the sale, the entire contract may not become valid and bind- ing. This certainly would constitute a sufficient consideration. If in the present case the defendant had, in consideration of the present sale and delivery to the plaintiffs of one lot of wheels at a stated price, and for which the defendant received its pay, further agreed to furnish such further quantity of wheels as the plaintiffs might desire during the season, it would seem that a purchase of the one lot, as offered, would afford a sufficient con- sideration for defendant's undertaking. This view is adopted in England. In Bishop on Contracts, section 78, it is said : " Where it is admitted that there is nothing for A's promise to rest on but B's promise, if B has not promised, A's promise rests on nothing, and is void. There may be cases in seeming contradiction to this. If there are any really so, they are not to be followed. In one case, parties agreed that one of them should supply the other during a designated period with certain stores, as the latter might order. He made an order, which was filled; then made another, which was declined; and, on suit brought, the defendant rested his case on the lack of mutuality in the contract, which, he contended, rendered it void. Plainly it stood in law as a mere continuing offer by the defendant; but when the plaintifE made an order, he thereby accepted the ofEer to the extent of the order, and it was too late for the other to recede. So judgment went for the plaintiff." See Railway Co. v. Witham, L. E. 9 C. P. 16. We think the doctrine of this case is sound, and that it should control the present case. 54 FOKMATION OF CONTRACT. [Pabt n. Judgment should be reversed, with costs, and defendant given leave to plead over. The other Justices concurred.* c. An offer under seal is irrevocable. McMILLAIT V. AMES. 33 MINNESOTA, 257. — 1885. Vandeebukgh, J. On the day it bears date the defendant executed and delivered to James McMillan & Co. the following covenant or agreement under seal, which was subsequently as- signed to the plaintiff : [Here follows a copy of the instrument.] By the terms of this instrument, which is admitted to have been sealed by defendant, he covenanted to convey the premises upon the consideration and condition of the payment by the covenantees of the sum named, on or before the date fixed in the writing. Before performance on their part, the defendant notified them of his withdrawal and rescission of the promise and obligation embraced in such written instrument, and there- after refused the tender of payment and offer of performance by the plaintifiE in conformity therewith, as alleged in the complaint, and within the time limited. On the trial, it appearing that such notice of rescission had been given, the court rejected plain- tiff's offer to introduce the writing in evidence, and dismissed the action. The only question presented on this appeal is whether defend- ant's promise or obligation was nudum pactum and presumptively invalid for want of a consideration, or whether, being in the nature of a covenant, the defendant was bound thereby, subject to the performance of the conditions by the covenantees. Apart from the effect of the seal as evidencing a consideration binding the defendant to hold open his proposition, or rather validating his promise subject to the conditions expressed in the ■writing, it is clear that such promise, made for a consideration ^Accord: Wells v. Alexandre, 130 N.Y. 642; National Furnace Co. v. Keystone Mfg. Co., 110 HI. 427. Cf. Moulton v. Kershaw, post, p. 67. Chap. I. § 6.] OFFER AND ACCEPTANCE. 55 thereafter to be performed by tbe plaintiff at his election, would take effect as an offer or proposition merely, but would become binding as a promise as soon as accepted by the performance of the consideration, unless previously revoked or it had otherwise ceased to exist. Langdell on Cont. 70 ; Boston & M. B. R. v. Bartlett, 3 Cush. 224, 228. In the case cited there was a propo- sition to sell land by writing not under seal. The court held the party at liberty to withdraw his offer at any time before acceptance, but not after, withia the appointed time, because until acceptance it was a mere offer, without a consideration or a corresponding promise to support it, and the court say : "Whether wisely or not, the common law unyieldingly insists upon a consideration, or a paper with a seal attached." If, however, his promise is binding upon the defendant, be- cause contained in an instrument under seal, then it is not a mere offer, but a valid promise to convey the land upon the condition of payment. All that remained was performance by plaintiff within the time specified to entitle him to a fulfilment of the covenant to convey. Langdell on Cont. 178, 179. As respects the validity or obligation of such unilateral contracts, the dis- tinction between covenants and simple contracts is well defined and established. Anson, Cont. 12; Chit. Cont. 5; Leake, Cont. 146; 1 Smith, Lead Cas. (7th ed.) 698; Wing v. Chase, 35 Me. 260 ; Willard v. Tayloe, 8 Wall. 557. In Pitman v. Woodbury (3 Exch. 4, 11) Parke, B., says : " The cases establish that a covenantee in an ordinary indenture, who is a party to it, may sue the covenantor, who executed it, although he himself never did; for he is a party, although he did not exe- cute, and it makes no difference that the covenants of the defend- ant are therein stated to be in consideration of those of the covenantee. Of this there is no doubt, nor that a covenant binds without consideration." Morgan v. Pike, 14 C. B. 473, 484; Leake, Cont. 141. The covenantee in such cases may have the benefit of the contract, but subject to the conditions and provisos in the deed. The obligations frequently take the form of bonds, which is only another method of forming a contract, in which a party binds himself as if he had made a contract to perform ; a consideration being necessarily implied from the solemnity of the 56 FORMATION OF CONTRACT. [Pabt U. instrument. The consideration of a sealed instrument may be in- quired into ; it may be shown not to have been paid (Bowen v. Bell, 20 John. 338), or to be different from that expressed {Jor- dan V. White, 20 Minn. 77 [91] ; McCrea v. Purmort, 16 "Wend. 460), or as to a mortgage that there is no debt to secure ( Wearse V. Peirce, 24 Pick. 141), etc. ; but, except for fraud or illegality, the consideration implied from the seal cannot be impeached for the purpose of invalidating the instrument or destroying its char- acter as a specialty. It is true that equity -will not lend its auxiliary remedies to aid in the enforcement of a contract which is inequitable, or is not supported by a substantial consideration, but at the same time it will not on such grounds interfere to set it aside. But no reason appears why equity might not have decreed specific performance in this case (had the land not been sold), because the substan- tial and meritorious consideration required by the court in such case would consist in that stipulated in the instrument as the con- dition of a conveyance, performance of which by the plaintiff would have been exacted as a prerequisite to relief, so as to secure to defendant mutuality in the remedy, and all his rights under the contract. The inquiry would not, in such case, be directed to the constructive consideration evidenced by the seal, for a mere nominal consideration would have supported the defendant's offer or promise upon the prescribed conditions. Leake, Cont. 17, 18 ; Western R. Co. v. BabcocJc, 6 Met. 346 ; Yard v. Patton, 13 Pa. St. 278, 285 ; Candor's Appeal, 27 Pa. St. 119. If, then, defendant's promise was irrevocable within the time limited, plaintiff might certainly seek his remedy for damages, upon the facts alleged in the pleadings, upon showing perform- ance or tender thereof on his part. There is a growing tendency to abrogate the distinction between sealed and unsealed instruments; in some States by legislation, in others to a limited extent by usage or judicial recognition. State v. Young, 23 Minn. 551; 1 Pars. Cont. 429. But the significance of the seal as importing a consideration is everywhere still recognized, except as affected by legislation on the subject. It has certainly never been questioned by this court. In Pennsylvania the courts allow a party, as an equitable Chap. I. § 6.] OFFER AND ACCEPTANCE. 57 defense in actions upon sealed instruments, to show a failure to receive the consideration contracted for, where an actual valua- ble consideration was intended to pass, and furnished the motive for entering into the contract. Candor's Appeal, 27 Pa. St. 119 ; Yard v. Patton, supra. But whatever the rule as to equitable defenses and counter-claims under our system of practice may properly be held to be in the case of sealed instruments, it has no application, we think, to a case like this, where full effect must be given to the seal. Under the civil law the rule is that a party making an offer, and granting time to another in which to accept it, is not at liberty to withdraw it within the appointed time, it being deemed inequitable to disappoint expectations raised by such offer, and leave the party without remedy. The common law, as we have seen, though requiring a consideration, is satis- fied with the evidence thereof signified by a seal. Boston & M. B. B. V. Bartlett, supra. The same principle applies to a release under seal, which is conclusive though disclosing on its face a consideration otherwise insufB.cient. Staples v. Wellington, 62 Me. 9 ; Wing v. Chase, 35 Me. 260. These considerations are decisive of the case, and the order denying a new trial must be reversed. d. Must the revocation be communicated ? COLEMAN V. APPLEGAETH. 68 MARYLAND, 21. — 1887. Alvet, C. J. Coleman, the appellant, filed his bill against Applegarth and Bradley, the appellees, for a specific perform- ance of what is alleged to be a contract made by Applegarth with Coleman for the sale of a lot of ground in the city of Baltimore. The contract upon which the application is made, and which is sought to be specifically enforced, reads thus : " For and in consideration of the sum of five dollars paid me, I do hereby give to Charles Coleman the option of purchasing my lot of ground, northwest corner, etc., assigned to me by Wright and McDermot, by deed dated, etc., subject to the ground rent therein mentioned, at and for the sum of f 645 cash, at any time on or before the first day of November, 1886." 58 FORMATION OF CONTRACT. [Pabt H. It was dated the 3d of September, 1886, and signed by Apple- garth alone. The plaintiff, Coleman, did not exercise his option to purchase within the time specified in the contract ; but he alleges in his bill that Applegarth, after making the contract of the 3d of Sep- tember, 1886, and before the expiration of the time limited for the exercise of the option, verbally agreed with the plaintiff to extend the time for the exercise of such option to the 1st of December, 1886. It is further alleged that, about the 9th of November, 1886, without notice to the plaintiff, Applegarth sold, and assigned by deed, the lot of ground to Bradley, for the con- sideration of $700 ; and that subsequently, but prior to the 1st of December, 1886, the plaintiff tendered to Applegarth, in lawful money, the sum of $646, and demanded a deed of assignment of the lot of ground, but which was refused. It is also charged that Bradley had notice of the optional right of the plaintiff at the time of taking the deed of assignment from Applegarth, and that such deed was made in fraud of the rights of the plaintiff under the contract of September 3, 1886. The relief prayed is, that the deed to Bradley may be declared void, and that Applegarth may be decreed to convey the lot of ground to the plaintiff upon payment by the latter of the $645, and for general relief. The defendants, both Applegarth and Bradley, by their answers, deny that there was any binding contract, or optional right ex- isting in regard to the sale of the lot, as between Applegarth and the plaintiff, at the time of the sale and transfer of the lot to Bradley; and the latter denies all notice of the alleged agreement for the extension of time for the exercise of the option by the plaintiff ; and both defendants rely upon the statute of frauds as a defense to the relief prayed. The plaintiff was examined as a witness in his own behalf and he also called and examined both of the defendants as witnesses in support of the allegation of his bill. But without special ref- erence to the proof taken, the questions that are decisive of the case may be determined upon the facts as alleged by the bill alone, in connection with the contract exhibited, as upon de- murrer ; such facts being considered in reference to the grounds of defense interposed by the defendants. Chap. I. § 6.] OFFER AND ACCEPTANCE. 59 The contract set up is not one of sale and purchase, but simply for the option to purchase within a specified time, and for a given price. It was unilateral and binding upon one party only. There was no mutuality in it, and it was binding upon Apple- garth only for the time stipulated for the exercise of the option. After the lapse of the time given, there was nothing to bind him to accept the price and convey the property ; and the fact that this unilateral agreement was reduced to writing added nothing to give it force or operative effect beyond the time therein limited for the exercise of the option by the plaintiff. It is quite true, as contended by the plaintiff, that, as a general prop- osition, time is not deemed by courts of equity as being of the essence of contracts ; and that, in perfected contracts, ordinarily, the fact that the time for performance has passed will not be regarded as a reason for withholdiag specific execution. But while this is the general rule upon the subject, that general rule has well-defined exceptions, which are as constantly recognized as the general rule itself. If the parties have, as in this case, expressly treated time as of the essence of the agreement, or if it necessarily follows from the nature and circumstances of the agreement that it should be so regarded, courts of equity will not lend their aid to enforce specifically the agreement, regard- less of the limitation of time. 2 Story's Eq. Jur. sec. 776. Here, time was of the very essence of the agreement, the nomi- nal consideration being paid to the owner for holding the property for the specified time, subject to the right of the plaintiff to exercise hiis option whether he would buy it or not. When the time limited expired, the contract was at an end, and the right of option gone, if that right has not been extended by some valid binding agreement that can be enforced. This would seem to be the plain dictate of reason, upon the terms and nature of the contract itself ; and that is the plain result of the decision of this court, made in respect to an optional contract to purchase, in the case of Maughlin v. Perry, 35 Md. 352, 359, 360. As must be observed, it is not alleged or pretended that the plaintiff attempted to exercise his option, and to complete a con- tract of purchase, within the time limited by the written agree- ment of the 3d of September, 1886. But it is alleged and shown 60 FORMATION OF CONTRACT. [Pabt II. that before the expiration of such time, the defendant Apple- garth verbally agreed or promised to extend the time for the exercise of the option by the plaintiff from the 1st of November to the 1st of December, 1886 ; and that it was within this latter or extended period and after the property had been sold and conveyed to Bradley, that the plaintiff proffered himself ready to accept the property and pay the price therefor. It is quite clear, however, that such offer to accept the property came too late. There was no consideration for the verbal promise or agreement to extend the time, and such promise was a mere nudum pactum, and therefore not enforceable to say nothing of the statute of frauds, which has been invoked by the defendants. After the 1st of November, 1886, the verbal agreement of Apple- garth operated simply as a mere continuing offer at the price previously fixed, and which offer only continued until it should be withdrawn or otherwise ended by some act of his ; but he was entirely at liberty at any time, before acceptance, to withdraw the offer ; and the subsequent sale and transfer of the property to Bradley had the effect at once of terminating the offer to the plaintiff. Pomeroy on Specific Performance, sees. 60, 61. The principles that govern in cases like the present are very fully and clearly stated by the English court of appeal in chan- cery in the case of Dickinson v. Dodds, 2 Ch. Div. 463. That case, in several of its features, is not unlike the present. There the owner of property signed a document which purported to be an agreement to sell it at a fixed price, but added a postscript, which he also signed, in these words : "This offer to be left over until Friday, nine o'clock, a.m.," two days from the date of the agreement. Upon application of the party, who claimed to be vendee of the property, for specific performance, it was held, upon full and careful consideration by the court of appeal, that the document amounted only to an offer, which might be with- drawn at any time before acceptance, and that a sale to a third person which came to the knowledge of the person to whom the offer was made was an effectual withdrawal of the offer. In the course of his judgment, after declaring the written document to be nothing more than an offer to seU at a fixed price, Lord Justice James said: Chap. I. § 6.] OFFER AND ACCEPTANCE. 61 " There was no consideration given for the undertaking or promise, to whatever extent it may be considered binding, to keep the property un- sold until nine o'clock on Friday morning; but apparently Dickinson was of opinion, and probably Dodds was of the same opinion, that he (Dodds) was bound by that promise, and could not in any way with- draw from it, or retract it, until nine o'clock on Friday morning, and this probably explains a good deal of what afterwards took place. But it is clear, settled law, on one of the cleai-est principles of law, that this promise being a mere nudum pactum, was not binding, and that at any moment before complete acceptance by Dickinson of the offer, Dodds was as free as Dickinson himself. That being the state of things, it is said that the only mode in which Dodds could assert that freedom was by actually and distinctly saying to Dickinson, ' Now I withdraw my offer.' It appears to me that there is neither principle or authority for the prop- osition that there must be an express and actual withdrawal of the offer, or what is called a retraction. It must, to constitute a contract, appear that the two minds were at one, at the same moment of time, that is, that there was an offer continuing up to the time of the accept- ance. If there was not such a continuing offer, then the acceptance comes to nothing." And Lord Justice Mellisli was quite as explicit in stating his judgment, in the course of which, he said : " He was not in point of law bound to hold the offer over until nine o'clock on Friday morning. He was not so bound either in law or in equity. Well, that being so, when on the next day he made an agree- ment with Allan to sell the property to him, I am not aware of any ground on which it can be said that that contract with Allan was not as good and binding a contract as ever was made. Assuming Allan to have ' known (there is some dispute about it, and Allan does not admit that he knew it, but I wiU assume that he did) that Dodds made the offer to Dickinson, and had given him until Friday morning at nine o'clock to accept it, still, in point of law, that could not prevent AUan from making a more favorable offer than Dickinson, and entering at once into a bind- ing agreement with Dodds." And further on he says : " If the rule of law is that a mere offer to sell property, which can be withdrawn at any time, and which is made dependent on the acceptance of the person to whom it is made, is a mere nudum pactum, how is it possible that the person to whom the offer has been made can by accept- ance make a binding contract after he knows that the person who has made the offer has sold the property to some one else 7 It is admitted law that if a man who makes an offer dies, the offer cannot be accepted after he is dead, and parting with the property has very much the same 62 FORMATION OF CONTRACT. [PART n. effect as the death of the owner, for it makes the performance of the offer impossible. I am clearly of opinion that, just as when a man who has made an offer dies before it is accepted it is impossible that it can then be accepted, so when one of the persons to whom the offer was made knows that the property has been sold to some one else, it is too late for him to accept the offer; and on that ground I am clearly of opinion that there was no binding contract for the sale of this property by Dodds to Dickinson." In tMs case, tte plaintiff admits that, at tlie time he' proffered to Applegarth acceptance of the previous offer to sell at the price named, he was aware of the fact that the property had been sold to Bradley. It was therefore too late for him to attempt to accept the offer, and there was not, and could not be made by such proffered acceptance, any binding contract of sale of the property. It follows that the decree of the court below, dismissing the bill of the plaintiff, must be affirmed. Decree affirmed.* § 7. An offer need not be made to an ascertained person, but no contract can arise until it has been accepted by an ascertained peiaon. (i.) Accidental compliance with terms of offer. FITCH V. SNEDAKER. 38 NEW YORK, 248. — 1868. Woodruff, J. On the 14th of October, 1859, the defendant caused a notice to be published, offering a reward of two hundred dollars . . . "to any person or persons who will give such information as shall lead to the apprehension and conviction of the person or persons guilty of the murder of " a certain unknown female. On the 15th day of October, before the plaintiffs had seen or heard of the offer of this reward, one Fee was arrested and put in jail, and though not in terms so stated, the case warrants the inference, that, by means of the evidence given by the plaintiffs ^ See also Boston & Maine B. v. Bartlett, 3 Cush. 224 ; Houghvoout v. Boisaubin, 18 N. J. Eq. 318 ; Sherley v. Peehl (Wis.), 54 N. W. R. 267. Chap. I. § T.] OFFER AND ACCEPTANCE. 63 on his trial and their efforts to procure testimony, Fee was convicted. This action is brought to recover the reward so offered. On the trial the plaintiffs proved the publication of the notice, and then proposed to prove that they gave information before the notice was known to them, which led to the arrest of Fee. This evidence was excluded. The plaintiffs then offered to prove, that, with a view to this reward, they spent time and money, made disclosures to the district attorney, to the grand jury and to the court on the trial after Fee was in jail, and that, without their effort, evidence, and exertion, no indictment or conviction could have been had. This evidence was excluded. The court thereupon directed a nonsuit. It is entirely clear that, in order to entitle any person to the reward offered in this case, he must give such information as shall lead to both apprehension and conviction. That is, both must happen, and happen as a consequence of the information given. No person could claim the reward whose information caused the apprehension, until conviction followed; both are con- ditions precedent. No one could therefore claim the reward, who gave no information whatever until after the apprehension, although the information he afterward gave was the evidence upon which conviction was had, and, however clear, that, had the information been concealed or suppressed, there could have been no conviction. This is according to the plain terms of the offer of the reward, and is held in Jones v. The Phcenix Bank, 8 N. Y. 228; Thatcher v. England, 3 Com. Bench, 254. In the last case it was distinctly held, that, under an offer of reward, payable " on recovery of property stolen and conviction of the offender," a person who was active in arresting the thief and finding and restoring part of the stolen property, giving information to the magistrates, tracing to London other of the property and producing pawnbrokers with whom the prisoner had pledged it, and who incurred much trouble and expense in bring- ing together witnesses for the prosecution, was not entitled to the reward, as it appeared that another person gave the first informa- tion as to the party committing the robbery. In the present case, the plaintiff, after the advertisement of 64 FOKMATION OF CONTRACT. [Pabt IL the defendant's offer of a reward came to his knowledge, did nothing toward procuring the arrest, nor which led thereto, for at that time Pee had already been arrested. The cases above referred to, therefore, establish that, if no information came from the plaintiffs which led to the arrest of Fee, the plaintiffs are not entitled to recover, however much the information they subsequently gave, and the efforts they made to procure evidence, may have contributed to or even have caused his conviction, and, therefore, evidence that it was their efforts and information which led to his conviction was wholly immate- rial, if they did not prove that they had given information which led to his apprehension, and was properly rejected. The question in this case is simple. A murderer having been arrested and imprisoned in consequence of information given by the plaintiff before he is aware that a reward is offered for such apprehension, is he entitled to claim the reward in case convic- tion follows? The ruling on the trial, excluding all evidence of information given by the plaintiffs before they heard of this reward, neces- sarily answers this question in the negative. The case of Williams v. Carwardine (4 Bam. & Adol. 621), and same case at the assizes (5 Carr. & Pajme, 566), holds that a person who gives information according to the terms of an offered reward is entitled to the money, although it distinctly appeared that the informer had suppressed the information for five months, and was led to inform, not by the promised reward, but by other motives. The court said the plaintiff had proved performance of the condition upon which the money was payable and that estab- lished her title. That the court would not look into her motives. It does not appear by the reports of this case whether or not the plaintiff had ever seen the notice or handbill posted by the defendant, offering the reward; it does not, therefore, reach the precise point involved in the present appeal. I perceive, however, no reason for applying to an offer of reward for the apprehension of a criminal any other rules than are applicable to any other offer by one, accepted or acted upon by another, and so relied upon as constituting a contract. The form of action in all such cases is assumpsit. The defend' Chap. I. § 7.] OFFER AND ACCEPTANCE. 66 ant is proceeded against as upon his contract to pay, and the first question is, was there a contract between the parties? To the existence of a contract there must be mutual assent, or in another form offer and consent to the offer. The motive inducing consent may be immaterial, but the consent is vital. Without that there is no contract. How then can there be con- sent or assent to that of which the party has never heard? On the 15th day of October, 1859, the murderer, Fee, had, in con- sequence of information given by the plaintiffs, been apprehended and lodged in jail. But the plaintiffs did not, in giving that information, manifest any assent to the defendant's offer, nor act in any sense in reliance thereon, they did not know of its exist- ence. The information was voluntary, and in every sense (material to this case) gratuitous. The offer could only operate upon the plaintiffs after they heard of it. It was prospective to those who will, in the future, give information, etc. An offer cannot become a contract unless acted upon or assented to. Such is the elementary rule in defining what is essential to a contract. Chitty on Con. (5th Am. ed.), Perkins' notes, p. 10, 9, and 2, and cases cited. Nothing was here done to procure or lead to Fee's apprehension in view of this reward. Indeed, if we were at liberty to look at the evidence on the first trial, it would appear that Fee was arrested before the defendant offered the reward. I think the evidence was properly excluded and the nonsuit necessarily followed. The judgment should be affirmed. Judgment affirmed.* DAWKINS V. SAPPINGTON. 26 INDIANA, 199. — 1866. Feazee, J. The appellant was the plaintiff below. The com- plaint was in two paragraphs. 1. That a horse of the defendant 1 Accord : Sowland v. Lounds, 51 N. Y. 604 ; Stamper v. Temple, 6 Humph. (Tenn.) 113. p 66 FORMATION OF CONTRACT. [Part H. had been stolen, whereupon he published a handbill, offering a reward of $50 for the recovery of the stolen property, and that thereupon the plaintiff rescued the horse from the thief and restored him to the defendant, who refused to pay the reward. 2. That the horse of the defendant was stolen, whereupon the plaintiff recovered and returned him to the defendant, who, in consideration thereof, promised to pay $50 to the plaintiff, which he has failed and refused to do. To the second paragraph a demurrer was sustained. To the first an answer was filed, the second paragraph of which alleged that the plaintiff, when he rescued the horse and returned him to the defendant, had no knowledge of the offering of the reward. The third paragraph averred that the handbill offering the reward was not published until after the rescue of the horse and his delivery to the defendant. The plaintiff unsuccessfully demurred to each of these paragraphs, and refusing to reply the defendant had judgment. 1. Was the second paragraph of the complaint sufficient? The consideration alleged to support the promise was a voluntary service rendered for the defendant without request, and it is not shown to have been of any value. A request should have been alleged. This was necessary at common law, even in common count for work and labor {Chitty's PL 338), though it was not always necessary to prove an express request, as it would some- times be implied from the circumstances exhibited by the evidence. 2. It is entirely unnecessary, as to the third paragraph of the answer, to say more than that, though it was highly improbable in fact, it was sufficient in law. 3. The second paragraph of the answer shows a performance of the service without the knowledge that the reward had been offered. The offer, therefore, did not induce the plaintiff to act. The liability to pay a reward offered seems to rest, in some cases, upon an anomalous doctrine, constituting an exception to the general rule. In Williams v. Carwardine (4 Barn. & Adolph. 621) there was a special finding, with a general verdict for the plaintiff, that the information for which the reward was offered was not induced to be given by the offer, yet it was held by all Chap. I. § 7.] OFFER AND ACCEPTANCE. 67 the judges of the King's Bench then present, Denman, C. J., and Littledale, Parke, andPatteson, JJ., that the plaintiff was entitled to judgment. It was put upon the ground that the offer was a general promise to any person who would give the information sought; that the plaintiff, having given the information, was within the terms of the offer, and that the court could not go into the plaintiff's motives. This decision haS not, we believe, been seriously questioned, and its reasoning is conclusive against the suificiency of the defense under examination. There are some considerations of morality and public policy which strongly tend to support the judgment in the case cited. If the offer was made in good faith, why should the defendant inquire whether the plaintiff knew that it had been made? Would the benefit to him be diminished by the discovery that the plaintiff, instead of acting from mercenary motives, had been impelled solely by a desire to prevent the larceny from being profitable to the person who had committed it? Is it not well that any one who has an opportu- nity to prevent the success of a crime, may know that by doing . so he not only performs a virtuous service, but also entitles him- self to whatever reward has been offered therefor to the public? The judgment is reversed, with costs, and the cause remanded, with directions to the court below to sustain the demurrer to the second paragraph of the answer.* (it.) Offer distinguished from invitation to treat. MOULTON V. KEESHAW. 59 WISCONSm, 316. — 1884. Action for damages for non-performance of a contract alleged to be contained in the following corrtspondence : "Milwaukee, September 19, 1882. " J. H. MouLTON, Esq., La Crosse, Wis. "Dear Sir: In consequence of a rupture in the salt trade, we are authorized to offer Michigan fine salt, in full car-load lots of eighty to 1 Accord : Auditor v. Ballard, 9 Bush. C^y.) 572 ; Bussell v. Stewart, 44 Vt. 170. 68 FORMATION OF CONTRACT. [Pabt U. ninety-five bbls., delivered at your city, at 85 cents per bbl., to be shipped per C. & N. W. R. K. Co. only. At this price it is a bargain, as the price in general remains tinchanged. Shall be pleased to receive your order. "Yours truly, "C. J. Kershaw & Son." "La Crossb, September 20, 1882. " To C. J. Kershaw §• Son, Milwaukee, Wis. . Your letter of yesterday received and noted. You may ship me two thousand (2000) barrels Michigan fine salt, as offered in your letter. Answer. "J. H. MOULTON." Tatloe, J. The only question presented is whether the appellant's letter, and the telegram sent by respondent in reply thereto, constitute a contract for the sale of 2000 barrels of Michigan fine salt by the appellants to the respondent, at the price named in such letter. We are very clear that no contract was perfected by the order telegraphed by the respondent in answer to appellant's letter. The learned counsel for the respondent clearly appreciated the necessity of putting a construction upon the letter which is not apparent on its face, and in their complaint have interpreted the letter to mean that the appellants, by said letter, made an express offer to sell the respondent, on the terms stated, such reasonable amount of salt as he might order, and as the appellants might reasonably expect him to order, in response thereto. If in order to entitle the plaintiff to recover in this action it is necessary to prove these allegations, then it seems clear to us that the writings between the parties do not show the contract. It is not insisted by the learned counsel for the respondent that any recovery can be had unless a proper construction of the letter and telegram constitute a binding contract between the parties. The alleged contract being for the sale and delivery of personal property of a value exceeding $50, is void by the statute of frauds, unless in writing. § 2308 B. S. 1878. The counsel for tbe respondent claims that the letter of the appellants is an offer to sell to the respondent, on the terms mentioned, any reasonable quantity of Michigan fine salt that he might see fit to order, not less than one car-load. On the other Chap. I. § 7.] OFFER AND ACCEPTANCE. ^ 69 hand, the counsel for the appellants claim that the letter is not an offer to sell any specific quantity of salt, but simply a letter Such as a business man would send out to customers or those with whom he desired to trade, soliciting their patronage. To give the letter of the appellants the construction claimed for it by the learned counsel for the respondent, would introduce such an element of uncertainty into the contract as would necessarily render its enforcement a matter of di£B.culty, and in every case the jury trying the case would be called upon to determine whether the quantity ordered was such as the appellants might reasonably expect from the party. This question would neces- sarily involve an inquiry into the nature and extent of the busi- ness of the person to whom the letter was addressed, as well as to the extent of the business of the appellants. So that it would ' be a question of fact for the jury in each case to determine whether there was a binding contract between the parties. And this question would not in any way depend upon the language used in the written contract, but upon the proofs to be made outside of the writings. As' the only communications between the parties upon which a contract can be predicated are the letter and the reply of the respondent, we must look to them and noth- ing else, in order to determine whether there was a contract in •fact. We are not at liberty to help out the written contract, if there be one, by adding by parol evidence additional facts to help out the writing, so as to make out a contract not expressed therein. If the letter of the appellants is an offer to sell salt to the respondent on the terms stated, then it must be held to be an offer to sell any quantity, at the option of the respondent, not less than one car-load. The difiB.culty and injustice of construing the letter into such an offer is so apparent that the learned counsel for the respondent do not insist upon it, and consequently insist that it ought to be construed as an offer to sell such a quantity as the appellants, from their knowledge of the business of the respondent, might reasonably expect him to order. Rather than introduce such an element of uncertainty into the contract, we deem it much more reasonable to construe the letter as a simple notice to those dealing in salt that the appellants were in a condition to supply that article for the price named. 70 FORMATION OF CONTRACT. [Pabt U. and requesting the person to whom it was addressed to deal with them. This case is one where it is eminently proper to heed the injunction of Justice Foster in the opinion in Lyman v. Bobin- son (14 Allen, 254) : " That care should always be taken not to construe as an agreement, letters which the parties intended only as preliminary negotiations." We do not wish to be understood as holding that a party may not be bound by an offer to sell personal property, where the amount or quantity is left to be fixed by the person to whom the offer is made, when the offer is accepted and the amount or quan- tity fixed before the offer is withdrawn. We simply hold that the letter of the appellants in this case was not such an offer. If the letter had said to the respondent, we will sell you all the Michigan fine salt you will order, at the price and on the terms named, then it is imdoubtedly the law that the appellants would have been bound to deliver any reasonable amount the respondent might have ordered, — possibly any amount, — or make good their default in damages. The case cited by the counsel, decided by the California Supreme Court {Keller v. Tharra, 3 Cal. 147), was an offer of this kind with an additional limitation. The defendant in that case had a crop of growing grapes, and he offered to pick from the vines and deliver to the plaintiff, at defendant's vineyard, so many grapes then growing in said vine- yard as the plaintiff should wish to take during the present year, at ten cents per pound on delivery. The plaintiff, within the time and before the offer was withdrawn, notified the defendant that he wished to take 1900 pounds of his grapes on the terms stated. The court held there was a contract to deliver the 1900 pounds. In this case, the fixing of the quantity was left to the person to whom the offer was made, but the amount which the defendant offered, beyond which he could not be bound, was also fixed by the amount of grapes he might have in his vineyard in that year. The case is quite different in its facts from the case at bar. The cases cited by the learned counsel for the appellants (Beaupri v. P. & A. Tel. Co., 21 Minn. 155, and Kinghome v. Montreal Tel. Co., U. C. 18 Q. B. 60) are nearer in their main facts to the case at bar, and in both it was held there was no Chap. I. § 8.] OFFER AND ACCEPTANCE. 71 contract. We, however, place our opinion upon the language of the letter of the appellants, and hold that it cannot be fairly- construed into an offer to sell to the respondent any quantity of salt he might order, nor any reasonable amount he might see fit to order. The language is not such as a business man would use in making an offer to sell to an individual a definite amount of property. The word "sell" is not used. They say, "We are authorized to offer Michigan fine salt," etc., and volunteer an opinion that at the terms stated it is a bargain. They do not say, we offer to sell to you. They use the general language proper to be addressed generally to those who were interested in the salt trade. It is clearly in the nature of an advertisement, or business circular, to attract the attention of those interested in that business to the fact that good bargains in salt could be had by applying to th«m, and not as an offer by which they are to be bound, if accepted, for any amount the persons to whom it was addressed might see fit to order. We think the complaint fails to show any contract between the parties, and the demurrer should have been sustained. By the Court. The order of the Circuit Court is reversed and the cause remanded for further proceedings according to law. § 8. The offer must be Intended to create, and capable of creat- ing, legal relations. KELLER V. HOLDEKMAN. 11 MICHIGAN, 248. — 1863. Action on a three-hundred-dollar check which had been drawn by defendant in favor of plaintiff, on a bank which had refused to honor it. The facts concerning the check were, that it was given for a fifteen-dollar watch, which defendant kept until the day of trial, when he offered to returr^ it, but plaintiff refused to receive it ; that the whole transaction was a frolic and banter, the plaintiff not expecting to sell nor the defendant intending to buy the watch at the sum for which the check was drawn; and that the defendant when he drew the check had no money in the banker's hands, and had intended to insert a condition in the 72 FORMATION OF CONTRACT. [Part II. check that •would prevent his being liable upon it, but had failed to do so. Judgment was rendered against him for the amount of the check, whereupon he appealed. Mabtin, C. J. When the court below found as a fact that "the whole transaction between parties was a frolic and a banter, the plaintiff not expecting to sell nor the defendant intending to buy the watch at the sum for which the check was drawn," the con- clusion should have been that no contract was ever made by the parties, and the finding should have been that no cause of action existed upon the check to the plaintiff. The judgment is reversed, with costs of this court and of the court below. The other Justices concurred. McCLUEG V. TEREY. 21 NEW JERSEY EQUITY, 225. — 1870. The Chancellor: The complainant seeks to have the cere- mony of marriage performed between herself and the defendant in November, 1869, declared to be a nullity. The ground on which she asks this decree is, that although the ceremony was actually performed, and by a justice of the peace of the county, it was only in jest, and not intended to be a contract of marriage, and that it was so understood at the time by both parties, and the other persona present ; and that both parties have ever since so considered and treated it, and have never lived together, or acted towards each other as man and wife. The bill and answer both state these as the facts of the case, and that neither party intended it as a marriage, or was willing to take the other as husband or wife. These statements are corroborated by the wit- nesses present. The complainant is an infant of nineteen years, and had returned late in the evening to Jersey City, from an excursion with the defendant and a number of young friends, among whom was a justice of the peace, and all being in good spirits, excited by the excursion, she in jest challenged the de- fendant to be married to her on the spot ; he in the same spirit accepted the challenge, and the justice at their request per- Chap. I. § 8.] OFFEK AND ACCEPTANCE. 73 formed the ceremony, tliey making the proper responses. The ceremony was in the usual and proper form, the justice doubting whether it was in earnest or in jest. The defendant escorted the complainant to her home, and left her there as usual on occa- sions of such excursions ; both acted and treated the matter as if no ceremony had taken place. After some time the friends of the complainant having heard of the ceremony, and that it had been formally and properly performed before the proper magis- trate, raised the question and entertained doubts whether it was not a legal marriage ; and the justice meditated returning a cer- tificate of the marriage to be recorded before the proper of&cer. The bill seeks to have the marriage declared a nullity, and to re- strain the justice from certifying it for record. Mere words without any intention corresponding to them, will not make a marriage or any other civil contract. But the words are the evidence of such intention, and if once exchanged, it must be clearly shown that both parties intended and understood that they were not to have effect. In this case the evidence is clear that no marriage was intended by either party; that it was a mere jest got up in the exuberance of spirits to amuse the com- pany and themselves. If this is so, there was no marriage. On this part of the case I have no difficulty. ***** I am satisfied that this court has the power, and that this is a proper case to declare this marriage a nullity. SHERMAN V. KITSMILLEE, ADM'E. 17 SERGEANT AND RAWLE (Pbnn.), 45. — 1827. [Reported herein at p. 157.] 74 FORMATION OF CONTRACT. [Pakt U. § 9. Acceptance must be absolute and identical with the terms of the offer. MINNEAPOLIS AND ST. LOUIS RAILWAY v. COLUMBUS EOLLING MILL. 119 UNITED STATES, 149. — 1886. Mb. Justice Gkat. The rules of law which govern this case are well settled. As no contract is complete without the mutual assent of the parties, an offer to sell imposes no obligation until it is accepted according to its terms. So long as tlje offer has been neither accepted nor rejected, the negotiation remains open, and imposes no obligation upon either party; the one may decline to accept, or the other may withdraw his offer; and either rejection or withdrawal leaves the matter as if no offer had ever been made. A proposal to accept, or an accept- ance, upon terms varying from those offered, is a rejection of the offer, and puts an end to the negotiation, unless the party who made the original offer renews it, or assents to the modifica- tion suggested. The other party, having once rejected the offer, cannot afterwards revive it by tendering an acceptance of it. EUason v. Henshaw, 4 Wheat. 225; Carr v. Duval, 14 Pet. 77; National Bank v. Hall, 101 U. S. 43, 50; Hyde v. Wrench, 3 Beavan, 334; Fox v. Turner, 1 Bradwell, 153. If the offer does not limit the time for its acceptance, it must be accepted within a reasonable time. If it does, it may, at any time within the limit and so long as it remains open, be accepted or rejected by the party to whom, or be withdrawn by the party by whom, it was made. Boston & Maine Railroad v. Bartlett, 3 Gush. 224; Dickinson v. Dodds, 2 Ch. D. 463. The defendant, by the letter of December 8, offered to sell to the plaintiff two thousand to five thousand tons of iron rails on certain terms specified, and added that, if the offer was accepted the defendant would expect to be notified prior to December 20. This offer, while it remained open, without having been rejected by the plaintiff or revoked by the defendant, would authorize the plaintiff to take at his election any number of tons not less than two thousand nor more than five thousand, on the terms sp.eci- Chap. I. §9.] OFI'EK AND ACCEPTANCE. 75 fied. The offer, while unrevoked, might be accepted or rejected by the plaintiff at any time before December 20. Instead of accepting the offer made, the plaintiff, on December 16, by tele- gram and letter, referring to the defendant's letter of December 8, directed the defendant to enter an order for twelve hundred tons on the same terms. The mention, in both telegram and letter, of the date and the terms of the defendant's original offer, shows that the plaintiff's order was not an independent proposal, but an answer to the defendant's offer, a qualified acceptance of that offer, varying the number of tons, and therefore in law a rejection of the offer. On December 18, the defendant by tele- gram declined to fulfill the plaintiff's order. The negotiation between the parties was thus closed, and the plaintiff could not afterwards fall back on the defendant's original offer. The plaintiff's attempt to do so, by the telegram of December 19, was therefore ineffectual and created no rights against the defendant. Such being the legal effect of what passed in writing between the parties, it is unnecessary to consider whether, upon a fair interpretation of the instructions of the court, the question whether the plaintiff's telegram and letter of December 16 con- stituted a rejection of the defendant's offer of December 8 was ruled in favor of the defendant as matter of law, or was sub- mitted to the jury as a question of fact. The submission of a question of law to the jury is no ground of exception if they decide it aright. Pence v. Langdon, 99 U. S. 578. Judgment affirmed.^ 1 See also Maclay v. Harvey, 90 111. 525, ante, p. 41, 44, 45 ; Fitch v, Snedaker, 38 N. T. 248, ante, p. 63. 76 FORMATION OF CONTKACT. [Part U. CHAPTER II. FORM AND CONSIDERATION. § 1. Contracts of record. O'BEIEN, late sheriff, v. YOUNG et al. 95 NEW YORK, 428.— 1884. Appeal from order of the General Term of the Supreme Court, in the first judicial department, made January 8, 1884, which affirmed an order of Special Term, denying a motion to restrain the sheriff of the county of New York from collecting, upon a judgment issued to him herein, interest at a greater rate than six per cent after January 1, 1880. Judgment was perfected against the defendants February lO, 1877, at which time the legal rate of interest in the State was seven per cent. By Chap. 538 of the laws of 1879 the legal rate of interest was reduced from seven to six per cent, the act to go into effect January 1, 1880. Execution on the judgment was issued to the sheriff November 19, 1883, instructing him to col- lect the amount thereof with interest at the rate of seven per cent from the date of the entry of judgment, February 10, 1877. Eabl, J. By the decided weight of authority in this State, where one contracts to pay a principal sum at a certain future time with interest, the interest prior to the maturity of the contract is payable by virtue of the contract, and thereafter as damages for the breach of the contract. Macomber v. Dunham, 8 Wend. 550; United States Bank v. Chapin, 9 Id. 471; Hamilton V. Van Rensselaer, 43 N. Y. 244; Ritter v. Phillips, 53 Id. 586; Southern Central R. R. Co. v. Town of Moravia, 61 Barb. 180. And such is the rule as laid down by the Federal Supreme Court. Brewster Y. Wakefield, 22 How. (U.'S.) 118; Bumhiselv. Firman, 22 Wall. 170; Holden v. Trust Co., 100 U. S. 72. Chap. n. § 1.] FORM: CONTRACTS OF RECORD. 77 The same authorities show that after the maturity of such a contract, the interest is to be computed as damages according to the rate prescribed by the law, and not according to that pre- scribed in the contract if that be more or less. But when the contract provides that the interest shall be at a specified rate until the principal shall be paid, then the contract rate governs until payment of the principal or until the contract is merged in a judgment. And where one contracts to pay money on demand "with interest," or to pay money generally "with interest," without specifying time of payment, the statutory rate then existing becomes the contract rate, and must govern until payment or at least until demand and actual default, as the par- ties must have so intended. Paine v. Caswell, 68 Me. 80; 28 Am. Eep. 21 ; Eaton v. Boissonnault, 67 Me. 540 ; 24 Am. Eep. 62. If, therefore, this judgment, the amount of which is by its terms payable with interest, is to be treated as a contract — as a . bond executed by the defendants at its date — then the statutory rate of interest existing at the date of the rendition of the judg- ment is to be treated as part of the contract and must be paid by the defendants according to the terms of the contract, and thus the plaintiff's contention is well founded. But is a judgment, properly speaking, for the purposes now in hand, a contract? I think not. The most important elements of a contract are wanting. There is no aggregatio mentium. The defendant has not voluntarily assented. All the authorities assert that the existence of parties legally capable of contracting is essential to every contract, and yet they nearly all agree that judgments entered against lunatics and others incapable in law of contracting are conclusively binding until vacated or reversed. In Wyman v. Mitchell (1 Cowen, 316), Sutherland, J., said that "a judgment is in no sense a contract or agreement between the parties." In McCoun v. The New York Central and Hudson Biver Railroad Company (50^. Y. 176), Allen, J., said that "a statute liability wants all the elements of a contract, considera- tion and mutuality as well as the assent of the party. Even a judgment founded upon contract is no contract." In Bidleson v. Whytel (3 Burrows, 1545-1548) it was held after great deliJbera- tioa and after consultation with all the judges. Lord Mansfield 78 FORMATION OF CONTRACT. [Past H. speaking for the court, "that a judgment is no contract, nor can be considered in the light of a contract, for judicium redditur in invitum." To the same effect are the following authorities: Bae V. Eulbert, 17 111. 572; Todd v. Crumb, 5 McLean, 172; iSmith v. Harrison, 33 Ala. 706; Masterson v. Gibson, 56 Id. 66; Keith t. Estill, 9 Port. 669; Larrabee y. Baldwin, 35 Cal. 156; In re Ken- nedy, 2 S. C. (N. S.) 226; State of Louisiana y. City of New Orleans, 109 U. S. Sup. Ct. 285. But in some decided cases, and in text-books, judges and jurists have frequently, and, as I think, without strict accuracy, spoken of judgments as contracts. They have been classified as contracts with reference to the remedies upon them. In the division of actions into actions ex contractu and ex delicto, actions upon judg- ments have been assigned to the former class. It has been said that the law of contracts, in its widest extent, may be regarded as including nearly all the law which regulates the relations of human life; that contract is co-ordinate and commensurate with duty; that whatever it is the duy of one to do he may be deemed in law to have contracted to do, and that the law presumes that every man undertakes to perform what reason and justice dictate he should perform. 1 Pars, on Cont. (6th ed.) 3; 2 Black. Com. 443; 3 Id. 160; McCoun v. N. T. C. & H. B. B. B. Co., supra. Contracts in this wide sense are said to spring from the relations of men to each other and to the society of which they are mem- bers. Blackstone says: "It is a part of the original contract entered into by all mankind who partake the benefits of societyj to submit in all points to the municipal constitutions and local ordinances of that State of which each individual is a member." In the wide sense thus spoken of, the contracts are mere fictions invented mainly for the purpose of giving and regulating remedies. A man ought to pay for services which he accepts, and hence the law implies a promise that he will pay for them. A man ought to support his helpless children, and hence the law implies a promise that he will do so. So one ought to pay a judgment rendered against him, or a penalty which he has by his miscon- duct incurred, and hence the law implies a promise that he will pay.. There is no more contract to pay the judgment than there is to pay the penalty. He has neither promised to pay the one Chap. II. §1.] FOEM: CONTRACTS OF KECORD. 79 nor the other. The promise is a mere fiction, and is implied merely for the purpose of the remedy. Judgments and penalties are, in the books, in some respects, placed upon the same footing. At common law both could be sued for in an action ex contractu for debt, the action being based upon the implied promise to pay. But no one will contend that a penalty is a contract, or that one is really under a contract liability to pay it. McCoun v. N. T. C. & H. B. R. R. Co., supra. Suppose a statute gives a penalty to an aggrieved party, with interest, what interest could he recover? The interest allowed by law when the penalty accrued, if the statutory rate has since been altered? Clearly not. He would be entitled to the interest pre- scribed by law during the time of. the defendant's default in pay- ment. There would, in such a case, be no contract to pay interest, and the statutory rate of interest at the time the penalty accrued would become part of no contract. If, therefore, a sub- sequent law should change the rate of interest, no vested right would be interfered with, and no contract obligation would be impaired. The same principles apply to all implied contracts. When one makes a valid agreement to pay interest at any stipulated rate, for any time, he is bound to pay it, and no legislative enactment can release him from his obligation. But in all cases where the obligation to pay interest is one merely implied by the law, or is imposed by law, and there is no contract to pay except the ficti- tious one which the law implies, then the rate of interest must at all times be the statutory rate. The rate existing at the time the obligation accrued did not become part of any contract, and hence the law which created the obligation could change or alter it for the future without taking away a vested right or impairing a contract. In the case of all matured contracts which contain no provision for interest after they are past due, as I have before said, interest is allowed, not by virtue of the contract, but as damages for the breach thereof. In such cases what would be the effect of a statute declaring that no interest should be recovered? As to the interest which had accrued as damages before the date of the law, the law could have no effect because that had become a 80 ' FORMATION OF CONTBACT. [Pabt II. vested right of property whicli could not be taken away. But the law could have effect as to the subsequent 'interest, and in stopping that from running would impair no contract. A law could be passed providing that in all cases of unliquidated claims which now draw no interest, interest should thereafter be allowed as damages ; and thus there is ample legislative power in such cases to regulate the future rate of interest without invading any constitutional right. When a man's obligation to pay interest is simply that which the law implies, he discharges that obligation by paying what the law exacts. This judgment, so far as pertains to the question we are now considering, can have no other or greater force than if a valid statute had been enacted requiring the defendant to pay the same sum with interest. Under such a statute, interest would be com- puted, not at the rate in force when the statute was enacted, buu according to the rate in force during the time of default in payment. A different rule would apply if a judgment or statute should require the payment of a given sum with interest at a specified rate. Then interest at the rate specified would form part of the obligation to be discharged. Here, then, the defendant did not in fact contract or promise to pay this judgment, or the interest thereon. The law made it his duty to pay the interest, and implied a promise that he would pay it. That duty is discharged by paying such interest as the law, during the time of default in paying the principal sum, prescribed as the legal rate. If this judgment had been rendered at the date the execution was issued, interest would have been computed upon the original demand at seven per cent to January 1, 1880, and then at the rate of six per cent. Shall the plaintiff have a better position because the judgment was rendered prior to 1880? As no intention can be imputed to the parties in reference to the clause in the judgment requiring payment "with interest," we may inquire what intention the court had. It is plain that it could have had no other intention than that the judgment should draw the statutory interest until payment. It cannot be pre- sumed that the court intended that the interest should be at the rate of seven per cent if the statutory rate should become less. Chap. U. § 1.] FORM: CONTRACTS OF RECORD. 81 That there is no contract obligation to pay the interest upon judgments which is beyond legislative interference is shown by legislation in this country and in England. Laws have been passed providing that all judgments should draw interest, and changing the rate of interest upon judgments, and such laws have been applied to judgments existing at their date, and yet it was never supposed that such laws impaired the obligation of contracts. It is claimed that the provision in section 1 of the act of 1879, which reduced the rate of interest (Chap. 538), saves this judgment from the operation of that act. The provision is that " nothing herein contained shall be so construed as to in any way affect any contract or obligation made before the passage of this act." The answer to this claim is that here there was no contract to pay interest at any given rate. The implied contract, as I have shown, was to pay such interest as the law prescribed, and that contract is not affected or interfered with. The foregoing was written as my opinion in the case of Prouty V. Lake Shore and Michigan Southern Bailway Company. The only difference between that case and this is that there the judg- ment was by its terms payable "with interest." Here the judg- ment contains no direction as to interest. The reasoning of the opinion is applicable to this case and is, therefore, read to justify my vote in this. Since writing the opinion, we have decided, in the case of Sanders v. Lake Shore and Michigan Southern Bailway Company, the law to be as laid down in the first paragraph of the opinion. The orders of the General and Special Terms should be reversed and the motion granted, without costs in either court, the parties having so stipulated. EiTGEK, C. J., and Finch, J., concur with Eabl and Andrews, JJ. ; MiLLEK and Danfoeth, JJ., dissent. Orders reversed and motion granted.^ 1 Accord : Louisiana v. Mayor, 109 U. S. 286. On recognizance, see Smith T. Collins, 42 Eans. 259. 82 FORMATION OF CONTRACT. [Pa»t II. § 2. Contract under seal. ALLER V. ALLEE. 40 NEW JERSEY LAW, 446. — 1878. On rule to. show cause why a new trial should not be granted on verdict for the plaintiff in Hunterdon County Circuit Court. The action was brought on the following instrument, viz. : "One day after date, I promise to pay my daughter, Angelina H. Aller, the sum of three hundred and twelve dollars and sixty-one cents, for value received, with lawful interest from date, without defalcation or discount, as witness my hand and seal this fourth day of September, one thousand eight hundred and seventy-three. $312.61. This note is given in lieu of one-half of the balance due the estate of Mary A. AUer, deceased, for a note given for one thousand dollars to said deceased by me. Peter H. Aller. (L. S.) Witnesses present : John J. Smith, John F. Grandin." ScuDDEE, J. Whether the note for $1000 could have been enforced in equity as evidence of an indebtedness by the husband to the wife during her life, is immaterial, for after her death he was entitled, as husband of his deceased wife, to administer on her estate, and receive any balance due on the note, after deduct- ing legal charges, under the statute of distribution. The daugh- ters could have no legal or equitable claim on this note against their father after their mother's decease. The giving of these two sealed promises in writing to them by their father was therefore a voluntary act on his part. That it was just and meritorious to divide the amount represented by the original note between these only two surviving children of the wife, if it was her sepa- rate property, and keep it from going into the general distribu- tion of the husband's estate among his other children, is evident, and such appears to have been his purpose. The question now is, whether that intention was legally and conclusively manifested, so that it cannot now be resisted. This depends on the legal construction and effect of the instru- ment which was given by the father to his daughter. It has been treated by the counsel of the defendant in his argu- ment, as a promissory note, and the payment was resisted at the trial on the ground that it was a gift. Being a gift inter vivos, and without any legal consideration, it was claimed that the Chap. II. §2.] FORM: OONTEACT UNDER SEAL. 83 action could not be maintained. But the instrument is not a promissory note, having the properties of negotiable paper by the law merchant; nor is it a simple contract, with all the lati- tude of inquiry into the consideration allowable in such a case; but it is in form and legal construction a deed under seal. It says in the body of the writing, "as witness, my hand and seal," and a seal is added to the name of Peter H. Aller. It is not therefore an open promise for the payment of money, which is said to be the primary requisite of a bill or promissory note, but it is closed or sealed, whereby it loses its character as a commer- cial instrument and becomes a specialty governed by the rules affecting common law securities. 1 Daniel's Neg. Inst, §§ 1, 31, 34. It is not at this time necessary to state the distinction between this writing and corporation bonds and other securities which have been held to have the properties of negotiable paper by commercial usage. This is merely an individual promise "to pay my daughter, Angeline H. Aller, the sum of $312.61, for value received," etc. It is not even transferable in form, and there is no intention shown upon its face to make it other than it is clearly expressed to be, a sealed promise to pay money to a certain person or a debt in law under seal. How then will it be affected by the evidence which was offered to show that it was a mere voluntary promise, without legal consideration, or, as it was claimed, a gift unexecuted? Our statute concerning evidence (Bev., p. 380, § 16), which enacts that in any action upon an instrument in writing, under seal, the defendant in such action may plead and set up as a de- fense therein fraud in the consideration, is not applicable, for here there is no fraud shown. But it is said that the act of April 6, 1876 (Bev., p. 387, § 52), opens it to the defense of want of sufficient consideration, as if it were a simple contract, and, that being shown, the con- tract becomes inoperative. The statute reads : " That in every action upon a sealed instru- ment, or where a set-off is founded on a sealed instrument, the seal thereof shall be only presumptive evidence of a sufficient consideration, whjch may be rebutted, as if such instrument was not sealed," etc. 84 FORMATION OF CONTRACT, [Part It Suppose the presumption that the seal carries with it, that there is a sufficient consideration, is rebutted, and overcome by evidence showing there was no such consideration, the question still remains, whether an instrument under seal, without suffi- cient consideration, is not a good promise, and enforceable at law. It is manifest that here the parties intended and under- stood that there should be no consideration. The old man said: "Nowhere, girls, is a nice present for each of you," and so it was received by them. The mischief which the above quoted law was designed to remedy, was that where the parties intended there should be a consideration, they were prevented by the common law from showing none, if the contract was under seal. But it would be going too far to say that the statute was intended to abrogate all voluntary contracts, and to abolish all distinction between specialties and simple contracts. It will not do to hold that every conveyance of land, or of chattels, is void by showing that no sufficient consideration passed when creditors are not affected. Nor can it be shown by authority that an executory contract, entered into intentionally and deliberately, and attested in solemn form by a seal, cannot be enforced. Both by the civil and the common law, persons were guarded against haste and imprudence in entering into vol- untary agreements. The distinction loetvreen "nudum pactum" and "pactum vestitum," hj the civil law, was "in the formality of executioji and not in the fact that in one case there was a con- sideration, and in the other none, though the former term, as adopted in the common law, has the signification of a contract without consideration. The latter was enforced without refer- ence to the consideration, because of the formality of its ratifica- tion. 1 Parsons on Cont. (6th ed.) 427. The opinion of Justice Wilmot in Pillans v. Van Mierop (3 Burr. 1663) is instructive on this point. The early case of Sharington v. Strotton (Plow. 308) gives the same cause for the adoption of the sealing and delivery of a deed. It says, among other thiags : " Because words are oftentimes spoken by men unadvisedly and with- out deliberation, the law has provided that a contract by words shall not bind without consideration. And the reason is, because it is by words Ghap. II. §2.] FORM: CONTRACT UNDER SEAL. 85 which pass from men lightly and inconsiderately ; but where the agree- ment is by deed, there is more time for deliberation, etc. 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 consideration they were made. And therefore in the case put in 17 Ed. IV., if I by deed promise to give you £20 to make your sale de novo, here you shall have an action of debt upon the deed, and the consideration is not examinable, for in the deed there is sufficient consideration, viz., the will of the party that made the deed." It would seem by this old law, that in case of a deed the say- ing might be applied, stat pro ratione voluntas. In Smith on Contracts, the learned author, after stating the strictness of the rules of law, that there must be a consideration to support a simple contract to guard persons against the con- sequences of their own imprudence, says: "The law does not absolutely prohibit them from contracting a gratuitous obliga- tion, for they may, if they will, do so by deed." This subject of the derivation of terms and formalities from the civil law, and of the rule adopted in the common law, is fully described in Fonb. Eq. 335, note a. The author concludes by saying: "If, however, an agreement be evidenced, by bond or other instrument, under seal, it would certainly be seriously mischievous to allow its consideration to be disputed, the com- mon law not having pointed out any other means by which an agreement can be more solemnly authenticated. Every deed, therefore, in itself imports a consideration, though it be only the will of the maker, and therefore shall never be said to be nudum pactum." See also 1 Chitty on Cont. (11th ed.) 6; Mbrley v. Boothby, 3 Bing. 107; Rann v. Hughes, 7 T. E. 350, note a. These statements of the law have been thus particularly given in the words of others, because the significance of writings under seal, and their importance in our common law system, seems in danger of being overlooked in some of our later legislation. If a party has fully and absolutely expressed his intention in a writing sealed and delivered, with the most solemn sanction known to our law, what should prevent its execution where there is no fraud or illegality? But because deeds have been used to cover fraud and illegality in the consideration, and just defenses have been often shut out by the conclusive character of the for- 86 FORMATION OF CONTRACT. [Pabt U. mality of sealing, we have enacted in our State the two recent statutes above quoted. The one allows fraud in the considera- tion of instruments under seal to be set up as defense, the other takes away the conclusive evidence of a sufficient consideration heretofore accorded to a sealed writing, and makes it only pre- sumptive evidence. This does not reach the case of a voluntary agreement, where there was no consideration, and none intended by the parties. The statute establishes a new rule of evidence, by which the consideration of sealed instruments may be shown, but does not take from them the effect of establishing a contract expressing the intention of the parties, made with the most solemn authentication, which is not shown to be fraudulent or illegal. It could not have been in the mind of the legislature to make it impossible for parties to enter into such promises ; and without a clear expression of the legislative will, not only as to the admissibility, but the effect of such evidence, such construc- tion should not be given to this law. Even if it should be held that a consideration is required to uphold a deed, yet it might still be implied where its purpose is not within the mischief which the statute was intended to remedy. It was certainly not the intention of the legislature to abolish all distinction between simple contracts and specialties, for in the last clause of the section they say that all instruments executed with a scroll, or other device by way of scroll, shall be deemed sealed instruments. It is evident that they were to be continued with their former legal effect, except so far as they might be controlled hj evi- dence affecting their intended consideration. If the statute be anything more than a change of the rules of evidence which existed at the time the contract was made, and in effect makes a valuable consideration necessary, where such requisite to its validity did not exist at that time, then the law would be void in this case, because it would impair the obligation of a prior contract. This cannot be done. Cooley on Const. JAm. 288, and notes. The rule for a new trial should be discharged.* > As to what constitutes a seal, see Hacker's Appeal, 121 Pa. St. 192 ; Cromwell v. Tate's Ex'r. 7 Leigh (Va.) 301 ; Solon v. Williamsburgh Sav. JBk., 114 N. y. 122. For effect of seal on gratuitous promise, see McMillan v. Ames, 33 Minn. 257, ante, p. 54. Chap. n. §2.] FORM: CONTRACT UNDER SEAL. 87 BENDEE V. BEEN. 78 IOWA, 283. — 1889. Action upon a promissory note. A demurrer to defendant's answer was overruled, and plaintiff refusing to further plead, and standing on his demurrer, judgment was rendered for defendant. Plaintiff appeals. Beck, J. I. The promissory note in suit was jointly executed by defendant and four others. It called for two hundred and twenty dollars, and, after certain payments were deducted, it is claimed in the petition that one hundred and fifty dollars remained due thereon, for which judgment is asked. The defendant alleged in his answer that a prior indorsee of the note, while holding it, did execute a writing, discharging defendant from all liability thereon, which is in the following words : "Mt. Ayr, Iowa, 5 — 3, 1887. "Received of Chaa. A. Been forty dollars, and same credited _ on note dated March 2, 1882, given for two hundred and twenty dollars, and signed by Calvin Stiles, Wm. A. Been, J. S. Been, C. A. Been and Wm. White, given to G. Bender. The consideration of payment of above forty dollars is that said Chas. A. Been is to be released entirely from the' above-named note. This is done by consent of G. Bender. " (Signed) Day Duotsting, Cashier." It is further alleged in the answer that the note came into the possession of plaintiff long after maturity, who had full knowl- edge of the release pleaded. A demurrer to the answer was overruled, and from that decision plaintiff appeals. II. It is a familiar rule of the law that a payment of a part of a promissory note, or of a debt existing in any different form, in discharge of the whole, will not bar recovery of the balance unpaid. The rule is based upon the principle that there is no consideration for the promise of discharge; the sum paid being in fact due from the payer on the debt, he renders no consideration to the payee for his promise to release the balance of the debt. This doctrine has been recognized in more than one decision of this court. Myers v. Byington, 34 Iowa, 205; Works v. Hershey, 35 Iowa, 340; Bea v. Owens, 37 Iowa, 262; Bryan v. Brazil, 52 Iowa, 350; :Early v. Burt, 68 Iowa, 716. Under this rule the 88 FORMATION OF CONTRACT. [Pakt II. discharge pleaded by defendant is without consideration, and is therefore void. III. But counsel for defendant make an ingenious argument to show that the rule of the common law applicable to sealed instruments, under which they import a consideration in this State, since the abolition of private seals, is transferred to all writings which, like sealed instruments under the common law, import consideration. Without at all approving the position advocated by counsel, but regarding it as more than doubtful, it may be assumed for the purpose of showing that it cannot be applied to the case before us. It is not and cannot be claimed that a sealed instrument imports a valid consideration when it shows, by its own conditions and recitations, that it is in fact not founded upon a consideration. In other words, the presumption of consideration arising from a seal will not overcome the express language and conditions of a sealed instrument, showing that it is without consideration. We think that this proposition need only to be stated to gain assent. It does not demand in its sup- port the citation of authorities. Attention to the release pleaded by defendant, and quoted above, discloses the fact that it shows, by positive and direct recitations, that a payment of a part of the debt was the alleged consideration of the instrument for the release of the balance of the debt. The instrument, therefore, relied upon to show the release establishes the fact that it is entirely without consideration, and cannot therefore be enforced. It is our opinion that the District Court erred in overruling plaintiff's demurrer to defendant's answer. Its judgment is therefore reversed. GORHAM'S ADM'E v. MEACHAM'S ADM'E. 63 VERMONT, 231.— 1891. Bill in chancery for foreclosure of a mortgage. Heard at the September term, 1890, upon pleadings and an agreed statement of facts. Taft, Chancellor, dismissed the bill, pro forma. Ttlek, J. The following facts are reported : Rollin S. Meacham in his lifetime was administrator with the will annexed of the Chap. U. §2.] FOEM: CONTRACT UNDER SEAL. 89 estate of Angeline W. Gorham, and became largely indebted to the estate for moneys that had come into his hands as such administrator. For the purpose of securing the estate for this indebtedness, on March 1, 1889, he made and executed a promis- sory note for $1550, payable to himself as administrator, on demand, and in like manner a mortgage of his home place, condi- tioned for the payment of the note. He never settled the estate nor rendered any account to the Probate Court. He converted the assets into money and appropriated it to his own use in his private business. At the time the note and mortgage were exe- cuted, and at his decease, he was indebted to the estate to the amount of $7000, and was insolvent. His debts, besides what he owed the estate, amounted to about $9000, and his assets to about $4000. The note and mortgage were retained by him and were found after his decease in his safe among other papers that belonged to the estate, and among certain deeds and mortgages of his own. He died November 17, 1889. His wife was the daughter of the testatrix, and is the only person interested in her estate. After Meacham's decease, the defendant, as his administrator, handed the note and mortgage to Burditt, after the latter's appointment as administrator upon the estate of Mrs. Gorjiam, and Burditt caused the mortgage to be recorded in the town clerk's office. The question is as to its validity. 1. The mortgage must be held invalid for want of contracting parties. A contract necessarily implies a concurrence of inten- tion in two parties, one of whom promises something to the other, who on his part accepts such promise. One person cannot by his promise confer a right against himself until the person to whom the promise is made has accepted the same. Until the concurrence of the two minds there is no contract; there is merely an offer which the promisor may at any time retract. Chitty on Cont. 9, quoting Pothier on Obligations. It is essential to the validity of a deed that there be proper parties, a person able to contract and a person able to be contracted with. 3 Wash. Real Prop. 217. To uphold this mortgage we must say that there may be two distinct persons in one, for in law this mortgagor and mortgagee are identical. The addition of the words, " executor of A. W. 90 FOEMATION OF CONTRACT. [Part U. Gorham's estate," does not change the legal effect of the grant, •which is to Meaeham in his individual capacity. In 3 Wash. 279, it is said that a grant to A, B, and C, trustees of a society named, their heirs, etc., is a grant to them individually, and Austin V. Shaw, 10 Allen, 652, Towar v. Hale, 46 Barb. 361, and Brown v. Combs, 29 N. J. L. 36, are cited. In this case the grant and the habendum are not to the estate and its legal representa- tives, but to Meaeham, executor, his heirs and assigns. Meaeham had misappropriated the funds of the estate, and no one but himself assented to his giving a note and mortgage for the pur- pose of partially covering his default. 2. The mortgage was not delivered. An actual manual delivery of a deed or mortgage is not necessary. If it has been so disposed of as to evince clearly the intention of the parties that it should take effect as a conveyance, it is a sufficient delivery. Orr v. Clark, 62 Vt. 136. Whether it has been so disposed of or not depends upon the facts of a given case. In Elmore v. Marks (39 Vt. 538) the orator was indebted to Marks, and for the pur- pose of security made and executed to him a deed of certain land and carried it to the town clerk's office to be filed but not recorded, and to be returned to him when his indebtedness to Marks should be paid. Through inadvertence the deed was recorded and the orator took it into his possession. It was never delivered to Marks and he had no knowledge of it until several months after it was recorded, when the orator told him that it had been recorded by mistake. It was held that there was no delivery. Pierpoint, C. J., said: "All authorities seem to agree that to constitute a delivery the grantor must part with the custody and control of the instrument, permanently, with the intention of having it take effect as a transfer of the title, and must part with his right to the instrument as well as with the possession. So long as he retains the control of the deed he retains the title." Anything which clearly manifests the intention of the grantor and the person to whom it is delivered that the deed should presently become operative and effectual, that the grantor loses all control over it, and that by it the grantee is to become pos- sessed of the estate, constitutes a delivery. Byars v. Spencer, 101 111. 429. Chap. II. §2.] FORM: CONTRACT UNDER SEAL. 91 In Stone y. French (1 Am. St. Eep. 237) it appeared that Francis B. French formed an intention of giving a certain piece of land to his brother unless he should dispose of it during his lifetime; accordingly he wrote a letter to his brother in which he stated that in case of his decease his brother should have the land and do with it as he pleased ; that he, the grantor, would make a deed of it, inclose it in an envelope and direct it to his brother, to be mailed in event of the grantor's death. The grantor afterwards made a deed which contained the usual words, " signed, sealed, and delivered in the presence of," etc. It was in all respects properly executed and was placed in an envelope in the grantor's table drawer with directions indorsed upon the envelope to have the deed recorded, but it was in fact never delivered. It was held that there was no delivery of the deed and that the title to the land did not pass to the grantee ; that the deed being void, the recording of it after the grantor's death gave it no validity. A mere intention to convey a title is not sufficient. The intention and the act of delivery of the deed are both essential. To constitute a complete delivery of a deed the grantor must do some act putting it beyond his power to revoke. 2 Cowen & Hill's Notes to Phillips' Ev. (5th ed.) 660, and authorities collated. In Tounge v. Ghiilbeau (3 Wall. 636) it is said that " the delivery' of a deed is essential to the transfer of a title. It is the final act without which all other formalities are ineffectual. To constitute such delivery the grantor must part with the possession of the deed or the right to retain it." In Fisher v. Hall (41 N. Y. 416) the Court of Appeals said : " A rule of law, by which a voluntary deed executed by the grantor, afterward retained by him during his life in his own exclusive possession and control, never during that time made known to the grantee, and never delivered to any one for him, or declared by the grantor to be intended as a present operative conveyance, could be permitted to take effect as a trans- mission of the title, is so inconsistent with every substantial right of property as to deserve no toleration whatever from any intelli- gent court, either of law ot equity." Without a delivery and acceptance there is no mortgage, but only an attempt at one, or a proposition to make one. 1 Jones on Mofts. sec. 104; Jewett v. Preston, 27 Me. 400; Foster v. Perkins, 42 Me. 168; 3 Wash. Seal Prop. 299. 92 FORMATION OF CONTRACT. [Part IL The fact that the note and mortgage, duly executed by Meacham, were found after his decease among his papers and papers of the estate, shows no delivery of them in any legal sense ; on the contrary, the facts that he omitted to have the mort- gage recorded, that he retained it in his possession and under his control so long a time, and that it ran to him and his heirs and assigns, indicate that he never decided to give it legal effect. He did not make it operative in his lifetime, or direct that it should take effect at his death, -which was necessary to give it a testamentary character. The act of recording it after that event could not give it validity. Decree affirmed, and cause remanded. § 3. Simple contracts required to be in writing: Statute of Frauds. (i.) Requirements of form. BIED V. MUNEOE. 66 MAINE, 337.— 1877. ■ Assumpit. Defense, the statute of frauds. After hearing the evidence, which sufficiently appears in the opinion, the court directed that the action be made law on report to stand for trial if maintainable upon evidence legally admissible, other- wise the plaintiffs to be nonsuit. Peteks, J. On March 2, 1874, at Eockland, in this State, the defendant contracted verbally with the plaiijitiffs for the purchase of a quantity of ice, to be delivered (by immediate shipments) to the defendant in New York. On March 10, 1874, or there- abouts, the defendant, by his want of readiness to receive a por- tion of the ice as he had agreed to, temporarily prevented the plaintiffs from performing the contract on their part according to the preparations made by them for the purpose. On March 24, 1874, the parties, then in New York, put their previous verbal contract into writing, antedating it as an original contract made at Eockland on March 2, 1874. On the same day (March 24), by consent of the defendant, the plaintiffs sold the same ice to Chap. n. §3.] FORM: STATUTE OF FRAUDS. 93 another party, reserving their claim against the defendant for the damages sustained by them by the breach of the contract by the defendant on March 10th or about that time. This action "was commenced on April 11, 1874, counting on the contract as made on March 2, and declaring for damages sustained by the breach of contract on March 10, or thereabouts, and prior to March 24, 1874. Several objections are set up against the plain- tiffs' right to recover. The first objection is, that in some respects the allegations in the writ and the written proof do not concur. But we pass this point, as any imperfection in the writ may, either with or with- out terms, be corrected by amendment hereafter. Then it is claimed for the defendant that, as matter of fact, the parties intended to make a new and original contract as of March 24, by their writing made on that day and antedated March 2, and that it was not their purpose thereby to give ex- pression and efficacy to any unwritten contract made by them before that time. But we think a jury would be well warranted in coming to a different conclusion. Undoubtedly there are cir- cumstances tending to throw some doubt upon the idea that both parties understood that a contract was fully entered into on March 2, 1874, but that doubt is much more than overcome when all the written and oral evidence is considered together. We think the writing made on the 24th March, with the explana- tions as to its origin, is to be considered precisely as if the par- ties on that day had signed a paper dated of that date,, certifying and admitting that they had on the 2d day of March made a verbal contract, and stating in exact written terms just what such verbal contract was. Parol evidence is proper to show the sit- uation of the parties and the circumstances under which the con- tract was made. It explains but does not alter the terms of the contract. The defendant himself invokes it to show that, accord- ing to his view, the paper bears an erroneous date. Such evi- dence merely discloses in this case such facts as are part of the res gestae. Benjamin on Sales, § 213; Stoops v. Smith, 100 Mass. 63, 66, and cases there cited. Then the defendant next contends that, even if the writing signed by the parties was intended by them to operate retro- 94 FORMATION OF CONTKACT. [Pabt H. actively as of the first-named date, as a matter of law, it cannot be permitted to have that effect and meet the requirements of the statute of frauds. The position of the defendant is, that all which took place between the parties before the 24th of March was of the nature of negotiation and proposition only ; and that there was no valid contract, such as is called for by the statute of frauds, before that day; and that the action is not maintaina- ble, because the breach of contract is alleged to have occurred before that time. The plaintiffs, on the other hand, contend that the real contract was made verbally on the 2d of March, and that the written instrument is sufficient proof to make the verbal contract a valid one as of that date (March 2), although the written proof was not made out until twenty-two days after that time. Was the valid contract, therefore, made on March 2d or March the 24th? The point raised is, whether, in view of the statute of frauds, the writing in this case shall be considered as constituting the contract itself, or at any rate any substantial portion of it, or whether it may be regarded as merely the neces- sary legal evidence by means of which the prior unwritten con- tract may be proved. In other words, is the writing the con- tract, or only evidence of it? We incline to the latter view. The peculiar wording of the statute presents a strong argument for such a determination. The section reads : " No contract for the sale of any goods, wares, or merchandise, for thirty dollars or more, shall be valid, unless the purchaser accepts and receives part of the goods, or gives something in earnest to bind the bar- gain, or in part payment thereof, or some note or memorandum thereof is made and signed by the party to be charged thereby, or his agent." In the first place, the statute does not go to all contracts of sale, but only to those where the price is over a cer- tain sum. Then the requirement of the statute is in the alter- native. The contract need not be evidenced by writing at all, provided " the purchaser accepts and receives a part of the goods, or gives somethiug in earnest to bind the bargain or in part pay- ment thereof." If any one of these circumstances will as effect- ually perfect the sale as a writing would, it is not easily seen how the writing can actually constitute the contract, merely because a writing happens to exist. It could not with any correctness Chap. II. §3.] FORM: STATUTE OF FRAUDS. 95 be said, that anything given in earnest to bind a bargain was a substantial part of the bargain itself, or anything more than a particular mode of proof. Then it is not the contract that is required to be in "writing, but only " some note or memorandum thereof." This language supposes that the verbal bargain may be first made, and a memorandum of it given afterwards. It also implies that no set and formal agreement is called for. Chancellor Kent says "the instrument is liberally construed without regard to forms." The briefest possible forms of a bar- gain have been deemed sufficient in many cases. Certain impor- tant elements of a completed contract may be omitted altogether. For instance, in this State, the consideration for the promise is not required to be expressed in writing. GilUghan v. Board- man, 29 Me. 79. Again, it is provided that the note or mem- orandum is sufficient, if signed only by the person sought to be charged. One party may be held thereby and the other not be. There may be a mutuality of contract but not of evidence or of remedy. Still, if the writing is to be regarded in all cases as constituting the contract, in many cases there would be but one contracting party. Another idea gives weight to the argument for the position advocated by the plaintiffs ; and that is, that such a construction of the statute upholds contracts according to the intention of parties thereto, while it, at the same time, fully subserves all the purposes for which the statute was created. It must be borne in mind that verbal bargains for the sale of personal property are good at common law. Nor are they made illegal by the statute. Parties can execute them if they mutually please to do so. The object of the statute is ta prevent perjury and fraud. Of course, perjury and fraud cannot be wholly prevented; but, as said by Bigelow, J. (Marsh v. Hyde, 3 Gray, 331), " a mem- orandum in writing will be as effectual against perjury, although signed subsequently to the making of a verbal contract, as if it had been executed at the moment when the parties consummated their agreement by word of mouth." We think it would be more so. A person would be likely to commit himself in writ- ing with more care and caution after time to take a second thought. The locus penitentice remains to him. 96 FORMATION OF CONTRACT. [Part U. By no means are we to be understood as saying that all written instruments will satisfy the statute, by having the effect to make the contracts described in them valid from their first verbal inception. That must depend upon circumstances. In many, and perhaps most, instances such a version of the transaction would not agree with the actual understanding of the parties. In many cases, undoubtedly, the written instrument is per se the contract of the parties. In many cases, as, for instance, like the antedating of the deed in Egery v. Woodard (56 Maine, 45), cited by the defendant, the contract (by deed) could not take effect before delivery ; the law forbids it. So a will made by parol is absolutely void. But all these classes of cases differ from the case before us. A distinction is attempted to be set up between the meaning to be given to E. S. c. Ill, § 4, where it is provided that no un- written contract for the sale of goods "shall be valid," and that to be given to the several preceding sections where it provided that upon certain other kinds of unwritten contracts " no action shall be maintained;" the position taken being that in the former case the contract is void, and in the other casesi only voidable perhaps, or not enforceable by suit at law. But the distinction is without any essential difference, and is now so regarded by authors generally and in most of the decided cases. All the sections referred to rest upon precisely the same policy. Exactly the same object is aimed at in all. The difference of phraseology in the different sections of the original English statute, of which ours is a substantial copy, may perhaps be accounted for by the fact, as is generally conceded, that the authorship of the statute was the work of different hands. Although our statute (E. S. 1871, § 4) uses the words "no con- tract shall be valid," our previous statutes used the phrase "shall be allowed to be good; " and the change was made when the stat- utes were revised in 1857, without any legislative intent to make any alteration in the sense of the section. E. S. 1841, c. 136, § 4. The two sets of phrases were undoubtedly deemed to be equivalent expressions. The words of the original English sec- tion are, "shall not be allowed to be good," meaning, it. is said, not good for the purpose of sustaining an action thereon without Chap. n. §3.] FORM: STATUTE OF FRAUDS. 97 written proof. Browne, St. Frauds, §§ 115, 136, and notes to the sections; Benjamin's Sales, § 114; Townsend v. Hargraves, 118 Mass. 325, and cases there cited. There are few decisions that bear directly upon the precise point which this case presents to us. From the nature of things, a state of facts involving the question would seldom exist. But we regard the case of Townsend v. Hargraves, above cited, as representing the principle very pointedly. It was there held that the statute of frauds affects the remedy only and not the validity of the contract; and that where there has been a com- pleted oral contract of sale of goods, the acceptance and receipt of part of the goods by the purchaser takes the case out of the statute, although such acceptance and receipt are after the rest of the goods are destroyed by fire while in the hands of the seller or his agent. The date of the agreement rather than the date of the part acceptance was treated as the time when the contract was made ; and the risk of the loss of the goods was cast upon the buyer. Vincent v. Germond (11 Johns. 283) is to the same effect. We are not aware of any case where the question has been directly adjudicated adversely to these cases. Webster v. Zielly (52 Barb. [N. Y.] 482), in the argument of the court, directly admits the same principle. The case of Leather Cloth Co. V. Hieronimus (L. K. 10 Q. B. 140) seems also to be an authority directly in. point. Thompson v. Alger (12 Met. 428, 435) and Marsh v. Hyde (3 Gray, 331), relied on by defendant, do not, in their results, oppose the idea of the above cases, although there may be some expressions in them inconsistent therewith. Altogether another question was before the court in the latter eases. But there are a great many cases where, in construing the statute of frauds, the force and effect of the decisions go to sus- tain the view we take of this question, by the very strongest implication; such as, that the statute does not apply where the contract has been executed on both sides, Bucknam v. Nash, 12 Maine, 474; that no person can take advantage of the statute but the parties to the contract, and their privies. Cowan v. Adams, 10 Maine, 374; that the memorandum may be made by a broker, Hinckley v. Arey, 27 Maine, 362; or by an auctioneer. Cleaves v. 98 FORMATION OF CONTRACT. [Part U. Foss, 4 Maine, 1; that a sale of personal property is valid when there has been a delivery and acceptance of part, although the part be accepted several hours after the sale, Davis v. Moore, 13 Maine, 424; or several days after, Bush v. Holmes, 53 Maine, 417 ; or ever so long after, Browne, St. Frauds, § 337, and cases there noted; that a creditor, receiving payments from his debtor without any direction as to their application, may apply them to a debt on which the statute of frauds does not allow an action to be maintained, Haynes v. Nice, 100 Mass. 327; that a contract made in France, and valid there without a writing, could not be enforced in England without one, upon the ground that the statute related to the mode of procedure and not to the validity of the contract, Leroux v. Brown, 12 C. B. 801; but this case has been questioned somewhat; that a witness may be guilty of perjury who falsely swears to a fact which may not be competent evidence by the statute of frauds, but which becomes material because not objected to by the party against whom it was offered and received, Howard v. Sexton, 4 Comstock, 157 ; that an agent who signs a memorandum need not have his authority at the time the contract is entered into, if his act is orally ratified afterwards, Maclean v. Dunn, 4 Bing. 722; that the identical agreement need not be signed, and that it is sufficient if it is acknowledged by any other instrument duly signed. Gale v. Nixon, 6 Cow. 446; that the recognition of the contract may be contained in a letter, or in several letters, if so connected by "written links" as to form sufficient evidence of the contract; that the letters may be addressed to a third person, Browne, St. Frauds, § 346 ; Fyson v. Eitton, 30 E. L. & Eq. 374; Gibson v. Holland, L. E. 1 C. P. 1; that an agent may write his own name instead of that of his principal if intending to bind his principal by it, Williams v. Bacon, 2 Gray, 387, 393, and citations there ; that a proposal in writing, if accepted by the other party by parol, is a sufficient memorandum, Reuss v. Picksley, L. E. 1 Exc. 342; that where one party is bound by a note or memorandum the other party may be bound if he admits the writing by another writing by him subsequently signed, Ddbell v. Hutchinson, 3 A. & E. 355 ; that the written contract may be rescinded by parol, although many decis- ions are opposed to this proposition, Richardson v. Cooper, 25 Chap. II. §3.] FORM: STATUTE OF FRAUDS. 99 Maine, 450; that equity -will interfere to prevent a party making ■ the statute an instrument of fraud, Byan v. Dox, 34 N". Y. 307; Hassam v. Barrett, 115 Mass. 256, 258; that a contract verbally made may be maintained for certain purposes, notwithstanding the statute ; that a person who pays his money under it cannot recover it back if the other side is willing to perform; and he can recover if performance is refused. Chapman v. Bich, 63 Maine, 588, and cases cited; that a respondent in equity waives the statute as a defense unless set up in plea or answer, Adams v. Patrick, 30 Vt. 516; that it must be specially pleaded in an action at law, Middlesex Co. v. Osgood, 4 Gray, 447; Lawrence v. Chase, 54 Maine, 196 ; that the defendant may waive the protection of the statute and admit verbal evidence and become bound by it, Browne, St. Frauds, § 135. It may be remarked, however, that in most courts a defendant may avail himself of a defense of the statute under the general issue. The different rule in Massachusetts and Maine grew out of the practice act in the one State and in the statute requiring the filing of specifications in the other. It is clear from the foregoing cases, as well as from many more that might be cited, that the statute does not forbid parol eon- tracts, but only precludes the bringing of actions to enforce them. As said in Thornton v. Kempster (5 Taunt. 786, 788), " the statute of frauds throws a difficulty in the way of the evidence." In a case already cited, Jervis, C. J., said : " The effect of the section is not to avoid the contract, but to bar the remedy upon it, unless there be writing." See analogous case of McClellan v. McClellan, 65 Maine, 500. But the defendant contends that this course of reasoning would make a memorandum suf&cient if made after action brought, and that the authorities do not agree to that proposition. There has been some judicial inclination to favor the doctrine to that extent even, and there may be some logic in it. Still the current of decision requires that the writing must exist before action brought. And the reason for the requirement does not militate against the idea that a memorandum is only evidence of the contract. There is no actionable contract before memorandum obtained. The contract cannot be sued until it has been legally 100 FORMATION OF CONTRACT. [PART II. ■ verified by writing; until then there is no cause of action, although there is a contract. The writing is a condition prece- dent to the right to sue. Willes, J., perhaps correctly describes it in Gibson v. Holland, supra, when he says, " the memorandum is in some way to stand in the place of a contract." He adds: " The courts have considered the intention of the legislature to be of a mixed character; to prevent persons from having actions brought against them so long as no written evidence was existing when the action was instituted." Browne, St. Frauds, § 338; Benjamin's Sales, § 159; Fricker v. Thomlinson, 1 Man. & Gr. 772; Bradford v. Spyker, 32 Ala. 134; Bill v. Bament, 9 M. & W. 36 ; Philbrook v. Belknap, 6 Vt. 383. In the last case it is said, "strictly speaking, the statute does not make the contract void, except for the purpose of sustaining an action upon it, to enforce it." Action to stand for trial. Appleton, C. J., Walton, Danforth, Virgin, and Libbbt, JJ., concurred.^ O'DONNELL v. LEEMAK 43 MAINE, 158. — 1857. Mat, J. The declaration in this case alleges a contract in writing, of a sale from the defendant to the plaintiff, of a 1 That the statute affects only executory contracts, see Finch, J., in Brown V. Farmers' Loan & Trust Co., 117 N. Y. 266, 273 (1889) : " It is insisted, however, that the sale cannot stand because the contract was void under the statute of frauds. But that statute afiects only executory and not executed contracts (Dodge v. Crandall, 30 N. Y. 304). It is the rule of evidence where the one party or the other is seeking performance or damages for non-performance. It has no office to perform when the contract has been executed on both sides, has been fully carried out by the parties, and requires no aid from the law." As to whether the statute must be pleaded, the same judge in Wells v. Monihan, 129 N. Y. 161, 164 (1891), says: "So far as the defense in this case rests upon the statute of frauds, it must fail for two reasons. No such defense has been pleaded, and it is not raised by the averments of the com- plaint, and without one or the other of these conditions, the defense, if existing, cannot be made available. ..." See also on this point, Crane v. Powell, 139 N. T. 379 (1893); Hamer v. Sidway, 124 N. Y. 638, post, p. 143, 147. See also Hunt v. Jones, 12 R. I. 265. Chap. II. §3.] FOEM: STATUTE OF FRAUDS. 101 dwelling-house at auction, upon certain specified terms and conditions. According to the contract alleged, the price to be paid was twelve hundred dollars; one-third cash down, and the residue in equal payments, in one and two years. The mem- orandum of sale, as contained in the auctioneer's book, is as follows : "Oct. 9, 1855. This day sold W. H. Leeman house and land on Bartlett street, in Lewiston ; was struck down to Patrick O'DonneU for $1200, one-third cash down. "Ham Brooks, Auctioneer." That the auctioneer in cases of such sales, whether of real or personal estate, is the agent of both parties, and that a memoran- dum signed by him at the time of the sale, stating the pariiculars of the contract, and the parties thereto, is a sufficient signing within the statute of frauds, is well settled. Emmerson v. Heelis, 2 Taunt. 46; McComb v. Wright, 4 John. Ch. E. 666; Chitiy on Contracts, 305; Cleaves v. Foss, 4 Maine, E. 1; Alna v. Plum- mer, 4 Id. 258. It is equally well settled that unless there be a memorandum showing, within itself, or by reference to some other paper, all the material conditions of the contract, no action can be main- tained upon such contract, either at law or in equity. Sales at auction are now held to fall within the statute; as much so as other sales. Pike r. Balch et al., 38 Maine E. 302; Merritt v. Clason, 12 Johns. E. 102; Bailey et al. v. Ogden, 3 Johns. E. 399; Morton v. Dean, 13 Met. E. 385. And it cannot well be doubted that evasions of this statute, made as it was for the suppression of perjury, ought not to be encouraged. The memorandum in this case contains no reference to the condition of the payment, except in the words, " one-third cash down." It does not appear from it when the residue was intended to be paid. It was attempted at the trial to show the terms of the payment to be as alleged in the writ, by the introduction 'of certain handbills and newspaper notices, signed by the defendant, and published by him just before the sale, and which, it is said in argument, were exhibited at the time of the sale, and in which the terms of the sale, it is said, were fully stated. The evidence offered by the plaintiff to connect the handbills and notices with 102 FORMATION OF CONTRACT. [Fabt U. the memorandum, and to explain it, was excluded by tlie presid- ing judge. That such extrinsic evidence was inadmissible the following authorities clearly show: 2 Parsons on Contracts, p. 298; Hinde v. Whitehouse, 7 East, 658; The First Baptist Church in Ithaca v. Bigelow, 16 Wend. 28 ; The Inhab. of the First Parish in Freeport T. Bartol, 3 Maine E. 340. It is said, however, that if such evidence is not admissible, then the contract, upon its face, as stated in the memorandum, stipulates for the payment of one-third cash down, and the residue in a reasonable time; and that, if so, the notes tendered in this case, having been made payable in one and two years, should be deemed, a compliance with the terms of the contract in this respect. Considering the nature and value of the estate to be conveyed, and that long credit is often if not usually given in such sales, perhaps a somewhat extended time of payment might be regarded as reasonable; but we know of no rule by which money that is made payable in a reasonable time, can, at the election of the party paying, be divided so as to make it payable at different times, and in different years. A reasonable time is indivisible ; and the party to whom the money is payable, under such a contract, cannot be required to take it in separate pay- ments, and at separate times. The auctioneer's memorandum in this case failing to show any such contract as is alleged, so far as relates to the terms of pay- ment, it becomes unnecessary to decide upon its sufficiency in other respects, or upon the admissibility of the other evidence offered. According to the agreement of the parties, the nonsuit must stand. CLASON V. BAILEY. 14 JOHNSON (N. Y.), 484.— 1817. These causes came before this court on writs of error to the Supreme Court. The facts in all were, substantially, the same. See Merritt & Merritt v. Clason, 12 Johns. Eep. 102. The Chancelloe. The case struck me upon the argument as Chap. n. §3.] FORM; STATUTE OF FRAUDS. 103 being very plain. But as it may have appeared to other mem- bers of the court in a different, or, at least, in a more serious light, I will very briefly state the reasons why I am of opinion that the judgment of the Supreme Court ought to be affirmed. The contract on which the controversy arises was made in the following manner : Isaac Clason employed John Townsend to purchase a quan- tity of rye for him. He, in pursuance of this authority, pur- chased of Bailey & Voorhees 3000 bushels, at one dollar per bushel, and at the time of closing the bargain, he wrote a mem- orandum in his memorandum book in the presence of Bailey & Voorhees, in these words : " February 29th, bought for Isaac Clason, .of Bailey & Voorhees, 3000 bushels of good merchant- able rye, deliverable from the 5th to the 15th of April next, at one dollar per bushel, and payable on delivery." The terms of the sale and purchase had been previously com- municated to Clason, and approved of by him, and yet at the time of delivery he refused to accept and pay for the rye. The objection to the contract, on the part of Clason, is that it was not a valid contract within the statute of frauds. 1. Because the contract was not signed by Bailey & Voorhees. 2. Because it was written with a lead pencil, instead of pen and ink. I will examine each of these objections. 1. It is admitted that Clason signed this contract, by the inser- tion of his name by his authorized agent, in the body of the memorandum. The counsel for the plaintiff in error do not con- tend against the position that this was a sufficient subscription on Ms part. It is a point settled, that if the name of a party appears in the memorandum, and is applicable to the whole substance of the writing, and is put there by him or by his authority, it is immaterial in what part of the instrument the name appears, whether at the top, in the middle, or at the bot- tom. Saunderson v. Jackson, 2 B. & Puller, 238; Welford v. Beazely, "3 Atk. 503 ; Stokes v. Moore, cited by Mc Coxe in a note to 1 P. Wms. 771. Forms are not regarded, and the statute is satisfied if the terms of the contract are in writing, and the names of the contracting parties appear. Clason's name was in- 104 FORMATION OF CONTRACT. [Part U. serted in tlie contract by his authorized agent, and if it were admitted that the name of the other party was not there by their direction, yet the better opinion is, that Clason, the party ■who is sought to be charged, is estopped, by his name, from say- ing that the contract was not duly signed within the purview of the statute of frauds ; and that it is sufficient, if the agree- ment be signed by the party to be chai'ged. It appears to me, that this is the result of the weight of au- thority both in the courts of law and equity. In Ballard y. Walker (3 Johns. Cases, 60), decided in the Su- preme Court, in 1802, it was held, that a contract to sell land, signed by the vendor only, and accepted by the other party, was binding on the vendor, who was the party there sought to be charged. So in Roget v. Merrit (2 Caines, 117) an agreement concerning goods signed by the seller, and accepted by the buyer, was con- sidered a valid agreement, and binding on the party who signed it. These were decisions here, under both branches of the statute, and the cases in the English courts are to the same effect. In Saimderson v. Jackson (2 Bos. & Pull. 238) the suit was against the seller, for not delivering goods according to a mem- orandum signed by him only, and judgment was given for the plaintiff, notwithstanding the objection that this was not a suf- ficient note within the statute. . In Champion v. Plummer (4 Bos. & Pull. 252) the suit was against the seller, who alone had signed the agreement. No objection was made that it was not signed by both parties, but the memorandum was held defective, because the name of the buyer was not mentioned at all, and con- sequently there was no certainty in the writing. Again, in Eger- ton V. Mathews (6 East, 307) the suit was on a memorandum for the purchase of goods, signed only by the defendant, who was the buyer, and it was held a good agreement within the statute. Lastly, in Alien v. Bennet (3 Taunton, 169) the seller was sued for the non-delivery of goods, in pursuance of an agreement signed by him only, and judgment was rendered for the plaintiff. In that case Ch. J. Mansfield made the observation, that " the cases of Egerton v. Mathews, Saunderson v. Jackson, and Champion v. Plummer, suppose the signature of the seller to be sufficient ; and every one knows it is the daily practice of the Court of Chancery Chap. n. §3.] FORM: STATUTE OF FRAUDS. 105 to establish contracts signed by one person only, and yet a court of equity can no more dispense -with the statute of frauds than a court of la-w can." So Lawrence, J., observed, that " the statute clearly supposes the probability of there being a signature by one person only." If we pass from the decisions at the law to the courts of equity, we meet with the same uniform construction. Indeed, Lord Eldon has said (18 Vesey, 183) that chancery professes to follow courts of laws in th'e construction of the statute of frauds. In Hatton v. Gray (2 Chan. Cas. 164 ; 1 Eq. Cas. Abr. 21, pi. 10) the purchaser of the land signed the agreement, and not the other party, and yet the agreement was held by Lord Keeper North io be binding on him, and this too on a bill for a specific perform- ance. So in Coleman v. Upcot (5 Viner, 527, pi. 17) the Lord Keeper Wright held, that an agreement concerning lands was within the statute, if signed by the party to be charged, and that there was no need of its being signed by both parties, as the plain- tiff, by his bill for a specific performance, had submitted to perform what was required on his part to be performed. Lord Hardwicke repeatedly adopted the same language. In Buckhouse v. Crosby (2 Eq. Cas. Abr. 32, pi. 44) he said he had often known the objection taken, that a mutual contract in writing signed by both parties ought to appear, but that the ob- jection had as often been overruled ; and in Welford v. Beazely (3 Atk. 603) he said there were cases where writing a letter, setting forth the terms of an agreement, was held a signing within the statute ; and in Owen v. Davies (1 Ves. 82) an agreement to sell land, signed by the defendant only, was held binding. The modern cases are equally explicit. In Cotton v. Lee, before the lords commissioners, in 1770, which is cited in 2 Bro. 664, it was deemed sufiBcient that the party to be charged had signed the agreement. So in Seton v. Slade (7 Vesey, 276) Lord Eldon, on a bill for a specific performance against the buyer of land, said that the agreement being signed by the defendant only, made him with- in the statute, a party to be charged. The case of Foiole v. Freeman (9 Vesey, 351) was an express decision of the master of the rolls, on the very point that an agreement to sell lands, signed by the vendor only, was binding. 106 FORMATION OF CONTRACT. [Part II. There is nothing to disturb this strong and united current of authority but the observations of Lord Ch. Eedesdale, in Lawren- son Y. Butler (1 Sch. & Lef. 13), who thought that the contract ought to be mutual to be binding, and that if one party could not enforce it, the other ought not. To decree performance, when one party only was bound, would " make the statute really a statute of frauds, for it would enable any person who had procured another to sign an agreement, to make it depend on his own will and pleasure whether it should be an agreement or not." The intrinsic force of this argument, the boldness with which it was applied, and the commanding weight of the very respectable character who used it, caused the courts for a time to pause. Lord Eldon, in 11 Vesey, 592, out of respect to this opinion, waived, in that case, the discussion of the point ; but the courts have, on further consideration, resumed their former track. In Western v. Russell (3 Vesey & Beames, 192) the master of the rolls declared he was hardly at liberty, notwithstanding the consider- able doubt thrown upon the point by Lord Eedesdale, to refuse a special performance of a contract to sell land, upon the ground that there was no agreement signed by the party seeking a per- formance ; and in Ormond v. Anderson (2 Ball & Beatty, 370) the present lord chancellor of Ireland (and whose authority, if we may judge from the ability of his decisions, is not far short of that of his predecessor ) has not felt himself authorized to follow the opinion of Lord Eedesdale. " I am well aware," he observes, " that a doubt has been entertained by a judge of this court, of very high authority, whether courts of equity would specifically execute an agreement where one party only was bound ; but there exists no provision in the statute of frauds to prevent the execu- tion of such an agreement." He then cites with approbation what was said by Sir J. Mansfield in Allen v. Bennet. I have thought, and have often intimated, that the weight of argument was in favor of the construction that the agreement concerning lands, to be enforced in equity, should be mutually binding, and that the one party ought not to be at liberty to enforce at his pleasure an agreement which the other was not entitled to claim. It appears to be settled (Hawkins v. Holmes, 1 P. Wms. 770) that though the plaintiff has signed the agree- Chap. II. §3.] , FOEM: STATUTE OF FRAUDS. 107 ment, he never can enforce it against the party who has not signed it. The remedy, therefore, in such case is not mutual. But, not- withstanding this objection, it appears from the review of the cases that the point is too well settled to be now questioned. There is a slight variation in the statute respecting agree- ments concerning the sale of lands, and agreements concerning the sale of chattels, inasmuch as the one section (being the 4th section of the English, and the 11th section of our statute) speaks of the party, and the other section (being the 17th of English, and the 15th of ours) speaks of the parties to be charged. But I do not find from the cases that this variation has produced any difference in the decisions. The construc- tion, as to the point under consideration, has been uniformly the same in both cases. Clason, who signed the agreeinent, and is the party sought to be charged, is, then, according to the authorities, bound by the agreement, and he cannot set up the statute in bar. But I do not deem it absolutely necessary to place the cause on this ground, though, as the question was raised and discussed, I thought it would be useful to advert to the most material cases , and to trace the doctrine through the course of authority. In my opinion, the objection itself is not well founded in point of fact. The names of Bailey & Voorhees are as much in the memo- randum as that of Clason. The words are, "Bought for Isaac Clason, of Bailey & Voorhees, 3000 bushels," etc. ; and how came their names to be inserted ? Most undoubtedly they were in- serted by their direction and consent, and so it appears by the special verdict. The jury find, that when the bargain was closed, Townsend, the agent of Clason, did at the time, and in their presence, write the memorandum ; and if so, were not their names inserted by their consent ? Was not Townsend their agent for that purpose ? If they had not assented to the memo- randum, they should have spoken. But they did assent, for the memorandum was made to reduce the bargain to writing in their presence at the time it was closed. It was, therefore, as much their memorandum as if they had written it themselves. Town- send was, so far, the acknowledged agent of both parties. The auctioneer who takes down the name of a buyer, when h6 bids. 108 FORMATION OF CONTRACT. [PJlBT U. is, quoad hoc, his agent. Emmerson y. Heelis, 2 Taunt. 38. The contract was, then, in judgment of law reduced to writing, and signed by both parties ; and it appears to me to be as unjust as it is illegal, for Clason or his representatives to get rid of so fair a bargain on so groundless a pretext. 2. The remaining objection is that the memorandum was made with a lead pencil. The statute requires a writing. It does not undertake to define with what instrument, or with what material, the contract shall be written. It only requires it to be in writing, and signed, etc. ; the verdict here finds that the memorandum was written, but it proceeds further, and tells us with what instrument it was written, viz., with a lead pencil. But what have we to do with the kind of instrument which the parties employed when we find all that the statute required, viz., a memorandum of the contract in writing, together with the names of the parties ? To write is to express our ideas by letters visible to the eye. The mode or manner of impressing those letters is no part of the substance or definition of writing. A pencil is an instrument with which we write without ink. The ancients understood alphabetic writing as well as we do, but it is certain that the use of paper, pen, and ink was, for a long time, unknown to them. In the days of Job they wrote upon lead with an iron pen. The ancients used to write upon hard substances, as stones, metals, ivory, wood, etc., with a style or iron instrument. The next improvement was writing upon waxed tables ; until at last paper and parchment were adopted, when the use of the calamus or leed was introduced. The common law has gone so far to regu- late writings, as to make it necessary that a deed should be written on paper or parchment, and not on wood or stone. This was for the sake of durability and safety; and this is all the regulation that the law has prescribed. The instrument or the material by which letters were to be impressed on paper or parchment has never yet been defined. This has been left to be governed by public convenience and usage ; and as far as questions have arisen on this subject, the courts have, with great latitude and liberality, left the parties to their own discretion. It has aiscordingly been admitted (2 Bl. Com. 297 ; 2 Bos. & Pull Chap. n. § 3.] FORM : STATUTE OF FRAUDS. 109 238 ; 3 Esp. Rep. 180) that printing was writing within the stat- ute, and (2 Bro. 585) that stamping was equivalent to signing, and (8 Vesey, 175) that making a mark was subscribing within the act. I do not find any case in the courts of common law in which the very point now before us has been decided, viz., whether writing with a lead pencil was sufficient ; but there are several cases in which such writings were produced, and no objec- tion taken. The courts have impliedly admitted that writing with such an instrument, without the use of any liquid, was valid. Thus in a case in Comyn's Reports (p. 451) the counsel cited the case of Loveday v. Claridge, in 1730, where Loveday, intending to make his will, pulled a paper out of his pocket, wrote some things down with ink, and some with a pencil, and it was held a good will. But we have a more full and authentic authority in a late case decided at doctors' commons (Byrnes v. Glarkson, 1 Phillim. Eep. 22.), where the very question arose on the validity of a codicil written with a pencil. It was a point over which the prerogative court had complete jurisdiction, and one objection taken to the codicil was the material with which it was written ; but it was contended, on the other side, that a man might write his will with any material he pleased, quocunque modo velit, quocunque modo possit, and it was ruled by Sir John Nicholl, that a will or codicil written in pencil was valid in law. The statute of frauds, in respect to such contracts as the one before us, did not require any formal and solemn instrument. It only required a note or memorandum, which imports an informal writing done on the spot, in the moment and hurry and tumult of commercial business. A lead pencil is generally the most accessible and convenient instrument of writing on such occa- sions, and I see no good reason why we should wish to put an interdict on aU memoranda written with a pencil. I am persuaded it would be attended with much inconvenience, and afford more opportunities and temptation to parties to break faith with each other, than by allowing the writing with a pencil to stand. It is no doubt very much in use. The courts have frequently seen such papers before them, and have always assumed them to be valid. This is a sanction not to be disregarded. I am, accordingly, of opinion that the judgment of the Supreme Court ousht to be affirmed. 110 FORMATION OF CONTRACT. [Part II. This was the opinion of the court. (Elmendorf & Livingston, senators, dissenting.) It was thereupon ordered, adjudged, and decreed, that the judgment of the Supreme Court be, in all things, affirmed, and that the defendant recover from the plaintiffs their double costs, to be taxed, and that the record be remitted, etc. Judgment affirmed.' (w.) Provisions of fourth section. a. Special promise by an executor or administrator to answer damages out of his own estate. BELLOWS V. SOWLES. 67 VERMONT, 164.-1884. Assumpsit. Heard on demurrer to the declaration. The dec. laration alleged that plaintiff, a relative and heir at law of defendant's testator, being left out of the will of the testator, had employed counsel, etc., to contest the will, and that defendant, being executor and himself a legatee, and the husband of the principal legatee, had also employed counsel to defend the will, and that the parties met and agreed that if plaintiff would for- bear to contest the will, defendant would pay the plaintiff the sum of five thousand dollars, and that although plaintiff did for- bear and the will was duly probated, defendant failed and refused to pay the amount agreed on. Powers, J. Counsel for the defendant have demurred to the declaration in this case upon two grounds; first, that the con- sideration alleged is insufficient ; secondly, that the promise not being in writing comes within, and is therefore not enforceable under, the statute of frauds. It has been so often held that forbearance of a legal right affords a sufficient consideration upon which to found a valid contract, and that the consideration required by the statute of frauds does not differ from that required by the common law, it does not appear to us to be necessary to review the authorities 1 Contra : Wilkinson v. Seavenrich, 58 Mich. 574. Chap. II. §3.] FORM: STATUTE OF FRAUDS. Ill or discuss the principle. As to tbe second point urged in behalf of the defendant, this case presents greater difficulties. Although the statute of frauds was enacted two centuries ago, and even then was little more than a re-enactment of the pre-existing com- mon law, and though cases have continually arisen under it, both in England and America, yet so confusing and at times inconsistent are the decisions, that its consideration is always attended with difficulty and embarrassment. The best understanding of the statute is derived from the language itself, viewed in the light of the authorities which seem to us to interpret its meaning as best to attain its object. That clause of the statute under which this case falls, reads : " No action at law or in equity shall be brought . . . upon a special promise of an executor or administrator to answer damages out of his own estate." This special promise referred to is, in short, any actual promise made by an executor or administrator, in distinction from promises implied by law, which are held not within the statute. The promise must be " to answer damages out of his own estate." This phraseology clearly implies an obligation, duty, or liability on the part of the testator's estate, for which the executor promises to pay damages out of his own estate. The statute, then, was enacted to prevent executors or administrators from being fraud- ulently held for the debts or liabilities of the estates upon which they were called to administer. In this view of the case, this clause of the statute is closely allied, if not identical in principle, with the following clause, namely: "No action, etc., upon a special promise to answer for the debt, default, or misdoings of another." And so Judge Eoyce, in delivering the opinion of the court in Harrington v. Rich (6 Vt. 666), declares these two classes of undertakings to be " very nearly allied," and considers them together. This seems to us to be the true idea of this clause of the statute : — that the undertaking contemplated by it, like that contemplated by the next clause, is in the nature of a guaranty ; and that reasoning applicable to the latter is equally applicable to the former. We believe this view to be well supported by the authorities. Browne, in his work on the Statute of Erauds, p. 150, says : "In 112 FOEMATIOJf OF CONTRACT. [Pakt II. the fourth section of the Statute of Frauds, special promises of executors and administrators to answer damages out of their own estates appear to be spoken of as one class of that large body of con- tracts known as guaranties." And so on page 184, he interprets " to answer damages " as equivalent to to pay debts of the decedent. This seems to be the construction given to the statute by Chief Justice Kedfield, in his work on Wills. Vol. 2, p. 290, et seq. The Revised Statutes of New York, Vol. 2, p. 113, have im- proved upon the phraseology of the old statute as we have adopted it, by adding or to pay the debts of the testator or intestate out of his own estate. If we are correct in this view of the relation between these two clauses, the solution of the question presented by this case is com- paratively easy. It has been held in this State, that when the contract is founded upon a new and distinct consideration moving between the parties, the undertaking is original and independent, and not within the statute. Templeton v. Bascom, 33 Vt. 132 ; Gross v. Richardson, 30 Vt. 641 ; Lampson v. Hobart, 28 Vt. 697. Whether or not it would be safe to announce this as a general rule of universal application, it is a principle of law well fortified by authority, that where the principal or immediate object of the promisor is not to pay the debt of another, but to subserve some purpose of his own, the promise is original and independent, and not within the statute. Brandt Sur. 72; 3 Par. Cont. 24; Bob. Fr. 232; Emerson v. Slater, 22 How. 28. And this seems to be the real ground of the decisions above cited in the 28th and 30th Vt., in which the court seems to blend the two rules just laid down. Pierpoint, J., in delivering the opinion of the court in Cross V. Richardson, supra, says : " The consideration must be not only sufilcient to support the promise, but of such a nature as to take the promise out of the statute ; and that requisite, we think, is to be found in the fact that it operates to the advantage of the promisor, and places him under a pecuniary obligation to the promisee, entirely independent of the original debt." Apply this rule to this case. Here the main purpose of this promise was, not to answer damages (for the testator) out of his own estate, but was entirely to subserve some purpose of the Chap. U. §3.] FORM: STATUTE OF FRAUDS. 113 defendant. The consideration did not affect th.e estate, but was a matter purely personal to the defendant. Here there was no liability or obligation on the part of the estate to be answered for in damages. It could make no difference to the execvior of that estate whether it was to be divided according to the will, or by the law of descent. If the subject matter of this contract had been something entirely foreign to this estate, no one would maintain that the defendant was not bound by it, because he happened to be named executor in this will. Here the subject matter of the contract was connected with the estate, but in such a way that it was practically immaterial to the estate which way the question was decided. There exists, therefore, in this case, no siifficient, actual, primary liability to which this promise could be collateral. This seems to us to be the fairest interpretation of the law. The statute was passed for the benefit of executors and administrators ; but it- might be said of it, as has been said of the protection afforded to an infant by the law of contracts, that " it is a shield to protect, not a sword to destroy." If this class of contracts was allowed to be avoided under it, instead of being a prevention of frauds, it would become a powerful instru- ment for fraud. As in this case the plaintiff would be deprived of his legal right to contest the will, by a party who has reaped all the benefits of the transaction, and is shielded from responsi- bility by a technicality. We do not believe this was the result contemplated by the statute. The judgment of the County Court overruling the demurrer and adjudging the declaration sufficient is affirmed, and case remanded with leave to the defendant to replead on the usual terms. 6. Any promise to answer for the debt, default, or miscarriage of another. MAY V. WILLIAMS. 61 MISSISSIPPI, 126. — 1883. CooPEE, J. It was not an error for the court below to permit an amendment to be made of the affidavit on which the writ of t I 114 FORMATION OF CONTRACT. [Part II. seizure was issued. Louisa Williams and her infant sisters were jointly interested under the contract with Mrs. May in the fruits of their labor. In the original afiB.davit Louisa Williams had demanded in her own name the interest of all the laborers in the crop, and the amendment was necessary to bring before the court all the joint-owners of the claim propounded. A suit to enforce a laborer's lien is, under the Code of 1880, c. 52, a proceeding partly in rem and partly in personam. A general judgment is rendered in personam for the amount found due, and the property seized is condemned to be sold for its satisfaction. It is the amount demanded and not the value of the property seized which determines the jurisdiction of the court. Code 1880, § 1365. In suits of this character the question of cost is left to the discretion of the presiding judge, and costs should be awarded in each case against the party by whom, in view of all the circumstances, it is equitable they should be borne. Code 1880, § 1369. On the trial the defendant proposed to prove T;hat in the spring of the year in which the crop sued for was planted, the husband of the plaintiff, Louisa Williams, was incarcerated in the jail of Noxubee County on the charge of grand larceny, and that Louisa Williams applied to her, the defendant, to become surety on his bail-bond, and verbally agreed that if the defendant would become so bound, the interest in the crop to be raised which belonged to Louisa and to her infant sisters should remain in the hands of the defendant to indemnify her against the default of the husband ; that in consideration of such agreement the defendant became surety as requested ; that Williams, the accused, had absconded, and that a judgment nisi had been rendered against the defendant for the sum of two hundred dollars upon the forfeited bond. Upon the objection of the plaintiffs the evidence was excluded by the court as being a parol promise to answer for the " debt or default or miscarriage of another," and, therefore, unenforceable under the statute of frauds. There is great conflict of authority upon the question whether a parol promise to indemnify one who becomes surety for another at the request of the promisor is within that clause of the statute of frauds which declares that "no action shall be brought whereby to charge the defendant upon any special promise to answer for Chap. U. § 3.] FORM: STATUTE OF FRAUDS. 115 the debt or default or miscarriage of another person, unless the promise or 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 by him or her thereunto lawfully authorized." In England the courts have vacillated upon the question, and the courts of this country have, to a considerable extent, taken position with that view which at the time of the several decisions prevailed in Eng- land. In Thomas v. Cook (8 B. & C. 728) a promise to indemnify was held not to be within the statute. In Ch-een v. Oresstoell (10 Ad. & E. 463) the contrary view was announced. In Gripps v. Hartnoll (4 B. & S. 4J.4) the distinction was drawn between those cases in which the promisee was surety upon a bond by which the principal was bound to answer a criminal charge and those in which the bond was given in a civil cause, the court saying that there was no implied contract on the part of a principal who was bound over to answer a criminal charge to indemnify his surety, and, therefore, that the promise of the promisee did not come in aid of that of another person, for which reason it was decided that the promise in that case was not obnoxious to the statute. In Wildes v. Dudlow (L. B.. 19 Eq. 198) Vice-Chancellor Malins treated the case of Oreen v. Oresswell as virtually overruled by Cripps V. Hartnoll, and in Reader v. Kingham (13 0. B. N. S. 344) it was held that a promise, to be within the statute, must be made to the promisee to pay a debt due by another to him. It may therefore be considered that in England Oreen v. CressweR has been overruled, and the doctrine of Thomas v. Cook re- established. In this country the States of Massachusetts, Maine, New Hampshire, Georgia, Kentucky, Iowa, Indiana, Minnesota, Wis- consin, Vermont, and Connecticut have followed the authority of Thomas v. Cook, while South Carolina, North Carolina, Missouri, Alabama, and Ohio have adhered to the rule announced in Green V. Cresswdl. See authorities cited in Browne on the Statute of Frauds, §§ 161-161 c ; Anderson v. Spence, 72 Ind. 315. In this conflict of American authority, produced in no inconsiderable degree by the inconstancy of the English courts, the weight in numbers is in favor of the rule that such promises are not witiiin 116 FORMATION OF CONTRACT. [Paet U. the statute ; but an examination of the cases holding this view discloses equally as great conflict among themselves as to the principle upon which the decisions are rested. In Oripps v. Hartnoll a promise to indemnify was held not to be within the statute, because the bond was given in a criminal proceeding, and in such cases, it, was said, there is no contract on the part of the person bailed to indemnify the surety. In Holmes v. Knights (10 N. H. 175) it was suggested that the principal would not be bound to indemnify- the surety unless he had requested him to become bound; but, passing this question by, the decision was put upon the ground that the obligation of the principal, if it existed at all, was an implied one, and its existence would not prevent the surety from proceeding against the parol promisor, who was bound by express agreement, the court saying that if either was to be deemed collateral, the liability of the principal, in such a case, would seem to be collateral to that of the defend- ant. In Reader v. Kinglmm (13 C. B. IST. S. 344), Wildes v. Dud- low (L. R. 19 Eq. 198), Aldrich v. Ames (9 Gray 76), and Ander- son V. Spence (72 Ind. 315), and many other cases, the promise is held not to be within the statute, because it is said not to be made to the creditor, but to one who is debtor, while in Dunn v. West (5 B. Mon. 376) and Lucas v. Chamberlain (8 B. Mon. 276) the promise was held to be enforceable, because the implied obli- gation of the principal to indemnify his surety is said to arise from a subsequent fact, to wit, the payment of the debt by the surety. Upon some one or the other of these principles the cases holding this view which are most approved by the text-writers are based, though there are others in which other reasons are given, as in Read v. Nash, 1 Wils. 305 ; D' Wolf v. Rdbaud, 1 Peters, 476 ; Emerson v. Slater, 22 How. U. S. 28. Notwithstanding the number of cases in which these views are announced, we are satisfied, upon an examination of the subject, to take our stand with those courts which hold such promises to be within the statute and unenforceable, unless evidenced by writing. We do not assent to the proposition that a principal in a bail- bond is not under an implied contract to indemnify his surety. He knows that the law requires some one to be bound for his appearance as a condition to his discharge from custody ; he Chap. II. § 3.] FORM: STATUTE OF FRAUDS. 117 executes the instrument by which the surety is bound, and by the bond he becomes bound as principal to that surety. By execut- ing the bond and accepting the benefits which flow from, he assumes the duties and obligations which spring out of, his engagement, whether due to the State or to his surety. Why should a different rule be applied where one is bound to appear to answer a criminal charge than would be applicable if the thing to be done was the performance of physical labor, the proper administration of an estate, or the doing of any other act by the principal ? Where the engagement is made with the knowledge and consent of the principal debtor, there is in point of law an implied request from the latter to the surety to inter- vene in the principal's behalf if the latter makes default, and money paid by the surety for the purpose of discharging the claim against the principal is money paid for the use of the prin- cipal at his request, which may be recovered from the latter. Exall V. Partridge, 8 T. E. 308. It cannot be said that the promise to indemnify the surety is made to him as debtor and not as creditor. It is true that both the principal and surety are bound to the fourth person, the State ; but the contract of the promisor is not to discharge that obligation. He assumes no duty or debt to the State, nor does he agree with the promisee to pay to the State the debt which may become due to it if default shall be made by the prindpal in the bond. It is only when the promisee has changed his relationship of debtor to the State and assumed that of creditor to his principal by paying to the State the penalty for which both he and his principal were bound that a right arises to go against the guarantor on his contract. It is to one who is under a conditional and contingent liability that the promise is made ; but it is to him as creditor, and not as debtor, that a right of action arises on it. Nor do we think it sufficient to take the case from the operation of the statute that the liability of the prin- cipal arises by implication rather than by express contract. The statute makes no distinction between a debt due on an implied and one due by express contract. It is the existence of the debt against the principal, and not the manner in which it originates, that makes voidable a parol promise by another to 118 FORMATION OF CONTRACT. [Part II. become responsible for its payment. Nor are we able to per- ceive that the contract of the promisee is anterior to that of the principal in the bond. Until the surety assumes responsibility by executing the bond, the agreement of the promisor to indem- nify is only a proposition which may be withdrawn by him or declined by the promisee. It is only when the proposition is acted on by the promisee that the contract becomes absolute; but at the very instant that it thus becomes a contract there also springs up an implied contract of the principal to do and perform the same act, viz., to indemnify the surety against loss. It arises at the same moment, exists to the same extent, is sup- ported by the same consideration, broken at the same instant, and is discharged by the same act, whether it be done by the principal in the bond or by the promisee in the contract to indemnify. It is thfe debt of the principal ; and, being his debt, no third person can be bound for its payment unless the contract be evidenced by writing. This, we think, is the fair import of the statute and it ought not to be refined or frittered away. Judgment affirmed.' c. Contract for sale of lands or hereditaments, or any interest in or concerning them. HEYN V. PHILIPS. 37 CALIFORNIA, 529.— 1869. Appeal from the District Court, Third Judicial District, Ala- meda County. Judgment for defendant. Plaintiff appeals. Sawver, C. J. The question in this case is, whether the contract sued on and proved is a contract " for the sale of any lands, or interest in lands," within the meaning of the eighth section of the statute of frauds, and which is required to be in writing, and subscribed by the party to be charged. The contract alleged is, that defendant employed said plaintiff 1 Contra, with review of cases, Anderson v. Spence, 72 Ind. 315. For & case that escapes the statute, where the primary debt does subsist, see White V. Bintoul, 108 N. Y. 222. Chap. II. § 3.] FORM: STATUTE OF FRAUDS. 119 to negotiate a sale of certain described lands, and find a pur- chaser for the same ; that it was " stipulated and agreed by and between said defendant and said plaintiff, that if said plaintiff would and should, within ten days from said last- named day, find a purchaser or purchasers ior said land, at the price of two hundred dollars per acre, that the said defendant would sell and convey the same for that sum to such purchaser or purchasers, and that said plaintiff might and should have for his services in making such negotiation and finding a purchaser or purchasers, all that might or could be obtained from such purchaser or purchasers over said sum of two hundred dollars per acre ; " that plaintiff found a purchaser at that sum and four thousand dollars over; that said purchaser tendered the money to defendant and demanded a conveyance, and that said defendant refused to receive said sum, or make a conveyance, whereby plaintiff was prevented from receiving the said excess of four thousand dol- lars as compensation for his services. It does not appear to us that this is a contract for the sale of land, or an interest in land, within the meaning of the statute of frauds. It was a mere contract of employment between the plaintiff and defendant. There was no sale of land from the defendant to the plaintiff. The plaintiff was simply employed to find a purchaser for defendant's land at a given price to be realized by defendant, and the compensation to be received by plaintiff was to be such sum as he could get for the land over the given price. It is true that defendant agreed that in case a pur- chaser should be found willing to pay the given price or a larger sum, he would convey to such purchaser upon the receipt of the money so as to enable plaintiff to realize the compensation, and he did not agree to pay anything himself, but this was still but a mode of ascertaining and obtaining a compensation for plain- tiff's services. The plaintiff had no interest, and was to have no interest whatever in the land, as such. The contract was sub- stantially one of employment to find a purchaser of land, and not as between the parties a sale or agreement to sell land, or any interest in land. The subject matter of the contract was the business of finding a party who would purchase the land for a given price and such sum over as would compensate the plain- tiff for his services. He found a purchaser, and he was pre- 120 FORMATION OF CONTKACT. [Pabt IL vented from receiving his compensation by the refusal of the defendant to enter into the contract of sale with the purchaser found by plaintiff. We think the judgment and order denying a new trial should be reversed and a new trial had, and it is so ordered. d. Agreement not to be performed within the space, of one year from the making thereof. PETERS V. WESTBOROUGH. 19 PICKERING (Mass.), 36i. — 1837. Assumpsit for expenses incurred, etc., in the support of Cath- arine Ladds, from March 2, 1835, until her death. At the trial in the Common Pleas, before Strong, J., it ap- peared that the plaintiff was an inhabitant of Westborough; that Catharine Ladds was the daughter of John Ladds, who resided in a neighboring town; that she came into the family of the plaintiff in March, 1834, when she was eleven or twelve years of age, and remained there until her death, which took place on the 31st of May, 1835, after a sickness of four or five months ; that on the 2d of March, 1836, the plaintiff gave notice of her illness to one of the overseers of the poor of Westborough, and requested that she might be supported by the town; but that no action was taken by them on the subject. The counsel of the defendants then proposed to show by parol evidence, that a short time before Catharine went into the plain- tiff's family, it was agreed between him and her father that the plaintiff should take her into his family and employment for one month on trial, and if, at the end of the month, he was not satisfied with her, he might return her to her father, but that, otherwise, he should support her until she was eighteen years of age, and should not return her for any cause but bad conduct on her part; that, in pursuance of this agreement, she went into the family of the plaintiff, and that at the end of the month the plaintiff expressed himself to be satisfied with her, and never offered to return her to her father. Chap. II. §3.] FOEM: STATUTE OF FRAUDS. 121 The plaintiff objected to the introduction of this evidence, on the ground that the contract not being in writing, was void by the statute of frauds. The judge ruled, that, as this contract was by parol, it was competent for the plaintiff to put an end to it at any time, and that, after the notice given to the overseers on the 2d of March, 1836, the plaintiff ceased to be liable for the support of the pauper ; and the evidence was accordingly rejected. The jury returned a verdict for the plaintiff. The defendant excepted to the ruling of the judge. Wilde, J. This case depends on the question, whether the plaintiff was not, by his contract, as it was offered to be proved by the defendants, bound to support the pauper for the expenses of whose support the defendants are charged; and we are of opinion that he was so bound by his contract with the pauper's father. This was clearly a valid contract, unless, being by parol, it was void by the statute of frauds, as an Agreement not to be performed within the space of one year from the making thereof. St. 1788, c. 16, § 1. But this clause of the statute extends only to such agreements as, by the express appointment of the parties, are not to be performed within a year. If an agreement be capa ble of being performed within a year from the making thereof, it is not within the statute, although it be not actually performed till after that period. 1 Com. on Oontr. 86. On this construc- tion of the statute it was decided, in an anonymous case in 1 Salk. 280, that a parol promise to pay so much money upon the return of a certain ship was not within the statute, although the ship happened not to return within two years after the prom- ise was made ; for that, by possibility, the ship might have returned within a year. So, in the case of Peter v. Compton (Skin. 353) it was decided that a promise to pay money to the plaintiff on the day of his marriage was not within the statute, though the marriage did not happen within a year. And it was held by a majority of the judges, that where an agreement is to be performed upon a contingency, and it does not appear in the agreement, that it is to be performed after the year, there a note in writing is not necessary; for the contingency might happen within the year. 122 FORMATION OF CONTRACT. [Part H. This construction of the statute is fully confirmed by the case of Fenton v. Emblers, 3 Burr. 1278. In that case the defend- , ant's testator had promised the plaintiff, that if she would be- come his housekeeper, he would pay her wages after the rate of £6 per annum, and give her, by his last will and testament, a legacy or annuity of £16 by the year, to be paid yearly. The plaintiff, on this agreement, entered into the testator's service, and became his housekeeper, and continued so for more than . three years. And the contract, though by parol, was held to be valid and not within the statute, Mr. Justice Dennison declar- ing his opinion to be (in which opinion the other judges coin- cided) that the statute of frauds plainly means an agreement not to be performed within the space of a year, and expressly and specifically so agreed, that a contingency was not within it, nor any case that depended on a contingency, and that it did not extend to cases where the thing might be performed within the year. But if it appears clearly that an agreement is not to be per- formed within a year, and that such is the understanding of the parties, it is within the statute of frauds, although it might be partly performed within that period. Such was the decision in Boydell v. Drummond, 11 East, 142. But the performance of the agreement in that case did not depend on the life of either party, or any other contingency. The defendant had agreed to take and pay for a series of large prints from some of the scenes in Shakespeare's plays. The whole were to be published in num- bers; and one number, at least, was to be published annually after the delivery of the first. The whole scope of the under- taking shows, as Lord EUenborough remarks, that it was not to be performed within a year; and if, contrary to all physical probability, it could have been performed within that time, yet the whole work could not have been obtruded upon the subscrib- ers at once, so as to have entitled the publishers to demand pay- ment of the whole subscription from them within the year. From these authorities it appears to be settled, that in order to bring a parol agreement within the clause of the statute in question, it must either have been expressly stipulated by the parties, or it must appear to have been so understood by them. Chap. II. § 3.] FOKM: STATUTE OF FRAUDS. 123 that the agreement was not to be performed within a year. And this stipulation or understanding is to be absolute and certain, and not to depend on any contingency. And this, we think, is the clear meaning of the statute. In the present case, the performance of the plaintiff's agree- ment with the child's father depended on the contingency of her life. If she had continued in the plaintiff's service, and he had supported her, and she had died within a year after the making of the agreement, it would have been fully performed. And an agreement by parol is not within the statute, when by the happening of any contingency it might be performed within a year. Judgment of the Court of Common Pleas reversed, and a new trial granted.^ i (in.) Provisions of seventeenth section. NORTHERN et al. v. THE STATE on the Relation of LATHROP. 1 INDIANA, 113.— 1848. Perkins, J. . . . The finding of the court upon the issue on the replication to the third plea was wrong. The defendants had no property subject to execution. It is admitted they had not, unless the corn mentioned below was so. A witness, " James H. Goff, testified that, about the last of May or first of June, 1844, after the corn which David Griffin had planted on the farm of George Cheek was two or three inches high, said Grilfin called and told him the weeds were about taking his corn ; that he was poor and sick, and should not be able to raise his crop unless," etc. Goff then bought the corn of Grifiin, paid a part of the con- sideration in hand, etc. The execution against Griffin, for failing to make the money on which the defendants are sued, did not issue till the August succeeding this sale, and it is not pretended there was any fraud; but it is insisted that the corn was not so in esse at the time as to be the subject of sale, and that the 1 The case came again before the court. 20 Pick. 506. 124 FORMATION OF CONTRACT. [Pabt II. contract was for an interest in land and within the statute requir- ing a memorandilm in writing. The cases of Whipple v. Foot (2 John. 418), Austin y. Sawyer (9 Cow. 39), Craddockv. Riddles- barger (2 Dana, 205), and Jones v. Flint (10 Ad. & Ell. 753), among others, decide that growing crops, raised annually, by labor, are the subject of sale as personal property, before maturity, and that their sale does not necessarily involre an interest in the realty requiring a written agreement. See also Chit, on Con. 301; 1 Hill Ah. 58. We think this case comes within those cited. No other point requires an opinion. It is only necessary to add, that we are not satisfied, upon a full examination of this case, that the plaintiff in error was not injured by the erroneous decision of the court below, and shall, therefore, reverse the final judgment there rendered. Per Curiam. The judgment is reversed with costs. Cause remanded, etc. HIKTH V. GEAHAM. 50 OHIO STATE, 57. — 1893. The plaintiff in error brought an action before a justice of the peace to recover of the defendant in error damages alleged to have been sustained on account of the refusal of the latter to perform a contract by which he had sold to the plaintiff in error certain growing timber. Plaintiff had judgment before the justice of the peace which was afilrmed by the Court of Common Pleas, but reversed by the Circuit Court. Error to Circuit Court. Bkadbuky, J. . . . Whether a sale of growing trees is the sale of an interest in or concerning land has long been a much contro- verted subject in the courts of England, as well as in the courts of the several States of the Union. The question has been differently decided in different jurisdictions, and by different courts, or at different times by the same court within the same jurisdiction. The courts of England, particularly, have varied widely in their holdings on the subject. Lord Mansfield held that the sale of a crop of growing turnips was within this clause of Chap. n. §3.] FORM: STATUTE OF FRAUDS. 125 the statute. Emmerson v. Heelis, 2 Taunt. 38, following the case of Waddington v. Bristow, 2 Bos. & P. 452, where the sale of a crop of growing hops was adjudged not to have been a sale of goods and chattels merely. And in Crosby v. Wadsworth (6 East. 602) the sale of growing grass was held to be a contract for the sale of an interest in or concerning land, Lord EUenborough saying, " Upon the first of these questions "(whether this purchase of the growing crop be a contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them) " I think that the agreement stated, conferring, as it professes to do, an exclusive right to the vesture of the land during a limited time and for given purposes, is a contract or sale of an interest in, or at least an interest concerning, lands." Id. 610. Afterwards, in Teal v. Auty (2 Brod. & B. 99), the Court of Common Pleas held a contract for the sale of growing poles was a sale of an interest in or concerning lands. Many decisions have been announced by the English courts since the cases above noted were decided, the tendency of which have been to greatly narrow the application of the fourth section of the statute of frauds to crops, or timber, growing upon land. Crops planted and raised annually by the hand of man are practically withdrawn from its operation, while the sale of other crops, and in some instances growing timber also, are withdrawn from the statute, where, in the contemplation of the contracting parties, the subject of the contract is to be treated as a chattel. The latest declaration of the English courts upon this question is that of the common pleas division of the high court of justice in Marshall v. Green (1 C. P. Div. 35), decided in 1875. The syllabus reads : " A sale of growing timber to be taken away as soon as possible by the purchaser is not a contract or sale of land, or any interest therein, within the fourth section of the statute of frauds." This decision was rendered by the three justices who constituted the common pleas division of the high court of justice, Coleridge, C. J., Brett and Grove, JJ., whose characters and attainments entitle it to great weight ; yet, in view of the prior long period of unsettled professional and judicial opinion in England upon the question, that the court was not one of final resort, and that the decision has encountered adverse criticism from high authority (Benj. Sales [ed. 1892], 126 FORMATION OF CONTRACT. [Paet II. § 126), it cannot be considered as finally settling the law of England on this subject. The conflict among the American cases on the subject cannot be wholly reconciled. In Massachusetts, Maine, Maryland, Kentucky, and Connecticut, sales of growing trees to be presently cut and removed by the vendee, are held not to be within the operation of the fourth section of the statute of frauds. Glaflin v. Carpenter, 4 Mete. (Mass.) 580; Nettleton v. Sikes, 8 Mete. (Mass.) 34; BostwickY. Leach, 3 Day, 476; Erskine V. Plummer, 7 Me. 447; Cutler v. Pope, 13 Me. 377; Cain v. McGuire, 13 B. Mon. 340; Byassee v. Reese, 4 Mete. (Ky.) 372; Smith v. Bryan, 5 Md. 141. In none of these cases, except 4 Mete. (Ky.) 372, and in 13 B. Mon. 340, had the vendor attempted to repudiate the contract before the vendee had entered upon its execution, and the statement of facts in those two cases do not speak clearly upon this point. In the leading English case before cited (Marshall v. Chreen, 1 C. P. Div. 36) the vendee had also entered upon the work of felling the trees, and had sold some of their tops before the vendor countermanded the sale. These cases, therefore, cannot be regarded as directly holding that a vendee, by parol, of growing timber to be presently felled and removed, may not repudiate the contract before anything is done under it; and this was the situation in which the parties to the case now under consideration stood when the contract was repu- diated. Indeed, a late case in Massachusetts {CHles v. Simonds, 15 Gray, 441) holds that "the owner of land, who has made a verbal contract for the sale of standing wood to be cut and severed from the freehold by the purchaser, may at any time revoke the license which he thereby gives to the purchaser to enter his land to cut and carry away the wood, so far as it relates to any wood not cut at the time of the revocation." The courts of most of the American States, however, that have considered the question, hold expressly that a sale of growing or standing timber is a contract concerning an interest in lands, and within the fourth section of the statute of frauds. Oreen v. Armstrong, 1 Denio, 550; Bishop v. Bishop, 11 N. Y. 123; Westbrook v. Eager, 16 N. J. Law, 81; Buck r. Pickwell, 27 Vt. 157; Cool v. Lumber Co., 87 Ind. 531; Terrell v. Frazier, 79 Ind. 473; Owens v. Lewis, 46 Ind. 488; Armstrong v. Lawson, 73 Ind. 498; Jackson v. Evans, Chap. n. §3.] FORM: STATUTE OF FRAUDS. 127 44 Mich. 510, 7 N. W. Eep. 79; I/yle v. Shinnebarger, 17 Mo. App. 66; Howe v. Batchelder, 49 N. H. 204; Putney v. Day, 6 N. H. 430; Bowers v. Bowers, 95 Pa. St. 477; Daniels v. Bailey, 43 Wis. 566; Lillie v. Dunbar, 62 Wis. 198, 22 N. W.Eep. 467; Knox v. Haralson, 2 Tenn. Ch. 232. The question is now, for the iiret time, before this court for determination; and we are at liberty to adopt that rule on the subject most conformable to sound reason. In all its other relations to the affairs of men, growing timber is regarded as an integral part of the land upon which it stands ; it is not subject to levy and sale upon execution as chattel property; it descends with the land to the heir, and passes to the vendor with the soil. Jones v. Timmons, 21 Ohio St. 596. Coal, petroleum, building stone, and many other substances constituting integral parts of the land, have become articles of commerce, and easily detached and removed, and, when detached and removed, become personal property, as well as fallen timber ; but no case is found in which it is suggested that sales of such substances, with a view to their immediate removal, would not be within the statute. Sales of growing timber are as likely to become the sub- jects of fraud and perjury as are the other integral parts of the land, and the question whether such sale is a sale of an interest in or concerning lands should depend not upon the intention of the parties, but upon the legal character of the subject of the contract, which, in the case of growing timber, is that of realty. This rule has the additional merit of being clear, simple, and of easy application, — qualities entitled to substantial weight in choosing between conflicting principles. Whether circumstances of part performance might require a modification of this rule is not before the court, and has not been considered. Judgment affirmed. GODDAED V. BINNEY. 115 MASSACHUSETTS, 450. — 1874. Contract to recover the price of a buggy built by plaintiff for defendant. Defense, the statute of frauds. Defendant ordered plaintiff, a carriage manufacturer, to build him a buggy, with a drab lining, outside seat of cane, painted in a specified style, and with defendant's monogram on the sides. 128 FORMATION OF CONTRACT. [Pabt II. Defendant called on plaintiff afterward, and on being asked if he would consent that plaintiff should sell the buggy, replied no, that he would keep it. After it was finished according to directions, plaintiff sent a bill to defendant, and sent twice afterward for payment, and each time defendant promised to call and see plaintiff about it. Before the buggy was paid for or deliyered, it was burned. Verdict was directed for defendant, and it was agreed that if the court is of opinion that the buggy was on the premises of plaintiff at risk of defendant, the verdict should be set aside and judgment entered for plaintiff for §675 and interest; otherwise, judgment on the verdict. Ames, J. Whether an agreement like that described in this report should be considered as a contract for the sale of goods, within the meaning of the statute of frauds, or a contract for labor, services, and materials, and therefore not within that statute, is a question upon which there is a conflict of authority. According to a long course of decisions in New York, and in some other States of the Union, an agreement for the sale of any commodity not in existence at the time, but which the vendor is to manufacture or put in a condition to be delivered (such as flour from wheat not yet ground, or nails to be made from iron in the vendor's hands), is not a contract of sale within the mean- ing of the statute. Crookshank v. Burr ell, 18 Johns. 58; Sew- all V. Fitch, 8 Cow. 215; Robertson v. Vaughn, 5 Sandf. 1; Downs V. Boss, 23 Wend. 270; Mchelberger v. M'Cauley, 6 Har. & J. 213. In England, on the other hand, the tendency of the recent decisions is to treat all contracts of such a kind in- tended to result in a sale, as substantially contracts for the sale of chattels; and the decision in Lee v. Oriffin (1 B. & S. 272) goes so far as to hold that a contract to make and fit a set of artificial teeth for a patient is essentially a contract for the sale of goods, and therefore is subject to the provisions of the statute. See Maberley v. Sheppard, 10 Bing. 99; Howe v. Palmer, 3 B. & Aid. 321; Baldey v. Parker, 2 B. & C. 37; Atkinson v. Bell, 8 B. & C. 277. In this commonwealth, a rule avoiding both of these extremes was established in Mixer v. Howarth (21 Pick. 206), and has been CHA.P. n. §3.] FORM: STATUTE OF FRAUDS. 129 recognized and affirmed in repeated decisions of more recent date. The effect of these decisions we understand to be this, namely, that a contract for the sale of articles then existing or such as the vendor in the ordinary course of his business manu- factures or procures for the general market, whether on hand at the time or not, is a contract for the sale of goods, to which the statute applies. But on the other hand, if the goods are to be manufactured especially for the purchaser, and upon his special order, and not for the general market, the case is not within the statute. Spencer Y. Cone, 1 Met. 283. "The distinction," says Chief Justice Shaw, in Lamb v. Crafts (12 Met. 353), "we be- lieve is now well understood. When a person stipulates for the future sale of articles, which he is habitually making, and which, at the time, are not made or finished, it is essentially a contract of sale, and not a contract for labor; otherwise, when the article is made pursuant to the agreement." In Gardner v. Joy (9 Met. 177) a contract to buy a certain number of boxes of candles at a fixed rate per pound, which the vendor said he would manu- facture and deliver in about three months, was held to be a con- tract of sale and within the statute. To the same general effect are Waterman v. Meigs, 4 Cush. 497, and Clark v. Nichols, 107 Mass. 547. It is true that in "the infinitely various shades of different contracts," there is some practical difficulty in dispos- ing of the questions that arise under that section of the statute. Oen. Sts. c. 105, § 5. But we see no ground for holding that there is any uncertainty in the rule itself. On the contrary, its correctness and justice are clearly implied or expressly affirmed in all of our decisions upon the subject matter. It is proper to say also that the present case is a much stronger one than Mixer V. Howarth. In this case, the carriage was not only built for the defendant, but in conformity in some respects with his direc- tions, and at his request was marked with his initials. It was neither intended nor adapted for the general market. As we are by no means prepared to overrule the decision in that case, we must therefore hold that the statute of frauds does not apply to the contract which the plaintiff is seeking to enforce in this action. Independently of that statute, and in cases to which it does not apply, it is well settled that as between the immediate par- 130 FOEMATION OF CONTRACT. [Part II. ties, property in personal eliattels may pass by bargain and sale without actual delivery. If the parties have agreed upon the specific thing that is sold and the price that the buyer is to pay for it, and nothing remains to be done but that the buyer should pay the price and take the same thing, the property passes to the buyer, and with it the risk of loss by fire or any other accident. The appropriation of the chattel to the buyer is equivalent, for that purpose, to delivery by the seller. The assent of the buyer to take the specific chattel is equivalent for the same purpose to his acceptance of possession. Dixon v. Yates, 5 B. & Ad. 313, 340. The property may well be in the buyer, though the right of possession, or lien for the price, is in the seller. There could in fact be no such lien without a change of ownership. No man can be said to have a lien, in the proper sense of the term, upon his own property, and the seller's lien can only be upon the buyer's property. It has often been decided that assumpsit for the price of goods bargained and sold can be maintained where the goods have been selected by the buyer, and set apart for him by the seller, though not actually delivered to him, and where nothing remains to be done except that the buyer should pay the agreed price. In such a state of things the property vests in him, and with it the risk of any accident that may happen to the goods in the meantime. Noy's Maxims, 89; 2 Kent. Com. (12th ed.) 492; Bloxam v. Sanders, 4 B. & C. 941; Tarling v. Baxter, 6 B. & C. 360; Hinde v. Whitehouse, 7 East, 571; Macomber V. Parker, 13 Pick. 175, 183; Morse v. Sherman, 106 Mass. 430. In the present case, nothing remained to be done on the part of the plaintiff. The price had been agreed upon; the specific chattel had been finished according to order, set apart and ap- propriated for the defendant, and marked with his initials. The plaintiff had not undertaken to deliver it elsewhere than on his own premises. He gave notice that it was finished, and pre- sented his bill to the defendant, who promised to pay it soon. He had previously requested"that the carriage should not be sold, a request which substantially is equivalent to asking the plain- tiff to keep it for him when finished. Without contending that these circumstances amount to a delivery and acceptance within the statute of frauds, the plaintiff may well claim that enough Chap. II. §3.] FORM: STATUTE OF FRAUDS. 131 has been done, in a case not within that statute, to vest the gen- eral ownership in the defendant, and to cast upon him the risk of loss by fire, while the chattel remained in the plaintiff's pos- session. According to the terms of the reservation, the verdict inust be set aside, and judgment entered for the plaintiff. GEEENWOOD v. LAW. 55 NEW JERSEY LAW, 168.— 1892. Van Stckbl, J. Law, the plaintiff below, gave to Green- wood, the defendant, a mortgage upon lands in this State for the sum of $3700. Law alleged that Greenwood entered into a parol agreement with him to assign him this mortgage for the sum of $3000, and brought this suit to recover damages for the refusal of Greenwood to execute said parol agreement. On the trial below, a motion was made to nonsuit the plain- ' tiff, on the ground that the alleged agreement was within the statute of frauds. The refusal of the trial court to grant this motion is assigned for error. Lord Chief Justice Denman, in Humble v. Mitchell, reported in 11 Ad. & E. 205, and decided in 1840, said that no case directly in point on this subject had been found, and he held that shares in an incorporated company were not goods, wares, and merchan- dise within the seventeenth section of the statute of frauds. He overlooked the cases of Mussell v. Cooke, reported in Precedents in Chancery, 533 (decided in 1720), and Crull v. Dod- son, reported in Select Cases in Chancery (temp. King), 41 (decided in 1725), in which the contrary view was taken. In the case of Pickering v. Appleby (Com. 354) this question was fully argued before the twelve judges, who were equally divided upon it. The cases decided in the English courts since 1840 have followed Humble v. Mitchell. They will be found collected in Benjamin on Sales (ed. 1888) in a note on page 106. In this country a different rule prevails in most of the States. In Baldwin v. Williams (3 Mete. 365) a parol contract for the sale of a promissory note was held to be within the statute. 132 FORMATION OF CONTRACT. [Pakt II. In Connecticut and Maine a contract for the sale of shares in a joint stock company is required to be in writing. North v. Forest, 15 Conn. 400; Pray v. Mitchell, 60 Me. 430. Chief Justice Shaw, after a full discussion of the subject in Tisdale v. Harris (20 Pick. 9), concludes that a contract for the sale of shares in a manufacturing corporation is a contract for the sale of goods or merchandise within the statute of frauds, and in the absence of the other requisites of the statute must be proved by some note or memorandum in writing signed by the party to be charged or his agent. He did not regard the argu- ment, that by necessary implication the statute applies only to goods of which part may be delivered, as worthy of much consid- eration. An animal is not susceptible of part delivery, yet undoubtedly the sale of a horse by parol is within the statute. The exception in the statute is, when part is delivered; but if there cannot be a delivery in part, the exception cannot exist to take the case out of the general prohibition. Bonds and mortgages were expressly held to be goods and chat- tels in Terhune v. Executors of Bray, 1 Harr. 53. That was an action of trover for a bond and mortgage. Chief Justice Horn- blower, in deciding the case, said that, although the attachment act and letters of administration seem to distinguish between rights and credits and goods and chattels, and although an execu- tion against the latter will not reach bonds and notes, yet there is a sense in which upon sound legal principles such securities are goods and chattels. This sense ought to be applied to these words in this case. Reason and sound policy require that contracts in respect to securities for money should be subject to the reasonable restric- tions provided by the statute to prevent frauds in the sale of other personal property. The words " goods, wares, and merchandise " in the sixth sec- tion of the statute are equivalent to the term "personal prop- erty," and are intended to include whatever is not embraced by the phrase " lands, tenements, and hereditaments " in the preced- ing section. In my judgment, the contract sued upon is within the statute of frauds, and it was error in the court below to refuse to nonsuit. Ghap. II. § 4.] CONSIDERATION. 133 § 4. Consideration. (^.) Consideration is necessary to the validity of every simple contract. COOK V. BEADLEY. 7 CONNECTICUT, 57. — 1828. Bill for the correction of a mistake in a discharge given by Bradley to defendant's intestate, or for an injunction against the use of the discharge in an action at law, then pending. The action at law was on a written instrument delivered by defendant's intestate to Bradley, wherein he acknowledged him- self indebted in the sum of sixty dollars to Bradley for necessa- ries furnished by Bradley to the father of the intestate, and promised to pay the same in case the father failed to do so. The father had since died without .paying the same. The discharge was given in settlement of an action of book debt, and by mistake was so drawn as to cover all claims and demands whatever. Bradley had demanded of the intestate the correction of the discharge, but this was refused. On demurrer the bill was adjudged sufficient. Defendant ap- pealed. Daggett, J. The question presented on this record for discus- sion, arises on the validity of the promise of the deceased, Henry Cook, stated in the bill. If no action can be supported on that contract, then the interference of the court to exercise its chancery power, to explain or invalidate the discharge, would be useless ; and the examination of other points suggested in argument, unnecessary. I am satisfied, on a full view of the case, that the contract is void, for want of consideration; and therefore that no action can be supported on it. 1. The contract is not a specialty, though in writing; nor is it governed by the law merchant applicable to negotiable paper. Were it of the first description, by the rules of the common law, the consideration would be locked up, and could not be iaquired into. Were it a note or bill of exchange, the law merchant would give to it the same force in relation to third persons. It is true that in Pillans & Bose v. Van Mierop & Hopkins (3 Burr. 1664) 134 FORMATION OF CONTRACT. [Part U. a suggestion was made by Wilmot, and the judges wlio sat with him in the King's Bench, that mere want of consideration could not be alleged in avoidance of a contract in writing. This sug- gestion was never established as law; and in the case of Bann v. Hughes (7 Term Rep. 350 n.) the true doctrine of the common law was laid down. A mere written contract is upon the footing of a parol contract, and a consideration must be proved. This is an inflexible rule of law; and the court is not at liberty, if it had the disposition, to subvert it. Ex nudo pacta non oritur actio. 2. What is a consideration sufficient to uphold a contract? Here, too, the common law furnishes the answer; a benefit to the party promising, or a loss to the party to whom the promise is made. The quantum of benefit, on the one hand, or of loss on the other, is immaterial. Powell on Contracts, 343, 344. To multiply authorities on this point is quite unnecessary. Let us now apply these uncontroverted principles to the case before us. Could Henry Cook possibly receive any benefit from this contract ? He gained nothing — nothing was renounced hereby. Was he induced by any loss to the promisee? He advanced nothing; he became liable for nothing; he did not forego anything, by or on the ground of it. He had before, not at the request of Henry Cook, but of Jonathan Cook, furnished the latter with necessaries for his support. It is impossible to discover, thus far, any consideration known to the law. 3. The defendant in error still insists, that- the father being poor and unable to support himself, and the son being possessed of large property, a legal obligation rested on him to pay for these necessaries thus furnished; and a legal obligation is a good con- sideration for a promise. The conclusion is just, if the premises are true. But was there this legal obligation? If it exist, it is to be found in our statute providing for the support of paupers. Stat. 369. tit. 73, c. 1. Provision is there made, that poor and impotent persons, unable to support themselves, shall be sup- ported by their children, if of sufficient ability. The manner in •which they shall be compelled to furnish this support is pre- scribed. The selectmen of the town where the poor persons reside, or one or more of their relations, may make application to the county court, and the court may order such support to be Chap. II. § 4.] CONSIDERATION. 135 supplied, by the relations of the poor persons, from the time of such application. The facts are to be ascertained by the court. The provision is prospective only. It regards no supplies already furnished, or expenses already incurred; and the liability, the legal obligation, is precisely as extensive as the law establishes it, and no greater. By this statute, then, for these reasons, the legal obligation alleged in support of this contract does not appear. That such is the construction of this statute, I cite the opinion of the Supreme Court of Massachusetts in Mills v. Wyman (3 Pick. Eep. 207, 212) as to a similar statute of that State; and especially I rely on the decision of this court in Wethersfielcl v. Montague et aZ., 3 Conn. Eep. 507. One of the points settled in that case was, that " no assessment could be made, by virtue of this statute, for past expenditures, the provisions of the statute being exclusively prospective." The principle then is, that there is no legal obligation to pay past expenditures ; which exonerates the son in this case from all legal liability for the expenditures for the father. 4. This opens to us the only remaining point. The counsel for the defendant in error urge, that the son was under a moral obligation to support the father, that this is a sufficient consid- eration to uphold the promise, and that, therefore, the son is liable. It cannot be successfully contended, that in every case where a person is under a moral obligation to do an act, as, to relieve one in distress by personal exertions, or the expenditure of money, a promise to that effect would be binding in a court of law. Such an idea is unsupported by principle or precedent. It is a just rule of morality, that a man should do towards others what he might reasonably expect from others in like circum- stances. This rule is sanctioned by the highest authority, and is very comprehensive. An affectionate father, brother, or sister has taken by the hand the youngest son of the family, given him an education, and placed him in a situation to become, and he has become, afftuent. The father, brother, or sister, by the visitation of Providence, has become poor, and impotent, and houseless. The son, rolling in riches, in the overflowings of his gratitude for kindness experienced, contracts in writing to discharge some 136 FORMATION OF CONTRACT. [Part II. portion of the debt of gratitude, by giving to bis destitute rela- tive some one of bis numerous bouses for a sbelter, and a thou- sand of bis many thousand dollars for his subsistence ; can such a promise be enforced in any judicial tribunal? Municipal laws will not decide what honor or gratitude ought to induce the son to do in such a case, as Dr. Blackstone remarks (2 Bla. Com. 446), but it must be left to the forum of conscience. It cannot be denied that many distinguished judges have laid down the principle that moral obligation is alone a sufBcient consideration to support a contract. Thus did Lord Mansfield, in Cowper, 288, 544. He was followed by Mr. Justice BuUer, by Lord Ellenborough, and other judges in other cases. But it is an obvious remark, that the cases cited in illustration of those positions were all cases where a prior legal obligation had existed, but by reason of some statute, or stubborn rule of law, it could not be enforced: as a promise to pay a debt barred by bankruptcy, or the statute of limitations, or a promise by an adult to pay a debt contracted during minority. In all these instances a good consideration existed, for each had received a benefit. All the cases on this subject are carefully, and with just dis- crimination, revised in a note in 3 Bos. & Pull. 249, and the true distinctions taken. The law of this note has been recently adopted in the Supreme Court of New York in the cases of Smith V. Ware (13 Johns. Eep. 257, 289) and Edwards et ux. v. Davis (16 Johns. Kep. 281, 283 n.), and in a still later case (in the year 1826) in Massachusetts, viz., Mills v. Wyman (3 Pick. Eep. 207) — a case referred to above for another purpose. No stronger case of moral obligation can be found. " A son who was of full age and had ceased to be a member of his father's family was suddenly taken sick among strangers, and being poor and in distress, was relieved by the plaintiff, and afterwards the father wrote to the plaintiff, promising to pay him the expenses incurred; it was held that such promise would not sustain an action." I am well satisfied with the very able and sound reason- ing of the court delivered by Chief Justice Parker on that occasion. I will now advert to the particular decisions of the English courts cited at the bar and relied on. Watson v. Turner, Bull. Chaf. U. § 4.] CONSIDEEATION. 137 Nisi Prius, 147. It is no longer doubted that the defendants in that case, the overseers of the poor, -were under a legal obligation to furnish the support for -which the promise was made. It is a case, therefore, within the rule in 3 Bos & Pull. 249 n. The case of Scott V. Nelson, cited Esp. Dig. 95, and an anonymous case in 2 Shower, 184, seem to imply that' a father was holden liable on a promise to pay for supplies for his bastard child; but in my opinion, it may be safely inferred from the facts that the sup- plies were furnished on request, which would make a material difference. In Wing v. Mill (1 Barn. & Aid. 104) the whole court held that a legal and moral obligation existed. In the case of Barnes v. Hedley & Conway (2 Taunt. 184) the court held, that when the parties to usurious securities stripped them of all usury, and the securities were given up and cancelled, by agreement of the parties, and the borrower of the money promised in considera- tion of having received the principal, to pay the same with legal interest, the promise was binding. This case rests upon the same principles which were recognized by this court in the case of Kilhorun v. Bradley (3 Day 356), where the court decided that if a usurious security be given up, and a new security be taken for the principal sum due and legal interest, the latter security will be good. This bears not at all upon the case under consideration. The money advanced was a good consideration of the promise to repay it, the usury being expunged. In the case of Lee v. Mugger- idge et al., executors of Mary Muggeridge, deceased (5 Taunt. 36), it was held that a feme covert, having given a bond for money advanced to her son-in-law, at her request, was bound by a promise made by her after she became discovert. Mary, the obligor in that case, had a large estate settled to her separate use. In this condition she executed a bond for money advanced to her son-in-law, at her request. After the death of the husband, and while single, she wrote a letter promising to pay the amount thus advanced. The court, in giving their opinion, say this is a promise founded on a moral obligation, and that it is a good con- sideration. I should say the promise was founded on the advancement of the money, at her request, to her son-in-law, and as she was incapacitated to bind herself, by reason of the cover- ture, when she received the benefit, and is therefore protected 138 FORMATION OF CONTRACT. [Pabt U. from liability by a stubborn rule of law, yet if when this rule of law ceases to operate upon her, she will promise to pay, it will bind her. On the whole, I am not satisfied that a case can be found in the English books in which it has been held that a moral obligation is a sufficient consideration for an express promise, though there are many to the contrary, but that it is limited in its application to the cases where a good and valuable considera- tion has once existed, as laid down by the Supreme Court in Massachusetts, once and again adverted to. I am therefore of opinion that there is error in the decree complained of, and that the judgment be reversed. HosMER, C. J., was of the same opinion. Peters and Lanman, JJ., dissented. Brainakd, J., was absent. Judgment reversed. (ii.) Consideration need not be adequate to the promise, but must be of some value in the eye of the law. SCHNELL V. NELL. 17 INDIANA, 29,-1861. Appeal from the Marion Common Pleas. Perkins, J. Action by J. B. Nell against Zacharias Schnell upon the following instrument : " This agreement entered into this 13th day of February, 1856, between Zach. Schnell, of Indianapolis, Marion County, State of Indiana, as party of the first part, and J. B. Nell, of the same place, Wendelin Lorenz, of Stiles- ville, Hendricks County, State of Indiana, and Donata Lorenz, of Frick- inger, Grand Duchy of Baden, Germany, as parties of the second part, witnesseth : The said Zacharias Schnell agrees as follows : whereas his wife, Theresa Schnell, now deceased, has made a last will and testament, in: which, among other provisions, it was ordained that every one of the above named second parties should receive the sum of $200 ; and whereas the said provisions of the wiU must remain a nullity, for the reason that no property, real or personal, was in the possession of the said Theresa Schnell, deceased, in her own name, at the time of her death, and all property held by Zacharias and Theresa Schnell jointly therefore reverts Chap. n. §4.] GONSIDERATION. 139 to her husband ; and whereas the said Theresa Schnell has also been a duti- ful and loving wife to the said Zach. Schnell, and has materially aided him in the acquisition of all property, real and personal, now possessed by him ; for, and in consideration of all this, and the love and respect he bears to his wife ; and, furthermore, in consideration of one cent, received by him of .the second parties, he, the said Zach. Schnell, agrees to pay the above named sums of money to the parties of the second part, to wit : $200 to the said J. B. Nell, f 200 to the said Wendelin Lorenz, and $200 to the aaid Donata Lorenz, in the following instalments, viz. : $200 in one year from the date of these presents ; $200 in two years, and $200 in three years ; to be divided between the parties in equal portions of $66| each year, or as they may agree, till each one has received his full sum of $200. " And the said parties of the second part, for, and in consideration of this, agree to pay the above named sum of money (one cent), and to deliver up to said Schnell, and abstain from collecting any real or supposed claims upon him or his estate, arising from the said last will and testa- ment of the said Theresa Schnell, deceased. " In witness whereof, the said parties have, on this 13th day of Febru- ary, 1856, set hereunto their hands and seals. " Zacharias Schnell, (seal) " J. B. Nell, (seal) "Wen. Lorenz. (seal)" The complaint contained no averment of a consideration for the instrument outside of those expressed in it ; and did not aver that the one cent agreed to be paid had been paid or tendered. A demurrer to the complaint was overruled. The defendant answered, that the instrument sued on was given for no consideration whatever. He further answered, that it was given for no consideration, because his said wife, Theresa, at the time she made the will mentioned, and at the time of her death, owned, neither separ rately, nor jointly with her husband or any one else (except so far as the law gave her an interest in her husband's property), any property, real or personal, etc. The will is copied into the record, but need not be into this opinion. The court sustained a demurrer to these answers, evidently op the ground that they were regarded as contradicting the instru- ment sued on, which particularly set out the considerations upon which it was executed. But the instrument is latently ambiguous on this point. See Ind. Dig., p. 110. 140 FORMATION OF CONTRACT. [Pabt II. The case turned below, and must turn here, upon the question whether tlTe instrument sued on does express a consideration suffi- cient to give it legal obligation, as against Zacharias Schnell. It specifies three distinct considerations for his promise to pay $600 : 1. A promise, on the part of the plaintiffs, to pay him one oexd. 2. The love and affection he bore his deceased wife, and the fact that she had done her part, as his wife, in the acquisition of property. 3. The fact that she had expressed her desire, in the form of an inoperative will, that the persons named therein should have the sums of money specified. The consideration of one cent will not support the promise of Schnell. It is true that as a general proposition, inadequacy of consideration will not vitiate an agreement. Baker v. Roberts, 14 Ind. 552. But this doctrine does not apply to a mere ex- change of sums of money, of coin whose value is exactly fixed, but to the exchange of something of, in itself, indeterminate value for money or, perhaps, for some other thing of indeter- minate value. In this case, had the one cent mentioned been some particular one cent, a family piece, or ancient, remarkable coin, possessing an indeterminate value, extrinsic from its simple money value, a different view might be taken. As it is, the mere promise to pay six hundred dollars for one cent, even had the portion of that cent due from the plaintiff been tendered, is an uncopscionable contract, void, at first blush, upon its face, if it be regarded as an earnest one. Hardesty v. Smith, 3 Ind. 39. The consideration of one cent is plainly in this case merely nominal, and intended to be so. As the will and testament of Schnell's wife imposed no legal obligation upon him to discharge her bequests out of his property, and as she had none of her own, his promise to discharge them was not legally binding upon him on that ground. A moral consideration only will 'not support a promise. Ind. Dig., p. 13. And for the same reason, a valid consideration for his promise cannot be found in the fact of a compromise of a disputed claim ; for where such claim is legally groundless, a promise upon a compromise of it, or a suit upon it, is not legally binding. Spahr v. HoUingshead, 8 Blackf. 415. There was no mistake of law or fact in this case, as the agree- Chap. II. § 4.] CONSIDERATION. 141 ment admits the will inoperative and void. The promise was simply one to make a gift. The past services of his wife, and the love and affection he had borne her, are objectionable as legal considerations for Schnell's promise on two grounds: 1. They are past considerations. Ind. Dig., p. 13. 2. The fact that Schnell loved his wife, and that she had been industrious, constituted no consideration for his promise to pay J. B. Nell and the Lorenzes a sum of money. Whether, if his wife, ia her lifetime, had made a bargain with Schnell that, in consideration of his promising to pay, after her death, to the persons named, a sum of money, she would be industrious and worthy of his affection, such a promise would have been valid and consistent with public policy, we need not decide. Nor is the fact that Schnell now venerates the memory of his deceased wife, a legal consideration for a promise to pay any third person money. The instrument sued on, interpreted *in the light of the facts alleged in the second paragraph of the answer, will not support an action. The demurrer to the answer should have been over- ruled. See Stevenson v. Druley, 4 Ind. 519. Per Curiam. The judgment is reversed, with costs. Cause remanded, etc. DEVECMON V. SHAW & DEVEIES, Ex'rs. 69 MARYLAND, 199. — 1888. Betan, J. John Semmes Devecmon brought suit against the executors of John S. Combs, deceased. He declared in the common counts and also filed a bill of particulars. After judg- ment by default, a jury was sworn to assess the damages sus- tained by the plaintiff. The evidence consisted of certain accounts taken from the books of the deceased, and testimony that the plaintiff was a nephew of the deceased, and lived for several years in his family, and was in his service as clerk for several years. The plaintiff then made an offer of testimony, which is thus stated in the bill of exceptions : " That the plain- tiff took a trip to Europe in 1878, and that said trip was taken by said plaintiff, and the money spent on said trip was spent by 142 FORMATION OF CONTRACT. [Pabt n. the said plaintiff at the instance and request of said Combs, and upon a promise from him that he would reimburse and repay to the plaintiff all the money expended by him in said trip; and that the trip was so taken and the money so expended by the said plaintiff, but that the said trip had no connection with the business of said Combs ; and that said Combs spoke to the witness of his conduct in being thus willing to pay his nephew's expenses as liberal and generous on his part." On objection, the court refused to permit the evidence to be given, and the plaintiff excepted. It might very well be, and probably was the case, that the plaintiff would not have taken a trip to Europe at his own ex- pense. But whether this be so or not, the testimony would have tended to show that the plaintiff incurred expense at the instance and request of the deceased, and upon an express prom- ise by him that he would repay the money spent. It was a burden incurred at the request of the other party, and was cer- tainly a sufficient consideration for a promise to pay. Great injury might be done by inducing persons to make expenditures beyond their means, on express promise of repayment, if the law were otherwise. It is an entirely different case from a prom- ise to make another a present, or render him a gratuitous service. It is nothing to the purpose that the plaintiff was benefited by the expenditure of his own money. He was induced by this promise to spend it in this way, instead of some other mode. If it is not fulfilled, the expenditure will have been procured by a false pretense. As the plaintiff, on the theory of this evidence, had fulfilled his part of the contract, and nothing remained to be done but the payment of the money by the defendant, there could be a recovery in indebitatus assumpsit ; and it was not necessary to declare on the special contract. The fifth count in the declarar tion is for " money paid by the plaintiff for the defendants' tes- tator in his lifetime, at his request." In the bill of particulars we find this item: "To cash contributed by me, J. Semmes Devecmon, out of my own money, to defray my expenses to Europe and return, the said John S. Combs, now deceased, having promised me in 1878 ' that if I would contribute part of Chap. II. § 4.] . CONSIDERATION. 143 my own money towards tlie trip, he would give me a part of his, and would make up to me my part,' and the amount below named is my contribution, as follows," etc. It seems to us that this statement is a sufficient description of a cause of action covered by the general terms of the fifth count. The evidence ought to have been admitted. The defendants offered the following prayer, which the court granted : " The defendants, by their attorneys, pray the court to instruct the jury that there is no sufficient evidence in this case to entitle the plaintiff to recover the interest claimed in the bill of particu- lars, marked ' Exhibit No. 1, Bill of Particulars.' " The only evidence bearing on this question is the account taken from the books of the deceased which was offered in evi- dence by the plaintiff. This account showed on its face a final settlement of all matters embraced in it. In the absence of proof showing errors of some kind, the parties must be concluded by it in all respects. "We think the prayer was properly granted. Judgment reversed, and new trial ordered. HAMEE V. SIDWAY. 124 NEW YORK, 538. — 1891. Appeal -from an order of the General Term of the Supreme Court which reversed a judgment in favor of plaintiff entered at the trial at Special Term. The action was brought by plaintiff, as assignee, against de- fendant, as executor, upon a contract alleged to have been made between plaintiff's remote assignor and defendant's testator. Pabkee, J. The question which provoked the most discus- sion by counsel on this appeal, and which lies at the foundation of plaintiff's asserted right of recovery, is whether by virtue of a contract defendant's testator William E. Story became indebted to his nephew William E. Story, 2d, on his twenty-first birthday in the sum of five thousand dollars. The trial court found as a fact that "on the 20th day of March, 1869, . . . William E. Story agreed to and with William E. Story, 2d, that if he would 144 FORMATION OF CONTRACT. [Pabx H. refrain from drinking liquor, using tobacco, swearing, and play- ing cards or billiards for money until he should become 21 years of age, then he, the said William E. Story, would at that time pay him, the said William E. Story, 2d, the sum of f 5000 for such refraining, to which the said William E. Story, 2d, agreed," and that he " in all things fully performed his part of said agreement." The defendant contends that the contract was without consid- eration to support it, and, therefore, invalid. He asserts that the promisee by refraining from the use of liquor and tobacco was not harmed but benefited; that that which he did was best for him to do independently of his uncle's promise, and insists that it follows that unless the promisor was benefited, the contract was without consideration. A contention which, if well founded, would seem to leave open for controversy in many cases whether that which the promisee did or omitted to do was, in fact, of such benefit to him as to leave no consideration to support the enforcement of the promisor's agreement. Such a rule could not be tolerated, and is without foundation in the law. The Ex- chequer Chamber, in 1876, defined consideration as follows : " A valuable consideration in the sense of the law may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other." Courts "will not ask whether the thing which forms the consideration does in fact benefit the promisee or a third party, or is of any substantial value to any one. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as considera- tion for the promise made to him." Anson's Prin. of Con. 63. " In general, a waiver of any legal right at the request of an- other party is a sufficient consideration for a promise." Par- sons on Contracts, 444. "Any damage, or suspension or forbearance of a right, will be sufficient to sustain a promise." Kent, Vol. 2, 465, 12th ed. Pollock, in his work on contracts, page 166, after citing the definition given by the Exchequer Chamber already quoted, says : " The second branch of this judicial description is really the most important one. Consideration means not so much that one party is profiting as that the other abandons some legal right in the Cbai. II. § 4.] CONSIDERATION. 146 present or limits his legal freedom of action in the future as an inducement for the promise of the first." Now, applying this rule to the facts before us, the promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he abandoned for a period of years upon the strength of the promise of the testator that for such forbear- ance he would give him $5000. We need not speculate on the effort which may have been required to give up the use of those stimulants. It is sufficient that he restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle's agreement, and now having fully performed the condi- tions imposed, it is of no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it, but were it a proper subject of inquiry, we see nothing in this record that would permit a determination that the uncle was not benefited in a legal sense. Few cases have been found which may be said to be precisely in point, but such as have been support the position we have taken. In Shadwell v. Shadwell (9 C. B. N. S. 159) an uncle wrote to his nephew as follows : " My Dear Lancet — I am so glad to hear of your intended marriage with Ellen NichoU, and as I promised to assist you at starting, I am happy to tell you that I -will pay to you 150 pounds yearly during my life and until your annual income derived from your profession of a chancery barrister shall amount to 600 guineas, of which your own admission will be the only evidence that I shall require. " Your affectionate uncle, "Charles Shadwell." It was held that the promise was binding and made upon good consideration. In Lakota v. Newton, an unreported case in the Superior Court of Worcester, Mass., the complaint averred defendant's promise that " if you (meaning plaintiff) will leave off drinking for a year I will give you $100," plaintiff's assent thereto, per- formance of the condition by him, and demanded judgment there- for. Defendant demurred on the ground, among others, that the plaintiff's declaration did not allege a valid and sufficient consid- eration for the agreement of the defendant. The demurrer was overruled. 146 FORMATION OF CONTRACT. [Fabt U. In Talbott v. Stemmons (a Kentucky case not yet reported)/ the step -grandmother of the plaintiff made with him the follow- ing agreement: "I do promise and bind myself to give my grandson, Albert E. Talbott, $600 at my death, if he will never take another chew of tobacco or smoke another cigar during my life from this date up to my death, and if he breaks this pledge he is to refund double the amount to his mother." The execu- tor of Mrs. Stemmons demurred to the complaint on the ground that the agreement was not based on a sufficient consideration. The demurrer was sustained and an appeal taken therefrom to the Court of Appeals, where the decision of the court below was reversed. In the opinion of the court it is said that " the right to use and enjoy the use of tobacco was a right that belonged to the plaintiff and not forbidden by law. The abandonment of its use may have saved him money or contributed to his health; nevertheless, the surrender of that right caused the promise, and having the right to contract with reference to the subject matter, the abandonment of the use was a sufficient consideration to uphold the promise." Abstinence from the use of intoxicating liquors was held to furnish a good consideration for a promissory note in Lindell v. Bokes, 60 Mo. 249. The cases cited by the defendant on this question are not in point. In Mallory v. Gillett (21 N. Y. 412), Belknap v. Bender (75 Id. 446), and Berry v. Brown (107 Id. 659), the promise was in contravention of that provision of the statute of frauds which declares void all promises to answer for the debts of third persons unless reduced to writing. In Beaumont v. Reeve (Shirley's L. C. 6) and Porterfield v. Butler (47 Miss. 165) the question was whether a moral obligation furnishes sufficient consideration to uphold a subsequent express promise. In Duvoll V. Wilson (9 Barb. 487) and In re Wilber v. Warren (104 N. Y. 192) the proposition involved was whether an execu- tory covenant against incambrances in a deed given in considera- tion of natural love and affection could be enforced. In Van- derbilt v. Schreyer (91 N. Y. 392) the plaintiff contracted with defendant to build a house, agreeing to accept in part payment therefor a specific bond and mortgage. Afterwards he refused to 1 89 Ky. 222. Chap. II. § 4.] CONSIDERATION. 147 finish his contract unless the defendant would guarantee its pay- ment, which was done. It was held that the guarantee could not be enforced for want of consideration. For in building the house the plaintiff only did that which he had contracted to do. And in Robinson v. Jewett (116 N. Y. 40) the court simply held that "the performance of an act which the party is under legal obligation to perform cannot constitute a consideration for a new contract." It will be observed that the agreement which we have been considering was within the condemnation of the stat- ute of frauds, because not to be performed within a year, and not in writing. But this defense the promisor could waive, and his letter and oral statements subsequent to the date of final per- formance on the part of the promisee must be held to amount to a waiver. Were it otherwise, the statute could not now be in- voked in aid of the defendant. It does not appear on the face of the complaint that the agreement is one prohibited by the statute of frauds, and, therefore, such defense could not be made available unless set up in the answer. Porter v. Wormser, 94 N. Y. 431, 450. This was not done. In further consideration of the questions presented, then, it must be deemed established for the purposes of this appeal, that on the 31st day of January, 1875, defendant's testator was in- debted to William E. Story, 2d, in the sum of $5000, and if this action were founded on that contract it would be barred by the statute of limitations which has been pleaded, but on that date the nephew wrote to his uncle as follows : "Dear Uncle — I am now 21 years old to-day, and I am now my own boss, and I believe, according to agreement, that there is due me $5000. I have lived up to the contract to the letter in every sense of the word." A few days later, and on February sixth the uncle replied, and, so far as it is material to this controversy, the reply is as follows : "Dear Nephew — Your letter of the 31st ult. came to hand all right saying that you had lived up to the promise made to me several years ago. I have no doubt but you have, for which you shall have $5000 as I promised you. I had the money in the bank the day you was 21 years old that I intended for you, and you shall have tlie money certain. Now, Willie, I don't intend to interfere with this money in any way until I 148 FORMATION OF CONTRACT. [Pabt U. think you are capable of taking care of it, and the sooner that time comes the better it wUl please me. I would hate very much to have you start out in some adventure that you thought all right and lose this money in one year. . . . This money you hare earned much easier than I did, besides acquiring good habits at the same time, and you are quite wel- come to the money. Hope you will make good use of it. . . . " W. E. Stort. " P.S. — You can consider this money on interest." The trial court found as a fact that " said letter was received by said William E. Story, 2d, who thereafter consented that said money should remain with the said William E. Story in accord- ance with the terms and conditions of said letter." And further, "That afterwards, on the first day of March, 1877, with the knowledge and consent of his said uncle, he duly sold, trans- ferred, and assigned all his right, title, and interest in and to said sum of S5000 to his wife Libbie H. Story, who thereafter duly sold, transferred, and assigned the same to the plaintiff in this action." We must now consider the effect of the letter, and the nephew's assent thereto. Were the relations of the parties thereafter that of debtor and creditor simply, or that of trustee and cestui que trust? If the former, then this action is not maintainable, be- cause barred by lapse of time. If the latter, the result must be otherwise. No particular expressions are necessary to create a trust. Any language clearly showing the settler's intention is suf&cient if the property and disposition of it are definitely stated. Lewin on Trusts, 65. A person in the legal possession of money or property acknowl- edging a trust with the assent of the cestui que trust, becomes from that time a trustee if the acknowledgment be founded on a valuable consideration. His antecedent relation to the subject, whatever it may have been, no longer controls. 2 Story's Eq. § 972. If before a declaration of trust a party be a mere debtor, a subsequent agreement recognizing the fund as already in his hands and stipulating for its investment on the creditor's account will have the effect to create a trust. Day v. Roth, 18 N. Y. 448. It is essential that the letter interpreted in the light of sur- rounding circumstances must show an intention on the part of the uncle to become a trustee before he will be held to have be- Chap. II. § 4.] CONSIDERATION. 149 come such; but in an effort to ascertain the construction which should be given to it, we are also to observe the rule that the language of the promisor is to be interpreted in the sense in ■which he had reason to suppose it was understood by the prom- isee. White V. Hoyt, 73 N. Y. 605, 511. At the time the uncle wrote the letter he was indebted to his nephew in the sum of $5000, and payment had been requested. The uncle, recognizing the indebtedness, wrote the nephew that he would keep the money until he deemed him capable of taking care of it. He did not say "I will pay you at some other time," or use language that would indicate that the relation of debtor and creditor would continue. On the contrary, his langfuage indicated that he had set apart the money the nephew had " earned " for him, so that when he should be capable of taking care of it he should receive it with interest. He said : " I had the money in the bank the day you were 21 years old that I intended for you, and you shall have the money certain." That he had set apart the money is further evidenced by the next sentence : " Now, Willie, I don't intend to interfere with this money in any way until I think you are capable of taking care of it." Certainly, the uncle must have intended that his nephew should understand that the promise not " to interfere with this money " referred to the money in the bank which he declared was not only there when the nephew be- came 21 years old, but was intended for him. True, he did not use the word "trust," or state that the money was deposited in the name of William E. Story, 2d, or in his own name in trust for him, but the language used must have been intended to assure the nephew that his money had been set apart for him, to be kept without interference until he should be capable of taking care of it, for the uncle said in substance and in effect: "This money you have earned much easier than I did . . . you are quite welcome to. I had it in the bank the day you were 21 years old, and don't intend to interfere with it in any way until I think you are capa- ble of taking care of it, and the sooner that time comes the better it will please me." In this declaration there is not lacking a single element necessary for the creation of a valid trust, and to that declaration the nephew assented. The learned judge who wrote the opinion of the General Term, 150 FORMATION OF CONTRACT. [Fast II. seems to have taken the view that the trust was executed during the lifetime of defendant's testator by payment to the nephew, but as it does not appear from the order that the judgment was reversed on the facts, we must assume the facts to be as found by the trial court, and those facts support its judgment. The order appealed from should be reversed and the judgment of the Special Term aflSrmed, with costs payable out of the estate. All concur. Order reversed and judgment of Special Term affirmed. a. First test of reality. Did the promisee do, forbear, suffer, or promise anything in reject of his promise f (a) Motive must be distinguished from consideration. FINK V. COX. 18 JOHNSON (N. Y.), 145. — 1820. Assumpsit to recover the amount of a promissory note given by defendant's testator to his son, the plaintiff. Verdict for plaintiff, subject to the opinion of the court as to the law of the case. Spencer, C. J., delivered the opinion of the court. The question in this case is, whether there is a sufficient considera- tion for the note on which this suit is founded. It appears from the declaration of the testator when the note was given, that he intended it as an absolute gift to his son, the plaintiff; alleging that the plaintiff was not so wealthy as his brothers, that he had met with losses, and that he and his brothers had had a contro- versy about a stall. Such were the reasons assigned for his giving the note to the plaintiff. There can be no doubt that a consideration is necessary to up- hold the promise, and that it is competent for the defendant to show that there was no consideration. 17 Johns. Bep. 301; Schoonmaker v. Roosa and De Witt. The only consideration pretended is that of natural love and affection from a father to a child; and if that is a sufficient consideration, the plaintiff is entitled to recover, otherwise not. Chap. II. § 4.] CONSIDERATION. 161 It is conceded that the gift, in this case, is not a donatio causa mortis, and cannot be supported on that ground. In Pear- son V. Pearson (7 Johns. Eep. 26) the question was, whether the gift of a note signed by the defendant to the plaintiff was such a vested gift, though without consideration, as to be valid in law ; we held that it was not, and that a parol promise to pay money, as a gift, was no more a ground of action than a promise to deliver a chattel as a gift; and we referred to the case of N^oble V. Smith (2 Johns. Eep. 52), where the question underwent a full discussion and consideration. The case of ■Cfrangiac v. Arden (10 Johns. Eep. 293) was decided on the principle that the gift of the ticket had been completed by delivery of possession, and is in perfect accordance with the former cases. It has been strongly insisted that the note in the present case, although intended as a gift, can be enforced on the consideration of blood. It is undoubtedly a fair presumption that the testa- tor's inducement to give the note sprang from parental regard. The consideration of blood, or natural love and affection, is sufficient in a deed, against all persons but creditors and bona fide purchasers ; and yet there is no case where a personal action has been founded on an executory contract, where a consideration was necessary, in which the consideration of blood, or natural love and affection, has been held sufficient. In such a case the consideration must be a valuable one, for the benefit of the promisor, or to the trouble, loss, or prejudice of the promisee. The note here manifested a mere intention to give the one thou- sand dollars. It was executory, and the promisor had a locus poenitentioB. It was an engagement to give, and not a gift. None of the cases cited by the plaintiff's counsel maintain the position, that because a parent, from love and natural affection, engages to give his son money, or a chattel, that such a promise can be enforced at law. Judgment for the defendant.' 1 Accord : Whitaker v. Whitaker, 52 N. Y. 368 ; Schnell v. mil, 17 Ind. 29, ante, p. 138. Cf. /Smith v. Ferine, 121 N. Y. 376, 384. 152 FORMATION OF CONTRACT. [Pabt U. (y3) Consideration must move from promisee. NoTB. — For cases on the proposition that the consideration most move from the promisee, see cases under "Limits of Contractual Obligation,", post, Part ni. Ch. I. § 2. b. Second test of reality. Was the promisee's act, forbearance, sufferance, or promise of any ascertainable value / (o) Prima facie impossibility. BEEBE V. JOHNSON. 19 WENDELL (N. Y.), 600. — 1838. This was an action of covenant. On the 21st January, 1833, Johnson, for the consideration of 55000, conveyed by deed to Beebe, the sole and exclusive right to make, use, and vend in Upper and Lower Canada, in certain counties of this State, and in other places, a threshing machine which had been patented to one Warren, and covenanted to perfect the patent right in England as soon as practicable and within a reasonable space of time, so as to secure to Beebe the entire control of the provinces of Upper and Lower Canada. In April, 1834, Beebe commenced this suit, and in his declaration, after setting forth the contract, averred, that although a reasonable time for the purpose had long since elapsed, that Johnson had not per- fected the patent right in England, or otherwise secured to him the sole and exclusive right of making, using, and vending the machine in the provinces of Upper and Lower Canada. He further averred, that Johnson and himself being citizens of the United States, Johnson could not obtain, either for himself or for Beebe, the plaintiff, from the proper authorities in Canada, the exclusive right of vending the machine within those provinces ; and so, he said, Johnson had not kept his covenant. The defend- ant pleaded the general issue, and gave notice of special matter to be proved on the trial. On the trial of the cause the plaintiff read in evidence a letter of the defendant, dated 8th April, 1833, in which he admitted, in substance, that in the negotiation between the parties the exclusive right of vending the machine Chap. II. § 4.] CONSIDERATION. 153 in the Ganadas had been estimated at $500. The plaintiff also proved by a witness, who had been employed in the Canadas by him in vending the article, that the exclusive right of vending it there would, in his opinion, be worth $500. By a written stipulation between the parties, it was admitted that the patent right could not be perfected in England, because the authority to grant letters patent for such improvements was vested in the provinces, and that in the provinces the exclusive right of vend- ing improvements of this nature can be conferred only upon a subject of Great Britain, and a resident of the provinces, and that the patentee, the plaintiff, and the defendant are all citizens of the United States, and cannot become subjects of Great Britain short of a residence in the provinces of seven years. The jury found a verdict for the plaintiff of $601.23, being the sum of $500, with the interest thereof from the date of the deed declared upon. The defendant's counsel having moved for a nonsuit, which was overruled, and having excepted to the charge of the judge, now moved for a new trial. The principal grounds relied upon in support of the application will appear from the opinion delivered refusing a new trial. Nelson, C. J. It is supposed by the counsel for the defend- ant that a legal impossibility prevented the fulfilment of the covenant to perfect the patent right in England, so as to secure the monopoly of the Canadas to the plaintiff, and hence that the obligation was dispensed with, so that no action can be main- tained. There are authorities which go that length, Co. Litt. 206, b.; Shep. Touch. 164; 2 Co. Litt. 26; Piatt, on Gov. 569; but if the covenant be within the range of possibility, however absurd or improbable the idea of the execution of it may be, it will be upheld : as where one covenants it shall rain to-morrow, or that the Pope shall be at Westminster on a certain day. To bring the case within the rule of dispensation, it must appear that the thing to he done cannot by any means be accomplished; for, if it is only improbable, or out of the power of the obligor, it is not in law deemed impossible. 3 Comyn's Dig. 93; 1 Roll. Abr. 419. Now it is clear that the fulfilment in this case cannot be considered an impossibility within the above exposition of the rule; because, for anything we know to the contrary, the exclusive right to 164 FORMATION OF CONTRACT. [Pakt II. make, use, and vend the machine in the Canadas, might have been secured in England by act of Parliament or otherwise; at least, there is nothing in all this necessarily impossible. These provinces are a part of the British Empire, and subject to the power of the Parliament at home;' which body might very well grant the privilege the defendant covenanted to procure. Cer- tainly we are unable to say the government cannot or would not by any means grant it. There is, then, nothing in the case to take it out of the rule in Paradine v. Jane (Aleyn, 27) as expounded by Chambre, J., in Beale v. Thompson (3 Bos. & Pull. 420), namely, if a party enter into an absolute contract without any qualification or exception, and receives from the party with whom he contracts the consideration of such engagement, he must abide by the contract, and either do the act or pay damages ; his liability arising from his own direct and positive undertaking. 6 T. R. 750; 8 Id. 267, Laivrence, J.; 10 East, 633; 4 Carr. & Payne, 295; 1 Selv3. 344. It has also been said that the action cannot be maintained, as the covenant contemplated the violation of the laws of England. We are unable to perceive the force of this objection, as the ful- filment of the covenant necessarily required the procurement of lawful authority to make and vend the machine in the Canadas. It is difficult to understand how this could be accomplished by other than lawful means. That it might be by such, we have already considered not impossible. Again, it was said the contract was void because it contem- plated a renunciation of citizenship by the defendant. Whether, if the fact was admitted, the consequence would follow, we need not stop to consider, because it is very clear that no such step is necessarily embraced in the covenant. For aught we know, the patent might be procured without such renunciation; and if it were considered unlawful to contract for expatriation, inasmuch as this agreement does not necessarily contemplate it, we would be bound to hold that the defendant assumed to procure the patent without it. But even in England, the common law rule against the expatriation of the subject is so far modified that naturalization abroad for commercial purposes is recognized, and is of course lawful. 1 Comyn, 677; 8 T. ij. 31; 1 Bos. & Pull. Chap. II. § 4.] C0N8IDEKATI0N. 155 430, 440, 444; 2 Kent's Gomm. 49; 1 Peter's C. G. B. 159. In the case of Wilson v. Marryat (8 T. E. 31, and 1 Bos. & Pull. 430) it was decided that Collet, a natural-born subject of Great Britain, having become a citizen of the United States, according to our laws, was entitled to all the advantages of an American citizen under the treaty of 1794. There the defendant undertook to avoid a policy of insurance procured by the plaintiff for the bene- fit of Collet upon an American ship and cargo, of which he was master, on the ground that he was a British subject, and therefore the trade in which he was engaged illegal, being in violation of the privileges of the East India Company, which trade was secured to American citizens by the treaty of 1794. New trial denied. STEVENS V. COON". 1 FINNEY (Wis.), 356.— 1843. Dunn, C. J. Error is brought in this case to reverse a judg- ment of the District Court of Jefferson County. Coon, plaintiff below, brought his action of assumpsit against Stevens, defendant below, to recover damages on a liability growing out of a contract, which is in the words, etc., following, viz. : " AsTOR, March 23, 1839. "In consideration of C. J. Coon entering the west half of the north- west quarter of section 35, in town 13, range 13, I bind myself that the said eighty acres of land shall sell, on or before the 1st October next, for two hundred dollars or more, and the said Coon agrees to give me one- half of the amount over two hundred dollars said land may sell for in consideration of my warranty. , " Hamilton Stevens. " 1 agree to the above contract. "C.J. Coon." At the August term of the said Jefferson County District Court, in the year 1840, the said defendant Stevens pleaded the general issue which was joined by the said plaintiff Coon, and after several continuances the case was tried at the October term, 1842. On the trial, the above contract, and the receiver's receipt 156 FORMATION OF CONTRACT. [Paet U. to said plaintiff Coon, for the purchase money for said tract of land described in said contract, were read in evidence to the jury; and Abraham Vanderpool, a witness, testified " that he had visited that part of the country where the land lies, specified in said writing, and was upon the same, as he has no doubt, and estimated the present value of the same at $1.50 per acre, and that in October, 1839, it might be worth $1.25 an acre." Upon this evidence and testimony the plaintiff rested his case. Under the construction put on the contract read in evidence, the jury found for the plaintiff $116.50 in damages, and judg- ment was entered thereon. There is manifest error in this decision of the court. From an inspection of the contract, it is obvious that it is not such an one as is obligatory on either party. There is no reciprocity of benefit, and it binds the defendant below to the performance of a legal impossibility, so palpable to the contracting parties that it could not have been seriously intended by the parties as obligatory on either. The undertaking of the defendant below is, " that plaintiff's tract of land shall sell for a certain sum by a given day." Is it not legally impossible for him to perform this undertaking? Cer- tainly, no man can in legal contemplation force the sale of another's property by a given day, or by any day, as of his own act. The plaintiff was well apprised of the deficiency of his contract on the trial, as the testimony of his witness was entirely apart from the contract sued on, and was directed in part to a different contract, and such an one as the law would have recog- nized. If the contract had been that the tract of land would be worth $200 by a given day, then it could have been recovered on, if it did not rise to that value in the time. 1 Comyn on Con- tracts, 14, 16, 18 ; Comyn' s Dig., title " Agreement " ; 1 Pothier on Obli§ations, 71; 6 Petersdorfs Abridg. 218; 2 Sand. 137 (d). The District Court should not have entered judgment on the finding of the jury in this case. The construction of the contract by the District Court was erroneous. Judgment reversed with costs.* ' Cf. Merrill v. Packer, 80 la. 542, post, p. 340 ; Kitchen v. Loudenback, 48 Oh. St. 177. Chap. U. § 4.] CONSIDERATION. 157 (fi) Uncertainty. SHEEMAIT V. KITSMILLER, Adm'r. 17 SERGEANT & RAWUE (Pknn.), 46. — 1827. Duncan, J. The declaration contains four counts : 1. On the special promise to give Elizabeth Koons one hundred acres of land, in consideration that she should live with the intestate, as his housekeeper, until her marriage, with an aver- ment that she did live with him, and keep his house until her marriage. 2. That he would give her one hundred acres of land, if she lived with him until her marriage, and married the plaintiff, George Sherman, with an averment that she did live -with him until she intermarried with George Sherman. 3. Is a promise to give her one hundred acres of land, if she married George Sherman, with an averment that she intermarried with George Sherman. 4. Is a quantum meruit for work, labor, and services. The error assigned is, in that part of a long charge in which the court say, "There can be no recovery, unless there was a legal promise, seriously made; if a promise is so vague in its terms as to be incapable of being understood, and of being carried into effect, it cannot be enforced. If George Sherman had refer- ence to no particular lands, if he did not excite or intend to excite, a hope or expectation in Elizabeth Koons, that after her marriage with George Sherman she should get any land, such promise would not be so perfect as to furnish the ground of an action for damages. But if George Sherman was seized of several tracts in the vicinity, and he promised her one hundred acres, in such a manner as to excite an expectation in her that it was a particular part of his lands so held by him, though not particu- larly describing or specifying its value, or by whom; and if, in pursuance of such promise, she did marry George Sherman, then the action might be sustained. " Now, let us put the ease of the plaintiffs in the most favorable light, without regarding the form of the declaration, and admit that the proof met the allegation, the special promise of the one 158 FORMATION OF CONTKACT. [Fabt IL hundred acres of land, the consideration of the promise, marriage, and its execution, and living with the defendant's intestate until the marriage, the charge of the court was, in the particular com- plained of, more favorable to the plaintiffs than their case warranted. It should have been, on the question put to the court, that the promise could not support the action; that the defendant's intestate did not assume to convey any certain thing, to convey any certain or particular land, or that could, with reference to anything said by him, refer to anything certain. Whereas the court submitted to the jury whether it did refer to anything certain, viz., lands of the intestate in the vicinity; and that without one spark of evidence to authorize the jury to make such an inference or draw such conclusion. And if the verdict had been for the plaintiffs, on either of these three counts, the judgment would have been reversed for this error. The jury have found that the promise referred to nothing certain, no particular lands anywhere of which the promisor was seized. Except the count on the quantum meruit, for the reasonable allowance for the services of Elizabeth Koons, it was not an action of indebitatus assumpsit, but an action on the special contract — an action to recover damages sustained by the plaintiff for the breach of a promise to convey one hundred acres of land, an action for not specifically executing the contract. There can be no implied promise, because, whatever the undertaking was as to the one hundred acres, it was express; the action is brought on the express promise, and that only lies where a man by express words assumes to do a certain thing. Com. Dig., title "Assumpsit upon an Express Promise,'' A. 3. Not that this means an absolute certainty, but a certainty to a common intent, giving the words a reasonable construction. But the words must show the undertaking was certain; for, in assumpsit for non-payment of money, it is necessary to reduce the amount to a certainty; or, on a quantum meruit, by an averment, where the amount does not otherwise appear. Express promises or contracts ought to be certain and explicit, to a common intent at least. 1 Com. on Cont. They may be rendered certain by a reference to something certain, and the cases to be found in the books as to the nature of this reference are generally on promises Chap. II. § 4.] CONSIDERATION. 159 of marriage j as, where A, in consideration that B would marry his daughter, promised to give with her a child's portion, and that at the time of his death he would give to her as much as any of his other children, except his eldest son, — this was holden to be a good promise ; for, although a child's portion is altogether uncer- tain, yet what the rest of the children, except the eldest, got, reduces it to a sufScient certainty. Silvester's Case, Popham, 148; 2 Roll. Bep. 104. But if a citizen of London promises a child's portion, that of itself is sufficiently certain; for, by the custom there, it is certain how much each child shall have. 2 Boll. Bep. 104; 1 Lev. 88. Now here, the court instructed the jury, that if they could find this promise to refer to anything certain, any land in particular, the action could be maintained. This was leaving it to the jury more favorably for the plaintiffs than ought to have been done; for the jury should have been instructed, that as there was nothing certain in the promise, nothing referred to, to render it certain, the action could not be maintained. The contract was an express one, — nothing could be raised by impli- cation, — no other contract could be implied. By the statute of frauds and perjuries, such a promise would be void in- England, not being in writing ; and, although that provision is not incor- porated in our act on the subject, this would be matter of regret, if such loose speeches should be held to amount to a solemn binding promise, obliging the speaker to convey one hundred acres of his homestead estate, or pay the value in money. If a certain explicit, serious promise was made with her, though not in writing, if marriage was contracted on the faith of it, and the promise was certain of some certaLu thing, it would b& binding. There would, in the present case, be no specific performance decreed in a court of chancery ; the promisor himself would not know what to convey, nor the promisee what to demand. If it had been a promise to give him one hundred pieces of silver, this would be too vague to support an action ; for what pieces? — fifty- cent pieces or dollars? — what denomination? One hundred cows or sheep would be sufficiently certain, because the intention would be, that they should be at least of a middling quality ; but one hundred acres of land, without locality, without estimation of value, without relation to anything which could render it certain. 160 FORMATION OF CONTKACT. [Pabt U. does appear to me to be the most vague of all promises-, and, if any contract can be void for its uncertainty, this must be. One hundred acres on the Rocky Mountain, or in the Conestoga Manor — one hundred acres in the mountain of Hanover County, Vir- ginia, or in the Conewango rich lands of Adams County — one hundred acres of George Sherman's mansion-place at eighty dollars per acre, or one hundred acres of his barren lands at five dollars. This vague and void promise, incapable of specific execution, because it has nothing specific in it, would not prevent the plain- tiffs from recovering in a quantum meruit for the vahie of this young woman's services until her marriage. If this promise had been that, in consideration of one hundred pounds, the defendant's testator promised to convey her one hundred acres of land, chancery would not decree a specific performance, or decree a conveyance of any particular land ; yet the party could recover back the money he had paid in an action. As, where a young man, at the request of his uncle, lived with him, and his uncle promised to do by him as his own child, and he lived and worked with him above eleven years; and his uncle said his nephew should be one of his heirs, and spoke of advancing a sum of money to purchase a farm for him as a compensation for his services, but died without doing anything for his nephew, or making him any compensation, it was held that an action on an implied assumpsit would lie against the executors for the work and labor performed by the nephew for the testator. Jacobson v. TJie Executors ofLe Grange, 3 Johns. 199. In Conrad v. Conrad's Administrators (4 Dall. Pa. 130) a plantation was bought by the plaintiff, an illegitimate son of the defendant's intestate, on a special agreement that if the plaintiff would live with the intes- tate, and work his plantation for six years, he would give and convey to him one hundred acres of the land. This was held a good promise, because it was certain — one hundred acres of the plantation on which the father lived. But in this case the jury have negatived all idea of an agreement to give Miss Koons one hundred acres of any particular kind or quality of land, of any certain description, on which any value could be put. In 2 Teates, 522, in an action on a promise to convey a tract of land Chap. II. § 4.] CONSIDEKATION. 161 in Iforthumberland County to the plaintiff, the promise was in the first instance gratuitous, but the plaintiff had paid the scrivener to draw the conveyance, which was held to be a sufficient consideration for the promise; the action was for damages for not conveying it. No evidence was given of the value of the land. The court stated the difficulty of giving damages for not conveying lands of the value of which nothing appeared. The plaintiff's counsel admitted the want of evidence of the value of the land was an incurable defect. If the defect of evidence of value would be incurable, the defect of all allegation or proof of anything by which the value could be regulated, anything to afford a clue to the jury by which to discover what was intended to be given, any measure of damages, would be fatal. The promise is as boundless as the terrestrial globe. The party would lie at the mercy of the jury — there would be the same reason for ten thousand dollars damages as ten cents. The court could not set aside the verdict in any case, either on account of extravagance or smallness of damages, for there is nothing by which to measure them; but the arbitrary discretion or the caprice of the jury must decide them, without evidence and without control. It cannot be compared to actions of slander, where the jury have a wide range, and must exercise some lati- tude, — it is an action on an express promise, which the law says must be to perform something either certain to a common intent, or by a reference to something which can render it certain. In contracts which can be enforced specifically, or where damages are to be given for their non-performance, there is always a measure of damages; in actions affecting the reputation, the person, or the liberty of a man, they must depend, in some measure, on the direction of the jury. If the jury go beyond the standard, the value ascertained by evidence of the thing con- tracted for, or under its value, the court will set aside the verdict, but in the vindictive class of actions, the damages must be outrageous to justify the interference of the court, — seldom, if ever, for smallness of damages. There is a great difference between damages which can be ascertained, as in assumpsit, trover, etc., where there is a measure, and personal torts, as false imprisonment, slander, malicious prosecution, where damages are 162 FOEMATION OF CONTKACT. [Pabt II. matter of opinion. To say that nominal damages, at least, ought to be given, is taking for granted the very matter in controversy; for the legal question is, was there an actionable promise — a promise to do anything certain, or certain to a common intent, or where, by reference to anything, it would be rendered certain? The jury have negatived all this. I am therefore of opinion that there was no error in the opin- ion of the court, by which the plaintiffs have been endamaged; that the law was laid down more favorably for them than the evidence warranted. Judgment affirmed. (y) Forbearance to sue. PENNSYLVANIA COAL CO. v. BLAKE. 86 NEW YORK, 226.— 1881. Action to foreclose a mortgage. Judgment in favor of plain- tiff. Appeal from decision of the General Term of the Supreme Court affirming judgment. In March, 1873, plaintiff agreed with B. & Co. that if B. & Co. would give their notes secured by a mortgage on the separate estate of B.'s wife, the defendant, it would grant an extension of time on a debt then due from B. & Co. to plaintiff. The notes were given in pursuance of the agreement, and about three weeks later defendant executed the mortgage in question. Defendant testified that she never received any consideration for executing the mortgage, that she never requested an extension of time for B. & Co. from plaintiff, nor did she know whether or not an extension had ever been given. FoLGEB, C. J. The first point made by the appellant is, that the mortgage given by her was without consideration, and is void. It is so, that the appellant took no money consideration, nor any strictly personal benefit, for the giving of the mortgage by her. It was made for the benefit of others than her, entirely as a security for debts owing by them, and to procure for them fur- Chap. II, § 4.] CONSIDERATION. 163 ther credit and favor in business. In other words, the lands of the appellant became the surety for the liabilities of the business firm of which her husband was a member. It is so, also, that the contract of surety needs a consideration to sustain it, as well as any other contract. Bailey r. Freeman, 4 Johns. 280; Leon- ard V. Vredenburgh, 8 Id. 29. But that need not be something passing from the creditor to the surety. Benefit to the principal debtor, or harm or inconvenience to the creditor, is enough to form a consideration for the guaranty; and the consideration in that shape may be executory as well as executed at the time. McNaught v. McGlaughry, 42 N. Y. 22; 8 Johns., supra. Now here was an agreement by the plaintiEE to extend the payment of part of the debt owing by the principal debtor for a definite time, if the debtor would procure the mortgage of the appellant as a security for the ultimate payment of the amount of the debt thus extended. Sage v. Wilcox, 6 Conn. 81; Breed v. Hillhouse, 7 Id. 623. Though the actual execution of the mortgage by the appel- lant was on a day subsequent to that of the agreement between the creditor and the principal debtors, and subsequent to the dates of the extension notes, the mortgage and the notes were made in pursuance of that agreement, in consideration of it and to carry it out. The findings are full and exact on this point, and are sustained by the testimony. There is no proof that the actual delivery of the notes and mortgage was not cotemporane- ous; though the dates of the notes and the mortgage and the entry of credit in the books of the plaintiff do not correspond. All was done in pursuance of one agreement, and the plaintiff was not bound to forbearance until the mortgage was delivered. It was not until then that the agreement to forbear was fixed and the consideration of benefit to the principals was had. It was not, therefore, a past consideration. » • « « * It follows that the judgment appealed from should be aflBrmed. All concur. Judgment affirmed. 164 FORMATION OF CONTRACT. [Pabt IL FOSTER V. METTS & CO. 65 MISSISSIPPI, 77. — 1877. Action upon promissory note. Defendants demurred; demur- rer sustained. Error to the Circuit Court. Two hundred dollars belonging to the plaintiff in error, Foster, were stolen from the United States mail by a carrier employed by the defendants in error, Metts & Co., who were contractors for carrying the mail from Louisville to Artesia. At first, Metts & Co. denied any liability to Foster for the loss, but finally, upon consideration that Foster would wait a few months for payment, Metts & Co. gave to him their promissory note for the amount lost. The note not being paid at maturity, this action was brought upon it. Campbell, J. . . . In this case the money was stolen by the mail-carrier. As to that, he certainly was not the agent of the contractors for whom he was riding, and, if they were liable for his acts within the scope of his employment, they were not lia- ble for his wilful wrongs and crimes. McCoy t. McKowen, 26 Miss. 487 ; New Orleans, Jackson & Great Northern B. M. Co. v. Harrison, 48 Miss. 112; Foster v. Essex Bank, 17 Mass. 479; Wiggins v. Hathaway, 6 Barb. 632; Story on Ag., sec. 309. As the defendants in error were not liable for the money " ex- tracted " from the mail by the carrier, they did not make them- selves liable by giving their promissory note for it. It is without consideration. The compromise of doubtful rights is a suffi- cient consideration for a promise to pay money, but compromise implies mutual concession. Here there was none on the part of the payee of the note. His forbearance to sue for what he could not recover at law or in equity was not a suf&cient consideration for the note. Newell v. Fisher, 11 Smed. & M. 431; SulUvan v. Collins, 18 Iowa, 228; Palfrey v. Railroad Co., 4 Allen, 55; Allen V. Prater, 35 Ala. 169; Edwards v. Baugh, 11 Mee. & W. 641; Longridge v. Dorville, 5 Barn. & Aid. 117; 1 Pars, on Con. 440; Smith on Con. 157; 1 Add. on Con. 28, sec. 14; 1 HUl on Con. 266, sec. 20. Judgment affirmed. Chap. II. § 4.] CONSIDERATION. 165 (8) Compromise. RUSSELL V. COOK. 3 HILL (N. Y.), 504. — 1842. Error to the Onondaga common pleas. Eussell recovered judg- ment before a justice against Cook and Smith on a promissory note made by them, payable to Sanford B. Palmer or bearer, for $68.34, with interest, and bearing date April 4, 1836. The note fell due in July, 1837, and was transferred to the plaintiff after that time. The defendants insisted that the note was with- out consideration. CowEN, J. The defendants below admitted the execution of the note ; and the burthen of showing that it was without con- sideration lay on them. They accordingly proved that several years before suit brought, they undertook with Palmer & Koble to transport from Manlius to Albany certain barley in which they (Palmer & Noble) had a special property, and which they were bound to see delivered at Albany to Taylor. The defend- ants were common carriers by their boat on the canal, which, owing to its accidentally striking a stone in the canal, of which the defendants could not be perfectly aware, was broken, sunk, and the water let in upon the barley, by which it was much injured. A dispute arose between the parties whether the de- fendants were liable, and this was compromised by Palmer & Noble agreeing to discount one half of their claim, and the de- fendants agreeing to pay the other. The half which fell upon the defendants was secured by several promissory notes, of which the note in question was one. The estimate of damages was deliberately and fairly made. Palmer & Noble were guilty of no fraud; the defendants were fully aware of all the facts; and there was no mistake in the case. This is the defense, as made out by the defendants' own testimony. The court below sub- mitted to the jury whether the notes were made without consid- eration, and the jury found for the defendants. I am of opinion that the court below erred in omitting to charge the jury that the plaintiff was entitled to recover. No one would think of denying, that at least the dispute between the 166 FORMATION OF CONTRACT. [Pabt U. parties was doubtful, and that probably the law was against the defendants on the facts disclosed by their evidence. It is enough, however, that it was doubtful, and that the notes were given in pursuance of an agreement to compromise, in no way impeached for want of fairness. To show that this is so, I shall do little more than refer to Oliit. on Cont. 43, 44, ed. of 1842, and the notes, where cases are cited which refuse to open an agreement of this kind, under circumstances much stronger in favor of the defendant than exist here on the most liberal con- struction which the defense can pretend to claim. The case of O'Keson v. Barclay (2 Pennsyl. E. 531) sustained a promissory note given on the settlement of a slander suit for words not actionable. In such cases it matters not on which side the right ultimately turns out to be. The court will not look behind the compromise. Taylor v. Patrick, 1 Bibb, 168; Fisher v. May's Heirs, 2 Id. 448. It is not necessary, how- ever, in the present ease to go farther than was done in Longridge v. Dorville, 6 Barn. & Aid. 117. There the ship Carolina Matilda had run foul of the ship Zenobia in the Thames, and the former was arrested and detained by pro- cess from the admiralty to secure the payment of the damage. The agents for the owners of the Carolina Matilda stipulated with the agents for the owner of the Zenobia that, on the latter relinquishing their claim on the Carolina Matilda, the damages should be paid on due proof of them, if they did not exceed £180. The proceedings in the admiralty being with- drawn, an action was brought on the promise. The Carolina Matilda had a regular Trinity-house pilot on board when the collision took place; and there was some doubt on the law, therefore, whether the owners were liable. Held, that the com- promise being of a claim thus doubtful, the defendants were absolutely bound, without regard to the question of actual lia- bility. Abbott, C. J., said, "The parties agree to put an end to all doubts on the law and the fact, on the defendants' engag- ing to pay a stipulated sum." "The parties agreed to waive all questions of law and fact." Indeed, such is the intent of every compromise ; and the best interests of society require that such should be the effect Chap. II. § 4.] CONSIDERATION. 167 I therefore prefer putting the case on that ground, though I feel very little doubt that the defendants were liable to Palmer & Noble for the whole damages, instead of the half for which they were let off. Judgment reversed.* («) Gratuitous undertakings. THOENE V. DEAS. 4 JOHNSON (N.Y.),84. — 1809. This was an action on the case, for a nonfeasance, in not caus- ing insurance to be made on a certain vessel, called the Sea Nymph, on a voyage from New York to Camden, in North Carolina. The plaintiffs were copartners in trade, and joint owners of one moiety of a brig called the Sea Nymph, and the defendant was sole owner of the other moiety of the same vessel. The brig sailed in ballast, the 1st December, 1804, on a voyage to Camden, in North Carolina, with William Thome, one of the plaintiffs, on board, and was to proceed from that place to Europe or the West Indies. The plaintiffs and defendant were interested in the voyage, in proportion to their respective interests in the vessel. On the day the vessel sailed, a conversation took place between William Thorne, one of the plaintiffs, and the defendant, relative to the insurance of the vessel, in which W. Thorne requested the defendant that insurance might be made ; to which the defendant replied, "that he (Thorne) might make himself perfectly easy on •■ Ctrandin v. Qrandin, 49 N. J. L. 508, 514 (1887) : "The compromise of a disputed claim made bona fide is a good consideration for a promise, whether the claim be in suit, or litigation has not been actually commenced, even though it should ultimately appear that the claim was wholly unfounded — the detriment to the party consenting to a compromise, arising from the alteration in his position, forms the real consideration which gives validity to the promise. The only elements necessary to a valid agreement of com- promise are the reality of the claim made and the bona fides of the compro- mise. Cook V. Wright, 1 B. & S. 559-570 ; Callisher v. Bischoffsheim, L. R. (5 Q. B.) 449 ; Ockford v. Barelli, 25 L. T. 504 ; Miles v. N. Z. &c. Est. Co., 32 Ch. Div. 267, 283, 291, 298." See Bellows v. Sowles, 67 Vt. 164, ante, p. 110 ; Schnell v. Nell, 17 Ind. 29, ante, p. 138. 168 FORMATION OF CONTRACT. [Part U. the subject, for that tlie same should be done." About ten days after the departure of the vessel on her voyage, the defendant said to Daniel Thorne, one of the plaintiffs, "Well, we have saved the insurance on the brig." D. Thorne asked, "How so? or whether the defendant had heard of her arrival? " To which the defendant answered, " No ; but that, from the winds, he presumed that she had arrived, and that he had not yet effected any insur- ance." On this, D. Thorne expressed his surprise, and observed, " that he supposed that the insurance had been effected immedi- ately, by the defendant, according to his promise, otherwise he would have had it done himself, and that, if the defendant would not have the insurance immediately made, he would have it effected." The defendant replied, that "he (D. Thorne) might make himself easy, for he would that day apply to the insurance ofB.ces, and have it done." The vessel was wrecked on the 21st December, on the coast of North Carolina. No insurance had been effected. No abandon- ment was made to the defendant by the plaintiffs. The defendant moved for a nonsuit on the ground that the promise was without consideration and void; and that, if the promise was binding, the plaintiffs could not recover, without a previous abandonment to the defendant. These points were reserved by the judge. A verdict was taken for the plaintiffs, for one-half of the cost of the vessel, with interest, subject to the opinion of the court on the points reserved. Kent, C. J., delivered the opinion of the court. The chief objection raised to the right of recovery in this case is the want of a consideration for the promise. The offer, on the part of the defendant, to cause insurance to be effected, was perfectly volun- tary. Will, then, an action lie, when one party entrusts the performance of a business to another, who undertakes to do it gratuitously, and wholly omits to do it? If the party who makes this engagement enters upon the execution of the business, and does it amiss, through the want of due care, by which damage ensues to the other party, an action will lie for this misfeasance. But the defendant never entered upon the execution of his un- dertaking, and the action is brought for the nonfeasance. Sir Chap. n. §4.] CONSIDERATION. 169 William Jones, in his Essay on the Law of Bailments, considers this species of undertaking to be as extensively binding in the English law as the contract of mandatum in the Eoman law; and that an action will lie for damage occasioned by the non- performance of a promise to become a mandatary, though the promise be purely gratuitous. This treatise stands high with the profession, as a learned and classical performance, and I regret that, on this point, I find so much reason to question its accuracy. I have carefully examined all the authorities to which he refers. He has not produced a single adjudged case, but only some dicta (and those equivocal) from the Year Books, in support of his opinion; and was it not for the weight which the authority of so respectable a name imposes, I should have supposed the question too well settled to admit of an argument. A short review of the leading cases will show that, by the common law, a mandatary, or one who undertakes to do an act for another without reward, is not answerable for omitting to do the act, and is only responsible when he attempts to do it, and does it amiss. In other words, he is responsible for a mis- feasance, but not for a nonfeasance, even though special damages are averred. Those who are conversant with the doctrine of man- datum in the civil law, and have perceived the equity which supports it and the good faith which it enforces, may, perhaps, feel a portion of regret that Sir William Jones was not successful in his attempt to engraft this doctrine, in all its extent, into the English law. I have no doubt of the perfect justice of the Eoman rule, on the ground that good faith ought to be observed, because the employer, placing reliance upon that good faith in the mandatary, was thereby prevented from doing the act himself, or employing another to do it. This is the reason which is given in the Institutes for the rule: Mandatum non suscipere cuilibet liberum est; susceptum autem consummandum est, aut quamprimum renunciandum, ut per semetipsum aut per alium, eandem rem man- dator exequatur. Inst. lib. 3, 27, 11. But there are many rights of moral obligation which civil laws do not enforce, and are, therefore, left to the conscience of the individual, as rights of imperfect obligation; and the promise before us seems to have been so left by the common law, which we cannot alter, and which we are bound to pronounce. 170 FORMATION OF CONTRACT. [Part U. The earliest case on this subject is that of Watton v. Brinth (Year Book, 2 Hen. IV. 3 6), in which it appears that the defend- ant promised to repair certain houses of the plaintiff, and had neglected to do it, to his damage. The plaintiff was nonsuited, because he had shown no covenant; and Brincheley said, that if the plaintiff had counted that the thing had been commenced, and afterwards, by negligence, nothing done, it had been otherwise. Here tlie court at once took the distinction between nonfeasance and misfeasance. No consideration was stated and the court required a covenant to bind the party. In the next case, 11 Hen. IV. 33 a, an action was brought against a carpenter, stating that he had undertaken to build a house for the plaintiff within a certain time, and had not done it. The plaintiff was also nonsuited, because the undertaking was not binding without a specialty; but, says the case, if he had undertaken to build the house, and had done it illy or negligently, an action would have lain, without deed. Brooke (Action sur le Case, pi. 40) in citing the above case, says, that " it seems to be good law to this day ; wherefore the action upon the case which shall be brought upon the assumption, must state that for such a sum of money to him paid, etc., and that in the above case, it is assumed, that there was no sum of money, therefore it was a nudum pactum." The case of 3 Hen. VI. 36 6 is one referred to, in the Essay on Bailments, as containing the opinion of some of the judges, tliat such an action as the present could be maintained. It was an action against Watkins, a mill-wright, for not building a mill according to promise. There was no decision upon the question, and in the long conversation between the counsel and the court, there was some difference of opinion on the point. The counsel for the defendant contended that a consideration ought to have been stated; and of the three judges who expressed any opinion, one concurred with the counsel for the defendant, and another (Babington, C. J.) was in favor of the action, but he said noth- ing expressly about the point of consideration, and the third (Cokain, J.) said, it appeared to him that the plaintiff had so declared, for it shall not be intended that the defendant would build the mill for nothing. So far is this case from giving coun- Chap. II. § 4.] CONSIDERATION. 171 tenance to the present action, that Brooke (Action sur le Case, pi. 7, and Contract, pi. 6) considered it as containing the opinion of the court, that the plaintiffs ought to have set forth what the miller was to have for his labor, for otherwise it was a nude pact^ and in Coggs v. Bernard, Mr. Justice Gould gave the same exposition of the case. The general question whether assumpsit would lie for a non- feasance agitated the courts in a variety of cases afterwards, down to the time of Henry VII. 14 Hen. VI. 18 b, pi. 58 ; 19 Hen. VI. 49 a, pi. 5; 20 Hen. VL 34 a, pi. 4; 2 ffen. VIL 11, pi. 9; 21 Sen. VII. 41 a, pi. 66. There was no dispute or doubt, but that an action upon the case lay for a misfeasance in the breach of a trust undertaken voluntarily. The point in controversy was, whether an action upon the case lay for a nonfeasance, or non- performance of an agreement, and whether there was any remedy where the party had not secured himself by a covenant or specialty. But none of these cases, nor, as far as I can discover, do any of the dicta of the judges in them go so far as to say, that an assumpsit would lie for the non-performance of a promise, without stating a consideration for the promise. And when, at last, an action upon the case for the non-performance of an under- taking came to be established, the necessity of showing a con- sideration was explicitly avowed. Sir William Jones says, that " a case in Brooke, made complete from the Year Book to which he refers, seems directly in point." The case referred to is 21 Hen. VII. 41, and it is given as a loose note of the reporter. The chief justice is there made to say, that if one agree with me to build a house by such a day, and he does not build it, I have an action on the case for this nonfeasance, equally as if he had done it amiss. Nothing is here said about a consideration; but in the next instance which the judge gives of a nonfeasance for which an action on the case lies, he states a consideration paid. This case, however, is better reported in Keilway, 78, pi. 6, and this last report must have been overlooked by the author of the Essay. Frowicke, C. J., there says, "that if I covenant with a carpenter to build a house, and pay him 201. to build the house by a certain day, and he does not do it, I have a good action upon the case, by reason of the payment of my money; 172 FORMATION OF CONTRA.CT. [Part II. and without payment of the money in this case, no remedy. And yet, if he make the house in a bad manner, an action upon the case lies ; and so for the nonfeasance, if the money be paid, action upon the case lies." There is, then, no just reason to infer, from the ancient authori- ties, that such a promise as the one before us is good, without showing a consideration. The whole current of the decisions runs the other way, and, from the time of Henry VII. to this time, the same law has been uniformly maintained. The doctrine on this subject, in the Essay on Bailments, is true, in reference to the civil law, but is totally unfounded in reference to the English law; and to those who have attentively examined the head of Mandates, in that Essay, I hazard nothing in asserting that that part of the treatise appears to be hastily and loosely written. It does not discriminate well between the cases ; it is not very profound in research, and is destitute of true legal precision. But the counsel for the plaintiffs contended, that if the general rule of the common law was against the action, this was a com- mercial question, arising on a subject of insurance, as to which a different rule had been adopted. The ease of Wilkinson v. Cover- dale (1 Esp. Eep. 75) was upon a promise to cause a house to be insured, and Lord Kenyon held, that the defendant was answer- able only upon the ground that he had proceeded to execute the trust, and had done it negligently. The distinction, therefore, if any exists, must be confined to cases of marine insurance. In Smith V. Lascelles (2 Term Eep. 188) Mr. Justice BuUer said it was settled law, that there were three cases in which a merchant, in England, was bound to insure for his correspondent abroad. 1. Where the merchant abroad has effects in the hands of his correspondent in England, and he orders him to insure. 2. Where he has no effects, but, from the course of dealing between them, the one has been used to send orders for insurance, and the other to obey them. 3. Where the merchant abroad sends bills of lading to his correspondent in England, and engrafts on them an order to insure, as the implied condition of acceptance, and the other accepts. Chap. II. § i.] CONSIDERATION. 173 The case itself, -whicli gave rise to these observations, and the two cases referred to in the note to the report, •were all instances of misfeasance) in proceeding to execute the trust, and in not executing it well. But I shall not question the application of this rule, as stated hy Buller, to cases of nonfeasance, for so it seems to have been applied in Webster v. Be Tastet, 7 Term Eep. 157. They have, however, no application to the present case. The defendant here was not a factor or agent to the plain- tiffs, within the purview of the law merchant. There is no color for such a suggestion. A factor, or commercial agent, is employed by merchants to transact business abroad, and for which he is entitled to a commission or allowance. Malyne, 81 ; Beawes, 44. In every instance given, of the responsibility of an agent for not insuring, the agent answered to the definition given of a factor, who transacted business for his principal, who was absent, or resided abroad; and there were special circumstances in each of these cases, from which the agent was to be charged ; but none of those circumstances exist in this case. If the defendant had been a broker, whose business it was to procure insurances for others, upon a regular commission, the case might, possibly, have been different. I mean not to say, that a factor or commercial agent cannot exist, if he and his principal reside together at the same time, in the same place; but there is nothing here from which to infer that the defendant was a factor, unless it be the business he assumed to perform, viz., to procure the insurance of a vessel, and that fact alone will not make him a factor. Every person who undertakes to do any specific act, relating to any subject of a commercial nature, would equally become, quoad hoc, a factor; a proposition too extravagant to be maintained. It is very clear, from this case, that the defendant undertook to have the insurance effected, as a voluntary and gratuitous act, without the least idea of entitling himself to a commission for doing it. He had an equal interest in the vessel with the plaintiffs, and what he undertook to do was as much for his own benefit as theirs. It might as well be said, that whenever one partner promises his copartner to do any particular act for the common benefit, he becomes, iu that instance, a factor to his copartner, and entitled to a commission. The plaintiffs have, then, failed 174 FORMATION OF CONTEACT. [Pakt II. in their attempt to bring this case within the range of the decis- ions, or within, any principle which gives an action against a commercial agent, who neglects to insure for his correspondent. Upon the whole view of the case, therefore, we are of opinion that the defendant is entitled to judgment. Judgment for the defendant.* c. Third test of reality. Does the promisee do, forbear, suffer, or promise more than that to which he is legally bound f (a) Delivering property wrongfully mthheld. TOLHUEST V. POWEES. 133 NEW YORK, 460. — 1892. Appeal from judgment of the General Term of the Supreme Court, which af&rmed a judgment in favor of defendant, entered upon the report of a referee. This action was brought to recover a balance of an account originally due plaintiffs from one Clinton M. Ball for services in the construction and fitting of a dynamo and other electrical appliances, which it was claimed defendant had agreed to pay. Finch, J. We agree with the prevailing opinion of the Gen- eral Term that there was no consideration to support the promise of Powers to pay Ball's debt to the plaintiffs. The latter origi- nally constructed a dynamo for which Ball became indebted to them, and after all payments he remained so indebted when the machiue was ready for delivery. The builders, of course, had a lien upon it for the unpaid balance, but waived and lost their lien by a delivery to Ball without payment. He, being then the owner and holding the title free from any incumbrance, sold the dynamo to Crane on a contract apparently contingent upon the successful working of the machine. It did not work success- fully and was sent back to plaintiffs to be altered, with a view of correcting its imperfections. At this point occurred the first 1 See McCauley v. Davidson, 10 Minn. 418 ; Melbourne ^e. E. Co. v. Louisville i-c. S. Co., 88 Ala. 443. Chap. II. § 4.] CONSIDERATION. 175 intervention of the defendant Powers. He had not then obtained, so far as the case shows, any interest in the machine, and the complete title was either in Crane or Ball, or in both; but when the plaintiffs hesitated about entering upon the new work until their charges for it should be made secure, Powers agreed to pay them. The true character of that promise is immaterial, for, when the work was done, Powers did pay according to his con- tract. Thereafter, Ball and Powers requiring a delivery of the dynamo, the plaintiffs undertook or threatened to retain the possession till the original debt should be paid. That they had no right to do. Their primary lien was lost by the delivery, and they acquired no new one by reason of the repairs which were paid for. Such refusal to surrender the possession was an abso- lute wrong without any color of right about it. After demand their refusal was a trespass, and according to their own evidence the sole conside|:ation for the promise which they claim that Powers made to pay the old debt of Ball was their surrender of possession. To that they were already bound, and parted with nothing by the surrender. They gave up no right which they had against any one, but extorted the promise by a threat of what would .have been, if executed, a wrongful conversion. Doing what they were already bound to do furnished no consideration for the promise. It is said, however, that Ball made no demand, and until he did, the plaintiffs were not bound to deliver the possession, and that the delivery was to Powers and not to Ball. But there was certainly a request to ship the machine and so part with the possession, and both the request and the shipment were with the concurrence of Ball. It was that very request that brought up the subject of the old debt, and Ball stood by, plainly assenting, at least by omitting any dissent or objection. The shipment of Powers by name made it none the less a delivery to Ball, whose concurrrence is explicitly found. Surely, after what happened, the latter could not have maintained an action for conversion on the ground that there had been no delivery to him. The undis- puted fact is that the plaintiffs were seeking to withhold a delivery to the owner without the least right of refusal. There was no harm to plaintiffs and no benefit conferred on Powers. 176 FORMATION OK CONTRACT. [Pabt II. The former parted with nothing of their own, and the latter gained nothing, for the shipment to him was a delivery to Ball, the owner, since made with his concurrence, and Powers obtained no right or interest in the property as the result of the delivery. He simply took it, if he took at all, which is doubtful, as the agent or bailee of the owner, and acquired no right in it until a later period. Until the mortgage made subsequently, his advances for repairs constituted only an unsecured debt against Ball. The turning point of the appellant's argument is the unwarranted assumption that the plaintiffs agreed to deliver, and did deliver, the dynamo to one whom they knew not to be the owner without the assent of Ball, who was the owner, but who, nevertheless, stood by and made no objection. No fair construction of the evidence will sustain the appellant's theory. The judgment should be aflSrmed, with costs. All concur. Judgment affirmed. (/8) Performance of public duty. SMITH V. WHILDIK 10 PENNSYLVANIA STATE, 39. — 1848. In error from the Common Pleas of Philadelphia. Assumpsit on the common counts. The plaintiff, who was a constable in Philadelphia, proved that the defendant had offered him a reward of $100 for the arrest of one M. Crossin, against whom warrants had been issued on a charge for obtaining goods under false pretenses. CouLTEE, J. There was no consideration for the promise, and the court below therefore misconceived the law. It is the duty of a constable to pursue, search for, and arrest offenders against whom criminal process is put into his hands. It is stated in Com. Digest (title Justice of the Peace, B. 79) that the duty of a constable requires him to do his utmost to discover, pursue, and arrest felons. The office of constable is created not for the private emolument of the holder, but to conserve the public peace, and to execute the criminal law of the country. He is Chap. U. § 4.] CONSIDERATION. 177 not the agent or employee of the private prosecutor, but the minister of the law, doing the work of the public, which he is bound to do faithfully for the fee prescribed by law, to be paid as the law directs. And it would be against public policy as well as against law to hold otherwise. There are things which a constable is not officially bound to do, such as to procure evidence, and the like, and for this he may perhaps be allowed to contract. And this is the full extent of the principle in the case cited from 11 Ad. and El. 856. But it has been held that even a sailor cannot recover for extra work on a promise by the master to pay for extra work in managing the ship in peril, the sailor being bound to do his utmost inde- pendently of any fresh contract. Stilk v. Myrick, 2 Camp; 317, and the cases there cited. It would open a door to profligacy, chicanery, and corruption, if the officers appointed to carry out the criminal law were per- mitted to stipulate by private contract ; it would open a door to the escape of offenders by culpable supineness and .indifference on the part of those officers, and compel the injured persons to take upon themselves the burden of public prosecutions. It ought not to be permitted. Constables must do their utmost to discover, pursue, and arrest offenders within their township, district, or jurisdiction, without other fee or reward than that given by the law itself. ■ Judgment reversed, and a venire de novo awarded.* (y) Promise to perform existing contract. COYNER V. LYNDE. 10 INDIANA, 282. — 1858. Hanna, J. The appellant was the plaintiff, and the appellees the defendants. The plaintiff was a contractor with the Eioh- 1 In McCandless v. AlUg.han^ Bessemer Steel Co. (152 Pa. St. 139 [189a],) a sheriff recovered money expended by him for expense of deputies selected by him at request of defendants, for their special benefit, and upon the faith of their promise to make good the amount thus advanced. N 178 FORMATION OF CONTRACT. [Part II. mond and Newcastle Railroad Company, for the construction of a portion of said road. The defendants undertook, and agreed with the plaintiff, to complete a portion of that contract, to wit, to grade the road, for which they were to receive from the com- pany the same rates per yard, etc., that the plaintiff was to have received, and said defendants were to pay the plaintiff a certain portion of the sum so received, to wit, so much per yard, etc., as a premium, or for the privilege of said contract. This suit is for that sum, which was to have been thus paid by defendants to plaintiff. The court overruled the demurrer to the sixth paragraph of the defendants' answer, and gave and refused certain instructions directed to the points involved in that paragraph. Of these rulings the plaintiff complains. The sixth paragraph is, in substance, that after the plaintiff and defendants had entered into the agreement sued on, it was ascertained that the prices at which plaintiff had undertaken with the company to do the work were greatly inadequate ; that it would be a losing business to prosecute the work ; that upon such discovery, the defendants determined to abandon the con- tract, and leave the plaintiff to perform it; that the plaintiff, knowing he would suffer loss to complete the same himself at the prices, " in view of said facts, and to induce the defendants to go on with said work, and not throw the same on the hands of said plaintiff, he, said plaintiff, agreed that if said defendants would agree to continue to prosecute said work to final comple- tion, and procure additional and extra pay from said company, which, with the amount agreed to be paid plaintiff, would enable them to complete said work, and save him from prosecuting the same, he, the said plaintiff, then and there agreed to release and acquit them from said payment," etc. ; that relying on this prom- ise, and an agreement of the company to pay them an additional compensation, they completed said work. It is insisted by the plaintiff that there was not, nor is there alleged to be, any consideration for this new promise, and it was therefore void ; whilst, by the defendants, it is argued that the contract was, in effect, abandoned, and the work afterwards re- sumed because of the new promise, and that such resumption Chap. n. § 4.] CONSIDERATION. 179 of work was a sufficient consideration for the new agreement to pay a different sum, to wit, the whole, instead of a part, of the original contract price. Whether the contract between the plaintiff and the defendants was abandoned or not by the defendants, was a question to which the attention of the jury was fairly called by the instructions, and the law stated to them upon such a state of facts, if found. Under these circumstances, we cannot disturb their finding, especially as the whole evidence is not in the record. Mills v. Biley, 7 Ind. E. 138. Trom the verdict of the jury, it is evident that they must have come to the conclusion that the contract had been abandoned. If it was abandoned, the plaintiff had his election, either to sue the defendants for non-performance, or to obtain the completion of the work by a new arrangement. If, in making such new arrange- ment or agreement, new or additional promises were made to the defendants dependent upon the completion of the work, and the defendants, in consideration of such promises, completed the work, we do not see anything to prevent such promises from being binding. Munroe v. Perkins, 9 Pick. 302 ; 14 Johns. 330. Such new agreement might embrace in its terms, and definitely or by legitimate implication dispose of, any right of action which the plaintiff had, under the previous contract, against the defendants for failure to perform, or for portions of the sum due for work done, so far as it had progressed. 4 Ind. B. 75; 7 Id. 597. Whether a new agreement was made, and if so, whether the de- fendants were absolved thereby from the payment of the bonus previously agreed upon, were also questions of fact for the jury, and were, so far as we can see, properly submitted to them, and we cannot disturb their verdict thereon. In the case cited in 14 Johns., the plaintiff undertook, by agree- ment under seal, to construct a certain cart-way for the sum of $900. After progressing with the work, he ascertained that the price was inadequate, and determined to abandon the contract ; whereupon the defendant agreed verbally to release him from the ' contract and pay him by the day if. he would complete the work, which he did ; and in a suit for work and labor, the second contract was considered binding. So the case in 9 Pickering was 180 FORMATION OF CONTBACT. [Part II. for work and labor, etc., in the erection of a hotel. Defense, a special contract, etc. Eeply, waiver of the contract, and new promise, etc. And although, so far as can be gathered from the opinion, the evidence of an abandonment of the original contract was not by any means strong, yet the verdict of the jury is ad- verted to as settling that question. See also 7 Ind. R. 138. As the evidence is not in the record, the presumption which we have often decided would arise in reference to instructions given and refused, would prevent us from saying that the instructions given in this case were improper ; and so, also, as to the ruling of the court in refusing those that were asked. 9 Jnd. S. 115 ; Id. 230; Id. 286 ; 8 Id. 502; 7 Id. 531. Per Curiam. The judgment is affirmed with costs.* ENDEISS V. BELLE ISLE ICE CO. 49 MICHIGAN, 279. — 1882. * Assumpsit. PlaintifE brings error. Graves, C. J. The ice company agreed with plaintiff, who is a brewer, to furnish him with the ice he would require for his brewery during the season of 1880 at f 1.75 per ton, or in case of scarcity, $2 per ton. The parties proceeded under the con- tract until May, at which time the ice company refused further performance and so notified the plaintiff. Shortly afterwards the parties arranged that the ice company should furnish ice at $5 per ton; but this was soon modified by reducing the price to $4 per ton. This arrangement, it seems, was carried -out. The plaintiff, however, brought this suit to recover damages for the breach of the original contract, and his contention was that when the ice company broke that contract the law made it his duty to use reasonable efforts to mitigate the damages, and hence to provide himself with ice on the best practicable terms, and without regard to the individuality of the party of whom it could or might be obtained, and that acting in accord- 1 Accord : Stewart v. Keteltas, 36 N. Y. 388 ; Thomas v. Barnes, 156 Mass. 581 ; Osborne v. 0''Beilly, 42 N. J. Eq. 467 ; Moore v. Detroit Loc. Works, 14 Mich. 266. Chap. II. § 4.] CONSIDERATION. 181 ance with that duty, he made a new contract with the ice com- pany, and one wholly distinct from that which the company refused to perform, at $4, and without waiving or impairing his right to hold the ice company for its violation of the original contract. The ice company claimed, on the other hand, that the second arrangement was merely a modification by consent of the first, and that it left open no ground of action on account of the refusal of the company to perform the contract as it was originally made. The trial judge was of opinion that the evidence was all one way, and that it afforded no room for argument in favor of the position of the plaintiff, and he ordered a verdict for the de- fendant. We are not able to concur in this view. We think the circumstances raised a question for the jury, • and that it should have been left to them to construe and weigh the evidence, and at length decide between the conflicting theories. Goebel v. Linn (47 Mich. 489) has no application. The suit there was on a note, and the question was on the exist- ence of legal consideration, and whether the defense of duress was compatible with admitted facts. The judgment should be reversed with costs and a new trial granted. The other Justices concurred.* LINGENFELDER et al. Executors v. WAINWEIGHT BREWING CO. 103 MISSOURI, 578. — 1890. Appeal from St. Louis City Circuit Court. Action by the executors of Jungenfeld for services performed by him. Jungenfeld, an architect, was employed by defendants to plan and superintend the construction of brewery buildings.- He was also president of the Empire Refrigerating Company, and largely interested therein. The De La Vergne Ice Machine Company was a competitor in business. Against Jungenfeld's * See Sogers v. Sogers, 139 Mass. 440. Cf. Widiman v. Brown, 88 Mich. 241. 182 FORMATION OF CONTRACT. [Part II. ■wishes Wainwright awarded the contract for the refrigerating plant to the De La Vergne Company. The brewery was at that time in process of erection and most of the plans were made. When Jungenfeld heard that the contract was awarded, he took his plans, called off his superintendent on the ground, and notified Wainwright that he would have nothing more to do with the brewery. The defendants were in great haste to have their new brewery completed for divers reasons. It would be hard to find an architect in Jungenfeld's place, and the making of new plans and arrangements when another architect was found would involve much loss of time. Under these circum- stances Wainwright promised to give Jungenfeld five per cent on the cost of the De La Vergne ice machine if he would resume work. Jungenfeld accepted, and fulfilled the duties of superin- tending architect till the completion of the brewery. Gantt, p. J. ... Was there any consideration for the prom- ise of Wainwright to pay Jungenfeld five per cent on the refrig- erator plant? If there was not, plaintiff cannot recover the $3449.75, the amount of that commission. The report of the referee, and the evidence upon which it is based, alike show that Jungenfeld's claim to this extra compensation is based upon Wainwright' s promise to pay him this sum to induce him, Jun- genfeld, to complete his original contract under its original terms. It is urged upon us by respondents that this was a new con- tract. New in what? Jungenfeld was bound by his contract to design and supervise this building. Under the new promise he was not to do anything more or anything different. What bene- fit was to accrue to Wainwright ? He was to receive the same service from Jungenfeld under the new that Jungenfeld was bound to tender under the original contract. What loss, trouble, or inconvenience could result to Jungenfeld that he had not already assumed? No amount of metaphysical reasoning can change the plain fact that Jungenfeld took advantage of Wain- wright's necessities, and extorted the promise of five per cent on the refrigerator plant, on the condition of his complying with his contract already entered into. Nor had he even the flimsy pre- text that Wainwright had violated any of the conditions of the contract on his part. Chap. II. § 4.] CONSIDERATION. 183 Jungenfeld himself put it upon the simple proposition, that " if he, as an architect, put up the brewery, and another company put up the refrigerator machinery, it would be a detriment to the Empire Refrigerating Company," of which Jungenfeld was president. To permit plaintiff to recover under such circum- stances would be to offer a premium upon bad faith, and invite men to violate their most sacred contracts, that they may profit by their own wrong. "That a promise to pay a man for doing that which he is already under contract to do is without consideration," is con- ceded by respondents. The rule has been so long imbedded in the common law and decisions of the highest courts of the various States that nothing but the most cogent reasons ought to shake it. Harris v. Carter, 3 E. & B. 559; StilJc V. Myrick, 2 Camp. 317; 1 Chitty on Contracts (11 Amer. ed.), 60; Bartlett v. Wyman, 14 Johns. 260; Reynolds v. Nugent, 25 Ind. 328; Ayres v. Railroad, 52 Iowa, 478; Festerman v. Parker, 10 Ired. 474; MlinY. Miller, 78 Ky. 371; Sherwin & Co. v. Brig- ham, 39 Ohio St. 137; Overdeer v. Wiley, 30 Ala. 709; Jones v. Miller, 12 Mo. 408; Kick v. Merry, 23 Mo. 72; Laidlou v. Hatch, 75 111. 11; Wimer v. Overseers of the Poor, 104 Penn. St. 317; Cobb V. Cowdery, 40 Vermont, 25; Vanderbilt v. Schreyer, 91 N. Y. 392. But " it is carrying coals to New Castle " to add authorities on a proposition so universally accepted and so inherently just and right in itself. The learned counsel for respondents do not con- trovert the general proposition. Their contention is, and the Circuit Court agreed with them that, when Jungenfeld declined to go further on his contract, the defendant then had the right to sue for damages, and not having elected to sue Jungenfeld, but having acceded to his demand for the additional compensation, defendant cannot now be heard to say his promise is without consideration. While it is true Jungenfeld became liable in damages for the obvious breach of his contract, we do not think it follows that defendant is estopped from showing its promise was made without consideration. It is true that as eminent a jurist as Judge Cooley, in Goebel V. lAnn (47 Michigan, 489), held that an ice company which had 184 FORMATION OF CONTRACT. [Pabt II. agreed to furnisli a brewery with all the ice they might need for their business from November 8, 1879, until January 1, 1881, at $1.75 per ton, and afterwards in May, 1880, declined to deliver any more ice unless the brewery would give it f 3 per ton, could recover on a promissory note given for the increased price. Pro- found as is our respect for the distinguished judge who delivered that opinion, we are still of the opinion that his decision is not in accord with the almost universally accepted doctrine and is not convincing, and certainly so much of the opinion as holds that the payment by a debtor of a part of his debt then due would constitute a defense to a suit for the remainder is not the law of this State, nor do we think of any other where the com- mon law prevails. The case of Bishop v. Busse (69 111. 403) is readily distinguisha- ble from the case at bar. The price of brick increased very con- siderably, and the owner changed the plan of the building so as to require nearly double the number; owing to the increased price and change in the plans, the contractor notified the party for whom he was building, that he could not complete the house at the original prices, and, thereupon, a new arrangement was made, and it is expressly upheld by the court on the ground that the change in the buildings was such a modification as necessi- tated a new contract. Nothing we have said is intended as denying parties the right to modify their contracts, or make new contracts, upon new or different considerations and binding them- selves thereby. What we hold is that, when a party merely does what he has already obligated himself to do, he cannot demand an additional compensation therefor, and although by taking advantage of the necessities of his adversary he obtains a promise for more, the law will regard it as nudum pactum, and will not lend its process to aid in the wrong. So holding, we reverse the judgment of the Circuit Court of St. Louis, to the extent that it allow the plaintiffs below, respond- ents here, the sum of $3449.76, the amount of commission at five per cent on the refrigerator plant; and, at the request of both sides, we proceed to enter the judgment here, which, in our opinion, the Circuit Court of St. Louis should have entered, and Chap. II. § i.] CONSIDERATION. 185 accordingly it is adjudged that the report of the referee be in all things approved, and that defendant have and recover of plaintiffs as executors of Edmund Jungenfeld the sum of $1492.17 so found by the referee with interest from March 9, 1887. All the judges of this division concur.* JOHNSON'S ADM'R v. SELLEES' ADM'B, 33 ALABAMA, 266. — 1868. Appeal from the Circuit Court of Wilcox. Johnson contracted to teach school at Camden, the trustees of the school understanding that he also engaged to bring his wife with him as a teacher. Johnson contended that he did not con- sider that he had made a contract to bring her. The evidence tended to show that thereafter Sellers agreed to pay Johnson $2500 if he would bring Mrs. Johnson with him to teach at Camden. Walker, J. The counsel for the appellant only contends, that the first, fourth, ninth, and tenth charges given are errone- ous ; and we will, therefore, confine our attention to them. Upon the first charge it is not necessary that we should pass, as the question made upon it will not probably again arise. (1.) The court erred in giving the fourth charge. The contract- ing parties are not bound beyond the stipulations of the contract. One of the parties is not bound to perform an act, not within the stipulations of the contract, because it was understood by the other party that he would perform it, and he knew of that under- standing. The effect of the charge was, to hold Johnson bound to bring his wife with him, although he did not contract to do so, because it was known to him that the trustees understood that he was to bring her with him to teach in the school. In the giving of that charge the court erred. Sanford v. Howard, 29 Ala. 684. (2.) The ninth and tenth charges assert the proposition, that if Johnson contracted to bring and associate his wife with him in teaching the school, and then refused to comply with that con- tract, a promise by Sellers to give him 1$25'00, in order to induce » See Goldsborough v. Gable, 140 111. 269. 186 FORMATION OF CONTKACT. [Part U. him to comply, would be without consideration. In our judg- ment, these charges are correct. Johnson, by his contract, was legally bound to bring his wife to teach in the school, if the con- tract was such as the charge supposes. He had no right to violate that contract, and compensate the injured party in damages. It is true, the law would not interpose to compel the ■performance of the contract; but this is not because he had a right to violate his contract, but because the law supposes the injury done by the violation of it can be sufSciently compen- sated in damages. A man may commit a trespass, for which the law would merely give an action to recover damages ; but it does not therefore follow, that he had a right to commit the trespass, being responsible for the damages, or that a promise made to induce him either to commit or not to commit it would be valid. Benfro v. Heard, 14 Ala. 23. If two parties make a contract, one of them may waive the performance of the contract by the other, and assume some new and additional obligation as the consideration of the performance by the other. Such obligation would be binding. Within this principle fall the cases of Stoudenmeier v. Williamson, 29 Ala. 558; Munroe v. Perkins, 9 Pick. 298; and Lattimore V. Harsen, 14 Johns. 330 ; also, Spangler v. Springer, 22 Penn. St. R. 454; Whiteside v. Jennings, 19 Ala. 784; Thom- ason V. Dill, 30 Ala. 444. Those cases rest upon the ground, that it is competent for the parties to a contract to modify or rescind it, or to waive their rights growing out of it as origi- nally made, and engraft upon it new terms. Here, while there is a subsisting contract with the trustees, and a subsisting obliga- tion to perform it, the proposition of the appellant is, that a promise by a third party to induce its performance, or rather to prevent its breach, was supported by a valid consideration. We do not think the law so regards such a promise. We deem it proper to remark, that the testimony found in the bill of exceptions does not conclusively show whether Johnson's contract was to bring his wife to teach in the school with him; and that that question of fact should be left to the determination of the jury upon the evidence. The court could not assume that the resolution for the election of Johnson as principal on the Chap. II. § 4.] CONSIDEEATION. 187 17th August, 1850, contains all the terms of the contract. The question, what was the contract, must be left to the decision of the jury, upon that and the other evidence in the case. The judgment of the court below is reversed, and the cause is remanded.^ (8) Payment of smaller sum in satisfaction of larger. JAFFRAY V. DAVIS. 124 NEW YORK, 164. — 1891. PoTTEE, J. The facts found by the trial court in this case were agreed upon. They are simple and present a familiar ques- tion of law. The facts are that defendants were owing plaintiffs on the 8th day of December, 1886, for goods sold between that date and the May previous at an agreed price, the sum of $7714.37, and that on the 27th of the same December, the defendants deliv- ered to the plaintiffs their three promissory notes, amounting in the aggregate to three thousand four hundred and sixty-two twenty-four one-hundredths dollars secured by a chattel mortgage on the stock, fixtures, and other property of defendants, located in East Saginaw, Michigan, which said notes and chattel mort- gage were received by plaintiffs under an agreement to accept same in full satisfaction and discharge of said indebtedness. "That said notes have all been paid and said mortgage dis- charged of record." The question of law arising from these facts and presented to this court for its determination is whether such agreement, with full performance, constitutes a bar to this action, which was brought after such performance to recover the balance of such indebtedness over the sum so secured and paid. One of the elements embraced in the question presented upon this appeal is, viz., whether the payment of a sum less than the amount of a liquidated debt under an agreement to accept the same in satisfaction of such debt forms a bar to the recovery of ^ Accord : Davenports. First Congregational Society, 33 Wis. 387 ; Schuler v. Myton, 48 Kans. 282; Brownlee v. Lowe, 117 Ind. 420; Bobinson v. Jetoett, 116 N. Y. 40. 188 FORMATION OF CONTRACT. [Part II. the balance of the debt. This single question was presented to the English court in 1602, when it was resolved (if not decided) in Pinnel's case (5th Co. E. 117) "that payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole," and that this is so, although it was agreed that such payment should satisfy the whole. This simple question has since arisen in the English courts and in the courts of this country in almost numberless instances, and has received the same solution, notwithstanding the courts, while so ruling, have rarely failed, upon any recurrence of the question, to criti- cise and condemn its reasonableness, justice, fairness, or honesty. No respectable authority that I have been able to find has, after such unanimous disapproval by all the courts, held otherwise than as held in Pinnel's case, supra, and Cumber v. Wane, 1 Str. 426. Foakes v. Beer, L. R. 9 App. Cas. 605; 36 English Reports, 194; Goddard v. O'Brien, L. R. 9 Q. B. Div. 37; Vol. 21, Am. Law Register, 637, and notes. The steadfast adhesion to this doctrine by the courts in spite of the current of condemnation by the individual judges of the court, and in the face of the demands and conveniences of a much greater business and more extensive mercantile dealings and operations, demonstrates the force of the doctrine of stare decisis. But the doctrine of stare decisis is further illustrated by the course of judicial decisions upon this subject; for while the courts still hold to the doctrine of the Pinnel and Cumber v. Wane cases, supra, they have seemed to seize with avidity upon any consideration to support the agreement to accept the lesser sum in satisfaction of the larger, or in other words, to extract if possible from the circumstances of each case a consideration for the new agreement, and to substitute the new agreement in place of the old, and thus to form a defense to the action brought upon the old agreement. It will serve the purpose of illustrating the adhesion of the court to settled law and at the same time enable us perhaps more satisfactorily to decide whether there was a good consideration to support the agreement in this case, to refer to the consideration, in a few of the numerous cases, which the courts have held to be sufficient to support the new agreement. Lord Blackburn said in his opinion in Foakes v. Beer, supra, Chap. II. § 4.] CONSIDERATION. 189 and while maintaining the doctrine, " that a lesser sum cannot be a satisfaction of a greater sum," "but the gift of a horse, hawk or robe, etc., in satisfaction is good," quite regardless of the amount of the debt. And it was further said by him in the same opinion, " that payment and acceptance of a parcel before the day of payment of a larger sum would be a good satisfaction in regard to the circumstance of time," "and so if I am bound in twenty pounds to pay you ten pounds at Westminster, and you request me to pay you five pounds at the day at York, and you will accept it in full satisfaction for the whole ten pounds, it is a good satisfaction." It was held in Goddard v. O'Brien (L. R. 9 Q. B. Div. 37; 21 Am. L. Eeg. N. S. 637) : "A, being indebted to B in 125 pounds 7s. & 9d. for goods sold and deliv- ered, gave B a check (negotiable, I suppose) for 100 pounds paya- ble on demand, which B accepted in satisfaction, was a good satisfaction." Huddleston, B., in Goddard v. O'Brien, supra, approved the language of the opinion in Sibree v. Tripp (15 M. & W. 26), " that a negotiable security may operate, if so given and taken, in satisfaction of a debt of a greater amount; the circum- stance of negotiability making it in fact a different thing and more advantageous than the original debt which was not negotiable." It was held in Bull v. Bull (43 Conn. 455), " and although the claim is a mon'ey demand liquidated and not doubtful, and it cannot be satisfied with a smaller sum of money, yet if any other personal property is received in satisfaction, it will be good no matter what the value." And it was held in Cumber v. Wane, supra, that a creditor can never bind himself by simple agreement to accept a smaller sum in lieu of an ascertained debt of a larger amount, such agreement being nudum pactum, but if there be any benefit or even any legal possibility of benefit to the creditor thrown in, that additional weight will turn the scale and render the consid- eration sufficient to support the agreement. It was held in Le Page v. McCrea (1 Wend. 164) and in Boyd V. Hitchcock (20 Johns. 76) that "giving further security for part of a debt or other security, though for a less sum than the debt, and acceptance of it in full of all demands, make a valid accord and satisfaction." 190 FORMATION OF CONTEACT. [Pakt II. That " if a debtor gives his creditor a note indorsed by a third party for a less sum than the debt (no matter how much less), but in full satisfaction of the debt, and it is received as such, the transaction constitutes a good accord and satisfaction." Var- ney v. Conery, 3 East K. 25. And so it has been held, " where by mode or time of part payment, different than that provided for in the contract, a new benefit is or may be conferred or a burden imposed, a new consideration arises out of the transaction and gives validity to the agreement of the creditor " (Base v. Hall, 26 Conn. 392), and so "payment of less than the whole debt, if made before it is due or at a different place from that stipu- lated, if received in full, is a good satisfaction." Jones v. Bid- litt, 2 Lit. 49; BicJcetts v. Hall, 2 Bush. 249; Smith v. Brown, 3 Hawks. (N. C.) 580; Jones v. Perkins, 29 Miss. 139; Schivei- der v. Lang, 29 Minn. 254; 43 Am. R. 202. In Watson v. Elliott (57 N. H. 511-513) it was held, "it is enough that something substantial, which one party is not bound by law to do, is done by him or something which he has a right to do, he abstains from doing at the request of the other party," [and this] is held a good satisfaction. It has been held in a number of cases that if a note be surren- dered (by the payee to the maker), the whole claim is discharged and no action can afterwards be maintained on such instrument for the unpaid balance. Ellsworth v. Fogg, 35 Vt. 355; Kent v. Reynolds, 8 Hun, 559. It has been held that a partial payment made to another, though at the creditor's instance and request, is a good discharge of the whole debt. Harper v. Graham, 20 Ohio, 106. "The reason of the rule is that the debtor in such ease has done some- thing more than he was originally bound to do, or at least some- thing difEerent. It may be more or it may be less, as a matter of fact." It was held by the Supreme Court of Pennsylvania in Mechan- ics' Bankr. Huston (Feb. 13, 1882, 11 W. Notes of Cases, 389), the decided advantage which a creditor acquires by the receipt of a negotiable note for a part of his debt, by the increased facili- ties of recovering upon it, the presumption of a consideration for it, the ease of disposing of it in market, etc., was held to fur- Chap. II. § 4.] CONSIDERATION. 191 nish ample reason why it should be a valid discharge of a larger account or open claim unnegotiable. It has been held that a payment in advance of the time, if agreed to, is full satisfaction for a larger claim not yet due. Brooks Y. White, 2 Met. 283; BowTeerv. Childs, 3 Allen, 434. In some States, notably Maine and Georgia, the legislature, in order to avoid the harshness of the rule under consideration, have by statute changed the law upon that subject by providing, "no action can be maintained upon a demand which has been oancelledby the receipt of any sum of money less than the amount legally due thereon, or for any good and valuable consideration however small." Citing Weymouth v. Babcock, 42 Maine, 42. And so in Gray v. Barton (55 N. Y. 68), where a debt of $820 upon book account was satisfied by the payment of $1 by calling the balance a gift, — though the balance was not delivered except by fiction, and the receipt was in the usual form and was silent upon the subject of a gift ; and this case was followed and referred to in Ferry v. Stephens, 66 N. Y. 321. So it was held in Mitchell v. Wheaton (46 Conn. 315; 33 Am. R. 24) that the debtor's agreement to pay and the payment of $150 with the costs of the suit upon a liquidated debt of $299 satisfied the principal debt. These cases show in a striking manner the extreme ingenuity and assiduity which the courts have exercised to avoid the opera- tion of the "rigid and rather unreasonable rule of the old law," as it is characterized in Johnston v. Brannan (5 Johns. 268-272), or as it is called in Kellogg v. Richards (14 Wend. 116), "tech- nical and not very well supported by reason," or as may be more practically stated, a rule that "a bar of gold worth $100 will discharge a debt of $500, while 400 gold dollars in current coin will not." See note to Goddard v. O'Brien, supra, in Am. Law Register, New Series, Vol. 21, pp. 640, 641. The state of the law upon this subject, under the modification of later decisions both in England and in this country, would seem to be as expressed in Goddard v. O'Brien (Queen's Bench Division, supra): "The doctrine in Cumb&r v. Wane is no doubt very much qualified by Sibree v. Tripp, and I cannot find it better stated than in 1st Smith's Leading Cases (7th ed.), 595: 192 FORMATION OF CONTRACT. [Pabt H. ' The general doctrine in Cumber y. Wane, and the reason of all the exceptions and distinctions which have been engraved on it, may perhaps be summed up as follows, viz. : That a creditor cannot bind himself by a simple agreement to accept a smaller sum in lieu of an ascertained debt of larger amount, such an agreement being nudum pactum. But if there be any benefit or even any legal possibility of benefit to the creditor thrown in, that additional weight will turn the scale and render the consid- eration sufficient to support the agreement. ' " Bull v. Bull, 43 Conn. 456; Fisher v. May, 2 Bibb. 449; Reed v. Bartlett, 19 Pick. 273; Union Bank v. Geary, 5 Peters, 99-114; Le Page v. McGrea, 1 Wend. 164; Boyd v. Hitchcock, 20 Johns. 76; Brooks v. Wliite, 2 Mete. 283; Jones v. Perkins, 29 Miss. 139-141; Hall v. Smith, 15 Iowa, 584; Babcock v. Hawkins^ 23 Vt. 561. In the case at bar the defendants gave their promissory notes upon time for one-half of the debt they owed plaintiffs, and also gave plaintiffs a chattel mortgage on the stock, fixtures, and other personal property of the defendants under an agreement with plaintiffs, to accept the same in full satisfaction and discharge of said indebtedness. Defendants paid the notes as they became due, and plaintiffs then discharged the mortgage. Under the cases above cited, and upon principle, this new agreement was supported by a sufficient consideration to make it a valid agree- ment, and this agreement was by the parties substituted in place of the former. The consideration of the new agreement was that the plaintiffs, in place of an open book account for goods sold, got the defendants' promissory notes, probably negotiable in form, signed by defendants, thus saving the plaintiffs perhaps the trouble or expense of proving their account, and got security upon all the defendants' personal property for the payment of the sum specified in the notes, where before they had no security. It was some trouble, at least, and perhaps some expense to the defendants to execute and deliver the security, and they deprived themselves of the legal ownership, or of any exemptions or the power of disposing of this property, and gave the plaintiffs such ownership as against the defendants, and the claims thereto of defendants' creditors, if there were any. It seems to me, upon principle and the decisions of this State Chap. U. § 4.] CONSIDERATION. 193 (save, perhaps, Keeler v. Salisbury, 33 N. Y. 653, and Platts v. Walrath, Lalor's Supp. 59, which I will notice further on), and of q^uite all of the other States, the transactions between the plain- tiffs and the defendants constitute a bar to this action. All that is necessary to produce satisfaction of the former agreement is a sufficient consideration to support the substituted agreement. The doctrine is fully sustained in the opinion of Judge Andrews in Allison v. Abendroth (108 E". Y. 470), from which I quote: " But it is held that where there is an independent consideration, or the creditor receives any benefit or is put in a better position, or one from which there may be legal possibility of benefit to which he was not entitled except for the agreement, then the agreement is not nudum pactum, and the doctrine of the common law to which we have adverted has no application." Upon this distinction the cases rest which hold that the acceptance by the creditor in discharge of the debt of a different thing from that contracted to be paid, although of much less pecuniary value or amount, is a good satisfaction, as, for example, a negotiable in- strument binding the debtor and a third person for a smaller sum. Ourlewis v. Clark, 3 Exch. 375. Tollowing the same principle, it is held that when the debtor enters into a new contract with the creditor to do something which he was not bound to do by the original contract, the new contract is a good accord and satis- faction if so agreed. The case of accepting the sole liability of one of two joint debtors or copartners in satisfaction of the joint or copartnership debt is an illustration. This is held to be a good satisfaction, because the sole liability of one of two debtors " may be more beneficial than the joint liability of both, either in respect of the solvency of the parties, or the convenience of the remedy." Thompson v. Percival, 5 B. & Adol. 925. In perfect accord with this principle is the recent case in this court of Luddington v. Bell (77 N. Y. 138), in which it was held that the acceptance by a creditor of the individual note of one of the members of a copartnership after dissolution for a portion of the copartnerhsip debt was a good consideration for the creditor's agreement to discharge the maker from further liability. Par- dee V. Wood, 8 Hun, 584; Douglass v. White, 3 Barb. Chy. 621-624. 194 FORMATION OF CONTRACT. [Past II. Notwithstanding these later and decisive authorities, the plain- tiffs contend that [despite] the giving of the defendants' notes with the chattel mortgage security and the payment, such consideration was insufficient to support the new or substituted agreement, and cites as authority for such contention the cases of Platts v. Wal- rath (Lalor's Supp. 59) and Keeler v. Salisbury (33 N. Y. 648). Platts V. Walrath arose in justice court, and the debt in con- troversy was put forth as a set-off. The remarks of the judge in the former case were quite obiter, for there were various subjects in dispute upon the trial, and from which the justice might have reached the conclusion that he did. The judge in the opinion relied upon says : " Looking at the loose and secondary character of the evidence as stated in the return, it was perhaps a question of fact whether any mortgage at all was given; or, at least, whether, if given, it was not in terms a mere collateral security for the large note," "even the mortgagee was left to parol proof. Did it refer to and profess to be a security for the note of $1500, or that sum less the fifty dollars agreed to be thrown off, etc., etc.?" There is so much confusion and uncertainty in the case that it was not thought advisable to publish the case in the regular series of reports. The case of Keeler v. Salisbury, supra, is not to be regarded as an authority upon the question or as approving the case of Platts v. Walratli, supra. In the case of Keeler v. Salisbury, the debtor's wife had joined in the mortgage given by her husband, the debtor, to effect the compromise, thus releasing her inchoate right of dower. The court held that fact consti- tuted a sufficient consideration to support the new agreement, though the court in the course of the opinion remarked that it had been held that the debtor's mortgage would not be sufficient, and referred to Platts v. Walrath. But the court did not other- wise indicate any approval of that case, and there was no occa- sion to do so, for, as before stated, the court put its decision upon the fact that the wife had joined in the mortgage. In view of the peculiar facts in these two cases and the nu- merous decisions of this and other courts hereinbefore referred to, I do not regard them as authorities against the defendants' con- tention that the plaintiffs' action for the balance of the original Chap. II. § 4.] C©NSIDERATION. 195 debt is barred by reason of the accord and satisfaction, and that the judgment should be reversed, with costs. All concur. Judgment reversed. (c) Composition with creditors. WILLIAMS V. CAEEINGTOF. 1 HILTON (N. Y. C. P.), 515.— 1857. Action for debt. Defense, accord and satisfaction by composi- tion. Appeal from judgment of Marine Court in favor of plaintiff. Defendant having made a composition with several of his creditors at forty cents on the dollar, made a similar agreement with plaintiffs by which he agreed to pay them, forty cents on the dollar, and did pay them such amount, and received a receipt in full of their account. Defendant at the same time gave to plain- tiffs a sealed instrument by which he bound himself to pay to them an additional forty per cent as soon as his compromise should be effected, on condition that plaintiffs sign a paper pur- porting to compromise his indebtedness to them for forty per cent. The composition was never completed, and plaintiffs bring this action. There was no evidence that plaintiffs ever executed a composition deed, or that other creditors were induced to enter into a compromise in consequence of the agreement with plaintiffs. Daly, J. It was essential, in this case, to show that other creditors had consented to accept the forty per cent in discharge of their claims in consequence of the plaintiffs' consenting to do so. The consideration which supports such an agreement, when it is not under seal, is the mutual understanding, among all who become parties to it, that each, is to take the composition agreed upon, and forbear further to press or insist upon their claims. It is said in Good v. Gheesman (2 Barn. & Adolph. 328), by Lord Tenterden, " that a creditor shall not bring an action where others have been induced to Join him in a composition with the debtor; each party giving the rest reason to believe, that, in consequence of such engagement, his demand will not be enforced. This is, in fact, a new agreement, substituted for the original contract 196 FORMATION OF CONTRACT. [Part II. ■with the debtor; the consideration to each creditor being the engagement of the others not to press their individual claims." It must appear that the act of the plaintiff, in accepting the forty per cent, operated as an inducement to other creditors to do the same, otherwise it is but the acceptance of a lesser sum for a greater, which is no satisfaction. Thus in Lowe v. Equitar (7 Price, 604) the plaintiff agreed with the defendant to execute a deed of composition with the other creditors, and take the benefit of the composition with them, in consideration that the defendant would also deliver to him a picture of the value of £500. The picture was delivered and accepted by the plaintiff in full satisfaction of his claim, and the defendant and all the other creditors, except the plaintiff, signed the composition deed. The plaintiff sued for the original debt, and a plea setting up these facts was held to be no bar. I am inclined to think, from the report of this ease, that the picture was accepted in lieu of, or as a payment of the composition, and if so, it was a case, in its essential features, like the present. Where creditors meet to- gether, and the terms of the composition are arranged, as was the case in Gockshott v. Bennett (2 Term Eep. 763), or as in Good v. Gheesman, supra, put their names to an agreement or memoran- dum of the term, all the creditors present at such meeting, or all who sign the writing, enter into a mutual engagement, each with the other, to accept the amount proposed by way of compromise, and to forbear further to insist upon their claims. Where cred- itors thus mutually agree with each other, the beneficial considera- tion to each creditor is the engagement of the rest to forbear. A fund is thereby secured for the general advantage of all; and if any one of the parties were allowed afterwards to enforce his whole claim, it would operate to the detriment of the other creditors who have relied upon his agreement to forbear, and might even deprive them of the sum it was mutually agreed they should receive, by putting it out of the power of the debtor to carry out the composition. I know of no case, however, in which an acceptance, by a creditor from his debtor, of a certain sum in discharge of his debt, where other creditors have done the same, has been held to be a satisfaction, unless there was something in the case to show that the other creditors acted with the knowl- Chap. II. § 4.] CONSIDERATION. 19T edge of his concurrence, and it could be assumed that their agree- ment necessarily contemplated and was founded in the benefit and advantage to be derived from his agreement also to forbear — in the language of Lord Tenterden, that they " were induced to join him in the composition." It is very probable, in this case, that such was the fact — very probable that the plaintiffs signed the composition, but nothing of the kind appears in the evidence. Eor all that appears in the testimony, the other creditors may have accepted the forty per cent without knowing that the plain- tiffs had received that sum, or had agreed to accept it. We would not be justified in presuming, upon this evidence, that they did, against what must be regarded as a direct finding by the judge below, that they did not. We would have to hold that the judgment he gave was against evidence, and we could not, I think, go that length. The judgment must be affirmed; but as the question is not very fully discussed by either party upon the written argument submitted, and as it is of a good deal of practical importance, I think the defendant should be allowed, if he wishes it, to carry the case to the Court of Appeals. [Ingraham, F. J., also read for affirmance.] Bbadt, J., dissented. Judgment affirmed. PEEKINS V. LOCKWOOD. 100 MASSACHUSETTS, 249. — 1868. Action on a promissory note upon which was the following indorsement : " December 14, 1864. Received on the within note $10.38, being the first instalment towards $15.94, being ten per cent of said note, which when paid is to be in full satisfaction and settlement of the within note, provided that no other creditor shall receive more than ten per cent on his claim against Lockwood & Connell, and provided also that if any creditor shall receive more than ten per cent, an amount equal to such percentage shall be paid on the within note." Wells, J. An agreement to accept, in satisfaction and dis- charge of a liquidated debt, a sum less than the full amount due. 198 FORMATION OF CONTRACT. [Pabt D. is not valid, unless there exist some consideration to support it other than the payment or promise of the debtor to pay such less sum. Marriman v. Harriman, 12 Gray, 341. The note or col- lateral promise of another person will support the agreement. Brooks V. White, 2 Met. 283. For a like reason, when such an agreement forms part of a composition in which several creditors join, mutually stipulating to withdraw or withhold suits and that they will release to their common debtor a part of their claims upon payment of a certain other part, the agreement becomes binding between each creditor and the debtor. Eaton v. Lincoln, 13 Mass. 424; Steinman v. Magnus, 11 East, 390. The reason is, that the rights and interests of other parties become involved in the arrangement, and this affords a new and legal consideration for the promise. It would be contrary to good faith for a cred- itor who has secured the advantage of such an arrangement to disregard its obligations by proceeding to enforce the balance of his demand; and the debtor is entitled to avail himself of this consideration in defense. Good v. Cheesman, 2 B. & Ad. 328; • Boyd V. Hind, 1 H. & N. 938. In this case, the exceptions do not show that there was any such mutual agreement between the creditors. The defense indicated by the most important ruling of the court appears to 'be based entirely upon the legal effect of the agreement between the plain- tiff and defendant as indorsed upon the notes in suit. That agreement affects no other party. Its reference to the like settle- ment of other debts is merely in the' nature of a condition attached to the plaintiff's promise to discharge the notes. It does not make it any the more binding. The defendant's under- taking, that he would not pay others more than the plaintiff, would not prevent others from enforcing their claims in full, and is not such a promise as would afford any consideration for the agreement of the plaintiff. It is neither a benefit to the plaintiff nor disadvantage to the defendant. So far as the exceptions show, the release of their claims by the other creditors had no connection with this agreement. The agreement itself shows no legal consideration to give it effect as a contract. As we understand the exceptions, the court below ruled that the agreement indorsed upon the notes constituted of itself " a legal Chap. II. § 4.] CONSIDERATION. 199 and valid contract, binding on the plaintiff." This we think was clearly wrong; and for this cause the Exceptions are sustained. Note. — For cases holding mutual subscriptions a sufBoient consideration for each other, see Lathrop v. Knapp, 27 Wis. 214 ; Higert v. Indiana Asbury University, 53 Ind. 326 ; Christian College v. Hendley, 49 Cal. 347. Contra : Trustees v. Stewart, 1 N. Y. 581 ; First Pres. Ch. v. Cooper, 112 N. Y. 517 ; Cottage Street M. E. Ch. v. Kendall, 121 Mass. 528; University of Des Moines v. Livingstone, 67 la. 307. (iii.) Consideration must be legal. Note. — For cases on legality of consideration, see cases on " Legality of Object," post, Part II. Ch. V. {iv.) Consideration may be executory or executed, it must not be past. ' DEAEBOEN v. BOWMAN. 3 METCALF (Mass.), 155. — 1841. Assumpsit on a note in these terms: "June 17, 1839. I promise to pay Dearborn & Bellows sixty dollars in ninety days, value received. Bowman." Defense, want of consideration. Shaw, C. J. The defense to the action to recover the amount of this note is want of consideration. It is manifest from the note itself, that it is not a negotiable instrument, being payable neither to order nor to bearer; indeed, it appears by the case, that the defendant declined making it negotiable. But total want of consideration is a good defense even to an action on a negotia- ble note, when brought by the promisee against the maker. Then the question is, whether upon the facts shown, any con- sideration appears for this promise. The note was given in consequence of services before that time performed by the plain- tiffs, in printing and circulating extra papers and documents, previously to an election of state senators,, at which the defendant was a candidate. Such services imposed no obligation, legal or moral, on the defendant; and it would be somewhat dangerous to 200 FORMATION OF CONTRACT. [Paet n. hold that they created any honorary obligation on him to pay for them. Nor would it be aided in a legal view, by a previous cus- tom, if proved, for candidates to contribute to the payment of similar expenses, whether successful or otherwise in the election. Nor were these services performed at the request of the defendant. On the contrary, it appears by the evidence that they were performed by General Staples, chairman of the county committee, who alone was responsible for the payment, and between whom and the defendant there was no privity, nor even any communication, until long after the services had been per- formed. The rule of law seems to be now well settled — though it may have formerly been left in doubt — that the past perform- ance of services constitutes no consideration even for an express promise, unless they were performed at the express or implied request of the defendant, or unless they were done in performance of some duty or obligation resting on the defendant. Mills v. Wyman, 3 Pick. 207; Loomis v. Nevohall, 16 Pick. 159; Dodge v. Adams, 19 Pick. 429. As the services performed by the plaintiffs were not done at the request of the defendant, as they were not done in the fulfilment of any duty or obligation resting on him, there was no consideration to convert the express promise of the defendant into a legal obligation. Another ground, however, was taken in behalf of the plaintiffs, which was, that the discharge by the plaintiffs, of their legal demand against Staples, was a good consideration for the defend- ant's promise to them. If such discharge was in fact given, and given at the defendant's request, or if the defendant had promised to pay if they would discharge Staples pro tanto, and they did discharge him, it would have been a good consideration for the defendant's promise. But there is no evidence to establish the fact. The court are of opinion that there was no legal consideration for the defendant's promise, and that no action can be maintained upon it. Plaintiffs nonsuit. Chap. n. § 4.] CONSIDEEATION. 201 MILLS V. WYMAN. 3 PICKERING (Mass.), 207.— 1826. Action of assumpsit to recover compensation for tlie board and care of defendant's adult son who fell sick among strangers, and was provided for under these circumstances by the plaintiff, the defendant having afterwards written to the plaintiff promising to pay him for expenses incurred. Paekee, C. J. General rules of law established for the pro- tection and security of honest and fair-minded men, who may inconsiderately make promises without any equivalent, will sometimes screen men of a different character from engagements which they are bound in foro conscientice to perform. This is a defect inherent in all human systems of legislation. The rule that a mere verbal promise, without any consideration, cannot be enforced by action, is universal in its application, and cannot be departed from to suit particular cases in which a refusal to per- form such a promise may be disgraceful. The promise declared on in this case appears to have been made without any legal consideration. The kindness and services towards the sick son of the defendant were not bestowed at his request. The son was in no respect under the care of the defendant. He was twenty-five years old, and had long left his father's family. On his return from a foreign country, he fell sick among strangers, and the plaintiff acted the part of the good Samaritan, giving him shelter and comfort until he died. The defendant, his father, on being informed of this event, influenced by a transient feeling of gratitude, promises in writing to pay the plaintiff for the expenses he had incurred. But he has deter- mined to break this promise, and is willing to have his ease appear on record as a strong example of particular injustice sometimes necessarily resulting from the operation of general rules. It is said a moral obligation is a sufficient consideration to support an express promise, and some authorities lay down the rule thus broadly; but upon examination of the cases we are satisfied that the universality of the rule cannot be supported, 202 FORMATION OF CONTRACT. [Pabt U. and tliat there must have been some pre-existing obligation, which has become inoperative by positive law, to form a basis for an effective promise. The cases of debts barred by the statute of limitations, of debts incurred by infants, of debts of bankrupts, are generally put for illustration of the rule. Express promises founded on such pre-existing equitable obligations may be en- forced; there is a good consideration for them; they merely remove an impediment created by law to the recovery of debts honestly due, but which public policy protects the debtors from being compelled to pay. In all these cases there was originally a quid pro quo; and according to the principles of natural justice, the party receiving ought to pay; but the legislature has said he shall not be coerced; then comes the promise to pay the debt that is barred, the promise of the man to pay the debt of the infant, of the discharged bankrupt to restore to his creditor what by the law he had lost. In all these cases there is a moral obligation founded upon an antecedent valuable consideration. These promises, therefore, have a sound legal basis. They are not promises to pay something for nothing; not naked pacts; but the voluntary revival or creation of obligation which before existed in natural law, but which has been dispensed with, not for the benefit of the party obliged solely, but principally for the public convenience. If moral obligation, in its fullest sense, is a good substratum for an express promise, it is not easy to perceive why it is not equally good to support an implied promise. What a man ought to do, generally he ought to be made to do, whether he promise or refuse. But the law of society has left most of such obligations to the interior forum, as the tribunal of conscience has been aptly called. Is there not a moral obligation upon every son who has become affluent by means of the education and advantages bestowed upon him by his father, to relieve that father from pecuniary embarrassment, to promote his comfort and happiness, and even to share with him his riches, if thereby he will be made happy? And yet such a son may, with impunity, leave such a father in any degree of penury above that which will expose the community in which he dwells to the danger of being obliged to preserve him from absolute want. Is not a wealthy father under strong moral obligation to advance the interest of an obedient, Chap. II. § 4.] CONSIDERATION. 203 well-disposed son, to furnish him with the means of acquiring and maintaining a becoming rank in life, to rescue him from the horrors of debt incurred by misfortune? Yet the law will uphold him in any degree of parsimony, short of that which would reduce his son to the necessity of seeking public charity. Without doubt, there are great interests of society which justify withholding the coercive arm of the law from these duties of imperfect obligation, as they are called; imperfect, not because they are less binding upon the conscience than those which are called perfect, but because the wisdom of the social law does not impose sanctions upon them. A deliberate promise, in writing, made freely and without any mistake, one which may lead the party to whom it is made into contracts and expenses, cannot be broken without a violation of moral duty. But if there was nothing paid or promised for it, the law, perhaps' wisely, leaves the execution of it to the con- science of him who makes it. It is only when the party making the promise gains something, or he to whom it is made loses something, that the law gives the promise validity. And in the case of the promise of the adult to pay the debt of the infant, of the debtor discharged by the statute of limitations or bank- ruptcy, the principle is preserved by looking back to the origin of the transaction, where an equivalent is to be found. An exact eqliivalent is not required by the law; for there being a consid- eration, the parties are left to estimate its value: though here the courts of equity will step in to relieve from gross inadequacy between the consideration and the promise. These principles are deduced from the general current of decided cases upon the subject, as well as from the known maxims of the common law. The general position, that moral obligation is a sufficient consideration for an express promise, is to be limited in its application, to cases where at some time or other a good or valuable consideration has existed. A legal obligation is always a sufficient consideration to sup- port either an express or an implied promise; such as an infant's debt for necessaries, or a father's promise to pay for the support and education of his minor children. But when the child shall have attained to manhood, and shall have become his own agent 204 FORMATION OF CONTRACT. [Pabt IL in the world's business, the debts he incurs, whatever may be their nature, create no obligation upon the father; and it seems to follow, that his promise founded upon such a debt has no legally binding force. The cases of instruments under seal and certain mercantile contracts, in which considerations need not be proved, do not contradict the principles above suggested. The first import a consideration in themselves, and the second belong to a branch of the mercantile law, which has found it necessary to disregard the point of consideration in respect to instruments negotiable in their nature and essential to the interests of commerce. Instead of citing a multiplicity of cases to support the posi- tions I have taken, I will only refer to a very able review of all the cases in the note in 3 Bos. & Pull. 249. The opinions of the judges had been variant for a long course of years upon this subject, but there seems to be no case in which it was nakedly decided that a promise to pay the debt of a son of full age, not living with his father, though the debt were incurred by sick- ness which ended in the death of the son, without a previous request by the father proved or presumed, could be enforced by action. It has been attempted to show a legal obligation on the part of the defendant by virtue of our statute, which compels lineal kin- dred in the ascending or descending line to support such of their poor relations as are likely to become chargeable to the town where they have their settlement. But it is a sufficient answer to this position, that such legal obligation does not exist except in the very cases provided for in the statute, and never until the party charged has been adjudged to be of sufacient ability thereto. We do not know from the report any of the facts which are necessary to create such an obligation. Whether the deceased had a legal settlement in this commonwealth at the time of his death, whether he was likely to become chargeable had he lived, whether the defendant was of sufficient ability, are essential facts to be adjudicated by the court to which is given jurisdiction on this subject. The legal liability does not arise until these facts have all been ascertained by judgment, after hearing the party intended to be charged. Chap. II. § 4.] CONSIDERATION. 205 "FoT the foregoing reasons we are all of opinion ttat the nonsuit directed by the Court of Common Pleas was right, and that judgment be entered thereon for costs for the defendant.* (a) Consideration moved by previous request. HICKS V. BUEHANS. 10 JOHNSON (N. Y.), 242. — 1813. In error, on certiorari, from a justice's court. B. and others brought an action of assumpsit against Hicks, before the jus- tice. The cause was tried by a jury. The plaintiffs gave in evi- dence a writing dated the 16th of January, 1808, signed by the defendant and ten others, reciting that whereas the plaintiffs had, previous to the date of the writing, been in pursuit of sev- eral persons who had absconded and were in debt to the subscrib- ers, they, the subscribers, promised to pay to the plaintiffs, or either of them, an equal proportion of all the expenses which the plaintiffs had been at, in pursuing such fugitive debtors, and also promised to pay their equal proportion of all further ex- penses the plaintiffs should be at in further pursuing the said persons, etc. The plaintiffs proved an account of the expenses, amounting to about one hundred and thirty-eight dollars; and that the defendant examined the account when presented to the creditors, and made no objection to it, except to a charge of twenty dollars. The jury gave a verdict for the plaintiffs for seventeen dollars, on which the justice gave judgment. Per Curiam. The written promise to pay, if founded on a past consideration, may be good, if the past service be laid to have been done on request; and if not so laid, a request may 1 " We do not believe a case can be found where a moral obligation alone has been held to be a sufficient consideration for a subsequent promise." — Allen v. Bryson, 67 la. 591. " This court has never, when called upon, hesitated to say that a moral obligation is a sufBcient consideration to support a promise to pay." — Mutual <£c. Ass^n v. Hurst, 78 Md. — ; 26 Atl. R. 956. See also Gray v. Hamil, 82 Ga. 375. 206 FORMATION OF CONTRACT. [Pabt II. be implied from the beneficial nature of the consideration, and the circumstances of the transaction. 1 Caines' Rep. 585, 686. Here the past service consisted in an expensive pursuit, by the plaintiffs, of certain fugitive debtors, who were indebted to the defendant and others; and it appeared that the plaintiffs had exhibited their accounts, at a meeting, of the creditors, and that the defendant examined them, and made no objection, except to a single item, of the charges. A request, in this case, might have been implied; and we ought to intend it to have been proved upon trial. There are no formal pleadings in the case, and the return does not negative the fact of a request. There was no other objection raised that merits notice. The judgment must be affirmed. Judgment affirmed. {P) Voluntarily doing what another was legally bound to do. GLEASON V. DYKE. 22 PICKERING (Mass.), 390. — 1839. In 1833 defendant gave a note to the Massachusetts Hospital Life Insurance Co., and a mortgage was given by him to secure the payment of the note. November 11, 1837, the defendant's equity of redemption was sold on execution to plaintiff, who on the 24th paid to the Insurance Co. the amount due on the note. The mortgage and note, both cancelled, and with a release in- dorsed upon the mortgage, were delivered up to the plaintiff by the company. Some days after the execution of the release, the defendant examined the note and mortgage for the purpose of ascertaining the amount due to the plaintiff, and promised the plaintiff to pay the same. Wilde, J. There was no express proof that the note to the Massachusetts Hospital Life Insurance Company was paid at the request of the defendant; but the plaintiff relied on the promise of the defendant to pay him, made subsequently to the discharge of the mortgage. This promise, we think, is equivalent to a previous request. It comes within the well-established princi- ple, that the subsequent ratification of an act done by a voluntary Chap. II. §4.] CONSIDERATION. 207 agent of another, without authority from him, is equivalent to a previous authority. The law, it is true, will not allow a party to maintain an action for money paid to discharge the debt of another without his consent; for to allow this, would subject every debtor to the power of those who might be disposed to in- jure him, and who might harass him with suits, and burden him with costs, in the most unreasonable and oppressive manner. But if the debtor assents to the payment, the reason of the law fails ; and whether the consent be given before or after the pay- ment is, as it seems to us, immaterial. Telv. (Metcalf's ed.) 42, note. "We have no doubt, therefore, that the defendant's prom- ise is valid; first, because his ratification of the payment is equivalent to a previous request to pay, and the objection, that the consideration was past, cannot be maintained ; and secondly, because the case shows an equitable consideration, which is suffi- cient to sustain an express promise. Where a man is under a moral obligation to pay a debt, which cannot be enforced by a court of law or equity, yet if he promises to pay he will be bound. As where a man promises to pay a just debt, the recov- ery of which is barred by the statute of limitations; or if a minor contracts a debt, but not for necessaries, and after he comes of age, promises to pay it; or if a debtor promises the assignee of a chose in action to pay him. In all such cases, and many others, the party will be bound by his promise, although before the promise the other party had no remedy either in law or equity. Hawkes v. Saunders, Cowper, 290. There is another ground on which this action might be main- tained, if there had been no express promise. The payment of the mortgage debt by the plaintiff was not merely voluntary. He was bound to pay the debt in order to secure his equitable interest in the estate. He was placed in this situation by the neglect of the defendant to pay the debt due to his creditor, who levied his execution on the equity of redemption. Under these circumstances no previous request to pay the debt, or subsequent ratification by the defendant, was required. Child v. Morley, 8 T. E. 610. It was contended by the defendant's counsel, at the trial, that the operation of the payment of the mortgage was sufficient, 208 FORMATION OF CONTRACT. [Part IL under the circumstances, to constitute the plaintiCE the assignee thereof, and to convey to him all the right of the original mort- gagee. This right, we think, is sustained by the Eevised Stat, c. 73, §§ 34, 35. But it by no means follows that the plaintiff has not a double remedy, as the mortgagee had. If the payment operated as an equitable assignment of the mortgage, it would have the same operation as to the note. If the plaintiff had a right to hold the mortgaged estate until the defendant paid the debt, then most clearly the defendant's promise is binding and obligatory, although the plaintiff had another security. Default entered.^ (y) JReviving agreement barred by some rule of law. DUSENBUEY, Executor, v. HOYT. 53 NEW YORK, 521. — 1873. The action was upon a promissory note. The defendant pleaded his discharge in bankruptcy. Upon the trial, after proof of the discharge, plaintiff offered to prove subsequent promise of the defendant to pay the note. Defendant objected upon the ground that the action was upon the note, not upon the new promise. The court sustained the objection, and directed a verdict for defendant, which was rendered accordingly. Plain- tiff appeals. Andrews, J. The 34th section of the bankrupt law declares that a discharge in bankruptcy releases the bankrupt from all debts provable under the act, and that it may be pleaded as a ful and complete bar to all suits brought thereon. The legal obligation of the bankrupt is by force of positive la^. discharged, and the remedy of the creditor existing at the timi the discharge was granted to recover his debt by suit is barred. But the debt is not paid by the discharge. The moral obligation of the bankrupt to pay it remains. It is due in conscience, although discharged in law, and this moral obligation, uniting with a subsequent promise by the bankrupt to pay the debt, 1 Accord : Doty v. Wilson, 14 Johns. 378. Chap. II. § 4.] CONSIDERATION. 209 gives a right of action. It was held in Shippy v. Henderson (14 J. E. 178) that it was proper for the plaintiff, when the bank- rupt had promised to pay the debt after his .discharge, to bring his action upon the original demand, and to reply the new prom- ise in avoidance of the discharge set out in the plea. The court, following the English authorities, said that the replication of the new promise was not a departure from the declaration, but sup- ported it by removing the bar interposed by the plea, and that in point of pleading it was like the cases where the defense of infancy or the statute of limitations was relied upon. The case of Shippy V. Henderson was followed in subsequent cases, and the doctrine declared in it became, prior to the Code, the settled law. McNair v. Gilbert, 3 Wend. 344; Wait v. Morris, 6 Id. 394; Fitz- gerald V. Alexander, 19 Id. 402. The question whether the new promise is the real cause of action, and the discharged debt the consideration which supports it, or whether the new promise operates as a waiver by the bank- rupt of the defense which the discharge gives him against the original demand, has occasioned much diversity of judicial opinion. The former view was held by Marcy, J., in Depuy v. Swart (3 Wend. 139), and is probably the one best supported by authority. But, after as before the decision in that case, the court held that the original demand might be treated as the cause of action, and for the purpose of the remedy, the decree in bank- ruptcy was regarded as a discharge of the debt sub mode only, and the new promise as a waiver of the bar to the recovery of the debt created by the discharge. We are of opinion that the rule of pleading, so well settled and so long established, should be adhered to. The original debt may still be considered the cause of action for the purpose of the remedy. The objection that, as no replication is now required, the pleadings will not disclose the new promise, is equally applicable where a new promise is relied upon to avoid the defense of infancy or the statute of limitations, and in these cases the plaintiff may now, as before the Code, declare upon the original demand. Esselstyn V. Weeks, 12 N. Y. 635. The offer of the plaintiff to prove an unconditional promise by the defendant, after his discharge, to pay the debt, was improp- 210 FORMATION OF CONTRACT. [Pabt U. erly overruled, and the judgment should, for this reason, be re- versed, and a new trial ordered, with costs to abide the event. All concur, except Folger, J., not voting. Judgment reversed. SHEPAED v.' EHODES. 7 RHODE ISLAND, 470.— 1863. Assumpsit. Demurrer to declaration. Bullock, J. The count demurred to states, in substance, that the plaintiffs had discharged the defendants from a certain debt, then due and owing from them to the plaintiffs, in consideration of dividends to be received from the proceeds of certain effects assigned by the defendants; and that, subsequent to such dis- charge, the defendants feeling themselves honorably bound to pay to the plaintiffs this debt, in consideration thereof and of one dollar to them paid, made the following new promise, to wit, to pay to the plaintiffs in one year after a final dividend, any difference that might exist between their full debt and interest and the amount of any dividend or dividends the plaintiffs might have previously received. The count further states, that more than one year has elapsed since the plaintiffs received notice that no dividend would be paid them from the assigned effects. This statement of the cause of action shows, in effect, two separate and distinct considerations, as the foundation of the new promise: first, a moral consideration, that the defendants, not- withstanding their discharge, felt themselves in honor bound to pay the plaintiffs' debt; and, second, the valuable consideration of one dollar, paid to the defendants by the plaintiffs when the new promise was made. Are these considerations, as stated, sufB.cient in law ta sustain the promise? Passing by the earlier cases, referred to at length in a note to the report of Wennall v. Adney (3 Bos. & Pull. 249), and some of which hold to the opposite, it may now be deemed settled, that no action can be maintained upon a promise founded upon a mere moral consideration. Mills v. Wyman, 3 Pick. 207; Eastwood V. Kenyan, 11 Ad. & Ell. 438 ; Beaumont v. Beeve, 8 Chap. II. § 4.] CONSLDEEATION. 211 Ad. & Ell. (N. S.) 483; S. C. 55 Eng. C. L. 483. It has been said, that such a doctrine is not creditable to the common law; but the rule has its origin in the widely diversified character of moral duties, and the consequent difficulty of measuring them with exactness, and determining which are so high and obligatory in their nature as to demand, in their performance, the payment of money. There is a class of cases which for the most part have been regarded as not falling within the rule, that a mere moral con- sideration will not support a promise. Of such is the case of a promise barred by the statute of limitations, where the party is under no legal liability to pay when the promise is made. And so, of the promise of an infant, made after he becomes of age, to pay a debt incurred during his minority, and which debt he is theii at liberty to ratify or avoid. Upon the same principle, a promise to pay a debt originally usurious, where usury avoids the contract, but freed from all usury at the time the new promise is made, is binding, because the original contract is not void, but voidable only at the election of the borrower. And so, the promise of a bankrupt, made after certificate of discharge granted may be enforced, although now, in England, by statute (6 Geo. IV. c. 16) the promise must be in writing. But it is settled, that such considerations as love, friendship, natural affection, even the close relation existing between parent and child, are not, of themselves, sufficient to support an express promise. Whether the promise of a feme covert, after coverture ended, to pay a debt contracted during coverture, falls within the limit of the exception, has been a subject of frequent discussion, and of decisions somewhat contrariant. In, Zee v. Muggeridge (5 Taunt. 36) an action was upheld against her executors, upon the bond of a. feme covert, fol- lowed by her promise to pay, dum sola. But this case can hardly be deemed authority since the decision in Eastwood v. Kenyon, supra; and in New York an action was maintained against a woman, upon a contract of retainer entered into by her before a divorce. Wilson v. Burr, 25 Wend. 386. A more lead- ing case, in the same State, affirming the validity of such a promise, is that of Goulding v. Davidson (3 Am. L. Keg. N. S. 34; 26 N. Y. 604), recently decided in the Court of Appeals. The facts 212 FORMATION OF CONTRACT. [Part II. •were, that a feme covert represented herself as unmarried and as trading on her own account, and so procured credit, and purchased goods, for which she gave her note. Her coverture was not known to the creditor. After the death of her husband, she promised to pay this debt, and an action was brought upon this promise. The decision proceeds, mainly, upon the ground, that being guilty of fraud in the original undertaking, trover or replevin might have been brought against her and her husband at any time after the supposed purchase was made, and since this cause of action existed against her during coverture, a promise by her, after coverture, rested upon this as a sufBcient consideration. The principle recognized in, and which, almost without excep- tion, has controlled this class of cases, is this: that when the precedent original consideration was sufficient to sustain the promise, but the right of action was suspended or barred by some positive rule of statutory or common law, the debtor might, by a subsequent proniise, waive the exemption which the law has interposed indirectly for his benefit, but, mainly, from reasons of sound policy. The case here is one where the original right of action was extinguished, not by the act of the law, but by the act of the parties. It was a voluntary release of the debt by the creditor to the debtor. In Willing v. Peters (12 S. & E. 179) the question arose, how far a promise to pay a debt, thus discharged, might be enforced; and because of the analogy between waiving a dis- charge created by act of law and one created by act of the parties, the court upheld the action. Shaw, C. J., in Valentine v. Foster (1 Mete. 522), admits the closeness of the analogy, and suggests, if the rule be not narrow, that allows the waiver in the one case to bind the party, and rejects it in the other; but he adds, that the Pennsylvania authority is the only one he has been able to find in support of the doctrine ; and in the case then before him, ruled, that when a creditor released a debtor to make him a wit- ness, the subsequent promise of the debtor was not binding. Considering his own decision, and that the case of Willing v. Peters was subsequently overruled in the same court, in Snevily V. Bead (9 Watts, 396), while in other courts it has been repeatedly adjudicated, that after the voluntary release of a debt, an express Chap. II. § 4.] CONSIDERATION. 213 promise does not revive it, nor does it form a sufficient considera- tion to support the new promise, we may affirm that such, at present, is the settled law. Warren v. Whitney, 24 Maine, 561 ; Stafford v. Bacon, 1 Hill, 533. But the plaintiffs aver an additional consideration for the defendants' promise, and this raises another question; because the former consideration not being illegal, but only insufficient, the latter may sustain the promise declared upon. This addi- tional consideration is one dollar, for which, it is alleged, the defendants promised, etc., to pay a sum greater than $1000. Ordinarily, courts do not go into the question of equality or inequality of considerations ; but act upon the presumption that parties capable to contract are capable, as well, of regulating the terms of their contracts, granting relief only when the inequality is shown to have arisen from mistake, misrepresentation, or fraud. A different rule would, in every case, impose upon the court the necessity of inquiring into, and of determining the value of the property received by the party giving the promise. Such a course is obviously impracticable. In all cases, therefore, where the assumption or undertaking is founded upon the sale or exchange of merchandise or property, or upon other than a money consid- eration, and the promise has been deliberately made, the law looks no further than to see that the obligation rests upon a consideration, that is, one recognized as legal, and of some value. But the reason of the rule ceases, and hence the rule ceases, when applied to contracts to pay money and founded solely upon a money consideration. How far a forbearance to sue, or the giving of time, or the mere waiver of some right, may support a promise, we do not consider, since the question does not arise. Nor, for the like reason, do we consider how far the rule is qualified or limited by special statutes regulating interest; or in that class of contracts peculiar to the law merchant, as bottomry, respondentia, and the course of exchange. Aside from these and some other exceptions, at common law a contract for the exchange of unequal sums of money at the same time, or at different times, when the element of time is no equivalent, is not binding; and in such cases courts may and do inquire into the equality of the contract; for its subject matter, upon both sides, has not only a 214 FORMATION OF CONTRACT. [Part II. fixed value, but is itself the standard of all values ; and so, for the difference of value, there is no consideration. In this prin- ciple, the earliest prohibitions — earlier even than the time of Alfred — and the later legislative enactments against usury, both in England and in this country, have their origin. The rule is deemed to be founded in good policy. In the case before us, the only, legal consideration the defend- ants received was one dollar, for which they engaged to pay a much larger sum. The case, therefore, falls within the principle adverted to. The consideration was not only unequal, but grossly so. It was a mere nominal consideration; if even received by the defendants, it was, no doubt, regarded as such by them, and intended as such by the promisees. It was, at best, purely technical and colorable, and obviously is wanting in that degree of equitable equality sufficient to support the promise declared upon. The demurrer to the first count is therefore sustained. Chap. III. § 1.] CAPACITY OF PARTIES. 215 CHAPTER III. CAPACITY OF PARTIES. § 1. Political status. UNITED STATES v. GKOSSMAYER. 9 WALLACE (U. S.), 72. — 1869. This case was an appeal from the Court of Claims, and was thus: Elias Einstein, a resident of Macon, Georgia, was indebted, when the late rebellion broke out, to Grossmayer, a resident of New York, for goods sold and money lent, and while the war was in progress a correspondence on the subject was maintained through the medium of a third person, who passed back and forth several times between Macon and New York. The communica- tion between the parties resulted in Grossmayer requesting Einstein to remit the amount due him in money or sterling exchange, or, if that were not possible, to invest the sum in cotton and hold it for him until the close of the war. In pursuance of this direction — and, as it is supposed, because money or sterling exchange could not be transmitted — Einstein purchased cotton for Grossmayer, and informed him of it; Gross- mayer expressing himself satisfied with the arrangement. The cotton was afterwards shipped as Grossmayer's to one Abraham Einstein, at Savannah, who stored it there in his own name, in order to prevent its seizure by the rebel authorities. It remained in store in this manner until the capture of Savannah, in Decem- ber, 1864, by the armies of the United States, when it was reported to our military forces as Grossmayer's cotton, and taken by them and sent to New York and sold. Grossmayer now preferred a claim in the Court of Claims for the residue of the proceeds, asserting that he was within the protection of the Captured and Abandoned Property Act. 216 FORMATION OF CONTRACT. [Part II. That court considering that the purchase by Elias Einstein for Grossmayer was not a violation of the war intercourse acts set forth in the preceding case, decided that he was so, and gave judgment in his favor. The United States appealed. Mk. Justice Davis delivered the opinion of the court. G-rossmayer insists that he is within the protection of the Captured and Abandoned Property Act, but it is hard to see on what ground he can base this claim for protection. It was natural that Grossmayer should desire to be paid, and creditable to Einstein to wish to discharge his obligation to him, but the same thing can be said of very many persons who were similarly situated during the war, and if all persons in this condition had been allowed to do what was done in this case, it is easy to see that it would have produced great embarrassment and obstructed very materially the operations of the army. It has been found necessary, as soon as war is commenced, that business intercourse should cease between the citizens of the respective parties engaged in it, and this necessity is so great that all writers on public law agree that it is unlawful, without any express declaration of the sovereign on the subject. But Congress did not wish to leave any one in ignorance of the effect of war in this regard, for as early as the 13th of June, 1861, it passed a Non-intercourse Act, which prohibited all com- mercial intercourse between the States in insurrection and the rest of the United States. It is true the President could allow a restricted trade, if he thought proper; but in so far as he did allow it, it had to be conducted according to regulations prescribed by the Secretary of the Treasury. There is no pretense, however, that this particular transaction was authorized by any one connected with the Treasury Depart- ment, and it was, therefore, not only inconsistent with the duties growing out of a state of war, but in open violation of a statute on the subject. A prohibition of all intercourse with an enemy during the war affects debtors and creditors on either side, equally with those who do not bear that relation to each other. We are not disposed to deny the doctrine that a resident in the territory of one of the belligerents may have, in time of war, an agent residing in the territory of the other, to whom his debtor could Chap. III. § 1.] CAPACITY OF PARTIES. 217 pay his debt in money, or deliver to him property in discharge of it, but in such a case the agency must have been created before the war began, for there is no power to appoint an agent for any ^purpose after hostilities have actually commenced, and to this effect are all the authorities. The reason why this cannot be done is obvious, for while the war lasts nothing which depends on commercial intercourse is permitted. In this case, if Einstein is to be considered as the agent of Grossmayer to buy the cotton, the act appointing him was illegal, because it was done by means of a direct communication through a messenger who was in some manner not stated in the record able to pass, during the war, between Macon and New York. It was not necessary to make the act unlawful that Grossmayer should have communicated personally with Einstein. The business intercourse through a middle man, which resulted in establishing the agency, is equally within the condemnation of the law. Besides, if, as is conceded, Grossmayer was prohibited from trading directly with the enemy, how can the purchase in ques- tion be treated as lawful when it was made for him by an agent appointed after his own disability to deal at all with the insur- gents was created? It is argued that the purchase by Einstein was ratified by Grossmayer, and that being so, the case is relieved of difficulty; but this is a mistaken view of the principle of ratification, for a transaction originally unlawful cannot be made any better by being ratified. In any aspect of this case, whether the relation of debtor and creditor continued, or was changed to that of principal and agent, the claimant cannot recover. As he was prohibited during the war from having any dealings with Einstein, it follows that nothing which both or either of them did in this case could have the effect to vest in him the title to the cotton in question. Not being the owner of the property, he has no claim against the United States. The judgment of the Court of Claims is reversed, and the cause is remanded to that court with directions to enter an order Dismissing the petition.^ 1 See also Kershaw y. Kelsey, 100 Mass. 561. 218 FORMATION OF CONTRACT. [Part U. § 2. Infants. TEUEBLOOD v. TEUEBLOOD. 8 INDIANA, 195. — 1856. Appeal from the Vigo Circuit Court. Peekins, J. Bill in chancery, under the old practice, to compel a specific performance, and so set aside a fraudulent deed. Bill dismissed. The facts of the case, so far as material to its decision, are as follows : In 1845, William Trueblood was an infant, and owner of a piece of land. At that date, Eichard J. Trueblood, the father of said William, executed a title-bond to one Nathan Trueblood, whereby he obligated himself to cause to be conveyed to him, said Nathan, the piece of land belonging to William, after the latter should become of age. The conveyance was to be upon a stated consideration. The bond is single — simply the bond of Eichard — and William is nowhere mentioned in it as a party, but his name is signed with his father's at the close of the condition, as may be supposed, in signification of his assent to the execution pf the instrument by his father. We shall so treat his signature to the bond. After William became of age, it is claimed that he ratified the bond, and afterwards sold and conveyed the land to another — Eobert Lockridge — who had notice, etc. This bill was filed in order to have the deed to Lockridge set aside, and a conveyance decreed to Nathan Trueblood, pursuant to the terms of the bond. The court below, as we have stated, refused to enter such a decree, and held, as counsel inform us, that the bond was not susceptible of ratification by William Trueblood; and whether it was or not is the important question in the case ; for if the bond was not susceptible of such ratification, we need not inquire into the alleged facts which it is claimed evidence that such an act had been done. As we have seen, the bond is not, in terms, the bond of Wil- liam Trueblood. He could not, by virtue of its express provis- ions, be sued upon it. Where a father signs his name to articles of apprenticeship of his son, simply to signify his assent to them, he cannot be a party to a suit upon the articles. 5 Ind. B. 538. Chap. III. § 2.] CAPACITY OF PARTIES. 219 If the bond, then, can in any light be regarded as the contract of William Trueblood, it must be because his father may be con- sidered his agent in executing it. Can, then, an infant, after arriving at age, ratify the act of his agent, performed while he was an infant? This depends upon whether his appointment of an agent is a void or voidable act. If the former, it cannot be ratified (5 Ind. R. 353); if the latter, it can be. Reeves' Dom. Rel. 240. In the first volume of American Leading Cases (3d ed., p. 248, et seq.) the doctrine. is laid down, as the result of the American cases on the subject, that the only act an infant is incapable of performing, as to contrapts, is the appointment of an agent or attorney. Whether the doctrine is founded in solid reasons, they admit, may be doubted ; but assert that there is no doubt but that it is law. See the cases there collected. The law seems to be held the same in England. In Doe v. Roberts (16 M. and W. 778), a case slightly like the present in some respects, the attorney, in argument, said : " Here a tenancy has been created, either by the children, or by Hugh Thomas, acting as their agent." Parke, B., replied: "That is the fallacy of your argument. An agreement by an agent cannot bind an infant. If an infant appoints a person to make a lease, it does not bind the infant, neither does his ratification bind him. There is no doubt about the law; the lease of an infant, to be good, must be his own personal act." So, here, had the bond been the personal act of the infant, he could have ratified it. It would have been simply voidable. But the bond of his agent, or one having assumed to act as such, is void, and not capable of being ratified. See-8 Blackf. 345. The decree below must, therefore, be affirmed with costs. GooKiNS, J., having been concerned as counsel, was absent. Per Ouriam. The decree is affirmed with costs.* 1 But see Hastings v. Dollarhide, 24 Cal. 195 (1864) ; Hardy v. Waters, 38 Me. 460 (1853), holding that the transfer by indorsement of a promissory note by the agent of an infant payee is voidable and not void. " From a careful examination of the modern decisions and text writers, we are satisfied that the following propositions may be regarded as settled : first, that an infant's contracts for necessaries are as valid and binding upon the infant as the contracts of an adult, and that such contracts cannot be 220 FORMATION OF CONTRACT. [Pabt II. TEAINEE V. TEUMBULL. 141 MASSACHUSETTS, 527. — 1886. C. Allen, J. The practical question in this case is, whether the food, clothing, etc., furnished to the defendant were neces- saries for which he should be held responsible. This question must be determined by the actual state of the case, and not by- appearances. That is to say, an infant who is already well provided for in respect to board, clothing, and other articles suitable for his condition, is not to be held >^ responsible if any one supplies to him other board, clothing, etc., although such person did not know that the infant was already well supplied. Angel v. McLellan, 16 Mass. 28; Swift v. Bennett, 10 Cush. 436; Davis V. Caldwell, 12 Cush. 512; Barnes v. Toye, 13 Q. B. D. 410. So, on the other hand, the mere fact that an infant, as in this case, had a father, mother, and guardian, no one of whom did anything towards his care or support, does not prevent his being bound to pay for that which was actually necessary for him when furnished. The question whether or not the infant made an express promise to pay is not important. He is held on a promise implied by law, and not, strictly speaking, on his actual promise. The law implies the promise to pay, from the necessity of his situation; just* as in the case of a lunatic. 1 Ohit. Con. (11th Am. ed.) 197; Hyman v. Cain, 3 Jones (N. C), 111; Richardson v. Strong, 13 Ired. 106; Oay v. Ballou, 4 Wend. 403; Epperson v. Nugent, 57 Miss. 45, 47. In other words, he is liable to pay only what the necessaries were rea- sonably worth, and not what he may improvidently have agreed disaffirmed, and need not be ratified before they can be enforced ; second, the contract of an infant appointing an agent or attorney in fact is absolutely void and incapable of ratification ; third, any contract that is illegal, by reason of being against a statute or public policy, is absolutely void and incapable of ratification ; fourth, all other contracts made by an infant are voidable only, and may be afBrmed or disaffirmed by the infant at his elec- tion when he arrives at his legal majority. The second proposition may not be founded in solid reason, but it is so held by all the authorities." Fetrow V. Wiseman, 40 Ind. 148, 155. See also Harner v. Dipple, 31 Ohio St. 72 ; Mustard v. Wohlford''s Heirs, 15 Gratt. (Va.) 329. Chap. III. § 2.] CAPACITY OF PARTIES. 221 to pay for them. If he has made an express promise to pay, or has given, a note in payment for necessaries, the real value -will be inquired into, and he will be held only for that amount. Earle v. Beed, 10 Met. 387; Locke v. Smith, 41 N. H. 346; Met. Con. 73, 75. But it is contended that the board, clothing, etc., furnished to the defendant were not necessaries, because he, " being a pauper and an inmate of an almshouse, was supplied with necessaries suitable to his estate and condition, and, under the circum- stances, it would have been the duty of the guardian to place him in the almshouse." It is true that a guardian is not obliged to provide for the support of his ward, when he has no property of the ward available for that purpose ; and if he has no other resource, no doubt he may, under such circumstances, place the ward in an almshouse. The authorities cited for the defendant go no further than this. Spring v. Woodworth, 2 Allen, 206. But this by no means implies that a boy with an expectation of a fortune of $10,000 should be brought up in an almshouse, if any suitable person will take him and bring him up properly, on the credit of his expectations. On the other hand, it seems to us highly proper for a parent or guardian, under such circumstances, to do what the father did in this case; leaving it for the boy's guardian to see to it that an unreasonable price is not paid. Looking to the advantage of his subsequent life, as well as to his welfare for the time being, his transfer from an almshouse to a suitable person, by whom he would be cared for and educated, would certainly be judicious ; and the support and education fur- nished to an infant of such expectations, whose means were not presently available, fall clearly within the class of necessaries. In Met. Con. 70, the authority of Lord Mansfield is cited to the point that a sum advanced for taking an infant out of jail is for necessaries. BucM7ighamsMre v. Drury, 2 Eden, 60, 72. See also Clarke v. Leslie, 5 Esp. 28. Giving credit to the infant's expectation of property is the same as giving credit to him. There was no error in refusing to rule, as matter of law, that, upon all the facts in evidence, the action could not be maintained. The findings of all matters of fact, of course, are not open to revision. Exceptions overruled. 222 FOKMATION OF CONTRACT. [Pabt IL § 3. Corporations. SLATER WOOLLEN CO. v. LAMB. 143 MASSACHUSETTS, 420. — 1887. Action upon contract for goods sold and delivered. Contract, upon an account annexed for goods sold and deliv- ered. Field, J. If we assume that the truth of the exceptions has been established, we think that they must be overruled. The substance of the defendant's contentions is, that the Slater Woollen Company, having been incorporated " for the purpose of manufacturing fabrics of wool and worsted or of a mixture there- of with other textile materials," could not, by and in the name of persons who were in fact keeping a store as its agents, but whose agency was undisclosed, sell groceries, dry goods, and other simi- lar articles to the defendant, who was not employed by the com- pany, and then maintain an action against him to recover either the price or the value of the goods sold. If the goods were the property of the plaintiff, and were sold by its agents, the plaintiff can sue as an undisclosed principal. It was said of Chester Glass Co. v. Dewey (16 Mass. 94) in Davis V. Old Colony Railroad (131 Mass. 268, 273) that "the leading reason assigned was, ' the legislature did not intend to prohibit the supply of goods to those employed in the manufac- tory; ' in other words, the contract sued on was not ultra vires. That reason being decisive of the case, the further suggestion in the opinion, ' Besides, the defendant cannot refuse payment on this ground ; but the legislature may enforce the prohibition, by causing the charter to be revoked, when they shall determine that it has been abused,' was, as has been since pointed out, wholly ohiter dictum." But the weight of authority, we think, supports the last reason given in its application to the facts of the present case. There is a distinction between a corporation making a contract in excess of its powers, and making a contract which it is prohibited by statute from making, or which is against public policy or sound morals; and there is also a distinction between suing for the breach of an executory contract and suing to recover the value of property which has been received and Chap. III. § 3.] CAPACITY OF PARTIES. 223 retained by the defendant under a contract executed on the part of the plaintiff. If it be assumed, in favor of the defendant, that the contracts of sale in the case at bar were ultra vires of the corporation, they were not contracts which were prohibited, or contracts which were void as against public policy or good morals ; the defect in them is, that the corporation exceeded its powers in making them. The defendant, under these contracts, has received the goods, and retained and used them. Either the corporation must lose the value of its property, or the defendant must pay for it ;• in such an alternative, courts have held, on one ground or an- other, that an action can be maintained when the sole defect is a want of authority on the part of the corporation to make the contract. We think that the corporation can maintain an action of contract against the defendant to recover the value of the goods. The defendant is not permitted to set up this want of authority as a defense ; and as the form of the transaction was that of contract, such should be the form of the action. We are not required to determine whether an action can be maintained to recover the price, as distinguished from the value of the goods, as no exception has been taken to the measure of damages. Chester Olass Go. y. Dewey, uhi supra; Whitney Arms Co. V. Barlow, 63 IST. Y. 62; Woodruff v. Erie Railroad, 93 N. Y. 609; Nassau Bank v. Jones, 95 N. Y. 115; Pine Gfrove Township v. Talcott, 19 Wall. 666, 679; National Bank v. Mat- thews, 98 U. S. 621; National Bank v. Whitney, 103 TJ. S. 99. See Whitney v. Leominster Savings Bank, 141 Mass. 86; Bow- 'ditch V. New England Ins. Co., 141 Mass. 292; Wright v. Pipe Line Co., 101 Penn. St. 204. Exceptions overruled.* 1 Upon the last point in the foregoing opinion : Gray, J., in Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24, 60 (1890) : "A contract ultra vires being unlawful and void, not because it is in itself immoral, but because the corporation, by the law of its creation, is incapable of making it, the courts, while refusing to maintain any action upon the unlawful contract, have always striven to do justice between the parties, so far as could be done consistently with adherence to law, by per- mitting property or money parted with on faith of the unlawful contract, to be recovered back or compensation to be made for it. 224 FORMATION OF CONTRACT. \Pi.RT U. § 4. Lunatics and drunken persons. GRIBBEN V. MAXWELL. 34 KANSAS, 8. — 1885. Error from Cowley District Court. ' Action brought December 7, 1883, by Noah Gribben, as guardian of Olive E. Gribben, a lunatic, against Samuel E. Maxwell, to set aside a conveyance executed by Olive E. Gribben on June 11, 1883. HoRTON, C. J. As a general rule, the contract of a lunatic is void per se. The concurring assent of two minds is wanting. " They who have no mind cannot ' concur in mind ' with one " In such case, however, the action is not maintained upon the unlawful contract nor according to its terms, hut on an implied contract of the defend- ant to return, or, failing to do that, to make compensation for, property or money which it has no right to retain. To maintain such an action is not to affirm, but to disaffirm the unlawful contract." Walton, J., in Brunswick Gas Light Co. v. United Gas Fuel & Light Co., 85 Me. 632, 541 (1893) : "But it is claimed that, inasmuch as the defendant company took and held possession of the plaintiff company's works by virtue of the lease, ultra vires is no defense to an action to recover the agreed rent. We do not doubt that the plaintifi company is entitled to recover a reasonable rent for the time the defendant company actually occupied the works, but do not think the amount can be measured by the ultra vires agreement. We think that in such cases the recovery must be had upon an implied- agreement to pay a reasonable rent ; and that while the ultra vires agreement may be used as evidence, in the nature of an admission, of what is a reasonable rent, it cannot be allowed to govern or control the amount. It seems to us that it would he absurd to hold that the 'ultra vires lease is void, and at the same time hold that it governs the rights of the parties with respect to the amount of rent to be recovered. A void instrument governs nothing. We think the correct rule is the one stated by Mr. Justice Gray in a recent case in the United States Supreme Court. He said that a contract made by a corpora- tion which is unlawful and void, because beyond the scope of its corporate powers, does not by being carried into execution become lawful and valid, and that the proper remedy of the aggrieved party is to disaffirm the contract and sue to recover as on a quantum meruit the value of what the defendant has actually received the benefit of. Pittsburgh &e. v. Keokuk ifcc, 131 U. S. 371. We think this is the correct rule. 2 Beach on Corp. § 423, and cases there cited." On the other hand, the doctrine of equitable estoppel to prevent defendant from relying upon the invalidity of the contract is applied in Denver Fire Ins. Co. V. McClelland, 9 Col. 11, 22 (1885). Chap. III. § 4.] CAPACITY OF PARTIES. 225 another; and as this is the essence of a contract, they cannot enter into a contract." 1 Parsons on Contracts (6th ed.), 383; Powell V. Powell, 18 Kas. 371. Notwithstanding this recognized doctrine, the decided cases are far from being uniform on the subject of the liability or extent of liability of lunatics for their contracts. An examination of the cases upon the subject shows that there is an irreconcilable conflict in the authorities. We think, however, the weight of authority favors the rule that where the purchase of real estate from an insane person is made, ' and a deed of conveyance is obtained in perfect good faith, before an inquisition and finding of lunacy, for a suflBcient consideration, without knowledge of the lunacy, and no advantage is taken by ihe purchaser, the consideration received by the lunatic must be returned, or offered to be returned, before the conveyance can be set aside at the suit of the alleged lunatic, or one who repre- sents him. Wright, C. J., in Corbit v. Smith (7 Iowa, 60), thus states the law: " In the next place, a distinction is to be borne in mind between con- tracts executed and contracts executory. The latter the courts will not in general lend their aid to execute where the party sought to be afiected was at the time incapable, unless it may be for necessaries. If, on the other hand, the incapacity was unknown, no advantage was taken, the contract has been executed, and the parties cannot be put in statu quo, it will not be set aside." In Behrens v. McKenzie (23 Iowa, 333) Dillon, J., said: "But with respect to executed contracts, the tendency of modem decision is to hold persons of unsound mind liable in cases where the transaction is in the ordinary course of business, is fair and reasonable, and the mental condition was not known to the other party, and the parties cannot be put in statu quo." In Allen v. Berryliill (27 Iowa, 534) it was decided that: "Where a contract made by an insane person has been adopted, and is sought to be enforced by the representatives of such person, it is no defense to the sane party to show that the other party was non compos mentis at the time the contract was made." Cole, J., dissenting, expressed his views as follows: " In every case of contract with a lunatic, which has been executed in 226 FORMATION OF CONTRACT. [Pabt II. whole or in patt, the fact that the parties can or cannot be placed in statu qua, will have an important bearing in determining whether such con- tract shall stand. . . . When the parties cannot be placed in statu quo, and the contract is fair, was made in good faith and without knowledge of the lunacy, it; wiU not be set aside, even at the suit of the lunatic. And this, not because the contract was valid or binding, but because an innocent party, one entirely without fault or negligence, might, and in the eyes of the law would, be prejudiced by setting it aside. Both parties are faultless, and therefore stand equal before the law, and in the forum of conscience. The law will not lend its active interposition to effectuate a wrong or prejudice to either ; it will suffer the misfortune to remain where nature has cast it." In Bank v. Moore (78 Pa. St. 407) a lunatic was held liable upon a note discounted by him at the bank; and Mr. Justice Paxson, in delivering the opinion of the court, said, among other things : " Insanity is one of the most mysterious diseases to which humanity is subject. It assumes such varied forms and produces such opposite effects as frequently to baffle the ripest professional skill and the keenest observa- tion. In some instances it aifects the mind only in its relation to or connection with the particular subject, leaving it sound and rational upon all other subjects. Many insane persons drive as thrifty a bargain as the shrewdest business man without betraying in manner or conversa^ tion the faintest trace of mental derangement. It would be an unreason- able and unjust rule that such persons should be allowed to obtain the property of innocent parties and retain both the property and its price. Here the bank in good faith loaned the defendant the money on his note. The contract was executed, so far as the consideration is concerned, and it would be alike derogatory to sound law and good morals that he should be allowed to retain it to swell the corpus of his estate.'' Mr. Pomeroy, in his treatise on "Equity Jurisprudence," says: " In general a lunatic, idiot, or person completely non compos mentis, is incapable of giving a true consent in equity, as at law ; his conveyance or contract is invalid, and will generally be set aside. While this rule is generally true, the mere fact that a party to an agreement was a luna- tic will not operate as a defehse to its enforcement or as ground for its cancellation. A contract, executed or ex!ecutory, made with a lunatic in good faith without any advantage taken of his position, and for his own benefit, is valid both in equity and at law. And where a conveyance or contract is made in ignorance of the insanity, with no advantage taken, and with perfect good faith, a court of equity will not set it aside if the j^arti'eS cAnnot be restoried to their original position, and injustice would Chap. III. § 4.] CAPACITY OP PABTIES. 227 be done." 2 PomeroyU Eq. Juris. § 946, p. 465. See also Scanlan v. Cobb, 85 ni. 296 ; Young v. Stevens, 48 N. H. 133 ; Eaton v. Eaton, 37 N. J. L. 108; Freed v. Brown, 55 lud. 310; Ashcrafi v. De Armond, 44 Iowa, 229. Applying tlie law thus declared to the case at bar, the District Court cbmmitted no error in overruling the demurrer. It appears f rotn the pleadings that the conveyance was executed and delivered before an inquisition and finding of lunacy; that no offer was made to return to the purchaser his money paid for the conveyance of the land; and the answer sets forth good faith on the part of the purchaser; that he paid a fair and reasonable price for the land; that he had no knowledge or information of the lunacy of Olive E. G-ribben, the ward of the plaintiff; that there was noth- ing in her looks or conduct at the time to indicate that she was of unsound mind, or incapable of transacting business; but, on the contrary, that she was apparently in possession of her full mental faculties, and was then, and had been for a long time prior, engaged in the transaction of business for herself. Our attention is called to the case of Powell v. Powell, supra, as decisive that the conveyance in question is void; but a considera- tion of the views above expressed and the authorities cited show that all the reasons to avoid a marriage with a lunatic do not apply in the case of a deed obtained in good faith from a lunatic, executed before an inquisition and finding of lunacy. We have examined fully the authorities on the other side of ths question, and especially In the matter of DeSilver, 5 Eawle (1835), 110; Gibson Y. Soper, 6 Gray, 279; Van Deusenv. Sweet, 51 N. Y. 378; Dexter v. Hall, 82 U. S. 9. If otwithstailding the recognized ability of the Judges rendering thesis decisions, we are better satisfied with the doctrine herein announced. The order and judgment of the District Court will be affirmed. All the Justices concurring.^ I See also Toung v. Stevens, 48 N. H. 133. 228 FORMATION OF CONTRACT. [Pabt tt BAERETT v. BUXTON. 2 AIKENS (Vt.), 167. — 1826. Prentiss, J. This is an action upon a promissory note, exe- cuted by the defendant to the plaintiff for the sum of $1000, being the difference agreed to be paid the plaintiff on a contract for the exchange of lands. The agreement of exchange was in writing, and the plaintiff afterwards tendered to the defendant a deed, in performance of his part of the agreement, which the defendant refused. The defendant offered evidence to prove, that at the time of executing the note and agreement he was intoxicated, and thereby incapable of judging of the nature and consequences of the bargain. The court refused to admit the evidence, without proof that the intoxication was procured by the plaintiff. The question is, whether the evidence was admissible as a defense to the action, or, in other words, whether the defend- ant could be allowed to set up his intoxication to avoid the contract. This question has been already substantially decided by the court on the present circuit; but the importance of the question, and the magnitude of the demand in this case, have led us to give it further consideration. According to Beverley's case (4 Co. 123) a party cannot set up intoxication in avoidance of his contract under any circumstance. Although Lord Coke admits, that a drunkard, for the time of his drunkenness, is non compos mentis, yet he says, "his drunkenness shall not extenuate his act or offense, but doth aggravate his offense, and doth not derogate from his act, as well touching his life, lands, and goods, as any- thing that concerns him." He makes no distinction between criminal and civil cases, nor intimates any qualification of his doctrine, on the ground of the drunkenness being procured by the contrivance of another who would profit by it. His doctrine is general, and without any qualification whatever; and connected with it, he holds, that a party shall not be allowed to stultify himself, or disable himself, on the ground of idiocy or lunacy. The latter proposition is supported, it is true, by two or three cases in the Year Books, during the reigns of Edward III. and Chap. III. § 4.] CAPACITY OF PABTIES. 229 Henry VI. ; by Littleton, s. 405, who lived in the time of Henry VI. ; and by Stroud v. Marshall, Cro. Eliz. 398, and Cross v. Andrews, Cro. Eliz. 622. Sir William Blackstone, however, who traces the progress of this notion, as he calls it, considers it con- trary to reason, and shows that such was not the ancient common law. The Eegister, it appears, contains a writ for the alienor himself to recover lands aliened by him during his insanity; and Britton states, that insanity is a sufficient plea for a man to avoid his own bond. Eitzherbert also contends, "that it stands with reason that a man should show how he was visited by the act of God with infirmity, by which he lost his memory and discretion for a time." Blackstone considers the rule as having been handed down from the loose cases in the times of Edward III. and Henry VI., founded upon the absurd reasoning, that a man cannot know in his sanity what he did when he was non compos mentis ; and ' he says, later opinions, feeling the inconvenience of the rule, have, in many points, endeavored to restrain it. 2 Black. Oom. 291. In Thompson v. Leach (3 Mod. 301) it was held,- that the deed of a man non compos mentis was not merely voidable, but was void ab initio, for want of capacity to bind himself or- his prop- erty. In Yates v. Boen (2 Stra. 1104) the defendant pleaded non est factum to debt on articles, and upon the trial, offered to give lunacy in evidence. The chief justice at first thought it ought not to be admitted, upon the rule in Beverley's case, that a man shall not stultify himself; but on the authority of Smith v. Carr, in 1728, where Chief Baron Pengelly in a like case admitted it, and on considering the case of Thompson v. Leach, the chief justice suffered it to be given in evidence, and the plaintiff became nonsuit. The most approved elementary writers and compilers of the law refer to this case, and lay it down as settled law, that lunacy may be given in evidence on the plea of non est factum, by the party himself; and it is said to have been so ruled by Lord Mansfield, in Chamberlain of London v. Evans, mentioned in note to 1 Chit. PI. 470. In this country, it has been decided in several instances, that a party may take advantage of his own disability, and avoid his contract, by showing that he was insane and inca- pable of contracting. Ricey. Peet, 15 Johns. Eep. 503; Webster V. Woodford, 3 Day's Eep. 90. These decisions are founded in the 230 FORMATION OF CONTRACT. [Pabt H. law of nature and of justice, and go upon the plain and true ground, that the contract of a party non compos mentis is abso- lutely void, and not binding upon him. The rule in Beverley's case, as to lunacy, therefore, is not only opposed to the ancient common law, and numerous authorities of great weight, but to the principles of natural right and justice, and cannot be recog- nized as law; and it is apprehended that the case is as little to be regarded as authority in respect to intoxication, which rests essentially upon the same principle. It is laid down in Buller's N. P. 172, and appears to have been decided by Lord Holt, in Cole v. Bobins, there cited, that the defendant may give in evidence under the plea of non est factum to a bond, that he was made to sign it when he was so drunk that he did not know what he did. And in Pitt v. Smith (3 Campb. 'Gas. 33), where an objection was made to an attesting witness being asked whether the defendant was not in a complete state of intoxication when he executed the agreement. Lord EUenborough says : " You have alleged that there was an agreement between the parties ; but there was no agreement, if the defendant was intoxi- cated in the manner supposed. He had not an agreeing mind. Intoxication is good evidence upon a plea of non est factum to a deed, of non concessit to a grant, and of non assumpsit to a promise." Chitty, Selwyn, and Phillipps lay down the same doc- trine; and Judge Swift in his digest says, that an agreement, signed by a man in a complete state of intoxication, is void. 1 Chit. PL 470; Selw. N.P.563; 1 Phil.Ev. 128; 1 Swift's Dig. 173. In these various authorities it is laid down generally, and without any qualification, that drunkenness is a defense, and no intimation is made of any distinction, founded on the intoxication being procured by the party claiming the benefit of the contract. It is true, that in Johnson v. Medlicott (3 P. Wms. 130) that cir- cumstance was considered essential to entitle the party to relief in equity against his contract. Sir Joseph Jekyll held, that the having been in drink was not any reason to relieve a man against his deed or agreement, unless the party was drawn into drink by the management or contrivance of him who gained the deed. But from what is said in 1 Fonb. Eq. 68, it would not seem that the author considered this circumstance as indispensable. He CH4.P. III. § 4.] CAPACITY OF PARTIES. 231 says, equity will relieve, especiallyi if the drunkenness were caused by the fraud or contrivance of the other p^rty, and he is so excessively drunk, that he is utterly deprive^ of ^^^ i^^® ^^ ^^^ reason or understanding; for it can by no means be a serious and deliberate consent; and without this, no contract can be binding by the law of nature. In Spiers v. Higgins, decided at the Rolls in 1814, and cited in 1 Mad. Gh. 304, a bill tiled for a specific performance of an agreement, which was entered into with the defendant when drunk, was dismissed with costs, although the plaintiff did not contribute to make the defendant drunk. On principle, it would seem impossible to maintain, that a contract entered into by a party when in a state of complete intoxication, and deprived of the use of his reason, is binding upon him, whether he was drawn into that situation by the con- trivance of the other party or not. It is an elementary principle of law, that it is of the essence of every contract, that the party to be bound should consent to whatever is stipulated, otherwise no obligation is imposed upon him. If he has not the command of his reason, he has not the power to give his assent, and is incapable of entering into a contract to bind himself. Accordingly, Pothier holds (Vol. 1. o. I, a. 4, s. 1) that ebriety, when it is such as to take away the use of reason, renders the person who is m that condition, while it continues, unable to contract, since it renders him incapable of assent. And it seems Heineccius and PufEendorf both consider contracts entered into under such cir- cumstances as invalid. By the Scotch law, also, an obligation granted by a person while he is in a sta,te of absolute and total drunkenness, is ineffectual, because the grantor is incapable of consent; but a lesser degree of drunkenness, which only darkens reason, is not sufBcient. Ersk. Inst. 4A7. The author of the late excellent treatise on the principles and practice of the court of chancery, after reviewing the various cases in equity on the subject, and citing the Scotch law with approbation, observes: "The distinction thus taken seems reasonable; for it never can be said that a person absolutely drunk has that freedom of mind generally esteemed necessary to a deliberate consent to a contract; the reasoning faculty is for a time deposed. At law it ha^ been held, that upon non est factum the defendant may give in evi- 232 FORMATION OF CONTRACT. [Part II. dence, that they made him sign the bond when he was so drunk that he did not know what he did. So a will made by a drunken man is invalid. And will a court of equity be less indulgent to human frailty? It seems to be a fraud to make a contract with a man who is so drunk as to be incapable of deliberation." 1 Mad. Ch. 302. Mr. Maddock seems to consider it as settled, that at law, complete intoxication is a defense, and that it ought to be a sufficient ground for relief in equity ; and, indeed, it would seem difficult to come to a different conclusion. As it respects crimes and torts, sound policy forbids that intoxication should be an excuse; for if it were, under actual or feigned intoxication, the most atrocious crimes and injuries might be committed with impunity. But in questions of mere civil concern, arising ex contractu, and affecting the rights of property merely, policy does not require that any one should derive an unjust profit from a bargain made with a person in a state of intoxication, although brought upon himself by his own fault, or that he should be a prey to the arts and circumvention of others, and be ruined, or even embarrassed by a bargain, when thus deprived of his reason. It is a violation of moral duty to .take advantage of a man in that defenseless situation, and draw him into a contract; and if the intoxication is such as to deprive him of the use of his reason, it cannot be very material whether it was procured by the other party or was purely voluntary. The former circumstance would only stamp the transaction with deeper turpitude, and make it a more aggravated fraud. The evidence which was offered and rejected at the trial in the case before us, went not only to show that the defendant was so intoxicated at the time of giving the note as to be incapable of the exercise of his understanding, but that the contract was grossly unequal and unreasonable ; and, both on principle and authority, we think the evidence was admissible, and that a new trial must be granted. New trial granted. Chap. III. § 5.] CAPACITY OF PARTIES. 233 § 5. Married Mvomen. WELLS V. CAYWOOD. 3 COLORADO, 487. — 1877. Thatcher, C. J. This was an action of ejectment brought by the appellee against the appellant in the court below. On the 11th day of August, 1873, Albert W. Benson, being at the time the owner in fee of the premises in dispute, made a promissory note for the sum of f 250, payable to Catherine D. Caywood, the wife of William W. Caywood, two years after the date thereof. On the same date, to secure the payment of this note, Mr. Benson conveyed to William W. Caywood, as trustee, the disputed premises, with power to sell and dispose of the same at public auction in the manner prescribed in said deed of trust, in case the grantor therein should make default in the payment of the promissory note, or any part thereof, or the interest thereon, and to make, ^execute, and deliver to the purchaser, at such sale, a good and sufB.cient deed of conveyance for the premises sold. After the maturity of the note, Mr. Benson having made default in its payment, the trustee advertised and sold and conveyed the premises to Mrs. Caywood, the then holder of the note. The deed of trust and the note were offered and read in evidence with- out objection. To the admission of the trustee's deed from Mr. to Mrs. Caywood, counsel for the defendant in the lower court objected, on the sole ground that it was a deed executed by a husband to his wife. This objection was overruled, the deed admitted in evidence, and an exception taken. The admission of the deed in evidence is assigned for error. This brings us to the consideration of the question of the relation of husband and wife under the laws of this State, with respect to the independent acquisition, enjoyment, and disposition of property. The general tendency of legislation in this country has been to make husband and wife equal in all respects in the eye of the law, to secure to each, untrammelled by the other, the full and free enjoyment of his or her proprietary rights, and to confer upon each the absolute dominion over the property owned by them respectively. The legislation of our own State upon this subject, although yet somewhat crude and imperfect, has doubt- 234 FOKMATION OF CONTRACT. [Part II. less been animated by a growing sense of the unjustly subordinate position assigned to married women by the common law, whose asperities are gradually softening and yielding to the demands of this enlightened and progressive age. The benignant principles of the civil law are being slowly but surely grafted into our system of jurisprudence. "In the civil law," says Sir William Blackstone (1 Blackstone' s Com. [Cooley] 444), "husband and wife are considered as two distinct persons, and may have separate estates, contracts, debts, and injuries, and, therefore, in our ecclesiastical courts, a woman may sue and be sued without her husband." The courts, — which have ever been conservative, and which have always been inclined to check, with an unsparing hand, any attempt at departure from the principles of the body of our law, which were borrowed from England, — in the States which were the first to pass enactments for the enlargement of the rights of married women, regarding such enactments as a violent innova- tion upon the common law, construed them in a spirit so narrow and illiberal as to almost entirely defeat the intention of the law-makers ; but generally with a promptness that left little room for doubt, a succeeding legislature would reassert, in a more unequivocal form, the same principles which the courts had before almost expounded out of existence. To understand the marked changes which our own legislation has wrought in this respect, it is necessary that we should consider some of the disabling incidents and burdens attendant upon coverture at com- mon law. At common law the husband and wife are one person, and as to every contract there must be two parties, it followed that they could enter into no contract with each other. " The very being or legal existence of the woman is suspended during the marriage, or at least is incorporated and consolidated into that of the husband, under whose wing, protection, and cover she per- forms everything." "Upon the principle of an union of person in husband and wife depend almost all the legal rights, duties, and disabilities that either of them acquire by marriage." 1 Cooley's Blackstone, 442. All the personal estate, as money, goods, cattle, household furniture, etc., that were the property and in possession of the Chap. III. § 5.] CAPACITY OF PARTIES. 235 wife at the time of the marriage, are actually vested in the hus- band, so that of these he might make any disposition in his life- time, without her consent, or might by will devise them, and they would, without any such disposition, go to the executors or administrators of the husband and not to the wife, though she survive him. Debts due to the wife are so far vested in the hus- band that he may, by suit, reduce them to possession. 2 Bacon's Abridgment, 21. The rents and profits of her land during cover- ture belonged to the husband. The law wrested from the wife both her personal estate and the profits of her realty, however much it might be against her will, and made them liable for his debts. An improvident husband had it in his power to impoverish the wife by dissipating her personal estate, and the profits of her realty over which she, under the law, by reason of the coverture, had no control. The wife in Colorado is the wife under our statutes, and not the wife at common law, and by our statutes must her rights be determined, the common law affecting her rights, as we shall presently see, having been swept away. By our laws it was declared that the property, real and per- sonal, which any woman may own at the time of her marriage, and the rents, issues, profits, and proceeds thereof, and any real, personal, or mixed property that shall come to her by descent, devise, or bequest, or be the gift of any person except her hus- band, shall remain her sole and separate property, notwithstand- ing her marriage, and not be subject to the disposal of her husband or liable for his debts. B. S. 1868, p. 454. The legislature, however, being reluctant to allow a married woman the absolute dominion over her own real property, further provided that she could only convey her estate in lands by unit- ing with her husband in any conveyance thereof, and acknowl- edging the same separate and apart from her husband. B. S. 1868, p. Ill, § 17. It was not to be expected that our laws would long be permitted to remain in this anomalous and incongruous condition, declaring in one section that the wife's real property should remain her separate estate, not subject to disposal by her husband, and in 236 FORMATION OF CONTRACT. [Part II. another that she could not convey it without the consent of her husband, which is necessarily implied by his uniting in a deed with her. By " an act concerning married women," approved February 12, 1874, it is provided in section 1, that any woman, while married, may bargain, sell, and convey real and personal property, and enter into any contract in reference to the same, as if she were sole. Section 2 provides that she may sue and be sued, in all matters, the same as if she were sole. Section 3 provides that she may contract debts in her own name, and upon her own credit, and may execute promissory notes, bonds, and bills of exchange, and other instruments in writing, and may enter into any contract the same as if she were sole. Section 4 repeals section 17 of chapter 17 of the Revised Statutes, which required the husband to unite with the wife in conveying her separate estate. This is, essentially, an enabling statute, and as such must be liberally construed to effectuate the purpose of its enactment. It confers, in terms, enlarged rights and powers upon married women. In contemplation of this statute, whatever may be the actual fact, a feme covert is no longer sub potestate viri in respect to the acquisition, enjoyment, and disposition of real and personal property. This statute asserts her individuality, and emanci- pates her, in the respects within its purview, from the condition of thraldom in which she was placed by the common law. The legal theoretical unity of husband and wife is severed so far as is necessary to carry out the declared will of the law-making power. With her own property she, as any other individual who is sui juris, can do what she will, without reference to any restraints or disabilities of coverture. Whatever incidents, privileges, and profits attach to the dominion of property, when exercised by others, attach to it in her hands. Before this statute her right to convey was not untrammelled, but now it is absolute without any qualification or limitation as to who shall be the grantee. Husband and wife are made strangers to each other's estates. There are no words in the act that prohibit her from making a conveyance directly to her husband, and it is not within the province of the court to supply them. When a right is conferred on an individual, the court cannot, Chap. III. § 5.] CAPACITY OF PARTIES. 237 without transcending its legitimate functions, hamper its exercise \>j imposing limitations and restrictions not found in the act conferring it. Were we to construe this enabling statute so as to deprive the wife of the right to elect to whom she will convey her property, we would, it is believed, thwart the legislative will whose wisdom we, as a court, are not permitted to question. The disability of husband and wife to contract with and convey to each other was, at common law, correlated and founded mainly upon the same principle, viz., the unity of baron and femme. The removal in respect to the wife, of a disability that is mutual and springing from the same source, removes it also as to the husband. The reason, which is the spirit and soul of the law, cannot apply to the husband, as it no longer applies to the wife. If she may convey to the husband, the husband may convey to the wife. Allen V. Hooper, 50 Me. 371; Stone v. Oazzam, 46 Ala. 269; Burdeno v. Amperse, 14 Mich. 91 ; Patten v. Patten, 75 111. 446. Perhaps the right of the husband when acting in a representa- tive capacity in autre droit to make a deed to his wife might be supported at common law. Go. Litt. 112 a, 187 b; Com. Dig., Baron and Femme, D. 1. This doctrine, however, is repudiated in New York (Leitch v. Wells, 48 Barb. 654) but sanctioned in Pennsylvania. Dundas' Appeal, 64 Pa. St. 332. We, however, rest our decision, not upon this mooted doctrine, but broadly upon the statute, under which a husband, when act- ing not in a representative capacity, but in his own right, has, as we have seen, the right to convey directly to the wife. * » * « « The court did not err in excluding the deed from Benson and wife to Wells. As we discover no error in the record, the judg- ment of the court below must be affirmed. Affirmed.^ 1 For a case showing the conservative attitude in some jurisdictions towards such married women's enabling acts as are apparently most sweeping in terms, see Seattle Board of Trade v. Hayden, 4 Wash. (State) 263 (1892). 238 FORMATION OF CONTRACT. [Pabt U. CHAPTER IV. KEALitT OF CONSENT. § 1. Mistake. (i.) Mistake as to the nature, or as to the existence of the contract. WALKER V. EBEKT. 29 WISCONSIN, 194. — 1871. Action on a promissory note, by a holder, who claims to have purchased it for full value, before maturity. Verdict for plaintiff. Defendant appeals. Dixon, C. J. The defendant, having properly alleged the same facts in his answer, offered evidence and proposed to prove by himself as a witness on the stand, that at the time he signed the supposed note in suit, he was unable to read or write the English language ; that when he signed the same, it was repre- sented to him as, and he believed it was, a certain contract of an entirely different character, which contract he also offered to produce in evidence ; that the contract offered to be produced Was a contract appointing him, defendant, agent to sell a certain patent right, and no other or different contract, and not the note in question; and that the supposed note was never delivered by the defendant to any one. It was at the same time stated that the defendant did not claim to prove that the plaintiff did not purchase the supposed note before maturity and for value. To this evidence the plaintiff objected, and the objection was sus- tained by the court, and the evidence excluded, to which the defendant excepted; and this presents the only question. We think it was error to reject the testimony. The two cases cited by counsel for the defendant (Foster v. McKinnon, L. R. 4 C. P. 704, and Whitney v. Snyder, 2 Lansing, 477) are very clear and explicit upon the point, and demonstrate, as it seems Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 239 to US, beyond any rational doubt, the invalidity of such paper, even in the hands of a holder for value, before maturity, without notice, the party whose signature to such a paper is obtained by fraud as to the character of the paper itself, who is ignorant of such character, and has no intention of signing it, and who is guilty of no negligence in affixing his signature, or in not ascer- taining the character of the instrument, is no more bound by it than if it were a total forgery, the signature included. The reasoning of the above cases is entirely satisfactory and conclusive upon this point. The inquiry in such cases goes back of all questions of negotiability, or of the transfer of the supposed paper to a purchaser for value, before maturity and without notice. It challenges the origin or existence of the paper itself; and the proposition is, to show that it is not in law or in fact what it purports to be, namely, the promissory note of the sup- posed maker. Tor the purpose of setting on foot or pursuing this inquiry, it is immaterial that the supposed instrument Is negotiable in form, or that it may have passed to the hands of a bona fide holder for value. Negotiability in such cases presup- poses the existence of the instrument a!S having been made by the party whose name is subscribed; for, until it has been so made and has such actual legal existence, it is absurd to talk about a negotiation, or transfer, or bona fide holder of it, within the meaning of the law merchant. That which, in contemplation of law, never existed as a negotiable instrument, cannot be held to be such; and to say that it is, and has the qualities of negotia- bility, because it assumes the form of that kind of paper, and thus to shut out all inquiry into its existence, or whether it is really and truly what it purports to be, is petitio principii — beg- ging the question altogether. It is, to use a homely phrase, putting the cart before the horse, and reversing the true order of reasoning, or rather preventing all correct reasoning and investi- gation, by assuming the truth of the conclusion, and so precluding any inquiry into the antecedent fact or premise, which is the first point to be inquired of and ascertained. For the purposes of this first inquiry, which must be always open when the objection is raised, it is immaterial what may be the nature of the supposed instrument, whether negotiable or not, or Whether transferred or 240 FORMATION OF CONTRACT. [Part II. negotiated, or to whom or in what manner, or for what considera- tion or value paid by the holder. It must always be competent for the party proposed to be charged upon any written instru- ment, to show that it is not his instrument or obligation. The principle is the same as where instruments are made by persons having no capacity to make binding contracts; as, by infants, married women, or insane persons ; or where they are void for other cause, as, for usury; or where they are executed as by an agent, but without authority to bind the supposed principal. In these and all like cases, no additional validity is given to the instrument by putting them in the form of negotiable paper. See Veeder v. Town of Lima, 19 Wis. 297 to 299, and authorities there cited. See also Thomas v. WatJcins, 16 Wis. 549. And identical in principle, also, are those cases under the registry laws where the bona fide purchaser for value of land has been held not to be protected when the recorded deed under which he purchased and claims turns out to have been procured by fraud as to the signature, or purloined or stolen, or was a forgery and the like. See Everts v. Agnes, 4 Wis. 343, and the remarks of this court, pp. 351-353 inclusive. In the case first above cited, the defendant was induced to put his name upon the back of a bill of exchange by the fraudulent representation of the acceptor that he was signing a guaranty. In an action against him as indorser, at the -suit of a bona fide holder for value, the Lord Chief Justice, Boville, directed the jury that, "If the defendant's signature to the document was obtained upon a fraudulent representation that it was a guaranty, and the defendant signed it without knowing that it was a bill, and under the belief that it was a guaranty, and if he was not guilty of any negligence in so signing the paper, he was entitled to the verdict; " and this direction was held proper. In deliver- ing the judgment of the court upon a rule nisi for a new trial, Byles, J., said: " The case presented by the defendant is that he never made the con- tract declared on • that he never saw the face of the bill ; that the purport of the contract was fraudulently misdescribed to him; that when he signed one thing, he was told and believed he was signing another and entirely different thing ; and that his mind never went with his act. Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 241 It seems plain on principle and on authority that if a blind man, or a man who cannot read, or for some reason (not implying negligence) forbears to read, has a written contract falsely read over to him, the reader misreading to such a degree that the written contract is of a nature altogether different from the contract pretended to be read from the paper, which the blind or illiterate man afterwards signs, then at least, if there be no negligence, the signature so obtained is of no force; and it is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature ; in other words, that he never intended to sign, and therefore, in contemplation of law, never did sign the contract to which his name is appended." And again, after remarking the distinction between the case under consideration and those where a party has written his name upon a blank piece of paper, intending that it should after- wards be filled up, and it is improperly so filled, or for a larger sum, or where he has written his name upon the back or across the face of a blank bill-stamp, as indorser or acceptor, and that has been fraudulently or improperly filled, or in short, where, under any circumstances, the party has voluntarily affixed his signature to commercial paper, knowing what he was doing and intending the same to be put in circulation as a negotiable security, and after also showing that in all such cases the party so signing will be liable for the full amount of the note or bill, when it has once passed into the hands of an innocent indorsee or holder, for value before maturity, and that such is the limit of the protec- tion afforded to such an indorsee or holder, the learned judge proceeded : " But in the case now under consideration, the defendant, according to the evidence, if believed, and the finding of the jury, never intended to indorse a bill of exchange at all, but intended to sign a contract of an entirely different nature. It was not his design, and, if he were guilty of no negligence, it was not even his fault that the instrument he signed turned out to be a bill of exchange. It was as if he had written his name on a sheet of paper for the purpose of franking a letter, or in a lady's album, or an order for admission to Temple Church, or on the fly-leaf of a book, and there had already been without his knowledge a bill of exchange or a promissory note payable to order inscribed on the other side of the paper. To make the case clearer, suppose the bill or note on the other side of the paper in each of these cases to be written at a time subsequent to the signature, then the fraudulent misapplication of that 242 FORMATION OF CONTRACT. [Pabt U. genuine signature to a difEerent purpose would have been a counterfeit alteration of a writing with intent to defraud, and would therefore have amounted to a forgery. In that case the signer would not have been bound by his signature for two reasons; first, that he never in fact signed the writing declared on, and secondly, that he never intended to sign any such contract. " In the present case the first reason does not apply, but the second does apply. The defendant never intended to sign that contract, or any such contract. He never intended to put his name to any instrument that then was or thereafter might become negotiable. He was deceived not merely as to the legal effect, but as to the actual contents of the instrument." The other case first above cited, Whitney v. Snyder, was in all respects like the present, a suit upon a promissory note by the purchaser before maturity, for value, against the maker; and the facts offered to be proved in defense were the same as here ; and it was held that the evidence should have been admitted. In Nance v. Lary (5 Ala. 370) it was held that where one writes his name on a blank piece of paper, of which another takes possession without authority therefor, and writes a promissory note above the signature, which he negotiates to a third person, who is ignorant of the circumstances, the former is not liable as the maker of the note to the holder. In that case the note was written over the signature by one Langford, and by him negotiated to the plaintiff in the action, who sued the defendant as maker. Collier, C. J., said: " The making of the note by Langford was not a mere fraud upon the defendant ; it was something more. It was quite as much a forgery as if he had found the blank or purloined it from the defendant's posses- sion. If a recovery were allowed upon such a state of facts, then every one who ever indulges in the idle habit of writing his name for mere pastime, or leaves sufficient space between a title and his subscription, might be made a bankrupt by having promises to pay money written over his signature. Such a decision would be alarming to the community, has no warrant in law, and cannot receive our sanction." And in Putnam v. Sullivan (4 Mass. 54) Chief Justice Parsons said: " The counsel for the defendants agree that generally an indorsement obtained by fraud will hold the indorsers according to the terms of it, but they make a distinction between the cases where the indorser, Chat. TV. § 1.] REAtlTY OF CONSENT: MISTAKE. 243 through frauduletit pretenses, has been induced to indorse the note he is called on to pay, and where he never intended to indorse a note of that description, hut a different note and for a different purpose. Perhaps there maybe cases in which this distinction ought to prevail. As, if a blind man had a note falsely and fraudulently read to him, and he indorsed it, supposing it to be the note read to him. But we are satisfied that an indorser cannot avail himself of this distinction, but in cases where he is not chargeable with any laches or neglect or misplaced confidence in others." See also 1 Parsons on Notes and Bills, 110 to 114, and cases cited in notes. The judgment below must be reversed, and a venire de novo awarded. By the court. It is so ordered.^ (it.) Mistake as to the identity of the person with whom the contract is made. BOSTON ICE CO. v. POTTER. 123 MASSACHUSETTS, 28. — 1877. Contract on an account annexed, for ice sold and delivered between April 1, 1874, and April 1, 1875 Answer, a general denial. Judgment for defendant. Plaintiff alleged exceptions. Endicott, J. To entitle the plaintiff to recover, it must show some contract with the defendant. There was no express con- tract, and upon the facts stated no contract is to be implied. The defendant had taken ice from the plaintiff in 1873, but, on ac- count of some dissatisfaction with the manner of supply, he ter- minated his contract, and made a contract for his supply with the Citizens' Ice Company. The plaintiff afterward delivered ice to the defendant for one year without notifying the defendant, as the presiding judge has found, that it had bought out the busi- ness of the Citizens' Ice Company, until after the delivery and consumption of the ice. The presiding judge has decided that the defendant had a right to assume that the ice in question was delivered by the Citizens' 1 See also Phillip v. Gallant, 62 N. Y. 256; Gibhs v. Linabury, 22 Mich. 479 ; De Camp v. Hamma, 29 Ohio St. 467. As to effect of negligence in case of negotia'ble instruments, see Chapman v. Base, 56 N. Y. 137. Cf. Bedell v. Berring, 77 Gial. 672. 244 FORMATION OF CONTRACT. [Part D. Ice Company, and has thereby necessarily found that the defend- ant's contract with that company covered the time of the delivery of the ice. There was no privity of contract established between the plaintiff and defendant, and without such privity the possession and use of the property will not support an implied assumpsit. Hills V. Snell, 104 Mass. 173, 177. And no presumption of assent can be implied from the reception and use of the ice, because the defendant had no knowledge that it was furnished by the plain- tiff, but supposed that he received it under the contract made with the Citizens' Ice Company. Of this change he was entitled to be informed. A party has a right to select and determine with whom he will contract, and cannot have another person thrust upon him with- out his consent. It may be of importance to him who performs the contract, as when he contracts with another to paint a pict- ure, or write a book, or iurnish articles of a particular kind, or when he relies upon the character or qualities of an individual, or has, as in this case, reasons why he does not wish to deal with a particular party. In all these cases, as he may contract with whom he pleases, the sufficiency of his reasons for so doing cannot be inquired into. If the defendant, before receiving the ice, or during its delivery, had received notice of the change, and that the Citizens' Ice Company could no longer perform its contract with him, it would then have been his undoubted right to have rescinded the contract and to decline to have it executed by the plaintiff. But this he was unable to do, because the plaintiff failed to inform him of that which he had a right to know. Orcutt v. Nelson, 1 Gray, 536, 642 ; Winchester v. Howard, 97 Mass. 303; Hardman v. Booth, 1 H. & C. 803; Humble v. Hunter, 12. Q. B. 310; Bobson v. Drummond, 2 B.& Ad. 303. If he had received notice and continued to take the ice as deliv- ered, a contract would be implied. Mudge v. Oliver, 1 Allen, 74; Orcutt V. Nelson, ubi supra; Mitchell v. Lapage, Holt N. P. 253. There are two English cases very similar to the case at bar. In Schmaling v. Thomlinson (6 Taunt. 147) a firm was employed by the defendants to transport goods to a foreign market, and transferred the entire employment to the plaintiff, who performed Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 245 it without the privity of the defendants, and it was held that he could not recover compensation for his services from the de- fendants. The case of Boulton v. Jones (2 H. & N. 564) was cited by both parties at the argument. There the defendant, who had been in the habit of dealing with one Brocklehurst, sent a written order to him for goods. The plaintiff, who had on the same day bouglit out the business of Brocklehurst, executed the order without giving the defendant notice that the goods were supplied by him and not by Brocklehurst. And it was held that the plaintiff could not maintain an action for the price of the gpods against the defendant. It is said in that case that the defendant had a right of set-off against Brocklehurst, with whom he had a running account, and that is alluded to in the opinion of Baron Bramwell, though the other judges do not mention it. The fact that a defendant in a particular case has a claim in set-off against the original contracting party shows clearly the injustice of forcing another person upon him to execute the con- tract without his consent, against whom his set-off would not be available. But the actual existence of the claim in set-off cannot be a test to determine that there is no implied assumpsit or privity between the parties. Nor can the non-existence of a set-off raise an implied assumpsit. If there is such a set-off, it is sufficient to state that as a reason why the defendant should prevail; but it by no means follows that because it does not exist the plaintiff can maintain his action. The right to maintain an action can never depend upon whether the defendant has or has not a defense to it. The implied assumpsit arises upon the dealings between the parties to the action, and cannot arise upon the dealings between the defendant and the original contractor, to which the plaintiff was not a party. At the same time, the fact that the right of set-off against the original contractor could not, under any cir- cumstances, be availed of in an action brought upon the contract by the person to whom it was transferred and who executed it, shows that there is no privity between the parties in regard to the subject matter of this action. It is, therefore, immaterial that the defendant had no claim in set-off against the Citizens' Ice Company. 246 FORMATION OF CONTRACT. [Part II. We are not called upon to determine what other remedy the plaintiff has, or what would be the rights of the parties if the ice were now in existence. Exceptions overruled. (iii.) Mistake as to the subject matter, a. Mistake of identity as to the thing contracted for, KYLE V. KAVANAGH. 103 MASSACHUSETTS, 356. — 1869. Contract to recover the price of land sold and conveyed to the defendant, pursuant to the following agreement : " Boston, July 2, 1868. I hereby agree to sell to E. Kavanagh four lots of land in Waltham on Prospect Street, so called, for 50 shares of Mitchell Granite stock, 9000 shares of Revenue Gold stock, also $150 in lawful money for said land. Said Kyle is to give said Kavanagh a good title, if the title is in said Kyle, so he can give deed ; if said Kyle cannot give a good title, then this agreement is null and void." The defendant contended and introduced evidence tending to show that, either by the fraud or misrepresentation of the plain- tiff, or by mistake, the land conveyed by the deed was not the land which he bargained for, and that what he had agreed to purchase was a lot of land on another Prospect Street in Wal- tham, in no way connected with that mentioned in the deed, and a long way off; and he also contended that he was entitled to a warranty deed. Verdict for defendant. MoKTON, J. . . . The other exception taken by the plaintiff cannot be sustained. The instructions given were, in substance, that, if the defendant was negotiating for one thing and the plaintiff was selling another thing, and their minds did not agree as to the subject matter of the sale, there would be no contract by which the defendant would be bound, though there was no fraud on the part of the plaintiff. This ruling is in accordance Chap. IV. §1.] RKALITY OF CONSENT; MISTAKE. 247 with the elementary principles of the law of contracts, and was correct. Spurr v. Benedict, 99 Mass. 463. Exceptions sustained.* b. Mistake as to the existence of the thing contracted for. GIBSON V. PELKIE. 37 MICHIGAN, 380. — 1877. Assumpsit. Gkavbs, J. The right Gibson asserts is based solely on an alleged special agreement entitling him to collect so much as he might of a specific judgment, and to retain one-half of the sum collected. According to his own statement of his case, the judg- ment was the exclusive subject matter of the agreement relied on. No other demand or form of demand entered into the bar- gain. The parties had nothing else in their minds. They did not assume to contract about an unliquidated claim or an unad- judicated cause of action, the enforcement of which in Pelkie's name might involve him in a much larger liability than would be likely to attend the collection of a judgment. It was a judg- ment which formed the subject matter of the bargain. Such was the claim made by the declaration and such was the case in issue. No other ground for recovery appears. Now, there was no proof of a judgment; but there was evidence concerning one, and it seems to have been in effect conceded that there was something which had been taken to be a judgment, but which was so de- fective that it could not avail anything. The case must be viewed as it is. It is not admissible to arbi- 1 (To the ruling as to defendant's right to a warranty deed.) In Hazard v. New England Marine Ins. Co. (1 Sumner, 218), Mr. Justice Story charged that if in a policy of insurance the insured used the term "coppered ship" in one sense and the underwriter in another, " plainly it would be a contract founded in mutual mistake ; and therefore neither party would be bound by it. They would not have contracted ad idem. There would never have been an agreement to the same subject matter in the same sense. This principle is so well known and so familiar, that it may now be deemed to be treasured up among the elements of jurisprudence." See also Barfield v. Price, 40 Cal. 535. 248 FORMATION OF CONTRACT. [Pakt U. trarily admit one part and reject another. If what there is to show that the supposed judgment was void is rejected, then all there is to make out the existence of any such judgment will be stricken out, and if that be done, there will be no proof whatever of the essence of the cause of action set up. There will be no showing that there was any subject matter for the alleged agree- ment, and no proof to maintain the actual averments of the declaration. The cause is presented here by both sides upon the theory that there was something which was intended as a judg- ment, but which was void and hence uncollectible, and the plain- tiff in error cannot ask a more favorable view of the record. If, then, there was a proceeding which was meant to be a judgment, but which was void, there was nothing to which the actual bar- gaining could attach. There was no subject matter. The par- ties supposed there was a judgment, and negotiated and agreed on that basis, but there was none. Where they assumed there was substance, there was no substance. They made no contract because the thing they supposed to exist, and the existence of which was indispensable to the institution of the contract, had no existence. Allen v. Hammond, 11 Pet. 63; Suydam v. Clark, 2 Sandf. Sup'r Court Rep. 133; Gove v. Wooster, Lalor's Supp. to Hill & Den. 30; Smidt v. Tiden, L. E. 9 Q. B. 446; 9 Eng. 379; Couturier v. Hastie, 5 H. L. 673; Hazard v. New England Ins. Co., 1 Sumn. 218; Silvernail v. Cole, 12 Barb. 685; Slier- man V. Barnard, 19 Barb. 291; Metcalf on Cont. 30, 31; 1 Poth. Ob. by Evans, 113; Benjamin on Sales, §§ 76, 77, eh. 4; 2 Kent. Com. 468. It is therefore the opinion of a majority of the court that the judgment in Pelkie's favor ought not to be disturbed. Judgment is affirmed with costs. ^ > Accord : Allen v. Hammond, 11 Pet. (U. S.) 63 ; Biegel v. American Life Ins. Co., 140 Pa. 193 ; S. C, 153 Pa. 134 ; Duncan v. New York Mut. Ins. Co., 138 N. Y. 88 ; Bedell v. Wilder, 65 Vt. 406. Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 249 SHEEWOOD V. WALKER. 66 MICHIGAN, 568. — 1887. MoBSE, J. Eeplevin for a cow. Suit commenced in justice's court. Judgment for plaintiff. Appealed to Circuit Court of Wayne County, and verdict and judgment for plaintiff in that court. The defendants bring error, and set out twenty-five assignments of the same. The main controversy depends upon the construction of a con- tract for the' sale of the cow. The plaintiff claims that the title passed, and bases his action upon such claim. The defendants contend that the contract was executory, and by its terms no title to the animal was acquired by plaintiff. The defendants reside at Detroit, but are in business at Walker- ville, Ontario, and have a farm at Greenfield, in Wayne County, upon which were some blooded cattle supposed to be barren as breeders. The Walkers are importers and breeders of polled Angus cattle. The plaintiff is a banker living at Plymouth, in Wayne County. He called upon the defendants at Walkerville for the purchase of some of their stock, but found none there that suited him. Meeting one of the defendants afterwards, he was informed that they had a few head upon this Greenfield farm. He was asked to go out and look at them, with the statement at the time that they were probably barren, and would not breed. May 5, 1886, plaintiff went out to Greenfield and saw the cattle. A few days thereafter, he called upon one of the defend- ants with the view of purchasing a cow, known as " Eose 2d of Aberlone." After considerable talk, it was agreed that defend- ants would telephone Sherwood at his home in Plymouth in reference to the price. The second morning after this talk he was called up by telephone, and the terms of the sale were finally agreed upon. He was to pay five and one-half cents per pound, live weight, fifty pounds shrinkage. He was asked how he intended to take the cow home, and replied that he might ship her from King's cattle-yard. He requested defendants to con- firm the sale in writing, which they did by sending him the following letter: 250 FORMATION OF CONTRACT. [Pabt U. " Walkerville, May 15, 1886. " T. C. Sherwood, President, etc. " Dear Sir, — We confirm sale to you of the cow. Rose 2d of Aberlone, lot 56 of our catalogue, at five and a half cents per pound, less fifty pounds shrink. We enclose herewith order on Mr. Graham for the cow. You might leave check with him, or mail to us here, as you prefer. " Yours truly, "Hiram Walker & Sons." The order upon Graham enclosed in the letter read as follows : " Walker viLLE, May 15, 1886. " George Graham, — You will please deliver at King 's "tjattle-yard to Mr. T. C. Sherwood, Plymouth, the cow Rose 2d of Aberlone, lot 56 of our catalogue. Send halter with cow, and have her weighed. " Yours truly, " Hiram Walker & Sous." On the twenty-first of the same month the plaintiff went ta defendants' farm at Greenfield, and presented the order and letter to Graham, who informed him that the defendants had instructed him not to deliver the cow. Soon after, the plaintiff tendered to Hiram Walker, one of the defendants, f 80, and demanded the cow. Walker refused to take the money or deliver the cow. The plaintiff then instituted this suit. After he had secured possession of the cow under the writ of replevin, the plaintiff caused her to be weighed by the constable who served the writ, at a place other than King's cattle-yard. She weighed 1420 pounds. When the plaintiff, upon the trial in the Circuit Court, had submitted his proofs showing the above transaction, defendants moved to strike out and exclude the testimony from the case, for the reason that it was irrelevant, and did not tend to show that the title to the cow passed, and that it showed that the contract of sale was merely executory. The court refused the motion, and an exception was taken. The defendants then introduced evidence tending to show that at the time of the alleged sale it was believed by both the plain- tiff and themselves that the cow was barren and would not breed; that she cost $850, and if not barren would be worth from $750 to $1000; that after the date of the letter, and the order to Chap. IV. §1.] KEALITY OF CONSENT: MISTAKE. 251 Graham, the defendants were informed by said Graham that in his judgment the cow was with calf, and therefore they instructed him not to deliver her to plaintiff, and on the twentieth of May, 1886, telegraphed to the plaintiff what Graham thought about the cow being with calf, and that consequently they could not sell her. The cow had a calf in the month of October following. On the nineteenth of May the plaintiff wrote Graham as follows : " Plymouth, May 19, 1886. "Mr. George Graham, Greenfield. " Dear Sir, — I have bought Rose or Lucy from Mr. Walker, and will be there for her Friday morning, nine or ten o'clock. Do not water her in the morning. " Yours, etc., " T. C. Sherwood." Plaintiff explained the mention of the two cows in this letter by testifying that, when he wrote this letter, the order and letter of defendants were at his house, and, writing in a hurry, and being uncertain as to the name of the cow, and not wishing his cow watered, he thought it would do no harm to name them both, as his bill of sale would show which one he had purchased. Plaintiff also testified that he asked defendants to give him a price on the balance of their herd at Greenfield, as a friend thought of buying some, and received a letter dated May 17, 1886, in which they named the price of five cattle, including Lucy at $90, and Rose 2d at f 80. When he received the letter he called defendants up by telephone, and asked them why they put Eose 2d in the list, as he had already purchased her. They replied that they knew he had, but thought it would make no difference if plaintiff and his friend concluded to take the whole herd. The foregoing is the substance of all the testimony in the case. The circuit judge instructed the jury that if they believed the defendants, when they sent the order and letter to plaintiff, meant to pass the title to the cow, and that the cow was intended to be delivered to plaintiff, it did not matter whether the cow was weighed at any particular place, or by any particular person; and if the cow was weighed afterwards, as Sherwood testified, such weighing would be a sufficient compliance with the order; if they 252 FORMATION OF CONTRACT. [Part U. believed that defendants intended to pass the title by the writing, it did not matter whether the cow was weighed before or after suit brought, and the plaintiff would be entitled to recover. The defendants submitted a number of requests, which were refused. The substance of them was that the cow was never delivered to plaintiff, and the title to her did not pass by the letter and order; and that under the contract, as evidenced by these writings, the title did not pass until the cow was weighed and her price thereby determined; and that, if the defendants only agreed to sell a cow that would not breed, then the barren- ness of the cow was a condition precedent to passing title, and plaintiff cannot recover. The court also charged the jury that it was immaterial whether the cow was with calf or not. It will therefore be seen that the defendants claim that, as a matter of law, the title to this cow did not pass, and that the circuit judge erred in submitting the case to the jury, to be determined by them, upon the intent of the parties as to whether or not the title passed with the sending of the letter and order by the defendants to the plaintiff. • •It * * The following cases in this court support the instruction of the court below as to the intent of the parties governing and controlling the question of a completed sale, and the passing of title: Lingham v. Eggleston, 27 Mich. 324; Willcinson v. Holiday, 33 Id. 386; Grant v. Merchants' and Manufacturers' Bank, 35 Id. 627; Carpenter v. Qraham, 42 Id. 194; Brewer v. Michigan Salt Ass'n, 47 Id. 534; Whitcomb v. Whitney, 24 Id. 486; Byles v. Colier, 54 Id. 1 ; ScoUen v. Sutter, 37 Id. 526, 632 ; Ducey Lumber Co. V. Lane, 58 Id. 520, 525; Jenkinson v. Monroe Bros. & Co., 61 Id. 454. It appears from the record that both parties supposed this cow was barren and would not breed, and she was sold by the pound for an insignificant sum as compared with her real value if a breeder. She was evidently sold and purchased on the relation of her value for beef, unless the plaintiff had learned of her true condition, and concealed such knowledge from the defendants. Before the plaintiff secured possession of the animal, the defend- ants learned that she was with calf, and therefore of great value. Chap. IV. §1.] BEAUTY OF CONSENT: MISTAKE. 253 and undertook to rescind the sale by refusing to deliver her. The question arises whether they had a right to do so. The circuit judge ruled that this fact did not avoid the sale, and it made no difference whether she was barren or not. I am of the opinion that the court erred in this holding. I know that this is a close question, and the dividing line between the adjudi- cated cases is not easily discerned. But it must be considered as well settled that a party who has given an apparent consent to a contract of sale may refuse to execute it, or he may avoid it after it has been completed, if the assent was founded, or the contract made, upon the mistake of a material fact, — such as the subject matter of the sale, the price, or some collateral fact materially inducing the agreement; and this can be done when the mistake is mutual. 1 Benj. Sales, §§ 605, 606; Leake, Cont. 339; Stoi-y, Sales (4th ed.)* §§ 148, 377. See also Outts v. Guild, 57 N. Y. 229 ; Harvey v. Harris, 112 Mass. 32 ; Gardner v. Lav,e, 9 Allen, 492; S.C., 12 Allen, 44; HuthmacherY. Harris' Adm'rs, 38Penn. St. 491; Byers v. Chapin, 28 Ohio St. 300; Gibson v. Pelkie, 37 Mich. 380, and cases cited; Allen v. Hammond, 11 Pet. 63, 71. If there is a difference or misapprehension as to the substance of the thing bargained for, if the thing actually delivered or received is different in substance from the thing bargained for and intended to be sold, then there is no contract; but if it be only a difference in some quality or accident, even though the mistake may have been the actuating motive to the purchaser or seller, or both of them, yet the contract remains binding. " The difficulty in every case is to determine wliether the mistake or misapprehension is as to the substance of the whole contract, going, as it were, to the root of tlie matter, or only to some point, even though a material point, an error as to which does not affect the substance of the whole consideration." Kennedy v. Panama Sg-c. Mail Co., L. R. 2 Q. B. 580, 588. It has been held, in accordance with the principles above stated, that where a horse is bought under the belief that he is sound, and both vendor and vendee honestly believe him to be sound, the purchaser must stand by his bargain, and pay the full price, unless there was a warranty. It seems to me, however, in the case made by this record, that 254 FORMATION OF CONTRACT. [Past H the mistake or misapprehension of the parties went to the whole substance of the agreement. If the cow was a breeder, she was worth at least $750; if barren, she was worth not over $80. The parties would not have made the contract of sale except Upon the understanding and belief that she was incapable of breeding, and of no use as a cow. It is true she is now the identical animal that they thought her to be when the contract was made; there is no mistake as to the identity of the creature. Yet the mistake was not of the mere quality of the animal, but went to the very nature of the thing. A barren cow is substantially a different creature than a breeding one. There is as much differenBe between them for all purposes of use as there is between an ox and a cow that is capable of breeding and giving milk. If the mutual mistake had simply related to the fact whether she was with calf or not for one season, then it might have been a good sale ; but the mistake affected the character of the animal for all time, and for her present and ultimate use. She was not in fact the animal, or the kind of animal, the defendants intended to sell or the plaintiff to buy. She was not a barren cow, and, if this fact had been known, there would have been no contract. The mis- take affected the substance of the whole consideration, and it must be considered that there was no contract to sell, or sale of the cow as she actually was. The thing sold and bought had in fact no existence. She was sold as a beef creature would be sold; she is in fact a breeding cow, and a valuable one. The court should have instructed the jury that if they found that the cow was sold, or contracted to be sold, upon the under- standing of both parties that she was barren, and useless for the purpose of breeding, and that in fact she was not barren, but capable of breeding, then the defendants had a right to rescind, and to refuse to deliver, and the verdict should be in their favor. The judgment of the court below must be reversed, and a new trial granted, with costs of this court to defendants. Campbell, C. J., and Champlin, J., concurred. Sherwood, J., dissented. Chap. IV. §1.] KEALITY OF CONSENT: MISTAKE. 255 HECHT V. BATCHELLER, 147 MASSACHUSETTS, 335. — 1888. Contract for money had and received. Judgment for plaintiff. Defendants appeal. MoKTON, C. J. The defendants, being the owners of a prom- issory note which they had taken in the ordinary course of busi- ness, sold it through brokers to the plaintiffs. It was afterwards ascertained that, two hours before this sale, the makers of the note had made a "voluntary assignment of all their assets for the benefit of their creditors, to be administered under the insolvent laws of Ohio," of which State they were residents. Neither of the parties to this suit, nor the brokers employed by the defend- ants, knew of the assignment at the time of the sale, but they all supposed that the makers were doing business as theretofore. The plaintiffs contend that they are entitled to recover upon either of two grounds : first, that there was a mutual mistake of the parties as to the thing sold, and therefore no contract was completed between them; and, secondly, that there was a war- ranty express or implied, by the defendants, that the makers of the note were then carrying on business, and had not failed or made an assignment. It is a general rule, that, where parties assume to contract, and there is a mistake as to the existence or identity of the subject matter, there is no contract, because of the want of the mutual assent necessary to create one ; so that, in the case of a contract for the sale of personal property, if there is such mis- take, and the thing delivered is not the thing sold, the purchaser may refuse to receive it, or, if he receives it, may upon discovery of the mistake return it, and recover back the price he has paid. But to produce this result the mistake must be one which affects the existence or identity of the thing sold. Any mistake as to its value or quality, or other collateral attributes, is not sufficient if the thing delivered is existent, and is the identical thing in kind which was sold. Gardner v. Lane, 9 Allen, 492; Gardner V. Lane, 12 Allen, 39; Spurrr. Benedict, 99 Mass. 463; Bridge- water L'on Co. V. Enterprise Ins. Co., 134 Mass. 433; Benjamin on Sales, § 54. 256 FORMATION OF CONTRACT. [Pabt U. In the case at bar, the subject matter of the contract was the note of J. and S. B. Sachs. The note delivered was the same note which the parties bought and sold. They may both have understood that the makers were solvent, whereas they were insolvent; but such a mistake or misapprehension affects the value of the note and not its identity. Day v. Kinney, 131 Mass. 37. In Day v. Kinney, the makers of the note sold were in fact insolvent, but they had not stopped payment or been adjudged insolvent, and the decision is confined to the facts of the case. But we think the same principles apply in this case. The makers of the note had made an assignment for the benefit of their creditors, but this did not extinguish the note, or destroy its identity. It remained an existing note, capable of being enforced, with every essential attribute going to its nature as a note which it had before. Its quality and value were impaired, but not its identity. The parties bought and sold what they intended, and their mistake was not as to the subject matter of the sale, but as to its quality. We are therefore of opinion that the sale was valid, and that the plaintiffs cannot recover the amount they paid, as upon a failure of consideration. * « • « « We think the principles we have stated are decisive of the case before us. The defendants sold the note in good faith. So far as the evidence shows, neither party, at the time of the sale, spoke of, or inquired about, or knew anything about, the failure of the makers. They stood upon an equal footing, and they had equal means of knowing the standing of the makers. It was understood that the defendants were selling the note without recourse to them. They did not expressly warrant the value of the note, and we are of the opinion that from the circumstances no warranty could fairly be inferred of the solvency of the makers, or that they continued to do business. We are therefore of opinion, . . . upon the facts of the case, the court was not justified in finding for the plaintiffs. Exceptions sustained. Chap. rv. §1.] REALITY OP CONSENT: MISTAKE. 257 WOOD V. BOYNTON. 64 WISCONSIN, 265. — 1885. Taylor, J. This action was brouglit in the Circuit Court for Milwaukee County to recover the possession of an uncut diamond of the alleged value of f 1000. The case was tried in the Circuit Court and, after hearing all the evidence in the case, the learned circuit judge directed the jury to find a verdict for the defend- ants. The plaintiff excepted to such instruction, and, after a verdict was rendered for the defendants, moved for a new trial upon the minutes of the judge. The motion was denied, and the plaintiff duly excepted, and, after judgment was entered in favor of the defendants, appealed to this court. The defendants are partners in the jewelry business. On the trial it appeared that on and before the 28th of December, 1883, the plaintiff was the owner of and in the possession of a small stone of the nature and value of which she was ignorant; that on that day she sold it to one of the defendants for the sum of one dollar. Afterwards it was ascertained that the stone was a rough diamond, and of the value of about $700. After learning this fact the plaintiff tendered the defendants the one dollar, and ten cents as interest, and demanded a return of the stone to her. The defendants refused to deliver it, and therefore she commenced this action. The plaintiff testified to the circumstances attending the sale of the stone to Mr. Samuel B. Boynton, as follows : " The first time Boynton saw that stone he was talking about buying the topaz, or whatever it is, in September or October. I went into his store to get a little pin mended, and I had it in a small box, — the pin, a small ear-ring, . . . this stone, and a broken sleeve-button were in the box. Mr. Boynton turned to give me a check for my pin. I thought I would ask him what the stone was, and I took it out of the box and asked him to please tell me what that was. He took it in his hand and seemed some time looking at it. I told him I had been told it was a topaz, and he said it might be, He says, ' I would buy this ; would you sell it ? ' I told him I did not know but what I would. What would it be worth? And he said he did not know ; he would give me a dollar and keep it as a specimen, and I told him I would not sell it ; and it was certainly pretty 258 FORMATION OF CONTRACT. [Part II. to look at. He asked me where I found it, and I told him in Eagle. He asked about how far out, and I said right in the village, and I went out. Afterwards, and about the 28th of December, I needed money pretty badly, and thought every doUar would help, and I took it back to Mr. Boynton and told him I had brought back the topaz, and he says, ' Well, yes; what did I offer you for it?' and I says, 'One dollar;' and he stepped to the change drawer and gave me the dollar, and I went out." In another part of her testimony she says : " Before I sold the stone I had no knowledge whatever that it was a diamond. I told him that I had been advised that it was probably a topaz, and he said probably it was. The stone was about the size of a canary bird's egg, nearly the shape of an egg, worn pointed at one end; it was nearly straw color, a little darker." She also testified that before this action was commenced she tendered the defendants $1.10, and demanded the return of the stone, which they refused. This is substantially all the evidence of what took place at and before the sale to the defendants, as testified to by the plaintifE herself. She produced no other wit- ness on that point. The evidence on the part of the defendant is not very different from the version given by the plaintifE, and certainly is not more favorable to the plaintiff. Mr. Samuel B. Boynton, the defend- ant to whom the stone was sold, testified that at the time he bought this stone, he had never seen an uncut diamond ; had seen cut diamonds, but they are quite different from the uncut ones ; " he had no idea this was a diamond, it never entered his brain at the time." Considerable evidence was given as to what took place after the sale and purchase, but the evidence has very little, if any, bearing upon the main point in the case. This evidence clearly shows that the plaintiff sold the stone in question to the defendants, and delivered it to them in December, 1883, for a consideration of one dollar. The title to the stone passed by the sale and delivery to the defendants. How has that title been divested and again vested in the plaintiff? The con- tention of the learned counsel for the appellant is that the title became vested in the plaintiff by the tender to the Boyntons of the purchase money, with interest, and a demand of a return of the stone to her. Unless such tender and demand revested the title in the appellant, she cannot maintain her action. Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 259 The only question in the case is whetlier there was anything in the sale which entitled the vendor (the appellant) to rescind the sale and so revest the title in her. The only reasons we know of for rescinding a sale and revesting the title in the vendor so that he may maintain an action at law for the recovery of the possession against his vendee are, (1) that the vendee was guilty of some fraud in procuring a sale to be made to him; (2) that there was a mistake made by the* vendor in delivering an article which was not the article sold, a mistake in fact as to the iden- tity of the thing sold with the thing delivered upon the sale. This last is not in reality a rescission of the sale made, as the thing delivered was not the thing sold, and no title ever passed to the vendee by such delivery. In this case, upon the plaintiff's own evidence, there can be no just ground for alleging that she was induced to make the sale she did by any fraud or unfair dealings on the part of Mr. Boynton. Both were entirely ignorant at the time of the char- acter of the stone and of its intrinsic value. Mr. Boynton was not an expert in uncut diamonds, and had made no examination of the stone, except to take it in his hand and look at it before he made the offer of one dollar, which was refused at the time, and afterwards accepted without any comment or further exami- nation made by Mr. Boynton. The appellant had the stone in her possession for a long time, and it appears from her own state- ment that she had made some inquiry as to its nature and quali- ties. If she chose to sell it without further investigation as to its intrinsic value to a person who was guilty of no fraud or un- fairness which induced her to sell it for a small sum, she can- not repudiate the sale because it is afterwards ascertained that she made a bad bargain. Kennedy v. Panama &c. Mail Co., L. R. 2 Q. B. 580. There is no pretense of any mistake as to the identity of the thing sold. It was produced by the plaintiff and exhibited to the vendee before the sale was made, and the thing sold was delivered to the vendee when the purchase price was paid. Ken- nedy v. Panama &c. Mail Co., L. E. 2 Q. B. 587; Street v. Blay, 2 Barn. & Adol. 456; Gompertz v. Bartlett, 2 El. & Bl. 849; Our- ney v. Womersley, 4 El. & Bl. 133; Ship's Case, 2 De G., J. & S. 260 rORMATION OF CONTRACT. [Part n. 544. Suppose the appellant had produced the stone, and said she had been told that it was a diamond, and she believed it was, but had no knowledge herself as to its character or value, and Mr. Boynton had given her $500 for it, could he have rescinded the sale if it had turned out to be a topaz or any other stone of very small value? Could Mr. Boynton have rescinded the sale on the ground of mistake? Clearly not, nor could he rescind it on the ground that there had been a breach of warranty, because there was no warranty, nor could he rescind it on the ground of fraud, unless he could show that she falsely declared that she had been told it was a diamond, or, if she had been so told, still she knew it was not a diamond. See Street v. Blay, supra. It is urged, with a good deal of earnestness, on the part of the counsel for the appellant, that, because it has turned out that the stone was immensely more valuable than the parties at the time of the sale supposed it was, such fact alone is a ground for the rescission of the sale, and that fact was evidence of fraud on the part of the vendee. Whether inadequacy of price is to be re- ceived as evidence of fraud, even in a suit in equity to avoid a sale, depends upon the facts known to the parties at the time the sale is made. When this sale was made the value of the thing sold was open to the investigation of both parties; neither knew its intrinsic value, and, sq far as the evidence in this case shows, both sup- posed that the price paid was adequate. How can fraud be predicated upon such a sale, even though after investigation showed that the intrinsic value of the thing sold was hundreds of times greater than the price paid? It certainly shows no such fraud as would authorize the vendor to rescind the contract and bring an action at law to recover the possession of the thing sold. Whether that fact would have any influence in an action in equity to avoid the sale, we need not consider. See Stettheimer v. Killip, 75 N. Y. 287; Etting v. Bank of U. S., 11 Wheat. 59. We can find nothing in the evidence from which it could be justly inferred that Mr. Boynton, at the time he offered the plain- tiff one dollar for the stone, had any knowledge of the real value of the stone, or that he entertained even a belief that the stone was a diamond. It cannot, therefore, be said that there was a sup- Chap. IV. § 1.] REALITY OF CONSENT: MISTAKE. 261 pression of knowledge on the part of the defendant as to the value of the stone which a court of equity might seize upon to avoid the sale. Following cases show that, in the absence of fraud or warranty, the value of the property sold, as compared with the price paid, is no ground for a rescission of a sale. Wheat V. Cross, 31 Md. 99; Lambert v. Heath, 15 Mees. & W. 487; Bi-y- ant v. Pember, 45 Vt. 487; KuelJcamp v. Hidding, 31 Wis. 503, 511. However unfortunate the plaintifE may have been in selling this valuable stone for a mere nominal sum, she has failed entirely to make out a case either of fraud or mistake in the sale such as will entitle her to a rescission of such sale so as to recover the property sold in an action at law. By the court. The judgment of the Circuit Court is affirmed. EOVEGNO V. DEFFEEAEI. 40 CALIFORNIA, 459.— 1871. Action for dissolution of alleged partnership and distribution of proceeds. Defense, no partnership. Judgment for plaintiff. Defendant appeals. Wallace, J. It is not disputed that Cassinelli was at one time a copartner with the defendant, owning an interest of one- third in the copartnership. Each of the parties to the controversy, Eovegno and Defferari, claims to have purchased that interest from Cassinelli, and this is the only question presented here. It was determined below, and we think correctly, that Eovegno was the purchaser of that interest. The facts are, that on March 17, 1869, Cassinelli agreed to sell it to Eovegno, and then received part of the purchase price; that on the next day (March 18th) Cassinelli and Defferari entered into a treaty concerning the sale of this interest to the latter ; that this was in the presence and with the consent of Eovegno. On this occasion a sale of this interest was supposed to have been made by Cassinelli to Defferari ; but it turned out afterwards that the parties to that transaction (Cassinelli and Defferari) had entirely misunderstood 262 FORMATION OF CONTRACT. [Pabt U. each other as to the price to be paid. Cassinelli thought that ho was selling for $850, and Defferari supposed himself to be pur- chasing at $750. Upon discovery of this mistake the latter refused to take the interest at $850. On the 22d March the sale from Cassinelli to Eovegno was made, pursuant to the agreement of March 17th, and a bill of sale was then made to the latter. Upon the ascertained fact that Cassinelli and Defferari were each mistaken as to the purchase price of this copartnership interest, and each was, therefore, assenting to a supposed con- tract which had no real existence, it results that there was no valid agreement, notwithstanding the apparent assent of each. It is in principle like the case of Phillips v. Bistolli (2 B. & C. 511), where it appeared that the defendant, who was a foreigner, not understanding the English language well, attended an auction sale iu London, and there bid eighty-eight guineas for certain goods, which were, thereupon, knocked down to him, and when sued for the purchase price, he set up in defense that he supposed he was bidding only forty-eight guineas for the goods, and that the mistake grew out of his imperfect knowledge of the English language, in which language the auction was conducted. Chief Justice Abbott left it to the jury to find if the defendant had been mistaken as to the price bid, the court being of the opinion that if such a mistake had really intervened, the parties could not be said to have entered into a contract at all. Judgment and order denying new trial affirmed.* c. Mistake by one party as to the intention of the other, known to that other. SHELTON V. ELLIS. 70 GEORGIA, 297. — 1883. Bill in equity for an injunction to restrain defendant from disposing of certain railroad tickets and for the appointment of a receiver to hold them. * Accord : Bupley v. Daggett, 74 111. 351 ; Bowland v. New York &e. JB. Co., 61 Conn. 103. Chap. IV. §1.] REALITY OF CONSENT: MISTAKE. 263 Plaintiff was employed to compile a rate sheet for the W. & A. Ey., showing cost of tickets between different points. By mis- take he printed the fare from Atlanta, Georgia, to Sogers, Arkansas, as $21.25, when it should have been $36.70. Defend- ant discovered the mistake, and immediately purchased of the ticket agent of the W. & A. Ey. a large number of the tickets at the price printed in the rate sheet. Plaintiff, being responsible to the railway for the error, offered to return defendant's money and demanded the tickets, which offer and demand were refused by defendant. Plaintiff alleges in his bill that defendant knew that a mistake had been made in the rate sheet and fraudulently took advantage of it. Defendant answered denying any fraud, and asserting that the sale was made without any misrepresentations on the part of defendant and from the plaintiff's own rate sheet. The court granted a temporary injunction and appointed a receiver. Defendant appeals. Hall, J. There is no question made here as to the propriety of the orders passed by his honor, the presiding judge, if the case made by the bill entitles the complainants to the relief prayed. Upon the question made there was a conflict of evi- dence ; there was no abuse of discretion, if the law authorized the interposition of the judge. The order appointing the receiver and directing the injunction carefully preserved the rights of all the parties to the final hearing of the cause. The first and only question made which we shall consider and determine, is whether appropriate relief can be granted by a court of equity, in a case where there has been a mistake on one side, and it is alleged that a fraudulent advantage has been knowingly taken of this mistake by the opposite party, to his gain and to the serious detriment and injury of the party making the mis- take. The question is thus broadly stated, to meet the views presented by the counsel in the case. In Wyche et al. v. Greene (26 Ga. 415) this court held that what is a mistake on one side and a fraud on the other is as much the subject of correction as if it were a mistake on both sides, and in delivering the opinion of the court, Benning, J. (at p. 422), said: 264 FORMATION OF CONTRACT. [Pakt II. " The court's charge that a mistake, to be the subject of correction, must be a mistake in which all the parties to the contract participate, was too absolute. If one of the parties to a contract is mistaken in a matter, and the others know that he is and do not apprise him of it, yet the mistake, though not one on their part, is the subject of correction. The case becomes one in which there is a mistake in one of the parties to the contract and a fraud in the others. Such a case is even more readily the subject of relief, at his instance, than is a case in which there is nothing but a mistake, although that be a mistake extending to all the parties." There is nothing that we are aware of, either in the Code or any subsequent decision of this court, modifying the law as here declared. On the other hand, we think there is much confirming the view here taken. Compare with this Code §§ 3117, 3119 to 3126, both inclusive, and 3180. The conditions upon which relief will be granted or denied must, under the sections of the Code and the cases cited under them, depend in large measure upon the circumstances of each particular case, and upon all the facts developed, which should be passed upon by the jury at the final hearing, and ought not to be too closely scrutinized or evenly balanced in these preliminary proceedings. AH that the judge decides at that stage of the cause is that there is enough developed to carry the case to the jury, whose exclusive province it is to determine the force and effect of facts as applied to the law given them in charge by the court. This is all that the judge has undertaken in this case. Judgment affirmed.* 1 See also Laidlaw v. Organ, 2 Wheat. 178, post, p. 282. I I Chap. rv. §2.] REALITY OF CONSENT: MISREPRESENTATION. 265 § 2. Miarepresentation. (i.) Misrepresentation distinguished from fraud. Note. —For oases under this topic, see the oases on " Eflects of Misrepre- sentation," post, p. 268, and on " Knowledge of Falsity," post, p. 298. (m.) Representations distinguished from tern DAVISON V. VON LINGEN. 113 UNITED STATES, 40. — 1884. Libel in personam, in admiralty, against the owners of the steamer Whickham, to recover damages for breach of charter- party. Cross-libel bi personam against the charterers for damages for breach of charter-party. The charter-party was executed at Philadelphia on August 1, 1879, and provided that the steamship Whickham "now sailed or about to sail from Benizaf with cargo for Philadelphia, . . . with liberty to take outward cargo to Philadelphia for owner's benefit, shall, with all convenient speed, sail and proceed to Philadelphia or Baltimore, at charterers' option, after discharge of inward cargo at Philadelphia, or as near thereunto as she may safely get, and there load afloat from said charterers, or their agents, a full and complete cargo of grain and (or ) other lawful merchandise." The owners had submitted a charter-party in which the vessel was described as "sailed from, or loading at, Benizaf," but this the charterers declined to accept, and the charter-party was executed with the description " now sailed or about to sail from Benizaf." In fact the vessel was then loading at Benizaf, and did not sail until August 7th. On the 9th the charterers learned that she had that day passed Gibraltar, and being satisfied that she would not arrive in time to load in August, procured another vessel, which they loaded at an increased rate of freight, as favorable as possible. The Whickham discharged her cargo at Philadelphia on September 7th and was tendered to the charterers at Baltimore on the 11th. The charterers declined to accept her on the ground that she had neither sailed nor was about to sail from Benizaf on August 1st. Another charter was then obtained at a loss, on as favorable terms as possible, and for this loss the owners filed the cross-libel. 266 FORMATION OF CONTRACT. [Part U. It further appeared that all parties understood that the char- terers wanted a vessel which could load in August; that they had asked a guaranty that the Whiekham would arrive in time, but this was refused; that the basis of the belief that the Whiekham would arrive rested on telegraphic information from Gibraltar, a day's sail from Benizaf. Decree for cross-libellants in District Court, which was reversed in the Circuit Court and a decree entered for the libellants. Mr. Justice Blatchfobd. . . . The decision of the Circuit Court proceeded on the ground that the language of the charter- party must be interpreted, if possible, as the parties in Baltimore understood it when they were contracting. In view of the facts, that all the contracting parties understood that the vessel was wanted to load in August, that, as soon as the charterers learned that She did not leave Gibraltar until the 9th, they took steps to get another vessel, and that they declined to sign a charter-party which described the vessel as " sailed from, or loading at, Beni- zaf," the court held that the language of the charter-party meant that the vessel had either sailed, or was about ready to sail, with cargo; and that the vessel was not in the condition she was represented, being not more than three-elevenths loaded. The argument for the appellants is, that the words of the charter-party "about to sail with cargo" imply that the vessel has some cargo on board but is detained from sailing by not hav- ing all on board, and that she will sail, when, with dispatch, all her cargo, which is loading with dispatch, shall be on board; and that this vessel fulfilled those conditions. As to the attendant circumstances at Baltimore, it is urged that the charterers asked for a guaranty that the vessel would arrive in time for their pur- poses, and it was refused, and that the printed clause as to an option in the charterers to cancel was stricken out, and that then the charterers accepted the general words used. The words of the charter-party are, "now sailed, or about to sail, from Benizaf, with cargo for Philadelphia." The word " loading " is not found in the contract. The sentence in ques- tion implies that the vessel is loaded, because the words "with cargo" apply not only to the words "about to sail," but to the word "sailed," and as, if the vessel had "sailed with cargo," she Chap. IV. §2.] REALITY OF CONSENT: MISREPRESENTATION. 267 must have had her cargo on board, so, if it is agreed she is "about to sail with cargo," the meaning is, that she has her cargo on board, and is ready to sail. This construction is in har- mony with all that occurred between the parties at the time, and with the conduct of the charterers afterwards. The charterers wanted a guaranty that, even if the vessel had already sailed, or whenever she should sail, she would arrive in time for them to load her with grain in August. This was refused, and the char- terers took the risk of her arriving in time, if she had sailed, or if, having her cargo then on board, she should, as the charter- party says, "with all convenient speed, sail and proceed to Philadelphia or Baltimore." Moreover, the charterers refused to sign a charter-party with the words " sailed from, or loading at, Benizaf," and both parties agreed on the words in the charter- party, which were the words of authority used by the agents in Philadelphia of the owners of the vessel. The erasing of the printed words, as to the option of cancelling, was in harmony with the refusal of the owners to guarantee the arrival by a cer- tain day. So, also, when the charterers learned, on the 9th of August, that the vessel did not leave Gibraltar till that day, they proceeded to look for another vessel. It was then apparent that the vessel had not left Benizaf by the 1st of August, or with such reasonable dispatch thereafter, that she could have had her cargo on board, ready to sail on the 1st of August. That the stipulation in the charter-party, that the vessel is "now sailed, or about to sail, from Benizaf, with cargo, for Phila- delphia," is a warranty, or a condition precedent, is, we think, quite clear. It is a substantive part of the contract, and not a mere representation, and is not an independent agreement, serv- ing only as a foundation for an action for compensation in damages. A breach of it by one party justifies a repudiation of the contract by the other party, if it has not been partially exe- cuted in his favor. The case falls within the class of which Qlaholm V. Hays (2 Man. & Gr. 257), OUive v. Booker (1 Exch. 416), Oliver Y. Fielden (4 Exch. 135), Qorrissen v. Perrin (2 C. B. N. S. 681), Croodkewit v. Fletcher (1 H. & N. 893), {Seeger v. DutUe (8 C. B. N. S. 45), Belin v. Burness (3 B. & S. 761), Cork- ling V. Massey (L. E. 8 C. P. 395), and Lowber v. Bangs (2 Wall. 268 FORMATION OF CONTRACT. [Pabt H. 728) are examples ; and not within the class illustrated by Tarra- bochia v. HicMe, 1 H. & N. 183; Dimech y. Corlett, 12 Moore P. C. 199; and CUpsham v. Vertue, 5 Q. B. 265. It is apparent, from the averments in the pleadings of the charterers, of facts which are established by the findings, that time and the situation of the Vessel were material and essential parts of the contract. Con- struing the contract by the aid of, and in the light of, the cir- cumstances existing at the time it was made, averred in the pleadings and found as facts, we have no difficulty in holding the stipulation in question to be a warranty. See Abbott on Shipping, 11th ed. by Shee, pp. 227, 228. But the instrument must be construed with reference to the intention of the parties when it was made, irrespective of any events afterwards occurring; and we place our decision on the ground that the stipulation was originally intended to be, and by its term imports, a condition precedent. The position of the vessel at Benizaf, on the 1st of August — the fact that, if she had not then sailed, she was laden with cargo, so that she could sail — these were the only data on which the charterers could make any calculation as to whether she could arrive so as to discharge and reload in August. They rejected her as loading; but if she was in such a situation, with cargo in her, that she could be said to be "about to sail," because she was ready to sail, they took the risk as to the length of her voyage. The decree of the Circuit Court is affirmed.* (tu.) Effects of misrepresentation. a. In contracts generally. WILCOX V. IOWA WESLEYAN UNIVEESITY. 32 IOWA, 367. — 1871. Action to foreclose a mortgage executed by defendant college to secure a promissory note. Defense, accord and satisfaction of 1 See also Norrington v. Wright, 115 TJ. S. 203, post, p. 584 ; Wells, Fargo & Co. V. Pacific Ins. Co., 44 Cal. 397 ; Morrill v. Wallace, 9 N. H. 113 ; Wolcott V. Mount, 36 N. J. L. 262, post, Ft. V. Ch. III. § 2. Chap. IV. §2.] KEALITY OF CONSENT: MISREPRESENTATION. 269 note and mortgage, in consideration of certain lands agreed by defendant to be given and by plaintiff to be taken as payment. Plaintiff sets up that he -was induced to enter into such agreement by the false representations of defendant as to the location, char- acter, and value of the land. Such representations are found to be in fact false, but also that the agent of the defendant made them in good faith, believing each piece of land to be as described. A decree was entered by the trial court cancelling the note and mortgage and releasing defendant from all liability thereon. Plaintiff appeals. Miller, J. ... Is the plaintiff entitled to be relieved from his agreement compounding his claim against defendant, and, if so, to what extent? The appellee cites Holmes v. Clark (10 Iowa, 423), which holds, that in t)rder to sustain an action on the ground of false and fraudulent representations in the sale of land, it must be shown that the representations were false and fraudulent within the knowledge of the party making them; and he argues that appel- lant is, in view of the law, without remedy in this case. The rule laid down in that case is well established and universally followed in all actions at law for damages sustained by false and fraudulent representations in a sale (see cases cited by appellant in that case) ; but equity will grant relief on the ground of fraud, although the party representing a material fact made the asser- tion without knowing whether it was true or not. The conse- quences to the person who acted on the faith of the representations are the same whether he who made them knew them to be false or was ignorant whether they were true or not. And if the representations were made to influence the conduct of another party in a matter of business, and they did influence him to his prejudice, equity will interfere and grant him relief. Willard's Eq. Jur. 150; Ainslie v. Medlycott, 9 Ves. 21; Hard- ing V. Randall, 15 Me. 332; Smith v. Richards, 13 Pet. 38; Turnbull v. Gadsden, 2 Strobh. (S. C.) Eq. 14; McFerran v. Taylor, 3 Cranch, 281. And even if by mistake, and innocently, a party misrepresents a material fact, upon which another party is induced to act, it is 270 FORMATION OF CONTRACT. [Pabt H. as conclusive a ground of relief in equity as a wilful and false assertion. Taylor v. AsJiton, 11 Mees. & Wels. 400; Foster v. Charles, 6 Bing. 396. Now it is entirely clear, from the evidence, that the plaintiff was thus induced to act in this case. The lots were represented to be of particular situations and values, when they were in fact otherwise; and while the agent informed plaintiff that he had never seen the lots himself, and did not make the representations from his own knowledge, yet he did what was, substantially, the same thing, by stating what the donors said in respect to their situations and values, and that he (the agent) knew one of the donors, whom he represented to be a smart business man and a leading member of the church, whose statements could be relied upon. Through the representations and persuasions of the agent, the plaintiff generously donated or agreed to donate forty per centum of his claim to the university, and receive in payment of the balance real property at cash prices. This he was, in equity and conscience, entitled to receive. He selected the two lots before mentioned upon the representations of the agent, relying entirely, as he had a right to do under the circumstances, thereon respect- ing the situation and value of the same. The lots were not as represented. They were represented by the agent to be worth, in the aggregate, the sum of $1000, whereas they were worth less than one-fifth that sum. Under these circumstances the plain- tiff is clearly entitled to equitable relief from so unconscionable a bargain. ISTor do we think, under all the circumstances of the case, that he has lost his right to relief by any delay or laches on his part. And as, by his agreement, he was to receive land at cash prices, to the extent of sixty per centum of his claim, which the university has failed to pay or convey to him, he will be entitled to recover the money instead of these lots, according to his con- tract entered into June 6, 1861, viz. : $1000 with six per centum interest from that date, upon reconveying the lots to the uni- versity or to whom it shall direct. The judgment of the District Court is reversed, and the cause will be remanded for further proceedings not inconsistent with Chap. rv. §2.] REALITY OF CONSENT: MISREPRESENTATION. 271 this opinion, or the appellant may, if he so elect, have final judg- ment in this court. Beversed.* SCHOOL DIEECTOES v. BOOMHOUE. 83 ILLINOIS, 17. — 1876. Action for damages for breach of contract. Verdict for plain- tiff, from -which defendants appeal. Scott, J. The finding and judgment of the court are plainly and manifestly against the weight of evidence, and so palpable is the error, the judgment, for that cause, 'must be reversed. "When plaintiff applied to defendants to teach their district school, they distinctly informed him it was conditionally engaged to Miss Swartz, and if she succeeded in getting a certificate of qualifica- tion that week at the teachers' institute, then in session at Lena, she was to have the school; but he assured them she could not get a certificate, for the reason, as he "understood, there would be no examination for teachers that week." Other testimony is much stronger, but this is plaintiff's own statement, and in that he was clearly mistaken. One object in holding the institute, as stated by the county superintendent of schools, was, that an examination of teachers might be had, and, he states, public announcement was made that such examination would take place. Plaintiff was present at that meeting of the institute, but whether he heard the announcement or not, the superin- tendent does not know. That such examination would be held was a matter of public notoriety, and as it was of special interest to those assembled, it must have been the subject of conversation. The fact is uncontroverted, Miss Swartz was at that session of the institute, was examined, and received the usual certificate of qualification. On presenting it to defendants, they gave her the 1 Accord: Doggett v. Emerson, 3 Story (U. S. C. C), 700 ; Spurr v. Bene- dict, 99 Mass. 463 ; Hammond v. Fennock, 61 N. Y. 145 ; Taylor v. Leith, 26 Ohio St. 428 ; Lewis v. McLemore, 10 Yerg. (Tenn.) 206. See also note to Chatham Furnace Co. v. Moffatt, post, p. 301. 272 FORMATION OF CONTRACT. [Pabt U. school, according to their original agreement with her, and refused to allow plaintiff to teach, and so notified him at once by letter. In this they did right. Plaintiff's employment was induced either by a misrepresentation or a misapprehension of facts, and he could not demand the performance of his alleged contract. Defendants were misled by the erroneous information communicated by plain- tiff, and he will not be permitted to make his wrongful conduct a ground of an action in his favor. Whether his representations of facts were wilfully or innocently untrue, is a question about which we need express no opinion. The effect is the same, whether he knew they were untrue or not. Legally, Miss Swartz was entitled to the benefit of her contract with defendants, and they never would have negotiated with plaintiff concerning the school had it not been for his representa- tion she could not obtain the requisite certificate. On these principal facts there is absolutely no conflict in the testimony. It is all one way. There is not a shadow of justice in the claim put forth by plaintiff, and in no view that can be taken, can he be permitted to recover. The judgment of the court below will be reversed. Judgment reversed. WOODKUFF & CO. v. SAUL. 70 GEORGIA, 271.— 1883. Action on an account. Defense, composition and release. Judgment for defendant. . Plaintiffs appeal. Plaintiffs sued defendant on an account, and in reply to the defense of composition and release, set up that the agreement was procured by the false representations of the defendant. Cbawfoed, J. . . . The error complained of in the charge given, is that the debtor must know his representations to be false, to make the settlement void. It is thoroughly well settled by the common law that the misrepresentation of a material fact, made by one of the parties to a contract, though made by mistake and innocently, if acted on by the opposite party, constitutes legal Chap. IV. §2.] REALITY OF CONSENT: MISREPRESENTATION. 273 fraud. Story's Eq., 191 et seq. ; Eerr on Fraud and Mistake, 63 e( seg. ; 6 Ga. 468. * ♦ • « * Judgfment reversed.* 6. In contracts uberrimae fidei. WALDEN V. LOUISIANA INSURANCE CO. 12 LOUISIANA, 134. — 1838. Mabtin, J. The plaintiff is appellant from a judgment, which rejected his claim for the value of a house, insured by the defend- ants, and which was destroyed by fire. The facts of the case are these: A ropewalk, which was so contiguous to the house, that the destruction of the former by fire must necessarily have involved the latter in the like calamity; it was rumored, that an attempt had been made to set lire to the ropewalk, which induced the plaintiff to insure the house. The ^ Where the defense to notes given to aid in the building of a railway was that they were obtained by false representations, the court said: "Even where the representations, however innocently made, are untrue in fact, the party who relies upon them ought not to be bound by a misrepresentation which positively and directly deceives him ; and where an expressed repre- sentation turns out to be untrue, it is immaterial whether the party making it knew it to be false or not. If he did not know it to be true (and he could not know it to be so if it were false) , he is as answerable as if he made it, knowing it to be false. As the defendant by confiding in the false and erroneous representations of Carlson was induced to sign the notes, he ought in equity and good conscience not to pay them. Waters v. Mattingly, 1 Bibb, 244; East v. Matheny, 1 A. K. Marsh. 192." Horton, C. J., in Wickham v. Grant, 28 Kan. 517. But in Gregory v. Schoenell (55 Ind. 101), where the action was replevin to recover possession of property delivered under a contract alleged to have been induced by false representations, the court said: "In such a case, to establish fraud and authorize a rescission of the contract for that cause, the representations made must have been such as were calculated to deceive a person of common prudence ; they must have been false, and known to be false at the time, by the person who made them, and the person to whom they were ma'de must have believed them to be true and relied upon them ; and they must have been the inducement which caused him to part with his property." 274 FORMATION OF CONTRACT. [Pa»t U. defendants resisted his claim, on the ground, that he had not communicated the circumstance, which had excited his ailarm and determined him to insure. It appears to us, the District Court did not err. The under- writer had an undoubted right to be informed of every circum- stance, which, creating or increasing the risk against which insurance is sought, may induce him to decline the insurance, or demand a higher premium. It appears, from the plaintiff's own confession, that the attempt which had been made to set on fire a building, which could not have been consumed without materially endangering his house, created in him an alarm, which prompted him to guard against the danger. It is true, he evidently acted in good faith; for when he called on the defendants for indemnification, he candidly informed them of the circumstance which had alarmed him. His ignorance of his duty cannot protect him against his omission to give informa- tion of a material fact, which the defendants had a right to know, in order to establish the proper rate of insurance. It is therefore ordered, adjudged, and decreed that the judg- ment of the District Court be affirmed, with costs.* 1 " In respect to the duty of diaolosing all material facts, the case of rein- surance does not differ from that of an original insurance. The obligation in both cases is one uberrimiz fidei. The duty of communication indeed is independent of the intention, and is violated by the fact of concealment even where there is no design to deceive. The exaction of information in some instances may be greater in a case of reinsurance than as between the parties to an original insurance. In the former the party seeking to shift the risk he has taken is bound to communicate his knowledge of the charac- ter of the original insured, where such information would be likely to influ- ence the judgment of an underwriter ; while in the latter the party, in the language of Bronson, J. , in the case of the New York Bowery Fire Ins. Co. V. New York Fire Ins. Co., 17 Wend. (N. Y.) 359, 367, is 'not bound nor could it be expected that he should speak evil of himself.' " — Mr. Justice Matthews, in Sun Mut. Ins. Co. v. Ooean Ins. Co., 107 U. S. 485, 610. For concealment in marine insurance, see My v. Hallett, 2 Caines' Rep. 57. For innocent misrepresentation, see Qoddard v. Monitor Ins. Co., 108 Mass. 56. Chap. IV. §2.] REALITY OJ" CONSENT: MISREPRESENTATION. 275 PHCENIX LIFE INS. CO. v. EADDIN. 120 UNITED STATES, 183. — 188T. Action at law to recover upon a life insurance policy issued by defendant upon the life of plaintiff's son. Judgment for plaintiff. Defendant appeals. The policy contained a provision that, " if any of th^ declara- tions or statements made in the application for this policy, upon the faith of which this policy is issued, shall be found in any respect untrue, this policy shall be null and void." Question 28 and the answer were as follows : "28. Has any application been made to this or any other company for assurance on the life of the party? If so, with what result? "|10,000, Equitable Life Aagur- What amounts are now assured on ance Society." the life of the party, and in what companies ? If ah-eady assured in this company, state the No. of the policy." Defendant offered to prove that the assured, within three weeks before the application for the policy in suit, had made applica- tions to two other companies for insurance on the life of the insured, each of which had been declined. The court excluded the evidence and ruled, " that if the answer to one of the inter- rogatories of question 28 was true, there would be no breach of warranty; that the failure to answer the other interrogatories of question 28 was no breach of the contract; and that if the company took the defective application, it would be a waiver on their part of the answers to the other interrogatories of that question." Me. Justice Gray. . . . The jury having returned a verdict for the plaintiff in the full amount of the policy, the defendant's ^ceptions to the refusal to rule as requested and to the rulings aforesaid present the principal question in the case. The rules of law which govern the decision of this question are well settled, and the only difficulty is in applying those rules to the facts before us. 276 FORMATION OF CONTRACT. [Part II. Answers to questions propounded by the insurers in an applica- tion for insurance, unless they are clearly shown by the form of the contract to have been intended by both parties to be war- ranties, to be strictly and literally complied with, are to be construed as representations, as to which substantial truth in everything material to the risk is all that is required of the applicant. Moulor v. American Ins. Co., Ill U. S. 336; Campbell V. New England Ins. Co., 98 Mass. 381; Thomson v. Weems, 9 App. Cas. 671. The misrepresentation or concealment by the assured of any material fact entitles the insurers to avoid the policy. But the parties may by their contract make material a fact that would otherwise be immaterial, or make immaterial a fact that would otherwise be material. Whether there is other insurance on the same subject, and whether such insurance has been applied for and refused, are material facts, at least when statements regard- ing them are required by the insurers as part of the basis of the contract. Carpenter v. Providence Washington Ins. Co., 16 Pet. 495; Jeffries v. Life Ins. Co., 22 Wall. 47; Anderson y. Fitzgerald, 4 H. L. Cas. 484; Macdonald v. Law Union Ins. Co., L. E. 9 Q. B. 328; Edington v. ^tna Life Ins. Co., 77 N. Y. 564, and 100 N. Y. 536. Where an answer of the applicant to a direct question of the insurers purports to be a complete answer to the question, any substantial misstatement or omission in the answer avoids a policy issued on the faith of the application. Cazenove v. British Equitable Assurance Co., 29 Law Journal (N. S.), C. P. 160, affirm- ing S. C. 6 C. B. N. S. 437. But where upon the face of the appli- cation a question appears to be not answered at all, or to be imperfectly answered, and the insurers issue a policy without further inquiry, they waive the want or imperfection in the answer, and render the omission to answer more fully immaterial. Connecticut Ins. Co. v. Luchs, 108 U. S. 498 ; Hall v. People's Ins. Co., 6 Gray, 185; Lorillard Ins. Co. v. McCulloch, 21 Ohio St. 176; American Ins. Co. v. Mahone, 56 Mississippi, 180; Carson v. Jersey City Ins. Co., 14 Vroom, 300, and 15 Vroom, 210; Lebanon Ins. Co. V. Kepler, 106 Penn. St. 28. The distinction between an answer apparently complete, but in Chap. IV. § 2.] REALITY OF CONSENT: MISREPRESENTATION. 277 fact incomplete and therefore untrue, and an answer manifestly incomplete, and as such accepted by the insurers, may be illus- trated by two cases of fire insurance, which are governed by the same rules in this respect as cases of life insurance. If one applying for insurance upon a building against fire is asked whether the property is incumbered, and for what amount, and in his answer discloses one mortgage, when in fact there are two, the policy issued thereon is avoided. Towne v. Fitchburg Ins. Co., 7 Allen, 51. But if to the same question he merely answers that the property is incumbered, without stating the amount of incumbrances, the issue of the policy without further inquiry is a waiver of the omission to state the amount. Nichols v. Fayette Ins. Co., 1 Allen, 63. In the contract before us, the answers in the application are nowhere called warranties, or made part of the contract. In the policy those answers and the concluding paragraph of the appli- cation are referred to only as "the declarations or statements upon the faith of which this policy is issued; " and in the concluding paragraph of the application the answers are declared to be " fair and true answers to the foregoing questions," and to "form the basis of the contract for insurance." 'They must therefore be considered, not as warranties which are part of the contract, but as representations collateral to the contract, and on which it is based. The 28th printed question in the application consists of four successive interrogatories, as follows : " Has any application been made to this or any other company for assurance on the life of the party? If so, with what result? What amounts are now assured on the life of the party, and in what companies? If already assured in this company, state the number of policy." The -only answer written opposite this question is, "$10,000, Equitable Life Assurance Society." The question being printed in very small type, the answer is written in a single line midway of the opposite space, evidently in order to prevent the ends of the letters from extending above or below that space; and its position with regard to that space, and to the several interrogatories combined in the question, does not appear to us to have any bearing upon the construction and effect of the answer. 278 FORMATION OF CONTRACT. [Part II. But the four interrogatories groaped togetlier in one question, and all relating to the subject of otter insurance, would naturally be understood as all tending to one object, the ascertaining of the amount of such insurance. The answer in its form is responsive, not to the first and second interrogatories, but to the third inter- rogatory only, and fully and truly answers that interrogatory by stating the existing amount of prior insurance and in what com- pany, and thus renders the fourth interrogatory irrelevant. If the insurers, after being thus truly and fully informed of the amount and the place of prior insurance, considered it material to know whether any unsuccessful applications had been made for additional insurance, they should either have repeated the first two interrogatories, or have put further questions. The legal effect of issuing a policy upon the answer as it stood was to waive their right of requiring further answers as to the particulars mentioned in the 28th question, to determine that it was imma- terial, for the purposes of their contract, whether any unsuccess- ful applications had been made, and to estop them to set up the omission to disclose such applications as a ground for avoiding the policy. The insurers, having thus conclusively elected to treat that omission as immaterial, could not afterwards make it material by proving that it was intentional. The case of London Assurance v. Mansel (11 Ch. D. 363), on ■which the insurers relied at the argument, did not arise on a question including several interrogatories as to whether another application had been made, and with what result, and the amount of existing insurance, and in what company. But the application or proposal contained two separate questions; the first, whether a proposal had been made at any other oflS.ce, and, if so, where ; the second, whether it was accepted at the ordinary premium, or at an increased premium, or declined; and contained no third question or interrogatory as to the ainount of existing insurande, and in what company. The single answer to both questions was, "Insured now in two oflBces for £16,000 at ordinary rates. Policies effected last year." There being no specific interrogatory as to the amount of existing insurance, that answer could apply only to the question whether a proposal had been made, or to the question whether it had been accepted, and at what rates, or Chap. IV. §2.] REALITY OF CONSENT: MISREPRESENTATION. 279 declined; and as applied to either of those questions it was in fact, but not upon its face, incomplete and therefol-e untrue. As applied to the first question, it disclosed only some and not all of the proposals which had in fact been made ; and as applied to the second question, it disclosed only the proposals which had been accepted, and not those which had been declined, though the question distinctly embraced both. That case is thus clearly distinguished in its facts from the case at bar. So much of the remarks of Sir George Jessel, M. E., in delivering judgment, as implies that an insurance company is not bound to look with the greatest aittention at the answers of an applicant to the great number of questions framed by the company or its agents, and that the intentional omission of the insured to answer a question put to him is a concealment which will avoid a policy issued without further inquiry, can hardly be reconciled with the uniform current of American decisions. Por these reasons, our conclusion upon this branch of the case is that there was no error, of which the company had a right to complain, either in the refusals to rule, or in the rulings made. » « « # » The only objection remaining to be considered is that of vari- ance "between the declaration and the evidence, which is thus stated in the bill of exceptions : " After the plaintiff had rested, the defendant asked the court to rule that there was a variance between the declaration and the proof, inasmuch as the declaration stated the consideration of the contract to be the payment of the sum of $152.10 and of an annual premium of $304.20, while the policy showed the consideration to be the representations made in the application as well as payment of the aforesaid sums of money, and that an amendment to the declaration was necessary; but this the court declined to rule, to which the defendant excepted." But the "consideration," in the legal sense of the word, of a contract is the quid pro quo, that which the party to whom a promise is made does or agrees to do in exchange for the promise. In a contract of insurance, the promise of the insurer is to pay a certain amount of money upon certain conditions ; and the con- sideration on the part of the assured is his payment of the whole 280 FORMATION OF CONTRACT. [Paet n. premium at the inception of the contract, or his payment of part then and his agreement to pay the rest at certain periods while it continues in force. In the present case, at least, the applica- tion is collateral to the contract, and contains no promise or agreement of the assured. The statements in the application are only representations upon which the promise of the insurer is based, and conditions limiting the obligation which he assumes. If they are false, there is a misrepresentation, or a breach of condition, which prevents the obligation of the insurer from ever attaching, or brings it to an end; but there is no breach of any contract or promise on the part of the assured, for he has made none. In short, the statements in this application limit the liability of the insurer, but they create no liability on the part of the assured. The expression at the beginning of the policy, that the insurance is made "in consideration of the representations made in the application for this policy," and of certain sums paid and to be paid for premiums, does not make those representations past of the consideration, in the technical sense, or render it necessary or proper to plead them as such. Judgment affirmed.* (iv.) Bemedies for misrepresentation ; estoppel. STEVENS V. LUDLUM. 46 MINNESOTA, 160. — 1891. Action brought in the municipal court of Minneapolis, the complaint alleging that defendant was engaged in business under the, name of the "New York Pie Company," and that on Decem- ber 20, 1889, plaintiff drew a bill of exchange for f 100 upon defendant under that name, which was on the same day accepted by him, the acceptance being signed " New York Pie Company, E.J. "White, Mgr." The answer was a general denial. At the trial (before the court, without a jury) there was evidence tend- 1 In National Bank r. Union Ins. Co. (88 Cal. 497), the clause, "Fraud, false swearing, misrepresentation, or concealment of a material fact by the insured . . . shall render this policy void," was construed to mean intentional misstatements only. Chap. IV-. § 2.] REALITY OF CONSENT: MISREPRESENTATION. 281 ing to prove, and the court found, among other things, that the bill was drawn for the price of goods sold and delivered by plain- tiff; that the goods were ordered by White in the name of the pie company, and, before delivering them, the plaintiff made inquiry at Bradstreet's and at Dun's commercial agencies (to which he was a subscriber), and was informed that the defendant was the proprietor of the business carried on in that name, and he relied on this information in making the sale ; and that the information so given by the agencies had been received by them from defendant. Judgment was ordered for plaintiff, and the defendant appeals from an order refusing a new trial. GiiiFiLLAN, C. J. The facts found by the court below are suf&cient to create an equitable estoppel against defendant as to the ownership of the concern doing business as the " New York Pie Company." To raise such an estoppel, it is not necessary that the representations should have been made with actual fraudulent intent. If he knows or ought to know the truth, and they are intentionally made under such circumstances as show that the party making them intended, or might reasonably have anticipated, that the party to whom they are made, or to whom they are to be communicated, will rely and act on them as true, and, the latter has so relied and acted on them, so that to permit the former to deny their truth will operate as a fraud, the former is, in order to prevent the fraud, estopped to deny their truth. Coleman v. Pearce, 26 Minn. 123 (1 N. W. Eep. 846) ; Beebe v. Wilkinson, 30 Minn. 548 (16 N. W. Rep. 450). Nor need the representations be made directly to the party acting on them. It is enough if they were made to another, and intended or expected to be communicated as the representations of the party making them to the party acting on them, for him to rely and act on. " The representation may be intended for a particular individual alone, or for several, or for the public, or for any one of a par- ticular class, or it may be made to A, to be communicated to B. Any one so intended by the party making the representation will be entitled to relief or redress against him, by acting on the representation to his damage." Bigelow, Fraud, 445. If one act on a representation not made to nor intended for him, he will do so at his own risk. An instance of a right to act on a representa- 282 FORMATION OF CONTRACT. [Part IL tion not made directly to the person acting on it, but intended for him if he had occasion to act on it, is furnished by Pence v. Arbwlcte, 22 Minn. 417. The representations a business man makes to a bank or commercial agency, especially to the latter, relating to his business or to his pecuniary responsibility, are among those expected to be communicated to others for them to act on. The business of a commercial agency is to get such information as it can relative to the business and pecuniary ability of business men and business concerns, and communicate it to such of its patrons as may have occasion to apply for it. Any one making representations to such an agency, relating to his business or to the business of any concern with which he is connected, must know, must be held to intend, that whatever he so represents will be communicated by the agency to any patron who may have occasion to inquire. His representations are intended as much for the patrons of the agency, and for them to act on, as for the agency itself. When the representations so made are communicated, as those of the person making them, to a patron of the agency, and he relies and acts on them, he is in position to claim an estoppel. The findings of fact in the case are fully sustained by the evidence. ^ Order aflSrmed. § S. Fraud. (i.) Essential features. a. Fraud is a false representation. LAIDLAW V. OEGAN. 2 WHEATON (U. S.), 178,-1817. Petition or libel for the possession of one hundred and eleven hogsheads of tobacco, and for the sequestration of the same pend- ing the final decision of the court. Answer by defendants dis- claiming any interest in the tobacco, and bill of interpleader by Boorman and Johnson, who claimed the ownership of the same. Writ of sequestration was granted, and on the trial a verdict was Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 283 directed for the plaintiff, and final judgment entered for the pos- session of the tobacco, and for costs. Writ of error by defendants. The bill of exceptions was in part as follows : • . " And it appearing in evidence in the said cause, that on the night of the 18th of February, 1815, Messrs. Livingston, White, and Shepherd brought from the British fleet the news that a treaty of peace had been signed at Ghent, by the American and British commissioners, contained in a letter from Lord Bathurst to the Lord Mayor of London, published in the British newspapers, and that Mr. White caused the same to be made public, in a handbill, on Sunday morning, 8 o'clock, the 19th of February, 1815, and that the brother of Mr. Shepherd, one of these gentlemen, and who was interested in one-third of the profits of the pur- chase set forth in said plaintiff's petition, had on Sunday morning, the 19th of February, 1815, communicated said news to the plaintiff; that the said plaintiff, on receiving said news, called on Francis Girault (with whom he had been bargaining for the tobacco mentioned in the petition, the evening previous), said Francis Girault being one of the said house of trade of Peter Laidlaw & Co., soon after sunrise on the morning of Sunday, the 19th of February, 1815, before he had heard said news. Said Girault asked if there was any news which was calculated to enhance, the price or value of the ai-ticle about to be purchased; and that the said purchase was then and there made, and the biU of parcels annexed to the plaintiff's petition, delivered to the plaintiff, between 8 and 9 o'clock in the morning of that day ; and that, in consequence of said news, the value of said article had risen from 30 to 50 per cent. There being no evidence that the plaintifi had asserted or suggested anything to the said Girault, calculated to impose upon him with respect to said news, and to induce him to think or believe that it did not exist ; and it appearing that the said Girault, when applied to, on the next day, Monday, the 20th of February, 1815, on behalf of the plaintifi, for an invoice of said tobacco, did not then object to the said sale, but promised to deliver the invoice to the said plaintiff, in the course of the forenoon of that day ; the court charged the jury to find for the plaintiff. Where- fore, that justice, by due course of law, may be done in this case, the counsel of said defendants, for them, and on their behalf, prays the court that this bill of exceptions be filed, allowed, and certified as the law directs. « (Signed) Dominick A. Hall, District Judge. « New Orleans, this 3d day of May, 1815." Marshall, C. J. The question in this case is, whether the intelligence of extrinsic circumstances, which might influence the price of the commodity, and which was exclusively within the knowledge of the vendee, ought to have been communicated 284 FORMATION OF CONTRACT. [Part II. by him to the vendor? The court is of opinion, that he was not bound to communicate it. It would be difficult to circumscribe the contrary doctrine within proper limits, where the means of intelligence are equally accessible to both parties. But at the same time, each party must take care not to say or do anything tending to impose upon the other. The court thinks that the absolute instruction of the judge was erroneous, and that the question, whether any imposition was practiced by the vendee upon the vendor, ought to have been sub- mitted to the jury. For these reasons, the judgment must be reversed, and the cause remanded to the District Court of Louisiana, with directions to award a venire facias de novo. Judgment reversed, and venire de novo awarded.'' 1 " That case (Laidlaw v. Organ) seems to us to go as far as moral princi- ples will justify, even in oases of that description, depending on public intelli- gence, and further than the same court seemed willing to go in the case of Etting v. Bank of United States, 11 Wheat. 59." — Mellin, C. J., in Lapish V. Wells, 8 Me. 175, 189. It should be noticed that Etting v. Bank of United States was a case of fraud on a, surety. See also the criticism in Paddock V. Strobridge, 29 Vt. 470, and the explanation in Stewart v. Wyoming Banche Co., 128 U. S. 38.3. In Groyle v. Moses (90 Pa. St. 250), an action of deceit, the court says: " The question presented by the points was substantially, if at the time of the sale the horse was known to the defendant to be 'a cribber or wind- sucker,' and this fact was artfully concealed by him to the injury of the plaintiff, whether it was such a concealment of a latent defect as would avoid the contract. The points submitted did not rest on the mere facts that the horse was hitched short and the reasons assigned therefor, but also on the additional facts that the defendant knew him to be a crib-biter, and resorted to this artifice to conceal it, and gave an untruthful reason 'to mislead and deceive the plaintiff. The complaint is not for a refusal or omission to answer, but for an evasive and artful answer. ... If the jury should believe, as the plaintiff testified, that he said to the defendant, ' If there is anything wrong with the horse, I do not want him at any price,' and that the defendant, with knowledge he was a crib-biter, answered the plaintiff artfully and evasively, with intent to deceive him, and did thereby deceive him to his injury, it was such a fraud on the plaintiff as would justify him in rescinding the contract." Cf. Dean v. Morey, 33 la. 120. In Stewart v. Wyoming Banche Co. (128 U. S. 383), the court says : " In an action of deceit, it is true that silence as to a material fact is not neces- sarily, as matter of law, equivalent to a false representation. But mere silence is quite different from concealment ; aliud est tacere, aliud celare ; a suppression of the truth may amount to a suggestion of falsehood ; and if, with intent to deceive, either party to a contract of sale conceals or sup- Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 285 GRIGSBY V. STAPLETON. 94 MISSOURI, 423. —1887. Black, J. This was a suit in two counts. The first declares for the contract price of one hundred head of cattle sold by the plaintiff to the defendant. The second seeks to recover the value of the same cattle. The contract price, as well as the value, is alleged to have been $3431.25. The answer is (1) a general denial; (2) a fraudulent representation as to the health and con- dition of the cattle ; (3) fraudulent concealment of the fact that they had Spanish or Texas fever; (4) tender of their value in their diseased condition. Plaintiff purchased one hundred and five head of cattle at the stockyards in Kansas City on Friday, July 25, 1884, at $3.60 per hundred-weight. He shipped them to Barnard on Saturday. Mr. Eay, plaintiff's agent, attended to the shipment and accom- panied the cattle. Eay says it was reported in the yards, before he left Kansas City, that the cattle were sick with Texas fever; some persons said they were sick and some said they were not. When the cattle arrived at Barnard, Eay told the plaintiff of the report, and that the cattle were in a bad condition; that one died in the yards at Kansas City before loading, and another died in the cars on the way. On Sunday morning the plaintiff started with them to his home. After driving them a mile or so, he says he concluded to and did drive them back to the -yards, because they were wild. One of them died on this drive, and two more died in the pen at Barnard before the sale to defendant. There is much evidence tending to show that plaintiff drove the cattle back because he was afraid to take them to his neighborhood, and that he knew they were diseased, and dying from the fever. He presses a material fact, which he is in good faith bound to disclose, this is evidence of and equivalent to a false representation, because the conceal- ment or suppression is in effect a representation that what is disclosed is the whole truth. The gist of the action is fraudulently producing a false impres- sion upon the mind of the other party ; and if this result is accomplished, it is unimportant whether the means of accomplishing it are words or acts of the defendant, or his concealment or suppression of material facts not equally within the knowledge or reach of the plaintiff." 286 FORMATION OF CONTRACT. [Part IL made no disclosure of the fact that the cattle were sick to defendant, nor that they were reported to have the fever. Defendant bargained for the cattle on Sunday afternoon and on Monday morning completed the contract at ^f 3.75 per hundred- weight, and at once shipped them to Chicago. Thirty died on the way, and twenty were condemned by the health officer. It is shown beyond all question that they all had the Texas fever. The court, by the first instruction given at the request of the plaintiff, told the jury, that if "Plaintiff made no representations to defendant as to the health or condition of said cattle to influence defendant to believe said cattle were sound or in healthy condition, but, on the contrary, defendant bought said cattle on actual view of the same and relying on his own judgment as to their healtlf and condition, then the jury will find for plaintiff. And if the cattle were bought by the defendant in the manner above stated, it makes no difference whether said cattle, or any of them, were at the time of said sale affected with Texas fever or other disease, or whether plaintiff did or did not know of their being so diseased, as, under such circumstances, he would buy at his own risk and peril." Caveat emptor is the general rule of the common law. If defects in the property sold are patent and might be discovered by the exercise of ordinary attention, and the buyer has an opportunity to inspect the property, the law does not require the vendor to point out defects. But there are cases where it becomes the duty of the seller to point out and disclose latent defects. Parsons says the rule seems to be, that a concealment or mis- representation as to extrinsic facts, which affect the market value of the thing sold, is not fraudulent, while the same concealment of defects in the articles themselves would be fraudulent. 2 Pars, on Cont. (6th ed.) 775. When an article is sold for a particular purpose, the suppression of a fact by the vendor, which fact makes the article unfit for the purpose for which it was sold, is a deceit ; and, as a general rule, a material latent defect must be disclosed when the article is offered for sale, or the sale will be avoided. 1 Whart. on Cont. sec. 248. The sale of animals which the seller knows, but the purchaser does not, have a con- tagious disease, should be regarded as a fyaud when thp fg.ct of «^p. rv. §3.] REALITY OF CONSENT: FRAtlD. • 287 the disease is not, disclosed. Cooley on Torts, 481. Kerr says : " Defects, however, which are latent, or eircumstajnces materially affecting the subject matter of a sale, of which the purchaser has no means, or at least has no equal means of knowledge, must, if known to the seller, be disclosed." Kerr on Fraud and Mis. (Bump's ed.) 101. In Cardwell v. McClelland (3 Sneed, 150) the action was for fraud in the sale of an unsound horse. The court had instructed that if the buyer relies upon his own judgment and observations, and the seller makes no representations that are untrue, or says nothing, the buyer takes the property at his own risk. This instruction was held to be erroneous, the court saying: "If the seller knows of a latent defect in the property that could not be discovered by a man of ordinary observation, he is bound to disclose it." In Jeffrey v. Bigelow (13 Wend. 518) the defendants, through their agent, sold a flock of sheep to the plaintiff; soon after the sale, a disease known as the scab made its appearance among the sheep. It was in substance said, had the defendants made the sale in person, and known the sheep were diseased, it would have been their duty to have informed the purchaser; and the defendants were held liable for the deceit. In the case of McAdams v. Cafes (24 Mo. 223) the plaintiff made an exchange or swap for a filly, unsound from loss of her teeth. The court, after a careful review of the authorities, as they then stood, announced this conclusion : " If the defect com- plained of in the present case was unknown to the plaintiff, and of such a character that he would not have made the exchange had he known of it, and was a latent defect such as would have ordinarily escaped the observation of men engaged in buying horses, and the defendant, knowing this, allowed the plaintiff to exchange without communicating the defect, he was guilty of a fraudulent concealment and must answer for it accordingly." This case was followed and the principle reasserted in Barron v. Alexander, 27 Mo. 530. Bill v. Balls (2 H. & N. 299) seems to teach a different doctrine, but the cases in this court, supported as they are, must be taken as the established law of this State. There is no claim in this case that the defendant knew these cattle were diseased. It seems to be conceded on all hands that 288 FORMATION OF CONTRACT. [Pakt II. Texas fever is a disease not easily detected, except by those hay- ing had experience with it. The cattle were sold to the defendant at a sound price. If, therefore, plaintiff knew they had the Texas fever, or any other disease materially affecting their value upon the market, and did not disclose the same to the defendant, he was guilty of a fraudulent concealment of a latent defect. It is not necessary to this defense that there should be any warranty or representations as to the health or condition of the cattle. Indeed, so far as this case is concerned, if the cattle had been pronounced by some of the cattlemen to have the Texas fever, and, after knowledge of that report came to plaintiff, some of them to his knowledge died from sickness, then he should have disclosed these facts to the defendant. They were circumstances materially affecting the value of the cattle for the purposes for which they were bought, or for any other purpose, and of which defendant, on all the evidence, had no equal means of knowledge. To withhold these circumstances was a deceit, in the absence of proof that defendant possessed such information. It follows that the first instruction is radically wrong, and that the second given at the request of the plaintiff is equally vicious. The judgment is reversed and the cause remanded.* 6. The representation must be a representation of fact. FISH V. CLELAND. 33 ILLINOIS, 237. — 1864. Bbckwith, J. The appellees filed a bill in chancery to set aside a sale made by them to the appellant of a life estate in a town lot in Jacksonville, on the ground of fraud. The specific 1 See also Maynard v. Maynard (49 Vt. 297), where it was held a fraud to conceal the Impotenoy of an animal purchased for breeding purposes ; Brown V. Montgomery (20 N. Y. 287), where It was held a fraud for the vendors to conceal the insolvency of the makers of a check sold to the vendee. For a case showing a strict application of the maxim caveat emptor, see Beninger V. Corwin, 24 N. J. L. 257. Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 289 allegations on which relief is sought are : First. That the parties owning the remainder, held a meeting at Jacksonville, at which the appellant represented his wife, one of the owners, when it was concluded by them to file a bill in chancery for a partition of the property, and in order to facilitate the same it was deemed expedient to buy the life estate of Mrs. Cleland on joint account, at the price of $2600 to $2800, or thereabouts; that for this pur- pose the appellant, representing one of the joint owners, went to Eock Island, where Mrs. Cleland resided, and there purchased her life estate, fraudulently suppressing what had transpired between the joint owners of the remainder at Jacksonville. Second. That the appellant on that occasion fraudulently repre- sented to Mrs. Cleland that the property could not be sold unless all the persons interested therein were willing; and that Hatfield, one of the joint owners, was not willing to have it sold, when he well knew that Hatfield wished it partitioned and sold. By means of the suppression of what had transpired between the owners of the remaiuder, and these representations, the appellees allege that they were induced to sell the life estate in question for a grossly inadequate consideration. In the present case it is not material to define the nature and extent of the appellant's obligation to the owners of the remainder. He may have been under obligation to act for them and not for himself, but their rights cannot be asserted by the appellees, and are not involved in the present controversy. It is mentioned in the bill that the appellant was the son-in-law of Mrs. Cleland, but it is not alleged that this relationship occasioned any confidence between the parties. There might have been such a confidence growing out of this relation as to authorize the appellees to act upon the presumption that there could be no concealment of any material fact from them, but a court of equity cannot afford relief on that ground in the absence of any allegation that the parties acted on such presumption, and where there is no evidence from which that fact can be inferred. Undue concealment which amounts to a fraud from which a court of equity will relieve, where there is no peculiar relation of trust or confidence between the parties, is the non-disclosure of those facts and circumstances which one party is under some legal or equitable obligation to 290 FORMATION OF CONTRACT. [Part II. communicate to the other, and which the latter has a right, not merely inforo consdentice, but juris et de jure, to know. 1 Story's Eq. § 207. The appellant was not required by this well-estab- lished rule to disclose that the joint owners of the remainder contemplated a partition and sale of the property, nor their esti- mate of the value of the life estate, nor the object of his visit to Bock Island. There is nothing shown in the case creating a legal or equitable obligation on his part to do so. The bill does not allege any misrepresentation of the value of the property or of the life estate therein,, and we therefore dismiss from our con- sideration all the evidence in that regard. The allegata must exist before the court can consider the probata. The representation of the appellant that the property could not be sold without all the parties interested therein consented, if understood to mean that a voluntary sale could not be made without such consent, was true, and one which every one must know was true ; but if the representation was understood to mean that a sale could not be had by an order of court without the consent of all parties, then it was a representation in regard to the law of the land, of which the one party is presumed to know as much as the other. A representation of what the law will or will not permit to be done, is one upon which the party to whom it is made has no right to rely, and if he does so, it is his own folly, and he cannot ask the law to relieve him from the con- sequences. The truth or falsehood of such a representation can be tested by ordinary vigilance and attention. It is an opinion in regard to the law, and is always understood as such. 5 nUl, 303. We have not deemed it material to ascertain the truth or falsehood of the alleged representation that Hatfield was not willing the property should be sold. If untrue, it was only a misrepresentation in regard to the sellers' chance of sale, or the probability of their getting a better price for the property than the price offered by the appellant. Misrepresentations of this nature are not alone sufficient ground for setting aside a contract. 1 Sug. Vend. 7 ; 12 East, 637. Our duty is to administer the law, and having discharged it, we leave the parties before the tribunal of an enlightened public and to their own consciences. Our duty does not require us to become advocates for or against them before Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 291 those tribunals. The decree of the court below will be reversed, and the bill dismissed. Decree reversed.* [Again before the court and reported in 43 Illinois, 282, on the question of relation of trust and confidence.] EOSS V. DEINKAED'S ADM'E. 35 ALABAMA, 434. — 1860. Action by administrator on two bills of exchange drawn by B. on defendant and by him accepted. Defense, that it was repre- sented to defendant and to the drawer of the bill by the payee, that the bills were promissory notes and that defendant was signing as surety for B. Judgment for plaintiff. Defendant appeals. A. J. Walkee, C. J. . . . We do not deem it necessary to criti- cise the charges, as to what would constitute a fraud in the execu- . tion of the bill. We deem it sufB.cient for the guidance of the court upon a future trial to say that, if the person who took the bill, procured it by a false statement that it was an ordinary note, when he knew it to be a bill of exchange; and if the parties who gave the bill, did it in ignorance that it was a bill of exchange, and, trusting in the statement made to them, were misled by it, a fraud has been committed, and the defendant would be entitled to relief, to the extent of the injury done by the fraud, as against an indorsee who did not pay value. We think the law upon this point is correctly stated in Townsend & Millihen v. Cowles (31 Ala. 428) in the following words : "If the defendant was in fact ignorant of the law, and the other party, knowing him to be so and knowing the law, took advantage of 1 Accord : Duffany v. Ferguson, 66 N. Y. 482 ; Upton v. Tribilcock, 91 U. S. 45. " Trust and confidence reposed in a brother-in-law by his widowed sister-in-law requires the utmost good faith and fair dealing in any contract of sale between them. A misrepresentation of the law by the brother-in-law to his sister-in-law, whereby she is led to believe her title to property held by her is invalid, and on this account she sells it to him, which sale is much to his advantage, vitiates the sale at her election, even though such repre- sentation was made in good faith." — Sims v. Ferrill, 45 Ga. 585, 598. 292 FORMATION OF CONTRACT. [Part II. such ignorance to mislead him by a false statement of the law, it would constitute a fraud." It is conceivable that injury might result from a fraudulent representation that a bill of exchange was an ordinary promissory note; for, under our law, the incident of damages upon protest does not attach to notes, and the makers of such notes are not precluded from making defenses existing between the original parties, when they have passed into the hands of an innocent holder, as is the case with bills of exchange, which are governed by the commercial law. The judgment of the court below is reversed, and the cause remanded.^ DAWE V. MOEEIS. 149 MASSACHUSETTS, 188.— 1889. Tort. Defendant demurred. The Superior Court sustained the demurrer, and plaintiff appeals. Devens, J. The alleged misrepresentations of the defendant, by which the plaintiff avers that he was induced to enter into a contract for building thirty miles of the Florida Midland Eail- way, are that the defendant had purchased a certain quantity of rails at a certain price, and that he would sell those rails to the plaintiff at the same price if he would make such contract. The plaintiff's declaration alleges that the defendant had not then purchased the rails, and did not sell, and did not intend to sell, any rails so purchased to the plaintiff; and that by reason of the contract into which the plaintiff was induced to enter, he was obliged to purchase a large number of rails at a much higher price than that named by the defendant, to his great injury. If the formalitibs required by law in order that contracts for the sale and delivery of goods of the value here in question had been complied with, that these facts would constitute a contract upon a valuable consideration, will not be questioned. The plaintiff does not seek to recover upon this contract, but in an action of tort in the 1 See also Moreland v. Atchison, 19 Tex. 303 ; Cooke v. Nathan, 16 Barb. (N. Y.) 342 ; Burns v. Lane, 138 Mass. 350. Chap. rv. §3.] KEALITY OF CONSENT: FRAUD. 293 nature of deceit, because he was induced to enter into the contract with the riorida Railway Company by reason of the representa- tions above set forth. A representation, in order that, if material and false, it may form the ground of an action where one has been induced to act by reason thereof, should be one of some existing fact. A state- ment promissory in its character that one will thereafter sell goods at a particular price or time, will pay money, or do any similar thing, or any assurance as to what shall thereafter be done, or as to any further event, is not properly a representation, but a contract, for the violation of which a remedy is to be sought by action thereon. The statement by the defendant that he would thereafter sell rails at a particular price if the plaintiff would contract with the railway company was a promise, the breach of which has occasioned the injury to the plaintiff. Knowlton v. Keenan, 146 Mass. 86. The plaintiff contends that, even if this is so, the representation that the defendant had thus purchased the rails at the price named was material and false ; but if the allegation that the defendant had purchased the rails be separated from that of the promise to sell them to the plaintiff, it is seen at once to be quite unimpor- tant and immaterial. Had the defendant actually sold, or had he been ready to sell, the rails at the time and price he promised that he would, no action could have been maintained by reason of any false representation that he had purchased them when he made his promise, and no possible injury could thereby have resulted to the plaintiff. It is urged that, independent of any promise to sell to him, if the plaintiff had believed that the defendant had purchased rails at the price at which he said he had purchased them, the plaintiff might thus have been induced to believe that he himself could thereafter purchase them at the same price. But the injury from a false representation must be direct, and the probability or possibility that, because the defendant had purchased at a par- ticular price, the plaintiff would be able, or might believe himself to be able, to do so also, is too remote to afford any ground for action. It must be shown, not only that the defendant has committed 294 FORMATION OF CONTRACT. [Pabt IL a. tort and that the plaintiff has sustained damage, but that the damage is the clear and necessary consequence of the tort, and such as can be clearly defined and ascertained. Lamb r. Stone, 11 Pick. 527; Bradley v. Fuller, 118 Mass. 239. Quite a different case would be presented if the defendant had falsely represented to the plaintiff, if unskilled in the price of rails, what their market value then was, and what was the price at which they could then be purchased. It is also said, that if the plaintiff believed that the defendant had actually purchased the rails, at the time of the transaction, and that if he knew that the completion of the railroad was of vital importance to the interests of the defendant, he would more readily have confided in the defendant's promise to sell them, and thus that this representation was material. But in order that a false representation may form the foundation of an action of deceit, it must be as to some subject material to the contract itself. If it merely affect the probability that it will be kept, it is collateral to it. " Eepresentations as to matters which are merely collateral, and do not constitute essential elements of the contract into which the plaintiff is induced to enter, are not sufficient." Hedden v. Griffin, 136 Mass. 229. Whether the allegation as to the purchase of the rails by the defendant was material was a question for the court, which was to construe the contract, and determine its legal effect on the duties and liabilities of the parties. It was for it to determine (there being on the declaration of the plaintiff no dispute as to the facts) whether the alleged misrepresentations were material, and such as would invalidate the contract or form the foundation of an action of tort. Penn Ins. Go. v. Crane, 134 Mass. 56. The plaintiff further contends that, as when goods have been obtained under the form of a purchase with the intent not to pay for them, the seller may, on discovery of this, rescind the contract and repossess himself of the goods as against the purchaser or any one obtaining the goods from him with notice or without consideration, an action of tort should be maintained on an unfulfilled promise which, at the time of making, the promisor intended not to perform, by reason of which non-performance the plaintiff has suffered injury in having been induced to enter into Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 295 a contract which depended for its successful and profitable per- formance upon the performance by the defendant of his promise. Assuming that the plaintiff's declaration enables him to raise this question, — which may be doubted, as the averment that " said defendant had not then purchased said rails, or any part of them, which the defendant then knew, and therefore did not sell, and did not intend to sell, said rails already purchased by them to the plaintiff," is not an averment that the defendant intended not to perform his contract, — there is an obvious difference between the case where a contract is rescinded, and thus ceases to exist, and one in which the injury results from the non-performance of that which it is the duty of the defendant to perform, and where there is no other wrong than such non-performance. To term this a tort would be to confound a cause of action in contract with one in tort, and would violate the policy of the statute of frauds by relieving a party from the necessity of observing those statutory formalities which are necessary to the validity of certain execu- tory contracts. It was not disputed that the plaintiff's declaration sets forth in the second count a good cause of action. The result is, that as to the first count the entry must be. Judgment for the defendant affirmed. SHELDON V. DAVIDSON. 85 WISCONSIN, 138. — 1893. Action for deceit. Demurrer to complaint sustained. Plain- tiff appeals. The complaint set up that defendant leased to the plaintiff certain premises on the front of which there was a brick dwelling- house and store, and on the east sixty feet a barn, the lease stipu- lating that it should not take effect as to the east sixty feet until the expiration (six months later) of an existing lease between defendant and one Veidt; that plaintiff made due inquiry of defendant as to the terms and conditions of Veidt's lease, and that the defendant. 296 FORMATION OF CONTRACT. [Pakt It " With intent to deceive and defraud the plaintiff, and for the purpose of inducing him to sign said lease, falsely and fraudulently concealed from the plaintifE the fact that the barn standing upon the said east sixty feet [of said lot] was not the property of said defendant, but was the property of said Veidt, and that the plaintiff could not obtain possession thereof on the 10th day of September next ensuing, and falsely repre- sented to the plaintiff, and for the purpose of inducing the plaintiff to execute said lease, that he could have possession of said sixty feet and the stable standing thereon on and after September 10th next ensuing ; that the plaintiff, relying upon the said representations, was thereby induced to sign the aforesaid lease, and did so sign it within a few days thereafter." The complaint further alleged that the representation was false in that the barn belonged to Veidt and was removed by him at the expiration of his lease. There was no stipulation in the lease regarding the buildings. Okton, J. [After stating the above facts.] The gravamen of the complaint is the fraudulent concealment of the fact that the building on the east sixty feet of the lot was not the property of the defendant, but was the property of Veidt, the lessee ; and the false representation that the plaintifE could have possession of the said sixty feet, and the stable standing thereon, on and after Sep- tember 10th next ensuing. 1. As to the concealment as a cause of action. That barn on the sixty feet must have been placed there by the tenant, Veidt, temporarily for his own use, with the privilege of removal at the end of his term, and was never a part of the realty. It could not have been so attached to the soil as to become a part of the realty. If it had been, the plaintifE would have been entitled to it by the terms of his lease, and he could have prevented its removal. We conclude, therefore, that the barn was a tenant's fixture in fact as well as by the terms of the Veidt lease, and removable by him during his term. The Veidt lease is referred to in the plaintiff's lease. The plaintifE does not state that he did not know all about that lease, and all about the character of that building as having been placed there by the tenant, and remov- able. He states only that he inquired of the defendant about the terms and conditions of that lease, and does not state whether the defendant told him what they were or not. He does not state Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 297 that tte defendant knew, or had reason to know, that he, the plaintiff, was ignorant of the fact that the defendant did not own the ham. The defendant might well have supposed that the plaintiff knew the terms of that lease referred to in his own lease, and the character of the barn as a fixture was open to com- mon observation. But more material than eyen this is the absence of any averment that the plaintiff was induced to sign the lease by such fraudulent concealment. It states merely that the concealment was for the purpose of inducing him to do so, but fails to state that he was actually induced to do so by it. It is very clear that there are not suflB.cient allegations in the com- plaint to make the fraudulent concealment a cause of action. 2. As to the false representation that the plaintiff " could have possession of said east sixty feet, and the stable standing thereon, on and after September 10th next ensuing." The plaintiff did have possession of the sixty feet, so that such part of the repre- sentation at least was not false. As to the other part of the representation, it relates to a future event, and is not of an exist- ing fact or of a past event, and therefore is not actionable if such event should not occur. It is a mere opinion, prediction, or promise of a future condition of things, upon which the plaintiff had no right to rely. In Morrison v. Koch (32 Wis. 254) the representation was that a certain dam "would always in the future continue to furnish the full amount of power conveyed." Mr. Justice Lyon said in the opinion : "It seems quite clear that no charge of fraud can be predicated upon it. At most there was a mere expression of opinion that in the future the conditions on which the water supply depended would remain favorable to a continuance of the supply. ... It is wanting in all the essen- tial elements which constitute a fraud." In Patterson v. Wright (64 Wis. 289) the representation was that the party "said or promised that he would pay a certain sum of money as a con- sideration of and to induce the giving of certain notes, and upon which they were obtained." It was held "that the representation must relate to a present or past state of facts, and that relief as for deceit cannot be obtained for the non-performance of a promise or other statement looking to the future ; " citing the above case, Bigelow, Fi-auda, 11, 12, and Fenwick v. Orimes, 5 298 FORMATION OF CONTRACT. [Pabt 11 Cranch C. C. 439. In MaUhy v. Austin (65 Wis. 527) the repre- sentation was "of the value of a certain tract of land," and in Prince t. Overholser (75 Wis. 646) it was " that a certain bounty- land warrant would locate any kind of government land," and neither was held actionable. The principle has become elemen- tary in respect to all representations relating to the future and as mere expressions of opinion. This representation is not fraudulent or actionable for both reasons. It relates to a future event, and is a mere opinion, viz., "that the plaintiff could have possession of the building on the east sixty feet of the lot on and after September 10th next ensuing." This statement was made before March 16, 1891. This disposes of all the pretended deceit or fraud alleged in the complaint. The demurrer was properly sustained. By the court. The order of Superior Court is aifirmed, and the cause remanded for further proceedings according to law. c. The representation must be made mth knowledge of its false- hood or without belief in its truth. CHATHAM FUENACE CO. v. MOFFATT. 147 MASSACHUSETTS, 403. — 1888. Tort for false and fraudulent representations made by the defendant, whereby the plaintiff was induced to take a lease of a mine, and to purchase certain mining machinery. Judgment for plaintiff. C. Allen, J. It is well settled in this commonwealth that the charge of fraudulent intent, in an action for deceit, may be main- tained by proof of a statement made, as of the party's own knowledge, which is false, provided the thing stated is not merely a matter of opinion, estimate, or judgment, but is susceptible of actual knowledge; and in such case it is not necessary to make any further proof of an actual intent to deceive. The fraud consists in stating that the party knows the thing to exist, when he does not know it to exist; and if he does not know it to exist. Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 299 lie must ordinarily be deemed to know that he does not. For- getfulness of its existence after a former knowledge, or a mere belief of its existence, will not warrant or excuse a statement of actual knowledge. This rule has been steadily adhered to in this commonwealth, and rests alike on sound policy and on sound legal principles. 'Cole v. Cassidy, 138 Mass. 437; Savage v. Stevens, 126 Mass. 207; Tucker y. White, 125 Mass. 344; Litch- field Y. Hutchinson, 117 Mass. 195; Milliken v. Thorndike, 103 Mass. 382; Fisher v. Mellen, 103 Mass. 603; Stone v. Denny, 4 Met. 151; Page v. Bent, 2 Met. 371; Hazard v. Irwin, 18 Pick. 95. And though this doctrine has not always been fully main- tained elsewhere, it is supported by the following authorities, amongst others: Cooper v. Schlesinger, 111 U. S. 148; Bower v. Fenn, 90 Penn. St. 359; Brownlie v. Campbell, 5 App. Cas. 925, 953, by Lord Blackburn; Beese Biver Mining Go. v. Smith, Jj. E.. 4 H. L. 64, 79, 80, by Lord Cairns; Slim v. Croucher, 1 De G., P. & J. 518, by Lord Campbell. See also Peek v. Derry, 59 L. T. (N. S.) 78, which has been published since this decision was announced. - In the present case, the defendant held a lease of land, in which there was iron ore. The mine had formerly been worked, but operations had ceased, and the mine had become filled with water and debris. The defendant sought to sell this lease to the plain- tiff, and represented to the plaintiff, as of his own knowledge, that there was a large quantity of iron ore, from 8000 to 10,000 tons, in his ore bed, uncovered and ready to be taken out, and visible when the bed was free from water and debris. The material point was, whether this mass of iron ore, which did in truth exist under the ground, was within the boundaries of the land included in the defendant's lease, and the material part of the defendant's statement was, that this was in his ore bed; and the representations were not in fact true in this, that while in a mine connecting with the defendant's shafts there was ore suflB.- cient in quantity and location relative to drifts to satisfy his representations, if it had been in the land covered by the defend- ant's lease, that ore was not in the defendant's mine, but was in the adjoining mine; and the defendant's mine was in fact worked out. 300 FORMATION OF CONTRACT. [Pabt IL During the negotiations, tlie defendant exhibited to the plain- ti£E a plan of a survey of the mine, which had been made for him, and the plaintiff took a copy of it. In making this plan, the surveyor, with the defendant's knowledge and assent, did not take the course of the first line leading from the shaft through which the mine was entered, but assumed it to be due north; and the defendant never took any means to verify the course of this line. In point of fact, this line did not run due north, but ran to the west of north. If it had run due north, the survey, which was in other respects correct, would have correctly shown the mass of iron ore in question to have been within the boundaries of the land covered by the defendant's lease; but in consequence of this erroneous assumption the survey was misleading, the iron ore being in fact outside of those boundaries. It thus appears that the defendant knew that what purported to be a survey was not in all respects an actual survey, and that the line upon which all the others depended had not been verified, but was merely assumed; and this was not disclosed to the plaintiff. The defendant took it upon himself to assert, as of his own knowledge, that this large mass of ore was in his ore bed, that is, within his boundaries; and in support of this assertion he exhibited the plan of the survey, the first line of which had not been verified, and was erroneous. Now this statement was clearly of a thing which was susceptible of knowledge. A real survey, all the lines of which had been properly verified, would have shown with accuracy where the ore was situated. It was within the defendant's knowledge that the first line of the plan had not been verified. If under such circumstances he chose to take it upon himself to say that he knew that the mass of ore which had been discovered was in his ore bed, in reliance upon a plan which he knew was not fully verified, it might properly be found that the charge of fraudulent misrepresentation was sustained, although he believed his statement to be true. The case of Milliken v. Thorndike (103 Mass. 382) bears a con- siderable resemblance to the present in its facts. That was an action by a lessor to recover rent of a store, which proved unsafe, certain of the walls having settled or fallen in shortly after the execution of the lease. The lessor exhibited plans, and, in reply Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 301 to a question if the drains were where they were to be according to the plans, said that the store was built according to the plans in every particular; but this appeared by the verdict of the jury to be erroneous. The court said, by Mr. Justice Colt, that the representation "was of a fact, the existence of which was not open and visible, of which the plaintiff (the lessor) had superior means of knowledge, and the language in which it was made contained no words of qualification or doubt. The evidence fully warranted the verdict of the jury." In respect to the rule of damages, the defendant does not in argument contend that the general rule adopted by the judge was incorrect, but that it does not sufficiently appear what considera- tions entered into his estimate. No requests for rulings upon this subject were made, and there was no error in the course pursued by the judge. Exceptions overruled.' McKOWN V. EUEGASON. 47 IOWA, 636.— 1878. Action for deceit in the sale of a note. Judgment for plaintiff. Defendant appeals. Day, J. The court instructed the jury as follows : " 3. If [you find that] at the time defendant sold the note in question to the plaintiff, he represented said note was good, and that the maker ''■Accord: Lynch y. Mercantile Trust Co., 18 Fed. Kep. 486; Dulaneyy. Bogers, 64 Mo. 201 ; Haven v. Neal, 43 Minn. 316. That a defendant is not liable in an action for deceit where the misrepre- sentation was made innocently, see Cowley v. Smyth, 46 N. J. L. 380 ; Da Lee v. Blackburn, 11 Kans. 150 ; Tucker v. White, 125 Mass. 344 ; Wakeman t. Dalley, 51 N. Y. 27. Contra: Holcomh v. Nohle, 69 Mich. 396; Davis v. Nuzum, 72 Wis. 439, in which States no such distinction is taken. If an independent action of deceit could not be maintained, it would seem that a claim for damages for deceit could not be interposed as a defense to an action for the price. Mclntyre t. Buell, 132 N. Y. 192 ; King v. Hagle Mills, 10 Allen, 548 ; First N. B. v. Tocum, 11 Neb. 328. Contra : Mulvey V. King, 39 Ohio St. 491 ; Loper v. Bobinson, 54 Tex. 510. But it would be a defense to an action for damages for breach of a bilateral contract. School Directors v. Boomhour, 83 111. 17, ante, p. 271. 302 FORMATION OF CONTRACT. [Pakt II. thereof, H. E. Stewart, was solvent; that the plaintiff relied upon said representations in purchasing said note; and that said representations were untrue at the time they were made ; and that said defendant knew they were unti-ue, or had no reasonable grounds for believing them true, your verdict should be for the plaintiff for the amount paid for said note, together with six per cent interest from the date of said payment." The giving of this instruction is assigned as error. It was not proper to give this instruction under the issues presented. The plaintiff claims of defendant damages for fraudulently making representations, with full knowledge when he made them that they were false. Upon this question the case of Pearson v. Howe (1 Allen, 207) is directly in point. In that case it was held that in an action for deceit a declaration which alleges that the representations made were well known by defendant to be untrue is not supported by proof, simply, that the defendant had reasonable cause to believe that they were untrue. Judgment reversed.* 1 " The plaintiff requested the court to charge that if the defendant knew or had reason to believe there was not one hundred and twenty- five acres of land, he was guilty of fraud in representing that there was that quantity. The court declined to adopt that precise language, but repeated what had been previously said, that if defendant, intending to cheat and defraud, misrepresented or concealed a material fact, he was liable for the wrong. The request was erroneous. It sought to substi- tute for the fraudulent intent a fact which might or might not, in the minds of the jury, establish that intent. The defendant might have had reason to believe that there was less than one hundred and twenty-five acres of land, and yet not have believed it, but have honestly believed the reverse. The cases cited in support of the request to charge, when carefully read, are found to guard against any such misapprehension. (Meyer v. Amidon, 45 N. Y. 169 ; Wakeman v. Dalley, 51 Id. 27.) They treat the fact that one 'has reason to believe' his statement to be false merely as evidence tending to prove the fraudulent intent, and require that intent to be established. The court applied the needed correction to the request, and declined to make conclusive as matter of law what was properly but evidence upon the question of fact." — Finch, J., in Salisbury v. Howe, 87 N. Y. 128, 135. Ghap. IV. §3.] REALITY OF CONSENT: FRAUD. 303 d. The representation must be made with the intention that it should be acted upon by the injured party. STEVENS V. LUDLUM. 46 MINNESOTA, 160.— 1891. [Beported herein at p. 280.] HUNNEWELL v. DUXBUEY. 154 MASSACHUSETTS, 286.— 1891. Bakkee, J. The action is tort for deceit, in inducing the plaintiff to take, notes of a corporation by false and fraudulent representations, alleged to have been made to him by the defend- ants, that the capital stock of the corporation, amounting to $150,000, had been paid in, and that patents for electrical advertising devices, of the value of $149,650, had been trans- ferred to it. Erom the exceptions, it appears that the corporation was organized in January, 1885, under the laws of Maine, and engaged in business in Massachusetts ; that it filed with the commissioner of corporations a certificate containing the above statements, dated August 11, 1885, as required by the St. of 1884, c. 330, § 3, signed by the defendants, with a jurat stating that on that date they had severally made oath that the certificate was true, to the best of their knowledge and belief; that before the plaintiff took the notes the contents of this certificate had been communicated to him by an attorney whom he had employed to examine the records ; and that he relied upon its statements in accepting the notes. There was no other evidence of the making of the alleged representations. The main question, which is raised both by the demurrer to the second count of the declaration and by the exception, is whether the plaintiff can maintain an action of deceit for alleged mis- statements contained in the certificate. In the opinion of a majority of the court this question should have been decided adversely to the plaintiff. The execution by the defendants of 304 FORMATION OF CONTRACT. [Paet H. the certificate to enable the corporation to file it under the St. of 1884, c. 330, § 3, was too remote from any design to influence the action of the plaintiff to make it the foundation of an action of deceit. To sustain such an action, misrepresentations must either have been made to the plaintiff individually, or as one of the public, or as one of a class to whom they are in fact addressed, or have been intended to influence his conduct in the particular of which he complains. This certificate was not communicated by the defendants, or by the corporation, to the public or to the plaintiff. It was filed with a state ofiicial for the definite purpose of complying with a requirement imposed as a condition precedent to the right of the corporation to act in Massachusetts. Its design was not to pro- cure credit among merchants, but to secure the right to transact business in the State. The terms of the statute carry no implication of such a liability. Statutes requiring similar statements from domestic corporations have been in force here since 1829, and whenever it was intended to impose a liability for false statements contained in them there has been an express provision to that effect; and a requisite of the liability has uniformly been that the person to be held signed knowing the statement to be false. St. 1829, c. 53, § 9; Bev. Sts. c. 38, § 28; Gen.Sts. c. 60, § 30; St. 1870, c. 224, § 38, cl. 5; Pub. Sts. c. 106, § 60, cl. 5. To hold that the St. of 1884, c. 330, § 3, imposes upon those ofBcers of a foreign corporation who sign the certificate, which is a condition of its admission, the added liability of an action of deceit, is to read into the statute what it does not contain. If such an action lies, it might have been brought in many instances upon representations made in returns required of domestic corporations, and yet there is no instance of such an action in our reports. In Fogg v. Pew (10 Gray, 409) it is held that the misrepresentations must have been intended and allowed by those making them to operate on the mind of the party induced, and have been suffered to influence him. In Bradley v. Poole (98 Mass. 169) the representations proved and relied on were made personally by the defendant to the plaintiff, in the Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 305 course of tlie negotiation for the shares the price of which the plaintiff sought to recover. Felker v. Standard Yam Co. (148 Mass. 226) was an action under the Pub. Sts. c. 106, § 60, to enforce a liability explicitly declared by the statute. Nor do we find any English case which goes to the length necessary to sustain the plaintiff's action. The English cases fall under two heads: 1. Those of officers, members, or agents of corporations, who have issued a prospectus or report addressed to and circulated among shareholders or the public for the pur- pose of inducing them to take shares. 2. Those of persons who, to obtain the listing of stocks or securities upon the stock exchange in order that they may be more readily sold to the public, have made representations to the officials of the exchange, which in due course have been communicated to buyers. Bagshaw V. Seymour, 32 L. T. 81; Bedford v. Bagshaw, 4 H. & N. 638; Watson V. Earl of Charlemont, 12 Q. B. 866; Clarice v. Dickson, 6 C. B. (N. S.) 453; Jarrett v. Kennedy, 6 C. B. 319; Campbell v. Fleming, 1 A. & E. 40; Peek v. Berry, 37 Ch. D. 541, and 14 App. Cas. 337; Angus v. Clifford (1891), 2 Ch. 449. In these cases the representations were clearly addressed to the plaintiffs among others of the public or of a class, and were plainly intended and calculated to influence their action in the specific matter in which they claimed to have been injured. So, too, in the American cases relied on to support the action. Morgan v. Skiddy, 62 N. Y. 319; Terwilliger v. Cheat Western Telegraph Co., 59 111. 249; Paddock v. Fletcher, 42 Vt. 389. The numerous cases cited in the note to Pasley v. Freeman, in 2 Smith's Lead. Cas. (9th Am. ed.) 1320, are of the same character. In the case at bar, the certificate was made and filed for the definite purpose, not of influencing the public, but of obtaining from the State a specific right, which did not affect the validity of its contracts, but merely relieved its agents in Massachusetts of a penalty. It was not addressed to or intended for the public, and was known to the plaintiff only from the search of his attorney. It could not have been intended or designed by the defendants that the plaintiff should ascertain its contents and be induced by them to take the notes. It is not such a representa- tion, made by one to another with intent to deceive, as will sus- z 306 FOBMATION OF CONTRACT. [Part II. tain the action. Its statements are in no fair sense addressed to the person who searches for, discovers, and acts upon them, and cannot fairly be inferred or found to have been made with the intent to deceive him. This view of the law disposes of the case, and makes it unnec- essary to consider the other questions raised at the trial. Demurrer and exceptions sustained.' e. The representation must actually deceive. LEWIS V. JEWELL. 151 MASSACHUSETTS, 345. — 1890. Tort, by the administratrix of the estate of Edward Lewis, for false and fraudulent representations made by the defendant to the intestate in a sale of carpets represented to amount to 900 yards, which in fact amounted to only 595 yards. Exceptions Ify defendant to refusal of court to charge that if intestate had full means of ascertaining the number of yards and had an opportu- nity to inspect and measure them, the representations of defend- ant, though false and intentional, would not entitle plaintiff to recover, and to the charge of the court that if defendant made an intentional false representation to induce the intestate to pur- chase, and if the intestate, in the exercise of due care, relied on it, the jury would be justified in finding for the plaintiff. Verdict for the plaintiff. KJsrowLTOx, J. The carpets bought by the plaintiff's intestate covered four floors, consisting of twelve rooms, besides the hall and stairs, in a dwelling-house. The number of yards of material contained in them was an important element in determining their . value, which might be the subject of a fraudulent representation. The representation of the defendant was not a mere estimate, but a statement purporting to be made as of her own knowledge, and there was evidence tending to show that it was known by her to 1 See also Nash v. Minnesota dbc. Co., 169 Mass. 437 ; Eaton v. Avery, 83 N. Y. 31. Chap. IV. §3.] REALITY OF CONSENT: FRAUD. 307 be false. There was also evidence that the purchaser relied upon it'; and if the testimony introduced by the plaintifE was true, the defendant was liable for fraud, unless the purchaser was bound to measure the carpets for himself, or to avail himself of his other opportunities of ascertaining the quantity. Upon the evidence presented, it could not properly have been ruled, as matter of law, that the facts were so obvious or so easily discoverable that the plaintiff's intestate had no right to rely on the defendant's representations. In this commonwealth, and in other American States, in regard to representations by a vendor in a sale of land, it has been held that, in the absence of other fraud, a vendee to whom boundaries are pointed out has no right to rely on the vendor's statements as to quantity, but if he deems the quantity material, he should ascertain it for himself. Gordon v. Parmelee, 2 Allen, 212 ; Noble v. Googins, 99 Mass. 231, and cases cited; Parker v. Moulton, 114 Mass. 99. We are of opinion that this rule should not be extended so as to include a case like the present, and that the instructions under which the questions were submitted to the jury were correct and sufficient. Exceptions overruled.^ 1 "Where the means of knowledge are at hand and equally available to both parties, and the subject of purchase is alike open to their inspection, if the purchaser does not avail himself of these means and opportunities, he will not be heard to say that he has been deceived by the vendor's misrepre- sentations. If, having eyes, he will not see matters directly before them, where no concealment is made or attempted, he will not be entitled to favor- able consideration when he complains that he has suffered from his own voluntary blindness, and has been misled by overconfidence in the state- ments of another. And the same rule obtains when the complaining party does not rely upon the misrepresentations, but seeks from other quarters means of verification of the statements made, and acts upon the information thus obtained." — Mr. Justice Field, in Slaughter's Adm'r v. Gerson, 13 Wall. (U. S.) 379, 383. For an extreme application of the above rule, see Long v. Warren, 68 N. Y. 426, and see the criticisms on it in Albany City Savings Institution V. Burdick, 87 N. Y. 40, and Schumaker v. Mather, 133 N. Y. 590. See also Sheldon v. Davidson, 85 Wis. 138, ante, p. 295. 308 FORMATION OF CONTRACT. [Pabt U § 4. Duress. MOESE V. WOODWORTH. 155 MASSACHUSETTS, 233. — 1892. Action of contract to recover the amount of three promissory- notes given by defendant to plaintiff, and delivered up to defend- ant by plaintiff and mutual releases executed under threats of prosecution and arrest on a criminal charge of embezzling defendant's money. The court charged the jury in substance that to constitute duress by threats of imprisonment -the threats must be such as actually overcame the will of the plaintiff, and that in testing the question the jury might consider whether they were such as would overcome the will of a man of ordinary firmness; and refused to charge, at the request of defendant, that if the defend- ant believed plaintiff had wrongfully taken money belonging to defendant, and no civil or criminal proceeding had been begun, then mere threats of prosecution or arrest would not constitute duress, that mere threats of criminal prosecution or arrest, when no warrant has been issued or proceedings commenced, do not constitute duress. The court referred to the ambiguity in the word "mere," and reiterated its former charge. Defendant excepted. Verdict for plaintiff. KxowLTON, J. . . . The only remaining exceptions relate to the requests of the defendant and the rulings of the court in regard to duress. The plaintiff contended that he gave up the notes and signed the release under duress by threats of imprisonment. The question of law involved is whether one who believes and has reason to believe that another has committed a crime, and who, by threats of prosecution and imprisonment for the crime, overcomes the will of the other, and induces him to execute a contract which he would not have made voluntarily, can enforce the contract if the other attempts to avoid it on the ground of duress. Duress at the common law is of two kinds, duress by imprison- ment and duress by threats. Some of the definitions of duress Chap. IV. § 4.] REALITY OF CONSENT : DURESS. 309 per minas are not broad enough to include constraint by threats of imprisonment. But it is well settled that threats of unlawful imprisonment may be made the means of duress, as well as threats of grievous bodily harm. The rule as to duress per'minas has now a broader application than formerly. It is founded on the principle that a contract rests on the free and voluntary action of the minds of the parties meeting in an agreement which is to be binding upon them. If an influence is exerted oh one of them of such a kind as to overcome his will and compel a formal assent to an undertaking when he does not really agree to it, and so to make that appear to be his act which is not his but another's, imposed on him through fear which deprives him of self-control, there is no contract unless the other deals with him in good faith, in ignorance of the improper influence, and in the belief that he is acting voluntarily. To set aside a contract for duress it must be shown, first, that the will of one of the parties was overcome, and that he was thus subjected to the power of another, and that the means used to induce him to act were of such a kind as would overcome the mind and will of an ordinary person. It has often been held that threats of civil suits and of ordinary proceedings against property are not enough, because ordinary persons do not cease to act voluntarily on account of such threats. But threats of imprison- ment may be so violent and forceful as to have that effect. It must also be shown that the other party to the contract is not, through ignorance of the duress or for any other reason, in a position which entitles him to take advantage of a contract made under constraint without voluntary assent to it. If he knows that means have been used to overcome the will of him with whom he is dealing, so that he is to obtain a formal agreement which is not a real agreement, it is against equity and good conscience for him to become a party to the contract, and it is unlawful for him to attempt to gain a benefit from such an influence improperly exerted. A contract obtained by duress of unlawful imprisonment is voidable. And if the imprisonment is under legal process in regular form, it is nevertheless unlawful as against one who procured it improperly for the purpose of obtaining the execution 310 FOEMATION OF CONTKACT. [Part U. of a contract ; and a contract obtained by means of it is voidable for duress. So it has been said that imprisonment under a legal process issued for a just cause is duress that will -avoid a contract if such imprisonment is unlawfully used to obtain the contract. Richardson v. Duncan, 3 N. H. 508. See also Foshay v. Ferguson, 5 Hill (N. Y.), ISA; United States v. Huckabee, 16 Wall. 414, 431; Miller v. Miller, 68 Penn. St. 486; Walbridge v. Arnold, 21 Conn. 424; Wood v. Graves, 144 Mass. 365, and cases cited. It has sometimes been held that threats of imprisonment, to constitute duress, must be of unlawful imprisonment. But the question is, whether the threat is of imprisonment which will be unlawful in reference to the conduct of the threatener who is seeking to obtain a contract by his threat. Imprisonment that is suffered through the execution of a threat which was made for the purpose of forcing a guilty person to enter into a contract may be lawful as against the authorities and the public, but unlawful as against the threatener, when considered in reference to his effort to use for his private benefit processes provided for the protection of the public and the punishment of crime. One who has overcome the mind and will of another for his own advantage, under such circumstances, is guilty of a perversion and abuse of laws which were made for another purpose, and he is in no position to claim the advantage of a formal contract obtained in that way, on the ground that the rights of the parties are to be determined by their language and their overt acts, with- out reference to the influences which moved them. In such a case, there is no reason why one should be bound by a contract obtained by force, which in reality is not his, but another's. We are aware that there are cases which tend to support the contention of the defendant. Harmon v. Harmon, 61 Maine, 227; Bodine v. Morgan, 10 Stew. 426, 428; Landa v. Obert, 45 Texas, 539; Knapp v. Hyde, 60 Barb. 80. But we are of opinion that the view of the subject heretofore taken by this court, which we have followed in this .opinion, rests on sound principles, and is in conformity with most of the recent decisions in such cases, both in England and America. Hackett v. King, 6 Allen, 58; Taylor v. Jaques, 106 Mass. 291 ; Harris v. Carmody, 131 Mass. 51; Bryant v. Peck & Whipple Co., 154 Mass. 460; Williams v. Chap. IV. §5.] REALITY OF CONSENT: UNDUE INFLUENCE. 311 BayUy, L. E. 1 H. L. 200; S.G.,4. Giff.'638, 663, note; Eadie v. summon, 26 N. Y. 9; Adams v. Irving National Bank, 116 N. Y. 606; Foley v. Greene, 14 R. I. 618; Sharon v. Oager, 46 Conn. 189; Bane v. Detrick, 52 111. 19; Fay v. Oatley, 6 Wis. 42. We do not intimate that a note given in consideration of money embezzled from the payee can be avoided on the ground of duress, merely because the fear of arrest and imprisonment, if he failed to pay, was one of the inducements to the embezzler to make the ' note. But if the fact that he is liable to arrest and imprisonment is used as a threat to overcome his will and compel a settlement which he would not have made voluntarily, the case is different. The question in every such case is, whether his liability to imprisonment was used against him, by way of a threat, to force a settlement. If so, the use was improper and unlawful, and if the threats were such as would naturally overcome the mind and will of an ordinary man, and if they overcame his, he may avoid the settlement. The rulings and refusals to rule were correct. Exceptions overruled. § 5. Undue influence. HALL V. PEEKINS. 3 WENDELL (N. Y.), 626. — 1829. Bill in equity against defendants, as executors, for an account- ing. Decree for an accounting. Defendants appeal. Complainant when nine years old was apprenticed to his maternal grandfather, the testator, it being agreed that he should serve until he was twenty-one and should then receive the sum of $600. After he became twenty-one the testator deeded to him forty acres of land, the deed being executed on an election day in order to make complainant a voter. The deed recited the con- sideration of $500 and reserved a rent, but was never delivered. After the death of the testator, a settlement took place between defendant, G. H., an uncle of complainant, and the complainant, at which it was agreed that the land should be taken in payment of the $500 and a further sum of $39.58 should be paid com- 312 FORMATION OF CONTRACT. fPART II. plainant for services rendered after he arrived at age. In pursu- ance of this agreement defendants gave complainant a quit-claim deed of the land and the sum mentioned and complainant gave defendants a receipt in full of all claims against the estate. Savage, C. J. This is a short and simple case, addressing itself to the common sense and common justice of the plainest man, and seems to require no legal learning to decide it. The 'deed from the testator to the complainant when executed was a fraud upon the elective franchise ; it conveyed no estate, for it was never delivered by the grantor. It was not considered by him as a compensation for services, for he spoke of it as a gift, and at the same time admitted he owed the complainant $500. There can be no dispute that at the death of Eowland Hall the estate honestly owed Perkins $500. How has this acknowledged debt of $500 been paid? I answer by compelling or persuading this simple and ignorant young man to receive the forty acres of rocks in compensation for his services. The land is estimated by some of the witnesses at $4, and by others at $8 or $9; a fair medium is $6. We may therefore consider the land worth $6 per acre, amounting to $240, which these uncles gave their nephew instead of $500 and about two years' interest. It is said that inadequacy alone is no evidence of fraud. It has indeed been so decided; but inadequacy here does not stand alone. The contracting parties and their capacities should also be considered: on the one side, a simple, uneducated boy, who knew only how to work on a farm ; on the other, a man who had been a justice of the peace, and therefore may be presumed to have some knowledge of law. He was no longer a justice, but his practice was that of advocating causes before justices, and probably he was not unacquainted with the tricks and quibbles which too often disgrace inferior tribunals, and bring a reproach upon that branch of our jurisprudence. The inadequacy then consists, 1. In conveying 40 acres of mountain rocks, worth $240, in satisfaction of a debt of about $565, much less than half; 2. One of the contracting parties arrived at mature age, perfectly acquainted with the value of property, and from his very "voca- tion," in the habit of taking every advantage which the law would permit ; the other an ignorant, simple, unsuspecting boy, Chap. IV. §5.] REALITY OF CONSENT: UNDUE INFLUENCE. 313 unacquainted with property and with the arts and intrigues which too often attend more advanced age; 3. On the one side the uncle, and the other the nephew. The grandfather had hitherto been the guardian and guide of the complainant; and after his decease, to whom could this ignorant youth more naturally look for advice and protection than to his mother's brother, the executor of his grandfather's will, as one every way capable of advising him? The result, however, shows that there was some reason in the ancient law which refused to relations, who might inherit from minors, the guardianship of their persons, because it was, as Lord Coke says, " quasi agnum lupo committere ad devorandum." I have thus far cited no authority; it seems to me that none can be necessary beyond an appeal to the moral sense. It is contended by the appellants that there is not in the bill a suf&cient allegation of fraud to justify the admission of evi- dence on that subject, and if there be a suflcient allegation, there is no evidence of fraud. Ihe bill charges, that if the defendants should produce a receipt in full from the complainant, that such receipt was fraudulently and unjustly obtained. This is suffi- cient. The ground of the plaintiff's claim was matter of contract, and he resorted to a court of equity because the written contract signed by Eowland Hall was lost or destroyed ; the allegation of fraud was in anticipation of the defense contemplated, and it seems to me when thus set up, it need not be so full as if made the substantive ground of complaint. Had the plaintiff below been in possession of the written contract, he might have sued in a court of law, and the question of fraud might have been inquired into in rebutting the defense. Fraud is often the subject of inquiry in a court of law as well as in equity; there is this difference, however, that at law fraud must be proved; it must be what Lord Hardwicke calls dolus mcdus, actual fraud arising from facts and circumstances of imposition. At law, the contract of every man who is compos mentis, is binding and cannot be avoided in general without proof of actual fraud in obtaining it. Neither will a court of equity measure the extent of men's understandings and say there is an equitable incapacity where there is a legal capacity ; yet if a weak 314 FORMATION OF CONTRACT. [Part U. man gives a bond for a pretended consideration, when in truth, there was none or not near so much as is pretended, equity will relieve against it. 3 P. W. 130, 131. Fraud is sometimes also apparent from the intrinsic nature of the contract. It may be such as no man in his senses and not under delusion would make, and such as no honest and fair man would accept, which is Lord Hardwicke's second class of frauds ; and his third is that which may be presumed from the circumstances and condition of the parties contracting. 2 Vesey, Sen. 155, 156. This case partakes of both the two last classes of frauds, if not of the first. Here was a contract made which no sensible man not under delusion would make, on the one hand, and which no man who had not lost all consciousness of shame would accept, on the other. One of the parties was a weak boy, the other a man of capacity, who may be presumed, from the circumstances of this case, an artful intriguer in small matters. It was a contract made by an unsuspecting youth with a man in whom, from the connection existing between them, he must have reposed confi- dence, and to whom he naturally looked for advice and protection. It is clearly a case, therefore, where from the nature of the trans- action and the situation of the parties, fraud and imposition are tc be presumed. 4 Cowen, 220. I am of opinion the decree of his honor the chancellor should be affirmed with costs. Mr. Senator S. Allen also delivered an opinion in favor of an affirmance of the decree. And this being the unanimous opinion of the court, the decree of the chancellor was accordingly affirmed, with costs to be paid by the appellants.^ 1 See also Fish v. Cleland, 33 HI. 237, ante, p. 288 ; S. 0., 43 111. 282. The relation of an alleged spiritualistic medium to one relying on such medium for advice, and believing implicitly in the existence of the medium's pro- fessed power, is one of trust and confidence, and throvfs on the medium the burden of showing that a contract between the two is free from undue influence. Connor v. Stanley, 72 Cal. 656. Chap.V. §1.] LEGALITY OF OBJECT. 315 CHAPTER V. LEGALITY OF OBJECT. § 1. Natxire of illegality la contract. (i.) Contracts which are made in breach of statute, a. General rules of construction. PANGBOEN V. WESTLAKE. 36 IOWA, 546.— 1873. Action to foreclose a mortgage given by Westlake and wife to Pangborn, to secure the payment of a note. The defendant Westlake, by his answer, admitted the due execution of the note and mortgage, and that the same was exe- cuted to secure the purchase money of the real estate therein described; and also averred that the sale and conveyance of said real estate made by plaintiff to defendant was illegal and contrary to the statute ; that the lots sold were embraced in an addition to Maquoketa, which was laid out and platted prior to the sale, but was neither acknowledged or recorded, or filed for record previous to the sale as required by law. To this answer the plaintiff demurred, because the matters contained therein did not consti- tute any defense to the action. The demurrer was sustained by the court. The defendant appeals, and here assigns that ruling as error. Cole, J. The single question presented by the demurrer is, whether the contract for the sale of a lot in a town or city, or addition thereto, the plat of which has not been recorded, is void, so that no right of action can be based thereon. Our statute enacts {Rev. § 1027) : " That any person or persons who shall dispose of, or offer for sale or lease, for any time, any out or in lots, in any town, or addition to any 316 FORMATION OF CONTRACT. [Pabt II. town or city, or any part thereof, which has been or shall hereafter be laid out, until the plat thereof has been duly acknowledged and recorded, as provided for in chapter 41 of the Code of Iowa, shall forfeit and pay $50 for each and every lot or part of lot sold or disposed of, leased, or offered for sale." There is no doubt that the well-settled general rule is that when a statute prohibits or attaches a penalty to the doing of an act, the act is void and will not be enforced, nor will the law assist one to recover money or property which he has expended in the unlawful execution of it; or, in other words, a penalty implies a prohibition though there are no prohibitory words in the statute, and the prohibition makes the act illegal and void. Bartlett v. Vinor, Garth. 252; Lyon v. Strong, 6 Vt. 219; Bobeson v. French, 12 Mete. (Mass.) 24; Gregg v. Wyman, 4 Gush. 322; Pattee v. Oreely, 13 Mete. (Mass.) 284; Etna Ins. Co. v. Harvey, 11 Wis. 394; Miller v. Larson, 19 Id. 463; Pike v. King, 16 Iowa, 50, and cases cited; Cope v. Rowlands, 2 Mees. & Welsh. 149, and very numerous other cases there cited. But, notwith- standing this general rule, it must be apparent to every legal mind, that when a statute annexes a penalty for the doing of an act, it does not always imply such a prohibition as will render the act void. Suppose, for instance, the act itself expressly provided that the penalty annexed should not have the effect of rendering the act void. Surely in such case the courts would not give such force to the legal implication, under the general rule above quoted, as to override the express negation of it in the statute itself. Then, upon this conclusion, we are prepared for the next step, which is equally plain, that if it is manifest from the lan- guage of the statute, or from its subject matter and the plain intent of it, that the act was not to be made void, but only to punish the person doing it with the penalty prescribed, it is equally clear that the courts would readily construe the statute in accordance with its language and its plain intent. We are, therefore, brought to the true test, which is, that while, as a general rule, a penalty implies a prohibition, yet the courts will always look to the language of the statute, the subject matter of it, the wrong or evil which it seeks to remedy or prevent, and the purpose sought to be accomplished in its enactment; and if, from Chap. V. § 1.] LEGALITY OF OBJECT. 317 all these, it is manifest that it was not intended to imply a pro- hibition or to render the prohibited act void, the courts will so hold, and construe the statute accordingly. The following cases will abundantly vindicate as well as illustrate this statement of the law : Fergusson v. Norman, 5 Bingham's New Cases, 76 (opin- ion of Tindal, C. J., p. 83); S. C. in 35 E. C. L. Eep. 37 (i.e. 40); Harris v. Runnels, 12 How. (U. S.) 79; Johnson v. Hudson, 11 East, 180; Brown v. Duncan, 10 Barn. & Cress. 93; Hodgson v. Temple, 5 Taunt. 181; Fackler v. Ford et. al., 24 How. (U. S.) 322; The Oneida Bank v. The Ontario Bank, 21 N. Y. 490 (see opinion by Comstock, C. J., on p. 495). We are relieved from the necessity of making an analysis of and construing our statute as an original interpretation of it, because our statute above quoted, like our general municipal incorporations act, was taken from the Ohio statute, and is essen- tially the same as that. See Swan's Rev. Stat, of Ohio, Derby's edition, 1854, § 10, p. 940. Prior to our adoption of that statute, it had received a judicial construction by the Supreme Court of that State, and it was held that the penalty did not render the contract illegal, so as to prevent a recovery by the vendor of the consideration agreed to be paid by the vendee, for a lot sold him prior to the proper survey and making and recording of the plat. Strong &c. v. Darling, 9 Ohio, 201. And it is a well-settled rule that when the legislature of one State adopts a statute from another which has received judicial construction there, such con- struction will be presumed to have been known to and approved by the legislature, and will be followed by the courts of the State adopting the statute. See Bemis v. Becker, 1 Kan. 226 (i.e. 249), where the rule was applied to a statute like the one now in ques- tion. Under this rule we must hold that the note and mortgage in this case are not illegal and may, therefore, be enforced. There are two cases in Missouri, to which our attention has been called, construing a statute similar to ours: Downing v. Ringer, 7 Mo. 585, and Masoji v. Pitt, 21 Id. 391. In the former, and apparently without much investigation, it was held, under the general rule first above stated, that the penalty rendered the • contract illegal, and that the vendor of a lot in an unrecorded plat could not, under the Missouri statute, recover from the 318 FORMATION OF CONTRACT. [Part II. vendee the consideration agreed to be paid therefor. In the last case it was held, that the failure to record the plat prior to the conveyance, did not prevent the title from passing to the vendee. The Kansas court, in Bemis v. Becker, supra, followed the last, without referring to the former. But, further than this, the question has been, in effect, deter- mined by this court in Watrous & Snouffer v. Blair (32 Iowa, 58), where it was held, that the vendees of certain lots, having, as in this case, actual knowledge that at the time of their purchase the plat had not been recorded, were entitled to a specific perform- ance, by their vendor, of their contract of purchase. Surely, we could hardly be expected to compel a vendor to convey, and then to deny him the right to recover the consideration for such con- veyance. In that case we required the conveyance to the vendee ; in this, we enforce the payment by the vendee. Af&rmed.* b. Contracts in breach of Sunday statutes. HANDY V. ST. PAUL GLOBE PUBLISHING CO. 41 MINNESOTA, 188. — 1889. GiLFiLLAN, C. J. The action is upon a contract pleaded in the complaint, not in Jicec verba, but according to its supposed effect. The answer denied it; and, on the trial, the plaintiff offered in evidence a written contract between the parties, the provisions of which material to this controversy were as follows : The plaintiff, in consideration of being allowed the difference between the rates he might charge for advertising in the various issues of the St. Paul Globe newspaper and the rates thereinafter mentioned, agreed and contracted to take entire charge and con- trol of the real-estate advertising business in the daily and Sun- day and weekly Globe, and the defendant agreed, in consideration of such services, to put under his full charge and control all real- estate advertising business of defendant in the daily and Sunday and weekly Globe. The plaintiff agreed to pay the defendant, 1 See Miller v. Amtnon, 145 U. S. 421 ; Suit v. Buggies, 56 N. Y. 424. Chap. V. §1.] LEGALITY OF OBJECT. 319 certain specified rates for said real-estate advertising, and the defendant agreed to receive said rates as full payment for all said real-estate advertisements which, might appear io the daily, weekly, or Sunday Globe, without regard to the amount plaintiff might charge and receive from advertisers. The contract was to continue for the term of five years, with the option in plaintiff to renew it for another term of five years, or for a shorter time ; he to have the right to annul the agreement on giving thirty days' notice of his intention to do so. It was admitted by plaintiff, at the time of making the offer of this contract, that the Sunday Globe referred to in the contract was issued, published, and cir- culated on Sundays, though set up and printed on Saturdays. The contract was objected to as void upon its face for want of mutuality, and as being against public policy; and it appears to have been argued that it was against public policy because it was an agreement for a violation of the law in regard to Sunday. The court below sustained the objection. The plaintiff, of course, failed in his action, and he appeals from an order denying his motion for a new trial. The same objections are made to the contract here as were made below. The plaintiff contends that, not having pleaded the illegality of the contract, defendant could not assert it on the trial. It is sometimes necessary to plead the facts upon which the illegality of a contract or transaction depends, but it is never necessary to plead the law. When the facts appear, either upon the pleadings or proofs, either party may insist upon the law applicable to such facts. In this case the plaintiff had, under the pleadings, to prove the contract upon which he sued. If it be void on its face, he, not the defendant, showed its illegality. Though the contract appears in some respects a much more favorable one to the plaintiff than to the defendant, it is not wanting in mutuality of promises and engagements, so as to be without mutual considerations. What the plaintiff is to do appears by implication rather than by express terms. Fairly construed, the contract created the relation of principal and agent between the defendant, as principal, and the plaintiff, as agent, for the management of defendant's real-estate advertising busi- ness, — that is, in the charge of procuring advertisements for so 320 FORMATION OF CONTRACT. [Part II. much of the space in the defendant's paper as it devoted to real- estate advertising, — and in this business there would arise the duty in the contract. There was, by implication, the promise of plaintiff to manage the business faithfully, and with due regard to the interest of his principal. The question of the legality of the contract is, therefore, squarely presented; and with a view to that question, and to some propositions that are made in connection with it, it is necessary to say that the contract is entire, so that any taint of illegality in one part affects the whole of it. There is no way of severing it, so we can say that, although its stipulations as to the Sunday Globe may be in violation of law, and therefore void, yet those as to the daily and weekly Globe may be upheld, or so that, although for what was to be done under it prior to January 1, 1886, when the Penal Code went into effect, it was void, it might yet be upheld for all that it provided for after that, date. To attempt that would be to attempt making another con- tract for the parties, — one that the present contract furnishes no reason to suppose they would have made for themselves. All of the provisions of the contract must, therefore, stand or fall together. The plaintiff insists that the contract was not illegal, for it neither was executed on Sunday nor required plaintiff or defend- ant to do anything on Sunday. It bound defendant to maintain and issue a weekly, a daily, and Sunday Globe for the time specified in it, and it required plaintiff's services in the prepara- tion and procuring, so far as related to the real-estate advertise- ments, of material for each of those editions of the paper. According to the terms of the contract, the defendant was no more at liberty to discontinue its Sunday edition than to discontinue its daily or weekly edition, or all its editions. The theory of the complaint is that it was bound to continue them all; so that, if to issue, publish, and circulate a newspaper on Sunday was against the law as it existed when this contract was made, then the parties contemplated and stipulated for a violation of the law by each. The law in reference to Sunday, in force at the time when the contract was made, was section 20, c. 100, Oen. St. 1878, as follows : Chap. V. § 1.] LEGALITY OF OBJECT. 321 "No person shall keep open his shop, warehouse, or workhouse, or shall do any manner of labor, business, or work, except only works of necessity and charity, on the Lord's day, commonly called Sunday ; and every person so offending shall be punished by a fine," etc. A contract which requires or contemplates the doing of an act prohibited by law is absolutely void. No cases of the kind have been more frequently before the courts than contracts which were made on Sunday, or which required or provided that something prohibited by the statute should be done on Sunday; and in no instance has any court failed to declare such a contract void. Unless the issuing and circulating a newspaper on Sunday is, within the meaning of the statute, a work of necessity, it is pro- hibited by it as much as any other business or work. The news- paper is a necessity of modern life and business, but it does not follow that to issue and circulate it on Sunday is a necessity. There are a great many other kinds of business just as necessary j many, indeed most, kinds of manufactures and mercantile busi- ness are indispensable to the present needs of men, but no one would say that, because necessary generally, the prosecution of such business on Sunday is a work of necessity. That carrying on any business on Sunday may be profitable to the persons engaged in it; that it may serve the convenience or the tastes or wishes of the public generally, — is not the test the statute applies. To. continue on that day the sale of dry goods or groceries, or the keeping open of markets, saloons, theaters, or places of amusement, might be regarded by many as convenient and desirable, but that would not bring such business within the exception in the statute. At the time this contract was made, the issuing, publishing, and circulating a newspaper on Sunday was contrary to law ; and as the contract provided for that, and as it was indivisible, it was thereby rendered wholly void. The Penal Code went into effect January 1, 1886. Section 229 provides that certain kinds of articles, among them newspapers, may be .sold in a quiet and orderly manner on Sunday. Plaintiff contends that the recogni- tion of this contract, and the continuance of business under it for more than a year after the issuance of the Sunday paper became legal by the provisions of the Penal Code, constituted such a ratifi- 322 FORMATION OF CONTKACT. [Paet II. cation of the contract as relieved it of any original taint of illegality. There is a difference in the decisions on the question whether a contract, void merely because it was made on Sunday, may be ratified on a secular day, so as to become valid ; but there is no conflict of decisions on the proposition that a contract, void because it stipulates for doing what the law prohibits, is incapable of being ratified. That is this case. The contract contemplated the doing what the law then in force prohibited, and for that reason it was void. It is true, the law was so changed after the contract was made, that, from the time of the change, it became, as plaintiff claims, lawful to do those things provided in the contract which were unlawful at the time it was made, and so that, as he claims, a contract like this, made after the change went into effect, would have been valid. But that could not affect the validity of the previous contract, which was void from the beginning. The parties might have made a new contract to com- mence on or after January 1, 1886 ; but, because of the illegality in it, they could not at any time ratify this contract from the beginning; and, because it is entire and indivisible, they could do nothing amounting to less than the making of a new contract, which could give vitality to it for the time since January 1, 1886. An entire contract must be ratified, if at all, as an entirety. Order affirmed. EEYNOLDS v. STEVENSOlSr. i INDIANA, 619.— 1853. Davison, J. Debt by the plaintiff in error against the defend- ant on a promissory note. The note is dated the 1st of April, 1850. The defendant pleaded two pleas. 1. Nil debet. 2. That the said note was not made and executed on the day the same bears date ; but it was made, executed, and delivered on the 31st of March, 1850, which last-mentioned day was the first day of the week, commonly called Sunday; wherefore the said note was void. Demurrer to the second plea overruled. A statute in force when this note was given provides that " if any person, etc., shall be found on the first day of the week, Chap. V. § 1.] LEGALITY OF OBJECT. 323 commonly called Sunday, rioting, etc., or at common labor, works of charity and necessity only excepted, such, person shall be fined," etc. There is a proviso to the statute, but it has no bearing in this case. B. S. 1843, c. 63, s. 123. It is admitted that the note in question was made on Sunday. Then the record presents this question: Did the making of it constitute an act of "common labor"? We think the statute intended to prohibit every description of secular business not within the exceptions pointed out by itself. The executing of this note was secular business, and not embraced by the excep- tions. This view is sustained by various adjudications made upon statutes the provisions of which are, in effect, the same as ours. Allen v. Deming, 14 N. H. 133; Towle v. Larrabee, 26 Me. 464; Adams Y. Hamell, 2 Dong. (Mich.) 73. la. Link r. Clemmens (7 Blackf. 479) it was held "that a replevin bond executed on Sunday was void." This authority is decisive of the case before us. The note, no doubt, was made in violation of the statute. Therefore it must be considered a nullity. Per Curiam. The judgment is af&rmed with costs.* 1 Accord : Finn v. Donahue, 35 Conn. 216 ; dough v. Goggins, 40 la. 325 ; Oranson v. Goss, 107 Mass. 439 ; Searles v. Beed, 63 Mich. 485 ; Costello v. Ten Eych, 86 Mioh." 348 ; Durant v. Shener, 26 Minn. 362 ; Troewert v. Decker, 51 Wis. 46. But signing a subscription to liquidate the debt of a church is within the exception of " works of necessity or charity." Bryan v. Watson, 127 Ind. 42. Contra: "A contract made on Sunday is not void, and to invalidate a transaction under the statute the contract must necessarily require the act to be performed on Sunday. Boynton v. Page, 13 Wend. 425 ; Watts v. Van JVess, 1 Hill, 76." — Wright, J., in Merritt v. Earle, 29 N. Y. 117. See also Mberle v. Mehrbach, 55 N. Y. 682; Moore v. Murdoch, 26 Cal. 514; Bloom V. Bichards, 2 Ohio St. 387 ; Bichmond v. Moore, 107 111. 429, where the subject is fully discussed. Tor distinction sometimes taken between contracts made in the course of "ordinary calling," and those outside that calling, see Allen v. Gardiner, 7 R. I. 22 ; Hellams v. Ahererombie, 15 S. C. 110. See also Siaann v. Swann, 21 Fed. Rep. 299. On ratification, see Adams v. Gay, 19 Vt. 358 ; Day v. McAllister, 15 Gray (Mass.), 433. 324 FORMATION OF CONTRACT. IPatc II. c. Wagers. LOVE V. HAEVEY. 114 MASSACHUSETTS, 80. — 1873. Contract. The plaintiff and the defendant made a bet as to the place of burial in Holyhood Cemetery of the body of one Dr. Cahill, the plaintiff betting that it was buried on the left-hand side of the main avenue, and the defendant betting that it was buried on the right-hand side of that avenue. The money was deposited, twenty dollars by each party, in the hands of one James Stack as stakeholder. It was determined that the body was buried on the left-hand side of the avenue, yet the stake- holder delivered to the defendant the plaintiff's twenty dollars, and the defendant, though requested, refused to repay the same to the plaintiff. The declaration contained another count for money had and received by the defendant to the plaintiff's use. The answer was a general denial. The presiding judge ruled and instructed the jury that courts did not sit to decide wagers ; that it did not matter whether the plaintiff was right or not, regarding the situation of the burial- place in question, or whether the defendant received from the stakeholder the same money that was deposited with him by the plaintiff, if the money was paid and received as money of the plaintiff; that if, before the money was paid over to the defendant, the plaintiff forbade payment thereof in the defend- ant's presence, then the defendant received it without considera- tion and wrongfully, and was liable in the action for money had and received. Gray, C. J. In England and in New York, actions on wagers upon questions in which the parties had no previous interest were frequently sustained, until the legislature interposed and declared all wagers to be void. 1 Ohit. Con. (11th Am. ed.) 735-738; 3 Kent. Com. 277, 278. In Scotland, the courts refused to entertain such actions. Bruce v. Boss, 3 Paton, 107, 112; S. 0. cited 3 T. E. 697, 705. In Massachusetts, the English law on this subject has never been adopted, used, or approved, and, although the question has Chap. V. § 1.] LEGALITY OF OBJECT. 325 not been directly adjudged, it has long been understood that all wagers are unlawful. Const. Mass. c. 6, art. 6; AmoryY. Qilman, 2 Mass. 1, 6; Ball v. Gilbert, 12 Met. 397, 399; Sampson v. Shaw, 101 Mass. 145, 150; Met. Con. 239. There are decisions or opinions to the same effect in each of the New England States. Lewis V. Littlefield, 15 Maine, 233; Perkins v. Eaton, 3 N. H. 152; Hoit y. Hodge, 6 E". H. 104; Collamer v. Day, 2 Vt. 144; West V. Holmes, 26 Vt. 530; Stoddard v. Martin, 1 E. I. 1, 2; Wlieeler v. Spencer, 15 Conn. 28, 30. See also Edgell v. M'Laugh- lin, 6 Whart. 176; Bice v. Gist, 1 Strob. 82. It is inconsistent alike with the policy of our laws, and with the performance of the duties for which courts of justice are established, that judges and juries should be occupied in answer- ing every frivolous question upon which idle or foolish persons may choose to lay a wager. The ruling at the trial was therefore correct, and the defendant, having received the money from the stakeholder after notice from the plaintiff not to pay it over, was liable to the plaintiff under the count for money had and received. McKee v. Manice, y Cush. 357. Exceptions overruled.^ d. Wagers on rise and fall of prices. MOHE V. MIESEN. 47 MINNESOTA, 228. — 1891. Appeal by defendant from an order of the District Court for Eamsey County, refusing a new trial after a verdict of $2006.78 for plaintiffs. The jury found specially that " the arrangement between plaintiffs and defendant with reference to the transaction in controversy contemplated the purchase and sale of actual grain for future delivery, and did not contemplate the making of gambling contracts only," and also that "the contracts in evi- dence were made by and between the plaintiffs and other members of the chamber of commerce, for the purchase and sale of grain actually to be delivered by warehouse receipts, if either party to 1 See also Bernard v. Taylor, 23 Ore. 416, post, p. 407. 326 FORMATION OF CONTRACT. [Past U. them should require it, and that said contracts were not simply gambling contracts." Vandeebukgh, J. The plaintiffs sue defendant for money ' paid and expended for his use in the purchase and sale of grain. The answer sets up that the purchases and sales referred to were not actual or veritable purchases and sales of grain, but were merely colorable, and " were gambling transactions, whereby the plaintiffs in form undertook to buy and sell on the Chicago or Milwaukee boards of trade, ostensibly for future deliveries, but without any intention or expectation on the part of the plaintiffs or defendant that the same would be actually delivered, large quantities of wheat and barley, with the expectation and in- tention on the part of both plaintiffs and defendant of wagering on the market prices, and that the amounts which defendant would win or lose would be governed by and determined upon the fluctuations in the quotations of the boards of trade." The record shows that the plaintiffs were members of the Milwaukee cham- ber of commerce, and were brokers negotiating purchases and saies of grain, and accustomed to buy upon margins under the rules of the chamber, and to make advances for customers, and to charge commissions for their services. The defendant during the time of the transactions in controversy was a dealer in wines and liquors in the city of St. Paul. These transactions opened by the receipt by plaintiffs of a telegraphic dispatch from the defendant on November 11, 1886, directing them to "sell ten thousand bushels May wheat." On the following day they accordingly executed the order. February 10th defendant directed the plain- tiffs to buy ten thousand bushels May wheat, which order was in like manner executed the same day. This closed the transaction, so far as the defendant was concerned. The two contracts were adjusted on the basis of the difference in prices at the dates speci- fied, and a statement showing the difference sent to defendant; that is to say, the two contracts were adjusted on the basis of such difference in prices, without waiting for their literal fulfil- ment, and without any actual delivery of wheat. A large num- ber of other similar purchases and sales of wheat and barley, amounting to hundreds of thousands of bushels, were made by plaintiffs for defendant, and disposed of in like manner, during Chap. V. § 1.] LEGALITY OF OBJECT. 327 the year 1887. Some of tlie " deals " were closed with a profit, others with a loss, to defendant, which was charged up to him by the plaintiffs. During this time the defendant paid out no money for grain whatever, but at plaintiffs' instance, to cover margins for which advances had been made by them on a falling market, he had paid them, between the 10th day of November, 1886, and the 1st day of January, 1888, the sum of $2462.50, leaving due them, as they claim, the amount demanded in this action. The last transactions, as per statement sent to defendant by plaintiffs, were the reported sale of 10,000 bushels February barley, Decem- ber 30, 1887, and the purchase of 10,000 bushels February barley, January 3, 1888, difference (loss) reported January 4, 1888, at $276. Contracts for the purchase or sale of grain or other commodities to be delivered at a future time are not per se unlawful, if the parties intend in good faith to perform them by the actual delivery of the property according to their terms. ISTor are bona fide con- tracts for the future delivery of goods invalid because at the time of the sale the vendor has not the actual or potential possession of the goods which he has agreed to sell. He may afterwards go into the market and procure the goods which he has agreed to furnish his vendee. Business may be successfully and lawfully conducted in that way ; and, where such contracts are intended in good faith to represent actual transactions, they are not unlawful. The law places no unreasonable limitations upon commercial dealings ; and it is no legal ground of objection that Ifona fide contracts for future delivery are entered into for the purpose of making a speculation through an anticipated rise in the price of commodities. But contracts in form for the future delivery of goods not intended to represent actual transactions, — that is, the actual delivery and receipt of the goods, — but merely to pay and receive the difference between the agreed price and the market price at a future day, and upon the risk of the rise or fall in prices, are generally held to be in the nature of wagers on the future price of the commodity, and void by statute or as against public policy. The party dealing in futures in substance bets that the price of a commodity at a future day will be a certain sum more or less than the market prices, which involve elements 328 FORMATION OF CONTRACT. [Part U. of risk and uncertainty ; and the " stake " is the amount of the " margin " required to cover differences in values, and according to the price of the commodity on a future day the parties to the contract must respectively gain or lose. 22 Am. Law Reg. €13, note. In Rumsey v. Berry (65 Me. 670) the accepted doctrine is stated as follows : " A contract for the sale and purchase of wheat to be delivered in good faith at a future time is one thing, and is not inconsistent with the law; but such a contract entered into without an intention of having any wheat pass from one party to the other, but with an understanding that at the appointed time the purchaser is merely to receive or pay the differ- ence between the contract and the market price, is another thing, and such as the law will not sustain. This is what is called a settling of the differences, and as such is clearly and only a betting upon the price of wheat, against public policy, and not only void, but deserving of the severest censure.'' " The bargain represents not a transfer of property, but a mere stake or wager upon its future price. The difference requires the ownership of only a few hundreds or thousands of dollars, while the capital to complete an actual purchase or sale may be hundreds of thousands or millions. Hence ventures upon prices invite men of small means to enter into transactions far beyond their capital, which they do not intend to fulfil, and thus the apparent business in the particular trade is inflated and unreal, and, like a bubble, needs only to be pricked to disappear, often carrying down the bona fide dealer in its collapse. . . . Such transac- tions are destructive of good morals and fair dealing and of the best interests of the community." Kirkpatrick v. Bonsall, 72 Pa. St. 155. It becomes material, therefore, to inquire into the intention of the parties in entering into contracts purporting to be for the future delivery of commodities, and the plaintiffs must be shown to be in pari delicto to defeat a recovery in this action. The language or form of the contract is not conclusive. The real nature of the transaction and the understanding and purpose of the parties may be shown, notwithstanding the contract is fair on its face. Indeed, in view of the extent to which stock and grain gambling is carried on at the exchanges in the commercial centers of the country, — a fact of which the courts are bound to take notice, — time contracts of the character under consideration will be very carefully scrutinized by the courts, and they will go Chap. V. § 1.] LEGALITY OF OBJECT. ■ 329 behind and outside the language of the contract, and look into the facts and circumstances surrounding and connected -with it, in order to determine its real character, as in the case of contracts claimed to be void for usury or fraud. In Barnard v. Backhaus, (62 Wis. 593, 600) the court, speaking of contracts for future delivery, went so far as to say that " to justify a court in uphold- ing such an agreement it is not too much to require a party claiming rights under it to make it satisfactorily and afB.rmatively appear that the contract was made with an actual view to the delivery and receipt of grain, not as an evasion of the statute against gaming, or as a cover for a gambling transaction." The effect of this would be to shift the burden of proof in such cases. The courts of some of the other States have been constrained to adopt the same rule, but upon principle the proposition can hardly be sustained; and the general rule is that the burden of establish- ing the illegality rests upon the party who asserts it, and such is the great weight of authority in these as well as other cases. It is for the legislature to change the rule in this class of cases, if in its wisdom and for reasons of public policy it shall be deemed necessary for the public welfare. Crawford v. Spencer, 92 Mo. 498, and cases. The testimony of the defendant, which is undisputed, shows or tends to show that he did not intend to make actual bona fide purchases and sales of grain, but intended to " deal in futures " solely, and the nia,nner in which the business was conducted and the several " deals " closed and adjusted by the plaintiffs is con- sistent with this theory, and tends to support it; and, while this circumstance might not alone be sufficient to establish the fact that plaintiffs, or the third parties with whom they dealt in executing the orders of the defendant, had notice that defendant's object was not to buy and sell grain, but to speculate in the price of grain merely, yet the manner in which the business involving these transactions was conducted was certainly an element to be considered with other circumstances in determining the question of their good faith. Hill v. Johnson, 38 Mo. Appi 383 ; Crawford V. Spencer, 92 Mo. 498. It is not necessary to prove that plain- tiffs had express notice of defendant's purpose. The understand- ing between the parties may be gathered from the facts and 330 FORMATION OF CONTRACT. [Pakt II. attending circumstances. This is well settled, and upon this point evidence of the defendant's occupation, residence, financial ability; that he never delivered or received or proposed to deliver or receive any grain ; that he was not a dealer ; and that the orders to purchase were made without reference to or far in excess of his ability to pay for, with other facts of like character, was competent. Cobb v. Prell, 5 McCrary, 85 ; Carroll v. Holmes, 24 111. App. 453, 458, 459; In re Green, 7 Biss. 338, 344; Craw- ford V. Spencer, supra; Lowry v. Dillman, 59 Wis. 197; Sprague V. Warren (Keb.), 41 N. W. Eep. 1115; Watte v. Wickersham, 27 Neb. 457; Williams r. Tiedemann, 6 Mo. App. 269, 276; Hill v. Johnson, 38 Mo. App. 383, 392. The plaintiffs concede that it was apparent from his correspondence that the defendant's trans- actions were mostly for speculative purposes. They knew he was in the saloon business, and not in the grain business. The jury might find from the facts disclosed by the evidence that the plaintiffs knew that he had not the means to buy grain with, and did not desire or need it, but was operating for the differ- ences only. The statutes of Wisconsin, where the business was done, were not introduced in evidence. The rights of the parties will there- fore be determined by the rules of the common law, as generally accepted and applied in this country. Harvey v. Merrill, 150 Mass. 1. And it is generally held as the common-law doctrine that all wagering contracts are illegal and void as against public policy. Jrwin v. Williar, 110 U. S. 499, 510; Harvey v. Merrill, supra. No cause of action arises in favor of a party to an illegal transaction; nor will the law lend its aid to enforce any contract which is in conflict with the terms of a statute, or sound public policy or good morals. In re Green, 7 Biss. 338; Armstrong v. Toler, 11 Wheat. 258; BucJcman v. Bryan, 3 Denio, 340. And there is no reason why a broker or commission merchant should be favored or exempted from consequences resulting to other parties who aid or assist in unlawful transactions. Barnard v. Backhaus, supra. It was through the agency of the plaintiffs that the defendant was attempting to carry on an unlawful busi- ness. They executed his orders, advanced money for margins, and settled the differences. The contracts were all made in their Chap. V. § ].] LEGALITY OF OBJECT. 331 names, and he was not known in the transactions with third parties, and they were personally responsible to the persons with whom they dealt in making the purchases and sales in question. Under such circumstances it would, of course, be difficult to ascer- tain whether the latter had notice of the nature of the agreement or understanding existing between the parties to this action ; but it was clearly important and material to show that the plaintiffs were cognizant of defendant's illegal purposes, and were engaged in promoting them; and, if they were, the court will not aid them to recover moneys advanced in furtherance of such schemes. The plaintiffs, as brokers or commission merchants, might well decline to aid in transactions of that character ; and, if they would do so, a great deal of that kind of gambling would cease; as, in the majority of cases, the ventures could not be made without their financial assistance. As between them and their customers, the same strict rule should be applied as in other cases. Carroll V. Holmes, 24 111. App. 453, 460; Hill v. Johnson, 38 Mo. App. 383; Tied. Sales, p. 490, § 302. The plaintiffs' counsel, however, concedes in his brief in this court that if, by the arrangement between the parties to this suit, they were to undertake gambling transactions, then the intent of third parties was not material. But the defendant's counsel insists that the charge of the court on this subject, including the instructions asked by plaintiffs, would warrant the jury to infer that it was necessary for the defendant to make it appear that the parties with whom plaintiffs dealt were also in pari delicto. Upon this point the charge, taken as a whole, is perhaps not entirely clear, but we think if there was any ambiguity or uncer- tainty in the charge on the question the defendant should have asked more specific instructions. It is also assigned as error that the court erred in refusing defendant's second request to charge, which was in substance that, in order to prove notice or knowledge on the part of the plaintiffs of the designs and intentions of the defendant, it is not necessary that defendant should have written or said to any of the plaintiffs that such was his design ; but the jury were to deter- mine the understanding of the parties from all the circumstances connected with the transactions between them, and that upon this 332 FOEMA.TION OF CONTRACT. [Part II. question they were " entitled to consider the fact that at the time the plaintiffs sold the barley for the defendant in October, November, and December, 1887, one of the plaintiffs stated that he had no reason to believe that the defendant had the barley at the time of such sales ; and the further fact that during a part, at least, of the time of such transactions, the defendant was behind with his margin, and was being pressed by plaintiffs for money to make the margins good ; and that plaintiffs immediately after closed these deals, as well as all prior deals, considered the transaction at an end so far as defendant was concerned, and, instead of charging him with the purchase of any wheat, sent him statements charging him with, or crediting him with, as the case might be, the difference between the purchase and the selling price." These instructions were not covered by the general charge, and we think should have been given. Some of the evi- dence was perhaps of slight importance, but we think, with other facts and circumstances in the case, it was all proper to be con- sidered by the jury in determining the knowledge of the plaintiffs and the real nature of the arrangement between the parties ; and without such instructions the jury were in danger of being led to believe, as the court subsequently stated, that there must be an express agreement, and that a mere understanding between the parties was not sufficient. We think evidence of the general character of transactions in the chamber between other dealers was properly rejected; but for the error above referred to there should be a new trial. Order reversed. HAEVEY V. MEKRILL. 160 MASSACHUSETTS, 1. — 1889. [Beported herein at p. 833.] Chap. V. § 1.] LEGALITY OF OBJECT. 333 e. Wagering policies. WAENOCK V. DAVIS. 104 U^nTED STATES, 775. — 1881. Action to recover a balance on a life insurance policy issued to plaintiff's intestate and by him assigned to defendants to whom the policy was paid. Judgment for defendants. Plaintiff brings error. The intestate entered into an agreement with defendants that he would take out a policy for $5000 and assign nine-tenths of the same to defendants, one-tenth to be payable to his wife ; that he would pay defendants $6 in hand and annual dues amounting to $2.50. They on their part agreed to keep up the annual premiums on the policy, and on the death of intestate collect and pay over to his widow one-tenth of the policy. In pursuance of this agreement a policy was taken out by the intestate and assigned to defendants on the terms stipulated. On the death of intestate the defendants collected the policy and paid over to the widow one-tenth of the amount, less certain sums due under the agreement. Plaintiff, as administrator, brings an action for the balance of the money collected under the policy. Mk. Justice Field. As seen from the statement of the case, the evidence before the court was not conflicting, and it was only necessary to meet the general allegations of the first defense. All the facts established by it are admitted in the other defenses. The court could not have ruled in favor of the defendants without holding that the agreement between the deceased and the Scioto Trust Association was valid, and that the assignment transferred to it the right to nine-tenths of the money collected on the policy. For alleged error in these particulars the plaintiff asks a reversal of the judgment. The policy executed on the life of the deceased was a valid contract, and as such was assignable by the assured to the associa- tion as security for any sums lent to him, or advanced for the premiums and assessments upon it. But it was not assignable to the association for any other purpose. The association had no insurable interest in the life of the deceased, and could not have 334 FORMATION OF CONTRACT. [Pabt IL taken out a policy in its own name. Such a policy would con- stitute what is termed a wager policy, or a mere speculative contract upon the life of the assured, with a direct interest in its early termination. It is not easy to define with precision what will in all cases constitute an insurable interest, so as to take the contract out of the class of wager policies. It may be stated generally, however, to be such an interest, arising from the relations of the party obtaining the insurance, either as creditor of or surety for the assured, or from the ties of blood or marriage to him, as will justify a reasonable expectation of advantage or benefit from the continuance of his life. It is not necessary that the expectation of advantage or benefit should be always capable of pecuniary estimation; for a parent has an insurable interest in the life of his child, and a child in the life of his parent, a husband in the life of his wife, and a wife in the life of her husband. The natural affection in cases of this kind is considered as more powerful — as operating more efficaciously — to protect the life of the insured than any other consideration. But in all cases there must be a reasonable ground, founded upon the relations of the parties to each other, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured. Otherwise the contract is a mere wager, by which the party taking the policy is directly interested in the early death of the assured. Such policies have a tendency to create a desire for the event. They are, therefore, independently of any statute on the subject, condemned, as being against public policy. The assignment of a policy to a party not having an insurable interest is as objectionable as the taking out of a policy in his name. Nor is its character changed because it is for a portion merely of the insurance money. To the extent in which the assignee stipulates for the proceeds of the policy beyond the sums advanced by him, he stands in the position of one holding a wager policy. The law might be readily evaded, if the policy, or an interest in it, could, in consideration of paying the premiums and assessments upon it, and the promise to pay upon the death of the assured a portion of its proceeds to his representatives, be Chap. V. § 1.] LEGALITY OF OBJECT. 335 transferred so as to entitle the assignee to retain the whole insurance money. The question here presented has aiisen, under somewhat dif- ferent circumstances, in several of the state courts ; and there is a conflict in their decisions. In Franklin Life Insurance Com- pany V. Hazzard, which arose in Indiana, the policy of insurance, which was for $3000, contained the usual provision that if the premiums were not paid at the times specified the policy would be forfeited. The second premium was not paid, and the assured, declaring that he had concluded not to keep up the policy, sold it for twenty dollars to one having no insurable interest, who took an assignment of it with the consent of the secretary of the insur- ance company. The assignee subsequently settled with the company for the unpaid premium. In a suit upon the policy, the Supreme Court of the State held that the assignment was void, stating that all the objections against the issuing of a policy to one upon the life of another, in whose life he has no insurable interest, exist against holding such a policy by mere purchase and assignment. " In either case, " said the court, " the holder of such policy is interested in the death rather than the life of the party assured. The law ought to be, and we think it clearly is, opposed to such speculations in human life." 41 Ind. 116. The court referred with approval to a decision of the same purport by the Supreme Court of Massachusetts, in Stevens v. Warren, 101 Mass. 564. There the question presented was whether the assignment of a policy by the assured in his lifetime, without the assent of the insurance company, conveyed any right in law or equity to the proceeds when due. The court was unanimously of opinion that it did not; holding that it was contrary not only to the terms of the contract, but contrary to the general policy of the law respecting insurance, in that it might lead to gambling or speculative contracts upon the chances of human life. The court also referred to provisions sometimes inserted in a policy expressing that it is for the benefit of another, or is payable to another than the representatives of the assured, and, after remark- ing that the contract in such a case might be sustained, said, " that the same would probably be held in the case of an assign- ment with the assent of the assurers. But if the assignee has no 336 FORMATION OF CONTRACT. [Pakt U. interest in the life of the subject which would sustain a policy to himself, the assignment would take effect only as a designation, by mutual agreement of the parties, of the person who should be entitled to receive the proceeds when due, instead of the personal representatives of the deceased. And if it should appear that the arrangement was a cover for a speculating risk, contravening the general policy of the law, it would not be sustained." Although the agreement between the Trust Association and the assured was iavalid as far as it provided for an absolute transfer of nine-tenths of the proceeds of the policy upon the conditions named, it was not of that fraudulent kind with respect to which the courts regard the parties as alike culpable and refuse to interfere with the results of their action. No fraud or decep- tion upon any one was designed by the agreement, nor did its execution involve any moral turpitude. It is one which must be treated as creating no legal right to the proceeds of the policy beyond the sums advanced upon its security ; and the courts will, therefore, hold the recipient of the moneys beyond those sums to account to the representatives of the deceased. It was lawful for the association to advance to the assured the sums payable to the insurance company on the policy as they became due. It was, also, lawful for the assured to assign the policy as security for their payment. The assignment was only invalid as a transfer of the proceeds of the policy beyond what was required to refund those sums, with interest. To hold it valid for the whole pro- ceeds would be to sanction speculative risks on human life, and encourage the evils for which wager policies are condemned. The decisions of the New York Court of Appeals are, we are aware, opposed to this view. They hold that a valid policy of insurance effected by a person upon his own life, is assignable like an ordinary chose in action, and that the assignee is entitled, upon the death of the assured, to the full sum, payable without regard to the consideration given by him for the assignment, or to his possession of any insurable interest in the life of the assured. St. John v. American Mutual Life Insurance Company, 13 N. Y. 31 ; Valton v. National Fund Life Assurance Company, 20 Id. 32. In the opinion in the first case the court cite Ashley V. Ashley (3 Simons, 149) in support of its conclusions ; and it Chap. V. § 1.] LEGALITY OF OBJECT. 337 must be admitted that they are sustained by many other adjudi- cations. But if there be any sound reason for holding a policy invalid when taken out by a party who has no interest in the life of the assured, it is dif&cult to see why that reason is not as cogent and operative against a party taking an assignment of a policy upon the life of a person in which he has no interest. The same ground which invalidates the one should invalidate the other; — BO far, at least, as to restrict the right of the assignee to the sums actually advanced by him. In the conflict of decis- ions on this subject we are free to follow those which seem more fully in accord with the general policy of the law against specula- tive contracts upon human life. In this conclusion we are supported by the decision in Cam- moQk V. Lewis, 15 Wall. 643. There a policy of life insurance for $3000, procured by a debtor at the suggestion of a creditor to whom he owed $70, was assigned to the latter to secure the debt, upon his promise to pay the premiums, and, in case of the death of the assured, one-third of the proceeds to his widow. On the death of the assured, the assignee collected the money from the insurance company and paid to the widow $950 as her pro- portion after deducting certain payments made. The widow, as administratrix of the deceased's estate, subsequently sued for the balance of the money collected, and recovered judgment. The case being brought to this court, it was held that the transaction, so far as the creditor was concerned, for the excess beyond the debt owing to him, was a wagering policy, and that the creditor, in equity and good conscience, should hold it only as security for what the debtor owed him when it was assigned, and for such advances as he might have afterwards made on account of it; and that the assignment was valid only to that extent. This decision is in harmony with the views expressed in this opinion. The judgment of the court below will, therefore, be reversed, and the cause remanded with direction to enter a judgment for the plaintiff for the amount collected from the insurance company, with interest, after deducting the sum already paid to the widow, and the several sums advanced by the defendants ; and it is So ordered.^ 1 Contra : Clark v. Allen, 11 R. L 439. 338 FORMATION OF CONTRACT. [Part II. (w.) Contracts illegal at common law. a. Agreements to commit an indictable offense or civil wrong, MATEENE v. HOEWITZ. 101 NEW YORK, 469.— 1886. Action for damages for refusal to accept goods tendered under contract of sale. Complaint dismissed. Plaintiff appeals from judgment of the General Term of New York City Superior Court afBrming judgment. (Eeported 18 J. & S. 41, where the facts appear.) Plaintiffs sold defendants 400 cases of "domestic sardines," the boxes to have " fancy labels " on them. Domestic sardines were fish packed in Maine, and fancy labels were decorated labels containing a statement in substance that the sardines were packed in France in olive oil by persons named on the label. Imported sardines were worth about 50 per cent more than domestic. The goods tendered had on them labels as described. Plaintiffs and defendants were wholesale dealers. Miller, J. It must be assumed, we think, that the defendants knew when the agreement was made that they intended to pur- chase sardines of the kind that were tendered to them, and that the plaintiffs understood that the defendants knew it. It is also inferable that the defendants entered into the agreement, to the knowledge of the plaintiffs, for the purpose of selling the goods to others in the condition in which they were when delivered. It is also evident that the labels were used to deceive the consumers and not the contractors, and to obtain higher prices for the sardines. The plaintiffs procured and furnished the deceptive labels, after binding themselves by contract to do so, and this was done for an unlawful purpose, and with a view of furnishing goods for the market iu a condition calculated to deceive the consumers who might purchase them. It is, therefore, apparent that it was part of the contract that an unlawful object was intended, of which both parties were cognizant, and that it was designed by them, under the contract, to commit a fraud and thus promote an illegal purpose by deceiving other parties. In such a case the Chap. V. § 1.] LEGALITY OF OBJECT. 339 courts will not aid either party in carrying out a fraudulent purpose. To carry out this contract would he contrary to public policy, and in such a case, as we have seen, the court will not aid either party. Under the Penal Code (§ 438), it is made a misdemeanor to sell or offer for sale any package falsely marked, labeled, etc., as to the place where the goods were manufactured, or the quality or grade, etc. The contract in question would seem to be covered by this provision of the Code, but as the Penal Code did not go into effect until May 1, 1882, and this contract was made June 30, 1881, the section cited has, we think, no bearing on the question presented. The case was properly disposed of upon the ground first stated, which is fully considered and elaborated in the opinion of the General Term, Sedgwick, J., in which we concur. The judgment should be affirmed. All concur. Judgment affirmed.* 1 Where a note was given for the sale of " prolific oats " at fifteen dollars a, hushel, the payee agreeing to sell eighty bushels for the maker the next year at fifteen dollars a bushel, the court said : "That this contract is void as being against public policy, we have no doubt. Any contract that binds the maker to do something opposed to the public policy of the State or nation, or that conflicts with the wants, interests or prevailing sentiment of the people, or our obligations to the world, or is repugnant to the morals of the times, is void. Any contract which has for its object the practice of deception upon the public, or upon any party in interest as to the ownership of property, the nature of a transaction, the responsibility assumed by an obligation, or which is made in order to consummate a fraud upon the people or upon third persons, is void. Cfreenh. Pub. Pol. 136, 152. This contract is so out of the usual course of dealings as to awaken suspicion of its fairness. Ordinarily, contracts are made upon the basis of what is believed to be actual values, but this is confessedly upon the basis of most extravagant and unreal values. To carry out this contract eighty bushels of grain had to be sold tq,some person on or before September 1, 1888, for more than thirty times their value. This could only be done by grossly deceiving the purchaser as to their value, or repeating the scheme upon which this contract was made, or one similar. That such a scheme could not be repeated year after year is evident, so that in the end some person must be deceived into paying many times the value of the oats. If it was not intended upon the part of the company to carry out the contract, then the fraud was consummated the sooner. View the transaction as you may. 340 FORMATION OF COXTKACT. [Pabt IL b. Agreements to do that which it is the policy of the law to prevent. (o) Agreements which injure th6 state in its relations with other gtates. UNITED STATES v. GEOSSMAYER. 9 WALLACE (U. S.), 72.— 1869. [Eeported herein at p. 21B.] GEAVES V. JOHNSON. 156 MASSACHUSKTTS, 211. — 1892. [Eeported herein at p. 891.] (j8) Agreements which tend to injure the public service. TEIST V. CHILD. 21 WALLACE (U.S.), 441. — 1874. Bill to enjoin defendant from withdrawing the sum of f 14,559 from the United States Treasury, and for a decree commanding him to pay complainant $5000, and for general relief. Defense, illegality. Decree for complainant. Defendant appeals. Defendant, having a claim against the United States for ser- vices, made an agreement with complainant's father (to whose rights as partner and personal representative complainant suc- ceeded) that he should take charge of the claim and prosecute it and it discloses a cunningly-devised plan to cheat and defraud. ' Whenever any contract conflicts with the morals of the time and contravenes any estab- lished interests of society, it is void as being against public policy.' Story, Confl. Laws, sec. 546. Surely a contract that cannot be performed without deception and fraud conflicts with the morals of tl^ time, and contravenes the established interest of society. There was no error in instructing the jury that this contract is fraudulent and void as between the original parties to it. In this connection, see McNamara v. Gargett, 68 Mich. 454 ; 36 N. W. Rep. 218, wherein the Supreme Court of Michigan held a similar con- tract void as being against public policy. True, in that case the contract is said to be a gambling contract, but it is declared to be against public policy on other grounds." ^ Given, J., in Merrill v. Packer, 80 Iowa, 542. Chap. V. § 1.] LEGALITY OI* OBJECT. 341 before Congress, and receive as compensation 25 per cent of wliat- ever sum Congress might appropriate. The father, and after his death, the complainant, prosecuted the claim with the result that Congress appropriated the sum of f 14,559 to pay it. Defendant refused to pay the 25 per cent stipulated and complainant filed this bill in the Supreme Court of the District of Columbia. I'rom the evidence it appeared that personal solicitations were used to carry the bill, but there was no evidence that bribes were offered or contemplated. Mb. Justice Swatne. The court below decreed to the appellee the amount of his claim, and enjoined Trist from receiv- ing from the treasury " any of the money appropriated to him " by Congress, until he should have paid the demand of the appellee. This decree, as regards that portion of the fund not claimed by the appellee, is an anomaly. Why the claim should affect that part of the fund to which it had no relation, is not easy to be imagined. This feature of the decree was doubtless the result of oversight and inadvertence. The bill proceeds upon the grounds of the validity of the original contract, and a consequent lien in favor of the complainant upon the fund appropriated. We shall examine the latter ground first. Was there, in any view of the case, a lien? It is well settled that an Order to pay a debt out of a particular fund belonging to the debtor gives to the creditor a specific equitable lien upon the fund, and binds it in the hands of the drawee. Teates v. Cfroves, 1 Vesey, Jr. 280; Lett v. Morris^ 4 Simons, 607; Bradley v. Boot, 5 Paige, 632; 2 Story's Equity, § 1047. A part of the particular fund may be assigned by an order, and the payee may enforce payment of the amount against the drawee. Field v. The Mayor, 2 Selden, 179. But a mere agreement to pay out of such fund is not sufficient. Something more is necessary. There must be an appropriation of the fund pro tanto, either by giving an order or by transferring it otherwise in such a manner that the holder is authorized to pay the amount directly to the creditor without the further intervention of the debtor. Wright y. Ellison, 1 Wallace, 16; Hoytv. Story, 3 Bar- bour's Supreme Court, 264; Malcolm v. Scott, 3 Hare, 39; Bogers V. Eosack, 18 Wendell, 319. 342 FORMATION OF CONTRACT. [Part IL Viewing the subject in the light of these authorities, we are brought to the conclusion that the appellee had no lien upon the fund here in question. The understanding between the elder Child and Trist was a personal agreement. It could in nowise pjoduce the effect insisted upon. For a breach of the agreement, the remedy was at law, not in equity, and the defendant had a constitutional right to a trial by jury. Wright v. Ellison, 1 Wallace, 16. If there was no lien, there was no jurisdiction in equity. There is another consideration fatally adverse to the claim of a lien. The first section of the act of Congress of February 26, 1853, declares that all transfers of any part of any claim against the United States, "or of any interest therein, whether absolute or conditional, shall be absolutely null and void, unless executed in the presence of at least two attesting witnesses after the allow- ance of such claim, the ascertainment of the amount due, and the issuing of a warrant therefor." That the claim set up in the bill to a specific part of the money appropriated is within this statute is too clear to admit of doubt. It would be a waste of time to discuss the subject. But there is an objection of still greater gravity to the appellee's case. Was the contract a valid one? It was, on the part of Child, to procure by lobby service, if possible, the passage of a bill pro- viding for the payment of the claim. The aid asked by the younger Child of Trist, which indicated what he considered need- ful, and doubtless proposed to do and did do himself, is thus vividly pictured in his letter to Trist of the 20th February, 1871. After giving the names of several members of Congress, from whom he had received favorable assurances, he proceeds : " Please write to your friends to write to any member of Congress. Every vote tells, and a simple request may secure a vote, he not caring anything about it. Set every man you know at work. Even if he knows a page, for a page often gets a vote." In the Eoman law it was declared that "a promise made to effect a base purpose, as to commit homicide or sacrilege, is not binding." Institutes of Justinian, lib. 3, tit. 19, par. 24. In our jurisprudence a contract may be illegal and void because it is Chap. V. § 1.] LEGALITY OF OBJECT. 343 contrary to a constitution or statute, or inconsistent with sound policy and good morals. Lord Mansfield said {Jones v. Randall, 1 Cowper, 39) : " Many contracts which are not against morality, are still yoid as being against the maxims of sound policy." It is a rule of the common law of universal application, that ■ where a contract express or implied is tainted with either of the vices last named, as to the consideration or the thing to be done, no alleged right founded upon it can be enforced in a court of justice. Before considering the contract here in question, it may be well, by way of illustration, to advert to some of the cases pre- senting the subject in other phases, in which the principle has been adversely applied. Within the condemned category are : An agreement — to pay for supporting for election a candidate for sheriff, Swayze v. Hull, 3 Halsted, 54; to pay for resigning a public position to make room for another, Eddy v. Capron, 4 Ehode Island, 395; Parsons -v. Thompson, 1 H. Blackstone, 322; to pay for not bidding at a sheriff's sale of real property, Jones V. Caswell, 3 Johnson's Cases, 29; to pay for not bidding for articles to be sold by the government at auction, Doolin v. Ward, 6 Johnson, 194 ; to pay for not bidding for a contract to carry the mail on a specified route, Qulick v. Bailey, 5 Halsted, 87 ; to pay a person for his aid and influence in procuring an ofB.ce, and for not being a candidate himself, Chay v. Hook, 4 Comstock, 449 ; to pay for procuring a contract from the government. Tool Com- pany V. Norris, 2 Wallace, 45; to pay for procuring signatures to a petition to the governor for a pardon, Hatzfield v. Gulden, 7 Watts, 162; to sell land to a particular person when the surrogate's order to sell should have been obtained. Overseers of Bridge- water V. Overseers of Brookfield, 3 Cowen, 299; to pay for sup- pressing evidence and compounding a felony, Collins v. Blantern, 2 Wilson, 347; to convey and assign a part of what should come from an ancestor by descent, devise, or distribution, Boynton v. Hubbard, 7 Massachusetts, 112 ; to pay for promoting a marriage, Scribhlehill v. Brett, 4 Brown's Parliamentary Cases, 144; Arundel V. Trevillian, 1 Chancery Eeports, 87 ; to influence the disposition of property by will in a particular way, Debenham v. Ox, 1 Vesey, Sr. 844 FORMATION OF CONTRACT. [Part II. 276; see also Addison on Contracts, 91; 1 Story's Equity, ch. 7; Collins V. Blantern, 1 Smith's Leading Cases, 676, American note. The question now before us has been decided in four American cases. They were all ably considered, and in all of them the contract was held to be against public policy, and void. Clip- pinger v. Hepbaugh, 5 Watts & Sergeant, 315; Harris v. Hoof's Executor, 10 Barbour's Supreme Court, 489; Hose & Hawley v. Truax, 21 Id. 361 ; Marshall v. Baltimore and Ohio Bailroad Com- pany, 16 Howard, 314. We entertain no doubt that in such cases, as under all other circumstances, an agreement express or implied for purely professional services is valid. Within this category are included, drafting the petition to set forth the claim, attending to the taking of testimony, collecting facts, preparing arguments, and submitting them, orally or in writing, to a com- mittee or other proper authority, and other services of like char- acter. All these things are intended to reach only the reason of those sought to be influenced. They rest on the same principle of ethics as professional services rendered in a court of justice, and are no more exceptionable. But such services are separated by a broad line of demarcation from personal solicitation, and the other means and appliances which the correspondence shows were resorted to in this case. There is no reason to believe that they involved anything corrupt or different from what is usually practiced by a,ll paid lobbyists in the prosecution of their business. The foundation of a republic is the virtue of its citizens. They are at once sovereigns and subjects. As the foundation is undermined, the structure is weakened. When it is destroyed, the fabric must fall. Such is the voice of universal history. 1 Montesquieu, Spirit of Laws, 17. ' The theory of our government is, that all public stations are trusts, and that those clothed with them are to be animated in the discharge of their duties solely by considerations of right, justice, and the public good. They are never to descend to a lower plane. But there is a correlative duty resting upon the citizen. In his intercourse with those in authority, whether executive or legislative, touching the per- formance of their functions, he is bound to exhibit truth, frank- ness, and integrity. Any departure from the line of rectitude in Chap. V. §1.] LEGALITY OF OBJECT. 345 sucli cases is not only bad in morals, but involTes a public ■wrong. No people can have any higher public interest, except the preservation of their liberties, than integrity in the adminis- tration of their government in all its departments. The agreement in the present case was for the sale of the influence and exertions of the lobby agent to bring about the passage of a law for the payment of a private claim, without reference to its merits, by means which, if not corrupt, were illegitimate, and considered in connection with the pecuniary interest of the agent at stake, contrary to the plainest principles of public policy. No one has a right, in such circumstances, to put himself in a position of temptation to do what is regarded as so pernicious in its character. The law forbids the inchoate step, and puts the seal of its reprobation upon the undertaking. If any of the great corporations of the country were to hire adventurers who make market of themselves in this way, to pro- cure the passage of a general law with a view to the promotion of their private interests, the moral sense of every right-minded man would instinctively denounce the employer and employed as steeped in corruption, and the employment as infamous. If the instances were numerous, open, and tolerated, they would be regarded as measuring the decay of the public morals and the degeneracy of the times. No prophetic spirit would be needed to foretell the consequences near at hand. The same thing in lesser legislation, if not so prolific of alarming evils, is not less vicious in itself, nor less to be condemned. The vital principle of both is the same. The evils of the latter are of sufficient magnitude to invite the most serious consideration. The prohibition of the law rests upon a solid foundation. A private bill is apt to attract little attention. It involves no great public interest, and usually fails to excite much discussion. Not unfrequently the facts are whispered to those whose duty it is to investigate, vouched for by them, and the passage of the measure is thus secured. If the agent is truthful, and conceals nothing, all is well. If he uses nefarious means with success, the spring- head and the stream of legislation are polluted. To legalize the traffic of such service, would open a door at which fraud and falsehood would not fail to enter and make themselves felt at 346 FORMATION OF CONTBACT. [Pabt 11. every accessible point. It would' invite their presence and offer them a premium. If the tempted agent be corrupt himself, and disposed to corrupt others, the transition requires but a single step. He has the means in his hands, with every facility and a strong incentive to use them. The widespread suspicion which prevails, and charges openly made and hardly denied, lead to the conclusion that such events are not of rare occurrence. Where the avarice of the agent is inflamed by the hope of a reward con- tingent upon success, and to be graduated by a percentage upon the amount appropriated, the danger of tampering in its worst form is greatly increased. It is by reason of these things that the law is as it is upon the subject. It will not allow either party to be led into temptation where the thing to be guarded against is so deleterious to private morals and so injurious to the public welfare. In expressing these views, we follow the lead of reason and authority. We are aware of no case in English or American jurisprudence like the one here under consideration, where the agreement has not been adjudged to be illegal and void. We have said that for professional services in this connection a just compensation may be recovered. But where they are blended and confused with those which are forbidden, the whole is a unit and indivisible. That which is bad destroys that which is good, and they perish together. Services of the latter char- acter, gratuitously rendered, are not unlawful. The absence of motive to wrong is the foundation of the sanction. The tendency to mischief, if not wanting, is greatly lessened. The taint lies in the stipulation for pay. Where that exists, it affects fatally, in all its parts, the entire body of the contract. In all such cases, potior conditio defendentis. Where there is turpitude, the law will help neither party. The elder agent in this case is represented to have been a lawyer of ability and high character. The appellee is said to be equally worthy. This can make no difference as to the legal principles we have considered, nor in their application to the case in hand. The law is no respecter of persons. Decree reversed, and the case remanded, with directions to Dismiss the bill. Chap. V. § 1.] LEGAUTY OF OBJECT. 347 SOUTHAED V. BOYD. 51 NEW YORK, 177. — 18T2. Action to recover commissions earned by plaintiffs as ship brokers in chartering defendant's vessel to the government. Judgment for plaintiffs reversed at General Term. Plaintiffs appeal. Eakl, C. . . . The further claim is made that the contract with the plaintiffs was for an illegal service, in that they charged a commission for claiming to have influence with a government agent to accept a vessel already offered, but not yet accepted. It is true that one of the plaintiffs was a son, and that another was a son-in-law of one of the government agents, whose business it was to select the vessels for the government, and the plaintiffs probably had facilities for chartering vessels which others did not have. But the plaintiffs did not contract to do an illegal service. They did not agree to use any corrupt means to procure the charter. The fact that the plaintiffs had intimate relations with the government agents, and could probably therefore influence their action much more readily than others, did not forbid their employment. Lyon v. Mitchell, 36 N. Y. 235. I am unable to see, therefore, upon what ground the contract of the defendant with the plaintiffs can be considered as illegal. The order of the general term should be reversed and judgment upon the verdict affirmed, with costs. All concur. Order reversed and judgment accordingly. *■ 1 "There is no real difference in principle between agreements to procure favors from legislative bodies, and agreements to procure favors in the shape of contracts from the heads of departments. The introduction of improper elements to control the action of both, is the direct and inevitable result of all such arrangements." — Mr. Justice Field, in Tool Co. v. Norris, 2 "Wall. (U. S.) 45, 55. Followed in Meguire v. Corwine, 101 U. S. 108 (contract for appointment to public office); Oscanyan v. Arms Co., 103 U. S. 261 (con- tract of resident consul to influence purchasing agent of home government). See criticism on the case in Lyon v. Mitchell, 36 N. Y. 235. As to agreements for influencing corporate or other fiduciary action, see Woodstock Iron Co. v. Bichmond &c. Co. 129 U. S. 643. As to the assignment of unearned salaries of public oflScers, see Bowery Nat. Bank v. Wilson, 122 N. Y. 478. As to agreements to quiet competition for public contracts, see Brooks v. Cooper, 50 N. J. Eq. 761 ; Boyle v. Adams, 50 Minn. 255. 348 FORMATION OF CONTRACT. [PAtrt H. (y) Agreements which tend to pervert the course of justice. (1.) Stifling criminal proceedings. PARTEIDGE v. HOOD. 120 MASSACHUSETTS, 403.— 1876. Contract. The answer averred that the consideration of the contract was an agreement on the part of the plaintiff to stop a criminal prosecution against Edward K. Hood, the defendant's son. The court ruled that the agreement was illegal and directed judgment for defendant. Plaintiff alleged exceptions. Gbat, C. J. The reason that a private agreement, made in consideration of the suppression of a prosecution for crime, is illegal, is that it tends to benefit an individual at the expense of defeating the course of public justice. The doctrine has never been doubted as applied to felonies, and the English authorities before our Revolution extended it to all crimes. 2 West Symh. Compromise & Arbitrament, § 33; Horton v. Benson, 1 Freem. 204; Bac. Ah. Arbitrament & Award, A; Johnson v. Ogilby, 3 P. Wms. 277, and especially the register's book cited by Mr. Cox in a note to page 279; Collins v. Blantern, 2 Wils. 341; 4 Bl. Com. 363, 364. An appeal of mayhem could be barred by arbitrament, or accord and satisfaction, or release of all personal actions, because it was the suit of the appellant and not of the Crown, and subjected the appellee to damages only, like an action of trespass. Blake's Case, 6 Kep. 43 6, 44 c; 2 Hawk. c. 23, §§ 24, 25. Some confusion was introduced into the English law upon this subject by the rulings of Lord Kenyon: Kyd on Awards (Am. ed.), 64-68; Drage v. Ibherson, 2 Esp. 643; Fallowesv. Taylor, Peake Ad. Cas. 155; ;S'. C. 7 T. E. 475; and by Mr. Justice Le Blanc's suggestion of a distinction between a prosecution for public misdemeanor and one for a private injury to the prose- cutor. Edgcombe v. Bodd, 5 East, 294, 303; 8. C. 1 Smith, 61S, 520. This confusion was not wholly removed by the opinions of Lord EUenborough in Edgcombe v. Bodd, 5 East, 294, 302; in Wallace v. Hardacre, 1 Camp. 45, 46; in Pool r. Bousfleldf 1 Camp. 55, and in Beeley v. Wingfield, 11 East, 46, 48; of Chief Chap. V. § 1.] LEGALITY OF OBJECT. 349 Justice Gibbs in Baker v. Townshend, 1 Moore, 120, 124; S. C. 7 Taunt. 422, 426; or of Lord Denman in Keir v. Leeman, 6 Q. B. 308, 321. But in tbe very able Judgment of the Exchequer Chamber in Keir v. Leeman (9 Q. B. 371, 395), Chief Justice Tindal, after reviewing the previous cases, summed up the matter thus : "Indeed it is very remarkable what very little authority there is to be found, rather consisting of dicta than deeisions, for the principle that any compromise of a misdemeanor, or indeed of any public offense, can be otherwise than illegal, and any promise founded on such a considera- tion otherwise than void. If the matter were res Integra, we should have no doubt on this point. "We have no doubt that, in all offenses which involve damages to an injured party for which he may maintain an action, it is competent for him, notwithstanding they are also of a public nature, to compromise or settle his private damage in any way he may think fit. It is said, indeed, that in the case of an assault he may also undertake not to prosecute on behalf of the public. It may be so, but we are not disposed to extend this any further." In Fisher v. Apollinaris Co. (L. E. 10 Ch. 297) the plaintiff, pursuant to an agreement of the defendants to abandon a prose- cution against him under St. 25 & 26 Vict. c. 88, for a violation of their trade-mark, gave them a letter of apology, with authority to make use of it as they might think necessary, and, after they had published it by advertisement for two months, filed a bill in equity to restrain them from continuing the publication, which was dismissed by the lords justices. The principal grounds of the decision appear to have been that the defendants had done nothing that the plaintiff had not authorized them to do; and that, even if the publication affected the plaintiff's reputation, a court of chancery had no jurisdiction to restrain it. See Pru- dential Assurance Co. v. Knott, L. E. 10 Ch. 142 ; Boston Diatite Co. V. Florence Manufacturing Co., 114 Mass. 69. It was indeed observed that " it was no more a violation of the law to accept an apology in such a case than it would be to compromise an indict- ment for a nuisance or for not repairing a highway on the terms of the defendants agreeing to remove the nuisance or repair the highway." L. B. 10 Ch. 302. But this observation was not necessary to the decision; and in The Queen v. Blakemore (14 Q. B. 544) an agreement for the compromise of an indictment for 350 FORMATION OF CONTBACT. [Paet U. not repairing a highway was held illegal and void. All the other recent English authorities support the judgment of Chief Justice Tindal, above quoted. The Queen v. Hardey, 14 Q. B. 629, 541; Clubh V. Hutson, 18 C. B. (N. S.) 414; Williams v. Bayley, L. R. 1 H. L. 200, 213, 320. In Jones v. Bice (18 Pick. 440, 442), Mr. Justice Putnam deliver- ing the opinion of this court, after alluding to the English cases in the time of Lord Kenyon, relied on to " sustain the distinction between considerations arising from the compounding of felonies, which is admitted to be illegal, and the compounding of mis- demeanors, which is alleged to be lawfuj," said: " We do not think that such a power is vested in individuals. It would enable them to use the claim of the government for their own. emolument, and greatly to the oppression of the people. It has a direct tendency to obstruct the course of the administration of justice ; and the mischief extends, we think, as well to misdemeanors as to felonies. The power to stop prosecutions is vested in the law officers of the Common- wealth, who use it with prudence and discretion. If it were given to the party injured, who might be the only witness who could prove the offense, he might extort for his own use money which properly should be levied as a fine upon the criminal party for the use of the Common- wealth." It is true that the prosecution in Jones v. Bice was for a riot as well as for an assault. But the language and the reasoning of the opinion extend to the compounding of any offense whatever. Any act which is made punishable by law as a crime is an offense against the public, and, especially in this country, where all prosecutions are subject to the control of official prosecutors, and not of the individuals immediately injured, cannot lawfully be made the subject of private compromise, except so far as expressly authorized by statute. And this view is supported by the great weight of American authority. Hinds v. Chamberlin, 6 N. H. 225; Shaw v. Spooner, 9 N. H. 197; Shaw v. Beed, 30 Maine, 105; Bowen v. Buck, 28 Vt. 308; People v. Bishop, 5 Wend. Ill; Woble V. Peebles, 13 S. & R. 319, 322; Maurer v. Mitchell, 9 W. & S. 69, 71; Cameron v. M'Farland, 2 Car. Law Eep. 415; Corley V. Williams,! Bailey, 588; Vincent v. Ghoom, 1 Yerger, 430; Met. Con. 226, 227; 1 Story Eq. Jur. § 294. Chap. V. § 1.] LEGALITY OF OBJECT. 351 The legislature of the commonwealth has defined the eases and circumstances in which the compromise of a prosecution shall be allowed. By a provision first introduced in the Eevised Statutes, when a person is committed or indicted for an assault and battery or other misdemeanor for which the party injured may have a remedy by civil action (except when committed by or upon an of&cer of justice, or riotously, or with intent to commit a felony), if the party injured appears before the magistrate or court and acknowledges satisfaction for the injury sustained, a stay of proceedings may be ordered. Bev. Sts. c. 135, § 25; e. 136, § 27; Gen. Sts. c. 170, § 33; c. 171, § 28. Such an acknowl- edgment of satisfaction does not entitle the defendant to be dis- charged, but leaves it to the discretion of the magistrate or court whether a stay of proceedings is consistent with the interests of public justice. Commonwealth v. Dowdican's Bail, 115 Mass. 133. See also State v. Hunter, 14 La. Ann. 71. In the case at bar, it being found as a fact that the agreement sued on was entered into by the defendant for the purpose of compounding a complaint against her son for a misdemeanor, and it not appearing that satisfaction has ever been acknowledged in or approved by the court in which the prosecution was pending, judgment was rightly ordered for the defendant. Exceptions overruled.^ (2.) Agreements to arbitrate. HAMILTON V. LIVEEPOOL &c. INS. CO. 136 UNITED STATES, 242. — 1889. Action on an insurance policy containing this stipulation : "It is furthermore hereby expressly provided and mutually agreed that no suit or action against this company for the recovery of any claim by virtue of this policy shall be sustainable in any court of law or chan- cery, until after an award shall have been obtained fixing the amount of such claim in the manner above provided." 1 See also Goodrich v. Tenney, 144 HI. 422 (agreement to procure testi- mony) ; Sowman v. Fhillips, 41 Kaus. 364 (agreement to defend for future violations of law). 352 FORMATION OF CONTRACT. [Part IL The manner provided for fixing the amount of loss in case of dispute was by reference to arbitrators selected by the parties. The court directed a verdict for the defendant. Plaintiff brings error. Mr. Justice Gkat. The conditions of the policy in suit clearly and unequivocally manifest the intention and agreement of the parties to the contract of insurance that any difference arising between them as to the amount of loss or damage of the property insured shall be submitted, at the request in writing of either party, to the appraisal of competent and impartial persons, to be chosen as therein provided, whose award shall be conclusive as to the amount of such loss or damage only, and shall not determine the question of the liability of the company; that the company shall have the right to take the whole or any part of the property at its appraised value so ascertained; and that until such appraisal shall have been permitted, and such an award obtained, the loss shall not be payable, and no action shall lie against the company. The appraisal, when requested in writing by either party, is distinctly made a condition precedent to tha payment of any loss, and to the maintenance of any action. Such a stipulation, not ousting the jurisdiction of the courts, but leaving the general question of liability to be judicially determined, and simply providing a reasonable method of esti- mating and ascertaining the amount of the loss, is unquestionably valid, according to the uniform current of authority in England and in this country. Scott v. Avery, 5 H. L. Gas. 811 ; Viney v. Bignold, 20 Q. B. D. 172; Delaware & Hudson Canal v. Pennsyl- vania Coal Co., 50 N. Y. 250; Reed v. Washington Ins. Co., 138 Mass. 572, 576; Wolff v. Liverpool & London In Hamilton v. ffome Ins. Co. (137 IT. S. 370), the provisions were (1) for an appraisal by disinterested parties, and (2) in case of differences- as to loss after proof, the submission of the dispute to arbitrators "whose award in writing shall be binding on the parties as to the amount of sucb 354 FORMATION OF CONTRACT. [Pabt II. (S) Agreements which tend to abuse of legal process : champerty and maintenance. ACKEET V. BAEKER. 131 MASSACHUSETTS, 436.— 1881. Action against an attorney for money had and received, being the sums obtained by him on suits against two insurance compa- nies. The answer set up "that the plaintiff agreed, in considera- tion of the defendant acting for him in the premises, that said defendant should, out of any and all moneys received by him from said insurance companies, retain one-half of the amount received after payment of proper costs and charges." The trial court charged that if the jury found thatj there was an agreement by which defendant was to retain one-half the sum collected as corn- loss or damage, but shall not decide the liability of the company under this policy." In the opinion by Mr. Justice Gray, it is said : "A proTisioll in a contract for the payment of money upon a contingency, that the amount to be paid shall be submitted to arbitrators, whose award shall be final as to that amount, but shall not determine the general question of liability, is undoubtedly valid. If the contract further provides that no action upon it shall be maintained until after such award, then, as adjudged in Hamilton V. Liverpool, London & Globe Ins. Co., above cited, and in many cases therein referred to, the award is a condition precedent to the right of action. But when no such condition is expressed in the contract, or necessarily to be implied from its terms, it is equally well settled that the agreement for sub- mitting the amount to arbitration is collateral and independent, and that a breach of this agreement, while it will support a separate action, cannot be pleaded in bar to an action on the principal contract. Roper v. Lendon, 1 El. & El. 825 ; Collins i. Locke, 4 App. Cas. 674 ; Dawson v. Fitzgerald, 1 Ex. D. 257 ; Beed v. Washington Ins. Co., 138 Mass. 572 ; Seward v. Jtoches- ter, 109 N. Y. 164 ; Birmingham Ins. Co. v. Pulver, 126 III. 329, 338 ; Crossley v. Connecticut Ins. Co., 27 Ted. Rep. 30. The rule of law upon the subject was well stated in Dawson v. Fitzgerald by Sir George Jessel, Master of the Rolls, who said : ' There are two cases where such a plea as the present is successful : first, where the action can only be brought for the sum named by the arbitrators ; secondly, where it is agreed that no action shall be brought till there has been an arbitration, or that arbitration shall be a condition precedent to the right of action. In all other cases where there is, first, a covenant to pay, and secondly, a covenant to refer, the covenants are distinct and collateral, and the plaintiff may sue on the first, leaving the defendant ' ' to bring an action for not referring,' or (under a modem English statute) 'to stay the action till there has been an arbitration.' 1 Ex. D. 260." See post. Absolute promises and concurrent conditions, Pt. v., Ch. UI., §2 (v.), a. Chap. V. § 1.] LEGALITY OF OBJECT. 355 pensation for his services, sucli agreement was unlawful. Ver- dict for plaintiff. Defendant alleged exceptions. Geay, C. J. The defendant's answer and bill of exceptions, fairly construed, show that the agreement set up by the defend- ant was an agreement by which, in consideration that an attorney should prosecute suits in behalf of his client for certain sums of money, in which he had himself no previous interest, it was agreed that he should keep one-half of the amount recovered in case of success, and should receive nothing for his services in case of failure. By the law of England from ancient times to the present day, such an agreement is unlawful and void, for champerty and main- tenance, as contrary to public justice and professional duty, and tending to speculation and fraud, and cannot be upheld, either at common law or in equity. 2 Bol. Ab. 114 ; Lord Coke, 2 Inst. 208, 564. Hobart, C. J., Box v. Barnaby, Hob. 117 a; Lord Nottingham, Skapholme v. Hart, Pinch, 477; S. 0. 1 Eq. Gas. Ab. 86, pi. 1; Sir William Grant, M. E., Stevens v. Bagwell, 15 Ves. 139; Tindal, C. J., Stanley v. Jones, 7 Bing. 369, 377; S. C. 5 Moore & Payne, 193, 206; Coleridge, J., In re Masters, 1 H.ar. & Wol. 348; Shadwell, V. C, Strange v. Brennan, 15 Sim. 346 ; Lord Cottenham, S. C. on appeal, 2 Coop. Temp. Cot- tenham, 1; Erie, C. J., Grell v. Levy, 16 C. B. (N. S.) 73; Sir George Jessel, M. E., In re Attorneys & Solicitors Act, 1 Ch. D. 573. It is equally illegal by the settled law of this Commonwealth. Thurston v. Percival, 1 Pick. 415; Lathrop v. Amherst Bank, 9 Met. 489; Swett v. Poor, 11 Mass. 549; Allen v. Hawks, 13 Pick. 79, 83; Call v. Calef, 13 Met. 362; Bindge v. Coleraine, 11 Gray, 157, 162; 1 Dane Ab. 296; 6 Dane Ab. 740, 741. In Lathrop V. Amherst Bank, the fact that the agreement did not require the attorney to carry on the suit at his own expense was adjudged to be immaterial. 9 Met. 492. In Scott v. Harmon (109 Mass. 237) and 'in Tapley v. Coffin (12 Gray, 420), cited for the defend- ant, the attorney had not agreed to look for his compensation to that alone which might be recovered, and thus to make his pay depend upon his success. The law of Massachusetts being clear, there would be no pro- 356 FORMATION OF CONTRACT. [Part IL priety in referring to the conflicting decisions in other parts of the country. If it is thought desirable to subordinate the rules of professional conduct to mercantile usages, a change of our law in this regard must be sought from the legislature and not from the courts. The defendant, by virtue of his employment by the plaintiff, and of his professional duty, was bound to prosecute the claims intrusted to him for collection, and holds the amount recovered as money had and received to the plaintiff's use. The agreement set up by the defendant, that he should keep one-half of that amount, being illegal and void, he is accountable to the plaintiff for the whole amount, deducting what the jury have allowed him for his costs. In re Masters, and Orell v. Levy, above cited; Pince V. Beattie, 32 L. J. (H. S.) Ch. 734. Of Best V. Strong (2 Wend. 319), on which the defendant relies as showing that, assuming this agreement to be illegal, the plain- tiff cannot maintain this action, it is enough to say that there the money was voluntarily paid to the defendant, with the plain- tiff's assent, after the settlement of the suit by which it was recovered; and it is unnecessary to consider whether, upon the facts before the court, the case was well decided. Exceptions overruled.^ 1 "The grounds upon which contracts were held voidable for champerty or maintenance, as against the policy of the law, were that there might he combinations of powerful individuals to oppress others which might even influence or overawe the court, and that they tended to the promotion and enforcement of unfounded claims, to disturb the public repose, to promote litigation, and to breed strife and quarrels among neighbors. With the progress of society these reasons have everywhere lost much of their force, and the whole doctrine on this subject has been rejected in several States of the Union as antiquated and incongruous in the existing state of society, notably in New Jersey, Texas, California, and Mississippi. Without desir- ing to modify or in any way recede from the doctrine on this subject, as it has heretofore been held in Massachusetts, we see no reason for its further extension. Neither the definition of champerty nor the reasons why it was held to be an offense have any proper application to a proceeding such as liat by which the defendant, under his contract with the plaintiff, sought to enforce his claim against the government of the United States. There was no suit to be brought, nor any defendant in the proposed proceeding, in lie same sense that there is in a contested cause at law or in equity." — Derens, J., in Manning v. Sprague, 148 Mass. 18, 20. " The first objection of the plaintiffs in error is that the contract set up Chap. V. § 1.] LEGALITY OF OBJECT. 357 (e) Agreements ivhich are contrary to good morals. BOIGNEEES v. BOULON. 64 CALIFORNIA, 146. — 1880. Appeal from judgment of nonsuit, and order denying new trial. Department No. 1, by the Court (from tlie Bench) : The only evidence in respect to the alleged promise of mar- riage is the testimony of the plaintiff herself. She declares — such is the effect of her language ■ — that the only consideration for the promise was that she should continue the immoral and illegal relation toward defendant as his mistress, which she had held previous to the promise. This is only saying that he prom- ised to marry her at some date not mentioned, if she would con- tinue to surrender her person to him as she had done in the past. It has been held, and we think correctly, that such promise or surrender on the part of the woman is not sufS.cient consideration for a promise of marriage, because immoral, illegal, and against public policy. On the authority of Hanks v. Naglee, November Term, 1879, the judgment must be affirmed. So ordered.^ in declaration is one for a contingent compensation. Such a defense in some jurisdictions would be a good one ; but a settled rule of tbis court is tbe otber way. Reported cases to that effect sbow that the proposition is one beyond legitimate controversy. Wylie v. Ooxe, 16 How. 415 ; Wright V. Tebbitts, 91 U. S. 252." — Mr. Justice Clifford, in Stanton v. Embrey, 93 U. S. 548, 556. "This, however, does not remove the suspicion which naturally attaches to such contracts, and where it can be shown that they are obtained from the suitor by any undue influence of the attorney over the client, or by any fraud or imposition, or that the compensation is clearly excessive, so as to amount to extortion, the court will in a proper case protect the party aggrieved." — Mr. Justice Miller, in Taylor v. Bemiss, 110 U. S. 42, 45, 46. See also Fowler v. Callan, 102 N. Y. 395 ; Meece v. Kyle, 49 Ohio St. 475. 1 Accord : Brown v. Tuttle, 80 Me. 162. 368 FORMATION OF CONTRACT. [Part II. KUETZ V. FRANK, 76 INDIANA, 594. — 1881. Action by the appellee against the appellant for a breach of promise of marriage. Verdict for plaintiff. Defendant appeals from an order denying motion for new trial. Woods, J. . . . The plaintiff testified that the defendant promised to marry her in September or October (1878) ; that he said he would marry her in the fall if they could agree and get along, and be true to each other; but, if she became pregnant from their intercourse, he would marry her immediately. She did become pregnant, about the middle of July, 1878, and in- formed the defendant of the fact as soon as aware of it. Upon this evidence, it is insisted that the agreement to marry immedi- ately in case of the plaintiff's pregnancy, is void, because immoral, and that, aside from this part of the agreement, the defendant had until the first of December within which to fulfill his engagement; and, consequently, that the suit, begun as it was before that date, was prematurely brought. It does not appear that the illicit intercourse entered into the consideration of the marriage contract, but the appellant, having agreed to marry the appellee at a time then in the future, obtained the intercourse upon an assurance that, if pregnancy resulted, the contract already made should be per- formed at once. This did not supersede the original agreement, but fixed the time for its performance. Clark v. Pendleton, 20 Conn. 495. We are not prepared to lend judicial sanction and protection to the seducer by declaring that he may escape the obligation of his contract, so made, on the plea that it is immoral. But if this were otherwise, and if, by its terms, the contract was not to have been performed until at a time subsequent to the com- mencement of the suit, yet if, before the suit was brought, the appellant had renounced the contract, and declared his purpose not to keep it, that constituted a breach, for which the appellee had an immediate right of action. Burtis v. Thompson, 42 N. Y. 246; Hollowayy. Griffith, 32 Iowa, 409; S. C. 7 Am. Eep. 208, n; Chap. V. § 1.] LEGALITY OF OBJECT. 359 Frost V. :Knight, L. R. 7 Exch. Ill; S. G. 1 Moak's Eng. Eep. 218. We cannot say that the award of damages was excessive. Judgment affirmed, with costs. (^) Agreements which affect the freedom, or security of marriage. STEELING V. SINNICKSON. 2 SOUTHARD (5 N. J. L.), 756.— 1820. Declaration in debt on a sealed bill, which was as follows : "I, Seneca Sinnickson, am hereby bound to Benjamin Sterling, for the sum of one thousand dollars, provided he is not lawfully married in the course of six months from the date hereof. Witness my hand and seal. Burlington, May 16, 1816. "Seneca Sinnickson (Seal). " Witness, James S. Budd." Defendant demurred generally, and plaintiff joined in de- murrer. KiEKPATEiCK, C. J. . . . The contract was not only use- less and nugatory, but it was contrary to the public policy. Marriage lies at the foundation, not only of individual happi- ness, but also of the prosperity, if not the very existence, of the social state; and the law, therefore, frowns upon, and removes out of the way, every rash and unreasonable restraint upon it, whether by way of penalty or inducement. If these parties had entered into mutual obligations, the plain- tiff not to marry within six months, and the defendant to pay him therefor this sum of f 1000, there can be no doubt, I think, but that both the obligations would have been void. In the case of Key V. Bradshaw (2 Vern. 102), there was a bond in the usual form, but proved to be upon an agreement to marry such a man, or to pay the money mentioned in the bond; but the bond was ordered to be canceled it being contrary to the nature and de- sign of marriage, which ought to proceed from free choice, and not from any restraint or compulsion. In the case of Baker v. WJiite (2 Vern. 215), A 'gave her bond to B for £100 if she should marry again, and B gave her his bond for the same sum. 360 FORMATION OF CONTRACT. [Part II. to go towards the advancement of her daughter's portion, in case she should not marry. It was, as Lord Mansfield says in Lowe V. Peers (Bur. 2231), a mere wager, and nothing unfair in it; and yet A was relieved against her bond, because it was in restraint of marriage, which ought to be free. A bond, therefore, to marry, if there be no obligation on the other side, no mutual promise, or a bond not to marry, are equally against law. They are both restraints upon the freedom of choice and of action, in a case where the law wills that all shall be free. If the consid- eration for which this money was to be paid, then, was the under- taking of the plaintiff not to marry, that consideration was unlawful. He would have been relieved against it, either at law or in equity; and if so, the corresponding obligation to pay, according to the principle above stated, is void. It has been spoken of by the plaintiff, as if it were an obliga- tion to pay money upon a future contingency, which any man has a right to make, either with or without consideration, and as if the not marrying of the plaintiff were not the consideration of the obligation, but the contingent event only, upon which it became payable. But I think this is not the correct view of the case. Where the event upon which the obligation becomes paya- ble is in the power of the obligee, and is to be brought about by his doing or not doing a certain thing, it cannot be so properly called a contingency ; it is rather the condition meritorious, upon which the obligation is entered into, the moving consideration for which the money is to be paid. It is not, therefore, to be considered as a mere contingency, but as a consideration, and it must be such consideration as the law regards. Nor does it at all vary the case that the restraint was for six months only. It was still a restraint, and the law has made no limitation as to the time. Neither can the plaintiff's perform- ance, on his part, help him. It imposed no obligation upon the defendant; it was wholly useless to him; the contract itself was void from the beginning. Therefore, in my opinion, let there be judgment for the defendant. Judgment for defendant.* 1 " The substance of the contract is, if the applicant will pay the associa^ tion a certain sum of money down, and agree to pay such dues and assess- Chap. V. § 1.] LEGALITY OF OBJECT. 361 DUVAL V. WELLMAN. 124 NEW YORK, 156. — 1891. [Reported herein at p. 402.] CEOSS V. CEOSS. 58 NEW HAMPSfflRE, 373. — 1878. Writ of entry on a mortgage given by defendant to M. for plaintiff, in consideration that she should re-convey to him cer- tain lands, and should then file a bill for divorce which he agreed not to defend. This agreement was executed, the divorce was granted, and M. assigned the notes and mortgage to plaintiff. Clakk, J. "When the notes and mortgage were given, the plaintiff was the wife of the defendant; and the principal object of the agreement, in pursuance of which the notes and mortgage were executed, was to obtain a collusive divorce. Such an agreement is contrary to sound public policy, and con- sequently illegal and void. The marriage contract is not to be dissolved or determined at the will or caprice of the parties. If annulled, it must be in accordance with the requirements of the law, and in due course of legal proceedings. The whole agree- ment and proceedings of the parties in this case were a fraud upon the law, and if the facts had come to the knowledge of the court, a divorce would not have been granted. The law will not aid either party in enforcing their illegal contract. The considera- tion of the notes secured by the mortgage being illegal and void, the action cannot be maintained. The principles of law gov- erning this case were considered and settled in Sayles v. Sayles, 21 ISr. H. 312, and Weeks v. Hill, 38 IST. H. 199. Judgment for the defendant. ments as it may demand upon expressed terms from time to time, it will pay the applicant at the end of two years the sum of $3960, upon condition that the applicant should not get married within that time, hut if he should marry within that time, then the association was to pay him $5.50 for each day that he remained single, after the execution of the contract. The amount to be paid by the association is dependent upon the time the member refrains from marriage. We think this contract is contrary to public policy and void. ... A promise to pay money in consideration of not marrying cannot be enforced. 2 Parsons Con. 73, note (A)." — Frank- lin, C, in Ghalfant v. Payton, 91 Ind. 202, 206, 207. 362 FORMATION OF CONTRACT. [Fast n. (17) Agreements in restraint of trade. DIAMOND MATCH CO. v. EOEBEE. 106 NEW YORK, 473. — 1887. Appeal from judgment of the General Term of the Supreme Court in the first judicial department, made March 20, 1885, which modified as to an additional allowance of costs and affirmed, as modified, a judgment in favor of plaintiff, entered upon a decision of the court on trial at Special Term. This action was brought to restrain the defendant from engag- ing in the manufacture or sale of friction matches in viola- tion of a covenant in a bill of sale executed by defendant, which is set forth in the opinion, wherein also the material facts are stated. Andrews, J. Two questions are presented: First. Whether the covenant of the defendant contained in the bill of sale exe- cuted by him to the Swift & Courtney & Beecher Company on the 27th day of August, 1880, " that he shall and will not, at any time or times within ninety-nine years, directly or indirectly, engage in the manufacture or sale of friction matches (excepting in the capacity of agent or employ^ of said The Swift & Court- ney & Beecher Company), within any of the several States of the United States of America, or in the Territories thereof, or within the District of Columbia, excepting and reserving, however, the right to manufacture and sell friction matches in the State of Nevada and in the Territory of Montana," is void as being a cove- nant in restraint of trade; and, second, as to the right of the plaintiff, under the special circumstances, to the equitable remedy by injunction to enforce the performance of the covenant. There is no real controversy as to the essential facts. The consideration of the covenant was the purchase by the Swift & Courtney & Beecher Company, a Connecticut corporation, of the manufactory No. 528 West Fiftieth Street, in the city of New York, belonging to the defendant, in which he had, for several years prior to entering into the covenant, carried on the business of manufacturing friction matches, and of the stock and materials on hand, together with the trade, trade-marks, and good will of Chap. V. § 1.] LEGALITY OF OBJECT. 363 the business, for the aggregate sum (excluding a mortgage of $5000 on the property, assumed by the company) of $46,724.05, of which $13,000 was the price of the real estate. By the pre- liminary agreement of July 27, 1880, $28,000 of the purchase price was to be paid in the stock of the Swift & Courtney & Beecher Company. This was modified when the property was transferred August 27, 1880, by giving to the defendant the option to receive the $28,000 in the notes of the company or in its stock, the option to be exercised on or before January 1, 1881. The remainder of the purchase price, $18,724.05, was paid down in cash, and subsequently, March 1, 1881, the defend- ant accepted from the plaintiff, the Diamond Match Company, in full payment of the $28,000, the sum of $8000 in cash and notes, and $20,000 in the stock of the plaintiff, the plaintiff company having, prior to said payment, purchased the property of the Swift & Courtney & Beecher Company and become the assignee of the defendant's covenant. It is admitted by the pleadings that in August, 1880 (when the covenant in question was made), the Swift & Courtney & Beecher Company carried on the business of manufacturing friction matches in the States of Connecticut, Delaware, and Illinois, and of selling the same " in the several States and Territories of the United States and in the District of Columbia; " and the complaint alleges, and the de- fendant in his answer admits, that he was at the same time also engaged in the manufacture of friction matches in the city of New York, and in selling them in the same territory. The proof tends to support the admission in the pleadings. It was shown that the defendant employed traveling salesmen, and that his matches were found in the hands of dealers in ten States. The Swift & Courtney & Beecher Company also sent their matches throughout the country wherever they Qould find a market. When the bargain was consummated, on the 27th of August, 1880, the defendant entered into the employment of the Swift & Courtney & Beecher Company, and remained in its employment until January, 1881, at a salary of $1500 a year. He then entered into the employment of the plaintiff and re- mained with it during the year 1881, at a salary of $2500 a year, and from January 1, 1882, at a salary of $3600 a year, when a dis- 364 FORMATION OF CONTRACT. [Part IL agreement arising as to the salary lie should thereafter receive, the plaintiff declining to pay a salary of more than $2500 a year, the defendant voluntarily left its service. Subsequently he became superintendent of a rival match manufacturing company in New Jersey, at a salary of $6000, and he also opened a store in New York for the sale of matches other than those manufact- ured by the plaintiff. The contention by the defendant that the plaintiff has no equitable remedy to enforce the covenant, rests mainly on the fact that contemporaneously with the execution of the covenant of August 27, 1880, the defendant also executed to the Swift & Courtney & Beecher Company a bond in the penalty of $15,000, conditioned to pay that sum to the company as liquidated damages in case of a breach of his covenant. The defendant for his main defense relies upon the ancient doctrine of the common law first definitely declared, so far as I can discover, by Chief Justice Parker (Lord Macclesfield) in the leading case of Mitchel.Y. Reynolds (1 P. Williams, 181), and which has been repeated many times by judges in England and America, that a bond in general restraint of trade is void. There are several decisions in the English courts of an earlier date in which the question of the validity of contracts restrain- ing the obligor from pursuing his occupation within a particular locality was considered. The cases are chronologically arranged and stated by Mr. Parsons in his work on Contracts, Vol. 2, p. 748, note. The earliest reported case, decided in the time of Henry "V., was a suit on a bond given by the defendant, a dyer, not to use his craft within a certain city for the space of half a year. The judge before whom the case came indignantly de- nounced the plaintiff for procuring such a contract, and turned him out of court. This was followed by cases arising on con- tracts of a similar character, restraining the obligors from pursu- ing their trade within a certain place for a certain time, which apparently presented the same question which had been decided in the dyer's case, but the courts sustained the contracts and gave judgment for the plaintiffs ; and, before the case of Mitchel V. Reynolds, it had become settled that an obligation of this character, limited as to time and space, if reasonable under the circumstances and supported by a good consideration, was valid. Chap. V. § 1.] LEGALITY OF OBJECT. 365 The case in the Year Books went against all contracts in restraint of trade, whether limited or general. The other cases, prior to Mitchel V. Reynolds, sustained contracts for a particular re- straint, upon special grounds, and hy inference decided against the validity of general restraints. The case of Mitchel v. Bey- nolds was a case of partial restraint and the contract was sus- tained. It is worthy of notice that most, if not all, the English cases which assert the doctrine that all contracts in general re- straint of trade are void, were cases where the contract before the court was limited or partial. The same is generally true of the American cases. The principal cases in this State are of that character, and in all of them the particular contract before the court was sustained (Nobles v. Bates, 7 Cow. 307; Chappel V. Brockway, 21 Wend. 157; Dunlop v. Gregory, 10 N. Y. 241). In Alger v. Thacher (19 Pick. 51), the case was one of general restraint, and the court, construing the rule as inflexible that all contracts in general restraint of trade are void, gave judgment for the defendant. In Mitchel v. Reynolds, the court, in assigning the reasons for the distinction between a contract in general restraint of trade, and one limited to a particular place, says, "for the former of these must be void, being of no benefit to either party and only oppressive ; " and later on, "because in a great many instances they can be of no use to the obligee, which holds in all cases of general restraint throughout England, for what does it signify to a tradesman in London what another does in Newcastle, and surely it would be unreasonable to fix a cer- tain loss on one side without any benefit to the other." He refers to other reasons, viz. : The mischief which may aj'ise (1) to the party by the loss, by the obligor, of his livelihood and the subsistence of his family; and (2) to the public, by depriv- ing it of a useful member and by enabling corporations to gain control of the trade of the kingdom. It is quite obvious that some of these reasons are much less forcible now than when Mitchel v. Reynolds was decided. Steam and electricity have, for the purposes of trade and commerce, almost annihilated distance, and the whole world is now a mart for the distribution of the products of industry. The great diffusion of wealth and the restless activity of mankind striving 366 FORMATION OF CONTRACT. [Pakt II. to better their condition, has greatly enlarged the field of human enterprise and created a vast number of new industries, which give scope to ingenuity, and employment for capital and labor. The laws no longer favor the granting of exclusive privileges, and, to a great extent, business corporations are practically part- nerships, and may be organized by any persons who desire to unite their capital or skill in business, leaving a free field to all others who desire for the same or similar purposes to clothe themselves with a corporate character. The tendency of recent adjudications is marked in the direc- tion of relaxing the rigor of the doctrine that all contracts in general restraint of trade are void irrespective of special circum- stances. Indeed, it has of late been denied that a hard and fast rule of that kind has ever been the law of England (Bousillon v. Bousillon, L. R. 14 Ch. Div. 351). The law has, for centuries, permitted contracts in partial restraint of trade, when reasona- ble ; and in Horner v. Graves (7 Bing. 735), Chief Justice Tindal considered a true test to be " whether the restraint is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public." When the restraint is general, but at the same time is coextensive only with the interest to be pro- tected, and with the benefit meant to be conferred, there seems to be no good reason why, as between the parties, the contract is not as reasonable as when the interest is partial and there is a corresponding partial restraint. And is there any real public interest which necessarily condemns the one and not the other? It is an encouragement to industry and to enterprise in building up a trade, that a man shall be allowed to sell the good will of the business and the fruits of his industry upon the best terms he can obtain. If his business extends over a continent, does public policy forbid his accompanying the sale with a stipulation for restraint coextensive with the business which he sells? If such a contract is permitted, is the seller any more likely to become a burden on the public than a man who, having built up a local trade only, sells it, binding himself not to carry it on in the locality? Are the opportunities for employment and for the exercise of useful talents so shut up and hemmed in that the Chap. V. § 1.] LEGALITY OF OBJECT. 367 public is likely to lose a useful member of society in the one case and not in the other? Indeed, what public policy requires is often a vague and difficult inquiry. It is clear that public policy and the interests of society favor the utmost freedom of con- tract, within the law, and require that business transactions should not be trammeled by unnecessary restrictions. "If," said Sir George Jessel, in Printing Company v. Sampson, L. E. 19 Eq. Cas. 462, " there is one thing more than any other which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that contracts when entered into freely and, voluntarily, shall be held good, and shall be enforced by courts of justice." It has sometimes been suggested that the doctrine that con- tracts in general restraint of trade are void, is founded in part upon the policy of preventing monopolies, which are opposed to the liberty of the subject, and the granting of which by the king under claim of royal prerogative led to conflicts memorable in English history. But covenants of the character of the one now in question operate simply to prevent the covenantor from engag- ing in the business which he sells, so as to protect the purchaser in the enjoyment of what he has purchased. To the extent that the contract prevents the vendor from carrying on the particular trade, it deprives the community of any benefit it might derive from his entering into competition. But the business is open to all others, and there is little danger that the public will suffer harm from lack of persons to engage in a profitable industry. Such contracts do not create monopolies. They confer no special or exclusive privilege. If contracts in general restraint of trade, where the trade is general, are void as tending to monopolies, contracts in partial restraint, where the trade is local, are subject to the same objection, because they deprive the local community of the services of the covenantor in the particular trade or call- ing, and prevent his becoming a competitor with the covenantee. We are not aware of any rule of law which makes the motive of the covenantee the test of the validity of such a contract. On the. contrary, we suppose a party may legally purchase the trade and business of another for the very purpose of preventing com- petition, and the validity of the contract, if supported by a con- 368 FORJIATION OF CONTRACT. [Past U, sideration, will depend upon its reasonableness as between the parties. Combinations between producers to limit production and to enhance prices, are or may be unlawful, but they stand on a different footing. We cite some of the cases showing the ten- dency of recent judicial opinion on the general subject. Wkitta- ker v. Howe, 3 Beav. 383; Jones v. Lees, 1 Hurl. & N. 189; Boussillon v. RoussiUon, supra; Leather Co. v. Lorsont, L. E. 9 Eq. Cas. 345; Collins v. Locke, L. K. 4 App. Cas. 674; Oregon Steam Co. v. Winsor, 20 Wall. 64; Morse y. Morse, 103 Mass. 73. In Whittaker v. Howe, a contract made by a solicitor not to practice as a solicitor " in any part of Great Britain, " was held yalid. In Boussillon v. RoussiUon, a general contract not to engage in the sale of champagne, without limit as to space, was enforced as being under the circumstances a reasonable contract. In Jones v. Lees, a covenant by the defendant, a licensee under a patent that he would not during the license make or sell any slub- bing machines without the invention of the plaintiff applied to them, was held valid. Bramwell, J., said: "It is objected that the restraint extends to all England, but so does the privilege.'' In Oregon Steam Co. v. Winsor, the court enforced a covenant by the defendant, made on the purchase of a steamship, that it should not be run or employed in the freight or passenger busi- ness upon any waters in the State of California for the period of ten years. In the present state of the authorities we think it cannot be said that the early doctrine that contracts in general restraint of trade are void, without regard to circumstances, has been abro- gated. But it is manifest that it has been much weakened, and that the foundation upon which it was originally placed has, to a considerable extent at least, by the change of circumstances, been removed. The covenant in the present case is partial and not general. It is practically unlimited as to time, but this, under the authori- ties, is not an objection, if the contract is otherwise good. Ward V. Byrne, 6 M. & W. 548; Mumford v. Gething, 7 C. B. (N. S.), 305, 317. It is limited as to space since it excepts the State of Nevada and the Territory of Montana from its operation, and therefore is a partial and not a general restraint, unless, as eHAP. V. § 1.] LEGALITY OF OBJECT. 369 claimed by the defendant, the fact that the covenant applies to the whole of the State of New York constitutes a general restraint within the authorities. In Chappel v. Brockway, supra, Bronson, J., in stating the general doctrine as to contracts in restraint of trade, remarked that " contracts which go to the total restraint of trade, as that a man will not pursue his occupation anywhere in the State, are void." The contract under consideration in that case was one by which the defendant agreed not to run or be interested in a line of packet boats on the canal between Eoch- ester and Buffalo. The attention of the court was not called to the point whether a contract was partial, which related to a business extending over the whole country, and which restrained the carrying on of business in the State of New York, but ex- cepted other States from its operation. The remark relied upon was obiter, and in reason cannot be considered a decision upon the point suggested. "We are of the opinion that the contention of the defendant is not sound in principle, and should not be sustained. The boundaries of the States are not those of trade and commerce, and business is restrained within no such limit. The country, as a whole, is that of which we are citizens, and our duty and allegiance are due both to the State and nation. Nor is it true, as a general rule, that a business established here cannot extend beyond the State, or that it may not be success- fully established outside of the State. There are trades and employments which, from their nature, are localized ; but this is not true of manufacturing industries in general. We are unwill- ing to say that the doctrine as to what is a general restraint of trade depends upon State lines, and we cannot say that the ex- ception of Nevada and Montana was colorable merely. The rule itself is arbitrary, and we are not disposed to put such a con- struction upon this contract as will make it a contract in general restraint of trade, when upon its face it is only partial. The case of Oregon Steam Go. v. Winsor {supra) supports the view that a restraint is not necessarily general which embraces an entire State. The defendant entered into the covenant as a con- sideration in part of the purchase of his property by the Swift & Courtney & Beecher Company, presumably because he considered it for his advantage to make the sale. He realized a large sum 370 FORMATION OF CONTRACT. [Paet U. in money, and on the completion of the transaction became interested as a stockholder in the very business which he had sold. We are of opinion that the covenant, being supported by a good consideration, and constituting a partial and not a general restraiat, and being, in view of the circumstances disclosed, reasonable, is valid and not void. In respect to the second general question raised, we are of opinion that the equitable jurisdiction of the court to enforce the covenant by injunction, was not excluded by the fact that the defendant, in connecton with the covenant, executed a bond for its performance, with a stipulation for liquidated damages. It is, of course, competent for parties to a covenant to agree that a fixed sum shall be paid in case of a breach by the party in de- fault, and that this should be the exclusive remedy. The inten- tion in that case would be manifest that the payment of the penalty should be the price of non-performance, and to be accepted by the covenantee in lieu of performance. Plicenix Ins. Co. v. Continental Ins. Co., 87 N. Y. 400, 405. But the taking of a bond in connection with a covenant does not exclude the jurisdic- tion of equity in a case otherwise cognizable therein, and the fact that the damages in the bond are liquidated, does not change the rule. It is a question of intention, to be deduced from the whole instrument and the circumstances ; and if it appear that the performance of the covenant was intended, and not merely the payment of damages in case of a breach, the covenant will be enforced. It was said in Long v. Bowring (33 Beav. 685), which was an action in equity for the specific performance of a covenant, there being also a clause for liquidated damages, " all that is settled by this clause is that if they bring an action for damages the amount to be recovered is £1000, neither more nor less." There can be no doubt upon the circumstances in this case that the parties intended that the covenant should be performed, and not that the defendant might at his option repur- chase his right to manufacture and sell matches on payment of the liquidated damages. The right to relief by injunction in similar contracts is established by numerous cases. Phoenix Ins. Co. V. Continental Ins. Co., supra; Jjong v. Bowring, supra; Howard v. Woodward, 10 Jur. N. S. 1123; Coles v. Sims, 5 De Chap. V. § 1.] -UEGALIXy OF OBJECT. 371 G., McN. & G. 1; Avery v. Langford, Kay's Ch. 663; Whittaker V. Howe, supra; Hubbard v. Miller, 27 Mich. 15. There are some subordinate questions which -will be briefly noticed. First. The plaintiff, as successor of the Swift & Courtney & Beecher Company, and as assignee of the covenant, can maintain the action. The obligation runs to the Swift & Courtney & Beecher Company, "its successors and assigns." The covenant was in the nature of a property-right and was assignable, at least it was assignable in connection with a sale of the property and business of the assignors. Hedge v. Lowe, 47 Iowa, 137, and cases cited. Second. The defendant is not in a position which entitles him to raise the question that the contract with the Swift & Courtney & Beecher Company was ultra vires the powers of that corporation. He has retained the benefit of the contract and must abide by its terms. Whitney Arms Co. v. Barlow, 68 N. Y. 34. Third. The fact that the plaintiff is a foreign corpo- ration is no objection to its maintaining the action. It would be repugnant to the policy of our legislation, and a violation of the rules of comity, to grant or withhold relief in our courts upon such a discrimination. Merrick v. Van Santvoord, 34 N. Y. 208; Hibernia Nat. Bank v. Lacombe, 84 Id. 367; Code Civ. Pro. § 1779. Fourth. The consent of the Swift & Courtney & Beecher Company to the purchase by the defendant of the busi- ness of Brueggemann did not relieve the defendant from his covenant. That transaction was in no way inconsistent there- > with. Brueggemann was selling matches manufactured by the company, under an agreement to deal in them exclusively. There are some questions on exceptions to the admission and exclusion of evidence. None of them present any question re- quiring a reversal of the judgment. There is no error disclosed by the record and the judgment should, therefore, be affirmed. All concur, except Peckham, J., dissenting. Judgment affirmed.* > "The latest decisions of courts in this country and in England show a strong tendency to very greatly circumscribe and narrow the doctrine of avoiding contracts in restraint of trade. The courts do not go to the length 372 FORMATION OF CONTRACT. [Pabt H. BISHOP V. PALMER.» 146 MASSACHUSETTS, 469. — 1888. [Reported herein at p. 880.] SANTA CLARA &c. CO. v. HAYES. 76 CALIFORNIA, 387. — 1888. [Beported herein at p. 876.] of saying that contracts which they now would say are in restraint of trade are, nevertheless, valid contracts, and to be enforced ; they do, however, now hold many contracts not open to the objection that they are in restraint. of trade which a few years back would have been avoided on that sole ground both here and in England. The cases in this court, which are the latest manifestations of the turn in the tide, are cited in the opinion of this case at General Term, and are Diamond Match Co. v. Boeber, 106 N. Y. 473 ; Hodge v. Sloan, 107 N. Y. 244 ; Leslie v. Lorillard, 110 N. Y. 519." — Peck- ham, J., in Matthews v. Associated Press, 136 N. Y. 333, 340. " While the law, to a certain extent, tolerates contracts in restraint of trade or business when made between vendor and purchaser and will uphold them, they are not treated with special indulgence. They are intended to secure to the purchaser of the good will of a trade or business a guaranty against the competition of the former proprietor. "When this object is accom- plished it wiU not be presumed that more was intended." — Maynard, J., in Greenfield v. Gilman, 140 N. Y. 168, 173. " In the instance of business of such character that it presumably cannot ' be restrained to any extent whatever without prejudice to the public interest, courts decline to enforce or sustain contracts imposing such restraint, how- ever partial, because in contravention of public policy. This subject is much considered, and the authorities cited in West Virginia Transportation Co. v. Ohio Jiiver Pipe Line Co., 22 West Va. 600 ; Chicago Gas &c. Co. v. People's Gas Co., 121 Illinois, 530 ; Western Union Telegraph Co. v. American Union Telegraph Co. , 65 Georgia, 160. " — Mr. Chief Justice Fuller, in Qibis v. Con- solidated Gas Co., 130 U. S. 396, 408, 409. See also Richards v. American Desk &o. Co. (Wis.) , 58 N. W. Rep. 787 ; Santa Clara &c. Co. v. Hayes, 76 Cal. 387, posJ, p. 376. 1 See also Gamewell Fire Alarm Tel. Co. v. Crane, 160 Mass. 50. Chap. V. § 2.] LEGALITY OF OBJECT. 373 § 2. Effect of illegality upon contracts in which it eadats. (i.) When the contract is divisible. ERIE RAILWAY CO. v. UNION LOCOMOTIVE AND EXPRESS CO. 35 NEW JERSEY LAW, 240. — 1871. This suit was in case on promises. Defendants demurred gen- erally to the whole declaration, and there was a joinder. Bbaslby, C. J. Upon the argument before this court, the counsel for the defendants relied chiefly, in support of the demurrer, upon the proposition that the stipulation contained in the article of agreement, which gave to the plaintiffs the exclusive right to carry locomotives and tenders on trucks over the Erie road, was illegal. The principle that, as common carriers, the defendants were bound to exercise their office with perfect impar- tiality, in behalf of all persons who apply to them, and that, practicing this public employment, they cannot discharge them- selves, by contract, from the obligation, was appealed to in support of this position. The agreement between these parties was, in short, this : The firm of Kasson & Company, who were the assignors of the plain- tiffs, the Union Locomotive and Express Company, agreed to pro- vide "cars and trucks sufficient in size, strength, weight, and capacity whereon to carry all locomotive engines and tenders," and that they would be at flie expense of loading and unloading the same; and for the motive power, which was to be supplied by the Erie Railway Company, the defendants, and for the unusual wear and strain of their railway, a certain compensation, which was stated in said articles of agreement, was promised to be paid. On their side, the Erie Railway Company agreed, in addition to the stipulations for providing motive power and giving the use of the road, that the cars of the assignors of plaintiffs should be the only cars employed in the transportation of locomotive engines and tenders. It is this last provision which gives rise to the objection already stated. It is insisted this stipulation gives the plaintiffs the exclusive control, on their own terms, of this branch of business ; that it precludes all competition, and being the grant of a monopoly, is inconsistent with the purpose and 374 FORMATION OF CONTRACT. [Part II. objects of the charter of the defendants, and with their character as common carriers. The question thus presented is one of much importance, and it should not, consequently, be decided except when it shall be an element essential to the judgment of the court in the particular case. That it is not such an element, on the present occasion, is obvious, for, let it be granted that the pro- vision in question is illegal, and therefore void, still such con- cession cannot, in the least degree, impair the plaintiffs' right of action. The suit is not for a breach of this promise of the defendants, that no other cars but those of the plaintiffs shall be employed in this branch of the carrying business, but it is for the refusal of the defendants to permit the plaintiffs to transport locomotives and tenders, according to their contract, over the railway of the Erie Company. This latter stipulation, the viola- tion of which forms the ground of action, is distinct and entirely separable from the former one, in which it is alleged the illegality before mentioned exists. Admitting, then, for the purpose of the argument, the ille- gality insisted on, the legal problem plainly is this: whether, when a defendant has agreed to do two things, which are entirely distinct, and one of them is prohibited by law, and the other is legal and unobjectionable, such illegality of the one stipulation can be set up as a bar to a suit for a breach of the latter and valid one. This point was but slightly noticed on the argument; nevertheless, an examination of the authorities will show that the rule of law upon the subject has, from the earliest times, been at rest. It was unanimously agreed, in a case reported in the Year Books, 14 Henry VIII. 25, 26, that if some of the covenants of an indenture, or of the conditions indorsed upon a bond, are against law, and some good and lawful, that in such case, the covenants or conditions which are against law are void ab initio, and the others stand good. And from that day to this, I do not know that this doctrine, to the extent of its applicability to this case, has anywhere been disallowed. It was the ground of the judgment in Chesman v. Nainhy (2 Lord Ray- mond, 1456), that being a suit on an apprentice's bond. The stipulation alleged to have been broken was, that the apprentice would not carry on the business in which she was to be ins,truoted. Chap. V. § 2.] LEGALITY OF OBJECT. 376 within "the space of half a mile" of the then dwelling-house of the plaintiff. There was also a further stipulation that she should not carry on this business within half a mile of any house into which the plaintiff might remove. The suit was for a breach of the former stipulation, and it was admitted that the latter one was void, as imposing an unreasonable restraint on trade, and it was urged that, by force of this illegal feature, the whole contract was void. But the court were unanimously of opinion that as the breach was assigned upon that part of the condition which was good in law, therefore if the other part, to which exception was taken, was against law, yet that would not hinder the recovery upon part of the condition which was legal. The judgment was afterwards affirmed by the twelve judges, on an appeal to Parliament. 3 Bro. Pari. c. 349. This rule of law was treated as settled, and was similarly applied in the modern cases of Mallan v. May, 11 M. & W. 653, and Price v. Green, 16 M. & W. 346. This same legal principle will be found to be discussed and illustrated by different applica- tions in the following decisions: GaskellY. King, 11 East, 165; 15 lb. 440; mcholls v. Stretton, 10 Adol. & El. N. S. 346; Chester V. Freeland, Ley E. 79 ; Sheerman v. Thompson, 11 Adol. & El. 1027. These and other authorities which might be referred to, settle the rule, that the fact that one promise is illegal will not render another disconnected promise void. The doctrine will not embrace cases where the objectionable stipulation is for the performance of an immoral or criminal act, for such an ingredient will taint the entire contract, and render it unenforceable in all its parts, by reason of the maxim ex turpi causa non oritur actio. Nor will it, in general, apply where any part of the consideration is illegal, so that in the present case, if, upon the trial, it should appear that the plaintiffs have agreed to pay to the defendants more than the charter of the latter allows, it may become a ques- tion whether this suit will lie. There are many decisions to the effect that where there are a number of considerations, and any one of them is illegal, the whole agreement is avoided, this doc- trine being put upon the ground of the impossibility of saying how much or how little weight tha void portion may have had as 376 FORMATION OF CONTRACT. [Part IL an inducement to the contract. But, at the present stage of the cause, the entire consideration of the promise sued on must be regarded by the court as unobjectionable, as there is nothing on the record to show any overcharge. On the ground, then, that both the consideration and the promise, which is the foundation of the action, appear to be valid, the plaintiffs must have judgment on this demurrer. It is proper to remark that as the demurrer is a general one to the whole declaration, I have considered only the cause of action set out in the first count. Judgment for plaintiffs.* SANTA CLAEA VALLEY MILL AND LUMBER CO. v. HAYES et al. 76 CALIFORNIA, 387. — 1888. Action for damages for breach of contract. Judgment for defendants. Plaintiff appeals. Defendants agreed to make and deliver to plaintiff during the year 1881 two million feet of lumber at eleven dollars per thou- sand, and not to manufacture any lumber to be sold during that period in the counties of Monterey, San Benito, Santa Cruz, or Santa Clara, except under the contract, and to pay plaintiff twenty dollars per thousand feet for any lumber so sold to others than plaintiff. This contract was a part of a scheme by which plaintiff got possession by ownership or lease of all the saw-mills in the vicinity of Felton, and shut down several of them to limit the supply of lumber, and to give plaintiff the control of that business. Seakles, C. J. . . . The contract was void as being against public policy, and the defendants, as they had a right to do, repudiated the contract. Plaintiff, who has parted with nothing 1 Accord : United States v. Bradley, 10 Pet. 343, 360-364 ; Gelpcke v. Du- buque, 1 WaU. (U. S.) 221 ; Oregon Steam Nav. Co. v. Winsor, 20 Wall. (U. S.) 64 ; Dean v. Emerson, 102 Mass. 480 ; Peltz v. Eichele, 62 Mo. 171 ; Smith's Appeal, 113 Pa. St. 579. Contra: Lindsay v. Smith, 78 N. C. 328. Chap. V. § 2.] LEGALITY OF OBJECT. 377 of value, now seeks to recover damages for non-delivery of lumber under this contract. Plaintiff had an undoubted right to purchase any or all the lumber it chose, and to sell at such prices and places as it saw fit, but when as a condition of purchase it bound its vendor not to sell to others under a penalty, it transcended a rule the adoption of which has been dictated by the experience and wisdom of ages as essential to the best interests of the com- munity, and as necessary to the protection alike of individuals and legitimate trade. With results naturally flowing from the laws of demand and supply, the courts have nothing to do, but when agreements are resorted to for the purpose of taking trade out of the realm of competition, and thereby enhancing or depressing prices of com- modities, the courts cannot be successfully invoked, and their execution will be left to the volition of the parties thereto.^ It is claimed by appellant that the contract is divisible, and the first part can stand though the latter be illegal. If the whole vice of the contract was embodied in the promise of the defendants not to sell lumber to other persons, the illegality would lie in the promise alone, and it might be contended with great force that this promise was divisible from the agreement to sell. Under the findings of the court, however, the illegality inheres in the consideration. The very essence and mainspring of the agreement — the illegal object — " was to form a combination among all the manufacturers of lumber at or near Felton for the sole purpose of increasing the price of lumber, limiting the amount thereof to be manufactured, and give plaintiff control of all lumber manufactured," etc. This being the inducement to the agreement, and the sole object in view, it cannot be separated and leave any subject matter capable of enforcement, as was done in Granger v. Empire Co., 59 Cal. 678; Treadwell v. Davis, 34 Cal. 601; and Jackson v. Shawl, 29 Cal. 267. The case falls within the rule of Valentine v. Stewart, 15 Cal. 404; Frost v. More, 40 Cal. 348; More v. Bonnet, 40 Cal. 251; Forbes v. McDonald, 54 Cal. 98; Arnot v. Piitston and Elmira Coal Co., 68 N. Y. 559. 1 See also Oliver v. Gilmore, 52 Fed. Rep. 562. 378 FORMATION OF CONTRACT. [Paet II. The good cannot be separated from the bad, or rather the bad enters into and permeates the whole contract, so that none of it can be said to be good, and therefore the subject of an action. . . . The judgment of the court below is aflSrmed.' (it.) When the contract is indivisible. BIXBY V. MOOE. 51 NEW HAMPSHIRE, 402. — 1871. Assumpsit, by Joseph C. Bixby against Moor & Gage, to recover pay for services rendered by the plaintiff for the defend- ants from October 1, 1861, to December 20, 1863. The defendants kept a bUliard saloon and bar. The sale of liquor was illegal. The plaintiff was employed by the defendants to work generally in and about the saloon, but there was no special agreement that he should or should not sell liquors. He opened the saloon, built fires, took care of billiard tables, waited on customers at the bar, and in the absence of defendants had the whole charge of the business. Smith, J. The plaintiff would have been entitled to the reasonable worth of his entire services, if no part of them had been rendered in an illegal business. It must be conceded that he cannot recover for his services in the sale of liquor; but he claims that a portion of his services was rendered in a legal employment, and that he can recover the value of that portion. The defendants contend that no part of the services was rendered in a legal business, arguing that the keeping of the billiard tables was so far connected with and in furtherance of the liquor traffic, that it must be regarded as part and parcel of the same, falling under the same legal condemnation. Whether the latter position is well founded would seem to be a question of fact ; but it need not be considered here, for we are of opinion that, even if part of the business was lawful, still the plaintiff cannot recover. If the consideration for the defendants' promise to pay the plaintiff a reasonable compensation was the plaintiff's promise to 1 Accord : Lindsay v. Smith, 78 N. C. 328. Chap. V. § 2.] LEGALITY OF OBJECT. 379 perform both classes of services, the illegal as well as the legal, it is clear that the defendants' promise could not be enforced. A contract is invalid if any part of the consideration on either side is unlawful. See Metcalf on Contracts, 216-219. What the mutual promises were is a question of fact. The parties do not appear to have fully expressed in language the precise nature of the various services to be performed by the plaintiff, nor to have made any verbal bargain as to the mode of payment. In such cases it is sometimes said that " the law implies an agreement " as to the matters omitted to be explicitly stated in the verbal bargain. Strictly speaking, this is inaccurate. The agreement, though not fully expressed in words, is, nevertheless, a genuine agreement of the parties ; it is " implied " only in this, that it is to be inferred from the acts or conduct of the parties instead of from their spoken words ; " the engagement is signified by con- duct instead of words." But acts intended to lead to a certain inference may " express a promise as well as words would have done." The term "tacit contract," suggested by Mr. Austin, describes a genuine agreement of this nature better than the phrase " an implied contract " ; for the latter expression is some- times used to designate legal obligations, which, in fact, are not contracts at all, but are considered so only by a legal fiction for the sake of the remedy. See Austin on Jurisprudence (3d ed.), 1018, 946; Am. Law Review, Vol. 5, pp. 11, 12; Metcalf on Con- tracts, 5, 6, 9, 10, 163, 164; Edinburgh Review, American reprint. Vol. 118, p. 239. The questions arising in this case — What services did the plaintiff agree to perform? was it an entire contract? were there separate contracts, upon separate considerations, as to the legal and the illegal services? — are all questions of fact depending upon the mutual understanding of the parties ; and if the nature of the agreed facts is such as to allow of a finding either way, it would be proper to submit the questions to a jury. In the pres- ent case, however, there is room for but one conclusion, namely, that the agreement was that the plaintiff, at the defendants' request, should perform all the services which he did in fact perform, and that the defendants, in consideration of the promise to perform (and the performance of) all those services, the illegal 380 FORMATION OF CONTRACT. [Part II. as well as the legal, should pay the plaintiff the reasonable worth of the entire services. In other words, the plaintiff made an entire promise to perform both classes of services; this entire promise (and the performance thereof) formed an entire consid- eration for the defendants' promise to pay; and a part of this indivisible consideration was illegal. Walker v. Lovell (28 N. H. 138) and Carleton v. Woods (28 N. H. 290), cited by the plaintiff, are not in point. In those cases the different articles sold were valued separately in the sale. If the plaintiff had performed a class of services for each of which it is customary to pay a sepa- rate price (see, for instance, Bohinson v. Green., 3 Metcalf, 159), the nature of the various services so performed might afford ground for the conclusion that the parties contemplated a separate payment for each service rendered. But it is not contended that it is customary to pay saloon-tenders separate prices for sweep- ing, for building fires, for acting as billiard markers, and for selling liquor. In accordance with the provisions of the agreed case, unless the plaintiff elects trial by jury, there must be Judgment for the defendants.* BISHOP V. PALMER et al. 146 MASSACHUSETTS, 469. — 1888. Contract. Demurrer sustained. Plaintiff appeals. Defend- ants purchased plaintiff's business for $6000, the plaintiff agree- ing to transfer to defendants his business at A and his business at B, and covenanting not to engage in the first business again anywhere for five years, or in the second, at B for five years, or to purchase any material from the rival concerns at B. C. Allen, J. The defendants' promise which is declared on was made in consideration of the sale and delivery of the busi- ness, plant, property, and contracts of the plaintiff, and of his faithful performance of the covenants and agreements contained 1 See also Handy v. St. Paul Globe Co., 41 Minn. 188, ante, p. 318 ; Foley V. Speir, 100 N.Y. 552. Cf. Shaw v. Carpenter, 54 Vt. 155. Chap. V. §2.] LEGALITY OF OBJECT. 381 in the written instrument signed by the parties. The parties made no apportionment or separate valuation of the different elements of the consideration. The business, plant, property, contracts, and covenants were all combined as forming one entire consideration. There is no way of ascertaining what valuation was put by the parties upon either portion of it. There is no suggestion that there was any such separate valuation, and any estimate which might now be put upon any item would not be the estimate of the parties. It is contended by the defendants that each one of the three particular covenants and agreements into which the plaintiff entered is illegal and void, as being in restraint of trade. It is sufiicient for us to say that the first of them is clearly so; it being a general agreement, without any limitation of space, that for and during the period of five years he will not, either directly or indirectly, continue in, carry on, or engage in the business of manufacturing or dealing in bed-quilts or comfortables, or of any business of which that may form any part. This much is virtually conceded by the plaintiff, and so are the authorities. Taylor v. Blanchard, 13 Allen, 370; Dean v. Emerson, 102 Mass. 480; Morse Twist Drill Co. v. Morse, 103. Mass. 73; Alger v. Timelier, 19 Pick. 51; Oregon Steam Navigation Co. v. Winsor, 20 Wall. 64; Davies v. Davies, 36 Ch. D. 359; 2 Kent Com. 466, note e; Met. Con. 232. Two principal grounds on which such contracts are held to be void are, that they tend to deprive the public of the services of men in the employments and capacities in which they may be most useful, and that they expose the public to the evils of monopoly. Alger v. Thacher, ubi supra. The question then arises, whether an action can be supported upon the promise of the defendants, founded upon such a consid- eration as that which has been described. As a general rule, where a promise is made for one entire consideration, a part of which is fraudulent, immoral, or unlawful, and there has been no apportionment made or means of apportionment furnished by the parties themselves, it is well settled that no action will lie upon the promise. If the bad part of the consideration is not severable from the good, the whole promise fails. Bobinson v. 382 FORMATION OF CONTKACT. [Pabt U. Oreen, 3 Met. 159, 161; Band v. Mather, 11 Gush. 1; Woodruff Y. Wentworth, 133 Mass. 309, 314; Bliss v. Negus, 8 Mass. 46, 51; Clark V. Richer, 14 N. H. 44; Woodruff v. Hinman, 11 Vt. 592; Pickering v. Ilfracombe Railway, L. E. 3 C. P. 235, 250; Sar- rington v. Ficto?-ia Graving Dock Co., 3 Q. B. D. 549; 2 (7Mt. Con. (11th Am. ed.) 972; Leake, Con. 779, 780; Pollock, Con. 321; Jllfet. Con. 247. It is urged that this rule does not apply to a stipulation of this character, which violates no penal statute, which contains nothing malum in se, and which is simply a promise not en- forceable at law. But a contract in restraint of trade is held to be void because it tends to the prejudice of the public. It is therefore deemed by the law to be not merely an insufficient or invalid consideration, but a vicious one. Being so, it rests on the same ground as if such contracts were forbidden by positive statute. They are forbidden by the common law, and are held to be illegal. 2 Kent Com. 466; Met. Con. 221; 2 Chit. Con. 974; White v. Buss, 3 Gush. 448, 450; Hyndsv. Hays, 25 Ind. 31, 36. It is contended that the defendants, by being unable to enforce the stipulation in question, only lose what they knew or were bound to know was legally null; that they have all that they supposed they were getting, namely, a promise which might be kept, though incapable of legal enforcement; and that if they were content to accept such promise, and if there is another good and sufficient consideration, they may be held upon their prom- ise. But this argument cannot properly extend to a case where a part of an entire and inseparable consideration is positively vicious, however it might be where it was simply invalid, as in Parish V. Stone, 14 Pick. 198. The law visits a contract founded on such a consideration with a positive condemnation, which it makes effectual by refusing to support it, in whole or in part, where the consideration cannot be severed. The fact that the plaintiff had not failed to perform his part of the contract does not enable him to maintain his action. An illegal consideration may be actual and subst^/ntial and valuable; but it is not in law sufficient. The plaintiff further suggests that, if the defendants were to Chap. "V. § 2.] LEGALITY OF OBJECT. 383 sue him on this contract, they could clearly, so far as the ques- tion of legality is concerned, maintain an action upon all its parts, except possibly the single covenant in question. Mallan V. May, 11 M. & W. 653; Green v. Price, 13 M. &. W. 695; S. C. 16 M. & W. 346. This may be so. If they pay to the plaintifE the whole sum called for by the terms of the contract, it may well be that they can call on him to perform all of his agreements except such as are unlawful. In such case, they would merely waive or forego a part of what they were to receive, and recover or enforce the rest. It does not, however, follow from this that they can be compelled to pay the sum promised by them, when a part of the consideration of such promise was illegal. They are at liberty to repudiate the contract on this ground; and, having done so, the present action founded on the contract can- not be maintained ; and it is not now to be determined what other liability the defendants may be under to the plaintifE, by reason of what they may have received under the contract. Judgment af&rmed. (ui.) Comparative effect of avoidance and illegality. HAEVEY V. MEEEILL. 150 MASSACHUSETTS, 1. — 1889. Contract to recover for losses incurred by the plaintiffs, in the purchase and sale of pork on the Chicago Board of Trade for the defendants, and for their commissions as brokers. The case was referred to an auditor. The auditor found for the defendants, on the ground that, under the guise of contracts, the real intent was to speculate on the rise and fall of prices, and not to receive or deliver the actual commodities, and therefore that the con- tracts were wagers. At the trial, the auditor's report was the only evidence introduced, and the court directed a verdict for the plaintiffs. Defendants alleged exceptions. Field, J. The rights of the parties are to be determined by the law of Illinois, but there is no evidence that the common law of Illinois differs from that of Massachusetts. We cannot 384 FORMATION OF CONTRACT. [Part II. take notice of the statutes of Illinois, except so far as they are set out in the auditor's report; and the auditor has set out but one statutory provision of that State, and has found that the parties have not acted in violation of that. We are therefore to determine whether the contract between the parties, as the audi- tor has found it to be, is illegal and void by the common law of Massachusetts. It is not denied that, if, in a formal contract for the purchase and sale of merchandise to be delivered in the future at a fixed price, it is actually the agreement of the parties that the mer- chandise shall not be delivered and the price paid, but that, when the stipulated time for performance arrives, a settlement shall be made by a payment in money of the difference between the contract price and the market price of the merchandise at that time, this agreement makes the contract a wagering contract. If, however, it is agreed by the parties that the contract shall be performed according to its terms, if either party requires it, and that either party shall have a right to require it, the contract does not become a wagering contract, because one or both of the parties intend, when the time for performance arrives, not to require performance, but to substitute therefor a settlement by the payment of the difference between the contract price and the market price at that time. Such an intention is immaterial, ex- cept so far as it is made a part of the contract, although it need not be made expressly a part of the contract. To constitute a wagering contract, it is sufficient, whatever may be the form of the contract, that both parties understand and intend that one party shall not be bound to deliver the merchandise and the other to receive it and to pay the price, but that a settlement shall be made by the payment of the difference in prices. The construction which we think should be given to the audi- tor's report is, that he finds that the contracts which the plain- tiffs made on the board of trade with other members of that board, w§re not shown to be wagering contracts, and that the contract which the defendants made with the plaintiffs was, that the defendants should give orders, from time to time, to the plaintiffs for the purchase and the sale on account of the defend- ants of equal amounts of pork to be delivered in the future ; that Chap. V. §20 LEGALITY OF OBJECT. 385 the plaintiffs should, in their own names, make these purchases and these sales on the board of trade ; that the plaintiffs should, at or before the time of delivery, procure these contracts to be set off against each other, according to the usages of that board; that the defendants should not be required to receive any pork and pay for it, or to deliver any pork and receive the pay for it, but should only be required to pay to the plaintiffs, and should only be entitled to receive from them, the differences between the amounts of money which the pork was bought for and was sold for; and that the defendants should furnish a certain margin, and should pay the plaintiffs their commissions. The defendants gave orders in pursuance of this contract, the plaintiffs made the purchases and sales on the board of trade, set them off against each other, and now sue the defendants for the differences which they have paid, and for their commissions. The auditor has found that " in a vast majority of the transac- tions of the board of trade, settlement was made by the set-off of opposite contracts." In his supplemental report he says: " My conclusion is unchanged, that the parties to this suit entered into the dealings with each other which are the subject thereof with a clear understanding that actual deliveries were not con- templated and were not to be enforced; and it appears to me that the question whether the members of this board with whom the defendants dealt had such an understanding with each other, is jiot material to the issue of this case." The peculiarity of this case, according to the findings of the auditor is, that while the contracts which the plaintiffs made on the board of trade must be taken to be legal, the plaintiffs have undertaken to agree with the defendants that these contracts should not be enforced by or against them, except by settlements according to differences in prices. If such an agreement seems improbable, it is enough to say that the auditor has found that it was made. The usages of the board of trade were such that the plaintiffs might well think that they risked little or nothing in making such an agreement. Indeed, the distinction in prac- tice between the majority of contracts which by the auditor's report appear to be made and settled on the board of trade, and wagering contracts, is not very plain, and brokers, for the pur- 386 FORMATION OF CONTRACT. [Pari- U. pose of encouraging speculation and of earning commissions, might be willing to guarantee to their customers that the con- tracts made by them on the board of trade should not be enforced, except by a settlement, according to differences in prices. We do not see why the agreement between the plaintiffs and the defendants, that the defendants should not be required to receive or deliver merchandise, or to pay for or receive pay for merchandise, but should be required to pay to and to receive from the plaintiffs only the differences in prices is not, as be- tween the parties, open to all the objections which lie against wagering contracts. On the construction we have given to the auditor's report, the plaintiffs, in their dealings with the defend- ants, in some respects acted as principals. In making the con- tracts on the board of trade with other brokers, they may have been agents of the defendants. In agreeing with the defendants that they should not be compelled to perform or accept perform- ance of the contracts so made, the plaintiffs acted for them- selves as principals. If the defendants had made a contract with the plaintiffs to pay and receive the differences in the prices of pork ordered to be bought and sold for future delivery, with the understanding that no pork was to be bought or sold, this would be a wagering contract. On such a contract, the defendants would win what the plaintiffs lose, and the plaintiffs would win what the defendants lose. But so far as the defend- ants are concerned, the contracts which the auditor has found they made with the plaintiffs, are contracts on which they win or lose according to the rise or fall in prices, in the same manner as on wagering contracts. If the plaintiffs, by virtue of the contracts they made with other members of the board of trade, were bound to receive or deliver merchandise and. to pay or receive the price therefor, on the auditor's finding they must be held as against the defendants to have agreed to do these things on their own account, and that the defendants should only be bound to pay to them, and to receive from them, the differences in prices. If the defendants, as undisclosed principals, should be held bound to other members of the board of trade on the con- tracts made by the plaintiffs, the plaintiffs, by the terms of their employment, would be bound to indemnify the defendants, ex- Chap. V. § 2.] LEGALITY OF OBJECT. 387 cept so far as the contracts were settled, by a payment of differ- ences in prices. The agreement of the parties, as the auditor has found it, excludes any implied liability on the part of the defendants to indemnify the plaintiffs, except for money paid in the settlement of differences in prices. The position of the plaintiffs towards the defendants is no better than it would have been if the plaintiffs had been employed to make wagering con- tracts for pork on account of the defendants, and had made such contracts, because the plaintiffs, relying upon the usages of the board of trade, have undertaken to agree with the defendants that whatever contracts they make shall bind the defendants only as wagering contracts, and shall be settled as such. The plaintiffs contend that, even if the contracts which the defendants authorized them to make, and which they made on the board of trade, had been wagering contracts, yet they could recover whatever money they had paid in settlement of these contracts in the manner authorized by the defendants. In Thacker v. Hardy (4 Q. B. D. 685) the court found that the plaintiff was employed to make lawful contracts, and ruled that the understanding between the plaintiff and his customer, that the contract should be so managed that only differences in prices should be paid, did not violate the provisions of 8 & 9 Vict. c. 109, § 18. Lindley, J., in giving the opinion at the trial, said, p. 687: " What the plaintifE was employed to do was to buy and sell on the Stock Exchange, and this he did ; and everything he did was perfectly legal, unless it was rendered illegal as between the defendant and him- self by reason of the illegality of the object they had in view, or of the transactions in which they were engaged. Now if gaming and wagering were illegal, I should be of opinion that the illegality of the transactions in which the plaintifE and the defendant were engaged would have tainted, as between themselves, whatever the plaintiff had done in fur- therance of their illegal designs, and would have precluded him from claiming in a court of law any indemnity from the defendant in respect of the liabilities he had incurred. Cannan v. Bryce, 3 B. & Aid. 179 ; M'Kinnell v. Robinson, 3 M. & W. 434; Lyne v. Siesfield, 1 H. & N. 278. But it has been held that although gaming and wagering contracts can- not be enforced, they are not illegal. Fitch v. Jones (5 E. & B.), 238 is plain to that effect.'' 388 FORMATION OF CONTRACT. [Past U. On appeal, Brett, L. J., said, at p. 694: "It was further suggested in Cooper v. Neil (W. N. 1 June, 1878), that the agreement was, that although the plaintiff being broker to the defend- ant, but contracting in his own person as principal, should enter into real bargains, yet the defendant should be called upon only to pay the loss if the market should be unfavorable, and should receive only the profit if it proved favorable ; and that no further liability should accrue to the principal, whatever might become of the broker upon the Stock Exchange ; so that, as regarded the real principal, the defendant in the action, it should be a mere gambling transaction. I then considered that a transaction of that kind might fall within the provisions of 8 and 9 Vict. c. 109, § 18, but I thought that there was no evidence of it. And with respect to the present action, I say that there is no evidence that the bargain between the parties amounted to a transaction of that nature. I retract nothing from what I said in that case." In England, wagering contracts concerning stocks or mer- chandise are not illegal at common law, and all the judges in Thacker v. Hardy were of opinion that the facts in that case did not show that the transactions between the parties were in viola- tion of the statute. In Irwin v. WiUiar (110 U. S. 499, 510) the Supreme Court of the United States says of wagering contracts : "In England it is held that the contracts, although wagers, were not void at common law, and that the statute has not made them illegal, but only non-enforceable (Thacker v. Hardy, uhi supra); while generally, in this country, all wagering contracts are held to be illegal and void as against public policy. Dickson's Executor v. Thomas, 97 Penn. St. 278 ; Oregwry v. Wendell, 40 Mich. 432 ; Lyon v. Culbertson, 83 III. 33 ; Melchert V. American Union Telegraph Co., 3 MoCrary, 521 ; S. C. 11 Fed. Rep. 193 and note ; Barnard v. Backhaus, 52 Wis. 593 ; Kingsbury v. Kirwan, 77 N. Y. 612 ; Story v. Salomon, 71 N. Y. 420; Love v. Harvey, 114 Mass. 80." In considering how far brokers would be affected by the illegality of contracts made by them, that court says: "It is certainly true that a broker might negotiate such a contract without being privy to the illegal intent of the principal parties to it which renders it void, and in such a case, being innocent of any violation of law, and not saing to enforce an unlawful contract, has a meritorious ground for the recovery of compensation for services and advances. But we are also of the opinion that when the broker is privy to the unlawful designs of the parties, and brings them together for the very purpose of Chap. V. § 2.] LEGALITY OF OBJECT. 889 entering into an illegal agreement, he is particeps criminis, and cannot recover for services rendered or losses incurred by himself on the behalf of either in forwarding the transaction." This was decided in Umbrey v. Jemison, 131 U. S. 336. See also Sahn v. Walton (Ohio, 1888), 20 N. E. Eep. 203; Cothran v. JEUis, 125 111. 496; Fareirav. Qabell, 89 Penn. St. 89; Crawford V. Spencer, 92 Mo. 498; Lowry v. Dillman, 69 Wis. 197; White- sides V. Hunt, 97 Ind. 191; First National Bank v. OsTcaloosa Packing Co., 66 Iowa, 41; Rumsey v. Berry, 65 Maine, 570. It is not denied that wagering contracts are void by the com- mon law of Massachusetts; but it is argued that they are not illegal, and that, if one pays money in settlement of them at the request of another, he can recover it of the person at whose request he pays it. It is now settled here, that contracts which are void at common law, because they are against public policy, like contracts which are prohibited by statute, are illegal as well as void. They are prohibited by law because they are considered vicious, and it is not necessary to impose a penalty in order to render them illegal. Bishop v. Palmer, 146 Mass. 469; Gfibbs y: Consolidated Oas Co., 130 U. S. 396. The weight of authority in this country is, we think, that brokers who knowingly make con- tracts that are void and illegal as against public policy, and advance money on account of them at the request of their princi- pals, cannot recover either the money advanced or their commis- sions, and we are inclined to adopt this view of the law. Embrey V. Jemison, 131 U. S. 336, ubi supra, and the other cases there cited. We are of opinion that the instruction of the presiding justice, that on the auditor's report the plaintiffs were entitled to a ver- dict, cannot be sustained. Whether on the auditor's report the defendants were entitled to a ruling directing the jury to render a verdict in their favor, or whether the case should have been submitted to the jury for the reasons stated in Peaslee v. Boss (143 Mass. 275), is a question which has not been carefully argued, and upon which we express no opinion. Exceptions sustained.* 1 See the cases following. Also Shaffner v. Pinchhotclc, 133 111. 410 ; Leaver v. Bennett, 29 Neb. 812. 390 FORMATION OF CONTRACT. [Pakt H, (tv.) The intention of the parties. TYLER V. CARLISLE. 79 MAINE, 210.-1887. Assumpsit. Verdict for defendant. Peters, C. J. The plaintiff claims to recover a sum of money loaned by him while the defendant was engaged in playing at cards. The ruling, at the trial, was that, if the plaintiff let the money with an express understanding, intention, and purpose that it was to be used to gamble with, and it was so used, the debt so created cannot be recovered; but otherwise, if the plaintiff had merely knowledge that the money was to be so used. Upon authority and principle the ruling was correct. Any different doctrine would, in most instances, be imprac- ticable and unjust. It does not follow that a lender has a guilty purpose merely because he knows or believes that the borrower has. There may be a visible line between the motives of the two. If it were not so, men would have great responsibilities for the motives and acts of others. A person may loan money to his friend, — to the man, and not to his purpose. He may at the same time disapprove his purpose. He may not be willing to deny his friend, however much disapproving his acts. In order to find the lender in fault, he must himself have an intention that the money shall be illegally used. There must be a combination of intention between lender and borrower — a union of purposes. The lender must in some manner be a con- federate or participator in the borrower's act, be himself impli- cated in it. He must loan his money for the express purpose of promoting the illegal design of the borrower; not intend merely to serve or accommodate the man. In support of this view many cases might be adduced. A few prominent ones will suffice. Green v. Collins, 3 Cliff. 494; Gaylord v. Soragen, 32 Vt. 110; Hill V. Spear, 50 N. H. 252; Peck v. Briggs, 3 Denio, 107; jrintyre v. Parks, 3 Met. 207; Banchor v. Mansel, 47 Maine, 58. (See 68 Maine, p. 47.) Nor was the branch of the ruling wrong, that plaintiff, even though a participator, could recover his money back, if it had not Chap. V. § 2.] LEGALITY OF OBJECT. 391 been actually used for illegal purposes. In the minor offenses, the locus pcBnitentioe continues until the money has been actually converted to the illegal use.- The law encourages a repudiation of the illegal contract, even by a guilty participator, as long as it remains an executory contract or the illegal purpose has not been put in operation. The lender can cease his own criminal design and reclaim his money. "The reason is," says Wharton, "the plaintiff's claim is not to enforce, but to repudiate, an illegal contract." TFAar. Con. § 354, and cases there cited. The object of the law is to protect the public — not the parties. "It best comports with public policy, to arrest the illegal transaction before it is consummated," says the court in Stacy v. Foss, 19 Maine, 335. See White v. Bank, 22 Pick. 181. The rule allowing a recovery back does not apply where the lender knows that some infamous crime is to be committed with the means which he furnishes. It applies only where the minor offenses are involved. Exceptions overruled.* GRAVES et al. v. JOHNSON". 156 MASSACHUSETTS, 211. — 1892. Holmes, J. This is an action for the price of intoxicating liquors. It is found that they were sold and delivered in Massa- chusetts by the plaintiffs to the defendant, a Maine hotel keeper, with a view to their being resold by the defendant in Maine, against the laws of that State. These are all the material facts reported; and these findings we must assume to have been war- ranted, as the evidence is not reported, so that no question of the power of Maine to prohibit the sales is open. The only question is, whether the facts as stated show a bar to this action. The question is to be decided on principles which we presume would prevail generally in the administration of the common law in this country. Not only should it be decided in the same way in which we should expect a Maine court to decide upon a Maine contract presenting a similar question, but it should be decided as we think that a Maine court ought to decide this very case if 1 See also Hull v. Buggies, 56 N. Y. 424. 392 FORMATION OF CONTRACT. [Part II. the action were brought there. It is noticeable, and it has been observed by Sir F. Pollock, that some of the English cases -which have gone farthest in asserting the right to disregard the revenue laws of a country other than that where the contract is made and is to be performed, have had reference to the English revenue laws. Holman v. Johnson, 1 Cowp. 341; Pollock, Con. (5th ed.) 308. See also M'Intyre v. Parks, 3 Met. 207. The assertion of that right, however, no doubt was in the interest of English commerce (Pellecat v. Angell, 2 Cr., M. & E. 311, 313), and has not escaped criticism (Story, Gonfl. Laws, §§ 257, 254, note; 3 Kent Oom. 265, 266; and Wharton, Confl. Laws, § 484), although there may be a question how far the actual decisions go beyond what would have been held in the case of an English contract affecting only English laws. See Hodgson v. Temple, 5 Taunt. 181; Brown v. Duncan, 10 B. & C. 93, 98, 99; Harris v. Runnels, 12 How. 79, 83, 84. Of course it would be possible for an independent State to enforce all contracts made and to be performed within its terri- tory, without regard to how much they might contravene the policy of its neighbor's laws. But in fact no State pursues suflh a course, of barbarous isolation. As a general proposition, it is admitted that an agreement to break the laws of a foreign coun- try would be invalid. Pollock, Con. (5th ed.) 308. The courts are agreed on the invalidity of a sale when the contract contem- plates a design on the part of the purchaser to resell contrary to the laws of a neighboring State, and requires an act on the part of the seller in furtherance of the scheme. Waymell v. Reed, 5 T. E. 699; Oaylord v. Soragen, 32 Vt. 110; Eisher v. Lord, 63 K. H. 514; Hull V. Ruggles, 56 N. Y. 424, 429. On the other hand, plainly, it would not be enough to prevent a recovery of the price that the seller had reason to believe that the buyer intended to resell the goods in violation of law; he must have known the intention in fact. Finch v. Mansfield, 97 Mass. 89, 92; Adams v. Coulliard, 102 Mass. 167, 173. As in the case of torts, a man has a right to expect lawful conduct from others. In order to charge him with the consequences of the act of an intervening wrongdoer, you must show that he actually contemplated the act. Hayes v. Hyde Park, 153 Mass. 514, 515, 516. Chap. V. § 2.] LEGALITY OF OBJECT. 393 Between these two extremes a line is to be drawn. But as the point where it should fall is to be determined by the intimacy of the connection between the bargain and the breach of the law in the particular case, the bargain having no general and necessary tendency to induce such a breach, it is not surprising that courts should hare drawn the line in slightly different places. It has been thought not enough to invalidate a sale, that the seller merely knows that the buyer intends to resell, in violation even of the domestic law. Tracy v. Talmage, 4 Kernan, 162 ; Hodgson V. Temple, 5 Taunt. 181. So, of the law of another State. M'Intyre v. Parks, 3 Met. 207; Sortwell v. Hughes, 1 Curt. C. C. 244; Green v. Collins, 3 Cliff. 494; Hill v. Spear, 50 N.H.253; Dater v. Earl, 3 Gray, 482, in a decision on New York law. But there are strong intimations in the later Massachusetts cases that the law on the last point is the other way. Finch v. Mansfield, 97 Mass. 89, 92; Suit v. Woodhall, 113 Mass. 391, 395. And the English decisions have gone great lengths in the case of knowledge of intent to break the domestic law. Pearce v. Brooks, L. E. 1 Ex. 213; Taylor v. Chester, L. E. 4 Q. B. 309, 311. However this may be, it is decided that when a sale of intoxi- cating liquor in another State has just so much greater proximity to a breach of the Massachusetts law as is implied in the state- ment that it was made with a view to such a breach, it is void. Webster v. Munger, 8 Gray, 584; Orcutt v. Nelson, 1 Gray, 536, 541; Hubbell v. Flint, 13 Gray, ^77, 279; Adams v. Coulliard, 102 Mass. 167, 172, 173. Even in Oreen v. Collins and Hill v. Spear, the decision in Webster v. Munger seems to be approved. See also Langton v. Hughes, 1 M. & S. 593; M'Kinnell v. Robin- son, 3 M. & W. 434, 441; White v. Buss, 3 Gush. 448. If the sale would not have been made but for the seller's desire to induce an unlawful sale in Maine, it would be an unlawful sale on the prin- ciples explained in Hayes v. Hyde Park, 153 Mass. 514, and Tasker V. Stanley, 153 Mass. 148. The overt act of selling which other-orise would be too remote from the apprehended result, an unlawful sale by some one else, would be connected with it, and taken out of the protection of the law by the fact that the result was actually intended. We do not understand the judge to have gone so far as we have just supposed. We assume that the sale would have taken 394 FORMATION OF CONTRACT. [Part II. place, whatever the buyer had been expected to do with the goods. But we understand the judge to have found that the seller expected and desired the buyer to sell unlawfully in Maine, and intended to facilitate his doing so, and that he was known by the buyer to have that intent. The question is whether the sale is saved by the fact that the intent mentioned was not the controlling induce- ment to it. As the connection between the act in question, the sale here, and the illegal result, the sale in Maine — the tendency of the act to produce the result — is only through the later action of another man, the degree of connection or tendency may vary by delicate shades. If the buyer knows that the sale is made only for the purpose of facilitating his illegal conduct, the connection is at the strongest. If the sale is made with the desire to help him to his end, although primarily made for money, the seller cannot complain if the illegal consequence is attributed to him. If the buyer knows that the seller, while aware of his intent, is indifferent to it, or disapproves of it, it may be doubt- ful whether the connection is sufficient. Compare Commonwealth V. Churchill, 136 Mass. 148, 150. It appears to us not unreason- able to draw the line as it was drawn in Webster v. Hunger, and to say that, when the illegal intent of the buyer is not only known to the seller, but encouraged by the sale as just explained, the sale is void. The accomplice is none the less an accomplice because he is paid for his act. See Commonwealth v. Harrington, 3 Pick. 26. The ground of the decision in Webster v. Hunger is, that con- tracts like the present are void. If the contract had been valid, it would have been enforced. Dater v. Earl, 3 Gray, 482; H'Intyre v. Parks, 3 Met. 207. As we have said or implied already, no distinction can be admitted based on the fact that the law to be violated in that case was the lex fori. For if such a distinction is ever sound, and again, if the same principles are not always to be applied, whether the law to be violated is that of the State of the contract or of another State (see Tracy v. Tal- mage, 4 Kernan, 162, 213), at least the right to contract with a view to a breach of the laws of another State of this Union ought not to be recognized as against a statute passed to carry out fundamental beliefs about right and wrong, shared by a large part Chap. V. § 2.] LEGALITY OF OBJECT. 395 of our own citizens. Territt v. Bartlett, 21 Vt. 184, 188, 189. In the opinion of a majority of the court, this case is governed by Webster y. Munger, and we believe that it would have been decided as we decide it, if the action had been brought in Maine instead of here. Banchor v. Mansel, 47 Maine, 58. Exceptions sustained. (v.) Securities for money due on an illegal transaction. BEOWN V. KINSEY. 81 NORTH CABOLINA, 245. — 1879. DiLLABD, J. The case in the court below was four appeals from a justice's court, founded on four bonds executed by the testator of the defendant on the 13th of September, 1872, to Winefred Hill, and assigned to her after due to the plaintiff. By order of the court, the actions were consolidated, and the trial was had by a jury on the issue joined on the plea of im- moral consideration, and the evidence relied on by the defendant being all in. His Honor being of opinion that the same was not such as reasonably to warrant a finding of the matter of avoid- ance pleaded, so held. Thereupon the vgrdict was for the plain- tiff, and the defendant appealed. The question on the appeal is whether the evidence adduced was or was not such as in law to authorize and require the judge to submit it to the jury upon which to find the fact of immoral consideration alleged by the defendant. The evidence was that the testator of defendant died in Octo- ber, 1872, and that about five years before his death Winefred Hill, the assignor of the plaintiff, gave birth to a bastard child begotten by him (said testator), and afterwards, in the course of the same illicit intercourse, he executed to her a bond under seal for three hundred dollars. Winefred, on her death, said he owed her nothing, and that when the bond was delivered to her, testator made no declaration as to his reason, or to the consider- ation moving him thereto. Upon the death of testator's wife, the said Winefred went to live in the house of testator, and took 396 FORMATION OF CONTRACT. [Paet II. charge of his domestic business about a month before the testator died. And whilst there, on the 13th of September, 1872, during the continuance of the immoral connection, the testator took up the bond for $300 and destroyed it, and then and there executed to said Winefred the four bonds now in suit, one of them falling due on each first day of January in the next four succeeding years, stating at the time that they were executed in place of the bond for $300, and he made no declaration to the motive for the substitution or the consideration on which they were founded. Upon the issue joined, the bonds under which the plaintiff claims, being under seal, the execution and delivery made them effectual at law, made them deeds, things done; and by the com- mon law they had the force and effect to authorize plaintiff to recover without any consideration, with power, however, in the defendant to have the same held null upon proof of illegal or immoral consideration, not from any motive of advantage to him or his testator, but from consideration of the public interest and of morality. Harrell v. Watson, 63 N. C. 454; 2 Ghitty on Contracts, 971 ; Collins v. Blantem, 1 Smith's Lead. Cases, 153. On the trial, then, we are to take it that plaintiff was abso- lutely entitled to recover, unless the defendant showed the im- moral consideration alleged, by evidence full and complete, or by proof of such facts and circumstances as would reasonably warrant a jury to find it as a fact. In other words, the onus was on the defendant, and in order to defeat the recovery it was incum- bent on him to show that the bonds were not voluntary, that is, not executed as a mere gift, and not on the consideration of past cohabitation, which is legal, but on the consideration in whole or part for future criminal intercourse, or to show that the nature of the securities was such as to hold out inducement or constitute a temptation to Winefred Hill to continue the connec- tion. It is indisputable that the bonds, if executed as a gift by the testator of the defendant to Winefred Hill, the mother of his bastard child, would be legal and enforceable, it not being immoral to assist her by gift to raise his progeny; and it is equally settled that if they were given for past cohabitation, they would be binding on the ground that the illicit connection was an evil Chap. V. § 2.] LEGALITY OF OBJECT. 397 already past and done, and the public had no interest to defeat them. The only restriction put on the contracts of the parties is that they shall not stipulate for future fornication, or in such manner as that the security given shall operate as an inducement or motive to go on in the vicious course. 2 Chitty on Contracts, 979; Trovinger v. McBurney, 5 Coiven, 253; Gray v. Mdthias, 5 Vesey's Ch. Eep. 286. In these cases it is held that the continuation of the criminal intercourse after the execution of the bond or contract impeached for immorality, does not invalidate the same; but that it is to be avoided and held null only on proof that it was executed in whole or part on the understanding that the connection was to continue. This will be apparent from the following extracts taken therefrom : In the case of Trovinger v. McBurney, supra, the court say : " A bond executed for the cause of past cohabita- tion, although the connection is continued, is not invalidated thereby." The test always is, does it appear by the contract itself, or was there any understanding of the parties, though not expressed, that the connection was to continue. In the case of Gfray v. Mathias, supra, a bond was given during the cohabita- tion, and in the course of the cohabitation, a second bond was given, which, upon its face, recited the existing illegal connec- tion, and stipulated for its continuance with an annuity for the woman in case of discontinuance, and it was held that the last bond was void, but the former one was good, although the cohabi- tation continued after its execution. In the case of Hall v. Palmer (3 Hare, 632) the bond was executed to the woman conditioned to pay an annuity from and after the death of the obligor, and the parties lived together at the time and continued so to live afterwards, upon a declaration of the obligor that he did not intend to break off the connection; and upon a reference to the master, it being found as a fact that it was given for past cohabitation, it was held that the continuance of the connection after the execution of the obligation had no effect to invalidate it. From the principles decided in these cases, it may be taken as settled, that the cohabitation of the testator of defendant with Winefred Hill, after the execution of the bonds to her, did not by 398 FORMATION OF CONTRACT. [Pabt U. any legal presumption invalidate the same ; and that the same could only be held void on proof that there was an understand- ing, express or implied, that the criminal intercourse was to be continued. Applying these principles to our case we have this state of things : At the time the first bond for $300 was given, Winefred testified that testator of defendant owed her nothing, and therefore the bond was voluntary; or if not that, then it may have been on consideration of past cohabitation, and if so, it was valid; or it may have been partly for past and partly for future, or altogether for future intercourse, and if the latter, then the onus was on the defendant to prove it otherwise than by mere evidence of a continued connection after the bonds were exe- cuted. The defendant, on the trial of the issue, had no proof, except of the execution of the bonds in the course of an illegal intimacy between the parties, and a continuation thereof afterwards up to the death of the testator, together with an admission by Wine- fred, that they were not executed for any debt due to her; and obviously, in such state of the proof, the jury could not have done more than have a suspicion and conjecture, whether the bonds were executed as a gift, or for past cohabitation, or wholly or in part for future cohabitation. The rule is well settled that if there be no evidence, or if the evidence be so slight as not reasonably to warrant the inference of the fact in issue, or furnish more than materials for a mere conjecture, the court will not leave the issue to be passed on by the jury, but rule that there is no evidence to be submitted to their consideration, and direct a verdict against that party on whom the burden of proof is. State v. Waller, 80 IST. C. 401; State V. Patterson, 78 N. C. 470; Sutton v. Madre, 2 Jones, 320; Cobb V. Fogalman, 1 Ire. 440. In our opinion, therefore, the judge properly held that there was no evidence of the illegal or immoral consideration alleged, and in so doing he committed no error. No error. Affirmed.* 1 See also Singleton v. Bremar, Harp. (So. Car.) 201 ; CHven v. Driggs, 1 Games Rep. (N. Y.) 450; Edwards v. SMrving, 1 Brevard (So. Car.) 548; Swan V. Scott, 11 Sergeant & Eawle (Pa.) 155. Chap. V. §2.] LEGALITY OF OBJECT. NEW V. WALKEE. 108 INDIANA, 365. — 1886. Action on a promissory note. Defense, illegality of considera- tion. Reply, purchase before maturity, for value, and without knowledge of illegality. Demurrer to reply. Demurrer sus- tained. Plaintiff appeals. Defendant gave the note in question for the purchase price of a patent right. By the statute, all sales of patent rights are unlawful when the seller has not filed with the clerk of the court of the county where the sale is made copies of the letters patent, and an affidavit that the letters are genuine, etc., and all obliga- tions given for the purchase price of such patent rights are required to contain the words "given for a patent right." Non- compliance with the statute is made a misdemeanor. The payee of the note in question had not complied with this statute. Elliott, C. J. . . . In our opinion, a promissory note exe- cuted in direct violation of a mandatory statute, is inoperative as between the parties and those who buy with notice. Where a statute, in imperative terms, forbids the performance of an act, no rights can be acquired by persons who violate the statute, nor by those who know that the act on which they ground their claim was done in violation of law. A promissory note, executed in a transaction forbidden by statute, is at least illegal as be- tween the parties and those who have knowledge that the law was violated. It is an elementary rule that what the law pro- hibits, under a penalty, is illegal, and it cannot, therefore, be the foundation of a right as between the immediate parties. Wilson V. Joseph, 107 Ind. 490; HedderichY. State, 101 Ind. 571, 51 Am. R. 768; Case v. Johnson, 91 Ind. 477. This rule also applies to those who assume to purchase from one of the parties to the transaction, but purchase with full knowledge that the law has been transgressed. ***** Having determined that the promissory note, on which the action is founded, is negotiable as commercial paper, the next question is, what are the rights of the appellant as the bona fide 400 FORMATION OF CONTRACT. [Part H. holder of the paper? For there can be no doubt under the con- fessed allegations of the reply that she is such a holder. She is such in the strongest light, for she purchased from a good-faith owner, and is herself free from fault and innocent of wrong. Hereth y. Merchants' Nat. Bank, 34 Ind. 380; Newcome v. Dun- ham, 27 Ind. 285. The decisions agree that, where the statute in direct terms declares that a note given in violation of its provisions shall be void, it is so no matter into whose hands it may pass. The rule is thus stated by the court in Vallett v. Parker (6 Wend. 615) : " Wherever the statute declares notes void, they are and must be so, in the hands of every holder; but where they are adjudged by the court to be so, for failure or the illegality of the consid- eration, they are void only in the hands of the original parties, or those who are chargeable with, or have had notice of the consideration." It is said by a late writer, in stating the same general rule, that, "when a statute, expressly or by necessary implication, declares the instrument absolutely void, it gathers no vitality by its circulation in respect to the parties executing it." 1 Daniel Negotiable Int. § 197. We regard this author's statement as sub- stantially expressing the general rule, and, accepting it as cor- rect, the pivotal question is whether our statute does expressly, or by necessary implication, declare that notes given to vendors of patent rights who have disobeyed the law shall be void? There is certainly no express declaration in the statute that such notes shall be void, nor do we think that there is any necessary implication that they shall be void. A man may be guilty of a misdemeanor, and yet notes taken by him in the transaction which creates his guilt may not be void in the hands of an inno- cent holder. A familiar illustration of this principle is afforded by those cases which declare that a note given in consideration of the suppression of a criminal prosecution is inoperative as between the immediate parties, but valid in the hands of a bona fide purchaser. This is the settled law, although the compound- ing of a felony is made a crime by statute. Our opinion is, that a statute making it a crime to take promissory notes in a pro- hibited transaction does not make the notes void in the hands of Chap. V. §2.] LEGALITY OF OBJECT. 401 innocent purchasers, although the person who violates the statute commits a crime. This conclusion is well sustained by authority. Anderson Y. Etter, 102 Ind. 115; Vallett v. Parker, supra; Tay- lor y. Beck, 3 Eand. (Va.) 316; Glenn y. Farmers' Bank, 70 N. C. 191; Smith v. Columbus State Bank, 9 Neb. 31; Haskell y. Jones, 86 Pa. St. 173; Palmer y. Minar, 8 Hun, 342; Cook v. Weirman, 51 Iowa, 561. A party who executes a promissory note, negotiable as commer- cial paper, fair on its face and complete in all its parts, puts in circulation an instrument which he knows is the subject of barter and sale in the commercial world, and it is his own fault if he does not put into it the words which will warn others not to buy it in the belief that it will be free from all defenses. The ex- perience of the business world has shown the necessity of affixing to promissory notes the quality of negotiability, and commercial transactions would be seriously disturbed if notes, fair on their face, and containing the required words of negotiability, were not protected in the hands of innocent purchasers. It is, there- fore, not the policy of the law to multiply exceptions to the general rules governing notes negotiable by the law merchant, so that in such a case as this it cannot, without an indefensible departure from that policy, be held that the promissory note is not protected in the hands of a good-faith holder. Nor can such a step be taken without wandering from the course marked and defined by the long-established principle that, where one of two innocent persons must suffer from the act of a third person, he who puts it in the power of the third to do the act must bear the loss. To our minds it seems clear that this principle rules here, for the man who executes to a vendor of patent rights a promissory note, in full and perfect form, puts it in his power to wrong others by selling the note as an article of commerce. We regard the reply as unquestionably good, and adjudge that the trial court erred in sustaining the demurrer to it. » * » « « Judgment reversed.' 1 See also Qlenn v. Farmers' Bank, 70 N. C. 191 ; Singleton v. Bremar, Harper (So. Car.), 201 ; Coulter v. Sobertson, 14 Smedes & Marshall (Miss.), 18 ; Traders' Bank v. Alsop, 64 la. 97. See on usury contracts, Kendall v. Bobertson, 12 Cush. (Mass.) 156 ; Wortendyke v. Meehan, 9 Neb. 221. 402 FORMATION OF CONTRACT. [Part II. (vi.) Can a man be relieved from a contract which he knew to he unlawful ? DUVAL V. WELLMAN. 124 NEW YORK, 156.— 1891. Appeal from order of the General Term of the Court of Common Pleas for the city of New York, made May 4, 1888, which reversed an order of the General Term of the City Court, which reversed an order of the Special Term of said court denying a motion for a new trial. This action was brought to recover back moneys paid by plain- tiff's assignor to defendant upon contracts set forth in the opin- ion, in which the material facts are also stated. Bkown, J. The record before us does not contain the plead- ings, and we are not informed of the grounds upon which the plaintiff therein based his right to recover. The case has, how- ever, been disposed of in defendant's favor in the court below on the ground that the contract between the parties, upon which the money was paid, was illegal, and that the plaintiff's assignor was particeps criminis, and equal in guilt with the defendant. But whether the cause of action was based upon the contract, or upon the illegality of the contract, and in disaffirmance thereof, does not appear. The questions discussed in the lower courts have, however, been regarded as of sufficient importance to receive the consideration of this court, and as they were the only Ones discussed at our bar, we may confine our observations to them without regard to the particular issue made by the pleadings. It appears from the evidence that the plaintiff is the assignee of Mrs. E. Guion, a widow lady, who, in her search for a husband, sought the advice and aid of the defendant, who was the owner and publisher of a matrimonial journal called " The New York Cupid," and the proprietor of a matrimonial bureau in New York City. Mrs. Guion's testimony was to the effect that in June, 1886, she became a patron of the defendant's establishment, and paid the usual registration fee of five dollars; that she was introduced to thirty or forty gentlemen, but found none whom she was willing to accept as a husband; and that in June, 1887, for the purpose of stimulating the defendant's efforts in her behalf, Chap. V. § 2.] UEGAUTY OF OBJECT. 403 she paid him fifty dollars, -whereupon there was executed the following instrument: "June 2d, 1887. "Due Mrs. Guion from Mr. Wellman fifty dollars ($50.00), Aug. 15th, if at that time she is willing to give up all acquaintance with gentlemen who were introduced in any manner by H. B. Wellman. If Mrs. Guion marry the gentleman whom we introduce her to, an addi- tional fifty dollars ($50.00) is due Mr. Wellman from Mrs. Guion. " (Signed) H. B. Wellman. "E. Guion." In August, 1887, Mrs. Guion, not finding a congenial compan- ion among any of the men to whom she had been introduced, and claiming to be willing to give up- all acquaintance with them, demanded from defendant the return of the money paid, which, being refused, the claim was assigned to plaintiff and this action was commenced. The five learned judges who have delivered opinions in the case have agreed that the contract between the parties was void, and this conclusion appears to be amply supported by authority. 1 Story's Eq. Jurisprudence, §§ 260-264; 2 Pomeroy's Eq. Juris- prudence, § 931 ; Willard's Eq. Jurisprudence, 211 ; Bacon's Abridg- ment, title Marriage & Divorce, D. ; Fonblanque's Eq. ch. 1, § 10; Boyntony. Hubbard, 7 Mass. 112; Crawford v. Bussell, 62 Barb. 92. Judge Story, after discussing the grounds upon which courts of equity interfere in cases of this kind, says : " It is now firmly established that all such contracts are utterly void as against public policy . . . ," and Chief Justice Parsons said, in Boj/nton V. Hubbard, supra, that "these contracts are void . . . because they have a tendency to cause matrimony to be contracted on mistaken principles and without the advice of friends, and they are relieved against as a general mischief for the sake of the public." The doctrine that marriage brokerage contracts are void is the outgrowth of the views and opinions of ,the English people upon the subject of the marriage relation, and the courts of England, for upwards of a century, have universally declared that the natural consequences of such agreements would be to bring about ill-advised, and, in many instances, fraudulent marriages, result- 404 FORMATION OF CONTRACT. [Vast U. ing inevitably in the destruction of the hopes and fortunes of the weaker party, and especially of women, and that every tempta- tion in the exercise of undue influence in procuring a marriage should, therefore, be suppressed. The defendant has, however, succeeded in the lower court upon the application of the rule that a court will not lend its aid to either of the parties to an illegal or fraudulent contract, either by enforcing its execution if it be executory, or by rescinding it if it be executed. Public policy has dictated the adoption of this rule, but it has its limitations, and when the parties are not equally guilty, or when the public interest is advanced by allow- ing the more excusable of the two to sue for relief, the courts will aid the injured party by setting aside the contract and restoring him, so far as possible, to his original position. 1 Pomeroy's Equity, § 403; 1 Story's Equity, § 300. It is not sufficient for the defendant to show merely that the other contracting party is particeps criminis, but it must appear that both are equal in guilt unless the contract be malum in ne, in which case the maxim ex dolo malo non oritur actio is of universal application. This subject received very full consideration in the case of Tracy v. Talmage (14 N. Y. 162), and it was there said that unless the parties are in pari delicto as well as particeps criminis, the courts, although the contract is illegal, will afford relief to the more innocent party. Upon the application of this doctrine, in Mount v. Waite (7 Johns. Eep. 433), premiums paid for the insurance of lottery tickets were recovered, the plaintiff being held not to be equal in guilt with the defendants. In Wheaton v. Hibbard (20 Johns. Eep. 290) it was held that usurious interest paid by a borrower could be recovered inde- pendent of the statute, and that the maxim inter partes in pari delicto, potior est conditio defendentis did not apply, as the law considered the borrower the victim of the usurer, and Lord Mansfield laid down the rule that in transactions prohibited by statute for the protection of one set of men from another set of men the parties are not in pari delicto. Browning v. Morris, 2 Cowp. 790. See also Scliroeppel v. Corning, 6 N. Y. 107, 115, 116. Chap. V. § 2.] LEGALITY OF OBJECT. 406 It will appear from an examination of the authorities upon this subject, a very few only of which are cited, that courts, both of law and equity, have held that two parties may concur in an illegal act without being deemed in all respects in pari delicto. In many such cases relief from the contract will be afforded to the least guilty party when he appears to have acted under cir- cumstances of imposition, hardship, or undue influence, and especially where there is a necessity of supporting public interests, or a well-settled policy of the law, whether that policy be declared in the statutes of the State or be the outgrowth of the decisions of the courts. Accordingly, many cases may be cited where relief has been granted from contracts which partook of the character of marriage brokerage agreements. The cases are collected in Pomeroy's Equity Jurisprudence, in a note to section 931; in Fonblanque's Eq. (B. I., ch. 4, §§ 10, 11), and Bacon's Abridgment, title Marg. & Divrs. (541 et seq.), and need not be cited here. In two of the cases referred to, money paid under the contract was recovered back. Smith v. Bruning, 2 Vern. 392 ; Goldsmith v. Bruning, 1 Eq. Cases Abr. 89. The question in this and kindred cases, therefore, must always be whether the parties are equal in guilt. Obviously cases might arise where this would clearly appear and where the court would be justified in so holding as a matter of law, as where there was an agreement between two, having for its purpose the marriage of one to a third party, the parties would be so clearly in pari delicto that the courts would not aid the one who had paid money to the other in the promotion of the common purpose, to recover it back. Such a case would partake of the character of a con- spiracy to defraud. So if two parties entered into a partnership to carry on such a business as defendant conducted, the courts would not lend their aid to either to enforce the agreement between them. But where a party carries on a business of promoting marriage as the defendant appears to have done, it is plain to be seen that the natural tendency of such a business is immoral, and it would be so clearly the policy of the law to suppress it, and public interest would be so greatly promoted by its suppression, that there would be no hesitation upon the part of the courts to aid 406 FORMATION OF CONTRACT. [Paet II. the party who had patronized such a business by relieving him or her from all contracts made, and grant restitution of any money paid or property transferred. In that way only could the policy of the law be enforced and public interests promoted. Contracts of this sort are considered as fraudulent in their character, and parties who pay money for the purpose of procur- ing a husband or wife will be regarded as under a species of imposition or undue influence. The subject is classed by all text writers under the head of constructive or implied fraud, and it is upon the application of rules which belong to that branch of the law that the cases have been decided to which I have referred. We are of the opinion, therefore, that it was error to hold as a legal conclusion that the parties to the contract in question were equal in guilt. The learned General Term of the Common Pleas appeared to have considered that the voluntary character of Mrs. Guion's acts was decisive of this question and deprived her of the right of recovery. It is true there is no evidence of actual over- persuasion or undue influence. But at most the inferences to be drawn from these facts were for the jury. The prominent fact in the case is that such a place as the defendant maintained existed in the community, with its evil surroundings and immoral tendencies. What influence was exerted upon the mind of the widow by the mere fact of the existence of such a place to which resort could be had, cannot of course appear except by inference. But if the evidence was not sufficiently strong to authorize the court to hold as a question of law that the parties were not in pari delicto, it at least presented a question of mixed fact and law for the jury. Our opinion is that the same reasons that have induced courts to declare contracts for the promotion of marriage void, dictate with equal force that they should be set aside and the parties restored to their original position. To decide that money could not be recovered back would be to establish the rules by which the defendant and others of the same ilk could ply their trade and secure themselves in the fruits of their illegal transactions. We are of the opinion, therefore, that the Common Pleas erred Chap. V. § 2.] LEGALITY OF OBJECT. 407 in reversing the order of the City Court, and that a new trial should have been granted. The order appealed from should be reversed, and the order of the General Term of the City Court affirmed, with costs. All concur. Order reversed. BEENARD v. TAYLOE. 23 OREGON, 416. — 1893. Lord, C. J. This was an action to recover the sum of five hundred and sixty dollars deposited with the defendant as a wager on the result of a foot race. The case was tried without the intervention of a jury, and the material facts as found by the court are: That the plaintiff deposited with the defendant the sum of five hundred and sixty dollars in gold for the benefit of one George Grant, and as a wager upon a foot race which said Grant and one Anderson were to run the next day at a place agreed upon ; that at the time the said money was so deposited, it was understood by Grant and the defendant Taylor and the plaintiff that the money should be paid back to the plaintiff on his demand for the same at any time before the race should be run, which the defendant agreed to do ; that before such race was run the plaintiff on two occasions demanded said money of the defendant, who refused to pay it back, but pretends that said race was run, and that Anderson was the winner, to whom he paid the money before the commencement of this action; that the race agreed to be run was not run, but that Grant, at the appointed time, refused to run, and Anderson ran over the course alone and was declared by the defendant to be the winner; that said pretended race was never intended to be a fair and honest race, and that plaintiff knew at the time he deposited his money with the defendant that the race was to be a " bogus race " ; that the parties engaged in getting it up, namely. Grant, Anderson, and the defendant, wanted to "rope in" somebody; that it was understood that Grant was to win the race; that the plaintiff furnished the money and deposited it with the defendant as stake- 408 FORMATION OF CONTRACT. [Pabt H. holder for the benefit of Grant, in whom he had confidence at the time, but of whom, before the time appointed for the race to come off, he became suspicious; that he feared that he would lose the money, and thereupon, by reason of such suspicion, and by virtue of the agreement with the defendant, demanded of the defendant the return of said money, and that said Grant then and there, before the time of running the race had arrived, demanded of the defendant the repayment of the money to the plaintiff, etc. Substantially upon such findings, the court found as a conclusion of law that the plaintiff was entitled to judgment for the sum of five hundred and sixty dollars and interest, and for costs, etc. From this judgment the appeal has been brought to this court. 1. The first contention for the defendant is, that wagers or wagering contracts upon indifferent subjects are valid in this State by force of the common law, except when prohibited by statute. There can be no doubt that wager contracts upon indifferent matters were valid at common law. Oood v. Elliott, 3 T. E. 693; Jones v. Randall, 1 Cowp. 37; Da Costa v. Jones, 2 Cowp. 734; Bunn v. Biker, 4 Johns. 427 (4 Am. Dec. 292). But all wagers which tended to a breach of the peace, or to injure the feelings, character, or interests of third persons, or which were against the principles of morality, or of sound policy, were void at common law. 4 Kent's Com. 466; Greenhood, Pub. Pol. 226. And all wagers in contravention of the positive pro- visions of any statute are also void. Of late years, by legislation and judicial decision, the hostility to wagers of every nature has been marked. This is doubtless due to the increase of betting and the evil consequences resulting therefrom. As O'Neal, J., said: "Every bet tends directly to beget a desire of possessing another's money or property without an equivalent. Men acted upon by such influences easily become gamblers, and then the road to every other vice is broad and plain." Bice v. Gist, 1 Strob. (S. C.) 84. And the tendency of judicial opinion in repudiating all kinds of wagers is well illustrated in Love v. Harvey (114 Mass. 82), wherein Gray, C. J., says : " It is inconsist- ent with the policy of our laws and with the performance of duties for which courts of justice are established, that judges and juries should be occupied with every frivolous question upon Chap. V. § 2.] LEGALITY OF OBJECT. 409 ■which idle and foolish persons may choose to lay a ■wager." Equally emphatic is Belford, J., in Eldred v. Malloy (2 Col. 321), ■wherein he says : " If ■we enter upon the ■work of settling bets made by gamblers in one case ... ■we may despair of ever find- ing time for the dispatch of these weightier matters which affect the person and property rights of the respectable people in this territory. If the gate is once opened for this kind of litigation, it is more than probable we may be overrun with questions arising out of bets. The spirit of our laws discountenances gambling." Wagers are inconsistent with the established interests of society, and in conflict with morals of the age, and as such they are void as against public policy. In view of these considerations, we do not think that such transactions, though upon indifferent subjects, are valid in this State. 2. The next contention for the defendant is, that the alleged agreement was corrupt, illegal, and criminal in this, that it was in advance " fixed " that one of the parties should win, and that certain persons should lose their money ; in other words, that the agreement had in contemplation "a job race." This, it is claimed, put the plaintiff in pari delicto with the defendant, and ai3 a consequence he is entitled to the benefit of the rule potior est conditio possidentis. The general rule is, that the law will not interfere in favor of either party in pari delicto, but will leave them in the condition in which they are found, from motives of public policy. There is no doubt, where money has been paid on an illegal contract which has been executed, and both parties are in pari delicto, the courts will not compel the return of the money so paid. But the cases show that an important distinction is made between executory and executed illegal contracts. While the contract is executory, the law will neither enforce it nor award damages, but the party paying the money, or putting up the property, may rescind the contract and recover back his money. If the contract is already executed, nothing paid or delivered can be recovered back. This arises out of a distinction, between an action in affirmance of an illegal contract and one in disaffirmance of it. In the former, such an action cannot be maintained, but in the latter, an action may be maintained for money had and received. The reason is, that the plaintiff's claim 410 FORMATION OF CONTRACT. [Part II. is not to enforce, but to repudiate, an illegal agreement. Whar- ton, Con. 354. In such case there is a locus poenitentioe ; the wrong is not consummated, and the contract may be rescinded by either party. In Edgar v. Fowler (3 East, 225) Lord EUenborough said : " In illegal transactions the money has always been stopped while it is in transitu to the person entitled to receive it." As Lord Justice Mellish said : " To hold that the plaintiff is entitled to recover does not carry out the illegal transaction, but the effect is to put everybody in the same situation as they were before the illegal transaction was determined upon, and before the parties took any steps. If money is paid or goods delivered for an illegal purpose, the person who has so paid the money or delivered the goods may recover them back before the illegal purpose is carried out; but if he waits till the illegal purpose is carried out, or if he seeks to enforce the illegal transaction, in neither case can he maintain an action; the law will not allow that to be done." Taylor v. Bowers, 1 Q. B. Div. 291. In Hastelow v. Jackson (8 Barn. & Cress. 221), which was an action by one of the parties to a wager on the event of a boxing match, commenced against the stakeholder after the battle had been fought, Littledale, J., said : " If two persons enter into an illegal contract and money is paid upon it by one to the other, that may* be recovered back before the execution of the contract, but not afterwards." Smith V. Bichmore, 4 Taunt. 474; Tappenden v. Randall, 2 Bos. & Pul. 467; Lowry v. Bourdien, 2 Doug. 468; Munt v. Stokes, 4 T. E. 661 ; Utica Ins. Co. v. Kip, 8 Cow. 20 ; Merritt v. Millard, 4 Keys (N. T.), 208; White v. Franklin Bank, 22 Pick. 181; O'Bryan v. Fitzpatrick, 48 Ark. 490. "And this rule," says Mr. Justice Woods, " is applied in the great majority of the cases, even when the parties to an illegal contract are in pari delicto, because the question which of two parties is the more blamable is often diffi- cult of solution, and quite immaterial." Spring Co. v. Knowlton, 103 U. S. 60. The object of the law is to protect the public, and not the parties. This is upon the principle that it best comports with public policy to arrest the illegal transaction before it is consummated. Stacy v. Foss, 19 Me. 335 (36 Am. Dec. 755). 3. It only remains to apply these principles to the facts. Chap. V. §2.] LEGALITY OF OBJECT. 411 These show that the plaintiff was cognizant that the race had been lixed in advance — that one of the parties should win, and that certain other persons should lose their money — that it was a bogus race, and the arrangement based upon it corrupt, and designed to cheat and defraud the other parties; but, at the same time, they show that he repented and repudiated the transaction Ijiefore It was consummated, by demanding the return of his money the " evening of the day before the race, and on the day of the race, but before it was to come off, and that the defendant refused to- pay it back, and that he afterwards forbade the defendant to pay said money to any other person than himself. He availed him- self of the opportunity which the law affords a person to with- draw from the illegal contract before it has been executed; he repented before the meditated wrong was consummated, and twice demanded to withdraw his money, and thereby rescinded the con- tract. To allow the plaintiff to recover does not aid or carry out the corrupt and illegal transaction, but the effect is to put the parties in the same condition as they were before it was deter- mined upon. By allowing the party to withdraw, the contem- plated wrong is arrested, and not consummated. This the Jaw encourages, and no obstacle should be thrown in the way of his repentance. Hence, if the plaintiff retreated before the bet had been decided, his money ought to have been returned to him, and in default of this he is entitled to recover. There was no error, and the judgment must be affirmed.' * See also, Tyler v. Carlisle, 79 Me. 210, ante, p. 390. Paet hi. THE OPERATION OF CONTEACT. CHAPTER I. THE LIMITS OF THE CONTRACTUAL OBLIGATION. § 1. A man cannot Incur liabilities from a contract to 'which he Tvaa not a party. (i.) Paying another's debt. CEUMLISH'S ADM'E v. CENTRAL IMPROVEMENT CO. et al. 38 WEST VIRGINIA, 390. — 1893. Suit in equity against the Central Improvement Co. for the distribution of a fund for the payment of creditors of the com- pany. Among the demands presented for payment was a judg- ment in favor of Jamison & Co., which was disallowed, payment being pleaded. Jamison & Co. appeal. In a suit by Jamison & Co. against the Central Improvement Co., Jamison & Co. had attached bonds of the Shenandoah Valley Railroad held by a third party for the benefit of the Central Improvement Co. The Railroad Co. desired to make a new loan, and in order to cancel the bonds that had been attached, devised the following plan : Jamison & Co. and Clark & Co., the latter bankers and financial agents for the Railroad Co., agreed that Jamison & Co. should transfer to Clark & Co. all their in- terest in the bonds. Jamison & Co. were to get judgment upon the attachments, levy upon and sell the bonds, and if they were not bid up to the amount of the judgment, then Jamison & Co. were to buy them and transfer them to Clark & Co., whereupon Clark & Co. were "to pay" to Jamison & Co., in cash and notes, the 412 Chap. I. §1.] LIMITS OF CONTRACTUAL OBLIGATION. 413 amount of the judgment against the Central Improvement Co. The bonds sold for less than the amount of the judgment, and Clark & Co. paid to Jamison & Co. the balance of the judgment as agreed, receiving in return a transfer of the bonds. In con- sequence of this transaction, the commissioner reported the judgment as paid, and disallowed the claim. Bkannon, J. . . . But this payment was made by a stranger, without request or ratification by the debtor, so far as appears. Does it satisfy the judgment? As it seems to me, the answer depends upon whether you mean as to the creditor or debtor. It remains a correct legal proposition to the present, that one man, who is under no obligation to pay the debt of another, cannot without his request officiously pay that other's debt, and charge him with it. If the debtor ratify such pay- ment, the debt is discharged, and he becomes liable to the stranger for money paid to his use. If he refuse to ratify it, he disclaims the payment, and the debt stands unpaid as to him. In the one case, the stranger would at law sue the debtor for money paid to his use; in the other, enforce the debt in the creditor's name for his use. If his payment is not ratified, he may go into equity praying that, if the debtor ratify it, said debtor may be decreed to repay him, or, if the debtor do not ratify the payment, that the debt be treated as unpaid as between him and the debtor, and that it be enforced in his favor as an equitable assignee. Neely v.. Jones, 16 W. Va. 626; Moore v. Ugon, 22 W. Va. 292 j Beard v. Arhuckle, 19 W. Va. 135. But how as to the creditor? When a stranger pays him the debt of a third party without the request of such third party, as in this case, can the creditor say the debt is yet unpaid, and en- force it against the debtor, as is attempted to be done by Jamison & Co.? Can he accept such payment and say, because it was made by a stranger, it is no payment? Is his acceptance not an estoppel by conduct in pais, as to him? There has been a difference of opinion in this matter. The old English case of Orymes v. Blofield (Cro. Eliz. 541), decided in Elizabeth's reign, is the parent of the cases holding that even the creditor accepting payment from a stranger may repudiate, and still enforce his demand as unpaid. That case is said to 414 OPERATION OF CONTRACT. [PART HL have decided that a plea of accord and satisfaction by a stranger is not good, while Rolle. Abr. 471 (condition F.) says it was decided just the other way. Denman, C. J., questioned its authority in Thurman v. Wild (11 A. & E. 453, 39 E. C. L. 145). Opposite holding has been made in England in Hawkshcm V. Bawlings (1 Strange, 24). Its authority is questioned at the close of the opinion by Cresswell, J., in Jones v. Broadhurst (9 M. G. & S., C. B., 173, 67 E. C. L. 172), as contrary to an ancient decision in 36 Hen. VI., and against reason and justice. Parke, B., seemed to think it law in Simpson v. Eggington (10 Exch. 845). It was followed in Edgcombe v. Rodd (5 East, 294) and Stark V. Thompson (3 T. B. Mon. 296). Lord Coke held the sat- isfaction good. Co. Litt. 206 b, 207 a. See 5 Eob. Pr. (New) 884; 7 Rob. Pr. (New) 548. The cases of Goodwin v. Oremer (18 A. & E., N. S. 757, 83 E. C. L. 757), and Kemp v. Balls (10 Exch. 607, 28 Eng. Law & Eq. 498), seem to hold that payment must be made by a third person as agent for, and on account of, debtor, with his assent or ratification. In New York old cases held this doctrine. Clow v. Borst, 6 Johns. 37; Bleakley v. White, 4 Paige, 654. But later, in^ Wellington v. Kelly (84 N. Y. 543), Andrews, J., said that the old cases were doubtful, but had not been overruled, but it was not necessary in that case to say whether it should longer be regarded as law, and the syllabus makes a quaere on the point. It was held in Harrison V. Hicks (1 Port. Ala. 423), that "payment of a debt,> though made by one not a party to the contract, and though the assent of the debtor to the payment does not appear, is still the extin- guishment of the demand." The opinion says that, as between the person paying and him for whose benefit it was paid, a question might arise whether it was voluntary, which would depend on circumstances of previous request or subsequent [assent], express or implied. This doctrine is sustained by Martin v. Quinn, 37 Cal. 55; Gray v. Herman, 75 Wis. 453 (44 N. W. Eep. 248); Cain v. Bryant, 12 Heisk. 45; Leavitt v. Morrow, 6 Ohio St. 71; Webster v. Wyser, 1 Stew. (Ala.) 184; Harvey v. Tama Co., 53 la. 228 (5 N. W. Eep. 130). Bisk. Cant. § 211 holds that, if payment "be accepted by creditor in dis- charge of debt, it has that effect." See 2 Whart. Cent. § 1008. Chap. I. § 1.] LIMITS OF CONTRACTUAL OBLIGATION. 415 It seems utterly unjust and repugnant to reason, that a creditor accepting payment from a stranger of the third person's debt should be allowed to maintain an action against the debtor plead- ing and thereby ratifying such payment, on the technical theory that he is a stranger to the contract. The creditor has himself for this purpose allowed him to make himself a quasi party, and consents to treat him so, so far as payment is concerned. To regard the debt paid, so far as he is concerned, is but to hold him to the result of his own act. Shall he collect the debt again? In that case can the stranger recover back? What matters it to the creditor who pays? As the Supreme Courts of Wisconsin and Ohio, in cases above cited said, this doctrine is against common sense and justice. It does not at all infringe the rule that one cannot at law make another his debtor without request, to allow such payment to satisfy the debt as to the creditor ; and this court, while recognizing the rule tha,t one cannot ofllciously pay the debt of another and sue him at law, unless he has ratified it, by allowing the stranger to go into equity and get repayment, makes the payment in the eyes of a court of equity operate to satisfy the creditor, and render the stranger a creditor of the debtor. Neely v. Jones, 16 W. Va. 625. I know that in that case it is held that, " if a payment by a stranger is neither rati- fied or authorized by the debtor, it will not be held to be a dis- charge of the debt;" but, though this point is general, that was a case of the stranger seeking to make the debtor repay, and the case and opinion intended to lay down the rule at law only as between the stranger paying and the debtor, not as between the creditor and debtor. So I hold that, when Jamison & Co. re- ceive4 the money for this judgment, it operated as a discharge as to them. « * » « * Therefore, so much of the decree of March 2, 1891, as rejects the claim of B. K. Jamison & Co. ... is affirmed.* 1 Cf. Gleason v. Dyke, 22 Pick. 390, ante, p. 206. The maker of a note cannot avail himself of a part payment made thereon by an indorser. Madison Sq. Bk. v. Fierce, 137 N. Y. 444. 416 OPEKATION OF CONTRACT. [Pakt IU. (ii.) Inducing breach of contract. WALKER et al. v. CEONIlSr. 107 MASSACHUSETTS, 555. — 1871. Tort. Demurrer to declaration sustained. Plaintiffs appeal. Wells, J. . . . The second and third counts recite con- tracts of the plaintiffs with their workmen for the performance of certain work in the manufacture of boots and shoes; and allege that the defendant, well knowing thereof, with the unlaw- ful purpose of hindering and preventing the plaintiffs from carry- ing on their business, induced said persons to refuse and neglect to perform their contracts, whereby the plaintiffs suffered great damage in their business. It is a familiar and well-established doctrine of the law upon the relation of master «and servant, that one who entices away a servant, or induces him to leave his master, may be held liable in damages therefor, provided there exists a valid contract for continued service, known to the defendant. It has sometimes been supposed that this doctrine sprang from the English statute of laborers, and was confined to menial service. But we are sat- isfied that it is founded upon the legal right derived from the contract, and not merely upon the relation of master and servant; and that it applies to all contracts of employment, if not to con- tracts of every description. In Hart v. Aldridge (Cowp. 54) it was applied to a case very much like the present. In Grunter v. Astor (4 J. B. Moore, 12) it was applied to the enticing away of workmen not hired for a limited or constant period, but who worked by the piece for a piano manufacturer. In Sheperd v. Wakeman (Sid. 79) it was applied to the loss of a contract of marriage by reason of a false and malicious letter claiming a previous engagement. In Winsmore v. Oreenbank (Willes, 577) the defendant was held liable in damages for unlawfully and unjustly " procuring, enticing, and persuading" the plaintiff's wife to remain away from him, whereby he lost the comfort and society of his wife, and the profit and advantage of her fortune. Chap. I. §1.] LIMITS OF CONTRACTUAL OBLIGATION. 417 In Lumley v. Gye (2 El. & Bl. 216) the plaintiff liad engaged Miss Wagner to sing in his opera, and the defendant knowingly induced her to break her contract and refuse to sing. It was objected that the action would not lie, because her contract was merely executory, and she had never actually entered into the service of the plaintiff; and Coleridge, J., dissented, insisting that the only foundation for such an action was the statute of laborers, which did not apply to service of that character; but after full discussion and deliberation it was held that the action would lie for the damages thus caused by the defendant. In Boston Glass Manufactory v. Binney (4 Pick. 425), which was for inducing workmen, skilled in several departments of glass-making, to leave the employment of the plaintiff, it was not suggested that the defendants would not have been liable if there had been an existing contract between the plaintiff and the workmen. Upon careful consideration of the authorities, as well as of the principles involved, we are of opinion that a legal cause of action is suf&ciently stated in each of the three counts of the declara- • Demurrer overruled.^ ' Inducing Workmen to quit Employment. — The general rule in the United States is in accordance with the English authorities and the above case. In Old Dominion S. S. Co. v. McKenna (30 Fed. Kep. 48 ; ;S. C. Burdick's Cases on Torts, 195) the court, Brown, J., said: "The defend- ants not being in the plaintiff's employ, and without any legal justification so far as appears, — a mere dispute about wages, the merits of which are not stated, not being any legal justification, — procured plaintiff's workmen in this city and in Southern ports to quit work in a body, for the purpose of inflicting injury and damage upon the plaintiff until it should accede to the defendants' demands, and pay the Southern negroes the same wages as New York 'longshoremen, which the plaintiff was under no obligation to grant ; and such procurement of workmen to quit work, being designed to inflict injury on the plaintiff, and not being justified, constituted in law a malicious and illegal interference with the plaintiff's business, which is actionable." In Toledo &c. By. Co. v. Pennsylvania Co. et al. (54 Eed. Eep. 730) the court granted a temporary injunction, pending the action, against the Chief of the Brotherhood of Locomotive Engineers, restraining him from issuing or continuuig in force any rule or order of the Brotherhood ordering en- gineers not to handle the cars of the complainant company. Taft, Circuit Judge (p. 744), says : "The many engineers who serve the defendant com- panies will refuse to handle the complainant's freight. The defendant com- panies will probably be coerced thereby to refuse complainant's freight. . . . 418 OPERATION OF CONTKAOT. [Pabt III. JONES V. STANLY. 76 NOETH CAROLINA, 355.-1877. Action for damages. Judgment for plaintiff, which was ar- rested by trial court. Plaintiff appeals. , EoDMAN, J. It was decided in Haskins v. Royster (70 N. G. 601) that if a person maliciously entices laborers or croppers to break their contracts with their employer and desert his service, the employer may recover damages against such person. The same- reasons cover every case where one person maliciously per- suades another to break any contract with a third person. It is not confined to contracts for service. In the present case the plaintiff made a contract with the Atlantic & North Carolina Eailroad Company, of which the defendant was President and Superintendent, by which the company agreed to transport from points on their road to Morehead City a large number of cross- ties which plaintiff had contracted to deliver in Cuba. After the contract had been partly performed the defendant, being still President and Superintendent of the company, maliciously and • The injury will be irreparable, and a judgment for damages at law will be wholly inadequate. The authorities leave no doubt that in such a case an injunction will issue against a stranger who thus intermeddles, and harasses complainant's business. ... It would seem from the foregoing authorities that we may enjoin Arthur from directing the engineers to quit work, for the purpose of coercing the defendant companies to violate the law and the complainant's rights. Though we cannot enjoin the engineers from unlaw- fully quitting, it does not follow that we may not enjoin Arthur from order- ing them to do so." In Webber v. Barry (66 Mich. 127) it was held that one who enters the premises of another "for the purpose of inducing per- sons in the employ of that other to leave their employment to the injury of the employer, for the purpose of getting higher wages, or working less hours for the same pay, or for any other reason," is a trespasser. See, for differ- ent phases of the general doctrine, Bixby v. Dunlap, 56 N. H. 456 ; Has- kins V. Royster, 70 N. C. 601 ; Dickson v. Dickson, 33 La. Ann. 1261. That a workman has an action against one who maliciously induces his employer to discharge him, see Chipley v. Atkinson, 23 Fla. 206. Inducing Bkeach of Conteact of Service othek than Manual, — In the case of Bourlier Brothers v. Maeauley (91 Ky. 135) it was held not actionable for defendant to induce an actress to break her contract to per- form at plaintiff's theatre and to enter into a contract to perform at defend- ant's rival theatre. The court expressly declined to follow Lumley v. Gye, and approved the dissenting opinion of Coleridge, J., in that case. Chap. I. § 1.] LIMITS OF CONTRACTUAL OBLIGATION. 419 for the purpose of injuring the plaintiff, as the jury have found, refused to complete the contract, whereby plaintiff "was injured. After the jury had found a verdict for the plaintiff and assessed his damages the judge arrested the judgment, and the plaintiff appealed. In this we think the judge erred and his judgment must be reversed. It is the duty of this court to give such judgment as it appears on the record that the court below should have given. The plaintiff moves here for judgment upon the verdict. There are no exceptions by defendant to the judge's charge, and it d®es not appear that he asked for a new trial. The instructions of the judge on the question of damages are not full, but it does not appear that he was requested to give any others. If he had thought the damages excessive, he would have set the verdict aside and given a new trial on that ground. We neither do nor can know anything of the evidence, and if we did we could not set aside the verdict and give a new trial on that ground, except perhaps where it appeared to be a very gross case of excess. Judgment below reversed and a judgment in this court for the plaintiff according to the verdict. Judgment reversed.* 1 Accord : Bice v. Manley, 66 N. Y. 82, where the contract was unenforce- able under the statute of frauds, but would have been performed had not the defendant interfered. Contra : Chambers v. Baldwin, 91 Ky. 121 ; Boyson v. Thorn, 98 Cal. 578. These cases hold that an action can be maintained only when the defendant employs some unlawful means, as threats, violence, falsehood, or deception, to induce the breach of the contract, and that it is not enough to show that the defendant acted maliciously. In Chambers v. Baldwin (pp. 126-7) Lewis, J., says : " Cooley on Torts, 497, agreeing with Justice Coler- idge, says : ' An action cannot, in general, be maintained for inducing a third person to break his contract with the plaintiff, the consequence after all being only a broken contract, for which the party to the contract may have his remedy by saing upon it.' And it seems to us that rule harmo- nizes with both principle and policy, and to it there can be safely and con- sistently made but two classes of exceptions ; for, as to make a contract binding, the parties must be competent to contract and do so freely, the natural and reasonable presumption is, that each party enters into it with, his eyes open, and purpose and expectation of looking alone to the other for redress in case of breach by him. One such exception was made by the English statute of laborers to apply where apprentices, menial servants, and others whose sole means of living was by manual labor, were enticed to 420 OPERATION OF CONTRACT. [Part IIL § 2. Can a man acquire rights under a contract to which he is not a parly ? Promise for benefit of third party. LEHOW V. SIMONTON et al. 3 COLOKADO, 346. — 1877. Assumpsit. Plea of set-off, A demurrer to the plea was sustained. The plea set forth that the plaintiff, Pierce, had purchased the interest of one Phifer in the business of Simonton & Phifer, and had agreed to assume one-half of the indebtedness of the firm jointly with the plaintiff, Simonton; that Simonton & Phifer were then indebted to defendant in the sum of $2000; and that Pierce jointly with Simonton, plaintiffs herein, undertook and agreed with the old firm to pay this amount to defendant. Wells, J. 1. Whatever may be the general rule in the case of a plea, it is certain that the declaration in counting upon a promise good in parol by the common law need not show a com- pliance with the requisites of the statute of frauds. The statute prescribes a rule of evidence, and not a rule of pleading. Steph. PI. 313, 374; Brown on Stat, of Frauds, § 506; 1 Chit. PI. (16th Am. ed.) 245. Now the plea of set-off is in the nature of a declaration, and in respect to the decree of certainty required, is governed by the same rule. Waterman on Set-off, § 646. The question, whether the undertaking mentioned in the plea is within the statute of frauds, does not arise. 2. It seems to be the settled doctrine of the courts of England at this day, that a stranger to the consideration cannot enforce the contract by an action thereon in his own name, though he be avowedly the party intended to be benefited. 1 Chit, on Cont. (11th Am. ed.) 74. In this country there are many cases which assert the same rule. Salmon v. Brovm, 6 Blackf . 347; Britzell V. Fryberger, 2 Cart. 176; Clapp v. Lawton, 31 Conn. 103; Conk- lin V. Smith, llnA. 108; Melleny. Whipple, 1 Gray, 321; Bobertson leave their employment, and may be applied in this State in virtue of and as regulated by our own statutes. The other arises where a person has been procured against his will or contrary to his purpose, by coercion or deception of another, to break his contract. Oreen v. Button, 2 Cromp. M. & R. 707 ; Aahleg 7. Djxon, 48 N. Y. 430." Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 421 T. Beed, 47 Penn. St. 116; Exchange Bank r. Price, 107 Mass. 42; Warren v. Bachelder, 15 N. H. 129 ; McLaren v. Hutchison, 18 Cal. 81, and some others which are not accessible to us. But as respects simple contracts, the decided preponderance of American authority sustains the action of the beneficiary. 1 Pars, on Cont. 467; 1 Chit. PI. (16th Am. ed.) 5 n. (n. 1); 2 Greenl. Ev. 109; Thorp v. The Keokuk Coal Co., 48 N. Y. 253; McDowell V. Laev, 35 "Wis. 175; Bowhannan v. Pope, 42 Me. 93; Joslin V. JV. J. Car Spring Co., 36 E". J. L. 141; Myer v. Lowell, 4A Mo. 328 ; Sanders v. Clason, 13 Minn. 379 ; Thompson v. Gordon, 3 Strobh. (S. C.) 196; Scott's Adm'r v. G^7Z, 19 Iowa, 187; Allen r. Thomas, 3 Mete. (Ky.) 198; Draughan\. Bunting, 9 Ired. 10; Hendrick v. Lindsay, 3 Otto, 143; Beasley v. Fe6- 5ter, 64 111. 458; In re Bice, 9 Bankr. Eeg. 375; Bagaley y. Waters, 7 Ohio St. 369, and many others in the reports of the same courts, are to this effect. To harmonize the decisions is impossible. The doctrine of those last quoted, while confess- edly an anomaly, seems to us the more convenient. It accords the remedy to the party who in most instances is chiefly inter- ested to enforce the promise, and avoids multiplicity of actions. That it should occasion injustice to either party seems to us impossible. 3. The plea fails to show to whom the promises relied upon were made ; but this is equivalent to stating promise to the party from whom the consideration proceeded. 1 Chit. PI. (16th ed.) 309 (fc.); and according to Delaware and Hudson Canal Co. t. Westchester Bank (4 Denio, 97), this is the proper form of the averment. Judgment reversed with costs, and cause remanded. Eeversed.^ 1 " It is also argued, as Mansfield's name does not appear in the letters of Hendrick, that he could not join in this action. This, would be true, if the promise were under seal, requiring an action of debt or covenant ; but the right of a party to maintain assumpsit on a promise not under seal, made to another for his benefit, although much controverted, is now the prevailing rule in this country." — Mr. Justice Davis, in Hendrick v. Lindsay, 93 U. S. 143, 149. Accord: Dean v. Walker, 107 HI. 540; Worley v. Sipe, 111 Ind. 238; Burton v. Larkin, 36 Kans. 246 ; Coates v. Penn. Ins. Co., 58 Md. 172 ; Sogers v. Gosnell, 58 Mo. 589 ; Shamp v. Meyer, 20 Neb. 223 ; Trimble v. Strother, 25 Ohio St. 378. 422 OPERATION OF CONTRACT. [Pabt III. LAWEENCE v. EOX. 20 NEW YORK, 268.— 1859. Appeal from the Superior Court of the city of Buffalo. On the trial before Mr. Justice Hasten, it appeared by the evidence of a bystander, that one Holly, in November, 1857, at the request of the defendant, loaned and advanced to him $300, stating at the time that he owed that sum to the plaintiff for money borrowed of him, and had agreed to pay it to him the then next day ; that the defendant, in consideration thereof, at the time of receiving the money, promised to pay it to the plaintiff the then next day. Upon this state of facts the defendant moved for a nonsuit, upon three several grounds, viz. : That there was no proof tending to show that Holly was indebted to the plaintiff; that the agreement by the defendant with Holly to pay the plaintiff was void for want of consideration, and that there was no privity between the plaintiff and defendant. The court overruled the motion, and the counsel for the defendant excepted. The cause was then sub- mitted to the jury, and they found a verdict for the plaintiff for the amount of the loan and interest, $344.66, upon which judg- ment was entered; from which the defendant appealed to the Superior Court, at General Term, where the judgment was affirmed, and the defendant appealed to this court. The cause was submitted on printed arguments. H. Gkat, J. The first objection raised on the trial amounts to this : That the evidence of the person present, who heard the declarations of Holly giving directions as to the payment of the money he was then advancing to the defendant, was mere hearsay and therefore not competent. Had the plaintiff sued Holly for this sum of money, no objection to the competency of this evidence would have been thought of; and if the defendant had performed his promise by paying the sum loaned to him to the plaintiff, and Holly had afterwards sued him for its recovery, and this evidence had been offered by the defendant, it would doubtless have been received without an objection from any source. All the defendant had the right to demand in this case was evidence which, as between Holly and the plaintiff, was competent to Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 423 establish the relation between them of debtor and creditor. For that purpose the evidence was clearly competent; it covered the whole ground and warranted the verdict of the jury. But it is claimed that, notwithstanding this promise was estab- lished by competent evidence, it was void for the want of con- sideration. It is now more than a quarter of a century since it was settled by the Supreme Court of this State — in an able and painstaking opinion by the late Chief Justice Savage, in which the authorities were fully examined and carefully analyzed — that a promise in all material respects like the one under con- sideration was valid; and the judgment of that court was unani- mously afB.rmed by the court for the correction of errors. Farley V. Cleveland, 4 Cow. 432; same case in error, 9 Id. 639. In that case one Moon owed Farley and sold to Cleveland a quantity of hay, in consideration of which Cleveland promised to pay Moon's debt to Farley; and the decision in favor of Farley's right to recover was placed upon the ground that the hay received by Cleveland from Moon was a valid consideration for Cleveland's promise to pay Farley, and that the subsisting liability of Moon to pay Farley was no objection to the recovery. The fact that the money advanced by Holly to the defendant was a loan to him for a day, and that it thereby became the property of the defend- ant, seemed to impress the defendant's counsel with the idea that because' the' defendant's promise was not a trust fund placed by the plaintiff in the defendant's hands, out of which he was to realize money as from the sale of a chattel or the collection of a debt, the promise, although made for the benefit of the plain- tiff, could not inure to his benefit. The hay which Cleveland delivered to Moon was not to be paid to Farley, but the debt incurred by Cleveland for the purchase of the hay, like the debt incurred by the defendant for money borrowed, was what was to be paid. That case has been often referred to by the courts of this State, and has never been doubted as sound authority for the principle upheld by it. Barker v. Bucklin, 2 Denio, 45; Hudson Canal Company v. The Westchester Bank, 4 Id. 97. It puts to rest the objection that' the defendant's promise was void for want of consideration. The report of that case shows that the promise was not only made to Moon but to the plaintiff Farley. In this 424 OPERATION OF CONTRACT. [Part III. case the promise was made to Holly and not expressly to the plaintiff; and this difference between the two cases presents the question, raised by the defendant's objection, as to the want of privity between the plaintiff and defendant. As early as 1806 it was announced by the Supreme Court of this State, upon what was then regarded as the settled law of England, " that where one person makes a promise to another for the benefit of a third person, that third person may maintain an action upon it." Schemerhom v. Vanderheyden (1 John. E. 140) has often been reasserted by our courts and never departed from. The case of Seaman v. White has occasionally been referred to (but not by the courts), not only as having some bearing upon the question now under consideration, but as involving in doubt the soundness of the proposition stated in Schemerhom v. Vander- heyden. In that case one Hill, on the 17th of August, 1835, made his note and procured it to be indorsed by Seaman and discounted by the Phoenix Bank. Before the note matured and while it was owned by the Phoenix Bank, Hill placed in the hands of the defendant, Whitney, his draft accepted by a third party, which the defendant indorsed, and on the 7th of October, 1835, got discounted and placed the avails in the hands of an agent with which to take up Hill's note ; the note became due, Whitney withdrew the avails of the draft from the hands of his agent and appropriated it to a debt due him from Hill, and Seaman paid the note indorsed by him and brought his suit against Whitney. Upon this state of facts appearing, it was held that Seaman could not recover : first, for the reason that no promise had been made by Whitney to pay, and second, if a promise could be implied from the facts that Hill's accepted draft, with which to raise the means to pay the note, had been placed by Hill in the hands of Whitney, the promise would not be to Seaman, but to the Phoenix Bank, who then owned the note ; although, in the course of the opinion of the court, it was stated that, in all cases the principle of which was sought to be applied to that case, the fund had been appropriated by an express undertaking of the defendant with the creditor. But before concluding the opinion of the court in this case, the learned judge who delivered it conceded that an undertaking to pay the creditor may be implied from an arrange- Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 425 ment to that effect between the defendant and the debtor. This question was subsequently, and in a case quite recent, again the subject of consideration by the Supreme Court, when it was held, that in declaring upon a promise, made to the debtor by a third party to pay the creditor of the debtor, founded upon a considera- tion advanced by the debtor, it was unnecessary to aver a promise to the creditor; for the reason that upon proof of a promise made to the debtor to pay the creditor, a promise to the creditor would be implied. And in support of this proposition, in no respect distinguishable from the one now under consideration, the case of Schemerhorn v. Vanderheyden, with many intermediate cases in our courts, were cited, in which the doctrine of that case was not only approved but affirmed. The Delaware and Hudson Canal Company v. The Westchester County Bank, 4 Denio, 97. The same principle is adjudged in several cases in Massachu- setts. I will refer to but few of them. Arnold v. Lyman, 17 Mass. 400; Hall v. Marston, Id. 675; Brewer v. Dyer, 7 Gush. 337, 340. In Hall v. Marston the court say : " It seems to have been well settled that- if A promises B for a valuable consideration to pay C, the latter may maintain assumpsit for the money;" and in Brewer v. Dyer, the recovery was upheld, as the court said, " upon the principle of law long recognized and clearly estab- lished, that when one person, for a valuable consideration, engages with another, by a simple contract, to do some act for the benefit of a third, the latter, who would enjoy the benefit of the act, may maintain an action for the breach of such engagement; that it does not rest upon the ground of any actual or supposed relationship between the parties, as some of the earlier cases would seem to indicate, but upon the broader and more satisfac- tory basis, that the law operating on the act of the parties creates the duty, establishes a privity, and implies the promise and obligation on which the action is founded." There is a more recent case decided by the same court, to which the defendant has referred, and claims that it at least impairs the force of the former cases as authority. It is the case of Mellen v. Whipple, 1 Gray, 317. In that case one Eollins made his note for $500 payable to Ellis and Mayo, or order, and to secure its payment mortgaged to the payees a certain lot of ground, and then sold and conveyed 426 OPERATION OF CONTRACT. [Pabt HI. the mortgaged premises to tlie defendant, by deed in whicli it was stated that the " granted premises were subject to a mortgage for $500, which mortgage, with the note for which it was given, the said Whipple is to assume and cancel." The deed thus made was accepted by Whipple, the mortgage was afterwards duly assigned, and the note indorsed by Ellis and Mayo to the plaintiff's intes- tate. After Whipple received the deed he paid to the mortgagees and their assigns the interest upon the mortgage and note for a time, and upon refusing to continue his payments was sued by the plaintiff as administratrix of the assignee of the mortgage and note. The court held that the stipulation in the deed that Whipple should pay the mortgage and note was a matter exclu- sively between the two parties to the deed; that the sale by Eollins of the equity of redemption did not lessen the plaintiff's security, and that as nothing had been put into the defendant's hands for the purpose of meeting the plaintiff's claim on Eollins, there was no consideration to support an express promise, much less an implied one, that Whipple should pay Mellen the amount of the note. This is all that was decided. in that case, and the substance of the reasons assigned for the decision; and whether the case was rightly disposed of or not, it has not in its facts any analogy to the case before us, nor do the reasons assigned for the decision bear in any degree upon the question we are now considering. But it is urged that because the defendant was not in any sense a trustee of the property of Holly for the benefit of the plaintiff, the law will not imply a promise. I agree that many of the cases where a promise was implied were cases of trusts, created for the benefit of the promisor. The case of Felton v. Dickinson (10 Mass. 189, 190) and others that might be cited are of that class; but concede them all to have been cases of trusts, and it proves nothing against the application of the rule to this case. The duty of the trustee to pay the cestuis que trust, according to the terms of the trust, implies his promise to the latter to do so. In this case the defendant, upon ample consideration received from Holly, promised Holly to pay his debt to the plaintiff; the consideration received and the promise to Holly made it as plainly his duty to pay the plaintiff as if the money had been Chap. I. § 2.] LIMITS OP CONTRACTUAL OBLIGATION. ' 427 remitted to him for that purpose, and as well implied a promise to do so as if he had been made a trustee of property to be con- verted into cash with which to pay. The fact that a breach of the duty imposed in the one case may be visited, and justly, with more serious consequences than in the other, by no means dis- proves the payment to be a duty in both. The principle illus- trated by the example so frequently quoted (which concisely states the case in hand),, "that a promise made to one for the benefit of another, he for whose benefit it is made may bring an action for its breach," has been applied to trust cases, not because it was exclusively applicable to those cases, but because it was a principle of law, and as such applicable to those eases. It was also insisted that Holly could have discharged the defendant from his promise, though it was intended by both parties for the benefit of the plaintiff, and therefore the plaintiff was not entitled to maintain this suit for the recovery of a demand over which he had no control. It is enough that the plaintiff did not release the defendant from his promise, and whether he could or not is a question not now necessarily involved; but if it was, I think it would be found difficult to maintain the right of Holly to discharge a judgment recovered by the plaintiff upon confession or otherwise, for the breach of the defendant's promise ; and if he could not, how could he discharge the suit before judgment, or the promise before suit, made as it was for the plaintiff's benefit and in accordance with legal pre- sumption accepted by him {Berly v. Taylor, 5 Hill, 577-584, et seq.), until his dissent was shown. The cases cited, and espe- cially that of Farley v. Cleveland, establish the validity of a parol promise; it stands then upon the footing of a written one. Suppose the defendant had given his note in which, for value received of Holly, he had promised to pay the plaintiff and the plaintiff had accepted the promise, retaining Holly's liability. Very clearly Holly could not have discharged that promise, be the right to release the defendant as it may. No one can doubt that he owes the sum of money demanded of him, or that in accordance with his promise it was his duty to have paid it to the plaintiff; nor can it be doubted that whatever may be the diversity of opinion elsewhere, the adjudications in 428 OPEEATION OF CONTRACT. [PART UI. this State, from a very early period, approved by experience, have established the defendant's liability; if, therefore, it could be shown that a more strict and technically accurate application of the rules applied would lead to a different result (which I by no means concede), the effort should not be made in the face of manifest justice. The judgment should be affirmed. Johnson, C. J., Denio, Selden, Allen, and Strong, JJ., con- curred. Johnson, C. J., and Denio, J., were of opinion that the promise was to be regarded as made to the plaintiff through the medium of his agent, whose action he could ratify when it came to his knowledge, though taken without his being privy thereto. Comstock, J., and Grover, J., dissented. Judgment affirmed.* BASSETT et al. v. HUGHES. 63 WISCONSIN, 319. — 1877. Action for balance of indebtedness due originally from Hugh W. Hughes (defendant's father) to the plaintiffs. Judgment for plaintiffs. Defendant appeals. Hugh W. Hughes conveyed to defendant certain property in 1 " To give a third party who may derive a benefit from the performance of the promise an action, there must be, first, an intent by the promisee to secure some benefit to the third party, and second, some privity between the two, the promisee and the party to be benefited, and some obligation or duty owing from the former to the latter which would give him a legal or equitable claim to the benefit of the promise, or an equivalent from him personally. . . . The courts are not inclined to extend the doctrine of Lawrence v. Fox (20 N. Y. 268) to cases not clearly within the principle of that decision. Judges have differed as to the principle upon which Lawrence v. Fox and kindred cases rest, but in every case in which an action has been sustained there has been a debt or duty owing by the promisee to the party claiming to sue upon the promise. Whether the decisions rest upon the doctrine of agency, the promisee being regarded as the agent for the third party, who, by bringing his action, adopts his acts, or upon the doctrine of a trust, the promisor being regarded as having received money or other thing for the third party, is not material. In either case there must be a legal right, founded upon some obligation of the promisee, in the third party, to adopt and claim the promise as made for his benefit." — Allen, J., in Vrooman v. Turner, 69 N. Y. 280. Accord : Jefferson v. Asch, 53 Minn. 446. Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 429 consideration of which defendant executed a bond in which he covenanted to pay all his father's debts. At that time the father owed the plaintiffs the debt in suit. Defendant made one pay- ment on the debt, but refused to pay the balance. Defendant sought to. prove that his covenant with his father was rescinded by an agreement between him and his father, but the court excluded the testimony. LtoiJ, J. 1. It is settled in this State, that when one person, for a valuable consideration, engages with another to do some act for the benefit of a third person, the latter may maintain an action against the former for a breach of such engagement. This rule applies as well to covenants under seals as to simple con- tracts. McDowell V. Laev,^ 35 Wis. 171, and cases cited. In the present case, the defendant, for a valuable consideration, engaged with his father to pay the debt which the latter owed the plaintiffs, and, within the above rule, the plaintiffs may maintain this action to recover the unpaid balance of such debt. 2. It is quite immaterial, if the defendant's covenant to pay his father's debts was afterwards jescinded by mutual agreement between the parties to it. Before that was done, the plaintiffs had been informed of the covenant, and made no objection there- to; indeed, the fair inference from the testimony is, that the plaintiffs fully assented thereto ; whether it was or was not com- petent for the parties to the covenant to rescind it before such notice to and assent by the plaintiffs, we need not here deter- mine. Certainly after such notice and assent the covenant could not be rescinded to the prejudice of the plaintiffs, without their consent. To support the position that it was competent for the defendant and his father to rescind the contract and thus defeat the plaintiffs' right of action against the defendant, the learned counsel for the defendant cites two New York cases: 1 " Certainly upon the doctrine held in Carnegie v. Morrison (2 Met. 381, 396) and in Brewer v. Dyer (7 Cush. 337, 340), that the law, operating upon the act of the parties, creates the duty, establishes the privity, and implies the promise and obligation on which the action is foimded, there can be no good reason assigned for withholding contracts undfer seal from the opera- tion of the principle." — Dixon, C. J. Accord: Hughes v. Oregon By. & Nav. Co., 11 Ore. 437 ; Jefferson v. Aseh, 53 Minn. 446. Contra : Harms v. McCormick, 132 Bl. 104. 430 OPEEATION OF CONTRACT. [Part in. Kelly T. Boberts, 40 N. Y. 432, and Kelly v. Babcock, 49 Id. 318. These cases do not sustain the position. In the first, it was held that an agreement, upon no new consideration, between debtor and creditor, that the debtor shall pay the amount of his debt to a third person, to whom the creditor is indebted, is not, in the absence of any notice or acceptance of or assent to the arrange- ment by such third person, irrevocable by the creditor. In the latter case, it was held that "an agreement in a bill of sale or instrument of transfer of personal property, that a portion of the purchase money of the goods sold may be paid to and among the creditors of the vendor, without a consent or agreement on the part of the vendee thus to pay, creates no trust; the balance unpaid is a debt due the vendor, and can be reached by and held under an attachment against his property." In this case the de- fendant covenanted to pay his father's debts ; there was a new and valid consideration for such covenant; and the plaintiffs were notified that it had been made, and gave their assent thereto. Thus we find here all the conditions essential to the plaintiffs' right of action, which were T^anting in those cases. We con- clude tha,t the testimony offered to show a rescission of the cove- nant was properly rejected. » » • # » Judgment affirmed. WOOD et al. v. MOKIAETY. 15 RHODE ISLAND, 618.— 1887. Plaintiffs' petition for a new trial. DuEFBE, C. J. This is assumpsit for the price of lumber furnished to one Joshua W. Tibbetts for use in the erection of two houses for the defendant, Tibbetts having entered into a written contract with the defendant to build the houses before the lumber was furnished. Tibbetts, after going on for a while in the execution qf the contract, released or assigned it to the defendant by an instrument under seal. The instrument begins by reciting the existence of the contract, and proceeds as follows, to wit : Chap. 1. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 431 " Now know ye that, for good and sufficient reason, and in consideration of the sum of twenty-five dollars paid to me this day by said Moriarty, I hereby transfer and assign said contract back to said Thomas Moriarty, he agreeing to relieve me from further obligation under it, and I hereby releasing him from all claims or demands of whatever kind I may have or have had up to this day, August 26, 1885, against said Moriarty ; I hereby acknowledging full payment for said claims and demands, and this shall be his receipt in full for the same to date, meaning hereby to convey to the said Moriarty all my right, title, and interest into and under said contract, desiring to relieve myself from completing the work under the contract, and hereby agree to withdraw from said work on said houses, and leave them to his sole charge and care." At the trial, testimony was introduced or offered to prove the purchase of the lumber; the execution of the release or assign- ment; that the defendant, besides paying the consideration re- cited therein, agreed, by way of further consideration, to pay all bills incurred by Tibbetts on account of the contract released; that among these bills was the bill of the plaintiffs for lumber; and that notice of the arrangement between Tibbetts and the defendant was given by Tibbetts to the plaintiffs. The testi- mony as to the agreement to pay the bills incurred by Tibbetts was allowed to go in de "bene esse, and at the close of the testi- mony for the plaintiffs the court directed a nonsuit. The plain- tiffs petitioned for a new trial. The questions are, whether the plaintiffs were entitled to prove by oral testimony that the defendant agreed to pay the bills incurred by Tibbetts under his contract, by way of further consideration for the release or assignment, and if so, whether, upon proof thereof, the plaintiffs could maintain their action. The general rule is, that parol evidence is inadmissible to con- tradict, add to, subtract from, or vary the terms of any written instrument. But when the instrument is a deed, it is held to be no infringement of the rule to permit a party to prove some other consideration than that which is expressed, provided it be consistent with that which is expressed, and do not alter the effect of the instrument. 1 Cfreenleaf on Evidence, § 304. In Miller v. Goodwin (8 Gray 542) it was held that an agreement under seal by a man with a woman who afterwards became his wife, to convey certain real estate to her in consideration of past 482 OPERATION OF CONTRACT. [Paet HI. services, could be supplemented by parol proof that the agree- ment was for the further consideration of marriage between the parties. See also Villers v. Beaumont, 2 Dyer, 146 a; 2 Phillips on Evidence, 655. In McOrea v. Purmort (16 Wend. 460) the consideration of a deed conveying land was expressed to be money paid, and it was held that parol evidence was admissible to show- that the real consideration was iron of a specific quantity, valued at a stipulated price. Murray v. Smith, 1 Duer, 412; Jordan v. White, 20 Minn. 91; Tt/ler v. Carlton, 7 Me. 175; Nickersonr. Saunders, 36 Me. 413; National Exchange Bank v. Watson, 13 R. I. 91; 2 Phillipps on Evidence, 655; Cowen & Hill's Notes, No. 490. We think the nonsuit is not sustainable on this ground. The defendant contends that the agreement was within the statute of frauds, being an agreement not in writing to answer for the debt of another. But an agreement to answer for the debt of another, to come within the statute of frauds, must be an agreement with the creditor. A promise by A to B to pay a debt due from B to C is not within the statute of frauds. East- wood V. Kenyon, 11 A. & E. 438; Browne on the Statute of Frauds, § 188. The contract here, as made between Tibbetts and the defendant, was certainly not within the statute. The question, therefore, takes this form, namely, whether the plaintiffs are entitled to take advantage of the contract and bring suit upon or under it, and if so, whether to such suit the statute is not a good defense. Some of the cases cited for the plaintiffs cover both these points completely. Barker v. Bucklin, 2 Denio, 45; Johnson v. Knapp, 36 Iowa, 616; Barker v. Bradley, 42 N. Y. 316, 1 Am. Eep. 521; Beasley v. Webster, 64 111. 458; Jordan t. White, 20 Minn. 91 ; Joslin v. New Jersey Car Spring Co., 36 N. J. Law, 141 ; Townsend v. Long, 77 Pa. St. 143, 146. Similar cita- tions might be multiplied if we cared to load our opinion with them. See Browne on the Statute of Frauds, §§ 166 a, 166 b, and notes. On the other hand, the cases are numerous which hold that such an action is not maintainable for want of privity be- tween the parties. Mr. Browne, in § 166 a, says that this is the settled doctrine in England, Michigan, and Connecticut; that in North Carolina and Tennessee the question seems to remain Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 433 open ; and tliat in Massachusetts the English doctrine seems to be growing in favor, contrary to the earlier cases ; but that in the other States the creditor's right to sue has been generally recognized. The course of decision in this State favors the creditor's right to sue, and in principle, -we think, recognizes it, though it has not hitherto extended to a purely oral contract. Urquhart v. Brayton, 12 E. I. 169; Merriman v. Social Manufac- turing Co., 12 E. I. 175. Courts that allow the action generally hold that it is not affected by the statute of frauds, though, as Mr. Browne remarks, they do not unite in the reasons which they give for so holding. Mr. Browne himself suggests that the contract, as between the creditor and promisor, arises by impli- cation out of the duty of the promisor under his contract with the debtor, and that, being implied, it is not within the statute of frauds. Browne on the Statute of Frauds, § 166 b. The view accords with the doctrine of Brewer v. Dyer (7 Cush. 337), where the court remarks, p. 340, " that the law, operating on the act of the parties, creates the duty, establishes the privity, and implies the promise and obligation on which the action is founded. " The diversity of decision shows that the action cannot be main- tained without resorting to implications or assumptions which the courts do not always find it easy to allow, and which they sometimes refuse to allow. It seems to us that we shall best find the grounds, if there are any, on which the action can be maintained, by an analysis or explication of the contract with the debtor. The contract is this : A agrees with B, for a consid- eration moving from B, to pay to C the debt which B owes to C. The contract is absolute. If A does not pay the debt, and B has to pay, it is broken. It is, therefore, a contract by A to pay the debt in lieu of B, or in relief of B ; to take it on him- self, and become, so far as he can independently of C, the debtor of C in place of B. The contract, as between A and B, is not collateral, but substitutional. But, this being so, how does C, who is not a party to it, get the right to sue A upon or by reason of it? It has been held that he gets this right directly from the contract itself, because B, in making it with A, makes it for C, if C desires to accede to it, as well as for himself, so that C has only to ratify or assent to it, which he 434 OPERATION OF CONTRACT. [Part III. does unequivocally by suing on it. But, in this view, if iC accepts the contract, he njust accept it as made; that is, as a contract by which A agrees that he, instead of B, will pay the debt which B owes to G. C cannot, at the same time, assent to the contract and dissent from the terms of it. Accordingly, if he sues A on the contract, he must sue him instead of B, and cannot also sue B, and B is therefore released. But, as we have seen, another view has been taken. It has been held that the contract between A and B imposes a duty upon A to pay to C the debt which B owes to him, and that from this duty the law implies a promise by A in favor of C to pay B's debt to C. But if a promise is implied from the duty, the promise must correspond to the duty. The duty which the contract' im- poses upon A is that he, instead of B, shall pay the debt which B owes to C, and accordingly so must be the promise to be implied from it. If, therefore, C sues A upon the implied promise, he must sue him as liable, instead of B, for the debt of B to him, C; he cannot consistently sue both A and B, and consequently B is released. We do not claim that either of these views is free from diffi- culty. Either of them, however, is free from one difficulty which other views encounter, and which is a principal reason why the courts which refuse to allow the action refuse to do so. Other views give the creditor the benefit of the new contract for noth- ing, since they allow him still to retain his hold upon the original debtor; whereas, according to either of the views above set forth, the creditor cannot have the benefit of the new contract without assenting to the terms of it, thereby releasing the original debtor, so that the assent is in itself a consideration. As cases which support these views, we will refer to Warren v. Batch- elder, 16 N. H. 680 ; Bohanan v. Pope,^ 42 Me. 93. See also Clough V. Giles, 2 New Eng. Reporter^ 870. Of course, if either view be correct, the liability under the contract is not collat- eral, but direct and substitutional, and therefore not within the statute of frauds. We do not think this case is distinguishable in principle from Urquhart v. Brayton, 12 E. I. 169. The doctrine of the latter case is not only just and convenient, but also consonant with the Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGItION. 435 purposes of the parties, and we are not prepared to recede from it. As is remarked by the court in Lehow v. Simonton et al. (3 Colorado, 346), " it accords the remedy to the party who in most instances is chiefly interested to enforce the promise, and avoids multiplicity of actions." We think the declaration proper in point of form, and we do not think the nonsuit is justifiable on the ground of variance. In Warren v. Batchelder (16 N. H. 580) the court held that a demand on the defendant was requisite before the suit. Whether this is so we need not decide, for the evidence in this case shows a demand before suit. Stiness, J., non-concurring. Petition granted.* BORDEN et al. v. BOARDMAN. 157 MASSACHUSETTS, 410. — 1892. Contract. C. contracted to build a house for defendant. When the time for the first payment came defendant requested C. to have present all persons having claims against the house. Plain- tiffs had a claim for $150, but were not present, and at C.'s re- quest defendant reserved from the amount due C. $200 out of which he promised to pay plaintiffs' claim. Plaintiffs subse- quently asked defendant about the arrangement, and defendant said he held the money under the above agreement with C, but had been advised not to pay it at present. ' Defendant claimed that, upon the evidence, plaintiffs were not entitled to recover, and offered to show that a day or so after the above settlement C. had abandoned the contract, and that when plaintiffs inquired about the arrangement defendant informed them that C. had 1 " When a creditor of a partnership after dissolution thereof, knowing that one or several of the partners have agreed with the others to assume and pay the debts of the firm, takes the negotiable notes of those who should pay, in payment of the debt of the firm, he thereby cancels the claim against the fihn, and discharges the other partners. Story on Partnership, 276, 277, and 278 ; §§ 155,156 and notes ; Collier on Partnership, book 3, § 3, and cases cited ; Arnold v. Camp, 12 J. R. 409 ; Waydell v. Luer, 3 Denio, 410." — Grover, J., in MilUrd v. Thorn, 56 N. Y. 402, 406. 436 OPERATION OF CONTRACT. [Part UI. broken his contract, and that defendant was damaged thereby. This evidence was excluded and a verdict directed for plaintiffs. If the ruling was right, the judgment was to be entered on the verdict ; otherwise, judgment for defendant. MoETON, J. The evidence offered in bar was rightly excluded. The subsequent failure of Collins to perform his contract would not release the defendant from the obligation, if any, which he had assumed to the plaintiffs, in the absence of any agreement, express or implied, that the money was to be paid to the plain- tiffs only in case Collins fulfilled his contract. Cook v. Wolfen- dale, 105 Mass. 401. There was no evidence of such an agree- ment. The other question is more difficult. The case does not present a question of novation ; for there was no agreement among the plaintiffs, Collins, and the defendant that the defendant should pay to the plaintiffs, out of the money in his hands and due to Collins, a specific sum, and that thenceforward the defendant should be released from all liability for it to Collins, and should be liable for it to the plaintiffs. Neither was there any agree- ment between the plaintiffs and the defendant that the latter would pay the money to them. The conversation between one of the plaintiffs and the defendant cannot be construed as afford- ing evidence of such an agreement. Coupled with the defend- ant's admission that he was holding money for the plaintiffs was his repudiation of any liability to the plaintiffs for it. Neither can it be claimed that there was an equitable assignment of the amount in suit from Collins to the plaintiffs. There was no order or transfer given by him to them; nor was any notice of the arrangement between him and the defendant given by him to the plaintiffs. Lazarus v. Swan, 147 Mass. 330. The case upon this branch, therefore, reduced to its simplest form, is one of an agreement between two parties, upon sufficient considera- tion it may be between them, that one will pay, out of funds in his hand belonging to the other, a specific sum to a third person, who is not a party to the agreement, and from whom no consid- eration moves. It is well settled in this State that no action lies in such a case in favor of such third party to recover the money so held of the party holding it. Exchange Bank v. Bice, Chap. I. § 2.] LIMITS OF CONTRACTUAL OBLIGATION. 437 107 Mass. 37, and cases cited; Sogers v. Union Stone Co., 130 Mass. 581; New England Dredging Co. v. BocJcport Granite Co., 149 Mass. 381; Marston t. Bigelow, 150 Mass. 45; Saunders v. Saunders, 164 Mass. 337. Certain exceptions which were sup- posed to exist have either been shown not to exist, or have been confined within narrower limits. Exchange Bank v. Rice, and Marston v. Bigelow, ubi supra. We have assumed that the sum which the defendant agreed with Collins to pay the plaintiffs was specific. But it is to be observed that the agreement between the plaintiffs and Collins was that it should not cost more than one hundred and fifty dol- lars to put the building back. Collins told the defendant that the sum was due to the plaintiffs. The defendant reserved two hundred dollars. It may well be doubted, therefore, whether the defendant had in his hands a specific sum to be paid to the plaintiffs, or whether he agreed with Collins to hold and pay the plaintiffs a specific sum. If the sum was not specific, the plain- tiffs do not claim, as we understand them, that they can recover. Judgment for the defendant.^ 1 Accord : Pipp v. Beynolds, 20 Mioh. 88 ; Hoisted v. Francis, 31 Mich. 113 ; Linneman v. Moross, 98 Mich. 178 ; Chamberlain v. Ins. Co. , 55 N. H. 249 {semhle). " In all the cases since Tioeddle v. Atkinson (1 B. & S. 393), in which a person not a party to a contract has brought an action to recover some bene- fit stipulated for him in it, he has been driven, in order to avoid being ship- wrecked upon the common law rule which confines such an action to parties and privies, to seek refuge under the shelter of an alleged trust in his favor." — Street, J., in Faulkner v. Faulkner, 23 Ont. Rep. 252, 258. 438 OPERATION OF CONTEACT. [Past HI. CHAPTER II. THE ASSIGNMENT OF CONTRACT. § 1. Aasigiunent by act of the parties. (■i.) Assignment of liabilities. AEKANSAS VALLEY SMELTING CO. ii. BELDEN MINING CO. r< ' 127 UNITED STATES, 379. — 1888. Action for damages for breach of contract. Demurrer to com- plaint sustained. Plaintiff brings error. Defendants contracted with Billing and Eilers to sell and deliver to them 10,000 tons of carbonated lead ore at the rate of 50 tons a day, on condition that "all ore so delivered shall at once, upon the delivery thereof, become the property of the second party." The ore after delivery vras to be sampled and assayed in lots of about 100 tons each, the price to be fixed in accordance with the state of the New York market on the day of the delivery of samples. Defendants delivered some ore to Bill- ing and Eilers under this contract, when the firm was dissolved and the business, together with the above contract, assigned to G. Billing, to whom defendants continued to deliver ore. The business, together with the above contract, was then assigned by G. Billing to plaintiff, who notified defendant of the fact. Defendant refused to deliver to plaintiff and notified plaintiff that it considered the contract canceled and annulled. Gkat, J. If the assignment to the plaintiff of the contract sued on was valid, the plaintiff is the real party in interest, and as such entitled, under the practice in Colorado, to maintain this action, in its own name. Eev. Stat. § 914; Colorado Code of Civil Procedure, § 3; Albany & Rensselaer Co. v. Lundberg, 121 U. S. 451. The vital question in the case, therefore, is whether the Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 439 contract between the defendant and Billing and Eilers was assign- able by the latter, under the circumstances stated in the complaint. At the present day, no doubt, an agreement to pay money, -or to deliver goods, may be assigned by the person to whom the money is to be paid or the goods are to be delivered, if there is nothing in the terms of the contract, whether by requiring some- thing tb be afterwards done by him, or by some other stipulation, which manifests the intention of the parties that it shall not be assignable. But every one has a right to select and determine with whom he will contract,' and cannot have another person thrust upon him without his consent. In the familiar phrase of Lord Denman, "you have the right to the benefit you anticipate from the char- acter, credit, a;nd substance of the party with whom you contract." Humble r. Hunter, 12 Q. B. 310, 317; Winchester v. Howard, 97 Mass. 303, 305; Boston Ice Co. v. Potter, 123 Mass. 28; King v. Batterson, 13 E. I. 117, 120; Lansden v. McCarthy, 45 Missouri, 106. The rule upon this subject, as applicable to the case at bar, is well expressed in a recent English treatise. "Eights arising out of contract cannot be transferred if they are coupled with liabilities, or if they involve a relation of personal confi- dence such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided." Pollock on Contracts (4th ed.), 425. The contract here sued on was one by which the defendant agreed to deliver ten thousand tons of lead ore from its mines to Billing and Eilers at their smelting works. The ore was to be delivered at the rate of fifty tons a day, and it was expressly agreed that it should become the property of Billing and Eilers as soon as delivered. The price was not fixed by the contract, or payable upon the delivery of the ore. But as often as a hundred tons of ore had been delivered, the ore was to be assayed by the parties or one of them, and, if they could not agree, by an umpire ; and it was only after all this had been done, and accord- ing to the result of the assay, and the proportions of lead, silver, silica, and iron, thereby proved to be in the ore, that the price was to be ascertained and paid. During the time that must elapse between the delivery of the ore and the ascertainment and 440 OPERATION OF CONTRACT. [Part III. payment of the price, the defendant had no security for its pay- ment, except in the character and solvency of Billing and Eilers. The defendant, therefore, could not be compelled to accept the liability of any other person or corporation as a substitute for the liability of those with whom it had contracted. The fact that upon the dissolution of the firm of Billing and Eilers, and the transfer by Eilers to Billing of this contract, together with the smelting works and business of the partnership, the defendant continued to deliver ore to Billing according to the contract, did not oblige the defendant to deliver ore to a stranger, to whom Billing had undertaken, without the defend- ant's consent, to assign the contract. The change in a partner- ship by the coming in or the withdrawal of a partner might perhaps be held to be within the contemplation of the parties originally contracting; but, however that may be, an assent to such a change in the one party cannot estop the other to deny the validity of a subsequent assignment of the whole contract to a stranger. The technical rule of law, recognized in Murray v. Harway (56 F. Y. 337), cited for the plaintiff, by which a lessee's express covenant not to assign has been held to be wholly deter- mined by one assignment with the lessor's consent, has no application to this case. The cause of action set forth in the complaint is not for any failure to deliver ore to Billing before his assignment to the plaintifiE (which might perhaps be an assignable chose in action), but it is for a refusal to deliver ore to the plaintiff since this assignment. Performance and readiness to perform by the plain- tiff and its assignors, during the periods for which they respec- tively held the contract, is all that is alleged; there is no allegation that Billing is ready to pay for any ore delivered to the plaintiff. In short, the plaintiff undertakes to step into the shoes of Billing, and to substitute its liability for his. The defendant had a perfect right to decline to assent to this, and to refuse to recognize a party, with whom it had never contracted, as entitled to demand further deliveries of ore. The cases cited in the careful brief of the plaintiff's counsel, as tending to support this action, are distinguishable from the case at bar, and the principal ones may be classified as follows: Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 441 First. Cases of agreements to s6ll and deliver goods for a fixed price, payable in cash on delivery, in wliicli the owner would receive the price at the time of parting with his property, nothing further would remain to be done by the purchaser, and the rights of the seller could not be affected by the question whether the price was paid by the person with whom he originally contracted or by an assignee. Sears v. Conover, 3 Keyes, 113, and 4 Abbot (N. Y. App.), 179; Tyler v. Barrows, 6 Eobertson (N. Y.), 104. Second. Cases upon the question how far executors succeed to rights and liabilities under a contract of their testator. Hambly V. Trott, Cowper, 371, 375; Wentworth v. CocTc, 10 Ad. & El. 42, and 2 Per. & Dav. 251; Williams on Executors (7th ed.), 1723- 1725. Assignment by operation of law, as in the case of an executor, is quite different from assignment by act of the party; and the one might be held to have been in the contemplation of the parties to this contract, although the other was not. A lease, for instance, even if containing an express covenant against assignment by the lessee, passes to his executor. And it is by no means clear that an executor would be bound to perform, or would be entitled to the benefit of, such a contract as that now in question. Dickinson v. Calahan, 19 Penn. St. 227. Third. Cases of assignments by contractors for public works, in which the contracts, and the statutes under which they were made, were held to permit all persons to bid for the contracts, and to execute them through third persons. Taylor v. Palmer, 31 California, 240, 247; St. Louis v. Clemens, 42 Missouri, 69; Philadelphia v. Lockhardt, 73 Penn. St. 211 ; Devlin v. New York, 63 N. Y. 8. Fourth. Other cases of contracts assigned by the party who was to do certain work, not by the party who was to pay for it, and in which the question was whether the work was of such a nature that it was intended to be performed by the original con- tractor only. Bobson v. Drummond, 2 B. & Ad. 303; British Waggon Co. v. Lea, 5 Q. B. D. 149; Parsons v. Woodward, 2 Zabriskie, 196. "Without considering whether all the cases cited were well decided, it is sufficient to say that none of them can control the decision of the present case. Judgment affirmed. 442 OPERATION OF CONTEACT. [Part Ul. (u.) Assignment of rights. a. At common law. HEATON t). ANGIER. 7 NEW HAMPSHIRE, 397. — 1835. Assumpsit for a wagon sold and delivered. Verdict for plain-- tiff, subject to the opinion of the court upon the following case. The plaintiil, on the 29th of March, 1832, sold the wagon to the defendant at auction for $30.25. Immediately afterwards, on the same day, one John Chase bought the wagon of the defendant for $31.25. Chase and the defendant then went to plaintiff, and Chase agreed to pay the f 30.26 to the plaintiff for the defendant, and the plaintiff agreed to take Chase as paymaster for that sum; and thereupon Chase took the wagon and went away. Green, J. In Tatlock v. Harris (3 D. & E. 180), BuUer, J., said : " Suppose A owes B £100, and B owes C £100, and the three meet and it is agreed between them that A shall pay the £100, B's debt is extinguished, and C may recover the sum iipm A." The case thus put by Buller is the very case now before us. Heaton, Angier, and Chase being together, it was agreed between them that the plaintiff should take Chase as his debtor for the sum due from the defendant. The debt due to the plaintiff from the defendant was thus extinguished. It was an accord executed'. And Chase, by assuming the debt due to the plaintiff, must be considered as having paid that amount to the defendant, as part of the price he was to pay the defendant for the wagon. The agreement of the plaintiff to take Chase as his debtor was clearly a discharge of the defendant. Wilson v. Coupland, 6 B. & A. 228; Wharton v. Walker, 4 B. & C. 163; Cuxon v. Chad- ley, 3 B. & C. 691. A new trial granted. Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 443 McKINNEY V. ALVIS. 14 ILLINOIS, 33. — 1852. Action fox the value of certain rails. Judgment for plaintiff. Tkumbuli/, J. One Piper, since deceased, had a claim on McKinney for eight hundred rails, which Alvis, under a claim of purchase from Piper, called on McKinney to pay to him. McKinney agreed to deliver the rails to Alvis, but failing to comply with his contract, Alvis sued to recover their value. The important question in this case, and the only one we deem it necessary to notice is, can Alvis maintain the action in his own name? It is a general rule that choses in action, except negotiable instruments, are not assignable at law so as to authorize the assignee to maintain an action in his own name ; but it is insisted that an express promise, as in this case, to pay the debt to the assignee, forms an exception to the rule. To constitute an exception, however, in a case like this, requires something more than a mere promise on the part of the debtor to pay to the assignee; there must be a communication, and a new arrange- ment between all the parties, by which the assignor's claim upon his debtor, and his liability to the assignee, are extinguished. In this case there was no communication between Piper and McKinney; nor did Alvis agree to release Piper, and look alone to McKinney for the debt. It is not like the ease put in the books, where it is said : " Suppose A owes B £100, and B owes C £100, and the three meet, and it is agreed between them that A shall pay C the £100, B's debt is extinguished, and C may recover that sum against A." Chitty on Contracts, 482, 613; Wharton v. Walker, 4 Barnwell & Cresswell, 163; Butterjield v. Hartshorn, 7 N. H. 345. Nor isut a case where one person can be said to have withheld the money of another, and thereby sub- jected himself to an action at the suit of the latter for money had and received; but it is an attempt to maintain an action in his own name, by the assignee of a contract for the delivery of certain articles of personal property, on the ground alone of an express parol promise by the debtor to pay the property to him. No 444 OPERATION OF CONTRACT. [Pakt III. consideration for the promise is shown by the record, for it does not appear that the defendant was released by it from his liability to Piper, nor is there any legitimate evidence in the record of a transfer of the claim by Piper to Alvis. Judgment reversed, and cause remanded. COMPTON V. JONES. i COWEN (N. Y.), 13. — 1825. Assumpsit. Demurrer to declaration overruled. Defendant made a bond to one Wood, promising to pay Wood a certain sum. Wood afterward assigned the bond to the plaintiff. Plaintiff gave notice of the assignment to defendant, who prom- ised to pay the amount to plaintiff. Savage, C. J., remarked, that what was said by the court in the authority cited by the defendant's counsel, was intended of a case where the action was brought by the party to the specialty. And the whole court were clear that the action was sustainable, being on a promise to the assignee. Judgment for the plaintiff.* JESSEL V. WILLIAMSBURGH INS. CO. 3 HILL (N. Y.), 88. — 1842. Assumpsit on a fire insurance policy. Plaintiff nonsuited, and judgment for defendants. The policy was issued to S. and contained a provision that it should not be assignable without the consent of the company. The company gave their consent to the assignment to plaintiff. Per Curiam. We know of no principle 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, the action for a breach must be brought in the name of the assignor, except where the defendant has 1 Accord : Crocker v. Whitney, 10 Mass. 316. Chap. U. § 1.] ASSIGNMENT OF CONTRACT. 445 expressly promised the assignee to respond to him. Compton v. Jones, 4 Co wen, 13; 1 Ohitty's Plead. 9, 10; Innes v. Dunlop, 8 Term Rep. 595; Currier v. Hodgdon, 3 N. H. 82; Wiggin v. Dam- rell, 4 Id. 69; Skinner v. Somes, 14 Mass. 107; Mowry v. Todd, 12 Id. 281; Crocker v. Whitney, 10 Id. 316; Dubois v. Doubleday, 9 Wend. 317; and see OMi. on Cont. 614, note 1, 5th Am. ed. In Changer v. The Howard Insurance Company (5 Wend. 200, 202) the point now raised was discussed, and, we think, decided against the present plaintiff. The argument that the policy in question originally contemplated an assignment, would be equally cogent in all cases, for aught we see, of a promise in form to one and his assigns; and yet it is settled that the latter words do not impart a negotiable quality to the promise so as to enable the assignee to sue upon it in his own name. Skinner v. Somes, 14 Mass. 107-8. The judgment below is clearly right and should not be disturbed. Judgment affirmed. ^ HOUGH V. BARTON. 20 VERMONT, 455.— 1848. Indebitatus assumpsit for money had and received. Verdict for plaintiff. Exceptions by defendant. Defendant made and delivered a note to Hough, which was by him transferred to K., and by K. to Barker, who -was the real party in interest in this suit. The note was lost, and defendant offered to prove that, after its transfer to Barker, Hough, the nominal plaintiff, had admitted that it was a negotiable note. This evidence was excluded. Davis, J. It was conceded on trial that Barker was the owner of the note given by the defendant to Hough, and that the suit was commenced and prosecuted by him, for his own benefit, though in the name of the payee. Although the language of the record is not perfectly explicit on this subject, it may reasonably be inferred, that, at the time of bringing the action, and before, ^Accord: Chamberlain v. Ins. Co., 55 N. H. 249. Cf. Eastings v. Ins. Co., 73 N. Y. 141 ; Sartford Ins. Co. v. Olcott, 97 111. 439. 446 OPERATION OF CONTRACT. [Part Itt the defendant was apprised of the transfer to Kidder, and after- wards by him to Barker. Under such circumstances, although a different rule prevails in England, yet in this State and in most of the American States, it is regarded as inequitable and unjust to permit the defendant to avail hiihself of any discharge, release, retraxit, or admission, by the nominal plaintiff, to defeat the action. It was not competent for Hough to make admissions, after suit brought, to prejudice the rights of the real party in interest. Sargeant v. Sargeant et al., 18 Vt. 371;- Cow. and Hill's notes to Phil. Ev. 172; 1 Greenl. Ev. § 172-3, and note (2). # * » » * In this very case, so far as appears, the note was neither payable to order, or bearer, and yet Barker, by reason of the blank indorsement, obtained a legal right to collect and appropriate the contents to his own exclusive use, — not, it is true, by a suit' in his own name, but by using the name of Hough for that purpose. To this Hough consented; but the right would have been the same, had there been no consent. Having transferred the note' for value, his consent to the use of his name, on proper indemnity against costs, results by implication; and, as a necessary conse- quence, he is rendered incapable of impairing that right by discharge, release, or other act. » » » ♦ » The judgment of the county court is therefore affirmed.* 1 " The general principle deduoible from the cases and from the ordinary- practice is that when one person has an equitable right or claim against an- other, which he can obtain only by a suit in the name of a third person, he may use the name of that person in an action to enforce his right. And such third person cannot control the suit, nor will his admission, subsequent to the time he ceased to have an interest, be evidence to defeat it. Eastman v. Wright, 6 Pick. 322 ; Jones v. Witter, 13 Mass. 304 ; Hackett v. Martin, 8 Greenl. 77 ; Matthews v. Houghton, 1 Fairf. 420 ; Frear v. Evertson, 20 Johns. 142. But the holder must furnish to the plaintiff on the record ample indemnity against costs, if required. "— Parker, C. J., in Webb v. Steele, 13 N. H. 230, 236. See also Halloran v. Whitwitib, 43 Vt. 806 ; Fay v. Chiynon, 131 Mass. 81 ; Dazey v. Mills, 5 Gilm. (111.) 67. Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 447 ROCHESTER LANTERN CO. v., STILES AND PARKER PRESS COv 136 NEW YORK, 209. — 1892. Action for damages for alleged breach of contract. Judgment for plaintiff afB.rnied at General Term. Defendaiit appeals. Eakl, C. J. . . . In disposing of this case, we must take the facts as found by the referee, and they are as follows : On the 19th day of March, 1887, James H. Kelly entered into a con- tract with the defendant whereby it was to make and deliver to him certain dies to be used by him in the manufacture of la,nterns ; that it agreed to make and deliver the dies within a reasonable time, that is, within five weeks from the time of the order, to manufacture and deliver the same ; that the plaintiff was incorporated shortly prior to the 27th day of August, 1887, and on the twenty-ninth day of' that month Kelly duly assigned to the plaintiff his contract with the defendant, and all his rights and claims thereunder; that the plaintiff failed to establish by evidence that at or prior to the time of making the contract, the defend- ant was informed that any corporation was intended to be organized, or that the contract was made for the use or benefit of any other person or corporation than Kelly; that the first notification received by the defendant that the plaintiff had any interest in the contract, or that such a corporation as the plaintiff existed, so far as was proven upon the trial, was given to it by a letter dated March 22, 1888, and signed ' Roch- ester Lantern Company, by James H. Kelly, Piesident ' ; that from time to time after making the contract samples were sent by Kelly to the defendant and dies were shipped to him by the defendant ; that the last sample for the last die to be made was sent by Kelly to the defendant on the 29th day of July, 1887; that by the conduct of Kelly and the defendant performance of the contract within the time originally stipu- lated was waived, and the contract except as to time of performance was regarded as still in force at the date of the assignment thereof ; that a reasonable time in which the defendant could have carried out and per- formed the contract after August 29, 1889, was five weeks, which expired October third ; that Kelly -was a manufacturer of lanterns in Roches- ter and required the dies for the manufacture of lanterns which he designed to put upon the market as the defendant was informed and well knew, and that the plaintiff after its incorporation succeeded him in the business of manufacturing lanterns ; that the defendant failed to carry out the contract and to furnish dies as thereby required ; that the plaintiff, for the sole purpose of carrying on the business of manufactur- ing; the lanterns which it was intended that these dies should make. 448 OPERATION OF CONTRACT. [Part III. entered into certain obligations and incurred certain liabilities as follows : It paid one Butts for rent of room from October 3 to November 1, 1887, the sum of $31.86 ; it paid one Broad; an employe, for his wages from October 3, 1887, to March 24, 1888, the sum of |250 ; and one Briston, an employe, for his wages during the same time the same sum; it paid to Crouch & Sons for the rent of premises from November 1, 1887, to March 24, 1888, f 278.46 ; that by reason of defendant's failui-e to perform the contract as agreed by it the plaintiff was unable to manufacture any lan- terns for the market until after the commencement of this action on the 24th day of March, 1888, and that the plaintiff by reason of such failure sustained loss in the sums above mentioned which it actually paid, and the referee awarded judgment for the amount of the items above specified. We do not think these facts sufficient to justify the recovery of the items of damages specified. There had been no breach of the contract at the time of the assignment thereof to the plaintiff, and at that time Kelly had no claim against the defendant for damages. After the assignment Kelly had no interest in the contract and the defendant owed him no duty and could come under no obligation to him for damages on account of a breach of the contract by it. There is no doubt that Kelly could assign this contract as he could have assigned any other chose in action, and by the assign- ment the assignee became entitled to all the benefits of the con- tract. Devlin v. Mayor &c. 63 N. Y. 8. The contract was not purely personal in the sense that Kelly was bound to perform in person, as his only obligation was to pay for the dies when delivered, and that obligation could be discharged by any one. He could not, however, by the assignment, absolve himself from all obligations under the contract. The obligations of the con- tract still rested upon him, and resort could still be made to him for the payment of the dies in case the assignee did not pay for them when tendered to it. After the assignment of the contract to the plaintiff the defendant's obligation to perform still re- mained, and that obligation was due to the plaintiff, and for a breach of the obligation it became entitled to some damages, and so we are brought to the measure of damages in such a case as this.^ 1 " We have not overlooked the distinction pointed out by counsel between executory contracts and contracts which have been executed on one side. What we have said applies where something remains to be done by the party Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 449 It is frequently difficult in the administration of tlie law to apply the proper rule of damages, and the decisions upon the subject are not harmonious. The cardinal rule undoubtedly is that the one party shall recover all the damage which has been occasioned by the breach of the contract by the other party. But this rule is modified in its application by two others : The dam- ages must flow directly and naturally from the breach of the con- tract, and they must be certain, both in their nature and in respect of the cause from which they proceeded. Under this latter rule speculative, contingent, and remote damages which cannot be directly traced to the breach complained of are excluded. Under the former rule such damages only are allowed as the parties may fairly be supposed when they made the con- tract to have contemplated as naturally following its violation. Hadley v. Baxendale, 9 Excheq. 341; Griffin v. Colver, 16 N. Y, 489; Leonard v. N. Y. &c. Tel. Co., 41 Id. 544, 566; Cassidy v. Le Feme, 45 Id. 562. The natural and obvious consequence of a breach of this con- who assigns. And as a matter of course (since a party cannot release him- self from an obligation by his own act without the consent of the other party), it is only the benefit of a contract which can be assigned. Where there is a bua-ien, it cannot be transferred without the consent of the other party. Cva. Code, sec. 1457." — Hayne, C, in La Bue v. Groezinger, 84 Cal. 281. , " When the contract is executory in its nature, and an assignee or personal representative can fairly and sufficiently execute all that the original con- tractor could have done, the assignee or representative may do so and have the benefit of the contract. ... In principle it vFOuld not impair the rights of the assignee, or destroy the assignable quality of the contract or claim, that the assignee, as between himself and the assignor, has assumed some duty in performing the conditions precedent to a perfected cause of action, or is made the agent or substitute of the assignor in the performance of the contract. If the service to be rendered or the condition to be performed is not necessarily personal, and such as can only with due regard to the intent of the parties, and the rights of the adverse party, be rendered or performed by the original contracting party, and the latter has not disqualified himself from the performance of the contract, the mere fact that the individual representing and acting for him is the assignee, and not a mere agent or servant, will not operate as a rescission of, or constitute a cause for, termi- nating the contract. Whether the agent for performing the contract acts under a naked power, or a power coupled with an interest, cannot affect the character or vary the effect of the delegation of power by the original con- tractor." — Allen, J., in Devlin v. Mayor, 63 N. Y. 8, 17-18, 15-16. GO 450 OPERATION OF CONTRACT. [Part III. tract on the part of tlie defendant would be to compel Kelly or his assignee to procure the dies from some other manufacturer, and the increased cost of the dies, if any, would be the natural and ordinary measure of the damages; and such would be the damages which it could be fairly supposed the parties expected, when they made the contract, would flow from a breach thereof. It does not appear that Kelly was engaged in the manufacture of lanterns when the contract was made, or that he contemplated engaging in the business until dies were furnished. No fact is found showing that the defendant had any reason to suppose that he would hire any workmen or persons before the dies were furnished, and it cannot be said that it was a natural and proxi- mate consequence of a breach of the contract that he would have idle men or unused real estate causing him the expenses now claimed. Much less can it be supposed that the defendant could, when the contract was made, anticipate that the contract would be assigned and that the assignee would employ men and premises to remain idle after the defendant had failed to perform the con- tract and in consequence of such failure. Such damages to the assignee could not have been contemplated as the natural and proximate consequence of a breach of the contract. If we should adopt the rule of damages contended for by the plaintiff, what would be the limits of its application? Suppose instead of employing two men, the plaintiff had projected an extensive busi- ness in which the dies were to be used, and had employed one hundred men, and had hired or even constructed a large and costly building in which to carry on the business, and had kept the men and the building unemployed for months, and, perhaps, years, could the whole expense of the men and building be visited on the defendant as a consequence of its breach of con- tract? If it could, we should have a rule of damages which might cause ruin to parties unable from unforeseen events to perform their contracts. The damages allowed by the referee in this case are special damages, not flowing naturally from the breach of the contract, and, we think, the only damages such an assignee in a case like this can recover is the difference between the contract price of these dies and the value or cost of the dies if furnished according Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 451 to the contract. Even if Kelly could have recovered special damages, we see no ground for holding that his assignee, of whose connection with the contract the defendant had no notice, could recover special damages not contemplated when the contract was made. We are, therefore, of opinion that the award of damages made by this judgment was not justified by the facts found, and that the judgment should be reversed and a new trial granted, costs to abide event. All concur. Judgment reversed.^ HAYES V. WILLIO. 4 DALY (N.Y. C. P.), 259. — 1872. Injunction to restrain defendant from playing at any other theater than the plaintiff's. Motion to vacate injunction denied. Defendant appeals. Also, appeal from an order denying a motion to vacate a writ of ne exeat against the defendant. K. engaged defendant to appear as a contortionist, bird imita- tor, and pantomimist under K.'s personal control at such places as K. might direct. K. assigned the contract to plaintiff. EoBiNSON, J. . . . As a general rule, a contract for the performance of personal duties or services is unassignable, so as to vest in the assignee the right to compel its execution. Ch. on Cont. 739; Burrill on Assignments, 67, and eases cited, note 3. As to slaves it is different; but as to apprentices, an assignment of their indentures merely operates as a covenant that they shall serve the assignees (Mckersan v. Howard, 19 Johns. 113), except as to the indenture of an infant immigrant to pay his passage, as authorized by 2 R. S. 156, §§ 12, 13, 14; and as to convicts, the right of control still remains in the officer of the State. Morner v. Wood, 23 N. Y. 350. These considerations do not appear to have been presented on the motion for the orders for the injunction and ne exeat, now under review; they are controlling as to the merits of this con- troversy, and without discussing the other questions presented 1 See oases on " Damages," post, Pt. V., Ch. III., § 3 (i.). 452 OPERATION OF CONTRACT. [Part HI. on the argument and in the opinion of the judge who granted the orders, these orders should be reversed, with costs, and the ne exeat superseded and discharged. Order reversed.^ b. In equity. CARTER et al. v. UNITED INS. CO. 1 JOHNSON'S CHANCERY (N. Y.), 463. — 1815. Bill in equity by plaintiffs as assignees of an insurance policy. Demurrer to bill on the ground that the plaintiffs had an ade- quate remedy at law. The policy was issued to Titus & Gibbs on 500 barrels of flour from Newport to St. Jago de Cuba on board the Spanish brig Patriota, which was captured by a Carthagena privateer. Titus & Gibbs assigned the policy to the plaintiffs in trust for credit- ors. Defendants refused to pay the loss. The Chancellok. The demand is properly cognizable at law, and there is no good reason for coming into this court to recover on the contract of insurance. The plaintiffs are entitled to make use of the names of Gibbs & Titus, the original assured, in the suit at law ; and the nominal plaintiffs would not be permitted to defeat or prejudice the right of action. It may be said here, as was said by the chancellor in the analogous case of Dhegetoft v. The London Assurance Company (Mosely, 83), that, at this rate, all policies of insurance would be tried in this court. In that case the policy stood in the name of a nominal trustee ; but that was not deemed sufficient to change the juris- diction; and the demurrer to the bill was allowed, and the decree was afterwards affirmed, in Parliament. 3 Bro. P. C. 526. The bill in this case states no special ground for equitable relief; nor is there any discovery sought which requires an answer. Bill dismissed with costs.' 1 For assignment of salary, pension, or fees of public ofBce, see Bowery N. B. v. Wilson, 122 N. Y. 478 ; fees of executor, Matter of Worthington, 141 N. Y. 9. For assignment of insurance policies, see Warnock v. Davis, 104 U. S. 775, ante, p. 333. 2 "We have lately decided, after full consideration of the authorities, Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 453 FIELD V. THE MAYOE &c. OE NEW YORK et al. 2 SELDEN (6 N. Y.), 179. — 1852. Bill in equity. Bill dismissed by trial court. Decree reversed in Supreme Court. Defendants appeal. Defendant Bell had certain contracts with defendant corpora- tion for printing to be done by bim for the city. On March 14, X842, he assigned to G. all bills that might become due to him for job printing, paper, or stationery done or furnished the defendant corporation, to the amount of $1500, after two other assignments should be paid, viz., one for $1500 to L., and one of $300 to C. Afterward on April 28, 1842, G. assigned the claim to plaintiff. Plaintiff gave the city notice of the claim on April 30, 1842. Bell did work for the city after the assignment, and after the notice, but the city paid the amount due for it to Bell. Bell was insolvent. The report of the referee showed that there became due to Bell after March 14, 1842, and after providing for the claims of L. and C. far more than enough to satisfy plaintiff's claim. Wells, J. By the assignment from Bell to Garread, of March 14, 1842, it was intended to transfer to and vest in the latter, the right and interest of the former in and to all the bills which might thereafter become due to him from the corporation of the city of New York, for job printing, paper, or stationery, done or furnished by Bell either before or after the date of the assign- ment, to the amount of $1500 ; subject to the two prior assign- ments, to Lloyd & Hopkins, and to Coit. By the assignment from Garread to the respondent of April 28th, and the release from the former to the latter, of December 27tii, 1842, the latter acquired all the right and interest of the former in the first assignment. The case shows, that at the time of the commencement of the suit in the court of chancery, bills of the description mentioned that an assignee of a chose in action on which a complete and adequate Temedy exists at law cannot, merely because his interest is an equitable one, bring a suit in equity for the recovery of the demand. Hayward v. Andrews, 106 XJ. S. 672. He must bring an action at law in the name of the assignor to his own use." — Mr. Justice Bradley, in New York &e. Go. v. Memphis Water Co., 107 U. S. 205, 214. See also Walker v. Brooks, 125 Mass. 241. 454 OPERATION OF CONTRACT. [PART UI. had become due from the corporation to Bell, to an amount more than sufficient to satisfy all three of the assignments. These bills appear to have accrued, and most of the services and materials upon which they arose appear to have been ren- dered and delivered, after the date of the assignment from Bell to Garread. One of the questions presented by this appeal is whether the court of chancery had jurisdiction to decree payment by the corporation of the city of New York to the respondent of his claim. That it had such jurisdiction seems to be in accordance with reason and the theory of equity jurisprudence. 1. The assignment of Bell to Garread was valid and operative as an agreement, by which Garread and his assigns became entitled to receive payment of the bills in question, when the same should become due, to the amount indicated in the assign- ment subject to the two prior assignments. It did not operate as an assignment in prcesenti of the choses in action, because they were not in existence, but remained in possibility merely. A possiblity, however, which the parties to the agreement ex- pected would, and which afterwards did in fact ripen into an actual reality; upon which, by force of the agreement, an equitable title to the benefit of the bills thus mature and due, became vested in the respondent as assignee of Garread. Story's Eq. Jur. §§ 1040, 1040 6, 1055; Mitchell v. Winslow, 2 Story's Eep. 630; Langton v. Horton, 1 Hare, 549. It is contended by the counsel for the appellants, that the assignment of Bell to Garread did not pass any interest which was the subject of an assignment, for the reason that there was no contract at the time between Bell and the corporation of the city by which the latter was under any binding obligation to furnish the former with job printing or to purchase of him paper or sta- tionery ; and that therefore the interest was of too uncertain and fleeting a character to pass by assignment. There was indeed no present, actual, potential existence of the thing to which the assignment or grant related, and therefore it could not and did not operate eo instanti to pass the claim which was expected thereafter to accrue to Bell against the corporation; but it did nevertheless create an equity, which would seize upon those claims Chap. n. §1.] ASSIGNMENT OF CONTRACT. 455 as they should arise, and would continue so to operate until the object of the agreement was accomplished. On this principle an assignment of freight to be earned in future, will be upheld and enforced against the party from whom it becomes due. Story's Eq. Jut. § 1055, and authorities there cited; Langton v. Horton, and Mitchell v. Winslow, supra; Story on, Bailments, § 294. Whatever doubts may have existed heretofore on this subject, the better opinion, I think, now is, that courts of equity will support assignments, not only of choses in action, but of contingent in- terests and expectations and of things which have no present, actual existence, but rest in possibility only, provided the agree- ments are fairly entered into, and it would not be against public policy to uphold them. Authorities may be found which seem to incline the other way, but which upon examination will be found to have been overruled, or to have turned upon the ques- tion of public policy. 2. A bill in equity was the proper remedy for the respondent in this case for the following reasons : (1) The nature of the claim is one peculiarly of equitable cog- nizance. It was an equity only in relation to things not yet in possession, or in being, in the nature of a lien, which must be enforced through judicial process before it could be enjoyed, and must therefore of necessity be adjudicated in a court of equity. If the claims of Bell against the city had accrued and been in being at the time of the assignment, and the assignment had been of any specific entire claim, and perhaps if it had been of all claims then due from the city to Bell, the remedy of Garread, hio assignee, might, and perhaps in general must, have been at law. But all the cases where the contract has been in relation to things not in existence at the time, and which were in expec- tancy and possibility merely, show that their adjudication be- longs exclusively to a court of equity. (2) But it seems to me that in this case, independently of the preceding considerations, there were insuperable diiEculties in the way of sustaining an action at law. Such action must necessarily have been brought in the name of Bell, who had no interest until after all three of the assignments should be satis- fied, of which the one to Garread was the last in the order of 456 OPERATION OF CONTRACT. [Part III. time, and was not to be satisfied until the others were provided for. I am aware that, as a general rule, the assignee of a chose in action may use the name of the assignor in an action at law to recover the amount. But it seems to me that the rule should be confined to cases where the whole of an entire demand is assigned to one person or party. Suppose A has an entire demand of $1000 against B, and assigns to C $100, to D $100, and to E $100, out of the $1000. Which of the three assignees shall institute an action against the debtor? Suppose we say C shall have the right, how much shall he recover? Shall it be the $1000?, Clearly it must be that, or the residue will be gone, because the demand cannot be split and several actions sustained for the several parts assigned. But C has no right, nor is he bound to litigate in relation to the parts assigned to T> and E, or that part not assigned at all. Here would be four parties, hav- ing separate and distinct interests, one having as good right to commence an action, to discontinue it, and to direct in relation to it, as the other; and in case of disagreement, who is to decide? In the case at bar, the plaintiEE had no right to sue in Bell's name for what was to be paid under the two first assignments, nor for what would be going to Bell after all three were paid; and he could not carve out just $1500 and the interest upon it, from the demands due from the city to Bell without splitting entire demands, which cannot be done. Smith v. Jones, 15 John. 229; Guernsey v. Carver, 8 Wend. 492; Stevens v. Lockwood, 13 Id. 644; Story's JEq. Jur. § 1250. » * * » » The notice of the respondent's claims in this case, as appears from the evidence, was served upon the comptroller, while in his office, engaged in the duties thereof, and was beyond all doubt sufficient. Angell and Ames on Corporations, 247. Upon all the points raised upon the argument, therefore, I am of the opinion that the judgment of the Supreme Court ought to be affirmed. Judgment affirmed.^ 1 That the assignment of future interests will be enforced in equity, see Bacon v. Bonham, 33 N. J. Eq. 614 ; Kane v. Clough, 36 Mich. 436 ; FUtter- ion V. Caldwell, 124 Pa. St. 455 ; Edwards v. Peterson, 80 Me. 367. That the assignment of part of a demand will be enforced in equity, see Chap. n. § 1.] ASSIGNMENT OF CONTRACT. 457 HEEEMANS v. ELLSWOETH. 64 NEW YOKK, 159. — 1876. Action by plaintiff, as trustee of Pellows, to recover a balance of account for moneys loaned by Fellows to defendant. Defense, payment to Fellows. Judgment for defendant. Plaintiff ap- peals. The plaintiff gave evidence tending to show that before the payment to Fellows, defendant had notice of the trust. Defend- ant testified he had no notice. The court charged : " The burden of proof is upon the plaintiff upon this question, and it is incumbent upon him to establish the fact of notice by a fair preponderance of evidence. If the testimony is simply balanced, the defendant is to prevail." To this charge the plaintiff excepted. Miller, J. There was no error in the charge of the judge upon the trial, that the burden of proof was upon the plaintiff, upon the question of notice, and that it was incumbent upon him to establish the fact of notice ; nor in the refusal to charge that the burden of proof was upon the defendant to show that the payment was made without notice and in good faith. The debt was due to Fellows, and he being the creditor, it is a fair legal presumption that such creditor was lawfully entitled to receive payment. If an assignment was made by Fellows to the plain- tiff, it was the duty of the assignee to establish that the debtor was notified in order to protect himself against any payment to the original creditor. This rule is fully established by authority. See Meghan v. Mills, 9 J. E. 64; Anderson v. Van Alen, 12 Id. .343; Briggs v. Dorr, 19 Id. 95; Say v. Dascomb, 1 Hill, 552; Field V. The Mayor, 2 Seld. 179. At common law an action to recover upon an instrument not negotiable, was necessarily brought in the name of the original owner or payee, and if pay- ment was pleaded it was not enough that the replication denied Exchange Sank v. McLoon, 73 Me. 498 ; James v. Newton, 142 Mass. 636. See also Trist v. Child, 21 Wall. 441. That it will not be enforced at law, see Mandeville v. Welch, 5 Wheat. 277 ; Gibson v. Cooke, 20 Pick. 15 ; Thomas V. Bock Island &c. Mining Co., 54 Cal. 578 ; Carter v. Nichols, 68 Vt. 553 ; J)ean v. St. Paul & D. B. Co., 53 Minn. 604. 458 OPEKATION OF CONTRACT. [Part III. the payment, without averring both the assignment and notice of the transfer before payment. 19 J. B. 95; 1 Hill, supra. Unless this was done the pleading was insufficient and the proof could not be given. Proof of payment to the creditor established a complete de- fense, and when this is made out it belongs to the other side to answer or avoid it by evidence of the assignment of the demand and notice thereof to the debtor. As he alleges that the pay- ment was not made to the proper person, he is bound to establish it. It is entirely evident that the onus is upon him and he has the affirmative upon such an issue. HolUster v. Bender (1 Hill, 150) is not in conflict with the rule stated. As there said, the substance of the allegation to be tried determines where the onus lies, and as the assignment and notice were the very essence of the plaintiff's right to recover, the burden was upon himt There is no principle of pleading which can disturb or alter the rule laid down. ISTor is there any ground for claiming that the neces- sity for such a rule no longer exists, since parties are allowed to be witnesses on their own behalf. This furnishes no sufficient or satisfactory reason for changing a rule of evidence long estab- lished and which is founded upon a settled principle. The remarks of the learned judge who wrote the opinion in Bush V. Lathrop (22 N. Y. 535), have no direct bearing upon the question considered, as that case is not analogous. Kor was there any error in the refusal to charge the jury that the pendency of the action between Fellows and Heermans was constructive notice to the defendant of the existence of the deed. It is not claimed that it operated as a notice of lis pendens strictly, and whether the defendant had notice of the character of the action so as to put him on inquiry from the fact of his being sworn as a witness in the case, or from any other circum- stances, was a question of fact for the jury to determine. The discussion already had disposes of the case and no other question is presented which demands comment. The judgment was right and should be affirmed. All concur. Judgment affirmed.* 1 "In Muir v. SchencJc (3 Hill, 228) it was held that as between different assignees of a chose in action by express assignment from the same person, Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 459 c. By statute. ALLEN V. BKOWN. 44 NEW YORK, 228. — 1870. Action by plaintiff, as assignee, as for money had and received to tlie use of plaintiff's assignors. Judgment for plaintiff affirmed at General Term. Defendant appeals. Defendant collected certain claims for the assignors, but re- fused to account for the proceeds. The assignors assigned all their interests to the plaintiff, but no consideration was paid by plaintiff. Hunt, C. The appellant insists that the assignment from Cook, Clark, and Cary to the plaintiff, conveyed no title upon which this suit could be brought. This point is based upon the evidence given by Mr. Cook, when he testifies, " Allen paid me nothing, and I agreed with him that I would take care of the case, and if he got beat it should not trouble or cost him any- thing." I am of the opinion that the assignment is sufficient to sustain this action. The Code abolishes the distinction between actions at law and suits in equity, and between the forms of such actions. Section 69 [3339]. It is also provided, in section 111 [449], that every action must be prosecuted in the name of the real party in inter- the one prior in point of time will te protected, though he has given no notice to either the subsequent assignees or the debtor, and the question between a previous assignee and a subsequent attaching creditor was considered the same in principle as that between conflicting assignees. However much that case may have been criticised elsewhere, it has been considered well decided in this State. It was cited with approval in Ch-eentree v. Bosenstock, 61 N. Y. 583, and Freund v. The Imp. & Tr. Nat. Bank, 76 Id. 352." —Earl, J., In Williams v. Ingersoll, 89 N. Y. 508, 523. Accord : Thayer v. Daniels, 113 Mass. 129. " The rule is here well settled that, in order to perfect an assignment of a chose in action, as against bonajide creditors and purchasers without notice, notice of such assignment must be given to the debtor within a reasonable time ; and unless such notice is given, creditors may attach and require a valid lien ; and others may purchase the debt, and gain a title superior to that of the first assignee." — Waite, J., in Van Buskirk v. Hartford Fire Ins. Co., 14 Conn. 141, 144. Accord : Clodfelter v. Cox, 1 Sneed, 330 , Ward V. Morrison, 25 Vt. 593. 460 OPERATION OF CONTKACT. [Part in. est, except as otherwise provided in section 113 [449]. The latter section provides that an executor, administrator, trustee of an express trust, may sue in his own name. These provisions pretended to abolish the common law rule, which prohibits an action at law otherwise than in the name of the original obligee or covenantee, although he had transferred all his interest into bond or covenant to another. It accomplishes fully that object, although others than the assignee may have an ultimate benefi- cial interest in the recovery^ In a case like the present, the whole title passes to the assignee, and he is legally the real party in interest, although others may have a claim upon him for a portion of the proceeds. The specific claim, and all of it, belongs to him. Even if he be liable to another as a debtor upon his contract for the collection he may thus make, it does not alter the case. The title to the specific claim is his. Dwr- gin V. Ireland, 4 Kernan, 322 ; Williams v. Brown, 2 Keyes, 486, and cases cited; Paddon v. Williams, 1. Robt. R. 340; S. C. 2 Ah. B,. N. S. 88. * * m m m The judgment should be a£B.rmed with costs. [Leonard, C, also read for the affirmance.] All for affirmance, ^cept Gray, C, not sitting. Judgment affirmed with coats.^ d. By the law merchant : negotiability. SHAW V. KAILEOAD CO. 101 UNITED STATES, 557. — 1879. Replevin by Merchants' National Bank of St. Louis against Shaw & Esrey, of Philadelphia, to recover possession of certain cotton marked "W. D. I." One hundred and forty-one bales 1 "The effect of our new code of practice, in abolishing the distinction between law and equity, is to allow the assignee of a chose in action to bring suit in his own name in cases where by the common law no assignment would be recognized. In this respect the rules of equity are to prevail, and the assignee may sue in his own name." — Gamble, J., in Walker v. Mauro, 18 Mo. 564. Chap. II. § 1.] ASSIGNMENT OF CONTEACX. 461 thereof having been taken possession of by the marshal, -were returned to the defendants upon their entering into the proper bond. Judgment for plaintiff for "the value of goods eloigned." Defendants bring error. Norvel & Co., of St. Louis, drew a draft on M. Kuhn & Brother, of Philadelphia, attached thereto as collateral security an original bill of lading for one hundred and seventy bales of cotton shipped to Philadelphia, and sold the draft, with the bill of lading attached, to plaintiff. The duplicate bill of lading they sent to Kuhn & Brother. Plaintiff forwarded the draft, with bill of lading attached, to the Bank of North America, of Philadel- phia, for presentation and acceptance. The Bank of North America presented the draft to Kuhn & Brother, who accepted the draft, but secretly detached the original bill of lading and substituted the duplicate. Kuhn & Brother then indorsed the original bill of lading to Miller & Brother, who, through a broker, and with the consent of Kuhn & Brother, sold the cot- ton in controversy by sample to defendants. The original bill of lading was deposited with the Railroad Company, and the cotton, on its arrival, was delivered to defendants. Kuhn & Brother subsequently failed, their accepted draft -was protested, and the fact that the plaintiff held the duplicate bill of lading was then discovered. Defendants contend that the bill of lading was negotiable in the ordinary sense of that word ; that Miller & Brother purchased it for value in the usual course of business and thereby acquired a valid title to the cotton, which was not impaired by proof of Kuhn and Brother's fraud. The jury found, (1) that plaintiff's agent was not negligent in parting with possession of the bill of lading, and (2) that Miller & Brother knew facts from which they had reason to believe that the bill of lading was held to secure payment of an outstanding draft. Ms. Justice Strong. The defendants below, now plaintiffs in error, bought the cotton from Miller & Brother by sample, through a cotton broker. No bill of lading or other written evi- dence of title in their vendors was exhibited to them. Hence, they can have no other or better title than their vendors had. 462 OPERATION OF CONTRACT. [Part III. The inquiry, therefore, is, what title had Miller & Brother as against the bank, which confessedly was the owner, and which is still the owner unless it has lost its ownership by the fraudulent act of Kuhn & Brother. The cotton was represented by the bill of lading given to Norvel & Co., at St. Louis, and by them indorsed to the bank, to secure the payment of an accompanying discounted time-draft. That indorsement vested in the bank the title to the cotton, as well as to the contract. While it there continued, and during the transit of the cotton from St. Louis to Philadelphia, the indorsed bill of lading was stolen by one of the firm of Kuhn & Brother, and by them indorsed over to Miller & Brother, for an advance of f 8500. The jury has found, however, that there was no negligence of the bank, or of its agents, in parting with possession of the bill of lading, and that Miller & Brother knew facts from which they had reason to believe it was held to secure the payment of an outstanding draft; in other words, that Kuhn & Brother were not the lawful owners of it, and had no right to dispose of it. It is therefore to be determined whether Miller & Brother, by taking the bill of lading from Kuhn & Brother under these circumstances, acquired thereby a good title to the cotton as against the bank. In considering this question, it does not appear to us necessary to inquire whether the effect of the bill of lading in the hands of Miller & Brother is to be determined by the law of Missouri, where the bill was given, or by the law of Pennsylvania, where the cotton was delivered. The statutes of both States enact that bills of lading shall be negotiable by indorsement and delivery. The statute of Pennsylvania declares simply, they "shall be negotiable and may be transferred by indorsement and delivery; " while that of Missouri enacts that " they shall be negotiable by written indorsement thereon and delivery, in the same manner as bills of exchange and promissory notes." There is no material difference between these provisions. Both statutes prescribe the manner of negotiation; i.e. by indorsement and delivery. Neither undertakes to define the effect of such a transfer. We must, therefore, look outside of the statutes to learn what they mean by declaring such instruments negotiable. What is Chap. II. §1.] ASSIGNMENT OF CONTRACT. 463 negotiability? It is a teelinical term derived from the usage of merchants and bankers, in transferring, primarily, bills of exchange, and, afterwards, promissory notes. At common law no contract was assignable, so as to give to an assignee a right to enforce it by suit in his own name. To this rule bills of exchange and promissory notes, payable to order or bearer, have been admitted exceptions, made such by the adoption of the law merchant. They may be transferred by indorsement and de- livery, and such a transfer is called negotiation. It is a mer- cantile business transaction, and the capability of being thus transferred, so as to give to the indorsee a right to sue on the contract in his own name, is what constitutes negotiability. The term "negotiable" expresses, at least primarily, this mode and effect of a transfer. In regard to bills and notes, certain other consequences gen- erally, though not always, follow. Such as a liability of the indorser, if demand be duly made of the acceptor or maker, and seasonable notice of his default be given. So if the indorsement be made for value to a bona fide holder, before the maturity of the bill or note, in due course of business, the maker or acceptor cannot set up against the indorsee any defense which might have been set up against the payee, had the bill or note remained in his hands. So, also, if a note or bill of exchange be indorsed in blank, if payable to order, or if it be payable to bearer, and therefore negotiable by delivery alone, and then be lost or stolen, a bona fide purchaser for value paid acquires title to it, even as against the true owner. This is an exception from the ordinary rule respecting personal property. But none of these consequences are necessary attendants or constituents of negotiability, or nego- tiation. That may exist without them. A bill or note past due is negotiable, if it be payable to order, or bearer, but its indorse- ment or delivery does not cut off the defenses of the maker or acceptor against it, nor create such a contract as results from an indorsement before maturity, and it does not give to the pur- chaser of a lost or stolen bill the rights^f the real owner. It does not necessarily follow, therefore, that because a statute has made bills of lading negotiable by indorsement and delivery, 464 OPERATION OF CONTRACT. [Part UI. , all these consequences of an indorsement and delivery of bills and notes before maturity ensue or are intended to result from sucli negotiation. Bills of exchange and promissory notes are exceptional in their character. They are representatives of money, circulating in the commercial world as evidence of money, "of which any person in lawful possession may avail himself to pay debts or make purchases or make remittances of money from one country to another, or to remote places in the same country. Hence, as said by Story, J., it has become a general rule of the commercial world to hold bills of exchange, as in some sort, sacred instru- ments in favor of bona fide holders for 'a valuable consideration without notice." Without such a holding they could not perform their peculiar functions. It is for this reason it is held that if a bill or note, indorsed in blank or payable to bearer, be lost or stolen, and be purchased from the finder or thief, without any knowledge of want of ownership in the vendor, the bona fide purchaser may hold it against the true owner. He may hold it though he took it negligently, and when there were suspicious circumstances attending the transfer. Nothing short of actual or constructive notice that the instrument is not the property of the person who offers to sell it; that is, nothing short of mala, fides will defeat his right. The rule is the same as that which protects the bona fide indorser of a bill or note purchased for value from the true owner. The purchaser is not bound to look beyond the instrument. Goodman v. Harvey, 4 Ad. & E. 870; Goodman v. Simonds, 20 How. 343; Murray v. Lardner, 2 Wall. 110 ; Matthews v. Poythress, 4 Ga. 287. The rule was first applied to the case of a lost bank-note (Miller v. Bace, 1 Burr. 462) and put upon the ground that the interests of trade, the usual course of business, and the fact that bank-notes pass from hand to hand as coin, require it. It was subsequently held applicable to merchants' drafts, and in Peacock v. Rhodes (2 Doug. 633) to bills and notes, as coming within the same reason. The reason can have no application to the case of a lost or stolen bill of lading. The function of that instrument is entirely different from that of a bill or note. It is not a representative of money, used for transmission of money, or for the payment of Chap. II. § 1.] ASSIGNMENT OF CONTRACT. 465 debts or for purchases. It does not pass from hand to hand as bank-notes or coin. It is a contract for the performance of a certain duty. True, it is a symbol of ownership of the goods covered by it, — a representative of those goods. But if the goods themselves be lost or stolen, no sale of them by the finder or thief, though to a bona fide purchaser for value, will divest the ownership of the person who lost them, or from whom they were stolen. Why then should the sale of the symbol or mere repre- sentative of the goods have such an effect? It may be that the true owner by his negligence or carelessness may have put it in the power of a finder or thief to occupy ostensibly the position of a true owner, and his carelessness may estop him from asserting his right against a purchaser who has been misled to his hurt by that carelessness. But the present is no such case. It is estab- lished by the verdict of the jury that the bank did not lose its possession of the bill of lading negligently. There is no estoppel, therefore, against the bank's right. Bills of lading are regarded as so much cotton, grain, iron, or other articles of merchandise. The merchandise is very often sold or pledged by the transfer of the bills which cover it. They are, in commerce, a very different thing from bills of exchange and promissory notes, answering a different purpose and per- forming different functions. It cannot be, therefore, that the statute which made them negotiable by indorsement and delivery, or negotiable in the same manner as bills of exchange and promissory notes are negotiable, intended to change totally their character, put them in all respects on the footing of instru- ments which are the representatives of money, and charge the negotiation of them with all the consequences which usually attend or follow the negotiation of bills and notes. Some of these consequences would be very strange if not impossible. Such as liability of indorsers, the duty of demand ad diem, notice of non-delivery by the carrier, etc., or the loss of the owner's property by the fraudulent assignment of a thief. If these were intended, surely the statute would have said something more than merely make them negotiable by indorsement. No statute is to be construed as altering the common law, farther than its words import. It is not to be construed as making any innovation upon 466 OPERATION OF CONTRACT. [PART lU. the common law which it does not fairly express. Especially is so great an innovation as would be placing bills of lading on the same footing in all respects with bills of exchange not to be inferred from words that can be fully satisfied without it. The law has most carefully protected the ownership of personal property, other than money, against misappropriation by others than the owner, even when it is out of his possession. This protection would be largely withdrawn if the misappropriation of its symbol or representative could avail to defeat the owner- ship, even when the person who claims under a misappropriation had reason to believe that the person from whom he took the property had no right to it. We think, therefore, that the rule asserted in Goodman v. Harvey, Goodman v. Simonds, Murray v. Lardner (supra), and in Phelan v. Moss (67 Pa. St. 59), is not applicable to a stolen bill of lading. At least the purchaser of such a bill, with reason to believe that his vendor was not the owner of the bill, or that it was held to secure the payment of an outstanding draft, is not a honafde purchaser, and he is not entitled to hold the merchandise covered by the bill against its true owner. In the present case there was more than mere negligence on the part of Miller & Brother, more than mere reason for suspicion. There was reason to believe Kuhn & Brother had no right to negotiate the bill. This falls very little, if any, short of knowledge. It may fairly be assumed that one who has reason to believe a fact exists, knows it exists. Certainly, if he be a reasonable being. This disposes of the principal objections urged against the charge given to the jury. They are not sustained. The other assignments of error are of little importance. We cannot say there was no evidence in the case to justify a submissian to the jury of the question whether Miller & Brother knew any fact or facts from which they had reason to believe that the bill of lading was held to secure payment of an outstanding draft. It does not appear that we have before us all the evidence that was given, but if we have, there is enough to warrant a submission of that question. The exceptions to the admission of testimony, and to the cross-examination of Andrew H. Miller, are not of sufficient Chap. II. § 1.] ASSIGNMENT OP CONTRACT. 467 importance, even if they could be sustained, to justify our revers- ing the judgment. Nor are we convinced that they exhibit any error. There was undoubtedly a mistake in entering the verdict. It was a mistake of the clerk in using a superfluous word. The jury found a general verdict for the plaintiff. But they found the value of the goods "eloigned" to have been $7015.97. The word " eloigned " was inadvertently used, and it might have been stricken out. It should have been, and it may be here. The judgment was entered properly. As the verdict was amendable in the court below, we will regard the amendment as made. It would be quite inadmissible to send the case back for another trial because of such a verbal mistake. Judgment affirmed.* i"The term 'negotiable,' in its enlarged signification, applies to any- written security which may be transferred by indorsement or delivery, so as to vest in the indorsee the legal title, so as to enable him to maintain a suit thereon in his own name." — Scott, J., in Odell v. Gray, 15 Mo. 337, 342. "The word 'negotiation,' as used by writers on mercantile law, means the act by which a bill of exchange or promissory note is put into circulation by being passed by one of the original parties to another person. ' Negotia- ble ' means that which is capable of being transferred by assignment ; a thing which may be transferred by a sale and indorsement or delivery. This negotiable quality transfers the debt from the party to whom it was originally owing to the holder, when the instrument is properly indorsed, so as to enable the latter to sue in his own name, either the maker of a promissory note orthe acceptor of a, bill of exchange, and the other parties to such instruments, such as the drawer of a bill or the indorser of a bill or note, unless the holder has been guilty of laches in giving the required notice. It must, however, be payable to order or bearer; and, at all events, in money only, and not out of any particular fund." — Hanna, J., in Walker v. The Ocean Bank, 19 Ind. 247, 250. See also on negotiability, Walker v. Ebert, 29 Wis. 194, ante, p. 238 ; mw V. Walker, 108 Ind. 365, ante, p. 399 ; Ford v. Mitchell, 15 Wis. 334, post, p. 636. 468 OPERATION OF CONTKACT. [Part III. § 2. ABsignment of contractual rights and llabilitieB by operation of la'w. (i.) Assignment of obligations upon the transfer of interests in lands, a. Covenants affecting leasehold interests. (a) Assignment by lessee. GOEDON V. GEORGE. 12 INDIANA, 408. — 1859. Appeal from the Madison Court of Common Pleas. Hajtna, J. Sarah George, the appellee, gave a written lease to one Black, stipulating therein that Black should have the use of a parcel of land for five years; in consideration of which Black was to clear the land and make it ready for the plow, and leave the premises in good repair. It was further agreed that Black should build a cabin and smoke-house, and dig a well on the premises, for which Sarah George was to pay twenty-five dollars and thirty-seven cents. Before clearing the land or building the cabin, etc., Black assigned the lease, by indorsement, to the said James Gordon, appellant. Gordon sued before a justice, alleging that he had built the house and smoke-house and dug the "well; that the time had expired, and the lessor refused to pay for said house, etc. The plaintiff recovered a judgment before the justice for forty- two dollars. On appeal to the Common Pleas, the defendant had a verdict and judgment for twelve dollars. The defendant, among other things, set up, by way of counter- claim, that the plaintiff had not cleared the ground according to the contract, etc. The plaintiff asked the court to instruct the jury, that, " if the jury find the matters of counter-claim of the defendant exceed the amount which the jury may find due the plaintiff, the jury cannot find against the plaintiff such excess," which was refused. Upon this ruling of the court, the only point made, by brief of counsel, is predicated. By the statute (2 B. S. p. 120) plaintiff may dismiss his action; but by § 365, "In any case, where a set-off or counter- claim has been presented, which, in another action, would entitle the defendant to a judgment against the plaintiff, the defendant Chap. II. §2.] ASSIGNMENT OF CONTRACT. 469 shall have the right of proceeding to the trial of his claim, "without notice, although the plaintiff may have dismissed his action, or failed to appear." So, in Vassearv. Liviyigston (3 Kern. 252) it is said that, "a counter-claim must contain the substance necessary to sustain an action on behalf of the defendant against the plaintiff, if the plaintiff had not sued the defendant." In Howland v. Coffin (9 Pick. 62) it was held by the Supreme Court of Massachusetts, " that the assignee of the lessee is liable to the assignee of the lessor in an action of debt for th^ time he holds; for though there is no privity of contract, there is a privity of estate -which creates a debt for the rent." See authorities cited. In another case between the same parties, it is said (12 Pick. 125), " the defendant took the term subject to all the advantages and disadvantages attached to it by the terms of the lease. The covenant for the payment of the rent ran with the land, and by the assignment of the term became binding on the defendant." See Farmers' Bank v. Tlie Mutual Ins. Soc, 4 Leigh (Va.), 69; Taylor's Landlord and Tenant, 76; Provost v. Calder, 2 Wend. 617; 23 Id. 506; 21 Id. 32; Vernon v. Smith, 5 Barn, and Adol. 1. It resolves itself into the question, then, under the above, and § 69, p. 41, of the same statute, and the authorities cited, whether the plaintiff was liable to the defendant for the non-performance of the contract of his assignor. We think, under the circum- stances of this case, he was. He became the assignee of the whole interest of Black, before any part of the contract was per- formed. By receiving an assignment of the lease, and taking possession of the land under it, he surely became liable to per- form the stipulations of that lease, so far as they had reference to improvements upon said land, if no others, of which we do not decide, as it is not necessary to do so. The ruling of the court upon the instruction was correct. Per Curiam. The judgment is affirmed, with 10 per cent dam- ages and costs. ^ 1 Accord : Sunt v. Danforth, 2 Curtis' C. C. Rep. 592 ; Salisbury v. Shirley, 66 Cal. 223. Cf. Thompson v. Base, 8 Cowen, 266 ; Jackson v. Port, 17 Johns. 479. 470 OPERATION OF CONTRACT. [Part III. 0) Assignment by lessor. FISHEE V. DEERING. 60 ILUNOIS, 114.— 1871. Mk. Justice Walkek. It appears, from an examination of the authorities, that at the ancient common law a lease was not assignable so as to invest the assignee with the legal title to the rent. Such instruments were, in that respect, on a footing with other agreements and choses in action. But the 32 Hen. VIII. , cL. 34, § 1, deplared that the assignee of the reversion should becom.e invested with the rents. But notwithstanding this enactment, the courts held that the assignee of the reversion could not sue for and recover the rent unless the tenant should attorn, when the holder of the reversion might recover subsequently accruing rent in an action of debt. Marie y. Flake, 3 Salk. 118; Robins T. Cox, 1 Levinz, 22; Ards v. Watkin, 2 Croke's Eliz. 637; Kholles' Case, 1 Dyer, 5 b; Allen v, Bryan, 5 Barn. & Cress. 512, and the note. In Williams v. Hayward (1 Ellis & Ellis, 1040), after reviewing the old decisions on this question, it was, in substance, held that, under the 32 Hen. VIII., an assignee of the rent, without the reversion, could recover when there was an attornment, and that such an assignee could, under the 4 of Anne, recover without an attornment. The courts seem to have proceeded upon the ground that there could be no privity of contract unless the tenant should attorn to the assignee of the reversion ; that, whilst the assignment of the reversion created a privity of estate between the assignee and the tenant, privity of contract could only arise by an agree- ment between them. Some confusion seems to have got into the books from calling the purchaser of the reversion an assignee of the lease, by its passing by the conveyance as appurtenant to the estate. But where the tenant attorned to the assignee of the reversion the assignment became complete, and.then there existed both privity of estate and of contract between the assignee and the tenant, and by reason of the privity of contract the assignee might sue in debt, and recover subsequently accruing, but not rent in arrear at the time he acquired the reversion. Chap. II. § 2.] ASSIGNMENT OF CONTEACT. 471 To give the assignee of the reversion a more complete remedy, the 4 and 5 Anne, ch. 16, § 9, was adopted, dispensing with the necessity of an attornment which the courts had held to be neces- sary under the 32 Hen. VIIL, to create a privity of contract. But this latter act has never been in force in this State, and hence the decisions of the British courts, made under it, are not applicable. In many States of the Union this latter act has been adopted, and the decisions of their courts conform, of course, to its provisions. But we having adopted the common law of England, so far as the same is applicable and of a general nature, and all statutes or acts of the British Parliament made in aid of, and to supply defects of, the common law, prior to the fourth year of James the First, except certain enumerated statutes, and which are of a general nature and not local to that kingdom, they are declared to be the rule of decision, and shall be considered of full force until repealed by legislative authority. Gross' Comp. 1869, 416. It then follows that the 32 Hen. VIIL, ch. 34, § 1, is in force in this State, as it is applicable to our condi- tion, and is unrepealed. And we must hold, that the construction given to that act by the British courts was intended also to be adopted. The facts in this case show such a privity of contract as brings it fully within the rule announced in the above cases. Appellee paid to appellant several instalments of rent falling due under the lease after it was assigned to him. By paying the rent, the lessee fully recognized the appellant as his landlord, and created the necessary privity of contract to maintain the action. The case of Chapman v. McOretu (20 111. 101) announces a contrary doctrine. In that case this question was presented, and notwithstanding the lessee had fully recognized the assignee of the lease as his landlord, it was held that the lessor of the premises might maintain an action to recover the rent. In that case, the fact that the lessee had attorned to the assignee was given no weight, and the fact that such privity was thereby created as authorized the assignee of the lease to sue for, and recover the rent, was overlooked. In that, the decision was wrong. The right of action could not be in both the lessor and his assignee, and the privity thus created gave it to the latter. 472 OPERATION OF CONTRACT. [Paet IIL The subsequent case of Dixon v. Buell (21 111. 203) only holds that such an assignee, whether he holds the legal or equitable title to the lease, may have a claim for rent growing out of the lease, probated and allowed against the estate of the lessee. That case has no bearing on the case at bar. The judgment of the court below is reversed and the cause remanded. ■ Judgment reversed. ^ 6. Covenants affecting freehold interests. SHABER V. ST. PAUL WATER CO. 30 MINNESOTA, 179. — 1883. Action for breach of covenant. Demurrer to complaint over- ruled. Defendant appeals. Bekrt, J. In January, 1869, John R. Irvine and Nancy Irvine owned certain land (in the city of St. Paul) through which ran Phalen Creek, affording a valuable mill privilege thereon. Leonard Schiegel, as the lessee of the Irvines, had constructed a dam and race upon the land, by which the mill privilege was utilized in the running of a flour mill, which he had also erected thereon and was operating. By sundry subsequent conveyances the land, with the race, dam, mill, and privilege, came to Henry Shaber, the plaintiff's intestate, and the same are now part of his estate. The defendant corporation, the St. Paul Water Com- pany, was formed to supply the city of St. Paul with water. In January, 1869, the company, in carrying out this purpose of its creation, was about to tap Lake Phalen and lay pipes by which to divert and draw off the water thereof. Phalen Creek flows from Lake Phalen, which is the last and lowest of a chain or series of lakes, constituting a local water system. The Irvines and Schiegel objected to the proposed diversion of water, re- fused to permit it, and threatened to enjoin it, because, unless provision was made for bringing into Lake Phalen, from other sources and by artificial means, as much water over and above 1 The remedy has since been extended to the grantee without attornment. ni. S. S. ch. 80, § 14. Cf. Crawford v. Chapman, 17 Ohio St. 449. Chap. II. §2.] ASSIGNMENT OF CONTEACT. 473 what naturally flowed into the same as the company should at any time draw out, the level of the lake would be lowered, the quantity of the water flowing into the creek diminished, and the mill privilege impaired and destroyed. To remove the opposition, and to induce them to refrain from enjoining its proceedings, the company entered into a written agreement, by which, "for a good and valuable consideration," it covenanted and agreed with the Irvines and Schiegel, " their heirs and assigns, severally and separately," that it would make certain specifled " improvements, " such as dams, gates, canals, and chan- nels, all within one year from the 8th day of February, 1869 ; that it would at all times thereafter keep and maintain the same in a "good, strong, and substantial manner," and that it would do and refrain from doing certain other things, all having reference to maintaining the supply of water in the creek; and further, that the volume of water flowing out of Lake Phalen through Phalen Creek should never at any time be diminished or rendered less available for the purpose of the water-power mill privilege before mentioned, by any work or operation of the company, than it had been before it commenced its operations; that it would never draw or take out of the lake at any time any more water than such quantity as it should introduce into the same by its said improvements and by artificial means over and above the quantity which naturally flowed .into the same; and that it would, by its said improvements and by artificial means, intro- duce and lead into the lake at all times as large a volume of water as it should draw out, in addition to what flowed into the lake through natural channels. The plaintiff alleges that defend- ant has failed to make the specified "improvements," and that it has broken its covenants in reference to maintaining the stage and quantity of water in the creek, and that, in consequence of said failure and breaches, the flow of water in the creek has been diminished by the drawing and diverting of water by defendant from Lake Phalen, and thereby the said Shaber, in his lifetime, and his estate since his decease, has been greatly damaged (as particularly set forth) in respect to the mill, water privilege, and the use and operation of the same, and that he and his estate have been subjected to great expense and loss on account thereof. 474 OPERATION OF CONTRACT. [Part IH. This appeal is taken from an order overruling defendant's general demurrer to the complaint. Our examination of the case has brought us to the conclusion that the appeal presents a single question, viz. : Whether any of the covenants entered into by defendant run with the land of the covenantees to Shaber and his estate? This is a pure common law question, to be decided upon the authorities. "We think the following propositions embody the rules of law applicable to the case, and that they are supported by the authorities cited: A covenant runs with land when either the liability to perform it, i.e. its burden, or the right to take advan- tage of it, i.e. its benefit, passes to the assignee of the land. Savage v. Mason, 3 Cush. 500; 1 Smith's Lead. Cas. 120. To enable a covenant to run with land so as to give the assignee its benefit, the covenantee must be the owner of the land to which the covenant relates ; but the covenantor may be either a person in privity of estate with the covenantee, or a stranger ; while, with reference to the subject of the covenant, it is suffi- cient that it be for something to be done, or refrained from, about, touching, concerning, or affecting the covenantee's land (though not upon it), if the thing covenanted for be for the benefit of the same, or tend to increase its value in the hands of the holder. Spencer's Case and notes, Eng. & Amer. ; 1 Smith Lead. Cas. (7th Am. ed.) 115, where all the learning upon the subject appears to be collected; Pakenham's Case, 42 Edw. III. 3, abstracted in 1 B. & C. 410, 415; Anson on Contracts, 220; Pollock on Con- tracts, 219; Rawle on Covenants, 334, and notes; Norman v. Wells, 17 Wend. 136; NorfieetY. Cromwell, 70 N". C. 634; 1 Smith Lead. Cas. 122, 124, 139, 140, 175, 177, 181, 183; Allen y. Culver, 3 Denio, 284; Van Rensselaer v. Smith, 27 Barb. 104, 146; National Bank v. Segur, 39 N. J. Law, 173. The case at bar is controlled by these principles. The Irvines — the covenantees — were the owners of the land to which the defendant's covenants related; that is to say, they owned the mill site upon which was the water privilege which it was the object and purpose of the covenants to preserve and protect; and the covenants were for something to be done, and to be refrained from, about, touching, concerning, and affecting the Chap. U. § 2.] ASSIGNMENT OF CONTRACT. 475 covenantee's land, for the benefit thereof, and tending to increase its value in the hands of the holder. The covenants were of a character to run with the land, so as to enable the assignee of the covenantees to take advantage of them. When it is con- sidered what it was that the water company proposed to do, and for what purpose the covenants were made, it would be astonish- ing if this were not the case. The diverting the water of Lake Phalen, without provision for counteracting it, would be a per- petual injury to the land of the covenantees. No protection against such an injury would be adequate unless it was also perpetual. That nothing less could have been fairly intended by the parties to the covenants is apparent from the allegations of the complaint. It is insisted by defendant that the breach of the covenants was complete before plaintiff had acquired any interest in the property to which they related ; that it had become a right of action, and did not pass to the plaintiff. If the covenants to make the specified improvements within a year from February 8, 1869, were all the covenants entered into, this point might pos- sibly be well taken. But such is not the case. These improve- ments are not only to be made, but at all times thereafter to be kept and maintained in a "good, strong, and substantial manner," and the volume of water flowing out of Lake Phalen through the creek is to be maintained undiminished by any of the operations of the defendant, with other covenants of similar import. These are, therefore, continuing covenants, and for that reason, and because they run with the land, the damages from their breach accrue to him who holds the property when the breach occurs — or, in other words, to the person injured — and to him the right of action therefor necessarily belongs. Jeter v. Glenn, 9 Eich. (S. C.) Law, 374. In this respect they are analogous to covenants for quiet enjoyment and warranty, which inure to the protection of the owner for the time being of the estate which they are intended to assure. Rawle on Covenants, 352, and citations. The covenants relating to the making of the specified "improve- ments " provide for the means by which a certain result is to be accomplished, while these continuing covenants provide for the result itself. The latter are, therefore, the most important, 476 OPERATION OF CONTRACT. [Part III. because they go to the substance rather than the form in which the result in view is to be accomplished. If the continuing covenants are kept, the damages for the breach of the others would be comparatively, if not altogether, nominal. Por these reasons we are of opinion that the complaint states a cause of action, and that the demurrer was, therefore, properly overruled. We have not overlooked the case of Kimball v. Bryant (25 Minn. 496), though we have not before adverted to it, as it was not cited or alluded to upon the argument. But it seems to us that the principle of the decision there made may have an important bearing upon the case at bar, and in support of the conclusions to which we have arrived. Order affirmed.^ INHABITANTS OF MIDDLEFIELD v. CHUECH MILLS KNITTING CO. 160 MASSACHUSETTS, 267. — 1894. Contract, to recover expenses incurred in repairing a bridge which defendant was bound to repair. Demurrer by defendant sustained. Plaintiff appeals. The declaration alleged that the owners of land on a stream wishing to raise the stream into a pond for water-power changed and raised the highway and built a new bridge and approaches under an arrangement with plaintiff whereby the owners cove- nanted for themselves and successors to keep the same in repair; that the owners had for many years kept the same in repair ; that 1 In Mott V. Oppenheimer (135 N. Y. 312), it is held that a covenant by one landowner for himself, his heirs, or assigns, to pay for one-half a party wall erected by an adjoining owner whenever he or they should make use of it, coupled with a further provision that the agreement should be construed as covenants running with the land, imposes a burden on the land of the cove- nantor and a benefit on the land of the covenantee which run with the land of each into the hands of grantees. Where there is no express stipulation that the covenant to pay for a party wall shall run with the land, it will be construed as a personal covenant. Cole V. Hughes, 54 N. Y. 444 ; Scott v. McMillan, 76 N. Y. 144 ; Block v. Jsftam, 28 Ind. 37. But the covenant to pay for future repairs runs with the land. Hart v. Lyon, 90 N. Y. 663. Chap. II. § 2.] ASSIGNMENT OF CONTRACT. 477 defendant was now the owner of said land, pond, and water-power, and had succeeded to said prior owners' rights and obligations, but had failed and refused to keep the bridge in repair; that plaintiff had of necessity repaired the same, but defendant had refused to repay plaintiff the cost thereof. Holmes, J. This is an action to recover the amount of damages which the plaintiff has been compelled to pay in con- sequence of a breach of a duty alleged to rest primarily on the defendant. The declaration is not in covenant, to speak in terms of the old forms of action, but in assumpsit, on the principle of Lowell V. Spaulding (4 Cush. 277), Woburn v. Henshaw (101 Mass. 193), and other cases of that class. The mode in which the defendant's duty originated, whether by prescription (Regina v. Bucknall, 2 Ld. Eaym. 804; Bac. Abr. Highways [E.]; Angell & D. Highways, § 255), or by grant or covenant having the effect of a grant (Bronson v. Coffin, 108 Mass. 176 ; Nbi-cross v. James, 140 Mass. 188, 190; Ladd v. Boston, 151 Mass. 685, 588), or otherwise (Perley v. Chandler, 6 Mass. 454, 457, 458; Lowell v. Proprietors of Locks and Canals, 104 Mass. 18), is one step more remote than when the declaration is on the covenant directly. However it might be in the latter case, we are of opinion that the duty is suflB.ciently alleged for the purposes of the ease at bar. See Bernard v. Cafferty, 11 Gray, 10, 11; form of declara- tion for obstructing way, Pub. Sts., c. 167, § 94. It is true that, in order to overrule the demurrer, we have to assume the possibility that the defendant might be bound as assign and tenant of a quasi servient estate to perform an active duty created by its predecessor in title ; but in view of the fore- going and other decisions, we are not prepared to deny that it might be bound in law or in equity so far as to make it liable to indemnify the plaintiff to the extent of simple damages. It is true that, in general, active duties cannot be attached to land, and that affirmative covenants only bind the covenantor, his heirs, executors, and administrators. But there are some excep- tions, and most conspicuous among them is the obligation to repair fences and highways. We do not deem it advisable to discuss the law in detail until the facts shall appear more exactly than they do at present. If such a duty can be attached to land. 478 OPERATION OF CONTRACT. [Part HI. then, although ordinarily the corresponding right could not exist in gross, yet in the case of a way which a town is bound to keep in repair for the benefit of the public, the town is the natural and convenient protector of the obligation, and, being immortal and locally fixed, may enforce a covenant originally made to it with- out being shown to be strictly the owner of the highway as a quasi dominant estate, just as, conversely, a local corporation was bound to the terre-tenant to perform active services in Pakenham's case, Y. B. 42 Edw. III., 3, pi. 14. Demurrer overruled. (ii.) Assignment of contractual obligation upon marriage. PLATNEE V. PATCHIlSr. 19 WISCONSIN, 333. — 1865. Action against Patchin and wife on a promissory note executed by the latter dum sola. Demurrer by wife that complaint shows a former action pending against her. Answer by Patchin that the wife still retains and possesses all her separate property. Motion for judgment, on the ground that demurrer and answer were frivolous, denied. Plaintiff appeals. Dixon, C. J. . . . The wife being a necessary party to the action to enforce the liability of the husband, and it appearing on the face of the complaint that there is a former action pending against her, her demurrer was well taken, and the motion for judgment for the frivolousness of the demurrer and answer properly denied. We see nothing in the answer of the husband which merits serious consideration. It is obviously frivolous. The statute for the protection of the rights of married women, whilst it greatly enlarges the privileges of the wife, does not restrict the liability of the husband. He must pay the same as before, and if he does not, the creditors of the wife can sue and make him pay if he is able. In this particular the modern husband is twice happy. Pirst, he is happy as the quiet spectator of his wife's Chap. II. § 2.] ASSIGNMENT OF CONTRACT. 479 enjoyment of her property ; and again he is happy in paying her debts, or, if he refuses, in being sued and compelled to pay. Order affirmed.* HOWAETH V. WAEMSEE, et al. 58 ILLINOIS, 48. — 1871. Action against Warmser and wife on a promissory note given by the wife dum sola. Judgment against defendants. Warmser appeals. Lawrence, C. J. We held in Connor v. Berry (46 111. 370) and McMurtry v. Webster (48 111. 123) that the husband was still, as at common law, liable for the debts of his wife, contracted before marriage, notwithstanding the act of 1861, because that act still left to the husband the wife's earnings. Since those decis- ions were made, the legislature, by the act of 1869, has taken from the husband all control over the earnings of his wife, and thus swept away the last vestige of the reasons upon which the common law rule rested. The rule itself must now cease. Leg- islative action has virtually abolished it, by taking away its foundations and rendering its enforcement unjust. The judgment must be reversed and the cause remanded. Judgment reversed.' (m.) Assignment of contractual obligation by death, DICKINSON V. CALAHAN'S ADM'ES. 19 PENNSYLVANIA STATE, 227. — 18?2. Assumpsit and covenant for lumber delivered by the adminis- trators of Calahan to the executors of Dickinson to apply on a 1 Changed by Ch. 155, L. 1872 ; \ 8. & B. Ann. St. of Wis. sec. 2346. See, generally, Stimson's Am. St. Law, § 6402. "As between the creditor of the wife dum sola and the husband, the common law liability of the husband has not been changed by the legislation above referred to." — Alexanders. Morgan, 31 Ohio St. 546 (1877). 2 See also Madden v. Gilmer, 40 Ala. 637 ;. Wood v. Orford, 52 Cal. 412 ; Lennox v. Eldred, 65 Barb. 410. 480 OPERATION OF CONTRACT. [Part III- contract made between Calahan and Dickinson. Defense, breach of contract in not delivering the full amount called for by such contract. Verdict for plaintiffs for full amount of claim. LowRiB, J. It seems to us very doubtful whether the oral contract could be rightly proved by the evidence that was sub- mitted to the jury. But admit that it could. The one party, a lumber manufacturer, agreed to sell to the other, a lumber mer- chant, all the lumber to be sawed at his mill during five years, and that the quantity should be equal on an average to 300,000 feet in a year, without stipulating for any given quantity in any one year, and the lumber was to be paid for as delivered. Be- fore the five years had expired, both parties died; and now the representatives of the vendee seek to hold those of the vendor bound to perform the contract, and to set off damages for the breach of it against a claim for part of the lumber delivered. It will be seen that, in thus stating the question, we set aside the alleged breach in the lifetime of Calahan; and we do this because the court properly instructed the jury that, under such a contract, Calahan was guilty of no breach in not manufacturing the full average quantity in his lifetime, and left it to them to say whether in his lifetime he had committed any other manner of breach. The point in controversy may be stated thus : Where a lumber manufacturer contracts with a lumber merchant to sell him a certain quantity of lumber, to be made at his mill during five years, for which he is to be paid as the lumber is delivered, and he dies before the time has elapsed, are his administrators bound to fulfill the contract for the remainder of the time? No one can trace up this branch of the law very far without becoming entangled in a thicket, from which he will have diffi- •culty in extricating himself. Very much of the embarrassment arises from the fact that the liability of executors and adminis- trators has been often made to depend more upon the forms of action than upon the essential relations of the parties, as will be seen by reference to the books. Piatt on Covenants, 453; 2 Wms. Executors, 1060; and Viner's Ab., titles "Covenants," D. E., and " Executors," H. a. ; Touchstone, 178. The simplicity and sym- metry of the law would certainly be greatly increased, and its justice better appreciated if in all cases where the law undertakes Chap. II. § 2,] ASSIGNMENT OF CONTRACT. 481 the administration of estates, as in cases of insolvency, bank- ruptcy, lunacy, and death, the rules of distribution were the same. The contract in this case established a defined relation, a rela- tion depending for its origin and extent upon the intention of the parties. The question is, do the administrators of a deceased party succeed to that relation after the death of the party, or was it dissolved by that event? On this question the books give us an uncertain light. In Hyde v. Windsor (Cro. Eliz. 552) it is said that an agreement to be performed by the person of the testator, and which his executor cannot perform, does not sur- vive. But here the uncertainty remains, for the acts which an executor cannot perform are undefined. It recognizes the princi- ple, however, that an executor does not fully succeed to the con- tract relations of his testator. The case of Bohson v. Drummond (2 Barn. & Adol. 303, 22 Eng. C. L. Rep. 81) is more specific; for in that case it was held that an agreement by a coachmaker to furnish a carriage for five years and keep it in repair, was personal and could not be assigned, and executors and administrators are assigns in law {Hob. 9 6. Gro. Eliz. 757; Latch. 261; Wentw. Executors 100) ; that being a general term, applying to almost all owners of property or claims, whether their title be derived by act of law or of the parties. And it is no objection that one may take as executor or administrator in certain cases where the English laws of main- tenance and forms of action would not allow him to take as assignee in fact, for those laws do not extend to such a case, and they have no application here. In Quick v. Ludhurrow (3 Bulst. 29) it is said that executors are bound to perform their testator's contract to build a house, but the contrary is said in Wentw. Executors, 124, Vin. Ah. " Covenant," E., pi. 12, to have been declared in Hyde v. Windsor, though we do not find it in the regular reports of the case. 5 Co. 24; Cro. Eliz. 552. But these are both mere dicta. The same principle is repeated in Touchstone, 178, yet even there a lessee's agree- ment to repair is not so construed; and in Latch Rep. 261, the liability of executors on a contract to build is for a breach in the testator's lifetime. In CooTte v. Colcraft (2 Bl. Eep. 856), a 482 OPERATION OF CONTRACT. [Pabt IH. ooTenant not to exercise a particular trade was held to establish a mere personal relation and not to bind executors; and the con- trary is held in Hill v. Hawes, Vin. Ab., title "Executors," Y. pi. 4. And so executors and administrators stand on the same footing -with assignees in fact with regard to apprentices; and contracts of this nature are held not to pass to either, because they constitute a mere personal relation, and are, therefore, not transferable; 2 Stra. 1266; 4 Ser. & B. 109; 1 Mass. 172; 19 Johns. 113; 1 Boh. 519; 12 Mod. 553, 650; 5 Go. 97. The case most nearly resembling this is Wentworth v. Cock (10 Ad. & El. 42, 37 Eng. C. L. R. 33), where a contract to deliver a certain quantity of slate, at stated periods, was held to bind the executors. This case was decided without deliberation, and with but little argument on the part of the executors. The plaintiff relied on the case of Walker v. Hull (1 Lev. 177), where executors were held bound to supply the place of the testator in teaching an apprentice his trade. But that case had long ago been denied in England (2 Stra. 1266), and is rejected here. Com- monwealth V. King, 4 Ser. & E. 109. This last case treats the contract as a mere personal one, that is dissolved by death, and regards as absurd the doctrine in Wadsworth v. Ouy (1 Keb. 820, and 1 Sid. 216), that the executors are bound to maintain the apprentice, while he is discharged from duty. But the authority principally relied on by the counsel in Went- worth V. Cock, is the Roman law, Code Just. 8, 38, 15, and the commentary on it in 1 Pothier on Oblig. 639. Yet there are few subjects in the Roman law wherein its unlikeness to ours is more marked than in the matter of succession to personal estate, and ■ therefore its example herein is almost sure to mislead. The difference is sufB.ciently indicated, when we notice that the Roman executor was in all cases either the testamentary or the legal heir, and if he accepted the estate he was considered as standing exactly in the place of the decedent, and was of course bound for alli»his legal liabilities, including even many sorts of offenses, whether the estate was sufficient or not. He was bound as heir and by reason of the estate given to him, and not as one appointed to settle up the estate.- If the heir was unwilling to accept the estate upon these terms, it became vacant, and the Chap. II. § 2.] ASSIGNMENT OF CONTKACT. 483 prsetor appointed curators to administer for the benefit oif aj.1. It would seem strange that such curators should be bound to carry on the business of the deceased, where they are appointed to set- tle it up; yet how it really was does not appear. Dig. 427. Our statute recognizes the duty of the executor and administra- tor to pay all debts owing by the deceased at the time of his death, and this is the common principle. In another clause it makes the executor and administrator liable to be sued in any action, except for libels and slanders and wrongs done to the person, which might have been maintained against the decedent if he had lived. But this furnishes us no aid in this case, and was not intended to. Its purpose is to enlarge and define the rights of action, which, existing against the individual, should survive against his estate. Not contract relations and duties, but remedies for injuries already done, are declared to survive. If the decedent committed no breach of contract, he was liable to no action when he died, and this law cannot apply. We are then without any well-defined rule of law directly ap- plicable to this case, and are therefore under the necessity of deducing the rule for ourselves. The elements from which this deduction is to be made are the contract itself, the ordinary principles and experience of human conduct, the decisions in- analogous cases, and the nature^of the ofi8.ce of administrator. We repeat the question : Does such a contract establish any- thing more than a personal relation between the parties? This is a mere question of construction, depending upon the intention of the parties {Hob. 9; Telv. 9; Cro. Jac. 282; 1 Bing. 225; 8 Eng. C. L. R. 307) unless the intention be such as the law will not enforce. Is it probable that either party intended to bind his executors or administrators to such a relation? The contract does not say so, and we think it did not mean it ; for it would involve the intention that the administrators of one shall be lumber merchants and those of the other sawyers. The character of the contract demands not such a construction; for each deliv- ery under it is necessarily of complete and independent articles, and each delivery was to be at once a finished work on each side. There may be cases when it is necessary that the executor or administrator shall complete a work already begun by the decoi. 484 OPERATION OF CONTRACT. [Part HI, dent, and then they may recover in their representative charac- ter. 1 Crompt. & Mees. 403; 3 Mees. & W. 350; 2 Id. 190; 3 W. & Ser. 72. But here every act of both parties was complete in itself. From the contract itself, and from the ordinary prin- ciples of human conduct, we infer that neither party intended the relation to survive. A contrary view is incompatible, in the present case, with the ofB.ce of administrator; for it would require him to have the possession of the saw -mill in order to fulfill the contract; and yet administrators have nothing to do with the real estate, unless the personal estate is insufficient to pay the debts, and therefore they cannot perform. It is incompatible with the general duties of administrators, in that it would require them to carry on the business left by the decedent, instead of promptly settling it up; it would require him to satisfy claims of this character within a year, or begin to do so, while the law forbids him to do so except at his own risk ; and it might hang up the estate to a very pro- tracted period. We are therefore forbidden to infer such an intention, and possibly to enforce it even if it appeared. The inference is further forbidden by the spirit of analogous cases. It would seem absurd to say that the administrator of a physician, or author, or musician could be compelled to perform their professional engagements, no matter how the contract might be expressed. The idea is ludicrous. Yet it has been supposed that an administrator might take the place of his intestate in teaching an apprentice to be a surgeon, or saddler, or shoemaker, or mariner, or husbandman, or in demanding services from an ordinary laborer ; but the idea was rejected by the court. On what ground? Most certainly not that no one else could be got to take the place of the decedent; but on the ground that no such substi- tution was intended by the contract, together perhaps with the feeling of the incompatibility of such a substitution with the duties imposed by law upon administrators. The law trusts people to settle up estates on account of their honesty and gen- eral business capacity, and not for any peculiar scientific or artistic skill, and the State does not hold itself bound to furnish such abilities. Some people may suppose that it requires no great skill to manufacture boards, if one has the material and Chap. 11. §2.] ASSIGNMENT OF CONTRACT. 485 machinery; but still we cannot suppose that the deceased was contracting for any kind' of skill in his administrators. For these reasons the court below was right in declaring in substance, that the administrators were liable only for breaches committed by the intestate in his lifetime, and the same principle applies ■to the death of either party. These views set aside some of the exceptions as entirely unimportant, and in the others we dis- cover no error, and no principle that calls for any special remarks. Judgment afB.rmed.^ 1 See Lacy v. Oetman, 119 N. Y. 109 (contract of service) : Wade v. Kalb- Jleisch, 68 N. Y. 282 ; Chase v. Fitz, 132 Mass. 359. Cf. Allen v. Baker, 86 N. C. 91 (breach of contract of marriage) : Siler v. Ch-ay, 86 N. C. 566 (con- tract to care for and support another). Cf. Janin v. Browne, 59 Cal. 37. See also Adams Badiator <& Boiler Co. v. Schnader, 155 Pa. St. 394, post, p. 549. For cases indicating a less stringent rule than that applied in the principal case, see Drummond v. Crane, 159 Mass. 577 ; Billings' Appeal, 106 Pa. St. 55a 486 OPERATION OF CONTRACT. [Part UI. CHAPTER 111. JOINT OBLIGATIONS. § 1. Joint promises. (t . ) Joint promisors. BRAGG V. WETZELL. 6 BLACKFORD (Ind.), 95. — 1839. Bi/ACKFOBD, J. This was an action of debt for money lent, brought by Zacheus Wetzell against Wilson Bragg. The suit originated before a justice of the peace. The justice gave judg- ment for the plaintiEE, and the defendant appealed. In the Circuit Court, the defendant moved to dismiss the cause, on the ground that one Smith ought to have been joined as a defendant in the suit. The motion was overruled. The cause was submitted to the court, and a judgment rendered for the plainti£E. The writ was issued against Bragg alone. The declaration is as follows : " The plaintiff complains of Wilson Bragg and Seneca Smith, part- ners, trading under the firm of Bragg &■ Smith, of a plea that they render unto him $100, which to him they owe, and from him unjustly detain ; for that whereas the defendants, heretofore, to wit, on the 27th of June, 1837, at, etc., were justly indebted to the plaintiff in the sum of f 100, for so much money lent to the defendants by the plaintiff, and at their special instance and request ; yet the defendants, though often requested, have not, nor has either of them, paid the said sum of money, or any part thereof, to the plaintiff ; but to pay the same and every part thereof, the defendants have at all times refused, and stiU do refuse, to the damage," etc. The plaintiff here shows by his declaration, that Smith, who is not sued, is a joint party to the contract with the defendant, and that Smith is living. It is impossible, under these circumstances, Chab. III. § 1.] JOINT OBLIGATIONS. 487 that the plaintiff can recover. It is true, that since the case of Mice V. Shute (5 Burrow, 2611), the facts that there is a joint con- tractor not sued, and that' he is alire, are generally required to be pleaded in abatement; but that rule has no application to cases like the one before us. Here the plaintiff, in his declaration, admits those facts, and shows that he has no right to sue the defendant alone. The suit should have been dismissed. The non-joinder, in such a case as this, may be taken advantage of on a motion in arrest of judgment. Saund. 291 &, note 4. Or it . may be assigned for error. Chitty's Plead. 53. The judgment is reversed and the proceedings subsequent to the motion to dismiss the cause set aside, with costs. Cause temandedy etc.* HALE V. SPATJLDING et cU. 145 MASSACHUSETTS, 482.— 1888. Contract upon an instrument under seal by which the defend- ants, six in number, agreed to pay the plaintiff, on demand, six- sevenths of any loss which he might suffer as indorser of a certain note. Defendant Saltmarsh filed an answer alleging that, since the execution of the instrument sued on, plaintiff had executed and delivered the following instrument, under seal, to one of the joint obligors : "Received of L. V. Spaulding $1060.84, in full satisfaction for his liability on the document," etc. (describing it). It appeared in evidence that plaintiff had settled with each of ^ A joint demand cannot be set off against a separate demand. Elliott v. Bell, 37 "W. Va. 834. " Wherever an obligation is undertaken by two or more persons, it is the general presumption of law that it is a joint obligation. Words of express joinder are not necessary for this purpose ; but, on the other hand, there should be words of severance, in order to create a several responsibility." — Alpaugh v. Wood, 53 N. J. L. 638, 644. See also EllioU v. Bell, 37 W. Va. 834. But contracts which would be joint by the common law are, in many States, required by statute to be construed as joint and several. Stim^ $on's Am. St. L., § 4113. 488 OPERATION OF CONTRACT. [Part III. the defendants, except Saltmarsh, for their proportionate part of the liability, and executed the paper to Spaulding. Plaintiff offered to prove that there was no intention to release Saltmarsh, but the court held the offer immaterial, and directed a verdict for defendant. C. Allen, J. The words "in full satisfaction for his lia- bility" import a release and discharge to Spaulding, and, the instrument being under seal, it amounts to a technical release. The plaintiff does not controvert the general rule, that a release to one joint obligor releases all. Wiggin v. Tudor, 23 Pick. 434, 444; Goodnow v. Smith, 18 Pick. 414; Pond v. Williams, 1 Gray, 630, 636. But this result is avoided when the instrument is so drawn as to show a contrary intention. 1 Lindl. Part. 433; 2 Chit. Con. (11th Am. ed.) 1154 et seq. ; Ex parte Good, 5 Ch. D. 46, 55. The difficulty with the plaintiff's case is, that there is nothing in the instrument before us to show such contrary intention. Usually a reservation of rights against other parties is inserted for that purpose; or the instrument is put in the form of a covenant not to sue. See Kenworthy v. Sawyer, 125 Mass. 28; Willis v. De Castro, 4 C. B. (N. S.) 216; North v. Wakefield, 13 Q. B. 536, 541. Parol evidence to show the actual intention is incompetent. Tuckerman v. Newhall, 17 Mass. 580, 685. The instrument given in this case was a mere receipt under seal of money from one of several joint obligors, in full satisfac- tion of his liability on the document signed by himself and others. There is nothing to get hold of to show an intent to reserve rights against the others. He might already have discharged each of them by a similar release. Exceptions overruled.^ ' Nothing short of a technical release under seal will operate to discharge a joint obligor. Rowley v. Stoddard, 7 Johns. 210 ; Catskill Bank v. Mes- senger, 9 Cow. 38 ; Crane v. Ailing, 15 N. J. L. 423 ; Kidder v. Kidder, 33 Pa. St. 268, post, p. 625. Though if the release be upon payment in full by one of the joint obligors, the result would seem to be otherwise. Goss v. Ellison, 136 Mass. 503. The rule has been modified by statute in some States. Stimson's Am. St. L., § 5013. " A covenant not to sue a sole debtor may be pleaded as a general release in bar, to avoid circuity of action. But if he be one of two or more debtors, Buch covenant cannot be pleaded in bar, and if he should be sued contrary Chap. III. § 1.] JOINT OBLIGATIONS. 489 JEFFEIES V. FEEGUSON, Administrator. 87 MISSOURI, 244.— 1885. Black, J. C. S. Jeffries and James N. Inge •were sureties on a note given by Ctas. E. Jeffries to one Eoberts. Before and after judgment on the note, C. S. Jeffries paid off the debt, and then presented his demand to the Probate Court, asking to have the one-half of the amount so paid, first deducting the proceeds of certain securities, allowed against the estate of Inge, the co- surety. The contention that plaintiff could only sue in a court having full and complete equity jurisdiction is not well taken. Courts of law have adopted the equitable doctrine of contribution, and award relief to one surety who has paid more than his share. The surety paying the debt may have his action at law against the other surety for any excess which he has paid over his pro- portionate share. Van Petten v. Richardson, 68 Mo. 380. The plaintiff's demand was allowed by the Probate Court, and he again recovered in the Circuit Court, to which the case was appealed. We have examined the evidence and are satisfied the estate received all credits to which it was entitled. The judgment is aifirmed. All concur.* to the terms of it, he must pursue his remedy by an action upon the cove- nant." — "Wells, J., in McAllester v. Sprague, 34 Me. 296, 298. A judgment rendered against one of several joint debtors in an action against him alone is a bar to an action against the others. Mason v. Eldred, 6 Wall. 231 ; Candee v. Smith, 93 N. Y. 349 ; Heckemann v. Toung, 134 N. Y. 170. See Stimson's Am. St. L., § 5015, for statutory modifications. The death of one of several joint debtors extinguishes the liability as to him and the survivors alone are liable. Yorks v. Peck, 14 Barb. (N. Y.) 644 ; Foster v. Hooper, 2 Mass. 572. Contra : Eldred v. Bank, 71 Ind. 543 ; and the common law rule has now been generally modified by statute. Stimson's Am. St. L., § 4113. As to revival of joint promises barred by the statute of limitations upon payment or promise by one of the joint parties, see Shoemaker v. Benedict, 11 N. Y. 176. 1 Accord : Chipman v. Morrill, 20 Cal. 131 ; Durbin v. Kuney, 19 Oregon, 71 ; Norton v. Coons, 3 Den. (N. Y.) 132 ; Chaffee v. Jones, 19 Pick. 260. " Contribution is not founded upon, although it may be modified by, con- tract. The right to it is as complete in the case where the sureties are unknown to each other, as in any other. The law following equity will 490 OPERATION O* CONTRACT. [Pabt IU. (ii.) Joint promisees. SWEIGAET V. BEEK et al. 8 SERGEANT & RAWLE (Pbnn.), 308. — 1822. Action of debt on a bond. Judgment for plaintiffs. The bond was given by defendant to " the -widow and heirs and legal representatives of Peter Berk, deceased," conditioned to be void " if the said Sweigert should pay to the said widow and heirs and legal representatives of the said Peter Berk one thousand pounds, gold or silver coin, lawful money of Pennsylvania, at or immediately after the death of Margaret Berk, widow of the said Peter Berk, deceased, or to the said deceased's heirs or repre- sentatives, in equal shares alike, with lawful interest for the same to be paid annually unto the said Margaret Berk, during her natural life," etc. The statement of the cause of action averred the death of Margaret Berk, and that the plaintiffs were seven of the ten imply a promise to contribute, in order to afiord a remedy. But as this is in most instances a fiction, in aid of an equitable right, it will never be toler- ated where the relation upon which the equity is founded is wanting." — Gardiner, C. J., in Tobias v. Sogers, 13 N. Y. 59, 66. " An action at law by a surety for contribution must be against each of the sureties separately for his proportion, and no more can be recovered, even where one or more are insolvent. In the latter case, the action must be in equity against all the co-sureties for contributions, and, upon proof of the insolvency of one or more of the sureties, the payment of the amount will be adjudged among the solvent parties in due proportion." — Miller, J., in Easterly v. Barber, 66 N. Y. 433, 439. " We have often held, as between the creditor and the estate of a deceased surety, that the joint obligation of the latter ended with his death. We are not yet prepared to decide that his several obligation, originating at the date of the common signature, to contribute ratably to the payments compelled from his associates, also terminates at his death. . . . The justice of such a rule is apparent. Originating in equity, it has been grafted upon the law with the aid of an implied promise to secure the legal remedy. We see no reason to reverse it, but every consideration of equity and justice leads us rather to maintain and enforce it."— Finch, J., in Johnson v. Harvey, 84 N. Y. 363, 366, 367. " It is well settled that one surety has a claim against another, for contri- bution for any sum he may be compelled to pay, although such co-surety may have been discharged from liability primarily upon the same contract." —Peters, J., in Hill v. Morse, 61 Me. 541, 544. Obap. id. § 1.] JOINT OBLIGATIONS. 491 children of Peter Berk, and eacli entitled to one hundred pounds of the one thousand pounds promised by defendant. TiLGHMAN, C. J. It appears by the plaintiffs' own showing, that the bond was given to ten obligees jointly, all of whom are living, and the action is brought by only seven of theln. I am at a loss to conceive on what principle the action can be sup- ported. It is well settled that if a bond be given to several obligees they must all join in the action, unless some be dead, in which case that fact should be averred in the declaration. And if it appear on the face of the pleadings that there are other obligees living who have not joined in the action, it is fatal, on demurrer or in arrest of judgment. The authorities on this point are numerous, and will be found collected in 1 Saund. 291 f. The counsel for the plaintiffs has urged the inconven- ience of this principle when applied to the bond in suit, where it appears, by the condition, that ten persons have separate interests, and it may be that some of them have received their shares before the commencement of this suit. Th6re is very little weight in that arg^ument. The acceptance of the bond was the voluntary act of the obligees, and if people will enter into contracts which are attended with difficulties, they have no right to expect that established principles of law are to be prostrated for their accommodation. But in truth, there is very little diffi- culty in the case . The action may be brought on the penalty of the bond, in the name of all the obligees, and the judgment entered in such a manner as to secure the separate interest of each. The action may be supported although some of the obligees have received their shares, because the bond is forfeited unless they have all been paid. It was objected that those who had been paid might refuse to join in the action, or might release the obligor. But the court would permit those who are unpaid to make use of the names of the other obligees, against their consent; neither would their release be suffered to be set up in bar of the action. It may be resembled to the case of an assigned chose in action, where the action is brought in the name of the assignor, for the use of the assignee; there the release of the assignor would not be regarded. A release, in such case, would be a collusion between 492 OPERATION OF CONTRACT. [Part in. the assignor and assignee [debtor] to defraud a third person, and therefore void. It is unnecessary to decide whether each of the obligees, in the present case, could have supported a separate action for his separate interest, appearing on the face of the condition. I will only say that such an action would be hazard- ous. But this action has not been brought for the separate interest of any one. Seven of the obligees have joined in it. So that it is neither joint nor several. On no principle, therefore, can the action be supported. There were several other points discussed in the argument, in which the court will give no opinion. The judgment of the Court of Common Pleas must be reversed, and restitution awarded. Judgment reversed and restitution awarded.* § 2. Joint and several promises. (i.) Joint and several promisors. CUMMINGS et al. v. THE PEOPLE, &c. 60 ILLINOIS, 132. — 1869. Action of debt on a sheriff's bond. Judgment for plaintiff. The declaration averred five obligors, but no process issued against one of them. Mr. Chief Justice Bkeese. . . . The next objection is, that as the bond in suit was a joint and several bond, suit should be brought against all the obligors, or against each co-obligor severally, and not against an intermediate number. 1 Accord : Ehle v. Purdy, 6 Wend. (N. Y.) 629 ; Farni v. Tesson, 1 Black (U. S.) 309. A release by one of several joint promisees is, in the absence of collusion and fraud, a bar to an action by the others. Pierson v. Hooker, 3 Johns. (N. Y.) 68 ; People ex rel. Eagle v. Keyset, 28 N. Y. 228 ; Myrick v. Dame, 9 Cush. (Mass.) 248. Upon the death of a joint promisee the right of action vests in the sur- vivors. Crocker v. Beal, 1 Lowell (TJ. S. C. C), 416 ; Murray v. Mum/ord, 6 Cow. (N. Y.) 441 ; Indiana &c. My. v. Adamson, 114 Ind. 282 ; Donnell y. Manson, 109 Mass. 676. Chap. III. § 2.] JOINT OBLIGATIONS. 493 There is no averment in the declaration that Argo was dead at the time of the commencement of the suit. The rule is, if one of the joint obligors be dead, it is not necessary to notice him in the declaration, nor need the survivors be declared against as such, but they may be sued, as if they alone were primarily liable. 1 Ch. PI. 43. To the same effect is Eichards r. Heather, 1 Barn. & Aid. 29, and Mott v. Petrie, 15 Wend. 318. The rea- son is obvious. The rule being that on a joint and several obli- gation, executed by more than two persons, one may be sued, or all, but not an intermediate number; therefore, if one of the co-obligors be not named in the declaration, those who are sued may plead the fact in abatement. To such a plea the plaintiff could reply, that such co-obligor was dead before the commence- ment of the suit, as that would be a matter in pais. It is averred, in this declaration, that Argo executed the bond as one of the sureties; but the defendants in error say, in the brief of counsel, that he was dead at the time the suit was com- menced. If this was so, then it should not have been alleged in the declaration that he executed the bond, but having alleged it the question is presented, is not the declaration defective by reason of his non-joinder in the action, and cannot advantage be taken of it by motion in arrest of judgment, or an error? The defendants in error contend that, though Argo might be living, and should have been made a party, it is too late now to make the objection — it should have been made by plea in abate- ment, and cannot be raiseS on error. It is admitted, if the defendants in error had not alleged in their declaration that the defendants therein, together with Argo, executed the bond, the defendants would have been required to plead his non-joinder in abatement. But the fact appears on the face of the declaration; a plea, therefore, was not necessary to bring it before the court. Why inform the court by plea of a fact which the plaintiff himself places on the record? This de- fect in the declaration could have been reached by general demurrer, or by motion in arrest of judgment, and can now be availed of on error. Plaintiffs, by their own showing, inform the court there is another joint obligor, who has not been joined in the action; it 494 OPERATION OF CONTRACT. [Part UI. was patent of record, and no plea was necessary to bring the fact before the court. 1 Ch. PI. 46; 2 Sanders 9, note 10 to the case of Jeffreson v. Morton et al. ; Cobell y. Vaughan, 1 Id. 291, in note; Whitaker v. Young, 2 Cowen, 569; Horner r. Moor, cited in 5 Burrow, 2614 ; Leftwich v. Berkeley, 1 Hen. & Munf . 61 ; Mewell V. Wood, 1 Munf. 655; Harwood et al. v. Roberts, 5 Maine, 441. The rule is well settled that matters in pais only need be pleaded. This is matter of record. This record shows a joint and several bond executed by five persons, four of whom are sued. This appearing on the face of the declaration, the case is brought within the principle of the cases above cited, and about which there can be no doubt. For this error the judgment must be reversed. Judgment reversed.* BANGOR BANK v. TEEAT et al. 6 GREENLEAT (6 Maine), 207. — 1829. Mellbn, C. J. This is an action of assumpsit and the decla- ration states that the note was signed by the defendants and Allen Gilman jointly and severally; and that a judgment had been recovered on the note against Gilman in a several action against him. The defendants have moved in arrest of judgment on account of the joinder of them in the present suit. When three persons by bond, covenant, or note jointly and severally contract, the creditor may treat the contract as joint or several at his election, and may join all in the same action or sue each one severally; but he cannot, except in one case, sue two of the three, because that is treating the contract neither as joint or several. But if one of the three be dead, and that fact be averred in the declaration, the surviving two may be joined. In the present case Gilman is living. The plaintiffs contend that as judgment had been recovered against him, such judgment 1 " The rule is elementary that when an obligation is joint as well as several, all must be proceeded against jointly, or each severally. There is no authority for suing three out of four joint makers." — Champlin, J., in Fay & Co. v. Jenks & Co., 78 Mich. 312. See also State v. Chandler, 79 Maine, 172. Chap. ni. § 2.] JOINT OBLIGATIONS. 496 entitled them to join the other two in the same manner as though he was dead. This is not so. When they sued Gilman alone, they elected to consider the promise or contract as several ; and having obtained judgment they are bound by such election. In case of death, the act of God has deprived the party of the power of joining all the contractors, but he may still consider the cop- tract as joint, and sue the surviving two. The plaintiffs have disabled themselves from maintaining this action by their former one. 1 iSaund. 291 e. The objection is good on arrest of judgment where the fact relied on by the de- fendants appears on the record, as in the present case. Judgment arrested.^ I "The rule that a judgment upon a joint obligation merges the cause of action, and works a release of a joint obligor against whom no judgment is taken, does not apply to a joint and several note." ^- Criles v. Canary, 99 Ind. 116. See also Hix v. Davis, 68 N. C. 231. "Even without satisfaction, a judgment against one of two joint con- tractors is a bar to an action against the other, within the maxim transit in rem judicatum ; the cause of action being changed into matter of record, which has the effect to merge the inferior remedy in the higher. King v. Eoare, 13 M. & W. 504. " Judgment in such a case is a bar to subsequent action against the other joint contractor because, the contract being merely joint, there can be but one recovery, and consequently the plaintiff, if he proceeds against one only of two joint promisors, loses his security against the other, the rule being that by the recovery of the judgment the contract is merged, and a higher security substituted for the debt. Jtobertson v. Smith, 18 Johns. (N. T.) 477 ; Ward v. Johnson, 13 Mass. 149 ; Cowley v. Patch, 120 Id. 138 ; Mason V. Eldred et al., 6 "Wall. 231. " But the rule is otherwise where the contract or obligation is joint and several, to the extent that the promisee or obligee may elect to sue the prom- isors or obligors jointly or severally ; but even in that case the rule is subject to the limitation, that if the plaintiff obtains a joint judgment, he cannot afterwards sue them separately, for the reason that the contract or bond is merged in the judgment ; nor can he maintain a joint action after he has recovered judgment against one of the parties in a separate action, as the prior judgment is a waiver of his right to pursue a joint remedy." — Mr. Justice Clifford, in Sessions v. Johnson, 95 U. S. 347, 348. 4Hd OPERATION OF CONTRACT. [Part HI. MAT V. HANSON et aX. 6 CALIFORNIA, 642. — 1866. Action against Hanson and Fall personally, and Dewey as administrator on a joint and several tond executed by Hanson, Fall, and Dewey's intestate. Demurrer sustained. Mb. Chief Justice Mubray. The demurrer was properly sustained upon the second ground, because the administrator of Dewey ought not to have been joined. In actions upon joint and several contracts or obligations, an administrator cannot be joined with the survivors, because one is joined de bonis testatoris and the other de bonis propiis. Humphreys v. Yale, 5 Cal. 173. It is said the demurrer was sustained on a different ground in the court below. It makes no difference, as this was one of the causes of demurrer assigned below. Judgment affirmed.* (m.) Joint or several promisees. WILLOUGHBY v. WILLOUGHBY. 5 NEW HAMPSHIBE, 244. — 1830. Assumpsit. Plaintiff nonsuited. The action was on a note as follows : " HoLLis, June 25, 1828. "For value received, I. promise to pay "Washington or Joseph Wil- loughby $200 on demand, with interest. "John Willoughby." By the Coubt. We are of opinion that the note in this case is evidence of a contract with "W. and J. Willoughby, and that or in the note must be understood to mean and. Such being the purport of the note upon the face of it, this action cannot be maintained upon it, and the nonsuit must stand. Blanckenhagen and another v. Blundell (2 B. & Aid. 417) was an action on a note which was described in the declaration 1 See also Eggleston v. Buck, 31 111. 264. Chap. III. § 2.] JOINT OBLIGATIONS. 497 as payable to J. P. Damer, or the plaintiffs, and the suit was, like this, brought in the name of the plaintiffs without joining J. P. Damer. The cause was decided in favor of the defendant upon a demurrer to the declaration. But Bailey, J., intimated that an action might be maintained upon the note in the name of all the payees. Judgment on the nonsuit.^ BOGGS V. CUETIN et al. 10 SERGEANT & EAWLE (Penn.), 211. — 1823. Assumpsit for money paid to the use of defendant (plaintiff in error). Judgment for plaintiffs (defendants in error). Defendant owed the firm of Duncan & Foster, and the plaintiffs, J. & D. Mitchel, and Curtin & Boggs, gave their joint note for the amount, and afterwards paid it. Defendant settled with J. & D. Mitchel, who gave him a receipt in full. Gibson, J. The action of assumpsit must be joint or several, accordingly as the promise on which it is founded is joint or several. Where the promise is express, there can be little diffi- culty in determining to which class it belongs, as its nature necessarily appears on the face of the contract itself ; and if it be joint, all to whom it is made must, or at least may, sue on it jointly, and after having recovered, settle among themselves 1 " One and the same contract, whether it be a simple contract or a contract by deed, cannot be so framed as to give the promisees or covenantees the right to sue upon it both jointly and separately." — Dicey on Parties, pp. 110, 111. "Where a covenant is in its terms expressly and positively joint, the covenantees must join in an action upon it, although as between themselves their interest is several." — Clapp v. Pawtucket Inst, for Saving, 15 R. I. 489, 494. See also Seymour v. Western B. Co., 106 U. S. 320. " When the legal interest in a covenant and in the cause of action thereon is joint, the covenant is joint, although it may, in its terms, be several or joint and several." — Capen v. Barrows, 1 Gray (Mass.), 376, 379. "As the language of the promise is not expressly joint, but, to say the least, may be construed to be joint or several, it should, according to the authorities cited, be held several, because the interest of the promisees is several." — Emmeluth v. Home Benefit Ass^n, 122 N. Y. 130, 134. See also Jacobs V. Davis, 34 Md. 204 ; Ludlow v. McCrea, 1 Wend. (N. Y.) 228. KK 498 OPERATION OF CONTRACT. ' [Part III. the proportion of the damages to which each is respectively entitled : as in the case put in the note to Cory ton v. Lithebye (2 Saund. 116 a, note 2), where there was a promise to two, in consideration of £10 to procure the re-delivery of their several cattle which had been distrained. But an implied promise, being altogether ideal and raised out of the consideration only by intendment of law, follows the nature of the consideration; and as that is joint or several, so will the promise be ; as in the case of the implied promise to contribute, which arises in favor of sureties, or persons who have paid a debt for which, along with others, they were jointly liable, and on which they cannot sue jointly, but each has a separate action, for what he has paid beyond his aliquot part. Qraham v. Robertson, 2 T. R. 282; Brand & Herbert v. Boulcott, 3 Bos. & P. 235. Now, in an action for money paid, laid out, and expended, to the defendant's use, actual payment without regard to the liability under which it was made is the consideration of the assumpsit. It is because the plaintiff has paid, not because he was bound to pay, that the law implies a promise, the obligation to pay only supplying the place of a precedent request, which would other- wise be necessary. The criterion, therefore, is not whether the plaintiffs were jointly liable to pay the debt, but whether they actually paid it jointly. If one has paid the whole, it would be clear that all could not sue. But joint payment can be made only with joint funds ; for each must contribute to the whole, and as payment with the money of the one cannot be payment by the other, there must necessarily be an undivided interest in the fund out of which the money comes ; otherwise, there will separately be payment by each, of particular parts of the debt. Now there was no evidence that the defendant's debt was paid with funds held in common by the respective firms of Curtin & Boggs, and of J. & D. Mitchel. The receipt of Duncan &, Foster contains no assertion of the fact, nor would it be evi- dence against the defendant if it did. On the other hand, the receipt of J. & D. Mitchel, to the defendant, for the part which they had advanced, shows that they considered it to have been their separate property; for had it been the joint property of the. two firms when it was paid out, it would hardly have been treated Chap. III. § 2.] JOINT OBLIGATIONS. 499 as the separate property of either when it was returned, as that would have had the effect of securing the one, and of casting the risk of recovering what remained due on the other. Then, under the pleadings, payment out of a common fund was a necessary part of the plaintiff's case and one which they were bound to prove; and having failed to prove it, the defendant was entitled to a direction that they had not made out a case on which they ought to recover. The remaining point was not necessarily involved in the cause, and need not have been stirred if the court below had given the direction required. It is unnecessary, therefore, to decide it here. Judgment reversed. Paet IY. THE INTEEPRETATION OF CONTRACT. CHAPTER I. •RULES RELATING TO EVIDENCB. § 1. Proof of document. STORY V. LOVETT. 1 E. D. SMITH (N. Y. C. P.), 153. — 1861. Action for conversion. Judgment for plaintiff. Defendant appeals. Plaintiff claimed to be the mortgagee of the property in ques- tion. The mortgage was produced and the mortgagor testified that it had been executed by him. The execution was in the presence of a subscribing witness, who was not called. Defend- ant objected to this testimony. Woodruff, J. The rule that the execution of an instrument must be proved by the subscribing witness, if there be one liv- ing, competent to testify, and within the jurisdiction of the court, is inflexible. The adverse party has an undeniable right to require him who offers the instrument in evidence, to call the person who was chosen to attest the fact of the execution, that he may, by cross examination, elicit all the attending circum- stances. The oath of the grantor, obligor, or mortgagor, cannot be substituted. JSollenback v. Fleming, 6 Hill, 303; Henry v. Bishop, 2 Wend. 575; 2 Greenl. Ev., § 569. It would not be difficult to assign other reasons why the plain- 600 Chap. I. § 1.] BULES RELATING TO EVIDENCE. 501 tiff was not entitled to recover on the ease exhibited at the trial, but the above is a sufB.cient reason for reversing the judgment. The judgment must be reversed.' COLBY V. DEARBORN et al. 59 NEW HAMPSHIRE, 326. — 1879. Writ of entry. Clark, J. Both parties claim title to the demanded premises under Kimball C. Prescott. The plaintiff's title is derived from a levy founded on an attachment made June 24, 1873. The defendants are in possession, claiming title under a mortgage, executed by Prescott, February 14, 1873, and recorded February 20, 1873, more than four months prior to the date of the plaintiff's attachment; and therefore if the mortgage is valid, the defendants are in possession under a title prior to the plaintiff's. The plaintiff contends that the mortgage is void for uncertainty in the description of the note secured by it, the amount of the note not being stated in the condition of the mortgage. The consid- > See N. Y. Code Civ. Proc, §§ 935-937 ; for typical legislation, see Cal. Code Civ. Froc, §§ 1929-1951 ; Mass. Fub.' St., o. 167, § 21 ; III. M. S., o. 110, § 34. "The English, rule requires that the execution of an attested writing shall he established by the testimony of the attesting witness, or, in case of his death, disability, or absence from the jurisdiction, by proof of his hand- writing. Barnes v. Trompowsky, 7 T. R. 265 ; Call v. Dunning, 4 East, 53 ; The King v. Sarringioorth, 4 M. & S. 350 ; Whyman v. Garth, 8 Ezch. 803. In this country the English rule has been closely adhered to in some States, while in others it has been variously modified and restricted. Brig- ham V. Falmer, 3 Allen, 450 ; Hall v. Fhelps, 2 Johns. 451. It haa been held in this State that when an attestation is not necessary to the operative effect of the instrument, proof of the handwriting of a witness who cannot be produced may be dispensed with, and the paper be received in evidence upon proof of the hand of the contracting party. Sherman v. Transporta- tion Co., 31 Vt. 162." — Munson, J., in Sanborn v. Cole, 63 Vt. 590, 593. "It is an established rule of evidence, and often recognized, that a deed more than thirty years old may be given in evidence without proof of its execution when found in the possession of the party claiming under it, and the possession of the thing conveyed has followed the conveyance." — Stockbridge v. West Stockbridge, 14 Mass. 257 ; Clark v. Owens, 18 K Y. 434. 502 INTERPRETATION OF CONTRACT. [Past IV. eration of the mortgage is $400, and the condition is the payment of a note of even date with the mortgage, payable in four months from date, with interest. The court received parol evidence showing that the note intended to be secured by the mortgage was a note for $400, bearing the same date as the mortgage, and payable in four months from date, with interest. This evidence was rightfully received. Benton v. Sumner, 67 N. H. 117; Cushman v. Luther, 63 N. H. 563; Bank v. Roberts, 38 N. H. 23; Melvin v. Fellows, 33 N. H. 401; Boody v. Davis, 20 N. H. 140. The mortgage being valid, there must be Judgment for the defendants.^ O'DONNELL v. LEEMAN, 43 MAINE, 158. — 1857. [Reported herein at p. 100.] § 2. Eridence as to fact of agreement. EEYNOLDS v. EOBINSOK et al. 110 NEW YORK, 654. — 1888. Action for damages for breach of an alleged contract for the purchase by plaintiff, and sale by defendants, of a quantity of lumber. Judgment for defendants reversed at General Term. Defendants appeal. Andrews, J. The finding of the referee, which is supported by evidence, to the effect that the contract for the purchase and sale of the lumber on credit, contained in the correspondence between the parties, proceeded upon a contemporaneous oral understanding that the obligation of the defendants to sell and deliver was contingent upon their obtaining satisfactory reports from the commercial agencies as to the pecuniary responsibility of the plaintiff, brings the case within an exception to th^ gen- eral rule that a written contract cannot be varied by parol 1 Accord : Wilson v. Tucker, 10 R. I. 578. Ohap. I. § 3.] RULES RELATING TO EVIDENCE. 503 evidence, or rather it brings the case within the rule, now quite well established, that parol evidence is admissible to show that a written paper which, in form, is a complete contract, of which there has been a manual tradition, was, nevertheless, not to become a binding contract until the performance of some condi- tion precedent resting in parol. Pym v. Campbell, 6 El. & Bl. 370; Wallis v. Littell, 11 C. B. (N. S.) 368; Wilson y. Powers, 131 Mass. 539; Seymour v. Cowing, 4 Abb. Ct. App. Dec. 200; Benton V. Martin, 52 N. Y. 570; Juilliard v. Chaffee, 92 Id. 535, and cases cited; Taylor on Ev., § 1038; Stephen's Dig. Ev., § 927. Upon this ground, we think the evidence of the parol understanding, and also that the reports of the agencies were unsatisfactory, was properly admitted by the referee and sustained his report, and that the General Term erred in reversing his judgment. It is perhaps needless to say that such a defense is subject to sus- picion, and that the rule stated should be cautiously applied to avoid mistake or imposition, and confined strictly to cases clearly within its reason. The order of the General Term should be reversed, and the judgment on the report of the referee afQrmed. All concur. Order reversed and judgment affirmed.* § 3. Evidence as to the terms of the contract. a. Supplementary and collateral terms. WOOD V. MOEIAETY. 16 RHODE ISLAND, 518. — 1887. [Reported herein at p. 430.] * 1 Accord : Westman v. Krumweide, 30 Minn. 313 ; Blewitt v. Boorum, 142 N. Y. 357 (sealed Instrument). See for subsequent parol agreement, Brown v. Everhard, 52 Wis. 205; Homer v. Ins. Co., 67 N. Y. 478. That strangers to the contract may vary or contradict it by parol, see Kellogo v. Tompson, 142 Mass. 76. 2 See also Chapin v. Dobson, 78 N. Y. 74 ; Naumberg v. Young, 44 N. J. L. 331 ; Hale v. Spaulding, 145 Mass. 482, ante, p. 487 ; Van Brunt v. Day, 81 N. Y. 251 ; Wood Mowing &c. Go. v. Oaertner, 56 Mich. 453 ; Bradshaw 504 INTERPRETATION OF CONTRACT. [Pabt IV. THUKSTON V. ARNOLD. 43 IOWA, 43.— 1876. [Reported herein at p. 516.] &. Exiplanation of terms. GANSON et al. v. MADIGAN. 15 WISCONSIN, 144. — 1862. Action for price of reaper. Defense, non-delivery. Judg- ment for defendant. Plaintiffs appeal. Defendant ordered of plaintiffs in writing a reaper, warranted "to be capable, with one man and a good team, of cutting and raking off and laying in gavels for binding, from twelve to twenty- acres of grain in a day." Defendant was allowed to testify against plaintiffs' objection that the agent said "one span of horses " such as defendant's would do the work, and another witness (Gunn) was also allowed to testify to the effect that in a sale to him the agent said two horses would do the work. The evidence went to establish that the machine plaintiffs allege they tendered to defendant required four horses to run it. Dixon, C. J. . . . The word "team," as used in the contract, is of doubtful signification. It may mean horses, mules, or oxen, and two, four, six, or even more of either kind of beasts. We look upon the contract and cannot say what it is. And yet we know very well that the parties had some definite purpose in using the word. The trouble is not that the word is insensible, and has no settled meaning, but that it at the same time admits of several interpretations, according to the subject matter in contemplation at the time. It is an uncertainty arising from the indefinite and equivocal meaning of the word, when an interpre- tation is attempted without the aid of surrounding circumstances. It appears on the face of the instrument, and is in reality a v. Combs, 102 HI. 428 ; Sayre v. Wilson, 86 Ala. 151 ; Greenawalt v. Kohne, 85 Pa. St. 369. For the special rule applicable to deeds, see Gfreen v. Batson, 71 Wis. 54. Chap. I. 5 3.] RULES RELATING TO EVIDENCE. 505 patent ambiguity. The question is, can extrinsic evidence be received to explain it? We think it can. There is undoubtedly some confusion in the authorities upon this subject, especially if we look to the earlier cases ; but the later decisions seem to be more uniform. As observed by Chancellor Desaussure, -in Dupree T. McDonald (4 Des. 209), the great distinction of ambiguitas latens, in -which parol evidence has been more freely received, and ambiguitas patens, in which it has been more cautiously received, has not been sufficient to guide the minds of the judges with unerring correctness; some of the later cases show that there is a middle ground, furnishing circumstances of extreme difficulty. Judge Story was of opinion (Peisch v. Dickson, 1 Mason, 11) that there was an intermediate class of cases, partak- ing' of the nature both of patent and latent ambiguities, and comprising those instances where the words are equivocal, but yet admit of precise and definite application by resorting to the circumstances under which the instrument was made, in which parol testimony was admissible. As an example, he put the case of a party assigning his freight in a particular ship by contract in writing; saying that parol evidence of the circumstances attending the transaction would be admissible to ascertain whether the word " freight " referred to the goods on board of the ship, or an interest in the earnings of the ship. This distinction seems to be fully sustained by the later authorities, and we can discover no objection to it on principle. Beay v. Richardson, 2 C, M. & E. 422; Hall v. Davis, 36 N. H. 569; Emery v. Webster, 42 Maine, 204; Baldwin v. Carter, 17 Ct. 201; Drake v. Goree, 22 Ala. 409; Cowles v. Garrett, 30 Ala. 348; Waterman v. Johnson, 13 Pick. 261; Mechs.' Bank v. Bank of Columbia, 5 Wheat. 326; Jennings v. Sherwood, 8 Ct. 122; 1 Greenl. Ev., §§ 286, 287, and 288. The general rule is well stated by the Supreme Court of New Hampshire, in Hall v. Davis, as follows : " As all written instruments are to be interpreted according to their subject matter, and such construction given them as will carry out the intention of the parties, whenever it is legally possible to do so, consist- ently with the language of the instruments themselves, parol or verbal testimony may be resorted to, to ascertain the nature and qualities of the 606 INTEKPRETATION OF CONTRACT. [Pakt IV. subject matter of those instruments, to explain the circumstances sur- rounding the parties, and to explain the instruments themselves by show- ing the situation of the parties in all their relations to persons and things around them. Thus if the language of the instrument is applicable to several persons, to several parcels of land, to several species of goods, to several monuments, boundaries or lines, to several writings, or the terms be vague and general, or have divers meanings, in all these and the like cases, parol evidence is admissible of any extrinsic circumstances tending to show what person or persons, or what things, were intended by the party, or to ascertain his meaning in any other respect ; and this without any infringement of the general rule, which only excludes parol evidence of other language, declaring the meaning of the parties, than that which is contained in the instrument itself." If evidence of surrounding facts and circumstances is admitted to explain the sense in which the words were used, certainly- proof of the declarations of the parties, made at the time of their understanding of them, ought not to be excluded. And so it was held in several of the cases above cited. 2 G., M. & R. 422; 42 Maine, 204; 13 Pick. 261. Such declarations, if satisfactorily- established, would seem to be stronger and more conclusive evi- dence of the intention of the parties than proof of facts and circumstances, since they come more nearly to direct evidence than any to be obtained, whilst the other is but circumstantial. And though in general the construction of a written instrument is a matter of law for the court — the meaning to be collected from the instrument itself; yet, where the meaning is to be judged of by extrinsic evidence, the construction is usually a question for the jury. Jennings v. Sherwood, and other cases above. The circuit judge was therefore right in receiving parol evidence to ascertain the sense in which the word was used by the parties, and in submitting that question to the decision of the jury. But he was clearly wrong in receiving evidence of the state- ments of the plaintiff's agent to the witness Gunn, at the time of making the contract with him. The occasions were different — the two contracts entirely disconnected, and though both con- cerned a machine of the same pattern and manufacture, yet what was said in the one case was not a part of the transaction in the other. It was no part of the res gestae. If the agent Chase, in negotiating with Gunn, had made an admission of his represen- Chap. I. § 3.] BULE8 RELATING TO EVIDENCE. 507 tations to the plaintiff, evidence of such admission could not have been received. Mil. and Miss. B. R. Co. v. Finney, 10 Wis. 388. It would be going much too far, were we to hold that it was proper to give the jury the agent's statement to Gunn, as evidence tending to prove that a similar statement was made to the plaintiff. If it has any such tendency, it is so remote that the law cannot lay hold of and apply it. The question then comes up, must the judgment, for this reason, be reversed? The defendant's counsel insist not — that the evidence before the jury was sufficient without this, and if it had been rejected, the verdict must have been the same. We are inclined to take the same view. The defendant's testimony was clear and positive as to the kind of team — that the agent said "one span of horses" would work the machine up to the warranty. In this he was not contradicted, but rather cor- roborated by the agent, who was himself upon the stand. We would naturally expect, if the fact had been otherwise, the agent would have said so. On the other hand, he testifies very frankly that the defendant said he had but one team; that he told him one good team would work the machine. The admission of the improper evidence could not, therefore, have affected the finding of the jury upon this point ; and consequently the plaintiffs were not prejudiced by it. We can hardly believe that the argument of the plaintiff's counsel upon the construction of the warranty, that it referred to the capacity of the machine without regard to the kind of team employed, and was satisfied, if, under any circumstances, and with any number of horses, it could be made to perform as alleged, was urged with any real hope of success. Such a construction would be directly opposed to the manifest intention of the parties. The jury, upon proper evidence, and under proper instructions having found that the machine delivered at Milwaukee was not such as the contract called for, the judgment upon their verdict must be affirmed. Ordered accordingly. ^ ^ That parol evidence may be introduced to identify a person named in an instrument, see Andrews v. Dyer. 81 Me. 104. 508 INTERPRETATION OF CONTRACT. [Part IV. c. Usages of trade. SOUTIEE V. KELLEEMAN. 18 MISSOURI, 609.— 1853. Gamble, J. The plaintiff alleges that he bought of the defendant (Kellerman) 4000 shingles, and that he received eight bundles or packs, which only contained 2500, and having paid for 4000 brought this suit to recover the value of the number deficient. The defense made by Kellerman was, that by the custom of the lumber trade, two packs of a certain size are regarded as a thousand shingles, and are always bought and sold as such, without any count of the number, and that the eight packs delivered to Soutier were, according to such custom, properly reckoned as four thousand shingles. 1. The defendant asked the court below to declare the law in relation to the effect of the usage of the trade, and for that pur- pose presented two rustructions, which the court refused. As this was a case brought into the court by appeal from a justice of the peace, the code of practice, which is not applicable to pro- ceedings before a justice, is not applicable to the trial before the law commissioner on appeal. Such case is to be tried on the merits de novo, and the practice formerly prevailing, in trials by the court without a jury, of asking declarations of the law is, in such cases, still to be pursued. 2. The defendant asked the court to declare the law as fol- lows : (1) That if the shingles sold to the plaintiff were in ordi- nary sized packs, and that the price paid was a reasonable price for such kinds of packs, and that such packs are, by common custom, sold two for a thousand, then the plaintiff is not entitled to recover. (2) If the common custom of the lumber trade is to sell two bunches of shingles as a thousand, without regard to actual count, then the plaintiff must be presumed to have had notice of such general custom, and to have purchased accordingly. The court refused to make these declarations of the law, and, on the contrary, declared : " That if the contract was at so much per thousand, and not so much per bundle, and that no express agree- ment was entered into that two bundles should represent a thou- Chap. I. § 3.] RULES RELATING TO EVIDENCE. 509 sand, then the defendant must deliver the four thousand, or else account to the plaintiff for their value." The usage of a particular trade is evidence from which the intention and agreement of the parties may be implied; and, although it cannot control an express contract, made in such terms as to be entirely inconsistent with it, yet, in express con- tracts, the terms employed may have their true meaning and force best understood by reference to such usage. Evidence of such usage is admitted, not to vary the terms of an express contract or to changie its obligation, but to determine the meaning and obligation of the contract as made. The usage must appear to be so general and well established, that knowledge of it may be presumed to exist among those dealing in the business to which it applies, so that the contract of the parties may be taken to have been made with reference to it. In this country, many articles which are in terms sold by the bushel (a dry measure, containing eight gallons) are, in fact, sold by weight; the bushel being understood to mean a certain number of pounds, and the number of pounds differing in different articles, as salt, wheat, etc. When such custom becomes general and well established, so as to be known to the community, it is obvious that a contract for a given number of bushels must mean the bushel as ascer- tained by weight, whether in fact the number of pounds of the article sold would measure more or less than the real bushel. The rule here stated is laid down with great distinctness, in 3 Starkie's Ev. 1033, and applied in Smith v. Wilson (3 Barn. & Adolph. 728) to a case where 1000 rabbits was held to mean 1200. In the present case, there was evidence that a general custom prevailed in the lumber trade of estimating two packs of shingles, of certain dimensions, as a thousand shingles, without reference to the number of pieces in the pack. If such was the usage of the trade, so general and well established that those buying and selling might be presumed to deal in reference to it, there does not appear to have been any such contract shown in this case as would prevent the usage from applying. The law commissioner seems to have thought that the defendant could not escape from , liability " if the contract was at so much per thousand " unless there was " an express agreement that two bundles should repre- 510 INTERPRETATION OF CONTRACT. [Pabt IV. sent a thousand." This was an incorrect statement of the law, in a case where evidence was given of a general usage, that a thousand shingles meant two packs of certain dimensions. Whether there was as full evidence of the usage given as ought to have been given, is not a question upon which we pass, but there was evidence of the usage upon which the party was entitled to have the law differently declared, if the evidence proved the usage as general, well established, and known, so that contracts might be presumed to be made with reference to it. It was not necessary that the defendant should show an express agreement that two bundles should represent a thousand. The judgment is reversed, with the concurrence of the other judges, and the cause remanded.* * Cf. Sweeney v. Thomason, 9 Lea (Tenn.), 359. See also Walls y. Bailey, 49 N. Y. 464 ; Bubble v. Cole, 86 Va. 87. Chap. U. § 1.] RULES RELATING TO CONSTRUCTION. 611 CHAPTER II. RULES RELATING TO CONSTRUCTION. § 1. Oeneral rules. REED V. INSUEANCE CO. 95 UNITED STATES, 23.— 1877. Appeal from a decree of the Circuit Court of the United States for the District of Maryland, affirming a decree of the District Court dismissing a libel. Mr. Justice Bradley. This is a cause of contract, civil and maritime, commenced by a libel in personam by Samuel G. Eeed, the appellant, against the Merchants' Mutual Insurance Company of Baltimore, the appellee, to recover $6000, the amount insured by the latter on the ship Minnehaha, belonging to the libellant. The policy was dated the fourteenth day of January, 1868, and insured said ship in the amount named, lost or not lost, at and from Honolulu, via Baker's Island, to a port of discharge in the United States not east of Boston, with liberty to use Hampton Roads for orders, " the risk to be suspended while ves- sel is at Baker's Island loading." The ship was lost at Baker's Island, where she had gone for the purpose of loading, on the ■third day of December, 1868. The defense was that the loss occurred whilst the risk was suspended under the clause above quoted; also laches by reason of the delay in commencing suit, - being more than four years after the cause of action accrued. This case, upon the merits, depends solely upon the construc- tion to be given to the clause in the policy before referred to, namely, "the risk to be suspended while vessel is at Baker's Island loading;" and turns upon the point whether the clause means, while the vessel is at Baker's Island for the purpose of loading, or while it is at said island actually lodding. If it 512 INTERPRETATION OF CONTRACT. [Pabt IV. means the former, the company is not liable ; if the latter, it is liable. A strictly literal construction would favor the latter meaning. But a rigid adherence to the letter often leads to erroneous results, and misinterprets the meaning of the parties. That such was not the sense in which lihe parties in this case used the words in question is manifest, we think, from all the circumstances of the case. Although a written agreement cannot be varied (by addition or subtraction) by proof of the circumstances out of which it grew and which surrounded its adoption, yet sucli cir- cumstances are constantly resorted to for the purpose of ascertain- ing the subject matter and the standpoint of the parties in relation thereto. Without some knowledge derived from such evidence, it would be impossible to comprehend the meaning of an instrument, or the effect to be given to the words of which it is composed. This preliminary knowledge is as indispensable as that of the language in which the instrument is written. A reference to the actual condition of things at the time, as they appeared to the parties themselves, is often necessary to prevent the court, in construing their language, from falling into mis- takes and even absurdities. On this subject Professor Green- leaf says : " The writing, it is true, may be read by the light of surrounding cir- cumstances, in order more perfectly to understand the intent and meaning of the parties; but, as they have constituted the writing, to be the only outward and visible expression of their meaning, no other words are to be added to it, or substituted in its stead. The duty of the courts in such cases is to ascertain, not what the parties may have secretly intended, as contradistinguished from what their words express, but what is the meaning of the words they have used." 1 Greenl. Ev., sec. 277. Mr. Taylor uses language of similar purport. He says : " Whatever be the nature of the document under review, the object is to discover the intention of the writer as evidenced by the words he has used ; and, in order to do this, the judge must put himself in the writer's place, and then see how the terms of the instrument affect the property or subject matter. With this view, extrinsic evidence must be admissible of all the circumstances surrounding the author of the instrument." Taulor, Ev., sec. 1082. Chap. II. § 1.] RULES RELATING TO CONSTRUCTION. 513 Again he says : "It may, and indeed it often does, happen, that, in consequence of the surrounding circumstances being proved in evidence, the courts give to the instrument, thus relatively considered, an interpretation very differ- ent from what it would have received had it been considered in the abstract. But this is only just and proper ; since the effect of the evi- dence is not to vary the language employed, but merely to explain the sense in which the writer understood it." Id., sec. 1085. See Thorington v. Smith, 8 Wall. 1, and remarks of Mr. Justice Strong in Maryland v. Railroad Company, 22 Id. 105. The principles announced in these quotations, with the limita- tions and cautions with which they are accompanied, seem to us indisputable ; and availing ourselves of the light of the surround- ing circumstances in this case, as they appeared, or must be supposed to have appeared, to the parties at the time of making the contract, we cannot doubt that the meaning of the words which are presented for our consideration is that the risk was to be suspended while the vessel was at Baker's Island for the pur- pose of loading, whether actually engaged in the process of loading or not. Taking this clause in a,bsolute literality, the risk would only be suspended when loading was actually going on. It would revive at any time after the loading was commenced, if it had to be discontinued by stress of weather, or any other cause. It would even revive at night, when the men were not at work. This could not have been the intent of the parties. It could not have been what they meant by the words "while vessel is at Baker's Island loading." It was the place,, its exposure, its unfavorable moorage, which the insurance companies had to fear, and the risk of which they desired to avoid. The whole reason of the thing and the object in view point to the intent of protect- ing themselves whilst the vessel was in that exposed place for the purpose referred to, not merely to protect themselves whilst loading was actually going on. Her visit to the island was only for the purpose of loading; as between the contracting parties, she had no right to be there for any other purpose; and, suppos- ing that they intended that the risk should be suspended whilst she was there for that purpose, it would not be an unnatural form of expression to say, " the risk to be suspended while vessel 614 INTERPEETATION OF CONTKACT. [Part IV. is at Baker's Island loading." And we think that no violence is done to the language used, to give it the sense which all the cir- cumstances of the case indicate that it must have had in the minds of the parties. If we are right in this construction of the contract, there can be no uncertainty as to its effect upon the liability of the under- writers. The loss clearly accrued at a time when, by the terms of the policy, the risk was suspended. The ship sailed in ballast from Honolulu on or about the 7th of November, 1867, and arrived at Baker's Island on the afternoon of the twentieth day of November, 1867. She came to her mooring in safety, and her sails were furled, shortly after which a heavy gale and heavy surf arose. The gale and surf continued with violence until the 3d of December, 1867, when the ship parted her moorings, and was totally wrecked and lost. At no time after her arrival at Baker's Island was it possible to discharge ballast to receive car^o or to commence the progress of loading. The violence of the winds, current, and waves, and their adverse course and direction, prevented the ship from slipping her cables and getting to sea, or otherwise escaping the perils that surrounded her. These facts are indisputable; and they show that, when the loss occurred, the vessel was at Baker's Island for the purpose of loading. That the process of loading had not actually com- menced is of no consequence. The suspension of the risk com- menced as soon as the vessel arrived at the island and was safely moored in her proper station for loading. The appellee, as a further defense, set up laches in bringing suit. The libel was not filed until more than four years had elapsed after the cause of action had accrued. The statute of limitations of Maryland requires actions of account, assumpsit, on the case, etc., to be brought within three years; and the counsel for the appellee insists that by analogy to this statute the admiralty court, having concurrent jurisdiction with the state courts in this case, should apply the same rule. We had occasion, in the case of Tlie Key City (14 Wall. 653), to explain the principles by which courts of admiralty are governed when laches in bringing suit is urged as an exception in cases cognizable therein. In view of the construction which we have given to the Chap. II. § 2.] EULES RELATING TO CONSTRUCTION. 515 contract in this case, it is not necessary to pass upon the precise question now raised by the appellee. It is also unnecessary to examine other questions which were mooted on the argument. Decree aflB.rmed.* § 2. Rules of la-w and equity as to time and penalties. THUESTON V. AENOLD. 43 IOWA, 43. — 1876. Action in equity to compel specific performance. • Judgment for defendant. Plaintiff appeals. Defendant agreed to convey his farm to plaintiff in consider- ation that the plaintiff would pay $1200 on or before September 2, 1872, and $300 on taking possession, and convey or cause to be conveyed to defendant certain lands in Missouri. EoTHROOK, J. 1. We have carefully read and considered the evidence in the case. It is voluminous, and the review of it here would serve no useful purpose. We believe that the referee's findings of fact are fully sustained by the evidence. It is perhaps proper to say that the written contract by its terms did not make time as of its essence, but provided generally that the $1200 was to be paid on the second day of September, 1872. The plaintiff endeavored to show that there was a subsequent parol extension of time. The referee, as we think, properly found that there was no such extension, but that defendant insisted on a compli' ance at the time fixed, and that his situation with reference to other important business interests required that the payments should be promptly made. It further appears that the contract on plaintiff's part was a mere speculation; that he did not have title to the Missouri land, and did not have any means to pay the $1200, and relied on a re-sale of defendant's farm at an advance to pay for the Missouri land, and that he did not suc- ceed in making a re-sale by the time fixed for performance, but 1 See also Davison v. Von Lingen, 113 V. S. 40, ante, p. 265 ; Norrington V. Wright, 115 U. S. 188, post, p. 584 ; Moore v. Ins. Co., 62 N. H. 240, post, p. 531. 616 INTERPRETATION OF CONTRACT. [Part IV. afterwards, by taking a partner in the speculation, raised the money and procured a deed, and tendered performance on the 17th day of September, 1872; which: tender the defendant refused. These are the important features of the case. There are many other facts which we do not deem it necessary to refer to. Among the findings of the referee is the following : " I further find from the testimony in the cause, independent of what appears on the face of the written contract between Thurston and Arnold, that the time therein fixed for payment of the consideration by Thurston to Arnold was understood and intended by the parties to be 'of the essence of th(5 contract.' I am of opinion that, as a matter of law, evi- dence extrinsic to the written contract is competent to prove such inten- tion and understanding." Counsel for plaintiff insist that extrinsic evidence is not com- petent for such purpose, for the reason that it varies and modi- fies the terms of the written contract. The contract provides for the payment to be made on a day certain, and extrinsic evidence, consisting of the acts, statements, and the verbal negotiations of the parties, showing that the time was intended to be essential, does not contradict or vary the writing, but rather confirms it, by showing that it means just what its terms provide. 1 Gfreenleaf Ev., § 296; 3 Id., § 366, and cases there cited. Time may be made the essence of the contract by the express stipulation of the parties, or it may arise by implication from the very nature of the property, or the avowed objects of the seller or purchaser. Taylor v. Longworth, 14 Pet. 172, and see also Toung v. Daniels, 2 Iowa, 126. Equity will not ordinarily regard time as of essence of the contract in a sale of real estate. At law such contracts are treated as other contracts, and in order to maintain an action the plaintiff must show performance or readiness to perform at the time fixed, unless performance be waived by the other party. Equity presumes that the time named in the contract was not intended as essential by parties. This, however, is such a pre- sumption as may be rebutted by parol evidence. 2. An application to enforce the specific performance of a contract is always addressed to the sound discretion of the chan- Chap. II. § 2.] RULES RELATING TO CONSTRUCTION. SIT cellor, guided and governed' by the general rules and principles of equity jurisprudence. In such cases relief is not a matter of right in either party, but it is granted or withheld according to the circumstances of each case when such rules or principles will not furnish any exact measure of justice between the parties. If, in the judgment of a court of equity, good faith and justice between the parties will be attained by enforcing the contract, the failure to perform, or of a readiness to perform, at the pre; cise time fixed, will not prevent its enforcement. In this case, we are satisfied, equity will be better subserved by denying spe- cific performance than by granting it; and these considerations are independent of any question as to the right of defendant to show by parol evidence that time was intended to be the essence of the contract. The evidence satisfies us that it would be grossly inequitable to compel defendant, Arnold, to now perform, or to make com- pensation for inability to do so, finding, as we do, from the evi- dence, that on the day fixed he was ready and willing to perform, and was prevented from doing so by plaintiff's default. . Affirmed.^ STEEEPEE, V. WILLIAMS, 48 PENNSYLVANIA STATE, 450. — 1865. Assumpsit to recover damages for the non-performance of a contract to purchase plaintiff's hotel. 1 "It is a general principle governing the construction of contracts that stipulations, as to the time of their performance, are not necessarily of their essence unless it clearly appears in the given case from the expressed stipu- lations of the contract, or the nature of its subject matter, that the parties intended performance within the time fixed in the contract to be a condition precedent to its enforcement, and where the intention of the parties does not so appear, performance shortly after the time limited on the part of either party will not justify a refusal to perform by the party aggrieved ; but his only remedy will be an action or counter-claim for the damages he has sus- tained from the breach of the stipulations. In the application of this princi- ple to the cases as they have arisen, in the promulgation of the rules naturally deduced from it, and in the assignment of the various cases to the respective classes in which the stipulation as to the time of performance is, or is not, deemed of the essence of the contract, the controlling consideration has been, 618 INTEBPBETATION OF CONTRACT. [Part IV. The court allowed the jury to find the actual damage, which they fixed at $50, reserving the question whether judgment should be entered for that amount or for the amount of $500 fixed as a " forfeit " in the contract. Subsequently the court en- tered judgment for $500, the amount fixed in the contract. De- fendant appeals. Agnew, J. This case is very defectively stated. We find, in our paper-book, no copy of the bill of exceptions, and no state- ment of facts. We understand, from the argument, that it was a case of total failure on the part of the defendant, and we infer, from the verdict against the defendant, that the plaintiff must have tendered performance on his part. Upon these facts and the terms of the agreement we must determine whether the stipulated sum is a penalty, or liquidated damages. Upon no question have courts doubted and differed more. It is unnecessary to examine the numerous authorities in detail, for they are neither uniform nor consistent. No definite rule to determine the question is furnished by them, each being determined more in direct reference to its own facts than to any general rule. In the earlier cases, the courts gave more weight to the language of the clause designating the sum as a penalty or as liquidated damages. The modern authorities attach greater and ought to be, so to decide and classify the cases that unjust penalties may not be inflicted or unreasonable damages recovered. . . . The cases just referred to illustrate two well-settled rules of law which have been deduced from this general principle, and in accordance with which this case must be determined. They are : In contracts of merchants for the sale and delivery, or for the manufacture and sale, of marketable commodities a statement descriptive of the subject matter or some material incident, such as the time of shipment, is a condition precedent, upon the failure or non-performance of which the party aggrieved may repudiate the whole contract. Norrington V. Wright, 116 U. S. 188, 203 {post, p. 584] ; Cleveland Moiling Mill v. Bhodes, 121 U. S. 255, 261. But in contracts for work or skill and the materials upon which it is to be bestowed, a statement fixing the time of performance of the contract is not ordinarily of its essence, and a failure to perform within the time stipulated followed by substantial performance after a short delay will not justify the aggrieved party in repudiating the entire contract, but will simply give him his action for damages for the breach of the stipulation. Tayloe v. Sandiford, 7 Wheat. 13, 17 ; Hambly v. Dela- ware, M. A Y. B. Co., 21 Fed. Rep. 541, 544, 554, 557." — Sanborn, J., in Beek &c. Co. v. Colorado &c. Co., 10 U. S. App. 465. See also O^Donnell V. Leeman, 43 Me. 158, ante, p. 100. Chap. II. § 2.] RULES RELATING TO CONSTRUCTION. 519 importance to the meaning and intention of the parties. Yet the intention is not all-controlling, for in some cases the subject matter and surroundings of the contract will control' the inten- tion where equity absolutely demands it. A sum expressly stipulated as liquidated damages will be relieved from, if it is obviously to secure payment of another sum capable of being compensated by interest. On the other hand, a sum denominated a penalty, or forfeiture, will be considered liquidated damages where it is fixed upon by the parties as the measure of the dam- ages, because the nature of the case, the" uncertainty of the proof, or the difficulties of reaching the damages by proof, have induced them to make the damages a subject of previous adjustment. In some cases the magnitude of the sum, and its proportion to the probable consequence of a breach, will cause it to be looked upon as minatory only. Upon the whole, the only general observation we can make is that in each case we must look at the language of the contract, the intention of the parties as gathered from all its provisions, the subject of the contract and its surroundings, the ease or difficulty of measuring the breach in damages, and the sum stipulated, and from the whole gather the view which good conscience and equity ought to take of the case. Equity lies at the foundation of relief in the case of forfeiture and penalties, and hence the difBculty of reaching any general rule to govern all cases. The research of counsel has furnished us with many authorities, but I refer to the fol- lowing only as containing these general views : Chase v. Allen, 13 Gray, 42; Sainter v. Ferguson, 7 C. B. 716; Chamberlain v. Bagley, 11 N. H. 234; Gammon v. Hoioe, 2 Shep. 250; Mead V. Wheeler, 13 N. H. 351; Main v. Kiy^g, 10 Barb. S. C. 59; Niver v. Bossman, 18 Barb. 50; Lampman v. Cochran, 19 Id. 388; Cothealy. Talmage, 5 Seld. 551; Duffy y. Shockey, 11 Ind. 70 ; Jaquith v. Hudson, 5 Mich. 123. The agreement in this case is a contract for the sale of a hotel. The plaintiff agreed to make a clear title to defendant on the first day of April following its date, which was in February, and to give immediate possession of the bar-room and fixtures. The defendant was to pay $3000 on the signing of the deed on the 1st of April, and agreed that plaintiff should retain possession 620 INTERPRETATION OF CONTRACT. [Paet IV. of a certain part of the property four weeks. The price was to be $14,000, but no time was fixed for the payment of any part except the $3000. Then came the clause in question: "The parties to the above agreement doth severally agree to forfeit the sum of $500 — say five hundred dollars, in case either party fail to comply with the terms of this agreement." The first feature striking our attention is the great disproportion between this sum and the purchase money, or even the portion to be paid on the 1st of April, when the deed was to be made. Clearly, it was not intended to' enforce payment of the purchase money, or its first instalment only. Nor could it be intended to protect the defendant against a failure to make the title after payment of the first instalment. This leads obviously to the conclusion that the only intention of stipulating this sum was to protect against a total failure where the contract was abandoned. If either party failed, the other might abandon and demand the sum stipulated for this contingency. Were the sum adequate in mag- nitude to compel specific performance, we might conclude it was intended as a penalty only, against which equity would relieve on a full compliance with the contract. But its manifest inade- quacy, as compared with the value or the price of the property, leaves no other reasonable conclusion than that it was intended as a compensation to either party, when the other wholly aban- doned the contract. In this view, the parties must have intended the sum as liquidated damages, and not as a penalty. But this intention might not alone determine the equity, and therefore we also look at the state of the case as it probably might be in case of abandonment ; for, if the damages are definite in their nature, and easily to be ascertained, it might be uncon- scionable to award the whole sum as damages. This leads to a consideration of the subject matter, and the terms of the con- tract. The property is a hotel — the plaintiff describes himself to be a hotel-keeper, and he contracts to deliver immediate pos- session of a part. Now, this involves the breaking up of his busi- ness, the purchase or lease of a new. residence, and the disposal of furniture needed for a hotel, but probably not for a private family. Belying on the performance of the defendant, the plain- tiff may make many journeys in search of a new home, encounter Chap. U. § 2.] RULES RELATING TO CONSTRUCTION. 521 difficulties in suiting himself, involve himself in new purchases, raise large sums of money, and in many ways incur heavy losses and expenses, and yet he may be unable, or find it very difficult, to prove their extent. So the defendant might contract for the sale of his own property, purchase furniture and liquors, con- tract for loans of money to perform his contract, and incur lia- bilities, all causing him losses very difficult to be ascertained. Now every one knows how difficult it is to reach and estimate the real losses men suffer from disappointment in their plans, and many of the subjects of loss cannot be put in evidence. An accurate account can scarcely be stated in dollars and cents, and yet but few, if asked to name a sum for a total abandonment of such a contract, would be willing to take the risk much lower than at the sum stipulated here. From all these circumstances, added to the intention deduced from the contract, we conclude that the parties fixed the sum stipulated, as the measure of the damages either would probably suffer from a total failure, and the^ compensation to be made therefor. The word " forfeit, " according to many of the author- ities, is therefore outweighed by the other elements of interpre- tation, and we must construe it as meaning "to pay." But we are told that the jury assessed the damages at $50 — one-tenth of the stipulated sum. This is true, but it does not follow they had no difficulty in doing so, or that the very diffi- culty of proving and making the proof was not the cause of so small a verdict. It establishes only that, as a jury must find upon the evidence, the proof was not sufficient to enable them to give more. But it does not detract from the nature of the case, or explain away the intention gathered from the contract. The judgment is affirmed.* 1 See also Cotheal v. Talmage, 9 N. Y. 551 ; Lansing v. Dodd, 45 N. J. L. 525 ; Diamond Match Co. v. Soeber, 106 N. Y. 473, ante, p. 362. Paet Y. DISCHAEGE OF CONTRACT. CHAPTER I. DISCHARGE OF CONTRACT BY AGREEMENT. § 1. Waiver. COLLYEE & CO. v. MOULTON et al. 9 RHODE ISLAND, 90. — 1868. Assumpsit. Plea, the general issue. Potter, J. The plaintiffs made a verbal contract /with the defendants, then partners, to build a machine. The work was charged as fast as done, and the materials when furnished. After a small part of the work had been done, the firm was dissolved; and the defendant Moulton, the same day, gave notice of it to the plaintiffs, and told them he could be no longer responsible for the machine. The defendant Moulton claims that the plaintiffs released him and agreed to look to the other partner for pay- ment; but this the plaintiffs deny. The plaintiffs went on and completed the machine, and then sued Bromley alone for his claim, but discontinued the suit, and now sue both the former partners, the writ having been served on Moulton only. Where two parties contract, one to do a particular piece of work and the other to pay for it, the latter may, at any time, countermand the completion of it, and in such case the former cannot go on and complete the work and claim the whole price, but will be entitled only to pay ior his part performance, and to be compensated for his loss on the remainder of the contract. 522 Chap. I. § 1;] BY AGREEMENT. 523 Clark Y. Marsiglia, 1 Denio, 317; Durkee v. Mott, 8 Barb. S. C. 423; Hosmer v. Wilson, 7 Michigan, 294. In the present case, the two defendants, although the partner- ship was dissolved, still remaiii joint contractors so far as the plaintiff was concerned; and we think that either of them had a right to countermand the order before completion, and then the joint contractors would have remained liable as before stated. But the defendant Moulton claims that he was verbally released .by the plaintiffs and that the plaintiffs agreed to look to the other defendant, Bromley, alone for their pay. There is some apparent inconsistency in the language used in the reports and text writers, as to the manner in which a simple contract may be annulled. We think the rule is that so long and so far as the contract remains executory and before breach, it may be annulled by agreement of all parties ; but that when it has been broken and a right of action has accrued, the debt or damages can only be released for a consideration; and even 30 far as it remains executory, it may be said that the agreement to annul on one side may be taken as the consideration for the agreement to annul on the other side. Dane, 5, 112; Johnson v. Beed, 9 Mass. 84; Cummings v. Arnold, 3 Met. 486-9; Richard- son V. Hooper, 13 Pick. 446; Bloody. Enos, 12 Vermont, 625. So far, therefore, as the contract in the present case remained unfinished on the 10th of February, 1865, when the notice was given and the alleged waiver was made, we may consider, either that the contract was annulled or waived by consent, in which case (the machine, so far as completed, being tendered or deliv- ered) the plaintiff could claim only for work and materials to that date without further damages, — or that the work was coun- termanded by the defendant Moulton, without the assent of the plaintiffs, in which ease the defendant would be liable for the part performed and for the loss on the part unperformed. We consider the present case to fall under the first head, the notice to, and declarations and conduct of the plaintiffs amount- ing to a waiver of the fulfilment of the contract as first made, that is, to a release of the defendant Moulton for the part still unperformed. But the blaim for payment "for the part performed stands, as 524 DISCHARGE OF CONTRACT. [Pabt V. we have seen, on a different ground. Was there any agreement to release Moulton from liability for this, i. e. the part performed ; and if so, was there any agreement to take the other partner's individual promise in lieu of the promise of the firm, or any- thing which would amount to a consideration for the release of the firm? If, by a mutual arrangement between the plaintiff CoUyer and the two defendants, Moulton had been released from his liability for the work already done, and a new promise made by Bromley, • the other defendant, to pay for it, this would have been a valid release for a valuable consideration — one debt would have been substituted for the other. Thompson v. Percival, 5 B. & A. 925. But we cannot find sufficient evidence of any promise on the part of the other partner, Bromley, to assume the liability; and if there was none, then the release of liability for the work already done was without consideration, as it is not claimed that there was any other consideration. We cannot find, however, any count in the declaration upon which, upon this view of the case, we can allow for anything except labor done before February 10th, the day of the giving of the notice. Judgment for plaintiffs for amount so found due.* § 2. Substituted contract. McCEEEEY et al. v. DAY et al. 119 NEW YORK, 1. — 1890. Action to recover certain sums alleged to be due under a con- tract between plaintiffs, of the first part, and C. H. Andrews, of the second part, and C. K. Garrison, defendants' testator, of the third part. Judgment for defendants on the pleadings. AfB.rmed at General Term. Plaintiffs appeal. The complaint set out a sealed contract, dated March 2, 1882, by which plaintiffs sold to Garrison a fourth interest in a con- tract for the construction of a railroad from P. to A., through !N"., and agreed to turn over to Garrison a fourth of all cash, bonds, and stocks which should be received from the railroad 1 See also Alden v. Thurber, 149 Mass. 271, post, p. 630. Chap. I. § 2.] BY AGREEMENT. 525 company as payment for the work. Garrison agreed to pay plaintiffs for the work already done, and materials furnished and rights acquired up to the date of the contract, the sum of $150,000, and pay them from time to time thereafter one-fourth of the amounts expended by them in the further construction of the road under the contract. The action is for the amounts so expended up to the annulment of the contract and for in- terest during the time Garrison delayed payment of the sum of $150,000. The answer set up that on April 13, 1882, the plaintiffs and C. H. Andrews sold to the P. & W. Ey. a fourth interest in that portion of the road constructed between IST. & A., for $160,000, the purchaser agreeing to pay for all work done up to that date. On November 6, 1882, defendants' testator wrote to plaintiffs and Andrews saying he would sign the papers relative to the comple- tion of the road by the P. & W. Ey., but only on condition "that I am not to pay any more money than Mr. Humphrey's Company (the P. & W. Ey.) pays, as provided in the agreement you made with him April thirteenth — that is, $150,000 and one- fourth of the cost of the road to Newcastle Junction after that date." He also stated that he no longer desired any interest in the road from N. to P., and had given up the contract of March 2d. Afterwards, and in compliance with the terms of that letter, the plaintiffs, with the said C. H. Andrews and the defendants' testator, caused an unsealed agreement, signed by all the parties, to be indorsed on the sealed contract of March 2, 1882, as follows : " It is agreed by the parties hereto that the within contract is annulled and of no further effect, the same having been superseded by the agree- ment and arrangement made in lieu thereof, as embodied in the letter of C. K. Garrison . . . dated November 6, 1882, and by a certain agreement made between C. H. Andrews, W. C. Andrews, W. McCreery, James Gallery, Solomon Humphrey, and C. K. Garrison, all bearing date October 25, 1882." The agreement last referred to was fully carried out by all the parties. An order was made requiring plaintiffs to reply, which they did, substantially admitting the foregoing averments of the answer. Andrews, J. The parties by their agreement indorsed on the 626 DISCHARGE OF CONTRACT. [Part V. contract of Msircli 2, 1882, in terms annulled that contract and declared that it should be of no further effect. The claim that the annulment of the contract did not discharge Garrison's obligation under the original contract to pay his proportion of expenditures made by the plaintiffs for the construction of the Pittsburgh, Youngstown, and Chicago Railroad, between the date of the contract and its annulment, depends on the intention to be deduced from the agreement of annulment, construed in light of the attending circumstances. Where a contract is rescinded while in the course of performance, any claim in respect of per- formance, or of what has been paid or received thereon, will ordinarily "be referred to the agreement of rescission, and in general no such claim can be made unless expressly or impliedly reserved upon the rescission." Leake on Contracts, 788, and cases cited. The agreement annulling the original contract recites that the contract had been " superseded by agreements and arrangements made in lieu thereof, " embodied in Garrison's letter of November 6, 1882, and the several contracts executed by the parties to that contract, and others, bearing date October 25, 1882. In ascer- taining the scope of the agreement annulling the original contract, the letter and the contracts of October 26, 1882, are to be deemed incorporated into the agreement. Construing these several writings together, they plainly show that the parties intended that Garrison should be discharged from all liability under his contract of March 2, 1882, for any expenditures there- tofore made, or thereafter to be made in constructing the line between Pittsburgh and Newcastle Junction. The letter was written after Garrison had received the contracts dated October 25, 1882, for execution, and declares that he will sign them on the condition and understanding that he is not to pay anything more than Mr. Humphrey's company pays, under the plaintiffs' agreement with him of April 13, 1882, "that is, $150,000, and one-fourth of the cost of the road to Newcastle Junction, after that date." The agreement with Mr. Humphrey, of April 13, 1882, provided for the construction of the part of the line of the Pittsburgh, Youngstown and Chicago Eailroad between New- castle Junction and Akron, by a new corporation to be formed, Chap. I. § 2.] . BY AGREEMENT. 627 and that Humphrey should pay the plaintiffs $150,000 for expenditures incurred and rights acquired on that branch of the road, prior to the making of the contract, and also one-fourth of all expenditures thereafter made in its completion. The letter goes on to state that the agreement with Mr. Humphrey was made " after consulting with me, and, as it insured my road (Wheeling and Lake Erie Eailroad) a line to Pittsburgh, I was ready to assent to it in place of the agreement of the second of March, and you know I hare so considered it since, and that I was owner of one-fourth of the new company, all previous agreements between us being superseded. I do not want any interest in the road from Newcastle Junction to Pittsburgh. I will pay what- ever Mr. Humphrey's company has paid on the agreement of the 13th April." The clear import of the proposition of Mr. Garrison in his letter is, that he would sign the contracts of October 25, 1882, provided he should be placed in the same position in respect to the enter- prise as that occupied by the company represented by Mr. Humphrey, and be relieved from all interest in, or obligation to contribute to the construction of the part of the Pittsburgh, Youngstown and Chicago Eailroad between Pittsburgh and New- castle Junction. Garrison, thereafter, executed the contracts of October 25, 1882, relating to the construction of the road between Newcastle Junction and Akron, whereby he assumed other and different obligations from those he had assumed by his contract with the plaintiffs of March 2, 1882. The main claim in the action is to recover from Garrison's estate, under the contract of March 2, 1882, for a share of expenditures made by the plaintiffs in the construction of the part of the Pittsburgh, Youngstown and Chicago Eailroad between Pittsburgh and Newcastle Junction, after the date of that con- tract, and before the execution of the annulment agreement. The agreement annulling the prior contract is supported by an adequate consideration. The new obligation which Garrison assumed under the contracts of October 25, 1882, was alone a sufficient consideration. City of Memphis v. Brown, 20 Wall. 289. There was a consideration also in the mutual agreement of the parties to the prior contract (which was still executory, 528 DISCHARGE OF CONTRACT. [Paet V. although in the course of performance) to discharge each other from reciprocal obligations thereunder and to substitute a new and different agreement in place thereof. The contract of March 2, 1882, is sealed, while the agreement annulling it is unsealed. Upon this fact the plaintiffs make a point, founded on the doctrine of the common law, that a con- tract under seal cannot be dissolved by a new parol executory- agreement, although supported by a good and valuable considera- tion, " for every contract or agreement ought to be dissolved by matter of as high a nature as the first deed." Countess of Rut- land's Case, Coke, Pt. V., 25 b. The application of this rule often produced great inconvenience and injustice, and the rule itself has been overlaid with distinctions invented by the judges of the common law courts to escape or mitigate its rigor in par- ticular cases. But in equity the form of the new agreement is not regarded, and under the recent blending of the jurisdiction of law and equity and the right given by the modern rules of procedure in this country and in England to interpose equitable defenses in legal actions, the common law rule has lost much of its former importance. A recent English writer, referring to the effect of the common law Procedure Acts in England, says : " The ancient technical rule of the common law, that a contract under seal cannot be varied or discharged by a parol agreement, is thus practically superseded." Leake on Contracts, 802. Courts of equity often interfered by injunction to restrain proceedings at law to enforce judgments, covenants, or obligations equitably discharged by transactions of which courts of law had no cogni- zance. 2 Sto. Eq., § 1573. It is a necessary consequence of our changed system of procedure, that whatever formerly would have constituted a good ground in equity for restraining the enforce- ment of a covenant, or decreeing its discharge, will now constitute a good equitable defense to an action on the covenant itself. It was one of the subtle distinctions of the common law as to the discharge of covenants by matter in pais, that although a specialty before breach could not be discharged by a parol agree- ment, although founded on a good consideration, nor even by an accord and satisfaction, yet after breach the damages, if unliqui- dated, could be discharged by an executed parol agreement, Chap. I. § 2.] BY AGREEMENT. 529 because, as was said, in the latter case the cause of action is founded " not merely on the deed, but on the deed and the sub- sequent wrong." Broom's Legal Maxims, 848, and cases cited. The absurd results to which the common law doctrine sometimes led is illustrated by the case of Spence v. Healey (8 Exeh. 668), in which it was held that a plea to an action on covenant for the payment of a sum certain, that before breach defendant satisfisd the covenant by the delivery to, and acceptance by the plaintiff, of goods, machinery, etc., in satisfaction, was bad, Martin, B., saying, " I am sorry I am compelled to agree in holding that the plea is bad. It is difficult to see the correctness of the reason upon which the rule is founded." I suppose there can be no doubt that the facts presented by the plea in the case of Spence V. Healey would have constituted a good ground for relief in equity. The technical distinction between a satisfaction before or after breach, seems to have been disregarded in this State, and a new agreement by parol, followed by actual performance of the substituted agreement, whether made and executed before or after breach, is treated as a good accord and satisfaction of the covenant. Fleming v. Gilbert, 3 John. 530; Lattimore v. Marsen, 14 Id. 330; Dearborn v. Cross, 7 Cow. 48; Allen v. Jaquish, Cowen, J., 21 Wend. 633. So, also, a new agreement, although without performance, if based on a good consideration, will be a satisfaction, if accepted as such. Kromer v. Heim, 75 JST. Y. 574, and cases cited. In the present case it may be justly said, that when the agreement annulling the contract of March 2, 1882, was exe- cuted, there had been no breach by Garrison of his covenant therein, as he had not been called upon by the plaintiffs to pay his share of the construction account. But it was the plain intention of the parties that the new arrangement, then entered into, should be a substitute for the liability of Garrison, present and prospective, under the contract of March 2, 1882. The transaction constituted a new agreement in satisfaction of the prior covenant, and was accepted as such. Moreover, it admitted by the reply that the contracts of October 25, 1882, were carried out. It is a case, therefore, of an executory parol contract, made in substitution of the prior sealed contract, afterwards 630 DISCHARGE OF CONTRACT. [Pakt V. fully executed, which clearly, under the authorities in this State, discharged the prior contract. In respect to the claim to recover interest during the time the payment of the $160,000 was delayed, it is a sufficient answer that the complaint admits that the principal sum was fully paid prior to September 13, 1882. The claim for interest did not survive, there being no special circumstances to take the case out of the general rule. Cutter v. Mayor &c., 92 N. Y. 166, and cases cited. We are of opinion that the facts admitted in the pleadings disclose that there was no right of action and that the complaint, for this reason, was properly dismissed. The judgment should therefore be affirmed. All concur. Judgment affirmed.' 1 "We shall not question the rule that a contract or covenant under seal cannot be modified by a parol unexecuted contract. Coe v. Hobby, 72 N. Y. 141 ; Smith v. Kerr, 33 Hun, 567-571 ; 108 N. Y. 31. . . . The reason of the rule was founded upon public policy. It was not regarded as safe or prudent to permit the contract of parties which had been carefully reduced to writing and executed under seal to be modified or changed by. the testi- mony of witnesses as to parol statements or agreements of parties. Hence the rule that testimony of parol agreements shall not be competent as evi- dence to impeach, vary, or modify written agreements or covenants under seal. But the parties may waive this rule and carry out and perform the agreements under seal as changed or modified by the parol agreement, thus executing both agreements ; and where this has been done, and the parties have settled with a full knowledge of the facts and in the absence of fraud, there is no power to revoke or remedy reserved to either party. Mimroe v. Perkins, 9 Pick. 298 ; Lattimore v. Harsen, 14 Johns. 329 ; McCreery v. Day, 28 N. Y. S. R. 597." — Haight, J., in McKenzie v. ifamson, 120 N. Y. 260, 263, 264. See also Canal Co. v. Bay, 101 U. S. 522. On substituted contracts, see also the cases under " Promise to perform existing Contract," ante, Ch. II., § 4, p. 177 et seq. Also Heaton v. Angier, 7 N. H. 397, ante, p. 442. Chap. I. § 3.] BY AGREEMENT. 531 § 3. Provisions for discharge. MOOEE V. PHOENIX INS. CO. 62 NEW HAMPSHIRE, 240. — 1882. Assumpsit on a policy of insurance. Defense, discharge of policy before loss accrued. Verdict for plaintiff. Defendants appeal. Smith, J. The defendants are liable only in accordance with the terms and stipulations expressed in their contract as the conditions of their liability. The contract is in writing, and is contained in the policy of insurance. In consideration of $8.50 paid by the plaintiff, the defendants covenanted to insure his property against loss or damage by fire for the term of three years, commencing. August 15, 1876. The policy contained this condition : " If the above-mentioned premises shall be occupied or used so as to increase the risk, or become vacant and unoccupied for a period of mors than ten days, or the risk be increased by any means whatever within the control of the assured, without the assent of this company indorsed hereon . . . then, and in every such case, this policy shaU be void." The premises remained unoccupied from August 24th until December 11, 1876, and on the 18th or 19th of that month were destroyed by fire. The contract was, not that the policy should be void in case of loss or damage by fire during the period of unoccupancy, but that vacancy and unoccupancy should terminate the policy. There is no occasion to inquire what distinction there may be between a vacant and an unoccupied building (Herr- man v. Merchants' Ins. Co., 81 N. Y. 184; Herrman v. Adriatic Ins. Co., 85 N. Y. 162; N. A. Fire Ins. Co. v. Zaenger, 63 111. 464; American Ins. Co. v. Padfield, 78 111. 167), for no point was made at the trial that the plaintiff's buildings were not both vacant and unoccupied from August 24 until December 11. Nor is it necessary to go into an inquiry of the reasons for exact- ing this condition. It is enough that the parties entered into the covenant. It was a condition that would afford protection of a substantial character against fraudulent incendiarism, of which insurers may well avail themselves. Hill v. Ins. Co., 68 N. H. 532 DISCHARGE OF CONTRACT. [Part V. 82 ; Sleeper v. Ins. Co., 56 N. H. 406. The insurers had a right, by the terms of the policy, to the care and supervision which are involved in the occupancy of the buildings. Ashworth v. Ins. Co., 112 Mass. 422. There was no waiver by the defendants of the condition, nor any assent to the changed conditions of the premises insured, for they had no notice or knowledge that the buildings were unoccu- pied until the plaintiff furnished his proofs of loss. A waiver, to be effectual, must be intentional. The premises were left unoccupied more than ten days; and if the non-occupati0!a had continued to the time Of the fire, the plaintiff could not recover. Fabyan v. Ins. Co., 33 N. H. 206; Shepherd v. Ins. Co., 38 N; H. 240; Sleepei- v. Ins. Co., 56 N.H.406; Hill v. Ins. Co., 58 N. H. 82; Baldwin v. Ins. Co., 60 N. H. 164; Lyman v. Ins. Co., 14 Allen, 329; Merriam v. Ins. Co., 21 Pick. 162; Herrman v. Ins. Co., 85 X. Y. 162; Harrison v. 7ns. Co., 9 Allen, 231; Wustum v. Ins. Co., 15 Wis. 138; Mead v. Ins. Co., 7 ^.¥.530; May Ins. (ed. 1873) § 248. It is contended by the plaintiff, upon the authority of State r. Richmond (26 N. H. 232), that the policy had not become abso- lutely void at the expiration of ten days from the time the house became unoccupied, but was voidable only at the election of the defendants. In the construction of contracts words are to be understood in their ordinary and popular sense, except in those cases in which the words used have accLuired by usage a peculiar sense different from the ordinary and popular one. In this case the word " void " has not acquired by usage a different significa- tion from the ordinary and popular one of a contract that has come to have no legal or binding force. Whether the cessation of the executory contract of insurance was temporary and con- ditional, or perpetual and absolute, is a question ; but " void " means that on the eleventh day of continuous non-occupation the plaintiff was not insured. The defendants might have waived their condition altogether, or might have waived its breach; but having had no opportunity before the loss to make their election to waive the breach, their refusal to pay, when notified of the loss and unoccupancy, was an effectual election that they insisted upon the condition in the policy. Chap. I. § 3.] BY AGREEMENT. 533 The duty of obtaining the consent of the defendants to the changed condition of the buildings rested with the plaintiff. By his neglect to comply with this requirement of the contract, it came to an end by force of its own terms. Girard Ins. Co. v. Hebard, 95 Pa. St. 45. If, when the unoccupancy commenced, he had requested the assant of the defendants, they would have had their option to continue the policy upon payment of such additional premium as the increased risk called for, or to cancel the policy, refunding the unearned premium. Lyman v. Ins. Co., 14 Allen, 329. There is no presumption that they would have given theia assent to the unoccupancy of the buildings without the payment of a premium commensurate with the additional hazard. The contract being once terminated, it could not be revived without the consent of both of the contracting parties. It is immaterial, then, whether the loss of the buildings is due to unoccupancy or to some other cause. Mead v. N. W. Ins. Co., 7 N. Y. 530, 535, 536; Lyman v. State M. F. Ins. Co., 14 Allen, 329, 335; Merriam v. Ins. Co., 21 Pick. 162; Jennings v. Ins. Co., 2 Denio, 81; Shepherd v. 7ns. Co., 38 IST. H. 232, 239, 240; Poor V. Ins. Co., 125 Mass. 274; Alexander v. Ins. Co., 66 N. Y. 464, 468; Sleeper v. Ins. Co., 56 N. H. 401; Hill v. Ins. Co., 58 N. H. 82. » « « » « [After discussing the cases cited above.] The strict and literal meaning of the stipulation that the policy shall be void if the premises remain unoccupied more than ten days is not that the insurance will be suspended merely during non-occupation after the ten d,ays, and will revive when occupation is resumed. In ordinary speech, a void policy is one that does not and will not insure the holder if the insurer seasonably asserts its invalidity. It might be argued that this clause should be so construed as to accomplish no more than the purpose for which it was inserted; that its sole purpose was to protect the in- surer against the risk resulting from non-occupation; and that if this risk was terminated by reoccupation, the parties in- tended the insurance should be suspended only during the existence of the cause of a risk which the company did not 634 DISCHARGE OF CONTRACT. [Past V. assume. On the other hand, it might be argued that such an intention would have been manifested by words specially and expressly providing for a suspension and resumption of the insurance, and would not have been left to be inferred from the general agreement that the policy should be void; that a final termination of the insurance at the end of ten days of non- occupation is plainly expressed by the provision that the policy shall then be void; and that the parties would not think it neces- sary to go further, and provide that the void policy should not become valid on reoccupation. Without determining the true construction, or what the result would be if there were no authority in this State, we are inclined to follow the decision in Fabyan v. Insurance Company (33 N. H. 203), although in that case the question of suspension seems not to have been presented by the plaintiff or considered by the court. It was apparently assumed that " void " meant finally extinguished, and not temporarily suspended; and in the present state of the authorities we are not prepared to hold that the assumption was erroneous. Verdict set aside.' Blodgett and Carpentek, JJ., did not sit; Stanley, J., dissented; and the others concurred. EAY V. THOMPSON. 12 CUSHING (Mass.), 281. — 1853. Assumpsit for the price of a horse sold to defendant. Defense, sale on condition that defendant might return the horse, and that he had returned it. Verdict for defendant. 1 " An increase of risk which Is substantial, and which is continued for a considerable period of time, is a direct and certain injury to the insurer, and changes the basis upon which the contract of insurance rests ; and since there is a provision that, in case of an increase of risk which is consented to or known by the assured, and not disclosed, and the assent of the insurer obtained, the policy shall be void, we do not feel at liberty to qualify the meaning of these words by holding that the policy is only suspended during the continuance of such increase of risk." — C. Allen, J., in Kyte v. Com. Un. Ins. Co., 149 Mass. 116, 123. Chap. I. § 3.] BY AGREEMENT. 536 Plaintiff offered to prove that defendant has so abused the horse that it was materially injured and lessened in value and the plaintiff had refused in consequence to receive it back. This evidence was excluded and plaintiff excepted to the ruling. By the Court. The evidence offered by the plaintiff ought to have been admitted, to prove, if he could, that the horse had been abused and injured by the defendant, and so to show that the defendant had put it out of his power to comply with the condi- tion, by returning the horse. The sale was on a condition sub- sequent; that is, on condition he did not elect to keep the horse, to return him within the time limited. Being on a condition subsequent, the property vested presently in the vendee, defeasi- ble only on the performance of the condition. If the defendant, in the meantime, disabled himself from performing the condition, — and if the horse was substantially injured by the defendant by such abuse, he would be so disabled, — then the sale became abso- lute, the obligation to pay the price became unconditional, and the plaintiff might declare as upon an indebitatus assumpsit, with- out setting out the conditional contract. Moss v. Sweet, 3 Eng. Law & Eq. 311; 16 Ad. & El. N. S. 493. New trial ordered. 636 DISCHAKGE OF CONTRACT. [Pabt V. CHAPTER II. DISCHARGE OF CONTRACT BY PERFORMANCE.' § 1. Payment. FOKD V. MITCHELL. 15 WISCONSIN, 304.-1862. Action against defendant as guarantor of an instrument set out in the complaint, or for the price agreed to be paid for a debt sold by plaintiff to defendant. Defense, that defendant was indorser of the instrument sued on and had received no notice of protest. Judgment for defendant. Plaintiff appeals. Dixon, C. J. The complaint in this action was several times amended. The original does not appear. The first amended complaint was against the defendant as guarantor upon an in- strument as follows : "No. 9092. $176. Janesville City Bank, Wisconsin. Certificate of Deposit. Janesville, April 15, 1858. Mr. Wm. L. Mitchell has deposited in this bank one hundred and seventy-six dollars, payable to the order of himself, 60 days after date, in currency, upon return of this certificate properly indorsed. Interest — per cent, if left 60 days. Jas. Fraser, A. Cash." The plaintiff was the holder of a debt against the Badger State Bank for $234, which the defendant applied to purchase. A sale was agreed upon at $176, to be paid in money by the defend- ant. Unable to raise the money, he requested the plaintiff to accept the certificate in lieu thereof, to which the plaintiff assented, provided the defendant would guarantee its payment. The defendant agreed to this, and writing his name across the back of the certificate, delivered it to the plaintiff. The bank refused payment, and the plaintiff caused the certificate to be protested and notice given defendant. Judgment was demanded for the amount of the certificate and interest from the time it Chap. U. §1.] . BY PERFORMANCE. 537 became due. The defendant answered, insisting tliat he was not a guarantor but an indorser, as alleged in a former complaint, and denied service of notice of protest. The cause came on for trial before the judge without a jury, when the judge, conceiving that the pleadings did not conform to the fa«t3 proved, ordered them to be amended. The complaint, as amended under this order, is for the f 176 agreed to be paid for the debt against the Badger State Bank. It sets out the transaction substantially as before, and avers the organization of the banks under the statute ; that the Janesville City Bank was, at the time of issuing the certificate, and has since remained, hopelessly insolvent, and that the plaintiff did not take nor agree to take the certificate, " guaranteed or indorsed or not guaranteed or indorsed," in payment for the debt sold, nor of the $176, the price agreed. The latter allegation is very ver- bose and awkward, but this is the substance of it. Judgment is demanded for $176 and interest from maturity of the draft. The answer, protesting that there is an entire departure from the cause of action first stated, denies nearly all the material alle- gations, and especially that notice of non-payment was properly given. The case made by the complaint is fully sustained by the proof, except the giving of notice of protest. The judge below so found, but supposing the plaintiff was still proceeding upon the guaranty, he held that he was precluded by his own allega- tions from recovering. He refers to those already noticed — that the certificate was not received as payment for the debt or price — and understanding from them that the plaintiff did not agree to accept the defendant's guaranty, he says that it is an end of the action. The last mistake is not very surprising. The intention of the pleader is masked by such an impenetrable thicket of words, that it is hazardous for any one to attempt to get at it. The certificate was produced at the trial. The ease as stated in either complaint is very plain on author- ity, and it was immaterial which was pursued. The certificate was payable in currency, and therefore not negotiable. See authorities cited by plaintiff's counsel under this point. Protest and notice of non-payment were therefore unnecessary to charge 538 DISCHARGE OF CONTRACT. [Part V. the defendant. The party writing his name across the back of a negotiable instrument can only be holden as an indorser, and unless the proper steps are taken to charge him as such, he will not be liable. Cady v. Shephard, 12 Wis. 639. But with non- negotiable paper the case is quite different. The liability there is absolute and unconditional. The party is entitled to none of the privileges of a common indorser. It is a guaranty, an agree- ment to pay at all events which nothing will discharge except some act which would discharge a surety. Josselyn v. Ames, 3 Mass. 274; Moies y. Bird, 11 Id. 436; Oxford Bank v. Haynes, 8 Pick. 423; Seabury v. Hungerford, 2 Hill, 80; Hall v. New- comb, 3 Id. 233 ; Seymour v. Van Slick, 8 Wend. 403 ; Oriswold V. Slocum, 10 Barb. 402; Story on Prom. Notes, § 473, and note. The payee may write out the guaranty over the signature. And in this case it would have been sufficient if the plaintiff had written the guaranty in due form before offering the certificate in evidence. It being established that the certificate was not received as payment for the debt transferred, it follows that the plaintiff can maintain his action for the price upon surrender of certificate. The principle is elementary, that the taking of the promissory note or bill of the debtor himself, either for a precedent liability or a debt incurred at the time, is no payment, unless it be ex- pressly so agreed; but that, after the expiration of the credit, an action may be maintained upon the original consideration, upon producing the note or bill to be canceled. The acceptance suspends the remedy during its currency, and the burden of showing that it was received in payment lies on the debtor. Drake v. De Gamp, 1 Johns. 34; Hughes v. Wheeler, 8 Cow. 77 ; Jaffrey v. Cornish, 10 N. H. 505 ; Puckford v. Maxwell, 6 Term, 52; Clark v. Noel, 3 Camp. 411; Chitty on Con., 660. So, too, of the acceptance by the creditor of the note of a third person for a precedent debt. Prima facie it is no discharge and it is for the debtor to show that it was so intended, unless the creditor makes the note his own by laches, or by parting with it. Tohey v. Barber, 5 Johns. 68; Whitbeck v. Van Ness, 11 Johns. 409; Booth v. Smith, 3 Wend. 66; Bank v. Fletcher, 5 Wend. 85; Smith V. Rogers, 17 Johns. 340; Waydell v. lAier, 3 Denio, 410; Chap. II. § 1.] BY PERFORMANCE. 539 Hays V. Stone, 7 Hill, 128; Frisbie v. Lamed, 21 Wend. 450; Vail V. Foster, 4 Corns. 312. But where the note of a third person is received upon the sale of goods, or for an indebtedness contracted at the time, the rule is reversed. The note will then be deemed to have been taken by the vendor of the goods in satisfaction, unless the con- trary be expressly proved ; or unless the note be void, and there be fraud and misrepresentation on the part of the vendee respecting it. Wilson V. Foree, 6 Johns. 110; Johnson v. Weed, 9 Id. 310; Whitheck v. Van Ness, supra; Breed v. CooJc, 15 Johns. 241; Beid V. Hutchinson, 3 Camp. 351. In such cases it is regarded as an exchange of commodities — that it was part of the original con- tract that the note should be taken in payment for the goods. If the purchaser indorsed the note, there being no agreement that he shall otherwise be answerable for the goods, he will be liable in the character of an indorser only, and cannot be sued for goods sold and delivered. Booth v. Smith, and Frisbie v. Lamed, supra; Whitney v. Goin, 20 N. H. 354; Soffe v. Gallagher, 3 E. D. Smith, 607. The subject is particularly well considered in the last case. The indorsement is, of course, conclusive evi- dence that the vendor did not intend to take the note at his own risk, or to part with the goods without holding the purchaser liable for the price; but having accepted it,' he assumes the obligation incident to such a contract; he must see that the indorser has notice of the dishonor, or the indorser will be released. But when the purchaser undertakes to answer for the note in some other form, as if he guarantee or agree to guarantee its pay- ment or collection, it seems that the seller may recover in an action for goods sold. Monroe v. Hoff, 5 Denio, 360. In that case it was held that he might do so, though the guaranty was void by the statute of frauds for not expressing the considera- tion. The attempt to guarantee was considered very strong, if not conclusive evidence, that the note was not received in pay- ment. All these were cases where the note was negotiable. Whether a different rule would apply to the transfer of a non-negotiable note, on the purchase of goods, as to burden of proof, we need 540 DISCHAKGE OF CONTRACT. [Part V. not inquire. In Plimley v. Westley (2 Bing. N. C. 249 [29 E. C. L. 322]), the plaintiff having received from the defendant, in payment for goods, a promissory note indorsed by the defendant, but not made payable to order, it was held that he was entitled to recover the price of the goods, notwithstanding he had omitted to give full notice. In the case at bar, I think, aside from the other proof, that the signature of the defendant upon the back of the certificate furnishes indisputable evidence that it was not received in payment, and hence that a suit for the price may be maintained. The certificate not being negotiable, the plaintiff could be guilty of no laches in not presenting it or notifying the defendant of its dishonor. The case is very like that of Mon- roe V. Hoff, above cited. As observed by the court in Soffe v. Gallagher, it seems clear that the taking of an absolute and un- qualified guaranty that the note or other evidence of debt shall be paid, will not operate as payment but only as a security ex- tending the term of credit. Such absolute liability is inconsist- ent with the idea of payment; for the guarantor, if liable, is so in respect of the original consideration, whether sued upon his guaranty or for the goods. Where there is a sale of goods and in consideration thereof an absolute undertaking for the payment of the price, the consideration may be resorted to as well as the express agreement. And in such cases it is immaterial whether the express contract be the note of the buyer or his absolute guaranty that the price shall be paid upon the note of a third person. The plaintiff was, therefore, entitled to judgment upon the complaint as last amended. It was no departure, the cause of action being the very same, whether it was pursued in one form or the other. The judgment must be reversed, and the cause remanded with directions that the judgment be entered for the plaintiff accord- ing to the demand of the complaint. Paine, J. I concur in the opinion of the chief justice, that upon the authorities, the action could be maintained for the original consideration ; but do not wish to commit myself to the position that under our statute of frauds, and the decisions of this court, the action could, under any circumstances, be sus- tained on the guaranty. Chap. U. § 2.] BY PERFORMANCE. 541 Coi/S, J. I think the plaintiff can recover on the original consideratioli, but express no opinion upon the other questions discussed by the chief justice. Judgment reversed, and cause remanded.^ § 2. Tender. KNIGHT V. ABBOTT. 30 VERMONT, 677.— 1858. Book account. Defense, tender. Judgment for defendant. Plaintiff appeals. Benbtett, J. We think no valid tender was made. It seems all that was done was that the defendant remarked to the plain- tiff, as the latter was passing by him, " I want to tender you this money before Mr. Dodge (at the same time holding in his hands thirty-five dollars and fifty cents), for labor you have done for me," but the plaintiff kept along with his team, making no reply. The defendant named no sum which he wished to tender, nor the amount he held in his hands, although it appeared subsequently that he had thirty-five dollars and fifty cents in his hands. It was for the defendant to make out affirmatively that he made a legal tender. The plaintiff was under no obligation to stop his team to make inquiries, or to have a sum of money tendered him ; and unless the defendant specified the amount which he wished to tender, the plaintiff could not determine as to the sufficiency of the sum, and no refusal by the plaintiff to receive any specific sum of money could be predicated upon such an offer as the case shows was made. All that the case legally shows, is an inten- tion on the part of the defendant, or rather a willingness, to make a tender. If no tender was made at the time suggested, there is no occasion to inquire about its being kept good. 1 "The distinction by the late learned Chief Justice Dixon, in his opinion in the case of Ford v. Mitchell, supra, as to the burden of proof where the note of a third person is received upon the sale of goods, or for an indebted- ness contracted at the time, I am inclined to think is not supported by the weight of authority." —Taylor, J., in Hoeflingerv. Wells, 47 Wis. 628, 631. See Tayloe v. Merchants^ Fire Ins. Co., 9 How. 390, ante, pp. 29, 34, 35 ; The Kimball, 3 Wall. 37. 542 DISCHARGE OF CONTRACT. [Pabt V. Tlie judgment of the County Court is reversed, and judgment for the plaintiff, for the sum reported by the auditors, and in- terest. § 3. Substantial performance. NOLAN et al. v. WHITNEY. 88 NEW YORK, 648.— 1882. In July, 1877, Michael Nolan, the plaintiffs' testator, entered into an agreement with the defendant to do the mason work in the erection of two buildings in the city of Brooklyn for the sum of f 11,700, to be paid to him by her in instalments as the work progressed. The last instalment of $2700 was to be paid thirty days after completion and acceptance of the work. The work was to be performed to the satisfaction and under the direction of M. J. Morrill, architect, to be testified by his certificate, and that was to be obtained before any payment could be required to be made. As the work progressed, all the instalments were paid except the last, and Nolan, claiming that he had fully performed his agreement, commenced this action to recover that instalment. The defendant defended the action upon the ground that Nolan had not fully performed his agreement according to its terms and requirements, and also upon the ground that he had not obtained the architect's certificate, as required by the agfreement. Upon the trial the defendant gave evidence tending to show that much of the work was imperfectly done, and that the agree- ment had not been fully kept and performed on the part of Nolan; the latter gave evidence tending to show that the work was properly done, that he had fairly and substantially performed his agreement, and that the architect had refused to give him the certificate, which, by the terms of his agreement, would entitle him to the final payment. The referee found that Nolan com- pleted the mason work required by the agreement according to its terms ; that he in good faith intended to comply with, and did substantially comply with, and perform the requirements of his agreement; but that there were trivial defects in the plastering Chap. II. § 3.] BY PERFORMANCE. 643 for -whicli a deduction of $200 should be made from the last instalment, and he ordered judgment in favor of Nolan for the last instalment, less $200. Eakl, J. It is a general rule of law that a party must perform his contract before he can claim the consideration due him upon performance; but the performance need not in all cases be literal and exact. It is sufficient if the party bound to perform, acting in good faith, and intending and attempting to perform his con- tract, does so substantially, and then he may recover for his ■work, notwithstanding slight or trivial defects in performance, for which compensation may be made by an allowance to the other party. Whether a contract has been substantially per- formed is a question of fact depending upon all the circumstances of the case to be determined by the trial court. Smith v. Brady, 17 N. Y. 189; TJiomas v. Fleury, 26 Id. 26; Glacius v. Black, 50 Id. 145 ; Johnson v. De Peyster, 50 Id. 666 ; Phillip v. Gallant, 62 Id. 256; Bowery Nat Bank v. The Mayor, 63 Id. 336. Accord- ing to the authorities cited, under an allegation of substantial performance, upon the facts found by the referee, Nolan was entitled to recover unless he is barred because he failed to get the architect's certificate, which the referee found was unreasonably and improperly refused. But when he had substantially per- formed his contract, the architect was bound to give him the cer- tificate, and his refusal to give it was unreasonable, and it is held that an unreasonable refusal on the part of an architect in such a case to give the certificate dispenses with its necessity. All concur. Judgment affirmed.^ 1 Accord : Katz v. Bedford, 77 Cal. 319 ; Hayward v. Leonard, 7 Pick. 180 ; Kelly & Bragg v. Bradford, 33 Vt. 35 ; Crouch v. Gutmann, 134 N. Y. 45, where FoUett, C. J., dissenting, says: "The tendency, called equitable, of courts to relieve persons from the performance of engagements deliberately entered into, and in legal effect to make for litigants new contracts which they never entered into, and which it cannot be supposed they ever would have entered into, has been and is being carried to a length which cannot be justified in reason." 644 DISCHARGE OF CONTRACT. [Pakt V. GILLESPIE TOOL CO. v. WILSON et al. 123 PENNSYLVANIA STATE, 19. — 1888. Assumpsit on a contract for drilling a well. Defense, non- performance. Nonsuit. Plaintiff appeals. Plaintiff agreed to drill for defendants a gas -well 2000 feet deep and five and five-eightlis inches in diameter. In case salt water was struck, tlie well was to be eight inches in diameter in order to shut off the salt water. A well was dug to the depth of between 1500 and 1600 feet, when, owing to an accident, it had to be abandoned. Another well was then begun, and when at a depth of 800 feet plaintiff was notified that defendants held the contract was for the first well and would not be responsible for the second. Plaintiff continued and drilled the second well to a depth of 2204 feet, but struck salt water at a depth of 1729 feet, and to case this off reduced the hole to admit of casing four and one-quarter inch size. Plaintiff claimed a substantial perform- ance on the ground that the well was for testing the territory, and that for this purpose a four and one-quarter inch hole was as good as a five and five-eighths inch, and that it would have been a useless expense to ream it out to the latter diameter when the experiment proved that the territory did not produce gas. Mr. Justice Stereett. Plaintiff company neither proved nor offered to prove such facts as would have warranted the jury in finding substantial performance of the contract embodied in the written proposition submitted to and accepted by the defendants. In several particulars the work contracted for was not done according to the plain terms of the contract. Nearly one-half of the well was not reamed out, as required, to an eight-inch diameter so as to admit five and five-eighths inch casing in the clear. About 180 feet of the lower section of the well also was bored four or four and one-quarter inches instead of five and five-eighths inches in diameter. In neither of these particulars, nor in any other respect, was there any serious difficulty in the way of completing the work in strict accordance with the terms of the agreement. To have done so would have involved nothing more than additional time and increased expense. The fact was Chap. II. § 3.] BY PERFORMANCE. 545 patent, as well as proved by undisputed evidence, that a four and one-quarter inch well would not discharge as much gas as one five and five-eighths inches in diameter. It is no answer to say that for the purpose of testing the territory a four and one-quarter inch well was as good as a five and five-eighths inch well; nor that reaming out the well to the width and depth required by the contract would have subjected defendants to additional expense without any corresponding benefit. That was their own affair. They contracted for the boring of a well of specified depth, dimensions, etc., and they had a right to insist on at least a substantial performance of the contract according to its terms. That was not done, and the court was clearly right in refusing to submit the case to the jury on evidence that would not have warranted them in finding substantial performance of the contract. The equitable doctrine of substantial performance is intended for the protection and relief of those who have faithfully and honestly endeavored to perform their contracts in all material and substantial particulars, so that their right to compensation may not be forfeited by reason of mere technical, inadvertent, or unimportant omissions or defects. It is incumbent on him who invokes its protection to present a case in which there has been no wilful omission or departure from the terms of his con- tract. If he fails to do so, the question of substantial per- formance should not be submitted to the jury. The offers specified in the third, fourth, and fifth assignments were rightly rejected. The proposed evidence was irrelevant and incompetent. There is nothing in the record that requires a reversal of the judgment. Judgment affirmed. * 1 "To justify a recovery upon the contract as substantially performed, the omissions or deviations must be the result of mistake or inadvertence, and not intentional, much less fraudulent ; and they must be slight or sus- ceptible of remedy, so that an allowance out of the contract price will give the other party substantially what he contracted for. They must not be substantial and running through the whole work, so as to be remediless, and defeat the object of having the work done in a particular manner. And these are questions of fact for the jury or trial court. Olmstead v. Beale, 19 Pick. 528 ; Woodward v. Fuller, 80 N. Y. 312. It may seem a harsh doc- trine to hold that a man who has built a house shall have no pay for it, but the other party can well say : ' I never made any such agreement. I agreed 546 DISCHAKGE OF CONTRACT. [Part V. DUPLEX SAFETY BOILEE CO. v. GARDEN et al. 101 NEW YORK, 38T.— 1886v Appeal from a judgment of the Supreme Court at General Term in the second department, affirming a judgment for plain- tiff, and from an order denying defendants' motion for a new trial. Danforth, J. The plaintiff sued to recover $700, the agreed price, as it alleged, for materials furnished and work done for the defendants at their request. The defense set up was that the work was done under a written contract for the alteration of cer- tain boilers, and to be paid for only when the defendants " were satisfied that the boilers as changed were a success." Upon the trial it appeared that the agreement between the parties was contained in letters, by the first of which the defendants said to plaintiff: "You may alter our boilers, changing aU the old sections for your new pattern ; changing our fire front, raising both boilers enough to give ample fire space; you doing all disconnecting and connecting, also all necessary mason work and turning boilers over to us ready to steam up. Work to be done by tenth of May next. For above changes we are to pay you f700, as soon as we are satisfied that the boilers as changed are a success, and will not leak under a pressure of one hundred pounds of steam." The plaintiff answered, "accepting the proposition," and as the evidence tended to show, and as the jury found, completed the required work in all particulars by the 10th of May, 1881, at which time the defendants began and thereafter continued the use of the boilers. The contention on the part of the appellants is that the plain- to pay you if you would build my house in a certain manner, which you have not done.' The fault is with the one who voluntarily violates his contract." — Mitchell, J., in Elliott y. Caldwell, 43 Minn. 357, 360. Accord: Van Cliefy. Van Vechten, 130 N. Y. 671, where the court says : "While slight and insignificant imperfections or deviations may be over- looked on the principle of de minimis non curat lex, the contract in other respects must be performed according to its terms. When the refusal to proceed is wilful, the difference between substantial and literal performance is bounded by the line of de minimis." As to mercantile contracts, see Nornngton v. Wright, 115 U. S. 188, post, p. 584. Chap. II. § 3.] BY PERFORMANCE. 547 tiff was entitled to no compensation, unless the defendants " were satisfied that the boilers as repaired were a success, and that this question was for the defendants alone to determine," thus making their obligation depend upon the mental condition of the defendants, which they alone could disclose. Performance must of course accord with the terms of the contract, but if the defendants are at liberty to determine for themselves when they are satisfied, there would be no obligation, and consequently no agreement which could be enforced. It cannot be presumed that the plaintiff entered upon its work with this understanding, nor that the defendants supposed they were to be the sole judge in their own cause. On the contrary, not only does the law presume that for services rendered, remuneration shall be paid, but here the parties have so agreed. The amount and manner of compen- sation are fixed; time of payment is alone uncertain. The boilers were changed. Were they, as changed, satisfactory to the defendants? In Folliard v. Wallace (2 Johns. 395) W. cov- enanted that in case the title to a lot of land conveyed to him by F. should prove good and sufficient in law against all other claims, he would pay to F. $150, three months after he should be "well satisfied" that the title was undisputed. Upon suit brought the defendant set up that he was "not satisfied," and the plea was held bad, the court saying, "a simple allegation of dissatisfaction, without some gOod reason assigned for it, might be a mere pretext and cannot be regarded." This decision was folowed in City of Brooklyn v. Brooklyn City B. B. Co. (47 K. Y. 475) and Miesell v. Olohe Mut. L. Ins. Co. (76 Id. 115). In the case before us the work required was specified, and was completed ; the defendants made it available and continued to use the boilers without objection or complaint. If there was full performance on the plaintiff's part, nothing more could be required, and the time for payment had arrived; for according to the doctrine of the above cases, "that which the law will say a contracting party ought in reason to be satisfied with, that the law will say he is satisfied with." Another rule has prevailed, where the object of a contract was to gratify taste, serve personal convenience, or satisfy individual preference. In either of these cases the person for whom the 648 DISCHARGE OF CONTRACT. [Paet V. axticle is made, or the ■work done, may properly determine for himself — if the other party so agree — whether it shall be accepted. Such instances are cited by the appellants. One who makes a suit of clothes (Brown v. Foster, 113 Mass. 136), or undertakes to fill a particular place as agent (Tyler v. Ames, 6 Lans. 280), mold a bust (Zaleski v. Clark, 44 Conn. 218), or paint a portrait (Gibson v. Cranage, 39 Mich. 49 j Hoffman y. Gallaher, 6 Daly, 42), may not unreasonably be expected to be bound by the opinion of his employer, honestly entertained. A different case is before us, and in regard to it no error has been shown. The judgment appealed from should be affirmed. All concur. Judgment affirmed. '■ 1 "The only question in this case is whether the written agreement ■between the parties left the right of the plaintiff to recover the price of the work and materials furnished by him dependent upon the actual satisfaction of the defendant. Such agreements usually are construed not as making the defendant's declaration of dissatisfaction conclusive, in which case it would be difficult to say that they amounted to contracts (Hunt v. Liver- more, 6 Pick. 395, 397), but as requiring an honest expression. In view of modern modes of business, it is not surprising that in some cases eager sellers or selling agents should be found taking that degree of risk with unwilling purchasers, especially where taste is involved. Brown v. Foster, 113 Mass. 136 ; Gibson v. Cranage, 39 Mich. 49 ; Wood Seaping & Mowing Machine Co. v. Smith, 50 Mich. 565 ; Zaleski v. Clark, 44 Conn. 218 ; McClure Bros. v. Briggs, 58 Vt. 82 ; Exhaust Ventilator Co. v. Chicago, Milwaukee <& St. Paul Bailway, 66 Wis. 218 ; Seeley v. Welles, 120 Penn, St. 69 ; Singerly v. Thayer, 108 Penn. St. 291 ; Andrews v. Belfield, 2 C. B. (N. S.) 779. " Still when the consideration furnished is of such a nature that its value will be lost to the plaintiff, either wholly or in great part, unless paid for, a just hesitation must be felt, and clear language required, before deciding that payment is left to the will, or even to the idiosyncrasies, of the inter- ested party. In doubtful cases courts have been inclined to construe agree- ments of this class as agreements to do the thing in such a way as reason- ably ought to satisfy the defendant. Sloan v. Hayden, 110 Mass. 141, 143 ; Braunstein v. Accidental Death Ins. Co., 1 B. & S. 782, 799; Dallmanr. King, 4 Bing. N. C. 105." — Holmes, J., in Hawkins v. Graham, 149 Mass. 284, 287, 288. Ohap. II. § 3.] BY PERFORMANCE. 549 ADAMS EADIATOE, & BOILER WOKKS v. SCHNADER. 155 PENNSYLVANIA STATE, 394.— 1893. Assumpsit for heater sold and delivered. Defense, non-per- formance. Verdict and judgment for plaintiff. Defendant appeals. Mr. Justice Dean. Davis C. Schnader, defendant's testator, the owner of a dwelling-house then being built, on the 24th of August, 1889, made a written contract with plaintiffs that they should furnish this house with a steam heater. Among other stipulations is this one : " We (plaintiffs) guarantee this apparatus for heating by steam to be constructed in a good, thorough, and workmanlike manner, to give entire satisfaction in its operation, and to work entirely noiseless. Should it prove unsatisfactory after a thorough and reasonable trial, we will remove it at our expense, refund the moneys paid to us on account of it, and will place the building in as good a condition as it was when we received it for the purpose of erecting our steam-heating apparatus. We will fur- nish said steam-heating apparatus complete in all its details for the sum of four hundred and eighty-two dollars ($482.00) ; one-half to be paid on completion of the work, and the remainder in sixty days thereafter." The specifications of kind and size of materials to be used in the constructions are elaborate. We do not deem them, so far as this issue is concerned, very material, for the case turns on the construction to be given that stipulation in the agreement just quoted. Mr. Schnader moved into his house on Tuesday of the last week in March, 1890, and died on the following Saturday. By his last will, duly proven, he devised the dwelling-house to his son, Milton H. Schnader, his executor and this defendant, subject to a life estate in his widow. Before his death, and before the heater, by use for a reasonable time, had been tested, he paid to plaintiffs about one-half the price. Milton H. Schnader, son, executor, and devisee, was in the house with his father for the four days of his last illness, and continued to live there with his mother. He testified that the heater was wholly unsatisfactory to him from the day it was first 550 DISCHAEGE OF CONTRACT. [Past V. started; failed to heat the rooms. He notified plaintiffs of this when they demanded payment of the last instalment of the price, and asked them to defer collection until the following December, when the weather would be colder and a better test could be made. This they declined to do, and proposed that James N. Scheible, a plumber, should make an examination of the heater; this was concurred in by Schnader, and the last of June or the first of July Scheible fired it up, and it worked satisfactorily to him, Scheible, on that day, at that season of the year. But Schnader was not satisfied, and on the 6th of September, in response to plaintiffs' written demand of August 25th, for im- mediate payment, requested them to remove the heater from his premises. The plaintiffs then brought suit for $274.03, the unpaid balance of their contract price. At the trial, plaintiffs averred complete perforjaance of their contract according to its terms; defendant denied this. There was considerable evidence adduced on both sides as to the quality and capability of the heater, which was submitted to the jury by the learned court below, on the theory or construction of the agreement, that if plaintiffs performed their contract according to the specifications, to their own satisfaction and that of the jury, then they should have a verdict. This instruction the appellant's seven assignments of error complain of. What is a reasonable interpretation of the contract of plaintiffs when they say, "We guarantee this apparatus to give entire satisfaction in its operation, and should it prove unsatisfactory after a thorough and reasonable trial, we will remove it at our expense." It must be kept in mind, that this was not a piece of machinery designed to accomplish some single or particular pur- pose in which power and durability alone constitute desirability or satisfactoriness. A saw-mill may be warranted as of a capacity to cut a certain quantity of lumber per day; a loco- motive may be warranted to draw a certain number of tons up a certain grade, or around a certain curve; and if there be a guaranty that they shall give satisfaction, it can reasonably be presumed that the specified power was all that was within the mind of the parties when they contracted. But when the subject of the contract is household furniture, as in McOarren v. McNulty Chap. U. § 3.] BY PERFORMANCE. 651 (7 Gray, 139) ; or for a suit of clothes, as in Brown v. Foster (113 Mass. 136); or for a work of art, as ia Hoffman v. Gallaher (6 Daly, 42) and Zaleski v. Clark (44 Conn. 218), the question is not whether the thing contracted for had a certain strength or a particular dimension as specified in the contract, but there come in to make up satisfaction or dissatisfaction those qualities which please, or those defects which are nothing more than annoying. A dwelling-house heater is in use every hour of the day and night; is absolutely indispensable to the health and comfort of the householder and his family; if all the iron and brickwork be made as specified; the valves, gauge-cooks, radiators, boilers, and all other parts, measure as set out in the contract ; and if, even on one day in the middle of summer on being fired up and operated by an expert plumber, a degree of heat is attained which, in his opinion, comes up to the point fixed in the contract, these facts would not of themselves determine that it was satisfactory to the man who was to use it in zero weather. If in its ordinary every- day use in heating his house, instead of satisfying him, it was, as he testifies, a constant vexation, we think he was not bound to keep and pay for it. The reasonable interpretation of the contract is, that Schnader was to be satisfied with the heater; not the plaintiEEs; not the plumber, nor other witnesses; not the jury. As is said in Zaleski v. Clark : " It is not enough to say she (the defendant) ought to be satisfied with it, and that her dissatisfaction is unreasonable. She, not the court, is entitled to judge of that. The contract was not to make one she ought to be satisfied with, but one she would be satisfied with." The rule laid down by this court in Singerly v. Thayer (108 Pa. 291) is to the same effect, and is clearly applicable to this contract and this evidence. The court says: "He (the defend- ant) therefore was the person to decide, and to declare whether it was satisfactory. He did not agree to accept what might be satisfactory to others, but what was satisfactory to himself. This was the fact which the contract gave him the right to decide. He was the person who was to test and use it. No other persons could intelligently determine whether in every respect he was satisfied therewith." 552 DISCHARGE OF CONTRACT. [Part V, The appellees' counsel argue that there is a distinction between this contract and the one in Singerly v. Thayer. In the contract before us, plaintiffs agree to remove the heater " should it prove unsatisfactory after a thorough and reasonable trial, " while there are no such words in the Singerly and Thayer contract. But the plaintiffs on the trial alleged, and offered evidence to prove, that at their suggestion and by consent of defendant a test trial was given this heater in June or July. Mr. Adams, for the plaintiff, testified that the trial demonstrated he had complied with his contract; that is his opinion. He admits that a trial at that time of the year would be a theoretical, not a practical one. The defendant concedes that on the trial it worked better than it usually did, but he was not convinced it would work satisfac- torily to him in cold weather. The fair presumption is, that the "thorough and reasonable trial" contemplated by the parties, was its use by the householder under the supervision and attend- ance of the ordinary household servants. It was not expected the purchaser would daily employ skilled plumbers or engineers to operate it. In this ordinary and expected use of it from March until June it was unsatisfactory to Schnader; after the trial test made by the expert Scheible, in presence of Adams and Schnader in summer, it still was not satisfactory; was so unsat- isfactory that Schnader offered to forfeit all he had paid if plaintiffs would take the heater out. Of course defendant's dissatisfaction must be genuine, as distinguished from mere caprice or dishonesty; he could not have ordered the heater taken out without a trial by the ordinary methods and service of the householder; nor, for the purpose of evading payment of the balance of the price, could a dishonest declaration of dissatisfaction have been an effectual defense. But there is no evidence of want of good faith in his conduct; he has a right to defend on the ground that the heater does not work satisfactorily to him, after what he considered a thorough and reasonable trial by the ordinary use of it for more than two months, and especially after the test trial proposed by plaintiffs. In substance, the court below submitted it as a question of fact to the jury to find from the evidence whether he ought to have been satisfied; this was an erroneous interpretation of the con- Chap. II. § 3.] BY PERFORMANCE. 553 tract. The proper interpretation is : (1) Was there a thorough and reasonable trial of the heater by the ordinary daily use of it? (2) Was the defendant then dissatisfied with it? If he was dissatisfied after such trial, the plaintiff cannot recover. Neither the plaintiff, jury, nor witnesses ought to be permitted to make a contract for him ; his contract was, that he was to be satisfied, and the plaintiffs must perform their contract in this particular the same as in the item of putting in boilers. Plaintiffs' counsel further argue that the judgment should be affirmed, because this contract was personal alone to D. C. Schnader, defendant's father, who died four days after the heater was put in the house ; as he does not survive to indicate dissatis- faction, the defendant has no authority to do so. The plaintiffs raised no such question in the court below, so far as can be learned from the charge or the points presented ; but as the case goes back for retrial, it is best we should here briefly pass upon it. It would rather lack equality to hold that the contract liability for the price passed to the executor and devisee, but the right to insist on performance died with the testator ; neither reason nor law imposes upon us such a decision. If D. C. Schnader had lived to make such trial of the heater as was intended by the contract, and had expressed no dissatisfaction -with it, there -would be a conclusive presumption of plaintiffs' complete performance; but as he died almost immediately after it was put in, his executor and devisee has the right to set up the same defense as the testator might have done had he lived. It was not a contract for a suit of clothes, or for a set of artificial teeth, which could be satisfactory to but one person, but for a heater, which was to be satisfactory to the occupant of the house where it was to be put; death and the last will have made this defendant the occupant, and he has the right to insist that the heater shall work satisfactorily to him as he has succeeded not only to the property, but to the personal use of it. The defendant's first assignment of error to the refusal cff the court to instruct as requested in first point: "That under the law the contract of August 24, 1889, is a guaranty or warranty that the apparatus would work to the satisfaction of Davis C. Schnader, deceased, and that, if the evidence is believed that as 654 DISCHARGE OF CONTRACT. [Paet V. executor he fairly and reasonably tried and tested the apparatus and was dissatisfied with it, and so notified plaintiffs, there can be no recovery," is sustained. This in effect disposes of all the other assignments. The judgment is reversed and a venire facias de novo awarded.* 1 "The cases where the parties provide that the promisor is to be satisfied, or to that effect, are of two classes ; and whether the particular case at any time falls within the one or the other must depend on the special circum- stances, and the question must he one of construction. " In the one class the right of decision is completely reserved to the prom- isor, and without being liable to disclose reasons or account for his course, and a right to inquire into the grounds of his action and overhaul his deter- mination, is absolutely excluded from the promisee and from all tribunals. It is sufficient for the result that he willed it. The law regards the parties as competent to contract in that manner, and if the facts are suflScient to show that they did so, their stipulation is the law of the case. The promisee is excluded from setting up any claim for remuneration, and is likewise debarred from questioning the grounds of decision on the part of the prom- isor, or the fitness or propriety of the decision itself. The cases of this class are generally such as involve the feelings, taste, or sensibility of the promisor, and not those gross considerations of operative fitness or mechanical utility which are capable of being seen and appreciated by others. But this is not always so. It sometimes happens that the right is fully reserved where it is the chief ground, if not the only one, that the party is determined to pre- serve an unqualified option, and is not vrilling to leave his freedom of choice exposed to any contention or subject to any contingency. He is resolved to permit no right in any one else to judge for him or to pass on the wisdom or unwisdom, the justice or injustice of his action. Such is his will. He will not enter into any bargain except upon the condition of reserving the power to do what others might regard as unreasonable. The following cases suffi- ciently illustrate the instances of the first class : Gibson v. Cranage, 39 Mich. 49 ; Taylor v. Brewer, 1 M. & S. 290 ; McCarren v. McNulty, 7 Gray, 139; Brown v. Foster, 113 Mass. 136; Zaleski v. Clark, 44 Conn. 218; Bossiter v. Cooper, 23 Vt. 622 ; Hart v. Hart, 22 Barb. 606 ; Tyler v. Ames, 6 Lans. 280. " In the other class the promisor is supposed to undertake that he will act reasonably and fairly, and found his determination on grounds which are just and sensible, and from thence springs a necessary implication that his decision in point of correctness and the adequacy of the grounds of it are open considerations and subject to the judgment of judicial triers. Among the cases applicable to this class are Daggett v. Johnson, 49 Vt. 345, and Hartford Sorghum Mfg. Co. v. Brush, 43 Vt. 528." — Graves, C. J., in Walter A. Wood <6c. Co. V. Smith, 50 Mich. 566, 669-571. See also Exhaust Venti- lator Co. V. Chicago &c. By., 66 Wis. 218 ; Silsby Mfg. Co. v. Chico, U Sawyer, 183 ; 24 Fed. Rep. 893. Chap. UI. § 2.] BY BEEACH. 555 CHAPTER III. DISCHARGE OF CONTRACT BY BREACH. § 1. Fosition of parties where a contract is discharged by breach. DEEMOTT V. JONES. 2 WALLACE (U. S.), 1. — 1864. [Keported herein at p. 641.] NoTB. — All of the cases in this chapter -will he found to illustrate this topic. § 2. Forms of discharge by breach. (f.) Discharge by renunciation before performance due. WINDMTJLLEE, et al. v. POPE et al. 107 NEW YORK, 674. — 1887. This was an action to recover damages for alleged breach of a contract to purchase a quantity of iron. Verdict for plaintiffs. Judgment affirmed at General Term. In January, 1880, the parties entered into a contract for the sale by plaintiffs and purchase by defendants of " about twelve hundred tons old iron, Vignol rails, for shipment from Europe at sellers' option, by sail or steam vessels to New York, Philadel- phia, or Baltimore, at any time from May 1 to July 15, 1880, at thirty-five dollars per ton, . . . deliverable in vessels at either of the above ports on arrival." On or about June 12, 1880, defendants notified plaintiffs that they would not receive or pay for the iron, or any part of it, and advised that plaintiffs better stop at once in attempting to carry out the contract. Plaintiffs 556 DISCHAKGE OF CONTRACT. [Part V. thereupon sold the iron abroad which they had purchased to carry out the contract. Per Curiam. We think no error is presented upon the record •which requires a reversal of the judgment. The defendants hav- ing on the 12th of June, 1880, notified the plaintiffs that they would not receive the iron rails or pay for them, and having informed them on the next day that if they brought the iron to New York they would do so at their own peril, and advised them that they had better stop at once attempting to carry out the contract, so as to make the loss as small as possible, the plaintiffs were justified in treating the contract as broken by the defendant at that time, and were entitled to bring the action immediately for the breach, without tendering the delivery of the iron, or awaiting the expiration of the period of performance fixed by the contract; nor could the defendants retract their renunciation of the contract after the plaintiffs had acted upon it, and by a sale of the iron to other parties changed their position. Dillon V. Anderson, 43 N. Y. 231; Howard v. Daly, 61 Id. 362; Ferris v. Spooner, 102 Id. 12; Hochster v. De La Tour, 2 El. & Bl. 678; Cort V. Ambergate &c. Railway Co., 17 Ad. & El. 127; Grabtree V. Messersmith, 19 la. 179; Benjamin on Sales, §§ 567, 668. The ordinary rule of damages in an action by a vendor of goods and chattels, for a refusal by the vendee to accept and pay for them, is the difference between the contract price and the market value of the property at the time and place of delivery. Dana V. Fiedler, 12 N. Y. 40; Dustan v. McAndrew, 44 Id. 72; Cohen V. Piatt, 69 Id. 348. « w « • « All concur. Judgment affirmed.^ DINGLEY et al. v. OLER et al. 117 tTNITED STATES, 490.— 1886. Assumpsit for damages for alleged breach of contract. Judg- ment for plaintiffs. Writs of error by both parties. 1 See also Kurts v. Frank, 76 Ind. 694, ante, p. 358. Chap. III. § 2.] BY BREACH. 557 Plaintiffs, in 1879, sold defendants a quantity of ice to be returned by defendants the following year. Ice was then worth fifty cents a ton. Next season, in July, when ice was worth fi.ve dollars a ton, plaintiffs demanded a return of the amount delivered. Defendants replied : " We must, therefore, decline to ship the ice for you this season, and claim as our right to pay you for the ice in cash at the price you offered other parties here (that is, fifty cents), or give you ice when the market reaches that point." In answer to another demand defendants replied in substance the same and asked for a reply or a personal interview. Plaintiffs thereupon, without waiting for the end of the season, commenced this action. Mr. Justice Matthews. . . . We differ, however, from the opinion of the Circuit Court that the defendants are to be con- sidered, from the language of their letters above set out, as having renounced the contract by a refusal to perform, within the mean- ing of the rule which, it is assumed, in such a case, confers upon the plaintiffs a right of action before the expiration of the contract period for performance. We do not so construe the correspond- ence between the parties. In the letter of July 7th, the defend- ants say: "We must, therefore, decline to ship the ice for you this season, and claim, as our right, to pay you for the ice, in cash, at the price you offered it to other parties here, or give you ice when the market reaches that point." Although in this extract they decline to ship the ice that season, it is accompanied with the expression of an alternative intention, and that is, to ship it, as must be understood, during that season, if and when the market price should reach the point which, in their opinion, the plaintiffs ought to be willing to accept as its fair price between them. It was not intended, we think, as a final and absolute declaration that the contract must be regarded as altogether off, so far as their performance was concerned, and it was not so treated by the plaintiffs. For, in their answer of July 10th, they repeat their demand for delivery immediately, speak of the letter of the 7th instant as asking "for a postponement of the delivery," urge them "to fill our order," and close with "hoping you (the defendants) will take a more favorable view upon further reflec- tion," etc. Here, certainly, was a locus penitentice conceded to 558 DISCHARGE OF CONTRACT. [Pabt V. the defendants by the plaintiffs themselves, and a request for further consideration, based upon a renewed demand, instead of abiding by and standing upon the previous one. Accordingly, on July 15th, the defendants replied to the demand for an immediate delivery to meet the exigency of the plaintiffs' sale of the same ice to others, and the letter is evi- dently and expressly confined to an answer to the particular demand for a delivery at that time. They accordingly say: " Now you ask us at a time when we are pressed by our sales and by short supply threatening us and others, to deliver to you the equivalent in tons of the ice taken from you under the circum- stances stated. This does not seem to us to be fair," etc. "We cannot, therefore, comply with your request to deliver to you the ice claimed, and respectfully submit that you ought not to ask this of us in view of the fact stated herein and in ours of the 7th." This, we think, is very far from being a positive, unconditional, and unequivocal declaration of fixed purpose not to perform the contract in any event or at any time. In view of the consequences sought to be deduced and claimed as a matter of law to follow, the defendants have a right to claim that their expressions, sought to be converted into a renunciation of the contract, shall not be enlarged by construction beyond their strict meaning. The view taken by the Circuit Court of the correspondence and conduct of the parties, and which we hold to be erroneous, brought the case within the rule laid down by the English courts in Hochster v. De La Tour, 2 El. & Bl. 678; Frosty. Knight, L. E. 7 Ex. Ill; Danube & Black Sea Railway Co. v. Xenos, 11 C. B. N. S. 152; and which, in Boper v. Johnson (L. E. 8 C. P. 167, 168) was called a novel doctrine ; followed by the courts of several of the States (Crabtree v. Messersmith, 19 Iowa, 179 ; Holloway v. Griffith, 32 Iowa, 409; Fox v. Kitton, 19 111. 519; Chamber of Commerce v. Sollitt, 43 111. 519; Dugan v. Anderson, 36 Maryland, 567; Burtis v. Thompson, 42 N. Y. 246); but disputed and denied by the Supreme Judicial Court of Massachusetts in Daniels v. Newton (114 Mass. 530) and never applied in this court. 'Accord- ingly, the right to maintain the present action was justified upon the principle supposed to be established by those cases. The construction we place upon what passed between the parties Chap. III. § 2.] BY BREACH. 559 renders it unnecessary for us to discuss or decide whether the doctrine of these authorities can be maintained as applicable to the class of cases to which the present belongs; for, upon that construction, this case does not come within the operation of the rule involved. In Smoot's Case (15 Wall. 36) this court quoted with approval the qualification stated by Benjamin on Sales (1st ed. 424, 2d ed. § 568) that, " A mere assertion that the party will be unable, or will refuse to perform his contract, is not sufficient; it must be a distinct and une- quivocal absolute refusal to perform the promise, and must be treated and acted upon as such by the party to whom the promise was made ; for, if he afterwards continue to urge or demand a compliance with the contract, it is plain that he does not understand it to be at an end." We do not find any such refusal to have been given or acted upon in the present case, and the facts are not stronger than those in Avery v. Bowden (5 El. & Bl. 714; S. G. 6 El. & Bl. 953), which were held not to constitute a breach or renunciation of the contract. The most recent English case on the subject is that of Johnstone v. Milling, in the Court of Appeal (16 Q. B. D. 460), decided in January of the present year, which holds that the words or conduct relied on as a breach of the contract by antici- pation must amount to a total refusal to perform it, and that that does not by itself amount to a breach of the contract unless so acted upon and adopted by the other party. The present action was prematurely brought before there had been a breach of contract, even in this sense, by the defendants, for what they said on July 15th amounted merely to a refusal to comply with the particular demand then made for an immediate delivery. The judgment is accordingly reversed upon the writ of error sued out by the defendants below, and the cause remanded, with instructions to take further proceedings therein according to law ; and upon the writ of error of plaintiffs below judgment will be given that they take nothing by their writ of error. 560 BISCHAEGE OF CONTRACT. [Pabt V. (u.) Impossibility created by one party before performance due. WOLF V. MAESH. 64 CALIFORNIA, 228. — 1880. Action on an instrument in writing. Judgment for plaintiff. Defendant appeals. The instrument was as follows : "Martinez, November 24th, 1866. "For value received, I promise to pay to S. Wolf, or order, four hun- dred and forty-nine dollars, with interest at one per cent per month from date until paid, principal and interest payable in United States gold coin. This note is made with the express understanding that i£ the coal mines in the Marsh Ranch yield no profits to me, then this note is not to be paid, and the obligation herein expressed shall be nuU and void. " C. P. Marsh." On November 1, 1871, defendant conveyed his interest in the ranch to one Williams. Up to that date the mines had yielded defendant no profits. Sharpstein, J. . . . Before the mines had yielded any profits to the defendant, he sold and conveyed his interest in them to a stranger. By so doing he voluntarily put it out of his power ever to realize any profits from the mines. However great the yield of profits from them might be after that, they could yield none to him. And the principle is elementary, that, "if one voluntarily puts it out of his power to do what he has agreed, he breaks his contract, and is immediately liable to be sued therefor, without demand, even though the time specified for performance has not expired." Bishop on Gont., § 690 (1426). That this case is within that principle, we do not entertain a doubt. When the note was executed, the defendant was a half owner of the mines, which were leased on such terms that the production of coal from them must have yielded him a profit. After making the note, he voluntarily committed an act which made it impossible for the contingency upon which the note would become due and payable ever to arise. When he did that, he violated his contract, and the note at once became due and pay- able; and as this action -n-afi commenced within four years after Chap. III. § 2.] BY BREACH. 561 that, it follows that the judgment and order of the court appealed from must be affirmed.' DELAMATEE v. MILLER. 1 COWEN (N. Y.), 75. — 1823. Assumpsit by Miller against Delamater; for that the former had exchanged his horse with one Schermerhorn for his (S.'s) watch, which was in Delamater's possession at his (D.'s) house; and which he, being present at the contract, agreed to keep and deliver to Miller, who said he should call for it on the Saturday- following. Miller did not demand it till the Sunday following, when Delamater refused to deliver it, assuming to retain it for a dollar due him from Schermerhorn ; and he afterwards gave up the watch to Schermerhorn, who sold it. Judgment for plaintiff. Curia. The defendant was not bound to regard the demand on Sunday (vid. Gowen's Treatise, 135, and the cases there cited); but, as the defendant parted with the watch, and thereby put it out of his power to perform the contract, the plaintiff was excused from the necessity of making any demand. Sir Anthony Main's Case, 5 Rep. 21, — the 2d resolution in that case. And the judgment was affirmed. (m.) Menunciation in the course of performance. HALE et al. v. TROUT et al. 3B CALIFORNIA, 229. — 1868. Action for contract price of lumber delivered, and for damages for breach of contract by defendants in declaring the contract at an end and refusing to receive any more lumber under it. Judg- ment for plaintiffs for lumber delivered, but not for breach. Plaintiffs appeal. 1 Accord : Cape Fear &e. Ifav. Co. v. Wilcox, 7 Jones' L. (N. C.) 481 ; United States v. Peck, 102 TJ. S. 64. 00 662 DISCHARGE OF CONTRACT. [Pakt V. Sawyer, C. J. . . . Conceding a breach to have occurred on the part of the defendants, it is claimed on their behalf that the plaintiffs had but one of three courses to pursue: firstly, to rescind the contract and sue for the value of the lumber delivered; secondly, proceed to manufacture and tender the lumber, and sue upon the contract from month to month for a corresponding amount of the contract price ; or, thirdly, proceed to manufacture and tender the lumber according to the terms of the contract, till the whole two million feet should be delivered or tendered, and then sue for the entire amount at once. And the court below must either have adopted this theory, or have rendered judgment upon the hypothesis that the only breach on the part of the defendants consisted in not paying for a part of the lumber delivered and accepted, and that such non-payment did not con- stitute a breach of the contract entitling the plaintiffs to damages beyond the price of the amount of lumber delivered and received, but not paid for. But if it be conceded that plaintiffs were entitled to go on manufacturing and tendering the lumber, and then sue for the contract price, as suggested, as to which there may be some doubt (see Clark v. Marsiglia, 1 Den. 318; Derby et al. V. Johnson et al., 21 Vt. 22), it is clear, both on principle and authority, that the plaintiffs were entitled to pursue another course, the one adopted in this action ; that is to say, to treat the contract as whoUj- broken by the defendants, and sue to recover, firstly, the contract price for the lumber actually delivered and received under the contract; and, secondly, upon the breach to recover the entire damages resulting from the breach on the part of defendants in putting an end to and refusing to receive any more lumber under the contract. It may be that the monthly payments called for by the contract were absolutely necessary to enable the plaintiffs to perform their covenants, and that without such payments it would have been impossible for them to proceed. It would require a large amount of capital for plaintiffs to proceed in ■the manufacture of lumber for a period of three years without receiving payments. Besides, they were compelled to erect, and did erect, a new mill for the express purpose of enabling them to fulfill their contract. It would be equally onerous to be compelled to sue each month, and Chap. III. § 2.] BY BREACH. 5t53 recover tke amount of the several monthly payments at the end of a protracted law suit. They were not bound to do so under the terms of their contract. There was not merely a neglect of payment, but they were notified by the defendants that they should treat the contract as at an end, and would receive no more lumber under it. Defendants thereby prevented the plaintiffs from fulfilling their contract. The plaintiffs, after this, even if they would be justified in so doing, could not be required, as a condition precedent to obtaining adequate relief for the breach, to go on manufacturing lumber at the risk of finding no market for it, or of being unable to collect from the defendants the amounts that might become due under the contract. There was a total breach of an entire contract, and the plaintiffs were entitled to sue upon the breach immediately, and recover the entire damages resulting from it, without waiting for the time for full performance to elapse. The following authorities sustain this view : Shaffer v. Lee, 8 Barb. 415 ; Masterton v. Mayor of Brooklyn, 7 Hill, 61; Clark v. Mayor of N. Y., 4 N. Y. (4 Comst.) 343 ; Eoyalton v. B. and W. Turnpike Co., 14 Vt. 311 ; Derby v. Johnson, 21 Vt. 22; Jones v. Judd, 4 N. Y. 414; Phil, Wil. and Bait. B. B. Co. V. Howard, 13 Howard, U. S. 313, 314, 344; Fish V. Folley, 6 Hill, 55; Shannons. Comstock, 21 Wend. 460; Seaton V. Second Municipality of New Orleans, 3 La. Am. K. 45 ; Bogers V. Parham, 8 Cobb, Ga. 190; Planchi v. Colburn, 8 Bing. 15; Clossman v. Lacoste, 28 Eng. L. and Eq. 141. The case of Masterton v. Mayor of Brooklyn, suprd, was similar in principle to this. The suit was for a breach of a contract, whereby the plaintiff covenanted to furnish for a specified price, all the marble required to build the city hall in the city of Brooklyn, to be delivered from time to time, as required by the superintendent, and paid for in instalments as the work pro- gressed. After the delivery of something over fourteen thousand feet, which was paid for, the defendants suspended the work, and like the defendants in this case, "refused to receive any more materials from the plaintiffs, though the latter were ready, and offered to perform." At the time of the suspension of the work, the entire quantity of marble remaining to be delivered, in order to fulfill the contraotj was about eighty-nine thousand feet. 564 DISCHARGE OF CONTRACT. [Part V. Plaintiff claimed, and, in an action for damages on the breach, ■was allowed to prove, against the objection of the defendants, the difference between the cost of furnishing the marble and the contract price. This ruling presented one of the questions for determination on appeal, and it was decided in favor of the plaintiff. Mr. Chief Justice Nelson, in discussing the question, says: " When the contract, as in this case, is broken before the arrival of the time for full performance, and the opposite party elects to consider it in that light, the market price on the day of the breach is to govern in the assessment of damages. . . . U there was a market value of the article in this case, the question would be a simple one. As there is none, however, the parties will be obliged to go into an inquiry as to the actual cost of furnishing the article at the place of delivery." 7 Hill, 71, 72. And this is what was done in the case now under considera- tion. And Mr. Justice Beardsley says : " The plaintifEs were not bound to wait till the period has elapsed for the complete performance of the agreement, nor to make successive ofEers of performance in order to recover all their damages. They might regard the contract as broken up, so far as to absolve them for making further efforts to perform, and give a right to recover full damages, as for a total breach." Id. 75. In the case of the Town of Royalton \. B. & W. Turnpike Co., there was a contract, by the terms of which the defendant cov- enanted to support and keep in repair for the term of twenty years a bridge which the plaintiff was bound to maintain, in con- sideration of which the plaintiff covenanted to pay the defendant the sum of twenty-five dollars per annum for the entire period of time. The defendant supported the bridge for a period of eight years, and then committed a breach by suffering it to go to decay, and refusing to support it longer. The suit was upon the con- tract for the breach, and it was held that the plaintiff was entitled to recover full damages, covering the entire twelve years yet unexpired, at the time of the commencement of the suit. The court, by Redfield, J., say : " The rule of damages in this case should have been to give the plain- tiffs the difference between what they were to pay the defendant and the Chap. III. § 2.] BY BREACH. 565 probable expense of performing the contract, and thus assess the entire damages for the remaining twelve years." 14 Vt. 324. So in Phil, Wil. and Bait. B. B. Co. v. Howard, upon a contract for grading and doing certain work on a railroad, in which it was provided that "in case the party of the second part at any time be of opinion that this contract is not duly complied with by the party of the first part, or that it is not in due progress of execu- tion, or that the said party of the first part is irregular or negli- gent, then and in such case he shall be authorized to declare this contract forfeited, and thereupon the same shall be null." 13 How. 319. Subsequently, on the statement of the engineer that the contract was "not in due progress of execution," after recit- ing that the party of the first part had not complied with the contract, it was by the company " resolved that the said contract be and the same is hereby declared to be forfeited." Id. 313. Plaintiff sued, and one of the breaches relied on was for " fraudu- lently declaring the contract forfeited, and thereby depriving plaintiff of the gains which would otherwise have accrued to him on the completion of the contract." Id. 313. The court in- structed the jury to the effect that if the company annulled the contract, not for the reasons stated, but for the purpose of having the remaining work done cheaper than the contract price, the plaintiff was entitled to recover damages for the loss of profit sustained by the refusal of the company to permit him to finish the work contracted to be performed. In considering the rule of damages, the Supreme Court, per Curtis, J., say: "Actual damages clearly include the direct and actual loss which plaintiff sustains propter rem ipsam non habiiam. And in case of a con- tract like this that loss is, among other things, the difference between the cost of doing the work and the price paid for it. This difference is the inducement and real consideration which causes the contractor to enter into the contract. For this he expends his time, exerts his skill, uses his capital, and assumes the risks which attend the enterprise. And to de- prive him of it, when the other party has broken the contract, and unlaw- f'illy put an end to the work, would be unjust. There is no rule of law which requires us to inflict this injustice. . . . We hold it to be a clear rule that a gain or profit of which the contractor was deprived by the refusal of the company to allow him to proceed with and complete the work was a proper subject of damages." Id. 344. 566 DISCHABGE OF CONTRACT. [Part V. In Clark v. Mayor of New York (4 New York, 343) the court say: " But when the contract is terminated by one party against the consent of the other, the latter will not be confined to the contract price, but may bring his action for a breach of the contract, and recover as damages all that he may lose by way of profits in not being allowed to fulfill the contract; or he may waive the contract and bring his action on the common counts for work and labor generally, and recover what the work done is actually worth. But in the latter case, he will not be allowed to recover as damages anything for speculative profits, but the actual value of the work and materials must be the rule of damages. ... If the party seeks to recover more than the actual worth of this work, in a case where he is prevented from performing the entire contract, he must resort to his action directly upon the contract." And in Jones v. Judd (4 N. Y. 414) the court say : " If the performance had been arrested by the act or omission of the defendants, the plaintiff would have had his election to treat the contract as rescinded, and recover, on a quantum meruit, the value of his labor, or he might sue upon the agreement and recover for the work completed, according to the contract, and for the loss in profits or otherwise which he had sustained by the interruption." Now, what was done and what was said might be done in the cases cited, is precisely what was done in the case under con- sideration. The plaintiffs sued directly upon the contract, to recover the contract price for the lumber delivered and received, and directly upon the contract for the breach in declaring the contract at an end and refusing to take any more lumber under it. And the foregoing cases show that they may so sue and recover the whole damage sustained in consequence of the breach, without waiting for the time of performance to elapse or repeating an offer to perform from month to month, as the time for delivery arrives, and that the rule of damages upon the breach is the clear profit which the plaintiffs would have made, that is to say, the difference between the contract price and what it would have cost the plaintiffs to manufacture and deliver the lumber according to the terms of the contract. The cases cited by defendants are not in conflict with the authorities referred to in this opinion. Most of them do not touch the precise question, and are therefore not in point. Tte Chap. III. § 2.] BY BEEACH. 567 case of Rogers v. Parham (8 Cobb, 190) is against tbe respond- ents,, and sustains the views here taken. The same may be said of Oirard r. Taggart (5 S. & E. 19) so far as it bears upon the question. There was a sale of teas at auction, to be paid for in sixty, ninety, and one hundred and twenty days, the purchaser, on delivery of the teas, to give notes with approved indorsers.' The purchaser finally refused to take the teas or give the notes. Thereupon the vendor sold the teas again at a much lower price, and sued at once to recover the difference. In the language of the chief justice, the action was "special, on the breach of the contract." Upon the question as to when the action could be brought, and the measure of damages, Mr. Justice Gibson said : " The breach having put an end to every idea of further performance by either is a violation of the contract in all its parts, for which the seller may recover whatever damages he can prove he has sustained. The buyer, after having disaffirmed the sale, so far as he could by acts of his own, must not be permitted to treat the contract as still existing, for the pur- poses of being performed by him specifically. But the seller may, if he please, consider it existing only for the purpose of giving a remedy for the breach." 5 S. & R. 33. See also opinion of Mr. Justice Duncan in same case (Id. 543) ; also Derby et al. v. Johnson et al., 21 Vt. 22. Some principles stated in Fowler v. Armour (24 Ala. 194) seem to be favorable to respondents' view, but if so they are wholly against the current of authorities brought to our notice. In this case the difference between the contract price and cost of performance, or the clear profits upon the amount of lumber remaining undelivered, the court found to be $6304.79, which sum should have been added to the amount for which judgment was rendered. Judgment reversed, and the District Court directed to enter judgment upon the findings in accordance with the views expressed in this opinion.' 1 " When a party injured by the stoppage of a contract elects to rescind it, then, it is true, he cannot recover any damages for a breach of the contract, either for outlay or for loss of profits ; he recovers the value of his services actually performed as upon a quantum meruit. There is then no question of losses or profits. But when he elects to go for damages for the breach of the contiact, the first and most obvious damage to be shown is, the 668 DISCHARGE OF CONTRACT. [Pabt V. DEBBY etal. v. JOHNSON e( oZ. 21 VERMONT, 17. — 1848. Book account. Judgment for plaintiffs. Exceptions by de- fendants. Plaintiffs contracted to do the stone work, masonry and blast- ing on three miles of railroad, defendants to pay specified prices amount ■which he has been induced to expend on the faith of the contract, including a fair allowance for his own tinae and services. If he chooses to go further, and claims for the loss of anticipated profits, he may do so, sub- ject to the rules of law as to the character of profits which may be thus claimed. It does not lie, however, in the mouth of the party, who has voluntarily and wrongfully put an end to the contract, to say that the party injured has not been damaged at least to the amount of what he has been induced fairly and in good faith to lay out and expend (including his own services), after making allowance for the value of materials on hand; at least it does not lie in the mouth of the party in fault to say this, unless he can show that the expenses of the party injured have been extravagant, and unnecessary for the purpose of carrying out the contract. . . . " It is to be observed that when it is said in some of the books, that when one party puts an end to the contract, the other party cannot sue on the contract, but must sue for the work actually done under it, as upon a quan- tum meruit, this only means that he cannot sue the party in fault upon the stipulations contained in the contract, for he himself has been prevented from performing his own part of the contract upon which the stipulg,tions depend. But surely, the wilful and wrongful putting an end to a contract, and preventing the other party from carrying it out, is itself a breach of the contract for which an action will lie for the recovery of all damage which the injured party has sustained. The distinction between those claims under a contract which result from a performance of it on the part of the claimant, and those claims under it which result from being prevented by the other party from performing it, has not always been attended to. The party who voluntarily and wrongfully puts an end to a contract and prevents the other party from performing it, is estopped from denying that the injured party has not been damaged to the extent of his actual loss and outlay fairly incurred." — Mr. Justice Bradley in United States v. Behan, 110 U. S. 338, 345-7. See also Danforth v. Tennessee dbc. By. Co., 93 Ala. 614; Nichols V. S. S. Co., 137 N. Y. 471. That there may be such conduct on the part of the defendant as to warrant the plaintiff in rescinding the contract and recovering on a quantum meruit, and yet not warrant him in regarding the contract as renounced by the defendant so as to sustain an action for damages for a breach, see Wharton v. Winch, 140 N. Y. 287. Chap. III. § 2.] BY BREACH. 569 per cubic yard. After working a month, plaintiffs were di- rected by defendants to cease further work, and complied. Plaintiffs presented an account of days' labor and material furnished by them, which was allowed on the basis of reasonable value. Hall, J. It is insisted, in behalf of the defendants, that the request and direction of the defendants to the plaintiffs, to cease work and abandon the execution of the contract, is to be considered in the light of a proposition to the plaintiffs, which they were at liberty to accede to, or disregard, and that, having acquiesced in it by quitting the work, the contract is to be treated as having been relinquished by the mutual consent of the parties. But we do not look upon it in that light. The direction of the defendants to the plaintiffs to quit the work was positive and unequivocal; and we do not think the plaintiffs were at liberty to disregard it. In Clark v. Marsiglia (1 Denio, 317) it was held, that the employer, in a contract for labor, had the power to stop the completion of it if he chose, — subjecting himself thereby to the consequences of a violation of his contract; and that the workman, after notice to quit work, had not the right to continue his labor and claim pay for it. And this seems to be reasonable. For otherwise the employer might be entirely ruined, by being compelled to pay for work, which an unexpected change of circumstances, after the employment, would render of no value to him. If, for instance, in this case the location ,of the rail- road had been changed from the place where the work was contracted to be done, or if the plaintiffs' [defendants'?] em- ployers had become wholly insolvent after the making of the contract, the injury to them, if they had no power to stop the work, might be immense and altogether without remedy. Bather than an injury so greatly disproportioned to that which could possibly befall the workman should be inflicted on the employers, it seems better to allow them to stop work, taking upon themselves, of course, all the consequences of such a breach of their contract. Such, we think, is and ought to be the law. We are therefore satisfied that the plaintiffs were prevented from executing their contract by the act of the defendants, 570 DISCHARGE OF CONTRACT. [Part V. and that the contract is not to be treated as having been mutually relinquished. Treating the plaintiffs as having been prevented from execut- ing their part of the contract by the act of the defendants, we think the plaintiffs are entitled to recover, as upon a quantum meruit, the value of the services they had performed under it, without reference to the rate of compensation specified in the contract. They might doubtless have claimed the stipulated compensation, and have introduced the contract as evidence of the defendants' admission of the value of the services. And they might, in addition, in another form of action, have re- covered their damages for being prevented from completing the whole work. In making these claims the plaintiffs would be acting upon the contract as still subsisting and binding; and they might well do so; for it doubtless continued binding on the defendants. But we think the plaintiffs, upon the facts stated in the report of the auditor, were at liberty to consider the contract as having been rescinded from the beginning, and to claim for the services they had performed, without reference to its terms. The defendants, by their voluntary act, put a stop to the execution. of the work, when but a fractional part of that which had been contracted for had been done, and while a large portion of that which had been entered upon was in such an unfinished condition as to be incapable of being measured and its price ascertained by the rate specified in the contract. Under these circumstances, we think the defendants have no right to say that the contract, which they have thus repudiated, shall still subsist for the purpose of defeating a recovery by the plain- tiffs of the actual amount of labor and materials they have ' expended. In Tyson v. Doe (15 Vt. 571), where the defendant, after a part performance of a contract for delivering certain articles of iron castings, prevented the plaintiff from farther perform- ing it, the contract was held to be so far rescinded by the defend- ant as to allow the plaintiff to sustain an action on book for the articles delivered under it, although the time of credit for the articles, by the terms of the contract, had not expired. Chap. III. § 2.] BY BREACH. 571 The court in that case say, "that to allow the defendant to insist on the stipulation in regard to the time of payment, while he repudiates the others, would be to enforce a different contract from that which the parties entered into." The claim now made in behalf of the defendants, that the rate of compen- sation specified in the contract should be the only rule of recovery, would, if sustained, impose upon the plaintiffs a contract which they never made. They did, indeed, agree to do all the work of a certain description on three miles of road, at a certain rate of compensation per cubic yard; but they did not agree to make all their preparations and do but a sixteenth part of the work at that rate ; and it is not to be presumed that they would have made any such agreement. We are not there- fore disposed to enforce such an agreement against them. The case of Koon v. Greenman (7 Wend. 121) is much relied upon by the counsel for the defendants. In that case the plain- tiff had contracted to do certain mason work at stipulated prices, the defendant finding materials. After a part of the work had been done, the defendant neglecting to furnish materials for the residue, the plaintiff quit work and brought his action of general assumpsit. The court held he was not entitled to re- cover the value of the work, but only according to the rate specified. The justice of the decision is not very apparent; and it does not appear to be sustained by the authorities cited in the opinion, they being all cases, either of deviations from the contract in the manner of the work, or delays of performance in point of time. But that ease, if it be sound law, is dis- tinguishable from this in at least two important particulars. In that case the plaintiff was prevented from completing his contract by the mere negligence of the defendant; in this by his voluntary and positive command. In that case there does not appear to have been any difficulty in ascertaining the amount to which the plaintiff would be entitled, according to the rate specified in the contract; whereas in this it is alto- gether impracticable to ascertain what sum would be due the plaintiffs, at the stipulated prices, for the reason that when the work was stopped by the defendants, a large portion of it 'was in such an unfinished state as to be incapable of measurement. 672 DISCHARGE OF CONTRAC'l. [Part V. That case is therefore no authority against the views we have already taken. . The judgment of the County Court is therefore aflSiimed.* CLAEK V. MARSIGLIA. 1 DENIO (N. Y.), 317. — 1845. Assumpsit for work, labor, and material. Plea, non-assumpsit. Judgment for plaintiff. Defendant brings error. Defendant delivered a number of paintings to plaintiff to be cleaned and repaired at a specified price for each. After plain- 1 " When the contract is terminated by one party against the consent of the other, the latter will not be confined to the contract price, but may bring his action for a breach of the contract, and recover as damages all that he may lose by way of profits in not being allowed to fulfill the contract ; or he may waive the contract and bring his action on the common counts for work and labor generally, and recover what the work done is actually worth. . . . If the party seeks to recover more than the actual worth of his work, in a case where he has been prevented from performing the entire contract, he must resort to his action directly upon the contract ; but when he elects to consider the contract rescinded, and goes upon quantum, meruit, the actual value is the rule of damages." — Pratt, J., in Clark v. Mayor, 4 Comstock (4N. Y.), 338. Contra: Doolittle v. McCullough, 12 Ohio St. 360, where it is held that the plaintiff suing in quantum meruit is restricted in his recovery to the contract rate, and Clark v. Mayor is criticised. "Where the work is performed on the plaintiff's own material, in which the defendant has no interest, it would seem that the only remedy is on the special contract in an action for damages for breach. Hosmer v. Wilson, 7 Mich. 294. In cases where the plaintiff has fully performed his part of the contract, but the defendant refuses to perform his, the value of what the defendant promised (money, property, or services), and not the value of the plaintiff's services or property, is the measure of the recovery. Bradley v. Levy, 5 Wis. 400 ; Anderson v. Bice, 20 Ala. 239 ; Porter v. Dunn, 61 Hun, 310 ; S. C. 131 N. Y. 314. Contra: Hudson v. Hudson, 87 Ga. 678, where the court says: "It seems the fairest and best way of adjusting these matters is to allow the son to recover of the administrator, upon a quantum meruit, the actual value of his services, but the amount must in no event exceed the value of the home place" [promised]. A fortiori, the plaintiff cannot re- cover for part performance an amount in excess of that stipulated for full performance. McClair v. Austin, 17 Col. 576. Chap. III. § 2.] BY BREACH. 573 tiff had begun work on them defendant directed him to stop, but plaintiff persisted and claims to recover for the whole. The court charged that as plaintiff had begun the work, he had a right to finish and defendant could not revoke the order. Per Curiam. The question does not arise as to the right of the defendant below to take away these pictures, upon which the plaintiff had performed some labor, without payment for what he had done, and his damages for the violation of the contract, and upon that point we express no opinion. The plaintiff was allowed to recover as though there had been no countermand of the order; and in this the court erred. The defendant, by requiring the plaintiff to stop work upon the paintings, violated his contract, and thereby incurred a liability to pay such damages as the plaintiff should sustain. Such damages would include a recompense for the labor done and materials used, and such further sum in damages as might, upon legal princi- ples, be assessed for the breach of the contract; but the plaintiff had no right, by obstinately persisting in the work, to make the penalty upon the defendant greater than it would otherwise have been. To hold that one who employs another to do a piece of work is bound to suffer it to be done at all events, would sometimes lead to great injustice. A man may hire another to labor for a year, and within the year his situation may be such as to render the work entirely useless to him. The party employed cannot persist in working, though he is entitled to the damages conse- quent upon his disappointment. So if one hires another to build a house, and subsequent events put it out of his power to pay for it, it is commendable in him to stop the work, and pay for what has been done and the damages sustained by the contractor. He may be under a necessity to change his residence; but upon the rule contended for, he would be obliged to have a house which he did not need and could not use. In all such cases the just claims of the party employed are satisfied when he is fully recompensed for his part performance and indemnified for his loss in respect to the part left unexecuted; and to persist in accumulating a larger demand is not consistent with good faith 674 DISCHAEGE OF CONTRACT. [Part V. towards the employer. The judgment must be reversed, and a venire de novo awarded. Judgment reversed.* (iv.) Impossibility created by one party in the course of per- formance. WOODBERRY v. WARNER. 53 ARKANSAS, 488. —1890. Action upon a quantum meruit for services. Judgment for plaintiff. Defendant appeals. Defendant was the owner of a steamboat, the Allen, and on January 1, 1886, employed plaintiff as pilot, agreeing to pay him $720 a year, and, when the net earnings of the boat should amount to $8000, to make over to him a foiirth interest in the 1 Accord : Dillon v. Anderson, 43 N. Y. 231 ; Butler v. Butler, 77 N. Y. 472 ; Moline Scale Co. v. Beed, 52 la. 307 ; City of Nebraska v. Nebraska &c. Coke Co., 9 Neb. 339; Davis v. Branson, 2 N. Dak. 300; Tufts v. Lawrence, 77 Tex. 526. "The person who has not broken his part of the compact may, at his option, extend to the person who has signified his purpose to violate the agreement, an opportunity for repentance, measured by the time to elapse between the refusal to perform and the 'date when performance is to com- mence. . . . The party keeping the contract need not mitigate the damages by treating as final a premature repudiation thereof ; but this is far from establishing the proposition that he may increase the amount to be paid by the other party by completing the contract after notice of repudiation, made on the day of performance, or made before that day, and never withdrawn, but, on the contrary, constantly insisted upon down to and including that day. . . . The question in all cases is whether one party has prevented performance by the other party at the time when performance by him is due. This can be done as well by preventing the taking of those preliminary steps, without which the final step cannot be taken, as by preventing the taking of such final step. These preliminary steps must often precede by many days the time of performance, and it therefore must follow that notice of refusal to carry out the contract, in such a case, given before the time of perform- ance, win operate as a breach of the contract in case the time has arrived at which the person willing to keep the contract may enter upon the work under the contract." — Corliss, C. J., in Davis v. Branson, 2 N. Dak. 300. See also for the distinction between repudiation before the time for perform- ance begins and repudiation after such time, Kadish v. Young, 108 HI. 170 ; HoebHng's Sons' Co. v. Lock Stitch Fence Co., 130 111. 660. Chap. III. § 2.] BY BREACH. 575 boat. A few months later defendant bought another boat which he ran in opposition to the Allen, thus reducing her profits. On May 31, 1888, defendant sold the Allen without plaintiff's consent, and before she had earned the net profits specified in the contract. Plaintiff claimed his services were worth f 1000 a year, or $280 a year more than he had received. Defendant contended that plaintiff could not sue in quantum meruit, but must sue for breach of contract and recover as damages the value of one-fourth of the boat at such time as her net earnings should have amounted to $8000. Per Curiam. 1. The defendant having put it beyond his power to perform the contract according to its terms, the plain- tiff was entitled to recover the value of his services over and above the amount he had received under the contract. 2. The terms of the contract, as alleged in the complaint, required the defendant to devote his personal services to the business of the steamer Allen. As the bill of exceptions does not purport to set forth the substance of all the testimony, the verdict is conclusive that the contract was such as the plaintiff alleged. Evidence therefore was admissible which tended to show that the defendant's conduct in devoting his services to another steamer decreased the earnings of the Allen, and thereby prevented the plaintiff from earning the interest in the Allen called for by the contract. No other questions are argued by counsel, and there being no error as to these, the judgment is affirmed.' 1 In Doolittle v. McCullough (12 Ohio St. 360) the plaintiff had been paid the full contract price for the portion performed, and it was held that he could not, after the defendant repudiated the contract, sue in quantum meruit to recover the value of his services, but must sue as for a breach of contract. The court says : " It is certain that where there has been a part performance, and that part paid for, under the contract, according to its terms, and the contract has then been terminated wrongfully by the party so having paid, it cannot be that the termination of the contract occasions damage or gives any right of action to the other party in regard to the part so performed and paid for under the contract. The damage in such a case, if any, arises frohi wrongfully precluding the other party from performing and receiving pay for that part of the contract unperformed on his part." — p. 368. See also Lynch v. Sellers, 41 La. An. 375 ; Marquis v. Lauretson, 76 la. 23. 676 DISCHARGE OF CONTRACT. [Pakt V. (v.) Breach by failure of performance. a. Absolute promises and concurrent conditions. NORTHEUP V. jSTORTHEUP. 6 COWEN (N. Y.), 296. — 1826. Declaration on covenant. Demurrer to plea, and joinder. Defendant covenanted to pay certain rent due and in arrears on a certain farm, to one Tomlinson, and to pay all that should become due on March 26, 1825, the whole to be paid on that day. Plaintiff covenanted, that on defendant's so paying the rent, he, plaintiff, would give up and discharge a certain bond and mortgage. The action was for the non-payment of the rent. Defendant pleaded that plaintiff did not, on March 25, give up and discharge the bond and mortgage, nor tender nor offer to do so, on that day, or before, or since. Savage, C. J. The plea is bad. The payment of the money to Tomlinson, on the day specified, is clearly a condition prece- dent. The performance by the plaintiff of his part of the agreement is not necessarily simultaneous; but was naturally to be subsequent. A general averment of his readiness to per- form is all that can be necessary or proper. To aver a tender was certainly not necessary. Lord Mansfield, in Jones v. Barkley (Doug. 690), makes three classes of covenants. 1. Such as are mutual and independent, where separate actions lie for breaches on either side. 2. Cove- nants which are conditions, and dependent on each other, in which the performance of one depends on the prior performance of the other. 3. Covenants which are mutual conditions to be performed at the same time, as to which the party who would maintain an action must, in general, offer or tender performance. I consider the plaintiff's covenant as clearly belonging to the second class. The defendant's covenant was absolute. The cases cited by the defendant's counsel relate to the third class. The plaintiff must have judgment, with leave to the defendant to amend on payment of costs. Judgment foi the plaintiff.' 1 See Dodge v. McClintock, 47 N. H. 383 ; Clough v. Saker, 48 N. H. 254 ; Loud V. Pomona Land and Water Co., 153 U. S. 564; Gould v. Brown, 6 Ohio St. 538. Chap. HI. § 2.] BY BREACH. 577 McRAVEN V. CEISLER. 53 MISSISSIPPI, 642. — 1876. Action on a note for the purchase price of land. Demurrer to plea sustained. Chalmees, J. The suit -was upon a note for $3840 given by the appellant to the appellee's intestate for the purchase money of a tract of land. The note undertook to recite the land for the price of which it was executed, but the land was misdescribed. This being discovered by the payee some months after its execu- tion, he took it to one Harris, who had acted as draughtsman for both parties in drawing it, and procured him to interline and alter it, so as properly to describe the land. In suing upon the note, several counts were laid in the declara- tion : 1. Upon the note ; 2. Upon a special contract to pay the sum agreed upon, and a delivery and retention of possession of the land thereunder; 3. The common counts for money paid out and expended, etc. To the count upon the note there was a plea of non est factum under oath; and the view which we take of this count and the plea thereto renders an examination of the subsequent pleadings unnecessary, in so far as they relate to an ultimate right of recov- ery. We doubt whether the alteration in the description of the land was a material alteration of the note, and, if not, of course the latter was not affected by it. Bridges v. Winters, 42 Miss. 135. But even if it be deemed a material alteration, we think it is equally clear that it did not vitiate the note. It was but the correction of a mistake so as to conform the note to the intention of both the parties to it, and it was made in such manner as clearly to negative any fraud upon the part of the payee, or any intention to obtain an advantage. That under these circum- stances alterations in notes will not vitiate them, we think, is well settled. The only questions in such cases are, Does the alteration actually conform to the true intention of both parties to the instrument? and was it honestly made to correct the mis- take, and with no intent of procuring an advantage? Where these questions are answered in the affirmative, the law will pre- 678 DISCHARGE OF CONTRACT. [Pabt V. sume or dispense with, the assent of the maker of the note to its alteration. 2 Parsmis on Bills and Notes, 569, 670; Ghitty on Bills and Notes, 184, 185; Bayley on Bills and Notes, 90; Kershaw V. Cox, 3 Esp. 246; Knill v. Williams, 10 East, 431; Brutt v. Picard, Ey. & Mood. 37; Clute v. Small, 17 Wend. 238; Hervey V. Harvey, 15 Me. 357; Bowers v. Jewell, 2 N". H. 643; Boyd t. Brotherson, 10 Wend. 93. The point was ruled otherwise in Miller v. Gilleland (19 Penn. St. 119) by a divided court; but we think the dissenting opinion of Justices Lowrie and Woodward (to be found in 1 Am. Law Beg. 672) enunciates the sounder doctrine, both upon reason and authority. The judgment in the case at bar is therefore maintainable upon the first count in the declaration. By the defendant's sixth plea she averred "that the original note was given by her in consideration that the plaintiff would sell and convey to her by proper deed of conveyance the land," etc. ; and that no deed had been tendered before suit brought. A deed was filed with the declaration, which, by the judgment of the court, was ordered to remain on file, and be delivered on payment of the judgment. Was there any obligation to tender it before the institution of the suit? There was no written con- tract to convey the land, nor any proof of a parol promise to do so. The question must therefore be tested by the averments of the plea. It will be observed that there is no allegation that the deed was to be made at or before the payment of the note, nor is any time specified when the execution of the deed was to take place. The note was payable one day after date. While it is true that the courts will hold the covenant to pay and the covenant to make title as dependent, unless a contrary intention clearly appears, it is no less true that the covenants must be regarded as inde- pendent, where the time of payment precedes the time fixed for delivering the deed, or where no time for making title is speci- fied. Gibson v. Newman,! How. (Miss.) 341; Leftwich v. Coleman, 3 How. (Miss.) 167; Rector v. Price, 3 How. (Miss.) 321; Bobinson v. Harbour, 42 Miss. 795. The case of Gibson v. Newman, supra, was much like the one Chap. UI. § 2.] BY BREACH. 679 at bar. In that case, as in this, there was no written obligation to convey, and the question was determined by the language of the plea. There, as here, the plea failed to aver any period when the deed was to be made; and upon this ground the covenants were held to be independent. That case is cited and apprpved in Robinson v. Harbour, ubi supra, the latest authoritative exposi- tion of this court on the much-vexed question of dependent and independent covenants. The demurrer to the plea in the case at bar was properly sustained. Judgment affirmed. TRACY V. ALBANY EXCHANGE CO. 7 NEW YORK, 472.— 1852. Action for damages for breach of a covenant to renew a lease. Judgment for plaintiff. Defendant appeals. Jewett, J. . . . As to the objection made by the defendant that there was rent in arrears, and therefore the plaintiff was not entitled to a further lease, the covenant being independent, the liability of the defendant for the breach of the covenant in ques- tion remained. The payment of the rent was not a condition precedent to the right of the plaintiff to a renewal of the lease under the covenant, and he might bring his action for a breach of it, although he was guilty of a default in the payment of his rent or performance of his convenant. Dawson v. Dyer, 5 Barn. & Adol. 584. . . . Judgment affirmed. HAMILTON V. HOME INS. CO. 137 UNITED STATES, 370. — 1890. [Quoted herein at p. 858 n.] 580 DISCHARGE OF CONTRACT. [Pabt V. HILL V. GEIGSBY et (d. 36 CALIFORNIA, 656. — 1868. Action upon nine promissory notes made jointly by defendants to plaintiff. Defense, that plaintiff, as a consideration for said notes, agreed to convey to defendants a half interest in certain prt^rty ; that the amount sued for was the whole purchase money remaining unpaid; that before the commencement of the action plaintiff had conveyed the property to another, and had not offered to perform by tendering a deed of the property to defendants. On motion the court struck out the answer. Judgment for plain- tiff. Defendants appeal. Rhodes, J. The leading question is, whether plaintiff is entitled to recover upon certain promissory notes representing the unpaid portion of the purchase money for certain real estate, sold by the plaintiff to defendants, without conveying or offering to convey the property. The solution of the question depends upon the construction to be given to the bond or covenant of the plaintiff. The bond, after reciting the purchase and the terms of payment, proceeds as follows : " Now, therefore, the said Hill agrees and binds himself, on condition that the said Grigsby and Smittle shall pay the sum of $18,000, less 88200 heretofore paid, with interest, as aforesaid, to execute and deliver to the said Smittle and Grigsby a good deed, conveying all his right, title, and interest of, in, and to the one undivided half interest in said mill and premises herein as aforesaid, which, if he shall well and truly do, the above obligation to be null and void and of no effect ; otherwise the above obligation to be and remain in full force and effect. The said deed to be executed by the said Hill as soon as the full sum of $18,000 and interest, as above provided, is paid, and to be sufficient to convey to said Grigsby and Smittle one undivided half interest in and to said mill, free from all incumbrance." In the first clause the plaintiff covenants to convey on condi- tion that the defendants pay the price. These acts were plainly intended to be simultaneous, that is to say, the payment in full and conveyance. The words "on condition" are susceptible of no other interpretation. The second clause was added as if to put the matter beyond question. There the covenant is, to con- Chap. IU. § 2.] BY BREACH. 581 vey as soon as the full sum is paid. Tlie conveyance must, of necessity, be executed concurrently with or before payment in full, or it will not be executed as soon as such payment is made. Neither argument nor illustration will make the meaning of the covenants in respect to the time for their performance more apparent. "When the meaning of the terms employed in the covenants is ascertained, the application of the rules of law governing the performance of the covenants is not diflBcult. In a contract for the sale of real estate, where the purchaser covenants to pay the purchase money, and the vendor covenants to convey the premises at the time of payment, or upon the time of payment of the money, or as soon as it is paid, — and they all mean the same thing, — the covenants are mutual and dependent, and neither can sue without showing a performance, or an offer to perform, on his part; and performance, or the offer to perform, on the one part, is a condition precedent to the right to insist upon a per- formance on the other part. Barron v. Frink, 30 Cal. 488. When the purchase money is payable in instalments, and the conveyances to be executed on the last day of payment, or upon the payment of the whole price, or at any previous day, the covenants to pay the instalments falling due before the time appointed for the execution of the conveyance are independent covenants, and suit may be brought thereon without conveying or offering to convey. The covenants to pay the instalments falling due on or after the day appointed for the conveyance are dependent covenants, and the vendor, in his suit to recover the same, whether he sues for those alone or joins instalments that became due before the time, must show a conveyance or offer to convey. In these respects, contracts of all kinds are governed by the same rule as covenants. Questions covering the greater portion, if not the entire ground occupied by those presented here, were considered at an early day in this court, and the decisions accord with the views here expressed. Osborne v. Elliott, 1 Cal. 33T; Folsom v. Bartlett,. ■2 Cal. 163. See also Barron v. FrinJc, 30 Cal. 486. It is very correctly said in Bank of Columbia v. Hagner (1 Pet. 455) that 682 DISCHARGE OF CONTRACT. [Pabt V. " in contracts of tliis description the undertakings of the respec- tive parties are always considered dependent unless a contrary intention clearly appears ; " and the reason assigned, as well as the rule, would be applicable here were the words of the covenant of doubtful import. "A difEerent construction would in many cases lead to the greatest injustice, and a purchaser might have payment of the purchase money enforced upon him, and yet be disabled from procuring the property for which he paid it." The authorities in support of these principles are very numerous, and there is a greater degree of uniformity among them than is usual on a question presented, as this has been, in so many different aspects. Pordage v. Cole, 1 Wm. Saund. 320; Jones v. Gardner, 10 Johns. 266; Oazley v. Price, 16 Johns. 267; Parker v. Par- mele, 20 Johns. 130; Williams v. Healey, 3 Den. 367; Johnson v. Wygant, 11 Wend. 48; Bean v. Atwater, 4 Conn. 3; Lester v. Jewett, 11 N. Y., 1 Kern., 453; Hunt v. Livermore, 5 Pick. 396; Kane v. Hood, 13 Pick. 281 ; 1 Pars, on Cont. 42 ; 2 Smith L. C. 17. « » * * * It is unnecessary to consider the remaining questions, because if the plaintiff had not delivered or tendered the conveyance according to his covenant, he cannot prevail in the action. We are of opinion that the portion of the answer setting up the contract of sale, and alleging the failure of the plaintiff to convey, or offer to convey, to the defendants the interest in the premises sold to them, is a good defense to the action, and that the order striking it out was erroneous. Judgment reversed, and cause remanded for further pro- ceedings.* BRUSIE V. PECK BEOS. & CO. 14 UNITED STATES APPEALS, 21. — 1893. Action at law to recover the amount of royalties alleged to be due for the manufacture of sprinklers. Judgment for defendant. Plaintiff brings error. i Accord: Kane v. Hood, 13 Pick. 281 ; Seecher v. Conradt, 13 N. Y. 108 ; Bunkle v. Johnson, 30 111. 328 ; BoUnson v. Harbour, 42 Miss. 795 ; ' V. Davis, 116 N. Y. 247. Cf. Loud V. Pomona Land and Water Co., 153 U. S. 584. Chap. III. § 2.] BY BREACH. 583 Plaintiff granted defendant the exclusive right to manufacture and sell a lawn sprinkler patented by plaintiff, the defendant agreeing to pay plaintiff a royalty of two dollars for each sprinkler, and not to sell them for less than fifteen dollars, except by joint agreement, and to manufacture sprinklers for plaintiff at a profit of twenty-five per cent on the cost, which plaintiff might sell in competition with defendant. Differences arising between the parties, plaintiff forbade defendant to manu- facture the sprinklers and himself began to manufacture and sell them. The court charged that if the plaintiff, without any justifica- tion arising from the previous conduct of the defendant, entered upon the market as a competitor with it in making and selling the sprinklers, he was not entitled to recover, and submitted to the jury whether plaintiff violated the contract without justifica- tion arising from defendant's non-performance. Shipman, Cibouit Judge. . . . This part of the case de- pends upon the question whether the respective undertakings of the two parties to the contract shall be construed to be inde- pendent, so that a breach by one party is not an excuse for a breach by the other, and either party may recover damages for the injury he has sustained, or are dependent so that a breach by one relieves the other from the duty of performance. King- ston V. Preston, Doug. 689. "Where the agreements go to the whole of the consideration on both sides, the promises are dependent, and one of them is a condition precedent to the other. If the agreements go to a part only of the consideration on both sides, and a breach may be paid for in damages, the promises are so far independent." 2 Parsons on Contracts (8th ed.), 792. By the contract which is the foundation of this suit Brusie granted to the defendant the sole and exclusive right to manufact- ure the patented sprinkler, and the sole right to sell, except that Brusie could sell sprinklers manufactured by the defendant, paying it twenty-five per cent profit upon the cost of such manu- facture. The defendant promised to manufacture sprinklers of good material, to use its best endeavors to introduce the same, to pay a royalty of two dollars upon each machine sold, and not to sell below fifteen dollars, unless the price was changed by joint 684 DISCHARGE OF CONTRACT. [Part V. agreement. Brusie having manufactured and sold at reduced prices, calls upon the defendant to pay a royalty of two dollars upon every machine -which it sold, and to recover damages for his own violation of the contract in a separate action. The contention of the plaintiff would have weight, if Brusie's fulfillment of his part of the contract had not been vital to the ability of the defendant to fulfill any part of its contract. The plaintiff bound the defendant not to sell at a price less than fifteen dollars, unless the price should be changed by joint agreement. He thereby impliedly promised that the price imposed upon the defendant should be maintained, unless altered by joint consent. The defendant's ability to pay the royalty depended upon Brusie's abstinence from competition at reduced prices. He could not become, as he did, the defendant's active competitor, lower prices without consent, and still compel the defendant to sell at not less than fifteen dollars, and pay a royalty of two dollars per machine. This breach by Brusie of his undertakings, when found to be unjustifiable by reason of any previous conduct of the defendant, relieved it from the obligation which it had assumed. There i^as no error in the charge, and the judgment of the Circuit Court is Affirmed. b. Divisible promises and virtual failure of consideration, (a) Divisible promises. NOREINGTON v. WEIGHT et al. 115 UNITED STATES, 188. — 1885. Action of assumpsit. Judgment for defendants. Plaintiff brings error. The action was on the following contract : "PhUadelphia, January 19, 1880. Sold to Messrs. Peter Wright & Sons, for account of A. Norrington & Co., London : Five thousand (5000) tons old T iron rails, for shipment from a European port or ports, at the rate of about one thousand (1000) tons per month, beginning February, 1880, but whole contract to be shipped before August 1st, 1880, at forty- five doUars ($45.00) per ton of 2240 lbs. custom-house weight, ex ship Chap. III. § 2.] BY BREACH. 586 Philadelphia. Settlement cash on presentation of bills accompanied by- custom-house certificate of weight. Sellers to notify buyers of shipments ■with vessels' names as soon as known by them. Sellers not to be com- pelled to replace any parcel lost after shipment. Sellers, when possible, to secure to buyers right to name discharging berth of vessels at Phila- delphia. " Edward J. Etting, Metal Broker.'' Plaintiff shipped under this contract 400 tons by one vessel in the last part of February, 885 tons by two vessels in March, 1571 tons by five vessels in April, 850 tons by three vessels in May, 1000 tons by two vessels in June, and 300 tons by one vessel in July, and notified defendants of each shipment. Defendants received and paid for the February shipment upon its arrival in March, but on May 14, about the time of the arrival of the March shipment, having learned of the amounts shipped in February, March, and April, gave written notice that they should decline to receive the shipments made in March and April because they were not in accordance with the contract. On June 10, plaintiff offered defendants a delivery of exactly 1000 tons, which was declined. At the trial, the plaintiff contended, 1st. That under the con- tract he had six months in which to ship the 5000 tons, and any deficiency in the earlier months could be made up subsequently, provided that the defendants could not be required to take more than 1000 tons in any one month. 2d. That, if this was not so, the contract was a divisible contract, and the remedy of the defendants for a default in any month was not by rescission of the whole contract, but only by deduction of the damages caused by the delays in the shipments on the part of the plaintiff. But the court instructed the jury that if the defendants, at the time of accepting the delivery of the cargo paid for, had no notice of the failure of the plaintiff to ship about 1000 tons in the month of February, and immediately upon learning that fact gave notice of their intention to rescind, the verdict should be for them. The plaintiff excepted to this instruction, and, after verdict and judgment for the defendants, sued out this writ of error. Mr. Justice Gray. In the contracts of merchants, time is of the essence. The time of shipment is the usual and conven- 586 DISCHARGE OF CONTRACT. [Paet V. lent means of fixing the probable time of arrival, witb a view of providing funds to pay for the goods, or of fulfilling contracts with third persons. A statement descriptive of the subject matter, or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty, in the sense in which that term is used in insurance and maritime law, that is to say, a condition precedent, upon the failure or non-perform- ance of which the party aggrieved may repudiate the whole contract. Behn v. Burness, 3 B. & S. 751; Bowes v. Shand, 2 App. Gas. 455; Loviber v. Bangs, 2 Wall. 728; Davison v. Von Lingen, 113 U. S. 40. The contract sued on is a single contract for the sale and purchase of 5000 tons of iron rails, shipped from a European port or ports for Philadelphia. The subsidiary provisions as to ship- ping in different months, and as to paying for each shipment upon its delivery, do not split up the contract into as many con- tracts as there shall be shipments or deliveries of so many distinct quantities of iron. Mersey Co. v. Naylor, 9 App. Gas. 434, 439. The further provision, that the sellers shall not be compelled to replace any parcel lost after shipment, simply reduces, in the event of such a loss, the quantity to be delivered and paid for. The times of shipment, as designated in the contract, are " at the rate of about 1000 tons per month, beginning February, 1880, but whole contract to be shipped before August 1, 1880." These words are not satisfied by shipping one-sixth part of the 5000 tons, or about 833 tons, in each of the six months which begin with February and end with July. But they require about 1000 tons to be shipped in each of the five months from February to June inclusive, and allow no more .than slight and unimportant deficiencies in the shipments during those months to be made up in the month of July. The contract is not one for the sale of a specific lot of goods, identified by independent circumstances, such as all those deposited in a certain warehouse, or to be shipped in a particular vessel, or that may be manufactured by the seller, or may be required for use by the buyer, in a certain mill — in which case the mention of the quantity, accompanied by the qualification of "about," or "more or less," is regarded as Chap. in. §2.] BY BREACH. 687 a mere estimate of tlie probable amount, as to which good faith is all that is required of the party making it. But the contract before us comes within the general rule : " When no such inde- pendent circumstances are referred to, and the engagement is to furnish goods of a certain quality or character to a certain amount, the quantity specified is material, and governs the contract. The addition of the qualifying words 'about,' 'more or less,' and the like, in such cases, is only for the purpose of providing against accidental variations, arising from slight and unimportant excesses or deficiencies in number, measure, or weight." Brawley v. United States, 96 U. S. 168, 171, 172. The seller is bound to deliver the quantity stipulated, and has no right either to compel the buyer to accept a less quantity, or to require him to select part out of a greater quantity ; and when the goods are to be shipped in certain proportions monthly, the seller's failure to ship the required quantity in the first month gives the buyer the same right to rescind the whole contract, that he would have had if it had been agreed that all the gpods should be delivered at once. The plaintiff, instead of shipping about 1000 tons in February and about 1000 tons in March, as stipulated in the contract, shipped only 400 tons in February, and 885 tons in March. His failure to fulfill the contract on his part in respect to these first two instalments justified the defendants in rescinding the whole contract, provided they distinctly and seasonably asserted the right of rescission. The defendants, immediately after the arrival of the March shipments, and as soon as they knew that the quantities which had been shipped in February and in March were less than the con- tract called for, clearly and positively asserted the right to rescind, if the law entitled them to do so. Their previous acceptance of the single, cargo of 400 tons shipped in February was no waiver of this right, because it took place without notice, or means of knowl- edge, that the stipulated quantity had not been shipped in Feb- ruary. The price paid by them for that cargo being above the market value, the plaintiff suffered no injury by the omission of the defendants to return the iron; and no reliance was placed on that omission in the correspondence between the parties. 688 DISCHABGE OF CONTRACT. [Past V. The case wholly differs from that of Lyon v. Bertram (20 How. 149), in which the buyer of a specific lot of goods accepted and used part of them with full means of previously ascertaining whether they conformed to the contract. The plaintiff, denying the defendants' right to rescind, and asserting that the contract was still in force, was bound to show such performance on his part as entitled him to demand perform- ance on their part, and, having failed to do so, cannot maintain this action. For these reasons, we are of opinion that the judgment below should be affirmed. But as much of the argument at the bar was devoted to a discussion of the recent English cases, and as a diversity in the law, as administered on the two sides of the Atlantic, concerning the interpretation and effect of commercial contracts of this kind, is greatly to be deprecated, it is proper to add that upon a careful examination of the cases referred to they do not appear to us to establish any rule inconsistent with our conclusion. In the leading case of Hoare v. Bennie (6 H. & N". 19), which was an action upon a contract of sale of 667 tons of bar iron, to be shipped from Sweden in June, July, August, and September, and in about equal portions each month, at a certain price payable on delivery, the declaration alleged that the plaintiffs performed all things necessary to entitle them to have the contract per- formed by the defendants, and were ready and willing to perform the contract on their part, and in June shipped a certain portion of the iron, and within a reasonable time afterwards offered to deliver to the defendants the portion so shipped, but the defendants refused to receive it, and gave notice to the plaintiffs that they would not accept the rest. The defendants pleaded that the shipment in June was of about 20 tons only, and that the plain- tiffs failed to complete the shipment for that month according to the contract. Upon demurrer to the pleas, it was argued for the plaintiffs that the shipment of about one-fourth of the iron in each month was not a condition precedent, and that the defend- ants' only remedy for a failure to ship that quantity was by a cross action. But judgment was given for the defendants. Chief Baron Pollock saying: Chap. in. § 2.] BY BREACH. 589 " The defendants refused to accept the first shipment, because, as they say, it was not a performance, but a breach of the contract. Where parties have made an agreement for themselves, the courts ought not to make another for them. Here they say that in the events that have hap- pened one-fourth shall be shipped in each month, and we cannot say that they meant to accept any other quantity. At the outset, the plaintiffs failed to tender the quantity according to the contract ; they tendered a much less quantity. The defendants had a right to say that this was no performance of the contract, and they were no more bound to accept the short quantity than if a single delivery had been contracted for. There- fore the pleas are an answer to the action." 5 H. If N. 28. So in Coddington v. Paleologo (L. E. 2 Ex. 193), while there was a division of opinion upon the question whether a contract to supply goods "delivering on April 17, complete 8th May," bound the seller to begin delivering on April 17, all the judges agreed that if it did, and the seller made no delivery on that day, the buyer might rescind the contract. On the other hand, in Simpson t. Crippin (L. R. 8 Q. B. 14), under a contract to supply from 6000 to 8000 tons of coal, to be taken by the buyer's wagons from the seller's colliery in equal monthly quantities for twelve months, the buyer sent wagons for only 150 tons during the first month; and it was held that this did not entitle the seller to annul the contract and decline to deliver any more coal, but that his only remedy was by an action for damages. And in Brandt v. Lawrence (1 Q. B. D. 344), in which the contract was for the purchase of 4500 quarters, ten per cent more or less, of Bussian oats, " shipment by steamer or steamers during February," or, in case of ice preventing shipment, then immediately upon the opening of navigation, and 1139 quarters were shipped by one steamer in time, and 3361 quarters were shipped too late, it was held that the buyer was bound to accept the 1139 quarters, and was liable to an action by the seller for refusing to accept them. Such being the condition of the law of England as declared in the lower courts, the case of Bowes v. Shand, after conflicting decisions in the Queen's Bench Division and the Court of Appeal, was finally determined by the House of Lords. 1 Q. B. D. 470; 2 Q. B. D. 112; 2 App. Cas. 455. In that case, two contracts were made in London, each for the 590 DISCHARGE OF CONTRACT. [Part V. sale of 300 tons of "Madras rice, to be shipped at Madras or coast, for this port, during the months of March ""/ April, 1874, per Eajah of Cochin." The 600 tons filled 8200 bags, of which 7120 bags were put on board and bills of lading signed in Feb- ruary; and for the rest, consisting of 1030 bags put on board in February, and 50 in March, the bill of lading was signed in March. A.t the trial of an action by the seller against the buyer for refusing to accept the cargo, evidence was given that rice shipped in February would be the spring crop, and quite as good as rice shipped in March or April. Yet the House of Lords held that the action could not be maintained, because the meaning of the contract, as apparent upon its face, was that all the rice must be put on board in March and April, ot in one of those months. In the opinions there delivered the general principles under- lying this class of cases are most clearly and satisfactorily stated. It will be sufficient to quote a few passages from two of those opinions. Lord Chancellor Cairns said: " It does not appear to me to be a question for your Lordships, or for any coturt, to consider whether that is a contract which bears upon the face of it some reason, some explanation, why it was made in that form, and why the stipulation is made that the shipment should be during these particular months. It is a mercantile contract, and merchants are not in the habit of placing upon their contracts stipulations to which they do not attach some value and importance." 2 App.Cas. 463. "If it be admitted that the literal meaning would imply that the whole quantity must be put on board during a specified time, it is no answer to that literal meaning, it is no observation which can dispose of, or get rid of, or displace, that literal meaning, to say that it puts an additional burden on the seller, without a corresponding benefit to the purchaser; that is a matter of which the seller and the purchaser are the best judges. Nor is it any reason for saying that it would be a means by which purchasers, without any real cause, would frequently obtain an excuse for rejecting contracts when prices had dropped. The nonfulfillment of any term in any contract is a means by which a purchaser is able to get rid of the contract when prices have dropped; but that is no reason why a term which is found in a contract should not be fulfilled." pp. 465, 466. "It was suggested that even if the construction of the contract be as I have stated, still if the rice was not put on board in the particular months, that would not be a reason which would justify the appellants in having rejected the rice altogether, but that it might afford a ground for a cross Chap. m. § 2.] BY BREACH. 691 action by them if they could show that any particular damage resulted to them from the rice not having been put on board in the months in question. My Lords, I cannot think that there is any foundation what- ever for that argument. If the construction of the contract be as I have said, that it bears that the rice is to be put on board in the months in question, that is part of the description of the subject matter of what is sold. What is sold is not 300 tons of rice in gross or in general. It is 300 tons of Madras rice to be put on board at Madras during the partic- ular months." "The plaintiff, who sues upon that contract, has not launched his case until he has shown that he has tendered that thing which has been contracted for, and if he is unable to show that, he cannot claim any damages for the nonfulfillment of the contract." pp. 467, 468. Lord Blackburn said: " If the description of the article tendered is different in any respect, it is not the article bargained for, and the other party is not bound to take it. I think in this case what the parties bargained for was rice, shipped at Madras or the coast of Madras. Equally good rice might have been shipped a little to the north or a little to the south of the coast of Madras. I do not quite know what the boundary is, and prob- ably equally good rice might have been shipped in February as was shipped in March, or equally good rice might have been shipped in May as was shipped in April, and I dare say equally good rice might have been put on board another ship as that which was put on board the Rajah of Cochin. But the parties have chosen, for reasons best known to them- selves, to say : We bargain to take rice, shipped in this particular region, at that particular time, on board that particular ship; and before the defendants can be compelled to take anything in fulfillment of that con- tract it must be shown not merely that it is equally good, laut that it is the same article as they have bargained for — otherwise they are not bound to take it." 2 App. Cos. 480, 481. Soon after that decision of the House of Lords, two cases were determined in the Court of Appeal. In Renter t. Sala (4 C. P. D. 239), under a contract for the sale of "about twenty-five tons (more or less) black pepper, October »S? November shipment, from Penang to London, the name of the vessel or vessels, marks and full particulars to be declared to the buyer in writing within sixty days from date of bill of lading," the seller, within the sixty days, declared twenty-five tons by a particular vessel, of which only twenty tons were shipped in November, and five tons in December; and it was held that the buyer had the right to 692 DISCHARGE OF CONTRACT. [Paet V. refuse to receive any part of the pepper. In Honck v. Muller (7 Q. B. D. 92), under a contract for the sale of 2000 tons of pig iron, to be delivered to the buyer free on board at the maker's wharf " in November, or equally over November, December, and January next," the buyer failed to take any iron in November, but demanded delivery of one-third in December and one-third in January; and it was held that the seller was justified in refusing to deliver, and in giving notice to the buyer that he considered the contract as canceled by the buyer's not taking any iron in November. The plaintiff in the case at bar greatly relied on the very recent decision of the House of Lords in Mersey Co. v. Naylor (9 App. Cas. 434), affirming the judgment of the Court of Appeal in 9 Q. B. D. 648, and following the decision of the Court of Common Pleas in Freeth v. Burr, L. R. 9 C. P. 208. But the point there decided was that the failure of the buyer to pay for the first instalment of the goods upon delivery does not, unless the circumstances evince an intention on his part to be no longer bound by the contract, entitle the seller to rescind the contract and to decline to make further deliveries under it. And the grounds of the decision, as stated by Lord Chancellor Sel- borne in moving judgment in the House of Lords, are applicable only to the case of a failure of the buyer to pay for, and not to that of a failure of the seller to deliver, the first instalment. The Lord Chancellor said: " The contract is for the purchase of 5000 tons of steel blooms of the company's manufacture ; therefore it is one contract for the purchase Of that quantity of steel blooms. No doubt there are subsidiary terms in the contract, as to the time of delivery, 'Delivery 1000 tons monthly commencing January next ; ' and as to the time of payment, ' Payment net cash within three days after receipt of shipping documents ; ' but that does not split up the contract into as many contracts as there shall be deliveries for the purpose, of so many distinct quantities of iron. It is quite consistent with the natural meaning of the contract, that it is to be one contract for the purchase of that quantity of iron to be delivered at those times and in that manner, and for which payment is so to be made. It is perfectly clear that no particular payment can be a condition prece- dent of the entire contract, because the delivery under the contract was most certainly to precede payment ; and that being so, I do not see how, without express words, it can possibly be made a condition precedent to ChAp. m. § 2.] BY BEEACH. 593 the subsequent fulfillment of the unfulfilled part of the contract, by the delivery of the undelivered steel." 9 App- Cas. 439. Moreoyer, although in the Court of Appeal dicta were uttered tending to approve the decision in Simpson v. Crippin, and to disparage the decisions in Eoare v. Rennie and Honck v. Muller, above cited, yet in the House of Lords Simpson v. Crippin was not even referred to, and Lord Blackburn, who had given the leading opinion in that case, as well as Lord Bramwell, who had delivered the leading opinion in Honck v. Muller, distinguished Hoare v. Rennie and Honck v. Muller from the case in judgment. 9 App. Cas. 444, 446. Upon a review of the English decisions, the rule laid down in the earlier cases of Hoare v. Rennie and Coddington v. Paleologo, as well as in the later cases of Renter v. Soda and Honck v. Muller, appears to us to be supported by a greater weight of authority than the rule stated in the intermediate cases of Simp- son V. Crippin and Brandt v. Lawrence, and to accord better with the general principles affirmed by the House of Lords in Bowes V. Shand, while it in nowise contravenes the decision of that tribunal in Mersey Co. r. Naylor. In this country there is less judicial authority upon the ques- tion. The two cases most nearly in point that have come to our notice are Hill v. Blake (97 N. Y. 216), which accords with Bowes v. Shand, and King Philip Mills v. Slater (12 E. I. 82), which approves and follows Hoare v. Rennie. The recent cases in the Supreme Court of Pennsylvania, cited at the bar, support no other conclusion. In Shinn v. Bodine (60 Penn. St. 182) the point decided was that a contract for the purchase of 800 tons of coal at a certain price per ton, "coal to be delivered on board vessels as sent for during months of August and September," was an entire contract, under which nothing was payable until delivery of the whole, and therefore the seller had no right to rescind the contract upon a refusal to pay for one cargo before that time. In Morgan v. McKee (77 Penn. St. 228) and in Scott v. Kittanning Coal Co. (89 Penn. St. 231) the buyer's right to rescind the whole contract upon the failure of the seller to deliver one instalment was denied, only because that right had been waived. 594 DISCHARGE OF CONTRACT. [Paet V. in the one case by unreasonable delay in asserting it, and in the other by having accepted, paid for, and used a previous instal- ment of the goods. The decision of the Supreme Judicial Court of Massachusetts in Winchester v. Newton (2 Allen, 492) resembles that of the House of Lords in Mersey Co. v. Naylor. Being of opinion that the plaintiff's failure to make such ship- ments in February and March as the contract required prevents his maintaining this action, it is needless to dwell upon the further objection that the shipments in April did not comply with the contract, because the defendants could not be compelled to take about 1000 tons out of the larger quantity shipped in that month, and the plaintiff, after once designating the names of vessels, as the contract bound him to do, could not substitute other vessels. See Busk v. Spence, 4 Camp. 329; Graves v. Legg, 9 Exch. 709; Beuter v. Sala, above cited. Judgment affirmed.* The Chief Justice was not present at the argument, and took no part in the decision of this case. ()3) Virtual failure of consideration. Note. — For cases illustrating virtual failure of consideration, see Pope v. Allis, 115 U. S. 363, post, p. 695 ; Wolcott v. Mount, 36 N. J. L. 262, post, p. 598 ; and other cases on " Conditions and Warranties." For total failure of consideration, see Gibson v. Pelkie, 37 Mich. 380, ante, p. 247. c. Conditions and warranties, or vital and subsidiary promises. (a) Condition, or vital promise. DAVISON V. VON LINGEN. lis UNITED STATES, 40. — 1885. [Beported herein at p. 265.] * "The reasoning of that case {Norrington v. Wright) seems to us accu- rate and decisive, and we follow it without hesitation." — Finch, J., in Pope V. Porter, 102 N. Y. 366, 371. Cf. Cahen v. Piatt, 69 N. Y. 348. Chap. in. § 2.] BY BREACH. 695 POPE et al. V. ALLIS. 115 UNITKD STATES, 363. — 1885. Action to recover back money paid for iron -which, on arrival, ■was rejected. Judgment for plaintiff (defendant in error). Plaintiff bought of defendants by description a quantity of "No. 1 extra pig iron" to be shipped from Coplay, Penn. On arrival plaintiff rejected the iron because it did not answer the description. Me. Justice Wood. . . . The assignment of error mainly relied on by the plaintiffs in error is that the court refused to instruct the jury to return a verdict for the defendants. The legal proposition upon which their counsel based this request ■was that the purchaser of personal property, upon breach of ■warranty of quality, cannot, in the absence of fraud, rescind the contact of purchase and sale, and sue for the recovery of the price. And they contended that, as the iron ■was delivered to defendant in error either at Coplay or Elizabethport, and the sale ■was completed thereby, the only remedy of the defends ant in error ■was by a suit upon the ■warranty. It did not appear that at the date of the contract the iron had been manufactured, and it was shown by the record that no particular iron was segregated and appropriated to the contract by the plaintiffs in error until a short time before its shipment, in the latter part of April and the early part of May. The defendant in error had no opportunity to inspect it until it arrived in Milwaukee, and consequently never accepted the particular iron appropriated to fill the contract. It was established by the verdict of the jury that the iron shipped was not of the quality required by the contract. Under these circumstances the contention of the plaintiffs in error is that the defendant in error, although the iron shipped to him was not what he bought, and could not be used in his business, was bound to keep it, and could only recover the difference in value between the iron for which he contracted and the iron which was delivered to him. We do not think that such is the law. When the subjec,t .matter of a sale is not in existence, or not ascertained at the 696 DISCHARGE OF CONTRACT, I^abtV, time of tlie contract, an undertaking that it shall, when existing or ascertained, possess certain qualities, is not a mere warranty, but a condition, the performance of which is precedent to any obligation upon the vendee under the contract; because the existence of those qualities being part of the description of the thing sold becomes essential to its identity, and the vendee can- not be obliged to receive and pay for a thing different from that for which he contracted. Chanter v. Hopkins, 4 Mees. &W. 399; Barr v. Gibson, 3 Mees. & W. 390; Oompertz v. Bartlett, 2 El. & Bl. 849; OJcell v. Smith, 1 Stark, N. P. 107; notes to Cutter V. Powell, 2 Smith's Lead. Gas. (7th Am. ed.) 37; WoocUe v. Whitney, 23 Wis. 65; Boothby v. Scales, 27 Wis. 626; Fairfield V. Madison Manuf'g Co., 38 Wis. 346. See also Nichol v. Godts, 10 Exch. 191. So, in a recent case decided by this court, it was said by Mr. Justice Gray: "A statement" in a mercan- tile contract "descriptive of the subject matter or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty in the sense in which that term is used in insurance and maritime law ; that is to say, a condition precedent upon the failure or non-performance of which the party aggrieved may repudiate the whole contract." Norrington v. Wright, 115 U. S. 188, 6 Sup. Ct. Eep. 12. See also FUley v. Pope, 115 U. S. 213, 6 Sup. Ct. Eep. 19. And so, when a contract for the sale of goods is made by sample, it amounts to an undertaking on the part of the seller with the buyer that all the goods are similar, both in nature and quality, to those exhibited, and if they do not correspond the buyer may refuse to receive them; or, if received, he may return them in a reasonable time allowed for examination, and thus rescind the contract. Lorymer v. Smith, 1 Barn. & C. 1; Magee v. Bil- Ungsley, 3 Ala. 679. The authorities cited sustain this proposition: that when a vendor sells goods of a specified quality, but not in existence or ascertained, and undertakes to ship them to a distant buyer, when made or ascertained, and delivers them to the carrier for the purchaser, the latter is not bound to accept them without examination. The mere delivery of the goods by the vendor to the carrier does not necessarily bind the vendee to accept Chap- in. § 2.] BY BREACH. 597 them. On their arrival he has the right to inspect them to ascertain whether they conform to the contract, and the right to inspect implies the right to reject them if they are not of the quality required by the contract. The rulings of the Circuit Court were in accordance with these views. We have been referred by the plaintiffs in error to the cases of Thornton v. Wynn (12 Wheat. 184) and Lyon v. Bertram (20 How. 149) to sustain the proposition that the defendant in error in this case could not rescind the contract and sue to recover back the price of the iron. But the Cases are not in point. In the firstj there was an absolute sale with warranty and delivery to the vendee of a specific chattel, namely, a race-horse; in the second, the sale was of a specified and designated lot of fiour which the vendee had accepted, and part of which he had used, with ample means to ascertain whether or not it conformed to the contract. The cases we have cited are conclusive against the contention, of the plaintiffs in error. The jury has found that the iron was not of the quality which the contract required, and on that ground the defendant in error, at the first opportunity, rejected it, as he had a right to do. His suit to recover the price was, therefore, well brought. Other errors are assigned, but, in our opinion, they present no ground for the reversal of the judgment, and do not require discussion. Judgment af&rmed. COPLAY IKON CO. v. POPE et al. 108 NEW YORK, 232.— 1888. Action to recover the price of iron. Defense, breach of warranty. Verdict directed for plaintiff. Defendants appeal. Plaintiff sold defendants by description "No. 1 extra foundry pig iron." Defendants resold it by description to AUis & Co., to whom, by defendants' directions, it was shipped by plaintifE. Allis & Co. refused to accept it because it was inferior to the 598 DISCHAEGE OF CONTRACT. [Pabt V. description. Defendants notified plaintiff that they should hold plaintiff liable for all damage sustained by the failure to deliver iron according to contract. Earl, J. . . . Treating this then as an executory contract of sale, the defendants are not in a position to complain of the quality of the iron, because they never offered to return it, and never gave the plaintiff notice or opportunity to take it back. They must therefore be conclusively presumed to have ac- quiesced in the quality of the iron. Hargous v. Stone,, 5 N. T. 73; Seed v. Randall, 29 Id. 358; McCormick, v. Sarson, 45 Id. 265; Dutchess Co. v. Harding, 49 Id. 323; Qaylord Mfg. Co. v. Allen, 53 Id. 515. Here there was no collateral warranty or agreement as to the quality of the iron. The representation as to the kind and quality of iron was part of the contract of sale itself, descriptive simply of the article to be delivered in the future ; and clearly within the cases cited, an acceptance of the property by the defendants, without any offer to return the same at any time, deprives them of any right to make complaint of its inferior quality. The judgment should be afBrmed with costs. All concur ex- cept Andrews, J., not voting. Judgment affirmed. WOLCOTT et al. v. MOUNT. 36 NEW JERSEY LAW, 262. — 1873-. Action for breach of warranty. Judgment for plaintiff. De- fendants appeal. Plaintiff purchased of defendants, who were retail merchants, a quantity of seed represented and believed by defendants to be early strap-leaf red-top turnip seed, plaintiff informing defend- ants that he wanted seed of that variety to raise a crop for the early New York market. In fact the seed was of a late variety, fit only for cattle, and plaintiff lost his entire crop. The dif- ference between the two kinds of seed cannot be discovered by inspection. DEPtTE, J. The action in this case was brought on a contract Chap. III. § 2.] BY BREACH. . 599 of warranty and resulted in a judgment against the defendants in the action for damages. Two exceptions to the proceedings are presented by the brief submitted. The first touches the right of the plaintifE to recover at all. The second, the measure of damages. I, In the absence of fraud or a warranty of the quality of an article, the maxim, caveat emptor, applies. As a general rule, no warranty of the goodness of an article will be implied on a contract of sale. It has been held by the courts of New York, that no warranty whatever would arise from a description of the article sold.; Seixas v. Woods, 2 Gaines, 48; Snell v. Moses, 1 Johns. 96; Swett V. Colgate, 20 Johns. 196. In these cases the defect was not in the quality, but the article delivered was not of the species described in the contract of sale. In the well-known case of Ghandelor v. Lopus (Cro. Jac. 4) it was decided that a bare affirmation that a stone sold was a bezoar stone, when it was not, was no cause of action. The cases cited fairly present the negative of the proposition on which the plaintiff's right of action depends. Chandelor v. Lopus was decided on the distinction between actions on the case in tort for a misrepresentation, in which a scienter must be averred and proved and actions upon the contract of warranty. 1 /Smith's Lead. Cas. 283. Chancellor Kent, who delivered the opinion in Seixas v. Woods, in his Commentaries, expresses a doubt whether the maxim, caveat emptor, was correctly applied in that case, inasmuch as there was a description in writing of the articles sold, from which a warranty might have been inferred. 2 Kent, 479. And in a recent case before the Com- mission of Appeals of New York, Earl, C, declared that Seixas V. Woods had been much questioned and could no longer be regarded as authority on the precise point. Hawkins v. Pember- ton, 51 N. Y. 204. In the later English cases some criticism has been made upon the application of the term " warranty " to reprer sentations in contracts of sale, descriptive of articles which are 600 DISCHARGE OF CONTRACT. [Pabt V. knoTvn in the market by such descriptions, per Lord Abinger in Chanter v. Hopkins, 4 M. & W. 404j per Erie, C. J., in Bannerman v. White, 10 C. B. (N. S.) 844. But in a number of instances it has been held that statements descriptive of the subject matter, if intended as a substantive part of the contract, will be regarded in the first instance as conditions, on the failure of which the other party may repudiate in toto, by a refusal to accept or a return of the article, if that be practicable, or if part of the consideration has been received, and rescission therefore has become impossible, such representations change their character as conditions and become warranties, for the breach of which an action will lie to recover damages. The rule of law is thus stated by Williams, J., in Behn v. Burness, as established on principle and sustained by authority. 3 B. & S. 755. In Bridge v. Wain (1 Starkie, 504) no special warranty was proved, but the goods were described as scarlet cuttings, an article known in the market as peculiar to the China trade. In an action for breach of warranty. Lord EUenborough held that if the goods were sold by the name of scarlet cuttings, and were so described in the invoice, an undertaking that they were such must be inferred. In Allan v. Lake (18 Q. B. 660) the defendant sold to the plaintiff a crop of turnips, described in the note sold as Skirving's Sweedes. The seed having been sown, it turned out that the greater part was not of that kind, but of an inferior kind. It was held that the statement that the seeds were Skirving's Sweedes, was a description of a known article of trade and a warranty. In Josling v. Kingsford (13. C. B. N. S. 447) the purchaser recovered damages upon a contract for the sale of oxalic acid, where the jury found that the article delivered did not, in a commercial sense, come properly within the description of oxalic acid, though the vendor was not the manufacturer, and the vendee had an opportunity of inspection (the defect not being discoverable by inspection), and no fraud was suggested. In Wieler v. Schilizzi (17 C. B. 619) the sale was of "Calcutta linseed." The goods had been delivered, and the action was in form on the warranty implied from the description. The jury having found that the article delivered had lost its distinctive character as Calcutta linseed, by reason of the admixture of Chap. HI. § 2.] BY BREACH. 601 foreign substance, the plaintiff recovered his damages upon the warranty. The doctrine that on the sale of a chattel as being of a particu- lar kind or description, a contract is implied that the article sold is of that kind or description, is also sustained by the following English cases: Powell v. Horton, 2 Bing. N. C. 668; Barr v. Qihson, 3 M. & W. 390; Chanter t. Hopkins, 4 M. & W. 399; mchol Y. Oodts, 10 Exch. 191; Gompertz v. Bartlett, 2 E. & B. 849; Azemar v. Gasella, Law Eep. 2 C. P. 431, 677; and has been approved by some decisions in the courts of this country. Henshaw v. Bobins, 9 Mete. 83; BorreJcins v. Bevan, 3 Eawle, 23; Osgood v. Lewis, 2 Harr. & Gill. 495; Hawkins v. Pember- ton, 51 N. Y. 198. The right to repudiate the purchase for the non-conformity of the article delivered, to the description under which it was sold, is universally conceded. That right is founded on the engage- ment of the vendor, by such description, that the article delivered shall correspond with the description. The obligation rests upon the contract. Substantially, the description is warranted. It will comport with sound legal principles to treat such engage- ments as conditions in order to afford the purchaser a more en- larged remedy, by rescission, than he would have on a simple warranty; but when his situation has been changed, and the remedy, by repudiation, has become impossible, no reason sup- ported by principle can be adduced, why he should not have upon his contract such redress as is practicable under the circum- stances. In that situation of affairs, the only available means of redress is by an action for damages. Whether the action shall be technically considered an action on a warranty, or an action for the non-performance of a contract, is entirely immaterial. The contract which arises from the description of an article on a sale by a dealer not being the manufacturer is not in all re- spects coextensive with that which is sometimes implied where the vendor is the manufacturer, and 'the goods are ordered by a particular description, or for a specified purpose, without oppor- tunity for inspection, in which case a warranty, under some cir- cumstances, is implied that the goods shall be merchantable, or reasonably fit for the purpose for which they were ordered. In 602 DISCHARGE OF CONTRACT. [Part V. general, the only contract whicli arises on the sale of an article by a description, by its known designation in the market, is that it is of the kind specified. If the article corresponds with that description, no warranty is implied that it shall answer the par- ticular purpose in view of which the purchase was made. Chanter V. Hopkins, 4 M. & W. 404; Ollivant v. Bayley, 5 Q. B. 288; Winsor v. Lombard, 18 Pick. 67; Mixer v. Ooburn, 11 Mete. 559; Gassier r. Eagle &c. Co., 103 Mass. 331. The cases on this subject, so productive of judicial discussion, are classified by Justice Mellor, in Jones v. Just, Law Eep. 3 Q. B. 197. Nor can any distinction be maintained between statements of this charac- ter in written and in oral contracts. The arguments founded on an apprehension that where the contract is oral, loose expressions of judgment or opinion pending the negotiations might be re- garded as embodied in the contract, contrary to the intentions of the parties, is without reasonable foundation. It is always a question of construction or of fact, whether such statements were the expression of a mere matter of opinion, or were intended to be a substantive part of the contract, when concluded. If the contract is in writing, the question is one of construction for the court. Behn v. Burness, 3 B. & S. 751. If it be concluded by parol, it will be for the determination of the jury, from the nature of the sale, and the circumstances of each particular case, whether the language used was an expression of opinion, merely leaving the buyer to exercise his own judgment, or whether it was in- tended and understood to be an undertaking which was a contract on the part of the seller. Lomi v. Tucker, 4 C. & P. 15; De Seivhanberg v. Buchanan, 5 C. & P. 343; Power v. Barham, 4 A. & E. 473. In the case last cited, the vendor sold by a bill on parcels, "four pictures, views in Venice — Canaletto; " it was held that it was for the jury to say, under all the circumstances, what was the effect of the words, and whether they implied a warranty of genuineness, or conveyed only a description or an expression of opinion, and that the bill of parcels was properly laid before the jury with the rest of the evidence. The purchaser may contract for a specific article, as well as for a particular quality, and if the seller makes such a contract, he is bound by it. The state of the case presented shows that Chap. in. §2.] BY BREACH. 603 the plaintiff inquired for seed of a designated kind, and in- formed the defendants that he wanted it to raise a crop for the New York market. The defendants showed him the seed, and told him it was the kind he inquired for, and sold it to him as such. The inspection and examination of the seed were of no service to the plaintiff. The facts and circumstances attending the transaction were before the court below, and from the evi- dence, it decided that the proof was sufficient to establish a contract of warranty. The evidence tended to support that con- clusion, and this court cannot, on certiorari, review the finding of the court below, on a qijestion of fact, where there is evidence from which the conclusion arrived at may be lawfully inferred.* The second reason for reversal is, that the court was in error in the damages awarded. The judgment was for consequential damages. The contention of the defendants' counsel was that the dam- ages recoverable should have been limited to the price paid for the seed, and that all damages beyond a restitution of the con- sideration were too speculative and remote to come within the rules for measuring damages. As the market price of the seed which the plaintiff got, and had the benefit of in a crop, though of an inferior quality, was probably the same as the market price of the seed ordered, the defendants' rule of damages would leave the plaintiff remediless. The earlier cases, both in English and American courts, gen- erally concurred in excluding, as well in actions in tort as in actions on contracts, from the damages recoverable, profits which might have been realized if the injury had not been done, or the contract had been performed. Sedg. on Dam. 69. This abridgment of the power of courts to award compensation adequate to the ifljury suffered has been removed in actions of tort. The wrong-doer must answer in damages for those results 1 Accord : Bagley v. Cleveland Boiling Mill Co., 22 Blatoh. 342 ; S. O. 21 Fed. Rep. 159. ''Seejjosf, p. 611. 604 DISCHAKGE OF CONTRACT. [Paet V. injurious to other parties, which are presumed to have been within his contemplation when the wrong was done. Crater v, Binninger, 4 Vroom, 513. Thus, in an action to recover damages for personal injuries caused by the neligence of the defendant, the plaintiEf was held to be entitled to recover as damages the loss he sustained in his profession as an architect, by reason of his being incapacitated from pursuing his business. New Jersey Express Co. v. Nichols, 4 Vroom, 435. A similar relaxation of this restrictive rule has been made, at least to a qualified extent, in action on contracts, and loss of profits resulting naturally from the byeach of the contract, has been allowed to enter into the damages recoverable where the profits that might have been realized from the performance of the contract are capable of being estimated with a reasonable degree of certainty. In an action on a warranty of goods adapted to the China market, and purchased with a view to that trade, the purchaser was allowed damages with reference to their value in China, as representing the benefit he would have received from the contract, if the defendant had performed it. Bridge v. Wain, 1 Starkie, 604. On an executory contract put an end to by the refusal of the one party to complete it, for such a breach the other party may recover such profits as would have accrued to him as the direct and immediate result of the performance of the contract. Fox v. Harding, 7 Gush. 516; Masierton v. Mayor of Brooklyn, 7 Hill, 61. In an action against the charterer of a vessel for not loading a cargo, the freight she would have earned under the charter party, less expenses and the freight actually received for services during the period over which the charter extended, was held to be the proper measure of damages. Smith V. McGuire, 3 H. & N. 654. In the cases of the class from which these citations have been made, and they are quite numerous, the damages arising from loss of profits were such as resulted directly from non-performance, and in the ordinary course of business would be expected as a necessary consequence of the breach of the contract. In the two cases cited, of Fox v. Harding a.ndi Masierton v. Mayor of Brooklyn, it was said that the profits that might have been realized from independent and collateral engagements, entered into on the faith Chap. HI. § 2.] BY BREACH. 605 of the principal contract, were too remote to be taken into con- sideration. This latter qualification would exclude compensation for the loss of the profits of a resale by the vendee of the goods purchased, made upon the faith of his expectation, that his con- tract with his vendor would be performed. In the much canvassed case of Hadley v. Baxendale (9 Exch. 341), Alderson, B., in pronouncing the judgment of the court, enunciated certain principles on which damages should be awarded for breaches of contracts which assimilated damages in actions on contract to actions in tort. The rule there adopted as resting on the foundation of correct legal principles was, that the damages recoverable for a breach of contact were either such as might be considered as arising naturally, i.e. according to the usual course of things, from the breach of the contract itself; or such as might reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable results of the breach of it; and that when the contract is made under special circumstances, if those special circumstances are com- municated, the amount of injury which would ordinarily follow from a breach of the contract, under such circumstances, may be recovered as damages that would reasonably be expected to result from such breach. The latter branch of this rule was considered by Blackburn, J., and Martin, B., as analogous to an agreement to bear the loss resulting from the exceptional state of things, made part of the principal contract, by the fact that such special circumstances were communicated, with reference to which the parties may be said to have contracted. Home v. The Midland Railway Company, Law Eep. 8 C. P. 134-140. Under the opera- tion of this rule, damages arising from the loss of a profitable sale, or the deprivation for a contemplated use, have been allowed when special circumstances of such sale or proposed use were communicated contemporaneously with the making of the con- tract; and have been denied when such communication was not made so specially, as that the other party was made aware of the consequences, that would follow from his non-performance. Barries v. Hutchinson, 18 C. B. (N. S.) 445; Cory v. Thames Ironworks Co., Laiw Eep. 3 Q. B. 181; Home v. The Midland Railway Company, L. R. 8 C. P. 134; Benjamin on Sales, 665-671. 606 DISCHABGE OF CONTRACT. [Paet V. It must not be supposed that under tlie principle of Hadley v. Baxendale mere speculative profits, such as might be conjectured to have been the probable results of an adventure which was defeated by the breach of the contract sued on, the gains from which are entirely conjectural, with respect to which no means exist of ascertaining, even approximately, the probable results, can, under any circumstances, be brought within the range of damages recoverable. The cardinal principle in relation to the damages to be compensated for on the breach of a contract, that the plaintiff must establish the quantum of his loss, by evidence from which the jury will be able to estimate the extent of his injury, will exclude all such elements of injury as are incapable of being ascertained by the usual rules of evidence to a reasonable degree of certainty. For instance, profits expected to be made from a whaling voyage, the gains from which depend in a great measure upon chance, are too purely conjectural to be capable of entering into compensation for the non -performance of a contract, by reason of which the adventure was defeated. Tor a similar reason, the loss of the value of a crop for which the seed had not been sown, the yield from which, if planted, would depend upon the contingencies of weather and season, would be excluded as incapable of estima- tion, with that degree of certainty which the law exacts in the proof of damages. But if the vessel is under charter, or engaged in a trade, the earnings of which can be ascertained by reference to the usual schedule-of freights in the market, or if a crop has been sowed on the ground prepared for cultivation, and the plain- tiff's complaint is, that because of the inferior quality of the seed a crop of less value is produced, by these circumstances the means would be furnished to enable the jury to make a proper estimation of the injury resulting from the loss of profits of this character. In this case the defendants had express notice of the intended use of the seed. Indeed, the fact of the sale of seeds by a dealer keeping them for sale for gardening purposes, to a purchaser engaged in that business, would of itself imply knowledge of the use which was intended, sufficient to amount to notice. The ground was prepared and sowed, and a crop produced. The uncer- tainty of the quantity of the crop, dependent upon the condition Chap. III. 5 2.] BY BREACH. 607 of weather and season, was removed by the yield of the ground under the precise circumstances to which the seed ordered would have been exposed. The difference between the market value of the crop raised, and the same crop from the seed ordered, would be the correct criterion of the extent of the loss. Compensation on that basis may be recovered in damages for the injury sus- tained as the natural oonsequeifce of the breach of the contract. Randall v. Baper, E. B. & E. 84; Lovegrove v. Fisher, 2 F. & P. 128. From the state of the case, it must be presumed that the court below adopted this rule as the measure of damages, and the Judgment should be affirmed.^ (/8) Warranty or subsidiary promise. rEEYMAN V. KNECHT. 78 PENNSYLVANIA STATE, Ml. — 1875. Action on the case. Verdict for plaintiff. Defendant brings error. Defendant sold plaintiff a horse and warranted it sound. It turned out that the horse had one blind eye and the other was affected. Plaintiff took the horse to defendant's house and left it there, but defendant refused to receive it, and it was sold as an estray. The plaintiff was allowed to recover as damages the purchase price with interest. Mk. Justice Williams. It was clearly competent for the plaintiff to prove that, when he purchased the mare in November, 1872, her eyes were diseased; and in order to show that the dis- ease was not temporary but permanent and incurable, that it continued until November, 1873, when one of her eyes became wholly blind and the sight of the other was greatly impaired. But evidence as to the condition of her eyes in November, 1873 was not admissible per se for the purpose of showing that they were diseased at the time of the sale; and it should not have 1 Affirmed 38 N. J. L. 496 (1875). 608 DISCHAEGE OF CONTRACT. [Part V. been received if there was no evidence tending to show what their condition was during the ten months immediately preceding that date. If the defendant was guilty of fraud in the sale and war- ranty of the mare, the plaintiff had the right to rescind the con- tract, and upon returning or offering to return her, to recover back the price paid in an action on the case for deceit, or in an action of assumpsit or case for the fraudulent warranty. 1 Chit, PI. 137. But if there was no fraud or deceit in the sale, the plaintiff had no right to rescind the contract for the alleged breach of warranty, and to return the mare without the defend- ant's consent. Kase v. John, 10 Watts, 107; Sedgteick on Dam- ages, 286-7. It is true that he might sue either in assumpsit or case for the breach of the warranty ( Vanleer v. Earle, 2 Casey, 277) ; but the measure of his damages would be, not the consid- eration or price paid, but the difference between the actual valae of the mare, and her value, if sound, with interest from the date of the sale. Where there is no fraud or agreement to return, the vendee cannot rescind the contract after it has been executed, but his only remedy is an action on the warranty. In this case it is not alleged that the defendant was guilty of any fraud or deceit in the sale and warranty of the mare, nor is there any evidence that he knew or had any reason to believe that her eyes were permanently and incurably diseased at. the time of the sale. The plaintiff, therefore, had no right to return the mare, and the defendant was not bound to take her back and refund the price. It follows that there was error in over- ruling the defendant's offer to show that he refused to accept the mare when she was returned by the plaintiff, and that soon after- wards she was sold as a stray for about the same price the plaintiff paid for her; and for not charging, as requested in defendant's fourth point, that the horse, or the value thereof, is to be considered as the property of the plaintiff. The defendant had the right to show the price for which the mare was sold, as a stray, by the constable, as evidence of her value at the time of the sale to the plaintiff; and he was entitled to the instruction prayed for, in order to limit the plaintiff's recovery to the differ- ence between the actual value of the mare, and her value, if sound, as warranted, with interest thereon from the date of her Chap. HI. § 2.] BY BREACH. 609 sale. The other assignments of error are not sustained, but for the reasons given the judgment must be reversed. Judgment reversed, and a venire facias de novo awarded.* BEYANT V, ISBUEGH. 13 GRAY (Mass.), 607.— 1859. Action of contract to recover the price of a horse sold and delivered to the defendant by the plaintiff. Answer, that the plaintiff warranted the horse to be sound at the time of the sale ; that the horse proved to be unsound, and was returned to the plaintiff. The plaintiff did not receive the horse back, but declined to do so. Verdict for plaintiff, with deduction for damages. The court charged that the defendant had no right to return the horse and rescind the contract, in the absence of fraud, unless such a remedy was provided for by the terms of the contract. Defendant excepted to this charge. Metcalf, J. The precise question in this case is, whether a purchaser of personal property, sold to him with an express warranty, and taken into possession by him, can rescind the con- tract and return the property, for breach of the warranty, when there is no fraud, and no express agreement that he may do so. It appears from the cases cited for the plaintiff that in the English courts, and in some of the courts in this country, he cannot, and that his only remedy is on the warranty. See also 2 Steph. N. P. 1296; Addison on Oon. (2d Am. ed.) 272; Oli- phant's Law of Horses, 88; Cripps v. Smith, 3 Irish Law E. 277. But we are of opinion (nothwithstanding a dictum of Parsons, C. J., in Kimball v. Cunningham, 4 Mass. 605) that, by the law of this commonwealth, as understood and practiced upon for more 1 Accord : Matteson v. Holt, 45 Vt. 336 ; Marsh v. Low, 55 Ind. 271 ; Thornton v. Wynn, 12 Wheat. 189 {semhle). In New York there is an un- broken line of dicta to the same efiect. Voorhees v. Earl, 2 Hill, 288 ; Gary V. Qruman, 4 Hill, 625 ; Muller v. Eno, 14 N. Y. 597 ; Day v. Pool, 52 N. Y. 416 ; Brigg v. Hilton, 99 N. Y. 517. 610 DISCHARGE OF CONTRACT. [Part V. than forty years, there is no such difference between the effect of an implied and an express warranty as deprives a purchaser of any legal right of rescission under the latter which he has under the former; and that he to whom property is sold with express warranty, as well as he to whom it is sold with an implied war- ranty, may rescind the contract for breach of warranty, by a seasonable return of the property, and thus entitle himself to a full defense to a suit brought against him for the price of the property, or to an action against the seller to recover back the price, if it has been paid to him. In Bradford v. Manly (13 Mass. 139), where it was decided that a sale by sample was tantamount to an express warranty that the sample was a true representative of the kind of thing sold (and in which case there was no fraud). Chief Justice Parker said : " If a different thing is delivered, he " (the seller) "does not perform his contract, and must pay the difference, or receive the thing back and rescind the bargain, if it is offered him." This, it is true, was only a dictum, and not to be regarded as a decisive authority. But in Parley v. Balch (23 Pick. 283), which was an action on a promissory note given for the price of an ox sold to the defendant, it was adjudged that the jury were rightly instructed that if, on the sale of the ox, there was fraud, or an express warranty and a breach of it, the defendant might avoid the contract by returning the ox within a reasonable time, and that this would be a defense to the action. In Dorr v. Fisher (1 Cush. 274) it was said by Shaw, C. J., that, " to avoid circuity of action, a warranty may be treated as a con- dition subsequent, at the election of the vendee, who may, upon a breach thereof, rescind the contract and recover back the amount of his purchase money, as in case of fraud. But if he does this, he must first return the property sold, or do everything in his power requisite to a complete restoration of the property to the vendor; and without this he cannot recover." The chief justice took no distinction between an express warranty and an implied one, but referred, in support of what he had said (with other cases), to Perley v. Balch, cited above. In 1816, when the case of Bradford v. Manly was before this court, and afterwards, until 1831, the law of England, on the point raised in the present case, was supposed to be as we now Chap. III. § 3.] BY BREACH: EEMEBIES. till hold it to be here. Lord El&on had said, in Curtis v. Hannay (3 Esp. R. 82), that he took it to be "clear law; " and so it was laid down in 2 Selw. N. P. (1st ed.) 586, in 1807, and in Long on Sales, 125, 126, in 1821, and in 2 Stark. Ev. (1st ed.) 645, in 1825. In 1831, in Street v. Blay (2 B. & Ad. 461), Lord Eldon's opinion was first denied, and a contrary opinion expressed by the court of the king's bench. Yet our court subsequently (in 1839) decided the case of Perley v. Balch. The doctrine of that decis- ion prsTcnts circuity of action and multiplicity of suits, and at the same time accomplishes all the ends of justice. Exceptions sustained.' $ 3. Remedies for breach of contract. (i.) Damages. WOLCOTT et al. v. MOUNT. 36 NEW JERSEY LAW, 262.— 1873. [Reported herein at p. 603,]* 1 Accord : Marston v. Knight, 29 Me. 341 ; Franklin v. Long, 7 Gill. & Jolins. (Md.) 407 ; Sogers v. Hanson, 35 la. 283 ; Boothby v. Scales, 27 Wis. 626 ; Smith v. Hale, 158 Mass. 178. '^ See also Griffin v. Colver, 16 N. Y. 489 ; Allison v. Chandler, 11 Mich. 642 ; Sherman v. Kitsmiller, ante, p. 157 ; Windmuller v. Pope, ante, p. 555 ; Hale V. Trout, ante, p! 561 ; note, p. 567 ; Damson v. Von Lingen, ante, p. 265. " It is not true that loss of profits cannot be allowed as damages for a breach of contract. Losses sustained and gains prevented are proper elements of damage. Most contracts are entered into with a view to future profits, and such profits are in the contemplation of the parties, and so far as they can be properly proved, they may form the measure of damage. As they are prospective, they must, to some extent, be uncertain and problematical, and yet on that account a person complaining of breach of contract is not to be deprived of all remedy. It is usually his right to prove the nature of his contract, the circumstances surrounding and following its breach, and the consequences naturally and plainly traceable to it, and then it is for the jury, under proper instructions as to the rules of damages, to determine the compensation to be awarded for the breach. When a contract is repu- diated, the compensation of the party complaining of its repudiation should be the value of the contract. He has been deprived of his contract, and he 612 DISCHARGE OF CONTRACT. [Pabt V. KOCHESTER LANTERN CO. v. STILES AND PARKER PRESS CO. 135 NEW YORK, 209. — 1892. [Beported herein at p. 441] MATHER V. BUTLER COUNTY. 28 IOWA, 253. — 1869. Quantum meruit. Cross claim for damages for defective work, etc. Verdict for plaintiff, who, not being satisfied with the amount, moved for a new trial. Motion denied. Plaintiff appeals. Dillon, C. J. . . . The defendant had a set-off or cross claim arising out of damages claimed to have been occasioned by defective work and materials. There was evidence offered by the defendant tending to show, that, owing to the imperfect manner in which the belfry was constructed, the roof leaked, and this caused the plastering, some time afterwards, to fall, and that it would cost one hundred dollars to make good the damage by replacing the plastering. Concerning this subject, the plaintiff asked the court to give the foUowiag instruction, which was refused : " That, if the defendant could have protected itself from damage which would naturally result from the alleged defects in the construction of said court-house, it was bound to do so, if practicable, at a moderate expense or by ordinary efforts, and it can charge the plaintiff for such expense and efforts only, and for the damages which could not be pre- vented by the exercise of due dihgenoe." The court's instructions contained no reference whatever to this point. Without more particularly alluding to the circumstances should have in lieu thereof its value, to be ascertained by the application of rules of law which have been laid down for the guidance of courts and jurOTS." — Earl, J., in Wakeman v. Wheeler & Wilson Mfg. Co., 101 N. Y. 205, 209, 210; BeemanY. Banta, 118 N. Y. 538; Swain v. Schieffelin, 134 N. Y. 471 ; United States v. Behan, 110 U. S. 338 ; Howard v. Mfg. Co., 139 U. S. 199. Chap. m. § 3.] BY BREACH: REMEDIES. 613 of the case before the court, it is our opinion that the instruction, asked was pertinent, and the case one to which the doctrine asserted (which should be cautiously applied) was applicable. The doctrine itself has been before recognized in this court in almost the identical language of the instruction which was refused. Davis V. Fish, 1 G. Greene, 406, 409. See also Miller v. The Mariner's Church, 7 Greenl. (Me.) 51; Loicer v. Damon, 17 Pick. 284. For this error the judgment must be reversed, unless the defendant consents that the plaintiff's damages may be increased to the extent of one hundred dollars, the largest amount to which the error could, under the evidence, have operated to the plain- tiff's injury. Eeversed.* STEEEPEE V. WILLIAMS. 48 PENNSYLVANIA STATE, 450. — 1865. [Eeported herein at p. 517.] (it.) Specific performance and injunction. a. Specific performance. ADAMS V. MESSINGEE. 14T MASSACHUSETTS, 185.— 1888. Bill in equity for specific performance and for an injunction. Demurrer to bill. Demurrer sustained. Plaintiff appeals. The bill alleged that the defendant agreed to furnish to plain- tiff certain steam injectors, and further agreed that in case he took out in the United States patents for improvements in such injectors he would apply for patents in Canada, and on receiving 1 Accord: Parsons v. Sutton, 66 N. T. 92 ; Maynard v. Maynard, 49 Vt. 297. On the duty of a servant wrongfully discharged to seek new employ- ment, see Howard 7. Daly, 61 N. Y. 362, 370 ; Strauss v. Meertief, 64 Ala. 299. On the duty to stop work when directed, see Clark v. Marsiglia, 1 Denio, 317, ante, p. 572. 614 DISCHAKGE OF CONTRACT. [Part V. the same assign them to plaintiff; that defendant had failed and refused to supply the injectors, and had, after taking out addi- tional patents in. the United States, failed and refused to apply for corresponding patents in Canada; that plaintiff' could obtain the injectors only of defendant, and had suffered great and peculiar damages from defendant's failure to deliver them. The bill prayed that defendant might be decreed specifically to per- form the agreement; that there might be assessed damages grow- ing out of defendant's neglect; and that defendant might be restrained from alienating his right to the patents in Canada. The defendant demurred to the bill on the following grounds : "1. That the plaintiff has not stated such a case as entitles him to any relief in equity against the defendant. 2. That the plaintiff has a plain and adequate remedy at law. 3. That the agreement, specific per- formance of which the plaintiff prays may be decreed, is a contract for personal services. 4. That the specific performance, which the plaintiff prays may be decreed, requires the exercise of mechanical skill, intellect- ual ability, and judgment. 5. That the specific performance of said agreement involves the building of a machine embodying a patent. 6. That the securing of letters patent in Canada involves the action of officers of a foreign government, and cannot be the subject of an order for specific performance. 7. That it does not appear by said bill what relief the plaintiff prays for, and the plaintiff's bill is entirely indefinite and uncertain." Dbvens, J. It is the contention of the defendant, that the plaintiff has a full, complete, and adequate remedy at common law by an action for damages, and that the court sitting in equity cannot grant the relief sought by the prayer of the bill. The controversy arises from the failure to perform an executory written contract. So far as this relates to personal property, the objections arising from the statute of frauds, which have some- times been found to exist when oral contracts were sought to be enforced, have of course no application. The general rule that contracts as to the purchase of personal property are not specifi- cally enforced, as are those which relate to real property, does not rest on the ground of any distinction between the two classes of property other than that which arises from their character. Contracts which relate to real property can necessarily be satis- fied only by a conveyance of the particular estate or parcel con- Chap. in. §3.] BY BREACH: REMEDIES. 615 tracted for, while those which relate to personal property are often fully satisfied by damages which enable the party injured to obtain elsewhere in the market property precisely similar to that which he had agreed to purchase. The distinction between real and personal property is entirely subordinate to the question whether an adequate remedy can thus be afforded. If, from the nature of the personal property, it cannot, a court of equity will entertain jurisdiction to enforce the contract. Story Eq. Jur., § 717; Clark v. Flint, 22 Pick. 231. A contract for bank, rail- way, or other corporation stock freely sold in the market, might not be thus enforced, but it would be otherwise where the stock was limited in amount, held in a few hands, and not ordinarily to be obtained. White v. Schuyler, 1 Abb. Pr. (N. S.) 300; Treasurer y. Commercial Mining Co., 23Cal. 390; Poole y. Middle- ton, 29 Beav. 646; Doloret v. Bothschild, 1 Sim. & Stu. 690. See Chaffee r. Middlesex Bailroad, 146 Mass. 224. Where articles of personal property are also peculiar and in- dividual in their character, or have an especial value on account of the associations connected with them, as pictures, curiosities, family furniture, or heirlooms, specific performance of a contract in relation to them will be decreed. Lloyd v. Loaring, 6 Ves. 773; Fells v. Read, 3 Ves. Jr. 70; Loiother v. Lowther, 13 Ves. 95; Williams v. Howard, 3 Murphey, 74. An agreement to assign a patent will be specifically enforced. Binney v. Annan, 107 Mass. 94. Nor do we perceive any reason why an agreement to furnish articles which the vendor alone can supply, either because their manufacture is guarded by a patent or for any similar reason, should not also be thus enforced. Eapgood v. Bosenstock, 23 Fed. Eep. 86. As the value of a patent right cannot be ascertained by computation, so it is impossible with any approach to accuracy to ascertain how much a vendee would suffer from not being able to obtain such articles for use in his business. The contract of the defendant was twofold, to furnish and deliver certain described working steam injectors within a speci- fied time to the plaintiff, and also that, if the defendant shall make improvements in injectors for steam boilers, and shall take out patents therefor in the United States, he will apply for letters patent in Canada, and on obtaining them will assign and convey the 616 DISCHARGE OF CONTRACT. [Part V. same to the plaintiff, and that he will not do any act prejudical to these letters patent of Canada or the monopoly thus secured. It is said that the court will not enforce a contract for personal services when such services require the exercise of peculiar skill, intellectual ability, and judgment, and therefore that the defend- ant cannot be ordered to make and deliver the injectors contracted for. But the principle on which it is held that a court of equity cannot decree one to perform a personal service involving peculiar talent or skill, because it cannot so mold its order and so super- vise the individual executing it that it can determine whether he has honestly obeyed it or not, has no application here. The defendant has agreed to furnish and deliver certain injectors, which the contract shows to be patented articles. It does not appear from the bill that they were yet to be made when the contract was executed. But if it be assumed that they were, there is nothing from which it can be inferred that any skill peculiar to the defendant was required to construct them. For aught that appears, they could be made by any intelligent artificer in the metals of which they are composed. The details of their manufacture are given by reference to the patents which are referred to in the agreement, so that no difficulty such as has • sometimes been experienced could have been found in describing accurately, and even minutely, the articles to be furnished. Nor are there found in the case at bar any continuous duties to be done, or work to be performed, requiring any permanent super- vision, which, as it could not be concluded within a definite and reasonable time, has sometimes been held an obstacle to the enforcement of a contract by the court. Agreements to make an archway under a railway, or to construct a siding at a particular point for the convenience of the land- owner, have been ordered to be specifically enforced. Although the party aggrieved might have obtained damages which would have been sufficient to have enabled him to pay for constructing them, and although the work to be done necessarily involved engineering skill as well as labor, he was not bound to assume the responsibility or the labor of doing that which the defendant had agreed to do. Storer v. Great Western Railway, 2 Yo. & Col. Ch. 48; Greene v. West Cheshire Railway, L. E. 13 Eq. Chap. III. § 3.] BY BREACH: REMEDIES. 617 44. The case at bar is readily distinguishable from that of Wollensak v. Briggs (20 Bradw. [lU.J 50), on which the defendant much relies. In that case, the defendant was to construct for the plaintiff certain improved machinery for a particular purpose, but no details were given as to the form, structure, principle, or mode of operating the proposed machine. It was obviously a contract too indefinite to enable the court to order its specific enforcement. It is urged that specific performance of a part only of a con- tract will not be ordered when it is not in the power of the court to order the enforcement of the whole, and that it would not be possible to enforce that portion of the contract which relates to the application for letters patent in Canada, and the subsequent assignment of them. But where two parts of a contract are -distinctly separable, as in the case at bar, there is no reason why one should not be enforced specifically, and the plaintiff compen- sated in damages for the breach of the other. When a contract relates to but a single subject, and it is impos- sible for the defendant to perform it, except partially, the plain- tiff is entitled to the benefit of such partial performance, and to compensation, if it be possible to compute what is just, so far as it is unperformed. It was therefore held in Davis v. Parker (14 Allen, 94), that where one had agreed to convey land with release of dower, and was unable to procure a release of dower, the purchaser was entitled to a conveyance without such release, with an abatement from the purchase money of the value of the wife's interest at the time of conveyance. See also Milkman v. Ordway, 106 Mass. -232, 253; Gurran v. Holyoke Water Power Co., 116 Mass. 90. We have assumed, in favor of the defendant's contention, that the only relief that the plaintiff could obtain for the breach of that portion of the agreement which relates to the application for a patent in Canada, for the improvements which the defendant had made, would be in damages. We have not intended thus to decide. That equity, by virtue of its control over the persons before the court takes cognizance of many things which they may do or be able to do abroad, while they are themselves personally here, will not be controverted. One may be enjoined from prose- 618 DISCHAKGE OF CONTRACT. [Part V. cuting a suit abroad. He may be compelled to convey land situated abroad, although the conveyance must be according to the laws of the foreign country, and must be sent there for record. Pingree v. Coffin, 12 Gray, 288 ; Dehon v. Foster, 4 Allen, 545; Cunningham v. Butler, 142 Mass. 47; Newton v. Branson, 13 N. Y. 587; Bailey v. Byder, 10 N. Y. 363. There is nothing to show that the defendant, in making his application in Canada for the patent, is compelled to leave the State, any more than he would be compelled to do so if he was an applicant at Washington. The grant of such a patent is an act of administration only. If it were to be granted here, the party would be ordered to make application. It was held in Runstetler V. Atkinson (MacArthur & Mackey 382), that where a formal assignment of an invention had not been made, but a valid agreement had been made to assign, equity would order the party to make the formal assignment, and also to make application for the patent which, in such case, would issue to the assignee. The laws of Canada, which we can know only as facts, are not before us by any allegations as to them. If all that is required by them is a formal application in writing by the inventor, there would seem to be, from the allegations of the bill, sufficient reason why the defendant should be required to make and forward it, or place it in the hands of the plaintiff to be forwarded to the Canadian authorities. In any event, as the application is preliminary only to obtain- ing letters patent for the purpose of assigning them to the plain- tiff, the averments of the bill taken in connection with the terms of the agreement set forth a good reason why the plaintiff may ask an assignment of his title to the improvements in question from the defendant, so far as the Dominion of Canada is con- cerned, and also why the defendant should be restrained from alienating or in any way incumbering any right he may have to letters patent from Canada, if the plaintiff should decide to seek his remedy in this form, rather than in damages for breach of this part of the contract. Demurrer overruled.* 1 "While it may be conceded that in general a court of equity will not take upon itself to make such decree where chattel property alone is con- Chap. m. §3.] BY BREACH: REMEDIES. 619 b. Injunction. COBT V. LASSAED et [Beported herein at p. T6.] * § 4. Contracts 'with the State. TLETCHEE v. PECK. 6 CRANCH (U. S.), 87. — 1810. Action on covenants in a deed from Peck to Fletcher. Judg- ment for defendant. Plaintiff brings error. The State of Georgia, in 1795, granted, by an act of the legisla- ture, a certain tract of land in that State to " The Georgia Com- pany," for which a patent regularly issued. Peck was a grantee by mesne conveyances of a portion of the tract. In 1803 he conveyed fifteen thousand acres of his holding to Fletcher, cove- nanting that the title given by the State of Georgia had been legally conveyed to him, and that this title had been " in no way constitutionally or legally impaired by virtue of any subsequent act of any subsequent legislature of the said State of Georgia." There had in fact been an act passed by the legislature of Georgia in 1796 annulling the grant to "The Georgia Company," on the ground, as alleged, that the grant had been obtained by corrupt means. The question raised by the pleadings was whether this repealing act constituted a breach of the above covenant. Mb. Chief Justice Marshall. . . . The Constitution of the United States declares that "no State shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts." Does the case now under consideration come within this prohibitory section of the Constitution? In considering this very interesting question we immediately ask ourselves, what is a contract? Is a grant a contract? 1 Accord: Morley v. Lake Shore Railway Co., 146 U. S. 162 (1892). Chap. VI. § 4.] CONSTITUTIONAL PROHIBITIONS. 697 A contraot is a compact between two or more parties, and is either executory or executed. An executory contract is one in ■which a party binds himself to do, or not to do, a particular thing ; such was the law under which the conveyance was made by the governor. A contraot executed is one in which the object of contract is performed ; and this, says Blackstone, differs in nothing from a grant. The contraot between Georgia and the purchasers was executed by the grant. A contract executed, as well as one which is executory, contains obligations binding on the parties. A grant, in its own nature, amounts to an extinguishment of the right of the grantor, and implies a contract not to reassert that right. A party is, therefore, always estopped by his own grant. Since, then, in fact, a grant is a contract executed, and the obligation of which still continues, and since the Constitution uses the general term " contract, " without distinguishing between those which are executory and those which are executed, it must be construed to comprehend the latter as well as the former. A law annulling conveyances between individuals, and declaring that the grantors should stand seized of their former estates, not- withstanding those grants, would be as repugnant to the Consti- tution as a law discharging the vendors of property from the obligation of executing their contracts by conveyance. It would be strange if a contract to convey was secured by the Constitution, while an absolute conveyance remained unprotected. If, under a fair construction of the Constitution, grants are comprehended under -the term "contracts," is a grant from the State excluded from the operation of the provision? Is the clause to be considered as inhibiting the State from impairing the obliga- tion of contracts between two individuals, but as excluding from that inhibition contracts made with itself? The words themselves contain no such distinction. They are general, and are applicable to contracts of every description. If contracts made w;ith the State are to be exempted from their operation, the exception must arise from the character of the contracting party, not from the words which are employed. Whatever respect might have been felt for the state sover- eignties, it is not to be disguised that the framers of the Consti- tution viewed, with some apprehension, the violent acts which 698 DISCHARGE OF CONTRACT. [Part V. migM grow out of the feelings of the moment; and that tie people of the United States, in adopting that instrument, have manifested a determination to shield themselves and their prop- erty from the effects of those sudden and strong passions to which men are exposed. The restrictions on the legislative power of the States are obviously founded in this sentiment; and the Constitution of the United States contains what may be deemed a bill of rights for the people of each State. No State shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts. A bill of attainder may affect the life of an individual, or may confiscate his property, or may do both. In this form the power of the legislature over the lives and fortunes of individuals is expressly restrained. What motive, then, for implying, in words which import a general prohibition to impair the obligation of contracts, an exception in favor of the right to impair the obliga- tion of those contracts into which the State may enter? The state legislatures can pass no ex post facto law. An ex post facto law is one which renders an act punishable in a manner in which it was not punishable when it was committed. Such a law may inflict penalties on the person, or may inflict pecuniary penalties which swell the public treasury. The legislature is then prohibited from passing a law by which a man's estate, or any part of it, shall be seized for a crime which was not declared, by some previous law, to render him liable to that punishment. Why, then, should violence be done to the natural meaning of words for the purpose of leaving to the legislature the power of seizing, for public uses, the estate of an individual in the form of a law annulling the title by which he holds that estate? The court can perceive no sufficient ground for making this distinc- tion. This rescinding act would have the effect of an ex post facto law. It forfeits the estate of Fletcher for a crime not committed by himself, but by those from whom he purchased. This cannot be effected in the form of an ex post facto law, or bill of attainder; why, then, is it allowable in the form of a law annulling the original grant? The argument in favor of presuming an intention to except a case, not excepted by the words of the Constitution, is susceptible Chap. VI. § 4.] CONSTITUTIONAL PROHIBITIONS, 699 of some illustration from a principle originally ingrafted in that instrument, though no longer a part of it. The Constitution, as passed, gave the courts of the United States jurisdiction in suits brought against individual States. A State, then, which violated its own contract, was suable in the courts of the United States for that violation. Would it have been a defense in such a suit to say that the State had passed a law absolving itself from the contract? It is scarcely to be conceived that such a defense would be set up. And yet, if a State is neither restrained by the general principles of our political institutions, nor by the words of the Constitution, from inipairing the obligation of its own contracts, such a defense would be a valid one. This feature is no longer found in the Constitution ; but it aids in the con- struction of those clauses with which it was originally associated. It is, then, the unanimous opinion of the court, that, in this case, the estate having passed into the hands of a purchaser for a valuable consideration, without notice, the State of Georgia was restrained, either by general principles which are common to our free institutions, or by the particular provisions of the Constitu- tion of the United States, from passing a law whereby the estate of the plaintiff in the premises so purchased could be constitution- ally and legally impaired and rendered null and void. In overruling the demurrer to the third plea, therefore, there is no error. » • « • • Judgment affirmed with costs.* 1 The charter granted by a State to a corporation is a contract, the obliga- tion of which cannot be impaired without violating the Constitution of the United States. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518 (1819). But the reservation by the State of a right to alter, amend, or repeal the charter is efiective. Miller v. The State, 16 Wall. 478 (1872). See Stimson^s Am. St. Law, § 8003. The grant of an exclusive franchise is a contract, the obligation of which cannot be impaired. The Binghamton Bridge, 3 Wall. 61 (1866) ; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 660 (1886). The grant of an exemption from taxation, if upon a sufficient considera- tion, is a contract, the obligation of which cannot be impaired. State of New Jersey v. Wilson, 7 Cranch, 164 (1812) ; Given v. Wright, 117 U. S. 648 (1886). Cf. Providence Bank r. Billings, 4 Pet. 614 (1830) ; Delaware Railroad Tax, 18 Wall. 206 (1873). 700 DISCHARGE OF CONTRACT. [Pabt V. LOKD et al. v. THOMAS. 64 NEW YORK, 107. — 1876. Action to have chap. 323, Laws of 1874, declared uncbnstitu- tional and void so far as it authorized defendant, as super- intending builder of the State Eeformatory at Elmira, appointed under said act, to relet a contract for the brick and stone work of said building, and to restrain defendant from entering into any such new contract. Judgment for defendant, affirmed at General Term. Plaintiffs appeal. Plaintiffs were the assignees of a contract, authorized by a previous law, for the construction of such brick and stone work. Andrews, J. This action cannot be maintained. The State cannot be compelled to proceed with the erection of a public building, or the prosecution of a public work at the instance of a contractor with whom the State has entered into a contract for the erection of a building or the performance of the work. The State stands, in this respect, in the same position as an individual, and may at any time abandon an enterprise which it has undertaken, and refuse to allow the contractor to proceed, or it may assume the control and do the work embraced in the contract, by its own immediate servants and agents, or enter into a new contract for its performance by other persons, without reference to the contract previously made, and although there has been no default on the part of the contractor. The State in the case supposed would violate the contract, but the obligation of the contract would not be impaired by the refusal of the State to perform it. The original party would have a just claim against the State for any damages sustained by him from the breach of the contract, and although the claim could not be enforced through an action at law, the remedy by appeal to the legislature is open to him, which can, and it must be presumed will, do whatever justice may require in the premises. This remedy is the only one provided in such a case, and this is known to the party contract- ing with the State and the courts cannot say that it is not certain, reasonable, and adequate. See Coster v. Mayor &o., 43 N. Y. 408. If the court should undertake by its order or judgment to Chap. VI. § i.] CONSTITUTIONAL PROHIBITIONS. 701 protect the contractor in the possession of the building or premises to enable him to proceed with the work under his contract, he would still be left without remedy to obtain payment except through an appropriation by the legislature. A law of the State suspending or discontinuing a public work, or providing for its performance by different agencies from those theretofore employed is not, therefore, subject to any constitutional objection because the change would involve a breach of contract with a contractor with whom it had entered into a contract for doing it. That a person who has employed another to perform labor may refuse to allow the other party to proceed, and that the latter cannot there- after insist upon specifically performing the contract, was decided in Clark v. Marsiglia, 1 Den. 317. * « » » » The judgment of the General Term should be affirmed. All concur. Judgment affirmed. SUPPLEMENTARY CASES. (p. 14) Offer must he communicated. (p. 20) BENTON V. SPRINGPIELD YOUNG MEN'S CHRIS- TIAN ASSOCIATION. 170 MASSACHUSETTS, 534.— 1898. Action in contract by Benton against the Springfield Young Men's Christian Association to recover damages for the refusal of the Association to allow him to perform the duties of archi- tect in the erection of a building. Plaintiff made an offer of proof of his whole case in writing, upon which the trial court ruled that, as matter of law, it was not sufficient to maintain the action, and gave judgment for defendant. Plaintiff alleged exceptions. The facts appear in the opinion. AiiLEK", J. The " notice to architects " issued by the committee of the defendant invited the plaintiff and other architects "to participate in the competition for plans, on the conditions " therein stated. One of these conditions was that " the committee reserve the right to reject any and all of the designs submitted." Ac- cording to the plaintiff's offer of proof, he presented to the com- mittee a full set of drawings of the proposed building. Other architects did the same. The committee thereupon, on May 19, 1893, passed a vote "that we proceed to examine drawings and specifications presented to us on basis of compliance with each and every requirement in our letter of invitation; and, after considering and discussing each Requirement separately, a vote of the committee be taken as to which plan best meets the letter of requirements and the needs of the Association, and that, on completion of this examination, we select the architect who has the largest number of votes." The offer of proof also states that the committee " agreed that the person who should receive the greatest number of votes should superintend the 703 704 FORMATION OF CONTRACT. construction of the same." This can mean only that they so agreed amongst themselves. The next day, another meeting of the committee was held, and the' plaintiff was found to have received the greatest number of first marks in the competition. Afterwards at this meeting the committee voted to reject all the plans submitted, and to return them to their owners, and all the plans were rejected. Immediately after this vote had been passed, another vote was passed that the plaintiff "be chosen architect in accordance with the vote of last night"; the words "vote of last night'' having reference to the receipt of the greatest number of first marks. This vote remained upon the books of the defendant for forty days without being changed, at the end of which time it was rescinded. The committee did not, as a committee, communicate this vote to the plaintiff or ask him to act under it, but two members of the committee notified him that he had been appointed as architect of the building, and this fact was known to the secretary of the committee, and also to other members of the committee, who made no objections to the notification, and did nothing in regard to the matter until the time of passing the vote of rescission. On July 3, 1893, the plaintiff wrote a letter to the committee claiming to act as architect, and saying that he had just heard that the committee had lately taken action which appeared to show their intention to deprive him of the position. The committee answered that no contract with him had been made. The offer of proof stated that this letter of the plaintiff was written within the forty days ; but, by the dates given, the time is forty-four days. ISTo explanation of this apparent inconsistency has been given to us, but in the view we take of the case it becomes immaterial. The subse- quent statement that these letters were not written until after the vote appointing the plaintiff had been upon the books for about forty days, and the members of the committee had known that the plaintiff had been notified as aforesaid, must be con- strued to refer only to those members of the committee previ- ously referred to, as knowing the fact of the notification given to the plaintiff by two members of the committee. It is apparent, in the first place, that no contract arose out of OFFER AND ACCEPTANCE. 705 the " notice to architects " and the presentation of plans by the plaintiff, because the right to reject any and all of the designs submitted was expressly reserved, and this right was exercised by a formal vote. < The plaintiff, however, contends that his presentation of plans was an offer of his services as architect of the building, and that this offer was accepted by the vote of May 20th. There is noth- ing in the offer of proof to support this position. The notice to architects called simply for the submission of plans, with a descrip- tion and explanation of them. Rejected designs were to be re- turned to their authors without any compensation. The plaintiff submitted drawings " in the manner specified." There is noth- ing to show that, either by express words or by implication, he offered or was understood to offer his services as architect, unless his plans should be accepted. The vote rejecting his plans rejected all that he had offered. The new vote, that he be chosen architect, was not an offer to him. It was not communicated to him by the committee, nor voted to be so communicated. Those members who gave notice of the vote to the plaintiff did not act for or by authority of the committee. Their notification was not official, and did not pur- port to be so. The vote did not specify any terms or duties in detail, and it was not in form or intention a contract or the offer of a contract. It was merely an initiatory step, signifying the intention or purpose of the committee, and was not an act by which they meant to be bound' as by a contract. If the plaintiff had notified them at once that he would act as architect, in pur- suance of their vote, they might have answered that their vote was not a proposal or offer to him. Shaw v. Stone, 1 Gush. 228, 244 ; Dunham v. City of Boston, 12 Allen, 375 ; Sears v. Railway Co., 152 Mass. 161 ; Edge Moor Bridge Works v. Bristol County, 170 Mass. 528. If the plaintiff's letter was sent after the formal rescission of the vote, the plaintiff would fail to maintain his case for the additional reason that his acceptance of an offer after it had been recalled would be too late. But the decision- is not put upon that ground, because, upon the facts stated, the vote was not a proposal or offer to him, and he could not convert it into a con- 706 FORMATION OF CONTRACT. tract by signifying his acceptance of it, even though, he acted promptly. Exceptions overruled. (p. 21) Acceptance of guaranty. (p. 29) BISHOP V. EATON. 161 MASSACHUSETTS, 496.— 1894. Contract, on a guaranty. Judgment for plaintiff. Defendant alfeged exceptions. Defendant wrote plaintiff: "If Harry [defendant's brother] needs more money, let him have it or assist him to get it, and I will see that it is paid." Plaintiff signed the brother's note as surety, relying on defendant's letter. Shortly afterwards plaintiff wrote defendant stating that he had signed the note. He de- posited the letter, postage prepaid, in the post office at Sycamore, Illinois, addressed to defendant at the latter's home in Nova Scotia. The letter was never received by defendant. When the note was due it was extended for a year, but whether with defendant's knowledge or consent was in dispute. After it was agaia due defendant said to plaintiff : " Try to get Harry to pay it. If he don't, I will. It shall not cost you anything." Plain- tiff afterward paid the note. The principal question in the case was whether the plaintiff was bound to notify defendant of the acceptance of the offer, and, if so, whether the due mailing, within a reasonable time, of a letter accepting the offer of guaranty was sufB.cient, or whether such letter of notification or acceptance must actually be received. A secondary question was whether the extension of time of payment, without defendant's knowledge or consent, released him from the guaranty, and, if so, whether there was a subsequent waiver or notification. KsrowLTON, J. The first question in this case is whether the contract proved by the plaintiff is an original and independent contract or a guaranty. The judge found that the plaintiff signed the note relying upon the letter, "and looked to the defendant solely for reimbursement if called upon to pay the note." The OFFER AND ACCEPTANCE. 707 promise contained in the letter was in these words : " If Harry needs more money, let him have it, or assist him to get it, and I will see that it is paid." On a reasonable interpretation of this promise, the plaintiff was authorized to adopt the first alternative, and let Harry have the money in such a way that a liability of Harry to him would be created, and to look to the defendant for payment if Harry failed to pay the debt at maturity; or he might adopt the second alternative and assist him to get money from some one else in such a way as to create a debt from Harry to the person furnishing the money, and, if Harry failed to pay, might look t6 the defendant to relieve him from the liability. The words fairly imply that Harry was to be primarily liable for the debt, either to the plaintiff or to such other person as should furnish the money, and that the defendant was to guar- antee the payment of it. We are therefore of opinion, that, if the plaintiff relied solely upon the defendant, he was authorized by the letter to rely upon him only as a guarantor. The defendant requested many rulings in regard to the law applicable to contracts of guaranty, most of which it becomes necessary to consider. The language relied on was an offer to guarantee, which the plaintiff might or might not accept. With- out acceptance of it there was no contract, because the offer was conditional and there was no consideration for the promise. But this was not a proposition which was to become a contract only upon the giving of a promise for the promise, and it was not nec- essary that the plaintiff should accept it in words, or promise to do anything before acting upon it. It was an offer which was to become effective as a contract upon the doing of the act referred to. It was an offer to be bound in consideration of an act to be done, and in such a case the doing of the act constitutes the acceptance of the offer and furnishes the consideration. Ordi- narily there is no occasion to notify the offerer of the acceptance of such an offer, for the doing of the act is a sufficient accept- ance, and the promisor knows that he is bound when he sees that action has been taken on the faith of his offer. But if the act is of such a kind that knowledge of it will not quickly come to the promisor, the promisee is bound to give him notice of his accept- ance within a reasonable time after doing that which constitutes 708 FORMATION OF CONTRACT. the acceptance. In such a case it is implied in the offer that, to complete the contract, notice shall be given with due diligence, so that the promisor may know that a contract has been made. But where the promise is in consideration of an act to be done, it becomes binding upon the doing of the act so far that the promisee cannot be affected by a subsequent withdrawal of it, if within a reasonable time afterward he notifies the promisor. In accord- ance with these principles, it has been held in cases like the pres- ent, where the guarantor would not know of himself, from the nature of the transaction, whether the offer has been accepted or not, that he is not bound without notice of the acceptance, sea- sonably given after the performance which constitutes the con- sideration. Bdbcock V. Bryant, 12 Pick. 133; WJiiting v. Stacy, 15 Gray, 270 ; Schlessinger v. Dickinson, 5 Allen, 47. In the present case the plaintiff seasonably mailed a letter to the defendant, informing him of what he had done in compliance with the defendant's request, but the defendant testified that he never received it, and there is no finding that it ever reached him. The judge ruled, as matter of law, that upon the facts found, the plaintiff was entitled to recover, and the question is thus pre- sented whether the defendant was bound by the acceptance when the letter was properly mailed, although he never received it. When an offer of guaranty of this kind is made, the implica- tion is that notice of the act which constitutes an acceptance of it shall be given in a reasonable way. What kind of a notice is required depends upon the nature of the transaction, the situation of the parties, and the inferences fairly to be drawn from their previous dealings, if any, in regard to the matter. If they are so situated that communication by letter is naturally to be expected, then the deposit of a letter in the mail is all that is necessary. If tliat is done which is fairly to be contem- plated from their relations to the subject-matter and from their course of dealing, the rights of the parties are fixed, and a failure actually to receive the notice will not affect the obliga- tion of the guarantor. The plaintiff in the case now before us resided in Illinois and the defendant in Nova Scotia. The offer was made by letter, and the defendant must have contemplated that informa- OFFER AND ACCEPTANCE. 709 tion in regard to the plaintiff's acceptance or rejection of it would be by letter. It would be a harsh rule which would subject the plaintiff to the risk of the' defendant's failure to receive the letter giving notice of his action on the faith of the offer. We are of opinion that the plaintiff, after assisting Harry to get the money, did all that he was required to do when he seasonably sent the defendant the letter by mail inform- ing him of what had been done. How far such considerations are applicable to the case of an ordinary contract made by letter, about which some of the early decisions are conflicting, we need not now consider.^ The plaintiff was not called upon under his contract to attempt to collect the money from the maker of the note, and it is no defense that he did not promptly notify the defendant of the maker's default, at least in the absence of evidence that the defendant was injured by the delay. This rule in cases like the present was established in Massachusetts in Vinal v. Rich- ardson (13 Allen, 521), after much consideration, and it is well founded in principle and strongly supported by authority. We find one error in the rulings which requires us to grant a new trial. It appears from the bill of exceptions that when the note became due the time for the payment of it was extended without the consent of the defendant. The defendant is thereby discharged from his liability, unless he subsequently assented to the extension and ratified it. Chace v. Brooks, 5 Cush. 43 ; Garkin v. Savory, 14 Gray, 528. The court should therefore have ruled substantially in accordance with the defendant's eighth request, instead of finding for the plaintiff, as matter of law, on the facts reported. Whether the judge would have found a ratification on the evidence if he had considered it, we have no means of knowing. Exceptions sustained. 1 See Brauer v. Shaw, 168 Mass. 198, post, p. 715. 710 FORMATION OF CONTRACT. (p. 29) Contract by letter. (p. 35) SANDERS V. POTTLITZER BROS. FRUIT CO. 144 NEW YORK, 209. — 1894. Action by Archie D. Sanders and others against Pottlitzer Bros. Fruit Company fpr damages for breach of a contract of sale. From a judgment of the general term affirming a judg- ment in favor of defendant, plaintiffs appeal. O'Bkien, J. The plaintiffs in this action sought to recover damages for the breach of a contract for the sale and delivery of a quantity of apples. The complaint was dismissed by the referee, and his judgment was affirmed upon appeal. The only question to be considered is whether the contract stated in the complaint, as the basis for damages, was ever in fact made, so as to become binding upon the parties. On the 28th of October, 1891, the plaintiffs submitted to the defendant the following proposition in writing: " Buffalo, N. Y., Oct. 28, 1891. " Messrs. Pottlitzer Bros. Fruit Co., Lafayette, Ind. — " Gentlemen : We offer you ten car loads of apples, to be from 175 to 200 barrels per car, put up in good order, from stock inspected by your Mr. Leo Pottlitzer at Nunda and Silver Springs. The apples not to exceed one-half green fruit, balance red fruit, to be shipped as follows : First car between 1st and 15th December, 1891 ; second car between 15th and 30th December, 1891 ; and one car each ten days after Janu- ary 1, 1892, until all are shipped. Dates above specified to be consid- ered as approximate a few days either way, at the price of $2.00 per barrel, free on board cars at Silver Springs and Nunda, in refrigerator cars ; this proposition to be accepted not later than the 31st inst., and you to pay us $500 upon acceptance of the proposition, to be deducted from the purchase price of apples at the rate of $100 per car on the last five cars. " Yours respectfully, "J. Sanders & Son." To this proposition the defendant replied by telegraph on October 31st as follows: "Lafayette, Ljjd., Slst October. "J. Sanders & Son: "We accept your proposition on apples, provided you will change it OFFER AND ACCEPTANCE. 711 to read car every eight days from January first, none in December ; ■wire acceptance. " POTTLITZER BkOS. FrUIT Co." On the same day the plaintiffs replied to this dispatch, to the effect that they could not accept the modification proposed, but must insist upon the original offer. On the same day the defend- ant answered the plaintiffs' telegram as follows : " Can only accept condition as stated in last message. Only way we can accept. Answer if accepted. Mail contract, and we will then for- ward draft. " POTTLITZBR BrOS. FrUIT CO." The matter thus rested till November 4th, when the plaintiffs received the following letter from the defendant : "Lafayette, Ind., November 2, 1891. "J. Sanders & Son, Stafiord, N. Y.— " Gents : We are in receipt of your telegrams, also your favor of the 31st ult. While we no doubt think we have offered you a fair contract on apples, still the dictator of this has learned on his return home that there are so many near-by apples coming into market that it will affect the sale of apples in December, and therefore we do not think it advisable to take the contract unless you made it read for shipment from the 1st of January. We are very sorry you cannot do this, but perhaps we will be able to take some fruit from you, as we will need it in the spring. If you can change the contract so as to read as we wired you we will accept it and forward you draft in payment on same. "POTTLITZER BrOS. FrUIT Co." On receipt of this letter the plaintiffs sent the following mes- sage to the defendant by telegraph : " November ith. " Pottlitzer Brothers Fruit Company, Lafayette, Ind. — " Letter received. Will accept conditions. If satisfactory, answer, and will forward contract. "J. Sanders & Son." The defendant replied to this message by telegraph saying : " All right. Send contract as stated in our message." The plaintiffs did prepare and send on the contract precisely in the terms embraced in the foregoing correspondence, which was the original proposition made by the plaintiffs, as modified 712 FORMATION OF CONTRACT. by defendant's telegram above set forth, and which was acceded to by the plaintiffs. This was not satisfactory to the defendant, and it returned it to the plaintiffs with certain modifications, which were not referred to in the correspondence. These modi- fications were : (1) That the fruit should be well protected from frost and well hayed ; (2) that if, in the judgment of the plain- tiffs, it was necessary or prudent that the cars should be fired through, the plaintiffs should furnish the stoves for the purpose, and the defendant pay the expense of the man to be employed in looking after the fires to be kept in the cars; (3) that the plaintiffs should line the cars in which the fruit was shipped. These conditions were more burdensome, and rendered the con- tract less profitable to the plaintiffs. They were not expressed in the correspondence and I think cannot be implied. They were not assented to by the plaintiffs, and on their declining to incorporate them in the paper the defendant treated the nego- tiations as at an end and notified the plaintiffs that it had placed its order with other parties. There was some further correspon- dence but it is not material to the question presented by the appeal. The writings and telegrams that passed between the parties contain all the elements of a complete contract. Nothing was wanting in the plaintiffs' original proposition but the defend- ant's assent to it in order to constitute a contract binding upon both parties according to its terms. This assent was given upon condition that a certain specified modification was accepted. The plaintiffs finally assented to the modification, and called upon the defendant to signify its assent again to the whole arrangement as thus modified, and it replied that it was "all right," which must be taken as conclusive evidence that the minds of the parties had met and agreed upon certain specified and distinct obligations which were to be observed by both. It is true, as found by the learned referee, that the parties intended that the agreement should be formally expressed in a single paper, which, when signed, should be the evidence of what had already been agreed upon. But neither party was entitled to insert in the paper any material condition not referred OFFER AND ACCEPTANCE. 713 to in tlie correspondence, and if it was inserted without the consent of the other party it was unauthorized. Hence the defendant, by insisting upon further material conditions, not expressed or implied in the correspondence, defeated the inten- tion to reduce the agreement to the form of a single paper signed by both parties. The plaintiffs then had the right to fall back upon their written proposition, as originally made, and the subsequent letters and telegrams; and, if they consti- tuted a contract of themselves, the absence of the formal agree- ment contemplated was not, under the circumstances, material. "When the parties intend that a mere verbal agreement shall be finally reduced to writing, as the evidence of the terms of the contract, it may be true that nothing is binding upon either party until the writing is executed. But here the contract was already in writing, and it was none the less obligatory upon both parties because they intended that it should be put into , another form, especially when their intention is made impos- sible by the act of one or the other of the parties by insisting upon the insertion of conditions and provisions not contemplated or embraced in the correspondence. Vassar v. Camp, 11 N. Y. 441 ; ' Brown v. Norton, 50 Hun, 248 ; Pratt v. Railroad Co., 21 N. Y. 308. The principle that governs in such cases was clearly stated by Judge Selden in the case last cited, in these words: "A contract to make and execute a certain written agreement, the terms of which are mutually under- stood and agreed upon, is, in all respects, as valid and obliga- tory, where no statutory objection interposes, as the written contract itself would be, if executed. If, therefore, it should appear that the minds of the parties had met; that a propo- sition for a contract had been made by one party and ac- cepted by the other; that the terms of this contract were in all respects definitely understood and agreed upon, and that a part of the mutual understanding was that a written contract embodying these terms should be drawn and executed by the respective parties, — this is an obligatory contract, which neither party is at liberty to refuse to perform." In this case it is apparent that the minds of the parties met, through the correspondence, upon all the terms, as well as the 714 FORMATION OF CONTRACT. subject-matter, of the contract, and that the subsequent failure to reduce this contract to the precise form intended, for the reason stated, did not affect the obligations of either party, which had already attached, and they may now resort to the primary evidence of their mutual stipulations. Any other rule would always permit a party who has entered into a contract like this, through letters and telegraphic messages, to violate it whenever the understanding was that it should be reduced to another written form, by simply suggesting other and addi- tional terms and conditions. If this were the rule the contract would never be completed in cases where, by changes in the market, or other events occurring subsequent to the written negotiations, it became the interest of either party to adopt that course in order to escape or evade obligations incurred in the ordinary course of commercial business. A stipulation to reduce a valid written contract to some other form cannot be used for the purpose of imposing upon either party additional burdens or obligations, or of evading the performance of those things which the parties have mutually agreed upon by such means as made the promise or assent binding in law. There was no proof of any custom existing between the shippers and consignees of such property in regard to the payment of the expense of firing, lining, and haying the cars. If it be said that such precautions are necessary in order to protect the property while in transit, that does not help the defendant. The question still remains, who was to bear the expense ? The plaintiffs had not agreed to pay it, any more than they had agreed to pay the freight or incur the other expenses of trans- portation. The plaintiffs sent a plain proposition which the defendant accepted without any such conditions as it subse- quently sought to attach to it. That the parties intended to make and sign a final paper does not warrant the inference that they also intended to make another and different agree- ment. The defendant is in no better position than it would be in case it had refused to sign the final writing without alleg- ing any reasons whatever. The principle, therefore, which .is involved in the case, is this : Can parties who have exchanged letters and telegrams OFFER AND ACCEPTANCE. 715 with a view to an agreement, and have arrived at a point where a clear and definite proposition is made on the one side and accepted on the other, with an understanding that the agreement shall be expressed in a formal writing, ever be bound until that writing is signed? If they are at liberty to repudiate the proposition or acceptance, as the case may be, at any time before the paper is signed, and as the market may go up or down, then this case is well decided. But if, at the close of the correspondence, the plaintiffs became bound by their offer, and the defendant by its acceptance of that offer, whether the final writing was signed or not, as I think they did, under such circumstances as the record discloses, then the con- clusion of the learned referee was erroneous. To allow either party to repudiate the obligations clearly expressed in the correspondence, unless the other will assent to material con- ditions, not before referred to, or to be implied from the trans- action, would be introducing an element of confusion and uncertainty into the law of contract. If the parties did not become bound in this case, they cannot be bound in any case until the writing is executed. The judgment should be reversed, and a new trial granted, costs to abide the event. All concur, except Eael, Gray, and Baetlett, JJ., dissenting. Judgment reversed. (Pp. 29 and 57) Acceptance and revocation by mail and telegraph. (pp. 35 and 62) BEAUEE V. SHAW.^ 168 MASSACHUSETTS, 198. — 1897. Two actions by William W. Brauer and others against Frank Shaw and others for breach of contracts. The cases were tried together, and a verdict ordered for defendants. Plaintiffs except. Holmes, J. These are two actions of contract on alleged contracts letting all the cattle-carrying space on the Warren 1 Approved in Commonwealth, etc., Ins. Co. v. Knabe Co., 171 Mass. 265, 270. 716 FORMATION OF CONTRACT. Line of steamships for tlie May sailings from Boston to Liver- pool, the first contract at the rate of fifty shillings a head, the second and alternative one at fifty -two shillings and six pence. As we are all of opinion that, for one reason or another, the right to recover upon the first contract is not made out, it may be stated shortly. On April 15, 1892, after earlier corre- spondence, the defendants wrote, stating terms, saying that they had telegraphed that they " would probably accept 60s., if reply promptly," referring to an answer asking to have the space kept until noon the next day, and to their reply that they would " try to keep space for you," and adding that there were several cus- tomers, and that they should feel "duty bound to let it to the first man making the best bid." The plaintiffs' agents tele- graphed at fifty-three minutes past eight the next morning, mak- ing a modified offer. Whether they had received the above letter does not appear. The defendants answered, " Eef erring our letter yesterday, first offer for number named has preference, three parties considering. Wire quick if you want it." This was received in the New York telegraph office at fifteen minutes past ten. At twenty minutes past ten the plaintiffs' agents telegraphed, "Have closed all your May spaces as per letter," etc. This is relied on as making the contract. It does not appear whether the telegram which arrived only five minutes before had been received. If not, and, if the last telegram was in answer to the letter only, the plaintiffs would encounter the question whether the letter contained an absolute offer or only Lavited one, and, if the former, whether the offer had not been rejected by the modified offer in the first telegram mentioned. However this may be, the parties did not stop at the point which we have reached, but went on telegraphing as we shall state ; so that, if there was any moment when a contract had been made, the parties assumed the contrary, and continued their bargaining. Either no contract had been made thus far, or it was discharged by the conduct of the parties. It was treated as discharged in a letter of the plaintiffs' agents written later on the same day. We come, then, to the later telegrams of the same day, which are relied on as making the second contract. At half past eleven the defendants telegraphed, " Subject prompt reply, will let you OFFER AND ACCEPTANCE. 717 May space, fifty-two six." This was received in New York at sixteen minutes past twelve, and at twenty-eight minutes past twelve a reply was sent accepting the offer. For some reason this was not received by the defendants until twenty minutes past one. At one the defendants telegraphed, revoking their offer, the message being received in New York at forty-three minutes past one. The plaintiffs held the defendants to their bargain, and both parties stand upon their rights. There is no doubt that the reply was handed to the telegraph company promptly, and, at least, it would have been open to a jury to find that the plaintiffs had done all that was necessary on their part to complete the contract. If, then, the offer was outstanding when it was accepted, the contract was made. But the offer was outstanding. At the time when the acceptance was received, even the revocation of the offer had not been received. It seems to us a reasonable requirement that, to disable the plain- tiffs from accepting their offer, the defendants should bring home to them actual notice that it had been revoked. By their choice and act, they brought about a relation between themselves and the plaintiffs, which the plaintiffs could turn into a contract by an act on their part, and authorized the plaintiffs to understand and to assume that that relation existed. When the plaintiffs, acted in good faith on the assumption, the defendants could not complain. Knowingly to lead a person reasonably to suppose that you offer, and to offer, are the same thing. O'Donnell v. Clinton, 145 Mass. 461, 463 ; Cornish v. Ahington, 4 Hurl. & N. 549. The offer must be made before the acceptance, and it does- not matter whether it is made a longer or a shorter time before, if, by its ' express or implied terms, it is outstanding at the time of the acceptance. Whether much or little time has inter- vened, it reaches forward to the moment of the acceptance, and speaks then. It would be monstrous to allow an inconsistent act of the offerer, not known or brought to the notice of the offeree, to affect the making of the contract; for instance, a sale by an agent elsewhere one minute after the principal personally has offered goods which are accepted within five minutes by the per- son to whom he is speaking. The principle is the same when the time is longer, and the act relied on a step looking to, but not yet 718 FORMATION OF CONTRACT. giving notice. The contrary suggestion by Wilde, J., in McCulloch V. Insurance Co. (1 Pick. 278, 279), is not adopted as a ground of decision, and the view which we take is that taken by the supreme court of the United States, and is now the settled law of England. Tayloe v. Insurance Co., 9 How. 390, 400; Patrick v. Bowman, 149 U. S. 411, 424 ; Byrne v. Van Tienhoven, 5 C. P. Div. 344 ; Stevenson v. McLean, 5 Q. B. Div. 346; Henthorne v. Fraser, [1892] 2 Ch. 27; Thomson v. James, 18 Ct. of Sess. Cas. (2d Series) 1 ; Langdell Cont. § 180 ; Drew v. Nunn, 4 Q. B. Div. 661, 667 ; Wheat v. Cross, 31 Md. 99, 103 ; Kempner v. Cohn, 47 Ark. 519, 527. It is unnecessary to consider other reasons which were urged for our decision. Exceptions sustained. (p. 62) Acceptance ofoffer of reward. (p. 67) VITTY V. ELEY. 61 N. Y. APPELLATE DIVISION, 44. — 1900. Appeal by the plaintiff, John Vitty, from a judgment of the County Court of Niagara county in favor of the defendant, entered in the of&ce of the clerk of the county of Niagara on the 9th day of December, 1899, affirming the judgment of a justice of the peace. Spring, J. The defendant is trustee of a school district in the town of Lockport. In January, 1899, the schoolhouse in this dis- trict was broken into by one Joe White and a quantity of prop- erty stolen therefrom or destroyed. The trustee, probably by authority of the citizens of the district, although his authority is not in question, offered a reward of twenty -five dollars " for the arrest and conviction of the party or parties " who perpetrated the crime. The evidence shows that White and the plaintiff lived together and were cronies. White, after breaking into the schoolhouse in the night, returned to the plaintiff's house bring- ing with him chalk, flags, window-catches and other stuff which he had taken from the schoolhouse. He also had two chickens, evidently stolen, which were eaten in the household. The plain- OFFER AND ACCEPTANCE. 719 tiff saw White bum two of these flags and secrete the other stuff under a board of the floor. White told the plaintiff not to " say anything about this." The testimony, therefore, shows that the plaintiff knew that White had stolen this stuff. Later on, after the reward and with iiotice of it, he testified that he told the bar- tender in the saloon of Mahar & Byrnes that Joe White broke into the schoolhouse ; that Peter Hayes, who was working up the case, was called in from the back room, and the plaintiff then voluntarily told him what he had seen, .incriminating White. Hayes contradicted the plaintiff and said he was called from the back room and the following occurred: "I said, 'I want you to come up to the sheriff's office and make a statement as to what you know about breaking into this schoolhouse.' He says, ' I don't know anything about it ; I was home in bed the night the schoolhouse was broken into.' I said, ' From what I hear, either you or Joe or both of you went into that schoolhouse.' He said, ' I didn't go in there.' I said, ' If you don't come up to the sheriff's office and tell what you know about it, I will swear out a warrant against you.' He said that if he told what he knew about it, he would have no place to stay. I said, ' I will find you a place to stay, come with me,' and we went to the courthouse and called the sheriff out. I said, ' This man will make a state- ment.' We went into a side room. He said about what he testi- fied this forenoon." If his version of the transaction is correct, the plaintiff did not voluntarily give up the information with the expectation of obtaining the reward, but it was extorted from him through fear that he might be arrested himself for complicity with White. There is considerable contrariety in the decisions as to the real basis of the right to a reward. It, however, seems to be settled in this State that it is in the nature of a contract inuring to the benefit of the person who gives the information. A few princi- ples out of the conflicting cases I think may be stated, although there is no uniformity among them. 1. The information must be given with knowledge of the reward. Fitch v. Snedaker, 38 N. Y. 248 ; Howland v. Lounds, 61 Id. 604. I think the evidence warrants the conclusion that plaintiff 720 FORMATION OF CONTRACT. knew of the reward, although that is a little shadowy, for appar- ently he could not read. 2. As I have suggested, it is a contract obligation. This being so, it must be the voluntary giving up of the information by the person. If corkscrewed out of him by threats inducing fear of prosecution, I take it no recovery could be had. That would destroy the contract element. In the early English case of Wil- liams V. CarKcmUne (4 Barn. & Aid. 621) the question of the motive was held to be unimportant, but the text writers and American authorities do not seem to have followed this doctrine strictly, although I find no case in this State distinctly overruling it. That case cannot be good law if the liability is contractual, as assent and a voluntary surrender of the information would be essential. 3. The authorities hold that the information must be imparted with a view to obtaining the reward. 18 Ency. of PL & Pr. 1155; Hewitt V. Anderson,^ 56 Cal. 476. And in Howland v. Lounds {supra) the court says at page 609 : " That a party claim- ing a reward of this character must give some information or do something having some reference to the reward offered, is very obvious. The action is, in fact, upon contract. Where a con- tract is proposed to all the world, in the form of a proposition, any party may assent to it and it is binding, but he cannot assent without knowledge of the proposition." In the present case the plaintiff does not claim that there was any talk between him and Hayes to the effect that he expected the reward. The information given by the plaintiff 1 In Hewitt v. Anderson (56 Cal. 476) the court says : "The plaintiff, on the trial, testified that he did do the acts upon which he bases his claim to the reward with a view to obtaining it. On the other hand, there was evi- dence introduced by the defendants which tended to prove that the plaintiff had stated, under oath, that he had not expected any reward. In view of that conflict, we would not disturb a finding either way. And we are satis- fied that under that finding the plaintiff cannot recover in this action. If he did not do the acts upon which he now bases his right to recover, with the intention of claiming the reward in the event of his accomplishing what would entitle him to it, he cannot recover it. If he had not known that a reward had been offered, he might, upon the authority of some cases, recover. But we are not aware of any case in which it has been held that a party, after disclaiming any intention to claim a reward, could recover it." FORM: STATUTE OF FRAUDS. 721 was undoubtedly valuable, and even essential to secure the con- viction of White. The justice, however, on conflicting evidence. Or upon inferences properly deducible from the evidence, has decided adversely to the plaintiff. This decision implies that he reached the conclusion that the information was imparted through fear of arrest, or without any expectation of receiving the reward. The conclusion is supported by the proofs, and we are not inclined to interfere with the disposition of the case made by the justice. The judgment is affirmed, with costs to the respondent. All concurred. Judgment affirmed, with costs. (P. 120) Agreements not to be performed within a year. WAENER V. TEXAS & PACIFIC EY. CO. 164 UNITED STATES, 418. — 1896. In Error to the United States Circuit Court of Appeals for the Fifth Circuit. This was an action brought May 9, 1892, by Warner against the Texas & Pacific Railway Company, a corporation created by the laws of the United States, upon a contract made in 1874, by which it was agreed between the parties that, if the plaintiff would grade the ground for a switch, and put on the ties, at a certain point on the defendant's railroad, the defend- ant would put down the rails, and maintain the switch for the plaintiff's benefit for shipping purposes as long as he needed it. The defendant pleaded that the contract was oral and within the statute of frauds, because it was "not to be performed within one year from the making thereof," and because it was " a grant or conveyance by this defendant of an estate of inheritance, and for a term of more than one year, in lands." At the trial, the plaintiff, being called as a witness in his own behalf, testified that in 1874 the defendant's agent made an oral contract with him, by which it was agreed that, if he would fur- 722 FORMATION OF CONTRACT. nish the ties and grade the ground for the switch, the defendant would put down the iron rails and maintain the switch for the plaintiff's benefit for shipping purposes, as long as he needed it; that the plaintiff immediately graded the ground for the switch, and got out and put down the ties, and the defendant put down the iron rails, and established the switch ; and that the plaintiff, on the faith of the continuance of transportation facilities at the switch, put up a large sawmill, bought many- thousand acres of land and timber rights and the water privi- leges of Big Sandy creek, made a tram road three miles long from the switch to the creek, and otherwise expended large sums of money, and sawed and shipped large quantities of lumber, until the defendant, on May 19, 1887, while its road was operated by receivers, tore up the switch and ties, and destroyed his transportation facilities, leaving his lands and other property without any connection with the railroad. His testimony also tended to prove that he had thereby been injured to the amount of more than f 60,000, for which the defendant was liable, if the contract sued on was not within the statute of frauds. On cross-examination, the plaintiff testified that when he made the contract he expected to engage in the manufacture of lumber at this place for more than one year, and to stay there, and to have a site for lumber there, as long as he lived; and that he told the defendant's agent, in the conversation between them at the time of making the contract, that there was lumber enough in sight on the railroad to run a mill for ten years, and by moving back to the creek there would be enough to run a mill for twenty years longer. No other testimony being offered by either party bearing npon the question whether the contract sued on was within the statute of frauds, the Circuit Court, against the plaintiff's objection and exception, ruled that the contract was within the statute, instructed the jury to find a verdict for the defendant, and rendered judgment thereon, which was affirmed by the Circuit Court of Appeals, upon the ground that the contract was within the statute of frauds, as one not to be performed within a year. (13 U. S. App. 236, 54 Ted. 922.) The plaintiff sued out this writ of error. FORM : STATUTE OF FRAUDS. 723 Mr. Justice Gray, after stating the case, delivered the opin- ion of the court. The statute of frauds of the State of Texas, re-enacting, in this particular, the English statute of 29 Car. II. c. 3, § 4 (1677), pro- vides that no action shall be brought " upon any agreement which is not to be performed within the space of one year from the mak- ing 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 by some person by him thereunto lawfully authorized." Tex. St. January 18, 1840 ; 1 Pasch. Dig. (4th ed.) art. 3875 ; Eev. St. 1879, art. 2464 ; Bason v. Hughart, 2 Tex. 476, 480. This case has been so fully and ably argued, and the con- struction of this clause of the statute of frauds has so seldom come before this court, that it will be useful, before considering the particular contract now in question, to refer to some of the principal decisions upon the subject in the courts of England, and of the several States. In the earliest reported case in England upon this clause of the statute regard seems to have been had to the time of actual performance in deciding that an oral agreement that, if the plaintiff would procure a marriage between the defendant and a certain lady, the defendant would pay him fifty guineas, was not within the statute ; Lord Holt saying : " Though the promise depends upon a contingent, the which may not hap- pen in a long time, yet, if the contingent happen within a year, the action shall be maintainable, and is not within the statute." Francam v. Foster, (1692) Skin. 326 ; S. C, Holt, 25. A year later, another case before Lord Holt presented the question whether the words, "agreement not to be performed within one year," should be construed as meaning every agree- ment which need not be performed within the year, or as mean- ing only an agreement which could not be performed within the year, and thus, according as the one or the other construc- tion should be adopted, including or excluding an agreement which might or might not be performed within the year, with- out regard to the time of actual performance. The latter was decided to be the true construction. 72 i FORMATION OF CONTRACT. That was an action upon an oral agreement, by which the defendant promised, for one guinea paid, to pay the plaintiff so many at the day of his marriage ; and the marriage did not happen within the year. The case was considered by all the judges. Lord Holt " was of opinion that it ought to have been in writing, because the design of the statute was, not to trust to the memory of witnesses for a longer time than one year.'' But the great majority of the judges were of opinion that the statute included those agreements only that were impossible to be performed within the year, and that the case was not within the statute, because the marriage might have happened within a year after the agreement; and laid down this rule: "Where the agreement is to be performed upon a contingent, and it does not appear within the agreement that it is to be per- formed after the year, then a note in writing is not necessary, for the contingent might happen within the year ; but where it appears by the whole tenor of the agreement that it is to be performed after the year, there a note is necessary." Peter V. Comptmi, (1693) Skin. 353 ; S. C, Holt, 326, cited by Lord Holt in Smith v. Westall, 1 Ld. Eaym. 316, 317; Anon., Comyn, 49, 50; Comb. 463. Accordingly, about the sahie time, all the judges held that a promise to pay so much money upon the return of a certain ship, which ship happened not to return within two years after the promise made, was not within the statute, "for that by possibility the ship might have returned within a year; and although by accident it happened not to return so soon, yet, they said, that clause of the statute extends only to such promises where, by the express appointment of the party, the thing is not to be performed within a year." Anon., 1 Salk. 280. Again, in a case in the king's bench in 1762, an agreement to leave money by will was held not to be within the statute, although uncertain as to the time of performance. Lord Mans- field said that the law was settled by the earlier cases. Mr. Justice Denison said : " The statute of frauds plainly means an agreement not to be performed within the space of a year, and expressly and specifically so agreed. A contingency is not within it; nor any case that depends upon contingency. It does not FORM : STATUTE OF FRAUDS. 725 extend to cases where the thing only may be performed within the year ; and the act cannot be extended further than the words of it." And Mr. Justice Wilmot said that the rule laid down in 1 Salk. 280, above quoted, was the true rule. Fenton v. Emblers, 3 Burrows, 1278 ; S. C, 1 W. Bl. 353. It thus appears to have been the settled construction of this clause of the statute in England, before the Declaration of Inde- pendence, that an oral agreement which, according to the inten- tion of the parties, as shown by the terms of the contract, might be fully performed within a year from the time it was made, was not within the statute, although the time of its performance was uncertain, and might probably extend, and be expected by the parties to extend, and did in fact extend, beyond the year. The several states of the Union, in re-enacting this provision of the statute of frauds in its original words, must be taken to have adopted the known and settled construction which it had received by judicial decisions in England. Tucker v. Oxley, 5 Cranch, 34, 42 ; Pennock v. Dialogue, 2 Pet. 1, 18 ; McDonald V. Hovey, 110 U. S. 619, 628. And the rule established in Eng- land by those decisions has ever since been generally recognized in England and America, although it may, in a few instances, have been warped or misapplied. The decision in Boydell v. Drummond (1809) 11 East, 142, which has been sometimes supposed to have modified the rule, was really in exact accordance with it. In that case the dec- laration alleged that the Boydells had proposed to publish by subscription a series of large prints from some of the scenes of Shakespeare's plays, in eighteen numbers containing four plates each, at the price of three guineas a number, payable as each was issued, and one number, at least, to be annually published after the delivery of the first; and that the defendant became a subscriber for one set of prints, and accepted and paid for two numbers, but refused to accept or pay for the rest. The first prospectus issued by the publishers stated certain conditions, in substance as set out in the declaration, and others showing the magnitude of the undertaking, and that its completion would unavoidably take a considerable time. A second prospectus stated that one number, at least, should be published annually, 726 FORMATION OF CONTRACT. and tlie proprietors were confident that they should be enabled to produce two numbers within the course of every year. The book in which the defendant subscribed his name had only, for its title, " Shakespeare Subscribers. Their signatures," without any reference to either prospectus. The contract was held to be within the statute of frauds, as one not to be performed within a year, because, as was demonstrated in concurring opinions of Lord Ellenborough and Justices Grose, LeBlanc, and Bayley, the contract, according to the understanding and contemplation of the parties, as manifested by the terms of the contract, was not to be fully performed (by the completion of the whole work) within the year ; and consequently, a full cojnpletion within the year, even if physically possible, would not have been according to the terms or the intent of the contract, and could not have entitled the publishers to demand immediate payment of the whole sub- scription. In Wells V. Norton, (1826) 4 Bing. 40 ; S. C, 12 Moore, C. P. 177, it was held to be settled by the earlier authorities that an agreement by which a debtor, in consideration of his creditor's agreeing to forbear to sue him during his lifetime, promised that his executor should pay the amount of the debt, was not within the statute ; and Chief Justice Best said : " The present case is clearly distinguishable from Boydell v. Brummond, where, upon the face of the agreement, it appeared that the contract was not to be executed within a year." In Souch V. Strawhridge, (1846) 2 C. B. 808, a contract to sup- port a child, for a guinea a month, as long as the child's father should think proper, was held not; to be within the statute, which, as Chief Justice Tindal said, "speaks of 'any agreement that is not to be performed within the space of one year from the making thereof ; ' pointing to contracts the complete performance of which is of necessity extended beyond the space of a year. That appears clearly from the case of Boydell v. Drummond, the rule to be extracted from which is that, when the agreement distinctly shows, upon the face of it, that the parties contemplated its performance to extend over a greater space of time than one year, the case is within the statute ; but that, where the contract is such that the whole may be performed within a year, and FORM : STATUTE OF FRAUDS. 727 there is no express stipulation to the contrary, the statute does not apply." In Murphy v. O'Sullivm, (1866) 11 Ir. Jur. (N. S.) Ill, the court of exchequer chamber in Ireland, in a series of careful opinions by Mr. Justice O'Hagan (afterwards Lord Chancellor of Ireland), Baron Fitzgerald, Chief Baron Pigot, and Chief Justice Monahan, reviewing the English cases, held that under the Irish statute of frauds of 7 Wm. III. c. 12 (which followed in this respect the words of the English statute), an agreement to maintain and clothe a man during his life was not required to be in writing. ' In the recent case of McGh-egor v. McGregor, (1888) 21 Q. B. Div. 424, the English court of appeal held that a lawful agree- ment made between husband and wife, in compromise of legal proceedings, by which they agreed to live apart, the husband agreeing to allow the wife a weekly sum for maintenance, and she agreeing to maintain herself and her children, and to indem- nify him against any debts contracted by her, was not within the statute. Lord Esher, '^.. E.., thought the true doctrine on the subject was that laid down by Chief Justice Tindal in the pas- sage above quoted from Souch v. Strawbridge. Lord Justice Lind- ley said : " The provisions of the statute have been construed in a series of decisions from which we cannot depart. The effect of these decisions is that, if the contract can by possibility be per- formed within the year, the statute does not apply." Lord Jus- tice Bowen said : " There has been a decision which for 200 years has been accepted as the leading case on the subject. In Peter v. Compton it was held that 'an agreement that is not to be per- formed within the space of a year from the making thereof means, in the statute of frauds, an agreement which appears from its terms to be incapable of performance within the year." And each, of the three judges took occasion to express approval of the decision in Murphy v. 0' Sullivan, above cited, and to disap- prove the opposing decision of Hawkins, J., in Davey v. Shannon, 4 Exch. Div. 81. The cases on this subject in the courts of the several states are generally in accord with the English cases above cited. They are so numerous, and have been so fully collected in 728 FORMATION OF CONTRACT. Browne on the Statute of Frauds (5th ed. c. 13), that we shall refer to but few of them, beyond those cited by counsel in the case at bar. [The court then states Peters v. Westborougli, ante, p. 120.] In many other States, agreements to support a person for life have been held not to be within the statute. Browne, St. Frauds, c. 13, § 276. The decision of the Supreme Court of Tennessee in Deaton v. Coal Co. (12 Heisk. 650), cited by the defendant in error, is opposed to the weight of authority. [The court then discusses Roberts v. Rockbottom Co., 7 Met. (Mass.) 46; Blanding v. Sargent, 33 N. H. 239; Hinckley v. Southgate, 11 Vt. 428 ; Linscott v. Mclntire, 15 Me. 201 ; Herrin V. Butters, 20 Me. 119 ; Broadwell v. Oetman, 2 Denio (N. Y.) 87 ; Pitkin v. Long Island Railroad Co., 2 Barb. Ch. (N. Y.) 221 ; Kent V. Kent, 62 N. Y. 560 ; Saunders v. Kastenbine, 6 B. Mon. (Ky.) 17 ; Railway Co. v. Whitley, 54 Ark. 199 ; Sweet v. Lumber Co., 56 Ark. 629.] The construction and application of this clause of the statute of frauds first came before this court at December term, 1866, in Packet Co. v. Sickles (5 Wall. 680), which arose in the Dis- trict of Columbia under the statute of 29 Car. II. c. 3, § 4, in force in the state of Maryland and in the District of Columbia. Alex. Br. St. Md. 609; Ellicott v. Peterson, 13 Md. 476, 487; Comp. St. D. C. c. 23, § 7. That was an action upon an oral contract, by which a steam- boat company agreed to attach a patented contrivance, known as the " Sickles Cut-OfE," to one of its steamboats, and, if it should effect a saving in the consumption of fuel, to use it on that boat during the continuance of the patent, if the boat should last so long; and to pay the plaintiffs weekly, for the use of the cut-off, three-fourths of the value of the fuel saved, to be ascertained in a specified manner. At the date of the contract the patent had twelve years to run. The court, in an opinion delivered by Mr. Justice Nelson, held the contract to be within the statute, and said : " The substance of the contract is that the defendants are to pay in money a certain proportion of the ascertained value of the fuel saved at stated intervals throughout the period of twelve years, if the boat to which FORM : STATUTE OF FRAUDS. 729 the cut-off is attached should last so long." " It is a contract not to be performed within the year, subject to a defeasance by the happening of a certain event, which might or might not occur within that time." (5 Wall. 694-596.) And refer- ence was made to Birch v. Liverpool (9 Barn. & C. 392) and Dobson V. Collis (1 Hurl. & N". 81), in each of which the agree- ment was for the hire of a thing, or of a person, for a term specified of more than a year, determinable by notice within the year, and therefore within the statute, because it was not to be performed within a year, although it was defeasible within that period- In Packet Co. v. Sickles it appears to have been assumed, almost without discussion, that the contract, according to its true construction, was not to be performed in less than twelve years, but defeasible by an event which might or might not happen within that time. It may well be doubted whether that view can be reconciled with the terms of the contract itself, or with the general current of the authorities. The contract, as stated in the forepart of the opinion, was to use and pay for the cut-off upon the boat "during the continuance of the said patent, if the said boat should last so long." (5 Wall. 581, 594.) The terms " during the continuance of " and " last so long " would seem to be precisely equivalent, and the full per- formance of the contract to be limited alike by the life of the patent and by the life of the boat. It is difficult to understand how the duration of the patent and the duration of the boat differed from one another in their relation to the performance or the determination of the contract ; or how a contract to use an aid to navigation upon a boat so long as she shall last can be distinguished in principle from a contract to support a man so long as he shall live, which has been often decided, and is generally admitted, not to be within the statute of frauds. At October term, 1877, this court, speaking by Mr. Justice Miller, said: "The statute of frauds applies only to contracts which, by their terms, are not to be performed within a year, and does not apply because they may not be performed within that time. In other words, to make a parol contract void, it must be apparent that it was the understanding of the parties 730 FORMATION OF CONTRACT. that it was not to be performed within a year from the time it was made." And it was therefore held, in one case, that a contract by the owner of a valuable estate, employing lawyers to avoid a lease thereof, and to recover the property, and prom- isiag to pay them a certain sum out of the proceeds. of the land when recovered and sold, was not within the statute, because all this might have been done within a year ; and, in another case, that a contract, made early in November, 1869, to furnish all the stone required to build and complete a lock and dam which the contractor with the State had agreed to complete by September 1, 1871, was not within the statute, because the contractor, by pushing the work, might have fully completed it before November, 1870. McPherson v. Cox, 96 U. S. 404, 416, 417 ; Walker v. Johnson, Id. 424, 427. In Texas, where the contract now in question was made, and this action upon it was tried, the decisions of the Supreme Court of the State are iu accord with the current of decisions else- where. [The court then discusses Thouvenin v. Lea, 26 Tex. 612; Tfiomas v. Hammond, 47 Tex. 42; Weatherford, &c. Railway Co. V. Wood, 88 Tex. 191. J In the case at bar, the contract between the railroad com- pany and the plaintiff, as testified to by the plaintiff himself, who was the only witness upon the point, was that, if he would furnish the ties and grade the ground for the switch at the place where he proposed to erect a sawmill, the railroad com- pany would " put down the iron rails and maintain the switch for the plaintiff's benefit for shipping purposes as long as he needed it." The parties may well have expected that the contract would continue in force for more than one year. It may have been very improbable that it would not do so ; and it did in fact continue in force for a much longer time. But they made no stipulation which, in terms, or by reasonable inference, required that result. The question is not what the probable, or expected, or actual per- formance of the contract was, but whether the contract, accord- ing to the reasonable interpretation of its terms, required that it should not be performed within the year. No definite term of FORM : STATUTE OF FRAUDS. 731 time for the performance of the contract appears to have been mentioned or contemplated by the parties, nor was there any agreement as to the amount of himber to be sawed or shipped by the plaintiff, or as to the time during which he should keep up his mill. The contract of the railroad company was with, and for the benefit of, the plaintiff personally. The plaintiff's own testimony shows (although that is not essential) that he understood that the performance of the contract would end with his own life. The obligation of the railroad company to maintain the switch was in terms limited and restricted by the qualification " for the plain- tiff's benefit for shipping purposes as long as he needed it," and no contingency which should put an end to the performance of the contract, other than his not needing the switch for the pur- pose of his business, appears to have been in the mouth or in the mind of either party. If, within a year after the making of the contract, the plaintiff had died, or had abandoned his whole busi- ness at this place, or for any other reason had ceased to need the switch for the shipping of lumber, the railroad company would have been no longer under any obligation to maintain the switch, and the contract would have been brought to an end by having been fully performed. The complete performance of the contract depending upon a contingency which might happen within the year, the contract is not within the statute of frauds as an " agreement which is not to be performed within the space of one year from the making thereof." Nor is it within the other clause of the statute of frauds, relied on in the answer, which requires certain conveyances of real estate to be in writing. The suggestion made in the argument for the defendant in error, that the contract was, in siibstance, a grant of an easement in real estate, and as such within the stat- ute, overlooks the difference between the English and the Texan statutes in this particular. The existing statutes of Texas, while they substantially follow the English statute of frauds, so far as to require a conveyance of any " estate of inheritance or freehold, or for a term of more than one year, in lands and tene- ments," as well as " any contract for the sale of real estate, or 732 FORMATION OF CONTRACT. the lease thereof for a longer term than one year," to be in -writ- ing, omit to re-enact the additional words of the English statute, in the clause concerning conveyances, " or any uncertain interest of, in, to, or out of " lands or tenements, and, in the other clause, "or any interest in or concerning them." St. 29 Car. II. c. 3, §§ 1, 4; Rev. St. Tex. 1879, arts. 548, 2464; Pasch. Dig. arts. 997, 3876 ; James v. Fulcrod, 5 Tex. 512, 516 ; Stuart v. Baker, 17 Tex. 417, 420 ; Anderson v. Powers, 59 Tex. 213. Judgment reversed, and case remanded to the Circuit Court, with directions to set aside the verdict, and to order a new trial.^ (P. 138) Adequacy of consideration. (p. ISO) EICKETTS V. SCOTHOEK 57 NEBRASKA, 51. —1898. Sullivan, J. In the District Court of Lancaster County the plaintiff Katie Scothorn recovered judgment against the defend- ant Andrew D. Eicketts, as executor of the last will and testa- ment of John C. Eicketts, deceased. The action was based upon a promissory note, of which the following is a copy : " May the first, 1891. I promise to pay to Katie Scothorn on demand, $2000 to be at 6 per cent per annum. "J. C. Eicketts." In the petition the plaintiff alleges that the consideration for the execution of the note was that she should surrender her employment as bookkeeper for Mayer Bros, and cease to work for a living. She also alleges that the note was given to induce her to abandon her occupation, and that, relying on it, and on the annual interest, as a means of support, she gave up the em- ployment in which she was then engaged. These allegations of the petition are denied by the executor. The material facts are 1 A contract to marry is not within this clause of the statute of frauds. Lewis V. Tapman (Md.), 45 Atl. 459 ; citing Derby v. Phelps, 2 N. H. 515 ; Nichols V. Weaver, 7 Kans. 373 ; Ullman v. Meyer, 10 Fed. Rep. 241 ; Con- tra, Brick v. Gannar, 36 Hun (N. Y.), 52 ; Blackburn v. Mann, 85 Hi. 222. CONSIDERATION. 73S undisputed. They are as follows : John C. Ricketts, the maker of the note, was the grandfather of the plaintiff. Early in May, — presumably on the day the note bears date, — he called on her at the store where she was working. What transpired between them is thus described by Mr. Flodene, one of the plaintiff's witnesses : A. Well the old gentleman came in there one morning about 9 o'clock, — probably a little before or a little after, but early in the morning, — and he unbuttoned his vest and took out a piece of paper in the shape of a note ; that is the way it looked to me ; and he says to Miss Scothorn, '' I have fixed out something that you have not got to work any more." He says, "None of my grandchildren work and you don't have to." Q. Where was she ? A. She took the piece of paper and kissed him ; and kissed the old gentleman and commenced to cry. It seems Miss Scothorn immediately notified her employer of her intention to quit work, and that she did soon after abandon her occupation. The mother of the plaintiff was a witness and testified that she had a conversation with her father, Mr. Eicketts,, shortly after the note was executed, in which he informed her that he had given the note to the plaintiff to enable her to quit, work; that none of his grandchildren worked and he did not think she ought to. For something more than a year the plain- tiff was without an occupation ; but in September, 1892, with the- consent of her grandfather, and by his assistance, she secured a position as bookkeeper with Messrs. Funke & Ogden. On June 8, 1894, Mr. Eicketts died. He had paid one year's interest on the note, and a short time before his death expressed regret that he had not been able to pay the balance. In the summer or fall of 1892, he stated to his daughter, Mrs. Scothorn, that if he could sell his farm in Ohio he would pay the note out of the proceeds. He at no time repudiated the obligation. We quite agree with counsel for the defendant that upon this evidence there was nothing to submit to the jury, and that a verdict should have been directed peremptorily for one of the parties. The testimony of Flodene and Mrs. Scothorn, taken together. 734 FORMATION OF CONTRACT. conclusively establishes the fact that the note was not given in consideration of the plaintiff pursuing, or agreeing to pursue, any- particular line of conduct. There was no promise on the part of the plaintiff to do or refrain from doing anything. Her right to the money promised in the note was not made to depend upon an abandonment of her employment with Mayer Bros, and future abstention from like service. Mr. Eicketts made no condition, requirement, or request. He exacted no quid pro quo. He gave the note as a gratuity and looked for nothing in return. So far , as the evidence discloses, it was his purpose to place the plaintiff in a position of independence, where she could work or remain idle as she might choose. The abandonment by Miss Scothorn of her position as bookkeeper was altogether voluntary. It was not an act done in fuliillment of any contract obligation assumed when she accepted the note. The instrument in siiit being given without any valuable consideration, was nothing more than a promise to make a gift in the future of the sum of money therein named. Ordinarily, such promises are not enforceable even when put in the form of a promissory note. Kirkpatrick v. Taylor, 43 111. 207 ; Phelps v. Phelps, 28 Barb. N. Y. 121 ; Johnston v. Griest, 85 Ind. 503 ; Fink v. Cox, 18 Johns. N". Y. 145. But it has often been held that an action on a note given to a church, college, or other like institution, upon the faith of which money has been expended or obligations incurred, could not be success- fully defended on the ground of a want of consideration.' Barnes v. Perine, 12 N. Y. 18 ; Philomath College v. Hartless, 6 Ore. 168 ; Thompson v. Mercer County, 40 111. 379 ; Irwin v. Lombard Uni- versity, 56 0. St. 9. In this class of cases the note in suit is nearly always spoken of as a gift or donation, but the decision is generally put on the ground that the expenditure of money or assumption of liability by the donee, on the faith of the promise, constitutes a valuable and sufficient consideration. It seems to us that the true reason is the preclusion of the defendant, under the doctrine of estoppel, to deny the consideration. Such seems to be the view of the matter taken by the supreme court of 1 See Presbyterian Church v. Cooper, 112 N. Y. 517, post, p. 756. CONSIDERATION. 735 Iowa in tlie case of Simpson Centenary College y. Tuttle (71 la. 596), where Eothrock, J., speaking for the court, said: "Where a note, however, is based on a promise to give for the support of the objects referred to, it may still be open to this defense [want of consideration], unless it shall appear that the donee has, prior to any revocation, entered into engagements or made expenditures based on such promise, so that he must suffer loss or injury if the note is not paid. This is based on the equitable principle that, after allowing the donee to incur obligations on the faith that the note would be paid, the doner would be estopped from pleading want of consideration." And in the case of Heimensnyder v. Gans (110 Pa. St. 17), which was an action on a note given as a donation to a charitable object, the court said : " The fact is that, as we may see from the case of Ryerss V. Trustees (33 Pa. St. 114), a contract of the kind here involved is enforceable rather by way of estoppel than on the ground of consideration in the original undertaking." It has been held that a note given in expectation of the payee performing certain services, but without any contract binding him to serve, will not support an action. Hulse v. Hulse, 84 Eng. Com. Law, 709. But when the payee changes his position to his disad- vantage, in reliance on the promise, a right of action does arise. McClure v. Wilson, 43 111. 356 ; Trustees v. Garvey, 53 111. 401. Under the circumstances of this case is there an equitable estoppel which ought to preclude the defendant from alleging that the note in controversy is lacking in one of the essential elements of a valid contract ? We think there is. An estoppel in pais is defined to be " a right arising from acts, admissions, or conduct which have induced a change of position in accord- ance with the real or apparent intention of the party against whom they are alleged." Mr. Pomeroy has formulated the following definition: "Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely pre- cluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, or contract, or of remedy, as against another person who in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires 736 FORMATION OF CONTRACT. some corresponding right either of property, of contract, or of remedy." 2 Pomeroy, Equity Jurisprudence, 804. According to the undisputed proof, as shown by the record before us, the plaintiff was a working girl, holding a position in which she earned a salary of f 10 per week. Her grandfather, de- siring to put her in a position of independence, gave her the note, accompanying it with the remark that his other grandchildren did not work, and that she would not be obliged to work any longer. In effect he suggested that she might abandon her employment and rely in the future upon the bounty which he promised. He, doubtless, desired that she should give up her occupation, but whether he did or not, it is entirely certain that he contemplated such action on her part as a reasonable and probable consequence of his gift. Having inten- tionally influenced the plaintiff to alter her position for the worse on the faith of the note being paid when due, it would be grossly inequitable to permit the maker, or his executor, to resist pay- ment on the ground that the promise was given without con- sideration. The petition charges the elements of an equitable estoppel, and the evidence conclusively establishes them. If errors intervened at the trial they could not have been prejudi- cial. A verdict for the defendant would be unwarranted. The judgment is right and is Affirmed.' (P. 157) Uncertainty. (p. 162) HART V. GEORGIA EAILEOAD COMPANY. 101 GEORGIA, 188.— 1897. Action by Eva F. Hart against the Georgia Railroad Company. A general demurrer to the complaint was sustained, and plaintiff brings error. Cobb, J. Mrs. Hart sued the Georgia Railroad Company, iln Hoshor v. Kautz, 19 Wash. 258, the defendant promised plaintifi $360 a year for four years if he would attend a specified university as a student. PlaintiS attended the university and this was held a sufficient consideration. CONSIDERATION. 737 alleging in her petition that the defendant was engaged as a common carrier in the carrying of passengers, and that an eating station for the comfort and convenience of passengers on the road was practically a necessity, and the establishment of such a station would be a great advantage to the road in increasing its popularity and patronage ; that the company, through its duly-authorized agent and officer, covenanted and agreed with her that, if she woiild erect at the station of Union Point a permanent and first-class eating house for the accommodation of the traveling public, and maintain the same in a first-class man- ner, the company, by the patronage of its road, would maintain and^support the same. In consideration of such representations and promises, and of the profits anticipated from the patron- age, she agreed to erect such a house, and maintain or cause it to be maintained in first-class style, promising further to accommodate the employes of said company thereat for a reduced price, to wit, 25 cents for meals, being one-half the regular price. It was further alleged that in accordance with the terms of the agreement a first-class hotel was erected and maintained, and that the contract was fully performed on her part. It was also alleged that said company discontinued stopping its trains for meals at Union Point until only one train was stopped for that purpose, the patronage of which was not sufficient to make the business of maintaining an eating house profitable; that the business was wholly dependent for support upon the patronage of the trains of the company, and could not be otherwise sustained; and since the stopping of the trains she is unable to conduct the business at all, and has lost the entire profits which could have been derived there- from, to the net annual value of $4000. To the declaration the defendant filed a general demurrer, which was sustained, and the plaintiff excepted. The contract as declared on contained an obligation on the part of the plaintiff to erect "a permanent and first-class hotel for the accommodation of the traveling public, and rpaintain the same in a first-class manner," and the obligation on the part of the road that it, "by the patronage of its road, would maintain and support the same." The whole of the alleged 738 FORMATION OF CONTRACT. parol contract is contained in the words quoted. What is a first-class hotel? How is a hotel maintained in a first-class manner ? What is the patronage of a road running trains day and night at a given point ? Is the stopping of every train necessary to maintain and support an eating house at such point ? If not, how many trains, and what trains ? Suppose the plaintiff had failed to erect an hotel, what character of building could she have been compelled to eil'ect tinder this contract? That she did erect an hotel which, in her opinion, was a first-class hotel, and that she did maintain the same in what she understood to be a first-class manner, cannot make certain and definite stipulations in the contract declared on, which are otherwise vague and indefinite. Construing the declaration as a whole, it is impossible to deterpiine with cer- tainty what was the contract between the parties, and there- fore it is impossible to determine what would be the damages arising from a failure to carry out the alleged contract. As the language alleged does not make a contract between the parties which is capable of enforcement, there was no error in dismissing the declaration on demurrer. Judgment affirmed.' (P. 177) Promise to perform existing contract. (p. 185) KING V. DULUTH, M. & N. EY. CO. 61 MINNESOTA, 482. — 1895. Start, C. J. This is an action brought by the plaintiff, as surviving partner of the firm of Wolf & King, to recover a 1 A contract to sell oil to plaintlfi on such reasonable terms as to enable him to compete with other dealers in the same territory, is too indefinite. Marble v. Standard Oil Co., 169 Mass. 553. A contract with a clause by which defendant agrees to renew provided plaintiff does such a business as defendant might " reasonably expect," is not too indefinite. Worthington V. Beeman, 91 Fed. R. 232. A contract to pay a divorced wife a fixed sum each month " so long as she shall conduct herself with sobriety, and in a respectable, orderly, and virtuous manner," is not too indefinite, and the wife's compliance with the condition is a sufficient consideration to support the promise. Dunton v. Dunton, 18 Vict. Law Rep. 114. CONSIDERATION. 739 balance claimed to be due for the construction of a portion of the defendant's line of railway. The complaint alleges two supposed causes of action, to each of which the defendant demurred on the ground that neither states facts constituting a cause of action. From an order overruling the demurrer the defendant appealed. 1. The complaint for a first cause of action alleges, among other things, substantially, that in January, 1893, the firm of Wolf & King entered into three written contracts with the president and representative of the defendant for the grading, clearing, grubbing, and construction of the roadbed of its rail- way for a certain stipulated price for each of the general items of work and labor to be performed ; that the firm entered upon the performance of such contracts, but in the latter part of February, 1893, in the course of such performance, unforeseen difficulties of construction, involving unexpected expenses, and such as were not anticipated by the parties to the contracts, were encountered. That the firm of Wolf & King found that by reason of such difficulties it would be impossible to complete the contracts within the time agreed upon without employing an additional and an unusual force of men and means, and at a loss of not less than $40,000 to them, and consequently they notified the representative of the defendant that they would be unable to go forward with the contracts, and unable to com- plete or prosecute the work. Thereupon such representative entered into an agreement with them modifying the written contracts, whereby he agreed that if they would "go forward and prosecute the said work of construction, and complete said contract," he would pay or cause to be paid to them an addi- tional consideration therefor, up to the full extent of the cost of the" work, so that they should not be compelled to do the work at a loss to themselves; that in consideration of such promise they agreed to forward the work rapidly, and force the same to completion, in the manner provided in the specifi- cations for such work, and referred to in such contracts. That in reliance upon the agreement modifying the former contracts, and in reliance upon such former contracts, they did prosecute and complete the work in accordance with the contracts as so 740 FORMATION OF CONTRACT. modified by the oral agreement, to the satisfaction of all parties in interest. That such contracts and the oral contract modi- fying them were duly ratified by the defendant, and that the actual cost of sach construction was not less than $30,000 in excess of the stipulated amount provided for in the original written contracts. It is claimed by appellant that the complaint shows no con- sideration for the alleged promise to pay extra compensation for the work ; that it is at best simply a promise to pay the contractors an additional compensation if they would do that which they were already legally bound to do. The general rule is that a promise of a party to a contract to do, or the doing of, that which he is already under a legal obligation to do by the terms of the contract is not a valid consideration to support the promise of the other party to pay an additional compensation for such performance. 1 Chit. Cont. 60 ; Pol. Cont. 176 (161) ; Leake, Cont. 621. In other words, a promise by one party to a subsisting contract to the opposite party to prevent a breach of the contract on his part is without consideration. The following cases sustain and illustrate the practical application of the rule. Ayres v. Railroad Co., 52 Iowa, 478, 3 N. W. 522 ; McGarty v. Association, 61 Iowa, 287, 16 N. W. 114; Lingen- felder v. Brewing Co., 103 Mo. 678, 16 S. W. 844 ; Vanderbilt V. Schreyer, 91 N. Y. 392 ; Reynolds v. Nugent, 25 Ind. 328 ; Robinson v. Jewett, 116 N. Y. 40, 22 N. E. 224 ; Wimer v. Worth Tp., 104 Pa. St. 317. If the allegations of the complaint, when taken together, are in legal effect simply that the contractors, finding by the test of experience in the prosecution of the work that they had agreed to do that which involved a greater expenditure of money than they calculated upon, that they had made a losing con- tract, and thereupon notified the opposite party that they were unable to proceed with the work, and he promised them extra compensation if they would perform their contract, the case is within the rule stated, and the demurrer ought to have been sustained as to the first cause of action. It is claimed, however, by the respondent, that such is not the proper construction of the complaint, and that its allegations CONSIDERATION. 741 bring the case within the rule adopted in several states, and at least approved in our own, to the effect that if one party to a contract refuses to perform his part of it unless promised some further pay or benefit than the contract provides, and such promise is made by the other party, it is supported by a valid consideration, for the making of the new promise shows a rescission of the original contract and the substitution of another. In other words, that the party, by refusing to perform his contract, thereby subjects himself to an action for damages, and the opposite party has his election to bring an action for the recovery of such damages or to accede to the demands of his adversary and make the promise ; and if he does so it is a relinquishment of the original contract and the substitution of a new one. Monroe v. Perkins, 9 Pick. 305 ; Bryant v. Lord, 19 Minn. 396 (Gil. 342) ; Moor v. Locomotive Works, 14 Mich. 266 ; Goebel v. Linn, 47 Mich. 489, 11 N. W. 284 ; Sogers v. Sogers, 139 Mass. 440, 1 N. E. 122. The doctrine of these cases as it is frequently applied does not commend itself either to our judgment or our sense of justice, for where the refusal to perform and the promise to pay extra compensation for performance of the contract are one transaction, and there are no exceptional circumstances making it equitable that an increased compensation should be demanded and paid, no amount of astute reasoning can change the plain fact that the party who refuses to perform, and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. To hold, under such circumstances, that the party making the promise for extra compensation is pre- sumed to have voluntarily elected to relinquish and abandon all of his rights under the original contract, and to substitute therefor the new or modified agreement, is to wholly disregard the natural inference to be drawn from the transaction, and invite parties to repudiate their contract obligations whenever they can gain thereby. There can be no legal presumption that such a transaction is a voluntary rescission or modification of the original contract. 742 FORMATION OF CONTRACT. for the natural inference to be drawn from it is otherwise in the absence of any equitable considerations justifying the demand for extra pay. In such a case the obvious inference is that the party so refusing to perform his contract is seeking to take advantage of the necessities of the other party to force from him a promise to pay a further sum for that which he is already legally entitled to receive. Surely it would be a travesty on justice to hold that the party so making the prom- ise for extra pay was estopped from asserting that the promise was without consideration. A party cannot lay the founda- tion of an estoppel by his own wrong. If it be conceded that by the new promise the party obtains that which he could not compel, viz. a specific performance of the contract by the other party, still the fact remains that the one party has obtained thereby only that which he was legally entitled to receive, and the other party has done only that which he was legally bound to do. How, then, can it be said that the legal rights or obligations of the party are changed by the new promise? It is entirely competent for the parties to a contract to modify or to waive their rights under it, and ingraft new terms upon it, and in such a case the promise of one party is the considerar tion for that of the other; but where the promise to the one is simply a repetition of a subsisting legal promise there can be no consideration for the promise of the other party, and there is no warrant for inferring that the parties have volun- tarily rescinded or modified their contract. But where the party refusing to complete his contract does so by reason of some unforeseen and substantial difficulties in the performance of the contract, which were not known or anticipated by the parties when the contract was entered into, and which cast upon him an additional burden not contemplated by the parties, and the opposite party promises him extra pay or benefits if he will complete his contract, and he so promises, the promise to pay is supported by a valid consideration. In such a case the natural inference arising from the transaction, if unmodified by any equitable considerations, is rebutted, and the presumption arises that by the voluntary and mutual promises of the parties their respective rights and obligations under the original con- CONSIDERATION. 743 tract are ■waived, and those of the new or modified contract substituted for them. Cases of this character form an excep- tion to the general rule that a promise to do that which a party i» already legally bound to do is not a su£B.cient considera- tion to support a promise by the other party to the contract to give the former an additional compensation or benefit. 1 Whart. Cont. § 600. On the other hand, where no unforeseen additional burdens have been cast upon a party refusing to perform his contract, which make his refusal to perform, unless promised further pay, equitable, and such refusal and promise of extra pay are all one transaction, the promise of further compensation is with- out consideration, and the case falls within the general rule, and the promise cannot be legally enforced, although the other party has completed his contract in reliance upon it. This proposition, in our opinion, is correct on principle and supported by the weight of authority. What unforeseen difiSculties and burdens will make a party's refusal to go forward with his contract equi- table, so as to take the case out of the general rule and bring it within the exception, must depend upon the facts of each particu- lar case. They must be substantial, unforeseen, and not within the contemplation of the parties when the contract was made. They need not be such as would legally justify the party in his refusal to perform his contract, unless promised extra pay, or to justify a court of equity in relieving him from the contract ; for they are sufficient if they are of such a character as to render the party's demand for extra pay manifestly fair, so as to rebut all inference that he is seeking to be relieved from an unsatisfactory contract, or to take advantage of the necessities of the opposite party to coerce from him a promise for further compensation. Inadequacy of the contract price which is the result of an error of judgment, and not of some exSusable mistake of fact, is not sufficient. The cases of MeecJi v. City of Buffalo (29 IST. T. 198), where the unforeseen difficulty in the execution of the contract was quicksand, in place of expected ordinary earth excavation, and Michaud v. MacGregor (61 Minn. 198), where the unforeseen obstacles were rocks below the surface of the lots to be exca- 744 FORMATION OF CONTRACT. vated, which did not naturally belong there, but were placed there by a third party, and of the existence of which both parties to the contract were ignorant when the contract was made, are illustrations of what unforeseen difficulties will take a case out of the general rule. Do the allegations of fact contained in plaintiff's first alleged cause of action bring his case within the exception? Clearly not; for eliminating all conclusions, and considering only the facts alleged, there is nothing' to make the case exceptional, other than the general statement that the season was so extraor- dinary that in order to do the stipulated work it would require great and unusual expense, involving a large use of powder and extra time and labor for the purpose of blasting out the frozen earth and other material which was encountered. What the character of this material was we are not told, or what the other extraordinary conditions of the ground were. The court will take judicial knowledge of the fact that frozen ground on the Missabe Range, where the work was to be performed, in the month of February, is not unusual or extraordinary. It was a matter which must have been anticipated by the parties, and taken into consideration by them when this contract was made. The most that can be claimed from the allegations of the com- plaint is that the contractors had made a losing bargain, and refused to complete their contract, and the defendant, by its representative, promised them that if they would go forward and complete their contract, it would pay them an additional compensation, so that the total compensation should be equal to the actual cost of the work. 2. The second cause of action is supported by a different and a valid consideration. It fairly appears from the allegations of the complaint as to this cause of action that the defendant, by chang- ing its line and by its defaults, had so far delayed the work of construction as to legally excuse the contractors from their obliga- tion to complete the work within the time originally agreed upon, and that to execute the work within such time would involve an additional expense. Thereupon, in consideration of their waiving the defaults and the delays occasioned by the defendant, and promising to complete the work in time, so that it could secure CONSIDERATION. 745 the bonds, it promised to pay or give to them the extra compensar tion. This was a legal consideration for such promise, and the allegations of the second general subdivision of the complaint state a cause of action. So much of the order appealed from as overruled the defendant's demurrer to the supposed first cause of action in the plaintiff's complaint must be reversed, and as to so much of it as overruled the demurrer to the second cause of action it must be af&rmed, and the case remanded to the district court of the county of St. Louis with the direction to modify the order ' appealed from so as to sustain the demurrer as to the first cause of action, with or without leave to the plaintiff to amend, as such court may deem to be just. So ordered.* (p. 177) Promise to perform existing contract. (p. 187) ABBOTT V. DOANE. 163 MASSACHUSETTS, 433. — 1895. Contract, upon a promissory note for $500. Defendant set up want of consideration. Verdict for plaintiff. Defendant alleged exceptions. Allen, J. The plaintiff had given his accommodation note to a corporation, which had had it discounted at a bank, and left it unpaid at its maturity. The defendant being a stockholder, •director, and creditor of the corporation, wishing to have the note paid at once for his own advantage, entered into an agree- ment with the plaintiff, whereby he was to give to the plaintiff his own note for the amount, and the plaintiff was to furnish money to enable the defendant to take up the note at the bank. This agreement was carried out, and the defendant now contends that his note to the plaintiff was without consideration, because the plaintiff was already bound in law to take up the note at the bank. It is possible that, for one reason or another, both the bank and the plaintiff may have been willing to wait awhile, but that 1 See also Sargent v. Boberlson, 17 Ind. App. 411, 46 N. E. 925. 746 FORMATION OF CONTRACT. the defendant's interests were imperiled by a delay, and 'indeed required that the note should be paid at once, and that the cor- poration whose duty it was primarily to pay it was without pres- ent means to do so. Since the defendant was sane, sui juris, was not imposed upon, nor under duress, knew what he was about, and probably acted for his own advantage, it would certainly be imfortunate if the rules of law required us to hold his note invalid for want of a sufficient consideration, when he has had all the benefit that he expected to get from it. In this commonwealth, it was long ago decided that even between the origiaal parties to a building contract, if, after having done a part of the work, the builder refused to pro- ceed, but afterwards, on being promised more pay by the owner, went on and finished the building, he might recover the whole sum so promised. Munroe v. Perkins, 9 Pick. 298. See, also, Holmes v. Doane, 9 Cush. 135 ; Peck v. Requa, 13 Gray, 407 ; Rogers v. Rogers, 139 Mass. 440 ; Hastings v. Lovejoy, 140 Mass. 261, 265; Tliomas v. Barnes, 156 Mass. 581. In other States there is a difference of judicial opinion, but the following cases sanction a similar doctrine : Lattimore v. Harsen, 14 Johns. 330 ; Stewait V. Keteltas, 36 N. Y. 388 ; Lawrence v. Davey, 28 Vt. 264 ; Osborne v. O'Reilly, 42 N. J. Eq. 467 ; Ooebel v. Linn, 47 Mich. 489 ; Cooke v. Murphy, 70 111. 96. In England and in others of the United States a different rule prevails. But when one, who is unwilling or hesitating to go on and per- forn; a contract which proves a hard one for him, is requested to do so by a third person, who is interested in such performance, though having no legal way of compelling it or of recovering damages for a breach, and who accordingly makes an indepen- dent promise to pay a sum of money for such performance, the reasons for holding him bound to such ;^ayment are stronger than where an additional sum is promised by the party to the original contract. Take an illustration. A enters into a contract with B to do something. It may be to pay money, to render service, or to sell land or goods for a price. The contract may be not especially for the benefit of B, but rather for the benefit of others, as, e.g. to erect a monument, an archway, a memorial of some kind, or to CONSIDERATION. 747 paint a picture to be placed where it can be seen by the public. The consideration moving from B may be executed or executory. It may be money or anything else in law deemed valuable. It may be of slight value, as compared with what A has contracted to do. Now A is legally bound only to B, and, if he breaks his contract, nobody but B can recover damages, and those damages may be slight. They may even be already liquidated at a small sum by the terms of the contract itself. Though A is legally bound, the motive to perform the contract may be slight. If after A has refused to go on with his undertaking, or while he is hesitating whether to perform it or submit to such damages as B may be entitled to recover, other persons interested in having the contract performed intervene, and enter into a new agreement with A, by which A agrees to do that which, he was already bound by his contract with B to do, and they agree jointly or severally to pay him a certain sum of money, and give their note or notes therefor, and A accordingly does what he had before agreed to do, but what perhaps he might not otherwise have done, no good reason is perceived why they should not be held to fulfill their promise. They have got what they bargained for, and A has done what otherwise he might not have done, and what they could not have compelled him to do. This has been so held in Englan'd, and the view is supported by English text writers, though not always for precisely the same reasons. Scotson v. Pegg, 6 Hurl. & N. 295 ; SJiadwell v. Shad- well, 30 Law J. C. P. 145 ; Pol. Cont. (6th ed.) 175, 177; Anson, Cont. (4th ed.) 87, 88 ; Leake, Cont. (3d ed.) 540. In this coun- try the courts of several States have taken the opposite view, though in some instances the cases referred to as so holding, when examined, do not necessarily lead to that resiilt. These cases are collected in the defendant's briefs and in Williston's discussion of the subject in 8 Harv. Law Rev. 27. 1 The American cases cited by the defendant are Bichardson v. Williams, 49 Me. 558 ; Putnam v. Woodliury, 68 Me. 58 ; Ellison v. Jackson Water Co. , 12 Cal. 542 ; Bitenour v. Mathews, 42 Ind. 7 ; Gordon v. Gordon, 56 N. H. 170 ; Havana Press Drill Co. v. Ashurst, 148 111. 115 ; In re God- dard's Estate, 29 Atl. Eep. 634 ; Baker v. Wahrmund, 5 Tex. Civ. App. 268 ; Ford v. Garner, 15 Ind. 298 ; Beynolds v. Nugent, 25 Ind. 328 ; Brownlee V. Lowe, 117 Ind. 420 ; Newton v. Chicago &c. By., 66 Iowa, 422 ; Vander- 748 FOKMATION OF CONTRACT. Without dwelling further on the reasons for the doctrine, it seems to us better to hold, as a general rule, that if A has refused or hesitated to perform an agreement with B, and is requested to do so by C, who will derive a benefit from such performance, and who promises to pay him a certain sum there- for, and A thereupon undertakes to do it, the performance by A of his agreement, in consequence of such request and promise by C, is a good consideration to support C's promise. Exceptions overruled.* (P. 177) Promise to perform existing contract. (p. 187) MANETTI V. DOEGE. 48 N. Y. APPELLATE DIVISION, 567. — 1900. Appeal by the defendant, Paul Doege, from a judgment of the Municipal Court of the city of New York for the borough of The Bronx in favor of the plaintiff, entered in the ofB.ce of the clerk of said court on the 3d day of November, 1899. UU V. Schreyer, 91 N. Y. 392 ; Seybolt v. New York i&c. B., 95 N. Y. 562 ; BoUnson v. Jewelt, 116 N. Y. 40 ; Sherwin v. Brigham, 39 Oh. St. 137 ; Wimer v. Worth Township, 104 Penn. St. 317 ; Johnson v. Sellers, 33 Ala. 265 ; Schuler v. Myton, 48 Kans. 282 ; V Amoreux v. Gould, 7 N. Y. 349 ; Merrick v. Oiddings, 1 Mackey, 394 ; Davenport v. Mrst Cong. Soc, 33 Wis. 387. 1 In Arend v. Smith, 151 N. Y. 502, the defendant owed a corporation §1000 and the plaintiff (president of the corporation) told him that if he would give his note for the amount he (plaintiff) would indorse it and would renew it when it fell due. The note was given to plaintiff, who discounted it and turned the proceeds over to the corporation. When it fell due plain- tiff could not renew it, hut took it up and brought action against defendant upon it. Defendant sets up the breach of the promise to renew. Held, that the promise was without consideration since plaintiff was under a legal obli- gation to pay the corporation. "Although the promise in this case was made to induce performance, as the act performed was less than the legal duty already resting upon the defendant, it was incapable of sustaining an action or maintaining a defense." The court seems not to have considered whether the act performed was not different from the legal duty already resting upon defendant. He was under an obligation to pay the corporation, but he was under no obligation to give a negotiable promissory note to plaintiff, or to the corporation. CONSIDERATION. 749 HiESCHBERG, J. The defendant contracted with one Manger to build him a house. Manger sublet the contract to one Putts. Putts sub-contracted part of the work, including the cellar and foundation, to one Scully; and Scully employed the plaintiff to build the foundation for the sum of $60. While the work- was in progress defendant visited the job, whereupon plaintiff stopped work and entered into a conversation with the defend- ant. He told the defendant in substance that he was afraid he would not be paid by Scully and that he, therefore, intended to abandon the work. The defendant thereupon said to him, " Go ahead and finish the work, and I will pay you. Never mind about Scully." The plaintiff completed the work on the faith of this promise, and, in default of payment, has sued and recovered as on an original undertaking. The general rule undoubtedly is that an agreement to do what one is under contract to do will not furnish a sufficient considera- tion to support a promise. In the cases cited by the appellant the existing engagement or contract was made with the promisor, and not, as in this instance, with a third person. The plaintiff here was luider no engagement or contract with the defendant. The defendant could not compel the plaintiff to continue the work inasmuch as the latter had not contracted with him to do it. Nor would an agreement to do what one is under contract to do, be sufB.cient consideration to support a promise made by a third person unless some new consideration exists at the time of the promise as between the promisor and promisee. And that is the situation here. The defendant had an interest in the prompt prosecution of the work. The plaintiff, apprehensive of losing, his pay, had concluded to throw up the job and take the chances of any claim by Scully for damages. The defendant, thereupon,, in consideration of the benefit resulting to him from uninterrupted work upon the house, made a new and independent contract with the plaintiff, by the terms of which the latter consented to and did proceed with the work instead of abandoning it, and in con- sideration of %vhich the defendant promised to pay the entire $60. This was a valid and enforceable contract under the au- thorities. King v. Despard, 5 Wend. 277 ; Lattimore v. Harsen, 14 Johns. 330 ; Alley v. Turck, 8 App. Div. 60 ; Stewart v. Keteltas^ 750 FORMATION OF CONTEACT. 36 N.Y. 388 ; Pond v. Starkweather, 99 Id. 411 ; Scotson v. Pegg, 6 H. & N. 295 ; Monroe r. Perkins, 9 Pick. 298. The contract was not within the statute of frauds. Snell v. Rogers, 70 Hun, 462 ; Wiite v. Bintoul, 108 N. Y. 222 ; Raabe v. Squier, 148 Id. 81 ; Clark v. Howard, 150 Id. 232. The judgment should be affirmed, with costs. All concurred. Judgment affirmed, with costs. (P. 187) Payment of smaller sum in satisfaction of larger, (p. 195) WOODS, C. J., IN CLAYTON v. CLAEK. 74 MISSISSIPPI, 499. —1896. [In this case a note for $2789 was by agreement surrendered upon the payment of $1000. The payee subsequently brought suit for the balance.] It has been held in England, though not unbrokenly, nor with- out now and then hostile criticism from bench and bar, that an agreement by a creditor with his debtor to accept a smaller sum of money in satisfaction of an ascertained debt of a greater sum, is without consideration, and is not binding upon the creditor, even though he has received the smaller sum agreed upon in the new contract. And in the United States, blindly following what was supposed to be settled law in England for nearly three hun- dred years, our courts have uniformly announced adherence to this rule, though in most of the cases examined by us no such announcement was necessary to their determination. The rule is, in nearly all the cases, declared to have been first announced in PinneVs case (6 Coke's Eep. 117),^ whereas an exami- ' Pinnel brought an action of debt on a bond against Cole of 16Z. for pay- ment of 8Z. 10s. the 11th day of November, 1600. The defendant pleaded, that he at the instance of the plaintiff, before the said day, soil. 1 Octob. anno 44, apud W. solvit querenti bl. 2s. 2d. quas quidem hi. 2s. 2d. the plain- tiff accepted in full satisfaction of the 9>l. 10s. And it was resolved by the whole court, that payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the judges that by no possibility a lesser sum can be a satisfaction to the plain- tiff for a greater sum; but the gift of a horse, hawk, or robe, etc., in satis- CONSIDERATION. 751 nation of that mischievous and misleading reported case will make it appear at once that the question before us was not in any way involved. Pinnel's^ plea was, that before the maturity of his bond for the larger sum, plaintiff had accepted a lesser sum agreed upon between the parties, in full satisfaction of the origi- nal debt. Now, all the authorities, American and English, in- cluding Coke himself, agree that this was a good defense, and that the plaintiff was bound by it, if defendant should properly plead it to a suit for the entire original debt. But the hapless Pinnel,'' in that remote period when courts were almost as jealous for the observance of technical rules of special pleading as for the execution of justice according to right, was adjudged to pay the whole debt, the plaintiff having judgment against him, be- cause of his " insuf&cient pleading, for," says Coke, " he did not faction is good. For it shall be intended that a horse, hawk, or robe, etc., might be more beneficial to the plaintiff than the money, in respect of some circumstance, or otherwise the plaintiff would not have accepted of it in satisfaction. But when the whole sum is due, by no intendment the accept- ance of parcel can be a satisfaction to the plaintiff. But in the case at bar it was resolved that the payment and acceptance of parcel before the day, in satisfaction of the whole, would be a good satisfaction in regard of circum- stance of time ; for peradventure parcel of it before the day would be more beneficial to him than the whole at the day, and the value of the satisfaction is not material. So, if I am bound in 201. to pay you 101. at Westminster, and you request me to pay you 51. at the day at York, and you will accept it in full satisfaction of the whole 101., it is a good satisfaction for the whole; for the expenses to pay it at York is sufficient satisfaction. But in this case the plaintiff had judgment for the insufficient pleading ; for he [defendant] did not plead that he had paid the 61. 2s. 2d. in full satisfaction (as by law he ought), but pleaded the payment of part generally, and that the plaintiff accepted it in full satisfaction. And always the man- ner of the tender and of the payment shall be directed by him who made the tender or payment, and not by him who accepts it. And for this cause judgment was given for the plaintiff. See reader 26 H. 6 Barre, 37, in debt on a bond for lOi!., the defendant pleaded that one F was bound by the said deed with him, and each in the whole, and that the plaintiff had made an acquittance to F bearing date before the obligation, and delivered after, by which acquittance he did acknowledge himself to be paid 20s. in full satisfaction of the 101. And it was adjudged a good bar ; for if a man acknowledges himself to be satisfied by deed, it is a good bar, without anything being received. Vide 12 R. 2, Barre, 243 ; 26 H. 6 Barre, 37 and 10 H. 7, etc. — FinneVs case, 5 Coke's Kep. 117 (1602). 1 A slip for defendant, Cole. — Ens, 752 FORMATION OF CONTRACT. plead that lie had paid the £5, 2s. 2d. in full satisfaction (as by- law he ought), but pleaded the payment of part generally, and that the plaintiff accepted it in full satisfaction." . . . The rule is found in Pinnel's case, but it is bald dictum, and, as stated by Lord Blackburn, in Foakes v. Beer, before the House of Lords (9 App. Cas. 606), for the long period of one hundred and fifteen years after PinneVs case was decided no case is to be found " in which the question was raised whether payment of a lesser sum would be satisfaction of a liquidated demand." ^ . . . Turning now to the holdings of the American courts on this question, we are profoundly and painfully impressed with the slavish adherence of the legal and judicial mind to precedent, or, in many cases, to what seems to be precedent only. [The learned judge then discusses some of the American cases.] The absurdity and unreasonableness of the rule seem to be generally conceded, but there also seems to remain a wavering, shadowy belief in the fact, falsely so called, that the agreement to accept, and the actual acceptance of, a lesser sum in the full satisfaction of a larger sum, is without any consideration to sup- port it — that is, that the new agreement confers no benefit upon the creditor. However it may have seemed three hundred years ago in England, when trade and commerce had not yet burst their swaddling bands, at this day and in this country, where almost every man is in some way or other engaged in trade or commerce, it is as ridiculous as it is untrue to say that the payment of a lesser part of an originally greater debt, cash in hand, without vexation, cost, and delay, or the hazard of litigation in an effort to collect 1 In that case Lord Blackburn says : " What principally weighs with me in thinking that Lord Coke made a mistake of fact is my conviction that all men of business, whether merchants or tradesmen, do every day recognize and act on the ground that prompt payment of a part of their demand may be more beneficial to them than it would be to insist on their rights and en- force payment of the whole. Even where the debtor is perfectly solvent, and sure to pay at last, this often is so. Where the credit of the debtor is doubtful it must be more so. I. had persuaded myself that there was no such long-continued action on this dictum as to render it improper in this House to reconsider the question. I had written my reasons for so thinking ; but as they were not satisfactory to the other noble and learned Lords who heard the case, I do not now repeat them nor persist in them." (9 App. Cas. 605, 622-623.) CONSIDERATION. 753 all, is not often — nay, generally — greatly to the benefit of the creditor. Why shall not money — the thing sought to be secured by new notes of third parties, notes where payment in money is designed to be secured by mortgage, and even negotiable notes of the debtor himself ^— why shall not the actual payment of money, cash in hand, be held to be as good consideration for a new agree- ment, as beneficial to the creditor, as any mere promises to pay the same amount, by whomsoever made and however secured ? And why may not men make and substitute a new contract and agree- ment for an old one, even if the old contract calls for a money payment ? And why may one accept a horse worth $100 in full satisfaction of a promissory note for $1000, and be bound thereby, and yet not be legally bound by his agreement to accept f 999, and his actual acceptance of it, in full satisfaction of the $1000 note ? No reason can be assigned except that just adverted to, , and this rests upon a mistake in fact. And a rule of law which declares that under no circumstances, however favorable and bene- ficial to the creditor, or however hard and full of sacrifice to the debtor, can the payment of a less sum of money at the time and place stipulated in the original obligation, or afterwards, for a greater sum, though accepted by the creditor in full satisfaction of the whole debt, ever amount in law to satisfaction of the original debt, is absurd, irrational, unsupported by reason, and not foimded in authority, as has been declared by courts of the highest respectability, and of last resort, even when yielding reluc- tant assent to it. We decline to adopt or to follow it, and if there is anything in the cases of Jones v. Perkins (29 Miss. 139) or Pulliam V. Taylor (60 Miss. 251) which may be regarded as sanctioning the rule that the payment of a less sum of money, though agreed to be received in full satisfaction of a debt greater in amount than such agreed payment, shall not be so considered in legal contemplation, then, to that extent those cases are hereby over- ruled ; and the case of Burrus v. Gordon (67 Miss. 93), in so far as it sanctions the rule we are combating, is hereby over- ruled.^ 1 See N'assoiy v. Tomlinson, 148 N. Y. S26, post, p. 864 ; Flynn v. Surlock, 194 Pa. St. 462, ^osJ, p. 869, on accord and satisfaction by payment of smaller sum for larger sum claimed, ccc 754 FORMATION OF CONTRACT. [Whitfield, J., specially concurred in the decision on the ground that the delivery up of a note by the holder to the maker is a complete discharge.] (P. 199) Mutual promises. STOVALL V. McCUTCHEK 54 SOUTHWESTERN REP. (Kt.), 969. —1900. Action by McCutchen & Co. and others against T. L. Stovall to enjoin defendant from violating a contract. Judgment for plaintiffs, and defendant appeals. White, J. In May, 1896, appellant and appellees, all mer- chants of Eussellville, signed an agreement as follows : " We, the undersigned, merchants of Eussellville, do hereby agree and obligate ourselves to close our place of business at 6.30 o'clock, beginning May 15, 1895, and lasting until the first of September." The pleadings and proof all agree that the intention of this writing was that the stores were to be closed at 6.30 p.m. of each day during the time specified, except on Saturdays. After com- pliance for a few evenings after the 15th of May, appellant notified appellees that he declined to further comply with the agreement, but would disregard it. This he did. Appellees in- stituted this action to obtain an injunction against appellant to prevent a violation of the agreement, or, rather, to compel him to specifically perform the agreement. A temporary injunction was granted. Appellant made defense of the action, pleading that he signed the agreement conditionally. He alleges that one of the conditions was that others, who never did sign, were also to sign the agreement. Another condition was that he, at the end of a few days' trial, could withdraw from the agreement if he so desired, — and that these conditions were left out by mis- take, as were the provisions that the closing was to be daily at 6.30 P.M., and not to apply to Saturday. On these issues, pre- sented by the answer, proof was taken, and on final hearing the temporary injunction was made perpetual, and from that judg- ment this appeal is prosecuted. CONSIDERATION. 755 It is insisted by counsel for appellant that there is no consid- eration for the agreement; that it is against public policy and void; that, because of its uncertainty, it cannot be specifically enforced ; and that the trial court erred in adjudging, on the proof, that there were no conditions omitted from the writing. "We are of opinion that the proof fails to establish that appel- lant signed the writing with the understanding that any others were to sign than those whose names appear thereto. We are also of opinion that the proof fails to establish appellant's con- tention that he had the privilege of withdrawal after trial. We think there is sufficient consideration to uphold the contract. " Valuable considerations," says Bouvier (title, " Consideration "), " are either some benefit conferred upon the party by whom the promise is made, or upon a third party at his instance or request, or some detriment sustained, at the instance of the party promis- ing, by the party in whose favor the promise is made ; " citing Overstreet v. Philips, 1 Litt. 123 ; Leniaster v. Burckhart, 2 Bibb, 30; Wooldridge v. Gates, 2 J. J. Marsh, 222. Again the same author (Bouvier) says, "Mutual promises made at the same time are concurrent considerations, and wilj support each other, if both be legal and binding." This court, in the case of Talbott v. Stemmons' Ex'r (89 Ky. 222), held a promise to abstain from the use of tobacco to be a sufficient consideration for an agreement to pay $600. The Court of Appeals of New York, in Hamer v. Sidway (124 N. Y. 538), held the same thing. We are of the opinion that the mutual promises to refrain from engaging in business after 6.30 p.m. of each day are sufficient loss or detri- ment in the way of financial transaction, or are sufficient gain or advantages from a social or healthful standpoint, to support a contract. The loss or gain is to be supposed to be alike to all parties. There is complete mutuality. While it is true that contracts in restraint of trade are to be carefully scrutinized, and looked upon with disfavor, all contracts in restraint of trade are not illegal. The restraint here put is but partial, — very inconsiderable. It is but a few hours, at most, each day, and for three and one-half months, during the extremely hot weather. It has come within the observation of the members of this court that during this season (May 16th to September) many 756 FORMATION OF CONTRACT. merchants close about 6.30 or 7 p.m. This cannot be held to be an illegal restraint of trade. As to the question of uncertainty of the contract, appellant's position might be tenable, if it were not shown by the pleadings in the case precisely what the contract was intended to mean. The courts rarely ever reform and then specifically enforce a con- tract. The reason of this is that the dispute comes as to what contract was intended to be entered into. This is not so here. All parties agree that this writing was intended to say and mean that the places of business should be closed at 6.30 p.m. each day, excepting Saturdays, between May 15th and September 1st. We think that in this case injunction is a proper remedy. The recurring breach each day of the contract would require numerous actions at law, and by different plaintiffs, as well ; or, if not, there would at least be a continuing damage by the breaches and violation of the contract up to September 1st. It has repeatedly, if not universally, been held that injunction is proper in either of these classes of cases, to prevent a multiplicity of actions, or to prevent a repeated and recurring cause of action. Sutton v. Head, 86 Ky. 156. Judgment afiB.rmed. (P. 199) Mutual subscriptions. THE PRESBYTERIAN CHURCH OF ALBANY v. COOPER. 112 NEW YORK, 517.— 1889. Appeal from order of the General Term of the Supreme Court in the third judicial department, which reversed a judgment in favor of plaintiff, entered upon the report of a referee, and or- dered a new trial. (Reported below, 45 Hun, 463.) This was a reference under the statute of a disputed claim against the estate of Thomas P. Crook, defendant's intestate. The claim arose under a subscription paper, of which the follow- ing is a copy : " We, the undersigned, hereby severally promise and agree to and with the trustees of the Presbyterian Church in this city of Albany, in consideration of one dollar to each of us in hand paid and the agree- CONSIDERATION. 757 ments of each other in this contract contained, to pay on or before three years from the date hereof to said trustees the sum set opposite to our respective names, but upon the express condition, and not otherwise, that the sum of $45,000 in the aggregate shall be subscribed and paid in for the purpose hereinafter stated; and if within one year from this date said sum shall not be subscribed or paid in for such purpose, then this agreement to be null and of no effect. The purpose of this subscription is to pay off the mortgage debt of $45,000, now a lien upon the church edifice of said church, and the subscription or contribution for that purpose must equal that sum in the aggregate to make this agreement binding. " Dated May 18, 1884." The defendants' intestate made two subscriptions to this paper, one of $5,000 and the other of $500. He paid upon the sub- scription $2,000. The claim was for the balance. Andrews, J. It is, we think, an insuperable objection to the maintenance of this action, that there was no valid consideration to uphold the subscription of the defendants' intestate. It is, of course, unquestionable that no action can be maintained to enforce a gratuitous promise, however worthy the object intended to be promoted. The performance of such a promise rests wholly on the will of the person making it. He can refuse to perform, and his legal right to do so cannot be disputed, although his refusal may disappoint reasonable expectations, or may not be justified in the forum of conscience. By the terms of the sub- scription paper the subscribers promise and agree to and with the trustees of the First Presbyterian Church of Albany, to pay to said trustees, within three years from its date, the sums severally subscribed by them, for the purpose of paying off "the mortgage- debt of $45,000, on the church edifice," upon the condition that the whole sum shall be subscribed or paid in within one year. It recites a consideration, viz., "in consideration of one dollar to each of us (subscribers) in hand paid and the agreements of each other in this contract contained." It was shown that the one dollar recited to have been paid was not in fact paid, and the fact that the promise of each subscriber was made by reason of and in reliance upon similar promises by the others constitutes no consideration as between the corporation for whose benefit the promise was made and the promisors. The recital of a considerar 758 FORMATION OF CONTRACT. tion paid does not preclude the promisor from disputing the fact in a case like this, nor does the statement of a particular consideration which, on its face, is insufficient to support a promise, give it any validity, although the fact recited may be true. It has sometimes been supposed that when several persons promise to contribute to a common object, desired by all, the promise of each may be a good consideration for the promise of others, and this although the object in view is one in which the promisors have no pecuniary or legal interest, and the perform- ance of the promise by one of the promisors would not in a legal sense be beneficial to the others. This seems to have been the view of the chancellor as expressed in Hamilton College v. Stewart when it was before the Court of Errors (2 Den. 417), and dicta of judges will be found to the same effect in other cases. Trustees, &c. V. Stetson, 5 Pick. 508; Watkins v. Fames, 9 Cush. 537. But the doctrine of the chancellor, as we understand, was over- ruled when the Hamilton College case came before this court (1 N. Y. 581), as have been also the dicta in the Massachusetts cases, by the court in that State, in the recent case of Cottage Street Methodist Episcopal Church v. Kendall, 121 Mass. 528. The doctrine seems to us unsound in principle. It proceeds on the assumption that a stranger both to the consideration and the promise, and whose only relation to the transaction is that of donee of an executory gift, may sue to enforce the payment of the gratuity for the reason that there has been a breach of contract between the several promisors and a failure to carry out as between themselves their mutual engagement. It is in no proper sense a case of mutual promises, as between the plaintiff and defendant. In the disposition of this case jve must, therefore, reject the consideration recited in the subscription paper as groimd for supporting the promise of the defendants' intestate, the money consideration, because it had no basis in fact, and the mutual promise between the subscribers, because there is no privity of contract between the plaintiff and the promisors. Some consider- ation must, therefore, be found other than that expressly stated in the subscription paper, in order to sustain the action. It is urged that a consideration may be found in the efforts of the CONSIDERATION. 759 trustees of the plaintiff during the year, and the time and labor expended by them during that time, to secure subscriptions in order to fulfill the condition upon which the liability of the sub- scribers depended. There is no doubt that labor and services, rendered by one party at the request of another, constitute a good consideration for a promise made by the latter to the former, based on the rendition of the service. But the plaintiff encoun- ters the difficulty that there is no evidence, express or implied, on the face of the subscription paper, nor any evidence outside of it, that the corporation or its trustees did, or undertook to do anything upon the invitation or request of the subscribers. Nor is there any evidence that the trustees of the plaintiff, as rep- resentatives of the corporation, in fact did anything in their corporate capacity, or othervsrise than as individuals, interested in promoting the general object in view. Leaving out of the subscription paper the affirmative statement of the consideration (which, for reasons stated, may be rejected), it stands as a naked promise of the subscribers to pay the several amounts subscribed by them for the purpose of paying the mortgage on the church property upon a condition precedent limiting their liability. Neither the church nor the trustees promise to do anything, nor are they requested to do anything, nor can such a request be implied. It was held in Hamilton Col- lege V. Stewart (1 N. Y. 581) that no such request could be im- plied from the terms of the subscription in that case, in which the ground for such an implication was, to say the least, as strong as in this case. It may be assumed from the fact that the sub- scriptions were to be paid to the trustees of the church for the purpose of paying the mortgage, that it was understood that the trustees were to make the pay-ment out of the moneys received. But the duty to make such payment, in case they accepted the money, would arise out of their duty as trustees. This duty would arise upon the receipt of the money, although they had no antecedent knowledge of the subscription. They did not assume even this obligation by the terms of the subscription, and the fact that the trustees applied money, paid on subscriptions, upon the mortgage debt, did not constitute a consideration for the promise of the defendants' intestate. 760 FORMATION OF CONTRACT. We are unable to distinguish this case in principle from Hamil- ton College t. Stewart, 1 N. Y. 581. There is nothing that can be urged to sustain this subscription that could not, with equal force, have been urged to sustain the subscription in that case. In both the promise was to the trustees of the respective corporations. In each case the defendant had paid part of his subscription and re- sisted the balance. In both, part of the subscription had been collected and applied by the trustees to the purpose specified. In the Hamilton College case (which in that respect is unlike the present one) it appeared that the trustees had incurred expense in employing agents to procure subscriptions to make up the re- quired amount, and it was shown, also, that professors had been employed upon the strength of the fund subscribed. That case has not been overruled, but has been frequently cited with approval in the courts of this and other States. The cases of Barnes v. Ferine (12 N. Y. 18) and RoheHs v. Cohh (103 Id. 600) are not in conflict with that decision. There is, we suppose, no doubt that a subscription, invalid at the time for want of consideration, may be made valid and binding by a consideration arising subsequently between the subscribers and the church or corporation for whose benefit it is made. Both of the cases cited, as we understand them, were supported on this principle. There was, as was held by the court in each of these cases, a subsequent request by the subscriber to the promisee to go on and render service or incur liabilities on the faith of the sub- scription, which request was complied with, and services were rendered or liabilities incurred pursuant thereto. It was as if the request was made at the very time of the subscription, fol- lowed by performance of the request by the promisor. Judge Allen, in his opinion in Barnes v. Ferine, said, " the request and promise were, to every legal effect, simultaneous," and he ex- pressly disclaims any intention to interfere with the decision in the Hamilton College case. In the present case it was shown that individual trustees were active in procuring subscriptions. But, as has been said, they acted as individuals, and not in their official capacity. They were deeply interested, as was Mr. Crook, in the success of the effort to pay the debt on the church, and they acted in unison. But what the trustees did was not prompted CONSIDERATION. 761 by any request from Mr. Crook. They were co-laborers in pro- moting a common object. We can but regret that the intention of the intestate in respect to a matter in which he was deeply interested, and whose interest was manifested up to the very time of his death, is thwarted by the conclusion we have reached. But we think there is no alternative, and that the order should be affirmed. All concur. Order affirmed and judgment accordingly.^ (p. 199) Mutual subscriptions. SHEEWIN V. FLETCHEE. 168 MASSACHUSETTS, 413. — 1897. Contract on the following agreement : " We, the undersigned subscribers, do hereby agree to pay the sum set against our respective names, the same to be payable under and in accordance with the following conditions, namely : "1. The money by us subscribed is to be used for the purpose of erecting a building in the town of Ayer, to be used for the manufacture of boots and shoes. "2. The details regarding the plan under which the subscribers hereto shall organize themselves, and upon which said building shall be erected and rented, shall be hereafter fixed and determined by a 1 In Irwin v. Lombard University, 56 Ohio State, 9, defendant's Intestate executed and delivered a promissory note to plaintiff "for the endowment of said institution," and paid interest on it for twenty years before. his death. It did not appear that the intestate requested plaintiff to incur obligations or expenses on the strength of his promise or requested others to subscribe, although he with others was interested in the institution and desirous of obtaining an endowment for it, and "prompted" by the promises of intes- tate and others, the plaintiff did incur obligations. It was held that plaintiff could recover upon the note. "A promise to give money to one to be used by him according to his inclination and for his personal ends is prompted only by motive. But a promise to pay money to such an institution to be used for such defined and public purposes rests upon consideration. . . . The con- sideration for the promise in question is the accomplishment, through the university, of the purpose for which it was incorporated and in whose aid the promise was made." Compare Pratt v. Trustees, 93 lU. 475, ante, p. 35 ; Bicketts V. Scothorn, 57 Neb. 51, ante, p. 732. 762 FORMATION OF CONTRACT. majority in numbers and interest of the subscribers hereto, at a meeting to be duly called for that purpose. " 3. No subscription hereto shaU be binding until the sum of twelre thousand (12,000) dollars shall have been raised. "Samuel W. Fletcher. $200." It is alleged that the $12,000 was fully subscribed; that at a meeting, duly called, a majority in number and interest of the subscribers organized the "Ayer Building Association," elected the plaintiffs trustees, and authorized the purchase of land and the erection of a building; that relying upon defendant's prom- ise the trustees purchased the land and erected the building ; that defendant refuses to pay, etc. Defendant demurred on the ground that no promise was made to these plaintiffs and that there was no consideration for the promise. Demurrer overruled. Defendant appeals. Allen, J. The demurrer to the declaration was rightly over- ruled. The written agreement signed by the defendant was vir- tually a promise to pay to such person or persons as should be fixed at a meeting of the subscribers. This promise was at the outset an offer, but when steps were taken in pursuance of Article 2, and a plan was fixed and determined as therein provided, and the plaintiffs were chosen trustees, they became the promisees ; and when they proceeded to erect a building in reliance upon the subscriptions of defendant and others, and before any withdrawal or retraction by him, that supplied a good consideration, and the promise became valid and binding in law. Athol Music Hall Co. V. Carey, 116 Mass. 471 ; Davis v. Smith American Organ Co., 117 Mass. 456 ; Cottage Street Church v. Kendall, 121 Mass. 628 ; Hudson Real Estate Co. v. Tower, 156 Mass. 82; S. C. 161 Mass. 10. Judgment affirmed. (P. 238) Mistake as to nature of contract. (p. 243) ALEXANDEE v. BROGLEY. 43 ATLANTIC REP. (N. J.), 888. —1899. Action by Hamil M. Alexander against John Brogley and others and John 0. Bedford. Judgments for defendants were affirmed by the Supreme Court and plaintiff brings error. REALITY OF CONSENT : MISTAKE. 763 Dixon, J. These suits were brought by the plaintiff as assignee of the Biographical Publishing Company. In the first of the suits the testimony before the trial court tended to prove that an agent of the company, engaged for it in collecting data and obtaining subscriptions for a book of biographies, applied to the defendant for the purpose of preparing a sketch of his life, and, after getting from him some details of the history of his family and himself, handed to him a paper, with the request that he would sign his name upon it, so that in the sketch his name might be spelled correctly. Thereupon the defendant, not noticing anything upon the paper, signed his name. The paper thus signed contained a printed form of contract, purporting to bind the subscriber to take a copy of the book, and pay the publishing company $15 therefor. On this alleged agreement the suit was brought, and at the trial the judge charged the jury, in effect, that, if the defendant was by the fraud of the agent led to believe that he was signing his name only for the purpose of showing how it was spelled, then he was not bound. The court also refused to charge that, if the defend- ant by his own negligence in any way contributed to the perpe- tration of the fraud, he could not set up the defense of fraud. The circumstances of the second suit are substantially the same, except that, instead of being asked to sign his name in order to show how it was spelled, the defendant was requested to sign his name as an autograph to be. used with the sketch of his life. The defendants have obtained verdicts and judgments, the plaintiff insists that the cases were wrongly submitted to the jury, in the respects above indicated. The plaintiff does not claim that, in the absence of negligence, the fraudulent representations implied in the requests made by the agent were insufficient to defeat the alleged contracts, but he urges that as the defendants were able to read, and had the printed papers placed in their hands, they had no right to act upon the representations, but were bound to inform themselves of the purport of the documents, and that their negli- gence on this point should preclude the proposed defense. No doubt, there are many decisions which hold that, under certain circumstances, a person may be debarred by his negli- gence from defeating what appears to be his contract, on the ground of fraud. Some of these decisions rest upon the desira- 764 FORMATION OF CONTRACT. bility of preserving general confidence in commercial paper; others upon the legal maxim, " Caveat emptor " ; others upon the equitable doctrine that, when one of two persons otherwise inno- cent must suffer, he should suffer whose negligence has allowed the loss to occur ;^ and still others upon the rule of evidence, that, when contracting parties execute a writing supposed to express their contract, that writing becomes the conclusive proof of the terms of their agreement, and hence there is cast upon the parties a stringent duty to inform themselves of the real meaning of the instrument signed. The last two classes approach the case in hand, but neither of them includes it. In the first place, the defendants did not know they were signing contracts, and therefore were not called upon to exercise that vigilance which such a transaction reasonably demands. They were doing acts which were not intended to have, and, if the representations of the agent had been honest, could not have, any obligatory force or legal effect whatever, and as to which, consequently, there was no legal duty of care.^ In the second place, the plaintiff does not stand in the position of an innocent person. As assignee, he is entitled only to the rights of his assignor ; and the assignor is, in legal contempla- tion, implicated in the fraud of the agent, so far as relates to the enforcement of the alleged contracts from which the defendants have hitherto accepted no benefit. Said Mr. Justice Story in his work on Agency (section 139), it is a " sound and perfectly well- settled principle that, if a principal seeks to enforce a contract made by his agent, he is as much bound by any material mis- representation made therein by the agent as if made by himself." A fortiori, it would seem, a person cannot enforce as a contract 1 In Page v. Krekey, 137 N. Y. 307, it is held that one who negligently signs an instrument, fraudulently represented to him to be something other than what it is, is liable thereon to any innocent person who is damaged thereby. " Such cases are not governed by the rules applicable to the bona fide holder of negotiable paper procured by fraud, but by the equitable rule that, where one of two innocent parties must suffer, he who has put it in the power of a third person to commit the fraud, must sustain the loss." In this case defendant signed a guaranty fraudulently represented to him to be an application for a license under the excise law. ^Accord: Lewis v. Clay, 67, L, J. Q. B. 224. —Eds. REALITY OF CONSENT : MISTAKE. 765 that whicli in truth never was intended to have even the form of a contract, but which has assumed such a form through the fraud of his agent. We know of no just principle, nor have we been referred to any judicial decision, sanctioning the notion that, in circumstances like these before us, a person can, out of the fraud of his own agent and the negligence of a third party, create a contract legally binding upon the latter. Our conclusion, therefore, is that there was no error in sub- mitting these cases to the jury, and that the judgment should be affirmed. (P. 246) Mistake as to subject-matter. (p. 254) KOWALKE V. MILWAUKEE ELECTRIC EAILWAY & LIGHT CO. 103 WISCONSIN, 472. —1899. Action by Anna Kowalke against the Milwaukee Electric Rail- way & Light Company. Erom a judgment for plaintiff, defendant appeals. On October 26, 1896, plaintiff was injured by jumping from defendant's street car in an emergency, so as to make its liability for injuries probable. On the day following, the plaintiff's hus- band applied to defendant for settlement of the damage, stating that she was pregnant. Accordingly the defendant's surgeon secured the attendance of her family physician, who made a cursory examination, which disclosed only slight bruises, and soreness naturally resulting therefrom. They also learned that she was having a slight uterine hemorrhage, and the question of her pregnancy was raised, and an examination to ascertain that fact, proposed by defendant's surgeon. She repudiated the fact of pregnancy, stating that she was sure, from certain symptoms, that nothing of the sort existed, and refused peremptorily to submit to examination either by the two physicians or by her own family physician. She stated the result of the transaction on this subject: "When this release was made, I had some bruises and was flowing. I was not positive I was pregnant. 766 FORMATION OF CONTRACT. I told them I was not in the family -way. The doctors asked me how I felt, and went all over the case, and asked me a long time how I felt ; and at last it was agreed they were not sure I was in the family way, and they agreed that Dr. GoUey should take care of me. The only thing that was known about my condition was that I was flowing, after I had stated to them I was not in family way, and that I had these pains and bruises and stiffness. That was all I knew about it." The defendant's surgeon returned at evening, when the plaintiff's husband was at home, and then a settlement was negotiated, and the plaintiff, with her husband, signed a full release of the defendant " of all claims and demands for damages or otherwise which I now have or can have by reason of jumping from [described car]." Plaintiff's hemorrhage con- tinued intermittently until about the 8th of November, when she suffered a miscarriage. She was treated by Dr. Golley and his assistant throughout, and his bill paid by the defendant. With- out prior communication with defendant, the plaintiff on March 4, 1897, commenced this suit, which came to trial May 2, 1898. Plaintiff's coimsel, at the opening of the trial, waived all claim for damages by reason of expense incurred for care, medicine, surgical attendance, nursing, and loss of service, the same being conceded to belong to the husband. The parties stipulated in open court to waive jury trial as to all questions except the amount of damages, and a finding was accordingly made by the court to the effect that at the time of settlement both plaintiff's and defendant's physician believed she was not pregnant and that her injury was slight, that the mutual mistake was made in good faith, and that the settlement was made by reason of said mutual mistake, and without fraud or intentional misrepre- sentation on the part of either. The jury found the damages at $2900, and the court set aside and ignored the settlement and release, and entered judgment for that amount, from which this appeal. Dodge, J. The Circuit Court's finding of entire absence of any- thing like fraud perpetrated by the defendant or its representative upon the plaintiff is certainly not antagonized by the preponder- ance of the evidence. Indeed, the conduct of the defendant's physician seems to have been in accordance with the most scrupu- KEALITY OF CONSENT : MISTAKE. 767 loTis rules of professional and contractual ethics. He refrained from visiting the plaintiff for examination until he had secured, at the company's expense, the attendance of her regular physician. He at no time assumed to treat her, or intrude upon the relations between her and her attending physician. He refrained from any negotiation for settlement until he could meet her in company with her husband. The judgment, however, proceeds exclusively upon what is termed by the court below " a mistake of fact," which is predicated upon the fourth finding, that both she and the defendant's physician " believed " she was not pregnant. To formulate an accurate and practically applicable definition of the mistake of fact which will warrant rescission of a contract, has been apparently well-nigh the despair of law writers. Indeed, no definition or general rule has been invented which is suflicient or accurate, except by immediately surrounding it with numerous exceptions and qualifications more important than itself. This is not surprising, in view of the fact that the whole doctrine is an invasion or restriction upon that most fundamental rule of the law, that contracts which parties see fit to make shall be enforced, and in view of the further consideration that one or both of the parties is often, if not usually, ignorant or forgetful of some facts, thoughtfulness of which might vary his conduct. The most philosophical definition we have found is that pre- sented by Pom. Eq. Jur. § 839 : " An unconscious ignorance or forgetfulness of the existence or nonexistence of a fact, past or pres- ent, material to the contract." This definition contains several elements, each of which, as above suggested, must be explained and qualified in its practical application. Thus, the ignorance must be unconscious; that is, not a mental state of conscious want of knowledge whether a fact which may or may not exist does so. Kerr, Fraud & M. p. 432. This idea is involved in, and furnishes a reason for, the exception pointed out by Dixon, C. J., in Hurd v. Hall (12 Wis. 112, 127), on authority of Kelly v. Solari (9 Mees. & W. 54), viz. : Where a party enters into a contract, ignorant of a fact, but meaning to waive all inquiry into it, or waives an investigation after his attention has been called to it, he is not in mistake, in the legal sense. These limitations are predicated upon common experience, that, if people contract under 768 FORMATION OF CONTRACT. such circumstances, they usually intend to abide the resolution either way of the known uncertainty, and have insisted on and received consideration for taking that chance. Akin to the rule that the ignorance must be unconscious, though going still further as an exception, is the other rule, that igno- rance must not be due to negligence, although there be no actual suspicion with reference to the fact in question. Pom. Eq. Jur. § 856 ; Kerr, Fraud & M. p. 406 ; Hurd v. Hall, 12 Wis. 126 ; Conner v. Welch, 61 Wis. 431. The last case is a good illustra- tion. A mortgagee took a new mortgage, and released an old one, on the understanding that his new lien took the place of the old, in ignorance of existence of a subsequent judgment against the mortgagor. The court held that, because he had some knowl- edge of the latter's embarrassed condition, it was negligence not to have investigated as to judgments, and refused, notwithstanding the mistake, to rescind the transaction and reinstate his former lien. Passing the requirement that the fact as to which mistake is made must be either past or present, — for it is obvious that the coming into existence of any future fact must at the time of con- tracting have been understood to rest in conjecture, and the con- tingency thereof to have been assumed by both parties, — another essential element of the definition is that the fact involved in the mistake must have been as to a material part of the contract, or, as better expressed by Mr. Beach (Mod. Eq. Jur. 52, 53), an intrinsic fact ; that is, not merely material in the sense that it might have had weight if known, but that its existence or nonexistence was intrinsic to the transaction, — one of the things actually con- tracted about. As, in the familiar illustration of the sale of a horse, the existence of the horse is an intrinsic fact. Another par- tial expression of this requisite, adopted by Mr. Pomeroy (Eq. Jur. § 856) is as follows : " If a mistake is made as to some fact which, though connected with the transaction, is merely incidental, and not a part of the very subject-matter, or essential to any of its terms, or if the complaining party fails to show that his conduct was in reality determined by it, in either case the mistake will not be ground for relief, affirmative or defensive." The last part of this statement is adopted in Klauber v. Wright, 52 Wis. 303, 308 ; Grymes v. Sanders, 93 U. S. 55, 60. KEALITY OF CONSENT : MISTAKE. 769 Some illustrative cases of this aspect of the subject may serve to elucidate. The damaged condition of a ship at sea, as to which both parties to her sale are ignorant, held merely a collateral cir- cumstance, and not an intrinsic fact. Barr v. Gibson, 3 Mees. & W. 390. rinancial condition of a debtor is not intrinsic to a com- promise and release of his debt, so that mistake thereon will justify rescission. Dambmann v. Schulting, 75 N. Y. 65, 63. Ignorance of declaration of peace, greatly enhancing value of merchandise, will not justify rescission of sale. Laidlaw v. Organ, 2 Wheat. 178. SufB.ciency of security for a debt purchased as part of firm assets, not intrinsic. Segur v. Tingleg, 11 Conn. 134, 143. Cer- tain United States bonds had been extended, and, as a result, were commanding premium in market. Held not " of the essence " of a sale at par, both parties being ignorant as to both extension and premium. Sankey's Ex'rs v. Bank, 78 Pa. St. 48, 55. One who had buUt a mill partly on land of another purchased of that other two lots, both parties supposing them to include the mill, which, however, was found to be on a third lot. Court refused to rectify, holding that the contract related to purchase and sale of the lots named, and that, though presence of mill on one of them might have been an important consideration, it was not the fact as to which they contracted, not intrinsic to the transaction. Webster V. Stark, 78 Tenn. 406. Fact that a specific tract of land contains less than supposed, not affecting identity of thing purchased, is not " of the very subject-matter of the sale." Thompson v. Jack- son, 3 Eand. (Va.) 507. The foregoing is the principle on which is founded the rule well stated by Kerr (Fraud & M. p. 433), as follows : " Care must be taken in distinguishing cases where the parties are under a mutual mistake as to the subject-matter of a contract from cases where there is no doubt as to the subject-mat- ter, but the one has in fact sold more than he thought he was selling, and the other got more than he expected," — illustrating by sale of a leasehold having longer to run than supposed. O'Kill v. Whittaker, 1 De Gex & S. 83. A further limitation upon the maxim, Ignorantia facti excusat, especially applicable to cases like the present, is that where par- ties have entered into contract based upon uncertain or contin- gent events, purposely, as a compromise of doubtful claims arising 770 FORMATION OF CONTRACT. from them, in absence of any bad faith, no rescission can be had, though the facts turn out very differently from the expectation of either or both of the parties. In such classes of agreements the parties are presumed to calculate the chances, receive com- pensation therefor, and assume the risks. Pom. Eq. Jur. § 865 ; Beach, Mod. Eq. Jur. §§ 43, 66; Bank v. McGeoch, 92 Wis. 286, 313. It is too obvious to require more than statement that, if parties fairly agree to abide uncertainty as to past or as to future events, they must do so. Kerckeval v. Doty, 31 Wis. 476. Applying the definitions and rules of law above set forth, with their qualifications, to the facts of this case, it is clearly apparent that if there was a mistake, in the sense in which that word is used in the law, the fact as to which such mistake existed was not an intrinsic one, — it was not of the subject-matter of the contract. There was no mistake or misunderstanding as to the acts of the defendant, nor as to the injuries which the plaintiff had received. The effect of those injuries was, of course, prob- lematical and conjectural. That very uncertainty entered into the compromise made, and was the consideration of a certain sum on one side, and the surrender of any larger sum on the other. The elements of the contract of settlement were : first, whether defend- ant was liable; and, secondly, what amount, in view of all the contingencies, should be paid and received in satisfaction of such liability, and the question of the plaintiff's condition, whether pregnant or not, was merely a collateral question. It was no part of the injury caused by defendant, nor anything for which dam- ages should be paid. At most, it was but one of the surrounding conditions which might or rnight not increase the effect of the injuries. It is probably true, in the great majority of personal injury cases, that the effect which the injuries received may have, as to time of disability, quantum of suffering, and the like may be modified by the physical or mental condition of the injured party. For example, a predisposition to rheumatism would be a condition likely to enhance the subsequent effects of an injury — especially a dislocation or other injury to a joint. A disturbed condition of the system might prevent the reuniting of a broken bone, otherwise practically certain. A predisposition to nervous troubles might vastly multiply the effects of a slight spinal injury. REALITY OF CONSENT : MISTAKE. 771 So that if the mere ignorance of such surrounding conditions can suf6.ce to render ineffective a settlement, because after events indicate that the amount paid is inadequate, few compromises of the damages from personal injury could be relied on. Compro- mise is highly favored by the law, and any rule or doctrine by which the fair meeting of the minds of the parties to that end, in the great majority of cases which arise in human affairs, must fail to be permanent or effectual to settle their rights, is contrary to the whole spirit of the law, and should not be adopted. The question in each such case is, did the minds of the parties meet upon the understanding of the payment and acceptance of some- thing in full settlement of defendant's liability? If they did, without fraud or unfair conduct on either side, the contract must stand, although subsequent events may show that either party made a bad bargain, because of a wrong estimate of the damages which would accrue. Seeley v. Traction Co., 179 Pa. St. 334, 338 ; Homuth V. Railway Co., 129 Mo. 629 ; Klauber v. Wright, 52 Wis. 303. , In the ease at bar there can be no question but that the agree- ment reached was for full settlement of all defendant's liability for damages resulting from the accident. The written agree- ment unambiguously asserts such intention, and there is no claim that plaintiff did not so understand it. She might well enter on such compromise, for every advantage of knowledge as to the injuries received, and as to their probable effect, was with her. She had the benefit of her own observation, and the counsel of her customary physician, while the defendant had but the oppor- tunity of observing a single brief examination of her person, and that much less complete than was requested, in which its physi- cian was necessarily subject to be deceived by simulated symp- toms or exaggerated statements. In addition to all which, the settlement cast upon the plaintiff a share of the contingencies of an underestimate of damages, while she assumed none in case an overestimate had been made. All charges for medical attend- ance by reason of her injuries were assumed by defendant, and it might with some reason claim that it should not pay those due to the miscarriage, since plaintiff gave the most vehement assurances against any such event. But both parties have treated this obli- 772 FORMATION OF CONTRACT. gation as one to be performed by defendant, notwitlistanding the unexpected enhancement thereof. On the other hand, no promptitude of recovery or overestimate of the injury -was, by the agreement, to cause a return of any of the consideration paid. It may be noted here that plaintiff nowhere suggests that she ■would not have made this settlement, had she been aware of her pregnancy; and, under this branch of the law of mistake, it is laid down that it must clearly appear that the contract would not have been made, had the fact been known. This is a material consideration. Enhancement of her damage was by no means certain to result from the fact of pregnancy. Indeed, the only evidence on the subject was against the probability of any such effect. We cannot say that she would not have been willing to accept this settlement, and assume the contingency, even had she known the fact of her condition. And, even if the fact were one intrinsic to the transaction, still it is essential to the extreme remedy of rescission of a deliberate contract that plaintiff prove clearly that she would not have executed, had she known the truth. Klauher v. Wright, 62 Wis. 303; Grynies v. Sanders, 93 U. S. 55. If, however, the fact of pregnancy had been one intrinsic to the contract, the question remains whether such mistake was made with reference thereto as avoids that contract. The court below finds that a mistake existed as to that fact. So far as this is a finding of fact, we shall accept it as conclusive in the light of the evidence ; but whether it is such a mistake as justifies rescis- sion of a deliberately executed agreement is a question of law, and present before us for decision. We have already pointed out the distinction between the " unconscious ignorance " required to accomplish this result, and the mental state of consciousness of ignorance whether the fact exists or not, — where, as Dixon, C. J., phrases it, her attention being called to the subject, she waived any investigation of it, and elected to proceed without inquiry into it. It seems clear that the plaintiff was — indeed, that both parties were — in the latter mental condition. The plaintiff had passed, by about a week, the proper period of her menstruation. She was a woman of intelligence and experience, — already the REiCLITY OF CONSENT : MISTAKE. 773 motlier of three children. She necessarily knew that the ques- tion of her condition was one of uncertainty. Her conclusion thereon, however firm, was necessarily but a conclusion from vari- ous facts, circumstances, and symptoms, some of which, at least, suggested existence, instead of nonexistence, of the suspected state. It was biit a balancing of probabilities. The finding, indeed, is that the parties believed, not that they were ignorant ; and plaintiff's own testimony makes it apparent that the situation was little more than a state of doubt, with a belief that the prob- ability was negative. She says : " I had bruises and was flowing. I was not positive I was pregnant. I told them I was not. The dofetors went all over the case, and made inquiries, and at last it was agreed, they were not sure I was in the family way, and they agreed that Dr. Golley should take care of me." In a case of doubt like this, if the doubtful fact is material, parties may com- promise and include the uncertainty among those covered by the settlement ; they may refuse to settle until the uncertainty is re- moved, or they may settle everything else, and expressly omit therefrom the specified contingency. If they go on and make settlement in terms complete, they will be presumed to have intended the apparent effect of their acts. Any other presump- tion would be contrary to the truth, in the great majority of instances, and defeat the real intention of the parties, and we have no doubt it would do so here. It seems to us that both parties had in mind the possibility of pregnancy, and yet, that hoth intended what they said by their written agreement, namely, to pay and accept in compromise and discharge of all defendant's liability a present sum of money, and payment for any medical attendance rendered necessary by the injuries. The defendant has performed that agreement on its part, and plaintiff must be held to abide it on hers. Trial by jury having been waived, except as to amount of dam- ages, it is proper for this court to apply the law to the facts established in the court below. Those facts are that plaintiff, understandingly and without fraud, executed the release set'forth, and that no such mistake of fact as warrants rescission of that contract appears. As a result, judgment should have gone for the defendant. 774 FORMATION OF CONTRACT. By the Court. — The judgment is reversed, and the cause re- manded to the Circuit Court, with directions to enter judgment for defendant. (P. 246) Mistake as to subject-matter. (p. 254) SEAES V. GRAND LODGE OE THE ANCIENT ORDEE OF UNITED WORKMEN. 163 NEW YORK, 374. —1900. Appeal from a judgment of the Appellate Division, reversing a judgment in favor of plaintiff, and granting a new trial. Baetlett, J. This appeal presents rather a novel question. On the 31st of July, 1886, one Charles R. Baumgrass, residing in the city of Syracuse, became a member of a subordinate lodge of defendant and received a certificate of membership, which pro- vided in the event of his death the defendant would pay to his wife, Mary A. Baumgrass, the sum of $2000. On September 28, 1886, Baumgrass disappeared and was not seen or heard from thereafter until April 15, 1896, a period of nearly ten years. In the meantime important transactions and negotiations had taken place affecting the rights of the parties. Mrs. Baumgrass, the beneficiary, was advised to rest upon her rights until seven years had elapsed, when she might proceed under the legal presumption that her husband was dead. She waited about nine years and then brought an action against defendant on the 23d of September, 1895, to recover $2000 under the certificate of insurance. On the 26th day of March, 1896, and before the action was tried, she entered into an agreement of compromise with the defendant, under which her suit against it was discontinued without costs. The agreement recited the facts and provided for the settle- ment and discontinuance of the action ; that the defendant should pay to the beneficiary "the sum of $666 in cash promptly;" that said $666 "is not to be returned in any event;" that $1334 should be placed by defendant in the hands of a trustee to be held by him until July 1, 1897, subject to the condition that if before that time the defendant should produce reasonable REALITY OF CONSENT : MISTAKE. 775 proof that tiie insured was alive, the money so deposited was to be returned to it, but failing in such proof, it was to be paid to the beneficiary and, in the language of the agreement, " she shall take full title to the same." Twenty days after the execution of this agreement, and before the defendant had made the absolute payment of f 666 as agreed, the insured was proved to be alive. Thereupon the beneficiary demanded payment of the $666, which was refused, and she assigned her claim under the agreement of compromise to the plaintiff. The facts are undisputed; the Special Term rendered judgment for plaintiff, which was reversed by the Appellate Division with a divided court. The defendant rests its defense on the legal proposition that the agreement on which the plaintiff seeks to recover was made while both parties thereto were laboring under a material mistake of fact, to wit, the supposed death of the insured, and is, there- fore, unenforceable. The counsel for the defendant has cited us to many authorities to the general effect that where parties to a contract have entered into it imder the impression that a certain state of facts existed, which proved to be error, equity will afford relief. This is a sound proposition of law, but it has no application to the facts in this case. The material facts may be briefly stated. The insured disap- peared absolutely, leaving his wife as beneficiary under his certifi- cate of insurance issued by the defendant ; she waited nine years and then sued to recover the total insurance of f 2000. In this situation the defendant seeks a compromise. It is not unreason- able to assume that the defendant regarded the chances of suc- cess in the litigation as decidedly in favor of the plaintiff ; the legal presumption arising at the end of seven years, that the in- sured was dead, had existed for two years. What then was there to compromise in the action then pending ? Clearly but one thing was dealt with or could be in the agreement of settlement, to wit, the possibility that the insured should prove to be alive. That this was the basis of compromise upon which the agree- ment rested is perfectly apparent on the face of the instrument. 776 FORMATION OF CONTRACT. The defendant said to the beneficiary, give us sixteen months more time to prove the insured is alive and discontinue your suit at once. If you do this, we will make you a cash payment of $666, which is not to be paid back in any event, and, at the expiration of the sixteen months, if we fail to prove the insured is alive, we will pay you $1334, which is to be held for both of us by a trustee meanwhile, and, if we do prove it, the money is to be returned to us. It is urged that there is no consideration for this agreement. The discontinuance of action, the extension of time in which defendant was to pay the insurance, and the compromise of a doubtful claim, were a sufficient consideration. It is also urged that the trial judge found that when the agree- ment was entered into, both parties believed the insured was dead. It was also found that notwithstanding such belief the contract recognized, contemplated, and provided for the possibility of the insured being alive. It is to be kept in mind that the present action is limited to the cash payment that was to have been made under the agreement, and in regard to which the defendant was in default at the time it was discovered that the insured was alive. This payment should have been made when the contract was signed, and it was then distinctly agreed that it should not be paid back "in any event," which meant it should not be repaid even if it were subse- quently proved that the insured was alive. In view of all the circumstances, it cannot be said that the parties entered into the agreement laboring under a mutual mis- take of fact. Mr. Pomeroy in his work on Equity Jurisprudence (§ 855, 2d ed.) states the correct rule governing this case. "Where parties have entered into a contract or arrangement based upon uncertain or contingent ^ events purposely as a compromise of a doubtful claim arising from them, and where parties have know- ingly entered into a speculative contract or transaction, one in which they intentionally speculated as to the result, and there is in either case an absence of bad faith, violation of confidence, mis- representation, concealment, and other inequitable conduct men- tioned in a former paragraph, if the facts upon which such agree- REALITY OF CONSENT : MISTAKE. 777 ment or transaction was founded or the event of the agreement itself turned out very differently from what was expected or antici- pated, this error, miscalculation, or disappointment, although re- lating to a matter of fact and not of law, is not such a mistake within the meaning of the equitable doctrine as entitles the disap- pointed party to any relief either by way of canceling the contract and rescinding the transaction, or of defense to a suit brought for its enforcement. In such classes of agreements and transactions the parties are supposed to calculate the chances and they certainly assume the risks." Again, in section 849, Mr. Pomeroy, after dealing with relief where a party is mistaken as to his legal rights, interests, or relations, closes with these words : " It should be care- fully observed that this rule has no application to compromises, where doubts have arisen as to the rights of the parties and they have intentionally entered into an arrangement for the purpose of compromising and settling those doubts. Such compromises, whether involving mistakes of law or fact, are governed by special ■considerations." A number of instructive authorities are cited by the learned author under both of these sections. It may be observed in this connection that the trial court found that there was no fraud on the part of the beneficiary, and, sub- stantially, that she had acted throughout in good faith. The agreement was in furtherance of a lawful compromise, and enforceable without regard to the validity of the beneficiary's claim under the original certificate of insurance. Compromises of disputed claims fairly entered into are final, and will be sus- tained by the courts without regard to the validity of the claims. Wehnm v. Kuhn, 61 N. Y. 623; White v. Hoyt, 73 N. Y. 505; Dunham v. Oriswold, 100 N. Y. 224 ; Grans v. Hunter, 28 N. Y. 589 ; Mowatt v. Wright, 1 Wend. 355. The defendant, in executing the agreement of compromise, as- sumed the risk and calculated the chances of being placed in the present situation, and there would seem to be no reason in law or public policy why plaintiff should not recover. It would be a harsh rule, indeed, that would preclude insurer and beneficiary nine years after the insured had disappeared from entering into an enforceable agreement of compromise under the state of facts here disclosed. 778 • FORMATION OF CONTRACT. The judgment of the Appellate Diyision should be reversed and the judgment of the Trial Term affirmed, with costs to the plaintiff in all the courts. Parker, C. J., Martin, Vann, Cullen, and Werner, JJ., concur ; Geaz, J., dissents. Judgment reversed, etc.* (P. 282) Fraudulent concealment. (p. 288) THE CLANDEBOYE.^ 70 FEDEEAL REP. (C. C. A.), 631. — 1895. This was a libel by Leo Lomm, master of the steamtug Daunt- less, against the steamship Clandeboye, W. H. Strickland, master, claimant, to recover compensation for salvage service. The Circuit Court rendered a decree awarding salvage in the sum of $10,000, from which the claimant has appealed. Seymour, District Judge. The material facts of the case are as follows : The Clandeboye, a large and valuable British steamer, had become disabled by breakage of machinery, and had arrived oif the Little Bahama Islands. Her mate had been sent by a ship's boat for assistance, and had on the 16th of May, 1894, arrived at Savannah. In pursuance of telegraphic instructions cabled to him by the owners, he had engaged the services of the Morse of New 1 In Biegel v. American Life Ins. Co. (153 Pa. St. 134) a creditor had a life insurance policy on the life of his debtor for $6000, the annual premium being $153.90. For thirteen years the whereabouts of the debtor were unknown and as the payment of the premiums became burdensome, the creditor took a paid-up policy for $2500 in lieu of the $6000 policy. The creditor supposed the debtor to be then living; the Insurance Company issued a policy for the amount to which the creditor was entitled, assuming the insured debtor to be still living. In fact, unknown to either party, the insured had died about ten days before the old policy was canceled and the new one issued. The creditor brought an action to reinstate the old policy and the court held (two judges dissenting) that there was a mutual mistake of a material fact, that both parties proceeded upon the assumption that the insured was still living and that the element of doubt as to whether he was living or dead did not enter into the transaction. 2 Although this case arises in admiralty, the principles upon which it is decided are drawn from the common law and equity. — Eds. REALITY OF CONSENT: FRAUD. 779 York, then, however, lying at the port of Philadelphia, which had agreed to proceed forthwith to the Little Bahamas, and tow the Clandeboye to Vera Cruz, her port of destination, for the sum of $5,000. Leo Lomm, the libellant, part owner and master of the tug Dauntless, lying at the time at its home port of Brunswick, Ga., having learned from the Savannah papers of the arrival at that port of the mate of the Clandeboye, and of the condition and location of that vessel, on the 17th of May telegraphed, through his agents, to Savannah, and received a reply stating that the tug Morse of New York had been chartered to go to the assistance of the Clandeboye. The distance from New York — and that from Philadelphia is about the same — to Stranger's Cay, where the Clandeboye was lying, is more than 1000 miles. From Bruns- wick the distance is about one-third as great. Captain Lomm's boat was lying idle. He concluded that he could beat the Morse in a race to the Clandeboye, and that, the master of the latter not knowing of the employment of the Morse, he could obtain a profitable job of salvage. The telegram announcing the employment of the Morse by the Clandeboye's owners reached Brunswick at a little after 3 p.m. of the 17th. Shortly after dark of the same day the Dauntless started for the Bahamas. She arrived at Stranger's Cay before noon of the 19th. Her master had the interview, and made with the master of the Clandeboye the contract, which is a matter in litigation, imme- diately thereafter, and in a couple of hours the vessels left for Newport News, one in tow of the other. Between three and four days afterwards the Morse reached the spot where the Clandeboye had been lying at anchor, to find that she had gone. The con- versation between the masters of the steamer and of the tug at Stranger's Cay contains the contract entered into between them and the words that led up to it. . . . The material facts in the testimony are that Captain Lomm told Captain Strickland of the arrival of his mate in Savannah, but did not tell him of the em- ployment of the Morse for his relief. The result of the enterprise of Captain Lomm will be disastrous to the owners of the Clandeboye if the decree of the District Court is allowed to stand. Captain Lomm declined to take the Clande- boye to Vera Cruz, the port to which her cargo was consigned, 780 FORMATION OF CONTRACT. and did tow her to Newport News, where she was repaired. Fifteen hundred tons of her cargo had to be unloaded and then reloaded before she proceeded to Vera Cruz. Her owners were compelled to pay to the owners of the Morse the sum of $1900 for the services of that tug, and salvage compensation amounting to $10,000 — double what the Morse had agreed to charge for towing the Clandeboye to Vera Cruz — has been awarded to the Dauntless. But the master of the steamship, in charge of his vessel, and not in communication with his owners, was fully em- powered to contract with the owners of the Dauntless. The contract made was binding, unless invalidated by the conduct of Captain Lomm in concealing the fact that the owners of the Clandeboye had engaged the services of the Morse. As is said by the judge in the court below : " Whether or not the right of Captain Lomm to a salvage reward was forfeited by his silence on the subject of the employment of the Morse, in his conferences at the Little Bahama banks with Captain Strickland, is the question on which the case depends. There is no doubt that Captain Lomm ought to have given this information to Captain Strickland. The question is, whether his obligation to do so was so stringent as to constitute the omission a fraudulent piece of deception." While the right to salvage does not necessarily always arise out of an actual contract, it does so in the case at bar. Services spon- taneously rendered to vessels wrecked, or, under the conditions of an earlier period, set upon by pirates, or attacked by enemies, or captured and rescued, are recompensed with salvage money, whether the services were or were not requested. The present case, however, is one of a different character. The Clandeboye, at anchor off the Bahamas, though disabled, and in a position of contingent peril, was not wrecked. She had remained eleven days without injury where she then was, and was under the plenary control of her master, who was at full liberty to accept or refuse the services of the Dauntless. The arrangement entered into between the two masters con- stituted a contract, and is subject to the principles which regulate the validity of contracts. If valid, the courts of admiralty are botmd to enforce it ; if not, to set it aside, in accordance with the general rules affecting all contracts. The law of contracts BEAUTY OF CONSENT: FRAUD. 781 requires of tlie parties to them mutual good faith. Is there any principle of mercantile law by which that obligation to good faith which required Captain Lomm to inform Captain Strickland of the hiring of the Morse is relaxed, and is not of so stringent a force as to make the omission fraudulent? If there is, it must be sought in the analogies of the rule of caveat emptor. The doc- trine of caveat emptor belongs, strictly speaking, to the law of sales, but its principles apply to other contracts. Nor is it a doc- trine peculiar to the common law. It is in force in all mercantile communities, and has always been administered under the civil law. Pothier says, speaking of the contract of sale : " Good faith prohibits, not only falsehood, but all suppression of everything which he with whom we contract has an interest in knowing, touching the thing which makes the object of the contract ; " but he adds, speaking of contracts where one party has not revealed all his information to the other : " The interest of commerce "' does not permit " parties to be readily admitted to demand a dis- solution of bargains which have been concluded; they must impute it to themselves in not being better informed." Poth. Cont. Sale, pt. 2, c. 2, §§ 234, 239. In the case of Laidlaw V. Organ, Chief Justice Marshall says : " The question in this case is whether the intelligence of extrinsic circumstances which might influence the price of the commodity, and which was exclu- sively within the knowledge of the vendee, ought to have been communicated by him to the vendor. The court is of the opinion that he was not bound to communicate it. It would be difficult to circumscribe the contrary doctrine within proper limits, where the means of intelligence are equally accessible to both parties." Laidlaw r. Organ, 2 Wheat. 178. "Under the general doctrine of caveat emptor, the vendor is not ordinarily bound to disclose every defect of which he may be cognizant, although his silence may operate virtually to deceive the vendee." Story, Cont. § 616. The general rule, both of law and equity, in respect to conceal- ments, is that mere silence with regard to a material fact which there is no obligation to divulge will not avoid a contract. Thus if A, knowing that there is a mine in the land of B, of which B is ignorant, should contract to purchase the land without divulg- ing the fact, it would be a valid contract, although the land 782 FORMATION OF CONTRACT. were sold at a price which it would be worth without the mine, because A is under no legal obligation, by the nature of the con- tract, to give any information thereof. Fox y. Macreth, 2 Brown, Ch. 400, 1 White & T. Lead. Cas. Eq. * 172. " Without some such general rule the facilities of sale would be greatly impeded, and there would be no security to the vendor " or to the vendee. Story, Cont. § 517. It will be noticed that the general rule of law is a requirement of good faith in mutual dealings, and that the doctrine of caveat emptor is an exception to such requirement, founded upon special reasons, viz. the necessities of commerce, and the impossibility of so limiting any other doctrine as to do justice. As Chief Justice Marshall says, " it would be difficult to circumscribe the contrary doctrine within proper limits." The necessities of commerce re- quire that enterprise should be encouraged by allowing diligence at least its due reward, and not interfering with any proper and reasonably fair competition for intelligence. Any other course would set the active and the slothful upon an equality. " Vigi- lantibus non dormientibus jura subveniunt." Even more weighty is the second reason given in support of the doctrine. The law works with blunt tools. Fallible memories, prejudiced statements, intentional falsehood, the bias of self- interest, ignorance, and stupidity, are all concomitants of much of the testimony from which she has to make up her judgments. General rules, applicable to the majority of cases, but sometimes having an oppressive bearing upon particular ones, make up the principles upon which, of necessity, she founds her decisions, for the law must be workable. It must be comprehensible to men who live under its rule, and must not be so complex as to over- burden the memory with minutiae. Further, were it open, in all cases of contracts, for a dissatisfied party to cry off, by saying that the other party had known better than he the value of the subject-matter, or the market price, or some other extrinsic cir- cumstance, there would be no finality in human dealings, and the only limitation to the litigation that would ensue would be that imposed by the diminution of business caused by such want of finality and certainty. But caveat emptor is but the exception, and not the rule. Its REALITY OF CONSENT: FRAUD. 783 operation is to be diligently circumscribed within proper limits. The doctrine is not applied (1) to cases of active fraud, one variety of which consists in misrepresentation of facts, including what is often equivalent, partial statements ; it is not applied (2) to cases in which trust is implied by reason either of the relations to one another of the parties, or the nature of the contract ; nor (3) to cases in which, in the absence of laches in the party injured, the persons dealing with one another do not deal upon mutually equal terms, by reason of there being special knowledge in the posses- sion of one party which is inaccessible to the other. (1) The case of actual or implied misrepresentation needs no illustration. (2) That of trust includes all the known fiduciary relations, — such as those of attorney and client, guardian and ward, agent and principal, and generally of all who stand in the relation of trustee and cestui que trust. It also includes dealings with regard to all matters which from their nature demand mutual confidence. One seeking insurance is bound to state all facts within his knowledge which would have an influence on the terms of the contract, but are unknown to the insurer. A vendor of goods is bound to point out any latent defect in them known to himself. A person selling negotiable paper warrants that he has no knowledge of any facts which prove it worthless. It is held that if one sells to another a check of a third party, knowing that other checks of the same party have been recently dishonored, without communicating the fact to the buyer, it is a fraudulent concealment. Brown v. Montgomery, 20 N". Y. 287. (3) The case of information possessed by one party and abso- lutely unobtainable by the other, though of rarer occurrence, is one in which the enforcement of the rule of good faith is fully as imperative as it is in the two classes of cases first mentioned. It is perhaps not properly an exception to the doctrine of caveat emptor but rather a case outside of its terms. The purchaser cannot look out for what he cannot have knowledge of. It is thus stated by Chancellor Kent in his Commentaries: "If there' be an intentional concealment or suppression of material facts in the making of a contract in cases in which both parties have not equal access to the means of information, it will be deemed unfair 784 FORMATION OF CONTRACT. dealing, and will vitiate and avoid the contract." 2 Kent, Comm. Lect. 39, *482. It is implied in Judge Marshall's opinion in Laid- law V. Organ, already cited, in the sentence ending with the words, "where the means of intelligence are equally accessible to both parties." Supra. Under this exception, more logically than under that of special confidence, where it is generally placed in the text books, comes the obligation of one who has manufactured, goods to reveal to a purchaser any latent defect in them known to himself, and the similar obligation of a vendor of real estate to inform a vendee of all incumbrances placed by himself upon the land. Where one party to a contract has information inac- cessible to the other, neither of the reasons assigned for the principle of caveat emptor applies. The contract is not one which should be sustained to encourage mercantile competition and diligence ; for, where knowledge cannot be obtained, compe- tition is impossible and diligence useless, there can be no vigi- lance to be rewarded or sloth to be discouraged. Nor would much danger of unsettling the finality of business transactions or of opening bargains to the uncertainties of conflicting testimony about the equality of knowledge of the parties be likely to arise by reason of the invalidating of contracts for this cause. The case at bar is the first of the kind that has come before a court of admiralty, but it is as striking a one as could be imagined or invented. It is one in which one party to the bargain has knowledge of a fact which, if known to the other, would have prevented the making of the contract. The ignorance of the fact on the part of the second party is one which cannot be made a subject of controversy, and this ignorance was known to the party suing upon the contract. To give him the benefit of it, to the injury of the claimants, would be, in our opinion, a startling vio- lation of the fundamental principle of all law, that equity is equality. We think that the agreement between the masters of the two vessels, made in the case at bar, is infected with all three of the vices just stated, and is, therefore, not within the doctrine of caveat emptor. It must, therefore, be declared void under the principle that requires good faith in mutual dealings. 1. Without placing as much stress upon the point as upon the other two, we yet think it may be fairly held that in telling a part, REALITY OF CONSENT: FEAXJD. 785 but not the whole, of the truth to Captain Strickland, Captain Lomm was guilty of that suppressio veri which the law calls fraud. By this concealment he induced the former to make a contract which was contrary to the wishes and intents of his owners, who had already made with another a more favorable bargain, — a contract that he would not have made had the facts been fully disclosed. 2. The relation of salvor and saved, while not one of the fiduciary relations generally referred to in the law books, and accurately defined, as well as classified, is yet a fiduciary one. This will be readily apparent when we remember that in a large number of cases of salvage, particularly the earlier ones, the salvor has actually been in possession of the property saved, holding it for the lien which maritime law gives, and liable as trustee to the owner after the receipt of salvage. Besides this reason, another is to be found in the special confidence resulting from the very nature of the services rendered. We think special confidence as much belongs to the relation between salvor and saved as to that between insurer and insured. 3. Were the other reasons of declaring the contract void absent, we should unhesitatingly do so on the third ground, viz. because the parties were not dealing on terms of equality. There was on the part of Captain Lomm an intentional suppression of a material fact, in relation to which he was informed, while Captain Strickland had not access to any means of obtaining information of it. Looking at the position of the two parties to the bargain from another point of view, there appears to have been a striking inequality between them. The master of the Clandeboye had, when the Dauntless arrived at Stranger's Cay, been for nearly four weeks in a disabled vessel. He had lain helpless at his anchorage for eleven days. His only assistant, who was a navigator (the mate of the vessel), was absent, and he was alone in authority over the Clande- boye. He was suffering from the pressure of anxiety, responsi- bility, and delay. The master of the Dauntless, aware of all the circumstances, intent solely upon gain, fresh from home, with a mind disengaged and at ease, had an unfair advantage over him. In the short period during which he considered and agreed to accept the services proffered to him, Captain Strickland can hardly be supposed to have had the time or grasp of the facts that would 786 FORMATION OF CONTRACT. have enabled him to have drawn all the inferences from the fact of his mate's opportunities in Savannah that have been imagined by counsel. During that hurried interview between the masters of the two vessels, it doubtless confusedly occurred to the master of the Clandeboye that his mate was trying to do something for him, and that tugs would be at hand in a short time, prepared to tow him somewhere. Probably he thought of the nearest ports. His conversation shows that thoughts of this kind were in his mind. He was anxious to get away, and with the words " first come, first served," he made terms with Captain Lomm, whose tug had arrived first. But it would be unjust to suppose that he expected or had in his mind any thought of the possible existence of what was actually the fact, viz. a contract under which a power- ful tug had been employed by his owners to tow him to the place to which he desired to be taken (Vera Cruz), and was already on the way to Stranger's Cay, near the Little Bahamas, where he was lying. We see no reason to doubt his statement that, if he had known of the employment of the Morse, he would not have em- ployed the Dauntless. The parties were not dealing on equal terms, and their contract cannot be enforced. "While, however, the contract must be set aside, it does not nec- essarily follow that the libellant is entitled to no compensation. The question remains, of what, if anything, the Dauntless is en- titled to for any net benefit actually received by the Clandeboye from her services. It would be inequitable to allow the latter to refuse to pay for anything of use actually received by her. Nor do we wish to extend to a new case the exaction of penalties in civil actions. In the actual condition and position of the Clande- boye when taken in tow by the Dauntless she needed two things, — repairs, and the opportunity of taking her cargo to Vera Cruz. If Captain Lomm had not interfered, she would have been towed to Vera Cruz by the Morse at an expense, including cost of taking her mate and three seamen from Tybee, of $5200. Upon arriving at Vera Cruz, she could have discharged herself of her cargo, but could not have been repaired, owing to the fact that there are no facilities there for docking vessels. It would therefore have been necessary to have taken her to some port possessed of such facili- ties. New Orleans, Pensacola, and Newport News have been sug- REALITY OF CONSENT: FRAUD. 787 gested. The former places are nearer Vera Cruz than Newport News, but the latter is understood to have very superior facilities of the kind needed. The Dauntless rendered a real service to the Clandeboye in towing her to Newport News, where she could be docked. After being repaired, it became possible for her to pro- ceed to Vera Cruz under her own steam, but it seems probable from the testimony that, had she been towed to Vera Cruz in the first instance, she would have been compelled to take a tug in her journey to a dry dock. This expense she has been saved. In addition to this, she was saved by the Dauntless from the perils of a four days' longet stay at her anchorage. On the other hand, at Newport News she was put to the expense of unloading and reloading 1500 tons of her cargo, which is stated by Captain Strickland to have been f 1200. The captain also states that the time occupied was sixteen days, and estimates demurrage at £45 per day. From this demurrage there ought to be deducted the four days' time saved her by the Dauntless in taking her from Stranger's Cay before the arrival of the Morse. I suppose, too, that the demurrage is estimated at charter-party rates, and is excessive. I should be disposed to allow $1700 for it. The amount lost to the owners of the Clandeboye by their obligations to the owners of the Morse was $1900. The total on this side, as I estimate it, would be $4800, besides costs of steaming from Newport News to Vera Cruz. Against this is the saving of the $5200, which was to have been paid for the services of the Morse, the cost of taking the Clandeboye from Vera Cruz to a port with docking facilities, which would have been necessary had she been towed to Vera Cruz before being repaired, and the benefit to her of her earlier rescue from the perils of her position on the coast of the Little Bahamas. On the whole, the court allows $1000 as the net gain to the owners of the Clandeboye for the services of the Dauntless. Decree modified, and rendered in favor of the libellant in the sum of $1000. GoFE, Circuit Judge. I agree with the court that the agree- ment made by the masters of the Clandeboye and the Dauntless must, under the circumstances shown to have existed at the time it was entered into, be declared void, and that it cannot be en- 788 FORMATION OF CONTRACT. forced in a court of admiralty. I do not concur in that part of the opinion that allows the libellant compensation for the services rendered by the Dauntless, undertaken, as they -were, in bad faith, with a fraudulent purpose, and the intention of suppress- ing the truth, thereby taking advantage of a vessel, if not in danger, at least in distress, and causing its owners an additional and unnecessary expense. In a case of this character a court of admiralty is a court of equity, and a party who asks its aid must come before it with clean hands, and with such facts as will, ex aequo et bono, show a case proper for its interposition. If the salvors have been guilty of misconduct or of negligence, or have been in collusion with the master, or have attempted to take advantage of the unfortunate, they have thereby forfeited all claim for compensation even for services actually rendered. The Boston, 1 Sumn. 328, Fed. Cas. No. 1673; TJie Byron, 5 Adm. Rec. 248, Fed. Cas. No. 2275; The Lady Worsley, 2 Spinks, 253; The Beilo Corrunes, 6 Wheat. 152; Marvin, Wreck & Salv. § 222; Jones, Salv. 124; Cohen, Adm. Law, 171. The undisputed facts of this case show it to be at least most peculiar, the books containing nothing similar to it, and in my judgment the courts should not aid in duplicating it by tolerat- ing such litigation. I think that the decree of the District Court should be reversed^ and the cause remanded, with directions that the libel be dismissed, and that the claimant recover all costs. (P. 308) Duress. SILSBEE V. WEBBER. 171 MASSACHUSETTS, 378. — 1898. Contract, to recover $1150, alleged to have been obtained by duress. The trial judge directed a verdict for defendant and reported the case for the consideration of the Supreme Court. Holmes, J. This is an action to recover money alleged to have been got from the plaintiff by duress. In the court below, a verdict was directed for the defendant, and the case was re- REALITY OF CONSENT: DURESS. 789 ported. The plaintiff's son had been in the defendant's employ, had been accused by him of stealing the defendant's money, had signed a confession (whether freely or under duress is not mate- rial), and had agreed to give security for $1500. There was a meeting between the plaintiff and the defendant, in the course of which, as the plaintiff testified, the defendant said he should have to tell the young man's father, the plaintiff's husband. At that time, according to her, her husband had trouble in his head, was melancholy, very irritable, and unable to sleep, so that she feared that, if he were told, the knowledge would make him insane. The plaintiff further testified that she previously had talked with the defendant about her husband's condition, and that she begged him not to tell her husband, and told him that he knew what her husband's condition was; but that he twice threatened to do it in the course of his inquiries as to what prop- erty she had, and that, to prevent his doing so, she, the next day, went, by agreement, to the office of the defendant's lawyer, and executed an assignment of her share in her father's estate. Her son was present, and, as he says, protested that this was extor- tion and blood money. It is under this assignment that the money sued for was collected. In the opinion of a majority of the court, if the evidence above stated was believed, we cannot say that the jury would not have heen warranted in finding that the defendant obtained and knew that he was obtaining the assignment from the plaintiff solely by inspiring the plaintiff with fear of what he threatened to do ; that the ground for her fear was, and was known to be, her expecta- tion of serious effects upon her husband's health if the defendant did as he threatened; and that the fear was reasonable, and a sufficiently powerful motive naturally to overcome self-interest, and, therefore, that the plaintiff had a right to avoid her act. Harris v. Carmody, 131 Mass. 51, 53, 54; Morse v. Woodworth, 155 Mass. 233, 260. It is true that it has been said that the duress must be such as would overcome a person of ordinary courage. We need not con- sider whether, if the plaintiff reasonably entertained her alleged belief, the well-grounded apprehension of a husband's insanity is something which a wife ought to endure, rather than to part with 790 FORMATIOK OF CONTRACT. any money, since we are of opinion that the dictum referred to, if taken literally, is an attempt to apply an external standard of conduct in the wrong place. If a party obtains a contract by creating a motive from which the other party ought to be free, and which, in fact, is, and is known to be, sufficient to produce the result, it does not matter that the motive would not have pre- vailed with a differently constituted person, whether the motive be a fraudulently created belief or an unlawfully created fear. Even in torts, — the especial sphere of external standards, — if it is shown that in fact the defendant, by reason of superior insight, contemplated a result which the man of ordinary prudence would not have foreseen, he is answerable for it ; and, in dealing with contributory negligence, the personal limitations of the plaintiff, as a child, a blind man, or a foreigner unused to our ways, always are taken into account. Late American writers repudiate the notion of a general external measure for duress, and we agree with them. Clark, Cont. 357; Bish. Cont. (ed. 1887) § 719. See James v. Roberts, 18 Ohio, 548, 562 ; Eadie v. Slimmon, 26 N. Y. 9, 12. The strongest objection to holding the defendant's alleged action illegal duress is that, if he had done what he threat- ened, it would not have have been an actionablfe wrong. In general, duress going to motives consists in the threat of illegal acts. Ordinarily, what you may do without liability you may threaten to do without liability. See Vegelahn v. Guntner, 167 Mass. 92, 107 ; Allen v. Flood [1898] App. Gas. 1, 129, 165. But this is not a question of liability for threats as a cause of action, and we may leave undecided the question whether, apart from special justification, deliberately and with foresight of the conse- quences, to tell a man what you believe will drive him mad, is actionable if it has the expected effect. Spade v. Railroad, 168 Mass. 285, 290 ; White v. Sander, 168 Mass. 296. If it should be held not to be, contrary to the intimations in the cases cited, it would be only on the ground that a different rule was unsafe in the practical administration of justice. If the law were an ideally perfect instrument, it would give damages for such a case as readily as for a battery. When it comes to the collateral question of obtaining a contract by threats, it does not follow REALITY OF CONSENT: DURESS. 791 that, because you cannot be made to answer for tlie act, you may use the threat. In the case of the threat, there are no difficulties of proof, and the relation of cause and effect is as easily shown as when the threat is of an assault. If a contract is extorted by brutal and wicked means, and a means which derives its immu- nity, if it have immunity, solely to the law's distrust of its own powers of investigation, in our opinion the contract may be avoided by the party to whom the undue influence has been applied. Some of the cases go further, and allow to be avoided contracts obtained by the threat of unquestionably lawful acts. Morse v. Woodworih, 155 Mass. 233, 261; Adams v. Bank, 116 N. Y. 606 ; Williams v. Bayley, L. E,. 1 H. L. 200, 210. In the case at bar there are strong grounds for arguing that the plaintiff was not led to make the assignment by the duress alleged. They are to be found in the fact that the plaintiff sought the defendant ; in her testimony that when she made the assignment she wanted the defendant to have full security for all her son owed him ; and in the plaintiff's later conduct ; but we are con- sidering whether there was a case of duress for the jury. The assignment was on October 10, 1894. Before March 12, 1895, the plaintiff had joined with her sisters in employing a lawyer to secure her share in her father's estate, intending it to be paid over to the defendant. On March 12, 1895, to the same end, she signed a petition for distribution, setting forth the assignment, and afterwards took some further steps, and never made any claim that the assignment was not valid until Decem- ber, 1895, before which time it had come to the knowledge of her husband. Apart from the weight which these facts may give to the argument that the plaintiff did not act under duress, they found an independent one, — ;that, if she did act under duress, she has ratified her act. The assignment was formally valid. The only objection to it, if any, was the motive for it. Fairbanks V. Snow, 145 Mass. 153, 154. Therefore it might be ratified by the plaintiff when she was free. But the acts relied on were done in connection with a member of the bar, who had been the defendant's lawyer before he undertook to act for the plaintiff, and who plainly appeared to be acting for the plaintiff only in the defendant's interest. We cannot say that the jury might 792 FORMATION OF CONTEACT. not find that the later acts of the plaintiff, if not done under the active influence of her supposed original fear, at least were done before the plaintiff had gained an independent foothold, or real- ized her independence or her rights. We are of opinion that the case should have been left to the jury. Adams v. Bank, 116 N. Y. 606, 614, 615. Knowlton, J., dissented upon the ground that there was not suffteient evidence to go to the jury that defendant knew that telling the father would be likely to drive him insane, or seriously injure his mental condition, and that there was not sufficient evidence that defendant believed that the statement that he should tell her husband would overcome the plaintiff's will. "Upon his understanding of the facts, such a suggestion would not be expected to overcome the will of a person of ordinary firm- ness, and there is no evidence that she was sujjposed by Mm to be, or that she was in fact, less firm than other women. Whether the rule so often stated in the books, that to avoid a contract on the ground of duress by threats, a threat must be such as would over- come the will of a person of ordinary firmness, be of universal application or not, it undoubtedly furnishes a correct guide in cases in which there is nothing to show that the party who seeks to avoid the contract was not of ordinary courage and firmness." Field, C. J., and Lathrop, J., concurred in the dissent. Verdict set aside. Case to stand for trial. (P. 308) Dwress. MAKSHALL, J., in GALUSHA v. SHEEMAN. 81 NORTHWESTERN REP. (Wis.), 495. — 1900. It [duress] is a branch of the law that, in the process of de- velopment from the rigorous and harsh rules of the ancient com- mon law, has been so softened by the more humane principles of the civil law and of equity, that the teachings of the older writers on the subject, standing alone, are not proper guides. The change from the ancient doctrine has been much greater in some jurisdictions than in others. There are many adjudications based on citations of authorities not in themselves harmonious, EEALITY OF CONSENT : DURESS. 793 and many statements in legal opinions based on the ancient theory of duress, -which together create much confusion on the subject, not only as it is treated by text writers, but by judges in legal opinions. Anciently, duress in law by putting in fear could exist only where there was such a threat of danger to the object of it as was deemed sufficient to deprive a constant or courageous man of his free will, and the circumstances requisite to that condition were distinctly fixed by law ; that is to say, the resisting power which every person was bound to exercise for his own protection was measured, not by the standard of the individual affected, but by the standard of a man of courage ; and those things which could overcome a person, assuming that he was a prudent and constant man, were not left to be determined as facts in the particular case, but were a part of the law itself. Co. Litt. 253. . . . Early in the development of the law, the legal standard of resistance that a person was bound to exercise for his own pro- tection was changed from that of a constant or courageous man to that of a person of ordinary firmness. That will be found by reference to some of the earlier editions of Chitty on Contracts. See 1 Chit. Cont. (11th ed.) p. 272; 2 Greenl. Ev. 301. But the ancient theory that duress was a matter of law to be determined 'prima facie by the existence or nonexistence of some circumstance deemed in law sufficient to deprive the alleged wronged person of freedom of will power, was adhered to generally, the standard of resisting power, however, being changed, so that circumstances less dangerous to personal liberty or safety than actual depri- vation of liberty or imminent danger of loss of life or limb, came to be considered sufficient in law to overcome such power. The oppressive acts, though, were still referred to as duress, instead of the actual effect of such acts upon the will power of the alleged wronged person. It is now stated, oftener than other- wise, in judicial opinions, that in determining whether there was or was not duress in a given case, the evidence must be con- sidered, having regard to the assumption that the alleged oppressed person was a person of ordinary courage. . . . Duress, in its broad sense, now includes all instances where a condition of mind of a person, caused by fear of personal injury or loss of 794 FORMATION OF CONTRACT. limb, or injury to such person's property, wife, child, or husband, is produced by the wrongful conduct of another, rendering such person incompetent to contract with the exercise of his free will power, whether formerly relievable at law on the ground of duress or in equity on the ground of wrongful compulsion. The making of a contract requires the free exercise of the will power of the contracting parties, and the free meeting and blend- ing of their minds. In the absence of that, the essential of a contract is wanting; and if such absence be produced by the wrongful conduct of one party to the transaction, or conduct for which he is responsible, whereby the other party, for the time being, through fear, is bereft of his free will power, for the pur- pose of obtaining the contract, and it is thereby obtained, such contract may be avoided on the ground of duress. There is no legal standard of resistance which a party so circumstanced must exercise at his peril to protect himself. The question in each case is, was the alleged injured person, by being put in fear by the other party to the transaction for the purpose of obtaining an advantage over him, deprived of the free exercise of his will power, and was such advantage thereby obtained ? If the propo- sition be determined in the affirmative, no matter what the nature of the threatened injury to such person, or his property, or the person or liberty of his wife or child, the advantage thereby obtained cannot be retained. The idea is that what constitutes duress is wholly a matter of law and is simply the deprivation by one person of the will power of another by putting such other in fear for the purpose of obtain- ing, by that means, some valuable advantage of him. The means by which that condition of mind is produced are matters of fact, and whether such condition was in fact produced is usually wholly matter of fact, though of course the means may be so oppressive as to render the result an inference of law. It is a mistaken idea that what constitutes duress is different in case of an aged person or a wife or child than in case of a man of ordi- nary firmness. As said in Wolff y. Bluhm (95 Wis. 257), the con- dition of mind of a person produced by threats of some kind, rendering him incapable of exercising his free will, is what con- stitutes duress. The means used to produce that condition, the REALITY OF CONSENT: DURESS. 795 age, sex, and mental characteristics of the alleged injured party, are all evidentiary, merely, of the ultimate fact in issue, of whether such person was bereft of the free exercise of his will power. Obviously, what will accomplish such result cannot justly be tested by any other standard than that of the particular person acted upon. His resisting power, under all the circum- stances of the situation, not any arbitrary standard, is to be con- sidered in determining whether there was duress. The more modern text writers so state the law to be. . . . The true doctrine of duress, at the present day, both in this country and England, is that a contract obtained by so oppressing a person by threats regarding his personal safety or liberty, or that of his property, or of a member of his family, as to deprive him of the free exercise of his will and prevent the meeting of minds necessary to a valid contract, may be avoided on the ground of duress, whether the oppression causing the incompe- tence to contract be produced by what was deemed duress formerly, and relievable at law as such, or wrongful compulsion remediable by an appeal to a court of equity. The law no longer allows a person to enjoy, without disturbance, the fruits of his" iniquity, because his victim was not a person of ordinary courage ; and no longer gauges the acts that shall be held legally sufficient to produce duress by any arbitrary standard, but holds him who, by putting another in fear, shall have produced in him a state of mental incompetency to contract, and then takes advantage of such condition, no matter by what means such fear be caused, liable at the option of such other to make restitution to him of everything of value thereby taken from him. . . . An arbitrary rule, that a threatened lawful arrest and imprison- ment implying harsh or unreasonable use of criminal process, and where no warrant has been issued and there is no danger of the threat being immediately carried out, is not sufficient to produce duress, seems unreasonable. Such, however, is the doctrine of the Supreme Court of Maine, and the cases supporting it will be found very generally cited by text writers and judges. That rule goes naturally with the doctrine that every person, without regard to actual mental power, is bound to come up to the standard of average men in that regard or suffer the consequences. . . . 796 FORMATION OF CONTRACT. (p. 325) Wagers on rise and fall of prices. (p. 332) ASSIGNED ESTATE OE L. H. TAYLOR & COMPANY. (Appeal of William h. howaed.) 192 PENNSYLVANIA STATE, 304.— 1899. Exception to auditor's report, wliich was as follows : Claim of W. H. Howard for f 11,921.62. Mr; Howard is a capitalist and a farmer. On March 13, 1893, lie bought 100 shares of L. C. & N. Co. for $4337.50, and the next day paid L. H. Taylor & Co. $2000. During the month of April, 1893, he appears to have ordered bought and sold about 1200 shares of stock. On April 30, 1893, he ordered sold "short" 100 shares of B. & 0. and 100 shares of P. R. & N. E. In November, 1896, he again turned " bear," selling " short " in that single month 500 shares of Reading E. Co., 200 shares of American Tobacco Co., 100 shares of Welsbach Light Co. In December, 1895, he also made short sales of Welsbach Light Co. and Ameri- can Sugar Refining Co. common. The account had been closed in 1893, but reopened thereafter. No stock was delivered to him after March 13, 1893, when the account was reopened. He tes- tified that he did not intend to gamble. The account, however, including his enormous short sales, has all the earmarks of a gaming transaction, and I so find. I disallow the claim. Mitchell, J. It has been settled by this court, so often that it ought not to require reiteration, that dealing in stocks, even on margins, is not gambling. Stocks are as legitimate subjects of speculative buying and selling as flour or dry goods or pig iron. A man may buy any commodity, stock included, to sell on an ex- pected rise, or sell " short," to acquire and deliver on an expected fall, and it will not be gambling. Margin is nothing but security, and a man may buy on credit, with security or without, or on borrowed money, and the money may be borrowed from his broker as well as from a third person. The test is, did he intend to buy, or only to settle on differences ? If he had bought and paid for his stock, held it for a year and then sold, no one would call it gambling; and yet it is just as little so if he had it but an hour, LEGALITY OF OBJECT. 797 and sold before he had in fact paid for it. And so with selling. Every merchant who sells you something not yet in his stock, but which he undertakes to get for you, is selling " short," but he is not gambling, because, though delivery is to be in the future, the sale is present and actual. The true line of distinction was laid down in Peters v. OriTri^ (149 Pa. St. 163) and has not been departed from or varied : "A purchase of stock for speculation, even when done merely on mar- gin, is not necessarily a gambling transaction. If one buys stock from A, and borrows the money from B to pay for it, there is no- element of gambling in the operation, though he pledges the stock with B as security for the money. So, if instead of borrowing the money from B, a third person, he borrows it from A, or, in th& language of brokers, procures A to 'carry' the stock for him, with or without margin, the transaction is not necessarily different in character. But in this latter case, there being no transfer or de- livery of the stock, the doubt arises whether the parties intended there should ever be a purchase or delivery at all. Here is the dividing line. If there was not under any circumstances to be a delivery, as part of and completing a purchase, then the transac- tion was a mere wager on the rise and fall of prices ; but if there was, in good faith, a purchase, then the delivery might be post- poned, or made to depend on a future condition, and the stock carried on margin, or' otherwise, in the meanwhile, without af- fecting the legality of the operation." This has been uniformly followed. Hopkins v. O'Kane, 169 Pa. St. 478 ; Wagner v. Hilde- brand, 187 Pa. St. 136. And the rule goes so far that an agree- ment for an actual sale and purchase will make the transaction valid, though it originated in an intention merely to wager. An- thony V. Unangst, 174 Pa. St. 10. Turning now to the facts of the present case, it is clear that the law was not correctly applied by the auditor and the court below. The brokers made an assignment on December 21, 1895, on which day they held certain stock for appellant, which they had bought on his order ; and he had certain other stock, which they had sold on his order, but which he had not yet delivered to them. He desired to close the account, complete the mutual deliveries, and receive the balance which the transactions left in his favor. He was en- 798 FORMATION OF CONTRACT. titled to do so. Even if the transactions were wagering the agree- ment of the parties to make the sales actual would, under Anthony V. Vnangst (174 Pa. St. 10), have made them valid. It is true, the settlement was not actually made until January 10th ; but it was made as of December 20th, the day before the assignment, and the auditor reports that there had been no change of values mean- while. The time of striking a balance on the books and deliv- ering the stock was not important. Delivery is not in itself a material fact. Its only value is as evidence of the intent to make a bona fide sale. If such is the intent, the delivery may be present or future without affecting validity. But there was no sufficient evidence that the transactions were illegal at any time. The auditor reports that " the stocks ordered to be bought or sold by the customers of L. H. Taylor & Co. were, as shown by their books, actually bought and sold ; and, as this evidence is uncontradicted, I must and do so find. . . . Thus, so far as L. H. Taylor & Co. were concerned, the transactions were not fictitious, but were actual purchases and sales of stock." This finding should have been a warning to caution in taking a different view of the appellant's position in the transactions. It is true, the purchase or sale may be actual on part of the broker, and merely a wager on part of the customer (see OhampUn v. Smith, 164 Pa. St. 481) ; but there should be at least fairly persuasive evidence of the difference. There is none here. The transactions covered by the account began with a small cash bal- ance to appellant's credit, followed by an order to buy 200 shares of Wabash common, which were bought by the brokers, paid for by appellant, and delivered to him. The close, two years and a half later, showed, as already said, a large number of shares in the hands of the brokers bought for appellant, and of which he de- manded delivery, and other shares sold for him and which he had in his possession ready to deliver. As to the intermediate trans- actions, appellant testified, " It was always the intention to buy the stocks out and out, and pay for them, and I had money to do it with." In the face of these facts and this uncontradicted testi- mony, the auditor found that " the account, including his enor- mous short sales, has all the earmarks of a gaming transaction, and I so find it." This was a mere inference, unwarranted by LEGALITY OF OBJECT. 799 the account itself, and wholly opposed to all the evidence in the case. Judgment so far as it relates to appellant's claim, reversed, and claim directed to be allowed. (P. 351) Agreements to arbitrate. MILES V. SCHMIDT. 168 MASSACHUSETTS, 339. — 1897. Bill in equity, to enforce the specific performance of a written contract. The defendant demurred to the bill, assigning as ground there- for the following arbitration clause contained in the contract : "It is further mutually agreed that in case of any alleged violation of the promises and agreements herein made by said Schmidt or by said firm, if such alleged violation is continued after thirty days' notice in writing from the other to the party charged as guilty of such violation, requiring such party to cease such violation, then the party so guilty shall be liable to the other for all damages caused by such violation, to be determined by a board of referees in manner as follows : " After the expiration of the thirty days' notice provided for in the above clause, said Schmidt and said firm shall each forth- with appoint a referee, and the two so appointed shall appoint the third. If either party fails to appoint a referee for ten days, after written notice of such appointment by the other party, then the referee so appointed shall appoint a second, and the two so appointed shall appoint a third. " The referees shall proceed forthwith to hear the parties' and to determine whether or not there has been any violation of the agreements herein contained, and whether the same has continued for more than thirty days after notice to discontinue such viola- tion above provided for, and what damage either party has sus- tained by reason of such violation. " The decision of a majority of said referees shall be final and binding on said parties, and they hereby agree to abide by, sub- 800 FORMATION OF CONTRACT. mit to, and forthwith to comply with any decision, or award, of a majority of said referees. The expense of any such reference shall be borne by any or all of the parties in such proportion as said referees may determine." The Superior Court sustained the demurrer and dismissed the bill, and the plaintiff appealed to this court. Morton, J. Perhaps, if the question were a new one, no ob- jection would be found to permitting parties to select their own tribunals for the settlement of civil controversies, even though the result might be to oust the courts of jurisdiction in such cases. But the law is settled otherwise in this State. Bowe v. Williams, 97 Mass. 163; Wood v. Humphrey, 114 Mass. 185; Pearl v. Harris, 121 Mass. 390 ; Vass r. Wales, 129 Mass. 38 ; White v. Middlesex Railroad, 135 Mass. 216. When the question is a preliminary one, or in aid of an action at law or suit in equity, such, for instance, as the ascertainment of damages, an agreement for arbitration will be upheld. Wood v. Humphrey, 114 Mass., 185; Reed v. Washington Ins. Co., 138 Mass. 572, 575; Hutchinson v. Liverpool & London & Globe Ins. Co., 153 Mass. 143. The defendant contends that the agreement for arbitration in this case goes no further than the assessment of damages. But it is expressly provided, amongst other things, that the referees shall " hear the parties and determine whether or not there has been any violation of the agreements herein contained, . . . and what damage either party has sustained" thereby, and that "the decision of a majority of said referees shall be final and binding on said parties." The evident intent is to submit all the disputes relating to the performance of the agreement to the final decision of a tribunal constituted by the parties themselves. The referees are not only to assess the damages, but also are to determine whether there have been any violations of the agree- ment, and their decision in all matters is to be final. The agree- ment to submit to arbitration was therefore in violation of law, and the demurrer should have been overruled. Demurrer overruled, and decree dismissing bill set aside.^ 1 It has been held that an arhitration provision in a mutual beneiit society policy is binding and enforceable. Bood v. Bailway &c. Ass'n, 31 Fed. R. 62; VanPoucke-^. ^SocieJy, 63 Mich. 378 ; Bobinson v. Templar Lodge, 117 LEGALITY OF OBJECT. 801 (P. 359) Contracts affecting marital relations. POLSON u STEWAET. 167 MASSACHUSETTS, 211. — 1897. A husband, in order to induce his wife to forbear from bringing a suit for divorce, to which she was entitled, covenanted to surrender to her all his rights in lands owned by her. Holmes, J. [After deciding that this contract, made in North Carolina, under whose laws the husband and wife were competent to contract with each other, could be enforced as to lands situated in Massachusetts.] Objection is urged against the consideration. The instrument is alleged to have been a covenant. It is set forth, and mentions one dollar as the consideration. But the bill alleges others, to which we have referred. It is argued that one of them, forbearance to bring a well-founded suit for divorce, was illegal. The judgment of the majority in Merrill v. Peaslee (146 Mass. 460) expressly guarded itself against sanctioning' such a notion, and decisions of the greatest weight referred to in that case show that such a consideration is both sufficient and legal. Newsome v. Newsome, L. E. 2 P. & D. 306, 312 ; Wilson v. WMson, 1 H. L. Cas. 538, 574; Besant v. Wood, 12 Ch. D. 605, 622 j Hart V. Hart, 18 Ch. D. 670, 685 ; Adams v. Adams, 91 N. Y. 381 ; Sterling v. Sterling, 12 Ga. 20. Demurrer overruled.' Cal. 370. And this doctrine has been extended to mutual fire insurance com- panies. Raymond v. Farmers' Mut. Fire Ins. Co., 114 Mich. 386. Courts now seem inclined to uphold such agreements whenever possible. 1 In Merrill v. Peaslee (146 Mass. 460) referred to above, the court (three judges dissenting) held that where a wife had left her husband on account of extreme cruelty, and was about to bring a suit for divorce, a promise by the husband to pay her |5000 on consideration that she would forego the suit for divorce and would return to him and live with him as his wife, was founded upon an illegal consideration so far as it consisted of the resumption of the marital relations. " It is as much against public policy to restore interrupted conjugal relations for money, as it is to continue them without interruption for the same consideration." In Adams v. Adams (91 N. Y. 381) the wife withdrew a divorce suit, condoned the ofEense, and returned to live with the husband on his promise to pay her $1000, and it was held that this was a valid and enforceable promise, and in no way aga,inst public policy. FFF 802 FORMATION OF CONTRACT. (P. 373) Effect of illegality. (p. 383) FISHELL V. GRAY. 60 NEW JERSEY LAW, 5. — 1897. Action by Fishell against Gray, as receiver of the United States Credit System Company, to recover the purchase price of a business, good will, etc. Verdict for plaintiff. Beaslet, C. J. A sealed agreement is the basis of this suit. The parties to the deed were the plaintiff, Fishell, and the United States Credit System Company, a corporation, that has become insolvent, and is now represented by Gray, as receiver. By this instrument the plaintiff assigned to the company just designated the good will of a large and valuable business for the insurance of merchants against losses which he had carried on and established, together with certain personal property, and in addition stipu- lated as follows, viz. : "Fourth. That the said party of the second part, for the con- sideration aforesaid, hereby agrees not to interest himself, or en- gage in, or have others interest themselves for his benefit or in , his behalf in any manner, in any company, corporation, or firm whose business is that of guarantying merchants or others against loss in business ; and, should the said party of the second part violate his agreement in this paragraph contained, the payments agreed to be made to him in the third paragraph of this contract are to thereupon cease, and to be forfeited forever thereafter." The action is brought to recover the moneys agreed to be paid by the company in return for the transfer above mentioned, and the covenants contained in the agreement on the part of the plaintiff. The jury, under the instructions of the court, found for the plain- tiff, and motion now is to set aside that verdict. The principal contention against a recovery on the deed in question argued and discussed in the brief of the counsel of the defendant is that the agreement in suit is illegal and void by reason of the stipulation above recited to the effect that the plain- LEGALITY OF OBJECT. 803 tiff would not in any wise engage in the insurance business, whose good will was transferred to the Credit System Company. The proposition posited is that, as this part of the consideration for the defendant's promise is illegal, the entire contract falls, and that no part of it can be enforced. In support of this position a number of authorities are cited, some of which sustain it. The rule is generally laid down by the text-writers in treating of the effect of an illegal element in the consideration of contracts in terms so general that it embraces the class of stipulations which provide in too broad a form against competition in a given busi- ness. According to it, a contract not to compete in a certain business within reasonable bounds as to place is permissible, but, if it possesses too wide a scope, it becomes an unnecessary re- straint of trade, and it vitiates all promises that rest upon it, in whole or in part, as a consideration. As a consideration, it was, in the earlier cases, treated as devoid of legal force, but it was deemed to vitiate all other considerations with which it was blended. On this theory an agreement to abstain generally from carrying on a certain business, as in the present case, was treated as though it were an agreement to commit a crime, and, as a con- sequence, it illegalized everything that it touched. But this view, it has since been perceived, is unnecessarily stringent, and is, in fact, quite unreasonable. There is nothing immoral or criminal in a stipulation not to engage in a certain business. A man may bind himself to such an abstention without incurring any legal penalty. The only effect is that such an engagement cannot be enforced, either at law or in equity. And this is the aspect in which it is regarded by the modern authorities. This modifica- tion of judicial opinion is very pointedly stated in one of the cases cited in the brief of the counsel of the plaintiff. The authority thus vouched is that of Green v. Price (13 Mees. & W. 695), and in it, Pollock, C. B., referring to the sort of agreement now in question, said : " It is not like a contract to do an illegal act. It is merely a covenant, which the law will not enforce, but the party may perform it if he chooses." And upon the citation by counsel of cases holding a contrary doctrine the reply of the chief baron was : " The policy of the law has been altered since that time. It has been found to be beneficial to commerce that 804 FORMATION OF CONTRACT. there should be a restraint of trade to some extent, and the courts thereupon retrace their steps." This distinction between a merely unenforceable promise in a matter of this kind and one that is criminal is illustrated in the decision of the case of Erie By. Co. ads. Union Locomotive & Ex- press Co., the principle being maintained that a stipulation that was not immoral would not vitiate or avoid the entire agreement. And if we regard the dictates of justice alone, no other doctrine is possible. This is obvious from the present case. If it be true that by reason of the promise of the plaintiff to abstain from this business being blended with the residue of the consideration that consisted of valuable interests transferred to the company, will prevent a recovery of the price agreed to be paid for such prop- erty, and will enable the company to retain it without giving the equivalent agreed upon, a result certainly obtains that would be both wholly unconscionable and impolitic. According to the principle forming the basis of the decision in the Erie Railway case, just cited, that the presence in a contract of one of these inhibited undertakings does not in any degree whatever either add to or deprive it of its legal efficacy, standing alone it will not constitute a legal consideration, nor will it, to any extent, be executed. The later decisions upon the subject appear to regard this as the true principle. Mallan v. May, 11 Mees. & W. 653; WaUis V. Day, 2 Mees. & W. 273. The other points raised in the brief have been considered, but none of them, as it is deemed, are possessed of sufficient sub- stance to require judicial exposition. They were properly dis- posed of by the trial judge. Let the rule be discharged.' 1 In Pierce v. Pierce, 17 Ind. App. 107, it was held that where A sold B his stock and fixtures " including the license to sell" and by law the transfer of the license was illegal, A could recover the purchase price since B was bound to know that no benefit could accrue to him under the transfer of the license, and that therefore the license constituted no part of the consideration. LEGALITY OF OBJECT. 805 (p. 390) Intention of the parties in illegal contracts. (p. 395) ANHEUSEE-BUSCH BEEWING ASSOCIATION V. MASON. 44 MINNESOTA, 318. — 1890. Collins, J. This action was brought to recover a balance claimed to be due plaintiff (a corporation) for, and on account of, bottled beer sold to the defendant. The answer alleged that at the time of the sale defendant, as plaintiff well knew, was the keeper of a house of prostitution; that plaintiff sold the beer expressly for use and dispensation in and for carrying on and maintaining said house ; and that when sold and delivered it was agreed between plaintiff and defendant that the beei? was to be paid for out of the profits accruing to the latter from her unlaw- ful occupation. On the trial, defendant made no attempt to establish the defense as pleaded, but relied wholly upon admis- sions made by plaintiff's agent, when testifying, that he did not know just what was done with the beer, but that, when selling it to defendant, he supposed she would sell or use it in her brothel. On this admission, as we understand the record, the case was dismissed by the trial court. While it would seem quite unnecessary so to do, it may be well to call attention at the outset to the fact that this case should not be confounded with one wherein the vendor in selling his goods has violated a statute requiring him to first procure a license, as was that of Solomon v. Dreschler, 4 Minn. 197, (278). Nor is it one in which the vendor has sold a proper article of merchandise in a legitimate way, but with the knowledge that it is to be disposed of by the vendee in direct violation of the law; for illustration, a sale of spirituous liquors by a qualified wholesale dealer, with full knowledge that the purchaser intended to retail the same in defiance of a prohibitory law, or without first obtaining the required license to sell, or a sale of poison by a druggist, knowing that it was intended for use in committing murder. The illegality of the transaction now under discussion occurs, if at all, in a matter collateral to the sale, incidentally 806 FORMATION OF CONTRACT. implicated with it, and out of considerations of public policy solely. It has been well said that the consideration essential to a valid contract must not only be valuable, but it must be lawful, not repugnant to law or sound policy or good morals. Ex turpi con- tractu actio non oritur. The reports, both English and American, are replete with cases in which contracts of all descriptions have been held invalid on account of an illegality of consideration, illustrations of the acknowledged rule that contracts are unlawful and non-enforceable when founded on a consideration contra bonos mores, or against the principles of sound policy, or founded in fraud, or in contravention of positive provisions of a statute. The utmost difficulty has been experienced by the courts in apply- ing the general rule, however, and an examination of the authori- ties wherein an application has been necessary will convince the reader tliat the conclusions reached and announced in the English tribunals are beyond reasonable reconciliation. This want of harmony, and that more uniform and consistent results have obtained in this country, is thoroughly demonstrated in two cases with us {Tracy v. Tcdmage, — first opinion by Judge Selden, and the second, on motion for rehearing, by Judge Corn- stock,— 14 N. Y. 162, and Hill v. Spear, 50 N. H. 253), in each of which the principal cases in both countries are ably and carefully reviewed, and the law applicable to the question involved in this action stated in accordance with the great weight of authority in the United States as well as in England. These cases, now re- garded as leading on this side of the Atlantic, announce the rule to be that mere knowledge by a vendor of the unlawful intent of a vendee will not bar a recovery upon a contract of sale, yet, if, in any way, the former aids the latter in his unlawful design to violate a law, such participation will prevent him from main- taining an action to recover. The participation must be active to some extent. The vendor must do something in furtherance of the purchaser's design to transgress, but positive acts in aid of the unlawful purpose are sufficient, though slight. While it is cer- tain that a contract is void when it is illegal or immoral, it is equally as certain that it is not void simply because there is something immoral or illegal in its surroundings or connections. LEGALITY OF OBJECT. 807 It cannot be declared void merely because it tends to promote illegal or immoral purposes. The American text-writers generally admit this to be the prevailing rule of law in the States upon this point. 1 Whart. Cont. § 343; Hill. Sales, 490, 492; 1 Pars. Cont. 456; Story, Cont. (6th ed.) § 671; Story, Confl. Law, § 263; Greenh. Pub. Pol. 689. However, it has been suggested that this statement is subject to the modification that the unlawfiil use, of which the vendor is advised, must not be a felony or crime in- volving great moral turpitude. See Hanauer v. Doane, 12 Wall. 342 ; Tatum v. Kelley, 25 Ark. 209 ; Milner v. Patton, 49 Ala. 423 ; Lewis V. Latham, 74 E". C. 283 ; Bickel v. Sheets, 24 Ind. 1 ; Steele V. Curie, 4 Dana, 381. Without expressly indorsing the result in some of the cases, or all that has been said by the courts in their opinions when mak- ing an application to the facts then in hand, of the rule so exhaus- tively examined and approved in Tracy v. Talmage, and Hill v. Spear, supra, we cite, in support of the propositions therein con- tended for, and upon which we rest a reversal of the order of dismissal made by the court below, Armstrong v. Toler, 11 Wheat. 268; Green v. Collins, 3 Cliff. 494; Dater v. Harl, 3 Gray, 482; ArmfieU v. Tate, 7 Ired. 268; Bead v. Taft, 3 E. I. 176; Cheney V. Duke, 10 Gill & J. 11 ; Kreiss v. Seligman, 8 Barb. 439 ; Michael V. Bacon, 49 Mo. 474; Brunswick v. Valleau, 60 Iowa, 120; Webber v. Donnelly, 33 Mich. 469; Bishop v. Honey, 34 Tex. 246; Wright v. Hughes, 119 Ind. 324, 21 N. E. Kep. 907; Feineman v. Sachs, 33 Kan. 621, 7 Pac. Eep. 222; Bose v. Mitchell, 6 Colo. 102; Banchor v. Mansel, 47 Me. 68; Henderson v. Waggoner, 2 Lea, 133; Gaylord v. Soragen, 32 Vt. 110; Mahood v. Tealza, 26 La. Ann. 108; Delavina v. Hill, (N. H.) 19 Atl. Eep. 1000. The agent who made the sales, upon whose testimony the de- fendant saw fit to rest her case, knew that she was engaged in the unlawful business of keeping a house of ill fame, and admits also that he supposed the beer would be used or sold in her place of business. Nothing further was shown which connected the plaintiff or its agent with any violation of the law. The burden was upon the defendant to show that an enforcement of the con- tract would be in violation of the settled policy of the State, or injurious to the morals of its people, and no court should declare 808 FORMATION OF CONTRACT. a contract illegal on doubtful or uncertain grounds. And it may- be difficult to distinguish between the cases in which the vendor, with knowledge of the vendee's unlawful purpose, does not become a confederate, and those wherein he aids and assists to an extent sufficient to vitiate the sale ; but this difficulty is not apparent in the case at bar. Order reversed.^ (p. 390) Intention of the parties in illegal contracts. (p. 39S) BEYSON V. HALEY. 68 NEW HAMPSHIRE, 337. — 1895. Assumpsit, for labor and materials. Facts found by the court. The plaintiff, a painter, furnished to the defendant, at his re- quest, labor and materials in painting and decorating a bar and the room containing it. The plaintiff knew that it was the pur- pose of the defendant to use the room and bar in illegally selling intoxicating liquors ; and after their completion they were so used. The plaintiff took no part in their illegal use. It was held that the defendant was liable, to which ruling he excepted. Blodgett, J. The plaintiff is not precluded from a recovery of the value of his labor and materials upon the bar and the room containing it by his knowledge that the defendant intended to use them for an unlawful purpose. The case is not distinguish- able in principle from Delavina v. Hill, 65 N. H. 94. See, in addition, Tracy v. Talmage, 14 N. Y. 162, 67 Am. Dec. 132, and note ; Tyler v. Carlisle, 79 Me. 210, 1 Am. St. Rep. 301, and note ; Michael v. Bacon, 49 Mo. 474, 8 Am. Rep. 138, and note ; Webber V. Donnelly, 33 Mich. 469 ; Hubbard v. Moore, 24 La. Ann. 691, 13 Am. Eep. 128 ; Mahood v. Tealza, 26 La. Ann. 108, 21 Am. Eep. 546. Exception overruled. Chase, J., did not sit. The others concurred. ■■ But if the seller intends to aid and abet the immoral purpose, he cannot recover the purchase price of the goods. Seed v. Brewer, 90 Tex. 144. LIMITS OP CONTRACTUAL OBLIGATION. 809 « (P. 420) Promise for benefit of tJdrd party. (p. 437) BUCHANAN V. TILDEN. 158 NEW YORK, 109.— 1899. Appeal from an order of tlie Appellate Division of the Supreme Court reversing a judgment (5 App. Div. 354) in favor of plain- tiff for $54,421.18, entered upon a verdict directed by tlie court, and ordering a new trial. Action by Adelaide E. T. Buchanan against George H. Tilden to recover the sum of f 50,000 upon a contract made by defend- ant with her husband for her benefit. Baetlett, J. At the close of plaintiff's case both parties moved for a directed verdict, and neither asked to go to the jury on any question. The trial judge thereupon directed a ver- dict for the plaintiff. The Appellate Division, with a divided court, reversed the judgment in plaintiff's favor entered upon the verdict, and ordered a new trial. The plaintiff has appealed from that order, stipulating for judgment absolute in case of af&rmance, and presents for our determination a single question of law arising upon undisputed facts. Before stating that ques- tion, reference will be made to the material facts : The plaintiff is the adopted daughter of Moses Y. Tilden, a brother of the late Samuel J. Tilden. The defendant is an heir at law and next of kin of Samuel J. Tilden. On the 20th day of October, 1886, the defendant began an action against the exec- utors of the estate of Samuel J. Tilden and others, praying judg- ment that the thirty-fifth article of Mr. Tilden's will be adjudged void, and that the property therein mentioned be declared undis- posed of by any provision thereof. The defendant being without means to prosecute this action, applied to Eobert'D. Buchanan, the husband of the plaintiff, for assistance in raising the funds necessary to carry on the litigation. Buchanan expressed his willingness to aid defendant, if certain arrangements were made, and said that his uncle, Robert G. Dun, might be willing to advance the money required. The defendant expressed himself as willing " to do anything in the world to raise the money, — to make any arrangement that was reasonable," — and said to 810 OPERATION OF CONTRACT. Buchanan that, if the contest was successful, Mrs. Buchanan "should come in, share alike, with the rest of them." It was evidently within the contemplation of the parties that, if this action of the defendant was successful, the result would be that, as to a very large part of his estate, Mr. Tilden died intestate, and that, while the plaintiff, as an adopted child of Moses Y. Tilden, and not of Samuel J. Tilden's blood, might take no part thereof, yet there were the strongest moral and family reasons why she should be regarded as an heir at law and next of kin. Buchanan induced Dun to make certain necessary advances, to the extent of $5000, and Dun consented to do so solely on the ground that plaintiff was to share the fruits of a successful con- test, he being unacquainted with the defendant. This portion of the money was advanced by Dun about the time defendant began his action, and he was then presented to Dun, and repeated to him the promise, in regard to plaintiff sharing alike with the rest of the heirs, that he had made to her husband. In February, 1887, the defendant asked Buchanan if he could raise more money. Buchanan testified that, in response to this application, " I told him that I thought, before any more money was talked about, that the arrangement that had been talked about had better be whipped into line, . . . and he said they were all pefectly willing to share and share alike in that matter. I said, ' That does not satisfy me ; that is not what I want ; I want some positive agreement.' After considerable further talk, he said that his brothers and sisters were scattered; that he could not get it into shape just then, but that he had to have some more money, and had to have it right away, and, in order to get the money, and have it right away, he, on his own personal behalf, having nothing to do with his brothers or sisters in any sense, would obligate himself to pay personally fifty thousand dollars." Thereupon defendant and Buchanan went to the office of counsel, where the following letter was drawn up, signed by defendant, and delivered by Buchanan to Dun : New York, February 19, 1887. Robert G. Dun, Esq., No. 314 B'way, N. Y. City, My dear Sir: It is understood between Mr. R. D. Buchanan and myself that, in the event of the success of the proceedings now pending, LIMITS OF CONTRACTUAL OBLIGATION. 811 or any which may be taken, to practically set aside the thirty-fifth sec- tion of the will of my late uncle, Samuel J. Tilden, in view of the assistance, looking to that end, which has been and may be rendered by Mr. Buchanan, as well as by yourself, that I will, and hereby do, become responsible for the payment to Mrs. Adelaide E. Buchanan, or her order, of the sum of fifty thousand dollars. It is further understood between us that, while I am not strictly authorized to speak in behalf of my brothers and sisters in that respect, that from what has already transpired between me and them, in the event of such success, they wUl be disposed to act generously with Mrs. Buchanan in the premises. Yours very resp'y, George H. Tilden. It will be observed that this letter, while charging defend- ant in a fixed sum, leaves open the general adjustment between plaintiff and defendant's brothers and sisters. After receiving this written declaration of the defendant. Dun continued his advances, until they aggregated over $20,000. A long contest followed in the courts. Defendant succeeded in his action, and he and others became entitled to a very large sum of money that the late Samuel J. Tilden supposed he had dedicated to public uses under the thirty-fifth article of his will. Dun testified that the defendant had repaid his advances ; that they were collected through his attorney, but he thought an action was brought against him. Defendant paid plaintiff f8160, on account of the $60,000, under the letter of February 19, 1887. As nothing more was paid, and plaintiff received no recognition from the heirs at law and next of kin of Mr. Tilden, she brought this action to recover the balance of the $50,000 and interest. One of the learned judges of the Appellate Division thus states the question of law presented in this case : " Can a wife enforce payment in her own name, where the husband renders valuable services, and stipulates with the person to whom the same are rendered that compensation therefor shall be made, not to him, but to her ? " In answering this question in the negative, the main positions of the court below may be briefly stated. While admitting that there is a distinct class of cases where promises have been made to a father, or other near relative, for the benefit of a child, or other dependent relative, in which the person for whose benefit the promise was made has been permitted to main- 812 OPERATION OF CONTRACT. tain an action for the breach of it, and further 'admitting, for argument's sake, that the duty and obligation of the husband to the wife is, as a consideration, quite equal to the duty and obli- gation of the father to the child, yet the fact still remains, in the case at bar, that this is not a contract looking towards the dis- charge of the obligation which the husband owed to support the wife, and must, therefore, be supported, if at all, upon the mere relation of husband and wife. The learned court then states that it has found no authority for holding that a promise made to the husband by a third person for the benefit of^his wife, which was not intended to provide for her support, or to discharge the husband's duty in that regard, could be enforced by the wife. It is also intimated that there is no disposition to extend the principle of some of the cases relating to father and child to any other relationship. As to this latter suggestion, we do not think it will be seriously questioned, on principle, that the relation of husband and wife is fully equal to that of parent and child as a consideration to support a promise. Before discussing this appeal in the light of the authorities, we have to say that, in our judgment, the learned Appellate Division have failed to give due weight to certain controlling features of this case. In the first place, the question formulated by the court below does not contain what we regard as one of the most important points disclosed by the evidence, to wit, the large equi- table interest the plaintiff had in this scheme to attack the will, under the provisions of the agreement made to raise funds for that purpose. This is not the case, simply, of a husband rendering valuable services to a third party upon the latter's promise to pay the compensation, not to him, but to his wife. While this case embraces that feature, it involves the further element of the wife's joint interest in the scheme to attack the will. It may fairly be inferred, from this record, that the defendant was powerless to conduct the action he had begun unless some one furnished him the funds. This assistance was rendered by Buchanan and Dun, upon the express agreement and understanding that the plain- tiff should receive, in case of success, f 50,000 from defendant as part of her share of the estate, and generous treatment from his brothers and sisters. Plaintiff, in equity and good conscience, LIMITS OF CONTRACTUAL OBLIGATION. 813 as an adopted child of Moses Y. Tilden, was entitled to come in and share with the other heirs and next of kin the large fund that had been freed from the provisions of the will. When this equitable right or interest is coupled with the relation of husband and wife, we have presented a silAiation that affords ample con- sideration for the contract sued upon, — a situation that distin- guishes this action from any of the cases where the party suing upon a promise rests exclusively upon a debt or duty owed him by the promisee. Another general feature of this case, to which we think the court below has failed to give due prominence, is the extent of the legal and moral obligation resting upon a husband to support and provide for his wife. A brief quotation from one of the opinions below will make this point clear : The court says : " It is quite true that the husband is under an obligation to support the wife, and it may be that any contract which he makes with a third party, having for its object the carrying out of the obli- gation, would be enforced in the courts." Then, coming to the case at bar, the court continues : " There is no obligation, legal or equitable, here, on the part of the husband towards the wife, to entitle her to the performance of this contract. This was not a contract for her support, nor was it one to do anything which, under any circumstances, the husband could be compelled to do. It was simply an obligation on the part of the defendant to pay the plaintiff a sum of money, as an independent fortune for her separate estate, in case the husband rendered some service ta him. So far as the plaintiff and her husband were concerned, as to this contract, there were no legal relations between them. They occupied no different relations from that of any other man and woman," etc. It seems to us that this is an entire miscon- ception of the duties and relations existing between man and wife. It is, in effect, said that it is only the duty of bare main- tenance that is a consideration sufiftcient to support the promise of a third party. We are of opinion that a husband rests under other, and far higher, moral and legal obligations that the law will recognize as a sufficient consideration to support a covenant in favor of the wife. There is no evidence in this case to bear out the statement that this was not a contract for the wife's 814 OPERATION OF CONTRACT. support ; but, assuming that she had food, raiment, and shelter, — the necessaries of life, — can it be said that these represent the full measure of the moral and legal obligations imposed upon a husband by the common law ? Is it not his bounden duty, if opportunity offers, to provide for his wife against that day when he may be incapacitated by disease or removed by death ? If, as in the case at bar, the husband seeks to provide for his wife, beyond the duty of furnishing food and shelter, by securing a fund to which she is equitably entitled, that may perpetuate his protecting care after he has departed this life, shall it be said that this is not an obligation that a court can recognize as a sufficient consideration to support a covenant on her behalf? We are of opinion that this broader view of the duties and obligations of a husband is to be invoked in determining the rights of this plaintiff. We come, then, to a consideration of this case in the light of precedent. The court below recognized the strong equities of the plaintiff's case, and expressed regret that the action is not sustainable in her behalf. Our full discussion of the facts and the position of the court below discloses, we think, a very strong case in favor of the plaintiff maintaining this action. While it is true that for more than two hundred years the courts of England and this country have been discussing the vexed question of when a party may sue upon a promise made for his benefit to a third party, yet we are of opinion that, under the peculiar facts of this case, the plaintiff can recover by in- volving legal principles that are well established by authority. In order to maintain the plaintiff's cause of action, it is not necessary to invoke the principle established by Lawrence v. Fox (20 N. Y. 268), and the cases that have followed it in this State, to the effect that an action lies on a promise made by the defend- ant upon valid consideration to a third person for the benefit of the plaintiff, although the latter was not privy to it. It will be recalled in that case one Holly loaned the defendant, Fox, money, stating at the time that he owed the amount to the plain- tiff, Lawrence, for money borrowed, which he had agreed to pay the then next day. The defendant, in consideration of the loan to him, agreed to pay plaintiff the then next day. This court, in LIMITS OF CONTRACTUAL OBLIGATION. 815 holding that the plaintiff, Lawrence, could enforce that promise in an action of law, established a legal principle that the courts of England have never recognized. The plaintiff in the case at bar, if driven to it, might doubtless derive aid and comfort from the doctrine laid down in Lawrence v. Fox by parity of reason- ing ; but we think her case rests upon very different principles. The first case to be considered is Dutton v. Poole (1 Vent. 318, 332), decided in England in the reign of Charles II. The plain- tiff declared in assumpsit that his wife's father, being seised of certain lands now descended to the defendant, and being about to cut £1000 worth of timber to raise a portion for his daughter, the defendant promised to the father, in consideration that he would forbear to fell the timber, that he would pay the daughter £1000. After verdict for the plaintiff on non assumpsit, it was moved in arrest of judgment that the father ought to have brought the action, and not the husband and wife. The court said : " It might have been another case if the money had been to have been paid to a stranger ; but there is such a nearness of relation between the father and the child, and 'tis a kind of debt to the child to be provided for, that the plaintiff is plainly con- cerned." The judgment was a£6.rmed in the exchequer. 2 Lev. 212, T. Kaym. 303. In one of the opinions of the Appellate Division in the case at bar, it is stated that Dutton v. Poole has been repudiated by the English courts in Tweddle v. Atkins, 101 Eng. C. L. E. 393. A care- ful examination of this latter case shows that Justice Blackburn, while attacking Dutton v. Poole, says : " We cannot overrule a decision of the exchequer chamber." Lord Mansfield said of Dutton V. Poole, one hundred years later, that it was difficult to conceive how a doubt could have been entertained about the case. Martyn v. Hind, Cowp. 443 ; Doug. 142. It has also been repeatedly followed in this State. The learned counsel for the defendant, in an able and compre- hensive brief, complains that Dutton v. Poole has, on several occasions, been cited to sustain the broad doctrine that a stranger to the consideration and to the promise may maintain an action on a contract. He points out that such an alleged erroneous citation appears in Schemerhorn v. Vanderheyden (1 Johns. 139), 816 OPERATION OF CONTRACT. and that it has led to confusion in subsequent cases. We are not concerned at this time whether this is a just criticism or not, as there can be no doubt that Button v. Poole rests upon the near- ness of the relation between father and child, and to this extent is undoubted authority. In Shepard v. Shepard (7 Johns. Ch. 67), Button v. Poole is approved and followed, and Chancellor Kent also recognizes the principle, contended for in this case, that the consideration of natural affection, and to make sure the maintenance of a wife in case she survived her husband, is "very meritorious." There were two principal points decided by Chancellor Kent in this case ; the first being that, although a deed from a husband directly to his wife is void in law, yet, where the conveyance of the hus- band is for the purpose of making a suitable provision for the wife " in case she should survive him," equity will lend its aid to enforce its provisions. The second point held that, where a hus- band conveyed land to his son, for a nominal sum, on his cove- nanting to pay an annuity to his mother during het widowhood, that the wife could sue on this covenant so made for her benefit, and that an attempted release of the son from the covenant by the husband, in his lifetime, was fraudulent and void. The learned chancellor said : " But, if the deed of 1808 was out of the ques- tion, I should then have no difiB.culty in declaring that the defend- ant was bound to pay her the stipulated annuity, or the gross sum of $400, in lieu of it, on her releasing," etc. " The relationship between husband and wife was sufficient to entitle the plaintiff to her action upon the covenant to her husband, and which was made for her benefit. The consideration inured from the hus- band and arose from the obligations of that relation," etc. The chancellor then comments approvingly and at length upon Button V. Poole, points out the subsequent commendation of it by Lord Mansfield, and concludes by saying : " The same doctrine appears in the more early case of Starkey v. Mill (Style, 296), and it has had the sanction, also, of Mr. Justice Buller in Marchington v. Vernon (1 Bos. & P. 101), in notis, but it is quite unnecessary to dwell longer on this second point." While the chancellor allowed relief to the plaintiff by enforcing her deed in equity, yet he distinctly held that she had the additional remedy of an action LIMITS OF CONTRACTUAL OBLIGATION. 817 on the covenant between her husband and the son, if there were no deed, by reason of the relations and obligations of husband and wife, resting his decision squarely on the case of Button v. Poole. With this case approved by Lord Mansfield, Justice Buller, and Chancellor Kent, and followed in this State, it is i\ot of controll- ing importance that the doctrine of this and other early cases is said to be questioned in England at the present day. In a juris- diction where the doctrine of Lawrence v. Fox is the settled law, there is no difficulty in sustaining, both in law and equity, the kindred principle announced in Button v. Poole. It is quite impossible to follow the learned counsel on both sides of this case in the exceedingly interesting and exhaustive discussion of the questions involved, as the limits of an ordinary opinion forbid it. We shall content ourselves with the citation of but one more case. In Todd v. Weber (95 N. Y. 181) this court held that the relation of parent and child, even between a father and his illegitimate daughter, was a sufficient consideration for a contract made by him with the relatives of his unfortunate child to pay for her support and maintenance, and that she could enforce it by action. The learned judge writing for the court in that case, in an opinion that does honor to his heart as well as his intellect, quotes with approval Button v. Poole. We see no valid distinction, in principle, between the relation of parent and child and husband and wife, as affording an ample consideration for covenants inuring to the benefit of the child or wife. The relation of husband and wife has been twice recognized in this State, in cases just cited, as a sufficient consideration for sup- porting a covenant in the wife's favor, and amply sustains the plaintiff's cause of action in the case at bar. This court has recently held that, while the common-law rule that husband and wife are one has been to some extent abrogated by special legis- lation, yet there are situations where that unity still exists. Wetmore v. Wetmore, 149 N. Y. 520, 529 ; Bertles v. JSFiman, 92 N. Y. 162. The case before us illustrates a situation where that unity survives for the purpose of aiding the wife to enforce a covenant for her benefit made by her husband, and which equity and good conscience approve. 818 OPERATION OF CONTRACT. The Appellate Division refer to Durnherr v. Bau (135 N. Y. 219), as " a case, ■while not directly in point, is, in its controlling principles, adverse to the plaintiff's right to maintain this action." We think that case has no application to the one before us. The husband of plaintiff conveyed to the defendant certain premises, the latter covenanting to pay all incumbrances on the premises " by mortgage or otherwise." The deed declared that the wife (the plaintiff) reserved her right of dower. By the foreclosure of mortgages on the premises, existing at the time of the conveyance and in which the wife joined, her dower interest was extinguished. The wife sued on the defendant's covenant in the deed to pay all incumbrances, and sought to recover the value of her dower interest cut off by the foreclosure. This court held that the covenant was with the husband alone, as the wife was not bound to pay the mortgages, and that the joinder of the wife in the mortgages was a voluntary surrender of her right of dower for the benefit of the husband, and bound her interest to the extent necessary to protect the securities. It is perfectly clear, under this state of facts, that the husband rested under no duty to protect the wife's dower interest. There was no legal or equitable obligation which the wife could lay hold of to enable her to sue on the covenant. The court points out that it is not sufficient that the performance of a covenant may benefit a third person, but it must have been entered into for his benefit. The case at bar is decided upon its peculiar facts. We do not hold that the mere relation of husband and wife alone constituted a sufficient consideration to enable the plaintiff to maintain this action. We deem it unnecessary to decide that question at this time. What we do hold is that the equities of the plaintiff were such that, when considered in connection with the duty of her husband to provide for her future, and, with that purpose in view, the money was procured for the defendant to institute and pursue the necessary litigation to secure the fund to which her equities related, they, all taken together, were sufficient to sustain the plaintiff's action. The order of the Appellate Division granting a new trial, and the judgment entered thereon, should be reversed, and the origi- nal judgment in favor of the plaintiff and against the defendant aflrmed, with costs in all the courts. LIMITS OF CONTRACTUAL OBLIGATION. 819 Gray, J. (dissenting). I think that the order appealed from should be afiB.rined, and that any other doctrine than that laid down by the Appellate Division would be without support in principle or in the cases. The defendant needed money in order to prosecute an action to set aside certain provisions of the will of Samuel J. Tilden, deceased. He applied to the plaintiff's husband for that purpose, and the latter procured Dun to advance the money. The agreement between the defendant and the platn- tifi's husband was that, in the event of the success of the action, in view of the assistance rendered by the latter as well as by Dun, the defendant would become responsible for the payment to the plaintiff of the sum of $50,000. The action was successful, and the defendant repaid the money loaned. In addition, he gave to the plaintiff a sum of f 8500 ; but she has brought this action to compel the payment by the defendant of the whole sum mentioned in the agreement. The question is whether the plaintiff had a cause of action upon the contract. It seems to me that this case is not brought within that class of cases wherein a third person is entitled to enforce a promise which has been made by one person to another, because of the absence of the essential element that some liability or duty must exist from the promisee to such third person in connection therewith. As it was held in Dumherr v. Bau (135 N. Y. 219), the rule is that, to permit a third party to enforce such a promise, the promisee must have a legal interest that the covenant be performed in. favor of the party claiming perform- ance. How was that the case here ? Could it be because of the general obligation on the part of the plaintiff's husband to support and maintain her ? That, of course, is a well-recognized obligation in the law ; but did the contract in question have *^ that for its object ? I cannot so regard it. It related solely to the payment of a large sum of money contingently upon the suc- cess of a certain litigation, of which the defendant was the pro- moter, and promised a reward or compensation to the party with whom made for his aid in furnishing the needed moneys. Jtt is perfectly clear that this contract was not based upon marital obli- gations, but that it was simply a mode, suggested by the husband and adopted by both parties, for the payment by the defendant 820 OPERATION OF CONTRACT. of the consideration for his (the plaintiff's husband's) services in the matter. It does not appear that the plaintiff's cause of action has any other basis than the mere fact of the marital relation. While that relation imposes strong legal and moral obligations upon the husband, it is dif&cult to see that they involve a liability on his part to provide a separate estate for his wife; and yet, if there is not that liability, what liability was there towards the plaintiff, which furnished the element required to exist in order that the third person, the plaintiff here, might claim the right to enforce the promise ? It is not necessary that the wife should be privy to the consideration of the promise ; but it is necessary that the promisee, her husband, should owe some debt or duty to her, in connection with the promise, to enable her to sue upon it. I think that the insuperable legal objection to the plaintiff's cause of action is that the contract in question was not one which looked towards the discharge of any obligation owing by him to her, and, therefore, is not enforceable, upon the doctrine which underlies the cases where, as in the relation of parent and child, the promisee owed a duty which the contract was supposed to meet. I am prepared to admit, as it is argued, that we should recognize the obligation of the husband to support the wife to be as meritorious as the obligation of the parent to support the child, and, if this contract could be regarded in that light, I might be prepared to extend to the present case the principle of the cases referred to. But, as previously suggested, the relation- ship between the parties here does not help us out in endeavoring to find support for the plaintiff's cause of action, for the reason that the contract which is sought to be enforced does not bear upon the husband's obligation, and is not connected with it, but simply provides for the payment of a sum of money as a compen- sation for his services in the event of success. In view of the more elaborate discussion in the opinion- below, I think nothing more need be said, and that the order should be affirmed. Haight, Martin, and Vann, JJ., concur with Baktlett, J., for reversal, Parkek, C. J., and O'Brien, J., concur with Gray, J., for affirmance. ' Order reversed, etc. LIMITS OF CONTEACTUAL OBLIGATION. 821 (p. 420) Pj-omise for benefit of third party. (p. 437) SULLIVAN V. SULLIVAN". 161 NEW YORK, 554. —1900. Action by Patrick E. Sullivan, as administrator, etc., against Catherine Sullivan. From a judgment of the Appellate Division (39 App. Div. 99) affirming a judgment for the plaintifE, defend- ant appeals. Weener, J. On the 10th day of October, 1892, the plaintiff's intestate, Catherine Sullivan, deposited with the Chemung Canal Bank the sum of $2000 and received therefor a certificate of deposit in the following form : "$2000. Elmika, N. Y., Oct. 10th, 1892. " Catherine Sullivan has deposited in this bank two thousand dollars, payable one day after date to the order of herself, or, in the case of her death, to her niece, Catherine Sullivan, of XJtica, upon the return of this certificate, with interest at 3 per cent, per annum, if held six months. Not subject to check. "No. 26,638. J. H. ARNOT, V. P." She retained possession of said certificate until her death, which occurred on the 8th day of February, 1893, and after her death it was found among her papers. This action was originally brought against the individuals who composed the firm known as the Chemung Canal Bank, and was upon their application continued against the present defendant, who claims to be entitled to the moneys represented by said certificate. Upon the trial, oral evidence was adduced to show, and the court found, that it was the intention of the plaintiff's intestate to have the said certificate of deposit so drawn that in case of her death, without having withdrawn the deposit, it could be drawn by the defendant. The trial court also found that " no attempt was made by the plaintiff's intestate to create a trust to exist during the life of the said intestate. Until her death, the bank was her debtor." Defendant's father, whose real name was Brown, was a nephew of the plaintiff's intestate, and lived with her for thirty-six years, taking the name of Sullivan, and being regarded and treated as an adopted son, although no legal adop- 822 OPERATION OF CONTKACT. tion was ever consummated. The defendant was born in the house of plaintiff's intestate, in Elmira, and lived there for four or five years after her birth, at the end of which period she removed with her parents to the city of Utica. Plaintiff's intestate, who was childless, exhibited and expressed on all occasions great fond- ness for the defendant, and at the time of said deposit stated to the teller of said bank that " she wanted it fixed to herself, or, in case of her death, to her niece, Catherine Sullivan, of Utica." In asserting her claim to this fund, the defendant invokes several distinct principles of law, the first of which is that the deposit of this money and the issuance of this certificate consti- tuted a valid contract between plaintiff's intestate and the bank for the benefit of the defendant. Buchanan v. Tilden, 168 N. Y. 109 ; Button v. Pool, 1 Vent. 318, and Todd v. Weber, 95 JST. Y. 181, are cited in support of this contention. As I read these cases, they have no application to the case at bar ; for in each of them there was a valid contract, founded upon a suf&cient consideration, for the benefit of a third person, which the latter could enforce. Here there was no contract to which the defend- ant was a privy, nor can it be said that the relations of the plaintiff's intestate and the defendant were such as to furnish any consideration for such a contract, if one had existed. (The court then holds that the transaction did not create a trust.) Judgment af&rmed.^ (P. 420) Promise for benefit of third party. (p. 437) WHITEHEAD v. BUEGESS. 61 NEW JERSEY LAW, 75. — 1897. . Action by Edward Whitehead against William W. Burgess on a contract. Heard on demurrer to declaration. Demurrer overruled. Van Syckbl, J. The first count of the declaration sets out that the defendant, being the owner of a stallion known as " Lynne Bel," published a certain circular, in which he offered the services 1 See Edson v. Parsons, 155 N. Y. 555, 571; Lawrence v. Oglesby, 178 lU. 122. LIMITS OF CONTRACTUAL OBLIGATION. ^23 of the said stallion for the sum of $100, and therein promised to pay the owner of the first one of the foals of said stallion that should trot a mile in 2 minutes and 30 seconds, or less, the sum of $760. The declarations further sets out that one Pursell, being the owner of a mare called " Eva," bred the said mare to said stal- lion, and paid the said defendant the sum of $100 for the privilege of so doing ; that the said defendant, in consideration of such pay- ment, promised the said Pursell to pay the owner of the foal of the said mare the sum of $750 if such foal should prove to be the first one of the get of said stallion that should trot a mile in 2 minutes and 30 seconds ; that the plaintiff, having knowledge of the said promise made to said Pursell, did purchase the foal of the said mare " Eva " by the said stallion, and while the said foal was owned by the plaintiff the said foal trotted a mile in less than 2 minutes and 30 seconds, and was the first one of the get of said stallion to make the said time. The second count is substan- tially like the first count, except that it avers that at the time the service money was paid the defendant repeated to said Pursell the promise and undertaking in said circular set' forth. A sepa/- rate demurrer is filed to each count of the declaration. . . . A further reason to support the demurrer is that the promise as alleged was made to Pursell, and that there is no privity of con- tract between the plaintiff and defendant.^ The law of this State is that an action may be maintained on a promise made by the de- fendant to a third person for the benefit of the plaintiff without any consideration moving from the plaintiff to the defendant. Joslin V. Car-Spring Co., 36 N. J. Law, 141. The fact that the person to whose benefit the promise may inure is uncertain at the time it is made, and that it cannot be known until the hap- pening of a contingency, cannot deprive the person who after- wards establishes his claim to be the beneficiary of the promise of the right to recover upon it. In the familiar case of a promise to give a reward for the arrest and conviction of a criminal, the right of the person who secures such conviction to recover the reward is well settled. Sergeant v. Stryker, 16 N. J. Law, 465 ; Furman v. Parke, 21 N. J. Law, 310. Demurrer overruled. 1 Only so much of the opinion is given as relates to this point. — Ed. 824 OPERATION OF CONTRACT. (P. 420) Promise for benefit of third party. (p. 437) ECONOMY BUILDING & LOAN ASS'N v. WEST JERSEY TITLE & GUARAJSTTEE CO. 44 ATLANTIC EEP. (N. J.), 854.— 1899. This action is upon contract. Its purpose is a recovery of damages alleged to have been suffered by plaintiff because it made a loan on the security of a mortgage on real estate upon the faith of a certificate of defendant that it was free from prior incum- brances, which certificate was untrue, there being in fact a prior recorded incumbrance, the foreclosure of which caused the loss of plaintiff's loan. Plaintiff has set out his cause of action in two special counts, and defendant has demurred to each. Overruled. Mageb, C. J. It is not claimed that there has been imposed by law upon defendant a duty in respect to the transaction with plaintiff for the breach of which an action would lie under the authority of Appleby v. State, 46 N. J. Law, 161. In the opinion of Mr. Justice Depue in that case it was suggested whether the liability of a county clerk for untrue statements in a certificate of search of title would arise out of his official position, or rather out of his employment to make the search, in which case his liability would extend only in favor of the person employing him, and with whom he was in privity by the contract of employment. The defendant has no official character, but from the statements of the declaration we must assume that it has corporate capacity to do the acts which it is charged with doing, viz. examining the title of real estate, and certifying to incumbrances thereon. If possessed of such capacity, there can be no doubt that, upon being employed to examine and certify, it undertook a duty in favor of the employer for the breach of which it would become liable to him. The question presented by the demurrers is whether these counts sufficiently disclose a duty owed by defendant to plaintiff, and a breach of such duty. It will be convenient to first consider the second count. Omitting extraneous and unnecessary matters, that count may be thus paraphrased : It charges that one Moore desired to procure a loan of $3000, and applied to plaintiff there- LIMITS OF CONTRACTUAL OBLIGATION. 825 for; that plaintiff agreed to make the loan on condition that Moore should secure it by a mortgage on certain land, which mortgage should be certified by defendant to be a first lien on said lands ; that Moore applied to defendant, and made kno\ra to it his agree- ment with plaintiff ; that he requested defendant to make the re- quired search and certificate, which it agreed to do ; that it agreed to make and deliver such search and certificate to Moore, to be by him delivered to plaintiff, and used for the purpose of obtaining said loan ; that it made the certificate, a copy of which was an- nexed to and made part of the declaration, and delivered it to Moore, who paid defendant therefor, and then delivered it to plaintiff, who thereupon made the loan on the faith of the cer- tificate. The certificate avers that the mortgaged lands were not incumbered by any previous mortgage. The count proceeds to aver that the certificate was carelessly made, and was un- true, because the lands were in fact subject to a prior recorded mortgage, which has since been foreclosed, to the injury of plain- tiff. The sole contention of the demurrant is that the count discloses no privity between it and plaintiff, but only a contract between it and Moore. But this is too narrow a view of the transaction set out in this count. Upon its averments there is disclosed either a contract between plaintiff and defendant, made through the agency of Moore, by which defendant was employed to examine and certify the title, or a contract of like employment between Moore and defendant, made for the benefit of plaintiff, upon which a right of action by plaintiff would arise. Joslin v. Spring Co., 36 N. J. Law, 141 ; Whitehead r. Burgess, 61 N. J. Law, 75. It is unnecessary to determine in which aspect the facts averred place the plaintiff's right of action. Either will support this count. In either aspect the contract disclosed a contract which included an undertaking to use care in discovering and certifying to previous recorded incumbrances. The averment that defendant carelessly omitted to certify to a previous incumbrance appearing in the public records establishes a complete right of action on the contract. This demurrer must be overruled. The question whether the first count demurred to exhibits a good cause of action in favor of plaintiff is of more difSculty. 826 OPERATION OF CONTRACT. The court is equally divided m its views upon that question. It results that the demurrer to that count must also be over- ruled.^ (P. 420) Promise for benefit of third party. (p. 437) ADAMS V. UNION E. CO. 42 ATLANTIC EEP. (R. I.), 515.— 1899. Action by Everett W. Adams against the Union Eailroad Company. Judgment for plaintiff. Stiness, J. Pub. Laws 1891, c. 975 (Act May 29, 1891), gave authority to towns to " pass ordinances or make contracts " grant- ing franchises to corporations for operating street railways, etc. October 15, 1892, the town of East Providence made such a con- tract with the defendant, in which it was agreed that, " during the continuance of said exclusive franchise, the fare from one point to any other point on the lines of said party of the second part in said town shall not exceed five cents." In the agreed statement of facts it appears that a line was constructed which ran from Eumford to Eiverside, which was discontinued before this alleged cause of action accrued, but that both Eiverside and Eumford were still upon its lines by connect- 1 In Ward v. Savings Bank, 100 U. S. 195, it is held (three justices dis- senting) that an attorney employed by A to examine and report upon A's title to certain premises, and who gives a certificate that A's title ' ' is good and unincumbered," is not liable to B, who lends money on the strength of this certificate, taking the premises as security, and afterwards discovers that there was, at the time the certificate was given, a prior duly recorded conveyance of the premises by A. This case is followed in Day v. Beynolds, 23 Hun (N. Y.), 131 ; Mechanics Bldg. Ass''n v. Whitacre, 92 Ind. 547 ; Mallory v. Ferguson, 50 Kans. 685 ; Zweigardt v. Birdseye, 57 Mo. App. 462 ; Tapley V. Wright, 61 Ark. 275; Contra, Dickie v. Abstract Co., 89 Tenn. 431; Gate City Abstract Co. v. Post, 55 Neb. 742. If it is shown that the abstractor or attorney is acting for the plaintiff, although he is engaged and paid by another person, a duty is undertaken toward plaintiff for the breach of which an action will lie. Lawall v. Oroman, 180 Pa. St. 532 ; Brown v. Sims, 22 Ind. App. 317. In Buckley v. Gray, 110 Cal. 339, it is held that an attorney employed by a testator is not liable to a legatee for negligently having thclegatee witness the will, thus rendering the will ineffective as to him. LIMITS OF CONTRACTUAL OBLIGATION. 827 ing roads. October 23, 1896, the plaintiff boarded the Warren avenue car, paid his fare, stating to the conductor that he wanted to go to Rumford; and, at the nearest point of connection, he demanded a receipt showing that he had paid his fare, or a trans- fer to Rumford, which the conductor refused to give. He then boarded the first car going to Eumford, by the only route he could take, stated to the conductor that he had paid his fare on the other car, that he desired to go to Eumford, and that he had asked for a transfer or other evidence that he had paid his fare, which had been refused. The conductor insisted upon his paying his fare on that line, and, upon the plaintiff's refusal to pay, the conductor ejected him from the car. The plaintiff sues in trespass for assault and battery. The defendant pleads in justification, setting up a charter to the South Main Street Horse Railroad Company, to which, with other companies, the Union EaUroad Company is successor, which gave to the former company the right to extend its lines into East Providence, and to fix rates of fare not exceeding ten cents for each passenger between any two points on said road ; that in accordance with such authority, con- tinued to the defendant, and under ordinances of East Providence relating thereto, the defendant has established and charges a law- ful fare of five cents for one continuous ride on any car of said Union Railroad Company in said town of East Providence ; that, upon the plaintiff's refusal to pay such fare, he was ejected from the car by the conductor, using no more force than was necessary. We think the contract of October 15, 1892, recited above, super- sedes the rights under the charter and said statutory provisions pleaded. The statute of May 29, 1891, gives authority to make a contract, and by it the defendant waives its previous rights in respect to fare, for the consideration of extension of lines and an exclusive right to maintain them. Under this view of the contract, a plea in justification, so far as it rests upon rights previously held, is of no avail. The only question is the one which has been chiefly pressed in argument, — whether the plaintiff can avail himself, as an individual, of the right to claim the benefit of the provisions of that contract in this action. The plea does not wholly fall, because it still has the averment that the plaintiff was ejected for 828 OPERATION OF CONTRACT. refusal to pay the lawful fare. The terms of the contract are plain, — that "the fare from one point to any other point on the lines of said party of the second part shall not exceed five cents." We cannot vary this language by reason of the fact that, when the contract was made, two rides for five cents was not the estab- lished rate of fare. The contract makes no such reservation, and it was entered into with a view of new or extended lines within the town. If, then, it is of general application, it is controlling in this case. The plaintiff cites a large number of cases to the effect that a promise made by A to B, for the benefit of C, may be sued on by C. Most of these cases relate to debt, where there has been a substantial, though not a technical, novation. In Wilbur v. Wilbur (17 R. I. 295) this court held that it was not prepared to extend the doctrine to cases where no debt was assumed. The case was an action of assumpsit, on the promise to another to pay a note without consideration and void in law. The language of the opinion must be taken in its relation to the question before the court, which was whether a promise to pay to the plaintiff a sum of money, as for a debt, could be enforced by him when in fact no debt existed. We do not think that the court meant to lay down the rule that in no case, excepting debt, can a person avail himself of a promise to another. The contract in question was made for the benefit of passengers using the defendant's cars. The town can hardly show damages for its breach, and therefore, if the people for whose benefit it was made cannot recover for its breach, no one can. True, the town might take steps to avoid the contract and stop the road for failure to perform conditions ; but, in so doing, it would cut off the privileges of many to redress the wrong of one. This would neither be a reasonable nor an adequate remedy. It must have been intended to be a contract for the benefit of the public, made through the town as their corporate representative, upon which passengers could rely, and for breach of which they could seek redress ; otherwise, it is a contract of little obligation and force. Suppose the defendant should charge ten cents for one ride, and should eject a passenger for refusing to pay it; under its conten- tion, the passenger would be without redress. LIMITS OF CONTRACTUAL OBLIGATION. 829 In Little v. Banks (85 jST. Y. 268) the State made a contract with the defendant to publish reports of the Court of Appeals, in which it was stipulated that he should furnish copies to book- sellers, and, upon default, to pay the sum of $100 as liquidated damages, "to be sued for and recovered by the person so ag- grieved." It was held that the plaintiff was entitled to recover. This last clause quoted introduces an element not in this case, but it is not an important one in the view of the New York court. The court held that the contract was for the benefit of book- sellers, such as the plaintiff, and that he had a right under it, the clause quoted being intended to carry out the purpose of the contract by fixing a sum of liquidated damages. The general principle as to the plaintiff's right is laid down by the court as follows : " Contractors with the State, who assume, for a considera- tion received from the sovereign power, by covenant, express or implied, to do certain things, are liable, in case of neglect to per- form such covenant, to a private action at the suit of the party injured by such neglect ; and such contract imires to the benefit of the individual who is interested in the performance." The principle is put upon the ground of public policy essential to the public welfare. In Porter v. Bailroad Co. (97 N. C. 46), the defendant agreed with the city of Charlotte to pay a part of a policeman's salary, to be on duty at its depot. It was held that he could sue the defendant on the contract. Benge v. Hiatt's Adm'r (82 Ky. 666) gave a child the right to sue on a contract made by his putative father with his mother, for the child's benefit, in consideration of the surrelider of the child to the father by the mother. In Coster v. Mayor, etc. (43 N. Y. 399), the city under- took improvements under a statute by which it was to pay for damages to property. Judge Polger, in the opinion, said : " Here is the promise, the consideration, and the promisee, definitely brought out. The ultimate beneficiary is uncertain." The court held that a party damaged could maintain an action against the city for such damage as he had shown. The distinction to be made in cases of this sort is well stated by Brown, J., in House v. Waterworks Co., 88 Tex. 233. " It is not true that for every failure to perform a public duty an action will lie in favor of any person who may suffer injury by reason 830 OPERATION OF CONTRACT. of such failure. If the duty is purely a public duty, then the individual will have no right of action ; but it must appear that the object and purpose of imposing the duty was to confer a benefit upon the individuals composing the public." The dis- tinction is clearly brought out in Aldrich v. Howard, 7 R. I. 199. In that case a statute required buildings within certain limits to be built in the manner and of the materials described in the act. The plaintiff, as adjoining proprietor, alleged a violation of the act, and special damage to his estate. On demurrer, upon the ground that there was no private right of action, the court held that the penalty was the remedy through which the public could compel a compliance with the law, but that the private right existed also for one suffering special injury. Ames, C. J., in the opinion, said that the case was within the rule so long ago laid down by Lord Holt that, " in every case where a statute enacts or prohibits a thing for the benefit of a person, he shall have a remedy upon the same statute for the thing enacted for his advantage, or for the recompense of the wrong done to him con- trary to the said law." In Taylor v. Railroad Co. (45 Mich. 74) Cooley, J., said : " The burden that individuals are required to have for the public protection or benefit may in part be imposed for the protection or benefit of some particular individual or class of individuals also, and then there may be an individual right of action as well as a public prosecution, if a" breach of the duty causes individual injury." Most of the cases cited by the respondent arise out of contracts for the supply of water to a town or city, under a general public duty, and not for the benefit of individuals or a class of indi- viduals. They hold that there is no contract in favor of a private plaintiff, while some rest upon the lack of authority to impose conditions. The statute of May 29, 1891, gives authority to a town to act by ordinance or contract. If it acts by contract, as in this case, the necessary implication is that it may stipulate for terms other than those expressed in the act. As to the rate of fare, section four provides that the charge for service shall not be greater than the price actually charged by the corporation at the time of granting the franchise, which also clearly implies that it LIMITS OF CONTRACTUAL OBLIGATION. 831 may be less ; otherwise, it would be the same price. We do not think, therefore, that the contract was ultra vires, as claimed by the defendant. The plea of justification ignores the contract, but it is made a part of the statement of facts. It is to be noted that this case is not brought upon the contract, as in most of the cases cited. The plaintiff sues for trespass. The defendant pleads a justification upon the ground that the plaintiff was ejected for refusing to pay a " lawful fare." The evidence of the contract shows what we construe to be a waiver of any right on the part of the defendant, if any such existed, to charge for fares under the charters set out in the plea ; and hence that the provision, " The fare from one point to any other point on the lines of said party of the second part in said town shall not exceed five cents," fixes such fare as the maximum lawful fare between the points in question in this case. The plaintiff, having paid this fare, has paid all that he could be required to pay under the contract, which, being for the benefit of passengers, a class of which he was one, was for his benefit, and of which he could take advan- tage, under the principles stated above. We think, therefore, that the plea of justification is not sustained. Another point taken by the defendant is that, because the plaintiff boarded the cars for the purpose of making a test case, this is a moot case, which the court will not entertain. A moot case is one which seeks to determine an abstract question, which does not rest upon existing facts or rights. Where a concrete case of fact or right is shown, we know of no principle or policy of law which will deprive a party of a determination, simply because his motive in the assertion of such right is to secure such determination. It is a matter of common practice. Most of the cases of trespass to try title are of this sort. We are therefore of opinion that the case is not objectionable on this ground. We think that the plaintiff is entitled to judgment, which, according to agreement of parties, will be for nominal damages. Judgment for the plaintiff for ten cents and costs. 832 OPERATION OF CONTKACT. (P. 420) Promise for benefit of third party. (p. 437) BOSTON SAFE-DEPOSIT AND TRUST CO. v. SALEM WATER CO. (Sharp, Intervener.) 94 FEDERAL REPORTER, 238. —1899. ICircuit Court, iV. D. Ohio.] Ricks, District Judge. In December, 1892, at the suit of the Boston Safe-Deposit & Trust Company, trustee of the mortgage securing bonds of the Salem Water Company, a receiver was ap- poLated for the water company. Thereafter Alonzo Sharp, as adminstrator of one Thomas Sharp, filed an intervening petition in this action against said receiver, alleging, among other things, that the Salem Water Company and its receiver derived their right to maintain and operate the water plant in the city of Salem from a certain contract, entered into on the 19th day of March, 1887, between the village of Salem and certain assignors of said water company, by the terms of which contract said water company was authorized to establish, maintain, and operate waterworks in said village, and was obligated to furnish " an abun- dant supply of water for fire, domestic, manufacturing, street, sewerage, and other proper purposes for a period of twenty years," and to " construct and maintain a standpipe as part of said system of waterworks, and to supply or attach to the same an electrical, pneumatic, or hydraulic valve, and to so connect the said valve with the said pump station of said works or system that said valve could be closed at any moment and the entire force of the pumps be confined to the mains, and to so construct and maintain said waterworks that the said Salem Water Company would be able to furnish a plentiful supply of water to said Salem and its inhabitants for personal, domestic, and manufacturing pur- poses, and also for the extinguishing of fires and conflagrations, and other proper purposes," and also to construct and maintain the same so as to be sufficient at all times to provide a certain pressure of water throughout the system. The intervener further states in his petition that on the 22d day of April, 1894, certain buildings, machinery, tools, etc., of which his decedent, Thomas LIMITS OF CONTRACTUAL OBLIGATION. 833 Sharp, was the owner, were destroyed by fire, the said fire not being caused by any negligence on the part of his decedent, but that the damage caused by said fire would not haiVe exceeded f 300 had the receiver complied with the terms of said contract with the village of Salem, in which he was operating the waterworks, and that the receiver had failed in many respects to comply with his said contract, and by reason of his failure the intervener had been damaged in the sum of f 30,000. To this intervening peti- tion the receiver filed a demurrer and exceptions, upon which the case was heard. Counsel for the receiver maintained that there was no privity of contract between the intervener's decedent and either the Salem Water Company or its receiver, and that, in the absence of a duty resting either upon the common law or upon a contract, the Salem Water Company or its receiver owed no obligation to the intervener's decedent to comply with its contract with the village of Salem. That this action is not founded upon any com- mon-law duty, and does not, therefore, sound in tort, is quite evident ; that it is not based upon a contractual relation between the parties has been, with one exception, uniformly held in every jurisdiction within the United States where the question has arisen. Davis v. Waterworks Co., 54 Iowa, 59, 6 N. W. 126 ; Becker V. Waterworks, 79 Iowa, 419, 44 !N". W. 694 ; Britton v. Waterworks Co., 81 Wis. 48, 51 N. W. 84 ; Hayes v. City of Oshkosh, 33 Wis. 314 ; Nickerson v. Hydraulic Co., 46 Conn. 24 ; Eaton v. Water- works Co., 37 Neb. 546, 56 N. W. 201 ; Beck v. Water Co. (Pa. Sup.), 11 Atl. 300; Stone v. Water Co., 4 Pa. Dist. E. 431; Plmnix Ins. Co. V. Trenton Water Co., 42 Mo. App. 118; Howsmon v. Water Co., 119 Mo. 304, 24 S. W. 784; Fitch v. Water Co. (Ind. Sup.), 37 N. E. 982; Foster v. Water Co., 3 Lea, 42; Ferris y. Water Co., 16 Nev. 44; Fowler v. Waterworks Co., 83 Ga. 219, 9 S. E. 673; Mott V. Manufacturing Co., 48 Kan. 12, 28 Pac. 989 ; BusJi v. Water Co. (Idaho), 43 Pac. 69 ; Wainwright v. Water Co., 78 Hun, 146, 28 N. Y. Supp. 987 ; House v. Waterworks Co. (Tex. Sup.), 31 S. W. 179; Waterworks Co. v. Brownless, 10 Ohio Cir. Ct. E. 620. The general doctrine held by the foregoing cases is that, where a city contracts with a water company to furnish a supply of water for use in extinguishing fires, such supply to be paid for by 834 OPERATION OF CONTRACT. a levy of taxes upon tlie taxpayers of the city, there is no such privity of contract between a citizen or resident of such city and the water company as will authorize such resident or citizen to maintain an action against said water company for the injury or destruction of his property by fire caused by the failure of the water company to fulfill its contract ; and this is held even where the ordinance granting the water company its franchise provides that the water company shall pay all damages that may accrue to any citizen of the city by reason of a failure on the part of such water company to supply a sufficient amount of water to put out fires. See Mott v. Manufacturing Co., and other cases cited supra. The only case in all the books where the water company has been held liable for failure to furnish sufficient water for the extinguishment of fires is the case of Paducah Lumiier Co. v. Paducah Water-supply Co.,^ 89 Ky. 340, 12 S. W. 554, and 13 S. W. 249, in which case it was unnecessary for the court to have held this doctrine, as there was a private contract between the water company and the consumer for the furnishing of fire pressure. This Kentucky case has been repeatedly criticised by the courts of the various States in which this question has been decided. See Mott v. Manufacturing Co., Britton v. Waterworks Co., Fitch v. Water Co., Howsmon v. Water Co., House v. Waterworks Co., Waterworks Co. v. Brownless, and Eaton v. Waterworks Co., cited supra. The following cases are cited to show the general grounds upon which privity of contract may be asserted by a person not a party thereto : Simson v. Brown, 68 N. Y. 355 ; Burton v. Larkin, 36 Kan. 249, 13 Pac. 398 ; Wright v. Terry, 23 Fla. 169, 2 South. 6 ; House V. Waterworks Co. (Tex. Sup.), 31 S. W. 180 ; Anderson v. Fitzgerald, 21 Fed. 294 ; Second Nat. Bank of St. Louis v. Grand Lodge of Missouri A. F. & A. M., 98 U. S. 123 ; Vrooman v. Turner, 69 N. Y. 280; Bank v. Rice, 107 Mass. 37; Safe Co. v. Ward, 46 N. J. Law, 19. That a city owning its own waterworks cannot be held liable for failure to furnish sufficient water supply to extinguish fires • See also Qorrell v. Qreensbord Water Supply Co. , 124 N. Car. 328, post, p. 836. LIMITS OF CONTRACTUAL OBLIGATION. 835 is undisputed. 2 Dill Mmi. Corp. § 975 ; Wheeler v. Cincinnati, 19 Ohio St. 19 ; Fowler v. Waterworks Co., 83 Ga. 222, 9 S. E. 673 ; Wainwright v. Water Co., 78 Hun, 146, 28 N. Y. Supp. 987 ; Tainter v. City of Worcester, 123 Mass. 311 ; Vanhorn v. City of Des Moines, 63 Iowa, 447, 19 N. "W. 293; Hayes v. City of Oshkosh, 33 Wis. 314; Stone t. Water Co., 4 Pa. Dist. E. 431; House v. Waterworks Co. (Tex. Sup.), 31 S. W. 179, 185. If the city itself cannot be held liable for damage resulting from failure to furnish a fire pressure to its citizens, and if there is no privity of contract between the water company operating under a franchise from the city and the citizens or residents of such city, it is clear, upon principle as well as authority, that no legal obligation exists on the part of such water company and in favor of the individual citizen to maintain a sufficient pressure at the city water mains to extinguish fires which may occur upon the premises of such individual citizen. On the 24th day of December, 1892, Calvin A. Judson was appointed receiver of the Salem Water Company. He after- wards resigned, and Herman A. Kelley was appointed his suc- cessor on the 19th of January, 1897. On March 19, 1887, a certain contract was entered into, by and between the common council of the village of Salem and Messrs. Turner, Clark & Eawson, of Boston, whereby the latter agreed to build and con- struct waterworks and standpipes, having improved engines and pumping facilities, and to furnish the city of Salem with water privileges of the character described in the petition. Afterwards, on the 22d day of April, 1894, the buildings, machinery, tools, patterns, and all property of every description on the premises described in the intervening petition, and owned by Thomas Sharp, were destroyed by fire. The intervener declares and alleges that the fire could have been extinguished if proper machinery had been furnished by the company, arid if the obli- gations on their part in the contract between themselves and the city had been faithfully observed. There was no contract between the intervening petitioner and the company, or the city, that in case of fire he should be reimbursed for any loss he might sustain. If there were such a contract that could be enforced, there would be some foundation for the petitioner's claim in this 836 OPERATION OF CONTRACT. case ; but I think, under the facts stated, there is no privity of contract, and the demurrer filed by the receiver must, therefore, be sustained, and the intervening petition dismissed. This case has been very fully briefed by the receiver, and, -while it is not necessary to review the authorities, they seem overwhelming upon the propositions above stated. (P. 420) Promise for benefit of third party. (p. 437) GOEEELL V. GREENSBORO WATER SUPPLY CO. 124 NORTH CAROLINA, 328.— 1899. Action by Gorrell against the Greensboro Water Supply Com- pany to recover damages for a building alleged to have been burned in consequence of the breach of the defendant's contract with the city of Greensboro to supply an adequate quantity of water for fire purposes. Clakk, J. (After setting out the complaint.) The demurrer, so far as it relates to the merits of the case, is, substantially, that the complaint has stated no cause of action (1) because the plaintiif, though a citizen and taxpayer of Greensboro (as alleged in the complaint), is neither a party nor privy to the contract, the breach of which is the foundation of the action; (2) the failure of the defendant to furnish water was not the proximate cause of the plaintiff's loss. It is true, the plaintiff is neither a party nor privy to the contract, but it is impossible to read the same without seeing that, in warp and woof, in thread and filling, the object is the comfort, ease, and security from fire of the people, the citizens of Greensboro. This is alleged by the eleventh paragraph of the complaint, and is admitted by the demurrer. The benefit to the nominal contracting party, the city of Greensboro, as a corporation, is small in comparison, and, taken alone, would never have justified the grants, concessions, privileges, benefits, and payments made to the water company. Upon the face of the contract, the principal beneficiaries of the contract in con- templation of both parties thereto were the water company on LIMITS OF CONTRACTUAL OBLIGATION. 837 the one hand and the individual citizens of Greensboro on the other. The citizens were to pay the taxes to fulfill the money- consideration named, and furnishing the individual citizens -with adequate supply of water, and the protection of their property from fire, was the largest duty assumed by the company. One not a party or privy to a contract, but who is a beneficiary thereof, is entitled to maintain an action for its breach. This has been sustained by many decisions elsewhere. TilHs v. Harrison, 104 Mo. 270 ; Lawrence v. Fox, 20 N. Y. 268 ; Simson v. Brown, 68 N. Y. 355 ; Vrooman v. Turner, 69 N". Y. 280 ; Wright v. Terry, 23 Pla. 160 ; Austin v. Seligman, 18 Ted. 519 ; Bmton v. Larkin, 36 Kan. 246. And even when the beneficiary is only one of a class of persons, if the class is sufficiently designated. Johannes V. Insurance Co., 66 Wis. 50. It was considered, though without ■decision, by this court, in Haun v. Burrell, 119 IST. C. 544, 548 ; and Sams v. Price, 119 N. C. 572. Especially is this so when the beneficiaries are the citizens of a municipality whose votes authorized the contract, and whose taxes discharge the finan- cial burdens the contract entails. The officials who execute the contract are technically the agents of the corporation, but the corporation itself is the agent of the people, who are thus effectively the principals in the contract. The acceptance of the contract by the water company carries with it the duty of sup- plying all persons along its mains. Griffin v. Water Co., 122 IT. C. 206 ; Hangen v. Water Co. (Or.), 28 Pac. 244. In Paducah Lumber Co. v. Paducah Water Supply Co. (1889), -89 Ky. 340, it is held : " If a water company enter into a contract with a municipal corporation whereby the former agrees, in con- sideration of the grant of a franchise and a promise to pay certain specified price? for the use of hydrants, to construct waterworks of a specified character, force, and capacity, and to keep a supply of water required for domestic, manufacturing, and fire protection purposes for all the inhabitants and property of the city, a tax- payer of the city may recover of the water company when, through a breach of its contract, he is left without means of extinguishing fire, and his property is, on that account, destroyed ; " and it is therein further held : " Where a party undertakes to furnish water in such mode and quantity that it may be used to extinguish fires 838 OPERATION OF CONTRACT. in tlie city in whicli it is to be supplied, damages sustained by the destruction of buildings by the failure to so furnish such water is a natural and proximate consequence of such breach of the undertaking." This opinion is based upon sound reason, and is adopted by us. It is conclusive of both points raised as to the merits of the controversy by the demurrer. Indeed, it could not be doubted that, if the city buildings were destroyed by fire through failure of the defendant to furnish water for their pro- tection, as provided by the contract, the city could recover. New Orleans & N. E. B. Co. v. Meridian Waterworks Co., 72 Fed. 227. Besides, the complaint, in paragraphs 13 and 14, alleges that the defendant's failure to furnish water as per contract was the direct and sole cause of the loss, and this is admitted by the demurrer. Thus, the question really narrows down to the question whether the beneficiaries of a contract, who furnish the con- sideration money of the contract, can maintain an action for damages caused by its breach. The case of Paducah iMmber Co. V. Paducah Water Supply Co. is exactly in point, was re- affirmed on a rehearing, and is followed by Duncan v. Water Co., in the same volume, making three decisions altogether. The decisions, however (twelve in number), in other States where the question has been presented, are the other way. But this is a case of the first impression in this State, and decisions in other States have only persuasive authority. They have only the con- sideration to which the reasoning therein is entitled. They are to be weighed, not counted. We should adopt that line which is most consonant with justice and the "reason of the thing." Did the people of Greensboro have just cause to believe that by virtue of that contract they, as well as the corporation, were guaranteed a sufficient quantity of water to protect their property from fire ; and did the water company understand it was agree- ing, for the valuable considerations named, to furnish a sufficient quantity of water to protect private as well as public property from fire ? The intent is to be drawn from the instrument itself, and on its face there can be no doubt it was contracted that the water supply should be sufficient to protect private as well as public property. If so, it follows that when, by breach of that LIMITS OF CONTRACTUAL OBLIGATION. 839 contract, private property is destroyed, the owner thereof, one of the beneficiaries contemplated by the contract, is the party in interest, and he, and he alone, can maintain an action for his As is said by Judge Freeman, the learned annotator of the American State Reports, in commenting on the fact (Britton v. Waterworks Co, [Wis.], 29 Am. St. Eep., at page 863), that the majority of decisions so far rendered were adverse to the posi- tion taken in the Kentucky case above cited, and approved by us : " As none of the courts have fairly faced what seems to be the logical result of these decisions, viz., that the injured person is left without any remedy at all, it must be admitted that the subject is left in an extremely unsatisfactory position. It seems to be universally agreed, and on the soundest reasoning, that the city itself is not liable for failing to protect the property of tax- payers from fire, unless made liable by express statutory provi- sions. Wright v. Augusta, 78 Ga. 241. And it seems equally clear that the city would have no right of action in such case in behalf of the taxpayer, for the basis of all the [adverse3 decisions is that there is no privity of contract between the taxpayers and the water companies. If the contract is not made for the benefit of the taxpayers in such a sense that they can sue upon it, it can hardly be maintained that the same contract is made for one of those taxpayers in such a sense that the city can recover damages in his name. ... If, then, neither the tax- payer himself nor the city on his behalf can sue the company, the conclusion seems to be that the loss by fire in these cases is regarded by the law as damage for which there is no redress." This is a complete reductio ad absurdum, and we prefer not to concur in cases, however numerous, — there are probably a dozen scattered through half a dozen States, — which led to such con- clusion. All these cases (when not based on reference to the others) rest upon the narrow technical basis that a citizen, because not a privy to the contract, cannot sue, whereas author- ities are numerous that a beneficiary of a contract, though not a party or privy, may maintain an action for its breach. 7 Am. & Eng. Enc. Law (2d ed.), 105-108. Here the water company contracted with the city to furnish certain quantities of water 840 DISCHARGE OF CONTRACT. . for the protection of the property of the citizens as well as of the city, and received full consideration, a large part of which comes in the shape of taxation, paid annually by those citizens. On a breach of the contract, whereby the property of a citizen is destroyed, he, as a beneficiary of the contract, is entitled to sue ; and under our Code requiring the party in interest to be plaintiff he is the only one who can. Whether there was a breach of the contract, and whether it was the proximate cause of the loss, regarded as matters of fact, will be determined by the jury, if, when the case goes back, the defendant shall file an answer, as it has a right to do (Code, § 272), raising those issues. But in overruling the demurrer to the complaint there was no error. As was said by the Supreme Court of Kentucky, when afBrming, on a petition to rehear, the decision in the Paducah Case, supra: "The water company did not covenant to prevent occurrence of fires, nor that the quantity of water agreed to be furnished would be a certain and effectual protection against every fire, and consequently does not in any sense occupy the attitude of an insurer ; but it did under- take to perform the plain and simple duty of keeping water up to a designated height in the standpipe, and, if it failed or refused to comply with that undertaking, and such breach was the proximate cause of destruction of the plaintiff's property, which involves issues of fact for determination by a jury, there exists no reason for its escape from answering in damages that would not equally avail in case of any other breach of con- tract." Af&rmed. Faiecloth, C. J., and Fukchbs, J., dissent. (P. 522) Waiver. KELLETT v. EOBIE. 99 WISCONSIN, 303. — 1898. WiNSLOw, J. This is an action for breach of promise of mar- riage, and the plaintiff has obtained a judgment for damages fixed at $3500. The contract of marriage was admitted, but the de- BY AGREEMENT. 841 fendant claimed that there was a subsequent mutual- release. This was denied by the plaintiff, and upon this issue the case was tried. The evidence showed that the parties became engaged on August 30, 1890, the plaintiff then being twenty years of age; and it was agreed that the marriage should not take place for three years. The parties were farmers' children, and lived with their parents in adjoining towns in Winnebago County, about a mile and a half from each other. After the engagement, the defendant frequently called upon the plaintiff until December 17, 1893, at which time the defendant claims that the plaintiff sug- gested to him that, as long as his (defendant's) people were op- posed to the match, they should separate, and call the engagement off, and that he assented to this proposition. The defendant never called on the plaintiff after this time, although they had some cor- respondence, which is in the record. Soon after this alleged con- versation, the defendant commenced to call upon another young lady in the neighborhood, and continued to pay attention to her without objection on the part of the plaintiff, until he was mar- ried to her in December, 1895. The plaintiff denied positively that she released the defendant from the engagement. In the course of her examination as a party under section 4096, Rev. St. 1878, she admitted that they had a conversation in December, 1893, in which she says, " I told him if he did not want to marry me, of ■course he could suit himself; but he said he was marrying me, not his people, and he came to see me just the same." The evi- dence showed that the defendant was worth about $6000, com- posed of his interest in the estates of his father and grandfather, both of which were still unsettled. Several exceptions to rulings upon evidence and to the charge of the court were argued by the appellant, but, as we do not think we should be compelled to reverse the judgment on account of them alone, we shall not discuss them, but proceed to the main question, namely, whether the verdict is contrary to the evidence. Upon this question, after careful consideration of all the evi- dence, and especially of the letters written by the plaintiff after the alleged release, we can come to no conclusion except that the verdict is clearly against the preponderance of the evidence. 842 DISCHARGE OF CONTRACT. These letters demonstrated to a certainty that something of a serious nature had interrupted the relations of the parties about the time that the defendant alleges the release took place. No explanation as to what this serious event was is offered except the defendant's explanation of a release. We shall not give the letters in full, but content ourselves with some extracts, which seem to conclusively establish that the former relationship was broken off, and that marriage was no longer contemplated. In a letter of January 21, 1894, she says: "Fred: If you desire a change, why take it, and end the matter right here. As I said previously, I cannot count second. I am glad of one thing; if we do separate forever, you can always think that I performed my duty by you from the very first to the last." On March 1, 1894, she wrote : " Fred : You may think it queer on my part in asking you to come and see me, after what has happened. I would never do so if it were not absolutely necessary, Fred; that you know. I know it will cause hard feelings, but I cannot help it. You must know, and the sooner the better. So let me see you as soon as possible. If I have done wrong in writing, please forgive me, Fred; it is for your and my welfare." On March 8, 1894, she wrote again: "I just want you to come just once, and risk everything to oblige me. Your trouble is as nothing compared to mine. I knew you were in town Monday. I seen your horse, and some way I felt you were there. I don't feel hard toward you one bit, Fred. You will find me just the same. I am not fickle; once is forever with me; so don't feel" bad about nothing. You shall never suffer through me again. I hope the day may come when you forget that you ever knew me. . . . Now, Fred, if you don't want to come, and if you think you will be happier by staying away, why I will try and bear it." When the plaintiff said to the defendant in her letter of Jan- uary 21st, " If you desire a change, take it, and end the matter right here," we can see no escape from the conclusion that it was an offer of freedom from the engagement; and when it further appears that the defendant acted upon this or a similar offer, and without objection from the plaintiff, but with her knowledge, courted and married another woman, it must be considered that the offer was accepted, and that the plaintiff has become bound BY BREACH. 843 by the offer and its acceptance. We are unable to understand how, in the face of this evidence, the jury could have found that there was not a mutual release of the engagement. In connection with this unaccountable verdict, we cannot re- frain from saying that the damages awarded are grossly exces- sive, and that we should feel obliged to reverse upon this ground in any event. The defendant's estate amounted to about $6000, and there are no circumstances of aggravation in the case. The defendant is now married, and to give considerably more than half of his property as damages upon the facts appearing here, even if there had been no express release, we regard as out of the bounds of reason. The damages are so far excessive as to show passion, if not perversity, on the part of the jury. By the Court. — Judgment reversed, and action remanded for a new trial. (P. 555) BenurtiCiation before performance due : anticipa- (p. 559) tory breach. EOEHM V. HORST. 178 UNITED STATES, 1. — 1900. Action for breach of four contracts, judgment for plaintiffs (84 Fed. Eep. 565); af&rmed by Circuit Court of Appeals (91 Fed. Eep. 345). In 1893 plaintiffs entered into these four contracts with de- fendant, by the terms of the first of which plaintiffs agreed to sell and defendant to buy 100 bales of hops of the crop of 1896, at 22 cents a pound, to be shipped in specified months at the rate of 20 bales a month; by the second, 100 bales of the crop of 1896, to be shipped in other specified months ; by the third, 100 bales of the crops of 1897, to be shipped in specified months ; by the fourth, 100 bales of the crop of 1897, to be shipped in other specified months. (Six other contracts of like tenor had already been performed; the total of the ten contracts was 1000 bales.) In October, 1896, the first shipment of 20 bales was duly made under the first contract, but defendant declined to receive the 844 DISCHARGE OF CONTRACT. hops, and notified plaintiffs that he would not receive any more under the four contracts. In January, 1897, plaintiffs began this action for damages. At the time of defendant's refusal, plaintiffs could have made subcontracts for forward delivery of the 1896 hops at 9 cents a pound and for the 1897 crop at 11 cents a pound, and judg- ment was given for the difference between these prices and the contract price of 22 cents a pound, together with interest on the same from October 24, 1896. Mk. Chief Justice Fuller delivered the opinion of the court : It is conceded that the contracts set out in the finding of facts were four of ten simultaneous contracts, for 100 bales each, cover- ing the furnishings of 1000 bales of hops during a period of five years, of which 600 bales had been delivered and paid for. If the transaction could be treated as amounting to a single contract for 1000 bales, the breach alleged would have occurred while the contract was in the course of performance ; but plaintiffs' declara- tion or statement of demand averred the execution of the four contracts, "two for the purchase and sale of Pacific coast hops of the crop of 1896, and two for the purchase and sale of Pacific coast hops of the crop of 1897," set them out in extenso, and claimed recovery for breach thereof, and in this view of the case, while as tp the first of the four contracts, the time to commence performance had arrived, and the October shipment had been tendered and refused, the breach as to the other three contracts was the refusal to perform before the time for performance had arrived. The first contract falls within the rule that a contract may be broken by the renunciation of liability under it in the course of performance, and suit may be immediately instituted. But the other three contracts involve the question whether, where the contract is renounced before performance is due, and the renuncia- tion goes to the whole contract, and is absolute and unequivocal, the injured party may treat the breach as complete and bring his action at once. Defendant repudiated all liability for hops of the crop of 1896 and of the crop of 1897, and notified plaintiffs that he should make (according to a letter of his attorney in the record that he had made) arrangements to purchase his stock of other BY BREACH. 845 parties, whereupon plaintiffs brought suit. The question is there- fore presented, in respect of the three contracts, whether plaintiffs were entitled to sue at once or were obliged to wait until the time came for the first month's delivery under each of them. It is not disputed that if one party to a contract has destroyed the subject-matter, or disabled himself so as to make performance impossible, his conduct is equivalent to a breach of the contract, although the time for performance has not arrived ; and also that if a contract provides for a series of acts, and actual default is made in the performance of one of them, accompanied by a refusal to perform the rest, the other party need not perform, but may treat the refusal as a breach of the entire contract, and recover accordingly. And the doctrine that there may be an anticipatory breach of an executory contract by an absolute refusal to perform it has become the settled law of England as applied to contracts for services, for marriage, and for the manufacture or sale of goods. The cases are extensively commented on in the notes to Cutter v. Pwjodl, 2 Smith, Lead. Cas. 1212, 1220, 9th edition by Richard Henn Collins and Arbuthnot. Some of these, though quite familiar, may well be referred to. In Hochster v. De la Tour (2 El. & Bl. 678), plaintiff, in April,^ 1852, had agreed to serve defendant, and defendant had under- taken to employ plaintiff, as courier, for three months from June 1st, on certain terms. On the 11th of May, defendant wrote plaintiff that he had changed his mind, and declined to avail himself of plaintiff's services. Thereupon, and on May 22d, plaintiff brought • an action at law for breach of contract in that defejidant, before the said 1st of June, though plaintiff was always ready and willing to perform, refused to engage plaintiff or perform his promise, and then wrongfully exonerated plaintiff from the performance of the agreement, to his damage. And it was ruled that as there could be a breach of contract before the time fixed for performance, a positive and absolute refusal to carry out the contract prior to the date of actual default amounted to such a breach. In the course of the argument, Mr. Justice Crompton ob- served : 846 DISCHAEGE OF CONTRACT. " When a party announces his intention not to fulfill the contract, the other side may take him at his word and rescind the contract. That word 'rescind' implies that both parties have agreed that the contract shall be at an end, as if it had never been. But I am inclined to think that the party may also say : ' Since you have announced that you will not go on with the contract, I will consent that it shall be at an end from this time ; but I will hold you liable for the damage I have sustained ; and I will proceed to make that damage as little as possible by making the best use I can of my liberty.' " In. delivering the opinion of the court (Campbell, Ch. J., Cole- ridge, Erie, and Crompton, JJ.), Lord Campbell, after pointing out that at common law there were numerous cases in which an anticipatory act, such as an act rendering the contract impossible of performance, or disabling the party from performing it, would constitute a breach giving an immediate right of action, laid it down that a positive and unqualified refusal by one party to carry out the contract should be treated as belonging to the same cate- gory as such anticipatory acts, and said (p. 690) : " But it is surely much more rational, and more for the benefit of both parties, that, after the renunciation of the agreement by the defendant, the plaintifE should be at liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damage he has suffered from the breach of it. Thus, instead of remaining idle and laying out money in preparations which must be useless, he is at liberty to seek service under another employer, which would go in mitigation of the damages to which he would otherwise be entitled for a breach of the contract. It seems strange that the defendant, after renouncing the contract and absolutely declaring that he will never act under it, should be permitted to object that faith is given to his assertion, and that an opportunity is not left to him of changing his mind. If the plaintifE is barred of any remedy by entering into an engagement inconsistent with starting as a courier with the defendant on the 1st of June, he is prejudiced by putting faith in the defendant's assertion ; and it would be more consonant with principle if the defendant were precluded from saying that he had not broken the contract when he declared that he entirely renounced it. Suppose that the defendant, at the time of his renunciation, had embarked on a voyage for Australia, so as to render it physically impossible for him to employ the plaintifE as a courier on the continent of Europe in the months of June, July, and August, 1852; according to decided cases, the action might have been brought before the 1st of June ; but the renunciation may have been founded on other facts, to be given in evidence, which would equally have rendered the defendant's performance of the contract impossible. The man who BY BREACH. 847 ■wrongfully renounces a contract into which he has deliberately entered cannot justly complain if he is immediately sued for a compensation in damages by the man whom he has injured ; and it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait till the time comes when the act was to be done, stiU holding it as prospectively binding for the exercise of this option, which may be advantageous to the innocent party, and cannot be prejudicial to the wrongdoer. An argument against the action before the 1st of June is urged from the dilficulty of calculating the damages; but this argu- ment is equally strong against an action before the 1st of September, when the three months would expire. In either case, the jury in assess- ing the damages would be justified in looking to all that had happened, or was likely to happen, to increase or mitigate the loss of the plaintiff down to the day of trial. We do not find any decision contrary to the view we are taking of this case." In Frost v. Knight (L. E. 7 Exch. Ill), defendant had promised to marry plaintiff so soon as his (defendant's) father should die. While his father was yet alive he absolutely refused to marry plaintiff, and it was held in the Exchequer Chamber, overruling the decision of the Court of Exchequer (L. E. 5 Exeh. 322), that lor this breach an action was well brought during the father's lifetime. Cockburn, Ch. J., said: " The law with reference to a contract to be performed at a future time, where the party bound to performance announces prior to the time his intention not to perform it, as established by the cases of Hochster Y. -De la Tour, 2 El. & Bl. 678, and the Danube §• B. S. Railway §• K. Harbour Co. v. Xenos, 13 C. B. N. S. 825, on the one hand, and Avery V. Bowden, 5 El. & Bl. 714 ; Reid v. Hoshins, 6 El. & Bl. 953 ; and Barrick V. Bxiba, 2 C. B. N. S. 563, on the other, may be thus stated. The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed, and then hold the other party responsible for all the consequences of nonperformance ; but in that case he keeps the contract alive for the benefit of the other party as well as his own ; he remains subject to all his own obligations and liabilities under it, and enables the other party, not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to complete it. On the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as a wrongful putting an end to the contract, and may at once bring his action as on a breach of it; and in such action he wiU be entitled to such damages as would have arisen from the nonperformance of the contract at the appointed time, subject, however, to abatement 848 DISCHARGE OF CONTRACT. in respect of any circumstances which may have afforded him the means of mitigating his loss." The case of Danube & B. S. Railway & K. Harbour Co. v. Xenos (11 C. B. N. S. 152) is stated in the headnotes thus : On the 9th of July, A, by his agent, agreed to receive certain goods of B on board his ship to be carried to a foreign port, — the shipment to commence on the 1st of August. On the 21st of July A wrote to B, stating that he did not hold himself responsible for the con- tract, the agent having no authority to make it ; and on the 23d he wrote again offering a substituted contract, but still repudiat- ing the original contract. B, by his attorneys, gave A notice that he should hold him bound by the original contract, and that, if he persisted in refusing to perform it, he (B) should forthwith proceed to make other arrangements for forwarding the goods to their destination, and look to him for any loss. On the 1st of August, A again wrote to B, stating that he was then prepared to receive the goods on board his ship, making no allusion to the original contract. B had, however, in the meantime entered into a negotiation with one S for the conveyance of the goods by another ship, which negotiation ended in a contract for that purpose with S on the 2d of August. B thereupon sued A for refusing to receive the goods pursuant to his contract; and A brought a cross action against B for refusing to ship. Upon a special case stating these facts : Held, that it was competent to B to treat A's renunciation as a breach of the contract ; and that the fact of such renunciation afforded a good answer to the cross action of A, and sustained B's plea that before breach A dis- charged him from the performance of the agreement. Earle, Ch. J., said (p. 175) : "In Cort v. Ambergate, N. ^ B. ^ E. Junction R. Co. (17 Q. B. 127), it was held that, upon the company giving notice to Mr. Cort that they would not receive any more of his chairs, he might abstain from manu- facturing them and sue the company for the breach of contract without tendering the goods for their acceptance. So, in Hochster v. De la Tour (El. & Bl. 678), it was held that the courier whose services were engaged for a period to commence from a future day, being told before that day that they would not be accepted, was at liberty to treat that as a com- plete breach, and to hire himself to another party. And the boundary is equally well ascertained on the other side. Thus, in Avery v. Bowden BY BREACH. 849 (5 El. & Bl. 714, 6 El. & Bl. 953), where the agent of the charterer intimated to the captain that, in consequence of the breaking out of the war, he would be unable to furnish him with a cargo, and wished the captain to sail away, and the latter did not do so, it was not to fall within the principle already adverted to, and not to amount to a breach or renunciation of the contract. But where there is an explicit declarar tion by the one party of his intention not to perform the contract on his part, which is accepted by the other as a breach of the contract, that beyond all doubt affords a cause of action." The case was heard on error in the Exchequer Chamber before Cockburn, Ch. J., Pollock, C. B., Wightman, J., Crompton, J., Channell, B., and Wilde, B. ; and the judgment of the Common Pleas was unanimously affirmed. 13 C. B. N. S. 825. In Johnstone v. Milling (L. E. 16 Q. B. Div. 467) Lord Esher, Master of the Eolls, puts the principle thus : " When one party assumes to renounce the contract, that is, by antici- pation refuses to perform it, he thereby, so far as he is concerned, declares his intention then and there to rescind the contract. Such a renunciation does not, of course, amount to a rescission of the contract, because one party to a contract cannot by himself rescind it, but by wrongfully mak- ing such a renunciation of the contract he entitles the other party, if he pleases, to agree to the contract being put an end to, subject to the reten- tion by him of his right to bring an action in respect of such wrongful re- scission. The other party may adopt such renunciation of the contract by so acting upon it as in effect to declare that he too treats the contract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation." Lord Justice Bowen said (p. 472) : " We have, therefore, to consider upon what principles and under what circumstances it must be held that a promisee, who finds himself con- fronted with a declaration of intention by the promisor not to carry out the contract when the time for performance arrives, may treat the con- tract as broken, and sue for the breach thereof. It would seem on princi- ple that the declaration of such intention by the promisor is not in itself and unless acted on by the promisee a breach of the contract ; and that it only becomes a breach when it is converted by force of what follows it into a wrongful renunciation of the contract. Its real operation ap- pears to be to give the promisee the right of electing either to treat the declaration as brutum fulmen, and, holding fast to the contract, to wait till the time for its performance has arrived, or to act upon it and treat it as a final assertion by the promisor that he is no longer bound by the contract, and a wrongful renunciation of the contractual relation into III 850 DISCHARGE OF CONTRACT. which he has entered. But such declaration only becomes a wrongful act if the promisee elects to treat it as such. If he does so elect, it be- comes a breach of contract, and he can recover upon it as such.'' The doctrine which thus obtains in England has been almost universally accepted by the courts of this country, although the precise point has not been ruled by this court. In Smoot's Case (15 Wall. 36, 48) Mr. Justice Miller observed : " In the case of Phillpoits v. Evans (5 Mees. & W. 475) the defendant, who had agreed to receive and pay for wheat, notified the plaintiff, be- fore the time of delivery, that he would not receive it. The plaintiff tendered the wheat at the proper time, and the only question raised was, whether the measure of damages should be governed by the price of the wheat at the time of the notice or at the time of the tender. Baron Parke said : ' I think no action would have lain for the breach of the con- tract at the time of the notice, but that plaintiff was bound to wait until the time of delivery to see whether the defendant would then receive it. The defendant might have chosen to take it and would have been guilty of no breach of contract. His contract was not broken by his previous declaration that he would not accept.' And though some of the judges in the subsequent case of Hochster v. De la Tour (2 El. & Bl. 678) disap- prove very properly of the extreme ground taken by Baron Parke, they all agree that the refusal to accept, on the part of the defendant, in such case, must be absolute and unequivocal, and must have been acted on by the plaintiff." In Lovell v. St. Louis Mut. L. Ins. Co. (Ill U. S. 264) a life in- surance company had terminated its business and transferred its assets and policies to another company, and the court held that this in itself authorized the insured to treat the contract as at an end, and to sue to recover back the premiums already paid, al-. though the time for the performance of the obligation of the in- surance company, to wit, the death of the insured, had not arrived. Mr. Justice Bradley, delivering the opinion of the court, said : " Our third conclusion is that, as the old company totally abandoned the performance of its contract with the complainant by transferring all its assets and obligations to the new company, and as the contract is exec- utory in its nature, the complainant had a right to consider it as deter- mined by the act of the company, and to demand what was justly due to him in that exigency. Of this we think there can be no doubt. Where one party to an executory contract prevents the performance of it, or puts it out of his own power to perform it, the other party may regard it as terminated and demand whatever damage he has sustained thereby." BY BREACH. 851 In Dingley v. Oler (117 TJ. S. 490, 29 L. ed. 984) it was held that the case did not come within the rule laid down in Hochster V. De la Tour, bitt within Avery v. Bowden and Johnstone v. Milling, since, in the view entertained by the court, there was not a renunciation of the contract by a total refusal to perform. So' in Cleveland Boiling Mill v. Bhodes (121 U. S. 255, 264), involving a contract for the delivery of iron ore, the court said : " The necessary conclusion is that the defendant was justified in refusing to accept any of the iron shipped in 1881 ; and whether the notice previously given by the defendant to the plaintiff, that it would not accept under the contract any iron made after December 31, 1880, might have been treated by the plaintiffs as a renunciation and a breach of the contract, need not be considered, because the plaintiffs did not act upon it as such." In Anvil Min. Co. v. Humble (153 U. S. 540) performance had been commenced, but completion was prevented by defendant, and Mr. Justice Brewer, speaking for the court, said : "Whenever one party thereto is guilty of such a breach as is here attributed to the defendant the other party is at liberty to treat the contract as broken and desist from any further effort on his part to per- form ; in other words, he may abandon it, and recover as damages the profits which he would have received through full performance. Such an abandonment is not technically a rescission of the contract, but is merely an acceptance of the situation which the wrongdoing of the other party has brought about." In Pierce v. Tennessee Goal, I. & R. Co. (173 U. S. 1) it was held that on discharge from a contract of employment the party discharged might elect to treat the contract as absolutely and finally broken, and in an action recover the full value of the con- tract to him at the time of the breach, including all that he would have received in the future as well as in the past, deduct- ing any sum that he might have earned or that he might there- after earn ; and Mr. Justice Gray said : " The plaintiff was not bound to wait to see if the defendant would change its decision and take him back into its service ; or to resort to successive actions for damages from time to time ; or to leave the whole of his damages to be recovered by his personal representatives after hia death. But he had the right to elect to treat the contract as absolutely and finally broken by the defendant ; to maintain this action, once for all, as for a total breach of the entire contract." 852 DISCHARGE OF CONTKACT. In Hancock v. Xew York L. Ins. Co. (11 Fed. Cas. 402), Hochster y. De la Tour was followed by Bond, J., in the circuit court for the eastern district of Virginia ; and in Grau v. McVicker (8 Biss. 13, Fed. Cas. No. 6708), Dmmmond, J., fully approved of the principles decided in that case, and remarked : " It seems to me that it is the better rule to hold that the party who has refused to perform his contract is liable at once to an action, and that whatever arises afterwards, or may arise in consequence of the time not having come or not having expired, should be consid- ered in estimating the damages." Again, in Dinghy v. Oler (11 Fed. Eep. 372), Lowell, J., applied the rule in the circuit court for the district of Maine, and after citing Hochster v. De la Tour, Frost v. Knight, and other cases, said : " These cases seem to me to be founded in good sense, and to rest on strong grounds of convenience, however difficult it may be to reconcile them with the strictest logic." And see Foss- Schneider Brewing Co v. Bullock, 16 U. S. App. 311, 59 Fed. Eep. 83, 8 C. C. A. 14 ; Edward Hines Lumber Co. v. Alley, 43 U. S. App. 169, 73 Fed. Rep. 603, 19 C. C. A. 699 ; Marks v. Van Eeghen, 57 U. S. App. 149, 85 Fed. Eep. 853, 30 C. C. A. 208. The great weight of authority in the state courts is to the same effect as will appear by reference to the cases cited in the margin.' On the other hand, in Oreenway v. Oaither (Taney, 227, Fed. Cas. No. 5788), Mr. Chief Justice Taney, sitting on circuit in Maryland, declined to apply the rule in that particular case. The cause was tried in November, 1861, and more than two years 1 Fox V. Kitton, 19 HI. 518 ; Kadish v. Young, 108 HI. 170, 43 Am. Rep. 548 ; John A. BoeUing's Sons' Co. v. Lock-StUch Fence Co., 130 111. 660, 22 N. E. 518 ; Lake Shore and M. S. R. Co. v. Eichards, 152 111. 59, SOL. R.' A. 33, 38 N. E. 773 ; Burtis v. Thompson, 42 N. Y. 246, 1 Am. Rep. 516 • WimU muller v. Pope, 107 N. Y. 647, 14 N. E. 436 ; Mountjoy v. Metzger, 9 Phila. 10 ; Zuck v. McClnre, 98 Pa. 541 ; Hocking^. Hamilton, 158 Pa. 107, 27Atl f^: f Z? J: ^"'^^'•'""'' 3^ Md. 567, 11 Am. Rep. 509 ; Hosmer v. Wilson, 7 Mich. 294, 74 Am. Dec. 716; Piatt v. Brand, 26 Mich. 173; Crabtree v. M^essersmUh 19 Iowa, 179; McCormick y. Basal, 46 Iowa. 235; Kurtz v Frank 76 Ind. 594, 40 Am. Rep. 275 ; Golb v. Sail, 33 Vt. 233 Davis v. Grand Bapvds School Furniture Co., 41 W. Va. 717, 24 S. E. 630 ; and other cases cited m the text-books and encyclopEedias. BY BREACH. 853 after, at November term, 1853, application was made to the chief justice to seal a bill of exceptions. Hochster v. De la Tour was decided in June, 1853, and the decision of the circuit court had apparently been contrary to the rule laid down in that case. The chief justice refused to seal the bill, chiefly on the ground that under the circumstances the application came too late, but also on the ground that there was no error, as the rule was only appli- cable to contracts of the special character involved in that case, and the chief justice said as to the contract in hand, by which defendant engaged to pay certain sums of money on certain days : " It has never been supposed that notice to the holder of a bond, or a promissory note, or bill of exchange, that the party would not (from any cause) comply with the contract, would give to the holder an immediate cause of action upon which he might sue before the time of payment arrived." The rule is disapproved in Daniels v. Newton (114 Mass. 530) and in Stanford v. McGill (6 N. D. 536, 38 L. R. A. 760, 72 K. W. 938) on elaborate consideration.^ The opinion of Judge Wells in Daniels v. Newton is generally regarded as containing all that could be said in opposition to the decision of Hochster v. De la Tour, and one of the propositions on which the opinion rests is that the adoption of the rule in the instance of ordinary contracts would necessitate its adoption in the case of commercial paper. But we are unable to assent to that view. In the case of an ordinary money contract, such as a promissory note, or a bond, the consideration has passed ; there are no mutual obligations ; and cases of that sort do not fall within the reason of the rule. In Nichols v. Scraiiton Steel Go. (137 N. Y. 487), Mr. Justice Peckham, then a member of the court of appeals of New York, thus expresses the distinction : " It is not intimated that in the bald case of a party bound to pay a promissory note which rests in the hands of the payee, but which is not yet due, such note can be made due by any notice of the maker that he does not intend to pay it when it matures. We decide simply this case where there are material provisions and obligations interdependent. In such case, and where one party is bound, from time to time, as expressed, to deliver part of an aggregate and specified amount of property to 1 See also Carstens v. McDonald, 38 Neb. 858. 854 DISCHARGE OF CONTRACT. another, who is to pay for each parcel delivered at a certain time and in a certain way, a refusal to be further bound by the terms of the contract or to accept further deliveries, and a refusal to give the notes already demandable for a portion of the property that has been delivered, and a refusal to give any more notes at any time or for any purpose in the future, or to pay moneys at any time, which are eventually to be paid under the contract, all this constitutes a breach of the contract as a whole, and gives a present right of action against the party so refusing to recover damages which the other may sustain by reason of this refusal." We think it obvious that both as to renunciation after com- mencement of performance and renunciation before the time for performance has arrived, money contracts, pure and simple, stand on a different footing from executory contracts for the purchase and sale of goods. The other proposition on which the case of Daniels v. Newton was rested is that until the time for performance arrives neither contracting party can suffer any injury which can form a ground of damages. Wells, J., said : " An executory contract ordinarily confers no title or interest in the subject-matter of the agreement. Until the time arrives when by the terms of the agreement he is or might be entitled to its performance, be can suffer no injury or deprivation which, can , form a ground of damages. There is neither violation of right, nor loss upon which to found an action." But there are many cases in which, before the time fixed for performance, one of the contracting parties may do {hat which amounts to a breach and furnishes a ground of damages. It has always been the law that where a party deliberately incapaci- tates himself or renders performance of his contract impossible, his act amounts to an injury to the other party, which gives the other party a cause of action for breach of contract; yet this would seem to be inconsistent with the reasoning in Danieh v. Newton, though it is not there in terms decided " that an abso- lute refusal to perform a contract, after the time and under the conditions in which plaintiif is entitled to require performance IS not a breach of the contract, even although the contract is by Its terms to continue in the future." Parker v. Russell, 133 BY BREACH. 855 In truth, the opinion goes upon a distinction between cases of renunciation before the arrival of the time of performance and those of renunciation of unmatured obligations of a contract ■while it is in course of performance, and it is said that before the argument on the ground of convenience and mutual advan- tage to the parties can properly have weight, "the point to be reached must first be shown to be consistent with logical deduc- tions from the strictly legal aspects of the case." We think that there can be no controlling distinction on this point between the two classes of cases, and that it is proper to consider the reasonableness of the conclusion that the absolute renunciation of particular contracts constitutes such a breach as to justify immediate action and recovery therefor. The parties to a contract which is wholly executory have a right to the maintenance of the contractual relations up to the time for per- jformance, as well as to a performance of the contract when due. If it appear that the party who makes an absolute refusal intends thereby to put an end to the contract so far as performance is concerned, and that the other party must accept this position, why should there not be speedy action and settlement in regard to the rights of the parties ? Why should a locus paenitentioB be awarded to the party whose wrongful action has placed the other at such disadvantage? What reasonable distinction per se is there between liability for a refusal to perform future acts to ^e done under a contract in course of performance and liability for a refusal to perform the whole contract made before the time for commencement of performance ? As Lord Chief Justice Cockburn observed in Frost v. Knight, the promisee has the right to insist on the contract as subsisting and effective before the -arrival of the time for its performance, and its unimpaired and unimpeached efficacy may be essential to his interests, dealing as he may with rights acquired under it in various ways for his benefit and advantage. And of all such advantage, the repudiation of the contract by the other party, and the announcement that it never will be fulfilled, must of course deprive him. While by acting on such repudiation and the taking of timely measures, the promisee may in many cases avert, or, at all events, materially lessen, the injurious effects So6 DISCH.iEGE OF CONTRACT. which would, otherwise flow from the nonfulfillment of the contract. During the argument of Cort v. Ambergate Railway Co. (17 Q. B. 127), Erie, J., made this suggestion : " Suppose the contract was that plaintifi should send a ship to a certain port for cargo, and defendant should there load one on board; but defendant wrote word that he could not furnish a cargo ; must the ship be sent to return empty ? " And if it was not necessary for the ship owner to send his ship, it is not perceived why he should be compelled to wait until the time fixed for the loading of the ship at the remote port before bringing suit upon the contract. If in this case these ten hop contracts had been written into one contract for the supply of hops for five years in installments, then when the default happened in October, 1896, it cannot be denied that an immediate action could have been brought in which damages could have been recovered in advance for the breach of the agreement to deliver during the two remaining years. But treating the four outstanding contracts as separate contracts, why is it not equally reasonable that an unqualified and positive refusal to perform them constitutes such a breach that damages could be recovered in an immediate action ? Why should plaintiff be compelled to bring four suits instead of one ? For the reasons above stated, and having reference to the state of the authorities on the subject, our conclusion is that the rule laid down in Hochster v. De la Tour is a reasonable and proper rule to be applied to this case and in many others rising out of the transactions of commerce of the present day. As to the question of damages, if the action is not premature, the rule is applicable that plaintiff is entitled to compensation based, as far as possible, on the ascertainment of what he would have suffered by the continued breach of the other party down to the time of complete performance, less any abatement by reason of circumstances of which he ought reasonably to have availed him- self. If a vendor is to manufacture goods, and during the proc- ess of manufacture the contract is repudiated, he is not bound to complete the manufacture, and estimate his damages by the difference between the market price and the contract price, but the measure of damage is the difference between the contract BY BREACH. 857 price and the cost of performance. Hinckley v. Pittsburg Besse- mer Steel Co., 121 U. S. 264. Even if in such cases the manu- facturer actually obtains his profits before the time fixed for performance, and recovers on a basis of cost which might have been increased or diminished by subsequent events, the party who broke the contract before the time for complete performance cannot complain, for he took the risk involved in such anticipa- tion. If the vendor has to buy instead of to manufacture, the same principle prevails, and he may show what was the value of the contract by showing for what price he could have made sub- contracts, just as the cost of manufacture in the case of a manu- facturer may be shown. Although he may receive his money earlier in this way, and may gain, or lose, by the estimation of his damage in advance of the time for performance, still, as we have seen, he has the right to accept the situation tendered him, and the other party cannot complain. In this case plaintiffs showed at what prices they could have made sub-contracts for forward deliveries according to the con- tracts in suit, and the difference between the prices fixed by the contracts sued on and those was correctly allowed. Judgment af&rmed.' (p. 561) Renunciation in course of performance. (p. 572) CONNOLLY V. SULLIVAN. 173 MASSACHUSETTS, 1. — 1899. Contract, to recover a balance alleged to be due plaintiff for work and labor in excavating a lot for defendant. There was an ex- press contract under which plaintiff agreed to do the work for $750. After the work was partly done defendant directed plaintiff to stop. The plaintiff (who was losing largely under his contract) did not object to stopping work and acquiesced in the direction. The work then done was fairly worth $1200 ; to complete it was worth $925. Defendant had paid plaintiff 1 See for an extended argument to the contrary Stanford v. McGiU, 6 N. Dak. 536. 858 DISCHARGE OF CONTRACT. 1250. The worth of the work done if measured by the contract price was $425. The auditor found that if plaintiff was pre- vented by defendant from completing the contract he was entitled to $950 ($1200 less $250 paid); if he stopped voluntar rily with defendant's consent he was entitled to $175 ($425 less $250 paid). At the trial the judge directed a verdict for $950. Defendant alleged exceptions. Morton, J. The exceptions in this case were not only to the refusal of the court to give the rulings which were requested, but to the ruling by which the jury were directed to return a ver- dict for the plaintiff, irrespective of the contract price, for a sum which the auditor had found was the fair market value of all the work and labor performed and furnished, less what the defendant had paid on account ; that is, as we understand the exceptions, the court ruled, in effect, as matter of law, against the objection of the defendant, that, on the auditor's report, the plaintiff was entitled to recover the amount for which the jury were directed to return a verdict, without regard to the contract price. The audi- tor's report was the only evidence in the case. It not only stated the general conclusions to which the auditor came, but it stated particular facts and circumstances relating to those conclusions, and we think that the defendant was entitled to go to the jury, if he so desired, on the question whether, upon the auditor's report, the plaintiff was prevented by the defendant from going on with the contract, or whether it was terminated with his consent, manifested in such a manner that the defendant was justified in acting upon it. Peaslee v. Ross, 143 Mass. 275; Emerson v. Patch, 129 Mass. 299 ; Marland v. Stanwood, 101 Mass. 470, 478. If the former was the case, then the plaintiff would be entitled to recover, independently of the contract price, the value of the labor and materials furnished, and of which the defendant had had the benefit; and the contract price would be important or admissible only so far as it might tend to throw light, if at all, on the value of the labor and materials actually furnished. Fitz- gerald V. Allen, 128 Mass. 232. If the latter was the case, then we think that the plaintiff's right of recovery would be limited by the contract price, and the amount recoverable would depend on the ratio of the value of the BY BREACH. 859 labor and material actually furnished to what should be found to be the total cost of the work when completed according to the contract. See Veazie v. Hosmer, 11 Gray, 396 ; AtMns v. Bam- staile, 97 Mass. 428; Hayward v. Leonard, 7 Pick. 181; Koon V. Greenman, 1 Wend. 121. In other words, in that event we think that the rule adopted by the auditor would be substantially correct. Exceptions sustained.^ (P. 584) Divisible promises. (p. 594) GERLI V. POIDEBAED SILK MEG. CO. 57 NEW JERSEY LAW, 432. — 1894. Action on a contract by Paul Gerli against the Poidebard Silk Manufacturing Company. Erom the judgment both parties assign error. Dixon, J. On March 28, 1893, C. & E. Gerli, Eratelli & Co. entered into a contract to sell and deliver in New York to the Poidebard Silk Manufacturing Company thirty bales of extra Piva new silk, deliverable, ten bales July 20th to 25th, ten bales August 15th, and ten bales September 1st to 10th, each install- ment to be paid for sixty days after delivery at $5.90 per pound. In consequence of the lateness of the new crop, it >ras impossible for the sellers to make delivery of the first ten bales within the time specified, and on July 27th the buyer extended the time for such delivery until August 1st. On that date, the impossibility still continuing, the buyer notified the sellers that it canceled the contract because of the default, and would decline to receive any 1 In Wellston Coal Co. v. Franklin Paper Co., 57 Oh. St. 182, it is held that "the general rule is, that where full performance of a contract has been prevented by the wrongful act of the defendant, the plaintiff has the right either to sue for damages, or he may disregard the contract and sue as upon a quantum meruit for what he has performed," distinguishing DooUttle v. McCitUough (12 Oh. St. 360) upon the ground that in that case the wrong- ful termination of the contract by the defendant worked a benefit to the plaintiff and that in such cases the special rule is that plaintiff should be conflned to the contract in seeking a recovery. It is believed that this special qualification is peculiar to Ohio. See also AHe v. Nadean, post, p. 869. 860 DISCHARGE OF CONTRACT. of the merchandise ordered. On August 15th the new crop of silk had not yet arrived in New York, but it arrived before September 10th. Under these circumstances, one of the mem- bers of the seUing firm assigned the firm's rights in the contract to Paul GerU, the plaintife, and thereupon he brought this suit against the buyer to recover damages arising from the refusal to accept the installments of August 15th and September 1st to 10th. At the trial the justice denied the right to damages for the installment of August 15th, and directed a recovery of the damages as to the installment of September 1st to 10th. On exceptions taken at the trial, each party has assigned error. The errors assigned by the purchaser will first be considered. 1. That the claim for damages was assignable, so as to author- ize the assignee to sue thereon in his own name, is clear on the words of the supplement to the practice act, approved March 4, 1890 (P. L. 1890, p. 24). It was "a chose in action arising on contract." Such a chose in action belonging to a partnership may be transferred by a single member of the firm. Story, Part. § 101. 2. The contract was fully proved within the statute of frauds. Evidence introduced in behalf of the defendant showed that its general manager had written and signed a memorandum of the order given for the goods, in which were stated all the terms of the proposed contract, and that thereupon the agent of the sellers had sent to the buyer a written acceptance of the order, duly signed. Such proof was suf&cient. Browne, St. Frauds, § 346. 3. The other exception pressed by the defendant below is that the trial justice denied the right of the buyer to rescind the con- tract on the nondelivery of the first installment of silk. The general rule on this subject was thus laid down by this court in Blackburn v. Beilly, 47 IST. J. Law, 290. " In contracts for the sale of goods, to be executed by a series of deliveries and pay- ments, defaults of either party with reference to one or more of the stipulated acts will not ordinarily discharge the other party from his obligation, unless the conduct of the party in default be such as to evince an intention to abandon the contract, or a design no longer to be bound by its terms." In the case cited this rule was enforced against the buyer. In Trotter v. Heckscher BY BREACH. 861 (40 N. J. Eq. 612) this court, and in Otis v. Adams, (66 N. J. -Law, 38) the supreme court enforced it against the seller. That the conduct of the vendors in the present case did not evince an intention to abandon the contract, or not to be bound by its terms, appears beyond dispute. They failed to deliver the July installment because it was impossible to do so, offered to deliver other silk which they considered equally valuable, expressed their willingness to come to an equitable arrangement for their default, and, on the first intimation of a purpose on the part of the vendee to rescind the contract, they protested against the right of rescission, and insisted that they should be permitted to make the subsequent deliveries. They showed a design the very opposite of repudiation. Nor do we find anything in this contract or the circumstances of the parties from which it can reasonably be inferred that the parties intended the delivery of each installment of silk to be a condition precedent to the continuing obligation of the contract. So far as appears, the usefulness to the buyer of any installment did not at all depend upon the prompt delivery of prior install- ments, and full indemnity for every default could be secured by action based thereon. So that, under the rule before declared, it would seem that the attempt to rescind was illegal. The defendant, however, insists that the rule is not applicable to the present case, because the seller's fault consisted in failing to do the first thing required to be done in performance of the contract ; and Norrington v. Wright (115 U. S. 188) is cited as an authority for this distinction. On principle, I do not see that, for such a purpose, the first act to be done stands upon a different footing from subsequent acts. A default in that does not make it more certain than do other defaults that the party aggrieved cannot get exactly what he con- tracted for; for that default, as well as for others, he may be compensated by suit ; and by that default, as readily as by others, he may obtain an unconscionable advantage, if he is entitled to rescind or retain the bargain as self-interest may dictate. As evidence of repudiation or abandonment, nonperformance of the first thing required to be done may be more persuasive than if the promisor had partially carried out his contract, but, as a basis 862 DISCHABGE OF CONTRACT. on which a right of rescission is to be supported, it cannot,^ merely because it is first in order of time, have any greater impor- tance than later defaults. In Norrington r. Wright, ubi supra, the plaintiff had contracted to ship from Europe to the defendant in Philadelphia one thousand tons of rails in each of the months of February, March, April, May, and June ; in February he had shipped four hundred tons, which the defendant had received and paid for, not knowing that less than the required quantity had been shipped; in March the plaintiff had shipped 886 tons ; and the defendant, on learning of these deficiencies, declared the contract terminated. The court held that he was justified in doing so. I am not sure that I perceive definitely the principle on which this decision was rested. But the case seems now to be cited for the following paragraph in the opinion of the court : " The seller is bound to deliver the quantity stipulated, and has no right ... to com- pel the buyer to accept a less quantity; . . . and, when the goods are to be shipped in certain proportions monthly, the sell- er's failure to ship the required quantity in the first month gives the buyer the same right to rescind the whole contract that he would have had if it had been agreed that all the goods should be delivered at once." I cannot but think that there is here some confusion of thought. If a contract of sale requires the delivery of all the goods at once, and the seller tenders only part at the time specified, certainly the buyer may refuse to accept the part ; but it is scarcely accurate to say his refusal is based upon a rescission of the contract. He has simply refused to do what he never agreed to do. But if the goods are to be delivered in installments at different times, and the seller tenders one installment on the day specified, then, if the buyer refuses to accept it, plainly his refusal must rest upon a different foun- dation. He had agreed to accept such a tender, and his refusal can be justified only on the idea that he has become released from that agreement. That is to say, with reference to the point we are now considering, it must appear that his agreement to accept the installment tendered was dependent on the due per- formance by the seller of another promise, which he had failed to perform. We are thus brought to the real question in all bar- BY BREACH. 863 gains of this nature, whether, on the proper construction of the contract, the performance of any particular stipulation by one party is a condition precedent to the continuance of obligation upon the other party ; and logically this must be the question as ■well "with regard to the first stipulation as the subsequent ones. On this question this court adopted the general rule that when the seller has agreed to deliver the goods sold in installments, and the buyer has agreed to pay the price in installments -which are proportioned to and payable on the delivery of each install- ment of goods, then default by either party with reference to any one installment will not ordinarily entitle the other party to abrogate the contract. We were led to the adoption of this rule because it seemed to be supported by the greater strength of judicial authority, and to be most likely to promote justice. We see no sufficient reason for abandoning it. The rule governs the case in hand, and maintains the right of the plaintiff to recover damages for the defendant's refusal to accept the third install- ment of silk. Therefore, as against the defendant, the judgment is not erroneous. The plaintiff below assigns error upon the exclusion of his claim for damages because of the refusal to accept the install- ment deliverable August 16th. In this there was no substantial error. Conceding that the defendant's repudiation of the whole contract before August 16th absolved the sellers from the duty of tendering an installment on that date, and gave them an im- mediate right of action against the defendant for a breach of contract, nevertheless, when it appeared, as it did on the trial, that by no possibility could the sellers have made tender of the silk due August 16th, because the silk did not arrive in New York until a later, day, it became evident that as to that install- ment the sellers suffered no loss by the breach. There are other assignments of error in the record, ,but, as counsel did not notice them in argument, we assume that they are all involved in the matters above decided, or are waived. The judgment should be affirmed.' 1 A failure to pay an installment is not such a breach of the entire con- tract as to authorize the other party to abandon the contract and recover profits which he would have made, although he may abandon the contract 864 DISCHARGE OF CONTRACT. (P. 627.) Accord and satisfaction : Compromise. NASSOIY V. TOMLINSON. 148 NEW YORK, 326. — 1896. Action by J. Felix Nassoiy against David H. Tomlinson and others. From a judgment in favor of plaintiff (75 Hun, 613), defendants appeal. The plaintiff sued to recover the sum of $1200, which he claimed as a balance due him from the defendants for commis- sions on the sale of real estate owned by them, upon the agreed ■ basis of five per cent on the purchase price, which was $30,000. The defendants claimed that the agreement was that they should pay the plaintiff whatever they thought was right, and that the debt had been discharged by an accord and satisfaction. Vann, J. On the 6th of April, 1887, the plaintiff sold the property of the defendants, under an agreement that he was to receive compensation for his services in making the sale, but there was a difference between them as to the amount. The sale was not completed until about June 20, 1887, on which day Mr. Chauncey, who represented the defendants in all their dealings- with the plaintiff, wrote to him as follows : " I heard to-day from Mr. Griffith that the sale to Weston was completed on Saturday. I send you a check for three hundred dollars (1 per cent on $30,000), your commission on the sale. Please sign, and return the inclosed voucher." There was a check for $300 inclosed, payable to the order of the plaintiff, and also an unsigned receipt,, in these words : " Suspension Bridge, New York, June — , 1887. Eeceived of the Tomlinson estate three hundred dollars, in full for commissions for sale to J. A. Weston of 66-acre lot. $300." Under date of June 23, 1887, the plaintiff wrote to Mr. Chauncey, saying: "I don't know what you mean by sending me a check for $300. I want my five per cent commission on the $30,000."^ No reply was made to this letter, although one was requested,, and recover for what he has performed. Wharton v. Winch, UO N Y 287; Keeler v. Clifford, 165 HI. 544; Beatty v. Howe Lumber Co.^ (Minn.) 79 N. W. 1013. BY BREACH : REMEDIES. 865 and, during tlie latter part of July or the first of August follow- ing, the plaintiff, who had in the meantime retained both check and voucher, called on Mr. Chauncey, in the city of New York, and, as he testified on the trial, asked him what he meant by sending a check for " $300 commission for selling the farm. I said that I wanted my five per cent commission, as the understanding was between us. He said he wouldn't give one cent more, and I left him. ... I knew there was a dispute between us, I claim- ing $1500, and he claiming that I was only entitled to three hundred dollars, and that his check paid that; and, with the knowledge of that condition of affairs, I kept the check from July, 1887, to January, 1888, and then indorsed it, and drew the money, and sent him a receipt on account." The plaintiff never returned the blank voucher sent to him with the check, but in January, 1888, he indorsed the check, and drew the money on it, and then, under date of January 19, 1888, wrote to Mr. Chauncey, stating that he inclosed a receipt for $300, as part payment for his services, and that he still claimed he was entitled to five per cent commission, and insisted on being paid at that rate. The receipt inclosed was for $300, " in part payment for commission." On the 24th of January, 1888, Mr. Chauncey wrote to the plaintiff, ac- knowledging receipt of the letter and voucher, and stating that he should " consider this payment in full for all commissions." The plaintiff did not return or offer to return the money so paid him. When the plaintiff rested, as well as at the close of the evi- dence, the defendants asked the court to direct a verdict in their favor, on the ground that, upon the foregoing facts, which were not disputed, the plaintiff was not entitled to recover, but the motions were denied, and the defendants excepted. Twoquestionsof fact were submitted to the jury : (1) Whether there was an agreement to pay plaintiff at the rate of five per cent ; (2) whether the plaintiff agreed to accept the three hun- dred dollars " in place of his claim for five per cent commission." The jury were instructed to find for the plaintiff if they thought that the agreement to pay at that rate was made, and that the agreement to accept was not made ; otherwise, for the defendants. They rendered a verdict in favor of the plaintiff for $1200. The judgment entered on the verdict was affirmed by the general term 866 DISCHAEGE OF CONTRACT. upon its opinion written on a former appeal, but then the record did not contain the proposed receipt in full. Nassoiy v. Tomlin- son, 65 Hun, 491^93. The question presented by this appeal is whether the undis- puted evidence so conclusively established an accord and satisfac- tion as to leave no question of fact for the jury upon that subject. An accord and satisfaction requires a new agreement and the per- formance thereof. Jaffray v. Davis, 124 N. Y. 164. It must be an executed contract, founded upon a new consideration, although an agreement to accept an independent executory contract has been held sufficient. Kromer v. Heim, 75 N. Y. 574; Morehouse V. Bank, 98 N. Y. 603 ; 2 Pars. Cont. (7th ed.), 817, 820. If the claim is liquidated, the mere acceptance of a part, with the promise to discharge the whole, is not enough, for there is no new consideration. Ryan v. Ward, 48 N. Y. 204. If the claim is unliquidated, the acceptance of a part and an agreement to cancel the entire debt furnishes a new consideration, which is found in the compromise. A demand is not liquidated, even if it appears that something is due, unless it appears how much is due ; and when it is admitted that one of two specific sums is due, but there is a genuine dispute as to which is the proper amount the demand is regarded as unliquidated within the meaning of that term as applied to the subject of accord and satisfaction. Such is the case before us, as appears from the testimony of the plaintiff, already quoted. He claimed that the defendants owed him the sum of |1500, under an agreement to pay him at one rate, while the defendants claimed that they owed him but $300 under an agreement to pay him at another rate. The verdict of the jury upon this issue neither removed from the case the fact that a dispute had existed, nor affected its force, as otherwise the compromise of a disputed claim could never be made the basis of a valid settlement. We come, therefore, to the question whether there was an acceptance by the plaintiff of an offer by the defendants to pay the sum they conceded to be due in full satisfaction of the sum he claimed to be due. In order to determine this question, the letter of June 20, 1887, with the check and receipt inclosed therewith, should be construed together, so as to see whether the offer was BY BREACH: REMEDIES. 867 made upon a specified condition. When thus construed, we find the defendants saying to the plaintiff, in substance : " Here is a check for $300 to pay your commission on the sale. Sign and return the inclosed voucher, in full of your commissions." As reflecting the intention of the parties, it is the same, in effect, as if the check had been written " in full," as was the case in Rey- nolds V. Lumber Co., 85 Hun, 470. The plaintiff understood the condition, as his testimony shows, and he never signed or re- turned the voucher, and did not use the check for nearly seven months. In the meantime he had an interview with the agent of the defendants, and learned that they still adhered to their position of refusing to pay any more than the check sent "in full." After hesitating for five months longer, he used the check, and sent the defendants a receipt on account, writing them that he claimed a balance. This declaration was ex post facto, and could have no effect unless acquiesced in by the defendants ; but they promptly disclaimed, and insisted that their debt was paid. We think that the undisputed evidence shows conclusively that the offer was made in settlement of the claim, and that the plain- tiff so understood it, when, by using the check, he accepted the offer. The written evidence, the personal interview, and the acts of the plaintiff permit no other conclusion. The circumstances do not admit of different inferences, or present any question of fact, for the letter and receipt can have but one interpretation. The plaintiff cannot be permitted to assert that he did not understand that a sum of money offered " in full " was not, when accepted, a payment in full. As was said in Hills v. Sommer, 53 Hun, 392, 394, he was "bound either to reject" the check, " or, by accepting it, to accede to the defendant's terms." The money tendered belonged to them, and they had the right to say on what condition it should be received. " Always the manner of the tender and of the payment shall be directed by him that maketh the tender or payment, and not-by him that accepteth it." PinneVs Case, 5 Coke, 117. The plaintiff could only accept the money as it was offered, which was in satisfaction of his demand. He could not accept the benefit, and reject the condition ; for, if he accepted at all, it was cum onere. When he indorsed and col- lected the check referred to in the letter asking him to sign the 868 DISCHARGE OF CONTRACT. inclosed receipt in full, it was the same, in legal effect, as if ho had signed and returned the receipt, because acceptance of the check was a conclusive election to be bound by tlie condition upon which the check was offered. The use of the check was ipso facto an acceptance of the condition. The minds of the par- ties then met so as to constitute an accord ; and as was said by this court in Fuller v. Kemp (138 N. Y. 231), " the acceptance of the money involved the acceptance of the condition, and the law will not permit any other inference from the transaction." We cannot distinguish the case in hand from the case last cited, where a check for $400 was mailed with a letter stating that it was sent as payment in full of an unliquidated demand for $670. The creditor accepted the check, and used it, but "again sent his bill to the defendant, charging $670 for h*s services, and crediting upon it $400 received by check." The debtor answered, calling attention to the condition upon which he had sent the check, and requesting the creditor " either to keep the money upon the condition named, or return it to him by first mail " ; but no reply was made, and the money was not returned. Upon these facts, the court held that "when a debtor offers a certain sum of money in full satisfaction of an unliqui- dated demand, and the creditor accepts and retains the money, his claim is canceled, and no protest, declaration, or denial on his part, so long as the condition is insisted upon by the debtor, can vary the result." The principle that controlled that case must also control this, and the judgment appealed from should therefore be reversed, and a new trial granted, with costs to abide the event. All concur, except Haight, J., not sitting. Judgment reversed.^ ^Accord : Connecticut Biver Lumber Co. v. Brown, 68 U. S. 239. Contra ■ Tompkins v. Hill, 145 Mass. 379. BY BREACH: REMEDIES. 869 (p. 627) Accord and satisfaction. (p. 629) FLYNN V. HUELOCK. 194 PENNSYLVANIA STATE, 462. — 1900. Assumpsit for work done and material furnished defendants. Plaintiff had sent a bill for $3990.50, and afterwards called and requested payment. Defendants offered to pay it if plaintiff would receipt " in full of all demands." Plaintiff at first refused, but subsequently accepted the money and signed the receipt, stating, however, as he did so, that he waived no right to re- cover for other claims. The court entered a compulsory nonsuit. Plaintiff appeals. Per Curiam. While we do not think there is any merit in the several assignments of error submitted on behalf of the ap- pellant, and while it is certainly true that a receipt is open to explanation, and is not necessarily conclusive in itself, we are very clear that, upon the testimony in this case, the receipt " in full of all demands," given by the plaintiff to the defendants when the final payment was made, precludes him from any further recovery. He gave this receipt because the defendants refused to pay any more money without it. He must be assumed to have received the money upon the express condition that it was in full of all demands. He signed it with his eyes open, without any fraud, artifice, mistake, or imposition practiced upon him, and he is consequently bound by it. The assignments of error are all dismissed. Judgment afi&rmed. (P. 631) Discharge by judgment. (p. 635) ALLEN V. COLLIEEY ENGINEEE'S CO. 46 ATLANTIC REPORTER (PA.), 899. — 1900. Action by William D. Allen against the Colliery Engineer's Company for wages under a contract of employment. Prom a judgment in favor of defendant on a demurrer to the surrebutter, plaintiff appeals. Reversed. 870 DISCHARGE OF CONTRACT. Fell, J. The judgment appealed from was entered on a demurrer to a surrebutter. We are asked, however, to determine the right of the plaintiff to recover without regard to the techni- cal questions raised by the pleadings. The facts alleged are that the plaintiff was employed by the defendant as a manager of a branch of its business for one year, beginning January 12, 1898, at a salary of $75 per week. On July 2, 1898, he was discharged without cause. On July 18th, he sued the defendant for two weeks' salary in the district court of the city of Brooklyn, N. Y., and recovered a judgment therefor, which has been paid. This action was brought after the expiration of the time for which the plaintiff was employed to recover the salary for the balance of the year. The defendant pleaded the recovery of the judgment in New York in bar. It is conceded that while the plaintiff was in the employ of the defendant he could have maintained a separate action for each week's salary as it became due; but it is con- tended that after his discharge his only remedy was an action for damages for the breach of the contract, and that, as there can be but one recovery on that ground, he is concluded by the action brought in New York. The generally recognized rule is that an employe for a fixed period, who has been wrongfully discharged, may either treat the contract as existing, and sue for his salary as it becomes due, not on a quantum meruit, but by virtue of the special contract, his readiness to serve being considered as equivalent to actual ser- vice, or he may sue for the breach of contract at once or at the end of the contract period, but for the breach he can have but one action. 2 Smith, Lead. Cas. 38, note to Cutter v. Powell; 7 Am. Law. Eeg. (N. S.) 148, note to Huntington v. Railroad Co. Our cases are in entire harmony with this rule. In Algeo v. Algeo (10 Serg. & R. 235), it was held that, where the perform- ance of services had been prevented by the discharge of the em- ploye, he must declare on the special agreement, and could not recover on the implied promise, as the law would infer a promise from the acts of the plaintiff only, and not from the acts of pre- vention by the defendant. In Telephone Co. v. Root (Pa. Sup.) 4 Atl. 828, the plaintiff sued during the contract period on an agreement which, as in this case, was severable because the con- BY BREACH: REMEDIES. 871 sideration was apportioned. In the opinion in Kirk v. Hartman (63 Pa. St. 97), it was said by Sharswood, J., that a servant dis- missed without cause before the expiration of a definite period of employment could maintain an action of debt on the special agreement. It follows that if the recovery in the New York court was for the installments of salary then due, as alleged in the declaration in this case, the plaintiff may maintain his action ; if it was for damages for the breach of the contract as averred in the plea filed, he is concluded by it. There is nothing in the record before us which throws any light upon this question, and the case must go back for decision in the common pleas. The judgment is reversed, with a procedendo. (P. 631) Discharge by judgment. (p. 635) ALIE V. NADEAU. 93 MAINE, 282.— 1899. This was an action by the plaintiff to recover wages for the last two months of a period of six months, under an agreement entered into November 9, 1897, wherein defendant agreed to employ plaintiff for six months at wages of $10 per week, payable weekly. After keeping plaintiff in his employ about two months, or to January 15, 1898, defendant discharged him without cause. March 12, 1898, the plaintiff brought suit to recover the wages due him up to that time, and on trial a jury found for the plaintiff on all the issues, and rendered judgment for the wages due up to March 12, 1898. This judgment has been satis- fied. The present suit was brought at the expiration of the six- months period to recover the balance of wages due after March 12, 1898. The jury rendered a verdict for the plaintiff, and the defendant took exceptions to the refusal of the court to nonsuit the plaintiff, and also upon the court's refusing to make certain rulings requested by defendant, which appear in the opinion. 372 DISCHARGE OF CONTRACT. Savage, J. The plaintiff brings this action to recover damages for the breach of a contract of service, whereby the plaintiff alleges that he agreed to enter and remain in the employ- ment of the defendant for the period of six months from the 9th day of November, 1897, and that the defendant agreed to hire the plaintiff for the same period, and to pay him for his labor the sum of $10 per week. The plaintiff further alleges that he entered upon the performance of the contract upon his part, and continued to work until January 15, 1898, upon which day he was discharged by the defendant, without lawful cause. The case shows that the plaintiff was paid all wages due him up to the time of his discharge. On March 12, 1898, the plaintiff commenced an action against the defendant for damages, alleging the same breach of the same contract as is alleged here, and claiming damages to the date of his writ. In that action he ultimately recovered judgment in damages for an amount equal to the weekly wages agreed upon from January 15, 1898, to March 12, 1898. This action was commenced November 23, 1898, and the plain- tiff now claims to recover damages from March 12, 1898, to May 9, 1898, the remainder of the period covered by the contract. At the close of the testimony, the defendant's counsel requested the presiding justice to instruct the jury that the judgment in the former action was a bar to recovery in this suit. To a refiisal to give this instruction the defendant excepted. We think the requested instruction should have been given. Here is a single and indivisible contract, a hiring for the period . of six months. When the defendant discharged the plaintiff, he broke the contract. He broke it altogether. But there was only one breach. The plaintiff urges that, while the contract was entire, the performance was divisible ; that each week's work constituted a performance so far, and that the defendant was in default each week he failed to continue plaintiff in his employ- ment. Hence the plaintiff claims that an action will lie for each default. A little examination will show that this position can- not be sustained. The contract of the defendant may be viewed in a twofold aspect. In the first place, he agreed to continue the plaintiff in BY BREACH: REMEDIES. 873 his employment for a period of six months. That contract was entire and indivisible. There was a single breach of that part of the contract. He also agreed, we will assume, to pay the plain- tiff weekly. Performance of that part of the contract by the defendant was divisible, and the plaintiff might have maintained an action for wages for services performed on each failure of the defendant to pay as he agreed. To this effect are most of the cases cited by the plaintiff from our own decisions. But such is not this case. After the plaintiff was discharged, he performed no more service, and was entitled no longer to Wages as such, for the contract was at an end. The damage was the loss of his contract right to earn wages. He was entitled to recover all the damages he sustained by the breach, both present and prospective, and for such a breach but one action can be maintained. Sutherland v. Wyer, 67 Me. 64. The plaintiff brought an action for breach of contract, and recovered judgment for damages. It is to be pre- sumed that he recovered all he was entitled to receive for that breach. We think the principles stated in Sutherland v. Wyer, supra, are decisive upon this point. See, also. Miller v. Goddard, 34 Me. 102 ; Colhurn v. Woodworth, 31 Barb. 381 ; Olmstead v. Bach, 78 Md. 132; James v. Allen Co., 44 Ohio St. 226, and cases cited ; 2 Sedgw. Dam. (8th ed.), § 366. But the plaintiff contends that the rule should not apply here, becaiise in his first writ he claimed damages only to May 12, 1898. If this contention is sound, it follows that any litigant may sever an indivisible contract, and become entitled to main- tain several actions as for several breaches of it, simply by limit- ing his claim for damages in his earlier actions to less than full damages. We think this cannot be done. As we have already suggested, the law presumes that the plaintiff alleged and recov- ered in his first action all the damages that he sustained. Exceptions sustained. (P. 649) Destruction of subject-matter. (p. 653) ANGUS V. SCULLY. 57 NORTHEASTERN REPORTER (Mass.) 674. — 1900. Action by one Angus and others against one Scully to recover 874 DISCHARGE OF CONTRACT. for services performed in moving a building. From a judgment in favor of plaintiffs, defendant excepts. Exceptions overruled. Hammond, J. The contract was that the plaintiffs should move a large building belonging to the defendants from a lot on Third Street to a lot on First Street, and also change the location of two other buildings, of which one was on the First Street lot, and one on the Third Street lot; and the defendant was to pay the $840. In accordance with the agreement, the plaintiffs began the work. "They first moved the house on the Third Street lot, and then began to move the large building from the Third Street lot across certain open lots toward the lot on First Street. When said last-named building had been moved about half the distance to said lot on First Street it was entirely con- sumed by fire at some time during the night, and thereupon, with the assent of the defendant, no further work was done in moving either of the other buildings." In this action the plaintiffs seek to recover the fair value of the services rendered by them in the work done down to the time of the fire. The court refused to rule as requested by the defend- ant, that the plaintiffs could not recover, and submitted the case to the jury upon instructions which would authorize them to find for the plaintiffs if they were satisfied that the fire was not attribu- table to any negligence of the plaintiffs. We see no error in the rulings under which the case thus went to the jury. Clearly, one of the implied conditions of the contract was that the building should continue to exist. Upon the destruction of the building, the work could not be completed according to the contract. Authorities differ as to the rights of the parties in such a case, but so far as respects this commonwealth the rule is well settled. As stated by Knowlton, J., in Butterjield v. Byrcm (153 Mass. 517, 523) " the principle seems to be that when, under an implied con- tract, the parties are to be excused from performance if a certain event happens, and by reason of the happening of the event it becomes impossible to do that which was contemplated by the contract, there is an implied assumpsit for what has properly been done by either of them ; the law dealing with it as done at the request of the other, and creating a liability to pay for its value, to be determined by the price stipulated in the contract, or BY IMPOSSIBILITY. 875 in some other way if the contract price cannot be made applicar ble." Stated more narrowly, and with particular reference to the circumstances of this case, the rule may be said to be that where one is to make repairs or do any other work on the house of an- other under a special contract, and his contract becomes impos- sible of performance on account of the destruction of the house without any fault on his part, then he may recover for what he has done. This case comes clearly within this rule. Lord v. Wheeler, 1 Gray, 282 ; Butterfield v. Byron, ubi supra, and cases therein cited. -n, . • , , , Exceptions overruled.' (p. 649) Destruction of subject-matter. (p. 653) SIEGEL, COOPER & CO. v. THE EATON & PRINCE CO. 165 ILLINOIS, 550. — 189T. Action by the Eaton & Prince Company against Siegel, Cooper & Co. There was a judgment for plaintiff, which was affirmed by the appellate court (60 111. App. 639), and defendant appeals. This is an action by appellee against appellant, to recover money due appellee under a contract to construct an elevator in a building belonging to appellant, which was destroyed during the progress of the work. The whole contract price was $2500, pay- able as the work progressed, as follows : " One-half when engine is on foundation, and final payment to be due and payable when the elevator is put up in good running order." The first count of the declaration, which is in assumpsit, sets up the con- tract, and alleges that the engine mentioned therein was on the foundation prior to the fire, and claimed a right to recover $1250 by the terms of the contract. The second count also set up the contract, and alleged the performance of work and furnish- ing materials by plaintiff, of the value of $2000, when, without its fault, the building was destroyed. The plea is the general issue. The cause was tried on the following stipulation : ^ In Hysell v. Sterling Coal & Mfg. Co. (W. Va.), 33 S. E. Eep. 95, the plaintiff contracted to put a tin roof on a liouse at $5 per square, and when the worlc was nearly completed the house was burned. It was held that plaintiff could recover in quantum meruit for the work done. 876 DISCHARGE OF CONTRACT. "It is hereby stipulated and agreed that the plaintiff and defendants entered into the contract on the first day of June, 1891 ; that under the said contract, the plaintiff on the first day of August, 1891, had the engine mentioned therein on its foundation, but not leveled nor fastened to said foundation, and had prepared material and done labor under said contract to the total value of $1390 ; that neither the cabs, the cage, nor the cable for same was on said premises at the time the premises of Siegel, Cooper & Co. were destroyed by fire ; that the engine had been placed on the foundation as aforesaid about six o'clock on Saturday afternoon, August 1, 1891 ; that fire destroyed the premises of Siegel, Cooper & Co., in which said elevator and machinery therefor under said contract was to be placed, and broke out about 7.30 o'clock on Monday morning, August 3, 1891 ; that all work to be done under the contract had not been performed when the premises were destroyed by fire ; that the premises were destroyed by fire without the fault of either party to the contract, and nothing had been paid to the Eaton & Prince Co. by Siegel, Cooper & Co. under or upon said contract ; that defendant had the hatchways ready for the elevator work on Jidy 10, 1891, and plaintiff had the uninterrupted use of the hatchways on and after said date. It is further stipulated that the jury in this case shall be waived and the same submitted to the court for trial, without a jury." The plaintiff recovered judgment for $1390, the full value of material furnished and labor done. That judgment has been aflSrmed by the appellate court. The trial court held the following propositions in the decision of the case : "The court holds, as a matter of law, that if the plaintiff made and entered into the contract in evidence with the defendant, for the construction of an elevator and appurtenances as set forth in said contract; that work under said contract had so far pro- gressed that the engine thereof had been placed upon its founda. tion; and that afterwards, and without fault on the part of the plaintiff, the building in which said elevator, with its appurte- nances, etc., was to be placed or constructed, was on or about August 1, 1891, destroyed by fire, -then the plaintiff was BY IMPOSSIBILITY. 877 excused from further compliance with said con act, and is entitled to recover of and from the defendant the sum of $1250, with interest thereon at the rate of five per cent per annum, from said August 1, 1891." " And the court further holds that if the plaintiff set about the performance of said contract, and prepared material and machin- ery in accordance with the terms of said contract, and delivered a part thereof to the building in which said elevator and its appurtenances was to be constructed or built, and that afterwards, and on or about the first day of August, 1891, the said building in which said elevator was being constructed was destroyed by fire, without the fault of the plaintiff, then, as a matter of law, the plaintiff is entitled to recover of and from the defendant the full value, to be determined by the evidence or stipulation of the parties, of all work done and material prepared and delivered to said building, pursuant to said contract, prior to the happening of the fire." Wilkin, J. It is insisted that the court erred in holding these propositions, and in refusing counter propositions asked by the appellant, its contention being that the contract is an entire one, and the building in which the elevator was to be placed having been destroyed by fire before the time for final pay- ment, without any fault of either party, no recovery for the work done or materials furnished could be had. As will be seen from plaintiff's declaration, it proceeds on two theories : First, that the contract was not an entire one, so far as the payments were con- cerned ; and, second, even if it was, under the law it was entitled to recover the value of the work done and materials furnished prior to the destruction of the building. The judgment is upon this last theory, and is based upon the law as stated in the second of the above propositions. The theory upon which this proposition is based is that, under the contract requiring the elevator to be placed in a particular building, it was the duty of defendant to furnish and provide that building, and therefore it is liable, even though the destruction was without its fault. The rule of law, as we understand it, is otherwise. Thus, in Add. Cont., p. 401, it is said : " Where a man contracts to expend materials and labor on buildings belonging to and in the occupation of the employer, 878 DISCHARGE OF CONTRACT. to be paid for on completion of the whole, and before completion fhe buildings are destroyed by accidental fire, the contractor is excused from completing the -work, but is not entitled to any compensation for the work already done, which perished without any default of the employer." This doctrine is sustained by Brumby v. Smith, 3 Ala. 123 ; Lord v. Wheeler, 1 Gray, 282 ; Guilleu Y. Toudy, 5 Wkly. Notes Cas. 528. The rule seems to be adduced from the case of Appleby t. Myers, L. R. 2 C. P. 651. In that case the action was to recover for a part performance of a contract to furnish and attach to a building of the defendant certain machinery, to be paid for upon the completion of the work. The premises, together with part of plaintiff's materials, were destroyed by fire before the contract was completed. It was held that there was no right of action, the court saying : " We think when, as in the present case, the premises are destroyed without fault on either side, it is a misfortune equally affecting both parties, excusing both from further performance of the contract, by giving a cause of action to neither." See Bish. Cont. § 588. It is insisted by counsel for appellee — and the decision of the appellate court is in conformity with that contention — that a different rule is announced in Cleary v. Sohier, 120 Mass. 210, and Bawson v. Clarh, 70 111. 656. We do not so understand either of these cases. The Massachusetts case was upon an oral contract to lath and plaster a certain building at a certain price per square yard. " No agreement was made and nothing was said, as to terms or times of payment, but only that the work was to be done for forty cents per yard." A certain part of the work being done, the building was destroyed, without the fault of either party. The amount claimed by plaintiff was $474, the reasonable value of the work done. All that is said by the court in the decision of the case is: "The building having been destroyed by fire without the fault of the plaintiff, so that he could not complete his con- tract, he may recover under a count for work done and materials furnished;" citing Lord v. Wheeler, supra, and Wells v. Calnan, 107 Mass. 514. This in no way conflicts with Appleby v. Myers, supra, for it was said in that case : " It is quite true that materials worked by one into the property of another become a part of that property. This is equally true, whether it be fixed or movable BY IMPOSSIBILITY. 879 property. Bricks built into a wall become part of the house. Thread stitched into a coat which is under repair, or planks and nails and pitch worked into a ship under repair, become part of the coat or the ship ; and therefore, generally, and in the absence of something to show a contrary intention, the bricklayer or tailor or shipwright is to be paid for the work and materials he has done and provided, although the whole work is not complete. It is not material whether in such case the noncompletion is because the ship- wright did not choose to go on with the work (as was the case in Roberts v. Havelock, 3 Barn. & Adol. 404), or because, in consequence of a fire, he could not go on with it (as in Menetone y. Athawes, 3 Burrows, 1592). But, though this is the prima facie contract between those who enter into contracts for doing work and supply- ing materials, there is nothing to render it illegal or absurd in the workman to agree to complete the whole, and to be paid when the whole is complete, and not till then ; and we think the plaintiffs in the present case had Entered into such a contract." The case of Bawson v. Clark has no bearing whatever upon the case. There the plaintiff agreed to " manufacture and place in the building " certain iron work, for a certain price, 85 per cent of which was to be paid on the certificate of the architect as the work progressed, and the balance, 16 per cent, when the work was completed. The suit was for the iron work which had been manufactured. The evidence showed that the price agreed upon for manufacturing the iron was $206, and for putting it up about $75. Upon the completion of the manufacturing of the iron, and the delivery of a small portion of it, the defendant notified the plaintiff that the building was not ready for the work, and directed him to send no more imtil it should be ready, promising to notify him when that time arrived. A week later the building was destroyed by fire. The time required to put up the work would have been about two days ; so that it clearly appeared in that case that the plaintiff was prevented from completing the work, not by the destruction of the building by fire, but because the defendant did not have it ready for the work when plaintiff offered to complete it, and hence we said : " Appellees were in no way in default. They were ready and offered to fully perform within the time limited, but were prevented by appellant. The ggO DISCHARGE OF CONTRACT. reason of their not entirely completing their contract, by placing the iron work in the building, was the default of the defendant, in not having a building provided for the purpose." This, cer- tainly, does not mean that they were in default in not having a building because it was finally destroyed by fire, but because the building " was not then ready for the work," etc. We think the law is that where a contract is entered into with reference to the existence of a particular thing, and that thing is destroyed before the time for the performance of the contract, without the fault of either party, both parties are excused from performing the contract, but neither is entitled to recover any- thing for a part performance thereof. It remains, however, to be determined whether this contract is an entire contract within that rule. It will be seen that by its terms payment was to be made, not upon the completion of the work, but "as the work progresses, as follows: One-half when the engine is on foundation, and final payment to be due and payable when the elevator is put up in good running order ; " thus clearly providing for payment by installments. Counsel insist, however, that this does not destroy the entirety of the contract, because they say the $1250 was a mere arbitrary sum, fixed without reference to the value of the work done at the time designated for its payment; and that the phrase "when the engine is on foundation" merely named an arbitrary time at which a partial payment should be made, without reference to the value of the work and material furnished at that time ; and that the payment of the installment in that manner was merely for the convenience of the contractor, and as an evidence of the good faith of Siegel, Cooper & Co. in completing its part of the contract by making the payment. If all this were true, we are vmable to see why the contract is not severable, so far as the pay- ments are concerned. But we do not think the contract is fairly susceptible of that construction. The f 1260 is not a mere arbi- trary sum, fixed without reference to the value of the work done at the time of paying the installment. Payment was to be made as the work progressed, one-half when the engine was on the foundation. The parties here fixed the sum, by agreement, which should be paid when the work had progressed thus far, and pre- BY IMPOSSIBILITY. 881 sumably -with reference to the value of the material and labor then placed in the defendant's building. That it served the con- venience of the contractor, and evidenced the good faith of the employer, in no way affects the case. Parsons, in his work on Contracts (6th ed., vol. 2, § 617), speaking of the entirety of contracts, says : " If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable ; and the same rule holds where the price to be paid is clearly and distinctly appor- tioned to different parts of what is to be performed, although the latter is in its nature single and entire." See note C to the same section. In Schwartz v. Saunders (46 111. 18), Saunders made a contract with Schwartz to do the carpenter work, and furnish the material therefor on a brick building being erected, to be paid for as the work progressed, upon estimates to be furnished by the architect. The building was blown down, after an estimate of certain car- penter work, and before the contract was completed ; and it was held that the contractor, under such circumstances, was justified in abandoning the contract, and entitled to a mechanic's lien for the work done. It was contended there, as here, that the de- struction of the building absolved both parties, and protected the defendant from any action for the work done, the case of Appleby V. Myers, supra, being relied upon to support the contention, but it was said of the Appleby Case : " This case we have examined, and, from the statement of it, it would appear the contract was unlike the one between these parties, which provides, in terms, that 85 per cent of the work estimated by the architect should be paid as the work progressed, whilst, in the case cited, no pay- ment was to be made until the work was completed, and, as it was not completed, the mechanic could not recover for the work he had done." It is true that there are distinguishing features between that case and this, prominent among which is the fact that there the defendant had positively refused to pay the archi- tect's estimate of the work done before the destruction of the building, and afterwards refused to pay the same, insisting that, 882 DISCHAKGE OF CONTRACT. to entitle Tiim to pay therefor, he was bound to replace the work destroyed without any compensation, and the plaintiff's right to abandon the work was placed partly upon the refusal to pay and the unjust demand, as well as the destruction of the building. But the ease does not hold that where, by the terms of a contract of this character, payment is to be made as the work progresses, the doctrine announced in Appleby v. Myers has no application. We think the appellate court properly ruled that plaintiff was entitled to recover under the first count of the declaration, but we are unable to find authority or satisfactory reason upon which to sustain the second. The language " payment to be made as the work progresses " cannot, we think, be considered to mean more than that the fl250 should be paid as stated; that is, it cannot be construed to mean that the payments, after the engine was on foundation, should be made as the work pro- gressed, it being expressly stated, " Final payment to be due and payable when the elevator is put up in good running order," — that is, when the work was complete. Therefore, on a proper construction of the contract, the second proposition should have been refused. There was, however, no error in the judgment of the trial court, because under the first proposition, which, as we have seen, was properly held, the plaintiff was entitled to recover the $1250, with 5 per cent interest thereon from August 1, 1891, to the date of the judgment, July 5, 1895, which amounted to considerable more than the $1390 recovered. The judgment below will be affirmed. Judgment affirmed. Phillips and Caetwright, JJ., dissenting. INDEX. Absolute promises and concurrent conditions, 353 n., 576-584. Acceptance, 7-75, 703-725. by conduct, 10-14. by letter, 29-35, 41-46. by statement of quantity desired, 50-64. by telegraph, 46-48. communicated wben made as indi- cated by offeror, 29-36. contract springs from, 7-9. makes offer irrevocable, 60-64. mental determination not sufficient, 9. must be absolute, 74-75. must be by ascertained person, 62-71. must be communicated, 9, 21-29. must be in manner prescribed by offeror, 38-41. must be unconditional, 74-75. of continuing offer, 50-54. of guaranty, 29 n., 706. offer may be revoked before, 49-50. retention of goods as, 24-25. Accord and satisfaction, 442, 629, 627-631, 864-869. Acknowledgment of right of action after barred by statute of limita- tions, 636-638. Act of God, 643, 651. Acts, offer by, 10-14. Adequacy of consideration, 138-199, 213. Administrator, assignment of fees of, 462 n. of joint promisor not to be joined in action, 496. performance by, 479-485. special promise under statute of frauds, 111-113. Advertisement distinguished from offer, 71. Affection, see Good consideration. Agent, doctrine applied in contract for benefit of third party, 428 n. infant's, appointment of, 218-219. signature to memorandum under statute of frauds, 103-104. Agreement, obligation arising from, 6n. Aliens, capacity of, 215-217. Alteration of instrument, 577, 660- 666. Ambiguity, latent and patent, 606. Appropriation of chattel to buyer is delivery, 130. Arbitration, when agreement for illegal, 351-353. Architect's certificate, as condition precedent, 542-643. Arrest, impossibility of performance by, 647-649. Assignment, 438-485. by act of parties, 438-467. by death, 479-485, 553. by marriage, 478-479. by operation of law, 441, 468- 485. by statute, 459-460. conflicting assignees, 458 n. in equity, 446 n., 452-458. notice to debtor, 457-468. of executor's fees, 452 n. of future interests, 452-456. of insurance, 452. of insurance policy, 33.3-337. of interest in lands, 468-478. of lease, 440. of liabilities, 438-441. of officer's salary, 452 n. 883 884 INDEX. Assignment — continued. of partnership liabilities, 420-421, 436 n., 440. of parts of entire contract, 456. of pension, 452 n. of rights, 371, 442-467. of rights at common law, 442-452. of salaries of public officers, 347 n. when assignee cannot sue in his own name, 443-446, 452, 455-456. when assignee may sue in his own name, 459-460. Attestation, deed established by at- testing witness, 501 n. Attorney, infant's, appointment of, 218-219. Attornment, 470-472. Auction, memorandum under statute of frauds, 100-102. offer and acceptance, 49-50. Avoidance and illegality, comparative effect of, 383-389. Bailment, consideration in mandatum, 168-174. Bankruptcy, discharge by, 669-686. impairing obligation of contracts, 674-687. no bar to action for breach of warranty of title, 669-673. revival of agreement barred by, 208-210, 211. Benefit, contract for third party's, 420-437. Bets, see Wagers. Bill of exchange, character of, 464. see also Negotiable instrument. Bill of lading, negotiability of, 460- 467. Blackstone, criticism of his classifica- tion of contracts, 1. Bond, effect of illegality on, 395-398. joint and several, 492-494, 496. Breach of contract, 555-638, 843-873. by creating impossibility before performance due, 560-561. by creating impossibility during performance, 574, 575. by failure of performance, 576-611. Breach of contract — continued. by renunciation before performance due, 358, 555-559, 574 n., 843. by renunciation in course of per- formance, 561-574, 857. inducing as tort, 416-419. ^ interest payable as damages after, 76. of entire contract, 563. of divisible contracts, 584-594, 859. of contract of marriage, 357-369, 485 n. remedies, 611-638, 644, 658 n. see also Condition, Warranty. Breach of statute, contracts in, 315- 337. Building contract, 542-543, 641-645. Business circulars, how construed, 67-71. Capacity of parties, see Parties. Caveat emptor, 285-288, 307 n., 599. Certainty, see Uncertainty. Certificate of architect as condition precedent, 542-543. Certificate of deposit, negotiability of, 536-541. Champerty and maintenance, 854- 356. Charter, a contract, 699 n. Check, payment by, 34-36. Child, see Infant, Parent and child. Choses in action, see Assignability, Negotiable instrument. Circulars of information and offer distinguished, 67-71. Citizenship of parties, see Political status. Expatriation. Civil law, revocation of offer in, 57. rule as to impossibility of perform- ance, 652. rule as to obligation of successor after death, 482. Classification of contracts, 1, 2. Cohabitation, as consideration, 357-359. bond given for, 395-398. Collateral promises, see Warranty. Commercial agency, misrepresenta tion to, 280-282. Common carriers, see Tickets. INDEX. 885 Communication, of acceptance, 21-35. of offer, 14-20. of revocation, 57-62. see also Letter, Telegraph. Composition with creditors, bars action by creditor, 628. consideration for promise, 195-199. Compromise, as consideration, 140, 164-167. bars right to sue, 630. of tort, 349. Concealment, see Non-disclosure. Concurrent conditions and absolute promises, 358 n., 576-584. Condition, concurrent, 353 n., 576-584. implied to relieve against impossfi bility of performance, 651-653. in acceptance Is rejection of offer, 74-75. precedent, 353 n., 542-643, 576. sale upon, 534. subsequent, 609-611. warranty distinguished from, 353 n., 586, 594-596, 598-603, 609-611. Conduct, acceptance by, 10-14. false representation by, 288. offer by, 10-14. Confidence, relation of, see Uberrima fides. Consent, 238-314, 406. prevented by duress, 308-311. by fraud, 282-307. by mistake, 238-264. by misrepresentation, 265-282. by undue influence, 311-314, 406. see also Parties, capacity of. Consequential damages, see Profits. Consideration, 183-214, 782-762. what constitutes, 134, 144. necessary to every simple contract, 133-138. non-technical construction of the term, 280. adequacy of, 138-199, 213, 732. compromise as, 140, 164, 165-167. contingency distinguished from,360. entire, 380-381. expense incurred by promisee for his own benefit (at request), 141-143. Consideration — continued. failure of, 576-611. for exchange of unequal sums of money, 138-140, 213-214. for guaranty, 163. for infant's ratification after ma^ jority, 211. for payment of smaller sum for larger, 87-88, 138-141, 187, 750. for performance of existing con- tract, 174-187, 738-750. for performance of ofScial duty, 176-177. for release, 626. for revival of barred agreement, 208-213. for revival of agreement by bank- rupt, 208-210, 211. for revival of agreement by married woman after coverture ended, 211. for subscriptions, 35-38, 756-762. for substituted agreement, 177-195, 434, 524, 527. for substituted non-usurious for usurious agreement, 211. for subsequent promise to pay for voluntary services, 199-208. for voluntarily doing what another was bound to do, 206-208. forbearance as, 110, 162-164. good, 141, 146, 150-151. immoral, 357-359, 395-398. impossible, 152-156. in composition with creditors, 195- 199. in mandatum, 168-174. in memorandum under statute of frauds, 95, 539. joint or several, 498. legal Obligation as, 134-138, 147, 174-199. legality of, 199, 315-411. moral obligation as, 135-138, 140, 146, 201-205, 210-213. motive distinguished from, 138-141, 150-151. moved by previous request, 201, 205-206. must move from promisee, 152, 420-437, 809-840. must not be past, 141, 199-214. 886 INDEX. Consideration — continued. obscure, 167-174. parol evidence to vary expressed, 431-432. reality of, 150-199. seal as importing, 54-67, 83-86, 88, 395-398. uncertain, 157—162, 736. valuable, 151, 152-174, 754. when independent in promise to answer for third party, 112-113. writing does not import, 88, 133-134. Constitution, impairing obligations by provision in, 695. prohibition upon legislation impair- ing obligation, 674-701. Construction, 266-268, 511-521. general rules, 266-268, 511-515. common import of words, 678. meaning varied by trade usage, 508- 610. of " about," " more or less," 587. of alleged renunciation, 558. of application for life insurance, 278. of condition as concurrent, 580. of " joint " or " several," 496-497. of marine insurance policy, 266-288, 511-515. of offer, 67-71. of "satisfactory," 552-553. of specifications and building con- tract, 641-645. of "team," 507. of "void " in insurance policy, 632- 633. time as of essence of contract, 59, 515-517, 585. whether intestate's contract siir- vives, 483. Constructive contract, see Quasi con- tract. Contingency and consideration distin- guished, 360. Contingent demand and discharge from bankruptcy, 670. Contingent interest, assignment of, 452-456. Contract, defined, 687.- classification, 1, 2, 379. Contract — continued. existing law enters Into, 689, 691. agreement to quiet competition for public, 347 n. see also Obligation, Quasi contract. Contribution between joint promisors, 489. Corporations, charter a contract, 699 n. contract to influence, 347 n. contractual capacity of, 222-223, 371. fraud in prospectus, 305. Correspondence, offer and acceptance by, 29-35. Covenants, affecting freehold interests, assign- ment of, 472-478. affecting leasehold interests, assign- ment of, 468-472. impossibility of performance of, 641-647. in warranty deed distinct, 670. running with the land, 469, 472-478. Credit, letter of, see Letter of credit. Creditors, composition with, 195-199, 628. foreign, statute impairing obliga- tion to, 683-686. Crime, agreement to commit, 338-339. agreement to stifle prosecution of, 348-351. Crops, sale within statute of frauds, 123-124. Custom, evidence of, 608-510. Damages for breach of contract, general rule, 449-451, 611-613. after part performance, 522-523. as set off, 612-613. duty to mitigate, 180-181, 449-451, 572-674, 613 n. inadequacy of action for, 613-624. liquidated, 370, 665. lost profits as, 566-567, 603-607, 611 n. 2. of warranty in sale, 608. penalty or liquidated, 517-521. recoupment for deviation from con- tract, 642, 644. where vendee refuses to accept, 566, 564-568. INDEX. 887 Death, assignment of obligation by, 479- 485, 553. impossibility of performance by, 640, 661, 655. lapse of offer by, 35-38. of joint promisee, 492 n. of joint promisor, 489 n. Debt, discharge, by accord and satisfaction, 627- 631. by judgment, 631-635. by lapse of time, 635-638. by release, 625-626. of another's, 206-208, 412-415. Deceit, innocent representations and action for, 269, 273 n., 301 n. Decision, impairment of obligation by judicial, 674 n. Deed, as contract, 696-699. assignment of obligations following, 472-476. covenants distinct in, 670. delivery of, 90-92. estoppel by, 697. gratuitous undertaking by, 83-86. merger of previous contract in, 659- 660. proof of, 501 n. see also Seal. Default of another, promise to answer for, 113-118. Delict, see Tort. Delivery, of chattel, appropriation to buyer is, 130. of deed, 90-92. of gift, essential, 626. Destroyed instrument, 666-669. Destroyed subject-matter, impossi- bility of performance, 641, 645- 647, 649-655, 873-882. Disability, impossibility of perform- ance from, 655-658. Discharge of contract, 522-701. by agreement, 522-535. by alteration or loss of writing, 660-669. by bankruptcy, 208, 210-211, 669- 686. by breach, 555-638, 700-701. Discharge of contract — continued. by breach before performance due, 358, 555-561, 574 n., 843. by failure of performance, 576-611. by impairment of obligation by statute, 674-701. by impossibility created by party, 560, 561, 574, 575. by impossibility not created by party, 639-658. by merger, 659-660. by operation of law, 659-701. by performance, 536-554. by performance to satisfaction of promisee, 546-554. by provision for, 531-535. by renunciation, 555-559, 561-674. by statute, 674-690. by substantial performance, 542- 554. by substituted agreement, 524-630. by tender, 541-542. by waiver, 522-524, 840. when contract made for benefit of third party, 428-430. Discharge of right of action, 625-638. by accord and satisfaction, 627-631. by judgment, 631-635, 869. by lapse of time, 635-638. by release, 625-626. Divisible, see Indivisible. Divorce, illegal agreement for, 361. Document, proof of, 500-502, 666-669. Drunkenness, incapacity by, 228-232. refraining from, as consideration, 143-146. Duress of goods, 174-176. to person, 308-311, 788-795. Enemy, contracts with alien, 215-217. Entire consideration, 380-381. Entire contract, breach of, 563. Equitable estoppel, 224 n. Equity, assignment in, 446 n., 452-458. distinction abolished between ac- tions at law and suits in, 459- 460. will give relief when mistake not mutual, 263-264. see also Injunction, Specific per- formance. INDEX. Estate, privity of, 469^72. Estoppel, as remedy for misrepresen- tation, 281. by conduct, 224 n., 568 n. by deed, 697. Evidence, in relation to contract, 500-510. explanation of terms, 504-510. of consideration, seal as presump- tion, 83-86. of fact of agreement, 502-503. of lost or destroyed instruments, 666-669. of terms of contract, 503-510. of usage, 508-510. proof of document, 500-502, 666- 669. see also Parol evidence. Exchange of unequal sums of money, consideration in, 138-140, 213- 214. Executor, assignment of fees of, 452 n. of joint promisor not to be joined in action, 496. performance by, 479-485 special promise of, under statute of frauds, 111-113. Existence of subject-matter, mistake as to, 247-262. Expatriation, contract for, 154-155. Expense incurred by promisee for his own benefit at request, as con- sideration, 141-143. Express contract, Blackstone's defi- nition, 1. Fact, fraud must be representation of, 288-298. Failure of consideration, 576-611. False representation, effect of knowl- edge of its falsity by maker, 269-273, 298-302. Fire insurance, assignability of policy at law, 444- 445. non-disclosure of material fact by insured, 273-274, 277. Forbearance as consideration, 110, 162-164. Foreign creditors, statute discharging obligation to, 683-686. Foreign enemy, capacity to contract with, 215-217. Form, requirements of, 76-132. under statute of frauds, 92-110. Formation of contract, 7-411. Franchise a contract, 699 n. Fraud, 282-307, 778-788. agreement to commit, 339 n. difference between law and equity in relief for, 269, 273 n. distinguished from forgery, 238-243. distinguished from misrepresenta- tion, 265. in alteration of document, 660-666. non-disclosure of latent defects, 285-288. representation distinguished from expression of intention, 292-295, 297-298. representation distinguished from non-disclosure, 282-288, 296-297. representation distinguished from opinion, 297-298. representation must actually de- ceive, 297, 306-307. representation must be intended for injured party, 281-282, 303-306. representation must be of fact, 288- 298. representation must be material, 294. representation must be with knowl- edge of falsity or without belief in its truth, 298-302. Frauds, statute of, 92-132, 721-732. affects only executory contracts, 100 n. affects only remedy, 92-100. agreement not to be performed within a year, 120-123, 721. annual crops within seventeenth section, 124-127. delivery and acceptance in sale of goods, 130. form required is evidentiary, 92- 100. fourth section, 110-123. "goods, wares, and merchandise" include all personal property, 132. memorandum, after action brought, 99-100. auctioneer's book, 100-102. INDEX. 889 Frauds, statute of — continued. consideration expressed, 96, 539. may consist of separate writings, 68 ; connection of documents, 101-102. must show conditions of contract, 101. signature by party to be charged sufBcient, 102-108, 110 n. ; where placed, 103 ; by agent, 103-104 ; by auctioneer, 101 ; with lead pencil, 108-110. when may be made, 92-100. object, 95. promise of executor or adminis- trator, 110-113. promise to answer for debt of an- other, 110-118, 146, 432-435. sale of goods distinguished from contract for services, 127-131. sale of lands, 60, 118-120. seventeenth section, 123-132. to be pleaded, 99, 100 n., 147, 420. whether growing timber is within the fourth section, 124-127. Pructus industriales and fructus natu- rales, 123-127. Future interests, assignment of, 452- 456. Futures and options, 325-332, 383- 389. Gambling, see Wagers. Gift, delivery necessary, 626. distinguished from promise to give, 151. God, act of, 643, 651. Good consideration, 141, 146, 150-151. Goods, import in statute of frauds, 132. Grant, as contract, 696-699. Gratuitous undertakings, and obscure consideration, 167-171. later promise to pay for, 199-208. may be contracted by deed, 83-86. misfeasance in, 167-174. no recovery for services in, 14-15. performing another's legal obliga- tion, 206-208. Guaranty, aocevtanoe of, 29 n., 706-709. Guaranty — continued. distinguished from indorsement, 536-541. statute of frauds and, 110-118, 146, 432-435. sufficient consideration for, 163. Husband and Wife, see Marriage, Married women. Identity, of party, mistake as to, 243-246. of subject-matter, mistake as to, 246-247. Ignorance, of offered act, 14-15. of offered promise, 14, 62-67. of offered terms, 15-20. ' IllegaUty of contract, 315-411, 796-808. nature of, 315-372. against public policy, 340-372. champerty and maintenance, 354- 356. effect of, 373-411, 802. effect of avoidance and, 383-389. effect on bond given, 395-398. effect on note given, 399-401. effect of, when parties in pari de- licto, 390-391, 402-411. for "futures and options," 325- 332, 383-389, 796. for immoral act, 357-359, 395-398. for insurance where no insurable interest, 333-337. for usury, 663. in breach of statute, 315-337, 378- 380, 390-395, 407-411. in restraint of trade, 262-378, 380- 383. injuring public service, 340-347. injuring State in relation to another State, 215-217, 391-395. intention of parties in, 390-395, 805. locus poenitentiae, 391, 402-411. pleading of, 319. tending to pervert justice, 348-353. to affect freedom or security of marriage, 359-361, 402-407, 801. to arbitrate for determination of a right, 351-353, 799. to commit indictable offense or tort, 338-339. 890 INDEX. Illegality of contract — continued. to stifle criminal proceedings, 348- 351. to violate common law, 338-372. to violate law, 154. to violate Sunday laws, 318-323. wagers, 324-337, 383-391, 407-411. when divisible, 373-376. when Indivisible, 320, 346, 376- 383. Immoral consideration, 357-359, 395- 398. Impairment of obligation of contract by judicial decision, 674 n. Impairment of obligation of contract by statute, 76-81, 674-701. contracts with the State, 696-701. corporation charter, 669 n. executed and executory contracts, 697. exemption from taxation, 699 n. franchise, 699 n. judgment, 76-81, 696. statutes imposing new conditions, 76-81,686-690. statutes discharging the obligation, 674-690. statutes impairing the remedy, 677, 690-695. Implied contract, what is, 1-4, 379. by law, see Quasi contract. Implied warranty, see Warranty. Impossibility, breach before performance by party creating, 560-561. breach during performance by party creating, 574-575. by act of God, 643, 651. by arrest for crime, 647-649. by death, 640, 651, 655. by destruction of subject-matter, 641, 645-647, 049-655, 873-882. by law, 640, 645-649. by sickness, 655-658. by latent defect in soil, 641, 643. by weather, 639-641. condition implied to relieve from 651-653. discharge by, 639-658. makes consideration unreal, 152- 156. Impossibility — continued. of performing covenant m lease, 645-647. proximate cause of, 647-649. Indemnity, whether within the stat- ute of frauds, 113-118. Independent promises and concurrent conditions, 353 n., 676-584. Indivisible contract, action and judgment upon part of, 631-632, 869-873. and failure of consideration, 684- 694. illegality in, 320, 346, 376-383. payment indivisible when it Is to be within reasonable time, 102. Inducement, by stranger to break contract, 416- 419. in fraud, representation must be, 297. Infants, capacity to contract, 218-221. consideration for ratification of agreement by, 211. Injunction for breach of contract, 370, 619-624. Innocent misrepresentation, and action for deceit, 269, 273 n., 298-302. equity grants relief against, 268-278. in insurance, 274 n. Insanity, incapacity by, 224-227. lapse of offer by, 38 n. Insolvency, see Bankruptcy. Insurance contracts, acceptance of offer, 21-24, 29-35. arbitration in, 351-353. are uberrimae fides, 270-280. assignment of, 333-337, 452. construction of, 266-268, 278, 611- 615, 632-533. provision for discharge of, 531- 534. wagering, 333-337. Intention, effect of, in illegal agreements, 390- 395, 805-808. how ascertained, see Construction, of party, mistake by the other as to, 262-264. INDEX. 891 Intention — continued. of offeror, 71-73. representation distinguished from statement of, 292-295, 297-298. Interpretation, see Construction, Evi- dence. Interest payable as damages after ma- turity, 76. Interference witli contract by stran- ger, 416-419. Intoxication, see Drunkenness. Invitation and offer distinguished, 67- 71. Jest, offer and acceptance in, 71-73. Joint obligations, 486-499. — joint and several, bond, 492-494, 496. promisors, 492-496. note, 494-495. how determined, 496-499. — joint or several promisees, 496-499. — joint promisee, non-joinder of, 491. release by one, 492 n. — joint promises, 486-492. revival after barred by statute of limitations, 489 n. — joint promisor, 486-489. contribution by, 489. death of, 489 n. judgment against one, 489 n., 494- 495. non-joinder of, 486-487. release of one, 522-524. release to one, 488. Judicial decision, impairment of obli- gation by, 674 n. Judgment, as contract, 76-81, 696. against one joint promisor, 489 n., 494-495. discharge of right of action by, 631-635, 869-873. Justice, agreement tending to per- vert, 348-553. Knowledge, of falsity, see Innocent misrepresen- tation, of offer, see Ignorance. Labor and services, see Services. Lading, bill of, see Bill of lading. Land, assignment of obligations with, 468-478. specific performance of contract to convey, 614. statute of frauds and sale of, 118- 120. see also Deed, Lease. Lapse of offer, by death, 35-38. by failure to accept in manner pre- scribed, 38-41. by insanity, 38 n. by time, 41-48, 74-75. Lapse of time, discharge of right of action by, 635-638. Latent ambiguity, 505. Latent defect in chattel, 285-288. in soil, 641, 643. Law, as existing, enters into con- tract, 689, 691. assignment by operation, 441, 468- 485. discharge of contract by operation of, 659-673. distinction abolished between suits in equity and actions at, 469- 460. fraud in representation of, 288-292. Lead pencil, signature by, 108-109. Lease, assignment of, 440, 468-472. impossibility of performing cove- nant in, 645-647. Legal impossibility, 645-649. Legal obligation as consideration, 134-138. Legality of contract, see Illegality. Legislation, contracts to procure, 340- 346, 347 n. Letter, offer and acceptance by, 29- 35, 41-46, 710-717. Letter of credit, lapse by death of writer, 38. Liabilities, assignment of, 420-421, 435 n., 4.38-441, 448 n. Life insurance, non-disclosure of ma- terial fact by insured, 275-280. wagering policy, 333-337. Limitations, statute of, discharge of right of action by, 635-638. impairing obligation by, 681, 692 n. 892 INDEX. Limitations, statute of — continued. revival of agreement ban-ed by, 211 ; of joint promises, 489 n. Liquidated damages, 370, 517-521, 665. Liquor, illegality of sale, 378-380, 391-395. Lobbying contracts, 340-347. Locus poenitentise, 391, 402-411, 557, 674. Lost instrument, 663, 666-669. Love and affection as consideration, see Good consideration. Lunacy, see Insanity. Mail, contract by, see Letter. Maintenance, 354-366. Mandatum, consideration in, 168-174. Margins, sales on, 325-332, 383-389. Marine insurance, constmction of policy, 511-616. non-disclosure of material fact, 274 n. Marriage, breach of promise of, 357- 359, 485 n., 661. illegality of agreements affecting freedom and security of, 359-361, 402-107, 801. mock, 72-73. Married vfomen, contractual capacity of, 233-237. consideration for revival of agree- ment after coverture ended, 211. liability of husband for previous debts of wife, 478-479. Memorandum under statute of frauds, see Frauds, statute of, memoran- dum. Mercantile agency, see Commercial agency. Merger as discharge of contract, 659- 660, 662. Misdemeanor, agreement to commit, 338-339. agreement to stifle prosecution for, 348-351. Misfeasance, liability for, in gratui- tous undertakings, 167-174. Misrepresentation, 265-282. distinguished from fraud, 265. effects of, 268-280. estoppel as remedy for, 280-281. Misrepresentation — continued. in contracts uberrimse fides, 273-280. terms distinguished from represen- tations, 265-268. to commercial agency, 280-282. Mistake, 238-264, 762-778. as to identity of party, 243-246. as to identity of subject-matter, 246-247. by party as to intention of other party, known to that other, 262- 264. as to nature or existence of con- tract, 238-243, 254. as to price, 261-262. as to subject-matter, 246-264. as to value, 249-252, 256-261. mutual, 72-73. performance with slight, 545 n. when equity vfill relieve in other than mutual, 263-264. Mock-marriage, 72-73. Modification of contract, 177-195. Moral obligation as consideration, 135-138, 140, 146, 201-205, 210- 213. Mortgages are goods under the statute of frauds, 131-132. statute extending period of redemp- tion as impairing obligation of, 690 n. Motive distinguished from considera- tion, 150-151. inducing acceptance immaterial, 62-67. Mutual mistake, 246-262, 762-778. when equity will correct other than, 263-264. Mutual subscriptions, consideration for, 35-38, 199 n. Mutuality does not require signa- ture of both parties to memo- randum under statute of frauds, 105-109. essential, 26-29, 49, 52, 59. Necessaries, infant's contract for, 219 n., 220-221. Negligence of maker of negotiable paper, 243 n. Negotiable instrument, general rules as to, 401, 460-467. INDEX. 893 Negotiable instrument — continued. bill of lading as, 460-467. certificate of deposit as, 636-541. fraud distinguished from forgery in inception of, 238-243. must be for the payment of money, 537. must be payable to order or to bearer, 199, 446. payment by, 34r-36, 536-541, 660- 664. see also Promissory note. Negotiations distinguished from offer, 67-71. Non-disclosure, by silence or concealment, 284 n., 296-297, 778. of material fact in insurance, 273- 280. distinguished from representation, 282-288. Non-joinder, see Joint obligations. Note, see Promissory note. Notice, of assignment, 457-458. of limitations in tickets, 15-20. of revocation, 57-62. Novation, 436, 442-444. Obligation, explained, 675, 687, 691. arising from trust, 147-150. legal, as consideration, 134-138. limits of contractual, 412-437. moral, as consideration, 135-138, 140, 146, 201-205, 210-213. source of, 1-6, 78-79. statute impairing, 80-81, 674-701. Offer, 7-75, 70-3-721. by conduct, 10-14. by letter, 29-35, 41-46, 715. by telegraph, 46-48, 715. communication of revocation of, 57-62. continuing, 52. contract springs from acceptance of, 7-9. distinguished from advertisement, 71. distinguished from invitation, 67- 71. irrevocable by acceptance, 50-54. Offer — continued. is rejected by conditional accept- ance, 74-76. lapses by death, 36-38. lapses by failure to accept in man- ner prescribed, 38-41. lapses by time, 74-75. made when communicated, 14-20. may be revoked before acceptance, 49-50. must refer to creation of legal rela- tions, 71-73. need not be made to ascertained person, 62-71. of reward, acceptance of, 62-67, 718. revocation of, 49-62. under seal irrevocable, 54-67. Officer, see Public officer. Operation of contract, 412-499. Opinion, representation distinguished from, 297-298. Option, to buy goods, 50-54. to buy land, 57-62. Options, futures and, 325-832, 383- 389. Par delictum, 328, 390-391, 402-411. Parent and child, contract not im- plied for services, 1-6. Parol evidence, by stranger to vary contract, 503 n. cannot vary written contract, 67- 71. to connect documents, 101-102, 602. to explain terms, 504-507. to identify person, 507 n. to show intention, 488. to show situation of parties, 93. to show supplementary or collateral terms, 503-504, 515-517. to show written contract was not in effect, 502-503. to vary consideration expressed, 431-432. to vary time of performance, 516. Part payment, see Payment of smaller sums. Parties, assignment by act of, 438-467. capacity of aliens, 215-217. corporations, 222-223, 371. 894 INDEX. Parties — continued. drunken persons, 228-232. infants, 218-221. lunatics, 224-227. married women, 233-237. contract implies two, 89. joint and several promisors, 492-496. joint or several promisees, 496-499. joint promisees, 490-492. joint promisors, 486-489. mistake as to identity of, 243-246. privity between, 243-246, 412-437, 469-472. Partnership, assignment of liabilities, 420-421, 435 n., 440. Past consideration no consideration, 141, 199-214. Patent ambiguity, 605. Patent defect, 286. Payment, by negotiable paper, 34-35, 536- 541, 660-664. indivisible when to be within reason- able time, 102. of another's debt, 110-118, 146, 206-208, 412-415. of smaller sum for larger, 87-88, 138-141, 187-199, 213-214. Penalty, and liquidated damages distin- guished, 370, 517-521. contract as affected by statutory, 315-318. Pencil, signature by, 108-109. Pension, assignment of, 462 n. Performance, by assignee, 448 n. by executor or administrator, 479- 485. discharge by, 536-654. discharge by impossibility of, 639- 658. failure of, 576-611. not within a year under statute of frauds, 120-123. of existing contract as considera- tion, 174-187, 738-750. of public duty as consideration, 176- 177. substantial, 542-554. to satisfaction of promisee, 546- 654. Personal property, equivalent to goods, wares, and mer- chandise under statute of frauds, 132. specific performance of contract relating to, 613-619. Personal services, see Services. Political status, 154-155, 215-217. Possibilities, assignment of, 452-456. Possibility of performance, see Impos- sibility. Presumption of consideration, seal as affording, 54-57, 83-86, 88, 395- 398. Price, mistake as to, 281-262. wagers on, 325-332, 383-389. Priority among conflicting assignees, 458 n. Privity, of contract, 248-246, 412-437, 469- 472. of estate, 469-472. Profits, damages include lost, 566-567, 603-607, 611 n. 2. Promise distinguished from expression of intention, 292-295, 297-298. Promisee, must consideration move from, 152, 420-437, 809-840. Promissory note, alteration of, 660-666. character of, 464. effect of illegality on, 399-401. effect of fraudulent and forged, dis- tinguished, 238-243. failure of consideration, 35-38. joint and several, 494-495. lost or destroyed, 666-669. must be payable to bearer or to order, 199, 446. payment by, 538-540. under seal not negotiable, 83. Proof, see Evidence. Proximate cause of impossibility of performance, 647-649. Public officer, assignment of salary, 347 n., 452 n. contract to influence, 340-347. how far relation is contractual, 693- 695. performance of duty as considera- tion, 176-177. INDEX. 895 Public policy, agreements against, agreements affecting marriage, 359- 361, 402-407. agreement for expatriation, 154- 155. arbitration, 351-353. cliamperty and maintenance, 354- 356. injury of public service, 340-347. injury of State in relation to another State, 215-217, 391-395. immoral agreements, 357-359. restraint of trade, 362-378, 380-383. stifling criminal proceedings, 348- 351. Public service, agreements injurious to, 340-347. Public works, agreement to quiet competition for, 347 n. assignment of contracts for, 441. Qualified acceptance, see Conditional acceptance. Quality, mistake as to, 249-252, 255-261. warranty of, 595-597, 599, 601. Quantity, . acceptance by statement of desired, 50-54. may be determined after contract is made, 70. Quantum meruit, 160, 566-568, 570, 572 n., 574. Quasi contract, defined, 2. distinguished, 379. cases referred to, 6 n. contract for benefit of third party, 425, 429 n. contract of infant for necessaries, 220-221. contract of lunatic for necessaries, 224-227. contribution as, 489-490. judgment is, 76-81. succeeding corporation contract that is ultra vires, 222-223. Kailways, see Tickets. Ratification equivalent to previous authority, 206-207. Reality of consent, see Consent. Reality of consideration, 150-199. Reasonable time, payment within, not divisible at payor's option, 102. Recognizance as contract, 81 n. Record, contracts of, 76-81. Recoupment for deviation from con- tract, 642, 644. Recovery of money on illegal con- tract, see Locus pcenitentise. Rejection of offer, conditional accept- ance is, 74-75. Release, in general, 625-626. by one joint promisee, 492 n. of promissory note, 661. promise does not revive debt after, 210-213. to joint obligor, 488. Remedy for breach of contract, in general, 611-624, 644, 688. by renunciation during perform- ance, 562, 568. for misrepresentation, 280-282. for personal services, 564-571, 574- 575. recovery by one who abandons con- tract, 658 n. statutes impairing the, 677, 690- 695. see also Damages, Injunction, Spe- cific performance. Renunciation of contract, before performance due, 358, 555- 559, 574 n., 848. during performance, 561-574, 700- 701, 857. Replevin, 273 n. Representation, distinguished from terms, 265-268. see also Fraud, Misrepresentation. Request, consideration moved by previous, 201, 205-206. for services, allegation necessary, 66. to party to incur expense for prom Isee's benefit, as consideration, 141-143. Rescission, see Discharge by agree' ment. 896 INDEX. Restraint of trade, illegality of agree- ments in, 362-378, 380-383. BeviTal of agreement that is barred by rule of law, 208-213, 489 n. Revocation of offer, 49-62. communication of, 57-62, 715. civil law rule, 67. impossible after acceptance, 50-54. Reward, acceptance of offer of, 62-67. Bight of action, discharge of, by accord and satisfaction, 627-631. by judgment, 631-635. by lapse of time, 635-638. by release, 625-626. Rights, assignment of, 442-467. Roman law, see Civil law. Sale, acceptance of continuing ofier of, 50-54. by sample, 596, 610. damages when vendee refuses to accept, 556, 564-568. non-disclosure of material facts, 282-288. of annual crops, 123-124. of growing timber, 124-127. offer distinguished from invitation, 67-71. payment by negotiable paper, 539, 660-664. retention of goods as acceptance, 24-25. upon condition subsequent, 534. vendee has no better title than vendor, 461. warranty of quality, 595-597. Vf^hen title passes, 249-252, 660. see also Caveat emptor, frauds, statute of, seventeenth section. Sample, sale by, 696, 610. Satisfaction, accord and, 442, 629, 627-631. Satisfaction of promisee with perform- ance, 546-554. Seal, contract under, in general, 82-92. and illegal consideration, 395-398. effect of legislation upon, 56-57. express terms overcome presump- tion of consideration by, 88. imports consideration, 133. Seal — continued. irrevocability of offer under, 64-67. parol contract to dissolve contract under, 528. promissory note under, is not nego- tiable, 83. release under, 626-626. simple contract distinguished from. contract under, 86. what constitutes, 86 n. see also Deed. Securities, effect of illegality on, 395- 402. Services, assignability of contract for, 448, 451-452. contract for goods distinguished from, 127-131. impossibility of performance of, 640, 655-668. inducing breach of contract for, 416-419. misfeasance in gratuitous, 167-174. no recovery for gratuitous, 14-16. remedy for breach of contract for, 564-571, 574-575. specific performance of contract for, 616. survival of contract for, 479-485. when injunction granted in con- tract for, 619-624. Several, see Joint. Sickness, impossibility by, 655-658. Signature to memorandum under statute of frauds, by party to be charged sufficient, 102-108, llOn. by auctioneer, 101 . vfhere to be placed, 103. with pencil, 108-109. Silence, as acceptance, 21-25. see also Non-disclosure. Simple contract distinguished from specialty and negotiable paper, 133. Specialty, see Seal. Specific performance, meritorious ciyisideration required, 66. not decreed for uncertainty, 159-160. when decreed, 516-517, 613-618. INDEX. 897 Stare decisis, illustrated, 188. State, breach of contract by, 700-701. contract injurious to public seryloe of, 340-347. contract injurious to relation be- tween State and, 215-217, 391- 395. statute impairing contracts -with, 696-701. Statute, contracts in breach of, 315-337. impairing obligation of contracts, 674-701. Statute of frauds, see Frauds, statute of. Statute of limitations, see Limita- tions, statute of. Stranger, interference with contract by, 416- 419. payment of another's debt by, 206- 208, 412-415. Subject-matter, impossibility arising from destruc- tion of, 649-655. mistake as to, 246-264. Subscriptions, consideration for, 35- 38, 199 n. Subsidiary promises, see Warranty. Substantial performance, 542-554. Substituted agreement, 177-195, 436, 442-444, 524-530. Suggestion of falsehood, 284 n. Sunday contracts, 318-323, 561. Suppression of truth, see Non-disclos- ure. Surety, 113-118, 489, 493. Survival of obligation after death, 479-485. Tacit contract, 379. Taxation exemption as contract, 699 n. Telegraph, contract by, 46-48, 715. Tender, discharge of contract by, 541-542. required when conditions are con- current, 576, 578, 580-582. Terms, distinguished from representa- tions, 265-268. Tickets of common carrier, notice of limitations in, 15-20. Timber, statute of frauds and sale of growing, 124-127. Time, as of essence of contract, 59, 515- 517, 585. discharge of right of action by lapse of, 635-638. lapse of offer, 41-48. payment indivisible when it is to be within reasonable, 102. Title to personalty when passes by sale, 249-252, 650. Tobacco, refraining from, as consider- ation, 143-146. Tort, agreement to commit, 338-339. compromise of, 349. inducing breach of contract, 416- 419. obligation arising from, 6 n. Trade, restraint of, see Restraint of trade. Trust, obligation arising from, 147-150, 423-427, 437 n. applicability of doctrine in contract for benefit of third party, 423- 427, 428 n., 430. Uberrima fides, 273-280, 289-290, 313-314. Ultra vires, 222-223, 371. Uncertainty, consideration unreal by, 157-162. Undue influence, 311-314, 406. Usages of trade, 508-510. Usury, consideration for substituted non- usurious contract, 211. effect of, 663. Valuable consideration, what is, 162-174. when necessary, 151. Value, mistake as to, 249-252, 255— 261. Valid, its meaning in statute of frauds, 96. Void, contracts ultra vires, 222-223. effect of illegal distinguished from, 383-389. 898 INDEX. Void, when infant's contract is, 218- 219. Voidable, distinguished from null, 238-243. infant's contract, 218-221. , when contract by lunatic is not, 224-227. Voluntary services, see Gratuitous. Wagers, at cards, 390-391. in insurance, 333-337. on existing fact, 324-325. on marMage, 360. on rise and fall of prices, 326-332, 383-389, 796. on sports, 407^11. Waiver, [ as discharge, 522-524, 840. of answer to insurer's interroga- tory, 275. when acceptance of less is no, 587. War, contract with enemy, 215-217. Warranty, and condition distinguished, 363 n., 694-696, 698-603, 609-611. as condition subsequent, 609-611. deed, covenants distinct in, 670. in answer to insurer's interrogatory, 277. in maritime and insurance law is condition, 586. of quality, 595-597, 699, 601, 610. Writing, contract in, alteration of, 660-666. does not import consideration, 88, 133-134. materials used for, 108-109. proof of execution, 500-502. whether contract or evidence of contract, 94. see also Frauds, statute of, Parol evidence. KP 801 A? h88 1900 c.l Author Huffcut Ernest Wislon Vol. Title Ajaerican cases on contract Copy Date Borrower's Name