KF 90/ MS . (Bnritpll ICam ^rlinnl Hibrarii CORNELL UNIVERSITY LIBRAR' Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924062061217 A TREATIW:,, o ^ ^ ON THE \V>"- .■r N#- / / LAW OF CONTRACT C. G. ^DDISON AUTHOR OF "the LAW OF TORTS '* THIRD AMERICAN, FROM THE SEVENTH LONDON EDITION OF LEWIS W. CAVE, Esq. JAMES APPLETON MORGAN OF THE NEW YORK BAH. AUTHOR OF " THE LAW OF LITERATURE;" AMERICAN EDITOR OF "DECOLYAR on GUARANTY," &C. ftC. VOL. Ill NEW YORK JAMES COCKCROFT & COMPANY I 876 Entered, according to act of Congress, in the year 1876, By James Appleton Morgan, In the office of the Librarian of Congress, at Washington.. TOBITT & BUNCE, Printers and Stereotypkrs 131 William Street, 1263 CONTENTS OF VOLUME III. BOOK II. CHAPTER IV. CONTRACTS OF SECURITY. Sect. \.— General principles. paragraph pagh The contract of mortgage .... 1017 i The contract of pledge . .... 1018 5 The contract of hypothecation. . . . 1019 6 Sect. 2. — Mortgage, etc., of realty. Mortgage of lands and tenements. . . 1020 8 Rights of the moitgagee when the mort- gagor is in occupation of the mortgaged premises . . . 1021 10 When the mortgagor becomes tenant to the mortgagee . .... 1022 12 When the mortgaged premises are in the possession and occupation of lessees ...... 1023 14 Leases by the mortgagor after the mortgage .... 1024 16 Notice of the mortgage to the lessee .... Equity of redemption of the mortgagor . Rights of mortgagees Time within which the right of re- demption may be exercised. 1028 26 1025 18 1026 19 1027 23 PARAGRAPH PAGE 1029 30 . 1030 32 1031 33 1032 33 1033 35 . 1034 36 1035 36 iv CONTENTS. Accounts to be taken Registration of mortgages Re-conveyance of tlie estate . Foreclosure and sale Enlargement of the time of payment Remedies of the mortgagee Powers of sale Tacking of arrears of interest and in- cumbrances .... 1037 39 Priority of incumbrances and mort- gages .... 1037 39 Every priority may be lost by fraud After a decree to settle priorities Mortgage by deposit of title-deeds . . Authentication of the deposit as a charge on realty ..... Parties entitled to make the deposit Extent of the lien ..... Depositary's right to have the estate sold Liens on estates for unpaid purchase-money . Priority of liens ...... Rent-charges on lands and tenements Registration of rent-charges and annuities . Power of distress, entry, and sale . Extinguishment of rent-charges . Registered judgments ..... Warrants o^ axtor i\Qy, cognovits, and orders for judgments. 1053 58 Charges on lands by statute merchant, statute staple, and recognizance . . . 1054 59 Sect. 3. — Mortgage, etc., of chattels. Mortgage of goods and chattels . . . 1055 59 What things pass by the grant of goods and chattels ..... Bills of sale of after-acquired property. Bills of sale by judgment debtors, and parties against whom execution has been issued ..... Registration of bills of sale of chattels. Renewal of registration 1039 42 1040 73 I04I 44 1042 46 1043 44 1044 48 I04S 5° 1046 51 4047 52 1048 54 101^9 55 1050 SS 1051 57 1052 57 1056 62 1057 63 1058 66 1059 66 1059 66 iAGSAPH PAOB 1060 69 1062 70 1063 71 1064 71 1065 72 1066 73 1067 74 1069 75 1070 75 107 1 75 1072 75 CONTENTS. What is a bill of sale of chattels What is an " apparent possession " of personal chattels Requisites of the affidavit Description of the residence and oc- cupation of the grantor Description of the residence and occu- pation of the attesting witness Proof of the time of the making of the bill of sale Effect of registration . Registration of assignments of bills of sale ...... 1068 74 Registration of agreements for bills of sale ...... Priority of holders of bills of sale . Evasion of registration Mortgages void as against creditors Mortgages constituting an act of bank- ruptcy 1073 76 Mortgaged chattels left in the possession and apparent ownership of a bank- rupt mortgagor. .... Mortgage of machinery Pledges of goods and chattels Things which may be given in pledge . Parties entitled to pledge Factors and agents intrusted with goods or documentary evi- dence of title to goods What are documents of title . When documents of title may be said to be intrusted to a factor or agent . 1081 87 What are advances and loans upon deposit within the Factor's Acts . . . 1082 88 Implied warranty of title on the part of the pledgor . . 1083 89 The pledgor's right of redemption . 1084 90 Sale of the pledgor's right of redemption 1085 i 1074 78 1075 80 1076 81 1077 81 1078 81 1079 83 to8o 86 VI CONTENTS. tiCBiKGS,Kva. PAGE Forfeiture of the pledge ... Foreclosure of the right of redemption . Accounts between pledgor and pledgeer Custody and safe keeping of the pledge . Use of things pledged Statutory rights and liabilities of pawn- brokers ...... Who are to be deemed pawnbrokers Sale of things pledged .... Warranties on sales of unredeemed pledges Imperfect hopothecation of goods and chat- tels Licenses to distrain to secure payment of a debt ..... Registration of licenses to seize and sell goods ..... Revocation of the license by act of bankrupcty . . . . Mortgages of ships and of shares in vessels Maritime liens — Bottomry . Of the power of hypothecation of the ship-master .... Lien on vessels causing damage . Priority of maritime liens Hypothecation of cargoes and merchan dise ...... Illegal pledges Mortgages of fixtures .... Right to fixtures as between mortgagor and mortgagee .... Registration of bills of sale of fixtures Sect. 4. — Mortgage, etc., of incorporeals. Mortgages of shares and stock Mortages of shares and stock void by reason of reputed ownership Lien upon shares and stock 1086 1087 1088 1089 1090 1091 1092 1093 1094 1095 1096 1097 1098 1099 1100 IIOI 1102 91 92 96 96 97 99 99 99 103 103 106 107 no III 1103 III 1104 113 1105 113 1106 113 1107 114 1108 116 1109 117 liio 117 CONTENTS. vii CHAPTER V. CONTRACTS OF INDEMNITY. Sect. i. — Principal and surety. paeagraph page The contract of suretyship . . . . iiii 119 Authentication of guarantees. . . . 1 112 120 Primary and secondary liabilities . . 1113 122 Of the statement of the consideration on the face of a guarantee . . 1114 123 Proposals and offers to guarantee not amount- ing to a concluded contract . . iiiS 124 Conditions precedent . . . . 1116 126 Bonds to secure faithful services . . . 1117 126 Extent and duration of the liability of the surety •1118128 Release of the surety .... 1119 129 Discharge of the surety by a change in the service or employment of the principal ..... 1120 130 Bonds and guarantees under seal to part- nerships and associations . . 1121 131 Limitation of the liability of the surety 1122 132 Continuing liabilities . . .1123 133 Guarantees not importing a con- tinuing liability . . . 1124 135 Conditions precedent to the liability of the surety 11 25 136 Duty of the person guaranteed . . 1126 137 Alteration of the principal obligation discharging the surety . . . 1127 138 Extension of the time of payment . 1128 140 Proof of suretyship where the relation does not appear upon the face of the contract . . . .1129 143 Effect of giving time to the principal debtor with reserve of remedies against the surety . . . 1130 146 vin CONTENTS. PARAGRAPH PAGE Release of the principal debt discharging the surety .... Release of the principal obligation with reserve of remedies against the surety Release of one of several co-sureties Payment by the principal debtor operating as a discharge of the surety Fraud on sureties ..... Death of the principal . . . . . Deatli of the surety . . . • . Indemnification of sureties . . . . Contribution between co-sureties Assignments of judgments and securities to the surety to enable him to obtain indemnification ..... Breach of contracts of indemnity Bankruptcyof principal debtor Recovery of interest on money paid by sure- ties ....... Guarantees by one of several partners in the name of the co-partnership Sect. 2. — Marine Insurance. Of contracts of insurance . . . . Mutual insurance ..... Policies of insurance ... Voyage and time policies — Valued and open policies ..... Insurable interest — Wagering and gaming policies of insurance Requisites of the contract .... Matters and things covered by the policy Implied warranties ..... Express warranties ..... Time of sailing ..... Sailing with convoy .... Neutrality . .... Fraudulent misrepresentation Fraudulent concealment Risks covered by the policy .... Deck car:riies 1131 148 [132 1 133 [134 '135 [136 "37 C138 '139 [140 [141 [141 [142 [143 [144 [145 1146 [147 [148 [149 riSo [152 tiS3 tiS4 [156 tiS7 1158 1159 CONTENTS. IX Intermediate voyages Loss by perils of the sea ' Negligence and misconduct of the master or mariners Losses from old age and decay and other causes, not being perils of the sea ... . . Perils of fire and jettison Loss by capture and seizure Restraints and detainments of kings, princes, and people Peril of barratr)' of the master and crew Perils, losses, and misfortunes generally . Commencement of the risk .... Duration and the termina'tion of the risk Arrival at the port of destination — Moor- ing in safety ..... Risks in landing the goods Insurance on profits ..... Freight policies ...... Loss of freight ..... Insurance on passage money .... Deviation from the voyage insured Unreasonable delay. ..... Insurances on voyages to several ports and places ...... Licenses to touch at different ports and places ..... Total loss and abandonment Notice of abandonment . By v^hom notice of abandonment may be given .... Form of notice of abandonment Effect of notice of abandonment Insurance on freight . When the insured may abandon . Constructive losses Unreasonable abandonment . Partial loss. .... General and particular average . PARAGRAPH PAGE . n6o 213, 1161 214. II6I 214 II64 1165 II66 1180 218 220 221 I167 223 II68 225 1169 227 II70 22S II7I 231 II72 233 II73 236 1174 238- 1175 238 II76 240. II77 241 II78 241 II79 244 244 . II8I 245 II82 247 . II82 247 lay 1183 249 . 1184 249 1185 250 . 1186 250 1187 252 . 1188 2SS 1189 257 1190 25S 1191 256 PARAGRAPH fAGB II9I 259 II92 260 II92 260 i "93 263 • 1194 264 "95 265 • 1195 265 X CONTENTS. Policies warranted free from average Insurance on separate bales or packages Average and total losses . Exception of general average losses and stranding of the vessel . Suing and laboring clause Valuation and adjustment of losses Calculation of the value . Standard of value and measure of depre- ciation 1196 267 Liabilities of underwriters vv^ith reference to the amount of their subscrip- tions 1197 267 Signed adjustments .... 1198 270 Right of the insurer to recover compensation v^rhere the loss or damage has been caused by the negligence of a third party Non-inception of the risk Return of the premium . Void policy . .... Return of the premium Sect. 3. — Fire Insurance. Contracts of insurance against peril by fire. 1202 274 Parties entitled to the benefit of the insur- ance ....... 1203 275 Things covered by the policy . . . 1204 276 Warranties ....... 1205 276 Alteration of premises increasing the risk 1206 277 Notice of alterations. .... 1207 279 Misdescription of the insured premises . 1208 279 Fraudulent concealment of circumstances materially affecting the risk . . 12,09 280 Risks covered by the policy. . . . 1210 281 Fires caused by negligence . . . 1211 283 Notice of loss 1212 283 Forfeiture of the policy . . . . .1213 284 Non-payment of premium — Days of grace . 1213 284 Divers insurances on the same property . 1214 286 Insurances by warehousemen and bailees of the goods of their customers . . 1215 286 1199 270 1200 271 1200 272 I20I 273 7201 273 CONTENTS. xi PARAGRAPH PAGB Inability of the insured to sue when he has sustained no damnification . . 1216 287 Right of insurer and insured as against wrong- doers causing the loss . Assignment of fire policies .... Laying out insurance money in re-building Sect. 4. — Life Insurance. Contracts of life insurance .... Contracts with de facto directors. Interest of the assured ..... Warranties — Conditions .... Fraudulent misrepresentation and fraudulent concealment ..... Principal and agent . , . . . Indisputable policies ..... Risks covered by the policies Forfeiture of policies ..... Non-payment of premium — Days of grace . Non-inception of the risk — Return of pre- mium ....... Waiver of forfeiture ..... Assignment of life policies .... Right of the party interested in the policy to recover the assurance money. . 1232 301 Appropriation of the funds of life assurance companies ...... Winding-up of insurance companies. Novations by policy holders .... Insurance against injury by accident . Breach of contracts of insurance — Railway accidents ...... Breach of covenants to injure CHAPTER VI. MERCANTILE INSTRUMENTS. Sect, i.— Bills, Notes, and Checks. Bills of exchange 1239 306 Transfer of bills of exchange . . 1240 307 I2I7 287 I2I8 288 I2I9 288 1220 289 I22I 289 1222 289 1223 292 1224 293 1225 294 1226 29s 1227 295 1228 296 1228 296 1229 297 1230 298 I23I 298 1233 301 1234 302 123s 303 1236 3°3 1237 3°4 1238 305 Xll CONTENTS. Restrictive endorsements . Who is to be deemed a bona-fide holder by endorsement Intermediate infirmities of title . When the holder is bound to prove that he gave value for the bill Fraudulent transfers and endorse- ments .... Accommodation bills Indorsement of bills overdue . Presentment for acceptance proof of the acceptance . Fictitious endorsee .... Liability of the acceptor — Failure of con sideration .... Liability of the drawer and endorser . Giving time for payment . Presentment for payment Non-presentment, when excused Days of grace ..... Notice of dishonor .... What amounts to notice of dishonor Posting the notice . Foreign bill — Protest — Noting. Proof of notice of dishonor . Dispensatioa of notice Transfer by delivery without endorsement Bills taken up supra protest Retiring of bills by acceptors and en dorsers .... Payment and satisfaction Promissory notes ..... Transfer of promissory ROtes Liability of the makers and en- dorsers .... Indorsement of notes overdue Notes payable at a particular place , Days of grace .... Bills and notes for the ppyment of sums under £^\ AGRAPH PAGE I24I 310 1242 3" 1243 315 1244 314 • 1 24s 315 1246 316 . 1247 317 . 1248 318 1249 319 • 1250 319 . I25I 320 1252 321 ■ 1253 322 1254 323 • I2SS 325 1256 326 • 1257 327 1258 329 I2S9 330 1260 331 1261 Zl^ 1262 io^ It 1263 335 1264 335 1265 z?>(> 1266 336 1267 ?,?>(> 1268 339 1269 340 1260 341 1271 341 1272 341 1273 341 PARAGRAPH PAGE 1274 342 ■ 1275 343 1276 343 ■ 1277 344 , 1278 345 1279 345 , 1280 346 1281 347 , 1282 350 CONTENTS. Dividend warrants .... Banker's clieques ..... Presentment of cheques for payment Summary remedy for non-payment of bills, cheques, and notes .... Cancellation of bills and notes Proof of want of consideration . Alterations in a bill or note avoiding the con- tract Immaterial alterations . Loss of bills and notes .... Damages recoverable on the dishonor of bills 1283 350 Damages for not meeting bills at matur- ity .. . . . Parties to bills Trustees, agents, &c. Partners. ...... Trustees or directors of co-partnerships Joint-Stock Companies. Sect. 2. — J^i7/s of Lading and Dock Warrants. Bills of lading Assignment of bills of lading . Dock warrants CHAPTER VII. CONTRACTS OF ASSOCIATION. Sect. i. — Partnership. What constitutes a partnership Participation in profits .... Payment of interest out of profits Joint purchases of goods . . . . Tenancy in common of chattels . Conditions precedent to the formation of a partnership . . . . Specific performance of a contract for a part- nership 1284 351 1285 351 1286 352 1287 353 1288 356 1289 357 1290 359 I29I 359 1292 361 1293 362 1294 363 1295 365 1296 366 1297 367 1298 367 1299 368 PARAGRAPH PAGH . -13°° 369 1301 370 xiv CONTENTS. Of a partnership in profits, but not in the cap- ital stock .... Introduction of new partners Contracts between the firm and one of the partners ..... 1302 370 Contracts between partners individually in their own names .... Distribution of the profits of co-partnership . Action by one partner against another for a balance found to be due on a set- tlement of accounts Action for a share of the profit of a particular joint adventure .... Contributions between parties to the common loss ...... Particular transactions not connected with the general account of profit and loss . . . . Purchases by one partner on behalf of the firm Fraudulent use of the co-partnership name Contracts for partnership induced by fraud Dissolution of partnership .... Distribution of the partnership property and effects ..... Use of the name of the firm after dissolution S EC T . 2 .—'jfoint- Stock Co7npanies. Joint-stock companies ..... General duties of directors .... Liabilities of directors , . . . Amalgamation of companies Injunction to restrain unauthorized contracts 1319 391 The dissolution and winding up of reg- istered joint-stock companies . 1320 393 Parties liable to be made contributories . 1321 397 Calls on contributories constituting specialty debts. . . . 1322 412 Fraudulent representations by direc- ' tors inducing parties to become shareholders .... 1323 412 Limitation of the liability of contri- butories . . • ,. • . 1325 415 1303 371 1304 373 1305 374 1306 374 1307 375 1308 376 1309 377 13 ID 377 131I 377 I312 377 I313 380 I314 381 I3IS 3S1 I316 382 I317 386 1318 3S9 CONTENTS. XV PARAGRAPH PAGB Release of the liability to contribute by a transfer of the shares . . 1326 416 Release from liability to contribute by reason of a forfeiture of shares ..... 1327 420 Extent and duration of the liability of outgoing and incoming share- holders 1328 420 Liabilities of husbands, real and personal representatives, devisees, and as- signees, as contributories. Railw^ay companies ...... Contracts ultra vires .... Powers of the directors .... Applications to parliament for an exten- sion of the powers of the com- pany Void contracts by chairmen of railway companies ..... Money borrowed by directors on railway debentures .... Bonds and loan notes by directors . Contracts in which a director is person- ally interested .... Indemnification of directors Committees of management of projected undertakings .... 1338 430 Contracts for the payment of the pro- jector out of the deposits . . 1339 431 Contribution between joint manag.ers, directors, and provisional com- mitteemen .... 1340 432 Of the rendering of accounts and of the appropriation of the funds . . 1341 433 Contracts between a committee of man- agement and the subscribers and shareholders .... 1342 433 Allotment of shares i343 434 Payment of subscriptions and deposits. 1344 435 Recovery of deposits on the abandonment of tlie undertaking . . . 1345 435 1329 421 1330 424 133° 424 I33I 424 1332 425 1333 426 1334 426 133s 427 1336 428 1337 429 xvi CONTENTS. PARAGRAPH PAGE Misrepresention of committeemen and managers 1346 436 Dissolution of inchoate railway and par- liamentary works companies — Contributories . . . 1347 437 Sect. 3. — Marriage. Contracts in restraint of marriage . Marriage brokerage contracts Bonds and unilateral covenants to marry Contracts of betrothment .... Authentication of the contract Time of performance .... Excuses for non-performance . •Conditional promises of marriage Fraudulent concealment of material cir- cumstances .... Transfer of property by the lady after the promise ..... Accidents and mishaps altering the con- dition of either of the parties . Abandonment of the contract . Breach of promise of marriage Promises of portions and settlements Fraudulent representations of relations to bring about a marriage . Ante-nuptial settlements by women en- gaged to be married . Ante-nuptial settlements by intended hus- band and wife .... Marriage settlements by infants Settlements of after-acquired property. Post-nuptial settlements .... Post-nuptial settlements in fulfillment of an ante-nuptial contract in writ- ing Of the wife's right to a post-nuptial settle- ment ...... Contracts in fraud of settlements and promises of marriage portions. Effect of adultery on marriage settle- ments ...... 1348 440 1349 441 1350 443 1351 446 1352 447 1353 447 1354 448 I3SS 449 1356 449 1357 450 1358 451 1359 451 1360 45 r 1361 452 1362 452 1363 455 1364 456 1365 458 1366 459 1367 460 1368 462 1369 463 1370 463 1371 466 CONTENTS. xvii PARAGRAPH PAGE Costs of marriage settlements . . 1372 466 The marriage contract, its nature and re- quisites ..... 1373 466 Of tlie age of consent .... 1374 467 Presumption of marriage . . . 1375 467 Void marriages 1376 468 Publication of banns and celebration of marriage in a false name . . 1377 469 Marriage by license in a false name . 1378 470 Fraudulent celebration of a sham marri- age 1379 471 Of the husband's rights to the rents and profits of the wife's lands Gifts from the husband to the wife Liability of the husband of a feme covert executrix ...... Release by marriage Deeds of separation Subsequent reconciliation Wife's right of action after separation Effect of a decree for a divorce . Effect of a decree for a judicial separation Dissolution of the coverture by death . The husband's rights by survivorship Recovery by the surviving husband of money and property belonging to his deceased wife Liabilities of the surviving husband The wife's rights by survivorship . Unrecovered choses in action . Gifts to the wife during marriage . Paraphernalia. ..... Liabilities of the surviving wife When the wife is entitled to an indemnity out of the estate of her deceased husband . ' . . . . 1398 49° m. — B 1380 471 I38I 477 1382 477 1383 478 1384 479 1385 480 1386 481 1387 482 1388 482 1389 482 1389 482 1390 484 1392 483 1393 486 1394 488 139s 489 1396 489 1397 490 xvui CONEENTS. CHAPTER VIII. IMPLIED CONTRACTS. PARAGRAPH PACE ■ 1399 49: 1400 492 1401 495 1402 500 1403 500 . 1404 501 Sect. i. — General Principles. Implied contracts .... Implied covenants Implied promises .... Part execution of a special contract Implied contracts of sale Foreign judgments Sect. 2. — Implied Promises in respect of Moitey paid for another. Implied promises in respect of money paid for another. ... . . 1405 602 Money paid by mistake . . 1406 504 Implied request to pay . 1497 504 Sect. 3. — Implied Promises in respect of Money received for the Use of another. Implied promises in respect of money received for the use of another Money paid by mistake Money improper!)^ received and wrong fully detained Money received upon a consideration that has failed Money received under an illegal contract Money received by agents Receipt of foreign money Sect. 4. — Implied Promises in respect of Account s/dti Implied promise in respect of an accoun stated Account stated with trustees Settlement of mutual accounts Mistakes in accounts .... 1408 1406 509 513 1410 513 1411 5'7 I4I2 5"> • I4I3 5-' 1414 5-3 ed. ■ 141S 5:3 1416 526 . 1417 5-7 1418 52S THE LAW OF CONTRACT CHAPTER IV. CONTRACTS OF SECURITY. SECTION I. GENERAL PRINCIPLES. IOI7. The contract of mortgage, founded upon our common law doctrine of conditions, is a contract whereby a debtor grants or conveys an estate or inter- est in land, or transfers goods and chattels to his cred- itor subject to a proviso that, if the debt is dis- charged by a day named, the grant or transfer shall be void, and the debtor shall be again entitled to his lands or his goods, and shall hold them as if the grant or transfer had never been made.' The debtor who ' The form of a pledge has probably always been familiar to every nation, and among the Chinese particularly, a people not apt to borrow customs from other nations, pawn shops are a long established institution. The mortgage is a device of greatest antiquity — perhaps more ancient than any other form of instrument now in use. It is alluded to by .\ehe- miah as in use amid the poverty and distress prevailing among the Jews who had returned from the captivity. See HI. — I 2 L.-IJJ' OF CONTRACT. [Bk. II. Ch. IV. makes the grant or transfer is called the mortgagor, and the creditor to whom it is made, the mortgagee. By a contract of this description the right of prop- Neheniiah v. i, 2, 3, 4, 5, 6, 7 : " And there was a great cry of the people and of their wives, against their brethren the Jews. For there were that said, We, our sons and our daugh- ters are many : therefore we take up corn for them, that we may eat and live. Some also there were that said. We have mortgaged our lands, vineyards, and houses, that we might buy corn, because of the dearth. There were also that said. We have borrowed money for the King's tribute — and that upon our lands and vineyards .... Tlien I consulted with myself and I rebulied the nobles and the rulers, and said unto them, Ye exact usury every one of his brother — and I set a great assembly against them." It seems, by the Jewish law laid down in Deuteronomy, that the Jews were not allowed to take interest from each otiier — but only of Gentiles : " Tliou shalt not lend upon usury to thy brother, usury of money, usury of victuals, usury of anything that is lent upon usury : unto a stranger thou mayest lend upon usury : but unto thv brother thou shalt not lend upon usury : that the Lord thy God may bless thee in all that thou settest tliine liand to in the land whither thou goest to possess it." Dent, xxiii. 19, 20. (It is to be remembered that — until the 37th of Henry VIII., cap. 9, declaring loans at 10 per cent, legal — the word usury must be understood to mean usance, or interest.) From the Jews the custom reached the Greeks and Romans. In Athens, if the land-proprietor borrowed any money on his lands, he was obliged to put up an inscription declaring tlie extent of the mortgage ; and, it seems, that in Attica there were no entailed estates to prevent tlie payment of debts to incautious creditors. Camp. Lee. Poet. And the Roman liypotheca, of the civil law, corresponded very closely with the description of a mortgage in our law, the land being, under tlie hypoiJi- eca, retained by the debtor, and the credit(jr being entitled to his ircfio hypothec aria to obtain possession of the pledge when the debtor was in default, the debtor having his action to regain possession when the debt was paid or satisfied out of the profits, and he might redeem at an}' time before a sale. 4 Kent Com. 136 ; Chapman v. Turner, i Cal. 252. " Si fundum parentes tui ea lage vendiderunt, ut sive ipsi, sive haeredes eorutn emptor! pretruin quandocouque, vel intra certa tempora obtulessent, reslituereratur ; teque pora satis- facara condition! dictae, haeras emptor! non paret, ut con- Sec. I.] GENERAL PRINCIPLES. 3 erty in the thing mortgaged passes to the creditor, sub- ject to be divested by the payment of the debt at the appointed time, {of ■ (a) Ryall v. Rowles, i Ves. senr. 358. tracteo fides servetur actio praescriptis vertis, vel ex vendito tibi dabita ; habitiir ratione eorum, quae post oblatam ex pacto quantitatem ex eo fundo adversarium per venerunt." (So in the Frencli Code, the hypotheque of land, which employs the conveying words, oblige, engage, alien6, afFecte, et hypoth- eque, is equivalent to a mortgage under the laws of Missouri, and is embraced in the provisions of the territorial act of October 20, 1807, concerning mortgages. McNair v. Lott, 25 Miss. 82.) The custom of mortgaging was retained by the Jews, who were the money-lenders ot the Middle Ages. It is said that there were no mortgages of land in England while the feudal tenures existed. Trea. Eq. lib. 3, c. i, s. i.' Although it might have been a rule in the feudal law, that feudalio invitio domino, aut agnatio, non recte subjiciuntur hypoth- ecse ; yet it appears from Craig that, with the concurrence of the lord, the tenant might have aliened, and consequenth- have mortgaged his lands. Feud. lib. 2, tit. 5, s. 5. In the reign of Henry I., mortgages of freehold and inheritance and of terms for years are described by Glanville as existing. They appear to have been adopted from the customary law of Normandy. Grand. Cust. lib. 10, c. 8, s. 20. Vin. Inst. lib. 3, tit. 15. And a feudal lord could always mortgage his lands, as William, Earl of Poictiers, mortgaged his provinces of Guinne and Poictou to William Rufus, King of England. I Hume, Hist. Eng. 270; lb. 80. In the twentieth year of William's reign, and on the completion of the domesday btjok, that king had assembled all the landholders and accepted ' 4 Kent Com. 133 ; and see Richards v. Chace, 2 Gray, 385: "A mortgage is a conditional conveyance of land, designed as a security for the pa3'ment of money, the fulfill- ment of some contract, or the performance of some act, and to be void upon such payment, fulfillment or performance. To constitute a mortgage, it is not necessary that there should be any collateral or personal security for the debt secured by the mortgage. Per Appleton, J., in Mitchell v. Burnham, 44 Me. 286. Smith v. People's Bank, 24 Id. 185. See post, note on the Equity of Redemption. 4 LAW OF CONTRACT. [Bk. II. Ch. IV. In ancient times, lands yielding fruits and profits, and living animals and chattels bearing increase, were conveyed and transferred by debtors to their creditors upon trust to apply the proceeds and profit thereof in liquidation of the debt, and, as soon as the debt was extinguished, to render them back again. This de- scription of pledge was denominated vivum vadium, or a live or living pledge, because it was constantly fructifying and paying off the debt, and working its own redemption. When, on the other hand, the things transferred to the creditor, to be held as security for the dufe payment of the debt, yielded no profits and bore no fruits of increase, or the proceeds and profits thereof were not to be applied in liquidation of the debt, but the things themselves were to be absolutely forfeited and to become the property of the creditor in case of the non-payment of the debt at the appointed time, it was called mortuum vadium, or dead pledge, and hence the derivation of our modern term " mort- gage." {by {b) Beam's Glanville, 252. from them a surrender of their lands, which he re-granted them on performance of homage and an oath of fealty. The mesne lords, on their subinfeudations, also demanded homage iind fealtv, this bond of allegiance being held mutual — each being bound to defend the other — whence flowed the doctrine that the tenant could not transfer his feud without his lord's consent, nor the lord his seignory without his tenant's con- sent, although his tenants, even of the crown, might grant subinfeudations (i. e., to hold of themselves) without licence. Further, it was held that a tenant could not subject his land to his debts by execution of law, for that he might not eff'ect that circuitously which hccould not directl)-. Nor, if the lands came by descent, could he alien them without the con- sent of the next collateral heir, under which restraints mort- gages must have been very rare. ' A Welsh mortgage was one whereunder the mortgagee entered into possession taking rents and profits bv way of in- Sec. I.] GENERAL PRINCIPLES. 5 IOI8. The contract of pledge \s a bailment or de- livery of goods and chattels by one man to another, to be held as a security for the payment of a debt or the performance of some engagement, and upon the ex- press or implied understanding that the thing deposited is to be restored to the owner as soon as the debt is dis- charged, or the engagement has been fulfilled. The thing deposited as a security is called a pawn or pledge ; the party making the deposit, the pawnor or pledgor ; and the person who receives it into his pos- session, the pawnee or pledgee. The contract is to be distinguished from the contract of hypothecation by the transfer of the possession, or the actual tradition or delivery of the thing intended to be charged, to the creditor, {c) and from the contract of mortgage by the absence of a transfer of the ownership or right of prop- erty thereof to the pawnee during the continuance of the trust. A written memorandum of deposit or pledge, therefore, does not require a mortgage stamp ; but it will, in general, require an agreement stamp, (d) (c) Proprie pignus disimus quod ad Dig. lib. 13, tit. 7, lex g, g 2, lex 35, creditorem transit, hypotliecam cum § i. non transit possessio ad craditorem. (cf) Harris v. Birch, 9 M. & W. 594- terest upon the debt until the mortgagor paid the principal ; but these long since fell into disuetude. It carried a right to redeem, but not to foreclose. See Fisher on Mortgages, 7. A " Bristol Bargain " was a bargain for the repayment of debt and interest by installments at the rate of ;^2o per annum for 7 years for every ;!£^ioo advanced, up to which point it was allowed, the legal rate of interest being then 6 per cent. But when it was attempted to increase the number of annual installments to eight, it was declared that the agreement was against conscience, and redemption was decreed on the usual term of paying principal and interest, and it was said by Trevor, M. R., that he thought the court would relieve against an ordinary " Bristol Bargain," by the repayment by install- ments for seven years. Fullthorpe v. Foster, i Vern. 477. 6 LAJV OF CONTRACT. [Bk. II. Ch. IV. If the thing intended to be burdened with the debt or charge remains in the possession, order, and disposi- tion of the owner, there is no pledge. By a pledge, therefore, of goods and chattels the right of possession is altered, but not the right of property. The pawnee, during the continuance of the contract, is the law ful possessor, and has a special property in the chattel as a bailee ; but the general right of property and owner- ship still continue in the pawnor. (^) The distinction between the contract of pledge and the contract of hypothecation, in the Roman law, is thus marked in the Institutes : " By the terra pledge is meant that vvhich has actually been delivered to a creditor, especially if the thing was a movable ; and by the word hypothecation we comprehend what is obliged to a creditor by a mere agreement without any deliveiy." (/) The contract of pledge, like the contract of hypothecation, is accessorial to a principal debt or obligation, or the debtor obligation of a third party. It is in all cases a security for every part of the debt or engagement, so that if a portion is discharged, the pledge remains as a security for the residue. (£■) IOI9. TAe contract of hypothecation, as it existed amongst the Greeks and Romans, was a contract whereby a debtor charged certain specific property or all his property generally with the payment of a certain debt. It derived its name from the Greek word v7iodi]Hi), from vno and ridtadai, to place under an obligation, the property being subjected to a specific charge, No right of property in the thing hypothe cated was, by this contract, transferred to the creditor, nor any right to the possession thereof; but the debt ie) R.itcliff V, Davies, Cvo. Jac. 244. (/) Inst. lib. 4, tit. 6, § 7. Ryall V. Rolle, I Atk. 167. Bac. Abr. ig) Pothier, Xanc. Kos 43, 46. Do- IjAii,.\ie.\t, B. mat, ]iv. 3, tit. i, g i. Sec. I.] GENERAL PRINCIPLES. 7 was tacked on to the property, so that the creditor had a right to follow it through whatever hands it might happen to pass, and attach it, and sell it in satisfac- tion and discharge of the debt. A contract or power of this kind which enabled one man to have the visible ownership, and another a secret power of disposal of property, was liable to great abuse, and afforded a great temptation to fraud ; and this was sought to be guarded against by making the contract public and notorious, so that all persons dealing with hypothecated property might be put upon their guard, and be fur- nished with the means of ascertaining the nature and extent of the charges upon it. {K) Hypothecation by the French law is either legal, judicial, or conven- tional. Under the term " legal hypothecation " are comprehended all such charges and liens upon property as arise by implication and intendment of law. By a judicial hypothecation is meant that description of charge or claim upon property which results from the judgments of the courts of justice and from judicial acts ; and a conventional hypothecation is that which is founded purely upon contract. This last description of hypothecation " can only be consented to by an act passed in authentic form before two notaries, or before one notary and two witnesses." (i) {h) Sir Wm. Jones, Com. Isseus. {i) Cod. Civ. liv. 3, tit. 18, 2127. 8 LAW OF CONTRACT. [Bk. II. Ch. IV. SECTION II. MORTGAGE, ETC., OF REALTY. 1020. Mortgage of lands and tenements. — The owner of an estate or interest in land, who grants or conveys away his interest, may annex whatever condi- tion he pleases to the grant, upon the principle that cujus est dare ejus est disponere ; and, therefore, if he wants to raise money and give security for its repay- ment, he may grant his estate to the lender, annexing to such grant a condition that, if he repays the sum advanced by a day certain, the grant shall be void, and he shall be entitled to re-enter and re-possess the land. When lands or tenements are granted to be holden by the grantee and his heirs and assigns for ever, subject to such a condition, the grant is a mort- gage in fee. When they are granted to be holden for a term of years it is a mortgage for a term of years. In either case the estate granted is a defeasible estate. If the act to be done is performed at the appointed period, the grant or demise is at an end, and the grantor is seized or possessed of his old estate ; if it is not performed, the grantee holds the estate discharged of the condition, and becomes the legal owner of the estate in the property, in accordance with the strict terms of stipulations of the contract. In the first case, the estate is re-vested in the mortgagor by the mere performance of the condition. In the latter, it can not be re-vested in him without a fresh conveyance from the mortgagee. If by the terms of the contract the mortgagor is to remain in possession of the property and receive the rents and profits thereof until the dav Sec. II.] MORTGAGE OF REALTY. 9 of payment, or for any determined period, he becomes tenant to the mortgagee, and there is a demise of the premises for the intervening period. (/)' If, on the other hand, there is no term or stipulation in the con- tract clothing the mortgagor with the right of pos- session until the time of payment has arrived, the mortgagee has the right of possession as well as the right of property the instant the mortgage is executed, and may, when the mortgagor is himself the occupier of the mortgaged property, enter upon and take pos- session of the mortgaged premises, or enforce such right through the medium of an action. <^kf If the mortgaged money is tendered at any period of the day appointed for the payment of it, the condi- tion is saved for ever, the grant is void, and the mort- gagor has a right to re-enter and hold the land of his former estate. (/)' If a lease is assigned by way of mortgage, the mortgagee will be liable, as the.assignee of the term, to all covenants in the original lease run ning with the land, although he never entered or took (j) Wilkinson v. Hall, 3 Bing. N. 553. Doe v. Maisey. 8 B. & C. 767. C. 508 ; 4 Sc. 301. Doe v. Goldwin, Doe v. Giles, 2 Moo. & P. 749. Doe 2 Q B. 143. Partridge v. Bere, i D. v. Day, 2 Q. B. 147. & R. 272 ; 5 B. & Aid, 604. (/) Bac. Abr. Mortgage, 637 ; {k) Rogers v. Grazebrook, 8 Q. B. Condition, 141, 144-146. Co. 895. Doe V. Lightfoot, 8 M. & W. Litt, 218, 2ig. ' See per Cowan, J., in Cameron v. Irwin, 5 Hill, 280. '^ Furbish V. Goodwin, g Fost. 321; Lackey v. Holbrook, II Met. 460; Brown v. Leach, 35 Me. 39; Brown v. Stewart, I Md. Ch. 87; Wales v. Mellen, i Gray, 512 ; Allen v. Parker, 27 Me. 531 ; Taylor v. Wild, 5 Mass. 120 ; Miner v. Stevens, i Cush. 485 ; Smith v. Taylor, 9 Ala. 663 ; Mauloney v. United States, &c., 4 Ala. N. S. 745 ; Harmon v. Short, 8 Sm. & Mar. 433 ; Mclntyre v. Whitfield, 13 Id. 88 ; Hobart v. Sanborn, 13 N. H. 226; Walcopp V. McKinney, 10 Miss. 229; Pickard v. Low, 3 Shepl. 48 ; Coles v. Clark, 3 Cush. 399. ' See Neligh v. Michenor, 3 Stockt. 539. lo LAIJ' OF CONTRACT. [Bk. II. Ch. IV. actual possession of theestate. (m) The existence of the mortgage does not deprive the mortgagee of his remedies as a creditor against the mortgagor person- ally for the recovery of the debt secured by the mort- gage. If, therefore, the mortgage-deed contains no covenant for the repayment of the money advanced, an action for money lent will lie. (;z) The delivery up of the mortgage-deed will not of itself cancel the mortgage debt, (o) '■ 1 02 1. RtgJits of tJie mortgagee when the mort- gagor is in occupation of the mortgaged premises. — The courts will not infer, from the mere insertion in the mortgage-deed of a covenant on the part of the mortgagor that it shall be lawful for the mortgagee, after default made in payment of the debt at the time {in) William v. Bosanquet, I B. & But see Painter v. Abel, g Jur. N. S. B. 233. 949, 950. (;;) Yatei v. Aston, 4 Q. 1! 1S2. (p) Hurst v. Beach, 5 Mad. 351. Mathew v, Blackmore, I H, & N. 762. ' At common law a distinction was made between a mort- gage made to secure a sum of money as a mere gift, and one iiiide to secure a previous debt; in the former case a tender \vithin the time discharged the estate and gave the mortgagor a riglit of entry, and tlie mortgagee having no further lien iip^Mi the land, nor any personal right of action, was left witlr- out remedy for his money. But in the latter case, though such tender discharged the land, yet the debt remained, and might be recovered b}' action; for it was a duty distinct from the condition, and therefore not lost by the lender and refusal, Hilliard on Mortgages, ii, 20, And see Swett v, Horn, I N. H. 332 ; Darling v. Chapman, 14 ^lass. 104 ; Hill V, Robertson, 24 Miss, 368; Merritt v. Lambert, 7 Paige, 344; King V. Slate, 7 Cash, 7 ; Blanchard v. Kenton, 4 Bibb, 451, If a place be mentioned it must be duly observed. Hilliard on M(jrtgages, i. 23. Upon the ground that a suit to fore- close a mortgage is to be regarded as a suit for money due thereupon, it was held in Powers v. Powers, 11 Vt, 262, that a tender, as in all other cases of indebtedness, was a good defense. Sec. II.J MORTGAGE OF REALTY. ii appointed, or after giving '' one month's notice," to enter upon the mortgaged lands, any covenant on the part of the mortgagee that it shall be lawful for the mortgagor to retain possession until default made ; and such a covenant does not, consequently, prevent the mortgagee from entering immediately after the ex- ecution of the mortgage ; (/>) but, if, from the mutual covenants of the parties and the general context of the deed, it appears to have been plainly intended that the mortgagor shall have possession until default, the courts will give effect to such intention, {q) When- ever the mortgagor is merely permitted to occupy the mortgaged premises, or to receive the rents and profits thereof, without being expressly clothed with the right of possession, he possesses the premises at sufferance in the strictest sense; and, therefore, no notice is ever given him to quit, and he is not even entitled to reap the crop he has sown. So far as regards the posses- sion of the land, he is not even tenant at will to the mortgagee ; but he receives the profits of the land for his own use, and not as an agent or bailiflFof the mort- easree ; and, when he has once received them, he is entitled to keep them as his own. If, by the mort- gage-deed, power is given to the mortgagee to enter upon the premises and distrain for interest in arrear in like manner as for rent reserved on a lease, the exer- cise of the power is no recognition of the mortgagor as tenant or lessee, and does not preclude the mort- gagee from bringing an action of ejectment without demand of possession or notice to quit, (r) A power of distress of this sort, being a mere personal license (/) Doev. Lightfoot, S M.& W. 564. (?) Wheeler v. Montefiore, 2 Q. B. Doe V. Day, 2 Q. B. 147. Rogers v. 142. Grazebrook, 8 Q B. 895. ('-) Doe v. Goodier, i6 L. J., Q. B. 435- 12 LAW OF CONTRACT. [Bk. II. Ch. IV- to enter and distrain, is not assignable over, (s) But if a tenancy is created, the power is annexed to the tenancy, and goes with the reversion. (/) * 1022. JVhen the -mortgagor becomes tenant to the -mortgagee. — If the mortgage-deed contains a clause whereby the mortgagor attorns and becomes tenant to the mortgagee at a specified annual rent payable half-yearly so long as the mortgage-money remains secured upon the mortgaged premises, and the mort- gagor continues in the occupation of the mortgaged premises and pays rent, the subsequent occupation taken in connection with the clause of attornment con- stitutes the relation of landlord and tenant between the parties, and the mortgagee may distrain for the rent, although he never himself executed the mort- gage-deed, itt) ' When the mortgage-deed contains a clause of this description, a right of entry should be reserved in default of payment of the rent, so as to enable the mortgagee, in case the rent remains un- paid, to enter upon the lands or bring an action of ejectment, without giving a notice to quit, {x) If by (s) Brown v. Metropolitan Counties Morton v. Woods, L, R., 3 Q. B. 658. Life Assurance Company, 23 L. J., Q. lb., 4 Q. B. 302 ; 37 L. J., Q. B. 242 ; B. 236. 38 lb. 81. (;) Jolly V Arbutlmot, 28 L. J., CIi. (x) Doe v. Tom, 4 Q. B. 615. 547. Metropolitan Counties Assurance Cw. («) West V. Fritche, 3 Exch. 216. v. Brown, 4 H. & N. 434 ; 28 L. J. Ex. 340. ' " Whether mere notice to tenants by a mortgagee to pay rent to him, or any other act short of an actual or con- structive entry, will defeat the right of the mortgagor to take the rents and profits to his own use, may be a question." Field V. Swan, 10 iSIet. 114. And see Smith v. Shepard, 15 Pick. 147. And a mortgagor may recover the rents from one who has received them wrongfully, the mortgagee having made no claim to them, although the law-day be past Branch Bank, &c., v. Fr)-, 23 Ala. 770. See Watts v. Coffin, 11 Johns. 495 ; McKircher v. Hawley, 16 Johns. 292. '' See cases cited in note i, p. 14. Sec. II.] MORTGAGE OF REALTY. 13 the terms of the mortgage-deed the mortgagor is to hold possession for any certain or determined period, there will then be a demise to him of the mortgaged estate for the term specified. If he is to hold until the happening of some uncertain event, he will have a conditional estate, and will be tenant to the mortgagee until the event has happened. If the mortgage-deed contains a clause of attornment, or creates a tenancy as between the mortgagor and mortgagee, but does not create any definite or certain term of holding, the mortgagor will be tenant at will. The reservation of a yearly rent is not inconsistent with a tenancy at will. Therefore, a clause in a mortgage-deed that the mortgagor shall become tenant to the mortgagee at a yearly rent does not necessarily create a yearly ten- ancy, {y) If by the mortgage-deed it is covenanted or agreed that the mortgagor shall hold as tenant at will to the mortgagee at an annual rent recoverable by distress, and the mortgagor demises the premises to a third party, the tenancy at will is not deter- mined, and the mortgagee is not deprived of his right to distrain, {z) Where it was provided that, in case of default in payment, the mortgagor shall hold the premises as yearly tena'nt to the mortgagees from the date of the deed at a specified rent, and that they should have the same remedies for recovering the rent as if the same had been reserved upon a common lease, and the mortgagor, having made default, the mort- gagees, after the lapse of more than a year from the default, distrained as for a year's rent in arrear, it was held that, not having given him any notice of their in- (j) Doe V. Davies, 7 Exch. 89; 21 22 L. J., Ex. 266. Brown v. Metro- L. J., Ex. 60. Doe V. Goldwin, 2 Q. politan Counties Assurance Co., 28 B. 143. L.J., Q. B., 236. iz) Pinhorn v. Souster, 8 Exch. 763 ; 14 LAW OF CONTRACT. [Bk II. Ch. IV. tention to treat him as tenant, they were not entitled to distrain, (a) ' 1023. When the mortgaged premises are in the possession and occupation of lessees or tenants holding under leases granted by the mortgagor prior to the making of the mortgage, the mortgagee, of course, takes the mortgaged premises subject to those leases. The mortgage in such a case operates as a grant of the reversion, and with it of the rent ; and the mort- gagee is entitled, as assignee of the reversion, to the rent reserved on such leases, after he has given the lessees notice of the mortgage, and required them to pay their rents to him. Though attornment is no longer necessary to perfect the title of a mortgagee of the reversion of the rent reserved on the demise, yet notice of the grant or mortgage must be given to the tenants to enable the mortgagee to maintain an ac- tion against them for use and occupation, or to dis- train for arrears of rent. ((5) When there is no clause {a) Clowes v. Hughes, L. R., 5 Ex. Moss v. Gullimore, i Doug. 279 ; i 160 ; 39 L. J., Ex. 62. Smith's L. C. 543. Lumley v. Hodg- (*) 4 & 5 Ann., u. 16, §§ g, 10. son, 16 East, 99. ' See Melody v. Chandler, 3 Fairf. 284, 2S5 ; Welch v, Whit- temore, 25 >Ie. 86. " As between morto-agee and mortgagor, no estoppel of landlord and tenant exists against the latter. The mortgagee is rather the landlord, the mortgagor being in strict law considered as a quasi tenant at will." Cow,\n, J., Cameron v. Irwin, 5 Hill, 380; and see Hilliard on Mort- gages, ch. ix. SS3>S'7! 11,45; Greenleaf's Cruise, 140 n; Bacon V. Mclntire, Met. 87. Although, in a loose sense, a mort- g.-igce in possession is said to be tenant at will of the mort- gagor, yet he is not so within the reason of the letter of the Massachusetts Revised Statutes, 104, § 2. He is not a lessee or holding under a lessee, or holding demised premises without right after the determination of the lease. The remedies of a mortgagee are entirely of a different character, clearly marked out by law. Hastings v. Pratt, 8 Cush. i2i-i;3. Sec. II.] MORTGAGE OF REALTY. 15 in the mortgage-deed giving to the mortgagor a right to the possession of the mortgaged premises, and cre- ating a tenancy between the mortgagor and mort- gagee, the mortgagee has a right to all the rents which have become due subsequently to the making of his mortgage, and which are unpaid at the time the occupying tenant from whom such rent is due receives notice of the mortgage. The tenant is not bound to pay the mortgagee without notice ; and, if, at the time he receives notice, he has paid the rent to the mort- gagor, it is a good excuse for him ; (t) but payment of the rent to the mortgagor before it is due is no aiisvver to a claim by the mortgagee for rent which has accrued due after the giving of the notice, (^d) When lands in the possession of tenants holding under- leases have been mortgaged, the mortgagee, as assignee of the reversion, may sue on any of the covenants which are annexed to the reversion and run with the land ; and he is also liable to be sued thereon. Hence it followed that, whenever a man had demised to a tenant at a rent, and then had mortgaged his rever- sion, the mortgagor could not bring an action of eject- ment, nor an action for the rent in his own name, nor sue upon any covenants running with the land, whether the mortgagee had or had not given notice of the mortgage, for the tenant might avail himself of the defence that the lessor had assigned all his estate and interest in the demised premises, (r) But, by the Supreme Court of Judicature Act, (/) " a mortgagor entitled for the time being to the possession or receipt of the rents and profits of any land as to which no (c) Buller, J., Birch v. Wright, i T. 1065. Jlountnoy v. Collier, i Ell. & R. 384, 385. Bl. 636. {d) Cook V. Giierra, L. R , 7 C. P. (/) 36 & 37 Vict. c. 66, § 25 (5) 132 ; 41 L. J., C. P. 89. This Act is not to come into ojierji (c) Doe V. Edwards, 5 B. & Ad. tion until the ) st of Nov., J875. i6 LAW OF CONTRACT. I'Qi^. II. Qn.W. notice of his intention to take possession, or to enter into the receipts of the rents and profits thereof, shall have been given by the mortgagee, may sue for such possession, or for the recovery of such rents or profits, or to prevent or recover damages in respect of any trespass or other wrong relative thereto in his own name only, unless the cause of action arises upon a lease or other contract made by him jointly with any other person." And if the mortgagee does not give notice to the tenant to pay the rent to himself, but permits the mortgagor to go on receiving the rent as before the mortgage was made, and does not think fit to interfere with the tenancy, the mortgagor is deemed in law to have authority from the mortgagee to dis- train for the rent if it falls into arrear, the rent being the obvious and natural source for the mortgagor to obtain funds to enable him to pay the interest of the mortgage debt. He mav distrain in the mortgagee's name as the mortgagee's bailiff; and if he distrains in his own name, he may justify in the name of the mort- gagee, {g) 1024. Leases by tJie mortgagor after the making of the mortgage. — If no right of possession is reserved by the mortgage-deed to the mortgagor, and no ten- ancy is created between him and the mortgagee, and the mortgagor remains in the possession on sufiFerance after the making of the mortgage, and demises the mortgaged land to a tenant at a rent, the demise is absolutely void as against the mortgagee, but it is nevertheless valid, by estoppel, as between the mort- gagor and his tenant until the mortgagee interferes, and the mortgagor is entitled to receive the rent for his own use, and to distrain for it in his own name, if [g) Trent v. Hunt, 9 Exch. 14; 22 L. J., Ex.320. Snell v. Finch, 9 Jur. N. S. 333. Sec. II.j MORTGAGE OF REALTY. i-j it is not paid when due, so that a tenant who has come in under the mortgagor after the mortgage, and has neither paid rent to the mortgagee, nor been evicted by him, either actually or constructively, before the day of payment, can not defend an action by the mort- gagor for that rent. Mere notice by the mortgagee to the tenant to pay the rent to the mortgagee is not an attornment to the latter, and is, without actual pay- ment, no answer to the claim for rent. (Ji) And if the mortgagor assigns his interest, such as it is, his assignee has the same title by estoppel against the lessee, and, as assignee of the reversion by estoppel, may sue the tenant for waste in breach of the cove- nants in the lease, (z) As between himself and the tenant, the mortgagor may exercise all the ordinary rights of a landlord, unless the mortgagee interferes to prevent him ; for the lessee can not deny the title of his lessor at the time of granting the lease. (/§) But the tenant who comes in under such a demise may be treated by the mortgagee as a trespasser, and may be ejected without any notice to quit, (/) unless the mortgagee is a party to, or has authorized the making of, the lease ; or he may be converted into a tenant to the mortgagee by continuing to occupy the mortgaged premises by the sufferance and permission of the mortgagee, after he has received notice of the mortgage. The mortgagee, can not, by giving notice to the tenant, entitle himself to distrain for the rent that the tenant has contracted to pay to the mort- gagor ; nor can he sue for any arrears of such rent, {in) (K) Hickman v. Machin, 4 H. & N. (/) Keech v. Hall, i Doug. 21 720; 28 L. J., Ex. 310. Thundery. Belcher, 3 East, 449. {i) Cuthbertson v. Irving, 29 L. J., (in) Rogers v. Humphreys, 4 Ad. & Ex. 485 ; 6 H. & N. 135. E. 299. Wilton v. Dunn, 21 L. J., Q. (/•) Wheeler v. Branscombe, 5 Q. B. B. 63. Turner v. Cameron's Coal, ^73. Wilton .. Dunn, 17 Q. B. 294. &c., 5 Exch. 932. t8 LJW of contract. [Bk. II. Ch. IV But, if there is a clause in the mortgage-deed creating a tenancy as between himself and the mort- gagor at a specified rent, he may, of course, distrain on the mortgaged premises for that rent. And, if rent is due on a demise from the mortgagee to the mortgagor after the making of the mortgage, and the mortgagee threatens to distrain for such rent, or to evict the tenant, and the latter pays the rent to avoid the threatened distress or eviction, such payment is a good payment as against the mortgagor, on the ground that the tenant has been compelled to pay for the mortgagor what the mortgagor ought himself to have paid, {iif 1025. Notice of the mortgage to the lessee creates a new tenancy between the tenant and the mortgagee, and enables the latter to sue for a reasonable satisfac- tion for the use and occupation of the property bv the tenant subsequent to the receipt by him of the notice. ((?) If the mortgagee gives the tenant notice to pay (k) Johnson v. Jones, 9 Ad. & E. {0) Waddilove v. Barnett, 2 Bing., N. 8og. ilayor of Poole v. Whitt, 15 M. C. 543. Carpenter v. Parker, 3 C. B., & W. 577. N. S. 237 ; 27 L. J., C. P. 78. ' If a mortgagor lease for years, the lessee may redeem. Bacon v. Bowdoin, 22 Pick. 401 ; Haven v. Adams, 4 Allen, 80 ; McCall v. Lennox, 7 S. and R. 308 ; Hutchinson v. Bearing, 20 Ala. 798 ; and Barelli v. Schymanski, 14 La. Ann., 47. Upon the ground that a mortgagor has no right to make a lease ot the mortgaged premises wliich will be binding upon the mort- gagee, there will be no privity between such tenant and a purchaser at the foreclosure sale. The purchaser will acquire a good title although the tenant is not made a pariv tn the decree. McDermott v. Burke, 16 Cal. 510. If a mortgagor has, after condition broken, taken from the mortgagee a lease for years, conveying to a third person during sucli tenancy, the mortgagee may still consider him, at the end of his term, to be in possession as mortgagor and not as tenant from year to year, and evict him at any time without notice. Stedman v. Gassett, i8 Vt. 346. Sec. II.] MORTGAGE OF REALTY. 19 his rent to him, and the tenant continues in posses- sion after the receipt of the notice, he will be deemed to hold as tenant at will to the mortgagee at the rent reserved in the lease ; but, as soon as rent has been paid to and accepted by the mortgagee, the tenancy will be converted into a yearly tenancy. (Jn) A mort- gagee who gives notice of the mortgage to a tenant let into possession by the mortgagor subsequently to the making of the mortgage, can not maintain an ac- tion for mesne profits in respect of the occupation of the land by such tenant prior to the receipt of the notice ; for the doctrine of relation applies only as be- tween disseisor and disseisee, and an estate which was lawful at its commencement can not be made tortious hy a subsequent act. (^) Neither can the mortgagee maintain an action against such tenant for the re- covery of any satisfaction in respect of the use and oc- cupation of the mortgaged property prior to the re- ceipt of the notice ; for there is no contract between the mortgagee and the tenant before notice of the mortgage, (r) 1026. Equity of redemption of the mortgagor. — Equity, looking at the substance and not at the form of the contract of mortgage, regards it as a mere pledge of land to secure the payment of a debt, and will not, consequently, suffer the land to be forfeited, by reason, of the non-payment of the mortgage debt at the exact time or place or in the particular mode specified. The mortgagor is considered to be the owner of the equitable estate, and to be entitled to re- deem the estate on payment of the mortgage debt and interest, until his right of redemption has been barred (p) Doe V. Bucknell, 8 C. & P. 566. 944. Buller, J., i T, R. 382. Brown v. Storey, i Sc. N. R. 16. (r) Turner v. Cameron's Coal, &c., (^) Litchfield v. Ready, 5 Exch, 5 Exch. 932. 20 LAJV OF CONTRACT. [Rk. II. Ch. IV. by a decree of foreclosure. The equitable interest in the land is denominated " the equity of redemption," and is, in truth, the mortgagor's old estate, unaffected in equity by the legal forfeiture, but encumbered with the lien of the pledgee. There may be a seizin of it just the same as of any other estate. It may be de- vised, granted, mortgaged, or entailed with remain- ders ; {s') and it will follow the same line of descent as the land itself would have followed if no mortgage had been made. Thus, if the mortgaged land be of gravel-kind tenure, the equity of redemption will be divisible amongst the heirs of the mortgagor ; if, on the other hand, the tenure be Borough-English, the equity of redemption will descend to the youngest son. (/) Equity treats every contract as a pledge, which is, in principle and effect, a pledge, whatever name the parties may choose to give to the transaction, and whatever may be the disguises resorted to for conceal- ing the real nature of the co'ntract. Therefore, if an estate is conveyed in consideration of a sum of money, and the conveyance appears upon the face of it to be an absolute sale and conveyance, but is accompanied by a contemporaneous deed, whereby the grantee cov- enants to re-convey the property to the grantor by a day named, on repayment of the consideration-money -and the expenses of the conveyance, the transaction will be treated as a pledge of land to secure payment of a debt, and the grantor will be admitted to redeem long after the time appointed for the re-conveyance has elapsed. (?;) But, if the parties intended an abso- (s) Casbornev. Scarfe, 1 Atk. 605. {xi) Williams v. Owen, 10 Sim, 386. {{) Fawceti v. Lowther, 2 Vci. sen. Sevier v. Greenway, 19 Ves. 413. 303. Dixon V. SaviUe, i Bro. C. C. Manlove v. Bale, 2 Vein. 84. 326. Sec. 1 1 .] MOR TGA GE OF RE A L T Y. 2 1 lute sale, a contemporaneous agreement for a re-pur- chase, not acted upon, will not, of itself, entitle the vendor to treat the transaction as a pledge, and to re- deem. " The question always is, was the original transaction a boni fide sale, with a contract for a re- purchase ; or was it a mortgage under the form of a sale ?" (x) Whenever a transfer of property has been made to trustees upon trusts which are, in principle and effect, to secure, by sale or other means, the repay- ment of money advanced, the transfer will be deemed a pledge and the right of redemption will exist ; and a contract which is once a pledge will be always so, until the right of redemption has been extinguished by foreclosure or by the statute of limitations, or has been released by a bona fide contract made subse- quently to the mortgage, {y) The mortgagor's right to redeem can not be clogged or extinguished by any collateral agreement entered into contemporaneously with the mortgage. If, therefore, the mortgagee enters into a contract with the mortgagor at the time of the loan of the money, for the absolute purchase of the lands for a specific sum in case of default made in payment of the pur- chase-money at an appointed time, the contract will be set aside as being oppressive to the debtor, who is rarely prepared to discharge the debt at the exact time appointed. {2) But an agreement to give the mort- gagee a preference of pre-emption in case of sale is valid, and will be enforced ; {a) and a bona fide pur- chase of the equity of redemption effected subse- quently to the mortgage, will be upheld, {b) When- {x) Williams V. Owen, 5 Myl- & Cr. (2) Price v. Perrie, 2 Freem. 258. 303. Barrel v. Sabine, i Vern, 268. Jennings v. Ward, 2 Verii. 520. {y) Jason v. Eyres, 2 Oh. C. 33- («) Orby v. Trigg, 2 Eq. Ca. Abr Bell V. Carter, 22 L. J., Ch. 933. 599- (*) 15 Vin. Abr. 468, pi. S. 22 LAJV OF CONTRACT. [Bk. II. Ch. IV. ever a covenant is made by the mortgagor for further assurance, the latter can only be- called upon to con- firm the mortgage, (c) If an express clause of redemp- tion is inserted in a mortgage-deed, this is not a power of revocation, or a condition, &c., for the benefit of the grantor, within the meaning of the Mortmain Acts, (d) ' (c) Atkyns v. Uton, I Lord Raym. (tfj Doe v. Hawkins, 2 Q. B. 212. 36. ' The right of equitable redemption is a mere incorporeal heraditament (see Wallington v. Gale, 13 Mass. 483) ; and its history is given in Hilliard on Mortgages, ch. i, § 39, as fol- lows : " Although the legal estate is absolute, yet courts of equity, after their jurisdiction became well established in England, without any legislative enactment, thought that conscience and equity required them to break in upon the common law, and to grant relief by permitting the mortgagor at any reasonable time to redeem. . . Chancery viewed the condition of a mortgage as a penaltj' or forfeiture against which equity ought to relieve, even though the deed expressly declared that unless the debt were paid by a certain day, the estate of the mortgagee should be absolute." Citing 2 Greenl's Cruise, 78; Chapman v. Turner, r Cal, 252 ; Sampson v. Patti- son, I Hare, 536 ; 4 Kent's Com. 158; Parsons v. Welles, 17 Mass. 423. " In the fourteenth year of Richard II.," says Lord Hale, in Roscarrick v. Barton (i Ch. Cas. 219), " Parliament would not admit of an equity of redemption." Of the history of the principle in Massachusetts, said Story, J., in Gray v. Jenks (3 Mass. 522): " It does not appear that before the provincial charter of Massachusetts, in 1692, there was any remedy at law for the mortgagor after breach of the condition ; at least I have not been able to trace any in the colonial ordinances. Immedi- ately after that charter, provision was made for the erection of :i high court of chancery by the Act of 4 W. & M. ch. 5, and again, in a more complete form, by the Act of 5 W. & M. ch. 26, These statutes would lia\e afforded the means of effectual relief, but the equity jurisdiction, not being relished in the province, these statutes soon fell, and every subsequent effort to establish a general court of chancery has proved abortive. The Provincial act of 9 Will. ch. 40, § 3, directed that upon sat- isfaction and payment of the mortgage, the mortgagee should, at the request of the mortgagor, cause such satisfaction and Sec. II.] MORTGAGE OF REALTY. 23 1027. Rights of mortgagees. — Viewing the con- tract always as a pledge, equity recognizes the mort- gagee's right, as pledgee, to the possession of the mort- payment to be entered in the margin of the record of such mortgage in the register's office, and sign the same, which should ' for ever tliereafter discbarge, defeat, and release such mortgage, and perpetually bar all actions to be brought there- upon in any court of record,' and in case of the refusal of the mortgagee to make and sign such acknowledgment or other- wise discharge the mortgage and release the estate, the statute gave an action against the mortgagee for all damages for want of such discharge or release. The Act 10 W. 3, ch. 58, further provided that in real actions upon mortgage, the judgment should be conditional that the mortgagor, his heirs, &c., should pay the mortgagee, &c., such sum as the court should deter- mine to be justly due therefor, within two months' time after judgment for discharging the mortgage, or that the plaintiff should recover possession of the estate sued for, and execution be awarded for the same ; and it was further provided that when the mortgagee had entered into possession of the estate, the mortgagor should, upon tender of the money due, have a right to redeem the same at any time within thiee years after such entry, and that a bill in equity should lie in the courts of law for this purpose. These enactments continued in force until after the Revolution, and are substantially incorporated into the existing statutes of Massachusetts on the subject of mortgages." Alluding to the doctrine of equity of redemption. Chancellor Kent says : " The case of mortgages is one of the most splendid instances in the history of our jurisprudence of the triumph of equitable principles over technical rules, and of the homage which those principles have received by their adoption in the courts of law." A distinction is to be observed between the mortgagor's right to redeem before, and his right to redeem after, forfeiture, the first is a legal ; the second is the purely equitable, right, and is alone correctly spoken of as the equity of redemption. State v. Laval, 4 McCord, 340 ; see Rev. Stats, of N. C. 266;Thomp. Dig. 355. Definitions of the equity of redemption are numerous, and as all assist in throwing light upon its nature, a few of them are subjoined. It has been said that an equity is an estate, see PauUing v. Barron, 32 Ala. 9; Buchanan v. Munroe, 22 Tex. 537 ; Bar- elli V. Schymanski, 14 La. Ann. 47 ; a trusteeship in the mort- gagee for the mortgagor; see Briggs v. Davis, 20 N. V. 15; 24 LAW OF CONTRACT. [Bk. II. Ck. IV. gaged estate, and will not interfere with any proceed- ings that may be taken by him to obtain possession of the mortgaged premises ; but it will not suffer him, Smith V. Ole}-, 26 Miss. 296 ; Silvester v. Jarman, 10 Brice, 84 ; Coates \. Woodworth, 13 111. 654; Charles v. Clagett, 3 Md. 82; Bloomer v. Van Rensselaer, 15 111. 503; King v. Mer- chants, &c., I Seld. 547 ; Morgan v. ^Morgan, 10 Geo. 297 ; Little V. Brown, 2 Leigh, 353 ; Bell v. Hammond, Id. 416 ; a title in equity; Hilliard on M. ch. xv. § 4; Viscount v. Morris, 3 Hare, 402 ; " A well-defined interest in land having many of the attri- butes of general ownership;" David, J., Pell v. Allmar, 18 N. Y. 139 ; it seems that it is not a chose in action ; see Elli- thorp V. Dewing, i Chipm. 143. The mortgagor's right to redeem never depends upon the possession of the land, but he may file his bill to redeem as well if he have the possession himself as if the mortgagee possesses it. Wood v. Jones, Meigs, 516. Everyone interested in the estate or coming in as priv)- in estate with the mortgagor, may redeem, and redemption will be decreed according to the priority of the claimants. Moore V. Beasom, 44 N. H. 215. One who possesses any legal or equitable interest in land by operation of law or otherwise in privity of title with the mortgagor, may redeem ; but he must have an interest derived mediately or immediately from, through, or in the right of the mortgagor, so as to constitute him the owner of part of the mortgagor's original equity, otherwise it can not be affected by the mortgage, and needs no redemption. Smith v. Austin, 9 Mich. 465 ; see Elliott v. Patton, 4 Yerg. 10; Frink v. Murphy, 21 Cal. 108; Watts v. White, 12 Iowa, 230. One having an equitable lien may re- deem, as, e. g., a widow claiming a settlement for life under marriage articles; Hilliard on M., ch. xv,, § 16; the one having the legal title ; Id. ; Dexter v. Arnold, 1 Sumn. in; and see Wells v. Morse, 11 Vt. 17 ; Crafts v. Crafts, 13 Gray, 363 ; Bogert v. Coburn, 27 Barb. 233. A judgment creditor may redeem lands sold under a decree of foreclosure before the sale is confirmed, when the purchaser has paid the price and received a deed from the register. Jones v. Burden, 20 Ala. 382. Where land is sold under a mortgage or deed of trust, the mortgagor's right to redeem within two years under the stat- ute is a mere equitable right, which can only be enforced in a court (jf equity; the mere tender of the amount required by law does not re-invest the legal title. Smith v. Anders, 2: Id. 292. The assignee of a subsequent mortgage — the grantee of Sec. 11. ] MORTGAGE OF REALTY. 25 whilst in possession, to enter into any contract incon- sistent with his limited interest as pledgee, or which will in anywise prejudice or interfere with the mort- gagor's right of redemption. The mortgagee can not, consequently, before a decree of foreclosure has been pronounced, grant a lease, so as to bind the mort- gagor, without the consent of the latter, except under an apparent necessity, and for the purpose of avoiding an apparent loss ; () Until the mortgagee is actually paid off by his own consent, or by decree of the court, he retains the character of mortgagee, with all the rights incident thereto, and may therefore claim a foreclosure, not- withstanding a notice by the mortgagor to pay off the mortgage, and even notwithstanding a decree for redemption. (^) Before a decree for foreclosure can be obtained, all parties entitled to the mortgage -money must be brought before the court, and be made parties to the proceedings. (/') When a mortgage is paid off", the mortgagee becomes a trustee of the title-deeds, for the mortgagor, and is answerable to the latter for the loss of the deeds, (s) A decree for foreclosing the right of redemption of an infant must give the infant a day to show cause against the decree after he attains twenty-one. (/) Although it has been said that a foreclosure only seeks the exclusion of an equity, yet it is, in substance, a suit for the recovery of money. The statute of limitations, therefore, may be (/) 15 & 16 Vict, c. 86, s. 48. Jen- (r) Palmer v. Carlisle (Earl of), I kinv. Row, 5 De G. & S. 107. 7 Geo. Sim. & Stu. 423. 2, ,,. 20. Liishington v. Price, 9 Sim. (s) Brown v. Sewell, 22 L. J., Ch. 651. 1063. Hornby v. Matcham, 16 Sim. (y) Grugeon v. Gerrard, 4 Y. &C. 327. 1 19. (t) Price V. Carver, 3 Mylne & <" 157. Sec. II.] MORTGAGE OF REALTY. 35 pleaded to a claim of foreclosure, {ti) If, after a claim for foreclosure has been brought by a mortga- gee in possession praying a sale, it is found that the rents and profits received by him were sufficient to satisfy the mortgage-debt, and that nothing was due to the mortgagee at the commencement of the action, he will be ordered to pay all the costs, including those of the reference and the taking of the accounts ; {x) and, if the mortgagee, after the commencement of his action, assigns over his mortgage, he will have to pay all the costs thereby rendered necessary to bring his assignee before the court, (jk) The court may direct a sale instead of a foreclosure, under the 15 & 16 Vict, c. 86, s. 48, without the consent of the mortgagor. 1033. Enlargement of the time for payment. — ■ The time appointed by the decree for payment of the mortgage-debt will be enlarged by the court, even after the decree has been made, and the mortgagee has been in possession for many years under it, if any fair and reasonable ground can be shown for the pro- ceeding ; and unfair conduct in obtaining the decree will itself open the decree, {a) When the time for payment is enlarged, all subsequent interest will be com- puted on the aggregate sum found due for principal, in- terest, and costs, {b) If the mortgagee has received rents between the date of the master's report and the day appointed for the payment, the court will refer the («) Dearman v. Wyche, 9 Sim. 370. gages and foreclosure by claim, see But see Lord St, Leonards' Practical Smeathmanv. Bray, 15 Jur. 1051. Treatise on the New Statutes relating (z) Newmanv. Selfe, 33 Beav. 522 ; to Property, 2iid ed. p. 139, s. 51. 33 L. J., Ch. 527. (x) Binnington v. Harwood, I Turn. (a) Eyre v. Hanson, 2 Beav. 47S. & Russ. 477. Jones v. Creswicke, 9 Sim. 304. (j) Bariy v. Wrey, 3 Russ. 465. Cocker v. Bevis, i Ch. C. 61. As to foreclosure of separate mort- {It) Bruere v. Wharton, 7 Sim. 483. 2)6 LAW OF CONTRACT. [Bk. II. Ci-i. IV. report back to the master to continue the accounts and appoint a new day for payment. ('. Hardy, 9 Beav. 3S2. 349. Burnell v. Martin, 2 Doug. ( j) See the 23 & 24 Vict. c. 145, ss. 417. 11-24. Sec. II.J MORTGAGE OF REALTY. 37 mortgage-debt and interest, must exercise reasonable discretion and prudence in the conduct of a sale, so as to obtain as large a price as can with due diligence and attention be obtained. {Ji) A power given to a trustee in a mortgage-deed, to sell on the request of the mortgagor, does not necessarily convey to the trustee a right to enter upon the mortgaged premises, (z) Where there are several mortgages of several es- tates to the same mortgagee for distinct debts, the proceeds of the sale of each estate must be applied solely in liquidation of the particular debt charged thereon, so that the surplus from one estate can not be applied to make good the deficiency of another estate. {Ji) There is nothing to prevent a puisne mort- gagee from purchasing the mortgaged property upon the exercise by a prior mortgagee of his power of sale ; and, if he does so purchase, he will acquire an absolute, irredeemable title as against the mortgagor. (/) First and second mortgagees may join in selling ; and each may give a separate receipt for his portion of the pur- chase-money to the pui'chaser. {vi) 1036. Of the tacking of arrears of interest and incumbrances. — Upon the principle that he who seeks equity shall do equity, the court will not enable a mortgagor to redeem his estate, except upon the terms that he pays all arrears of interest for payment of which he is personally liable, whether the arrears do or do not constitute a charge upon the mortgaged premises, («) and also all the costs and expenses nec- (/;) Matthie v. Edwards, 2 Coll. C. (k) Ex parte Bignold, 2 Deac. 66. C. 465. Kirkwood v. Thompson, 2 (/) Shaw v. Burney, 34 L. J., Ch. De G. J. & S. 613. Marriott v. An- 257; 33 Beav. 494. chor Reversionary Company, 30 L. J., (;«) M'Garogher v. Whieldon, 34 Ch. 122, 571. Beav. 107. (i) Watson v. Waltham, 2 Ad. & E. {11) Elvy v. Norwood, 21 L. J., Ch. 485. 716 ; 5 ne G. & S. 240. 38 LAW OF CONTRACT. [Bk. II. Ch. IV. essarily incurred by the mortgagee in maintaining the title to the estate, and in repairing and preserving the mortgaged property, and all debts due to him from the mortgagor in respect of which he has a lien upon the land sought to be redeemed, {o) If, therefore, the mortgagee has advanced money to the mortgagor be- yond the amount secured by the mortgage, expressly by way of further charge on the mortgaged premises, or on a judgment, statute, or recognizance, these sub- sequent advances must be repaid before the court will order the mortgagee to re-convey the estate. But, if there is no lien on the land in respect of such subse- quent advances, a re-conveyance will be ordered inde- pendently of them. (/) A boud or simple contract debt can not be tacked on to a mortgage as against the mortgagor himself; but it may as against the heir or beneficial devisee, or the executor of a mortjjaoror for a terra of years, coming to redeem, (^) unless there be a devise for payment of debts, in which case the mortgagee must come in upon the bond rateably with the other creditors. (;-) No bond or simple contract debt can be tacked on to the mortoaare as against mesne incumbrancers having a lien upon the land, {s) nor as against the assignee or mortgagee of the equity of redemption, or creditors, or purchasers for a valua- ble consideration. (/) As he who seeks equity must do equity, the court will not, where two estates have been severally mortgaged betu'een tne same parties to secure the repayment of several debts, and the title to (o) South V. Bloxham, 2 H. & M. {r) Heams v. Bance, 3 Atk. 630. 4-37 ; 34 L. J., Ch. 369. Price v. Fastnedge, .Vmb. 685. (/) Baker v. Harris, 16 Ves. 397. (s) Lowthian v. Hasel, 3 Bro. C. C. (q) Challis v. Caiborn, Pre. Ch, 407. 162. Morret V. Pa-ske, 2 Atk. 53. Archer v. {t) Anon., : Ves. sen. 662. Adams Snatt, '^ Str. iioj. Coleman v. v. Claxton, 6 ^'e.i. 225. A\"inch, I P. AVms. 775. Sec. II.] MORTGAGE OF REALTY. 39 one estate proves defective, enable the mortgagor or his assignee {u) to redeem one mortgage without pay- ing off both, {pc) The right of a mortgagee to unite two securities from the same mortgagor exists equally in foreclosure and redemption suits, (j)/) 1037. Priority of incumbrances and mor-tgages. — If the mortgagee neglects to ask for the title-deeds of the mortgaged property, and to secure the possession of them, he will take his mortgage subject to any lien which the holder of the deeds may be able to establish on the estate. {z~) If a party, having knowledge of a deposit of title-deeds, avoids making any inquiry into the circumstances under which the deposit was made, and does not require the deeds to be delivered up to him, his claim as mortgagee will be postponed to that of the depository of the deeds, {a) Where the credi- tor of a London publican took from the latter a mort- gage as a security for an antecedent debt, knowing at the time that the publican was indebted to his brewers, and that it was the ordinary practice of London pub- licans to deposit their leases with their brewers as a security for debts due to them, and made no inquiry upon the subject, and the publican's lease had, in fact been deposited v^^ith the brewers as a security for the balance of their account for beei', it was held that the lien of the brewers had priority over the claim upon the mortgage ; (Ji) but a first mortgagee, omitting to ask for, or parting with, the title-deeds, will not on that account be postponed to a subsequent incumbrancer, {u) Beevor v. Luck, L. R., 4 Eq. (z) Worthington v. Morgan, 18 L. !;37 ; 36 L. J., Ch. 865. J-, Ch. 233. Perry-Hervick v. Atwood. {x) Jones V. Smith, 2 Ves. jun. 376. 27 L. J., Ch. 121. Koe V. Soley, 2 W. Bl. 725. («) Birch v. Ellames, 2 Anstr. 427. {y) Selby V. Pomfret, I Johns. & H. {b) Whitbread v. Jordan, i You. & 3'5 ; 30 L. J., Ch, 770. C. 303. Hewett v. Loosemdre, 21 L. J., Ch. 6g. 40 LAJV OF CONTRACT. [Bk. 11. Ch. IV. with whom the deeds have been deposited, without notice of the prior charge, unless in his conduct there appears to be such negligence as amounts to fraud. (<:) Where, however, the mortgagee of leasehold property lent the lease to the mortgagor, for the purpose of raising money upon it, but at the same time told the mortgagor to inform the person from whom he bor- rowed the money of the mortgage, and the mortgagor borrowed the money from his bankers upon the secu- rity of a deposit of the lease, without giving them notice of the mortgage, it was held chat the mortgage must be postponed to the banker's lien, (a?) Equita- ble incumbrances and charges upon the mortgaged property of which the mortgagee had actual or con- structive notice at the time he effected the mortgage, will have priority over him according to their respec- tive dates ; (^) and, when any party, having knowledge of such facts as would lead any person using ordinary caution to make further inquiries, studiously avoids making any inquiry at all, he must be taken to have notice of those facts which, if inquired into, would have been readily ascertained ; for such negligence might otherwise be readily made a cloak for fraud. If a party appears to have had even a suspicion of the truth, and then makes no inquiry, his conduct is strong evidence of mala fides. (_/) Whenever a mortgagee has actual or constructive notice of an existing equita- ble incumbrance at the time he accepts the mortgage, he will not be permitted to avail himself of an assign- ment of an outstanding term prior to both, in order (c) Dowle V, Saunders, 2 H. & JI. 92. 242 ; 34 L. J., Ch. 87. Hunt v. {e) Beckett v. Cordley, I Bro. C. C. Elmes, 30 L. J., Ch. 255. Layard v. 353. Wilmot v. Pike, 5 Hare, 14. Maud, L. R,, 4 Eq. 397 ; 36 L. J., Ch. Wormald v. Maitland, 35 L. J.. Ch. 669. 69. («") Briggs V. Jones, L. R., 10 Eq. (/) Jones v. Smith, i Hare, 43. Sec. II.J ■ MORTGAGE OF REALTY. 41 to obtain a priority over sucli equitable incum- brance, (^g) 1038. Tacking. — " By the Vendor and Purchaser Act, 1874 (37 & 38 Vict. c. 78), s. 7, it is enacted that, after the commencement of that Act (7th August, 1774), no priority or protection shall be given or allowed to any estate, right, or interest in land by rea- son of such estate, right, or interest being protected by or tacked to any legal or other estate or interest in such land, and full effect shall be given in every court to this provision although the person claiming such priority or protection as aforesaid shall claim as a pur- chaser for valuable consideration and without notice : Provided always that this section shall not take away from any estate, right, title, or interest, any priority or protection which but for this section would have been given or allowed thereto, as against any estate or in- terest existing before the commencement of this Act." Where several mortgages have been executed of the same property, they will, as a general rule, have pri- ority according to date ; but a third mortgagee buy- ing in the first mortgage may unite his securities and postpone the second mortgagee, provided he had no notice of the second mortgage at the time he lent his money on the third mortgage ; and this Hale, C. J., called "a plank gained by the third mortgagee, tabula in naufragio." {h) And this right is not affected by the fact that the second mortgagee is really prior in point of date, and is merely postponed by the operation of the registry Acts, nor by the circumstance that the incumbrance, in respect whereof the right to consoli- {g) Willoughby V. Willoughby, I T. ough, 2 P. Wms. 491. Robinson v. R. 763. Allen v. Knight, 15 L. J., Davison, i Bro. C. C. 63. Bekhier Ch. 430. V. Butler, I Eden, 523, Hopkinson (h) Brace v. Duchess of Marlbor- v. Rolt, 9 H. L. C. 514 ; 34 L. J., Ch. 463. A,2 LAW OF CONTRACT. [Bk. II. Ch. IV. date is claimed, is equitable merely, and that the sec- ond mortgagee had no notice thereof, (z) But a prior mortgagee who has an assignment of a third mortgage as a trustee only can not tack the two mort- gages together to the prejudice of intervening incum- l.)rancers ; (/') nor are the priorities of successive incum- brancers altered by one of them getting in the legal estate from one who is a trustee for them all. (/) A second mortgagee who obtains an assignment of a term to attend the inheritance, and has all the title- deeds, may recover in ejectment against the first mortgagee, if he had no notice of the first mortgage at the time he lent his money ; for the first mortgagee, by leaving the title-deeds in the hands of the mortga- gor, enabled the latter to commit a fraud, (w) And all mesne incumbrancers who take protection against subsequent incumbrancers have a better equity than the prior incumbrancers who have neglected to take such protection, and are consequently entitled to pri- ority, provided their advances have been made without notice of any prior charge. Therefore a second in- cumbrancer of an equitable interest who gives notice to the trustees in whom the legal estate is vested, ob- tains priority over a previous incumbrancer who has ni,>t given such notice. (;^) A first mortgagee for present and future advances is not, as against a second mortgagee, entitled to priority in respect of advances made by him after notice of the second mortgage, (o) 1039. Every priority may be lost by fraud . — If, (/) Neve V. Pennell, 2 H. & M. (li) Fobter v. Blackstone, i Mylne 170. & K. 297. S. C, Foster v. Cockerel!, ( k) Morret v. Paske, 2 Atk. 52. 3 Ck & Fin. 456. Timson v. Ram.— (/) Sharpies v. Adams, 32 Beav. bottom, 2 Keen, 35. 2 , 3. (d) Hopkinson v. Roll, 9 H. L. Gas. (/«) Goodtitle V. Morgan, i T. R. 514 ; 34 L. J,, Ch. 463. 755- Sec. II.] MORTGAGE OF REALTY. 43 therefore, a creditor, who has a mortgage or lien on the estate of his debtor, fraudulently conceals the fact, and thereby enables such debtor to perpetrate a fraud upon a subsequent mortgagee, his claim will be post- poned to the claim of the latter under such second mortgage. (/) The want of possession of title-deeds by a first mortgagee leads to a prima facie presumption of fraud, and will cause such first mortgagee so with- out the deeds to be postponed to a second mortgagee in possession of the deeds, unless the first mortgagee has been defrauded of the deeds or has been deceived by his own solicitor, and the presumption of col- lusion or of gross negligence in failing to seek for and obtain possession of the deeds can be re- butted. (^) 1040. After a decree to settle priorities there can be no tacking of subsequent debts and incumbrances to prior securities, (r) The second mortgagee is en- titled to pay off, and to have a conveyance of the mortgaged estate from the first mortgagee ; and the latter ought, without the compulsion of judicial pro- ceedings, to accept payment from the second mort- gagee, and convey the mortgaged estate to him, whether the mortgagor does or does not consent thereto. Where, therefore, a first mortgagee, after re- ceipt of the usual notice by a second mortgagee of the intention of the latter to pay off the mortgage, filed a bill of foreclosure, and the second mortgagee tendered the mortgage-money and costs to the first mortgagee, and the latter declined to accept it, it was held that (/) Ibbotson V. Rhodes, 2 Vern. igS, Hunt v. E'.mes, 30 L. J., Ch. 554; lb. 151,370. Berrisford V. Mil- 255. Dowle v. Saunders, 34 L. J., Ch. ward, 2 Atk. 49, 87. ( (/) Evans v. Bi<:knell, 6 Ve=. junr. (r) Ex parte Knott, II Ves. 619. 1S3. Martinez v. Cooper, 2 Russ. 44 LAW OF CONTRACT. [Bk. II. Ch. IV. the first mortsraffee was not entitled to the costs of the suit for foreclosure after the tender, {s) But it must be clearly shown that the whole amount which the fix'St mortgagee is entitled to charge upon the land is tendered to him. (/) After a first mortgage has been paid off, the second mortgagee may file a bill to have the legal estate conveyed to him without pray- ing to foreclose the mortgage ; and he may, it seems, do this at the peril of costs until the day of payment under a decree for redemption obtained against him by the mortgagor, [ti) Upon a question of priority of incumbrances on shares, notice to one or more mem- bers of a joint-stock company individually is not no- tice to the company at large. (^) 1 04 1. Where the owner of land deposits his title- deeds luith a creditor as a security for the payment of a debt, the creditor has in equity a claim or charge upon the estate, which will bind the land in the hands of all subsequent purchasers who had notice of the de- posit at the time they accepted a conveyance of the property, and will prevail over the claims of all prior unexecuted or subsequent judgment creditors, (jj/) and of the trustee of a bankrupt depositor. {£) The depositary of the title-deeds has a direct con- trol over the owner's power of disposition of the estate, inasmuch as a purchaser can not safely take a conveyance without a previous investigation of the title ; and, if the latter receives notice of the de- posit of the deeds before he has completed his pur- chase, the land will be subjected in his hands to all the (s) Smith V. Green, i Col. Ch. C. (x) Martin v. Sedgwick, g Beav. 555. 333- {t) Williams v. Owen, 13 Sim. {y) \Vhitworth v. Gaugain, 3 Hare, 597- 416. 27 & 28 Vict. ^. 112. {li) Grugeon v. Gerrard, 4 Y. & C. (z) Sumpter v. Cooper, 2 B. & Ad. 119- 223. Doe V. Jones, ]0 B. & C. 71S, Sec. II.] MORTGAGE OF REALTY. 45 claims and charges which the depositary of the deeds may have acquired thereon, {a) If, however, a subse- quent purchaser or mortgagee has been deceived by false evidence of title, such as the production of forged or counterfeit title-deeds, and has not been guilty of any laches or negligence in the course of his purchase or acquisition of the property, he will be entitled to hold it discharged of the lien. {U) In such a case, the equities of the parties being equal, the possessor of the legal title must prevail. So, if the depositary of the deeds makes himself in any way a party to the con- cealment of the deposit from a subsequent purchaser or mortgagee, he will lose his lien upon the land as soon as a transfer or conveyance has been executed to the latter. . If he is induced to part with the posses- sion of the deeds, and they are. then taken without his knowledge or authority, and produced as evidence of title to an intended purchaser, who accepts a convey- ance and pays his purchase-money in ignorance of the deposit, the land will pass free from the charge, {c) But the depositary will not, from the mere circum- stance of his having parted with the possession of the deeds, and without their having been made the instru- ment of fraud, lose his charge or lien upon the land therein comprised, {d) If the property comprised in the title-deeds is subject to a trust, the trust will prevail as against the depositary, although he had no notice of the trust at the time of the making of the deposit. {i) A lien may be created on the estate and interest of the depositor by the deposit of a land certificate (rt) Hiern v. Mill, 13 Ves. 114. (i5) Plumb v. Fluit, 2 Anstr. 432. Birch V. EUames, 2 Anstr; 427- {c) Allen v. Knight, 5 Have, 278. Diyden v. Frost, 3 My. & Cr. 670. (d) Ex park Morgan, 12 Ves. 6, See Vendor and Purchaser Act, cited (e) Manningford v. Toleman, I Col. ^,//e, % 1045. C. C. 670. 46 LAW OF CONTRACT. [Bk. II. Ch. IV. granted in conformity with the 25 & 26 Vict. c. 53- (/)^ 1042. Authentication of the deposit as a charge on realty. — In order to constitute and create a charge or Hen of this description upon the land, there must be an actual or constructive deposit of the title- deeds ; (^g) an agreement to make a deposit will not have the effect of charging the land with the payment of the debt. But it is not necessary that there should be a written memorandum of the nature and terms of the deposit, (/z) If money is advanced on the one side, and the deeds are deposited on the other, or the de- positor is shown to have been indebted to the deposi- tary at the time of the making of the deposit, it is suffi- cient to constitute and create the charge or lien upon the land. (?) But the mere production of title-deeds from the possession of a bond creditor is not of itself sufficient evidence of a lien. (Ji) A charge upon copyholds may be created by " a mere deposit by a debtor of the copy of court roll with his creditor," as a security for the payment of the debt. (/) An actual charge or lien by deposit of title-deeds is not within the Statute of Frauds ; (;;/) but it is otherwise with an agreement to make a deposit, which is not binding unless it is in writing. {11) An oral agreement to mortgage lands as a security for the payment of an existing debt, followed by a deposit of title-deeds, has been held to have the (/) See sect. 73. ( /6) Chapman v. Chapman, 20 L. (g) Ex parte Coombe, 4 Mad. 249. J., Ch. 465. Ex parte Hooper, 19 Ex parte Perry, 3 M. D. & G. 252. Ves. 477. Daw V. Terrell, 33 Beav. 2i8. (/) Whitbread v. Bulnois, I Y. ^t (li) Shaw V. Foster, L. R., 5 H. L. Col. 303. Cas. 321. (;«) Russel v. Russel, I Bro. C. C. (/) Ex parte Langston, 17 \"es. 230. 269. Ex parte Kensington, 2 Ves. & B. 83. {11) Ex parte Coombe, 4 Mad. Richards V. Borrett, 3 Esp. 102. 249. ' See ante, vol. ii., note i, p. ■\2. Sec. II.] MORTGAGE OF REALTY. 47 effect of hypothecating or charging the lands held under such deeds, (o) Title-deeds originally deposited in the hands of bankers for safe custody may, by a sub- sequent agreement with them, be changed into a de- posit to secure the repayment of money advanced ; (/) and, if changes take place in the members of the banking firm, they will not, by reason thereof, lose the benefit of their security. (^) Where some brewers agreed to advance money to a publican on a deposit of his lease, and the lease was delivered by the lessor, immediately after its execution, to the brewers' agent, who advanced the money, it was held that the brewers had a lien on the lease, (r) Lastly, it may be ob- served that, although a written contract is held not to be necessary to establish the charge or lien upon the land, yet, if the depositary can produce no written evi- dence of the contract, he will not in general be al- lowed the costs of any proceedings undertaken by him to enforce his lien, {s) 1043. Of the parties entitled to make the deposit. — The deposit must be made by the person who has the ownership of, and power of disposition over, the prop- erty comprised in the deeds, and with the apparent in- tention of pledging the title as a security for the pay- ment of money. A person who has casually become possessed of title-deeds, or who has received them from a person who had no authority from the owner to pledge them, cannot, of course, found any lien or charge upon the deposit. The depositary, moreover, must have {0) Edge V. Worthington, i Cox, (r) Meux v. Smith, 2 lb. 789 ; i lb. 211. Ex parte Bruce, i Rose, 374. 396. Ex parte Harvey, Mont. & Chitt. (j-) Ex parte Brightens, I Swanst. 261. ■ 3. Ex parte Trew, 3 Mad. 372. (/) /S'^/rt;-/^ Farley, 5 Jur, 512. Ex parte Moss, 3 De G. & S. (q) Ex parte Smith, 2 Mon. D & 599. De G. 314. Ex fai-te Oakes, lb. 234. 48 LAW OF CONTRACT. [Bk. II. Ch. IV. all the deeds which are essential to the establjshment of the title. If he has only a portion of the title- deeds, and is possessed only of insufficient and incom- plete evidence of title, he can not found thereon a lien or charge upon the land as against subsequent pur- chasers and mortgagees ; and, if part of the title-deeds are deposited with one creditor, and part with another creditor, neither of them will obtain a lien by the de- posit. (/) The depositor of the deeds can, of course, only charge the lands to the extent of his own estate and interest therein. If a tenant for life deposits the title-deeds of the inheritance with his creditor, the es- tate for life only is charged, and the depositary has no lien against the remainder-man ; and, if a vendor retains the title-deeds, and pledges them, he can confer a secu- rit)^ only to the extent of his own lien upon them. (?/) If the depositor has no intcrcsr at all in the deeds, he can confer none on his depositary, (.r) 1044. Of the extent of the Hen. — The lien extends in general, in the absence of an express agreement to the contrary, to all the property comprised in the deeds, and embraces the entire estate and interest of the depositor, (jk) Where the memorandum of the deposit of the conveyance of a house and furniture stated, " Herewith I hand you the title-deeds of my Bognor estate as collateral security," it was held that the furniture was excluded, the words " my Bognor estate " having reference only to the house and land. {£) But, where the lease of a dwelling-house was de- posited, it was held that the tenant's fixtures in the (i) Ex parte Wetherell, 11 Ves, [x] Jackson v. Butler, 2 Atk, 306. 39S. Ex parte Pefirse, I Buck, 525. Harrington v. Price, 3 B. & Ad. 170. But see Ex parte Chippendale, i Deac. ( r) Ashton v. Dalton, 2 Coi. C-i. C. 67 ; 2 Mont. & A. 299. 565. («) liooper v. Ramsbottam, 6 (z) Ex parte Hunt, i Jlon. D. & Taunt. 12. De G. 139 ; 4 Jur. 3^2. Sec. II.] MORTGAGE OF REALTY. 49 dwelling-house were included in the lien, although they were not mentioned in the written memorandum accompanying the deposit, {a) If deeds are deposited for the purpose of obtaining credit, the depositary has no lien upon them in respect of moneys previously ad- vanced, {b) Where the purchaser of an equity of re- demption in premises subject to a mortgage term, de- posited the purchase-deed as a security for a loan, and afterwards paid off the mortgage and took a sur- render of the term and became bankrupt, it was held that the lien created by the deposit extended to the whole estate, freed from incumbrance, {c) If it is stip- ulated, at the time of the making of the deposit, that the deeds are to be returned whenever the debt is re- duced to a certain amount, there will be no lien or charge upon the land so long as the debt is kept below that amount ; but, whenever the debt exceeds the sum named, the lien arises, and covers the whole amount due. The lien will extend to subsequent advances, if that appears, by the terms of the original contract, or by subsequent agreement, to have been the under- standing and intention of the parties, (af) Where the deposit was accompanied by a written agreement secur- ing a specific sum, it was held that the security might be extended to further advances by a subsequent oral contract, {e) Such further liens, founded on further advances, may be created in favor of third parties ; but they ought to be evidenced by writing. (/) (a) Ex parte Cowell, I2 Jur. 411. Ex parte Hooper, 19 Ves. 477. Ex [h) Mountford v. Scott, I Turn. & parte Alexander, I Glyn. & J. 409. Russ. 274. Ex parte Langston, 17 Ves. 227. (c) Ex parte Bisdee, i Men. D. & {e) Ex parte Neltleship, 2 Men. D. Ue G. 333. & De G. 124. {d) Ex parte Linden, I Mon. D, & (/) Ex parte Whitbread, 19 Ves. Ds G. 428. Ex parte Y^Afj/xh.iA},. 209. Factor v. Philpot, 12 Pr. 197. Ex parte Kensington, 2 Ves. & B. 79. Til. — 4 so LAW OF CONTRACT. [Bk. II. Ch. IV. 1045. Of the depositary's right to have the estate sold. — If the debt or the money, to secure 4ie due pa\'- ment of which the deposit has been made, is not paid by the time appointed, the depositary may obtain a decree from the court for a sale of the property, and an appropriation of the produce of the sale in satisfac- tion and discharge of the amount due, six months beinp,- allowed the depositor to redeem the property, i^g) The court, in this respect, follows the civil and conti- nental law, where it is said to be the natural effect of an hypothecation " that, if the debtor does not pay, the creditor may sell, and obtain payment out of the price or marketable value of the thing hypothecated." The debtor may at any time after the time limited for the payment of the debt has expired, and before the lands have been sold by the decree of the court, release the land, and obtain an extinguishment of the charge, by paying or tendering to the depositar}^ the amount of the debt, unless, indeed, the deeds have been deposited under an agreement requiring notice to be given of the debtor's intention to redeem the charge, or impos- ing certain conditions which have not been complied with. A charge or lien resulting from a deposit of title-deeds is an assignable interest, and may be bought and sold. (//) In the Roman law, if the debt was not paid at the time appointed, the creditor had a right to sell the property without the authority or intervention of am,- court of justice, provided he duly complied with the following conditions. If the contract of hypothecation gave him an express authority to take possession of the hypothecated property, and appropriate it to his [g) Pain V. Smith, 2 Myl, & K. (/,) Hobson v. Mellond, 2 M. & 417. I,ewis V. John, i Good. Ch. Pr. Rob. 342. 10. Sec. II.] MORTGAGE OF REALTY. 51 use in case of the debtor's default, he might at once seize and sell it. If no such power was given him, he was bound to give notice to the debtor of his intention to sell two years before any sale could take place, and the debtor had, during all that time the power of re- deeming the charge. If he failed so to do, the credi- tor wa'', in contemplation of law, the authorized agent of the debtor for the purposes of the sale, and could transfer the right of property and possession of the thing hypothecated to the purchaser by his contract, just the same as any other agent fully authorized by the owner of property to effect a sale thereof on his behalf. Having received the purchase-money, he was at liberty to take therefrom the amount of the charge or debt, and was responsible to the debtor for the sur- plus. If, on the other hand, the purchase-money was insufficient to discharge such debt, the debtor con- tinued responsible for the deficiency. 1046. Liens 071 estates for unpaid p7u^chase-money arise wherever a vendor delivers possession of an es- tate to a purchaser without receiving payment of the price, (z) The lien binds the land in the hands of the purchaser, his heirs, and devisees, and all subse- quent bona fide purchasers with notice, (i) But it will not prevail against a bona fide purchaser without notice who has obtained a conveyance of the legal es- tate. The mere deduction of the title to the estate from the first vendor by recital will not be sufficient to affect him with notice ; for that does not show that the money was not paid. (/) A person who sells an equitable life interest in lands in consideration of the payment of an annuity has a lien upon the land for the {i) Siigd. Vend. & Purcli. 856, 857, 329. Elliott v. Edwards, 3 B. & P. ed. 1846. 181. (i) Mackreth v. Symraons, 15 Ves. (/) Sugd. Vend. 879. 52 LAW OF CONTRACT. [Bk. II. Cii. IV. annuity as against the purchaser, (m) Where lands were sold, and it was agreed that the purchase-money should remain unpaid, and be a charge thereon, and advances were made by the vendor to the purchasers to enable them to build, it was held that the vendor's lien extended to these advances. (;^) A charge or lien of this description upon a newly-purchased estate is termed, by the French jurists, a tacit hypothecation. ((?) It does not appear to have been known to the Roman law. The party entitled to the lien may, un- der certain circumstances, obtain from the court a de- cree for the re-sale of the property, and an appropria- tion of the produce of the sale, in liquidation and discharge of the debt. (/) The owner of land taken by a railway company is entitled to a lien upon the land so taken for the amount both of the purchase-money and of the com- pensation for severance, (^) and has the same reme- dies for enforcing it as an ordinary vendor, although the railwa}^ company have entered and used the land for the purpose of their railway, (r) If land is to be paid for by installments, every payment is a part per- formance of the contract by the vendee, and transfers to him a corresponding portion of the estate, (s) 1047- Prio7Hty of liens. — As between two persons whose liens are of the same nature and quality and (in) Matthews v. Bowler, i6 L. J., s. i Cli- 239. (y)) Rome V. Young, 3 Y & C. igg. (n) Ex parte Linden, i Mon. D. & (q) Walker v. Ware, &c.. Railway De G. 42S, Company, 35 L. J., Ch. 94. {0) Tel est enfin celle que le ven- (r) Wing v. Tottenham & Hamp- deur d'un heritage a sur cet heritage, stead Junction Ry. Co., L. R., 3 Cli. pour 1- prix qui lui est du. Teslois 740. iSIunns v. Isle of Wight Ry. Co., romaines ne donnaient point cette L. R., 5 Ch. 414 ; 3g L. J., Ch. 522. hypolhcque au vendeur ; elle e^t de (.t) Rose v. Watson, 10 H. T. C. notre droit. Pothier, Hypoth. ch. i, 672. Sec. II.] mortgage OF REALTY. 53 precisely equal, the possession of the deeds gives the priority. But, if possession of the deeds hqs been lost hy one incumbrancer and gained by another in con- sequence of the perpetration of a fraud, possession of the deeds will confer no priority on the holder, al- though he got them bona fide and without any knowl- edge of the fraud, if) When the equities of the two parties are in all respects precisely eoual, the maxim •' qui prior est tempore potier est jure " will prevail. But when there are several incumbrancers, and one of them, though subsequent indate, has by his greater dili- gence got in aid of his incumbrance a legal right, the court will give him priority. {11) Whether the lien of a vendor for unpaid purchase-money, or that of a sub- sequent incumbrancer, ought to be preferred, must de- pend upon all the circumstances of each particular case, and upon the conduct of the respective parties ; and among the circumstances which may give to the one the better equity, the possession of the title-deeds is a very material one. If the unpaid vendor, after executing a conveyance in the usual form acknowl- edging the receipt of the purchase-money, imprudently delivers to the purchaser the possession of the title- deeds, he arms the latter with the means of dealing with the estate as the absolute owner, and of commit- ing a fraud ; and, if the purchaser raises money upon the credit of a deposit of the deeds, the equity of the depositary of the deeds will prevail over that of the unpaid vendor, {x) To be safe, therefore, from the claim of a subsequent incumbrancer or mortgagee, the unpaid vendor must keep the possession of all the title- (/) Ex parte Reid, 12 Jur. 533. {x) Rice v. Rice, 23 L. J., Ch. 292. {»() Kates V. Brothers, 23 L. J., Ch. Roberts v. Croft, 27 L. J., Ch. 220. 152. S^ LAW OF CONTRACT. [Bk. II. Ch. IV. deeds, and especially of his own conveyance to the purchaser, (y ) 1048. 0/ rent-charges on lands ajid tenemtnts. — The grant of a sum of money, to issue out of the land of the grantor, and to be paid at fixed consecutive periods for a term of years, for life or in fee, accom- panied by a power of distress, creates a charge or lien upon the land, which binds the land in the hands of all subsequent purchasers and mortgagees, and descends with it to the heir-at-law. Whenever a rent-charge can be distrained for, the liability to a distress follows the land into the hands of all persons claiming under or through the grantor of the rent, (i?) A general grant of rent to a man without limitation of time will amount to a grant for the life of the grantee, if the grantor himself is seized in fee or his estate lasts sufficiently long, {a) If a lessee for term of years grants a rent, to be issuing out of the land so held by him, for the life of the grantee, the grant is void as a rent-charge or annuity for life ; but it will enure as a grant of a rent for the term and interest possessed by the grantor in the land, provided the grantee shall so long live, {b) All owners of land of full age and under no incapacity may charge their lands with a rent-char-^re to the full extent of their several interests in the land, but have, of course, no power to charge it to a greater ex-tent. The grant is in all cases good, as against the grantor himself, and those who claim through or under him, although it may be void and of no effect as against persons claiming by title paramount. A rent-charge, being in the nature of an incorporeal right, can only be granted or conveyed by deed or will. The proper (;!') Worthington v. Morgan, 18 L. (a) Perk. Grants, s. 104. J., Ch. 233. (b) St. Auby's case, Cro. Eliz. 183. (z) Co I.itt. 162, b. ; 144 a, Sec. II.] MORTGAGE OF REALTY. 55 mode of creation is by a deed of grant, whereby the grantor grants the rent to be issuing out of certain land, with a power of distress to the grantee for the re- covery thereof No precise form of words is necessary to create the charge, nor need the word " grant " be used in the deed ; {c) but there must be equivalent words, manifesting the plain intention of the parties to make a positive and immediate grant, {d) 1049. '^^''^ ^'-^^ f^''^ ^^^ registration of rent- charges and annuities {e) do not extend to rent- charges or annuities granted for a fixed term of years or in perpetuity, or to bonds to secure the payment of pre-existing debts by installments, or to any pay- ments which are not strictly grants of annuities. (/") It has been held that, if a purchaser knows at the time he purchases the land and accepts a conveyance thereof, of the existence of a rent-charge, the land shall :e nain liable thereto in his hands, although the charge was never registered ; " for, where a man purchases with notice of a prior incumbrance, he purchases with an ill conscience, and the statute was never intended to relieve such a person." (_^) 1050. Of the power of distress, entry, and sale. — A grant of a rent to a person who had no reversion- ary estate in the land out of which the rent issued unaccompanied by a power of distress, did not by the common law charge the land with the rent ; and the grantee had no right to distrain for it. It was accordingly called a " rent seek " or dry rent. Now, however, by the 4 Geo. 2, c. 28, s. 5, it is enacted that all persons, bodies politic and corporate, shall have the (c) Co. Litt. 147, a. 2 Rolle Abr. 14. 424. Litt. sec. 221. (/) Marriage v. Marriage, i C. B. {d) In re Locke, 2 D. & R. 605. 776. {f\ 18 & IC) Vict, u, 15, ss. 12, 13, {g) Cheval v. Nicliols, I Str. 664. 56 LAW OF CONTRACT. [Bk. II. Ch. IV. like remedy by distress in the case of rents seek, rents of assize, and chief rents, as in the case of rent re- served upon lease. If a lessee for years assigns his term, reserving a rent, such rent is not a rent seek within the meaning of the statute, and can not there- fore be distrained for, unless an express power of dis- tress has been reserved or granted in the deed of assignment ; but an action must be brought upon the contract for the recovery of the arrears. (//) " There are two ways of creating a rent : the owner of the land either grants a rent out of it, or grants the land and reserves the rent ; there is no such thing as a rent ser- vice, rent seek, or rent charge, issuing out of a term of years." (i) In creating a rent, therefore, for life or years, or for years determinable on a life or lives, to be issuing out of a chattel interest, a power of distress is absolutely necessary to charge the land, and enable the grantee and his assignees to distrain, unless the grantee or assignee has the reversion of the lands. It is said, moreover, that, if the grantee was never seized of the rent, he can not distrain for it at all ; and, as a seisin can not be had of a chattel interest, but only a possession, an express power of distress ought to be given on creating a rent for years to be issuing out of a freehold estate, (ir) In addition to the power of distress, a power is frequently given to the grantee of a rent-charge, and to his assignees, to enter upon the lands charged in case of non-payment of the rent within a certain number of days, and hold possession of them, and receive the rents and profits, until he has satisfied the arrears due. In this case the grantee or (li) Bro. Abr. Dette, pi. 32. Par- (k) Litt. sec. 217, 341. 18 Vin. menter v. Webber, 8 Taunt. 593, Abr. 474, C. Dixon v. Harrison, (;) Per Cur., v. Cooper, 2 Wils. Vaugh. 49. Gilb. 38. 375- Sec. II.] MORTGAGE OF REALTY. 57 his assignee has a right of entry, if the rent remains unpaid after the time limited, and may maintain an ac- tion for the recovery of possession of the land. (/) But this right of entry does not extend to copyhold estates. (;;/) When a rent-charge has remained in ar- rear and unpaid for a considerable period, the court has sometimes, under certain circumstances, ordered the property to be sold, and the purchase-money to be applied in payment of the arrears, {n) 1 05 1. Extinguishment of rent-charges. — "If a man hath a rent-charge to him and to his heires issu- ing out of certaine land, if he purchase any parcel of this to him and his heires, all the rent-charge is ex- tinct, and the annuitie also, because the rent-charge can not by such manner be apportioned." And so, if he brings a writ of annuity and charges the person of the grantor, the land is thenceforth discharged, and the contract becomes a mere personal contract, [p) 1052. Lands a7td tenements might form,erly have been hypothecated by a registered jiidgment. Thus, where a debtor, by a cognovit or warrant of attorney, authorizes his creditor, under certain circumstances or upon a certain contingency, to sign a judgment against him for the amount of the debt, it becomes a judgment debt, and, when registered, was formerly binding upon all the lands of the debtor, as well after- acquired as those of which he was possessed at the time of the registration of the judgment ; (/ ) but the Law of Property Act (23 & 24 Vict. c. 38), s. i, en- acted that no judgment should affect land, ofwhat- \l) Havergill V. Hare, Cro. Jac. 510. Ex parte Price, 3 Mad. 132. White Litt. sec. 327. Jemott v. Cowley, i v. James, 26 Beav. 191 ; 28 L. J., Ch. Wms. Saund. 112, u. Doe v. Lord 179. Kensington, 8 Q. B. 429. (0) Litt. sec. 222. (w) Gilb. Ten. 181-185. (/) Cuthbert v. Dobbin, i C. B. (k) Cubit V. Jackson, M'Clel. 495. 278. I & 2 Vict. c. no. SS LA IV OF CONTRACT [Bk. II. Ch, IV. ever tenure, as to a purchaser or raortgagee, notwith- standing notice, until a writ of execution had been issued and registered; and the 27 «& 28 Vict. c. 112, ena'cts (s. i) that no judgment, statute or recogniz- ance entered up after tire passing of the Act shall af- fect any land, whatever be the tenure, until such land shall have been actually delivered in execution by virtue of a writ of elegit or other lawful authority in pursuance of such judgment, &c. And every writ or other process of execution of any such judgment, &c., by virtue whereof land shall have been delivered in execution, shall be registered in the manner provided by the 23 & 24 Vict. c. 38, but in the name of the debtor against whom such process is i.ssued. Provision is made (s. 4) for the sale of lands delivered in execu- tion, and for the application of the proceeds of the sale. 1053. JVa7^7^aiits of attorney, cognovits, and orders for judgment. — Warrants of attorney to confess judg- ment and cognovits must be executed in the presence of and attested by an attorney on behalf of the person giving them;(^) and the documents themselves or true copies of them must be filed, as required by the 3 Geo. 4, c. 39, within twenty-one days after execution, or they will be deemed to be fraudulent and void. If the v;arrant or cognovit is subject to any defeazance or condition, such defeazance or condition must be written on the same paper or parchment with the warrant or cognovit before it is filed, or the warrant or cognovit v\ ill be void. (;-) A warrant of attorney with judg- ment entered up, and execution issued thereon, and hill of sale by the sheriff to the judgment-creditor, has been held to be an assignment of property to such (?) 32 & 33 ^'ict. c. 62, s. 24, 25. (;•) 32 & 33 Vict. c. 62, s. 26. Sec. III.] MORTGAGE OF CHATTELS. 59 judgment-creditor by the giver of the warrant of attor- ney, (s) Judges' orders for judgment made by con- sent, or a copy thereof, if the action is in any other court than the Queen's Bench, must, with an aflTidavit of the time when such consent was given, and of the residence and occupation of the defendant, be filed in the Queen's Bench within twenty-one days after the making of the order ; and the 3 Geo. 4, c. 39, and the 6 & 7 Vict. c. 66, are made applicable to such orders. (^) 1054. Charges on lands by statute merchant, statute staple, and recognizance, when enrolled and certified, pursuant to the 29 Car. 2, c. 3, s. 18, and the 8 Geo. I, c. 25, and executed pursuant to the 27 & 28 Vict. c. 112, bind the lands and tenements of the debtor in the hands of all subsequent purchasers and mortgagees, {x) If the debt is not paid at the time appointed, execution may at once be awarded, with- out any mesne process to summon the debtor, or pro- duction of evidence to convict him, and all the lands to which the debtor is then entitled may be taken and delivered to the creditor, who will be entitled to hold them until the debt and costs are satisfied out of the rents and profits. SECTION III. MORTGAGE, ETC., OF CHATTELS. 1055. Mortgages of goods and chattels. — If goods and chattels are bargained and sold, or granted, or assigned by one man to another upon the terms that (j) Doe V. Carter, 8 T. R. 300. (x) Ellis v. Reg., 8 Exch. 925. {f) 32 & 33 Vict. c. 62, ■i. 27. 6o LAW OF CONTRACT. [Bk. II. Ch. IV. the sale or transfer is to be void on the payment of a sum of money at an appointed period, and that the vendor or transferror, is in the meantime, and until default has been made in payment of the money, to have the possession and use of the things so sold, granted, or assigned, the contract is a contract of mortgage. If the possession only is transferred, the right of property continuing in the transferror, the contract is a contract of pledge. A mortgage of goods and chattels may be made by simple contract (jk) as well as by deed. If, by the terms of a bill of sale or assignment of chattels by way of mortgage, the mortgagor is to hold and enjoy the chattels as the mere servant or agent of the mort- gagee, or at the will of the mortgagee, the latter is entitled to the possession of them whenever he thinks fit to call for it, and may seize and carry away and sell the property. (5') If the mortgage-debt is io be paid on demand, and the mortgagor is to possess the mortgaged property until default has been made in payment, the mortgagee has no right of possession, until demand has been made. (<:r) If the mortgage- debt is to be paid by a day named, and the mortgagor is to hold possession until default has been made, there is a re-grant and bailment of the goods to the mortgagor for the intervening period, and the mort- gagee has no right to the possession of them until the mortgagor's time of holding has expired, and, if he takes possession, he will subject himself to an ac- tion, (b) But, if the mortgagor deals fraudulently with the mortgaged goods thus left in his possession, iy) Flory v. Denny, 7 Excli. 5S5 ; 351. 21 L. J.. Ex. 223. Maugham v. {a) Bradley v. Copley, i C. B. 697. Shaipe, 34 L. J., C. P. 19. (I?) Biierly v. Kendall, 17 Q. }!. (z) Mayhew v. Suttle, 4 Ell. & Bl. 937 ; 21 L. J., Q B. 161. bEC. lll.J MORTGAGE OF CHATTELS. 6\ as if he attempts to sell them, the bailment is deter- mined, the possessory title reverts to the mortgagee, and he may immediately commence an action for the recovery of the goods or their value, {c) If goods are assigned to the mortgagee upon trust io permit the mortgagor to hold and enjoy them until default has been made in payment of the mortgage- debt and interest by a day named, and upon further trust to sell them upon such default being made, the mortgagee has the legal right of possession incum- bered with the trust as well as the right of property, and may maintain an action against any one who wrongfully converts them to his own use. {d') A pro- viso in a mortgage of chattels that, after default made in payment of the mortgage-debt after notice, it shall be lawful for the mortgagee to receive and take into possession, and thenceforth to hold and enjoy, the mortgaged chattels, and to sell and dispose of them, and that, until default, it shall be lawful for the mort- gagor to hold and make use of them, does not pre- vent the mortgage from operating as an immediate transfer of the right of property in the chattels to the mortgagee. The latter is the legal owner, whether in or out of possession, {e) A mortgage of goods and chattels and movables (excepting ships) will, in general, be found to be a doubtful and inadequate security for the payment of money ; for, as the mortgagor is left in the possession of the goods, and continues the apparent owner of them, he will be able to defeat the title of the mort- gagee in a variety of ways. He may sell the goods in market overt to a bona fide purchaser, without no- {c) Fenn v. Bittleston, 7 Exch. 152 ; (d) White v. Morris, n C. B. 1015 ; 12 L. J., Ex. 41. 21 L.J. ,C. P. 185. {e) Gale v. Burnell, 7 Q. B. 850. 62 LA IV OF CONTRACT. [Bk. II. Ch. IV. tice of the mortgage, and so divest the mortgagee of his right of property in them, and deprive him of his security ; and, if the mortgagor becomes bankrupt, the chattels may become lost to the mortgagee by reason of their having been left in the possession of the mortgagor as reputed owner. (/") 1056. What things pass by the grant of goods and chattels. — If one give or grant to another all his "goods," or all his "chattels," by this do pass all his moveable and immoveable, personal and real, goods, horses, and other beasts, plate, jewels, and household stuff, bows, weapons, and such-like, and his money, and his corn growing in the ground, but not the term or interest in his dwelling-house, nor his leasehold es- tates, unless there be some term or provision in the deed manifesting an intention on the part of the grantor that his leasehold property should pass under the general description, (_^) nor things which he hath in keeping for another ; nor choses in action, nor things of pleasure, such as hawks, hounds, &c. If one grant to another all his utensils, " hereby will pass all his household stuff, but not his plate, or jewels, or ar- ticles of trade." And, "if two men have goods in common, and have other goods severally, and they give me all their goods, by this grant is given all the goods they have in common, and likev,'ise all the goods they have in sevcralty."(//) But, if a schedule or inventory of the things purporting to be granted by the bill of sale is annexed thereto, nothing will pass under the bill of sale except the things specified in the inventory, (?) or comprehended under some (/) Shutlleworth v. Hernaman, I fying Ringer v. Canii, 3 M. & -W. Dc G. & J. 322. 343. (g) Harrison V. Blackburn, 17 C. B., (/;) Shep. Touch. gS. N. S. 678; 34 L. J., C. P. 109, quali- (i) Wood v. Rowcliffe, 6 Exch. 407. Sec. III.] MORTGAGE OF CHATTELS. 63 general description contained therein. {Jc) Evidence of surrounding circumstances is admissible to show what was intended to be bought and sold, and what is and what is not parcel of the subject-matter of the contract, and intended to pass thereby. (/) In order to transfer the right of property in goods and chattels by a deed of grant, or bill of sale, or other instrumert of transfer, the chattel intended to be conveyed must be in existence, and be ascertained and identified at the time of the execution of the grant or transfer. If I grant a man twenty deer to be taken out of the herd in my park, no right of property in any particu- Inr deer passes to the grantee. " But, if I have a black deer amongst the other deer in my park, I can grant him, and the grant is good ; or, if I have two that can be distinguished from the rest, and I grant one or both of them, the grant is good for this, that it is cer- tain what thing is granted." {iii) A grant of fifty quarters of corn, twenty hogsheads of ale, or a dozen baskets of fruit, amounts only to a covenant to deliver goods answering the description given in the grant, and does not operate as an immediate transfer of any particular parcel of corn, or quantity of ale or fruit, unless the corn was measured, the ale put into hogs- heads, and the fruit into baskets, and set apart so as to be ascertained and identified at the time of the ex- ecution of the grant. 1057. Bills of sale of after-acquired property. — A deed which professes to convey property not in existence at the time is, as a conveyance, void, simply because there is nothing to convey. So a contrac; ■(i)Cortv. Ssgar, 3 H. & N. 373 ; Lunn v. Thornton, I C. B. 379. 27 L. J., Ex. 378. Gale v. Burnell, 7 Q. B. 863. Ban- v. (/) M'Donaldv. Longbottom, 28 L. Gibson, 3 M. & W. 390. Perk. J., Q. B. 293. Grants, i;^!, 65, 90. Robinson v •,/«} Brian, C. J., 18 Ed. 4, 14. Macdonnell, 5 M. & S. 228. 64 LAJV OF CONTRACT. [Bk. II. Cii. IV. which purports to transfer property not in existence can not operate as an immediate alienation, simply be- cause there is nothing to transfer ; but, if a vendor or mortgagor has agreed to sell or mortgage property real or personal, of which he was not possessed at the time of the making of the contract, and he receives the consideration for the contract, and afterwards be- comes possessed of the property, and the property is of such a nature that specific performance would be decreed, the beneficial interest in the property is transferred to the purchaser or mortgagee as soon as the property is acquired. And the title of the grantee or assignee under the bill of sale will prevail, not only against a judgment creditor, but against a purchaser for value of the specific thing, unless he has fortified himself with actual possession without knowledge of the contract, (n) The right to growing crops and the growing produce of the soil, not sown or planted at the time of the making of the grant, may, as we have already seen, pass thereby. "The land is the mother and root of all fruits. Therefore, he that hath it may grant all fruits that may arise upon it after ; and the property shall pass as soon as the fruits are extant. A parson may grant all the tithe wool that he shall have in such a year, yet perhaps he shall have none ; but a man can not grant all the wool that shall grow upon his sheep that he shall buy hereafter ; for there he hath it neither actually nor potentially." (o) A bill of sale of after-acquired property generally gives the grantee a power of seizing such property when it comes into existence ; ('/>) and, when the (ii) Holroyd v. Marshall, 33 L. J., J., Ch. 497. C'h. 193; 10 H. L. C. 214; over- (u) Grantham v. Ilawley, Hob. ruling Holriiyd v. Marshall, 30 L. J., 132. <;h, 387. Reeve v. Whitmore, 32 L. (p) Per Tindal, C. J., Lunn v. Sec. III.] MORTGAGE OF CHATTELS. 65 power or authority has been executed to the extent of taking possession of the after-acquired property by the grantee thereof, it is the same as if the grantor had himself put the grantee in actual possession of it. {q) Whether the debtor give possession by delivery with his own hands or direct the creditor to take it, the effect after actual possession by the creditor is the same ; (r) and the authority may be extended to crops and prop- erty on after-taken land, as well as on land in the pos- session of the grantor at the time of the making of the grant. (J) But the power must be strictly executed. If, therefore, it is a power to distrain or seize after de- mand made, such demand should be made personally on the grantor, as it has been held that, if it is made on his wife in his absence, it is insufficient. (/) Where the bill of sale contained a proviso for redemption if the mortgagor should instantly on demand, and with- out delay on any pretense whatsoever, pay the amount, due, and that the demand might be made personally on the mortgagor, or by giving or leaving verbal or written notice to or for him at his place of business, &c., so, nevertheless, that a demand be in fact m,ade and authorized the mortgagee, on default of payment to enter, seize, and sell, and in the mortgagor's ab- sence from his place of business a demand was made there by the mortgagee upon his son, who stated his inability to meet it, and the mortgagee immediately seized, it was held that the notice required by the deed in the case of the mortgagor's absence was such Thornton, I C. B. 385. The taking {r) Congreve v. Evetts, 10 Exch. 308. of a bill of exchange is no suspension Hope v. Hayley, 5 Ell. & Bl. 847. of this remedy^ Bramwell v. Egling- Holroyd v. Marshall, 30 L. J., Ch. ton, 33 L. J., Q. B. 130. 287 ; 33 lb. ig3. (?) Belding v. Read, 3 H. & C. (j) Carr v. AUatt, L. J., Ex. 385. 955 ; 34 L. J., Ex. 212. (0 Belding v. Read, supra. Toms V. Wilson, 4 B. & S. 442. Iir.— 5 65 LAW OF CONTRACT. [Bk II. Ch. IV a notice' as might be reasonably supposed to reach him, and to give him an opportunity of complying with it within a reasonable time, and that the seizure was, therefore, not justified, {u) 1058. Bills of sale by judgment debtors and par- ties against whom execution has been issued. — The right of the sheriff to seize property under a writ of execution formerly dated from the time of the deliv- ery of the writ at the sheriff's office ; but it has been enacted {x) that no writ of execution or attachment against the goods of a debtor shall prejudice the title to such goods acquired by any person bona fide, and for a valuable consideration, before the actual seizi' re (jk) or attachment thereof by virtue of such writ, pio- vided such person had not, at the time when he . c- quired such title, notice {z) that such writ, or any other writ by virtue of which the goods might be seized or attached, had been delivered to, and re- mained unexecuted in, the hands of the sl.eriff, um'.er- sheriff, or coroner. 1059. Registration of bills of sale of chattel:. — To prevent frauds on creditors by parties in possession of moveables and personal chattels which appear to be their own property, but which have been secretly mortgaged to grantees or holders of bills of sale who have the power of taking possession of such chattels to the exclusion of other creditors, it has been enacted (a) that every bill of sale of personal chattels made absolutely or conditionally, whereby the grantee or holder has power immediately, or at anv future time, to seize or take possession of any property comprised {a) Massey v. Sladen, L. R., 4 Ex. Ex. 203 ; 40 L. J., Ex. 154. 13 ; 38 L. J., Ex. 34. (;) Gladstone v. Paduick, j-^z/nr. [x) 19 & 20 Vict. c. 97, s. I. (a) 17 & i3 \'ict. c. 36, and 29 \- [y) Gladstone v. Padwick, L. R., 6 30 Vict. u. 96. Sec. III.] MORTGAGE OF CHATTELS. (yj in such bill of sale, and every schedule or inventory thereto annexed or therein referred to, or a true copy thereof, and of every attestation of the execution thereof, shall, together with an affidavit of the time of the making of such bill of sale, and of the re.sidence and occupatio.n of the person making or giving the same, or, in case the same shall be made or given by any person under or in the execution of any process, then a description of the residence and occupation of the person against whom such process shall have issued, and of every attesting witness to such bill of sale, {b) be filed with the clerk of the docquets and judgments in the Court of Queen's Bench, within twenty-one days from the making thereof, {c) in like manner as a warrant of attorney is required to be filed ; otherwise such bill of sale shall be void 'as against assignees of the estate and effects of the person whose goods are comprised in such bill of sale under the laws relating to bankruptcy or insolvency, or under any assignment for the benefit of the creditors of such per- son, and as against sheriff's officers and persons seizing any property or effects comprised in such bill of sale in the execution of process authorizing the seizure of the goods of the person by whom such bill of sale shall have been made, so far as regards the property in, or the right to the possession of, any personal chattels comprised in such bill of sale, which, at the time of such bankruptcy, or insolvency, or assignment, or executing such process, and after the expiration of the said period of twenty-one days, shall be in the possession, ip) Attenborough v. Thompson, 2 Sanoner, 3 H. & N. 280. Bath v. Siit- H. & N. 559. Blackwell v. England, ton, 27 L. J., Ex. 388. 27 L. J., Q. B. 124. Allen v. Thomp- {c) Maiples v. Hartley, 30 L. J,, O. son, 25 L. J., Ex. 249. Tuton v. B. 92. Banbury v. White, 32 L. J., Ex. 259 ; 2 H. & C. 300. 68 LAW OF CONTRACT. [Bk. II. Ch. IV. or apparent possession, (d) of the person making such bill of sale, or as any person against whom the process shall have been issued under or in the exe- cution of which such bill of sale shall have been given. (^) When the bill of sale is made by way of mortgage, or if it is made or given subject to any defeazance, con- dition, or declaration of trust affecting its operation as between grantor and grantee, such defeazance, condi- tion, or declaration of trust must be written on the same paper or parchment as that on which the bill of sale is written before it is filed ; otherwise such bill of sale will be null and void as against the same persons and as regards the same property, as if the bill of sale or copy had not been filed. (_/") But, if the grantee under the bill of sale holds the property in trust for some third party who has advanced money upon the property included in it, such trust need not be declared on the face of the bill of sale. (£') These bills of sale, sched- ules, and inventories, or copies thereof, are to be num- bered and entered in a book, and alphabetical lists are to be kept of the name, residence, and occupation of the parties to them, (A) the dates of the execution and filing, the sum for which each bill of sale has been given, and the time when it is made payable, (z) ac- cording to a form given in the schedule to the 29 & 30 Vict. c. 96 ; and all persons are at liberty to search the books, index, &c., and to take office copies and ex- tracts. (^) If the debt for which the bill of sale has (d) Gough V. Everard, " H. & C. (^) Robinson v. Collingwood, 17.C. g ; 32 L. J., Ex. 312. 17 & iS Vict. c. B., N, S. 777 ; 34 L. J., C. P. iS. 36, a. 7- (/;) Hatton v. Englisli, 7 Ell. & Bl. (e) Pickai-d v. Bretz, 5 H, & N. 9 ; 94 ; 26 L. J., Q. B. 16:. 29 I.. J., Ex. iS. (i) 17 & iS Vict. c. 36, s. 3 ; 29 & 30 (/) 17 & I8 Vict. c. 36, s. 2. Vict. c. 96, s. 7. (.*) 2g & 30 Vict. c. 96, b, S. Sec. III.] MORTGAGE OF CHATTELS. 69 been given as security is satisfied or discharged, a mern- orandum of satisfaction may be endorsed on the regis- tered bill of sale or copy. (/) The act does not extend to bills of sale of ships, or vessels, or shares thereof, made by way of mortgage as a security for a debt, and duly registered under the Merchant Ship- ping Act. 1060. Renewal of registration. — The registration of every bill of sale must be renewed every five years, or it will cease to be of any force, {m) The renewal is to be effected by some person filing in the office of the masters of the Court of Queen's Bench an affi- davit stating the date of the bill of sales, and the names, residences, and occupations of the parties, and also the date of the registration of the bill of sale, and that it is still a subsisting security; and the masters are there- upon to number the affidavit and re-number the origi- nal bill of sale or copy filed in the office with a sim- ilar number. 1 06 1 . What is a bill of sale of chattels within the meaning of the Bills of Sale Acts.—\!ix\^&x the term " bill of sale " are included all assignments, transfers, declarations of trust without transfer, and assurances of personal chattels, growing crops, {ti) and all powers of attorney, authorities, or licenses to take possession of personal chattels as security f r any debt ; but the fol- lowing- documents and instruments of transfer are ex- pressly excluded from the operation of the statute ; that is to say, assignments for the benefit of creditors of the person making the same ; (Jacomber v. Pariier, 14 Piclc. 497; Cortelyou y. Lansing, ^ Cai. Cas. 200; Smith y. Atkins, t8 Vt, 4(11. To constitute a pledge there must be evidence that the transaction was in- Sec. III.] MORTGAGE OF CHATTELS. 99 1 09 1. Statutory rights and liabilities of pawn- brokers. — The rights and liabilities of pawnbrokers are now regulated by the Pawnbrokers' Act, 1872, {b) which took effect from December 31st, 1872. The Act, however, does not apply to loans of above ten pounds, or to loans made before the commencement of the Act, which are regulated by the old law. 1 092 . Who are to be dcemc d pawnbrokers. — Every person who keeps a house, shop, or other place for the purchase or sale of goods or chattels, or for taking in goods or chattels by way of security for money ad- vanced thereon, and who purchases, or receives, or takes in any goods or chattels, and pays, or ad- vances, or lends thereon any sum of money not exceeding _;^io, with or under any agreement orunder- standing, express or implied, or to be from the nature and character of the dealing reasonably inferred, that such goods or chattels may be afterwards redeemed or re-purchased on any terms whatever, is to bt deemed to be a pawnbroker within the meaning of thfe Act. {c) Every pawnbroker's name must be placed over the door of his place of business ; {d) and therefore a secret partnership in the business of a pawn broker is illegal and void, {e) 1093. Sale of things pledged. — -Pawnbrokers' sales are regulated by the provisions of the Pawnbrokers' Act. If, at any time before the sale has actually taken place, the pledgor tenders the principal, interest, (b') 35 & 36 Vict. i:. 93. (f) Armstrong v. Lewis, 2 Cr. & M. W 35 & 36 Vict. c. 93, ». 6. 297; 3 Myl. & K. 53. Gordon v. ((/) 35 & 36 Vict. u. 93, a. 13. Howden, 12 CI. & Fin. 242. Frazer v. Hill, I -Macq. H. L. C. 392. tended to constitute a pledge. Thompson v. Andrews, 8 Jones, 453. A pledge obtained by false representations vests no interest in a pledgee. Mead v. Bunn, 32 N. Y. 275. ' See Revised Statutes of N. Y., 6th Ed., vol. ii., 1006. TOO LAJJ' OF CONTRACT. [Bk. II. Ch. IV and expenses incurred, he has a right to have back the things pledged, and the pawnbroker can not law- fully proceed with the sale. (_/) 1094. Warranties on sales of unredeemed pledges. — We have already seen that, in the case of sales by pawnbrokers of unredeemed pledges expressly sold as such, the pawnbroker only warrants the sub- ject-matter of the sale to be a pledge the time for the redemption of which has expired. He sells merely his own title and interest in the pledge ; and it is the duty of a purchaser to investigate that title ; and, if he is evicted by reason of the want of title in the pledgor to make the pledge, he has no remedy over against the pawnbroker, unless the latter expressly warranted the title. 1095. Imperfect hypothecation of goods and chattels — Licenses to distrain to secure payment of a debt. — The common law repudiates the hypotheca- tion of chattels or movables in its general and ex- tended signification ; for, if parties who had bought things in a public market, or in the ordinary way of trade, of persons who had the possession and visible ownership of them, were liable, after they had paid the purchase money, to be called upon by third parties who had secret charges or liens upon such goods, for further payment, all public confidence would be de- stroyed, and trade and commerce annihilated. But the law permits goods and chattels to be subjected to what is called by Continental jurists imperfect hypothecation, i.e., a debtor may, by deed under seal, grant to his creditor a right to seize and sell a speci- fied chattel, or all his goods and chattels generally, in satisfaction and discharge of the debt, in case of the (/) Walter v. Smith, 5 B. & Aid. 441. Sec. III.] MORTGAGE OF CHATTELS. loi non-payment thereof at an appointed period. Such a power gives the creditor no right to follow the goods into the hands of third parties ; but so long as they remain in the possession of the debtor himself and continue his property, the creditor may seize them in the same way that a landlord distrains and sells the goods and chattels of his tenant on the demised premises for rent in arrear. (^g) A power of this description may be made to extend to all the after-acquired chattels of the debtor, as well as to the goods and chattels of which he was possessed at the time of the contract or grant, and is analogous to the power possessed by a creditor in the Roman and Conti- nental law, under a general hypothecation of present and after-acquired property. Where the owner of a cow, being indebted to the defendant for agistment, and being desirous of contracting a further debt for straw, &c., agreed with the defendant that the cow should stand as a security for the debt, and that the de- fendant should be at liberty, upon a certain contin- gency, to take the cow wherever he could find her, and hold her till he was paid, and, the contingency having happened, the defendant seized the cow, it was held that he had a right so to do, and that he was entitled to detain her as against the owner, until he received pay- ment of his debt, (^k) The right of detainer gives no right of sale, although it is exercised at great expense ; (z) but, if a debtor gives to his creditor a license to enter upon his land, and seize his cattle and crops, and sell them in satisfaction and discharge of the debt, the licensee will be justified, as against the licensor, in (g) Chidell V. Galsworthy, 6 C. B., {i) Thames Iron Works, &c.,v. Pat- X.S. 471. ent Derrick Company, 29 L. J., Ch. (/;) I ichards v. Symons, 8 Q. B. 714- ( o. \02 LAW OF CONTRACT. [Bk. II. Ch. IV. seizing and selling under the license. (/&) But the operation of a license of this description can not be extended beyond the imnaediate parties to it ; and, therefore, as soon as the rights of third persons intervene, the power or authority becomes nugatory and useless. Thus, where a vendor entered into a written agreement for the sale of a coach on credit, upon the terms that, if the price was not paid pursuant to the agreement, he " should have and hold a claim upon the coach ;" and the purchaser died, and the money not being paid, the vendor got possession of the coach and detained it as a security for the debt, it was held that, although he would have been justified in so doing as between himself and the purchaser, yet, the latter being dead, he had no right to detain it as against the purchaser's personal representative, (/) or against a trustee in bankruptcy, {iii) Neither can the license be assigned or granted over to another so as to enable the assignee to distrain upon the licensor; in) nor can it prevail, as we have seen, against the claim of a judgment creditor, so long as parties claim- ing under it have not perfected their title by taking- possession of the property before it is seized in execu- tion by the sheriff A legal interest in the property bona fide acquired before possession taken by the person claiming under the license, will prevail over the claim of the latter, (c) A promise to pay money when the debtor receives a debt, due to him from a third person does not amount to an equitable charge on the debt. (/) (/J) Carr v. AUatt, 27 L, J., Ex. ties, &c., 2S L. J., Q. E. 236. 335- (i') Reeve v. Whitmore, Martin v. (/: IIoHe, V. Ball, 7 B. & C. 4S4. Whitmore, 33 L. J., Ch. 63. And see (in) Carr v. Acraman, II Exch. Holroyd v. Marshall, 33 lb. 193. 566. (/) Field V. Megaw, L. R., 4 C. P. («i Erovvn ^. Metropolitan Coun- 660. Sec. III.] MORTGAGE OF CHATTELS. 103 1096. Registration of licenses to seize and sell goods and chaltels. 1097. Revocation of the license by act of bank- ruptcy. — A license to seize and sell chattels in satisfac- tion and discharge of a debt gives no title to any spe- cific chattels ; but, when executed by the creditor's taking possession of property under the license, it clothes the licensee with the ownership of such prop- erty, (q) If, therefore, a debtor, after he has granted his creditor a license of this description, assigns all his prop- erty to trustees for the benefit of the creditors, the license will be annulled as regards the property so as- signed ; and if the assignment should be void as being an act of bankruptcy, the property would be transferred to the trustee in bankruptcy free from the operation of the license, (r) 1098. Mortgages of ships and of shares in vessels. — It was at one time held that the Court of Chancery would give no effect to a contract to assign a ship as security for money due, not registered in accordance with the 17 & 18 Vict. c. 104. (s) But by the 25 & 26 Vict. c. 63, s. 3, the expression " beneficial interest," whenever used in the second part of the 17 & 18 Vict. c. 104, includes interests arising under contracts and other equitable interests ; and the intention of that Act is declared to be that, without prejudice to the provisions contained therein for preventing notice •of trusts from being entered in the register book or received by the registrar, and without prejudice to the powers of disposition and of giving receipts conferred by the Act on registered owners and mortgagees, and (q) Congreve v. Evetts, 10 Exch. 25 L. J., Ex. go. Baker v. Gray, 17 ^08 ; 23 L. J., Ex. 273. C. B. 462 ; 25 L. J., C. P. 161. r) Carr V. Acraman, II Exch. 566 ; (j) Liverpool Borough Bank v. Turner, 2g L. J., Ch. 827. :o4 LAW OF CONTRACT. [Bk. II. Ch. IV. without prejudice to the provisions therein contained relating to the exclusion of unqualified persons from the ownership of British ships, equities may be enforced against owners and mortgagees of ships in respect of their interest therein in the same maaner as equities may be enforced against them in respect of any other personal property. (^') The mortgagee is not to be deemed to be the owner of the ship or share, (u) nor the mortgagor to have ceased to be owner, except in so far as may be necessary for making such ship or share available as a security for the mortgage-debt. The mortgagor in possession may employ and charter the ship ; and the court will restrain the mortgagee from interfering with his contracts, (.r) The mortgagee has power absolutely to dispose of the mortgaged ship or share, and to give effectual receipts for the purchase- money ; but, when there are several mortgages, no subsequent mortgagee can, except under an order of court, sell such ship or share without the concurrence of every prior mortgagee. A registered mortgage of a ship or share is not affected by any act of bank- ruptcy committed by the mortgagor after the date of the record of the mortgage, notwithstanding the mort- gagor at the time of his becoming bankrupt may have the ship in his possession and disposition, and be reputed owner thereof Provision is made for the trans- fer of mortgages and for the transmission of the interest of mortgages, by death, bankruptcy, insolvency, or marriage, (jj/) The guardian of a registered infant owner of a ship has no power under the Mer- (t) See Ward v. Beck, 32 L. J., C. 789. Marriott v. Anchor Reversion- P. 113. ary Company, 30 L. J., Ch. 122, 571. (u) European, &c., Company v. Royal (jr) Collins v. Lamport, 34 L. J., Ch. Mail, &c.. Company, 4 K. & J. 676. 196. Dickenson v. Kitchen, 8 Ell. & Bl. (y) 17 & 18 Vict. c. 104, ss. 66-83. 3 E c. 11 1 .] MOR TGA GE OF CHA TTEL S. \0'-, chant Shipping Act, s. 99, to sell or mortgage the ship on behalf of the infant. {£) A mortgage of a ship carries with it the freight ; and a mortgagee who takes possession, or does some act equivalent to taking possession, before the freight becomes payable, is entitled as against the mortgagor and his assigns, to receive it ; {a) but, until the mort- gagee takes possession or does some equivalent act, the mortgagor is entitled to the freight, and is not ac- countable to the mortgagee for what he receives. When the mortgage is of the entirety of the vessel, the mortgagee may take exclusive possession ; when it is of shares only, he can not take possession so as to prevent the other part-owners from also taking pos- session. A mortgagee of shares In a ship may, with- out formally taking possession, give notice of his in- terest and require payment to himself of his share of the freight. {F) A mortgagee of a ship is entitled to payment in priority to materialmen not in such actual possession at the time of supplying the materials as to give them a lien, {c) A subsequent mortgage of a ship duly registered has priority over a claim for ne- cessaries. {cL) The first registered mortgagee of a ship, by taking possession of her before the freight is com- pletely earned, obtains a legal right to receive the freight, and to retain thereout not only what is due on his first mortgage, but also the amount of any sub- sequent charge he may have acquired on the freight, (z) Michael v. Fripp, L. R., 7 Eq. 675. Willis v. Palmer, 7 C. B., N. S. 95 ; 38 L. J., Ch. 2g. 34° ; 29 L. J., C. P. 194. Gardner v. (a) Rusden v. Pope, L. R., 3 Ex. Cazenove, i H. & N. 435 ; 26 L. J., 269 ; 37 L. J., Ex 137. Brown v. Ex. 17. Tanner, L. R., 3 Ch. 597 ; 37 L. J., (c) The Scio, L. R., 1 Ad. 353. Ch. 923. Wilson V. Wilson, L. R., 14 (r/) The Pacific, ? B. & L. 243. Eq, 32 ; 41 L. J., Ch. 423. The Two Ellens, L. R., 3 Ad. 345; [b] Cato V. Irving, 21 L. J., Ch. 41 L. J-, Ad. 33. io6 LAU' OF CONTRACT. [Bk. II. Ch. IV. in priority to every equitable charge of vvliich he had no notice ; and it makes no difference that a subse- quent incumbrancer was the first to give notice to the charterers of his charge on the freight, (c) A claim by a master for disbursements takes rank as a mari- time lien, and is prior to the claim of the mortgagee of the ship. (/) 1099. Maritime liens — Bottomry. — The contract of hypothecation of ships known to the civil law, and enforced in our courts of Admiralty, is a contract whereby the captain of a vessel in a foreign port, not having any credit in the port where the vessel is lying, is enabled to obtain money for the repair and equip- ment of the vessel, and for supplies and sea stores for the prosecution of the voyage, (_^) by creating a charge or lien upon the vessel itself in favor of the lender, so that, if the vessel is sold or mortgaged by the owners, it will pass burdened with the charge or debt into the hands of the purchaser or mortgagee. The charge or lien created by a contract of this de- scription is called a maritime lien. Wherever a mari- time lien exists, it gives a right or claim upon a vcr- sel, jus ad rem, to be carried into effect by legal process. This claim travels with the vessel into whosesoever possession it may come, and is enforced in the Court of Admiralty by a proceeding in rem. [Ii) By the Roman law, every person who repaired or fitted out a vessel, or lent money for those purposes had a lien upon the ship without a formal instrument of hypothecation. But by the law of England no such (t) Liverpool Marine Credit Co. v. disbursements for charges for whicli \Vllson, L. R., 7 Oil. 507 ; 41 L. J., the consignee of the cnrgo is liable ■eh. 798. are not the subject of bottomry. lb. (/) The Mary Ann, 35 L.J , Adm. 6. (//) Harmer v. Bell, 7 Moore, L. C. ( g) The Huntley, I Lush. 24. The 267. Menetone v. Gibbons, 3 T. R. Eihnond, 30 L. J., Adm. 12S. But 267. Ladbrot^e v. Crickelt, 2 lb. 649. Sec. III.] -MORTGAGE OF CHATTELS. 107 right can be acquired but by express agreement ; and a ship-master can only make such an agreement if he act within the scope of his authority. The contract by which a maritime lien is generally created by En- glish ship-masters is termed a contract of bottomr)', from the keel or bottom of the vessel being generally expressly hypothecated, or charged with the payment of the debt, and being used figuratively in the con- tract to denote the whole ship. It is essential to the validity of this species of hypothecation, that the sea risk should be incurred by the lender, that is to say, that the debt should be incurred, and charged upon the vessel, upon the understanding that, if the vessel is lost, the lender loses his money, but, if it arrives safe at the port of destination it shall stand charged with the payment of the debt. The master has no author- ity to hypothecate the vessel in any other manner ; (/) and the Court of Admiralty has no jurisdiction to enforce any other contract, (^k) As a remuneration for this risk, the creditor has always been entitled to take and charge upon the vessel any rate of interest or remuneration for the loan or debt that the parties might agree upon, termed maritime interest. (/) 1 1 00. Of the power of hypothecation of the ship- master. — The extent of the authority of the master of a vessel to bind the owners either of the ship or cargo is derived from, and governed by, the law of the flag. (ot) By our law the ship-master has no right to create a lien upon the vessel until he has made every reasonable endeavor to obtain supplies, repairs, or money, upon his own personal credit or that of the {i) Stainbank V. Fenning, IlC. B. Adm. 85. 51 ; 20 L. J., C. P. 226. (-0 J'^y V. Kent, Hardr. 418. (k) The Royal Arch, i Swabey, 281. (m) The Karnak, L, R., 2 A. & E. The Indomitable, 5 Jur- N. S., 632. 289 ; lb., 2 P. C. 505 ; 37 L. J., Adm. The Ida, L. R., 3 Ad. 542 ; 4i L. J., 41 ; 38 lb. 57- io8 LAW OF CONTRACT. [Bk. 11. Ch. IV. owners. (;/) It is not until all other means of obtain- ing necessaries fail, that lie has authority to hypothe- cate the ship, and to give maritime interest, which is in effect defeating the object of the adventure, and transferring to the creditor much of the profits of the voyage. If the master at a foreign port is able to communicate speedily with the owners, it is his duty to do so before he orders repairs or supplies ; (o) and where practicable he must do so before he can create a lien on the vessel. It is no excuse for not communicating with the owner under such cir- cumstances, that he is insolvent, unless he has been judicially declared so, and the ownership of the vessel has vested in his trustee in bankruptcy, in which case notice should be given to the trustee. (/) If the ship-master borrows money for his own pur- poses or for those of the consignee of the cargo, (^) as distinguished from those of the ship-owners, his contract .vill fail to create a lien upon the vessel, (r) Repairs executed, or advances made, on personal credit can not afterwards be converted into a bot- tomry transaction. There may, however, be cases of extreme urgency, where the ma-'ter is dead, and the merchant advances money intending to require a bottomry bond from the beginning, and gives the owners the earliest possible notice of his intention, in which the bond might be upheld, though no agree- ment for it was originally made • t ut they are cases (n) Heathorne v. Darling, i Moore, Lush. 484. The Hamburg, 32 L. J.,. P. C. C. 5. The Nelson, I Hag. 176. Adm. 161. La Ysabel, i Dod, 273. The Orelia, (p) The Panama, L. R., 3 P. C. 199 ■ 3 Hag. 84. The Dunvegan Castle, lb. 39 L, J., Adm, 37. 331- ('/') The Edmond, 30 L. J., Adm. (ff) Wallace v. Fieldin, 7 Moore, P. 128. C. C. 398. Duranty v. Hart, 2 Moo. (r) The Reliance, 3 Hag. 66. P. C, N. S. 289. The Olivier, i ■Six. III.] MORTGAGE OF CHATTELS. 109 cf exception to the general principle. The master ought, in general, to be distinctly apprised of the intention of a lender of the money to require a bottomry bond, that he may have time and oppor- tunity to exercise his discretion as to entering into the contract, or to try at least to take other means to avoid the necessity, to advise with the owners of the ship and cargo, if it be practicable, or, if not, at least to consult with persons on the spot. But, although, when a ship-master orders repairs and supplies on credit given to him personally, those who gave the credit can not take a bottomry bond, yet a merchant, a stranger to the transaction, or even an agent, if he has not made himself responsible, may advance money on bottomry to liquidate those demands ; (J) and a bottomry bond may, it seems, be given at the same time with, and as a collateral •security for, bills of exchange for repairs and necessaries for the voyage, in this sense that, if the bills of exchange are honored, the bottomry bond is discharged, {t') If, after a bond hypothecating the vessel has been entered into, the vessel becomes damaged, and puts into a foreign port for shelter, it can not be sold by the master so as to extin- guish the maritime lien ; and, as the doctrine of constructive total loss does not apply to bottomry bonds, if the ship is found unseaworthy, and sold, the bondholder will be entitled to a first charge •on the proceeds, {u) In the case of British ships, the certificate of registry is, as we have already seen, (s) The Wave, 15 Jur. 518. The Ex. 341. The Emancipation, i Wm. .Augusta, I Dods. 283. The Laurel, Rob. 124. 33 L. J., Adm. 17. («') The Great Pacific, L. R., 2 P. C. (/) Stainbank v. Shepard, 22 L. J., 516 ; 38 L. J., Adm. 45. no LAW OF CONTRACT. [Bk. II. Ch. IV. the great evidence of title ; and all bottomry bonds and hypothecations ought to be, and generally are^ indorsed upon it ; and no man should purchase .a British ship, even in a foreign port, without seeing the certificate. It is the duty of purchasers of British ships in foreign ports to make strict inquiries and be especially careful to guard them- selves against liens which adhere to the ship ; and they can not be safe in cases of sale by the master, unless recourse is had to a court of justice, and a decree is obtained for the sale of the vessel, (^x) A British consul in a foreign port is entitled, under certain circumstances of urgent necessity, when the master is dead, to hypothecate a vessel 'and cargo through the medium of a bottomry bond. (_j/) IIOI. Lien on vessels causino; damag^e, — The owner of a vessel damaged at sea by collision with another vessel has a lien upon the vessel causing the damage, which may be enforced in the Court of Admiralty by a proceeding in rem against the vessel, so that, if the vessel causing the damage is carried to a distant port, and sold to a bona fide purchaser without notice of the lien, the vessel may nevertheless be attached in the hands of such bona fide purchaser, and sold to satisfy such damage. But this lien may be lost by negligence or delay where the rights of third parties are thereby compromised, {z) A maritime lien is inchoate from the moment the claim or privilege attaches, and when carried into effect by legal process by a proceeding in rem, relates back to the period when it first attached, {a) But no bottomry bondholdcr (.1-) The Catherine, 15 Jur. 231. S., i. (;') The Cynthi.-, 16 Jur. 74S. {a) Harmer v. Bell, 7 Jloore, P. C. iz) The Europa, z .Mon. P. C, N. 2S5. Sec. 111.] MORTGAGE OF CHATTELS. in or mortgagee can be a competitor with a successful suitor in a cause of damage in the Admiralty Court. The lien of the latter will prevail over both the mortgage and the bottomry bond, unless the bot- tomry bond has been granted after the damage has been done. 1 102. Priority of maritime liens. — Where there were two bottomry bonds attaching on the vessel causing the damage, one entered into before, and the other after, the collision, it was held that the lien for the damage must be preferred to the lien of the first bondholder, but that it did not extend to the in- creased value of the vessel resulting from repairs ef- fected at the cost of the second bondholder, (b) Where several bottomry bonds have been given by the master at different periods during the voyage, those of the latest date have the priority of payment, on the supposition that the last bond operates for the protection of the prior interests, {c) A bottomry bond also executed under the pressure of necessity at a foreign port will supersede a previous mortgage of the ship, (d^ 1 1 03. Hypothecation of cargoes and ^nerchandisc. — The master of a ship may, under the pressure of ex- treme necessity, and where he is unable to communi- cate with the owner, (f) hypothecate the cargo as well as the ship, to enable him to raise funds to prosecute the voyage and deliver the goods at the port of des- tination. He is clothed with an implied authority to take whatever steps ought to be taken to protect them from impending destruction, [f) But he can (b) The Aline, I W, Rob. T20. 294. (c) The Betsy, I Dods. 289. The {i) Australasian Steam Navigation Rhadanianthe, lb. 201. Co. v. Morse, L. R., 4 P. C. 222. (,/) The Duke of Bedford, 2 Hag. (/) The Gratitndine, 3 Rob. 2Jo. 112 LAir OF CONTRACT. [Bk. II. Ch. IV. do no more than the owners themselves could if actually present ; and he can not sell against their will. (£■) He may create and continue a charge upon the cargo in favor of the lender of the money, so long as such cargo remains in his possession ; but he has no power to hypothecate it so as to enable the creditor to follow it after it has been sold or transferred. (/^) Where a ship, freight and cargo were hypothecated at a foreign port by one bottomry bond for necessary re- pairs, and the plaintiff's goods formed part of the cargo so hypothecated, and the ship and freight realized less than the sum borrowed, and the goods became liable for the deficiency, and the plaintiff was compelled to pay it to release his goods, it was held that he might maintain an action against the shipowner for the re- covery of the money he had been obliged to pay to release his cargo ; also that the shipowner could not abandon the ship and freight, and refuse to ratify the act of the master, because the costs and expenses ex- ceeded the value of the ship, when repaired, and the freight ; and that " a merchant advancing money on bottomry in a foreign port, though bound to show a reasonable case of unprovided necessity for the ad- vance, from the want of repair, or otherwise, is not bound to inquire into the expediency of incurring the expense of these repairs with reference to the interest of the owner." (z) By the French law, on the con- trary, the shipowner in a similar case may abandon the ship and freight, and, if he does so, will not be lia- ble to the shipoer for money paid to release the cargo, (/c) (^■) Australasian Steam Navigation Benson v. Duncan, 3 lb. 644. ■Co. V. Morse, L. R., 4P.C. 222. (i) Lloyd v. Guibert, 6 B. & S. (/;) Rusk V. Fearon, 4 East, 3ig. 100 ; L. R.. I Q. B. 115 ; 33 L. J., Q. (/) Duncan v. Benson, I Exch. 537. B. 241 ; 35 L. J., Q. B. 74. Sec. III.] MORTGAGE OF CHATTELS. 113 1 104. Illegal pledges. — By the Mercantile Ship- ping Act, 1854, s. 50, any pledge of the certificate of registry of a ship is made illegal and void ; and, there- fore, if a sole owner and captain pledges the certifi- cate for good consideration, he may nevertheless re- demand the document for the purposes of navigation, and may maintain an action against the pledgee if it is not delivered up on request. (/) 1 105. Moj'-tgages of fixt^ires may be made through the medium of any instrument of conveyance in writ- ing, and need not be by deed. (;;«) If certain fixtures are enumerated in a mortgage-deed, and there is then a clause embracing all fixtures upon the premises, fix- tures of all kinds will pass to the mortgagee, {ji) If the mortgagor makes default in payment of the mort- gage-debt at the time appointed, the mortgagee may proceed to sell, without taking proceedings to fore- close, and may apply the proceeds of the sale in liqui- dation of the mortgage-debt, interests, and costs, (d) But he will be ordered to account for and pay over any surplus that may remain. (/) If he does not think fit to sell, he can obtain a decree of foreclosure, r.nd bar the equity of redemption, and make the prop- erty his own. {(f) 1 106. Right to fixhires as between mortgagor and mortgagee. — A mortgagor in possession may become tenant-at-will to the mortgagee, or tenant at suffer- ance, but he is not, in general, tenant for any term. The cases, therefore, respecting the right to disannex and remove fixtures as between landlord and tenant, (/) Wiley V. Crawford, i B. & S. 253 ; {o) Tucker v. Wilson, i V. Wras. 30 L. J., Q. B. 319. Ante. 261. Lockwood v. Ewer, 2 Atk. {ill) Thompson v. Pettit, 10 Q. B. 303. loi. Ante. if) Harrison v. Hart, i Com. 393. (h) Haley v, Hammersley, 30 L. J., (?) Wayne v. Hanham, 9 Hare, 62. Ch. 771. III.— 8 114 J^ri'tV OF CONTRACT. [Bk. II. Ci-i. IV have no application to the case of mort2;agoi" and mortgagee. A mortgage made by the owner of the inheritance will, in general, pass all the fixtures thereon, though they are not named in the deed, and although they are trade fixtures which have been an- nexed to the freehold, for the more convenient using of them, and not to improve the inheritance, and arc capable of being removed without any appreciable damage to the freehold. (;-) They pass to the mort- gagee as part and parcel of the inheritance ; and the mortgagor does not, by becoming tenant to the mort- gagee, acquire any right to remove any portion of them, although they would be removable in ordinary cases as between landlord and tenant. {$) Trade fix- tures, affixed to mortgaged freehold premises after the mortgage by the mortgagor and his partner occu liv- ing the premises for the purpose of their trade, pass to the mortgagee, {t) 1 107- Registration oj bills of sale of Jixt7!rcs. — By the Bills of Sale Act, 1854, the expression "per- sonal chattels " in that Act includes fixtures capable of complete transfer by delivery. (?/) A conveyance of the freehold is not touched by this statute, and docs not require registration, merely because it carries with it a number of valuable fixtures annexed to the free- hold, (^r) Fixtures annexed to the freehold by the owner of the inheritance, for the purpose of improving the inheritance, are not fixtures capable of complete (r) Climie v. Wood, L. R., 3 Ex. il' Cotton, ex parte, 2 if. D. & D. 257 ; lb. 4 Ex. 328 ; 37 L. J., Ex. 158 ; 725 CuUwick v. S\\ indell, L. R., 3 38 lb. 223. Holland v. TI,,(lgs.,n, L. Eq. 249 ; 36 L. J., Ch. 173. R., 7 C. P. 328 ; 41 L. J., C. P. 146. (11) 17& 18 Vict. ^. 36, b. 7. (s) Walnisley v. Milne, 7 C. 1!., N. (x) Mather v. Eraser, " Kay & J. S. 115 ; 29 L. J., C. P. 97. Mather v. 558 ; 25 L. J., Ch. 361. Boyd v. Eraser, 2 Kay & J. 536 ; 25 L. J., Ch. Shorrock, L. R., 3 Eq. 72. Holland 361. Halsey v. Hammersley, 30 L. J., v. Hodgson, L. R., 7 C. P. 318 ; 41 I. Ch. 771. T., C. P. 14A. Sec. III.] MORTGAGE OF CHATTELS. 115 transfer b}^ delivery within the Bills of Sale Act. (jj/) But fixtures of this sort may, by the dealings and transactions of the owner of the inheritance, be dis- annexed from the. inheritance, and made transferable chattels ; and bills of sale of fixtures so severed and transferred independently of the freehold come within the operation of the Bills of Sale Acts, and must be registered. Wherever a deed of conveyance by way of mortgage creates a separate charge on machinery and fixtures distinct from the land, and gives the grantee a right to disannex such machinery and fix- tures from the freehold, and sell them, the instrument is a bill of sale of personal chattels, and must be regis- tered. Thus, where there had been a mortgage to M. of the freehold of a mill with all the mill machinery thereon, and then an assignment by the mortgagor of the equity of redemption to P., together with certain machinery which had been fixed in the mill by the mortgagor since the date of the first mortgage, and after that a further transfer by the mortgagor of ma- chinery which he had put into the mill since the date of the assignment of the equity of redemption, it was held that the parties to the separate transferring of the fixtures, having treated them as severed from the reversion, and transferable as personal chattels, had brought them within the operation of the Bills of Sale Acts, and rendered registration essential to the validity of the transfer as against assignees and credi- tors. {£) And where the mortgagor has a limited in- terest in the land, such as a term of years, and an absolute interest in the fixtures, and he mortgages his interest in both by the same deed, the instrument is, (y) Walmsley v. Milne, 7 C. B., N. &B1. 890 ; 26 L. J., Q. B. 100. Whit- S., 115. more v. Empson, 23 Beav. 313. (z) Waterfall v. Penistone, 6 EU. ii6 LA IV OF CONTRACT. [Rk. II. Ch. IV. so far as the fixtures are concerned, a bill of sale of personal chattels, and requires registration, (a) SECTION IV. MORTGAGE, ETC., OF INCORPOREALS. 1 1 08. Mortgages of shares and stock in a public company may be effected by the execution by the mortgagor of the ordinary deed of transfer conveying the shares to the mortgagee in consideration of the payment of the mortgage-money, as in the case of an absolute sale, taking at the same time a separate deed from the mortgagee, admitting that the transfer, though absolute on the face of it, was in reality made by way of mortgage, and undertaking to re -transfer the shares by a given day on repayment by the trans- ferror of the mortgage-money. If the transfer is on the face of it made conditional by way of mortgage, and not in the ordinary form of transfer given by the statute incorporating the company, the company will refuse to register it, as they can not, as we have seen, place on the register transfers complicated with trusts and conditions, {b) Foreclosure, and not sale, is the remedy of an equitable mortgagee of a share in a mining partnership, (c) If a person transfers his shares in a company, by Vi'ay of mortgage, and the mortgagee, as registered owner, becomes liable for calls or other payments, he (a) Ilawtiy v. Butler, L, R., 8 Q. B. pany, 6 Ell. & Bl. 415 ; 25 L. J., Q. B. 290 ■ 42 L. J., Q. B. 163. 342. {b) Reg. V. General Cemetery Com- {c) Redmayne v. Forster, L. R., z Eq. 467; 35 L.J., Ch. 847. Sec. IV.] MORTGAGE OF L\CORPOREALS. 117 can not compel his mortgagor to indemnify him, un- less he comes to redeem the shares, id') 1 109. Mortgages of stock and shares void by rea- son of reputed ownership. — If money is advanced on the security of a transfer of shares made by way of mortgage, and the transfer is not registered in the regis- ter of shareholders of the company, so that the mort- gagor still appears on the register as the holder of the shares, the shares will be in his order and disposition, and in case of his bankruptcy, will pass to his trustee, provided the legal power to transfer the shares still continued in the mortgagor ; but, if the transfer can not be made without the production of the mortga gor's certificates of proprietorship, and these certifi- cates have been placed in the hands of the mortgagee so as to give the latter an equitable lien upon them, then, as the mortgagor has no power of transfer, the shares are not in his order and disposition. (^) 1 1 10. Lien upon shares and stocks. — Certificates of proprietorship of shares frequently have a notice at the foot of them warning the shareholder that no trans- fer of his shares can be effected without the produc- tion of that certificate ; and the companies refuse to register a transfer deed unless the certificates of pro- prietorship of the transferror have previously been deposited at the transfer office. If, therefore, a share- holder borrows money on the security of shares, and deposits his certificates in the hands of the lender, accompanied by an agreement, in writing, to transfer the shares to the lender or to his nominee, in case of the non-paymerit of the money by the time appointed, there will be a good charge upon the shares ; (/) but (d) Smith's Man. of Eq., nth ed., (/) Richardson, ex f arte, 3 Dcac. p. 33g. 503. Littledale, ex parte, 5 De G. M. {e) Harrison, ex parte, 3 Deac. 196. & G. 730. Stewart, ex ^arte, 34 L. J., Ch. 6. n8 LAW OF CONTRACT. [Bk II. Ck. IV- notice of the deposit of the certificates should be given to the company, to prevent the shareholder from ob- taining fresh certificates by perjury or fraud, and to do away with the inference of reputed ownership in case of the bankruptcy of the depositor in whose name the shares are registered, and so prevent the title to the shares from vesting in his trustee. The fact that the company is not bound to take notice of any trust will not render a notice to them of the deposit of the certificates byway of security for a loan, nugatory, and will not prevent a deposit of the certificates of proprietorship by way of security for a loan from constituting a valid charge upon the shares. (^) Where a sister advanced her brother ^1800 on the security of a deposit of mining shares belonging to the brother, and received the certificates of the shares, together with an undertaking, signed by the brother, to complete the transfer of the shares to the petitioner when required, and placed the certificates and the undertaking in an inclosure which she sealed with her seal, and then deposited it in an iron safe belonging to her brother, for greater security, it was held that the certificates were not in his possession, order, or dispo- sition at all. He had certainly the custody of the packet, but could not lawfully have broken the seal to get at the contents. (/^) (g) Stewart, ex parte, supra, ex- {h) Ex parte Richardson, 3 Deac. plaining and qualifying Boulton, ex 503. parte, I De G. & J. 763. Slid.] PRINCIPAL AND SURETY. 119 CHAPTER V. OF CONTRACTS OF INDEMNITY. SECTION I. PRINCIPAL AND SURETY. 1 1 1 1 . Of ike contract of suretyship. — The contract or undertaking of a surety is a contract by one person to be answerable for the payment of some debt, or the performance of some act or duty, in case of the failure of another person, who is himself primarily responsible for the payment of such debt, or the performance of the act or duty. To the contract and engagement of suretyship it is essential that there be a principal or third party primarily liable ; for there can be no acces- sory without a principal, {a) If, therefore, no contract has been entered into with the third party on whose account the covenantor or promisor professes to act as surety, no liability attaches to the latter, as he can not be made primarily liable upon a contract by which he has expressly imposed upon himself only a secondary liabiHty as surety. From the terms and language of some contracts, a doubt frequently arises as to whether the contract is the contract of a surety coming in aid only of a principal debtor or contractc^r, and undertak- ing a secondary liability upon the default of the prin- cipal, or whether it is the contract of a principal and sole contracting party stipulating for some benefit or {a) Pothier (Obl.), No. 4-16-449. Inst. lib. 3, tit. 21, g 5. I20 LA IV OF CONTRACT. [Bk. II. Ch. V advantage for a third party, who is not bound by the contract, and < n whom no liability whatever attaches. (5) When a man, wishing to procure credit for his friend, writes a letter to a shopkeeper requesting him to supply such friend with goods, saying, " If he does not pay you, 1 will," the undertaking is the undertak- ing of a surety. If he says, " I will be answerable," or " I will see you paid," the expressions are equivocal ; and then we ought to look at the surrounding circum- stances to see what the contract really was. (<:) If, upon examination of those circumstances, it should appear that the party to whom the goods have been furnished has been treated as the debtor and principal contracting party, as, for example, if the credit has been given to him in the tradesman's books, and he has been applied to for payment, then the promisor can only be made liable as a surety after default on the part of such debtor and principal contracting party. If the promisor is himself interested in the subject- matter of the promise or the transaction to which it relates, he will stand in the position of a principal con- tracting party, (^d) But, where B verbally promised that, if M would supply C with iron, and take C's acceptances, he would discount them, it was held that this was a promise to answer for the default of another, and that ]M could not recover against B on his refusing to discount the acceptances, (c) 1 1 12. Autlientication of guarantees. — According to the Roman civil law, the engagement of a surety could only be contracted by stipulation. By our own common law it might be contracted orally ; but the (i) Ante. Spark v. Heslop, 28 L. J., [d) Fitzgerald v. Dressier, 5 Jur., N. (J. B. 197 ; I El. & El. 563. S., 598 ; 29 L. J., C. P. 113. (c\ Bavle\', B., Simpson v. Pcnton, (e) Mallett v. Bateman, L. R., I C. 2 Cr. & M. .U3. P. 163 ; 35 L. J., C. P. 40. Sec. I.] PRINCIPAL AND SURETY. 121 legislature has thought fit to require the engagement to be authenticated by writing ; and it has been en- acted as previously mentioned, by the fourth section of the Statute of Frauds' that no action shall be brought whereby to charge the defendant upon any special promise to answer for the debt, default, or mis- carriage of another person, unless the agreement upon which such action shall be brought, or some memo- randum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person by him lawfully authorized. Formerly, if the guarantee or undertaking was made by simple contract or by writing not under seal, the cause or consideration for the promise, as well as the promise itself, must have been disclosed upon the face of the writing; but, by the 19 & 20 Vict. c. 97, s. 3, no special promise made by any person to answer for the debt, default, or miscarriage of another person, being in writing, and signed by the person to be charged therevi^ith, or some other person by him thereunto lawfully authorized, shall be deemed invalid to support an action, suit, or other proceeding to charge the per- son by whom such promise shall have been made, by reason only that the consideration for such promise does not appear in writing, or by necessary inference from a written document. But parol evidence is not admissible to explain the promise ; and, therefore, the whole promise must be in writing, or the memoran- dum will be insufficient. (/") If the writing is so vague and uncertain that the nature and extent of the undertaking and liability can not be made out from the terms of the instrument, it will not constitute a (/) Holmes v. Mitchell, 7 C. B., N. S., 361 ; 28 L. J., C. P. 301. ' A7lte, T2- LAll' OF CONTRACT. [Bk. II. Ch. V. sufficient memorandum of the promise. (^) If, there- fore, the name of the principal intended to be guar- anteed is left out or left in blank, there is no sufficient memorandum of the contract, iji) The Statute of Frauds, as we have seen, does not apply to the case where the party giving the guaran- tee is himself liable to the demand which he is pur- porting to guarantee. The debt must be exclusiv^ely the debt, default, or miscarriage of another to bring it within the statute, yi) 1 1 13. Pri)nary and secondary liabilities. — When money is advanced, or goods are supplied, to a prin- cipal debtor, on the security of a joint and several covenant, or a joint and several promissory note, exe- cuted by the principal debtor and his sureties, for the repayment of the money advanced or the due pay- ment of the price of the goods, all the co-covenantors or co-promisors are primarily liable on the face of the instrument, and are bound to see that the mone)^ is paid on the day appointed for payment, so that, if de- fault is made, they may be at once sued upon the in- strument. Formerly, when two or more persons signed a joint and several promissory note as princi- pals, it was not allowed, at common law, to modify the effect of the contract by showing that one of them signed only as surety for the other ; but now the fact may be pleaded and given in evidence for the purpose of giving the party so signing the equitable rights of a surety, but not for the purpose of estab- lishing a different contract from that evidenced by the writing, such as that a party who has contracted a pri- mary obligation on the face of the contract was not ( -) Holmes V. Mitchell, ante. (i) Onell v. Coppock, 26 L. J., Ch. (/;) Williams v. Lake, 2 El. & El. 269. Ante. 349 ; 29 L- J-. Q. B. I. ?EC. I.] PRIXCIPAL AND SURETY. 123 intended to be primarily liable, but had agreed only to be secondarily liable after the default of another joint contractor. (/-) 1 1 14. Of tlic statement of the consideration 07i the face of a guarantee. — We have already seen that a by- gone transaction can not be made a good considera- tion for a promise ; but, if there is a valid considera- tion in point of fact, the mere statement of it in the past tense on the face of a guarantee will not invalid- ate the contract. The consideration, if disclosed, need not be expressed in v^rords of form, or with technical accuracy. (/) The contract must be interpreted in connection with surrounding circumstances, in order to ascertain whether it was intended to apply to past or to future transactions; and, in case of doubt and ambiguity, it would seem that parol evidence is ad- missible to show that the parties meant, not a past, but a future transaction ; {in) and the courts will lean in favor of such a construction as will uphold and main- tain the contract rather than render it nugatory and of no effect. {11) Thus, where the defendant gave to the plaintiffs the following guarantee : " As Mr. D. informs me you require some person as guarantee for goods supplied to him by you in his business, I have no objection to act as such for payment of your account," it was held that the expression " for goods supplied " did not necessarily import a past transaction, and ought to be read " for goods to (/f) Pooley V. Hai-radine, 7 Ell. & (/) Pace v. Marsh, 8 Mooie, 5^. IjI. 431. Greenough v. M'Clelland, Bochm v, Campbell, 3 Moore, 15. ■^ Ell. & Ell. 424 ; 30 L. J., Q. B. 15. Oldershaw v. King, 2 H. & N. 5lq ; 27 Manley v. Boycott, 2 Ell. & Bl. 46 ; L. J., Ex. 120. 22 L. J., ,Q. B. 265. Mutual Loan {m) Hoad v. Grace, 7 H. & N. 794 ; Fund, &c.,v. Sudlow, 5 C. B., N. S., 453; 31 L. J., Ex. 98. 28 L. J., C. P. 108. Lawrence v. (») Broom v. Batchelor, i H. & N. Walmsley, 12 C. B., N. S., 809 ; 31 L. 263 ; 25 L. J., Ex. 299. J., C. P. 143 T24 LAW OF CONTRACT. [Bk. II. Cli. V^ be supplied." (. E.lgo, 7 T. R. 424. (a-) Un. Camb. v. Baldwin 5 M & Dry v. Davy, 10 Ad. S: E. 30. Sec. I.] PRINCIPAL AND SURETY. 133 the proviso protects the surety from being answerable beyond the amount named, but does not render the obligation void if the advances go beyond it, (a) unless that clearly appears to have been the intention of the parties, {b) A guarantee to secure moneys to be advanced to a third party on discount, " for the space of twelve calendar months," is countermandable within that time, although some bills may have been dis- counted and repaid before notice. (<:) 1 123. Conimuing Liabilities, — Where a bond given by the defendant as surety, recited that the plaintiffs had agreed to advance to the principal " any sums of money not exceeding, at any one or more time or times, the sum of ^200, in the whole," and the bond was conditioned for the payment by the defendant as surety, of " all and every such sum or sums of money, not exceeding the sum of ^200. as aforesaid," as the plaintiffs should advance, it was held that this bond was a continuing or standing security, not confined to the first ^200 advanced, but extending to all future advances and payments thai might at anytime be made by the plaintiffs, {d) The courts, however, in the case of contracts of suretyship under seal, lean in favor of a construction limiting the liability of the surety to some particular supply or advance, so as to confine it within an ascertained definite limit, rather than extending it to a general and cont'inous supply, creating an indefinite liability, from which the surety might have no means of relieving himself during the whole life of the principal, {e) In [a) Seller v. Jones, i6 M. & W. (c) 06foi-d v. Davis, 12 C. B., N. S., 112. Gee V. Pack, 33 L, J„ Q. B. 49. 748 ; 31 L. J., C. P. 319. Baclchouse v. Hall, 6 B. & S. 507. (d) Batsoii v. Spearman, 6 Ad. & E. 34 L. J., Q. B. 141. 298- {b) Parker v. Wise, 6 AI. & S. 246. (e) Kirby v. Duke of Marlborough, Gordon v. Rae, 8 Ell. & Bl. 10S7. 2 M. & S. 22. 134 ^^^ff^ OF CONTRACT. [Bk. II. Ci-i. V. the case of simple contracts,on the other hand, no such leaning is found. Thus, where the defendant gave to the plaintiff a guarantee for the payment of " any goods he hath or may supply W. P. to the amount of ^loo," it was held that the guarantee was a continuing or standing guarantee, extending to all supplies of goods at any time furnished, so long as the parties continued to deal together. (/") So, where the guar- antee was, " In consideration of your supplying my nephew with earthenware and china, I hereby guar- antee the payment of any bills you may draw upon him on account thereof to the amount of _;^200," it was held to be a continuing guarantee, remaining as a standing security to the amount specified, so long as the supply of earthenware lasted, (^g) From a con- tinued liability under seal the surety has no means of escape at common law ; he can not recall the bond, covenant, or obligation that he has entered into, and say that he will be no longer responsible for advances or supplies to the principal, unless in the contract of suretyship he has expressly reserved to himself such a power ; (/z) and his liability may be prolonged indefinitely, and for the whole life of the principal. But, in the case of simple contracts, the surety (though liable for all advances and supplies that have been made on the faith of his promise) may at any time revoke such promise, and discharge himself from the future and continuing liability by giving notice to that effect. The following guarantees have been held to import a continuing liability: "I consider myself bound for any debt A. B. may contract with you in his busi- ness not to exceed _;^ I oo." (z) " I undertake to be (/) Mason V. Prilchard, 12 East. 227. {h) Hassell v. Long, 2 M. & S. 370. (i'l Mayer v. Isaac, 6 M. & W. 612. Calvert v. Gordon, I M. & R. 497 ; Hitchcock V. Hiimfrey, 6 Sc. N.R. 549. 3 .M-. & K. 124. Ilorlor V. Carpenter, 27 L. J., C. P. i. (/) Mcile v.Wells, 2 Campb. 413. Sec. I.] PRINCIPAL AND SURETY. 135 answerable to the extent of ^100 for any tallow sup- plied b)- you to A. B." (/■) " I hereby agree to guar- antee the payment of goods to be delivered in umbrellas to S. «Sl Co., according to the custom of their trading with you in the sum of ^200." (/) "As an inducement to you to sell W. C. goods and continue your dealings with him, I hereby undertake to guar- antee you in a sum of ^100, payable to you in default on the part of the said W. C. for two months ;" {iii) " In consideration of your agreeing to supply goods to K., we agree to guarantee any future debt with you to the amount of ;^6oo ;" (n) " In consideration of the credit given by the H. G. C. Co. to my son, for coal supplied by them to him, I hereby hold myself responsible as a guarantee to them for the sum of ^100 ; and, in default of his payment of any accounts due, I bind myself by this note to pay to the H. G. C Co. whatever may be owing to an amount not exceed ing the sum of ^100." (^) 1 1 24. Guarantees not importing a continuing liability. — The following guarantees have, on the other hand, been held to limit the liability of the surety to one solitary transaction, or to a particular course of dealing to a certain amount, and to be dis- charged or extinguished as soon as supplies or advances to the amount named have been made, and paid for or satisfied by the principal : " I engage to guarantee the payment of A. M. to the extent of £60 at quarterly account, bill two months, for goods {k) Bastow V. Bennett, 3 Campb. Heffield v. Meadows, L. R., 4 C. P. 220. 595 ; 38 L. J., C. P. 290. Laurie v. (/) Hargrave V. Smee, 3 M, & P. 573. Scholefield, L. R., 4 C. P. 622 ; 39 L. {m) Allan v. Kenning, 2 M. & S. 768. J., C. P. 63. Coles v. Pack, L. R., 5 (k) Martin v. Wright, 6 Q. B. 917. C. P. 65. Nottingham Hide, Skin, (o) Wood V. Priestnei", L. R., 2 Ex. and Fat Market Co. v. Bottril, L. R., 66, 282 ; 36 L. J., Ex. 42, 127. See for 8 C. P. 694 ; 42 L. J., C. P. 256. other cases of conlinuing guarantee-.. 136 LAW OF CONTRACT. [Bk. II. Ch. V. to be purchased by him of you ;" {p) " I agree to be answerable to K. for the amount of five sacks of flour, to be delivered to W. P., payable in one month ;" (^) " I agree to be answerable for the amount of ^50, for T. L., in case he does not pay for the gin he receives from you." (r) Where the guarantee was, " In consideration of your supplying Mr. S. with goods to the extent of ^100, I undertake to pay you if he does not," it was held that the liability of the surety was dependeat upon credit to the amount of ^100 being given if required, but that, if the debtor did not demand ^100 worth of goods, the surety would be liable for whatever was supplied. (s~) But, where the surety guarantees only the payment of one sum in solido, provided goods to the amount guaranteed are furnished, there is no cause of action against the surety until the full amount has been supplied. (/) 1 125. Conditions precedent to the liability of the surety. — If the continued liability of the surety is made dependent upon the observance of certain terms and conditions by the creditor, these terms must be strictly obeyed, or the surety will be discharged. (?<) Therefore, where the creditor took a warrant of attor- ney from the principal debtor with a stipulation for the benefit of the surety that, on notice from the lat- ter, the creditor should enter up judgment and levy execution upon the warrant of attorney, and apply the proceeds in reduction of the debt, and the creditor neg- lected to file the warrant of attorney, and to keep it {f) Melville v. Hayden, 3 B. & Aid. [t) Johnson v. Gandy, 26 Law T. 593- R. 72- {q) Kay V. Groves, 6 Bing. 276. («) Watts v. Sliuttleworth, 5 H. & (r) Nicholson v. Paget, I C. & M. N. 235. Lawrence v. Walmsley, 12 48. C. B„ N. S., 808; 31 L. J., C. P. {s) Dimmock v. Sturla, 14 M. & W. 143. 758, 15L. J.,Ex. 65. Sec. I.] PRINCIPAL AND SURETY. 137 up as an efificient security, it was held that the secur- ity was discharged, (.r) Where a party has consented to be co-surety with another, he can not be made re- sponsible if the other party refuses or neglects to be bound. Where, therefore, one of two intended co- sureties executed a deed of covenant for the re-pay- ment of advances to be made to the principal debtor, on the understanding that the money would not be advanced until the deed was executed by the other surety, and the deed never was executed by the other surety, it was held that the executing surety was en- titled in equity to be discharged from every part of the debt, (jj/) But a surety, who has executed a bond on the faith of its being executed by the principal debtor also, can not be released from his obligation on the ground that the principal has never executed it, if the principal has executed an instrument on which the surety may sue him and become a specialty creditor of his. (z) 1 1 26. Duty of the person guaranteed. — Where the person guaranteed does any act injurious to the surety, or inconsistent with his rights, or omits to do any act which his duty enjoins him to do, and the omission proves injurious to the surety, the latter will be discharged, {d) Thus, in the case of bonds and guarantees given to an employer to secure the faith- ful services of a clerk or servant in his employment, the surety has a right to expect from the employer that he will call upon such clerk or servant to account in the ordinary course of business, and that he will not {x) Watson v. Alcock, 22 L. J., (z) Cooper v. Evans, L. R., 4 Eq. Ch. 858 ; 17 Jur. 853. 45 ; 36 L- J-, Ch. 431. (j') Evans v. Brembridge, 8 D. M. (a) Watts v. Shuttleworth, 29 L. J., & G. 100; 25 L. J., Ch. 334. Bonser Ex. 234 ; 5 H. & N. 235 V. Cox, 4 Beav. 379. 133 LAW OF CONTRACT. [Rk. II. Ch. V. trust him beyond the bounds of ordinary prudence, {b) But the mere passive inactivity of the principal to whom a guarantee has been given, or his neglect to call the principal debtor to account, and to enforce payment against him, do not discharge the suret\' ; there must bo some positive act done to the prejudice of the surety, or such a degree of negligence as to im- ply connivance, and amount to fraud. The surety guarantees the honesty of the person employed, and is not entitled to be relieved from his obligation because the employer fails to use all the means in his power to guard against the consequences of dishon- esty, (yc) If, however, the master discovers that the person employed has been guilty of dishonesty, he must inform the surety, who has thereupon a right to withdraw from his guarantee (f/) ; and, if he omits so to do, the surety will be discharged so far as subse- quent acts of dishonesty are concerned. (J) 1 127. Alteration of the principal obligation dis- charging the S7ircty. — If a new contract is substituted in the place of the original contract, or if the original contract is altered in any material point without the surety's knowledge or consent, so as to constitute a new agreement varying substantially from the former, the surety is no longer bound. (_/) But, where one enters into a bond as surety for the performance bv another of two things which are separate and distinct, a subsequent alteration of the principal's contract as to one of them without the surety's consent, does not (/;) Smith v. Bank of Scotland, I {e) Phillips v. Foxhall, L. R., 7 Q. 1^"W. 292. B,, 666 ; 41 L. J., Q, B. 293. Sandev- (c) Black V. Ottoman Bank, 15 son v. Ailon, L. R., 8 Ex. 73 ; 42 L. Moo., P. C. 472. J., Ex. 64. (d) Burgess v. Eve, L. R., 13 Eq. (/) Gardner v. Wel-.h, 24 L. J., Q. 450; 41 L. J., Ch. 515. B. 284, overruling Catton v. Simpson, 8 Ad. & E. 136. Sec. I.] PRLWCIPAL A.YB SURETY. 139 release the surety from his contract of suretyship as to the other. (£■) Wheic the defendant had as surety signed a joint and several promissory note with the principal debtor, having no reason to suppose that any one else was to sign it, and afterwards the payee, with- out the knowledge of the defendant, induced another person to sign it in order to strengthen the security, it was held that the defendant was discharged from lia- bility. (/^) If the guarantee is a guarantee of the hon- esty and good conduct of the principal in any particu- lar course of dealing with the plaintiff, that course of dealing is part of the agreement of the plaintiff with the surety, and the plaintiff can not alter it and keep the surety liable. But, when the course of dealing is left to the option of the plaintiff altogether, or within certain limits, and is allowed by the contract, the surety can not complain of an alteration which he has himself permitted.^ If a man becomes surety for the payment of a debt secured by the bond of the debtor, payable at a given day, and the creditor before the day of payment has arrived, by an indorsement under seal on the bond, extends the time of payment, this is a material variation, amounting to the substitution of a new engagement in the place of the original contract, for the performance of which the surety is not bound, (z) ^ (,»•) Harrison v. Seymour, L. R., t 239. Gen. St. Nav. Co. v. Rolt, 6 C. P. 518 ; 35 L. J., C. P. 264. C. B., N. S., 550. [A) Whitcher v. Hall, 5 B. & C. 276. (z) Rees v. Berrington, 2 Ves. Bonar v. Macdonald, 3 H. L. C. 542. ' Ante, p. 138. ' See ante, noie, i, p. 131. Although an amendment neither increasing nor diminishing their liability, will not discharge the sureties to the usual bond given on release of a vessel seized by process of admiralty. Newell v. Norton and Ship, 3 Wallace (CJ. S.) 357; and see Giles v. Crosby, 5 Bosw. (N. 140 LAJV OF CONTRACT [Bk. II. Ch. V. 1 128. Extension of the time of payment. — Any enlargement of the time of payment by a binding contract with the principal debtor which ties up the Y.) 389 ; Miller v. Stewart, 9 Wheat. 680 ; Vose v. Florida R. R. Co., 50 N. Y. 369 ; and cases cited in note f, page 385. But a verbal agree.nent modifying a written guaranty is not good, nor can the surety show such in defense ; though it seems, that if tlie verbal agreement be accepted by the creditor, this might operate to discharge the surety. Brady v. Peiper, i Hilton (X. Y.) 61. A surety will not be discharged by usury; Mount V. Tappe}', 7 Bush. 617 ; nor by an agreement to receive a less sum than that stipulated for, when there is no other change in the agreement; Ellis v. McCormick, i Hilton (N. Y.) 313; and see Hunt v. Knox, 34 Miss. 655. As to variation in the subject-matter of the guaranty, see United States v. Corwine, I Bond, 339 ; Grant v. Smith, 46 N. Y. 93 ; Hanson v. Crawley, 41 Ga. 303; Ruble v. Norman, 7 Bush. (Ky.) 582 ; Fasnacht v. Winkelman, 21 La. Ann. 727. So merely taking a new security from a debtor without agreeing to give him time, will not discharge a surety. Gahn v. Niemcewicz, 11 ^Vend. (N. Y.) 312 ; affirming S. C, 3 Paige (N. Y.) 614; Elwood v. Diefen- dorf, 5 Barb. (N. Y.) 398; Williams v. Townshend, i Bosw. (N. Y.) 411; and see generally, Hubbell v. Carpenter, i Seld. 171 ; Pitts V. Congden, 2 Comst. (X. Y.) 352; Bangs v. Strong, 7 Hill (N. Y.) 250; Fo-x V. Parker, 44 Barb. 541 ; East River Bank v. Kennedy, 9 Bosw. (X. Y.) 543. The supreme court of the United States have taken very strong groimd upon the question of the discharge of a surety, holding that he is dis- charged, not only by payment by or release of his principal, but by any m.iterial change in the relations between the prin- cipal and the creditor. It is not enough to show that the change was not injurious to the suret}'. The surety has a right to judge for himself of the circumstances under which he was willing to be liable, and to stand upon the exact terms of his contract. Postmaster General v. Reeder, 4 Wash. C. C 678; U. S. V. Hillegas, 3 Id. 70; Miller v. Stewart, 9 Wheat. 680 ; U. S. V. Tillotson, i Paine, C. C. 304. So also in May- hew v. Boyd (5 Md. 102), the court said that any dealings with the principal debtor by the creditor, which amount to a departure from the contract binding a surety, and which by possibilitv might materially vary or enlarge such surety's liability without his consent, will discharge him. But a surety is not discharged from his liability by reason of a contract Sec. I.J PRINCIPAL AND SURETY. 141 hands of the creditor, and prevents him from suing the principal debtor upon the original obligation, dis- charges the surety, if it has been made without his as- sent or authority, inasmuch as the situation of the surety is varied and his liability prolonged beyond what was originally contemplated, {k) As soon as the principal debtor has made default, the surety has a right to step in and pay the debt, and require the cred- itor to sue, or allow him to sue, the principal in his, the creditor's name ; and, if the creditor has volunta- rily placed himself in such a position as to be com- pelled to say he can not sue the principal debtor, he thereby discharges the surety. (/) But a contract with a stranger to give time to the principal debtor, which contract does not prevent the surety from dis- charging the debt and pursuing his remedy over against the principal debtor, will not discharge such surety from liability ; {m) and it must be proved that there was either a new security given to extend the time of payment or a binding agreement upon suffi- cient consideration to suspend the remedy, {n) There is no obligation of active diligence against the principal debtor on the part of the creditor. It is the business of the surety to see that the principal (/•) Combe v. Woolfe, 8 Bing. 162; 17 C. B. 219. Bailey v. Edwards, 34 I M. & Sc. 241. Eyre v. Bartrop, 3 L. J., Q. B. 45 ; 4 B. & S. 761. The ATad. 221. Nisbet v. Smith, 2 Br. C. Oriental Financial Corporation v. C. 578. As tQ guarantees authorizing Overend, Gurney & Co., L. R. 7 Ch. the giving time to the principal 142 ; 41 L. J., Ch. 332. debtor, see Cowper v. Smith, 4 M. & {nt) Frazer v. Jordan, 8 Ell. & Bl. W. 519. Un. Bank of Manch. v. 312. J3eech, 3 H. & C, 672 ; 34 L. J., Ex. («) Parke, B., Moss v. Hall, 5 Exch. 133. 50. Bingham v. Corbitt, 34 L. J., Q^ (/) Williams, J., Strong v. Foster, B. 37. made with his assent between the principal debtor and the creditor. Wright v. Storrs, 6 Bosw. (NT. Y.) 600 ; Carlies v. Estes, 31 Vt. (2 Shaw) 653 ; Adams v. Way, 32 Conn. 160. 142 LA IV OF COXTRACT. FEk, II. Ch. V pays, not that of the creditor, {o) A mere promise, therefore, without consideration, not to sue the princi- pal dehtor for a certain time will not discharge the surety, (/) nor mere laches or forbearance, nor an omission on the part of the creditor, promisee, or obligee, to press the debtor or party liable, and sue him for the money, without any suspension of the legal remedies, {q) Nor will a parol agreement to enlarge the time of payment discharge the surety, when the principal obligation is under seal, inasmuch as such parol agreement can not in any way alter or affect the legal operation of the deed, or restrict or suspend the right of action thereon ; neither will the acceptance by the creditor of a collateral security from the prin- cipal debtor operate as a discharge of the surety, if the position of the latter has in nowise been altered or varied thereby; (r) nor will the surety be dis- charged if he himself has assented to the alteration of the principal obligation. In the case of an accommo- dation bill, known to be such to all the parties, the acceptor can only be considered a surety for the drawer, so that, if time be given to the drawer by a binding agreement, without the knowledge and con- currence of the acceptor, the acceptor is discharged. (o) Wright V. Simpson, i6 Ves. 734. 153. Goring v. Edmondb, 6 Bing. 94. Jervis, C. J., Strong v. Foster, 17 C. Dawson v. Lawcs, 23 L. T-. Ch. 434. B. 216. (,) Twopenny v. Young, 3 B. & C. (p) Tucker v. Laing, 2 K. & J. 210. Bell v. Banks, 3 Sc. N. R. 749- 503. (7) Orme v. Young, Holt, 84. (s) Laxton v. Peat, 2 Campb. 186. Lond. Ais. Comp. v. Buckle, 4 Moore, Bailey v. Edwards, 4 B. & S. 761 ; 34 L.J., Q. B. 41. ' It is important to observe that mere forbearance will not operate to discharge the surety, unless there be some agree- ment upon consideration which would prevent the creditor from suing. Hunt v. Knox, 34 Miss. (5 Geo.) 655 ; Kirb\' V, Studebaker, 15 Ind. 4s ; McMuUen v. Hinkle, ^q Miss. 14:: ; Sec. I.] PRIXCIPAL A.YD SURETY. 143 1 1 29. Proof of suretyship where the relation does not appear iipon the face of the contract. — The doc- trine of the discharge of the surety by tirne given to Oberndorfv. Union Bank of Baltimore, 31 Md. 126; i Amer. 31 ; Rucker v. Robinson, 38 Mo. 154; McCune v. Belt, 36 Id. iSi. But a giving of time to the debtor will discharge the surety. Blazer v. Bundy, 15 Ohio St. 57 ; Brookline v. Shum- way, 18 Wis. 98 ; Albany Ins. Co. v. Devendorf, 43 Barb. 444 ; Pilgrim v. Dykes, 24 Tex. 383 ; People's Bank v. Pearsons, 30 Vt. 711 ; Draper v. Trescott, 29 Barb. (N. Y.) 401, &c. ; Clip- penger v. Creps, 2 Watts (Pa.) 45; Bank v. Woodward, 5 N. H. 99; Bank v. Hoge, 6 Ohio, 17 ; Kennebec Bank v. Tucker- man, 5 Me. 130; Cunningham v. Wren, 23 111. 64; King v. Baldwin, 2 Johns. Ch. (N. Y.)S29; Coke v. Smith, 2 Serg. &; R. (Pa.) 113 ; and see Saill}' v. Ellmore, 2 Paige Ch. (X. Y.) 496 ; Baird v. Rice, i Call. (Va.) 18 ; Ellis v. Bibb, 3 Ala. 63 ; Hunt V. United States, i Gall. C. C. 32 ; Hunt v. Bridgham, 12 Pick. (Mass.) 581; Naylor v. Moody, 3 Black. (Ind.) 93; Miller v. Stein, 2 Penn. St. 286 ; Parnell v. Price, 3 Rich. (S. C.) 121 ; Waters v. Simpson, 7 111. 570 ; United States v, Hodge, 6 Plow. 279; Home V. Bodwell, 5 Gray (Mass.) 457; Hum- phreys v. Crane, 5 Cal. 173; Richards V. Commonwealth, 40 Penn St. 146; Hunt v. Knox, 34 Miss. 365. But if the agree- ment to give time be founded upon no consideration, it will not discharge the surety. Zane v. Kennedy, 73 Penn. St. 182 ; State V. Manning, 55 Mo. 142 ; Liebrandt v. Myron Lodge, 61 111. 81 ; Barnes v. Crandall, 11 La. Ann. 19 ; Jarvis v. Hyatt, 43 Ind. 163; Silmeyer v. Schaffer, 60 111. 479. And if such an extension as will release him has been given without his knowledge, and the surety, in ignorance thereof, again pro- mise to pay his principal's debt, such subsequent promise will not bind the surety. Montgomery v. Hamilton, 43 Ind. 451. Such a contract for extension of time may be implied by law — as where the debtor has accepted interest in advance, the law will imply an extension of time for the interval covered by such interest. Jarvis v. Hyatt, 43 Ind. 163; Hamilton v. Winterrowd, Id. 401 ; Morgan v. Coffman, 8 La. Ann. 56 ; Peacock v. Chapman, Id. 87 ; Deuill V. Martel, 10 Id. 643 ; see, however, Hayes v. Wells, 34 Md. 512; Hunt V. Roberts, 45 N. Y. 691; Bowen v. Darbey, 14 Fla. 202; Howard v. Clark, 36 Iowa, 270; Chickasan v. Pitcher, Id. 593. It has been said that mere delay, unac- comr'anied by a definite extension of time, under contract. 144 LAJV OF CONTRACT. FBk. II. Ch. V. the principal debtor, by a binding contract, is not con- lined to cases wliere the relation of suretyship appears on the face of the original contract between the cred- and for consideration, will not amount to such laches on the creditor's part as to discharge the sureties. Menitee v. Clark, 35 Ind. 304 ; Hunt v. Postlewait, 28 Iowa, 427 ; Davis v. Gra- liam, 29 Id. 514; Galbraith v. Fullerton, 53 111. 126; Pittsburg, &c., R. R. Co. V. Shaeffer, 59 Penn. St. 35 ; Pierce v. Golds- berry, 31 Ind. 52 ; Wakefield Bank v. Truesdell, 55 Barb. (N. Y.) 602; Preston v. Henning, 6 Bush. (Ky.) 556; Bridges v. Winters, 42 ^Nliss. 135 ; Buckalew v. Smith, 44 Ala. 638; Pit- man V. Chisholm, 43 Ga. 442; Hayes v. Wells, 34 ^Id. 512; Deal V. Cochran, 66 X. C. 269. So when a creditor received a check, with the understanding that the debtor, who drew the check, had no funds in the bank to meet it — but would have, in two or three days — it was held that this was not such a giving of time as would discharge the surety. Bordelon v. Weymouth, 14 La. Ann. 93. And where a transaction would otherwise have this effect of releasing a surety, it will not, either at law or equity, if the remedy against the surety is expressly reserved. See also, as to consideration, Lowman v. Yates, 37 N. Y. 601 ;"S. C, 3 Trans. App. 320; Smith v. Towns- hend, 25 N. Y. 479; Piatt v. Stark, 2 Hilt. (N. Y.) 399. As to usurious, see Draper v. Trescott, 29 Barb. 401. Part payment of a debt overdue is not such a consideration for a promise to extend time as will discharge sureties. Halliday v. Hart, 30 X. y. 474. The taking, by the plaintiff, of another bond, at a higher rate of interest, as collateral security to the original, and having a longer time to run, and the receipt of interest on such new bond, dues not release the defendant on his guaranty, although it appeared that the principal debtor became insol- vent subsequent to the taking of the new bond. Remsen v Graves, 41 N. Y. 474; but in Barhydt v. Ellis, 45 X. Y. 107 where it was held, that when, by the laches of the creditor, the surety's means of indemnity are impaired, his liability is dis- charged only to the extent of the loss sustained by reason of the laches. Mere delay to sue a principal, however long continued, will not discharge the surely. Williams v. Townsend, i Bosvv. (X. Y.) 41 1 ; Hunter v. Clark, 28 Tex. 159 ; People v. Jansey, 7 J(;hns. (N. Y.) 332 ; King y. Baldwin, 2 Johns. Ch. (X.'y.) 554; Kirby v. Studebaker, 15 Ind. 45 ; Pain v. Packard, 13 Johns. (X. v.) 174.; Powell v. Waters, 17 Id. 176; Goldsmith v. Brown, 35 Barb. (N. Y.) 484; Dorlon v. Christie, 39 Id. 610; Sec. I.] PRINCIPAL AND SURETY. 145 itor, the principal, and the alleged surety. (/) The equity arises from the relation of the co-obligors, or co- promisors inter se, and on the knowledge by the cred- itor of the existence of that relation, {zi) It is held (0 Rayner v. Fussey, 28 L. J., Ex. M. & G.,696. The Oriental Financial ■132. Corporation \. Overend, Gurney & {u) Davies v. Stainbank, 6 De Gex, Co., L. R., 7 Ch. 142 ; 41 L. J., Ch. 332. Thompson v. Hall, 45 Id. 2:4; Hunt v. Knox, 34 Miss. 655 ; Richards v. Commonwealth, 40 Penn. St. 146. But the neglect •of a creditor to sue when requested by the surety, discharges the surety, irrespective of any knowledge on the part of the creditor, or notice to him of any facts suggesting the probability that delay would prove injurious to the surety. Kaufman v. Wilson, 29.1nd. 504; Taylor v. Davis, 38 Miss. 493; Remsen V. Beekman, 25 N. Y. 552 ; Ranney v. Purvis, 38 Miss. 499; Cain v. Bates, 35 Mo. 427 ; Singer v. Troutman, 49 Barb. (N. Y.) 182 ; Simpson v. Blount, 42 Mo. 542. A request made by sureties to a creditor, to enforce securities held by the latter from their principal, does not impose upon the creditor the absolute duty of enforcing such securities without delay ; but if the creditor, in bad faith, unreasonably neglects or delays, or is grossly negligent, whereby the value of the securities is impaired, the loss occasioned is a defense available to that extent by the sureties. Black River Bank v. Page, 44 N. Y. 453 ; and see Hayes v. Ward, 4 Johns. Ch. (N. Y.) 123 ; Her- rick V. Borst, 4 Hill (N. Y.) 650; and what will constitute a request will depend upon circumstances. A request that a creditor should " push " the debtor, and " keep pushing him," was held, in Singer v. Troutman, 49 Barb. (N. Y.) 182, not to amount to a request to prosecute or collect. The loss of another security, in consequence of the mere passiveness of the creditor, as for example, his failure to record a mortgage, will not discharge the surety, the latter not having requested such action. Philibrooks v. McEwen, 29 Ind. 347. But see as per contra, Toomer v. Dickerson, 37 Ga. 428; Hampton v. Levy, I McCord Ch. (S. C.) 107 ; Long v. Brevard, 3 Strobe Eq. 59 ; and see Boyd v. Titzer, 6 Coldw. (Tenn.) 568; Remsen v. Beekman, 25 N. Y. 552; Wintersmith v. Tabor, 5 Bush. 105. In Kentucky, the release of a surety under section 11 of 2 R. S. c. 97, in case of a failure to issue execution on the bond within one year, &c., has been held not to apply to judicial bonds, the collection of which is controlled by the court. Rankin v. White, 3 Bush. (Ky.) 545 ; Barbee v. Pitman, Id. 259. 146 LAW OF CONTRACT. [Bk. II. Ch. V. to be inequitable in the creditor knowingly to prejudice the lights of the surety, although he may know of the existence of the relation of suretyship only at the time of his dealing with the principal debtor so as to prejudice such rights, {x) But extraneous evidence is not admissible for the purpose of showing that a party who, on the face of the contract, has incurred a primary liability, was only intended to be secondarily liable as a surety after the default of another principal contracting party, (j)/)^ 1 130. Effect of giving time to the principal debtor with reserve of refnedies against the surety. — If, after the principal debtor has made default, and the surety has become liable to the payment of the debt, the creditor, by a binding contract, agrees to give his prin- cipal debtor time for payment, and in the same con- tract expressly stipulates for the reservation of all his remedies against the surety, the latter will still remain liable, notwithstanding the arrangement between the principal and the creditor. {£) "The reserve of rem- {x\ Pooley V. Harradine, Greenough ( j') Hollier v. Eyre, 9 CI. & Fin. V. M'Clelland, Eailey v. Edwards, 4 45. B. & S. 761 ; 34 L. J., Q. B. 41. (3) Ld. Eldon, Ex parte Glenden- Taylor v. Burgess, I Law T. R. N. S. ning, Buck's B. 0. 519. 12. ' Tlie manifest intention to become a surety must clearly appear. See Menard v. Scudder, 7 La. Ann. 385. The obliga- tion of a guarantor is that Avhich the fair import of the language of the guaranty imposes upon him. Simons v. Steele, 36 K. H. 73 ; Benjamin v. Hilliard, 23 -How. (U. S.) 149 ; Scully v Hawkins, 14 La. .\nn. 183. But the law will imply no condi- tion which is not incorporated into the contract or fairly implied from its language. Bigelow v. Benton, 14 Barb. 123; Wright V. Johnson, 8 Wend. 512: Hunt v. Smith, 17 Id. 17, 179; Dobbin v. Brandley, Id. 422; Walrath v. Thompson, 6 Hill, 540; 2 Comst. (N. Y.) 185. Ordinarily, however, it is said that the contract of guaranty is one to be construed strictly against the guarantor. Bailey v. Larchar, 5 R. I. 530. Sec. I.] PRINCIPAL AND SURETY. 147 edies," observes Parke, B, " has that effect upon this principle ; first, it rebuts the implication that the surety was meant to be discharged, which is one of the reasons why the surety is ordinarily exonerated by such a transaction ; and secondly, it prevents the rights of the surety against the principal debtor being impaired, the injury to such rights being the other reason ; for the principal debtor can not complain if, the instant afterwards, the surety enforces those rights against him ; and his consent that the creditor shall have recourse against the surety is impliedly a consent that the surety shall have recourse against him." (a) And, if a security is taken which, by extending the time of payment, would operate to release the surety, the creditor may prove by parol evidence that an agreement was come to between the creditor and the principal debtor that the transaction should not have that effect, and may thus keep alive the liability of the surety. (J?) In the French law, and also in the civil law, an enlargement of the time given to the principal cred- itor for payment does not discharge the surety. " When," observes Pothier," the creditor, after the con- tract has been entered into, accords, through liberality, a certain term of payment to his debtor, he can not lawfully exclude the sureties from a participation in the benefit of such term ; for, as the agreement has the effect of qualifying the liability upon the principal obligation, and extending the term of payment, the obligation of the sureties necessarily receives the same modification, and they have the same term of payment as the principal debtor, it being the essence of the con- (a) Kearsley v. Cole, i6 M. & W. {i) Wyke v. Rogers, 2i L. J., Ch. 135. Price V. Barker, 4 EU. & Bl. 613. Boaler v. Mayor, 19 C. B., N- 77c ■ 24 L. J, Q. B. 134- S., 76 ; 34 L. J., C. P. 230. 148 LAW OF CONTRACT. [Bk. II. Ch. V. tract of suretyship that the surety should not be obliged to more than the principal." (c) 1 13 1. Release of the principal debt — Discharge of the surety. — If a debt secured by the collateral under- taking of a surety be unconditionally released or satisfied, the engagement of the surety is at an end, the extinguishment of the principal obligation neces- sarily involving in it the discharge of the surety. Reo liberato liberantur fidejussores. {d) If, therefore, a creditor, by deed of composition, releases his debtor and precludes himself from suing upon the original obligation for the original debt, the surety is dis- charged, unless the rights of the creditor against the surety have been expressly reserved on the face of the deed, {e) or unless by the terms of the guarantee the surety is not discharged by the release of the principal debtor, (y") " The surety," observes Pothier, " is dis- charged by novation of the debt ; for he can no longer be bound for the first debt for which he was a surety, since it no longer subsists, having been extinguished by the novation ; neither can he be bound for the new debt into which the first has been converted, since this new debt is not the debt for which he became bound." {g) 1 132. Release of the principal obligation, with reserve of remedies against the surety. — But, if the principal debtor has made default, so that the liability of the surety has accrued, and the creditor has an immediate right of action against him, the creditor (c) Pothier (Obligations), No. 204 ; 38 L. J. Ch, 76, 220. Dig. lib. 381. 14. tit- 3- (d) Webb V. Hewitt 3 Kay & J. (/) Union Bank of Manchester v. 444. Vorley v. Barrett, 26 L. J., C. Beech, 3 TI. & C. 672 ; 34 L. J., Ex. P. I. 133. (e.) Lewis V. Jones, 4 B. & C. 513, (^) Poth. (Gel.) No. 378. Cod. 515. Green v. Wynn, L. R., 4 Ch. lib. 8, tit. 41, lex. 4. Sec. I.] PRINCIPAL AND SURETY. 149 may compound with the principal debtor, receiving a portion only of the debt, and may release him from the payment of the residue, and at the same time reserve all his rights and remedies against the surety. (/«) A deed of release of this sort, with reserve of remedies against the surety, is construed as a covenant not to sue, in order that effect may be given to the intention of the parties, and the right of recourse against the surety be preserved, (z) Where, therefore, upon the grant of an annuity, two co-sureties entered into a joint and several covenant for the payment by them of the annuity, in case of default made by the grantor, and default was made by him, and the co- sureties became liable upon their covenant, and a deed was then entered into between the grantor and grantee of the annuity and one of the co-sureties, whereby, in consideration of all arrears of the annuity being paid up by such co-surety, the latter was- released from the future payment of the annuity, and from all further liability upon his covenant, but it was provided that nothing therein contained should prejudice the rights of the grantee of the annuity as against the grantor and the other co-surety, it was held that this proviso prevented the release from operating as a dis- charge of the co-surety, as it did not in anywise preju- dice the latter or increase his liability. (/^) But a release of a debt " in like manner as if the debtor had obtained a discharge in bankruptcy " is an absolute release, and, if given without the surety's consent, dis- (h) Ex parte G\enien-nmg,'R\\c]!.,'B. Ch. 76, 220. Roberts v. Crowe, L. C. 520 ; lb. 560. Boultbee v. Stubbs, R., 7 C. P. 629. Bateson v. Gosling, 12 Ves. 22. L. R., 7 C. P. 9 ; 41 L- J-, C. P. (»■) Hudson's Case, L. R., 12 Eq. I. 53. Nevill's Case, L. R., 6 Ch. 43. Green {k) Thompson v Lack, 3 C. B. 552. V. Wynn, L. K., 4 Ch. 204 ; 38 L. J., Kearsley v. Cole, 16 M. & W. 135. 150 LAW OF CONTRACT. [Bk. II. Cii. V. charges him. (/) It seems to be the result of the authorities that a release qualified by a reserve of the remedies against sureties allows the surety to retain all his rights over against the principal debtor, and operates only so far as the rights of the surety may not be affected ; (m) but it remains to be considered in every case, whether the arrangement between the principal debtor and the creditor does prejudicially affect the rights or remedies of the surety ; (;«) for, if it does, the surety is entitled to say that he is dis- charged. (t>)^ (/) Cragoe v. Jones, L. R., 8 Ex. (n) Owen v. Homan, 20 L. J., Ch. 81 ; 42 L. J., Ex. 68, 323 ; 4 H. L. C. 1037. [m) Price v. Barker, ante. {0) Wright v. Bandars, 3 Jur., N. S., 507. ' Release of the principal obligation will discharge the surety if it be by the use of securities. Succession of Pratt, 16 La. Ann. 357 ; Kennedy v. Bossiere, Id. 445 ; Richards v. Com- monwealth, 40 Pa. St. 146; or by funds applied. If the debtor at the time of payment fail to make the application, and the right to do so becomes the creditors, it is generall)' held that he may apply the payments upon the unsecured debt. Putnam V. Russell, 17 Vt. 54. But it has been held, the creditor must make a reasonable application, and one to which the debtor could not reasonably object. Ayer v. Hawkins, 19 Vt. 26; see also Hargraves v. Cooke, 15 Geo. 321; Livermore v. Rand, 6 Foster, 85; Callahan v. Boazman, 21 Ala. 246, &c., &c. It has been said that the payment should be applied in the manner most beneficial to the debtor; Hamer v. Kirkwood, 25 Miss. 95 ; Livermore v. Rand, 6 Foster, N. H. 85 ; and again, as a general rule, it should be applied to the oldest debt; Millikin v. Tufts, 31 Me. 497; Dows v. Morewood, lo Barb (N. Y.) 183; Hunter v. Osterhoudt, 11 Barb. 33; Cald- well V. Wintworth, 14 N. H. 431, &c., &c., &c. But if any understanding can be ascertained as existing between the parties, at the time of the payment, courts will follow that. Emery v. Tichout, 13 Vt. 15; Stewart v. Keith, 12 Pa. St. 238. A partial payment by the debtor will not, in any event, relieve the surety. Ellis v. McCormick, i Hilton (N. Y.) 313 ; Hunt V. Knox, 34 Miss. 555 ; Oberndorf v. Union Bank of Baltimore, 31 Md. 126; I Amer. 31; although a lawful tender of the Sec. I.] PRINCIPAL AND SURETY. 151 1 133- Release of one of several co-s7ireties. — A release by the creditor of one of two or more co- sureties releases all. (/) From some of the expres- (/) Cheetham v. Ward, i B. & P. 633. amount of his debt, by the principal, to the creditor may; Mitchell V. Merrill, 2 Black. (Ind.) 87 ; Brown v. Dysinger, i Rawle (Penn.) 407 ; Wallace v. McConneil, 13 Pet. (U. S.) 163; Joslyn V. Eastman, 46 Vt. 258. An acceptance by a creditor of a confession of judgment; Bank of Steubenville v. Leavitt, 5 Hamm. 207 ; Norris v. Crummey, 2 Rand, 323) ; or .a submission of the claim to an arbitration, Eldred v. Bennett, ■^■i Pa. St. 183 ; will discharge the surety. It is said that a surety might be discharged by the mistake or omission ot another, as in a case where the return upon a writ of replevin fails to state precisely what property is thereby replevied, the sureties on the bond are not liable to return such property as has not been taken. Miller v. Moses, 56 Mass. 128. A. levied on property belonging to B., on execution against B. and C, who were respectively principal and surety; and D. claimed this property and replevied it. Upon trial of the replevin suit, judgment was rendered against D. ; the property was returned to B.,and an action was commenced on the replevin bond. A. then brought suit on the original judgment against B. and C, and, upon recovering judgment, the same was satisfied by the ■surety C. Held, that the payment of the original debt to A. discharged D. from all liability on the replevin bond. Moore V. Campbell, 36 Vt. 361. This seems to be similar to the doc- trine of the civil law, that a surety is discharged from his obligation entered into under an error, either of fact or of law, and which he does not ratify by continuing the contract after the discovery. Burge on Suretyship, 231. The surety may i)e discharged, either in whole or in part, by process of a court, as in the case of an injunction being served upon him, as in Corning v. Elliot, 10 La. Ann. 753. A surety with others may be discharged by verdict and judgment in an action against his co-surety. Hill v. Morse, 61 Me. 541. Though where judgment was recovered against the principal and surety in a note, and subsequently action was brought thereon, and a new judgment obtained against the principal — held, that the surety was not discharged, even though the lien of the first judgment was lost by the rendition of the second. Perry v. Saunders, jfi Iowa, 427. In Harriman v. Egbert, Id. 270, it was held that notice from a surety to the creditor to bring suit upon the IS2 LAJl' OF CONTRACT. [Bk. II. Ch. V. sions of Lord Eldon, (^) it would seem that a credi- tor might release one of his joint debtors, and yet, by using some language of reservation in the agreement between himself and such debtor, keep his remedy en- tire against the others, even without consulting them ; but Lord Eldon's authority upon this point has been expressly overruled, (r) 1 134. Payment by the principal debtor operating as a discharge of the surety. — If a party becomes surety for the due payment of all money that comes to the hand of the principal, the surety is discharged, if the principal pays in such currency as the parties to whom the payment is to be made are willing to accept. If, therefore, they have the option of receiving cash, and choose, nevertheless, to take bills or notes from the principal which are ultimately dishonored, the surety is nevertheless discharged.^ Thus, where a country banker was appointed treasurer of a poor-law union, and the defendant became surety to the guardians for the due performance by him of the duties of his office, and the treasurer made a payment to the guardians,, {q) Ex parte Gifford, 6 Ves. 80S. 683. Evans v. Breravidge, 25 L. J., (r) Nicholson v. Bevill, 4 Ad. & E. Ch. 104. obligation, should demand that a suit be brought against all the parties, and not simply against the principal, otherwise failure of the creditor to bring suit will not discharge the surety; or, by a stay of execution against the creditor, given by a co-surety, to whom a judgment has been, in whole or in part, assigned; Smith v. Shidler, 3 Pitts. 550. ' But this is doubtful. When the obligation of the sureties is joint and several, the discharge of one of them does not release the others from payment of their proper proportion of the: claim. Klingensmith v. Klingensmith, 31 Penn. St. 460; Bar- row V. Shields, 13 La. Ann. 57; Alford v. Baxter, 36 Vt. 158-,: and see Remington v. Staats, i N. Y. S. C. R. (Thompson & Cook) 294; Garey v. Hignutt, 32 Md. 552. As to the substi- tution of a surety, see Adams v. Ives, i Hun (8 N. Y. S. C), 4.S7. Sec. I.] PRINCIPAL AND SURETY. 155, partly in cash, and partly in the notes of his owa bank, payable on demand, and the guardians kept the notes for a day or two, and the bank then stopped payment, it was held that the guardians, having elected to receive and keep the notes, could not, after the stoppage of the bank, repudiate the payment as against the surety, {s) A payment accepted by the creditor in good faith and without notice, but which . is afterwards avoided as a fraudulent preference, does not operate as a satisfaction of the debt, or discharge the surety, (t) If the principal debtor becomes bankrupt, the surety who has paid the debt has a right to stand in the place of the original creditor against the estate of the principal debtor ; and if the creditor has received a dividend out of that estate, the surety has a right to be paid that dividend, or to have it deducted from the amount for which he is liable, {u') and to have all future dividends secured to him, (x) unless he has agreed with the creditor that all divi-- dends received shall be applied as payments in gross, and that the guarantee shall apply to and secure any ultimate balance remaining due. (^y) If the primary security proves worthless, whether it was so originally, or whether it becomes so afterwards, the surety is not discharged, unless the loss or deficiency of the original and primary security was occasioned by the act of the creditor. (2) If the principal debtor has a set-oflF against the creditor arising out of the same (j) Guard. Lich. Un. v. Greene, i H. {x) Thornton v. M'Kewan, I Hem. & N. 889. & M. 525 ; 32 L. J., Ch. 69. {t) Petty V. Cooke, L. R. 6, Q. B. (;') The Midland Banking Co. v. 700. Chambers, L. R., 7 Eq, 179; lb., 4 \u) Gee V. Pack, 33 L. J., Q. B. 49. Ch. 398. Hobson V. Bass, L. R., 6 Ch. 792. {-.) Hardwick V. Wright, 35 Beav- 133. 154 LAW OF CONTRACT. [Bk. II. Ch. V. transaction, the surety may take advantage of it in an action against him by the creditor for the amount guaranteed, (a) 1 135. Fraud on stireties. — A creditor is not bound to inquire under what circumstances his debtor has obtained the concurrence of a surety, unless the dealings are such as fairly to lead a reasonable man to believe that fraud must have been used in order to obtain such concurrence, {h) If a person abstains from inquiry because he sees that the result of inquiry will be to disclose fraud, his want of knowledge of the fraud affords no excuse. In some cases willful ignorance is not to be distinguished in its equitable consequences from knowledge, {c) If, when a person agrees to become surety, any material part of the contract between the debtor and creditor is misrepresented or concealed from the surety with the knowledge of the creditor, the misrepresentation or concealment amounts to a fraud upon the surety, and discharges him from his engagement ; {d) but the principal is not bound to disclose to the surety every material circumstance known to him that may be cal- culated to affect or increase the responsibility of the surety, {e) Where a widow in straightened circum- stances took a house upon the terms that she was to take the furniture of the preceding tenant at a valua- tion, provided she could raise the money, and a surety came forward upon the understanding that the price (a) Bechervaise v. Lewis, I-. R., 7 5 Bing., N. S., 142. Railton v. C. P. 372 ; 41 L. J-, C. P. 161. Mathews, 10 CI. & Fin. 942. Spaight (/') Hamilton v. Watson, 12 CI. & v. Cowne, I H. & M. 359, Lee v. Fin. iig. Wythes v. Laboucliere, 5 Jones, 17 C. B,, N. S., 482 ; 34 L. J., Jur., N. S., 499. C. P. 131. Blest V. Brown, 3 GiSf. if) Owen V. Homan, 4 H. L. C. 450. 1035. {e) North Brit. Ass. Co. v. Lloyd, 'd) Stone v. Compton, 5 Sc. 846 ; 10 Exch, 523 ; 24 L. J., Ex. 14. Sec. I.J PRINCIPAL AND SURETY. 155 to be paid by her for the furniture had been settled ^t £70, and became responsible for the payment of that amount, but it afterwards appeared that there had been a secret understanding between the widow and the parties, that the real price was to be ^100, and that the widow had given two promissory notes to secure the payment of the additional ^30, the existence of which, as well as of the underhand agreement, had been kept back from the surety, it was held that the transaction was a gross fraud upon the latter. {/) So, where a surety had given a guarantee to the creditor to secure payment of iron of the value of ^200, to be supplied to the principal debtor, and it appeared that there had been a private agreement between the creditor and the principal debtor, that the latter should pay los per ton beyond the market price, to be applied to the liquidation of an old- standing debt due to the former, it was held that the agreement was a fraud upon the surety, which dis- charged him from liability upon his contract, {g) Where a surety was induced to execute a bond on a representation by the obligee that the principal was not indebted to him, which statement vi^as untrue, it was held that he was entitled to have the bond conceled. {/i) If a man finds that his agent has betrayed his trust, that he owes him a sum of money, or that it is likely he is in his debt, and, under such circumstances, requires sureties for his fidelity, holding him out as a trustworthy person, knowing, or having ground to be- lieve, that he is not so, he can not afterwards avail (/) Jackson v. Duchaire, 3 T. R. (h) Blest v. Brown, 3 Giff. 450. gj2. Cooper V. Joel, i De G. F. & J. (g) Pidcock V. Bishop, 5 D. & R. 240. 509. 511 ; 3 B. & 0. 605. iS6 LAW OF CONTRACT. [Bk. II. Ch. V. himself of a guarantee obtained from a party who was ignorant of what was known to, and ought to have been disclosed by, the employer. So, if a person whose honesty is guaranteed, makes defalcations, which the employer condones without notice to the guarantor, the latter is not liable for subsequent defal- cations, (i) But, if a person having doubts as to the circumstances of his agent, and therefore requiring fresh sureties, states his doubts at the time to these sureties, they have no right to complain when they are called upon to fulfill their engagement. (/§) 1 136. Discharge of the surety by the death of the principal. — Where the liability of the surety does not arise until after default has been made by the princi- pal, and the latter dies before making default, the surety is discharged. Thus, where A. becomes hound for the appearance or surrender of B. by a particular day, and B. dies before the day, A. is discharged from his obligation. (/) 1 137. Death of surety. — A. having guaranteed thus: "To C. I request you will credit B. ; and, ia consideration thereof, I guarantee the running bal- ance ;" it was held that the promise was not revoked by A.'s death without notice to C. from the execu- tor, {ill) ^ 1 138. Indemnification of sureties. — When the en- gagement of the surety is made with the knowledge and consent of the principal, there is in point of law an implied request from the latter to the surety to in- («■) Phillips V. Foxall, L. R„ 7 Q. B. 29. 666 ; 41 L, J., Q. B. 293. (;«) Bradbury v. Morgan, 31 L. J.^ (/J) Smith V. Gov. & Co. Bank of '•:-• "m And see Harriss v. Fawcett Scot., r Dow. 292. L. R., 15 Eq. 311 ; lb., 8 Ch. 866- (/) Sparrow v. Sowgate, W, Jones, 86g. ' See Pickersgill v. Lahens, 15 Wall. 141. Sec. I.] PRINCIPAL AA'D SURETY. 157 -erverie on his, 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 principal at his re- quest, which may be recovered from the latter, {n) The surety need not wait for the commencement of an action against the principal ; (0) but he can not accelerate the liability of the latter ; and, if he pays money voluntarily which he was not under any legal obligation to pay, he has no ground of action against the principal until the time of payment is past. A surety who has paid the debt of his principal is en- titled to rank as a simple contract creditor for the amount, and, if made executor, to retain it out of the assets of the principal against all other creditors of equal degree. (/>) By the French law, whether the surety has paid in consequence of a judgment of a court of law, or vol- untarily and without legal process, is a matter of no moment ; for, in either case, utiliter debitoris nego- tium gerit. He has procured his discharge from the debt, and ought, consequently, to be reimbursed what it cost him to do so. But, if he has paid before the time of payment has elapsed, he can not have recourse against the principal debtor until afterwards ; for he ought not by his own act to deprive the latter of the term of indulgence which he has a right to enjoy. (^) The surety may, however, by express contract, obtain a right to sue the latter before he has himself paid or satisfied the principal obligation. If the principal, for («) Kearsley v. Cole, l6 M. & W. (o) Small v. Currie, 5 De G. M. & 128. Boyd V. Brooks, 34 L. J., Ch. G. 159. 605. Si quid autem fidejussor pro (/) Boyd v. Brooks, 34 L. J., Ch. reo solvent, ejus recuperaudi causa 605. habet cum eo mandati judicium. In- (?) Poth. (Obl.)No. 431, 439. Dig. atit. lib. 3, tit. 21, g 6. lib. 17, tit. i.lex 22. IS8 LAW OF CONTRACT. [Bk. II. Cii. V. * example, covenants with the surety that he will pay the creditor the debt by a day named, and makes de- fault, the surety may sue him for the amount, although he has not himself, at the time he brings the action, paid any portion of the debt, (r) By the law of France, and by the civil law, the surety is under no necessity for securing to himself this right by express contract ; for, whenever the principal debtor falls into embarrassed circumstances, and is threatened with insolvency, that law accords to the surety a right to attach the goods and chattels of the principal debtor, and so provide himself with funds beforehand to answer the engagement he has entered into on his behalf, {s) If the surety has bound himself for the payment of a debt due from several joint debtors, and has been compelled to pay money on their joint account, they are jointly responsible to him for the repayment of the amount. (/) 1 139. Contribution between co-sureties. — It has previously been stated that, if several persons together become surety for one principal in respect of the same debt and transaction, either jointly or severally, or by the same or different contracts, (?/) and one of such co-sureties, after the liability of the principal has arisen, pays the debt, or satisfies the whole debt or claim, or more than his own proportion of it, he may have re- course to his co-sureties for contribution, and recover from them their several proportions of the common liability in an action for money paid by him for their [r) Loosemoie v. Radford, 9 M. & (a) And although they do not know W. 657. of each, other's liability. Dering v. (j) Poth. (Obl.) No. 442. Cod. lib. Earl of Winchilsea, i Cox, 318. 4, tit. 35, lex 10. Whiting v. Burke, L. R., 10 Eq. 539 ; M Polh. (Obl.) No. 440. lb., 6 Ch. 342. Sec. 1.] PRINCIPAL AND SURETY. 159 use, {x) unless the plaintiff seeking contribution has promised to save the defendant harmless, {y)- or the defendant has become surety at the request of the plaintiff, and for his accommodation, {z) In equity, where one of three sureties had paid a sum of money, it was held that he was entitled to recover one moiety from another of the co-sureties, the third having be- come insolvent; {a) but at law one of three co-sureties could only recover against any one of the others an aliquot proportion of the money paid, regard being had to the number of the sureties. (1^) If one of two co-sureties pays part of the debt only, and less than his moiety, he is not entitled to resort to his co-surety for contribution ; for the latter might subsequently have to pay an equal or greater portion of the debt ; in the former of which cases such co-surety would have no contribution to pay, and in the latter he would have one to receive ; and it would tend to multiplicity of suits and great inconvenience if each co-surety might sue all the others for a rateable proportion of what he had paid, the instant he had paid any part of the debt. But, whenever it appears that one has paid more than his proportion of what the co-sureties can ever be called upon to pay, then, " and not till then, it is also clear that such part ought to be repaid by the others, and that an action will lie for it. (f) Where the plaintiff and defendant, to- gether with the principal debtor, signed a joint and several promissory note, payable two months after date,. {x) Kemp V. Finden, 12 M. & W. {a) Peter v. Rich, i Ch. C. 34. 421. Hitchman v. Stewart, 3 Drew, 271. \y) Thomas v. Cooke, 8 B. & C. ili) Browne v. Lee, 6 B. & C. 697. 728. Kemp V. Finden, 12 M. * W. 421. (z) Turner v. Davies, 2 Esp. 47S. (c) Parke, B., Davies v. Humphreys, 6 M. & W. ifici. 5'6o LAW OF CONTRACT. [Bk. II. Ch. V. as sureties for such principal debtor, and the latter paid only a portion of the amount of the note on its becoming due, and the plaintiff then paid the residue, although no demand had been made upon him by the creditor for payment, and subsequently brought his action against the defendant, his co-surety, for contri- bution, it was held that he was entitled to recover a moiety of the amount he had paid, {d) All persons who by common consent put their names to an accom- modation bill, whether as drawers, acceptors, or in- dorsers, in order that one of them may get the bill dis- counted for his own benefit, are co-sureties for the due payment of the bill ; and, if the bill is dishonored at maturity, and one of them is compelled to pay the amount of the bill, and thus releases all the other par- ties from their common liability upon the instrument, the one so paying is entitled to contribution from the others. (' S., 543 ; 30 L. J., C. P. 42- Drew Gex & J. 464 ; 27 L. J.,Ch. 54. V. Lockett, 32 Beav. 499. Strange v. iji) Pearl v. Deacon, 24 Beav. 18G ; rooks, 4 Giff. 408. 26 L. J., Ch. 761. ii) De Wolf V. Lindsell, L. R., 5 (/) Newton \. Chorlton, 10 Hare. i66 LAW OF CONTRACT. [Bk. II. Ch. V. assignment of the principal security unless he pays the debt in full. (-!n) 1 141. Breach of contracts of indeimiity — Bank- ruptcy of principal debtor. — Where a surety guar- anteed the payment of any debt which the principal debtor might contract from time to time with the plaintiffs, as a running balance of account, to any amount not exceeding ^400, and the plaintiffs, on the faith of this guarantee, allowed the principal to get into their debt to the extent of ;^825, and the principal then became insolvent, and assigned his effects to trustees for the benefit of his creditors, and the plain- tiffs proved their debt of ^825 against his estate, and received from the trustees a dividend thereon of 8s. gd. in the pound, and then brought an action against the surety on the guarantee, it was held that the divi- dend was to be deducted rateably from the whole debt, as well the part covered by the guarantee as the part which was left uncovered ; and that the plaintiffs were trustees for the surety of the dividend of that portion of the debt which was covered by the guar- antee, and could only recover from the surety the bal- ance remaining of the ^400 after deducting the divi- dend. (;x) So, where two persons separately guaran- teed the payment of all goods supplied to A. B., so that their liability should not exceed ^250 each, and goods were supplied to A. B. to the amount of ^657, and he then became bankrupt, and the creditor proved for the whole amount, and, having obtained £,2'^o from each of the guarantors, afterwards received 2s. 650. Strange v. Fooks, 4 Giff. 412, {m) Ewart Latta, 4 Macq., H. L. C. Whiting V. Burke, L. R.,ioEq. 539; 983, Ib.,6Ch. 342. Wulfifv. Jay, L. R„ 7 («) Bardwell v. Lydall, 5 M. & P. Q, E. 756 ; 41 L. J., Q. B. 322. 335. Gee v. Pack, 33 L. J., Q. B. 4q. Sec. I.] PRINCIPAL AND SURETY. 167 id. in the pound on the ^657, it was held that each of the guarantors was entitled to a part of this divi- dend bearing to the whole the same proportion as /25oto ^657. {o) 1 142. Recovery of interest on money paid by siireties. — In casesof contracts of indemnity or surety- ship, where a surety has been compelled to pay money which the principal debtor ought to have paid, and has, consequently, been damnified by the loss of the use of his money, he is entitled, in an action on the implied contract of mdemnity against the principal, to recover interest on the money he has been compelled to pay ; (^) for in every contract of indemnity the party damnified is entitled to recover all such dam- ages, costs, and charges as reasonably and naturally result from the fulfillment by him of the obligation he has contracted on behalf of the principal debtor. (^) 1 143. Guarantees by one of several partners in the name of the co-partnership. — Where one of the several partners gave a guarantee in the trading name of the firm to secure the payment of a debt of a third party, it was held by Lord Elleneorough that there was no implied authority resulting from the mere existence of the co-partnership to any one or more of the partners to pledge the partnership name for such a purpose (r) And, where one of two attorneys in partnership together, in order to obtain the discharge of a client from custody, signed the partnership name to an undertaking to pay the debt and costs, it was held that the other partner, who had given no express authority to his colleague to give such an undertaking, (p) Hobson V. Boss I- R-> 6 Ch. Q. B. 242. 792. Midland Bank Co. v. Chambers, (?) Smith v. Howell, 6 Exch. 737. iL. R., 4 Ch. 398. W Duncan v. Lowndes, 3 Campb. (/) Pelre v. Duncombe, 20 L. J., 47S. i68 LAW OF CONTRACT. [Bk. II. Ch. V could not be sued thereon, as the giving of guaran- tees and undertakings of such a description was not within the usual course of business of attorneys ; and the law, therefore, would raise no inference of any authority from the one partner to bind the other by such an undertaking, {s) But if the guarantee, when it has been given, is notified to the firm, and they do not disseat from it, or if it refers to a partnership trans- action, and is given to secure the payment of goods supplied, or money advanced, to the firm, and received by the co-partnership, and added to the joint stock, or if it has been given to secure the performance of something within the ordinary scope and business of the firm, and which one partner generally has power to undertake for it on behalf of the firm, it binds all the partners, and all are liable to be sued thereon, {fy SECTION II. or MARINE INSURANCE. 1 144. Of contracts of insurance. — The contract of insurance is a contract whereby one of the con- tracting parties agrees to take upon himself, and pro- tect the other from, the risks and accidents to which any particular property or any particular individual maybe exposed, and covenants or promises, in consid- eration of a sum of money which the other contract- ing party pays or binds himself to pay to him as the price of the risk run, to indemnify the latter against these risks and accidents. The party who takes the (s) Hasleham v. Young, 5 Q. B. (0 £.t/«)* Notte, 2 Gl. & Jas. 3 '''. S33 ; 13 L. J., Q. B. 205. Brettel v. Sandiland v. Marsh, 2 B. & Aid. 67;. Williams, 4 Exch. 629. Ex parte O&t&oixi, 15 Ves. 2S6 Sec. II.] OF MARINE INSURANCE. 169 risk upon himself, or undertakes to indemnify, is called the assurer or insurer, and commonly in our law, the underwriter, from his subscribing his name at the bottom of the contract ; the party protected by the contract, the assured or insured ; and the money paid as the price of the indemnity, the premium for the risk ; whilst the contract itself, or rather the writ- ten instrument evidencing or constituting it, is called a policy of insurance. Many discussions have taken place respecting the precise nature of this contract. Pothier calls it a species of contract of sale. The as- sured, he says, are the vendors, the assurer the pur- chaser, and the thing sold is a risk attached to the thing assured, (ti) Other vriters make the contract a con- tract of letting and hiring ; some declare it to be a contract of mandate ; and others a contract of part- nership. In our own law it is considered, so far as it relates to sea risks and risks of fire, to be a guarantee or contract of indemnity. II45- Mutual insurance consists in the associa- tion of different proprietors of property exposed to the same risk, with a view of indemnifying at the common expense those members who suffer loss. The members of such an association are at the same time insurers and insured ; and the engagement which each of them contracts with the association at large as an insurer is the consideration or price of in- surance or indemnity which the society promises or guarantees to him in return. {£) 1 146. Policies of insurance. — The owner of the property or interest insured generally pays to the in- surer or underwriter a premium at a certain rate per cent. ; and the latter then subscribes the ordinary (u) Pohier, Contrat d'Assurance, {x) Encyc. du Droit, Assurance No. 4- 170 LA JJ^ OF CONTRACT. [Bk. II. Cii. V. written or printed instrument, called a policy of in- surance, whereby he expresses that he " doth make assurance" and cause the party 'to be insured " in a certain sum, on certain specified property, for a cer- tain voyage or for a certain time, against certain risks and perils which are enumerated and set forth in the policy. The policy is frequently preceded by a " slip, " which is a short memorandum of the terms of the insurance, to which the underwriters subscribe their initials, with the sums for which they are willing to engage. But the slip is often nothing more than an offer or proposal of terms preliminary to the con- tract. (7) ' 1 147. J'^oyage and time policies. — Vahied and open policies. — When the insurance is on a voyage from one port to another, without reference to time, (r) Rogers v. Macarthey, Park Ins. B. & S. 556 ; 33 L. J., Q. B. 41. Post. 3q. Parry v. The Great Ship Co., 4 ' This policy, it has been held, need not be in writing un- less the act of incorporation of the insurers so require. Bap- tist Church V. Brooklyn, &c,, Ins. Co , 18 Barb. 69 ; 19 N. Y. 305 ; and see Union Ins. Co. v. Commercial Ins. Co., 2 Curtis, Cj. C. 524, affirmed; Commercial Ins. Co. v. Union Ins. Co., I ) How. 318 ; Cockerill v. Cincinnati Ins. Co., 16 Ohio, 14S ; ('(Hirtnay v. Miss. Ins. Co., 12 La. 233 ; Berthoud v. Atlantic In--. Co., 13 Id. 539; Flint v. Ohio Ins. Co., 8 Ohio, 501; '5pitzer v. St. Mark's Ins. Co., 6 Duer, 6 ; Sanborn v. Fireman's Ills. Co., 16 Gray, 600; Smith v. Odlin, 4 Yeates, 468; Hamil- ton \'. Lycoming Ins. Co., 5 Barr. 339 ; but see Real Estate In^. Co. V. Roessle, i Gray, 336. The contract is signed b}- the insurers alone, but is binding upon both parties. Insur- aiK e Co. V. Smith, 3 Whart. 529; Patapsco Ins. Co. v. Smith, 6 llarr, & J. 165 ; that is to say, it becomes binding if the insurer subjects his property to the risk insured against, but not other- wise. Taylor v. Fowell, 3 Mass. 331 ; Loring v. Proctor, 26 Maine, 18; Blanchard v. Waite, 28 Id. 51; Woodruff v. Colum- bus Ins. Co , 5 La. Ann. 697 ; Perkins v. Washington Ins. Co., 4 Cowen, 645. Sec. II.] OF MARINE INSURANCE. 171 the policy is called a voyage policy ; but when it is from one fixed period to another, such as "from the I St of March, 1875, to the ist of January, 1876," or for three, six, or twelve months, &c., the policy is a time policy. When the value of the property insured, as between the assured and the underwriter, is expressed on the face of the policy, the policy is called a valued policy, (z) When it is not so expressed, but is left to be estimated in case of loss, the policy is called an open policy. In the one case the declared value establishes the pecuniary interest and loss of the assured as between himself and the under- writer ; and in the other the value has to be proved. " The only effect of the valuation is fixing the amount of the prime cost, just as if the parties admitted it at the trial ; " and this must be fairly done, with a view of obtaining a fair indemnity ; for, if the policy be enor- mously overvalued, that will be evidence of fraud, (a) In the absence, however, of fraud or wagering, a val- ued policy is valid, however largely in excess of the true value, (b) If the value declared is the value of a full cargo, and, at the time of the loss there was not a full cargo on board, the insurers are not liable for the full amount of the declared value, but only for the real loss, and the policy in such case must be treated as an open policy. (<:) ; for, as the contract is strictly a contract of indemnity for a real loss, the law will not permit it to be made ameansof profit and gain to one of the parties at the expense of the other.^ (z) Wilson V. Nelson, 5 B. & S. 354 ; 2S7. Barker v. Janson, L. R., 3 C. 33 L. J., Q. B. 220. P. 307- {a) Lewis v. Rucker, 2 Burr. 1171. {c) Tobin v. Harford, 32 L, J., C. P. (b) Irving v. Manning, i H. L. Cas. 134 ; 34 lb. 37. ' Post, § 1151. The valuation stated in a valued policy is conclusive upon both parties. Orient Ins. Co. v. Wright, 23 173 LAJV OF CONTRACT. [Bk. II. Ch. V. When the insurance is on goods, to he thereafter declared and valued, the assured has the power, by duly declaring and valuing before knowledge of the loss, to make the policy a valued policy ; but, if the assured do not so declare and value, it is then an open policy, and the interest is matter of evidence at the trial. The declaration, when made, does not require the assent of the underwriters. It is gen- erally put upon the policy for convenience ; but this is not necessary, nor is there any necessity for its being: in writing. The makinsf of the declaration is not a condition precedent which must be fulfilled by the assured before the liability of the underwriters attaches ; yet, in order to be available, it must be made and communicated to the underwriters, or some one on their behalf, before intelligence has How. 401 ; New York Ins. Co. v. Roberts, 4 Duer, 141 ; Car- ver Co. V. Manufacturers' Ins. Co., 6 Gray, 214; Hartshorn v. Shoe, &c.. Dealers' Ins. Co., 15 Id. 240 ; Sun Ins. Co. v. Wright, Id. 412; Edwards V. St. Louis Ins. Co., 7 Miss. 382; Douville V. Sun Ins. Co., 12 La. Ann. 259. But the valuation in a policy is not evidence of value of the thing insured except between the parties to it. Higginson v. Dall, 13 Mass. 96. And the valuation of the whole is conclusive as to the value of a part unless otherwise provided in the policy itself. Murray V. Columbian Ins. Co., 4 Johns. 302 ; Mayo v. Maine Ins. Co., 12 iMass. 259 ; Dumas v. Jones, 4 Id. 647 ; Walcott v. Eagle Ins. Co., 4 Pick. 127; Mutual Ins. Co. v. Munro, 7 Gray, 219; Clark V. Ocean Ins. Co., 16 Pick. 295; Brooks v. Oriental Ins. Co., 7 Id. 259; Minturn v. Columbian Ins. Co., 10 Johns. 75. If the property has no value, it is a wager- ing policy, and the above rules of course do not apply (see next note) ; and so excessive or absurd valuation would be fraudulent, and avoid the policy. Hersey v. Merrimack Co. Ins. Co., 7 Foster, 155 ; Protection Ins. Co. v. Hall, 15 B. Mon. 411 ; Catron V. Tenn. Ins. Co., 6 Humph. 185; Alsop v. Com- mercial Ins. Co., I Sumn. 473; Robinson V. iManufacturers' Ins. Co., I Met. 143; Gardner v. Col. Ins. Co., 2 Cranch, C. C 550; Ocean Ins. Co. v. Fields, 2 Story, 77. Siic. I I.J OF MARINE INSURANCE. 173 been received of the loss of the subject-matter of insurance. If it is not so made and communicated, the policy becomes, as we have already seen, an open policy, (d') Where the loss of the ship s not the risk insured against, but the risk depends upon some other contingency not known to have happened, die fact of the loss of the ship being known to both parties at the time the insurance is effected will not invalidate the policy; for the knowledge- that will vitiate a policy must be a knowledge of the loss of the subject-matter of the contract, {e) When the premium is paid down and received at the time of the making of the contract, the policy is not usually signed by both parties, but only by the insurer ; and in these cases, therefore, it partakes of the nature of a guarantee, the insurer warranting the safe arrival of the ship, cargo, or merchandise at the place of destination.' 1 148. Insurable interest. — IVagering and gam- ing policies of ins2irancc. — B\- the 19 Geo. 2, c. '^", s. I, it is enacted, that no assurance shall be made by any person on any ship, or on any goods or merchan- dise laden on board thereof, interest or no interest, or without further proof of interest than the policy, by way of gaming or wagering, or without benefit (d) Harman v. Kingston, 3 Campb. {e) Gledstanes v. R. Ex. Ass. Co., 5 151. Robinson v. Touray, lb. 159. B. & S. 797 ; 34 L. J., Q. B. 30. }.Iead V. Uavison, 3 Ad. & E. 307. ' A running policy is one that is open, and providing that the prope'rty to be insured shall be ascertained subsequently, and at certain times designated by indorsements on the policy itself. Newlin v. Insurance Co., 20 Pa. St. 1312 ; Neville v. Merchants' Insurance Co., 17 Ohio, 192. But these in- dorsements must be consistent with the policy itself; if incon- sistent, the indorsement will govern. Protection Ins. Co. v. Wilson, 6 Ohio St. 553. 17 A LAW OF CONTRACT. [Bk. II. Ch. V. of salvage to the assurer ; and that every such insu- rance shall be void. {/) * The fact of a person being named both shipper and consignee in a bill of lading is prima facie, but not conclusive, evidence of an insurable interest in him. If he is a mere agent without lien on the goods, or possession of them as a bailee, or liability to account for their loss by the perils insured against, he has no insur- able interest, {g) An insurance on profits of goods ladeQ on board a vessel is an assurance on goods within the meaning of this statute, (/z) Freight, or the profit derivable from the carriage of goods or the hire of a vessel, constitutes a good insurable interest ; and so does the profit which the shipowner ordinarily makes from carrying his own goods in his own vessel to a distant market, or any profits fairly expected to be made in the due course of trade ; (z)' also the special property which a carrier has in the goods entrusted to him to carry, or the interest which an executor has in the property of his testator before probate of the will has been granted, or the interest (/) ],owi-y V. Bourdieu, 2 Doug. 223 ; 25 L. J., Ex. 337. De Mattos 463. Kent V. Bird, 2 Cowp. 5S3. v. North, L. R., 3 Ex. 185. (g) Seagrave v. Union Marine In- (i) ll'Swiney v. R. Ex. Ass. Co., 14 surance Co., I.. R., i C. P. 305 ; 35 Q. B. 634 ; i3 L. J., Q, B. 193. Cliope L. J., C. P. 172. V. Reynolds, 5 C. B., N. S., 642 ; 28 L. ih) .Smith V. Reynolds, I H. & N. J., C. P. 194. ' The rule is the same in the United States. See Clark v, Ocean Ins. Co., 16 Pick. 295 ; Amory v. Gilman, 2 Mass. 13 ; Stetson V. Mass. Ins. Co., 4 Id. 336; Lord v. Dall, 12 Id. it8; King v. State Ins. Co., 7 Cush. 10; Alsop v. Commercial Ins. Co., I Suran. 464; Walcott v. Eagle Ins. Co., 14 Pick. 43''- ■ Mumford V. Hallett, i Johns. 433; Patapsco Ins. Co. v. Coulter, 3 Pet. 222; Alsop v. Com. Ins. Co., i Sumn. 451: Adams v. Warren Ins. Co., 22 Pick. 163; Paradise v. Sun Ins, Co., 5 La, x'Vnn. 596; Walcott v. Eagle Ins. Co., 4 Pick. 429. Sec. II.] OF MARINE INSURANCE. 175 which captors have in time of war in the prizes taken by them, (y§) or which the crown has in prizes before condemnation, or the freight which the freighter of a vessel has paid in advance, or the legal and equitable interest which mortgagors and mortgagees have in the mortgaged property, or the interest which a party has in the security of property the safety of which he has guaranteed for some deter- minable period, or the interest which a purchaser has in specific, ascertained chattels bought by him, but which remain in the hands of the vendor, covered by the lien of the latter for the unpaid purchase-money, (/) or which the charterer of a vessel, or the hirer or lessee of personalty or realty, has in the property entrusted to him to be used for hire. A defeasible or inchoate interest may be insured as well as an abso- lute and perfect interest, but not a mere expectancy. (;«) The wages of labor can not be assured ; for it would take away the stimulus to exertion to secure to the workman the payment of his wages at all events, and would be contrary to public policy. Formerly the interest which the underwriter him- self acquires in the safety of the property he has insured could not have been re-insured ; {n) but by the 27 & 28 Vict c. 56, s. i, re-insurance may now be effected upon any ship or vessel, or upon any goods. Whenever the policy is effected on property valued at a certain sum, and it is expressly provided that the policy shall be deemed sufficient proof of interest, the insurance is in principle an insurance {k) Le Cras v. Hughes, Park Ins. («) Devaiix v. Steele, 6 Bing. (N. C.) 568. Boehm v. Bell, 8 T. R. 154. 371. Stockdale v. Dunlop, 6 M. & Irving V. Richardson, 2 B. & Ad. W. 233. 193. W 19 Geo. 2, L. 37. (/) Sparkes y, Marshall, 3 Sc. 172. 176 LAIJ' OF CONTRACT. [Bk. II. Cii. V. ■" interest or no interest," and void within the statute. ((?) As no person can sue upon a policy who is not really interested therein, it follows that, if the assured assigns away his interest after the making of the policy, he can not maintain an action upon it for his own benefit. He can sue upon it only in one way, z.c, as a trustee for the assignee in a case where the policy is handed over to him upon the assignment. (/) But, wherever he sustains a bona fide loss by the de- struction of the subject-matter of the insurance, he is entitled to be indemnified, and may sue upon the con- tract ; and the court will not allow underwriters to get rid of their liability merely because the name of the party they have agreed to indemnify is not on the register. (^) If the policy is on goods lost or not lost, the indemnity extends to past as well as future losses ; and it is no answer, therefore, to an action on such a policy to say that the interest was not acquired until after the loss, (r) 1 149. Reqtiisites of the contract. — Contracts of in- surance must be expressed in a policy which must specify the particular risk or adventure, the names of the subscribers, and the sums insured, {s) If any cf these particulars are omitted, or if the policy is for any time exceeding twelve months, it is void. (/) And no policy can be pleaded or given in evidence unless it is duly stamped, except in the case of mutual insur- ances or of policies made abroad. (?/) But the slip, (p) Murphy V. Bell, 4 Bing. 567; I {s) 30 Vict. c. 23, ^. 7. Reid \. M. & P. 493. Allan, 4 Exch. 326. (/) Powles V. Innes, ir M. & W. {I) 30 Vict. 23,55. 7, 8. io. («) 30 Vict, c. 23, s. g. Ai to the {(]) Hutchinson v. Wright, 27 L. J., making of alterations in the policy, Ch, 835. see 30 Vict. u. 23, ». 10, By sect. 12 (r) Sutherland v. Pratt, II M. & insurances by carriers l>y ^e.i are to be W. 312. deemed to be contracts for sea in- surance. -•Sec. II.J OF HIARINE INSURANCE. 177 although not valid as a contract, may be given in evi- dence to show the intention of the parties, {xf By the 28 Geo. 3, c. 56, it is enacted that it shall not be lawful for any person to effect a policy of insurance upon any ship, or upon any goods, merchandise, or property whatever, without first inserting in such pol- icy the name or the usual style and firm of one or more of the persons interested in such insurance, or of the consignor or consignee, or of the person in Great Britain receiving the order to insure and effect- ing the insurance, or of the person who shall give the order to the agent immediately employed to negotiate the policy, (jk) If the policy is effected by a policy broker or agent " for the benefit of all parties inter- ested," these last may become privy to the contract by adopting it ; (^z) and any person who acquires an interest in the subject-matter of the insurance, whilst it is covered and protected by such a policy, may sue thereon for an indemnity against loss. («)^ The sub- ject-matter of the insurance must be correctly and clearly described, so that the things insured may be (jt) lonides v. The Pacific Fire 316. Mellish v. Bell, 15 East, 6 and Marine Insurance Co., L. R., 7 Hibbertv. Martin, i Campb. 53S. QW. 517 ; 41 L. J., Q. B. igo. And (z) Hagedorn v. Oliverson, 2 M. & see Fisher v. The Liverpool Marine S. 490. Barlow v. Leckie, 4 Moore, Insurance Co., L. R., 8 Q. B. 469 ; 42 8. Stirling v. Vaughan, 11 East. L. J., Q. B. 224. 6ry. (y) Wolff V. Horncastle, I B. & P. (a) Sutherland v. Pratt, II M. & W. 296. ' Any competent parties may contract, but insurance for the benefit of an alien enemy is void. 2 Parsons on C. 360. Although a trade or transaction otherwise unlawful by reason of war, may be made lawful by special license. Id. ' Rogers V. Traders' Ins. Co., 6 Paige, 543. And the policy ■expressing that the insurance is made by A. B. for is an insurance for those parties interested in the property whose names were intended to be filled in the blank space. Turner V. Burrows, 8 Wend. 150 ; 24 Id. 276. nr. — 12 178 LAJV OF CONTRACT. [Bk. II. Ch. V. ascertained and identified, and so that it may be known to what articles the risk attaches, whether it be to the ship, the freight, or the whole or part of the cargo, (i^} 1 150. Matters and things covered by the policy. — If a person insures a cargo to be laden on board on the Brazilian coast, the policy will not cover and pro- tect a cargo taken on board on the coast of Africa, (c) If the ship only is insured, the policy will not, of course, cover and protect the merchandise laden on board ; {d) and, if the insurance is merely on " the ship's tackle and furniture," it will not cover stores, harpoons, lines, and fishing-tackle, put on board to be used in the whale fishery, {e) unless the vessel is de- scribed in the policy as a whaling vessel, and the in- surance is declared to be made on a whaling adventure. The provisions of the crew are covered by a policy on " the furniture of the ship." (/) But, if a ship is disabled and puts into port to re-fit, or is detained by an embargo, the extraordinary wages and provisions for the crew during the detentioa can not be charged against the underwriter of a policy on the ship, cargo, and furniture. (_^) A mere mistake in the name of the ship will not avoid the policy and discharge the un- derwriters, if the identity of the vessel with the vc*ssel named in the policy is clearly established, and the un- derwriters have in nowise been prejudiced by the mis- take. (Ji) Whatever is considered, by the custom and usage of trade, to be comprehended under the term " goods, specie, and effects " will be covered by a policy {b) Crowley v. Cohen, 3 B. & Ad. (/) Brough v. Whitmore, 4 T. R. 485. 206, {c) Robertson v. French, 4 East, {g) Robertson v. Ewer, I T. R. 132. 130. De Vaux v. Salvador, 4 Ad. & E. {a) Molloy, b. 2, c. 7, s. 8. 420. ii) Hoskins v. Pickersgill, Park Ins. (Ii) Ee Mesurier v. Vaughan, 6 126. East, 385. Sec. II.] OF MARINE INSURANCE. 179 upon such property. Money expended by the cap- tain in the course of the voyage for the use of the ship, and for which respondentia interest was charged, is in some trades included by custom under these words. (?) A general policy of insurance on goods laden on board a particular vesstl extends to all goods which form part of the cargo, and will cover and protect goods laden on deck, provided it is cus- tomary for goods to be so laden, and the risk of the insurer is not thereby increased beyond what must be presumed to have been contemplated at the time the insurance was effected, (i) If the insurance is upon all goods that may be laden on board a particular vessel on an outward and homeward voyage, the pol- icy will attach on any goods that may be carried out or brought back on board such vessel. (/) If the as- surance is on goods from " any port or ports in the East Indies" to "any port or ports" in this country, the insurance will cover any goods that may be shipped from the East Indies for England, whatever ves- sel may be selected for their conveyance. {111) And, if an insurance is effected on goods on board " any ship or ships "that may sail during a particular period from one port to another, or from one part of the world to another, and goods of the assured are laden on board different vessels, some of which arrive safe and others are lost, the assured will have a right to apply the policy to the ships that are lost, and the un- derwriters can not discharge themselves from liability by showing that ships answering the description in the policy have arrived safe, {n) ^ ii) Glover v. Black, I Park Ins. ro (/) Grant v. Paxton, i Taunt. 463. {k) DaCostav. Edmunds, 4 Campb. (/«) Hunter v. Leathley, loB. &C. 142. 858. (?/) Kewley v. Ryan, 2 H. Bl. 343. ' But in the absence of fraud, a policy of marine insu- i8o LAIV OF CONTRACT. [Bk II. Ch. V. Oral evidence is admissible to explain the cus- tomary meaning of terms used in a particular trade, but not to add a new terra to the contract, or to show that more things were intended to be insured than are ordinarily or customarily included under the express term of the contract. 1 151. Implied warranties. — Seaworthiiiess of the vessel. — Tijne policies and voyage-policies. — There is an implied warranty in voyage policies on the part of the insurer that the ship insured is seaworthy, "tight, staunch, and strong," at the time of the commencement of the voyage ; but in the case of time policies there is no such warranty, although the time policy be effected upon an outward-bound ship, lying in a Brit- ish port, where the insuring owner resides, or on a new vessel about to undertake her first voyage. ((?)^ Before the assured, however, can recover against the under- writer upon a voyage policy, " he is bound to prove, not only that the ship was tight, staunch and strong, but that she was properly equipped with sails and stores, and that she was manned with a sufficient crew to navigate her on the voyage insured. These are con- ditions precedent to the policy attaching, and, if they are not complied with, so that the perils are enhanced, from whatever cause this may arise, and though no {0) Fawcus V. Sarsfield, 6 Ell. & Bl. B, 240. Gibson v. Small, H. L. C, 4. 200; 25 L. J., Q. B. 249. Thompson 353. Small v. Gibson, 16 Q, B. 158. V Hopper, 6 Ell. &B1. 172 ; 25 L. J.,Q, Michael v. Tredwin, 17 C. B. 551. ranee will be liberally construed, and matter intended bv the insured to be brought within the terms of the policy will be included in it. Ruan v. Gardner, i Wash. C. C. 145; Sea Ins. Co. V. Fowler, 21 Wend. 600; New York Ins. Co. v. Roberts, 4 Duer, 141 ; Ballard v. Merchants' Ins. Co., 9 La. 258 ; Sorbe V. Merch. Ins. Co., 6 Id. 185; Murray v. Columbia Ins. Co., II Johns. 302. ' See ante, note i, p. 660, vol. ii. Sec. II.] OF MARINE INSURANCE. i8r fraud was intended by the assured, the underwriters have a right to say they are not liable ;" {p) but the assured is not obliged to keep the ship seaworthy throughout the voyage, or during the period of the risk. {(jY The insurer is entitled to expect that the (f) Ld. Ellenborough, Wedderburn (q) Jenkins v. Heycock, 8 Moo., P. V. Bell, I Campb. i. Douglas v. C. 361. Biccard v. Shepherd, 14 Scougall, 4 Dow. 269. Moo., P. C. 471. ' Id. The implied warranty of seaworthiness is of the foundation of the contract, and includes everything used in the structure and fitting of the ship ; 2 Parsons on C. 406 ; her build and fastenings; Id.; spars, sails, rigging; Id.; boats, cables, and anchors ; Id. ; all usual and proper papers and documents ; food and water of sufficient quality and quantity; Fontaine v. Phoenix Ins. Co., 10 Johns. 58; Moses V. Sun Ins. Co., i Duer, 159 ; Kettell v. Wiggin, 13 Mass. 68 ; but a non-compliance with the provisions of a statute requir- ing the carrying of a certain quantity of water under deck does not of itself render the vessel unseaworthy ; Warren v. Manuf. Ins. Co., 13 Pick. 518 ; Deshon v. Merchants' Ins. Co., II. Met. 209; and the mere fact that all the water on board is carried on deck does not, it has been held, of itself, as matter of law, render the vessel unseaworthy, although it is a fact tending to prove unseaworthiness; Deshon v. Merchants' Ins. Co., II Met. 208; fuel, charts, and such furniture and implements as are needed for safe navigation ; 2 Parsons on C. 406 ; ballast; Deblois v. Ocean Ins. Co., 16 Pick. 303; pilotage, and proper stowage of the cargo ; Chase v. Eagle Ins. Co., 5 Id. 51; Cincinnati Ins. Co. v. May, 20 Ohio, 211 ; and a master, ofBcers, and crew, competent in number and ability ; Id. ; 2 Parsons on C. 406 ; Walden v. New York Ins. Co., 12 Johns. 136; Cruder v. Pennsylvania Ins Co., 92 Wash. C. C. 339 ; Draper v. Commercial Ins. Co., 4 Duer, 234 ; Dow V. Smith, i Caines, 32 ; Silva v. Low, i Johns. Cas. 184; Cruder v. Philadelphia Ins. Co., 2 Wash. C. C. 262 ; and it is generally necessary to have an officer on board compe- tent to take the master's place in case of an emergency ; Wal- den V. N. Y. Ins. Co., 12 Johns. 136; Treadwell v. Union Ins. Co., 6 Cow. 270 ; Copeland v. New England Ins. Co., 2 Met. 432. The seaworthiness is for the time, place, and voyage in- sured for. M'Lanahan v. Universal Ins. Co., i Pet. 184; i8j LAJV of contract. [Ek. II. Ch. V. shipowner will do all that can reasonably be expected to be done to limit the risk covered by the insurance to those perils incidental to navigation which the care and skill of man can not provide against. But, where the nature of the adventure and the size and class of vessel to be employed are known to both parties, the implied warranty of the shipowner can not be carried further than that he shall do his utmost to make the particular vessel as fit for the voyage as she can pos- sibly be made. Therefore, in sending a river steamer across the ocean, the warranty of seaworthiness is com- plied with if the nature of the adventure is disclosed to the underwriter, and the owner does as much as can reasonably be done to make her fit for the voyage, though she may not be considered seaworthy in the ordinary sense of the term as applied to ordinary sea- going vessels, (r) Non-compliance with the requirements of the statutes respecting the engagement of the crew does not render a vessel unseaworthy ; it must be shown that the crew was actually insufficient in number, or that there was a want of capacity in the master or other officers, (s) If a ship becomes leaky or founders without any adequate cause, the presumption is that the vessel was unseaworthy at the time she put to sea. (/) If the vessel is not properly found with (r) Burges v. Wickham, 3 B. & S. (s) Redmond v. Smith, S Sc. N. R. f69 ; 33 L. J., Q. B. 17, Clapham v. 270. I.angton, 34 L. J., Q. B. 46. (/) Davidson v. Eurnand, L. R., 4 C.P. 117. Cobb V. New England Ins. Co., 6 Gray, 192 ; Brown v. Girard, 4 Vc;iies, lis ; Kell v. Reed, 4 Binn. 127; and see Capen v. Washington Ins. Co., 12 Cush. 517 ; Hazard v. New England Ins, Co., I Sumn. 218 ; American Ins. Co. v. Ogden, 15 Wend. 532; 20 Id. 2S7 ; Peters v. Phoenix Ins. Co., 3 S. & R. 25; Ijiiirbuck V. New England Ins. Cn., 14 Pick. 198. Sec. II.] OF MARINE INSURANCE. 183 cables, anchors, and ground tackling, she is unsea- worthy ; {21) and so she is if she has an insufficient crew, or an incompetent captain, or has no pilot on board at those parts of the voyage where a pilot is required ; {x) but if a competent master, and crew, and pilot, have been provided in the first instance, the insurer is not discharged by their negligence or want of skill ; " for there is no implied warranty on the part of the assured for the continuance of the sea- worthiness of the vessel, or for the performance of their duty by the master and crew or pilot during the whole course of the voyage." (^y) If the master is unable, from stress of weather or other causes, to pro- cure a pilot, this is a risk covered by the policy, and the insurer remains liable. {£) And, if by accident or mistake a vessel sails out of port in an unseaworthy .Lite, and the defect is remedied before any loss ,'ccurs, and she then sails again in a seaworthy state, the insurer will be liable on the policy for a subse- quent loss, {a) The parties may make any stipula- tions they think fit in the policy respecting the sea- worthiness of the vessel ; and the insurer may consent to take her as seaworthy, or insure conditionally, on certain repairs being done. The assured also impliedly warrants that a loss shall not happen through his own personal default, and that he will himself do nothing to enhance the risk. If he neglects to have the ship properly documented according to her national char- acter, or if he furnishes her with simulated papers without the knowledge of the underwriters, these last («) Watson V. Clark, i Dow. 336. (z) Phillips v. Headlam, 2 B. & Ad. Parker v. Potts, 3 lb. 23. Wilkie v. 383. Geddes, lb. 57. (a) Weir v. Aberdeen, 2 B. & Aid. {x) Tait V. Levi, 14 East, 481. 320. But see The Quebec Marine In- {y) Sadler v. Lixon, 8 M. & W. surance Co. v. The Commercial Bank .«95 ; 5 M. & W. 415. of Canada, L. R., 3 P. C. 234. iR4 LAW OF CONTRACT. [Bk. II. Ch. V. will be released from all liability upon the policy in respect of losses occasioned by the neglect, as such increased risk is not the risk they intended to take upon themselves. (J)) If the insurance attaches before the voyage com- mences, it is enough if the state of the ship is com- mensurate, with the then risk ; and, if the voyage is such as to require a different complement of men or state of equipment in different parts of it, as if it be a voyage down a canal or river, and thence to and on the open sea, it is enough if the vessel be at the time when she enters upon each stage of the navigation properly manned and equipped for it. (c) In the case of an insurance on goods there is no implied warranty that the goods are fit to encounter the ordinary risks or vicissitudes of the voyage ; and it is no answer to the claim of the insurer to say that the goods were in an unfit condition to be shipped, unless it can be shown that the loss arose from that unfitness. {d) In the case of an insurance on goods on board an English ship there is no implied warranty that the ship shall continue English, (e) 1 152. Express warranties. — Every positive aver- ment or allegation on the face of a policy of insurance of facts material to the risk, forming the basis of the con- tract, " amounts to a warranty ; and, if such allegation be not strictly true, the assured can not recover on the policy, to whatever cause the loss be owing, whether the loss be connected with the subject of (b) Orwell V. Vigne, 15 East, 70. The Commercial Bank of Canada, Pipon V. Cope, I Campb. 434. ante. (c) Dixon V, Sadler, 5 IVI. & W. 414 ; {d) Koebel v. Saunders, 17 C. B., N. 8. M, & W. 899. Bouillon v. Lupton, S., 78 ; 33 L. J., C. P. 310. Boyd v. 15 C. B.,N. S,, 138; 33L. J.,C.P. 37. Dubois, 3 Campb. 132. The Quebec Marine Insurance Co. v (e) Dent v. Smith, L. R., ^ Q. B- 414; 38L.J., Q. B. I.t4. Sec. II.] OF MARINE INSURANCE. 185 such warranty or wholly independent of it ; for it is a condition on which the contract is to take effect which failing, the contract fails." (/) But every representation inserted in a contract does not, as we have before seen, amount to a warranty. A written memorandum, statement, or representation does not become part of the policy from being folded up in it, or pinned on thereto ; (^g) but, if the policy refers to it or to any separate writing or memorandum, the two documents may then be placed in juxtaposition and read together. (/^) When there is a warranty that the vessel " is well " on the day the insurance is effected^ the warranty is complied with if the vessel was safe at any time on the day named, so that, if the vessel, should have been lost in the morning of that day and the insurance be effected in the afternoon, the underwriters will be liable. (?) The warranties most frequently met with in maritime policies are warranties of the time of sailing of departure with convoy, and warranties of neutrality. 1153^ Tvnc of sailing. — When the vessel is war- ranted to sail by a particular day, the underwriter will be discharged if she does not sail at the time ap- pointed ; and the circumstance of her being pre- vented by inevitable accident, or restraint, or deten- tion of princes, does in nowise exonerate the assured from the consequences of his breach of contract. (/^) When the vessel has left her loading port with all her cargo and clearances on board, with no other object in view than to get in the safest way she can to the (/) Le Blanc, J., De Lothian v. 254. Worsley v. Wood, 6 T. R. Henderson, 3 B. & P. 515. De Hahn 710. V. Hartley, i T. R., 343. OUive v. (i) Blackhurst v. Cockell, 3 T. R. Booker, i Exch. 423. 360. {g) Pawson V. Ewer, i Doug. 11, 11. (k) Hore v. Whitmore, 2 Cowp. {h) Routledge v. Burrell, i H. Bl. 784. i>S6 LAW OF CONTRACT. [Bk. II. Ch. V. port of delivery, this is a sailing within the meaning of the warranty, although she does not proceed straight to sea, but sails to some general place of ren- dezvous to wait for convoy. (/) But she must be act- ually out of port or be sailing down a river towards the sea, and have made a bona fide commencement of the voyage, in order to satisfy a warranty to sail. (7/^) If the warranty be to sail after a specific day, and the ship sails before, or if it be not to sail during a partic- ular period of the year, and the ship sails during the prohibited period, the liability on the policy does not attach, as the risk is a different risk from the one agreed to be run by the underwriter, (^n) ^ 1 154. Sailing with convoy. — If a vessel war- ranted " to depart with convoy " is proceeding from her loading port to the nearest place of rendezvous for convoy, and is captured, the underwriters are neverthe- less responsible, as the vessel was fulfilling the war- ranty at the time of the capture in the only mode in which it could be fulfilled, and was proceeding to se- cure convoy, and departing with convoy, in the mercan- tile, sense of the term, and according to the usage of trade. (19) A warranty that the vessel shall " depart V. ith convoy "does not mean merely that she is to sail out of port or from the place of general rendezvous with convoy, but that she is to have convoy for the whole voyage insured, unless prevented by stress of (/) liond V. Nutt, 2 Cowp. 6oi. M. & S. 456. Graham v. Banas, 5 B. A\ right V. Shiffncr, 11 East, 515. &Ad. loii. Thellusson v, Ferguson, I Doug. 361. («) Veziaii v. Grant, 2 Park. Ins. Cockr.ine v. FMier, I C. M. & R 809. 670. Colledge v. Harty, 6 E.xch. Lang V. Anderdon, 3 B S; C. 495. 205. ('«) Moir V. R. Exch. Ass. Co., 4 (0) Anderson v. Pitcher, 2 B. & P. Campb. 84. Ridsdale v. Newnham, 3 164. ' See 2 Parsons on Contracts, 400, Sec. II.] OF MARINE INSURANCE 187 weather, (/) or unless it is the usage for ships to be convoyed only part of the distance, and convoy beyond a certain point is not deemed necessary and is not pro- vided by the government. {e French Hancil, 3 T. R. 277. law, " Barraterie comprend toutes ]es (y) Moss V. Byrom, 6 T. R. 379. especes, tant de dol, que de simple (s) Goldschmidt v. Whitmore, 3 imprudence, defaut de soin et imperi- Taunt. 508. tie tant du patron que des gens de (a) Todd V. Ritchie, I Stark. 240. I'equipage. Poth. Assurance, No. Stanima v. Brown, 2 Str. 1174. Phyn 64. Sec. II.] OF MARINE INSURANCE. 227 him and them, although the shipowner may be a party to the fraud. A master who is a sole owner can not commit barratry, because he can not commit a fraud against himself; but, if a master, being also part owner, makes away with the ship in fraud of the other owners, that is barratry, (b) ^ 1 169. Perils, losses, and misfortunes generally. — The clause generally inserted in policies extending the insurance to "all other perils, losses, and misfortunes that have or shall come to the hurt, detriment, or dam age of the said goods and merchandise and ship, &c., covers and protects all losses happening on the sea and in port, whilst the ship is in the due and customary • {S) Jones V. Nicholson, 10 Exch. 28 ; 23 L. J., Ex. 330. ' Wilcocks V. Union Ins. Co., 2 Binn. 574; Patapsco Ins. Co. V. Coulter, 3 Pet. 222 ; Stone v. National Ins. Co., 19 Pick. 34 ; Taggard v. Loring, 16 Mass. 2)Z^ ! Barry v. La. Ins. Co., II Mart. (La.) 630; Marcardier v. Chesapeake Ins. Co., 8 Cranch, 39. It has been said in England that a captain who is a part owner may commit barratry against his other part owners, and also against a charterer. But see, contra, Wilson V. Gen. Ins. Co., 12 Cush. 360; Thurston v. Col. Ins. Co., 3 Caines, 89; Ward v. Wood, 13 Mass. 539. If the owner be supercargo, consignee, or factor, the act is not barratry unless done in his capacity of master ; it is then barratrous althougli he may fill other offices. Kendrick v. Delafield, 2 Caines, 67 ; Cook V. Comm. Ins. Co., 11 Johns. 40. Sometimes the policy provides that the insurers do not insure against barratry if the insured be owner of the ship ; Paradise v. Sun Ins. Co., 6 La. Ann. 596 ; since such an insurance would insure a person against the acts of his own agent or servants. Such a provision, therefore, limits the insurance against barratry to a loss or in- jury of a cargo whicli is not owned by the owner of the ship. Brown v. Union Ins Co., 5 Day, i. " The policy of the law and obvious justice demand, that the owner and his master shall use care and diligence to prevent any misconduct of the crew : and if due care was wanting and might have prevented that misconduct, insurers are not liable for a loss caused by it." 2 Parsons on C. 379. 228 LA IV OF CONTRACT. [Bk. II. Ch. V. prosecution of the voyage insured, and whilst the risk on the policy continues. If, therefore, a vessel is fired into and sunk by mistake, the loss is within this " sweeping clause " of the policy. If a vessel is lost or injured in port, whilst the policy continues in force, the loss will be covered by this clause ; but the gen- eral words thereof are restrained in construction to perils of the same kind as those more particularly enumerated in the policy, (f) ^ 1 1 70. Of the commencement of the risk. — If the policy is -on a ship or goods " lost or not lost," the in- demnity extends to all past as well as all future losses. It is the same as if the plaintiff having purchased goods at sea, the defendant, for a premium, had agreed that, if the goods at the time of the purchase had sus- tained any damage by the perils of the sea, he would make it good, id) Sometimes the risk is expressly (c) Cullen V. Butler, 5 M. & S. 464. son v. Burnand, L. R. 4, C. P. 117. Philips V. Barber, 5 B. & Aid. 161. (rf) Sutherland v. Pratt, IlM.&W. Naylorv. Palmer, 8 Exch. 739. David- 312. " See as to collisions. Hale v. Washington Ins. Co., 2 Story, 176; Peters v. Warren Ins. Co., 3 Sumn. 389; Nelson v. Suf- folk Ins. Co., 8 Cush. 47 ; Matthews v. Howard Ins. Co., " Story, 176. By the weight of American authority it appears that theft or robber_v is a loss for which insurers may be held liable. 3 Kent Comm. 303, says that an insurer is not liable for a theft by a person on board the vessel and belonging to it; and he has been followed by Marshall v. Nashville Ins. Co., I Humph. 99; but see Atlantic Ins. Co. v. Storrow, 5 Paige, 285 ; Am. Ins. Co. v. Bryan, i Hill, 25 ; 26 Wend. 563; see also De Rothschild v. Royal Mail S. P Co., 7 Exch. 734. But the insurers would not be liable for loss by theft or robbery withou: violence from others than the crew if the phrase '' assailing thieves" is used, and that is now not uncommon. 2 Parsons on C. 379. Tortious conversion, and sale of insured property by a United States consul at a foreign port, under color of legal proceedings and claim of right, are not a loss within this phrase. Paddock v. Commercial Ins. Co., 2 Allen, 93. Sec. II.] OF MARINE INSURANCE. 229 appointed to commence from " tbe time of the vessel's being ready to sail," or " from the time of clearing," or " of her being ready for sea." When it is to com- mence " at and from " her arrival at a particular place, it will attach immediately on her first arrival at the port in such a seaworthy condition as to be enabled to lie there in safety, and will continue whilst she is lying at anchor preparing for the voyage for which she is insured, (e) But if there is any voluntary and un- reasonable delay, the underwriter will be discharged ; for his liability upon the policy is not to be subjected to the whim and caprice of a shipowner who may choose to let his ship lie and rot at her anchors. (/") If there has been a delay in the ship's arrival at the place, it is a question for a jury whether the delay materially varied the risk, (^g) But the vessel must arrive " and have once been at the place in good safety. If she arrives at the outward port so shattered as to be a mere wreck, a policy on the homeward voy- age never attaches.'' The safety required is a physical safety from the perils insured against, and not a free- dom from political danger, (^/i) There is, in general, an express stipulation in all policies of insurance on goods and merchandise to the eflFect that the risk upon the policy shall commence from the loading of the goods on board the ship. In this case, and when- ever an insurance is effected on goods and merchan- dise laden on board a particular vessel, the risk on the policy does not commence until the goods are safely shipped and stowed on board. If they are lost by the upsetting of boats or lighters, whilst they are being- (e) Haughtonv. The Empire Marine Palmer v. Marshall, 8 Bing. yg. Smiih Insurance Co., L. R., I Ex. 206; 35 v. Surridge, 4 Esp. 25. 1>. J., E.\. 117. ig) Hull V. Cooper, 14 East, 479 (/) Chitty V. Selwyn, 2 Atk. 355. (h) Parmeter v. Cousins, 2 C'ampb 237. Bell V. Bell, lb. 47S. 230 LAW OF CONTRACT. [Bk. II. Ch. V. conveyed from the shore to the ship preparatory to the voyage, the underwriters will not be responsible for the loss. Whenever, by the express terms of the policy, the adventure is to begin from the loading of goods on board at a particular place, the risk of the policy will not attach if no goods are taken on board at the place specified, (z) or if the vessel is lost before she arrives at the port of loading ; (&) and the policy will not cover and protect goods previously taken on board, as the adventure had not commenced when those goods were received ; " but this, being a strict construction, has been relaxed when there is anything on the face of the instrument to satisfy the court that the policy was intended to cover goods previously on board ;" (/) and, therefore, if the policy is expressed to be made in continuation of a former policy, which former policy covered and protected the antecedent cargo, the goods previously laden on board, as well as those received on board at the subsequent place of loading designated in the subsequent policy, will be protected, (w) And, if the adventure is to commence on the goods " wheresoever loaded," the courts will give the words the largest signification, so as to cover all ante- cedent shipments, (n) Where part of an antecedent shipment was taken out at the loading port mentioned in the policy as the port from whence the adventure was to commence, and the whole cargo was inspected by custom-house officers for adjusting duties which (i) Royal Ex, Ass. Co. V. McSn'iney, (m) Bell v. Hobson, i6 Eas', C43. 19 L. J., Q. B. 222 ; 14 Q. B, 661. Joyce v. Realm Marine Insurance Co., (i) Halhead v. Young, 6 Ell. & Bl. L. R., 7 Q. B. 580 ; 41 L. J., Q. B. 312 ; 25 L. J,, Q, B. 290. 356. (/) Mellishv. Allnutt, 2 M.&S. 106. («) Gladstone v. Clay, i M. & S. Rickman v. Carstairs, 5 B. S: Ad. 418. 663. Sec. I I.J OF MARINE INSURANCE. 231 were paid on it at that port, and was then put on board again with the knowledge of the underwriter, this was held to be in substance a re-loading of the whole cargo, so as to make it a cargo laden on board at the loading port mentioned in the charter-party, (o) 1 1 7 1 . Of the duration and the termination of the risk. — It is generally expressly provided in the policy that the risk shall continue as regards the ship, until she has arrived at her port of destination or port of discharge, and been moored at anchor in safety twenty-four hours, and, as regards the goods, until they have been safely discharged and landed. Where a ship was insured " at and from " Jamaica, and was lost in coasting from one port of the island to another, it was held that she was protected by the policy in moving from port to port in the discharge of her cargo, and in taking fresh cargo, in the prosecution of the outward and homeward voyage in the ordinary and usual manner. (/) ^ But a vessel is not protected in going about from port to port, or cruising round the whole island, in order to dispose of her cargo, in a manner that is not warranted by the ordinary usage and custom of trade, as the risk is thereby increased (6) Nonnen v. Kettlewell, i6 East, (/) Cruikshank v. Janson, 2 Taunt. i88. Carr v. Montefiore, 33 L. J., Q. 301. Warre v. Miller, 4 B. & C. 53S. B. 57, 257 ; 5 B. & S. 408. ' If the vessel be ordered off or into quarantine before the twenty-four hours have passed, the policy does not cease to attach; 2 Parsons on C. 367 ; but if she be safely moored, and continue safe through a storm or other peril, which begins •either before or within the twenty-four hours, and is afterwards lost through the same storm or peril, she is not lost within the policy. Id. ; Bill v. Mason, 6 Mass. 313. By arrival is meant the reaching the usual place of unloading. Meigs v. Mutual Ins. Co., 2 Cush. 439; Dickey v. United Ins. Co., 11 Johns. 358; Zacharie V. Orleans Ins. Co., 17 Mart. La. 637; Oray v. Gardner, 17 Mass. 188. 232 LAW OF CONTRACT. [Bk. II. Ch. V. to the detriment of the underwriter to an extent not contemplated at the time the insurance was effected. If the policy is on the ship until her arrival at the last port of discharge, and several ports are named in the policy, some of which are blockaded, the risk on the policy will cease on the arrival of the vessel at the last unblockaded port. (^) But, if the vessel deviates from the voyage insured, and enters upon a fresh ad- venture, or goes to ports not named in the policy, through fear of the breaking out of hostilities, and of the ports of destination becoming hostile ports, the underwriters will be discharged, (r) Where a ship was insured for the outward voyage " to all or any of the ports or places in the East Indies, China, or else- where, until arrived at the last place of discharge on the outward voyage," it was held that the outward voyage terminated as soon as the outward cargo had been discharged, and that the risk could not be pro- longed so as to cover goods taken on board at inter- mediate places, to be carried onwards to the more distant ports or places named in the policy, (s) ^ Where, in a policy of insurance on a vessel for the outward voyage, there is a clause giving her " liberty to touch, stay, &c., at any ports whatsoever to take on board and land goods," the clause will protect the ves- sel while she is stopping for the bona fide discharge of the outward cargo, and is at the same time availing herself of the opportunity of taking in merchandise, being at the time in the due prosecution of the out- ward voyage ; but " the captain has no right to mix itj) Doyle V. Powell, 4 B. & Ad. 781. 267. (j-) Richavdson v London Ass. Co., (;-) Oliverson v. Brightman, 8 Q. B. 4 Campb. 94. ^ Patrick v. Ludlow, 3 Johns. Cas. 14; Gariigues v. Coxe, I Binn. 592. Sec. II.j OF MARINE INSURANCE. 235 up together the two objects of disposing of the rem- nant of the outward cargo and procuring a homeward cargo at the risk of the underwriters on the outward voyage. When the disposal of the outward cargo ceases to be the sole occasion for his stay at a particu- lar port, these underwriters are discharged. (J) If the party effecting the insurance is ignorant of the partic- ular port at which the goods will be shipped, as well as of the name of the ship and of the species of the goods, he may protect himself against loss by a gen- eral insurance of goods of a certain value to be sent to him by sea, whatever may be the ship they are sent in, or the place at which they are put on board. (21) 1 1 72. Arrival at the port of destination — Moor- ing in safety, (x) — -The extent and limits of the "port of discharge " are regulated by custom and usage ; and the term as used in policies of insurance includes the whole port within which any portion of the cargo is usually, according to the custom of such port, taken out of the vessel. Where a ship's place of destination was " her Majesty's Dockyard at Deptford," and the vessel got to the dock gates, but could not get into the dock by reason of ice which blocked up the en- trance, and she was accordingly moored in the river alongside the dock-gates, and was there driven on shore and totally lost, it was held that the underwriters con- tinued liable, as she had never been moored in safety at her place of destination within the terms of the policy, (j)/) But, where a vessel was chartered for a voyage from Quebec to Wallasey Port, in the river Mersey, or as near thereto as she could safely get, and (f) I,d. Ellenborough, Inglis v. [x) Lindsay v, Janson, 4 H. & N. Vaux, 3 Campb. 437. Moore v. Tay- 704; lor, I Ad. & E. 25. {y) Samuel v. Royal Ex. Ass. Co., 8 [a) Hunter v. Leathley, 10 B. & C. B. & C. 123. 858. 2 34 ^^-i^y OF CONTRACT. [Bk. II. Ch. V. there dischara:e her carcrcanci the vessel arrivp.d in the Mersey, and was towed abreast the Wallasey Port, but could get no further by reason of her great draught of water, and the captain then began to discharge the cargo in lumpers, and also discharged his crew, and after several days, when a considerable portion of the cargo had been discharged, the ship fell over on her side and was injured, it was held that the vessel had arrived at her place of destination, and that the risk on the policy ceased after she had been moored twenty- four hours in safety, although it appeared that the cap- tain intended ultimately to carry the vessel into Wal- lasey Port with as much of the cargo as he could caiTy over the shallow part of the river intervening between his original anchorage and that port. {£) If a vessel has sprung a leak or received her " death wound at sea," but comes into port and casts anchor in apparent safety for twenty-four hours, and the mischief is not discovered until after the expiration of the time lim- ited for the continuance of the risk on the policy, the underwriter wnll nevertheless continue liable, as it is obvious that the vessel never was in reality moored in safety at all. {a) But, although a ship is damaged, yet if she is not a mere wreck at the time of her arrival, and is moored as a ship in the possession and control of her owners, she is "moored in safety." {U) If an embargo is laid on all English vessels at a foreign port, and the vessel enters in ignorance thereof, and re- mains at anchor twenty-four hours, and is subsequently seized, the underwriters are liable ; " for she is in the power of the enemy the very moment she enters the (;) Whitwell v. Harrison, 2 Exch. the court, in Knight v. Faith, 19 L. 127. J., Q. B. 517, treat the case as if the [a) Meretony v. Dunlope, cited i T. verdict had been for the insurer. R. 260, where it is stated that the ver- (/') Lidgett v. Secretan, L, R., 5 C, diet wa^ si^^"^ ^^^ ^^'^ insured, whereas P. iq8. Sec. II.] OF MARINE INSURANCE. 235 port, and is not for one minute moored in safety." {c) And, if, by reason of quarantine regulations or other laws of the port, the vessel is not lawfully moored, but is liable to be sent out of port to perform quarantine, or to be examined or fumigated, the risk continues on the policy, although the vessel may have remained at anchor more than twenty-four hours before any actual removal takes place, and before the port regulations against her moorings are enforced, {d) ^ {c) Minett v. Anderson, Peake, 277. Horneyer v. Lushington, 15 East, 46. {d) Waples v. Eames, 2 Str. 1243. ' " If the insurance is made ' at and from ' a certain place, the risk begins as soon as the vessel is at that place, and con- tinues while she is there, and also when she leaves that place. The question has arisen, what must be the condition of the vessel on her arrival, for the polic)' to attach .' It has been said that she must then be in safety from the perils insured against. And as an insurance to a place does not cease until she has arrived there, and been there moored twenty-four liours in safety (and our policies usually contain a clause to that effect), it has been held, that a policy ' at ' did not attach on the arrival of a ship until after the twenty-four hours of safety had expired. But it is obvious that the terms of the policy and the circumstances of the case must have much ef- fect in the application of these rules." — 2 Parsons on C. 365. See Garrigues v. Coxe, i Binn. 592 ; Patrick v. Ludlow, 3 Johns. Cas. 14; De Longuemere v. Firem. Ins. Co., 10 Johns. 126. " Insurance ' from ' a place begins only when a vessel casts off her moorings, or weighs her anchor, and moves, with the in- tention of sailing." 2 Va.rsox\s, supra: Mey v. South Carolina Ins. Co., 3 Brev. 329. If a vessel is insured at and from A, to B, from thence to C and back to A, a loss at B will be covered. Brad- ley V. Nashville Ins. Co., 3 La. Ann. 708 ; Bell v. Marine Ins. Co., 8 S. & R. 98. Goods insured "at and from " a place, do not, unless it is expressly so provided in the policy (see Ken- nebec Co. V. Augusta Ins. Co., 6 Gray, 204), come under the policy until laden on board the vessel, or on board a boat or lighter to be carried to the vessel in conformity with the usage of that place. Coggeshall v. Am. Ins. Co., 3 Wend. 2S3; Pa-r- sons V. Mass. Ins. Co., 6 Mass. 208. But they would be covered by such a policy if brought there in a vessel from another place. Gardner v. Col. Ins. Co., 2 Cranch C. C. 473. 236 LAW OF CONTRACT. [Bk. II. Ch. V, 1 1 73. Risk ill landing the goods. — -When the in- surance is on goods and merchandise, it is generally expressly provided in the policy that the risk shall continue until the goods have been safely discharged and landed ; but, whether there is such a provision or not, the risk upon the policy will continue from the time of the loading of the goods on board to the time of their being actually landed at the port of destina- tion, {e) Any loss or damage, therefore, sustained in the transhipment of the goods from the vessel to the shore by the upsetting or stranding of boats or lighters, will have to be made good by the under- writers, provided the transhipment is made in the or- (e) Anon., Skinner, 243. If the insurance be to a port of discharge it continues at and from such ports as the vessel may touch at for inquiry, advice or repair, without discharging any part of her cargo. Cf)0- lidge V. Gray, 8 Mass. 527 ; Lapham v. Atlas Ins. Co., 24 Pick. I ; King v. Hartford Ins. Co., i Conn. 333 ; Clark v. United Ins. Co., 7 ^lass. 365. Any such expression as " final port," or " ports of discharge," would continue the insurance on so much of the cargo as is not there discharged. And if the in- surance be to a port of discharge the insurance ceases when the cargo is actually unladen at any port, whether it be the port originally intended or another. Moffat v. Ward, 4 Doug. 31, note; Shapley v. Tappan, 9 Mass. 20. Sometimes it is provided that the insurance is for a definite period, and if the vessel is " at sea " at the end of the time, the risk is to continue until her arrival at port or the port of destination. The phrases "at sea" and "on her passage" are the same ; Bowen v. Hope Ins. Co., and Bowen v. Merchants' Ins. Co., 20 Pick. 275. But we consider the rule as now well settled. Said Parker, C. J., in Woodv. New England Ins. Co. 14 Mass. 31: '' A ves- sel is considered in that condition (' at sea ') while on her voy- age, and pursuing the business of it, although, during part of the time, she is necessarily within some port in the prosecution of her voyage." This has, however, been pronounced doubtful. See Gookin v. New England Ins. Co., 8 Am. Law Reg. 362 ; Am. Ins. Co. v. Hutton, 24 Wend, 330; 7 Hill, 321. See Eyre v. Marine Ins. Co., 6 Whart. 247 ; 4 Watts & S. 116 ; Wood v. New England Ins. Co., 14 Mass. 31. Sbx. II.] OF MARINE INSURANCE. 237 dinary and usual course, and according to the usage of the port and trade, (/) and is not made in the boats and h'ghLers of the owner of the goods. If the latter sends his own lighters and servants for the goods, and receives them, the underwiters will be dis- charged, as the voyage is terminated, and the risk on the policy ceases, as soon as the consignee has got the goods into his own possession and under his own care and management, (^g) If the goods are conveyed in public lighters, or in the boats or lighters of third par- ties, in accordance with the custom and usage of the port, the underwriters will continue liable until the goods are landed, unless such lighters or boats are in the possession and under the control of the consignee .or owner of the goods, in which case the voyage will be just as much terminated as if they were his own lighters and boats, the goods being then actually deliv- •ered to him and in his possession. {Ji) On an insur- ance of goods on a voyage policy, until the same are safely landed at the port of discharge, " including all risks to and from the ship," there is no implied war- ranty that the lighter used at the end of the voyage to convey the goods from the ship to the shore shall be seaworthy for that purpose, (z) ^ If a vessel is disabled (/) Stewart v. Bell, 5 B. & Aid. & P. 430. Strong v, Natally, i B. & 238. P., N. R. iS. (g) Sparrow y. Carathers, 2 Str. {i) Lane v. Nixon, L. R., I C. P. 1236. 412 ; 35 L- J-, C. P. 243. (/ij Hurry v. R. Ex. Ass. Co., 2 B. ' " If goods are usually landed from a ship in a certain port by boats or lighters, they are not landed, but are under the policy, while on board the lighters. And this would be true if this mode of landing the goods was unusual, but justified by the necessity of the case. It has, however, been held, that if a consignee sends his own lighter to receive the goods, tbey are delivered to him when put on board his lighter, and the insur- jiuce ceases." 2 Parsons on C. 367. They are not, however, 238 LAJV OF CONTRACT. [Bk. II. Ch. V. and obliged to put into port before \.\\t voyage is completed, and is not worth repairing, and is conse- quently abandoned, and the master tranships the goods, and after such transhipment the goods are lost, the underwriters will be liable upon the policy. (/^) 1 174. Insurance on profits. — When profits ex- pected to be realised from the carriage of merchandise are insured from the ordinary perils of the sea, and the ship is lost by a peril insured against, but the merchan- dise is brought safe to the port of destination by another vessel, there is no loss of profit within the meaning of the policy, and the underwriters are not responsible. (/) 1 175. Freight policies. — The freight to be earned by the vessel on the performance of the voyage may be . insured as well as the vessel itself, and the cargo laden on board. " The object of the contract is to protect the assured from being deprived by any of the perils insured against of the profit he would otherwise earn from the carriage of the goods. It is incumbent, therefore, on the assured to prove that, unless some of the perils insured against had intervened, some freight would have been earned, and evidence must be given, either that goods were put on board from the carriage of which freight would result, or that there was some contract under which the shipowner, if the voyage were not stopped by perils insured against, would have been entitled to demand freight." (;;/) A policy (k) Plaiitamour v. Staples, 3 Doug. S., 651 ; 28 L. J., C. P. 194. I ; I T, R. 611, n. Shipton v. Thorn- {m) Ld. Ellenborough, Forbes v. Ion, g Ad. & E. 337. Aspinall, 13 East, 327. Patrick v. (/) Chope V. Reynolds, 5 C. B., N. Eames, 3 Campb. 441. under a policy, until actually on the vessel insured. Cogges- Iiall V. Ainerican Ins. Co., 3 Wend. 283; Parsons v. Massa- chusetts Ins. Co., 6 Mass. 20S. Sec. Il.J OF MARINE INSURANCE. 2-\^ on money advanced on account of freight is in sub- stance a freight policy, in) When an express con- tract of affreightment, under which the shipowner is entitled to the freight insured, can be proved, the risk on the policy will commence from the time that the shipowner has put himself into a condition to earn the freight, by making the vessel ready for sea and placing her at the disposal of the charterer, whether any goods have or have not been actually shipped on board under the contract. {6) Thus, if a vessel is chartered for a voyage from A to B, the interest on the freight commences on the vessel's sailing from A, either in ballast or with a small quantity of goods for B, so long as she is starting solely with a view to the chartered freight. (/) But, if no express contract of affreightment can be proved, the risk will not attach on the policy until goods have been actually shipped on board under circumstances giving the shipowner a right to freight. (^) When the insurance is on the freight to be earned on the outward and homeward voyage, and there^ is an express contract of charter-party for the outward and homeward voyage, the liability of the insurer will continue all through the outward and homeward voy- age, whether any of the homeward cargo had or had not been taken on board at the time of the loss ; (r) but, if the insurance is on freight to be earned out and home, and the insured has only made a contract of af- freightment for the outward voyage, the liability of the (») Hall V. Janson, 4 Ell. & Bl. 508 ; (p) Barber v. Fleming, L. R., 5 Q. 24 L. J., Q. B. 97. B. 59, 63. Foley v. The United Fire ip) Thompson v. Taylor, 6 T. R. Ass. Co., L. R. s, C. P. 155. 478. Truscott V. Christie, 2 B. & B. {q) Tonge v. Watts, 2 Str. 1251. 320. Devaux v. I'Aiison, 7 So. 507 ; (r) Davidson v. Willasey, I M. & S. 5 Bing. N. C. 519. 313. Atty v. Lindo, I B. & P., N. R. 236. 240 LAW OF CONTRACT. [Bk. II. Ch. V. insurer, as respects the homeward voyage, will not commence until an express contract of affreightment for the homeward voyage has been entered into, or until a return cargo or return merchandise has been shipped on board, giving the ship-owner a right to homeward freight, (^s) Freight may be insured for a portion of the voyage as well as a cargo of goods ; and, if an insurance on freight is effected on a voyage from A to B, the risk is not varied, and the under- writers are not discharged, because the vessel is in reality sailing from A to C, touching at B, and the as- sured has neglected to disclose that fact to the under- writers. (/) But, if the voyage is altogether a differ- ent voyage from the one insured, as, for instance, if the insurance is on the freight to be earned under a con- tract of aflfreightment for a particular voyage, and the voyage is subsequently altered, the underwriter will be discharged, (z^) As regards the meaning of the term freight, it has been held that, if the master, in order to make up a full cargo, buys merchandise on behalf of the shipowner, and brings it home, the fair value of the conveyance of such goods may be in- cluded under the term freight in the policy, {x) But, although " freight " includes the interest of the owner in the carriage of his own goods, yet it will not extend to passage money, (jj/) 1 176. Loss of freight. — To recover for loss of freight, a total loss by perils of the sea must be proved. If the master has the means of repairing a vessel which has sustained sea damage, and of shipping and bring- (s) Williamson v. Innes, 8 Bing. 81, 45. Devaux v. I'Anson, 7 Sc. 507 ; 5 ,n. Bing. N. C. 519. {t) Taylor v. Wilson, T5 East, 330. {y) Denoon or Dinoon v. Home & (;/) Sellar v. M'Vicar, i B. & P., N. Colonial Ins. Co., L. R., 7 C. P. 341 ; jR. 25. 41 L. J., C. P. 162. [x) Flint V. Flemyng, i B. & Ad. Sec. II.] OF MARINE INSURANCE, 241 ing home the cargo, and neglects to avail himself of the opportunities within his reach, the insured can not recover for loss of freight, (z) Where the insurance was on freight, and the ship was injured by perils of the sea, and obliged to put into port and land the cargo to re-fit, and part of the cargo was so wetted by sea-water that it could not be re-laden on board with- out imminent danger of ignition, unless it went through a process \vhich would have detained the vessel six weeks, at an expense equal' to the freight, and the master sold the goods, and, finding he could not ob- tain others, sailed on his voyage, it was held that the underwriters were not liable to make good the loss of the freight on these goods, (a) 1 1 77. Insurance on passage-money. — When the insurance has been effected on passage money, and the ship is disabled and obliged to put into port for repairs, and great expenses are incurred in maintain- ing the passengers, there is no loss for which the un- derwriters are liable, if the vessel ultimately completes the voyage and earns the money. {U) 1 178. Deviation froin the voyage instired. — Every policy of insurance is effected upon the implied un- derstanding that the vessel will proceed straightway and without unnecessary delay to her place of desti- nation. If, therefore, she voluntarily deviates from her course to put into port, and is afterwards lost, the underwriters will be discharged, {c) unless it be shown that she went there under the pressure of necessity, («') or for necessary repairs or purposes essential to (z) Philpot V. Swan, 5 Law T. R., may be incurred under the Passengers' N. S. 183. Act, 1852, see Gibson v. Bradford, 4 (a) Mordy v. Jones, 4 B. & C. 400. Ell. & Bl. 586 ; 24 L. J., Q. B. 159. ii] Willis V Cooke, 5 Ell. & Bl. 647 ; (c) Elliot v. Wilson, 4 Bro. P. C. 470. 25 L. J., Q. B. 16. As to insurances (d) Scott v. Thompson, t B. & P., ^gahist the charges and liabilities which N. R. iSl. III. — 16 242 LAJJ' OF CONTRACT. [Bk. II. Ci-i. V the safe prosecution of the voyage, (r) or to avoid pirates, or icebergs, or other dangers of navigation, (y) or that she went out of her way for the purpose of succoring a ship in distress, {g) or of procuring convoy, {Ji) or had liberty by the charter-party t<, make deviations or to call at different ports for trad- ing purposes. If the voyage insured has been actually abandoned, and it has been determined to alter the ship's destination, the underwriters will be discharged ; but a mere meditated change of destination, not car- ried into effect by an actual abandonment of the voy- age, will not have that effect. (/) If a ship insured for one voyage sails upon another, and the same track for part of the distance leads towards both places of destination, and the vessel is taken before she arrives at the dividing point for the two voyages, the under- writers are nevertheless discharged, because there never was any inception at all of the particular voyage insured, {k) But, if there is an actual inception of the voyage insured, and there exists only an intention to deviate, and no deviation had in fact taken place at the time of the loss, the underwriters will remain liable. (/) And, if a loss occurs before any actual de- viation has taken place, and the vessel afterwards de- viates, the loss will fall upon the underwriters, {in) But a vessel, or goods, or freight, may be insured for part of a voyage as well as the whole distance ; and, if a vessel is chartered from A to C, touching at B, W Weir . Hutchiu^.on, (f) liunter v. Leatlilev. 10 B. & C. 1.. U,. 5. Q. V, 3S4. Sec. II.] OF MARINE INSURANCE. 247 Sometimes vessels are expressly insured for a gen- eral voyage to any ports or places whatsoever in port and at sea, in all places, at all times, and in all services, to the intent that the risk may be covered by the pol- icy, whatever may be the employment of the vessel, and however long the duration of the voyage. 1 182. Total loss and abandonment — Notice of abandonment. — If a ship insured for a particular voy- age grounds on a sandbank and can not be goc off, the loss is a total loss, although the ship still exists in specie. If she is disabled by stress of weather, and is so strained and shaken as not to be worth repairing, the loss is a total loss, although she still exists as a ship in the dockyard. And, when a vessel has been wrecked, the cargo is totally lost if no part of it can be recovered for the benefit of the assured. If a cargo is so much injured as to be unfit for conveyance to the port of destination, and has consequently been landed at an intermediate port to prevent its entire destruction, the loss is in contemplation of law, as be- tween the underwriter and insured, a total loss, and the latter is entitled to recover the full amount of the insurance, (/z) But in these cases, when the subject- matter of the insurance is not totally destroyed, the insured must, in order to recover the full amount of the insurance as for a total loss, abandon what re- mains, i. e., he must make a cession of all his proprie- tary rights thereto to the underwriters, and give them notice of abandonment. The notice of aban- donment is required in all cases to give the insurers the means of enquiry and of guarding against fraud, to enable them to repair the ship if they should deem such a proceeding for their advantage, and to secure (h) lonides V. The Universal Marine Association, 14 C. B., N. S. 292; 32 L. J., C. P. 176. 248 LAW OF CONTRACT. [Bk. II. Ch. V. all the benefit that can be derived from the wreck. It must be given " within a reasonable time after the assured receives intelligence of the accident, that the underwriter may be entitled to the benefit of what may still be of value." (0 The abandonment must be an unconditional and unreserved abandonment of the whole of the subject-matter of the insurance to the insurers or underwriters, unless the latter think proper to accept of a conditional abandonment. When the subject-matter of the insurance totally per- ishes, no notice of abandonment is necessary ; for there is nothing to abandon, (/c) And, when it is so far annihilated that it no longer exists in specie, a for- mal abandonment of the comparatively valueless rem- nants of what was once a ship or a cargo is not neces- sary to enable the assured to recover as for a total loss, (/) although, if these remnants are worth any- thing at all, or have been sold, the underwriters will be entitled to them, or to the value of them, or to the price they have fetched ; for it is contrary to the principle of every contract of indemnity to permit the insured to recover more than the amount of the loss sustained. (;«) If the insurance is on freight, and the voyage is lost by a peril insured against, so that the freight can not be earned by the insured, the loss is a total loss, and there is no need of an abandonment of freight ; " for there is nothing to abandon." (n) If the adventure is brought to an end by a peril insured ii) ilitchell V, Edie, I T. R. 613. (/) Cambridge v. Anderton, 2 B. & Knight V. Faith, 15 Q. B. 659. Ger- C. 6gi. Allen v. Sugrue, S B. & C. non V. R. Ex., &c., 6 Taunt. 383. 561. King V. Walker, 33 L, J., Ex, 323 ; {m) Roux v. Salvador, 4 Sc. 34. 3 H. & C. 209. Stringer v. The Eng- («) Idle v. Roy. Ex. Ass. Co., S lish Ins. Co., L. R., 5 i>. B. 599. Taunt. 755 ; 3 Moore, 142. Mount v. (/5) Rankin v. Potter, L. R., 6 H. L. Harrison, 4 Bing. 388 ; i M. & P. 14. Cas. S3 ; 42 L. J., C. P. 169. Rankin v. Potter, anie. Sec. II.] OF MARINE INSURANCE. 249 against, and the things are taken out of the power of the assured, as, for instance, if they are totally lost to him by reason of capture or seizure in a foreign port, or by political laws working detention and sale by a court, or by circumstances of distress and danger crea- ting a mercantile necessity for a sale, there is no ne- cessity for any notice of abandonment. {0) And, where the sale was not under a condemnation of any court, but took place because the assured declined to give security to prevent the sale, it was held that such sale was a total loss occasioned by the seizure, the giving of the security under the circumstances not be- ing the course which a prudent uninsured owner would have adopted. (/) But it is otherwise where the sale is not a necessaiy or natural consequence of any of the perils insured against. (^) A constructive total loss as a total loss within the meaning of a pol- icy against " total loss only." (r) 1 183. By whom notice of abandonment may be given. — The party giving notice of abandonment must be the party in whom the property in the ship is at the time vested. Where, therefore, a policy of insur- ance has been deposited as security for an advance of money, the pledgee of the policy has no implied au- thority to give notice of abandonment ; but it is otherwise with a person who has a mortgage on the ship, {s) 1 1 84. Form of notice of abandonment. — The word "abandon" need not be used ; any words showing an (p) Faraworth v. Hyde, 34 L. J., C. (?) De Mattos v. Saunders, L. R., 7 P. 207 ; 18 C. B., N. S. 835. MuUett C. P. 570. V. Sliedden, 13 East, 304. Mellish v. (r) Adams v. Mackenzie, 13 C. B., Andrews, 15 lb. 16. N. S. 442 ; 32 L. J., C. P. 92. (f) Stringer v. The English, &c., is) Jardine v. Leathley, 3 B. & S. Insurance Co., L. R., 4 Q. B. 676, 700 ; 32 L. J., Q. B. 132. 690. 250 LAir OF COA' TRACT. [Bk. II. Ch. V. intention to give up the property insured upon the i^round of its having been totally lost, will be suffi- cient. (/) 1 185. Effect of notice of abando7i7nent. — The effect of a notice of abandonment, therefore, is to put the assured into a condition to claim from the under- writers as for a total loss, provided the facts as they are. subsequently established warrant an abandonment If they do not warrant an abandonment, or the insured ncylects to give prompt notice of abandonment, he must proceed against the underwriters for the loss he has actually sustained. The assured then makes the best of what he can save, and resorts to the underwriter for the actual loss, after deducting the value of the rem- nants. On the other hand, when there is a construct- ive total loss and an abandonment, the risk of saving what remains to be saved is thrown upon the under- writer. After the abandonment, the insurer stands in the place of the insured, and is clothed with the own- ership of the property saved, and is entitled to all the profits and advantages that may accrue therefrom ; and if the assured recovers and retains possession of any portion of the property, the underwriters may maintain an action against him for the recovery of the value of it. (21) The abandonment is retrospective in its oper- ation, so that the title of the abandonees relates back to the time of the loss, (.r) 1 186. Insurance on freight. — Where a ship and the freight to be earned on the voyage were insured l)}' separate sets of underwriters, and the ship was cap- tured, and the ship and freight were abandoned to the respecti\'e underwriters, who each paid as for a total [1] Currie v. The Bombay Native 470, Ins. Co., L. K., 3 P. C. 72. {x) Cammell v. Sevvell, 3 H. & N. (;/) Leatham V. Terry, 3 B. & P. 644; 27 L. J., Ex. 447. Sec. II.] OF MARINE INSURANCE. 251 loss, and after that the ship was recaptured, and then performed her voyage and earned freight, it was held that the underwriters on the ship were entitled to the freight so earned, to the exclusion of the underwriters on the freight ; " for freight follows as an incident the property in the ship."(^') The insured ship is, by the abandonment, vested in the underwriters from the time of the loss ; and, as their ship earns the freight, they are entitled to it, as purchasers of the ship ; {£) but if, at the time of the casualty, there is no freight pending, as, for instance, if the shipowner is carrying his own goods, the abandonment can give no right to freight, (a) Where, after an embargo on a ship, the ship and freight were abandoned to the respective un- derwriters, and the embargo was taken off, and the ship completed her voyage and earned freight, it was held that the shipowners had no right to the freight earned after the abandonment of the ship, and that the loss of freight was not demandable from the under- writers on freight, as it was not lost by means of the perils insured against, but by reason of the abandon- ment of the ship, which was the act of the assured themselves, (b) A total loss of the ship, therefore, does not necessarily involve a total loss of the freight. The ship may get to port a mere wreck, and deliver her cargo and earn freight, and the shipowner may elect to abandon and proceed for a total loss ; but, if he does so, the underwriters of the ship will be entitled to the freight, and the assured will have no claim to any indemnity from the underwriters on freight for the loss of freight. Thus, where a ship and freight were separately insured by separate policies, and the ship ( r) Davidson v. Cai,e, 5 Moo. 116. (a) Miller v. Woodfall, 8 Ell. & Bl, {z) Hiclde v. Rodocanachi, 4 H. & 504; 27 L. J., Q. B. 120. N. 466 ; 2S L. J. Ex. 273. (,l>) M'Cai-thy v. Abel, 5 East, 3SS. 252 LAW OF CONTRACT. [Bk. II. Ch. V. came into port greatly damaged, and after survey, was found not worth repairing, and was finally abandoned, but the cargo was safely landed, and the freight was earned and received by the shipowners, and was then handed over by them to the underwriters, as inci- dent to the ship, which being done, the shipowners proceeded against the underwriters on freight for in- demnity for loss of freight, it was held that they had no claim whatever in respect thereof, as the freight had been earned and actually received by the shipown- ers, and might have been retained by them for their own use, but for their subsequent voluntary election to abandon to the underwriters the ship, and to constitute such underwriters the owners of the damaged ship and the freight earned by it. (<:) But in all these cases where the underwriters are entitled to the freight after abandonment, the freight has been earned by the insured ship. If another ship finishes the voyage, the underwriters are not entitled to the freight, unless the substituted vessel is their vessel, or has been hired for their benefit by their agents, (d) And, if the goods in the ship are the property of the owner of the ship, and he is carrying them on his own account, the abandonees of the ship have no claim to freight, (e) 1 1 87. When the insured may abandon — Total losses. —The general rule is ihat the insured may aban- don in every case and claim for a total loss, when by the occurrence of any of the misfortunes or perils in- sured against, the subject-matter of the insurance is so injured or deteriorated as to render any further dealing (). 5 B. & S. 34.5. (/) Kidstone v. Empire Mai in e (/C') Reimer v. Ringrose, 6 Exch. Ins. Co., L. R., 1 C. P. 535 ; lb. 2 C. 267; 20 L. J. Ex. 175. Rosetto v. P. 357 ; 35 L. J., C. P. 250; 36 lb. Gurney, n C. B. 187. Gt. Ind. Pen- 156. Sec. II. J OF MARINE INSURANCE. . 261 the insurance is effected on each bale, hogshead, &c., separately, and some bales or hogsheads are totally lost, and others saved, the loss of each separate bale, hogshead, &c., is a total loss pro tanto ; {in) " but, when the insurance is upon the bulk, and the goods are all of the same species, unless the loss exceeds the value specified in the memorandum, there is no average or partial loss, and there can not, in such a case, be a total loss of a portion of the cargo." (ii) Where an insurance had been effected on goods generally, and several thousand bags of linseed were put on board, and, by the memorandum as to average, seed was war- ranted free from average, the Court of Exchequer Chamber thought it was necessary, in the natural con- struction of the terms of the policy, to apply the ex- emption to all linseed on board collectively, whether shipped in bulk or in separate packages, and that the warranty could not apply to each bag in which the seed happened to be packed as a distinct object ; {0) but, where the goods insured were described in the policy as "master's effects," and the memorandum was " free from all average," and some of the goods thus insured were totally lost, and others were saved, it was held that, as the articles which constituted " master's effects " were essentially different in their nature, and kind, and value, the insurer was liable in respect of the total loss of particular articles constituting " master's effects." To hold that, if the assured happens to be successful in rescuing any of the articles insured, even the clothes he may be wearing, he will thereby incur the penalty of forfeiting his assurance on the rest, (;«) Entwisle v. Ellis, 2 H. & N. (») Hills v. Lond. Ass. Co., 5 M. 555 ; 27 L. J., Ex. 105. Davy v. Mil- & W. 569. ford, 15 East, 559. (") Ralli v. Janson, 6 Ell. & B!. 422. 262 LAJV OF CONTRACT. [Bk. II. Ch. V. though they are all totally lost, would lead to a result quite at variance with the object for which the mem- orandum as to average was introduced into policies. (/) As soon as it is ascertained that the goods are of different species, it is as if the different species had been enumerated. (^) If the contents of any particular package, hogs- head, &c., separately insured, are not totally destroyed, the loss is then only a partial or average loss, and the underwriters are exempted, by the memorandum, from liability, (r) It is usual, therefore, to modify the effect of the memorandum by an express stipulation to the effect that the underwriters are to pay " avcravc on each species of produce or package of manufactured goods, or on each ten, fifteen, or twenty hogsheads, &c.," so as to give the assured a right to claim for an average or partial loss separately on each species, if the loss amounts to three or five per cent, a'though there may not have been a three or five per cent, loss upon the whole. This stipulation does not tust the claim of the assured in respect of a general average loi-s. (V) If several average or partial losses take place under three or five per cent, each, but the aggregate amount of the whole exceeds three or five percent., the under- writers will be liable, (i*) Whenever the polic3MS made free from average under so much per cent., and a loss happens, the proportion which the loss bears to the cargo must be calculated upon the cargo which was on board at the time of the loss. (71) The petty charges of primage and average, previously mentioned (/) Duff V. Maukenzie, 3 C. B., N. (s) Hagedorn v. Whitmore, i S., 16. Stark, 157. ((?) Wilkinson v. Hyde, lb. 44. (t) Blackett v. R. Ex. Ass. Co., 2 Cr (r) Hedburg v. Pearson, 7 Taunt. & J. 244. 154. Navone v. Haddon, 9 C. B, 43 ; (n) Rolil v. Parr, I Esp. 444. 19 L. J., C. P. j6i, Sec. II.] OF MARINE INSURANCE. 263 as incident to navigation, form part of the necessary and ordinary expenses of the voyage ; and the pay- ment of them is not considered a loss within the meaning of the policy. 1 193. Of the exceptions of general average losses and stranding of the vessel. — General average losses arising from general contribution by the owners of prop- erty exposed to a common peril of the seas, to make good a loss incurred for the preservation of the common property of all, must be made good by the underwriter under the general terms of the policy ; and, when they are excepted from the average clause, the underwriter, of course, continues responsible in respect to them, although he is exempted from liability in respect of all other partial or average losses. To the clause " war- ranted free from average " is frequently annexed, as we have already seen, the exception " unless the ship be stranded." By the stranding of the vessel, under such a clause, the exemption from average is destroyed ; and the loss falls within the general words of the policy, although it was not in any wise occasioned by the stranding, (.r) It is said to be a rule that, where a vessel takes the ground in the ordinary and usual course of navigation and management in a tidal river or harbor upon the ebbing of the tide or natural de- ficiency of water, so that she may float again upon the flow of the tide, such an event is not to be considered a stranding within the sense of the memorandum ; but it is otherwise where the ground is taken under any extraordinary circumstances of time or place, by reason of some unusual and accidental occurrence, {y) Where a ship ran on some wooden piles four feet under water which had been erected in a river about (x) Burnett v. Kensington, 7 T. R. 34- Kingsford v. Marshall, 8 Bing. 210. Roux V. Salvador, 4 Sc. i. 458 ; I M. & Sc. 657. {y) Wells V. Hop-wood, 3 R. & Ad. 264 ^-^f^ OF CONTRACT. [Bk. II. Ch. V. nine yards from the shore, to keep up the banks, and lay on such piles until they were cut away, this was held to be a stranding within the policy. {£) But, if a vessel merely grounds on a rock and gets off when the tide rises, and pursues her voyage, this is not a stranding, though the vessel may be injured; " if it is touch and go with the ship, there is no stranding. («) But, when the ship accidentally takes the ground and remains therefor any time, this constitutes a stranding, without reference to the damage sustained by the vessel, (b') If the shore tackling, placed to keep the vessel upright when the tide leaves her, breaks, and she rolls over on her side and is stove in, this is a stranding, {c) Where a ship, having encoun- tered bad weather, lost both her anchors, and had her masts cut away, was taken in tow by salvors, and placed on a bank out of the ordinary course of the voyage, where she lay on her port side for sev^eral tides, and sustained considerable further injury, it was held that there was a stranding, (flf) The stranding of a lighter, in which goods are being taken from the ship to the shore, is not a stranding of the vessel within the exception in the policy, {e) The stranding must of course, in all cases, take place dur- ing the voyage covered by the policy, and before the risk thereon terminates. 1 194. Suing and laboring cla^isc. — Where a ship- owner has incurred expense for the purpose of avert- ing a loss of freight, he is entitled to recover under the suing and laboring clause so much thereof as was (2) Dobson V. Bolton, i Park. Ins. Barrow v. Bell, 4 B. & C. 736. 239. Raynor v. Godmond, 5 B & Aid. (c) Bishop v. Pentland, 7 B. & C. 225. 219. (fl) Ld. ELLENEOROUGH.Macdougle {d) De Mattes v. Saunders, L. R., 7 V. R. Ex. Ass. Co., 4 Campb. 2S3. C. P. 570. [b] PlariTian V. Vau\, 3 Campb. 429. (i') Hoffman v. Jlarshall, 2 Sc. 564. Sec. II.] OF MARINE INSURANCE. 265 reasonably incurred. (/") But, where an owner is sued for running down another vessel, and obtains a judgment in his favor, but is put to extra costs, he is not entitled to recover those costs under this clause, (^g) 1 1 95. Vahtation and adjtistmeni of losses — Trained and open policies — Over-valued policies — Calciilation of the value — Deduction for new mate- rials. — The question as to whether there is a total or partial loss is independent of the question whether the policy is valued or not valued. If the whole of the subject-matter , covered by the insurance is lost, it is a total loss ; if a part only is lost, the loss is a partial loss, the amount of which depends on the proportion the part lost bears to the whole subject-matter of the insurance. Thus if the policy is a valued policy, the value being admitted, the assured is entitled to be indemnified to the extent of the declared value in the policy, and is released, as previously mentioned, from proving the value, unless the valuation can be im- peached by the underwriter. If the policy be an open policy, the value of the whole subject-matter of insurance must be proved. (Ji) If the policy can be shown to have been fraudulently overvalued, it will be void. But, if the declared value exceed the interest of the assured through some mistake or mis- apprehension, the loss will be adjusted in the same manner as if the policy were an open policy, and the computation be made by the real interest on board, and not by the value in the policy, (f) Where (/) Lee V. The Southern Insurance (//) Tobin v. Harford, 34 L. J., C. Co., L. R., 5 C. P. 397- P- 37- ig) Xenosv. Fox, L. R„ 4 C. P. {i) Le Cras v. Hughes, 3 Doug. 81. (Ex. Ch.) 665. See, however, Barker v. Janson, ante. -66 LAW OF CONTRACT. [Bk. II. Ch. V. several valued policies of insurance are effected upon the same vessel, valued differently, and upon a total loss occurring, the assured receives under some of the policies part of the sums insured, in an action upon another policy, he is only entitled to recover the dif- ference between the amount received and the agreed value in that policy, (i) If the policy be an open policy on a ship the value is taken to be the sum the ship is worth to the owner at the port where the voyage commences, including stores, furni- ture, provisions, wages, adv^ances to sailors, and all expenses of outfit to which are added the premium and costs of insurance. If it be an open policy on goods, the value is taken to be the prime cost of the goods as proved by the invoices and tradesmen's bills, adding thereto the shipping charges, and premium, and costs of insurance. The presumed value of the goods if they had reached their place of destination and been sold there, has nothing to do with the calculation of the outset value. The insurer has nothing to do with the market ; he has no concern in any profit or loss vv'hich may arise to the merchant from the goods. If they be totally lost, he must pay the prime cost, that is, the value of the thing he insured at the outset : he has no concern in any subsequent value. (/) If a ship insured has sustained a partial loss, as, for instance, if she has been damaged, and the damage has been repaired by the owner, the latter will not be allowed to receive from the underwriter more than two-thirds of the costs of the repairs, it being considered that a deduction of one-third ought to be made in fa\'or of the underwriters, by reason of the owner's having the (/') Bruce v. Jones, i H. & C. 769 ; (/) Lewis v. Rucker, 2 Burr. 1170. 32L. J., Ex, 132. Sec. II.] OF MARINE INSURANCE. 267 benefit of new materials instead of old, {in) unless the vessel is on her first voyage. {11) 1 196. Of the standard of value and measure of depreciation. — If a partial loss has been sustained on goods and merchandise, this loss is calculated and ad- justed by comparing the selling price of the sound commodity with the selling price of the damaged part of the same commodity at the port of delivery. The difference between these two subjects of comparison affords the proportion of loss in any given case, i. e., it gives the aliquot part of the original value which ma}^ be considered as destroyed by the perils insured against, and for which the assured is entitled to be recompensed. When this is ascertained, it only re- mains to apply this liquidated portion of loss to the standard by which the value is calculated (z. e., to the declared value in the case of a valued policy, and to the invoice price, &c., in the case of an open policy,) " and you then get the one-half, the one-fourth, or one-eighth of the loss to be made good in terms of money." (0) If part of the cargo, capable of a several and distinct valuation at the outset, be totally lost, as if there be one hundred hogsheads of sugar, and ten happen to be lost, the insurer must pay the prime cost of those ten hogsheads, without any regard to the price for which the other ninety may be sold. But, Vi^here one hogshead happens to be spoiled, no meas- ure can be taken from the prime cost to ascertain the quantity of such damage ; but, if you can fix whether it be a third, fourth, or fifth worse, the damage is fixed to a mathematical certainty. This is to be found out, not by any price at the outset port, but at the port of (m) Poingdestre V. R. Ex., R, & M, (n) Pirie v. Steele, 2 Mood. & Rob. 378. Da Costa v. Newnham, 2 T. R. 49. 412. (0) Usher V. Noble, 12 East, 647. 268 LAW OF CONTRACT. [Bk. II. Ci-i. V. delivery, where the voyage is completed and the whole damage known. Whether the price there be high or low, it equally shows whether the damaged goods are a third, a fourth, or a fifth worse than if they had come sound : consequently, whether the injury sustained be a third, fourth, or fifth of the value ; and, as the in- surer pays the whole prime cost if the thing be wholly lost, so if it be only a third, fourth, or fifth worse, he pays a third, fourth, or fifth of the value of the goods so damaged. For instance, suppose the value in the policy to be ^^30, the goods are damaged, but sell for ^40 ; if they had been sound, they would have sold for ^50. The difference then between the sound and the damaged is a fifth : consequently, the insurer must pay a fifth of the prime cost or value in the policy, that is, £6 ; e converso, if they come to a losing mar- ket and sell for ^10, being damaged, but would have sold for ;^20 if sound, the difference is one-half, and the insurer must pay half the prime cost or value in the policy, that is, ^15. (/) To put the matter in another shape, " If goods valued at ;^ioo, and coming to a good market, would, if sound, have been sold for ^120, but are so damaged as not to fetch more than £^0, the loss will be that proportion of the prime cost (^100) which the difference between the price of the damaged and the price of the sound goods (^80) bears to the price of the sound, £i'20. Thus, if ;^i20. : £?>o. : : ;^ioo. : — -the answer is ^66 135-. 4^/. the true loss." (^) This mode of calculation furnishes a criterion by which the amount of the deterioration on the damaged goods may be ascertained, without involving the underwriter in the fluctuations of a ris- (/) Lewis V. Rucker, 2 Burr. 1170 Hurry v. R. Ex. A<;s. Co., 3 B. & P. (jf) Marshall on Insurance, 634, 3rd 308. Tunno v. Edwards, 12 East, ed. Johnson v. Sheldon, 2 East, 5S1. 488. Si-c. II.J OF MARINE INSURANCE. 269 ing or falling market. The merchant in this way makes the market prices of the sound and damaged commodity serve " as the scales in which to weigh the depreciation." (r) 1 197. Liabilities of underwriters with reference to the amoiint of their siibscriptions. — The underwriters are liable for total or average losses in proportion to the sums they have underwritten. Thus, if a man underwrite ^100, upon property valued at ^500, and a total loss happen, he shall pay ;^ioo, that being the amount of his subscription ; and, if only an average loss, amounting to ^60 or ^70 per cent, then he shall pay only £(iO or ^70, being his proportion of the loss. The liability of the underwriter is not restricted to the amount of his subscription ; for he may be subject to an average and a total loss in the same voyage, or for several average or partial losses amounting together to more than his subscription, (f) But the assured can not, of course, in any case, re- cover anything beyond that which is a strict indem- nity for losses actually sustained. If several articles be insured for one sum, with a distinct valuation on each, as so much upon ship, and so much upon cargo, and no part of the cargo be taken on board, so that the risk upon that never attaches, the assured will re- cover only such a portion of the sum insured as the value of the article lost bore to the value of the whole. (^) In the case of open policies on freight, the usage is to calculate the loss upon the gross amount, and not upon the net value of the freight. (7/) When part of the goods insured is saved, and the sal- (r) Stevens on Average, 84. {t) Amery v. Rogers, i Esp. 203. (s) Le Cheminant v. Pearson, 4 {u) Palmer v. Blackburn, i Bing. Taunt. 367. Brooks v. M'Donnell, i 62. Y. &C. 515- 270 LAW OF CONTRACT. [Bk. II. Cil. V. vage exceeds the amount of the freight, the practice is to deduct the freight from the value of the goods saved, and to make up the loss upon the difference. 1 198. Signed adjustments. — When an adjustment has been made of the amount of the loss, and indorsed upon the policy and signed by the underwriter, this binds the latter unless he can show that it was made on wrong information, or under a mistake, or under the influence of misrepresentations. ( j') The adjustment is not an absolute and final settlement which is to be conclusively binding upon the parties ; {z) but, when the underwriter has once settled for the loss, he can not recover back the money he has paid, unless there has been actual fraud on the part of the assured. If he pays for a total loss, which afterwards turns out to have been only an average loss, he can not recover back his money, but must do the best he can with the property saved, {a) 1 199. Right of the insurer to recover compensa- tion where the loss or damage has been caused by the negligence of a tJiird party. — After satisfaction made to the owner for the loss or damage, the insurer stands in the place of the insured, and is not only entitled to what can be saved or restored in specie, but also to compensation, when compensation is recoverable, for the injury ; {b) and he is therefore entitled to sue the wrong doer in the name of the owner of the lost or damaged property, in order to recover compensation for such loss or damage, (f) If the policy is a valued (-r) Boyfield v. Erown, 2 Str, 1065. (a) Da Costa v. Firth, 4 Burr. [y) Herbert V. Champion, I Cam pb, 1966. 134. Shepherd v. Chewter, lb. 274. (b) Randal v. Cockran, I Ves. sen. Gammon v. Beverley, 8 Taunt. 124. g8. {z) Luckie v. Bushby, 13 C. B. {c) Mason v. Sainsbury, 3 Doug. 64. S78. Yates V. Whyte, 5 Sc. 640. Post. Sec. II.] OF MARLYE INSURANCE. 271 policy, the damages recovered will belong wholly to the underwriter, although the real value of the ship may exceed that stated in the policy, {d) 1200. Non-inception of the risk — Over-insur- ance by mistake — Return of the premium. — If the risk upon the policy never commences, the premium paid to the underwriter is recoverable by the assured, unless the policy has been rendered void by some pos- itive fraud on the part of the latter. Where the risk has not been run, whether owing to the fault, pleasure, or will of the assured, or to any other cause, the con- sideration for the premium fails ; but, if the risk of the contract has once commenced, there can be no appor- tionment or return of the premium afterwards. (-. Harvey, 23 L. J., Ch. C. 484. Jones V. Provinc. Ins. Co., 3 511. Armstrong v. Turquand, 9 Ir. C. ]-!.. N. S., 65 ; 26 L. J., C. P. 272. Com. Law Rep.''32. Sec. IV.] OF LIFE INSURANCE. 299 But the assignment vested the equitable interest in the contract in the assignee, and entitled the latter to sue upon the policy, in the name of the party who was clothed with the legal interest, and who had the right of action thereon at common law. [q) Now, however, by the Policies of Assurance Act, 1867 (30 & 31 Vict. c. 144), any person or corpora- tion now being or hereafter becoming entitled, by as- signment, or other derivative title, to a policy of life assurance, and possessing at the time of action brought, the right in equity to receive and give an effectual dis- charge for the moneys thereby assured, may sue at law in the name of such person or corporation to recover such moneys. By sect. 3, no assignment made after the passing of the Act is to confer on the assignee any right to sue, until a written notice of the date and purport of the assignment has been given to the as- surance company at their principal place of business, which is to be specified in the policy (sect. 4) ; and the date on which the notice is received is to regulate the priority of all claims under any assignment ; and a payment boni fide made in respect of any policy by an)- assurance company before the date on which the notice is received, is to be as valid as if the Act had not been passed. By sect. 5, the assignment may be made either by indorsement on the policy or by a sep- arate instrument in the form given in the Act. By sect. 6, every assurance company to whom notice of assignment shall have been given, are, at the request in writing of the person giving the notice, and upon payment of a fee not exceeding five shillings, to de- liver an acknowledgment in writing, under the hand of the manager, secretary, treasurer, or other principal officer of the assurance company, of their receipt of (q) Ashley v. Ashley, 3 Sim. 151. 300 LAW OF CONTRACT. [Bk. II. Ch. V. such notice ; and such acknowledgment, if signed by a person being de jure or de facto, the manager, sec- retary, treasurer, or other principal officer of the as- surance company, will be conclusive evidence as against the company of their having duly received the notice to which the acknowledgment relates. By sect. 7, the expression " policy of life assurance " or " policy" is to mean an instrument by which the pay- ment of moneys, by or out of the fands of an assurance company, on the happening of any contingency de- pending on the duration of human life, is assured or secured; and the expression "assurance company" is to mean and include every corporation, association, society, or company carrying on the business of assur- ing lives or survivorships, either alone or in conjunc- tion with any other object. By sect. 8, the Act is not to apply to any policy of assurance granted or to be granted, or to any contract for a payment on death entered into, in pursuance of the provisions of the i6 «& 17 Vict. c. 45, or the 27 & 28 Vict. c. 43, or to any engagement for payment on death by any friendly society. Notice of the assignment should be given to the insurance company, not only for the purpose of secur- ing a right to sue in the name of the assignee, but also in order to take the policy out of the order and dis- position of the assignor in case of his bankruptcy, and prevent it from passing to the trustee, (r) An assign- ment of a life policy to secure a debt, with proviso for redemption, is an assignment by way of mortgage, and requires an ad valorem stamp as such, (s (;■) Ante. Williams v. Thorp, 2 Drew. & Sm. 8. Green v. Ingham, L. Sim. 257. Ex p.nic Colvill, i Mont. R., 2 C. P. 525 ; 36 L. J., C. P. 236. no. Ex pai-te Tennyson, I Mont. & Webb, in rf , 36 L. J., Ch. 341. El. 67. Thoiripson v. Tomkins, 2 (s) Caldwell v. Dawson, 5 Exch. 6. Sec. IV.] OF LIFE INSURANCE. 301 Where a policy is to be void in case of suicide, unless it has been legally assigned, any circumstances constituting a valid, equitable assignment of the policy will satisfy the proviso ; (t) but an assignment by operation of law, such as an assignment by force of the Bankrupt Acts, is not within the proviso, and will not keep the policy on foot for the benefit of credi- tors, (ti) 1232. Right of the party interested in the policy to recover the assurance money. — The liability upon a life policy is not affected by the question whether the party claiming the benefit of the policy has, 'or has not, been damnified by the happening of the contin- gency upon which the money becomes payable. Thus, if a creditor insures the life of his debtor to the extent ■of the debt, and after the death of the debtor the exec- utors of the debtor pay the debt to the creditor, the latter may nevertheless recover upon the policy the amount insured by him upon the life of such debtor, {x) 1233. Appropriation of the funds of life assur- ance companies. — By the 33 & 34 Vict. c. 61, s. 4, it is enacted that, " in the case of a company established after the passing of this Act, transacting other business besides that of life assurance, a separate account shall be kept of all receipts in respect of the life assurance and annuity contracts of the company, and the said receipts shall be carried to and form a separate fund, to be called the life assurance fund of the company, {t) Jones V. Consnl. Ins. Co., 28 L. (x) Dalby v. Ind. & Lend. Life A=;s. J. Ch. 66 ; 26 Beav. 256. White v. Co., :5 C. B. 390 ; 24 L. J., C. P. 8, The British Ass. Co., Mite. overruling Godsall v. Boldero, 9 East, (ti) Jackson v. Forster, i Ell. & Ell. 72. De Morgan on Probabilities, p. 463; 2q L. J., Q. B. 8. Moore v. 244, cited lb. 393-397. Lawv. Lond. Woolsey, 4 Ell & Bl. 255 ; 24 L. J., Q. Indisp., 24 L. J., Ch. 196. Ante. K. 40. 3D2 LA 11' OF CONTRACT. [Bk. II. Ch. V. and such fund shall be as absolutely the security of the life policy and annuity holders as though it be- longed to a company carrying on no other business than that of life assurance, and shall not be liable for any contracts of the company for which it would not have been liable had the business of the company been only that of life assurance ; (_y) and, in respect to all existing companies, the exemption of the life assurance fund from liability for other obligations than to its life policy holders shall have reference only to the contracts entered into after the passing of this Act, unless by the constitution of the company such exemption already exists ; provided always that this section shall not apply to any contracts made by any existing company by the terms of whose deed of set- tlement the whole of the profits of all the business are paid exclusively to the life policy holders, and on the face of which contracts the liability of the assured dis- tinctly appears." 1234. Winding-up of insurance co7npanies. — By sect. 21, " the court may order the winding-up of any company in accordance with the Companies Act, 1862, on the application of one or more policy-holders or shareholders, upon its being proved to the satisfac- tion of the court that the company is insolvent." (r) By sect. 22, " the court, in the case of a company which has been proved to be insolvent, may, if it thinks fit, reduce the amount of the contracts of the company upon such terms and subject to such condi- { y) By the 35 & 36 Vict., c. 41, ^. 2, into before the passing of the 33 & 34 the f{>regoing part of tlie section is to Vict. u. 61. apply to every company estaljlished (z) And see the 35 & 36 Vict,, c. 41, before ih-; passing of the 33 & 34 Vict., s. 4, as to the winding-up of a subsidi- c. 61 ; but neither thii nor tliat Act is ary company. The mode of vahiing to diminish the liability of the life as- the policies in the case of a wiirding- surance fund for any contracts entered up is provided for by sect. 5 of the same Act. Sec. IV.] OF LIFE INSURANCE. 303 tions as the court thinks just, in place of making a n'inding-up order." 1235. Novatio7ts by policy-holders. — By the 35 & 36 Vict. c. 41, s. 7, it is provided that " where a com- pany, either befoi-e or after the passing of this Act, has transferred its business to or been amalgamated with another company, no policy-holder in the first- mentioned company who shall pay to the other com- pany the premiums accruing due in respect of his pol- icy, shall by reason of any such payment made after the passing of this Act, or by reason of any other act done after the passing of this Act, be deemed to have abandoned any claim which he would have had against the first-mentioned company on due payment of premiums to such company, or to have accepted in lieu thereof the liability of the other company, unless such abandonment and acceptance have been signified by some writing signed by him or by his agent law- fully authorized." 1236. Insurance against injury by accident. — Where an insurance company granted policies of in- surance against loss of life and personal injuries arising from " accidents at sea," it was held that death by sun- stroke was not an " accident " within the meaning of the policy, and that death engendered by exposure to heat, cold, damp, and atmospheric influences could not properly be said to be accidental; {a) but death by drowning is a case of death by " accident " within the meaning of such a policy, {f) Where a policy for insuring the payment of money in case the insured should be injured by accidental violence, and die from the direct effect of such accidental injury, expressly excepts death or disability from any disease or cause {a) Sinclair v. Maritime T'a^s. Ass. (b) Trew v. Rail. Pass. Ass. Co., 6 Co., 30 I,. J„ Q. R. 77. H. & N. 839 ; 30 L. J., Ex. 317. 304 LAW OF CONTRACT. [Bk. II. Ch. V. arising within the system of the insured before, or at the time of, or following such accidental injury, death from disease within the system, which disease has been caused by accidental violence, is not within the excep- tion, (c) In consequence of the above case, the clause contained in the policies of the company was varied, and the policy does not now insure against " death from rheumatism, gout, hernia, erysipelas, or any other disease or secondary cause or causes arising within the system of the insured before, or at the time of, or following, such accidental injury (whether caus- ing such death directly or jointly with such accidental injury)." Where erysipelas supervened upon, and in consequence of, an accidental cut, and the assured died of the erysipelas seven days after the accident, it was held that the insurers were protected by the above condition, and were not liable, (d) 1237. Breach of contracts of ins7trancc — Raihvay accidents. — Where a passenger by railway eflfected an insurance for ^^1,000, Vi^ith a company, to be paid to his personal representatives in the event of his death by a railway accident, and a proportionate part of the ^1,000 to be paid to the assured himself in case of any personal injury by reason of such accident, it was held that the damages recoverable in respect of per- sonal injury to the assured not attended with loss of life, were confined to compensation for bodily pain and suffering and the expenses of medical and surgical attendance, &c., and that loss of time or loss of profits resulting from the accident could not be taken into consideration by the jury ; " otherwise one passenger, whose time is more valuable than another's, would, for precisely the same personal injury, receive a larger (c) Fitton V. Accidental Death Ins. (d) Smith v. The Accident Ins. Co., Co., 17 C. B., N. S. 122 ; 34 L. J., C. L. R., 5 Ex. 302. P. 2g. Sec. IV.] OF LIFE INSURANCE. 305 remuneration than another whose time would be of less value." (r) 1238. Breach of covenants to insure. — Where a covenant was entered into with an insurance company to keep up a policy in their office as security for money lent by them, and the policy was dropped, and the company recovered judgment for the amount of the loan, with interest thereon, it was held that the measure of damages was not the amount of the pre- miums which would have been payable to the com- pany if the policy had been kept up, but the amount of injury sustained, either through loss of the security, or through the expenses incurred in effecting another insurance. (/") Where a deed by which a debtor as- signed a policy of insurance on his life for ^1,000 to trustees for his creditors, contained a covenant that he would not do any act or thing by which the policy should be forfeited, and the policy was subject to a condition that, if the assured should go beyond the limits of Europe without license from the directors, the policy should be void, and the debtor went be- yond the limits of Europe without license from the directors, it was held that the measure of damages was the present value of the policy to be assessed by an actuary, taking into consideration the fact that the debtor had covenanted to pay, and would have to pay, the premiums on the policy, {g) ^ Ke) Theobald V. Railway Passengers' Ex. ig. Brown v. Price, 4 C. B., N. Ass. Co., 23 L. J., Ex. 249. S., 598. (/) Nat. Ass. Co. V. Best, 27 L. J., (g) Hawkins v. Coulthurst, 5 B. & S. 343 ; 33 L- J., Q- B. 192. ' An " accident " policy of insurance includes in tlie category of " accidental injury" an accidental strain which results in death. North American Life, &c., Ins. Co. v. Burroughs, 69 Pa. St. 43. But a policy to cover the insured " -.vhile traveling by public or private conveyance" does not cover him while walking on foot. Ripley v. Insurance Company, 16 Wall. 386. 3o6 LAW OF CONTRACT. [Bk. II. Ch. VI. CHAPTER VI. MERCANTILE INSTRUMENTS. SECTION I. BILLS, NOTES, AND CHECKS. 1239. Bills of exchange. — Bills of exchange are, by the custom of merchants, transferable from one person to another, so as to entitle the transferree to sue upon them in his own name. Any absolute, un- conditional order {a) in writing from one man to another, duly stamped, directing the drawee, or person to whom the order is addressed, to pay a sum of money to the drawer or to his " order," or to some third party or to the order of such third party, and accepted by the drawee, is a bill of exchange, transferable by the payee, so as to enable the transferree to sue in his own name upon such bill, provided the assignment has been made by the payee in conformity with mercan- tile custom, as settled and established by law. {U) In order to constitute a bill of exchange it is essential that there should be a drawer, a drawee, and a payee ; and, though the payee may be described in any way, yet, in order that the bill should be valid, the payee (a) If the order is for the payment ity indorsed on the face of the bill, of money on a contingency, the instru- see Meredith, ^^ /a?Y(?, 32 L. J., Cb. ment is not negotiable. Alexander v. 302. Thomas, 16 Q. B. 333 ; 20 L. J., Q. B. (<5) Ellison v. Collingridge, g C. B. 207. Crouch V. Credit Foncier of 570 ; 19 L. J., C. P. 268. Lloyd v. England, L. R., 8 Q. B. 374 ; 42 L. J., Oliver, 21 lb., Q. B. 307. Peto v. Rey- Q. B. 183. As to limitations of liabil- nolds, g Exch. 410. Sec. I.] BILLS, NOTE'S, AND CHECKS. 307 must be a person capable of being ascertained at the time the bill is drawn, (c) 1 240. Transfer of bills of exchange. — If the writ- ten order duly stamped is made payable to " bearer," it is transferable by mere delivery ; (a' ) so that any bona fide holder or bearer of the instrument is entitled to maintain an action upon it in his own name as soon as it becomes payable. If, on the other hand, it is drawn " payable to order," it can only be assigned by indorsement from the payee, {e) The indorsement may be written either on the back or the face of the bill, (/) and is sometimes an indorsement in full, so-called, because the indorser not only writes his own name on the bill, but expresses therein in whose favor the in- dorsement is made, as " pay the contents to Mr. A. B.," and sometimes an indorsement in blank, when the name of the indorser himself alone appears upon the instrument, no mention being made of the indorsee. In the first case the indorsee can only transfer his in- terest in the bill by his own indorsement in writing ; but, in the second, he can transfer it by delivery only, so that any subsequent bon^ fide holder may treat the first indorsement in blank as a direct indorsement to himself, and bring an action in his own name upon the instrument ; and this he may do notwithstanding subsequent indorsements in full have been made thereon. (^gY Any number of persons, too, whether (c) Yates v. Nash, 2g L. J., C. P. {e) Edge v. Bumford, 31 Beav. 247. 306 ; 8 C. B., N. S., 581. M'Call v. (/) Young v. Glover, 3 Jur., N. S , Taylor, 34 L. J., C. P. 365 ; 19 C. B., 637. N. S., 301. {g^ Fairclough v. Pavia, g Exch. (d) Gibson v. Minet, i H. Bl. 606. 695 ; 23 L. J., Ex. 215. Wookey v. Pole, 4 B. & Aid. 9. ' This indorsement constitutes a distinct contract, to be gov- erned thereafter by the law of the state where it is made. National Bank v. Green, 2,2, Iowa, 140. The indorsement of a 3o8 LA IV OF CONTRACT. [Bk. II. Ch. VI. partners or not, may, it seems, join in suing upon a bill indorsed in blank. (/^) The bill may be indorsed before the day that it bears date (/) and before acceptance, and whilst the date and the amount for which it is drawn are left in blank ; (/cy and the acceptance and indorsement may be made before the bill is drawn ; and a bill drawn and issued in blank for the name of the payee may, under certain circumstances, be filled up by a bona fide holder with his own name, and will bind the drawer. (/) If the bill be made payable by the fraud of the acceptor to a fictitious payee, a bona fide holder may recover upon the instrument as a bill payable to Ifcarer. (;«) If the indorsement is made before the bill has been filled up for any specific sum, the in- dorser may become liable to subsequent indorsees or holders to any amount warranted by the stamp. The indorsement is a letter of credit for an indefinite sum. (;/) If the payee of a bill or money order, not negotia- ble, indorses it, he is liable on his indorsement to his indorsee. (u) .Minet v. Gibson, 3 T. R. 481 ; (/) Pasnnore v. North, 13 East, 517. i H. Bl. 569 ; cited, I Campb. 130. (/■) Snaitlr v. Mingay, i M. & S. 87. {«) Kussell \. Langstafk, 2 Doug. (/) Sdiultz ». Astlcy, 2 Bing. N. C. 51:, a. Match v. Searlus, -> Sm. i.\: 544; 2 Sc. 815. Crutchley v, Clar- GilT. 152. ((') Hill V. l^ewi^, I Salk. 132. negotiable bill after maturity is equivalent to the drawing of a -r new bill of exchange at sight, and the same diligence is required in making demand and giving notice as is required to change indorsers. Where an indorsement was made on April 1 9, and the demand and refusal un the following July 3, no explanation appearing of tiie delay, held that the endorsers A\crc not liable. Light v. Kingsbury, 50 JMo. 331. In Ohio a blank endorser is presumed to be a guarantor -Hoffman v. Levy, 2 Cin. 224. Sec. I.] BILLS, NOTES, AND CHECKS. 309 the drawer of a new bill, or as the indorser of the old bill ; but he can not treat him as both, {p) Every indorser may be taken as the drawer of a fresh bill, inasmuch as he guarantees payment of the bill when at maturity by the acceptor, {qy " A bill of exchange is negotiable ad infinitum, until it has been paid by, or discharged on behalf of, the acceptor. If the drawer has paid the bill, he may sue the acceptor upon it ; and, if, instead of suing the acceptor, he put the bill into circulation upon his own indorsement only, it does not prejudice any of the other parties who have indorsed the bill, that the holder should be at liberty to sue the acceptor." (r) But, when the bill has been paid by the acceptor, or the person ultimately liable upon it, it has done its work, and is no longer a negotiable instrument. No person can sue on it ; no person remains liable on il. If put into circulation again, it becomes a new bill, payable at sight, and must have a fresh stamp. An accommodation bill, paid by the drawer at maturity, can not, therefore, be re-issued and negotiated, (s) A payment, however, before the bill becomes due " does not extinguish it any more than if it were merely dis- counted. A contrary doctiine would add a new clog (p) Burmester v. Hogarth, ii M. & {r) Lord Elleneorough, Callow v. W. lOI. Lawrence, 3 M. & S. 95. Hubbard v. (q) Matthews v. Bloxsome, 33 L. J., Jackson, 4 Bing. 391. Q. B. 213. Penny v. Innes, i Cr. M. U) Lazarus v. Cowie, 3 Q. B. 465. & R. 439- ' Where, in an action by an indorsee against his indorser, tlie defendant set up that he indorsed simply to transfer his ownership, under a verbal agreement that plaintiff was to take the note as payment for certain property delivered to defend- ant, and that in ignorance of the law he omitted to use tlie words " without recourse," held — not a good defense, as con- tradicting the written contract of indorsement. Lee v. Pile, 37 Ind. 107. 3ro LAW OF CONTRACT. [Bk. II. Ch. VI. to the circulation of bills and notes; for it would be impossible to know whether there had not been an anticipated payment of them." {i) If, therefore, the acceptor discounts the bill, he may re-issue it, and send it forth again into general circulation. (?/) 1241. Restrictive indorsements. — The negotiabil- ity of the bill may be limited and restrained by the express terms of the indorsement. Hence there are restrictive, conditional, and qualified indorsements. If the payee, by special indorsement, makes a condi- tional transfer of the bill before acceptance, the drawee who accepts afterwards is bound by the condition, (^x) If the indorsement is accompanied by a notification that " the within must be credited to A," or a direction "to pay A for my use," every indorsee and subsequent holder has notice of the direction, and holds the bill, or the money he receives upon it, as the trustee of the restraining party, (jk) But an indorsement, " Pay J. S., or order, value in account with H. C. D.,'" is not restrictive, (^s) And, where a bill of exchange has been indorsed in blank, and rendered generally nego- tiable, its negotiability can not afterwards be restrained by subsequent restrictive indorsements ; and the ac- ceptor consequently must pay the bill on presentment by the indorsee or holder ; and, if it is not paid by the acceptor after such a presentment, the indorsers will be liable upon the instrument, (a) The amount to be recovered upon the bill can not be split into separate sums by the indorsement, so as to subject the prior {t) Burbvidgev. Manners, 3 Campb. [y) Lloyd v. Sigourney, 5 Bing 525 ; ^93- 3M.&P. 239. Sigourney V. Lloyd, S (u) Attenborough v. Mackenzie, 25 B. cS: C. 622. L. J., Ex, 244. Morley v. Culverwell, (z) Buckley v. Jackson, L. R., 3 Ex. 7 M. & W. 1S2. 135. (.t) Robertson ». Kensington, 4 (<7) Walker v. Macdonald, 2 Exch. Taunt. 30. 527 ; 17 L, J., Ex. 377. Sec. I.j BILLS, NOTES, AND CHECKS. 311 parties to a plurality of actions, {b) And, if the bill be indorsed for part only of the amount, and the limitation do not appear upon the face of the indorse- ment, the indorsee may sue for the whole sum due upon the bill, and will be a trustee of the surplus for the indorser. {c) 1242. Who is to be deemed a bond fide holder by indorsement. — The first transfer, by indorsement, of a bill of exchange is not effected by the mere act of the payee's writing his name on the back of the bill. There must be a handing of the bill over, and a delivery of it to the transferree or his agent, with intent to make the person to whom it is delivered the holder of the bill, and to pass the property in it to him, and to guar- antee the payment of it if the acceptor makes default (af) There is no indorsement, if the holder merely writes on the bill a direction to pay it to another person, and the other person gets possession of the bill without the holder's consent. Nor is there any indorsement, as between the indorser and his imme- diate indorsee, though the holder gives that person pos- session of the bill, if the delivery be merely for a col- lateral purpose, and without the intention to make him the transferree of the property in the bill, (^) or with the intention only of making him indorsee and owner of the bill on the performance of certain terms and conditions. (_/") Where a testator wrote his name on the back of a bill payable to his order, and kept the bill in his possession, and his executrix after his death delivered the instrument to the plaintiffs with- ili) Hawkins v. Cardy, i Ld. Raym. 20 L. J., Q. B. i. Attenborough v. 360. Clark, 27 L. J., Ex. 138. (c) Reid V. Furuival, i C. & M. 538. (/) Bell v. Lord Ingestre, 12 Q. [d) Denton v. Peters, L. R., 5 Q. B. 317 ; ig L. J., Q. B. 71. Castriqu* £. 475. V. Buttigieg, 10 Moore, P. C. 109. ie) Lloyd V. Howard, 15 Q. B. 997 ; 312 LAW OF CONTRACT. [Bk. II. Ch. VI. out indorsing it, it was held that the writing of his name by the deceased, and the delivery by the execu- trix, would not together constitute an indorsement of the note, and that the party to whom it was delivered had consequently no right to sue upon it. (^) If the indorsement is intended to constitute a testamentary gift, it must be authenticated as such, {/i) But, if the party to w^hose order the bill is payable writes his name on the back of the bill, and hands it over to another, who delivers it to a third person foT value, that is an indorsement from the holder to such third person, and constitutes the latter the absolute owner of the bill. Where the drawer of a bill wrote his name on the back of it, and delivered it to a party to get it discounted, and the latter pledged the bill with a pawnbroker, and appropriated the money he received on the deposit of the bill to his own use, it was held that there was a valid indorsement of the bill from the drawer to the pawnbroker. (/) One who receives a bill of exchange unindorsed (though for value), acquires no better title under it than that which the person from whom he receives it had. Therefore, where A had fraudulently obtained a bill from B and handed it to C, in satisfaction of a bona fide debt, but without indorsing it, it was held that C could not acquire a legal title to sue by obtain- ing A's indorsement after he had received notice of the fraud, (/e) When the drawer or party to whose order the bill is payable has written his name on the back of the bill, and handed the bill over in the ordin- ary course of transfer, it is afterwards transferable, as (/) Bromage v. Lloyd, I Exch. 35 ; (i) Barber v. Richards, 6 Exch. 63 ; 16 L. J., Ex. 257. 20 L. J., Ex, 135, (A) Mitchell v. Smith, 33 L. J., Ch. (k) Whistler v. Forster, 14 C. B., N. 596. S., 24S ; 32 L, J., C. P. 161. Sec. I.] BILLS, NOTES, AND CHECKS, 313 previously mentioned, from hand to hand, by mere delivery ; and the consideration for each successive transfer can not be inqirlred into, unless the bill has been stolen or obtained by misrepresentation or fraud. Any holder, therefore, who does not wish to sue in his own name on the bill may hand the bill over to an- other party, in order that the latter may sue upon it for him as his trustee. ( /) But the bill must be handed over prior to the commencement of the action ; for, where the holder of a bill indorsed in blank, being unwilling to sue upon it himself, procured the plain- tiff, who had no interest in the bill, to sue upon it, and handed the bill to the plaintiff after the commence- ment of the action, that the latter might produce it in court, it was held that the plaintiff was not entitled to recover upon it, as he was not the holder of the bill at the time he brought his action. (;w) If however, the bill has been indorsed and delivered to some person professing to act as the plaintiff's agent, although with- out his knowledge, and the plaintiff adopts the acts of the assumed agent, that is sufficient to entitle him to recover, although the action has been commenced in the plaintiff's name without his knowledge, and before the adoption. (/«) 1243. Intermediate infirmities of title. — A bona fide holder for value is not affected by an intermediate fraud or infirmity of title of which he had no knowl- edge or cognizance at the time he advanced his money on the credit and security of the bill of which he is the holder. Therefore, if a bill of exchange, indorsed gen- erally, and handed over by a person competent to in- (/) Ouldsv. Harrison, lo Exch. 579. (in) Emmett v. Tottenham, 8 Exch. 24 L. J., Ex. 69. Law V. Parnell, 7 884 ; 22 L. J., Ex. 281. C. B., N. S., 282 ; 29 L. J., C. P. 17. (») Ancona v. Marks, 7 H. & N. 686 ; 31 T.,. J„ Ex. 163. 314 LAW OF CONTRACT. [Bk. II. Ch. VI. dorse it, is afterwards stolen, aad the thief delivers it for value to a party who receives it without notice of the theft, the latter has full authority to negotiate the bill or sue upon it. (tone, 26 I.. J., c. r. 5^ ; I c. r.., X. s., 273. Sec. I.] BILLS, NOTES, AND CHECKS. 315 fraud, the plaintiff may be called upon for proof that he gave value for the bill, and took it without notice of the illegality or fraud ; and if such proof is not forthcoming, the plaintiff may be prevented from re- covering upon the instrument, {s) Where one part- ner has accepted a bill in fraud of the other partners, and has applied the proceeds therefrom to his own use, the holder must show that he gave value for the bill. (/) But, if it is not distinctly proved that the note is tainted with illegality or fraud, the holder can not be called upon to show that he gave value for the bill, (ti) Notwithstanding the general rule, that the onus is on the maker of a negotiable instrument to show that it has been paid, the holder is bound in the first place (unless he is a derivative indorsee for value during the currency of the bill or note) to show that the maker received value for it. (x) ^ 1245- Fraudulent transfers ond indorscme7its. — If the acceptance or indorsraent has been fraudulently made, and the plaintiff is a party to the fraud, or takes the bill with full knowledge of the fraud and of the infirmity of the title of his assignor, he can not sue upon the bill, although he has given full value for it ; but an innocent indorsee, who has received the bill, and given value for it, without notice of the fraud, may, it seems, transfer his title and right of action to a (/) Hall V. Featherstone, 3 H. & N. son v. Hardacre, 4 Taunt. 114. 284 ; 27 L. J., Ex. 308. Mather v, {t) Hogg v. Skeen, 18 C. B., N. S., Lord Maidstone, i C. B., N. S., 273; 426; 34 L. J., C. P. 153 ; overruling 26 L. J., C. P. 5S. Smith v. Braine, Musgrave v. Drake, 5 Q. B. 186. 16 Q. B. 244 ; 20 L. J., Q. B. 201. («) Fitch v. Jones, 5 Ell. &. Bl. 245 ; Berry v. Alderman, 14 C. B. g5 ; 23 24 L. J., Q. B. 293. L. J., C. P. 34. Harvey v Towers, 6 (x) Dettmar v. Metropolitan & Pro- Exch. 656 ; 20 L. J., Ex. 31S. Pater- vincial Bank, i H. & M. 641. ' Wood V. Schlater, 24 La. Ann. 284 ; First National Bank v Sturgis, 8 Kan. 660; Porter v. Jones, 52 Mo. 399; Harwood V. Knapper, 50 Id. 456; Bonesteel v. Bonesteel, 30 Wis. 516. 3i6 LAIV OF CONTRACT. [Bk. II. Ch. VI. person who has knowledge of the original fraud, but is no party thereto. The latter may purchase the title and interest of the innocent indorsee, and so obtain a right of action upon the instrument, (j)/) If a person holds the bill for a specific purpose, as for the benefit of the drawer or acceptor, and indorses the bill over in breach of the trust reposed in him, the indorsee can not, if he has notice of the trust at the time of the in- dorsement, acquire any better right or title to the bill than the indorser had ; for by taking the bill under such circumstances he makes himself a party to a fraud. (z) If the holder is a mere agent, he will be affected with the infirmity of the title of his principal, and can not have a better right upon the bill than his principal has. {a) If a bill obtained by fraud is handed over, without indorsement, to an innocent holder for value, and the indorsement is not made until after the holder becomes cognizant of the fraud, he can not sue upon the bill, {b) If the party at the time of signing the bill is, without neghgence on his part, misled as to the nature and contents of the document which he is sign- ing, his signature will be of no force ; for his mind does not go with the signature, and it is in the view of the law no signature at all, and a bon^ fide holder for value can not recover against a person who has signed under such circumstances, (r) 1246. Accommodation bills. — Where the bill has been accepted for the accommodation of the drawr*: without any consideration or value for the acceptance, and that was known to the indorsee at the time he took the bill, and the indorsee paid only part of the (_!') May V. Chapman, 16 M. & W, East, 136. 360. {b) Whistler v. Forster, 14 C. B,, N. (.0) Evans v, Kymer, I B. & Ad. S., 255 ; 32 L. J., C. P. 1 61. 52S. (1:) Foster v. Mackinnon, E. R., 4 C {a) Solomons v. Bank of Eng., 13 P. 704 ; 38 L. J., C. P. 310. Sec. I.] BILLS, NOTES, AND CHECKS. 317 amount for which the bill was drawn, he can only re- cover the sum he actually paid for the bill, (d) So, if part of the money due on the bill has been paid by the drawer, the holder can only recover the balance from the acceptor, {e) ^ 1247. Indorsement of bills overdue. — Whenever the bill is due at the time of the indorsement, " it comes disgraced to the indorsee, and it is his duty to make inquiries concerning it. If he takes it, though he gives a full consideration for it, he takes it on the credit of the indorser, and subject to all the infirmities with which it may be incumbered in his hands," (y^) such as the payment or satisfaction of the bill itself to the prior holder. But the indorsee does not take it sub- ject to claims arising out of collateral matters, such as the statutory right of set-off, which is merely a mode of preventing multiplicity of actions between the same parties, {g) An original absence of consideration, the acceptance being an accommodation acceptance, will not defeat the claim of an indorser for value of an over- due bill, unless there was an express or implied agree- ment restraining the negotiation of the bill after it should become due. (/z) And, even if there was an agreement that the bill should not be negotiated after it was due, this will not aflfect a bona fide indorsee for value, who took the overdue bill without notice of the agreement, (z) If, pending an action on a bill of ex- ((/) Wiffen V. Roberts, I Esp. 259. 579. Swan, ex parte, L. R., 6 Eq. (e) Cook V. Lister, 13 C. B., N. S., 35S. 543 ; 32 L. J., C. P. 121. (h) Charles v. Marsden, r Taunt. (/) Crossley v. Ham, 13 East, 503. 224. Sturtevant v. Ford, 4 M. & Gv. IJoyd V. Howard, 15 Q. B. 998. loi. Lazarus v. Cowie, 3 Q. B. 464, Holmes v. Kidd, 3 H. & X. 891 ; 28 Parr v. Jewell, 16 C. B. 684. L. J., Ex. 112. (/) Carruthers /. West, 17 L. J., Q. {g) Quids V. Harrison, 10 Exch. B. 4. ' Howe V. Potter, 61 Barb. 356 ; Fetters v. Muncie, &c., Bank .34 Ind. 251. 3i8 LAW OF COXTRACr. [Rk. II. Ch. VI chansfe, the bill is transferred to an indorsee, with notice, who brings a second action on the bill, that may be ground for the equitable interference of the court, but does not take away the negotiability of the instru- ment. (/&) 1248. Presentment for acceptance. — The holder of an unaccepted bill should present it for acceptance with- out delay, in order that he may obtain the security of the acceptor. If acceptance is refused, the antecedent parties become liable immediately. Twenty-four hours at least ought to be allowed to the drawee to deter- mine whether he will accept or not, if he requires time for consideration ; but, if he avows his determination not to accept, the holder may forthwith proceed against the antecedent parties ; and if the acceptor clogs his acceptance with conditions and qualifications, the holder may treat his qualified acceptance as a refusal to accept, and give notice of dishonor. If he accepts the qualified acceptance, he must give notice of the nature of the acceptance to the prior parties. (/) When the bill is payable a certain number of days after sight, it is to be accounted so many days after the bill shall be accepted or protested for non-acceptance. (;;/) The days are reckoned exclusively of the day on which the bill is accepted, and inclusively of the day on which it falls due. (;/) If no time at all is stated upon the face of the bill, {0) or if it is payable at sight or on presen- tation, (/) the instrument will be payable on de- mand. 1249. Proof of the acceptance.— ^y the 19 & 20 (/6) Deuters v. Towjisend, 5 B. & («) Coleman ^. Sayer, i Barnard, S. 613 ; 33 L. J,, Q. B. 301. 303. Bellasis v. Hester, i Ld. Raym. (/) Rowe V. Young, 2 B. & B. 281. Byles, 134. 240. {0) Abbott V. Douglas, i C. B. 491. (m) Campbell v. French, 6 T. R. (/) 34 & 35 Vict. c. 74. 212. Sec. I.] BILLS, NOTES, AND CHECKS. 319 Vict. c. 97, s. 6, it is enacted, that no acceptance of any bill of exchange, whether inland or foreign, shall be sufficient to bind or charge any person, unless the same be in writing on such bill, or, if there be more than one part of such bill, on one of the said parts, and signed by the acceptor or some person duly authorized by him. (^) The acceptance is usually made by the drawee's writing across the bill the word " accepted," and sign- ing his name thereto. Formerly, if the drawee merely wrote his name upon the face of the bill, without the word " accepted," or if he wrote " accepted," " present- ed," or aoy direction to pay addressed to a third party, or merely put his mark upon the bill, or promised in writing to accept or pay the bill, this was evidence for a jury of an acceptance of the instrument by him ; (r) and so was a letter from his solicitor after action, ad- mitting the signature to be in his handwriting, (jr) If the name of the acceptor is vvritten upon the bill by a third party, and the latter places his mark against the name as adopting such signature, there is a sufficient acceptance of the instrument. (/) If the drawee after he has put his name to the bill, and before he has parted with the possession of it, changes his mind, and runs his pen through the signature, the acceptance is can- celed, and he can not be made liable upon the bill. (7^) 1250. Fictitious indorsee. — If the acceptor has au- thorized the drawing and indorsement of the instru- ment in a particular form, or in the names of fictitious persons, he can not afterwards object to such drawing or indorsement, {y) [q) Fentum v. Pocock, 5 Taunt. (s) Chaplin v. Levy, g Exch. 531. ig6. {t) George v. Surrey, i M. & M. (r) Powell V. Monnier, i Atk. 612; 516. Bull. N. P. 270. Wynne v. Raikes, 5 {u) Cox v. Troy, 5 B. & Aid. 474. East, 514. Grant v. Hunt, i C. B. (v) Ashpitel v. Bryan, 5 B. & S 59. 7-3 ; 32 I- J., Q. B. 91 ; 33 lb, 328. 320 LAW OF CONTRACT. [Bk. II. Ci-r. VI. 1 25 1 . Liability of the acceptoT- — Failure of consid- eration. — As between the acceptor and the drawer of a bill, failure of consideration is an answer to an action for the amount of the bill, so that if a person purchases a bill payable at the end of three months for goods or money to be delivered to the acceptor at the end of one month, and the goods or the money are not de- livered, the acceptor is not liable upon the bill, unless it was indorsed before it became due to a boni fide holder for valu€. {x) When the bill has been nego- tiated the acceptor is bound to pay the bill at matur- ity, and to find out the holder for that purpose. He is not entitled to any presentment or formal demand of payment ; and a request in the shape of the issue of a writ is the only request that need be made him by the indorsee, although the bill be made payable on de- mand, {y) A person who has accepted a bill of ex- change can not escape from liability to a bona fide in- dorsee by setting up a forgery of the name of the drawer. {£) " The acceptor paying the bill has a right to the possession of the instrument for his own secu- rity, and as his voucher and his discharge pro tanto in his account with the drawer, and to one who should refuse or be unable to deliver up the bill, the acceptor is not bound (without an indemnity, /cj^) to pay the sum therein specified." (a) An acceptance of a bill of exchange can only be made by the party to whom the bill is addressed, or for his honor. An acceptance by any other person is not an acceptance within the usage and custom of merchants. Thus, where one John Hart drew a bill {x) Astley v. Johnson, 5 H. & N. {z) Mather v. Maidstone, 18 C. B. 141; 29 L. J., Ex. 161. Puget de 295; 25 L. J., C. P. 311. Eras V. Forbes, I Esp. 117. (a) Ramuz v. Crowe, 1 Exch. 173. {y) Rumball v. Ball. 10 Mod. 38. Sec. I.] BILLS, NOTES, AND CHECKS. 321 payable to himself or order, and addressed it to him- self, "John Hart," and across the face of the instru- ment was written, " Accepted, H. J. Clarke," it was held that Clarke could not be sued as acceptor of a bill of exchange directed to him. Such a bill so accepted would appear to be a promissory note, made by the acceptor, to pay the sum mentioned therein to the drawer or his order, {b) But, if the party to whom the bill is addressed writes his acceptance upon it in a name totally different from his own name, he will be liable upon the instrument, as he may accept it in any name he thinks fit to adopt, (f) Persons may, as we have before seen, draw, accept, or indorse bills in as- sumed or adopted names, and render themselves re- sponsible upon the instrument by so doing ; (^d) but, if the name of a party appearing on the face of a bill as drawer or indorser has been placed there without his authority, he can not, of course, be made responsi- ble upon the instrument, but the indorsee or holder must proceed against his own immediate indorsee, or the party from whom he got the bill. If the name of a party is mis-spelled, oral evidence is admissible to show who was intended, (e) The acceptor can not set up, as a defense to an action by an indorsee, that the drawer and first indorser was an uncertificated bank- rupt at the time the acceptance was given. If he credits the bill of a bankrupt he is responsible to every bona fide holder. (/) 1252. Liability of the drawer and indorser. — Every person who draws or indorses a bill of exchange {h) Davis v. Clarke, 6 Q. B. 19. {d) Jenkins v. Morris, 16 M. & W. Fielder v. Marshall, 30 L. J., C. P. 881. 158. (e) Willis V. Barrett, 2 Stark. 2g. (li, 5 Ell. & Bl. (/) Warrington v. Early, 2 Ell. & 91; 2| L. J., ll. B. 2S5. Bl, 763 ; 23 L. J., Q. B, 47. And see (0) iMa-,ter v. Miller, 4 T. R. 320 ; 5 Hir-chfield v. Smith, L. R., i C. P. T. R. 367 ; i Smith's L. C. 458-490. 341) ; 35 L. J., C. P. 177. Hirschman v. Budd, L. R., 8 Ex. 171 ; [in) Mason v. Bradley, II M. & W. 42 L, J., Ex. 113. ' See Wood v. Schlater, 24 La. Ann. 2S4 ; First National 13ank V. Sturgis, 8 Kan. 660; Porter v. Jones, 52 ^lo. 399; Harwood v. Knapper, 50 Mo. 456; Bonesteel v. Bonesteel, 30 Wis. 516. Sec. I.j BILLS, NOTES, AND CHECKS. 347 an insertion of an incorrect date, where tlie bill bore no date upon the face of it ; (/) an alteration in the place of payment ; or an insertion of some particular place of payment, without the privity and assent of the acceptor, {q) ^ 1 28 1. Immaterial alterations. — Whenever the alteration is immaterial, the substance of the contract remaining the same, the contract is not vitiated, although the alteration has been made by the plaintiff himself Where, therefore, the date of a bill, payable three months after date, was altered from the 2nd to the 22nd of March, it was held, as between the in- dorsee and the acceptor, that the alteration was an immaterial alteration, the time of payment not being accelerated, (r) Where a promissory note expressed no time for payment, and while it was in the posses- sion of the payee, the words " on demand " were added without the assent of the maker, it was held, in an action by the payee against the maker, that, as the alteration only expressed the effect of the note as it originally stood, and was therefore immaterial, it did not affect the validity of the instrument, {s) An al- teration or addition, moreover, to the contract, before (/) Harrison v. Cotgreave, 4 C. B. N. R. 221. 4 M. & Gr. 561. Burch- 5ft2. field V. Moore, 23 L. J., Q. B. 261. ((/) Calvert v. Baker, 4 M. & W. (r) Parry v. Nicholson, 13 M. & W. 417. Tidmarsch v. Grover, I M. & S. 778. 735. Desbrow v. Wetherby, i Mood. (s) Aldous v. Cornwall, L. R., 3 Q. & Rob. 438. Crotty v, Hodges, 5 Sc. B. 573 ; 37 L. J., Q. B. 201. ' See Major v. Hansen, 2 Biss. 195 ; Chism v. Toomer, 27 Ark. 108; Benedict v. Miner, 58 111. 19; Rainbolt v. Eddy, 34 Iowa, 440 ; Stoddard v. Penniman, 108 iMass. 366 ; Herrick v. Baldwin, 17 Minn. 209 ; Washington, &c., Bank v. Eck)', 51 Mo. 272; Peyton v. Harman, 22 Gratt. 643; Schryver v. Hawk?, 22 Ohio St. 308 ; Page v. Morrell, 3 Abb. App. Dec. 433 • .Hunt V. Gray, 35 N. J. L. 227 ; Wagner v. Diedrich, 50 Mo. 484. 3jS law of contract. [Bk. II. Ch. VL it has been finally completed, made with the assent of the parties to be affected thereby, will not avoid the instrument, or render a fresh stamp necessary. (/) Where a joint and several promissory note was altered after the two first makers had signed the instrument, but before the defendant had affixed his signature, it was held that the note was not vitiated as regarded the defendant, and that no fresh stamp was requisite. (u) Where a bill was made payable on the ist of January, and the person to whom it was directed struck out the word January, and inserted March, and then accepted the bill, and sent it to the drawer, who, perceiving the enlarged acceptance, struck out March and again inserted January, and at that time sent the bill for payment, which the acceptor refused, where- upon the holder of the bill again struck out January, and left the bill payable in March, as the acceptor had accepted it, it was held that the acceptor was respon- sible for the non-payment of the bill on the ist of March, pursuant to his original acceptance, (.r) Where the holder of a bill for value agreed to take a new bill, and a bill at three months was sent him, to which he objected, requiring a bill at two months, and the three was accordingly altered to two, and the bill made payable at two instead of three months, it was held that the alteration did not invalidate the bill, (y) Whenever the plaintiff has altered a bill or note so as to vitiate the security, and deprive the defendant of a remedy which he would otherwise have had upon the instrument against the parties whose names are upon the face of it, the plaintiff will not only be de- {/) Fitch V. Jones, 5 Ell. & Bl. 238 ; (x) Price v. Shute, cited, 4 T. R. 24 L. J„ Q. B. 293. 336. (m) Wright V. Inshaw, i Dowl,, N. (y) Tarleton v. Shingler, 7 C. B- S., 802. 812. .S'EC. I.] BILLS, NOTES, AXD CILECKS. 349 prived of all right of action upon the bill, but he will also lose all remedy for the recovery of the debt for which the bill was given, (z) But, if the defendant has assented to the alteration, and the security is viti- ated for want of a new stamp, or the bill has been ac- cidentally or ignorantly altered by the plaintiff, without any fraudulent intent, and the defendant's remedy against any other parties is not affected by the altera- ';ion, the plaintiff's right of action for the recovery of che debt on account of which the bill was given is not discharged. («) Where the sum of ;^2 5o had been advanced to a banker upon the security of a promissory note, and the note was subsequently al- tered by the parties, and vitiated by reason of there being no fresh stamp, it was held that the ^250 might be recovered independently of the note, upon a common count for money lent. (Ji) And, where the names of prior indorsers of a bill had been struck out by mistake, it was held that the erasure might be cor- rected, {c) It lies upon the party suing upon a bill or note to account for any material alteration appearing upon the face of it, or' to give some reasonable evi- dence from which it may be inferred that the altera- tion was not made under such circumstances as would avoid the instrument, or render a fresh stamp neces- sary, (flf) unless the making of the bill, as set out by the plaintiff, is admitted on the record, the defendant merely denying the indorsement to the plaintiff, ^(t) (z) Alderson v. Langdale, 3 B. & 412. Ad. 660. (li) Knight v. Clements. 8 Ad. & E. (a) Atkinson v. Hawden, 2 Ad. & E. 215. Henman v. Dickinson, 5 Bing. •528. Sloman v. Cox, I C. M. & R. 183 ; 2 M. & P. 289. Clifford v. 471. Parker, 3 Sc. N. R. 238. Cariss v. (b) Sutton V. Toomer, 7 B. & C. Tattersall, lb. 257. .416. W Sibley v. Fisher, 7 Ad. & E. ic) Wilkinson v. Johnston, 5 D. & R. 446. 350 LAW OF CONTRACT. [Bk. II. Ch. VI. or the alteration is immaterial, and does not affect the plaintiffs right of action. (_/ ) If a bill of exchange or note is altered in any ma- terial particular, the remedy of the bona fide holder for value is confined to a right to recover the considera- tion for the bill as between himself and the party from whom he received it. A similar remedy may be re- sorted to by each indorsee against his immediate in- dorser, till the party is reached through whose fraud or laches the alteration was made; and the loss must rest with him, as it was his duty to have preserved the instrument in its original state. (^) 1282. Loss of bills and notes. — By the 17 & 18 Vict. c. 125, s. 87, it is enacted that, in actions founded upon a bill of exchange or other negotiable instrument, it shall be lawful for the court, or a judge, to order that the loss of such instrument shall not be set up, provided an indemnity is given to the satisfaction of the court or judge, or a master, against the claims of any other person upon such negotiable instrument. {h) If the bill or note was not originally negotiable, that is, payable to bearer or to order, the loss of it is no defense to an action upon the instrument, (z) But, if a negotiable bill or note has been lost, the loss, if permitted to be set up, is an answer as well to an ac- tion upon the instrument as for the recovery of the debt for which it was given. (/6) 1283. Damages recoverable on the disJionor of bills. — Where an action is brought by the holder of a bill of exchange, not being an accommodation bill (/) Earl of Falmouth v. Roberts, 9 (?) Chariiley v. Grundy, 14 C. B. -M. & W. 469. 614 ; 23 L. J., C. P. 121. {g) Burchfield v. Moore, 3 Ell. & (k) Hansard v. Robinson, 7 B. & C. Bl. 687 ; 23 L. J., Q. B. 263. 95. Crowe v. Clay, 9 Exch. 608 ; 23 (/;) Noble V. The Bank of England L. J., E.k. 150. 2 H. &C.355. Sec. I.J BILLS, NOTES, AND CHECKS. 351 against the acceptor, and there has been a partial pay- ment by the drawer of the amount due on the bill, the holder may nevertheless recover the whole amount of the bill from such acceptor ; but he holds the differ- ence between the amount of the bill and the total amount received from the acceptor and the drawer to- gether, as a trustee for the drawer. If the bill is an accommodation bill, the holder can only recover from the acceptor the amount due, after giving credit for the payment. (/) When a bill drawn and indorsed in England, and payable abroad, is dishonored by the acceptor's non-payment, the holder is entitled to recover from the indorser the amount of the re- exchange, and not the amount he gave for the bill in England. (/?«) 1284. Damages for 7tot meeting bills at maturity. — Where defendant's, a banking company, had, under a special agreement, accepted the plaintiff's bills, but their bank broke before the bills arrived at maturity, and the plaintiffs arranged with another house to take up the bills, and paid commission, and also paid the expenses of protesting the bills and of telegraphing, it was held that, although as a general rule in an action on a bill of exchange by an indorsee against the ac- ceptor neither general nor special damages can be re- covered, yet, under the above circumstances, the com- mission and other expenses were recoverable as the reasonable and material consequence of the defendants' breach of contract, {ji) 1285. Parties to bills — Agents. — When the drawee is requested to pay a certain sum of money " on be- half," or " on account," of a named third party, and the (/) Cook V. Lister, ante. in) Prehn v. Royal Bank of Liver- (ot) Suse V. Pompe, 30 L. J., C. P. pool, L. R., 5 Ex. g2 ; 39 I,. J.. Ex. 75- 41. 352 LAU^ OF CONTRACT. [Bk. II. Ch. VI. drawee accepts in his own name on behalf of such third party, and the surrounding circumstances show that he had authority so to accept, and that he has bound such third party by his acceptance, he will not himself be personally liable upon his acceptance ; (o) but, if the bill is drawn upon him without qualifica- tion, and he accepts in his own name, he can not ex- empt himself from the (. rdinary liability of an acceptor by saying that he accepts on behalf of some third party on whom the bill is not drawn. (/) If a bill of exchange is addressed to several persons, and one of them alone accepts it, he is personally responsible upon the bill. (^) Where a bill upon the face of it purports to be accepted "per procuration," that cir- cumstance is a notice to whoever takes the bill that it has been accepted by an agent acting under an authority given to him by a principal ; and the holder can not maintain an action against the principal if the authority has been exceeded, (r.) 1286. Pro7nissory notes by triLstccs, agents, &c. — If a party signs a promissory note whereby he prom- ises in his own name to pay a sum of money on behalf of a third party, he will himself be personally responsi- ble for the payment of the money, {s) unless it plainlv appears from the surrounding circumstances that he co)itracted as agent, and bound his principal b}^ the contract. (/) Parties who promise in their own names to pay money can not exonerate themselves from per- (6) Leadbitter v. Farrow, ante. {s) Healey v. Story, 3 Exch. 3 ; 18 (p) Mare v. Charles, 5 Ell. & Bl. L. J., Ex. 8. Dutton v. Marsh, L. R., .q8r ; 25 L. J., Q. B. 119. Nichols v. 6 Q. B. 361 ; 40 L. J , Q. B. 175. Diamond, 9 Exch. 157. Ante. Ante. (q) Owen v. Van Ulster, 10 C. B. (/) Agg v. Nicholson, i H. & N. 31S. 165 ; 25 L. J., Ex. 348. Lindus v. (r) Stagg V. Elliott, 12 C. B., N. S., Melrose, 3 H. & N. 137; 27 L.J.,Ex. 373; 31 1.. J., C. P. 260. Eyre v. 327. McDowell, 14 Ir. C. L. R. 314. Sec. I.] BILLS, NOTES, AND CHECKS. 353 sonal liability by describing themselves as " trustees," " treasurers," or " secretaries " of a named charity, com- pany, or association, (ti.) or as " executors." (x) But, if the promise is, on the face of the note, expressed to be made by a principal, and the party whose signature is attached to it signs the name of the principal to the instrument, adding his own name onl}^ as agent, he will, as we have seen, incur no personal liability upon the note, provided he was duly authorized to act in the matter, (jk) 1287. Bills of exchange and promissory notes by partners. — A partner in a mercantile or trading firm may draw, accept, or indorse bills of exchange and promissory notes in the trading name of the firm so as to bind the partnership, because the drawing, ac- cepting, and negotiating bills and notes are usual and necessary for the purpose of carrying on the trade and business of a mercantile firm. But it is not every partnership which gives such an authority. Solicitors and professional men in partnership have no such power ; nor have brokers who are in partnership for the mere purpose of obtaining orders on commission and dividing the expenses. {2) Every one of the partners in a mercantile firm is liable upon such bills or notes, whether his individual name is or is not used in the collective name of the firm, and whether it does or does not appear upon the face of the instrument, and whether such partner is dormant and secret, or a known and active member of the co-partnership, and whether the proceeds of such bill or note are dedica- ted and applied to partnership purposes, or to the pri- (ti) Price V. Taylor, 5 H. & N. 540. 469. Alexander v. Sizer, L. R., 4 Ex. Bottomley v. Fisher, i H. & C. 211 ; 102 ; 38 L. J., Ex. 59, 31 L. J., Ex. 417. (z) Yates v. Daltoii, 28 L. J., Ex. (x) Childs V. Monins, 5 Moo. 282. 69. Forster v. Macreth, L. R., 2 Ex. {y) Buckley, Ex parte, 14 M. & W. 162. III.— 23 354 I-AJV OF CONTRACT. [Bk. II. Ch. VI. vate use of the individual partner, {a) Where one of the acting partners of a firm accepted a bill in the name of the firm to obtain a loan, and then applied the money to his own private use, it was held that a secret partner, not known at the time of the accept- ance to be a partner in the firm, might be sued upon the bill. {F) And, where a bill was indorsed by n partner in the trading name of the firm, it was held that a person not known to be a partner at the time of the indorsement might be sued upon the instru- ment, ((t) " There may be partnerships," observes Lord Ellenborough, "where none of the existing partners have their names in the firm. Third persons may not know who they are ; and yet they are all bound by the acts of any partners in the name of the firm or partnership." {d) But, if .the taker or holder thereof knew at the time he received the bill or note that the transaction was not a partnership transaction, but the private affair and dealing of the single partner, the other members of the firm will not be liable there- on. The bill or note must, in order to bind the part- nership, be made, accepted, or indorsed in the trail- ing name of the firm, or in some adopted name, recog- nized and used by the partnership in its ordinar)- course of business; or, if made, accepted, or indorsed by the one partner in his own name, the drawing, ac- ceptance, or indorsement must be expressed to be made by him for, and as the act of, the firm at large. ie) Where a member of a firm has no authority to {a) Lloyd V. Ashby, 2 B. & Ad. 23. [d) Swan v. Steele, 7 East, 21:,. Brown v. Kidger, 3 H. & N. 858. Thicknesse v. Bromilow, 2 Cr. & J. (/') Wintle V. Crowther, i Cr. & J. 425. 316. (<•) Smith V. Jai-ves, 2 Raym. 14SJ. (') Thomp-on v. Wr.ileyaii, &c., 8 601 ; 28 L J., C. P. 170. C. B. 861. Land Credit Company of (ti) ATaki i\, B., Forbes v. Marshall, Ireland, /« iv, I>. R., 4 Ch. 460 ; 40 L. II Exch. 179. J., Ch., 341. (v) Penkivil v.Connell, 5 Exch.381. (:) Allen \. Sea, &c., Co., g C. B. Healey v. Siorey, 3 lb. 3. Dutton v. 57S ; ig L. J., C. P. 305. Sec. II.J BILLS, NOTES, AND CHECKS. 359 bill of exchange drawn by a joint-stock company, lim- iting the liability thereunder, is repugnant and void. («) Where a company is being voluntarily wound up, and there are four liquidators, one of them can not, in the absence of any authority from the company, and solely upon the strength of a resolution of his co- liquidators, accept bills on behalf of the company, {b) SECTION II. BILLS OF LADING AND DOCK WARRANTS. 1290. Bills of lading. — We have already consid- ered the nature and effect of a bill of lading as be- tween the carrier by whom it is issued and the person in whose favor it is made; and therefore we shall only discuss here the quality of negotiability which has been attached to bills of lading or enlarged by recent legis- lation. 1 29 1. Assignment of bills of lading — Bills of lading, made out to the order of the shipper or consignee, are negotiable and transferable by indorsement and delivery, so as, in the absence of notice of fraud, or in- solvency, or want of title on the part of the indorser, {c) to vest the right of property and ownership of the niL-rchandise comprised therein in a bona fide indorsee or holder for value, and defeat the right of the unpaid («) Slate Fire Ins. Co., In re. Ex nean Bank, In re. Ex parte Agra & parte Meredith, 32 L. J., Ch. 300. Masterman's Bank, L. R., 6 Cli. 206. {b) London and Mediterranean (c) The Argentina, L, R., i A. & E. Bank, In re, L. R., 5 Ch. 567 ; 40 L. 370- The llarie Joseph, L. R„ I P. J., Ch. 26. Ex pai-te Birmingham C. 219. Rodger v. Comptoir, d'Es- Banking Co., L. R., 3 Ch. 651 ; 36 L. compte de Paris, L. R., 2 P. C. 393 ; J., Ch. 807. London and Mediierra- 40 L. J., P. C. I. Gilbert v. Guignon, L. R., 8 Ch. 16. i 360 LAW OF CONTRACT. [Bic. II. Ch. VI. vendor to stop them in transitu. (^0 The contract evidenced by the bill of lading is now also transferred by the indorsement and delivery of the instrument to the indorsee, so as to enable the latter to maintain an action or be sued upon it. (c) A bill of lading re- mains in force until there has been a complete de- livery of the goods thereunder to a person having a right to receive them, and is not spent or exhausted by the landing and warehousing of them, at a suf- ferance wharf, at all events as long as they are under stop for freight ; and the person who first gets the bill of lading (though only one of a set of three), gets the property which it represents, and need not do any act to assert his title, which the transfer of the bill of lading of itself renders complete, so that any subsequent dealings with the others of the set are subordinate to the rights passed by that one. Therefore, where A, the indorsee of a bill of lading drawn in a set of three, making cotton deliver- able on payment of freight, having got the cotton landed at a sufferance wharf, with a stop thereon for freight, procured an advance from M on the deposit of two copies of the bill of lading, and subsequently, the stop for freight having been removed, obtained a second advance from B on the deposit of the third copy, and B afterwards hearing of the prior advance, sent his copy of the bill of lading to the wharf, and procured the cotton to be transferred into his own name, and afterwards sold it and received the proceeds. (sliftm, I («) Bkst, C. J., 12 Moore, 36S. Saund. 153. Ve^ey v. Alantell, g M. Fox V. Frith, 10 M. & W. 131. SifT- cS: W. 325. Saunders v. Johnson, kin V. Walker, 2 Campb. 307. Skin. 401. Spencer v. Diirant, Comb. 115- Sec. I.] CONTRACTS OF PARTNERSHIP. 373 like manner with all the rest, excluding himself, he being in contemplation of law several from them all in respect of his particular share of the joint contri- bution, and they all joint against him. (/) If several of the partners signed an agreement, constituting one of their number a trustee for the whole body, and authorizing him to sue for and receive their several contributions to the joint stock, each of the partners signing the agreement was liable to an action at the suit of the partner so appointed for not paying up his share of the contribution, (q) If two persons agreed to divide the profits of a joint adventure, and to bear equally the expenses of setting the scheme afloat, and one of them paid the whole expense, he might sue the other for a moiety of the charges he had incurred, (r) Where an author and a publisher undertook the publication and sale of a work for their joint benefit, the author agreeing to supply a certain quantity of manuscript, and the publisher agreeing to print and publish the work at his own expense, and to divide the profits with the author, and the latter, after a por- tion of the work had been printed, refused to complete it, the publisher might have maintained an action against him for the damage he sustained by reason of the non-performance of the contract, (s) ^ 1304. Distribution of the profits of co-partner- ship. — If a partner, having the general conduct and management of a partnership business, had covenanted in his own name with another partner to render (/) Veniiig V. Leckie, 13 East, 123. Radenhurit v. Bates, 11 Mooie, 7. 429. {q) Brown v. Tapscott, 6 M. & W. (r) French v. Styring, ante. (j) Gale V. Leckie, 2 Stark. 107. ' See Morgan's Law of Literature, vol. ii. 421. 374 LAW OF CONTRACT. [Bk. II. Ch. VI. accounts, and divide profits in hand, an action was maintainable against him by the covenantee for not accounting ; (^) but there was no remedy against him at common law for not dividing the profits, so long as the partnership continued, and the trading transactions of the firm had not been brought to a close. If the partners resorted to the Court of Chancery for an account, they must by their bill have prayed for a dis- solution. (?/) In the absence of any evidence, the pre- sumption is that partners are equally entitled to the profits and equally liable to bear the losses of the business, (x) 1305. Action by one partner against another for a balance found to be due on a settleme^it of accounts. — When the partnership was at an end, and all its trading transactions had been brought to a close, and an ascertained balance of profit remained in the hands of one of the late partners upon a general settlement of the accounts, an action was maintainable for the re- covery of such balance, (^y) 1306. Action for a share of the profits of a par- ticular joint adventure — Where partners had merely agreed to divide the profits of one joint adventure, and all outstanding debts and liabilities in respect thereof had been satisfied and discharged, one of the partners might have brought an action for his share of an ascertained balance which had been received by another, {s) But, if it appeared that the parties were (f) Owston V. Ogle, 13 East, 541. Rackstraw v. Imbcr, Holt, N. P. C. (//) Loscombe v. Russell, 4 Sim. 10. 370. Wray v. llilestone, 5 M. & W. ]:y the Roman law an action by one 21. Jackson v. Stopherd, 2 Cr. & \l. partner against the olhers for an ac- 361. IJricrly v. Cripps, 7 C. & Y . yog. connt operated as a dissolution of Winter v. White, 3 Moore, 674. Ilen- the co-partnership. Dig. lib. 17, tit. ley v. Soper, SB. & C. 16. 2, lex 65. , [z] WiKon v. Cutting, 4 M. & So. (jt) Collins V, Jackson, 31 Beav. 645. 268. Goodyear v. Simpson, 15 M. & ()') Foster v. Allaiison, 2 T. K. 479. W. 16 ; 15 L. J., E.x. iqi. Sec. I.] CONTRACTS OF PARTNERSHIP. 375 continuing partners in trade, so that the profit upon one transaction might be absorbed by the losses upon other subsequent transactions, no action was maintain- able for the balance of profit appearing upon any one particular statement of accounts respecting bygone transactions completed and done with, (a) 1 307. Contribution between partners to the co'>n- mon loss. — The courts of common law professed to be utterly unable to investigate partnership accounts; and, therefore, whenever the right of contribution between partners depended upon the state of partner- ship accounts and dealings and the existence of a bal- ance in hand, the claimant must have resorted to a court of equity for relief, {b) But, when the partnership was at an end, and the trading operations had been wound up and completed, a right to contribution as between those who have been lately partners existed. Thus, where a partnership business was brought to a close, and the accounts made out, and shown to the defendant, one of the partners, who promised to pay to the plaintiff his proportion of the loss, but failed so to do, it was held that the latter was entitled to recover it in an action on an account stated, {c) And,ifthepart- nership had been confined to a particular transaction and joint speculation, which had proved to have been a losing adventure, and one partner had been com- pelled to pay the whole loss, or more tlian his proper proportion of it, such partner might, if the joint undertaking had been brought to a close, and there were no open and unsettled accounts respecting the matter, and nothing more to be received in respect thereof, have maintained an action against his late co-partner (a) Fromont v. Coupland, g Moore, 504. Sadler v. Nixon, 5 B. & Ad. 936. 323. Carr v. Smith, 5 Q. B. 128-138. J)ig. lib. 17, tit. 2, lex 57. Ante. {c) Brown v. Tapscott, 6 M. & W. ib) Pearson v. Skelton, i M. & W. 123. 376 LAW OF CONTRACT. [Bk. II. Ch. VII. in the business for his share of the contribution to- wards the common loss, (d) 1308. Particular transactions not connected zoitk the general account of profit and loss. — General part- ners in trade were not precluded, as we have seen, from suing each other upon special contracts entered into with each other individually on their own private account, although such contracts might have been m^de concerning the partnership business, and were intended to promote the general prosperity of the co-partnership, {e) If one partner, for example, lent money to another to be employed in the business, or pledged his own private credit to enable his co-partner to obtain money or goods for the purpose of making up his proportion of the con- tribution to the general stock, the partner who had so lent his money, or pledged his credit, had the same remedy against the co-partner in whose favor he had acted as any third party would have had. (/") So, if one partner received money which properly belonged to his co-partner, and not to the partnership, and appropriated it by mistake to the use of the firm, he was responsible to the partner whose separate money it was, for the repayment to him of the amount, i^g) And, if one partner borrowed money from the firm, and by his promissory note promised one of the part- ners individually to repay the amount, he was liable upon the note, although the money, when recovered by the holder of the note, would be the money of the firm. {]{) (d) Burnell v. Minot, 4 Moore, Ayr. 4S. Helme v. Smith, 5 M, & P. 342. Holmes v. Williamson, 6 M. & 744 ; 7 Bing. 714. Hesketh v. S. 158. Blanchard, 4 East, 144. {e) Coffee v. Brian, 10 Moore, 345. (^) Smith v. Barrow, 2 T. R. 476. (/) Elgie V. Webster, 5 M. & W. (h) Lomas v. Bradshaw, ig L. J., 518. Ex parte Notley, i Mon. & C. P. 273. Sec. I.] CONTRACTS OF PARTNERSHIP. m 1309. Purchases by one partner on behalf of tlic Jinn. ■ — Where four partners carrying on the business of sugar-refining intrusted to one of them (who was a wholesale grocer) the duty of buying sugars on behalf of the firm, and the partner so employed sold to the firm his own sugars, making a profit to himself on his dealings and transactions, without the knowledge of his co-partners, it was held that the firm was entitled to the whole of this profit, (z) 13 10. Fraudulent use of the co-partnership name. — If one partner has cheated his fellow-partners through the intervention of a promissory note, given by him in the name of the firm, the fellow-partners are entitled to recover against him the sum paid in satis- faction of the apparent debt of their own on the note created by his fraud on the partnership. (/&) 131 1. Contracts of partnership induced by fraud. — If a person has been induced by fraudulent repre- sentation by one or more of several partners to become a member of the firm, he is entitled to relief, and to have the contract set aside. (/) 1312. Of dissolution of partnership. — If no time has been limited for the dissolution of a general trad- ing partnership, it is a partnership at will, and may be dissolved at the pleasure of any one or more of the partners, {m) If the co-partnership has been con- tracted by parol, it may be renounced by parol ; but if it has been established by deed, the renunciation and disclaimer of it by the party who withdraws from the firm ought to be made by deed, {n) If the part- {i) Bentley v. Craven, 18 Beav. J., Ch. 95. 75. ^vi) Pearce v. Lindsay, 3 De G. J. & (i) Cross V. Cheshire, 7 Exch. 46 ; S. 139. Shepherd v. Allen, 33 Beav. 21 L. J., Ex. 3. 577- (Z) Rawlins v. Wickham, 3 De G. («) Peacock v. Peacock, 16 Ves. - & J. 304. Jauncey v Knowles, 29 L. 49. 373 LAIF OF CONTRACT. [Bk. II. Ch. VII. ners have agreed that the partnership shall continue for a definite period, it can only be dissolved before the expiration of the term limited by the mutual con- sent of all the parties, or by the bankruptcy, outlawry, embezzlement, felony, or death of any one or more of them, or by the decree of the court, (o) Where a partnership originally carried on under articles for a fixed term of years is continued after the expiration of the term without new articles being entered into, it becomes a partnership at will ; and such only of the articles as are applicable to a partnership at will remain in force, (p) Temporary illness or incapacity to transact business will not warrant an application to the court for the dissolution of such a partnership ; but, if the illness or incapacity is long continued, or recovery appears to be hopeless, a dissolution will be decreed. (^) Actual insanity of one partner is not in itself a dissolution of the partnership ; but it is a good ground for a decree of dissolution, (r) The partner- ship is dissolved b}^ the death or insolvency of one of the partners, or by an act of bankruptcy followed up by adjudication, and also by assignment by any part- ner of his share and interest in the business. And a dissolution by one partner is a dissolution as to all ; so that the aflfairs of the old concern must be wound up from the day of the retirement, (s) If the deed of co-partnership contains a power of expul- sion of any one or more of the partners upon cer- tain contingencies, the power must be exercised with (()) Smilh V. ^lules, g Hare, 556. 174. Whitwell ^. Arthur, 35 Bcav. Ei,sc-ll V. liayward, 29 L. J., Ch. Soy ; 140. 30 Ijeav. 15S. Harrison v. Tennant, (r) Anon., 2 K. & J 441. Row- si lieav. 482. lands v. Evans, 30 Beav. 302 ; 31 L. { p) Clark V. Leach, 32 Beav. 14; J., Ch. 265. 32 I.. J., Ch. 2go. (s) Collier on Partnership, 68-75, (./) Leaf V. Coles, i De G. M. & G. 154. Sec. I.J COXTRACTS OF PARTNERSHIP. 379 the most perfect good faith and fairness, and in strict conformity with the stipulations and provisions of the deed, every opportunity being given to the expelled partner to bring to the knowledge of his co-partners all the facts and circumstances necessary to enable them to make a just exercise of their power, (t^) A dissolution which is fraudulent as against the joint creditors may be avoided, (u) When a partnership is determined prematurely, if the incoming partner has paid a premium, he is entitled to have a proportionate part of the premium returned, except, first, where there has been an actual or implied release or waiver of the right to it ; or secondly, where there has been an actual or implied release of the right to be a part- ner, including such a deliberate and serious breach of the partnership contract as may be considered equiva- lent to a repudiation of it altogether, (^x) Where, therefore, the partner who has received the premium afterwards commits a breach of the partnership articles and dissolves the partnership, the court will not allow him to take advantage of his own wrong, but will decree a restitution of a portion of the premium paid ; but, if the partner who has paid the premium commits a breach and dissolves the parnership, the court will not allow him to found a claim to the restitution of the premium upon his own wrongful act. (_y) On a bill to dissolve a partnership, and take the usual part- nership accounts, although the partnership had been discontinued more than six years before the filing of the bill, the court directed the accounts to be taken, notwithstanding that the defendant insisted on the Statute of Limitations as a bar. {z) {() Blisset V. Daniel, lo Flare, 493. Eq. 606 ; 42 L. J., Ch. 668. (u) Ex parte Mayou, 34 L. J., Bank. (/) Atwood v. Maude, L. R., 3 Ch. 25. 369. (x) Wilson V. Johnstone, 'L. R., 16 (;) iMiller v. Miller, L. R., 8 Eq. 499. 38o LAW OF CONTRACT. [Bk. II. Ci-I. VII. 13 13. Distribution of the partnership property and effects. — If a house in which the partnership trade is carried on belongs to one of the co-partners, the right to the occupation of the premises by the other partners ceases as soon as the firm is dissolved, unless the house has been demised to the firm collectively. {a) Upon the dissolution of a mercantile partnership by death of one of the partners, the property and effects of the co-partnership do not belong exclusively to the survivors, but to the survivors and the representatives of the deceased partner, and are distributable between them in the same manner as they would have been by dissolution of the partnership inter vivos. The sur- viving partners have no jus disponendi of the p:irtner- ship property and effects, as against the pcrM^nal repre- sentatives of the deceased, except for the jiiii'jiSi- of paying debts due from themselves and the dccci ^dat the time of the death of the latter. They can not mortgage the share of the deceased together with their own shares of the partnership property to enable them to pay debts and continue the trade ; ((5) but they may become purchasers of the share of the deceased part- ner from his personal representatives, {c) If partners have purchased land merely for the purpose of carrying on their trade, and have paid for the land out of the partnership funds, the transaction makes the land part- nership property, and the court will deal with it as personalty, and the share of a deceased partner therein will pass to his personal representatives, {d^ But, where the land, and not the trade, is the principal object, and the trade is merely ancillary to the benefi- (a) Benham V. Gray, 5 C. B. 141. (c) Chambers v. Howell, II Beav. ((5) Buckley v. Barber, 6 Exch. 180 ; 6. 20 L. J., Ex. 117. {d) Darby v. Darby, 3 Drew, 495 ; 25 L. J., Ch. 371. Sec. II.] JOINT STOCK COMPANIES. 381 ficial eiijoymiiit of the land, this doctrine will not ap- ply, {e) Pcirtnei'ship stock includes the good-will of the business and the I'ight to use the trade-mark ; and, on the purchase of a surviving partner from the executors of a deceased partner of the partnership stock at a val- uation, the value of the good-will and of the trade- mark must be taken into account. (/") In taking the accounts of a partnership, interest after the dissolution will not in general be allowed to the partners on their respective capitals, though interest during the partner- ship with .annual rests is allowed, (^g) Nor in the absence of special agreement will interest be allowed on the profits left by a partner in the business. (//) 1314. Use of the najne of the firm after dissolu- tion. — After a partnership has been dissolved, each partner is entitled, in the absence of express agree- ment, to carry on business in the name of the old firm, (z) SECTION II. OF JOINT STOCK COMPANIES. 13 1 5. Joint stock companies. — The rights inter se of the members of a joint-stock company are regulated by the joint-stock companies' Acts and by the memo- randum and articles of association.' Where these are silent the ordinary law of partnership applies. W Stewart v. Blakeway, L. R., 6 R., 8 Ch. i ; 42 L. J., Ch. lyg. Eq. 479 ; Tb. 4, Ch. 603. (h) Dinham v. Bradford, L. R., 5 (/) Hall V. Burrows, 33 L. J., Ch. Ch. 519. 204, (0 Banks v. Gibson 34 L. J., Ch. {g) Barfield v. Loughborough, L. 5gi ; 34 Beav. 566. ' Section 10, article i, of the Constitution of the United States provides that "no state shall . . . pass . . any law impairing the obligation of contracts. This clause, whicli 382 LAW OF CONTRACT. [Bk.U.Ch.YU. 1316. General duties of director's. — There is, by law, without any special provision for the purpose, an implied and inherent term of the engagement or rela- became obligatory upon the states (but not upon the general government; Evans v. Evans, Pet. C. C. 322), and applicable to all laws passed, or to be passed, by them after the first Wed- nesday in March, 17S9 (Owings v. Speed, 5 Wheat. 420), is mainly vital in reference to grants, franchises, and charters bestowed by the states upon corporations of their own crea- tion, especially as to the question whether, once having bestowed them, the states m their control over the corpora- tions thus created can impair or in any way tamper with them. A grant to a corporation is now imderstood to be a contract within this section; and said Marshal, J. : " The provision of the constitution never has been understood to embrace other contracts than those which respect property, or some object of value, and confer rights which may be asserted in a court of justice." (Dartmouth College v. Woodward, 4 Wheat. 518). "Therefore, the grant of lands by the legislature of a state, constitutionally empowered to make it, can not be revoked by its successor." (Fletcher v. Peck, 6 Cranch, 87, 136.) "A con- tract 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 contract executed is one in whicli the object of the contract is performed ; and this, says Black- stone, differs in nothing from a grant. The contract between Georgia and the purchasers was executed b}- 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 re-assert that right. A party ii, therefore, always estopped by his own grant. Since, then, in tact, a grant is a contract executed, 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 con- strued to comprehend the latter as well as the former. A law annulling conveyances between itidividuals, and declaring that the grantors should stand seized of their former estates, notwithstanding those grants, would be as repugnant to the constitution as a law discharging the vendors of propert^• Sec. II.] JOINT STOCK COMPANIES. 383 tionship subsisting between directors and shareholders, that directors shall use their best exertions in all mat- ters relating to the affairs of the company, that they from the obligation of executing tlieir contracts by convey- ances. It would be strange if a contract to convey was secured by the constitution, while an absolnte conveyance remained unprotected. If, under a fair construction of the con- stitution, grants are comprehended under the term contracts, is a grant from the state excluded from the operation of this provision.? Is the clause to be considered as inhibiting the state from impairing the obligation of contracts between two individuals, but as excluding from that inhibition contracts made with itself? The words themselves contain no such dis- tinction. They are general, and are applicable to contracts of every description. If contracts made with 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 sovereignties, it is not to be disguised that the framers of the constitution viewed, with some appre- hension, the violent acts which might grow out of the feelings of the moment; and that the people of the United States, in adopting that instrument, have manifested a determination to shield themselves and their property 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." Dartmouth College v. Wood- ward, 4 Wheat. 656; and see Rehoboth v. Hunt, i Pick. 224; Lowry v. Francis, 2 Yerg. 534; Butler v. Chariton County Court, 13 Mo. 112. A state can not revoke a grant made to a corporation. Terrett v. Taylor, 9 Cranch, 43 ; Wilkinson v. Leland, 2 Pet. 657 ; see Den d. University of North Carolina V. Foy, n Murph. 58; Winter v. Jones, 10 Ga. igo; Planters' Bank v. Sharp, 6 How. 301, 327. The charter of a railway company is a contract between the people of the state grant- ing it, and the company, and comes within the clause of the constitution of the United States, which declares that no state may pass a law impairing the obligation of contracts. Any act of a legislature which impairs, by restricting or abridging, any powers granted thereby, a charter once granted, impairs the obligation of a contract, and is unconstitutional. The 384 lAlV OF CONTRACT. [Bk. II. Cii. VII. shall not make any profit to themselves out of their trust or employment, and that they shall not acquire to themselves whilst they remain directors, any inter- power of a railway company to charge for the moving of pas- sengers and freight over its lines is presumed to be the con- sideration for which the incorporators of a railway accept its charter from the state, build its roadway and invest capital in its furniture and equipment. Such power is essential to their enjoyment of the franchise, and the power to adjust their tariff' of charges without legislative control, being a part of their franchise. Any attempt of the legislature to interfere with this right is unconstitutional and void. The legislature of a state may at all times regulate the exercise of a franchise by general laws, passed for all legitimate ends contemplated by the general power of the state, but it can not, under color of such laws, impair or destroy the obligation of a contract. Clark V. Philadelphia, &c,, R. R. Co. The leading case under this clause was the celebrated Dart- mouth College case above referred to, argued for the college in the superior court of the United States by Daniel Webster. Dartmouth College was chartered by the British Crown before the Revolution, and upon an attempt to interfere with its fran- chise by the state government, the defendant insisted that except in so far as affected by the legislation of parliament of the colonies, before the adoption of the constitution such a charter was a contract within the clause, and that civil rights were not destroyed by the Revolution. The court sustained this view, and held substantially that an eleemosynary corpor- ation, founded by private contributions for the distribution of a general charity, is not an instrument of governinent, whose officers are public officers, but a private corporation, whose charter is a contract between the donors and its trustees and the government itself, the consideration for which is the public benefit to be derived from the corporation, and that this con- tract is one which can not be altered, amended, or modified by the state without the consent of the corporation. This case has been followed and universally recognized as authority since its decision. See Dawson v. Godfrey, 4 Cranch, 3:3; Society, &c. v. New Haven, 8 Wheat. 464 ; Trustees of- Vincennes University v. Indiana, 14 How. 268; Nor- ris v. The Trustees of Abingdon Academy, 7 Gill & J. 7; Grammar School v. Burt, 11 Vt. 632; Brown v. Hummel, 6 Barr. 85 ; Terrett v. Taylor, 9 Cranch, 43 ; State Sec. II.] JOINT STOCK COMPANIES. 385 •est adverse to their duty, {k) But their duty as directors may be controlled and qualified by the rules and objects of the society, and the nature and extent (k) Benson v. Hteathorn, I Y. & C. Beav. 360. Gt. Luxembourg Rail, Ch. C. 341. Gabkell v. Chambers, 26 Co. v. Magnay, 25 lb. 586. V. Hayward, 3 Rich. 389. In Toledo Bank. v. Bond, i Ohio St. '669, the court maintained that the supreme court in the Dart- mouth College case did not hold that all franchises and char- ters granted by governments were contracts, but that under the peculiar circumstances of the case a contract had been created, with which the state attempted to interfere, but this view does not seem to have prevailed further. In Washington Bridge Co. V. State, 18 Conn. 53, it was held that no conditions or reservations other than what are expressed in the charter of an incorporation can be forced upon it by the legislature against its will. The franchise must be, indeed, construed strictly as against the grantor, but not to any prospective benefits which may possibly accrue from the grant. For instance, it has been held that nothing passes by implication, and that where a state legislature granted a charter to a company for the building of a bridge over a river, and taking tolls of persons passing over it, for the term of forty years, extended by a subsequent act to seventy years, and some thirty-three years before the expira- tion of the charter, authorized the erection of another bridge, a few rods from the former, which was to become free in six years, thereby reducing the tolls of the first bridge to a very small amount, the grant of franchises by the public, in matters where the public interests are concerned, as exemption from taxation and the right of the state to open new roads and con- struct new bridges, are to be construed strictly, and that no rights are taken from the public, or given to the corporation, beyond those which the words of the charter, by their natural and proper construction, convey; and that as the charter, in its terms, granted no exclusive rights above and below the bridge, and contained no stipulation, on the part of the state, not to authorize another bridge above or below it, no such exclu- sive right of the plaintiff company could be implied. Charles River Bridge v. Warren Bridge, 11 Pet. 420. This doctrine is followed in Mohawk Bridge v. Utica, &c., R. R. Co , 6 Paige, 554; Oswego Falls Bridge v. Fish, i Barb. Ch. 547; Thompson v. N. Y., &c., R. R. Co., 3 Sandf. Ch. 625 ; Washing- tcm, &c.. Turnpike Co. v. Baltimore & Ohio R. R. Co., 10 Gill- in. — 25 3S6 LAW OF CONTRACT. [Bk. II. Ch. VII. of the authority delegated to them by their share- holders. ( /) 13 1 7. Liabilities of directors. — If the directors (T) Bluck V. Mallalue, 27 Beav. 404. & J. 392; Harrison v. Young, 9 Ga. 359; McLeod v. Bur- roughs, Id. 213 ; Shorter \-. Smith, Id. 517 ; Enfield Toll Bridge Co. V. Hartford & N. H. R. R. Co., 17 Conn. 40, 454; Miners' Bank v. United States, i Greene (Iowa) 553; Piscataqua Bridge v. New Hampshire Bridge, 7 N. FI. 35 ; West River Bridge v. Dix, 6 How. 532, 16 Vt. 446 ; White River Turnpike Co. V. Vermont, Sfc, R. R. Co., 21 Vt. 590; Tuckahoe R. R. Co. V. Tuckahoe R. R. Co., 11 Leigh, 42. This is what con- stitutes the law of eminent domain. Beekman v. Saratoga, &c,, R. R. Co., 3 Paige, 72; West River Bridge Co. v. Dix, (> Howe, 532; Enfield Toll Bridge Co. v. Hartford, &c., R. R. Co., 17 Conn. 61. And the franchise of a corporation ma^• be taken by the state for public uses, or such power delegated by the state to another corporation, on providing compensation. Boston Water Power Co. v. Boston, &c., R. R. Cu., 23 Pick. 360; Armington v. Barnet, 15 Vt. 745 ; White River Turnpike Co. V. Vt. Central R. R. Co., 21 Id. 590 ; Barber v. Andover, 8 N. H. 398; Pierce v. Somersworth, 10 Id. 369; Backus \. Lebanon, 1 1 Id. 19 ; Rogers v. Bradshaw, 20 Johns. 725 ; Beelt- man v. Saratoga & Schenectady R. R. Co., 3 Paige, 45 ; Lex- ington and Ohio R. R. Co. v. Applegate, 8 Dana, 2S9 ; Boston Water Power Co. v. Boston and "Worcester R, R. Co., 23 Pick. 360; West River Bridge Co. v. Dix, 6 How. 507; Shorter v. Smitli, 9 Ga. 529; Piscataqua Bridge v. N. H. Bridge, 7 N. II. 35 ; Enfield Toll Bridge Co. v. Hartford, &c., R.'r. Co., 17 Conn. 41, 454; Richmond, &c., R. R. Co. v. Louisa R, R. Co., 13 How. 71 ; Xortliern R. R. v. Concord, &c., R. R. Co., 7 Fost. 183. A state of which a railroad company was a crea- tion, had in its constitution a provision to the effect that every stockholder in a corporation should be " individual])- liable for its debts over and above the stock owned by him " in a sum at least equal in amount to such stock. The railroad company having become indebted, was authorized to obtain subscriptions for additional stock. After such authorization, but before proceeding to obtain the subscriptions, the constitu- tion ot the state was amended so as to declare that "in no ca.^e shall any stockholder be individually liable in any amounL over or above the amount of stock owned by him." Held, that Sec. II.] JOINT STOCK COMPANIES. 387 exceed their powers, or appropriate the funds of the company in a way not authorized by the articles of association or the deed of settlement, they are bound such amended constitution is not a law impairing the obliga- tion of a contract, and that neither the law nor his contract makes the defendant liable for the debts of the company beyond the amount of its stock, Ochiltree v. R. R. Co., 7 Am. Railway I^^P- 525- Political powers conferred by a state upon a collection of individuals forming a municipal corporation, may be revoked. People V, Morris, 13 Wend. 325; Miers v. Williams, 11 Ired. 558 ; Trustees v. Tatman, 13 111. 27 ; Marietta v. Fearing, 4 Ohio St. 427 ; Terrett v. Taylor, 9 Cranch, 43 ; Bush v. Ship- man, 4 Scam. 186 ; Bradford v. Gary, 5 Greenl. 339. And pub- lic property rights and duties may be regulated by a state without its coming within the provisions of the section. That the framers of the constitution did not intend to re- strain the states in the regulation of their civil institutions adopted for internal government, and that the instrument they have given us is not to be so construed, may be admitted. Dartmouth College v. Woodward, 4 Wheat. 518; and see Toledo Bank v. Bond, i Ohio St. 657; Kroup v. Piqua Bank, Id. 603. But private property or franchises, once granted to a municipal corporation, can not be divested. Hayen v. Union Bank of Tennessee, i Sneed. 115; Terrett v. Taylor, 9 Cranch, 43 ; Bailey v. Mayor, &c., 3 Hill 531 ; Town of Pawlett v. Clark, 9 Cranch, 292 ; Dartmouth College case, cited a?ite. Although the state may from time to time provide laws to secure due and proper exercise of the franchise, and to pre- vent its abuse, as, for instance, where a municipal corporation has been endowed with a franchise to maintain ferries, such franchises are in the nature of private property, and if operated and used by the corporation they can not be resumed by the state; but the state is not excluded from legislation touching them, so far as they are publici juris, and it may pass laws to secure the safety of passengers and protect them from imposition, and otherwise to regulate the due and lawful exercise and enjoyment of the franchise. Benson v. Mayor, &c., of New York, 10 Barb. 223 ; but see East Hartford v. Hartford Bridge Co., 10 How. 511; 17 Conn. 79. Anything in the shape of property which the state, by its grant or sanc- tion has alienated from itself and given to individuals, it seems. — it can not divest them of; but the salary and tenure of a public office is not property, and a state may alter or annul 3^8 LAW OF CONTRACT. [Bk. II. Ch. VII. to make good out of their own pockets the full amount of money misappropriated or of loss caused by their negligence, (w) {?n) Grimes v. Harrison, 28 L. J., Brown, L. R., 8 Eq. 396. Land Ch. 827. Turquand v. Marshall, L. Credit Co. of Ireland v. Lord Fennoy, R., 6 Eq. 112 ; 4 Ch. 376 ; 38 L. J., L. R., 5 Ch. 763 ; 39 L. J., Ch. 477. Ch. 639. Joint Stock Discount Co. v. them at its pleasure. See Knoup v. Piqua Bank, i Ohio St. 616 ; Commonwealth v. Bacon, 6 D. & R. 322 ; Warner v. The People, 2 Denio, 272; Conner v. The City of New York, 2 Sandf. 355, i Sel. 285; Toledo Bank v. Bond, Id. 656; Com- monwealth V. ^lann, 5 Watts & S. 418; Barker v. Pittsburg, 4 Barr. 51 ; West River Bridge Co. v. Dix, 6 How. 548. A state legislature passed a law providing that canal com- missioners should be appointed annually by the governor, their term of office to commence on the first of February in every year, and their pay to be four dollars per diem. Seven years after the law was passed, certain persons being then in ofiSce as such canal commissioners, the legislature passed another law, providing, amongst other things, that the per diem should be onlv three dollars, the reduction to take effect upon the passage of the law; the law further provided that in the following October, these commissioners should be elected by the people instead of being appointed by the governor. Upon the commissioners resisting the effect of the new law, and claiming their per diem allowance for the entire year, upon the ground that the state had no right to pass a law impairing the obligation of a contract, the court held that there was no contract between the state and the commissioners within the meaning of the constitution of the United States. "The contracts,'' said the court, "designed to be protected bv the loth section of the first article of that instrument, are con- tracts by which perfect rights, certain, definite, fixed, private rights of property are vested. These are clearly distinguish- able from measures or engagements adopted or undertaken bv the body politic or state government, for the benefit of all, and from the necessity of the case, and according to universal understanding, to be varied or discontinued as the public good shall require. The selection of officers, wIkj are nothing more than agents for the effectuating of such public purposes, is matter of public convenience or necessity, and so, too, are the periods for the appointment of such agents; but neither the one nor the other of these arrangements can constitute any Sec. II.] JOINT STOCK COMPANIES. 389 13 1 8. Of the amalgainatio7t of companies. — A contract for the amalgamation of two joint-stock com- panies is ultra vires and void, unless the deeds of ^et- obligation to continue such agents, or to re-appoint them, after the measures which brought them into being shall have been found useless, shall have been fulfilled, or shall have been abrogated as even detrimental to the well-being of the public. The promised compensation for services actually performed and accepted, during the continuance of the particular agency, may undoubtedly be claimed, both upon principles of compact and of equity-; but to insist beyond this on the per- petuation of a public policy either useless or detrimental, and upon a reward for acts neither desired nor performed, would appear to be reconcilable with neither common justice nor common sense. The establishment of such a principle would arrest, necessarily, everything like progress or improvement in government ; or, if such changes should be ventured upon, the government would have to become one great pension establishment on which to quarter a host of sinecures. It would especially be difficult, if not impracticable, in this view, ever to remodel the organic law of a state, as constitutional ordinances must be of higher authority and more immut- able than common legislative enactments, and there could not exist conflicting constitutional ordinances under one and the same system. It follows, then, upon prin- ciple, that in every perfect or competent government there must exist a general power to enact and to repeal laws; and to create, and change or discontinue, the agents designated for the execution of those laws. Such a power is indispensa- ble for the preservation of the body politic, and for the safety of the individuals of the community." Butler v. Pennsylvania, 10 How. 48 ; and see Allen v. McKeen, i Sumner, 276 ; Whil- lington V. Polk, i Harris &; J. 236. This latter was an action on an assize sur novel disseisin, to maintain the right of a judge to his seat after the court had been destroyed by a statute repealing that under which the judge was appointed. So it has been held that a chartered bank is a public corporation, appointed for public purposes, subject to the control of the public, the charter of which is held at the pleasure of the sov- ereign power, its creation proceeding solely upon the idea of public necessity or public convenience, and that, being ap- pointed by the public, solely for public uses, all its operations are subject to the control of that public, who may, from time 390 LAW OF CONTRACT. [Bk. II. Ch. VII. tlement of both companies contain special powers for the purpose. Qi) The directors of the one company have no power to burden their shareholders with the debts and liabiUties of the other company, (o) (n) Cork, &c., Rail. Co. v. Patterson, (o) Eva Ins. Co., in re, 30 L. J., Cli. 18 C. B. 450. 137. Harding v. Webster, 2g L. J., Ch. 161. to time, as the public good may require, enlarge, restrain, limit, modify its powers and duties, and at pleasure dispense with its benefits. The agency, during its continuance, is equally independent, within its sphere, and upon a modifica- tion of its terms the agency may be surrendered. The rights of the agent to the profits and emoluments of the agency will be enforced by courts ; but, like every other agency, it is revocable at the will of the principal. Mechanics' and Trad- ers' Bank v. Debolt, i Ohio St. 591; Toledo Bank v. Bond, Id. 622 ; Knoup V. The Piqua Bank, Id. 603, 6og ; and see Butler v. Palmer, i Hill, 324. If a bank has, by its charter, an express or implied power to sell and transfer negotiable paper, a law taking away this power impairs the obligation of a contract, and is void. Planters' Bank v. Sharp, 6 How. 301 ; The Peo- ple V. Manhattan Co., 9 Wend. 351 ; Michigan State Bank v. Hastings, i Doug. 225 ; Miners' Bank v. United States, i Greene (Iowa), 553 ; Bank of the State v. Bank of Cape Fear, 13 Ired. 75 ; Providence Bank v. Billings, ; Pet. 560; Turn- • pike Co. V. Phillips, 2 Penn. 184; Claghorn v. Cullen, 13 Penn. St. 133; Com. Bank of Natchez v. The State of Missis- sippi, 6 Sm. & Mar. 599; Backus w Lebanon, 11 N. H. 19; Stanley v. Stanlev, 26 Me. 191 ; Williams v. Planters' Bank, 12 Rob. (La.) 125 ; Payne v. Baldwin, 3 Sm. & Mar. 661. The question as to the taxing power arises under this clause of the constitution. So a provision in the charter of a railroad com- pany, or an act of a state legislature consolidating two railroad companies, which requires the new company to pay annually into the treasury of the state a tax of one quarter of one per cent, upon its capital stock of four hundred thousand dollars, dues not prevent a subseqtient legislature of the state impos- ing a further or different tax upon the companv. The amount designated in the first act is to be considered as only a declara- tion of the tax, payable annually until a different rate should be established, though if a state should expressly and unmis- takeably confer immunitv from taxation upon a corporation Sec. II.] JOLYT STOCK COMPANIES. 391 1319. Injuiiciion to restrain luiautkorized con- tracts. — It is competent to any single shareholder to apply for and obtain an injunction for the purpose of in its charter, such immunity would undoubtedly become a part of the contract, and equally inviolate with its other stipu- lations ; but before any such exemption or limitation can be admitted, the intent of the legislature to confer the immunity or prescribe the limitation must be clear beyond reasonable doubt. All public grants are strictly construed, and nothing can be taken against a state by presumption or inference. The established rule of construction in such cases is that rights, privileges, and immunities not expressly granted are to be understood as reserved. Minot v. Philadelphia, &c., R. R. Co., 1 8 Wall. 206. Upon questions of public policy, such as the grant- ing to an individual or a company a franchise to raise a certain sum of money by lotteries, or to sell spirituous liquors for a certain period, and afterwards by a general law prohibiting lotteries or the sale of spirituous liquors. The prevailing opinion seems to be that such general laws are not, in either case, within the clause. Vanderbilt v. Adams, 7 Cowen, 349 ; Coates V. The Mayor, &c., of New York, Id. 585 ; Phalen's case, I Rob. (Va.) 713; Phalen v. Virginia, 8 How. 263; Hirn V. State, 1 Ohio, 15; Baker v. Boston, 12 Pick. 194. It was held in State v. Hawthorn, 9 Mo. 389, that where a premium has been paid for the license, the contract is one which state laws can not impair. See Freleigh v. State, 8 Id. 606 ; State V. Sterling, Id. 697; State v. Phalen, 3 Harring. (Del.) 441. Sec. 8, subd. 3, of the constitution provides that congress shall have power to regulate commerce between the states. This is what is known as the commercial power of congress. Under this clause many important questions have arisen. Thus it has been held, by the supreme court that power to regulate commerce between the states was vested in congress by the constitution in order to remove trammels upon trans- portation between different states which had previously existed, and to prevent the creation of such trammels in future, and that the act of July 25, 1866, authorizing the construction o.' certain bridges across the Mississippi river, and among others, iv bridge connecting Dubuque with Dunleith, in the state of Illinois, were intended to reach trammels to such commerce interposed by state enactments or by existing laws of congress. But they were not intended, even if it were competent for •congress to authorize any such proceeding, to invade the 392 LAW OF CONTRACT. [Bk. II. Ch. VIL preventing the directors and the majority of share- holders of a registered company from entering into contracts for the carrying on a trade or business and domain of private contracts and annul all such as had been made on the basis of existing legislation and existing means of international communication. Contracts valid when made, continue valid, so long, at least, as peace exists between the governments of the contracting parties, notwithstanding a change in the condition of business which originally led to their creation. Therefore, a contract between an elevator and a railway company, that the former, in con- sideration of erecting an elevator-building at a certain point where grain brought in by the latter's road would have to be re-shipped across the Mississippi river, should have the hand- ling of such grain, did not cease to be binding, or the building of a bridge across the river at that point, which obviated all necessity of such re-shipment. R. R. Co. v. Richmond; and see r\Iinot v. Philadelphia, &c., R. R. Co., i8 Wall. 206. The question has further arisen in consideration of whether a state which is traversed by a railroad, whose termini are beyond its limits, has a right to assess a tax upon passengers carried from one state to another, through the state levying the tax. In Clark v. Philadelphia, &c., R. R. Co., 4 Houst. 158, the supreme court of the United States held, that an act of the legislature imposing on "every person, corporation or association or company of persons not a corporation, engaged, or that may hereafter engage in the business of carrying pas- sengers by steam-power, whether on land or water, in, through upon, over, or across any portion [of a] state, or within the territorial limits of it," a state tax " at and after the rate of ten cents for every passenger so transported within this state," to be paid to the state treasurer, for the use of the state; and further providing that " in case there be in the charter of anv corporation liable to the provisions of the act, anv clause or provisi(jn so restricting the amount of toll to be charged for the transportation of passengers, as that the act would, ac- cording to the present rate of charges of such corporation, operate unjustly, then . . the said corporation shall have the right to increase the said toll to the amount of said tax ; " and also providing that " when the transportation of a passenger shall be by railroad, and the direction and length of his journey shall be such as to require him to travel on more than one road on the same occasion, there shall be but Sec. 1 1. J JOINT STOCK COMPANIES. 393 the accomplishment of objects not warranted by the articles of association. {p~) 1320. The dissolution and winding tip of regis- {p) Simpson v. Westm. Pal. Hotel Co. (Limited), 29 L. J., Ch. 561 ; 8 H. L. C. 712. one tax paid to the state treasurer, and that shall be paid by the person, association, companj^, or corporation upon whose road his journey begins" — is an act which imposes the tax upon the passengers so transported, to be collected by the railroad company or other carrier for the state, and not a tax upon the carrier, to be measured by the number of passengers carried, and in so far as it affects persons entering into, leav- ing, or passing through a state, is in effect an act to regulate commerce between the states, and, therefore, inoperative and invalid under the provision of the constitution of the United States conferring on congress power " to regulate commerce with foreign nations, and among the several states, and with the Indian tribes." A question also arises under this clause as to the legality of state laws imposing per-centages or head moneys upon emigrants, or upon companies trans- porting them to its limits. In the supreme court of the United States, October term, 1S75, an appeal from the circuit court for the southern district of New York, in Hen- derson V. Wickham, mayor, &c.. of New York, and the Commis- sioners of Emigration v. North German Lloyd, Mr. Justice jNIiller reviews the preceding decisions in an opinion which settles the question, we suppose, finally. Said he : " In the case of the City of New York v. Miln, reported 11 Peters, 103, the question of the constitutionality of a statute of the state of New York, concerning passengers in vessels coming to the port of New York, was considered by this court. It was an act passed February 11, 1824, consisting of several sections. The first section — the only one passed upon by the court — required the master of every ship or vessel arriving in the port of New York from any country out of the United States, or from any other state of the United States, to make report in writing, and on oath, within twenty- four hours after his arrival, to the mayor of the city, of tho name, place of birth, last legal settlement, age, and occupation of' every person brought as a passenger from any country out of the United Slates, or from any of the United States into the port of New York, or into any of the United States, and of 394 ^^i"' ^^ COXTRACJ. [Bk. II. Ch. VII. tered joint stock companies are reg-ulated by the 25 & 26 Vict. c. 89. {c[) In order to bring a society or association within the operation of the Act, it must be iq) See also the 31 & 32 Vict. c. 68, and the 33 and 34 Vict. l. 104. all persons landed from the ship or put on board, or suffered to go on board any other vessel during the voyage, with intent of proceeding to the city of New York. A penalty was pre- scribed of seventy-five dollars for each passenger not so re- ported, and for every person whose name, place of birth, last legal settlement, age, and occupation should be falsel\ reported. The other sections required him to give bond, on the demand of the mayor, to save harmless the city from all expense of support and maintenance of such passenger, or to return any passenger deemed liable to become a charge, to his last place of settlement, and required each passenger, not a citizen of the United States, to make report of himself to the mayor, stating his age, occupation, the name of the \'essel in which he arrived, the place where he landed, and the name of the commander of the vessel. We gather from the report of the case that the defendant, Miln, was sued for the penalties claimed for refusing to make the report required in the first section. A division of opinion was certified bv the judges of the circuit court on the question whether the act assumes to regulate commerce between the port of Xew York and foreign ports, and is unconstitutional and void. This court, expressly limiting its decision to the first section of the act, held that it fell within the police powers of the states, and was not in con- flict with the federal constitution. From this decision Mr. Justice Story dissented, and in his opinion stated that Chief Justice Marshall, who had died between the first and second arguments of the case, fully concurred with him in the view- that the statute of New York was void, because it was a regu- lation of commerce forbidden to the states. In the Passenger Cases, reported in 7 Howard, 283, the branch of the statute not passed upon in the preceding case came under consideration in this court. It was not the same statute, but was a law re- lating to the marine hospital on Staten Island. It authorized the health commissioner to demand, and if not paid, t(j sue tor and recover, from the master of every vessel arriving in the port of New York from a foreign port, one dollar and litty cents for each cabin passenger, and one dollar for each steerage passenger, mate, sailoi\ or mariner, and from the Sec. II.j JOINT STOCK COMPANIES. 395 shown that it was formed for the purpose of trading and making profit. Clubs, therefore, in the ordinary acceptation of the term, are not within the scope and master of each coasting vessel twenty-five cents for each per- son on board. These moneys were to be appropriated to the use of the hospital. The defendant, Smith, who was sued for the sum of $295 for refusing to pay for 295 steerage passengers on board the British ship Henry Bliss, of which he Avas mas- ter, demurred to the declaration on the ground that the act was contrary to the constitution of the United States, and void. From a judgment against him, affirmed in the court of errors of the state of New York, he sued out a writ of error, on which the question was brought to this court. It was here held, at the January term, 1849, that the statute was ' repug- nant to the constitution and laws of the United States, and therefore void.' 7 Howard, 572. Immediately after this decision, the state of New York modified her statute on that subject, with a view, no doubt, to avoid the constitutional objection, and amendments and alterations have continued to be made up to the present time. As the law now stands, the master or owner of every vessel landing passengers from a foreign port is bound to make a report similar to the one recited in the statute held to be valid in the case of New York V. Miln, and on this report the mayor is to endorse a demand upon the master or owner that he give a bond for every pas- senger landed in the city in the penal sum of $300, conditioned to indemnify the commissioners of emigration and every county, city, and town in the state against any expense for the relief or support of the person named in the bond for four years thereafter. But the owner or consignee may commvite for such bond, and be released from giving it, by paying, within twenty-four hours after the landing of the passengers, the sum of one dollar and fifty cents for each one of them. If neither the bond be given nor the sum paid within the twenty-four hours, a penalty of $500 is incurred, which is made a lien on the vessel, collectible by attachment at the suit of the commissioner of emigration. Conceding the authority of the Passenger Cases, which will be more fully considered hereafter, it is argued that the change in the statute now relied upon, requiring primarily a bond for each passenger landed as an indemnity against his becoming a future charge to the state or county, leaving it optional with the ship- owner to avoid this by paying a fixed sum for each passenger 396 LAW OF CONTRACT. [Bk. II. Ch. VIL operation of the statute ; (r) but benefit building so- cieties and friendly societies have been held to be within the repealed Acts for which the 25 & 26 Vict, c. 89, is substituted, (s) (r) St. James's Club, in re, 2 De. G. Soc, in re, 27 I^. J., Ch. 97. Nat. :\I. & G. 3S8. Indust. & Prov. Soc, in re, 30 L. J., (s) St. George's Benefit Building Ch. 940. Mid. C. Ben. Build. Soc., in re, 33 L. J. Ch. 739. takes it out of the principle of the case of Smith v. Turner — the Passenger Case from New Yorlc. It is said that the statute in tliat case was a direct tax on the passenger, since the act authorized the ship-master to collect it of him ; and that on that ground alone was it held void ; while in the present case, the requirement of the bond is but a suitable regulation under the power of the state to protect its cities and towns from the expense of supporting persons who are paupers or diseased, or helpless women and children, coming from foreign countries. In whatever language a statute may be framed, its purpose must be determined by its natural and reasonable effect; and if it is apparent that the object of this statute, as judged by that criterion, is to compel the owners of vessels to pay a sum of money for every passenger brought by them from a foreign shore, and landed at the port of New York, it is as much a tax on passengers, if collected from them, or a tax on the vessel or owners for the exercise of the right of landing their passengers in that cit}', as was the statute held void in the Passenger Cases. To require a heavy and almost impossible condition to the exercise of this right, with the alternative of the payment of a small sum of money, is in effect to demand payment of that sum. To suppose that a vessel which once a month lands from 300 to 1,000 passen- gers, or from 3,000 to 12,000 per annum, will give that manv bonds of $300 with good sureties, with a covenant for four years against accident, disease, or poverty of the passenger named in such bond, is absurd, when this can be avoided by the payment of :^!i.So, collected of the passenger before he em- barks on the vessel. Such bonds would amount in many iustances for every voyage to more than the value of the ves- sel. The liability on the bond would be, through a Ion \ lapse of time, contingent on circumstances which the bon.N- men could neither foresee nor control. The cost of preparimj the bond and approving sureties, with the trouble incident to it in each case, is greater than the sum required to be paid as Sec. II.] JOIXT STOCK COMPANIES. 397 132 1. Parties liable to be made contributories. — By the 25 & 26 Vict. c. 89, s. 74, the term " contribu- tory " is to mean every person liable to contribute to commutation. It is inevitable, under such a law, that the money would be paid for each passenger, or the statute resisted or evaded. It is a law in its purpose and effect imposing a tax on the oAvner of the vessel for the privilege of landing in New York passengers transported from foreign countries. It is said that the purpose of the act is to protect the state against the consequences of the flood of pauperism immigrating from Europe and first landing in that city. But it is a strange mode of doing this to tax ever}' passenger alike who comes from abroad. The man who brings with him important additions to the wealth of the country, who is per- fectly free from disease, and the man who brings to aid the industry of the country a stout heart and a strong arm, is as much the subject of the tax as the diseased pauper who mav become the object of the charity of the city in a week after he lands from the vessel. No just rule can make the citizen of France landing from an English vessel on our shore liable for the support of an English or Irish pauper who lands at the same time from the same vessel. So far as the authority of the cases of New York v. Miln, and the Passenger Cases, can be received as conclusive, they decide that the requirement of a catalogue of passengers, with statements of their last resi- dence and other matters of that character, is a proper exercise of state authority, and that the requirement of the bond, or the alternative payment of mone)- for each passenger, is void, because forbidden by the constitution and laws of the United States. But the Passenger Cases (so called because a similar statute of the state of Massachusetts was the subject of consid- eration at the same term with that of New York) were decided by a bare majority of the court. Justices McLean, Wayne, Catron, McKinley, and Grier held both statutes void; while Chief Justice Taney and Justices Daniel, Nelson, and Wood- bury held them valid. Each member of the court delivered a separate opinion, giving the reasons for his judgment, except Judge Nelson, none of them professing to be the authoritative opinion of the court. Nor is there to be found in the reasons given by the judges who constituted the majority such har- mony of views as would give that weight to the decision which it lacks by reason of the divided judgments of the members of the court. Under these circumstances, with three cases before 398 LAW OF CONTRACT. [Bk. II. Ch. VII. the assets of a company under that Act in the event of the same being wound up. By s. 75 the liability of any person to contribute to the assets of a us arising under statutes of three different states on the same subject, which have been discussed as though open in this court to all considerations bearing upon the question, we approach it with the hope of attaining a unanimity not found in the opinions of our predecessors. As already indicated, the provisions of the constitution of the United States on which the principal reliance is placed to make void the statute of New York, is that which gives to congress the power 'to reg- ulate commerce with foreign nations.' As was said in United States V. Hollida)', 3 Wall. 417, 'commerce with foreign nations means commerce between citizens of the United States and citizens or subjects of foreign governments.' It means trade and it means intercourse. It means commercial inter- course between nations and parts of nations in all its branches. It includes navigation, as the principal means by which foreign intercourse is effected. To regulate this trade and intercourse is to prescribe the rules by which it shall be conducted. ' The mind,' says the great Chief Justice, ' can scarcely conceive a system for regulating commerce between nations which shall exclude all laws concerning navigation, which shall be silent on the admission of the vessels of one nation into the ports of another,' and he might have added with equal force, which prescribed no terms for the admission of their cargo or their passengers. Gibbons v. Ogden, g Wheaton, 190. Since the delivery of the opinion in that case, which has become the accepted canon of construction of this clause of the constitu- tion, as far as it extends, the transpinlation of passengers from European ports to those of the United States has attained a magnitude and importance far beyond its proportions at that time to other branches of commerce. It has become a part uf our commerce with foreign nations of vast interest to this' country as well as to the immigrants who come among us tn find a welcome and a home within our borders. In addition to the wealth Vv-hich some of them bring they bring still more largely the labor which we need to till our soil, build our railroads, and develop the latent resources of the country in its minerals, its manufactures, and its agriculture. Is the regulation of this great system a regulation of commerce? Can it be doubted that a law which prescribes the terms on which vessels shall ena;a£re in it is a law reirulatins; this branch Sec. Il.J JOINT STOCK COMPANIES. 399 company under that Act, in the event of the same being wound up, is to be deemed to create a debt of the nature of a specialty accruing due of commerce ? The transportation of a passenger from Liverpool to the city of New York is one voyage. It is not completed until the passenger is disembarked at the pier in the latter city. A law or a rule emanating from any lawful authorit}- which pre- scribes terms or conditions on which alone the vessel can dis- charge its passengers is a regulation of commerce, and in case of vessels and passengers coming from foreign ports, is a reg- ulation of commerce with foreign nations. The acciiracy of these definitions is scarcely denied by the advocates of the state statutes. But assuming that in the formation of our government certain powers necessary to the administration of their internal affairs are reserved to the states, and that among these powers are those for the preservation of good order by punishment of crime, bf the health and comfort of the citizens, and their protection against pauperism, and against contagious and infectious diseases, and other matters of legislation of like character, they insist that the power here exercised falls within this class, and belongs rightfully to the states. This power, frequently referred to in the decisions of this court, has been in general terms somewhat loosely called the police power. It is not necessary for the course of this discussion to attempt to define it more accurately than it has been defined already. It is not necessary, because whatever may be the nature and extent of that power, where not otherwise restricted, no definition of it, and no urgency for its use, can authorize a state to exercise it in regard to a subject-matter which has been confided exclusively to the discretion of congress by the constitution. Nothing is gained in the argument by calling it the police power. Very many statutes, when the authority on which their enactments rest is examined, may be referred to different sources of power, and supported equally well under any of them. A statute may at the same time be an exercise of the taxing power and of the power of eminent domtfin. A statute punishing counterfeiting may be for the protection of the pri- vate citizen against fraud, and a measure for the protection of the currency, and the safety of the government which issues it. It must occur very often that the shading which marks the line between one class of legislation and another is verr nice, and not easily distinguishable. But however difficult this Uiiiv be, it is clear from tlic nature of our complex form 400 LAW OF CONTRACT. [Bk. II. Ch. VII. from such person at the time when his liability com- menced, but payable at the time when calls are made for enforcing such liability. By s. 38, in the event of of government that whenever the statute of a state invades the domain of legislation which belongs exclusively to the congress of the United States, it is void, no difference under what class of powers it ma}' fall, or how closely allied to powers conceded to belong to the states. ' It has been con- tended,' savs ?*Iarshall, C. J., 'that if a law passed by a state in the exercise of its acknowledged sovereignty comes into conflict with a law passed by congress in pursuance of the constitution, they affect the subject and each other like equal opposing powers. But the framers of our constitution foresaw this state of things, and provided for it by declaring the supremacy not only of itself but of the laws made in pursuance thereof. The nullity of any act inconsistent with the consti- tution is produced by the declaration that the constitution is supreme." And where the federal government has acted, he sa)'s : ' In everv such case the act of congress or the treaty is supreme; and the laws of the state, though enacted in the exercise of powers not controverted, must yield to it.' 9 ^Vheaton, 210. It is said, however, that under the decisions of this court there is a kind of neutral ground, especially in that covered by the regulation of commerce, which ma}' be occupied by the state, and its legislation be valid so long as it interferes with no act of congress or treatv of the United States. Such a proposition is supported bv the opinions of several of the judges in the Passenger Cases, bv the decisions of this court in Cooly v. Board of ^^'ardens, 12 How. 299, and by the case of Crandall v. Nevada, 6 Wall. 35, and Gilman V. Philadelphia, 3 Wall. 713. But this doctrine has alwavs been controverted in this court, and has seldom, if ever, been stated without dissent. These decisions, howe\-er, all agree that under the commerce clause of the constitution, or within its compass, there are powers which, from their nature, are exclusive in congress ; and in the case of Coolv v. Board of Wardens it was said that, ' whatever subjects of this power are in their nature national, or admit of one uniform system or plan of regulation, mav justly be said to be of such a nature as to require exclusive legislation bv congress." A regulation which imposes oaerous, perhaps impossible, condi- tions, on those engaged in active commerce with foreign nations, must of necessity be national in its character. It is Sec. II.] JOINT STOCK COMPANIES. 401 a company under that Act being wound up, every present and past member of the company is to be lia- ble to contribute to the assets of the company to an more than this, for it may properly be called international. It belongs to that class of laws which concern the exterior rela- tion of this whole nation with other nations and governments. If our government should make the restrictions of these bur- dens on commerce the subject of a treaty, there could be no ■doubt that such a treaty would fall within the power con- ferred on the president and senate by the constitution. It is, in fact, in an eminent degree a subject which concerns our international relations, in regard to which foreign nations ■ought to be considered and their rights respected whether the rule be established by treaty or bv legislation. It is equall)' clear that the matter of these statutes may be, and ought to be, the subject of a uniform system or plan. The laws which govern the right to land passengers in the United States from other countries ought to be the same in New Yorli, Boston, Nevv Orleans, and San Francisco. A striking evidence of the truth of this proposition is to be found in the similarity, almost identity, of the statutes of New York, of Louisiana, and California, now before us for consideration in these three cases. It is apparent, therefore, that if there be a class of laws which may be valid when passed by the states, until the same ground is occupied by a treaty or an act of congress, this statute is not of that class. The argument has been pressed with some earnestness, that inasmuch as this statute does not come into operation until twenty-four hours after the passen- ger has landed, and has rhingled with or has the right to min- gle with the mass of the population, he is withdrawn from the influence of any laws which congress might pass on the subject, and remitted to the laws of the state as its own citizens are. It might be a sufficient answer to say that this is a mere evasion of the protection which the foreigner has a right to expect from the federal government when he lands here a stranger, owing allegiance to another government, and looking to it for such protection as grows out of his relation to that government. But the branch of the statute which we are considering is directed to and operates directly on the ship- owner. It holds him responsible for what he has done before the twenty-four hours commences. He is to give the bond or pay the money, because he has landed the passenger, and he is given twenty-four hours' time to do this before the penalty attaches. III. — 26 402 LAW OF CONTRACT. [Bk. II. Ch. VII. amount sufficient for payment of the debts and liabili- ties of the company, and the costs, charges, and ex- penses of the winding-up, and for the payment of such When he is sued for this penalty, it is not because the man has been here twenty- four hours, but because he brought him here and failed to give the bond or pay $1.50. The effective oper- ation of this law commences at the other end of the voyage, The master requires of the passenger before he is admitted on board, as a part of the passage money, the sum which he knows he must pay for the privilege of landing him in Xew York. It is, as we have already said in effect, a tax on the passenger, which he pays for the right to make the voyage, a voyage only completed when he lands on the American shore. The case does not even require us to consider at what period after his arrival the passenger himself passes from the sole protection of the constitution, laws, and treaties of the United States, and becomes subject to such laws as the state may rightfully pass, as was the case in regard to importations of merchandise, in Brown v. Maryland, 12 Wheaton, 417, and in The License Cases, 5 How. 504. It is too clear for argument that this demand of the owner of the vessel for a bond or money on account of every passenger landed by him from a foreign shore is, if valid, an obligation which he incurs by bringing the passenger here, and which is perfect the moment he leaves the vessel. We are of opinion that this whole subject has been confided to congress by the constitution; that congress can more appropriately and with more acceptance exercise it than any other bod)' known to our law, state or national ; that by providing a system of laws in these matters, applicable to all ports and to all vessels, a serious question, which has long been matter of contest and complaint, may be effectually and satisfactorily settled. Whether, in the absence of such action, the states can, or how far they can, by appropriate legislation protect themselves against actual paupers, vagrants, criminals, and diseased persons arriving in their territory from foreig 1 countries, we do not decide. The portions of the New York statute which concern persons who, on inspection, are found to belong to these classes are not properly before us, because the relief sought is to the part of the statute applicable to all passengers alike, and is the only relief which can be given in this bill. The decree of the circuit court of Xew York in the case of John & Thomas Henderson v. The Mayor of New York and the Commissioners of Emigration, is reversed, and Sec. II.] JOINT STOCK COMPANIES. 403 sums as may be required for the adjustment of the rights of the contributories amongst themselves. But no past member is to be Hable to contribute to the the case remanded, with direction to enter a decree for an injunction, in accordance with this opinion. The statute of Louisiana, which is involved in tlie case of the Commissioners of Immigi-ation v. North German Llo)-d is so very similar to, if not an exact copy of, that of New York, as to need no separate consideration. In this case the relief sought was against exact- ing the bonds or paying the commutation money as to all pas- sengers, which relief the circuit court granted by an appropriate injunction; and the decree in that case is accordingly affirmed at the same term, in Chy Lung, plaintiff in error, v. J. H. Freeman, R. K. Piotrowski, Commissioner of Immigration, and William McKibben, sheriff of the city and county of San Francisco, California. In error to the supreme court of the state of California. The California statute relating to the landing of passengers was declared unconstitutional. Said Miller, J.: 'While this case presents for our consideration the same class of state statutes considered in the cases just dis- posed of, it differs from them in two very important points. These are, first: The plaintiff in error was a passenger on a vessel from China, being a subject of the Emperor of China, and is held a prisoner because the owner or master of a vessel who brought her over refused to give a bond in the sum of five hundred dollars in gold, conditioned to indemnify all the counties, towns, and cities of California against liability for her support or maintenance for two years. Secondly, the statute of California, unlike those of New York and Louis- iana, does not require a bond for all passengers landing from a foreign country, but only for classes of passengers specifi- cally describe'd, among which are ' lewd and debauched wo- men,' to which class, it is alleged, plaintiff belongs. The plaintiff, with some twenty other women, on the arrival of the steamer Japan from China, was singled out by the com- missioner of immigration, an officer of the state of California, as belonging to that class, and the master of the vessel re- quired to give the bond prescribed by law, before he per- mitted them to land. This he refused to do, and detained them on board. They sued out a writ of habeas corpus, which, by regular proceedings, resulted in their committal, by order of the supreme court of the state, to the custody of the sheriff of the county and city of San Francisco, 404 LAW OF CONTRACT. [Bk. II. Ch. VII. assets of the company, if he has ceased to be a mem- ber for one year prior to the commencement of the winding-up. No past member is to be liable to con- to await the return of the Japan, which had left the port pend- ing the progress of the case, the order being to remand them to that vessel on her return, to be removed from the state. All of plaintiffs companions were released from the custody of the sheriff on a writ of habeas corpus issued by Mr. Justice Field of this court. But plaintiff, by a writ of error, brings the judg- ment of the supreme court of California to this court, as we suppose, for the purpose of testing the constitutionality of the act under which she is held a prisriner. We regret very much that while the Attorney General of the United States has deemed the matter of such importance as to argue it in person, there has been no argument in behalf of the state of California, the commissioner of immigration, or the sheriff of San Fran- cisco, in support of the authorit}- by which plaintiff is held a prisoner, nor have we been furnished even with a brief in sup- port of the statute of that state. It is a most extraordinary statute. It provides that the commissioner of immigration is '"to satisfy himself whether or not anv passenger who shall arrive in the state by vessels from any foreign port or place, (who is not a citizen of the United States) is lunatic, idiotic, deaf, dumb, blind, crippled, or infirm, and is not accompanied by relatives who are able to support him, or is likely to be- come a public charge, or has been a pauper in any other coun- try, or is from sickness or disease, e.xi sting either at the time of sailing from the port of departure, or at the time of his arrival in the state, a public charge, or likely srion to become so, or is a convicted criminal, or a lewd or debauched wo- man ;'an'l no such person shall be permitted to land from the vessel, unless the master, or owner, or consignee shall give a separate bond in each case, conditioned to save harm- less every county, city, and town of the state against any ex- pense incurred for tlie relief support, or care of such person tor two years thereafter. The commissioner is authorized to charge the sum of seventy-five cents for every examination of a passenger made by him, which sum he may collect of the master, owner, or consignee, or of the vessel bv attachment. The bonds are to be prepared by the coaimissiuner, and two sureties are required to each bond, and for preparing the bond the commissioner is allowed to charge and col- lect a fee of three dollars, and for each oath administered Sec. II.] JOINT STOCK COMPANIES. 405 tribute in respect of any debt or liability of the com- pany contracted after the time at which he ceased to be a member. No past member is to be liable to con- to a surety, concerning his suiBcieiiC)^ as such, he may charge one dollar. It is expressly provided that there shall be a separate bond for each passenger, that there shall be two sureties on each bond, and that the same sureties must not be on more than one bond, and they must in all cases be resi- dents of the state. If the ship master or owner prefers, he may commute for these bonds b}' paying such a sum of money as the commissioner may in each case think proper to exact, and after retaining twenty per cent, of the commutation money tor his services, the commissioner is required once a month to deposit the balance with the treasurer of the state. See chapter I., article VII., of the Political Code of Cali- fornia, as modiiied by section 70 of the amendments of 1873-4. It is hardly possible to conceive a statute more skillfully framed to place in the hands of a single man the power to prevent entirely vessels engaged in a foreign trade, say with China, from carr3-ing passengers, or to compel them to submit to systematic extortion of the grossest kind. The commissioner has but to go aboard a vessel filled with pas- sengers ignorant of our language and our laws, and without trial, or hearing, or evidence, but from the external appear- ances of persons with whose former habits he is unfamiliar, he points with his finger to twentv, as in this case, or a hundred if he chooses, and s.iys to the master, these are idiots, these are paupers, these are convicted criminals, and these are lewd women, and these others are debauched women. I have here an hundred blank forms of bonds printed. I re- quire you to fill me up and sign each of these for five-hun- dred dollars in gold, and that you furnish me two hundred different men, residents of this state, and of sufficient means, as sureties on these bonds. I charge you five dollars in each case for preparing the bond and swearing your sureties, and I charge you seventv-five cents each for examining these pas- sengers, and all others you have on board. If you don't do this you are forbidden to land your passengers under a heavv penalty. But I have the power to commute with you for all this for any sum I may choose to take in cash. I am open to an offer, but you must remember that twenty per cent, of all I can get out of you goes into my own pocket, and the remainder into the treasury of California. If as we have endeavored to 4o6 LA IV OF CONTRACT. [Bk. II. Ch. VII. tribute to the assets of the company, unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them. show in the opinion in the preceding cases, we are at liberty to look to the effect of a statute for the test of its constitution- ality, the argument need go no further. But we have thus far only considered the effect of the statute on the owner of the vessel. As regards the passengers, section 2,963 declares that consuls, ministers, agents, or other public functionaries of any foreign government, arriving in this state in their official capac- ity, are exempt from the provisions of this chapter. All other passengers are subject to the order of the commissioner of immigration. Individual foreigners, however distinguished at home for their S'.icial, their literary, or their political char- acter, are helpless in the presence of this potent commissioner. Such a person mav offer to furnish any amount of surety on his own bond, or deposit any sum of money, but the law of California takes no note of him. It is the master, owner, or consignee of the vessel alone whose bond can be accepted. And so a silly, an obstinate, or a wicked commissioner may bring disgrace upon the whole country, the enmity of a pow- erful nation, or the loss of an equally powerful friend. While the occurrence of the hypothetical case just stated may be highly improbable, we venture the assertion that if citizens of our own government were treated by any foreign nation as subjects of the Emperor of China have been actually treated under this law, no administration could withstand the call for a demand on such goyernmenc for redress. Or, if this plain.- tiff and her twenty companions had been subjects of the Queen of Great Britain, can anv one doubt that this matter would have been the subject of international inquiry, if not of a direct claim for redress ? Upon whom would such a claim be made? Not upon the state of California, for by our constitu- tion she can hold no e.xterior relations with other nations. It would be made upon the gijvernment of the United States. If that government should get into a difficulty which would lead to war or to suspension of intercourse, would California alone suffer, or all the Union ? If we should conclude that a pecu- niary indemnity was proper as a satisfaction for tlie injury, would California pav it, or the federal government? .If that government has forbidden the states to hold negotiations with any foreign nations, or to declare war, and has taken the whole subject of these relations upon herself, has the constitution, Sec. II.] JOINT STOCK COMPANIES. 407 In the case of a company limited by siiares, no contri- bution is to be required from any member exceeding the amount unpaid on the shares in respect of which which provides for this, done so foolish a thing as to leave it in the power of the states to pass laws whose enforcement renders the general government liable to just reclamations which it must answer, while it does not prohibit to the states the acts for which it is held responsible 1 The constitution of the United States is no such instrument. The passage of laws which concern the admission of citizens and subjects of foreign nations to our shores belongs to congress and not to the states. It has the power to regulate commerce with foreign nations; the responsibility for the character of those regulations, and the manner of their execution belongs solely to the national government. If it be otherwise a single state can at her pleasure embroil us in disastrous quarrels with other nations. We are not called upon by this statute to decide for or against the right of a state, in the absence of legislation by congress to protect herself by necessary and proper laws against paupers and convicted criminals from abroad, nor to lay down the definite limit of such right, if it exist. Such a right can only arise from a vital necessity for its exercise, and can not be carried beyond the scope of that necessity. When a state statute, limited to provisions necessary and appropriate to that object alone, shall in a proper controversy come before us, it will be time enough to decide that question. The statute of California goes so far beyond what is necessary or even appropriate for this purpose as to be wholly without any sound definition of the right under which it is supposed to be justified. Its manifest purpose, as we have already said, is not to obtain indemnity, but money. The amount to be taken is left in every case to the discretion of an officer, whose ■cupidity is stimulated by a reward of one-fifth of all he can obtain. The money when paid does not go to any fund for the benefit of immigrants, but is paid into the general treasury of the state and devoted to the use of all her indigent citizens. The blind, or the deaf, or the dumb passenger is subject to •contribution, whether he be a rich man or a pauper. The patriot seeking our shores, after an unsuccessful struggle against despotism in Europe or Asia, may be kept out because there his resistance has been adjudged a crime. The woman whose error has been repaired by a happy marriage and numerous children, and whose loving husband brings her with 4o8 LAIV OF CONTRACT. [Bk. II. Ch. VII. he is liable as a present or past member. In the case of a company limited by guarantee, no contribution is to be required from any member exceeding the amount nis wealth to a new home, may be told she must pay a round sum before she can land, because it is alleged that she was debauched by her husband before marriage. Whether a young woman's manners are such as to justify the commissioner in calling her lewd may be made to depend on the sum she wil, pay for the privilege of landing in San Francisco. It is idle to pursue the criticism. In any view which we can take of this statute it is in conflict with the constitution of the United States, and therefore void. The judgment of the supreme court of California is reversed, and the case remanded to that court with directions to make an order discharging the prisoner from custody. That the clause in question does not interfere with the rights of congress or the states to pass bankruptcy or insolvency acts or statutes of limitation which are not ex post facto, has been repeatedly decided. See Sturges v, Crownin- shield, 4 Wheat. 122 ; Ogden v, Saunders, 12 Id. 213 ; Boyle v. Zacharie, 6 Pet. 348; Planters' Bank v. Sharp, 6 How. 32S; Hicks V. Hotchkiss, 7 Johns. Ch, 297 ; Blanchard v. Russell, 13 Mass. I ; Kimberly v. Ely, 6 Pick. 440 ; Norton v. CoDk, 9 Conn. 314; Smith V. Parsons, i C'hio St. 107 ; James \'. Stull, 9 Barb. 4S2 ; Bruce v. Schuyler, 4 Gilman, 221, 227 ; Howard v. Ken- tucky & Louisville M. In;. Co., 13 B. Mon. 2S5 ; McMillan v. McNull, 4 Wheat. 209; Mather v. Bush, 16 Johns. 233; Stock- ing V. Hunt, 3 Den. 274 ; but see Golden v. Prince, 3 Wash. C. C. 313; as to statutes of limitation see McCracken v. Hay- ward, 2 Hu-.v, 608; S'jcicty, &c. v. Wheeler, 2 Gallis. 141;, Jackson v. Lamphire, 3 Pet. 290; Blackford v. Peltier, i Blackf. 36; Proprietors of Ken. Purchase v. Laboree, 2 Green, 293; Call v. Hagger, 8 ^lass. 423; Bronson v. Kin- zie, I How. 3:1. 'But,' said Marshall J., in Sturges v. Crowninsliield (4 Wl^eat. 122, 207), ' if, in a state where si.'c years m;!v be pleaded in bar to an action of assumpsit, a law should pass declaring that contracts already in existence, not barred by the statute, should be construed to be within it, there could be little doubt of its unconstitutionality." Jackson V. Lamphire, 3 Pet. 290; Bronson \. Kinzie, i How. 3x1. Among the rights reserved by the state in granting corporate franchises to railroad companies, is the power to regulate the approaches to, and the crossing of, public highways, and the passage through cities and villages, and generally to protect Sec. II.] JOINT STOCK COMPANIES. 409 of the undertaking entered into on his behalf by the memorandum of association. The Act is not to invalidate any provision contained in any policy of insurance or other contract, whereby the liability of individual members upon any such policy or contract is restricted, or whereby the funds of the company are alone made liable in respect thereof. No sum due to any member of a company in his character of a member by way of dividends, profits, or other- wise is to be deemed to be a debt of the company payable to such member, in a case of competition between himself and any other creditor not be- ing a member of the company ; but any such sum may be taken into account for the purposes of the final adjustment of the rights of the contribu- tories amongst themselves. By the 30«S: 31 Vict. c. 131, s. 4, where a company is formed as a limited com- pany under the 25 & 26 Vict. c. 89, the liability of the directors or managers, or of the managing director, may, if so provided by the memorandum of associa- tion, be unlimited. By sect. 5, such director or man- the life and property of its citizens ; and the exercise of cor- porate franchises must yield to this right. Under such right the corporate authorities of a town had a right to pass an ordinance providing ' that it shall be unlawful for any railroad company, by themselves or their agents, to run at a greater rate of speed within the corporate limits of the town of Cuba than five miles per hour,' and to provide a penalty for its violation of not less than ten dollars nor more than one hundred dollars ; and where a railroad company runs its trains through the limits of such town in direct violation of such ordinance, and injury is thereby done, such damage, by virtue of the statute, will be presumed to have been done through the negligence of the company, and injury, killing, and violation of the ordinance will make out a prima facie case of negli- gence, and throw the onus upon the company to rebut the presumption." Toledo, &c. Railway Co. v. Deacon, 7 Am. R R. Rep. 410 LAW OF CONTRACT. [Bk. II. Cn. VII. ager, in addition to his liability to contribute as an ordinary member, is to be liable to contribute as if he were a member of an unlimited company. But no contribution required from any past director or man- ager who has ceased to hold such office for a period of one year, or required in respect of any debt or lia- bility contracted after he ceased to hold such office, is to exceed the amount which he is liable to contribute as an ordinary member of the company : and, subject to the provisions contained in the regulations of the company, no contribution required from any director or manager is to exceed the amount which he is liable to contribute as an ordinary member, unless the court deems it necessary to require such contribution in order to satisfy the debts and liabilities of the com- pany, and the costs, charges, and expenses of the winding up. If the directors of a registered company have borrowed money, which has been applied boni fide to the purposes of the company, and the mem- bers or shareholders have had the benefit of the trans- action, the loan constitutes a debt due from the com- pany, in respect of which contribution may be enforced, although no express power to borrow money had been granted to the directors. (/') All persons who have purchased shares and received dividends, {x) or who have applied for, and excepted and received, an allotment of shares, {y) or who have agreed to take shares and subscribe capital for the purpose of carrying on the undertaking, or are actually holders of shares in the company, are liable to be made contribu- tories to the debts and liabilities of the company, (/) Elect. Tel. Co , in re, jO Eeav. ( v) Be^tS case. 34 L. J., Ch. 523. 225. Thomson's case, lb. 525. Cockney's (x) Barclay, ex parte, 27 L. J., Ch. case, 23 lb. 12. Worth, ex parte, lb. 664. 589. Sec. II.] JOIXT STOCK COMPANIES. 411 whether they have executed the deed or signed the contract, or hold their shares, as trustees, or in their own right, or as mortgagees or creditors, (z) But it does not necessarily follow that, because a man has claimed to be a member and has attended a meeting in that character, and has been registered and returned as a member by the directors, he can be made liable as a contributory to the debts of the company. («) If he has agreed to accept shares, but has revoked his agreement or offer before it has been accepted, and before any shares have been allotted him, or if the shares have not been allotted within a reason- able time, (b) he can not be made a contributory, although shares have been subsequently allotted to him, and his name has been placed on the register of members and returned to the registrar, (f) So, if he has never been a shareholder at all, and there has never been any privity between him and the company, but he has simply purchased shares in the name of another person, who has been accepted as a share- holder by the company, (d) So, if he has accepted shares conditionally, and has been registered as a member, he is nevertheless not liable to be, placed on the list of contributories, if the condition annexed to his acceptance of the shares has never been fulfilled, and he has never signed the deed of settlement or any subscription contract. (^) If however, the mem- bers generally are neither party nor privy to the con- (2) Holt, ex parte, 20 L. J., Ch. 413. Ex. 90. Gav, ex parte, 21 lb. 2S4. Hall's case, (c) Graham, ex parte, 30 L. J., Bk. 3 De G. & S. 80. Price's case, lb. 42. J 46. Lumstlen v. Buchanan, 4 Macq. ( liability, and his name must be retained on the list of contributories. (/) To make a good legal forfeiture, the directions and requisites of the power of forfeiture must be strictly and bona fide observed. And, if the requisites of the power have been strictly observed, but the exercise of the power is the result of a collu- sive and unauthorized agreement, there is no valid forfeiture, and no release of the shareholder from lia- bility to contribute, {ti) But, if there is a valid reso- lution declaring a forfeiture, it is immaterial that the name of the owner has not been removed from the register. {£) 1328. Extent and cbiratio7i of the liability of out- going and incomi^ig shareholders. — Generally speak- ing, when a man comes in as a purchaser of shares in a joint-stock company, he takes them with all their rights and liabilities, so that, if a liability to a loss has been incurred before he purchased, he may be called (r) Maguire's case, 3 De G. & S. Gower's case L. R., 6 Eq. 77. 35- {u) Agricult. Cattle Ins. Co., in ;v, {s) Woolaston's case, 4 De G. & J. 34 L. J., Ch. 329 ; 35 L. J., Ch. 296 ; 445 ; 28 I>. J., Ch. 721. L. R., 1 Ch. 161, 511. [f) Barton, ex parte, 28 L. J., Ch. (,r) Ly.ster's ca.;e, L. R., 4 £q. 233; 637. Jones, ex park-, 27 lb. 668. 36 L. J,, Ch. 616. Sec. II.] JOINT STOCK COMPANIES. 4:1 upon to contribute thereto as soon as he has accepted a transfer of shares and become a shareholder in the concern, (jj/) But, if the deed of settlement provides that a selling member shall be absolved from future liabilities, but shall remain liable for losses already incurred, and also provides for the publication of half- yearly balance-sheets, showing the half-yearly profits and losses, which balance-sheets are to be binding and conclusive on all the shareholders, unless some error be discovered in them within a certain limited period, and the partners deal with each other upon the footing of the accounts furnished, the losses to which an outgoing shareholder continues liable, not- withstanding a transfer, will, as between the members inter se, be those which appear on the face of such published balance-sheets, (^z) No person can be settled on the list of contributories as a past member until it has been actually ascertained that the present members are unable to satisfy the contributions required to be made by them, (a) The discharge of a contributory who is a member at the time of the winding-up will not release him from his liability to indemnify the past member, his transferror, where the company is wound up within twelve months from the transfer. (Ji) 1329. Liabilities of husbands, real and personal representatives, heiri-at-law, devisees, and assignees, as contributories. — A husband who has received divi- dends on shares standing in his wife's name is liable (y) Cape's executors, ex parte, 22 case, L. R.,3 Cli. 161. See the 25 L. J., Ch. 601. Mayhew, ex parte, 24 & 26 Vict. c. 89, s. 38 (3). L. J., Ch. 353. [b) Roberts v. Crowe, L. R. 7, C. (z) Holme, ex parte, 22 L. J., Ch. P. 629 ; 41 L. J., C. P. 198. Nevill'-- 228. case, L. R., 6 Ch. 43 ; 40 L. J., Ch. (a) Needham's case, L. R., 4 Eq. i. Hudson's case, L. R,, 12 Eq. i ; 135 ; 36 L. J., Ch. 665. Andrew's 40 L. J., Ch. 444. 422 LAW OF CONTRACT. [Bk. II. Ch. VII. to be made a contributory, unless the shares were purchased by the wife without the participation of the husband, and the company has dealt with the wife exclusively as a married woman having a separate estate, and the question of right and liability is con- fined to the shareholders inter se. (<:) The real and personal representatives of deceased share- holders and parties who have covenanted or agreed to subscribe a certain amount of capital to the joint stock of the company, or to take shares in a com- pletely formed and established company, are liable to be made contributories to the extent of the assets in their hands, but no further, unless the personal repre- sentatives themselves have consented to become, and have been accepted as, shareholders in their own right. (d) All the real estate of deceased shareholders in the hands of the heir-at-law or of a devisee may be charged with the liabilities of the company incurred long after the death of the shareholder, although the shares may be in the hands of the personal representatives; for, if these' last have no personal assets in their hands suf- ficient to satisfy a call made by the court, both the heir- at-law and the devisee must contribute in respect of the real assets received by them. The devisee, how- ever, on being placed on the list of contributories in respect of the real estate of the testator in his hands, will have a right, as between himself and the other members of the company, to require that all the per- sonal estate of the other members liable to contribute shall be first applied in liquidation of the debts of the company, so that the real estate in the hands of the (<■) Burlinson's case. 3 De G. & S. (d) Blakeley, ex parte, L. R., 3 Ch. 19. Sadltr's case, lb. 42. Angas, 154. Thomas's case, i De G. .N: S. e\ parte, lib. 560. 'L,\xz.\&, ex parte, \ 579. Robinson's ca^e, 20 L. J., Ch. De G. V ii J. 533 ; 29 L. J., Ch. 269. 297. Sec. II.] JOINT STOCK COMPANIES. 423 devisee is not liable until all the available personal estate of the company and the shareholders has been exhausted, {e) Where a shareholder, having bequeathed certain Lhares in a banking co-partnership to her son, and appointed her son and C her executors, died, and the two executors proved the will, and presented the pro- bate at the ofKice of the company, where it was entered in the books, together with the names of the execu- tors, but the shares continued standing in the name of the deceased shareholder, and the dividends thereon were paid for many years to the son to whom they were bequeathed, and the exdtutorship affairs were wound up except with reference to the shares in ques- ti n, and the company became insolvent, it was held that the executors were liable as contributories in their character of personal representatives of the deceased shareholder. (/" ) There can not be a discharge of the testator's estate but by the substitution of another person liable, (^g) The trustees of the estate of every bankrupt shareholder are also liable to be made con- tributories in respect of the estate of the bankrupt in their hands; but they are not subjected to any per- sonal liability by the qualified insertion of their names in the list of contributories, unless they are guilty of some plain breach of duty. (Ji) The order of dis- charge of a bankrupt shareholder is, of course, a bar to all calls made on him for contribution before the date of his bankruptcy, (z) {/) Hamer's dev., ex parte, il L. J., 365 ; 17 Jur. 813. Keene's executors, Ch. 832 ; 2 De G. M. & G. 366. Tur- 3 De G. .M. & G. 280. quand v. Kirby, 36 L. J., Cli. 570 ; L. {h) Kuper's assignees, 3 De G & S. R., 4 Eq. 123 113. (/) Ex parte Crossfield, 16 Jur. {i) Chappel's case, 5 lb. 400. Par- 731. bury, ex parte, 30 L. J., Ch. 513. {g) Ek parte Wood, 22 L. J., Ch. 424 LAW OF CONTRACT. [Bk. II. Ch. VIL 1330. Railway Companies — Contracts ultra vires, — Railway companies, like registered joint-stock com- panies, are not entitled to engage in business not authorized by their act of parliament. Although, therefore, the act of parliament which constitutes and incorporates the company contains no prohibition against the company's engaging in any business except that of making and maintaining and using the railway, yet, if all the shareholders excepting one agree to carry on a different business, that single dissentient shareholder may go to the court for an injunction. (/§) But acquiescence on the part of those who complain of the violation of the principle will induce the court to refuse relief; they must come with diligence to assert their rights. (/) 1 33 1. Powers of the Directors. — As a general rule, the directors have no right to pledge the funds of the company for the purpose of supporting the operations of another company, or for carrying on a new trade, or for any transactions different from those they are expressly authorized to carry out. If the company has possessed itself of shares in another inde- pendent railway company, it can not legally, if there be a single dissentient shareholder, increase the num- ber of its shares, or apply its funds for the support of the second company, {iii) If it has been authorized to make a railway to the banks of a navigable river, and erect thereon wharves and warehouses for the reception and storeage of merchandise, and empowered to raise funds for these purposes, it can not lawfully {k) Att.-Gen. v. Gt. North. Rail. (/) Graham v. Birk., &c., Ry. Co., Co., 29 L. J,, Ch. 798. Hare v. 12 Beav. 466 ; 2 Mac. & G. 146. Lond. & North- West. Rail. Co., 30 L. Ffooks v. Lond. & S. W., 17 Jur. 365. J., Ch. 817. Forest v. Manchester, (tii) Salomons v. Laing, 12 Beav. Sheffield & Lincolnshire Ry. Co., 30 339 Beav. 40. Sec. II.] JOINT STOCK COMPANIES. 425 apply such funds when raised in deepening the river and improving the navigation thereof, (n) If, under separate acts of parliament, the company has power to construct branch railways in connection with its main line, and to raise capital for the purpose, it can not lawfully apply the money raised for the construc- tion of the branch railways' to the prosecution of works on the main line. {6) But a railway company author- ized to construct a railway on the broad gauge may lay down rails on the narrow gauge ; (/) and, when authorized to contract with other companies for the use of the railway, or for the passage thereon of the carriages and engines of other companies on payment of toll, may make any bon^ fide bargains for carrying into effect the objects authorized, however imprudent and unwise the contract may be. (^) 1332. Applications to parliafnent for an exten- sion of the powers of the company. — It is competent for the corporation at any time to apply to parliament to vary or extend the objects for which the company was originally incorporated, and to enter into con- tracts for works and services, and employ their funds in furtherance of such an object ; {f) and it is not within the province of a court to decide on the pro- priety of the apphcation, or to interfere to prevent it. But the court will, in certain cases, interfere to pre- vent a company from using its funds, and pledging its credit, and entering into contracts, for the purpose of such an application, {s) If the Act is obtained, («) Munt V. Shrews. & Chest. Rail. (r) Bateman v. Mayor, &c., of Ash- Co., 13 Beav. I. " ton-under-Lyne, 3 H. & N. 323 ; 27 (p) Bagshaw v. East Un., 2 M'N. L. J., Ex. 458. 389. (s) Great West. Rail. Co. v. Rush- (/) Beman v. Rufford, 15 Jur. 914. out, 5 De Gex & Sm. 290. ^Yinch v. (q) South York. Rail. Co. v. Gt. Birk., &c., 16 Jur. 1035. Ware v. North., 9 Exch. 55 ; 22 L. J., Ex. Grand June., 2 Russ. & M. 470. 305- , A26 LAW OF CONTRACT. [Bk. II. Ch. VII. provisions are generally inserted therein prescribing the mode in which the costs and expenses incurred in the procurement of the Act are to be defrayed. These are either made a charge upon the general funds and property of the company or upon the capi- tal to be raised under the new Act. {i) 1333. Void contracts by chairtnert of railway com- panies. — Where the chairman of the South Eastern Railway Company promised the managing committee of a proposed Deal and Dover Railway Company that if the committee went on with their project and applied to parliament for an Act of incorporation the South Eastern Railway Company would, in case of the rejection of the scheme, insure the committee against loss, &c., and. an action was brought against the chairman for a breach of his undertaking, it was held that the contract was void, as it was a promise that the South Eastern Railway Company should do an act which was contrary to the public law of the country, of which law all the parties to the contract were bound to take notice. (?/) The managing body of a railway company has no power to enter into a contract fixing and regulating the future traffic which may be carried on upon a line of railway which the company may thereafter be empowered to construct, so as to give to another railway company an interest in such traffic and profits. {x~) 1334. Money borrowed by directors on railioay debentures. — ^Vhcn directors borrow money on deben- tures, in pursuance of the statutory power conferred upon them, changing the tolls or rates they are (t) Att.-Gen. v. Eastlake, 22 Law (u) Macgregor v. Deal, Dover, &c., T. R., Ch. 20, Alt.-Gen. v. Guard. 22 L. J.. Q. B. 69. ^outhampt., 17 Sim. 6. Att -Gen. v. (x) Miilland Ry. Co. v. London & Andrews, 2 AI'N. & G. 225. Stevens NortliAVestern Ry. Co., L. R., 2 Eq. V. South Dev. Rail. Co. 13 Beav. 59. 524; 35 L. J., Ch. 31. Sec. II.] JOINT STOCK COMPANIES. 427 authorized to levy with the repayment of the money advanced, and not entering into any personal covenant in their own nameson behalf of the company, they incur no personal hability ; (jj/) but if they exceed their borrowing powers, or do not pursue the authority given to them, they may render themselves personally responsible for falsely representing that they had power to borrow the money on the credit of the undertaking, and had charged the tolls, or rates, or funds of the company with the repayment of the money. {£) Where a railway company, by debenture, assigned to the plaintiff " the undertaking, and all tolls and sums of money " arising by virtue of their Act of incorporation, to hold until principal and interest were satisfied, the principal sum to be repaid by a time specified, it was held that the last-named stipulation amounted to a covenant on the part of the company for the payment of the money, {a) A mortgage or bond for securing money borrowed by a railway com- pany, accordirig to the form in schedule C, annexed to the Companies Clauses Consolidation Act, 1845, charges the " going concern " created by the Act, but not the surplus lands of the company or the proceeds of the sale of them. {U) But a company may give a specific charge on the moneys to arise from the sale of its surplus lands for a debt due to the contractors who have constructed the works, {c) 1335. Bonds and loan notes by directors. — Direct- (y) Pontet v. Basingstoke Can. Co., {b) Legg v. Mathieson, 29 L. J-, 4 Se. 1S9. Pardee v. Price, 11 M. & Ch. 384. Furness v. Caterham Rail., W. 427. 27 Eeav. 358. Gardner v. London, (s) Collen V. Wright., 8 Ell. & Bl. Chatham & Dover Ry. Co., L. R, 2 Ch. 647 ; 26 L. J., Q. B. 147 ; 27 lb. 217. 201 ; 36 L. J., Ch. 323. Polhill V. Walter, 3 B. & Ad. 124. _ {c) Gardner v. London, Chatham & («) Hart V. East Un. Rail. Co., 7 Dover Ry. Co., L. R., 2 Ch. 201 ; 36 Exch. 246. East Un , &';., v. Hart, 8 L. J., Ch. 323. Exch. 116. 428 LAW OF CONTRACT, i'&vi. II. Cii.WU. ors of railway companies can not borrow money,, except in the way authorized by the special Act. When they are empowered to borrow on mortgage, this is a special, limited mode of borrowing, and they can not borrow on bond or loan note so as to charge the company with the repayment of the money ; but, where there is a debt due to contractors in respect of work done for the company, a bond acknowledging the debt, and binding the company to pay it, may be issued, (^d) 1336. Co7ttracts in which a director is personally interested. — No person interested in any contract with a railway company is capable of being a director; and no director is capable of being interested in any contract, if he is either directly or indirectly con- cerned in any such contract, the office of such director is vacant, and he must thenceforth cease from voting and acting as a director. The contract itself is not expressly avoided ; {e) but it is bad on general prin- ciples of equity, and, of course, can not be specifically enforced. (/") Every director is precluded from deal- ing on behalf of the company with himself or a firm of which he is. a partner. Having duties of a fiduciary character to discharge, he can not enter into engage- ments in which his own personal interest may pos- sibly conflict with the interests of those whom he is bound to protect. ( _cr^ It is an implied and inherent term of the contract or relationship subsisting between directors and shareholders, that the directors shall not make any profit to themselves out of the transactions (d) Chambers v. Manch. & Milfd. (/) Flanagan v. Gt. Western Ry. Rail. Co., 33 L. J., Q. B. 268. 7 & 8 Co., L. R., 7 Eq. n6 ; 38 L. J., Ch. Vict. c. 85, s. 19. 117. («■) 8 & 9 Vict. c. 16, ss. 85, 86. [g) Aberdeen Rail. Co. v. Blaikie Foster ». Oxfd., &c., Rail. Co., 13 C. I Macq. 461. B. 200. Sec. II.] JOINT STOCK COMPANIES. 429 they enter into on behalf of the company, and shall not acquire any interest adverse to their duty, {h ) ^ 1337. Indemnification of directors. — No director is liable to be sued by reason of his being a party to any contract or other instrument on behalf of the com- pany, or otherwise lawfully executing any of the powers given to the directors. The directors, their heirs, exec- utors, &c., are to be indemnified out of the capital of the company for all payments made or liability incurred in respect of any acts done by them, and for all losses, costs, and damages which they may incur in the exe- cution of the powers granted to them ; and the direct- ors for the time being may apply the existing funds and capital of the company for the purposes of such indemnity, and may, if necessary, for that purpose, make calls of the capital remaining unpaid, (z) The direct- ors are protected from liability so long only as they act within the scope of their power and authority as directors, and bind the company by their contracts.^ If they do not strict!|^ pursue the powers given them, and fail to bind the company, they are in general indi- vidually responsible for the fulfillment of the engage- ments they have entered into. They are responsible (/;) Benson v. Heathorn, I Y. & C. Hudson, 22 L. J., Ch. 529. Gaskell •C.i. C. 341. York. & North Mid. v. v. Cliambers, 26 Beav. 360. («') 8 & g Vict. u. 16, s. 100. ' A director of a railroad company holding an office fidu- ciary in its character can not become a purchaser of the cor- poration property during the term of his directorship, except subject to the company's right to disaffirm and demand a ru-sale, though if he were an execution creditor he might sell under his execution. Hoyle v. Plattsburgh, &c., R. R. Co., 7 Am. Railw. Rep. 283; 54 N. Y. 314. '^ The action of the board of directors of a corporation, when in session, is not required merely to direct the labor of an .employee of the corporation. Bee v. San Francisco, &c., R. K. Co., Id. 504; 46 Cal. 248. 430 LAJV OF CONTRACT. [Bk. II. Ch. VII. also for gross negligence and misconduct in the administration of the corporate funds, and the manage- ment of the business intrusted to them, and can not shelter themselves from the ordinary consequences resulting from breaches of trust and neglect of duty under the protecting clause of the act of parliament. They can not be said to be lawfully executing the Act when they ai'e misbehaving themselves. 1338. Contracts between projectors and members of committees of management of projected undertak- ings. — We have already seen ^ that, whenever a num- ber of persons are jointly associated together and con- tributed labor or services, or money or goods, or house- room or apartments, in furtherance of a common design, the law raises no implied contract or promise between them, or from any one or more of them, in favor of another, for payment or remuneration for the services so rendered, or goods supplied, or for repayment of the money advanced. The services, therefore, ren- dered, and the things done, by cftiy one member of a managing committee of a particular undertaking, in the discharge of the functions of such committee, can not be made the subject of a claim for payment or remuneration on his part as against the committee at large. The things done by him individually have been done for his own benefit and advantage, as well as for the benefit of the rest of the promoters and managers. .Ml are presumed to contribute in some shape or another to the advancement of the joint undertaking ; and the supposed superior services of one can not be made the foundation of a claim for a remuneration from another. Thus where a surveyor took an active part in the promotion of a railway company, gave Ante. Sec. II.] JOINT STOCK COMPANIES. 431 notices of an intended application to parliament, and subscribed for some of the shares, it vas held that he could not maintain an action against the co-projectors for work done by him and money paid in furtherance of the joint undertaking, {k) So, where the inventor and patentee of a new scheme for making roads got a number of gentlemen to act as a provisional committee for the formation of a joint-stock company, to carry his scheme into effect and work the patent, and acted as secretary to the committee, it was held that he could not maintain an action against such committee, or any of the members thereof, for his services as such secre- tary, or for his trouble, or for journeys undertaken by him in furtherance and execution of the scheme, as he was himself one of the movers and instigators of the project, and the members of the committee had just as much right to charge him for their attendance and attention to his scheme, as he them for his services as secretary. (/) 1339. Contracts for the payment of the projector out of the deposits. — Where a solicitor started a joint- stock company, and got several persons to form them- selves into a committee of management, under an agreement that he would not hold any of them person- ally liable to him for the expenses incurred in the pro- motion of the project, but would pay all the expenses of promoting the company up to the time of the pay- ment of the deposits, and would look to the deposits alone as the means of repayment, " the said deposits being held liable for that purpose by the directors of the company," and deposits to a large amount were received, and a parliamentary contract and a subscrib- ers' agreement signed by the parties paying such ik) Holmes ». Iliggins, i C. & C. (/) Paridn v. Fry, 2 C. & P. 311. 74. 43'2 LA IV OF CONTRACT. [Bk. II. Ch. VII. deposits, authorizing the directors to apply them in liquidation and discharge of the expenses incurred in the furtherance of the undertaking, it was held that the projector might proceed by bill in chancery against the directors and the provisional committee for the application of the money raised by the deposits in pay- ment of his costs and disbursements on behalf of the company, and for an injunction against their parting with the fund. (;«) 1340. ContribziHo7i beiween joint managers, direct- ors, and provisional' committee^nen. — Where an action was brought against four persons who had acted as managers and directors of a projected railway com- pany, for the recovery of a debt. contracted by them in the carrying out of the project, and they jointly retained an attorney to defend the action upon their own responsibility, and one of the managers was subse- quently compelled by the attorney to pay more than his proportion of the joint expense of defending the action, it was held that he was entitled to an action against his colleagues to recover from them their several proportions of the over-payment by way of contribution to the common liability. {71) If all the members of a provisional committee have not joined in authorizing the same contract, the contribution- is confined to those who incurred the joint liability which has been discharged, and in respect of which the action is brought ; and to determine the s! are that each is to pay, regard must be had to the num- l;er of the original co-contractors, so that, if twelve originally authorized the contract, and two are dead at the time the right of action for contribution arises, the survivors can only be called upon for one-twelfth (m) Tarsons v. Spooner, 15 L. J., {n) Edger v. Knapp, 6 Sc. N. R. ■Ch. 155- 707. Sec. II.] JOINT STOCK COMPANIES. 433 part each, the personal representatives of the de- ceased co-contractors being responsible for the resi- due of the contributory demand. (£>) 134 1. Of the rendering of accounts and of the appropriation of t lie funds. — The managing committee of a projected undertaking are trustees for the share- holders, and liable to account to them for all moneys which have been received for the purposes of the undertaking. (/) One member of the committee is entitled, as against the rest, to an account of the joint property, and of the joint debts and liabilities, and to have the joint property applied in discharge of such debts, {f) 12>A'^' Contracts between a committee of manage- ment on the one hand, and subscribers and share- holders on the other. — The execution by a subscriber of a deed providing that a railway company is to be formed upon certain terms and conditions, and that a certain amount of capital is to be raised, a certain number of shares issued, an act of parliament obtained, and other preliminary proceedings undertaken prior to the incorporation of the company, does not, as we have already seen, make the subscriber so executing the deed a partner with the projectors and managers in carrying out the undertaking. Neither does an agreement to take shares, or the acceptance of an allotment of shares, and payment of a deposit thereon, make the party who has entered into the agreement, or paid the deposit, a partner with the rejectors and managers, until the prescribed capital has been raised, the shares taken, and the con- ditions precedent to the formation and incorporation (0) Batard v. Hawes, 2 Ell. & Bl. 654. 298. (?) Lewis V. Billing, 15 L. J., Ch. {p) Williams v. Page, 24 Beav, 425. III. — 28 434 ^^ff' OF CONTRACT. [Bk. II. Ch. VII. of the company have been accomplished. They stand merely in the position of persons who have offered to become partners in a projected co-partnership, pro- vided it is constituted and brought into operation bona fide in the mode advertised and announced, and not in the position of partners in a present partner- ship, (r) The promoters, and projectors, and mem- bers of the committee of management are conse- quently responsible to the subscribers and share- holders for money advanced, or goods supplied, or work done, or services rendered in furtherance of the project by any one or more of such subscribers by the orders, or at the request, of the members of such com- mittee of management. (/) 1343. Allotment of shares. — The promoters and managers of a railway company are responsible also to a subscriber or applicant for shares, who has received from them letters of allotment of shares or of an interest in the undertaking, and has paid his sub- scription or deposit, for the non-delivery of scrip cer- tificates of shares pursuant to the letters of allotment and the contract in that behalf made. And it has been held that an allotment of scrip and shares in an abortive scheme, which does not correspond with the prospectus and the public advertisements of the pro- jectors, is not a compliance with the ordinary under- taking to deliver shares. (/) A resolution by share- holders, that a certain number of shares shall be at the disposal of the managers, places them at their disposal only as trustees, to be disposed of within the scope of the functions delegated to them in the manner mott (r) Bourne \. Freetli, 9 B. & C. 96. Caldicott v. Griffiths, 8 Exch. 640; 4 M. & R. 518. Wood V. Duke 902. of Argyll, 7 Sc. N. R. 885 ; 6 M. & {t) Walstab v. Spottiswoode, 4 Gr. 928. Rail. C. 321 ; 15 L. J., Q. B. 198. {s) Colley V. Smith, 2 M. & Rob. Sec. II.J joint STOCK COMPANIES. 435 beneficial to their beneficiaries, (it) The managers, in the due fulfillment of their trust, are bound to account to each shareholder or subscriber for the moneys received by them, and to apply the funds in their hands in liquidation of the debts and engage- ments of the company, {x) 1344. Payment of subscriptions and deposits. — - The managers of a projected railway company may sue the subscribers for the sums they have agreed to subscribe, or for the deposits which they have agreed to pay, on receiving an allotment of shares, provided the covenant or contract to pay the subscription or deposit has not been obtained through the medium of any willful and fraudulent misrepresentation or mis- statement, (jy) Where an allottee had applied for shares generally in a projected railway company, and undertook to accept them and pay the deposit, and the directors assigned him shares headed " not trans- ferable," and then sued him for the deposit, it was held that he was not responsible, as his offer must be taken to have been an offer to accept and pay for transferable shares. {£) 1345. Recovery of deposits on the abandonment of the undertaking. — If the scheme has been abandoned, or has not been carried out according to the terms of the prospectus or public announcement of the project- ors and managers, the subscribers who have advanced money or paid deposits on the shares allotted to them are entitled to recover back the amount paid, free from deductions and drawbacks in respect of the («) Pulsford V. Richards, 22 L. J., J., Ch. 140. Ch. 364. York & North Midland v. [y) Duke v. Forbes, i Exch. ,356. Hudson, lb. 529. Aldham v. Brown, 29 L. J., Q. B. 33 ; {x) Cooper v. Webb, 15 Sim. 454. 7 Ell. & Bl. 164. Cridland v. Lord de Mauley, 17 L. J., {z) Duke v. Andrews, 17 L. J., Ex. Ch. 190. Maitland, ex parte, 23 L. 231. 436 LAJV OF CONTRACT. [Bk. II. Ch. VII. expenses that have been incurred by the managers in their attempt to bring the project to bear, (^a) unless the failure or abandonment of the undertaking has been occasioned by the act or default of the plaintiff him- self, or it has been expressly agreed that the money raised by subscription and deposits should be applied in liquidation and discharge of those expenses. ((5) If the managers have by parol agreed to return the deposits in case an act of incorporation is not obtained, and a parliamentary contract and subscribers' agree- ment under seal is afterwards executed, authorizing the directors to expend the deposits in defraying the necessary expenses, the first agreement is not extin- guished by the subsequent contract, if the two con- tracts have not been entered into by the same parties. (<:) When deposits have been put into the hands of a committee with authority to deal with them in a cer- tain way, it is not competent to any one, or more, not being the whole, of the persons who have joined in giving the authority, to revoke it. (d) 1346. Misrepresentation by connnitteemen and vianagers. — Any material mis-statement or misrepre- sentation concerning the actual condition of the pro- jected undertaking, the amount of capital subscribed, and the number of subscribers, or co-adjutors, or co-ad- venturers in the project, is a fraud upon those who have subscribed their money and connected them- selves with the company in reliance upon the pub- (rt) Nockells V. Crosby, 5 D. & R. Clements v. Todd, lb 31. Watts v. 760 ; 3 B. & C. 823. Chaplin v. Salter, 10 C. B. 477 ; 20 L. J., C. P. Clarke. ; Exch. 403. WaLtab v. 43. Baird v. Ross, 25 Law T. R, 34. Spottibwoode, 15 M. & W, 501. Ashpitel v. Sercomb, 5 Exch. 146. Jolmscm I'. Goslett, 3 C. B., N. S,, (r) Mowatt v. Ld Londesborough, 594 ; 27 L. J., C. P. 122. 4 Eli. & Bl. g. {b) Jones v. Harrison, 17 L. J., Ex. {d) Baird v. Ross, 2 Macq. 61. 132. Garwood v. Ede, lb. 2g. Sec. II.] JOINT STOCK COMPANIES. 437 lished statements, and entitles them to avoid the con- tract they have entered into with the projectors and managers, and recover back from them the amount of their deposits and subscriptions, unless they were cognizant of the fraud at the time they took their shares, and voluntarily made themselves parties to a bubble speculation, (e) It is therefore necessary, in preparing prospectuses of joint-stock undertakings, to state nothing on the face of the prospectus but what is strictly true. (/") In an action for the recovery of the deposit paid on an allotment of shares, on the ground that the money was obtained by fraudulent misrepresentation or by false pretenses, it must be shown that the money was actually received by the parties against whom the action is brought, or that it was at their disposal, and that they were parties to the fraud. They are not liable for a fraudulent misrepre- sentation made by the secretary or solicitor of the company without their knowledge or sanction, (^g) 1347. Dissolution of inchoate railway and par- liame7ttary works^ companies — Contribtitories. — Per- sons who act together for the purpose of obtaining an act of parliament for the purpose of incorporating a railway company, and making a railway, are a com- pany or association within the meaning of the 28 & 29 Vict. c. 89, and may be dissolved and wound up by the Court. " All the questions as to the liability of contributories to inchoate railway and parliamentary works' companies, under the winding-up Acts, resolve {e) Wontner v. Shairp, 4 C. B. 404 ; (/) New Bruns. & Canada Rail. 4 Rail. C. 542. Cridlaiid v. Lord de Co. v. Muggeridge, 30 I.. J-, Ch. Mauley, 17 L. J., Ch. 190. Nicol's 242 ; 3 Law T. R.. N. S., 651. case, 3 De G. & J. 440. Hill v. Lane, (g) Watson v. Earl Charlemont, 12 L. R., 11 Eq. 215 ; 40 L. J., Ch. 41. Q. B. 856 ; 18 L. J., Q. B. 65. Buvnside Ship V. Crosshill, L. R., ro Eq. 73 ; v. Dayrell, 3 Exch. 224. 39 L. J., Ch. 550. 438 LAJV OF CONTRACT. [Bk. II. Ch. VII. themselves into two simple questions of fact : first, did the alleged contributory make, or authorize to be made, the contract in respect of which he is called upon to contribute on his account jointly with others.? or, secondly, if any one or more entered into the con- tract on his own or their own behalf, did he agree to indemnify the person or persons contracting in part or in all against the consequences of that contract.''' Those who are liable to pay the debts incurred in the attempt to form the company, who have given the orders, or have concurred in giving them, are the parties to be made contributories ; and no one can lawfully be put on the list of contributories merely by reason of his having agreed to take, or having accepted and become an allottee of, shares, and paid a deposit, {li) A provisional committeeman, who has accepted shares, and paid a deposit, but has done no further act, is not thereby rendered liable to creditors in respect of busi- ness done by order of the mianagers towards complet- ing the projected undertaking, and can not lawfuUv be made a contributory to the debts due to such cred- itors, (z) But, if a provisional committee undertakes the management of the projected company, and gives orders, if, for instance, it appoints a managing com- mittee, and such managing committee acts under the authority of the provisional committee, as their ser- vants and agents, all members of the provisional com- mittee who have concurred in the proceedings, and authorized debts to be incurred by the managing com- (h) Capper, ex parte, 20 L. J., Ch. 190. Bright v. Huttoii, 3 H. L. C. 151. Carrick, ex parte, lb. 671. 341 ; 16 Jur, 695. Cannichael, ex Maudslay, ex parte, lb. q. Barber, ex parte, 20 L. J,, Ch. 12. Clarke, ex parte, lb. 146. Beardshaw, ex parte, parte, lb. 14. Heref, & Merth. Tid. 22 lb. 18. Rail, Co., 4 Law T. R., N. S., 134. {i) Cottle, ex parte, 2 Mac. & Gord. Sec. II.J JOINT STOCK COMPANIES. 439 rnittee, will be liable to be made contributories to the payment of those debts, (^k) The question in every case is not merely what meetings has a committeeman attended, but what acts has he authorized to be done. Attendance at a meet- ing proves in general that the party so attending is a member of the body assembled ; but it proves no more. If any act is done by the meeting, the circum- stances may be such as to warrant the presumption that what was done was the act of every person pres- ent. Such may be the fair inference under some cir- cumstances ; it may be a very unreasonable inference in others; and no one present at such a meeting is bound by any resolution to which he does not expressly or impliedly assent. (/) But all persons who have taken part in the management of the com- pany, who have attended meetings of the managers, and concurred in giving orders for things to be done and for expenses to be incurred, are liable to be made contributories to the debts incurred in carrying such orders into effect ; {nt) and so are all persons who have authorized the managing committee to act for them, and are under an obligation to indemnify such managing committee in respect of expenses bona fide incurred by them.' All persons, also, who are associ- ated together in the furtherance of a common object, who concur in giving orders, or impliedly authorize one another to take all the necessary steps to carry the common purpose into effect, are bound by a well- {k) Tanner, ex parte, 21 L. J., Ch. {m) Pearson's executors, 3 De G. M. ■214. Spottiswoode's case, 6 De G. & G. 252. Norbury's case, 5 De G. M. & G. 37T. & S. 423. Londesborough, ex parte, (I) Roberts, ex parte, 2 Mac. & 23 L. J., Ch. 743. Gord. 194. ' Ante, 440 LAW OF CONTRACT. [Bk. II. Ch. VII. established principle of equity to bear the burden equally, so that, if one alone incurs a necessary expense in the furtherance of the joint undertaking, the others must contribute their fair share of it. («) All persons, also, who have signed a subscribers' agreement or par- liamentary contract, and have covenanted or agreed to pay a certain portion of the preliminary expenses of the project and of the application to parliament for an Act of incorporation, may be properly placed on the list of contributories, although they have never received either scrip or shares, {o) SECTION III. OF MARRIAGE. 1348. Contracts in restraint of marriage are void, as being contrary to the public policy of the lavi^. (/) A covenant or promise, therefore, which restrains a party from marrying at all, unless he marries a partic- ular person, is null and void. (^ ) If the restraint is not to operate for an indefinite period, but only for six years, there must be reasonable grounds to restrain the party for that period, (r) But the law recognizes in a husband a species of interest in the widowhood of his wife, which makes it lawful for him to grant an annuity to his widow, to continue so long only as she remains unmarried, (j-) (?z1 Amsinck, ex parte, 25 Law T. 2234. R., Ch. 136. (r) Hartley v. Rice, 10 East, 23, 24. {0) Bovren, ex parte, 22 L. J., Ch. But a covenant to pay a woman a sum S57. Warwick & Wore. Rail. Co., z« of money, so long as she continues. re, 27 L. J., Ch. 735. sole and unmarried, is not illegal. [p) Baker V. White, 2 Vern. 215. Gibson v. Dickie, 3 ^il. & S. 463. Hartley v. Rice, 10 Ea,t, 24. Bon- (s) lAojA v. Lloyd, 21 L. J., Ch. fieldv. Hassell, 32 L. J., Ch. 475. 596. Newton v. Marsden, 2 Johns. (q) Lowe v. Peers, 4 Burr. 2230 to & H. 356 ; 31 L. J., Ch. 690. Sec. III.J of marriage. 441 1349. Marriage brokerage contracts, or contracts for the payment of money, or the conveyance of prop- erty, or the performance of some act or duty, on the condition of the procurement of a particular marriage, are void, as being contrary to public policy. If, there- fore, a man binds himself to pay a sum of money to another, on condition that he will bring about apar- ticular marriage, the instrument is void {t) whether the condition, or cause or consideration, for the bond or covenant does or does not appear upon the face of it. iji) A bond, given by the husband to the wife's father to induce the latter to give his consent to the marriage, has been held to be in the nature of a mar- riage brokerage contract, and contrary to public policy. {x) And there is no difference between a bond to pay money and a bond to forgive a debt due, or a covenant or agreement to release an obligation, duty, or liability, as an inducement for the consent of parents and guardians. Therefore, where a mother said, " You shall not have my daughter, unless you will agree to release all accounts respecting my expenditure of her money," and the agreement was given, it was held to be within the mischief of a marriage brokerage con- tract, (jk)* (;;) Hall V. Potter, 3 Lev. 411 ; Cole v. Gibson, i Ves. senr., 503. Show. P. C. 76 ; 4 Br. P. C. 145, n ; Booth v. Earl of Warrington, 4 Br. 3 P. Wms. 76. P. C. 163. (u) Collins V. Blantern, 3 Wils. (x) Keat v. Allen, 2 Vern. 558 ; 347. Arundel v. Trevillian, i Ch. Pre. Ch. 267. Rep. 47. Drury v. Hooke, i Vern. {y) Hamilton v. Muhum, r P. 411. Debenham v. Ox, I Ves. senr., Wms. 120; 2 Vern. 652; 1 Salk. 276. Smith V. Aykwell, 3 Atk. 566. 158. ' Marriage brokerage bonds which are not fraudulent on either party are yet void, because they are a fraud on third persons, and a public mischief, as they have a tendency to cause matrimony to be contracted on mistaken principles, .ind without the advice of friends, and they are relieved against as 442 LA IV OF COA' TRACT. [Bk. II. Ch. VII. A lease granted in consideration of the procure- ment of a particular marriage will be set aside, and the estate discharged of the lease, (s) (z) Stribblehill v. Brett, 2 Vern. 446 ; 4 Br. P. C. 145. a general mischief for the sake of the public. See Parsons, C. J., in Boynton v. Hubbard, 7 Mass. 118. In Susan Crawford v. Christina Russell, plaintiff sued to recover of defendant the siun of two thousand dollars and interest, the value of a pianoforte and a gold watch and the expense of the education of plaintiff's eldest daughter, Kate, upon an agree- ment entered into hy the plaintiff and defendant in the year 1S46, under their hands and seals, which substantially read as follows : " That plaintiff should do all she could to aid a marriage between said Jeremiah and said Christina, by her influence and services,'' and in consideration thereof the said defendant faithfully promised and agreed with the plaintiff, in case she became the wife of the said Jeremiah Russell, and outlived him, to pay said plaintiff for her services in this mat- ter two thousand dollars in cash, and to purchase for the plaintiff a pianoforte and a gold watch for her (plaintiff's) eldest daughter, Kate, and to ]iay the expense of her educa- tion to the plaintiff. Mr. Jeremiah Russell was a widower of great wealth, living at that time at Saugerties, in Ulster county. New York. The plaintiff alleged in her complaint that at the request of the defendant she did "so aid the defend- ant, furnished rooms, fire, and light for said Jeremiah and the said Christina to meet from time to time, and did various services for said defendant, and gave her care, skill, diligence, and attention in aid of said marriage, at great loss and expense, and performed her part of said contract, so that after- wards, and on or about the 30th day of October, 1847, the said Jeremiali Russell and tlie said Christina Crawford were law- fully married, and from that time lived together in great happiness and prosperity until 1867, when said Jeremiali Russell died, leaving his widow, the defendant, a large estate amounting to about fifty thousand dollars." Platt Porter, J. : " We are referred to no case arising in our own court where the questions now before us have had adjudication. The questions are elemental, and seem to admit of but little conflict. Two legal questions of this character are presented, upon each ol which the agreement set forth is claimed to be void. First, that the agreement is post obit in its character, and therefore Sec. III.] OF MARRIAGE. 443 1350. Bonds and tinilateral covenants to marry. — If a man of full age binds himself by deed to marry a woman by a day named, he is responsible for the non- void, as being against public policy; and second, that the agreement comes within the definition of brokage of marriage, and is void for the same reason But the learned judge placed his decision to nonsuit upon the other feature of the case, that the agreement in question w?as a marriage brokage contract, and therefore void. This being a novel case in our courts it becomes our duty to examine it in regard to that question. We have said that the case depends upon elementary la^Y. In this respect the civil law and the common law of England are found to differ. The writers upon juris- prudence in this country have generally followed the modern common-law of England. The civil law, as drawn fiom the code of Justinian, allowed contracts of this kind to be made by proxy, by marriage-brokers, match-makers, called prox enctae, who were allowed to receive rewards for their services, like other brokers, to a certain limited extent. Code Just., lib. 5, til. I, p. 16 ; and at an early period of the history of English jurisprudence these prox enctae plied their vocation in that country, and were tolerated. Story's Equity Juris., § 260. The policy of the civil law seems to have been that all aid rendered in encouraging, and in the establishment of, marriages was for the good of the nation, and promotive of public morality, inasmuch as it discouraged fornication, adul- tery, and concubinage; that, therefore agencies by way of match-makers, brokage, and prox enctae, were productive of good rather than of evil results. The policy of English law was that the effect of such agencies and brokage was the encourage- ment of influences of a pernicious tendency by being the occasion of many unhappy marriages, the loss of moral influ- ence of parents over the happiness, due nurture, and education of children, the temptation to the exercise of an undue influ- ence by false and seductive hopes held out to parties induced by the self-interest of brokage agents ; these were regarded as so corruptive in their tendency as to receive condemnation in the law tribunals as being totally void. The first controversy that seems to have arisen in the English courts upon the valid- ity of this character of agreements is the famous case of Hol- land Keene v. Porter, in the sixth year of the reign of William III., reported in 3 Levins, 412 : One Nunne entered into a bond to pay Mrs. Potter _;^5oo in three months after he should be 444 LA W OF CONTRA CT. [Bk. II. Ch. VII. performance of his bond or covenant, although the woman may not be bound by a reciprocal contract to marry him. (a) If the covenantee is ready and willing (a) Atkins v. Farr, i Atk. 287. married to Lady Ogle, a widow of great fortune and honor. A suit was brought on the bond in chancery, and the master of the rolls held the bond to be void. The Lord Chancellor reversed the decree. The case was then taken by appeal to the House of Lords, where, by a majority of that House, the decree of the chancellor was reversed, they holding that agreements of this kind were of a dangerous tendency. Since that case the English courts have with great uniformity held the rule as declared in the House of Lords. After this, such contracts grew more and more into disrepute, and Bacon laid down this doctrine : " It is of such consequence that all mar- riages should proceed from free choice, and not from any compulsion or sinister means, that it hath been held that such interference was a matter indictable." Bac. Abr. tit. iVIarriage and Divorce And in the eighth year of William III., a crim- inal information was filed against one Thorp, and others, for persuading one Edward ISIitchell to marry one Cornelia Hol- ton. 5 Mod. R. 221. Judge Storv says, in his work on Con- tracts (§ 564), that the law considers marriage as a moral and political duty, and all proper restrictions upon freedom of choice, and all agreements tending to impair that mutual love and confidence upon \\hich domestic happiness has its only sure foundation, and which are the only securities for faithfulness and morality in marriage, are stains \\hich it will not permit to rest upon its ermine. But it seems that the ground upon which the courts will interfere in cases of this kind is not upon the ground or idea of damages done to the individual concerned, but upon considerations of public policy ; and "hence," says the same learned judge, "every temptation to the exercise of an undue influence or a seductive interest in procuring a marriage should be suppressed, since there is infinite danger that it may, under the disguise of friendship, confidence, flattery, or falsehood, accomplish the ruin of the hopes and fortunes of most deserving persons, especially females." Eq. Jur., § 261. In the case of Jury v. Hooke (i Vern. 412), Lord Chancellor King said "that this character of agreement was a sort of kidnapping into conjugal servitude, and was in no case to be countenanced." See, also, Fonbianque Sec. III.] OF MARRIAGE. 445 to receive the covenantor as a husband, and the latter neglects to fulfill his contract, he is liable to an action, for it is the duty of the man to go and offer himself to the woman, and not for the woman to go in search of the man. (b) A woman is also as much bound by such a deed or covenant as a man, provided it has been obtained openly and fairly, and with perfect good faith. But, as women are in general peculiarly liable to be deceived and imposed upon in affairs in which their feelings are concerned, such a contract or engagement obtained from a woman is regarded with the greatest jealousy and suspicion, particularly where the man has entered into no corresponding engagement on his part, {c) If such a bond is obtained by means of any misrepresentation or concealment of the circumstances and situation in life of the party to whom it is given it is undoubtedly fraudulent, and may be set aside ((/) Where a bond was given by the defendant, a single lady, which recited that a marriage had been agreed upon between her and the plaintiff, but had been deferred at her request until after the death of [b) Holcruft V. Dickenson, I Freem. {c) Cock v. Richards, 10 Ves. 437. 346. Seymour v. Gartside, 2 D. & R. id) Key v. Bradshaw, 2 Vern, 102. 57- Eq., ch. 6, I § 10; Willard, Eq. Jurisp., 210. The public policy of thus protecting- ignorant or credulous persons from being the victims of secret contracts of this sort is, therefore, clear; and, as Judge Story says, "the surprise is not that the doctrine should have been established in a refined, enlightened, and Christian country, but that its propriety should ever have been made a matter of debate." They are likened to lobby services in tlie legislature. Harris v. Roof's Executors, 10 Barb. 489, If, then, we are right that the doctrine is well-established that such agreements are void as against public policy, all advances of money and services performed must fall within the agreement itself. The result is that the learned judge was right in nonsuiting the plaintiff, and that judgment be given for the defendant, with costs. 446 LAW OF CONTRACT. [Bk. II. Ch. VII. her father, and as a provision for the plaintiff, she bound herself to give him ^1,200, and interest at ^5 per cent., in case she should refuse to marry him on her father's death, or should intermarry with anybody else, and the lady broke her engagement by marrying a third party, it was held that she and her husband were responsible for the payment of the money. () Frost V. Knight, L. R., 7 Ex. (s) Leeds v. Cook, 4 Esp. 257. Sec. III.] OF MARRIAGE. 449 1355- Conditional promises of marriage. — If a man promises to marr)^ a woman if she will come from America to England and marry him, or will do any other particular act or thing, there is a sufficient con- sideration for the promise; and, if the condition pre- cedent is accomplished, if, for instance, the voyage is performed, or the act done, and the woman is ready, and willing, and able to be married to the man, he is responsible for the non-fulfillment of his promise. The validity of conditional promises of marriage will depend upon the reasonableness of the condition and the time limited for its accomplishment. If the marriage is to depend upon the happening of a distant and uncertain event, which may, in all probability, not take place during the lives of the parties, it would be a contract in restraint of marriage. If the condition is a lawful condition, the liability attaches as soon as the condition has been accomplished, {£) If it is stipu- lated that the girl shall have a certain marriage portion, or that the man shall make a certain settlement, the liability upon the contract does not attach until the condition has been accomplished. And, if a reverse of fortune prevents one of the parties from fulfilling the engagement in respect of the portion or the settle- ment, the other is discharged. 1356. Frattdtileni concealment of material cir- cumstances — Misrepresentation and deceit. — It is no answer to an action for a breach of promise of mar- riage to show that the plaintiff at the time of the making of the promise was engaged to marry some one else, and that the pre-engagement was concealed from the defendant, A party is not bound in all cases to disclose such a fact ; but the concealment of {t) Harvey v. Johnston, 17 L. J., C. P. 2q8. III. — 2q 45a LAIV OF CONTRACT. [Bk. II. Ch. VII. it might, under certain circumstances, amount to a fraud, {ji) Neither is a party bound to disclose that at some previous period of his life he was of unsound mind, and had been confined in a lunatic asylum, (x) If a woman, at the time of the betrothmenc, was a woman of loose and immodest character, and ' this was unknown at the time to the man who prom- ised to marry her the latter is entitled, as soon as he discovers her real character, to break off the engage- ment. General reputation of want of chastity must be established in such a case ; {y') or, if particular instances of misconduct are relied upon, they must be fully proved. If the circumstances, whatever they may be, were known to the other contracting party> there is then no fraud or deceit in the matter, and he has no ground for refusing to complete his engage- ment. (,s) -If false representations are made by a girl, or by her friends in collusion with her, as to her cir- cumstances and situation in life, and the amount of her fortune and marriage portion, the fraud is an answer to any action that may be brought for a breach of the promise of marriage, (a) But, if the plaintiff her- self was no party to the fraud, and made no false repre- sentation, and was guilty of no willful suppression of the truth, the defendant can not escape from liability. 1357. Transfer of property by the lady after a promise of marriage. — If, after the mutual promises of marriage have been exchanged, the woman makes any conveyance or disposition of any considerable portion of her property without her intended husband's knovi^ledge and concurrence, this is a deception upon («) Beachey v. Brown, Ell. Bl. & (2) Irving v. Greenwood, I C. & 1'. Ell, 706 ; 2g L. J., Q. B, 105. 350. Young v. Murphy, 3 Sc. 379 ; 3 (j) Baker v. Cartwright, 10 C. B., Bing. N. C. 54. Bench v. Merrick, I N. S., 124, Car. & Kirw. 467. {y) Foulkes v. Sellway, 3 Esp. 236. {a) Wharton v. Lewis, i C. &P. 520. Sec. 1 1 1. J OF MARRIAGE. 451 the latter, which entitles him to withdraw from the engagement as soon as he is made aware of the cir- cumstance. And, if nothing has been said or agreed upon at the time of the betrothment respecting the settlement to be made on the marriage, and the lady insists on making a settlement of her own private fortune to her separate use, free from the dominion and control of her intended husband, the latter is entitled, if he disapproves of the arrangement, to with- draw from the contract, and to say that he will not marry her upon such terms. 1358. Accidents and mishaps altering the condi- tion of either of the. parties. — If, subsequently to the making of a contract to marry, one of the parties by bodily disease becomes unfit for the performance of the most important duty of marriage, the party so unfitted is not thereby entitled to treat' the contract as dissolved, the other party still desiring its perform- ance. But the latter may break* off the engagement ; for if a man, by disease, accident, or mutilation, becomes impotent, he could never maintain an action against a lady for refusing to marry him. {U) 1359. Abandonmezit of the contract. — Parties who have exchanged mutual promises of marriage may, of course, at any time before the contract is carried into effect by the performance of the marriage ceremony, dissolve the engagement by mutual consent. QuEe con- sensu contrahuntur, contrario consensu dissolvuntur. {c) 1360. Breach of promise of marriage. — In an action for breach of promise of marriage, wherein it is laid as special damage, that the defendant debauched (1^) Hall V. Wright, Ell. Bl. & Ell. evidence of exoneration and discharge 763 ; 29 L. J., Q. B. 43. from tlie contract, see Davis v. Bom- (c) King V. Gillett, 7 M. & W. 55. ford, 30 L. J., Ex. 139. Poth. Tr, du. Mar. No. 55. As to 452 LAW OF CONTACT. [Bk. II. Ch. VII. the plaintiff and ruined her character, it would be mis- direction to tell the jury that they might give her damages as a solatium for the injured feelings of her parents and family ; but, where the defendant is a per- son of property, they may take into their considera- tion not only the plaintiff's pecuniary loss in not becoming his wife, but the injury done to her future prospects of marriage, her injured feelings and affec- tions, and the mortification she must suffer in not being able to look her family in the face. In such an action the damages can not be measured by a known stan- dard, as in commercial cases, but the amount is peculi- arly a question for the jury ; and, where no witnesses were called for the defendant, and it appeared that imputations had been cast upon the plaintiff, a person in humble life, and her witnesses, which failed, and the jury gave ^2,500 damages against the defendant, who was a person of property, and a new trial was asked for simply upon the'ground that the damages were excessive, the application was refused, (d) 136 1. Promises of portions and settlements. — A promise to give a girl a specific sum on her marriage, or to pay money to either the intended husband or wife, or settle property upon them, or either of them, in the event of their marrying, creates a binding obli- gation in the eye of the law ; for "marriage is one of the strongest considerations in the law to found a con- tract, gift, or grant." (<:) But the promise must be made by a person of full age, and must not be the expression of a mere desire or wish to make a settle- ment. (/) It must also be authenticated, as we have ((/) Berry v. Da Costa, L. R., I C. L. J., Ch. 365. P 331 ; 55 L- J-. ('■ P. igi- (/) Beaumont v. Carter, 32 Beav. {e) Laverv. Fielder, 32 Beav. i ; 32 586. Sec. III.] OF MARRIAGE. 455 before seen, by a note in writing, signed by the prom- isor or his agent, {g) If, therefore, the husband, prior to the marriage, gives a verbal promise to the wife that he will settle her property upon her, she has nothing to rely upon but his honor ; and, if, after the marriage, he breaks his word, she has no remedy against him. (/?) Subsequent marriage is not part performance of a parol contract in consideration of marriage ; nor will acts of part performance by the party sought to be charged prevent the operation of the statute, (z) But, if a husband writes a letter prom- ising to make a settlement upon his intended wife, or a father, by a letter, promises " to give such a fortune with his daughter to one who shall marry her, " this is a sufficient compliance with the requirements of the statute. But the promise must be an absolute prom- ise, and not dependent upon conditions and contingen- cies remaining unaccomplished. (/§) To an action upon a covenant made by the d^endant in considera- tion of his daughter's marriage, a plea that the mar- riage was null and void by reason of the impotence of the husband, without stating that it had been avoided by the sentence of any court, or that either of the parties had elected to treat it as void, is a bad plea. (/) 1362. Fraudtdent representations by relations to bring about a marriage. — Where a mother, who was the absolute owner of certain property, heard her son (g) Ante. Randall v. Morgan, Williams v. Williams, 37 L. J,, Ch. 12 Ves. 73. Bawdes v. Amherst, 854. Pr. Ch. 404. Barkworth V. Young, 26 («) Caton v. Caton, L. R., I Ch. L. J., Ch. 157. Caton v. Caton, L. 137 ; 35 I.. J., Ch. 292. R.2H.L. 127; 36 L, J., Ch SS6. {k) Bird v. Blosse, 2 Ventr. 361. \Ji) Montacute v. Maxwell, i P. Moore v. Hart, i Vern. no. Alt v. Wms. 620. Caton v. Caton, L. R., i Alt, 4 GifE. 84 ; 32 L. J., Ch. 52. Ch. 137 ; 35 L. J., Ch. 292. But see (/) Cavell ,. Prince, L. R., I Ex. 246 ; 35 L. J., Ex. 162. 454 ^--Jff' OF CONTRACT. [Bk. II. Ch. VII. declare to his proposed wife and her guardians, that she (the mother) was only tenant for life of the prop- erty, and that the remainder was limited to him after her death, and the mother was privy to the execution of a deed, whereby the son proposed to settle the property, on her death, upon the issue of the marriage, and made no objection to the arrangement, and it afterwards appeared that the mother was not tenant for life, but the absolute owner of such property, and that there was no limitation of it to the son after her decease at the time of the execution of the settlement, the Court of Chancery ordered her to make good the settlement, and execute a conveyance of the property, and clothe the son with the interest which she per- mitted him to represent that he had at the time of the conclusion of the marriage. {711) If, therefore, the relations and friends of parties proposing to be married pretend to settle estates upon them, or to make a provision for them and the children of the mar- riage, and the nuptials are celebrated upon the faith of such settlements or provision, and under the belief that they have been duly made, and the transac- tion afterwards turns out to be a cheat, the court will compel the parties who have been guilty of the fraud to make good that which they pretended to do. (;/) But a representation concerning the fortune, or cir- cumstances, or prospects of a party about to be mar- ried, by a relation who does not at the time know that liis statement is untrue, and who does not make it fraudulently, and with intent to deceive, will not bind him in equity to make it good. The transaction must amount to a fraud to warrant the interference of the (m) Hunsden v. Cheyney, 2 Vern. (ti) Beverley v. Beverley, lb. 133. 150- Prole V. Soady, 29 L J., Ch. 721. Sec. III.] OF MARRIAGE. 455 court, or there must be some writing signed by the party, amounting to a promise to make good the repre- sentation. {0) 1363. Ante-nuptial settlements by women engaged to be married may be made with the knowledge and concurrence of the intended husband. If the woman is in trade, she may convey her stock-in-trade to trust- ees, to enable her to carry on the business separately from the husband ; and, if the latter does not inter- meddle with the business, the stock-in-trade will not be liable to be seized for his debts, (^p) If the woman is a minor, no deed executed by her without the sanc- tion and authority of the Lord Chancellor can bind lier, nor can she confirm or ratify the deed after she comes of age, {q) although the deed, if executed by her husband, will be binding upon him. If she neg- lects to inform her intended husband of her intention to make the settlement, it will in general be considered to have been made in fraud of his marital rights; and the court will set it aside, {r) A settlement made by a widow of certain property upon the children of a former marriage, during the pendency of a treaty for a second marriage, is fraudulent and void as against the second husband, if he was not informed of the circum- stance prior to the celebration of the nuptials, (.y) But, if a widow has done nothing more than make a fair and reasonable provision for her children, such as [p) Merewether V. Shaw, 2 Cox, 124. (r) Howard v. Hooker, 2 Ch. R. 44. Evans v. Wyatt, 31 Beav. 217. Lance v. Norman, lb. 41. Prideaux* (/) Jarman v. WoUoion, 3 T. R. v. Lonsdale, I De G. J. & S. 433. ^18. Haslington v. Gill, 3 Doug. Downes v. Jennings, 32 Beav. 290 ; 32 415. Dean v. Brown, 8 D. & R. 95 ; L. J., Ch. 643. Carlton v. Earl of 5 B. & C. 336. Settlements of goods Dorset, 2 Vern. 17. Goddard v. and chattels require registration. Snow, Russ. 485. Chambers v. Eowler V. Foster, 28 L. J., Q. B. 210. Crabbe, 34 Beav. 457. Ante. (j) England v. Downs, 2 Beav. (?) 37 & 38 Vict. c. 62, a. 2. 529. 456 LAW OF CONTRACT. [Bk. II. Ch. VII. every mother in her situation would morally be bound to make, it has been said that there is no fraud in the case, and no ground for setting aside the settlement. (/) If the settlement has been made prior to the treaty of marriage, there is no ground for impeaching it. And, if, during the betrothment, the woman announces her intention of making the settlement to her intended husband, and the nuptials are celebrated, the settlement will stand good, (tt) A husband has no right to disturb a secret settlement made by the wife pending the treaty for the marriage, provided he has by his conduct before marriage put it out of the power of the wife effectually to make any stipulation for the settlement of her property by rendering retire- ment from the marriage on her part impossible. Thus, where a man seduced a girl during the betrothment, and brought her to his house to cohabit with him, and the girl during the cohabitation made a settlement of her own fortune to the separate use of herself for life, with remainder to her children in equal shares, to the exclusion of any future husband, and was subsequently married to the man with whom she had cohabited, the court refused to set aside the settlement, saying that the woman committed no fraud upon the hus- band if when placed under such circumstances, she took the only means she had left her of protecting herself (x) 1364. Ante-miptial settlements by intended hus- t^and and wife. — Property intended to be settled is generally, prior to the marriage, conveyed to trustees, to {i) Hunt V. Matthews, i Vern. 408. 34 ; 2 Br. C. C. 350. St. George v. Doe V. Lewis, 11 C. B. 1035. But Wake, I Myl. & K. 6.17. Cotton v. see, per Romilly, M. R., Downes v. King, 2 P. Wms. 674. Blithe's case, Jennings, 32 Beav. 290 ; 32 L. J., Oil. 2 Freem. gi. 643, 646. (x) Taylor <. Pugh, i Hare, 608,. («) Strathmore v. Bowes, 2 Cox, 616. Sec. III.] OF MARRIAGE. 457 be ho] den by them, either for the separate use of the wife, free from the control of the husband, or for the use of the husband and wife jointly, and subsequently of the children of the marriage, with ultimate limita- tions and provisions, in case there should be no issue. All ante-nuptial settlements, made bona fide in con- templation of the marriage, are good, both against the husband, and his creditors, and all subsequent pur- chasers of the property settled, (^y) Therefore, when- ever it is wished to secure a provision for the wife and children which shall remain unaffected by the subsequent insolvency of the husband, the arrange- ments should be made before marriage, as great diffi- culties are likely to interpose themselves in the way of an effectual settlement after marriage. If a general power of revocation is reserved in a settlement of realty, or if the exercise of such a power is made to depend upon the consent of persons under the influ- ence and control of the husband, the settlement can not be supported against creditors nor against subsequent purchasers. If the husband reserves to himself the power of charging the land to " the full value, "this reservation is tantamount to a general power of revo- cation, and invalidates the settlement, {z) But powers to sell and exchange lands, and re-invest moneys and securities with the consent of tiustees, and the usual powers of charging lands to a moderate amount, given bon&fide, will not defeat the settlement. If a settlement is made by parties intending to marry, and who afterwards marry, the settlement can not be revoked before marriage by the intended husband and wife without the consent of the trustees and all the (^) Campion v. Cotton, 17 Ves. (z) Tarback v. Marbary, 2 era. 261. 510. 45S LAW OF CONTRACT. [Bk. II. Ch. VII. parties to the settlement. («) A marriage settlement made in London in tiie Scotch form by parties intend- ing to be married, one of whom is at the time domi- ciled in Scotland, will be construed in England according to the law of Scotland, {b) If the marriage on which the settlement is founded is void, the settle- ment is void likewise, (r) 1365. Marriage settlements by infants. — If both the parties to a marriage settlement are infants, the settlement is entirely nugatory, unless it has been made under the sanction and with the authority of the Lord Chancellor, pursuant to the provisions of the 18 & 19 Vict. c. 43; nor can the parties coafirm the settlement after they come of age. (flf) If the male party is of age, and the female party under age, all the leasehold property and general personal estate of the female infant comprised in the settlement will be bound thereby, because such personal estate becomes by the marriage the absolute property of the husband, and the settlement is, in effect, a settlement by the intended husband of the property he is about to acquire by the marriage ; but the real estates of inheri- tance of the female infant are not bound by the settle- ment, as she has no power of disposition over them dLiring her minority. The courts, however, will not per- mit the husband to aid her in defeating the settlement, and alienating or disposing of the property ; and her act alone during coverture would be ineffectual for the purpose. If she survives the husband, her power over her real estate is the same as if no settlement had ever been made. If the husband survives, he holds (a) Page v. Home, 17 L. J., Ch. 200. 30 L. J., Ch. SS4. {b) Duncan v. Canaan, 23 L. J., Ch. (c) Chapman v. Bradley, 33 Beav. 265. Ai to covenants to settle after- 65. acquired property, see Gray v. Stuart, (d) 37 & 3S Vict. c. 62, s. 2. Sec. Ill.J OF MARRIAGE. 459 such real property for his life, if he had issue by the wife born during the coverture which might by possi- bility inherit the estate as her heirs; and on his death it descends to the wife's heir-at-law, whatever may be the terms and provisions of the settlement, {e) The 18 & 19 Vict. c. 43, renders valid a post-nuptial settle- ment of an infant's estate made with the approbation of the Court of Chancery. (/) 1366. Setilemejiis of after-acquired property. — A covenant by the husband alone to settle all property which may accrue to the wife during coverture does not extend to property left to the wife to be at her absolute disposal, free from the control of her husband. (^g) But if the wife, or the husband and wife, before marriage, have entered into a covenant of this descrip- tion, the husband is responsible for its fulfillment ; and such a covenant may be specifically enforced ; {Ji) but it does not bind property settled to the separate use of the wife, so that she has no power of disposition over it, if) nor property bequeathed to husband and wife jointly. (/^) And, if the covenant to settle the after-acquired property of the wife is on the part of the husband only, the wife is not bound by it. (/) Such a covenant is construed to apply only to property acquired during the coverture, although the words " during the coverture " are not inserted in the cove- nant, {ni) (i) Simson v. Jones, 2 Russ. & M. {h) Milford v. Peile, 2 W. R. i8i. 376. Trollope v. Linton, i Sim. & Butcher v. Butcher, 14 Beav. 222. Stu. 485. Stamper V. Barker, 5 Mad. Peachey on Settlements, 526. 164. Milner v. Ld. Harewood, 18 (;') Coventry v. Coventry, 32 Beav. Ves. 259. 612. {/) Powell V. Oakey, 34 Beav. (/■) Edye v. Addison, i H. & M. 575. 781; 33 L.J., Ch. 132. {g) Travers v. Travers, 2 Beav. 179. (Z) Young v. Smith, 35 Beav. 87. Ramsden v. Smith, 2 Drew, 302. {in) Carter v. Carter, L. R., 8 Eq. 551 ; 39 L. J., Ch. 268. 460 LAJV OF CONTRACT. [Bk. II. Ch. VII. 1367. Post-mtptial settle^nents by the husband of his own property, or by the husband and wife, of the wife's property, are valid as between the parties to them ; {11) but they will not prevail over the claims of subsequent purchasers of the settled property, although they bought with knowledge of the settle- ment, ((?) unless it has been made pursuant to an agree- ment in writing, (/) entered into with the wife, or her guardians, prior to the marriage, or unless the husband has surrendered his interest in the wife's estate for the sole and exclusive benefit of the wife during cover- ture, iq) Nor will they prevail over the claims of creditors, if it appear that the husband was largely indebted at the time he made it. (r) If the debt of a creditor, by whom a voluntary settlement is impeached, existed at the date of the settlement, and it is shown that his remedy is defeated or delayed, it is immaterial whether the debtor was or was not solvent after the making of the settlement. But, if a voluntary settle- ment is impeached by a subsequent creditor whose debt was not contracted at the date of the settlement, it must be shown that the necessary result of the set- tlement was to delay, hinder, and defraud the credi- tors, in which case the law will infer that the settle- ment was made with that intent ; {s) and, although a husband may not be in debt at the time he makes the settlement, yet, if the settlement is made long after (;/) Merryweather v. Jones, 4 Giff. (/) Goldicutt v. Townsend, 2S B-eav 503. 445- (0) Ante. Goocli's case, 5 Co, 60, {q) Hewison v. Negus, 22 L. J., Ch. ii. Evelyn v. Templar, 2 Br. C. C. 655. 14S. Doe V, Manning, ante. Pulver- (;-) Took v. Tuck, 12 Moore, 435. toft V. Pulvertoft, 18 Ves. S4, Buckle Townsend v. Windham, 2 Yes. sen. V. Alitchell, lb. no. Johnson v. Le- 11. Anie. gard, 6 M. & S. 60. Butterfield v. is) Freeman v. Pope, L. R., 5 Ch. Heath, 22 L. J., Ch. 270. Peter v. 538; 39 L. J,., Ch. 6S9. BoUand, ex NichoUs, L. R., II Eq. 391. parte, L. R., 7 Ch. 24. Sec. III.] OF MARRIAGE. 461 marriage, and not in pursuance of any agreement to make a settlement prior to the marriage, nor in con- sequence of an accession to tlie wife's fortune, and tiie husband becomes indebted to any considerable extent immediately afterwards, the settlement would be con- sidered fraudulent. But it will be otherwise if the husband received property from the wife at the time of the marriage, and made the post-nuptial settlement as a fair and equitable provision for her, he being at the time in solvent circumstances; (^') or if the settle- ment contains a provision for the payment out of the settled property of the husband's debts, (u) If the husband, after marriage, conveys his furniture, stock, and moveables, to trustees, for the use of his wife and children, and remains, notwithstanding such convey- ance, the apparent possessor and owner of the prop- erty, the conveyance so made is prima facie a fraud, as regards creditors, (^x) But the possession by the husband and wife of property, stock-in-trade, and fur- niture, limited to the separate use of the wife before marriage, is no badge of fraud, and does not render it liable to be seized for the husband's debts, {y^ Where an attorney, being in insolvent circumstances, assigned the good-will of his business in consideration of a sum of money paid down, and an annuity, secured by bond, to be paid to his wife for life, with remain- der to himself for life, it was held that the settlement of the annuity was void as against creditors. " This," observes Wood, V. C, "is in effect a contract by which the debtor is making sale of his property by (/) ^^ Hanlon, 23 Law. T. R. 212. {x) Ante. Arundel v. Phipps, 10 Lush V. Wilkinson 5 Ves. 384. Bat- Ves. 139. tersbee v. Farrington, I Svvanst. 106. {y) Jarman v. Woolloton, 3 T. R. Holloway v. Millark, i Mad. 419. 618. Cadogan v. Kennfitt, 2 Cowp. jSIuna V. Wilsmore, 8 T. R. 529. 436. Haselinton v. Gill, lb. 620, n. ; (a) Gorge v. Milbanke, g Ves. 194. 3 Doug. 415. 463 LAW OF CONTRACT. [Bk. II. Ch. VII means of a covenant that he will abstain from carry- ing on business, and taking a settlement of the pur- chase-money upon his wife for life for her separate use, with the immediate remainder to himself for life, the whole object plainly being to obtain the benefit of the entire property for his own use and advantage." {s) An ante-nuptial settlement is voluntary so far as it is made in favor of collaterals, {a) 1368. Post-nuptial settlements in fulfillment of an ante-nuptial contract ill writing- (J?) will prevail against the claims both of creditors and purchasers, (f) And so also will a settlement made by the husband in con- sequence of the relinquishment by the wife of her jointure, or dower, or property over which she has a power of disposition or appointment, (^cf) or made in consideration of a new portion, or addition to her portion, to be given to the wife by her relations, {e) But the amount and value of the property so settled must not be greatly disproportioned to the value of the consideration received by the husband, or the transaction will, if the husband is indebted at the time, or shortly afterwards becomes insolvent, be con- sidered fraudulent, and' the husband's creditors will be let in. A wife may contract in equity with her hus- band for a post-nuptial settlement upon her of her own property for a valuable consideration, and the husband may be a purchaser from the wife where prop- erty belonging to her is the subject of the settle- (g) Neale V. Day, 28 L. J., Ch. 45. (d) AVavd v. Shallett, 2 Ves. sen. French v. French, 6 De G. M. & G. 17. Anon., Pre. Ch. 102. Cottle >. 102. Fripp, 2 Vern. 220, (a) Smith V. Cherril, L. R., 4 Eq. (<■) Russel v. Hammond, I Alk. 13 ; 3qO ; 36 L. J., Ch. 738. lb. igo. Colvile v. Parker, Cro. Jac. (l>] Goldicutt V. Townsend, 28 158. Ramsden v. Hylton, 2 Ves. sen. Beav. 445. 30S ; lb. iS. Jones v. Marsh, Ca',es {c) Dundas v. Dutens, i Ves. jun. Eq. Talbot, 64. Wheeler v. Caryl, iq6. Amb. 121. Sec. III.] OF MARRIAGE. 463 ment, so that, if the settlement is a bargain for value between the husband and wife, it is sustainable against creditors. (/) The 1.8 & 19 Vict. c. 43, renders valid a post-nuptial settlement of an infant's estate, made with the approbation of the Court of Chancery, i^g) 1369. Of the wife's right to a post-nuptial settle- ment. — If, after the marriage, the wife is unable to live with the husband in consequence of his misconduct, she has a right, as against him, to have her own prop- erty and unrecoveredchoses in action settled upon her. iji) She has a right, also, in certain cases, to a settle- ment upon her of her own property, as against the assignees of the husband in bankruptcy, and even against a particular assignee claiming under an assign- ment from both the husband and wife for a valuable consideration, (z) 1 370. Contracts in fraud of settle-merits ajtd prom- ises of marriage portions. — Any private underhand agreement or treaty entered into for the purpose of infringing or defeating an open, public agreement, made in consideration of marriage, is fraudulent and void. (/^) A bond, for example, given by the husband to return part of his wife's marriage portion, without the privity of his own parents and guardians, and of all the parties to the treaty of marriage, is fraudulent and void, and can not be enforced against him. If the father, or any other relation or friend of the hus- band or wife, who has agreed to make a settlement of property upon one or both of them on their marriage, ;/) Hewison v. Negus, 22 L. J., Gord. 603. Dimkley v. Dunkley, 2 Ch., 655. Harman v. Richards, lb. De G. ilac. & G. 390. Re Kincaid, 1066. 22 L. J., Ch. 395. (g) Powell V. Oakley, 35 Beav. {k) Kemp v. Coleman, i ,Salk. 156. 575, Turton v. Benson, 2 Vern. 764. Pit- (/«) Barrow v. Barrow, 24 L. J., Ch. cairn v. Ogbourne, 2 Ves. sen. 380 ; I 198. Ves. sen. 277. (i) Scott V. Spashett, 3 Mac. & 464 LAJV OF COh'TRACT. [Bk. II. Ch. VII. or to give a marriage portion to the wife, takes a bond or covenant from either the husband or wife, or both of them, to repay the whole or any part of such mar- riage portion, or to re-convey an estate granted or intended to be granted, the contract is void, as being a fraud upon the parties to the treaty of marriage, and upon the parents and guardians who had a right to give or withhold their consent to the marriage. (/) If the relations of a woman furnish her with money, in order that she may appear to have a considerable marriage portion, and secretly take from her a bond or covenant to repay the money advanced after her marriage, the bond is void. (;;/) So, if a relation or friend of the husband advances him money, or clothes him with the apparent possession of property, to enable him to make a show of wealth in order to obtain a corresponding portion with his wife, and takes from such husband a bond or covenant for the repayment of the money advanced, or the surrender of the prop- erty intrusted to him, the bond or covenant will be void, and the husband will be entitled to hold the property for his own use, notwithstanding that he was himself a party to the deceit. {11) Where a widow, on the marriage of her son, agreed with the intended wife's relations to make a settlement on him and his wife and the children of the marriage, of certain lands which she had in jointure, but she at the same time obtained a secret agreement from her son to pay her an annuity, it was held that this agreement was fraud- ulent and void. {0) If a man about to be married is ,7) I Eq. Abr. 88, E. 3. Peyton v. (m) Gale v. Lindo, i Vern. 475. Bladwell, i Vern. 240. Scott v. Scott, (») Thompson v. Harrison, i Cox, I Cox, 367. Palmer v. Neave, II 346. Webber v. Farmer, 4 Br. P.O. Ves. 165. Morrison v. Arbuthnot, 8 170. Br. P. C. 247 ; I Br. Ch. C. 548, n. (0) Lamlee v. Hanman, 2 Vern. 466, 499. Sec. III.] OF MARRIAGE. 465 largely indebted, and a relation comes forward and pays off his debts in order to enable him to gain the consent of the parents of the lady to the match, and at the same time takes a bond from the lady and her intended husband to pay him a certain sum within a specified period from the celebration of the nuptials, the bond is a fraud upon the parents, and the husband and wife are entitled, after the marriage, to set it aside, although they were both parties to the fraud. (/) Joseph Montefiori being engaged in a treaty of marriage, his brother Moses, to assist him in his designs, and represent him as a man of fortune, gave him a note for a large sum of money as the balance of accounts between them, which balance he (Moses) acknowledged to have in his hands, though in truth no such balance nor anything like it existed. After the marriage had been celebrated, Moses reclaimed the note as having been given without consideration ; but the court held that Joseph was entitled to the note, and that Moses should not be permitted to take advantage of his own fraud, although his brother was in collusion with him. (^) Upon the same principle, creditors who conceal wholly, or in part, debts due to them from a man about to be married, and represent that he is not indebted, or is only indebted to them to a less amount, in order to serve the turn of their debtor and get the parents of the woman to consent to the marriage, will be bound by such fraudulent repre- sentations, and will be barred from all remedy for obtaining payments of their debts, just as effectually as if they had executed a release under seal, (r) {f) Redman v. Redman, i Vern. Ch. 531. Maunsell v. White, 22 Law 347. T. R., H. L. 293. {q) Montefiori v. Montefiori, i W. (r) Neville v. Wilkinson, i Br. Ch. Bl. 363. Money V. Jordan, 21 L. J., 543. Eastabroolce v. Scott, 3 Ves. 460 ; 16 Ves. 125. 466 LAJJ' OF CONTRACT. [Bk. II. Ch. VIl. 1 37 1. Effect of adtdtery on marriage settlements. — If a marriage settlement is valid when executed, the wife does not, according to the common law, lose by reason of adultery any benefit the settlement confers upon her ; {s) but the 20 & 21 Vict. c. 85, s. 45, ena- bles the Divorce Court, when it has pronounced sen- tence of divorce by reason of the adultery of the wife, to deal with the settled property of the wife. {£) 1372. Costs of viarriage settlemefits. — The usage of the profession is " that the lady's solicitor shall pre- pare the settlement and that the gentleman shall have the privilege of paying for it." (?/) 1373. The marriage contract, its nattire and requisites. — Marriage, as understood in Christendom, is the voluntary union for life of one man and one woman, to the exclusion of all others, (x) The mar- riage contract itself is founded on the consent of the parties, and ranges amongst that class of contracts called consensual contracts. Consent of parents and guardians vi^as, by the 26 Geo. 2, c. 33, and 4 Geo. 4, c. 1 7, made essential to the validity of all marriages of minors by license (not being widov^^ers or widows, who were deemed to be emancipated), so that, after a marriage had been actually celebrated and consumma- ted, and followed by the procreation of children and a lengthened cohabitation, it might be annulled by the ecclesiastical court, and declared void ab initio, by reason of the want of such consent prior to the cele- bration of the nuptials, (jj/) But this was found to be productive of so much mischief that these Acts (j) Evans v. Canington, 30 L. J. (ti) Helps v. Clayton, 17 C. B. N. Ch. 364. S., 553 ; 34 L. J., C. P. I. (0 Stone V. Stone, 3 S. & T. 372. {x) Hyde v. Hyde, L. R. I, P. & M. Laurence v. Laurence, lb. 207. And 130 ; 35 L. J., P. & M. 57. see the 23 & 24 Vict. u. 144, s. 6. (y) Harrison v. Southampton, 22 L. J., Ch. 722. Sec. III.] OF MARRIAGE. 467 were repealed ; and it has now been enacted that, after the marriage has been actually solemnized, it shall not be necessary in support of such marriage to give any proof of the residence of the parties previous to the marriage within the district where the marriage was solemnized, or of the consent of any peisson whose consent to the marriage is required by law, and that no evidence shall be given to prove the non-residence or non-consent in any suit touching the validity of such marriage, (^z) 1374. Of the age of consent. — The age of consent to marriage is fourteen in males and twelve in females. If, however, a boy under fourteen, or a girl under twelve, actually go through the form of marriage, such marriage is not absolutely void ; it is inchoate and imperfect only. If, on arriving at the age of consent, they cohabit, or continue a cohabitation previously begun, the marriage is a good marriage, by reason of the subsequent ratification of the contract. " The time of agreement or disagreement when they marry infra annos nubiles is, for the woman, at twelve or after, and for the man, at fourteen or after ; and there need be no new marriage if they so agree. But disa- gree thev can not before the said ages ; and then they may disagree and marry again to others without any divorce ; and, if they once after give consent, they can never disagree after." {a) 1375. Presinnption of marriage. — Where the form of marriage has been gone through, it will be presumed that all the requisites of a valid marriage have occurred until the contrary be shown ; and. (z) 6 & y Wm. 4, u. 85, a. 25. 4 c. 56, s. 3. 19 & 20 Vict. c. 119, s. Geo. 4, c. 76, ss. 16, 26. R. V. Bii- 17. mingham, 8 B. & C. 29. 7 & 8 Vict. (a) Co. Litt. 79 a, 79 b. i Rolle Abr. 341. 468 LAW OF CONTRACT. [Bk. II. Ch. VII. where there has been cohabitation as man and wife, the law presumes marriage until the contrar}^ be proved, (b) 1376. Void marriages. — All marriages celebrated after the 31st of August, 1835, between persons within the prohibited degrees of affinity are absolutely void, (c) If a widower, therefore, goes through the marriage ceremony with the sister of his deceased wife, or a widow with the brother of her deceased husband, the ceremony is a mere form, and will be productive of no legal marriage between the parties, {d^ It has been enacted that, if any persons knowingly and willfully intermarry in any other place than a church or chapel, or registered building, or the registrar's office, without license, or due publication of banns, or due notice to the superintendenc-registrar, or without certificate of notice duly issued, or in the absence of a registrar or superintendent-registrar, where the presence of a regis- trar or superintendent-registrar is necessary, the mar- riage of such persons shall be absolutely null and void. {e) But it must be shown that both parties have know- ingly and willfully disregarded the provisions of the Marriage Acts. If the disobedience and misconduct are on one side only the marriage is not invalid. (/") And by the 19 & 20 Vict. c. 119, s. 17, it is enacted that, after any marriage shall have been solemnized under the authority of the 6 & 7 Wm. 4, c. 85, the i A'ict. c. 22, and the 3 & 4 Vict. c. 72, it shall not be necessaiy in support of such marriage to give any proof that the registered building in which any mar- (b) Sichel V. Lambert, 33 L. J., C. 4, c. 85, s. 42. Reg. v. Milli?, 10 CI. P. 137 ; 15 C. B., N. S., 7S1. & Fin. 534 ; 7 Jur. 911. Catherwood (c) 5 & 6 Wm. 4, c. 54. V. Caslon, 13 M. & W. 261. {d) Reg. V. Chadwick, II Q. B. (/) Wright v. Khvood. I Curt. 49, 173, 205 ; 15 C. E., N. S., 781, 662. Dormer v. Williams, lb. 874. (e) 4 Geo. 4, t. 76, b. 22. 6 &7 Wm. Sec. II.] OF MARRIAGE. 469 riage may have been solemnized had been certified as a place of religious worship, or that it was the usual place of worship of either of the parties, nor shall any evidence be given to prove the contrary in any suit touching the validity of the marriage. I377> Publication of banns and celebration of marriage in a false name. — If banns have been pub- lished in a false name, with the knowledge of both the parties to the marriage contract, for purposes of fraud- ulent concealment, the marriage will be invalid ; {£) but no court of justice, ecclesiastical or civil, will lend its aid to enable a man who has concealed his true name at the time of the publication of the banns, or has purposely procured the banns to be published in false names, without the knowledge of the woman he was about to marry, to turn round upon her and annul the marriage and bastardize his children on the ground that he had knowingly and willfully evaded the provisions of the Marriage Acts. Thus, where James Carpenter, being about to marry Susan Spen- cer, procured the banns to be published in the names of James Carpenter and Agnes Watts, and she was married in the name of Agnes Watts, but she did not know, until after the marriage had been solemnized and consummated, that the banns had been published in a wrong name, and that she had been married in a wrong name, it was held that she was lawfully married, notwithstanding the misnomer, {fi) If one of the parties to the marriage contract has assumed a false name and description, and procured the publication {g') Midgley v. Wood, 30 L. J., P. (/«) Rex. v. Wroxton, 4 B. & Ad. & M. 57. It must be shown that both 640; i N. & M. 712. Rex. v. Billings- parties knowingly and willfully con- hurst, 3 M. & S. 257. Pougett v. curred. Gompertz v. Kensit, L. R., Tomkyns, lb. 264 n. 13 Eq. 369 ; 41 L. J., Ch. 382. 470 LAIV OF CONTRACT. [Bk. II. Ch. VII. of the banns and the celebration of the marriage in such false name, for the purpose of concealing his or her real estate and condition in life, the other party who has been deceived, and who has thus been induced to go through the marriage ceremony with a person who is substantially a different person from what was thought and expected at the time, is entitled to a declaration of the nullity of the marriage from the ecclesiastical court, (z) If the error is not a mere error nominis, or misnomer, but an error de corpore, or de persona, the contract is voidable as to the party who has been deceived, from want of consent ; but, if it is a mere misnomer, and the party has married the person that he or she all along intended to marry, the mere verbal mistake will not suffice to invalidate the marriage, {k) Numerous cases have occurred where, in the publication of banns, there has been a partial departure from the true name, and the marriage has, notwithstanding, in the absence of fraud, been held to be valid on the ground that the name, though incor- rect, designated the right person. (/) 1378. Marriage by license in a false name is not of the same importance as marriage by banns in a false name. A mere misdescription or misnomer of the parties in the license will not avoid the marriage, provided the incorrect name represents the right per- son, (w) But, if any fraud or intentional deception has been practiced with the knowledge and connivance of both parties upon the ordinary, " if, for instance, a license were obtained for one person with the inten- (j) Frankland v. Nicholson, 3 M. & Rex v. Burton-on-Trent, 3 M. & S. S. 261, 11. Midgley v. Wood, 30 L. 538. J., P. & ir. 57. (/) Sullivan v. Sullivan, cited Bevan (k) Clowes V. Clowes, 3 Curt. 190. v. M'Mahon, 30 L. J., P. & M. 71. (to) Bevan v, M'Mahon, tit sup. Sec. II.] OF MARRIAGE. 471 tion that it should be used for another, such a license would not be valid." (71) 1379. Fraudulent celebration of a sham marriage. — A party can not avail himself of his own fraud to annul an apparent marriage. If a man has imposed a pretended clergyman and a supposititious license upon a young unmarried woman, the court will not at his instance annul the apparent marriage. {0) If persons, professing to marry according to the rites of the Church of England, knowingly or willfully consent to, or acquiesce in, the solemnization of such marriage by any person not being in holy orders, the marriage is null and void. (/) The law of the country where a marriage is solem- nized does not always determine the validity of the marriage. If foreigners domiciled abroad come to Eng- land and get married in conformity with English law, the marriage will be a valid marriage here, though it be null and void by the law of France. (•^) A marriage cele- brated in France, on the other hand, may be valid in this country, though it is invalid according to French law. (r) Whenever any attempt is to be made to invalidate a marriage, parties must not slumber over their rights ; for " everything," observes Sir William Scott, " is to be presumed in favor of a a matrimonial union which has produced children, and united parties by a long cohab- itation ; such an union is not to be dissolved, unless by some pressing obligation of law." {s) 1380. Of the husband^s right to rents and profits ^f the wife's lands. — The husband is so far master of (k) Lane v. Goodwin, 4 Q. B. (q) Simonin v. Mallac, 29 L. J., P. 366. & M. 97. {o) Hawke v. Corry, 2 Hag. Con- (r) Este v. Smith, l8 Beav. 121. sist. 288. (.f) Diddear v. Faucit, 3 Phil. 581. (p) 4 Geo. d.. c. -6, s. 22 Piers v. Piers, 2 H. L. C. 367. Field's Mar.,&c., lb. 48. 472 LAW OF CONTRACT. [Bk. II. Ch. VII. the estates of freehold and inheritance belonging to the wife at the time of her marriage, and not settled to her separate use, as to be entitled to receive the profits of them during his life, and to sue upon all covenants running with the land entered into with the wife or her ancestors; but he can not dispose of the estates, or convey them away, except for the joint lives of himself and his wife, (/) without the concurrence of the wife, who must execute the deed of conveyance and make the prescribed acknowledgment thereof before properly appointed officers, a certificate of that acknowledgment being filed of record in the Court of Common Pleas. (?^) But the marriage operates as a gift in law to the husband of all the wife's chattels real, or leasehold estates; also of all estates by stat- ute merchant, statute staple, and eligit. The husband may, consequently, sell them or mortgage them without the sanction or concurrence of the wife. Fie may also forfeit them ; and they may be extended and sold for his debts, {x) The husband is entitled to the profits during his life of any estates of freehold and inheritance, and to any personalty absolutely, which may -come to the wife during the coverture, and which are not settled to her separate use, unless the marriage took place after the 9th of August, 1870, and the property came to the wife from an mtestate, or is a sum of money not exceeding /200, coming to her under a deed or will, in which case the said property or sum of money will, subject and without prejudice to the trusts of any settlement affecting the same, belong to the wife (t) Robertson v. Morris, ii Q. B. {x) Bac. Abr. Baron and Feme, C. 916. 2. Co. Litt. 466. Plowd. 192. Doe v. [u) Jolly V. Handcock, 7 Exch. Polgrean, I H. Bl. 535. 820. Sec. III.] OF MARRIAGE. 473 for her separate use, and her receipts alone will be a good discharge, (y) In all actions for a profit or demand accruing during coverture in respect of the real estate of the wife, the husband and wife may join, or the husband may sue alone, as in debt, for not setting out tithes belonging to the wife, [z) and so for rents and services accruing to the husband during the coverture, either in respect of the real estate of the wife, or as annexed to a reversion granted to the husband and wife jointly. But, if a husband alone demises his wife's lands for a term of years for a certain rent, the wife can not be joined with him as co-plaintiff in an action for the recovery of the rent. The husband is alone entitled to distrain for the rent ; and the tenant is bound to deliver up the land to him at the expiration of the term, {a) Formerly the husband was entitled to the fruits of the wife's labor, but by the Married Women's Property Act, 1870, (3) s. i, the wages and earnings of any married woman acquired or gained by her after the passing of that Act, in any employment, occupation, or trade in which she is engaged, or which she carries on separately from her husband, and also any money or property so acquired by her through the exercise of any literary, artistic, or scientific skill, and all investments of such wages, earnings, money, or property, are to be deemed and taken to be property held and settled to her separate use, independent of any husband to whom she may be married, and her receipts alone will be a good discharge for such wages, earnings, money, and property, {c) (y) 33 & 34 Vict. i;. 93, ss. 7, 8. Harcourt v. Wyman, 3 Exch. 824. (z) Beadle v. Sherman, Cro. Eliz. Pany v. Handle, 2 Taunt. 180. 608, 613. (i) 33 & 34 Vict. ... 93. ( a) Wallis v. Harrison, 5 M. & W. {c) And see sects. 2, 3, 4, 5, & 11. 142. North V. Wyard, 2 Biilst. 233. 474 LAW OF CONTRACT. [Bk. II. Ch. VII. Formerly the husband acquired by the marriage power of reducing any of his wife's choses in action into possession, {d) But by the Married Women's Property Act, 1870, {e) s. 2, notwithstanding any provision to the contrary in the 10 Geo. 4, c. 24, enabling the commissioners for the reduction of the national debt, to grant life annuities for terms of years, or in the Acts relating to savings banks, and post-office savings banks, any deposit thereafter made, and any annuity granted by the said commissioners under any of the said Acts in the name of a married woman, or in the name of a woman who may marry after such deposit or grant, is to be deemed to be the separate property of such woman, and the same is to be accounted for and paid to her as if she were an unmarried woman ; provided that if any such deposit is made by, or such annuity granted to, a married woman by means of money of her husband without his consent, the court may, upon an application under sect. 9 of that Act, order such deposit or annuity, or any part thereof, to be paid to the husband. By sect. 3, any married woman, or any woman about to be mar- ried, may apply to the governor and company of the I.^ank of England, or to the governor and company of the Bank of Ireland, by a form to be pro- vided by the governor of each of the said banks and company for that purpose, that any sum forming jiart of the public stocks and funds, and not being less than ^20, to which the woman so applying is entitled, or which she is about to acquire, may be transferred to, or made to stand in, the books of the governor and company to whom such application is made, in the name or intended name of the woman as a mar- (d) Ante. {e) 33 & 34 Vict. c. 93. 3ec. III.] OF MARRIAGE. A7S ried woman entitled to her separate use ; and on such sum being entered in the books of the said governor and company accordingly, the same is to be deemed the separate property of such woman, and is to be transferred and the dividends paid as if she were an unmarried woman ; provided that if any such invest- ment in the funds is made by a married woman by means or moneys of her husband without his consent, the court may, upon an application under sect. 9, order such investment and the dividends thereof, or any part thereof, to be transferred arid paid to the hus- band. By sect. 4, any married woman, or any woman about to be married, may apply in writing to the directors or managers of any incorporated or joint- stock company that any fully paid-up shares, or any debenture or debenture stock, or any stock of such company, to the holding of which no liability is attached, and to which the woman so applying is entitled, may be registered in the books of the said company in the name or intended name of the woman, as a married woman, entitled to her separate use, and it will be the duty of such directors or managers to register such shares or stock accordingly, and the same, upon being so registered, is to be deemed to be the separate property of such woman, and is to be transferred, and the dividends and profits paid, as if she were an unmarried woman ; provided that if any such investment as last mentioned is made by a mar- ried woman by means of moneys of her husband with- out his consent, the court may, upon an application under sect. 9, order such investment and the dividends and profits thereon, or any part thereof, to be trans- ferred and paid to the husband. By sect. 5, any mar- ried woman, or any woman about to be married, may apply in writing to the committee of management of 476 LAW OF CONTRACT. [Bk. II. Ch. VII. any industrial and provident society, or to the trustees of any friendly society, benefit building society, or loan society duly registered, certified, or enrolled under the Acts relating to such societies respectively, that any share, benefit, debenture, right, or claim whatsoever in, to, or upon the funds of such society, to the hold- ing of which share, benefit, or debenture no liability is attached, and to which the woman so applying is entitled, may be entered in the books of the society, in the name or intended name of the woman as a mar- ried woman entitled to her separate use, and it will be the duty of such committee or trustees to cause the same to be so entered, and thereupon such share, ben- efit, debenture, right, or claim is to be deemed to be the separate property of such woman, and is to be transferable and payable, with all dividends and profits thereon, as if she were an unmarried woman ; pro- vided that if any such share, benefit, debenture, right, or claim has been obtained by a married woman by means of moneys of her husband without his consent, the court may, upon an application under sect. 9, order the same, and the dividends and profits thereon, or any part thereof, to be transferred and paid to the husband. By sect. 6, nothing thereinbefore contained in reference to moneys deposited in or annuities granted by savings banks, or moneys invested in the funds, or in shares or stocks of any com- pany shall, as against creditors of the husband, give validity to any deposit or investment of moneys of the husband made in fraud of such creditors, and any moneys so deposited or invested may be followed as if that Act had not passed. By sect. 10, a married woman may effect a policy of insurance upon her own life, or the life of her husband, for her separate use; and the same and all benefit thereof, if expressed on S!=C. 1 1 1. J OF CARRIAGE. 477 the face of it to be so effected, will enure accordingly, and the contract in such policy will be as valid as if made with an unmarried woman. By the same sec- tion, a policy of insurance effected by any married man on his own life, and expressed upon the face of it to be for the benefit of his wife, or of his wife and children, or any of them, is to enure and be deemed a trust for the benefit of his wife, for her separate use, and of his children, or any of them, according to the interest so expressed, and will not, so long as any object of the trust remains, be subject to the control of the husband or to his creditors, or form part of his estate. When the sum secured by the policy becomes payable, or at any time previously, a trustee thereof may be appointed by the Court of Chancery in Eng- land or in Ireland, according as the policy of insur- ance was effected in England or in Ireland, or in Eng- land by the judge of the county court of the district, or in Ireland by the chairman of the civil bill court of the division of the county in which the insurance office is situated, and the receipt of such trustee will be a good discharge to the office. If it is proved that the policy was effected, and premiums paid by the husband, with intent to defraud his creditors, they will be entitled to receive out of the sum secured an amount equal to the premiums so paid. 1 38 1. Gifis from the hzisband to the wife. — A gift may be made by a husband to his wife, which will be supported in equity ; and the husband will be held to be a trustee for his wife of property which he has given to her, or purchased for her with her own moneys ; (/) but the gift must be complete, {g) 1382. Liability of the husband of a feme covert (/) Mews V. Mews, 13 Beav. 529. kin v. Darkin, 22 Law T. R. 278, Ch. -Murray v. Glasse, 17 Jur. 816. Dar- {g) Price v. Price, 21 L. J. Ch. 53. 478 LAW OF CONTRACT. [Bk. II. Ch. VII. executrix. — A husband is liable for all the assets received, and for any devastavit committed, either by himself or his wife, during the coverture, in respect of an estate of which his wife was legal personal repre- sentative. {Ji) 1383. Release by marriage. — If a creditor marries his debtor, the debt is released and extinguished by the confusion of persons; but a contract not broken and not converted into a chose in action at the time of the marriage, or during the coverture, will not be released by the marriage. Consequently, if a man, in contem- plation of marriage, enters into a contract in writing with his intended wife, to the effect that his heirs or executors shall, after his decease, pay her a certain sum of money in case she should survive him, this contract is not released and discharged by the marriage. There- fore a bond, the condition of which can not be broken during coverture, is not extinguished by the marriage of the obligor and obligee. (/) And such contract will be enforced when it would be in furtherance of the manifest intention and object of the parties to do so, as in the case of an agreement by persons about to marry, for the mutual settlement of their estate, or of the estate of either of them, on the other, on the mar- riage. " If a woman executrix marries the debtor, it is no release in law, because she has the debt in another right ; and, if it should amount to a release in law, it would amount to a devastavit, which is a wrong which the law will not suffer." {Ji) Therefore, if the exec- utrix of the obligee of a bond marry the obligor, there is no release of the debt : and after the death of such executrix an action may be maintained in respect of (li) Smith V. Smith, 21 Beav. 3S7. 515 ; i Salk. 325. Dolling v. White. (0 Milbourn v. Ewart, 5 T. R. 22 L. J., Q. B. 32S. 385. Cage V. Acton, i Ltl. Kaym. (k) Needham's case, 8 Co. 136, a. Sec. III.] OF MARRIAGE. 479 it by the administrator de bonis non. (/) Where a man covenanted to pay a woman an annuity for her separate use free from anticipation, and afterwards married her, it was held that the annuity was only suspended by the marriage and that the widow was entitled to recover arrears accrued subsequent to the death of the husband, (ot) 1384. Deeds of separation. — The husband and wife can not by contract between themselves change their legal capacities or characters, {n) When, there- fore, by reason of matrimonial differences, they wish to live separate upon certain terms, it is necessary that a trustee should be appointed to contract with the husband for that purpose. {0) The husband may cove- nant with any third party to pay to him a certain sum of money for the separate use of the wife, either for a term of years or during her natural life, provided the covenant is absolute and unqualified, and the perform- ance of it is not made to depend upon the contingency of a future separation, or made conditional upon the wife's consent to live separate. (/) If it appears by the deed that the separation is not a present, immedi- ate, and actually accomplished separation, but is sub- sequently to be carried into effect, the contract will be void, as being contrary to the public policy of the law. (^) A covenant by the trustee to indemnify the hus- band against debts and expenses contracted by him and his wife, during the time they were cohabiting (/) Wankford v. Wankford, i Salk. ip) Sanders v. Rodway, i6 Jur. 306. 1005. Hunt V. Hunt, 31 Beav. 8g. {nt) Fitzgerald v. Fitzgerald, L. R,, (/) Clough v. Lambert, 10 Sim. 2 P. C. 83 ; 37 L. J., P. C. 44. 178. Bostock v. Hume, 7 M. & Gr. (k) Co. Litt. 112, a.. Ewers V. Hut- 893. Logan v. Birkett, i IMyl. & K. ton, 3 Esp. 254. Garth v. Earnshaw, 225. 3 Y. & C. 5S4. Ld. St. John v. Ly. (?) Westmeath v. Salisbury, 5 Bl., St. John, II Ves. 530. N. S., 393. Hindley v. Westmeath, 6 B. & C. 200. 48o LAU OF CONTRACT. [Bk. II. Ch. VII. together, as well as against debts that may subse- quently be contracted by her, is not, in contempla- tion of law, a covenant or engagement to pay money as an inducement for a separation, and is not, conse- quently, void, (r) If the husband has been induced to execute the separation deed by fraudulent misrepre- sentation or fraudulent concealment on the part of the trustee, the deed will be invalid, and the husband can not be sued upon it. {s) All contracts for the preven- tion of cohabitation between husband and wife are null and void, (/) unless it appears that the husband has by cruelty or misconduct forfeited his marital rights. (?/) An agreement between a husband and the father of the wife, that the husband and wife should live apart, and that the husband should execute a deed of separa- tion containing all usual and proper clauses, and secur- ing an annuity for the maintenance of his wife and child, and that the expense of the agreement and deed should be borne equally by the husband and the father, has been decreed to be specifically performed, (.t) 1385. Sitbscqiicnt reconciliation puts an end to the husband's covenant to pay an annuity to the wife, (_j') unless it is provided that a subsequent cohabitation shall in no wise alter or affect such liability. {£) If the husband has not forfeited his marital rights by his own misconduct, he may discharge himself from his (r) Jones V. Waite, 7 Sc. 328 ; 5 Sc. Hagg. Eccles. Sup. 115. Swift v. N. R. 951. Summers v. Ball, 8 M. & Swift, 34 L. J., Ch. 209. W. 596. (x) Gibbs V. Harding, L. R., 5 Ch. {s\ Evans v. Edmonds, 22 L. J,, C. 336 ; 39 L. J., Ch. 374. And see the P. 211 ; 13 C. B. 777. Evans v. Car- 36 Vict. c. 12, s. 2. rington, 30 L. J., Ch. 364. But see {y) Ld. St. John v. Ly. St. John, 11 Kendall v. Webster, i H. & C. 440; Ves. 537. Bateman v. Ross, i Dow. 31 L. J., Ex. 492. 245. {t) Wren v. Bradley, 17 L. J., Ch. (a) Wilson v. Mushett, 3 B. & Ad. 172. Cartwright V, Cartwright, 22 lb. 751. Webster v. Webster, 22 L. J., 841. Ch. 837. («) Westmeath v. Westmeath, 2 Sec. III.] OF MARRIAGE. 481 liability thereon by offering to receive back the wife, (a) unless he has covenanted absolutely and uncondi- tionally with the trustee to pay the annuity during the life of the wife, {!)) in which case his liability to pay the" annuity is not discharged by the subsequent com- inission of adultery by the wife, or by a decree for a judicial separation pronounced in consequence of such adultery, {c) When a separation has taken place, and property has been settled upon the wife and children of the marriage, for their support, the settlement will be upheld against the future creditors of the husband, unless it appears that the separation was illusory and without adequate cause, {d) 1386. Wife's right of action after separation. — By the Married Woman's Property Act, 1870, (^) sect. II, a married woman may maintain an action in her own name for the recovery of any wages, earnings, money and property, by that Act declared to be her separate property, or of any property belonging to her before marriage, and which her husband shall, by writing under his hand, have agreed with her shall belong to her after marriage as her separate property ; and she will have in her own name the same remedies, both civil and criminal, against all persons whom- soever for the protection and security of such wages, earnings, money, and property, and of any chattels or other property purchased or obtained by means thereof for her own use, as if such wages, earnings, money, chattels, and property belonged to her as an unmarried woman. When the husband and wife are ((7) Whorewood v. Whorewood, Cli. grave v. Seagrave, 13 Ves. 439. C. 250. {d) Hobbb V. Hull, i Cox, 445. ib) Seeling v. Crawley, 2 Vern. 386, Nunn v. Wilsmore, S T. R. 529, (f) Bayiion v. Batley, i M. & Sc. Stephens v. Olive, 2 Br. C. C. 90. 329 ; 8 Bing. 256. Jee v. Thurlow, (e) 23 & 34 Vict. c. 93. 2 B. & C. 551 ; 4 D. & R II. Sea- m. — 31 483 LAW OF CONTRACT. [Bk. II. Cn. VII living separate the wife may bring an action against the husband, in the name of the trustees of the deed of separation, if the latter refuses to carry out the trusts of the deed, on tendering an indemnity against costs, (y) Where the husband, in a deed of separa- tion, agreed to allow the wife to enjoy certain separate estate and property, and covenanted that he would ratify all proceedings in his name for obtaining the property, and the wife brought an action on a note in the name of her husband and herself, and the husband released the debt, the court ordered the release to be given up to be canceled, {g) 1387. Effect of a decree for a divorce. — After a decree of divorce, the choses in action of a wife which have not been reduced into possession by the hus- band belong to her absolutely, {li) 1388. Effect of a decree for a judicial separation. — After a decree for a judicial separation the wife's choses in action, not reduced into the husband's possession before the decree, become her absolute property. (/) Where a married woman, entitled to a reversionary interest in personalty, has joined with her husband in mortgaging such interest, and has afterwards obtained a decree for judicial s(-paration, and is living apart from her husband, on the property coming into possession she is entitled to it absolutely under the 20 & 21 Vict. c. 85, s. 25. (ylz) 1389. Dissolution of the coverture by death. — The /msbatid's rights by survivorship. — If the coverture (/) Morgan v. Thomas, 2 C. & M. 344. ?83. Auster v. Holland, 15 L. J., Q. (/) Johnson v Lander, L. R., 7 Eq. ^- 229- 22S; 38 L. J., Ch. 22g. ig) Innell v. Newman, 4 B. & Aid. {!;) Insole, in re, L. R., i Eq. 470 ; 419- Chambers V. Donaldson, 9 East, 35 L. J., Ch. 177. And see Pfole v. '^''^ Soady, L. R., 3 Ch. 220 ; 37 L. J., Ch. (h) Wells V. Malbon, 31 I,. J., Ch. 246. Sec. III.] OF MARRIAGE. 483 be dissolved by the death of the wife, and the husband becomes tenant by the courtesy of the wife's estates of inheritance, he is clothed with the interests in all real contracts or covenants annexed to such estates. But, upon real contracts annexed to the wife's estates of freehold and inheritance of which he is not tenant by the courtesy, but which descend after her death upon her heir-at-law, the husband can maintain no action, although such contracts have been entered into during the coverture with both husband and wife jointly. (/) If during coverture a lease be made by husband and wife according to the provisions of the 32 Hen. 8, c. 28, s. 3, containing a covenant from the lessee to pay rent to the husband and wife and the heirs of the wife, and the surviving husband brings an action on the covenant for non-payment of the rent, the action may be defeated by a plea showing that the demised premises were the property of the wife, and that the plaintiff never had any estate in them but in right of his wife, and that she died without issue before the rent became due, leaving A. her heir-at-law, who claimed the rent, {iii) But all " fruits fallen " during the coverture, such as a relief due in right of the wife's manor or seignory, arrears of a rent-charge granted, either to the wife alone, or to the husband and wife jointly, and all arrears of rent due at the death of the wife, are recoverable by the husband in his own right. For all breaches of covenants, also, not in the nature of continuing breaches, where the ultimate damage has accrued during the coverture, the husband may maintain an action in his own right after the death of his wife, although the lands have descended to her heir-at-law. If, too, the surviving husband was seized during coverture of a rent-charge (/) Blake v. Foster 8 T. R. 487. ('«) Hill v. Saunders, 7 D. & R. 17. 484 LAW OF CONTRACT. [Bk. II. Ch. VII. in fee, fee-tail, or for life, in right of his wife, he may by statute sue in his own name for arrears which accrued before the marriage, as well as for such as accrued during the coverture. (;«) 1390. Recovery by the surviving husband of money and property belonging to his deceased wife. — If a debt by bond be due to a" feme sole, who after- wards marries, and the husband makes a letter of attorney to a third party to receive the money, who receives it accordingly, and the wife dies, the husband shall have an action in his own right for this money ; for by the receipt the property therein becomes vested in the husband. So, if a legacy devised to a married woman be actually received by an attorney or agent, duly appointed for that purpose by the husband alone, or by the husband and wife jointly, it is thenceforth no longer a chose in action of the wife, but money had and received to the use of the husband, who may sue for it, after the death of his wife, in his own right ((?) The surviving husband was also formerly entitled, to the wife's savings from her own separate income, given or lent by her in her lifetime to her relations or friends, and might maintain an action for the recovery of all such money, although by the terms of the settlement she was to enjoy it free from all control or interference on the part of the husband, (/) If the husband has commenced a joint action in his own name and in that of his wife, for the purpose of reducing the wife's chose in action into possession, and the wife dies before judgment, the action is at an end, and the unrecovered chose in action vests in the («) 32 Hen. 9, c. 37, ». 3. Andrew (/) Molony v. Kennedy, 10 Sim. Ognell's case, 4 Co. 51, a. b. 254. Johnstone v, Lumb, 15 lb. 308. (p) Huntley v. Griffith, Moore, But see now the Married Woraens' 452 ; Golds. 159, 160. Troperty Act, 1S70. Sec. III.] OF MARRIAGE. 485 wife's personal representative ; but, if the wife dies after judgment, but before execution, the husband alone is entitled to the benefit of the judgment, and may have execution without a scire facias, {jj) The receipt by the husband of interest on a promissory note made to the wjfe before the marriage is no evidence of a reduction of the note into the possession of the husband during the coverture, (r) 1 39 1. Rights of the siirviving husband as admin- istrator to the wife. — The surviving husband is entitled jure mariti to demand administration of his wife's personal estate, and may recover the same for his own use and benefit. (/) If the surviving husband should die before he has obtained a grant of adminis- tration, or before all the wife's choses in action have been reduced into possession, adminstration de bonis non of the wife must be taken out; (t) and this is granted the next of kin of the husband, as the party by law entitled to the property ; {zt) and, if adminis- tration de bonis non of the wife is obtained by any third person, he is a trustee for the representative of the husband, (.r) Chattels real and personalty possessed by the wife in autre droit, as executrix or administratrix, do not, as previously mentioned, vest in the husband by survivorship, but belong to the administrator de bonis non of the testator or intestate, {y) 1392. Liabilities of the surviving husband. — ■■ Where the husband takes the benefit of contracts (^plied contracts. — We have already seen {a) that the law implies from men's conduct and actions contracts and promises as forcible and binding as those made by express words, and that such contracts are implied sometimes in furtherance of the intention, or presumed intention, of the parties, and sometimes in furtherance of justice, without regard to the intention of the parties. Thus a promise to pay for services rendered or for goods received or money obtained, will be implied against a wrong-doer who never intended to pay, or intended deceptively to avoid payment, {b) Such is the case where goods have been obtained by an act of trespass, and have been sold, and the proceeds of the sale received by the trespasser, {c) and where minerals or the produce of the soil have been wrongfully severed, and carried away and converted into money by the wrong- doer. (flT) {a) Ante, Vol i, p. 52, § 30. {c) Rodgers v. Maw, Neat v Hard- {b") Foster v. Stewart, 3 M. & S. igi. ing, post. Lindon v. Hooper, i Cowp. Lightly V. Clouston, i Taunt. 113. 414. Erle, C. J., Rumsey V. N. E. Ry. Co., {d) Powell v. Rees, 7 Ad. & E. 428. 32 L. J., C. P. 247. Clark v. Gilbert, Bailey v. Birtles, T. Raym. 71. Per- 2 Sc. 534. kinson v. Gilford, Cro. Car. 539. 492 LAW OF CONTRACT. [Bk. II. Cii. VIIL 1400. Of implied covenants — Although the words of a contract under seal do not in themselves import any express covenant, yet the law, in order to promote good faith and make men act up to the spirit as well as to the letter of their engagements, will create and supply, as a necessary result and consequence of the contract, certain covenants and obligations, which bind the parties as forcibly and effectually as if they had been expressed in the strongest and most explicit terms in the deed itself. Thus, where it was agreed by deed between A and B that B should pay a sum of money for A.'s lands by a particular day, it was held that there was, by implication, a covenant to execute a conveyance of the land by the day named. (it) And where, on the sale and transfer of the good- will of a business, it was stipulated that the transferree should pay to the transferror one-fourth part of the earnings of the business for four successive years, it was held that the lavv' would imply a covenant from the transferree to continue the business for four years, and endeavor to make it productive, if there was reason- able prospect of success. (/ ) By the common law, if one man granted to another anv estate or interest or incorporeal right, the law implied a covenant from the grantor that he u-ould do nothing to annul or avoid such grant ; if he granted a watercourse, a right of way, or estovers, there resulted from such grant, by inference of law, a covenant for the quiet enjoyment of the thing grrxited ; and, if the grantor stopped up the water- course or the road, or cut down the wood out of which the estovers were to be taken, the grantee was entitled to an action of covenant against him for the misfeas- (e) Pordage v. Cole, t Saiuid. 319, N. S., 654; 32 I,. J., C. P. 254. (/) Mclntyre V. Belchev, 14 C. B., Sec. I.] GENERAL PRINCIPLES. 493 ance. (^g) By the 7 & 8 Vict. c. 76, s. 6, however, which extends to all estates, rights, and interests created between the ist of January and the ist of October, 1845, it is enacted that the word '• grant" in a deed shall not have the effect of creating any cove- nant by implication, except in cases where, by any act of parliament, it is or shall be declared that the word "grant" shall have such effect. And by the 8 & 9 Vict. c. 106, s. 4, it is enacted that the word " give" or the word " grant" in a deed executed after the ist of October, 1845, shall not imply any covenant in law in respect of any tenements or hereditaments, except so far as the word "give" or the word "grant" may, by force of any act of parliament, imply a covenant. It was formerly held, in the case of leases under seal, that the law would imply from the word " demise," or any equivalent words in the contract constituting and creating the lease, a covenant on (he part of the lessor that he had a right to make the lease ; (/z) but it has been determined that there is no implied cove- nant on the part of the lessor that he has " good title to demise," but only a covenant that he will put the lessee into possession of the thing demised," (?) and that the lessee " shall quietly enjoy " during the term, (i) or, in the case of a tenancy from year to 3-ear, during the continuance of the lessor's interest. (/) From the words "yielding " or " paying," or any equivalent words amounting to a reservation of rent, there is an implied covenant on the part of the lessee (g) I Saund. 321. Bac. Abr. Gov- Moo & P. 57. Messent v. Reynolds, nant, B. 8 C. P. 201. {h) Holder v. Taylor, Hob. 12. {k) Bandy v. Cartwright, 8 Exch. Shep. Touch. 165, 167. Noke's case, 913. Giles v. Hooper, Garth. 135. 4 Go. Rep. 80, b. 9 Ves. 330. Line Williams v. Burrell, i G. B, 428. V. Stephenson, 7 Sc. 6g. ( /) Penfold v. Abbott, 32 L. J., Q. (j) Coe V. Glay, 5 Bing. 440; 3 B. 67. 494 LAW OF CONTRACT. [Bk. II. Ch. VIII. to pay the rent so reserved, although the words do not in themselves import any express covenant. In all assignments of leases and existing interests there is an implied covenant on the part of the assignor that he has himself done nothing, and will do nothing, to prejudice or defeat the estate, title, or interest that he professes to assign. Where the proprietor of a medi- cine, and a recipe for making the same, assigned the medicine and recipe, and all his " right, title, interest, claim, or demand to the same medicine, &c.," to a pur- chaser, it was held that the law would imply from the transfer and assignment a covenant from the vendor that he would not himself prepare and vend the medi- cine so assigned, or engage with others so doing. (;;/) And, where a man by deed " bargained, sold, assigned, and transferred'' a sum of money due to him from a third person, it was held that the law would imply, from the words of transfer and assignment, a covenant from his assignor to do no act to prevent the assignee from obtaining possession of the sum so assigned. («) It has been said, however, that it does not follow " that because parties have expressly covenanted to perform certain acts, they must be held to have impliedly cove- nanted for every act convenient or even necessary for the perfect performance of their express cove- nants." ((?) The liability of a shareholder of a joint-stock com- pany, registered under the Act of 1862, to contribute to the assets of the company, is in the nature of a specialty debt, (/) and the case is the same where the im) Seddon v. Senate, 13 East, 63. Whittle v. Frankland, 2 B. & S. 49 ; (n) Deriing v. Fairingion, 3 Keb. 31 L. J., M. C. 81. 304 ; Freem. 368 ; I Mod. 113. (/) Companies' Act of 1862, s. 75. (d) Aspdin v. Austin, 5 Q. B. 683, Buck v. Robson, L. R., 10 Eq. 629 ; 684. But see Emmens v. Eiderton, 4 39 L. J., Ch. 821. H. L. Cas. 624 ; 13 C. B. 495 ; and Sec. 1.] GENERAL PRINCIPLES. 495 company is not registered under that act, but is wound up under it. (^) 140 1 . Implied promises. — An agreement for a lease to commence from a particular day does not amount to an agreement to give the intended lessee possession on that day ; (r) but, as we have seen, if there be a lease or present demise, there is an implied promise or covenant from the lessor to put the lessee into pos- session of the thing demised, and to secure him the free use, possession, and enjoyment of it for the term for which he has agreed to let it, as against all persons claiming through the lessor or by title paramount, (j) If apartments in the interior of a house are demised by parol, the law implies a promise from the lessor to allow the tenant the use of the door-bell and knocker, the benefit of the skylight on the staircase, the use of the water-closet, and the enjoyment of all such rights as are naturally incident to the subject-matter of the contract, and necessary for the reasonable and com- fortable enjoyment of it. (/) In the case of an execu- tory agreement for the sale and purchase of a lease the law implies a promise from the vendor to estab- lish and make good his title to the lease which he pro- poses to sell and assign, (u) And, when the pur- chaser has accepted the assignment, the law implies a promise from him to the assignor to pay the rent reserved in such lease, and perform the covenants therein contained, (x) The law also implies, from all persons who under- take any duty, charge, office, employment, or trust, a {q) In re Muggeiidge, L. R., lO Eq. P. 2g. 443 ; 39 L- J-T Cli. 620. (tt) Souter v. Drake, 5 B. & Ad. 992 - (r) Drury v. Macnamara, 25 L. J., 3 N. & M. 40. Hall v. Betty, 5 Sc. Q. B. 5. N. R. 503. (s) Ante. (x) Burnett v. Lynch, 8 D. & R. (/) Underwood v. Burrows, 7 C. & 376, 3S3 ; 5 B. & C. 602. 496 LAW OF CONTRACT. [Bk. II. Cn. VIII. promise to act with integrity and diligence and proper and reasonable care in the execution of such duty, trust, or employment, and according to orders given and assented to. (jv) A banker who has in his hands sufficient funds of a customer impliedly under- takes to pay a check drawn by the latter, if the check be presented within banking hours ; {£) and a man who undertakes the duty and office of an executor, and has assets sufficient for the purpose, impliedly promises to pay for a funeral suitable to the station in life of his testator, furnished and provided by a third person in the absence of the executor, and without his knowledge and concurrence; and the law implies a request from the executor to the stranger who has undertaken the necessary duty, to do what he has done, although in point of fact he gave no orders and made no promise, {a) If a man voluntarily takes charge of the goods and chattels of another, the law implies a promise from him to take reasonable and proper care of them. (^) The law also implies a promise from a common innkeeper to secure his guest's goods in his inn, and to take all reasonable and proper care of horses and cattle placed in his stables ; {c) from a common carrier, or cab-proprietor, to be answerable for the goods he carries; (^) from a ferry-man, safely to transport things intrusted to him across a river, and deliver them on the opposite bank ; from a common, farrier, that he will shoe a horse without laming him ; from a trainer of horses, that he will exercise reasonable skill and management in the riding of horses intrusted to him ; from any artificer ( v) Morgan v. Ravey, 6 H. & N. Tugwell v. Heyman, 3 Camp. 298. 265 ; 30 L. J., Ex. 131. (h) Southcote's case, 4 Rep. 83, b. (z) Maizetti v. Williams, I B. & Ad. 84. 415. (c) Ante. (a) Rogers v. Price, 3 Y. & J- 28. {d) Ante. Sec. I.J GENERAL PRINCIPLES. 497 and handicraftsman, that he will exercise his art rightfully, truly, and skillfully, as he ought ; and from brokers, agents, solicitors, surgeons, and other profes- sional men, that they will severally, in their respective callings, exercise competent skill and proper care in the service they undertake to perform, in which, if they fail, an action lies to recover damages for the breach of their implied promise. (^) When one man engages with another to supply him with a particular thing, to be applied to a certain use, in consideration of a pecuniary payment, he enters into an implied contract that the thing shall be reasonably fit for the purpose for which it is to be used, and shall not contain any defect unfitting it for such purpose which might have been discovered by the exercise of reasonable skill and diligence, or by ordinary inquiry and examination, (y) If a husband wrongfully discards his wife, any person may furnish her with raiment, food, lodging, and the necessaries of life ; and the law will imply a promise from the husband to pay for the things so supplied, in the same way as if they had been supplied to himself at his express request. (_^) As a man is bound to support his wife whilst living, as being part and parcel of himself, so is he bound by law to bury her when dead; and, if the husband has abandoned the wife, and lives in a distant land, and is unable, or being able, is unwilling, and neglects to bury her, any (c) Norris V. Staps, Hob. 211. n lb., 4 Q. B. 379; 38 L. J., Q. B. 169 ; Roll. Abr. 91, pi. 15. Best v. Yates, as to a bridge, Grote v. Chester and T Ventr. 268. Holyhead Ry. Co., 2 Ex. 251 ; as to a (f) See, as to a building to view a staircase in a public exhibition, Brazier public exhibition, Francis v. Cockrell, v. Polytechnic Institution, I F. & F. L. R., 5 Q. B. 501; 39 L. J., Q. B. 507. 291 ; a railway carriage. Redhead v. (g) Ante. Midland Ry. Co., L. R., 2 Q. B. 412 ; III. — 32 498 LA IV OF CONTRACT. [Bk. II. Ch. VIIL stranger may undertake the duty and defray the expenses of a funeral suitable to her rank or fortune ; and the law implies a request on the part of the husband to the stranger so to do, as well as a promise to repay the money so laid out, upon which implied promise an action is maintainable against the husband, though the burial was, in point of fact, undertaken, and the money paid, without his knowledge or consent. (Ji) So that in this, as in other instances of implied contracts and promises, the ancient legai maxim is well supported, in fictione juris subistit sequitas. When a servant binds himself to work for some certain period, and the master agrees to pay wages in proportion to the work done, there is an implied obligation on the part of the master to provide work. And, if a person contracts to pay a salary for services to be rendered for a certain term, there is an implied contract on his part to permit those services to be performed, (z) Generally speaking, every workman who devotes his labor, his talents, and his time to the service of an employer is entitled to a recompense, and the law implies a promise from the employer, in case nothing has been suid or stipulated concerning payment, to pay a reasonable compensation for the services rendered ; and the right of action upon such implied promise or undertaking arises as soon as the work has been completed, and the employer is enabled to avail himself of the benefit of it. (/') But the law raises no implied promise in respect of services {h) Jenkins v. Tucker, I H. Bl. 94. (;' ) Reg. >-. Welch, 2 Ell. & Bl, 357. Chappie V. Cooper, 13 M. & W. 259. Emmens v. Elderton, 4 H. L. Cas. Bradshaw v. Beard, 12 C. B., N. S., 624. 344 ; 31 L. J., C. P. 273. (k) Hughe.s v. Lenny, 5 M. & W. 183. Sec. ].] GENERAL PRINCIPLES. 499 rendered against the will of the recipient, (/) or in respect of mere gratuitous services, such as voluntary assistance in saving property from fire, or securing property found afloat, or beasts found astray, or voluntary and unsolicited supplies of food and lodging, or voluntary services in the management of the affairs of another ; for that which is offered and accepted as a gratuity can not afterwards be converted into a debt, {m) The law raises no implied promise of remuneration in favor of a person who professes to render services of a purely honorary character, (n) Whether anv contract is made, or on what terms it is made, must depend on the circumstances of each case, and upon custom and usage. (0) If a fund is to be collected, and a party merely speculates on the chance of being paid, taking the risk whether funds will be collected and appropriated to his demand, there is no contract. If he does work on the order of another under such circumstances that it must be pre- sumed that he looks to be paid as a matter of right by him, then a contract would be implied with that person. (/) If a man wrongfully decoys away my servant or apprentice against my will, and acquires and makes use of his labor and services, the law will imply a promise from the wrong-doer to render to me a fair equivalent in respect thereof (^) So, if a man takes luggage by an excursion train, knowing that the company do not carry luggage gratuitously for per- (/) Stolies V. T.ewis, i T. R. 20. («) An/e. British Empire Shipping Company v. (el Rigley v. Dakin, 2 Y. & J. 87. Somes, E. B. & E. 353 ; 30 1.. J., Q. (/) Higgins v. Hopkins, 3 Exch. B. 23g. 166. (/u) Nicholson v. Chapman, 2 H. (j) Lightly v. Cloustcn, i Taunt. Bl. 254 ; I Esp. 86 ; Peake's Ad. C. 112. Foster v. Stewart, 3 M. & S. 226 ; 7 C. & P. 434. Taylor v. Brewer, 195 I M. & S. 2go 500 LAW OF CONTRACT. [BK.U.Cn.VUl. sons traveling by such train, a contract to pay for its carriage may be implied, (r) 1402. Pari execution of a special contract. — Where a workman had been induced to enter into a special contract to remove a quantity of rubbish by a fraudulent representation made by the employer, it was held that he might repudiate the contract as soon as he discovered the fraud, and sue his employer for compensation for his lost time and labor ; {s) and, when a special contract for work and services has been abandoned and put an end to, and the employer has derived some benefit from work done under it, he may be made liable, upon an implied promise, to make a reasonable remuneration in respect thereof (/) 1403. Implied contracts for sale. — Whenever a purchaser retains goods after a special contract for the sale of them has gone off, or has not been exactly per- formed by the vendor, the vendor may recover the value of the goods upon a new contract and prom- ise which the law then implies from the retention of the goods. («) If goods have been obtained by fraud and deceit, the party defrauded of his goods may, if he thinks fit, waive the tort, and sue upon an implied contract, treating the wrong-doer as a pur- chaser of the goods. Where a father falsely pretended to retire from business in favor of an infant son whom he introduced as his successor, stating that he should keep a watchful eye over him, and upon this represen- tation the plaintiffs supplied the son with goods to fr) Rumsey v. North Eastern Rail- gherry Tea Company, 17 C. B., X. S., way Company, 14 C. B., N. S., 641; 733; 34 I.. ].X. P. 15. Bartholo- 32 L. ].. C. P. 244. mew v. Mnrkvvick, 15 C. B., N. S., (s) Selway v. Fogs. 5 M- & W. 36. 711 ; 33 L. J., C. P. 145. (/) Burn V. ^^iller, 4 Taunt. 745. (u) Oxendale v. Wetherell, g B. & Hopkins V. Richardson, 14 L. J., Q. C. 3SS. Mavor v. Pyne, II Moore, 2 B. 80. Inchbald v. Western Neil- Sec. I.J GENERAL PRINCIPLES. 501 the amount of ^800, and, the son refusing to pay for these goods, and being exonerated from liability by reason of his minority, the plaintiffs brought their action against the father, it was held that, if the father's statement to the plaintiflfs was false, and he continued, notwithstanding his pretended retirement, to have a secret interest in the concern, he was liable upon an implied promise to pay to the plaintiffs the price of the goods, as the real buyer and principal in the tran- saction, (.r) And, where the defendant knowingly induced the plaintiff to sell goods to an insolvent, which goods were immediately afterwards made over to the defendant himself, the court held that the law would imply a contract from the defendant to pay for the goods as the real purchaser, the insolvent appear- ing to have been the mere creature and agent of the defendant, and a mere man of straw in the transaction, made use of by the defendant to enable him to per- petrate a fraud upon the plaintiff, (jy) 1404. Foreign judgments. — The law raises an implied contract to pay a sum of money adjudged to be due from one man to another by the sentence of a foreign or colonial court, {£) provided the judgment is final, and a fixed and ascertained sum of money is thereby adjudged to be paid, {a) But the pendency of an appeal is no bar to the action, although it may afford ground for an application to stay proceedings. {U) Nor is it any answer to such an action that the judgment is erroneous ; (1;) but it may be defeated by (x) Biddle v. Levy, i Stark. 20. {h) Scott v. Pilkington, 2 B. & S. 1 1 ; (;') Hill V. Perrott, 3 Taunt. 274. 31 L. J., Q. B. 8r. Abbotts V. Barry, 5 Moore, 98. {c) De Cos-Je Brissac v. Rathbone, (0) Parkk, B., Williams V. Jones, 13 6 H. & N. 301; 30 L. J., Ex. 238. M. &. W. 633. Philpott V Adams, 7 Godard v. Gray, L. R., 6 Q. B. 139 ; H. & N. 888 ; 31 L. J., Ex. 421. 40 L. J., Q. B. 62. Castrigne v. Imrie, (fl) Sadler v. Robins, i Campb. 253. L. R., 4 H. L. 414 ; 39 L. J., C. P. 350. 502 LAW OF CONTRACT. [Bk. II. Ch. VIII. showing that the court had no jurisdiction, (d) as, for instance, that the judgment was pronounced against a person behind his back, who was not subject to its jurisdiction, (e) or that the judgment was obtained by fraud, (/) or perhaps that it was given against good faith and natural justice, (^g) SECTION II. OF IMPLIED PROMISES IN RESPECT OF MONEY PAID FOR ANOTHER. 1405. Of ike implied promise in respect of money paid for another. — Whenever one man has expended and laid out money for the use of another by his authority or at his request, the law implies, from the person on whose account and for whose use the money has been expended, a promise of repayment, in the absence of circumstances showing that the money was advanced as a gift, (/z) Where the defendant asked the plaintiff to accompany him to a harness-maker, to assist him in procuring some har- ness, and the plaintiff, in the defendant's presence, assured the harness-maker that, if the defendant did not pay, he, the plaintiff, would, and the defendant made default, and the plaintiff paid the money, it was held that the law would imply a promise from the defendant to repay the money, as being " money paid by the plaintiff for the use of the defendant at {d) Vanquelin v. Bonard, 33 L. J,, (g) Simpson v. Fogo, I H. & M. C. P. 78, 195 ; 32 L. J., Ch. 249 ; 2 Smith, L. (e) Buchanan v, Rucker, g East, C 6th ed., p. 726. 192. Schibsby v. Westenliolz, L. R., (/4) Brittain v. Lloyd, 14 M. & W. 6 Q. B. 155 ; 40 L. J., Q. B, 73. 762 ; 15 L. J., Ex. 43. Barber v. (/) Bowles V. Orr, i Y. & C, Ex, Butcher, 15 L. J., Q. B. 289 ; 8 Q. B. 464. 863. Sec. II.] IMPLIED PROMISES. 503 his request." (i) If a person who owes a debt to A., by any contrivance causes B. to pay it, an action will lie to recover back the amount, and the machinery by which the mischief was brought about is utterly immaterial. Therefore, where one of two partners made a note in the partnership name, and paid it away in discharge of his own private debt, and the co-part- ner was compelled to pay the amount of the note, it was held that he was entitled to recover the money from his colleague, the maker of the note, as money paid at his request. (/) When several persons together consent to share a common responsibility, there is, in the absence of an express agreement to the contrary, an understood authority from all to any one and to each of them to discharge the common burden and liability; and, if any one of them pays the whole amount, or more than his own share and proportion, the money paid by him over and above his own proportion is money paid for the use of the others at their request, {k) And the ■Same rule prevails with regard to all joint contractors, not being partners, who have undertaken or have been made subject to a joint liability, and one of whom has paid the whole or more than his own share and proportion of the com- mon burden, and has thus relieved his co-contractcrs from their liability, either wholly or in part. (/) If a party of friends, for example, meet to dine at a tavern, and give a joint order for dinner, and after dinner all but the plaintiff depart without paying, and the plaintiff pnys for all, he may maintain an action against the others upon an implied promise to pay (i) Alexander v. Vane, I M. & W. 511. 15, b. (j) Cross V. Cheshire, 21 L. J., Ex; (/) Buknell v. Minot, 4 Moore, 340. 3 ; 7 Exch. 43. Driver v. Burton, 21' Prior v. Hembvow, 8 M. & W. 873. L. J., Q. B. 157, Reynolds v. Wheeler, 10 C. B., N S. {!.■) Harberl's case,, 3 Co. 13, u, 561 ; 30 L. J., C. P, 350. 504 LAIV OF CONTRACT. [Bk. II. Ch. VIII. theirseveral proportionsof the joint liability ; (in) and the same rule prevails, and the same implied promise arises, where four persons jointly retain a solicitor to defend them ag^ainst a civil or a criminal charere, or to conduct an action or a prosecution on their behalf, and the plaintiff, one of the four, has paid the solici- tor's bill ; (;/) or where two parties agree to employ an arbitrator, and one of them pays money to take up the award, (o) But there is no contribution between persons who have engaged to do an unlawful act, and are therefore joint tort-feasors; (p) nor where money has been paid by one of several joint contractors negli- gently, and not in discharge of a joint liability; (^) and it has been held that no such promise is implied, and no such liabilit)^ arises, as between under-lessees of separate portions of premises holden under one origi- nal lease at an entire rent, where one only has been distrained upon or compelled under a threat of distress to pay the whole of such rent, (r) 1406. Money paid by mistake. — Where money has been paid by A to B's bankers at the instance and request of B, under forgetfulness or a mistake of facts, A is entitled to recover back the money, (s) 1407. Implied reqjiest to pay. — The action for money paid is founded on the notion that the money was paid by the plaintiff for the use of the defendant at his request, and that the defendant, in consideration, thereof, promised the plaintiff to pay him the amount (w2) Hussey v. Crickett, 3 Campb. 343. Wilson v. Milner, 2 Campbi 173- 451. («) Edger v. Knapp, 6 Sc. N. R. (q) Hunter v. Hunt, I C, B. 300, 707, 713. Holmes v. Williamson, 6 {r) Mcllreath v. iVIargetson, 4 Doug. M. & S. 158. 27S. ip) Marsack v. Webber, 6 H. & N. [s) Mills v. Aldenbury, 3 Ex£hi 5gOi i>6. And see post. (p) Farebrotlierv. Ansley, i Campb. Sec. II.] IMPLIED PROMISES. 505 so expended ; for the law raises no implied promise in respect of a voluntary, unauthorized payment, which the party was not called upon or required to make on behalf of another, {t) But the law will, under certain circumstances, imply the request as well as the prom- ise, and so support a righteous and meritorious claim. If, for example, the defendant, by neglecting to pay money which he was by law bound to pay, has cast the duty and obligation upon the plaintiff, and the latter has paid the money, not voluntarily and offici- ously, but by compulsion of law, the compulsion so brought upon the plaintiff by the defendant is equiva- lent to an express request ; and proof of such compul- sion will support the necessary allegation in the declar- ation, that the money was paid by the plaintiff for the use of the defendant at his request. It has been held, for example, that a compulsion indirectly emanating from the defendant amounted to a constructive request in the following cases : — where the carriage of the plaintiff was intrusted to the defend- ant, a coachmaker, to be repaired, and, whilst stand- ing on the defendaat's premises, was distrained by the landlord for rent due from the defendant, and the plaintiff, in order to redeem and get back his carriage was obliged to pay the rent ; {11) — where a sub-tenant paid, under a threat of distress, a ground rent to the original lessor, which ought to have been paid by his own immediate landlord ; {w) also, where a tenant was compelled to pay income-tax and other outgoings and burdens on the land, which ought by law to have been paid by the lessor ; {pc) — where an executor paid {() Lord Kenyon, 8 T. R. 310, 311, 512. 613. Stokes V. Lewis, i T. R. 21. (x) Baker v. Greenhill, 3 Q. B. 14S. (ti) Exall V. Partridge, 8 T. R. 308. Graliam .. Tate, I M. & S. 6tl. Rodgers v. Maw, 15 M & W. 448. Earle ». Maugham, 14 C. B„ N. S., {w) Sapsford v. Fletcher, 4. T. R. 626, 5o6 LAW OF CONTRACT. [Bk. II.Ch. VIII. a legacy in full, inadvertently omitting to deduct the legacy duty, which he is required by act of parliament to deduct and pay to the crown, and was afterwards compelled to pay such duty, the statute declaring that, in case the executor omits to deduct the duty, such duty shall become a debt due to the crown from both the executor and the legatee ; (y) — where the defendant omitted to furnish money for the payment of shares which he had directed the plaintiff to buy for him, and the plaintiff was obliged to re-sell the shares at a loss, and the action was brought for the money lost ; ( z) — where the plaintiff had been obliged by the custom of the stock-exchange to pay calls on shares bought by him for the defendant, which calls the defendant was bound to pay ; (a) — where the plaintiff, a carrier, by mistake, delivered to the defend- ant goods consigned to a third party, and the defend- ant appropriated the goods to his own use, and the carrier was obliged to pay the value of them to the consignor; (^) — where the defendant obtained posses- sion of goods intrusted to the plaintiff to be sold at a fixed price, upon the terms that he should either re- deliver them to the plaintiff, or pay the price within a limited period, and the defendant refused to do <.ither, and the plaintiff, being threatened with an action, paid the price to the owner, and the action was brought to recover the amount so paid ; (c) — where the plaintiff had entered into a deed of composition with his creditors upon the terms that they should receive ten shillings in the pound, and the defendant refused to sign the deed without receiving security for { y) Hales v. Freeaian, 4 Moore, (a) Bayley v. Wilkins, 7 C. B, 886. 21. Foster v. Ley, 2 Sc. 433. Bate v. (b) Brown v. Hodgson, 4 Taunt. Payne, 13 Q. B. 900. i8g. (z) Pollock V. Stahles, I2 Q, B, 765. {c) Longchamp v. Kenny, [ Doug. Smith V. Lhido, 5 C. B., N. S., 587, 137. Sec. II.] IMPLIED PROMISES. 507 the payment of the residue of the debt, and the plain- tiff privately gave the defendant his promissory note for the remainder of the debt, upon the terms that he should keep such note in his own hands, and the defendant, in breach of his agreement to that effect, negotiated the note, and the plaintiff was compelled to pay the amount thereof to the indorsee ; (d) — where the plaintiff agreed to grant the defendant a lease, and the lease was prepared by the plaintiff's solicitor, and the plaintiff was obliged to pay for the lease by reason of the defendant's refusal so to do, it being shown that, according to the usual course of business in such cases, the lessor's solicitor prepared the lease, and the lessee paid the expense of it. (^) But the law raises no such implied promise from a mortgagor in favor of the mortgagee's attorney, where the negotiation for a mortgage goes off through the default of the mortgagor. {/) And, where A, under a bill of sale, seized goods on B's premises, and, with his knowledge, but without any express request, allowed them to remain there until rent became due, and, the landlord having distrained them, A paid the rent and expenses, it was held that this was not a com- pulsory payment by A of a debt of B for his benefit or at his implied request, (^g) The law also raises an implied promise in respect of money paid by the plaintiff for the use of the defendant in the following cases : where an auctioneer has paid the auction duty on a sale of lands which (d) Horton v. Riley, II M. & W. of preparing a marriage settlement, 492. Bradshaw v. Bradshaw, g M. & Helps v. Clayton, 17 C. B., N. S., 551. W. 29. Smith V. Cuff, 6 JVf. & S. 160. (/) Wilkinson v. Grant, 25 L. J., Atkinson v. Denby, 30 L. J., Ex. 361 ; C. P. 233. 31 L. J., Ex. 362. {g) England v. Marsden, L. R., i {e) Grissell v. Robinson, 3 Sc. 329 ; C. P. 529 ; 35 L. J., C P. 259, 3 Bing., N. C. 10. See, as to the cost So8 LAW OF CONTRACT. [Bk. II. Ch. VIIL were bought in by the vendor, and the commissioners of excise refuse to remit the duty ; {/i) where a broker has paid money for his principal in the usual and known course of business, although without a direct request from the principal; (z) where the plaintiff, at the request of the defendant, has become security for him for the payment of money, and the plaintiff, by reason of the neglect of the defendant to pay at the time appointed, is compelled to pay the debt out of his own pocket ; (/^) where the plaintiff accepts a bill of exchange drawn on him by the defendant, and the consideration for the acceptance fails, and the plaintiff is obliged to pay the amount of the bill when due ; {i) also where the plaintiff has accepted a bill for money lent by the defendant, and has become insolvent, and the defendant has agreed to a composi- tion, and it has become his duty to indemnify the plaintiff from liability on the bill, and he has neglected so to do, and the plaintiff has been com- pelled to pay the amount ; (w) also, where the plaintiff accepts a bill of exchange, or makes or indorses a promissory note for the accommodation of the defendant, and without value or consideration, and the plaintiff is obliged to pay the bill or note when it comes to maturity, by reason of the defendant's neglect to provide the necessary funds for the purpose; (it) also, where the acceptor neglects to pay a bill when due, and the plaintiff, as indorser, is compelled (h) Brittaiii v. Lloyd, 14 M. & W. (/) Hooper v. Tieffiy, I Exch. 17. 762; 15 L. J-, Ex. 43. (in) Hawley V. Beverley, 6 Sc. N. (i) Sentance v. Hawley, 13 C. B., R, 837; 6 M. & G. 22J. N- S., 45S. («) Bleadon v. Charles, 5 Moo. & (k) Fisher w Fellows, 5 Esp. 171. P. 14 ; 7 Biiig. 246. Reynolds v. Lord Kenyon, 8 T. R. 310. Lewis v. Doyle, 2 Sc. N. R. 45. Driver v. Bur- Campbell, 8 C. B., 541 ; 19 L. J., C. ton, 21 L. J., Q. B. 157, P. 130. Sec. III.] IMPLIED PRO.MISES. 509 by the holder to pay him. (0) It is sufficient if the party paying the money shows that the legal obliga- tion was cast upon him by the default of the defendant, and that the law compelled him to do what he has done ; he need not wait for the actual issue of legal process, or abide the result of an action, in order to establish the fact of the compulsion, {p) But the law raises no implied promise out of a transaction which has been a breach of duty, and will give no assistance towards the recovery of money paid in furtherance of an illegal or immoral purpose, (^) or which a party has been compelled to pay in consequence of his own neglect, (r) If a tenant, after he has paid the income-tax, omits to deduct it from the rent, he can not recover it from the landlord in an action for money paid, (s) It must be shown that money or its equivalent has been actually paid, (^) and that the defendant was bound to pay what the plaintiff has been compelled to pay on his behalf, {u) SECTION III. IMPLIED PROMISES IN RESPECT OF MONEY RECEIVED FOR THE USE OF ANOTHER. 1408. Implied promises in respect of m.oney received for the use of another. — If a man, through {o) Pownal V. Ferrand, 9 D. & R. {s) Cummings v. Bedborough, 15 • 607 ; 6 B. & C. 439. M. & W. 438. (/) Maydew v. Forrester, 5 Taunt. (/) Taylor v. Higgins, 3 East, 169. ■615. Austin V. Ward, R. & M. 116. Maxwell v. Jameson, 2 B. & Aid. 51. {q) Pitcher v. Bailey, 8 East, 172. Moore v. Pyrke, 11 East, 52. Betts V Gibbiift, 2 Ad. & E. 57. («) Griffenhoofe v. Daubuz, 25 L. (r) Capp V. Topham, 6 East, 392. J., Q. B. 237. , Pitcher v. Bailey, 8 East, 17: 5IO LAJV OF CONTRACT. [Bk. 11. Ch. VIII. some mistake or misapprehension or forgetfulness of facts, has received money to which he is not justly and legally entitled, and which he ought not, in foro conscientise, to retain, the law regards him as the receiver and holder of the money for the use of the lawful owner of it, and raises an implied promise from him to pay over the amount to such owner, (x) But it has been held that, if a party makes a volun- tary payment in satisfaction and discharge of some disputed claim, with full knowledge of the facts,, but under ignorance of the law, and from a mistake and misapprehension of his legal liability, and no fraud, or concealment, or misrepresentation has been resorted to by the other side to induce the payment, the law will not help the party so paying the money to recover it back, (y) If an action, for example, has been commenced to enforce a claim put forward by the plaintiff, and the defendant settles the action and pays money in satisfaction and discharge of such claim, and then discovers that the claim was unfounded, and that there was no cause of action, he can not recover back the money on the ground that it was paid by mistake ; for there would be no end to litigation if that were to be permitted, and disputed questions and transactions so settled and adjusted were to be opened afresh. (,-) It is otherwise, however, if the party making the claim knows it to be unfounded, and wrongfully makes use of the process of (x) Kell)' V. Solari, 9 AT. & W. 58. ( i' ) i;ill)ie v. Lumley, 2 East, 469. Luca-. V. Worswick, i Moo. & Rob. Iiri^bane v. Dacres, 5 Taunt. 143.. 293. Millies V. Duncan, 9 D & F. Higgs v. Scott, 7 C. B. 63. Piatt v. 735 ; 6 B- & C. 677, 673. Bell v. Broriiage, 24 L. J., Ex. 63. Gardiner, 4 M. & Gr. 17 ; 4 Sc. N. R. (:) Maniott v. Hampton, 7 T. R. 62;. Barber v. Brown, i C. B., N. S., 269. Goodman v. Sayers, 2 J. & W. 121. Code Civ. tit. 4, liv. 3, art. 1376. 263. Hamlet v. Richardson, 2 Moo. Inst. lib. 3, tit. 28, § vi,, vii. & Sc. Sli ; 9 Bing. 644. Sec. III.] IMPLIED PROMISES. 511 the law for purposes of oppression and extortion, {a) But, where the money has actually been paid under compulsory process of law, in consequence of the non- attendance of a particular witness, or the non-produc- tion of a particular document, it can not be recovered back ; for otherwise the rights of parties would never be settled, and verdicts and judgments might be ren- dered nugatory, (b) "The rule, also, has always been that, if a man has actually paid what the law would not have compelled him to pay, but what in equity and conscience he ought to have paid, he can not recover back the money, as where a man has paid a debt which was barred by the statute of limitation, or a debt contracted during infancy." (t) It has been held that the law would imply a prom- ise from the defendant to pay to the plaintiff money received under the following circumstances : — where a contract was entered into for the sale of merchandise at a price to be calculated according to the weight, and an error took place in the weighing, and the goods were reported to be of greater weight than they really were, and the price was calculated and paid by the plaintiff to the defendant according to such false reck- oning, and the action was brought to recover the amount of the overpayment; (^d) where silver was sold in bars at a price to be calculated according to the number of ounces of pure silver contained in each bar, to be determined by an assay of the metal, and a mistake v/as made by the assay master, and the plain- tiff, in consequence thereof paid the defendant for a greater quantity of silver than each bar was found sub- sequently to contain, and the action was brought to {a) Cadeval, Duke de, v. Collins, 269. Wilson v. Ray, 10 Ad. & E. 88. 4 Ad. & E. 853 ; 6 N. & M. 324. lc\ Bize v. Dickason, i T. R. 286. (b) Marriott v. Hampton, 7 T. R. {d) Cox v. Trentice, 3 M. & S. 349. 512 LAW OF CONTRACT. [Bk. II. Ch. VIII. recover the amount of such overpayment ; (e) where the plaintiff had paid rent to the defendant, and it after- wards appeared that the defendant had no right to receive such rent, and the action was brought to recover it back, the title to the land not coming into question, and not being sought to be tried in such action ; (/) where money was paid by the plaintiff to the defendant for the purchase of a leasehold estate, and it afterwards appeared that the defendant had no title to the lease, (g) It is not necessary, however, that money should have been actually received by the defendant to render him liable in this form of action ; but the circumstances must be equivalent to a receipt of money. (//) If two men reckon together, and money is passed in account, and one overpays the other by mistake or false reckoning, the overpayment may be recovered in an action for money had and received, (z) But the law raises no implied promise upon which an action can be maintained in respect of money had and received, from the mere fact of one man's money having come into possession of another. (k) " If I apply to a man for payment of a debt, and j:ome third person pays me, he can not recover back the money merely because he has paid it under some misapprehension." (/) It is necessary to maintain this action, that a certain amount of money belonging (e) Cox V. Prentice, 3 M. & S. 349, (/;) Gingell v. Purkin^, 4 Exch. 726. 350. Spratt V. Hobhouse, 4 Bing. lyg. (/) New^ome v. Gmliani, 10 B, & {i) Holt, C. J. ,2 Ld. Raym. 1217; C. 234, 236. Robinson v. Anderton, Townsend v. Crowdy, 8 C. B., N. S., I Pealte, I2g. Moneypenny v. Bris- 477 ; 29 L. J., C. P. 305. tnwe, 2 Russ. & Mylne, 117. The (i) Jones v. Carter, S Q. B. 134 ; 15 courts will not suffer a title to land to L. J., Q. B. 96. Black v. Siddaway, be tried in an action fur money had lb. 359. Robbins v. Fennell, II Q. and received. Marshall v. Hopkins, B. 248. Foster v. Green, 7 H. & N. 15 East, 313, 314. Clarance v. Mar- 881; 31 L. J., Ex. 158. shall, 2 C. & M. 495. (/) Makti\, B., Aiken v. Short, I {^) Ciipps V. Reade, 6 T. R. 606. H. & N, 215. Sec. III.] IMPLIED PROMISES. 513 to one person should have improperly come into the hands of another, (w) and that there should be some privity between them, (ji) 1409. IVhcu money paid by 'mistake can not be recovered back. — If trustees or agents represent that they have funds in their hands belongingtothe parties for whom they act, and allow them to draw out the same and spend it as their own, the trustees or agents can not recover back the money. Neither can they retain other moneys in their hands belonging to these same parties by way of indemnity. {0) The law raises no implied promise in respect of money had and received, where the rights of the receiver of the money have been prejudiced by the mistake, and it would be inequitable to compel him to refund the amount. (/) Nor can money be recovered back which was allowed by mistake on a settlement of accounts, where there were cross demands, and the settlement was made on the basis of adjusting differences and disputes between the parties. (^) 1 4 10. Money improperly received and wrongfjilly detained. — If one man has obtained money from another through the medium of oppression, imposi tion, extortion, or deceit, or by the commission of a trespass, such money is, in contemplation of law, money received for the use of the injured party. It is not the money of the wrong -doer ; he has no righi to retain it ; and the law, therefore, implies a promise (;«) FoUett V. Hoppe, 17 L. J., C. (Lords!, i6 Q. B. 362. GiBBS, J., Bris- p_ y6. bane v. Dacres, 5 Taunt. 152. And see (n) Watson v. Russell, 5 B. & S. Cave ». Mills, 7 H. & N. qi3 ; 31 L. <368 ; 31 L. J., Q. B. 304 ; 3+ L. J., Q. J., Ex. 265. B. 03. (/■) Watson v. Moore, 33 Law T. {0) Skyring V. Greenwood, 4 B. & C. R. 121. Sliand v. Grant, 15 C. B., ago. Shaw V. Picton, lb. 729. Shaw N. S., 324. Freeman v. Jeffries, L. R., V. Dartnall, 6 lb. 65. Sliaw v. Wood- 4 Ex. 189 ; 38 L. ]., Ex. 116. cock, 7 lb. 85. Reg. v. Treasury (q) Lee v. Merrott, 8 Q. B. 820. III.— 33 514 LAIV OF CONTRACT. [Bk. II. Ch. VIII. from him to return it to the rightful owner, whose title to it can not be destroyed and annulled by the fraud- ulent and unjust dispossession, (r) When a man's goods have been taken by an act of trespass, and have been subsequently sold by the trespasser and turned into- money, he may sue for money had and received, (j) It has been held, that the defendant is indebted to the plaintiff in respect of " money had and received by the defendant for the use of the plaintiff," in the following cases: where a man, having a claim or lien to a certain amount on goods and securities in his possession, unlawfully refuses to give them up without receiving more than he is strictly entitled to claim, or, having no lien at all upon them, wrongfully refuses to give them up without being paid for so doing, and the owner, in order to get the goods or securities, is obliged to satisfy and discharge the extortionate demand ; (/) where a railway com- pany or carrier makes excessive charges for the con- veyance of goods, and the consignee, in order to get possession of the goods, pays the extortionate demand ; (zi) where a married man, pretending to be single, marries a lady, and under color of such pretended marriage, gets possession of her estates, and receives the rents ; (.r) where one man takes and wrongfully pledges, (_)/) or sells, the goods of another, and (r) Neate v. Harding, 6 Exch., 349 ; Bristol and Exeter Railway Company, 20 L. J., Ex. 250. Chowne v. Baylis, 6 Exch. 702 ; 30 L. J., Ex. 442. Bax- 31 L. J,, Ch. 757. endale v. Great \\'estern Railway (s) Rodgers v. Maw, 15 M. & W. Company, t6 C. B., N. S., 137; 32 L. 44S. J., C. P. 225 ; 33 lb. 197. Tamraco v. it) A^tley V. Reynolds, 2 Str. 915. Simpson, 19 C. B., N. S., 453 ; 34 I.. Shaw V. Woodcock, 9 D. & R. 889, J., C. P. 268. Great We.,tern Ry. Co. 892. V. Sutton, L. R., 4 H. L. 226 ; 38 L. ill) Ashmole V. Wainwright, 2 O. B. J. Ex. 177. S37. Kent V. Great Western Railway (-r) Hasser v. Wallis, Salk. 28. Company, 3 C. B. 715. Parker v. (y) AUanson v. Atkinson, i M. & S. 583. Sec. III.] IMPLIED PROMISES. 515 receives the price ; {£) or claims or receives rents or money under a false or pretended authority, {a) or under the coercion of threatened penal proceedings ; ((5) or wrongfully usurps the office of another, and receives the fees annexed thereto; {c) or receives a masquerade ticket to be sold or re-delivered, and refuses to re-deliver it, the presumption being in such a case that he has sold it and received the money. {d~) The action upon such implied promise lies also against an agent who wrongfully demands and receives money in the name and on behalf of his principal, although he may have paid the money over to the latter ; (e) or a principal who has obtained money through the medium of a fraud committed by his agent ; (/") or a solicitor who wrongfully exacts money, either on his own account or on behalf of his client, as the price of the liberation of deeds or securities unjustly and illegally detained by him on behalf of such client ; (^g) or who extorts more than the principal and interest due on a mortgage deed, and the costs, under a threat of the exercise of a power of sale ; (//) or a parish clerk who demands and receives on behalf of the rector a greater sum for searches in the parish register than he is entitled to charge ; {i ) or a vestry clerk who wrongfully receives (2) Lamine v. Dorrell, 2 Ld. Raym. {e) Snowden v. Davis, I Taunt. 359. 1216. Edwards v. Scarsbrook, 3 B. But see Holland v. Russell, 30 L. ]., & S. 280 ; 32 L. J., Q. B. 45. Q. B. 308. (a) Robson v, Eaton, I T. R. 62. (/) Crockford v. Winter, I Campb. Dupen V. Keeling, 4 C. & P. 102. 127. {/)) Unwin V. Leaper, I .M. &Gr. 752. {/) Smith v. Sleap, 12 M. & \\. (c) Howard v. Wood, 2 Lev. 245 ; 2 588. Wakefield v. Newbon, 6 Q. B. Jon. 127. Arris v. Slukeley, 2 Mod. 280; 13 L. J, Q. B. 25S. 263. Hall V. Swansea, 5 Q. B. 54S (A) Close >■. Phipps, 8 Sc. N. R. Boyter V. Dodswortb, 6 T. R. 6S1. 381 ; 7 il. &. Gr. 586. See FrasPr v. (d ) Longchamp v. Kenny, i Doug Pendiebury, 31 L. J., C. P. i. 137, («') Steele v. Williams 8 Exch. 625. 5i6 LAJV OF CONTRACT. [Bk. II.Ch. VIII. and detains, by the direction of the vestry burial fees which belong to the rector ; (/^) or a steward of a manor who exacts exorbitant fees from tenants on their admittance; (/) or who demands and receives an extravagant charge, as the condition of his producing deeds and court rolls in his custody, which the party paying the money could not do without and which the steward ought to have produced on tender of a reasonable compensation ; (»?) or a broker in possession of goods under a distress who demands and receives unauthorized and excessive charges ; (^n) or a sheriff who exacts a larger fee than the law allows for executing the Queen's writ ; (c) or who obtains money under the pressure of an illegal arrest ; (/) or under a threat to sell goods seized under a fi. fa. which he has no right to sell ; ( ^) or a justice of the peace who exacts a fee from a publican as the condition of granting him a license ; (;-) or a toll collector who exacts an illegal or unauthorized toll ; (j) or an over- seer of the poor who levies money by seizing and selling goods upon a magistrate's conviction which is afterwards quashed ; (/) or a revenue officer who unlawfully seizes goods as forfeited, and unlawfully detains them, and takes money which he has no right to take as the condition of their release ; (?/) or a nurse who, upon the death of a person she (/') Spry V. Emperor, 6 M. & W. R., 3 Q. B. 18 ; 37 L. J., Q. l! 42. Cr,ii. (q) Yalpy v. Manley, I C. B. 602. (/) Tralierne v. Gardener, 5 Ell. & (r) Morgan v. Palmer, 2 B. & C. 729 ; Bl. 942. 4 D. & R. 283. {ill) Spry V. Pigott, cited 2 Esp. (.1) Lewis v. Hammond, 2 B. & A. 723. 206. Waterhou^e v. Keen, 4 B. & C. (11) Hills V. Street, ■^ Moo. & P. 2co ; 6 D. & R. 257. 103. (0 Feltbam v. Terry, Bull, N. P. ((') Dew V. Parsons, 2 B. & Aid. 131, a ; cited I T. R. 3S7._ i Cowp. 562. 419. (/) Payne v. Ciiapman, 4 .\d. & E. (?/) Irving v. Wil-on, 4 T. R. 4S5. 36.J. Baron de Mesnil v. D.ikin, L. Atlee v. Backhouse, 3 M. & W. 645. Sec. III.] IMPLIED PROMISES. 517 attends, carries away his money ; {x) or a creditor who has received money as the condition of his signing a bankrupt's certificate; {y) or who has received money from a bankrupt as the price of his discharge from an arrest, having at the time notice of the bankruptcy ; {z) or who has openly joined other creditors in executing a deed of composition, with a debtor consenting to take a composition, but has privately stipulated for and accepted payment of the residue of his debt, and the action is brought to recover back the amount so paid, {a) The action upon such implied promise Hes, more- over, against all persons who extort money for doing what they are by law bound to do without payment or reward ; ((5) and who receive and have in their pos- session and wrongfully detain the money of another ; " for," as it has been justly observed, " no man will venture to take, if he knows that he is liable to refund." {c) 1 4 1 1 . Money received tipon a consideration that has failed. — The law raises also an implied promise to pay back money that has been received without con- sideration, or upon a consideration that has failed ; and an action may be maintained upon such implied promise by the grantee of an annuity to recover back nioney paid for an annuity which has been set aside, or has become void for want of registry or enrollment ; (rtf) also to recover money paid to an auctioneer as a (x) Thomas v. Whip, Bull., N. P. Atkinson v. Denby, 7 H. & N. 934 ; 31 130, a, L. J., Ex. 362. Clay V. Ray, 17 C. B., (y) Smith v. Bromley, 2 Doug. 697, N. S., 18S. Geere v. Mare, 2 H. & in noiis. Sievers v. Boswell, 4 So. N. C. 339 ; 33 L. J., Ex. 50. R. 173. (b) Parker v. Great Western Rail- (z) Follett V. Hoppe, 17 L. J., C. way Company, 7 Sc. N. R. 835, 874. P. 76. (1^) Jones V. Barkley, 2 Doug. 690. (a) Pradshaw V. Bradshaw, 9 M. &■ (r/) Shore v. Webb, i T. R. 732. W. 2g. Smith v. Cuff, 6 M. & S. 160. Scurfield v. Gowlaiid, 6 E.ist, 241. 5i8 LAW OF CONTRACT. [Bk. II. Ch. VIII. deposit on the sale of an estate, when the title is defective, and the purchase consequently can not be completed ; (^) or if the estate does not correspond with the description given of it in a printed particu- lar; (/) or money paid to a broker by his principal in the belief that an order has been duly executed, where the contract made by the broker is not in com- pliance with the order ; (^) also to recover money received as a consideration or bonus for a lease by a person who is subsequently found to have no right to grant the lease; (/i) or paid on a conditional sale which has been abandoned or rescinded, and the goods returned ; (z ) or on a purchase of a good-will or fixtures, shares or chattels, when the things con- tracted for, or some of them, have not been transferred or delivered ; (/^) or on the purchase of goods sold by the vendor as his own, which the true owner has claimed from the purchaser ; (/) or money paid as a premium upon a policy of insurance, when the risk insured against was not run ; (;;/) or money paid on a bill of exchange, where there is no consideration for ,the bill, (;/) or the consideration has failed ; (^o) or to the promoters of a scheme, who promise to carry out Davis V. Bryan, 6 B. & C. 656. Wa- 107. Street v. Blay, 2 B. & Ad. tcrs V. Maiisell, 3 Taunt. 56. Hug- 462. gins V. Coates, 5 Q, B. 432 ; 13 L. J., (i) Anon., i Str. 467. Wriglit v. y. B. 46. Turner v. Browne, 3 C. B. Xewton, 2 C. M. & R. 127. Willciii- 157 ; 15 L. J., C. r. 223. Weddell son v. Lloyd, 7 Q. B. 44. Devaux v. \. Lynam, 2 Esp. 310. Conolly, 8 C. B. 640 ; 19 L. J., C. P. (?) Burrougli v. Skinner, 5 Burr. 71. 2639. (/) Nichols \. Bannister, 34 L. J., ( f) Ante. C. P. IU5. (g) Bostock V. Jardine, 3 H. & C. (/«) Stevenson v. Snow, 3 Burr. 700 ; 34 L. J., Ex. 142. 1240. {h) Cripps V. Reade, 6 T. R. 606. (n) Cobden v. Kendrick, 4 T. R. Wright V. Colls, Tg L. J., C. P. 60 ; 8 432. C. B. 164, (0) Hooper v. Treffry, i Exch. 17 ; (ij Hurst \. Orbell, S Ad. & E. 16 L. J., Ex. 233. Sec. III.] IMPLIED PROMISES. 519 their plan for the benefit of the subscribers, but after- wards abandon it without their consent ; (/) or money paid to parish officers for the support of a bastard child, when the child dies before the money has been expended ; {g) or conduct-money paid to a party upon a subpoena as a witness, where the cause is settled, and the subpoena is not acted upon ; (r) or to the holder of a bill, or bank-note, or other security, who has presented it to the plaintiff to be discounted, and got the money, and the bill turns out to be a forgery, (^s) if the plaintiff has given prompt notice of the forgery to the holder, and has not been guilty of laches. {£) The action also may be maintained to recover back money received under a special contract which has been abandoned or rescinded, or the perform- ance of which has been prevented by the wrongful act of the party who has received the money, (ji) 14 1 2. Money received under an illegal ton- iract. — The law also, so long as an illegal contract continues executory, implies from the person who has received money in furtherance of the execution of the contract, a promise to refund it in favor of the party who paid the money, and who repudiates the illegal transaction ; {x) and an action upon this implied promise may be maintained against a person who has received money upon an illegal (/) Nockells V. Crosby, 5 D. & R. it) Price v. Neale, 3 Burr. 1357 ; 1 751 ; 3 B. & C. 824. Kempson >. W. Bl. 390. Smith v. Mercer, 6 Saunders, 4 Bing. 5 ; 12 Moore, 44. Taunt. 76. Cocks >. Masterman, o {q) Chappell V. Poles, 2 M. & W. B. & C. 902. S67. («) Towers v. Barrett, i T. R. 133. (;■) Martin \. Andrews, 7 Ell. & Bl. Giles v. Edwards, 7 T. R. 181. I ; 26 L. J., Q. B. 39. Smith v. Mundy, 29 L. J., Q. B. 172. (j) Jones V. Ryde, 5 Taunt. 488 ; i Ehrensperger v. Anderson, 3 Exch. Marsh. 163. Wilkinson v. Johnston, 159. 3 B. & C. 428 ; 5 D. & R. 403. Ful- (.r) Palyart v. I,eckie, 6 M. & S. ler V. Smith, R. & M. 49. Gurney v. 290. Womersley, 4 Ell. & Bl. 143. 520 LAW OF CONTRACT. [Bk. II. Ch. VIII. insurance or vvager, at any time before the happening of the event which is to decide the adventure ; (jj/) also against a stakeholder with whom money has been deposited to abide the event of an illegal wager, who has not paid over the money to the winner, or who pays it over after he has received notice not to do so from the party who has deposited the raoirey in his hands ; (2) and against parish officers who wrongfully receive money under an illegal contract, although they have quitted office, and hand over the money received to their successors. («) The law also implies a promise to refund money received under an illegal contract, where the plaintiff does not stand in pari delicto with the defendant. Where contracts, for example, are prohibited by statute, for the purpose of preventing one set of men from taking advantage of the necessities of others, and money is paid upon such contracts by one of those whom the law intended to protect, the person who has so paid his money does not stand in pari delicto with the person who has received it, and may, after the forbidden transaction is completed, bring an action upon a promise implied by law from the person who has got the money, to refund it. (6) An action upon such implied promise may be maintained to recover back money privately paid to a creditor to induce him to sign a bankrupt's certificate, (c) or to recover (_v) Varney v. Hickman, 17 L. J., Hellings, 14 N. & W. 711 ; 15 L. J,, C. P. 102 ; 5 C. B. 271. Clarke v. Ex. 168. Hickard v. Baiikes, 13 l£a^t. .Shee, I Cowp. 197. Tenant v. Eliot, 20. Bone v. Eckless, 5 H. & N. 925 ; I B. & P. 3. Fanner v. Russell, lb. 29 L. J., Ex. 438, 296, Tappenden v. Randall, 2 B. & (a) Chappell v. Poles. 2 JI. & W. P. 467- S67. (=) Hodson V. Terrill, I C. & M. {/>) Williams v. Hedley, 8 East, 378 797; 3 Tyr. 929. Robinson v. {c) Lowry v, Bourdieu, 2 Doug. 472. Mearns, 6 D. & R. 26. Haslelovv v. Atkinson v. Denby, 7 H. & N. 934 ; Jackson, 8 B. & C. 221. Mearing v. 31 L. J., E.x. 362, Sec. III.J IMPLIED PROMISES. 521 from a creditor money paid to the indorsee of a bill of exchange, or the assignee of a policy of insurance, originally given to the creditor to induce him to sign a composition deed, {d) or money paid to a lottery- office keeper for insuring tickets contrary to the statute, {e) 1413. Money received by agents. — If a broker or commission agent employed to sell, effects a sale and receives the purchase money, and refuses to pay over the amount to his employer, after deducting his commission, an action for money had and received may be maintained against him; (_/) also against a sharebroker who has received money for his principal to buy shares, and the authority to buy is counter- manded before the purchase has been made ; (^g) but not where the commission has been executed before countermand, and the shares have been bought, although they may subsequently turn out to be forgeries. (/I) If an agent refuses to account for goods delivered to him for sale, it shall be presumed after a reasonable time that he has sold them and received the proceeds in money. (?) A solicitor employed to sell real estate, who, as the agent of the vendor, receives a deposit from the purchaser, is not entitled to retain it as a stakeholder until the completion of the purchase, but must pay it over to the vendor on demand, (^k) The mere circumstance of money having been paid by a principal to his agent, with directions to (d) Smith V. Cuff, 6 M. & S. 165, (/) Bousfield v. Wilson, 16 M. & 166. Alsager v. Spaulding, 4 Bing., W. 185. N. S., 407 ; 6 Scott 204. Smith v. (g) Fletcher v. Marshall, 15 M. & Bromley, 2 Doug. 695. W. 763. (e) Jaques v. Withy, t H. Bl. 65 ; 2 (/;) Lambert v. Heath, lb. 486. Bl. R. 1073. Clarke v, Shee, I Cowp. (/) Hunter v. Welsh, I Stark. 224. 197. IJrnwningv. Morris 2 Id. 790. (/(•) Edgell v. Day, 35 1... j.,C. P. 7. 522 LAW OF COiVTRACT. [Bk U.Ck.YIU. pay it to a third person, imposes no liability upon the agent to such third person, unless there is an express or implied assent on the part of the agent to pay the money according to the directions he has received. (/) Whenever one man agrees to receive money for the use of another upon consideration executed, however frivo- lous or void the consideration might have been in respect of the person paying the money, if it were not absolutely immoral or illegal, the person so receiving it can not be permitted to gainsay his having received it for the use of the other, (ot) If an agent author- ized to receive money for his principal employs a third party to receive it, there is, it seems, no implied promise from the latter to pay over the money to the principal, but only to his own immediate employei, the agent. Therefore, if a client in the country employs a country solicitor to recover a debt, and the money is received by the town agent of the country solicitor, such money is not money had and received by him for the use of the client, but for the use of his own employer; and the client consequently can not recover it from the town agent. (;z) But the town agent may, under certain circumstances, make himself liable to the client in respect of money received by him ; and the court, in the exercise of its summary jurisdiction over its own officers, will often compel a London agent to pay such money to the client, "to enforce justice according to the equity of the individual case." (o) It is a general rule of law that, if money be paid (/) Moore v. Bushell, 27 L. J., Ex. Robbins v. Fennell, 11 Q. B. 24S; 17 3. Hill V. Royds, L. R., 8 Eq. 290; L. J., Q, B. 77. Hurley v. Baker. 16 38 L. J., Ch. 53S. M. & W. 26. («) Griffith V, Young, 12 East, (0) Robbins v. Heath, 12 Jur. 158. 514- Hanby v. Cassin, 11 Jur. 108S ; 17 L. («) Cobb V. ];ecl) Holland v. Russell, I B. & S. Gow. 13 424 ; 4 B. & S. 14 ; 30 L. J., Q. B. (q) Oates v. Hudsor., 6 Exch. 348. 308 ; 32 lb. 297. Shand v. Grant, 15 (r) Ehrensperger v. Anderson, 3 C. B., N. S., 224. Lloyd V. Sandiland, Exch. 157. 524 LAW OF CONTRACT. [Bk. II. Ch. VIII.. amount of such balance to the others ; and any admis- sion made by the defendant of some definite balance being against him, or of a sum certain being due from him to the plaintiff, will be evidence of an " account stated," and raise an implied promise to pay over the amount. (^) And the promise will be implied where the account is stated in respect of one item only as well as in the case of a plurality of items ; (^) but a general admission of liability to a pecuniary demand, without specifying the amount of it, will not support an " account stated," and will not entitle the plaintiff to recover nominal damages, (u) Nor is an offer to pay a sum less than the sum claimed, if unaccepted, any evidence of an account stated in an action for the larger sum. (.r) An I O U, being a distinct admis- sion of a sum due, is prima facie evidence of an account stated, and of a promise to pay the amount to the person who is in possession of the document ; (y) but the effect of it may be got rid of, where it is the only item of evidence of account, by showing that there was no debt and no demand which could be enforced by virtue of it. (2) Where the plaintiff lent money to A upon B's promise to become surety for its repayment, and, on the money being advanced, A and B signed and delivered to the plaintiff the follovv- (s) Knowles v. Michel, 13 East, (ii) Lane v. Hill, 21 L. J., Q. B. 249. Laycock v. Pickles, 4 B. •payments through, 342, 346 payment to an agent in the ordinary course of business, 346 payments and settlements between principal and agent, 346 payment by and to, extending the period of limitation, 422, 423 sales by, 548 demises by, 680 idemnification of, 936 damages for breach of warranty of authority by, 937 of charterers, implied authority of, 950 pledges by, 1079, 1081 assurance of life by, 1225 bills of exchange by, 1285 promissory notes by, 1286 Agency, the contract of, gog revocation of authority, 910 when the authority is irrevocable, 911 accounting, 912 refusal to account, 912 liabilities of brokers, factors, and commission agents, 913 liabilities of forwarding agents, 913 del credere commissions, 914 insurance brokers, 915 share and stock brokers, 916 solicitors, 917 sherifTs officers, gi8 estate and house agents, gig extent of agent's authority, g2o receipt of money and goods on account of the principal, g20 by sub-agents, g2i payment by one agent to another, 922 purchases by agents with the money of their principals, 923 frauds by agents on their principals, 924 payment of commission, 925 extra work by agents, 026 536 INDEX. \Refertnces ars Agency — Con tin ited. rights of shipbrokers to commission, 927 policy brokers, g28 travellers for orders, 929 house and estate agents and auctioneers, 930 right of agent to be re-imbursed on revocation of authority, 931 lien of factors and brokers, 932 insurance brokers, 933 solicitors, 934 shipmasters, 935 Agisters, of cattle, liabilities of, S39 Agreements, requisites of, see CONTRACT — Consideration. for leases 201, 676 Agricultural usages, annexation of to leases, 244 Alien ami, contracts with, 193 Alien enemi, contracts with, 194, 274 Allotment, sale of letters of, 659 See Shares Alteration of contracts, release by, 388 material and immaterial, 389 evidence to explain, 390 cancellation of contracts, 39T in deeds after execution, 392 filling up of blanks, 392 of principal obligation discharging the surety, I127 of bills and notes, 1280 restamping altered contracts, 1080 Alterations in property after a sale and before a transfer, 521 Alternative stipulations, 319 Amalgamation of coirpanies, 1318 Ambassador, privilege of, 198 Ambiguity, latent, 222 patent, 223 See Interpretation. Ancestor, liabilities of heir at-law upon covenants of, 440 Anchors, illegal sale of, 2S8 to the sections :\ INDEX. 5 3, J Annuity, assessment of, 431 specific performance of agreement for, 497 Annuity-deeds, registration of, 1049 See Rentcharge. Antecedent debts, pledges for, by factors, loSo Apartments. See Furnished Houses. • Apportionment, of periodical payments, 35S of rent on assignment of the reversion, 706 Apprenticeship, contracts of, 903 stamp on, 903 liabilities of parties to, 904 misconduct of the apprentice, 905 dissolution of, 905 by award of justices, 906 damages for breach of, goS Appropriation, of payment, 350 by debtor, 351 by creditor, 352 separate accounts and one entire running account, 353; Appurtenances, what are, 682 Arbitration, agreement to submit disputes to, 25S Arbitrator, services of, gratuitous, 851 Architect, biassed and corrupt decisions of, 860 negligence of, 861 Art, oral evidence to explain terms of, 246 Artificers, lien of, 872 See Work and Services. Assent of parties to contracts, 20 conditional, admissibility of oral evidence of, 247 Assets, administration of, 452 Assignees, of shareholders in joint stock companies, liabilities of, 132^ Assignment, authentication of, 2ig 538 INDEX. \Reffrence3 are Assignment — Continued. in fraud of creditors and purchasers, 264, 381. of personal contracts, 426 of debts and chases in aclioi under the Supreme Court of Judicature Act, 426 of policies of life assurance, 426, 940 marine insurance, 426 of bonds, 426 of bills of lading, 426, 1291 what is an, 427 notice of, 428 of covenants, 430 of rents, 428 of annuities, 428 of chases in action, when the foundation of a new contract, 429 of term, liability of executors after, 450. of copyright, 657 of patent rights, 658 of lease after forfeiture, 722 of securities by the creditor to a surety, 1 140 of policy of insurance a;;^ainst fire, 1218 of bills of exchange and promissory notes, 1240 of dock-warrants, i2q2 See Bill op Sale — Covenants running with the Land — Novation AND Substitution — Bankruptcy — Death. Assignment for the Benefit of Creditors, See Composition Deed. Assumption, of agency, 78 Attornment. See Solicitors — Agent. Attornment, of warehousekeepers to the holder of a delivery order, 595. by tenant to landlord, 701, 725 by mortgagor to mortgagee. 1022 by tenant to mortgagee, 1023 Auction, sale by, 21, 215, 388 biddings at, 21, 389 puffers, 510. without reserve, 510 conditions and particulars, 510 misdescription of thing sold, 520 Auctioneer, right of, on sales made by him, 76 authority of, as agent for both vendor and purchaser, 215, 510 deposit ni the hands of. 526 liability of, for deposit, 811 right of, to commission, 930 Sse Agent — Stakeholder. to the sections^ INDEX. eig Authentication, of contracts under seal, 24 See Deed. of contracts by joint-stock companies, 122 of simple tontracts, igg when necessai-y, 199. by a signed writing, 200 of executory contracts for the sale of goods, 207 requisites, 213 signature, 213 by agents, 213 of promises made by infants, 217 of acknowledgments to bar the statute of limitations, 411 of leases, 219 of contracts of service, 883 of deposit of title deeds, 1042 of marriage, 1352 Authority, of agent to make contracts, 57, 58 revocation of, 62, 910 breach of warranty of, 85, 937 damages recoverable, 936 when irrevocable, 911 coupled with an interest, git Average, in cases of insurance, 1191 See General Average — Primage and Average. Avoidance, of contracts on the ground of fraud, 305 determination of the power, 312 effect of, 305, 316 on the ground of duress, 314 • of payments, 354 of contracts of sale of land, 535 of sales of goods, 594, 610, 632 when the vendor can not avoid the contract, 641 when the purchaser can not avoid the contract, 640 determination of the election to avoid, 642 from want of title, 643 recovery of the purchase money, 643 sales of things not in existence, 644 effect of avoidance, 645 of leases, 716, 760 provisoes for re-entry, 718 of contracts for work and services, 853 of mortgages, 1062 as against creditors, 1072 as against the trustee of a bankrupt mortgagor, 1074 of policies of sea-insurance, 1201 540 INDEX. [ The references are Avoid snce — Con tin tied. of bills and notes for want of consideration, isyg of promises of marriage, 1354 See Illegal Contracts — Fraud. Award. See Arbitration. Away-going Crops, tenant's right to, 753 Bail Bond, assignment of, 426 See Bond. Bailees, insurance by, against fire, 1215 Bailment for hire, nature and definition of, 784 duties of hirers of chattels, 785 use of chattels let to hire, 7S6 losses from negligence, 786 losses from piracy, robbery, disease, and accident, 787 determination of the bailment, 788 of money to be used for hire, 789 of money in the hands of bankers, R17 of materials to workmen, 879 See Bailment witi-iout Reward — Warehousemen — Carrier;^ — Common Carriers. Bailment without reward, gratuitous loans, 7go liabilities of" ihe borrower, 791 negligence of borroAver, 7qi loss from ordinary casualties, 792 misuser by borrower, 793 want of skill, 793 restoration of thin'^ borrowed, 794 loss by robbery, fire, or inevitable accident, 995 eviction by title paramount, 795 implied obligations of the lender, 796 loans to one of several partners. 797 to registered companies, 798 damages in action for not replacing stock, 799 deposit or simple bailment, 800 what is necessary to constitute a deposit, Soi executory and executed jiromise-;, 801 liabilities of the depositary, 802 negligent keeping, 802 ordinary casualties, S02 carelessness on the part of the depositor in selecting a person notoriously unfit to be trusted, S03 theft by the servant of the depositary, S04 to the sections?^ ' INDEX. 54 1 Sailment without reward — Conlimied. use and enjoyment by the depositary of the subject-matter of the deposit, 805 transfer of ihe deposit to a stranger, 806 remedy of the depositor, 806 restoration of the deposit, 807 joint and several deposits, 80S transfers of the subject-matter of the bailment, 8og adverse claimants, 809 eviction by title paramount, 810 stakes in the hands of stakeholders to abide the event of a lawful game, 811 power of the depositary to compel rival claimants to establish their title by interpleader, 812 where the depositary holds possession wrongfully, 813 liabilities resulting from the taking possession of goods by finding, 814 liabilities of the depositor, 815 deposit of money made with one of several partners, S16 •deposit of money with bankers, 817 limitation of actions to recover deposits in the hands of bankers, 817 deposit of bills, notes, and securities in the hands of bankers, 818 receipt of cheques by bankers on account of their customers, 819 duty of bankers to honor the drafts of their customers, 820 payment of cheques, 820 under suspicious circumstances, 821 negligence in payment of cheques, 8:^1 joint accounts and joint deposits with bankers, 822 deposits and accounts with bankers in the names of trustses, agents, and receivers, 823 separate accounts opened by the same person in different capaci- ties, 824 loss of trust money in the hands of bankers, S25 payment of forged cheques, drafts, and orders on bankers, 826 forgery facilitated by the negligence of the customer, 826 forged endorsements, 827 cheques paid by mistake, 828 payment of cheques at branch banks, 829 crossed cheques, 830 lien of bankers, 831 damages for non payment of cheques, 832 inandate or gratuitous commission, 833 non-feasance and misfeasance, 834 bailment of money and chattels to be carried gratuitously, 835 loss or damage from negligence, 835 bailments of chattels to be mended or repaired gratuitously, 836 employment of unskillful persons, 836 custody and safe keeping of the chattel, 837 542 INDEX. ' {References arc Bailment ivithout reward — Contiiined. bailment of money for investment, 838 bailments of living animals, 839 negligent management, 839 bailments of perishable commodities, 840 use of the subject-matter of the mandates, 841 theft and negligence by servants of the mandalary, 842 payment of expenses, 843 of taskwork, 844 See Bankers — Borrowing. Bankers, contracts with, 34 payment between bankers and their cus'.omers, 348 deposit of money with, 817 limitations of actions against, 817 deposit of bills and securities with, 818 receipt of cheques by, 819 general duties and liabilities of, 820 payment of cheques, 820 under suspicious circumstances, S21 negligence in payment of cheques, 821 joint accounts and joint deposits, 822 deposits and accounts in the names of trustees, agents, and receivers, 822 payment by, of forged cheques, drafts, and orders, S26 cheques paid by mistake, 828 payment of cheques at branch banks, 829 crossed cheques, 830 lien of, 831 damages against for non-payment of cheques, 832 Bankers' drafts. See Cheque. Banking companies, registered under the Joint Stock Companies .\ct. See Joint Stock Company. Banking co-partnership, contracts with, 137 liability for frauds of their servants and agents, 139 See Joint Stock. Company. Bank note, payment with stolen, 337 See Bill of Exchange — Promissory Note. Bankrupt, payment to, 349 transfer of executory contracts of, on bankruptcy, 471 right of to trust estates and equitable interests, 472 contracts with, during the bankruptcy, 478 undischarged, rights of, 479 See I'.ANKRUPTCY. to the sections.] INDEX. 543 Bankrupt acts, contracts in contravention of the, 259 Bankruptcy, contracts with bankrupts, 188 with trustees in, iSg contribution between trustees in, igo payment to a banlirupt, 346 release by composition, 369 fraudulent preference by bankrupt, 380, 385 fraudulent transfer, an act of, 3S6 discharge of bankrupt from debts and causes of action 397 from rent and covenants in leases, and from contracts for the sale and purchase of realty, 397 liquidation by arrangement, 399 composition with creditors, 400 effect of discharge on debts contracted abroad, 401 effect of an adjudication in, 470 transfer of executory contracts, 471 trust estates and equitable interests not vesting in the trustee, 472 money in the hands of a banlirupt clothed with a specific trust, 473 sale of property of which the bankrupt was reputed owner, 474 sale of the bankrupt's book-debts, goodwill, &c., 475 transfer to the trustee of contracts in which the bankrupt is intereitec? in right of his wife, 476 transfer to the trustee of the bankrupt's interest in a partnership, 477 contracts made with the bankrupt during, 478 rights of undischarged bankrupt, 479 liability of undischarged bankrupt, 480 liability of trustee upon the bankrupt's covenants and executory contract, 48 1 disclaimer by the trustee, 482 effect of annulling the adjudication, 483 specific performance of sale of debts under, 497 bills of sale, constituting an act of, 1072 mortgages constituting an act of, 1073 of mortgagor, 1073 act of, revoking license to distrain, 1097 of shareholders in unregistered joint-stock companies, 1329 Bankruptcy of purchasers of chattels, before payment of the purchase money, 594-605 countermand of delivery orders, 595-605 intervention of ihe rights of sub-purchasers, 603 See Stoitage in Transitu. Bargain and sale, of lands, 504-541 of chattels, 543-651 See Sale. Baron and feme. See ItusEANn. 544 INDEX. \_References are IBarratry, insurance against, Il63 Barristers, honorary character of services of, 851 Barter, contracts of, 50^ JBenefices, purchase of, 268 bonds for resigning, 269 illegal charges upon, 269 Benefit building societies, contracts with, 150 liabilities of mortgaging shareholders, 150 See Friendly Societies. Betrothment, contracts of, 1 35 1 authentication of, 1352 performance of, 1352 time of performance, 1353 conditional, 1355 avoidance of, by misrepresentation and deceit, 1356 abandonment of, 1359 damages for breach of, 1360 See Promise of Marriage. Betting. See Gaming Contracts. Betting housekeepers, 277 Biddings at auctions, 21, 510 See Auction. Bill of exchange, foreign, interpretation of, 239 given to secure money lost at or lent for play, 279 lecovery of money paid upon forged, 316 payment by, 333 acceptance of renewed, 334 debts secured by dishonored, 335 renunciation by parol of the holder's claim, 364 part payment by, taking a debt out of the statute of limitations, 417 transfer by indorsement and delivery, 1240 restrictive indorsements, 1241 who is to be deemed a bond fide holder by indorsement, 1242 intermediate infirmities of title, 1243 when the holder is bound to prove that he gave value for the bill, 1244 fraudulent transfers and indorsements, 1245 accommodation bills, 1246 indorsement of bills overdue, 1247 acceptance of, 1248 presentment for acceptance, 1248 proof of the acceptance, 1249 fictitiiius indorsee, 1250 J,< the sections?^ INDEX. 545 I3ill of exchange — Continued. liability of tlie acceptor, 1251 failure of consideration, 1251 liability of the drawer and indorser, 1252 giving time for payment, 1253 presentment for payiiient, 1254 non-presentment, when excused. 1255 days of grace, 1256 notice of dishonor, 1257 what amounts to notice of dishonor, 1258 posting the notice, 1259 foreign bill, 1260 protest, 1260 noting, 1260 proof of notice of dishonor, 1261 dispensation of notice, 1262 transfer by delivery without indorsement, 1263 payment and satisfaction of, 1266 bills taken up supra protest, 1264 retiring of bills by acceptors and indorsers, 1265 bills and notes for the payment of sums under £1, 1273 bankers' cheques, 1275 summary remedy for non-payment of bills, notes, and cheques, 1277 cancellation of, 1278 proof of want of consideration, 1279 alteration of bills, 1280 immaterial alterations, 1281 loss of bills and notes, 12S2 damages in action on, 1283, 1284 acceptance by agents, 82, 1285 liability of agent on, 1286 acceptance by partners, loi, 1287 in fraud of the firm, lOI by directors or trustees of joint-stock companies, 1289 by railway directors, 128 Sill of lading, acceptance of, 560 shipment and carriage of gootis under, 572, 951 countermand of delivery under, 602 transfer of, 604, 1291 assignment of, 1291 See Demurrage — Stoppage in Transitu. JBill of sale, fraudulent, 263, 381 marks of fraud, 381 of ships, 649 of fixtures, 651 of goods and chattels, 1056 of after-acquired property, 1057 54^ INDEX. ^References aie Bill of sale — Continued. by judgment debtors, 1058 registration of, 1059 renewal of, 1060 what is, i:o6i apparent possession of grantor, 1062 requisites of the affidavit, 1063 description of the residence and occupation of the grantor, io6j of the attesting witness, 1065 proof of the time of execution, 1066 effect of, 1067 of assignment of, 1068 of agreement for, 1069 priority of holders of, 1070 evasion of registration, 1071 void as against creditors, 1072 constituting an act of bankruptcy, 1073 licenses to distrain. 1095 revocation of license by bankruptcy. 1097 registration of bills of sale of fixtures, 1107 6>^ Fraud — Avoidance of Contracts. Board and lodging, 772 See LoDGiNG-HousE Keepers. Boards of health, contracts with, 145 Bonds, nature and requisites of, 230 foreign interpretation of, 239 recovery of money paid upon forged bonds, 316 assignable, 426 transfer of, by death, 446 penal obligations, 492 to secure faithful services, 11T7, 1120 to partnerships and associations, I121 by partners, 1 143 by one partner in fraud of the others, 1143 by railway directors. 1335 to marry, 1350 See Penalties. Borrov^ing and lending, for gaming purposes. 2S0 nature and chVct of the contract of, 7S9 loans of money, 7S9 general dutie-^, obligations, and liabilities of the borrower, 791 restoration nf iliings borrowed, 794 obligations and duties of the lender, 796 See r.AILMF.NT without RkWARD. by one of several parlners, 797 to the sections.'] INDEX. 547 Borrowing and lending — Continued. by registered joint-stock companies, 798 by railway directors, 1334 Bottomry, nature and effect of, logg •i^'hen the shipmaster may borrow money on, 1 100 priority of the latest bond, lioo Bought and sold notes, nature and effect, 551 signature of, by brokers, 214, 553 discrepancies between them and the entry in the broker's books, 551 Boundaries, of estates, duty of tenants to preserve, 713 Breach, of contract, iff CONTRACT, of covenant. See Covenant. of promise of marriage, 1360 See Promise of Marriage. of warranty. See Warranty. Brokers, right of action of, for the price of goods sold by them, 76 of policy brokers on policy, 76 must be licensed, 294 sales by, 550 bought and sold notes, 551 agency of, 909, 936 rights and liabilities of, as between themselves and their principals, 913 insurance brokers, 915 share brokers, 916 stock brokers, 916 policy brokers, 928 lien of, 932 See Agent — Bought and Sold Notes. Bugs, nuisance of, rendering houses uninhabitable, 697 in the case of an unfurnished house, 697 in the case of ready-furnished apartments, 771 Building contracts, specific performance of, 497 nature and effect of, 857 conditions precedent, 858 architect's certificate of approval, 859 See Certificate. unfinished or defective work taken possession of by the employer, S63 substantial performance by builders, 864 abatement of contract price, 865 time of performance, 866 penalties to secure performance, 867 548 INDEX. [References are Building contracts — Continued. destruction of the work before payment, 869 deviations from the contract, extras, measure and value, 870 prevention of performance, S71, 88t liabilities of builder for negligence and want of skill, 873 work rendered useless by negligence, 875 damages for prevention of performance, 881 See Work and Ser'S-ices. Building societies. See Benefit Building Societies. Buying and selling. See Sale. Bye-laws, of railway carriers, 1007 By-gone services, not constituting a valid consideration for a promise, 5 rendered at the previous request of the promisor, 11 Calls, on shareholders, payment of, as between vendor and purchaser, 665, 669 on contributories constituting specialty debts, 1323 See Tkansfer of Shares. Cancellation, of contracts, 391 of bills and notes, 391, 127S of leases, 761 Capture, loss b)', 1166, iiSS Cargo, hypothecation of, 1103 Carriage of merchandise, on the high seas, 939 on land, 976 See Carriers by Water — Charter Parties — Carriers by Land. Carriers, delivery of goods to, by vendor, 571 delivery under bill of lading, 572 carriage of passengers, 976 See Carriers I!V Land — Carriers by Water — Common Carriers. Carriers by land, not being common carriers, 976 carriage of passengers and merchandise by, 976 injuries to passengers and goods, 976 loss of goods or money by the way, 977 contracts for the transmission of messages by electric telegraph companies, 1015 limitation of liability of electric telegraph companies, 1015 Carriers by water, contracts made abroad, interpretation of, 240 to iieseciions.] INDEX. 549 Carriers by water — Continued. not being common carriers, 938 contracts for the carriage of merchandise, 938 contracts of affreightment, 934 charter-parties, 939 when the contract operates as a demise or bailment of the ship, 940 parties to charter-parties, 941 performance of the terms and conditions of the contract, 942 representations in charter-parties, 943 substantial performance of conditions precedent, 944 time of performance, 945 reasonable time of performance, 946 waiver of time of performance, 947 mode of performance, 948 complete cargo, 94S impossibility of performance, 949 contracts to procure and carry cargoes and merchandise, 949 implied authority of agents of ship charterers, 950 shipment and carriage of merchandise under bills of lading 951 countermand of the shipment, 952 re-delivery of the goods to the consignor, 952 loss of, or damage to, goods by the way, 953 implied promise to carry safely, 954 limitation of liability by special contract, 955 loss by the act of God, dangers and accidents of the seas and navigation, 956 losses occasioned by negligence or misconduct, 957 proof that the loss was by negligence and not by a peril of the sea, 958 loss by fire, 959 limitation of the responsibility of owners of ships by statute, 959 losses occasioned by the negligence of licensed pilots, 960 delivery of goods by shipowners, 961 losses on board lighters conveying goods from the ship to the shore, 962 payment of the freight or hire, 963 calculation of the freight, 964 payment pro rata, 965 time freight, 966 shipowner's lien for the freight, 967 payment of freight by the consignee, 967 liability of freight resulting from the acceptance of goods under bills of lading, 96S 55° INDEX. {^References are Carriers by via-tex —Ccntittued. stipulated payments in lieu of freight extinguishing the right of lien, 969 retainer of goods in the Queen's warehouse for freight, 970 payment of demurrage in charter-parties and bills of lading, 971 primage and average, 972 general average and contribution, 973 damages for breach of charter-parties, 974 restrictions on carriage of dangerous goods, 975 See Common Carriers — Railway Carriers. Carriers without reward, 835 Cattle, agistment of, 839 Caveat Emptor, doctrine of, when applicable in sales of land, 538 in sales of chattels, 614, 616, 638 Certificate of approval, of work by architect, 859 corrupt withholding of, 861 relief against, 860 Certificate of Proprietorship of Shares, mortgage of, 1108 Chain-cables, illegal sale of, 288 Champerty, avoidance of contracts by reason of, 257 Charter-party, foreign, interpretation of, 240 nature and effect of, 939 parties to sue, and be sued on, 941 performance of, 942 representations in, 943 substantial performance of conditions precedent, 944 time of, 945 waiver of time as a condition precedent, 947 See Time of Performance. mode of, 948 impossibility of, 949 demurrage under, 971 damages recoverable for breach of, 974 Charterer, liability of, for stores furnished for the use of the vessel, 71 implied authority of agents of, 950 Chattels. See GouDS and Chattels. Chemists, sale of medicines by, 293 right of action for charges, 293 U the sections.'] INDEX. 5 5 1 Cheque, payment by, 336 receipt of, by bankers on account of their customers, 819 payment of, by bankers, 820 by one of several joint depositors, 822 by one of several joint ovi'ners of a sum of money, 822 by trustees, 823 payment of forged, 826 paid by mistake, 828 crossed, 830 damages recoverable in actions against bankers for non-payment of, 832 nature and requisites of, 1275 post-dating of, 1275 presentment of, 1276 effect of keeping an unreasonable time, 1276 summary remedy for non-payment of, 1277 •Children. See Infant. Chose in action, contracts founded on, 373 assignable bonds, 426 assignment of, 429 husband's right to wife's, 466 See Bill of Exchange — Promissory Note. Church'wardens, contracts with, on behalf of the parish, 146 Club Committees, contracts with, 142 liabilities of the members, 142 non-liability of subscribers, 142 See Directors. Coals, sale of, 283 Cognovit, nature and effect of, 1053 Cohabitation, liabilities resulting therefrom, 187 contracts by kept mistresses, 187 Commencement, of leases, 683 Commission Agents. See Agent. Commissioners of Public Works, &c., contracts with, 143 Commissions in the Army, sale of, 266 Committees, contracts with, 113, 130 of unregistered joint-stock companies, 140, 1342 of clubs, 142 See Provisional Committees. 552 INDEX. {References are Commodatvim, or gratuitous loan, 7150-799 See Borrowing. Common Carrier, who is to be deemed, 979 nature and extent of tlie duties of, g7g public profession of railway companies made through the medium of their time-tables, 980 booking names in coaches, 98 1 implied undertaking of railway companies to forward passengers with- out unnecessary delay, 982 contracts for the carriage of passengers, 983 limitation of the liability of common carriers by public notice 984 carriage of gold and silver jewellry, title deeds, glass, silk, &c., 985 common carriers' act, gS6 declaration of value by consignors, 986 losses from robbery and theft by the common carriers' servants, 987 liabilities of the common carriers' servants, 988 inability to rid themselves by public notice of the duties imposed apons them by the custom of the realm, 989 limitation of the liability of, by special contract, 989 protection of, by special contract from loss by tire and sea risks, 990 stipulations exempting common carriers by water from loss of luggage unless a bill of lading has been signed for, 991 when the carrier may, by special contract, exempt himself from all responsibility for damage to certain classes and descriptions of goods in transitit^ 992 void limitations of liability, 993 loss of passengers' luggage by railway companies, 994 losses occasioned by the negligence of the consignor, 995 defective packing, 995 inability of railway and canal companies to exempt themselves from responsibility for negligence, 997 declaration of value, 998 special contracts with railway and canal companies for the carriage of goods and chattels, 999 unjust and unreasonable conditions in special contracts for the car- riage of chattels by railway or canal, 1000 what are just and reasonable conditions, looi liability of a railway company during sea transit, I002 implied authority of the servants of a railway company to bind the company by special contract, 1003 acceptance of goods to be carried beyond the district travelled over by the carrier to whom they have been delivered, 1004 effect of giving the carrier a wrong direction for the delivery of the goods, 1005 payment of the fare or hire, 1006 carriers' lien, 1006 common carriers' charges, 1007 to the secHons:\ INDEX. 553 Common Carriers — Continued. railway charges, 1007 bye-laws, 1007 carriage of packed parcels, 1008 charge for luggage by excursion trains, 1009 notice of action to railway companies, loio parlies to be made plaintiffs in actions against carriers for the loss of, or injury to goods, ion joint bailments to common carriers, 1012 parties to be made defendants, 1013 carriage of goods and passengers over distinct lines of railway 1013 damages in actions against common carriers, 1014 proof of a jus tertii by the common carrier, 1016 Common Carriers' Act, 986 C/ompany. See Joint-Stock Company. Compensation, in damages for breach of contract, 484, 496 See Damages. Competency, of parties to contracts. See Parties to Contracts. Composition Deeds, with creditors, 264, 380, 400 private underhand agreements to secure to one creditor better terms than another, 259, 264 fraudulent concealment by debtors, 259, 264 ander the bankrupt acts, release by, 264, 369 See Fraud — Fraudulent Preference — Fraudulent Con- CEALMENT. Compounding Felonies or Misdemeanors, contracts for, 258 See Illegal Contract. Concealment, of agency, 51 of latent defects in leaseholds, 696 See Fraudulent Concealment. Condition, words of, amounting to a covenant, 228 Conditional assent, admissibility of oral evidence of, 247 Conditional Contract, specific performance of, 497 Conditional Liabilities, limitation of action for, 407 Conditional Promise of Marriage, 1355 Conditional Release, 367 Conditional Sale, 574, 633 Conditional Tender, 357 554 INDEX. [References nre ■Conditions Precedent, interpretation of, 232 distinguished from independent promises, 234 waiver of, 233 nature of, 32T to payment for work and services, 855, 858 in charter-parties, 944-946 in guarantees, H16, 1125 See Performance. Ccnditions of sale, signature of, by auctioneers, on behalf of vendors and purchasers, 215, 510 can not be contradicted or altered by the verbal declarations of the auc- tioneer in the auction-room, 510 proof of notice of, 510 effect of misdescription of property in, 520 Confidential agents, disabilities of, 313 Consent of parties, discharge by, 359 Consideration, for the enforcement of a simple contract, 3 absence of, 3 insufficient, 4, 16 bygone transactions, 5 failure of, 6, 316 written promises vi'ithout, 7 good and valuable, 8 work and services, 8 consideration of loss, 9 services to a third party at the request of the promisor, 10 bygone services rendered pursuant to previous request, 1 1 implied request, 12 moral obligation, 13 suspension, forbearance, or abandonment of legal or equitable rights, 14 trust and confidence, 15 inadequacy of, 16 unilateral promises, 17 mutual promises, 18 contracts with infants, 19 assent of the parties, 20 statement of, in guarantees, 11 14 failure of, in case of bills of exchange, 1251 proof of want of, in bills and notes, 1279 Contingent liabilities, limitation of actions for, 407 Continuing breaches of covenants and agreements, 436 of real covenants, rights of heirs upon, 441 to I 'le sections. 1 INDEX. 555 Continuing guarantees, 858 See Guarantee. Constructive contracts, nature of, 21 Contract, definition of, i unilateral or bilateral, i, 17 principal or accessorial, i by matter of record, I by deed, I See Deed. simple, 2 See Simple Contract. consideration for, 3-16 inadequacy of, 4 mutuality of, 17, 18 with infants, 19, 154 See Infants. with married women. See Married Women. assent of the parties to, 20 authentication of, by deed, 24 by matter of record, 29 by implication of law, 30 See Implied Contracts. parties to, 32, 194 with agents, 49-90, 909-937 with partners, 93-110 See Partnership. with managers, &c., of projected undertakings, 113, 130, 1338, 1346 See Provisional Committees. with corporations, 11 5-1 51 See Corporations. with joint-stock companies, 121, 134, 1328 with railyifay companies, 128, 130, 1330, 1347 See Railway Companies. authentication of, by signed writing, 200 sale of growing crops, 206, 656 See Crops. interpretation of, 220-24 1 See Interpretation — Oral Evidence. illegal, 251-315 See Illegal Contracts. performance, 318-325 See Performance. payment, 328-35S See Payment. release, 359-372 See Release. 55^ INDKX. {References are Contract — Continued. accord and satisfaction, 377-387 See Accord and Satisfaction. discharge by bankruptcy, 397-401 See Bankruptcy. limitation of suit, 402-424 See Limitation. assignment of, 426-439 See Assignment — ^Novation and Substitution. transfer by death, 440-465 See Heir-at-Law — Executors and Administrators. transfer by bankruptcy, 470-483 See Bankruptcy. remedy for breach of, 484-496 See Damages. enforcement of, 497-506 See Specific Performance — Injunction. for the sale of lands, 507-542 See Sale of Lands. sale of goods and chattels, 543-650 warranties and conditional sales, 574, 611—635 See Sale of Goods and Chattels — Warranty. sale ofincoiporeal hereditaments, 652-674 stocks and shares, 659-673 See Incorporeal Hereditaments. demise of lands, 675-762 See Landlord. demise of lodgings, &c., 763-779 See Landlord — Lodging-house Keeper — Innkeeper. bailment for hire, 784-789 See Bailment for Hire. gratuitous bailment, 790-843 See Bailment without Reward. taskwork, 344-S3i See Work and Services. hiring and service, 882-goS See Hiring and Services. apprenticeship, 903-908 See Apprenticeship. carriage by water, 938-975 See Carriers by Water. carriage by land, 976-977 See Carriers by Land. common carriers, 97S-1014 See Common Carrier. mortgage, 1017-1056 See JIORTGAGE. hypothecation, 1040-1103 See Hypothecation. io the sections?^ INDEX. 557 Contract — Conliuued. pledge, 1076-1095 &<-■ Pledge. suretyship, 1III-H43 See Guarantee. marine insurance, 1144-1201 See Marine Insurance. fire insurance, 1202-1219 See Fire Insurance. life insurance, 1 220-1238 See Life Insurance. bills of exchange and promissory notes, 1239-1289 See Bill of Exchange — Promissory Note. of partnership, 1290-1314 See Partnership. of and concerning marriage, 1348-1373 See iMarriage — Husband. Contribution, between trustees in bankruptcy, 190 between co-sureties,, 1139 general average, 1191 See General Average. between partners, 1307 between shareholders, 1321 between members of committees of management, 1340 See CONTRIBUTORIES. Contributories, parties liable to be made, 1321 calls on, constituting specialty debts, 1323 limitation of liability of, 1325 release of liability by transfer, 1326 by forfeiture, 1327 transfer of shares, and shifting of the liability to contribute from the trans- ferror to the transferree, 1328 liabilities of husbands, real and personal representatives, heirs at law devisees, and assignees of shareholders, as contributories, 1329 to inchoate railway and parliamentary works' companies, 1347 Convicts, contracts with, 196 Convoy, stipulations as to sailing with, in policies of insurance, Co-Paroenerg, right of action of, 45 Co-partnership. See Partnership. Copies. See Attested Copies — Certified Copies. Copyright, sale of, 657 Corporations, contracts with, 115-153 55^ INDhX, [Keferences are Corporations — Continued. want of mutality of obligation, 117 implied, 118 with trading corporations, 119 informal contracts where the corporation has had the benefit, 120 contracts with joint-stock companies. See Joint-Stock Companies. contracts with railway companies. See Railway Companies. contracts with companies authorized to sue in the name of their public ofEcer, 132 liability of the public officer, 133 contracts with mining companies. Sec Mining Companies. Corporeal hereditaments, sale of, 508, 542 See Sale of Lands. Costs, of previous legal proceedings, when recoverable as damages, 4S9 Co-sureties. See Contribution — Guarantee. Counsel, authority of, 74 Countermand, of shipment of goods, 952 County court judgment, effect of, 394 Covenant, non-execution by covenantees, 37 in a feigned name, 40 by one person on behalf of another, 41 joint and several, 43 with tenants in common, 44 witiT joint tenants, 45 by agents, 92 what amounts to, 227 words of proviso and condition, 228 by implication of law, 229, 1400 dependent and independent, 231, 234 mutual, 235 release of, before breach, 3'^i2 assignment of, 424 rights of heir upon, 440 rights of executors and administrators upon, 443-450 transfer by death, .^47 after an assignment of the term, 450 injunctions to restrain breach of, 503 for title to realty, 535 for quiet enjoyment, 691 to pay rent, 692 to the sections?[ INDEX. 559 Covenant — Contin tied. not to let, 6g3 to repair, 710 restricting use of the demised premises, 715 forfeiture for breach of, 717 effect tif surrender on breach of, 728 breach of, by equitable assignees, 762 damages for breach of, 765 destruction of buildings by fire or tempest, 767 to consume hay or straw on a farm, 768 to insure, 1238 between partners, 1303 to marry, 1350 Covenants not to sue, 370 Covenants running with the land, privity of estate and privity of contract, 430 covenants between landlord and tenant, or lessee and reversioner, 432 covenants real annexed to reversionary estates, 433 assignees of grantees of a license, 434 requisites of the covenant, 435 parties entitled to sue, 436 continuing breaches, 436 implied covenants, 437 covenants annexed to the estates of joint tenants and tenants in common, 438 assignments of rents and annuities, 439 rights of the husband to the wife's, 466 Coverture, disability of women under, 168 suspension of, 1S5 dissolution of, by death, 186 See Husband. Credit, sale of goods on, 5S4 Creditor, payment according to direction of, 330 debtor, administrator to, 425, 461 Creditors, fraud on, 264 contracts, delaying or hindering, 264 See Composition Deeds — Bankruptcy — Fraud. Crops and growing produce, sale of, 206, 656 See Bill of Sale — Away-going Crops. Cumulative Stipulations, 319 Current coin, payment f(n- work in, 297 560 INDEX. \References are Custom and usage, impliedly annexed to the expiess terms of a written contract, 244 admisbibility of oral evidence of, 244 influence of upon tire meaning of words, 245 in the case of policies of insurance, 115S, ii6o Custom of the country, regulating the rights and liabilities of outgoing and ingoing tenant-, 753 Damages, for breach of contract, 484 nominal, 485 g^rneral, 486 special, 4S6, 488 recovery of interest generally, 487 costs of previous legal proceedings, 4S9 pecuniary liabilities swelling the amount, 490 excessive, 491 penal obligations, 492 penalties for breach of contract, 494 liquidated damages, 495 penalties under denomination of, 496 breach of contract for the sale of realty, 52S non-performance by the purchaser, 528 non-performance by the vendor, 529 breach of covenants for title, 535 non-performance of a contract for the sale of goods and chattels, 588 by the purchaser, 588 by the vendor, 5S9 breach of warranty, 646 special damages, 647 re-sale with a warranty, 647 costs of legal proceedings, 647 breach of contract to grant a lease, 763 in action of use and occupation, 764 breach of covenants for quiet enjoyment, 765 of covenant not to assign, 766 of covenant to repair, 767 destruction by fire or tempest, 767 dilapidation by tenants, 76S of covenant to consume straw on the farm, 768 for holding over, 767 actions for not replacing stock, 799 non-payment of cheques by bankers, S32 contracts for performance of work, 881 building contracts, 881 prevention of performance, 881 wrongful dismissal, 897, 907 to the sections.'] INDEX. 561 J3amages — Contin ued. refusing to employ, 907 actions against apprentices, 908 breach of warranty of authority by agents, 937 breach of charter-parties, 974 actions against carriers, 1014 breach of contracts of indemnity, 1141 banlves lo bring about a marriage, 1362 fraudulent Preference, by bankrupt, 259, 264, 3S1-386 recovery of money paid by way of, 264 See Composition Deeds — Fraud. Fraudulent Release, 368 freehold Land Societies, contracts with, 151 freight, payment &f, under charter-party, 963 payment pro rata, 965 time freight, 966 shipowners' lien for freight, 967 payment of freight under bills of lading, 968 retainer of goods for, by custom-house officers, 970 "■ freight Policies, 1175, 11 86 See Marine Assurance. friendly Societies, contracts with, 147 loans of money to, 148 salaries of officers of, 152 fruit, sale of, 206, 656 See Crops. funds, sale and transfer of stock in the, 673 furnished Houses and Apartments, letting and hiring of, 20i, 771-774 when infested with bugs and nuisances, 697, 771 liabilities of hirers of, 772 notice to quit, 775 See Lodging-house Keeper — Notice to Quit. furniture, letting and hiring of, 7S4-795 Gambling, in the funds, 276 Oame, sale of, 284 S74 INDEX. [References are Gaming Contracts, 276 lawful and unlawful games. 278 secuiiUt:.-) for money won at play or lent for gaming. 279 gaming policies of insurance, II4S, 1222 General and Particular Average, as used in contracts of insurance, II9I average and total losses, I192 General Average and Contribution, nature of, 1 191 liability of the shipowner, and owners of goods shipped on board, for the payment of, 1191 Goods and Chattels, authentication of contracts for the sale of, 207 things passing by the grant of, 1056 mortgage of, 1055 imperfect hypothecation of, 1095 See Sale of Chattels. GoodwUl, specific performance of sale of, 497 Government agents, contracts with, 86 Grace, days of. See Days of Grace. Grant, of incorporeal hereditaments, 652 licenses operating as, 652 words of reservation, 653 right of way, 652, 653, 655 See Incorporeal Hereditaments. of goods and chattels, X056 See BtLL OF Sale. Grass, authentication of contracts respecting, 206, 656 Gratuitous bailments. See IIailment without Reward. Gratuitous commission. See Bailment without Reward. Gratuitous promises, nature and effect of, 3-4 Gratuitous services, 851 Ground rent, payment of, by tenant under threat of distress by the superior landlord, 702 recovery thereof by the tenant from his own immediate landlord, 702 Growing crops. Jjir Crops. Guarantee, original independent contracts in the nature of a guarantee, 211 nature and effect of, nil authentication of, 210, TI12 primary and secondary liabilities, 1 1 13 statement of tlie consideration, 1114 proposals and offers toguamnteenot amounting to a conclude 1 ontract, ni'j to the sections.} IND EX. 575 Guarantee — Con tin ne, i. coiiciitions precedent, 1116 bonds to secure f.iithful services, IJ17 . extent and duration of the liability of the surety, 1118 release of the surety, iiig discharge of the surety by a change in the service or employment of the principal, 1120 bonds and guarantees under seal to partnerships and associations, 1 121 limitation of the liability of the surety, 1 1 22 continuing liabiliiies, 1 123 guarantees not importing a continuing liability, 1124 conditions precedent to the liability of the surety, 1 125 duty of the person guaranteed, 1126 alteration of the principal obligation discharging the surety, 1127 extension of the time of payment, 112S proof of suretyship where the relation does not appear upon the face of the contract, Ii2g effect of giving time to the principal debtor with reserve of remedies against the surety, 1130 release of the principal debt, 1131 discharge of the surety, 1131 release of the principal obligation, with reserve of remedies against the surety, 1 132 release of one of several co-sureties, 1133 payment by the principal debtor operating as a discharge of the surety, 1 134 fraud on sureties, I135 discharge of the surety by the death of the principal, 1136 death of surely, I137 inden nification of sureties, I138 contribution between co-sureties, 1139 assignments of judgments and securities to enable the surety to obtain indemnification, 1140 damages for breach of, 1 1 41 bankruptcy of principal debtor, I141 recovery of interest on money paid by the surety for the principal, 1142 guarantees by one of several partners in the name of the firm, 1 143 Guardians of the poor, contracts with, 146 Hay and straw, covenants to consume on farms, 754 damages recoverable for breach, 768 Health, contracts with boards of, 145 Heirs, contracts with expectant, 163 Heir-at-law, rights of, upon real and personal covenants entered into with the ancestor. 440 576 INDEX. [References are Heir-at-law — Conliinnd. right of action of, in ;tespect of continuing breaches of real covenants, 441 upon personal .co\;ennnts irelating to the freehold, and affecting the inheritance,. 440 upon covenants annexetil to estate ptir autre vie and terms of years, 443 liabilities of, upon covenants lurwiKg with the land, 444, 447 covenants in which he is expressly named, 447 See Covenants running with the Land. of shareholder in joint-stock eompany, liabilities of, 1328 Jlereditaments, sale of corporeal. See Sale ok L.\nds. sale of incorporeal. See Incorporeal Hereditaments. Highway acts, contracts prohibited by, 296 .Hiring of chattels, 784-790 See Bailment FOR Hire. Hiring and service, contracts of, 882-908 authentication and proof of the ^contract, 212, 883 yearly hirings, 884 domestic servants, 884 indefeasible and defeasible ye&rly hirings, 885 month's warning or a month's wages. SS5, S90 hiring by the month and week, 886 service at will, -877 rights and liabilities of master and servant, 838 dismissal of skilled servants for incompetency, 889 for misconduct, 890 ■discharge'by order of justices, 591 notice to leave, 892 warning, 892 payment of wages, 893 disability from sickness, 894 wrongful dismissal, 895 month's wages in lieu of a month's warning, 896 damages for a wrongful dismissal, 897, 907 ■ dissolution of the contract, 897 wages fro ratd, 897 amount of wages recoverable, -898 deductions, Sg8 presumption of payment of wages, 899 jurisdiction of justices, 900 by the death of the parties, goi .seamen's wages, 902 jcontracts of apprenticeship, 903 rights and' liiabilities of parties tO'indeialiai-es of apprenticeship, 904 misconduct of the apprentice, Q05 <■<> the sec/ions.] INDEX. 577 Siring and service — Continued. dissolution of the contract, 905 discharge by award of justices, 906 damages for wrongful dismissal, 907 against apprentices, go8 Holding Over, by one of two joint tenants, 709 after the expiration of a lease, effect of, 743 Honorary Services, by barristers, &c., 851 Horse Races, 210 Horses, sale of, in market overt, 546, 628 See Warranty. letting and hiring of, 791, 792 borrowing and lending of, 791, 792 See Bailment without Reward. House Agents, duties and responsibilities of, 919 right of, to commission, 930 when their authority has been revoked, 931 Houses, demise of uninhabitable, 697 Husband, right of action upon the wife's contracts, 168 wife's right by survivorship, i6g, 1393 inability of married women to bind themselves or their husbands by deed, 170 authority of the wife to sign writings, 171 loans of money to the wife, 172 sale of goods to the wife, 173 proof of the assent to the wife's contracts, 174 proof of credit given to the wife, so as to exempt the husband from lia- bility, 175 remedies of creditors against the separate property of the wife, 176 proof of the marriage, 177 release from liability upon the wife's contracts after adultery, 178 desertion by the wife, 179 by the husband, 180, 1401 explusion of the wife, 181 liability for necessaries during a separation, 182 effect of a decree for a judicial separation, 183 orders for the protection of the property and earnings of a deserted wife, 184 transportation of the husband for a term of yesrs, 185 ■dissolution of the coverture by the death of the husband, 186 liabilitie.-^ resulting from reputed marriages, 187 illegality of contract providing for future separation, 254 right to the \\\i^'?,i:hosi's in avtion, j\bt, 1380 in.— 37 578 INDEX. {Refa-eticei- art Husband — Continued. covenants running with the land, 466 contracts made by the wife before marriage, 468 rights upon the wife's contracts by statute, 467 liabilities of the surviving wife, 469 bankruptcy of, 476 of female shareholder, liability of, 1329 wife's equity to a settlement, 1369 wife's savings, out of her separate allowance, 1380 gifts to the wife, 1381, 1395 feme covert executrix or administratrix, 13S2 release by marriage, 1383 deeds of separation, 1384 subsequent reconciliation, 1385 wife's right of action in her own name, 1386 after separation, 1386 effect of a decree for a divorce, 1387 for a judicial separation, 1388 dissolution of the coverture by the death of the wife, 1389 rights of the husband by survivorship, 1389 recovery of money or property belonging to a deceased wife, 1390 rights of the surviving husband as administrator to the wife, 1391 liabilities of the surviving husband, 1392 wife's rights by survivorship, 1393 unrecovered choses in action, 1394 gifts to the wife during marriage, 1395 paraphernalia, 1396 liabilities of the surviving wife, 1397 indemnification of the wife out of the estate of her deceased husband, 1398 implied promises by the husband to provide for his wife, 1401 Hypothecation, nature and effect of 1019 deposit of title-deeds as security for the payment of a de'^t, 1041 authentication of the deposit as a charge on realty, 1042 parties entitled to make tlie deposit, 1043 extent of the lien 1044 depository's right to have tlie estate sold, 1045 liens on estates for unpaid purchase-money, 1046 priority of equitable liens, 1047 rent-charges on lands and tenements, 104S registration of rent-charges and annuities, 1049 power of distress, entry and sale, 105: extinguishment of rent-charges, 1051 registered judgments, 1052 warrants of attorney to enter up judgment ai-,d tognovils, 1053 charges on lands by statute merchant, statute staple, and recog"- nizance, 1054 imperfect hypothecation of goods and clia;tels, 1095 to the sections:] INDEX. ^yg Hypothecation — Continued, licen.-es to distrain to secure payment of a debt, logs registration of licenses to seize and sell goods and chattels, iog6 revocation of the license by act of bankruptcy, 1097 hypothecation of ships, 71, logS maritime liens, 109Q bottomry, IO99 power of hypothecation of the shipmaster, 71, iioo lien on vessels causing damage, iioi prir>rity of maritime liens, 1102 hypothecation of cargoes and merchandise, 1103 equitable mortgage of shares and stock, 1 1 10 Illegal Contracts, by registered joint-stock companies, 124 immoral contracts, 251 contracts tending to promote fornication and prostitution, 252 contracts against public policy, 253 contracts providing for the future separation of hnsband and wife, 254 contracts in restraint of marriage, 255, 1348 maintenance, 256 champerty, 257 contracts obstructing or interfering with the administration of public justice, 258 contracts in contravention of the policy of an act of parliament or of the bankrupt acts, 259 contracts for the eva-ion of the registry, licensing, and excise acts, 260 parish indemnities, 261 sale of letters of recommendation and public offices of trust, 262 contracts in fraud of masters and employers, 263 fraud on creditors, 264 contracts made illegal by statutes, 265 sale of offices, 266 sale of pensions, 267 simoniacal contracts, 268 resigning and charging benefices, 269 contracts in restraint of industry and trade, 270 trades unions, 271 contracts restraining the exercise of a trade or profession in particular localities, 272 contracts creating monopolies, 273 contracts with foreign enemies> 274 stock-jobbing, 275 gaming contracts and wagers, 276 betting-hou-ie keepers, 277 lawful ^ames, 278 580 INDEX. \_References are Illegal Contracts — Continued. notes, bills, and mortgages given to secure money won at, or lent for play, 279 money knowingly lent for gaming, 2S0 usury laws, 281 sale by illegal weights and measures, 232 illegal sale of coals, 283 illegal sale of game, &c., 284 illegal sale of spirituous liquors, 285 illegal sale of poison, 256 illegal sale of petroleum, &c., 287 chain-cables and anchors, 288 smuggling, 289 illegal sale of exciseable articles, 290 Sunday sales and trading, 291 contracts for prohibited services, 292 unauthorized medical practitioners, 293 unlicensed brokers, 294 uncertificated solicitors, 295 contracts by waywarden^, 296 illegality of contracts for the payment of work otherwise than in current coin, 297 the truck system, 297 divisible contracts, part being good and part bad, 299 indivi^.ibIe, illegal, and void contracts, 300 void foreign contracts, 301 effect of avoidance, 302 money in the hands of depositaries and stakeholders, 304 avoidance of contracts on the ground of fraud and unfair dealing, 305 false representations, 306 by directors of companies, 309 fraudulent concealment, 307 fraud by means of agents, 308 effect of fraud, 311 cijn^tructive fraud, 313 determination of the power of avoidance, 312 fraudulent misreading of a deed, 313 dure.-.s, 314 mistake, 315 recovery of money paid for forged bonds, forged shares, and void securi- ties, 316, 1411 money received under, 316, 1412 illegal pledges, 1104 illegal contracts by railway companies, 1330 for promoting a marriage, 1348 illegal marriages, 1376 Imbecility. See Lunatics. Immoral Contracts, 251 See Illegal Contracps. to the sections.'] INDEX. 58 1 Implied Contracts, nature and efTect of, 30, 13^9 division of, 31 ioiiit interest in implied contracts, 46 liability of agents on, So-yo S,v Agents. with partners, g4 with corporations, 118 between vendor and purchaser, 611-627 See Warranty. annexed to contracts for the sale of shares, 665 of carriers by water, 954 resulting from work and service, 1399 implied covenants, 1400 with persons who undertake a gratuitous trust, or to discharge an office of skill, 1401 in respect of things done under a special contract which has been aban- doned or rescinded, 1402 of sale, 1403 with respect to foreign judgments, 1404 in respect of money paid, 1405-1408 See Money Paid. money had and received, 1408-14 14 See Money Had and Received. account stated, 1415-1418 Implied covenants, as between landlord and tenant, 236, 1400 annexed to estates or intere.->ts ir^ land, 438 Implied promises, ill respect of money paid for another, 1405 Implied requests, 12, 1407 Implied warranty, by the letters of furnished houses and lodgings, 771 of title by pledgors, 1083 in marine insurance, 1151 See Marine Insurance. in fire insurance, 1205 See Fire Insurance. in life insurance, 1223 See Life Insurance. Imposition, money obtained by, 1410 Impossibility, of performance of contracts, 327 See Performance. Inadequacy of consideration, 4, 16 of price showing fraudulent transfer, 383 582 INDEX. [References are Inolosure, by tenants, 759 Income tax, deduction of, from rent, 703 Incoming partners, liabilities of, 109 Incoming shareholders, liabilities of, 1328 Incoming tenants. See Outgoing Tenants, Incompetency, of parties to contracts. See Parties to Contracts. Incorporeal hereditaments, 652 authentication of grants and assignments of, 200-207, 652 sales of, 652 water-courses, 652 licenses of pleasure and profit, 652 licenses irrevocable in equity, 652 reservation of privileges and casements amounting to an express grant, 653 transfer of, 654 right of way, 655 growing grass, 656 copyright, 657 patent right, 658 shares in mining company, 659 shares and letters of allotment, 660 executory contracts for sale of shares, 661, 663 agreements for transfer of shares, 662 mode of performance, 663 time of performance, 664 implied undertakings, 665 payment of calls, 665, 669 rights of scripholders, 666 transfer deeds, 667 transfers in registered companies, 663 registration of transfers, 669 compulsory registration, 670 rectification of register, 671 registration of forged transfers, 672 transfers in public funds, 673 specific performance, 674 Indemnification, of an agent by his principal, 936 of a surety by his principal, 113S-H40 of railway directors, 1337 of surviving wife, 1398 Indemnity, parish, legality ot, 260 against liability for calls on sale of shares, 665 aL;e, 696 of uninhabital)le house'^, 697 rooms infested with bugs, 697. 771 payment of rent, 69S exception of damage by fire, 699 extinction and suspension of the rent by eviction, 700 eviction by railway companies under statutory powers, 701 payment of ground rent by the tenant, 702 deduction thereof from the tenant's rent, 702 deduction of income-tax, land-tax, -eu'ci's'-rate, and otlier out- goings from the rent, 703 distress for rent, 704 extinguishment of the right to distrain by an assignment of the rever- sion, 705 apportionment of rent, 706 .to the sections.'\ INDEX. 5 89 Xandlord and Tenant — Contiuueii. action for use and occupation, 707, 764 constructive occupation, 708 use and occupation by one of several joint tenants, or tenants in common, 709 covenants and agreements to repair, 710 injury or damage done to the demised premises, 711 timber trees, 712 duty of the tenant to preserve the landlord's landmarks and boundaries, 713 repair of fences, 714 restrictive covenants as to user of premises, 715 defeasible leases, 716 forfeiture of leases, 716 disclaimer and forfeiture, 717 proviso for re-entry, 718 effect of re-entry on the lessee's liability on his covenants, 719 waiver of a forfeiture, 720 lessor's right of election, 720 relief against forfeiture, 721 breach of covenants or conditions respecting insurance or payment of rent, 721 assignment after forfeiture, 722 -■surrender, 723 deeds and agreements of surrender, 723 surrenders by act and operation of law, 724 substitution of a new tenant in the place of the original tenant, 725 surrender and acceptance of surrender by joint tenants, 726 non-extinguishment by surrender of derivative estates, 727 effect of ihe surrender on existing breaches of covenant, 729 .notice to quit, when necessary, 729 how the notice may be given, and to whom, 730 form and effect of the notice, 731 alternative and peremptory notices, 731 length of the notice, 732 time of quitting specified in the notice, 733 application of the notice to the current term of hiring, 734 commencement of the current year of the tenancy, 735 calculation of the current year from one of the usual feast days, 736 admissions by the tenant of the commencement of the term, 737 different periods of entry, 738 service of notice to quit, 739 service of notice through the post-office, 740 acceptance of informal notice, 741 -proof of notice, 741 ■waiver of notice to quit, 742 SQO index. \References !!•■' Iiandlord and Tenant— Con/inued. proof and effect of holding over, 743 double yearly value for holding over, 744 double rent for holding over, 745 determination of tenancies by railway notices, 746 recovery of possession, 747 license to eject, 748 ejectment under provisoes for re-entry, 749 where there is no sufficient distress, 750 where the demised premises are deserted, 751 of houses and small tenements, 752 rights of outgoing and incoming tenants, 753 away-going crops, allowances for tillage, manure, &c , 753 sale of straw off the land, 754 removal of superstructures and fixtures, 755 abandonment of the right of removal, 756 right of purchaser or mortgagee to remove fixtures after sui ren- der, 757 non-payment of tithe rent charge by an outgoing tenant, 758 inclosure of waste land by tenants, 759 short form of lease, 759 leases obtained by misrepresentation, 760 cancellation of a lease, 761 equitable assignees, breach of covenants by, 762 damages for breach of contract to grant a lease, 763 in action for use and occupation, 764 for breach of covenant for quiet enjoyment, 765 to assign, 766 to repair, 767 destruction of buildings by fire or tempest, 767 to consume hay or straw on the farm, 768 for holding over, 769 contracts for the letting and hiring of furnished houses and lodgings, 770 implied wanTanLies on the part of lessors of furnished apartments, . 771 rights anj liabilities of lodging-house keepers and lodgings, 772 destruction of buildings by fire, 773 proof of the duration of the term of hiring, 774 notice to quit, 775 lett ng and hiring of stowage and ploces of deposit, 776 room or standing places in factories, 777 lodgings in common inns, 778 who are common innkeepers, 778 duties of innkeepers, 779 protection of the guest from robbery and theft, 780 exemption of the guest's property from distress for rent, 781 innkeeper's lien, 782 gratuitous hjans of really, 7,^3 to the sections.] INDEX. 59 1 Iiandlord and Tenant — Continued. tenancy of mortgagor to mortgagee, 1022 leases by the mortgagor before the mortgage, 1023 leases by the mortgagor after the mortgage, 1024 damages for breach of covenant to insure, 1238 Iiandmarks, authentication of agreements concerning, 205 preservation of by tenants, 713 Land tax, deduction of, from rent, 703 Lands, sale of interest in, 200 Latent ambiguity, 222 Latent defects in things sold, 612, 616-622 Leasehold estates, title to, 516 Leases. See Landlord and Tenant. Lessee and lessor. See Landlord and Tenant. Letters of allotment, sale cf, 660 See Shares. Letters of recommendation, sale of, 262 Letting and hiring, of land, 675-783 See Landlord and Tenant. of chattels, 784-799 implied undertakings on the part of persons letting out shins, horses, and carriages, 784-799 general duties, obligations, and liabilities of the hirer, 785 See Bailment for Hire. Lex looi contractus, 240 Lex loci solutionis, 241 Licenses, to trade with foreign enemies in time of war, 274 by parol do not release covenants, 361 assignees of, 434 of pleasure and profit, 652 irrevocable, 652 to landlords to enter and eject tenants for non-performance of covenants, 748 to distrain and sell chattels, 1095 registration of, 1096 revocation of, 1097 Licensing acts, contracts contravening the policy of, 260 See Illegal Contracts. 59^ INDEX, [References are Xien, for the price of jijoods sold, 592 of innkeepers, 7S2 of bankers, 831 of workmen and artificers, S72 of factors and brokers, 932 of insurance brokers, 933 of solicitors, 934 of ship-masters, 935 for freight, 967 extinguishment of, 9(^9 retainer by custom-hou^e officers, 970 of common carriers, 1006 of j^ledges and pawnbrokers, lOiS, 1092 on land from deposits of titje deeds, 1041-1047 See Equitable Mortgage — Hypothecation. of the unjDaid vendor of hmd, L046 maritime, 1099 upon shares and stocks, mo Xife insurance, contracts of, 1220 with de facto directors, 1221 intere-^t of the assured, 1222 warranties, 1223 conditions, 1223 fraudulent misrepresentation and concealment, !224 principal and agent, 1225 indisputable policies, 1226 risks covered by the policy, 1227 forfeiture of policies, 1228 non-payment of premium, 1228 days of grace, 1228 non-inception of the risk, 1229 return of premium, 1229 waiver of forfeiture, 1230 assignment of life policies, 1231 right of the party interested in the policy to recover the assurance money, 1232 appropriation of the funds of life assurance companies, 1233 winding up of assurance companies, 1234 novation by policy holders, 375, 1235 insurance against accidents, 1236 railway accidents, 7237 breach of covenants to insure., 1238 damages, 1237 liighters, Idsses on board of, 962 Ximitation of Actions, 402 statutes of limitation. 40^2 io the seciions.] INDEX. 593 Xiimitation of Actions — Continued, fee-farm rents and money charged on land, 402 rent and specialty and simple contract debts, 403 what are specialty debts, 404 exception in favor of persons laboring under temporary disabilities, 405 commencement of the time of limitation, 406 contingent and conditional liabilities, 407 unknown and undiscovered breaches of contract, 40S acknowledgments of deeds and specialties, 409 acknowledgments of and promises to pay simple contract debts, 410 form and requisities of the acknowledgment, 411 lost acknowledgments, 412 by one of several joint contractors, or by executors or administrators, 413 to whom the acknowledgment is to be made, 414 exemption of the promise or acknowledgment from stamp duty, 415 part payment of a principal debt, 416 by bill or note. 417 by performance of service or by delivery of goods, 418 by adjustment and settlement of accounts, 419 payment of interest, 420 by one of several joint debtors or co-contractors, 421 by strangers and agents, 422 to strangers and agents, 423 contracts made abroad, 424 suspension of the statute, 425 deposits in the hands of bankers, 817 Ximitation of liiability, repugnant and void limitation of liability 225 to a particular fund, 226 of carriers by water, 955, 959 of common carriers, by public notices, 984 by special contract, 989 void limitations by common carriers, 995 of electric telegraph companies, 1015 of surety, 1 122 of contributories, 1325 of shareholders in joint-stock companies, 1328 Xiquidated Damages, penal obligations, 492 penalties for breach of contract, 494 liquidated damages, 495 penalties under the denomination of liquidated damages, 496 Xiquidation. See Bankruptcy. Xoan, to married women, 172 for gaming, 280 gratuitous, 790 mutuuni and commodatum, 790 III --38 594 INDEX. [References are Loan — Continued, at interest, 789 to partners, 797 to joint-stock companies, 798 to railway directors, 1334, 1335 See Borrowing — Bankers — Bailment. Loan Societies. See Friendly Societies. Local Boards of Health, contracts with, 145 Locus Contractus, how determined. 241 Locus Poenitentiae, enabling parties to withdraw from an illegal contract and recover money paid away, 141 2 Lodging-House Keeper, authentication of contracts with, 201 letting lodgings for prostitution, 252 implied promises of, 771 that the lodgings are reasonably fit for habitation, 771 destruction of buildings by fire, 773 weekly, monthly, quarterly, half-yearly, and yearly hirings, 774 notices to quit, 775 See Notice to Quit — Landlord and Tenant. Long Weight, sale by, 282 Loss or Inconvenience, a good consideration, 9 Loss of Goods, after transfer to purchaser, 565 Loss, of title deeds, 519 of bills and notes, 1282 Luggage, loss of, by railway companies, 994 disguising merchandise as, 994 See Common Carriers. Lunatics, contracts with, 192 Machinery, mortgage of. 1075 Maintenance, 256 Managers, autliority of, 69 of mining companies, liabilities of, 134 See Provisional Committees. Managing Committee. See Provisional Committees. Mandamus, to compel registration of parties as shareholders, 670 to the sections.] INDEX. 595 Mandate, or gratuitous commission, 833 executory promises to undertake a gratuitous office or trust, 833 acceptance of the trust by entering on the employment, 833 non-feasance and misfeasance, 834 acceptance of goods to be carried, mended or repaired gratui- tously, S35 acceptance of money for gratuituous investment, 838 acceptance of living animals, to be nourished and taken care of, 839 perishable commodities to be preserved and kept, 840 use by the mandatary, 841 theft and negligence by the servants of the mandatary, 842 repayment of expenses necessarily incurred by the mandatary in the execution of his commission, 843 Manufactiire, when a contract to, must be authenticated as a contract of sale, 207 or making up of materials, contracts for, 567 negligent or unskillful work, 875 safe keeping and re-delivery of materials, 879 See Bailment— Work and Services. Manufacturers, duties and responsibilities of, 6ig Manure, sale of, off the farm, 754 Marital rights, fraud on, 1356, 1362 Marine insurance, mutual insurance, 1 145 policies of insurance, 1146 voyage and time policies, 1147 valued and open policies, I147 insurable interest, tl4g wagering and gaming policies of insurance, 114S requisites of the contract, I149 matters and things covered by the policy, 1150 implied warranties, I15T seaworthiness of the vessel, 1151 time policies and voyage policies, 1151 express warranties, I152 time of sailing, I153 sailing with convoy, 1 1 54 neutrality, 1155 fraudulent misrepresentation, 1156 fraudulent concealment, 1157 risks covered by the policy, 1158 custom and usage, 1158, 1160 deck cargoes, 1159 intermediate voyages, 1160 596 INDEX. {References are Marine Insurance — Continued. loss by perils of the sea, 11 61 negligence and misconduct of the master or mariners, 1161 sea risks covered by the policy, 11 63 losses from old age and decay and other causes not being perils of the sea, 1164 perils of fire and jettison, 1165 loss by capture and seizure, 1166 restraints and detainments of kings, princes, and people, II67 peril of barratry of the master and crew, 1168 perils, losses, and misfortunes generally, 1169 commencement of the risk, I170 duration and termination of the risk, 1 171 arrival at the port of destination. I172 mooring in safety, 1 1 72 risks in landing the goods, 1173 insurance on profits, I174 freight policies, 11 75 loss uf freight, I176 insurance on passage money, 11 77 deviation from the voyage insured, 1 178 unreasonable delay, 1179 insurances on voyages to several ports and places, 1180 licenses to touch at different ports and places, 1181 total loss and abandonment, 1182 notice of abandonment, 1183 by whom notice of abandonment may be given, I183 form of notice, 1184 effect of notice of abandonment, 1185 insurance on freight, 1 1 86 when the insured may abandon, 1187 total losses, 11 87 capture and re-capture and abandonment, I188 embargo, 1 188 spes recuperandi, 118S unreasonable abandonment, I189 partial loss, 1190 exception of partial losses, iigo general and particular average, 1:91 policies warranted free from average, 1191 insurance on separate balci or packages, 1 192 average and total losses, IT92 exceptions of general average losses and stranding of the vessel, 1193 ■valuation and adjustment of losses, I195 , suing and laboring clause, I194 valued and open policies, 1195 over-valued policies, 1195 calculation of the value, 1195 to the sections.] INDEX. 597 Marine Insurance — Continued. deduction for new materials, 1 195, standard of value and measure of depreciation, 1196 liabilities of underwriters with reference to the amount of their sub. scriptions, 1197 signed adjustments, iigS riglit of the insurer to recover compensation where the loss or damage has been caused by the negligence of a third party, 1199 non-mception of the risk, 1200 over-insurance by mistake, 1200 relurn of the premium, 1200, 1201 void policy, 1201 Maritime interest, 1099 Maritime liens, 1099 See Bottomry. Market overt, definition of, 535 sale of property and of stolen horses in market overt, 546 Marriage, authentication of agreements in consideration of, 2il contracts in restraint of, 255 bonds and covenants to marry, 1350 contracts of betrothment, 1351 authentication of the contract, 1352 time of performance, 1353 excuses for non-performance, 1354 conditional promises of marriage, 1355 fraudulent concealment of material circumstances, 1356 misrepresentation and deceit, 1356 transfer of property by the lady after a promise of marriage, 1357 accidents and mishaps altering the condition of either of the parties, 1358 abandonment of the contract, 1359 breach of promise of marriage, 1360 damages in, 1360 promises of portions and settlements, 1361 fraudulent representations by relations to bring about a marriage, 1362 ante-nuptial settlements by women engaged to be married, 1363 by intended husband and wife, 1364 marriage settlements by infants, 1365 settlements of after-acquired property, 1366 post-nuptial settlements, 1367 in fulfillment of an ante-nuptial contract in writing, 1368 wife's equity to a post-nuptial settlement, 1369 contracts in fraud of settlements and promises of marriage portions 1370 effects of adultery on marriage settlements, 1371 costs of marriage settlements, 1372 598 INDEX. \Referencei are Marriage brokerage, of lemale shareholder in joint-stock companies, 1329 release by, 1383 cuiilracis, 1349 Marriage contract, proof of marriage, 177 rcpuled marriages, 187 nature and .requisites of, 1373 age of consent, 1374 presumption of marriage, 1375 void marriages, 1376 publication of banns and celebration of marriage in a false name, 1377 marriage by license in a false name, 1378 fraudulent celebration of a sham marriage, 1379 See Husband — Marriage. Marriage settlements. See Settlements. Married women. See Husba.\d — Wife. Master and servant, liabilities of the master on contracts made by the servant as his agent, 68 frauds by servants of banking co-partnership, 139 contracts in Iraud of masters, 263 requisites of contracts of hiring and service, 882 authentication of contracts between, 883 yearly hirings — domestic servants, 884 month's warning or month's wages, 885, 896 hiring by month or \\'eek, 886 service at will, 887 liabilities of the master, S33 duties of the servant, 888 dismissal for want of skill, 889 for misconduct, S90 discharge by order of justices, 891 warning — notice to leave, 892 payment of wages, 893, 899 disability from sickness, S94 wrongful dismissal, 895, 897 damages for, 897 presumption of payment of wages, 899 jurisdiction of justices, 900 death of the parties, goi seamen's wages, 902 damages for refusing to employ, 907 implied contracts to pay for services, 1401 contracts of apprenticeship, 903 See Apprenticeship. See Hiring and Service — Work and Services. Master of ship. See Shipmaster. Measure and value. See Building Contracts. io the sections.] INDEX. SQQ Medical practitionersi, unauthorised, 293 Alemorandum in writing. See Frauds, Statute of. Menial servants, who are, 8S4 Mercantile customs, annexation of, to contracts, 244 Mercantile instruments. See Bills of Exchange — Bills of Lading — Dock Warrants — Cheques — Promissory Notes. Merger, of simple contracts in deeds and specialties, 393 Mining companies, contracts with managers and shareholders of, 134 who is a shareholder, 135 sale of shares in, 659 See Shares. Mining shares, title to, 659 sale of, 659 See Shares. Misdescription. See Misrepresentation. Misfeance, by mandataries, 834 Misrepresentation, by agents, 63 by partners, 104 by directors of companies, 309 amounting to a fraud, in the case of sale of lands, 520 sale of chattels, bii, 632-645 in charter-parties, 943 in marine assurance, 1156 in fire assurance, i2o3 in life assurance, 1224 by provisional committeemen, 1346 in contracts of marriage, 1356, 1362 See Fraudulent Misrepresentations — Fraudulent Con- cealment. Mistake, money paid by, when recoverable, 54, 1406, 1409 payment to agents under, 87 contracts made under, 315 Mistresses, contracts with, 187 Money Had and Keceived, money paid away by agents by mistake, 54 money wrongfully received by agents, 87 for the purchase of property to which the vendor has no title, 533, 635, 643 implied promise to pay over money which ought not, in conscience or equity, to be retained, 1408 600 IXDEX. {References are Money had and received — Contiiiitcd. over-payments made by mistake, 1408 recovery of money obtained by oppression, imposition, extortion, deceit,. or fraud, 1410 fees of office wrongfully received by an intruder, 1410 money received by tenants in common, trustees and agents, 1410, 1413 money received upon a consideration that has failed, 1412 money received in exchange for bills, notes, and securities which turn out to be forgeries, 316, 141 1 or under an illegal contract where there is a locus poenitentia or the parties do not stand in pari delicto^ 1412 money received by agents for their principals, 87, 1413 money received by agents to the use of a stranger, 89, 1413 receipt of foreign money, 1414 Money lent. See Borrowing — Loan. Money orders, See Bill of Exchange — Cheque. Money paid, implied promise in respect of, 1405, 1407 implied request to pay, 1407 by mistake, 54, 1406, 1409 Monopolies, illegality of, 273 See Restraint of Trade. Month's ■warning or a month's wages, 885, 896 Monthly lettings, 685 Moral obligation, when it will support an express promise, 13 Mortgage. given to secure money lost at play, 279 specific performance of contract to execute, 497 of realty, 10 1 7 nature of the contract, 1017 of lands and tenements, 1020 rights of the mortgagee when the mortgagor is in occupation of the mortgaged premises, 1021 when the mortgagor becomes tenant to the mortgagee, 1022 when the mortgaged premises are in the possession and occupation of lessees, T023 leases by the mortgagor after the making of the mortgage, 1024 notice of the mortgage to the lessee, 1025 equity of redemption of the mortgagor, 1026 rights of mortgagees, 1027 time within which the right of redemption may be exercised, 1028 accounts to be taken, 1029 registration, I030 re-conveyance, 103 1 foreclosure and sale, 1032 enlargement of the time for payment, 1033 ta the sectiom:\ . INDEX. 6oi Mortgage — Continued. remedies of the mortgagee, 1034 power of sale, 1035 tacking of arrears of interest and incumbrances, 1036, 1038 priority of incumbrances and mortgagees, 1037 loss of priority by fraud, 1039 decree to settle priorities, 1040 deposit of title deeds as security for a debt, 1041 authentication of the deposit, 1042 parties entitled to make the deposit, 1043 extent of the lien, 1044 depositary's rights to have the estate sold, 1045 lien on estates for unpaid purchase money, 1046 priority of liens, 1047 rent charges, 1048-1052 other charges on lands, 1053, 1054 of goods and chattels, 1055 what things pass by a grant of goods and chattels, 1056 bills of sale. See Bills of Sale. registration of mortgages of chattels, 1059 void as against creditors, 1072 of stock-in-trade constituting an act of bankruptcy, 1073 possession and apparent ownership of bankrupt mortgagor, 1062 1074 of machinery, 1075 of ships and shares of vessels, 71, 1098 of fixtures, 1105 right: to fixtures as between mortgagor and mortgagee, 1106 registration of bills of sale of fixtures, 1107 of stock and shares void by reason of reputed ownership, 1109 equitable, nog lien upon shares and stocks, 11 10 See Equitakle Mortgage — Hypothecation — Pledge. Municipal corporations. See Corporations. Mutual conditions, what are, 235 Mutual covenants, 235 Mutual promises, 18 Mutuality, of contract, 18-20, 117 when necessary to make an executory promise binding and irrevocable; 18 not necessaiy where the executory promise is founded on an executed consideration, 18 or in the case of contracts under seal, 23, of relief to both parties in cases of specific performance, 497 Mutuum, or loan for use and consumption, 789 See BORROWI.XG — Loan. 602 INDEX. IRefe erences are Necessaries, for infants, 157 See Infant. for married women, 182 See Husband — Wife. Negative Covenants, enforcement of observance of, by injunction, 503 See I.NJUNXTION. Negligence, of hirer of chattels, 786 of borrower, 791 of lender, 792 of depositary, 802 of depositor, 803 of mandatary, 8j6 of carriers by water, 957, 958, 960 of carriers by land, 976 of common carrier, 983, 986, 997-1005 of consignor, 995 Negotiable Contracts. See Bills of Exchange — Promissory Note. Neutrality, stipulation ofi in policies of marine assurance, 1155 Nominal Damages, recovery of, 485 See Damages. Nominal Partners, right of action of, 94 liabilities of, 107 Non-acceptance, of goods sold, 581 excuses for non-acceptance, 581 Non-delivery, of goods sold, excuses for, 580 Non-feasance, by mandataries, 834 Non-payment, of price of goods sold, action for, 582 Note. See Promissory Note. Notice of Dishonor, to whom to be given, 1257 \\'hat amounts to, 1258 posting of, 1259 proof of, 1261 dispensation of, 1262 Notice to Quit, when necessary, 729 how and by whom to be given, 730 form and effect of, 731 length and duration of, 732-737 U the sections ?i INDEX. 603 Notice to ^\a.t~Continued. wheie there are different periods of entry, 738 service of, 739, 740 acceptance of informal notice, 741 proof of notice, 743 waiver of the notice, 742 railway notices, 746 in the case of demises of lodgings and furnished apartments, 772 Notice of Assignment, 42 S Noting, of foreign bills, 1260 Novation and Substitution, nature and effect of, 372 substitution of a new contract in place of the original contract, 373 release by, 373 drafts and orders for the payment of money operating by way of novation and substitution, 374 novation in the case of life assurance companies, 375 substituted performance of something different, 376 Nudum Pactum, nature and definition of, 3-12 Obligation, moral, 13 mutuality of, 18 Offers, of a reward, 10 of sale, 20 acceptance of, 21 through the post, 22 by telegram, 22 to pay not amounting to tender, 356 of a guarantee, 11 15 of marriage, 1351 See Promise of Marriage. Offices, sale of, 266 See Illegal Contracts. Oppression, money obtained by, 1410 Oral Contracts, for the sale of land, enforcement of, 498 Oral Evidence, of agency, 52 inadmissibility of, to add to, alter, or contradict a written contract, 242 proof of contracts by, 243 of agricultural and mercantile customs, 244 customary meaning of particular words, 245 terms of art, 246 604 INDEX. {References are Oral Evidence — Continued. trade acceptations, 246 of conditional assent, 247 estoppel by deed, 248 of estoppels in pais, 249 contradictable averments in written contracts not under seal, 250 of renunciation of claims on bills or notes, 364 Order and disposition, 383 Orders, in favor of creditors, 373, 374 See Money Orders. Orders for the protection of deserted wives, 184 Order of discharge, in bankruptcy, 397 Outgoing shareholders, liabilities of, 1326, 1328 See Shares. Outgoing tenant, rights of, 753 away-going crops, tillages, manures, &c., 753 sale of straw off the land, 754 removal of fixtures. 755 non-payment of tithe rent charge by, 758 Outlavrs, disabilities of, 197, 463 Overseers, contracts with, 146 See Parish Officers. Ownership, transfer of, in the case of a contract for the sale of land, 512 of chattels, 565 Packed parcels, carriage of, 1008 Paraphernalia, right of the wife to, 1396 Parent, liability of for medical advice and medicines ordered for his children by servant, 6S for wearing apparel and goods delivered at his residence by order of his cliildreii, 156 consent of, to the marriage of minors, 1373 Parish indemnities, legality of, 261 Parish officers, authority of, 146 contracts with, 146 liabilities of, upon contracts entered into by them on behalf of the parish, 146 io the secHonsi] INDEX. 605 Parish OflSoers — Continued. contribution between churchwardens who concur in giving orders, 146 actions by, 146 Parol discharge, of contracts before breach, 359 Parol evidence. See Oral Evidence. Parol license, no discharge of covenant, 360 when pleadable by way of equitable defense, 362 Part acceptance, and receipt of things sold, 206, 207, 558, 559 Partial loss, exception of, in policies of marine assurance, iigo Parties to contracts, parties entitled to enforce simple contracts, 32 strangers to the contract, 33 contracts with bankers, warehousemen, and wharfingers, 34 parties entitled to enforce contracts under seal, 35 trustee and cestui que trust, 36 covenantees not executmg, 37 parties liable upon simple contracts, 38 parties liable upon deeds, 39 covenants in feigned names, 40 by one person on behalf of another, 41 joint and several agreements and promises, 42 joint and separate ilfterests in deeds, 43 tenants in common, 44 joint tenants, 45 joint and separate interests in implied contracts, 46 joint and several liabilities, 47 purchases, 48 with agents. See AGENT, with partners. See Partnership. with corporations. See Corporations. with co-partnerships and associations suing by public officer, 132 with insurance companies. See Insurance Companies. officers of friendly societies, 152 loan societies, 152 trades unions, 152 infants, 153. See Infants. expectant heirs, extortionate contracts with, 163 executors. See Executors, 164 husband and wife. See Husband. bankrupt. See BANKRUPTCY. drunkards, 191 lunatics, 192 alien friends, 193 alien enemies, 194 prisoners of war, 195 6o6 INDEX. {References are Parties to Contracts — Continued. convicts, Ig6 outlaw.-., igy parties privileged from actions and suits, 198 Partition of lands, specific performance of agreement for, 497 Partnership, as between partners inter se, 1293-1314 participation in profits constituting a partnership, 1293 participation in profits not constituting a partnership, 1294 payment of interest out of profits, 1295 joint purchases of goods, 1296 tenancy in common of chattels not constituting a partnership, 1297 conditions precedent to the formation of a partnership, 1298 partnership in profits but notin the capital stock, 1300 introduction of new partners, 1301 contracts between the firm and one of the partners, 1302 contracts between partners individually in their own names, 1303 distribution of the profits of co-partnerships, 1304 action by one partner against another for a balance found to be due on a settlement of accounts, 1305 action for a share of the profit of a particular joint adventure, 1306 contribution between partners to the common loss, 1307 particular transactions not connected with the general account of profit and loss, 130S purchases by one partner on behalf of the firm, 1309 fraudulent use of the co-partnership name, 1310 contracts of partnership induced by fraud, 1311 dissolution of partnership, 1312 distribution of the partnership property and effects, 1313 use of the name of the firm after dissolution, T314 as regards the public and third parties, 93 implied contracts with and promises by fii'ms, 94 trust services by partners, 95 contracts with trustess or directors of co-partnerships, 96 nominal and dormant partners, 105 liabilities of partners upon deeds, 114 liabilities of partners upon simple contracts, 97 who may be made liable as partners, gS inchoate and incomplete partnerships, 99 restrictions upon the apparent general authority of one partner to bind another, 100 dealings by one partner in fraud of the co-partnership, 101 authority of one partner to sign bills of exchange and promis-oiy notes so as to bind the firm, T02 transactions out of the ordinary course of luisiness, 102 bills, notes, and guarantees in the name of the firm given by one of the partners to secure his own debt, 103 representations and acknowledgments by partners, 104 to the sections.} lA^DEX. 6oj Partnership — Contimu-d. liabilities of dormant and secret partners, 105 private agreements between parties exempting dormant partners from liability, 106 liabilities of nominal partners, 107 persons suffering themselves to be held out to the world as part- ners, 108 liabilities of incoming and retiring partners, log notice of retirement of partners, and of the dissolution of the co-partner.ship, no retirement of dormant partners, in authority of committee men, 113 payment to one partner, 347 bankruptcy of one partner, 477 specific performance of contract of, 497 parties secretly interested in the subsequent disposition of goods pur- chased by one of them, 607 sub-purchasers of separate shares of goods sold, 608 loans of money to one of several partners, 797 deposit of money with one of several partners, 8ifc sale of goods to one of several partners, 606 dealings by one partner in fraud of the firm, 606 deposit of money with one of several partners, S16 bonds and guarantees by sureties to, 1121 guarantees by one of several partners in the name of the co-partnership 1 143 bills of exchange and promissory notes by partners, iiSy See Mining Companies — Banking Co-Paktnership — Joint- Stock Company — Corporations. Part Payment, of a principal debt preventing the operation of the statute of limitations 416 by bill or note, 417 by render of service, or by delivery of goods, 418 by adjustment and settlement of accounts, 419 by one of several joint debtors or co-contractors, 421 by strangers and agents, 422 to strangers and agents, 423 See Interest. for goods sold, effect of, 564 Part Performance, of contracts for the sale of land, 511 See Performance. Passengers, by coach or rail, injuries tn, 976 to be for\\'arded without delay. 982 contracts for the carriage of, 983 luggage. 994 by excursion trains. 1000 6o8 INDEX [Refer, ■eiiees are Passengers — Continued. carriage over other railways, 1013 damages for railway accidents, 1237 Patent Ambiguity, 223 Patent Defects, in tilings sold, 638 Patent Rights, sale of, 658 specific performance of contract for, 497 Pawnbrokers, who are, 1092 pledges with, 1092 forfeiture and sale of pledges, I093 ^varranties on sales of unredeemed pledges, 1094 no implied warranty of title, 1095 Payment, to agents by mistake, 87 and acceptance of part of an admitted simple contract debt. 32S and acceptance before action of the full amount of an admitted simyle contract debt, 329 according to the direction of the creditor, 330 to a person found in a merchant's counting-house, 331 by bill or note, 333 acce|)tance of renewed bills, 334 dishonored bills, 335 by cheque, 336 by a stranger, 33S with a stolen bank note, 337 proof of, 339 presumption of, 340 through agents, 342, 346 receipt, 341 to a creditor of the creditor, 345 by a principal to his own agent, 346 to one of several partners, 347 to trustees, executors, &c., 348 to a bankrupt, 349 appropriation of, 350 by the debtor, 351 by the creditor, 352 separate accounts and one entire running account, 353 avoidance of payment, 354 tender of, 355 offers not amounting to a tender, 356 conditional tenders, 357 apportionment of periodical payments, 358 part payment extending the period of limitation, 416 effect of part payment in executory contracts for the sale of goods, 564 of cheques by bankers, 820 to the sections.] INDEX. 609 P ay ment — Con tin ued. of cheques by mistake, 821 of wages, 893 presumption of, 899 by one agent to another agent of the same principal, 922 Payment by bill, note, or cheque, 333 acceptance of renewed bills, 334 Payment into court, of purchase-money on sale of land, 531 Pecuniary liabilities, a head of damages, 490 Penal obligations, 492 See Bonds. Penalties, penal obligations, 492 for breach of contract, 494 penalties for non-performance of covenants and agreements, 494 liquidated damages, 495 penalties under the denomination of liquidated damages, 496 for non-performance of building contracts, 867 Pensions, illegal sale of, 267 Performance, of contracts, 318 mode of performance, 318 cumulative and alternative stipulations, 319 time of performance, 320 See Time of Performan'ce. conditions precedent to performance, 321 demand of performance, when necessary, 322 waiver of demand of performance, 323 dispensation of performance of, 324 tender of performance, 325 prevention of performance, 326 impossibility of performance, 327 substitution of performance. See Accord and Satisfactioe. performance by payment. See Payment. waiver of, amounting to a release, 359 substituted pctformance of something different, 376 specific. See Specific Performance. injunction to compel, 503 of contracts for the sale of land, 521 of sales of shares, 662 See Specific Performance — Injunction. of contracts for work and services, 853 of building contracts, 866 security for, 867 prevention of, 871, 881 of charter-parties, 942 111—39 6lO INDEX. [References are Performance — Continued. of conditions precedent in, 944 mode of performance of, 948 impossibility of performance of, 949 Perils of the sea, what are, as between consignor and carrier, 956 in insurance cases, 1 161 Perishable commodities, bailments of, 840 Personal representatives. See Executors. Personal contracts, assignment of, 426 liability of executors upon, 451 Personal covenants, transfer of, by death, 446 Petroleum, illegal sale of, 287 Physic, unlawful practising of, 293 Physicians, qualification of, 293 services by, 851 Pilot, losses occasioned by the incapacity of, 960 Plaintiffs. See Parties to Actions. accord and satisfaction with one of several joint-plaintiffs. 387 Play. See Gaming. Pledge, contracts of, lOiS, 1076 things which may be given in pledge, 1377 parties entitled to pledge, 1078 factors and agents entrusted with goods, or documentary evidence of title to goods, 1079 what are documents of title, JO80 when documents of title may be said to be entrusted to a factor or agent, loSi what are advances and loans upon deposit \\iLhin the factor- acts, 10S2 implied warranty of title on the part of the pledgor, 1083 right of redemption, 1084 sale of the pledgor's right of property .'^nd right of redemption, 10S5 forfeiture of the pledge, 1086 foreclosure of ilie ri;^ht of redemption, 10S7 pk'djce's power of s.ile, 10S7 account! between pledgor .md pledgee, loSS custody and safe keeping of the pledge, 1089 u^c of tilings pledged, 1090 statutory rights and liabilities of pawnbrokers, 1091 who arc to be deemed pawnbrokers, 1092 to the sections,'} IiYDjEA'. 6 i I Pledge — Continued. sale of things pawned, 1093 warranties on sales of unredeemed pledges, Idg4 illegal pledges, 1104 pledges of title-deeds, 1041 P oisoii, illei;al sale of, 285 Poisoned herbage, demise of, 696 Policy brokers, right of, on conlracts made by them as agents, 76 See Agent. liability of, 915 right to commission, 928 lien of, 932 Policies, assignment of, 426 of marine insurance, 1146 voyage and time, 1 147 valued and open, 1147 See Marine Insurance. against fire, assignment of, 1218 See Fire Insurance. upon life, assignment of, 426, 1231 forfeiture of, 1228 See Life Assurance. See Accident. Poor law guardians, contracts with, 146 Portions, promises of, 1361 authentication of, 211, 1361 contracts in fraud of, 1370 Possession, transfer of, to creditor by bankrupt, 384 Post, acceptance of offers made by, 22 notice to quit thi-ough the, 740 Post-nuptial settlements, validity of, 1367 in pursuance of an ante-nuptial contract, 1368 valid consideration for, 1368 Power of attorney, to execute deeds, 909 r<.-vocation of, gio Power of granting leases, 688 Power of revocation, and defeasance of contracts, 361 6l2 INDEX. ^References ar' Va-viez of sale, of mortgaged ands, 1035 See Mortgage. of pledges, 1087 Se'! Pledge. Precedent conditions. See Conditions Precedent. Presentation, sale of, 266 Presentment, for payment, 1254 of bills of exchange for acceptance, 1248 of bills payable at or after sight, 1248 Presumption, of marriage, 1375 of payment, 340 of payment of wages, 89Q Pretenced titles, sale of, by parties out of possession, 537 Prevention of performance. See Performance. of contracts, 326 of building contracts, 871, 881 Previous legal proceedings, costs of, as damages, 489 Price, reduction and abatement of 591, 865 inadequacy of, in fraudulent transfer, 383 Primage and average, 972 Principal and agent. Sec Agent — Money Paid. Principal and surety. See Guarantee. Printers, contracts with, for the publication of immoral or libellous books, 292 Priority, of mortgages, 1037 See Mortgage. of maritime liens, 1099 See Bottomry. Prisoners of war, contracts with, 195 Privity of contract, in deeds, 35 essential to the maintenance of an action upon a deed inter pat-ties, 37 in covenants running with the land, 430 privity of estate, 431 See Parties to Actions. Privity of estate, enabling assignees of estates to maintain actions on covenants running with the land, 430 See CO\'ENANTS RUNNING WITH THE LAND. to the sections:] INDEX. 613 Procuration. S^e Power of Attorney, Professional services, liabilities of professional men for negligence and want of skill, 875 Profits, insurance on, 1 174 Projected companies, contracts with, 113, I2g, 1338 allotment of shares in, 1343 dissolution of, 1347 See Provisional Committees. Projectors, of companies, services by, 129 contracts for the payment of, 131 Promise. See Consideration. without consideration, 2, 6 unilateral undertakings, 17 revocation of, 17, 20, 361 by death, 446 mutual promises, 18 acceptance of, 20 by an executor to answer damages out of his own estate, 209 to answer for the debt, default, or miscarriage of another, 210 in consideration of marriage, 211 See Portions. not to be performed within a year, authentication of, 212 without consideration, authentication of, 21S to pay debts barred by the statute of limitation, 409 See Acknowledgment of Debts. by implication of law, 1400 Promise of marriage, authentication of, 1352 time of performance, 1353 excuses for non-performance, 1354 conditional promises, 1355 avoidance and dispensation of, 1356 discharge of the promise, by the secret disposal of property by the lady, 1357 by alteration in the condition of the parties, 135 B damages for breach of, 1360 Promises of portions and settlements, authentication of, 211, 1361 enforcement of, 1361 contracts in fraud of, 1370 Promissory note, right of action on promissory notes payable to one man "for the use" or " on behalf" of another, 75 foreign, interpretation of 239 given to secure money lost at or lent for play, 279 payment of wager by, 279 014- IISlDiLyi., ^References are Promissory note — Continued. payment by, 333 oral renunciation and discharge of, 364 assignment of, 1240 transfer by endorsement, 1240 See Indorsement, transfer by delivery, 1268 See Bill of Exchange. liabilities of makers and indorsers, 1269 indorsement of when overdue, 1270 payable at a particular place, 1271 days of grace, 1272 notes for the payment of small sums, 1273 summary remedy for non-payment of, 1277 cancellation of, 1278 avoidance of, as between the immediate parties, by proof of want of con- sideration, 1279 alteration of, 1 2 Bo See Alteration. loss of, 1282 ■liability of agents on, T2S5 liability of partners on, 1287 by joint stock companies, 1289 damages in actions upon, 1283, 1284 Pramoters, of companies, contracts with, 1338 services by, 1338 contracts for the payment of, 1339 See Provisional Committees. Proposals, See Offers. Prospective damages. See Damages. Prostitution, wages of, not recoverable, 252 contracts in furtherance of, 252 letting of lodgings and sale of clothes for purposes of prostitution, 252 Protest, of foreign bill, 1260 Provisional Committees, contracts with, 113, 120, 1338 liabiliiius of, to third parties, 140 powers and responsibilities, 141 contracts for the payment of the projector out of the deposits, 1339 contribution between members of, 1340 rendering of accounts and appropriation of the funds, 1341 contracts of, with the subscribers and shareholders, 1342 allotment of shares, 1343 payment of subscriptions and deposits, 1344 to the secHons?[ INDEX. 615 Provisional Committees — Continued. recovery of deposits on the abandonment of the undertaking, 1345 misrepresentation by managers of, 1346 dissolution of inchoate railway and parliamentary work.s compiinies, 1347 contributories, 1347 Provisional Directors. See Provisiomal Committee. Provisions, implied warranties on sale of, 621 Proviso, words of, amounting to an express covenant, 228 Public Justice, illegality of contracts obstructing, 258 Public Offices, illegal sale of, 262, 266 Public Officer Co-partnerships, contracts with co-partnerships authorized to sue and be sued in the name of their secretary, treasurer, or public officer, 132 rights and liabilities of the public officer, directors, and shareholders, 133 See Directors — Joint-Stock Company. Public Officers, contracts by, 83 notoriously agents, 83 salaries of, 144 Public Polisy, contracts in contravention of, 253 See Illegal Contracts. Public Inconvenience, no ground for refusing specific performance, 497 Public Works, contracts with trustees of, 143 Puffers, secret employment of, to run up the price of things sold by auction, 510 Purchaser. See Sale of Lands. Quacks, liabilities of, 293, B76 Quantum Meruit, ' right to recover by way of, 1403 Quiet Enjoyment, covenants for, as between landlord and tenant, 6gl damages for breach of, 765 Haces, horse and foot, 278 Railway and Canal Traffic Act, 999 6 1 6 INDEX. {^References are Railway Carriers, implied undertakings by, to forward passengers, 982 limitation of liability of, by public notice, 954 by special contract, 989 special contracts with railway and canal companies, 999 unjust and unreasonable conditions, 1000 authority of railway servants to bind the company by special contract, 1003 liability during sea transit, 1002 entire and indivisible contracts to carryover several lines of railway, I00-|. railway charges, 1007 by-laws, rooy carriage of packed parcels, 1008 charge for luggage by excursion trains, loog effect of disguising merchandise as luggage, 994 notice of action against railway companies, lOIO parties to be made plaintiffs and defendants, loii, 1013 See Common Carriers. Railway Companies, contracts with, 128, 131 contracts with the promoters of a railway made before incorporation, 129 bills of exchange by, 128 informal contracts for services, 131 contracts with directors and committees of directors, 130 transfer of shares, 660 liabilities of outgoing and incoming shareholders, 1326, 1328 See Shares. contracts for purposes not sanctioned by their acts of incorporation, 1330 powers of directors, 1331 application to parliament for an extension of the powers of the compan\'^ 1332 void contracts by chairman, 1333 money borrowed by directors on railway debentures, 1334 bonds and loan notes by directors, 1335 indemnification of directors, 1337 dissolution of inchoate, 1347 Railway Debenture, 1334 Railw^ay Directors, Ijills of exchange by, 128 authority of, 1331 . contracts by, in which they are personally interested, 130, 1336 loans to, on debenture, 1334 lionds and loan-notes by, 1334 exemption of, from personal liability, 1337 indemnification of, 1337 Railway notices, determining tenancies, 746 Rates, deduction of from rent, 702, 703 to the sections i\ INDEX. 6l7 Ratification, of the acts of agents, 60 by the husband of the wife's contracts, 174 of contracts made during infancy, 161 authentication of, 162 Realty. See Sale of Lands. title to. See Title. Receipt, effect of receipt in full as payment, 341 by agents on account of their principals, by sub-agents, 921 Receivers, of stolen property, sale by, 546 Recitals, in deeds, contradiction of, 248 amounting to covenants, 227, 534 Recogni2saiice, charging lands, 1052 Re-oouveyance, to mortgagor, 1031 See Mortgage. Record, contracts by, 29 Recovery, of money, paid under illegal or void contracts, 316, 1411 on a void sale of realty, 533, 534-539 of chattels, 611, 632-646 See Money Paid — Money Had and Received. of possession. See Landlord — Ejectment. Redemption. See Mortgage — Pledge. Redhibition, or return of things sold, and recovery of the price by reason of redhibitory defects, 611-632 Redhibitory defects, in things sold enabling the purchaser to annul the sale, 611-632 Re-entry, provisoes for, in leases, 718 effect of on lessees' covenant, 719 ejectment under provisoes for, 749 where there is no sufficient distress, 750 See Ejectment. Registered Joint-Stock Companies. See Joint-Stock Company. Registration, of bills of sale of ships, 649, logS of fixtures, 651 of transfers of shares, 669 compulsory registration by madamus, 670 orders for the rectification of the register, 671 registration of forged transfers, 672 6l8 INDEX. [References an Registration — Conlin tied. of mortgages of lands, lOgo of goods and chattels, 1059, 1060, 1069 See Goods and Chattels. evasion of, 1071 of assignments of bills of sale, 1068 of agreements for bills of sale, 1069 effect of registration of bills of sale, 1067 of licenses to distrain, 1095, 1096 Registration acts, illegality of contracts in evasion of, 260 Registry, of shareholders. See REGISTRATION. Release, covenants and agreements to refer disputes and differences to arbitration, 258 of contracts, 359 dispensation of performance, 359 of simple contracts before breach, 359 renunciation of a contract by one party amounting to a dispensation of performannce to another party, 360 powers of revocation and defeasance of contracts, 361 of causes of action ex contractu-, 363 oral renunciation of claims on bills and notes, 364 of one of several joint contractbrs, 365 general, 366 conditional, 367 fraudulent. 368 by composition deed under the Bankruptcy Acts, 369 covenants not to sue, &c. See COVENANTS, substitution of a new contract, 373 by novation and substitution, 372 See Novation. by alteration, 388 alteration of contracts in writing, 388 immaierial alterations, 389 evidence to explain alterations, 390 cancellation of contracts, 391 merger of a single contract in a contract under seal, 393 judgment recovered, 394 county court judgments, 394 foreign and colonial judgments, 395, 1404 debtors made executors, 460 appointment of a debtor as administrator, 461 appointment of a creditor as executor, 462 ofsu.ety, II19, 1127, I130 of principal debtor with reserve of remedies against the surety, I130, I132 of one of several co-sureties, H33 of surety by payment by the principal, I134 by death of the principal, 1 136 }othe sec Hans.] INDEX. 619 Xleleas e — Con tin ued. of shareholders in joint-stock companies by transfer or forfeiture of shares, 1326, 1327, 1328 Kemittanoes by post, operating as a payment, 330 Renewed bills, acceptance of, suspending the remedy for a debt, 334 Rent, limitation of suit for, 402, 403 liability of executors upon covenant to pay, 448 covenant to pay, 692, 698 extinguishment and suspension of, by eviction, 700 deduction of ground rent, rates, and taxes, 702, 703 distress for, 704 power of distress extinguished by assignment of the reversion, 705 apportionment of, 706 forfeiture for breach of covenant to pay, 721 See Landlord and Tenant. Rent-charges, assignment of, 430 how created, 1048 registration of, 1049 power of distress for, 1050 extinguishment of, 105 1 Renunciation, of a contract, 360 of claim on a bill of exchange or promissory note, 364 See Release. Repair, liability of the assignees of the lessee, 432 liability of executors upon covenants to, 449 covenants to, between landlord and tenant, 710-714 See Covenants Running with the Land. damages recoverable for breach of contract to repair, 767 destruction of buildings by fire or tempest, 767 Repairs, hypothecation of a vessel for, 71 authentication of contract to make, in the case of realty, 203 bailment of materials for, 879 Representations, by agents, 65, 66, 67 injunction to compel parties to abide by, 505 amounting to a warranty, 621, 622 inducing a marriage, enforcement of, 1360 See Misrepresentation — Warranty. Repudiation, of the contract of an agent by the principal, 77 by one party amounting to dispensation of performance by the other, 360 See Avoidance. 620 INDEX. {References are Repugnant limitations, of liability, 225 See Limitation of Liability. Reputed marriage, liabilities resulting from, 187 Reputed ownership, sale of bankrupt's property, 475 of chattels and choses in action avoiding a mortgage, 1074 not affected by the registration of a bill of sale, 1074, 1075 of stock and shares avoiding a mortgage, U09 Request. See Coxsideration. Re-sale, by a vendor of realty in case of non-performance by the purchaser, 52S, 530 specific performance in cases of, 530 vendor's power of re-sale of chattels, 593 Rescission of contracts, by mutual agreement, 359 by one party on refusal of the other to fulfill the contract, 360 under powers of revocation and defeasance, 361 See Avoidance — Relea'jE. Reservation, of privileges and easements on demise or sale of lands, 653 Reserve of remedies, in a release of one of several joint contractors, 365 of a principal debtor, I130, I132 Restitution, of stolen goods, 546 of tenants improperly ejected by order of justices, 752 Restraint of marriage, contracts in, 255, 1348 Restraint of trade, contracts in, 270 reasonableness of the restriction, 272 Restrictive indorsement, of bills and notes, 1241 Retiring of bills, 1265 Retiring peirtners, liabilities of, log-iio dormant partners retiring, in Return, of things sold on the discovery of latent defects and fraud, 632-645 sale or return, 634 See Sale op Chattels. Reversion, assignment of, extinguishing the right to distrain for rent in arrear at the time'of a^-signment, 705 covenants real annexed to, 433 i(t the sections:] INDEX. ^~ I Reversioner, covenants between lessee and, !).32 Revocation, of gratuitous promises, 17, 18, 20 of authority of agents, 62, gio of publication of, 62 of contracts, power of, 361 See Countermand. of licenses of pleasure and profit, 652, 671 of license to distrain and sell, lOgj Reward, promises of, for the conviction of a felon, g for the recovery of lost property, 847 Risk, of loss, transfer of, on sale of land, 512 on sale of chattels, 565 Robbery, loss by in the case of letting for hire, 7S7 gratuitous loans, 7g4 gratuitous deposits, 804 gratuitous commissions, 842 common carriers, g87 marine insurance, 1168 Salaries, of public officers, 144 of officers of friendly societies, 152 Sale, contract of, 507 distinction between, and exchange, 507 distinction between, and a contract for the letting and hiring of work, 567, 844 implied contract of, 1403 See Sale of Chattels — Sale of Lands. Sale by auction. See Auction. Sale of goods and chattels, to married women, 173 specific performance of contract for, 4g7, 502 contracts for, 207, 543 title to goods and chattels, 543 in market overt, 545 of stolen horses, &c., 546 right of restitution, 546 out of market overt, 547 by factors and agents, 548 authentication of, 207, 549 requisites of the written memorandum of, 213, 550 brokers' bought and sold notes, =5: liability of the broker, 552 622 INDEX. ^References are Sale ot Goods and Chattels — Cotztiniud. signature of the memorandum, 214, 552 signature by agents, 214, 553 acceptance and receipt of things sold, 207, 554 receipt for inspection and approval, 555 wlien goods have been purchased by a bailee, 556 delivery at a named wharf, 557 constructive acceptance, 558 constructive receipt and extinction of the right of lien, 559 of bills of lading, delivery orders, and dock warrants, 560 by carrier-;, forwarding agents, and agents for custody, 561 part acceptance and actual receipt, 562 earnest and part payment, 564 transfer of the right of property in the thing sold, 565 imperfect sales of unascertained chattels, 566 contracts for sale and manufacture, 567 unascertained price, 56S perfect sales transferring the ownersliip and risk before delivery 569 selection of chattels by the vendor, and delivery to a carrier on behalf of the purchaser, 570, 571 delivery under a bill of lading, 572 sale of undivided shares, 573 conditional sales, 574, 633 implied promises resulting from executory contracts, 575 sale of particular classes of goods, 576 implied undertaking by the vendor to furnish the article agreed to be sold, 576 interpretation of the contract in connection with custom and usage of trade, 577 time of performance, 578 enlargement of time of performance, 579 non-delivery of goods sold, 580 rejection and non-acceptance, 581 non-payment of price, 582 goods bargained and sold, 582 goods sold and delivered, 583 sale of goods on credit, 5S4 actual and constructive delivery of goods, 585 proof of delivery, 586 delivery to carriers, 587 damages for non-performance, 588 non-performance by purchaser, 588 non-performance by vendor, 589 specific performance, 590 abatement of contract price, 591 reduction of damages for not paying for goods delivered, 591 lien of the vendor for the price, 592 re-sale by the vendor, 593 to the sections.'] INDEX. 623 Sale of Goods and Chattels — ConthttuJ. insolvency of the purchaser, 494 avoidance of sale, 494, 632-645 countermand of delivery orders, 595 countermand in the case of shares and undivided quantities sold as such, 5g6 intervention of the rights of sub-purchasers, 597, 603 stoppage in transitu, 598 in the hands of carriers and forwarding agents, 598 in the hands of the purchasers' agent for custody, 599 conversion of a carrier, &c., into the purchaser's agent for custody, 600 stoppage of part of goods sold, 601 notice of stoppage in transitu, 602 transfer by bill of lading, 604 re-sale by vendor after stoppage in transitu, 605 of goods to one of several partners, 606 dealings by one partner in fraud of the firm, 606 parties secretly interested in the disposition of goods purchased by one of them, 607 sub-purchasers of separate shares, 608 to registered joint-stock companies, 6g avoidance of sale, 610, 632-645 warranty of title by vendor, 611, 612 implied vifarranties, 615, 616-622 sale by sheriffs, agents, trustees, &c., 614 sale of such interest as vendor possesses, 615 sale by sample, 622 warranty of trade marks, 623 warranty as to quantity or country, 624 representations amounting to a warranty, 625 not amounting to a warranty, 626 of matters of opinion and belief, 627 warranty on sales of horses, 628 proof of warranties, 629 construction of warranties, 630 warranties by agents, 631 effect of breach of warranty by vendor, 632 conditional and defeasible sales, 633 sale or return, 634 fraudulent misrepresentations, 636 redhibitory defects enabling a purchaser to annul a contract of sale and recover the price, 635 fraudulent concealment of things material to be known to a purchaser, 638 sales with all faults, 629 when the purchaser disables himself from avoiding the contract, 640 when a vendor is prevented from avoiding a contract of sale induced by the fraud of a purchaser. 641 624 INDEX. {References are Sale of Goods and Chattels — Continued. determination of the election to avoid a contract, 642 sales rendered nugatory from want of title, 643 recovery of purchase money, 643 void sales of things not in existence, 644 effect of avoiding the contract, 645 damages recoverable, 588, 589, 632-645 See Damages. for breach of warranty, 646 re-sale with a warranty, 647 special damages, 647 cost of legal proceedings, 647 sale of ships, 648, 649 See Ships. sale of fixtures, 650 See Fixtures. bill of sale. See Bill of Sale. Sale of incorporeal hereditaments, See iNCORroREAL Hereditaments. Sales illegal, 651, 315 See Illegal Contracts. Sale of lands and tenements, to infants, 160 executory contracts for, 200 authentication of, 200 requisites of the memorandum, 213 signature of, 214, 509 by agents, 215 computation of time, 237 release of purchaser by bankruptcy, 397 sales by auction, 510 without reserve, 510 puffers, 510 particulars and conditions of, 5 10 See Conditions of Sale. enforcement of oral bargains, 511 transfer of property, and risk, 512 production and proof of title, 513 title to realty, 514 period for which the title ought to be shown, 515 title to leaseholds, 516 waiver of proof of, and of objections to title, 517 production of title-deed, 518 loss of title-deeds, 519 effect of misdescriptions, 520 alterations in the condition of the property, 521 time and mode of performance, 522 enlargement of time of performance, 523 non-performance by vendor, 524