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/cu31924017105291 -P17 Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 V IN riEHORY OF I JUDGE DOUGLASS BOARDMAN FIRST DEAN OF THE SCHOOL / By his Wife and Daughter , ! A. M. BOARDMAN and ELLEN D. WILLIAMS KD1 5 54.P7 7 , 1888 VerSi,yUbrary mnmi P' es of contract: being a treatise 3 1924 017 105 291 Principles of Contract : BEING A TREATISE ON THE GENERAL PRINCIPLES CONCERNING THE VALIDITY OF AGREEMENTS IN THE LAW OF ENGLAND, AND AMERICA. fourth mitton. \ BY FREDERICK POLLOCK, OF LINCOLN'S INN, ESQ., BARRISTER-AT-LA W; 0OBFC8 PROFESSOR OF JURISPRUDENCE IN THE UNIVERSITY OF OXFORD; PROFESSOR OF COMMON LAW IN THE INNS OF COURT ; LATE FELLOW OF TRINITY COLLEGE CAMBRIDGE ; AND HONORARY DOCTOR OF LAWS IN THE UNITERSITY OF EDINBURGH. WITH NOTES AND AMERICAN CASES, BY FRANKLIN S. DICKSON, LL..B.. "This notion of Contract is part of men's common stock even,outside tho field of legal science, and to men of law so familiar and necessary in its various applications that we might expect a settled and just apprehension of it to prevail everywhere. Nevertheless we are yet far short of this,"— Savigny, System des heutigen romischen Bechts. $ 140. PHILADELPHIA : THE BLACKSTONE PUBLISHING CO. issa Entered according to the Acta of Congress, in the year 1888, by the Black- stone Publishing Company, in the office of the Librarian of Congress, at Washington, D. C. NOTE. We suggest to our patrons that, to facilitate the labor of the Judges and Reporters, they cite the TOP PAGING of books of our SERIES, and add [TEXT BOOK SERIES.]— Editor. TO THE EIGHT HONOURABLE. LORD JUSTICE LINDLEY. My dear Lord Justice, Ten years ago I dedicated to you, as my master in the law, the first edition of this book, as the first fruits of your teaching. The time has come when I may without presumption take on myself to explain the meaning of those words more fully than the compass of a formal dedi- cation admits. In your chambers, and from your example, I learnt that root of the matter which too many things in common prac- tice conspire to obscure, that the law is neither a trade nor a solemn jugglery, but a science. By your help and en- couragement I was led to acquaint myself with that other great historical system which to this day divides, broadly speaking, the civilized world with the Common Law ; to regard it not as a mere collection of rules and maxims ac- cidentally like or unlike our own, but as the living growth of similar ideas under different conditions ; and to perceive that the Roman law deserves the study and reverence of English lawyers, not merely as scholars and citizens of the world, but inasmuch as both in its history and its scientific development it is capable of throwing a light beyond price on the dark places of our own doctrine. I owe it to yon and to my friend Professor Bryce that, daring to be deaf to the counsels of shallow wisdom that miscalls itself prac- tical, I turned from the formless confusion of text-books and the dry bones of students' manuals to the immortal work of Savigny ; assuredly the greatest production of this age in the field of jurisprudence, nor one easily to be match- ed in any other branch of learning, if literary form as well as scientific genius be taken into account. .Like one in (5) 6 DEDICATION. a Platonic fable, I passed out of a cave of shadows into clear daylight. The vast mass of detail was dominated by ordered ideas and luminous exposition. Equally removed from the futile struggling of a mere handicraftsman with the multitude of particulars, and from the pedantry which gains a show of logical symmetry by casting out unwelcome facts, the master proved, not by verbal definition, but by achievements in act, that the science of law is a' true and living one. Others have came and may come by other means to the same sort of enlightenment. Let every one praise, as in private duty bound, the spiritual fathers to whom he owes it. Blackstone, I doubt not, opened to his first hearers little less than a revelation. But Blackstone, if he were with us. at this day, would be the first to proclaim the necessity of doing his work over again, and doing it thoroughly from the beginning. His destined successor is yet to seek ; and meanwhile an English teacher of ,law can have no higher ambition than to prepare the way, however partially, for that successor. Title by title, and chapter by chapter, the treasures of the Common Law must be consolidated into rational order before they can be newly grasped and recast as a whole. Many good and true workers are bearing their part in this task in divers forms. Some part has fallen to my share; I have performed and am performing it as best I may. To be a fellow- worker with such men as Mr. Justice Stephen and Mr. Justice O. W. Holmes, and in ways which they and you think not unworthy of approval, is at once a privilege and a responsibility. No man can be free from errors in design or faults in ex- ecution. But every man can strive to keep his eyes open for the best light he knows, his hand trained for the best mastery it is capable of ; to test and verify his handiwork at every step, and, where he has failed to attain certainty, frankly to confess his doubt or ignorance. These things I have striven to do ; and if any word of mine, spoken or DEDICATION. 7 written, is of the spirit which helps those who come after to do them better, it will be of little account whether the letter of it stands or falls. With such skill as I have it will still be my endeavour to spread abroad the gladsome light of jurisprudence into which you led me (to speak with Coke, an author even now read by some on both sides of the Atlantic who do not believe that the law of England and its history exist for the sake of either examinations or practice cases) ; and I think I may guess without rashness that there is no kind of return you would more willingly accept. I remain, Your friend and pupil, FREDERICK POLLOCK. Lincoln's Inn, Easier. 1885. PREFACE TO THE FOURTH EDITION. The law of Contract may be described as the endeavour of the State, a more or less imperfect one by the nature of the case, to establish a positive sanction for the expectation of good faith which has grown up in the mutual dealings of men of average right-mindedness. Accordingly the most popular description of a contract that can be given is also the most exact one, namely that it is a promise or set of promises which the law will enforce. The specific mark of contract is the creation of a right, not to a thing, but to another man' s conduct in the future. He who has given the promise is bound to him who accepts it, not merely be- cause he had or expressed a certain intention, but because he so expressed himself as to entitle the other party to rely on his acting in a certain way. This is apt to be obscured in common cases, but is easily seen to be true. Suppose that A. agrees to sell to B.' a thing of which not he but C. is the true owner. C. gives the- thing to B. Here, though B. has got the thing he wanted, and on better terms than he expected, A 1 has not kept his promise ; and, if the other requisites of a lawful contract were present as between him- self and B., he has broken his contract. The primary ques- tions, then, of the law of contract are first, what is a prom- ise ? and next, what promises are enforceable ? To examine these questions is the object of the present book. The importance and difficulty of tfie first of them depends on the fact that men can justly rely on one another' s intentions, and courts of justice hold them bound to their fulfilment, only when they have been expressed in a manner (9) 10 PREFACE TO THE FOURTH EDITION. that would convey to an indifferent person, reasonable and reasonably competent in the matter in hand, the sense in which the expression is relied on by the party claiming sat- isfaction. Judges and juries stand in the place of this sup- posed indifferent person, and have to be convinced that the dealings in the particular case contained or amounted to the promise alleged to have been made and relied upon. For this purpose the formation of an agreement has to be an- alysed, and on some points doubts have to be resolved by a more or less arbitrary rule. Our first chapter is occupied with the discussion thus rendered necessary. The rest of the book treats of the conditions on which the law will enforce an agreement made in terms, when its ex- istence in fact is ascertained ; conditions which depend for the most part on rules of general policy above the will and control of the parties. A brief summary of the questions presented under these heads ma y here be given. We con- sider the capacity of the parties, as limited by status, en- larged by agency, or artificially created by the law of cor- porations (Ch. II.) ; the requirements of the law as to form in particular kinds of contracts (Ch. Ill), and consideration (Ch. IV.) ; and upon what persons rights or duties may be conferred by the agreement (Ch. V.). Passing on from these general elements, we have to note in what cases the matter of an agreement, being unlawful (Ch. VI.), or im- possible (Ch. VII.), prevents the law from enforcing it. Then we deal with conditions that so affect the consent or apparent consent of the parties as to deprive it wholly or partially of effect. In the cases conventionally classed under the head of Mistake (Ch. VIII.) there is, notwithstanding first appearances, no true consent, or a consent wrongly ex- pressed. In another group of cases the consent of one party may be not binding on him by reason of misrepresentation or fraud (Chaps. IX. and X.), coercion, or undue influence (Ch. XI.). Lastly there are a certain number of anomalous cases,, the results, and generally undesigned results, of peculiar legislation or usages, in which an agreement is not an enforceable contract, and yet is something more than a PREFACE TO THE FOURTH EDITION. 11 bare promise having no legal effect at all (Ch. XII.). When we come to the construction, performance, and enforcement of contracts, questions of another order arise. These are not dealt with in the present work except incidentally, or as they may occur in the debateable ground between rules of law and rules of construction. The present Edition bears to the third about the same relation as the second to the first. It has been prepared in the midst of work on another subject, and few changes have been made beyond those which were called for by recent cases and statutes. As far as possible I have endeavoured to avoid increasing a bulk which now touches the limit of convenience for a single volume. Thus I have thought myself justified, in view of the Married Women's Property Act of 1882, in relegating to the Appendix the details of the equitable doctrine of Sepa- rate Estate. I have done the like with the historical dis- cussion of Consideration ; inasmuch as, whatever explana- tion be right (and the problem now seems to me more diffi- cult than it did ten years ago), the modern law stands on its own footing. At some future time I hope to expand this work into a complete treatise on the general part of the law of Con- tract ; In officer words, to include the theory of Interpre- tation, Performance, and Discharge. The book thus recast should be accompanied or followed by a concise volume for the use of students, in which the outlines of the subject would be exhibited in a similar form, and free from dis- cursive and controversial matter. For the present, how- ever, I must be content to have kept the book abreast of the needs of the present day within the lines of its original and more limited plan. Mr. Reginald J. Smith, of the Chancery Bar, has kindly undertaken for me the skilled but ungrateful office of com- pleting the Table of Cases with references to all the current Reports. In the course of this process his observation has 12 PREFACE TO THE FOURTH EDITION. detected a certain number of errors, which by slips of the pen or the press had crept into former editions and remained uncorrected. These are now set right either in the text or in the Addenda, besides the Table itself, in which all the corrections are embodied. F. P. 13, Old Sqxtaee, Lincoln's Inn, Easter, 1885. TABLE OF CONTENTS. CHAPTER I. Agbeement, Pboposal, and Acceptance. [The paging refers to the [•] pageB.] Definitions of agreement, &c page Agreement: nature of consent required 2 Obligation 3 Ways of declaring consent . ... 4 Promise @ Contract • 7 Void agreements 7 Voidable contracts 8 Rules as to proposal and acceptance 9 Express and tacit contracts, and quasi-contracts . 9 Proposals to unascertained persons ^ contracts by offer of reward, &c.) 12 Discussion of cases '. 14 Difficulties considered .17 Theory of floating obligation inadmissible . . 19 Other kinds of general proposal . . .20 Revocation of proposal 23 Determination of proposal 25 Communication of revocation 26 Dickinson v. Dodds considered . 27 Can there be double acceptance? 28 Continental opinions .... 30 Communication of acceptance .....' . . . .31 Contracts by correspondence ... . ... 32 Artificial theories on the subject .33 State of English authority . .... .35 Effect of death of proposer ... .37 Certainty of acceptance . . .38 Agreements in terms where consent not final ... . . .41 Certainty of terms of agreement 42 Illusory promises . . . 44 Construction of tacit acceptances .46 Promises by deed may bind without acceptance, . . 48 CHAPTER II. Capacity of Pakties. Variations in personal capacity . 49 Artificial persons ...... ... 5o Limitations of capacity .... ... ... 51 Infants. General statement 51 Contracts generally voidable, not void: and gv. whether in any case void at common law . . .... 52 (13) 14 TABLE OP CONTENTS. [The paging refers to the [*] pages.] PAGE Special classes of contracts considered on this point 53 Avoidance of infant's contract . . 59 Infants' Belief Act, 1874 60 Liability on> obligations incident to property 64 On beneficial contract . . 66 For necessaries 67 What are necessaries 67 Certain contracts of infants binding by custom 73 By statute ... .73 Liability of infants on wrongs collateral to contract 74 In equity, on representations of full age 75 Subsequent contract after full age prevails 78 2. Married Women. Can, contract only as to separate property . . .78 Ius mariti and survivorship 79 Cannot revive barred debt by acknowledgment 80 • Exceptions at common law 81 Custom of London as to married woman trading alone 82 Agreements for separation^ between husband and wife alone 83 Statutory exceptions: judicial separation, &c 83 Equitable doctrine ot separate estate 84 Married Women's Property Act, 1882 85 3. Lunatics and Drunken Persons. Undisputed points 87 History of opinions as to contract of lunatic, &c, in general 88 Modern law: contract not void but voidable 89 Indian Contract Act 94 4. Convicts, &e . ... . . 94 Extension of capacity 95 1. Agency 95 Authority of Agent ." 96 Contracts by authorized agents 97 When agent known to be such, there is contract with principal ... 97 If principal named, primd facie no contract with agent 97 If principal not named, primd facie there is contract with agent ... 97 These rules subject to evidence of contrary intention . . . ' 99 When agent not known to he such, there is generally contract with undisclosed principal 100 Exceptions to and limits of the rule 101 Rights of other contracting party 101 Professed agent not having authority cannot sue on the contract if a responsible principal has been named 104 Nor be sued on it 106 But may be sued on implied warranty of authority 106 Where no principal named, or one who could not be responsible, pro- fessed agent is treated as principal 107 Indian Contract Act on contracts of agents 110 2. Artificial Persons 110 Nature of artificial persons 1 10 Corporations 112 Capacities of corporations in themselves .... ... . 113 As limited by positive law . . . . 118 Conflicting theories of corporate powers 119 Application of partnership law 121 Public policy and interests ol the public 124 Decision of House of Lords on Companies Act, 1862 . , 127 Corporations cannot bind themselves by negotiable instruments : ex- planations of this 128 Exceptions 130 ' Corporations bound by estoppel, &c. . . 131 TABLE OF CONTENTS. 15 [The paging refers to the [*] pages.]- CHAPTER III. Form of Contract. PAGE Position of informal contracts in ancient law . 133 Formal and informal contracts in Roman law ... . . 133 Similar doctrine of old English law in Bracton, &c 138 Remedies on contracts : debt on covenant or simple contract . . 139 Action of account ,. . 141 Introduction of assumpsit to supply remedy on executory agreements 142 Modern law : requirements of form exceptional . 144 Contracts of Record . . 145 Contracts of Corporations : old law ... 146 Modern exceptions to requirement of seal ... 148 Trading corporations : Contracts in course of business 149 Non-trading corporations : Contracts necessary and incidental to cor- porate purposes . . 151 Municipal corporations, &c 152 Appointments of officers ... 153 Executed contracts with corporations . . 154 Statutory forms of contract . . 155 Summary , 156 Negotiable Instruments 157 Statute of Frauds .... 157 Guaranties 158 Interests.in land • 160 Agreements not to be performed within a year 160 Sale of goods 161 The "note or memorandum " 161 Marine Insurance 164 Transfer of Shares ^65 Acknowledgement of statute-barred debts 165 CHAPTER IV. Consideration. The conception peculiar to English law 167 Promises to perform duties already existing . . 176 Consideration for discharge of contract .... . ... 179 For variation of contract 180 Forbearance to sue • • • 1|1 Compromises • ■•■'.■•• • ]°£ Treatment ot gratuitous contracts under sale m equity lfctf Imperfect gifts 184 CHAPTER V. Persons affected by Contract. Preliminary J86 Definitions and rules . . : f°' 1. Parties must be certain j"" 2. Third persons not bound . . . iji 16 TABLE OF CONTENTS. [The paging refers to the [*] pages. ] PAGB Apparent exceptions 192 Novation . . ' 193 3. Third persons not entitled by the contract itself 195 Apparent exceptions 195 Trusts 197 Exception of certain provisions for children 199 Statutory exceptions 199 Contract for benefit of third person gives him no right of action at law 200 Authorities in equity ." 202 Third person cannot be empowered to sue for convenience of parties . 204 4. Assignment of contracts 206 Notice to debtor 209 Assignment " subject to equities " , 211 Assignment free from equities by agreement of parties : transferable debentures 214 But agreement of parties cannot make contract negotiable 216 Negotiable instruments 217 Eights of bond fide holder 218 What instruments may be negotiable 220 How instruments may cease to be negotiable 221 Transferable shares 222 Obligations attached to property 223 Covenants running with land 224 Bills of lading 227 Conflict between common law and equity as to burden of covenants running with land 227 CHAPTER VI. Unlawful Agreements. Of unlawful agreements in general, and their classification 232 A. Contrary to positive law 235 Agreements to commit an offence 235 Agreements wrongful against third persons 237 Fraud on creditors • . . . 238 Dealings between creditor and principal debtor to prejudice of surety 241 Dealings by agent, executor, &c, against his duty 244 Settlements in fraud of marital right . . . . 247 Marriages within prohibited degrees 249 Royal Marriage Act 250 Agreements illegal by statute 251 Rules for construction of prohibitory statutes 253 When agreemeuts may be not void though forbidden, or void without being illegal ' 257 Wagers 258 B. Agreements contrary to morals or good manners 260 Agreements in consideration of illicit cohabitation 262 Validity of separation deeds . . 264 Agreement for future separation void 268 Publication of immoral or seditious works is not merely immoral but an offence 269 C. Agreements contrary to public policy' . . 271 Connexion of the doctrine with the common law as to wagers . 271 Modern extent of the doctrine: Egerton v. Brownlow ... . . 273 TABLE OF CONTENTS. 17 [The paging refers to the [»] pa^es. ] Public policy as to external relations of the State 277 •Trading with enemies ... .... 278 Effect of war on subsisting contracts ' 278 Negotiable instruments between England and hostile country 280 Hostilities against friendly states . . . 280 Trade with belligerents not unlawful . ..'..'. 281 Foreign revenue laws .... ' 281 Public policy as to internal government: attempts to influence legisla- tion, &c., by improper means ... . 283 Sale of offices, &c . . 286 Assignments of salaries ... ... . 287 "Stirling prosecutions" and compounding offences 288 Agreements for reference to arbitration: extent of their validity at common law, and by C. L. P. Act, 1854 291 Maintenance and champerty ... 293 Rules as to champerty 295 Purchase of subject-matter of suit 298 Statute of Henry VIII. against buying pretended titles . 300 Maintenance in general 302 Public policy as to duties of individuals . 303 Agreements as to custody of children . . 304 Discretion of equity . . 304 Custody of Infants Act . 305 Insurance of seamen's wages 306 Agreements against social duty ...... 306 Public policy as to freedom of individual action . . 306 Agreements in restraint, of marriage . 307 Agreements to influence testators . . 309 Agreements in restraint of trade . . . ... 310 Partial restraint admitted ... . . . 312 History of the doctrine 312 What agreements in partial restraint are valid, and of the alleged rule as to limits of space . . . .... . . . 315 Table of decisions since 1854 . . . 310 Contracts to serve for life or exclusively . 319 D. Judicial treatment of unlawful agreements in general 319 Independent promises, where some lawful and some not . 320 Where consideration or immediate object unlawful . . 321 Ulawful ulterior intention ... . 322 Connexion with unlawful design already executed . \. . ... 325 Securities for payment under unlawful agreement are void . ... 327 Extrinsic evidence of illegality 328 Specific unlawful intention, how shown or contradicted 329 When payments can be recovered : rule as to party in pari delicto . . 332 Exceptions: duty of agents to principal unaffected 333 Money recoverable where agreement not executed . .... 335 Where the payment was compulsory . ... 336 In equity where circumstances of fraud, &c, as between the parties, 337 Final statement of the rule and qualification ... ... 338 Conflict of laws in space . 339 Generally lex loci solutionis prevails . . . . 339 Exceptions — when a prohibitory municipal law is not merely local . 340 When agreement is immoral in re gentium 340 Treatment of slave contracts in English courts: Santos v. IUidge 342 Other instances of conflict of laws as to. validity of agreement considered 343 Agreements against interests of the local sovereign 345 Conflict of laws in time: subsequent illegality dissolves contract . . 346 Rules as to knowledge of parties collected 348 2 PBINCIPLES OF CONTEACT. 18 TABLE OP CONTENTS. [The paging refers to the [*] pages.] CHAPTER VII. Impossible Agbeements. page Performance of agreement may be impossible in itself, by law, or in fact (i. e. by reason of particular state of facts) 350 General statement of law 351 Agreement impossible in itself is void 352 Logical impossibility 355 Impossibility merely relative to promisor no excuse 356 Agreements impossible in law 357 Performance becoming impossible by law 358 Buying one's own property 358 Impossibility in fact no excuse where contract absolute 360 Obligation to pay rent when premises accidentally destroyed .... 363 Exceptions in cases of events not contemplated by the contract . . . 366 Performance dependent on specific thing existing: Taylor v. Caldwell, 367 Appleby v. Meyers 368 Impossibility at date of contract from existing state of things not known to the parties 370 Sale of cargo already lost: Couturier v. Hastie 371 Covenants to work mines, &c. : Clifford v. Walts 372 Construction of express exceptions in certain contracts 373 Performance dependent on life or health of promisor: Bobinson v. Davisop 374 Anomalous decision on contract to marry in Hall v. Wright 376 Limits of rule as to personal services 378 Eights already acquired under contract not discharged by subsequent impossibility 378 Substituted contracts • 379 Impossibility by default of either party: such default of promisor is equivalent to breach of contract 379 Default of promisee discharges promisor 380 Alternative contracts where one alternative is or becomes impossible, 382 Conditional contracts 384 Impossible conditions in bonds: peculiar treatment of them 386 Indian Contract Act on impossible agreements 389 CHAPTER VIII. MISTAK.E. Pabt I. Of Mistake in General. Classification of conditions affecting validity of consent in agreement: Mistake, Fraud, &c 390 A. Mistake in general .' 394 Generally it is in itself inoperative either to avoid civil liabilities . . 394 (Except in certain special cases, and except so far as in the case of pur- chase for value without notice ignorance is a condition of acquir- ing rights) 395 Or to take away or alter existing rights 400 Or to alter construction of contract 402 Saving as to variation by mutual consent 403 TABLE OF CONTENTS. 19 [The paging refers to the [*] pages.] Special cases -where mistake important 404 B. Mistake of Fact and of Law 405 Limits of the distinction: where certainly or probably not applicable, 405 Common mistake and rectification of instruments 406 Renunciation of rights 407 ' Recovering back money paid !!!!!!! 409 Part II. — Mistake as excluding true consent. Division of cases under this head 411 Error as to nature of transaction: T fwroughgood' s case 413 " " Foster v. Mackinnon \ 414 Cases in equity 41g Distinction as to contracts of lunatics, &c '.'.'.]'. 418 Error as to legal character of transaction 419 Error as to person of other party . 420 Analogous doctrines: satisfaction t>y stranger 423 Personal contracts not transferable 425 Agency '.'.'. 426 Error as to subject-matter , 427 With regard to identity tospecific thing 429 Inclusion of parcels by mistake on sale of land 430 Contracts to take shares exceptional 432 Error with regard to kind, quantity, &c 433 Error in quantity or price 434 Error as to quality inoperative unless material and common to both parties 436 Even if error of one party known to, but not caused by, the other . . 438 Cases distinguished where misdescription of estate on sale entitles pur- chaser to rescind ... 440 Error as to existence of subject-matter 441 Purchase of one's, own property 444 Herein of ignorance of law: Cooper v. Phibbs 445 Assignments of leases for lives .... 446 Where only one party is ignorant of the material fact, and generally where fundamental error is caused by fraud or misrepresentation . 447 Where fundamental error produced by misrepresentation 448 Error as to sample in case of sale by sample 449 Remedies of party to void agreement 450 Election to adopt agreement 450 PAET III. — Mistake in expressing true consent. Correction of mistake in expressing intention 451 . Rules of construction common to law and equity 452 Effect given to general intent 453 Observations on evidence and construction 455 Rule as to exclusion of parol evidence 456 Apparent exceptions 458 Real exceptions in equity 459 Peculiar rules of construction in equity 460 Restriction of general words 461 Stipulations as to time . , , 462 SO TABLE OF CONTENTS. [The paging refers to the [*] pages. J PAGE Indian Contract Act on making time of essence of contract . ... 464 Relief against penalties . ... .... 465 3. Peculiar defences and remedies derived from equity 467 Defence against specific performance where contract incorrectly ex- pressed by mis+ake . . 467 Effect of Statute of Frauds herein . ... .... 469 Rectification of instrument . 470 Oral evidence how far admissible . . 472 Real intention must be distinctly proved, and common to all parties 473 Quasi estoppel of one party acting as other's agent in framing instru- ment . , 475 Reformation of settlements 475 Who is entitled to have deed rectified 476 Option to rectify or set aside in certain cases . . . ." 476 CHAPTER IX. Misrepresentation and Frauds. Part I. — Misrepresentation. Of misrepresentation in general 479 The legal effect of ' 'representations' ' , . . 381 Conflicting views hereon 483 Alderson v. Maddison 484 Cases in which non-fraudulent representation can effect contract . . 485 Representations amounting to Warranty or Condition 487 Distinction between warranty and condition on sale of goods . . . 487 Cases specially treated: Marine Insurance . . 489 Same rule not applicable to Life Insurance .... . . . 490 Fire Insurance 491 Suretyship 493 Extent of creditor's duty to surety . . . .... . 493 Sales of land 495 Specific performance and compensation: .three classes of cases dis- tinguished 496 General duty of vendor to describe property correctly 502 Wilde v. Gibson considered ■ 505 Family Settlements 507 Partnership, contracts to take shares in companies, and contracts of promoters 507 , Contract to marry not exceptional 510 Part II. — Fraud. Fraud generally but not always includes misrepresentation 511 Right of rescission ... 512 Fraudulent representation or concealment 513 Fraud as actionable wrong: reckless ignorance equivalent to knowl- edge (if untruth 515 General rules of responsibility for false representation . 517 Special rule as to sales by auction 518 Marriage an exception : not avoided by fraud 519 Consent of third person procured by fraud is voidable 519 TABLE OF CONTENTS. 21 [The paging refers to the [•] pages.] CHAPTER X. The Eight of Rescission. General rules as to rescission for misrepresentation or fraud . 52? The representation relied on must be of fact . . ' 521 Not of mere matter of opinion ,' ' 523 The representation must be such as to induce the contract ' 524 Effect of party misled having means of knowledge . ... 525 Materiality of representation ... ' 527 Contracts connected with previous fraud . . , . . .'.'.'.'. 528 Representation must be by a party to the contract . ''.'.'.'. 529 Representations of agents and liability of principals '..'.'.. 530 Statements of directors and promoters .... 532 Agent always liable for his own wrong . . . ."''.. 533 Representation must be in same transaction 533 Rights of party misled: option to rescind 535 Election how to be made . . 536 Right exerciseable by and against representatives 540 No rescission where the former state of things cannot be restored . 541 No rescission against innocent purchasers for value ... . . 544 Distinction in cases of obtaining goods by fraud where no property passes 545 Repudiation of shares 546 Rescission must be within reasonable time, i. e. a time not such as to show acquiescence . . . . 547 Special duty of shareholders in companies . . . . 550 Result of unfounded charges of fraud ... ... . 551 Cancellation of instruments ... . . . 552 CHAPTER XI. Dueess and Undue Influence. I. Duress at Common Law 553 Recovery of money paid under compulsion ... 555 II. The equitable doctrine of Undue Influence . . 556 Presumption of influence from confidential relations . . . 558 Rules as to burden of proof: Hunter v. Atkins 560 Rules as to voluntary settlements 563 Presumptions against and duties of persons in fiduciary relations . 565 Family arrangements 568 Particular cases where influence presumed: Relations analogous to parent and child 569 To solicitor and client 570 Spiritual influence . . ' 571 Undue influence without fiduciary relation 572 Duty of trustees . . . 572 Undervalue material only as evidence 573 "Whether in itself a ground for refusing specific performance . . . 576 Exceptional protection oi expectant heirs and reversioners . ... 579 Old law as to sales of reversions . 582 Actofl867 583 Rules of equity as to " catching bargains " not affected 584 What are " catching bargains " 585 Burden of proof and terms of relief 586 22 TABLE OP CONTENTS. [The paging refers to the [*] pages.] PAGE Sales of reversionary interests 589 " Surprise " and " improvidence " not substantive ground of relief against contracts, but only evidence of fraud, &c . 590 Eight of rescission for undue influence 593 Confirmation and acquiescence 595 Special questions as to relation of solicitor and client 596 • CHAPTER XII. Agreements op Imperfect Obligation. Nature of Imperfect Obligations: Eight without remedy 597 1. Remedy lost. Statutes of Limitation 598 Eights of creditor notwithstanding loss of remedy by action .... 600 Acknowledgment 600 "What is sufficient acknowledgment 601 Statutes of limitation belong to lex fori 603 2. Conditions precedent to remedy not satisfied. A. Statute of Frauds, s. 4 604 A law of procedure only, not of substance 606 Eesults of informal agreement : Where money paid , . . . 608 . Where agreement executed 610 Part performance, in equity 611 Informal ante-nuptial agreements, antl confirmation by post-nuptial writing 613 Distinction of equitable estoppel, 615 B. The " Slip " in marine insurance, . 615 Recognition of it for collateral purposes by modern decisions .... 617 Of stamp duties in general 619 C. Statutes regulating professions . . 620 Costs of uncertificated solicitors 621 Medical practitioners 622 Medical Act, 1858 623 Apothecaries' Act 623 Special questions on Medical Act 624 3. No remedy at all. Arbitrators 626 Counsel's fees . . . • 626 As to non-litigious business, or account with solicitor, qn 628 Judicial recognition ofoounsel's fees 629 Solicitors Remuneration Act, 1881 629 Special agreements between solicitor and client 629 Certain contracts of infants since Infants' Belief Act 630 Tippling Act 630 Trade Union agreements 631 A converse case on repeal of usury laws 632 Treatment of Equitable obligations at Common Law 633 Summary of results of this chapter 634 TABLE OF CONTENTS. 23 [The paging refers to the [«] pages.] APPENDIX. PAGE Note A. Terminology and fundamental conceptions of contract 635 Note B. Authorities on contract by correspondence 640 Note C. History of the equitable doctrine of separate estate 646 Note D. Authorities on limits of corporate powers 653 Note E. Foreign laws prescribing forms of contract 671 Note F. History of consideration .... 673 Note G. Early authorities on assignment of choses in action 679 Note H. Occupations, dealings, &c, regulated or restrained by statute . 682 Note I. Indian Contract Act on unlawful agreements 686 Note K. Indian Contract Act on impossible agreements 689 Note L. Bracton on fundamental error 690 Note M. Mistake in wills 691 Note N. On the supposed equitable doctrine of " making representations good" 692 Note O. Indian Contract Act on fraud, &c 700 Note P. Foreign laws on undue influence and undervalue ....... 703 TABLE OF CASES. NOTE.- 1 — Where the decision is one of the Court of Appeal, the reports are referred to asCh. Div. and Q. B. Div.; where it is that of a Judge of first instance, the reference is given as Oh. D. or Q. B. D. [The paging refers to the [*] pages. ] PAGE Abbott v. Sworder (1852) 4 De G. & Sm. 448 578 Aberaman Ironworks Co. v. "Wickens (1868) 4 Ch. 101 502 Ackroyd v. Smith (1850) 10 C. B. 164; 19 L. J. C. P. 315; 14 Jur. 1047 . 228 Adams v. Lindsell (1818) 1 B. & Aid. 681 640,641,644 Addinell's case (1865) 1 Eq. 225; 35 L. J. Ch. 75; 13 L. T. 456; 11 Jur. 965; 14 W. E. 72 . . .39 Addison v. Cox (1872) 8 Ch. 76; 42 L. J. Ch. 291; 28 L. T. 45; 21 W. B. 180 210 Agar v. Athenaeum Life Ass. Soc. (1858) 3 C. B. N. S. 725; 27 L. J. C. P. 95; 4 Jur. N. S. 211 666 Aggs v. Nicholson (1856) 1 H. & N. 165; 25 L. J. Ex. 348; 4 W. E. 576 . 219 Aguilar v. Aguilar (1820) 5 Mad. 414 . ..... 652 Ahearne v. Hogan (1844) Drew. 310 559, 571 Aiken v. Short (1856) 1 H. & N. 210; 25 L. J. Ex. 321; 27 L. T. O. S. 188; 4 Wr. 645 409 Albion Steel and Wire Co. v. Martin (1875) 1 Ch. D. 580; 45 L. J. Ch. 173; .33 L. T. 660; 24 W. E. 134 245 Alderson v. Maddison (1880) 5 Ex. D. 293; 7 Q. B. Div. 174; 8 App. Ca. 467; 50 L. J. Q. B. 466; 45 L. T. 334; 29 W. E. 556 . . . 484, 693 Alexander v. Crosbie (1835) LI. & G. temp. Sugden, 145 472 Alger v. Thacker (1837) 36 Mass. 51; 19 Pick. 51 . .... . . 312 Alison, Ex parte (1874) 15 Eq. 394; 9 Ch. 1 442 Allcocku Modrhouse (1882) 9Q. B. Div. 366; 47 L. T. 404; 30 W. E. 871; 47 J. P. 85 . 225 Allen v. Allen (1842) 2 Dr. & W. 307; 1 L. & L. 427 (Ir.) . . . 55 Allen?). Baker (1882) 86 N. C. 91; 41 Am. Eep. 444 378 Allen v. Jackson (1875) 1 Ch. Div. 399; 45 L. J. Ch. 310; 33 L. T. 713: 24 W. E. 306; reversing 19 Eq. 631 .' . 309 Alliance Bank v. Broom (1864) 2 Dr. & Sm. 289; 34 L. J. Ch. 956; 11 L. T. 332; 10 Jur. N. S. 1121; 13 W. E. 127 181 Alliance Bank of Simla v. Carey (1880) 5 C. P. D. 429; 49 L. J. C. P. 781; 29 W. E. 306; 44 J. P. 735 603 Allkins v. Jupe (1877) 2 C. P. D. 375; 46 L. J. C. P. 824; 36 L. T. 851 331, 684 Allsopp v. Wheatcroft (1872) 15 Eq. 59; 42 L. J. Ch. 12; 27 L. T. 372; 21 W. E. 102 315, 316, 318 Alton v. Midland Ey. Co. (1865) 19 C. B. N. S. 213; 34 L. J. C. P. 292: 11 Jur. N. S. 672; 13 W. E. 918 75,202 Alvanley v. Kinnaird (1849) 2 Mac. & G. 1; 12 L. T. 288 432 Alvarez de la Eosa v. Prieto (1864) 16 C. B. N. S. 578; 33 L. J. C. P. 262; 10 L. T. 757; 10 Jur. N. S. 851; 12 W. E. 1029 624 Anchor Ins. Co. Case (1862) 2 J. & H. 412; 10 W. E. 724 408 (24) TABLE OF CASES. 25 [The paging refers to the [*] pages.'] Anderson's Case (1869) 8 Eq. 509; 18 W. R. 71 P 402 Anderson v. Fitzgerald (1853) 4 H. L. C. 484; 17 Jur. 995 491 Anderson v. Radcliffe (1858) E. B. & E. 806; 29 L. J. Q. B. 128; 6 Jur. N. S. 578; 8 W. R. 283 295 298 Andrews, Ee (1873) L. R. 8 Q. B. 153; 28 L. T. 353; 21 W. R. 480; sub. nom. Be Edwards, 42 L. J. Q. B. 99 304 Andrews v. Salt (1873) 8 Ch. 622; 21 W. R. 431 . . ' 304 Angell, Be (1861) 29 L. J. C. P. 227; 6 Jur. N. S. 1373 628 Angell v. Duke (1875) L. R. 10 Q. B. 174; 44 L. J. Q. B. 78; 32 L. T. 25, 320; 23 W. R. 307, 548 160, 364, 698 Anglo-Egyptian Navigation Co. v. Rennie (1875) L. R. 10 C. P. 271 ; 44 L. J. C. P. 130; 32 L. T. 467; 23 W. R. 626 369 Antoine v. Morshead (1816) 6 Taunt. 237; 1 Marsh. 558 280 Appleby v. Johnson (1874) L. R. 9 C. P. 158; 43 L. J. C. P. 146; 30 L. T. 261; 22 W. R. 515 39 Appleby v. Meyers (1867) L. R. 1 C. P. 615; 2 ib. 651; 36 L. J. C. P. 331; 16 L. T. 669 368 Arbuthnot v. Norton (1846) 5 Moo. P. C. 219; 3 Moo. Ind. App. 435; 10 Jur. 145 287, 288 Archer v. Hudson (1844) 7 Beav. 551; 13 L. J. Ch. 380; 8 Jur. 701 559, 565 Ardglasse v. Muschamp (1684) 1 Tern. 236 . . 581 Argos, Cargo ex (1872-3) L. R. 5 P. C. 134; 28 L. T. 745; 21 W. R. 707; affirming 42 L. J. Adm. 49 . . . . . . . • 252 Armstrong v. Armstrong (1834) 3 My. & K. 45; 2 Cr. & M. 274; 3 L. J. Ch. 101 ... 329 Armstrongs Lewis (1834) 3 My. & K. 45; 2 Cr. & M. 274; 3 L. J. Ch. 101 . 329 Armstrong v. Stokes (1872) L. R. 7 Q. B. 598; 41 L. J. Q. B. 253; 26 L. T. 872; 21 W. R.'52 98, 102 Armstrong v. Toler (1826) 11 Wheat. 258 322, 325 Arnold v. Arnold (1880) 14 Ch. Div. 270; 42 L. T. 705; 28 W. R. 635 . . 499 Arnold v. Mayor of Poole (1842) 4 M. & Gr. 860; 5 Scott, N. R. 741; 2 D. N. S. 574; 12 L. J. C. P. 97; 7 Jur. 653 .. . 146, 153 Arrowsmith, Ex parte (1878) 8 Ch. Div. 96; 47 L. J. Bk. 46; 38 L. T. 547; 26 W. R. 600 683 Arthur v. Wynne (1880) 14 Ch. D. 603; 49 L. J. Ch. 557; 43 L. T. 46; 28 W. R. 972 378 Arundel's Case (1616) Hob. 64 113 Ashburv Ry. Carriage Co. v. Riche (1875) L. R. 7 H. L. 653; 44 L. J. Ex. 185; 33 L. T. 451 121, 127, 455, 667, 670 Ashley's Case (1870) 9 Eq. 263; 39 L. J. Ch. 354; 22 L. T. 83; 18 W. R. 395 " 539 Asiatic Banking Corporation, Ex parte (1867) 2 Ch. 391; 36 L. J. Ch. 222; 16 L. T. 162; 15 W. R. 414 20, 213 Aspden v. Seddon (1876) 1 Ex. Div. 496; 46 L. J. Ex. 353; 36 L. T. 45; 25 W. R. 277 226 Athenseum Life Assurance Soc. v. Pooley (1858) 3 De G. & J. 294; 28 L. J. Ch. 119; 5 Jur. N. S. 129 215 Atherfold v. Beard (1788) 2 T. R. 610 . .272 Atkinson v. Denby (1860) 6 H. & N. 778; 7 ib. 934; 30 L. J. Ex. 361; 31 ib. 362; 8 Jur. N. 8. 1012 336, 556 Atkinson v. Ritchie (1809) JO East, 530 . . 346, 360 Atleei-. Backhouse (1838) 3 M. & W. 633; 1 H. & H. 135 554 Attenborough v. St. Katharine's Dock Co. (1878) 3 C. P. Div. 450; 47 L. J. C P. 763; 38 L. T. 404; 26 W. R. 583 545 Attorney-General v. G. E. Ry. Co. (1880) 5 App. Ca. 473; affirming 11 Ch. , Div 449; 49 L. J. Ch. 545; 42 L. T. 810; 28 W. R. 769; 44 J. P. 648 ' 121, 126, 662, 671 26 TABLE OP CASES. [The paging refers to the [*] pages.] PAGE Attorney-General v. Ray (1874) 9 Ch. 397; 43 L. J. Ch. 321, 478; 29 L. T. 373 - 22 W. R. 361 498 491 Attorney-General v. Sitwell (1835) i Y.'&'c! Ex! 559 '.'.'.'.'.''.'.'. 472 Attorneys and Solicitors Act, Be (1875) 1 Ch. D. 573 ; 44 L. J. Ch. 47; 24 W. R. 38 295 Attwood v. Small (1835-8) 6 CI. & F. 232 524, 526 Austin v. Guardians of Bethnal Green (1874) L. R. 9 C. P. 91; 43 L. J. C. P. 100 ; 29 L. T. 807; 22 W. R. 406 147, 153 Austin v. G. W. Ry. Co. (1869) L. R. 2 Q B. 442; 36 L. J. Q. B. 201; 16 L. T. 320; 15 W. R. 863 399 Australian Royal Mail, &c. Co. v. Marzetti (1855) 11 Ex. 228; 3 C. L. R. 1179; 24 L. J. Ex. 273 151 Austria, Emperor of, v. Day and Kossuth (1861) 3 D. F. J. 217; 30 L. J. Ch. 690; 7 Jur. N. S. 639 . . 207 Avery v. Langford (1854) Kay, 667; 23 L. J. Ch. 837; 18 Jur. 905 ... 316 Ayers v. South Australian Banking Co. (1871) L. R. 3 P. C. 548; 40 L. J. P. C. 22; 19 W. R. 860; 7 Moo. P. C. N. S. 432 63 Ayerst v. Jenkins (1873) 16 Eq. 275; 42 L. J. Ch. 690; 29 L. T. 126; 21 W. R. 878 '263, 324, 333 Ayles v. Cox (1852) 16 Beav. 23; 22 L. T. O. S. 232 499 Aylesford, Earl of, v. Morris (1873) 8 Ch. 484; 42 L. J. Ch. 546; 28 L.T. 541; 21 W. R. 424; affirming 42 L. J. Ch. 146 . 580, 581, 582, 584, 585, 586, 588 Ayr Harbour Trustees v. Oswald (1883) 8 App. Ca. 623 125 Azemar v. Casella (1867) L. R. 2 C. P. 431, 677; 36 L. J. C. P. 124, 263; 16 L. T. 571; 15 W. R. 998 ' 437, 487, 488 Babcocku. Lawson (1880) 4 Q. B. D. 394; 5Q. B. Div. 284; 49 L. J. Q. B. 408; 42 L. T. 289; 27 W. R. 591 544 545 Badcock, Be (1880) 17 Ch. D. 361; 43 L. T. 688; 29 W. R. 278 695 Bagnall v. Carlton (1877) 6 Ch. Div. 371; 47 L. J. Ch. 30; 37 L. T. 481; 26 W. R. 243 509 Bagshaw v. East Union Ry. Co. (1849) 7 Ha. 114; 2 Mac. & G. 389 . 656, 669 Bagshaw v. Seymour (1856) 18 C. B. 903; 29 L. J. Ex. 62, n 534 Bagster v. Earl of Portsmonth (1826) 5'B. & C. 170; 7 D. & R. 614; 2 C. & P. 178 '. . . . 87 Bagueley v. Hawley (1867) L. R. 2 C. P. 625; 36 L. J. C. P. 328; 17 L. T. 116 430 Bahia & San Francisco Ry. Co., Be (1868) L. R. 3 Q. B. 584; 37 L. J. Q. B. 176; 18 L. T. 467; 16 W. R. 862 215 Bailey J). Harris (1849) 12 Q. B. 905; 18 L. J. Q. B. 115 257 Bailey v. Piper (1874) 18 Eq. 683; 43 L. J. Ch. 704; 31 L. T. 86; 22 W. R. 943 500 Bailey e. Stephens (1862) 12, C. B. N. S. 91; 31 L. J. C. P. 226; 6 L. T. 356; 8 Jur. N. S. 1063 .' . 228 Bailey v. Sweeting (1861) 9 C. B. f. S. 843; 30 L. J. C. P. 150; 9 W. R. 273 605 Baily's Case (1868) 5 Eq. 428; 3 Ch. 592; 37 L. J. Ch. 255; 16 W. R. 571 25 Baily v. De Crespigny (1869) L. R. 4 Q. B. 180; 38 L. J. Q. B. 98; 19 L, T. 681; 17 W. R. 494 356, 357, 358, 365 Uain v. Fothergill (1873-4) L. R. 7H. L. 158; 43 L. J. Ex. 243; 31 L. T. 387 440 Bainbridge v. Firmstone (1838) 8 A. & E. 743; 1 P. & D. 2; 1 W. "W. & H. 600 173 Bainbrigge v. Browne (1881) 18 Ch. D. 188; 50 L. J. Ch. 522; 44 L. T. 705 29 W. R. 782 569 Baines v. Woodfall (1859) 6 C. B. N. S. 657; 28 L. J. C. P. 338; 6 Jur. N. S. 19 - 41 Baird's Case (1870) 5 Ch. 725; 23 L. T. 424; 18 "W. R. 1094 . . . . \ . 122 TABLE OP CASES. 27 [The paging refers to the [•] page;. ] Baker v. Bradley (1855) 7 D. M. G. 597; 25 L. T. 71: 1 Jur. N. S. 489; I^ W. E..361 569 Baker v. Cartwright (1861) 10 C. B. N. S. 124; 30 L. J. C. P. 364; 7 Jur. N. S. 1247 I....' 510 Baker v. Loader (1872) 16 Eq. 49; 42 L. J. Ch. 113; 21 W. E. 167 .. . 570 Baker v. Monk (1864) 33 Beav. 419; 4 D. J. S. 388 574, 591 Baker v. Eead (1854) 18 Beav. 398; 3 W. E. 118 -568 Belfour v. Ernest (1859) 5 C. B. N. S. 601; 28 L. J. C. P. 170; 32 L. T. 6 S. 295; 5 Jur. N. S. 439; 7 W. E. 207 219 605 Ball *. Storie (1823) 1 Sim. & St. 210 '. 470 473 Bank of Augusta v. Earle (1839) 13 Peters, 519 ' 120 Bank of Australasia v. Breillat (1847) 6 Moo. P. C. 152; 12 Jur. 189 . 122, 321 Bank of Columbia v. Patterson (1812) 7 Cranch, 299 ... • 487 Bank of England v. Anderson (1836) 2 Keen, 328; 3 Bing. N. C. 589; 4 Scott, 50; 2 Hodges, 294; 1 Jur. 9 254 Bank of Hindustan v. Alison (1870) L. E. 6 C. P. 54, 222; 40 L. J. C. P. 1, 117; 23 L. T. 616, 854; 19 W. E. 505 442 Bank of Ireland v. Evans' Charities (1855) 5 H. L. C. 389 131, 147 Bank of New South Wales v. Owston (1879) 4 App. Ca. 270; 48 L. J. P. C. 25; 40 L. T. 500 395 Bank of United States v. Daniel (1838) 12 Peters, 32 .... 405, 406, 409 Bank of United States v. Owens (1829) 2 Peters, 527 254 Banks v. Crossland (1874) L. E. 10 Q. B. 97; 44 L. J. M. C. 8; 32 L. T. 226; 23 W. E. 414 601 Banner, Ex parte (1881) 17 Ch. Div. 480; 44 L. T. 908; 30 W. R. 24 . . . 182 Banner v. Johnston (1871) L. E. 5 H. L. 157; 40 L. J. Ch. 730; 24 L. T. 542 197 Bannerman v. White (1861) 10 C. B. N. S. 844; 31 L. J. C. P. 28; 4 L. T. 740; 8 Jur. N. S. 282; 9 W. R. 784 439, 489, 501 Barden v. Keverberg (1836) 2 M. & W. 61; 2 Gale, 201; 6 L. J. Ex. 66 . 82 Barker v. Cox (1876) 4 Ch. D. 464; 46 L. J. Ch. 62; 35 L. T. 662; 25 W. E. 138 498 Barker v. Hodgson (1814) 3 M. & S. 267 346, 362 Barkworth v. Young (1856) 4 Drew. 1; 26 L. J. Ch. 153; 3 Jur. N. S. 34 . 382, 613, 614 Barnes v. Toye (1884) 13 Q. B. D. 410 69 Barnett, Ex parte (1876) 3 Ch. D. 123; 45 L. J. Bk. 120; 34 L. T. 664; 24 W. E. 904 423 Barrett v. Hartley (1866) 2 Eq. 789; 14 L. T. 474; 12 Jur. N. S. 426 .. . 575 Barry v. Croskey*(1861) 2 J. & H. 1 518, 529 Bartlett v. Wells (1862) 1 B. & S. 836; 31 L. J. Q. B. 57; 5 L. T. 388; 8 Jur. N. S. 762; 10 W. E. 229 75 Barton v. Muir (1874) L. E. 6 P. C. 134; 44 L. J. P. C. 19; 31 L. T. 593; 23 W. E. 427 252 Barton v. Piggott (1874) L. E. 10 Q. B. 86 256 Bar wick v. English Joint Stock Bank (1867) L. E. 2 Ex. 259; 36 L. J. Ex. 147; 16 L. T. 461; 15 W. E. 877 115, 530, 531 Baskcomb v. Beckwith (1869) 8 Eq. 100; 38 L. J. Ch. 536; 17 W. E. 812; 13 Sol. J. 971 500 Bate v. Hooper (1855) 5 D. M. G. 338; 3 W. E. 639 410 Bateman «. Mayor, &c, of Ashton-under-Lyne (1858) 3 H. & N. 323; 27 L. J. Ex. 458 659 Bateman v. Mid- Wales Ry. Co. (1866) L. E. 1 C. P. 499; 35 L. J. C. P. 205; 12 Jur. N. S. 453; 14 W. E. 672 130 Bateman v. Pinder (1842) 2 G. & D. 790; 3 Q. B. 574; 11 L. J. Q. B. 281 601 Bateman v. Countess of Boss (1813) 1 Dow, 235 83 Bates, Ex parte (1841) 2 Mont. D. & D. 337 77 28 TABLE OF CASES. [The paging refers to the [«] pages.] PAGE Bateson v. Gosling (1871) L. E. 7 C. P. 9; 41 L. J. C. P. 53; 25 L. T. 560; 20 W. R. 98 ; . . • 242 Bath's Case (1878) 8 Gh. Div. 334; 47 L. J. Ch. 601; 38 L. T. 267; 26 W. E. 441 661 Bath, Earl of, and Montague's Case (1693) 3 Ch. Ca. 55 592 Batson v. Donovan (1820) 4 B. & Aid. 21 492 Batstm o. Newman (1876) 1 C. P. Div. 573; 25 W. E. 85 259 Battersbee v. Farrington (1818) 1 Swanst. 106 . . .615 Batty i). Chester (1842) 5 Beav. 103 263 Baxendale v. Seale (1854) 19 Beav. 601; 24 L. J. Ch. 385; 24 L. T. O. S. 306; 19 Jur. 581 432 Baxter v. Earl of Portsmouth (1826) 7 D. & E. 614; 5 B. & C. 170; 2 C. & P. 178 ■ 87 Bayley v. Manchester, &c. Ey. Co. (1872) L. E. 7 C. P. 415; 8 ib. 148; 41 L. J. C. P. 278; 42 ib. 78; 28 L. T. 366 115, 395 Baylis *. Dineley (1815) 3 M. & S. 477 54 Beachey v. Brown (1860) E. B. & E. 796; 29 L. J. Q. B. 105; 6 Jur. N. S. 345; 8 W. E. 292 349, 510 Beanland v. Bradley (1854) 2 Sm. & G. 339; 2 W. E. 602 569 Beard v. Webb (1800) 2 Bos. & P. 93 83 Beattie v. Lord Ebury (1872) 7 Ch. 777; 7 H. L. 102; 41 L. J. Ch. 804; 44 ib. 20; 27 L. T. 398; 30 ib. 581: 20 W. E. 994; 22 ib. 897 . .106, 521 Beauchamp, Earl, v. Winn (1873) L. E. 6 H. L. 223 393 Beaumont v. Dukes (1822) Jac. 422 697 Beaumont v. Eeeve (1846) 8 Q. B. 483; 15 L. J. Q. B, 141; 10 Jur. 284 . 262 Beavan v. M'Donnell (1854) 9 Ex. 309; 23 L. J. Ex. 94 92 Bechervaise v. Lewis (1872; L. E. 7 C. P. 372; 41 L. J. C. P. 161; 26 L. T. 848; 20 W. E. 726 243 Beck's Case (1874) 9 Ch. 392; 43 L. J. Ch. 531; 30 L. T. 346 40 Beckham v. Drake (1841) 9TVI. & W. 79; affirmed, sub nam. Drake v. Beck- ham, 11 ib. 315; 12 L. J. Ex. 486; 7 Jur. 204 98, 100, 101 Bedford v. Bagshaw (1859) 4 H. & N. 538; 29 L. J. Ex. 59 534 Bedford, Duke of, i\ Trustees of British Museum (1822) 2 M. & K. 552 . 231 Beer v. London and Paris Hotel Co. (1875) 20 Eq. 412; 32 L. T. 715 . . 162 Beeston v. Beeston (1875) 1 Ex. D. 13; 45 L. J. Ex. 230; 33 L. T. 700; 24 W. E. 96 334 Begbie v. Phosphate Sewage Co. (1875) L. E. 10 Q. B. 491; 1 Q. B. Div. 679; 35 L. T. 530; 25 W. E. 85 333 Behn v. Burness (1863) 3 B. & S. 751; 32 L. J. Q. B. 204; 8 L. T. 207; 9 Jur. N. S. 620 483,489 Belli'. Eeid (1813) 1 M. & S. 726 277 Bellairs v. Bellairs (1874) 18 Eq. 510; 43 L. J. Ch. 669; 22 W. E. 942 . . 309 Bellairs v. Tucker (1884) 13 Q. B. D. 562 523 Bellamy v. Sabine (1835) 2 Ph. 425 569 Belshaw v. Bush (1851) 11 C. B. 191; 22 L. J. C. P. 24; 17 Jur. 67 . . . 424 Beman v. Eufford (1851) 1 Sim. N.'§. 550 656 Bennett (Doe d.) v. Hale (1850) 15 Q. B. 171; 18 L.J. Q. B. 353 .... 627 Bensley v. Bignold (1822) 5 B. & Aid. 335 253, 684 Bentley v. Mackay (1869) 4 D. F. J. 279; 6 L. T. 632; 10 W. E. 593 . 403, 473, 477, 595 Benwell v. Inns (1857) 24 Beav. 307; 26 L. J. Ch. 663; 30 L. T. 70 . . . 317 Benyon v. Nettlefold (1850) 3 Macn. & G. 94 262, 263 Berdoe®. Dawson (1865) 34 Beav. 603; 12 L. T. 103; 11 Jur. N". S. 254; . 13 W. E. 420 594 Berry v. Henderson (1870) L. E. 5 Q. B. 296; 39 L. J. M. C. 77; 22 L. T. 331 684 Besant, Be (1879) 11 Ch. Div. 508; 48 L. J. Ch. 497; 40 L. T. 469; 27 W. E. 741 305 TABLE OF CASES. 29 [The paging refers to the [•] pages.] Besant v. Wood (1879) 12 Ch. D. 605; 40 L. T. 445 266 Beswick v. Swindells (1835) 3 A. & E. 868; 5 N. & M. 378 386, 388 Betts r. Burch (1859) 4 H. & N. 506; 1 F. & P. 485; 28 L. J. Ex. 267 . . 467 Beverley's Case (1603) 4 Co. Rep. 123 b • 87 Beverley v. Lincoln Gas Co. (1837) 6 A. & E. 829; 2 N. & P. 283 ... . 150 Beynon v. Cook (1875) 10 Ch. 389; 32 L. T. 353; 23 W. B. 413, 531, 580,584,587 Bickerton v. Burrell (1816) 5 M. & S. 383 . .... 104, 105 109 Biffin v. Bignell (1862) 7H.&N. 877; 31 L. J. Ex. 189; 8 Jur. N. S. 647 555 Bigland v. Skelton (1810) 12 East, 436 .... 380 Billage v. Southee (1852) 9 Ha. 534 561, 571 Bindley v. Mulloney (1869) 7 Eq. 343; 20 L. T. 263; 17 W. B. 510 . . . . ' 268 Bingham v. Bingham (1748) 1 Ves. sen. 126 ... ... 406 444 Bird's tr. (1876) 3 Ch. D. 214 452 Birkmyr v. Darnell (1705) 1 Sm. L. C. 326; Salk. 27 159, 162 Birmingham Banking Co., Ex parte (1870) 6 Ch. 83; 40 L. J. Ch. 190; 19 W. R. 193 . . 661 Biscoe v. Kennedy (1762) 1 Bro. C. C. 16, n. . 650 Blachford \\ Preston (1799) 8 T. E. 89 287 Blackburn v. Smith (1848) 2 Ex. 783; 18 L. J. Ex. 187 543 Blackie v. Clark (1852) 15 Beav. 595 474, 559, 563, 571 Blacklock v. Dobie (1876) 1 C. P. D. 265; 45 L. J. C. P. 498; 35 L. T. 338; 24 W. R. 674 240 Blackwood v. London Chartered Bank of Australia (1874) L. R. 5 P. C. 92; 43 L. J. P. C. 25; 30 L. T. 45; 22 W. R. 419 397 Blades v. Free (1829) 9 B. & C. 167; 4 M. & R. 282 37, 96 Bloomer v. Spittle (1872) 13 Eq. 427; 41 L. J. Ch. 369; 26 L. T. 272; 20 W. R. 435 430, 477, 501 Bloxam r. Metrop. Ry. Co. (1868) 3 Ch. 337; 17 L. T. 637; 18 ib. 41; 16 W. R. 490 ; 300, 663 Blvth& Co.'s Case (1872) 13 Eq. 529; 20 W. R. 504 619 Boast v. Firth (1868) L. R. 4 C. P. 1; 38 L. J. C. P. 1; 19 L. T. 264; 17 W. R. 29 375, 377 Bobbett v. Pinkett (1876) 1 Ex. D. 368: 35 L. J. Ex. 555; 34 L. T. 851; 24 W. E. 711 218 Bold v. Hutchinson (1855) 5 D. M. G-. 558 476 Bolingbroke v. Swindon Local Board (1874) L. R. 9 C. P. 575; 43 L. J. C. P. 575; 30 L. T. 723; 23 W. R. 47 115, 395 Bolton, Duke of, v. Williams (1793) 2 Ves. 138; 4 Bro. C. C. 297 . 647, 652 Bonar v. Macdonald (1850) 3 H. L. C. 226; 14 Jur. 1077 242 Bone v. Ekless (1860) 5 H. & N. 925; 29 L. J. Ex. 438 335 Bonner v. G. W. Ry. Co. (1883) 24 Ch. Div. 1; 48 L. T. 619; 32 W. E. 190; 47 J. P. 580 124 Bonnewell v. Jenkins (1878) 8 Ch. Div. 70; 47 L. J. Ch. 758; 38 L. T. 81; 26 W. E. 294 ' 42 Booth v. Bank of England (1840) 7 CI. & F. 509; 6 Bing. N. C. 415 . . 254 Borell v. Dann (1843) 2 Ha. 440 578 Borries v. Imperial Ottoman Bank (1873) L. E. 9 C. P. 38; 43 L. J. C. P. 3; 29 L. T. 689; 22 W. R. 92 101 Bosanquet v. Wray (1816) 6 Taunt. 597; 2 Marsh. 319 •. . . 633 Bostock v. N. Staffordshire E. Co. (1856) 3 DeG. & S. 584; 25 L. J. Ch. 325- 27 L. T. O. S. 33; 20 Jur. 248; 4 W. E. 336 124, 654, 660 Boston Ice Co. v. Potter (1877) 123 Mass. 28 421 Boswell v. Coaks (1884) 27 Ch. Div. 424 504 Boulton v. Jones (1857) 2 H. & N. 564; 27 L. J. Ex. 117; 3 Jur. N. S. 1156 421 Boussmaker, Ex parte (1806) 13 Ves. 71 279 Bowen v. Hall (1881) 6 Q. B. Div. 333; 50 L. J. Q B. 305; 44 L. T. 75; 29 W. E. 367; 45 J. P. 373 TO2 Bower v. Cooper (1842) 2 Ha. 408; 11 L. J. Ch. 387 225 30 TABLE OF CASES. [The paging refers to the [•] pages.] PAGE Eoyce v. Tabb (1873) 18 Wallace (Sap. a. U. S.), 546 271, 347 Boyse v. Rossborough (1856-7), 6 H. L. C. 2; 3 Jur. ST. S. 373 . 391, 557, 560 Bracewell v. Williams (1866) L. R. 2 C. P. 196; 15 L. T. 215; 12 Jur. N. S. 1004; 15 W. R. 130 183 Bradford v. Romney (1862) 30 Beav. 431; 6 L. T. 208; 8 Jur. N. S. 403; . 10 W. R. 414 458 Bedford r. Roulston (1858) 8 Ir. C. L. Rep. 468 170 Bradford v. Syniondson (1881) 7 Q. B. Div. 450; 50 L. J. Q B. 582; 45 L. T. 364; 30 W. R. 27; 4 Asp. M. C. 455 444 Bradford v. Williams (1872) L. R. 7 Ex. 259; 41 L. J. Ex. 164; 26 L. T. 641; 21 W. R. 782 . . .' 385 Bradlaugh v. Newdegate (1883) 11 Q. B. D. 1; 52 L. J. Q. B. 454; 31 W. R 792 295 303 Bradshawc! Bradshaw (i84lj 9M. &W. 29' '. '. '. '. '. '. '. '. '. '. . . .'239 Bradshaw v. Lane. & Yorks. Ry. Co. (1875) L. R. 10 C. P. 189; 44 L. J. C. P. 148; 31 L. T. 847 ........ 189 Bramah v. Roberts (1837) 3 Bing. N. C. 963 129 Braiidao v. Barnett (1846) 12 CI. & Fin. 787; 3 C. B. 519 218 Brandon v. Nesbitt (1794) 6 T. R. 23 . . . '. •. . . 280 Branley v. S. E. R. Co. (1862) 12 C. B. N. S. 63; 31 L. J. C. P. 286; 6 L. T. 458* 9 Jur. N. S. 329 339 Brayshaw v. Eaton (1839) 7 Scott, 183; 5 Bing. N. C. 231; 1 Arn. 466; 3 Jur. 222 69 Breton v. Woollven (1881) 17 Ch. D. 416; 50 L. J. Ch. 369; 44 L. T. 337; 29 W. R. 777 185 Brett, Ex parte (1875) 1 Ch. Div. 151; 45 L. J. Bk. 17; 33 L. T. 711; 24 W. R. 101; 13 Cox, C. C. 128 512 Bridgman v. Green (1755) 2 Ves. sen. 627; Wilm. 58 •. . . 570,592 Briggs, Exparte (1866) 1 Eq. 483; 35 L. J. Ch. 320; 14 L. T. 39; 12 Jur. N S 32^ 537 Bright v. Legertoii (1861) 2D. F.J. ' 606; 8 W. R., 678 ......... 548 Bristow ». Secqueville (1850) 5 Ex. 275; 19 L. J. Ex. 289; 14 Jur. 674 . . 283 Britain v. Rossiter (1879) 11 Q. B. Div. 123; 48 L. J. Ex. 362; 40 L. T. 240; 27 W. R. 482 605, 611 British & American Telegraph Co. v. Colson (1871) L. R. 6 Ex. 108; 40 L. J. Ex. 97; 23 L. T. 868 641 British Linen Co. v. Drummond (1830) 10 B. & C. 903 603 Broad v. Munton (1879) 12 Ch. Div. 131; 48 L. J. Ch. 837; 40 L. T. 828; 27 W. R. 826 504 Brogden v. Metropolitan Ry. Co. (1877) 2 App. Ca. 666 ........ 31, 42 Bromley v. Smith (1859) 26 Beav. 644; 7 W. R. 557 588 Brook v. Brook (1861) 9 H. L. C. 193; 4 L. T. 93; 7 Jur. N. S. 422; 9 W. R. 461 249, 250 Brookman's Trust, Be (1869) 5 Ch. 182; 39 L. J. Ch. 138; 22 L. T. 891; 18 W. R. 199 310 Brotherhood's Case (1862) 4 D. F. J. 566; 10 W. R. 852 667 Broughton v. Hutt (1858) 3 De G. & J. 501 406, 446 Broughton v. Manchester Waterworks Co. (1819) 3 B. & Aid. 1 128 Broun v. Kennedy (1863) 33 Beav. 133; 4 D. J. S. 217 . . . . . . . 477, 570 Brown v. Brine (1875) 1 Ex. D. 5; 45 L. J. Ex. 129; 33 L. T. 703; 24 W. R. 177 290 Brown v. Byers (1847) 16 M. & W. 252; 16 L. J. Ex. 112 129 Brown o. Dale (1878) 9 Ch. D. 78; 27 W. R. 149 117 Brown d. Jodrell(1827) 3 C. & P. 30; M. &M. 105 89 Brown v. Mayor of London (1861) 9 C. B. N. S. 726; 13 ib. 828; 30 L. J. C. P. 225; 31 ib. 280; 7 Jur. N. S. 755; 8 ib. 1103; 9 W. R. 336; 10 ib. 522 358, 388 Brown v. Royal Insurance Co. (1859) 1 E. &. E. 853; 28 L. J. Q. B. 275; 5 Jur. N. S. 1255 361, 383 TABLE OP CASES. 31 [The paging refers to the [*] pages. ] Browning v. Wright (1799) 2 B. & P. 13 .....'. 454 P 461 Brownlie v. Campbell (1880) 5 App. Ca. 925 700 Brunton's Claim (1874) 19 Eq. 302; 44 L. J. Ch. 450: 3i L. T '747- 23 W. E. 286 215 Bryan (Doe d.) v. Bancks (1821). 4 B. & Aid. 401; Gow,' 220 53 Bryant v. Flight (1839) 5 M. & W. 114 ' ' ' ' 45 Bryant v. Herbert (1878) 3 C. P. Div. 389; 47 L. J. C. P. 670: 39 L. T 17- 26 W. R. 898 ' ' 140 Bubb v. Yelverton (1870) 9 Eq. 468; 39 L. J. Ch. 428; 22 L. T. 258;' 18 W. R. 512 686 Bulkley v. Wilford (1834) 2 CI. & Fin. 102 246 702 Bultu. Morrel (1840) 12 A. & E. 745 " ' 129 Bulteel v. Plummer (1870) 6 Ch. D. 160; 18 W. R. 109i ... 310 Burchell v. Clark (1876) 2 C. P. Div. 88; 46 L. J. C. P. fl5; 35 L. T. 690: 25 W. R. 334 453 Burgess's Case (1880) 15 Ch. D. 507; 49 L. J. Ch. 541; 43 L. T. 45; 28W. R. 792 547 Burgess v. Eve (1872) 13 Eq. 450; 41 L. J. Ch. 515; 26 L. T. 540; 20 W. K. 311 • 243 Burghartfl. Hall (1839) 4 M. &W. 727 69 Burke v. S. E. Ey. Co. (1879) 5 C. P. D. 1; 49 L. J. C. P. 107; 41 L. T. 554; 28 W. R. 306; 44 J. P. 283 47 Burn v. Carvalho (1839) 4 M. & Cr. 690; 3 B. & Ad. 382; 1 N. & M. 700; 3 Jur. 1141; affirmed 4 N. & M. 889; 1 A. & E. 883 .209 Burnard v. Haggis (1863) 14 C. B. N. S. 45; 32 L. J. C. P. 189; 8 L. T. 320; 9 Jur. N. S. 1325; 11 W. R. 644 75 Burrel, Ex parte(1876) 1 Ch. Div. 537; 45 L. J. Bk. 68; 34 L. T. 198; '24 W. R. 353 239 522 Burroughes v. Bayne (1860) 5 H. & K 296; 29 L. J.' Ex. 188; 2 L. T. 16 142 Burrow v. Scammell (1881) 19 Ch, D. 175; 51 L. J. Ch. 296; 45 L. T. 606; 30 W. R. 310; 46 J. P. 135 '. . . 500 Burro wes v. Lock (1805)10 Ves. 470 517 Burton v. Sturgeon (1876) 2 Ch. Div. 318; 45 L. J. Ch. 633; 34 L. T. 706; 24 W. R. 782 84 Bute, Marquis of, v. Thompson (1844) 13 M. & "W. 487; 17 L. J. Ex. 95 . 372 Butler and Baker's Case (1591) 3 Co. Rep. 68 48 Bwlch-y-Plwm Lead Mining Co. v. Baynes (1867) L. R. 2 Ex. 324; 36 L. J. Ex. 183; 16 L. T. 597; 15 W. R. 1108 539 Byrne v. Van Tienhoven (1880) 5 C. P. D. 344; 49 L. J. C. P. 316; 42 L. T. 371; 44 J. P. 667 26 Caballero v. Henty (1874) 9 Ch. 447; 43 L. J. Ch. 635; 30 L. T. 314; 22 W. E. 446 • . 503 Cahill v. Cahill (1883) 8 App. Ca. 420; 49 L. T. 605; 31 W. E. 861; revers- ing 7 Ir. L. E. 361 83 Caldecott, Ex parte (1876) 4 Ch. Div. 150; 46 L. J. Bk. 14; 35 L. T. 172; 25 W. R. 103 289, 333 Calder v. Dobell (1871) L. R. 6 C. P. 486; 40 L. J. C. P. 224; 25 L. T. 129; 19 W. R. 978 • .... 95; 97, 98 Callisheru. Bischoffshein (1870) L. R. 5 Q. B. 449; 39 L. J. Q. B. 181; 18 W. R. 1127 182 Calverley v. Williams (1790) 1 Ves. jun. 210 430 Camberweil and S. London Building Society v. Holloway (1879) 13 Ch. D. 754; 49 L. J. Ch. 361; 41 L. T. 752; '28 W. R. 222 499 Cambridge, Mayor of, v. Dennis (1858) E. B. & E. 660; 27 L. J. Q. B. 474 242 Campanarii). Woodburn (1854) 15 C. B. 400; 3 C. L. R. 140; 24 L. J. C. P. 13; 1 Jur. N. S. 17 37 32 , TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Campbell's Case (1873) 9 Ch. 1; 43 L. J. Ch. 1; 29 L. T. 519; 22 W. R. 113 i 665, 668 Campbell, Ex parte (1873) 16 Eq. 417; 9 Ch. 1; 42 L. J. Ch. 771; 29 L. T. 519; 22 W. R. 113 442 Campbell v. Fleming (1834) 1 A. & E. 40; 3 N. &. M. 834 538 Campbell v. French (1797) 3 Ves. 321 691 Canada Southern Ry. Co. v. Gebhard (1883) 109 U. S. (2 Davis) 527 .. . 662 Canham v. Barrv (1855) 15 C. B. 597; 3 C. L. E. 487; 24 L. J. C. P. 100; 1 Jur. N. S. 402 356, 357, 513 Cannam v. Farmer (1849) 3 Ex. 698 79 Cannan v. Bryce (1819) 3 B. & Aid. 179 323 Capper, Ex parte (1876) 4 Ch. Div. 724; 46 L. J. Bk. 6, 57; 35 L. T. 558, 718; 25 W. B. 100J244 ■ . . 467 Cargill v. Bower (1878) 10 Ch. D. 502; 47 L. J. Ch. 649; 38 L. T. 779; 26 W. E. 716 532 Carington, Lord, v. Wycombe Rv. Co. (1868) 3 Ch. 377; 37 L. J. Ch. 213; 18 L. T. 96; 16 W. E. 494 .124 Carmarthen, Mayor of, v. Lewis (1834) 6 C. & P. 608; 2 M. & Gr. 249 . . 154 Carr v. Jackson (1852) 7 Ex. 382; 21 L. J. Ex. 137 99, 109 Carrington v. Eoots (1837) 2 M. & W. 248 606 Carrol v. Blencow (1801) 4 Esp. 27 81 Carter v. McLaren (1871) L. E. 2 Sc. & D. 120 395 Cartwright v. Cartwright (1853) 3 D. M. G-. 982; 22 L. J. Ch. 841; 17 Jur. 584 268 Cartwright ti. Hateley (1791) 1 Ves. jun. 292 . 426 Casborne 'u. Bursham (1839) 2 Beav. 76 * 565 Castle V Wilkinson (1870) 5 Ch. 534; 39 L. J. Ch. 843; 18 W. E. 586 . . 498 Catling v. King (1877) 5 Ch. Div. 660; 46 L. J. Ch. 384; 36 T. L. 526; 25 W. E. 550 162 Cato v. Thompson (1882) 9 Q. B. Div. 616; 47 L. T. 491 458 Caton v. Caton (1865) 1 Ch. 137; 35 L. J. Ch. 292; 12 Jur. N. S. 171; affirm- * ed, L. E. 2 H. L. 127; 36 L. J. Ch. 886 612 Catt v. Tourle (1869) 4 Ch. 654; 38 L. J. Ch. 665; 21 L. T. 188 . . 315, 317 Caudell v. Shaw (1791) 4 T. E. 361 82, 63 Cavendish v. Geaves (1857) 24 Beav. 163; 27 L. J. Ch. 314; 3 Jur. N. S.' 1086 212, 213 Central Ey. Co. of Venezuela v. Kisch (1867) L. E. 2 H. L. 99; 36 L. J. Ch. 849; 16 L. T. 500; 15 W. E. 821 508, 509, 525. 550 Challis's Case (1870-1) 6 Ch. 266; 40 L. J. Ch. 431; 23 L. T. 882; 19 W. E. 453 , 433 Chamberlain v. Williamson (1814) 2 M. & S. 408 377 Chambers v. Manchester and Milford Ey. Co. (1864) 5 B. & S. 588; 33 L. J. Q. B. 268; 10 Jur. N. S. 700 '. 253, 659 Champion v. Eigby (1830) 1 Russ. & M. 539; affirmed on app. L. C. 18th March, 1840 596 Chandelor v. Lopus (1603) 1 Sm. L. C. 174; 2 Cro. (Jac. 1)2 516 Chanter v. Hopkins (1838) 4 M. & W. 399; 1 H. & H. 377; 3 Jur. 58 . 487 Chanter v. Leese (1839) 4 M. & W. 295; 5 ib. 698 204.. Chapleo v. Brunswick Building Society (1881) 6 Q. B. Div. 696; 50 L. J. Q. B. 372; 44 L. T. 449; 29 W. E. 529 667 Chappie v. Cooper (1844) 13 M. & W. 252; 13 L. J. Ex. 286 . . . 71, 72 Charlesworth v. Hoi); (1873) L. E. 9 Ex. 38; 43 L. J. Ex. 25; 29 L. T. 647; 22 W. E. 94 267 Charter v. Charter (1874) L. R. 7 H. L. 364 691 Charter v. Trevelyan (1844) 11 CI. & Fin. 714 244, 541, 548 Chasemoreji. Turner (1874) L. R. 10 Q. B. 500; 45 L. J. Q. B. 66; 33 L. T. 323; 24 W. R. 70 601 Chavasse, Ex parte (1865) 4 D. J. S. 655 281. TABLE OF CASES. 3'd CTlie paging refers to the [*] pages.] Cheale v. Kenward (1858) 3 De G. & J. 27; 27 L. J. Ch. 784; 4 Jnr. N S. 981 174 Chemin de fer du Dauphine v. Clet, Dalloz. Jurisp. G6n. (1861) pt* 1, 105 369 Cherry v. Colonial Bank of Australasia (1869) L. E. 3 P. C. 24: 6 Moo. P. C. N. S. 235 , .... 106 Cherry v. Heming (1849) 4 Ex. 631; 19 L. J. Ex. 63 161, 163 Chesterfield v. Janssen (1750-1) 1 Wh. & T. L. C. 592; 2 Ves. sen. 125 . 579, 581 Chicago & G. E. Ey. Co. v. Dane (1870) 43 N. Y. (4 Hand.) 240 . ... 175 Chilton v. Corporation of London (1878) 7 Ch. D. 735; 47 L. J. Ch. 433; 38 L. T. 498; 26 W. R. 474 200 Chinnock v. Marchioness' of Ely (1865) 4 D. J. S. 638 41 Cholmondeley v. Clinton (1821) 4 Bligh. 1 301 Chorley, Ex parte (iSIO) 11 Eq. 157; 40 L. J. Ch. 153; 19W. B. 430 . .215 Chubb j'. Stretch (1870) 9 Eq. 555; 39 L. J. Ch. 329; 22 L. T. 86; 18 W.B.483 650 Church v. Imperial Gaslight, &c. Co. (1838) 6 A. & E. 846; 3 N. & P. 35; 1 W. W. & H. 137 146, 150 Citizens' Bank of Louisiana v. First National Bank of New Orleans (1873) L. E. 6 H. L. 352; 43 L. J. Ch. 269; S3 W. E. 194 615, 696 City Bank, Ex parte (1868) 3 Ch. 758; 16 W. E. 919 . 129, 130, 214, 216 Clack v. Holland (1854) 19 Beav. 262 211 Clare v. Lamb (1875) L. E. 10 C. P. 334; 44 L. J. C. Pi 177; 32 L. T. 196 23 W. E. 389 409 Clark, Re (1866) 1 Ch. 292; 35 L. J. Ch. 314; 13 L. T. 732; 14 W. E. 378 . 73 Clarke v. Girwood (1877) 7 Ch. Div. 9; 47 L. J. Ch. 116; 37 L. T. 614; 26 W. E. 90 475 Clark v. Malpas (1862) 31 Beav. SO; 4 D. F. J. 401 574 Clarke v. Cobley (1789) 2 Cox, 173 76 Clarke r. Cuckfield Union (1852) 1 B. C. C. 81 ; 21 L. J. Q. B. 349; 16 Jur. 686 152 Clarke v. Dickson (1859) E. B. & E. 148; 6 C. B. N. S. 453; 27 L. J. Q. B. 223; 28 L. J. C. P. 225; 5 Jur. N. S. 1029; 4 ib. 832; 7W. E. 443 .. . 542 Clarkson v. Edge (1863) 33 Beav. 227; 33 L. J. Ch. 443; 10 Jur. N. S. 871; 12 W. E. 518 317 Clay v. Eay (1864) 17 C. B. N. S. 188 . . 328 Clayton v. Adams (1796) 6 T. E. 605 79 Clayton v. Corby (1843) 5 Q. B. 415; D. & M. 449; 14 L. J. Q. B. 364; 8 Jur. 212 228 Clegg v. Edmonson (1857) 8 D. M. G. 787; 29 L. T. O. S. 131; 3 Jur.N.S.299 538 Clementson v. Blessig (1855) 11 Ex. 135; 3 W. E. 510 278 Cleve v. Financial Corporation (1873) 16 Eq. 363; 43 L. J. Ch. 54; 29 L. T. 89 174 Clifford r. Watts (1870) L. E. 5 C. P. 577; 40 L. J. C. P. 36; 22 L. T. 717; 18 W. E. 925 351, 352, 372 Clinan ■>,. Cooke (1802) 1 Sch. & L. 22 469 Clinch v. Financial Corporation (1868) 5 Eq. 483; 4 Ch. 117; 38 L. J.Ch. 1; 19 L. T. 334; 17 W. E. 84 551 Clive v. Beaumont (1847) 1 De G. & S. 397 40 Close v. Close (1853) 4 D. M. G. 176 . . . . 242 Clothworkers' Co. Case (1599)11 Co. Eep. 86 6 313 Cloueh v L. & N. W. Ey. Co. (1871) L. E. 7 Ex. 26; 41 L. J. Ex. 17; 25 L T 708; 20 W. E. 189 512, 529, 537, 539, 540, 541, 551 Clowes?'. Higginson (1813) 1 Ves. &B. 524 431,457*469 Clubb v. Hutson (1865) 18 C. B. N. S. 414 . . . 288 Clugas v. Penaluna (1791) 4 T. E. 466 282 Coates v. Collins (1871) L. E. 6 Q. B. 469; 7 Q. B. 144; 41 L. J. Q. B. 90; 26 L. T. 134; 20 W. E. 187 446 Cobbett v. Brock (1855) 20 Beav. 524 559,594 Cochrane v. Willis (1865) 1 Ch. 58; 35 L. J. Ch. 36; 13 L. T. 339; 11 Jur. N S. 870; 14 W. E. 190 443, 444 Cockell v. Taylor (1851) 15 Beav. 103; 21 L. J. Ch. 545 574 3 PRINCIPLES OF CONTRACT. 34 TABLE OP CASES. [The paging refers to the [*] pages. ] PAGE Cocker's case (1876) 3 Ch. Div. 1; 45 L. J. Ch. 882; 35 L. T. 290 .... 195 Cocking v. Ward (1845) 1 C. B. 858; 15 L. J. C. P. 245 610 Cogan «. Duffield (1876) 2 Ch. Div. 44 ; 45 L. J. Ch. 307; 34 L. T. 593; 24 W.. R. 905 476 Cohen v. Wilkinson (1849) 12 Beav. 125, 138; 1 Mac. & G. 481; 18 L. J. Ch. 378; 13 Jur. 641 655 Colborne & Strawbridge, Ex parte (1870-1) 11 Eq. 478; 40 L. J. Ch. 93, 343; 23 L. T. 515; 24 ib. 255; 19 W. E. 223; 15 Sol. J. 614 214 Coldcot v. Hill (1662) 1 Ch. Cas. 15 461 Cole v. Gibbons (1734) 3 P. Wtns. 289 . . . ' 581 Cole v. Gibson (1750) 1 Ves. sen. 503 307 Coles t'. Pilkington (1874) 19 Eq. 174; 44 L. J. Ch. 381; 31 L. T. 423; 23 "W. E. 41 695 Coles v. Trecothick (1804) 9 Ves. 234 577 Collen v. Wright (1857) 7 E. & B. 301; 8 ib. 647; 26 L. J. Q. B. 147; 27 ib. 215; 3 Jur. N. S. 363; 4 ib. 537 ..... 106 Collier v. Brown (1788) 1 Cox. 428 . • 577 Collins v. Blantern (1767) 1 Sim. L. C. 387; 2 Wils. 341, 347 . . 288, 329 Collins v. Evans (1844) 5 Q. B. 820; D. & M. 669; 13 L. J. . Hastie (1856) 5 H. L. C. 673; 25 L. J. Ex. 253; 2 Jur. N. S. 1241 371, 372, 441, 691 Coverdale v. Eastwood (1872) 15 Eq. 121; 42 L. J. Ch. 118; 27 L. T. 646; 21 W. R. 216 695, 696 Cowan v. Milbourn (1867) L. R. 2 Ex- 230; 36 L. J. Ex. 124; 16 L. T. 290; 15 W. R. 750 233, 270, 324, 684 Coward and Adam's Purchase, Re (1875) 20 Eq. 179; 44 L. J. Ch. 384; 32 L. T. 682; 23 W. R. 605; 19 Sol. J. 595 84 Coward v. Hughes (1855) 1 K. & J. 443 409, 584 Cowdry v. Day (1859) 1 Giff. 316; 1 Ch. Ca. 141; 29 L. J. Ch. 39; 1 L. T. - 88; 5 Jur. N. S. 1199; 8 W. R. 55 466 Cowie v. Stirling (1856) 6 E. & B. 333; 25 L. J. Q. B. 335; 2 Jur. N. S. 663; sub. nom. Storm v. Stirling in Q. B. 3 El. & Bl. 832; 23 L. J. Q. B. 298; 17 Jur. 788 205 Cox *. Prentice (1815) 3 M. & S. 344 439,. 450 Coxhead v. Mullis (1878) 3 C. P. D. 439; 47 L. J. C. P. 761; 39 ,L. T. 349; 27 W. R. 136 ' . . 61 Cragoe v. Jones (1873) L. R. 8 Ex. 81; 42 L. J. Ex. 68; 28 L. T. 36; 21 W. R. 408 242 Crampton v. Varna Ry. Co. (1872) 7 Ch. 562; 41 L. J. Ch. 817: 20 W R. 723 154 Cripps v. Hartnoll (1863) 4 B. & S. 414; 32 L. J. Q. B. 387; 8 L. T. 768; 10 Jur. N. S. 200; 11 W. R. 953 159 Croft v. Graham (1863) 2 D. J. S. 155; 9 L. T. 112, 589; 9 Jur. N. S. 1032 584 Crofts v. Middleton (1856) 8 D. M. G. 192; 25 L. J. Ch. 543; 2 Jur. N. S. 528 251 Crook v. Corporation of Seaford (1871) 6 Ch. 551; 25 L. T. 1; 19 W. R. 938 131 Cropton v. Davies (1869) L. R. 4 C. P. 159; 38 L. J. C. C. 159; 20 L. T. 30; 17 W. R. 444 . . .452 Crosby v. Wadsworth (1805) 6 East, 602; 2 Smith, 559 606 Crossiey v. Maycock (1874) 18 Eq. 180; 43 L. J. Ch. 379; 22 W. R. 387 . 39 Crouch v. Credit Fonder of England (1873) L. R. 8 Q'. B. 374; 42 L. J. Q. B. 183; 29 L. T. 259; 21 W. R. 946 129, 214, 216, 219, 220 Crow v. Robinson (1868) L. 3 C. P. 264 212 Cruickshanks v. Rose (1831) 5 C. & P. 19; 1 M. & Rob. 100 . ...... 631 Cullen v. Thompson's Trustees and Kerr (1862) 4 Macq. H. L. Cas. 424; 6 L. T. 870; 9 Jur. N. S. 85 533 Cumber v. Wane (1719) 1 Sm. L. C. 357; 1 Str. 425 180 Cumming v. Ince (1847-8) 11 Q. B. 112; 17 L. J. Q. B. 105; 12 Jur. 331 . 554 Cundy v. Lindsay (1878) 3 App. Ca. 459; 47 L. J. Q. B. 481; 38 L. T. 573; 26 W. R. 406 423, 545 36 TABLE OF CASES. [The paging refers to the [*] pages. J PAGE Cunningham v. Dunn (1878) 3 C. P. Div. 443 362 Currie v. Goold (1817) 2 Madd. 163 411 Currie v. Misa (1875) L. E. 10 Ex. 153; 44 L. J. Ex. 94; 23 W. E. 450; affirmed 1 App. Ca. 544; 45 L. J. Q. B. 852; 35 L. T. 414; 24 W. E.1049 167 Curtis v. Williamson (1874) L. E. 10 Q. B. 57; 44 L. J. Q. B. 27; 31 L. T. 678; 23 W. E. 236 103 Curzon v. Belworthy (1852) 3 H. L. C. 742 591 Cutter v. Powell (1795) 2 Sm. L. C. 1; 6 T. E. 320 385, 437 Cuttst). Ward (1867) L. E. 2 Q. B. 357; 36 L. J. Q. B. 161; 15 L. T. 614; 15 W. E. 445 686 Da Costa v. Davis (1778) Cowp. 729 ' 277, 382 Daere v. Gorges (1825) 2 S. & St. 454 431 Dale v. Hamilton (1846) 5 Ha. 369 612 Dally v. Wonham (1863) 33 Beav. 154; 11 W. E. 1090 568 D'Alteyrac, Ex parte (1872) 15 Eq. 36; 42 L. J. Ch. 6; 27 L. T. 750; 21 W. E. 50 467 Dalton v. Angus (1881) 6 App. Ca. 740; 50 L. J. Q. B. 689; 44 L. T. 844; 30 W. E. 196 228 Dalton v. Gib (1839) 7 Scott, 117; 5 Bing. N.C. 198: 1 Am. 463; 3 Jur. 43 70 Dalton v. Midland Ey. Co. (1853) 13 C. B. 474; 22 L. J. C. P. 177; 17 Jur. 719 80 Daniel's sett. tr. Be (1875) 1 Ch. Div. 375; 45 L. J. Ch. 105; 34 L. T. 308; 24 W. E. 227 452 Darrell v. Tibbitts (1880) 5 Q. B. Div. 560; 50 L. J. Q. B. 33; 42 L. T. 797; 29 W. E. 66; 44 J. P. 695 492 Dashwood v. Jermyn (1879) 12 Oh. D. 776; 27 W. E. 868 695 Daubuz v. Morshead (1815) 6 Taunt. 332 280 Dauglish v. Tennent (1866) 8 B. & S. 1; L. E. 2 Q. B. 49; 36 L. J. Q. B. 10; 15 W. E. 196 238 Davenport v. Bishopp (1843)2 Y. & C. 451; 1 Ph. 698 202 Davenport v. Eeg. (1877) 3 App. Ca. 115; 47 L. J. P. C. 8; 37 L. T. 727 . . 53 Davey v. Shannon (1879) 4 Ex. D. 81; 48 L. J. Ex. 459; 40 L. T. 628; 27 W. E.*599 315, 318 Davies v. Davies (1870) 9 Eq. 468; 39 L. J. Ch. 343; 22 L. T. 505; 18 W. E. 634 58, 61 Davies v. Fitton (1842) 2 Dr. & War. 225 471, 472 Davies v. Jenkins (1877) 6 Ch. D. 728; 26 W. E. 260; 22 Sol. J. 385 . . . 649 Davies v. London and Provincial Marine Insurance Co. (1878) 8 Ch. D. 469; 47 L. J. Ch. 511; 38 L. T. 478; 26 W. E. 794 493 Davis v. Duke of Marlborough (1818) 1 Swanst. 74 287 Davis v. Thomas (1830) 1 Euss. & M. 506 466 Dawes v. Harness (187,5) L. E. 10 C. P. 166; 44 L. J. C. P. 194; 32 L. T. 159; 23 W. E. 398 539 Dawson v. Fitzgerald (1876) L. E. 9 Ex. 7; 1 Ex. Div. 257; 45 L. J. Ex. 893; 35 L. T. 220; 24 W. E. 773 : ... 293 Day v. Newman (1788) 2 Cox, 77 577, 578 Deacon v. Gridley (1854) 15 C. B. 295; 3 C. L. E. 129; 24 L. J. C. P. 17 . 177, 611 Dearie v. Hall (1823) 3 Euss. 1 209 De Beil v. Thomson (1841) 3 Beav. 469; 12 CI. &Fin. 45 310, 692 Debenham r. Ox. (1849) 1 Ves. sen. 276 309 De Busschev. Alt (1877) 8 Ch. Div. 286; 47L. J. Ch. 386; 38 L. T. 370 . 245, 549 De Gaillon v. L'Aigle (1798) 1 Bos. & P. 357 82 De' Houghton v. Money (1 866) 2 Ch. 164 ; 1 5 L. T. 403 ; 15 W. E. 21 4 . 1 93, 295, 299 De LaTouche's Settlement, Be (1870) 10 Eq. 599; 40 L. J. Ch. 85 . . . 454 De Mattos v. Gibson (1858) 4 De G. & J. 276; 32 L. T. O. S. 268; 5 Jur. N. S. 347; 7 W. E. 100, 152 224 TABLE OF CASES. 37 [The paging refers to the [»J pages.] Dendy v. Henderson (1855) 11 Ex. 194; 24 L. J. Ex. 324 316 De Nicholls v. Saunders (1870) L. E. 5 C. P. 589: 39 L. J. C. P. 297; 22 L L. T. 661; 18 W. E. 1106 425 Denn v. Wilford (1826) 8 Dow. & Ey. 549 455 Dennett v. Atherton (1872) L. E. 7 Q. B. 316; 41 L. J. Q. B. 165; 20 W. E.442 . . . 230' Denny v. Hancock (1870) 6 Ch. 1; 23 L. T. 686; 19 W. E. 54 . 432 Dent v. Bennett (1839) 4 My. & Cr. 269; 7 Sim. 539; 3 Jur. 99 . . . 557, 559, 561, 562, 571 Denton v. G. N. Ey. Co. (1856) 5 E. & B. 860; 25 L. J. Q. B. 129; 2 Jur. N. S. 185 14, 17, 21, 22 Denton v. Peters (1870) L. E. 5 Q. B. 475; 23 L. T. 281 218 Deposit Life Assurance Co. v. Ayscough (1856) 6 E. & B. 761 ; 26 L. J. Q. B. 29; 2 Jur. N. S. 812 ' 539 Derry v. Duchess of Mazarine (1697) 1 Ld. Eaym. 147; 1 S,alk. 116, 646 . 82 Devonshire's* Earl of, Case (1607) 11 Co. Eep. 89 a 141 Dew r. Parsons (1819) 2 B. & Aid. 562; 1 Chit. 295 555, 556 De Wahl v. Braune (1856) 1 H. & N. 178; 25 L. J. Ex. 343 81, 95 De Wutz v. Hendricks (1824) 2 Bing. 314; 9 Moore, 586 281 Dickinson v. Burrell'(1866) 1 Eq. 337; 35 L. J. Ch. 371; 12 Jur. N. S. 199; 14 W. E. 412 . . . 299 Dickinson v. Dodds (1876) 2 Ch. Div. 463; 45 L. J. Ch. 777; 34 L. T. 607; 24 W. E. 594 24, 27, 29, 37 Dickinson v. Valpy (1829) 10 B. & C. 128; 5 M. & E. 126 129 Dickson «. Eeuter's Telegram Co. (1877) 2 C. P. D. 62; 3 C. P. Div. 1; 47 L. J. C. P. 1; 37 L. T. 370; 26 W. E. 23 201 Dickson v. Swansea Vale Ey. Co. (1868) L. E. 4 Q. B. 44; 38 L. J. Q. B. 17; 19 L. T.. 346; 17 W. E. 51 215 Diggle v. Higgs (1877) 2 Ex. Div. 422; 46 L. J. Ex. 721; 37 L. T. 27; 25 W. E. 777 259, 335, 685 Diggle v. London and Black wall Ey. Co. (1850) 5 Ex. 442; 6 Eailw. Ca. 590; 19 L. J. Ex. 308; 14 Jur. 937 150 Dillon v. Cunningham (1872) L. E. 8 Ex. 23; 42 L. J. Ex. 11; 27 L. T. 830 . 651 Dimmock v. Hallett (1866) 2 Ch. 21; 36 L. J. Ch. 146; 15 L. T. 374'; 12 Jur. N. S. 953; 15 W. E. 93 498 Dinn v. Blake (1875) L. E. 10 C. P. 388; 44 L. J. C. 276; 32 L. T. 489 . 404 Ditcham v. Worrall (1880) .5 C. P. D. 410; 49 L. J. C. P. 688; 43 L. T. . 286; 29 W. E. 59; 44 J. P. 799 61, 62 Dixon, Ex parte (1876) 4 Ch. Div. 133; 46 L. J. Bk. 20; 35 L. T. 644; 25 W. E. 105 • 101 Dixon d. Bjvill (1856) 3 Macq. 1; 2 Jur. N. S. 933 220 Dobell v. Stevens (1825) 3 B. & C. 623; 5 D. & E. 490 ..... . . . 525 Doe d. Bennett v. Hale (1850) 15 Q. B. 171 627 Doed. Bryan v. Bancks (1821) 4 B. & Aid. 401; Gow, 220 53 Doe d Garnons v. Knight (1826) 5 B. & C. 671; 8 D. & E. 348 48 Doe d. Leach v. Micklem (1805) 6 East, 486; 2 Smith, 499 452 Doe d. Pennington v. Taniere (1848) 12 Q. B. 998; 18 L. J. Q. B. 49; 13 Jur. 119 155 Doe d. Williams v. Evans (1845) 1 C. B. 717; 14 L. J. C. P. 237; 9 Jur. 712 301 Don v. Lippmann (1837) 5 CI. & Fin. 1 603 Donaldson ». Farwell (1876) 3 Otto (93 U.S.) 631 512,541 Douglas v. Culverwell (1862) 31 L. J. Ch. 543; 6 L. T. 272; 10 W. E. 327 466 Downes v. Jennings (1863) 32 Beav. 290; 8 L. T. 341; 11 W. E. 522 . 247, 248 Dresser v. Norwood (1863) 14 C. B. N. S. 574; 17 ib. 466; 32 L. J. C. P. 201- 34 ib. 48; 10 Jur. N. S. 851; 12 W. E. 1030 97, 101 Drew *. Nunn (i879) 4 Q. B. Div. 661; 48 L. J. Q. B. 591; 40 L. T. 671; 27 W. E. 810 36, 88, 94, 97 38 TABLE OF CASES. [The paging refers to the [»] pages.] PAGE Druiff v. Lord Parker (1868) 5 Eq. 131; 37 L. J. Ch. 241; 18 L. T. 46; 16 W. R. 557 . . 458, 470, 473 Dublin and Wicklow Ey. Co. v. Black (1852) 8 Ex. 181; 7 Eailw. Ca. 434; 22 L. J. Ex. 94 . . . . 64 Duckett v. Gover (1877) 6 Ch. D. 82; 46 L. J. Ch. 407; 25 "W. E. 455 . . 664 Dudgeon v. Pembroke (1874) L. E. 9 Q. B. 581; 43 L. J. Q. B. 220; 31 L. T. 31' 22 W. E. 914 . 325 684 Dugdalea. Lovering (1875)'l! E. 10 C. P. 196; 44 L. J.' C. P." 197; 32 £.' T. 155; 23 W. E. 391 10 Duke v. Andrews (1848) 2 Ex. 290; 5 Eailw. Ca. 496 ; 17 L. J. Ex. 231 . 41 Duncan v. Cashin (1875) L. E. 10 C. P. 554; 44 L. J. C. P. 396; 32 L. T. 497; 23 W. E. 561 646 Duncan, Fox & Co. v. N. &S. Wales Bank (1880) 11 Ch. Div. 88; 6 App. Ca. 15; 50 L. J. Ch. 355; 43 L. T. 706; 29 W. E.763 243 Duncans Tophamj;i849) 8 C. B. 225; 18L. J. C. P. 310 . . .641 Dundas v. Dutens (1790) 1 Ves. jun. 199 . . 614 Dunlopu Higgins (1848) 1 H. L. C. 381; 12 Jur. 295 641 Dunmore, Countess of, v. Alexander (1830) 9 Shaw & Dunlop, 190 640 Dunnage v. White (1818) 1 Swanst. 137 . ... 574 Dunne v. English (1874) 18 Eq. 524; 31 L. T. 75 . . . .' 246 Dunston v. Imperial Gas Light Co. (1832) 3 B. & Ad. 125 153 Durham, Earl of, v. Legard (1865) 34 Beav. 611; 34 L. J. Ch. 589; 11 Jur.. N. S. 706 440, 499 Dutton v. Marsh (1871) L. K. 6 Q. B. 361; 40 L. J. Q. B. 175; 24 L. T. 470; 19 W. E. 754 . 98, 219 Dutton v. Poole (1677) 2 Lev. 210; Vent. 318 201 Dutton v. Thompson (1883) 23 Ch. Div. 278; 52 L. J. Ch. 661; 31 W. E. 596 564 Duvergier v. Fellows (1830) 10 B. & C. 826; 5 Bing. 248; 5 M. & P. 403 . 328 Dyer v. Hargrave (1805) 10 Ves. 505 497, 524, 525 Eagle Insurance Co., Ex parte (1858) 4K.&J. 549; 27 L. J. Ch. 829; 6 W. E. 779 665 Eaglesfield v. Marquis of Londonderry (1876) 4 Ch. Div. 693; 35 L. T. 822; 38 ib. 303; 25 W. E. 190; 26 ib. 540 406, 428 Ea-rle «. Hopwood (1861) 9 C. B. N. S. 566; 30 L. J. C. P. 217; 3 L. T. 670; 7 Jur. N. S. 775; 9 W. E. 272 297 East Anglian Ey. Co. v. E. C. Ey. Co. (1851) 11 C. B. 775; 21 *L. J. C. P. 23; 16 Jur. 249 656 East London Waterworks Co. v. Bailey (1827) 4 Bing. 283; 12 Moore. 533 149 Eastern Counties Ey. Co. v. Hawkes (1855) 1 D. M. G. 737; 5 H. L. C. , 331; 24 L. J. Ch. 601 . . 660, 669 Eastwood v. Kenyon (1840) 11 A. & E. 438; 3 P. & D. 276; 4 Jur. 1081 159,169 Eaton ti. Basker (1881) 7 Q. B. Div. 529; 50 L. J. Q. B. 444; 44 L. T. 703; 29 W. E. 597; 45 J. P. 616 156 Ebbw Vale Co. 's Case (1869) 8 Eq. 14; 20 L. T. 964 ' . . 151 Ecclesiastical Commrs. v. Merral (1869) L. E. 4 Ex. 162; 38 L. J. Ex. 93; 20 L. T. 573; 17 W. E. 676 154 Edgware Highway Board v. Harrow Gas Co. (1874) L. E. 10 Q. B. 92; 44 L. J. Q. B. 1; 31 L. T. 402 . 167, 330 Edmunds v. Bushell (1865) L. E. 1 Q. B. 97; 35 L. J. Q. B. 20; 12 Jur. N. - S. 332 _ 99 Edwards v. Aberayron, &c. Society (1875-6) 1 Q. B. D. 563; 34 L. T. 457 293 Edwards v. Brown (1831) 1 C. & J. 307; 1 Tyr. 182; 3 Y. & J. 423 ... 414 Edwards v. Burt (1852) 2 D. M. G. 55 588 Edwards v. Meyrick (1842) 2 Ha. 60 568 TABLE OP CASES. 39 [The paging refers to the [*] pages.] Edwards v. Midland By. Co. (1880) 6 Q. B. D. 287; 50 L. J. Q. E. 281; 43 L. T. 694; 29 W. E. 609; 45 J. P. 374 ... 115 Egan v. Guardians of Kensington Union (1841) 3 G. & D. 204; 3 Q. B. 935, n 627 Egerton v. Earl Brownlow (1853) 1 Sim. N. S. 464; 4 H. L. C. 1; 23 L. J. Ch. 348; 18 Jur. 71 272, 273, 274, 277 Eichholz v. Bannister (1864) 17 C. B. N. S. 708; 34 L. J. C. P. 105; 12 L. T. 76; 11 Jur. N. S. 15; 13 W. E. 96 429 Elbinger Actien-Gesellschaft v. Claye (1873) L. E. 8 Q. B. 313; affirmed on another point, 9 ib. 473; 43 L. J. Q. B. 211; 30 L. T. 871: 23 W. E. 127 98 Eley v. Positive Assurance Co. (1876) 1 Ex. Div. 20, 88; 45 L. J. Ex. 451; 34 L. T. 190 161, 203 Eliason v. Henshaw (1819) 4 Wheat. 225; Langdell, Sel. Ca. on Cont. 48 25 Ellen a Topp (1851) 6 Ex. 424; 20 L. J. Ex. 241; 15. Jur. 451 381 .Elliot v. Ince (1857) 7 D. M. G. 475; 26 L. J. Ch. 821; 3 Jur. N. S. 597 92, 93 Elliott v. Eichardson (1870) L. E. 5 C. P. 744. Fowler (1859) 4 De G. & J. 250 473 Fowler v. Hollins (1872) L. R. 7 Q. B. 616; ,7 H. L. 757; 20 W. E. 868 . 395 Fowler v. Monmouthshire Canal Co. (1879) 4Q. B. D. 334; 48 L. J. Q. B. 457; 41 L. T. 159; 27W. E. 659 • ... 621 Fox v. Nott (1861) 6 H. & N. 630; 30 L. J. Ex. 259; 4 L. T. 663 .... 227 Franks. Ex ■parte (1831) 7 Bing. 762; 1 M. & Scott, 1- . . . • . . . 81 Franks v. Duchess of Pienne (1797) 2 Esp. 587 82 Fraser v. Hill (1853) 1 McQu. 392; 1 C. L. E. 7 329 " Freedom," The (1871) L. E. 3 P. C. 594; 24 L. T. 452 227 Freeman v. Jeffries (1869) L. E. 4 Ex. 189; 38 L. J. Ex. 116; 20 L. T. 533 543 Frend v. Dennett (1858) 4 C. B. N. S. 576; 27 L. J. C. P. 314; 4 Jur. N. S. 897 156 Freshfield's Trusts, Re (1879) 11 Ch. D. 198; 40 L. T. 57; 27 W. R. 375 . 209 Frost v. Knight (1870) L. R. 5 Ex. 322; 7 ib. Ill; 41 L. J. Ex. 78, 82; 26 L. T. 77; 20 W. E. 471 18, 24, 248 Fuentes v. Montis (1868) L. E. 3 C. P. 268; 4 ib. 93; 38 L. J. C. P. 95; 19 L. T. 364; 17 W. E. 208 •• • 227 Fullalove v. Parker (1862) 12 C. B. N. S. 246; 31 L. J. C. P. 239; 6 L. T. 353; 8 Jur. N. S. 1078; 10 W. E. 581 621 Fulton v. Andrew (1875) L. E. 7 H. L. 448; 44 L. J. P. 17; 32 L. T. 209; 23 W. R. 566 413 558, 691 Furnival v. Cnombes (1843) 5 M. & Gr. 736; 6 Scott, N. E. 522; 12 L. J. C. P. 265f 7 Jur. 399 108 Furtado v. Rodgers (1802) 3 B. & P. 191 278 Gabell v. S. E. Ey. Co. (1877) 2 C. P. Div. 416; 46 L. J. C. P. 768; 37 L. ^ Gadd'1 4 Houghton '(1876) i Ex.' Div. 357; 46 L. J. Ex.' 71;' 35 L.'t. 222; 24 W R 975 Gale e.'Gtele (i877) 6 Ch. D. 144; 46 L. J. Ch. 809; 36 L. T. 690; 25 W. ■p 772 ' iyy Galloway v. Mayor of London (1866) L. R. 1 H. L. 34: 35 L. J. Ch. 477; 14 L. T. 865; 12 Jur. N. S. 747 I'* 1 42 TABLE OF CASES. » [The paging refers to the [*] pages.] PAGE Gardner v. Cazenove (1856) 1H.&N. 423; 26 L. J. Ex. 17; 5 W. E. 195 . 466 Garland v. Carlisle- (1837) 4 CI. & Fin. 693 396 Garnons (Doe d.) v. Knight (1826) 5 B. & C. 671; 8 B. & E. 348 .... 48 Garrard v. Frankel (1862) 30 Beav. 445; 31 L. J. Ch. 604; 8 Jur. N. S. 985 430, 477 Gas Light and Coke Co. v. Turner (1839) 5 Bing. N. C. 666; 6 ib. 324; 7 Scott. 779; 8 ib. 609 323 Geere v. Mare (1863) 2 H. & C. 339; 33 L. J. Ex. 50; 8 L. T. 463 . . . . 328 Geipel v. Smith (1872) L. E. 7 Q. B. 404; 41 L. J. Q. B. 153; 26 L. T. 361; 20 W. E 332 279 373 378 Gerhard v. Bates (1853) 2 El. & B. 476'; 22 L. J. Q. B. 365; 17 Jur. 1097 . ' 534 Gibbon v. Budd (1863) 2 H. & C. 92; 32 L. J. Ex. 182; 8 L. T. 321; 9 Jur. N. S. 525 623 Gibbons v. N. E. Metropolitan Asylum District (1847) 11 Beav. 1 . . . . 40 Gibbs v. Harding (1870) 5 Ch. 336; 39 L. J. Ch. 374; 18 W. E. 361 . . 266 Gibson v. D'Este (1843) 2 Y. & C. Ch. 542 505 Gibson v. East India Co. (1839) 5 Bing. N. C. 262; 7 Scott, 74 153 Gibson v. Jeyes (1801) 6 Ves. 266 ; 558, 559, 566 Gibson v. Kirk (1841) 1 Q. B. 850; 1 G. & D. 252; 10 L. J. Q. B. 297; 6 Jur. 99 155 Gidley v. Lord Palmerston (1822) 3 Bro. & Bing. 275; 7 Moore, 91 .... 100 Gilbert v. Lewis (1862) 1 D. J. S. 38; 2 J. & H. 452; 32 L. J. Ch. 347; 7 L. T. 541; 9 Jur. N. S. 187; 11 W. E. 223 551 Gilbert v. Sykes (1812) 16 East, 150 272 Giles v. Edwards (1797) 7 T. E. 181 ' ... 380 Gilkes v. Leonino (1858) 4 C. B. N. S. 485; 31 L. T. O. S. 181; 4 Jur. N. S. 537; 6 W. E. 620 23 Glasspoole v. Young (1829) 9 B. & C. 696 396 Goddard v. O'Brien (1882) 9 Q. B. D. 37 . 179 Goddard v. Snow (1826) 1 Euss. 485 247 Godwin v. Francis (1870) L. E. 5 C. P. 295; 39 L. J. C. P. 121; 22 L. T. 338 106 Gomanu Salisbury (1684) 1 Vera. 240; Eq. Ca. Ab. 22 457 Gompertz v. Bartlett (1853) 2 E. & B. 849; 2 C. L. E. 395; 23 L. J. Q. B. 65; 18 Jur. 266 436 Gooch's Case (1872) 8 Ch. 266; 42 L. J. Ch. 381; 28 L. T. 148; 21 W. E. 181 56, 57 Good v. Elliott (1790) 3 T. E. 693 271 Goodeu Harrison (1821) 5 B. & Aid. 147 56 Goodman v. Harvey (1836) 4 A. & E. 870 ; 6 N. & M. 372 218 Goodman v. Sayers (1820) 2 Jac. & W. 249 410 Goodwin v. Eobarts (1876) L. E. 10 Ex. 16, 337; 1 App. Ca. 476; 45 L. J. Ex. 748; 35 L. T. 179; 24 W. E. 987 . -. 219, 220 Gordon ». Gordon (1816-9) 3 Swanst. 400, 473 507 Gore «. Gibson (1845) 13 M. & W. 623; 14 L. J. Ex. 151; 9 Jur. 140 88, 90, 418 Gorgier v. Mieville (1824) 3 B. & C. 45 220 Gover's Case (1875) 20 Eq. 114; 1 Ch. Div. 182; 45 L. J. Ch. 83; 33 L. T. 619; 24 W. R. 125 ' . . . . . 510 Govett v. Eichmond (1834) 7 Sim. 1 193 Grasnie v. Wroughton (1855) 11 Ex. 146; 24 L. J. Ex. 265; 25 L. T. O. S. 183; 3 W. R. 509 328, 684 Graham v. Johnson (1869) 8 Eq. 36; 38 L. J. Ch. 374; 21 L. T. 77; 17 W. E. 810 ■ ' 213, 215 Grain's Case (1875) 1 Ch. D. 315; 45 L. J. Ch. 321; 33 L. T. 766 . . 194, 195 Gravely?;. Barnard (1874) 18Eq. 518; 43 L. J. Ch. 659; 30 L. T. 863 174, 315, 317 Gray v. Fowler (1873) L. E. 8 Ex. 249; 42 L. J. Ex. 161; 29 L. T. 297; 21 W. E. 916 ' 537, 538 Gray v. Gibson (1866) L. E. 2 C. P. 120; 36 L. J. C. P. 99; 15 W. E. 70 , 205 TABLE OF CASES. 43 [The paging refers to the [•] pages.] PAGE Grav v. Lewis (1869) 8 Eq. 526; 20 L. T. 282; 17 W. E. 431 .... 148, 664 Gray v. Mathias (1800) 5 Ves. jun. 286 262, 263 Gray v. Pearson (1870) L. R. 5 C. P. 568; 23 L. T. 416 205 Gray v. "Warner (18731 16 Eq. 577; 42 L. J. Ch. 556; 28 L. T. 835; 21 W. R. 808 245 Great Northern Ry. Co. v. Eastern Counties Ry. Co. (1851) 9 Ha. 306; 7 Railw. Ca. 643; 21 L. J. Ch. 837 656 Great Northern Ry. Co. v. Witham (1873) L. R. 9 C. P. 16; 43 L. J. C. P. 13; 29 L. T. 471; 22 W. R. 48 24, 175 Green v. Baverstock (1863) 14 C. B. N. S. 204; 32 L. J. C. P. 181; 8 L. T. 360; 10 Jur. N. S. 47 518 Green v. Duckett (1883) 11 Q. B. D. 275; 52 L. J. Q. B. 435; 48 L. T. 677; 31 W. R. 607; 47 J. P. 487 '555 Green v. Sevin (1879) 13 Ch. D. 589 ; 41 L. T. 724 464 Green v. Wynn (1869) 4 Cn. 204; 38 L. J. Ch. 220; 20 L. T. 131 ; 17 W. R. 385 242 Greenwood v. Greenwood (1877) 5 Ch. Div. 954; 47 L. J. Ch. 298; 37 L. T. 712; 26 W. R. 5 452, 453 Gregory v. Williams (1817) 3 Mer. 582; 1 C. & K. 65 202 Grell v. Levy (1864) 16 C. B. N. S. 73; 9 L. T. 721; 10 Jur. N. S. 210; 12 W. R. 378 ; 295 345 Gresiey v. Mousley (1861) 3 D. F. J. 433; 4 De. G. & J.' 78; 6 L." T. '86; «8 Jur. N. S. 320; 10 W. R. 222 541, 559, 583, 594, 596 Griffin v. Deveuille (1781) 3 P. Wins. 131, n 570 Griffith v. Young (1810) 12 East, 513 609 Griffiths v: Jones (1873) 15 Eq. 279; 42 L. J. Ch. 468; 21 W. R. 470 432 Griffiths v. Robins (1818) 3 Mad. 191 570 Grigby v. Cox (1750) 1 Ves. Sen. 517 559 Grimoldby v. Wells (1875) L. R. 10 C. P. 391; 44 L. J. C. P. 203; 32 L. T. 490; 23 W. R. 524 488 Griswold v. Waddington (1818) 15 Johns. (Sup. Ct. N. Y.) 57 279 Grosvenor v. Sherratt (1860) 28 Beav. 659; 8 W. R. 682 567 Guardhouse v. Blackburn (1866) L. R. 1 P. & D. 109; 35 L. J. P. 116; 14 L. T. 69; 12 Jur. N. S. 278; 14 W. R. 463 458, 691 Guest v. Smythe (1870) 5 Ch. 551; 39 L. J. Ch. 536; 22 L. T. 563; 18 W. R. 742 244 Guinness v. Land Corporation of Ireland (1882) 22 Ch. Div. 349; 52 L. J. Ch. 177; 47 L. T. 517; 31 W. R. 341 671 Gunn's Case (1867) 3 Ch. 40; 37 L. J. Ch. 40; 17 T. L. 365; 16 W. R. 97; 12 Sol. J. 172 ' 32 Gurney v. Behrend (1854) 3 E. & B. 622; 23 L. J. Q. B. 265; 18 Jur. 856 . 227 Gurney v. Womersley (1854) 4 E. & B. 133; 24 L. J. Q. B. 46; 1 Jur. N. S. 328 437 Guthing v. Lynn (1831) 2 B. & Ad. 232 43 Gwynne v. Heaton (1778) 1 Bro. C. C. 1 573 H. v. W. (1857) 3 K. & J. 382 268 Hack v. London Provident Building Society (1883) 23 Ch. Div. 103; 52 L. J. Ch. 542; 48 L. T. 250; 31 W. R. 393 . . . 292 Hadleyi;. Clarke (1799) 8 T.E. 259 279 Haieh v. Brooks (1839) 10 A. &E. 309; 3 P. & D. 452 173 Haigh v. North Brierley Union (1858) E. B. & E. 873; 28 L. J. Q. B. 62; 5 Jur. N. S. 511 153. Haines v. Busk (1814) 5 Taunt. 521 330 Halford v. Cameron's Coalbrook, &c. Co. (1851) 16 Q. B. 442; 20 L. J. Q. B. 160; 15 Jur. 335 219 Halhead v. Young (1856) 6 E. & B. 312; 25 L. J. Q. B. 290; 27 L. T. O. S. 100; 4 W. R. 530 457 44 TABLE OF CASES. [The paging refers to the [*■] pages. ] PAGE Halifax Union Guardians v. Wheelwright (1875) L. E. 10 Ex. 183; 44 L. J. Ex. 121; 32 L. T. 802; 23 W. B. 704 414 Hall, Be (1856) 2 Jur. N. S. 1076 628 Hall v. Bainbridge (1840) 1 M. & Gr. 42; 1 Scott. N. E. 151 205 Hall v. Cazenove (1804) 4 East, 477; 1 Smith, 272 355 Hall v. Conder (1857) 2 C. B. N. S. 22; 26 L. J. C. P. 131, 258, 288; 3 Jur. N. S. 963 438 Hall v. Dyson (1852) 17 Q. B. 785; 21 L. J. Q. B. 224; 16 Jur. 270 .. . 240 Hall v. Hall (1868) L. E. 1 P. & D. 481; 37 L. J. P. 40; 17 L. T. 152; 16 W. E. 544 560 Hall v. Hall (1873) 14 Eq. 365; 8 Ch. 430; 42 L. J.Ch. 444; 28 L. T. 383; 21 W. E. 373 564 Hall v. Mayor of Swansea (1844) 5 Q. B. 526; D. & M. 476; 13 L. J. Q. B: 107; 8 Jur. 213 .... 155 Hall v. Old Talargoch Lead Mining Co. (1876) 3 Ch. D. 749; 45 L. J. Ch. 775; 34 L. T. 901 546 Hall v. Palmer (1844) 3 Ha. 532 263 Hall v. Palmer (1844) 13 L. J. Ch. 352; 8 Jur. 459 48 Hallu. Warren (1804) 9 Ves 605 87 Hall v. Wright (1858) E. B. & E. 746; 29 L. J. Q. B. 43; 6 Jur. N. S. 193; 8 W. E. 180 308, 374, 376, 378 Hallows v. Pernie (18681 3 Ch. 467; 18 L. T. 340; 16 W. E. 873 524 Halsey v. Grant (1806) 13 Ves. 73 < 497' Hamilton v. Grainger (1859) 5 H. & N. 40; 5 Jur. N". S. 1108 256 Hamilton v. Hector (1871) 6 Ch. 701; 13 Eq. 511; 40 L. J. Ch. 692; 19 W. E. 990 305 Hamilton v. Watson (1845) 13 CI. & Fin. 109 493, 494 Hamlin v. Great Northern Ey. Co. (1856) 1 H. & N. 408; 26 L. J. Ex. 20; 2 Jur. N. S. 1122 15 Hammersly v. Baron de Biel (1845) 3 Beav. 469; 12 CI. & Pin. 45 . . 310, 692 693, 694, 695 Hampden v. Walsh (1876) 1 Q. B. D. 189; 45 L. J. Q. B. 238; 33 L. T. 852; 24 W. E. 607 ; . . 335 Hanauer v. Doane (1870) 12 Wallace (Supt. Ct. U. S.) 342 ... . 281, 325 Hancock v. Peaty (1867) L. E. 1 P. & D. 335; 36 L. J. Mat. 57 87 Hanington v. Du Chastel (1781) 2 Swanst. 159, n. ; 1 Bro. C. C. 124; 2 Dick. 581; 3Woodd. 459, n 286 Hanley v. Pearson (1879) 13 Ch. D. 545; 41 L. T. 673 • . . 476 Harben v. Phillips (1882-3) 23 Ch. Div. 14; 48 L. T. 334; 31 W. E. 173 . 664 Harding, In the Goods of (1872) L. E. 2 P. & D. 394; 26 L. T. 668; 20 W. E. 615 80 Hardman b. Booth (1863) 1 H. & C. 803; 32 L. J. Ex. 105; 7 L. T. 738; 9 Jur. N. S. 81 423, 545 Hardy v. Metropolitan Land and Finance Co. (1872) 7 Ch. 427; 41 L. J. Ch. 257; 26 L. T. 407; 20 W. E. 425 .• . 400 Hare's Case (1869) 4 Ch. 503; 17 W. E. 628; 13 Sol. J. 768 433, 539 Harman's Case (1875) 1 Ch. Div. 326; 45 L. J. Ch. 332; 33 L. T. 760 . . 194 Harman v. Eeeve (1856) 18 C. B. 587; 25 L. J. C. P. 257 605 Harms v. Parsons (1862) 32 Beav. 32S; 32 L. J. Ch. 247; 7 L. T.815;9 Jur. N. S. 145; 11 W. E. 250 317 Harrington v. Long (1833-4) 2 My. & K. 590 , . . . . 295, 299 Harris v. G. W. Ey. Co. (1876) 1 Q. B. D. 515; 45 L. J. Q. B. 729; 34 L. T. 647; 25 W. E. 63 47 Harris v. Nickerson (1873) L. E. 8 Q. B. 286; 42 L. J. Q. B. 171; 28 L. T. 410; 21 W. E. 635 14, 17, 19 Harris v. Pepperell (1867) 5 Eq. 1; 17 L. T. 191; 16 W. E. 68; 12 Sol. J. 175 . : 430, 477 Harris v. Quine (1869) L. E. 4 Q. B. 653; 38 L. J. Q. B. 331; 20 L. T. 947 603 TABLE OF CASES. 45 [The paging refers to the [*] pages.] Harris v. Tremenheere (1808) 15 Ves. 34 P 570 Harris v. Wall (1847) 1 Ex. 122; 16 L. J. Ex. 270 ', '. '. '. ', 58 Harrison v. Good (1871) 11 Ex. 338; 40 L. J. Ch. 294; 24 L. T. 263; 19W. R. 346 . . . . ■ 226 229 Harrison v. Guest (1855) 6 D. M. G. 424; 8 H. L. C 481 574' 576 Harrison v. Seymour (1866) L. R. 1 C. P. 518; 35 L. J. C. P. 264; 12 Jur' N. S. 924 ' 042 Hartu Eastern Union Ry. Co. (1852) 7 Ex. 246; 8 'jb'. lie'; 21L. J. Ex 97;! 22 ib. 20 e57 Hart v. Hart" (1881) 18 Ch. D. 670; 50 L. J. Ch.'697;' 45 L.' T. 13;' 30 W. E.8 44 Hart v. Miles (1858) 4 C. B. N. S. 371; 27 L. J. C. P. 218. .'.'."' ' 173 Hart v. Mills (1846) 15 M. & W. 85; 15 L. J. Ess 200 ' 434 Hart v. Swaine (1877) 7 Ch. D. 42; 47 L. J. Ch. 5; 37 L. T. 376; 26 W.R. 30 506 Harter v. Harter (1873) L. E. 3 P. & D. 11; 42 L. J. P. 1; 27 L. T. 858: 21 W. E. 341 ' 691 Hartley v. Cummings (1847) 5 C. B. 247; 2 C. & k. 433; 17 L. J. C. P. 84; 19 Jur. 57 319 Hartley v. Ponsonby (1857) 7 E. & B. 872; 26 L. J.Q. B. 322; 8 Jur." N. S. 746 177 Hartley v. Rice (1808) 10 East, 22 307 Harvey v. Farnie (1882) 8 App. Ca. 43; 52 L. J. P. 42; 48 L. T. 279; 31 W. E. 438 408 Harvey v. Mount (1845) 8 Beav. 439 570 Harvy v. Gibbons (1674) 2 Lev. 161 357 Haslam v. Sherwood (1834) 10 Bing. 540: 4 M. & Scott, 434 176 Hastelow v. Jackson (1828) 8 B. & C. 221; 2 M. & E. 209 334, 336 Hatch v. Hatch (1804) 9 Ves. 292 559, 568 Hawksworth v. Hawksworth (1871) 6 Ch. 539; 40 L. J. Ch. 534; 25 L. T. 115; 19 W.R. 735 304 Hay's Case (1875) 10 Ch. 593; 44 L. J. Ch. 721; 33 L. T. 466 245 Haycraft v. Creasy (1801) 2 East,. 92 523 Haygarth v. Wearing (1871) 12 Eq. 320; 40 L. J. Ch. 577; 24 L. T. 825; 20 W. R. 11 503, 506, l 590 Haywood v. Brunswick Building Society (1881) 8 Q. B. Div. 403; 51 L. J. Q. B. 73; 45 L. T. 699; 30 W. E. 299; 46 J. P. 356 ... 226 Haywood v. Cope (1858) 25 Beav. 140; 27 L. J. Ch. 468; 4 Jur. N. S. 227 578 Heartley v. Nicholson (1874) 19 Eq. 233; 44 L. J. Ch. 277; 32 L. T. 822; 23 W. E. 374 .' 185 Heath v. Crealock'(1874)'l6 Ch.' 22;'44 L. J.'ch. 'l57;' 31 L. T." 350; 23 W. E. 95 .' 398 Heathcote v. Paignon (1787) 2 Bro. C C. 166 578 Hebb'sCase (1867) 4 Eq. 9; 16 L. T. 308; 15 W. E. 754 641 Heilbutt v. Hickson (1872) L. R. 7 C. P. 438; 41 L. J. C. P. 228; 27 L. T. 336; 20 W. R. 1035 449, 588 "Helen," The (1875) L. R. 1 Ad. & Ecc. 1 ; 34 L. J. Adm. 2 ; 13 L. T. 305; 10 Jur. N. S. 1025; 14 W. R. 136 281 Helps v. Clayton (1864) 17 C. B. N. S. 553 ; 34 L. J. C. P. 1 ; 11 L. T. 466; 10 Jur. N. S. 1148; 13 W. R. 161 71 Hamingway v. Hamilton (1838) 4 M. & W. 115 512 Henderson v. Australian Royal Mail, &c. Co. (1855) 5 E. & B. 409 ; 24 L. J. Q. B. 322; 1 Jur. N. S. 830 150, 151 Henderson v. Stevenson (1875) L. R. 2 Sc. & D. 470; 32 L. T. 709 ... 46 Henkel v. Pape (1870) L. R. 6 Ex. 7; 40 L. J. Ex. 15 434 Henkle v. Royal Exch. Assce. Co. (1749) 1 Ves. sen. 318 473 Hereford and S. Wales Waggon and Engineering Co. Be (1876) 2 Ch. Div. 621; 45 L. J. Ch. 461; 35 L. T. 40; 24 W. R. 953 529 Hesse v. Stevenson (1803) 3 B. & P. 565 .454 46 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Hey wood v. Mallalieu (1883) 25 Ch. D. 357; 53. L. J. Ch. 492; 49 L. T. 658; 32 W. R. 538 504, 507 Heyworth v. Hutchinson (1867) L. R. 2 Q. B. 447; 36 L. J. Q. B. 270 437, 488 Hickman v. Haynes (1875) L. R. 10 C. P. 598; 44 L. J. C. P. 358; 32 L. T. 873; 23 W. R. 871 639 Higgins v. Pitt (1849) 4 Ex. 312; 18 L. J. Ex. 488 239 Higgins v. Samels (1862) 2 J. & H. 460; 7 L. T. 240 516, 527 Higgins v. Scott (1831) 2 B. & Ad. 413 600 Higgins v. Senior (1841) 8 M. & W. 834 98 Higginson v. Clowes (1808) 15 Ves. 516 ". .432,468 Higginson v. Simpson (1877) 2 C. P. D. 76; 46 L. J. C. P. 192'; 36 L. T. 17; 25 W. R. 303 334 Higgs v. Northern Assam 'Bea Co. (1869) L. R. 4 Ex. 387; 38 L. J. Ex. 233; 21 L. T. 336; 17 W. R. 1125 215 Hill v. Boyle (1867) 4 Eq. 260 299 Hill v. Gray (1816) 1 Stark. 434 514 Hill v. Lane (1870) 11 Eq. 215; 40 L. J. Ch. 41; 23 L. T. 547; 19 W. R. 194 516 Hill ». Tupper Q863) 2 H. & C. 121; 32 L. J. Ex. 217; 8 L. T. 792; 9 Jnr. N S 725 227 229 Hill's. Walker (1858) 4 K. &J.166' .' .' .' .' .' .' .' .' ' .' .' ' .' .' .' . . ' 600 Hill v. Wilson (1873) 8 Ch. 888; 42 L. J. Ch, 817; 29 L. T. 238; 21 W. R. 757 419, 457 Hilliard v. Eifie (1874) L. R. 7 H. L. 39 . . . ; . . 505, 551 Hills v. Rowland (1853) 4 D. M. G. 430 474 Hills v. Snell. (1870) 104 Mass. 173 . , 420 Hills v. Sughrue (1846) 15 M. & W. 253 351,360,373 Hilton v. Eckersley (1855-6) 6 E. & B. 47, 66; 24 L. J. Q. B. 353; 25 ib 199; 2 Jur. N. S. 587 310 Hindley v. Marquis of Westmeath (1827) 6 B. & C. 200; 9 L\ & R. 351 . 268 Hindson v. Weatherill (1854) 5 D. M. G. 301; 23 L. T. O. S. 149; 18 Jur. 499; 2 W. R. 507 \ . 560 Hipwell v. Knight (1835) 1 Y. & C. Ex. 401 464 Hirschfield v. London, Brighton and South Coast Ry. Co. (1876) 2 Q. B. D. 1; 46 L. J. Q. B. 1; 35 L. T. 473 522 Hirst v. Tolson (1850) 2 Mac. & G. 134; 2 H & T. 359; 19 L. J. Ch. 441; 14 Jur. 559 379 Hislop v. Leckie (1881) 6 App. Ca. 560 . .230 Hitchcock v. Coker (1837) 6 Ad. & E. 438; 1N.&P. 796; 2 H. & W. 464 315 Hitchcock v. Giddings (1817) 4 Pri. (Ex. in Eq.) 135 443 Hoare i;. Bremridge (1872) 8 Ch. 22; 42 L.. J. Ch. 1; 27 L. T. 593; 21 W. R. 43 552 Hobart v. Butler (1859) 9 Ir. C. L. 157 626, 627. 628 Hochster i>. De la Tour (1853) 2E.&B. 678; 22 L. J. Q. B. 455; 17 Jur. 972 24 Hodgson v. Earl of Powis (1851) 1 D. M. G. 6 ". . . 656 Hodgson v. Williamson (1880) 15 Ch. D. 87; 42 L. T. 676; 28 W. R. 944; 24 Sol. J. 817 652 Hogins v. Gordon (1842) 3 Q. B. 466; 2 G. & D. 656; 11 L. J. Q. B. 286; 6 Jur. 895 626, 627 Hoghton v. Hoghton (1852) 15 Beav. 278 413,561,563,569 Hole v. Bradbury (1879) 12 Ch. D. 886 426 Holland v. Hall (1817) 1 B. & Aid. 53 331 Hollius v. Fowler (1874-5) L. R. 7 H. L. 757; 33 L. T. 73 ... 395, 423, 545 Holman v. Johnson (1775) 1 Cowp. 341 281, 282, 332 Holman v. Loynes (1854) 4 D. M. G. 270; 23 L. J. Ch. 599; 22 L. T. O. S. 296; 2 W. R. 205 559, 565, 568, 594 Holme v. Brunskill (1877) 3 Q. B. Div. 495 241 Holme v. Guppy (1838) 3 M. & W. 387; 1 Jur. 825 381 Holmes v. Blogg (1817) 8 Taunt. 35; 1 Moore, 466; 2 ib. 552 60, 63 TABLE OF CASES. 47 [The paging refers to the [*] pages.] PAGE Holmes v. Jaques (1866) L. R. 1 Q. B. 376; 35 L. J. Q. B. 130: 14 L. T. 252; 12 Jur. N. S. 486 206 Homersham v. Wolverhampton Waterworks Co. (1851) 6 Ex. 137; 6 Railw. Ca. 790; 20 L. J. Ex. 193 150 Honeyman v. Marryat (1857) 6 H. L. C. 112; 26 L. J. Ch. 619: 4 Jur. N. S. 17 39 Hoole v. G. W. By. Co. (1867) 3 Ch. 262; 17 L. T. 453; 18 ib. 453; 16 W. R. 260: 12 Sol. J. 764 ... : 663 Hope v. Hope (1857) 8 D. M. G. 731; 26 L. .T. Ch. 417; 3 Jur. N. S. 454 266. 290, 344, 607 Hopkins v. Logan (1839) 5 M. & W. 241; 7 D. P. C. 360 601 Hopkins v. Presoott (1847) 4 C. B. 578; 16 L. J. C. P. 259; 11 Jur. 562 286 Hopkinson v. Foster (1&74) 19 Eq. 74; 23 W. R. 301 . . . 651 Home's Case (1400) M. 2 H. 4, 6, pi, 25 22E Horrocks v. Eigby (1878) 9 Ch. D. 180; 47 L. J. Ch. 800; 38 L. T. 782; 26 W. R. 714 500 Horsfall v. Fauntleroy (1830) 10 B. & C. 755 102 Horsfall v. Thomas (1862) 1 H. & C. 90; 31 L. J. Ex. 322; 8 Jur. N. S. 721 527 Hort's Case (1875) 1 Ch. Div. 307; 45 L. J. Ch. 321; 33 L. T. 766 . 194, 195 Hotson v. Browne (1860) 9 C. B. ST. S. 442; 30 L. J. C. P. 106 457 Hough »\ Manzanos (1879) 4 Ex. D. 104; 48 L. J. Ex. 398; 27 W. E. 536 99 Houldsworth v. City of Glasgow Bank (1880) 5 App. Ca. 317; 42 L. T. 194; 28 W. R. 67.7 534 Houldsworth «. Evans (1868) L. R. 3 H. L. 263; 19 L. T. 211 668 Household Fire Insurance Co. v. Grant (1879) 4 Ex. Div. 216; 48 L. J. Ex. 577; 41 L. T. 289; 27 W. R. 858 35, 638 Howard v. Brownhill (1853) 2 C. L. R. 125; 23 L. J. Q. B. 23 . 633 Howard v. Harris (1683) 1 Vern. 190 .... : 466 Howden v. Haigh (1840) 11 A. & E. 1033; 3 P. & D. 661 . . . 239 Howden (Lord) t). Simpson (1839) 10 A. &E. 793; 9 CI. & Fin. 61 . . . 329 Howell v. Coupland (1876) L. R. 9 Q. B. 462; 1 Q. B. Div. 258; 46 L. J. Q. B. 147; 33 L. T. 832; 24 W. R. 470 370 Howell v. George (1815) 1 Mad. 1 577, 579 Howley v. Knight (1849) 14 Q. B. 240; 19 L. J. Q. B. 3; 14 Jur. 665 . . 113 Huber v. Steiner (1835) 2 Bing. N. C. 202; 2 Scott, 304; 1 Hodges. 206; 2 D. P. C. 781 603, 604 Hughes v. Done (1841) 4 P. & D. 708; 1 Q. B. 294; 10 L. J. Q. B. 65; 5 Jur. 837 630 Hughes v. Humphreys (1854) 3 E. & B. 954; 23 L. J. Q. B. 356; 1 Jur. N. S. 42 686 Hughes v. Jones (1861) 3 D. F. J. 307; 31 L. J. Ch. 83; 5 L. T. 408; 8 Jur. N. S. 399; 10 W. R. 139 497, 502 Huguenin v. Basely (1807) 2 Wh. & T. L. C. 547 ; 14 Ves. 273 561, 570, 571, 594 Hulme v. Coles (1827) 2 Sim. 12 243 Hulme v. Tenant ('1778) 1 Wh. & T. L. C. 521 ; 1 Bro. C. C. 16 . . . 646 Hulse, Ex parte (1873) 8 Ch. 1022; 43 L. J. Ch. 261 465 Humble v. Hunter (1848) 12 Q. B. 310; 17 L. J. Q. B. 350; 12 Jur. 121 100, 422 Hume v. Pocock (1866) 1 Ch. 379; 35 L. J. Ch. 731 ; 14 L. T. 386; 12 Jtr. N. S. 445; 14 W. R. 681 526 Humfrey v. Dale (1857) 7 E. & B. 266 ; E. B. &.E. 1004 ; 26 L. J. Q. B. 137 99 Humphreys v. Green (1882) 10 Q. B. Div. 148; 52 L. J. Q. B. 140; 48 L. T. 60; 47 J. P. 244 611 Hunt, In the goods of (1875) L. R. 3 P. & D. 250; 44 L. J. P. 43; 33 L. T. 321; 23 W. R. 553 415 Hunt v. Hunt (1861-2) 4 D. F. J. 221; 31 L. J. Ch. 161; 5 L. T. 778; 8 Jur. N. S. 85; 10 W. E. 215 261, 264, 265, 266 48 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Hunt v. Rousmaniere's Admrs. (1828) 1 Peters, 1 407, 474 Hunt v. Silk (1804) 5 East, 449; 2 Smith, 15 543 Hunt v. Wimbledon Local Board (1878) 4 C. P. Div. 48; 48 L. J. C. P. 207; ' 39 L. T. 35; 27 W. R. 123 131. 152, 155, 156 Hunters Atkins (1832) 3 My. & K. 113 560,561,562,594 Hunter v. Daniel (1845) 4 Ha. 420 295, 299 Hunter v. Walters (1871) 7 Ch. 75; 41 L. J. Ch. 175; 25 L. T. 765; 20 W. R. 418 414, 416, 417, 423 Hussey v. Horne-Payne (1879) 4 App. Ca. 311; 48 L. J. Ch. 846; 41 L. T. 1; 27 W. R. 585 39 Hutchesonn. Eaton (1884) 13 Q. B. Div. 861 99 Hutchinson v. Tdttaam (1873) L. R. 8 C. P. 482; 42 L. J. C. P. 260; 29 L. T. 103; 22 "W. R. 18-. 95,99,110 Hutley v. Hutley (1873) L. R. 8 Q. B. 112; 42 L. J. Q. B. 52: 28 L. T. 63; 21 W. R. 479 295, 303 Hutton v. Bulloch (1873) L. R. 8 Q. B. 331; 9 ib. 572; 30 L. T. 648; 22 W. R. 956 98 Hybart v. Parker (1858) 4 C. B. N. S. 209; 27 L. J. C. P. 120; 4 Jur. N. S. 265 205 Hyde v. Hyde and Woodmansee (1866) L. R. 1 P. & D. .130; 35 L. J. Mat. 57; 14 L. T. 188; 12 Jur. N. S. 414; 14 W. R. 517 341 Ind's Case (1872) 7 Ch. 485; 41 L. J. Ch. 564; 26 L. T. 487; 20 W. R..430 433 Inman v. Inman (1873) 15 Eq. 260; 21 W. R. 433 78 Inns of Court Hotel Co. Be (1868) 6 Eq. 82; 37 L. J. Ch 692 661 Ionides v. Pacific Insurance Co. (1871) L. R. 6 Q. B. 674; 7 ib. 517; 41 L. J. Q. B. 33, 190; 26 L. T. 738; 21 W. R. 22 . . . . 617 Ionides v. Pender (1874) L. R. 9 Q. B. 531; 43 L. J. Q. B. 227; 30 L. T. 547; 22 W. R. 884 489, 490, 528 Ipswich Tailors' Case (1615) 11 Co. Rep. 53 a 313 Irnham, Lord, v. Child (1781) 1 Bro. C. C. 92 . 407 Irvine v. Watson (1880) 5 Q. B. Div. 414 ; 49 L. J. Q. B. 531 ; 42 L. T~. 810 102 Isberg v. Bowden (1853) 8 Ex. 852 ; 1. C. L. R. 722 ; 22 L. J. Ex. 322 . . 101 Ivensu. Butler (1857) 7 E. & B. 159 : 26 L. J. Q..B. 145 : 3 Jur. N. S. 334 650 Jackson, Ex ■parte (1880) 14 Ch. Div. 725; 43 L. T. 272; 29 W. R. 253 . . 255 Jackson v. Duchaire (1790) 3 T. R. 551 . 238 Jackson v. Turquand (1869) L. R. 4 H. L. 305; 59 L. J. Ch. 11 39 Jackson v. Union Marine Insurance Co. (1874) L. R. 10 C. P. 125; 44 L. J. C. P. 27; 31 L. t. 789; 23 W. R. 169 374 Jacobs v. Credit Lyonnais (1884) 12 Q. B. Div. 589; 53 L. J. Q. B. 156 . 339, 346, 362 Jacobs v. Seward (1872) L. R. 5 H. L. 464; 41 L. J. C. P. 221; 27 L. T. 185 400 James, Ex parte (1874) 9 Ch. 609; 43 L. J. Bk.'107; 30 L. T. 773: 22 W. R. 937 410 James v. Isaacs (1852) 12 C. B. 791; 22 L. J. C. P. 73; 17 Jur. 69 . . . 424 Jarrattu Aldam (1870) 9 Eq. 463; 39 L. J. Ch. 349; 21 L. T. 192; 18 W. R. 511 596 Jay and Amphlett, Be (1862) 1 H. & C. 637; 32 L. J. Ex. 176; 7 L. T. 362; 11 W. R. 75 650 Jee v. Thurlow (1824) 2 B. & C. 547; 4 D. & R. li 267 Jefferys v. Gurr (1831) 2 B. & Ad. 833 155 Jenkins v. Jones (1882) 9Q. B. Div. 128; 51 L. J. Q. B. 438; 46 L. T. 795; 30 W. R. 668 301 Jenkins v. Morris (1880) 14 Ch. Div. 674; 42 L. T. 817 94 Jennings v. Broughton (1853-4) 5 D. M. 6. 126; 17 Beav. 234; 22 L. J. Ch. 584; 17 Jur. 905 524 Jennings v. Johnson (1873) L. R. 8 C. P. 425 297, 685 ;\ TABLE OP CASES. 49 [The paging refers to the [*] pages.] PAGE Jennings «. Rundall (1799) 8 T. R. 335 74 Jeryis v. Berridge (1873) 8 Ch. 351; 42 L. J. Ch. 518; 28 L.'T. 481; 21 "W. R. 244 458 Jervis v. Tomkinson (1856) 1 H. & N. 195; 26 L. J. Ex. 41 . r 373 Jewitt v. Eckhardt (1878) 8 Ch. D. 404; 26 W. R. 415 164 Johnasson v. Bonhote (1876) 2 Ch. Div. 298; 45 L. J. Ch. 651; 34 L. T. 745; 24 W. R. 619 606 Johnson v. Gallagher (1861) 3 D. F. J. 494; 30 L. J. Ch. 298; 4 L. T. 72; 7 Jur. N. S. 273; 9 W. R. 506 . . . 648, 650, 652 Jonnson v. Lansley (1852) 12 C. B. 468 .... 334 Johnson v. Pie (1665) Sid. 258: 1 Lev. 169; 1 Keb. 913 74 Johnson v. Raylton (1881) 7 Q. B. Div. 438; 50 L. J. Q. B. 753; 45 L. T. 374; 30 W. R. 350 422 Joliffe v. Baker (1883) 11 Q. B. Div. 255; 52 L. J. Q. B. 609; 48 L. T. 966; 32 W. R. 59; 47 J. P. 678 480, 505 Jones, Ex parte (1879) 12 Ch. Div. 484; 48 L. J. Bk. 109; 40 L. T. 790; 28 W. R. 287; 44 J. P. 55 649 Jones, Ex parte (1881)' 18 Ch. Div. 109; 50 L. J. Ch. 673; 44 L. T. 587; 29 "W. R. 747; 25 Sol. J. 653 77 Jones, Be (1869) 9 Eq. 63; 39 L. J. Ch. 83; 21 I,. T. 482; 18 \V. E. 159 . 621 Jones v. Broadhurst (1850) 9 C. B. 173 218, 424 Jones v. Clifford (1876) 3 Ch. D. 779; 45 L. J. Ch. 809; 35 L. T. 937; 24 "W. E. 979 444 Jones v. Gibbons (1804) 9 Ves. 407 225 Jones v. Giles (1854) 10 Ex. 119; 23 L. J. Ex. 292; 22 L. T. O. S. 103; 23 ib. 255; 2 W. R. 623 686 Jones v. Harris (1804) 9 Ves. 486 648,652 Jones ». Holm (1867) L. R. 2 Ex. 335; 16 L. T. 794 374 Jones v. Jones (1837-8) 8 Sim. 633 210 Jones v. Jones (1840)6 M. &W. 84 610 Jones v. Jones (1876) 1 Q. B. D. 279 309 Jones v. Just (1868) L. R. 3 Q. B. 197; 9 B. & S. 141; 87 L. J. Q. B. 89; 18 L. T. 208; 16 W. R. 643 487 Jones v. Lane (1838-9) 3 Y. & C. Ex. in Eq. 281 218 Jones v. Lees (1856) 1 H. &N. 189; 26 L. J. Ex. 9; 2 Jur. N? S. 645 . . 316 Jones v. North (1875) 19 Eq. 426; 44 L. J. Ch. 388; 32 L. T. 149; 23 W. R. 468 : 311 348 Jones v. Ricketts (1862) 31 Beav. 130; 31 L. J. Ch. 753; 10 W. R. 576 . .' 583, Jones v. Rimmer (1880) 14 Ch. Div. 588; 49 L. J. Ch. 775; 43 L. T. Ill; 29 W. R. 165 503' Jones v. Robinson (1847) 1 Ex. 454; 17 L. J. Ex. 36; 11 Jur. 933 .. . 204 Jones v. St. John's College, Oxford (1870) L. R. 6 Q. B. 115; 40 L. J. Q. B. 80; 23 L. T. 803; 19 W. R. 276 361 Jones v. Victoria Graving Dock Co. (1877) 2 Q. B. Div. 314; 46 L. J. Q. B. 219; 36 L. T. 144; 25 W. R. 348 163 Jones v. Waite (1842) 1 Bing. N. C. 656; 5 ib. 341; 9 CI. & F. 101; 4 M. &Gr. 1104; 5 Scott, N. R. 951; 6 Jur. 653 173,179,267 Jorden v. Money (1854) 5 H. L. C. 185; 23 L. J. Ch. 865 . . 612, 693, 696, 697 Josephs v. Pebr'er (1825) 3 B. & C. 639; 1 C. & P. 341, 507; 5 D. & R. 542 222 Joyce v. Swann (1864) 17 C. B. N. S. 84 40 Kay v. Duchess de Pienne (1811) 3 Camp. 123 82 Kay v. Smith (1856) 21 Beav. 522 570 Kearon v. Pearson (1861) 7H.&N. 386; 31 L. J. Ex. 1; 10 W. R. 12 . . 360 Kearsley*. Cole (1846) 16 M. & W. 128, 16 L. J. Ex. 115 242 Keates v. Earl Cadogan (1851) 10 C. B. 591; 20 L. J. C. P. 76; 15 Jur. 428 507, 514 4 PRINCIPLES OP CONTRACT. 30 TABLE OF CASES. [The paging refers to the [*] pages.] . PAGE Keates v. Lyon (1869) 4 Ch. 218; 38 L. J. Ch. 357; 20 L. T. 255; 17 W. R. 338 .' 226, 229 Keeeh v. Sandford (1726) 1 Wh. & T. L. C. 46; Sel. Ca. in Ch. 61 . . . 245 Keenan v. Handley (1864) 2 D. J. S. 283; 10 L. T. 800; 10 Jur. N. $■ 906; 12 W. E. 1021 182 Keir v. Leeman (1844) 6 Q. B. 308; 9 ij. 371; 13 L. J. Q. B. 259; 15 ik 360; 8 Jur. 824; 10 ib. 742 288 Kekewich v. Manning (1851) 1 D. M. G. 176 184 Kelly v. Solari (1841) 9 M. & W. 54; 11 L. J. Ex. 10 405 Kelner n. Baxter (1866) L. R. 2 C. P. 174; 36 L. J. C. P. 94; 15 L. T. 313; 12 Jur. N. S. 1016; 15 W. R. 278 107,108 Keinpson v. Ashbee (1874) 10 Ch. 15; 44 L. J. Ch. 195; 31 L. T. 525; 23 W. R. 38 595, 596 Kennedy v. Broun (1863) 13 C. B. N. S. 677; 32 L. J. C. P. 137; 9 Jur. N. S. 119; 7 L. T. 626; 11 W. R. 284 626, 629 Kennedy w. Green (1834) 3 My. &K. 699 416 Kennedy v. Panama, &c. Mail Co. (1867) L. R. 2 Q. B. 580; 8 B. & S. 571; 36 L. J. Q. B. 260; 17 L. T. 62; 15 W. R. 1039 . . . . 427, 436, 437. 487 Kent v. Freehold Land Co. (1868) 3 Ch. 493; 16 W. 11. 990 .... . 433, 539 Keppell v. Bailey (1834) 2 My. & K. 517 229 Kettles. Eliot (1614) Rolle, Abr. 1, 731 k; Cro. Jao. 326; Brownlow, 120; , 2 Bulst. 69 • 64 Kibble, Ex parte (1875) 10 Ch. 373; 44 L. J. Bk. 03; 32 L. T. 138; 23 W. R. 433 SI Kidderminster, Mayor of, v. Hard-wick (1873) L. R. 9 Ex. 13; 43 L. J. Ex. 9; 29 L. T. 612; 22 W. R. 160 147,152,154 Kien v. Stukeley (1722) 1 Bro. P. C. 191; Gilb. 155 579 King t>. Hamlet (1835) 2 My. & K. 456; 3 CI. & F. 218 . '. . . . 586 Kingsfordi;. Merry (1856) 1 H. & N. 503; 11 Ex. 577; 25 L. J. Ex. 166; 26 ib. 83; 3 Jur. N. S. 88 . . ' 420. 423, 546 Kintrea, Exparle (1869) 5 Ch. 95; 39 L. J. Ch. 193; 21 L. T. 688 . . 520, 528 Kirk v. Bromley Union (1846) 2 Phil]. 640 154 Kirwan v. Cullen (1854) 4 Ir. Ch. 322 . . 563 Kitchin v. Hawkins (1866) L. R. 2 C. P. 22; 15 L. T. 185; 12 Jur. N. S. 928; 15 W. R. 72 408 Knight v. Bowyer (1858) 2D. G. & J. 421; 27 L. J. Ch. 521; 4 Jur. N. S. 569 295 298 299 Knight V.Majoribanks' (1849) 2 Mae. & G. 10; 2 H. & T. 308 ' . ' . . ' 575 Knox v. Gye (1871-2) L. R. 5 H. L. 656; 42 L. J. Ch. 234 198, 598 Knyeu. Moore (1822)1 Sim. & St. 61 262 Kronheim v. Johnson (1877) 7 Ch. D. 60; 47 L. J. Ch. 132; 37 L. T. 751; 26 W. R. 142 .163 Lacey, Expntie (1802) 6 Ves. 625 244 Lach'lan v. Reynolds (1853) Kay, 52; 23 L. J. Ch. 8; 22 L. T. O. S. 211; 2 W. R. 49 503 Laidlaw r. Organ (1817) 2 Wheat. 178 514 Laingu. Reed (1869) 5 Ch. 4; 18 W. R. 76 661 Lakemanu Mountstephen (1874) L. R. 7 Q. B. 196; 7 H. L. 17; 43 L. J. Q. B. 188; 30 L. T. 437; 22 W. R. 617 . . . . v 158 Lamareu Dixon (1873) L. R. 6 H. L. 414; 43 L. J. Ch. 203; 22 W. R. 49 697, 698 Lamb's Case (1599) 5 Co. Rep. 23 b 357, 387 Lamb v. Brewster (1879) 4 Q. B. Div. 220, 607; 48 L. J. Q. B. 277, 421; 40 L. T. 457, 537: 27 W. R. 395, 478 . 684 Lampet's Case (1613) 10 Co. Rep. 48 a 206 TABLE OF CASES. 51 tThe paging refers to the ["] pages.] PAGE Lampleigli v. Broth-wait (1616) 1 Sm. L. C. 151; Hob. 105 12, 170 Lampiell »\ Billericay Union (1849) 3 Ex. 283; 18 L. J. Ex. 282 .... 152 Lane v. Horlock (1855) 5H. L. C. 580; 25 L. J. Cta. 253; 2 Jur. N. S. 289 584 Lassence v. Tierney (1849) 1 Mac. & G. 551 . . . 613 Laughter's Case (1595) 5 Co. Eep. 21 b 382, 387, 388 Laver v. Dennett (1883) 109 U. S. (2 D.avis) 90 477 Lavery r. Turley (1860) 6 H. & N. 239; 30 L. J. Ex. 49 610 Lawes t>. Purser (1856) 6 E. & B. 930; 26 L. J. Q. B. 25; 3 Jur. N. S. 182 173 Lawrence v. Smith (1822) Jac. 471 269 Laythoarp ». Bryant (1836) 2 Bing. N. C. 735 ; 3 Scott, 238; 2 Hodges, 25 605 Lazarus v. Cowie (1842) 3 Q. B. 459; 2 G. & D. 487 221 Lea v. Whitaker (1872) L. E. 8 C. P. 70; 27 L. T. 676; 21 W. E. 230 . . 467 Leach (Doe d.) v. Micklem (1805) 6 East, 486; 2 Smith, 499 452 Leach o.MulIett (1827) 3 Car. & P. 115 433 Leask v. Scott (1877) 2 Q. B. Div. 376; 46 L. J. Q. B. 576; 36 L. T. 784; 25 W. E. 654 523 Leather Cloth Co. v. Hieronimus (1875) L. E. 10 Q. B. 140; 44 L. J. Q. B. 54; 32 L. T. 307; 23 W. E. 593 163, 639 Leather Cloth Co. v. Lorsont (1869) 9Eq. 345; 39 L. J. Ch. 86; 21 L. T. 661; 18 W. E. 572 . 312,315,316, 317 Lebeau v. General Steam Navigation Co. (1872) L; E. 8 C. P. 88; 42 L. J. C. P. 1; 27 L. T. 447; 21 W. E. 146 492 Lebel v. Tucker (1867) L. E. 3 Q. B. 77; 37 L. J. Q. B. 46; 17 L. T. 244 218 Lee, ExpaHt (1806) 13 Ves. 64 278 Lee v. Bude, &c. Ey. Co. (1871) L. E. 6 C. P. 576; 40 L. J. C. P. 285; 24 L. T. 827; 19 W. E. 954 , 252 Lee v. Gaskell (1876) 1 Q. B. D. 700; 45 L. J. Q. B. 540; 34 L. T. 759; 24 W. E. 824 160 Lee v. Jones (1863) 14 C. B. N. S. 386; 17 ib. 482; 34 L. J. C. P. 131; 11 Jur. N. S. 81 ; 13 W. E. 318 493,494,514 Leeds v. Cheetham (1827) 1 Sim 146 363, 364 Leggei). Croker (1811)1 Ball & B. 506 505 Leggotts. G. N. E. Co. (1876) 1 Q. B. D. 599: 45 L. J. Q. B. 557; 35 L. T. 334; 24 W. E. 784 . 189 Leicester v. Eose (1803) 4 East, 372; 1 Smith, 41 239 Leifchild's Case (1865) 1 Eq. 231; 13 L. T. 267; 11 Jur. N. S. 941; 14 W. E. 22 184 Leinan v. Fletcher (1873) L. E. 8 Q. B. 319; 42 L. J. Q. B. 214; 28 L. T. 499; 21 W. E. 738 623 Leman v. Houseley (1874) L. E. 10 Q. B. 66; 44 L. J. Q. B. 22; 31 L. T. 833; 23 W. E. 235 .... 256, 624, 625 Lempriere ». Lange (1879) 12 Ch. D. 675; 41 L. T. 378; 27 W. E. 879 . . 76 Lenuavd v. Eobinson (1855) 5 E. & B. 125; 24 L. J. Q. B. 275; 1 Jur. N. S. 853 S9 Lennon v. Napper (1802) 2 Sch. & Lef. 682 463, 465 Leroux v. Brown (1852) 12 C. B. 801; 22 L. J. C. P. 1; 16 Jur. 1021 605, 606, 607, 625 Leslie v. Fitzpatriek (1877) 3 Q. B. D. 229; 47 L. J. M. C. 22; 37 L. T. 446 - . 55, 66 Letchford,' Be (1876) 2 Ch. D. 719; 45 L. J. Ch. 530; 35 L. T. 46G . . . . 73 Levy r. Green (1857) 8 E. & B. 575; 1 E. & E. 969; 27 L. J. Q. B. Ill; 28 ib. 319; 5 Jur. N. S/1245; 7 W. E. 486 434 Lewis v. Brass (1877) 3 Q. B. Div. 667: 37 L. T. 738; 26 W. E. 152 .. . 42 Lewis v. Bright (1855) 4 E. & B. 917; 24 L. J. Q. B. 191 ; 1 Jur. N. S. 757 258 Lewis v. Browning (1880) 130 Mass. 173 . 37 Lewis v. Jones (1825) 4 B. & C. 506; 6 D. & E. 567 521 Lewis v. Nicholson (1852) 18 Q. B. 503; 21 L. J. Q. B. 311; 16 Jur. 1041 106 Leyland v. Illingworth (1860) 2 D. F. J. 248; 2 L. T. 587; 8 W. E. 695 431, 497 52 TABLE OP CASES. [The paging refers to the [*] pages.] PAGE Leyland v. Stewart (1876) 4 Ch. D. 419; 46 L. J. Ch. 103; 25 "W. E. 225 . 164 Lichfield v. Baker (1850) 13 Beav. 447 410 Life Association of Scotland v. Siddal (1861) 3 D. F. J. 58 548 Lightfoot v. Heron (1839) 3 Y. &, C. Ex. 586 91 Limpusw. London General Omnibus Co. (1862) 1 H. & C. 526; 32 L. J. Ex. 34; 7 L. T. 641; 9 Jur. N. S. 333.; 11 W. E. 149 396 Lincoln College Case (1595) 3 Co. Eep. 58 a 53 Lindenau*. Desborough (1828) 8 B. & C. 586 • 490- Lindo v. Lindo (1839) 1 Beav. 496 461 Lindsay Petroleum Co. v. Hufd (1874) L. E. 5 P. C. 221; 22 W. E. 492 523, 549 Lindus v. Bradwell (1848) 5 C. B. 583; 17 L. J. C. P. 123; 12 Jur. 230 . . 99 Lishman v. Northern Maritime Insurance Co. (1875) L. E. 8 C. P. 216; 10 ib. 179; 44 L. J. C. P. 185; 32 L. T. 170 617 Lister v. Hodgson (1867) 4 Eq. 30; 15 W. E. 547 477 Lister v. Pickford (1865) 34 Beav. 576 401 -Litt v. Cowley (1816) 7 Taunt. 169', 2 Marsh. 457; Holt, 338 401 Livingston v. Ealli (1855) 5 E. & B. 132; 24 L. J. Q. B. 269; 25 L. T. 80; 1 Jur. N". S. 594; 3 W. E. 488 291 Llanelly Ey. and Dock Co. v. L. & N. W. Ey. Co. (1873) 8 Ch. 942; 21 W. E. 889 184, 292 Lloyd v. Attwood (1858-9) 3 De G. & J. 614; 29 L. J. Ch. 97; 5 Jur. N. S. 1322 548 Lloyd v. Banks (1868) 3 Ch. 488; 16 W. E. 988 210 Lloyd v. Clark (1843) 6 Beav. 309 570 Lloyd v. Crispe (1813) 5 Taunt. 249 357 Lloyd v. Guibert (1865) L. E. 1 Q. B. 115; 6 B. & S. 100; 35 L. J. Q. B. 74; 13 L. T. 602 339 Load v. Green (1846) 15 M. & W. 216; 15 L. J. Ex. 113; 10 Jur. 163 . . 512, 541, 544, 548 Loader v. Clarke (1850) 2 Mac. & G. 382 248 Lofft v. Dennis (1859) 1 E. & E. 474; 28 L. J. Q. B. 168; 32 L. T. 273; 5 Jur. N. S. 727; 7 W. E. 199 363, 364, 365 Loffus v. Maw (1862) 3 Giff. 592; 8 Jur. N. S. 607 694, 695 London and N. W. Ey. Co. v. M'Michael (1850) 5 Ex. 114; 20 L. J. Ex. 97 59, 64, 65 London and N. W. Ey. Co. v. Price (1883) 11 Q. B. D. 485; 52 L. J. Q. B. 754 662 London and Provincial Insurance Co. v. Seymour (1873) 17 Eq. 85; 43 L. J. Ch. 120; 29 L. T. 641; 22 W. E. 201 552 London and S. W. Ey. Co. v. Blackmore (1870) L. E. 4 H. L. 610; 39 L. J. Ch. 713; 23 L. T. 504; 19 W. E. 305 461 London and S. W. Ey. Co. v. Gomm (1882) 20 Ch. Div. 562; 51 L. J. Ch. 530; 46 L. T. 449; 30 W. E. 620 226 London Assurance Co. v. Mansel (1879) 11 Ch. D. 363; 48 L. J. Ch. 331; 27 W. E. 444 491 London Chartered Bank of Australia v. Lempriere (1873) L. E. 4 P. C. 572; 42 L. J. P. C. 49; 29 L. T. 186; 21 W. E. 513; 9 Moo. P. C. N. S. 426 551, 648 London Dock Co. v. Sinnott (1857) 8 E. & B. 347; 27 L. J. Q. B. 129; 30 L. T. O. S. 164; 4 Jur. N. S. 70; 6 W. E. 165 150 London Joint Stock Bank v. Mayor of London (1875) 1 C. P. D. 1; 5 C. P. Div. 494; 6 App. Ca, 393; 45 L. J. C. P. 213; 33 E. T. 781 114 London Land Co. v. Harris (1884) 13 Q. B. D. 540 552 London, Mayor of, v. Cox (1866) L. E. 2 H. L. 239; 36 L. J. Ex. 225; 16 W. E. 44 396 Longmate v. Ledger (1860) 2 Giff. 157; 4 D. F. J. 402; 2 L. T. 246; 6 Jur. N. S. 481; 8 W. E. 386 574, 575 Loveridge v. Cooper (1823-7) 3 Euss. 30 209 . _. TABLE OF CASES. 53 [The paging refers to the [*] pages.] PAGE Lovesy v. Smith (1880) 15 Ch. D. 655; 49 L. J. Ch. 809; 43 L. T. 240; 28 W. R. 979 475 Lowe v. London and N. W. Ry. Co. (1852) 18 Q. B. 632; 7 Railw. Ca. 524; 21 L. J. Q. B. 361; 17 Jur. 375 150, 155 Lowe v. Peers (1768) Wllmot, 371; 4 Burr. 2225 307 Lowis v. Rumney (1867) 4 Eq. 451 600 ■ Lowther v. Lowther (1806) 13 Ves. 95 . . 244 Lucas v. Wilkinson (1856) 1 H. & N. 420; 26 L. J. Ex. 13 4:24 Luders v. Anstey (1799) 4 Ves. 501 694 Ludlow, Mayor of, v. Charlton (1840) 6 M. & W. 815; 8 C. & P. 242; 4 Jur. 657 147, 152 Lukeri). Dennis (1877) 7 Ch. D. 227; 47 L. J. Ch. 174; 37 L. T. 827; 26 W. R. 167 229 Lumley v. Gye (1853) 2 E. & B. 216; 22 L. J. Q. B. 463; 22 L. T. O. S. 220; 17 Jur. 827 192 Lumsden's Case (1868) 4Ch. 31; 19 L. T. 437; 17 W. R. 65 ... .57 Lush's trusts (1869) 4 Ch. 591; 17 W. R. 974 615 Lyall v. Edwards (1861) 6 H. & N. 337; 30 L. J. Ex. 193 461 Lyddon «. Moss ;1859) 4 De G. & J. 104; 33 L. T. O. S. 170; 5 Jur. N. S. 637; 7 W. R. 433 566 Lvnch. Ex parte (1876) 2 Ch. D. 227; 45 L. J. Bkcy. 48; 34 L. T. 34; 24 W. R. 375 77 Lyon v. Haynes (1843) 5 M. & Gr. 504; 6 Scott, N. R. 371 223 Lyonu. Home (1868) 6 Eq. 655; 37 L. J. Ch. 674; 18 L. T. 451; 16 W. R. 824 571, 703 Lyons v. Blenkin (1820-1)- Jac. 245 304 Macbeath v. Haldimand (1786) 1 T. R. 172 100 McBlair v. Gibbes (1854) 17 Howard, 232 „. 281, 326 Macbryde v. Weeks (1856) 22 Beav. 533; 28 L. T. O. S. 135; 2 Jur. N. S. 918 464 M'Callan v. Mortimer (1842) 9 M. & W. 636 333 McCarthy v. Decaix (1831) 2 Russ. & My. 614 408 M'Clean V. Kennard (1874) 9 Ch. 336; 43 L. J. Ch. 323; 30 L. T. 186; 22 W. R. 382 403 McConnellu. Hector (1802) 3 B. & P. 113 280 Maccord v. Osborne (1876) 1 C. P. D. 568; 45 L. J. C. P. 727; 35 L. T. 164; 25 W. R. 9 602 M'Culloch v. Gregory (1855) 1 K. & J. 286; 24 L. J. Ch. 246 505 Macdonald v. Law Union Insurance Co. (1874) L. R. 9 Q. B. 328; 43 L. J. Q. B. 131; 30 L. T. 545; 22 W. R. 530 491 MacDougall v. Gardiner (1875) 10 Ch. 606; 1 Ch. D. 13; 33 L. T. 521; 23 W. R. 846 664 Macgregort-. Dover and Deal. Ry. Co. (1852) 18 Q. B. 618; 7 Railw. Ca, 227; 22 L. J. Q. B. 69; 17 Jur. 21 126, 657 McHenry v. Davies (1870) 10 Eq. 88; 22 L. T. 643; 18 W. R. 855; 14 Sol. J. 878 651, 652 Mclvor v. Richardson (1813) 1 M. & S. 557 26 Mackay, Exparle (1873) frCh. 643; 42 L. J. Bk. 68; 28 L. T. 828; 21 W. R. 664 255 Mackay v. Commercial Bank of New Brunswick (1874) L. R. 5 P. C. 394; 43 L. J. P. C. 31; 30 L. T. 180; 22 W. R. 473 115, 531 Mackay «.Dick (1881) 6 App. Ca. 251; 29 W. R. 541 381 Mackenzie v. Coulson (1869) 8 Eq. 368 474 McKenzie v. Hesketh (1877) 7 Ch. D. 675; 47 L. J. Ch. 231; 38 L. T. 171; 26 W. R. 189 431, 435 54 TABLE OF CASES. [The paging refers to the [*] pages.] page: McKewan v. Sanderson (1873) 15 Eq. 229; 42 L. J. Ch. 296; 28 L. T. 159 238, 240 McKune v. Joynson (1858) 5 C. B. N. S. 218; 28 L. J. -C. P. 133 22 Maclean's trusts (1874) 19 Eq. 274 288 McLean v. Clydesdale Banking Co. (1883) 9 App. Ca. 95; 50 L. T. 457 . . 219 McManus t>. Bark (1870) L. R. 5 Ex. 65; 39 L. J. Ex. 65; .21 L. T. 676 . 180 McNiell's Case (1870) 10 Eq. 503; 39 L. J. Ch. 822: 23. L. T. 297; 18 W. E. 1102, 1126 539 McPherson v. Watt (1877) 3 App. Ca. 254 566 Maddison v. Alderson (1883) 8 App. Ca. 467; 51 L. J. Q. B. 737; 49 L. T. 303; 31 W. E. 820 482, 484, 605, 606, 611, 615, 695 Maddon v. White (1787) 2 T. E. 159; 2 Esp. 530 56, 66 Magdalen Hospital. Governors of, v. Knotts (1879) 4 App. Ca. 324; 48 L. J. Ch. 579; 40 L. T. 466; 27 W. E. 682 53 Magee v. Lavell (1874) L. E. 9C. P. 107; 43 L. J. C. P. 131; 30 L. T. 169; 22 W. E. 334 467 Mahony v. East Holyford Mining Co. (1875) L. E. 7 H. L. 869; 9 Ir. E. C. L. 306; 33 L. T. 383 665 Mainprice v. Westley (1865) 6 B. & S. 420; 34 L. J. Q. B. 229; 13 L. T. 560; 11 Jur. N. S. 975; 14 W. E. 9 16 Maitland v. Backhouse (1847) 16 Sim. 58 594 Maitland v. Irving' (1846) 15 Sim. 437 559 Malins vi Freeman (1836-7) 2 Keen, 25 430 Malins v. Freeman (1838) 4 Bing. N. C. 395 53 Mallalieu v. Hodgson (1851) 16 Q. B. 689; 20 L. J. Q. B. 339; 15 Jur. 817 177 239 Mallett v. Bateman (1865) L. E. 1 C. P. 163; 1 H. & E. 109; 35 L. J. C. P.' 40; 13 L. T. 410; 12 Jur. N. S. 122; 14 W. E. 225 159 Manhy v. Scott (1660) 2 Sm. L. C. 445; 1 Lev. 4 648 Mangies v. Dixon (1852) 3 H. L. C. 702 . . . . 212 Mann v. Stephens (1846) 15 Sim. 377 229 Manson v. Thacker (1878) 7 Ch. D. 620; 47 L. J. Ch. 312; 38 L. T. 209; 26 W. E. 604 512 Marriott v. Hampton (1796) 2 Sm. L. C. 421 ; 7 T. E. 269 . . 555 Marsh and Earl Granville (1883) 24 Ch. Div. 11; 53 L. J. Ch. 81; 48 L. T. 927; 31 W. E. 845 504 Marsh v. Eainsford (1588) 2 Leon. Ill 170 Marsh v. Whitmore (1874) 21 Wallace (Sup. Ct. U. S.) 178 245 Marshall v. Baltimore and Ohio Eailroad Co. (1853) 16 Howard, 314 . . Ill 284, 285 Marshall!). Berridge (1881) 19 Ch. Div. 233; 51 L. J. Ch. 329; 45 L. T. 599; 30 W. E. 93; 46 J. P. 279 403 Marshall v. Collett (1835) 1 Y. & C. Ex. 232 400 Marshall!). Green (1875) 1 C. P. D. 35; 45 L. J. C. P. 153; 33 L. T. 404; 24 W. E. 175 160 Marshall v. Marshall (1879) 5 P. D. 19; 48 L. J. P. 49; 39 L. T. 640; 27 W. E. 379 ,. . . 266 Marshall r. Button (1800) 8 T. E. 545 79 Martin's Claim (1872) 14 Eq. 148; 41 L. J. Ch. 679; 26 L. T. 684 ... . 619 Martin v. Gale (1876) 4 Ch. D. 428; 46 L. J. Ch. 84; 36 L. T. 357; 25 W. E. 406 73 Martin v. Pycroft (1852) 2 D. M. G. 785; 22 L. J. Ch. 94; 16 Jur. 1125 457, 469 Mason v. Harris (1879) 11 Ch. Div. 97; 48 L. J. Ch. 589; 40 L. T. 644; 27 W. E. 699 664 Maspons y Hermano v. Mildred (1883) 9 Q. B. Div. 530; 8 App. Ca. 874; 53 L. J. Q. B. 33; 32 W. E. 125 98 Massev v. Davies (1794) 2 Ves. 317 • .... 246 TABLE OF CASES. 55 [The paging refers to the [«] pages.] PAOE Master v. Hansard (1876) 4 Ch. Div. 718; 46 L. J. Ch. 505; 36 L. T. 535; 25 W. R. 570 229 Mather v. Lord Maidstone (1856) 18 C. B. 273; 25 L. J. C. P. 310; 27 L. T. 261 181 Matheson v. Ross (1849) 2 H. L. C. 286; 13 Jur. 307 619 Matthews v. Baxter (1873) L. R. 8 Ex. 132; 42 L. J. Ex. 73; 28 L.T. 169; 21 W. R 389 93, 418, 553 Matthews v. Wallwyn (1798) 4 Ves. 118 225 Munsell v. Hedges White (1854) 4 H. L. C. 1039 . . . 692, 693, 694. 695, 687 Maxfield u. Barton (1873) 17 Eq. 15; 43 L. J. Ch. 46; 29 L. T. 571; 22 W. R. 148 211 Maw v. Topham (1854) 19 Beav. 576 501 Mawson v. Fletcher (1870) 6 Ch. 91; 40 L. J. Ch. 131; 23 L. T. 545; 19 W. R. 141 .497 May v. O'Neill (1875) W. N. 1875, p. 179; 44 L. J. Ch. 660 317 Mayd v. Field (1876) 3 Ch. D. 587; 45 L. J. Ch. 699; 31 L. T. 614; 24 W. R. 660 648 Mayhew v. Crickett (1818) 2 Swanst. 185 243 Maynard v. Eaton (1874) 9 Ch. 414; 43 L. J. Ch. 641; 30 L. T. 241; 22 W. R. 457 540 Mayor, the (of Nashville) v. Ray (1873) 19 Wallace (Sup. Ct. U. S.) 468 . 131 Mead v. Young (1790) 4 T. R. 28 399 Mearingu Hellings (1845) 14 M. & W. 711; 15 L. J. Ex. 168 336 Meguire v. Corwine (1879) 11 Otto (101 U. S.) 108 285 Melbourne Banking Corporation v. Brougham (1878-9) 4 App. Ca. 156; 48 L. J. P. C. 12; 40 L. T. 1 : 131 Melhado v. Porto Alegre Ry Co. (1874) L. R. 9 C. P. 503; 43 L. J. C. P. 253; 31 L. T. 57; 23 W. R. 57 204 Memphis, City of, v. Brown (1873) 20 Wallace (Sup. Ct. U. S.) 289 . . . 329 Menier v. Hooper's Telegraph Works (1874) 9 Ch. 350; 43 L. J. Ch. 330; 30 L. T. 209; 22 W. R. 257, 396 664 Merchant Banking Co. of London n-. Phoenix Bessemer Steel Co. (1877) 5 • Ch. D. .205; 46 L. J. Ch. 418; 36 L. T. 395; 25 W. R. 457 215, 220 Metcalfe's Trusts (1864) 2 D. J. S. 122; 33 L. J. Ch. 308; 10 Jur. N. S. 224 594 Meyerhoff'D. Frohlich (1878) 3 C. P. D. 333; 4 C. P. Div. 63; 48 L. J. C. P. 43; 39 L. T. 620; 27 W. R. 258 601 Middleton v. Brown (1878) 47 L. J. Ch. 411; 38 L. T. 334 587 Midland G. W. Ry. Co. of Ireland v. Johnson (1858) 6 H. L. C. 798; 4 Jur. N. S. 643 150, 402 Midland Ry. Co. v. Pye (1861) 10 C. B. N. S. 179; 30 L. J. C. P. 314; 4 L. T. 510; 9 W. R. 658 84 Mill v. Hawker (1874) L. R. 9 Ex. 309; 10 ib. 92; 44 L. J. Ex. 49; 33 L. T. 177; 24 W. R. 348 117, 118 Millar v. Craig (1843) 6 Beav. 433 462 Miller's Case (1876) 3 Ch. Div. 391 194 Miller v. Cook (1870) 10 Eq. 641; 40 L. J. Ch. 11; 22 L. T. 740; 18 W. R. 1061 58^ Mills v. Fowkes (1839) 5Bing. N. C. 455; 7 Scott, 444; 2 Am. 62; 3 Jur. 406 600 Mills v. Scott (1873) L. R. 8 Q. B. 496; 42 L. J. Q. B. 234; 29 L. T. 96; 21 W. R. 915 200 Mill ward v. Littlewood (1850) 5 Ex. 775: 20 L. J. Ex. 2 ... . 106, 237, 249 Miltenberger v. Cooke (1873) 18 Wallace (Sup-. Ct. U. S.) 421 326 Mitchel v. Revnolds (1711) 1 Sm. L. C. 417;' 1 P. Wms. 181 310, 311 Mitchell's Claim (1871) 6 Ch. 822; 19 W. R. 1130 601 Mitchell v. Homfray (1881) 8 Q. B. Div. 587; 50 L. J. Q. B. 460; 45 L. T. 694; 29 W. R. 558 596 Mitchell v. Lancashire and Yorkshire Ry. Co. (1875) L. R. 10 Q. B. 256; 44 L. J. Q. B. 107; 33 L. T. 61 ; 23 W. R. 853 400 56 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Mitchell v. Lapage (1816) Holt, N. P. 253 ... 421 Mody v. Gregson (1868) L. E. 4 Ex. 49; 38 L. J. Ex. 12; 19 L. T. 458; 17 W. R. 176 •. 487 Mollett v. Robinson (1870) L. R. 5 C. P. 646; 39 L. J. C. P. 290; 18 W. R. 1160 244 Molony v. Kernan (1842) 2 Dr. & W. 31 567, 570,' 594 Molton v. Camroux (1848) 2 Ex. 487; 4 ib. 17; 18 L. J. Ex. 68, 356 . 92, 93, 418 Mondel v. Steel (1841) 8 M. & W. 858; 1 D. N. S. 1; 10 L. J. Ex. 426 . . 488 Monkman v. Shepherdson (1840) 11 A. & E. 411 ' ... 179 Monopolies, Case of (1602) 11 Co. Rep. 84 b 313 Moore and De la Torre's Case (1874) 18 Eq. 661; 43 L. J. Ch, 751; 29* L. T. 668; 31 ib. 83; 22 W. R. 873 509, 536 Moore v. Metrop. Ry. Co. (1872) L. R. 8 Q. B. 36; 42 L. J. Q. B. 23; 27 L. T. 579; 21 W. R. 145 115 Moore v. Moore (1874) 18 Eq. 474; 43 L. J. Ch. 617; 30 L. T. 752; 22 W. R. 729 185 Moorhouse v. Colvin (1851) 15 Beav. 341 45 Mordue v. Palmer (1870) 6 Ch. 22; 40 L. J. Ch. 8; 23 L. T. 752; 19 "W. R. 86 404 Morgan v. Griffith (1871) L. R. 6 Ex. 70; 40 L. J. Ex. 46; 23 L. T. 783; 19 W. R. 957 160, 364, 698 Morgan v. Malleson (1870) 10 Eq. 475; 39 L. J. Ch. 680; 23 L. T. 336; 18 W«. R. 1125 185 Morgan v. Minnett (1877) 6 Ch. D. 638; 36 L. T. 948; 25 W. R. 744 .. . 566 Morgan v. Ravey (1861) 6 H. & M. 265; 30 L. J. Ex. 131 10 Morgan v. Rowlands (1872) L. R. 7 Q. B. 493; 41 L. J. Q. B. 187; 26 L. T. 855; 20 W. R. 726 , : 602 Morison e. Thompson (1874) L. R. 9 Q. B. 480; 43 L. J. Q. B. 215; 30 L. T. 869, 22 W. R. 859 246 Morley v. Rennoldson (1843) 2 Ha. 570 309 Morphett v. Jones (1818) 1 Swanst. 172 457, 612 Mofrell ». Cowan (1877) 6 Ch. D. 166; 7 Ch.Oiv. 151; 47 L. J. Ch. 73; 37 L. T. 586; 26 W. R. 90 . 649 Morrell v. Morrell (1882) 7 P. D. 68; 51 L. J. P. 49; 46 L. T. 485; 30 W. R. 491; 46 J. P. 328 ; . 691 Morris v. Hunt (1819) l'Chitt. 544 627,629 Morrison v. Universal Marine Insurance Co. (1873) L. R. 8 Ex. 40, 197; 42 L. J. Ex. 115; 21 W. R. 774 489, 490, 541, 551, 618 Morse v. Royal (1806) 12 Ves. 355 595, 596 Mortaraj). Hall (1834) 6 Sim. 465 70 Mortimer v. Bell (1865) 1 Ch. 10; 35 L. J. Ch. 25; 13 L. T. 348; 11 Jur. K. S. 897, 14 W. R. 68 518 Mortimer v. Capper (i782) 1 Bro. C. C. 158 177 Mortimer v. Shortall (1842) 2 Dr. & War. 363 472 Mortlock v. Buller (1804) 10 Ves. 292 497 Moss v. Averill (1853) 10 N. Y. 449 , 128 Moss v. Smith (1850) 9 C. B. 94; 19 L. J. C. P. 225; 14 Jur. 1003 .... 355 Mostyn v. Mostyn (1870) 5 Ch. 457; 39 L. J. Ch. 780; 22 L. T. 461; 18 W. R. 657 627, 628 Mostyn v. West Mostyn Coal and Iron Co. (1876) 1 C. P. D. 145; 45 L. J. C. P. 401; 34 L. T. 325; 24 W. R. 401 450, 507 Moufletw. Cole (1872) L. R. 7 Ex. 70; 8 ib. 32; 42 L. J. Ex. 8; 27 L. T. 678; 21 W. R. 175 ' 319 Mountstephen v. Lakeman (1871) L. R. 7 Q. B. 196; 7 H. L. 17; 43 L. J. Q. B. 188; 30 L. T. 437; 22 W. R. 617 158 Moxon v. Payne (1873) 8 Ch. 881; 43 L. J. Ch. 240 570. 595 Moyce v. Newington (1878) 4 Q. B. D. 32; 48 L. J. Q. B. 125; 39 L. T.' 535; 27 W. R. 319 544 TABLE OF CASES. 57 CThe paging refers to the [•] pages.] PAGE Mozley v. Tinkler (1835) 1 C. M. & R. 692; 5 Tyr. 416; 1 Gale, 11 . . . 26 Mulliner v. Midland Ry. Co. (1879) 11 Ch. D. 611 ; 48 L. J. Ch. 258 ; 40 L. T. 121 ; 27 W. R. 330 124 Mumford v. Gething (1859) 7 C. B. N. S. 305 ; 29 L. J. C. P. 105 ; 1 L. T. 64 ; 6 Jnr. N. S. 428 ; 8 W. R. 187 317 Municipal Building Society v. Kent (1884) 9 App. Ca, 260 ; 53 L. J. Q. B. 290 ; 51 L. T. 4 ; 32 W. R. 681 292 Munro, Ex parte (1876) 1 Q. B. D. 724 ; 45 L. J. Q. B. 816 ; 35 L. T. 857 ; 24 W. R. 1017 630 Murphy v. Boese (1875) L. R. 10 Ex. 126 ; 44 L. J. Ex. 40 ; 32 L. T. 122 ; 23 W. R. 474 163 Murray v. Barlee (1834) 3 M. &. K. 209 . . 647 Murray v. E. India Co. (1821) 5 B. & Aid. 204 128 Murray v. Flavell (1883) 25 Ch. Div. 89 ; 53 L. J. Ch. 185 ; 32 W. R. 102 203 Murray v. Parker (1854) 19 Beav. 305 471 Murray v. Pinkett (1846) 2 Ha. 120 ; 12 CI. & Fin. 764 211 Myers v. Watson (1851) 1 Sim. N. S. 523 697 Naden, Ex parte (1874) 9 Ch. 670 ; 43 L. J. Bk. 121 ; 30 L. T. 575, 743 ; 22 W. R. 768, 936 264 Nash v. Hodgson (1855) 6 D. M. G. 474; 25 L. J. Ch. 186 ; 1 Jur. N. S. 946 600 National Provincial Bank of England, Ex parte (1876) 4 Ch. D. 241 ; 46 L. J. Bk. 11 ; 35 L. T. 673 ; 25 W. R. 100 473 Neale v. Turton (1827) 4 Bing. 149 129 NedbyV Nedby (1852) 5DeG. & Sm. 377 559 Neilson, Ex parte (1853) 3 D. M. G. 556 ; 22 L. T. O. S. 190 ; 18 Jur. 297 ; 2 W. R. 121 254 Nelson v. Stacker (1859) 4 De G. & J. 458 ; 28 L. J. Ch. 751 ; 5 Jur. N. S. 751 77 Nerot v. Wallace (1789) 3 T. R. 17 176 Nesbitt v. Berridge (1863) 32 Beav. 280; 4 D. J. S. 45 ; 3 N. R. 53 ; 9 L. T. 588 ; 10 Jur. N. S. 53 ; 12 W. R. 283 583 Nevill v. Snelling (1880) 15 Ch. D. 679 ; 49 L. J. Ch. 777 ; 43 L. T. 244 585, 586, 587, 588 New Brunswick, &c. Co. v. Conybeare (1862) 9 H. L. C. 711 ; 31 L. J. Ch. 297 ; 6 L. T. 109 ; 10 W. R. 305 526, 532 New Brunswick, &c. Co. v. Muggeridge (1860) 1 Br. & Sm. 363 ; 4 Drew. 686 ; 30 L. J. Ch. 242 ; 3 L. T. 651 ; 7 Jur. N. S. 132 ; 9 W. R. 193 . . 508 New Sombrero Phosphate Co. *. Erlanger (1877) 5 Ch. Div. 73 ; 46 L. J. Ch. 425 ; 36 L. T. 222 ; 25 W. R. 436 . ' 245, 509 New York Life Ins. Co. v. Statham (1876) 3 Otto (93 U. S.) 24 279 New Zealand Banking Corporation, Ex parte (1867) 3 Ch. 154 ; 37 L. J. Ch. 418; 18 L. T. 132; 16 W. R. 533 214 New Zealand Land Co. v. Watson (1881) 7 Q. B. Div. 374 ; 50 L. J. Q. B. 433 ; 44 L. T. 675 ; 29 W. R. 694 98 Newburgh v. Newburgh (1820) 5 Madd. 364 691 Newcomb *. De Roos (1859) 2 E. & E. 271 ; 29 L. J. Q. B. 4 ; 6 Jur. N. S. 68 ; 8 W. R. 5 643 Newell v. Radford (1867) L. R. 3 C. P. 52 ; 37 L. J. C. P. 1 ; 17 L. T. 118 ; 16 W. R. 97 162 Newry and Enniskillen Ry. Co. v. Coombe (1849) 3 Ex. 505 ; 5 Railw. Ca. 633 ; 18 L. J. Ex. 325 59, 64 Newton v. Marsden (1862) 2 J. & H. 356 ; 6 L. T. 155 ; 10 W. R. 438 . . 309 Nichol v. Godts (1854) 11 Ex. 191 ; 23 L. J. Ex. 314 ; 23 L. T. O. S. 162 . 457 Nichols v. Marsland (1876) 2 Ex. Div. 1 ; 46 L. J. Ex. 174 ; 35 L. T. 725 ; 25 W. R. 173 367 58 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Nicholson v. Bradfield Union (1866) L. R. 1 Q. B. 620 ; 35 L. J. Q. B. 176 ; 14 L. T. 830 ; 14 W. R. 731 151 Niell v. Morley (1804) 9 Ves. 478 92 Noble v. Ward (1867) L. E. 1 Ex. 117 ; 2 ib. 135 ; 4 H. & C. 149 ; 15 L. T. 672 457, 619 North British Insurance Co. v. Lloyd (1854) 10 Ex. 523 ; 24 L. J. Ex. 14 ; 1 Jur. N. S. 45 . . . 493, 494 Norton v. Belly (1764) 2 Eden. 286 571 Norton v. Turville (1723) 2 P. Wms. 144 ; 2 Eq. Ca. Ab. 152 ; 8 Ir. Ch. Appx 652 Norwich, Mayor of, v. Norfolk Ry. Co. (1855) 4 E. & B. 397 ; 3 C. L. R. 519; 24 L. J. Q. B..105 ; 1 Jur. N. S. 344 . . . . 120, 126, 235, 348, 660, 669 Norwood v. Read (1557-8) B. R. Plowd. 180 191 Nottidge r. Prince (1860) 2 Giff. 246 ; 29 L. J. Ch. 857 ; G Jur. N. S. 1066 571 Nugent v. Smith (1876) 1 C. P. Div. 423 ; 45 L. J. C. P. 697 ; 34 L. T. 827 ; 25 W. R, 117 , 367 Nunn v. Fabian (1865) 1 Ch. 35 ; 35 L. J. Ch. 140; 13 L. T. 343; 12 Jur. 154 611 Nuttall v. Bracewell (1866) L. R. 2 Ex. 1 ; 4 H. & C. 714 ; 36 L. J. Ex. 1; 15 L. T. 312 ; 12 Jur. N. S. 989 228 Oakden v. Pike (1865) 34 L. J. Ch. 620 ; 12 L. T. 527; 11 Jur. N. S. 666 ; 13 W. R. 673 . . ... 464 Oakeley v. Pasheller (1836) 4 CI. & Fin. 207 242 Oakes v. Turquand (1867) L. R. 2 H. L. 325 ; 36 L. J. Ch. 949 ; 16 L. T. 808 : . , 391, 433, 536, 546, 550 Oakley ti. Port of Portsmouth and Ryde Steam Packet Co. (1856) 11 Ex. 618; 25 L. J. Ex. 99 ; 26 L. T. O. S. 204 ; 4 W. .E. 236 , 366 Odessa Tramways Co. v. Mendel (1878) 8 Ch. Div. 235 ; 47 L. J. Ch. 505 ; 38 L. T. 731; 26 W. R. 887 321 Ogilvie o. Jeaffreson (1859-60) 2 Giff. 353 ; 8 W. R. 745 . . . . 416, 417 Ogle, Ex parte (1873) 8 Ch. 711; 42 L. J. Bk. 99; 21 W. R. 938 ... 396 Oglesby v. Yglesias (1858) E. B. & E. 930 ; 27 L. J. Q. B. 356 ; 31 L. T. O. S. 234 ; 6 "W. R. 690 99 Oldershaw v. King (1857) 2 H. & N.. 517 ; 27 L. J. Ex. 120 ; 3 Jur. N. S. 1152 ; 5 W. R. 753 181 Oliver, Ex parte (1849-51) 4 De G. & Sm. 354 . . 239 Omerod v. Hardman (1801) 5 Ves. 722 457 Oriental Financial Corporation v. Overend, Gurney & Co. (1874) L. R. 7 H. L. 348 242 Ormes v. Beadel (1860) 2 Giff. 166 ; 2 D. F. J. 333 ; 30 L. J. Ch. 1 ; 9 W. R. 25 . 537, 572 Ormrod u. Huth (1845) 14 M. &W. 651; 14 L. J. Ex. 366 . ... 516 O'Eorke v. Bolingbroke (1877) 2 App. Ca. 814; 26 W. R.239 . . 584, 589 Osborne v. Rogers (1669) 1 Wms. Saund. 357 . . 12 Osborne v. Williams (1811) 18 Ves. 379 287, 337 Oswald v. Mayor of Berwick-on-Tweed (i856) 5 H. L. C. 856; 25 L. J. Q. B. 383; 2 Jur. N. S. 743 242 Oulds v. Harrison (1854) 10 Ex. 572; 3 C. L. R. 353; 24 L. J. Ex. 66 . . 259 Overton?}. Banister (1844) 3 Ha. 503; 8 Jur. 906 76 Owen v. Homan (1851) 3 Mac. & G. 378: 4 H. L. C. 997; 1 Eq. E. 370; 17 Jur. 861 ' . . 350, 517 Owens v. Dickenson (1840) 1 Cr. & Ph. 48 647 Paget-. Cox (1851) 10 Ha. 163 203 Page v. Home (1846-8) 9 Beav. 570; 11 ib. 227 559 TABLE OF CASES. 59 pThe paging refers to the [*] pages.] PAQP Paice v. "Walked (1870) L. E. 5 Ex. 173; 39 L. J. Ex. 109; 22 L. T. 547; 18 W. E. 789 98, 99 Paine v. Strand Union (1846) 8 Q. B. 326; 15 L. J. M. C. 89; 10 Jur. 308 J 52 Pakenham's Case (1368) H. 42, E. 3, 3, pi. 14 225 Palmer v. Johnson (1884) 13 Q. B. Div. 351; 53 L. J. Q. B. 348; 50 L. T. 211; 32 W. K. 293 498, 505 Palmer u. Locke (1880) 15 Ch. Div. 294; 28 W. E. 926 . . . ... 310 Palmer v. Neave (1805) 11 Ves. 165 ' 249 Palyart v. Leckie (1817) 6 M. & S. 290 335 Panama and S. Pacific Telegraph Co. v. India Bubber Co. (1875) 10 Ch. 515; 45 L. J. Ch. 121; 32 L. T. 517; 23 W. E. 583 246 Panmure, Ex parte (1883) 24 Ch. Div. 367; 53 L. J. Ch. 57; 32 W. E. 236 106 Paradine v. Jane (1648) Aleyn, 26 363, 364 Parfitt v. Lawless (1872) L. E. 2 P. & D. 462; 41 L. J. P. 68; 27 L. T. 215; 21 W. R. 200 560 Paris Skating Eink Co., Be (1877) 5 Ch. Div. 959; 37 L. T. 298; 25 W." E. 701 299 Parker v. Butcher (1867) 3 Eq. 762; 36 L. J. Ch. 552 558 Parker v. G. W. Ey. Co. (1844) 7 M. & Gr. 253; 7 Scott, N. E. 835; 3 Eailw. Ca. 563; 13 L. J. C. P. 105 555 Parker v. McKenna (1874) 10 Ch. 96; 44 L. J. Ch. 425; 31 L. T. 739; 23 W. E. 271 245, 552 Parker v. S. E. Ey. Co. (1876) 1 C. P. Div. 618; 46 L. J. C. P. 768; 37 L. T! 540; 25 W. E. 564 47 Parkesu. White (1804-5) 11 Ves. 209 648 Parkin v. Thorold (1852) 16 Beav. 59 462, 463, 465 Parsons v. Alexander (1855) 5 E. & B. 263; 24 L. J. Q. B. 277; 1 Jur. 1ST. S. 660 l 685 Partington v. Att.-Gen. (1869) L. E. 4 H. L. 100 . . .... . . 80 Partridge v. Strange (1553-4) Plowd. 77 301 Pasley v. Freeman (1789) 3 T. E. 51; 2 Sm. L. C. 66 484 Patman v. Harland (1881) 17 Ch. D. 353; 50 L. J. Ch. 642; 44 L. T. 728; 29 W. E. 707 226 Patrick v. Milner (1877) 2 C. P. D. 342; 46 L. J. C. P. 537; 36 L. T. 738; • 25 W. E. 790 : 464 Pauling v. L. & N. W. Ey. Co. (1853) 8 Ex. 867; 7 Eailw. Ca. 816; 23 L. J. Ex. 105 151 Pawle's Case (1869) 4 Ch. .497; L. J. Ch. 318; 20 L. T. 100; 17 W. E. 391 539 Payne's Case (1869) 9 Eq. 223 . . 520 Payne v. Cave (1789) 3 T. E. 148 13 Peacock v. Evans (1809) 16 Ves. 512 574, 581 Peacock v. Monk (1750-1) 2 Ves. sen. 190 646 Peacock v. Penson (1848) 11 Beav. 355 698 Pearce v. Brooks (1866) L. E. 1 Ex. 213; 35 L. J. Ex. 134; 14 L. T. 288; 12 Jur. N. S. 342; 14 W. E. 614 323, 324 Pearce v. Watts (1875) 20 Eq. 492; 44 L. J. Ch. 492; 23 W. E. 771 ... . 43 Pears v. Laing (1871) 12 Eq. 41; 40 L. J. Ch. 225; 24 L. T. 19; 19 W. E. 653 602 Pease «. Gloahec (1866) L. E. 1 P. C. 219; 35 L. J. P. C. 66; 15 L. T. 6; 15 W. 4*. 201 545 Pechell v. Watson (1841) 8 M. & W. 691 294 Peek v. Gurney (1873) L. E. 6 H; L. 377; 43 L. J. Ch. 19; 22 W. E. 29 . 514, 516, 517, 534, 699 Peetersfl. Opie (1671) 2 Wms. Saund. 743 462 Peir.ce v. Corf (1874) L. E. 9 Q. B. 210; 43 L. J. Q. B. 52; 29 L. T. 919; 22 W. E. 299 ' 163 Pellecat v. Angell (1835) 2 C, M. & E. 311; 1 Gale, 187; 5 Tyr. 945 . . . 282 Pence v. Langdon (1878) 9 Otto (99 U. S.) 578 549 60 TABLE OF CASES. [The paging refers to the [•] pages.] PAQE J Pender v. Lushington (1877) 6 Ch. D. 70; 46 L. J. Ch. 317 664 Pennington (Doe d.) v. Taniere (1848) 12 Q. B. 998; 18 L. J. Q. B. 49; 13 Jur. 119 155 Perrett's Case (1873) 15 Eq. 250; 42 L. J. Ch. 305; 28 L. T. 255; 21 W. R.' 401 40, 433 Persse v. Persse (1840) 7 CI. & Fin. 279; West, 110 302 Peruvian Rv. Co., Be (1867) 2 Ch. 617; 36 L. J. Ch. 864; 16 L. T. 644; 15 W. R. 1002 '. 129 Peter v. Compton (1694) 1 Sm. L. C. 351; Skinner, 353 ..... . . 161 Peters v. Fleming (1840) 6 M. & W. 42 . . . . , 67 Pharmaceutical Soc. v. London and Provincial Supply Association (1880) 5 App. Ca. 857; 49 L. J. Q. B. 736; 13 L. T. 389; 28 W.R. 957; 45 J. P. 20 116 Phelps v. Lyle (1839) 10 A. & E. 113 205 Phillips v. Bistolli (1824) 2 B. & C. 511; 3D. & R. 822 429,451 Phillips v. Caldeleugh (1868) L. R. 4 Q. B. 159; 38 L. J. Q. B. 68; 20 L. T. 80; 17 W. R. 575 440. 496, 498 Phillips v. Clagett (1843) 11 M. & W. 84; 2 D. N. S. 1004; 12 L. J. Ex. 275 461 Phillips v. Foxall (1872) L. R. 7 Q. B. 666; 41 L. J. Q. B. 293; 27 L. T. 231; 20 W. R. 900 . 243 Phillips v. Homfray (1871) 6 Ch. 770 503 Phillips v. Miller (1875) L. R. 10 C. P. 420; 44 L. J. C. P. 265; 32 1. T. 638; 23 W. R. 834 500 Phillips v. Mullings (1871) 7 Ch. 244; 41 L. J. Ch. 211; 20 W. R. 129 . . 562 Phillips v. Phillips (1861)4 D. F. J. 208; 31 L. J. Ch. 321; 5 L. T. 655; 8 Jur. N. S. 145; 10 "W. R. 236 397, 398 Philpott ». Jones (1834) 4 N. & M. 14; 2 A. & E. 41 631 Phipps v. Lovegrove (1873) 16 Eq. 80; 42 L. J. Ch. 892; 28 L. T. 584; 21 W. R. 590 ' 211, 212 Phosphate of Lime Co. v. Green (1871) L. R. 7 C. P. 43; 25 L. T. 636 . . 668 PicardB. Hine (1869) 5Ch. 274; 18 W. R. 75, 178 648,649 Pickard v. Sears (1837) 6 A. & E. 469; 2 N. &. P. 488 448 Pickering's Claim (1871) 6 Ch. 525; affirming 24 L. T. 178 98 Pickering v. Ilfracomhe Ry. Co. (1868) L. R. 3 C. P. 235; 37 L. J. C. P. 118; 16 L. T. 660; 16 W. R. 458 212, 321 Pickering v. Stephenson (1872) 14 Eq. 322; 41 L. J. Ch. 493; 26 L. T. 608; 20 W. R. 654 662 Pidcock v. Bishop (1825) 3 B. & C. 605; 5 D. & R. 505 494 Piercey v. Young (1879) 14 Ch. Div. 200; 42 L T. 710; 28 W. R. 845 . . 292 Piggott v. Stratton (1859) 1 D. F. J. 33; 29 L. J. Ch. 1 ; 6 Jur. N. S. 129 612, 696 Pigot's Case (1615) 11 Co. Rep. 27 6 320 Pigott v. Thompson (1802) 3 Bos. & P. N. R. 147 200, 206 Pike v. Fitzgibbon (1881) 17 Ch. Div. 454; 50 L. J. Ch. 394; 44 L. T. 562; 29 W. R. 551 86, 650 Pilcher v. Rawlins (1872) 7Ch. 259; 41 L. J. Ch. 485; 25 L. T. 921; 20 W. R. 2ei; 16 Sol. J. 245 397 Pilkington v. Scott (1846) 15 M. & W. 657; 15 L. J. Ex. 329 319 Pillans v. Van Mierop (1765) 3 Burr. 1664 168, 678 Pinchon's Case (1612) 9 Co. Rep. 86 ft 191 PinkettD. Wright (18421 2 Ha. 120; 12 CI. & Fin. 784; 12 L. J. Ch. 119; 6 Jur. 1102 211 Pinnel's Case (1602) 5 Co. Rep. 117 197 Pisani v. A.-G. for Gibraltar ^1874) L. R. 5 P. C. 516; 30 L. T. 729; 22 W. R. 900 566 Pitt v. Smith (1811) 3 Camp. 33 90, 418 Pittam v. Foster (1823) 1 B. &C. 248; 1 Wins. Saund. 172; 2 D. & R. 363 81 Piatt u Bromage (1854) 24 L. J. Ex. 63 409 Playford v. United Kingdom Electric Telegraph Co. (1869) L. R. 4 Q. B. 706; 10 B. & S. 759; 38 L. J. Q. B. 249; 21 L. T. 21 ; 17 W. R. 968 . . 201 TABLE OF CASES. 61 [The paging refers to the [*] pages. ] PAGE Pledge v. Buss (1860) Johns. 663; 6 Jur. N. S. 695 243, 493, 494 Plevins v. Downing (1876) 1 C. P. D. 220; 45 L. J. C. P. 695; 35 L. T. 263 639 Plewsu Baker (1873) 16 Eq. 564; 43 L. J. Ch. 212 - . ... 291 Police Jury v. Britton (1872) 15 Wallace (Sup. Ct. U. S.) 566 131 Popham v. Brooke (1828) 5 Russ. 8 .567 Poplett v. Stockdale (1825) 1 R. & M. 337; 2 C. & P. 198 . . . . 237 Pordage v. Cole (1669) 1 Wms. Saund. 548 385 Porritt v. Baker (1855) 3 C. L. E. 432; 10 Ex. 759; 1 Jur. N. 8. 336 . . 683 Port of London Co.'s Case (1854) 5 D. M. G. 465; 2 Eq. Rep. 260; 23 L. T. O. S. 63; 2 W. R. 389, 546 665 Porter's Case (1593) 1 Co. Eep. 23 a 330 Potter r. Duffield (1874) 18 Eq. 4; 43 L. J. Ch. 472; 22 W. E. 585 . . . 162 Potter v. Sanders (1846) 6 Ha. 1 641 Potts v. Bell (1800) 8 T. R. 548; 2 Esp. 612 278 Poulton v. L. & S. W. Ry. Co. (1867) L. R. 2 Q. B. 534; 8B. &S. 616; 36 L. J. Q. B. 294; 17 L. T. 11 395 Poussard v. Spiers and Pond (1876) 1 Q. B. D. 410; 45 L. J. Q. B. 621; 34 L. T. 572; 24 W. E. 819 376 Powell v. Elliot (1875) 10 Ch. 424; 33 L. T. 110; 23 "W. R. 777 498 Powell v. Smith (1872) 14 Eq. 85; 41 L. J. Ch. 734; 20 W. R. 602 . . 403 Powell v. Thomas (1848) 6 Ha. 300 612 Practical Knowledge, Society of, v. Abbott (1840) 2 Beav. 559 . . 117, 118 Pratt?;. Barker (1826) 1 Sim. 1; 4 Russ. 507 . 571 Prees v. Coke (1870-1) 6 Ch. 645 575 Prentice v. London (1875) L. R. 10 C. P. 679; 44 L. J. C. P. 353; 33 L. T. 251 292 Preston v. Dania (1872) L. R. 8 Ex. 19; 42 L. J. Ex. 33; 27 L. T. 612; 21 W. R. 128 386, 467 Preston v. Luck (1884) 27 Ch. Div. 497 402 Price v. Berrington (1850-51) 3 Mac. & G. 486; 7 Ha. 394 92 Price b. Dyer (1810) 17 Ves. 356 457 Price v. Easton (1833) 4 B. & Ad. 433; 1 N. & M. 303 . . . 201, 203 Price v. Hewett (1852) 8 Ex. 146; 17 Jur. 4 74 Price P. Ley (1863) 4 Giff. 235; 7 L. T. 845; 9 Jur. N. S. 295; 11 W. R. 399 469, 470 Price v. Macauley (1852) 2 D. M. G. 339 525 Pride v. Bubb (1871) 7 Ch. 64; 41 L. J. Ch. 105: 25 L. T. 890; 20 W. R. 220 . . 646, 649 PrideauxB. Lonsdale (1863) 4 Giff. 159; 1 D. J. S. 433; 9 Jur. N. S. 507 247, 564 Priestley v. Fernie (1865) 3 H. & C. 977; 34 L. J. Ex 173 102 Prince of Wales Assce. Co. *. Harding (1857) E. B. & E. 183; 27 L. J. Q. B. 297; 4 Jur. N. S. 851 666 Printiugand Numerical Registering Co. v. Sampson (1875) 19 Eq. 462; 44 L. J. Ch. 705; 32 T. 354; 23 W. R. 463 277, 317 Pritchard v. Merchants' Life Insurance Society (1858) 3 C. B. N. S. 622; 27 L. J. C. P. 169; 4 Jur. N. S. 307 444 Prole v. Soady (1859) 2 Giff. 1 649 Prosser v. Edmonds (1835) 1 Y. & C. Ex. 481 293, 295, 299 Proudfoot v. Monteflore (1867) L. R. 2 Q. B. 511; 8 B. & S. 510; 36 L. J. Q. B. 225; 16 L. T. 585; 15 W. E. 920 490 Pryseu. Pryse(1872) 15 Eq. 86; 42 L. J. Ch. 253; 27 L. T. 575; 21 W. E. 219 301 Pulbrook v. Lawes (1876) 1 Q. B. D. 284; 45 L. J. Q. B. 178; 34 L. T. 95 609 Pulsford v. Richards (1853) 17 Beav. 96; 22 L. J. Ch. 559; 1 W. R. 295 . 536 Purcell v. Macnamara (1807) 14 Ves. 91 573 Pybus v. Gibb (1856) 6 E. & B, 902; 26 L. J. Q. B. 41; 3 Jur. N. S. 315 . 242 Byke, Ex parte (1878) 8 Ch. Div. 754; 47 L. J. Bk. 100; 38 L. T. 923; 26 W. R. 806 260 Pym v. Campbell (1856) 6 E. & B. 370 ; 25 L. J. Q. B. 277 ; 2 Jur. N. S. 641 458 62 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Quarrier v. Colston (1842) 1 Ph. 147; 6 Jur. 959; 12 L. T. O. S. 57 ... 344 Quincey v. Sharpe (1876) 1 Ex. D. 72; 45 L. J. Ex. 347; 34 L. T. 495, 24 W. R. 373". 601 Rabonej). "Williams (1785) 7 T. R. 36Q, n 101 Radenhurst v. Bates (1826> 3 Bing. 463; 11 Moore, 421 204 Raffles v. Wichelhaus (1864) 2 H. & C. 906; 33 L. J. Ex. 160 429 Raggett v. Bishop (1826) 2 C. & P. 343 632 Raggett v. Musgrave (1827) 2 C. & P. 556 632 Railton v. Matthews (1844) 10 CI. & F. 934 493, 494 Ram Coomar Coondo v. Chunder Canto Mookerjee (1876) 2 App. Ca. 186 . 303 Ramloll Thackoorseydass v. Soojumnull Dhondmull (1848) 6 Moo. P. C. 300 , 273 Ramsden v. Brearley (1875) L. R. 10 Q. B. 147; 44 L. J. Q. B. 46; 32 L. T. 24' 23 W. R. 294 84 Ramsden v. Dyson (1865) L. R. l" H. L. 129; 12 Jur. N. 8. 506; 14 W.' R. 926 612 Ramsgate Hotel Co. v. Goldsmid (1866) L. R. 1 Ex. 109; 4.H. & C. 164; 35 L. J. Ex. 90; 13 L. T. 715; 12 Jur. N. S. 455; 14 W. R. 335 . . . 25 Ramsgate Hotel Co. v. Montefiore (1866) lb . . 25 Randall v. Morgan (1805) 12 Ves. 67 606 Randegger v. Holmes (1866) L. R. 1 C. P. 679 291 Randell, Saunders & Co. v. Thompson (1876f 1 Q. B. Div. 748; 45 L. J. Q. B. 713; 35 L. T. 193; 24 W. R. 837 292 Randell v. Trimen (1856) 18 C. B. 786; 25 L. J. C. P. 307 106 Rankin v. Potter (1872-3) L. R. 6 H. L. 83; 42 L. J. C. P. 169; 29 L. T. 142: 22 W. R. 1 . ... 376 Rannr. Hughes (1778) 7 T. E. 350. n.;4 Bro. P. C. 27 169 Raphael v. Bank of England (1855) 17 C. B. 161; 25 L. J. C. P. 33 . . 218 Rashdall v. Ford (1866) 2 Eq. 750; 35 L. J. Ch. 769; 14 L. T. 790; 14 W. R. 950 521 Rawley v. Rawlev (1876) 1 Q. B. Div. 460; 45 L. J. Q. B. 675; 35 L. T. 191; 24 W. R. 995 ; 61 Rawlins v. Wickhani (1858) 3De6.& J. 304; 28 L. J. Ch. 188; 5 Jur. N. S. 278 513, 516, 517, 536 Raymond v. Minton (1866) L. R. 1 Ex. 244; 4 H. & C. 371; 35 L. J. Ex. 153; 14 L. T. 367; 12 Jur. N. S. 435; 14 W. R. 675 381 Rayneru. Grote (1846) 15 M. & "W. 359; 16 L. J. Ex. 69 105. 109 Read v. Anderson (1884) 13 Q. B. Div. 779; 51 L. T. 53; 32 W. R. 950; 28 Sol. J. 747 . . 334 Read v. Legard (1851) 6 Ex. 636; 20 L. J. Ex. 309; 15 Jur. 494 . . 88 Reade ti. Lamb (1851) 6 Ex. 130; 2 L. M. & P. 67; 20 L. J. Ex. 161 . . 606 Redlern v. Bryning (1877) 6 Ch. D. 133 452 Redgrave v. Hurd (1881) 20 Ch. Div. 1; 51 L. J. Ch. 113; 45 L. T. 485; 30 W. R.251 516, 525, 526 Reed v. Deere (1827)7 B. & C. 261; 2 C. & P. 624 619 Rees v. Williams (1875) L. R. 10 Ex. 200; 44 L: J. Ex. 116; 32 L. T. 462; 23 W. R. 550 630, 685 Reese River Silver Mining Co. v. Smith (1869) L. R. 4 H. L. 64; 39 L. J. Ch. 849 509, 516, 538 Reg. v. Aspinall (1876) 2 Q. B. Div. 48; 13 Cox, C. C. 230, 563 ; 46 L. J. M. C. 145; 36 L. T. 297; 25 W. R. 283 238 Reg. v. Cumberland (Justices of) (1848) 5 Railw. Ca. 332; 5 D. & L. 431 ; 17 L. J. Q. B.. 102; 12 Jur. 1025 153, 15*1 Reg. v. Doutre (1884) 9 App. Ca. 745 628 Reg. v. G. N. of Eng. Ry. Co. (1846) 9 Q. B. 315; 16 L. J. M. C. 16; 10 Jur. 755 : . . . . 114, 115 TABLE OF CASES. ' 63 [The paging refers to the ["] pages.] Reg. v. Holmes (1883) 12 Q. B. D. 23; 53 L. J. M. C. 37; 49 L. T. 540 . . P «43 Reg. v. Lord (1848) 12 Q. B. 757, 3 NewSess. Cas. 246; 17 L. J. M. C. 181; 12 Jur. 1001 . ... ' 55 Reg. v. Mayor of Stamford (1844) 6 Q. B. 433 ; L. J. big. 6,422'; 8 jur. 909 153 Reg. v. Middleton (1873) L. R. 2 C. C. K. 38; 12 Cox, C. C. 260, 417; 42 L. J. M. C. 73; 28 L. T. 777 4O Reg. v. Prince (1875) L. R. 2 C. C. R. 154; 13 Cox, C. C. 138;'44 L. J M C. 122; 32 L. T. 700; 24 W. R. 76 395 Reg. v. Reed (1880) 5 Q. B. Div. 483; 49 L. J. Q. B. 600; 42 L. T. : 835; 28 W. R. 787; 44 J. P. 633 121 Reg. v. Rowlands (1851) 17 Q. B. 671; 2 Den. C. C. 364; 5 Cox, C. C. 436; 21 L. J. M. C. 81; 16 Jur. 268 237 Reg v. Warburtou (1870) L. R. 1 C. C. R. 274; 11 Cox, C. C. 584; 40 L. j. M. C. 22; 23 L. T. 473; 19 W. R. 165 '■ 237 Reidpath's Case (1870) 11 Eq. 86; 40 L. J. Ch. 39; 23 L. T. 834; 19 AV. R. 219 641 Renals v. Cowlishaw (1878) 9 Ch. 1). 125; 11 Ch. Div. 866: 48 L. J. Ch. 830; 41 L. T. 116; 29 W. R. 9 '. . 226,230,231 Reuss v. Picksley (1866) L. R. 1 Ex. 342; 4 H. & C. 588; 35 L. J. Ex. 218; 15 L. T. 25; 12 Jur. N. S. 628; 14 W. R. 924 162 Reuter v. Electric Telegraph Co. (1856) 6 E. & B. 341; 26 L. J. 6. B. 46; 2 Jur. N. S. 1245 151 Reuter v. Sala (1879) 4 C. P. Div\ 239; 48 L. J. C. P. 492; 40 L. T'. 476; 27 W. R. 631 464 Reynard v. Arnold (1875) 10 Ch. 386 • 364 Reynell v. Sprye (1852) 1 D. M. G. 660; 21 L. J. Ch. 633 294, 295, §29, 337, 513, 514, 525, 528 Rhoades v. Bate (1866) 1 Ch. 252; 35 L. J. Ch. 267; 13 L. T. 778; 12 Jur. N. S. 178; 14 W. R. 292 . 565, 570, 596 Rice iv Gordon (1847) 11 Beav. 265 495, 573 Richards v. Delbridge (1874) 18 Eq. 11; 43 L. J. Ch. 459; 22 W. R. 584 . . 185 Richards v. Home Assurance Association (1871) L. R. 6 C. P. 591; 40 L. J. C. P. 290; 24 L. T. 752; 19 W. R. 893 32 Richardson v. Richardson (1867) 3 Eq. 686; 36 L. J. Ch. 653 185 Richardson is. Williamson (1871) L. R. 6 Q. B. 276; 40 L. J. Q. B. 145 . . 106 Riche v. Ashbury Ry. Carriage Co. (1874) L. R. 9 Ex. 224: 7 H. L. 653;. 43 L. J. Ex. 177; 31 L. T. 339; 23 W. R. 7; 19 Sol. J. 253 .. . 125, 126, 654, 661, 667 Ridgway i*. Sneyd (1854) Kay, 627 372 Ridgway v. Wharton (1856-7) 6 H. L. C. 238; 27 L. J. Ch. 46; 4 Jur. N. S. 173 42 Rigby v. Connol (1880) 14 Ch. D. 482; 49 L. J. Ch. 328; 42 L. T. 139; 28 W. R. 650 631 Ritchie v. Smith (1848) 6 C. B. 462; 18 L. J. C. P. 9; 13 Jur. 63 .... 256 Rivaz v. Gerussi (1880) 6 Q. B. Div. 222; 50 L. J. Q. B. 176; 44 L. T. 79 490 River Wear Commissioners v. Adamson (1877) 2 App. Ca. 743; 47 L. J. Q. B. 193; 37 L. T. 543 251 Roberts v. Berry (1853) 3 D. M. G. 284: 22 L. J. Ch. 398 463 Roberts v. Burv Commissioners (1869) L. R. 4 C. P. 755; 5 16. 310; 39 L. J. C. P. 129; 22 L. T. 132; 18 W. R. 702 380, 381 Roberts v. Smith (1859) 4 H. &. N. 315; 28 L. J. Ex. 164; 32 L. T. O. S. 320 44, 45 Robinson v. Bland (1760) 2 Burr. 1077; 1 W. Bl. 234, 256 340 Robinson v. Davison (1871) L. R. 6 Ex. 269; 40 L. J. Ex. 172; 24 L. T. 755; 19 W. R. 1036 189, 375, 376, 424 Robinson v. Mollett (1874-5) L. R. 7 H. L. 802; 44 L. J. C. P. 362; 33 L. T. 544 245 64 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Eobinson v. Ommanney (1883) 21 Ch. D. 780; 23 Ch. Div. 285; 52 L. J. Ch. 440; 49 L. T. 19; 31 W. R. 525 308 Eobinson v. Page (1826) 3 Euss. 114 457 Bobinson.Piekering (1881) 16 Ch. Div. 660; 50 L. J. Ch. 527; 44 L. T. 165; 29 W. E. 385 647, 649 Eobson v. Dodds (1869) 8 Eq. 301; 38 L. J. Ch. 647; 20 L. T. 941, 968; 17 W. B. 782 663 Eobson v. Drummond (1831) 2 B. & Ad. 303' 193. 422 Eoddam v. Morley (1856-7) 1 De G. & J. 1; 26 L. J. Ch. 438; 3 Jur. N. S. 449 598, 602 Eoe v. Tranmarr (1758) 2 Sm. L. C. 530; Willes, 632 455 Sogers v. Hadley (1863) 2 H. & C. 227; 22 L. J. Ex. 241 459 Eogers v. Ingham (1876) 3 Ch. Div. 351; 46 L. J. Ch. 322; 35 L. T. 677; 25 W. E. 338 408, 410 Eolfe v. Flow (1865) L. E. 1 P. C. 27; 3 Moore, P. C. C. N. S. 365; 35 L. J. P. C. 13; 12 Jur. N. S. 345; 14 W. R. 467 194 Eomford Canal Co., Be (1883) 24 Ch. D. 85: 52 L. J. Ch. 729; 49 L. T. 118 665 Eooke v. Lord Kensington (1856) 2 K. & J. 753; 25 L. J. Ch. 795; 2 Jur. N. S. 755 ' 455, 474 Eoper v. Howland (1835) 3 A. & E. 99; 4N. & M. 668; 1 H. & W. 167 . 633 Rose*;. Gould (1852) 15 Beav. 189 600 Eosewarne v. Billing (1863) 15 C. B. N. S. 316; 33 L. J. C. P. 55; 9 L. T. 441; 10 Jur. N. S. 496 259 Eosher v. Williams (1875) 20 Eq. 210; 44 L.'J. Ch. 419; 32 L. T. 387; 23 W. B. -561 176 VRossiter *. Miller (1878) 3 App. Ca. 1124; 48 L. J. Ch. 10; 39 L. T. 173 41, 162, 576 Eossiter v. "Walsh (1843) 4 Dr. &'W. 485 571 Eotherham Alum and Chemical Co., Be (1883) 25 Ch. Div. 103; 32 W. E. 131 203 Rousillon*. Eousillon (1880) 14 Ch. D. 351; 49 L. J. Ch. 339; 42 L. T. 679; 28 W. E. 623; 44 J. P. 663 316, 318 Ebyal British Bank v. Turquand (1856) 6 E. & B. 237; 25 L. J. Q. B. 317; 2 Jur. N. S. 663 149. 664, 665, 666 Eudge v. Bowman (1868) L. E. 3 Q. B. 689; 37 L. J. Q. B. 193 .. . 442, 447 Euffles v. Alston (1875) 19 Eq. 539; 44 L. J. Ch. 388; 32 L. T. 236; 23 "W. E. 465 268 EumbaU v. Metropolitan Bank (1877) 2 Q. B. D. 194; 46 L. J. Q. B. 346; 36 L. T. 240 ; 25 W. E. 366 220 Eussell v. Da Bandeira (1862) 13 C. B. N. S. 149; 32 L. J. C. P. 68; 7 L. T. 804; 9 Jur. N. S. 718 381 Eussell v. Eussell (1880) 14 Ch. D. 471 ; 49 L. J. Ch. 268; 42 L. T. 112 . 291 Eussell v. Thornton (1859) 4 H. & N. 788; 29 L. J. Ex. 9 26 Eussell v. Wakefield Waterworks Co. (1875) 20 Eq. 474; 44 L. J. Ch. 496; 32 L. T. 685; 23 W. E. 887 . . 664 Ryall v. Eowles (1749) 2 Wh. & T. L. C. 729; 1 Ves. 348; sub nom. Eyall v. Eolle. 1 Atk. 685 • '. . 287 Ryder v. Wombwell (1868) L. E. 3 Ex. 90; 4 ib. 32; 38 L. J. Ex. 8; 19 L. T. 491; 17 W. E. 167 67, 69, 70 Sackville-West v. "Viscount Holmesdale (1870) L. E. 4 H. L. 543; 39 L. J. Ch. 505 476 St. Alban v. Harding (1859) 27 Beav. 11 583 St. George v. Wake (1831-3) 1 My. & K. 610 247, 248 St. John v. St. John (1803-5) 11 Ves. 525 265 St: Leonards, Shoreditch (Guardians of) v. Franklin (1878) 3 C. P. D. 377; 47 L. J. C. P. 727; 39 L. T. 122; 26 W. E. 882 -.116 TABLE OF CASES. 65 [The paging refers to the [*] pages. 3 PAGE Sale t). Lambert (1874) 18 Eq. 1; 43 L. J. Ch. 470; 22 "W. R. 478 .... 162 Salomons v. Laing (1849) 12 Beav. 339 655, 669 Salter v. Bradshaw (1858) 26 Beav. 161 583 Sanders v. St. Neotes Union (1846) 8 Q. B. 810; 15 L. J. M. C. 104; 10 Jur. 566 ... . 152 Sanderson v. Aston (1873) L. R. 8 Ex. 73; 42 L. J. Ex. 64; 28 L. T. 35; 21 W. E. 293 . 241, 243 Sanderson v. Graves (1875) L. R. 10 Ex. 234; 44 L. J. Ex. 210; 33 L. T. 269; 23 W. R. 797 ' 611, 619, 639 Santos v. Illidge (1860) 6 C. B. N. S. 841; 8 ib. 861 ; 28 L. J. C. P. 317; 29 ib. 348; 6 Jur. N. S. 1348; 8 W. R. 705 . ... 340, 342, 685 Savage v. Tyers (1872) 7 Ch. 356 . . ... 452 Savery r. King (1856) 5 H. L. C. 627; 25 L. J. Ch. 482; 2 Jur. N. S. 503 565, 569 595 Saville v. Saville (1721) 1 P. Wms. 745 • - . . . ' 577 Savin v. Hoylake Ry. Co. (1865) L. R. 1 Ex. 9; 4 H. & C. 67; 35 L. J. Ex. 52; 13 L.-T. 374; 11 Jur. N. S 934; 14 W. R. 109 ... 260 Saxon Life Assurance Society, Be (1862) 2 J. & H. 408 408 Sayersii. Collyer (1884) 24 Ch. D. 180; 28 Ch. Div. 103; 52 L. J. Ch. 770; 48 L. T. 939; 32 W. R. 200; 47 J. P. 741 231 Scaltock i>. Harston (1875) 1 C. P. D. 106; 45 L. J. C. P. 125; 34 L. T. 130; 24 W. R. 431 224 Scarpellini v. Ateheson (1845) 7 Q. B. 864; 14 L. J. Q. B. 333, 9 Jur. 827 . 599 Schmaltz ». Avery (1851) 16 Q. B. 655; 20 L. J. Q. B. 228; 15 Jur. 291 108, 109 Scholefield r. Templar (1859) Johns. 155; 4 De G. & J. 429; 28 L. J. Ch. 452; 5 Jur. N. S. 619 547, 549 Scholey v. Central Ry. Co. of Venezuela (1867-8) 9 Eq. 266, n 537 Schotsmans v. Lancashire and Yorkshire Ry. Co. (1867) 2Ch. 332; 36 L. J. Ch. 361; 16 L. T. 189; 15 W. R. 537 . 401 Scotson v. Pegg (1861) 6 H. & N. 295; 30 L. J. Ex. 225 178 Scott v. Avery (1855-6) 5 H. L. C. 811; 25 L. J. Ex. 303; 2 Jur. N. S. 815 292 Scott v. Corp. of Liverpool (1858) 3 De G. & J. 334; 28 L. J. Ch. 236; 5 Jur. N. S. 104 . .293 Scott v. Gilmore (1810) 3 Taunt. 226 631 Scott v. Littledale (1858) 8 E. & B. 815; 27 L. J. Q. B. 201; 4 Jur. N. S. 849 • 431 Scott v. Lord Ebury (1867) L. R. 2 C. P. 255; 36 L. J. C. P. 161; 15 L. T. 506; 15 W. R. 517 107 Scott v. Pilkington (1862) 2 B. AS. 11; 31 L. J. Q. B. 81 21 Scott v. Tyler (1788) 2 Wh. & T. L. C. 115; 2 Bro. C. C. 431; 2 Dick. 712 308 Scottish N. E. Ry. Co. l>. Stewart (1859) 3 Macq. H. L. C. 382; 5 Jur. N. S. 607 659 Scottish Petroleum Co. (1883) 23 Ch. Div. 413; 49 L. T. 348; 31 W. R. 846 • 539, 697 Seager v. Aston (1857) 26 L. J. Ch. 809; 29 L. T. O. S. 223; 3 Jur. N. S. 481; 5 W. R. 548 . . 600 Seaton v. Grant (1867) 2 Ch. 459; 36 L. J. Ch. 638; 16 L. T. 758; 15 W. R. 420, 602 663 Seear v. Lawson (1880) 15 Ch. Div. 426; 49 L. J. Bk. 69; 42 L. T. 805, v 893; 28 W. R. 763, 929 295, 299 Selby v. Jackson (1843) 6 Beav. 192; 13 L. J. Bk. 249 . . . . 87 Seligman v. Le Boutillier (1866) L. R. 1 C. P. 681 ... '291 Selsey (Lord) v. Rhoades (1824) 2 Sim. & St. 41; 1 Bli. 1 571 Seton ». Slade (1802) 7 Ves. 265; 2 Wh. A T. L. C. 501 463 Sewell v. Royal Exchange Assurance Co. (1813) 4 Taunt. 856 330 Shadwell v. Shadwell (I860) 9 C. B. N. S. 159; 30 L. J. C. P. 145; 3 L. T. 628; 7 Jur. N. S. 311; 9 W. R. 163 178 •Shand w.Du Buisson (1874) 18 Eq. 283; 43 L. J. Ch. 508; 22 W. R. 483 . 651 5 PRINCIPLES OF CONTRACT. '6b TABLE OF CASES. .[The paging refers to ttieip] pages.] PAGE Shardlow v. Cotterell (1881) 20 Ch. Div. 90; .51 L. J. Oh. 353; 45 L. T. 572; 30 W. E. 143 162 Sharman v. Brandt (1871) L. R. 6 Q. B. 720; 40 L. J, Q. B. 312; 19 W. E. 936 109, 242 Sharp v. Leach (1862) 31 Beav. 491; 10 W. E. 878 570 Sharp v. Taylor (1849) 2 Ph. 801 283, 330, 334 Sharpe v. Foy (18(38) 4 Ch. 35; 19 L. T. 541; 17 W. R. 65 615 Sharpies v. Adams (1863) 32 Beav. 213 211 Sharpley v. Louth and East Coast Ey. Co. (1876) 2 Ch. Div. 663; 46 L. J. Ch. 259; 35 L. T. 71 537 Shattock v. Shattock (1866) 35 Beav. 489; 2 Eq. 182; 35 L. J. Ch. 509; 14 L. T. 452; 12 Jur. N. S. 405; 14 W. E. 600" 647, 651 Shaw's Claim (1875) 10 Ch. 177; 44 L. J. Ch. «70:; 33 L. T. 5; 23 W. E. 813 260 Shaw v. Foster (1872) L. R.' 5 H. L. 321; 42 L. J. Ch. 49; 27 L. T. 281; 20 W. R. 907 198 Shaw v. .Teffery (1860) 13 Moo. P. C. 432 . . . 241 Shaw t>. Thackray (1853) 1 Sm. & G. 537; 17 Jur. 1045 91 Shaw v. Woodcock (1827) 7 B. & C. 73 555, 609 Sheffield Nickel Co. *. Unwin (1877) 2 Q. B. D. 214; 46 L. J. Q. B.299; 36 L. T. 246; 25 W. E. 493 543 Sheppard v. Oxenford (1855) 1K.&J. 491; 25 L. T. 90; 3 W. E. 397 . . 334 Ship's Case (1865) 2 D. J. S. 544; L. E. 3 H. L. 343; 12 L. T. 256; 11 Jur. N. S. 331; 15 W. E. 599 432 Shrewsbury (Earl of) v. N. 'Staffordshire Ey. Co. (1865) 1 Eq. 593; 35 L. J. Ch. 156; 13 L. T. 648; 12 Jur. N. S. 63; 14 "W. E. 220 286 Shrewsbury & Birm. Ey. Co. v. L. & N. W. Ey. Co. (1853) 4 D. M. G. 115; 6 H. L. C. 113; 22 L. ,T. Ch. 682; 26 ib. 482; 17 Jur. 845; 3 Jur. N. S. 775 656, 659, 670 Shuey v. United States (1875) 2 Otto (92 TJ. S.) 73 . ... . 20, 22 Shnlter's Case (1611) 12 Co. Eep. 90 413 Sidenham v. Worlington (1595) 2 Leon. 224 170 Silber Light Co v. Silber (1879) 12 Ch. D. 717; 48 L. J. Ch. 385; 40 L. T. 96; 27 W. E. 427 664 Sillem v. Thornton (1854) 3 E. & B. 868; 2 C. L. E. 1710; 23 L. J. Q. B. 362; 18 Jur. 748 . . 492 Silliman v. United States (1879) 11 Otto (101 U. S.) 465 554 Simons v. G. W. Ey. Co. ^1857) 2 C. B. N. S. 620 415 Simons v. Patchett (1857) 7 E. & B. 568; 26 L. J. Q. B.195; 3 Jur. N. S. 742 106 Simpson v. Denison (1852) 10 Ha. 51 - . . . . 662 Simpson v. Eggington (1855) 10 Ex. 844; 24 L. J. Ex. 312 424 Simpson t. Lamb (1857) 7 E. & B. 84; 20 L. J. Q. B. 121; 3 Jur. N. S. 412 295, 298 Simpson v. Lord Howden (1837) 3 Mv. & Cr. 97 262 Simpson v. Lord Howden (1839) 2 P. & D. 714; 10 A. & E. 793; 9 CI. & Fin. 61; 3 Eailw. Ca. 294 286 Simpson v. Westminster Palace Hotel Co. (1860) 2 D. F. J. 141; 8 H. L. C. 712; 6 Jur. N. S. 985 , 656 Sims v. Bond (1833) 5 B. & Ad. 389; 2 N. & M. 608 . 101 Sismey v. Eley (1849) 17 Sim. 1; 18 L. J. Ch. 350; 13 Jur. 480 263 Skeate v. Beale (1840) 11 A. & E. 983; 3 P. & D. 597; 4 Jur. 766 ... . 554 Skeet b. Lindsay (1877) 2 Ex. D. 314; 46 L. J. Ex. 249; 36 L. T. 98; 25 W. E. 322 601 Skidmoreo. Bradford (1869) 8 Eq. 134; 17 W. E. 1056 694 Skilbeck v. Hilton (1866) 2 Eq. 587; 14 W. R. 1017 462, 543 Skillett v. Fletcher (1866) L. E. 1 C. P. 217; 2 ib. 469; 36 L. J. C. P. 206; 16 L. T. 426; 15 W. E. 876 242- TABLE OF CASES. 67 [The paging refers to the [*] pages.] PAGE Skottowe v. Williams (1861) 3 D. F. J. 535; 3 L. T. 576; 7 Jur. N. S. 118 550 Skyring v. Greenwood (1825) 4B.&C. 281; 1 C. & P. 517;- 6 D. & R. 401 409 Slade's Case (1596) 4 Co. Rep. 91 a : 144 Slark u. Highgate Archway Co. (1814) 5 Taunt. 792 219, 657 Slator v. Brady (1863) 14 Ir. C. L. 61 55, 78 Slator v. Trimble (1861) 14 Ir. C. L. 342 59 Slim v. Croucher (1860) 1 D. F. J. 518; 29 L. J. Ch. 273; 1 L. T. 396; 6 Jur. N. S. 189; 8W. R. 233 516,517,699 Slomant'. Walter (1784) 2 Wh & T. L. C. 1112; 1 Bro. C. C. 418 ... . 467 Smart r. West Ham Union (1855) 10 Ex. 867; 11 ib. 867; 3 C. L. R. 696; 24 L. J. Ex. 201; 25)6.210 153 Smethurst v. Mitchell (1859) 1 E. & E. 622; 28 L. J. Q. B. 241; 5 Jur. N. S. 978; 7 W. R. 74 102 Smith's Case (1867) 2 Ch. 604 509, 517, 529, 533 Smith'sCase (1869) 4 Ch. 611; 38 L. J. Ch. 681; 21 L. T. 97; 17 W. R. 941 616 Smith i\ Anderson (1880) 15 Ch. Div. 247; 50 L. J. Ch. 39; 43 L. T. 329; 29 W. R. 21 683 Smith v. Bromley (1760) 2 Doug. 696, n 336 Smith v. Brown (1871) L. R. 6 Q. B. 729; 40 L. J. Q. B. 214; 24 L. T. 808; 19 W. R. 1165 523 Smith v. Cartwright (1851) 6 Ex. 927; 20 L. J. Ex. 401 153 Smith v. Chadwick (1884) 20 Ch. Div. 27; 9 App. Ca. 187; 51 L. J. Ch. 597; 46 L. T. 702; 38 W. R. 661 .... . 524, 528 ' Smith v. Clarke (1806) 12 Ves. 483 518 Smith v. Cuff (1817) 6 M. & S. 160 336 Smith v. Eggington (1874) L. R. 9 C. P. 145; 43 L. J. C. P. 140; 30 L. T. 521 224 Smith v. Hughes (1871) L. R. 6 Q. B. 597; 40 L. J. Q. B. 221; 25 L. T. 329; 19 W. R. 1059 412, 438, 439, 447, 514, 527 Smith i;. Iliffe (1875) 20 Eq. 666; 44 L. J. Ch. 755; 33 L. T. 200; 23 W. R. 851 476 Smith v. Kay (1859)7 H. L. C. 750 524, 528, 557, 558, 570, 573 Smith v. Land and House Property Corporation (1884) 28 Ch. Div. 7; 49 L T 532 502 Smith i. Lindo (1858) 4 C. B. N.S. 395;Y«. 587; 27 L. j. C. p! 196, 335; ' 4 Jur. N. S. 974 257, 683 Smith v. Lucas (1881) 18 Ch. Div. 531; 45 L. T. 460; 36 W. R. 451 . . 58 Smith v. Mawhood (1845) 14 M. & W. 452; 15 L. J. Ex. 149 257 Smith v. Neale (1857) 2 C. B. N. S. 67; 26 L. J. C. P. 143; 3 Jur. N. S. 516 161, 162 Smith v. Walton (1877) 3 C. P. D. 109; 47 L. J. M. C. 45; 37 L. T. 437 . 686 Smith v. Webster (1876) 3 Ch. Div. 49; 45 L. J. Ch. 528; 35 L. T. 44; 24 W. R. 894 39 Smith v. Wheatoof* (187 8) 9 Ch. D. 223; 47 L. J. Ch. 745; 39 L. T. 103; 27 W. R. 42 420 Smith v. White (1866) 1 Eq. 626; 35 L. J. Ch. 454; 14 L. T. 350; 14 W. R. 510 323 1 Smout v. Ilbery (1842) 10 M. & W. 1 516 Smurthwaite v. Wilkins (1862) 11 C. B. N. S. 842; 31 L. J. C. P. 214; 5 L. T. 842; 10 W. R. 386 . . 227 Smyth v. Griffin (1842) 13 Sim. 245; 14 L. J. Ch. 28 262 Society of Practical Knowledge u. Abbott (1840) 2 Beav. 559 ... . 117, 118 Sommersett's Case (1771-2) 20 St. T. 1 319, 340 Sottomavor v. De Barros (1877) 3 P. Div. 1; 5 P. D. 94; 47 L. J. P. 23; 37 L. T. 415; 26 W. R. 455 ... 250 Souch v Strawbridge (1846) 2 C. B. 808; 15 L. J. C. P. 170; 10 Jur. 357 . 611 South of Ireland Colliery Co. v. Waddle (1868) Li. R. 3 C. P. 463; 4 C. P. 617; 38 L. J. C. P. 338; 17 W. R. 896 149 South Wales Ry. Co. v. Redmond (1861) 10 C. B. N. S. 675; 4 L. T. 619; 9 W. R. 806 659 68 • TABLE OF CASES. [The paging refers to the [»1 pages.] PAGE South Yorkshire, &c. Co. v. G. N. R. Y. Co. (1853) 9 Ex. 55; 22 L. J. Ex. 305 657, 662 Soiithall v. Rigg (1851) 11 C. B. 481 ; 20 L. J. C. P. 145; 15 Jur. 706 . 409, 584 Southampton, Lord, <>. Brown (1827) 6 B. & C. 718 98, 200 Southey v Sherwood (1817) 2 Mer. 435 .... • ... 269 Southwell v. Bowditeh (1876) 1 C. P. Div. 100, 374; 45 L. J. C. P. 374, 630; 35 L. T. 196; 24 W. R. 275,838 99 Speckman v. Evans (1868) L. R. 3 H. L. 171; 34 L. J. Ch. 321 . ... 668 Sparenburgh a. Bannatyne (1797) 1 B. & P. 163; 2 Esp. 580 ... .280 Sparling!;. Brereton (1866) 2 Eq. 64; 35 L. J. Ch. 461; 14 L. T. 166; 12 Jur. N. S. 330 . . 622 Spears v. Hartly (1800) 3 Esp. 81 600 Spedding », Nevell (1869) L. R. 4 C. P. 212; 38 L. J. C. P. 133 106 Spence v. Chodwick (1847) 10 Q. B. 517, 16 L. J. Q. B. 313; 11 Jur. 872 362 Spencer's Case (1583) ISni. L. C. 60; 5 Coke, 16 224 Spencer v. Harding (1870) L. R. 5 C. P. 561; 39 L. J. C. P. 332; 23 L. T. 237; 19 W. R. 48 13, 17, 19 Spiller v. Paris Skating Rink Co. (1878) 7 Ch. D. 368; 26 W. R. 456 .. . 107 Splidt v. Bowles (1808) 10 East 279 224 Sprott v. United States (1874) 20 Wallace (Sup. Ct. U. S.) 459 ... 281, 325 Sprye v. Porter (1856) 7 E. & B. 58; 26 L. J. Q. B. 64; 3 Jur. N. S. 330 . 293, 295 296 Spun- v. Cass (1870) L: R. 5 Q. B. 656; 39 L. J. Q. B. 249; 23 L. T. 409 109, 204 Squire v. Whitton (1848) 1 H. L. C. 333; 12 Jur. 125 190, 494 « Stafford (Mayor of) v. Till (1827) 4 Bing. 75; 12 Moore, 260 . . . . 154 Stahlschmidt v. Lett (1853) 1 Sm. & G. 415 600 Stanley v. Dowdeswell (1874) L. R. 10 C. P. 102; 23 W. R. 389 . . . . 39 Stanley v. Jones (1831) 7 3ing. 369 295,296 Stanton v. Tattersall (1853) 1 Sm. & G. 529; 1 Jur. 967: 1 W. R. 502 440, 501 Stedman v. Hart (1854) Kay, 607; 23 L. J. Ch. 908; 18 Jur. 744; 2 W. R. 462 88 Steed v. Calley (1836) 1 Kee. 620 570 Steele v. Harmer (1845) 14 M. & W. 831; 4 Ex. 1 • .... 129 Steele v. Williams (1853) 8 Ex. 625 ; 22 L. J. Ex. 225 ; 17 Jur. 464 . . 555 Stephens v. Venables (1862) 30 Beav. 625 212 Sterry v. Clifton (1850) 9 C. B. 110; 19 L. J. C. P. 237 ; 14 Jur. 312 . . 286 Stevens v. Benning (1854) 1 K. & J. 168; 6 D. M. G. 223 ; 24 L. J. Ch. 153 ; 1 Jur. N. S. 74 189, 426 Stevens v. Biller (1883) 25 Ch. Div. 31 ; 53 L. J. Ch. 249 ; 50 L. T. 36 ; 32 W. R. 419 . . . 101 Stevens v. Gourley (1859) 7 C. B. N. S. 99 ; 1 F. & F. 498 ; 29 L. J. C. P. 1 ; 1 L. T. 33 ; 6 Jur. N. S. 147 • . . . . • 256 Stevenson v. MacLean (1880) 5 Q. B. D. 346 ; 49 L. J. Q. B. 701 ; 42 L. T. 897 ; 28 W. R. 916 26, 30 Stevenson v. Newnham (1853) 13 C. B. 285 ; 22 L. J. C. P. 110 ; 17 Jur. 600 544 Stewart's Case (Agriculturists' Cattle Ins. Co.) (1866) 1 Ch. 511 ; 14 L. T. 841 ; 12 Jur. N. S. 611 ; 14 W. R. 954 668 Stewart's Case (Russian Tyksounsky Ironworks) (1866) 1 Ch. 574 ; 14 L. T. 817 432 Stewart v. Alliston (1815) 1 Mer. 26 432 Stewart v. Eddowes (1874) L. R. 9 C. P. 311 ; 43 L. J. C. P 204 ; 30 L. T. 333 ; 22 W. R. 534 162, 451 Stewart v. Stewart (1839) 6 CI. & Fin. 911 407, 444 Stikeman v. Dawson (1847) 1 De G. & Sm. 90 ; 16 L.. J. Ch. 205 ; 11 Jur. 214 74, 77 Stilwell r. Wilkins (1821) Jac. 280 574 Stockdale v. Onwhyn (1826) 5 B. & C. 173 ; 7 D. & R. 625 ; 2 C. & P. 163 269 Stocks v Dobson (1853) 4 D. M. G. 11 ; 22 L. J. Ch. 884 ; 17 Jur. 539 . . 210 TABLE OF CASES. 69 [The paging refers to the [*] pages.] PAGK Stone v. City and County Bank (1877) 3 C. P. Div. 282 ; 47 L. J. C. P. 681 ; 38 L. T. 9 546 Stone v. Godfrey (1854) 5 D. M. G. 76 ; 22 L. T. 208 ; 18 Jur. 162, 524 : 2 W. E. 118 407 Stonor's Trusts, Be (1883) 24 Ch. D. 195 ; 52 L. J. Ch. 776 ; 48 L. T. 963 85 Storey s. Waddle (1879) 4 Q. B. Div. 289 ; 27 W. E. 833 . . . . 450, 478, 552 Storm v. Stirling (1854) 3 E. & B. 832 ; 23 L. J. Q. B. 298 ; 17 Jur. 788 ; S. C. sub nam. Cowie v. Stirling, 6 E. & B. 333 ; 25 L. J. Q. B. 335 , 2 Jur. N. S. 663 205 Strange v. Brennan (1846) 15 Sim. 346 ; 2 C. P. Cooper (temp. Cottenham) 1 ; 15 L. J. Ch. 389 ; 10 Jur. 649 295, 297 Stray v. Eussell (1859) 1 E. & E. 888 ; 28 L. J. Q. B. 279 ; 29 ib. 115 ; 6 Jur. N. S. 168 : 8 W. E. 240 357 Street. t>. Blay (1831) 2 B. & Ad. 456 428 Street v. Eigby (1802) 6 Ves. 815 291 Stribley v. Imperial Marine Insurance Co. (1876) 1 Q. B. D. 507 ; 45 L. J. ' Q. B. 396 ; 34 L. T. 281 ; 24 W. E. 701 490 Strickland v. Turner (1852) 7 Ex. 208 ; 22 L. J. Ex. 115 442 Stubbs v. Holjwell Ey. Co. (1867) L. E. 2 Ex. 311 ; 36 L. J. Ex. 166 ; 15 W. E. 869 379 Stump v. Gaby (1852) 2 D. M. G. 623 ; 22 L. J. Ch. 352 ; 20 L. T. 0. S. 213 ; 17 Jur. 5 ; 1 W. E. 85 595 Sturge v. Starr (1833) 2 My. & K. 195 529 Sturge v. Sturge (1849) 12 Beav. 229 ; 19 L. J. Ch. 17 ; 14 Jur. 159 .. . 574 Sturlyn v. Albany (1588) Cro. Eliz. 67 172 Sullivan v. Mitcalfe (1880) 5 C. P. Div. 455 ; 49 L. J. C. P. 815 ; 44 L. T. 8 ; 29 W. E. 181 ....... ' 510 Summers v. Griffiths (1866) 35 Beav. 27 573 Surcome v. Pinniger (1853) 3 D. M. G. 571 ; 22 L. J. Ch. 419 ; 17 Jur. 196 613 Sussex Peerage Case (1844) 11 CI. & Fin. 85 ; 8 Jur. 793 251, 254 Sutton's Hospital Case (1612) 10 Co. Eer>. 23 a 653, 655, 660, 670 Swaisland v. Dearslev (1861) 29 Beav. 430 . . ' .500 Swan, Ex parte (1868) 6 Eq. '344 ; 18 L. T. 230 ; 16 W. E. 560 221 Swan v. North British Australasian Co. (1863) 2 H. C. 184 ; 31 L. J. Ex. 425 ; 32 ib. 273 ; 10 Jur. N. S. 102 ; 11 W. E. 862 218, 414, 415 Swansea Friendly Society, Ex parte (1879) 11 Ch. D. 768 ; 48 L. J. Ch. 577 ; 27 W. E. 596 114 Sweet v. Lee (1841) 3 M. & Gr. 452 ; 4 Scott, N. E. 77 609 Swift v. Jewsbury (1874) L. E. 9 Q. B. 301, 560 531 Swift v. Kelly (1835) 3 Knapp, P. C. 257 511, 519 Swift v. Swift (1865) 34 L. J. Ch. 209, 394 ; 11 L. T. 697 ; 12 ib. 435 ; 11 Jur. N. S. 458 ; 13 W. E. 731 305 Swift v. Tyson (1842) 16 Peters, 1 218 Swift v. Winterbotham (1873)' L. E. 8 Q. B. 244 ; 42 L. J. Q. B. Ill ; 28 L. T. 339 ; 21 W. E. 562 ; 17 Sol. J. 341, 592 533 Swindon Waterworks Co. v. Wilts and Berks Canal Navigation Co. (1875) L E. 7 H. L. 697 ; 45 L. J. Ch. 638 ; 33 L. T. 513 ; 24 W. E. 284 .. . 124 Swire v. Francis (1877) 3 App. Ca. 106 ; 47 L. J. P. C. 18 ; 37 L. T. 554 . 531 Swire v. Eedman (1876) 1 Q. B. D. 536 ; 35 L. T. 470 ; 24 W. E. 1069 . 243 Sykes v. Beadon (1879) 11 Ch. D. 170 ; 48 L. J. Ch. 522; 40 L. T. 243 ; 27 W. E. 464 235, 683 Sykes v. Chad wick (1873) 18 Wallace (Sup. Ct. U. S.) 141 173 Symes v. Hughes (1870) 9 Eq. 475; 39 L. J. Ch. 304; 22 L. T. 462 ... 336 Taite v. Gosling (1879) 11 Ch. D. 273; 48 L. J. Ch. 397; 40 L. T. 251 ; 27 W. E. 394 225 Talbot v. Staniforth (1861) 1 J. & H. 484; 9 W. E. 827 569 70 TABLE OP CASES. [The paging refers to the [*] pages. ] PAGE Tamplin v. James (1880) 15 Ch. Div. 215; 43 L. T. 520 . . 432, 435, 436, 575 Tappenden v. Eandall (1801) 2 B. & P. N. E. 467 . . 335 Tasker v. Small (1837) 1 My. & Cr. 63 193 Tate v. Williamson (1866) 1 Eq. 528; 2 Ch. 55; 15 L. T. 549; 15 W. E. 321 559, 566, 571 Tayloe v. Merchants' Fire Insurance Co. (1850) 9 How. S. C. 390 ... . 642 Taylor, Ex parte (1856) 8 D. M. G. 254 60,63 Taylor v. Ashton (1843) 11 M. & W. 401; 12 L. J. Ex. 363 515, 516 Taylor v. Bowers (1876) 1 Q. B. Div. 291; 46 L. J. Q. B. 39; 34 L. T. 938; 24 W. E. 499 335 Taylor v. Brewer (1813) 1 M. &' S. 290 . ............ 44 Taylor r. Caldwell (1863) 3 B. & S. 826; 32 L. J. Q. B. 164; 8 L. T. 356; 11 W. E. 726 362, 363, 367, 375, 378, 386, 389 Taylor v. Chester (1869) L. E. 4 Q. B. 309; 38 L. J. Q. B. 225; 21 L. T. 359 332 Taylor v. Chichester and Midhurst Ey. Co. (18671 L. E. 2 Ex. 356; 4 H. L. 628; 39 L. J. Ex, 217; 23 L. T. 657 125, 348, 658, 669 Taylors Crowland Gas Co. (1854) 10 Ex. 293; 2 C L. E. 1247; 23 L. J. Ex. 254; 18 Jur. 913 .- 256 Taylor v. Johnston (1882) 19 Ch. D. 603; 51 L. J. Ch. 879; 46 L. T. 219; 30 W. E. 508 570 Taylor v. Jones (1875) 1 C. P. D. 87; 45 L. J. C. P. 110; 34 L. T. 131 . 643 Taylor v. Lendey (1807) 9 East, 49 334 Taylor v. Manners (1865) 1 Ch. 48; 35 L. J. Ch. 128; 13 L. T. 388; 11 Jur. N. S. 986; 14 W. E. 154 , 174 Taylor v. Meads (1865) 4 D. J. S. 597; 34 L. J. Ch. 203; 11 Jur. N. S. 166; 13 W. E. 394 646 Taylor v. Parry (1840) 1 M. Gr. 604; 1 Scott, N. B. 576 193 Taylor v. Portington (1855) 7 D. M. & G. 328; 3 Eq. 781; 1 Jur. N. S. 1057 43 Taylor v. Pugh (1842) 1 Ha. 608 ... . ... 248 Tenant v. Elliott (1797) 1 Bos. & P. N. E. 3 334 Tennent ». City of Glasgow Bank (1879) 4 App. Ca, 615; 40 L. T. 694; 27 W. E. 694 . . . 547 Tennent v. Tennents (1870) L. E. 2 Sc. & D. 6 573 "Teutonia," The (1872) L. E. 4 P. C. 171; 8 Moo. P. C. C. N. S. 411; 41 L. J. Adm. 57; 26 L. T. 48; 20 W. E. 421 374 Texas v. White (1868) 7 Wallace (Sup. Ct. U. S.) 700 281 Thacker v. Key (1869) 8 Eq. 408 310 Thames Haven, &c. Co. v. Hall (1843) 5 M. & Gr. 274; 6 Scott, SL E. 342; 3 Eailw. Ca. 441; 7 Jur. 238 „ .... 153 Thiedemann v. Goldschmidt (1859) 1 D. F. J. 4; 1 L. T. 50; 8 W. E. 14 218 Thiis v. Byers 11876) 1 Q. B. D. 244; 45 L. J. Q. B. 511; 34 L. T. 526; 24 W. E. 611 . 360 Thomas v. Brown (1876) 1 Q. B. D. 714; 45 L. J. Q. B. 811; 35 L. T. 237; 24 W. E. 821 609 Thomas v. Davis (1757) 1 Dick. 301 .461 Thompson v. Hudson (1869) L. E. 4 H. L. 1; 38 L. J. Ch. 431 ... .466 Thompson v. Planet Benefit Building Society (1873) 15 Eq. 333 . . 292 Thompson v. Powles (1828) 2 Sim. 194 . . 281 Thompson v. Universal Salvage Co. (1848) 1 Ex. 694; 5 D. & L. 380; 17 L. J. Ex. 118 129 Thompson v. Whitmore (1860) 1 J. & H. 268 474 477 Thomson v. Davenport (1829) 2 Sm. L. C. 377; 9B. & C. 78 '97 Thomson v. Eastwood (1877) 2 App. Ca. 215 551 Thomson v. Weems (1884) 9 App. Ca. 671 491 Thorn v. Mayor of London (1876) L. E. 9 Ex. 163; 10 ib. 112; 1 App. Ca. 120; 45 L. J. Ex. 487; 34 L. T. 545; 24 W. E. 932 361 Thornborow v. Whitacre (1706) 2 Ld. Eaym. 1164 ... 353 Thornton v. Illingworth (1824) 2 B. & C. 824; 4 D. & E. 545 54 TABLM OP CASES. 71 tThe paging refers to the [*] pages. ] _ _ , PAGE Thornton v. Kempster (1814) 5 Taunt. 786 . . 434 Thoroughgood's Case (1581-2) 2 Co. Rep. 9 b 413, 416, 417 Thursby v. Plant (1668) 1 Wms. Saund. 277; 1 Lev. 259; 1 Sid. 401; 1 Vent. 10; 2 Keb. 439 . . . . .224 Tichener, Be (1865) 35 Beav. 317 7 208 Tilleyi-. Thomas (1867) 3 Ch. 61; 17 L. T. 422; 16 W. E. 166; 12 Sol. J. 420 ' . 463 Toker v. Toker (1863) 31 Beav. 629; 3 D. J. S. 487; 32 L. J. Ch. 322 . 563 Topham v. Moreeraft (1858) 8 E. & B. 972; 4 Jur. N. S. 611 ...:.< 633 Torrance v. Bolton (1872) 8 Ch. 118; 42 L. J. Ch. 177; 27 L. T. 738; 21 W. B. 134 .... . 440, 441, 498, 501. 502 Torre o. Torre (1853) 1 Sm. & G. 518; 21 L. T. O. S. 71; 1 W. R. 490 ' 476 Tottenham v. Emmet (1865) 12 L. T. 838; 14 W. E. 3 580 Tottenham v. Green (1863) 1 N. E. 466; 32 L. J. Ch. 201 . . . 587, 588, 594 Totterdell v. Fareham Brick Co. (1866) L. R. 1 C. P. 674; 35 L. J. C. P. - 278; 12 Jur. N. S. 901; 14 W. E. 919 665 Touches. Metropolitan Ey. "Warehousing Co. (1871) 6 Ch. 671; 40 L. J. Ch. 496 203 Townsend's Case (1871) 13 Eq. 148; 41 L. J. Ch. 198; 25 L. T. 692; 20 W. E. 164 641 Townsend .-. Crowdy (1860) 8 C. B. N. S. 477; 29 L. J. C. P. 300; 2 L. T. 537; 7 Jur. N. S. 71 . . . . •. 405 Townshend v. Stangroom (1801) 6Ves. 328 468,473 Traill v. Baring (1864) 4 D. J. S. 318; 3 N. R. 681; 10 L. T. 215; 10 Jur. N. S. 377; 12. W. R. 678 528, 097 Trigge v. Lavallee (1864) 15 Moo. P. C. 270; 8 L. T. 154; 9 Jur. N. S. 261; 11 W. E. 404 182 Trimble v. Hill (1879) 5 App. Ca. 342; 49 L. J. P. C. 49; 42 L. T. 103; 28 W.'E. 479 . . 259, 335, 685 Tristu. Child (1874) 21 Wall. /Sup. Ct. IT. S.) 441 285 Trueman v. Loder (1840) 11 A. & E. 589 ; 3 P. & D. 567 96 Trumper v. Trumper (1873) 14 Eq. 295; 8 Ch. 870; 42 L. J. Ch. 641; 29 L. T. 86; 21 W. E. 692 . ... 245 Tulk r. Moxhay (1848) 2 Ph. 774 229 Tullett v. Armstrong (1838) 4 My. & Cr. 393; 1 Beav. 1 648 Turner v. Collins (1871) 7 Ch. 329; 41 L. J. Ch. 558; 2S L. T. 779; 20 W. E. 305 • 477, 559, 595 Turner v. Harvey (1821) Jac. 169 447 Turner v. Eeynall (1863) 14 C. B. N. S. 328; 32 L. J. C. P. 164: 8 L. T. 281; 9 Jur. N. S 1077; 11 W. E. 700 624 Tweddell ». Tweddell (1822) Turn. & R. 1 568 Tweddell v. Atkinson (1661) 1 B. &S. 393; 30 L. J. Q. B. 265; 4 L. T. 468; 8 Jur. N. S. 332; 9 W. E. 781 201 Twisleton v. Griffith (1716) 1 P. Wms. 309; 2 Eq. Ca. Ab. 510 . . . . 581 Two Sicilies, King of, v. Wilcox (1850) 1 Sim. N. S. 334; 19 L. J. Ch. 488; 14 Jur. 751 ." • ■ -116 Twycross v. Grant (1877) 2 C. P. Div. 469; 46 L. J. C. P. 646; 36 L. T. 812; 25 W. E. 701 510 Tyler i). Yates (1871) 11 Eq. 265; 6 Ch. 665; 40 L. J- Ch. 768; 25 L. T. 284; 19 W. E. 909 584, 585 Udell v. Atherton (1861) 7 H. & N. 172; 30 L. J. Ex. 337; 4 L. T. 797; 7 Jur. N. S. 777 512 Underhill v. Horwood (1804) 10 Ves. 209 . .573 Underwood v. Hitchcox (1749) 1 Ves. sen. 279 577 Ungley v. Ungley (1877) 5 Ch. Div. 887; 46 L. J. Ch. 854; 37 L. T. 52; 25 W. E. 733 536, 611 72 TABLE OP CASES. [The paging refers to the [* ] pages. J PAGE Unity Bank. Ex parte (1858) 3 De (Z. & J. 63; 27 L. J. Bk. 33; 4 Jur. N. S. 1257 78 Universal Life Assurance Co., Ex paHe (1870) 10 Eq. 458; 39 L. J. Ch. 829; 23 L. T. 639; 18 W. E. 1082 215 Upperton v. Nickolson (1871) 6 Ch. 436; 40 L. J. Ch. 401; 25 L. T. 4; 19 W. E. 733 '. . 465 Urquhart v. MacPherson (1878) 3 App. Ca. 831 543 Vallance *. Blagden (1884) 26 Ch. D. 353; 50 L. T. 474; 32 W. E. 918 . .-263 Vansittart v. Vansittart (1858) 4 K. & J. 62; 2 De G. & J. 249; 27 L. J. Ch. 222, 289; 4 Jur. N. S. 276, 519 83, 265, 305 Vaughan v. Thomas (1783) 1 Bvo. C. C. 556 578 Vaughan v. Vanderstegen (1853) 2 Drew. 165; 2 "W. K. 293 . . . v . . 647 Vaughan «. Walker (] 857) 6 Ir. Ch. 471; 8ii.v458 652 Veitch v. Eussell (1842) 3 Q. B. 928; 3 G. & D. 198;' Car. & M. 362; 11 L. J. Q. B. 286; 12 ib. 13; 7 Jur. 60 623,626 Vernon v. Keys (1810) 12 East, 632; 4 Taunt. 488 522, 523 Vigers v. Pike (1840-2) 8 CI. & F. 562 543 Voisey, Ex parte (1882) 21 Ch. Div. 442; 52 L. J. Ch. 121; 47 L. T. 362; 31 W. E. 19 255 Vorley v. Cooke (1857) 1 Giff. 230; 27 L. J. Ch. 185; 30 L. T. O. S. 146; 4 Jur. N. S. 3 416 W. v. B. (1863) 32Beav. 574 . . . ■ 338 Waddell v. Blockey (1879) 4 Q. B. Div. 678; 48 L. J. Q. B. 517; 41 L. T. 458; 27 W. E. 938 543 Wain v. Warlters (1804) 5 East, 10; 1 Sm. L. C. 299 162 Waite v. Jones (1835) 1 Bing. ST. C. 656; 1 Scott, 730; 1 Hodges, 166 . . 321 Wake v. Harrop (1861-2) 6H.&N. 768; 30 L. J. Ex. 273; 4 L. T. 555; 7 Jur. N. S. 710: 9 W. E. 788; affirmed, 1 H. & C. 202; 31 L. J. Ex. 451; 8 Jur. N. S. 845 458 Wakefield v. Newbon (1844) 6 Q. B. 276; 13 L. J. Q. B. 258; 8 Jur. 735 . 555 Waldy v. Gray (1875) 20 Eq. 238; 44 L. J. Ch. 394; 31 L. T. 531; 23 W. E. 676 ♦ ' .... 398 Walford v. Duchess of Pienne (1796) 2 Esp. 554 82 Walker v. Perkins (1764) 3 Burr.. 1568; 1 W. Bl. 517 262 Walker v.. Smith (1861) 29 Beav. 394 560 Wall's Case (1872) 15 Eq. 18; 42 L. J. Ch. 372; 17 Sol. J. 782 . . .• 642 Wallace v. Wallace (1842) 2 Dr. & W. 452 569 Wallis v. Day (1837) 2 M. & W. 273; Mur. & H. 222> 1 Jur. 73 . . . 316, 319 Wallis v.' Smith (1882) 21 Ch. Div. 243; 52 L. J. Ch. 145; 47 L. T. 389; 31 W. E. 214 459, 467 Walsh v. Bishop of Lincoln (1875) L. E. 10 C. P. 518; 44 L. J. C. P. 244; 32 L. T. 471; 23 W. E. 829 684 Ward v. Bank of New Zealand (1883) 8 App. Ca. 755; 52 L. J. P. C. 65; 49 L. T. 315 243 Warden v. Jones (1857) 2 De G. & J. 76; 27 L. J. Ch. 190; 4 Jur. N. S. 269 614, 615 Waring's Case (1815) 19 Ves. 344 197 Warlow v. Harrison (1858-9) 1 E. & E. 295, 309; 28 L. J. Q. B. 18; 29 ib. 14 15. 18 Warne v. Eoutledge (1874) 18 Eq. 497; 43 L. J. Ch. 604; 30 L. T. 857; 22 ' W. E. 758 , 650 Warner v. Willington (1856) 3 Drew. 523; 25 L. J. Ch. 662; 2 Jur. N. S. 433 46 Warrender v. Warrender (1835) 2 CI. & Fin. 488 265 TABLE -OF CASES. 73 [The paging refers to the [*] pages.] _ PAGE Warrmer v. Rogers (1873) 16 Eq. 340; 42 L. J. Ch. 581; 28 L. T. 863; 21 W. R. 766 185 Warwick v. Bruce (1813) 2 M. & S. 205; 6 Taunt. 118 54, 57 Warwick v. Richardson (1842) 10 M. & W. 284 238 Wason v. Wareing (1852) 15 Beav. 151 409 Waterhduse v. Jamieson (1870) L. R. 2 Sc. & D. 29 546 Watford and Rickmansworth Ry. Co. v. L. & N. W. Ry. Co. (1869) 8 Eq. 231; 38 L. J. Ch. 449; 21 L. T. 81; 17 W. R. 814 292 Watkins v. Rymill (1883) 10 Q. B. D. 178; 52 L. J. Q. B. 121; 48 L. T. 426; 31 W. R. 337; 47 J. P. 357 47 Watson, Ex parte (1809) 16 Ves. 265 77 Watson r. Allcock (1853) 4 D. M. G. 242; 22 L. J. Ch. 858; 21 L T. O. S. 204; 17 Jur. 568; 1 W. R. 399 174, 243 Watson v. Earl of Charleniont (1848) 12 Q. B. 856; 18 L. J. Q. B. 65; 13 Jur. 117 528 Watson v. Marston (1853) 4 D. M. G-. 230; 1 W. R. 362 468, 576, 577 Watson v. Mid-Wales Ry. Co. (1867) L. R. 2C. P. 593; 30 L. J. C. P. 285 212 Watts v. Porter (1854) 3 E. & B. 743; 2 C. L. R. 1553; 23 L. J. Q. B. 345; 1 Jur. N. S. 133 212 Waugh o. Morris (1873) L. R. 8 Q. B. 202; 42 L. J. Q. B. 57; 28 L. T. 265; 21 W. R. 438 329, 330, 347, 348 Way's Trusts (1864) 2 D. J. S. 365; 34 L. J. Ch. 49; 11 L. T. 495; 10 Jur. N. S. 1166; 13 W. R. 149 564 Way v. East (1853) 2 Drew. 44; 2 Eq. 275; 23 L. J. Ch. 109; 22 L. T. O. S. 192; 2 W. R. 114 . 330 Way v. Hearn (1862) 11 C. B. N. S. 774; 13 ib. 292; 32 L. J. C. P. 34 495, 534 Wayniellfl. Reed (1794) 5T. R. 599 282 Weaver, Be (1882) 21 Ch. Div. 615; 48 L. T. 93; 31 W. R. 224; -47 J. P. 68 . . 88 Webb v. Heme Bay Commissioners (1870) L. R. 5 Q. B. 642; 39 L. J. Q. B. 221; 22 L. T.'745; 19 W. R. 241 131, 214, 216 Webb v. Hewitt (1857) 3 K. & J. 438 242 Webb i). Hughes (1870) 10 Eq. 281; 39 L. J. Ch. 606; 18 W. R. 749 .. . 464 Webb v. Whiffin (1872) L. R. 5 H. L. 711 ; 42 L. J. Ch. 161 . . 223 Webster's Case (1866) 2 Eq. 741; 14 L. T. 728 . . 432 Webster v. Cecil (1861) 30 Beav. 62 435 Webster v. Cook (1867) 2 Ch. 542; 16 L. T. 821; 15 W. R. 140 . . . . 585 Webster v. De Tastet (1797) 7 ,T. R. 157 . . / 306 Wedgewood v. Adams (1843) 6 Beav. 600 . 577, 578 Weeks v. Propert (1873) L. R. 8 C. P. 427; 42 L. J. C. P. 129; 21 W. R. 676 106 Weidner v. Hoggett (1876) 1 C. P. D. 533; 35 L. T. 368 . . 100 Weir v. Barnett (1877) 3 Ex. D. 32; 26 W. R. 147 532 Weir *. Bell (1878) 3 Ex. Div. 32. 238; 47 L. J. Ex. 704; 38 L. T. 929; 26 W. R. 147, 746 480, 530, 532 Weldon v. Winslow (1884) 13 Q. B. Div. 784 • 85 Wells v. Kingston-upon-Hull (1875) L. R. 10 C. P. 402; 44 L. J. C. P. 257; 32 L. T. 615 ; 23 W. R. 562 153, 160 Wells v. Malbon (1862) 31 Beav. 48; 31 L. J. Ch. 344; 6 L. T. 39; 8 Jur. N. S. 249; 10 W. R. 364 ; 84' Welman v. Welman (1880) 15 Ch. D. 570; 49 L. J. Ch. 736; 43 L. T. 145 473 West London Commercial Bank v. Kitson (1884) 12 Q. B. D. 157; 13 Q. B. Div. 360; 47 J. P. 824 108, 522 Western Bank of Scotland v. Addie (1867) L. R. 1 Sc. & D. 145 . . 115, 516, 531, 533, 542 Western v. Russell (1814) 3 Ves. & B. 187 578 Westlake'u. Adams (1858) 5 C. B. N. S. 248; 24 L. J. C. P. 271; 4 Jur. N. S. 1021 172 Westmeath v. Salisbury (1831) 5 Bli. N. S. 339 267, 268 74 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Westmaeth, Marquis of, v. Marchioness of Westmeath (1820-1) 1 Dow & CI. 519; Uac. 126 264, 265 Weston v. Metropolitan Asylum District (1882) 9 Q. B. Div. 404; 51 L. J. Q. B. 399; 46 L. T. 580; 30 W. E. 623; 46 J. P. 564 467 Wharton v. Mackenzie (1844) D. & M. 545; 5 Q. B. 606; 13 L. J. Q. B. 130; 8 Jur. 466 ' . . 68 Whatman r, Gibson (1838) 9 Sim. 196 229 Wheatley v. Lane (1667) 1 Wms. Saund. 240 206 Wheatley v. Slade (1830) 4 Sim. 126 500 Wheelton v. Hardisty (1857) 8 E. & B. 232; 26 L. J. -Q. B. 265; 27 ib. 241; 5 Jur. N. S. 14 490, 491, 492, 530 Whelpdale's Case (1605) 5 Co. Eep. 119 553 Whichcote v. Lawrence (1798) 3 Ves. 739 244 Whincup v. Hughes (1871) L. E. 6 C. P. 78; 40 L. J. C. P. 104; 24 L. T. 74; 19 W. E. 439 379 Whiteombtt. Whiting (1781) Dougl. (fol. ed.) 652 602 White v. Bluett (1853) 2 C. L. E. 301; 23 L. J. Ex. 36 176 Whites. Cuddon (1842) 8 CI. & Fin. -766; 6 Jur. 471 498 White v. Damon (1802) 7 Ves. 30, 34 577, 578 White v. Garden (1651) 10 C. B. 919; 20 L. J. C. P. 166; 15 Jur. 630 . 512, 544 White v. White (1872) 15 Eq. 247; 42 L. J. Ch. 288; 27 L. T. 752 ... 478 Whitehead v. Anderson (1842) 9 M. & W. 518; 11 L. J. Ex. 157 .... 401 Whittakei, Ex parte (1875) 10 Ch. 446; 44 L. J. Bk. 91; 32 L. T. 443; 23 W. E.555 512 Whittemore v. Whittemore (1869) 8 Eq. 603 500 Widgery v. Tepper (1877) 5 Ch. D. 516 ; 7 Ch. Div. 423; 47 L. J. Ch. 550; 38 L. T 434; 26 W. 546 80 Wilby v. Elgee (1875) L.E. IOC. P. 497; 44 L. J. C. P. 254: 32 L. T. 310 182, 601 Wild v. Harris (1849) 7 D. & L. 114; 7 C. B. 999; 18 L. J. C. P. 297; 13 Jur. 961 107 Wild v. Gibson (1848) 1 H. L. C. 605; 12 Jur. 527 504 Wildes v. Dudlow (1874) 19 Eq. 198; 44 L. J. Ch. 341: 23 W. E. 435 . . 159 Wilkinson v. Gibson (1867) 4 Eq. 162; 36; L. J. Ch. 646; 16 L. T. 733; 15 W. E. 983 , 84 Wilkinson v. Lloyd (1845) 7 Q. B. 27; 14 L. J. Q. B. 165; 9 Jur. 328 . . 357 Wilkinson v. Loudonsack (1814) 3 M; & S. 117 348 Willanu. Willan (1809-10) 16 Ves. 72; 2 Dow, 275 .454 Willesford v. Watson (1873) 14 Eq. 572; 8 Ch. 473; 42 L. J. Ch. 447; 28 L. T. 428; 21 W. E. 350 ' -. ... 291, 292 Williams' Case (1869) 9 Eq. 225, n. . 520, 527 Williams Ex parte (1877) 7 Ch. Div. 138 255 Williams v. Bayley (1866) L. E. 1 H. L. 200; 35 L. J. Ch. 717; 14 L. T. 802; 12 Jur. N. S. 875 288, 557, 572 Williams v. Byrnes (1863) 1 Moo. P. C. C. N. S. 154; 8 L. T. 69 . . 22, 23, 162 Williams v. Carwardine (1833) 4 B. & Ad. 621 ; 5 C. & P. 566; 1 N. & M. 418 13, 19 Williams (Doe d.) v. Evans (1845) 1 C. B. 717, 14 L. J. C. P. 237; 9 Jur. 712 301 Williams v. Glenton (1866) 34 Beav. 528; 1 Ch. 200 464 Williams v. Hathaway (1877) 6 Ch. D. 544 .108 Williams v. Hedley (1807) 8 East, 378 337 Williams v. Jordan (1877) 6 Ch. D. 517; 46 L. J. Ch. 681; 26 W. E. 230 162 Williams v. Moor (1843) 11 M. & W. 256; 2 D. N. S. 993; 12 L. J. Ex. 253; 7 Jur. 817 58 Williams v. Owen (1840) 5 M. & Cr. 303; 12 L. J. Ch. 207 466 Williams v. Protheroe (1829) 5 Bing. 309; 2 M. &P. 779; 2Y. & J. 129 . 300 Williams v. Wentworth (1842) 5 Beav. 325 88 Williams, app., Wheeler, resp. (1860) 8 C. B. N. S. 299 607 Williams v. Williams (1866-7) 2 Ch. 294; 36 L. J. Ch. 200, 419; 16 L. T. 42; 15 W. K. 657 569 TABLE OF CASES. 75 [The paging refers to the [*] pages. J PAGE "Williamson, Exparte (1869) 5 Ch. 309; 22 L. T. 284; 18 W. E. 388 .. . 661 Williamson v. Gihon (1805) 2 Sch. & L. 357 307 Willingale v. Maitland (1866) 3 Eq. 103; 36 L. J. Ch. 64 200 Willis v. Thorp (1875) L. E. 10 Q. B. 383; 44 L. J. Q. B. 137; 33 L. T. 11; 23 W. E. 730 686 Willison v. Patteson (1817). 7 Taunt. 439; 1 Moore, 133 280 Willmott v, Barber (1881) 15 Ch. D. 96; 17 Ch. Div. 772; 45 L. T. 229 . 612 Wilson v. Hart (1866) 1 Ch. 463; 12 L. T. 798; 11 Jur. N. S. 735; 13 W. E. 988; affirming 2 H. & M. 551 226 Wilson v. Lloyd (1873) 16 Eq. 60; 42 L. J. Ch. 559; 28 L. T. 331; 21 W. E. 507 194 Wilson v. Eankin (1865) L. E. 1 Q. B. 162; 35 L. J. Q. B. 203; 13 L. T. 564; 11 Jur. N. S. 173; 14 W. E. 198 325 Wilson v. Eay (1839) 10 A. & E. 82; 2 P. & D. 253; 3 Jur. 384 . ... 337 Wilson v. Strugnell (1881) 7 Q. B. D. 548; 50 L. J. M. C. 145; 45 L. T. 218; 45 J. P. 831; 14 Cox, C. C. 624 289, 335 Wilson v. West Harlepool Ey. Co. (1864-5) 2 D. J. S. 475; 34 L. J. Ch. 241; 11 L. T. 692; 11 Jur. N. S. 124; 13 W. E. 361 131, 661 Wilson v. Wilson (1854) 1 H. L. C. 538; 5 ib. 40 265, 266, 268, 453 Wilton v. Chambers (1837) 7 A. & E., 524 622 Winn v. Bull (1877) 7 Ch. D. 29; 47 L. J. Ch. 139; 26 W. E. 230 ... . 42 Wiseman v. Beake (1690) 2 Vern. 121 581 Witt v. Corcoran (1871) 8 Ch. 476, n. ; 16 Eq. 571 292 Wolfe v. Matthews (1882) 21 Ch. D. 194; 51 L. J. Ch. 833; 47 L. T. 158; 30 W. E. 838 631 Wolverhampton Banking Co., Ex parte (1884) 14 Q. B. D. 32 289 Wood v. Abrey (1818) 3 Mad. 417 574, 575 Wood v. Barker (1865) 1 Eq. 139; 35 L. J. Ch. 276; 13 L. T/318; 11 Jur. N. S. 905; 14 W. E. 47 239 Wood v. Downes (1811) 18 Ves. 120 295, 297, 302 Wood v. Fenwick (1842) 10 M. & W. 195 55, 66 Wood v. Griffith (1818) 1 Swanst. 43; Wils. C. C. 34 497 Wood v. Scarth (1855) 2 K. & J. 33 468 Wood v. Tate (1806) 2 Bos. & P N. E. 247 154 Woolfeu. Home (1877) 2 Q. B. D. 355; 46 L. J. Q. B. 534; 36 L. T. 705; 25 W. E. 728 98 Worrall v. Jacob (1816-7) 3 Mer. 268 265 Worthington v. Curtis (1875) 1 Ch. Div. 419; 45 L. J. Ch. 259; 33 L. T. 828; 24 W. E. 221 . . . / 334, 683 Wright's Case (1871) 7 Ch. 55; 41 L. J. Ch. 1; 25 L. T. 471; 19 W. E. 45 509, 529, 540 Wright v. Chard (1859) 4 Drew. 673; 1 D. P. J. 567; 29 L. J. Ch. 82; 1 L. T. 138; 8 W. E. 35 652 Wright v. Leonard (1861) 11 C. B. N. S. 258; 30 L. J. C. P. 365; 4' L. T. 110; 8 Jur. N. S. 415; 9 W. E. 944 79 Wright v. Monarch Investment Building Society (1877) 5 Ch. D. 726; 46 L. J. Ch. 649 292 Wright v. Proud (1806) 13 Ves. 136 570 Wright v. Snowe (1848) 2 De G. & Sm. 321 76 Wright v. Tanderplank (1855) 2 K. & J. 1; 8 D. M. G. 133; 25 L. J. Ch. 753; 2 Jur. N. S. 599 549, 565, 595 Wrigley v. Swainson (1849) 3 De G. & Sm. 458 247 Wulff v. Jay (1872) L. E. 7 Q. B. 756; 41 L. J. Q. B. 322; 27 L. T. 118; 20 W. E: 1030 • 243 Wyatt v. Hertford (1802) 3 East, 147 102 Wycombe Ey. Co. v. Donnington Hospital (1866) 1 Ch. 273; 14 L. T. 179; 12 Jur, N. S. 348; 14 W. E. 359 403 Wynn v. Shropshire Union, &c. Co. (1850) 5 Ex. 420 : .... 347 76 TABLE OF CASES. [The paging refers to the [*] pages.] PAGE Wynne's Case (1873) 8 Ch. 1002; 43 L. J. Ch. 138; 29 L. T. 381; 21 W. E. 895 40 Wythes v. Labouchere (1858-9) 3 De G. & J. 593; 5 Jur. N. S. 499 . 418, 493 Xenos v. Wickhani (1866) L. R. 2 H. L. 296; 36 L. J. C. P. 313 . 6, 48, 616 Yarborough v. Bank of England (1812) 16 East, 6 155 Yates v. Boen (jf 39) 2 Str. 1104 90 Yates v. Nash (I860) 8 C. B. N. S. 581; 29 L. J. C. P. 306; 2 L. T. 430; 6 Jur. N. S. 1343; 8 W. R. 764 205 Yeomans v. Williams (1865) 35 Beav. 130; 1 Eq. 184; 35 L. J. Ch.- 283 . 615 Young ii. Clark (1720) Pre. Ch. 538 ' . . . 577 Young & Co. v. Mayor of Leamington (1883) 8 App. Ca. 517; 52 L. J. Q. B. 713; 49 L. T. 1; 31 W. R. 925; 47 J. P. 660 156 Zouch v. Parsons (1765) 3 Burr. 1794; 1 W. Bl. 575 -55 I take this opportunity of calling the attention of historical students of the Common Law who read German to two articles by Mr. Ernst Schuster, a Ger- man resident in London, in Busch's Archiv fur Handelsund Wechselrecht — " Der Vertragsschluss nach Englischem Recht," vol. 45, p. 317, and "Die Consideration als Giiltigkeitsbedingung des Vertrags in Englischem Recht." vol. 46, p. 111. These papers, though primarily designed to make the rules of English law intelligible to German lawyers and men of business, are thor- oughly worked out from first-hand study, and contain much valuable indepen- dent criticism. REFERENCES AND ABBREVIATIONS. Benjamin on Sale. Third edition, 1884. Dart's Vendors and Purchasers. (Dart, V. & P.) Eifth edition, 1876. I. C. A. means the Indian Contract Act (IX. of 1872). Law Journal. Always cited by the number of the vol. in the New Series. Law Reports (1865 — 75). The Chancery Appeal and Equity cases are cited as "Ch." and "Eq." simply. Law Reports (1875 — ). The Scotch appeals to the House of Lords and appeals to the Judicial Committee of the Privy Council reported in the Appeal Cases series, if not expressly. mentioned to be such in the context, are distinguished by the additions (So.) and (J. C.) respectively. Lindley on the Law of Partnership. (Sometimes cited by the author's name / alone.) Fourth edition, 1878. „ Saunders' Reports, notes to, by the late Serjeant Williams (Wms. Saund. ). Ed. 1871. Cited by the paging of that edition, not the pages of Saunders. Savigny, System des heutigen romischen Rechts (Savigny, or, Sav. Syst.), Ber- • lin, 1840—1849. Savigny, Das Obligationenrecht (Sav. Obi.). Berlin, 1851-3. Smith's Leading Cases (Sm. L. C). As a rule the seventh edition, 1876, has still been referred to. Vangerow, Lehrbuch der Pandekten (Vangerow, Pand.), Seventh edition, Marr burg and Leipzig, 1863. Pothier's and Story's works are cited by the consecutive sections. Savigny and Vangerow are cited indifferently by volume and page, or by the consecutive sections, often by both. (77) (78) PRINCIPLES OF CONTRACT. •CHAPTER I. [*1] AGREEMENT, PROPOSAL, AND ACCEPTANCE. Ouk first business is to separate and analyse the ele- ments which, generally speaking, must concur in the formation of a contract. A series of statements in the form of definitions, though necessarily imperfect, may help to clear the way. 1. Every agreement and promise enforceable by law Contract, is a contract. 1 2. An agreement is an act in the law whereby two or Agreement. more persons declare their consent as to any act or thing to be done or forborne by some or one of those •persons for the use of the others or other of them. 3. Such declaration may consist of Expression (a) the concurrence of the parties in a spoken of consent. or written form of words as expressing their common intention, 2 or (6) a proposal made by some or one of them, and accepted by the others or other of them 4. The declaration by any person of his intention to Promise. do or forbear from anything at the request or for the use of another is called a promise. 3 -^•5. An agreement which has no legal effect is said [ ^ 2] to be void. An agreement which ceases to have legal Void agree- effect is said to become void or to be discharged. ment - 1 See Sherwin v. Brigham, 39 Ohio, 137; Eblin v. Miller, 78 Ky. 371; Tilden v. New York, 56 Barb. 340; Keffer v. Grayson, 76 Va 517. See 2 Bl. Com. 442; Sturges v. Crowninshield, for Wheaton, 122. 2 Bank v. Hall, 101 U. S. 50; Taylors. McClurg, 2 Houst. (Del.)- 24: Baxters. Bishop, 65 Iowa, 582; Moyer's App., 2 Amerman (Pa.), 290; Sawyer v. Hebard, 58 Vt. 375; Stove Co. v. Holbrook, 101 N. Y. 45. 3 Vinal v. Richardson, 13 Allen, 521; Kean o. McKinsey, 2 Barr, 30; Martin v. Black, 20 Ala. 309. (79) 80 Voidable contract. Nature and scope of con- sent. [*3] AGREEMENT, PROPOSAL, AND ACCEPTANCE. 6. An agreement is said to be a voidable contract if it is enforceable by law at the option of one or more of the parties thereto but not at the option of the other or others. We proceed to develop and explain these statements, so far as appears convenient, at the outset of the work. 1. Definition of Agreement. — The first and most es- sential element of an agreement is the consent of the parties. There must be the meeting of two minds in one and the same intention. 4 But in order that their consent may make an agreement of which the law can take notice, other conditions must be fulfilled. The agreement must be, in our old English phrase, an act in the law: that is, it must be on the face of the matter capable of having legal effects. It must be concerned with duties and rights which can be dealt with by a court of justice. And it must be the intention of the parties that the matter in hand shall, if necessary, be so dealt with, or at least they must not have the contrary intention. An appointment between two friends to go out for a walk or to read a book together is not an agreement in the legal sense: for it is not meant to pro- duce, nor does it produce, any new legal duty or right, or any change in existing ones (a). Again, -fa there, must not onlybe an act in the law, but an act which determines duties and rights of the parties. A consent or declaration of several persons is not an agreement if it affects only other people's rights, or even if it affects rights or duties of the persons whose consent is expressed (a) Nothing but the absence of intention seems to prevent a contract from arising in many cases of this kind. A. asks B. to dinner and B. accepts. Here is proposal and acceptance of some- thing to be done by B. at A.'s request, namely, coming to A.'s house at the appointed time, and the trouble and expense of do- ing this are ample consideration for A. 's promise to provide a din- ner. Why is A. not legally bound to have meat and drink ready for B., so that if A. had forgotten his invitation and gone else- where B. should have a right of action ? Only because no legal bond was intended by the parties. It might possibly be said that these are really cases of contract, and that only social usage and, the trifling amount of pecuniary interest involved keep them out of courts of justice. But I think Savigny's view, which is here adopted, is the bettej one. There is not a contract which it would be ridiculous to enforce, but the original proposal is not the pro- posal of a contract. ^ 4 Hill v. Roderick, 4 "W. & S. 221; Fitzgerald v. Baker, 85 Mo. 13; Sawyer v. Brossart, 67 Iowa, 678; Smith v. Crawford, 81 111. 296;Kvouskop v. Shontz, 51 Wis. 204; Brown v. Caldwell, 23 W. Va. 187; Sheedy v. Roach, 124 Mass. 472. OBLIGATION. • 81 without creating any obligation between them. The verdict of a jury or the judgment of a full Court is a concurrent declaration of several persons affecting legal rights; but it is not an agreement, since the rights affected are not those of the judges or jurymen. If a fund is held by the trustees of a will to be paid over to the testator's daughter on her marriage with their con- sent, and they give their consent to ber marrying J. S., this declaration of consent affects the duties of the trus- tees themselves, for it is one of the elements determin- ing their duty to pay over the fund. Still it is not an agreement, for it concerns no duty to be performed by any one of the trustees towards any other of them. There is a common duty to the beneficiary, but no mu- tual obligation. 6 By obligation we mean the relation Obligation, that exists between two persons of whom one has a priv- ate and peculiar right (that is, not a merely public or official right, or a right incident to ownership or a per- manent family relation ) to control the other's actions by calling upon him to do or forbear some particular thing (6). An agreement might be defined, indeed, as purporting to create an obligation. But for the pur- poses of English law we prefer to say ("what is in effect the same) that an agreement contemplates something to be done or forborne by one or more of the parties for the use of the others or other. The word use is familiar in English law-books from early times in such a connex- ion as this; and I think it mostly if not always imports the creation of a personal claim, Forderung as the Ger- man writers call it, on the part of him for whose use a thing is said to be done. •jf; It is proper to add that the common intention of [ -^j- 4] the parties to an agreement is a fact, or inference of Proof of fact, which, like any other fact, has to be proved accord- consent - ing to the general rules of evidence. When it is said, therefore, that the true intent of the parties must govern the decision of all matters of contract, this means such an intent as a court of justice can take notice of. If A., being a capable person, so bears himself towards B. that a reasonable man in B.'s place would naturally understand A. to make a promise, and B. does take A.'s words or conduct as a promise, no further question can be made about what was passing in A.'s mind. Under 1 (5) Savigny, Syst. i. 338—9; Obi. i. 4, seq. 5 McWharter v. McMahon, 1 Clark (N. Y.), 400; Abbott v. Shep- pard, 48 N. H. 14; Hart v. Bray, 50 Ala. 446; Cheney v. Eastern Line, 59 Md. 557; Duble v. Batts, 38 Texas, 312. 6 PRINCIPLES OF CONTRACT. 82 Proposal and acceptance. [*5J Is the analysis universally applicable? such circumstances, as well as in certain other more special cases, the law does not allow a party to show that his intention was not in truth such as he made or suffered it to appear. But in the common and regular course of things the consent to which the law gives effect is real as well as apparent. 2. Ways of declaring consent. — Two distinct modes of the formation of an agreement are here specified. It is possible, however, to analyse and define agreement as constituted in every case by the acceptance of a pro- posal. In fact this is done in the Indian Contract Act. And it is appropriate to most of the contracts which occur in daily life, buying and selling, letting and hiring, in short all transactions which involve striking a bargain. One party proposes his terms ; the other accepts, rejects, or meets them with a counter-proposal : and thus they go on till there is a final refusal and breaking off, or till one of them names terms which the other can accept as they stand. The analysis is presented in a striking form by the solemn question and answer of the Roman Stipulation, where the one party asked (specifying fully the matter to be contracted for): That you will do so and so, do you covenant ? and the other answered with the same operative word: I covenant (c). Yet the im- portance of proposal and acceptance -^ as elements of the contract has been much more distinctly brought out in English jurisprudence than by writers on the modern civil 'law (d): and, one may add, on the whole , more rationally treated. 6 Does this analysis, however, properly apply to a case in which the consent of the parties is declared in a set form, as where they both execute a deed or sign a writ- ten -agreement ? It may be said that, although there is no proposal or acceptance in the final transaction, the terms of the document must have been settled by a pro- cess reducible to the acceptance of a proposal. (e) No doubt the formula Spondes? spondeo, originally the only binding one, was in early times supposed to have a kind of magical effect. But it was necessary that the stipulator should hear the promisor's answer. Cp. Palgrave, Couimonwealth of England, 2, cxxxvii, cxli. (d) Increased attention has however been paid to this topic in Germany. See Vangerow, Pand. $ 603, or Windscheid, Lehr- buch des Pandektenreehts, \ 306. The technical terms are Antrag for our offer or proposal, Annahme for acceptance. 6 The law presumes an acceptance of whatever is beneficial to the party to whom it is conveyed. Tibbals v. Jacobs, 31 Conn. 428; Church r. Gillman, 15 "Wend. 656; Mallory v. Stodder, 6 Ala. «)1. DECLARATION OF CONSENT. 83 But then the formal instrument has a force apart from and beyond that of the negotiation which fixed its terms. And it may well' be, and sometimes is the case, that the parties intend not to be legally bound to anything until their consent is formally declared. In such a case it cannot be said that the proposal and ac- ceptance constitute an agreement, at all events not the true and final agreement. Take the common case of a lease. There is generally an enforceable agreement, constituted by letters or memorandum, before the lease is executed. But the lease itself is (besides its effect as a transfer of property) a new contract or series of con- tracts. In this who is the proposer and who the ac- ceptor ? Are we to say that the lessor is the proposer because in the common course he executes the lease be- fore the lessee executes the counterpart ? Or are we to take the covenants severally, and say that in each one the party with whom it is made is the proposer, and the party bound is the acceptor? What, again, if two parties are discussing the terms of a contract and can- not agree, and a third indifferent person suggests terms which they both accept? Shall we say that he who ac- cepts them -^- first thereby proposes them to the other? [ "^r 6] It is possible to say this, but not without a certain strain of thought and language. And what if they accept at the same moment? The truth is, as I venture to think, that the exclusive pursuit of the analytical method in dealing with legal conceptions always leads into some strait of this kind, and if the pursuit be ob- stinate, lands us in sheer fictions. In this case it seems at least harmless to let the formal or declaratory pro- cess of establishing a contract stand on its own footing side by side with the discursive or bargain-striking pro- cess. Even apart from the difficulty, to which we shall immediately come, that there may be a binding promise without any acceptance at all, I do not think the one is fairly reducible to the other. The terms proposal and acceptance are defined by the Indian Contract Act (e), but for natural-born speakers of English they seem hardly to need more definition than is implied in the rules which have to be subse- quently given. In English authorities proposal and offer are used as synonymous terms, offer being, if any- thing, the more common. 3. Definition of Promise. — The definition of the In- Promise: dian Contract Act is that "a proposal when accepted be- ma y exist 1 r * and bind as (e) See note A. 84 AGREEMENT, PROPOSAL, AND ACCEPTANCE. contract be- fore accept- ance in English law. [*7] Restriction of contract to enforceable agreements. Void agreee- taent ; dis- tinction of in i id and voidable. comes a promise." This again is apt and sufficient for the every-day or bargaining type of contract. But there are cases which it seems not to cover. Not only a promise, in the ordinary sense of the word, may be made in writing before there is any acceptance of it by the person to whom it is made, but if made by deed it is at once binding and irrevocable. Certainly this doctrine is of an archaic and technical kind,- resting as it does more on the formal character of a deed than on any principle of general application; and possibly, or more than possibly, its expediency is doubtful. But it is a settled part of the law of England (/). If the analytical view of the Indian Contract -^ Act is to be applied to the existing state of English jurisprudence, it can be done only by treating this class of cases as anomalous. It will not do to say that the contract is complete when the other party knows of the promise and assents; for if that were so, it could in the mean- time be revoked. And if we say that acceptance is presumed in the case of an offer which is unconditional and wholly for the benefit of the party to whom it is made, we are at once in the region of fictions. It might serve a little better to say that, by an exceptional effect of the form of the transaction, the proposal is in these cases irrevocable. But this is only another way of say- ing that the regular analysis does not hold good. 4. Definition of Contract. — The term contract is here confined to agreements enforceable by law. 7 This re- striction, suggested perhaps by the Boman distinction between contractus andpaclum) is believed to have been first introduced in English by the Indian Contract Act. It seems a manifest improvement, and free from the usual drawbacks of innovations in terminology, as it makes the legal meaning of the words more precise without any violent interference with their accustomed use. 5. Void Agreements. — The distinction between void and voidable transactions is a fundamental one, though it is often obscured by carelessness of language even in modern books. An agreement or other act which is void has from the beginning no legal effect at all, save in so far as any party to it incurs penal consequences, (/) Xenosu. Wickham, L. R. 2H. L. 296, 323, and authorities there cited: see at pp. 300, 309. For the reasons on the other side, see the opinion of Willes, J. at pp. 315, 316. ' For definitions of contract, see 1 Parsons on Contracts, 6; 1 Chitty Con. (11th Am. Ed.) 11; 2 Kent's Com. 449, note, and Freedman, J., in Dietz v. Farish, 53 How. Pr, 217. " VOID " AND " VOIDABLE." 85 as may happen where a special prohibitive iaw both makes the act void and imposes a penalty. 8 Otherwise no person's rights, whether he be a party or a stranger, are affected. A voidable act, on the contrary, takes its full and proper legal effect unless and until it is dis- puted and set aside by some person entitled so to do." The definitions of the Indian Contract Act on this head are simpler in form than those given above : but cer- tain peculiarities of English law prevent us from adopt- ing the whole of them as they stand, -^f It is not cor- [ "^ 8] rect as an universal proposition in England that " an agreement not enforceable by law is said to be void," for we have agreements that cannot be sued upon, and yet are recognized by law for other purposes and have legal effect in other ways (g). 6. Voidable Contracts. — The definition here given is Voidable from the Indian Contract Act. The idea is not an easy contract - one to express in terms free from objection. Perhaps it would be better to say that a voidable contract is an agree- ment such that one of the parties is entitled at his option to treat it as never having been binding on him. 10 The Anglo-Indian definition certainly covers rather more than the ordinary use of the terms. Cases occur in English law where, by the effect of peculiar enact- ments, there is a contract enforceable by one party alone, and yet we should not naturally call it a voidable contract. An example is an agreement required by the Statute of Frauds to be in writing, whieh has been signed by one party and not by the other. Here the party who has signed is bound and the other is free. " Voidable contract " seems not exactly the appropriate name for such a state of things. And it may even be said that a contract which has been completely per- formed on one side is literally " enforceable by law at the option of one of the parties " only. But the defi- nition as it stands cannot practically mislead (h). (g) See Ch. XII. below. (A) There Is a similar but slighter difficulty about the use of 8 C. J. Lowtie, in Pearsoll v. Chapin, 8 Wright (Pa.) 9, said, " Contracts and acts that are absolutely void are contracts to do an illegal act, or omit a public duty, " etc. The word " void" is often used in the sense of "voidable " both in statutes and law writings. Van Shaack v. Eobbins, 36 Iowa, 201; Ewell v. Daggs, 108 U. S. 143. 9 Pearsoll v. Chapin (supra). A contract is voidable when it has some effect, but is liable to be made void by one of the par- ties or a third person. Bishop on Contracts, Sec. 611. 10 Voidable contracts can in general be perfected by ratifica- tion. Benedict v. National Bank, 4 Daly, 171 86 AGREEMENT, PROPOSAL, AND ACCEPTANCE. Considera- Consideration is also defined in the interpretation tion - clause of the Indian Act. Perhaps- it is to be regarded rather as a condition generally (though not always) im- posed by a positive rule of English law as needful to the formation of a binding contract than as an elementary constituent of an agreement. In fact the English sys- tem of law, as distinguished from those of the Conti- [ *fc 9] nent and even of Scotland, -^ is the only one in which the notion is fully developed. Hereafter a fuller dis- cussion will be given : for the present it may serve to describe consideration as an act or forbearance, or the promise thereof, which is offered by one party to an agreement, and accepted by the other, as an inducement to that other's act or promise. ' Special rules Notwithstanding the difficulties that arise in making governing proposal and acceptance necessary parts of the general proposal and conception of Contract, there is no doubt that in prac- accep ce. tice they are the normal and most important elements. When agreement has reached the stage of being em- bodied in a form of words adopted by both parties, the contents of the document and the consent of the par- ties are generally simple and easily proved facts: and the only remaining question (assuming the other re- quirements of a valid contract to be satisfied) is what the words mean. The acceptance of a proposal might seem at first sight an equally simple fact. But the complexity of human affairs, the looseness of common ' speech, the mutability of circumstances and of men's intentions, and the exchange of communications be- tween parties at a distance, raise. questions which have to be provided for in detail, and some of which are of exceeding difficulty. Special consideration is needful as soon as we get beyond the simplest possible case, that of two parties, such as a buyer and seller of goods, meeting and striking their bargain face to face. We shall now see how these questions are dealt with in English law. Communications in general. Proposal and The proposal or acceptance of an agreement may be acceptance — communicated by words or by conduct, or partly by Express or j. ne one an( j p ar tly j,y tfc e other." In so far as a pro- the word void. A contract when it is fully performed ceases to have legal effect' ; it is discharged, but there is something harsh in saying that it becomes void, a term suggestive of inefficacy rather than of completed effect. Hence in the fifth definition I have introduced the word discharged as an alternative. 11 A mere offer or promise not accepted involves no concur- EXPRESS AND TACIT AGREEMENT. 87 posal or acceptance is conveyed by words, it is said to be express. In so far as it is conveyed by conduct, it is said to be tacit. It would be as difficult as it is needless to adduce distinct authority for this statement. Cases are of con- stant -jf occurrence, and naturally in small matters [ -^r 10] rather than in great ones, where the proposal, or the acceptance, or both, are signified not by words but by acts. For example, the passenger who steps into a ferry-boat thereby requests the ferryman to take him over for the usual fare, and the ferryman accepts this proposal by putting off. A promise made in this way is commonly said to be Distinction implied: but this tends to obscure the distinction of of tacit con- the real though tacit promise in these cases from the q'uasf-con^ 1 fictitious promise " implied by law," as we shall imme- tracts. diately see, in certain cases where there is no real con- tract at all, but an obligation quasi ex contractu, and in others where definite duties are annexed by rules of law to special kinds of contracts or to relations arising out of them. Sometinles, do doubt, it is difficult to draw the line. " ^Vhere a relation exists between two parties which involves the performance of certain du- ties by One of them, and the payment of reward to him by the other, the law mil imply [quasi-contract] or the jury may infer [true contract] a promise by each party to do what is to be dofie by him " (i). It was held in the case cited that an innkeeper promises in this sense to 'keep his guests' goods safely. The case of a carrier is analogous. So where A. does at B.'s request some- thing not apparently illegal or wrongful, but which in fact exposes A. to an action at the suit oE a third per- son, it seems to be not a proposition of law, but an in- ference of fact which a jury may reasonably find, that B. must be taken to have promised to indemnify A. (*). If A. with B.'s knowledge, but without any express request, does work for B. such as people as a rule expect to be paid for, if -B. accepts the work or its result, and if there are no special circumstances to show that A. meant to do the work for nothing or that B. honestly (i) Per Cur. Morgan v. Eavey, 6 H. & N. 265; 30 L. J. Ex. 131. (k) Dugdale v. Lovering, L. E. 10 C. P. 196. rence of wills and it can never constitute a contrast. Bower v. Blessing, 8 S. & E. 243; Tuttle v. Love, 7 Johns. 470; Demoss v. Noble, 6 Iowa, 530; Esmay v. Gorton, 18 111. 483; Harlow v. Curtis, 121 Mass. 320. 88 AGREEMENT, PROPOSAL, AND ACCEPTANCE. [*H] Quasi-con- tracts appear as ficti tious contracts in English law. [*12] believed that such was his intention, there is no diffi- culty in inferring -fa a promise by B. to pay what A.'s labour is worth. And this is a pure inference of fact, the question being whether B.'s conduct has been such that a reasonable man in A.'s. position would under- stand from it that B. meant to treat the work as if done to his express order. The doing of the work with B.'s knowledge is the proposal of a contract, and B.'s con- duct is the acceptance. The like inference cannot be made if the work is done without B.'s knowledge. For by the hypothesis the doing of the work is not a pro- posal, not being communicated at the time: k.. has no opportunity of approving or countermanding it, and cannot be bound to pay for it when he becomes aware of the facts, although he may have derived some benefit from the work; it may be impossible to restore or re- ject that benefit without giving up his own prop- erty (I). Nor is the case altered if A. comes to B. and tells him that the work is done and requests to be paid for it. This is indeed a proposal, but a new and dis- tinct one: and as it imports no'new consideration, B.'s acceptance of it would in the view of, English law be a merely gratuitous promise, and as such would make no contract. If A. of his own motion sends goods to B. on approval, this is an offer which B. accepts by dealing with the goods as owner. If he does not choose to tak,f» them, he is not bound to return them; though he is bound, on the principle to be next mentioned, to take a certain amount of care of them till A. reclaims them. But it does not follow that because there is no true contract, there may not be cases falling within this general description in which it is just and expedient that an obligation analogous to contract should be im- posed upon the person receiving the benefit. In fact there are such cases : and as the forms of our com- mon law did not recognize obligations quasi ex con ■ tractu in any distinct manner, these cases were dealt with by the fiction of an implied -^ previous request, which often had to be supplemented (as in the action for money had and received) by an equally fictitious promise.- The promise, actual or fictitious, was then supposed to relate back to the fictitious request; so that the transaction which Was the real foundation of the matter was treated as forming the consideration in a fictitious contract of the regular type. And thus here, {l) Cp. dicta of Pollock, C. B., 25 L. J. Ex., at p. 332. PROPOSAL TO UNASCERTAINED PERSONS. 89 as in many other instances, the law was content to rest in a compromise between the forms of pleading and the convenience of mankind. These fictions have long ceased to appear on the face of our pleadings, but they have become so established in legal language that it is still necessary to understand them (m). The Indian Indian Con- Act provides for matters of this kind more simply in tract Act form and more comprehensively in substance than our deals with present law, by a separate chapter, entitled " Of certain ra t™ y Sepa " Relations resembling those created by Contract" (ss. 68—72, cp. s. 73). " A corollary from the general principle of tacit ac- Performance ceptance, which in some classes of cases is of consider- of conditions able importance, is thus expressed by the Indian Con- * c -' as ac ~ tract act (s. 8):- ce P tance - " Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal." This rule contains the true legal theory of offers of Offers by- reward made by public advertisement for the procur- advertise- ing of information, the restoration of lost property, and the like. On such offers actions have many times been brought with success by persons who had done the things required as the condition of , obtaining the reward. 12 It appears to have been once held that even after the performance an offer thus made did not become a bind- ing promise, because " it was not averred nor declared to whom ■£ the promise was made (n). But the es- [ ^ 13] tablished modern doctrine is that there is a contract with any person who performs the condition mentioned in the advertisement (o). That is, the advertisement is a proposal which is accepted by performance of the conditions. 13 It is an offer to become liable to any per- son who happens to fulfil the contract of which it is the offer (p). Until some person has done this, it is a proposal and no more. It ripens into a promise only (m) For details see notes to Lampleigha. Braithwaite, inl Sm. L. C, and Osborne v. Eogers. 1 Wms. Saund. 357. (») Nov 11, 1 Rolle Ab. 6, M. pi. 1. (o) Williams v. Carwardine, 4 B. & Ad. 621. (p) Per Willes, J., Spencer v. Harding, L. E. 5 C. P. 563. 12 Hayden v. Souger, 56 Ind. 42; Lowring v. Boston, 7 Met. 409; Davis v. Munson, 43 Vt. 676; Janvrin v. Exeter, 48 N. H. 83; Shuey v. U. S., 92 U. S. 73. 13 It is a contract entered into and executed by the act itself. Babcock v. Eaymond, 2 Hilton 61; England v. Davidson, 11 A. & E. 856. 90 AGREEMENT, PROPOSAL, AND ACCEPTANCE. Difficulties in working out the principle. Distinction between offer and in- vitation of offers. [*141 •when its conditions are fully satisfied. As Sir W. An- son has well put it, " an offer need not be made to an ascertained person, but no contract can arise until it has been accepted by an ascertained person" (q). We have no special term of art for a proposal thus made by way of general request or invitation to all men to whose knowledge it comes. The Germans call it Auslobung. In the same manner each bidding at a sale by auction is a proposal; and when a particular bid is accepted by the fall of the hammer (but not before), there is a com- plete contract with the particular bidder to whom the lot is knocked down (r). u The principle is sufficiently clear, but its application is not wholly free from difficulties. These are partly reducible to questions of fact or of interpretation, but partly arise from decisions which appear to give some countenance to a fallacious theory. First, we have to consider in particular cases whether some act or announcement of one of the parties is really the proposal of a contract, or only an invitation to other persons to make proposals for his considera- tion (s). This depends on the intention of the parties as collected from their language and the nature of the transaction, and the question is one either of pure fact or of construction, -jc Evidently it may be an important one, but due weight has not always been given to it. The proposal of a definite service to be done for re- ward, which is in fact a request (in the sense of the ordinary English law of contract) for that particular service, though not addressed to any one individually, is quite different in its nature from a declaration to all whom it may concern that one is willing to do business with them in a particular manner. Of course the per- son who publishes such an invitation does contemplate that people who choose to act on it will do whatever is necessary to put -themselves in a position to avail them- selves of it. (q) Principles of the English Law of Contracts, p. 31, 3rd ed. (r) Payne v. Cave, 3 T. E. 148. (8) In German this is Aufforderung zu Anlrtigen as opposed to Antrag. Vangerow, Pand. \ 603. 14 If two persons agree that one shall not bid atan auction sale . and the profits shall be divided the court will not enforce their bargain. Sharp v. Wright, 35 Barb. 236; Singer Mfg. Co. v. Yarger, 2 McCrary, 583; Lloyd v. Malone, 23 111. 43; Bank of Metropolis v. Sprague, 5 C. B. Green, 159; Jenkins v. Frink, 30 Cal. 586; Wooten v. Hinkle, 20 Mo. 290. On this point the English doctrine appears to be the opposite way. See Galton v. Emuss, 1 Collyer, 243. PROPOSAL TO UNASCERTAINED PERSONS. 91 But acts so done are merely incidental to the real ob- ject; they are not elements of a contract but prelimi- naries. It does not seem reasonable to construe such preliminaries into the consideration for a contract which the parties had no intention of making. "Yet there are some modern decisions which seem to go very near such a result, and to let in a certain danger of treating mere declaration of intention as binding contracts (t). We shall now examine these cases. In Denton v. G. N. Railway Co. (u) the facts were Examination shortly these: The plaintiff had come from London to of cases: Peterborough, had done his business there, and wanted S^ ^"" G- to go on to Hull the same night. He had made his arrangements on the faith of the company's current time-tables, and presented himself in due time at the Peterborough station, applied for a ticket to Hull by a train advertised in those tables as running to Hull at 7:20 p. m., and offered to pay the proper fare. The defendant company's clerk refused to issue such a ticket, for the reason that the 7:20 train no longer went to Hull. The fact was that beyond Milford Junction the line to Hull beloned to the North Eastern Railway Company, who formerly ran a train -^- corresponding [ -^ 15] with the Great Northern train for which the Great Northern Railway Company issued through tickets by arrangement between the two companies. This corres- ponding train had now been taken off by the N. E. R. Co., but the G. N. R. time table had not been altered. The plaintiff was unable to go further than Milford Junction that night, and so missed an appointment in Hull and sustained damage. The cause was remov- ed from a County Court into the Queen's Bbnch, and the question was whether on the facts as stated in a case for the opinion of the Court the plaintiff could recover (x). It was held by Lord Campbell, C. J. and Wightman, J. that' when any one offered to take a ticket to any of the places to which the train was advertised to carry passengers the company contracted with him to receive him as a passenger to that place according to the ad- vertisement. Lord Campbell treated the statement in (t) Compare the judgments in Harris v. Nickerson, L. E. 8 Q. B. 286. (u) 5 E. & B. 860, and better in 25 L. J. Q. B. 129, where the case stated is given at length. (x) As to the measure of damages which here was not in dis- pute, see Hamlin v. G. N. E. Co., 1 H. & N. 408, 26 L. J. Ex. 20 (where a ticket having been taken there was an unquestionable contract). 92 AGREEMENT, PROPOSAL, AND ACCEPTANCE. Warlow v. Harrison. [*16] the time-table as a conditional promise which on the condition being performed became absolute. This proposition, reduced to exact language, amounts to saying that the time-table is a proposal, or part of a proposal, addressed to all intending passegers and sufficiently accepted by tender of the fare at the station in time for the advertised train. Crompton, J. (y) did not accept this view, nor was it neccessary to the actual decision: for the Court had only to say whether on the given facts the plaintiff could succeed in any form of action, and they were unanimously of opinion that there, was a good cause of action in tort for a false representa- tion. In Warlow v. Harrison (z) a sale by auction was an- nounced as without reserve, the name of the owner not ■jc being disclosed. The lot was put up, but in fact bought in by the owner. The plaintiff, who was the highest real bidder, sued the auctioneer as on a contract to complete the sale as the owner's agent. The Court of Queen's Bench held that this was wrong; the Court of Exchequer Chamber affirmed the judgment on the pleadings as they stood, but thought the facts did show another cause of action. Watson and Martin, BB. and Byles, J. considered that the auctioneer contracted with the highest bona fide bidder that the sale should be without reserve. They said they could not distinguish the case from that of a reward offered by advertise- ment, or of a statement in a time-table, thus holding in effect (contrary to the general rule as to sales by auc- tion) that where the sale is without reserve the con- tract is completed not by the acceptance of a bidding, but by the bidding itself, subject to the condition that no higher bona fide bidder appears. In other words, every bid is in such a case not a mere proposal but a conditional acceptance. Willes, J. and Bramwell, B. preferred to say that the auctioneer by his announce- ment warranted that he had authority to sell without reserve, and might be sued for a breach of such war- ranty. The result was that leave was given to the plain- tiff to amend and proceed to a new trial, which, how- ever, was not done (a). The opinions expressed By subsequently j ne j U( jges. therefore, are not equivalent to the actual not ex-' judgment of a Court of Error, and have been in fact tended. {y) The fuller report of his judgment is that in 5 E. & B. (z) 1 E. & E.,295, 28 L. J. Q. B. 18, in Ex. Ch. 1 E. & E. 309, 29 L. J. Q. B. 14. (a) The parties agreed to a stet processus ; see note in the L. J. report. Doctrine CONTRACTS BY GENERAL OFFER. 93 regarded with some doubt in a later case where the Court of Queen's Bench decided that at all events an auctioneer whose principal is disclosed by the condi- tions of sale does not contract personally that the sale shall be without reserve (b), Still more recently the same Court has held that when an auctioneer in good faith advertises a sale of certain goods, he does not by that advertisement alone enter into any contract or warranty with those who attend the sale that -^ the [ -fc'17] goods shall be actually sold (c). In an analogous case of Spencer v. Harding (d) it was decided that a simple offer of stock in trade for sale by tender does not amount to a contract to sell to the person who makes the high- est tender. The doctrine of these cases is capable, aB we have Difficulties seen, of being expressed in a manner conformable to of Denton r. the normal analysis of contract: but if it is to be fully G ' d N ^ v R ' 1 Ct> ' accepted, there may be some difficulty in settling its ^HarrisoiT extent. If a man advertises that he has goods to sell on theory of at a certain price, does he contract with any one who proposal and comes and offers to buy those goods that until further acce P tance - notice communicated to the intending buyer he will sell them at the advertised price ? (e). Again, does the manager of a theatre contract with every one who comes to the theatre and is ready to pay for a place that the piece announced shall be performed? or do directors or committee-men who summon a meeting contract with all who come that the meeting shall be held ? In like manner it might be argued that a common carrier is liable in contract as well as in tort for refusing to carry goods. Indeed we might thus arrive at an extended notion of contract which would cover all the cases in which courts of equity have interfered, on grounds independent of contract, as was supposed, to compel persons to make good their representations (/), and woul<^l indeed go beyond them: for a representation not only of fact, but of mere intention, might be treated as a proposal, and as soon as anything was done on the faith of it there would be an acceptance and a complete contract. Another matter for remark is the effect of notice of Difficulty revocation. Suppose the traveller had seen and read a arising from (b) Mainprice v. "Westley. 6 B. & S. 420, 34 L. J. Q. B. 229. c) Harris v. Nickerson, L. R. 8 Q. B. 286. (d) L. R. 5 C. P. 561. It may be worth while to remark that in each of these cases we have the unanimous decision of a strong Court. (e) See per Crompton, J. in Denton v. G. N. R. Co. supra. (/) See Dav. Conv. 3, pt. 1, 646; per Lord Selborne, L. R. 6 H. L. at p. 360. 94 AGREEMENT, PROPOSAL, AND ACCEPTANCE. Difficulty fixing the supposed contract. revocation of new and correct edition of the time-table in 'the booking- proposal. ^ office immediately before he offered to take his ticket. L w 1°J This would clearly have been^a revocation of the pro- posal of the company held out in the incorrect time- table, and on the present hypothesis no contract could arise. 15 Similarly if on putting up a particular lot the auctioneer expressly retracted as to that lot the state- ment of the sale being without reserve, there could be * no such contract with the highest bona fide bidder as supposed in Warlow v. Harrison. Thus the remedy ex contractu in this class of cases appears to be preca- rious. In practice, it is true, this matters little, for the party aggrieved may still have his remedy by suing in tort. He may so, no doubt; but the failure of the cause of action in contract goes to show that here we are at least near the extreme boundary of the region in which the notion of contract is applicable (g). of It will not have escaped the reader's notice that there is also a certain difficulty in determining what are the contents and consideration of the contract supposed to be made. 16 In the case of the time-table, for example, it is not sufficient to say that the statements of the table are a term in the company's ordinary contract to carry the passenger. That may well be true after he has taken his ticket. But here we have a contract said to be concluded by the mere demand of a ticket and tender of the fare, which, therefore, cannot be the ordinary contract to carry. So in the case of the auction we have a contract alleged to be complete not on the accept- ance but on the making of a bid. The anomaloas char- acter of these contracts may further be illustrated by considering whether it would be possible to maintain a remedy ex contractu in the case of a merely capricious refusal to issue tickets or hold the sale, as the case might be. On the whole, we cannot help thinking [ -^ 19] that some of the opinions and dicta in this class ^ of cases', if not the decisions themselves, have to some ex- tent overstepped the true principles of contract. The later cases of Spencer v. Harding and Harris v. Nick- (g) The Continental doctrine that the revocation must be so communicated as to amount to reasonable notice is of course in- admissible for our law: see note to Frost v. Knight, L. E. 5 Ex. at p. 337, and p. 24, below. As to the somewhat analogous sugges- tion made in that case, see s. c. in Ex. Ch. L. R. 7 Ex. at p. 117. 15 The ordinary method of withdrawal is by notice; and the disposing of a thing offered for sale is a withdrawal of the offer. Leake on Contracts, 43; Taylor v. Ins. Co. 9 How. (U. S.) 390. 16 Rogers v. Walsh, 12 Neb. 28; State v. Illyes, 87 Ind. 405; Gibson v. Pelhie, 37 Mich. 380. CONTRACTS BY GENERAL OFFER. 95 erson (h) make it pretty clear, however, that these re- finements are not likely to be extended. Another difficulty (though for English lawyers it Must there should not be a serious one) is raised by the suggestion he a real that in these cases the first offer or announcement is not acceptance? a mere proposal, but constitutes at once a kind of Theory of anomalous floating .contract with the unascertained obS^atfon person, if any, who shall fulfil the prescribed condition. ' ga '""' A vinculum inris with one end loose is on principle an inadmissible conception, to say nothing of the incon- venience which would come from treating the offer as an irrevocable promise. Savigny quite justly held that on this theory the right of action could not be support- ed; but he strangly missed the true explanation (i). To a certain extent, however, this notion of a floating obligation is countenanced by the language of the judges in the cases above discussed; and it also receives some apparent support from the much earlier case of Williams v. Carivardine (k). There a reward had been offered by the defendant for information which should lead to the discovery of a murder. A statement which had that effect was made by the plaintiff, but not to the defendant, nor with a view to obtaining the reward, noK, for aught that appears, with any knowledge that a reward had been offered. The Court held, nevertheless, that the plaintiff had a good cause of action, because the motive with which the information was given was immaterial: on which it mast be observed that the question is not of motive but of intention. The de- cision sets up a contract without any animus contrahendi. If it be now law (which may be doubted), it goes to show that ^ in this class of cases there may be an ac- [ -^ 20] ceptance constituting a contract without any communi- cation of the proposal to the acceptor, or of the accept- ance to the proposer." But the statement of Parke, J. that "there was a contract with any person who per- formed the condition mentioned in the advertisement," is rather ambiguous; it savours of the notion that there is an inchoate or unascertained obligation from the first publishing of the offer. And if such were indeed the ratio decidendi, we need not hesitate to say that at (/») P. 17 above. (i) Obi. 2, 90. It is the more strange inasmuch as within a couple of pages he does give the true analysis for the not dis- similar case of a sale by auction. (k) 4B.& Ad. 621. 17 Moulton v. Kershaw, 59 Wis. 316; Abeam v. Ayers, 38 Mich. 692. 96 AGREEMENT, PROPOSAL, AND ACCEPTANCE. Revocation of offer by advertise- ment. Other general pro- posals not being offers of reward. Ex parte [*21] Asiatic Banking Corporation. the present day it cannot be maintained. The modern cases not already cited have turned only on the question whether the party claiming the reward had in fact per- formed the required condition according to the terms of the advertisement (Z). 18 The Supreme Court of the United States held a few years ago that a general proposal made by public an- nouncement may be effectually revoked by an announce- ment of equal publicity, such as an advertisement in the same newspaper, even as against a person who after- wards acts on the proposal not knowing that it has been revoked. For "he should have known," it is Baid, "that it could be revoked in the manner in which it was made"(m). In other words, the proposal is treated as subject to a tacit condition that it may be revoked by an announce- ment made by the same means. This is, perhaps, a convenient rule, and may possibly be supported as a fair inference of fact from the habits of the news- paper-reading part of mankind: yet it seems a rather strong piece of judicial legislation. We may add one or two miscellaneous instances of general proposals, not being offers of reward, which have been dealt which as capable of acceptance by any- one to whose hands they might come. In Ex parte Asiatic Banking Corporation (n), the following -j{ letter of credit had been given by Agra and Masterman's Bank to Dickson, Tatham and Co. "No. 394. You are hereby authorized to draw upon this bank at six months' sight, to the extent of £15,000 sterling, and such drafts I undertake duly to honour on presentation. This credit will remain in force for twelve months from this date, and par- ties negotiating bills under it are requested to indorse particu- lars on the back hereof. The bills must specify that they are drawn under credit No. 394, of the 31st of October, 1865." The Asiatic Banking Corporation held for value bills drawn on the Agra and Masterman's Bank under this letter; the Bank stopped payment before the bills were presented for acceptance, and Dickson, Tatham and Co. were indebted to the Bank in an amount exceeding what was due on the bills: but the Corporation claimed (I) References were given in former editions of this work (p. 175, 2nd ed.) (ml Shuey v. United States, 2 Otto (92 TJ. S.), 73. (n) 2 Ch. 391. 18 Such an offer, like any other may be withdrawn b,f perform- ance. Shuey v. U. S., 92 U. S. 73, and Auditor v. Ballard, 9 Bash. 572; Eagle v. Smith, 4 Houst. (Del.) 293. CONTRACTS BY GENERAL OFFER. 97 nevertheless to prove in the winding-up for the amount, one of the grounds being "that the letter shown to the person advancing money constituted, when money was advanced on the faith of it, a contract by the Bank to accept the bills." Cairns, L. J., adopted this view, holding that the letter did amount to " a general invi- tation " to take bills drawn by Dickson, Tatham and Co. on the Agra and Masterman's Bank, on the assur- ance that the Agra and Masterman's Bank would accept such bills on presentation; and that the acceptance of the offer in this letter by the Asiatic Banking Corpora- tion constituted a binding legal contract against the Agra and Masterman's Bank (o). The difficulties ^^rom the above discussed do not seem to exist in this case. From difficulty in an open letter of credit (containing too in this -^ in- [ -fa 22] stance an express request to persons negotiating bills Denton v. under it to indorse particulars) there may be inferred **• N. E. Co. without any violence either to law or to common rea- son a proposal or request by the author of the letter to the mercantile public to advance money on the faith of the undertaking expressed in the letter. This under- taking must then be treated as addressed to any one who shall so advance money: the thing to be perform- ed by way of consideration for the undertaking is defi- nite and substantial, and is in fact the main object of the transaction. If any question arose as to a revoca- tion of the proposal, it would be decided by the rules which apply to the revocation of proposals made by letter in general (p). Another instance of contracts made by general offer is in the documents called " advance notes," by means of which sailors' wages used commonly to be paid. The form was a promise to pay so much to any one who should advance so much on the document to a named (o) In Scott v. Pilkington, 2 B. & S. 11; 31 L. J. Q. B. 81, on the other hand, an action was brought on a judgment of the Su- preme Court of New York on a very similar state of facts. The decision of the English Court was that the law applicable to the case was the law of New York, and that the judgment having been given by a court of competent jurisdiction in a case to which the local law was properly applicable, there was no room to question its correctness in an English court. So far as any opinion was expressed by the Court as to what should have been the decision on the same facts in a case governed by the law of England, it was against any right of action at law being acquired by the bill-holders. This however was by the way, and as a con- cession to the defendants, and is therefore no positive authority. (p) See however Shuey v. United States, p. 20, above. 7 PRINCIPLES OF CONTBACT. 98 Statute of Frauds and contracts by advertise- ment: dicta in Williams e. Byrnes. [*23] person (the sailor), and the person who made the ad- vance could thereupon sue for the promised amount (q). The bearing of the Statute of Frauds on these con- tracts made by advertisements or general offers has been discussed incidentally in a case brought before the Judicial Committee of the Privy Council on appeal from the Supreme Court of New South Wales (r). It is .settled that the 1 requirements of the statute in the cases where it applies are generally not satisfied unless the written evidence of the contract shows who both the contracting parties are. 19 But it was suggested in the Colonial Court that in the case of a proposal made by advertisement, where the nature of the contract (e.g. a guaranty) was such as to bring it within the statute, the advertisement itself might be a sufficient memo- randum, the'other party being -^ indicated as far as the nature of the transaction would admit (s). The Judi- cial Committee, however, showed a strong inclination to think that this view is not tenable, and that in such a case the evidence required by the statute would not be com- plete without some further writing to show who in par- ticular had accepted the proposal. It was observed that as a matter of fact the cases on advertisements had been of such a kind that the statute did not apply to them, and it was a mere circumstance that the adver- tisement was in writing (t). m We are not aware of the point having arisen in any later case. The opinion here expressed by the Court is worth noticing for an- other reason. It is an authority in favour of the view which we have adopted as the only sound one, namely, that there is no anomalous contract, but a contract be- tween ascertained persons, which is constituted by the acceptance of the proposal. (q) See McKune v. Joynson, 5 C. B. N. S. 218; 28 L. J. C. P. 133. These advance notes are now illegal. Merchant Seamen (Payment of Wages and Eating) Act, 43 & 44 Vict. c. 16, s. 2. (r) Williams v. Byrnes, 1 Moo. P. C. C. N. S. 154. (s) Per Stephen, C. J., at pp. 167, 184. (t) See at p. 198. The language of the head-note is mislead- ing; there is no suggestion in the judgment of any such propo- sition of law as that the Statute of Frauds is not applicable to contracts made in this manner. 19 Such a contract must he signed by the party to charged there- with or by some one lawfully authorized by him. Washington Ice Co. v. Webster, 62 Me. 341; Browns. Whipple, 58 N. H. 229; San- born v. Id., 7 Gray, 142; Barry p. Law, 1 Cranch. 77. 20 An oral acceptance of a written proposal to sell goods or land may constitute an agreement that equity will enforce. Sanborn r. Flagler, 9 Allen, 474; Esmay v. Gorton, 18 111. 483; Warner r. Willington, 3 Drew. 523. REVOCATION OF PROPOSAL. 99 Revocation. A proposal may be revoked at any time before ac- Revocation ceptance but not afterwards. 21 of proposal. For before acceptance there is no agreement, and therefore the proposer cannot be bound to anything (m). So that even if he purports to give a definite time for acceptance, he is free to withdraw his proposal before that time has elapsed. " He is not bound to keep it open unless there is a distinct contract to that effect, founded ' on a distinct consideration. If in the morning A. offers Cooke v. goods to B. for sale at a certain price, and gives B. till O xle 7- four o'clock in the afternoon to make up his mind, yet A. may sell the goods to C. at any time before four o'clock, so long as B. ■£ has not accepted his offer (x). [ -^ 24] But if B. -were to say to A. : " At present I do not know, but the refusal of your offer for a definite'time is worth something to me; I will give you so much to keep it open till four o'clock " (or even, it may be, "if you will keep it open till four o'clock," then, in the event of my tak- ing the goods, I will add so much to the price" ) (y), and A. were to agree to this, then A. would be bound to keep his offer open, not by the offer itself, but by the subsequent independent contract. If A. on Wednesday Dickinson v hands to B. a memorandum offering to sell a house at a Dodds. certain price, with a postscript stating that the offer is to be "left over" till nine o'clock on Friday morning, A. may nevertheless sell the house to C. at any time before the offer is accepted by B. If B. having heard of A.'s dealing with C, tenders a formal acceptance to (u) The same rule applies to a proposal to vary an existing agreement: Gilkes v. Leonino, 4 C. B. N. S. 485. (x) Cooker. Oxley, 3 T. E. 653; affd. in Ex. Ch., see note. It. is far from clear what the Court really meant to deeide in that case, and it has been the subject of much criticism. For the con- flicting views see Benjamin on Sale, 66 (3rd ed.),' and Langdell's Summary of the Law of Contracts, p. 246. (y) See G. N. Ey. Co. u. Witham, L. E. 9 C. P. 16: combining this with the principle of Hochster v. De la Tour, 2 E. & B. 678, 22 L. J. Q. B. 455, and Frost v. Knight, L. E, 7 Ex. Ill, one might get the result in the text, sed qu. 21 Weidenu. Woodruff, 38 Mich. 130; Quick v. Wheeler, 78 N. Y. 300; Tucker v. Lawrence, 56 Vt. 467; School Directors v. Tre- fethrem, 10 Bradw. 127; Cheney v. Cook, 7 Wis. 413; Stone v. Harmon, 31 Minn. 512; Goward v. Waters, 98 Mass. 596; Ham- ilton v. Ins. Co., 5 Barr. 339; Wheat Cross, 31 Md. 99; Lung- strass v. German Ins. Co., 48 Mo. 201; Thompson v. James, 18 Dunlop, 1 Kentucky; M. Ins. Co. v. Jenks, 5 Ind. 96; Taylor v. Ins. Co., 9 How. 390. Ti A promise to give time to consider an offer is without con- sideration and does not constitute a contract. Boston & Maine E. E. Co. v. Bartlett, 3 Cush. 224; Hare on Contracts, 342. 100 AGREEMENT, PROPOSAL, AND ACCEPTANCE. A. this is inoperative (z). It is different in the mod- ern civil law. There a promise to keep a proposal open for a definite time is treated as binding, as indeed there appears no. reason why it should not be in a sys- tem to which the doctrine of consideration is foreign: nay, there is held in effect to be in every proposal an implied promise to keep it open for a reasonable time(a). In our own law the effect of naming a definite time in the proposal is simply negative and for the proposer's benefit; that is, it operates as a warning that an ac- ceptance will not be received after the lapse of the time named, not as an undertaking that if given sooner , it shall be. In fact, the proposal so limited comes to [ "^ 25] an end of itself atthe end of that time, and -fa there is nothing for the other party to accept. This leads us to the next rule, namely : — Conditions of Proposal. Determi- The proposer may prescribe a certain time within nation of which the proposal is to be accepted, and the manner proposal a nd form in which it is to be accepted. If no time is b,y lapse of prescribed, the acceptance must be communicated to reasonable n ^ m within a reasonable time. 23 In neither case is the time. acceptor answerable for aay delay which is the conse- quence of the proposer's own default. If no manner or form is prescribed, the acceptance may be communi- cated in any reasonable or usual manner or form. This is almost self-evident, standing alone; we shall see the importance of not losing sight of.it in dealing with certain difficulties to be presently considered. Note, however, that though the proposer may prescribe a form or time of acceptance, he cannot prescribe a form or time of refusal, so as to fix a contract on the other party if he does not refuse in some particular way or within some particular time (ft). 2 * . (s) Dickinson v. Dodds (C. A.), 2 Ch. D. 463. The case sug- gests, but does not decide, another question which will be pres- ently considered. Contra Langdell, Summary, p. 244; and on principle perhaps rightly. (a) Vangerow, Pand. § 603 (3, 253) ; see L. E. 5 Ex. 337, n. (b) Felthouse v. Bindley, 11 C. H. N. S. 869, 875, 31 L. J. C. P. 204. 23 What is reasonable time, is a question of fact for the jury in view of the circumstances. Stone v. Harmon, 31 Minn. 512; Wilson v. Roots, 8 Western Rep. (111.) 67; Washburn v. Fletcher, 42 Wis. 152; Levy v. Cohen, 4 Ga. 1; Falls v. Garther, 9 Port. (Ala.) 614; Averill v. Hedge, 12 Conn. 436; Abbotts Shepherd, 48 N. H. 14. 24 Lapse of time operates as a withdrawal. Maclay v. Harvey, COMMUNICATION OF REVOCATION. 101 Among other conditions, the proposal may prescribe a particular place for acceptance, and if it does so, an acceptance elsewhere will not do (c). The real ques- tion in cases of this kind is whether the condition as to time, place, or manner of acceptance was in fact part of the terms of the proposal. 26 There is direct authority for the statement that the proposal must at all events be taken as limited to a reasonable time (of); nor has it ever been openly dis- puted. The rule is obviously required by convenience and justice. It may be that the proposer has no means of making a revocation -fc known (e. g., if the other [ "Jc 26] party changes his address without notice to him, or goes on a long journey), and he canrjot be expected to wait for an unlimited time. There is also direct author- ity to show that an acceptance not communicated to the proposer or his agent does not make a contract (e); but this is subject to an important exception, as we shall presently see, where the parties are in correspon- dence through the post-office. Limits of Revocation. A proposal is revoked by communication to the other Revocation party of the proposer's intention to revoke it, and the ot proposal revocation can take effect only when that communica- J^Lu^j. tion is made before acceptance. • rated before The communication may be either express or tacit, acceptance, and notice received in fact, whether from the proposer or from any one in his behalf or otherwise, is a suffi- cient communication. The rule involves two or three points which, strange Revocation to say, were not expressly disposed of by any English after accept- authority until quite lately. The first is that an ex- ance too late, press revocation communicated after acceptance, though determined upon before the date of the acceptance, is (c) Eliason v. Henshaw (Sup. Ct. U. S.), 4 Wheat. 225, Lang-f dell, Sel. Ca. on Cont. 48. (d) Baily'sca., 5 Eq. 428, 3 Ch. 592; Ramsgate Hotel Co. v. Montefiore, same Co. v. Goldsmid, L. R. 1 Ex. 109. (e) M'lver v. Richardson, 1 M. & S. 557; Mozley v. Tinkler, 1 CM. & R. 692; Russell v. Thornton, 4 H. & N. 788, 798, 804; Hebb's ca., 4 Eq. 9. 90 111. 525, and see Lewis v. Browning, 130 Mass. 173; McCul- lough v. Eagle Ins. Co., 1 Pick. 278. 25 The place of performance of a contract may be in another State, and that does not render it invalid in the latter. Fitz- simmons v. Guanahni, 16 S. C. 192; Carnahan v-. Western Union Tel. Co., 89 Ind. 626; Maine v. Butler, 130 Mass. 196; Warner ». Jaffray, 96 N. Y. 248; Davis i\.Bronson, 6 Iowa, 410. 102 Byrne v. Van Tien- hoven. [*27] As to tacit revocation. too late. This was decided in 1880 first by Lindley, J. in Byrne v. Van Tienhoven (/), and again shortly after- wards by Lush, J. in Stevenson v. MacLean (g). It will suffice to give shortly the facts of the former case. The defendants at Cardiff wrote to the plaintiffs at New York on the 1st Of October, 1879, offering for sale 1000 boxes of tinplates on certain terms. Their letter was received on the 11th, and on the same day the plaintiff accepted the offer by telegraph, confirming this by a letter sent on the 15th. Meanwhile -^ the defendants on the 8th of October had posted a letter withdrawing their offer of the 1st: this reached the plaintiff on the 20th. The plaintiff insisted on completion of the con- tract; the defendants maintained that there was no con- tract the offer having been, in their view, withdrawn before the acceptance was either received or dispatched. Lindley, J. stated as follows the questions to be con- sidered: "1. Whether a withdrawal of an offer has any effect until it is communicated to the person to whom the offer has been sent P* 2. Whether posting a letter of withdrawal is a communication to the person to whom the letter is sent?" 27 The first he answered in the negative, on the principle " that a state of mind not notified cannot be regarded in dealings between man and man, and that an uncommunicated revocation is for all practical purposes and in point of law no revo- cation at all." The second he likewise answered in the negative, on grounds of both principle and convenience, and notwithstanding an apparent, but only apparent, inconsistency with the rule as to acceptances by letter which will be presently considered. It seems impossible to find any reason in principle why the necessity for communication should be less in the case of a revocation which is made not by words but by conduct, as by disposing to some one else of a thing offered for sale. Nor does it seem practicable in the iface of the decisions just- cited, though they do not actually cover such a case, to say that any such differ- ence is recognized by the law of England. The au- thority most in point, Dickinson v. Dobbs (h), is not of (/I 5C. P. D. 344. ! (g) 5 Q. B. D. 346. Both these judges afterwards became mem- bers of the Court of Appeal. (ft) 2 Ch. D. 463 (C. A.) One or two immaterial details are omitted in stating the facts. 26 See Craig v. Harper 3 Cush. 158; Johnson v. Fessler, 7 Watts, 48; Brisban v. Boyd, 4 Paige, 17; Hallock v. Ins. Co., 26 N. J. L. 268. 27 See case of Brogani). B. W. Co., L. B. 2, H. L. 691. COMMUNICATION OF REVOCATION. 103 itself decisive. The facts were these. A. offered in writing to sell certain houses to B., adding a statement that the offer was to be "left over" until a time named; which statement, as we have already seen, could have no legal effect unless • to warn B. that an acceptance would not be received at any later time. B. made up his -^- mind the next morning to accept, but delayed [ •£ 28] communicating his acceptance to A. In the coarse of the day he heard from a person who was acting as his agent in the matter that A. had meanwhile offered or agreed to sell the property to C. Early on the follow- ing day (and within the time limited by A.'s memo- randum) B. sought out A. and handed a formal accept- ance to him; but A. answered, "You are too late. I have sold the property." It was held in the first in- stance by Bacon, V. C, that A. had made to B. an offer which up to the time of acceptance he had not revoked, and that consequently there was a binding contract be- tween A. and B. But in the Court of Appeal this de- cision was reversed. James and Mellish, L. JJ., pointed oat that, although no "express and actual withdrawal of the offer" had reached B., yet by his own showing B., when he tendered his acceptance to A., well knew that A. had done what was inconsistent with a continu- ed intention of contracting with B. Knowing this B. could not by a formal acceptance force a contract on A. (i). It does not appear that the knowledge which B. in fact had was conveyed to him or his agent by or through A., or any one intending to communicate it on A.'s behalf. Therefore the case decides that knowledge in point of fact of the proposer's changed intention, however it reaches the other party, will make the pro- poser's conduct a sufficient revocation. But what if B. had communicated his acceptance to A. without know- ing anything of A.'s dealings with C. ? This question remains open, and must be considered on principle. Suppose that A. offers to sell one hundred tons of iron Possibility to B., not designating any specific lot of iron, and that of double ac- B. -jf desires time to consider, and A. assents. Then A. ceptance. meets with C, they talk of the price, of iron, and C. [ "A" 29] offers A. a better price than he has asked from B., and they strike a bargain for a hundred tons. Then B. (t) Baggallay, J. A. concurred. The head-note says: "Semble, that the sale of the property to a third person would of itself amount to a withdrawal of the offer, even although the person to whom the offer was first made had no knowledge of the sale." This, I venture to think, (and so do the learned editors of Ben- jamin on Sale, 3rd ed.) is quite unwarranted by the judgments. See especially the remarks of Mellish, L. J. ad fin. 104 AGREEMENT, PROPOSAL. AND ACCEPTANCE. returns, and in ignorance of A.'s dealings with C. ac- cepts A.'s offer formerly made to him. Here are mani- festly two good contracts. A. is bound to deliver 100 tons of iron to B. at one price, and 100 tons to C. at another. And if A. has in fact only one hundred tons, and was thinking only of those hundred tons, it makes no difference. He would be equally bound to B. and C. if he had none. He must deliver them iron of the quantity and quality contracted for, or pay damages. How then will the case stand if, other circumstances being the same, the dealing is for specific goods, or for a house ? Here it is impossible that A. should perform his agreement with both B. and C, and therefore they cannot both make him perform it; but that is no reason why he should not be answerable to both of them. The one who does not get performance may have damages. It remains to ask which of them shall have the option of claiming performance, if the contract is otherwise such that its performance can be specifically enforced. The most convenient solution would seem to be that he whose acceptance is first in point of time should have the priority: for the preference must be given to some one, and the first acceptance makes the first complete contract. There is no reason for making the contract relate back for this purpose to the date of the proposal. This is consistent with everything that was decided, if not with everything that was said, in. Dickinson v. Dodds (k). It is right to add that Cooke v. Oxley (I) may be so read as to support the opinion that a tacit revocation need not be communicated at all. But the apparent [ "^ 30] inference to -^-this effect is expressly rejected in Steven- son v. MacLean (m), and therefore need not be dis- cussed here. » Opinions of Boman law supplies no direct answer to questions of Continental this class, and not much that tends to suggest one. writers. Modern civilians have differed greatly in their opinions. Pothier lays down a rule directly contrary to that now settled in our law. The passage (Contr. de Vente, § 32 ) is well known, and may also be seen, but slightly abridged in Mr. Benjamin's work on Sale (p. 73). Pothier does not fail to see the manifestly unjust consequences of letting a revocation take effect, though the other party has received, accepted, and acted upon the pro- (le) 2 Ch. D. 463. Note that the suit was for specific perform- ance and cp. Langdell, Summary, 245-6, and Anson, 28-30. (0 3 T. R. 653. (m) 5 Q. B. D. at p. 351. COMMUNICATION QF REVOCATION. 105 posal without knowing anything of the proposer's in- tention to revoke it; but he escapes them by imposing an obligation on the proposer, upon grounds of natural ' equity independent of contract, to indemnify the party so accepting against any damage resulting to him from the transaction. This treatment of the subject wholly overlooks the consideration that not intention in the abstract, but communicated intention, is what we have to look to in all questions of the formation of con- tracts (w). And the obligation to indemnify (which must be classed as quasi ex delicto if anything) is not only a cumbrous and inelegant device, but as Mr. Ben • jamin points out, overshoots its mark by being in turn unfair to the proposer. The same or a closely similar view has been taken by some recent German writers of repute (o). Far more satisfactory in Vangerow (Pand. § 603), whose opinion is to this effect. The declara- tion of an animus contrahendi (whether by way of proposal or of acceptance), when once made, must be regarded as continuing so long as no revocation of it is communicated to the other party. A revocation not communicated is in point of law no revocation at all. In this respect the "^-revocation of a proposal or accept- [ ^ 31] ance must be governed by the same rules as the pro- posal or acceptance itself. Limits of Acceptance or of its Revocation. An acceptance must be communicated to the proposer Acceptance to be effectual, and the communicaiion of an acceptance or revocation or of its revocation is subject to the same rules as the * hereof m ust ,. » t „ ., ,." be commum- commumcation or a proposal or of its revocation: pro- ca t e( j like vided that any means of communication prescribed or proposal, authorized by the proposer are as against»him deemed subject to sufficient. 28 proviso that If the proposer prescribes or authorizes the despatch authorized of an acceptance by means wholly or partly beyond the by proposer, sender's control, such as the public post or telegraph, and in par- then an acceptance so despatched ticular de- fa) is complete as against the proposer from the time a n Swer Dy of its despatch out of the sender's control; 29 post, are (n) Leake Elementary Digest of the Law of Contracts, 44 n. „,«:,«„,+ (o) Windscheid, Pand. § 307, citing among others Ihering,who calls the right acquired on this theory by the acceptor without notice of revocation ''das negative Veretragsinteresse. " So too Bell, Principles of the Law of Scotland, § 73. 28 Taylor v. Renner, 35 Barb. 272; Chicago R. R. Co. v. Dane, 43 N. Y. 240. 29 Lewis v. Browning, 130 Mass. 172; Maclayu Harney, 90 111. 525. 106 AGREEMENT, PROPOSAL, AND ACCEPTANCE. General rule of communi- cation. [*32] Agreement to take shares not excep- tionally treated. Difficulties as to con- tracts by- correspon- dence. (b) is effectual notwithstanding any miscarriage or delay in its transmission happening after such despatch. It should seem obvious that, as a matter of general principle, an uncommunicated mental assent cannot make a contract. Yet as lately as 1877 it was found needful to reassert this principle in the House of Lords (p). It is true that the proposer may dispense with actual communication to this extent, that by pre- scribing a particular manner of communication he may preclude himself from afterwards showing that it was not in fact sufficient. In Lord Blackburn's words, " when an offer is made to another party, and in that offer there is a request express or implied that he must signify his acceptance by doing some particular thing, then as soon as he does that thing there is a complete contract" (q)- 30 The most important application of this -fa exception will come before us immediately. But it is not true " that a simple acceptance in your own mind, without any intimation to the other party, and expressed by a mere private .act, such as putting a letter into a drawer," will, as a rule, serve to conclude a contract. It was supposed at one time that the Companies Act, 1862, had introduced a different rule in the case of agreements .to take shares, and that an applicant for shares became a shareholder by mere allotment and reg- istration, though nothing were done to give notice to him; but it is now settled that this is not so; the ordi- nary rules as to the formation of contracts must be ap- plied (r). Bearing in mind what these rules are for simple cases, let us proceed to more complex ones. The proviso above given and the explanation follow- ing it are intended to express the rules which, after much uncertainty, have at length been settled by our Courts as to contracts entered into by correspondence between persons at a distance. Before dealing with (p) Brogden v. Metropolitan Ey. Co., 2 App. Ca., at p. 688 (Lord Selborne), at p. 691 (Lord Blackburn), and at p. 697 (Lord Gordon). The judgments in the Court below which gave rise to these remarks are not reported. (q) Yet would this hold if the prescribed act were not of a kind fitted to make the acceptor's intention known to the proposer? (r) Gunn's case, 3 Ch. 40. There need not be formal notice oi allotment; actirfg towards the applicanton the footingthathehas got the shares, f. g. appointing him to an office under the com- pany for which the shares are a necessary qualification, is enough. This of course is quite in accordance with general principles. Richards v. Home Assurance Association, L. R. 6 C. P. 591. 30 Russell v. Perkins. 1 Mason (U. S.), 368; Bleeker v. Hyde, 3 McLean, 279; Grant v. Naylor, 4 Cranch, 224; Taylor v.' Wet- more, 10 Ohio, 490. CONTRACTS BY CORRESPONDENCE. 107 authorities it may be useful to show the general nature of the difficulties that arise. We start with the princi- ple that the proposer is bound from the date of accept- ance. Then we have to consider what is for this pur- pose the date of acceptance, a question of some per- plexity, and much vexed in the books. It appears just and expedient, as concerning the accepting party's rights, that the acceptance should date from the time when he has done all he can to accept, by putting his affirmative answer in a determinate course of transmis- sion to the proposer. 31 From that time he must be free to act on the contract as valid, and disregard any revo- cation that reaches him afterwards. Hence the conclu- sion is suggested that at this point the contract is -fa ir- [ -^ 33] revocable and absolute. But are we to hold it absolute for all purposes, so that on the one hand the acceptor shall remain bound, though he should afterwards des- patch a revoeation which arrives with or even before tho acceptance; and on the other hand, the proposer shall be bound, though, without any default of his own, the acceptance never reach him ? These consequences seem, in turn, against reason and convenience. The proposer cannot, at all events, act on the contract before the ac- ceptance is communicated to him; as against him, there- fore, a revocation should on principle be in time if it reaches him together with or before the original accept- ance, whatever the relative times of their despatch. On the other hand, it seems not reasonable that he should be bound by an acceptance that he never receives. He has no means of making sure whether or when his pro- posal has arrived (s), or whether it is or not accepted, for the other party need not answer at all. The ac- ceptor might at least as reasonably be left to take the risk of his acceptance miscarrying, for in practice he can easily take means, if he think fit, to provide against this. In the judicial treatment of these questions, how- Theories ever, considerations of a different kind have prevailed, implied in It has been generally assumed that there must be some En g lisn one moment at which the consent of the parties is to cl oc trine of be deemed complete, and the contract absolute as common against both of them, and for all purposes (as if it agency of _ post-office. (s) The German post-office, however, undertakes (if required at the time of posting) to furnish the sender of any letter with an official certificate of its "delivery. 31 Hamilton v. Lycoming Ins. Co., 5 Pa. St. 339; Palmer v. Phenix, etc., L. Tns. Co., 84 N. Y. 63; Chiles v. Nelson, 7 Dana (Ky.), 281. 108 AGREEMENT, PROPOSAL, AND ACCEPTANCE. [*S4] Doctrine of proposer's risk derived from his authorizing answer by post. were a question of some mysterious virtue inherent in the nature of the transaction, and not of positive rules of law); and further, a peculiar character has been attributed to the post-office as a medium of communi- cation. In some of the cases it is said that the accept- ance of a proposal by post completes the contract as soon as the letter is dispatched, because the post-office is the common agent for both parties. Doubtless the postmaster-general is the agent of every one who sends a letter, -^ for the purpose of conveying that letter (though an agent who cannot be sued); but how this supposed common agency for two parties in correspon- dence is constituted or proved I confess myself unable to understand. Perhaps this language was really in- tended to convey, by means of a fiction, what has been more plainly said in the latest and decisive case, and is given above as the ground of the English rule; namely, that a man who requests or authorizes an acceptance of his offer to be sent in a particular way must take the risks of the mode of transmission which he has author- ized, and that in the common course of affairs the send- ing of a written offer by post amounts to an authority to send the answer in the same manner: But there is a fiction in this also. The reason would be good in the case of a man desiring an answer to be sent to him by some extraordinary means of communication, by photo- phone, for example. But the post (which may now be said to include, the telegraph) is the common and nat- ural, or, in terms familiar to the law, reasonable and usual means of communication between persons who are not face to face. This is no real authority or re- quest, for none is needed. People use the post-office as a matter of course. Even when a man desires an answer by return post, he is not thinking of the an- swer being sent by post rather than in any other way, but of having it within a given time. Could it beheld that an answer by telegraph would not be a good ac- ceptance of a proposal in this form, or that it would not have been so before the telegraphs had been acquir- ed by the postoffice ? The proposer of a contract by letter does not really choose the post as a means of communication more than the acceptor. Everybody knows that there is practically no choice. Our received doctrine first assumes a fictitious request, and thence infers a fictitious agreement to take* all risks of transit, not only the risk of delay, but that of the acceptance not being delivered at all. Much of the language that has been used suggests the extreme consequence that CONTRACTS BY CORRESPONDENCE. 109 even a revocation -^- despatched after the acceptance [ + 35] and arriving before it would be inoperative. If the Revocation contract is absolutely bound by posting a letter of ac- av "ving ceptance, a telegram revoking it would be too late; and befor + this even if the letter never arrived at all, so that the acceptance - revocation were the only notice received by the proposer that there ever had been an acceptance. It is hard to believe that any Court would decide this: in Scotland, indeed, it has been decided the other way (t). The case, meanwhile, may arise in England any day. No satisfactory solution of these problems can in truth be attained without frankly taking account of their prac- tical character. The thing sought should be to lay down such rules as would produce the least amount of inconvenience to both parties. Legal ingenuity might afterwards exercise itself in expressing the rules in the form most consonant with real or supposed first prin- ciples. However, we now have a settled rule on all points except that of a revocation outstripping the ac- ceptance; and any settled rule is better than none. The earlier cases, of which an account is given in Earlier the Appendix (t), are now of comparatively little im- cases on portance. They established that an acceptance by post, contracts by- despatched in due time as far as the acceptor is con- ^orrespon- cerned, concludes the contract notwithstanding delay in the despatch by the proposer's fault (as if the offer is misdirected), or accidental delay in the delivery ; and that the contract, as against the proposer, dates from the posting, so that he cannot revoke his' offer after the acceptance is despatched. Until 1879 it was uncertain whether a letter of acceptance that miscarried alto- gether was binding on the proposer. 32 In that year the very point came before the Court of Appeal (u). An application for shares in. the plaintiff company, .whose office was in London, was handed by the defendant to a country agent for the company. A letter of allot- ment, duly addressed to the defendant, was posted ■^- from the London office, but never reached him. The [ -^ 36] company went into liquidation, and the liquidator sued for the amount due on the shares. It was held by Thesiger and Baggallay, L. JJ., that on the existing au- thorities (which were carefully reviewed) "if an offer is made by letter, which expressly or impliedly author- (0 See Note B. (u) Household Fire Insurance Co. v. Grant, 4 Ex. D. 216. 32 Saveland v. Green. 40 Wis. 431; Minnesota Oil Co. v. Collier Lead Co., 4 Dil. 431; Trevor v. Wood, 36 N. Y. 307. 110 AGREEMENT, PROPOSAL, AND ACCEPTANCE. izes the sending of an acceptance of such offer by post, and a letter of acceptance is posted in due time, a com- plete contract is made at the time when the letter of acceptance is posted, though there may be delay in its delivery " (a;) 33 ; that, on the grounds and reasoning of the authorities, this extends to the case of a letter wholly failing to reach its address ; that in the case in hand the defendant must under the circumstances be taken to have authorized the sending by post of a letter of allotment ; and that in the result he was bound. The rule, it seems, is to be taken as limited " to cases in which, by reason of general usage, or of the relations be- tween the parties to any particular transactions, or of the terms in which the offer is made, the acceptance of such offer by a letter through the post is expressly or * impliedly authorized" (y). Cases outside these limits, however, are not likely to be frequent. Nothing was said by the majority of the Court about the contin- gency of a revocation overtaking the acceptance. 3 * Bramwell, L.J. delivered a vigorous dissenting judg- ment, in which he pointed out among other things the absurdity of treating such a revocation as ineffectual. But he relied mainly on the broad ground that a letter not delivered at all " is not a communication, and that there is no agreement to take it as an equivalent for or to dispense with a communication " (z). It is perhaps not too presumptuous to regret that this view did not pre- vail. But the result must be taken, we think, as final. It will be seen by reference to the Appendix tbat it is not simply a decision by the Court of Appeal, but a con- [ "A" 37] firmation by -^ the Court of Appeal of that sense in which a previous decision of the House of Lords has on the wh.ole been generally understood. The practical conclusion seems to* be that. every prudent man who makes an offer of any importance by letter should ex- pressly make it conditional on his actual receipt of an acceptance within some definite time. It would be im- possible to contend that a man so doing could be bound by an acceptance which either wholly miscarried or ar- rived later than the specified time (a). (re) Baggallay, L. J. 4 Ex. D. at p. 224. (y) Baggallay, L. J. at p. 228 ; the same limitation seems ad- mitted by Thesiger, L. J. at p. 218. (s) 4 Ex. D. at p. 234. (a) See per Thesiger, L. J. 4 Ex. D. at p. 223, and per Bram- 83 Leake on Contracts, 43; Benjamin on Sales, 56 & 58. 34 Parsons on Contracts, 484; Hutcheson v. Blakeman, 3 Met. (Ky.) 80. CONTRACTS BY CORRESPONDENCE. 11] We have seen that in general the contract dates from Acceptance the acceptance; and though the acceptance be in form w °n't relate an acknowledgment of an existing agreement, yet this retros^ectfve will not make the contract relate back to the date of the in form, proposal, at all events not so as to affect the rights of third persons (6). There is believed to be one positive exception in our Death of law to the rule that the revocation of a proposal takes proposer: effect only when it is communicated to the other party. sem Ue, an This exception is in the case of the proposer dying be- a ™ P i u +? fore the proposal is accepted. This event is in itself a though not revocation, as it makes the proposed agreement impos- known to sible by removing one of the persons whose consent other party, would make it (c). 35 There is no distinct authority to show whether notice to the other party is material or not; but in the analogous case of agency the death of the principal in our law, though not in the civil law, puts an end ipso facto to the agent's authority, with- out regard to the time when it becomes known either to the agent or to third parties (d). 36 It would probably be impossible not to follow the analogy of this doctrine. The Indian Contract Act makes the knowledge of the other party before acceptance a condition -^ of the pro- [ "^ 38] posal being revoked by the proposer's death. As for Insanity no insanity, which is treated in the same way by the Indian revocation. Act, that would not in general operate as a revocation by the law of England, for we shall see that the con- tract of a lunatic (not so found by inquisition) is only voidable even if his state of mind is known to the other party. But it has been said that "if a man becomes so far insane as to have no mind, perhaps he ought to be deemed dead for the purpose of contract- ing" (e) 37 _____ well, L. J. at p. 238. Held ace. in Massachusetts : Lewis v. Browning, 130 Mass. 173 (1880). (6) Felthouse v. Bindley, 11 C. B. N. S. 869, 31 L. J. C.P. 204. (e) Per Mellish, L. J. in Dickinson v. Dodds, 2 Ch. D. at p. 475. (d) Blades v. Free, 9 B. & C. 167; Campanari v. Woodburn, 15 C. B. 400, 24 L. J. C. P. 13, 2 Kent Comm. 646, D. 46, 3, de solut. et liberat. 32. The Indian Contract Act, s. 208, illust. (c), adopts the rule of the civil law. (e) Bramwell, L. J., Drew v. Nun, 4 Q. B. D. at p. 669. 35 Scully t>. Kirkpatrick, 29 P. P. Sm. 324; Hayes v. Willio, 4 Daly, 259; Martin v. Hunt, 1 Allen, 418. 36 ' Saltmarsh v. Smith, 32 Ala. 404; Donald v. Black, 20 Ohio, 185: Lehigh Coal Co. v. Mohr, 2 Norris, 228; Michigan Ins. Co. v. Leavenworth, 30 Vt. 11. 87 Davis v. Lane, 10 N. H. 156; Hill v. Day, 7 Stew. Ch. 150. The principal's insanity does not terminate an agency coupled with an interest. 112 Acceptance must be un- qualified. [*39] Instances of insufficient acceptance. Certainty of Acceptance. The next rule is in principle an exceedingly simple one. It is that "In order to convert a proposal into a promise the acceptance must, be absolute and unqualified" (/). 3S For unless and until there is such an acceptance on the one part of terms proposed on the other part, there is no expression of one and the same common intention of the parties, but at most expressions of the more or less different intentions of each party separately — in other words, proposals and counter-proposals. 39 Simple and obvious as the rule is in itself, the application to a given set of facts is not always obvious, inasmuch as contracting parties often use loose aDd inexact language, even when their communications are in writing and on important matters. It will be seen that the question whether the language used on a particular occasion does or does not amount to an acceptance is wholly a question of construction, and generally though not necessarily the construction of a written instrument. The cases in which such questions have been decided are numerous (g), and we shall here give by way of illustration only a few of the more recent ones (h). ■y^-In Honeyman v. Marryat (i), before the House of Lords, a proposal for a sale was accepted " subject to the terms of a con- tract being arranged " between the vendor's and purchaser's so- licitors: this was clearly no contract. Compare with this Hussey v. Home Payne (Ic), from which it seems that an acceptance of an offer to sell land '' subject to the title being approved by our so- licitors " is not a qualified or conditional acceptance, but means only that the title must be investigated in the usual way; in other words, it expresses the conditions annexed by law to con- tracts of this class, that a good title shall be shown by the vendor. (/) Indian Contract Act, s. 7, sub-s. 1. (g) For collected authorities, see (inter alia) Pry on Specific Performance, c. 2. (h) Cp. also the French case in the Court ot Cassation given in Langdell's Select Cases on Contract, 155. (i) 6 H. L. C. 112, by Lord Wensleydale. The case was not argued, no one appearing for the appellant. (fc) 4 App. Ca. 311, 322. 38 Baker v. Johnson County, 37 Iowa, 189; Jennesv. Mt. Hope Iron Co., 53 Me. 20; Snydam v. Clark, 2 Sandf. Superior, 133; Chicago, etc. E. Co. v. Done, 43 N. Y. 240. s9 Eliason v. Henshaw. 4 Wheaton, 225; Utley v. Donaldson, 94, TJ. S. 48; Potts v. Whitehead, 8 C. E. Green, 512; Hoyt i>. Brown, 19 N. Y. 111. INSUFFICIENT ACCEPTANCE. 113 In Appleby v. Johnson (I), the plaintiff wrote to the defendant, a calico-printer, and offered his services as salesman on certain terms, among which was this: "a list of the merchants to be regularly called on by me to be made." The defendant wrote in answer: " Yours of yesterday embodies the substance of our conversation and terms. If we can define some of the terms a little clearer, it might prevent mistakes; but I think we are quite agreed on all. We shall therefore expect you on Monday. (Signed)— J. Appleby. — P.S. — I have made a list of customers which we can consider together. ' ' It was held that on the whole, and especially having regard to the postscript, which left an im- portant term open to discussion, there was no complete contract. In Orossley v. Maycock {in) an offer to buy certain land was ac- cepted, but with reference to special conditions of sale hot before known to the intending purchaser. Held only a conditional ac- ceptance. In Stanley v. Dowdeswell (n) an answer in this form: " I have decided on taking No. 22, Belgrave Road, and have spoken to my agent Mr. C, who will arrange matters with you," was field insufficient to make a contract, as not being complete and un- qualified, assuming (which was doubtful) that the letter of which it was part did otherwise sufficiently refer to the terms of the proposal. In AddineWs case (o) and Jackson v. Turquand (p), a. bank is- sued a circular offering new shares to existing shareholders in proportion to their interests, and also asking them to say if in the event of any shares remaining they should wish to have any more. Certain shareholders wrote in answer, accepting their proportion of shares, and also desiring to have a certain number of additional shares, if they could, on the terms stated in the circular. In reply to this the directors sent them notices that the additional shares had been allotted to them, and the amount must be paid to the bank by a day named, or the shares would be forfeited. It was held by Kindersley, V.-C, and confirmed by the House of Lords, that as to the first or proportional set of shares the shareholder's letter was an acceptance constituting a contract, but as to the -^ extra shares it was only a proposal; [ «^f 40 J and that as the directors' answers introduced a material new term (as to forfeiture of the shares if not paid for within a cer- tain time), there was no binding contract as to these. In Wynne's case (q) two companies agreed to amalgamate. The agreement was engrossed in two parts, and contained a covenant (it) L. R. 9 C. P. 158. (m) 18 Eq. 180. (n) L. R. 10 C. P. 102. Compare Smith v. Webster, 3 Ch. D. 49. (o\ 1 Eq. 225. (p) L. R. 4 H. L. 305. \q) 8 Ch. 1002. 8 PRINCIPLES OP CONTRACT. 114 AGREEMENT, by the purchasing company to pay the debts of the other. But the purchasing company (which was unlimited) before execut- ing its own part inserted a proviso limiting the liability of its members under this covenant to the amount unpaid on their shares.. This being a material new term, the variance between the two parts as executed made the agreement void. In this, and later in Beck's case (r), in the same winding-up, a share- holder in the absorbed company applied for shares in the pur- chasing company credited with a certain sum according to the agreement, and received in answer a 1 etter allotting him shares to be credited with a "proportionate amount of the net assets" of his former company. It was held that, apart from the ques- tion whether the allotment was conditional on the amalgama- tion being valid, there was no contract to take the shares. Instances of ® a * ue other hand, the following instances will show that the sufficient ac- rule must be cautiously applied. An acceptance may be com- ceptance. plete though it expresses dissatisfaction at some of the terms, if the dissatisfaction stops short of dissent, so that the whole thing may be described as a " grumbling assent " (s). Again, an acceptance is of course not made conditional by ad- ding words that in truth make no difference; as where the addi- tion is simply immaterial (<), or a mere formal memorandum is enclosed for signature, but not shown to contain any new term («). And further, if the person answering an unambigu- ous proposal accepts it with the addition of ambiguous words, which are capable of being construed consistently with the rest of the document and so as to leave the acceptance absolute, they will if possible be so construed (x). And perhaps it is in like manner open to the accepting party to disregard an insensible or repugnant qualification annexed to the proposal: as where a man offers to take shares in a company, "if limited," which in con- templation of law he must know to be not limited, and the di- rectors allot shares and notify the allotment to him without tak- ing any notice of the attempted qualification. But in the case referred to this view is not necessary to the result; for the appli- cant wrote a second letter recognizing the allotment. The letter of allotment might therefore be treated as a counter-proposal — namely, to allot shares in a company not limited — of which this- last was the acceptance (y). And in fact there is one case some- r jA-41] what against the -fa view here suggested: the letter of allotment was iheaded ' ' hot transferable. ' ' apparently through a mere mis- (r) 9 Ch. 392. (s) Joyce v. Swann, 17 C: B. N. S. 84; cp. per Lord St. Leon- ards, 6 H. L. C. 277-8 (in a dissenting judgment!). (t) Clive v. Beaumont, 1 De G. & S. 397. (Ik) Gibbons r. N. E. Metrop. Asylum District, 11 Beav. 1. (x) English & Foreign Credit Co. v. Arduin, L. E. 5 H. L. 64; per Lord Westbury, at p. 79. (^) Perrett's ca., 15 Eq. 250. CONSENT WHEN PINAL. lift take of law, so that on a fair construction it would seem to have been, not a really conditional acceptance, but an acceptance with an imaginary and illusory condition, wrongly supposed to be im- plied in the nature of the transaction : but it was held that no contract was constituted (z). Again, the unconditional acceptance of a proposal is not de- prived of its effect by the existence of a misunderstanding be- tween the parties in the construction of collateral terms which are not part of the agreement itself (a). One further caution is needed. All rules about the Parties may formation and interpretation of contracts are subject to postpone the implied proviso, " unless a contrary intention of the conclusion -of parties appears." And it may happen that though the though ' parties ai'e in fact agreed upon the terms — in other words agreed on the though there has been a proposal sufficiently accepted terms, till_ to satisfy the general rule — yet they do not mean the emD0< J ied in i i. c i-- j- • i i-n -i. ■ j. ■ i. -j. more formal agreement to be binding in law till it is put into writ- instrument. ing or into a formal writing. If such be the under- ' standing between them, they are not to be sooner bound against both their wills. " If to a proposal or offer an assent be given subject to a provision as to a contract, then the stipulation as to the contract is a term of the assent, and there is no agreement independent of that stipulation"(6): Whether such is in truth the under- standing is a question which . depends on the circum- stances of each particular case; if the evidence of an agreement consists of written documents, it is a ques- tion of construction. (not subject to any fixed rule of presumption) whether the expressed agreement is , final (c). 40 It is not to be supposed, "because persons wish to have a formal agreement drawn up, that therefore they cannot be bound by a previous agreement, if it is clear that such an agreement has been made; but the circum- stance that •£ the parties do intend a subsequent [«^42] agreement to be made is strong evidence to show that they did not intend the previous negotiations to amount to an agreement " (d). Still more is this the case if (z) Duke v. Andrews, 2 Ex. 290. (a) Baines v. Woodfall, 6 C. B. N. S. 657, 28 L. J. C. P. 338. The facts unfortunately do not admit of abridgment. (A) Chinnock «. Marchioness of Ely, 4 D. J. S. 638, 646. (e) Rossiter v. Miller, 3 App. Ca. 1124, 1152. (d) Ridgway v. Wharton, 6 H. L. C. 238, 264, 268, per Lord * Cran worth, C, and see per Lord Wensleydale at pp. 305 — 6. 40 The doing of a thing pursuant to an offer may be both an ; acceptance and performance. Street v. Chapman, 29 Ind. 142, < Woodworth v. Wilson, 11 La. An. 402. 116 AGREEMENT, PROPOSAL, AND ACCEPTANCE. the first record oE the terms agreed upon is in so many words expressed to be " subject to the preparation and approval of a formal contract" (e). But again: "it is settled law that a contract may be made by letters, and that the mere reference in them to a future formal con- tract will not prevent their constituting a binding bar- gain" (/). And in Brogdenv. Metropolitan Ry. Co. (g), it was held by the House of Lords that the conduct of the parties, who in fact dealt for some time on the terms of a draft agreement which had never been formally ex- ecuted, was inexplicable on any other supposition than that of an actual though informal consent to a contract upon those terms. The tendency of recent authorities is to discourage all attempts to lay down any fixed rule or canon as govern- ing these case3. The question may, however, be made clearer by putting it in this way — whether there is in the particular case a final consent of the parties such that no new term or variation can be introduced in the formal document to be prepared (h). Agreement must be certain. [•«] Certainty of Terms. An agreement is not a contract unless its terms are certain or capable of being made certain. For the Court cannot enforce an agreement without knowing what the agreement is. 41 Such knowledge can be derived only from the manner in which the par- ties have expressed their intention. If that expression has no -^- definite meaning there is nothing to go upon. The parties may have come to a real agreement, but they must take the consequences of not having made it intelligible. Thus a promise by the buyer of a horse that if the horse is lucky to him, he will give 5Z. more, or the buying of another horse, is " much too loose and vague to be considered in a court of law." " The buying of another horse " is a term to which the Court cannot assign any definite meaning (i). Questions of this kind, however, as' well as those we spoke of in the last paragraph, arise chiefly where the alleged contract is (e) Winn v. Bull, 7 Ch. D. 29. (/) James. L. J., in Eonnewell v. Jenkins, 8 Ch. D. 70, 73. (g) 2 App. Ca. 666: see Lord Cairns*'opinion. (h) Loird Blackburn, 3 App. Ca. at p. 1151. In addition to cases already cited see Lewis v. Brass, (C. A.) 3 Q. B. D. 667. 0') Guthing v. Lynn, 2 B. & Ad. 232. 41 As to meaning of terms and words see 1 Greenleaf on Ev. Sec. 5, Bishop Dir. & F. sec. 619, Stephen v. State, 11 Ga. 225; Mosclay v. Mastin, 37 Ala. 216. UNCERTAINTY OF PROMISE. 1X7 evidenced by_ writing; and further, the importance of the rule depends chiefly if not wholly on the more gen- eral role of evidence which forbids the contents or con- struction of an instrument in writing to be varied or supplemented by word of month. Certain aspects of this rule will come before us in a later chapter. On the rules of construction in general we do not enter; but we may mention shortly as a thing to be borne in mind, that words are to be taken in the sense in which they were understood by the parties using them; and that, in the absence of anything to show that a different meaning was contemplated, is the sense in which a reasonable man conversant with affairs of the kind in which the contract is made would understand them. The question then is, can such a sense be arrived at with reasonable certainty ? One or two instances will serve as well as many. An agreement to sell an estate, reserv- ing " the necessary land for making a railway," is too vague-(fc). An agreement to take a house " if put into thorough repair," and if the drawing-rooms were " hand- somely decorated according to the present style," has also been dismissed as too uncertain to be enforced (I). One might at first sight think it not beyond the power of a reasonable man or twelve reasonable men -fa fairly ac- [ -^-44] quainted with dwelling-houses to say whether the re- pairs and decorations executed in a particular house do or do not answer the above description. It must be ob- served, however, that this was a suit for specific per- formance; a remedy which was often refused by the Court of Chancery without deciding whether or not a contract existed. On the other hand an agreement to execute a deed of separation containing "usual cove- nants " is nottao vague to be enforced (m). i2 To this head those cases are perhaps best referred in ni nsory which the promise is illusory, being dependent on a promises, condition which in fact reserves an unlimited option to the promisor. "Nulla promisso potest consistere, quae ex voluntate promittentis statum capit" (n). Thus where a committee had resolved that for certain ser- vices "such remuneration be made as Bhall be deemed right," this gave no right of action to the person who (k) Pearce v. Watts' 20Eq. 492. (0 Taylor v. Portington, 7 D. M. & G. 328. (m) Hart v. Hart, 18 Ch. D. 670, 684. (ra) D. 45, 1. de verb. obi. 108, § 1. 42 Gigos v. Cochran, 54 Ind. 593; Moulton v. Egery, 75 Me. 485; Barnett v. Nichols, 56 Miss. 622; Breaid v. Munger, 88 N. C. 365. 118 AGREEMENT, PROPOSAL, AND ACCEPTANCE. had performed the services; for the committee alone were to judge whether any or what recompense was right (o). Moreover a promise of this kind, though it creates no enforceable contract, is so far effectual as to exclude the promisee from falling back on any contract to pay a reasonable remuneration which would be in- ferred from the transaction if there were no express agreement at all. In Roberts v. Smith (p) there was an agreement between A. and B. that B. should per- form certain services, and that in one event (let us say No. 1) A. should pay B. a certain salary, but that ia another event (No. 2) A. should pay B. whatever A might think reasonable. Event No. 2 having happened the Court held there was no contract which B. could enforce. Services had indeed been rendered, and of the sort for which people usually are paid and expect to be paid; so that in the absence of express agreement [ ~tc 45] there would have -^ been a good cause of action for rea- sonable reward. But here B. had expressly assented to take whatever A. should think reasonable (which might be nothing), and had thus precluded himself from claiming to have whatever a jury should think reasona- ble. It would not be safe, however, to infer from this case that under no circumstances whatever can a promise to give what the promisor shall think reasonable amount to a promise to give a reasonable reward, or at all events . something which can be found as a fact not to be illu- sory. The circumstances of each case (or in a written instrument the context) must be looked to for the real meaning of the parties ; and " I leave it to you" may well mean in particular circumstances (as in various small matters it notoriously does), "I expect what is reasonable and usual, and I leave it to you to find out what that is," or, " I expect what is reasonable, and am content to take your estimate (assuming that it will be made in good faith and not illusory) as that of areason- able man" (q). Another somewhat curious case of an illusory pro- mise (though mixed up to some extent with other doc- trines, is Moorhouse v. Colvin (r). There a testator, having made a will by which he left a considerable leg- 9 (o) Taylor v. Brewer, 1 M. & S. 290: • (p) 4 H. & N. 315, 28 L. J. Ex. 164. (g) Such a case (if it can be supported, see the remarks on it in Roberts u. Smith) was Bryant v. Flight, 5 M. & W. 114, where the majority of the Court held that it was for the jury to ascer- tain how much the defendant, acting bond fide, would or ought to have awarded. (r) 15 Beav. 341, 348; affd. by L. JJ., ft. 350, n. UNCERTAINTY OP PROMISE. 119 •acy to his daughter, wrote a letter in which he said, after mentioning her other expectations, " this is not all : she is and shall be noticed in my will, but to what further amount I cannot precisely say." The legacy was afterwards revoked. It was contended on behalf of the daughter's husband, to whom the letter had with the testator's authority been communicated before the marriage, that there was a contract binding the testa- tor's estate to the extent of the legacy given by the will as it stood at the date of the letter. But it was held that the testator's language expressed nothing more than a vague intention, although -^ it would have been [ 'Ar 46] binding had it referred to the specific sum then stand- ing in the will, so as to fix that sum as a minimum to be expected at all events. " He expressly promises such provision only as he in his will and pleasure shall think fit. If. on her marriage, the testator had said, 'I will give to my child a proper and sufficient pro- vision,' the Court might ascertain the amount; but if the testa- tor had said, ' I will give to my child such a provision as I shall choo.se,' would it be proper for the Court (if he gave nothing) to say what he ought to have given ? " Acceptance by Conduct. Conduct which is relied on as constituting the accept- Tacit ac- ance of a contract must (no less than words relied on ceptanceof. for the same purpose) be unambiguous and uncondi- contract must tional( S ). ^ u - ambi - Where the proposal itself is not express, then it must p asp „ f also be shown that the conduct relied on as conveying special con- the proposal was such as to amount to a communication ditions on to - the other party of the proposer's intention. 43 Diffi- tickets, cult questions may arise on this point, and in particular have arisen in cases where public companies entering into contracts for the carriage or custody of goods have sought to limit their liability by special conditions printed on a ticket delivered to the passenger or depos- itor at the time of making the contract." The ten- \s) Warner v. Willington, 3 Drew. 523, 533. 43 In a doubtful case, the interpretation which the parties by their acts under .their contract have practically given it will have .weight and it may be controlling. Coleman v. G-rubb, 11 Harris (Pa.), 393 ; Hutchins v, Dixon, 11 Md. 29; French v. Pearce, 8 Conn. 439: Jakeway v. Barrett, 38 Vt. 316. 44 Lamb v. Camden etc. E. & T. Co., 46 N. Y. 271; Menzel v. Railway, 1 Dillon 531; Baltimore R. R. v. Brady, 32 Md. 333; The City of Norwich, 4 Ben. 271. 120 AGREEMENT, PROPOSAL,. AND ACCEPTANCE. dency of the earlier cases on the subject is to hold that (apart from the statutory restrictions of the Railway and Canal Traffic Act, 1854, which do not appl) to con- tracts with steamship companies, nor to contracts with railway companies for the mere custody as distinguished from the carriage of goods) such conditions are bind- ing. A strong opposite tendency is shown in Hender- son v. Stevenson (t), where the House of Lords decided that in the case of a passenger travelling ,by sea with [ -^ 47] his luggage an indorsement on his ticket -^ stating that the shipowners will not be liable for loss does not pre- vent him from recovering from loss caused by their neg- ligence, unless it appears either that he knew and as- sented to the special terms, or at any rate that he knew there were some special terms and was content to accept them without examination. Since this there have been reported cases arising out of the deposit of goods, for safe custody or otherwise, in exchange for a ticket on which were endorsed conditions limiting the amount of the receiver's liability (u). The resnlt, as it stands at present, appears to be that it is a question of fact in each case whether the notice given by the depositee was reasonably sufficient to inform the depositor at the time of making the contract that the depositee intended to contract only on special terms. A person who, knowing this (x), enters into the contract, is then deemed to as- (0 L. R. 2 Sc. & D. 470 (1875). Lord Chelmsford's and Ha- therley's dicta (pp. 477, 479) go farther, and suggest that the con- tract is complete before the ticket is delivered at all, so that some other communication of the special terms would have to be shown. But the later cases have not adopted this view. (») Harris v. G. W. E. Co. 1 Q. B. D. 515; Parker v. S. E. E. Co.; Gabell v. S. E. E. Co., 2 C. P. D. 416, revg. in Parker's ca. the judgment of the C. P. Div. 1 C. P. D. 618. (Compare Burke v. S. E. E. Co., 5 C. P. D. 1) ; Watkins v. Eymill, 10 Q. B. D. 178, where the former cases are fully reviewed by Stephen, J. (.t) Are reasonable means of knowledge equivalent to actual knowledge? It seems better on principle to say that actual i knowledge may be inferred as a fact from reasonable means of knowledge, and inferred against the bare denial of the party whose interest it was not to know. This is one of tire rules of evidence which are apt in particular departments to hardenin to rulesof law ; and the judgment in Watkins v. Eymill (10 Q. B. D. at p. 188) certainly tends in this direction. It would be curi- ous however if, after "constructive notice " has been justly dis- credited in equity cases, a new variety of it should be introduced in a question of pure common law. Compare JJlpian's remarks on a fairly analogous case, D. 14, 3, de inst. act 11, § 2, 3. De quo palam proscriptun fuerit, ne cum eo contrahatur, is praepos- iti loco non habetur. . . . Proscribere palam sic accipimns : Claris Uteris, unde de piano rectelegi possit, ante tabernam scilicet, vel ante eum locum, in quo negotiatio exercetur, non in loco re- moto, sed in evidenti . . . Certe si quis dicat ignorasse se lit- TACIT ACCEPTANCE OF CONDITIONS. 121 sent to the special terms ; but this, again, is probably subject to an implied condition that the terms are rele- vant and reasonable. It cannot be said that the sub- ject is yet free from doubt. *fc The ordinary rules of proposal and acceptance do [ ^ 48] not apply, as we said at the beginning of this chapter, As to to promises made by deed. It is established by a series promises by of authorities which appear to be confirmed by the ratio ee ' decidendi of Xenos v. Wickham (y.) in the House of Lords (though perhaps the doctrine was not necessary for the decision itself), that a promise so made is at once operative without regard to the other party's ac- ceptance. It creates an obligation which whenever it comes to his knowledge affords a cause of action with- out any other signification of his assent, and in the meanwhile it is irrevocable. Nearly all the cases, it is true, were on instruments involving matter of convey- ance as well as of contract. But no distinction is made or suggested on that ground. The general principles of contract are, however, respected to this extent, that if the promisee refuses his assent when the promise comes to his knowledge the contracted is avoided. "If A. make an obligation to B., and deliver it toC. to the use of B., this is the deed of A. presently; but if C. offers it to B., then B. may refuse it in pais" (i. e. without formality) "and thereby the obligation will lose its force" (z). eras, vel non ohservasse quod propositum erat, cum multi leger- ent, cumque palam esset propositum, non audietur. One cannot help observing that before the recent cases on the subject thejcon- ditions printed by railway companies on their tickets, and the corresponding notices exhibited by them, were far from being "claris Uteris, unde de piano recte legi possit," or "in loco evi- denti." They are still not always so. (y) L. R. 2 H. L. 296. The previous cases were Doe d. Gar- nons v. Knight, 5 B. & C. 671 (a mortgage); Exton v. Scott, 6 Sim. 31 (the like); Hall ,.. Palmer, 13 L. J. Ch. 352 (bond to secure annuity after obligor's death); Fletcher v. Fletcher, 14 L. J. Ch. 66 (covenant for settlement to be made by executors.) As to Xenos v. Wickham, that case might have been decided on the ground that the company's execution of the policy was the acceptance of the plaintiffs' proposal, and the plaintiffs' broker was their agent to receive communication of the acceptance. But that grpund is distinctly not relied upon in the opinions of the Lords: see at pp. 320, 323. (z) Butler and Baker's ca., 3 Co. Rep. 26, quoted by Blackburn J. L. R. 2 H. L. at p. 312. 122 CAPACITY OF PARTIES. [*4»] *CHAPTEK II. CAPACITY OF PARTIES. Variations in personal capacity. Disabili- ties of natural persons: Infancy. Coverture. Insanity, etc. [*50] Extension of natural All statements about legal capacities and duties are taken, unless the contrary be expressed, to be made with reference to " lawful men," citizens, that is, who are not in any manner unqualified or disqualified for the full exercise of a citizen's normal rights. 1 There are several ways in which persons may be or become in- capable, wholly or partially, of doing acts in the law, and among other things of becoming parties to a bind- ing contract. All persons must attain a certain age be- fore they are admitted to full freedom of action and dis- position of their property. This is bat a necessary re- cognition of the actual conditions of man's life. The age of majority, however, has to be fixed at some point of time by positive law. By English law it is fixed at twenty-one years ; and every one under that age is called an infant 2 (Co. Lit. 171 b). Every woman who marries has to sustain, as incident to her new status, technically called coverture, a loss of legal capacity in various respects; a loss expressed, and once supposed to be sufficiently explained, by the fiction that husband and wife are one person. Both men and women may lose their legal capacity, permanently or for a time, by an actual loss of reason. This we call insanity when it is the result of established mental disease, intoxication when it is the transient ef- fect of drink or narcotics. Similar consequences, again, may be attached by provisions of positive law to convic- tion for -fa criminal offences. Deprivation of civil rights also may be, and has been in England in some partic- ular cases, a substantive penalty; but it is not thus used in any part of our law now in practical operation. On the other Band, the capacity of the "lawful man " receives a vast extension in its application, while it re- 1 Musselman r. Cravens. 47 Ind. 1 ; Mead v. Beale. Taney, 339; The State v. Killian, 51 Mo. 80; Methodist Episcopal Church v. Hoboken, 4 Vroom, 33. 2 In most of the states the law so remains but in a few of them females are by statute made of age at eighteen. See Cogel v. Ralph, 24 Minn. 194; Dent v. Cock, 65 Ga. 400. CONTRACTS OF INFANTS. ' 123 mains unaltered in kind, by the institution of agency, capacity: One man may empower another to perform acts in the a g ency - law for him and acquire rights and duties on his be- half. By agency the individual's legal personality is multiplied in space, as by succession it is continued, in time. The thing is now so familiar that it is not easy to realize its importance, or the magnitude of the step taken by legal theory and practice in its full recogni- tion. "We may be helped to this if we remember that in the Roman system there is no law of agency as we understand it. The slave, who did much of what is now done by free servants and agents, was regarded as a mere instrument of acquisition for his owner, except in the special classes of cases in which either slaves or free- . men might be in a position analogous, but not fully i equivalent to that of a modern agent. As between the principal and his agent, agency is a special kind of con- tract. But it differs from other kinds of contract in that its legal consequences are not exhausted by per- formance. Its object is not merely the doing of speci- fied things, but the creation of new and active legal re- lations between the principal and third persons. 3 Hence it may fitly have its place among the conditions of con- tract in general, though the mutual duties of principal and agent belong rather to the treatment of agency as a species of contract. While the individual citizen's powers are thus ex- Artificial , tended by agency, a great increase of legal scope and persons, safety is given to the conjoint action of many by their association in a corporate body or artificial person. The development of corporate action presupposes a devel- oped law of agency, -^ since a corporation can mani- [ -fc 51] fest its legal existence only through the acts of its agents. 4 And as a corporation, in virtue of its perpetual succession and freedom from all or most .of the disabil- ities which may in fact or in law aflect natural persons, has powers exceeding those of a natural person, so those powers have to be defined and limited by sundry rules of law, partly for the protection of the individual mem- bers of the corporation, partly in the interest of the public. 5 ' The powers of the agent cannot exceed those of the principal. Bishop on Contracts, sec. 1057; Cook ?).'Lihdsay, 57 Texas, 67. * Crans v. Hunter, 28 N. Y. 389; Eberts v. Selover, 44 Mich. 519; Crawford v. Barklay, 18 Ala. 270; Joslin v. Miller, 14 Neb. 91; Hodnett v. Tatura, 9 Ga. 70; Taskerr. Ins. Co., 59 N. H. 438. s Bangor Boom Corp. v. Whiting, 29 Me. 123. 124 CAPACITY OF PARTIES. We proceed to deal with these topics in the order in- dicated: and first of the exceptions to the capacity of natural persons to bind themselves by contract. I. Infants. Infants — An infant is not absolutely incapable of binding him- Incapa- self, but is, generally speaking, incapable of absolutely city to bind binding himself by contract (a). His acts and con- bv contract tracts are voidable at his option 6 subject to certain General statutory and other exceptions, which are partly defin- etatement ifce, partly not definable in terms but capable of reason- ' of the law. able, definition in practice, and partly both indefinite and doubtful. The following seems the nearest approach to a statement in general terms that can safely be made. By the common law a contract made by an infant is generally voidable at the infant's option, such option to be exercised either before (b) his attaining his ma- jority or within a reasonable time afterwards. Where the obligation is incident to an interest (or at •all events to a beneficial interest) in property, it can- not be avoided while such interest is retained. Exceptions — A. Void agreements. 7 By the Infants' Belief Act, 1874, loans of money to [ ■^ 52] -^C infants, contracts for the sale to them of goods other than necessaries, and accounts stated with them are ab- solutely void; and no action can be brought on a rati- fication of any contract made during infancy. 8 (When the agreement of an infant is such that it cannot be for his benefit, it bas been said to be abso- lutely void at common law; but this distinction is be- lieved to be exploded by modern authorities.) B. Valid contracts. 9 (a) Stated in this form by Hayes, J., 14 Ir. C. L. R., at p. 356. (6) As to this-see p. 59, below. 6 Hyer v. Hyatt, 3 Cranch, 276; Carpenter v. Id., 45 Ind. 142; Bozeman v. Browning, 31 Ark. 364; Green v. Wilding, 59 Iowa, 676 ; Dunton v. Brown, 31 Mich. 182. 7 Owen ». Long, 112 Mass. 403; Swafford v. Ferguson, 3 Lea, 292; Robinson v. Weeks, 56 Me. 102. 8 Lawrence v. McArter, 10 Ohio, 37, Robins v. Mount,' 4 Rob. (N.Y.) 553; Tlexneru. Dickerson, 72 Ala. 318; Bool v. Mix, 17 Wend. 117, Oxley v. Tryon, 25 Iowa, 955; Person v. Chase, 37 Vt. 647; Maples v. Wightham, 4 Conn. 376, Williams v. Harrison, 11 S. C. 412. 9 McCloskv v. Cyphert, 3 Casey, 220; Harris v. Musgrove, 59 Texas, 401, Spencer v. Carr. 45 N. Y. 406; The State v. Baker, 9 Rich. Eq. 521, In j-e Higgins, 16 Wis. 351; Gavin v. Burton, 8 Ind. 69. CONTRACTS OF INFANTS. 125 An infant's contract is valid if it appears to the Court to be beneficial to the infant, and in particular if it is for necessaries. 10 Explanation, — "Necessaries" include all such goods, commodities, and services as are reasonably necessary for the use and benefit of a person in the circumstances and condition of life of the contracting party. 11 Moreover in certain cases infants are enabled to make binding contracts by custom or statute. An infant is not liable for a wrong arising out of or immediately connected with his contract, such as a fraudulent representation at the time of making the contract that he is of full age. But an infant who has represented himself as of full age is bound by payments made and acts done at his request and on the faith of such representations, and is liable to restore any advan- tage he has obtained by such representations to the person from whom he has obtained it. 1. Of the contracts of infants in general at common Of infants' law, and as affected by the Act of 1874. contracts in It will be convenient to depart somewhat from the § e " era1 ' and order of the foregoing general statement for the pur- supposed pose of considering this whole subject together. It distinction has been commonly said that an agreement made by an tnat som ? infant, if such that it cannot be for his benefit, is not ar ? who ' lv merely voidable but absolutely void ; though in general his contracts are -^- only voidable at his option (c). [ "^ 53] But this distinction is in itself unreasonable, and is supported by little or no real authority, while there is considerable authority against it. The unreasonable- ness of it seems hardly to need any demonstration. The object of the law, which is the protection of the infant, is amply secured by not allowing the contract to be enforced against him during his infancy, and leaving it in his option to affirm or repudiate it at his (e) Another distinction is made as to deeds taking complete effect by deli very or otherwise. SeeShepp. Tonchst. 233; Co. Lit. 51 b, note; 3 Burr. 1805; 2 Dr. & W. 340. But this is of little practical importance, and not material to the present subject. ( 10 Commonwealth v. Hantz, 2 Pa. 331 ; Fairmount Pass. R. W. Co. v. Stutler, 4 Smith (Pa.), 375; Hyman v. Cain 3 Jones, (N. C), 111; Earle v. Reed, 10 Met. 387. " Necessaries for an infant'' are the same as necessaries for a wife. 1 Bishop on M. & D. Sec. 554; Hoyt v. Casey, 114 Mass. 397; Walling v. Toll, 9 Johns. 141 ; Werner's Appeal, 10 Norris, 224; Anderson v. Smith, 33 Md. 465; Strong v. Toote, 42 Conn. 203. CAPACITY OP PARTIES. Examination of author- ities: as to bonds. [*54] Purchase of goods in trade. full age (d). Moreover the distinction is arbitrary and doubtful, for it must always be difficult to say whether a particular contract cannot possibly be beneficial to the party. As for the authorities, the word void is no doubt frequently used: but then it is likewise to be found in cases where it is quite settled that theucon- tract is in truth only voidable. And as applied to other subject matters it has been held to mean only voidable in formal instruments (e) and even in Acts of Parlia- ment (/). Thus the language of text-writers, of judges, and even of the legislature, is no safe guide apart from actual decisions. But when we look at the decisions they appear to establish in the cases now in question only that the con- tract cannot be enforced against the infant, or some other collateral point equally consistent with its being only voidable, except when they show distinctly that the contract is voidable and not void. Thus an infant's bond with a penalty and conditioned for the payment of interest has been supposed to be wholly void ; 12 but nothing more is decided than that being under seal it cannot be ratified- save by an act of at least equal so- lemnity with the original instrument: in the case re- ferred to one judge (Bayley, J. ) -fc- rested bis judg- ment simply on the law stated by Coke, who only says that an infant's bond with a penalty, even if given for necessaries, shall not bind him (g). A stronger case is Thornton v. Illingworth (h), where the judges said in terms that an infant's contract to buy goods for the pur- poses of trade is absoultely void, not voidable only: but all that had to be decided was that a ratification after action brought was no answer to the defence of infancy: and the dicta, as pointed out by Mr. Benjamin, are inconsistent with a former case of higher authority (but which seems not to have been cited) where an in- fant was allowed to sue on a trading contract for the purchase of chattels, the only special circumstance be- (d) We are now speaking only of the common- law. (e) Lincoln College's Ca. 3 Co. Eep. 59 b; Doe d. Bryon v. Bancks, 4 B. & Aid. 401; Malinsn Freeman, 4 Bing. N. C. 395. (/) Compare Davenport v. Beg. (J. C, from Queensland), 3 A)pp. Ca. at p. 128, with Governors of Magdalen Hospital v. Knptts, 4 App. Ca. 324, in which case this latitude has at last (g) Baylis v.' Dineley, 3 M. & S„477 ; Co. Lit. 172 a. The case is not accepted without question in America: Parsons on Contracts, 269 n. (h) 2 B. & C. 824. 12 See Fisher v. Mowbray, 8 East 330. CONTRACTS OF INFANTS. 127 ing that he had already paid part of the price, so that it was clearly for his benefit that he should be able to enforce the contract. The decision was put on this ground in the Court of K. B. by Lord Ellenborough, but the broader opinion was expressed by Dampier, J., that the other party could in no case avoid the contract, and that the contracts of infants are as to their validity of two kinds only, those which are cjearly for the in- fant's benefit and therefore bind him, and those which are not so and are voidable at this option. The Court of Exchequer Chamber affirmed the judgment without calling on counsel to support it, holding that "the general law is that the contract of an infant may be avoided or not at his own option," and that this case was no exception (i). In a much later case the follow- Contract of ing opinion was given by the Court of Queen's Bench service - on the conviction of a servant for unlawfully absenting himself from his master's employment: — "Among many objections one appears to us clearly fatal. He ■was an infant at the time of entering into the agreement, which authorizes the master to stop his wages when the steam-engine is stopped working for any cause. An agreement to serve for wages may be for the infant's ^ benefit {k) ; but an agreement which [ ^f 55] compels him to serve at all times during the term but leaves the master free to stop his work and his wages whenever he chooses to do so cannot be considered as beneficial to the servant. It is inequitable and wholly void. Theconvictionmustbequashed"(Z). Bat this decided only that the agreement was not en- forceable against the infant. The Court cannot have meant to say that if the master had arbitrarily refused to pay wages for the work actually done the infant could not have sued him on the agreement. Again, it is said Leases, that a lease made by an infant, without reservation of any rent (or even not reserving the best rent), is abso- lutely void. But this opinion is strongly disputed in Bacon's Abridgment, and also disapproved by Lord Mansfield, whose judgment Lord St. Leonards has adopted as good law, though the actual decision was not on this particular point in either case (m). And (i) Benjamin on Sale, 28 ; Warwick v. Bruce, 2 M. AS. 205, in Ex. Ch. 6 Taunt. 118. (k) It seems that prima facie it is so, even if it contains clauses imposing penalties, or giving a power of dismissal, in certain events; Wood v. Fen wick, I0M. & W. 195; Leslies. Fitzpatrick, 3 Q. B. D. 229, distinguishing Reg. v. Lord (next note). (I) Eeg. v. Lord, 12 Q. B. 757, 17 L. .7. M. C. 181, where the head note rightly says "void against the infant." (m) Bac. Ab. 4, 361; Zouch v. Parsons, 3 Burr. 1794 (where 128 CAPACITY OF PARTIES. in a modern Irish case (n) it has been expressly decided that at all events a lease made by an infant reserving a substantial rent, whether the best rent or not, is not void but voidable; and further that it is not well avoided by the infant granting another lease of the same property to another person after attaining his full age. The Court inclined to think that some act of notoriety by the lessor would be required, such as en- tering, bringing ejectment, or demanding possession; however there was another reason, namely, that the second lease might be construed as only creating a future interest to take effect on the determination of- the first. With regard to the first reason it seems to have been [ "At 56] thought not immaterial that -^- a freehold estate (ior the life of the lessor or twenty-one years) had passed by the original lease. There is good English authority for the proposition that if a lease made by an infant is Sale, &c, of beneficial to him he cannot avoid it at all (o). It ap- land. pears to be agreed that the sale, purchase (p), or ex- change (q) of land by an infant is both as to the contract and as to the conveyance only voidable at his option. 13 Partnership Again, there is no doubt that an infant may bo a and share- partner or shareholder (though in the latter case the holding. company may refuse to accept him (r) ; and though he cannot be made liable for partnership debts during his infancy, he is bound by the partnership accounts as be- tween himself and his partners and cannot claim to share profits without contributing to losses. And if on coming of age he does not expressly disaffirm the part- nership he is considered to affirm it, or at any rate to hold himself out as a partner, and is thereby liable for the debts of the firm contracted since his majority (s)." The liability of an infant shareholder who does not repudiate his shares to pay calls on them rests, as far the decision was that the reconveyance of a mortgagee's infant heir, the mortgage being properly paid off, could not be avoided by his entry before full age) : Allen v. Allen, 2 Dr. & W. 307, 340. (») Slator v. Brady, 14 Ir. C. L. 61. (o) Maddon v. White, 2 T. R. 159. ip) Co. Lit. 2 b, Bac. Ab. Infancy I. 3 (4, 360). (q) Co. Lit. 51 b. (r) But the company cannot dispute the validity of e transfer to an infant after the infant has transferred over to a person sui iuris: Gooch's ca. 8 Ch. 266. And see Lindley, 2. 1405-6. (a) Lindley, 1. 80-83; Goode v. Harrison, 5B. & Aid. 147. 18 Irvine v. Id., 9 Wallace, 617; Spencer jr. Carr, 45 N. Y. 406; Dixon v. Merritt, 21 Min. 196. 14 An infant's partnership agreements are voidable. Bishop on Contracts, Sec. 925; Dun ton v.' Brown, 31 Mich. 182. CONTRACTS OF INFANTS. 129 as existing authorities go, on a somewhat different form of the. same principle (of which afterwards). As to contribution in the winding up of a company, Lord Justice Lindsey (2, 1356) "is not aware of any case in which an infant has been put on the list of contribu- tories. Upon principle, however, there does not appear to be any reason why he should not, if it be for his benefit; and this, if there are surplus assets, might be the case." Otherwise he cannot be deprived of his right to repudiate the shares, unless perhaps by fraud; but in any case if he "does not -^ repudiate his shares, [ -^ 57] either while' he is an infant or within a reasonable time after he attains twenty-one, he will be a contributory," and still more so if after that time he does anything showing an election to keep the shares. On the whole it is clear on the authorities (notwithstanding a few expressions to the contrary), that both the transfer of shares to an infant and the obligations incident to his holdiug the shares are not void but only voidable (t). Marriage is on a different footing from ordinary con- Marriage, tracts (u), and it is, hardly needful to say in this place that the possibility of a minor contracting a valid mar- riage has never been doubted in any of our Courts. Even if either or both of the parties be under the age of consent (fourteen for the man, twelve for the woman) the marriage is not absolutely void, but remains good if when they are both of the age of consent they agree to it (x). But the Marriage Act, 4 Geo. 4, c. 76 (ss. 8, 22), makes it very difficult, though not impossible for a minor to contract a valid marriage without the con- sent of parents or guardians («/). As to promises to marry and marriage settlements, it Promises to has long been familiar law that just as in the case of ma «y and his other voidable contracts an infant may sue for a Sttlements breach of promise of marriage, though not liable to be (<) Lumsden's ca. 4 Ch. 31 ; Gooch's ca. 8 Ch. 266; cp. p. 64, infra. (u) Continental writer have -wasted much ingenuity in debat- , ing with which class of contracts it should be reckoned. Sav. Syst. I 141 (3. 317); Ortolan on Inst. 2. 10. (*) Bacon, Abr. 4. 336. (y) In most Continental countries the earliest age of legal mar- riage is fixed: in France it is eighteen for the man, fifteen for the woman, and consent of parents or lineal ancestors is required up to the ages of twenty-five and twenty-ODe respectively. (Code Civ. 144 sqq.) But this consent may be dispensed with in va- rious ways by matter subsequent or lapse of time: see art. 182, 184, 185. The marriage law of other states (except some where the canon law still prevails) appears to differ little on the average from the law of France in this particular. 9 PEINCIPLES OF CONTBACT. 130 CAPACITY OF PARTIES. [*B8] Negotiable instruments. Accounts stated, and opinion of the Court of Exchequer on the general question. sued (z). 15 An infant's marriage settlement is not bind- ing on the infant -^ unless made under the statute (see pout, p. 73), and the Court of Chancery has no power to make it binding in the case of a ward (a). A set- tlement of a female infant's general personal property, the intended husband being of full age and a party, can indeed be enforced, but as the contract not of the wife but of the husband; the wife's personal property pass- ing to him by the marriage, he is bound to deal with it according to his contract ( b ) . And particular covenants in an infant's settlement may be valid (c). In any case the settlement is not void but only voidable; it may be confirmed by the subsequent conduct of the party when of full age and sui iuris (d). K Again an infant's con- tract on a bill of exchange or promissory note was once supposed to be wholly void, but is now treated as only voidable (e). 17 The same holds of an account stated; and here the decisive case is a strong authority in favour of the general contention that a contract is not in any case absolutely void by reason of the party's infancy. The Court said:' — ' ' The argument on behalf of the defendant was that an account stated by an infant is not merely voidable but actually void, so that no subsequent ratification can make it of any avail. But we can see no sound or reasonable distinction in this respect between the liability of an infant on an account stated and his liability for goods sold and delivered or oh any other contract . . . The gen- eral doctrine is that a party may after he attains the age of twenty-one years ratify and so make himself liable on contracts made during infancy. We think that on principle unopposed by authority this may be done on a contract arising on an account stated as well as on any other contract" (/). (a) Bacon, Abr. Infancy and Age, 1. 4 (4. 370). Per Lord Ellenborough, Warwick v. Bruce, 2 M. & S. 205. (a) Field v. Moore, 7 D. M. G. 691, 710. (6) Davidson, Conv: 3, pt. 2, 728 (c) Smith v. Lucas, 18 Ch. D. 531. (d) Davies v. Davies, 9 Eq. 468. («) Byles on Bills, 59 (10th ed.); undisputed in Harris v. Wall, 1 Ex. 122. (/) Williams v. Moor, 11 M. & W. 256, 264, 266, 12 L. J. Ex. 253. 15 Holt v. Clarencieux, 2 Stra. 937. 16 The deed of a feme covert who is an infant, is under the com- mon law rules, void. Chandler v. McKinney, 6 Mich. 217; Cro- nise v. Clark, 4 Md. 403; Schrader v. Decker, 9 Barr, 14; Magee v. Welsh, 18 Cal. 155. 17 Eeed v. Batchelder, 1 Met. 559; Buzzell v. Bennett, 2 Cal. 101; Young v. Bell, 1 Cranch, 342. . CONTRACTS OF INFANTS. 131 On the whole, then, we have seen that in several im- Conclusion: port ant classes of cases (including some that were for- "° Tf 8 ^?. 11 merly supposed exceptional) an infant's contract is cer- any con t r acts tainly not void: and we have also seen that there is not of infants any clear -^- authority for holding that in any case it is void at C. L. in fact void. It is perhaps not necessary to offer any [ w 59] further justification for refusing to admit an ill -defined and inconvenient class of exceptions, of which no posi- tive instance can be found (g). There is one exception to the rule that an infant may Infant can- enforce his voidable contracts against the other party not have during his infancy, or rather there is one way in which specific per- he cannot enforce them. Specific performance is not allowed at the suit of an infant, because the remedy is not mutual, the infant not being bound (ft). An infant may avoid his voidable contracts (with At what practically few or no exceptions) either before or with- tiniehe may in a reasonable time after coming of age : the rule is con t ra cts that " matters in fait [i.e., not of record] he shall avoid either within age or at full age," but matters of record only within age Co. Lit. 3806) (a'). 18 However, where the nature of the case admits of it, an infant's affirma- tion or repudiation of his contract while he is still a minor is treated as only provisional ; he cannot deprive himself of the right to elect at full age, and only then can his election be conclusively determined (fc). 19 There is no express authority for the saving words we have in- troduced into this proposition, but they are obviously required ; in the case of an infant shareholder, for in- stance, the unqualified application of it might make it (g) Parsons on Contracts (1st ed.), 244, Mr. Leake, who takes no notice whatever of the formerly current doctrine, Sir William Anson (3rd ed. p. 104), and Mr. Wharton (gg 31, 36-42), are of the same opinion. Contra Hilliard, 2. 129, and W. W. Story, g 101. ♦ (h) Flight v. Bblland, 4 Euss. 298. (i) See per Parke, B., Newry and Enniskillen Ey. Co. v. Coomhe. 3 Ex. 565, 18 L. J. Ex. 325, per Cur. L. and N. W. E. v. M'Michael, 5 Ex. 114, 20 L. J. Ex. 97. As to an infant being bound when he comes of age by an acknowledgment made in a Court of Eecord, see Y. B. 20 & 21 Ed. 1, in the series of Chroni- cles and Memorials published under the direction of the Master of the Rolls, p. 320. (it) L. & N. W. E. v. M'Michael, supra ; Slator v. Trimble, 14 Ir. C. L. 342. 18 Henry v. Root, 33 N. Y. 526; Aldrich v. Grimes, 10 N. H. 194; Vaugbn v. Parr, 20 Ark. 600; Forsyth v. Hastings, 27 Vt. 646; Lawson v. Lovejoy, 8 Me. 405. i 19 Hoytu Wilkinson, 57 Vt. 404. 132 CAPACITY OF PARTIES. [*60] Money paid under avoided con- tract, when not recover- able. Infants' Relief Act, 1874. Ratification still opera- [*61] tive for some pur- poses. impossible for anybody to deal with the shares until he came of age. Indeed there is no lack of authority to show that here as in other cases, so *fc far as the inter- ests of third persons are concerned, and to some extent also as regards acts done by the parties themselves on the faith of the contract, voidable means not invalid until ratified, but valid until rescinded (I). If an in- fant pays a sum of money under a contract, in c&tsid- eration of which the contract is wholly or partly per- formed by the other party, he can acquire no right to recover the money back by rescinding the contract when he comes of age. Such is the case of a premium paid for a lease (m), or of the price of goods (not being neces- saries) sold and delivered to an infant and paid for by him : and so if an infant enters into a partnership and pays a premium, be cannot either before or after his full age recover it back, nor therefore prove for it in the bankruptcy of his partners (ri). We must now consider the effect of the Act of 1874 (37 & 38 Vict. c. 62), which enacts as follows : — 1. All contracts whether by specialty or by simple contract henceforth entered into by infants for the repayment of money lent or to be lent, or for goods supplied or to be supplied (other than contracts for necessaries), and all accounts stated with in- fants, shall be absolutely void : provided always that this enact- ment shall not invalidate any contract into which an infant may by any existing or futue statute or by the rules of common law or equity enter, except such as now by law are voidable. 2. No action shall be brought whereby to charge any person upon any promise made after full age to pay any debt contracted during infancy, or upon any ratification made after full age of any promise or contract made during infancy, whether there shall or shall not be any new consideration for such promise or ratifi- cation after full age. 3. This Act may be cited as The Infants Relief Act, 1874. The 2nd section supersedes the 5th section of Lord Tenterden's Act (9 Geo. 4, c. 14) (o), by which no rat- ification -^f of a contract made during infancy could be sued upon unless in writing and signed by the party to be charged. The new enactment forbids an action to be (I) Per Lord Colonsay, L. R. 2 H. L. 375. (m) Holmes v. Blogg, 8 Taunt. 35, 508, S. C. Moore, 1. 466, 2. 552. (n) Ex parte Taylor, 8 D. M. G. 254, 258. (o) Since expressly repealed by the Statute Law Revision Act, 1875, 38 & 39 Vict. c. 66. CONTRACTS OF INFANTS. 133 brought at all on *any such promise or ratification, and it applies to a ratification 6ince the Act of a promise made in infancy before the passing of the Act (p), whether the agreement is or is not one of those included in s. 1 (q). It probably also prevents the ratification from being available by way of set-off (r). This, however, is a different thing from depriving the ratification of all effect. For it may have other effects than giving a right of action or set-off, and these are not touched. "While the matter was governed by Lord Tenterden's Act there were many cases where a contract made dur- ing infancy might be adopted or confirmed without any ratification in writing so as to produce "important re- sults. Thus in the case of a marriage settlement the married persons are bound not so much by liability to be sued (though in some cases and for some purposes the husband's covenants are of importance) as by ina- bility to interfere with the disposition of the property once made and the execution of the trusts once consti- tuted : and so far as concerns this an infant's marriage settlement may, as we have seen, be sufficiently con- firmed by his or her conduct after full age (s). Again an infant partner who does not avoid the partnership at his full age is, as between himself and his partners, completely bound by the terms on which he entered it without any formal ratification ; and in taking the part- nership accounts the Court would apply the same rule to the time of his minority as to the time after his full age. 20 Again an infant shareholder who does not dis- r . „„, claim may after his full age, -^ at any rate, be madelia- l * -I ble for calls without any express ratification ; on the contrary, the burden of proof is on him to show that he repudiated the shares within a reasonable time (t). And as Lord Tenterden's Act did not formerly stand in the way of these consequences of the affirmation or non-repudiation of an infant's contract, so the Act of (p) Ex parte Kibble, 10 Ch. 373. (q) Coxhead v. Mullis, 3 C. P. D. 439. It is held, however, that in a case which would before the Act have been one of rati- fication it may be left to the jury to say whether the conduct of the parties amounts to a new promise : Ditcham v. Worrall, 5 C. P. D. 410, by Lindley and Denman, JJ., diss. Lord Coleridge, C. J. (r) Rawley v. Rawley (C. A.), 1 Q. B. D. 460. («) Davies v. Davies, 9 Eq. 468, supra, p. 58. (t) See pp. 56, 64. 20 The infant cannot avoid part of his contract and affirm the other part. Young v. McKee, 13 Mich. 552; Weed v. Beebe, 21 Vt. 495; Heath v. West, 8 Fost. (N. H.) 101; Curtis v. McDou- gal, 26 Ohio 66. 134 CAPACITY OF PARTIES. Semble, no specific per- formance for either party of any con- tract made during infancy. Eftect of proviso as to new con- sideration. Ofs. 1, making certain con- tracts void. [*63] 1874 will not stand in the way of the same or like con- sequences in the future. In fact the operation of the present Act seems to be to reduce all voidable contracts of infants ratified at full age, whether the ratification be formal or not, to the position of agreements of im- perfect obligation, that is, which cannot be directly en- forced but are valid for all other purposes. Other ex- amples of such agreements and of their legal effect will be found in the chapter specially assigned to that subject. A collateral result of this enactment appears to be that one who has made a contract during his infancy is not now able "to obtain specific performance of it after his full age, for the same reason that he cannot and formerly could not do so sooner (u). The proviso about new consideration was presumably introduced by way of abundant caution, to prevent colourable evasions of the Act by the pretence of a new contract founded on a nominal or trifling new considera- tion (x). Where a substantial consideration appears on the face of the transaction these words can hardly be supposed to impose on the Court the duty of inquir- ing whether the apparent consideration is the whole of the real consideration. In the first section the words concerningthe purchase of goods are not free from ob- scurity. If we might construe the Act as if it said " for payment for goods supplied," &c, it would be clear enough: but it is not so clear what is the precise oper- ation of an enactment that -^ contracts " for goods supplied or to be supplied," other than necessaries, shall be void. It seems to follow that no property will pass to the infant by the attempted contract of sale, and that if he pays the price or any part of it before delivery of the 'goods he may recover it back; as indeed he might have done before the Act, for the contract was voidable, and he was free to rescind it while it was yet executory. But does it also follow that if the goods are delivered no property passes, and that if they are paid for the money may be recovered back? Such a consequence would be unreasonable, and is not re- quired by the policy of the statute, which is obviously to protect infants from running into debt, and to dis- courage tradesmen and others from giving credit to them, not to deprive them of all discretion in making purchases for ready money. It is certain that when a (u) Flight v. Bolland, 4 Russ. 298, p. 59, supra, (x) Yet is it effective for this purpose ? See Ditcham v. Wor- rall, p. 61, supra. CONTRACTS OF INFANTS. 135 particular class of contracts is simply declared to be unlawful, this does not prevent property from passing ' by an act competent of itself to pass it, though done in pursuance or execution of the forbidden contract (y). In this case also it seems clear that the delivery with intention to pass the property would pass it apart from any question of contract, and such authorities as Holmesv. Blogg,(z) and Ex parte Taylor (a), where the contract was only voidable but was afterwards rescinded, would still be applicable, so that if the goods had been accepted the money could not be recovered. On this Qu. Was this more reasonable construction, however, it is difficult to necessary? see what result is obtained by the first section which is not equally well or better obtained by the second. At common law the infant was not bound by any of the contracts specified in the first section, unless he chose to bind himself at full age: by the second section he cannot henceforth so bind himself. No more complete protection can be imagined, and the first section appears superfluous. Perhaps the -fa first section may be read [ "^ 64] as giving a popular exposition of the chief practical t effects of the following one. It is conceived that a bond, bill of exchange, or note .given by a man of full age, for which the consideration was in fact a loan of money or the supply of goods not Decessaries during his infancy, would not be void under s. 1. (6). But s. 2 would no doubt effectually prevent it from being enforced, though perhaps the words are not the most apt for that purpose. 2. Of the liability of infants on obligations incident to Liability on interests in permanent property. obligations In an old case reported under various names in vari- lncldent t0 /noT-t n* ■ i • ■ ■ ■ property, ous books (c), of which a sufficient account is given in an( j eS p e . the judgment of the Court of Exchequer in L. & N. W. daily as to Ry. Co. v. M'Michael (d), it was decided that an in railway faht lessee who continues to occupy till he becomes snares - of full age is after his full age liable for arrears of rent incurred during his infancy. In like manner a copy- holder who was admitted during his minority and has not disclaimed is bound to pay the fine (e). In recent , ( y) Ayers v. South Australian Banking Co. , L. R. 3 P. C, 548, 559. (z) 8 Taunt. 508. (a) 8 D. M. G. 254, p. 60, supra. (b) Cp. Flight «. Reed, 1 H. & C. 703, 32 L. J, Ex. 265. (c) Kettles Eliot, &c. Rolle Ab. 1, 731, K.; Cro. Jac. 320; Brownlow 120; 2 Bulst. 69. (d) 5 Ex. 114; 20 L. J. Ex. 97. (e) Evelyn v. Chichester, 3 Burr. 1717. 136 CAPACITY OF PARTIES. times an important application of this principle has been made in the case of infant shareholders in rail- way companies. An infant is not incapable of being a shareholder, and as such he is prima facie liable when he comes of age to be sued for calls on his shares, and he can avoid the liability only by showing that he re- pudiated the shares either before attaining his full age (/), or in a reasonable time afterwards (g). In the first of the series of cases on this head some of the judges seem to have thought that even an infant share- holder was made absolutely liable by the general form [ "fa 65] of -^c the enactment in the Companies Clauses Consoli- dation Act defining the liability of shareholders (h). This view, however, has since been declared erroneous and inconsistent with the established rule that general words in statutes are not to be construed so as to de- prive infants, lunatics, &c, of the protection given to them by the common law. In this case the liability, though statutory, is still in the nature of contract, and is subject to the ordinary rules as to the competency of contracting parties. The true principle is that a rail- way shareholder is not a mere contractor, but a pur- chaser of an interest in a subject of a permanent na- ture with certain obligations attached to it; and those obligations he is bound to discharge, though they arose while he was a minor, unless he has renounced the in- terest. A mere absence of ratification is no sufficient defence, even if coupled with the allegation that the defendant has derived no profit from the shares. For if the property is unprofitable or burdensome, it is the holder's business to disclaim it on attaining his full age, if not before; and it is by no means clear that he could exonerate himself even during his minority by showing that the interest was not at the time beneficial, unless he actually disclaimed it (i). Comparing the analogous case of a lease, the Court said — " We think the more reasonable view of the case is that the infant, even in the case of a lease which is disadvantageous to him, cannot protect himself if he has taken possession, (/) Newry & Enniskillen Ey. Co. v. Coombe, 3 Ex. 565; 18 L. J. Ex. 325. (g) A plea which merely alleged repudiation after full age was therefore held bad in Dublin & Wicklow Ey. Co. v. Black, 8 Ex. 181. (ft) Lord Denroan, C. J., and Patteson, J., in Cork & Bandon Ey. Co. v. Cazenove, 10 Q. B. 935. (i) It is submitted that in such a case the disclaimer if made would conclusively determine his interest and not merely sus- pend it. * CONTRACTS OF INFANTS. . 137 and if he has not disclaimed, at all events unless he still be a minor" (k). In all the decided cases the party appears to have been of full age at the time of the action being brought, but there is nothing to show that (except possibly in the case of a disadvantageous contract) he might not as well be sued during his mi- nority. •fc The same results, except perhaps as to suing the [ -fa 66] shareholder while still a minor,. would follow from the general principles of the law of partnership even if the company in which the shares were held had not any permanent property. 3. Of the liability of an infant when the contract Liability on is for his benefit, and especially for necessaries. beneficial It has been laid down in geaeral terms that if an extenTof the agreement be for the benetit of an infant at the time, rule? it shall bind him (I). We are not aware, however, that this rule has been applied in practice, except in the case of obligations coupled with interests in property (where it is not clear, as above said, that the question of benefit is material), and except so far as an infant's liability for necessaries is founded on this reason. The rule has also been expressed more widely in the converse form,that the contract is binding unless manifestly to the infant's pre- judice (m). But this, it is submitted, goes too far. The contract before the Court vJas that of an apprentice with a master; and this and other cases (n) certainly show that such a contract, or an ordinary contract to work for wages, will, if it be reasonable be considered binding on the infant to this extent, that he may no less than an adult incur the statutory penalties for unlawfully absenting himself from his master's employment (o). But it is distinctly laid down that an apprentice under age cannot be sued on the covenants made by him in the indenture of apprenticeship except by the custom of London (p). Again there are many conceivable (k) Lond. & N. W. By. Co. v. M'Michael, 5 Ex. 114; 20 L. J. Ex. 97,101. (1) Bacon Ab. Infancy, I. 3, 4, 360; Maddon v. White, 2 T. E. 159. (m) Cooper v. Simmons, 7 H. & N. 707, 721; per "Wilde, B. Not so strongly put in the L. J. report, 31 L. J. M. C. 138, 144. (n) Wood v. Fenwick, 10 M; & W. 195. (o) In Leslie is. Fitzpatrick, 3 Q. B. D. 229, a case of sum- mary proceedings under the Employers and Workmen Act, 1875, it may be collected that the facts were of the same kind, though the employer's plaint was in terms tor a breach of con- tract. (p) Bacon Ab. Infancy A. 4. 340. 138 ' CAPACITY OF PARTIES. [ ^C 67] cases in which it might be for an -fc infant's benefit, or at least not manifestly to his prejudice, to enter into trading contracts, or to buy goods other than necessa- ries: one can hardly say for example that it would be manifestly to the disadvantage of a minor of years of discretion to buy goods on credit for re-sale in a rising market; yet there is no dqubt whatever thatsuch aeon- tract would at common law be voidable at his option. Nor has it ever been suggested that an infant partner or shareholder is at liberty to disclaim at full age only in case the adventure has been unprofitable or is obvi- ously likely to become so. However, inasmuch as since the Infants' Belief Act, 1874, an infant's contract, if not binding on him from the first, can never be enforced against him at all, it seems quite possible that the Courts may in future be disposed to extend rather than to narrow the description of contracts which are considered binding because for the infant's benefit. 3a. Contracts for necessaries. Liability for The leading authority on this subject is now the necessaries, judgment of the Exchequer Chamber in Ryder v. Womb- well (q), from which the following introductory state- ment is taken: — > " The general rule of law is clearly established, and is that an infant is generally incapable of binding himself by a contract. To this rule there is an exceptiorr'introduced, not for the bene- fit of the tradesman who may trust the infant, but for that of the infant himself. This exception is that he may make a contract for necessaries, and is accurately stated by Parke, B. in Peters v. Fleming (r). ' From the' earliest time down to the present the word necessaries is not confined in its strict sense to such ar- ticles as were necessary to the support of life, but extended to articles fit to maintain the particular person in the state, degree and station in life in which he is; and therefore we must not take the word necessaries, in its unqualified sense, but with the qual- ification above pointed out.' " What are "What in any particular case may fairly be called nec- [ -j{ 68] essary in this extended sense, is what is called a •£ ques- necessaries a tion of mixed fact and law. The provinces of the Court question of an( j ^ e ^ urv respectively seem to" be as we now pro- mixed fact j , J , , 21 r and law. ceed to state. ___^ (q) L. E. 4 Ex. 32, 38; in the Court below L. E. 3 Ex. 90. (r) 6 M. & W, at p. 46. 21 Money is not a necessary in a technical sense and if a per- son lends money to an infant he cannot recover it at law even if the infant expended the money for necessaries. Price v. Sand- ers, 60 Ind. 310; Eandle v. Sweet, 1 Denio, 460. INFANTS : NECESSARIES. 139 The station and circumstances of the defendant, and The Court the particulars of the claim being first ascertained, it S 'W S i{ . tnin S s is then for the Conrt to say whether the things suppli - j£®.J nma ed are prima facie such as a jury may reasonably find necessary, to be necessaries for a person in the defendant's cir- cumstances, or " whether the case is such as to cast on the plaintiff the onus of proving that the articles are within the exception [i.e., are necessaries], and then whether there is any sufficient evidence to satisfy that v onus." 22 In the latter case the plaintiff must show that although the articles would generally not be necessary for a person in the defendant's position, yet there exist in the case before the Court -special circumstances that make them necessary. Thus articles of diet which are prima facie mere luxuries may become necessaries if pre- scribed by medical advice (s). 23 It is said that in general the test of necessity is usefulness, and that nothing can be a necessary which cannot possibly be useful. It is obvious, however, that it is in truth a question of com- mon sense and experience what is or is not reasonably re- quired by a person in a given station and circumstances, and one on which not much light can be thrown by the statement in a general form of rules founded on extreme cases. It is to be borne in mind that the question is not whether the things are such that a person of the de- fendant's means may reasonably buy and pay for them, but whether they can be reasonably said to be so neces- sary for him that, though an infant, he must obtain them on credit rather than go without. For the purpose of deciding this question the Court will take judicial notice of the ordinary customs and usages of society (t). If on these preliminary considerations the Court de- The jury cides that there is evidence on which the supplies in ■says if they question -^-may reasonably be treated as necessaries, [^°"J then it is for the jury to say whether they were in fact are ln * necessaries for the defendant under all the circumstan- ces of the case {u). 2i (s) See Wharton v. Mackenzie, 5 Q. B. 606; 13 L. J. Q. B. 130. It) L. E. 4 Ex. at p. 40. (u) It would seem from Ryder v. Wornbwell (supra) that the power of the Court to control or review the finding of the jury is neither more nor less in this than in any other class of cases. 22 The word "necessary" includes all articles necessary to support life also all articles necessary to support the person in the station, state, and degree in life in which he is. Park, B., in Peters v. Fleming, M. & W. 42. 23 Angell v. McLellan, 16 Mass. 28; Gay v. Ballou, 4 "Wend. 403; Anderson v. Smith, 33 Md. 465. 24 Merriam v. Cunningham, 11 Cush. 40. 140 CAPACITY OF PARTIES. Supply from other sources, how far material. [*70] Apparent means of buyer not material. As a matter of common sense it seems relevant to this question whether the defendant was or was not already sufficiently provided with commodities of the particular description, especially when we bear in mind that this exceptional liability for necessaries is admitted in the interest not of the seller but of the infant buyer. The weight of authority is in favour of admitting evi- dence to this effect (x), though it has also been thought that the defendant ought to show that the plaintiff had notice of the state of things (y): On the whole the better opinion is that the question whether goods sup- plied are necessaries is a question of fact, depending (among other conditions) on the extent to which the party is already supplied with similar goods; that if they are necessary the tradesman will not be the less entitled to recover because he made no inquiries as to the infant's existing supplies; -but that on the other hand, if the infant is already so well supplied that these goods are in truth Dot necessary, the tradesman's ignor- ance of that fact will not make them necessary, and he cannot recover. 25 There is no rule of law casting on him a positive duty to make inquiries, but he omits to do so at his peril (z). It seems, however, that the defendant havipg an in- come out of which he might keep himself supplied with necessaries for ready money is not equivalent to his be- ing actually supplied, and does not prevent him from contracting for necessaries on credit (a). -^Tt would be natural for juries, if nqt warned against it, to fall into a way of testing the necessary character of supplies, not so much by what the means and posi- tion of the buyer actually were, as by what they ap- peared to be to the seller, and such a view is not alto- gether without countenance from authority (&). It is conceived, however, that this is quite erroneous, and- (x) Brayshaw v. Eaton, 7 Scott, 183; Foster v. Redgrave, L. R. 4 Ex. 35, n., Barnes v. Toye, 13 Q. B. D. 410. (y) Ryder v. Wombwell, L. R. 3 Ex. 90; (the point was left open in Ex. Ch., L. R. 4 Ex. 42); dissented from in Barnes v. Toye (last note), and Brayshaw v. Eaton approved. (z) See Brayshaw v. Eaton, 7 Scott, 183. (a) Burghart v. Hall, 4 M. & W. 727. Contra Mortara v. Hall. 6 Sim. 495. The doctrine there laid down seems superfluous, for the supplies there claimed for (such as 209 pair of gloves in a half year) could not have been reasonably found necessary in any case. (6) In Dalton v. Gib, 7 Scott, 117, much weight is given to the apparent rank and circumstances of the party. 25 Kraker v. Byram, 13 Rich. 163; Nicholson v. Wilborn, 13 Ga. 467; Nichol v. Steger, 6 Lea. 393; Johnson v. Lines, 6 W. & S. 80; Hoyt v. Casey, 114 Mass. 397. infants: necessaries. 141 that in truth the knowledge or belief of the tradesman has nothing to do with the question whether the goods are necessary or not. It may be said that the question for the Court will, as a rule, be whether articles of the general class or description were prima facie neces- saries for the defendant, and the question for the jury will be whether, being of a general class or description allowed by the Court as necessary, the particular items were of a kind and quality necessary for the defendant, having regard to his station and circumstances. For instance, it would be for the Court to say whether it was proper for the defendant to buy a watch on credit, and for the j ury to say whether the particular watch was such a one as he could reasonably afford. But this will not hold in extreme cases. In Ryder v. Wombwell (b) the Court of Exchequer Chamber held, reversing the judgment of the majority below on this point, that be- cause a young man must fasten his wristbands somehow it does not follow that a jury are at liberty to find a pair of jeweled solitaires at the price of 252. to be neces- saries even for a young man of good fortune. There is a point of costliness and luxury — not of course to be verbally defined — beyond which an article, though be- longing to a useful and even necessary class, and capa- ble of real use, cannot be called necessary. •fa The general result appears to stand thus: — [ -^ 71] When it is sought to enforce a contract against an Results, infant on the ground that it was for" necessaries, then the prima facie necessity of the commodities supplied is a question for the Court. 28 If the Court holds them not prima facie necessary, evidence may be given of special circumstances render- ing them in fact necessary, and the legal sufficiency of such evidence is a question for the Court." • Subject as above, the necessity of the cpmmodities is a question of fact. Commodities of a description in itself necessary are not necessaries when the buyer is already supplied with as much of the like commodities as he can reasonably want. __ ________ 26 Munson v. Washband, 31 Conn. 303. If an infant is at home and under the care and support of his parents he is not liable even for necessaries. Perrin v. Wilson, 10 Mo. 451; Connelly v. Hull, 3 McCord (S. C.) 6; Walling v. Toll, 9 Johns. 141; Hyman v. Cain, 3 Jones, (N. C.) 111. 27 Infants are liable for necessaries not by virtue of any con- tract, but on the ground of an implied legal liability, based on the necessity of the situation. 142 CAPACITY OP PARTIES. What the term "ne- cessaries' ' includes. [*72] Hitherto we have spoken of a tradesman supplying goods, this being by far the most common case. But the range of possible contracts for "necessaries" is a much wider one. " It is clearly agreed by all the books that speak of this matter that an infant may bind him- self to pay for his necessary meat, drink, apparel, physic [including, of course, fees for medical attendance, &c, as well as the mere price of medicines], and such other nec- essaries; and likewise for his good teaching and instruc- tion, whereby he may profit himself afterwards " (c). 28 Thus learning a trade may be a necessary, and on that principle an infant's indenture of apprenticeship has been said to be binding on him (d). The preparation of a settlement containing proper provisions for her benefit has been held a necessary for which a minor about to be married may make a valid contract, apart from any question as to the- validity of the settlement itself (e). ■fc A more remarkable extension of the definition of necessaries is to be found in the case of Chappie v. Cooper (/), where an infant widow was sued for her husband's funeral expenses. The Court held that decent burial may be considered a necessary for every man, and husband and wife being in law the same person, the decent burial of a deceased husband is there- fore a necessary for his widow. The conclusion, though arrived at by a circuitous and highly artificial course of reasoning, seems in itself satisfactory on a broader ground, which, however, the Court did not adopt. A contract entered into for the purpose of performing an imperative moral and social, if not legal, duty which it would have been scandalous to omit, may well be con- sidered of as necessary a character as any contract for personal service or purchase of goods for personal use. 29 (c) Bac. Abr. Infancy' and Age, I. (4. 335). And see Chappie f. Cooper, 13 M. & W. 252, 13 L. J. Ex. 286. (d) Cooper v. Simmons, 7 H. & N. 707, 31 L. J. M. C. 138, per Martin, B. See, however, p. 66, supra. (e) Helps v. Clayton, 17 C. B. N. S. 553, 34 L. J. C. P. 1, see the pleadings, and the judgment of the Court ad fin. (/) 13 M. & W. 252, 13 L. J. Ex. 286. 28 As to what are regarded as necessaries, see Hall v. Butter- field, 59 N. H., where the rights and liabilities of infants are very fully considered. See, also, Perkins v. Baily, 6 La. An. 256; Tupperu. Cadwell, 12 Met. (Mass.) 559; Thrall v. Wright, 38 Vt. 494; Grace v. Hale, 2 Humph. (Ten'n.) 27; Sams v. Stock- ton, 14 B. Mon. (Ky.) 232; Levering v. Heighe, 2 Md. Ch. 81; Atchinson v. Bruff, 50 Barb. 38; Aaron v. Harley, 6 Rich. (S. C.) 26; Freeman v. Bridger, 4 Jones (N. C.) 1; Merriam v. Cunning- ham, 11 Cush. 40. " See Munson v. Washband (supra). INFANTS : NECESSARIES. 143 We refrain from any further enumeration of the various things which have been decided to be necessary or not necessary, for two reasons: that the question, though to a great extent a question for the Court, is one of judicial common sense in each particular case, for which precedents can supply no absolute authority but only more or less instructive analogies, and that to undertake such an enumeration would be to usurp the office of a Digest (g). The supply of necessaries to an infant creates only a The liability liability on simple contract, and it cannot be made the is on simple ground of any different kind of liability (h). Coke c° ntr act says: "If he bind himself in an obligation or other on y ' writing with ^ a penalty for the payment of any of [ ^ 73] these, that obligation shall not bind him"(i). A fortiori, a deed given by an infant to secure the repayment of money advanced to buy necessaries is voidable (fc). 30 Such is also the common law with regard to negotiable instruments (/.). But it is said that a bill or note 31 given by an infant to a creditor for necessaries may be valid if it is not payable to order or negotiable (m). There are some particular contracts of infants valid what con- by custom. By custom incident to the tenure of gavel tracts an kind an infant may sell his land of that tenure at the infant can age of fifteen, but the conveyance must be by feoff- ^to^^ ment, and is subject to other restrictions (n). This, however, is not a full capacity of contracting, for there is no reason to suppose that an action could be brought against the infant for a breach of the contract for sale, or specific performance of it enforced. (g) See the cases collected, Fisher's Dig. 4632 — 5, or Leake, 549. (h) At common law a loan of money could not be deemed equivalent to necessaries, though actually spent on necessaries: >Bac. Abr. 4. 356. It is suggested by my American editor, Mr. Wald, that the obligation is really quasi ex contractu only. In one American case which he cites it has been held that an infant is bound to pay for necessaries though, when they were supplied he was too young to understand the nature of a contract; and in several others that his duty is to pay, not the price expressly promised, but the reasonable value. (i) Co. Lit. 172. a, cp. 4 T. R. 363. (k) Martin v. Gale, 4 Ch. D. 428. (?) And so of accounts stated, but these are now absolutely void, as well as loans of money to infants. Supra, p. 60. (m) Anon. MS. Fisher's Dig. 4626. Cp. Eolle Ab. 1. 729, pi. 7. (n) Bacon Ab. Gavelkind, A., 4. 49; Da v. Conv. 2. pt. 1. 221. (3d ed.); Dart, V. & P. ad init. 30 Stone v. Dennison, 13 Pick. 1 Guthrie v. Morris. 22 Ark. 411. 31 Handy v. Waters, 38 Me. 450; Wright v. Steele, 2 N. H. 51; Goodsell v. Myers, 3 Wend. (N. Y.) 478. 144 CAPACITY Of PARTIES. " Also by the custom of London an infant unmarried and above the age of fourteen, though under twenty- one, may bind himself apprentice to a freeman of Lon- don by indenture with proper covenants; which cove- nants by the custom of London shall be as binding as if he were of full age," and may be sued upon in the superior courts as well as in the city courts (o). By statute. Infants, or their guardians in their names, are em- powered by statute (11 Geo. 4 & 1 Wm. 4, c. 65, ss. 16, 17) to grant renewals of leases, and make leases under the direction of the Court of Chancery, and in like manner to surrender leases and accept new leases (s. 12). 32 (The provisions as to renewals of leases extend also to married women) (p). And by a later Act (18 [ -Jr 74] & 19 Vict. c. 43), infants may -^- with the sanction of the Court make valid marriage settlements of both real and personal property. • Infant not 4. Of an infant's immunity as to wrongs connected liable for with contract. wrong An infant is generally no less liable than an adult claim 6 is in ^ or wron g s committed by him, subject only to his being substance ex i n f ac ^ °f such age and discretion that he can have a contractu. wrongful intention, where such intention is material; 33 but he cannot be sued for a wrong, when the cause of action is in substance ex contractu, or is so directly connected with the contract that the action would be an indirect way of enforcing the contract — which, as in the analogous case of married women (q), the law does not allow. Thus it was long ago held that an infant innkeeper eould not be made liable in an action on the case for the loss of his guest's goods (r). There is an- other old case reported in divers books (s) (the clear- est of the reports is transcribed with immaterial omis- sions in a judgment of Knight Bruce, V.-C. (t), where (o) Bacon, Ab. Infancy, B., 4. 340. (p) See Dan. Ch. Pr. 2. 1917; Be Clark, 1 Ch. 292; Be Letch- ford, 2 Ch. D. 719. (q) See p. 79, infra. (V) Eolle Ab. 1. 2, Action sur Case, D. 3. (s) Johnson v. Pie, Sid. 258; 1 Lev. 169; 1 Keb. 913. (t) Stikeman v. Dawson, 1 De G. & Sm. 113; and see other cases collected ib. at p. 110, where "the case mentioned in Keble " is that which, as stated in the text, occurs in his report of Johnson v. Pie. 82 Baxter*. Bush, 29 Vt. 495; Griffin v. Schmerhorn, 27 Mo. 412. 83 Elwell v. Martin, 32 Vt. 217; Vasse v. Smith, 6 Cranch. 226; Shaw v. Coffin, 58 Me. 254; Conway v. Eeed, 66 Mo. 346; Tifft v. Id., 4 Denio, 175; Bullock v. Babcock, 3 Wend. 391; Peterson ». Haffner, 59 Ind. 130; Walker v. Davis, 1 Gray, 506. INFANTS I LIABILITY COLLATERAL TO CONTRACT. 145 it was decided that an action of deceit will not lie upon an assertion by a minor that he is of full age. It was said that if such actions were allowed all the infants in England would be ruined, for though not bound by their contracts, they would be made liable as for tort; and it appears in Keble's report that an infant had al- ready been held not liable for representing a false jewel not belonging to him as a diamond and his own. The rule is decidedly laid down in Jennings v. Run- dall (u), where it was sought to recover damages from an infant for overriding a hired mare. But if an in- But liable fant's wrongful act, though concerned with the subject- for wr <>ng matter of a contract, -^f and such that but for the con- r P T 7en m tract there would have been no opportunity of commit- Lnt rac t ting it, is nevertheless independent of the contract in though ' the sense of not being an act of the kind contemplated touching the by it, then the infant is liable. The distinction is es- subject-niat- tablished and well marked by a modern case in the t " ? a con " Common Pleas, where an infant had hired a horse for riding, but not for jumping, the plaintiff refusing to let it for that purpose; the defendant allowed his compan- ion to use the horse for jumping, whereby it was injur- ed and ultimately died. It was held that using the horse in this manner, being a manner positively for- bidden by the contract, was a mere trespass and inde- pendent tort, for which the defendant was therefore liable (x). It is doubtful whether an infant can be made liable Qu. whether quasi ex contractu (as for money received), when the liable on real cause of action is a wrong independent of contract; 2?jLJ^, j™ but since the Judicature Acts have abolished the old forms of action, the question seems of little import- ance (y).-, 5. Liability in equity on represention of full age.. Inequity When an infant has induced persons to deal with him liable and by falsely representing himself as of full age, he incurs j,^ 1 ^ )y & Ci an obligation in equity, which however in tfhe case of a jf h e re p. contract is not an obligation to perform the contract, resent him- , . _ self as of («) 8 T. E. 335. It is also recognized in Price v. Hewett, 8 Ex 146 (not a decision on the point). (x) Burnard v. Haggis, 14 C. B. N. S. 45; 32 L. J. C. P. 189. (y) The liability is affirmed by Mr. Leake (p. 546), and in the State of Vermont (Elwell v. Martin, 22 Vt. 217, ap. Cooley on Torts, 112), and disputed by Mr. Dicey (on parties, 284), who is supported by a dictum ofWilles, J., assuming that infancy would be a good plea to an action for money received, though substan- tially founded on a wrong. Alton v. Midland Ry. Co., 19 C. B. N. S. at p. 241; 34 L. J. C. P. at p. 297. 10 PRINCIPLES OF CONTRACT. 146 CAPACITY OF PARTIES. full age ; but and must be carefully distinguished from it (z). Indeed only to the extent of any advant- [*76] age thereby gained. it is not a contractual obligation at all. It is limited to the extent we have stated above (p. 52), and the prin- ciple on which it -^C is founded is often expressed in the form : " An infant shall not take advantage of his own fraud." A review of the principal cases will clearly show the correct doctrine. 34 In Clarke v. Cobley (a) the defendant being a minor had given his bond to the plaintiff for the amount of two promissory notes made by the defendant's wife before the marriage, which notes the plaintiff delivered up. (It must be taken, though it is not clear by the report, that the defendant falsely represented himself as of full age.) The plain- tiff, on discovering the truth, and after the defendant came of age, filed his bill praying that the defendant might either execute a new bond, pay the money, or de- liver back the notes. The Court ordered the defendant to give back the notes, and that he should not plead to any action brought on them the Statute of Limitation or any other plea which he could not have pleaded when the bond was given; but refused to decree payment of the money, holding that it could do no more than take care that the parties were restored to the same situation in which they were at the date of the bond. 35 In Lem- priere v. Lange, a quite recent case, it was held that an infant who had obtained the lease of a furnished house by representing himself of full age could not be made liable for use and- occupatiou (6). Cory v. Gertcken (c) shows that when an infant by falsely rep- resenting himself to be of full agehas induced trustees to pay over fund to him, neither he nor his reprer sentativea can afterwards charge the trustees with a breach of trust and make them pay again. Overton v. Banister (d) confirms this: it was there held, however, that the release of an infant cestui que trust in such a case is binding on him only to the extent of the sum actually received by him. The late case of Wright v. (z) Ace. Bartlett v. Wells, 1 B. & S. 836, 31 L. J. Q. B. 57. Declaration for goods sold, &c. Plea, infancy. Equitable repli- cation, that the contract was induced by defendant's fraudulent representation that he was of age. The replication was held bad, as not meeting the defence, but only showing a distinct equitable right collateral to the cause of action sued upon. (a) 2 Cox, 173. '(&) 12 Ch. D. 675. (c) 2 Madd. 40. (d) 3 Ha. 503. 34 Schmitheimer v. Eiseman, 7 Bush, 296; Studwell t>. Shapter, 54 N. Y. 249; Conrad v. Lane, 26 Minn. 389; Merriam v. Cun- ningham, 11 Cush. 40. 35 Badger v. Phinney, 15 Mass. 359. INFANTS : LIABILITY APART FKOM CONTRACT. 147 Snowe (e) seems not to agree with this, though Overton v. Banister was cited, and apparently no dissent ex- pressed. There a legatee had -fc given a release to the [ -^ 77] executrix, representing himself to her solicitor as of full age; afterwards he sued for an account, alleging that he was an infant at the date of the release. The infancy was not sufficiently proved, and the Court would not direct an inquiry, considering that in any event the release could not be disturbed. This appears to go the length of holding the doctrine of estoppel applica- ble to the class of representations in question, and if that be the effect of the decision its correctness may perhaps be doubted. -In Stikemen v. Dawson (f ) the There must subject of infants' liability for wrongs in general is De a positive discussed in an interesting judgment by Knight Bruce, * e P resenta - V.-C, and the important point is decided that in orrler mer edissi- to establish this equitable liability it must be shown mulation: that the infant actually represented himself to be of and tne other full age; it is not enough that the other party did not f^^ 8 * know of his minority. And as there must be an actual m i s i e d. false representation, so it has been more lately held that no claim for restitution can be sustained unless the representation actually misled the person to whom it was made. No relief can be given if the party was not in fact deceived, but knew the truth at the time; and it makes no difference where the business was actually conducted by a solicitor or agent who did not know (g). A minor cannot be adjudicated a bankrupt in the p roo f i n absence of an express representation to the creditor bankruptcy. that he was of full age. The mere fact of trading can- not be taken as a constructive representation (h). m But if a minor has held himself out as an adult, and so traded and been made bankrupt, he cannot have the bankruptcy annulled on the ground of his infancy (i); and a loan obtained on the faith -fa of an express repre- r -jl- 78] sentation that he is of full age is a claim provable in bankruptcy (k). (e) 2 De. G. & Sm. 321. ' (/) 1 De G. & Sm. 90. (V) Nelson v. Stacker, 4 De G. & J. 458. (h) Ex parte Jones, C. A., 18 Ch. D. 109, overruling Ex parte Lynch, 2 Ch. D. 227. (i) Ex parte "Watson, 16 Ves. 265; Ex parte Bates, 2 Mont. D. & D. 337. (k) Ex parte Unity Bank, 3 De G. & J. 63, see observations of Jessel, M. E. thereon, 18 Ch. D. at p. 121. 36 Smith v, Kelly, 13 Met. 309; Decell v. Lewenthal, 57 Miss. 331. 148 CAPACITY OF PARTIES. But subse- quent valid con tract after full age prevails. A transaction of this kind cannot stand in the way of a subsequent valid contract with another person made by the infant after he has come of age; and the person who first dealt with him on the strength of his representing himself as of age acquires no right to in- terfere with the performance of the subsequent con- tract (I). This is another proof that the infant's false representation gives no additional force to the transac- tion as a contract. It was also held in the case referred to that, assum- ing the first agreement to have been only voidable, it was clearly avoided by the act of the party in making another contract inconsistent with it after attaining his full age. But it has been decided in Ireland (as we .have seen) that this is not so in the case of a lease granted by an infant; the making of another lease of ,the same property to another lessee after the lessor has attained full age is not enough to avoid the first lease (m). The fact that an interest in property and a right of possession had passed by the first lease, though voidable, seems a sufficient ground for the distinction. Married woman can contract only as to separate property. Old common law dis- ability. [*TO] II. Married Women. A married woman is capable of binding herself by a contract, only "in respect of and to the extent of her separate property" (n). This limited capacity is created by a statute founded on the practice of the Court of Chancery, which for. more than a century had protected married women's separate interests in the manner to be presently mentioned. Except as to separate property the old common law rule still exists, though with greatly diminished *^- importance. That rule is that a mar- ried woman cannot bind herself by contract at all. If she attempts to do so " it is altogether void, and no action will lie against her . husband or herself for the breach of it" (o). And the same consequence follows as in the case of infants, viz., that although a married woman is answerable for wrongs committed by her dur- ing the coverture, including frauds, and may be sued for them jointly with her husband, or separately if she survives him, yet she cannot be sued for a fraud where (I) Ininan v. Inman, 15 Eq. 260. (m) Slator v. Brady, 14 Ir. C. L. 61, supra, p. 55. (n) Married Women's Property Act, 1882, 45 & 46 Vict. c. 75, s. 1. (o) Per Cur. Fairhurst v. Liverpool Adelphi Loan Association, 9 Ex. 422, 429, 23 L. J. Ex. 164. MARRIED WOMEN : COMMON LAW. 149 it is directly connected with a contract with her, and is the means of effecting it and parcel of the same trans- action, e. g., where the wife has obtained advances from • the plaintiff for a third party by means of her guaranty, falsely representing herself as sole (o) ; but it is doubt- ful whether this extends to all cases of false representa- tion by which credit is obtained (p). For the same rea- son — that the law will not allow the contract to be in- directly enforced — a married woman is not estopped from pleading coverture by having described herself as sui iuris (q): The fact that a married woman is living and trading apart from her husband does not enable her at common law to contract so as to give a right of action against herself alone (r). 37 Nor does it make any difference if she is living separate from her husband under an ex- press agreement for separation, as no agreement between husband and wife can change their legal capacities and characters (s). But " a married woman, though incapable of making B U t may a contract, is capable of having a chose in action con- acquire con- ferred upon her, which will survive to her on the death tractual of the husband^ unless he shall have interfered by do- ^ s: ing some -^ act to reduce it into possession " : thus she r jl, gQi might, before the Married Women's Property Act, buy husband's railway stock, and become entitled to sue for dividends benefit if he jointly with her husband (t). When a third person exercise assents to hold a sum of money at the wife's disposal, tll g m urlDg but does not pay it over, this is conferring on her a coverture- chose in action within the meaning of the rule (u). otherwise During the joint lives of the husband and wife the f°r her own husband is entitled iure mariti to receive any sum thus ' due; " but if the wife dies before the husband has re- ceived it, the husband, although his beneficial right re- mains the same, must in order to receive the money take out administration to his wife; and if he dies without (p) Wright v. Leonard, 11 C. B. N. S. 258, 30 L. J. C. P. 365, where the Court was divided. (q) Cannam v. Farmer, 3 Ex. 698. (r) Clayton v. Adams, 6 T. E. 605. (s) Marshall v. Rutton, 8 T. E. 545; see Lord Brougham's re- marks, 3 M. & K. 221. (0 Per Cur. Dalton v. Midland Ey. Co. , 13 C. B. 474, 22 L. J. C. P. 177. And see 1 Wins. Saund. 222, 223. On the question what amounts to reduction into possession, see Williams on Ex- ecutors, 1. 856 (7th. ed.), Widgery v. Tepper, 5 Ch. D. 516. («) Fleet v. Penins, L. E. 3 Q. B. 536, 4 Q. B. 500. S7 Norris«. Lantz, 18 Md. 260; Farrer v. Bessey, 24 Vt. 89; Rogers v. Higgins, 48 111. 211; Edwards v. Davis, 16 Johns. 281; Sewing Machine Co. v. Maxwell, 63 Mo. 486. if she survive. 150 CAPACITY OF PARTIES. Cannot during coverture renew debt barred by Stat.;of Limitation. [*81] having done so, it is necessary that letters of adminis- tration should be taken out to the wife's estate (for such is still the legal character of the money), but the wife's administrator is only a trustee for the representative of. the husband" (x). 3a Accordingly the Court of Probate cannot dispense with the double administration, even where the same person is the proper representative of both husband and wife, and is also beneficially en- titled (y). Inasmuch as according to the view established by modern decisions a promise to pay a debt 'barred by the Statute of Limitation operates not by way of post- dating the original contract so as to "drawdown the promise" then made, but as a new contract founded on the sub- sisting consideration (see the chapter on Agreements of Imperfect Obligation, infra), a married woman's gen- eral incapacity to contract prevents such a promise, if made by her, from being effectual; and where before the marriage she became a joint debtor with another per- son, that person's -^- acknowledgment after the marriage is also ineffectual, since to bind one's joint debtor an acknowledgment must be such as would have bound him if made by himself (z). The rules of law concerning a wife's power to bind her husband by contract, either as his actual or osten- sible agent or, in some special circumstances, by a pe- culiar authority -independent of agency, do not fall within the province of this work. Exceptions: Queen Con- sort. Exceptions at common law. — The wife of the King of England may sue and be sued as a feme sole (Co. Litt. 133 a). Wife of person civilly dead. The wife of a person civilly dead may sue and be sued alone (lb. 132 6, 133 a). The cases dwelt on by Coke are such as practically cannot occur at this day, and it seems that the only person who can now be regarded as civilly dead are persons convicted of felony, and not lawfully at large under any licence (a). An alien (x) Per Lord Westbury, Partington v. Atty.-Gen., L. E. 4 H. L. 100, 119. (y) In the goods of Harding, L. R. 2 P. D. 394. lz) Pittam v. Foster, 1 B. & C. 248; 1 Wms. Saund. 172. (a) Transportation was considered as an abjuration of the 38 A promise by a woman alter the death of her husband, to make a compensation for money lent or work done at her request during coverture, is binding. Trout v. McDonald, 2Norris, 144; Gouldingi;. Davidson, 26 N. Y. 604; Wilson v. Burr, 25 Wend. 386. MARRIED WOMEN. 151 enemy, though disabled from suing, is not civilly dead, and his wife cannot sue alone on a contract made with her either before or during coverture; so that while he is an alien enemy neither of them can maintain an ac- tion on the contract. The remedy may thus be irrecov- erably lost by the operation of the Statute of Limita- tion, but this inconvenience does not take the case out of the general rule (b). This -fa decision does not ex- [ ~K 82] pressly overrule any earlier authority (and there is such authority) (c) for the proposition that she may be sued realm, which could be determined only by an actual return after the sentence had expired; Carrol v. Blencow, 4 Esp. 27. The analogy to Coke's 'Civil Death' is discussed, arg. in Ex parte Franks, 7 Bing. 762. (6) De Wahl v. Braune, 1 H. & N. 178, 25 L. J. Ex. 343. Per- haps it may be doubted whether ' civil death ' was ever really appropriate as a term of art in English courts except ' when a man entereth into religion [i. e. a religious order in England] and is professed ' : in that case he could make a will and appoint executors (who might be sued as such for his debts, F. N. B. 121, O), and if he did not. his goods could he administered (Litt. s. 200, Co. Litt. 131 6). Bracton, however, speaks .of outlawry (426 6) as well as religious profession (301 b) as mors civilis. A person under the penalties of praemunire, which include being put out of the Queen's protection, would, I suppose, be in the same plight as an outlaw. The Roman mors civilis was a pure legal fiction, introduced not to create disabilities, hut to obviate the inconvenient results ol disabilities otherwise created. (Sav. Syst. 2. 164.) As to the mort civile of modern French law (now abolished since 1854), see ib. 151 sqq. (e) Derry v. Duchess of Mazarine, 1 I.d. Eaym. 147. Lord Kenyon twice held that the wife of an alien who has left the kingdom for some time, and is not known to have any intention of returning, may be sued alone on contracts made by her after his departure (Walford v. Duchess de Pienne, 2 Esp. 554; Franks v. same defendant, ib. 587; Dicey on Parties, 296); the reason being, it seems, that in the case of an alien no animus revertendi could he presumed. But in a third action against the same de- fendant (the husband having in the mean time returned to Eng- land and gone away again) Lord Ellenborough took a different view and nonsuited the plaintiff. He thought such an action could be maintained only when the husband had never been in the kingdom (in which case the right of action had already been upheld by the Court of Common Pleas (De Gaillon v. L'Aigle, 1 Bos. & P. 357); here the husband had lived with his wife in Eng- land, and was under no legal disability to rejoin her. The Court refused a rule to set aside the nonsuit. (Kay v. Duchess de Pienne, 3 Camp. 123.) In a more modern case, again, the Court of Ex- chequer thought that Lord Ellenborough had conceded too much, and that such an action was in no case maintainable without show- ing that on the particular occasion the wife actually contracted as a feme sole. (Barden v. Keverberg, 2 M. & W. 61, 6 L. J. Ex. 66.) It is submitted that as to the former point it would he enough to show that the husband never had an English domicil, or at all events that he never resided in England. It seems un- reasonable that the mere fact of his having at sometima been in 152 CAPACITY OF PARTIES. alone, suit. But it is conceived that such must be the re- Of alien who has left the kingdom: qu. Custom of London as to married ■woman trading alone. [*88] Contracts with hus- band as to separation, &c. may he good. It appears to be the result of the authorities that the wife of an alien husband who has never been in Eng- land may bind herself by contract if she purports to contract as a feme sole. " By the custom of London, if a feme covert, the wife of a freeman, trades by herself in a trade with which her husband does not intermeddle, she may sue and be sued as a feme sole, and the husband shall be named only for conformity; and if judgment be given against them, she only shall be taken in execution." (Bacon, Abr. Customs of London, D.) This custom applies only to the city courts (d), and even there the formal joinder of the -^ husband is indispensable. But if acted upon in those courts it may be pleaded as matter of defence in the superior courts (e), though they do not otherwise notice the custom (/). In certain exceptional cases in which the wife has an adverse interest to the husband she is not incapable of contracting with him. Where a wife had instituted a suit for divorce, and she and her husband had agreed to refer the matters in dispute to arbitration, her next friend not being a party to the agreement, the House of Lords held that under the circumstances of the case she might be regarded as a feme sole, that the agree- ment was not invalid, and that the award was there- fore binding (g). The real object of the reference and award in this case having been to fix the terms oft a separation, it was later held that the Court would not refuse to enforce an agreement to execute a deed of separation merely be- cause it was made between the husband and wife with- out the intervention of a trustee (h). But it does not follow that in such a transaction a married woman has all the powers of a feme sole. She has only those which England should make all the difference. But the question is now of little interest. (d) Caudell v. Shaw, 4 T. B. 361. (e) Beard v. Webb, 2 Bos. & P. 93. Since the Act of 1882 the only effect of the custom, if any, seems to be that a married wo- man trading in the City of London may be subjected to greater personal liability than elsewhere. (/) Caudell v. Shaw, supra. (g) Bateman u Countess of Ross, 1 Dow. 235. (h) Vansittart o. Vansittart, 4 K. & J. 62; 27 L. J. Ch. 222; but the agreement not enforceable for other reasons; affirmed on appeal, 2 De 6. & J. 249; 27 L. J. Ch. 289; but no opinion given on this point. MARRIED WOMEN. 153 the necessity of the case requires. She is probably competent to compromise the suit with her husband; but she cannot, as a term of the compromise, bind her real estate (not being settled to her separate use) with- out the acknowledgment required by the Fines and Recoveries Act (h). Statutory exceptions other than Married Women's Statutory Property Act. exceptions: By the Act constituting the Court for Divorce and judicial Matrimonial Causes, 20 & 21 Vict. c. 85, a wife judi- separations cially ~f{ separated from her husband is to be consid- and P r °tec- ered whilst so separated as a feme sole for the purposes r°? emi 18 ' of (inter alia) contract, and suing and being sued in "■ any civil proceedings ( s. 26) (i); and a wife deserted by her husband who has obtained a protection order is in the same position while the desertion continues (s. 21). This section is so worded as when taken alone to countenance the supposition that the protection order re- lates back to the date of desertion. It has been decided, however, that it does not enable the wife to maintain an action commenced by her alone before the date of the order (j). These provisions are extended by an amending Act in certain particulars not material to be noticed here (21 & 22 Vict. c. 108, ss. 6-9); and third parties are indemnified as to payments to the wife, and acts done by her with their permission, under an order or decree which is afterwards discharged or reversed (s. 10). The words as to "suing and being sued," in this section are not confined by the context to matters of property and contract, but are to be liberally construed: a married woman who has obtained a protection order may sue in her own name for a libel (fc). In the last century, if not earlier, the Court of Chan- Equitable eery recognized and sanctioned the practice of settling doctrine of property upon married women to be enjoyed by them ^tate & for their separate use and free of the husband's inter- (h) Cahill v. Cahill, 8 App. Ca. 420. (i) The same consequences follow a fortiori on a dissolution of marriage, though there is no express enactment that they shall: Wilkinson v. Gibson, 4 Eq. 162; see also, as to the divorced wife's rights, Wells v. Malbon, 31 Beav. 48; Fitzgerald v. Chapman, 1 Ch. D. 563; Burton v. Sturgeon (C. A.), 2 Ch. D. 318. (j) Midland Ev. Co. c. Pye, 10 C. B. N. S. 179; 30 L. J. C. P. 314. (k) Eamsden v. Brearley, L. R. 10 Q. B. 147. She can give a valid receipt for a legacy not reduced into possession before the date of the order: Be Coward & Adam's Purchase, 20 Eq. 179. 154 CAPACITY OP PARTIES. ference or control. To this was added, towards the end of the 18th century, the curious and anomalous de- vice of settling property in trust for a married woman "without, power of anticipation," so that she cannot deal in any way with the income until.it is actually pay- ["^"85] a ble. During the present century a doctrine -^- was elaborated, not without difficulty and hesitation, under which a married woman having separate property at her disposal (not subject to the peculiar restraint just mentioned) might bind that property, though not her- self personally, by transactions in the nature of con- tract. Some account of this doctrine is given for ref- erence in the Appendix. The authorities which estab- lished it are still applicable, as regards property ac- quired by a married woman for her separate use before January l s 1883, to transactions before that date on which any claim in respect of such property is founded. The Married Women's Property Act. 45 & 46 Vict. The provisions of the Married Women's Property c. 75. Act, 1882, are so much wider that they may be describ- ed as a new body of law, consolidating and superseding the results of the cases in equity as well as the pre- vious Acts of 1870 and 1874, which this Act repealed. Th« law, as now declared, is to this effect: Separate property is (i) Property acquired; by any married woman after January 1, 1883, including earnings (I): (ii) Property belonging at the time of marriage to a woman marrying after January 1, 1883 (m): , Special trusts created in favour of a married, woman by will, settlement or otherwise are not affected by the Act (n). Subject to any settlement (o), a married woman can bind herself by contract " in respect of and to the ex- ' tent of her separate property," and can sue and be sued alone ( p). Damages and costs, if recovered by her, become her separate property; if against her, are payable out of her separate property and not otherwise (q). A mar- (Z) Ss. 5, 25. (m) S. 2. (n) S. 19. (o) See Stonor's Trusts, 24 Ch. D. 195. (p) As to the retrospective operation of the Act with regard to power to sue on a cause independent of contract, see Weldon v. Winslow, C. A., 13 Q. B. D. 784. (q) S. 1, sub-s. 2. MAKRIKD WOMEN. 155 ried -fa woman trading alone can be made bankrupt in [ -fa 86] respect of her separate property (q). A contract made by a married woman. (i) Is presumed to be made with respect to and to bind her separate property (r) : (ii) If so made and binding, binds her after-acquir- ed separate property (s). A married woman's separate property is liable for her ante-nuptial debts and obligations (t). She cannot avoid this liability by settling the property on herself without power of anticipation (it). As to women married before January 1, 1883, such liability applies only to separate property acquired by them under the Act (t). The Act contains other provisions as to the title to stocks and other investments registered in a married woman's name either solely or jointly (as), the effecting of life assurances by a married woman, or by either husband or wife for the benefit of the family (y), pro- cedure for the protection of separate property (z), and other matters which belong more to the law of Pro- perty than to the law of Contract. It«is not expressly stated by the Act whether on the termination of the coverture by the death of the hus- band, or by divorce, a married woman's debts contract- ed during the coverture with respect to her separate property do or not become her personal debts. If not, the only remedy would be against her separate property which existed as such during the coverture, so far as it could still be identified and followed. It can hardly have been intended by the legislature that a creditor should be the worse off by -^- his debtor acquiring a [ -fa 87] greater legal capacity. Perhaps the words " separate property " are large enough, though not strictly apt to include property belonging to or acquired by a wo- man who has become a feme sole. III. Lunatics and Dktjnken Persons. It will be convenient to consider these causes of dis Drunkeness ability together, since in our modern law drunken men and Lunacy, and lunatics are in the same position with regard to the (q) S. 1, sub-s. 5. (r) Formerly there was no such presumption unless she was liv- ing apart from her husband. See note C. (s) 8. 1, sub-ss. 3, 4. Formerly otherwise: Pike v. Fitzgibbon, C. A., 17 Ch. D. 454. (t) S. 13. This liability is at least doubtful in cases not under the Act: see Appendix, Note C. («) S. 19. (*) Ss. 6—10. (y) S. 11. («) S 12. 156 CAPACITY OF PARTIES. capacity of contracting. Three different theories on the matter have at different times been entertained in English courts and supported by respectable authority. Before we specially mention these it will be best to dispose of the points on which there has not been any substantial conflict. Lunatic's marriage void. General law: Points always admitted: lunatic's contract in lucid in- terval good. Liability for necessaries, &c. [*88] First, as to the peculiar and exceptional contract of marriage. The marriage of a lunatic is void, and there is no ground for requiring a less degree of sanity for a valid marriage than for the making of a will or for other purposes (a). Apart from this, it seems to have been always admitted, on the one hand that a lunatic is incapable of contracting or doing other acts in the law after he has been found lunatic by inquisition and while the commission of lunacy is in force (6); and, on the other hand, that a lunatic who has lucid inter- vals is capable of contracting during those intervals (c). It is equally settled that a lunatic or his estate may be liable quasi ex contractu for necessaries supplied to him in good faith (d) ; 39 and this applies to all expenses necessarily incurred for the protection of his person or estate -fa such as the cost of the proceedings in lun- acy (e). 40 But it is doubtful whether a person who sup- plies necessaries to a lunatic knowing him to be such can have an action against the lunatic as on a contract "implied in law" (/). 41 A husband is liable for nec- essaries supplied to his wife while he is lunatic; for the wife's authority to pledge his credit for necessaries is not a mere agency, but springs from the relation of (a) Hancock v. Peaty, L. K. 1 P. & D. 335, 341. The statute 15 Geo. 2, c. 30 is rep. by the Stat. Law Revision Act, 1873. (6) Beverley's ca. 4 Co. Eep. 123 6 ; Bacon, Abr. Idiots and Lunatics, (F.) (c) Beverley's ca. ; Hall v. Warren, 9 Ves. 605, cp. Selby v. Jackson, 6 Beav. 192. (d) Bagster v. Earl of Portsmouth, 5 B. & C. 170, s.c. more fully nom. Baxter v. Earl P., 7D.&E. 614. (c) Williams v. Wentworth, 5 Beav. 325; Stedman v. Hart, Kay, 607. (f) Be Weaver, 21 Ch. D. C. A. at pp. 619, 620. 89 Pearl v. McDowell, 3 J. J. Marsh, 658; Sawyer v. Lufkin, 56 Me. 308; Skidmore v. Romaine, 3 Bradf. 122; Richardson v. Strong, 13 Ire. 106. 40 National Bank v. Moore, 28 P. F. Sm. 407; Abbott v. Creal, 56 Iowa, 175; Wilder v. Weakley, 34 Ind. 181. 41 It is sometimes a material circumstance that the sane per- son did not know of the other's insanity. Crawford v. Stovell, 13 Norris, 48; Shoulters v. Allen, 51 Mich. 529; Fecel v. Guin- ault, 32 La. An. 91 ; Behrens v. McKenzie, 23 Iowa, 333; Fay «. Bur&itt, 81 Ind. 433. LUNACY AND DRUNKENNESS. 157 husband and wife and is not revoked by the husband's insanity (g). In the same way drunkenness or lunacy would be no answer to an action for money had and re- ceived, or for the price of goods furnished to a drunken or insane man and kept by him after he had recovered his reason: in this last case, however, his conduct in keeping the goods would be evidence of a new contract to pay for them (h). There is also express authority (which one would think hardly necessary) to show that contracts made by a man of sound mind who afterwards becomes lunatic are not invalidated by the lunacy (i). It seems that an agency is determined by the principal becoming in- sane, except as to persons who deal in good faith with the agent in ignorance of his insanity (k). i2 We now come to the different theories above mentioned. 1. The first is that the drunkenness or lunacy of the History of party is no ground whatever for avoiding the contract/ 3 OP 1 " 10 " 8 af For " as for a drunkard who is voluntarius dcemon, he i urm ti c &c. hath (as hath been said) no privilege thereby, but what in general. hurt or ill soever he doth, his drunkenness doth aggra- Coke: No vate it." (Co. Litt. 247 a). And although this moral man shall reason does not exist in the case of lunacy, yet the lun- ? ■ X atic is equally bound, for " no man of full age shall be received in any -fa plea by the law to disable his own [ -fc- 89] person, but the heir may well disable the person of the ancestor for his own advantage in such case." (Litt. s. 405 (I); Co. Litt. 2 6; Beverley's ca. 4 Rep. 123 b, where, however, it is said that even the heir or executor could not avoid matter of record, and another idle rea- son is given for the general rule, viz., that the party when he recovers his memory cannot remember what he did when he was non compos mentis.") As regards drunkenness, this doctrine is on the face of it a wholly (g) Read v. Legard, 6 Ex. 636: 20 L. J. Ex. 309. (A) Gore v. Gibson, 13 M. & W. 623; 14 L. J. Ex. 151. (i) Owen v. Davies, 1 Ves. Sr. 82. * (k) See Drew v. Nunn (C. A.), 4 Q. B. D. 661. (I) The text of Littleton concerns only the right of entry after a descent, but Coke's comment is general, and Beverley's case was on a bond. *' Story on Agency, 481, 487; Hill v. Day, 7 Stew. Ch. 150; Davis v. Lane, 10 N. H. 156. 43 Insanity superinduced by the fault of the insane person, as by habitual and long continued drunkenness, does not differ in. legal effect from that by the direct visitation of God. Menkins v. Lightner, 18 111. 282; Bliss v. S. K. Co., 24 Vt. 424. 44 Johns v. Fritchey, 39 Md. 258; Dulany v. Green, 4 Harring. (Del.) 285. 158 CAPACITY OP PARTIES. First modern theory: Contract void for absolute incapacity, [*90] or voidable for fraud according to circum- ttances. mistaken, application of a principle' which is properly applicable to criminal offences and merely wrongful acts, but has nothing to do with liabilities ex contractu. As regards lunacy, it is a merely frivolous technicality. However it is confidently stated as law by Coke; and we find it adopted by Lord Tenterden as late as 1827, though, as We shall immediately see, it had long before that time been exploded by other judges (m). It seems at least doubtful whether it was really supported by the authorities Coke had before him. At any rate they were conflicting, and Fitzherbert (F. N. B. 202 d) was expressly against him, considering the case of an infant as analogous. Br acton, following the civil law (n), said: "Furiosus autem stipulari non potest nee ali- quod negotium agere, quia non intelligit quid agit " (fol. 100 a, cf. 165 b; and see Fleta, 3, 3. §§ 8, 10). But it is unnecessary to discuss this further. 2. The next theory is to the following effect : If a man is so drunk or so insane as not to know what he is about, he cannot have that consenting mind which is indispens- able to the formation of a contract, and his agreement is therefore merely void. 45 But if his mind is only so con- fused or -^-weak that he cannot be said not to know what he is about, but yet is incapable of fully understanding the terms and effect of his contract, and if this is known to the other party, then he may indeed contract, but the contract will be voidable at his option, on the ground of the other party's fraud in taking advantage of his weakness, though such weakness be short of incapacity. 46 According to this the first class of cases would be reck- oned with others in which agreements are absolutely void for want of real consent (as to which see post, Ch. VIII. ) and the second would come under the general head of fraud. We find the first branch of this opinion decidedly (m) BrownT Jodrell, 3 C. & P. 33a (n) Inst. 3. 19, 8; Gai. 3. 106. For exposition of the Roman Law see Savigny, Syst. 3. 83—86; and cp. Pothier,Obl. \\ 49—51. 45 Schramm v. O'Connor, 98 111. 539; Van Wyck v. Brasher, 81 N. Y. 260; Bates v. Ball, 72 111. 108. 46 Simply being drunk at the time when the contract ia made, if the intoxication does not extend to such a degtee as to disqualify the mind to comprehend the subject of the contract and its nature and probable consequences does not impair the contract. Morris v. Nixon, 7 Humph. 579; v. Hutchinson, Clarke (N. Y.), 408; Reynolds v. Dechamus, 24 Tex. 174; Caulkins v. Fry, 35 Conn. 1704: Henry v. Ritenonr, 31 Ind. 136; Woods v. Pindall, Wright (Ohio), 507; Pickett v. Sutter, 5 Cal. 412; Cavender & Waddington, 5 Mo. App. 457. LUNACY AND DRUNKENNESS. 159 adopted in common law practice in the last century and the earlier part of this, no doubt by way of reaction against Coke's extravagant dogmas. Lunacy was held admissible as evidence under a plea of non est factum, i. e. as showing the lunatic's act to be wholly void (o) ; 47 and the like was said of drunkenness (p). Lord Ellen- borough distinctly laid down that when the existence of an agreement between the parties was in issue, it was completely negatived by the intoxication of one party at the time of making the alleged agreement; 48 and this was approved by the Court of King's Bench (q). The same view is to be found in the modern case of Gore v. Gibson (r), where however it was not material to the decision, as the drunkenness of the defendant and the plaintiff's knowledge of it were specially pleaded. 49 And both branches of the doctrine were recognized in equity and are very completely stated in a judgment of Sir W. Grant (s). ■fc "I think a Court of Equity ought not to assist a person to [ -^- 91] get rid of any agreement or deed merely upon the ground of his having been intoxicated at the time : I say merely upon that ground; as if there was . . any unfair advantage made of his situation or . . any contrivance or management to draw him into drink, he might he a proper object of relief in a Court of Equity. As to that extreme state of intoxication that deprives (o) Yates v. Boen, 2 Str. 1104. (p) Buller, N. P. 172. (g) Pitt v. Smith, 3 Camp. 33. We must noc forget the ten- dency of the Courts in the last century and the early part ot this to enlarge as much as possible the scope of the "general issue." (r) 13 M. & W. 623, 14 L. J. Ex. 151. (s) Cooke v. Clayworth, 18 Ves. 12, 15. The references to earlier cases are purposely omitted. He also said that a Court of Equity ought not to assist a person who has obtained an agree- ment from another in a state of intoxication ; but this is a mere dictum, and if it means that intoxication not such as to prevent the party from understanding the effect of his contract is of itself a sufficient ground for refusing specific performance, it is distinctly contradicted by later decisions. Lightfoot v. Heron, 3 Y. & C. Ex. 586; Shaw');. Thackray, 1 Sm. & G. 537 (but with some hes- itation, on the ground that the real defendant was not the vendor but a subsequent purchaser). 47 A person habitually insane has the power to contract in a lucid interval. Beck with v. Butler, 1 Wash. (Va.) 224; Lily v. Waggoner, 27 111. 395; Tozer v. Saturlee, 3 Grant (Pa.), 162. 48 Drunkenness in order to disqualify, need not have been brought about by the artifice of the other party. French v. Id., 8 Ohio, 214; Donelson v. Posey, 13 Ala. 752; Freeman v. Staats, 4 Halst. Ch. 814. . 49 Hawkins v. Bone, 4 Fost. and F. 311; Wilcox v. Jackson, 51 Iowa, 208. 160 CAPACITY OF PARTIES. a man of his reason, I apprehend that even at law it would in- validate a deed obtained from him while in that condition." Justifiable in theory but not conve- nient. Present theory: Contract voidable if [*92] the lunacy, &c, known to other party. Molton v. Camroux. This doctrine is quite intelligible, and in principle there is nothing to be said against it. But the dis- tinction between inability to understand so much as the nature of a transaction (which would make it wholly void) and inability to form a free and rational judgment of its effect (which if known to the other party would make it only voidable) is too fine and doubtful to be convenient in practice. The confusion of mind generally produced by drunkenness is exqui- sitely described by Chaucer in the Knight's Tale: "A dronke man wot well he hath an hous, But he not [i. e., ne wot] which the righte way is thider." Whether in any particular case a state of consciousness of this kind does or does not amount to absolute de- privation of a consenting mind for the purposes of con- tract is a question which it would be probably imprac- ticable, and certainly undesirable, for a court of justice to enter upon. The same considerations apply with almost, or quite the same force to the capacity of a lunatic. The reason why thiB inconvenience so long escaped notice appears to be that in the greater 1 number of cases it is not necessary to decide whether the agreement was originally void or only voidable. 3. The third opinion, which has now prevailed, is that the contract of a lunatic or drunken man who by reason of lunacy or drunkenness is not capable of un- derstanding its ■^■terms or forming a rational judgment of its effect on his interest is not void but only voidable at his option: and this only if his state is known to the other party. 50 The principle was established by the judgment of the Exchequer Chamber in Molton v. Camroux (t). The action was brought by administrators to recover (t) 2 Ex. 487, 4 Ex. 17; 18 L. J. Ex. 68, 356. The same prin- ciple had long beiore been acted upon in equity, but without de- ciding whether there was a contract at law: Niell v. Morley, 9 Ves. 478. 50 The modern law permits a person to set up his own insanity in avoidance of his contract. Seaver v. Phelps, 11 Pick. 304; Morris v. Clay, 8 Jones (N. C), 216; Turner v. Busk, 53 Md. 65; Webster v. Woodford, 3 Day 90; Tolson v. Garner, 15 Mo. 494; Long v. Whidden, 2 N. H. 435; Bensell v. Chancellor, 5 "Whar- ton, 371. LUNACY AND DRUNKENNESS. 161 the money paid by the intestate to an assurance and annuity society as the price of two annuities deter- minable with his life. The intestate -was of unsound mind at the date of the purchase, but the transactions were fair and in the ordinary course of business, and his insanity was not known to the society. It was held that the money could not be recovered ; the rule being laid down in the Exchequer Chamber in these terms: "The modern cases show that when that state of mind [lunacy or drunkenness, even if such as to prevent a man from knowing what he is about] was unknown to the other contracting party, and no advantage was taken of the lunatic [or drunken man], the defence cannot prevail, especially where the contract is not merely ex- ecutory but executed in the whole or in part, and the parties cannot be restored altogether to their original positions." 61 The context shows that the statement was considered equally applicable to lunacy and drunkenness, and the law thus stated involves though it does not expressly enounce the proposition that the contract of a lunatic or drunken man is not void but at most voidable. The general rules as to the rescission of a voidable contract are then applicable, and among others the rule that ' it must be rescinded, if at all, before it has been executed, so that the former state of things cannot be restored: which is the point actually decided. The decision it- self has been fully accepted and acted on (it), though the merely voluntary acts of a lunatic, -^-e. g., a voluntary r jl 931 disentailing deed (a class of acts with which we are not here concerned) remain invalid (x). The complete Development judicial interpretation of the result of Molton v. Cam- of the d- roux was given in Matthews v. Baxter (y). The declara- trine: tion was for breach of contract in not completing a pur- Matthews chase: plea, that at the time of making the alleged "" ax *' contract the defendant was so drank as to be incapable of transacting business or knowing what he was about, as the plaintiff well knew: replication, that after the defendant became sober and able to transact business he ratified and confirmed the contract. As a merely void agreement cannot be ratified, this neatly raised (u) Beaven v. M'Donnell, 9 Ex. 309; 23 L. J. Ex. 94; Price v. BerriDgton, 3 Mac. & G. 486, 495, revg. s. c. 7 Ha. 394; Elliot v. Ince, 7 D. M. G. 475, 488. (a;) Elliot v. Ince, sup. ' (y) L. E. 8 Ex. 132(1873). 51 Foss v. Hildreth, 10 Allen, 76; Gibson v. Soper, 6 Gray, 279; Halley v. Troester, 72 Mo. 73. ■ 11 PEINCIPLES OF CONTRACT. 162 CAPACITY OF PARTIES. Statement of rule as now settled. Partial delusions compatible with capacity for contracting. [*94] the question whether the contract were void or only voidable: the Court held unanimously (one member of it expressly on the authority of Molton v. Camroux) that it was only voidable, and the replication therefore good. The special doctrine of our Courts with regard to partnership (which is a continuing contract) is quite in accordance with this : it has long been established that the insanity of a partner does not of itself operate as a dissolution of the partnership, but is only a ground for dissolution by the Court (z). The law may be said then on the whole to be now settled to the following effect : A contract made by a person who is drunk or of unsound mind so as to be in- capable of understanding its effect is voidable at that person's option, unless the other contracting party did not believe and had not reasonable cause to believe that he was drunk or of unsound mind. 52 It is to be noted that the existence of partial delu- sions does not necessarily amount to insanity for the purposes of this rule. 53 ' The judge or jury, as the case maybe, must in every case consider the practical ques- tion whether the -fa party was incompetent to manage his own affairs in the matter in hand (a). Indian Contract Act. The Indian Contract Act treats those cases some- what differently, making the agreement void (s. 12) : ' : A person is said to be of sound mind for the purpose of mak- ing a contract if, at the time when he makes it, he is capable of understanding it, and of forming a rational judgment as to its effect upon his interests. A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. (z) Lindley, 1. 224. (a) Jenkins v. Morris (C. A.), 14 Ch. D. 674; compare remark of Bramwell, L. J. in Drew v. Nunn, 4 Q. B. D. at p. 669. 52 Northwestern Ins. Co. v. Blankenship, 94 Ind. 553; Riggan r. Green, 80 N. C'236; Wirebach v. Easton Bank, 1 Out. (Pa.) 543: Crawford v. Scovell, 13 Norris, 48. 53 There may be delusions on independent subjects, or even a general insanity which will not impair the contract, Lozear v. Shields, 8 C. E.' Green, 509; Searle v. Galbreath, 73 111. 269. LUNACY AND DRUNKENNESS. 163 Illustrations. (a) A patient in a lunatic asylum, who is at intervals of sound mind, may contract during those intervals. 54 (6) A sane man who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract or form a ra- tional judgment as to its effect on his interests, cannot contract whilst, such delirium or drunkenness lasts." This however must be read in connexion with s. 65: — " When an agreement is discovered to be void, or when a con- tract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it." The possibility or hardship to persons who have dealt in good faith with a lunatic who was apparently sane is, it would seem, disregarded by the Indian Act as being in practice exceedingly small : and the liability of a lunatic to pay for necessaries is laid down in the chap- ter " Of certain Relations resembling those created by Contract," s. 68. IV. Convicts, etc. At common law convicted felons (as also outlaws) Disability of could not sue, but remained liable to be sued, on con- convicts, tracts made -j^- by them during outlawry or convic- [ -fa 95 J tion (6). Since the Act to abolish forfeitures for treason and felony, convicts are incapable of suing or making any contract, except while they are lawfully at large under any licence (c). Alien enemies, as we have seen above, are disabled Alien from suing in an English Court, but not from binding enemies, themselves by contract during.war between their country and England, nor from enforcing such a contract after the war has ceased (d), unless meanwhile the right of action has been barred by the Statute of Limitation. We now come to the extensions by special institutions Extension of of the ordinary power of making contracts. And first P owera - of agency. (5) Dicey on Parties, 4. (c) 33 & 34 Vict. c. 23, ss. 8, 30. (d) De Wahl v. Braune, 1 H. & N. 178, 25 L. J. Ex. 343: note (6), ante, p. 81. 5 * Beckwith v. Butler, 1 Wash. (Va.) 224; Hall v. Warren, 9 Vesey, 605. 164 CAPACITY OF PARTIES. 1. Agency. Agency. We have not here to do with the relations created be- tween principal and agent by agency regarded as a species of contract, but only with the manner in which rights and duties accrue to the principal through the dealings of the agent. We must also distinguish cases of real agency from those where the agency is- appar- ent only, and we shall further notice, for the sake of completeness, the position of the true or apparent agent as regards third persons. A person who contracts or professes to contract on behalf of a principal may be in any one of the follow- ing positions: 1. Agent having authority (whether at the time of by-subsequent ratification) 55 to bind his principal. (A) known to be an agent (a) for a principal named; . (/?) for a principal not named. (B) not known to be an agent (e). [ -jf 96] "A" 2. Holding himself out as agent, but not having au- thority to bind his principal. (A) where a principal is named (a) who might be bound, but does not in fact authorize or ratify the contract. (/?) who in law cannot be bound. (B) where the alleged principal is not named. Authority of 1- We shall not here dwell on the creation or deter- agent, its mination of an agent's authority. As a rule an agent constitution jj) a y De appointed without any special formality; 56 and termina- ^jj^gh au a g enr to execute a deed must himself be ap- pointed by deed, and in certain cases the appointment is required by the Statute of Frauds to be in writing. 5 ' Revocation of an agent's authority takes place either by the principal's actual withdrawal of his will to be represented by the agent (which may be known either by express declaration or by conduct manifesting the (e) Since the cases of Calder v. Dobell. Fleet v. Mnrton, and Hutchinson v. Tatham (see following notes), it may perhaps be considered that the true leading distinction is whether the agent, is known to be an agent or not, rather than whether the princi- pal is named or not. 85 Williams v. Butler, 35 111. 544; Wilson v. Dame, 58 N. H. .392; Pollock v. Cohen, 32 Ohio, 514. 56 The law may create an agency, as when it authorizes the wife # to pledge her husband's credit although he dissents. Benjamin v. Dockham, 134 Mass. 418; Bishop on Contracts, Sec. 235, 949. 57 Miles v. Cook, 1 Grant (Pa.), 58; Small v. Owings, 1 Md. Ch. 363; Shaw v. Nudd, 8 Pick. 9; Challoner v. Bouck, 56 Wis. 652. AGKJSTCY. 165 same intention) or by his dying or ceasing to be sui iuris, and thus becoming incapable of continuing it (/ ). ia In these last cases the authority is said to be revoked by the act of the law. " The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him. or, so far as regards third person, before it becomes known to them (fir). 59 It is held in England, but anom- alously, that this rule does not apply to revocation by the death of the principal (h). It does apply in the case of the principal becoming insane, and it may perhaps yet be decided that in the case of death the principal's estate is liable to the other party for the actual loss incurred by the principal's representation — which, as -^ regards him, was a continuing one at the [ w 97] date of the contract — that the agent was authorized (»). In all cases where^there is an authorized agent deal- i. Agent ing on behalf of a real principal, the intention of the for exist- parties determines whether the agent or the principal, or in S P rm " both, are to be liable on the contract and entitled to en- Clpa ' force it. The question is to whom credit was really given (A;). 60 And the general rules laid down on the" subject furnish only provisional answers, which may be displaced (subject to the rules as to admissibility of evidence ) by proof of a contrary intention. A. When the agent is known to be an agent, a con- a. Known tract is made, and knowingly made, by the other party to be an with the principal, on which the principal is the proper a g ent: 9°°" person to sue and be sued. 61 principal ab (/) On the whole subject see at large Story on Agency, $? ml i0 ' 474, sqq. (g) I. C. A. 208, cp: Story on Agency, \ 470; Trueman v. Lo- der, 11 A. & E. 589. (A) Blades v. Free, 9 B. & C. 167. Contra, I C. A. s. 208 (Illust. a), Code Nap. .2008, 2009, and German Commercial Code, a. 54; and see Kent, Comm. 2. 646. (i) Drew v. Nunn (C. A.), 5 Q. B. D. 661; see Brett, L. J. at p. 668. (k) Story on Agency, U 279, sqq. 288. Thomson v. Daven- port, in 2 Sm. L. C. ; Calder v. Dobell, L. E. 6 C. P. 486. 58 As to dying, see Michigan Ins. Co. v. Leavenworth, 30 Vt. 11; Boone v. Clarke, 3 Cranch. 389; Saltmarsh v. Smith, 32 Ala. 404. As to insanity, see Story on Agency, Sec. 481, 487; Drewa. Nunn, 4 Q. B. D. 661; Davis v. Lane, 10 N. H. 156. 59 Jones v. Commercial Bank, 78 Ky. 413. 60 Whitney v. Wyman, 101 U. S. 392; Ogden v. Raymond, 22 Conn. 379; Seery ». Socks, 29 111. 313; Abbay v. Chase, 6 Cush. 54. 61 Moir v. Hopkins, 16 111! 313; 1 Bishop on Criminal Law, Sec. 631; Exum v. Brister, 13 Miss. 391. . 166 CAPACITY OF PARTIES. a. Prin- cipal named ligent prima facie does not contract- in person. /?. Principal not named : agent prima facie does contract in person. [•98] Evidence of contrary in- tention (a). And when the principal is named at the time, then there is primd facie no contract with the agent: but when the principal is not named, then primd facie the agent, though known to be an agent, does bind himself personally, the other party n<5t being presumed to give credit exclusively to an unknown principal (Z). 62 But when the agent would not prima facie be a con- tracting party in person he may become so in various ways. Thus he is personally liable if he expressly undertakes -^( to be so (to) : such an undertaking may be inferred from the general construction of a contract in writing, and is always inferred when the agent con- tracts in his own name without qualification (n), 63 though the principal is not the less also liable, whether named at the time or not (o), or if he himself has an interest in the subject-matter of the contract, as in the case of an auctioneer (p). And when the agent is deal- ing in goods for a merchant resident abroad, it is held on the ground of mercantile usage and convenience that without evidence of express authority to that effect the commission agent cannot pledge his foreign constitu- (l) But one who deals with an agent known to be such cannot set off against the principal's claim a debt due to him from the agent. If he has employed an agent on his own part, that agent's knowledge is for this purpose treated as the employer's own : and this even though the knowledge was not acquired in the course of the particular employment: Dresser r. Norwood, Ex. Ch., 17 C. B. N. S. 466, 34 L. J. C. P. 48, revg. s. c. 14 C. B. N. S. 574. 32 L. J. C. P. 201. The Indian Contract Act has followed the view of the C. P. in preference to that of the Ex. Ch. See s. 229. And perhaps the question may deserve to be reconsidered if it ever comes before a court of last resort. (m) Story on Agency, § 269. Smith, Merc. Law, 158. (») See Fairlie v. Fenton, L. R. 5 Ex. 169, Paice v. Walker, ib. 173. The latter case, however, goes too far; see note, u, next page. (o) Higgins v. Senior, 8 M. & W. 834: the law there laid down goes to superadd the liability of the agent, not to take away that of the principal, Calder v. Dobell, L. E. 6 C. P. 486. Astowhen directors of companies are personally liable on documents signed by them, see Lindley, 1. 346-352, and in addition to authorities there collected, Dutton v. Marsh, L. R. 6 Q. B. 361. (j») 2 Sm. L. C..399. As to an auctioneer's personal liability for non-delivery to a purchaser of goods bought at the auction, Woolfe v. Home, 2 Q. B. D. 355. 62 Sayre v. Nichols, 5 Cal. 487; McBean v. Morrison, A. K. Marsh (Ky.), 545; Hall v. Cockrell, 28 Ala. 507; Megent v. Hickey, 2 La. An. 358; Bass v. Randal], 1 Minn. 404; Collins v. Buckeye Ins. Co., 17 Ohio, 215; Fash v. Ross, 2 Hill (S. C. ), as 294. 63 When an agent does not disclose the name of his principal his agency will be held as principal. Merrill »>. Wilson, 6 Ind. 426; Pierce v. Johnson, 34 Conn. 274; Royce v. Allen, 28Vt.234. and see Curtis v. Scoles, 1 Iowa, 471. CONTRACTS OF AGENTS. 167 ent's credit, and therefore contracts in person (q). Technical When a deed is executed by an agent as such but pur- j Ul V ls f t0 ports to be the deed of the agent and not of the prin- a gent° cipal, then the principal cannot sue or be sued upon it at law, by reason of the technical rule that those per- sons only can sue or be sued upon an indenture who are named or described in it as parties (r). And it is also held that a party who takes a deed under seal from an agent in the agent's own name elects to charge the agent alone (s). A similar rule has been supposed to exist as to negotiable instruments: but modern decisions seem -^- to show that when an agent is in a position to [ w »9] accept bill so as to bind his principal, the principal is liable though the agent signs not in the principal's name but in his own, or, it would appear, in any other name. It is the same as if the principal had signed a wrong name with his own hand (t). Again, an agent who would otherwise be liable on Evidence of the contract made by him may exempt himself from lia- contrary bility by contracting in such a form as makes it appear intentlon (/")■ on the face of the contract that he is contracting as agent only and not for himself as principal (m) : but even then be may be treated as a contracting party and personally bound as well as his principal by the custom of -the particular trade in which he is dealing (a?). Or ( q) Armstrong v. Stokes, L. R. 7 Q. B. 598, 605. Ace. Elb- inger Aetien-Gesellschaft v. Claye, L. R. 8 Q. B. 313, showing that the foreign principal cannot sue on the contract; Hutton v. Bulloch, ib. 331, affirmed in Ex. Ch. 9 Q. B. 572, that he cannot be sued: New Zealand Land Co. v. Watson, 7Q. B. D. 374. In Maspons y Hermano v. Mildred, 9 Q. B. D. 530, the Court of Ap- peal refused to extend this doctrine to a case where the commis- sion agent as well as the principal was foreign ; the decision was affirmed in H. L., 8 App. Ca. 874, but this point not discussed. (r) Lord Southampton v. Brown, 6 B. & C. 718; Beckham v. Drake, 9 M. & W. at p. 95. («) Pickering^s claim, 6Ch. 525. ft) Lindus «. Bradwell, 5 C. B. 583, 17 L. J. C. P. 123. Cp. Edmunds v. Bushell, L. R. 1 Q. B. 97. (u) Words in the body of a document which amount to a per- sonal contract by the agent are not deprived of their effect by a qualified signature: Lennard v. Robinson, 5 E. & B. 125; 24 L. J. Q. B. 275: Hutcheson r. Eaton, C. A., 13 Q. B. D. 861, see per Brett, M. R. , at p. 865: and the description of him as agent in the body of the document may under special circumstances not be enough to make him safe, Paice v. Walker, L. R. 5 Ex. 173; see the remarks on that case in Gadd v. Houghton (C. A.) 1 Ex. D. 357, which decides that a contract "on account of" a named principal conclusively discharges the agent. Paice v. Walker is nearly but not quite overruled, see Hough v. Manza- nos, 4 Ex. D. 104. (a) Humfrey v. Dale, 7 E. & B. 266, E. B. & E. 1004, 26 L. J. 168 CAPACITY OF PARTIES. [jflOO] B. Agent not known to be an agent. Generally there is a contract with the undisclosed principal. Exceptions. he may limit his liability by special stipulations, e.g. when a charter-party is executed by an agent for an unnamed freighter, and the agent's signature is un- qualified, but the charter-party contains a clause pro- viding that the agent's responsibility shall cease as soon as the cargo is shipped (y). It is also a rule that an agent for a government is not personally a party to a contract made by him on behalf of such government by reason merely of having made the -^ contract in his own name (z). In some cases the agent, though prima facie not a party to the contract as agent, can yet sue or be sued as principal on a contract which he has made as agent. These will be mentioned under another head of this subject (a). Where an undertaking is given in general terms, no promisee being named, to a person who obviously can- not be a principal in the matter, it may be inferred as a fact from the circumstances that some other person interested is the real unnamed principal, and that per- son may recover on the contract (6). B. When a party contracts with an agent whom he does not know to be an agent, the undisclosed princi- pal is generally bound by the contract and entitled to enforce it, as well as the agent with whom the contract is made in the first instance (c). But the limitations of this rule are important. In the first place, it does not apply where an agent for an undisclosed principal contracts in such terms as im- port that he is the real and only principal. There the principal cannot afterwards sue on the contract (d). Much less, of course, could he do so if the nature of the contract itself (for instance, partnership) were incon- sistent with a principal unknown at the time taking the place of the apparent contracting party. Likewise, Q. B. 137; Fleet v. Murton, L. E. 7 Q. B. 126, 129; Hutchinson v. Tatham, L. E. 8 C. P. 482. On the general question of the construction of contracts made by brokers for their principals see Southwell v. Bowditch (C. A.) 1 C. P. D. 374. (y) Oglesby v. Yglesias, E. B. & E. 930, 27 L. J. Q. B. 356; Carr v. Jackson, 7 Ex. 382. (a) Macbeath v. Haldimand, 1 T. R. 172, cp. ib. 674; Gidley v. Lord Palmerston, 3 Bro. & Bing. 275; Story on Agency. \ 302, sqq. (a) Infra, pp. 106, 108. (6) Weidner v. Hoggett, 1 C. P. D. 533. (c) The rule is not excluded by the contract being in writing (not under seal) and signed by the agent in his own name: Beck- ham v. Drake, 9 M. & W. at p. 91. (d) Humble v. Hunter, 12 Q. B. 310, 17 L. J. Q. B. 350. CONTRACTS OF AGENTS. 169 " if the principal represents the agent as principal he is bound by that representation. So if he stands by and allows a third person innocently to treat with the agent as principal he cannot afterwards turn round and sue him in his own name " (e). » -^- Again, in the cases to which the rule does apply, [ "A" 101] the rights of both the undisclosed principal and the Limitations other contracting party are qualified as follows: when it" ° The principal " must take the contract subject to all applies, equities in the same way as if the agent were the sole As to rights principal" (f). Accordingly if the principal sues on of principal, the contract the other party may avail himself of any defence which would have been good against the agent (g): thus a purchaser of goods through a factor may set off a claim against the factor in an action by the factor's principal for the price of the goods (h). " Where a contract is made by an agent for an undis- closed principal, the principal may enforce .performance of it, subject to this qualification, that the person who deals with the agent shall be put in the same position as if he had been dealing with the real principal, and con- sequently he is to have the same right of set off which he would have had against the agent" (i). And his claim to be allowed such set-off is not effectually met by the reply that when he dealt with the agent he had , the means of knowing that he was only an agent. The existence of means of knowledge is not material except as evidence of actual knowledge (fc). It has been said that conversely the right of the As to rights (ej Ferrand v. Bischoffsheim, 4 C. B. N. S. 710, 716, 27 L. J. C. P. 302. (/) Story on Agency, I 420; per Parke, B. Beckham v. Drake, 9 M. & W. at p. 98. (g) If the agent sues in his own name the other party cannot set off a debt due from the principal whom he has in the mean- time discovered, there being no, mutual debt within the statute of set-off; Isberg v. Bowden, 8 Ex. 852. Under the Judicature Acts, however, he can make the principal a party to the action by counter-claim and have the whole matter disposed of. (A) Eabone v. Williams, 7 T. E. 360, n. ; Sims v. Bond, 5 B. & Ad. 393. Per Cur., Isberg v. Bowden. 8 Ex. at p. 859. It does not matter whether the factor is or is not actually authorized by his principal to sell in his own name without disclosing the agency: Ex parte Dixon, 4 Ch. D. 133; nor what restrictions may, as between himself and the principal, be imposed on him as to the price he is to sell at; Stevens?). Biller, C. A., 25 Ch. D. 31. (t) PerWilles. J. Dresser «. Norwood. 14 C. B. N. S. 574, 589, 32 L. J. C. P. 201, 205. The reversal of this case in the Ex. Ch. 17 C. B. N.'S. 466, 34 L. J. C. P. 48, does not affect this state- ment of the general law. (A) Borries v. Imperial Ottoman Bank, L. E. 9 C. P. 38. 170 CAPACITY OF PARTIES. of the other other contracting party to hold the principal liable is Pi"j* y : subject to -fc the qualification that the state of the ac- L T* -^J count between the principal and the agent must not be altered to the prejudice of the principal. But this doc- trine has been disapproved by the Court of Appeal as going too far. The principal is discharged as against the other party by payment to his own agent only it that party has by his conduct led the principal to be- lieve that he has settled with the agent, or, perhaps, if the principal has in good faith paid the agent at a time ■when the other party still gave credit to the agent alone, and would naturally, from some peculiar charac- ter of the business or otherwise, be supposed by the principal to do so (I). Again, the other party may choose to give credit to the agent exclusively after discovering the principal, and in thai case he cannot afterwards hold the princi- pal liable; and statements or conduct of the party which lead the principal to believe that the agent only will be held liable, and on the faith of which the prin- cipal acts, will have the same result (m). 64 And though the party may elect to sue the principal, yet he must make such election within a reasonable time after dis- covering him (w). When it is said that he has a right of election, this means that he may sue either the prin- cipal or the agent, or may commence proceedings against both, but may only <>ae one Of them to judgment; and a judgment obtained against one, though unsatisfied, is a bar to an action against the other. It was decided in Priestly v. Fernie (o) that such is the rule as to prin- cipal and agent in general, and that there is no excep- tion in the case of a shipowner and freighter, which was the case before the Court. [ -^ 103] "jArThe mere commencement of proceedings against the agent or his estate after the principal is discovered, al- (l) Irvine v. Watson (C. A.) 5 Q. B. D. 414, which seems on this point to reduce the authority of Armstrong v. Stokes, L. E. 7 Q. B. 598, to that of a decision on peculiar facts. (m) Story on Agency, \\ 279, 288, 291; Horsfall v. Fauntleroy, 10 B. & C. 755; but the principal is not discharged unless he has actually dealt with the agent on the faith of the other party's conduct so as to changehis position : Wyatt v. Hertford, 3 East, 147. (») Smethurst v. Mitchell, 1 E. & E. 622, 28 L. J. Q. B. 241. (o) 3 H. & C. 977, 983, 34 L. J. Ex. 173; cp. L. E. 6 C. P. 499. 64 If an agent contracts really for himself, but ostensibly for an unnamed principal or a fictitious one, or if he has personally received the benefit of the contract he is liable upon it as his own. Eidenour v. Mayo, 40 Ohio, 9; Carr v. Jackson, 7 Exch. 382. CONTRACTS OP AGENTS. 171 though it may possibly be evidence of an election to charge the agent only, does not amount to an election in point of law ( p). 2. We have now to point out the results which follow 2. Proteased when a man professes to make a contract as agent, but agent not is in truth not an agent, that is, has no responsible prin- hav ,ing cipal. 65 authority. We may put out of consideration all cases in which the professed agent is on the face of the contract per- sonally bound as well as his pretended principal : for his own contract cannot be the less valid because the contract he professed at the same time to make for an- other has no effect. But when the contract is not by its form or otherwise such as would of itself make the professed agent a party to it, there are several distinc- tions to be observed. A. First, let us take the cases where a principal is A. Principal named. The other party prima facie enters into the named, contract on the faith of that principal's credit. But credit cannot be presumed to be given except to a party who is capable of being bound by the contract: hence it is material whether the alleged principal is one who might authorize or ratify the contract, but does not, or is one who could not possibly do so. a. The more frequent case is where the party named a. Who as principal is one who might be responsible. might be It is now settled law that, subject to the qualifications res P onsible - which will appear, the pretended agent has not in that case either -the rights or the liabilities of a principal on the contract. -fa First, as to his rights. In Bickerton v. Burrell (q) [ ^ 104] the plaintiff had signed a memorandum of purchase at Professed an auction as agent for a named principal. Afterwards a g ent can- he sued in his own name to recover the deposit then ^ contract paid -from the auctioneer, and offered evidence that he was really a principal in the transaction. But he was • non-suited at the trial, and this was upheld by the full Court. It was laid down (per Lord Ellenborough, C. J., Bayley, Abbott, and Holroyd, JJ., concurring) that "where a man assigns himself as agent to a person (p) Curtis v. Williamson, L. E. 10 Q. B. 57. ~~ (q) 5 M. & S. 383. 65 Bank of Hamburg v. Wray, 4 Strobh. (S. C.) 87; Savage v. Eix, 9 N. H. 263; Byars v. Doores, 20 Mo. 284. 172 CAPACITY OF PARTIES. Contra in equity. Fellowes v Lord Gwydyr: sed qu. [•105] named, the law will not allow him to shift his position, declaring himself principal and the other a creature of straw. ... A man who has dealt with another as agent (r) is not at liberty to retract that character with- out notice and to turn round and sue in the character of principal. The plaintiff misled the defendant and was bound to undeceive him before bringing an action." This leaves it doubtful what would have been the pre- cise effect of the plaintiff giving notice of his real posi- tion before suing : but the modern cases seem to show that it would only have put the defendant to his elec- tion to treat the contract as a subsisting contract be- tween himself and the plaintiff or to repudiate it at once. Before we. come to these it must be mentioned that there is a reported case in equity which appears to be directly opposed to Bickerton v. Burrell. This is Fellowes v. Lord Gwydyr (s). The facts were shortly these. Lord Gwydyr was entitled as Deputy Great Chamberlain to the decorations used in Westminster Hall at the coronation of George IV. He sold these to the plaintiff Fellowes, who re-sold them to the defend- ant Page at an advanced price, but professed to be sell- ing as the agent of Lord Gwydyr, and signed the agree- ment for sale in that character. Fellowes, being una- ble to procure Lord Gwydyr's consent to his name being used in an action, sued Page in his own -^ name in equity for a balance due on the agreement. It was ar- gued for the defendant that lie had been misled "as to a most important ingredient in the contract, as to the person, namely, with whom he had really contracted " (t). And moreover it is difficult, for other reasons men- tioned in the argument (t), to see what equity the plain- tiff had except on some notion that there must always be a remedy in equity when there appears to be none at law. However it was held by Sir John Leach, V.-C, and by Lord Lyndhurst on appeal, that Page could not resist the performance of the contract without showing that he had been actually prejudiced by having it con- cealed from him that Fellowes was the real principal. It is submitted that this decision is contrary to the prin- ciples laid down in Bickerton v. Burrell and the other cases to be presently cited ; that there is no intelligible reason for any distinction between common law and equity on a question of contract or no contract ; and (r) I.e. for a named and responsible principal. («) 1 Sim. 63, 1 Rus. & M. 83. (t) 1 Euss. & M. at pp. 85, 88. CONTRACTS OP AGENTS. 173 that consequently Fellowes v. Lord Chuydyr is not law (u). The doctrine under consideration was further defined Rayner v. in Rayner v. Orote (x). There the plaintiff sued to Grote.' recover a balance due npon the sale by him to the de- fendants of a quantity of soda ash according to a bought note in this form: — ''I have this day bought from you the following goods from J. & T. Johnson — 50 tons soda ash. . . . J. H. Rayner." It was proved that the plaintiff was the real owner of the goods, and 13 tons out of the 50 had been delivered to the defend- ants and accepted by them at a time when there was strong evidence to show that they knew the plaintiff to be the real principal. The law was stated as fol- lows (y): — -jfc- " In many such cases [viz. where the contract is wholly un- [ "^ 106] performed] such as for instance the case of contracts . in which the skill or solvency of the person who is named as the principal may reasonably be considered as a material ingredient in the . contract, it is clear that the agent cannot then show himself to be the real principal and sue in his own name; and perhaps it maybe fairly urged that this, in all executory contracts, if wholly unperformed, or if partly performed, without the knowledge of who is the real principal, may be the general rule." But here part performance had been accepted by the defendants with full knowledge that the plaintiff was the real principal, and it was therefore considered that the plaintiff was entitled to recover. Next, as to the pretended agent's liability. It was at Nor can the one time thought that an agent for a named principal professed who turned out to have no authority might be sued as a S ent be a principal on the contract (z). But it has been deter- con tract. mined that he is not liable on the contract itself (a). Implied He is liable however on an implied warranty of his au- warranty of thority to bind his principal. This was decided in autnoritv - Collen v. Wright (b), and has been followed in several (u) It may be that the decision was right on the facts, on the ground that Page continued to act under the contract after know- ing the true state of things (as was said in argument for the plaintiff, 1 Russ. & M. 83), which would bring the case within Eayner v. Grote, 15 M. & W. 359; but this is not mentioned in the judgments. (a;) 15 M. & W. 359. (y) Per Cur. at p. 365; and see the remarks on Bickertbn v. Burrell, ad fin. (z) Cp. Pothier, Obi. . at p. 313. (d) See note (b). (e) Ex parte Swansea Friendly Society, 11 Ch. D. 768. (/) It is unnecessary to enter at large upon the cases on this head, of which there are a great, number: among the latest are Bayley v. Manchester, &c, Ry. Co., L. R. 7 C. P. 415, 8 C. P. 148; Moore v. Metrop. Ry. Co., L. E. 8 Q. B. 36; Bolingbroke v. Swindon Local Board, L. E. 9 C. P. 575; Edwards v. Midland Ey. Co., 6 Q. B. D. 287, where an action for malicious prosecu- tion was held to lie. (g) Barwick v. Eng. Joint Stock Bank, L. E. 2 Ex. 259; not- withstanding dicta to the contrary in Western Bank of Scotland v. Addie, L. R. 1 Sc. & D. 145, see the later cases of Mackay v. Commercial Bank of New Brunswick, L. R. 5 P, C. 394. Savig- 182 CAPACITY OP PAKTIES. principle is extended to make it generally subject to all liabilities incidental to its corporate existence and acts, though the remedy may be in form ex delicto or even Indictable criminal. Although it cannot commit a real crime, " it in some may be guilty as a body corporate of commanding acts cases. fa b e (j 0Qe to the nuisance of the community at large," and may be indicted for a nuisance produced by the ex- ecution of its works or conduct of its business in an improper or unauthorized manner, as for obstructing a highway or navigable river (h). A corporation may even be liable by prescription, or by having accepted such an obligation in its charter, to repair highways, &c, and may be indictable for not doing it (i). A cor- [ -^tll6] poration carrying -^-on business may likewise become liable to penalties imposed by any statute regulating that business, if it appears from the language or sub- ject-matter of the statute that corporations were meant to be included, but not otherwise (fc). 71 A steamship company has been held (on the terms of the particular statute, as it seems) to be not indictable under the For- eign Enlistment Act of Geo. 3, and therefore not enti- tled to refuse discovery which in the case of a natural person would have exposed him to penalties under the Act (I). As to the difficulty of imputing fraudulent intention to a corporation, which has been thought to be peculiarly great, it may be remarked that no one has ever doubted that a corporation may be relieved against fraud to the same extent as a natural person. There is exactly the same difficulty in supposing a corpora- tion to be deceived as in supposing it to deceive, and it is equally necessary for the purpose of doing justice in ny's statement that a corporation cannot commit a " true delict " (3. 317) is so qualified as perhaps not to be inconsistent with the English doctrine: however such questions that have arisen in recent times on the dealings of commercial corporations were ob- vianslv not present to his mind. (h) Reg. v. G. N. of Eng. Ry. Co., 9 Q. B. 315; per Cur. p. 326. (i) See Grant on Corporations, 277, 283; Angell & Ames on Corporations, U 394-7; Wms. Saund. 1. 614, 2. 473. (k) Pharmaceutical Society v. London and Provincial Supply Association, 5 App. Ca. 857; see per Lord Blackburn at p. 869. A corporation cannot sue as a common informer without special statutory authoritv: Guardians of St. Leonard's, Shoreditch v. Franklin, 3 C. P. D. 377. (1) King of Two Sicilies v. Wilcox, 1 Sim. N. S. 335. 71 A corporation may be guilty of fraud in its contract and is subject to the same consequences as an individual. Craige v. Hadley, 99 N. Y. 131; Hedges v. Paquett, 3 Oregon, 77; R. R. Co. v. Id., 50 N. H. 50; Union Pacific R. R. v. Credit Mobilier, 135 Mass. 367. CORPORATIONS. 183 both cases to impute to the corporation a certain men- tal condition — of intention to produce a belief in the ■ one case, of belief produced in the other — which in fact can exist only in the individual mind of the person who is its agent in the transaction (m). Lord Lang- dale found no difficulty in speaking of two railway companies as " guilty of fraud and collusion," though not in an exact sense (w). However the members of a But cannot corporation cannot even by giving an express author- be bound by ity in the name of the corporation make it responsi- a ' ;ts . of even ble, or escape from being individually responsible Members themselves, for a wrongful act (as trespass in removing when of a •fa an obstruction of an alleged highway) which though [ -j^- 117] not a personal wrong is of a class wholly beyond the non-coi- competence of the corporation, so that if lawful it could porate not have been a corporate act (o). Likewise it is not c arac er ' competent to the ■ governing body or the majority, 72 or even to the whole of the members for the time being, of a corporation constituted by a formal act and having defined purposes, to appropriate any part of the corpor- ate funds to their private use in a manner not distinctly warranted by the constitution; for it is not to be sup- posed that all the members of the corporation are equiv- alent to the corporation so that they can do as they please with corporate property. Lord Langdale held on this principal that the original members of society incorporated by charter, who had bought up the shares of the society by agreement among themselves, were bound to account to the society for the full value of them (p). The fallacy of the opposite assumption (m) See per Lord Blackburn, 3 App. Ca. 1264. The difficulty and the solution are both given by Ulpian, D. 4. 3. de dolo malo. 15 $ 1. Sed an in municipes de dolo detur actio, dubitatur. Et puto ex suo quidem dolo non posse dari; quid enim municipes dolo facere possunt ? Sed si quid ad eos pervenit ex dolo eorum qui res eorum administrant, puto dandam. A company may "feel aggrieved," Companies Act, 1880, 43 Vict. c. 19, s. 7, sub- s. 5. (n) 12 Beav. 382. • (o) Mill v. Hawker, L. R. 9 Ex. 309? no judgment on this part of the case in Ex. Ch. L. R. 10 Ex. 92. ( p) Society of Practical Knowledge v. Abbott, 2 Beav. 559, 567. Cp. Sav. Syst. 3. 283, 335. But it may be otherwise if the cor- poration has no definite constitution and no rules prescribing the application of its property. Such cases are sometimes met with : Brown v. Dale. 9 Ch. D. 78. 72 A corporation may contract by resolution, (American Bank v. Baker, 4 Met. 164; St. Louis Bank v. Grand Lodge, 98 U. S. 123), by an agent, (Cincinnati R. R. v. Clarkson, 7 Ind. 595; McCollough v. Ins. Co., 46 Ala. 376), or by duly authorized officers, (Dubuque College v. Dubuque, 13 Iowa, 555). 184 CAPACITY OF PARTIES. * (that a corporation has no rights as against its unani- mous members) is easily exposed by putting the extreme case of the members of a corporation being by accident reduced till there is only one left, who thereupon unani- mously appropriates the whole corporate property to his own use (q). [ -^ 118] -fc It is further to be observed that such cases as those last mentioned have but a slight and perhaps a mislead- ing likeness to those where we have to determine the rights of strangers against the corporation arising out of contract or dispositions of property. In Society of Practical Knowledge v. Abbott (r) the principle is that, quite apart from the nature of its particular objects, a corporation does not exist for the sake of the persons who are the members at any one time, as is also shown by the rule of common law that they have no power of their own mere will to dissolve it. No corporate prop- erty can be treated as the property of the members, or divisible among them, unless there appears from the nature and constitution of the corporation an intention that it shall be so treated. 73 In Mill v. Hawker (s), again, the removal of an obstructioU to a highway is a thing which by its nature cannot be a corporate act at common law. The common law right is founded on the use of the highway by the person removing the obstruc- tion, but a corporation cannot use a highway. No doubt a corporation might have a statutory power or be under a statutory duty to remove obstructions, and the (q) Writers on the civil law have laid down the powers of ma- jorities in corporate affairs with an extraordinary latitude, as- signing unlimited authority to the majority of a properly con- vened meeting in most cases, and to the whole body of existing • members in any case. But Savigny has shown this to be not only false in principle but unwarranted by the Roman law, the authorities relied on being in truth special provisions for the gov- ernment of municipal corporations which were never intended to be of unlimited application: Sav. Syst. 3. 329 sqq. \\ 97-99. The illustration in our text is given at p. 350, note, with the remark, " Hier ist gewiss Einstimmigkeit vorhanden." Savigny's expo- sition is interesting for the clearness with which he enforces the' fundamental p-oposition that a corporation is not identical with the sum of its-existing members, but otherwise it throws little if any light on the problems arising from the modern develop- ment and multiplication of corporate bodies in the English and allied systems of law. (r) 2 Beav. 559. (s) L. E. 9 Ex. 309, see at p. 318. 73 A corporation may, within its sphere, take and convey real estate and property but not outside of its general power and purposes. Lynch v. Hartwell, 8 Johns. 422: OccomCo. v. Sprague Mfg. Co., 34 Conn. 529; Sutton v. Cole, 3 Pickr 232. CORPORATIONS. 185 • true question in the case was whether any such power or duty had been conferred on highway boards. The majority of the court held that it had not. But if such had been the case, the right so conferred would still have been wholly distinct from the right of a natural • person at common law to remove things which obstruct his lawful use of a highway (t). We now come to consider the far more difficult and As limited complicated question of special restrictions. The im- by positive portance of this subject is quite modern; it arose from J?.""/. ^ on " the general establishment of railway companies and theories of others of -j( a like nature incorporated by special Acts r jl ;Qcn of Parliament, and has been continued and increased corporate by the multiplication of joint stock companies, building powers, societies, and other bodies which are incorporated or made " quasi-corporations " under general Acts. On this there have been many decisions, much discussion, and some real conflict of judicial opinions. There are two opposite views by which the consideration of the matter may be governed, and they may be expressed thus: 1. A corporation is an artificial creature nf the law, and has no existence except for the purposes for which it was created. 74 No Act exceeding the limits of those purposes can be the act of the corporation, and no one can be authorized to bind the corporation to such an act. 75 In each particular case, therefore, the question is: Was the corporation empowered to bind itself to this transaction ? 2. A corporation once duly constituted has all such powers and capacities of a natural person as in the nature of things can be exercised by an artificial person. Transactions entered into with apparent authority in the name of the corporation are presumably valid and binding and are invalid only if it can be shown that the Legislature has expressly or by necessary implica- tion deprived the corporation of the power it naturally would have had of entering into them. The question 1 . (t) On the nature of corporate action in general cp. Hobbes, Behemoth, part 4, ad init. (6. 359, ed. Molesvrorth), and Levia- than, pt. 1. c. 16; and on its artificial character, Maine, Early History of Institutions, 352. 74 Richmond E. E. v. Eichmond, 26 Grat. 83. 75 Mathews v. Skinner, 62 Mo. 329; McMasters v. Reed, 1 Grant (Pa.), 36; Head v. Ins. Co., 2 Cranch, 127; Beaty v. Knowler, 4 Peters, 152. 186 CAPACITY OP PARTIES. is therefore: "Was the corporation forbidden to bind itself to this transaction f m As Lord Justice Lindley puts it (u), the difference is " as to whether the act of incorporation is to be re- garded as conferring unlimited powers except where the contrary can be shown; or whether alleged corporate powers are not rather to be denied unless they can be shown to have been conferred either expressly or by necessary implication." " As we shall often have to refer to these views, we may call (1) the doctrine of special capacities, and (2) the doctrine of general capacity. [ -^ 120] -Jc There is much to be said on principle for the the- "Special ory of special capacities. Most if not all corporations capacities." are established for tolerably well-defined purposes, which persons dealing with them can ascertain with- out difficulty. They are certainly not intended to do anything substantially beyond those purposes, and a reasonable and liberal construction of their powers may be trusted to prevent the application of the doctrine from causing any real hardship (x). This theory was the prevalent one in the earlier period of the discus- sion. For a while the common law courts took it with- out question from the courts of equity, where for par- ticular reasons to be mentioned afterwards it appeared in a somewhat more positive, form and was maintained for a longer time (y). It also seems to have been taken for granted by those who framed the modern statutes defining the powers of incorporated companies (z) ; whieh, if , the opposite view be correct, are redundant in permission and defective in prohibition. "General ^he theory of general capacity, on the other hand, capacity." may well be supported on principle as tending to call the attention of the Legislature more distinctly to the Nor- 1. 251. (x) See judgment of Coleridge, J., Mayor of Norwich folk Ry. Co., 4E.&B. 397; 24 L. J. Q. B. 105, 119. ' (f/) Accordingly it was till quite lately adopted by the best text-writers. Kent Comm. 2. 298-9, even treated it as an obvi- ous doctrine: (in the latter editions, however, this is much qual- ified by the note at p. 278). The Supreme Court of the TJ. S. cer- tainly seems to have so held, at all events as to corporations created by statute; Bank of Augustas. Earle, 13 Peters, 519, 587. (z) See L. E. 9 Ex. 266. 76 A contract not within the sphere of a corporation as defined by its charter is termed ultra vires. New Haven Co. v. Hayden, 107 Mass. 71; Webster v. Buffalo Ins. Co., 2 McCrary, 348. 77 See note number 70. CORPORATIONS. 187 limits it may be proposed to assign to corporate powers, and ultimately to promote general convenience by mak- ing those limits more certain. It is also favoured by the general analogies of the law. There is a fallacy latent in the phrase of the other theory. When we speak of an artificial person as a creature of the law, we mean its legal existence, not its particular rights and capacities. If legal existence as -^-a subject of E "A - 121] rights and duties is once admitted by a fiction, why not admit its ordinary incidents so far as they are physi- cally possible? All rights are in one sense creatures of the law, and it is in a special sense by creation of the law that Artificial persons exist at all; but when you have got your artificial person; why call in a second special creation to account for its rights ? This last view seems on the whole to have in its Powers of . favour a preponderance of modern authority. It is sub- statutory ject however to- an important qualification, finally es- jjj^gjj ™ s tablished by the leading case, to be more particularly purposes of spoken of afterwards, of Ashbury Railway Carriage Co. incorpora- v. Riche (a) ; namely, " that where there is an Act of tlorl - Parliament creating a corporation for a particular pur- pose, and giving it powers for that particular purpose, what it does not expressly or impliedly authorize is to be taken as prohibited" (a). This makes the conflict between the two theories much less sensible in practice than might at first sight be expected. The considera- tions on which the qualification rests are in themselves foreign to the law of corporations as such, but they are constantly present in the modern cases and are often decisive. These considerations are derived (1) from the law of Reasons for partnership : (2J from principles of public policy. the limita- 1. In trading corporations the relation of the mem- derlved bers or shareholders to one another is in fact a modi- 1 ' ^ ron \- fied (6) contract of partnership, which in the view j aw of courts of equity is governed by the ordinary rules of partnership law so far as they are not excluded by the constitution of the company. Now it is a well-settled principle of partnership law Rights of that no majority of the partners can bind a dissenting denting minority, ■£ or even one dissenting partner, to engage ? i j22l (a) L. R. 7 H. L. 653; Lord Blackburn in A. G. v. G. E. Ry Co., 5 App. Ca., at p. 481; cp. Reg. v. Reed, 5 Q. B. D.,at p. 488- (6) Namely by provisions for transfer of shares, limited liabil- ity of shareholders, and other things which cannot (at least with convenience or completeness) be made incident to a partnership at common law. 188 CAPACITY OE PARTIES. Doctrine as to limited agency. In public companies limits of directors' authority presumed to be known. [*128] the firm in transactions beyond its original scope (c). In the case, therefore, of a corporation whose members are as between themselves partners in the business car- ried on by the corporation, any dissenting member is entitled to restrain the governing body or the majority of the company from attempting to involve the company in an undertaking which does not come within its pur- poses as defined by its original constitution. 78 Courts of equity have been naturally called upon to look .at the subject chiefly from this point of view, that is, asgiviDg rise to questions between shareholders and directors, or between minorities and majorities. Such questions do not require the court to decide whether an act which dissentients may prevent the agents of the company from doing in its name might not nevertheless, if so done by them with apparent authority, be binding on the corporate bqdy, or a contract so made be enforce- able by the other party who had contracted in good faith. This distinction, clear and important as it is, has not always been kept in sight. Bat further, according to the law of partnership a partner can bind the firm only as it agent : his authority is prima facie an extensive one (d), but if it is specially restricted by agreement between the partners, and the restriction is known to the person dealing with him, he cannot bind the firm to anything beyond those special limits (e). Limits of this kind may be imposed on the director or other offi- cers of a company by its constitution ; and if that con- stitution is embodied in a special Act of Parliament, or in a deed of settlement or articles of association regis- tered in a public office under the provisions of -a general Act, it is considered that all persons dealing with the agents of the corporation must be deemed to have notice of the limits thus publicly set to their authority. The -^■corporation is accordingly not bound by anything done by them in its name when the transaction is on the face of it in excess of the powers thus defined (f). n (c) Lindley, 1. 600 sqq. (d) Lindley, 1. 236; per James, L. J. Baird's ca. 5 Ch. 733: Story on Agency, H 124, 125, adopted by the Judicial Commit- tee in Bank of Australasia v. Breillat, 6 Moo. P. C. 152, 195. (e) Lindley, 1. 327 sqq. (/) Lindley, 1. 252. 78 Such a contract is void being ultra vires. Dana v. Bank of St. Paul, 4 Minn. 385; Davis v. Old Colony E. E., 131 Mass. 258; Susquehanna Canal v. Bonham, 9 \V. & S. 27. 79 A corporation may appoint an agent and provide for his com- pensation. Turnpike Road v. Myers, 6 S. & E. 12; Cincinnati etc. E. E. v. Clarkeson, 7 Ind. 595. CORPORATIONS. 189 And it is important to remember that in this view the resolutions of meetings however numerous, and passed by however great a majority, have of themselves no more power than the proceedings of individual agents to bind the partnership against the will of any single member to transactions of a kind to which he did not by the contract of partnership agree that it might be bound. Irregularities in the conduct of the internal affairs of the body corporate, even the omission of things which as between shareholders and directors are conditions precedent to the exercise of the directors' authority, will not however invalidate acts which on the face of them are regular and authorized: third parties dealing • in good faith are entitled to assume that internal regu- lations (the observance of which it may be difficult or impossible for them to verify) have in fact been com- plied with (g). These applications of partnership law materially cut down the results of the common law theory of general capacity so far as regards its application to almost all incorporated companies of modern origin. But it is to be observed that in the ordinary law of Assent of all partnership there is nothing to prevent the members of tn . e members a firm, if they are all so minded, from extending or ^ remove . ■, i ■ -,i i t ., -i ,1 ■ . objections changing its business without limit by their unanimous n this head. agreement. As a matter of pure corporation law, the unanimity of the members is of little importance: it may supply the want of a formal act of the governing body in some cases (h), but it can in no case do more. As a matter of mixed corporation and partnership law this unanimity may be -fa all-important as being a rati- [ "^ 124] fication by all the partners of that which if any one of them dissented would not be the act of the firm: for although the corporate body of which they are mem- bers is in many respects different from* any ordinary partnership, it is treated, and justly treated, as a part- nership for this purpose." It appears, then, that the unanimous assent of the members will remove all ob- jections founded on the principles of partnership, and will so far leave the corporation in full possession of its common law powers. There are nevertheless many (g) Lindley, 1. 253 sqq. (h) Even this is in strictness hardly consistent with the lead- ing principle that if A, B, C. . . . &c, are incorporated to them and their successors by the name of X, then A-T-B+C+ . . . &c. are not = X. 190 CAPACITY OF PARTIES. transactions which even the unanimous will of all the members cannot make binding as corporate acts. For the reasons which determine this we must seek farther. 2. Public policy: cor- porations formed for special purposes. Powers roust ■not be used to defeat purposes of incorpora- tion. [*125] 2. Most corporations established in modern times by special Acts of Parliament have been established ex- pressly for special purposes the fulfilment of which is considered to be for the benefit of the public as well as of the proprietors of the undertaking, and for this reason they are armed with extraordinary powers and privileges. Whatever a corporation may be capable of doing at common law, there is no doubt that unusual powers given by the Legislature for a special purpose mast be employed orly for that purpose: if Parlia- ment empowers either natural persons or a corporation to take J. S.'s lands for a railway, J. S. is not bound to let them take it for a factory or to let them take an excessive quantify of land on purpose to resell it at a profit (i). m If Parliament confers immunity for -^ the obstruction of a navigable river by building a bridge at a specified place that will be no excuse for obstruct- ing it in the like manner elsewhere. Moreover we can- not stop here. It is impossible to say that an incorpor- ation for special objects and with special powers gives a restricted right of using those powers, but leaves the use of ordinary corporate powers without any restric- tion. The possession of extraordinary powers puts the corporation for almost all purposes and in almost all transactions in a wholly different position from that (i) See Galloway v. Mayor of London, L. B. 1. H. L. at p. 43, Lord Carington v. Wycombe By. Co., 3 Ch. 377, 381. Nor may a company hold regattas or let out pleasure-boats to the incon- venience of the former owner on a piece of water acquired by them under their Act for a resovoir; Bostock «..N. Staffordshire Ey. Co., 3 Sm. & G. 283, 292; nor alienate land similarly ac- quired except for purposes authorized by the Act: Mulliner v. Midland Ey. Co., 11 Ch. D. 611, 622. But a statutory corpora- tion acquiring property takes it with all its rights and incidents as against strangers, subject only to the duty of exercising those rights, in good faith with a view to the, objects of incorporation:, Swindon Waterworks Co. v. Wilts and Berks Canal Navigation Co., L. E. 7 H. L. 697, 704, 710; Bonner v. G. W. E. Co., C. A. 24 Ch. D. 1 ; and a corporation cannot bind itself not to use in the future special powers which have presumably been conferred to be used for the public good: Ayr Harbour Trustees v. Oswald, 8 App. Ca, 623. so Private property taken by a corporation in the exercise of the right of eminent domain must be for public use. Se- combe v. Eailroad, 23 Wallace 108; Charles Eiver Bridget. War- ren Bridge, 7 Pick. 344; Cooper v. Williams, 4 Ohio, 253; Jones e. Walker, 2 Paine, 688. CORPORATIONS. 191 which it would have held without thein ; and apart from the actual exercise of them it may do many things which it was otherwise legally competent to do, but which without their existence it could practically never have done. Any substantial departure from the pur- poses contemplated by the Legislature, whether involv- ing on the face of it a misapplication of special pow- ers or not, would defeat the expectations and objects with which those powers were given. When Parliament in the public interest and in consideration of a pre- sumed benefit to the public, confers extraordinary powers, it must be taken in the same interest to forbid the doing of that which will tend to defeat its policy in conferring them ; and to forbid in the sense not only of attaching penal consequences to such acts when done, but of making them wholly void if it is attempted to do them. Accordingly contracts of railway compa- nies and corporations of a like public nature which can be seen to import a substantial contravention of the policy of the incorporating Acts are held by the courts to be void, and are often spoken of as mala prohibita, and illegal in the same sense that a contract of a nat- ural person to do anything contrary to the provisions of an Act of Parliament is illegal (&). 81 Others prefer to say that the -fa Legislature, acting indeed on motives [ "^ 126] of public policy, has simply disabled the corporation from doing acts of this class; "to regard the case as one of incapacity to contract rather than of illegali- ty, and the corporation as if it were non-existent for the purpose of such contracts" (I). The difference, however, is but a verbal one, and both modes of expression have their convenience. The former seems appropriate in such a case as that where it was decided that the agreement of a third person to (k) Blackburn J. in Taylor p. Chichester & Midhurst Ry. Co., L. R. 2 Ex. 379; and (Brett and Grove, JJ. concurring) in Riche v. Ashbury Ry. Carriage Co., L. R. 9 Ex. 262, 266; LordHather- ley, s. c. nom. Ashbury Ry. Carriage Co. v. Riche, L. R. 7 H. L. at p. 639. (1) Archibald, J. (Keating and Quainn, JJ., concurring), L. R. 9 Ex. 293; Lord Cairns, L. R. 7 H. L. at p. 672; Lord Selborne, ib. 694. And Bramwell, L. J., rather strongly disapproves of calling such acts illegal, pointing out that if they were properly so called there would have been some means of restraining them in a court of common law at the instance of the crown: A. G. v. G. E. Ry. Co., 11 Ch. D. at pp. 501—3. 81 Williams v. Davidson, 43 Texas 1; Central R. R. v. Collins, 40 Ga. 582: Miners Ditch Co. v. Zellerback, 37 Cal. 543; Brook- lyn Gravel Road v. Slaughter, 33 Ind. 185; Johnson v. Louis- ville, 11 Bush. 527; Morville v. Tract Society, 123 Mass. 129. 192 CAPACITY OF PARTIES. procure a company to do something foreign to its pro- per purposes is illegal and void (m). Interest of the public as investors. Buyers of shares in market and persons giving credit to the com- pany have a [*127] right to assume that the company's professed objects are adhered to. There is another consideration of a somewhat similar kind which applies equally to what may be called pub- lic companies in a special sense — i. e., such as are in- vested with special powers for carrying out defined ob- jects of public interest — and ordinary joint-stock com- panies which have no such powers. The provisions for limited liability, and for the easy transfer of shares in both sorts of companies must be considered, in their modern form and extent at least, as a statutory privi- lege. These provisions also invest the companies with a certain public character and interest quite apart from the nature of their particular objects in each case, but derived from the fact that they do professedly exist for particular objects. By far the greater part of their capital represents the money of shareholders who have bought shares in the market without any intention of taking an active part in the management of the concern, but on the faith that they know in what sort of adven- ture they are investing their money, and that the •fa company's funds are not being and will not be ap- plied to other objects than those set f jrth in its consti- tution as declared by the Act of incorporation, memo- randum of association, or the like. This is not a mere repetition of the objections grounded on partnership law; the incoming shareholder may protect himself for the future, but the mischief may be done or doing at the time of the purchase: and besides it may fairly be said that persons other than shareholders deal -with the company on the faith of its adhering to its defined ob- jects. They are entitled to " know that they are deal- ing with persons who can only devote their means to a given class of objects, and who are prohibited from de- voting their means to' any other purpose" (n). The assent of all those who are shareholders at a given time will of course bind them individually, but leaves this difficulty untouched (o). If I buy shares in a company which professes to make railway plant in England I have a right to assume that its funds are not pledged to pay for making a railway in Spain or Belgium, and it is the same if dealing with it as a stranger I lend money (m) McGregor v. Dover & Deal Ry. Co., 18 Q. B. 618, 22 L. J. Q. B. 69. See per Erie, J., in Mayor of Norwich v. Norfolk Ey. Co., 4 E. & B. 397, 24 L. J. Q. B. 105. («) Lord Hatherley, L.R7EL. at p. 684. (o) See L. E. 9 Ex. 270, 291. CORPORATIONS. 193 or otherwise give credit to it. Accordingly the provi- sions of the Companies Act, 1862, are to be considered as having been enacted in the interests of " in the first place, those who might become shareholders in succes- sion to the persons who were shareholders for the time being; and secondly, the outside public, and more par- ticularly those who might be creditors of companies of this kind" (p). The House of Lords has unanimously decided (after an equal division of opinion in the Court of Exchequer Chamber) that by the general scheme and on the true construction of the Act a company regis- tered under it is forbidden to enter, even with the unani- mous assent of the shareholders for the time being, into a contract foreign to its objects as defined in the memo- randum of association (q ). ■Jc The reader is referred to the Appendix (r) for a [ •£ 128] selection of authorities showing how the doctrine of corporate powers here given in outline has gradually been work out. 82 It is not proposed to enter on any further discussion inability of of the particular contracts which particular corporate corporations bodies have been held incapable of making. One class to make of contracts, however, is in a somewhat peculiar posi- jJ^jJtrumentB. tion in this respect, and requires a little separate con- sideration. We mean the contracts expressed in nego- tiable instruments and governed by the law merchant. It is said and truly said that as a general rule a cor- poration .cannot bind itself by a negotiable instru- ment (s). The origin and meaning of the rule are easily misapprehended. At first sight it looks like an obvious deduction from the doctrine of limited special capacities. If a corporation can only make such con- tracts as it is empowered to make, then it follows of course that among other things it cannot. issue bills or notes without express or implied authority to do so; but ( p) Lord Cairns, L. E. 7 H. L. at p. 667. [q ) Ashbury By. Carriage & Iron Co. v. Eiche, L. E. 7 H. L. 653; in Ex. and Ex. Ch. L. E. 9 Ex. 224, 249. (r) Note D. (s) A different rule prevails in the United States, where it is held that a corporation not expressly prohibited from so doing may give negotiable promissory notes for any of the legitimate purposes oi its incorporation; Moss v. Averill, 10 N. Y. 449, and other authorities cited by Mr. Wald, in his note here in Ameri- can edition. - 82 As to implied pdwer of a corporation, see Bennington Iron Co. v. Euthford, 3 Harrison, 467; Abbott v. Steam Packet, 1 Md. Ch. 542; Eeynolds v. Stark, 5 Ohio, 204. 13 PRINCIPLES OF CONTRACT. 194 CAPACITY OF PARTIES. The difficulty is partly formal. [*129] Partly in the non-applica- bility of the ordinary , rules of partnership agency. we have seen that this ground is now hardly tenable. In order to state what we believe to be the true view we must to some extent anticipate the subject of the following chapter, so far as it relates to the form of corporate contracts. The general rule is that the con- tracts of a corporation must be made under its common seal, 83 and it follows that a corporation cannot prima facie be bound by negotiable instruments in the or- dinary form. The only early authority which is really much to the point was argued and partly decided on this footing (t). Of late -^ years incorporated com- panies have issued documents under seal purporting to be negotiable; but by the law merchant an instrument under seal cannot be negotiable, and it is the better opinion that the fact of the seal being a corporate one makes no difference ; it cannot be taken as merely equiva- lent to signature because the party sealing is an arti- ficial person and unable to sign (u). Putting this last question aside, however, there are very many matters about which a corporation can contract without seal, and in particular in the case of a trading corporation all things naturally incident to the business it carries on. "Why should not the agents who are authorized to con- tract on behalf of the company in the ordinary course of its business be competent to bind the company by their acceptance or indorsement on its behalf, just as a member of an ordinary trading partnership can bind the firm ? There is a two-fold answer to this question. First, the extensive implied authority of an ordinary partner to bind his fellows cannot be applied to the case of a numerous association, whether incorporated or not, whose members are personally unknown to each other, and it has been often decided that the managers of such associations cannot bind the individual members or the corporate body, as the case may be, by giving negotiable (t) Broughton v. Manchester Waterworks Co., 3 B. & Aid. 1. The chief point was on the statutes giving the Bank of England exclusive rights of issuing notes, &c, within certain limits, as to which see Lindley, 1. 185, note. In Murray v. E. India Co., 5 B. & Aid. 204, the statutory authority to issue bills was not dis- puted; a difficulty was raised as to the. proper remedy, but dis- posed of in the course of argument (p. 210). Other cases atfirst sight like these relate to the authority of particular agents to bind a corporate — or unincorporated — association irrespective of the theory of corporate liabilities. See the next note but one. («) Crouch v. Credit Foncier, L. B. 8 Q. B. 374. 83 Where a parol contract would be valid if made by a' natural person, the corporation may contract by parol. Selnie v.. Muller, 46 Ala. 411; Chesapeake & Ohio Canal a. Knapp, 9 Peters, 541; Bank of Columbia v. Paterson, 7 Cranch. 299. • CORPORATIONS. 195 instruments in the name of the concern, unless the terms of their particular authority enable them to do so by express words or necessary implication (x). In the case of a corporation this authority must be sought ~fcin its constitution as set forth in its special Act, arti- [ *k 130] cles of association, or the like. Secondly, th© power of And partly in even a trading corporation to contract without seal is the peculiar limited to things incidental to the usual conduct of its character of business. But as was pointed out by a judge who was f exchange certainly not disposed to take a narrow view of cor- ' * porate powers, a negotiable instrument is not merely evidence of a contract, but creates a new contract and a distinct cause of action, and "it would be altogether contrary to the principles of the law which regulates such instruments that they should be valid or not ac- cording as the consideration between the original par- ties was good or bad;" and it would be most inconve- nient if one had in the case of a corporation to inquire "whether the consideration in respect of which the acceptance is given is sufficiently connected with the purposes for which the acceptors are incorporated (y). The result seems to be that a corporation cannot be bound by negotiable instruments except in one of the following cases : — 1. When the negotiation of bills and notes is itself one of the purposes for which the corporation exists — " within the very scope and object of their incorpora- tion " (z) — as with the Bank of England and the East India Company, and (it is presumed) financial com- panies generally, and perhaps even all companies whose business wholly or chiefly consists in buying and sell- ing (z). 2. When the instrument is accepted or made by an agent for the corporation whom its constitution em- (x) As to unincorporated joint stock companies; Neale v. Tur- ton, 4 Bing. 149; Dickinson p. Valpy, 10 B. & C. 128; Bramah v. Roberts, 3 Bing. N. C. 963; Bult v. Morrel, 12 A. & E. 745; Brown v. Byers, 16 M. & "W. 252. Asto incorporated companies; Steele v. Harmer, 14 M. & W. 831 (in Ex. Ch. 4 Ex. 1, not on this point), Thompson v. Universal Salvage Co., 1 Ex. 694; Be Peruvian Eys. Co., 2 Ch. 617; cp. Ex parte City Bank, 3 Ch. 758, per Selwyn, L. J. The two last cases go rather far in the direc- tion of implying such a power from general words. (y) Per Erie, C.J., Bateman v. Mid Wales Ey. Co., L. E. 1 C. P. 499, 509. Eailway companies are expressly forbidden to issue negotiable orassignable instruments without statutory authority, on pain of forfeiting the nominal amount of the security; 7 & 8 Vict. c. 85, s. 19. (a) Per Montague Smith, J., L. E. 1 C. P. 512; Ex parte City Bank, 3 Ch. 758. 196 CAPACITY OF PARTIES. [*131] American decisions. Estoppel and part performance apply to cor- porations. - powers to accept bills, &c, on its behalf either by express words or by- necessary implication. The extent of these exceptions cannot be said to be very precisely defined, and in framing articles of asso- ciation, &c, *fc it is therefore desirable to insert express and elearvpro visions on this head. 84 In the United States the Supreme Court has decided that local authorities having the usual powers of ad- ministration and local taxation have not any implied power to issue negotiable securities which will be in- disputable in the hands of a bond fide holder for value (a), and has been equally divided on the question whether municipal corporations have such power (6). It seems, lowever, that in American Coiirts a power to borrow money is held to carry with it as an incident the power of issuing negotiable securities (c). TUb common law doctrine of estoppel (d), ai and the kindred equitable doctrine of part performance (e) ap- ply to corporations as well as to natural persons. Even when the corporate seal has been improperly affixed to a document by a person who has the custody of the seal for other purposes, the corporation may be bound by conduct on the part of its governing body which amounts to an estoppel or ratification, but it will not be bound by anything less (/). The principles applied in such cases are in truth independent of contract, and therefore no difficulty arises from the want of a contract under the corporate seal, or non-compliance with statu- (o) Police Jury v. Britton, 15 Wallace, 566, 572. h) The Mayor v. Ray, 19 Wallace, 466. (c) Police Jury v. Britton, 15 Wallace, 566, and Mr. Wald's note here in American ed. (d) Webb .a. Heme Bay Commissioners, L. E. 5 Q. B. 642. (e) Wilson v. West Hartlepool Ey. Co. 2 D. J. S. 475, 493, per Turner, L. J. ; Crook v. Corporation of Seaford, 6 Ch, 551 ; Mel- bourne Banking Corporation v. Brougham, 4 App. Ca. at p 169. This must be confined, however, to cases -where the corporation is " capable of being bound by the written contract of its direc- tors as an individual is capable of being bound by his own con- tract in writing: " per Cotton, L. J., Hunt v. Wimbledon Local Board, 4 C. P. D. at p. 62. (/) Bank of Ireland v. Evans' Charities, 5 H. L. C. 389. 84 Corporations acting within their sphere, not otherwise, may . issue and receive negotiable paper. Goodrich v. Reynolds, 31 111. 490; Att'yGen'l v. Ins. Co., 9 Paige, 470; Hardy v. Merri- weather, 14 Ind. 203; Bacon v. Mississippi Ins. Co., 31 Miss. 116. 85 A corporation may be estopped the same as an individual, but a contract which is ultra vires cannot be imposed on it in this way. Bissell v. Spring Valley, 110 U. S. 162; Chambers v. Palkner, 65 Ala, 448; Webster v. Ins. Co., 2 McCreary, 348, CORPORATIONS. 197 tory forms. But it is conceived that no sort of estop- pel, part performance, or ratification can bind a corpor- ation which the legislature has in substance forbidden it to undertake, or made it incapable of undertaking. 86 86 Whitney Arms Co. v. Barlow, 63 N. Y. 62; Morris Commis- sioners v. Hinchman, 31 Kansas, 729; Gillsepie v. Fort Wayne, etc., R. E., 17 Ind. 243; Close v. felenwood Cemetery, 107 U. S. 466; National Trust Co. v. Miller, 6 Stew. Ch. 155. 198 FORM OF CONTRACT. [*132] Contrast of ancient and modern con- ceptions of contracts as giving rights of action. [*188] Ancient law regards only formal contracts. * CHAPTER III. FORM OF CONTRACT. According to the modern conception of contract, all agreements which satisfy certain conditions of a general kind are valid contracts and may be sued upon, in the absence of any special legislation forbidding particular contracts to be made or denying validity to them unless made with particular forms (a). 1 So thoroughly has this conception established itself in recent times that, having made the presence of a consideration one of the general conditions of a valid contract; 2 we are now ac- customed to bring contracts under seal within the terms of the condition by. saying that where a contract is un- der seal the consideration is presumed. 3 Historically speaking, this is a transparent fiction. The doctrine of Consideration in its present general form is of compar- atively modern origin even if we look to the history of English law aione. The ancient reason why a deed could be. sued upon lay not in a consideration in our present sense of the word being presumed from the solemnity of the transaction, but in the solemnity itself. The forms of sealing and delivery come down to us from a time when the general theory of the law started from a different or even opposite point to our own. The fundamental assumption of ancient law (when ~fc it has got so far as to recognize contract at all) is that the validity of a contract depends, not upon the substance (a) Cp. s. 10 of the Indian Contract Act: "All agreements are contracts [i. e. enforceable by law, s. 2, sub-s. h.~] if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not here- by expressly declared to be void." (Then follows a clause sav- ing all formalities required in particular cases by the law of British India.) 1 Goodwin v. Gilbert, 9 Mass. 510; Doolittle v. Denninny, 31 N. Y. 350; Thompson v. Blanchard, 3 Comstock, 335. 2 Allen v. Bryson, 77 Iowa, 591, Voorhees v. Reed, 17 111. App. 21; Bentley v. Land, 2 Amerman (Pa.), 480. * The seal is said to import a consideration, and to estop the party from denying it. Mack's Appeal, 18 P. F. Smith, 231; The States Gott, 44 Md. 341; Douglass v. Howland, 24 Wendell, 35; Page v. Toufant, 2 Mass. 159. FORMALITY OF ARCHAIC LAW. 199 of the transaction, but upon its fulfilling certain con- ditions of form, and being established by one or other of certain strictly specified modes of proof. When we come to that subject in a later part of this chapter, the reader will find that the law relating to the form of corporate contracts is still going through a process of struggling development not altogether unlike that which took place in earlier times with regard to the contracts of natural persons. Both in the Roman law as presented Informal to us in the Digest and Institutes, and in the English contracts law of the thirteenth, and even down to the latter part ac ti° naWe of the fifteenth century, this primitive doctrine that ceptioii^in formal contracts alone give rise to actions is at the base Roman and of the whole learning of contracts. Considerable classes old English . of informal contracts' are excepted on various grounds * aw - which are practically reducible to "convenience amount- ing almost to necessity" (a phrase which we here in- troduce by anticipation from the modern learning as to the informal contracts of corporations). But the ex- ceptions are not aB yet connected by any recognized general principle. In the English system, so far as one can now judge, they are decidedly narrower in state- ment and less important in practice than in the Roman. In England we find this theory expressed by Bracton in almost purely Roman language (6), which is sub- stantially repeated in Fleta. How far the theory was directly borrowed, or how far it already existed as a genuine parallel development of English legal ideas with which the authorities of the civil law were found in great measure to coincide, may perhaps be doubt- ful (c). At any rate, the correspondence is so close that some statement of the -fa Roman doctrine in its [ •£■ 134] general effect (d) is almost necessary to make its Eng- lish counterpart intelligible. Formal contracts (legitimae conventiones) gave a The Roman' right of action irrespective of their subject-matter. In doctrine. Justinian's time the only kind of formal contract in use was the Stipulation (e), or verbal contract by question (fi) In Britton the substantial correspondence remains, hut the details are much more modified to suit the real facts of English practice, e. g., the verbal Stipulation all but disappears. • (Cap. De Dette„l. 156, ed. Nicholls.) (c) See G-iiterbock, Henr. de Bracton, I 18, pp. 107-8, where the parallel is accurately stated. (d) Savigny, Obi. 2. 196 sqq. Compare Sir H. Maine's account in his chapter on the Early History of Contracts, which is in close agreement with Savigny's. (e) The Htterarum obligato (Gai. 3. 128) was obsolete. What appears under that title in the Institutes (3. 21) is a general rule 200 FORM OF CONTRACT. Nudum pactum and causa. [*;i85] and answer, the question being put by the creditor and answered by the debtor (as Dari spondes? spondeo: Promittis? promitto: Facies? faciam). The origin and early history of the Stipulation are uncertain. In our authorities it appears as a formal contract capable of being applied to any kind of subject-matter at the pleas- ure of the parties. Its application was in course of time extended by the following steps. 1. The question and answer were not required to be in Latin (/). 2. An exact verbal correspondence between them was not necessary (g). 3. An instrument in writing purporting to be the record of a Stipulation was treated as strong evidence of the Stipulation having actually taken place (h). Informal agreements (pacta) did not give any right of action without the presence of something more than the -^- mere fact of agreement. This something more was called causa. Practically the term covers a some- 'what wider ground than our "consideration executed:" but it has no general notion corresponding to it, at least none co-extensive with the notion of contract; it is sim- ply the mark, whatever that may be in the particular case, which distinguishes any particular class of agree- ments from the common herd of pacta and makes them actionable. Informal agreements not coming within any of the privileged classes were called nuda pacta and could not be sued on (i). The further; application of this metaphor by speak- ing of the causa when it exists as the clothing or ves- ture of the agreement is without classical authority but very common: it is adopted to the full extent by our own early writers (k). The metaphor is in itself natu- of evidence unconnected with the ancient usage. The derivation of the Stipulation from the nexum is tempting, but has been shown, I think, to be untenable. It is abandoned by Ihering (Geist des rom. R. 1. 263, 2. 584), Kuntze (Excurse iiberrom. E., pp. 470, 474, 476), Girtanner (Die Stipulation, &c. Kiel, 1859), and (independently, it seems) by Mr. Hunter (Roman Law, pp. 364-368). , It seems quite possible that the earliest type of con- tract is to be sought in covenants made between independent tribes or families. Cf. Gai. 3. 94 on the use of the word spondeo in treaties. If this were so, one would expect the covenant to be confirmed by an oath, of which Prof. Muirhead (on Gai. 3. 92) finds a trace on other grounds in the form of promittis ? promitto. (f) Gai. 3. 93, I. 3. 15, de v. o. § 1. tg) C. 8. 38. de cont. et comm. stipul. 10. (h) C. 8. 38. de cont. et. comm. stipul. 14, I. 3. 19. de inut. stipul. § 12. (i) They gave rise however to imperfect or "natural " obliga- tions which had other legal effects. (A) ' ' Obligatio quatuor species habet quibus contrahitur et FORMAL AND INFORMAL CONTRACTS IN ROMAN LAW. 201 1 * ral enough, and not confined to legal usage : in Sir H Holland's posthumous essays we read of " a naked in- ference now clothed with a positive cause " by the dis- coveries of spectrum analysis. The term nudum pactum is sometimes used, however, with a special and rather different meaning, to express the rule of the civil law that a contract without deliv ery will not pass property (I). The privileged informal contracts were the following: What in- 1. Real contracts, where the causa consisted in the de- formal con- livery of money or goods: namely, mutui datio, commo- * racts en- datum, depositum, pignus, corresponding to our bail- ments. This class was expanded within historical times to cover the -fa so-called innominate contracts [ ^ 136] denoted by the formula Do ut des, &c. (m), so that there was an enforceable obligation re coniracta wherever, as we should say, there was a consideration executed: yet the procedure in the different classes of cases was by no means uniform (n). 2. Consensual contracts, being contracts of constant occurrence in daily life in which no causa was required beyond the nature of the transaction itself. Four such contracts were recognized, the first three of them at all events frpm the earliest times of which we know any- thing, namely, Sale, Hire, Partnership, and Mandate. (Emptio Venditio, Locatio, Conductio, Societas, Manda- tum) (o). To this class great additions were made in later times. Subsidiary contracts (pacta adiecta) en- tered into at the same time and in connexion with con- plura vestimenta," Bractou,*99a. " Obligacioun deit estre vestue de v. maneres de garnisementz, " Britton 1. 156. Austin (2. 1016, 3rd ed.) speaks per ineuriam of the right of action itself, instead of that which gives the right, as being the "clothing." (The notion sometimes met with that if a contract by verbal question and answer was good, a contract in writing must be good A fortiori, is of course a mere modern invention). (I) Austin, 2. 1002. Traditionibus et usucapionibus dominia rerum, non nudis pactis, transferuntur. Cod. 2. 3. de pactis, 20. But the context is not preserved, and the particular pactum in question may have been nudum in the general sense too. (m) Aut enim do tibi ut des, aut do ut facias, aut facio ut des, aut facio ut facias; in quibus quaeritur quae obligatio nascatur. D. 19. 5. de praescr. verbis, 5 pr. and see Vangerow, Pand. g 599 (3. 234, 7th ed.) Blackstone (Coram. 2. 444) took this for- mula for a classification of all valuable considerations, and his blunder has been copied without reflection by later writers. (n) Dig. 1. c. l\ 1-4. (o) I have altered the statement here in deference to Prof. Muirhead's opinion (on Gai. 3. 216) that the actio mandati was comparatively modern. FORM OF CONTRACT. tracts of an already enforceable class became likewise enforceable: and divers kinds of informal contracts were specially made actionable by the Edict and by im- perial constitutions, the most material of these being the constitutum, covering the English heads of account stated and guaranty. Justinian added the pactum do- nationis, it seems with a special view to gifts to pious uses (p). Even after all these extensions, however, matters stood thus: " The Stipulation, as the. only for- mal agreement existing in Justinian's time, gave a right of action. Certain particular classes of agreements also gave a right of action even if informally made. All other informal agreements (nuda pacta) gave none. This last proposition, that nuda pacta gave no right of action, may be regarded as the most characteristic prin- [■jf 137] ciple of the Roman law of ■£ Contract " (q). We may now see the importance of bearing in mind that in Ro- man, and therefore also in early English law, nudum pactum does not mean an agreement made without con- sideration. Modern civil So far the Roman theory. When it came to be adopted law. ' or revived in Western Christendom, what happened in Germany was, according to Savigny, that the form of the Stipulation being foreign and unsupported by any real national custom like that which kept it alive among the Romans, never found its way into practice: and as there was nothing to put in its place, the distinction between formal and informal agreements disappeared (r). The conclusion is that in the modern Roman law of Ger- many the requirement of causa does not exist. But this conclusion is by no means undisputed; in fact there is a decided conflict of opinion among modern writers, though the greater weight of authorities appear to be for the proposition here stated. It has even been maintained that a causa was required for the full validity of a Stip- ulation in the Roman law itself (s). Something of the same kind seems to have happened in Scotland, where no consideration iB needed to make a contract binding: this is qualified however by the rule that a gratuitous promise cannot be proved by oral evidence, but only by (p) C. 8. 54, de donat. 35, \ 5. The establishment of emphy- teusis as a distinct species of contract is of minor importance for our present purpose. (g) Sav. Obi. 2. 231. Prof. Muirhead, on Gai. 3. 134, says that ''amongst peregrins a nudum pactum was creative of action:" which I do not understand. (r) Sav. Obi. 2. 239. (s) See Vangerow, Pand. \ 600 (3. 244). MODERN CIVIL LAW. 203 writing (t ). In French jurisprudence on the other hand the Roman causa has persisted (though in a pretty lib- eral interpretation) as a needful ingredient of every binding contract. Instead of pacta becoming legitimce conventiones, the legitimce conventiones have simply van- ished. But our English authors did find something to put in Correspond- the place of the Stipulation: namely the solemnities of in g English a *f{ deed. Many things tend to show that in old En- T "fc }■***) glish and Anglo-Norman times a writing was regarded doctrine in only as one of the possible modes of proof known to the ' law. The notion of the value of a deed being in its formality came in later, but it was well established be- fore the thirteenth century. As early as Glanvill we find that a man's seal is conclusive against him (u). Bracton after setting forth .almost in the very words of the Institutes how " Verbis contrahitur obligatio per stipulationem " (v), &c. adds: "Et quod per scripturam fieri possit stipulatio et obligatio videtur, quia si scrip- turn fuerit in instrumento aliquem promisisse, perinde habetur ac si interrogatione praecedente responsum sit " (as). There is no doubt that he means only a writ- ing under seal, though it is not so expressed: Fleta does say in so many words that a writing unsealed will not do (y). The equivalent for the Roman Stipulation be- ing thus fixed, the classes of Real and Consensual con- tracts are recognized, in the terms of Roman law so far as the recognition goes: but the Consensual contracts are so meagrely handled that it looks as if they were introduced only for form's sake (z). "We hear of noth- (0 Erskine, Pr. of Law of Sc. Bk. 8, Tit. 2, { 1; Bk. 4, Tit. 2, |U. («) L. 10, c. 12. (v) One may doubt whether an English Court ever in fact en- forced or would have enforced a Stipulation proper, as well as whether it ever entertained an "actio legis Aquiliae de honiini- bus per feloniam occisis," fo. 1036. As to Bracton's use of Koman names for forms of action compare Bigelow, Leading cases on the Law of Torts, p. 585. The following wild marginal note occurs in an early 14th century MS. of Bracton in the Cambridge Uni- . versity Library (Dd. 7. 6): Differt pactum a conventione quia pactum solum consistit in sermonibus, ut in stipulationibus, con- ventio tarn in sermone quam in opere, ut cum in scriptis red- , igitur. (a;) 99 6. 100 a. (y) Lib. 2, c. 60, ? 25. Non solum sufficietscriptura nisi sigilli munimine stipulantis roboretur cum testimonio fide dignomm praesentium. The wrong use of stipulans for the covenantor de- serves remark. Cp. Kemble, Cod. Dipl. no. 623 (a. d. 979), 'his testibus astipulantibus,' where the word has no distinct meaning at all. (z) Giiterbock (p. 113) justly remarks that what Bracton says 204 FORM OF CONTRACT. [*139] Remedies on contracts in" 13th century. Debt on covenant. [*140] ing corresponding to the later Roman extensions of the "validity of informal agreements. Such -^- agreements in general give no right of action : in G-lanvill it is ex- pressly said: " Privatas conventiones non solet curia domini regis tueri " (a), in a context. suggesting that in his. time even the regular consensual contracts of the civil law fell within the proposition. In Bracton too, notwithstanding his elaborate copying of Roman sources, we read: "ludicialis autem esse poterit stipulatio, vel conventionalis : iudicialis, quae iussu iudicis fit vel prae- toris. Conventionalis, quae ex conventione utriusque partis concipitur, nee iussu iudicis vel praetoris, et qua- rum totidein sunt genera quot paene (6) rerum contra- hendarum, de quibiis omnibus omnino curia regis se non iniromittit nisi aliquando de gratia " (fo. 100a). The sum of the matter seems to have been thus. As to formal contracts: A contract under seal could be en- forced by action of debt (placitum de debito). It was a good defence that the party's seal had been lost and affixed by a stranger without his knowledge, at least if the owner had given public notice of the loss (c) : but not if it had been misapplied by a person in whose cus- tody it was; for then, it was said, it was his own fault for not having it in better keeping. This detail shows how much more archaic -^- English law still was than of the Contract of Sale in another plate (fo. 61 b) shows that it was not a true consensual contract in his view. The passage is curious, inasmuch as it contradicts the modern law of England in nearly all points, and the civil law in most. (a) Lib. 10, c. 18, and more fully ib. c. 8. " Curia dominiregis " is significant, for the ecclesiastical courts did take cognizance of breaches of informal agreements as being against good conscience, ib. c. 12, and see Blackstone's Comm. 1. 52, and authorities there cited, and Archdeacon Hale's Series of Precedents and Proceed- ings, where several instances will be found. It is worth noting that they seem to cease after the end of the 15th century, i. e. when the action of assumpsit in the temporal courts had become well established, and therefore the spiritual courts would have been prohibited from entertaining such matters, as they had already been prohibited from entertaining suits nominally pro lamone fidei, but really equivalent to actions of debt or the like: Y. B. 38 H. 6, 29, pi. 11. (6) This is evidently the true reading: the printed book has , poenae, a mere printer's misreading, as I suspect, of pene, which is given by the best MSS. Bracton was copying the language of I. 3. 18, | 3, (c) Glanvill (L. 10, c. 12) has not even this: Britton, 1, 164, 166, as in the text. "Pur ceo qe il ad conu le fet estre soen en partie, soit agarde pur le pleyntif et se purveye autre foiz le de- fendant de meillour gardeyn." Cp. Fleta, 1, 6, c. 33, \ 2; c. 34, \ 4. That the practice of publishing formal notice in case of loss really existed is shown by the example given in Blount's Law Dictionary, s.v. Sigillum, dated 18 Eic. 2. EARLY ENGLISH LAW. 205 the developed Roman system from which it borrowed much of its language: and also that delivery was not then known as one of the essential requisites of a deed. As to informal contracts : An action of debt might be Debt on brought for money lent, or the price of goods sold and simple con- delivered, and an action of detinue (which was but a *™?*> „ species of debt) for chattels bailed (d). And probably e mue ' an action of debt might be maintained for work done or on other consideration completely executed. At least the contractus innominati {do ut des, &c.) are dis- tinctly recognized by the text- writers, though in Brac- ton strangely out of their natural place, under the head of conditional grants (Bracton 186, 19a; Pleta, 1. 2, c. 60, § 23) (e). About two centuries later we find it quite clear that an action of debt will lie on any con- sideration executed, though the term is not used, and also — which marks a decided advance since Bracton's time — that on a contract for the sale of either goods or land an action may be maintained for the price before the goods are delivered or seisin given of the land (/). Obligations quasi ex contractu might in some cases at least be enforced by action of debt. Such an action brought to recover money paid on a failure of consid- eration was held good in form (though there was in fact a covenant), Y. B. 21 & 22 Ed. 1, p. 600 (Rolls ed.), A.D. 1294, where it is also said that money paid as the price of land might be recovered back in an ac- tion of debt if the seller would •fc not enfeoff the buyer. [ y^- 141] This action was probably a direct imitation of the Ro- man Condictions, and must not be confused with the modern action of assumpsit on the "common counts." The action of account was also in use, see 52 Hen. 3 Account. (Stat. Marlb.) c. 17, 13 Ed. 1 (Stat. Westm. 2) c. 23. It seems to have been for a long time a remedy of wide (d) For the precise difference in the developed forms of plead- ing see per Manle, J., 15 C. B. 303. The decision of the C. A. in Bryant v. Herbert, 3 C. P. D. 389, that an action for wrongful detention is "founded on tort" within the meaning of the County Court Acts is, and professes to be, beside the historical question. Mr. Justice O. W. Holmes, of Massachusetts, has most ingeniously connected the historical limits of the ac- tion of debt with the method of proof required of the plaintiff in the absence of a deed. "The Common Law," Boston, 1881, pp. 256, sqq. (e) In Bracton fo. 19a, lines 14, 15 in ed. 1569, si (the second), possunt and ut repetere possim are corrupt. The true readings con- jecturally restored long ago by Gruterbock, and in fact given al- most identically by the best MSS., are sed . . .possum. . . non ut repetere possim. (/) Y. B. Mich. 37 H. 6 [A.D. 1459], 8, pi. 18, by Prisot, C. J. 206 FORM OF CONTRACT. application (sometimes exclusively, sometimes concur- rently with debt) to enforce claims of the kind which in modern times have been the subject of actions of as- sumpsit for money had and received or the like. It covered apparently all sorts of cases where money had been paid on condition or to be dealt with in some way prescribed by the person paying it (see cases in 1 Eol. Abr. 116). , One must not be misled by the statement that " no man shall be charged in account but as guar- dian in socage, bailiff or receiver " (11 Co. Hep. 89, Co. Litt. 172 a) : for it is also said " a man shall have a writ of account against one as bailiff or receiver where he was not his bailiff or receiver: for if a man receive money for my use I shall have an account against him as receiver; or rf a man deliver money unto another to deliver over unto me, I shall have an account against him as my receiver" (F. N. B. 116 Q). This action might be brought by one partner against another (ib. 117 D). At common law it could not be brought by executors, except, it seems, in the case of merchants, nor against them unless at the suit of the Crown (Co. Lit. 90,6, and see Earl of Devonshire's ca. 11 Rep. 89): but it was made applicable both for and against executors by vari- ous statutes to which it is needless to refer particu- larly (g). In modern times this action was obsolete ex- cept as between tenants in common (h). On informal executory agreements there was in gen- eral no remedy in the King's Courts. The Ecclesias- [ -^ 142] tical Courts -^f however took notice of them (see note p. 139 supra) : and it may well be that executory mer- cantile contracts were also recognized in the special Where no courts which administered the law merchant. But we remedy at cannot here attempt to throw any light on that which common law. Lord Blackburn has found to be one of the obscurest passages in the history of the English law (i). Also there are traces of exceptions by local custom. We read in F. N. B. 146 A. that " in London a man shall have a writ of covenant without a deed for the covenant broken," but the authorities referred to do not bear this out (k). {g) The action is given against executors by 4 & 5 Ann. c. 3 (Rev. Stat.; 4 Ann. c. 16 in Ruffhead) s. 27. (A) See Lindley on Partnership, 2. 1022, note k. {i) Blackburn on the Contract of Sale, 207-208. In addition to the quotation there from the Year Book of Ed. 4, see now Y. B. 21 & 22 Ed. 1, p. 458. (k) The Year Book 27 H. 6. 10, pi. 6, shows only that by the custom of London a covenant to repair by the lessor was implied in leases: the case in 1 Leo. 2 shows a custom at Bristol that con- ventio ore terms facta shall bend the covenantor as strongly as if it HISTORY OF ASSUMPSIT. 207 It is not without significance that when a general Later intro- remedy was at last found indispensable it was introduced duction pf in the form of an action nominally ex delicto. It was a assum P slt - new variety of trespass on the case that ultimately be- ' came the familiar action of assumpsit and the ordinary way of enforcing simple contracts. The final preva- lence of assumpsit over debt, like that of trover over detinue (I), was no doubt much aided by the defendant not being able to wage his law and by certain other ad- vantages: but the reason of its original introduction was to supply a remedy where debt would not lie at all. This was not affected without some failures. In the first*recorded case (m), the action was against a carpen- ter for having failed to build certain houses as he had contracted to do. The writ ran thus: "Quare -fa cum [■^■143] idem [the defendant] ad quasdam domos ipsius Lau- rentii [the plaintiff] bene et fideliter infra certum tern- pus de novo construend' apud Grimesby assumpsisset, praedictus tamen T. domos ipsius L. infra tempus prae- dictum, &c, construere non curavit ad dampnum ipsius Laurentii decern libr', &c." The report proceeds to this effect: — " Tirwit. — Sir, you see well that his count is on a covenant, and he shows no such thing : judgment. Oascoigne. — Seeing that you answer nothing, we ask judgment and pray for our damages. Tirwit. —This is covenant or nothing (ceo est merement un covenant). Brenchesley, J. — It is so : perhaps it would have been otherwise had it been averred that the work was begun and then by negligence left unfinished. (Hankford, J. observed that an action on the Statute of Labourers might meet the case.) Rickhill, J. — For that you have counted on a covenant and show none, take nothing by your writ but be in mercy. " This was followed by at least one similar decision (n), were made by writing," which being taken strictly was held not to bind executors. (I) See per Martin, B., Burroughes v. Bayne, 5 H. & N. at p. 301. (m) Mich. 2 H. 4, 3 6, pi. 9, see Eeeves Hist. >Eng. Law (ed. Finlason), 2. 508, and 1 C. P. Cooper, Appx. 549, where subse- quent cases are also collected and translated. Actions of tres- pass on the case had previously been allowed for malfeasance by the negligent performance of contracts (for which it is still held that there is an alternative remedy in contract and in tort), but an action for mere non-feasance was a novelty. See Bigelow, L. C. on Law of Torts, 586. (») Mich. 11 H. 4. 33, pi. 60. And see Bigelow, L. C. 587. 208 FORM OP CONTRACT. [*144] Bale that deeds may not be ■written on wood, &c. : suggested origin thereof. but early in the reign of Henry VI. a like action was brought against one Watkins for failure to build a mill within the time for which he had promised it, and two out of three judges (Babington, C. J., and Cockaine, J.) were decidedly in favour of the action being maintain able and called on the defendant's counsel to plead oyer to the merits (o). Martin, J. dissented, insisting that an action of trespass would not lie for a mere non-fea- sance ; a difficulty by no means frivolous in itself. " If this action is to be maintained on this matter," he said " one shall have *n action of trespass on every agree- ment that is broken in the world." This however was the very thing sought, and -fa so it came to pass in the two following reigns, when the general application of the action of assumpsit was well established (see Beeves, 3. 182, 403). But only in 1596 was it finally decided that assumpsit was admissible at the plaintiff's choice where debt would also lie (p). The fiction of the action being founded on trespass was abolished by the Com- mon Law Procedure Act. We need not stop to consider the requisites of a deed, but it may be noticed that when the books (e. g. Shepp. Touchst. 54) say a deed must be written on parchment or paper, not on wood, &c, this is not due, as a modern reader might at first sight think, to mere exuberance of fancy or abundance of caution. The. key is to be found, we believe, in the common use of wooden tallies as records of contracts in the middle ages, and in the fuller statement of Fitzherbert (F. N. B. 122 I) that if such a tally is sealed and delivered by the party it ■w.ill not be a deed. The Year Books there referred to show that attempts were in fact made to rely on sealed tallies as equivalent to deeds. These tallies were no doubt writ- ten upon as well as notched, so that nothing could be laid hold of to refuse them the description of deeds but the fact of their being wooden : the writing is expressly mentioned in one case (q), and the Exchequer tallies used till within recent times were likewise written upon (r). (o) Hil. 3 H. 6, 36, pi. 33. ( p). Slade's ca. 4 Co. Eep. 91 a, in Ex. Ch. It was still later before it was admitted that the substantial cause of action in as- sumpsit was the contract. O. W. Holmes, The Common Law, 284—287. (q) Trin. 12 H. 4. 23, pi. 3. The other citations we have been able to verify are Pasch. 25 E. 3. 83 (wrongly referred to as 40 in the last case and in the margin of Fitzh.), pi. 9, where the re- porter notes it is said to be [by custom] otherwise in London : and Trin. 44 Ed. 3. 21, pi. 23. (r) See account of them in Penny Cyclopaedia, s. v. Tally. The use of Tallies appears not to be obsolete on the Continent. The FORMAL CONTRACTS IN MODERN LAW. 209 The foregoing sketch ha9 shown how in the ancient Kequire- view no contract was good (as indeed no act in the law nientsot was) unless it brought itself within some favoured class treated as by -fc satisfying particular conditions of form, or of r-i-145] evidence, or both. The modern view to which the law the excep- of England has now long come round is the reverse, tion. namely that no contract need be in any particular form unless it belongs to some class in which a particular form is specially required. Before we say anything of these classes it must be Contracts of mentioned that contracts under seal are not the only Record, formal contracts known to English law. There are cer- tain so-called "contracts of record" which are of a yet higher nature than contract by deed. The judgment of a Court of Record is treated for some purposes as a contract: and a recognizance, i. e. "a writing obligatory acknowledged before a judge or other officer having authority for that purpose and enrolled in a Court of Record," is strictly and properly a contract entered into with the Crown in its judicial capacity. The statutory forms of security known as statutes merchant, sta- tutes staple, and recognizances in the nature of a ■ statute staple, were likewise of record, but they have long since fallen out of use (s). 4 The kind of contracts subject to restrictions of form are these: (1.) At common law, the contracts of corporations. Contracts The rule that such contracts mustf in general be under subject to seal is remarkable as not being an institution of mod- special ern positive law but a survival from a time when the orms - modern doctrine of contracts was yet unformed. Of late years great encroachments have been made upon it, which have probably not reached their final limits; as it stands, the law is in a state of transition or fluctu- ation on some points, and demands careful considera- tion. Both the historical and the practical reason lead us to give this topic the first place. (2.) Partly by the law merchant and partly by statute, the peculiar contracts expressed in negotiable instru- ments. French (art. 1333) and Italian (art. 1332) Civil Codes expressly admit them as evidence between traders who keep their accounts in this way. (s) As to Contracts of Eecord, see Anson, p. 43, and for an ac- eount of statutes merchant, &c. 2 Wms. Saund. 216-222. * 2 Bl. Com. 160, 426; 2 Tidd's Practice, 1132, and Kilty Pet. Stats. 143. 14 PRINCIPLES OF CONTRACT. 210 FORM OF CONTRACT. [ * 146J ic (3.) By statute only— A. The various contracts within the Statute of Frauds. Certain sales and dispositions of property are regulated by other statutes, but mostly as transfers of ownership or of rights good against third persons rather than as agreements between the parties. B. Marine insurances. C. Transfer of shares in companies (generally). D. Acknowledgment of debts barred by the Statute, of Limitation of James I. E. Marriage: This, although we do not mean to en- ter on the subject of the Marriage Acts, must be men- tioned here to complete the list. 1. As to Contract of Corporations. Corporations. The doctrine of the common law was that corpora- Old rule: tions could bind themselves only linder their common it geneT " seal, 5 except in small matters of daily occurrence, as the. quS-ed" appointment of household servants and the like (f). The principle of these exceptions being, in the words of the Court of Exchequer Chamber, "convenience amounting almost to necessity" (w), the vast increase in the extent, importance, and variety of corporate dealings which has taken place in modern times had led to a corresponding increase of the exceptions. 6 Before considering these, however, it is well to cite an approv- ed judicial statement of the rule, and of the reasons that may be given for.it: — " The seal is required as authenticating the concurrence of the whole body corporate. If the legislature, in erecting a body corporate, invest any member of it, either expressly or impliedly, ■with authority to bind the whole body by his mere signature or otherwise, then undoubtedly the adding a seal would be matter purely of form and not of substance. Everyone becoming a, member of such a corporation knows that he is liable to be bound [ -^ 147] i Q his corporate character by such an act; and persons -^ dealing; with the corporation know that by such an act the body will be bound. But in other cases the seal is the only authentic, (t) 1 Wms. Saund. 615, 616, and see old authorities collected in notes to Arnold v. Mayor of Poole, 4 M. & Gr. 876, and Fish- mongers' Company v. Robertson, 5 M. & Gr. 182. (it) Church ii. Imperial Gas, &c. Company, 6 A. &E. 846, 861. B Lord Coke in Sutton's Hospital, 10 Repts. 28; mentions five essentials of a corporation and amongst them that of a common seal. s The seal can be proved in a judicial proceeding by any one acquainted with it. City Council v. Morehead, 2 Rich. 430. CONTRACTS OF CORPORATIONS. 211 evidence of what the corporation has done or agreed to do. The resolution of a meeting, however numerously attended, is, after all, not the act of the whole body. Every member knows he is bound by what is done under the corporate seal and by nothing else. It is a great mistake, therefore, to speak of the necessity for a seal as a relic of ignorant times. It is no such thing: either a seal or some substitute for a seal, which by law shall be taken as conclusively evidencing the sense of a whole body corporate, is a necessity inherent in the very nature of a corporation" (r). It is, no doubt, a matter of " inherent necessity " that an artificial person can do nothing save by an agent; 7 and the common seal in the agent's custody, when an act in the law purports to be the act of the corporation itself, or his authority under seal, when it purports to be the act of an agent for the corporation, is in Eng- lish law the recognized symbol of his authority. But there is no reason in the nature of things why his au- thority should not be manifested in other ways: nor is the seal of itself conclusive, for an instrument to which it is in fact affixed without authority is not binding on the corporation (x). On the other hand, although it is usual and desirable for the deed of a corporation to be sealed with its proper corporate seal, it is laid down by high authorities that any seal will do (y). 8 A com- pany under the Companies Act, 1862, must have its name engraved in legible characters on its seal, and any director, &c, using as the seal of the company any seal on which the name is not so engraved is subject to a penalty of 50Z. (ss. 41, 42); but this' would not, it is conceived, prevent instruments so executed from •jf binding the company (z). The seal of a building [ ~jf 148] (v) Mayor of Ludlow v. Charlton. 6 M. & W. 815, 823, adopt- ed by Pollock, B., in Mayor of Kidderminister v. Hard wick, L. R. 9 Ex. at p. 24, and see per Keating, J., Austin v. Guardians of Bethnal Green, L. R. 9 C. P. at p. '95. (x) Bank of Ireland v. Evans' Charities, 5 H. L. C. 389. (y) 10 Co. Kep. 306, Shepp. Touchst. 57. Yet thj rule is doubted, Grant on Corp. 59, but only on the ground of conveni- ence and without any authority. The like rule as to sealing by an individual is quite clear and at least as old as Bracton: Non multum refert utrum [carta] proprio vel alieno sigillo sit sig- nata, cum semel a donatore coram testibus ad hoc vocatis recog- nita et concessa fuerit, fo. 38a. Cp. Britton, 1. 257. (a) Notwithstanding the statutory- penalty, there is an in- 7 A corporation ordinarily contracts by an agent. New Ath- ens v. Thomas, 82 111. 259; Turnpike v. Hay, 7 Mass. 102. 8 Crossman ». Hiltown Co., 3 Grant (Pa.). 225; Milldam Foun- dry v. Hovey, 21 Pick. 417; Stebbins v. Merritt, 10 Cush. 27; Miller v. Sewing Machine Co., 79 111. 450; Taylor v. Heggie, 83 N. C. 244. 212 FORM OF CONTRACT. Modern ex- ceptions. Bank of Columbia v. Patterson (Supreme Court, U S. Not so wide in Englond. [*149] Trading corporations: Contracts in course of society incorporated under the Building Societies Act, 1874 (37 & 38 Vict, c. 42, s. 16, sub-s. 10), "shall in all cases bear the registered name thereof," but no pen- alty or other consequence is annexed to the non-observ- ance of this direction. "We now turn to the exceptions. According to the modern authorities it is now established, though not till after Bundry conflicting decisions, that the "princi- ple of convenience amounting almost to necessity " will cover all contracts which can fairly be treated as ) necessary and incidental to the purposes for which the corporation exists: and that in the case of a trading corporation all contracts made in the ordinary course of its business or for purposes connected therewith fall within this description. The same or even a wider conclusion was much earlier arrived at in the United States. As long ago as 1813 the law was thus stated by the Supreme Court: — " It would seem to be a sound rule of law that wherever a cor- poration is acting within the scope of the legitimate purposes of its institution all parole contracts made by its authorized agents are express promises of the corporation, and all duties imposed on them by law, and all benefits conferred at their request, raisa implied promises for the enforcement of which an action may well lie " (a). In England this rule still holds good only for trad- ing corporations, and perhaps also for non-trading cor- porations established in modern times for special pur- poses. The former conflict of decisions is much re- duced, but there -^ remains the inconvenient distinc- tion of two if not three different rules for corporations of different kinds. As concerns trading corporations the law may be taken as settled by the unanimous decisions of the Court of Common Pleas and of the Exchequer Cham- stance on record of the private seal of a director being used when the company had been so recently formed that there had been no time to make a proper seal, Gray v. Lewis, 8 Eq. at p. 531. The like direction and penalty are contained in the Industrial and Provident Societies Act, 1876, 39 & 40 Vict. c. 45, ss. 10, sub-s. 1, and 18, sub-s. 2. As to execution of deeds abroad by companies under the Acts of 1862 and 1867, see the Companies Act, 1862, s. 55, and the Companies Seals Act, 1864 (27 Vict. c. 19); in Scotland, the Conveyancing (Scotland) Act, 1874, 37 & 38 Vict. c. 94,, s. 5& (a) Bank of Columbia v. Patterson, 7 Cranch, 299, 306. It is also held by the American authorities that the appointment by a corporation of an agent, officer, or attorney need not be under seal. TRADING CORPORATIONS. 213 ber in South of Ireland Colliery Co. v. Waddle (b). business The action was brought by the company against an don '* want engineer for non-delivery of pumping machinery, there inland °' being no contract under seal. • Bovil, C. J., said in the Colliery Co. Court below that it was impossible to reconcile all the «. Waddle, decisions on the subject; but the exceptions created by the recent cases were too firmly established to be ques- tioned by the earlier decisions, which if inconsistent with them must be held not to be law: — ' ' These exceptions apply to all contracts by trading corpora- tions entered into for the purposes for which they are incorporated . A company can only carry on business by agents, — managers and others; and if the contracts made by these persons are contracts -which relate to objects and purposes of the company, and are not • inconsistent -with the rules and regulations which govern their acts (c), they are valid and binding upon the company, though not under seal. It has been urged that the exceptions to the general rule are still limited to matters of frequent occurrence and small importance. The authorities however do not sustain the argument." The decision was affirmed on appeal without hearing q^^ over- counsel for the plaintiffs, and Cockburn, C. J., said the ruled, simble. defendant was inviting the Court to introduce a relic of barbarous antiquity. It is submitted that the following cases must since this be considered as overruled: — East London Waterworks Co. v. Bailey, 4 Bing. 283. Action for non-delivery of iron pipes ordered for the company's works (d). Expressly ^-said in the Court below to be no longer law, per f -A- 150] Montague Smith, J. See L. E. 3 C. P. 475. Homersham v. Wolverhampton Waterworks Go. 6 Ex. 137, 20 L. J. Ex. 193. Contract under seal for erection of machinery: price of extra work done with approval of the company's engineer and accepted, but not within the terms of the sealed contract, held not recoverable. Diggle v. London and Blaekwall By. Co. 5 Ex. 442, 19 L. J. Ex. 308. Work done on railway in alterations of permanent way, &c. : this case already much doubted in Henderson v. Australian (b) L. E. 3 C. P. 463, in Ex. Ch. 4 C. P. 617. Most if not all of the previous authorities are there referred to. (c) This qualification is itself subject to the rule established by Eoyal British Bank v. Turquand, 6 E. & B. 237; 25 L. J. Q. B. 327, and similar cases, and mentioned at p. 122 above. For details see Note D, in Appendix. (d) The directors were authorized by the incorporating Act of Parliament to make contracts; but it was held that this only meant they might affix the seal without calling a meeting. 214 FORM OF CONTRACT. Royal Mail dee. Co. 5 E. & B. 409. 24 L. J. Q. B. 322, which is now confirmed in its fall extent by the principal case. Probably Finlay v. Bristol & Exeter By. Co. 7 Ex. 409, 21 L. J. Ex. 117, where it was held that against a corporation tenancy could in no case be inferred from payment of rent so as to admit of an action for use and occupation without actual occupation. Also London Dock Co. v. Sinnott, 8 E. & B. 347, 27 L. J. Q. B. 129, where a contract for scavenging the company's docks for a year was held to require the seal, as not being of a mercantile nature nor with a customer of the company, can now be of little or no authority beyond its own special circumstances: see per Bovill, C. J. L. E. 3 C. P. 471. Even in the House of Lords it has been assumed and said, though fortunately not decided, that a formal contract nnder seal made with a railway company cannot be subsequently varied by any informal mutual consent: Midland G. W. By. Co. of Ire- land v. Johnson, 6 H. L. C. 798, 812. Cases r ^^ le following cases are affirmed or not contradicted. affirmed. Some of them were decided at the time on narrower or more particular grounds, and in one or two the trading character of the corporation seems immaterial: — Beverley v. Lincoln Gas Co. 6 A. & E. 829. Action against the company for price of gas meters supplied. Church v. Imperial Gas Co. ib. 846, in Ex. Ch. Action by the company for breach of contract to accept gas. A supposed dis- tinction between the liability of corporations on executed and on executory contracts was exploded. Copper Miners of England v. Fox, 16 Q. B. 229, 20 L. J. Q. B. 174. Action (in effect) for non-acceptance of iron rails ordered from the company. The company had in fact for many years given up copper mining and traded in iron, but this was not within the scope of its incorporation. Lowe v. L. & N. W. By. Co. 18 Q. B. 632, 21 L. J. Q. B. 361. The company was held liable in an action for use and occupation when there had been an actual occupation for corporate purposes, partly on the ground that a parol contract for the occupation was within the statutory powers of the directors and might be pre- sumed; cp. the next case. [ ^ 151] if Panting v. L. & N. W. By. Co. 8 Ex. 867, 23 L. J. Ex. 105. Sleepers supplied to an order from the engineer's office and ac- cepted; there was no doubt that the contract could under the Companies Clauses Consolidation Act be made by the directors without seal, and it was held that the acceptance and use were evidence of an actual contract. Henderson v. Australian Boyal Mail Co. 5 E. & B. 409, 24 L. J. Q. B. 322. Action on agreement to pay for bringing home one of TRADING AND NON-TRADING CORPORATIONS. 215 the company's ships from Sydney. Here it was distinctly laid down that " where the making of a certain description of con- tracts is necessaiy and incidental to the purposes for which the corporation was created" such contracts need not be under seal (by Wightman, J. ) ; " The question is whether the contract in its nature is directly connected with the purpose of the incorpora- tion" (by Erie, J.). Australian Royal Mail Co. v. Marzetti, 11 Ex. 228, 24 L. J. Ex. 273. Action by the company on agreement to supply provisions for its passenger ships. Beater v. Electric Telegraph Co. 6 E. & B. 341, 26 L. J. Q. B. 46: Where the chief point was as to the ratification by the directors of a contract made originally with the chairman alone, who certainly had no authority to make it. Ebbw Vale Company's Case, 8 Eq. 14, decides that one who sells to a company goods of the kind used in its business need not as- certain that the company means so to use them, and is not pre- vented from enforcing the contract even if he had notice of an in- tention to use them otherwise. As concerns non-trading corporations, the question Non-trading has never been decided by a Court of Appeal. But the corporations. weight of the most recent authorities, together with Wlll p . created the analogy of those last considered, seems to give a f or spec ; a i sufficient warrant for the statement made above, that all purposes: contracts necessary and incidental to the purposes for State of which the corporation exiBts may be made without seal, authorities. at least when the corporation has been established for an(1 in C id.eii- special purposes by a modern statute or charter. 9 On tal" con- the rule as thus limited the latest case is Nicholson v. tracts don't Bradfield Union (e), where it was held that a corpora- want seal - tion is liable without a contract under seal for goods of a' kind which must be from time to time required for corporate purposes, at all events when they have been actually supplied and accepted. Earlier decisions are as follows: — ic Sanders v. St. Neot's Union, 8 Q. B. 810/ 15 L. J. M. C. 104. [ + 152] Iron gates for workhouse supplied to order without seal and ac- cepted. Paine v. Strand Union, ib. 326, 15 L. J. M. C. 89, is really the same way, though at first sight contra: the decision being on the ground that making a plan for rating purposes of one parish within (e) L. E. 1 Q. B. 620. 9 Blunt v. Walker, 11 Wis. 334; Buckley v. Briggs, 30 Mo. 452; Bank of U. S. v. Danbridge, 12 Wheaton, 64; Fourth School Dis- trict v. Wood, 13 Mass. 193; Chestnut Hill Turnpike v. Rutter, 4 S. & E. 67; Board of Education v. Greenbaum, 39 111. 609. 216 FORM OF CONTRACT. the union was not incidental to the purposes for which the guardians of the union were incorporated: they had nothing to do with either making or collecting rates in the several parishes, nor had they power to act as a corporation in matters confined to any particular parish. Clarke v. Cuckfield Union, 21 L. J. Q. B. 349 (in the Bail Court, by Wightman, J.) Builders' work done in the workhouse. The former cases are reviewed. Haigh v. North Brierly Union, E. B. &. E. 873, 28 L. J. Q. B. 62. An accountant employed to investigate the accounts of the union was held entitled to recover for his work as ' ' incidental and necessary to the purposes for which the corporation was cre- ated," by Erie, J., Crompton, J. doubting. In direct opposition to the foregoing we have only one deci- sion, but a considered one, Lamprellv. Billericay Union, 3 Ex. 283; 18 L. J. Ex. 282. Building contract under seal, providing for extra works on written directions of the architect. Extra work done and accepted but without such direction. Held, with an expression of regret, that against an individual this might have given a good distinct cause of action on simple contract, but this would not help the plaintiff, as the defendants could be bound only by deed. Hunt v. Wimbledon Local Board (C. A. ) 4 C. P. D. 48. Whether the preparation of plans for new offices for an incorporated local Board, which plans were not acted on, is work incidental and necessary to the purposes of the Board, quaere. The actual de- cision was on the ground that contracts above the value of 501. were imperatively required by statute to be under seal. Municipal With regard to municipal corporations (and it is pre- corporations, sumed other corporations not created for definite public &c: Old rule purposes) .the ancient rule seems to be still in force to in force a grea t; extent. An action will not lie for work done on local improvements (/), or on an agreement for the purchase of tolls by auction (g), -without an agreement under seal. The court of Common Pleas held (in 1875) that where a municipal corporation owns a graving dock a contract to let a ship have the use of it need not be [ -^ 153] under the corporate seal. ^ This was put, however, on the ground that the case does fall within the ancient exception of convenience resting on the frequency'or urgency of the transaction. The admission of a ship into the dock is a matter of frequent and ordinary oc- currence and sometimes of urgency (h). (/> Mayor of Ludlow v. Charlton, 6 M. & W. 815. (g) Mayor of Kidderminster v. Hard wick, L. R. 9 Ex. 13. (ft) Wells v. Kingston-upon-Hull, L. R. 10 C. P. 402. MUNICIPAL CORPORATIONS. 217 There has also been little disposition to relax the rule Appoint- in the case of appointments to offices, and it seems at ™f nts *° present that such an appointment, if the office is of any cor por a / importance, must be under the corporate seal to give the ticms. holder a right of action for his salary or other remun- eration. This appears by the following instances: — Appointment of attorney: Arnold v. Mayor of Poole, 4M. & Gr. 860. It is true that the corporation of London appoints an attor- ney in court without deed, but that is because it is matter of re- cord: see pp. 882, 896. But after an attorney has appeared and acted for a corporation the corporation cannot, as against the other parly to the action, dispute his authority on this ground: Faviell v. E. C. By. Co. 2 Ex. 344, 17 L. J. Ex.223, 297. Nor can the other party dispute it after taking steps in the action: Thames Haven, &e. Co. v. Hall, 5 M. & Gr. 274. Cp. Beg. v. Justices of Cumberland, 17 L. J. Q. B. 102. Grant of military pension by the East India Company in its political capacity: Gibson v. E. I. Co. 5 Bing. N. C. 262. Increase of town clerk's salary in lieu of compensation: Beg. v. Mayor of Stamford, 6 Q. B. 434, L. J. Dig. fi, 422. Office with profit annexed (coal meter paid by dues) though held at the pleasure of the corporation: Smith v. Cartwright, 6 Ex. 927, 20 L. J. Ex. 401. (The action was not against the corporation but against the person by whom the dues were alleged to be pay- able. The claim was also wrong on another ground,) Collector of poor rates: Smart v. West Ham Union, 10 Ex. 867, 24 L. J. Ex. 201; but partly on the ground that the guardians had not undertaken to pay at all, the salary being charged on the rates; and wholly on that ground in Ex. Ch., 11 Ex. 867, 25 L. J. Ex. 210. Clerk to master of workhouse: Austin v. Guardians of Belhnal Green, L. R. 9 C. P. 91. Dunstan v. Imperial Gas Light Co. 3 B. & Ad. 125, as to directors' fees voted by a meeting; but chiefly on the ground that the fees were never intended to be more than a gratuity. ' Cope v. Thames Haven, &c. Co. 3 Ex. 841, 18 L. J. 'Ex! 345; agent appointed for a special negotiation with another company not al- lowed to ^-recover for his work, the contract not being under seal r JL 1541 nor in the statutory form, viz., signed by three directors in pur- suance of a resolution, although by another section of the special Act the directors had full power to " appoint and displace . . . all such managers, officers, agents .... as they shall think proper." It seems difficult to support the decision; this was not like an appointment to a continuingoffice; and cp. Beg. v. Justices of Cumberland, 17 L. J. Q. B. 102, where under very similar en- abling words an appointment of an attorney by directors without seal was held good as against third parties. 218 FORM OF CONTRACT. No equity to enforce informal agreement against cor- poration. Right of corporations to sue on contracts executed. Tenancy and occupation. [*155] Corporations liable on quasi-con- tracts generally. It has been decided (as indeed it is obvious in prin- ciple) that inability to enforce an agreement with a cor- poration at law by reason of its not being under the cor- porate seal does not create any jurisdiction to enforce it in equity (i). The rights of corporations to sue upon contracts are somewhat more extensive than their liabilities. When the corporation has performed its own part of the con- tract so that the other party has had the benefit of it, the corporation may sue on the contract though not origi- nally bound (k). For this reason, if possession is given under a demise from a corporation which is invalid for want of the corporate seal, and rent paid and accepted, this will constitute a good yearly tenancy (I) and will enable the corporation to enforce any term of the agree- ment which is applicable to such a tenancy (m), and a tenant who has occupied and enjoyed corporate lands without any deed may be sued for use and occupation (n). Conversely the presumption of a demise from year to year from payment and acceptance of rent is the same against a corporation as against an individual landlord: "where the corporation -j^ have acted as upon an executed contract, it is to be presumed against them that every- thing has been done that was necessary to make it a binding contract upon both parties, they having had all the advantage they would have had if the contract had been regularly made " (o). And a person by whose per- mission a corporation has occupied lands may sue the corporation for use and occupation (p). In the case of a yearly tenancy the presumption is of an actual con- tract, but the liability for use and occupation is rather (i) Kirk v. Bromley Union, 2 Phill. 640; Crampton v. Varna Ry. Co., 7Ch. 562. (fc) Fishmongers' Co. v. Robertson, 5 M. & Gr. 131. The judg- ment on this point is at pp. 192-6; but the dictum contained in the passage " Even if . . against themselves," pp. 192-3 (extend- ing the right to sue without limit) is now overruled. See Mayor of Kiddermister v. Hardwick, L. R. 9 Ex. 13, 21. (I) "Wood v. Tate, 2 B. & P. N. R. 247. (m) Eccles. Commrs. v. Merral, L. R. 4 Ex. 162. By Kelly, C. B., this is correlative to the tenant's right to enforce the agree- ment in equity on the ground of part performance, sed qu. (») Mayor of Stafford v. Till, 4 Bing. 75. The like as to tells, Mayor of Carmarthen v. Lewis, 6 C. & P*. 608, but see Serj. Man- ning's note, 2 M. & Gr. 249. (o) Doe d. Pennington v. Tanniere, 12 Q. B. 998, 1013, 18 L. J. Q. B. 49. (p) Lowe i). L. & N. W. Ry. Co., 18 Q. B. 632, 21 L. J. Q. B. 361. CONTRACTS OF CORPORATIONS. 219 quasi ex contractu (q). It is settled that in general a cause of action on a " contract implied in law," as it is inconveniently called in our books, is as good against a corporation as against a natural person. Thus a cor- poration may be sued in an action for money received on the ground of strict necessity ; "it cannot be expected that a corporation should put their seal to a promise to return moneys which they are wrongfully receiving " (r). It was held much earlier that trover could be maintained against a corporation — a decision which, as pointed oat in the case last cited, was analogous in principle though not in form (s). Sometimes it is stated as a general rule that corporations are liable on informal contracts of which they have in fact had the benefit: 10 but the extent and existence of the supposed rule are doubtful (t). Forms of contracting otherwise than under seal are Statutory provided by many special or general Acts of Parlia- forms of ment creating or regulating corporate companies, and contract, contracts ■£■ duly made in those forms are of course [ "At 156] valid. But a statute may, on the other hand, contain restrictive provisions as to the form of corporate con- tracts, and in that case they must be strictly followed. Enactments requiring contracts of local corporate au- thorities exceeding a certain value to be in writing and sealed with the corporate seal are held to be imperative, even if the agreement has been executed and the cor- poration has had the full benefit of it (u). The general results seem to stand thus: — (?) The liability existed at common law, and the statute 11 Geo. 2, c. 19, s. 14, made the remedy ^>y action on the case co- extensive with that by action of debt, see Gibson v. Kirk, 1 Q. B. 850, 10 L. J. Q. B. 297. Since the C. L. P. Act the statute seems in fact superfluous. (?) Hall v. Mayor of Swansea, 5 Q. B. 526, 549, 13 L. J. Q. B. 107. The like of a quasi corporation empowered to sue and be sued by an officer, Jefferys v. Gurr, 2 B. & Ad. 833. (s) Yarborough v. Bank of England, 16 East, 6. See early cases of trespass against corporations cited by Lord Ellenborough at p. 10. (t) Hunt v. Wimbledon Local Board (C. A.), 4 C. P. D. at pp. 53, 57. («) Frend v. Dennett, 4 C. B. N. S. 576, 27 L. J. C. P. 314; Hunt v. Wimbledon Local Board, 3 C. P. D. 208, in C. A. 4 C. P. D. 48; Young & Co. v. Mayor of Leamington, 8 App. Ca. 517. In Eaton v. Basker (C. A.), 7 Q. B. D, 529, it was decided that a provision of this kind in the Public Health Act, 1875, applies only to contracts known at the time of making them to exceed the specified "value oramount" of 50?. 10 The law creates and implies contracts against corporations the same as against individuals. Sheldon v. Fairfax, 21 Vt. 102; Goodwin v. Union Screw Co., 34 N. H. 378; Danforth v. Scho- harie Turnpike, 12 Johns. 227; New Athens v. Thomas, 82111. 259. 220 FORM OP CONTRACT. Summary of results. [*157] In the absence of enabling or restrictive statutory provisions, which when they exist must be carefully at- tended to— A trading corporation may make without seal any contract incidental to the ordinary conduct of its busi- ness;" but it cannot bind itself by negotiable instru- ments unless the making of such instruments is a sub- stantive part of that business, or is provided for by its constitution (j/). 12 A non-trading corporation, if expressly created for special purposes, may make without seal any contract incidental to those purposes; if not so created, can- not (it seems) contract without seal except in cases of immediate necessity, constant recurrence, or trifling importance. In any case where an agreement has been completely executed on the part of a corporation, it becomes a con- tract on which the corporation may sue. The rights and obligations arising from the tenancy or occupation of land without an express contract ap- ply to corporations both as landlords and as tenants or occupiers in the same manner (z) and to the same extent as to natural persons. •fc A corporation is bound by an obligation implied in law whenever under the like circumstances a natural person would be so bound. 13 It is much to be wished that the whole subject should be reviewed and put on. a settled footing by the Court of Appeal, and that those cases which are already vir- tually overruled should be expressly declared to be no longer of authority (a). Negotiable instruments. 2. Negotiable instruments. , The peculiar contracts undertaken by the persons who issue or indorse negotiable instruments . must by the nature of the case be in writing. '* Part of the defini ■ (y) See p. 130, supra. (z) Assuming Finlay v. Bristol and Exeter Ry. Co., 7 Ex. 409; 21 L. J. Ex. 117, not to be now law. fa) See per Lord Blackburn, 8 App. Ca. at p. 523, agreeing with Lindley, L. J. 8 Q. B. D. at p. 585. 11 Ross v. Madison, 1 Ind. 281; Church v. Johnson, 53 Ind. 273. 12 In Be Great Great Western Telegraph. 5 Bis. 363; Moss v. Oakley, 2 Hill, 265; Met. on Contracts, 158.' 13 Talledega Ins. Co. v. Landers, 43 Ala. 115; People v. Manran, 5 Denio, 389; Barry V: Merchant's Exchange, 1 Sandf. Ch. 280. 14 Scull v. Edwards, 13 Ark. 24; Bristol v. Warner, 19 Conn. 7; Hitchcock v. Cldutier, 7 Vt. 32; Smith v. Bridges, 1 111. 2. NEGOTIABLE INSTRUMENTS. 221 tion of a bill of exchange is that it is an unconditional order in writing (6). The acceptance of a bill of ex- change, though it may be verbal as far as the law mer- chant is concerned, is required by statute to be in writ- ing and signed (c). 15 3. As to purely statutory forms. Statute of A. Contracts within the Statute of Frauds. Frauds. To write a commentary on the Statute of Frauds would be beyond the scope of this work. It may be convenient however to state as shortly as possible, so far as contracts are concerned, the contents of the stat- ute and some of the leading points established on the construction of it. The statute (29 Car. 2, c. 3) enacts that no action shall be brought on any of the contracts specified in the 4th section " unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorized." The contracts comprised in this section are — a. Any special promise by an executor or administra- Promises tor -Jf " to answer damages out of his own estate." No [ -fa 158] difficulty has arisen on the words of the statute, and by executor, the chief observation to be made is the almost self evi- Ce- dent one (which equally applies to the other cases within the statute) that the existence of a written and signed memorandum is made a necessary condition of the agreement being enforceable, 16 but will in no case make an agreement any better than it would have been apart from the statute. A good consideration, a real consent of the parties to the same thing in the same sense, and all other things necessary to make a contract . good at common law are still required as much as be- fore (d). 17 (ft) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61), s. 3. So of promissory notes, s. 83. (c) lb. s. 17. (d) As to these contracts of executors, 2 Wins. Exors. Pt. 4, Bk. 2, c. 2, I 1. 15 Bank v. Garey, 6 B. Mod. (Ky.) 626; Kennon v. McRae, 7 Port. (Ala.) 175; Beekman v. Wilson, 9 Met. (Mass.) 434. 16 The memorandum must contain all the essential elements of the contract. Bacon v. Daniels, 37 Ohio, 279; Mason v. Decker, 72 N Y. 595; Washington Ice Co. v. Webster, 62 Me. 341; Buck v. Pickwell, 27 Vt. 157. 17 Scearce v. Gall, 82 Ind. 255; Thomas v. Delphy, 33 Md. 373;- Frame v. August, 88 111. 424. 222 FORM OF CONTRACT. Guaranties. p. " Any special promise to answer for the debt de- fault or miscarriages- of another person." On this the principal points are as follows. A prom- ise is not within the statute unless there is a debt &c. of some other person for which that other is to remain liable (though the liability need not be a present one) : for there can be no contract of suretyship or guaranty unless and until there is an actual principal debtor. " Take away the foundation of principal contract, the contract of suretyship would fail " (e). Where the lia- bility, present or future, of a third person is assumed as the foundation of a contract, but does not in fact exist, then, independently of the statute, and on the principle of a class of cases to be explained elsewhere, there is no contract. On the other hand a promise to be primarily liable, or to be liable at all events, whether any third person is or shall become liable or not, is not within the statute and need not be in writing. 18 Whether particu- lar spoken words, not in themselves conclusive, e.g. " Go on and do the work and I will see you paid," [ -^ 159] amount to such a promise or only to a guaranty is -^ a question of fact to be determined by the circumstances of the case (/)." Nor is a promise within the statute unless it is made to the principal creditor: "The statute applies only to promises made to the person to whom another is an- . swerable" (g) or is to become so. A mere promise of indemnity is not within the sta- tute (h), though any promise which is in substance within it cannot be taken out of it by being put in the form of an indemnity (i) (e) Mountstephen v. Lakeman, L. K. 7 Q. B. 196, 202 (in Ex. Ch.) per Willes, J., affd. L. E. 7 H. L. 17 nom. Lakeman r. Mountstephen. . (/ ) See n. (ej, supra (g) Eastwood w...Kenyon, 11 A. & E. 438, 446; concess. Cripps v. Hartnoll, 4 B. & S. 414, 32 L. J. Q. B. 381 (Ex. Ch.). (h) Cripps v. Hartnoll (last note); Wildest. Dudlow, 19 Eq. 198. (i) Cripps v. Hartnoll. 18 A promise to he primarily liable takes the case out of the Statute of Frauds. Parker v. Barker, 2 Met. 423; Wakefield v. Greenwood, 29 Cal. 597; Connerat v. Goldsmith, 6 Ga. 14; Al- drich v. Jewell, 12 Vt. 125; Eddy v. Eoberts, 17 111. 505; Mease v. Wagner, 1 McCord, 395; Olive v. Lewis, 45 Miss. 203; Towns- ley v. Sumrall, 2 Peters, 170. 19 The statute does not invalidate one's oral promise to pay his own debt, though in » form which will work the discharge of "another's." There are cases upon the border line and it is often difficult to distinguish this class from the other classes. Darst v. Bates, 51 111. 439;, Fitzgerald «• Morrissey, 14 Neb. 198; Dows v. Swett, 134 Mass. 140; Milks v. Rich, 80 N. Y. 269. STATUTE OF FRAUDS. 223 A contract to give a guaranty at a future time is as much within the statute as the guaranty itself ( ,;). y. "Any agreement made upon consideration of «aar- Agreements riage." A promise to marry is not within these words upon con- the consideration being not marriage, but the other sideration of par,ty r s reciprocal promise to marry. 20 For further re- mama S e - marks on the effect of this clause see Chapter XII., on Agreements of Imperfect Obligation, infra. In the old books we frequently meet with another sort of difficulty touching agreements of this kind ; it was much doubted whether matrimony were not so purely spiritual a matter that all agreements concerning it must be dealt with only by the ecclesiastical courts; the type of these disputed contracts is a promise by A. to B. to pay B. 10 J. if he will marry A.'s daughter." But this by the way (fc). fa d, "Any contract or sale of lands, tenements, or [ fa 160] hereditaments, or any interest in or concerning them." Interests in This clause is usually and conveniently considered as land - belonging to the topic of Vendors and Purchasers of real estate; and the reader is referred to the well-known works which treat of that subject (I). Questions have (j) Mallet v, Bateman, L. E. 1 C. P. 163 (Ex. Ch.). See further on this clause, 1 Wms. Saund. 229-235, 1 Sm. L. C. 311, note to Birkmyr v. Darnell. Smith, Merc. Law, 456-9 (8th ed.). (I) Such promise may be sued on in the King's Court if by- deed, 22 Ass. 101, pi. 70; otherwise if he had promised 101 with his daughter in marriage, then it should be in the Court Christian ; t Trin. 45 Ed. 3. 24, pi. 30; action good without specialty where the marriage had taken place, Mich. 37 H. 6. 8, pi. 18; contra (not without dissent) Trin. 17 Ed. 4. 4, pi. 4. In Braeton'stime * the exclusive jurisdiction of the spiritual courts appears to have been admitted: "ad forum secalare trahi non debet per id quod minus est et non principale id quod primum et principale est in foro ecclesiastico, ut si ob causam matrimonii pecunia promitta- tur, licet vidaetur prima facie quod cognitio super catallis et debitis pertineat ad forum seculare, tamen propter id quod maius est et digriius trahitur cognitio pecuniae promissae et debitae ad forum ecclesiasticum, et ubi [? ibi] locum non habet prohibitio, cum debitum sit de testament© vel matrimonio:" fol. 175 a. It should be remembered that ordinary debts were still indirectly enforced in the spiritual courts by the imposition of penance. (k) As to an agreement collateral to a demise of land hot being within the statute, see Morgan v. Griffith, L. R. 6 Ex. 70; Ers- kinei). Adeane, 8 Ch. 756; Angell *. Duke, L. R. 10 Q. B. 174. As to the distinction between a demise and a mere licence or agreement for the use of land without any change of possession, Wells v. Kingston-upon-Hn ll, L. R. 10 C. P. 402. m Espy v. Jones, 37 Ala. 379, Allard v. Smith, 2 Met. (Ky.) 279. 21 1 Bishop on Mar. and Div. Sec. 785, 787. 224 FORM OF CONTRACT. Leases. Agreements not to be performed within a year. [ * 161] arisen, however, whether sales of growing crops K and the like were sales of an interest in lands within the 4th section or of goods within the 17th; and these cases are accordingly discussed by Lord Blackburn and Mr. Benjamin in their expositions of the 17th section (l). A sale of tenant's fixtures, being a sale only of the right to sever the fixtures from the freehold during the term, is not within either section (m). By the 1st and 2nd sections of the statute leases for more than three years, or reserving a rent less than two-thirds of the improved value, must be in writing and signed by the parties or their agents authorized in writing, and now by 8 & 9 Vict. c. 106, s. 3, they must be made by deed. But an informal lease, though void as a lease, may be good as an agreement for a lease (w). e, " Any agreement that is not to be performed with- in the space of one year from the making thereof." " Is not to be," not " is not" or " may not be." This means an agreement that on the face of it cannot be performed -fa within a year. An agreement capable of being performed within a year, and not showing any intention to put off the performance till after a year, is not within this clause (o). 23 Nor is an agreement with- in it which is completely performed by one party with- in a year (p). An agreement is not excluded from the operation of the clause by being made determinable on a contingency that may happen within a year (g). 24 (I) Blackburn on the Contract of Sale, 9 — 21 ; Benjamin on Sale, 106—122; Marshall v. Green, 1 C. P. D. 35. And see 1 Wins. Saund. 395. (m) Lee v Gaskell, 1 Q. B. D. 700. (») Dart, V. & P. 1, 198. (o) Smith o. Neale, 2 C. B. N. S. 67, 26 L. J. C. P. 143. (p). Cherry!). Heming, 4 Ex. 631, 19 L. J. Ex. 63. See notes to Peter v. Compton, 1 Sm. L. C. 335. • (q) Eley v. Positive Assurance Co., 1 Ex. D. 20. 22 Marshall v. Furgeson, 23 Cal. 65; Matlock v. Fry, 15 Ind. 483; Bryant v. Crosby, 40 Me. 9. 23 Neither a " reasonable time " nor a lawsuit, necessarily ex- • tends beyond a year and a contract bounded by either need not be in writing. Niagara Fire Ins. Co. v. Greene, 77 Ind. 590; Derrick v. Brown, 66 Ala. 162. 24 An agreement to support during life need not be in writing, for the person may die before the year is ended. Tenn. Coal Co. v. E. R., 12 Heisk. 650; Doesser v. Id., 35 Barb. 573; McCormick v. Drummett, 9 Neb. 384. Neither a promise to work for one while he lives, or an agreement to be performed at the death of one. Frost v. Tarr, 53 Ind. 390. Nor a promise to pay by be- quest for services, or anything else. Fenton v. Emblers, 3 Bur. 1278. Neither an agreement to marry, for it can be fulfilled memoran- dum. 1 STATUTE OF FRAUDS. 225 The seventeenth section of the statute (sixteenth in As to s 17. the Revised Statutes, but it will probably keep its ac- customed name) (r) is extended by Lord Tenterden's Act, 9 Geo. 4, c. 14, s. 7, and as so extended includes all executory sales oE goods of the value of 10Z. and up- wards, whether the goods be in existence or not at the time of the contract. Its effect is thoroughly discuss- ed and explained by Lord Blackburn (on the Contract of Sale, 5 — 119) and in Mr. Benjamin's later work (Book 1, Part 2, pp. 87—229). We will here only re- fer very briefly to the question of what is a sufficient memorandum of a contract within the Statute. Mr. Benjamin exhibits (p. 193, sqq.) the curious difference in the judicial interpretation of the " agreement " of The "note or which a memorandum or note is required by s. 4, and *' the "bargain " of which a note or memorandum is re- ' quired bys. 17. The "agreement" of s. 4 includes the consideration of the contract, so that a writing which omits to mention the consideration does not sat- isfy the words of that section : but the " bargain " of s. 17 does not. So far as regards guaranties, however, this construction of s. 4 having been found inconveni- ent is excluded by the Mercantile Law Amendment Act, 1856, 19 & 20 Vict. c. 97, s. 3. which makes it no longer necessary that the -^j- consideration for a " spe- [ "A" 162] cial promise to answer for the debt default or miscar- . riage of another person " should appear in writing or by necessary inference from a written document (s). The note or memorandum under the 4th as well as the 17th section must show what is the contract and who are the contracting parties (t), but it need be sign- ed only by the party to be charged, whether under the 4th or the 17th section: it is no answer to an action on a contract evidenced by the defendant's signature to (r) The difference arises from the preamble and the enacting part of s. 13 being separately numbered as 13 and 14 in former editions. (s) See also an article by Mr. Justice Stephen and the present writer in the Law Quarterly Review, Jan. 1885, and the notes to Birkmyr ■«. Darnell and Wain v. Warlters. in Sm. L. C. ' \t) Williams v. Byrnes. 1 Moo. P. C. N.'S. 154; Newell v. Rad- ford, L. R. 3 C. P. 52; Williams v. Jordan, 6 Ch. D. 517; and as to sufficiency of description otherwise than by name, Saleu. Lam- bert, 18 Eq. 1 ; Potter v. Duffield, ib. 4; Commins v. Scott, 20 Eq. 11; Beer v. London & Paris Hotel Co., ib. 412; Rossiter v. Miller, 3 App. Ca. 1124; Catling «. King (C. A.), 5 Ch. D. 660. As to what is sufficient description of the property sold under s. 4, Shardlow v. Cotterell, C. A. 20 Ch. D. 90. within a year. Paris v. Strong, 51 Ind. 339; Withers v. Rich- ardson, 5 T. B. Monr. 94. 15 PRINCIPLES OF CONTBACT. 226 FORM OF CONTRACT. say that the plaintiff has not signed and therefore could not be sued, and if a written and duly signed proposal is accepted by word of mouth the contract itself is com- pleted by such acceptance and the writing is a suffi- cient memorandum of it (w). 25 It has also been decided that an acknowledgment of a signature previously made by way of proposal, the document having been altered in the meantime and the party having assented to the alterations, is equivalent to an actual signature of the document as finally settled and as the record of the concluded contract. The signature contemplated by the statute is not the mere act of writing, but the writ- ing coupled with the party's assent to it as a signature to the contract: and the effect of the parol evidence in such a case is not to alter an agreement made between the parties but to show what the condition of the doc- ument, was when it became an agreement between them (x). Moreover it matters not for what purpose [ "^ 163] the signature is -jf added, since it is required only as evidence, not as belonging to the substance of the con- tract. It is enough that the signature attests the docu- ment as that which contains the terms of the con- tract (y). Nor need the particulars required to make a complete memorandum be all contained in one docu- ment: the signed document may incorporate others by reference, but the reference must appear from the writ- ing itself and not have to be made out by oral evidence. 26 In Studds v. Watson, a receipt and a letter, of which the latter did not refer to the former, was held by North, J., to constitute together a sufficient memoran- dum. For in that case there would be no record of a contract in writing, but only disjointed parts of a rec- ord pieced out with unwritten evidence (z). One who is the agent of one party only in the transaction may be also the agent of the other party for the purpose of (it) Smith v. Neale, 2 C. B. N. S. 67, 26 L. J. C. P. 143; Reuss v. Picksley, in Ex. Ch. L. E. 1 Ex. 342. ix) Stewart v. Eddowes, L. R. 9 C. P.- 311. (y) Jones v. Victoria Graving Dock Co., 2 Q. B. D. 314, 323. It may be doubted whether this view of the statute does not tend to thrust contracts upon parties by surprise and contrary to their real intention. (z) See Peirce v. Corf, L. R. 9 Q. B. 210; Kronheim v, John- son, 7 Ch. D. 60; Leather Cloth Co. v. Hieronimus, L. R. 10 Q. B. 140. 2o The memorandum cannot be used to make, but to prove a contract already made. a6 Parol evidence is not admissible to add to. or detract from the terms of the contract. Carter v. Hamilton, 11 Barb. 147; Groat v. Story, 44 Vt. 200. STATUTE OF FRAUDS. 227 signature (a). There is considerable authority (though short of an actual decision) for holding that the Stat- Semble, deeds ute of Frauds does not apply to deeds. Signature is' not withi " unnecessary for the validity of a deed at common law, the statute - and it is not likely that the legislature meant to require signature where the higher and more former solemnity of sealing (as it is in a legal point of view) is already present (6). But as in practice deeds are always sign- ed as well as sealed, and distinctive seals are hardly ever used except by corporations, the absence of a sig- nature would nowadays add considerably to the diffi- culty of supporting a deed impeached on any other ground." The law as to the sale and disposition of personal Bills of chattels is affected, in addition to the Statute of Frauds, SaIe Acts - by the Bills of Sale Acts, 1878 and 1882, 41 & 42 Vict. c. 31, -^ 45 & 46 Vict. c. 43: but the subject is too [ ■*- 164] special to be entered on here Transfers of British^ships are required by the Mer- Transfers of chant Shipping Act, 1854 (s. 55 sqq. ) to be in the form ships and thereby prescribed. Assignments of copyright are di- copyright, rectly or indirectly required by the various statutes on that subject to be in writing (c), and in the case of sculpture by deed attested by two witnesses (54 Geo. 3, c. 56, s. 4). But an executory agreement for an assign- ment of copyright apparently need not be in writing. And informal executory agreements for the sale or mortgage of ships seem now to be valid as between the parties, though under earlier Acts it was otherwise, and it is doubtful whether at common law a sale with- out writing would pass the property (d). There is "An Act to avoid Horse- stealing" of 31 Eliz. Sale of horses c. 12, which prescribes sundry forms and conditions to ln mark et be observed on sales of horses at fairs and markets: over ' (a) As to this, Murphy v. Boese, L. E. 10 Ex. 126. (6) Cherry v. Heming, 4 Ex. 631, .19 L. J. Ex. 630. Black- stone (2. 306, and see note in Stephen's Comm., 1. 510, 6th ed.) assumed signature to be necessary. (c) Leyland v. Stewart, 4 Ch. D. 419, and as to designs Jewitt v. Eckhardt, 8 Ch. D. 404. (d) Maude and Pollock on Merchant Shipping, 4th ed. pp. 42, 55, 56. And see the Amendment Act of 1862, 25 & 26 Vict. c. 63, s. 3. 27 The memorandum need be signed only by the party to be charged. Argus Co. v. Albany, 55 N. Y. 495; Scarlet v. Stein, 40 Md. 512; Beckwitb v. Talbot, 95 U. S. 289. 228 FORM OF CONTRACT. Marine Insurance. [*165] Transfer of Shares. Promise to pay debt barred by Stat, of Limitation. and "every sale gift exchange or other putting away of any horse mare gelding colt or filly, in fair or market not used in all points according to the true meaning aforesaid shall be void." The earlier Act on the same subject, 2 & 3 Phil. & Mary, c. 7, only deprives the buyer of the benefit of the peculiar rule of the common law touching sales in market overt. These statutes are believed to be in practice inoperative. B. Marine Insurances. By 30 Vict. c. 23, s. 7, marine insurances must (with the exception of insurances against owner's liability for certain accidents) be expressed in a policy. -^f But. the words are not so strict as those of the repealed statutes on the same subject, and the prelimi- nary " slip," which in practice though not in law is treated as the real contract, has for many purposes been recognized by recent decisions. These will be spoken of in another place under the head of agreements of Im- perfect Obligation (Chap. XII). C. Transfer of Shares. There is no general principle or provision applicable to the transfer of shares in all companies. But the general or special Acts of Parliament governing classes of companies or particular companies always or almost always prescribe forms of transfer. In cost-book mining companies it seems that no par- ticular form is needed, and an executory contract for the Sale of shares need not as a rule be in writing. It would be useless to enter here into details: the reader will find full information in Lord Justice Lindley's treatise, 1. 703 sqq. Assuming joint-stock partnerships with transferable shares to be lawful at common law (which is the better opinion) their shares should be transferable without writing in the absence of agreement to the contrary. But for reasons elsewhere given this is now of no prac- tical importance. D. Acknowledgment of barred debts. The operation of the Statute of Limitation, 21 Jac. 1, c. 16, in taking away the remedy for a debt may be excluded by a subsequent promise to pay it, or an ac- knowledgment from which such promise can be implied. 28 28 Pope v. Anderson, 90 N. C. 401; Palmer v. Gillespie, 14 Nbrris(Pa.), 340; Hannahs. Hawkins, 5 Lea. 240; Walsh v. Mayer, 111 U. S. 31. STATUTORY FORMS. 229 The promise or acknowledgment if express must be in. writing and signed by the debtor (9 Geo. 4, c. 14, s. 1) or his agent duly authorized ( 19 & 20 Vict. c. 97, s. 13). The subject calls for mention here, especially as the promise or -^ acknowledgment is for some purposes a [ J^- 166] new contract. 29 But we say more of it under the head of Agreements of Imperfect Obligation, Ch. XII. below. A short account of some of the foreign laws which Foreign laws correspond more or less closely to our Statute of Frauds analogous to is given in the Appendix (Note E.). Frauds^ 29 And he is holden by virtue of the old consideration. Abra- hams v. Swann, 18 "W. Va. 274; Norton v. Shepard, 48 Conn. 141; Dean v. Hewitt, 5 Wend. 257; Trumballfl. Tilton, 1 Fost. (N. H.) 128. 230 • CONSIDERATION. [*167] • CHAPTER IV. CONSIDEBATION. Considers- The following description of Consideration was given tion, what by the Exchequer Chamber in 1875: "A valuable con sideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or re- sponsibility, given, suffered, or undertaken by the other" (a). 1 The second branch of this judicial description is really the more important one. Consideration means not so much that one party is profited as that the other abandons some legal right in the present, or limits his legal freedom of action in the future, as an inducement for the act or promise .of the first. It does not matter whether the party accepting the consideration has any actual benefit thereby or not: it is enough that he ac- cepts it,, and that the party giving it does thereby* un- dertake some burden, or. lose something which in con- templation of law may be of value. An act or forbearance of the one party, present or promised, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable. 2 (a) Currie v. Misa, L. E. 10 Ex. at p. 162, per Cur. referring to Com. Dig. Action on the Case, Assumpsit B. I — 15. Cp. Evans, Appendix to Pothier on Obligations, No. 2, and Edgware High- way Board v. Harrow Gas Co. L. E. 10 Q. B. 92, 95; and the definitions of the I. C. A. in Note A, in the Appendix below. 1 U. S. v. Linn, 15 Peters, 290; Dorwin v. Smith, 35 Vt. 69; Dyer v. McPhee, 6 Col. 174; Underhill v. Gibson, 2 N. H. 352; Violett v. Patton, 5 Cranch, 142; Hilton v. Southwick, 17 Me. 303; Hartman v. Shaffer, 21 S. M. 312; Royer?). Keystone Bank, 2 Norris, 248; Evans v. Smith, 4 Bin. 369; Ham v. Van Orden, 84 N. Y. 257; Sands v. Crooke, 46 N. Y. 564; Ecker v. McAllis- ter, 54 Md. 362; Little v. Allen, 56 Texas, 133; Wharton ». Anderson, 28 Minn. 301; Eogers v. Stone Co., 134 Mass. 31; Harnian v. Adams, 120 U. S. 363; Snow v. Hix, 54 Vt. 478; Lydick v. E. E. Co., 17 W. Va. 427; Dawson v. Beall, 68 Ga. 328; Stevenson ?•. Eobertson, 55 Iowa, 689; Duffin v. Eoberts, 9 111. App. 103; Watkins v. James, 5 Jones (N. C), 105. 2 ^Bixler *. Beam, 3 P. & W. 282; Clark v. Eussel, 3 Watts, 213. PAST CONSIDERATION. 231 In the phrase of our mediseval books — a phrase which appears to be peculiar to English usage (a) — there must be quid pro quo. But when the quid is once es- tablished, + the quantum is for the judgment of the [ -fa 168] parties themselves. Tbe law will be satisfied that there is a real and lawful bargain, but it leaves parties to measure their bargains for themselves. In some cases, no doubt, the rule is strained either way. Both as to what is and as to what is not consideration it is possi- ble to bring together illustrations which make the law seem irrational. These matters must be considered presently. The main idea of the law, however, is quite intelligible and reasonable in its ordinary application. An informal and gratuitous promise, however strong Gratuitous may be the motives or even the moral duty on which it promises. is founded, is not enforced by English courts of justice at all. 3 Even a formal promise, that is a promise made by deed, or in the proper technical language a cove- nant, is deprived, if gratuitous, of some of their most effectual remedies. The early history of the law of Consideration is sin- Fluctuations gularly obscure, both, as to its origin and as to the iu . the doc_ manner in which it was developed (b) : and it was a trme " long and gradual process, even in modern times, to settle the doctrine in all points as we now have it. A curious illustration of the extent to which it was left open as late as the last century is furnished by Pillans Pillans v. v. Van Mierop (c). The actual decision was on the Van Mierop. very sound principle (characteristic, as we shall see, of our law) that " any damage to another or suspension or forbearance of his right is a foundation for his under- taking, and will make it binding, though no actual benefit accrues to the party undertaking " (d). 4 But Lord Mansfield threw out the suggestion (which Wil- mot, J. showed himself inclined to follow, though not wholly committing himself to it) that there is no reason why agreements in writing, at all events in commercial affairs, should not be good -^ without any consideration. [ -fa 169] (a) Ducange. knows it only as an English term. (5) The historical discussion which formerly stood here in the text is now transferred to the Appendix. See Note F. (c) 3 Burr. 1664. (A. D. 1765.) (d) Per Yates, J. at p. 1674. 3 A moral obligation may become legally binding through an express promise, which, though generally received at one period in England and the United States, is now generally repudiated 'except in Pennsylvania. Hare on Contracts, 253, Cornell v. Vanartsdalen, 4 Barr. 364; Roscorla v. Thomas, 3Q. B..234. 4 Clark v. Russel, 3 Watts, 213. CONSIDERATION. Promises founded on moral duty: supposed binding till Eastwood v. Kenyon. Past con- sideration ineffectual. [*170] "A nudum pactum does not exist in the usage and law of merchants. I take it that the ancient notion about the want of consideration was for the sake of evidence only ... in commercial cases amongst merchants the want of consideration is not an objection" (e). It is true that this was and has remained a solitary dictum barren of results; its anomalous character was rightly seen at the' time and it has never been followed (/); but the fact that such an opinion could be expressed at all from the bench is sufficiently striking. This sug- gestion of setting up a new class of Formal Contracts (for such would have been the effect) came, as it was, too late to have any practical influence. But if it had occurred a century or two earlier to a judge of anything like Lord Mansfield's authority, the whole modern de- velopment of the English law of contract might have been changed, and its principles might have been (with only minute theoretical differences) assimilated to those of the law of Scotland. Another point of great importance remained open even in practice down to a much later time. The an- omalous doctrine that the existence of a previous moral obligation is enough to support an express promise was held by eminent judges a few generations back, and was overruled only in 1840 by the decision of the Exche- quer Chamber that "a mere moral obligation arising from a past benefit Dot conferred at the request of the defendant" is not a good consideration (g).* A ques- tion still not free from uncertainty is whether a past benefit is in any case a good -^ consideration for a sub- sequent promise. 6 On principle it should not be (h). ~le) 3 Burr. 1669—70. (/ ) In 1778 it was distinctly contradicted by the opinion of the Judges delivered to the House of Lords in Rann v. Hughes, 7 T. R. 350, n; "All contracts are, by the laws of England, dis- tinguished into agreements by specialty and agreements by parol; nor is there any such third class, as some of the counsel have endeavored to maintain, as contracts in writing." Prof. Lang- dell ingeniously argues (Summary, \\ 49, 50) that contracts gov- erned by the law merchant ought on principle to need no con- sideration; but his argument is, as he himself admits, against the whole current of authority and opinion for at least a century. (g) Eastwood v. Kenyon, 11 A. & E. 438, 446. (li) Cp. Langdell, op. cit. \ 91. 6 Dodge v. Adams. 19 Pick. 429; Nine v. Starr, Oregon, 49; McElvan v. Sloan, 56 Oa. 208; Ehle e. Judson, 24 Wend. 97; TJpdyke v. Titus, 2 Beasley, 151; and see Edwards v. Nelson, 51 Mich. 121; Stebbins v. Crawford, 11 Norris (Pa.), 289. 6 Snow v. Hix, 54 Vt. 478; Tomlinson v. Smith, 2 Iowa, 39; Loomis v. Newhall, 15 Pick. 159 and Young v. Hill, 67 N. Y. 162; Shealey v. Toole, 56 Ga. 210. PAST CONSIDERATION. 233 For the past service was either rendered without the promisor's consent at the time, or with his consent but without any intention of claiming a reward as of right, in neither of which cases is there, any foundation for a contract (*); or it was rendered with the promisor's consent and with an expectation known to him of re- ward as justly due, in which case there were at once all the elements of an agreement for reasonable reward. It is said, hdwever, that services rendered on request, Supposed no definite promise of reward being made at the time, exceptions: are a good consideration for a subsequent express Lampleigh v. promise in which the reward is for the first time de- Brathwait - fined. 7 But there is no satisfactory modern instance of this doctrine, and it would perhaps now be held that the subsequent ^promise is only evidence of what the parties thought the service worth (fc). It is also said Performance that the voluntary doing by one party of something ° f another's which the other was legally bound to do is a good con- eg dutv - sideration for a subsequent promise of recompense. But the authority for this proposition is likewise found to be unsatisfactory. Not only is it scanty in quantity, but the decisions, so far as they did not proceed on the now exploded ground that moral obligation is a suffi- cient consideration, appear to rest on facts establishing an actual tacit contract independent of any subsequent promise. Another exceptional or apparently exceptional case Acknowleds- which certainly exists is that of a debt barred by the me ntof ■^f Statute of Limitation, on which the remedy may be barred debts, restored by a new promise on the debtor's part. 8 The [ ^ 171] (£) "It is not reasonable that one man should do another a kindness, and then charge him with a recompense. " 1 Wms. , Saund. 356. (fc) Lampleigh v. Brathwait, Hob. 105, and 1 Sin. L. C. ; see per Erie, C. J., 13 C. B. N. S. at p. 740. The case of Bradford v. Roulston, decided by the Irish Court of Exchequer in 1858, will, for English lawyers at least, hardly outweigh this dictum. At an earlier time there was a difference between debt and as- sumpsit in this respect; it was held that a past consideration would not support an action of debt, but (on the theory that in assumpsit the contractual relation of the parties was not the cause of action, but only a sort of inducement of it) that it was enough for assumpsit. Marsh v. Rainsford, 2 Leon. Ill, Siden- ham o. Worlington, ib. 224; O. W. Holmes, The Common Law, 286, 297. 7 If a thing is done at the request of the promisor it will sus- tain the promise. See Allen v. Woodward, 2 Fost. (N. H.) 544; Bishop on Contracts, Sec. 91. 8 A mere acknowledgement of a debt will suffice to take it out of the Statutes of Limitations, but an acknowledgement coupled with a disclaimer will not. Walsh v. Mayer, 111 U. S. 31; Elder 234 CONSIDERATION. theory is that the legal remedy is lost but the debt is not destroyed, and the debt subsisting in this dormant condition is a good consideration for a new promise to pay it. This is not logically satisfying, for obviously there is no real equivalent for the new promise, and the only motive that can generally be assigned for it is the feeling that it would be morally wrong not to pay. It would be better to say at once that the law of limita- tion does not belong to substantive law at all, but is a special rule of procedure made in favour of the debtor, who may waive its protection if he deliberately chooses to do so (I). Historically the truth of the matter seems to be that suitors and judges have made attempts in various di- rections to strain legal principle for the purpose of mak- ing people fulfil promises or pay for services which could not easily be said to have been really contracted for, but which also represented benefits they were never intended to have for nothing. These attempts were in part favoured by the confused. and fictitious manner in which all quasi- contractual transactions were treated; request, consideration, and promise having become, in- stead of the names of real facts, counters for plead- ers to play with. In many cases the enterprise failed, in some it succeeded. The residue of successes ap- pears in a few anomalous rules still laid down by the text-writers (m). The Indian Contract Act (s. 25) (n) has not only (I) See more on this point in Ch. XII. (m) This topic is excellently discussed by Sir W. E. Anson (Principles of the English law of Contract, 91-98). (») An agreement made without consideration is void, unless (1) It is expressed in writing and registered under the law for the time being in force for the registration of assurance, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless • (2) It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the "promisor, or something which the promisor was legally compellable to do; or unless (3) It is a promise made in writing, and" signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt o/ which the creditor might have enforced payment but for the lav for the limitation of suits. In any of these cases, such an agreement is a contract. v. Dyer, 26 Kanses, 604; Pope v. Andrews, 90 N. C. 401; Palme* v. Gillespie, 14 Norris, 340; Ross v. Id., 20 Ala. 105. As to an acknowledgement that the debt remains due, see Deshon v. Eaton, 4 Greenl. 413; Weston v. Hodgkins, 136 Mass. 326; Banks u Hall, 2 Pick. '368. AMOUNT IMMATERIAL. 235 if preserved but extended the rules of English law as [ + 172] to the validity of promises to give a recompense for benefits already received. But it has rightly discarded the fiction of a past consideration, and treats these rules as positive exceptions to the principle that an agree- ment' made without consideration is void. It keeps, however, the doubtful doctrine that a consideration exe- cuted on actual request will support a subsequent ex- press promise (s. 2, subs. d). Throughout our authorities it is treated as an "ele- Adequacy of mentary principle that the law will not enter into an consideration inquiry as to the adequacy of the consideration" (o). 9 pot inquired The idea is characteristic not only in English positive l ' law but in the English school of theoretical jurispru- dence and politics. Hobbes says: "The value of all things contracted for is measured by the appetite of the contractors, and therefore the just value is that which they be contented to give " (p). 10 And the legal rule is of long standing, and illustrated by many cases. " When a thing is to be done by the plaintiff, be it never so small, this is a sufficient consideration to ground an action " (q). n " A. is possessed of Blackacre, to which B. has no manner of right, and A. desires B. to release him all his right to Blackacre, and promises him in con- sideration thereof to pay him so much money; surely this a good consideration and a good promise, for it puts B. to the trouble of making a release " (r). The following are modern examples. If a man who owns two boilers allows another to weigh them, this is a good consideration for that other's promise to give them up after such weighing in as good con- Co) Westlake v. Adams, 5 C. B. N. S. 248, 265. 24 L. J. C. P. 271, perByles, J. (p) Leviathan, pt. 1, c. 15. (q) Sturlyns. Albany, Cro. Eliz. 67, and seeCro. Car. 70, and marginal references there, (r) Holt, C. J. 12 Mod. 459. 9 Schnell v. Nell, 17 Ind. 29; Catesu. Bales, 78 Ind. 285; Per- kins v. Clay, 54 N. H. 518; Williams v. Jensen, 75 Mo. 681; Worth v. Case, 42 N. Y. 362; Giddings v. Giddings Adm., 51 Vt. 227; Haines v. Haines, 6 Md. 435; Merriman v. Lacefield, 4 Heisk. (Tenn.) 209; George v. Eichardson, Gilm. (Va.) 230; Knobb v. Lindsay, 5 Ohio, 471; Talbot v. Hooser. 12 Bush. (Ky.) 408. 10 " It is enough that there is actually a consideration, that such consideration is legal, and that it has some value." C. J. Tindal in Hitchcock v. Coker, 2 A. & E. 438. 11 If there by any consideration' the court will not weigh the extent or value of it. Hare on Contracts, 199; Downing v. Funk, 5 Eawle, 69; Hind v. Holdship, 2 Watts, 104. 236" CONSIDERATION. dition as before. " The defendant " said Lord Den- [ ^ 173] man, " had some reason for wishing to weigh -fa the boilers, and he could do so only by obtaining pe'rmis sion from the plaintiff, which he did obtain by promis- ing to return them in good condition. We need not inquire what benefit he expected to derive" (s). u So parting with the possession of a document, though it had not the value the parties supposed it to have (t), and the execution of a deed (ii), though invalid for want of statutory requisites (x), have been held good con- siderations. 13 In the last-mentioned case the justice of the decision was very plain: the deed was an ap-" prenticeship indenture which omitted to set forth par- ticulars required by the statute of Anne then in force (y) : the apprentice had in fact served his time, so that the benefit of the consideration had been fully enjoyed. In like manner a licence by a patentee to use the patented invention is a good consideration though the patent should tqrn out to be invalid (z). In the Supreme Court of the United States a release of a supposed right of dower, which the parties thought necessary to con- firm a title, has been held a good consideration for a promissory note (a). The modern theory of the obli- gation incurred by a bailee who has no reward is that the bailor's delivery of possession is the consideration for the bailee's promise to keep or carry safely. The bailor parts with the present legal control of the goods; and this is so far a detriment to him, though it may be no benefit to the bailee, and the bailee's taking the goods (s) Bainbridge v. Firmstone, 8 A. & E. 743. (t) Haigh v. Brooks (Q.'B. and Ex. Ch.), 10 A. & E. 309, 320, • 334. Or letting the promisor retain possession of a document to which the promisee is entitled: Hart v. Miles, 4 C. B. N. S. 371, 27 L. J. C. P. 218. («) Cp. Jones v. Waite, 9 CI. & F. 101. (a;) See note (o). p. 172. (y) 8 Ann. c. 5 (9 in Ruffh.) rep. Inland Revenue Repeal Act, 1870, 33 & 34 Vict. c. 99. See now the Stamp Act, 1870, 33 & 34 Vict. c. 97, s. 40. (z) Laws v. Purser, 26 L. J. Q. B. 25. Also reported in C. E. & B. 930. (a) Sykes v. Chadwick, 18 Wallace, 141. 12 Hathaway v. Winneshic, 30 Iowa, 596; Ford v. "Ward, 26 Ark. 360; Harkinson v. Dry Placer Co., 6 Cal. 269; Jones v. Wood, 77 Pa. St. 371; Elder v. Hood, 38 111. 533; Ensey t. Hines, 30 Kan. 704. 13 There is no difference in the rule as to consideration between an oral and written contract;. Thatcher v. Dinsmore, 5 Mass. 301; Doehler v. Waters, 30 Ga. 344; Cutlers Everett, 33 Me. 201; Bailey v. Freeman, 4 Johns. 280. MUTUAL PROMISES. 237 is foT the bailor's use and convenience (6). Decided cases Same rule in in equity to the same effect are not wanting. It has e 1 uit y- been held that a transfer of railway shares on which nothing -fc has been paid is a good consideration (c ) ; and [ ^ 174] that- if a person indebted to a testator's estate pays the probate and legacy, duty on the amount of the debt, this is a good consideration for a release of the debt by the residuary legatees (d): a strong case, for this view was an afterthought to support a transaction which was in origin and intention certainly gratuitous, and in substance an incomplete voluntary release; the pay- ment was simply by way of indemnity, it being thought not right that the debtor should both take his. debt out of the estate and leave the estate to pay duty on it. The consent of liquidators in a voluntary winding-up to a transfer of shares is a good consideration for a guaranty by the transferor for the payment of the calls to become due from the transferee (e). An agreement • to continue — i. e. not to determine immediately — an existing service terminable at will, is likewise a good consideration (/). The principle of all these cases may be summed up in the statement made in so many words by the judges in more than one of them, that the promisor has got alj that he bargained for. There has been another rather peculiar case in equity which was to this effect. An agreement is made between a cred- itor, principal debtor, and surety under a continuing guaranty, by which no new undertaking is imposed on. the surety, but additional remedies are given to the creditor, which he is to enforce if requested to do so by the surety. Held that if by his own negligence the creditor deprives himself of the benefit of these remedies, ' the surety is discharged. The real meaning of what is there said about consideration seems to be that, as be- tween the creditor and the surety, it is not material (g). Contingent It has been suggested that on a similar ^ principle [^175] . . considera- (6) O. "W. Holmes, The Common Law, 291 sqq. Historically tion. the explanation is different, ib. 196. (e) Cheale », Kenward, 3 DeG. & J. 27. (d) Taylor v. Manners, 1 Ch. 48, by Turne*r, L. J. dub. Knight Bruce, L. J. (e) Cleve v. Financial Corporation, 16 Eq. 363, 375. (/) Gravely v. Barnard, 18 Eq. 518. (g) "Watson v. Allcock, 4 D. M. G. 242. The guaranty was % determinable by notice from the surety, and it was suggested by way of supplying anew consideration that on the faith of the creditor's increased remedy the surety might in fact have ab- stained from determining it. But. surely this will not do: the true ground is the creditor's original duty to the surety, which covers subsequently acquired rights and remedies. 238 CONSIDERATION. Inadequacy plus other things in Equity: see Chap. XI. Reciprocal promise as considera- tion. Must be possible: qu, extent of rule. [•176] the consideration for a promise may be contingent, that is, it may consist in the doing of something by the promisee which he need not do unless he chooses, but which, being done by him, the contract is complete and the promise binding. But no such doctrine is necessary. If a tradesman agrees to supply on certain terms such goods as a customer may 'order during a future period, the better opinion is that this is not a promise, but an offer. He cannot sue the customer for not ordering any goods, but if the customer does order any the con- dition of the offer is fulfilled, and the offer being thus accepted, there is a complete contract which the seller is bound to perform (h). Inadequacy of consideration coupled with other things may however be of great importance as evidence of fraud or the like, when the validity of a contract is in dispute:" and it has been considered (though the bet- ter opinion is otherwise) to be of itself sufficient ground for refusing specific performance. This subject . will be examined under the head of Undue Influence, Ch. XL, post. Reciprocal promises may. be, and in practice con- stantly are, the consideration for one another, and so constitute a binding contract. 15 It is said that in order to be a good consideration a promise must be a promise to do something which the promisor has the means of performing; but this proposition, though affirmed by an" authority little short of judicial (i), is unwarrantably wide. 16 The true limitation, it is submitted, is that the thing promised must be in itself possible, and such as the promisor is legally competent to perform ; this last point is what the cases cited for the • general state- ment really go to show, though certairly there are some' (h) G. N. Ry. Co. v. Witham, L. R. 9 C. P. 16. Cp. Chicago & G. E. Ry. Co. ii Dane, 43 N. Y. (4Hand) 240, where it was rightly held that a general assent to an offer of this kind (not undertaking to order, or as in the particular case tender to be carried, any definite quantity of goods) did not of itself consti- tute a contract. (t) 2 Wins. Saund. 430. 14 Great inadequacy, is a suspicious element which suggests fraud and the inadequacy when coupled with other circumstances may be so great as to vitiate the contract. Haines v. Haines, 6 Md. 435; Comstock v. Purple, 49 111. 158; Hallett v. Collins, 10 How. (U. S.) 174; White v. Flora, 2 Tenn.426; Osgood?). Frank- lin, 2 Johns. Ch. 1; Odineal v. Barry, 24 Miss. 9. 15 Lampleigh v. Bratwait. Hobart, 105; Pattern ». Hassinger, 19 P. F. Sm. 311; Goward 'v. Waters, 98 Mass. 596; Loring v. Boston, 7 Met. 409; Oldershaw v. King, 2 H. & N. 517. 16 See Hare on Contracts, 176. PROMISES TO PERFORM EXISTING DUTY. 239 dicta much more largely expressed (fc). In this form the proposition is completely covered by the general law touching impossible and unlawful agreements, and we know of nothing that requires us to lay down any wider rule as part of the distinct learning of considera- tion. There is certainly no general rule that a promise cannot be sued on unless the promisor had in fact the means of performing it when he made it; and if we said that the undertaking of a legal liability is not to be deemed a consideration unless the liability be sub- stantial, we should be setting up in another shape the often exploded supposition that the adequacy of the consideration can be inquired into. 17 It is certain however that a promise which is to be Must be a good consideration for a reciprocal promise must be enforceable, such as can be enforced; it must therefore be not only lawful and in itself possible, but reasonably definite. 18 Thus a promise by a son to his father to leave off mak- ing complaints of the father's conduct in family affairs is no good consideration to support an accord and sat- isfaction, for it is too vague to be enforced ( I). And upon a conveyance of real estate without any pecuniary con- sideration a covenant by the grantee to build on the land granted such a dwelling-house as he or his heirs shall think proper is too vague to save the conveyance from being voluntary within 27 Eliz. c. 4 (m). For the same reason, neither the promise to do a Must not thing nor the actual doing of it will be a good consid- be of a eration if it is a thing which the party is already bound thing on e to do either by the general law or by a subsisting con- ^ a *^? a y tract with the other -^ party (w). 19 It is obvious that r ,jl. 177] (k) Haslam v. Sherwood, 10 Bing. 540; Nerot v. Wallace, 3 T. E. 17, where the dicta of Lord Kenyon, C. J. and Ashhurst, J., are those meant in the text. Buller and Gross, J J. confined their judgments to the true ground of the case, tc'z: that the agreement then in question was illegal as beingagainst the policy of the bankrupt laws. , (I) White v. Bluett, 23 L. J. Ex. 36: this seems the ratio deci- dendi, though so expressed only by Parke, B. who asked in the course of argument, "Is an agreement by a father in considera- tion that his son will not bore him a binding contract?'' (m) Rosher v. Williams, 20 Eq. 210. \n) See Leake, 618; and, besides authorities there given, Dea- 17 Walker v. Tucker, 70 111. 527; 1 Chitty on Contracts, (11th Am. Ed.) 1074. 18 If a usual and advantageous means of performance which the parties contemplated fails it will not be a defence unless it is specified in the contract. Hand v. Baynes, 4 Wharton, 204; Engster v. West, 35 La. An. 119; McDonald 0. Gardner, 56 Wis. 35. 19 Burr«. Wilcox, 13 Allen, 269; Hare on Contracts, 216. 240 CONSIDERATION. generally or an express promise by A. to B. to do something which the promisee jj can a l rea( iy ca n on lii m to do can in contemplation of law produce no fresh advantage to B. or detriment to A. But the doing or undertaking of anything be- yond what one is already bound to do, though of the same kind and in the same transaction, is a good consid- eration. A promise of reward to a constable for ren- dering services beyond his ordinary duty in the discov- ery of an offender is binding (o): so is a promise of extra pay to a ship's crew for continuing a voyage after the number of hands has been so reduced by ac- cident as to make the voyage unsafe, so that the crew are not bound to proceed under their original arti- cles (p). Again there will be consideration enough for the promise if an existing right is altered or in- creased remedies given. Thus an agreement to give a debtor time in consideration of his paying the same in- terest that the debt already carries is inoperative, 20 but an agreement to give time or accept reduced interest in consideration of having some new security would be good and binding. 21 The common proviso in mortgages for reduction of interest on punctual payment — i. e., payment at the very time at which the mortgagor has covenanted to pay it — seems to be without any consid- eration; and it is conceived that if not under seal such proviso could not be enforced (q). Again the rule does not apply if the promise is in the nature of a compro- mise, that is if a reasonable doubt exists at the time whether the thing promised be already otherwise due or not, though it should be afterwards ascertained that it was so. 22 The reason of this will be more conveniently explained, so far as it needs explanation, when we speak presently of forbearance as a consideration. [ -fa 178] "A" I n the case where the party is already bound to do con v. Gridley, 15 C. B. 295, 24 L. J. C. P. 17, and the judgment on the 7th plea in Mallalieu v. Hodgson, 16 Q. B. 689, 20 L. J. Q. B. 339. (o) England v. Davidson, 11 A. & E. 856.' (p) Hartly v. Ponsonby, 7 E. & B. 872, 26 L. J. Q.B. 322. (q) This could be at once provided against, however, if so de- sired, by fixing the times for ''punctual payment" a single day earlier than those named in the mortgagor's covenant. 20 Freeman v. Boynton, 7 Mass. 483; N. H. Bank v. Colcord, 15 N. H. 119; Martin v. Black, 20 Ala. 309. 21 Wheeler v. Washburn, 2 Am. Leading Cases (5th Ed.), 469; Bailey v. Adams, 10 N. H. 162; Russell *. 'Buck, 11 Vt. 166; Chute v. Pattee, 37 Me. 102; Grafton Bank v. Woodward, 5 N. H. 99. 22 Jones v. Eittenhouse, 87 Ind. 348; Payne v. Bennett, 2 Watts. 427; Davisson v. Ford, 23 W. Va. 6. PROMISE TO PERFORM CONTRACT WITH THIRD PERSON. 24.1 the same thing, but only by contract with a third per- Promise of a son, there is some difference of opinion. The new prom- tnin S one is ise purports to create a new and distinct right, which, y°. u ^ d '"" if really created, must always be of some value in law, to do. and may be of appreciable value in fact. B. may well be much interested in A.'s performing his contract with C, but yet so that the circumstances which give him an interest in fact do hot give him any interest which he can assert in law. The power to claim A 's performance in bis own right will then be valuable to him, and why may he not entitle himself to it by contract, and bind himself to pay for it? This opinion has been expressed and acted on in the Court of Exchequer (r), and seems implied in the judgment of the majority of the Court of Common Pleas in a case decided some weeks earlier (s), which affords a curious modern example of a class of agreements already mentioned as having in former times given rise to much litigation and even to conflicts of jurisdiction. An uncle wrote to his nephew in these terms: " I am glad to hear of your intended marriage ghadwell s. with E. N. ; and as I promised to help you at starting I Shadwell. am happy to tell you that I will pay to you one hundred and fifty pounds yearly during my life," subject to a contingency not material to be now stated. The mar- riage took place, and for several years this annuity was paid; after which it fell into arrear, the uncle died, and the nephew sued his executors. It was pleaded amongst other things that the marriage was not at the testator's request and that there was no consideration for the prom- ise. Erie, C. J. and Keating, J. held (but without say- ing in terms that the existence of the engagement to marry at the date of the uncle's promise could make no difference) that on the whole the marriage must be taken to have been at the testator's request, and so was a suffi- ■jf dent consideration. Byles, J. dissented, thinking that [ -^ 179] as no express request appeared, so none could be im- plied, for the nephew was already bound to the marriage and the uncle knew it: he stated the rule to be that a promise to do what one is already bound, though only to a third person, to do, cannot be a consideration (t); (r) Scotson v. Pegg, 6H.&N. 295, 30 L. J. Ex. 225. (s) Shadwell v. Shadwell, 9 C. B. N. S. 159, 30 L. J. C. P. 145. Sed qu. as to the decision on the facts. (t) And so thought some of the judges in Jones v. "Waite, 5 Bing. N. C. 341, 351, 356. But the actual decision there (ib. 9 CI. & F. 101) would be a clear authority the other way, had it not been assumed at the time that an agreement to execute asep- aration deed could not be directly enforced. 16 PRINCIPLES OF CONTRACT. 242 CONSIDERATION. Rules as to considera- tion extend- ed to the discharge of contracts. [•180] and he seemed disposed to treat it as a matter of publio policy. The reasoning of these cases assumes that a promise to A. to perform an existing duty to B. is itself enforce- able by A., which is not clear on principle, and has not been directly decided. Perhaps the best explanation is that the promise to perform an existing contract with B. is to be read as being or including a promise not to exercise the right of rescinding it with B.'s consent (u). The doctrine of Consideration has been extended with not very happy insults beyond its proper scope, which is to govern the formation of contracts, and has been made to regulate and restrain the discharge of contracts. For example, where there is a contract of hiring with a stipulation that the wages due shall be forfeited in the event of the servant being drunk, a promise not under seal to pay the wages notwithstanding a forfeiture is not binding without a new consideration (a;). It is the rule of English law that a debt of 100Z. may be per- fectly well discharged by the creditor's acceptance of a beaver hat or a peppercorn, or of a negotiable instru- ment for a less sum (y), at the same time and place at which the 100Z. are payable, or of ten shillings at an earlier day or at another place, but that nothing less than a release under seal will make his acceptance of 99Z. in money at the same time and place a good dis- charge (z) : although modern decisions have con- ■jt fined this absurdity within the narrowest possible limits (a). 23 A judgment creditor agreed in writing with the debtor to take no proceedings on the judgment in consideration of immediate payment of part of the debt and payment of the residue by certain instalments; here there was no legal consideration for the creditor's promise, and he was entitled to claim interest on the («) Ansom. p. 87. (a;) Monkman n. Shepherdson. 11 A. & E. 411. (y) Goddard v. O'Brien, 9 Q. B. D. 37. (z) Pinuel'sca. 5 Co. Rep. 117, confirmed with reluctance by- the House of Lords in Foakes v. Beer, 9 App. Co. 605, Lord Blackburn all but dissenting. The Indian Contract Act (s. 63, illust. b) is accordingly careful to 'express the contrary. The rule in Pinnel's case, it may be noted, though paradoxical, is not anomalous. It is the strictly logical result of carrying out a general principal beyond the bounds within which it is reason- ably applicable. (o) See the Notes to Cumber v. Wane in 1 Sm. L. C. 23 Singleton v. Thomas, 73 Ala. 205; Earl v. Peck, 64 N. Y. 506; 1 Smith's Leading Cases (8th Am. Ed.), 640. - FORBEARANCE. 243 debt though the whole df the principal was paid accord- ing to the agreement (6). If it is agreed between creditor and debtor that the The con, duty shall be performed in some particular way differ- sideration for ent from that originally intended, this may well be bind- variation of ing : for the creditor's undertaking to do something con racM * different though only in detail from what he at first un- dertook to do, or even relinquishing an option of doing it in more ways than one, would be consideration enough, and the Court could not go into the question whether it gave any actual advantage to the creditor. 24 But if the new agreement amounts to saying that the debtor shall at his own option perform the duty as at first agreed upon or in some other way, it cannot be binding with- out a new consideration : as where an entire sum is due, and there is an agreement to accept payment by instal- ments, this would be good, it seems, if the debtor under- took not to tender the whole sum : but in the absence of anything to show such an undertaking, the agree- ment is a mere voluntary indulgence, and the creditor remains no less at liberty to demand the whole sum than the debtor is to pay it (c). The loss or abandonment of any right, or the forbear- Loss or for* ance to exercise it for a definite or ascertainable time, bearance of is for obvious reasons as good a consideration as actually ri g h ^ as doing -^- something. 25 In Mather v. Lord Maidstone (d) t j the loss of collateral rights by the promisee supported r jl. jgll a promise notwithstanding that the main part of the consideration failed. The action was on a bill of ex- change. This bill was given and indorsed to the plain- tiff as in renewal of another bill purporting to be ac- cepted by the defendant and indorsed to the plaintiff. The plaintiff gave up this first bill to the defendant ; thirty days afterward it was discovered that it was not really signed by the defendant : yet it was held that he (b) Foakes v. Beer, supra. (c) McManus v. Bank, L. E. 5 Ex. 65. Cp. Foakes v. Beer, supra. (d) 18 C. B. 273, 25 L. J. C. P. 300. 2 * It is conceded by some of the tribunals in the United States, that an executory parol contract may be dissolved or varied be- fore breach by an agreement to that effect without any new con- sideration. This involves the idea that if a person who has en- tered into a contract declares that he will not fulfil it as it stands, nor unless his demands are satisfied, and the other party assents the new agreement will supersede the old. Holmes v. Doane, 9 Cush. 135; Wilgus'n. Whitehead, 6 W. N. of C. 537. 26 Downing v. Funk, 5 Eawle, 69 ; Clark v. Bussel, 3 Watts. 213. 244 CONSIDERATION. - Forbear- ance to sue: must be for definite or ascertain- able time. There must be an actual or bona fide disputed right. [*182] Why com- promises are binding. was liable od the second bill, for the plaintiff had lost his remedy against the other parties to the first bill during the time for which he had parted with the pos- session of it, and that was consideration enough. As to forbearance, the commonest case of this kind of consideration is forbearing to sue. The forbearance or promise of it must be, as we said, for a definite or as- certainable time in order to be a good consideration. Forbearance for a reasonable time is enough, for it can be ascertained as a question of fact what is a reasonable time in any given case: and an undertaking in terms which are in themselves vague, such as " forbearing to press for immediate payment," may be construed by help of the circumstances and context as meaning forbearance for a reasonable time (e). 26 That which ,is forborne must also be the exercise or enforcement of some legal or equitable right which is at least reasonably believed to exist. 27 This is simply the converse of a rule already given. As a promise by A. to B. is nanght if it is only a promise to do some- thing A. is already bound, either absolutely or as against B., to do. so it is equally worthless if it is a promise not to do something which B. can already, as a matter either of public -fa or of private right, forbid A. to do. Such is the theoretical expression of the rule, if we assume the existing rights of the parties to be known: but as in practice they often are not known, but depend on questions of law or of fact, or both, which could not be settled without considerable trouble, common sense and convenience require that compromises of doubtful rights should be recognized as binding, and they constantly are so recognized. Unless we chose to treat these as an exception, which would be absurd, the statement must be modified thus: A promise by A. to B. not to do some thing or to prosecute some claim is not a good consid- eration if A. knows, or as a reasonable man ought to know, that the thing is one which B. can already forbid him to do, or that the claim has no foundation. A mere belief that a right exists is not enough ; the claim (e) OldershawD. King (Ex. Ch.), 2 H. & N. 517, 27 L. J. Ex. 120, and see 1 Wras. Saund. 225. The case of Alliance Bank v. Broom, 2 Dr. & Sm. 289, which at first sight looks like a de- cision that a promise to forbear suing for no time in particular is a good consideration, is perhaps to be supported on this ground. 26 King v. Upton, 4 Greenl. 387; Allen v. Pryor, 3 A. K. Marsh, 305; but seen Mantor v. Churchill, 127 Mass. 31; Boyd». Freize, 5 Gray, 553. 27 Hare on Contracts, 204, and Hamaker v. Eberly, 2 Binney 509. RDLES OF EQUITY. 245 must be such as the parties could reasonably regard as serious (/). 28 This rule applies in the case (which apart from au- thority might possibly aeem doubtful) where the claim given up is on a disputed promise of marriage (gf). The real consideration and motive of a compromise, as well in our law as in the civil law and systems derived from it, is not the sacrifice of a right but the abandonment of a claim (fe). A partial compromise in which the under- taking is not simply to stay or not to commence legal proceedings, but to conduct them in some particular manner or limit them to some particular object, may well be good; but here again the forbearance must re- late to something within the proper scope of such pro- ceedings. A promise to conduct proceedings in bank- ruptcy so as to injure the debtor's credit as ~fc little as [ -^j- 183] possible is no consideration, for it is in truth merely a promise not to abuse the process of the Court («"). The main end and use of the doctrine of Considera- Reaction of tion in our modern law, whatever may have been its the general precise origin, is to furnish us with a reasonable and j^octrine of comprehensive set of rules which can be applied to all ^J.-*^' . informal contracts without distinction of their character tracts under or subject-matter. Formal contracts remain, strictly seal, speaking, outside the scope of these rules, which were not made for them, and for whose help they had no need. But it was impossible that so general and so useful a legal conception as that of Consideration should not make its way into the treatment of formal contracts, though with a different aspect. The ancient validity of formal contracts could not be amplified, but it might be restrained: and in fact both the case-law and the legislation of modern times show a marked tendency to cut short if not to abolish their distinctive privileges, and to extend to them as much as possible the free and rational treatment of legal questions which (/) See per Brett, L. J. in Ex parte Banner, 17 Ch. D. at p. 490, commenting on Callisher v. BischofFsheirn, L. E. 5 Q. B. 449, 452, per Cockburn, C. J., where the language used is too ■wide. But the decision in Callisher v. Bischoffsheim seems right, • for the plea there was consistent with the claim on which the agreement was founded having been a plausible one. (ff) Keenan v Handley, 2 D. J. S. 283. (h) Trigge v. Lavall6e, 15 Moo. P. C. 271, 292 (a case from Lower Canada, then under old Fr. law) ; Wilby v. Elgee, L. E. 10 C. P. 497. (i) Bracewell v. Williams, L. E. 2 C. P. 196. 28 Rice v. Bixler, 1 W. & S. 445; Wadeu. Simeon, 2C. B. 548. 2,46 CONSIDERATION. Most con- spicuous in Equity. [•184] No sphcific performance of voluntary agreement though by deed. But existence of considera- tion may be shown aliunde. has been developed in modern times by the full recog- nition of informal transactions. This result is mainly due to the action of the Court of Chancery. A merely gratuitous contract under seal is enforceable at common law (with some peculiar ex- ceptions) unless it can be shown that behind the ap- parently gratuitous obligation there is in fact an un- lawful or immoral consideration. Courts of equity did not, in the absence of any /special ground of invalidity, interfere with the legal effect of formal instruments: but they would not extend their special protection and their special remedies to agreements, however formal, made without consideration.. A voluntary covenant, though under seal, " in equity, where -^ at least the covenantor is living (k), or where specific performance of such a covenant is sought, . . stands scarcely, or not at all, on a better footing than if it were contained in an instrument unsealed " (I). And this restriction is not affected by the union of legal and equitable juris- diction in the High Court of Justice. The rule that a court of equity will not grant specific performance of a gratuitous contract is so well settled that it is need- less to cite further authorities for it: and it is not to be overlooked that whereas the other rules that limit the application of this peculiar remedy are of a more or less discretionary kind, and founded on motives of con- venience and the practical requirements of procedure rather than on legal principle, this is an absolute and unqualified rule which must be considered as part of the substantive law. It is the practice of equity, however, at all events when the want of consideration is actively put forward as an objection (and the practice must be the same, it is conceived, when the objection is made by way of de- fence in an action for specific performance) to admit evidence of an agreement under seal being in fact founded on good consideration, where the deed ex- presses a nominal consideration (m) or no considera- tion at all (w), though (save in a case of fraud or ille- — — — — 1^ (k) We shall see under the head of undue influence that a sys- tem of presumptions has been established which makes it diffi- cult in many cases for persons claiming under a voluntary deed to uphold its validity if the dnnor, or even his representatives, • choose within any reasonable time afterwards to dispute it. (I) Per Knight Bruce; L. J., Kekewich v. Manning, 1 D. M. G. 176, 188. (m) Leifchild's ca. 1 Eq. 231. (n) Llannelly Ey. & Dock Co. v. L. & N. W. Ey. Co., 8 Ch. 942. RULES OF EQUITY. 247 gality) a consideration actually inconsistent with that expressed in the deed could probably not be shown (m). Closely connected with this in principle is the rule Equity won't of equity that, although no consideration is required give effect to for the validity of a complete declaration of trust, or a imperfect complete transfer of any legal or equitable interest in gl property, yet an incomplete voluntary gift creates no right which can be -^ enforced. Certain recent deci- [ "k 185] sions have indeed shown a tendency to infringe on this rule by construing the circumstances of an incomplete act of bounty into a declaration of trust, notwithstand- ing that the real intention of the donor was evidently not to make himself a trustee, but to divest himself of all his interest (o). But these have been disapproved in still later judgments which seem entitled to more weight (p). 29 (o) Richardson v. Richardson, 3 Eq. 686; Morgan v. Malleson, 10 Eq. 475. , . (p) Warriner v. Rogers, 16 Eq. 340; Richards v. Delbridge, 18 Eq. 11; Moore r. Moore, ib. 474; Heartley v. Nicholson, 19 Eq. 233. Cp. Breton v. Woollven, 17 Ch. D. at p. 420. 29 Donaldsons. Donaldson, 1 Kay. 711; Lane v. Ewing, 31 Mo. 75; Milroy v. Lord, 8 Jus. (N. S.) 806. 248 PERSONS AFFECTED BY CONTRACT. [•186] Original type of contract. Legal effects confined to contracting parties. r • is?] This maxim to be deve- loped. * CHAPTER V. PERSONS AFFECTED BY CONTRACT. General Rules as to Parties. The original and simplest type of contract is an agree- ment creating an obligation between certain persons. 1 The persons are ascertained by their description as in- dividuals, and not by their satisfying any general class description: or, more shortly, they are denoted by proper names and not by class-names (a). And the persons who become parties in the obligation created by the agreement are the persons who actually conclude the agreement in the . first instance, and those only. The object of this chapter will be to point out the extent to which modern developments of the law of contract have altered this primary type either by modifications co-extensive with the whole range of contract or by special classes of exceptions. The fundamental notion from which we must take our departure is one that our own system of law has in common with the Roman system and the modern law of other civilized countries derived therefrom. A wide statement of it may be given in the shape of a maxim thus: The legal effects of a contract are confined to the contracting parties. This, like most, if not all, legal maxims, is a generali- zation which can be useful only as a compendious sym- bol of -^ the particulars from which it is generalized, and cannot' be understood except by reference to those particulars. The first step towards the necessary de- velopment may be given in a series of more definite but still very general rules, which we shall now endeavour to state, embodying at the same time those qualifica- tions, whether of recent introduction or not, which ad- mit of being stated in an equally general form. (a) Savigny, Obi. ? 55 (2. 16), ep. on the subject of this chapter generally, ib. \\ 53-70, pp. 17-186. 1 It is necessary, in order to make a valid contract that it should be made between two or more parties who are legally competent to contract. Dickerson v. Davis, 9 Western Rep. (Ind.) 680. GENERAL RULES. 249 We give some preliminary definition of terms which Definitions, it will be convenient to use in extended or special senses. A contract creates an obligation between the contracting parties, consisting of duties on the one part and the right to demand the performance of them on the other. Any party to a contract, so far as he becomes entitled "Creditor" to have anything performed under the contract, is and called the creditor. So far as he becomes bound to "debtor." perform anything under the contract he is called the debtor. Representation, representatives, mean respectively "Representa- succession and the person or persons succeeding to the tion. general rights and liabilities of any person in respect of contracts, whether by reason of the death of that person or otherwise. A third person means any person "Third other than one of the parties to the contract or his rep- person." resentatives (6). Rules. ] . The original parties to a contract must Rules, be persons ascertained at the time the contract is made, parties. 2. The creditor can demand performance from the Third per- debtor or his representives. He cannot demand nor sons not can the debtor require him to accept performance from hound, any third person; but the debtor or his representatives may perform the duty by an agent. ■fc 3. No third person can become entitled by the con- r -JL- 188] tract itself to demand the performance of any duty Third person under the contract. not entitled. Exception. Provisions contained in a settlement made upon and in consideration of marriage for the benefit of children to be born of the marriage, or, in the case of a woman marrying again, for the benefit of her children by any former marriage, may be enforced by the persons entitled to the benefit thereof (c). 4. Persons other than the creditor may become en- Assignment titled by representation or assignment to stand in the creditor's place and to exercise his rights under the contract. Explanation 1. Title by assignment is not complete N tj ce to as against the debtor without notice to the debtor, and debtor. (6) Contracts for the sale of land are enforceable in equity by and against the heirs or devisees of the parties. But here the obligation is treated as attached to the particular property. (c) See p. 199, below. 250 PERSONS AFFECTED BY CONTRACT. a debtor who performs his contract to the original cred- itor without notice of any assignment by the creditor is thereby discharged. Equities. Explanation 2. The debtor is entitled as against the representatives, and unless a contrary intention appears by the original contract, as against the assignees of the creditor, to the benefit of any defence 'which he might have had against the creditor himself. Exceptions: Strictly personal duties. . [*189] Strictly per- sonal rights. The following exceptions are given in order, to com- plete the general statement. The further disscussion of them however would not be relevant to the subject of this chapter. They are connected in principle with the cases of a contract for personal services or the exercise of personal skill becoming impossible of per- formance by inevitable accident, of which we speak in Chap. VII. below. Exception 1. If it appears to have been the intention of the parties that the debtor should perform any duty in person, he cannot perform it by an agent, nor can performance of it be required from his representatives. 3 Such -fa an intention is presumed in the case of any duty which involves personal confidence between the parties, or the exercise of the debtor's personal skill. Exception 2. If it appears to have been the inten- tion of the parties that only the creditor in person should be entitled to have any duty performed, no one can become entitled by representation or assignment to demand the performance of it, nor can such perform- ance be required from the debtor's representatives. Such an intention is presumed if the nature of the transaction involves personal confidence between the parties, or is otherwise such that "personal considera- tions" are of the foundation of the contract (d). 3 (Cp. Indian Contract Act, 1872, ss. 37, 40.) Exception 3. The representatives of a deceased per- son cannot sue for a breach of contract in a case where the breach of contract was in itself a merely personal (d) See Stevens v. Benning, 1 K. & J. 168, Farrow v. Wilson, L. R. 4 C. P. 744, 746; Robinson v. Davison, L. R. 6 Ex. 269; 2 Sm. L. C. 38. If in any of these cases the transaction is con- tinued by mutual consent, it is a new contract, e. g. if a servant continues his service with a deceased master's family, or if a painter's executor, being also a painter, were to complete an un- finished portrait on the original terms at the sitter's request. 2 Where the act is one of personal service the possibility of performance is always part of the question. 3 Bethlehem v. Annis, 40 N. H. 34; Lansen v. McCarthy, 45 Mo. 106. GENERAL RULES. 251 injury, unless special damage to the estate which they represent has resulted from the breach of contract. But where such damage has resulted the representatives may recover compensation for it, notwithstanding that the person whose estate they represent might in his lifetime have brought an action of tort for the personal injury resulting from the same act (e). These propositions are subject to several special qualifications and exceptions. Most of the exceptions are of modern origin, and we shall see that since their establishment many attempts have been made to extend them. -^-Such attempts have in some departments been [ "A" 190] successful, while in others exceptions which for some time were admitted have been more recently disal- lowed. We shall now go through the rules thus stated in order, pointing out under each the limits within which exceptions are admitted iD the present state of the law. The decisions which limit the exceptions are for the most part the chief authorities to show the existence of the rules, which are of so general a kind as to be rather assumed as the groundwork of decisions than expressly affirmed. Our first rule is that the original parties to a contract Eule. 1. must be persons ascertained at the time when the con- Parties must tract is made.* It is obvious that there cannot be a con- be ascertain- tract without at least one ascertained party to make it in the first instance: and it is also an elementary prin- ciple of law that a contracting party cannot bind him- self by a floating obligation to a person unascertained. 5 The rule has been thus expressed: "A. party cannot have an agreement with the whole world; he must have some person with whom the contract is made (/)..' It is theoretically possible to find exceptions to this rule (e) See 1 Wins. Exors. 798, 7th ed. and Bradshaw v. Lanca- shire & Yorkshire Ry. Co,, L. R. 10 C. P. 189 (since questioned in Leggott ». G. N. Ry. Co. 1 Q. B. D. 599). (/) Squire v. Whitton, 1 H. L. C. 333, 358. 4 Sacra v. Hudson, 59 Texas, 207; Harrison v. Simons, 55 Ala. •510; Parrt). Greenbush, 72 N. Y. 463; Chicago v. Sherwood, 104 Hi. 549. 5 A contract with a mere fictitious party is a nullity. Douthitt v. Stinson, 63 Mo. 268; Bennett v. Farnell, 2 Camp. 130. 6 But a contract not directed to any certain person when acted upon by a person becomes binding upon both parties. Thus where a reward is offered for a thing to be done and a person un- known does the thing. Bishop on Contracts, Sec. 885; Springer v. Cooper, 11 Bradw. 267; Keif v. Paige, 55 Wis. 496. 252 PERSONS AFFECTED BY CONTRACT. No real ex- ceptions. [•181] Rule 2. No liability imposed on third persons. Its foun- dation in principle. in such cases as those of promises or undertakings ad- dressed to the public at large by advertisements or the like, and sales by auction. But we have shown at length in Chap. I. that this view is unnecessary and un- tenable, and that in every such case where a contract is formed between two ascertained persons by one of them accepting a proposal made to him by the other, though possibly made to him in common with all other persons to whose knowledge it may come. Effects of Contract as to Third Persons. The affirmative part of our second rule, namely: The creditor can demand performance from the debtor or his -jf representatives, is now and long has been, though it was not always, elementary (g). The negative part of it states that the creditor cannot demand, nor can the debtor require him to accept, per- formance from any third person. This is subject to the explanation that the debtor or his representatives may perform the duty by an agent, which again is modified by the exception of strictly personal contracts as men- tioned at the end of the rules. On this we need not dwell at present. It is obvious on principle that it is not .competent to contracting parties to impose liabilities on other persons without their consent. Every person not subject to any legal incapacity may dispose freely of his actions and property within the limits allowed by the general law. Liability on a con- tract consists in a further limitation of this disposing (g) As to the liability of personal representatives on the con- tracts of the testator or intestate see 1 Wms. Saund. 241-2. The old rule that an action of debt on simple contract would not lie against executors where the testator could have waged his law (though it is said the objection could be taken only by demurrer) seems to have been in truth an innovation. See the form of writ for or against executors, Fleta 1. 2, c. 62, § 9, and cp. F. N. B. 119 M. 121 O (the latter passage is curious: if a man has entered into religion his executors shall be sued for his debt, not the ab- bot who accepted him into religion: see p. 81, n, (6), supra.), and Y. B. 30 Ed. 1 (Rolls ed.) p. 238. It issaid however that "Quia executores non possunt facere legem pro defuncto, petens pro- habit talliamsuam, velsi habeat sectamsecta debet examinari:' 1 Y. B. 20 & 21 Ed. 1, p. 456. For the conflict of opinion as to the remedy by assumpsit, see Reeves 3, 403, Y. B. Mich. 2. H. 8, 11. pi. 3, the strange dictum contra of Fitzherbert, Trin. 27 H. 8 23, pi. 21, who said there was no remedy at all, and Norwood v. Read, in B. R. Plow. 180. In Pinchon's ca. in Ex. Ch. 9 Co. Rep. 86 b, this dictum was overruled, authorities reviewed and explained, and the common law settled in substance as it now is. PARTIES MUST BE ASCEBTAINED. 253 power by a voluntary act of the party which places some definite portion of , that power at the command of the other party to the contract. So much of the debtor's individual freedom is taken from him and made over to the creditor (a). When there is an obligation inde- pendent of contract, a similar result is produced with- out regard to the will of the party; the liability is annexed by law to the party's own wrongful -^ act in T -^ 192] the case of tort, and in the case of quasi-contracts to another class of events which may be roughly described as involving the accession of benefit through the invol- untary loss of another person; but when an obligation is founded upon a true contract, the assent of a person to be bouDd is at the root of the matter and is indis- pensable (6). The ordinary doctrines of agency form no real ex- Agency: the ception to this. For a contract made by an agent can exception bind the principal only by force of a previous authority onl y a V~ or subsequent ratification; and that authority or ratifica- paren • tion is nothing else than the assent of the principal to be bound, and the contract which binds him is his own con- tract.' Under certain conditions there may be a correct binding on the agent also, as we have seen in Ch. II., but with that we are not here concerned. Another less simple when apparent exception occurs in the cases in which com companies panies have been held liable to fulfil the agreements hel 4 * n made by their promoters before the companies had any Promoters' legal existence. These cases, however, proceed partly agreements ■ on the ground of a distinct obligation having either not ex been imposed on the company in its original constitu- contractu. tion, or assumed by it after its formation (c), partly on a ground independent of contract and analogous to estoppel, namely, that when any person has on certain terms assisted or abstained from hindering the promo- . ters of a company in obtaining the constitution and the (a) Cp. Savigny Obi. rson as his debtor in the place of the first, this is called a novation. Whether there has been a novation in any particular case is a question of fact, but assent to a novation is not to be inferred from conduct unless there has been a distinct and un- ambiguous request (ft). Such questions are especially Novation. (d) Lindley 1. 400. As to ratification by companies see p. 107, above. (e) Govett v. Richmond, 7 Sim. 1. The case of Taylor u. Parry, 1 Man. & Gr. 604, seems at first sight to make the same way; but there the Court relied on positive acts of the parties as show- ing that they adopted the reference and were substantially par- ties to it. (/) 3 My. & Cr. 63. followed in DeHoghton v. Monev, 2 Ch. 164. Ig) Robson v. Drunimond, 2 B. & Ad. 303; infra, Ch. VIII. (A) Conquest's ca., 1 Ch. D. 334, 341. NOVATION. 2§5 important in ascertaining who is liable for the partner- ship debts of a firm when there has been a change in the members -^ of the firm, or on contracts made in a[^ 194] business which has been handed over by one firm (whether carried on by a single person, a partnership, or a company) to another. A series of cases which were, or were supposed to be, of this kind has arisen in'late years out of successive amalgamations of life insurance companies (i). The question may be resolved into two parts: Did the new firm assume the debts and liabilities of the old? and did the creditor, knowing this, consent to ac- cept the liability of the new firm and discharge the or- iginal debtor (k) ? It would be beyond our scope to enter at large on this subject, for an exposition of which the reader is referred to Lord Justice Lindley's work on Partnership (I). There exists however exceptions to the general rule. R ea j ex cep- In certain cases a new liability may without novation tion to come be created in substitution for or in addition to an exist- under Rule 4. ing liability, but where the possibility exists of such an exceptional transfer of liabilities it is bound up with the correlated possibility of an exceptionel transfer of rights, and cannot be considered alone. For this rea- son the exceptions in question will come naturally to our notice under Rule 4, when we deal with the pecu- liar modes in which rights arising out of certain classes of contracts are transferred. Apart from novation in the proper sense, the creditor may bind himself once for all by the original contract to accept a substituted liability at the debtor's option. Such an arrangement is in the nature of things unlikely to occur in the ordinary dealings of private persons among themselves. But it has been decided in the winding up of the ^- European Assurance Society [ -^ 195] that where the deed of settlement of an insurance com- pany contains a power to transfer the business and lia- bilities to another company, a transfer made under this power is binding on the policy-holders and the}* have no claim against the original company (m). In the (i) It is doubtful whether some of these were really cases of novation: see Hort's ca. and Grain's ca. 1 Ch. D. 307, 322. (k) See Rolfe v. Flower, L. R. 1 P. C. 27, 44.' (I) 1. 435, 463: and as to the general principle of novation see Wilson v. Lloyd, 16 Eq. 60, 74; for a later instance of true nova- tion, Miller's ca. 3 Ch. D. 391. (m) Hort's ca. and Grain's ca. 1 Ch. D. 307; Harman's ca. ib. 326; Cocker's ca, Ch. D. 1. 256 PEKSONS AFFECTED BY CONTRACT. Rule 3. No rights conferred on third persons. Exceptions. Agency: apparent only. Degree* of agency. [*196] case of a policy-holder there is indeed no subsisting debt (m), but he is a creditor in the wider sense above defined (p. 187). Rule 3. No third person can become entitled by the con- tract itself to demand the performance of any duty under the contract. 8 Before we consider the possibility of creating, arbi- trary exceptions to this rule in any particular cases, ' there are some extensive classes of contracts and tran- sactions analogous to contract which call for attention as offering real or apparent anomalies. A. Contracts made by agents. Here the exception is only apparent. The principal acquires rights under a contract which he did not make in person. 9 But the agent is only his instrument to make the contract within the limits of the authority given to him, however exten- sive that authority may be : and from the beginning to the end of the transaction the real contracting party is the principal. 10 Consider the following series of steps from mere ser- vice to full discretionary powers : 1. A messenger is charged to convey a proposal, or the acceptance or refusal of one, to a specified person. 2. He is authorized to vary the terms of the proposal, or to endeavor to obtain a variation of the other party's proposal (i. e. to make the best bargain he can with the particular person), within certain limits. •^ 3. He is not confined to one person, but is author- ized to conclude the contract with any one of several specified persons, or generally with any one from whom he can get the best terms. 4. He is not confined to one particular contract, but is authorized generally to make such contracts in a specified line of business or for specified purposes as he may judge "best for the principal's interest (n). The fact that in many cases an agent contracts for (m) Hort's ca. and Grain's ca. 1 Ch. D. 307; 326; Cocker's ca. 3 Ch. D. 1. (») Cp. Savigny, Obi. 2. 57-60. Harman's ca. ib. 8 One has no right regarding any contract between other per- sons, unless it affects his interests. Simson v. Brown, 68 N. Y. 355; Boyer o. Tressler, 18 Ind. 260. 9 Whatever one can do in person he can do by an agent with the same effect. Broom's Legal Maxims (2nd Eng. Ed.), 645; Story on Agency, Sec. 2. 6. 10 Cooke v. Seeley, 2 Exch. 746; Kirby v. Mills, 78 N. C. 124. AGENCY. 257 9 himself as well as for his principal, and the modifiea- Agent con- tions which are introduced into the relations between tract i n g per- the principal and the other party according as the agent sona y " is or is not known to be an agent at the time when the contract is made, do not prevent the acts of the agent within his. authority from being for the purposes of the contract the acts of the principal, or the principal from being the real contracting party. 11 Again, when the agent is also a contracting party, there are two alterna- tive contracts with the agent and with the principal re- spectively. 12 As for the subsequent ratification of unauthorized Ratification, acts, there is no difference for our present purpose be- tween a contract made with authority and one made without authority and subsequently ratified. 13 The con- sent of the principal is referred back to the date of the original act by a beneficent and necessary fiction. B. There are certain relations created by contract, of other which that of creditor, principal debtor, and surety may relations: be taken as the type, in which the rights or duties of principal and one party may be varied by a new contract between terms'' others. But when a surety is discharged by dealings annexed by between the creditor and the principal debtor, this is the law to result of a condition annexed by law to the surety's original original contract. There is accordingly no real anom- con r alay, though there is ah apparent exception to the vague maxim that the legal -^ effects of a contract are con- [ -^ 197] fined to the contracting parties : and there is not even any verbal inconsistency with any of the more definite rules we have stated. However it seems proper not to omit the mention of such cases, inasmuch as they have been considered as real exceptions by writers of recog- nized authority (o). Insolvency and bankruptcy, again, have various con- Anomalous sequences which affect the rights of parties to con- effects of tracts, but which the general principles of contract are bankruptcy inadequate to explain. We allude to them in this place ^ency* " only to observe that it is best to regard them not as de- Co) See Pothier, Obi. g 89. 11 Audenreid v. Betteley, 8 Allen, 302; Messier v. Amery, 1 Yeates, 533; Von Hurter v. Spengeman, 2 C. E. Green, 185, and Elwell v. Chamberlain, 31 N. Y. 611. 12 Sometimes the party may elect which he will hold liable. Coxe v. Devine, 5 Harring. (Del.) 375; Silver v. Jordan, 136 Mass. 319 13 Pollock v. Cohen, 32 Ohio, 514; Wilson v. Dame, 58 N. H. 392; Stentel v. Kennedy, 29 La. An. 679; Indianapolis E. E. v. Morris, 67 111. 295. 17 PRINCIPLES OF CONTRACT. 258 PERSONS AFFECTED BY CONTRACT. Trusts: a real ex- ception, if trust a con- tract be- tween author of trust and trustee. So treated by Scottish and American writers: analogy suggested in English books. [*198] General analogy to contract.' rived from or incidental to contract, but as results of an overriding necessity and beyond the region of con- tract altogether (p). Even those transactions in bank- ruptcy and insolvency which have some resemblance to contracts, such as compositions with creditors, are really of a judicial or quasi -judicial character. It. is obvious that if these transactions were merely contracts no dis- senting creditor could be bound. C. The case of trusts presents a real and important exception, if a trust is regarded as in its origin a con- tract between the author of the trust and the trustee. It is quite possible, and may for some purposes be use- ful so to regard it. The Scottish institutional writers (who follow the Roman arrangement in the' learning of Obligations as elsewhere) consider trust as a species of real contract coming under the head of deposi- tion (q). Conversely deposits, bailments, and the con- tract implied by law which is the foundation of the ac- tion for money received, are spoken of in English books as analogous to trusts (r). A chapter on the duties of trustees forms part of the best known American text- books on contracts, though no -^ attempt is made, so far as we have ascertained, to explain the logical con- nexion of this with the rest of the subject. By the creation of a trust duties are imposed on and undertaken by the trustee which persons not parties to the transaction, or even not in existence at its date, may ' afterwards enforce. And the relation of a trustee to his cestui que trust is closely analogous to that of a debtor to his creditor, in so far as it has the nature of a personal obligation and is governed by the general rules derived from the per- sonal character of obligations. Thus the transfer of equitable rights of any kind is subject, as regards the perfection of the transferee's title, to precisely the same conditions as the transfer of rights under a contract. And the true way to understand the nature and inci- dents of equitable ownership is to start with the notion not of a real ownership which is protected only in a court of equity, but of a contract with the legal owner which (in the case of trusts properly so called) cannot be enforced at all, or (in the case of constructive trusts, (p) A striking instance is furnished by the rule in Wariug's case, 19 Ves. 345; see per Lord Cairns, Banner v. Johnston, L. E. 5 H. L. at p. 174. (q) Sic, though no such abstract term is known in Roman law. See Erskine, Inst. Bk. 3, Tit. 1. s. 32. (r) Blackstone, Comm. 3. 432. SETTLEMENT TRUSTS. 259 such aa that which arises on a contract for the sale of land) cannot be enforced completely, except in a court of equity (s). However, although every trust may be said to in- clude a contract, it includes so much more, and the pur- poses for which the machinery of trusts is employed are of so different a kind, that trusts are distinct in a marked way not merely fr.om every other species of contract, but from all other contracts as a genus. The complex relations involved in a trust cannot be conve- niently reduced to the ordinary elements of contract, and there seems to be sufficient justification (independently of the historical reason supplied by the exclusive juris- diction of Equity) for the course hitherto adopted by all English writers in dealing with trusts as a separate branch of law. -^f D. Closely connected with the cases covered by [ -fa 199] the doctrine of trusts, but extending beyond them, we Exception of have the rules of.equity by which special favour is ex- certain pro- tended to provisions made by parents for their children. children 01 This exception has already been noted in statiDg the general rule (I). In the ordinary case of a marriage settlement the children of the contemplated marriage itself are said to be "within the consideration of mar- riage " and may enforce any covenant for their benefit contained in the settlement. "Where a settlement made on the marriage of a widow provides for her children by a former marriage, such children, though in the technical language of equity volunteers, or persons having no part in the consideration, are likewise entitled to enforce the provisions for their benefit; but it is doubtful whether this extends to the case of a husband making a provi- sion for his children by a former wife (u). The question how far limitations in a marriage set- tlement to persons other than children can be supported by the consideration of marriage, so as not to be de- feasible under 27 Eliz. c. 4, against subsequent pur- chasers, is a distinct and wider one, not falling within the scope of the present work (x). (s) See per Lord Westbury, Knox v. Gye, L. R. 5 H. L. at p. 675; Shaw v. Foster, ih. at p. 33,8 (Lord Cairns), and at p. 356 (Lord Hatherley). (<) P. 188, above, cp. per Cotton, L. J. 15 Ch. D. at p. 242. («) Gale v. Gale, 6 Ch. D. 144, 152. (x) The references in Gale v. Gale (last note) will guide the reader, if desired, to the authorities, including the full discussion in Mr. May's book on Voluntary and Fraudulent Conveyances. 260 PERSONS AFFECTED BY CONTRACT. Statutory exceptions: . powers to sue by public officers, &c. [*200] Covenants relating to real property. General application of rule. Contract for benefit of third person. E. There is also a considerable class of statutory ex- ceptions in cases where companies and public bodies, though not incorporated, are empowered to sue and be sued by their public officers or trustees. The enact- ments of this kind relating to companies are collected and commented on by Lord Justice Lindley (y). The trustees of Friendly Societies and Trade Unions are likewise empowered to sue, and may be sued, in their own -fc names in cases concerning the property of the society or union (is). By the 8 & 9 Vict. c. 106, s. 5, a person who is not a party to an indenture may nevertheless take the benefit of a covenant in it relating io real property. This en- actment has not, so far as we know, been the subject of any reported decision (a). Having disposed of these special exceptions, we may no^w proceed to examine the rule in its ordinary appli- cation, which may be expressed thus : — The agreement of contracting parties cannot confer on a third person any right to enforce the contract. There are two different classes of cases in which it may seem desirable, and in which accordingly it has been attempted, to effect this: (1) where the object of the contract is the benefit of a third person: (2) where the parties are numerous and the persons really inter- ested are liable to be changed from time to time. It was for a long time not fully settled whether a contract between A. and B. that one of them should do something for the benefit of C. did or did not give C. a right of action on the contract (6). And there was' (y) Lindley, Ptnp. 1. 509, sqq. (z) Friendly Societies Act, 1875, 38 & 39 Vict. c. 60, s. 21 ; Trade Union Act, 1879, 34 & 35 Vict. c. 31, s. 9. It isthe same with building societies formed before the Act of 1874 and not in- corporated under it. A statute enabling a local authority to re- cover expenses, and not specifying any remedy, has been held to make the local authority a quasi-corporation for the purpose of suing: Mills •«. Scott, L. E. 8 Q. B. 496. And the grant of a right by the Crown to a class of persons may have the effect of incorporating, them to enable them to exercise the right: Willing- dale v. Maitland, 3 Eq. 103, explained by Jessel, M. E. in Chil- ton v: Corporation of London, 7Ch; D. at p. 741. (a) For an example of the inconvenience provided against by it see Lord Southampton v. Brown, 6 B. & C. 718, where the person who was really interested in the payment of rent on a de- mise made by trustees, and with whom jointly with the trus- tees the covenant for payment of rent was expressed to be made, was held incapable of joining in an action on the covenant. (6) See Viner, Abr. Assumpsit, Z. (1. 333-7); per Eyre, C. J., THIRD PERSON CANNOT SUE. 261 positive authority that at all events a contract made for the benefit -^ of a person nearly related to one or both [ -^ 201 ] of the contracting parties might be enforced by that person (c). 14 However the rule is now distinctly estab- Third person lished that a third person cannot sue on a contract made c » nnot sue by others for his benfit even if the contracting parties a aw ' have agreed that he may, and that near relationship makes no difference as regards any common law right of action. This was decided by the Court of Queen's Bench in Tweddle v. Atkinson (d). The following writ- ten agreement had been entered into: " Memorandum of an agreement made this day between Wil- liam Guy,'' &c, "of the one part, and John Tweddle of the other part. Whereas it is mutually agreed that the said William Guy shall and will pay the sum of £300 to William Tweddle his son- in-law, railway inspector, residing in Thornton, in the county of Fife in Scotland, and the said John Tweddle father to the afore- said William Tweddle'shall and will pay the sum of £100 to the said William Tweddle each and severally the said sums on or before the 21st day of August, 1855; and it is hereby further agreed by the aforesaid William Guy and the said John Tweddle that the said William Tweddle has full power to sue the said parties in any Court of law or equity for the aforesaid sums hereby promised and specified." William Tweddle, the son of John Tweddle, brought an action against the executor of William Guy on this agreement, the declaration averring his relationship to the parties, and their intention to carry out a verbal agreement made before the plaintiff's marriage to pro- vide a marriage portion. The action was held not to be maintainable. The Court did not in terms overrule the older cases to the contrary, considering that their authority was already sufficiently disposed of by the effect of modern decisions and practice (e). Co. of Feltmakers v. Davies, 1 Bos. & P. 98; note to Pigott v. Thompson, 3 Bos. & P. 149. (c) Dutton v. Poole (Ex. Ch.), 2 Lev. 210, Vent. 318, 322. Ap- proved by Lord Mansfield, Cowp. 443. There appears to have been much difference of opinion at the time. . Lindsay, Stariha v. Greenwood, 28 Minn. 521 Meyer v. Lowell, 44 Mo. 328; Campbell v. Smith, 71 N. Y. 26 Green v. Eichardson, 4 Col. 584. 18 In specialties, most courts do not permit a suit in the third person's name, yet some do. Millard v. Baldwin, 3 Gray, 484. STRANGERS CANNOT SUE ON CONTRACT. 265 company (s), by the purser for the time being of a cost-book company (£), and bj the managers of a mu- tual marine insurance society (w). It will not be nec- essary to dwell on any instance other than the last. In Gray v. Pearson the reasons against allowing the right of action are well given in the judgment of Willes, J. : — "I am of opinion that this action cannot be maintained, and Judgment of for the simple reason, — a reason not applicable merely to the pro- Willes, J. in cedure of this country, but one affecting all sound procedure, — p r f^ *■ •that the proper person to bring an action is the person whose right has been violated. Though there are certain exceptions to the general rule, for instance in the case of agents, auctioneers, or factors, these exceptions are in truth more apparent than real. The persons who are suing here are mere agents, managers of an assurance association of which they are not members; and they are suing for premiums alleged to have become payable by the ' defendant in respect of policies effected by the plaintiffs for him and for his share and contributions to losses and damages paid by them to other members of the association whose vessels have been lost or damaged. The bare statement of the facts is enough to show that the action cannot be maintained. " It is in effect an attempt to substitute a person as a nominal plaintiff in lieu of the persons whose rights have been violated." Another variety of the same device is a document Notes and purporting to be a negotiable instrument payable to bills payable the treasurer or other officer for the time being of a? treasurer, society. Such a document, whether in the form of a being '"^ promissory note (x) or of a bill of exchange (y), is in- invalid, valid, for the payee must be a person capable of being ascertained at the time of making the note or accepting the bill. There is no doubt that a contract in any other form to pay the *fc treasurer for the time being [ -^ 206J would be equally inoperative togive any right of action to the person who should from time to time fill the office (z). But a promissory note payable to "the trustees of the W. chapel or their treasurer for the time being" is ~~(s) Phelps v. Lyle, 10 A. & E. 113. (*) Hybart v. Parker, 4 C. B. N. S. 209, 27 L. J. C. P. 120; where Willes, J., suggested that it was trenching upon the pre- rogative of the Crown to make a new species of corporation sole for the purpose of bringing actions. . (u) Gray v. Pearson, L. E. 5 C. P. 568: in the earlier case of Gray v. Gibson, L. E. 2 C. P. 120, a similar action succeeded, the question of the manager's right to sue not being raised. (x) Storm v. Stirling, 3 E. & B. 832, 23 L. J. Q. B. 298; in Ex. Ch. nom. Cowie ti. Stirling, 6 E. & B. 333, 25 L. J. Q. B. 335. (y) Yates v. Nash? 8 C. B. N.S. 581, 29 L. J. C. P. 306. • (») Pigott v. Thompson, 3 Bos. & P. 147. 266 PERSONS AFFECTED BY CONTRACT. Rule 4. Transfer of rights under contract. Eight to sue on contract not assign- able at common law probable origin of the rule. [•207] good: for it is considered that the trustees existing at the date of the note are the persons ascertained as payees, and that the treasurer is named only as their agent to receive payment (a). Assignment of Contracts. Rule 4. We now come to the fourth rule, which we have expressed thus: — * Persons other than the creditor may become entitled by representation or assignment to stand in the creditor's place and to exercise his rights under the contract. 10 We need say nothing here about the right of per- sonal representatives to enforce the contracts of the person they represent, except that it has been recog- nized from the earliest period of the histofy of our present system of law (6). With regard to assignment the benefit of a contract cannot be assigned (except by the Crown) at common law so as to enable the as- : signee to sue in his own name (c). 20 The origin of the rule was attributed by Coke to tbe "wisdom and policy of the founders of our law" in discouraging mainte- nance and litigation (d) : but there can he little or no doubt that it was in truth a logical consequence of 'the primitive view of a contract as creating a strictly per- sonal obligation between the creditor and the debtor (e). Anyhow, ^ it has been long established that the proper course at common law is for the assignee to sue in the (a) Holmes v. Jaques, L. E. 1 Q. B. 376. (6) Subject to some technical exceptions which have now dis- appeared: see notes to Wheatly v. Lane, 1 Wms. Saund. 240 sqq, and for early instances of actions of debt brought by executors. Y. B. 20 & 21 Ed. 1, pp. 304, 374. (c) Termes de la Ley, tit. Chose in action. (d) Lampet's ca. 10 Co. Rep. 48 a. For exposition of the rule in detail see Dicey on Parties, 115. (e) Spence, Eq. Jurisd.'of Chy. 2. 850. An examination of the earlier authorities has been found to confirm this view. The rule is assumed as unquestionable, and there is no trace of Coke's reason for it. The objection of maintenance was set up, not against the assignee suing in his own name, which was never at- temptedso far as we can find, butagainsthis suing inthenameof the assignor: see Note G in Appendix. 19 Under the common law doctrine an assignable instrument cannot be so transferred as to empower the holder to sue on it in his own name, because parties cannot by their agreement change a rule of law. Clark v. King, 2 Mass. 524; People v. Gray, 23 Cal. 125; Weidler v. Kauffman, 14 Qhic, 455. 20 This question concerns simply the form of action — who shall be the ostensible plaintiff, and by legislation in many of our States the assignee may be the plaintiff of record as well as of fact. ASSIGNMENT OF CONTRACTS. 267 name of the assignor. 21 It appears from the Year Books that attempts were sometimes made to object to actions of this kind on the ground of maintenance, but without success. The same rule is very distinctly stated by Gaius as prevailing in the Roman law (f). In equity the right of the assignee to sue in his own in equity name has been recognized for some considerable time; assignee it is perhaps impossible t9 say precisely for how long, ma, Y sue - but at any rate since the rules of equity have been at all systematic (g). 22 The Supreme Court of Judicature Act, 1873 (s. 25, Legal right sub-s. 6), creates a legal right modelled on the equi- of assignee table right, but confined to cases where the assignment uuder Ju - is absolute, 23 and by writing under the hand of the as- ig73 Ure C ' signor, and express notice in writing has been given to the debtor. These restrictions are but partly known in equity, in equity By the Statute of Frauds (29 Car. 2, c. 3, s.9) "all more grants any assignments of any trust or confidence" extensive: must be in writing signed by the assignor, and by s. 7, g^med by equitable interests in land must be created by writing, stat. of S. 9 does not require writing for the creation in the Frauds, qu. first instance by -^- the legal owner or creditor of an [ <^ 208] equitable interest in personal property or a chose in action : and it may be argued perhaps that its operation is altogether confined to interests in land by the con- text in which it occurs. The writer is not aware of any decision upon it (h). (/) Gai. 2. 38, 39. Quod inihi ab aliquo debetur, id si velim tibi deberi, nullo eorum modo quibus res corporales ad alium transferuntur, id efficere possum : sed opus est, ut iubente me tu ab eo stipuleris: quae res efficit ut a me liberetur et incipiattibi teneri. quae dicitur novatio obligationis. Sine hac vero nova- tione non poteris tuo nomine agere, sed debes ex persona mea quasi cognitor aut procurator meus experiri. In later times the transferee of a debt was enabled to sue by uiilis actio in his own name. This seems to have been first introduced only for the benefit of the purchaser of an inheritance, D. 2. 14. de pactis, 16 pr., C. 4. 39. de hered. vel. act. vend. 1, 2, 4—6, and afterwards extended to all cases, C. eod. tit. 7, 9. See too C. 4. 10. de obi. et aGt. 1, 2, C. 4. 15. quando flscus, 5, Arndts, Lehrbuch der Pandekten, \ 254. (g) There is a curious case in Y. B. 37 H. 6. 13, pi. 3, from which it seems that equitable assignments were then unknown. (h) See 1 Sanders on Uses (5th ed.) 343. 21 Huntu Mann, 132 Mass. 53; Boston Ice Co. v. Potter, 123 Mass. 28; Eobertson v. Reed, 11 "Wright (Pa.), 115. 2a Frye v. Bank of Illinois, 5 Gilman, 332, although he must sometimes make the assignor his co-plaintiff. Hodges v. Saun- ders, 17 Pick., 470; Mason v. York E. E., 52 Me. 82"; Currier v. Howard, 14 Gray, 511. 2 3 Bussed. Clark, 7 Cranch, 69. 268 PERSONS AFFECTED BY CONTRACT. In other special cases by statute. Limitation of assignee's lights. As for the notice to the debtor, the rule of equity is that it must be express but need not be in writing (i). There remain, therefore, a great number of cases •where the right is purely equitable, although the en- larged jurisdiction of every branch of the Supreme Court makes the distinction less material than formerly. Severalpartial exceptions to the common rule have been made at different times by modern statutes, on which however it seems unnecessary to dwell (k). In ordinary cases rights under a contract derived by assignment from the original creditor are subject, as already stated, to the following limitations: — [*209] Rules of equitable assignment in general. 1st. Title by assignment is not complete as against the debtor without notice to the debtor, and a debtor who performs his contract to the original creditor with- out notice of any assignment by the creditor is thereby discharged. 24 2nd. The debtor is entitled as against the represen- tatives, and, unless a contrary intention appears by the ~fc original contract, as against the assignees of the creditor, to the benefit of any defence which he might have had against the creditor himself. 1. As to notice to the debtor. Notice is not neces- sary to complete the assignee's equitable right as against the original creditor himself, or as against his (i) fie Tichener, 35 Beav. 317. (7c) The more important instances are these: — East India Bonds, 51 Geo. 3, c. 64, s. 4, which makes them negotiable. Mortgage debentures issued by land companies under the Mort- gage Debenture Act, 1865, 28 & 29 Vict. c. 78, amended by 33 & 34 Vict. c. 20. Policies of life assurance: 30 & 31 Vict. c. 144. Policies of marine assurance: 31 & 32 Vict. c. 86. Things in action of companies (Companies Act, 1862, s. 157) and bankrupts (Bankruptcy Act, 1883, ss. 56, 57, and see defini- tion of "property," s. 168) assigned in pursuance of those Acts respectively. As to the effect of registration under the present Acts of previously existing companies, &c, in transferring the right to sue on the contracts made by the company or its officers in its former state, see the Companies Act, 1862, 193, s. Lindley 1. 492, note (g). Local authorities (including any authority having power to levy a rate) may issue transferable debentures and debenture stock under the Local Loans Act, 1875, 38 & 39 Vict. c. 83. M If after assignment and notice the debtor expressly promises the assignee to pay him, the latter, even under the common law rules, may maintain a suit on the promise in his own name Jessel v. Ins. Co., 3 Hill, 88; Crocker v. Whitney, 10 Mass. 316- ASSIGNMENT : NOTICE TO DEBTOR. 269 representatives, including assignees in bankruptcy ( I) ; 25 Notice to but the claims of competing assignees or incumbrancers debtor, rank as between themselves not according to the order in date of the assignments, but according to the dates at which they have respectively given notice to the debtor. This was decided by the cases of Dearie v. Hall and Loveridge v. Cooper (m), the principle of which was soon afterwards affirmed by the House of Lords (n). The same rule prevails in the modern civil law (o) and has been adopted from it "in the Scottish law (p); and the true reason of it, though not made very prominent in the decisions which establish the rule in England, is the protection of the debtor. He has a right to look to the person with whom he made his con- tract to accept performance of it, and to give him a discharge, unless and until he is distinctly informed that he is to look to some other person. According to the original strict conception of contract, ("a ne con- sidreer que la subtilit6 du droit" as Pothier (q) ex- pressed it) his creditor or his creditor's assignee cannot even require him to do this, any more than in the con- verse but substantially different case a debtor can re- quire his creditor to accept another person's liability, and his assent must be expressed by a novation (as to which see p. 193, above). Such was in fact the old Soman law, as is shown by the passage already cited from -jf Gaius. By the modern practice the novation [ -^ 210] is dispensed with/and the debtor becomes bound to the assignee of whom he has notice. But he cannot be bound by any other assignment, though prior in time, of which he knows nothing. He is free if he has fulfilled his obligation to the original creditor without notice of any assignment; he is equally free if he fulfils it to the assignee of whose right he is first informed, not know- ing either of any prior assignment by the original creditor or of any subsequent assignment by the new (I) Burn v. Caivalho, 4 M. & Cr. 690. (to) 3 Russ. 1, 38, 48. {n) Foster v. Cockerell, 3 CI. & F. 456. It has only lately been decided that a second assignee who takes his assignment not from the beneficiary himself, but from his legal personal representative, may equally gain priority by notice; Freshfield's tr. 11 Ch. D. 198. (o) See Pothier, Contract de Vente, \\ 560, 554 sqq. (p) Erskihe Inst. Bk. 3, Tit. 5. (q) Contrat de Vente, § 550. 25 Assignee in bankruptcy can collect choses in action by suit in his own name; 3 Parsons on Contracts, 469. 270 PERSONS AFFECTED BY CONTRACT. This does not apply to interests in land: but does.to all other equitable interests. [*2H] creditor (r). It is enough for the completion of the assignee's title "if notice be given to the person by whom payment of the assigned debt is to be made, whether that person is himself liable or is merely charged with the duty of making the payment" (s), e. g. as an agent entrusted with a particular fund. Notice not given by the assignee may be sufficient, if shown to be such as a reasonable man would act upon (i). 26 AU this doctrine of notice has no applica- tion to interests in land (w); but, subject to that ex- ception, it applies to rights created by trust as well as to those created by contract; the beneficial interest be- ing treated for this purpose exactly as if it were a debt due from the trustee. In the case of trusts a difficulty may arise from a change of trustees; for it may hap- pen that a fund is transferred to a new set of trustees without any notice of an assignment which has been duly notified to their predecessors, and that notice is given to the new, trustees of some other assignment. It is still unsettled which of the assignees is entitled to priority in such a case; but it has been decided that the new trustees -^- cannot be made personally liable for having acted on the second assignment (x). The rules as to notice apply to dealings with future or contingent as well as with present and liquidated claims. "An assurance office might lend money upon a policy of insurance to a person who had insured his life, notwithstanding any previous assignment by him of the policy of which no notice had been given to them " (y). (r) See per "Willes, J. L. R. 5 C. P. at p. 594. Per Knight Bruce, L. J. Stocks v. Dobson, 4 D. M. G. 11. 17. (s) Per Lord Selborne, C. Addison v. Cox, 8 Ch. 76. 79. («) Lloyd v. Banks, 3 Ch. 488. (») Although the exception is fully established there is good authority for thinking it not very reasonable; see Lewin, 581. Its effect is that equitable interests in land stand on a different footing from personal rights; see this relied on as the ground of the exception, Jones v. Jones, 8 Sim. 644. But on the other hand their liability to be defeated by a purchase of the legal estate for value without notice shows that they have not the nature of real ownership. (x) Phipps v. Lovegrove, 16 Eq. 80; see p. 90 as to the precau- tions to be taken by an assignee of an equitable interest who wishes to be perfectly safe. (y) lb. at p. 88. 26 In order to complete the assignment as against the assignor, the assignee need not give notice to the person who owes the debt or has the custody of the fund which is intended to be assigned; Donaldson v. Id., Kay, 711. ASSIGNMENT SUBJECT TO EQUITIES. 271 2. As to the debtor's rights against assignees. The Assignee rule laid down in the second explanation is often ex- * ak ^ s sub_ pressed in the maxim "The assignee of an equity is {^um bound by all the equities affecting it." 27 This, how- doublT' ever, includes another rule founded on a distinct prin- meaning of ciple, which is that no transaction purporting to give a the rule - beneficial interest apart from legal ownership (z) can confer on the person who takes or is intended to take such an interest any better right than belonged to the person professing to give it to him. If A. contracts with B. to give B. something which he has already con- tracted to give to C, then C.'s claim to have the thing must prevail over B.'s whether B. knew of the prior contract with C. or not (a). And if B. makes over his right to D., D. will have no better right than B. had (&). And this applies not only to absolute but to partial interests (such as equitable charges on property) to the extent to which they may affect the property dealt with. Again, by a slightly different application of the same principle, a creditor of A. who becomes entitled by operation of law to appropriate any beneficial inter- est of A.'s (whether an equitable interest in properly or a right of action} for the -fc satisfaction of his debt can [ ^ 212] claim nothing more than such interest as A. actually had; and he can gain no priority by notice to A.'s trus- tee or debtor even in cases where he might have gained it if A. had made an express and unqualified assignment to him(c). But we are not concerned here with the de- velopment of these doctrines, and we return to the other sense of the general maxim. In that sense it is used in such judicial expressions as the following: " If there is one rule more perfectly established in a court of equity than another, it is this, that whoever takes an assignment (z) Certain dicta in Sharpies v. Adams, 32 Beav. 213, 216, and Maxfield v. Burton, 17 Eq. 15, 19, go even farther; but it seems at least doubtful ■whether they can be supported. (a) This is of course consistent with B. having his remedy in damages. Cp. p. 28, above. • (6) See Pinkett v. Wright, 2 Ha. 120, affd. nom. Murray v. Pinkett, 12 CI. & F. 784; Ford v. White, 16 Beav., 120; Clack v. Holland, 19 Beav. 262. (c) Pickering v. Ilfracombe Ey. Co. L. E. 3 C. P. 235, overrul- ing virtually Watts p. Porter, 3 E. & B. 743, 23 L. J. Q. B. 345. see Crow v. Robinson, L. E. 3 C. P. 264; judgment of Erie, J. (diss.) in Watts v. Porter. 27 The Bank v. Fordyce, 9 Barr, 275; Kamena v. Huelbing, 8 C. E. Green, 78; Jeffries v. Evans, 6 B. Mon. 119; Barney v. Grover, 28 Vt. 391; Andrews v. McCoy, 8 Ala. 920; Bebeen. The Bank of N. Y., 1 Johns.' 529. 272 PERSONS AFFECTED BY CONTRACT. of a chose in action takes it subject to all the equities of the per- son who made the assignment" (d). 28 " It is a rule and principle of this Court, and of every Court, I believe, that where there is a chose in action, whether it is a debt, or an obligation, or a trust fund, and it is assigned, the person who holds the debt or obligation, or has undertaken to hold the trust fund, has as against the assignee exactly the same equities that he would have as against the assignor " (e). Illustrations. [*213] The rule may be excluded by agreement of This is in fact the same principle which is applied by courts of common law as well as of equity for the protection of persons who contract with agents not known to them at the time to be agents (/). What is meant by this special use of the term " equities " will be best shown by illustration. A debt is due from B. to A., but there is also a debt due from A. to B. which B. might set off in an action by A. In this state of things A. assigns the first debt to C. without telling him of the set-off. B. is entitled to the set-off as against C. (g). Again, B. has contracted to pay a sum of money to A. but the contract is voidable on the ground of fraud or misrepresentation. A. assigns -^ the contract to C, who does not know the circumstances that render it voidable. B. may avoid the contract as against C. (h). Again, in a somewhat less simple case, there is a liqui- dated debt from B. to A. and a current account between them on which the balance is against A. A. assigns the debt to C. who knows nothing of the account. B. may set off as against C. the balance which is due on current account when he receives notice of the assignment, bat not any balance which becomes due afterwards (i). But it is open to the contracting parties to exclude the operation of this rule if they think fit by making it a term of the original contract that the debtor shall not Lord St. Leonards, Mangles v. Dixon, 3 H. L. C. 702, 731. James, L. J. (sitting as V.-C.) Phipps v. Lovegrove, 16 Eq. 80, 88. ' (/) Seep. 101, above. (g) Cavendish v. Geaves, 24 Beav. 163, 173, where the doctrine is fully expounded: the rules laid down by Lord Eomilly, M. B. are given at length in Lewin on Tr. 577. As to set-off accruing after notice of assignment, Stephens v. Venables, 30 Beav. 625, Watson v. Mid Wales By. Co., L. E, 2 C. P. 593. (h) Graham v. Johnson, 8 Eq. 36. (t) Cavendish v. Geaves, 24 Beav. 163. 28 The assignee will not be effected by any collateral transac- tions, secret trusts, or acts unconnected with the subject of the contract. Kountz v. Kirkpatrick, 22 P. F. Sm. 385; Corson v. Craig, I Wash. C. C. 424. •(«*) («); ASSIGNMENT FREE FROM EQUITIES. 273 set up against an assignee of the contract any counter original con- claim which he may have against the original creditor. trac t irj g This is established by the decision of the Court of Ap Asiatic * peal in Chancery in Ex parte Asiatic Banking Corpora- Banking Hon, the facts of which have already been stated for an- Corporation's other aspect of the case (k). case - Two alternative grounds were given for the decision in favour of the claim of the Asiatic Banking Corpora- tion under the letter of credit. One, which we have already noticed, was that the letter was a general pro- posal, and that there was a complete contract with any ' one who accepted it by advancing money on the faith of it. The other was that, assuming the. original contract to be only with Dickson, Tatham, & Co. to whom the letter was given, yet the takers of bills negotiated under the letter were assignees of the contract, and it appeared to have been the intention of the original parties that the equities which might be available for the bank against Dickson, Tatham,, & Co. should not be availa- ble against assignees. Lord Cairns, then Lord Justice, thus stated the law : — "Generally speaking a chose in action assignable 1 only in equity must be assigned subject to the equities existing between the original parties -fa to the contract ; but this is a rule which [ ^ 214] must yield when it appears from the nature or terms of the con- tract that it must have been intended to be assignable free from and unaffected by such equities. ' ' ffl Where assignees of a chose in action are enabled by statute to sue at law, similar consequences may be pro- duced by way of estoppel (I) ; 30 which really comes to the same thing, the doctrine of estoppel being a more technical and definite expression of the same principle. The principle thus laid down has been followed out Subsequent in several later decisions on the effect of transferable decisions: debentures issued by companies. The question whether in s™ u ° ment the holder of such a debenture takes it free from equi- how far ' (*) 2Ch. 391; p. 20, supra. (?) Webb v. Heme Bay Commissioners, L. E. 5 Q. B. 642. 29 There are authorities showing that the assignee of a chose in action is only subject to the equities of the party bound by its obligation ( the debtor) and not to those of prior assignees. Moore v. Holcombe, 3 Leigh, 597; Livingstone?). Dean, 2 Johns ch. 479; Mullison's Estate, 18 P. F. Sm. 212. 30 Bank v. Jerome, 18 Conn. 443; Watson's Ex'rs v. McLaren, 19 Wend. 557; Sargeant v. Id., 18 Vt. 371; Decker «. Eisenhauer, 1 P. &W. 476. 18 PRINCIPLES OF CONTRACT. material. 274 PERSONS AFFECTED BY CONTRACT. ties is to be determined by the original intention of the parties. The form of the instrument is of course material, but the general tenor is to be looked to rather than the words denoting to whom payment will be made ; these cannot be relied on as a sole or conclusive test. Making a debenture payable to the holder or bearer does not necessarily mean more than that the issuing company will not require the holder who presents the instrument for payment to prove his title, especially if the object of the debenture is on the face of it to secure a specific debt (m). But an antecedent agreement to give de- bentures in such a form is evidence that they were meant to be assignable free from equities (n) ; and de- bentures payable to bearer without Darning any one as payee in the first instance are prima facie so assign- able (o) ; so again if the document resembles a nego- tiable instrument rather than a common money bond or debenture in its general form.( p). Even when there is nothing on the face of the instru- ment to show the special intention of the parties, the [ -fa 215] -fa issuer cannot set up equities against the assignee if the instrument was issued for the purpose of raising money on it (q). The general circumstances attending the original contract — e.g. the issue of a number of de- bentures to a creditor instead of giving a single bond or covenant for the whole amount due — may likewise be important. Moreover, apart from any contract with the original creditor, the issuing company may be estopped from setting up equities against assignees by subsequent recognition of their title (r). The rule extends to an order for the delivery of goods as well as to debentures or other documents of title to a debt, payable in money (s). (m) Financial Corporation's claim, 3 Ch. 355, 360. (h) Ex parte New Zealand Banking Corporation, 3 Ch. 154. (o) Ex parte Colborne & Strawbridge, 11 Eq. 478, which can- not now be taken as warranting anything beyond th£ statement in the text, cp. Crouch v. Credit Foncier, L. E. 8 Q. B. 374, 385. (p) Ex parte City Bank, 3 Ch. 758. lq) Dixon ?>. Swansea Vale Ey. Co., L. E. 4 Q. B. 44. Graham v. Johnson, 8 Eq. 36, seems not consistent with this. (r) Higgs v. Northern Assam Tea Co., L. E. 4 Ex. 387; Exparie Universal Life Assurance Co., 10 Eq. 458 (on same facts); Ex parte Chorley, 11 Eq. 157; cp. Be Bahia & San Francisco Ey. Co., L. E. 3 Q. B. 584. Qu. can Athenaeum Life Assurance Soc. v. Pooley, 3 De G-. & J. 294, be reconciled with these cases? It seems not : Bruuton's claim, 19 Eq. 302, 312. * (s) Merchant Banking Co. of London v. Phoenix Bessemer Steel Co., 5 Ch. D. 205. ASSIGNMENT FKEE PROM EQUITIES. 275 On principle this doctrine seems inapplicable in a ease Qu. when where the original contract is not merely subject to a the original cross claim but voidable. For the agreement that the vo^^ie contract shall be assignable free from equities is itself part of the contract, and should thus have no greater validity than the rest. A collateral contract for a dis- tinct consideration might be another matter: but the notion of making it a term of the contract itself that one shall not exercise any right of rescinding it that may afterwards be discovered seems to involve the same kind of fallacy as the sovereign power in a state assum- ing to make its own acts irrevocable. Nor does it make any difference, so long as we adhere to the general rules of contract, that the stipulation is in favour, not of the original creditor, but only of his assignees (t) How- ever, the point has not been distinctly raised in any of the decided cases. In Graham v. -fa Johnson (u), |_ "R" ^loj where the contract was originally voidable (if not al- together void: the plaintiff had executed a bond under the impression that he was accepting or endorsing a bill of exchange) (as), an assignee of the bond as well as the obligee was restrained from enforcing the bond: but the decision was rested on the somewhat unsatis- factory ground that, although the instrument was given for the purpose of money being raised upon it, there was no intention expressed on the face of it that it should be assignable free from equities. 31 However, if the contract were not enforceable as be- tween the original parties only by reason of their be- ing in pari delicto, as not having complied with statutory requirements or the like, an assignee for value without notice of the original defect will, at, all events, have a good title by estoppel (y). The transferable debentures, the effect of which came Limits to in question in the cases we have just reviewed, were no what can doubt intended to be equivalent to negotiable instru- be done by ments, and there have been dicta in the Court of Chan- *j? Arties- eery favouring the view that they were such in fact (2). contract But a later decision of the Court of Queen's Bench cannot be {t) In principle it is the same as the case put in the Digest (50. 17, dereg. iuris, 23) "non valere si convenerit, ne dolus praeste- tur." . (u) 8 Eq. 36. (x) The evidence was conflicting, but the Court took this view of the facts: see at p. 43. (y) See Webb v. Heme Bay Commissioners, L. E. 5 Q. B. 642. (z) See especially Ex parte City Bank, 3 Ch. 758. 31 The assignee of negotiable paper will not take it subject to any equities. Statute 3 and 4 Anne. 276 PERSONS AFFECTED BY CONTRACT. made ne- gotiable: Crouch v. Credit Foncier. [•217] Negotiable instruments, Difficulties of assignee of ordinary- contract. Remedy by special rules of law merchant. (1873) shows that this intention cannot be fully carried out. ' The debtor may contract in such away as to alter or abandon his own rights as against assignees of the contract; but he cannot alter or abandon the rights of subsequent assignees, and therefore cannot enable an intermediate transferor having no title to give a good title to his transferee (a). This marks the extreme limit of the extension which can be given to the power of transferring rights under a contract consistently with the general rules of law. ■fa We are now in a position to see the nature of the difficulties which make the mere assignment of a con- tract inadequate for the requirements of commerce, and to meet which negotiable instruments have been introduced. The assignee of a contract is under two inconvi- ences (b). The first is that he may be met with any defence which would have been good against his assignor. 32 This, we have seen, may to a considerable extent if not altogether be obviated by the agreement of the original contracting parties. The second is that he must prove his own title and that of the intermediate assignees, if any; and for this purpose he must inquire into the title, of his immediate assignor. 83 This can be in part, but only in part, pro- vided against by agreement of the parties. It is quite competent for them to stipulate that as between them- selves payment to the holder of a particular document shall be a good discharge; but such a stipulation will neither affect the rights of intermediate assignees nor enable the holder to compel payment without proving his title. Parties cannot set up a market overt for contractual rights. The complete solution of the problem, for which the ordinary law of contract is inadequate, is attained by the law merchant (c) in the following manner:— (i.) The absolute "benefit of the contract is attached to the ownership of the documents which according to ordinary rules would be only evidence' of the contract. 34 (a) Crouch v. Credit Foncier of England, L. R. 8 Q. B. 374. (6) Cp. Savigny, Obi. | 62. (c) Extended to promissory notes by statute: 3 & 4 Anne c. 8 (in Eev. Stat.) ss. 1—3. 32 American note to Row v. Dawson, 3 Lead. Cases in Equity, 369. 83 No written instrument is necessary to assign a chose in action; it is sufficient if there is a verbal declaration properly manifested. Thompson v. Emery, 7 Foster, 269 f Ford v. Stuart, 19 Johns. 342. 34 Bank of United States v. Macalester, 9 Barr, 475; Beekman d. Wilson, 9 Met. 434; Fairly v. McLean, 11 Ired. 158. NEGOTIABLE INSTRUMENTS. 277 (ii.) The proof of ownership is then facilitated by- prescribing a mode of transfer which makes the instru- ment itself an authentic record of the successive trans- fers: this is the case with instruments transferable by indorsement. (iii.) Finally this proof is dispensed with by pre- suming the bona fide possessor of the instrument to be the true owner: this is the case with instruments trans- ferable by delivery, which are negotiable in the fullest sense of the word. ■^ The result is that the contract is completely em- [ -^ 218] bodied (d) for all practical purposes in the instrument Negotiable which is the symbol of the contract; 35 and both the instruments, right under the contract and the property in the instru- e^tensive^ 1 ' 1 ment are treated in a manner quite at variance with rights of the general principles of contract and ownership. We ionafide give references to a few passages where specimens will holder, be found of the positive terms in which the privileges of bona fide holders of negotiable instruments have been repeatedly asserted by the highest judicial au- thority (e). The narrower doctrine which for a time prevailed, requiring a certain measure of caution on the part of the holder, is now completely exploded. Nothing short of actual knowledge of the facts affecting his trans- feror's title will defeat the holder's right (/). 36 Moreover, there is no discrepance between common law and equity in this matter. Equity has interfered in certain cases of forgery and fraud to restrain ne- gotiation; but at law no title to sue on the instrument can be made through a forgery (gr); and "the cases of (d) "Verkorperung der Obligation," Sa-vigny. (e) See per Byles, J. Swan v. N. B. Australasian Co. in Ex. Ch. 2 H. & C. 184, 31 L. J. Ex. 425; per Lord Campbell, Brandao v. Barnett, 12 CI. & F. 787; opinion of Supreme Court U. S. delivered by Story, J. Swift v. Tyson, 16 Peters 1, 15. The following references as to the nature of the contracts undertaken by the parties to a bill of exchange may be found useful. Ac- ceptor and drawer: Jones v. Broadhurst, 9 C. B. 173, 181; Lebel v Tucker, L. E. 3 Q. B. 77, 84. Indorser: ib. 83, Denton v. Peters, I,. R. 5 Q. B. 475, 477. (/) Goodman v. Harvey, 4 A. & E. 876, Raphael v. Bank of England, 17 C. B. 161, 175, 25 L. J. C. P. 33. (g) The bona fide holder of an instrument with a forged in- dorsement may be exposed to considerable hardship. See Bob- bett v. Pinkett, 1 Ex. D. 36a 35 See last note. 36 If the payment of a negotiable instrument becomes overdue any purchase of the instrument- takes it subject to all equities. Texas v. White, 7 Wallace, 700. 278 PERSONS AFFECTED BY CONTRACT. [*219] Qualities of negotiable instruments. Limiting rules in Crouch v. Credit Foncier. fraud where a bill has been ordered to be given up are confined to those where the possession, but for the fraud, would be that of the plaintiff in equity" (h). The rights of bona fide holders for value, are as fully pro- tected in equity as at common law, and against such a bolder equity will not interfere (»).** ■^■The most frequent examples of negotiable instru- ments are bills of exchange (of which cheques are a spe- cies) (k) and promissory notes. Their exceptional qual- ities are concisely stated in the case of Crouch v. Credit Foncier of England (I) which has been already referred to:— "Bills of Exchange and promissory notes, whether payable to order or to bearer, are by the law merchant negotiable in both senses of the word. The person who, by a genuine indorsement, or, where it is payable to bearer, by a delivery, becomes holder, may sue in his- own name on the contract, and if he is a bona fide holder for value he has a good title notwithstanding any defect of title in the party (whether indorser or deliverer) from whom he took it." 38 We may here notice the positions contained in«the judgment of the Court, which show the limits beyond which the special law of English negotiable instruments cannot be extended. 1. It is extremely doubtf ul whether the seal of a cor- poration can be treated as equivalent to signature for the purpose of making an instrument under it negotiable at common law (m). {h) Jones v. Lane, 3Y.&C. Ex. in Eq. 281, 293. (i) Thiedemanh v. Goldschmidt, 1 D. F. J. 4. (fc) Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61, s. 73). And they are equally negotiable: M'Lean v. Clydesdale Banking Co., 9 App. Ca. 95. (I) L. B. 8 Q. B. 374. (m) But if a corporation is expressly enabled by statute to issue promissory notes under seal they may be sued on as ordinary promissory notes: Slark v. Highgate Archway Co., 5 Taunt. 792, and in any case the addition of the seal will not prevent an instru- ment from being a good bill or note if it is also signed by an agent or agents for the company so that it would be good without the seal, which may perhaps be regarded as an ear-mark or memo- randum made by the company or its agents for their own conven- ience: See Halford e, Cameron's Coalbrook, &c. Co,, 16 Q. B. 442, 20 L. J. Q. B. 160; Aggs v. Nicholson, 1 H. & N. 165, 25 L. J. Ex. 348; Balfour v. Ernest. 5 C. B. N. S. 601, 28 L. J. C. P. 170; Dut- ton v. Marsh, L. B. 6 Q. B. 361. 37 Birdsall v. Eussell, 29 N. Y. 220; Small v. Clark, 51 Cal. 227; Myers v. Hazzard, 4 McCrary, 94. 38 3 Kent's Com., 77; Beckman v. Wilson, 9 Met. 434. NEGOTIABLE INSTRUMENTS. 279 2. A bond containing a contract not merely to pay the principal but to cause the bonds to be drawn for pay- ment in a specified manner cannot be negotiable, since it violates the general rule that the contract to pay must be unconditional. (It must ^lso be a contract to pay money or to deliver another negotiable security repre- senting money (n): therefore a promise in writing to deliver 1000 tons of iron ~fo to the bearer is not nego- [ -fa 220] tiable and gives no right of action to the possessor) (o). 3. Mere private agreement or particular custom can- not be admitted as part of the law merchant so as to in- troduce new kinds of negotiable instruments. But the fact that a universal mercantile usage is modern is no reason against its being judicially recognized as part of the law merchant. The notion that general usage is in- sufficient merely because it is not ancient is founded on the erroneous assumption that the law merchant is to be treated as fixed and invariable (p). The bonds of foreign governments issued abroad and treated in the English market as negotiable instruments are recognized as such by law (g). 39 So is the provis- ional scrip issued in England by the agent of a foreign government as preparatory to giving definitive bonds (r). Such bonds or scrip, and other foreign instruments negotiable by the law of the country where they are made, may be recognized as negotiable by our Courts though they do not satisy all the conditions of an English nego- tiable instrument (s). From what was said iu Ooodwin v. Robarts (t) in the Negotiability House of Lords it seems that where the holder of an by estoppel, instrument purporting on the face of it to be negotiable, and in fact usually dealt with as such, intrusts it to a broker or agent who deals with it in the market where (m) Goodwin v. Eobarts, Ex. Ch., L. B. 10 Ex. 337. in H. L. 1 App. Ca. 476. (o) Dixon v. Bovill, 3 Macq. 1, and see Byles on Bills, Ch. 7. Such a contract may however be made assignable free from equi- ties: Merchant Banking Co. of London v. Pocanix Bessemer Steel Co, 5 Ch. D. 205. (p) Goodwin v. Eobarts, supra, overruling Crouch v. Credit Fon- cier on this point; Rumball v. Metropolitan Bank,, 2Q. B. D. 194. (q) Gorgier v. Mieville, 3 B. & C. 45. (r) Goodwin v. Eobarts, L. E. 10 Ex. 76, affd. in Ex. Ch. ib. 337, in H. L. 1 App. Ca. 476. (*) See Crouch «. Credit Foncier. L. E. 8 Q. B. at pp. 384-5; Goodwin v. Eobarts, 1 App. Ca. at pp. 494-5. (t) 1 App. Ca. 486, 489, 493, 497. 39 Government bonds of the United States and of a foreign gov- ernment are negotiable if such is their form. Illinois v. Delafield, 8 Paige, 527; Seybel v. National Cur. Bank, 54 N. Y. 288. 280 PERSONS AFFECTED BY CONTRACT. [*221] How instru- ments may cease to be negotiable. such usage prevails, he is estopped from denying its negotiable quality as against any one who in good ftiith and for value takes it from the broker or agent. ■fa It is also to be observed that an instrument which has been negotiable may cease to' be so in various ways, namely — Payment by the person ultimately liable (u). Restrictive indorsement (xi). Crossing with the words "not negotiable" (Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, s. 77). A person taking a cheque so crossed has not and cannot give a better title than the person from whom he took it; s. 81. To a certain extent, in the case of bills payable to order, indorsement when overdue, which makes the indorsee's rights subject to what are called eqnities attaching to the bill itself, e. g. an agreement between the original parties to the bill that in certain events the acceptor shall not be held liable, but not to collateral equities such as set-off (y). Transfer of ^ e h ave purposely left to the last the consideration contracts of certain important classes of contracts which may be where duties roughly described as involving the transfer of duties as well as of rights. This happens in the cases (A) Of transferable shares in partnerships and com- panies. (B) Of obligations (z) attached to ownership or in- terests in property. as well as rights transferred (A.) Part- nerships'. , Shares in ordinary partnerships and unincor- porated [ * 222] A. The contract of partnership generally involves personal confidence, and is therefore of a strictly per- sonal character. 40 But, " if partners choose to agree that any of them shall be at liberty to introduce any other person into the partnership, there is no reason why they should not; nor why, having so agreed, they should not be bound by ^-the agreement" (a). At («) Lazarus v. Cowie, 3 Q. B. 464. As to the possibility of suing on a bill after it has been paid by some other person, see Cook v. Lister, 13 C. B. N. S. 594, 32 L. J. C. P. 121. (x) 1 Sm. L. C. 479. (y) See Ex parte Swan, 6 Eq. 344, 359, where the authorities are discussed. (z) We use the word b,ere in its wide sense so as to denote the benefit or burden of a contract, or both, according to the nature of the case. (a) Lindley. 1. 699. 40 Joslyn v. Parlin, 54 Vt. 670; Bethlehem v. Annis, 40 N. H. 34; Lansden v. McCarthy, 45 Mo. 106. • TRANSFERABLE SHARES. 281 common law the number of persons engaged in a con- companies tract partnership -does not make anv difference in the ma y be nature or validity of the contract; hence it follows that ™ ade trans - if in the partnership of two or three the share of a part- common law. ner may be transferred on terms agreed on by the origi- nal partners, there is nothing at common law to prevent the same arrangement from being made in the case of a larger partnership, however numerous the members may be; in other words, unincorporated companies with transferable shares' are not unlawful at common law. This is worked out by Lord Justice Lindley in another part of his book, where he shows by an ingenious and convincing analysis that such a conclusion is demanded by principle, and by an examination of decided cases that it is consistent with authority (&). " Those who form such partnerships, [I e. partnerships whether ' small or large in which shares are transferable] and those who join them after they are formed, assent to become partners with any one who is willing to comply with certain conditions" (c). At first sight this may seem to involve the anomaly gnt no of a floating contract between all the members of the uncertain partnership for the time being, who by the nature of contract and the case are unascertained persons when we look to any no leal , . future time (d). But there is no need to assume any tM^ ma y ln special exception from the ordinary rules of contract. It was pointed out by Lord Westbury that the transfer of a share in a partnership at common law is strictly not the transfer of the outgoing partner's contract to the incoming partner, but the formation of a new con- tract. "By the. ordinary law of partnership as it ex- isted previously to" the Companies Acts "a partner could not transfer to another person his share in the partnership. Even if he attempted to do so with the consent of the other partners, it would not be a -^■transfer of his share, it would in effect be the crea- [ -^ 223] tion of a new partnership" (e). This therefore is to be added to the cases in which we have already found apparent anomalies to vanish on" closer examination. Notwithstanding the theoretical legality of unincor- Practical porated companies, there does not appear to be any very difficulties satisfactory way of enforcing either the claims of the of unin - t _ 2 . corporated (6) IV. 1. 191-196. (c) lb. 1. 699. (d) Cp. per Abbott, C. J. in Josephs v. Pebrer, 3 B. & C. 639, 643. This line of objection, however, does not appear to have been distinctly taken in any of the cases where the legality of joint-stock companies was discussed. fe) Webb v. Whiffin, L. K. 5 H. L. 711, 727. 282 PERSONS AFFECTED BY CONTRACT. companies company against an individual member ( / ), or those would re- f an individual member against the company (a). But main, even ,, „ » , & ■ • i, j. apBrt from * ne P ower ot torming such companies is so much cut compulsory short by the Companies Act, 1862, which renders (with provisions of a few exceptions) unincorporated and unprivileged (h) Companies partnerships of more than twenty (i) persons positively illegal, that questions of this kind are not likely to have much practical importance in future. In like man- ner the transfer of shares in companies as well as their original formation is almost entirely governed by mod- ern statutes. Obligations -^ Obligations ex contractu attached to ownership attached to or interests in property are of several kinds. With re- property, gard to those attached to estates and interests in land, which alone offer any great matter for observation, the discussion of them in detail is usually and conveniently treated as belonging to the law of real property. "We shall have to dwell on them however so far as to point out the existence of a real conflict between common law and equity as to the right way of dealing with burdens imposed on the use of land by contract. 41 A general statement in a summary form will serve both to shorten our subsequent remarks and to make • them better understood. [ -^r 224] *Ar Obligations attached to ownership and interests in General view PROPERTY, thereof. I. Goods. A contract cannot be annexed to goods so as to follow the pro- perty in the goods either at common law (k) o'r in equity (l). By statute 18 & 19 Vict. c. Ill the indorsement of a bill of lading operates as a legal transfer of the contract, if and when- ever by the law merchant it operates as a transfer of the pro- perty in the goods. Endorsement and delivery of a bill of lading (/) We»have seen {supra, p. 204) that they cannot empower an officer to sue on behalf of the association. (g) See Lyon v. Haynes, 5 M. & Gr. 504; but perhaps since the Judicature Acts a partner can sue or be sued by the partner- ship in the firm-name, Lindley 1. 212, 469, and 2. 877. (h) i. e. such as but for the Act would have been mere partner- ships at common law. (i) Ten in the case of banking; Companies Act 1862, s. 4. (7c) 3rd resolution in Spencer's ca. 1 Sm. L. C. 60; Splidt v. Bowles, 10 East, 279. "In general contracts do not by the law of England run with goods:" Blackburn on Sale, 276. (0 De Mattos v. Gibson, 4 De G. & J. 276, 295. 41 Roche v. Ullman, 104 111. 11; Chandler v. Brown, 59 N. H. 360; Betz v. Bryan, 39 Ohio, 320. * OBLIGATIONS ATTACHED TO PROPERTY, 283 by way of pledge does not, per se., pass "the property" under the statute so as to make an indorsee liable on the shipper's con- tract: Sewell i'. Burdick, 10 Anp. Ca. 74. What would be the effect of a transfer that operated as a mortgage, qu., per Lord Blackburn, p. 103. II. Land (m). a. Relations between landlord and tenant on a demise. Burden : ot lessee's covenants As to an existing thing par- cel of the demise, assignees are bound whether named or not. As to something to be Eewly made on the premises assig- nees are bound only if named (n). of lessor's covenants runs with the reversion. (32 Hen. 8. c. 34.) Benefit: of lessee's covenants runs with the reversion. (32 Hen. 8. c. 34?) But the statute applies only to demises under seal (o), and in- cludes (by construction in Spencer's ca.) only such covenants as touch and concern the thing demised (p). of lessee's covenants runs with the tenancy. Note. (i) The lessee may safely pay rent (g) to his lessor so long as he has no notice of any grant over of the reversion : 4&5Annec. 3 [in Rev. Stat. : al. 4 Ann. c. 16], which is in fact a declaration of common law: see per Willes, J., L. R. 5 C. P. 594. •fc (ii) The lessee may still be sued on his express covenants [ -X- 2251 (though under the old practice he could not be sued in debt for rent) after an assignment of the term (?•). (m) On this generally see Dart V. & P. 2. 764 sqq. ; 3rd re- port of R. P. Commission, Da v. Con v. 1. 122 (4th ed.);and above all the notes to Spencer's ca. in 1 Sm. L. C. : and also as to cove- nants in leases the notes to Thursby v. Plant, 1 Wms. Saund. 278-281, 299, 305. (re) As to this distinction, see 1 Sm. L. C. 74-77. "Whether a covenant not to assign without licence "extends to a thing in esse parcel of the demise," so as to bind assignees though not named, qusere: ib. 76. (o) e. g. Smith v. Eggington, L. R. 9 C. P. 145. ( p) For the meaning of this see 1 Sm. L. C. 72. (q) In the case of the lessee's covenants other than for pay- ment of rent, an assignee of the. reversion is not bound to give notice of the assignment to the lessee as a condition precedent to enforcing his rights: Scaltock v. Harston, 1 C. P. D. 106. (r) 1 Sm. L. C. 77, 1 Wms. Saund. 298. 284 PERSONS AFFECTED BY CONTKACT. (iii) The doctrine concerning a reversion in a term of years is the same as concerning a freehold reversion (s). (iv) Where the statute of Henry VIII. does, not apply, the assignee of the reversion cannot sue an original lessee who has assigned over all his estate, there being neither privity of estate nor privity of contract (t). /3. Mortgage debts. The transfer of a mortgage security operates in equity as a transfer of the debt (u). Notice to the mortgagor is not needed to make the assignment void ; but without such notice the assignee is bound by the state of the accounts between mortgagor and mortgagee (x). y. Eent-charges and annuities imposed on land independently of tenancy or occupation (y). An agreement to grant an annuity charged on land implies an agreement to give a personal covenant for payment (z) ; but by a somewhat curious distinction the burden of a covenant to pay a rent-charge does not run with the land charged, nor does the benefit of it run with the rent (a). 6. Other covenants not between landlord and tenant, relating to land and entered into with the owner of it. The beliefit runs, with the covenantee's estate so that an assignee can sue at common law. The lessee for years of the covenantee may enforce the covenant as an assign if assigns are named (b). It is immaterial whether the covenantor was the person who conveyed the land to the covenantee or a stranger (c). The usual vendor's covenants for title came under this head, r jL. 2261 ~k E - ^e ^^ e covenants entered into by the owner.. (s) 1 Sm. L. C. 70, '. ■ It) Allcock v. Moorhouse (C. A.), 9 Q. B. D. 366. (u) This is one of the cases in which the equitable transfer of a debt is not made=a legal transfer by the Judicature Act, 1873. In practice an express assignment of the debt is always added: the old power of attorney, however, is now superfluous. (x) Jones v. Gibbons, 9 Ves. 407, 411 ; Matthews v. "Wallwyn, 4 Ves. 118, 126. . (y) These must be regarded as arising from contract (we do not speak of rents or services incident to tenure) : the treatment of rent-charges in English law as real rights or incorporeal heredit- aments seems arbitrary. For a real right is the power of exercis- ing some limited part of the rights of ownership, and is quite distinct from the right to receive a fixed payment without the immediate power of doing any act of ownership on the property on which the payment is secured. (a) Bower v. Cooper, 2 Ha. 408. (a) 1 Wms. Sound. 303, 1 Sm. L. C. 84. lb) Tait v. Gosling, 11 Ch. D. 273. (c) Contra Sugd. V. & P. 584—5. But see 1 Sm. L. C. 80, Dart, 778, Dav. Conv. /L. 137. The cases from the Year Books relied on by Lord St. Leonards (Pakenham's ca. H. 42 E. 3. 3, pi. 14, Home's ca. M. 2 H. 4. 6, pi. 25) seems to show only that it was once thought doubtful whether the assignee could sue without being also heir of the original covenantee. See also O. W. Holmes, jun., The Common Law, 395, 404. COVENANTS BUNNING WITH LAND. 285 The burden of such covenants appears on the whole not to run with the land in any case at common law {d). But where a right or easement affecting land — such as a right to get minerals free from the ordinary duty of not letting down the surface — is granted subject to the duty of paying compensation for damage done to the land by the exercise of the right, there the duty of paying compensation runs at law with the benefit of the grant. Here, however, the co rrect view seems to be that the right itself is a qualified one — viz. to let down the surface, &c, paying com- pensation and not otherwise (e). The burden does run with the land in equity (subject to the limitation to be mentioned), i, e. a court of equity will enforce the covenant against assignees who have actual or construc- tive (/) notice of it; and when the covenant is for the benefit of other land (as in practice is commonly the case) the benefit gen- erally though not always runs with that other land. Explanation. Let us call the land on the use of which a re- striction is imposed by covenant the quasi-servient tenement, and the land for whose benefit it is imposed the quasi-dominant tene- ment. Now restrictive covenants may be entered into (1) By a vendor as to the use of other land retained or simul- taneously sold, for the benefit of the land sold by him: In this case the burden runs with the quasi-servient tenftnent and the benefit also runs with the quasi-dominant tenement. (2) By a purchaser as to the use of the land purchased by him, for the benefit of other land retained or simultaneously sold by the vendor: In this case the burden runs with the quasi-servient tenement, and the benefit may run with the quasi-dominant tenement when such is the intention of the parties, and especially when a por- tion of land is divided into several tenements and dealt with ac- cording to a prescribed plan (g). All these rights and liabilities being purely equitable are like all other equitable rights and liabilities subject to the rule that purchase for value without notice is an absolute defence. Further, this doctrine applies only to restrictive, not to affirma- tive covenants. Thus it does not apply to a covenant to repair, "Only such a covenant as can be complied with without expen- diture of money will be enforced against the assignee on the ground of notice " (fr). (d) 3rd report of R. P. Commissioners, in 1 Dav. Conv. Contra Cooke v. Chilcott, 3 Ch. D. 694. (e) Aspden ». Seddon, (C. A.), 1 Ex. D. 496, 509. (f) Wilson v. Hart, 1 Ch. 463; Patman v. Harland, 17 Ch. D. 353. (g) Keates v. Lyon, 4 Ch. 218 and other cases there considered. Harrison v. Good, 11 Eq. 338;'Eenals v. Cowlishaw, 9 Ch. D. 125, in C. A. 11 Ch. D. 866. (h) Lindley, L. .7., Haywood v. Brunswick Building Society, 8 Q. B. D. 403, 410; L. S. & "W. Ry. Co. v. Gomm, 20 Ch. D. 562. 286 PERSONS AFFECTED BY CONTRACT. [*227] Further remarks: as to- bills of lading. As to burden of covenants running with land: real conflict between C. L. and equity on this. Treatment of the question at C. L. [*228] -^ The only poin'ts which seem to call for more no- tice here are the doctrines as to bills of lading (I.) and restrictive covenants as to 'the use of land (II. e). As to (I.) it is to be borne in mind that bills of lad- ing are not properly negotiable instruments, though they may be called so " in a limited sense as against stoppage in transitu only " (i). As far as the law mer- chant goes the bill of lading only represents the goods, and does not enable any one who gets it into his hands to give a better title than his own to a % transferee; " the transfer of the symbol does not operate more than a transfer of what is represented " (k). And the whole effect of the statute is to attach the rights and liabili- ties of the shipper's contract not to the symbol, but to the property in the goods themselves (Z): the right to sue on the contract contained in the bill of lading is made to " follow the property in the goods therein spe- cified; that is to say, the legal title to the goods as against the indorser " (m). As to (II. e) we have to explain the discrepance be- twe8n common law and equity, which is a real an seri- ous one. The theory of the common law is to the fol- lowing effect. The normal operation of a contract, as we have already had occasion to say, is to limit or cut short in some way the contracting party's control over his own actions. Among other kinds of actions the ex- ercise of rights of ownership over a particular portion of property may be thus limited. So far then an owner " may bind himself by covenant to allow any right he pleases over his property " (n) * 2 or to deal with it in any way not unlawful or against public -^f policy (o). But if it be sought to annex such an obligation to the property itself, this is prima facie a considerable de- parture from the ordinary rales of contract, and to be justified only by clear convenience. How then does the matter stand in this respect ? An obligation at- tached to property in this manner ceases to be only a (i) Per Willes, J., Fuentes v. Montis, L. E. 3 C. P. at p. 276. (*) Gurney v. Behrend, 3 E. & B. 622, 633; 23 L. J. Q. B. 265. (0 Fox v. Nott, 6 H. & N. 630, 636, 30 L. J. Ex. 259; Smurth- waite v. Wilkins, 11 C. B. N. S. 842, 850, 31 L. J. C. P. 214. (m) The Freedom, L. E. 3 P. C. 594, 599. (n) Hill v. Tupper, 2 H. & C. 121, 127, 32 L. J. Ex. 217. (o) It is not unlawful for a land-owner to let all his land lie waste; but a covenant to do so would probably be invalid. 42 A covenant in order to run with the land must concern the land itself. COVENANTS RUNNING WITJI LA]JD. 287 burden on the freedom of the contracting party's indi- vidual action, and becomes practically a burden on the freedom of ownership. Now the extent to which the law regards such burdens as convenient is already de- fined. Certain well-known kinds of permanent bur- dens are imposed by law, or may be imposed by the act of the owner, on the use of land, for the permanent benefit of other land: these, and these only, are recog- nized as being necessary for the ordinary convenience of mankind, and new kinds cannot be admitted. And this principle, it may be observed, is not peculiar to the law of England (p). Easements and other real rights in re aliena cannot therefore be extended at the arbi- trary discretion of private owners: "it is not compe- tent for an owner of land to render it subject to a new species of burden at his fancy or caprice " (q). Still less, of course, is it competent for people to create new kinds of tenure or to attach to property incidents hith- erto unknown to the law. But if it is not convenient or allowable that these things should be done directly in the form of unheard of easements or the like, neither can we hold it convenient or allowable that they should be done indirectly in the form of obligations -fa created [ ^ 229] by contract but annexed to ownership. If the burden of restrictive covenants is to run with land, people can practically create new easements and new kinds of ten- ure to an indefinite extent. 43 Such appears to be the view of legal policy on which the common law doctrine rests: we say of legal policy, for it would be a great mistake to treat the matter as one of merely technical distinctions. On the other hand the Court of Chancery treated the In equity, question differently, looking not so much at general (p) Cp. Savigny, Obi. 1. 7: and for a singular coincidence in detail in D. 8. 3. de serv. praed. rust. 5 § 1, 6 pr. = Clayton v. Corby. 5 Q. B. 415, 14 L. J. Q. B. 364. (q) Per Martin, B., Nuttall v. Bracewell, L. E. 2 Ex. 10; for the C. L. principles generally see Ackroyd v. Smith, 10 C. B. 164, 19 L. J. C. P. 315; Bailey v. Stephens, 12 C. B. N. S. 91, 31 L. J. C. P. 226. Eights of this kind are to be carefully distin- guished from those created by grants in gross; see per Willes, J., ib. 12 C. B. N. S. 111. The Courts might have held that new negative easements might be created, but not positive ones, but this solution does not seem to have ever been proposed: and the whole subject of negative easements is still obscure, as is shown by the widely different, opinions held in Dalton v. Angus, 6 App. Ca. 740. m 43 Covenants may be either expressed or implied, 4 Kent's Com. 473. 288 PERSONS AFFECTED BY CONTRACT. policy as at individual rights. An owner of land has bound himself by contract to limit his use of that land in a particular manner : why should his successors in title not be bound also, save in the case of a purchase for value without notice of the restriction ? It is no hardship on them ; for those who buy the land subject to the restriction will pay so much the less, and the in- tention of the parties would be frustrated if contracts of this kind were considered merely personal. The history of the doctrine is somewhat curious. Lord Brougham adopted and enforced what we have called the common law theory in an elaborate judgment which seems to have been intended to settle the question (r). But this judgment, though treated as an authority in courts of law (s), has never been followed in courts of equity. After being disregarded in two reported cases (t) it was overruled by Lord Cottenham in Tulk v. Mox- hay (u), now the leading case on the subject. The most important of the recent cases are Keates v. Lyon (x) (where the authorities are collected), Haywood v. Brunswick Building Society (y), which decided that the rule applies only to negative covenants, and Har- rison v. Good (z). This last decided that when a ■ [ -^ 230] *fc vendor sells land in building lots and takes restric- tive covenants in identical terms from the several pur- chasers, neither reserving any interest nor entering into any covenant himself, this will enable the owner for the time being of one lot under the title thus created to en- force the covenant in equity against the owner of an- other lot : nor can the vendor release the covenant to any purchaser or his successors in title without the con- sent of all the rest. Thus the practical result is that a great variety of restrictions on the use of land which could not be imposed by way of easement or the like may be imposed by way of covenant for an indefinite length of time, purchases for value without notice of the restriction being obviously not probable events. So far as courts of equity have omitted to consider whether M Keppel v. Bailey, 2 M. & K. 527. (s) Hill v. Tupper, 2 H. & C. 121, 32 L. J. Ex. 217. (t) Whatman v. Gibson, 9 Sim. 196 (1838); Mann v. Stephens, 15 Sim. 377 (1846) : Keppel v. Bailey was in 1834. (it) 2 Ph. 774. See per Fry, J. in Luker v. Dennis, 7 Ch. D. at p. 235. (x) 4 Ch. 218. ly) 8 Q. B. D. 403 (C. A.I (z) 11 Eq. 338, dist. Master v. Hansard, 4 Ch. D$718; Eenals Cowlishaw, 9 Ch. D. 125, in C. A. 11 Ch. D. 866. For the cor- responding Scottish doctrine see Hislop v. Leckie, 6 App. Ca. 560. COVENANTS RUNNING WITH LAND. 289 such a result is consistent with the general principles of the law concerning the tenure and enjoyment of prop- erty, perhaps it may be said that the view they have taken is really the more technical of the two. According to the doctrine of equity, the intention of The question the parties is to fix a particular restriction on the use ls at b° ttom of the land not merely on the original contracting °"^ ° not of party, but on his successors in title : then why not give law. effect to that intention ?" The common law doctrine admits that such is the intention, but refuses to give effect to it because it tends to multiply undue restric- tions on the freedom of ownership, in contravention of the genera] spirit of the law (a). But the real question involved in this conflict is in truth of an economic rather than a legal kind : namely whether it is or is not desirable that private persons should have the power of dedicating land to be used in a particular way for an indefinite time. Such questions of -^ public economy [ Jr 231 ] cannot be adequately dealt with by means of the rules of ordinary private law concerning ownership and con- tract, and we need not be surprised if the purely legal discussion of them fails' to give satisfactory results (6). (a) See the observations of the Court of Ex. Ch. in Dennett v. Atherton, L. R. 7 Q. B. 325. (b) It is worth while to note that even if Equity had not re- fused to follow the law on this subject, the sort of restrictions in question might still be effectually created with little more trou- ble than at present. For instance, when it was desired to im- pose such restrictions on a sale of land in lots, long leases at nominal rents might be substituted for con veyances in fee sim- ple. The restrictive covenants would then run with the rever- sion at law by the statute of Hen. 8, and provision might be made for lessees enforcing them against one another in the name of the reversioner. On the other hand, the Court may at its dis- cretion refuse to enforce restrictive covenants when by lapse of time or change of circumstances they have become obsolete, vex- atious, or useless. Duke of Bedford v. Trustees of British Mu- seum, 2 M. & K. 552; per James, L. J., Renals v. Cowlishaw, 11 Ch. D. at p. 868; Sayers v. Collyer, 24 Ch. D. 180. See now Say- ers v. Collyer in C. A., 28 Ch. D. 103. In the opinion of Bowen and Fry, L.JJ., the rule in Duke of Bedford v. Trustees of British Museum, 2 My. & K. 552, applies only "where an alteration takes place through the acts or permission of the plaintiff, or those under whom he claims, so that his enforcing his covenant becomes unreasonable " (Fry, L. J., at pp. 109, 110); not where an alteration has taken place by means extraneous to the plain- tiff or those whose estate he has. 44 In order for a covenant to run with the land the word " heirs," " assign " or others of like meaning need not be used, although they will aid the conclusion that the covenant runs with the land. Harte. Ljon, 90 N. Y. 663. 19 PEINCIPLES OF CONTBACT. 290 UNLAWFUL AGREEMENTS. [*232] Subject- matter or performance a thing positively forbidden, or part of a transaction which as a whole is for- bidden (illegal). Notposi- * CHAPTER VI. UNLAWFUL AGREEMENTS. We have already seen that an agreement is not in any case enforceable by law without satisfying sundry con- ditions: as, being made between capable parties, being sufficiently certain and the like. If it does satisfy these conditions, it is in general a contract which the law-com- mands the parties to perform. But there are many things which the law positively commands people not to do. 1 The reasons for issuing such commands, the weight of the sanctions by which they are enforced, and the degree of their apparent , necessity or expediency, are exceedingly various, but for the present purpose unim- portant. A. murder, the obstruction of a highway, and the sale of a loaf otherwise than by weight, are all on 'the same footing in so far as they are all forbidden acts. If the subject matter of an agreement be such that the performance of it would either consist in doing a for- bidden act or be so connected therewith as to be in sub- stance part of the same transaction, the law cannot com- mand the parties to perform that agreement. 2 It will not always command them not to perform it, for there are many cases where the performance of the agreement is not in itself an offence, though the complete execution of the object of the agreement is: but at all events it will give no sort of assistance to such a transaction. Agree- ments of this kind are void as being illegal in the strict sense. Again, there are certain things which the law (a) does (a) i. e. the common law. But gu. whether the common law 1 White v. Buss, 3 Cush. 448; Ferguson v. Norman, 5 Bing. (N. C.) 76; Cook v. Phillips, 56 N. Y. 301; Bemis v. Becker, 1 Kan. 226; Dillon v. Allen, 46 Iowa, 299; Lqrd v. Chadbourne, 42 Me. 429; Stanley v. Nelson, 28 Ala. 514 ; Yeates v. Williams, 5 Pike, 684. 2 Any act which is forbidden either by the common or statutory law, cannot be. the foundation of a valid contract; nor can any- thing auxiliary to, or promotive of, such act. Bancrofts. Dumas, 21 Vt. 456; Armstrong v. Toler, 11 Wheaton, 258; Cummings e. Saux, 30 La. An. 207; Seidenbender v. -Charles, 4 S. & E. 151; Biter v. Sheets, 7 Ind. 132; Fairer v. Barton, 5 Mass. 395; Carle- ton v. Wicher, 5 N. H. 196 ; Hale v, Henderson, 4 Humph. 199. CLASSIFICATION. 291 sot forbid in the sense of attaching penalties to them, tiyely for- but which are violations of established rules of decency, bidden but morals, -^- or good manners, and of whose mischievous ^j^'oR^l nature in this respect the law so far takes notice that it *- ^ -* will not recognize them as the ground of any legal rights. 3 " A. thing may be unlawful in the sense that the law will not aid it, and yet that the law will not immediately punish it " (b). Agreements whose subject-matter falls within this description are void as being immoral.* Further, there are many transactions which cannot Not posi- f airly be brought within either of the foregoing classes, ^ e j y *"'" and yet cannot conveniently be admitted as the subject- ^rainst tw!blie matter of valid contracts, or can be so admitted only policy, under unusual restrictions. 5 It is doubtful whether these can be completely reduced to any general de- scription; and how far judicial discretion may go in novel cases. They seem in the main, however, to fall into the following categories: Matters governed by reasons outside the regular scope of municipal law, and touching the relations of the com- monwealth to foreign states: Matters touching the good government of the com- monwealth and the administration of justice : 6 Matters affecting particular legal duties of individ- uals whose performance is of public importance: ' Things lawful in themselves, but such that individ- ual citizens could not without general inconvenience be could take notice of anything as immoral which would not con- stitute an offence against either common or ecclesiastical law. (6) Bramwell, B. Cowan v. Milbourn, L. K. 2 Ex. at p. 236. 3 A contract, contra bimos mores, to commit an immoral act is void. Forsythe v. State, 6 Ohio, 19; Dumont v. Dufore, 27 Ind. 263; Merick v. Bank of the Metropolis, 8 Gill, 59. 4 Prominent among the interests which the law protects, are the public morals. 1 Bishop's Criminal Law, Sec. 550. 5 The law will not suffer the accomplishment by indirect means of what it forbids directly. Wells v. People, 71 111. 532. 6 All private attempts to inflence official conduct, no matter however honest and fair in themselves, are detrimental to the public interests, and contracts founded on any such agreement are void. Examples are lobbying (Trist v. Child, 21 Wallace, 441; Frost?;. Belmont, 6 Allen, 152; Clippinger v. Hepbaugh, 5 W. & S. 315; Gil ■«. Williams, 12 La. A. 219) and contracts to employ private influence with public officers. Dudley v. Butler, 10 N. H. 281; Cook«. Shipman, 51 111. 316; Maguire v. Smock, 1 Wils. (Ind.) 92; Devlin v. Brady. 36 N. Y. 531. ' As a promise of a bribe which is of course void. Smith v. Stotesbury, 1 W. Bl. 204, and see also Gulick v. Ward, 5 Hal- stead, 87; Weld 'v. Lancaster, 56 Me. 453; Caton v. Stewart, 76 N. C. 357; Lucas v. Allen, 80 Ky. 681; Stout v. Ennis, 28 Kan. 706; Fawcetta. Eberley, 58 Iowa, 544. 292 UNLAWFUL AGREEMENTS. Summary, [•234] Caution as to use ot terms. allowed to set bounds to their freedom of action with regard to those things in the same manner or to the same extent as they may with regard to other things (c). Agreements falling within this third description are void as being against public policy. We have then in the main three sorts of agreements which are unlawful and void, according as the matter or purpose of them is — A. Contrary to positive law. (Illegal.) ■jfc- B. Contrary to positive morality recognized as such by law. (Immoral.) C. Contrary to the common weal as tending. (a) To the prejudice of the State in external re- lations. (b) To the prejudice of the State in internal re- lations. (c) To improper or excessive interference with the lawful actions of individual citizens. (Against public policy. ) The distinction here made is in the reasons which de- ■ termine the law to hold the agreement void, not in the nature or operation of the law itself: the nullity of the agreement itself is in every case a matter of positive law. When we speak for shortness of the agreement itself as contrary to positive law, to morality, or to pub- lic policy, as the case' may be, we must bear in mind that this is an inexact and merely symbolic mode of speech. The arrange- The arrangement here given is believed to be on the ment only whole the most convenient, and to represent distinctions approximate, which are in fact recognized in the decisions that con- stitute the law on the subject. But like all classifica- tions it is of course only approximate: and here more especially, where there is perhaps a wider field for ju- dicial discretion than in any other part of the law, one must expect to find many cases which may nearly or quite as well be assigned to one place as to another. The authorities and dicta are too numerous to admit of any detailed review. But the general rules are (with some few exceptions) sufficiently well settled, so far as the nature of the case admits of general, rules existing. Any given decision, on the other hand, is likely to be rather suggestive than conclusive when applied to a (c) We have already seen that the specific operation of contract is none other than to set bounds to the party's freedom of action as regards the subject-matter of the contract CONTRARY TO POSITIVE LAW. 293 new set of facts. Some positive rules for the construe ■ tion of statutes have been worked out by a regular series of decisions. But with this exception we find that the case-law on most of the branches of the subject presents itself as a clustered group of analogies rather than a linear chain of authority. We have then to -^- select from these groups a certain number of the [ -^ 235] more striking and as it were central instances. The statement of the general rules which apply to all classes of unlawful agreements indifferently will be reserved, so far as practicable, until we have gone through the several classes in the order above given. A. Agreements contrary to positive law. Classes of 1. The simplest case is an agreement to commit a lawful crime or indictable offence: ° l "If one bind himself to kill a man, burn a house, to positive*^ maintain a suit, or the like, it is void " (d). law. With one or two exceptions on which it is needless l. Agree- to dwell, obviously criminal agreements do not occur in ment to our own time and in civilized countries, and at all cop 11 "* events no attempt is made to enforce them. 8 It is said v i™ ce ' that in the last century a bill was filed in Chancery by a highwayman against his fellow for a partnership ac- count, but the story is more than doubtful (e). The Sometimes question may arise, however, whether a particular thing doubtful if agreed to be done is or is not an offence, or whether a performance partisular agreement is or is not on the true construe- ^ ^ e t, men tion of it an agreement to commit an offence. In the oftence. singular case of Mayor of Norwich v. Norfolk Ry. Mayor of Co. (/), the defendant company, being authorized to Norwich v. make a bridge over a navigable river, at one particular Norfolk Ry. place, had found difficulties in executing the statutory plan, and had begun to build the bridge at another place. The plaintiff corporation took steps to indict the company for a nuisance. The matter was compro- mised by an arrangement that the company should— not discontinue their works, but — complete them in a (<*) Shepp. Touchst. 370. ~ • (e) See Lindley, 1. 183. Lord Kenyon once said by way of illustration, it appears, that he would not sit to take an account between two robbers' on Hounslow Heath. May not the legend have arisen from this? The case was cited with apparent grav- ity by Jessell, M.R., in Sykes v. Beadon, 11 Ch. D. at p. 195. (/)• 4 E. & B. 397, 24 L. J. Q. B. 105. " The mere tendency of a contract to promote unlawful acts renders it illegal as against the policy of the law, without regard to any circumstances indicating the probable commission of such acts. 294 UNLAWFUL AGREEMENTS. [ -^- 236] particular manner, -^ intended to make sure that no serious obstruction to the navigation should ensue: and an agreement was made by deed, in which the company covenanted to pay the corporation £1,000 if the works should not be completed within twelve months, whether an Act of Parliament should within that time be ob- tained to authorize them or not. The corporation sued on this covenant, and the company set up the defence that the works were a public nuisance, and therefore the covenant to complete them was illegal. The Court of Queen's Bench was divided on the construction and effect of the deed. Erie, J. thought it need not mean that the defendants were to go on with the works if they did not obtain the Act. "Where a contract is ca- pable of two constructions, the one making it valid and the other void, it is clear law the first ought to be adopted." Here it should be taken that the works con- tracted for were works to be rendered lawful by Act of Parliament. Coleridge, J. to the same effect: he thought the real object was to secure by a penalty the speedy reduction of a nuisance to a nominal amount, which was quite lawful, the corporation not being bound to prosecute for a nominal nuisance. Lord Campbell, C. J. and Wightman, J. held the agreement bad, as being in fact an agreement to continue an existing unlawful state of things. The performance of it (without a new Act of Parliament) would have been an indictable offence, and the Court could not presume that an Act would have been obtained. Lord Campbell said, " In principle I do not see how the present case is to be dis- tinguished from an action by A. against B. to recover £1,000, B. having covenanted with A. that within twelve calendar months he would murder C, and that on fail- ing to do so he would forfeit and pay to A. £1,000 as liquidated damages, the declaration alleging that al- though B. did not murder C. within the twelve calen- dar months he had not paid A the £1,000" (g). [ -^ 237] -fa It seems impossible to draw any conclusion in point of Jaw from such a division of opinion (h). But the case gives this practical warning, that whenever it is desired to contract for the doing of something which is not certainly lawful at the time, or the lawfulness (g) 4 E. & B. 441. (7() Not only was the Court equally divided, bnt u perusal of the judgments at large will show that no two members of it really looked at the ease in the same way. The reporters (4 E. & B. 397) add not without reason to the head-note: Et gusert inde. AGREEMENTS TO COMMIT WRONG. 295 of which depends on some event not within the control of the parties, the terms of the contract should make it clear that the thing is not to be done unless it becomes or is ascertained to be lawful. Moreover a contract may be illegal because an offence When the is contemplated as its ulterior result, or because it in- ulterior vites to the commission of crime. For example, an 0, 'J ect is an agreement to pay money to A.'s executors if A. com- offence - mits suicide would be void (i) ; and although there is nothing unlawful in printing, no right of action can arise for work done in printing a criminal libel (k). But this depends on the more general considerations which we reserve for the present. 2. Again an agreement will generally be illegal, % Agreement though the matter of it may not be an indictable offence, for civil and though the formation of it may not amount to the of- wrong to fence of conspiracy, if it contemplates (I) any civil in- thlrd .P er - jury to third persons. Thus an agreement to divide void. 13 the* profits of a fraudulent scheme, or to carry out some object in itself not unlawful by means of an apparent trespass, breach of contract, or breach of trust is unlaw- ful and void (m). A. -^ applies to his friend B. to ad- [ if 238] vance him the price of certain goods which he wants to buy of C. B. treats with C. for the sale, and pays a sum agreed upon between them as the price. It is se- cretly agreed between A. and C. that A. shall pay a fur- ther sum: this last agreement is void as a fraud upon B., whose intention was to relieve A. from paying any part of the price (n). Again, A. and B. are interested (i) Per Bramwell, L. J., 5 C. P. D. at p. 307. (k) Poplett o. Stockdale, 1 It. & M. 337. (I) If A. contracts with B. to do something which in fact, but not to B. 's knowledge would involve a breach of contract or trust, A. cannot lawfully perform his promise, but yet may well be liable in damages for the breach. Millward v. Littlewood, 5 . Ex. 775, 20 L. J. Ex. 2. See further at end of this chapter. (m) An agreement to commit a civil injury is a conspiracy in many, but it seems impossible to say precisely in what, cases. See the title of Conspiracy in Roscoe's Digest (ed. Horace Smith, 1884). An agreement to commit a trespass likely to lead to a breach of the peace, Reg. v. Rowlands, 17 Q. B. 671, 686,21 L. J. M. C. 81 — or to commit a civil wrong by fraud and false preten- ces, Reg. v. Warturton, L. R. 1 C. C. R. 274, cp. Reg. v. Aspin- all, 2 Q. B. D. at p. 59 — is a conspiracy. An agreement to commit a simple breach of contract is not a conspiracy. Before the C. L. P. Act a court of common law could not take notice of an agreement being in breach of trust so as to hold it illegal: Warwick v. Richardson, 10 M. & W. 284, and agreements to in- demnify trustees against formal breaches of trust are in practice constantly assumed to be valid in equity as well as at law. («) Jackson v. Duchaire, 3 T. R. 551. 296 UNLAWFUL AGKEEMENTS. Agreement in fraud of creditors is void. And other creditors not bound by the composition. [*239] iD common with other persons in a transaction the na- ture of which requires good faith on all hands, and a secret agreement is made between A. and B. to the pre- judice of those others' interest. Such are in fact the cases of agreements " in fraud of creditors " : that is, where there is an arrangement between a debtor and the general body of the creditors, but in order to pro- cure the consent of some particular creditor, or for some other reason, the debtor or any person on his behalf secretly promises that creditor some advantage over the rest. All such secret agreements are void: securities given in pursuance of them may be set aside, and money paid under them ordered to be repaid (o). Moreover, the other creditors who know nothing of the fraud and enter into the arrangement on the assumption " that they are contracting on terms of equality as to each and all " are under such circumstances not bound by any release they give (p). And it will not do to say that the underhand bargain was in fact for the benefit of the creditors generally, as where the preferred creditor becomes surety for the payment of the composition, and the real consideration for this is the debtor's promise to pay his own debt in full; for the creditors ought to ■fa have the means of exercising their own judgment (q). But where one creditor is induced to become surety for an instalment of the composition by an agreement of the principal debtor to indemnify him, and a pledge of part of the assets for that purpose, this is valid; for a compounding debtor is master of the assets and may apply thern as he will (r). The principle of these rules was thus explained by Erie, J. in Mallalieu v. Hodgson (s) : — " Each creditor consents to lose part of his debt in considera- tion that the others do the same, and each creditor may be con- sidered to stipulate with the others for a release from them to the debtor in consideration of the release by him. Where any cred- itor, in fraud of the agreement to accept the composition, stipu- lates for a preference to himself, his stipulation is altogether void — not only can he take no advantage from it, but he is also to lose the benefitof the composition (<). The requirement of good faith among the creditors and the preventing of gain by agree- to) McKewan v. Sanderson, 15 Eq. at p. 234, per Malins, V.-C. (p) Dauglish v. Tennent, L. E. 2 Q. B. 49, 54. (q) Wood v. Barker, 1 Eq. 139. (r) Ex parte Burrell (C. A.), 1 Ch. D. 537. (s) 16 Q. B. 789. 20 L. J. Q. B. 339, 347. See further Exparte Oliver, 4 DeG. & Sin. 354. {t) Howden v. Haigh, 11 A. & E. 1033. AGREEMENTS IN FRAUD OF CREDITORS. 297 ments for preference have been uniformly maintained by a series of cases from Leicester v. Rose (t) to Howden v. Saigh (u) and Brad- shawv. BradsJiaw" (x) From the last cited case (x) it seems probable, though it is not decided, that when a creditor is induced to join in a composition by having an additional payment from a stranger without the knowledge of either the other creditors or the debtor, the debtor on discovering this may refuse to pay him more than with such extra payment will make up his proper share under the com- position, or may even recover back the excess if he has paid it involuntarily, e. g., to bona fide holders of bills given to the creditor under the composition. A debtor who has given a fraudulent preference can claim no benefit under the composition even as against the creditor to whom the preference has been given (y). ^ A secret agreement by a creditor to withdraw his [ "At 240] opposition to a bankrupt's discharge or to a composition is equally void; and it does not matter whether it is made with the debtor himself or with a stranger (y), nor whether the consideration offered to the creditor for such withdrawal is to come out of the debtor's assets or not (z) ; and this even if it is part of the agreement that the creditor shall not prove against the estate at all (a). In like manner if a debtor executes an assignment of his estate and effects for the benefit of all his creditors upon a secret agreement with the trustees that part of the assets is to be returned to him, this agreement is void (b). We have here at an early stage of the subject a good instance of the necessarily approximate character of our classification. We have placed these agreements in fraud of creditors here as being in effect agreements to commit civil injuries. But a composition with cred- itors is in most cases something more than an ordinary civil contract; it is in truth a quasi-judicial proceeding, and as such is to a certain extent assisted by the law (c). (t) 4 East, 372: showing that the advantage given to the pre- ferred creditor need not be in money. («) Howden v. Haigh, 11 A. & E. 1033. {x) 9 M. & W. 29. (y) Higgins v. Pitt, 4 Ex. 312. (z) Hall v. Dyson, 17 Q. B. 785, 21 L. J. Q. B. 224. (a) McKewan r. Sanderson, 20 Eq. 65. (b) Blacklock v. Dobie, 1 C. P. D. 265. (c) Bankruptcy Act, 1883, ss. 18. 19. Since this act there is a notable increase of private compositions independent of the Act, which may lead to the revival of various common law questions. 298 UNLAWFUL AGREEMENTS. Public policy, therefore, as well as private right, re- quires that such a proceeding should be conducted with good faith and that no transaction which interferes with equal justice being done therein should be allowed to Fraud on stand. The doctrine of fraud on third parties, as it third parties may be called, is however not to be extended to cases of not to be mere suspicion or conjecture. A possibility that the from mere performance of a contract may injure third persons is possibilities, no ground for presuming that such was the intention, and on the strength of that presumed intention holding it invalid between the parties themselves. [*241] 3. Certain cases of analogous ■nature as involving ''fraud on third per- sons." " Where an instrument between two parties has been entered into for a purpose which maybe considered fraudulent as against some third -^r person, it may yet be binding, accoiding to the true construction of its language as between themselves." Nor can a supposed fraudulent intention as to third persons (inferred from the general character and circum- stances of a transaction) be allowed to determine what the true construction is (d). 9 3. There are certain cases analogous enough to the foregoing to call for mention here, though not for any full treatment. Their general type is this : There is a contract giving rise to a continuing relation to which certain duties are incident by law; and a special sanc- tion is provided for those duties by holding that trans- actions inconsistent with them avoid the original con- tract, or are themselves voidable at the option of the party whose rights are infringed. We have results of this kind from (a). Dealings between a principal debtor and creditor to the prejudice of a surety: (;S). Dealings by an agent in the business of the agency on his own account: (<5). Voluntary settlements before marriage "in fsaud of marital rights." In the first case the improper transaction is as a rule valid in itself, but avoids the contract of suretyship. In the second it is voidable as between the principal and the agent. In the third it is voidable at the suit of the husband. (d) Shaw v. Jeffery, 13 Moo. P. C. 432, 455. 9 In cases of combinations to defraud, the court will not en- tertain the suit of any of the conspirators against his or their co- conspirators. Horn v. Star Foundry, 23 W. Va. 522; Toley v. Robinson, 99 111. 222. DEALINGS TO PREDUJICE OP SURETY. 299 a. "Any variance made without the surety's consent Dealings in the terms of the contract between the principal be * w< ?en debtor and the creditor discharges the surety as to c^dftMand transactions subsequent to the variance" (e), 10 unless it debtor to is evident to the Court "that the alteration is unsub prejudice of stantial, or that it cannot be otherwise than beneficial suret y- to the surety" ('/). The -fc surety is not the less dis- [ + 242] charged "even though the original agreement may notwithstanding such variance be substantially per- formed" (g). An important application of this rule is that "where there is a bond of suretyship for an officer, and by the act of the parties or by Act of Par- liament the nature of the office is so changed that the duties are materially altered, so as to affect the peiil of the sureties, the boad is avoided" (h). But when the guaranty is for the performance of several and distinct duties, and there is a change in one of them, or if an addition is made to the duties of the principal debtor by a distinct contract, the surety remains liable as to those which are unaltered (*')." The following rules rest on the same ground : " The surety is discharged by any contract between the creditor and the principal debtor by which the principal debtor is released, or by any act or omission of the creditor the legal consequence of which is the discharge of the principal debtor" (k). "A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to or not to sue the principal debtor, discharges the surety, unless the surety assents to such contract" (I), or unless in such contract the (e) Indian Contract Act, s. 133. (/) Holme v. Brunskill (C. A.) 3 Q. B. D. 495 (diss. Brett. L. J.), overruling on this point Sanderson v. Aston, L. R. 8 Ex. 73. (g) Per Lord Cottenham, Bonar v. Macdonald, 3 H. L. C. 226, 238. (h) Oswald v. Mayor of Berwick-on-Tweed, 5 H. L. C. 856; Pyb'us v. Gibb, 6 E. & B. 902, 911. 26 L. J. Q. B. 41 ; Mayor of Cambridge v. Dennis, E. B. & E. 660, 27 L. J. Q. B. 474. (i) Harrison v. Seymour, L. R. 1 C. P. 518; Skillettu. Fletcher, L. R. 1 C. P. 217, 224, in Ex. Ch. 2 C. P. 469. (7c) I. C. A. s. 134. Kearsley v. Cole, 16 M. & W. 128; Cragoe v. Jones, L. R. 8 Ex. 81. (I) I. C. A. s. 135. Oakeley v. Pasheller, 4 CI. &F. 207; Ori- ental Financial Corporation v. Overend, Gurney & Co., L. R. 7 10 A surety not consulted about the alteration or not consent- ing is thereby discharged. Gardiner v. Harback, 21 111. 129; Ryan v. Parker, 1 Ired. 89; Darwin v. Rippey, 63 N. C. 318. 11 Any alteration is good as to those who consent; Smith v. Weld, 2 Barr. 54; Briggs v. Glen, 7 Mo. 572; Broughton v. Ful- ler, 9 Vt. 373; Warring «. Williams, 8 Pick. 322. 300 UNLAWFUL AGREEMENTS. creditor reserves his rights against the surety (m), in which case the surety's right to be indemnified by the principal debtor continues (n). One reported case [ -fa 243] constitutes an -fa apparent exception to the general rule, but is really none, as there the nominal giving of time had in substance the effect of accelerating the creditor's remedy (o). " If the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety requires, him to do, and the eventual remedy of the surety himself against the principal debtor is thereby impaired, the surety is dis- charged " (p). "A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of suretyship is entered into, whether the surety knows of the existence of such security or not; and if the creditor loses or without the consent of the surety parts with such security, the surety is discharged to the extent of the value of, the security" (q). Not only an absolute parting with the security, but any dealing with it, such that the surety cannot have the benefit of it in the same condition in which it existed in the creditor's hands, will have this effect (r). For the same reason, if there be joint sure- ties, and the debtor releases one, it is a release to all; otherwise if the sureties are several (s). H. L. 348; Green v. Wynn, 4 Ch. 204; Bateson v. Gosling, L. E. 7 C. P. 9. (m) Whether the surety knows of it or not; Webb v. Hewitt, 4 K. & J. 438, 442; and see per Lord Hatherly, 7 Ch. 150. (») Close v. Close, 4 D. M. G. 176', 185. The reasonableness of the rule is open to question (it has been carried. "to the verge of sense," Bret, L. J. 3 Q. B. D. at p. 509), but it. is firmly estab- lished. See per Cur. in Swire v. Eedman, 1 Q. B. D. 541-2. (o) Hulme v. Coles, 2 Sim. 12. (p) I. C. A. s. 139 (= Story, Eq. Jur. \ 325 nearly); Watson t). Allcock, 4 D. M. G. 242, supra, p. 160; Burgess v. Eve, 13 Eq. 450; Phillips v. Foxall, L. E. 7 Q. B. 666; Sanderson v. Aston, L. E. 8 Ex. 73. (?) I. C. A. s. 141. Mayhew v. Cricket, 2 Swanst. 185, 191; Wulff v. Jay, L. E. 7 Q. B. 756, 762; Bechervaise v. Lewis, L. E. 7 C. P. 377; securities dow subsist notwithstanding payment of the debt for the benefit of a suretv who has paid, Merc. Law Amendment Act 1856, 19 & 20 Vict.'c. 97, s. 5. And see 2 Wh. & T. L. C. (4th ed.) 1002. During the currency of a bill of ex- change an indorser is not a surety for the accepter. But after notice of dishonour he is entitled in like manner as if he were a surety to the benefit of all payments made and securities given by the acceptor to the holder: Duncan, Fox & Co. v. North & South Wales Bank, 6 App. Ca. 1. revg s. c. in C. A. 11 Ch. D. 88. (r) Pledge v. Buss, Johns. 663. (s) Ward v. Bank of New Zealand, (J. C.) 8 App. Ca. 755. DEALINGS BY AGENT AGAINST DUTY. 301 /?. " If an agent deals on his own account in the Dealings by business of the agency without first obtaining the con- agent in the sent of his principal and acquainting him with all ™ e a tency material circumstances -Jf which have come to his own [ jl 244 1 knowledge on the subject, the principal may repudiate on his own the transaction." (t): w the Indian Act goes on to add, account. " if the case show either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him," but these qualifications are not recognized in English law (u). " If an agent without the knowledge of his principal deals in the business of the agency on his own account instead of on account of his principal, the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction" (x). 13 These rules are well known and established and have been over and over again asserted in the most general terms. The commonest case is that of an agent for sale himself becoming the purchaser, or conversely; " He who undertakes to act for another in any matter shall not in the same matter act for himself. 14 There- fore a trustee for sale shall not gain any advantage by being himself the person to buy." 15 " An agent to sell shall not convert himself into a purchaser unless he can make it perfectly clear that he furnished his em- ployer with all the knowledge which he himself pos- sessed" (y). "It is an axiom of the law of principal and agent that a broker employed to sell cannot himself become the buyer, nor can a broker employed to buy become himself the seller, without distinct notice to the principal, so that the latter may object if he think proper" (z). If the local usage of a particular trade (l) I. C. A. s. 215. (u) See Story on Agency, \ 210; Ex parte Lacey, 6 Ves. 626. (x) I. C. A. s. 216. (y) Whichcote v. Lawrence, 3 Ves. 750; Lowther v. Lowther, 13 Ves. 95, 103; and see Charter v. Trevelyan, 11 CI. & F. 714, 732. (z) Per Willes, J. in Mollett v. Eobinson, L. E. 5 C. P. at p. 12 Feeter v. Heath, 11 Wend. 477: Laying v. Stewart, 1 W. & S. 222: Demming v. Bullitt, 1 Blackf. 241. 13 Seymour v. Shea, 62 Iowa, 708; Wheeler v. Willard, 44 Vt. 640; Davis v. Hamlin, 108 111. 39; Motley v. Id., 7 Iredell, 211; Bank v. Simons, 133 Mass. 415. 14 All his acts must be in the principal's interests, none in his own. Dodd. v. Wakeman. 11 C. E. Green, 484; Whelan v. McCreary, 64 Ala. 319; Byrd v. Hughes, 81 111. 174. 15 Scott v. Umbarger, 41 Cal. 419; Staats t>. Bergen, 2 C. E. Green, 544; Miles v. Wheeler, 43 111. 123; Eoberts v. Id., 65 N. C, 27. 302 UNLAWFUL AGREEMENTS. or market countervenes this axiom by "converting a broker employed to buy into a principal selling for him- self," it cannot be treated as a custom so as to bind a [ -^ 245] principal -jf dealing in that trade or market through a broker, but himself ignorant of the usage (a). The rule is not arbitrary or technical, but rests on the principal that an agent cannot be allowed to put him- self in a position in which his interest and his duty are in conflict, and the Court will not consider "whether the principal did or did not suffer any injury in fact by rea- son of the dealing of the agent; for the safety of man- kind requires that no agent shall be able to put his prin- cipal to the danger of such an inquiry as that." It is a corollary from the main rule that so long as a contract for sale made by an agent remains executory he cannot re-purchase the property from his own purchaser except for the benefit of his principal (b). A like rule applies to the case of an executor purchasing any part of the assets for himself. But it is put in this somewhat more stringent form, that the burden of proof is on the execu- tor to show that the transaction is a fair one. This brings it very near to the doctrine of Undue Influence, of which in a later chapter. It makes no difference that the legaiee from whom the purchase was made was also co-execu- tor (c). Another branch of the same principle is to be found in the rules against trustees and limited owners re- newing leases or purchasing reversions for themselves(d). Again: " It may be laid down as a general principle that in all cases where a person is either actually or constructively an agent for other persons, all profits and advantages made by him in the business beyond his or- dinary compensation are to be for the benefit of his [ "^f 246] employers " (e). 16 -fr " If a person makes any profit by 655. Cp. Guest v. Smythe, 5 Ch. 551, per Giffard, L. J. ; Shar- man v. Brandt, L. E. 6 Q. B. 720. (a.) Robinson v. Mollett, LE.7H.1. 802, 838; and further as to alleged customs of this kind De Bussche v. Alt, 8 Ch. D. 286. For the special application of the rule to the duty of direct- ors of companies, Hay's ca. 10 Ch. 593; Albion Steel Wire Co. v. Martin, 1 Ch. D. at p. 585. per Jessel, M. E. ; as to promoters, New Sombrero Phosphate Co. v. Erlanger 5 Ch. D. 73. (b) Parker v. MoKenna, 10 Ch. 96, 118, 124, 125. (c) Gray v. Warner, 16 Eq. 577. (d) Notes to Keech v. Sandford, in 1 Wh. & T. L. C. The last case on the subject is Trumper v. Trumper, 14 Eq. 295, 8Ch. 870. On the general rule see also Marsh v. Whitmore (Sup. Court, U. S.), 21 Wall. 178. (e) Story on Agency \ 211, adopted by the Court in Morison v. Thompson, L. E. 9 Q. B. 480, 485, where several cases are collected. 16 Long v. Mulford, 17 Ohio, 484. DEALINGS BY AGENT AGAINST DUTY. 303 being employed contrary to his trust, the employer has a right to call back that profit " (/). And it is not enough for an agent who is himself interested in the matter of the agency to tell his principal that he has some interest: he must give full information of all mate- rial facts (g). v Even this is not all: an agent, or at any rate a pro- fessional adviser, cannot keep any benefit which may happen to result to him from his own ignorance or neg- ligence in executing his duty. In such a case he is con- sidered a trustee for the persons who would be entitled to the benefit if he had done his duty properly (h). In this class of cases the rule seems to be that the trans- Nature of action improperly entered into by the agent is voidable remedies so far as the nature of the case admits. 18 Where it can applicable, not be avoided as against third parties, the principal can recover the profit from the agent. But where there are a principal, an agent, and a third party contracting with the principal and cognizant of the agent's employment, and there are dealings between the third party and the agent which give the agent an interest against his duty, there the principal on discovering this has the option of rescinding the contract altogether. 19 Thus when com- pany A. contracted to make a telegraph cable for com- pany B., and a term of the contract was that the work should be approved by C, the engineer of company B., and G. took an undisclosed sub-contract from company A. for doing the same work; and further it appeared that this arrangement was contemplated when the con- tract was entered into; it was held that company B. might rescind the contract («'). •jf ■/■. The rale as to settlements " in fraud of marital [ -^ 247] right" was thus given by Lord Landale (k) : — Settlements s s J v ' in fraud of marital (/) Massey v. Davies, 7 Ves. 317, 320. right. (g) See authorities collected, and observations of the Court there- on, Dunne v. English, 18 Eq. 524, 534. (h) Bulkley v. Wilford, 2 CI. & F. 102. Cp. Corley v. Lord Stafford, 1 De G & J. 238. (i) Panama & S. Pacific Telegraph Co. v. India Rubber &c. Co., 10 Ch. 515. (k) Cp. on this subject Da v. Con v. vol. 3, pt. 2. 707. 17 If an agent does more than he is authorized, it will not vitiate what is properly done if they are separable, otherwise it will. Crozier v. Carr, 11 Texas, 376; Jessup v. City Bank, 14 "Wis. 331; Drumright v. Philpot, 16 Ga, 424. 18 Pearsoll v. Chapin, 8 Wright (Pa.), 9. 19 The principal cannot ratify a part of the agent's act and re- pudiate the rest. Eberts v. Selover, 44 Mich. 519; Crans v. Hunter, 28 N. Y. 389. 304 TTNLAWFUL AGREEMENTS. " If a woman entitled to property enters into a treaty for mar- riage and during the treaty represents to her intended husband that she is so entitled, that upon her marriage he will become entitled jure mariii, and if during the same treaty she clandes- tinely conveys away the property in such manner as to defeat his marital right and secure to herself the separate use of it, and the concealment continues till the marriage takes place, there can be no doubt but that a fraud is thus practised on the husband and he is entitled to relief" (I). Moreover — "If both the property and the mode of its convey- ance, pending the marriage treaty, were concealed from the in- tended husband, as in the case of Goddard v. Sno w (m) , there is still a fraud practised on the husband. The non-acquisition of prop- erty of which he had no notice is no disappointment, but still his legal right to property actually existing is defeated " (»). Conditions I n order to have such a settlement set aside the hus- for setting band must prove — them aside. (j) That he was the intended. husband at the date of the settlement — i.e. that there was then a complete con- tract to marry which continued until the marriage (o). (ii) That the settlement was not known to him till after the marriage (p). What if the intended husbaud knows that some dis- position has been or is to be made, but not itB contents ? The doctrine as far as it has gone seems to be that such knowledge makes it the duty of the husband to inform himself, and if he omits inquiry he cannot afterwards complain (q); but if he does inquire, and incorrect in- formation is given, this is equivalent to total conceal- ment (r). According to the modern dQctrine no differ- [ -^ 248] ence is made by collateral -^j- circumstances, " such as the poverty of the husband — the fact that he has made no settlement upon the wife— the reasonable character of the settlement [which is impeached], as in the case of a settlement upon the children of a former mar- riage " or the like. Nevertheless relief may be refused on the ground that the .husband's conduct before the marriage has been (l) England v. Downs, 2 Beav. 522, 528. (m) 1 Russ. 485. See the earlier authorities there discussed. (n) 2 Beav. 529. (o) England v. Downes, supra. Cp. Downes v. Jennings, 32 Beav. 290 294. (p) St. George v. Wake, 1 My. &K. 610,- 625. (q) Wrigley v. Swainson, 3 De G. & Sm. 458. (r)Prideauxj). Lonsdale, 4Giff. 159. The Court of Appeal (1 D. •J. S. 433, 438) declined to say anything on this part of the case, affirming the decision on the ground that the settlor herself did not understand the effect of her act. FRAUD ON MARITAL RIGHT. 305 such as to " put it out of the power of the wife effect- ually to make any stipulation for the settlement of her property " : as where there has been previous seduc- tion (s). It is said that if the husband discovers the settle- ment before the marriage takes place, he may rescind the contract to marry, and will have a good defence to an action for breach of promise of marriage (t). This seems only reasonable, but we do not know of any direct authority for it. Finally we venture to suggest that the Semble the doctrine might well be put on a broader ground than principle is appears in the cases. wader. The contract to marry gives rise to a new status be- tween the parties, to which mutual duties are incident beyond the simple performance of the contract by mar- riage at the time expressed or contemplated (u). Among these may fairly be reckoned the observance of the ut- most good faith in all things, and in particular the duty of not making without the other party's consent any disposition of property of such a permanent and con- siderable kind as might affect the order and condition of the future household. Such conduct shows a want of confidence which the other party is entitled to treat as incompatible with the marriage contract. Looking at it in this way, there seems no reason why the rule should not apply to both parties equally, -jfc- The ex- [ "A" 249] pectation of acquiring a marital right cannot be said really to exist in most cases. There is in truth a mu- tual expectation of acquiring what is practically a com- mon interest. It is obvious, however, that as a rule the only motive for a clandestine settlement is the woman's desire to exclude the marital right of the future hus- band. Since no such motive can exist on the other side, the converse case of a clandestine settlement by the man is most unlikely to happen ; there is little other chance, therefore, that the correctness of the view here transactions suggested will ever be brought to a decisive test. One t^ated as reported case, however, supplies some analogy. By a m arri ag e POn marriage settlement the husband's father settled a con tract." (s) Taylor v. Pugh, 1 Ha. 608, 614-6. In Downes v. Jennings, 32 Beav. 290, no importance was attached to the parties having lived together before marriage. But the circumstances were such as to show that their conduct was deliberate. The husband's right to set aside the settlement, like all rights of setting aside or rescinding voidable transactions, may be lost by acquiescence or delay amounting to proof of acquiescence : Loader v. Clarke, 2 Mac. & G. 382. (t) By Sir John Leach, M. E. in St. George v. "Wake, supra. (u) Frost v. Knight, L. R. 7 Ex. Ill, 115, 118. 20 PRINCIPLES OF CONTRACT. 306 UNLAWFUL AGREEMENTS. 4. Marriage within prohibited degrees. [*250] jointure on the wife : by a secret bond of even date the husband indemnified his father against the payment of it : this indemnity was held void as '• a fraud upon the faith of the marriage contract (x). 4. Marriages within the prohibited degrees of kindred and affinity are another class of transactions contrary to positive law. For although no direct temporal penal- ties are attached to them, they have been made the sub- ject of express and definite statutory prohibition (y). w They formerly could not be treated as void unless de- clared so by an ecclesiastical Court in the lifetime of the parties: but by a modern statute (5 & 6 Wm. 4, c. 54) they are now absolutely void for all purposes. An executory contract to marry within the prohibited de- grees is of course absolutely void also (z), and would in- deed have been so before the statute. These rules are not local, like other rules of -^ municipal law prescrib- ing the solemnities of the marriage ceremony, requir- ing the consent of particular persons, or the like; the legislature has referred the prohibition to public grounds of a general nature (speaking of these marriages as "contrary to Grod's law") (a), and it concerns not the (x) Palmer r. Neave, 11 Ves. 165. Cp. the other similar oases cited in Story Eq. Jur. \\ 266-271. One or two of these, how- ever, are really cases of estoppel. (y) 32 H. 8, c. 38, and earlier repealed statutes of the same reign. It is the better supported opinion that 5 & 6 Wm. 4, c. 54, does not contain any new substantive prohibition. See Brook v. Brook, 9 H. L. C. 193. (z) It seems from Millward v. Littlewood, 5 Ex. 775, 20 L. J. Ex. 2, that in the barely possible case of the relationship being known to only one of the parties, by whom it is fraudulently concealed from the other, the innocent party may sue as for a breach of contract, though the performance of the agreement would be unlawful. (a) The use of these particular words seems of little import- ance. The true reason is shortly put by Savigny, Syst. 8. 326: "die hier einschlagenden Gesetze, dieauf sittlichen Eiicksichten beruhen, haben eine streng positive Natur." Savigny's authority is perhaps sufficient to defend the doctrine of Brook v. Brook against the caustic criticism passed upon it by the Chief Justice of Massachusetts in Commonwealth v. Lane, 113 Mass. at p. 473: — ' " The judgment proceeds upon the ground that an Act of Par- liament is not merely an ordinance of man but a conclusive de- claration of the law of God; and the result is that the law of God, as declared by Act of Parliament, and expounded by the House of Lords, varies according to the time, place, length of life of parties, pecuniary interests of third' persons, petitions to human tribunals, and technical rules of statutory construction and judicial procedure." 20 Hathaway v. Moran, 44 Me. 67; Gaslight Co. v. Turner, 8 Scott, 609; Cook v. Phillips, 56 N. Y. 310. PROHIBITORY STATUTES. 307 form but the- substance of the contract; it therefore applies to the marriages of domiciled British subjects, in whatever part of the world the ceremony be per- formed, and whether the particular marriage is or is not of a kind allowed by the local law (6). Where a marriage has been contracted in England between foreigners domiciled abroad, English Courts will recognize disabilities, though not being iuris gen- tium, imposed by the law of the domicil of both par- ties (c): but a marriage celebrated in England is not held invalid by English Courts on the ground that one of the parties is subject by the law of his or her domicil to a prohibition not recognized by English law, at all events where the other party's domicil is English (d). The "Act for the better regulating the future mar- Royal riages of the Eoyal Family" (12 Geo. 3, c. 11) imposes Marriage on the -^ persons within its operation disabilities (ab- 7 C \ ok-ii solute before the age of 25, qualified after that age) to ^ ^ ' J marry without the consent of the Sovereign: and this disability is personal, not local, so that a marriage without consent is equally invalid wherever cele- brated (e). 5. Moreover a great variety of dealings of which con- 5 Agree- tracts form part, or to which they are incident in the ments illegal ordinary course of affairs, are for extremely various rea- by statute, sons forbidden or restricted by statute. 21 During the last century in particular, Acts of Parliament regulating the conduct of sundry trades and occupations were strangely multiplied. Most of these are now repealed, but the decisions upon them established principles on which our Courts still act in dealing with* statutes of this kind. The question whether a particular transaction comes Construction within the meaning of a prohibitory statute is manifestly ° prohibi- (b) Brook r. Brook, supra. See per Lord Campbell at p. 220. tutes. He also doubted whether a marriage allowed by the law of the place, but contracted by English subjects who had come thereon purpose to evade the English law, would be recognized even by the local courts. Cp. Sottomayor v. De Barros, infra. (c) Sottomayor v. De Barros (C. A.) 3 P. D. 1. (d) Sottomayor v. De Barros, 5 P. D. 94, dissenting from some dicta in the previous judgment of the C. A., which however went on a supposed different state of the facts. (e) The Sussex Peerage case, 11 CI. & F. 85. 21 Statutes sometimes make coiitracts unlawful that were law- ful before, and if by statute of this sort the fulfilment of what was a valid agreement is rendered illegal, things already done under it remain valid. Bradford v. Jenkins, 41 Miss. '628; Ben- nett v. Woolfolk, 15 Ga. 213. 308 UNLAWFUL AGREEMENTS. one of construction. So far as we have to do with it here, we have in each case to ask, Does the Act mean to forbid this agreement or not? And in each case the language of the particular Act must be considered on its own footing. Decisions on the same Act may of course afford direct authority. But decisions on more or less similar enactments, and even on previous en- actments on the same subject, cannot as a rule be re- garded as giving more than analogies. Attempts have indeed been made at different times to lay down fixed rules, nominally of construction, but really amounting to rules of law which would control rather than ascer- tain the expressed intention of the legislature. But in recent times our courts have fnlly and explicitly dis- claimed any such powers of interpretation. " The only rule for the construction of Acts of Parliament is that they should be construed according to the intent of the Par- liament which passed the Act; " provided that the words be "sufficient to accomplish the manifest purpose of the Act (/). [ -^ 252] "fc In like manner it is now understood that one or two dicta which are to be found in the books, suggest- ing that an Act of Parliament against "common right" or "natural equity" would be void, must stand as warn- ing rather than authority (g). The effect of plain and unambiguous words is not to be limited by judicial con- struction even" though anomalous results should fol- low (h). Policy of O n the other hand the general intention is to be re- statutes, garded, and may if necessary prevail over particular ex- pressions, no less than in the interpretation of private instruments (i). But this must be an intention col- lected from what the legislature has said, not arrived at by conjectures of what the legislature might or ought to have meant. A transaction not in itself immoral is not to be held unlawful on a conjectural view of the policy of a statute (fc). We may now understand the (/) Opinion of the Judges in the Sussex Peerage, ca. 11 CI. & P. at p. 143, per Tindal, C. J.; per Lord Brougham at p. 150. And see per Knight Bruce, L. J., Crofts v. Middleton, 8 D. M. G. 217; per Lord Blackburn, in River Wear Commrs. v. Adam- son, 2 App. Ca. at p. 764. (g) Per Willes, J. Lee v. Bude, &c. Ry. Co. L. R. 6 C. P. 576. 582. Cp. for the old view the dictum of Lord Holt, 12 Mad. 687-8, "An act of parliament can do no wrong, though it may do sev- eral things, that look pretty odd, " and the context. (A) Cargo ex Argus, &c, L. R. 5 P. C. at pp. 152-3. (i) As to which see L. R. 2 Ex. 198. (k) Barton v. Muir, L. R. 6 P. C. 134. PROHIBITORY STATUTES. 309 meaning of this last phrase, which is not uncommon in cases of the kind now before us. The true policy of a statute, in a court of justice at all events, is neither more nor less than its right and reasonable construction. The Courts no longer undertake either to cut Bhort or to widen the effect of legislation according to their views of what ought to be the law. "Before we can make out that a contract is illegal under a statute, we must make out distinctly that the statute has provided that it shall be so" {I). The cases in which acts of corporate bodies created for special purposes have been held void as "contrary to the policy of the legislature " and tending to defeat the objects of the incorporation have already been con- sidered in Ch. II. Eightly understood, they are quite consistent, it is believed, with what is here said. ^-These principles, when applied to the more limited [ -jf 253] subject-matter of prohibitory statutes, give the follow- ing corollaries: (a). When a transaction is forbidden, the grounds of Eules. the prohibition are immaterial. Courts of justice can- a. No dif- not take note of any difference between mala prohibita ference be- (i. e. things which if not forbidden by positive law tween would not be immoral) and mala in se (i. e. things kibiiumsiriA which are so forbidden as being immoral). malum in se. (b). The imposition of a penalty 22 by the legislature b. Penalty on any specific act or omission is prima facie equivalent prima facie to an express prohibition. lm ^,°h' S f These rules are established by the case of Bensley v. p Bignold (m), which decided that a printer could not re- cover for his work or materials when he had omitted to print his name on the work printed, as then required by statute (n). It was argued that the contract was good, as the Act contained no specific prohibition, but only a direction sanctioned by a penalty. But the Court held unanimously that this was untenable, and a party could not be permitted to sue on a contract where the whole subject-matter was "in direct violation of the provisions of an Act of Parliament." And Best, J. said that the distinction between mala prohibita and mala in se was long since exploded. The Same doc- trine has repeatedly been enounced in later cases. (I) Field, J. 4 Q. B. D. at p. 224. (m) 5 B. & Aid. 335. (n) See now 32 & 33 Vict. c. 24. 22 Bartlett v. Vinor, Carth. 251; Ferguson v. Norman, 5 Bing. 76. 310 UNLAWFUL AGREEMENTS. Thus, for example, by the Court of Exchequer: "When the contract which the plaintiff seeks to enforce, be it express or implied, is expressly or by implication forbidden by the common or statute law, no Court will lend its assistance to give it effect. It is equally clear that a contract is void if pro- hibited by a statute though the statute inflicts a penalty only, because such a penalty implies a prohibition" (o). [ -fa 254] -fa It is needless to discuss the "policy of the law" 23 ■when it is distinctly enunciated by a statutory pro- hibition (p). c But ab- ( c )" Conversely, the absence of a penalty, or the sence of failure of a penal clause in the particular instance, will penalty does not prevent the Court from giving effect to a substan- not alter ex- ^ ve prohibition (q). hibition°" ( D ) - ^ na t the law forbids to be done directly cannot d Whatmav ^ e ma< ^ e lawful by being done indirectly. 24 not be done In Booth v. Bank of England (r) a joint-stock bank directly procured its manager to accept certain bills on the must not be understanding that the bank would find f unds, these bills directly being such as the bank itself could not have accepted Booth v without violating the privileges of the Bank of England. Bank of It was held by the House of Lords, following the opin- England. ion of the judges, that this proceeding "must equally be a violation of the rights and privileges of the Bank of England, upon the principle that whatever is pro- hibited by law to be done directly cannot legally be effected by an indirect and circuitous contrivance:" for the acceptor was merely nominal, and the bills were in fact meant to circulate on the credit of the bank. Bank of U. S. In Bank of United States v. Owens (s) (Supreme v. Owens. Court, TJ. S.) the charter of the bank forbade the tak- ing of a greater rate of interest than six per cent., but did not say that a contract should be void in which such interest was taken. A note payable in gold was (o) Cope v. Rowlands, 2 M. & W. 149, 157. Cp. Chambers v. Manchester & Milford By. Co., 5 B. & S. 588, 33 L. J. Q. B. 268i Be Cork & Youghal Ey. Co., 4 Ch. 748, 758, (p) See per Lord Cranworth, Ex parte Neilson, 3 D. M. G. 550, 566. (q) Sussex Peerage ca. 11 CI. & F. at pp. 148-9. (r) 7 CI. & F. 509, 540, upholding Bank of England v. Ander- son, 2 Keen, 328, 3 Bing. N. C. 589. (s) 2 Peters, 527. 23 This term is sometimes employed in the same sense as pub- lic policy and the distinction between the two is not well estab- lished. Only in the law's channels can rights of persons and property be made to flow. 24 Wells v. People, 71 111. 532. In re Maeleay, Law Eep. 20 Eq. 186. PROHIBITORY STATUTES. 311 discounted by a branch of the bank in a depreciated local paper currency at its nominal value, bo that the real discount was much more than six per cent. The Court held this transaction void, though there was no express prohibition of an agreement to take higher in- terest, and though the charter spoke only of taking, not of reserving interest. Parts of the judgment are as follows: "A fraud upon a statute is a -fa violation [ ~fc 255] of the statute." " It cannot be permitted by law to stipulate for the reservation of that which it is not permitted to receive. In those instances in which Courts are called upon to inflict a penalty it is neces- sarily otherwise; for then the actual receipt is gener- ally necessary to consummate the offence. But when the restrictive policy of a law alone is in contemplation, we hold it to be an universal rule that it is unlawful to contract to do that whicli it is unlawful to do." " There can be no civil right where there can be no legal remedy, and there can be no legal remedy for that which is itself illegal . . . there is no distinction as to vitiating the contract between malum in se and malum prohibitum (t). The cases are similar in principle in which trans- actions have been held void as attempts to evade the bankruptcy law : thus, to take only one example, a stipu- lation that a security shall be increased in the event of the debtor's bankruptcy, or any provision designed for the like purpose and having the like effect, is void (u). When conditions are prescribed by statute for the Where conduct of any particular business or profession, and conditions "orGSCn nGCl such conditions are not observed, agreements made in f or con( j uc t t the course of such business or profession — particular (e) are void if it appears by the context that the ob- trade, &c, ject of the legislature in imposing the condition was the non-observ- maintenance of public order or safety or the protection them of the persons dealing with those on whom the condition e. avoids is imposed: 25 agreements if the con- (<) 2 Peters, 536, 539. ditions are (u) Ex parte Mackay, 8 Qh. 643; Ex parte Williams (C. A.), 7 f or o-eneral Ch. D. 138, where the device used was the attornment of the public debtor to his mortgagee at an excessive rent; Ex parte Jackson purposes' (C. A.), 14 Ch. D. 725. It must be shown, to vitiate a transac- tion on this ground, that the provision was inserted in contem- plation of bankruptcy and forthe purpose of defeating the bank- ruptcy law: Ex parte Voisey, C. A. 21 Ch. D. 442, 461. 25 Swanger v. Mayberry, 59 Cal. 91; Lewis v. Latham, 74 N. C. 283; Hanauer v. Doane, 12 Wallace, 342. 312 UNLAWFUL AGREEMENTS. f. not if for (f) are valid if no specific penalty is attached to the merely specific transaction, and if it appears that the condi- r i oKfl-i tion -fa was imposed for merely administrative purposes, live pur- e - 0- ^ ne convenient collection of the revenue(x). 26 Illustrations. The following are instances illustrating this distinc- tion: — Agkeement Void. Ritchie v. Smith, 6 C. B. 462, 18 L. J. C. P. 9. The owner of a i licensed house underlet part of it to another person, in order that he might there deal in liquor on his own account under colour of his lessor's licence and without obtaining a separate licence. This agreement was void, its purpose being to enable one of ]the parties to infringe an Act passed for the protection of public morals: (the licensing Acts are of this nature, and not merely for the benefit of the revenue, for this reason, that licences are not to be had as a matter of right by paying for them. ) For the same reason and also because there is a specific penalty for each offence against the licensing law, it seems that a sale of liquor in an unlicensed house is void (y). Hamilton v. Grainger, 5 H. & N. 40. Taylor v. Crowland Gar, Co., 10 Ex. 293, 23 L. J. Ex. 254. A penalty being imposed by statute on unqualified persons acting as conveyancers (z), the Court held that the object was not merely the gain to the revenue from the duties on certificates, but the protection of the public from unqualified practitioners; an un- qualified person was therefore not allowed to recover for work of this nature. Cp. Leman v. Houseley, L. R. i0 Q. B. 66. Fergusson v. Norman, 5 Bing. N. C. 76. When a pawnbroker lent money without complying with the requirements of the statute, the loan was void and he had no lien on the pledge (a). In Stevens v. Gourley, 7 C. B. N. 8. 99, 29 L. J. C. P. 1, a builder was not allowed to recover the price of putting up a wooden shed contrary to the regulations imposed by the Metro- politan Building Act, 18 & 19 Vict. c. 122. The only question in the case was whether the structure was a building within the (x) This statement differs only verbally from from Mr. Benja- min's. (On Sale, p. 526.) We have tried to put it in a rather more general form. [y) For the penal enactments now in force see the Licensing Act, 1872, 35 & 36 Vict. c. 94, ss. 3-8. (z) Now by 33 & 84 Vict. c. 97, s. 60. (a) The persent pawnbrokers Act (1872; 35 &36 Vict, c. 93, s. 51), enacts that an offence against the Act. by a pawnbroker, not being an offence against any provision relating to licences, shall not avoid the' contract or deprive him of his lien. 26 McConnel v. Kitchens, 20 S. C. 430: Deans v. McLendon, 30 Mis3. 343; Curran v. Downs, 3 Mo. App. 468. PROHIBITORY STATUTES. 313 Act. But note that here the prohibition was for a public pur- pose, namely to guard against the risk of fire. Burton v. Piggott, L. R. 10 Q. B. 86. By 5 & 6 Wm. 4, c. 50, s. 46, a penalty is imposed on any surveyor of highways who , shall have an interest in any contract, or sell materials, &c. for work on any highway under his care, unless he first obtain a licence from two justices. The >^- effect of this is that an un- [ ^f 257] licensed contract by a surveyor to perform work or supply mat- erials for any highway under his care is absolutely illegal, and the justices have no discretion {under s. 44) to allow payments in respect of it. Contract not Avoibed. Bailey v. Harris, 12 Q. B. 905, 18 L. J. Q. B. 115. A contract of sale is not void merely because the goods are liable to seizure and forfeiture to the Crown under the excise laws. Smith v. dlaiohood, 14 M. & W. 452. The sale of an exciseable article is not avoided by the seller having omitted to paint up his name on the licensed premises as required by 6 Geo. 4, c. 81, s. 25. Probably this decision would govern the construction of the very similar enactment in the Licensing Act, 1872 (35 & 36 Vict. c. 94, s. 11). Smith v. Undo, 4 C. B. N. S. 395, in Ex. Ch. 5 C. B. N. S. 587. One who acts as a broker in the City of London without being licensed under 6 Ann. c. 68 (Rev. Stat.: al. 16) and 57 Geo. 3, c. lx. (i) cannot recover any commission, but a purchase of shares made by him in the market is not void: and if he has to pay the purchase-money by the usage of the market, he can recover from his principal the money so paid. And see further, as to statutory prohibitions of this kind, Ben- jamin on Sale, 521 sqq. And in general an agreement which the law forbids to be made is void if made. 27 But an agreement for- bidden by statute may be saved from being void by the statute itself, and on the other hand an agreement made void or not enforceable by statute is not neces- sarily illegal. An agreement may be forbidden with- out being void, or void without being forbidden. (b) These Acts are repealed as to the power of the city court to make rules, &c, but not as to the necessity of brokers being admitted by the somewhat obscurely framed London Brokers Belief Act, 1870, 33 & 34 Vict. c. 60. ' 27 Brackett v. Hoyt, 9 Post. (N. H.) 264; Milton r. Haden, 32 Ala. 30; Bell v. Quinn, 2 Sandf. 146; Maybin v. Coulen, 4 Dal- las, 298; Spaldin v. Preston, 21 Vt. 9; Solomon v. Dreschler, 4 Minn. 278; Nourse v. Pope, 13 Allen, 87, 314 UNLAWFUL AGREEMENTS. G. Agree- ment not void though forbidden, if statute expressly so providrs. [*258] (g). Where a statute forbids an agreement, but says that if made it shall not be void, then if made it is a contract which the Court must enforce. By 1 & 2 Vict. c. 106, it is unlawful for a spiritual person to engage in trade, and the ecclesiastical Court may inflict penalties for it. But by s. 31 a contract is not to -fa be void by reason only of being entered into by a spiritual person contrary to the Act. It was con- tended without success in Leaiis v. Bright (c) that this proviso could not apply when the other party knew with whom he was dealing. But the Court held that the knowledge of the other party was immaterial; the legislature meant to provide against the scandal of such a defence being set up. And Erie, J. said that one main purpose of the law was to make people perform their contracts, and in this case it fortunately could be carried out. h. Agree- ment may be simply not enforce- able, but not other- wise unlaw- ful. Wagers. Void, but not abso- (h). "Where no penalty is imposed, and the intention- of the legislature appears to be simply that the agree- ment is not to be enforced, there neither the agreement itself nor the performance of it is to be treated as un- lawful for any other purpose. 28 Modern legislation has produced some very curious results of this kind. In several cases the agreement cannot even be called void, being good and recogniza- ble by the law for some purposes or for every purpose other than that of creating a right of action. These cases are reserved for a special chapter (d). In the case of wagers the agreement is null and void by 8 & 9 Vict. c. 109, s. 18, and money won upon a wager cannot be recovered either from the loser or from 4 E. & B. 917, 24 L. J. Q. B. 191. (d) See Ch. XII., On Agreements of Imperfect Obligation. The distinction between an enactment which imposes a penalty without making the transaction void, and one which makes the forbidden transaction void, is expressed in the civil law by the terms (which are classical) minus quam perfecta lex and perfeela lex. Ulp. Keg. 1 § 2, cp. Sav. Syst. 4. 550. A constitution of Theodosius and Valentinian (Cod. 1. 14. de leg. 5) enjoined that all prohibitory enactments were to be construed as avoiding the transactions prohibited by them (that is, as leges perfectae) whether it were so expressed or not. 28 A contract executed in consideration of a previous illegal one, or in compromise of differences growing out of it is incapa- ble of being enforced. Everingham v. Meigham, 55 Wis. 354; Wilson v. Bozeman-, 48 Ala. 71, and Pierce v. Kibbee, 51 Vt. 559; Cate v. Blair, 6 Coldw. 639; King v. Winants, 71 N. C. 469. WAGES AND GAMING. 315 a stakeholder " (with a saving as to subscriptions or lately contributions for prizes or money to be awarded " to i^egal. the winner of any lawful game, sport, pastime, or exer- j^ es v ' cise;" the saving extends only to cases where there is a real competition -^ between two or more persons (e), [ ^ 259] and the " subscription or contribution " is not rooaey deposited with a stake- holder by way of wager) (f). m Wagers were not as such unlawful or unenforceable at common law (we shall have to recur to this under the head of "public policy "): and since the statute does not create any offence or impose any penalty, a man may still without violating any law make a wager, and if he loses it pay the money or give a note for the amount. The consideration for a note so given is in point of law not an illegal consideration, but merely no consideration at all. 31 The difference is important to the subsequent holder of such a note. If the transac- tion between the original parties were fraudulent or in the proper sense illegal, the burden of proof would be on the holder to show that he was in fact a holder for value; but here the ordinary presumption in favour of the holder of a negotiable instrument is not excluded (gf). 32 In like manner " if a party loses a wager and requests another to pay it for him, he is liable to the party so paying it for money paid at his request:" as where a broker is employed in fictitious dealings in shares which are really wagers on the price of shares, and according to custom himself pays the amount due (h). This goes (e) e. g. a -wager that a horse will trot eighteen miles in an hour is not within it, as there can be no winner in the true sense of the clause: Batson v. Newman (C. A.), 1 C. P. D. 573. (/) Diggle v. Higgs (C. A.), 2 Ex. D. 422; Trimble v. Hill (J. C), 5 App. Ca. 342. {g) Fitch v. Jones, 5 E. & B. 238, 24 L. J. Q. B. 293, see judg- ments of Lord Campbell, C. J. and Erie, J. (/() Eosewarne v. Billing, 15 C. B. N. S. 316, 33 L. J. C. P. 55. 29 In re Green, 7 Bis. 338; Baldwin ).'. Flagg, 9 Stew. Ch. 48; Colderwood v. McCrea, 11 Bradw. 543; Williamson r. Bailey, 78 Mo. 636. 30 The term "bet" has nearly the same meaning as wager, but one difference not always observed may be that while wager denotes the contract, bet indicates the thing contracted for. 1 Bishop, Stat., Crimes, See. 870, 871. 31 For if that for which the promise is made proves a nullity, the contract becomes void. House v. Kendall, 55 Texas, 40; Snyder i\ Kurtz, 61 Iowa, 593; Sorells v. McHenry, 38 Ark. 127; Dodge v. Oatis, 27 Kan. 762; Stockmeyer v. Weidner, 32 La. An. 106; Powell v. Subers, 67 Ga. 418; Jeffries v. Lamb, 73 Ind. 202. 32 Lathrop v. Hickson, 67 Ga. 445; Thompson v. Wheeler, etc., Mfg. Co., 29 Kansas, 476. 316 UNLAWFUL AGKEEMENTS. [*260] Agreements in deroga- tion of private Acts of Parlia- ment not necessarily bad. farther than an earlier case in which it was held, in a somewhat guarded manner, that payment by the drawer of racing debts of the acceptor is a good consideration for a bill of exchange («S)- 33 But under another modern statute (5 & 6 Wm. 4, c. 41, s. 1) securities for money won at gaming or betting on games, or lent for gaming or betting, are treated as given for an illegal consideration (k). -^•It would be inappropriate to the general purpose of this work, as well as impracticable within its limits, to enter in detail upon the contents or construction of the statutes which prohibit or' affect various kinds of con- tracts by regulating particular professions and occupa- tions or otherwise. It has been attempted, however, to make some collection of them in the Appendix (I). The rules and principles of law which disallow agree- ments whose object is to contravene or evade an Act of Parliament do not apply to private Acts, so far as these are in the nature of agreements between parties. If any of the persons interested make arrangements between themselves to waive or vary provisions in a private Act relating only to their own interests, it cannot be objected to such an agreement that it is in derogation of, or an attempt to repeal the Act (m). 34 (i) Oulds v. Harrison, 10 Ex. 572, 577. As to recovering money deposited with a stakeholder or agent, see p. 334 below. (fc) The statute does not affect a loan of money to pay a debt previously lost: Ex parte Pyke (C. A.) 8 Ch. D. 754. (Z) See Note H. (to) Savin?). Hoylake Ey. Co., L. E. 1 Ex. 9Cp. anddist. Shaw's claim, 10 Ch. 177. 33 The offering of money on a trial of the speed of horses is not a wager. Deliev v. Plymouth Soc, 57 Iowa, 481; Alford v. Smith, 63 Ind. 58. 34 All bargains for the purchase and sale of things, where there is an express understanding between the parties that the commod- ities or stocks are not to be delivered, but at an agreed time the " difference " between the market values at the two periods are to be adjusted, are illegal, or against public policy so that the courts will not enforce them. Melchert v. American Union Tel. Co., 3 McCrary, 521; Irwin v. Williams, 110 U. S. 499; Kirkpat- rick v. Adams, 20 Fed. Eep., 287; Hantz v. Jewell, 4 Woods, 656. Margains, options, or anything of the kind are gambling contracts, which disturb the course of trade and are not tolerated by the law. North v. Phillips, 8Norris (Pa.), 250; Dickson v. Thomas, 1 Outer- bridge, 278; Yerkes v. Salomon, 11 Hun. 471; Bumsey v. Berry, 65 Me. 570: Barnard v. Backhaus, 52 Wis. 197; Pickeringw. Cease, 79 111. 328; Eudolph v. Winters, 7 Neb. 125; Waterman v. Buck- land, 1 Mo. App. 45. IMMOKAL AGREEMENTS. 317 B. Agreements contrary to morals or good manners. It is not every kind of immoral object or intention that B. Contrary will vitiate an agreement in a Court of justice. 35 When to positive we call a thing immoral in a legal sense we do not mean morality. so much that it is morally wrong as that according to Practically the common understanding of reasonable men it would *^j S ^*ual be a scandal for a Court of justice to treat it as lawful morality^ or indifferent, though the transaction may not come within any positive prohibition or penalty. What sort of things fall within this description is in a general way obvious enough. And the law might well stand substan- tially as it is, according to mo'dern decisions at any rate, upon this ground alone. Some complication has been Influence of introduced, however, by the influence of ecclesiastical ecelesistical law, which on certain points has been very marked, and w " which has certainly brought in a ^-tendency to treat [-^-261] these cases in a peculiar manner, to mix up the princi- ples of ordinary social morality with considerations of a different kind, and with the help of those considera- tions to push them sometimes to extreme conclusions. Having regard to the large powers formerly exercised by spiritual Courts in the control of opinions and con- duct, and even now technically not abolished, it seems certain that everything which our civil Courts recognise as immoral is an offence against ecclesiastical law. Per- haps, indeed, the converse proposition is theoretically true, so far as the ecclesiastical law is not directly con- trary to the common law (n). But this last question may be left aside as merely curious. As a matter of fact sexual immorality, which former- ly was and in theory still is one of the chief subjects of ecclesiastical jurisdiction, is the only or almost the only kind of immorality of which the common law takes notice as such. 36 Probably drunkenness would be on the same footing. It is conceived, for example, that a sale of intoxicating liquor to a man who then and there avowed his intention of making himself or others drunk with it would be void at common law. The ac- tual cases of sale of goods and the like for immoral purposes, on whose analogy this hypothetical one is put, (n) Cp. Lord Westbury's remarks in Hunt v. Hunt, 4 D. F. J. at pp. 226 8, 233. 35 McKinuey v. Reader, 6 Watts, 34; Knowles v. Dabney, 105 Mass. 437. 36 A promise to pay for illicit commerce between the sexes is void even where the act is not indictable. Sherman v. Barrett, 1 McMullin, 147; Wilson v. Ensworth. 85 Ind. 399: Winebren- ner v. Weisger, 3 T. B. Monr. 32. 318 UNLAWFUL AGREEMENTS. Illicit co- [*262] habitation — if future, an illegal con- sideration: if part, no con- sideration. Judgment of Lord Selborne, Ayerst v. Jenkins. depend on the principles applicable to unlawful trans- actions in general, and are accordingly reserved for the last part of this chapter. Putting apart for the pres- ent these cases of indirectly immoral agreements, as they may be called, we find that agreements are held directly immoral in the limited sense above mentioned, on one of two grounds: as providing for or tending to illicit cohabitation, or as tending to disturb or preju- dice the status of lawful marriage ("in derogation of the marriage contract," as it is sometimes expressed). 37 ~*fi ith regard to the first class, the main principle is this, -jc The promise or expectation of future illicit co- habitation is an unlawful consideration, and an agree- ment founded on it is void. 38 Past cohabition is not an unlawful consideration; indeed, there may in some cir- cumstances be a moral obligation on the man to provide for the woman; but the general rule applies (o) that a past executed consideration, whether such as to give rise to a moral duty or not, is equivalent in law to no consideration at all. 39 An agreement made on no other consideration than past cohabitation is merely volun- tary, and is in the same plight as any other voluntary agreement. If under seal it is binding and can be en- forced (p), otherwise not (q). i0 The existence of an express agreement to discontinue the illicit cohabitation, which in law is merely superfluous and adds nothing at all — or the fact of the defendant having previously se- duced the plaintiff, which "adds nothing but an exe- cuted consideration resting on moral grounds only," — can make no difference in this respect (q). The manner in which these principles are applied has been thus stated by Lord Selborne: — "Most of the older authorities on the subject of contracts founded on immoral consideration are collected in the note to (o) But the rule is modern (Ch. IV. p. 169 above), and the earlier cases on this subject belong to a time when a different doctrine prevailed ; they therefore discuss matters which in the modern view are simply irrelevant, e. g. the previous character of the parties. The phrase praemium pudiciliae comes from this period. (p) Gray v. Mathias, 5 Ves. 286. (g) Beaumont v. Reeve, 8 Q. B. 483. 87 Armstrong v. Lester, 43 Iowa, 159. 38 Goodall v. Thurman, 1 Head. 209; BaldyV Stratton, 11 Jones, 316. 39 The law does not imply a prior request. 40 Shenk v. Mingle, 13 S. and E. 29; Cusack v. White, 2 Mill 279. IMMORAL AGREEMENTS. 319 Beni/nn v. Nettlefold (r). Their results may be thus stated: 1. Bonds or covenants founded on past cohabitation, whether adul- terous (s), incestuous, or simply immoral, are valid in law and not liable (unless there are other elements in the case) to be set aside in equity. 2. Such bonds or covenants, if given in consid- eration of future cohabitation, are void in law (/), and therefore of course also void in equity. 3. Relief cannot be given against any such bonds or covenants in equity if the illegal considera- tion appears on the face of the instrument (u). 4. If an illegal consideration does not appear "A - on the face of the instrument [ -^- 263] the objection of particeps criminis will not prevail against a bill of discovery in equity in aid of .the defence to an action at law (&•), [this is now of no consequence in England, owing to the changes in procedure]. 5. Under some (but not under all) circum- stances when the consideration is unlawful, .and does not appear on the face of the instrument, relief may be given to a particeps . criminis in equity" (y). The exception alluded to in the last sentence is pro- bably this: that "where a party to the illegal or im- moral purpose comes himself to be relieved from the obligation he has contracted in respect of it, he must state distinctly and exclusively such grounds of relief as the Court can legally attend to" (z). He must not put his case on the ground of an immoral consideration having in fact failed, or complain that the instrument does not correctly express the terms of an immoral agreement (a). Where a security is given on account of past cohabita- tion, and the illicit connection is afterwards resumed, or even is never broken off, the Court will not presume from that fact alone that the real consideration was future as well as past cohabitation, nor therefore treat the deed as invalid (6). There existed a notion that in some cases the legal (r) 3 Mac. & G. 94, 100. (s) Kaye v. Moore, 1 Sim. & St. 64. It) Walker v. Perkins, 3 Burr. 1568. (u) Gray r. Mathias. 5 Ves. 286; Smyth v. Griffin, 13 Sim. 245, appears to be really nothing else than an instance of the same rule. The rule is or was a general one: Simpson"!). Lord How- den, 3 My. & Cr. 97, 102. (x) Benyon v. Nettlefold, supra. [y) Averst v. Jenkins, 16 Eq. 275, 282. (z) Ba'tty v. Chester, 5 Beav. 103, 109. (a) Semble, relief will not be given if it appears that the im- moral consideration has been executed: Sisiney v. Eley, 17 Sim. 1: but the case is hardly intelligible. (6) Gray v. Mathias, 5 Ves. 286; Hall v. Palmer, 3 Ha. 532; Vallance v. Blagden, 26 Ch. D. 353. 320 UNLAWFUL AGREEMENTS. [*284] Proviso for reconcilia- tion in quasi separation deed is void. Separation deeds in general. Hunt v. Hunt. personal representative of a party to an immoral agree- ment might have it set aside, though no relief would have been given to the party himself in his lifetime: but this has been pronounced " erroneous and contrary to law " (c). It must be borne in mind that the whole doctrine applies to executory agreements only. An actual transfer of property, which is on the face of it "a completed voluntary gift, valid and irrevocable in law ".and confers an absolute beneficial interest, cannot be afterwards impeached either by the ~fc settlor or by his representatives, though in fact made on an immoral consideration (c). 41 "Where parties who have been living together in illicit cohabitation separate, and the man covenants to pay an annuity to the woman, with a proviso that the annuity ■shall cease or the deed shall be void if the parties live together again, there the covenant is valid as a simple voluntary covenant to pay an annuity, but the proviso is wholly void. It makes no difference, of course, if the parties, being within the prohibited degrees of affinity, have gone through the form of marriage, and the deed is in the ordinary form of a separation deed between husband and wife (d). When the parties are really married such a proviso is usual but superfluous, for the deed is in any case avoided by the parties afterwards living together (e). 42 This brings us to the second branch of this topic, namely the validity of separation deeds and agreements for separation. The history of the subject will be found very clearly set forth in Lord Westbury's judgment in Hunt v. Hunt (/). From the ecclesiastical point of view mar- riage was a sacrament creating an indissoluble relation. The duties attaching to that relatioti were " of the highest possible religious obligation" and paramount to the will of the parties. In ecclesiastical Courts an (e) Ayerst v. Jenkins, 16 Eq. 275, 281, 284. (d) Ex parte Naden, 9 Ch. 670. (e) Westmeath v. Westmeath, 1 Dow & CI. 519. (/) 4 D. F. J. 221. The case was taken to the House of Lords, but the proceedings came to an end without any decision by the death of the husband: see per Lord Selborrie. 8 App. Ca. at p. 421. 41 See Gay v. Parpart. 106 XJ. S. 679. Gisaf v. Neval, 31 P. F. Sm. 354; Carter v. Montgomery, 2 Tenn. Ch. 216. Though in some cases it might be void as against creditors. Jackson v. Miner, 101 111. 550. 42 A promise made to a husband in settlement of a claim for the seduction of his wife is valid. MeGowan v. Bush, 17 Texas, 195, and see further on the subject of reparation. Flanegan v. Garrison, 28 Ga. 136; Self *. Clark, 2 Jones Eq. 309; Trovenger v. McBurney, 5 Cow. 253. SEPARATION DEEDS. 321 agreement or provision for a voluntary separation present or future was simply an agreement to commit a continuing breach of duties with which no secular authority could meddle, and therefore was illegal and void. For a long while all causes touching marriage even collaterally were claimed as within the exclusive juris- diction of those courts. The .sweeping character and the gradual decay of such claims have already been illustrated by cases we have had occasion to cite from the Year Books -fa in other places. In later times the [ -^- 265] ecclesiastical view of marriage was still upheld, so far as the remaining ecclesiastical jurisdiction could uphold it (g), and continued to have much influence on the opinions of civil Courts; the amount of that influence is indeed somewhat understood in Lord Westb'ury's ex- position. But the common law, when once its jurisdic- tion in such matters was settled, never adopted the ecclesiastical theory to the full extent. A contract pro- viding for and fixing the terms of an immediate separa- tion is treated like any other legal contract. 43 It must satisfy the ordinary condition of being made between competent parties, and the wife cannot contract with her husband: but even this difficulty is in certain ex- ceptional cases not insuperable (p. 83 above), and it is generally circumvented by the contract being made be- tween the husband and a trustee for the wife. Being good and enforceable at law, the contract is also good and enforceable in equity, nor is there any reason for refusing to enforce it by any of the peculiar remedies of equity. In Hunt v. Hunt the husband was restrained from suing in the Divorce Court for restitution of con- jugal rights in violation of his covenant in a separation deed (h), on the authority of the decision of the House of Lords (i), which had already established that the Wilson v. Court may order specific performance of an agreement Wllson ' to execute a separation deed containing such a cove- ts) See 4 D. F. J. 235-8. (h) This covenant could not then be pleaded in the Divorce Court, which held itself bound by the former ecclesiastical prac- tice to take no notice of separation deeds, (i) Wilson v. Wilson, 1 H. L. C. 538. <3 In Pennsylvania, Indiana, Massachusetts and Ohio the law as it appears in Wilson v. Wilson, 1 H. L. Cases, 538, has been expressly recognized. See Thomas v. Brown, 10 Ohio, 250; Dill- inger's Appeal, 11 Casey (Pa.), 357; Fox v. Davis, 113 Mass. 255; Dutton v. Id.. 30 Ind. 455; Hitner's App., 4 F. F. Sm. 114; Smith v. Knowles, 2 Grant (Pa.), 413. The doctrine appears to be ap- proved in Vermont. Barron v. Barron, 24 Vt. 375. 21 PRINCIPLES OF CONTRACT. 322 UNLAWFUL AGREEMENTS. nant." The case may be taken as having put the law on a consistent and intelligible footing, though not without overruling a great number of pretty strong dicta of various judges in the Court of ChaDcery and even in the House of Lords (&) ; and it has been fol- [ Galeu. Leckie, 2 Stark. 107; Fares v. Johns, 4 Esh. 97. 60 White v. Buss, 3 Cushing, 448, 450. UNLAWFUL AGREEMENTS. Contracts as to slaves in IT. S. now held void in some States though lawful when made. [*271] should arise any occasion for it. Some expressions are to be found which look like claims on the part of purely civil Courts to exercise a general moral censorship apart from any reference to the criminal law. But these are overruled by modern authority. At the pres- ent day it is not true that "the Court of Chancery has a superintendency over all books, and might in a sum- mary way restrain the printing or publishing any that contained reflections on religion or morality," as was once laid down by Lord Macclesfield; or that "the Lord Chancellor would grant an injunction against the ex- hibition of a libellous picture," as was laid down by Lord Ellenborough (n). On the whole one may safely say that for all practical purposes the civil law is de- termined by and co-extensive with the criminal law in these matters: the question in a given case is not sim- ply whether the publication be immoral, but whether the criminal law would punish it as immoral. A very curious doctrine of legal morality has been started in some of the United States since the aboli- tion of slavery. It has been held that the sale of slaves being against natural right can be made valid only by positive law, and that no right of action arising from it can subsist after the determination of that law (o). The Supreme Court of Louisiana in particular has ad- judged that contracts for the sale of persons, though made in the State -fa while slavery was lawful, must now be treated as void: but the Supreme Court of the U. S. did not hold itself bound by this view on appeal from the Circuit Court, and distinctly refused to adopt it, thinking that neither the Constitutional Amendment of 1865, nor anything that had happened since, avoided a contract good in its inception ( p). Of the doctrine of public policy in general. C. Agreements contrary to public policy. Before we go through the different classes of agree- ments which are void as being of mischievous tendency in some one of certain definite ways, something must be said on the more general question of the judicial mean- ing of " public policy." That question is, in effect, whether it is at the present day open to Courts of jus- (n) Emperor of Austria v. Day & Kossuth, 3 D. F. J. 217, 238. As to blasphemous or quasi-blasphemous publications, however, something like the older view seems to be involved in Cowan v. Milboum, L. E. 2 Ex. 230. (o) Storv on Contracts, \ 671 (1. 647, 5th ed.) (p) Boyce v. Tabb, 18 Wallace, 546. PUBLIC POLICY. 327 ticetokold transactions or dispositions of property void simply because in the judgment of the Court it is against the public good that they should be enforced, although the grounds of that judgment may be novel. The gen- eral tendency of modern ideas is no doubt against the continuance of such a jurisdiction. On the other hand there is a good deal of modern and even recent authority which makes it difficult to deny its continued existence. As a matter of history, there seems to be little doubt Its extension that the doctrine of public policy, so far as regards its bv anxiety assertion in a general form in modern times, if not its ^scoura* *° actual origin, arose from wagers being allowed as the wagers™^ foundation of actions at common law. Their validity -while wagers was assumed without discussion until the judges re- as such pented of it too late. Eegretting that wagers could be ^Xacts* 1 sued on at all (q), they were forced to admit that wager- ing contracts as such were not invalid, but set to work to discourage them so far as they could. This they did by becoming ^ "astute even to an extent bordering [^-272] upon the ridiculous to find reasons for refusing to en- force them " in particular cases (r). Thus a wager on the future amount of hop duty was held void, because it might expose to all the world the amount of the public revenue, and Parliament was the only proper place for the discussion of such matters (s). "Where one proprietor of carriages for hire in a town had made a bet with another that a particular person would go to the assembly rooms in his carriage, and not the other's, it was thought that the bet was void, as tending to abridge the freedom of one of the public in choosing his own conveyance, and to expose him to "the inconvenience of being hnportuned by rival coach- men " (t). A wager on the duration of the life of Napo- leon was void, because it gave the plaintiff an interest in keeping the king's enemy alive, and also because it gave the defendant an interest in compassing his death by means other than lawful warfare (u). This was Later re- probably the extreme case, and has been remarked on mark s on as of doubtful authority (x). But the Judicial Com- (q) Good v. Elliott, 3 T. E. 693, where Buller, J. proposed (without success) to hold void all wagers on events in which the parties had no interest. ()•) Per Parke, B. Egerton v. Earl Brownlow, 4 H. L. C. at p. 124; per Williams, J. ib. 77; per Alderson, B. ib. 109. (s) "Atherfold v. Beard, 2 T. R. 610. (/) Eltham v. Kingsman, IB. & Aid. 683: this, however, was not strictly necessary to the decision. (uj Gilbert?;. Sykes, 16 East, 150. (x) By Alderson, B. in Egerton v. Earl Brownlow, supra, and in the Privy Council in the case next cited, 6 Moo, P. C. 312. these decisions. 328 UNLAWFUL AGREEMENTS. Qu. How far now law. " [*273] Egerton v. Brownlow. mittee held in 1848, on an Indian appeal (the Act 8 & 9 Vict. c. 109, not extending to British India) that a wager on the price of opium at the next Government sale of opium was not illegal (y). The common law was thus stated by Lord Campbell in delivering the judgment: — " I regret to say that we are bound to consider the common law of England to be that an action may be maintained on a wager, although the parties had no previous interest in the ques- tion on which it was laid, if it be not against the interests or feelings of third persons, and does not -^- lead to indecent evi- dence, and is not contrary to public policy. I look with concern and almost with shame on the subterfuges and contrivances and evasions to which Judges in England long resorted, in struggling against this rule " (z). It may surely be thought at least doubtful whether decisions so produced and so reflected upon can in our own time be entitled to any regard at all. But it has been said that they establish a distinction of importance between cases where the parties "have a real interest in the matter, and an apparent right to deal with it " and where they "have no interest but what they them- selves create by the contract ;" that in the former case the agreement is void only if "directly opposed to pub- lic welfare," but in the latter " any tendency whatever to public mischief" will render it void (a). It is diffi- cult to accept this distinction, or at any rate to see to what class of contracts other than wagers it applies. In the case of a lease for lives (to take an instance often used) the parties "have no interest but what they them- selves create by the contract " in the lives named in the lease : they have not any " apparent right to deal with " the length of the Sovereign's or other illustrious per- sons' lives as a term of their contract : yet it has never been doubted that the contract is perfectly good. The leading modern authority on "public policy" is the great case of Egerton v. Sari Broivnlow (&). 51 (y) By the Indian Contract Act, s. 30, agreements by way of wager are now void, with an exception in favour of prices for horse-racing of the value of Es. 500 or upwards. (z) Ramloll Thackoorseydass v. Soojumnull Dhondmull, 6 Moo. P. C. 300, 310. (a) 4 H. L. C. 148. (6) 4 H. L. C. 1-250. 61 McDonald v. Hauchton, 70 K. C. 393; Eiley v. Jordan, 122 Mass. 231. PUBLIC POLICY : EGERTON V. BROWNLOW. 329 This, although not a case of contract, must not be left without special mention. By the will of the seventh Earl of Bridgewater a series of life interests (e) were limited, subject to provisoes which were generally called conditions, bat were really conditional limitations by . way of shifting -^- uses upon the preceding estates (d). [ -^ 274] The effect of these was that if the possessor for the time being of the estates did not acquire the title of Marquis or Duke of Bridgewater, or did accept any inferior title, the estates were to go over. The Hou se of Lords held by four to one, in accordance with the opinion of two judges (e) against eight (/), that the limitations were void as being against public policy. The whole subject was much discussed in the opin- Opinions of ions on both sides. The greater part of the judges in- judges, sisted on such considerations as the danger of limiting dispositions of property on speculative notions of im- policy (gr) ; the vague and unsatisfactory character of a jurisdiction founded on general opinions of political expedience, as distinguished from a legitimate use of the policy, or rather general intention, of a particular law as the key to its construction, and the confusion of judicial and legislative functions to which the exercise of such a jurisdiction would lead (h); and the fallacy of supposing an object unlawful because it might possibly be sought by unlawful means, when no intention to use such means appeared(i). On the other hand it was pointed out that these limitations held out " a direct and power- ful temptation to the exercise of corrupt means of ob- taining the particular dignity " (k) ; that besides this the restraint on accepting any other dignity, even if it did not amount to forbidding a subject to obey the lawful commands of the Sovereign (I), tended in possible (e) Not estates of freehold with remainder to first and other eons in tail in the usual way, but a chattel interest for 99 years, if the taker should so long live, remainder to the heirs male of his body. See Dav. Conv. 3, pt. 1. 351. (d) See Lord St. Leonards' judgment, 4 H. L. C. at p. 208. (e) Pollock, C. B. and Piatt, B. ('/) Crompton, Williams, Cress well, Talfourd, Wightman, and Erie, JJ., Alderson and Parke, BB. Coleridge, J. thought the limitations good in part only. (ijf) Crompton, J. at p. 68. (h) Alderson, B. at p. 106; Parke, B. at p. 123. (i) Williams, J. at p. 77; Parke, B. at p. 124. (it) Piatt, B. at p. 99; Lord St. Leonards at p. 232; Lord Broug- ham at p. 172. (I) On this point the prevailing opinion, on the whole was that a subject cannot refuse a peerage [cp. 5 Ric. 2 St. 2. c. 4], but cannot be compelled to accept it by any particular title, or at all 330 UNLAWFUL AGREEMENTS. [*275] Opinions in House of Lords. [*276] events to set private interest in opposition to public •fc duty (m) ; and that the provisoes as a whole were fit- ted to bias the political and public conduct of the persons interested, and introduce improper motives intoit(w), and also to embarrass the advisers of the Crown, and influence them to recommend the grant of a peerage or of promotion in the peerage for reasons other than merit (o). Lord Lyndhurst, Lord Brougham, Lord Truro, and Lord St. Leonards adopted this view. Lord Cranworth dis- sented, adhering to his opinion in the Court below (p), and made the remark (which is certainly difficult to answer) that the Thellusson will, which the Courts had felt bound to uphold, was much more clearly against public policy than this. The fullest reasons on the side of the actual decision are those of Pollock, C. B. and Lord St. Leonards. Their language is very general, and they go far in the direction of claiming an almost unlimited right of deciding cases according to the judge's view of public policy for the. time being. Lord St Leonards mentioned the fluctuations of the decisions on agreements in restraint of trade as showing that rules of common law have been both created and modi- fied by notions of public policy. But, assuming the statement to be historically correct (q), the inference would seem, with all submission to so great an author- ity, to be grounded on a confusion between the purely legal and the historical point of view. In theory the common law does not vary. In fact we know that it does vary (though in modern times the limits of varia- tion are narrowed), but the fact of the variation is no argument for an unlimited power of judicial legislation in this more than in any other class of questions. He also said that each ease was to be decided upon princi- ple, but -^ abstract rules were not to be laid down (?•). Perhaps this may be taken to mean only that (as in the case of fraud) the Court is to be guided by recognized principles, but it is useless to attempt a minute and events cannot be compelled to accept promotion by any particu- lar new title if he is a peer already. (m) Pollock, C. B. at p. 151. (n) Lord Lyndhurst, at p. 163. (o) Pollock. C. B. and Lord St. Leonards, supra. (p) 1 Sim. N. S. 464. {q) In fact it seems doubtful. The cases on wagers are anom- alous, as above shown : and as to restraint of trade it appears from the book that Hull. J. was really alone in his opinion in the Dyer's ca. in 2 H. 5. See, however, as to the variation of the "policy of the law " in general, Evanturel v. Evantural, L. E. 6 P. C. at p. 29. (r) At pp. 238-9. PUBLIC POLICY. 331 exhaustive definition of the cases that may fall within them: in other words, that we must be content with reasoning by way of analogy rather than deduction. If so, the proposition is doubtless correct and import- ant (though by no means confined to tbis topic); but if it means to say that the Court may lay down new prin- ciples of public policy without any warrant even of analogy, it seems of doubtful and dangerous latitude. But it is necessary to consider whether the ratio deci- Effect of dendi of the case does in truth require any of these wide * ne decision assertions of judicial discretion. And it is not vel 7 not create "a^ difficult to perceive that it does not. The limitations new head of in question were held bad because they amounted in "public effect to a gift of pecuniary means to be used in obtain- policy." ing a peerage, and offered a direct, temptation to the improper use of such means, and the improper admis- sion of private motives of interest in political conduct: in short, because in the opinion of the Court they had a manifest tendency to the prejudice of good govern- ment and the administration of . public affairs. But it is perfectly well recognized that transactions which have this character are all alike void, however different in other respects. Such are champerty and maintenance, the compounding of offences, and the sale of offices. The question in the particular case was whether there was an apparent tendency to mischiefs of this kind, or only a remote possibility of inconvenient consequences. The decision did not create a new kind of prohibition, but affirmed the substantial likeness of a very peculiar and unexampled disposition of property to other dispo- sitions and transactions already known to belong to a forbidden class. And the broadly expressed language of certain parts of the judgments may be taken, it is •jc submitted, as applicable only within the bounds of [ -fa 277] that particular class. Egerton v. Earl Broivnloiv, however, is certainly a cardinal authority for one rule which applies in all cases of "public policy:" namely that the tendency of the transaction at the time, not its actual result, must be looked to. It was urged in vain that the will of the seventh Earl of Bridgewater had in fact been in exist- ence for thirty years without producing any visible ill effects (s). (s) Cp. Da Costa v. Jones, Cowp. 729. Wager on sex of third person void, as offensive to that person and tending to indecent evidence: notwithstanding it did not appear that the person had made any objection, and the cause had in fact been tried with- out any indecent evidence. 332 UNLAWFUL AGREEMENTS. A. Public policy as touching external relations of the State. [*278] Trading with enemy. Potts v. Bell. The view here put forward, that there is really noth- ing in the case to warrant the invention of new heads of "public policy," seems to be borne out by the fol- lowing remarks of the late Sir G. Jessel : — " It must not be forgotten that you are not to extend arbitra- rily those rules which say that a given contract is void as being against public policy, because if there is one thing which more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice. Therefore, you have this paramount public policy to consider — that you are not lightly to interfere with this freedom of contract " (<). 52 "We now proceed to the several heads of the subject. a. First, as to matters concerning the commonwealth in its relations with foreign powers. " On the principles of the English law it is not com- petent to any " domiciled British (u) " subject to enter into a contract to do anything which may be detrimen- tal to the interests of his own country " (x). ■^ An agreement may be void for reasons of this kind either when it is for the benefit of an enemy, or when the enforcement of it would be an affront to a friendly state. 53 As to the first and more important branch of this rule: "It is now fully established that, the presumed object of war being as much to cripple the enemy's commerce as to capture his property, a declaration of war imports a prohibition of commercial intercourse and correspondence with the inhabitants of the enemy's country, and that such intercourse, except with the li- cence of the Crown, is illegal" {y). The case of Potts v. Bell (z), decided by the Exche- quer Chamber in 1800, is the leading authority on this subject. The following points were there decided: (t) Printing and Numerical Registering Co. a. Sampson, 19 Eq. 462, 465. («) The rule does not apply to British subjects domiciled abroad: Bell v. Reid, 1 M. & S. 726. {x) 7 E. & B. 782. (y) Exposito v. Bowden (in Ex. Ch.), 7 E. & B. 763, 779. (z) 8 T. R. 548. M See Biddis v. James, 6 Binn. 321 ; Milton v. Haden, 32 Ala. 30; Territt v. Bartlett, 21 Vt. 184. " Jones on Bailm. (Am. Ed.), 120. TRADING WITH ENEMIES. 333 It is a principle of the common law (a) that trading with an enemy without licence from the Crown is illegal. Purchase of goods in an enemy's country during the war is trading with the enemy, though it be not shown that they were actually purchased fronTan enemy: and an insurance of-goods so purchased is void. As to insurances originally effected in time of peace: "When a British subject "insures against captures, the law infers that the contract contains an exception of captures made by the government of his own coun- try" (6). The effect of the outbreak of war upon subsisting Effect of contracts between subjects of the hostile states varies war . on . according to the nature of the case. It may be that sub ^ lstl °g the contract can be lawfully performed by reason of the belligerent governments or one of them having, waived their strict rights: and in such case it remains . valid. In Clementson v. Blessig (c) goods had been ordered of the plaintiff in England by a firm at Odessa before the declaration •£ of war with Russia. By an [ ^ 279] Order in Council six weeks were given after the decla- ration of war for Russian merchant vessels to load and depart, and the plaintiff forwarded the goods for ship- ment in time to be lawfully shipped under this order: it was held that the sale remained good. If the contract cannot at once be lawfully performed, then it is suspended during hostilities (d) unless the nature or objects of the contract be inconsistent with a suspension, in which case " the effect is to dissolve the contract and to absolve both parties from further per- formance of it " (e). The outbreak of a war dissolves a partnership previously existing between subjects of the two hostile countries (/). In Esposito v. Bowden (e), a neutral ship was char- (a) In the Admiralty it was already beyond question : see the series of precedents cited in Potts v. Bell. (6) Furtado v. Eodgers, 3 B. & P. 191, 200; Ex parte Lee, 13 Ves. 64. (c) 11 Ex. 135, and on the subject generally see the reporters' note, pp. 141-5. (d) Ex parte Boussmaker, 13 "Ves. 71. (e) Esposito v. Bowden, 7 E. & B. 763, 783, 27 L. J. Q. B. 17 (in Ex. Ch.) revg. s. c. 4 E. & B. 963; 24 L. J. Q. B. 210. For a later application of the same reason of convenience cp. Geipel v. Smith, L. E. 7 Q. B. 404. A contract to carry goods has been held to be only suspended by a temporary embargo, though it lasted two years: Hadley v. Clarke, 8 T. R. 259. Sed qu. is not this virtually overruled by Esposito v. Bowden? (/) Griswold v. Waddington, 15 Johns. (Sup. Ct. N. Y.) 57, in error, 16 ib. 438. In New York Life Insurance Co. v. Statham, 334 UNLAWFUL AGREEMENTS. tered to proceed to Odessa, and there load a cargo for an English freighter, and before the ship arrived there war had broken out between England and Russia, and continued until after the time when the loading should Have taken place: here the contract could not be per- formed without trading with the enemy, and in such a case it is convenient that it should be dissolved at once, . so that the parties need not wait indefinitely for the mere chance of the war coming to an end, or its other- wise becoming possible to perform the contract law- fully. [ -fa 280] ~j{ Questions have arisen on the validity of bills of Bills of exchange drawn on England in a hostile country in exchange time of war. Here the substance of the transaction En aland and ^ as *° ' 3e l°°k e d a t, not meiely the nationality of the hostile persons who are ultimately parties to an action on the country. bill. Where a bill was drawn on England by an English prisoner in a hostile country, this was held a lawful contract, being made between English subjects; and by the necessity of the case an indorsement to an alien enemy was further held good, so that he might well sue on it after the return of peace (g). But a bill drawn by an alien enemy on a domiciled British sub- ject, and indorsed to a British subject residing in the enemy's country, was held to give no right of action even after the end of the war: for this was a direct trading with the enemy on the part of the acceptor(ft). It seems proper to observe that these cases must be carefully distinguished from those which relate only to the personal disability of an alien enemy to sue in our Courts during the war (i). Hostilities against friendly nation On the other hand, an agreement cannot be enforced in England which has for its object the conduct of hostilities against a power at peace with the English 3 Otto (93 U. S. ), 24, a curious question arose as to the effect of the Civil War on liie policies effected by residents in the South- ern States with a company in the North. It was- held by the majority of the Court that,thepreiniumshavingbeen unpaid during the war, the policies were avoided; but that in the circumstances the assured were entitled to the surrender value of their policies at the date of the first default. But the opinions that the contract was avoided without compensation, and that it revived at the end of the war, also found support. (g) Antoine v. Morshead, 6' Taunt. 237, cp. Daubuz v. Mors- head;?6. 332. (ft) Willison v. Patteson, 7 Taunt. 439. The circumstances of the indorsement seem immaterial. (i) Such are McConnell i\ Hector, 3 B. & P. 113; Brandon v. Nesbitt, 6 T. R. 23. As to prisoners of war here, Sparenburg v. Bannatyne, 1 B. & P. 163. FOREIGN REVENUE LAWS. 335 government, at all events by rebellious subjects of that cannot be power who are endeavouring to establish their inde- ^ ub J? c . t of pendence, but have not yet been recognized as independ- tract °° n " ent by England. This was laid down in cases arising out of loans contracted in this country on behalf of some of the South American Eepublics before they had been officially recognized. " It is contrary to the law of nations, which in all cases of in- ternational law is adopted into th,e municipal code of every civilized country, for persons iu England to enter into engagements to raise money to support the subjects of a government in amity with our own in hostilities against -jfc- their government, and no f 2811 right of action can arise out of such a transaction" (fc). The Supreme Court of the United States has held, however, that an assignment of shares in a company originally formed for a purpose of this kind was so re- motely connected with the original illegality of the loan as not to be invalid between the parties to it (I). It is not a "municipal offence by the law of nations " Neutral for citizens of a neutral country to carry on trade with a trade with blockaded port — that is, the courts of their own country j^t^isk'ot cannot be expected to treat it as illegal (though of course ca pture only it is done at the risk of seizure, of which seizure, if made, not unlaw- the neutral trader or his government cannot complain): ful - and agreements having such trade for their object — e. g. a joint adventure in blockade-running — are a'ccordingly valid and enforceable in the courts of the neutral state (m). Several decisions on this topic of aiding or trading with enemies have been given in the American Courts in cases arising out of the Civil War. They will be found collected in the last edition of Mr. Story's work (n). It is admitted as a thing required by the comity of Exceptional nations that an agreement to contravene the laws of a treatment of (k) Best, C. J.,' De Wiitz v. Hendricks, 2 Bing. 314. Cp. Thompson v. Powles, 2 Sim. 194, where the language seems un- necessarily wide. (0 McBlair v. Gibbes, 17 Howard, 232. (m) Ex parte Chavasse, 4 D. J. S. 655, see Lord Westbury's judg- ment; The Helen, L. E. 1 Ad. & Ecc. 1, and American authori- ties there cited; Kent, Comm. 3. 267. (re) Texas v. White, 7 Wallace, 700 (where however the chief points are of constitutional law); Hanauer v. Doane, 12 ib. 342; Story on Contracts, § 744. Sprott v. TJ. S., 20 Wall. 459, goes beyond anything in our books, and the dissent of Field, J. seems well founded. 336 UNLAWFUL AGREEMENTS. foreign foreign country would in general be unlawful. But it is revenue aa j,j tna ^ re venue laws (in practice the most important s ' cases) are excepted, and that "no country ever takes notice of the revenue laws of another" (o). 54 [ •£ 282] "fcAs a general proposition, however, this is strongly disapproved by most modern writers as contrary to rea- son and justice (p). It should be noted that our Courts, so far as they have acted upon it, have done so to the pre- judice of our own revenue quite as much as to that of foreign states. 55 Thus a complete sale of goods abroad by a foreign vendor is valid, and the price may be re- covered in an English Court, though he knew of the buyer's intention to smuggle the goods into England. " The subject of a foreign country is not bound to pay allegiance or respect to the revenue laws of this" (q). But it is admitted that an agreement to be performed in England in violation of English revenue laws would be void — as if, for example, the goods were to be smug- gled by the seller and so delivered in England. And a subject, domiciled in the British dominions (though not in England or within the operation of English revenue laws) cannot recover in ah English Court the price of goods sold by him to be smuggled into England (r); and even a foreign vendor cannot recover if he has himself actively contributed to the breach of English revenue laws, as by packing the goods in a manner suitable and to his knowledge intended for the purpose- of smug- gling («)._ The cases upholding contracts of this kind, whether as against our own or as against foreign laws, would probably not be now extended beyond the points speci- fically decided by them, and perhaps not altogether up- held (t). There is one modern case which looks at first (o) Lord Mansfield in Holman v. Johnson, 1 Cowp. 341. (p) Kent, Comm. 3. 263-266; "Wharton, Conflict of Laws, §§484 -5. And see Westlake on Private International Law (1880), pp. 231, 238. {q) Holman v. Johnson, 1 Cowp. 431 ; Pellecatv. Angell, 2 C. M. & R. 311-3, per Lord Ahinger, C. B. (r) Clugas v. Penaluna, 4 T. R. 466. It seems, but it is not quite certain, from this case, that mere knowledge of the buyer's inten- tion would disentitle him. (s) Waymell v. Reed, 5 T. R. 599. (t) It must be remembered that the general law as to sale of M The statutes requiring stamps are revenue laws and the courts of one country will not recognize the revenue laws of another. Kohn v. The Rennaissance, 5 La. An. 25; Ivey v. Lalland, 42 Miss. 444. 65 Skinner v. Tinker, 34 Barb. 333 1 Wynee v. Jackson, 2 Russ. 351; CI egg v. Levy, 3 Camp. 166. AGREEMENTS FOE CORRUPT INFLUENCE. 337 sight like an authority for saying that our Courts pay no regard to foreign shipping ~fc registration laws: but [ -^ 283] it really goes upon a different principle, and, besides, the law of the United States was not properly brought before the Court (u). As to instruments which cannot be used in their own Foreign country for want of a stamp, it is now settled that re- stamp laws. gard will be paid by the Courts of other States to the law which regulates them, and the only question is as to the real effect of that law. If it is a mere rule of local procedure, requiring the stamp to make the in- strument admissible in evidence, a foreign Court, not being bound by such rules of procedure, will not reject the instrument as evidence: it is otherwise if the local law " makes a stamp necessary to the validity of the instrument," i. e. a condition precedent to its having any legal effect at all (a;) 56 b. As to matters touching good government and the b. Public administration of justice. policy as touching It is needless to produce authorities to show that an internal agreement whose object is to induce any officer of the S mernm State, whether judicial or executive, to act partially or imp™p e °i n - corruptly in his office, must in any civilized country be fluence on absolutely void. But an agreement which has an ap- public parent tendency that way, though an intention to use officers or unlawful means be not. admitted, or even be nominally s disclaimed, will equally be held void. 57 In the case of Egerton v. Earl Brownlow, of which an account has been given a few pages above, it was held that the descent of an estate could not be made to depend on any public event in which the interest of the nation was concerned: or, to put it a little more broadly in one *way and a little more definitely in another, that all transactions goods, &c, which the seller knows will be used for an unlawful purpose, was not fully settled at the date of these authorities. (u) Sharp v. Taylor, 2 Ph. 801, see Lindley on Partnership, 1. 203. (x) See "Wharton, Conflict of Laws, \\ 685-8; Bristow v. Seque- ville, 5 Ex. 275, 56 The true distinction appears to be that, though parties bar- gain in one country to violate the revenue laws of another, yet, if the thing to be done is not otherwise immoral or against pub- lic policy, the agreement will be upheld in' the former country. Bishop on Contracts. Sec. 1386, Armendiaz v. Serna, 40 Texas. 291. 57 Newson r. Thighen, 30 Miss. 414; Callaghan v. Hallett, 1 Caines, 104; Satterlee v. Jones, 3 Duer, 102; Waldron v. Evans, 1 Dak. 11; Richardson v. Crandall, 48 N. Y. 348. 22 PRINCIPLES OF CONTRACT. 338 UNLAWFUL AGREEMENTS. [*284] Marshall v. Baltimore, &o , Co. (Sup. Court U.S.) [*285] are void which create contingent interests of a nature to put the pressure of )f- extraneous and improper mo- tives upon the counsels of the Crown or the political conduct of legislators. A decision in the American Supreme Court which happens to be of nearly the same date shows that an agreement is void which contemplates the use of under- hand means to influence legislation. 58 In Marshall v. Baltimore and Ohio Railroad Co. (y) the nature of the agreement sued on appeared by a letter from the plain- tiff to the president of the railway board, in which he proposed a plan for obtaining a right of way through "Virginia for the company and offered himself as agent for the purpose. The letter pointed (though not in ex- press terms) to the use of secret influence on particular members of the legislature: and it referred to an ac- companying document which explained the nature of the plan in more detail. This document contained the, following passage: — "I contemplate the use of no im- proper means or appliances in the attainment of your purpose. My scheme is to surround the legislature with respectable agents, whose persuasive arguments may influence the members to do you a naked justice. This is all I require — secrecy from motives of policy alone — ■ because an open agency would furnish ground of sus- picion and unmerited invective, and might weaken the impression we seek to make." The arrangement was to be as secret as practicable: the company was to have but one ostensible agent, who was to choose such and so many sub-agents as he thought proper: and the pay- ment was to be contingent on success. The actual con- tract was made by a resolution of the directors, accord- ing to which agents were to be employed to " superin- tend and further" the contemplated application to the legislature of Virginia " and to take all proper measures for that purpose;" and their right to any compensation was to be contingent on the passing of the law. The Supreme Court held, first, that it was sufficiently clear that the -fa contract was in fact made on the footing of the previous communications, and was to be carried out in the manner there proposed; and secondly, that being so made it was against public policy and void. ' It is an undoubted principle of the common law that it will (y) 16 Howard, 314. 58 See also, Mills v. Mills, '40 N. Y. 5, 43; Trist v. Child, 21 Wallace. 441; Usher v. McBratney. 3 Dill on 385; Clippinger v. Hepbaugh, 5 W. & S. 315. i i AGREEMENTS FOR CORRUPT INFLUENCE. 339 not lend its aid to enforce a contract to do an act that is illegal, or which is inconsistent with sound morals or public policy; or which tends to corrupt or contaminate, by improper influences, the integrity of our social or political institutions. . . , Legisla- tors should act from high considerations of public duty. Public policy and sound morality do therefore imperatively require that Courts should put the stamp of their disapprobation on every act and pronounce void every contract the ultimate \_qu. immediate?] or probable tendency of which would be to sully the purity or i mislead the judgments of those to whom the high trust of legis- lation is confided." 59 [The judgment then points out that per- sons interested in the results of pending legislation have a right to urge their claims either in person or by agents, but in the lat- ter case the agency must be open and acknowledged.] "Any attempts to deceive persons intrusted with the high functions of legislation by secret combinations, or to create or bring into operation undue influences of any kind, have all the effects of a direct fraud on the public " (z). And the result of the previous authorities was stated to be — "1st. That all contracts for a contingent compensation for ob- taining legislation, or to use personal or any secret ob sinister in- fluence on legislators, are (a) void by the policy of the law. "2nd. Secrecy as to the character under which the agent or solicitor acts tends to deception and is immoral and fraudulent, and where the agent contracts to use secret influences, or volun- tarily without contract with his principal uses such means, he cannot have the assistance of a Court to recover compensation. " 3rd. That what in the technical vocabulary of politicians is termed ' log-rolling ' (b) is a misdemeanour at common law pun- ishable by indictment" (c). So in a later case (d) an agreement to prosecute a claim before Congress by means of personal influence and solicitations -fa of the kind known as " lobby [ -fa 286] services" has been held void. 60 (z) 16 Howard, at pp. 334-5. {a) "is" by a clerical error in the report. (6) Arrangements between members for the barter of votes on private bills. (e) 16 Howard, 336. (d) Tristv. Child, 21 Wall. 441. See, too, Meguirev. Corwine, 11 Otto (101 U. S.), 108. 59 Winpenny v. French. 18 Ohio, 469; Dudley v. Butler, ION. H. 281; Devlin v. Brady, 36 N. Y. 531. 60 An officer may take lawful compensation for his services. Converse v. U. S.,21 How. (U. S.) 463; Bona v. Davant, Riley's Eq. 44; Massing v. The State, 14 Wis. 502. 340 UNLAWFUL AGREEMENTS. Otherwise of contract by person interested to ■withdraw opposition; Simpson v. Lord Howden. Sale of offices, &c. at common law. But as it is open to a landowner or other interested person to defend his interest by all lawful means against proposed legislation from which he apprehends injury, so it is open to him to withdraw or compromise his claims on any terms he thinks fit. There is no reason against bargains of this kind any more than against a compromise of disputed civil rights in ordinary litiga- tion. 61 And the lawfulness of such an agreement is not altered if it so happens that the party is himself a member of the legislature. In the absence of anything to show the contrary, he is presumed to make the agree- ment solely in his character of a person having a val- uable interest of his own in the matter, and he is not to be deprived of his rights in that character merely because he is also a legislator (e). 62 "A landowner cannot be restricted of his rights because he hap- pens to be a member of Parliament" (/). This may seem a little anomalous: but it must be remem- bered that in practice there is little chance of a con- flict between duty and interest, as the legislature gen- erally informs itself on these matters by means of committees proceeding in a quasi-judicial manner. Of course it would be improper for a member personally interested to sit on Buch a committee. On similar grounds it is said that the sale of offices (which is forbidden by statutes extending to almost every case) is also void at common law (g)- 6S However, there may be a lawful partnership in the emoluments of offices, although a sale of the offices themselves or a complete assignment of the emoluments would be un- lawful, (fe). 64 The same principles are applied to other appointments which though not exactly public offices (e) Simpson v. Lord Howden, 10 A. & E. 793, 9 CI. & F. 61. (/) Kindersley, V.-C. in Earl of Shrewsbury v. N. "Staffordshire Ry. Co.,1 Eq. 593, 613. (g) Hanington v. Du Chastel, 2 Swanst. 159, n. ; Hopkins v. Prescott, 4 C. B. 578, per Coltman, J. (A) Sterryo. Clifton, 9 C. B. 110. 61 Bowman v. Coffroth, 9 P. F. Sm. 19; Vauxhall Bridge Co. v. Spencer, Jacob, 64. 62 An agreement to obtain the passage of a law made with the corrupt intent to collect a claim against the State invalidates the claim even through the hands of an assignee. Monroe Bank v. State, 26 Hun. 581. 63 The law renders void every contract tending to obstruct the unbiased selection of men for positions of trust. 64 See as to sharing of profits of office. Gray v. Hook, 4 Corn- Stock, 449; Gaston v. Drake, 14 Nev. 175; Eddv v. Capron, 4 E. I. 394; Ferris v. Adams, 23 Vt. 136; Martin v. Wade, 37 Cal. 168; Stroud v. Smith, 4 Houst. 448; Haas v. Fenlon, 8 Kan. 601. SALE OF OFFICES. 341 are concerned with -fa matters of public interest. " Pub- [ -fa 287] lie policy requires that there shall be no money consid- eration for the appointment to an office in which the public are interested: the public will be better served by having persons best qualified to fill offices appointed to them; but if money may be given to those who ap- point, it may be a temptation to them to appoint im- proper persons." 65 Therefore the practice which had grown up in the last centuiy of purchasing commands of ships in the East India Company's service was held unlawful, no less on this ground than because it was against the Company's regulations (i). In like manner a secret agreement to hand over to another person the profits of a contract made for the public service, such as a Post Office contract for the conveyance of mails, is void (fc). Nevertheless many particular offices, and notably subordinate offices in the courts of justice, were in fact saleable and the subject of sale by custom or otherwise until quite modern times. But the commission of an officer in the army could not be the subject of a valid pledge even under the system of purchase recently abol- ished (I). For like reasons certain assignments of salaries and Assignments pensions have been held void, as tending to defeat the of salaries, public objects for which the original grant was in- tended. Thus military pay and judicial salaries are not assignable. The rule is that " a pension for past ser- vices may be aliened, but a pension for supporting the grantee in the performance of future duties is inalien- able " : and therefore a pension given not only as a re- ward for past services, but for the support of a dignity created at the same time and for the same reason, is in- alienable (m). But an assignment by the holder of a public office of a sain equivalent to a proportionate part of salary, and secured to his legal ^j- personal repre- [ -£- 288] sentatives on his death by the terms of his appointment, is not invalid, such a sum being simply a part of his personal estate like money secured by life insurance (n). (i) Blackford v. Preston, 8 T. E. 59, 93. (k) Osborne v. Williams, 18 Ves. 379. (1) Collyer v. Fallon, T. & R. 459. (m) Davis v. Duke of Marlborough, 1 Swanst. 74, 79. Cp. Arbuthnot v. Norton, 5 Moo. P. C. 219. And see authorities col- lected in notes to Kyall v. Eowles, 2 Wh. & T. L. C. (») Arbuthnot v. Norton, supra. 63 Or to be appointed an officer under a public office holder. Hager v. Catlin, 18 Hun. 448; Eobertson <-. Robinson, 65 Ala. 610. 342 UNLAWFUL AGREEMENTS. Interference with course of justice. In criminal proceedings. "Stifling prosecu- tions." Williams v. Bayley. Keir v. Leeman. In a late case a mortgage by an officer of the Customs of his disposable share in the " Customs Annuity and Benevolent Fund " created by a special Act was unsuc- cessfully disputed as contrary to the policy of the Act (o). Agreements for the purpose of "stifling a criminal prosecution " are void as tending to obstruct the course of public justice. 66 An agreement made in considera- tion ostensibly of the giving up of certain promissory notes, the notes in fact having forged indorsements upon them, and the real consideration appearing by the circumstances to be the forbearance of the other party to prosecute, was held void on this ground in the House of Lords. The principle of the law as there laid down by Lord Westbury is " That you shall not make a trade of a felony" (p). However the principal direct authority must still be sought in the earlier case of Keir v. Leeman (q). The Court of Queen's Bench there said : — "The principle of law is laid down by Wilmot, C. J. in Collins v. Blantern (»•) that a contract to withdraw a, prosecution for per- jury and consent to give no evidence against the accused is founded on an unlawful consideration and void. On the sound- ness of this decision no doubt can be entertained, whether the party accused were innocent or guilty of the crime charged. If innocent, the law was abused for the purpose of extortion ; if guilty, the law was eluded by a corrupt compromise screening the criminal for a bribe. [The cases are then reviewed.] We shall probably be safe iu laying it down that the law will per- mit a compromise of all offences, though made the subject of criminal prosecution, for which offences the injured party might sue and recover damages in an action. It is often the only man- ner in which he can obtain redress. But if the offence is of a public nature no agreement can be valid that is founded on the consideration oi stifling a prosecution for it" fa). (o) Maclean's trusts, 19 Eq. 274. (p) Williams v. Bayley, L. R. 1 H. L. 200, 220. (q) 6 Q. B. 308, in Ex. Ch. 9 Q. B. 371. (V) 1 Sm. L. C. 369, 382. (s) Ace. in Clubb v. Hutson, 18 C. B. N. S. 414, held that for- bearance to prosecute a charge of obtaining money by false pre- tences is an illegal consideration. What if there is no real ground for a prosecution, the supposed offence being an act not criminally punishable? See per Fry, J. 8 Ch. D. at p. 477. It is submitted that the agreement would be void for want of consid- eration. 66 Soule v. Bonney, 37 Me. 128; Barclay v. Breckinridge, 4 Met. (Ky.) 374; Baker v. Fan-is. 61 Mo. 389: Southern Express Co. v. Duffy, 48 Ga. 358; Snyder r. Willey, 33 Mich. 483. COMPOUNDING OFFENCES. 343 ■fa Accordingly the Court held that an indictment for [ + 289] offences including riot and obstruction of a public offi- cer in the execution of his duty cannot be legally the subject of a compromise. The judgment of the Ex- chequer Chamber (t) affirmed this, but showed some dissatisfaction even with the limited right of compro- mise admitted in the Court below. It was observed that there was really very little authority for it; and although it was not actually so laid down, it looks as if the Court would have been ready to decide if neces- sary that the compromise of any criminal offence is illegal. 67 In a late case, however, the Court of Appeal entertained no doubt that where there is a choice of a civil or criminal remedy a compromise of criminal as well as civil proceedings is lawful (w). It is not compounding felony for a person whose name has been forged to a bill to adopt the forged signature and advance money to the forger to enable him to take up the bill. It is doubtful whether a security given by the forger for such advance is valid: but he cannot himself actively dispute it (on the principle potior est conditio defendentis, of which afterwards), nor can his trustee in bankruptcy, who for this purpose is in no better position than himself, as there is in any case no offence against the bankrupt laws (as). An agreement by an accused person with his bail to indemnify him against liability on his recognizances is illegal, as depriving the public of the security of the bail (y) The compounding of offences under penal statutes is 18 Eliz. c. 5. expressly forbidden by 18 Eliz. c. 5, s. 5. 68 -^•An election petition, though not a criminal pro- [ -jfc- 290] ceeding, is a proceeding of a public character and in- Compromise terest which may have penal consequences; and an r agreement for pecuniary consideration not to proceed (t) 9 Q. B. at p. 392. (u) Fisher & Co. v. Appollinaris Co., 10 Ch. 297. (x) Otherwise where, after an act of bankruptcy, the bank- rupt's money has been paid for stifling a prosecution: there the trustee can recover it: Ex parte Wolverhampton Banking Co., 14 Q. B. D. 32; Ex parte Caldecott, 4 Ch. D. 150. (y) Wilson v. Strugnell, 7 Q. B. D. 548. 67 It is also illegal to influence so as to produce a favorable ter- mination. Ormerod v. Dearman, 4 Out. (Pa.) 561; Bhodes v. Neal, 64 Ga. 704; Eicketts v. Harvey, 78 Ind. 152. 68 Therefore an agreement to do such indictable act is void as against law. McMahon v. Smith, 47 Conn. 221 ; Bailey v. Buck, 11 Vt. 252; Clark v. Pomeroy, 4 Allen, 534; Crowder v. Eeed, 80 Ind. 1; Clark v. Colbert, 67 Ala. 92. of election petition. 344 UNLAWFUL AGREEMENTS. In civil proceedings. Compromise improperly procured: Cooth v. Jackson. Secret agree- ment as to conduct of winding up: Elliott v. Richardson. [*291] with an election petition is void at common law, as ita effect would be to deprive the public of the benefit which would result from the investigation (z). In like manner an agreement for the collusive con- duct of a divorce suit is void (a), 69 and an agreement not to expose immoral conduct has been held void as against public policy (b). 70 Agreements relating to proceedings in civil courts, and involving anything inconsistent with the full and impartial course of justice therein, though not open to the charge of anything like actual corruption, are like- wise held void. Where an agreement for compromise of a suit (a thing regarded as in itself rightful and even laudable) was in fact founded on information privily given to one of the parties by an officer of the Court in violation of his duty (such information not being specific, but a general intimation that it would be for the party's interest to compromise), Lord Eldon held that it could not be enforced (c). A shareholder in a company which was in course of compulsory winding-up agreed with other shareholders, who were also creditors, in consideration of being in- demnified by them against all future calls on his shares, that he would help them to get an expected call post- poned, and also support their claim: it was held that " such an agreement amounts to an interference with the course of public justice": 71 for the clear intention of the Winding-up Acts is that the proceedings should be taken with reasonable speed so that the company's affairs may be settled and the shareholders relieved; and therefore any secret agreement ^fto delay pro- ceedings to the prejudice of the other shareholders and creditors is void (d). This comes near to the cases of secret agreements with particular creditors in bank- ruptcy or composition: and those cases do in fact rest partly on this ground. But the direct fraud on the other creditors is the chief element in them, and we (z) Coppock v. Bower, 4M.&W. 36J. (a) Hope v. Hope, 8 D. M. G. 731. (6) Brown v. Brine, 1 Ex. D. 5. (c) Cooth v. Jackson. 6 Ves. 11, 31, 32. (A) Elliott v. Eichardson, L. E. 5 C. P. 744, 748-9, per Willes, J. 69 An agreement to withdraw a divorce suit is an act which the law approves. Adams v. Id. , 91 N. Y. 381. 70 Contra, Wells v. Sutton, 85 Ind. 70. 71 Dixen v. Olmstead, 9 Vt. 310; Doughty v. Owen, 24 Miss. 404; Douville v. Merrick, 25 Wis. 688. ARBITRATION HOW FAR ENFORCEABLE. 345 have therefore spoken of them under an earlier head (p. 238). Agreements to refer disputes to arbitration are, or Agreements rather were, to a certain extent regarded as encroach- for reference ments on the proper authority of courts of justice by *° aTDitra - the substitution of a "domestic forum" of the parties' valid at™ ^ own making. At common law such an agreement, common law. though so far valid that an action can be maintained for a breach of it (e), does not "oust the ordinary jur- isdiction of the Court" — that is, cannot be set up as a bar to an action brought in the ordinary way to deter- mine the very dispute which it was agreed to refer. 72 Nor could such an agreement be specifically enforced (/), or used as a bar to a suit in equity (g). It is said how- ever "that a special covenant not to sue may make a difference" (g). And the law has not been directly Practically altered (g) : but the Common Law Procedure Act, 1854 enforceable (17 & 18 Vict. c. 125, s. 11), gave the Courts a discre- " nd . er J C ;^ tion to stay proceedings in actions or suits on the sub- ' ' ject-matter of an agreement to refer, which amounts in practice to enabling them to enforce the agreement: and this discretion has as a rule been exercised by Courts both of law (h) and of equity (i) in the absence of special circumstances, such as a case where a charge of fraud is made, and the party charged with it desires the inquiry to be public (fc), or where the defendant appeals -fa to an arbitration clause not in good faith, [ -fa 292] but merely for the sake of vexation or delay (I). A question whether on the true construction of an arbi- tration clause the subject-matter of a particular dispute falls within it is itself to be dealt with by the arbitra- tor, if it appears from the nature of the case and the (e) Livingston v. Ralli, 5 E. & B. 132, 24 L. J. Q. B. 269. (/) Street r. Rigby, 6 Ves. 815, 818. (g) Cooke v. Cooke, 4 Eq. 77, 86-7. (ft) Bandegger v. Holmes, L. E. 1 C. P. 679; Seligmann v. Le Boutillier, ib. 681. (i) Willesford v. Watson, 14 Eq. 572, 8 Ch. 473; Plews v. Baker, 16 Eq 564. (k) Bussell v. Russell, 14 Ch. D. at p. 476 ( Jessel, M. E.). (0 14 Eq. 578; Witt v. Corcoran, 8 Ch. 476. ■«., 16 Eq. 571. The enactment applies only where there is at the time of action brought an existing agreement for reference which can be carried into effect. Bandell, Saunders & Co. v. Thompson (C. A.), 1 Q. B. D. 748. 72 A verbal submission of a controversy to arbitration is valid; except that neither it nor the award can extend to what the par- ties could not themselves do verbally. Peabody v. Rice, 113 Mass. 31; French v. New, 28 N. Y. 147; Stockwell v. Bramble, 3 Ind. 428; Phelps v. Dolan, 75 III. 90. 346 UNLAWFUL AGREEMENTS. Special statutory arbitration clauses. Agreement of parties may make right of action conditional on arbitra- tion. [*293] terms of the provisions for arbitration that such was the intention of the parties. Otherwise it must be de- cided by the Court (m). And when the question is whether an agreement con- taining an arbitration clause is or is not determined, that question is not one for arbitration, since the arbi- tration clause itself must stand or fall with the whole agreement (n). Certain statutory provisions for the reference to arbi- tration of internal disputes in friendly and building societies have been decided (after some conflict) to be cumpulsory and to exclude the ordinary jurisdiction of the Courts (o). The Railway Companies Arbitration Act, 1859, is also cumpulsory ( p). Moreover parties may if they choose make arbitra- tion a condition precedent to any right arising at all, and in that case the foregoing rules are inapplicable : as where the contract is to pay such an amount as shall be determined by arbitration or found due by the cer- tificate of a particular person (q). Whether this is in fact the contract -^ or it is an absolute contract to pay in the first instance, with a collateral provision for refer- ence in case of difference as to the amount, is a ques- tion of construction on which there has been some dif- ference of opinion in recent cases (r). 73 (m) Piercy v. Young (C. A.), 14 Ch. D. 200, 208, per Jessel, M. R., qualifying the apparent effect of Willesford v. Watson, 8 Ch. 473. (n) Per James, L. J. in Llanelly Ey. & Dock Co. v. L. & N. W. Ry. Co., 8Ch. at p. 948. (o) Thompson v. Planet Benefit Building Society, 15 Eq. 333; Wright v. Monarch Investment Building Society, 5 Ch. D. 726; Hack v. London Provident Building Society, 23 Ch. D. 103; Municipal Building Society r. Kent, 9 App. Ca. 260. Not so' where the real question is whether a party claiming against the society is a member of the society at all, Prentice v. London, L. E. 10C. P. 679. (p) Watford v. Rickmansworth Ey. Co. v. L. & N. W. Ey. Co., 8 Eq. 231. (q) Scott v. Avery, 5H. L. C. 811; which does not overrule the former general law on the subject, see the judgments of Brett, J., and Kelly, C. B., in Ex. Ch. in Edwards v. Aberayon, &c. Society, 1 Q. B. D. 563; Scott r. Corporation of Liverpool, 3 De G. & J. 334. Cp. Collins v. Locke (J. C.) 4 App. Ca. 674, 689. (r) Elliotts. Royal Exchange Assurance Co., L. R. 2 Ex. 237: Dawson r. Fitzgerald (C. A.), 1 Ex. D. 257, revg. s. c. L. E. 9 Ex. 7. 73 An agent who is authorized to settle claims against his prin- cipal is not authorized to submit them to arbitration. Michigan R. R. v. Gougar, 55 111. 503. Neither can a person instructed to make a submission to a particular arbitrator substitute another. Cox v. Fay, 54 Vt. 446. CHAMPERTY AND MAINTENANCE. 347 We now come to a class of transactions which are Maintenance specially discouraged, as tending to pervert the due and cnam_ course of justice in civil suits. perty. These are the dealings which are held void as amount- ing to or being in the nature of champerty or mainte- nance. The principle of the law on this head has been denned to be " that no encouragement should be given to litigation by the introduction of parties to enforce those rights which others are not disposed to en- force" (s). Maintenance is properly a general term of which champerty is a species. Their most usual mean- ings (together with certain additions and distinctions now obsolete) are thus given by Coke: — " First, to maintain to have part of the land or any- thing out of the land or part of the debt, or any other thing in plea or suit; and this is called cambipartia [champart, campipartitio\, champertie." The second is " when one maintaineth the one side without having any part of the thing in plea or suit"(i). Champerty may accordingly be described as " mainte- nance aggravated by an agreement to have a part of the thing in dispute" (w). Agreements falling distinctly within these descrip- tions are punishable under certain statutes (x). It has always -fa been considered, however, that champerty [ "A" 294] and maintenance are offences at common law, and that the statutes only declare the common law with addi- tional penalties (y). Whether by way of abundant caution or for other Relation of reasons, the law was in early times applied or at any tlle statutes rate asserted with extreme and almost absurd severity (z). ° e It was even contended, as we had occasion to see in i aw- an a the last chapter, that the absolute beneficial assign- modem ment of a contract was bad for maintenance. The mod • policy of em cases, however, proceed not upon the letter of the e aw ' statutes or of the definitions given by early writers, but upon the real object and policy of the law, which is to repress that which Knight Bruce, L. J. spoke of as "the (s) By Lord Abinger in Prosser v. Edmonds, 1 Y. &C. Ex. 481, 497. (t) Co. Lit. 3.68 6. Every champerty is maintenance, 2 Ro. Ab. 119 R. (it) Bovill, arg. in Sprye v. Porter, 7 E. & B. 58, 26 L. J. Q. B. 64. (a;) 3 Ed. 1 (Stat. Westm. 1), c. 25; 13 Ed. 1 (Stat. Westm. 2), c. 49: 28 Ed. 1,'st. 1. c. 11; Stat de Conspiratoribns, temp, in- cert.; 20 Ed. 3, c. 4; 1 Ric. 2, c. 4; 7 Ric. 2, c. 15; and 32 H. 8, c. 9, of which more presently. (y) Pechell v. Watson, 8 M. & W. 691, 700; 2 Ro. Ab. 114 D. (3) See Bacon's Abridgment, Maintenance, A. (5. 250). 348 UNLAWFUL AGREEMENTS. traffic of merchandising in quarrels, of huckstering in litigious discord," which decent people hardly require legal knowledge to warn them from, and which makes the business and profit of " breedbates, barretors, coun- sel whom no Inn will own, and solicitors estranged from every roll " (a). On the other hand the Courts have not deemed themselves bound to permit things clearly within the mischief aimed at any more than to forbid things clearly without it. They have in fact taken ad- vantage of the doctrine that the statutes are only in affirmance of the common Jaw to treat them as giving indications rather than definitions; as bearing witness to the general " policy of the law " but not exhausting or restricting it. It is not considered necessary to de- cide that a particular transaction amounts to the actual offence of champerty or maintenance in order to dis- allow it as a ground of civil rights: it will be void as "savouring of maintenance" if it clearly tends to the same kind of mischief. The cases are somewhat numerous, and various in their special circumstances. A full examination of them would lead us to a length out of proportion to the [ -^ 295] place of the -^- subject here (b). Their general effect, however, is sufficiently clear. Of maintenance pure and simple, an important head in the old books, there are very few modern examples ( c ) ; almost all the de- cisions illustrate the more special rule against cham- perty, namely that " a bargain whereby the one party is to assist the other in recovering property, and is to share in the proceeds of the action, is illegal " (d). On this head the rules now established appear to be as follows : Rules as to (<*) An agreement to advance funds or supply evi- champerty. dence with or without professional assistance (or, it seems, professional assistance only) (e) for the recovery of property in consideration of a remuneration contin- gent on success and proportional to or be paid out of the property recovered is void (/). (a) Eeynell o. Sprye, 1 D. M. G. atpp. 680^686! (6) For an account of the decisions see Leake's Digest, 730. (c) One is Bradlaugh v. Newdegate, 11 Q. B. IT. 1. (d) Per Blackburn, J. Hutley «. Hutely, L. R. 8 Q. B. 112. (e) Per Jessel, M. R., Re Attorneys and Solicitors Act, 1 Ch. D. 573, where the agreement was to pay the solicitors in the event of success a percentage of the property recovered; but probably the real meaning of it was that the solicitors should find the funds. Cp. Grell v. Levy, 16 C. B. N. S. 73, and Strange' v. Brennan, cited p. 297 below. (/) Stanley v. Jones, 7 Bing. 369; Reynell v. Sprye, 1 D. M. CHAMPERTY. 349 (/?) A solicitor cannot purchase the subject-matter of a pending suit from his client in that suit (g): but he may take a security upon it for advances already made and costs already due in the suit (h). (/) Except in the case last mentioned, the purchase of property the title to which is disputed, or which is the subject of a pending suit, or an agreement for such purchasers not in itself unlawful (i): but such an agreement is unlawful arjd void if the real object of it is only to enable the purchaser to maintain the suit (j). •jf We proceed to deal shortly with these proposi- [ -^ 296] tions in order. a. This rule was laid down in very clear terms by (a) Agree- Tindal, C. J. in Stanley v. Jones (fc), which seems to be merit to the first of the modern cases at law. furnish t money or " A bargain by a man who has evidence in his own possession f or utiga- respeeting a matter in dispute between third persons and who tion on at the same time professes to have the means of procuring more terms of evidence, to purchase from one of the contending parties, at the s arm S price of the evidence which he so possesses or can procure, a recovered is share of the sum of money which shall be recovered by means of void, the production of that very evidence, cannot be enforced in a Court of law. ' ' It is quite immaterial for this purpose whether any- litigation is already pending or not, although the offence of maintenance is properly maintaining an exist- ing suit, not procuring one to be commenced. It is ob- vious that the mischief is even greater in the case where a person is instigated by the promise of indemnity in the event of failure to undertake litigation which otherwise he would not have thought of. If a person who is in actual possession of certain definite evidences of title proposes to deliver them to the person whose title they support on the terms of having a certain G. 660; Sprye v. Porter, 7 E. & B. 58, 26 L. J. Q. B. 64; Hutley v. Hutley, L. E. 8 Q. B. 112. (g) Wood v. Downes, 18 Ves. 120; Simpson v. Lamb, 7 E. & B. 84. (h) Anderson v. Eadcliffe (Ex. Ch.), E. B. & E. 806, 29 L. J. Q. B. 128. (i) Hunter v. Daniel, 4 Ha. 420; Knight v. Bowyer, 2 De G. & J. 421, 444. (j) Prosseru Edmonds, 1 Y. & C. Ex. 481; Harrington v. Long, 2 My. & K. 590; De Hoghton r. Money, 2 Ch. 164; Seear v. Lawson (C. A.), 15 Ch. D. 426, where the precise extent of the doctrine is treated as doubtful. (*) 7 Bing. 369, 377. 350 UNLAWFUL AGREEMENTS. Verbal evasions ineffectual. [*297] share of any property that may be recovered by means , of these evidences, there being no suit depending, and no stipulation for the commencement of any, this is not unlawful ; for litigation is not necessarily contemplated at all, and in any case there is no provision for main- taining any litigation there may be (I). But it is in vain to put the agreement in such a form if these terms are only colourable (m), and the real agreement is to supply evidence generally for the maintenance of an intended suit: the illegal intention may be shown, and the transaction -^ will be held void (n). Still less can the law be evaded by slighter variations in the form or manner of the transaction: for instance, an agree- ment between solicitor and client that the solicitor shall advance funds for carrying on a suit to recover posses- sion of an estate, and in the event of success shall re- ceive a sum above his regular costs " according to the interest and benefit" acquired by the possession of the estate, is as much void as a bargain for a specific part of the property (o). So where a solicitor was to have a percentage of the fund recovered in a suit, it was held to be not the less champerty because he was not himself (and in fact could not be) the solicitor in the suit, but employed another (p). An agreement by a solicitor with a client simply to charge nothing for costs in a particular action is not champerty {q)- u (P) Solicitor §• This rule came to be laid down in a somewhat in suit can- curious way. In Wood v. Dowries (r) Lord Eldon set (I) Sprye v. Foster, 7 E. & B. 58, 26 L. J. Q. B. 64. (m) As a matter of fact, it is difficult to suppose that they could ever be otherwise. fn) Sprye v. Porter, 7 E. & B. 58, 26 L. J. Q. B. 64. (o) Earle v. Hopwood, 9 C. B. N. S. 566, 30 L. J. C. P. 217. (p) Strange v. Brennan, 15 Sim. 346, 2 C. P. Cooper (temp. Cottenham) 1. The agreement was made with a solicitor in Irer land, not being a solicitor of the English Court of Chancery, and the fund to be recovered was in England. (q) Jennings v. Johnson, L. E. 8 C. P. 425. ' 18 Yes. 120. 74 Contracts which involve champerty or any other form of maintenance are void under the common law as it existed in England when our country was first settled. The old doctrine has been modified, however, and in some states little of its im- pediments remain, while in some it presents nearly all its origi- nal proportions. Martin v. Clark, 8 R. I. 389; Brown v. Beau- champ, 5 T. B. Mon. 413; Arden v. Patterson, 5 Johns. Ch. 44; McMicken v. Perin, 18 How. (U. S.) 507; Martin v. Amos, 13 Ired. 201; Coquillard v. Bearss, 21 Ind. 479; Byrd v. Odem, 9 Ala. 755. PURCHASE OP THINGS IN LITIGATION. 351 aside a purchase by a solicitor from his client of the not purchase res litigiosa, partly on the ground of maintenance. But sub J ect " it is to be noted as to this ground that the agreement ^suit'from for sale was in substitution for a previous agreement his client, which clearly amounted, and which the parties had dis- This rule covered to amount, to maintenance: and the Court ap- anomalous, pears to have inferred as a fact that it was all one illegal transaction, and the sale merely colourable (s). The other ground, which, alone would have been enough, was the presumption of undue influence in such a trans- action, arising from the fiduciary -fa relation of solicitor [ -^ 298] and client 75 (of which we shall speak in a subsequent chapter). The Court of Queen's Bench, however, in Simpson v. Lamb (t) followed Wood v. Dowries, as hav- ing laid down as a matter of the " policy of the law," the positive rule above stated. In Anderson v. Rad- cliffe (u), unanimous judgments in both the Q. B. and the Ex. Ch. added the qualification that a conveyance by way of security for past expenses is nevertheless good. The Court of Exchequer Chamber showed a de- cided opinion that Simpson v. Lamb had gone too far, but without positively disapproving it. In Knight v. Bowyer, again, Turner, L. J. said " I am aware of no rule of law which prevents an attorney from purchasing what anybody else is at liberty to purchase, subject, of course, if he purchases from a client, to the conse- quences of that relation " {x). But the case before the Court was not the purchase by a solicitor from his client of the subject-matter of a suit in which he was solicitor; Simpson v. Lamb, therefore, was only treated as dis- tinguishable (x). The case must at present be con- sidered a subsisting authority, but anomalous and not likely to be at all extended {y).™ y. As to the purchase of things in litigation in gen- i y \ p ur . eral, the authorities cannot all be reconciled in detail, chase of (.s) Cp. Sprye v. Porter, supra. In Wood v. Downes the parties do not seem to have even kept the original and real agreemant off the face of the transaction in its ultimate shape. See p. 123. It is to be regretted that the reporter did not preserve the full statement of the facts (p. 122) with which the judgment opened. (f) 7 E. & B. 84. (u) E. B. & E. 806, 28 L. J. Q. B. 32, 29 ib. 128 (x) 2 De G. & J. at p. 445. (y) Cp. however the Austrian Civil Code, which makes such agreements void ($ 879). 75 A gift from a clien^to his solicitor is absolutely void. Green- field's Est., 2 Harris (Pa.), 489. 76 c - 9 - tion. After reciting the mischiefs of " maintenance Dl ^y e S e]f embracery champerty subornation of witnesses sinister r bargain labour buying of titles and pretensed rights of persons for any not being in possession," and confirming all existing ^S^t in statutes against maintenance, it enacts that : J^ seller 6SS hath been in " No person or persons, of what estate degree or condition so possession or ever he or they be, shall from henceforth bargain buy or sell, or taken the by any ways or means obtain get or have, any pretensed rights P ronts lor or titles, or take promise grant or covenant to have any right or title of any person or persons in or to any manors lands tene- ments or hereditaments, but if such person or persons which shall so bargain sell give grant covenant or promise the same their antecessors or they by whom he or they claim the same have been in possession of the same or of the reversion or re- mainder thereof or taken the rents or profits thereof by the space of one whole year next before the said bargain covenant grant or promise made." The penalty is forfeiture of the whole value of the Penalty and lands (s. 2), saving the right of persons in lawful pos- saving, session to buy in adverse claims (s. 4). There is no (e) Per Cur. (Ex. Ch.), Williams v. Protheroe, 5 Bing. 309, 314. (/) See Bloxam v. Metrop. Ry. Co., 3 Ch. at p. 353. (g) 2 Ro. Ab. 113 B., Y. B. 21 E. 3, 10, pi. 33 [cited as 52 in Kol'le]; but in 50 Ass. 323, pi. 3, the general opinion of the Ser- geants is con'ra. Cp. 4 Kent, Coram. 449. 77 "Champerty is frowned upon both by law and equity, as tending not only to foment litigation, but to prevent the objects of the law." Story on Contracts, Sec. 581, and see Arden v. Pat- terson, 5 Johns. Ch. 44. 23 PRINCIPLES OF CONTRACT. 354 UNLAWFUL AGREEMENTS. [*301] Dealings held within the statute. Agreement to lecover and divide property. Sale of term by adminis- trator out ot possession. [*302] Secus sale of non-litigious expectancy. express saving of grants or leases by persons in actual possession who have -fa been so for less than a year : but either the condition as to time applies only to re- ceipt of rents or profits without actual possession, or at all events the intention not to touch the acts of owners in possession is obvious (»). This, like the other statutes against maintenance and champerty, is said to be in affirmance of the common law (i). It "is formed on the view that possession should remain undisturbed. Dealings with property by a person out of possession tend to disturb the actual possession to the injury of the public at large " (fc). It is immaterial whether the vendor oat of possession has in truth a good title or not (i). An agreement between two persons out of possession of lands, and both claim- ing title in them, to recover and share the lands, is con- trary to the policy of this statute, if not champerty at common law; therefore where co-plaintiffs had in fact conflicting interests, and it was sought to avoid the re- sulting difficulty as to the frame of the suit by stating an agreement to divide the property in suit between them, this device (which now would in any case be disallowed on more general grounds) (I) was unavailing; for such an agreement, had it really existed, would have been un- lawful, and would have subjected the parties to the penal- ties of the statute (m). Where after the death of a lessee a stranger had en- tered, and remained many years in possession, a sale of the term by the administrator of the lessee was held void as contrary to the statute, although in terms it only for- bids sales of pretended rights, &c, tinder penalties, with- out expressly making them void (n). But the sale of a contingent right ^or a mere expectancy, not being in the nature of a claim adverse to any existing possession, is not forbidden. The sale of a man's possible interest (i) By Mountague, C. J. Partridge v. Strange, Plowd. 88, cited in Doe d. Williams v. Evans, 1 C. B. 717; ib. 89. See further Jenkins v. Jones, C. A., 9 Q. B. D. 128, as to the meaning of "pretensed rights " and the limited application of the statute at the present time. A right or title which is grantable under 8 & 9 Vict. c. 106, is not now ' ' pretensed ' ' merely because the grantor has never been in possession. (k) Per Lord Redesdale, Cholmondeley v. Clinton, 4 Bligh, at p. 75. (I) See Cooke v. Cooke, 4 D. J. S. 704; Pryse v. Pryse, 15 Eq. 86. (m) Cholmondeley v. Clinton, 4 Bligh. 1, 43, 82, per Lord Eldon and Lord Redesdale. (n) Doe d. "Williams v. Evans, 1 C. B. 717, 14 L. J. C. P. 237. Cp. above as to the construction of prohibitorv statutes in general, p. 253. MAINTENANCE. 355 as the devisee of a living owner, on the terms that he shall return the purchase-money if he does not become the devisee, is not bad either atcommonlaw as creating an unlawful interest in the present owner's death, or as a bargain for a pretended title under the statute (o). Proceedings in lunacy seem not to be within the gen- Proceeding^ eral rules as to champerty, as they are not analogous to in lunacy ordinary litigation, and their object is the protection of not wit hin the person and property of the lunatic, which is in itself Lainst to be encouraged; and " this object would in many cases champerty- be impeded rather than promoted by holding that all agreements relative to the costs of the proceedings or the ultimate division of the property were void" (p). n As to maintenance in general, maintenance in the strict Maintenance and proper sense is understood to mean only the main- in general, tenance of an existing suit, not procuring the commence- ment of a new one. But the distinction is in practice immaterial even in the criminal law (q). It is of more importance that a transaction cannot be void for champ- erty or maintenance unless it be "something against good policy and justice, -fa something tending to promote un- [ -^ 303] necessary litigation, something that in a legal sense is immoral, and to the constitution of which a bad motive in the same sense is necessary " (s). Therefore, for ex- (o) Cook v. Field, 15 Q. B. 460, 19 L. J. Q. B. 441. By the civil law, however, such contracts are regarded as contra bnnos mores. " Huiusmodi pactiones odiosae videntur et plenae tristissimi et periculosi eventus," we read in a rescript of Justinian on an agree- ment between expectant co-heirs as to the disposal of the inherit- ance. The rescript goes on, quite in the spirit of our own statute, to forbid in general terms all dealings "in alienis rebus contra domini voluntatem ',' (C. 2. 3. depactis, 30). By the French Civil Code, art. 1600 (followed by the Italian Code, art. 1460). " On ne peut vendre la succession d'unepersonne vivante, mime de son con- sentcment: " cp. 791, 1130. The Austrian Code (jS 879) also expressly forbids the alienation of an expected inheritance or legacy. In Eoman law the rule that the inheritance of a living person could not be sold is put only on the technical ground " quia in rerum natura non sit quod venierit " (D. 18. 4. de hered. vel actione ven- dita, 1, and see eod. tit. 7-11). (p) Persse v. Persse, 7 CI. & F. 279, 316, per Lord Cottenham. (q) See Wood v. Downes, 18 Ves. at p. 125. (s) Fischer v. KamalaNaicker, 8 Moo. Ind. App. 179, 187. This is not necessarily applicable in England, being said with reference to the law of British India, where the English laws against main- tenance and champerty are not specifically in force: see Ram Coo- mar Coondoo v. Chunder Canto Mookerjee, 2 App. Ca. 186, 207-9. But it fairly represents the principles on which English judges 78 Embracy is a speciesof maintenance. Williamson v. Henley, 6 Bing. 299; Story on Contracts, Sec. 580. 356 UNLAWFUL AGREEMENTS. Certain relations will justify maintenance but not champerty. C. Public policy as to legal duties of indivi- duals. [*304] Agreements as to custody or education of children. ample, a transaction cannot be bad for maintenance whose object is to enable a principal or other person really in- terested to assert his rights in his own name (s). Nor is it maintenance for several persons to agree to defend a suit in the result of which they have, or reasonably believe they have, a common interest (t). But a bar- gain to have a share of property to be recovered in a suit in consideration of maintaining the suit by the supply of money and evidence is not saved from being champ- erty by the party's having a mere collateral interest in the result of the suit (u). Where a person sues for a statutory penalty as a common informer, it is maintenance to indemnify him against costs (x). Lineal kinship in the first degree or apparent heir- ship, and to a certain extent, it seems, any degree of kindred or affinity, or the relation of master and ser- vant, may justify acts which as between strangers would be maintenance: but blood relationship will not justify champerty (y). c. As to matters touching legal (and possibly moral) duties of individuals in the performance of which the public have an interest. Certain kinds of agreements are or have been con- sidered -fa unlawful and void as providing for or tend- ing to the omission of duties which are indeed duties towards individuals, but such that their performance is of public importance. To this head must be referred the rule of law that a father cannot by contract deprive himself of the right to the custody of his children (z) or of his discretion as to their education. 79 He "can- not bind himself conclusively by contract to exercise in all events in a particular way rights which the law gives him for the benefit of his children and not for his own." And an agreement to that effect — such as have acted in the modern cases. The result of the Indian case last mentioned seems to be that in British India the Courts are free to adopt the doctrine of champerty, so far as they think it reasonable, as part of the general judicial scheme of public policy. (0 Findon v. Parker, 11 M. & W. 675. Cp. 2 Eo. Ab. 115 G. (u) Hutley v. Hutley, L. R. 8 Q. B. 112. (a;) Bradlaugh t>. Newdegate, 11 Q. B. D. 1. (y) Hutley v. Hutley, L. R. 8 Q. B. 112. See 2 Ro. Ab. 115- 116. (z) Be Andrews, L. R. 8 Q. B. 153, and authorities there col- lected. 79 It is not a privilege of the father, but a duly cast upon him by considerations of public welfare. Bispham's Eq. (4th Ed.). Sec. 547. CUSTODY OF CHILDREN. 357 an agreement made before marriage between a hus- band and wife of different religions that boys shall be educated in the religion of the father, and girls in the religion of the mother — cannot be enforced as a con- tract (a). After the father's death the Court has a certain dis- cretion. The children are indeed to be brought up in his religion, unless it is distinctly shown by special cir- cumstances that it would be contrary to the infant's benefit (b). 80 When such circumstances are in ques- tion, however, the Court may inquire " whether the fa- ther has so acted that he ought to be held to have waiv- ed or abandoned his right to have his children educated in his own religion;" and in determining this the ex- istence of such an agreement as above mentioned is material (c). The father's conduct in giving up the maintenance, control, or education of his children to others may not only leave the Court free to make after his death such provision as seems in itself best; it may preclude him even from asserting his rights in his life- time (d). Clauses in separation deeds or agreements for sepa- In separation ration, purporting to bind the father to give up the deeds, general custody of his children or some of them, have for the like reasons been held void; and specific per- formance of an agreement to execute a separation deed containing such clauses has •^•been refused (e). In [ ^r 305] one case, however, such a contract can be enforced; namely, where there has been such misconduct on the father's part that the Court would have interfered to take the custody of the children from him in the exer- cise of the appropriate jurisdiction and on grounds in- dependent of contract. The general rule is only that the custody of children cannot be made a mere matter of bargain, nor that the husband can in no circumstan- ces bind himself not to set up his paternal rights (/). The law on this point is now modified by the Act 36 36 Vict, c Vict. c. 12, which enacts (s. 2) that 12, s. 2. (t unlawful give as briefly as may be the rules which govern our Courts in dealing with them, and which are almost without exception independent of the particular ground (e) Mouflet v. Cole, L. R. 7 Ex. 70, in Ex. Ch. 8 Ex. 32. (/) Wallis v. Day, 2 M. & W. 273, 1 Sm. L. C. 377—8. The law of Scotland is apparently the same according to the modern authorities. (g) See Hargrave's argument in Sommersett's ca. 20 St. T. 49, 66. (h) Cod. Civ. 1780: On ne peut engager ses services qui a temps, ou pour une entreprise d6termin6e: so the Italian Code, 1628. (i) See next note, and cp. the similar doctrine as to promises of marriage, supra. (&) Pilkington v. Scott, 15 M. & W. 657; Cp. Hartley v. Cum- mings, 5 C. B. 247. 91 See "Whiting v. Slayton, 40 Me. 224; Duffy v. Shockey, 11 Ind. 70; Gilman v. Dwight, 13 Gray, 356. 92 As to the meaning of ' ' reasonable space, " see Butler v. Bur- leson, 16 Vt. 176; McCurg's Appeal, 8 P. F. Sm. 51; Warfield v. Booth, 33 Md. 63; Cook v. Johnson, 47 Conn. 175. GENERAL RULES : UNLAWFUL CONSIDERATION OR OBJECT. 371 of illegality. The general principle, of course, is that an unlawful agreement cannot be enforced. But this alone is insufficient. We -^- still have to settle more [ -^ 320] fully what is meant by an unlawful agreement. For an agreement is the complex result of distinct elements, and the illegality must attach to one or more of those elements in particular. It is material whether it be found in the promise, the consideration, or the ulti- mate purpose. Again, there are questions evidence and procedure for which auxiliary rules are needed within the bounds of purely municipal law. Moreover when the jurisdictions within which a contract is made, is to be performed, and is sued upon, do not coincide, it has to be ascertained by what local law the validity of the contract shall be determined (conflict of laws in space): again the law may be changed between the time of making the contract and the time of performance (con- flict of laws in time, as it has been called). This general division is a rough one, but will serve to guide the arrangement of the following statement. Unlawfulness of agreement as determined by particular elements. 1. A lawful promise made for a lawful consideration is not invalid only by reason of an unlawful promise being made at the same time and for the same consid- eration. In Pigot's case (I) it was resolved that if some of the 1. Inde- covenants of an indenture or of the conditions indorsed pendent upon a bond are against law, and some good and law- P romlses > -in ■ -i • i • i*i 'ii somG Jciwiui fu.1, the covenants or conditions which are against law au ^ some are void ah initio and the others stand good. 93 Accord- unlawful: ingly "from Pigot's case, 6 Co. Rep. 26 (m), to the th e lawful latest authorities it has always been held that when on f s ca ° there are contained in the same instrument distinct en- , gagements by which a party binds himself to do cer- tain acts, some of which are legal and some illegal at common law, the performance of those -fa which are [^-321] legal may be enforced, though the performance of those which are illegal cannot" (n). And where a transac- tion partly valid and partly not i* deliberately separat- (/) 11 Co. Rep. 27 b. (m) Sic. in the report. Parts 11, 12, and 13 of Coke's Reports form vol. 6 in the edition of 1826. (»i) Bank of Australasia v. Breillat. 6 Moo. P. C. 152, 201. 93 Covington v. Threadgill, 88 N. C. 186; Perkins v. Cum- mings, 2 Gray, 258; Cotten v. McKenzie, 57 Miss. 418. 372 UNLAWFUL AGREEMENTS. ed by the parties into two agreements, one expressing the valid and the other the invalid part; there a party who is called upon to perform his part of that agree- ment which is on the face of it valid cannot be heard to say that the transaction as a whole is unlawful and void (o). It was formerly supposed that where a deed is void in part by statute it is void altogether: but this is not so. "Where you cannot sever the illegal from the legal part of a covenant, the contract is altogether void; 9 * bat where you can sever them, whether the illegality be created by statute or by the common law, you may reject the bad part and retain the good" (p). 2. Unlawful 2. If any part of the consideration for a promise consideration or set of promises is unlawful, the whole agreement is or part of _ vo i,j. avoids^he 1011 " ^ or ** * s i m P oss ible in such case to apportion the ■whole agree- weight of each part of tbe consideration in inducing ment: the promise" (<" (g) Leake on Contracts (1st ed.), 409. "Waite v. Jones, 1 Bing. N. C. 656, 662. To be consistent with the foregoing rule this must be limited to cases where the consideration is really insep- arable. 94 Tenny v. Foote, 95 111. 99; McBratney v. Chandler, 22 Kan. 692; Barton v. Plank Eoad, 17 Barb. 397. 95 Valentine v. Stewart, 15 Cal. 387; Widoe v. Webb, 20 Ohio, 431; Hanauer v. Gray. 25 Ark. 350; Braitch v. Guelick, 37 Iowa, 212: Bixby t>. Moor, 51 N. H. 402; Newberry Bank v. Stegall, 41 Miss. 142. 96 And a contract executed in consideration of a previous illegal one is also void. Cate v. Blair, 6 Coldw. 639; Pierce v. Kibbee, 51 Vt. 559; King v. Winants, 71 N. C. 469, and 73 N. C. 563. UNLAWFUL USE OF SUBJECT-MATTER. 373 statement is material chiefly for the sake of the con- trasted class of cases under the next rule. 4 When the immediate object or consideration of an 4. Where agreement is not unlawful, but the intention of one or immediate both parties in making it is unlawful, then — object not If the unlawful intention is at the date of the agree- unlawful' ment common to both parties, or entertained by one intention of party to the knowledge of the other, the agreement is both parties, void. or of one If the unlawful intention of one party is not known ^ the other- 11 to the other at the date of the agreement, there is a makes agree- con tract voidable at the option of the innocent party if ment void: he discovers that intention at any time before the con urjlawlu l tract is executed. 97 5*™ w 01 one not known at Here it is necessary to consider what sort of connex- time makes ion of the subject-matter of the agreement with an un- contract lawful plan or purpose is enough to show an unlawful o° ne r> s & & intention that will vitiate the agreement itself. This is option. not always easy to determine. In the words of the What Supreme Court of the United States:— constitutes ' ' Questions upon illegal contracts have arisen very intention often both in England and in this country; and no in such principle is better settled than that no action can be cases. maintained on a contract the consideration of which is either wicked in itself or prohibited by law. How far this principle is to affect subsequent or collateral con- tracts, the direct and immediate consideration of which is not immoral or illegal, is a question of considerable intricacy" (r) : or perhaps we should rather say it is a / question on which any attempt to lay down fixed and exhaustive rules in detail must lead to -^-considerable [ -^- 323] intricacy: at the date of these remarks however (1826) the law was much less clear on specific points than it is now. We have in the first place a well marked class of Intention to transactions where there is an agreement for the trans- P ut property fer of property or possession for a lawful consideration, £^ rc t a but for the purpose of an unlawful use being made of lawful use. it. All agreements incident to such a transaction are void; and it does not matter whether the unlawful pur- (r) Armstrong v. Toler, 11 Wheat, at p. 272. 97 He is entitled to recover back what he has paid under such a contract. Curtis v. Leavitt, 15 N\ Y. 9, and American authori- ties cited by Selden, J. in Tracy v. Talmage, 4 Kernan, 162 et seq. 374 UNLAWFUL AGREEMENTS. r * 324J Option of party in- nocent in the first instance to avoid the contract on discovering such in- tention. pose is in fact carried out or not (s). 9S The later auth- orities show that the agreement is void, not merely if the unlawful use of the subject-matter is part of the bargain, but if the intention of the one party so to use it is known to the other at the time of the agree- ment (£)." Thus money lent to be used in an unlawful manner cannot be recovered (u). It is true that money lent to pay bets can be recovered, but that, as we have seen, is because there is nothing unlawful in either making a bet or paying it if lost, though the payment cannot be enforced. If goods are sold by a vendor who knows that the purchaser means to apply them to an illegal or immoral purpose, he cannot recover the price: it is the same of letting goods on hire (t). If a build- ing is demised in order to be used in a manner for- bidden by a Building Act, the lessor cannot recover on any covenant in the lease (s). And in like manner if the lessee of a house .which to his knowledge is used by the occupiers for immoral purposes assigns the lease, knowing that the assignee means to continue the same use, he cannot recover on the assignee's covenant to idemnify him against the covenants of the original lease (x). It doeB not matter whether the seller or lessor does or does not expect to be paid out of the fruits of the illegal use of the property (t). ■fa An owner of property who has contracted to sell or let it, but finds afterwards that the other party means to use it for an unlawful purpose, is entitled (if not bound) to rescind the contract; nor is he bound to give his reason at the time of refusing to perform it. He may justify the refusal afterwards by showing the unlawful purpose, though he originally gave no reason at all, or even a different reason (y). But a completely executed transfer of property or an interest in property, though made on an unlawful con- (s) Gas Light & Coke Co. v. TurneT, 5 Bing. N. C. 666, in Ex. Ch. 6 ib. 324. (/) Pearce v. Brooks, L. R. 1 Ex. 213. (u) Cannan v. Bryce, 3 B. & Aid. 179. (x) Smith v. White, 1 Eq. 626. (y) Cowan v. Milbourn, L. B. 2 Ex. 230, see per Bramwell, B. ad fin. 98 Dunkin v. Hodge, 46 Ala. 523; Hawes v. Stebbins, 49 Cal. 369. 99 The officers of a corporation are not allowed to speculate on claims against it and contracts made with such officers for the purchase of a claim against the corporation cannot be enforced. Love v. Brindle, 7 Jones, 560'; McDonald v. Houghton, 70 N. C, 393. ULTIMATE PURPOSE UNLAWFUL. 375 sideration, or, it is conceived, for an unlawful purpose But an known to both parties, is valid both at law and i n ' executed equity (6), and cannot afterwards be set aside. And ™°g S g[ ° an innocent party who discovers the unlawful intention remains of the other after possession has been delivered under good, the contract is not entitled to treat the transaction as void and resume possession (c). 100 As with contracts voidable on other grounds, this rule applies, it is conceived, only where an interest in possession has been given by conveyance or delivery. The vendor who had sold goods so as to pass the gen- eral property, but without delivery, or the lessor who had executed a demise to take effect at a future day, might rescind the contract and stand remitted to his original possession on learning the unlawful use of the property designed by the purchaser or lessee (d). On the same principle an insurance on a ship or goods insurance is void if the voyage covered by the insurance is to the void where knowledge of the owner unlawful (which may happen V0Ta S e by the omission of the statutory requirements enacted ]5 no ^,i e( i ge for the protection of seamen and passengers, as well as of owner, in the -^ case of trading with enemies or the like). [-^-325] " Where the object of an Act of Parliament is to pro- hibit a voyage, the illegality attaching to the illegal voyage attaches also to the policy covering the voyage," if the illegality be known to the assured. But acts of the master or other persons not known to the owner do not vitiate the policy, though they may be such as to render the voyage illegal (e). (i) Ayerst v. Jenkins, 16 Eq. 257. (c) Feret v. Hill, 15 C. B. 207, 23 L. J. C. P. 185, where an in- terest in reality had passed ; but qu. if the lessor could not have had the lease set aside in equity. As to chattels, contra per Martin, B. in Pearce v. Brooks, L. R. 1 Ex. 217; hut this seems unsupported: see L. R. 4 Q. B. 311, 315. (d) Cp. Cowan v. Milbourn, L. R. 2 Ex. 230. (e) Wilson v. Rankin, L. R. 1 Q. B. 163 (Ex. Ch.); Dudaeon v. Pembroke, L. R. 9 Q. B. 581, 585, per Quain, J., and authori- ties there referred to. Cp. further, on the general head of agree- ments made with an unlawful purpose, Hanauer v. Doane, 12 Wallace Sup. Ct. U. S.) 342; in Sprott v. U. S. 20 ib. 459, it was held that a buyer of cotton from the Confederate Government, knowing that the purchase-money would be .applied in support of the rebellion, could not be recognized by the U. S. courts as owner of the cotton: diss. Field, J. on the grounds (which seem 100 Myers v. Meinrath, 101 Mass. 366; Merwin v. Huntington, 2 Conn. 209; Spalding?). Muskingum, 12 Ohio, 544; Greenwood v. Curtis, 6 Mass. 358; Levet v. Creditors, 22 La. An. 105; Hall v. Costello, 48 N. H. 176; Kerr v. Bitnie, 25 Ark. 225; Tyler v. Smyth, 18 B. Monv. 793; Jacobs t>. Stokes, 12 Mich. 381; Morris v. Hall, 41 Ala. 510. 376 UNLAWFUL AGREEMENTS. Agreements An agreement may be made void by its connexion connected * w jth an unlawful purpose, though subsequent to the with but , . „ •. subsequent execution of it to an unlaw- To have that effect, however, the connexion must be ful transac- something more than a mere conjunction of circum- tion. stances into which the unlawful transaction enters so merit no? 6 " ^hat without it there would have been no occasion for void unless the agreement. It must amount to a unity of design an integral and purpose such that the agreement is really part and part of un- p arce l f one entire unlawful scheme./ This is well design shown by some cases decided in the Supreme Court of Cases in the United States, and spreading over a considerable Supreme time. They are the more worth special notice as they Court, U. S. are unlike anything in. our own books. In Armstrong ■ ToSr, Xf ' v - Toler (/)"" the p° int > as P ut h y the Court in a slightly simplified form, was this: "A. during a war contrives a plan for importing goods on his own ac- acount from the country of the enemy, and goods are sent to B. by the same vessel. A. at the request of B. becomes surety for the payment of the duties [in fact a commuted payment in lieu of confiscation of the goods [ -^ 326] -jf themselves] which accrue on the goods of B., and is compelled to pay them ; can he maintain an action on the promise of B. to return this money?" The answer is that he can, for the "contract made with the govern- ment for the payment of duties in a substantive inde- pendent contract entirely distinct from the unlawful im- portation." But it would be otherwise if the goods had been imported on a joint adventure by A. and B. In McBlair v. Gibbes (g) an assignment of shares in a company was held good as between the parties though the company had been originally formed for the unlaw- ful purpose -of supporting the Mexicans against the Spanish Government before the independence of Mex- ico was recognized by the United States. In Milten- bergery. Cooke (h) the facts were these. In 1866 a collector of United States revenue in Mississippi took bills in payment when he ought to have taken coin, his reason being that the state of the country made it still right) that it was a question not of contract but of ownership, and that in deciding on title to personal property the de facto government existing at the time and place of the transaction must be regarded. I (/) llWheaton, 258, 269. (g) 17 Howard, 232. (ft) 18 Wallace, 421. 101 See further, Cambioso v. Moffet, 2 Wash. C. C. 98. Story on Conflict Laws, Sec. 248. ULTIMATE PURPOSE UNLAWFUL. 377 unsafe to have much coin in hand. In account with the government he charged himself and was charged with the amount as if paid in coin. Then he sued the acceptors on the bills, and it was held there was no such illegality as to prevent him from recovering. If the mode of payment was a breach of duty as against the Federal government, it was open to the government alone to take any objection to it. We return to our own Courts for a case where on the Fisher v. other hand the close connexion with an illegal design Bridges in was established and the agreement held bad. In Fisher Ex - clj ' v. Bridges (i) the plaintiff sued the defendant on a simple covenant to pay money. The defence was that the covenant was in fact given to secure payment of part of the purchase-money of certain leasehold pro- perty assigned by the plaintiff to the defendant in pur- suance of an unlawful agreement that the land should be resold by lottery contrary to the statute (k). The Court of Queen's Bench held -fa unanimously that [ -^ 327] the covenant was good, as there was nothing wrong in paying the money, even if the unlawful purpose of the original agreement had in fact been executed : and the case was likened to a bond given in consideration of past cohabitation B^at the Court of Exchequer Cham- ber unanimously reversed this judgment, holding that the covenant was in substance part of an illegal trans- action, whether actually given in pursuance of the first agreement or not. " It is clear that the covenant was given for payment of the purchase money. It springs from and is a creature of the illegal agreement; and as the law would not enforce the original contract, so neither will it allow the parties to enforce a security for the purchase-money which by the original bargain was tainted with illegality." They further pointed out that the case of a bond given for past cohabitation was not analogous, inasmuch as past cohabitation is not an illegal consideration but no consideration at all. 102 But " if an agreement had been made to pay a sum of money in consideration of future cohabitation, and after co- habitation, the money being unpaid, a bond had been given to secure that money, that would be the same case (i) .2 E. & B. 118, 22 L. J. Q. B. 270; in Ex. Ch. 3E. &B. 642, 23 L. J. Q. B. 276. (fc) 12 Geo. 2, c. 28, s. 1. 102 If a gift is made in view of future illicit commerce, if it is perfected by delivery, it will not stand. Hill v. Freeman, 73 Ala. 200. 378 UNLAWFUL AGREEMENTS. 5. Security for payments under unlaw- ful agree- ment is r * 328] equally void with the original agreement. as this; and such a bond could not under such circum- stances be enforced." Principle The principle of this judgment has been criticised by of the considerable authority as " vague in itself and danger- judgment. ous ag a precedent " (I). The actual decision, however, ■does not appear to require anything wider than this — that where a claim for the payment of money as on a simple contract would be. bad on the ground of illegal- ity, a subsequent security for the same payment, whether given in pursuance of the original agreement or not, is likewise not enforceable : or, more shortly — 5. Any security for the payment of money under an unlawful agreement is itself void, even if the giving of the security was not part of the original agreement. •fa To this extent at least the principle of Fisher v. Bridges has been repeatedly acted on (m). In Geere v. Mare (m) a policy of assurance was assigned by deed as a further security for the payment of a bill of ex- change. The bill itself was given to secure a payment by way of fraudulent preference to a particular cred- itor, and accepted not by the debtor himself but by a third person. It was held, both on principle and on the authority of Fisher v. Bridges, that the deed could not be enforced. Again in Clay v. Ray (m) two'prom- issory notes were secretly given by a compounding debtor to a creditor for a sum in excess of the amount of the composition. Judgment was obtained in an action on one of these notes. In consideration of pro- ceedings being stayed and the notes given up a third person gave a guaranty to the creditor for the amount : it was held that on this guaranty no action could be maintained. This is a convenient place to state a rule of a more special kind which has already been assumed in the dis- cussion of various instances of illegality, and the neces- sity of which is obvious : namely: — 5a. Bond 5a. If the condition of a bond is unlawful, the whole with unlaw- bond is void (w). 103 ful condition is wholly void. (?) 1 Sm. L. C. 400. (m) Grasme v. Wroughton, 11 Ex. 146, 24 L. J. Ex. 265; Geere v. Mare, 2 H. & C. 339, 33 L. J. Ex. 50; Clay v. Ray, 17 C. B. N. S. 188. (m) Co. Lit. 206 b, Shepp. Touch. 372; where it is said that if 103 Bowker v. Lowell, 49 Me. 429; Greathouse v. Dunlap, 3 McLean, 303; Collins v. Blantern, 2 Wils., 341; Goudy o. Geb- hart, 1 Ohio, 262. EVIDENCE OF UNLAWFUL PURPOSE. 379 Utiles of Evidence and Procedure touching Unlawful Agreements. (5. Extrinsic evidence is always admissible to show 6. Illegality that the object or consideration of an agreement is in may always fact illegal. be shown by ■ •fc This is an elementary rule established by deei- t "^ ^9] sions both at law (o) and in equity (p). Even a doc- ex *" nsic ument which for want of a stamp would not be availa- ble to establish any right is admissible to prove the il- legal nature of the transaction to which it belongs (q). But where the immediate object of the agreement (in the sense explained above) is not unlawful, we have to bear in mind a qualifying rule which has been thus stated: 6a. "When it is sought to avoid an agreement not being in 6a. Where itself unlawful on the ground of its being meant as part of an unlawful unlawful scheme or to carry out an unlawful object, it must be ^tention is s>hown that such was the intention of the parties at the time of mus ? >, e making the agreement " (r). shown to have existed The fact that unlawful means are used in perform- at date of ing an agreement which is prima facie lawful and ca- sut? ement ' t pable of being lawfully performed does not of itself conduct of make the agreement unlawful (s). This or other sub- parties may sequent conduct of the parties in the matter of the be evidence agreement may be evidence, but evidence only, that a original violation of the law was part of their original intention, intention, and whether it was so is a pure question of fact (t). The omission of statutory requisites in carrying on a partnership business is consistent with the contract of partnership itself being lawful; but if it is shown as a fact that there was from the first a secret agreement to carry on the business in an illegal manner, the whole must be taken as one illegal transaction (u). Again, the matter of the condition be only malum prohibitum, the obliga- tion is absolute (a* if the condition were meiely impossible): but this distinction is now clearly not law : see Duvergier v. Fellows, 10 B. & C. 826. (o) Collins v. Blantern, 1 Sm. L. C. 369. (p) Reynell v. Sprye, 1 D. M. G. 660, 672, per Knight Bruce, L. J. (q) Coppock v. Bower, 4 M. & W. 361. (r) Lord Howden v. Simpson, 10 A. & E. 793, 818. (s) A subsequent agreement to vary the performance of a con- tract in a way that would make it unlawful is merely inopera- tive, and leaves the original contract in force: City of Memphis v. Brown, 20 Wallace, 289. U) Fraser v. Hill, 1 McQu. 392. (u) Armstrong v. Armstrong, 3 M. & K. 45, 64, s. c. nom. 380 UNLAWFUL AGREEMENTS. it is no answer to a claim for an account of partnership [ -fa 330] *jf profits that there was some collateral breach of the la,w in the particular transaction in which they were earned (x). Where a duly enrolled deed inter vivos purported to create a rent- charge for charitable pur- poses, but the deed remained in the grantor's keeping, no payment was made during his lifetime, nor was the existence of the deed communicated to the persons in- terested, and the conduct of the parties otherwise show- ed an understanding that the deed should not take ef- fect till after the grantor's death, it was set aside as an evasion of the Mortmain Act (y). Again, an agree- ment is not unlawful merely because something re- mains to be done by one of the parties in order to make the performance of the agreement or of some part of it lawful, such as obtaining a licence from the Crown (z). On the same principle it is not illegal for a highway board to give a licence to a gas company to open a highway within the board's jurisdiction, for it must be taken to mean that they are to do it so as not to create a nuisance (a). In Waugh v. Morris (b) it was agreed by charter- party that a ship then at Trouville should go thence with a ca:go of hay to London, and all cargo was to be brought and taken from the ship alongside. Before the date of the charter-party an Order in Council had been made and published under the Contagious Dis- eases (Animals) Act, 1869, prohibiting the landing of hay from France in this country. The parties did not know of this, and the master learnt it for the first time on arriving in the Thames. ■ In the result the charterer took the cargo from alongside the ship in the river into another vessel and exported it, as he lawfully might, but after considerable delay. The shipowner sued him for demurrage, and he contended that the contract was r jl 331] illegal (though it had in fact been lawfully -^-perform- ed), as the parties had intended it to be performed by Armstrong v. Lewis, in Ex. Cb. 2 Cr. & M. 274, 297. Notwith- standing what is here said as to such inferences of fact being for the jury, the matter seems to have been left at large for the Court in Waugh v. Morris, L. R. 8 Q. B. 202 (see next para- graph). (x) Sharp v. Taylor, 2 Ph. 801. (y) "Way v. East, 2 Drew. 44. ) (z) Sewell v. Royal Exch. Assurance Co., 4 Taunt. 856; Haines v. Busk, 5 ib. 525, cp. Porter's ca. 1 Co. Rep. 25 a, the like as to a condition in a devise. (a) Edgware Highway Board v. Harrow Gas Co., L. R. 10 Q. B. 92. (6) L. R. 8 Q. B. 202. Waugh v. Morris. Material on the question of intention whether the parties know the law. EVIDENCE OF UNLAWFUL PURPOSE. 381 means which at the time of the contract were unlawful, viz. landing the hay in the port of London. The Court however refused to take this view. It was true that the plaintiff contemplated and expected that the hay- would be landed, as that would be the natural course of things. But the landing was no part of the con- tract, and if the plaintiff had had before him the possi- bility of the landing being forbidden, he would proba- bly have expected the defendant not to break the law; as in fact he did not, for no attempt was made to land the goods. '' We quite agree that where a contract is to do a thing which cannot he performed without a violation of the law it is void, whether the parties knew the law or not. But we think that in order to avoid a contract which can he legally performed on the ground that there was an intention to perform it in an illegal man- ner, it is necessary to show that there was the wicked intention to hreak the law ; and if this he so, the knowledge of what the law is becomes of great importance " (c). Butr on the other hand where an agreement is prima Where facie illegal, it lies on the party seeking to enforce it to agreement show that the intention was not illegal. It is not enough P™ 1 "? f« cie to show a mere possibility of the agreement boing law- no^enough fully performed in particular contingent events. " If to show there be on the face of the agreement an illegal inten- mere tion, the burden lies on the party who uses expressions possibility prima facie importing an illegal purpose to show that performance the intention was legal " (d). We now come to the rule, which we will first state As to provisionally in a general form, that money or property recovering paid or delivered under an unlawful agreement cannot ^ ack m °ney be recovered back. 104 or P ro P ert y- ^ This rule (which is subject to exceptions to be pres- [ -^ 332 J ently stated) is the chief part, though not quite the whole, of what is meant by the maxim In pari delicto (e) L. R. 8 Q. B. 207-8. - {d) Holland v. Hall, 1 B. & Aid. 53, per Abbott, J.; Allkins v. Jupe, 2 C. P. D. 375. The same principle is expressed in a different form by Paulus: "Item quod leges fieri prohihent, si perpetuam causam servaturum est, cessat obligatio . . quam- quam etiam si non sit perpetua causa . . . idem dicendum est, quia statim contra mores sit." D. 45. 1. de v. o. 35 § 1. 104 Patterson v. Cox, 25 Ind. 261; Awart v. Building Associa- tion, 34 Md. 435; Benson v. Monroe, 7 Cush. 125; Commercial Bank v. Reed, 11 Ohio, 498. 382 UNLAWFUL AGREEMENTS. Lord Mansfield's explanation of the rule. Plaintiff can't recover where his own un- lawful conduct is t*333] part of his own case. potior est condicio defendentis (e). To some extent it coincides with the more general rule that money volun- tarily paid with full knowledge of all material facts cannot be recovered back. However the principle pro- per to this class of cases is that persons who have en- tered into dealings forbidden by the law must not expect any assistance from the law, save so far as the simple refusal to enforce such an agreement is unavoidably beneficial to the party sued upon it. As it is sometimes expressed, the Court is neutral between the parties. The matter is thus put by Lord Mansfield: "The objection, that a contract isimmoralorillegalas between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the ob- jection is ever allowed, but it is founded in general principles of policy, which the defendant has the advantage of contrary to the real justice as between him and the plaintiff, by accident, if I may say so. The principle of public policy is th;s: ex dolo malo non oritur actio. No Court will lend its aid to a man who found his cause of action upon an immoral or an illegal act. If from the plaintiff 's own stating or otherwise the cause of action ap- pears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assist- ed. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potior est conditio defendentis" (/). The test for the application of the rule is whether the plaintiff can make out his case otherwise than " through the medium and by the act of an illegal transaction to which he was himself a party" (gf).' It is not confined to the case of actual money payments, though that is the most common. 105 "Where the plain- tiff had deposited the half -fa of a bank note with the defendant by way of pledge to secure the repayment of money due for wine and suppers supplied by the de- fendant in a brothel and disorderly house kept by the (e) Cp. D. 50. 17. de reg. iuris, 154, C. 4. 7. decondict. ob tur- pem causam, 2. (/) Holman v. Johnson, 1 Cowp. 341, 343. (g) Taylor v. Chester, L. E. 4 Q. B. 309, 314. 105 Delhomme v. Duson, 28 La. An. f46; Tyler v. Smith. 18 B. Mon. 793; Boutelle v. Melendy, 19 N. H. 196; Merwin v. Hunt- ington, 2 Conn. 209; Ingersoll v. Campbell, 46 Ala. 282. "WHEN PAYMENTS CAN BE RECOVERED. 383 defendant for the purpose of being consumed there in a debauch, and for money lent for similar purposes, it was held that the plaintiff could not recover, as it was necessary to his case to show the true character of the deposit. (This is apparent by the course of the pleadings; the declaration was on a bailment of the half-note to be re-delivered on request, and in detinue. Pleas, in effect, that it was deposited by way of pledge to secure money due. Replication, the immoral char- acter of the debt as above) (h). The Court inclined also to think, but did not decide, that the plaintiff's case must fail on the more general ground that the delivery of the note was an executed contract by which a spe- cial property passed, and that such property must re- main (i). lm The rule is not even confined to causes of action ex contractu. An action in tort cannot be maintained when the cause of action springs from an illegal transaction to which the plaintiff was a party, and that transaction is a necessary part of his case (k). Independently of the special grounds of this rule, a completely executed transfer of property, though origi- nally made upon an unlawful consideration or in pur- suance of an unlawful agreement, is afterwards valid and irrevocable both at law and in equity (I). The rule is not applicable in the following classes of cases, most of which however cannot properly be called exceptions. An agent is not discharged from accounting to his Duty of principal by reason of past unlawful acts or intentions agents and of the principal collateral to the matter of the agency, ^"f^oc^n If A. -^-pays money to B. for the use of C, B. cannot L "K "0*J justify a refusal to pay over to C. by showing that it pr incjl, a ig was paid under an unlawful agreement between A. and notwith- C. (m). Again, if A. and B. make bets at a horse-race standing on a joint account and B. receives the winnings, A. can ? < j llate . I J al recover his share of the money or sue on a bill given to 1 ega * y ' (7») L. E. 4 Q. B. at p. 312. (i) Compare Ex parte Caldecott, 4 Ch. D. 150, p. 306 above; Begbie v. Phosphate Sewage Co., L. E. 10 Q. B. 491, 500, affd. in C. A. 1 Q. B. D. 679. (7c) Fivaz v. Nicholls, 2 C. B. 501, 513; a, peculiar and appar- ently solitary example. (7) Ayerst v. Jenkins, 16 Eq. 275. Cp. M'Callan v. Mortimer (Ex. Ch.) 9M. &W. 636. (m) Tenant v. Elliott, 1 B. & P. 3. los If a person with full knowledge of the facts pays money on a void contract, he cannot recover it back. Woodburn v. Stout, 28 Ind. 77; Babcock v. Fon du Lac, 58 Wis. 230 384 UNLAWFUL AGREEMENTS. him by B. for it: here however there is nothing illegal in any part of the business (n). In like manner the right to an account of partnership profits is not lost by the particular transaction in which they were earned having involved a breach of the law (o). Nor can a trustee of property refuse to account to his cestui que trust on grounds of this kind: a trust was enforced where the persons interested were the members of an unincorporated trading association, though it was doubt- ful whether the association itself it was not ille- gal (p). So, if A. with B.'s consent effects a policy for his own benefit on the life and in the name of B., having himself no insurable interest, the policy and the value of it belong, as between them, to A. (q). If a man entrusts another as his agent with money to be paid for an unlawful purpose, he may recover it at any time before it is actually so paid; or even if the agent does pay it after having been warned not to do so (r) the reason of this, clearly put in one of the earlier cases (s), [■^■335] is that whether -^-the intended payment be lawful or not an authority may jdways be countermanded as be- tween the principal and agent so long as it is not exe- (n) Johnson v. Lansley, 12 C. B. 468. And where B. uses moneys of his own and A.'s in betting, on the terms of dividing winnings in certain proportions, A. can sue B. on a cheque given for his share of winnings: Beeston v. Beeston, 1 Ex. D. 13. Cp. and dist. Higginson v. Simpson, 2 C. P. D. 76, where the trans- action in question was held to be in substance a mere wager. Where an agent is employed to bet in his own name and receive winnings or pay losses, the authority to pay losses becomes irre- vocable on the bet being made; Read v. Anderson (C. A.), 13 Q. B. D. 779 (Bow en and Fry, L. J J. affirming Hawkins, J., diss. Brett, M. R.). The ground taken by the majority is that, under the conditions of betting as commonly practised and known to the parties, the employment of the plaintiff must imply an indemnity against all payments made in the regular course of business. (o) Sharp v. Taylor, 2 Ph. 801. Of course it is not so where the main object of the partnership is unlawful. (p) Sheppardu. Oxenford, 1 K. & J. 491. (q) Worthington v. Curtis, 1 Ch. D. 419; Read v. Anderson, 13 Q. B. D. 779, has been considered in two cases of purchase of bank shares through brokers, where the contract note omitted to specify the numbers of the shares as required by 30 & 31 Vict. c. 29, s. 1. The brokers, if they had not completed the contracts, might have been declared defaulters, and expelled from the Stock Exchange. In Seymour v. Bridge, 14 Q. B. D. 460, Mathew, J., held that the principal could not repudiate; in Perry v. Barnett, 14 Q. B. D. 467, Grove J., held (distinguishing the case from Read v. Anderson and Seymour v. Bridge), that, if he did not know the usage of the Stock Exchange, he could. Ir) Hastelow v. Jackson, 8 B. & C. 221, 226. (s) Taylor v. Lendey, 9 East, 49. RECOVERY FROM AG'EXT OR STAKEHOLDER. 385 cuted (t). It is the same where the agent is author- ized to apply in an unlawful manner any part of the moneys to be received by him on account of the princi- pal; he must account for so much of that part as he has not actually paid over (t). The language of the statute 8 & 9 Vict. c. 109, s. 18, which says that no money can be recovered "which shall have been deposi- ted in the hands of any person to abide the event upon which any wager shall have been made" does not pre- vent either party from repudiating the wager at any time either before or after the event and before the money is actually paid over and recovering his own deposit from the stakeholder (u). Where money has been paid under an unlawful agree- Money ment, but nothing else done in performance of it, the recoverable money may be recovered ba'ck. But in the decision back > where which establishes this exception it is intimated that it ^executed probably would not be allowed if the agreement were actually criminal or immoral (a;). 107 "If money is paid or goods delivered for an illegal purpose, the person who has so paid the money or delivered the goods may recover them back before the illegal purpose is carried out ; but if he waits till the illegal purpose is carried out, or if he seeks to enforce the illegal transaction, in neither case can he maintain an action" (y). And the action cannot be maintained by a party who has not given previous notice that he repudiates the agree- ment and claims his money back (z). In Taylor v. Bowers (y) A. had delivered goods to B. under a ficti- tious assignment for the purpose of defrauding -^ A.'s'[^336] creditors. B. executed a bill of sale of the goods to C, who was privy to the scheme, without A.'s assent. It was held that A. might repudiate the whole transaction and demand the return of the goods from C. In Symes v. Hughes («), a case somewhat of the same kind, the plaintiff had assigned certain leasehold property to a (t) Bone v. Ekless, 5 H. & N. 925, 29 L. J. Ex. 438. (u) Diggle v. Higgs (C. A.), 2 Ex. D. 422; Hampden v. Walsh, 1 Q. B. D. 189, -where former authorities are collected and con- sidered; Trimble v. Hill (J.C.) on a colonial statute in the same terms, 5 App. Ca. 342. (x) Tappenden v. Randall, 2 B. & P. 467. (y) Per Mellish, L. J. Taylor v. Bowers, 1 Q. B. D. 291, 300; cp. Wilson v. Strugnell, 7 Q. B. D. at p. 551, per Stephen, J. (a) Palyart v. Leckie, 6 M. & S. 290. (a) 9 Eq. 475. 107 Rodgers v. Bass, 46 Texas, 505; Gould v. Kendall, 15 Neb. 549; Cromwell v. Stone Quarry Co., 50 Conn. 470; State v. Elting, 29 Kan. 397. 25 PRINCIPLES OF CONTEACT. 386 UNLAWFUL AGREEMENTS. Parties not in pari delicto. Purchase of credi- tor's assent to compos- ition. [*337] trustee with the intention of defeating his creditors ; afterwards under an arrangement with his creditors he sued for the recovery of the property, having under- taken to pay them a composition in case of success. The Court held that, as the illegal purpose had not been executed, he was entitled to a reconveyance. It will be observed however that the plaintiff was in effect suing as a trustee for his creditors, so that the real question was whether the fraud upon the creditors should be continued against the better mind of the debtor himself. The cases above mentioned as to re- covering money from agents or stakeholders are also put partly on this ground, which however does not seem necessary to them (6). In certain cases the parties are said not to be in pari delicto, namely where the unlawful agreement and the payment take place under circumstances practically amounting to coercion. 103 The chief instances of this kind in courts of law have been payments made by a debtor by way of fraudulent preference to purchase a particular creditor's assent to his discharge in bank- ruptcy or to a composition. ,The leading case is now Atkinson v. Denby (c). There the defendant, one of the plaintiffs creditors, refused to accept the composi- tion unless he had something more, and the plaintiff paid him 50Z. before he -^c executed the composition deed. It was held that this money could be recovered back. "It is true," said the Court of Exchequer Chamber, " that both are in delicto, because the act is a fraud upon the other creditors, but it is not par delic- tum, because the one has the power to dictate, the other no alternative but to submit." On the same ground (i) Hastelow v. Jackson, 8 B. & C. 221. Mearing v. Hellings, 14 M. & W. 711, where that case was doubted, decides only this: A man cannot sue a stakeholder for the whole of the sweepstakes he has won in a lottery, and then reply to the objection of ille- gality that if the whole thing is illegal he must at all events re- cover his own stake. Allegans contraria non est audiendus. (e) 6 H. & N. 778, 30 L. J. Ex. 361, in Ex Ch. 7 H. & N. 934, 31 L. J. Ex. 362 : the chief earlier ones are Smith v. Bromley, 2 Doug. 695; Smith it. Cuff, 6 M. & S. 160. 108 The unlawful detention of personal property or the threat to take it unlawfully, even though under the forms of law is re- garded as duress and so far deemed a compulsion that money paid to retain or regain possession may be recovered back as not parted with voluntarily. Sartwell v. Horton, 28 Vt. 370; Har- vey v. Olney, 42111. 336: Dakota?'. Parker, 7 Minn. 267; People v. Vischer, 9 Cal. 365; Latterrade v. Kaiser, 15 La. An. 296; Quinnett v. Washington, 10 Mo. 53; Maxwell v. Griswold, 10 How. (U. S.) 242; Ogden v. Maxwell, 3 Blatch. 319. WHEN PAYMENTS CAN BE RECOVERED. 387 money paid for compounding a penal action contrary to the statute of Elizabeth may be recovered back (d). But where a bill is given by way of fraudulent prefer - erence to purchase a creditor's assent to a composition, and after the composition the debtor chooses to pay the amount of the bill, this is a voluntary payment which cannot be recovered (e). In equity the application of this doctrine has been Like doc- the same in substance, though more varied in its cir- trine of cumstances. The rule followed by courts of equity was equity- thus described by Knight Bruce, L. J. : " Where the parties to a contract against public policy or illegal are not in pari delicto (and they are not always so) and where public policy is considered as advanced by allow- ing either, or at least the more excusable of the two, to sue for relief against the transaction, relief is given to him, as we know from various authorities, of which Osborne v. Williams [see below] is one" (/). 1W On this principle relief was given and an account de- Special creed in Osborne v. Williams (g), where the unlawful grounds of sale of the profits of an office was made by a son to his relief - father after the son had obtained the office in succession to his father and upon his recommendation, so that he was wholly under his father's control in the matter. In Reynell v. Sprye (h) an agreement bad for champerty was set aside at the suit of the party who had been in- duced to enter into it by the other's false representa- tions that it was a -^ usual and proper course among [ -£ 338] men of business to advance costs and manage litigation on the terms of taking all the risk and sharing the property recovered. And in a later case a mortgage to secure a loan of money which in fact was lent upon an immoral consideration was set aside at the suit of the bor- rower on the ground that the interest of others besides parties to the corrupt bargain was involved (i). A wider exception is made, as we have seen above, in the case of agreements of which the consideration is future illicit cohabitation between the parties. The treatment of this kind of agreements is altogether somewhat anomalous (d) Williams v. Hedley, 8 East, 378. (e) Wilson v. Ray, 10 A. & E. 82. (/) Reynell v. Sprye, 1 D. M. G. 660, 679. (g) 18 Ves. 379. (h) 1 D. M. G. 660, 679. (t) W. v. B. 32 Beav. 574. 109 In equity contracts are set aside for force exciting appre- hensions short of the duress of the common law. Central Bank v. Copeland, 18 Md. 305; Davis v. Fox. 59 Mo. 125; Brown v. Peck, 2 Wis. 261. 388 UNLAWFUL AGREEMENTS. Statement of the rule as qualified. [*339] Conflict of laws in space. Lex loci contractus prevails : unless excluded by prohibitory- municipal and ill- defined, and may be considered open to review by a Court of Appeal should occasion arise. Apart from this particular question, there seems to be no reason (at all events since the Judicature Acts) why the ana- logy of the cases in equity where agreements have been set aside should not apply to the legal right of recover- ing back money paid. If this be correct, the rule and its qualifications will be to this effect: 7. Money paid or property delivered under an unlaw- ful agreement cannot be recovered back, nor the agree- ment set aside at the suit of either party — unless nothing has been done in the execution of the unlawful purpose beyond the payment or delivery itself (and the agreement is not positively criminal or im- moral?);. * or unless the agreement was made under such circum- stances as between the parties that if otherwise lawful it "would be voidable at the option of the party seeking relief (fc); or, in the case of an action to set aside the agree- ment, unless in the judgment of the Court the interests of third persons require that it should be set aside. •fc 8. Where a difference of local laws is in question, the lawfulness of a contract is to be determined by the law governing the substance of the contract (that is, according to the English authorities, the law of the place uo where the contract is made, subject to the con- sideration of matters showing a different intention, for example, if the contract is wholly to be performed in some other place (I). Exception 1. — An agreement entered into by a citi- zen in violation of a prohibitory law of his own state cannot in any case be enforced in any court of that state. (k) This lorm of expression is not positively warranted by the authorities, but is submitted as fairly representing the result. {I) Westlake, 234, 237; per Erie, C. J., Branley v. S. E. R. Co., 12 C. B. N. S. at p. 72: "As a general rule, the lex loci contractus governs in deciding whether there was illegality in the contract;" Lloyd v. Guibert, Ex. Ch., L. R., 1 Q. B. 115, 122, in a very care- ful judgment prepared by "Willes, J. ; Jacobs v. Credit Lyonnais, C. A., 12 Q. B. D. 589,600. 110 In the absence of anything indicating the contrary, the place of the making of a contract is presumptively that of its perform- ance, by the law whereof it is to be interpreted and its effect i defined. Benners v. Clemens, 8 P. F. Sm. 24; Hvatt v. Bank of Ky., 8 Bush, 193; Cook v. Moffatt, 5 How. (TJ. S.) 295; Milwau- kee R. W. v. Smith, 74 111. 197; Oregon Trust Co. v. Rathbun, 5 Saw. 32; U. S. Bank ?>, Donnelly, 8 Peters, 361. CONFLICT OF LAWS. 389 Exception 2. — An agreement contrary to common law of the principles of justice or morality, or to the interests f forum: or the state, cannot in any case be enforced. agreement is What we here have to do with is in truth a frag- contrary to ment of a much larger subject, namely, the considera- common jus- tion of the local law governing obligations in gen- tice or eral (m). £££*<* The main proposition is well established, and it would . „ to + he be idle to attempt in this place any abridgement or re- first excep- statement of what is said upon it by writers on so-called tion. Private International Law (n). The first exception is a simple one. The municipal laws of a particular state, especially laws of a prohibitory kind, are as a rule di- rected only to things done within its jurisdiction. But a particular law may positively forbid the subjects of the state to undertake -^ some particular class of trans- [ "^ 340] actions in any part of the world: and where such a law exists, the courts of that state must give effect to it. A foreigner cannot sue in an English court on a contract made with a British subject, and itself lawful at the place where it was made, if it is such that British sub- jects are forbidden by Act of Parliament to make it anywhere (o). m It may be doubted whether such a contract would be recognized even by the courts of the state where it was made, unless the prohibition were of so hostile or restrictive a character as between the two states (e. g. if the rulers of a people skilled in a par- ticular industry should forbid them to exercise or teach that industry abroad ) as not to fall within the ordinary principles of comity. The authorities already cited (p. 250 above) as to marriages within the prohibited (m) For the treatment of it in this connexion, see Savigny, Syst. 8. 269-278 (§ 374 C); Story, Conflict of Laws, U 243 sqq. 258 sqq.; Wharton, \\ 482-497. Mr. Westlake (Private Intern. Law. ed. 1880, \\ 203, 204) states the rules thus: Where a con- tract contemplated the violation of English law, it cannot be en- forced here, notwithstanding that it may have been valid by its proper law. Where a contract conflicts with what are deemed in England to be essential public or moral interests, it cannot be enforced here, notwithstanding that it may have been valid by its proper law. (n) The name, though current, is both clumsy and absurd. The rules of municipal law concerning the recognition and appli- cation of foreign laws have a certain cosmopolitan character, but are not international : they are ius gentium, but not inter genten. (o) Santos v. Illidge, in Ex. Ch. 8 C. B. N. S. at p. 874, 29 L. J. C. P. at p. 350, per Blackburn, J. 111 As to the place of performance, see Pritchard ;•. Norton, 106 U. S. 124; Duncan v. U. S., 7 Peters, 435, and Allen v. Bank, 22 Wend. 215; Gaylor «. Johnson, 5 McClean, 448; Blodgett v. Dur- gin, 32 Vt. 361; Bowen v. Newell, 3 Kernan, 290, 390 UNLAWFUL AGREEMENTS. degrees contracted abroad by British subjects may also be usefully consulted as illustrating this topic. As to the The second exception is by no means free from diffi- second excep- culties touching its real meaning and extent (o). There tion. j s no doubt that an agreement will not necessarily, though it will generally, be enforced if lawful accord- ing to its proper local law. 112 The reasons for which the court may nevertheless refuse to enforce it have been variously expressed by judges and text- writers, and some- times in very wide language. Transactions It may be taken for granted that the courts of a civil- contrary to ized state cannot give effect to rights alleged to be valid common ^y some ] ooa i i aw D11 t arising from a transaction plainly principals of J ,, '. ,. & . ., ±1/ civilized repugnant to the vus gentium in its proper sense — the nations, or principles of law and morality common to civilized founded on nations. In other words, a local law cannot be recog- r j!? "oil 1 n i ze( i, though otherwise it would be the proper law to l "*C "* i J look to, if it is in -fa derogation of all civilized laws.(p). system of This indeed seems a fundamental assumption in the family administration of justice, in whatever forum and by relations not whatever procedure. Likewise it is clear that no court recognized. can ^ )j 0un( j t Q enforce rights arising under a system of law so different from its own, and so unlike any- thing it is accustomed to, that not only its administra- tive means, but the legal conceptions which are the foundation of its procedure, and its legal habit of mind (q), so to speak, are wholly unfitted to deal with them. 113 For this reason the English Divorce Court (o) "Whether an action can be supported in England on a contract which is void by the law of England, but valid by the law "of the country where the matter is transacted, is a great ques- tion": per Wilmot, J., Robinson v. Bland, 2 Burr. 1083. (p) It has been laid down that contracts to bribe or corruptly influence officers of a foreign government — even if not prohibited by the law of that government— will not be enforced in the courts of the United States: Oscanyan v. Arms Co., 103 XJ. S. 261, 277; and this not in the interest of the foreign govenment, but for the sake of morality and the dignity of law at home. (q) In German one might speak without any strangeness of the Rechtsbeumsstsein of the Court. 112 The interpretation and effect of a contract, are determined by the law of the State or country wherein at the time of its making the parties intended it to be performed, as evidenced by its terms, by its nature, by the surroundings or anything else per- missible to be shown. Sherman v. Gusset, 4 Gilman, 521; God- din v. Shipley, 7 B. Mont. 575; Dorsey v. Hardesty, 9 Mo. 157; Hollomon v. Id., 12 La. An. 607; Brown v. R. R., 2Norris (Pa.), 316; Bell v. Bruen, 1 How. (U. S.), 169. 113 Evans v. Kittrell, 33 Ala. 449; Collins Iron Co. v. Burkman, 10 Mich. 283. CONFLICT OS LAWS. 391 cannot entertain a suit founded on a Mormon marriage. Apart from the question whether such marriages would be regarded by our courts as immoral iure gentium (r), the matrimonial law of England is wholly inapplicable to polygamy, and the attempt to apply it would lead to manifest absurdities (s). Practically these difficulties can hardly arise except as to rights derived from family relations. One can hardly imagine them in the proper region of contracts. Again, there are sundry judicial observations to be But opposi- found which 'go to the further extent of saying that no tion court will enforce anything contrary to the particular »*«»";*>«' views of justice morality or policy whereon its own fawn'ot municipal jurisprudence is founded. And this doc- enough, trine is supported by the general acceptance of text- writers, which in this department of law must needs count for more than in any other, -^ owing to its com- [ -^ 342] parative poverty in decisive authorities. But a test Contract for question is to be found in the treatment of rights aris- sale of slaves ing out of slavery by the courts of a free country: and | nforced in for England at least the decision of the Exchequer image Chamber in Santos v. Illidge (t) has given such an an- swer to it as makes the prevailing opinion of the books untenable. Slavery is as repugnant to the principles of English law as anything can well be which is so far admitted by any other civilized system that any serious question of the conflict of laws can arise upon it. There is no doubt that neither the status of slavery nor any personal right of the master or duty of the slave inci- dent thereto can exist in England (u), or within the protection of English law (x). But it long remained uncertain how an English court would deal with a con- tract concerning slaves which was lawful in the coun- try where it was made and to be performed. Passing (r) A conclusion which would not imply any offence to the Queen's Hindu and Mahometan subjects, or be inconsistent with our administration of native law in British India. The imme- morial institutions of Eastern races are obviously- on a different footing altogether from the fantastic and retrograde devices oi a degenerate fraction in the West. (s) Hyde v. Hyde & Woodmansee, L. R. 1 P. & D. 130. (t) 8 C. B. N. S. 861, 29 L. J. C. P. 348, revg. s. c. in court below, 6 C. B. N. S. 841, 28 L. J. C. P. 317. Very strangely there is no mention of the case either in "Wharton's Conflict of Laws or in the last edition of Story. (u) Sommersett's ca. 20 St. T. 1. ■ (x) Viz. on board an English ship of war on the high seas or in hostile occupation of territorial waters, Forbes v. Cochrane, 2 B. & C. 448. 392 UNLAWFUL AGREEMENTS. over earlier and indecisive authorities (y), we find Lord Mansfield assuming that a contract for the sale of a slave may be good here (z). On the other hand, Best, J. thought no action "founded upon a right arising out of slavery " -would be maintainable in the munici- pal courts of this country (a). But in Santos v. II- lidge (b) a Brazilian sued an English firm trading in Brazil for the non-delivery of slaves under a contract for the sale of them in that country, which was valid by Brazilian law. The only question discussed was whether the sale was or was not under the circumstan- ces made illegal by the operation of the statutes against slave trading: and in the result the majority of the Ex- [jf-343] chequer, Chamber held that it was not. -fa It was not even contended that at common law the court must re- gard a contract for the sale of slaves as so repugnant to English principles of justice that, wherever made, it could not be enforced in England. Nor can it be sug- gested that the point was overlooked, for it appears to have been marked for argument. Perhaps it is a mat- ter for regret that it was not insisted upon, and an ex- press decision obtained upon it: but as it is, it now seems impossible to say that purely municipal views of right and wrong can prevail against the recognition of a foreign law. Moreover, apart from this decision, the cases in which the dicta relied upon for the wider doc- trine have occurred have in fact been almost always de- termined on considerations of local law, and in particu- lar of the law of the place where the contract was to be performed. Earlier cases Thus in Robinson v. Bland (c) the plaintiff sued (1) considered upon a bill of exchange drawn upon England to secure with refer- money won at play in France : (2) for money won at general doc- P^ av * n France : (8) for money lent for play at the same trine. time and place. As to the bill, it was held to be an English bill ; for the contract' was to be performed by payment in England, and therefore to be governed by English law. 114 For the money won, it could not have (y) They are collected in Hargrave's argument in Sommersett's (z) 20 St. T. 79. (a) Forbes v. Cochrane, 2 B. & C. at p. 468. To same effect, Story, \ 259, in spite of American authority being adverse. lb) See note (t), ante. (c) 2 Burr. 1077. 114 A bond executed in New York to indemnify one for becom- ing surety in a Louisiana suit, takes its effect from the Louisiana law. Pritchard v. Norton, 106 U. S. 124. CONFLICT OF LAWS. 393 been recovered in a French Court of justice (d), and so could not in any case be sued for here ; but as to the money lent, the loan was lawful in France and therefore recoverable here. Wilrnot, J. said that an action could be maintained in some countries by a courtesan for the price of her prostitution, but certainly would not be allowed in England, though the cause of action arose in one of those countries. Probably no such local law now exists. But if it did, and if it were attempted to enforce it in our courts, we could appeal, not -^ to our [ -fa 344] own municipal notions of morality, but to the Roman law as expressing the common and continuous under- standing of civilized nations. Such a bargain is im- moral hire gentium. In Quarrier v. Colston (e) it was held that money lent by one English subject to another for gaming in a foreign country where such gaming was not unlawful might be recovered in England. This, as well as the foregoing case, is not inconsistent with the rule that the law of the place of performance is to be followed. It must be taken, no doubt, that the parties contemplated payment in England. Then, what says the law of Eng- land ? Money lent for an unlawful use cannot be recov- ered. Then, was this money lent for an unlawful use? That must be determined by the law existing at the time and place at which the money was to be used in play. That law not being shown to prohibit such a use of it, there was no unlawful purpose in the loan, and there was a good cause of action, not merely by the local law (which in fact was not before the court) (/), but by the law of England. These cases do show, however, that the Eng- lish law against gaming is not considered to be founded on such high and general principles of morality that it is to override all foreign laws, or that an English court is to presume gaming to be unlawful by a foreign law (g). " 5 (d) Nor, tinder the circumstances, in the marshal's court of honour which then existed ; hut it seems the court would in any case have declined to take notice of an extraordinary and extra-legal jurisdiction of that sort. (e) 1 Ph. 147. (/) The local law might conceivably, without making gaming unlawful, reduce debts for money lent at play to the rank of natural obligations or debts of honour not enforceable by legal process : if the view in the text be correct, the existence of such a law would make no difference in the English court. (g) Contra Savigny, who thinks laws relating to usury and 115 The tribunals of every nation will where no domestic con- sideration forbids, give effect to the rights which litigants have acquired under the laws of other nations. Zipcey v. Thompson, 394 UNLAWFUL AGREEMENTS. In Hope v. Hope (h) an agreement made between a husband and wife, British subjects domiciled in France, provided for two things which made the agreement void [ -^ 345] -^ in an English court : the collusive conduct of a di- vorce suit in England, and the abandonment by the- husband of the custody of his children. It is worth noting that at the time nf the suit the husband was res- ident in England, and it does not seem clear that he had not recovered an English domicil. Knight Bruce, L. J. put his judgment partly on the ground that an important part at least of the provisions of the docu- ment was to be carried into effect in England. Turner, L. J. did say in general terms that a contract must be consistent with the laws and policy of the country where it is sought to be enforced, and he appears to have sought the provision as to the custody of the chil- dren was one that an English court must absolutely re- fuse to enforce, whether to be performed in England or not, and whether by a domiciled British subject or not. But this is neither required by the decision nor recon- cileable with Santos v. Illidge. In Grell v. Levy (i) an agreement was made in France between an English attorney and a French, subject that the attorney should recover a debt for the client in England and keep half of it. Our rules against cham- perty are not known to the French law; but here the agreement was to be performed in England by an officer of an English court (k). Perhaps, indeed, the English law governing the relations and mutual rights of solic- itor and client may be regarded as a law of English procedure; and in that character, of cour.se, private ar- rangements cannot acquire any greater power to vary it by being made abroad (T). As to agree- As for agreements contrary to the public interests of ments the state in whose courts they are sued upon, it is against pub- obvious that the courts must refuse to enforce them lie interest of , state. gaming must lie reckoned strictly compulsory (von streng posi- tiver, zwingender Natur) — i. e. must be applied without regard to local law by every court within their allegiance, but are not to be regarded by any court outside it Syst. 8. 276. (h) 8 D. M. a. 731; per Knight Brnce, L. J. at p. 740; per Turner, L. J. at p. 743 (i) 16 C. B. N. S. 73. Ik) Per Erie, C. J. at p. 79. (I) See Judgment of Williams, J. 1 Gray, 243; Diamond Match Co. i>. Powers, 51 Mich. 145; Stev- ens v. Brown, 20 W. Va. 450; Lewis v-. Woodfolk, 2 Baxter, 25; Donovan v. Pitcher, 53 Ala. 411. CONFLICT OP LAWS. 395 without considering any foreign law. The like rule applies to the class of agreements in aid of hostilities against a friendly state of which we have already spoken. In practice, + however, an agreement of this [ •£ 346] kind is more likely than not to be unlawful everywhere. Thus an agreement made in New York to raise a loan for insurgents in Cuba would not be lawful in England; but it would also not be lawful in New York, and for the same reason. It might possibly happen on the other hand that the United States should recognize the Cuban insurgents while they were not recognized by England; and in that case the courts of New York would regard the contract as lawful, but ours would not. It should be borne in mind that the foregoing discus- sion has nothing to do with the formal validity of con- tracts, which is governed by other rules (expressed in a general way by the maxim locus regit actum) ; and also that all rules as to the conflict of laws depend on prac- tical assumptions as to the conduct to be expected at the hands of civilized legislatures and tribunals. It is in theory perfectly competent to the sovereign power in any particular state to impose any restrictions, how- ever, capricious and absurd, on the action of its own municipal courts; and even to municipal courts, in the absence of any paramount directions, to pay as much or as little regard as they please to any foreign opinion or authority. 116 9. Where the performance of a contract lawful in its Conflict of inception is made unlawful by any subsequent event, laws in time, the contract is thereby dissolved (m). 117 9 Where Explanation. — Where the performance is subse- P erformance quently forbidden by a foreign law, it is deemed to have i awiu ] con ." become not unlawful but impossible (n). tract d'is- This rule does not call for any discussion. It is ad- solved. mitted as certain in Atkinson v. Ritchie (o), and is (m) Atkinson v. Ritchie, 10 East, 530; Esposito v. Bowden, p. 279, supra. (n) Barker v. Hodgson, 3 M. & S. 267; Jacobs v. Credit Lyonnais, C. A. 12 Q. B. D. 589. (o) See note (m), ante. 116 Fitzsimmons v. Guanahani, 16 S. C. 192; Williams v. Carr, 80 N. C. 294; Carnahan v. W. U. Tel. Co., 89 Ind. 626; Davis v. Bronson, 6 Iowa, 410. 117 But what has been done when the contract was valid still remains so. Bradford v. Jenkins, 41 Miss. 328; Bennett ». Woolfolk, 15 Ga. 213. 396 UNLAWFUL AGREEMENTS. [ -fc 347] sufficiently -^ illustrated by the modern case of Esposito v. Bowden (o), of which some account has already been given. It applies to negative as well as to affirmative promises. "It would be absurd to suppose then an action should lie against parties for doing that which the legislature has said they shall be obliged to do"(p). To the qualification we shall have to return in the fol- lowing chapter on Impossibility. 10. Other- wise law at date of agreements governs. Qu. when agreement made in ignorance of its illegality, and perform- ance after- wards becomes law- ful. [*348] 10. Otherwise the validity of a contract is generally determined by the law as it existed at the date of the contract.' 18 This is a wider rule than those we have already stated, as it applies to the form as well as to the substance of the contract, and not only to the question of legality but to the incidents of the contract generally (q). It is needless to seek authority to show that an originally lawful contract cannot become in itself unlawful by a subsequent change in the law (r). It does not seem certain, however, that the converse proposition would always hold good. Perhaps the parties might be en- titled to the benefit of a subsequent change in the law if their actual intention in making the contract was not unlawful. The question may be put as follows on an imaginary case, which the facts of Waugh v. Morris (s) show to be quite within the bounds of possibility. A. and B. make an agreement which by reason of a state of things not known to them at the time is not lawful. That state of things ceases to exist before it comes to the knowledge of the parties and before the agreement is performed, but A. refuses to perform the agreement on the ground that it was unlawful when made. Is this agreement a contract on which B. can sue A. ? Justice and reason seem to call -fa for an affirmative answer, and the analogy of Waugh v. Morris (t), where the court looked to the actual knowledge and intention of the parties at the time of the contract, is also in his favour. 119 Apart (o) See note (m), p. 346. (p) Wynn v. Shropshire Union Kys. & Canal Co., 5 Ex. 420, 440. (q) Sav. Svst. \ 392 (8. 435). (r) SieBoyceu. Tabb, 18 Wallace (Sup. Ct. XJ. S.) 546; supra, p. 271. (sj L. E. 8 Q. B. 202; supra, p. 330. (t) L. R. 8 Q. B. 202. 118 Bishop on Contracts, Sec. 1390; Hollomon v. Hollomon, 12 La. An. 607. 119 Quirk r. Thomas, 6 Mich. 76; Michael v. Bacon, 49 Mo. 474; Distilled Spirits, 11 Wallace, 356; Suit v. Woodhall, 113 Mass. 391; Wright v. Crabbs, 78Ind. 487. CONFLICT OP LAWS IN TIME. 397 from this a contract which provides for something known Contract to the parties to be not lawful at the time being done conditional in the event, and only in the event, of its being made ancebe° rm " lawful, is free from objection and valid as a conditional cominglaw contract (u) : unless, indeed, the thing were of such a ful. kind that its becoming lawful could not be properly or seriously contemplated (x). It may be useful to collect here in a separate form General re- the results of the foregoing discussion, so far as they suits as to show in what circumstances and to what extent the kn °wledge of knowledge of the parties is material on the question of partles - illegality. a. Immediate object of agreement unlawful. Knowl- edge of either or both parties is immaterial (y); uo ex- cept, perhaps, where the agreement is made in good faith and in ignorance of a state of things making it un- lawful : and in this case it is submitted for the reasons above given that the agreement becomes valid if that state of things ceases to exist in time for the agreement to be lawfully performed according to the original in- tention. /9. A. makes an agreement with B. the execution of which would involve an unlawful act on B.'s part (e. g. a breach of B.'s contract with C. ) If A. does not know this, there is a good contract, and A. can sue B. for a breach of it, though B. cannot be compelled to perform it or may be restrained (z) from-^- performing it. We may say if we like that B. [ -fa 349] is deemed to warrant that he can lawfully perform his contract. 121 The contract is voidable at A's option on the ground of fraud, if B. has falsely stated or actively concealed the facts, but not otherwise (a). (u) Taylor v. Chichester & Midhurst By. Co., L. E. 4 H. L. 628, 640, 645; cp. Mayor of Norwich v. Norfolk Ey. Co., 4 E. & B. 397, 24 L. J. Q. B. 105, supra, p. 235. (x) Cp. D. 18. 1. de cont. empt. 34 $ 2 (Paulus). Liberum homi- nem scientes emere non possomus ; sed nee talis emptio aut stipu- latio admittenda est: cum servus erit, quamvis dixerimus, futuras res emi posse; nee enim fas est eiusinodi casus exspectare. (y) A strong illustration of this will be found in Wilkinson v. Loudonsack, 3 M. & S. 117. (a) Jones v. North, 19 Eq. 426. (a) Beachy v. Brown, E. B. & E. 796, 26 L. J. Q. B. 105; but 120 Saratoga County Bank v. King, 44 N. Y. 87; 1 Bishop on Criminal Law, Sec. 294, 300, 309. 121 Ybarra v. Lorenzena, 30 Ala. 591 ; Shaw v. Carlile, 9 Heisk. 594; Langford v. Monteith, 1 Idaho (N. S.), 612. 398 UNLAWFUL AGREEMENTS. If A. doeB know it, the agreement is void. y. A. makes an agreement with B. who intends by means of the agreement or of something to be obtained or done under it to effect an unlawful or immoral pur- pose. If A. does not know of this purpose, there is a contract voidable at his option when he discovers it. 122 If he does know of it, the agreement is void. I. 0. A. The provisions of the Indian Contract Act on the sub- on unlawful jects comprised in this chapter will be found in the Ap- agreementa. pe ndix (6). one can never be quite safe in drawing any general conclusion from a decision on the contract to marry. And cp. D. 18. 1 de cont. empt. 34 \ 3. (6) Note I. 122 When one of the parties to the contract is in ignorance of the facts which make the contract illegal, he may enforce it against the other who knows them. Wright v. Crabbs, 78 Ind. 487. IMPOSSIBLE AGREEMENTS. 399 * CHAPTER VII. [ * 350] IMPOSSIBLE AGREEMENTS. An agreement may be impossible of performance at the Performance time when it is made, and this in various ways. of agreement It may be impossible in itself; that is, the agreement may b 5 hl . itself may involve a contradiction, as if it contains prom- j^eif SS1 e m ises inconsistent with one another or with the date of (logically or the agreement. Or the thing contracted for may be con- physically), trary to the course of nature, " quod natura fieri non con- cedit " (a). As if a man should undertake to make a river run up hill; to make two spheres of the same substance, but one twice the size of the other, of which the greater should fall twice as fast as the smaller when they were both dropped from a height; or to construct a perpetual mo- tion (&). 1 It may be impossible by law, as being inconsistent By law (in- with some legal principal or institution. 2 consistent As in the cases already considered in Chap. V. of at- wi . tn . le . gal tempts to enable a stranger to a contract to sue upon it &jf) Clp 6 ' by agreement of the parties; or as if a man should give a bond to secure a simple contract with a collateral agree- ment that the simple contract debt should not be merged (c), or should covenant to create a new manor. Again, it, is the general rule of law that a man may •fa contract for the sale of a specific thing which is not [ ^ 351] his own at the time. But if the thing be already the buyer's own, or cannot be the subject of private owner- ship at all (as the site of a public building, the Crown (a) T>. 45. 1. de v. o. 35 pr. • (b) Of these particular impossibilities the second was supposed to he an elementary fact before Galileo made the experiment; the last continues to be now and then attempted by persons who know mechanical handicraft without mechanical principles: we choose the examples as all the more instructive on that account, (c) See Owen v. Homan, 3 Mac. & G. 378, 407-411. 1 "Walker v. Tucker, 70 111. 527; Gilmer v. Id., 42 Ala. 9; Met. on Contracts, 211. 2 Beebee v. Johnson, 19 "Wend. 500. 400 IMPOSSIBLE AGREEMENTS. In fact (in- consistent with par- ticular state of facts ex- isting at the time). Or may be- come im- possible in law or in fact. Accord- ing to modern authorities the rules are rules of construction. General statement. [*852] jewels, a ship in the Eoyal Navy) (d), the agreement is impossible in law. It may be impossible in fact by reason of the exist- ence of a particular state of things which makes the performance of the particular contract impossible. 3 As where the contract is to go to a certain island and there load a full cargo of guano, but there is not enough guano there to make a cargo (e): or a lessee covenants to dig not less than 1,000 tons of a certain kind of clay on the land demised in every year of the term, but there is no such clay on the land (/). Moreover the performance of a contract which was possible in its inception may become impossible in either the second or third of these ways. The authori- ties are in a somewhat fluctuating condition, and per- haps not wholly consistent. But the strong and con- current tendency of the later cases is to avoid laying down absolute rules, and to give effect as far as possi- ble to the real intention of the parties — in other words, to treat the subject as one to be governed by rules of construction rather than by rules of law. And by this means they have done much to clear up and simplify the matter for practical purposes, though a formally accurate statement of the law may be difficult to extract from them. Before proceeding to any details we may at once give an outline of the results. 1. An agreement is void if the performance of it is either impossible in itself or impossible by law. 4 When the performance of an agreement becomes im- possible by law, the agreement becomes void. -^ 2. An agreement is not void merely by reason of the performance being impossible in fact, nor does it be- (d) In Roman Law ' ' quorum commercium non sit, ut publica quse non in pecunia populi sed in publico usu habeantur, ut est Campus Martius." D. 18. 1. de cont. empt. 6 pr. (e) Hills v. Sughrue, 15 M. & W. 253. (/) Clifford v. Watts, L. E. 5 C. P. 577. 3 Where the party by his own contract creates a duty or charge upon himself he is bound to make it good, if he may, notwith- standing any accident by inevitable necessity, because he might have provided against it by his contract. Davis v. Smith, 15 Mo. 467; School District v. Dauchy, 25 Conn. 530; Jamison v. McDaniel, 25 Miss. 83; Bunn v. Prather, 21 111. 217. 4 The authorities seem to agree, that when the law creates a contract the person is excused if the thing becomes impossible in an absolute sense. A person is not required to contend with the Almighty, or in his private capacity to overcome the public enemy. The State v. Clark, 73 N. C. 255; Norcross v. Id., 53 Me. 163; Mosley v. Baker, 2 Sneed (Term.), 362. ABSOLUTE IMPOSSIBILITY. 401 come void by the performance becoming impossible in fact without the default of either party, unless accord- ing to the true intention of the parties the agreement was conditional on the performance of it being or con- tinuing possible in fact. Such an intention is presumed where the perform- ance of the contract depends on the existence of a spe- cific thing, or on the life or health of a party who un- dertakes personal services by the contract. 3. If the performance of any promise becomes im- possible in fact by the default of the promisee, the promisor is discharged, and the promisee is liable to him under the contract for any loss thereby resulting to him. If it becomes impossible by the default of the prom- isor, the promisor is liable under the contract for the non performance. 1. On the first and simplest rule — that an agreement i A°ree- im possible in itself is void — there is little or no direct men? im- authority, for the plain reason that such agreements do possible in not occur in practice; but it is always assumed to be so. ^ s f { * s void: Perhaps even this rule is not accurately stated as an this is 611 absolute one. There is reason to think the ground of probably a it is this, that the impossible nature of the promise * ule of shows that there was no real intention of contracting con . stl ' uctl0n : and therefore no real agreement. It would thus be re- bnity P which duced to a rule of construction or presumption only, the parties as though a strong one. Brett, J. said in Clifford v. reasonable Watts (g) : " I think it is not competent to a defendant m ™^f^ to say that there is no binding contract, merely because ^™' H he has engaged to do something which is phvsically excluding impossible. I think it will be found in all the cases animus where that has been said, that the thing stipulated for contmhendi - was, according to the state of knowledge of -^- the day, [ *fa 353] so absurd that the parties cannot be supposed to have so contracted." The same view is also distinctly given in the Digest (h). It seems to follow then that the question is not whether a thing is absolutely impossi- ble (a question not always without difficulty), but (g) L. E. 5 C. P. p. 588. (A) D. 44. 7. de obi. et act. 31. Non solum stipulationes . . sed etiam ceteri quoque contractus . . impossibili condicione in- terposita aeque nullius monienti sunt, quia in ea re, quae ex du- orum plurium ve consensu agitur, omnium voluntas spectetur; quorum procul dubio in huiusmodi actu talis cogitatio est, ut nihil agi existiment apposita ea condicione quam sciant esse im- possibilem. 26 PRINCIPLES OF CONTRACT. 402 IMPOSSIBLE AGKEEMENTS. A thing is not impos- sible because not known to be possible: [*354] at least if it be reasonably conceivable that it should turn out possible . whether.it ij such that reasonable men in the position of the parties must treat it as impossible (*). On the other hand a thing is not to be deemed im- possible merely because it has never yet been done, or is not known to be possible. 5 " Cases may be conceived," says Willes, J. in the case last cited, " in which a man may undertake to do that which turns out to be impos- sible, and yet he may still be bound by his agreement. I am not prepared to say that there may not be cases in which a man may have contracted to do something which in the present state of scientific knowledge may be utterly impossible, and yet he may have so con- tracted as to warrant the possibility of its performance by means of some new discovery, or be liable in dam- ages for the non-performance, and cannot set up by way of defence that the thing was impossible." Indeed many things have become possible which were long supposed to be impossible; and this not only in the well-known instances of mechanical invention and the applications of scientific discovery to the arts of life, but in the regions of pure science and mathematics (fc). ■fa Fifty years ago it seemed impossible that we should ever have direct evidence of the physical constitution of the sun and fixed stars: we now have much. It is submitted, nevertheless, that the .doctrine of the foregoing dicta must be limited to cases where it may be within the serious contemplation of a reason- able man at the time that the thing may somehow be done. For example, a man agrees to make a flying machine and warrants that it shall fly. This may well be a good contract. 6 It is true that no one has yet suc- ceeded in making such a machine. But the difficulties, (i) In Thornborow v. Whitacre, Ld. Raym. 1164, a promise to deliver two grains of rye on a certain Monday, and four, eight, sixteen, &c. , on alternate Mondays following for a year, was said by Holt to be " only impossible with respect to the defendant's ability," though it was urged for the defendant that "all the rye in the world was not so much." No judgment was given, the case being settled. The point that the parties could not have been in earnest ; was not made. (k) Prof. Sylvester and M. Peaucellier respectively have re- solved certain algebraical and geometrical problems long thought insoluble. One form of the problem of link-motion investigated by Peaucellier was even thought to have been proved to be insoluble. 5 Duncan v. Gibson, 45 Mo. 352; The Harriman, 9 "Wallace, 161; Walker v. Tucker, 70 111. 527; McDonald v. Gardiner, 56 Wis. 35. 6 Paddock v. Robinson, 63 111. 99; Haviland v. Halstead, 34 N. Y. 643. KEPUGNANCY. 403 great as they are, consist in details; it is a question of weight and strength of materials, disposition of parts, and application of power; and these obstacles differ not in kind from such as have already been overcome in other quarters by the progress of mechanical invention and workmanship. Suppose, again, that a man agrees to make a flying machine and fly to the moon with it. Now this involves an undertaking either to live in interplanetary space, which is absolutely impossible, or to make a habitable atmosphere between the earth and the moon, which is likewise impossible, though not pre- cisely in the same manner. It is surely needless to put the question whether any court could regard such an agreement as valid, even though the parties were so ignorant as to believe it possible. This last qualification — that the parties must be pre- sumed to have the ordinary knowledge of reasonable men, even if the whole thing is treated as a question of intention — is obviously required by convenience, and is contained by implication in the Indian Contract Act (s. ,56, illust. a), which says that an agreement to dis- cover treasure by magic is void. In some regions at least of British India the parties might really believe in the efficacy of magic for the purpose. If a man may bind himself to do something which is "Practical only not known to be impossible, much more can he i m P°s- bind himself to do something which is known to be s lblllt y> possible, -^- however expensive and troublesome. 7 For r J. 355] some purposes practical impossibility may be treated cos t r diffi- as equivalent to absolute impossibility: a ship is said culty, not to be totally lost when it is in this sense practically im- material, possible, though not physically impossible, to repair her (I). But this does not apply to the matter now in hand (in). The other conceivable cases of absolute impossibility Logical may be very briefly dismissed. Inconsistent or, in the impossi- usual technical phrase, repugnant promises contained ' ! 5 ' ± e ~ . ,, . , r i r ,. * , £ j pugnant in the same instrument cannot of course be enforced: promises ; (Z) Moss v. Smith. 9 C. B. 94, 103. Mr. Leake's citation of this dictum (Digest, 682) appears to me irrelevant. (m) See per Mellor, J. L. E. 6 Q. B. 123, per Hannen, J. ill. 127. These dicta seem to go even beyond what is said in the text, but are probably limited in their true effect to what is here called impossibility in fact. 7 The failure of a usual and advantageous means of perform- ance which the parties contemplated will not bea defence unless it is specified in the contract. Engster v. West, 35 La. An. 119; Hand v. Baynes, 4 Wharton, 204; Harmony v. Bingham, 1 Dur. 210. 404 IMPOSSIBLE AGBEEMENTS. repugnancy between date and con- tents of in- strument. In most cases only apparent, does not avoid the contract. r*356] Promisor not excused by relative impossi- bility, i. e. not having the means of performance. this however is rather a case of failure of that cer- tainly which, as we saw in the first chapter, is one of the primary conditions for the formation of a contract. There may also be a repugnancy as to date, as if a man promises to do a thing on a day already past. Practi- cally, however, such a repugnancy can hardly be more than apparent. Either it is a mere clerical or Verbal error, in which case the Court may correct it by the context (n), or it arises from the terms of the agree- ment being fixed before and with reference to a certain time but not reduced into writing and executed as a written contract till afterwards. In such a case it must be determined on the circumstances and construc- tion of the contract whether the stipulation as to time is to be treated as having ceased to be part of the con- tract (in other words, as having been left in the state- ment of the contract by a common mistake), or as still capable of giving an independent right of action. At all events it cannot be treated as a condition precedent 8 so as to prevent the rest of the contract from being enforced (o). •ft Leaving, however, this rather barren discussion, we come to a qualification, or rather explanation of more practical importance, which follows a fortiori from the principle laid down by Willes, J. Difficulty, inconvenience, or impracticability arising out of cir- cumstances merely relative to the promisor will not ex- cuse him. "Impossibility may consist either in the nature of the action in itself; 9 or in the particular cir- cumstances of the promisor. 10 It is only the first, or objective kind of impossibility that is recognized as such by law. The second,*or subjective kind, cannot (n) See Fitch v. Jones, 5 E. & B. 238, 24 L. J. Q. B. 293, where a note payable two months after date, and made in January, 1855, was dated by mistake 1854, but across it was written "due the 4th March, 1855." The Court held that this sufficiently cor- rected the mistake, and might be taken as a direction to read 5 for 4. (o) Hall v. Cazenove, 4 East, 477, where the Court agreed to this extent, but differed on the other question. 8 As to conditions precedent, see Mizell v. Burnett, 4 Jones, 249; Oakley v. Morton, 1 Kearnan, 25; Baltimore R. R. v.. Polly, 14 Grat. 447; Boyd v. Sififkin, 2 Camp. 326; Bruce v. Snow, 20 N. H. 484. 9 Ward v. Vance, 12 Norris (Pa.), 499. 10 A person's sickness creates no impossibility when the act is not one of personal service, for he may perform it by proxy. Or, if he dies his personal representatives must perform or respond in damages. Siler v. Gray, 86 N. C. 566; Hawkins v. Ball, 18 B. Monr. 816; Smith v. Coal Co., 83 111. 498. IMPOSSIBILITY OP LAW. 405 be relied on by the promisor for any purpose, and does not release him from the ordinary consequences of a wilful non- performance of his contract. Od this last point the most obvious example is that of the debtor who owes a sum- certain, but has neither the money nor credit." " There is plenty of money in the world, and it is a matter wholly personal to the debtor if he can- not get the money he has bound himself to pay" (p). Therefore a man is not excused who chooses to make One may himself answerable for the acts or conduct of third warrant acts persons, though beyond his control ; or even, it seems, oi third for a contingent event in itself possible and ordinary natural' ° r but beyond the control of man. It has been said that event in a covenant that it shall rain to-morrow might be itself pos- good (q), and that " if a man is bound to another in sible. 20Z. on condition quod pluvia debet pluere eras there si pluvia non phut eras the obligor shall forfeit the bond, though there was no default on his part, for he knew not that it would not rajn. In like manner if a man is bound to me on condition that the Pope shall be here at Westminster to-morrow, then if the Pope comes not there is no default on the defendant's part, and yet he has forfeited the obligation" (/■). " Generally if a con- dition is to be -jc performed by a stranger and he re- [ ~k 357 J fuses, the bond is forfeit, for the obligor took upon himself that the stranger should do it " (s). " If the condition be that the obligor shall ride with I. S. to Dover such a day, and I. S. does not go thither that day, in this case it seems the condition is broken, and that he must procure I. S. to go thither and ride with him at his peril" (t). Where the condition of a bond wasto give such a release as by the Court should be thought meet it was held to be the obligor's duty to procure the judge to devise and direct it (u). If a lessee agrees absolutely to assign his lease, the lease containing a covenant not to assign without licence, the contract is binding and he must procure the lessor's consent (x). But on the sale of shares in a company, on the Stock Exchange at all (p) Savigny, Obi. 1. 384. (?) Bv Maule, J. Canham v. Barry. 15 C. B. at p. 619; 24 L. J. C. P." at p. 106. Per Cur. Bailey v. De Crespigny, L. E. 4 Q. B. at p. 185. But qu. would not such a contract be a mere wager in almost any conceivable circumstances? (r) Per Brian, C. J., Mich. 22 Ed. 4.26. The whole discussion there is curious, and well worth perusal in the book at large. (s) Ro. Ab. 1. 452, L. pi. 6. (t) Shepp. Touchst. 392. («) Lamb's ca. 5 Co. Rep. 23 b. \x) Lloyd v. Crispe, 5 Taunt. 249; cp. Canhan v. Barry, 15 C. B. 597. 406 IMPOSSIBLE AGREEMENTS. Agreement impossible in law is void. When per - formance [*358] becomes impossible- by law, promisor is excused. Bailey v. De Cres- Pigny- events, the vendor is not bound to procure the directors' assent, though it may be required to complete the trans- fer (y), and it seems at least doubtful whether he is so bound in any case (s). Where an agreement is impossible by law there is no doubt that it is void: for example, a promise by a ser- vant to discharge a debt due to his master is void, and therefore no consideration for a reciprocal promise (a); though, by the rule last stated, a promise to procure his master to discharge it would (in the absence of any fraudulent intention against the master) be good and binding. And when the performance of a contract be- comes wholly or in part impossible by law, the contract is to that extent discharged. A good instance of this is Baily v. De Crespigny (b). There a lessor covenanted with the lessee that -fa neither he nor his heirs nor his assigns would allow any building (with certain small ex- ceptions) on a piece of land of the lessor's fronting the demised premises. Afterwards a railway company pur- chased this piece of land under, the compulsory powers of an Act of Parliament, and built a station upon it. The lessee sued the lessor upon his covenant; but the Court held that he was discharged by the subsequent Act of Parliament, which put it out of his power to perform it. And this was agreeable to the true intention, for the railway company coming in under compulsory powers, " whom he [the covenantor] could not bind by anystip ulation, as he could an assignee chosen by himself," was " a new kind of assign, such as was not in the contem- plation of the parties when the contract was entered into." Nor was it material that the company was only empowered by Parliament, not required, to build a sta- tion at that particular place (c). If a subsequent Act of Parliament making the performance of a contract im- possible were a private Act obtained by the contracting party himself, he might perhaps remain bound by his contract as if he had made the performance impossible by his own act (of which afterwards) : but where the Act is a public one, its effect in discharging the contract cannot («/) Stray v. Kussell, Q. B. and Ex. Ch. 1 E. & E. 888, 916, 28 L. J. Q. B. 279, 29 L. J. Q. B. 115. (2) Lindley, 1. 703, 712, not allowing Wilkinson v. Lloyd, 7 Q. B. 27, to be now law. (a) Harvey v. Gibbons, 2 Lev. 161. It is called an illegal con- sideration, but such verbal confusions are constant in the early reports. (6) L. R. 4 Q. B. 180. (c) L. E. 4 Q. B. 186-7. IMPOSSIBILITY OF LAW. 407 be altered by showing that it was passed at the instance of the party originally bound (d). The case of a man agreeing to buy that which is Buying already his own is a peculiar one. Here the perform- one's own ance is impossible in law; and the agreement may be P r0 P ert y- regarded as void not only for impossibility but for want of consideration. But this class of cases is by its nature strictly limited. No man will knowingly pay for what belongs to him already. If on the other hand the parties are in doubt or at variance as to what their rights are, any settlement which they come to in good faith, what- ever its -^-forrn, has the character of a compromise. ["A" 359] There remain only the cases in which the parties act under a common mistake as to their respective rights. The presence of the mistaken assumption is the central point on which the whole transaction turns, and is de- cisive in fixing its true nature. Hence it is the most conspicuous element in practice, and these cases are treated as belonging not to the head of Impossibility but to that of Mistake. Under that head we recur to them ±n the nest chapter. It is hardly needful to add that a contract for the sale of something which the seller has not at the time is perfectly good if the thing is capable of private ownership. The effect of the contract is that he binds himself to acquire a lawful title to it by the time appointed for completing the contract. The general principles above considered are very well Exposition of brought together in the Digest, in a passage from a same prin- work of Venuleius on Stipulations." " Illud inspicien- ciples in dum est, an qui centum dari promisit confestim tenea- Koman aw - tur, an vero cesset obligatio donee pecuniam conferre posset. Quid ergo si neque domi habit neque inveniat creditorem ? Sed haec recedunt ab impedimento naturali et respiciunt ad facultatem dandi (e). . . . Et general- iter causa difficultatis ad incommodum promissoris, non ad impedimentum stipulatoris pertinet [i. e. inconveni- ence short of impossibility is no answer]. ... Si ab eo stipulatus sim, qui efficere non possit, cum alii possibile sit, iure factam obligationem Sabinus scribit." He goes on to say that a legal impossibility, e. g. the sale of a public building, is equivalent to a natural im- possibility. . . . "Nee ad rem pertinet quod ius mutari potest et id quod nunc impossibile est postea (d) Brown ?>. Mayor of London, 9 0. B. N. S. 726, 30 L. J. C. P. 225, in Ex. Ch. 13 C. B. N. S. 828, 31 L. J. C. P. 280. (e) For the explanation of c not very clear illustration which follows here, and is omitted in our text, see Sav. Obi. 1. 385. 408 IMPOSSIBLE AGREEMENTS. possibile fieri; non enim secundum futuri temporis ius [ -fa 360] sed secundum praesentis aestimari -^f debet stipu- late " (/): (as if it should be contended that a cove- nant to create a new manor is not a covenant for a legal impossibility, because peradventure the statute of Quia emptores may be repealed. ) All this is in exact accor- dance with English law. 2. Perform- 2. We now come to the cases where the performance mice impossi- of an agreement is not impossible in its own nature, hie m fact: j-,ut i m p OSS ible in fact by reason of the particular cir- where con- cumstances. It is a rule admitted by all the authorities, tract is abso- and supported by positive decisions, that impossibility lute. of this kind is in itself no excuse for the failure to per- form an unconditional (g) contract, whether it exists at the date of the contract, or arises from events which happen afterwards (h)." Thus an absolute contract to load a full cargo of guano at a certain island was not discharged by there not being enough guano there to make a cargo (i) : and where a charter-party required a ship to be loaded with usual dispatch, it was held to be no answer to an action for delay in loading that a frost had stopped the navigation of the canal by which the cargo would have been brought to the ship in the ordi- A fortiori nary course (fc). Still less will unexpected difficulty or where only inconvenience short of impossibility serve as an excuse. inconvenient Where insured premises were damaged by fire and or mipracti- .-i r. l- l ■ cable ™ e insura:nce company, having an option to pay in (/) D. 45 1. de v. o. 137, §§4-6. (y the act of the law. (m) L. R. 6 Q. B. 115, 124. (n) L. E. 9 Ex. 163, in Ex. Ch. 10 Ex. 112, affd. in H. E. 1 App. Ca. 120. 410 IMPOSSIBLE AGREEMENTS. itself and to be paid for under it, tbe plaintiff might not have recovered for it as on a quantum meruit. In short, it is admitted law that generally where there is a positive contract to do a thing not in itself unlawful, the contractor must perform it, or pay damages for not doing it, although in c'onsequence of unforeseen acci- dents the performance of his contract has become un- expectedly burdensome or even impossible (o). 12 Prohibition by foreign law = im- possibility in fact. [*363] Obligation of tenant to pay rent though ' demised promises Where the performance of a contract becomes im- practicable by reason of its being forbidden by foreign law, it is deemed to have become impossible not in law but in fact. In Barker v. Hodgson (p) intercourse with the port to which a ship was chartered was prohibited on account of an epidemic prevailing there, so that the freighter was prevented from furnishing a cargor but it was held that this did not dissolve his obligation. So if the goods are confiscated at a foreign port that is no answer to an action against the shipowner for not delivering them (q). But where the effect of a foreign law is to prevent both parties from performing their respective parts of the contract, both are excused (V). 13 •fc Certain cases, of which Paradine v. Jane (s) is the leading one, are often referred to upon this head. The effect of them is that the accidental destruction of a leasehold building, or the tenant's occupation being otherwise interrupted by inevitable accident, does not determine or suspend the obligation to pay rent either (o) Taylor v. Caldwell, 3 E. & S. 826, 833, 32 L. J. Q. B. 164, 166. This rule does not extend, however, beyond express con- tracts. An undertaking to be answerable for delay caused by vis maior cannot be made part of an implied contract: Ford v. Cotesworth (Ex. Ch.) L. R. 5 Q. B. 544, (p) 3 M. & S. 267, cp. Jacobs it. Credit Lyonnais, C. A., 12 Q. B. D. 589, where the exportation of the cargo contracted for was forbidden by local law. (}) Spence v. Chadwick, 10 Q. B. 517. (r) Cunningham v. Dunn (C. A.), 3 C. P. D. 443. (s) Aleyn, 26. 12 When there can be a substantial performance of what in the exact terms of the contract is' impossible, it will be required. Williams v. Vandeibilt, 28 N. Y. 217; White v. Mann, 26 Me. 361; Chase ».. Barrett, 4 Paige, 148. 13 If goods are destroyed by the act of God, while in the hands of a common carrier and he is using due diligence and care to pre- serve and carry them safely he is excused. Lewis v. Ludwick, 6 Colded, 368; Houston E. W. v. Ham, 44 Texas, 628; Southern Express v. Womack, 1 Heisk. 256; Strohn v. Detroit E. R., 23 Wis. 126; Wallaces. Sanders, 42 Ga. 486. SUPERVENING ACCIDENT. 411 at law or in equity (t). u In these cases, however, the accidentally performance of the contract does not really become im- destroyed. possible. There is obviously nothing impossible in the po ° S sibiiity relation of landlord and tenant continuing with its reg- here ■ ular incidents. 15 We must be careful not to lose sight of the two distinct characters of a lease as a contract (or assemblage of contracts) and as a conveyance. There is a common misfortune depriving both parties to some extent of the benefit of their respective inter- ests in the property; not of the benefit of the contract, for so far as it is a matter of contract, neither party is in a legal sense disabled from performing any material part of it. The expense of getting housed elsewhere, or the loss of profits from a business carried on upon the premises, may render it difficult or even impracti- cable for the tenant to go on paying rent. But it does not render the payment of his rent impossible in any other sense than it renders the payment of any other debt to any other creditor impossible (w). It is a per- sonal and relative "causa difficultatis ;" which, as we have seen, is irrelevant in a legal point of view. The lessee's special covenants, if such there be, to paint the wails at stated times or the like, do become impossible of performance by the destruction of their subject-mat- ter, and to that extent, no doubt, are discharged or sus- pended as being within the rule in Taylor v. Caldwell, which we shall immediately consider. Only to this limited extent is there any precise resemblance to the wider class of cases where the performance of a con- tract becomes in fact impossible. The -^- true analogy [ -fa 364] is in the nature of the question which the rule of law bnt a similar has to decide: namely, whether the contract is in sub- question stance and effect as well as in terms unconditional and the'contract without any implied exception of inevitable accident. \ s really un- We shall see that this is always the real question. The conditional, answer being here determined by Paradine v. Jane (x), it was held in the later cases (y) (about which difficul- ties are sometimes felt, but it is submitted without solid reason) that it is not affected by the landlord have pro- tected himself by an insurance, which is a purely col- (t) Leeds v. Cheetham, 1 Sim. 146; Lofft v. Dennis, 1 E. & E. 474, 28 L. J. Q. B. 168. (u) See per Lord Blackburn, 2 App. Ca. 770. (x) Aleyn, 26. (y) Leeds v. Cheetham, 1 Sim. 146; Lofft v. Dennis, 1 E. & E. 474, 28 L. J. Q. B. 168. 14 Izon v. Gorton, 5 Bing. (N. C.) 501. 15 Dowdy v. McLellan, 52 Ga. 408; Wilkinson v. Cook, 44 Miss. 367; Calloway v. Hamby, 65 N. C. 631. 412 IMPOSSIBLE AGREEMENTS. lateral contract of indemnity. There might indeed very well be a further collateral agreement between the landlord and tenant that the landlord should apply the insurance moneys to rebuilding the premises. Such an agreement would be good without any new consid- eration on the tenant's part beyond his acceptance of the lease, and probably without being put into writ- ing (z). On the other hand it is often a term of the lease that the tenant shall keep the premises insured and that in case of fire the insurance moneys shall be applied in reinstatement. There, if the landlord has insured separately without the knowledge of the tenant, so that the damage is apportioned between the two policies, and the amount received by the tenant is diminished, the tenant is entitled to the benefit of the other policy also (a). Contra the The rule or presumption might, of course, be the civil law. other way, as it is by the civil law, where it is an in- cident of the contract to pay rent that it is suspended by inevitable accident destroying or making useless the thing demised. The particular event on which Para- dine v. Jane was decided, eviction, by alien enemies (&), [ jf 365] ia expressly dealt -fa with in this manner. The law of Scotland follows the civil law (c), and the Irish Land- lord and Tenant Act of I860 gives the tenant the op- tion of surrendering on a dwelling-house " or other building constituting the substantial manner of the de- mise " being by fire or other inevitable accident de- stroyed or made incapable of beneficial occupation (d). Either way the rule is subject to any special agreement of the parties, and it is but a question which, in the absence of such agreement, is the better distribution of the hardship that must to some extent fall upon both. It is hard for a tenant, according to the English rule, to pay an occupation rent for a burnt out plot of ground. It is hard for a landlord, according to the (a) Parol collateral agreements have been held good in Ers- kine v. Adeane, 8 Ch. 756; Morgan v. Griffith, L. E. 6 Ex. 70; Angell v. Duke, L. R. 10 Q. B. 174. (a^Reynard v. Arnold, 10 Ch. 386. (6) Si incursus hostium fiat, D. 19. 2. locati conducti, 15 I 2; or even reasonable fear of it: Si quis timoris causa emigrasset . . . respondit, si causa fuisset cur periculum timeret, quamvis periculum vere non fuisset. tamen non debere mercedem; sed si causa timoris iusta non fuisset, nihilorainus debere, D. eod. tit. 27. I 1. (c) Per Lord Campbell. Lofft v. Dennis, supra ; Bell, Princi- ples. ? 1208. (d) 23 & 24 Vict. c. 154, s. 40. ACCIDENTS NOT CONTEMPLATED BY CONTRACT. 413 Roman and Scottish rule, to lose the rent as well as (it may be) a material part of the value of the reversion. Either party may be insured; but that, as we have said, is not of itself relevant as between them. So far the general rule. The nature of the exceptions Exceptions is thus set forth by the judgment of the Court in Bailey in certain v. De Crespigny: — cases of subsequent " There can be no doubt that a man may by an absolute con- bilitv tract bind himself to perform things which subsequently become impossible or to pay damages for the non-performance, and this construction is to be put upon an unqualified undertaking, -where the event -which causes the impossibility was or might have been anticipated and guarded against in the contract, or where the impossibility arises from the act or default of the promisor. "But where the event is of such a character that it cannot reasonably be supposed to have been in the contemplation of the contracting partie3 when the contract was made, they will not be held bound by general words which, though large enough to in- clude, were not used with reference to the possibility of the par- ticular contingency which afterwards happens. It is on this principle that the act of God is in some cases said to excuse the breach of a contract. This is in fact an inaccurate -^- expression, [ "&" 366] because, where it is an answer to a complaint of an alleged breach of contract that the thing done or left undone was so by the act of God, what is meant is that it was not within the con- tract " (e). This (as well as the following context, which is too Events not long to quote) well shows the modern tendency, to which within the we have already called attention, to reduce all the rules contempla- on this subject to rules of construction. By the modern contract understanding of the law we are not bound to seek for a general definition of " the act of God " or vis maior (f), but only to ascertain what kind of events were within the contemplation of Ihe parties, including in the term event an existing but unascertained state of facts. This is yet more apparent if one attempts to frame any defini- tion of the term " act of God." It does not include every inevitable accident; contrary winds, for example, are not within the meaning of the term in a charter- party. Nor is the reason far to seek ; the risk of con- trary winds, though inevitable, is one of the ordinary risks which the parties must be understood to have be- fore them and to take upon them in making such a (e) L. R. 4 Q. B. 185. (/) Both these terms are classcial: "Vis maior, quani Graeci deov fiiav appellant. " Gaius in D. 19. Slocati. 25 \ 6. 414 IMPOSSIBLE AGREEMENTS. contract: therefore it is said thai the event must be not merely accidental, but overwhelming (g) But on the other hand the term is not confined to unusual events: death; 16 for example, is an " act of God " as regards contracts of personal service, because in the particular case it is not calculable. Yet the fact that this very event is not only certain to happen, but on a sufficiently large average is calculable, is the foundation of the whole system of life annuities and life insurance. Again, death is inevitable sooner or later but may be largely prevented as to particular causes and occasions. The effects of tempest or of earthquake may be really in- evitable by any precaution whatever. But fire is not inevitable in that sense. Precautions may be taken [ *fa 367] both-^- against its breaking out and for extinguishing it when it does break out. "We cannot arrive, then, at any more distinct conception than this: An event which, as between the parties and for the purpose of the matter in hand, cannot be definitely foreseen or controlled. In other words, we are thrown back upon the nature and construction of the particular contract (h). We may now proceed to the specific classes of excep- tional cases. (a) Where a - Where the performance of the contract depends on the prrform- the existence of a specific thing. The law was settled ance depends on this head by Taylor v. Caldwell (i), where the de- existence of f en dauts agreed to let the plaintiffs have the use (i) of a specific the Surrey Gardens and Music-hall on certain days for thing. the purpose of giving entertainments. Before the first Taylor v. f those days the music-hall was destroyed by fire so that the entertainments could not be given, and with- out the fault of either party. The Court held that the defendants were excused, and laid down the following principle : " Where from the nature of the contract it appears that the parties must from the beginning have known that it could not be fulfilled unless, when the time for the fulfilment of the contract arrived, some par- (g) Per Martin, B. Oakley v. Portsmouth & Eyde Steam Packet Co. 11 Ex. 618. (h) As to what is such "an act of God " as will make an ex- ception to a duty imposed not specially by contract but by the general law, see Nicholas v. Marsland, 2 Ex. D. 1, Nugent v. Smith, 1 C. P. D. 423, 444, both in C. A. (i) 3 B. & S. 826, 32 L. J. Q. B. 164. There were words suffi- cient tor an actual demise, but the Court held that the manifest general intention prevailed over them. 16 Harrington v. Fall River Iron Works, 119 Mass. 82; Knight v. Bean, 22 Me. 531; Siler v. Gray, 86 N. C. 566. Caldwell. DESTRUCTION OF SUBJECT-MATTER. 4] 5 ticular specified thing continued to exist, so that when entering into the contract they must have contemplated such continued existence as the foundation of what was to be done ; there in the absence of any express or im- Implied ' plied (k) warranty that the tbing shall exist, the con- condition tract is not to be considered a positive contract, but tha( i furtner subject to the implied condition that the parties shall ^excS** be excused in case, before breach, performance becomes the thing impossible -^ from the perishing of the thing without [ -^ 368] default of the contractor." " And the following author- perishes ities and analogies were relied upon : — without the The civil law, which implies such an exception in Sglwu* ° wn all cases of obligation de certo corpore (I). The cases of rights or duties created by a contract of a strictly personal nature which, though the contract is not expressly qualified, are by English law not trans- missible to executors. 1S The admitted rule of English law that where the property in specific chattels to be delivered at a future day has passed by bargain and sale, and the chattels perish meanwhile without the vendor's default, he is ex- cused from performing his contract to deliver ; and the similar rule as to loans of chattels and bailments. In all these cases, though the promise is in words positive, the exception is allowed " because from the nature of the contract it is apparent that the parties contracted on the basis of the continued existence of the partic- ular person or chattel." . The same principle was followed in Appleby v. Mey- Appleby v. ers (m). There the plaintiffs agreed with the defend- Meyers. ant to erect an engine and other machinery on his prem- ises, at certain prices for the separate parts of the work, no time being fixed for payment. While the works were proceeding, and before any part was complete, the premises, together with the uncompleted works and (1c) That is, understood in fact between the parties : the whole scope of the passage being that it is not to be implied by law. (I) D. 45. 1. de v. o. 23, 33. Cp. also D. 46. 3. de solut. 107. Verborum obligatio aut naturaliter resolvitur aut civiliter; nat- uraliter, velutt solutione, aut cum res in stipulationem deducta sine culpa promissoris in rebus humanis esse desiit. Pothier, Obi. . Hammond, 11 Peters, 63; Miles v. Ste- vens, 3 Barr, 21 ; Daniel v. Mitchell, 1 Story, 172; Scruggs v. Driver, 21 Ala. 274; Hitchcock v. Giddings, 4 Price, 135. EFFECT OF EXPRESS EXCEPTIONS. 419 When a lessee under a mining lease covenants in Covenants to unqualified terms to pay a fixed minimum rent, he is work m ? nes > bound to pay it both at law (s) and in equity (t), ^i^,™^ though the mine may turn out to be not worth working amount, or even unworkable. But it is otherwise with a cove- nant to work the mine or to raise a minimum amount. In the case in equity last referred to (t), where a coal mine was found to be so interrupted by faults as to be not worth working, it was said that the lessor might be restrained from suing on the covenant to work it on the terms of the lessee paying royalty on the estimated quantity of coal which remained unworked. A similar question was fully dealt with in Clifford v. Watts (it). Cliffords. The demise was of all the mines, veins, &c, of clay on Watts, certain land. There was no covenant by the lessee to pay any minimum rent, but there was a covenant to dig in every year of the term not less than 1000 tons nor more than '2000 tons of pipe or potter's clay. An action was brought by the lessor for breach oE this covenant. Plea (a;), to the effect that there was not at the time of the demise or since so much as 1000 tons of such clay under the lands, that the performance of the -fa cove- [ -^ 373] nant had always been impossible, and that at the date of the demise the defendant did not know and had no reasonable means of knowing the impossibility. The Court held that upon the natural construction of the deed the contract was that the lessee should work out whatever clay there might be under the land, and the covenant sued on was only a subsidiary provision fixing the rate at which it should be worked. The tenant could not be presumed to warrant that clay should be found: and " the result of a decision in favour of the plaintiff would be to give him a fixed minimum rent when he had not covenanted for it" (y). n (s) Marquis oi" Bute v. Thompson, 13 M. & W. 487. (t) Hidgway c. Snead, Kay, 627. («) L. K. 5 C. P. 577. (x) It was pleaded as an equitable plea, but the Court treated the defence as a legal one. » (y) Per Montague Smith, J. at p. 587. Cp. and dist. Jervis v. Tomkinson, 1 H. & N. 195, 26 L. J. Ex. 41, where the covenant was not only to get 2000 tons of rock salt per annum, but to pay 6d. a ton for every ton short, and the lessees knew of the state of the mine when they executed the lease. As to the relation of Clifford v. Watts to Hills v. Sughrue (pp. 351, 360, above), it is perhaps enough to say that the Court of CommOn Pleasas consti- 21 There are some curious questions connected with conditions rendered impossible by matter subsequent. Bain v. Lyle, 18 P. F. Sm. 60; Irion v. Hume, 50 Miss. 419; Holland v. Bouldin, 4 T. B. Monr. 147; Merrill v. Emery, 10 Pick. 507. 420 IMPOSSIBLE AGREEMENTS. Analogous effect of express exceptions in com- mercial con- tracts. [•374] In certain kinds of contracts, notably chaTter- parties, it is usual to provide by express exceptions for the kind of events we have been considering. It is not within our province to enter upon the questions of construc- tion which arise in this manner, and which form im- portant special topics of commercial law. However, when the exception of a certain class of risks is once established, either as being implied by law from the na- ture of the transaction, or by the special agreement of the parties, the treatment is much the same in princi- ple: and a few recent decisions may be mentioned as throwing light on the general law. Where the princi- pal part of the contract becomes impossible of perform- ance by an excepted risk, the parties are also discharg- ed from performing any other part which remains pos- sible, but is useless without that which has become im- possible (z). It is a general principle that a -Jc con- tract is not to be treated as having become impossible of performance if by any reasonable construction it is still capable in substance of being performed (a): but on the other hand special exceptions are not to be laid hold of to keep it in force contrary to the real inten- tion Thus where the contract is to be performed " with all possible despatch," saving certain impedi- ments, the party for whose benefit the saving is intro- duced cannot force the other to accept performance after a delay unreasonable in itself, though due to an excepted cause, if the manifest general intention of the parties is that the contract shall be performed within a reasonable time, if at all. 22 The saving clause will protect him from liability to an action for the delay, but that is all: the other party cannot treat the con- tract as broken for the purpose of recovering damages, but he is not prevented from treating it as dissolved (b). /?. Where the contract is for personal services of tuted in 1870 would scarcely have arrived, on the facts of Hills v. Sughrue, at the same result as the Court of Exchequer in 1847: but there is no actual conflict, as the question in every case is of the true intention of the contract taken as a whole, and the con- tracts in these cases are of quite different kinds. (z) Geipel v. Smith, L. R. 7 Q. B. 404, 411. (a) The Tentonia, L. R. 4 P. C. 171, 182; Cp. Jones v. Holm, L. R. 2 Ex. 335. (b) Jackson v. Union Marine Insurance Co., in Ex. Ch. L. R. 10 C. P. 125, 144 sqq. 22 Interrupting the doing of the thing, and rendering it im- possible, will excuse performance. People v. Ins. Co., 91 N. Y. 174; Leopold v. Salkey, 89 111. 412; Ohio R. R. v. Yohe, 51 Ind. 181; Walker i>. Fitts, 24 Pick. 191. PERSONAL SER^CES. 421 which the performance depends on the life or health (P) Where of the party promising them. " All contracts for per- performance sonal services which can be performed only during the ute^or health lifetime of the party contracting are subject to the im of a person, plied condition that he shall be alive to perform them ; Implied and should he die, his executor is not liable to an ac- condition tion for the breach of contract occasioned by his persou'shall death" (c). 23 Conversely, if the master dies during remain alive the service, the servant is thereby discharged, and can- and well not treat the contract as in force against the master's e n° u g n for personal representatives (d). The passage now cited o^h^con- 63 goes on to suggest the extension of this principle to tract, the case of the party becoming, without his own default, incapable of fulfilling the contract in his lifetime: "A contract by an author to write a book, or by a painter to ■fa paint a picture within a reasonable time, would in my [ fa 375 J judgment be deemed subject to the condition that if the author became insane, or the painter paralytic, and so incapable of performing the contract by the act of God, he would not be liable personally in damages any more than his executors would be if he had been prevented by death." This view, which obviously commends itself in point of reason and convenience, is strongly confirmed by Taylor v. Caldwell (supra, p. 367), where indeed it was recognized as correct, and it has since been estab- lished by direct decisions. In Boast v. Firth (e) a mas- Boast v. ter sued the father of his apprentice on his covenant in Firth, the apprenticeship deed that the apprentice should serve him, the plaintiff, during all the term. The defence was that the apprentice was prevented from so doing by per- manent illness arising after the making of the indenture. The Court held that " it must be taken to have been in the contemplation of the parties when they entered into this covenant that the prevention of performance by the act of God should be an excuse for non-performance" (/) , and that the defence was a good one. 24 In Robinson v. (e) Pollock. C. B. in Hall v. Wright, E. B. & E. at p. 793, 29 L. J. Q. B. at p. 51. (rf) Farrow v. Wilson, L. R. 4 C. P. 744. (e) L. E. 4C. P. 3. (/) Per Montague Smith, J. at p. 7. , 23 If at the place where the labor is to be done, a contagious and fatal disease prevails, rendering it imprudent to work and therefore impossible to procure suitable workmen, performance will be excused. Dewey v. Alpena School Dist., 43 Mich. 480, and if the work was partly executed before the disease came, the party may recover pay for it on a quantum meruit. Lakeman v. Pollard, 43 Me. 463; Sickels v. United States, 1 Ct. of CI. 214. 24 A contract of apprenticeship is terminated by the death of either of the parties. Hayes v. Willio, 4 Daly, 259; Martin v. Hunt, 1 Allen, 418; Davenport v. Gentry, 9 B. Monr. 427. 422 IMPOSSIBLE AGREEMENTS Robinson v. Davison (g) the defendant's wife, an eminent pianoforte Davison. player, was engaged to play at a concert. When the time came she was disabled by illness. The giver of the entertainment sued for the loss he had incurred by putting off the concert, and had a verdict for a small sum under a direction to the effect that the performer's illness was an excuse, but that she was bound to give the plaintiff notice of it within a reasonable time. 25 The sum recovered represented the excess of the plaintiff's expenses about giving notice of the postponement to the public and to persons who had taken tickets beyond what he would have had to pay if notice had been sent him by telegraph instead of by letter. The Cour^of Exche- quer upheld the direction on, the main point. The rea- son was thus shortly put by Bramwell, B. " This is a [ "At 376] ^r contract to perform a service which no deputy could perform, and which in case of death could not be per- formed by the executors of the deceased : and I am of opinion that by virtue of the terms of the original bar- gain incapacity either of body or mind in the performer, without default on his or her part, is an excuse for non- The contract performance" (ft). 26 The same judge also observed, in becomes effect, that the contract becomes, not voidable at the op- o°lv'void- ^ on °^ ^ e P ar ty disabled from performance but wholly able at void. Here the player could not have insisted " on per- option of forming her engagement, however ineffectually that party dis- might have been," when she was really unfit to perform a, \L it. The other party's right to rescind has since been notice should established by a direct decision (i). No positive opm- be given to ion was expressed on the other point as to the duty of the other giving notice. But it may be taken as correct that it party. j g ^ e d u ty of the party disabled to give the earliest no- tice that is reasonably practicable. Probably notice rea- sonable in itself could not be required, for the disabling accident may be sudden and at the last moment, and the duty must be limited to cases where notice can be of some use (fc). It further appears from the case that the effect of an omission of this duty is that the contract remains in force for the purpose only of recovering such (g) L. R. 6 Ex. 269. Ih) L. R. 6 Ex. at p. 277. (i) Poussard v. Spiers & Pond, 1 Q. B. D. 410. (k) Cp. the doctrine as to giving notice of abandonment to un- derwriters, Rankin v. Potter, L. R. 6 H. L. 83, 121, 157. 25 See Earp v. Tyler, 73 Mo. 617. 26 An agreement involving personal skill cannot be assigned so as to compel the other party to accept performance by the assignee, and pay him therefor. Munsel v. Temple, 3 Gilman, 93; Lans- den v. McCarthy, 45 Mo. 106; Bethlehem v. Annis, 40 N. H. 34. PERSONAL SERVICES. 423 damage as is directly referable to the omission. The decision also shows, if express authority be required for it, that it matters not whether the disability be perma- nent or temporary, but only whether it is stich as to pre- vent the fulfilment of the particular contract. In the earlier and very peculiar case of Hall v. Hall v. Wright (Z) the question, after some critical discussion of Wright: the pleadings, which it is needless to follow, came to anomalous this: " Is it a term iu an ordinary agreement to marry, tne ccm tract that if a man from bodily disease cannot marry with- to marry: out danger to his life, and -fa is unfit for marriage from [ *fc 377] the cause mentioned at the time appointed, he shall be illness excused marrying then? " (m) or in other words: "Is unfitting for the continuance of health, that is, of such a state of ex ' cuse " health as makes it not improper to marry," an implied condition of the contract? (n). The Court of Exche- quer Chamber decided by four to three that it is not, the Court of Queen's Bench having been equally di- vided. The majority of the judges relied upon two reasons: that if tbe man could not marry without dan- ger to his life, that did not show the performance of the contract to be impossible, but at most highly im- prudent; and that at any rate the contract could be so far performed as to give the woman the status and so- cial position of a wife. It was not disputed ■ that the contract was voidable at her option. 27 "Tbe man, though he may be in a bad state of health, may never- theless perform his contract to marry the woman, and so give her the benefit of social position so far as in his power, though he may be unable to fulfil all the obli- gations of the marriage state; and it rests with the woman to say whether she will enforce or renounce the contract" (o). As to the first of these reasons, the question is not whether there is or not an absolute im- possibility, but what is the true meaning of the con- tract; and in this case the contract is of such a kind that one might expect the conditions and exceptions implied in strictly personal contracts to be extended (I) E. B. & E. 746, 29 L. J. Q. B. 43. (m) Bramwell, B. 29 L. J. Q. B. 45. (re) Per Pollock, C. B. ib. 52. (o) The case is thus explained and distinguished by Montague Smith, J. in Boast v. Firth, L. E. 4 C. P. 8. 27 If a married man agrees to marry a -woman who -does not know of his marriage, she may avail herself of the contract and bring a suit for breach of promise as soons as she learns of the deception. Coover v. Davenport, 1 Heisk. 368; Kelly v. Eiley, 106 Mass. 339; Pollock v. Sullivan, 53 Vt. 507. 424 IMPOSSIBLE AGREEMENTS. [*378] rather than excluded (p). As to the second reason it cannot be maintained, except against the common understanding of mankind and "the general treatment of marriage by English law, that the acquisition of legal or social position by marriage is a principal or independent object of the contract. Unless it can be so considered, ^ the reason cannot stand with the principle affirmed in Geipel v. Smith (q), that when the main part of a contract has become impossible of per- formance by an accepted cause, it must be treated as having become impossible altogether. The decision itself can be reviewed only by a court of ultimate ap- peal; but it is so much against the tendency of the later cases that it is now of little or no authority be- yond the point actually decided, which for the obvious reasons indicated in some of the judgments is not at all likely to recur (r). The rule now before us applies only to contracts for of the rule to actual personal services. A contract of which the per- contracts for formance depends less directly on the promisor's health is not presumed to be conditional. If a man covenants to insure his life within a certain time, he is not dis- charged by his health becoming so bad before the end of that time as to make his life uninsurable (s). It has never been supposed that the current contracts of a manufacturing firm are affected in law by the managing partner being too ill to attend to business, though there are many kinds of business in which the proper execution of an order may depend on the supervision of a particular person. And in general terms it may be said that no contract which may be performed by an agent can be discharged by a cause of this kind. Limitation actual per- sonal Rights already acquired under the contract As we saw in the case of contracts falling directly within the rule in Taylor v. Caldivell, so in the case of contracts for personal services the dissolution of the contract by subsequent impossibility does not affect any specific right already acquired under it. Where there is an entire contract of this kind for work to be paid for by instalments at certain times, any instalments (p) It has long been settled that the contract to marry is so far personal that executors, in the absence of special damage to the personal estate, cannot sue upon it. Chamberlain v. William- son, 2 M. & S. 408. (q) L. R. 7 Q. B. 404. (r) See Wharton on Contracts, \ 324, and Allen v. Baker, 86 N. C. 91, there cited, where the Supreme Court of North Caro-< lina expressly declined to follow Hall v. Wright. (s) Arthur v. Wynne, 14 Ch. D. 603. DEFAULT OP PARTIES. 425 which ^ have become due in the contractor's lifetime [-^-379] remain due to his estate after the contract is put an end to by his death (t). In like manner where a pre- mium has been paid for apprenticeship, and the master duly instructs the apprentice for a part of the term, and then dies, his executors are not bound to return the premium or any part of it as on a failure of con- sideration. So the Court of Common Pleas held in 1871 (u), dissenting from a decision the other way in the Court of Chancery (x), which, however, cannot be taken as establishing a different rule of equity, or therefore one which under the Judicature Acts must prevail. For, except so far as it can be referred to the summary jurisdiction of the Court over its own officers, that decision is founded on the supposition that a pro- portionate part of the premium was a debt at law (y). Where an existing contract is varied or superseded by Substituted a subsequent agreement, and the performance of that contract agreement becomes impossible (e. g. by the death of a becoming person, according to whose estimate a sum is to be as- performance sessed) so ■ that the parties are no longer bound by it, they will be remitted to the original contract if their intention can thereby be substantially carried out. At all events a party for whose benefit the contract was varied, and who but for his own delay might have per- formed it as varied before it became impossible, cannot afterwards resist the enforcement of the contract in its original form (z). 3. We now come to the case of a contract becoming 3. i m p g- impossible of performance by the default of either sibility by- party, default of either party. Where the promisor disables himself by his own de- Default of fault from performing his promise, not only is he not promisor no excused -^f (for which indeed authority would be super- [ ^ 380] fluous) but his conduct is equivalent to a breach of the e xcuse i but :^= hT^J} P il (XT contract, although the time for performance may not con t rac t have arrived, and even though in contingent circum- stances it may again become possible to perform it (a). 2S (t) Stubbs v. Holywell Ry. Co., L. R. 2 Ex. 311. (a) Whincup v. Hughes. L. R. 6 C. P. 78. (*) Hirst v. Tolson, 2 Mac. & G. 134. (y) 2 Mac. & G. at p. 139; and see the judgments of Bovill, C. J. and Willes, J. in Whincup v. Hughes. (a) Firth v. Midland Ry. Co. 20 Eq. 100. (a) 1 Ro. Ab. 448, B. citing 21 E. 4, 54, pi. 26: "If you are bound toenfeoffineof the manor of D.beforesuch a feast, and you 28 Branson v. K. W. 10 Oregon, 278; Bassett v. Id., 55 Me. 127; 426 IMPOSSIBLE AGREEMENTS. Default of promisee discharges promisor, and may be treated as breach, or makes con- tract void- able at his option. Roberts v. Bury Commis- sioners, &c. [*881] A default consisting in mere omission may have the same effect. Where an arbitrator awards that the de- fendant shall pay the plaintiff's taxed costs of a suit on a certain day, it is the defendant's business to have them taxed before that day, and it is no excuse that in fact he had not notice of the taxation in time to pay them at the time and place fixed by the award (6). On the other hand, where the promisor is prevented from performing his contract or any part of it by the default or refusal of the promisee, the performance is to that extent excused; and moreover default or refusal is a cause of action on which the promisor may recover any loss he has incurred thereby (c), or he may rescind the contract and recover back any money he has already paid under it {d). w Default may consist either in ac- tive interruption or interference on the part of the promisee (e), or in the mere omission of something without which the promisor cannot perform his part of the contract (/). 30 The principle, in itself well settled, is illustrated by several modern cases. Where the failure of a building contractor to complete the works by the day specified js -fc caused by the failure of the other parties and their architect to supply plans and set out the land necessary make a feoffment of that manor to another before the feast, you have forfeited the bond notwithstanding that you have the land hack before the feast, having once disabled yourself from making the said feoffment, ' ' per Choke, J. (b) Bigland v. Skelton, 12 East, 436. (c) As in the familiar case of an action for non-acceptance of goods, for not furnishing a cargo, &c. ; so with a special contract, e. g. Roberts v. Bury Commissioners, L. R. 4 C. P. 755, in Ex. Ch. 5 C. P. 310. (d) Giles v. Edwards, 7 T. R. 181. (e) 1 Ro. Ab. 453, N. (/) Where a condition can be performed only in the obligee's presence, his absence is an excuse, 1 Ro. Ab. 457, U. A cove- nant to make within a year such assurance as the covenantee's counsel shall devise is discharged if the covenantee does not ten- der an assurance within the year, ib. 446, pi. 12. Boyle v. Guysinger. 12 Ind. 473; Lovring v. Id., 13 N. H. 513; Wolf v. Marsh, 54Cal.2>8; Smith v. Jordan. 13 Minn. 2(54; Crist v. Armour, 34 Barb. 378; Webster v. Coffin, 14 Mass. 196. 29 The person who keeps the other from fulfilling his part of the contract, must pay the same as though it was fulfilled. Wallman v. Society of Concord, 45 N. Y. 485; Blood v. Enos, 12 Vt. 625; St Louis v. McDonald, 10 Mo. 609; Marshall v. Craig, 1 Bibb. 379. 30 One cannot maintain a suit against another for not doing ■what he put out of the other's power to do. Gibson v. Dunman, 1 Hill (S. C), 289: Coal Co. o. O'Hern, 8 Md. 197; Stewart v. Keteltas, 36 N. Y. 388; McKee v. Miller, 4 Blackf. 222. DEFAULT OF PROMISE. | 427 to enable him to commence the works, " the rule of law applies which exonerates one of the two contracting parties from the performance of a contract when the performance of it is prevented and rendered impossible by the wrongful act of the other contracting party "(g), and the other party cannot take advantage of a provision in the contract making it determinable at their option in the event of the contractor failing in the due per- formance of any part of his undertaking (g). So where it is a term of the contract that the contractor shall pay penalties for any delay in the fulfilment of it, no pen- alty becomes due in respect of any delay caused by the refusal or interference of the other party (h). 31 Where a machine is ordered for doing certain work on the buyer's land, on the terms that it is to be accepted only if it answers a certain test; there, if the buyer fails to provide a fit place and occasion for trying the machine, and so deals with it as to prevent a fair test from being applied according to the contract, he is bound to accept and pay for the machine (i). In Raymond v. Minton (k) it was pleaded to an action Cases of of covenant against a master for not teaching his ap- apprentice- prentice that at the time of the alleged breach the ap- slli P- prentice would not be taught, and by his own wilful acts prevented the master from teaching him. This was hel4 a good plea, for " it is evident that the master cannot be liable for not teaching the apprentice if the apprentice will not be taught." 32 An earlier and con- verse case in Ellen v. Topp (I), referred to by the re- porters. There a master undertook to teach an ap- prentice several trades; it was held that on his giving up one of them, and thus making the complete perform- ance of his own part of the contract -^ impossible, the [ -j{ 382] apprentice was no longer bound to serve bim in any. "If the master is not ready to teach in the very trade which he has stipulated [promised] to teach, the apprentice is not bound to serve." A case of the same sort is put (g) Roberts v. Bury Commissioners. L. R. 5 C. P. 310, 329. (h) Holme ». Gnppv, 3 M. & W. 387; Ruisel v. Da Bandeira, 13 C. B. N. S. 149, 32 L. J. C. P. 68. (i) Mackay v. Dick, in H. L. (Sc.) 6 App. Ca. 251. (k) h. R. 1 Ex. 244. (I) 6 Ex. 424, 442; 20 L. J. Ex. 241. 31 A mere hindrance may be aVaiver as to time. Ketchum v. Zeiisdorff, 26 Wis. 514. 32 Price v. Sanders, 39 Ark. 306; Stokes v. Burrell, 3 Grant (Pa.). 241; Ishainel v. Parker, 13 111. 324; Perry v. Wheeler, 24 Vt. 286; Hedge v. Gibson, 58 Iowa, 656. 428 IMPOSSIBLE AGREEMENTS. by Choke, J. in the Year Book, 22 Ed. 4, 26, in a case from which one passage has already been given. "If I am bound to Catesby [then another judge of the Com- mon Pleas] that my son shall serve him for seven years, and I come with my son to Catesby, and offer my son to him, and he will not take him, there because there is no default on my part I shall not forfeit the bond. In like manner if he took my son and afterwards within the term sent him away, it is unreason- able that this should be a forfeiture." Alternative Where a contract is in the alternative to do one of contract. two things at the promisor's option, and one of them is Where one impossible, the promisor is bound to perform that which Po'ssfble'the is possible (m). 33 We find the rule clearly stated in the possible' one Digest (n). Where one of two things contracted for in must be the alternative subsequently becomes impossible, it is performed. a question of construction for which no positive rule becomes 116 can ^ e ^ a *^ down, whether according to the true inten- impossible, a tion of the parties the promisor must perform the al- question of ternative which remains possible, or is altogether dis- construction. charged (o). It was held, indeed, in Laughter's case (p) that where the condition of a bond is for either of two things to be done by the obligor, and one of them becomes impossible by the act of God, he is not bound to perform the other. But this is to be accounted for by the peculiar treatment of bonds, of which we shall speak presently, the right of election being part of the benefit of the condition, of which the obligor is not to be deprived. And even as to bonds the general propo- sition has been denied (o). In the absence of anything to show the intention in the particular case, the pre- [ ^ 383] sumption should surely be the other way, -^ namely that the promisor should lose his election rather than the promisee lose the whole benefit of .the contract. Where either the promisor or the promisee, having the right under a contract to choose which of two things shall be done, chooses one which becomes impossible after the choice is determined, there (on authority as well as principle) it is the same as if there had been from the first a single unconditional contract to do that (m) Da Costa v. Davis, 1 B. & P. 242. (re) Si ita stipulatus fuero :' te sisti; nisi steleris, hippocenlaurum dari? proinde erit atque te sisti sorOmmodo stipulatus essem. D. 45. 1. de v. o. 97 pr. (o) Barkworth v. Young, 4 Drew. 1 , 25. (i>) 5 Co. Rep. 21 6. 33 Lay ton v. Pearce, 1 Doug. 15; Drake v. White, 117 Mass. 10; Erie E. W. v. Union Locomotive Co. , 6 Vroom, 240. ALTERNATIVE CONTRACTS. 429 thing (q). In Roman law the presumption seems dis- tinctl) in favour of the promisor remaining bound to do what is possible (r) ; otherwise it agrees with ours (s). The exception as to mora in the extract given in the Effects of note shows the application here of the general rule as default, to impossibility caused by acts of the parties. The case put is that the creditor has made his election (to have Stichus, suppose) but has neglected or refused to accept Stichus: now if Stichus dies he cannot demand Pamphilus. It is the same as if there had been a single promise, and the performance made impossible by the promisee's default. The same rule is given in another passage (t). ■^ There is yet something to be said of the treatment [ "^ 384] of conditional contracts where the condition is or becomes Conditional impossible. A condition may be defined for the present contracts - purpose as an agreement or term of an agreement where- by the existence of a contract is made to depend on a future contingent event assigned by the will of the parties (u). The condition may be either that an event shall or that it shall not happen, and is called positive or negative accordingly. Now the event which is the subject- matter of the condition, instead of b'eing really contin- gent, may be necessary or impossible, in itself or in law. But the negation of a necessary event is impos- sible and the negation of an impossible event is neces- (q) Brown v. Royal Insurance Co, p. 361, above. (r) Save that in the case of an alternative obligation to deliver specific objects at the promisor's election he still has an election in solutione, as it is said, i. e. he may at his option pay the value of that which has perished. See Vangerow, Pand. \ 569, note 2 (3. 22 sqq.) where the subject is fully worked out. (s) Papiniansays: Stichumaut Pamphilum , ittrum ego vclim dare spondes? altero mortuo, qui Vivit solus petetur, nisi si mora facta sit in eo mortuo, quern petitor elegit; tuncenimperinde solnsille qui decessit praebetur ac si solus in obligationem d J eductus fuisset. Quod si promissoris fuerit electio, defuncto altero (i. e. before election made), qui superest aeque peti potest. D. 46. 3. de solut. et lib. 95 pr. He proceeds to this curious question: What if one dies by the debtor's default before election made, and afterwards the other dies without his default? No action can be maintained on the stipulation, but there is a remedy by doli actio. (t) Stipulatus sum Damam ant Erotem servum dari, cum Damam dares, ego quominus acciperem in mora fui; mortuus estDama; an putes me ex stipulatu actionem habere? Respondit, secundum Massurii Sabini opinionem puto te ex stipulatu agere non posse; nam is recte existimabat, si per debitorem mora non esset, quominus id quod debebat solveret, continuo eum debito liberari. D. 45. 1. de v. o. 105. (u) Savigny Syst. § 116 (3. 121); Pothier, Obi. I 199. 430 IMPOSSIBLE AGREEMENTS. sary. It therefore depends further on the positive or negative character of the contingency whether the condition itself is necessary or impossible. In what ways Thus we may have conditional promises with con- condition ditions of these kinds: may bo Necessary: 53™ (a) By affirmation of a necessity. As a promise to pay 100Z., "if the sun shall rise to-morrow." (/?) By negation of an impossibility; "If J. S. does not climb to the moon," or "if my executor does not sue for my debt to him." Impossible: (/) By affirmation of an impossibility: "If J. S. shall climb to the moon," or "if J. S. shall create a new manor." (. White, 10 C. B. N. S. 844, 860, 31 L. J. C. P. 28. 32. (d) 3 M. & S. 344. 68 Castleman v. Griffin, 13 Wis. 535; Meyer v. Yesser, 32 Ind. 294; Ely v. Stewart. 2 Md. 408; Casey v. Allen, 1 A.- K. Marsh, 465; Fishback v. Miller, 15 Nev. 428. 69 If a misrepresentation is not believed it has no effect. 70 The law tolerates a good deal of lying in trade, when it is the nature of merely puffing one's own goods or depreciating those of another, provided that the thing bargained for reveals its own qualities and is onen to the parties' equal inspection. Poland v. Brownell, 131 Mass. 138; Armstrong e. Huffstuller. 19 Ala. 51; Hill v. Bush, 19 Ark. 522; Bella Henderson, 6 How. (Miss.)311. 31 PRINCIPLES OF CONTRACT. 482 MISTAKE. by the following extract from the judgment of Bavley, J. :— " What did the plaintiffs bargain to buy and the defendants to sell? They both understand [sic] that the one agreed to buy and the other lo sell a bar containing such a quantity of silver as should appear by the assay, and the quantity is fixed by the assay and paid for; but through some mistake in the assay the bar turns out not to contain the quantity represented but » smaller quantity. The plaintiff therefore may rescind the con- tract and bring money had and received, having offered to re- turn the bar of silver. ' ' And by Darnpier, J. :— " The bargain was for a bar of silver of the quality ascertained by the assay-master, and it is not of that quality. It is a case of mutual » error." These judgments went farther than was neces- [ "Ar 440] sary to the -fa decision (e), for a verdict had been taken only for the difference in value. Cases of It is important to distinguish from the cases above misdescrip- considered another class where persons who have con- tion on sales tracted for the purchase of real property or interests Bertv distiri- therein have been held entitled at law (/) as well as in guished. equity (g) to rescind the contract on the ground of a misdescription of the thing sold in some particular materially affecting the title, quantity, or enjoyment of the estate. 71 In some of these cases language is used which, taken alone, might lead one to suppose the agree- ment absolutely void; and in one or two (e. g. Torrance v. Bolton) there is some real difficulty in drawing the line. But they properly belong to the head of' Mis- representation, or else (which may be the sounder view where applicable) (h) are cases where the contract is (. 954, an omitted life interest sup- plied by aid of subsequent context) : Redfern v. Bryning, 6 Ch. D. 133; Salt v. Pym, 28 Ch. D. 153 (Chitty, J.) (v) Per James, L. J. Greenwood v. Greenwood, 5 Ch. D. at p. 956" (z) Shepp. Touchst. 55, 87: cp. ib. 369. («) Burchell n. Clark (C. A.) 2 C. P. D. 88. (ft) Per Cur. (Ex. Ch.), Ford v. Beech. 11 Q. B. at p. 866, 17 L. J. Q. B. at p. 116. (c) Wilson v. Wilson, 5 H. L. C. 40, 66, per Lord St. Leonards, and see his note, V. &P. 171. 83 The court will not decree an alteration in the terms of a duly executed written contract,' unless the proofs are clear and de- cisive. Flaacke v. Jersey City, 1 Stew. Ch. 110; Wry v. Cutler, 12 Heisk. 28; Campbell v. Hatchett, 55 Ala. 548; Cummings v. jBulgin, 10 Stew. Ch. 476. IN EXPRESSION : OBVIOUS ERRORS. 495 which is unreasonable and repugnant to the general in- tention and to tAt the usual frame of such instruments, [ -fc 454] were inserted by mistake (d). An agreement has even been set aside chiefly, if not entirely, on the ground that the unreasonable character of it was enough to satisfy tho Court that neither party could have understood its true effect: such at least ap- pears to bo the meaning of Lord Eldon's phrase, " a sur- prise on both parties " (e). The agreement itself pur- ported to bind the tenantof a leasehold renewable at arbi- trary (and in fact always increasing) tines at intervals of seven years to grant an underlease at a fixed rent with a perpetual right of renewal. The lessor was in his last sickness, and there was evidence that he was not fit to attend to business. Cbarges of fraud were made, as usual in such cases, but not sustained : the decision might however have been put on the ground of undue influence, and was so to some extent by Lord Redesdale. Again, there is legal as well as equitable jurisdiction General to restrain tho effect of general words if it sufficiently words re- appears by the context that they were not intended to straine <* t>7 convey their apparent unqualified meaning. It was held in Browning v. Wright (/) that a general covenant for title might be restrained by special covenants among which it occurred. 84 And the same principle was again deliberately asserted shortly afterwards (in acaseto the particular facts of which it was however held not to ap- ply):- "However general the words of a covenant may be if standing alone, yet if from other covenants in the same deed it is plainly and irresistibly to be inferred that the party could not have in- tended to use tho words in the general sense which they import, the Court will limit the operation of the general words " (17). ■fc Similarly the effect of general words of convey- [ -^ 455} ance is confined to property of the same kind with that (d) Re De la Touche's settlement, 10 Eq. 599, 603; where how- ever the mistake was also established by evidence. (e) Willan r. Willan, 16 Ves. 72, 81; affirmed in Dom. Proc. 2 Dow. 275, 278. (/) 2 B. & P. 13, 26: but it was also thought the better con- struction to take the clause in question as being actually part of a special covenant, and so no general covenant at all. (g) Hesse v. Stevenson, 3 B. & P. 565, 574. M If a deed is found to describe the wrong parcel or too much or too little of the right one, the party aggrieved may have it re- formed, on due proofs, which in such cases are commonly easy. Jones v. Sharp, '.) Heisk. 6G0; Murray v. Dake, 46 Cal. 644; Broad- well v. Phillips, 30 Ohio, 255; Harold v. Weaver, 72 Ala. 373. 496 MISTAKE. Obversations on rules of evidence as connected with the following heads. Evidence and con- struction. which has been specifically described and conveyed (h). Where there is a specific description of a particular kind of property, followed by words which prim,a facie would be sufficient to include other property of the same kind, it has been held that those words do not in- clude the property not specifically described, on the principle expressio unius est exclusio alterius(i). Before we deal with the following heads it will be relevant to observe that the questions arising under them are for the most part either questions of evidence, or mixed questions of evidence and construction. This demands some preliminary explanation. The end proposed is to give effect to the true inten- tion of the parties concerned. Intention has to be inferred from words, or conduct, or both. 85 In making these inferences conduct 86 must generally be interpreted, and words may often be interpreted, by' reference to other relevant circumstances of the trans- action. And the rules which guide a court of justice in deter- mining of what, things it may take notice for the pur- pose of such inferences, and in what manner such things may be brought to its notice — in other words, what facts (h) Rooke ;\ Lord Kensington, 2 K. & J. 753, 771. The same principle applies to general words in the statement of a com- pany's objects in its memorandum of association. Ashbury, &c. Co. v. Riche, L. R. 7 H. L. 653. (i) Denn v. Wilford, 8 Dow. & Ry. 549. The case was a curious one. A fine had been levied of (inter alia) twelve messuages and twenty acres of land in Chelsea. The conusor had less than twenty acres of land in Chelsea, but nineteen messuages. It was decided that although all the messuages would have passed under the general description of land if no less number of messuages had been mentioned, yet the mention of twelve messuages pre- vented any greater number from passing under the description of land; and that parol evidence was admissible to show first that there were in fact nineteen messuages, this being no more than was necessary to explain the nature and character of the property; next (as a consequence of the construction thereupon adopted by the Court) which twelve out of the nineteen mes- suages were intended. And see further the notes to Roes. Tran- roarr, 2 Sm. L. C. 86 The language and terms of the contract will be understood in the ordinary and popular sense, unless they relate to some tech- nical subject. Bradshaw v. Bradbury, 64 Mo. 334: Hawes r. Smith, 3 Fairf. 429; Mansfield R. R. v. Veeder, 17 Ohio, 385. 86 Chicago v. Sheldon. 9 Wal. 50: Camden Land Co. v. Lippin- cott, 16 Vroom, 405; Coleman v. Grubb, 11 Harris (Pa.), 393; Farrar v. Rowly, 2 La. An. 475. IN EXPRESSION : PAROL EVIDENCE. 497 are -fc relevant, and what proof of such facts is required [ + 456] — are rules of evidence (fc). A rule of construction is a rule for determining the inference to be drawn from a fact of a particular class when duly brought under the notice of the Court ac- cording to the rules of evidence — the fact, namely, that persons have used words or combinations of words such as come within the general proposition affirmed by the rule. The name " rule of construction " is confined by general usage to rules for the interpretation of written documents in matters on which, in the absence of a rule prescribed by authority, there might exist a reasonable doubt. Rules of construction, therefore, are in practic closely connected with, and their importance is much affected by, rules of evidence (I). We are now concerned with a general rule of evi- dence, and the modifications effected in some of its re- sults partly by special rules of construction and partly by direct exceptions. The principle from which the law sets out is one al- Meaning of most too obvious to need stating, being that on which the rule as to we daily act in all the transactions of life: namely that P<""ol evi- men are to be taken to mean what they say. The next step is of a somewhat more artificial char- acter, but equally founded in reason. It is that men are taken to mean what they have chosen to say delib- erately and in a permanent form rather than what they may have said in hasty or less considered discourse. Hence the general rule that evidence of an oral agree- ment is not admissible to contradict the terms of a written document. It has been thus stated: "The law prohibits generally, if not universally, the introduction of parol evidence to add to a written agreement, whether respecting or not respecting land, or -^f to vary it." (m) 87 [ ^ 457] "If A. and B. make a contract in writing, evidence is not admissible to show that A. meant something differ- (fc) See the arrangement of the Indian Evidence Act, 1872. Part I. Relevancy of Facts. Part II. On Proof. (1) Cp. Mr. F. V. Hawkins' remarks on rules of construction in the preface to his Treatise on the Construction of Wills. (m) Martin v. Pycroft, 2 D. M. G. 785, 795. We have not to consider in this place how far those cases must be deemed really exceptional in which it is allowed to be shown that a custom of the country, or of trade, though not expressed, is in fact part of the contract. 87 Parol evidence is always admissible to identify the subject of a contract. Howard v. Pepper, 136 Mass. 28; Coleman v. Manhattan Imp. Co. , 94 N. Y. 229. McGregor v. Brown, 5 Pick. 170. 32 PRINCIPLES OF CONTRACT. 498 MISTAKE. ent from what is stated in the contract itself, and that B. at the time assented to it. If that sort of evidence were admitted every written document would be at the mercy of witnesses that might be called to swear anything (n). Eule In the absence of mistake or fraud, or a verbal agree- of equity. ment having been acted upon (o), the same rule pre- vails in equity, and this in actions for specific perform- ance as well as in other proceedings, and whether the alleged variation is made by a contemporaneous (p) or a subsequent (q) verbal agreement. "Variations ver- bally agreed upon . . . are not sufficient to prevent the execution of a written agreement, the situation of the parties in all other respects remaining unal- tered" (r). When a question arises as to the construction of a [ ^ 458] -j( written instrument as it stands, parol evidence is not admissible (and was always inadmissible in equity as well as at law) to show what was the intention of the parties. A vendor's express contract to make a good marketable title cannot be modified by parol evidence that the purchaser knew there were restrictive cove- nants (s). It is otherwise, as we shall presently see, (re) Per Pollock, C. B. Nichol v. Godts, 10 Ex. 191, 194, 23 L. J. Ex. 314. See also Hotson v. Browne, 9 C. B. N. S. 442, 30 L. J. C. P. 106; Halheada. Young, 6 E. & B. 312, 25 L. J. Q. B. 290. (o) The doctrine of equity as to part performance rests on a principle analogous to estoppel (Morphett v. Jones, 1 Swanst. 172, 181) and does not belong to our present subject. {p) Omerod v. Hardman, 5 Ves. 722, 730. Lord St. Leonards (V. & P. 163) says this cannot be deemed a general rule: but see Hill v. Wilson, 8 Ch. 888; per Mellish, L. J. at p. 899. (q) Price v. Dyer, 17 Ves. 356; Robinson v. Page, 3 Euss. 114, 121. But a, subsequent waiver by parol, if complete and uncon- ditional, may be a good defence; ib.: Goman v. Salisbury, 1 Vera. 240. And cp. 6 Ves. 337 a, note. Qu. if not also at law, if the contract be not under seal : see Chitty on Contracts, 707 (8th ed. ) ; Dart, V. & P. 970. Mr. Dart's statement seems too positive, for the case of Noble v. Ward (L. E. 2 Ex. 135) does not prove that "a verbal waiver of a written agreement is no defence at law" but only that a new verbal agreement intended to super- sede an existing contract, but by reason of the Statute of Frauds incapable of being enforced, cannot operate as a mere rescission of the former contract; the ground being that there is nothing to show any intention of the parties to rescind the first contract ab- solutely. (r) Price v. Dyer, 17 Ves. at p. 364; Clowes v. Higginson, 1 Ves. & B. 524,' where it was held (1) that evidence was not ad- missible to explain, contradict, or vary the written agreement but (2) that the written agreement was too ambiguous to be. en- forced. (s) Catou. Thompson (C. A.), 9 Q. B. D. 616. In such a case the true intention may well be that the vendor shall remove the defect. IN EXPRESSION : RULES AS TO PAROL EVIDENCE. 499 where it is sought to rectify the instrument. And there- fore the Court has in the same suit refused to look at the same evidence for the one purpose and taken it into account for the other (t). It is no real exception to this rule that though " evi- Apparent ex- dence to vary the terms of an agreement in writing is ceptions at not admissible," yet "evidence to show that there is not law . and * u an agreement at all is admissible," as where the opera- e( * ul ^' tion of a writing as an agreement is conditional on the approval of a third person (tt). "A written contract not under seal is not the contract itself, but only evi- dence — the record of the contract. When the parties have recorded their contract, the rule is that they can- not alter or vary it by parol evidence. They put on paper what is to bind them, and so make the written document conclusive evidence between them. But it is always open to the parties to show whether or not the written document is the binding record of the con- tract'" (x). 88 " The rules excluding parol evidence have no place in any inquiry in which the Court has not got before it some ascertained paper beyond question binding and of full effect" (y). So in Jervis v. Berridge (z) it was held that a docu- ment purporting to be a written transfer of a contract for the *fc purchase of lands "was . . . not a contract T -^ 459] valid and operative between the parties but omitting (designedly or otherwise) some particular term which had been verbally agreed upon, but was a mere piece of machinery . . . subsidiary to and for the pur- poses of the verbal and only real agreement." And since the object of the suit was not to enforce the ver- bal agreement, nor "any hybrid agreement compounded of the written instrument and some terms omitted there- from," but only to prevent the defendant from using the written document in a manner inconsistent with the (t) Bradford v. Eomney, 30 Beav. 431, cp. per Lindley, L. J. 9 Q. B. D. 620. (») Pym v. Campbell, 6 E. & B. 370, 374, 25 L. J. Q. B. 277. \x) Per Bramwell, B. Wake v. Harrop. 6 H. & N. at p. 775, 30 L. J. Ex. at p. 277. (y) Guardhouse v. Blackburn, L. E. 1 P. & D. 109, 115. And see per Page Wood, V.-C. in Druiff v. Lord Parker, 5 Eq. 131, 137. (z) 8 Ch. 351, 359, 360. 88 All uncertainties in the descriptions of things, if the facts allow, may be explained by parol. Messer v. Oestreich, 52 Wis. 684; Cooper v. White, 30 Axk. 513; Hamm v. San Francisco, 17 Fed. Eep. 119. . 500 MISTAKE. real agreement, there was no difficulty raised by the Statute of Frauds, "which does not make any signed instrument a valid contract by reason of the signature, if it is not such according to the good faith and real intention of the parties." If it appears that a docu- ment signed by the parties, and apparently being the record of a contract, was not in fact intended to operate as a contract, then " whether the signature is or is not the result of a mistake is immaterial" (a). Eeal excep- We shall see however that the heads now to be dis- tions in cussed present two classes of really exceptional cases equity. recognized by equity. Artificial First, those in which equity applies to instruments rules of con- of certain kinds rules of construction which (as regards struction: ^q ac t ua ] terms of the instruments) are highly arti- ed tottuS? 11 " fi°i a ^ 80 artificial, indeed, that they come to much the same thing as presuming a verbal agreement incon- sistent with and operating to vary the written agree- ment (b). The ground on which these rules were established (or at any rate which in modern ti mes has been relied on to account for them) was that the manner in which [ jf-460] the-^- parties had expressed their intention did not cor- respond with their true intention. We must therefore consider the cases governed by the rules in question to have been originally cases of relief against mistaken ex- pression. But since the doctrine of equity has been fixed and uniform they have practically ceased to have any such nature. For persons who make contracts are presumed to know the law of the land, including the law administered by courts of equity; and therefore they must be presumed to know that if the nature of the con- tract and the terms used in framing it fall within the scope of these peculiar rules which have now become fixed rules of construction, the contract will be inter- preted accordingly. And in fact they generally do know this, and use the accustomed expressions for the very reason that they have acquired a definite artificial meaning in courts of equity. It seems proper, on ac- ta) Per Bramwell, B. Rogers v. Hadley, 2 H. & C. 227, 249, 32 L. J. Ex. 241. In this ca'se there was "a real contract not in writing and a paper prepared in order to comply with some ) form, which was stated at the time to contain a merely nominal price. ' ' (ft) "You are to ascertain the intention of the parties not only by what they said but by what the Court sees to be the conse- quence, and by what the Court may or may not consider to be ab- surd or oppressive; or thought to be so in former times: " Lind- ley, L. J. in Wallis v. Smith, 21 Ch. D. at p. 274. IN EXPRESSION : PECULIAR RULES OP CONSTRUCTION. 501 count of the origin of these equitable rules, to say something of them in this place, though not to go into details belonging to the fuller treatment of the special departments affected by them. In the other class of exceptional cases, which form Limited ad- the last division of the subject, courts of equity have missiqn of admitted oral evidence, for certain purposes and under oral . evidence certain limitations, to show that by reason of a mistake tfn'contract" the terms of a written instrument fail to express the real intention of the parties, and that the real agree- ment is different from the written agreement. It will be obvious from the foregoing remarks that this class originally included the last. We proceed to consider the topics thus indicated. 2. Peculiar Rules of Construction in Equity. The material exceptions to the rule that contracts are construed alike at common law and in equity are — a. Restricted construction of general words, and especially of releases. b. Stipulations as to time. c. Penalties. ■fa A. Restriction of General Words. \ ~1c 461] tit i ■• o , •■ Restricted We have seen that courts both of law and of equity construction have assumed a power to put a restricted construction of general on general words when it appears on the face of the in- words carried strument that it cannot have been the real intention of ^ common* the parties that they should be taken in their apparent ] aw: es- general sense. 89 pecially Courts of equity went farther, and did the like if the in releases, same conviction could be arrived at by evidence exter- nal to the instrument. Thus general words of convey- ance (c) and an unqualified covenant for title (d), though not accompanied as in Broivning v. Wright (e) by other qualified covenants, have been restrained on proof that they were not meant to extend to the whole of their natural import. 90 (c) Thomas v. Davis, 1 Dick. 301. (d) Coldcott v. Hill, 1 Cha. Ca. 15, sed qu. for the case looks very like admitting contemporaneous conversation to vary the effect of a solemn instrument, and that without any mistake or fraud being made out, which is quite contrary* to the modern rule. (e) 2 B. & P. 13. Supra, p. 454. 89 Since persons cannot plead ignorance of the law, neither can they, of the effect of their language. Boner v. Maple, 3 La. An. 600; Watrons v. McKie, 54 Texas, 65. 90 Opinion of Dallas, C. J., in Solly v. Forbes, 2 Brod. & S. 38, 502 MISTAKE. This jurisdiction, in modern times a well established one, is exercised chiefly in dealing with releases. " The general words in a release are limited always to that thing or those things which were specially in the con- templation of the parties at the time when the release was given " (/). This includes the proposition that in equity " a release shall not be construed as applying to something of which the party executing it was ig- norant" (g). There is at least much reason to think that it matters not whether such ignorance was caused by a mistake of fact or of law (h). In particular a release executed on the footing of ac- counts rendered by the other party, and assuming that [ -^ 462] they are -^ correctly rendered, may be set aside if those accounts are discovered to contain serious errors. It would be otherwise however if the party had examined the accounts himself and acted on his own judgment of their correctness. An important application of this doctrine is in the settlement of partnership affairs be- tween the representatives of a deceased partner (espe- cially when they are continuing partners) and the per- sons beneficially interested in his estate (i). A releasor, however, cannot obtain relief if he has in ' the meanswhile acted on the arrangement as it stands in such a way that the parties cannot be restored to their former position (k). Stipulations T>. Stipulations as to Time. as to time. . . It is a familiar principle that in all cases where it is sought to enforce contracts consisting of reciprocal promises, and " where the plaintiff himself is to do an act to entitle himself to the action, he must (/ ) Per Lord Westbury, L. & S. W. Ry. Co. v. Blackmore, L. R. 4 H. L. at p. 623; cp. Lindo v. Lindo, 1 Beav. 496, 506; Fare- well v. Coker, cited 2 Mer. 353; Dav. Con v. 5. pt. 2. 622-4. (g) Per Wilde, B., Lyall v. Edwards, 6 H. & N. 337, 348, 30 L. J. Ex. 193, 197. This was a case of equitable jurisdiction under the C. L. P. Act, 1854: but before that Act courts of law would not allow a release to be set up if clearly satisfied that a court of equity would set it aside: Phillips v. Clagett, 11 M. & W. 84, 12 L. J. Ex. 275. (h) See the cases considered at p. 406 above. (t) Millar v. Craig, 6 Beav. 433; Lindley, 2. 969. (k) Skilbeck v. Hilton, 2 Eq. 587, but qu. whether the princi- ple was rightly applied in the particular case. 48, 49. The rule most conspicuous and wide reaching is, that a written contract shall be so interpreted so as, if possible, to carry out what the parties meant. Hunter v. Miller, 6 B. Monr. 612; Collins v. Lavelle. 44 Vt. 230; Wolfe v. Scarborough, 2 Ohio, 361; Higgins v. Wasgatt, 34 Me. 305. IN EXPRESSION : STIPULATIONS AS TO TIME. 503 either show the act done, or if it be not done, at least that he has performed everything that was in his power to do "(I). Accordingly, when by the terms of a contract one party is to do something at or before a specified time, and when he fails to do such thing within that time, he could not afterwards claim the performance of a con- tract if the stipulation as to time were construed ac- cording to its literal terms. The rule of the common law was that " time is always of the essence of the con- tract." 91 When any time is fixed for the completion of it, the contract must be completed on the day specified, or an action will lie for the breach of it (m). 92 The rule of equity, which now is the general rule of ^ English jurisprudence, is to look at the whole scope [ -fa 463] of the transaction to see whether the parties really meant the time named to be of the essence of the con- tract. 93 And if it appears that, though they named a specific day for the act to be done, that which they really contemplated was only that it should be done within a reasonable time; then this view will be acted upon, and a party who according to the letter of the contract is in default and incompetent to enforce it will yet be allowed to enforce it in accordance with what the Court considers its true meaning. 94 ' 'Courts of equity have enforced contracts specifically, where no action for damages could be maintained; for at law the party plaintiff must have strictly performed his part, and the incon- venience of insisting upon that in all cases was sufficient to require the interference of courts of equity. They dispense with that which would make compliance with what the law requires oppressive, and in various cases of such contracts they are in the constant habit of relieving the man who has acted fairly, though negligently. Thus in the case of an estate sold by auction, there is a condition to forfeit the deposit if the purchase be not com- I) Notes to Peeters v. Opie, 2 Wms. Saund. 743. m) Parkin v. Thorold, 16 Beav. 59, 65. 91 Allen v. Cooper, 22 Me. 133; Warren v. Bean, 6 Wis. 120; O'Donnell v. Leeman, 43 Me. 158; Barrett v. Hard, 23 La. An. 712; Cromwell v. Wilkinson, 18 Ind. 365. 92 Weeks v. Little, 89 N. Y. 566; Marshall v. Ferguson, 23 Cal. 65: Hanson v. Kirtley, 11 Iowa, 565. 93 If time is not the essence of the contract, and the person acted in good faith, he may obtain relief in equity. Brashier v. Gratz, 6 Wheaton, 528; Hild v. Linne, 45 Texas, 476; Hill v. Fisher, 34 Me. 143, 94 See Brumfieldu. Palmer, 7 Blackf. 227; Thurston v. Arnold, 43 Iowa, 43; Pedrick v. Post, 85 Ind. 255; Kercheval v. Swope, 6 T. B. Monr. 362. 504 MISTAKE. pleted -within a certain time; yet the Court is in the constant habit of relieving against the lapse oi time; and so in the case of mortgages, and in many instances relief is given against mere lapse of time where lapse of time is not essential to the substance of the contract." So said Lord Eedesdale in a judgment which has taken a classical rank on this subject (n). Contracts between -vendors and purchasers of land are however the chief if not the tinly class of cases to which the rule has been habitually applied (o). As to making It was once even supposed that parties could not time of the make time of the essence of the contract by express essence of the agreement; but it is now perfectly settled that they can, 1111 the question being always what was their true in- tention (p), or rather "what must be judicially assumed [ -^ 464] to have been their ^ intention" (q). "If the parties choose even arbitrarily, provided both of them intend to do so, to stipulate for a particular thing to be done at a particular time," such a stipulation is effectual 95 There is no equitable jurisdiction to make a new con- tract which the parties have not made (r). The fact that time is not specified, or not so specified as to be of the essence of the contract, does not affect the general right of either party to require completion on the other part within a reasonable time, and give notice of his intention to rescind the contract if the default is con- tinued (s), as on the other hand conduct of the party entitled to insist on time as of the essence of the con- tract, such as continuing the negotiations without an (n) Lennon v. Napper, 2 Sch. & L. 684, cited by Knight Bruce, L. J. Roberts v. Berry, 3 B*. M. G. at p. 289, and again adopted by the L. JJ. in Tilley v. Thomas, 3 Ch. 61. (o) See per Cotton, L. J., 4 C. P. D. at p. 249. (p) Seton v. Slade, 7 Ves. 265, 275, and notes to that case in 2 Wh. & T. L. C. : Parkin v. Thorold, supra. (q) Grove, J. in Patrick v. Milner, 2 C. P. D. 342, 348. (r) Per Alderson, B. Hipwell v. Knight, 1 Y. & C. (Ex.) 415. And see the observations of Kindersley, V. -C. to the same effect in Oakden v. Pike, 34 L. J. Ch. 620. (s) This is the true and only admissible meaning of the state- ment that time can be made of the essence of a contract by subsequent express notice. Per. Fry, J. Green v. Sevin, 13 Ch. B. 589, 599; per Turner, L. J. Wiliians u Glenton, 1 Ch. 200, 210. 95 If the parties by the form of their contracting make time the essence of the contract, the time is binding. And this may be shown by oral evidence. Thurston v. Arnold, 43 Iowa, 43. See Taylor v. Longworth, 14 Pet. 172; Hicks v. Aylsworth, 13 R I., 562. IN EXPRESSION : RELIEF AGAINST PENALTIES. 505 express reservation after the time is past, may operate as an implied waiver of his right (t). In mercantile contracts the presumption, if any, is that time where specified is an essential condition (w). 96 The principles of our jurisprudence on his head are well embodied by the language of the Indian Contract Act, s. 55 : When a party to a contract promises to do a certain thing at imjjan Con- or before a specified time, or certain things at or before specified tract Act times, and fails to do any such thing at or before the specified thereon, time, the contract, or so much of it as has not been performed, becomes voidable, at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. [The Court may infer from the nature of a contract, even though no time be specified for its completion, that time was intended to be of its essence to this extent, that the contracting party is bound to use the utmost diligence to perform his part of the con tract] (x). If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become void- able by the -fa failure to do such thing at or before the specified [ -JL- 465 J time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. If in case of a contract, voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless at the time of such acceptance, he gives notice to the promisor of his intention to do so {y). G. Relief against Penalties. In like manner penal provisions inserted in instrn- j> e ij e f ments to secure the payment of money or the perform- against ance of contracts will not be literally enforced, if the penalties, substantial performance of that which was really con- especially as r J to mortgages. (t) "Webb v. Hughes, 10 Eq. 281 : and see note (y), next p. («) Per Cotton, L. J. Eeuter v. Sala, 4 C. P. D. at p. 249. (n"| ~fc merely to secure the enjoyment of a collateral ob- L "w 4D ' J ject " (g). In all such cases the penal sum was origi- nally recoverable in full in a court of law, but actions brought to recover penalties stipulated for by bonds or other agreements, and land conveyed by way of mort- gage, have* for a long time been governed by stat- utes (h). (d) See Douglas v. Culverwell, 31 L. J. Ch. 543; and so also at common law, Gardner v. Cazenove, 1 H. & N. 423, 435, 438, 26 L. J. Ex. 17, 19, 20. (e) Per Lord Cottenham, C. "Williams v. Owen, 5 M. & Cr. 303, 306. (/) Per Lord Hatherley, C. Thompson v. Hudson, L. R. 4 H. L. 1, 15. {g) Per Lord Thurlow, Sloman v. "Walter, 2 "Wh. & T. L. C. 1094. (h) As to common money bonds : 4 & 5 Anne, c. 16, s. 13; C. L. P., Act 1860 (23 & 24 Vict. c. 126), s. 25. As to other bonds and agreements : 8& 9 Wm. 3, c. 11, s. 8. The statutes are col- lected and reviewed in Preston v. Dania, L. E. 8 Ex. 19. A mortgagee suing in ejectment, or on a bond given as collateral security, may be compelled by rule of Court to reconvey on pay- 508 MISTAKE. It would lead us too far beyond our present object to discuss the cases in which the question, often a very- nice one, has arisen, whether a sum agreed to be paid upon a breach of contract is a penalty or liquidated damages. It may be noted however in passing that " the words liquidated damages or penalty are not con- clusive as to the character of the sum stipulated to be paid." 98 This must be determined from the matter of the agreement (i). 3. Peculiar Defences and Remedies derived from Equity. Defence -A-. Defence against Specific Performance. against spe- , cine perform- When by reason of a mistake (e. g. omitting some ance. terms which were part of the intended agreement) a contract in writing fails to express the real meaning of the parties, the party interested in having the real and original agreement adhered to (e. g. the one for whose benefit the omitted term was) is in the following posi- tion. If the other party sues him for the specific perfor- mance of the contract as expressed in writing, it will [ -^C 468] be a good -^ defence if be can show that the written contract does not represent the real agreement: and this whether the contract is of a kind required by law to be in writing or not. Thus specific performance has been refused where a clause had been introduced by in- advertence into the contract (k). It is sometimes said with reference to cases of this class that the remedy of specific performance is discretionary. But this means a judicial and regular, not an arbitrary discretion.- The Court "must be satisfied that the agreement would ment of principal, interest, and costs. 7 Geo. 2, c. 20; C. L. P. Act 1852 (15 & 16 Vict. c. 76) s. 219. Bonds of the kind last men- tioned hardly occur in modern practice. (i) Per Bramwell, B. in Betts t>. Burch, 4 H. & N. 506, 511, 28 L. J. Ex. 267, 271. The latest cases on this subject are — Lea v. Whitaker, L. R. 8 C. P. 78; Magee v. Lavell, L. E. 9 C. P. 107; Ex parte D'Alteyrac, 15 Eq. 36; Ex -parte Capper, 4 Ch. D. 724; Wallis v. Smith, C. A. 21 Ch. D. 243. Cp. Weston v. Metrop. Asylum District, C. A. 9 Q. B. D. 404, on the similar question of a penal rent. In the Indian Contract Act the knot is cut by abolishing the distinction altogether: see s. 74. 98 If the instrument in litigation contains only » condition "with a penalty to give it effect,- there is no remedy besides this. Stearns r. Barrett, 1 Pick. 443; and in a suit for the penalty itself nothing can be recovered in excess of it and the added costs. In re Wilson, 11 Stew. Ch. 205; Armstrong v. The State, 7 Blackf. 81. IN EXPRESSION : PAROL VARIATIONS. 509 not have been entered into if its true effect had been understood" (k). On the other hand a party cannot, at all events where the contract is required by law to be in writing, come forward as plaintiff to claim the performance of the real agreement which is not completely expressed by the written contract. Thus in the case of Townshend Townshend v. Stangroom (l) (referred to by Lord Hatherley when *'■ Stangroom. V.-C. as perhaps the best illustration of the princi- ple) (m) there were cross suits (n), one for the specific performance of a written agreement as varied by an oral agreement, the other for specific performance of the written agreement without variation; and the fact of the parol variations from the written agreement be- ing established, both suits were dismissed. And the result of a plaintiff attempting to enforce an agreement with alleged parol variations, if the defendant disproves the variations and chooses to abide by the written agreement, may be a decree for the specific performance of the agreement as it stands at the plaintiff's cost (o). 99 ^-But it is open to a plaintiff to admit a parol addi- [ "^ 469] tion or variation made for the defendant's benefit, and so enforce specific performance, which the defendant (k) Watson v. Marston, 4 D. M. G. 230, 240. (Z) 6 Ves. 328. (»») Wood v. Scarth, 2 K. & J. 33, 42. (n) Under the Judicature Acts there would be an action and counter-claim. (o) See Higginson v. Clowes, 15 Ves. 516, 525; and such, it is submitted, is the real effect of Fife v. Clayton, 13 Ves. 546, s. c. more fully given 1 C. P. Cooper (temp. Cott«nham) ; 351: the dif- ferent statement in Dart, V. & P. 1116, appears on examination to be hardly borne out by either report, and is at all events not consistent with Townshend v. Stangroom, or with the general doctrine of the Court. In this case Lord Eldon laid hold on the plaintiff's attempt to set up a variation, combined with an offer in general terms to perform the agreement, as amounting to an offer to perform whatever the Court might consider the real agreement, perhaps even if established by evidence which would otherwise have been admissible only by way of defence. But after a plaintiff has failed to support his own construction of an agreement which the Court thinks ambiguous, he cannot take advantage of such an offer contained in his own pleadings "to take up the other construction which the defendant was at one time willing to have performed:" Clowes v. Higginson, 1 Ves. & B. 524, 535. 99 Oral evidence of what has been said before, or at the time of the making of a written contract is not admissible to vary the terms of the written contract, as all such matters are deemed to be merged in the writing. Shepard v. Haas. 14 Kan. 443; Ives v. Williams, 50 Mich. 100; Kelly v. Roberts, 40 N. Y. 432; Morse e. Low, 44 Vt. 561 ; Day v. Thompson, 65 Ala. 269. 510 MISTAKE. Relations of this doctrine to Statute of Frauds. - [*470] might have successfully resisted if it had been sought to enforce the written agreement simply. This was settled in Martin v. Pycroft (p): " The decision of the Court of Appeal proceeded on the ground that an agreement by parol to pay 200Z. as a premium for . .a lease [for which there was a complete agreement in writing not mentioning the premium] was no ground for refusing specific performance of the written agreement for the lease, where the plaintiff submitted by his bill to pay the 200Z. That case introduced no new principle as to the admissibility of parol evidence " (q). It is to be observed (though the observation is now familiar) that these doctrines are in principle independ- ent of the Statute of Frauds (r). What the fourth sec- tion of the Statute of Frauds says is that in respect of the matters comprised in it no agreement not in writing and duly signed shall be sued upon. This in no way prevents either party from showing that the writing on which the other insists does not represent the real agree- ment; it is only when the real agreement cannot be posi- tively established by a writing which satisfies the re- quirements of the statute that the statute interferes. Then there is nothing which can be enforced at all. The writing cannot, because it is not the real agreement; nor yet the real agreement, because it is not in writing. A good instance of this state -^ of things is Price v. Ley (s). The suit was brought mainly to set aside the written agreement, and so far succeeded. It appears not to have been seriously attempted to insist upon the real agree- ment which had not been put into writing. B. Rectification of Instruments. When the parties to an agreement have determined to embody their common intention in the appropriate and conclusive form, and the instrument meant to effect this purpose is by mistake so framed as not to express the real intention which it ought to have expressed, it is possible in many cases to correct the mistake by means of a jurisdiction formerly peculiar to courts of equity, and still reserved as a matter of procedure, to the Chan- cery Division. Courts of equity " assume a jurisdiction to reform in- struments which, either by the fraud or mistake of the d) 2 D. M. G. 785. q) Per Stuart, V.-C. Price v. Ley, 4 Giff. at p. 253. r) See per Lord Redesdale, in Clinan v. Cooke, 1 Sch. & L. 33- 39. (a) 4 Giff. 235, affirmed on appeal, 32 L. J. Ch.534. IN EXPRESSION : RECTIFICATION. 511 drawer, admit of a construction inconsistent with the true agreement of the parties. 100 And of necessity, in the exercise of this jurisdiction, a court of equity receives evidence of the true agreement in contradiction of the written instrument." Relief will not be refused though the party seeking relief himself drew the instrument; for " every party who comes to be relieved against an agreement which he has signed, by whomsoever drawn, comes to be relieved against his own mistake " (t). The jurisdiction is a substantive and independent one, so that it does not matter whether the party seeking relief would or would not be able to get the benefit of the true intention of the contract by any other form of remedy (w). It would be neither practicable nor desirable to discuss minutely the very numerous cases in which this juris- diction has been exemplified. The most -^- important [ ■^■471] thing to be known about a discretionary power of this kind is whether there is any settled rule by which its exercise is limited. In this case there are ample author- ities to show that there is such a rule, and they expound it so fully that there is very little left to be added by way of comment. The manner in which the Court proceeds is put in a Principles very clear light by the opening of Lord Eomilly's judg- on which ment in the case of Murray v. Parker (x) : — courts of equity will "In matters of mistake, the Court undoubtedly has jurisdic- r ^ ct " v m- tion, and though this jurisdiction is to be exercised with great caution and care, still it is to be exercised in all cases where a deed, as executed, is not according to the real agreement between the parties. In all cases the real agreement must be established by evidence, whether parol or written; if there be a previous agreement in writing which is unambiguous, the deed will be reformed accordingly ; if ambiguous parol evidence may be used to explain it, in the same manner as in other cases where parol evidence is admitted to explain ambiguities in a written instru- ment." In the case of " a previous agreement in writing Previous which is unambiguous" the Court cannot admit parol agreements evidence to rectify the final instrument executed in ac- in "writing cordance with such agreement any more than it could ^^e varied (t) Ball v. Storie, 1 Sim. & St. 210, 219. («) Druiffi). Lord Parker, 5 Eq. 131. (a;) 19 Beav. 305, 308. 100 The reformation of an instrument is made on an application to the equity tribunal for the express purpose, but if in any suit in equity, a contract is set up, the Court may reform it. Smith v. Allen, Saxton, 43 ; Shelby v. Smith, 2 A. K. Marsh, 504. 512 MISTAKE. allow the party to maintain a suit, while the agreement was yet executory, first to rectify the agreement by parol evidence and then execute it as rectified — which, as we have seen, it will not do. For this would be to "reform [the instrument] by that evidence, which if [the instrument] rested in fieri, would be inadmissible to aid in carrying it into execution" (y). This language, it will be seen, is not in terms con- fined to cases within the Statute of Frauds. But it might perhaps well be argued, should the occasion for it ever arise, that no other cases were in fact contem- plated by Lord St. Leonards in giving the judgment now cited. [ -jc 472] -^-If there be no previous agreement in writing, the Oral evidence modern rule is that a deed may be rectified on oral of the real evidence of what was the real intention of the parties admissible* at tlle time ' if clear and uncontradicted - in thecal)- 6 But if tne alleged mistake is positively denied by sence of any any party to the instrument, parol evidence alone is in- other,if not admissible to prove it. The rule is contained in two contradicted. j udgments given by L or d St. Leonards in the Irish Court of Chancery. He said in Alexander v. Crosbie (z): — " In all the cases, perhaps, in which the Court has reformed a settlement, there has been something beyond the parol evidence such for instance as the instructions for preparing the convey- ance or a note by the attorney, and the mistake properly ac- counted for; but the Court would, I think, act where the mistake is clearly established by parol evidence, even though there is nothing in writing to which the parol evidence may attach." What is here meant by " clearly established " is shown by his later statement in Mortimer v. Shortall (a): "There is no objection to correct a deed by parol evi- dence, when you have anything beyond the parol evi- dence to go by. But where there is nothing but the recollection of witnesses, and the defendant by his an- swer denies the case set up by the plaintiff, the plaintiff appears to be without a remedy. Here I am not acting upon parol evidence alone; the documents in the cause, and the subsequent transactions, corroborate the parol ()/) Per Lord St. Leonards, Davies v. Fitton, 2 Dr. & War. 225, 233. (z) LI. & G. temp. Sugden, 145, 150. Cp. Davies v. Fitton, 2 Dr. & War. 233. (a) 2 Dr. & War. 363, 374. IN EXPRESSION : RECTIFICATION. 513 evidence, and leave no doubt in my mind as to a mis- take having been made." m Again, it was said in a case on the equity side of the Court of Exchequer, where the whole subject was con- siderably discussed: " It seems that the Court ought not in any case, where the mis- take is denied or not admitted, by the answer, to admit parol evidence, and upon that evidence to reform an executory agreement " (J). •^- On the other hand, when the mistake is admitted, [ -^ 473] or not positively denied, written instruments have re- peatedly been reformed on parol, evidence alone (c). Thus far as to the nature of the evidence required; What must next let us see what it must prove. It is indispensable De proved: that the evidence should amount to " proof of a mistake common in- common to all the parties " (d) m i. e. a common in- p ar ti eg cliff- tention different from the expressed intention and a erent from common mistaken supposition that it is rightly ex- expressed pressed: it matters not, as we have seen, by whom the mtentlon - actual oversight or error is made which causes the ex- pression to be wrong. The leading principle of equity on the head of rectification, — that there must be clear proof of a real agreement of both parties different from k the expressed agreement, and that a different intention or mistake of one party alone is no ground to vary the agreement expressed in writing, — was distinctly laid down by Lord Hardwicke as long ago as 1749 (e). The same thing was very explicitly asserted in Fowler v. Fowler (/): (5) Per Alderson, B. Atty.-Genl. v. Sitwell, 1 Y. & C. Ex. 559, 583. (c) Townshend v. Stangroom, 6 Vea. 328, 334; Ball v. Storie, 1 Sim. &St. 210; DruiffV Lord Parker, 5 Eq. 131; Ex parte Na- tional Provincial Bank of England,4 Ch. D. 241; Welman v. Wel- man, 15 Ch. D. 570, where a power of revocation appearing in the first draft had been struck out in the instrument as it finally stood, and there was nothing to show how this had happened. (d) Per Lord Eomilly, M. E. Bentley v. Mackay, 31 Beav. at p. 151. («) Henkle v. Eoyal Exch. Assce. Co., 1 Ves. Sr. 318 (/) 4 De G. & J. 250, 264. 101 The mistake must he clearly established by the proofs, which may be either oral or written. Lyman u United Ins. Co., 17 Johns. 373; Montville v. Haughton, 7 Conn. 543; Popplein v. Foley, 61 Mo. 381; Stephens v. Murton, 6 Oregon, 193; Briegel v. Moeller, 82 111. 257; Everts v. Strode, 11 Ohio, 480; Harrison v. Jameson, 3 J. J. Marsh, 232; Huss «. Morris, 13 P. F. Sm. 367; Eigsbee v. Ives, 21 Ind. 227. 102 Nevius v. Dunlap, 33 N. Y. 676; Brainerd v. Arnold, 27 Conn. 617; German Am. Ins. Co. v. Davis, 131 Mass. 316. 33 PRINCIPLES OF CONTRACT. 514 MISTAKE. "The power which the Court possesses of reforming written agreements where there has been an omission or insertion of stipu- lations contrary to the intention of the parties and under a mutual mistake, is one which has been frequently and most usefully ex- ercised. But it is also one which should be used with extreme care and caution. To substitute a new agreement for one which the parties have deliberately subscribed 'ought only to be per- mitted upon evidence of a different intention of the clearest and most satisfactory description. It is clear that a person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the [" JL 4741 alleged intention to which he desires it to be made -^ conform- able continued concurrently in the minds of all parties down to the time of its execution, and also must be able to show exactly and precisely the form to which the deed ought to be brought. For there is a material difference between setting aside an instru- ment and rectifying]it on the ground of a mistake. In the latter case you can only act upon the mutual and concurrent intention of all parties for whom the Court is virtually making a new writ- ten agreement "(g). Proofs of one So it has been laid down by the American Supreme party's in- Court that equity may compel parties to perform their tention will agreement, but has no power to make agreements for parties and then compel them to execute the same (h) ; to the same effecb in Rooke v. Lord Kensington (i) by Lord Hatherley when V.-C. ; and more recently by James, L. J. when V.-C. in Mackenzie v. Coulson (k). On this principle, as we have already seen, the juris- diction to rectify instruments does not extend beyond particular expressions. The Court cannot alter that form of instrument which the parties have deliberately chosen (h). The Court therefore cannot act on proof of what was intended by one party only (I). And when an instru- ment contains a variety of provisions, and some of the clauses may have been passed over without attention, " the single fact of there being no discussion on a par- ticular point will not justify the Court in saying that a mistake committed on one side must be taken to be mutual" (m). The Court will not rectify an instru- ment when the result of doing so would be to affect (g) Pp. 264-5. (ft) Hunt v. Rousmaniere's Adm., 1 Peters, 14, p. 407 above. (i) 2 K. & J. 753, 764. k) 8 Eq. 368, 375. Z) Hill v. Rowland, 4 D. M. G. 430, 436. m) Thompson v. Whitmore, 1 J. & H. 268, 276. not do. IN EXPRESSION : RECTIFICATION. 515 interests already acquired by third parties on the faith of the instrument as it stood (»). Without derogation from the above general rules, a contract of insurance is liberally construed for the pur- pose of reforming the policy founded upon it in accord- ance with the true intention (o). ■fc There exists a rare class of cases (we know of only \ ~fc 475] two complete instances at present, and none in a Court Possible ex- of Appeal) in which the rule that a common mistake ce P tion must be shown may admit of modification. This is ^^ e 0I J? where one party acts as another's agent in preparing an other's instrument which concerns them both — (in both the agents. particular cases referred to an intended husband had the marriage settlement prepared in great haste and without any advice being taken ,on the wife's part) — and that other gives no definite instructions, but relies on the good faith and competence of the acting party to carry out the true intention. Here the acting party takes on himself the duty of framing a proper instru- ment — such an instrument, in fact as would be sanc- tioned by the Court if the Court had to execute the agreement. And the instrument actually prepared, and executed by the other party on the assumption that it is properly framed, may be corrected accord- ingly (p). But cases of this kind would perhaps be better put on the ground that the acting party is estopped by his conduct, having taken on himself a fiduciary relation and duty, from denying that the intention of the other party w'as in fact the common intention of both. Com- pare p. 448 above. The most frequent application of the jurisdiction of Reformation equity to rectify instruments 103 is in the case of mar- ofsettle- riage and other family settlements (q), when there is a meivt ® . . ficcordins to discrepance between the preliminary memorandum or previous articles and the settlement as finally executed. As to articles. (n) Blackie v. Clark, 15 Beav. 595. (o) Equitable Insurance Company v. Hearne, 20 "Wallace (Sup. Ct. TJ. S.) 494. (p) Clark v. Girdwood, 7 Ch. D. 9 on the authority of Corley tf.^Lord Stafford, 1 De G-. & J. 238, where however there was no rectification: a later and very similar case is Lovesy v. Smith, 15 Ch. D. 655. (q) See further on this subject Dav. Corn-. 3, pt. 1 Appx. No. 3. 103 In some cases a court of equity 'will reform the contract, leaving it to stand as amended. Ellinger v. Crowl, 17 Ind. 361; Hitchins v. Pettingill, 58 N. H. 386; Rides v. Powell, 4 Abb. Ap. Dec. 63. 516 MISTAKE. marriage settlements, the distinction was formerly held that if both the articles and the settlement were ante- nuptial, the settlement should be taken in case of vari- ance as a new agreement superseding the articles, un- less expressly mentioned to be made in pursuance of the articles; but that a post-nuptial settlement would always [ -fa 476] be reformed in -fa accordance with ante-nuptial articles. The modern doctrine of the Court has modified this as follows, so far as regards settlements executed after pre- liminary articles but before the marriage. 104 Special rules 1- When the settlement purports to be in pursuance as to this. of articles previously entered into, and there is any vari- ance, the variance will be presumed to have arisen from mistake. 2. When the settlement does not refer to the arti- cles, it will not be presumed, but it may be proved,* that the settlement was meant to be in conformity with the articles, and that any variance arose from a mistake. In the first case the Court will act on the presump- tion, in the second on clear and satisfactory evidence of the mistake (r). A settlement may be rectified even against previous articles on the settlor's uncontradicted evidence of de- parture from the real intention, if no further evidence can be obtained (s). The fact that a provision inserted in a settlement (e. g. restraint on anticipation of the income of the wife's property) is in itself usual and is generally con- sidered proper, is not a ground for the Court refusing to strike it out when its insertion is shown to have been contrary to the desire of the parties and to the instruc- tions given by them (f). There is however a general presumption, in the absence of distinct or complete evidence of actual intention, that the parties intend a (r) Bold v. Hutchinson,. 5 D. M. a. 558, 567, 568. In reform- ing a settlement the intent rather than the literal -words of the articles will be followed: for a late instance see Cogan v. Duffield, (C. A.) 2 Ch. D. 44. As to the general principles on which courts of equity construe instruments creating executory trusts, see Sackville-West v. Viscount Holmesdale, L. E. 4 H. L. 543, 555, 565. (s) Smith v. Iliffe, 20 Eq. 666; Hanley & Pearson, 13 Ch. D. 545. (<) Torre v. Torre, 1 Sm. & G. 518. 104 If a man settles property on a woman, upon the mutual un- derstanding that thereupon she will marry him, the settlement is valid even as against his creditors. Andrews v. Jones, 10 Ala. 400; Woodward v. Id., 5 Sneed (Tenn.), 49; Potts v. Merritt, 14 B. Monr. 406; Finch v. Id., 10 Ohio, 501; Naill v. Maurer, 25 Md. 532. IN EXPRESSION : RECTIFICATION. 517 settlement to contain dispositions and provisions of the kind usual under the circumstances: see pp. 452 — 3 above. It is not necessary that a person claiming to have a At -whose settlement rectified should be or represent a party to the suit recti- P A A no T -^-original contract, or be within the consideration of L « *'^- 478] to both parties; for here the rectification is only an (») Thompson v. Whitmore, 1 J. & H. 268, 273. he) Broun v. Kennedy, 33 Beav. at p. 147. (y) Lister v. Hodgson, 4 Eq. at p. 34. (z) Turners. Collins, 7 Ch. 329, 342; and see per Turner, L. J. Bentley v. Mackay, 4 D. F. J. 286. (a) Supra, p. 430. (6) Harris v. Pepperell, 5 Eq. 1, 5; Garrard v. Frankel, 30 Beav. 445; Bloomer r. Spittle, 13 Eq. 427. Conversely, an agree- ment will not be cancelled at the suit of one party when he has rejected a proper offer to rectify it. It was agreed between A. and B. that A. should give B. the exclusive right of using a patent in certain districts: a document was executed which was only a licence from A. to B. Some time afterwards B. complained that this did not carry out the intention, and A., admitting it, offer- ed a rectification. B. refused this and sued for cancellation. Held that the relief prayed for could not be granted : Laver v. Dennett, 109 TJ. S. 90. 518 MISTAKE. alternative proposal. The Court says to the defendant in effect: Either the agreement between you was such as the plaintiff says it was, or there was no real agree- ment at all. Take which of these two views you please, but it is certain that the terms you have contended for were never agreed to by the plaintiff, and by them at all events he is not to be bound. A proposal was made in writing to let certain floors of a house, and by in- advertence one floor was included which the proposer intended to reserve: this proposal was accepted with- out qualification, and a lease was executed, including the floor which the lessor had intended to reserv^. The lessor, on discovering the mistake, sued for rectification or cancellation in the alternative, on the authority of Harris v. Pepperell, 5 Eq. 1; Bacon, V.-C, holding that the plaintiff had proved what was his own intention, and that the defendant, if his intention was not the same, must have known there was some mistake, gave the defendant the option of having the lease rectified according to the plaintiff's contention, or cancelled: Paget v. Marshall, 28 Ch. D. 225. On principle it seems that in this class of cases relief should be given only where the circumstances exclude the supposition of the mistaken offer having been accepted in reasonable good faith ; and though this point is not very clearly brought out in the language of the authorities, they can hardly be accepted in any other sense. See Tamplin v. James, 15 Oh. D. 215. Mistake in It is sometimes said, but inexactly, that in certain •wills. cases wills may be rectified on the ground of mistake ( c ) . Minor points Actions for the rectification of instruments must be of procedure, assigned to the Chancery Division; but where a state- ment of defence to an action brought in another Division is accompanied by a counterclaim for rectification, this is not a sufficient reason for transferring the action (d). "When a conveyance is rectified the order of the Court is sufficient without a new deed. A copy of the order is indorsed on the deed which is to be rectified (e). (c) On this point see the Appendix, Note M. [d) Storey v. Waddell (C. A.\ 4 Q. B. D. 289 ' (e) White v. White, 15 Eq. 247. MISREPRESENTATION AND FRAUD. 519 * CHAPTER IX. [ * 479] MISREPRESENTATION AND FRAUD. Part 1. — Misrepresentation. The consent of one party to a contract may be caused Misrepresen- by a misrepresentation made by the other of some mat- tation is ter, such that, if he had known the truth concerning fraudulent or it, he would not have entered into the contract. 1 Put- lent ting off for a while the closer definition of the term, we see at once that there is a broad distinction between fraudulent and non-fraudulent misrepresentation. A. statement may be made with knowledge of its false- hood and intent to mislead the other party, or with reckless ignorance as to its truth or falsehood. In either of these cases the making of it is wrongful in a moral and also in a legal sense, and the conduct of the party making it is called Fraud. 2 There has never been any substantial difficulty as to the treatment of such con- duct in English courts of justice. On the other hand a statement which in fact is not true and misleads the other party may be made by mere carelessness or mis- adventure, or with an actual belief in its truth, which belief may or may not be reasonably entertained. The treatment of cases of this kind is far more difficult. Courts of common law and of equity have approached the sub- ject by different methods and with different habits of thought and language: and, though the terminology is becoming much less confused than it was, it cannot yet be said to be settled or exact in general usage. It has 1 Andrews v. ^Etna Life Ins. Co., 85 N. Y. 334; Duell v. Bear River Co. 5 Cal. 84; Connihan v. Thompson, 111 Mass. 270; St. Joseph Mfg. Co. v. Daggett. 84 111. 556; Brant v. Coal. Co., 93 U. S. 326: Plummer v. Mold, 22 Minn. 15; Graves v. Blondell, 70 Me. 190. 2 Fraud may consist in silence as well as in actual out-spoken misrepresentation, but a false representation as a matter of law is no reason for rescinding a contract, because every person is supposed to know the law. Steamboat Belfast v. Boon, 41 Ala. 68; Bigelow on Fraud, 9; Upton v. Tribilcock, 1 Otto, 45; Grant v. Id., 56 Me. 573; Drake v. Latham, 50 111. 270. 520 MISREPRESENTATION AND FRAUD. been affected by complication and'confusion arising from [ -4r 480] more than one -fa source. The most fruitful of these has been the unfortunate use of the term Fraud in the Court of Chancery as nomen generalissimum (a). The probable historical explanation of this habit is that in earlier times it was the only means of extending and completing a beneficial jurisdiction; but in itself it is open to grave objection on practical as 'well as scien- tific grounds (6). After having given us enough and too much of such phrases as "constructive fraud," con- duct "amounting to fraud in the contemplation of a Court of Equity," transactions "fraudulent in the eyes of this Court " (c), and the like descriptions, under which it is possible to bring almost anything (d), it now stands judicially condemned. Lord Bramwell said (as Lord Justice) in the Court of Appeal in 1878: "I do not understand legal fraud. To my mind it has no more meaning than legal heat or legal cold, legal light or legal shade. There can never be a well-founded complaint of legal fraud, or anything else, except where some duty is shown, and correlative right, and some violation of that duty and right., And when these exist it is much better that they should be stated and acted on than that recourse should be had to a phrase illogical and unmeaning, with the consequent uncer- tainty" (e). Legal or constructive fraud, then, may be discarded as a worse than useless figment. 3 Actual fraud, as the less troublesome part of the subject, will be dealt with later. We now have to consider what is the law with regard to statements inducing a contract which are not fraudulent, and in what form it is best expressed. [ -^- 481] -^ A view countenanced by the language to be found View in more than one class of decisions in the Court of suggested by Chancery, if not actually involved in some of these de- equity that cisions, is that under certain conditions a representation («) See 8 Ch. 124. (i) The ambiguous use of the word leads on the one hand to un- founded charges of fraud in the strict sense, and on the other hand to the absence of fraud in that sense being set up in answer to a case which is really of a quite different kind. (o) This language was used in the Court of Appeal as late as 1864; see 4 D. J. S. 328. (d) See the wonderfully miscellaneous contents of the chapters on "Actual Fraud" and "Constructive Fraud" in Story's Eq. Jurisp. (e^ "Weir v. Bell, 3 Ex. D. at p. 243. Cp. Joliffe v. Baker, 11 Q. B. D. 255. 3 Bispham's Equity (4th Ed.), Sec. 205. GENERAL DOCTRINE OF REPRESENTATIONS. 521 which is not operative as part of a contract, or by way of "representa- estoppei, or as amounting to an actionable wrong, may tions " have a still be binding on the person making it. If, having ^Trtfrom induced a contract, the statement turns out to be un- bein°- e le- true, the contract may be voidable, or specific perform- ments in a ance of it may be refused without affecting its validity contract. in other respects; if, without any contract, the party to whom it is made is prejudiced by acting upon it, the party from whom it proceeded may be bound to " make his representation good." 4 As regards the first branch of this proposition, assuming that to some extent it is correct, a doubt remains whether, consistently with the authorities, any general rule can be laid down, or there are only a set of generically similar rules applicable to certain special kinds of contracts. Such rules are be- yond question established in several cases, in which a more or less extensive duty of giving correct informa- tion is imposed on one of the parties. The authorities . neither invite nor forbid a generalization. The Indian Contract Act (s. 18) does generalize the rule (/), and the same course was taken, with a caution that it went beyond positive authority, in the two first editions of this book (g). As to the second branch, the supposed equitable doctrine of " making representations good " has been too often asserted for a text writer to say on his own responsibility that it does not really exist as distinct from the more simple principle that people must perform their contracts. The present writer for- merly felt bound to accept it with an indication of its difficulties (h). A recent judgment to be presently mentioned has cleared the way to greater freedom of criticism. When we consider on principle this kind of doctrine criticism 01 and language as to the effect of representations, the this view. following -^ reflections occur. To say that a man is [^-482] answerable for the truth of statements made by him in good faith is to say that it is his legal duty to see that they are borne out or to make compensation for their not being borne out. Whence and of what nature is this duty ? If the* statement is of a fact, and made as (/) See note O. ( aad P romises on the faith of which mar- riages have been contracted, have been the chief but not the only occasions of those judicial statements which [ ^ 485] appear to ^ ascribe some kind of peculiar force to rep- resentations which are not exactly contracts. There are likewise cases of "representations" accompanying undoubted contracts; and here the questions occur whether the state of facts regarded by equity judges as showing a representation which the party was bound to make good might not equally well in every case — or would not in all probability, by minds trained in the more analytical methods of common-law procedure — have been treated as establishing a collateral promise or warranty, and also whether the judges who used this language really meant anything different. This is not directly connected with the question of the avoidance m) 6 A. &E. 469. Fasley v. Freeman, 3T. R. 51; and in 2 Sm. L. C. 9 Negley v. Lindsay, 17 P. F. Sm. 228; Wood v. Goff, 7 Bush. 63; Lindsay v. Ferguson, 49 N. Y. 625. The injured party must be prompt in setting the transaction aside as laches are not e!h- couraged. Campau v. Vandyke, 15 Mich. 371; Willoughby v. Moulton, 47 N. H. 208; Ackerly v. Vilas, 21 Wis. 88; Jones v Smith, 33 Miss. 215; Badger v. Id., 2 Wallace, 87. 10 Morgana. Eailroad, 96 U. S. 716; Brown v. Wheeler, 17 Conn. 345; Holmes v. Crowell, 73 N. C. 613; Heath v. Derry Bank, 44 N. H. 174. EFFECT OF REPRESENTATIONS. 525 of contracts for misrepresentation; nor is that question discussed by Mr. Justice Stephen. But if it can be maintained that in the one class of cases the so-called " representation" which has to be " made good " is a promise in the strict sense, as an element in a true con- tract, or is nothing, there will evidently be much less difficulty in treating the other class, with which we are here immediately concerned, on similar principles. A fresh examination of the authorities on the subject of " making representations good " has accordingly been undertaken, and has led the writer to the conviction that, notwithstanding the difficulties presented by the form in which many statements of more or less author- ity have been made, the view propounded by Mr. Jus- tice Stephen is the correct one. A review of the cases, the insertion of which in this place would delay us too long in proceeding to the main subject, will be found ' in the Appendix (o). On the whole then we shall say that a representation „ which induces a contract, and is not true in fact, but sentation, which is not such as to create a liability ex delicto, can not fraud- affect the validity or operation of the contract only in ulent . the following cases: — affecting 1. If it is itself a term in the contract; that is, if the musuic' party making it has promised, as part of his promises 1. Part of constituting -fa the contract undertaken by him, that it tne promise, shall be found true. Here, if it proves untrue, the coq- [ it 486 J tract is not avoided, but ' broken : and the other party may be, according to the nature of the case and circum- stances, discharged, or may have a claim for damages. 2. If the contract is made conditional on its truth ; 2. Condition, that is, if the parties mean to contract only on the foot- ing of its being true. Here the statement is said to be a condition. We have already become acquainted with some instances of such conditions under the heads of Impossibility and Mistake. From both these cases must be distinguished that of "Warranty a distinct collateral agreement that a representation distinguish- shall be true, so that its untruth, if so it prove, shall in edi no case avoid the contract, but shall be matter for compensation. Such an agreement is called a war- ranty (p). (0) Note N. ' (p) The use of the terms "warranty" and "condition" has been unsettled. A condition as defined in the text is sometimes called a "warranty in the nature of a condition " (see 8 E. & B. 302, per Channell, B. ). But it is obviously desirable that techni- cal terms, if used at all, should be used with an exact and con- stant meaning. 526 MISREPRESENTATION AND FRAUD. 3. Material within rules as to special kinds of contracts. Contracts specially treated. [*487] 3. If it falls within the special rules laid down as to the effect of representations inducing or accompanying particular classes of contracts. The contracts which are ' thus exceptionally treated are the following. It will be observed that, as we have already said, the common mark which makes them for this purpose a special class is that the subject-matter of the contract, or a material part of it, is within the peculiar knowledge of one party, and the other has to rely, in the first instance at all events, on the correct- ness of the statements made by him. (A) Marine insurance. (B) Fire insurance. (C) Suretyship. (D) Sales of land. (E) Family settlements. (F) The contract of partnership, and thence, by analogy, -fa contracts to take shares in companies and contracts of promoters (q). We proceed to follow out the topics now indicated in the order above given. And first we must say some- thing of representations which amount to a condition or a warranty. Warranty and con- dition. Representations amounting to Warranty or Condition. The law on this subject is to be found chiefly in the decisions on the sale of goods ; the principles however are of general importance, and not without analogies, as we shall presently see, in other doctrines commonly treated as quite peculiar to equity. We therefore men- tion the leading points in this place, though very briefly. In the first place a buyer has a right to ex- pect a merchantable article answering the description in the contract (r) ; " but this is not on the ground of warranty, but because the seller does not fulfil the con- tract by giving him something different. "If a man offers to buy peas of another and he sends him beans, he does not perform his contract ; but that is not a war- ts) It is not easy to say whether this last extension would have been adopted by courts of common law before the Judicature Acts. Kennedy v. Panama, &c. Mail Co., L. B. 2 Q. B. 580, p. 427, above, seems against it; but the question was not there fairly raised, nor is it now of any practical importance. {r) Jones v. Just, L. R. 3 Q. B. 197, 204. 11 Moore v. McKinley, 5 Cal. 471; Fisk v. Eoseberry, 22 111 288; Howard v. Hoey, 23 Wend. 350. WARRANTEES AND CONDITIONS. 527 ranty ; 12 there is no warranty that he should sell him peas ; the contract is to sell peas, and if he sends any- thing else in their stead it is a non-performance of it" (s). So that, even if it be a special term of the contract that the buyer shall not refuse to accept goods bought by sample on the score of the quality not being equal to sample, but shall take them with an allowanc, he is not bound to -fa accept goods of a different kind (t). [ ^ 488] It is open to the parties to add to the ordinary descrip- tion of the thing contracted for any other term they please, so as to make that an essential part of the con- tract : a term so added is a condition. If it be not ful- filled, the buyer is not bound to accept or keep the goods even if there has been a bargain and sale of specific goods (w). ls When specific goods have been sold with a warranty the buyer cannot reject them (x), but may obtain compensation by way of deduction from the price, or by a cross action (y). "When there has been a sale with a warranty of goods not in existence or not ascertained, and the warranty is broken, the buyer may refuse to accept the goods, and this after keeping them, if necessary, for a time reason- ably^ sufficient for trial or examination, provided he has not exercised further acts of ownership over them (z). (s) Lord Abinger, C.B. in Chanter v. Hopkins, 4 M. & W. 399, 404; "as sound an exposition of the law as can be," per Martin, B. Azemar v. Casella (Ex. Ch.), L. E. 2 C. P. 677, 679. There is a class of cases, however, in which it is commonly, and per- haps conveniently, said that there is a warranty that the goods shall be merchantable besides the condition that they shall answer the description : Mody v. Gregson, L. R. 4 Ex. 49. (t) Azemar v. Casella, L. R. 2 C. P. 431, in Ex. Ch. 677. (u) Benjamin on Sale, 596 sqq. (x) Hayworth v. Hutchinson, L. R. 2 Q. B. 447, but as to the application of the rule in the particular case see Benjamin, pp. 896-8. (y) The reduction of the price can be only the actual loss of value : any further damages must be the subject of a counter- claim (under the old practice a separate action) : Mondel v. Steel, 8M.&W. 858, 871. (a) Heibutt v. Hickson, L. R. 7 C. P. 438, 451 ; Indian Contract Act, s. 118. It is not the buyer's duty to send the goods back : it is enough for him to give a clear notice that they are not ac- 12 An assertion made by the vendor with regard to the thing sold, for the purpose of influencing the purchaser and inducing him to buy, is a warranty if so understood, and relied upon by the purchaser. Morrill v. Wallace, 9 N. H. Ill; Claghorn v. Singo, 62 Ala. 230; Pennock c. Stygles, 54 Vt. 226; Henshaw v. Robins, 9 Met. 83; and see Smithers v. Bircher, 2 Mo. Ap. 499; McClure v. Williams, 65 111. 390; Chapman v. Murch, 19 Johns. 290. 13 Young v. White, 5 Watts, 460; Cash v. Hinkle, 36 Iowa, 623; Norrington v. Wright, 115 U. S. 188. 528 MISREPRESENTATION AND FRAUD. [*489] Marine insurance: duty of disclosure. This appears at first sight to put a warranty on the same footing as a condition where the sale is not of specific goods : but the true explanation is that given by Lord Abinger — that the tender of an article not cor- responding to the warranty is not a performance of the contract. The warranty retains its peculiar effect in this, that if the buyer chooses to accept the goods, he has a distinct collateral right of action on the war- ranty ; " whereas if there is a condition but not a war- ranty the party may indeed insist on the condition, but if he accepts performance of the contract without it he may have no claim to compensation. Whether any term of a contract is in fact a condition ora ^ warranty is a question of construction depending on the language used and to some extent on the nature and circumstances of the transaction (a). Similar questions have not unfrequently arisen on the construction of charter-parties. Thus in Behn v. Bur- ness (b) it was agreed that the plaintiff's ship "now in the port of Amsterdam" should go to an English port and load a cargo of coals. The ship did not in fact reach the port of Amsterdam till some days after the date of the contract. It was held that the description of her as in the port of Amsterdam was a condition, and that by its non-fulfilment the defendant was dis- charged from his obligation to load a cargo. We pass on to the contracts above mentioned as under excep- tional rules. A. Marine Insurance. The law as to the contract of marine insurance is peculiar. Not only misrepresentation but conceal- ment (c) of a material fact, "though made without cepted, and then it is the seller's business to fetch them : Grim- oldby v. Wells, L. R. 10 C. P. 391, 396. (a) An instructive case of a simple affirmation amounting un- der special circumstances to a condition is Bannerman v. "White, 10 C. B. N. S. 844, 31 L. J. C. P. 28; Benjamin on Sale, 598; Anson, Law of Contract, 142. (6) 3 B. & S. 751, 32 L. J. Q. B. 204. Was the charter-party void or only voidable? See O. W. Holmes, The Common Law, 329. I submit that it was void, but the plaintiff would have been estopped from showing that his own statement that his ship was in the port of Amsterdam was not true. Cp. pp. 448-9, above. (c) This is the usual word, but non-disclosure would be more accurate. 14 See Smith ^.Harris, 12 111. 462; Whitmoreu Coates, 14 Mo. 9; Blanehard i>. Ely, 21 Wend. 342; Fessler v. Love, 12 Wright (Pa.), 407, and Hastings v. Lovering, 2 Pick. 214; Mixer v. Co- burn, 11 Met. 559; Ketchum v. Wells, 19 Wis. 26; Wolcott v Mount, 36 N. J. L. 262; Dailey v. Green, 3 Harris, 118. MARINE INSURANCE. 529 any fraudulent intention, vitiates the policy" (d), that is, makes it voidable at the underwriter's election (e). ' For this purpose a material fact does not, on the one hand mean only such a fact as is "material to the risks considered in their own nature"; nor on the other hand does it include everything that might influence the un- derwriter's judgment: the rule is "that all should be disclosed which would affect the judgment of a rational underwriter governing himself by the principles and -^•calculations on which underwriters do in practice [ -^ 490] act" (/). The only exception is that the insured is not bound to communicate anything which is such mat- ter of general knowledge that he is entitled to assume the underwriter knows it aleady (g) : and the obligation extends not only to facts actually within the knowledge of the assured, but to facts which in the ordinary course of business he ought to know, though by the fraud or negligence of his agent he does not know then (ft)- 15 These rules have in modern times at any rate been uniformly treated both at law and in equity as deter- mined by the exceptional and speculative nature of this particular contract, and not affording ground for any conclusions of general law. That they do not apply to Distinctions the contract of life insurance is clear from the judg- & s to life ments in the Exchequer Chamber in Wheelton v. Har- disty (i), though a different opinion formerly prevailed, (d) Ionides v. Pender, L. R. 9 Q. B. 531, 537; 2 Wms. Saund. 555-9. (e) See Morrison v. Universal Marine Insurance Co.,L. R. 8 Ex. 197, 205. (/) Parsons on Insurance, adopted per Cur. Ionides v. Pender, L. JR. 9 Q. B. at p. 539. What falls within this description is a question of fact: Scribley v. Imperial Marine Insurance Co., 1 Q. B. D. 507. And the policy will be vitiated by concealment of a fact material to guide the underwriter's judgment, though not material to the risk insured against in itself: Kivaz v. Gerussi (C. A.), 6 Q. B. D. 222. (g) Morrison v. Universal Marine Insurance Co., L. E. 8 Ex. 40. (ft) Proudfoot v. Montefiore, L. E. 2 Q. B. 511. But non-dis- closure by an agent of the assured, without fraudulent intention, avoids the policy only to the extent of the loss or risk arising from the particular facts so withheld: Stribley v. Imperial, &c. Co.. supra. (t) 8 E. & B. 232, in Ex. Ch. 285; 2(3 L. J. Q. B. 265, 27 ib. 241; see especially those of Crowder, J. and Martin and Bramwell, BB. Lindenau v. Desborough, 8 B. & C. 586, is virtually over- ruled by this. 15 For the rules of construction applied to policies of marine insurance, see, Roe v. Columbus Ins. Co., 17 Miss. 301; Libby v. Gage, 14 Allen, 261 ; Savage v. Corn Exchange, etc. Ins. Co., 4 Bosw. (N. Y.) 1; Orient Ins. Co. v. Wright, 23 How. (U.S.) 401. 34 PRINCIPLES OF CONTRACT. insurance. 530 MISREPRESENTATION AND FRAUD. and in this very case was not contradicted ir± the Court be- low. Practically life policies are almost always framed with some sort of express reference to the statements made by the assured as to the health and circumstances of the life insured. Not unfrequently it is provided that the declaration of the assured shall be the basis of the contract; and if the declaration thus made part of the contract is not confined to the belief of the party, but is positive and unqualified, then the contract is avoided by any part of the statement being in fact untrue (k), [ if 491] though not to the knowledge of + the assured (I), or by the concealment of any material fact (to). Where the insurance is on the party's own life, however, any un- true answer given by himself to such questions as are usually asked by insurance offices would be almost necessarily known to be untrue, and therefore fraudu- lent apart from any special conditions. Where a third person insures, he on whose life the insurance is made (usually called "the life") cannot be treated as the agent of the assured, and false statements made by him or his referees cannot "be pleaded as a fraud entitling the insurer to cvoid the contract (n). The case of Atty.-Oen. v. Ray belongs to the class here considered: the grant of a life annuity by the Commissioners for the Reduction of the National Debt Tvas set aside at the suit of the Crown, the age of the life having been mis-stated; not so much on the ground of misrepresentation simply, as because, considering the statutory powers and duties of the commissioners, " it was an essential part of the contract itself that the representation should be true" (o). (k) It Deed not be shown thatthe particular mis-statement was material: Anderson v. Fitzgerald, 4 H. L. C. 484. Cp. Thomson v. Weems (Sc), 9 App. Ca. 671. (?) Macdonald v. Law Union Insurance Co., L. R. 9 Q. B. 328. (m) London Assurance v. Mansel, 11 Ch. D. 363. Probably a material fact means for this purpose a fact such that its conceal- ment makes the statement actually furnished, though literally true, so misleading as it stands as to be in effect untrue. (m) Wheelton v. Hardisty, supra. The learned, editor of Smith's Mercantile Law (402, 8th ed. ) seems to understand the case as deciding this point only, and treats Lindenau v. Des- borough as still law; but the case of marine insurance was ex- pressly distinguished, and the ground of the decision in the Ex. Ch. was distinctly "that there was no express stipulation in the policy that made the accuracy of the statements the basis of the contract:" per Blackburn, J., L. B. 9 Q. B. 33?. In London Assurance v. Mansel, 11 Ch. D. 303, Lindenau v. Desborough was relied on by counsel and the Court; but Wheelton v. Hardisty was not cited. (o) 9 Ch. 397, 407, per Mellish, L. J., expressly comparing the FIRE INSURANCE. 531 B. Fire Insurance. Fire in- mi . , . . ... . . , . surance. inis contract is for similar reasons treated in some- what the same way as that of marine insurance (which it resembles -^ in being a contract of indemnity (p), [ -^ 492] though not to the same extent. The description of the insured premises annexed to a fire policy amounts to a warranty (or rather a condition) that at the date of the policy the premises correspond to the description, or at least have not been altered so as to increase the risk; and also that during the time specified in the policy the assured will not voluntarily make any alteration in them such as to increase the risk. The description must be the basis of the contract, for the terms of insurance can be calculated only on the supposition that the description in the policy shall re- main substantially true while the risk is running (q). 1 * There are dicta in the books which seem to extend the analogy to marine insurance beyond this; but it is conceived that since WheeUon v. Hardisty (last page) they cannot be relied on. The effect of a misdescription of the goods in a bill Description of lading, apart from any fraudulent intention, e. g. of of goods in avoiding payment of a higher rate of freight, is not J^ 1 . of precisely settled: but it seems that at most it would a lug ' c ' limit the carrier's liability to what the value of the goods would be if the description were correct (r)." case of a life policy where the representations of the assured are made the basis of the contract. (p) Darrell v. Tibbitts (C. A.), 5 Q. B. D. 560. (?) Sillem v. Thornton, 3 E.' & B. 888, 23 L. J. Q. B. 362; where it was held accordingly that the addition of a third story to a house described as being of two stories was a material alter- ation, and discharged the insurer: and see further, as to what amounts to material misdescription, Forbes & Co. 's claim, 19 Eq. 485. (r) Lebeau v. General Steam Navigation Co. , L. E. 8 C. P. 88. 16 Contracts of insurance call for the exercise of mutual good faith, and the insurer has a right to presume that the assured has made known to him all the facts material to the risk which are within his knowledge; and any concealment of material facts known to the assured and which the insurer is not bound to know avoids the policy. Fisk v. N. E. Ins. Co., 15 Pick. 310; Howell v. Ins. Co., 7 Ohio, 276; Burritt v. Saratoga Ins. Co., 5 Hill (N. Y.) 189; Ban day v. Union Ins. Co., 2 Wash. (U. S. C. C.) 391; Ingraham v. Ins. Co., Ireadw. (S. C.) 707. " A person offering to sell goods to another, yet accidentally misdescribes them, is bound by the description should the other, not suspecting the error, accept the offer. Lynch's Appeal, 1 Out, (Pa.) 349; Carlisle v. Barker, 57 Ala. 2C7; McFerran v. Taylor, 3 Cranch, 270. 532 MISREPRESENTATION AND FRAUD. [•493] Suretyship. Misrepre- sentation avoids contract. Surety is entitled to know real nature of transaction. At common law the concealment of the true value of goods was held to excuse a common carrier for any- thing, short of actual misfeasance, at all events if he had given notice that he would accept valuable parcels only on special terms (s) : but this matter is now reg- ulated by statute (t). •fa C. Suretyship. It is laid down that a surety is released from his obligation by any misrepresentation, or concealment amounting to misrepresentation, of a material fact on the part of the creditor (u). The language used in different cases is hardly consistent: the later decisions establish, however, that the rule is not parallel to that of marine insurance. The contract of suretyship " is one in which there is no universal obligation to make disclosure " (x). The creditor is not bound to volun- teer information as to the general credit of the debtor or anything else which is not part of the transaction itself to which the suretyship relates: and on this point there is no difference between law and equity (y). But the surety is entitled to know the real nature of the transaction he guarantees and of the liability he is undertaking; and he generally and naturally looks to the creditor for information on this point, although he usually is acting at the debtor's request and as his friend, and so relies on him for collateral information as to general credit and the like. In that case the creditor's description of the transaction amounts to, or is at least evidence of, a representation that there is nothing further that might not naturally be expected to take place between the parties to a transaction such as described. Whether a circumstance not disclosed is such that by implication it is represented not to exist depends on the nature of the transaction and is gener- ally a question of fact (z). Thus where the surety - The point decided is that the addition of the words "Weight, value, and contents unknown" by the shipowner is an entire waiver of the description. (s) Batson v. Donovan, 4 B. & Aid. 21. [t) Smith, Merc. Law, 279 sqq. («) Eailton v. Mathews, 10 CI. & F. 934. (x) Fry, J., Davies v. London and Provincial Marine Insurance Co., 8 Ch. D. at p. 475. {y) Pledge v. Buss, Johns. 663; Wythes v. Labouchere, 3 DeG. & J. 593, 609, approving North British Insurance Co. v. Lloyd, 10 Ex. 523, 24 L. J. Ex. 14. (a) Lee v. Jones, 14 C. B. N. S. 386, in Ex. Ch. 17 C. B. N. S. 482, 503, 34 L. J. C. P. 131, 138 which may be taken as a judicial SURETYSHIP. 533 ship was for a cash credit opened with the principal debtor by a bank, and the cash credit was in fact ap- plied to pay off an old debt to the bank, the House of Lords held that the bank was not bound to disclose this, no actual agreement -^- being alleged or shown [ -fa 494] that the money should be so applied, and that the thing being one which the surety might naturally expect to happen (a). So the creditor is not bound to tell the surety that the proposed guaranty is to be substituted for a previous one given by another person (6). But the surety is not liable if there is a secret agreement or arrangement which substantially varies the nature of the transaction or of the liability to be undertaken: as where the surety guarantees payment for goods to be sold to the principal debtor, but the real bargain, concealed from the surety, is that the debtor shall pay for the goods a nominal price, exceeding the market price, and the ex- cess shall be applied in liquidation of an old debt (c): or where the loan to be guaranteed is obtained not in the ordinary way, but by an advance of trust funds of which the principal debtor himself is a trustee (d). In Lee v. Jones (e) there was a continuing guaranty of an agent's liabilities in account with his employers. He was in fact already indebted to them beyond the whole amount guaranteed by the surety's agreement, which was so worded as to cover existing as well as future liabilities. The surety was not informed of this, and the recitals in the agreement, though not positively false, were of a misleading and dissembling character. The majority of the Court of Exchequer Chamber held that there was evidence of "studied effort to conceal the truth " amounting to fraud. And on the whole it appears from this case and Railton v. Mathews (/) that the concealment from the surety of previous defaults of the principal debtor, when there is a continuing guar- anty of conduct or solvency, is in itself evidence of fraud. Where a person has become a surety on the commentary on the rule given in Hamilton v. Watson, 12 CI. &. F. 109. (a) Hamilton v. Watson, 12 CI. & F. 109; ace. Pledge v. Buss, Johns. 663. (b) North British Insurance Co. v. Lloyd, 10 Ex. 523, 24 L. J. Ex. 14. (c) Pidcock v. Bishop, 3 B. & C. 605; I. C. A. s. 143, illust. 6. (d) Squire v. Whitton, 1 H. L. C. 333, decided, however, chiefly on the broader ground that there cannot be a contract of surety- ship in blank, for no creditor was ever named or specified to the surety. (e) 17 C. B. N. S. 482, 34 L. J. Ex. 131. (/) 10 CI. & F. 934. 534 MISREPRESENTATION AND FRAUD. [ -jc 495] ~jf faith of the creditor's representation that another will become co-surety, he is not bound if that other person does not join; and in equity it makes no differ- ence that the guaranty was under seal (fir). Where a guaranty was given to certain judgment creditors in consideration of their postponing a sale under an exe- cution already issued against the principal debtor, but in fact they did not stop the sale, being unable to do so without the consent of other persons interested, it was held that the guaranty was inoperative (h); bat per- haps this case is best accounted for as one of simple failure of consideration; for the consideration for the guaranty was not merely the credit given to the principal debtor, but the immediate stopping of the sale. Beyond this The authorities, taken as a whole, establish that as no positive between creditor and surety there is in point of law no duty to give positive duty to give information as to the relations be- ui orma ion. ^ ween foe creditor and the principal debtor, but the surety is discharged if there is actual misrepresenta- tion, and that silence may in a particular case be equiv- alent to an actual representation, whether it is so being a question of fact (i). So far as these rules attach special duties to the creditor they do not apply to a mere contract of indemnity (k). Sales of land: contract voidable for material misde- scription. [*496] D. Sales of Land. A misdescription materially affecting the value, title or character of the property sold will make the contract voidable at the purchaser's option, and this notwith- standing special conditions of sale providing that er- rors of description shall be matter for compensation only. Flight v. ~j{ Booth (I) is a leading case on this subject. The contract was for the sale of leasehold property, and the lease imposed restrictions against carrying on several trades, of which the particulars of (g) Rice v Gordon, 11 Beav. 265; Evans v. Bremridge, 2 K. & J. 174, 8 D. M. G. 100. The rule does not apply if the surety's remedies are not really diminished: Cooper v. Evans, 4 Eq. 45, ■where the principal debtor had not executed the bond, but had executed a separate agreement under seal. (ft) Cooper v. Joel, 1 D. F. J. 240. (») Cp. I. C. A. ss. 142-144. S. 143: "Any guarantee which the creditor has obtained by means of keeping silence as to a material circumstance is invalid," is probably not intended to go beyond the English law. (k) Way v. Hearn, 13 C. B. N. S. 292; 32 L. J. C. P. 34; but the point of that case is rather that there was no misrepresenta- tion dans locum contractui. (Z) 1 Biiig. N. C. 370, 377. SALES OF LAND : COMPENSATION. 535 sale named only a few: it was held that the purchaser might rescind the contract and recover back his deposit. Tindal, O. J. put the reason of the case on exactly the same grounds which, as we shall immediately see, have been relied on in like cases by courts of equity. " Where the misdescription, although not proceeding from fraud, is in u material and substantial point, so far affecting the subject-matter of the contract that it may reasonably be supposed that but for such misdescription the purchaser might never have entered into the contract at all, in such case the contract is avoid- ed altogether, and the purchaser is not bound to resort to the clause of compensation. Under such a state of facts the pur- chaser may be considered as not having purchased the thing which was really the subject of the sale." So in Phillips v. Caldcleugh (m), where the contract was for the sale of "a freehold residence" — which means free of all incumbrances (m) — and it appeared that the property was subject to restrictive covenants of some kind, the purchaser was held entitled to re- scind, though the covenants were in a deed prior to that fixed by the contract as the commencement of the title. Questions of this kind arise chiefly in suits for spe- gr, ec ;g c cine performance between vendors and purchasers of performance real estate, when it is found that the actual tenure, and corn- quantity, or description of the property varies from pensation. that which was stated in the contract. The effect of the conditions of sale in the particular instance has almost always to be considered, and the result of the varience may be very different according to these, and according to the amount and importance of the discrep- ance between the description and the fact (n). A com- plete or nearly complete system of rules has been gradually established by the Court of Chancery. *fc (i.) " If the failure is not substantial, equity will [ ~j{ 497] interfere " and enforce the contract at the instance of Where either party with proper compensation (o). The pur- ^"sub- chaser, " if he gets substantially that for which he bar- stantial, gains, must take a compensation for a deficiency in the contract value" (p). Here the contract is valid and binding on enforceable, both parties, and the case is analogous to a sale of C(mi ™g a _ specific goods with a collateral warranty. tion, at suit (m) L. R. 4 Q. B. 159, 161. of either (n) See authorities collected on the subject generally, Dart, V. P art y* & P. 134 sqq., 644, 654, 1055, 1067 sqq. (o) Halsey v. Grant, 13 Ves. 73, 77. (p) Dyer v> Hargrave, 10 Ves. 506, 508. 536 MISREPRESENTATION AND FRAUD. Where variance substantial and capable of pecuniary estimation, party misled may rescind contract, or enforce it with com- pensation. [*498] fii. ) There is a second class of cases in which the contract is voidable at the option of the purchaser, so that he cannot be forced to complete even with compen- sation at the suit of the vendor, but may elect either to be released from his bargain or to perform it with com- pensation. " Generally speaking, every purchaser has a right to take what he can get, with compensation for what he cannot get" (q), even where he is not bound to accept what the other has to give him (r). However a purchaser's conduct may amount to an affirmation of the contract and so deprive him of the right to rescind, but without affecting the right to com- pensation (s); again, special conditions may exclude the right to insist on compensation and leave only the right to rescind (f). Under this head fall cases of misdescription affecting the value of the property, such as the statement of the existence of tenancies, not showing that they are under leases for lives at a low rent (u) ; or an unqualified state- ment of a^ recent occupation at a certain rent, the letting value of the property having been meanwhile ascertained to be less, and that occupation having been peculiar in its circumstances (x) ; or the description of the vendor's interest in terms importing that it is free from incumbrances — such as " immediate absolute re- version in fee simple" — where it is in fact subject to un- disclosed incumbrances (y). The treatment of this class of cases in equity is analogous to the rules applied at common law to the (q) Hughes v. Jones, 3 D. F. J. 307, 315: Leyland v. Illing- worth, 2 D. F. J. 248, 252. (r) " If a person possessed of a term for 100 years contracts to sell the fee he cannot compel the purchaser to take, but the pur- chaser can compel him to convey the term." Per Lord Eldon, Wood v. Griffith, 1 Swanst. at p. 54 (though in this case not with compensation, see next page): and see Mortlock v. Buller, 10 Ves. 292, 315. (s) Hughes v. Jones, supra. (t) Cordingly v. Cheeseborough, 3 Giff. 496, 4 D. F. J. 379, where the purchaser claiming specific performance with compen- sation, and having rejected the vendor's ofler to annul the con- tract and repay the purchaser his costs, was made to perform the contract unconditionally. See further as to the effect of condi- tions of this kind Mawson v. Fletcher, 6 Ch. 91. (a) Hughes v. Jones, 3 D. F. J. 307. (x) Dinimoek v. Hallett, 2 Ch. 21. (y) Torrance v. Bolton, 8 Ch. 118. Of the peculiar character ' of the non-disclosure in that case presently. Cp. Phillips v. Caldcleugh, L. K. 4 Q. B. 159,p. 510, above. As to the proper mode of assessing compensation in a case of misstatement of profits, see Powell v. Elliot, 10 Ch. 424. SALES OF LAND : WHERE NO COMPENSATION. 537 sale of goods not specifically ascertained by sample or with a warranty: see p. 488, above. The doctrine that a vendor who has less than he Exceptions, undertook to sell is bound to give so much as he can give with an abatement of the price applies, it is to be understood, only where the vendor has contracted to give the purchaser something which he professed to be, and the purchaser thought him to be, capable of giv- ing. "Where a husband and wife had agreed to sell the wife's estate (her interest being correctly described and known to the purchaser), and the wife would not con- vey, the Court refused to compel the husband to convey his own interest alone for an abated price (z). Also the Court will not order vendors who sell as trustees to perform their contract with compensation, on account of the prejudice to the cestui que trust which might ensue (a). It is now settled (after many conflicting decisions Purchaser and dicta) that a purchaser otherwise entitled to com- can recover pensation can recover it after he has taken a convey- compensa- ance and paid the purchase-money in full (b). completion -fa (iii.) But lastly the variance may be so material [ -fa 499] (either in quantity, or as amounting to a variance in Where kind) as to avoid the sale altogether and to prevent not variance not merely the general jurisdiction of the Court as to com- gg^ a ti° n pensation, but even special provisions for that purpose, op tion to from having any application. u If a man sells freehold rescind land, and it turns out to be copyhold, that is not a case simply, for compensation (c); so if it turns out to be long leasehold, that is not a case for compensation; so if one sells property to another who is particularly anxious to have the right of sporting over it. and it turns out that he cannot have the right of sporting because it belongs to somebody else ... in all those cases the Court (z) Castle )■. Wilkinson, 5 Ch. 534. In a late case where the husband had the reversion in fee after a life interest to the wife, specific performance with compensation was granted: Barker v. Cox, 4 Ch. D. 464; sed qu. (a) White v. Cuddon, 8 CI. & F. 766. (b) Palmer v. Johnson (C. A.), 13 Q. B. D. 351. See the former cases there discussed. (c) And conversely, a man who buys an estate as copyhold is not bound to accept it if it is in fact freehold. For "the motives and fancies of mankind are infinite; and it is unnecessary for a man who has contracted to purchase one thing to explain why he refuses to accept another:" Ayles v. Cox, 16 Beav. 33. As to leaseholds, it is a settled though perhaps not a reasonable rule that a contract to sell property held under a lease is prima facie a contract to show title to an original lease: Camberwell and S. London Building Society v. Holloway, 13 Ch. D. 754. 538 MISREPRESENTATION AND FRAUD. simply says it will avoid the contract, and will not allow either party to enforce it unless the person who is prejudiced by the error be willing to perform the contract without compensation" (d). Where particulars of sale were misleading as to the boundaries and front- age of the land sold, North, J., held the purchaser entitled to unconditional rescission : Brewer v. Brown, 28 Ch. D. 309. A failure of title as to a part of the property sold which, though small in quantity, is im- portant for the enjoyment of the whole, may have the same effect, (e). This class of cases agrees with the last in the contract being voidable at the option of the •party misled, but it differs from it in this, that if he elects to adopt the contract at all he must adopt it un- conditionally, since compulsory performance with com- pensation would here work the same injustice to the one party that compulsory performance without com- pensation would work to the other. Such was the result in the case now cited of the real quantity of the property falling short by nearly one-half of what it [-^■500] had been supposed to be (/). But in -jfc- a later case where the vendors were found to be entitled only to an undivided moiety of the property which they had pro ■ f essed to sell as an entirety, the Court found no difficulty in ordering specific performance with an abatement of half the price at the suit of the purchaser, as no injustice would be done to the vendors, who would be fully paid for all they really had to sell (g). The real question is (d) Earl of Durham v. Legard, 34 Beav, 611. le) Arnold v. Arnold (C. A.), 14 Ch. D. 270. (/) The price asked had been fixed by reference to the rental alone. Qu. how the case would have stood could a price propor- tional to the area have been arrived at. And see Swaisland v. Dearsley, 27 Beav. 430 (where it is left doubtful whether the purchaser could or could not have enforced the contract with compensation). Cp. D. 18. 1. de cont. empt. 22-24, enunciating precisely the same principle as that applied by our courts of equity. Hanc legem venditionis: Si quid sacri vel rcligiosi est, eiusvenit nihil, supervacuam non esse, sea ad modicaloca pertinere: ceterum si omne religiosum, vel sacrum, vel publicum venierit, nullam esse emptionem: and see end. tit. 18. 40 pr. In Whitte- more v. Whittemore, 8 Eq. 603, a case of material deficiency in quantity, it was held that a condition of sale providing generally that errors of description should be only matter of compensation did apply, but another excluding compensation for errors in quantity did not; so that on the whole the purchaser could not rescind, but was entitled to compensation. (g) Bailey v. Piper, 18 Eq. 683; Horrocks r. Eigby, 9 Ch. D. 180, where the moiety was so incumbered that the vendor in the result got nothing but an indemnity: AVheatley v. Slade, 4 Sim. 126, is 'practically overruled by these cases. Similarly as to leasehold, Burrow v. Scammell, 19 Ch. D: 175, where apparently SALES OF LAND : WHERE NO COMPENSATION. 539 whether the deficiency is such as to be fairly capable of a money valuation (h). It seems that where it is in Where it is the vendor's power to make good the description of the in vendor's property, but not by way of money compensation, it P ow er to may be in his option to perform the contract with the ^^ g ° od non-pecuniary compensation applicable to the circum- tationjf 63611 " stances or to treat it as rescinded. In Baskcomb v. Beck- qusera. ' with (i) a lot of building land (part of a larger estate intended to be sold together) was sold under restrictive conditions as to building, and in particular that no public-house was to be built; the purchaser assumed from the plan and particulars of sale, and in the opinion of the Court with good reason, that the whole of the adjoining property would be subject + to like [ -^ 501] restrictions. One small adjacent plot had in fact been reserved by the vendor out of the estate to be sold, so that it would be free from restrictiye covenants; but this did not sufficiently appear from the plan. The vendor sued for specific performance. It was held that he was entitled at his option to a decree for specific performance, on the terms of entering into a restrictive covenant including the reserved plot, or to have his bill dismissed (k). Jt is difficult to see why the option should not have been with the purchaser. The vendor had the means of performing what must be taken to have really been his contract (for a man cannot be heard to say that the natural construction and meaning of the contract he proposes, whether by a verbal des- cription of the subject-matter, or by words helped out by map3 or other symbols, is not the meaning he in- tended: accipiuntur fortius contra prof erentem (I) : and it might have been a not unsound or unjust conclusion to hold that he was simply bound to perform it. This third class of cases may be compared (though not exactly) to a sale of goods subject to a condition or "warranty in the nature of a condition," so that the sale is "to be null if the affirmation is incorrect'' (m). A purchaser who in a case falling under either of the Bailey v. Piper was overlooked. Maw v. Topham, 19 Beav. 576, is distinguishable, as there the purchaser knew or ought to have known that a good title could not be made to the whole. (h) See Dyer v. Hargrave, 10 Ves. at p. 507; and on the dis- tinction of the different classes of cases generally, per Amphlett, B. Phillips v. Miller, L. R. 10 C. P. 427-8. (*) 8 Eq. 100 (1869, before Lord Romilly, M. R.). (k) The case comes very near Bloomer v. Spittle, 13 Eq. 427, and others of that class, explained pp. 430, 477, above. (I) 2 Sm. L. C. 525 (7th ed.); D. 2. 14. de pactis, 39; D. 18. 1. de cont. empt 21. (to) Bannerman v. White, 10 C. B. N. S. 844; 31 L. J. C. P. 28. 540 MISREPRESENTATION AND FRAUD. Deposit, &c, recoverable in equity as well as at law. [*502] General duty of vendor to give correct description. Concealment in particu- lars not excused by correct statement in conditions only read out at the sale: Torrance v. Bolton. last two heads exercises his option to rescind the con- tract may sue in the Chancery Division to have it set aside, and recover back in the same action any deposit and expenses already paid under the contract (n). And it seems that there is an independent right to sue in equity for the return of the deposit and expenses, at all events if there are any accompanying circumstances to afford ground for -fr equitable jurisdiction, such as se- curities having been given of which the specific restitu- tion is claimed (o). To return to the more general question, it is the duty of the vendor to give a fair and unambiguous descrip- tion of his property and title. And, notwithstanding the current maxim about simplex commendatio, lan- guage of general commendation — such as a statement that the person in possession is a most desirable tenant — is deemed to include the assertion that the vendor does not know of any fact inconsistent with it. A contract obtained by describing a tenant as " most desirable " who had paid the last quarter's rent in instalments and under pressure has been set aside at the suit of the purchaser (p). If the vendor does not intend to offer for sale an unqualified estate, the qualifications should appear on the face of the particulars (q). In Torrance v. Bolton (r) an estate was offered for sale as an imme- diate reversion in fee simple. At the auction condi- tions of sale were read aloud from a manuscript, but no copy given to the persons who attended the sale. One of these conditions showed that the property was subject to three mortgages. The plaintiff in the suit had bid and become the purchaser at the sale, but with- out having, as he alleged, distinctly heard the condi- tions or understood their effect. The Court held that the particulars were misleading; that the mere reading out of the conditions of sale was not enough to remove their effect and to make it clear to the mind of the pur- chaser what he was really buying; and that he was en- titled to have the contract rescinded and his deposit re- turned. A misleading description may be treated as a mis- Ira) E. g. Stanton v. Tattersall, 1 Sm. & G. 529; Torrance v. Bol- ton, 8 Ch. 118. (o) Aberaman Ironworks Co. ». "Wickens, 4 Ch. 101, where the contract having been rescinded by consent before the suit was held not to deprive the Courtof jurisdiction. {p) Smith v. Land and House Property Corporation, C. A., 28 Ch. D. 7. tq) Hughes v. Jones, 3 D. F. J. 307, 314. (r) 8 Ch. 118. SALES OP LAND : DUTIES OF VENDOR AND PURCHASER. 541 representation even if it is in terms accurate: for ex- ample, ^ where property was described as "in the oc- [ -^ 503] cupation of A." at a certain rental, and in truth A. held not under the vendor, but under another person's adverse possession (s), or where immediate possession is mate- rial to the purchaser, and the tenant holds under an unexpired lease for years which is not disclosed (t). A misleading statement or omission made by mere heed- lessness or accident may deprive a vendor of his right to specific performance, even if such that a more care- ful buyer might not have been misled (u). All this proceeds on the supposition that the vend- Duty of or's property and title are best known to himself, as al- purchaser in most always is the case. But the position of the parties s P eclal casea * may be reversed : a person who has become the owner of a property he knows very little about may sell it to a person well acquainted with it, and in that case a material misrepresentation by the purchaser mdkes the contract, and even an executed conveyance pursuant to it, voidable at the vendor's option (x) So it is where the purchaser has done acts unkDown to the vendor which alter their position and rights with reference to the property: as where there is a coal mine under the land and the purchaser has trespassed upon it and rais- ed coal without the vendor's knowledge: for here the proposed purchase involves a buying up of rights against the purchaser of which the owner is not aware (y). On a sale under the direction of the Court a person offering to buy must either abstain from laying any in- formation before the Court in order to obtain its ap- proval, or he must lay before it all the information he possesses, and which it is material that the Court should have, to enable it to form a judgment on the subject under its consideration. It is no answer to say that the information given to -fa the Court was true as far [ ^ 504] as it went, and that, if the Court desired further infor- mation or further materials, it should have asked for them. The Court is neither buyer nor seller, and it is the duty of every one laying materials before it for the purpose of obtaining its approval of any transaction to take care that the materials furnished to guide the Court shall not- be "incomplete or misleading." Ac- (s) Lachlan v. Reynolds, Kay, 52. '<) Caballero v. Henty, 9 Ch. 447. u) Jones v. Eimmer, 14 Ch. D. 588. x) Hay garth v. "Wearing, 12 Eq. 320. y) Phillips v. Homfray, 6 Ch. 770, 779. 542 MISREPRESENTATION AND FRAUD. Effect of special conditions as to title. Non-dis- closure of [ * 505] defect of title not actually known to vendor: Wilde v. Gibson. cordingly the sale of a life interest under the direction of the Court has been set aside after the lapse of sev- eral years upon proof that the terms were sanctioned on the strength of adverse medical opinions communi- cated to the Court by the buyer, while less unfavoura- ble opinions known to the buyer were withheld (z). Vendors of land may, and constantly do in practice, sell under conditions requiring the purchaser to assume particular states of fact and title. But such conditions must not be misleading as to any matter within the vendor's knowledge (a). " The vendor is not at lib- erty to require the purchaser to assume as the root of his title that which documents within his possession show not to be the fact, even though those documents may show a perfectly good title on another ground:" and if this is done even by a perfectly innocent over- sight on the part of the vendor or his advisers, spe- cific performance will not be enforced (6). A spe- cial condition limiting the time for which title is to be shown must be fair and explicit, and " give a perfectly fair description of the nature of that which is to form the root of title " (c). The House of Lords decided in Wilde v. Gibson (d) that the vendor's silence as to a right of way over the property, -fa of the existence of which he was not shown to be aware, was no ground for setting aside the con- tract. This reversed the decision of Knight Bruce, V.-C. (e), who held that the silence of the particulars taken together with the condition of the property (for the way had been enclosed) amounted to an assertion that no right of way existed. In any view it seems an extraordinary, not to say dangerous, doctrine to say that a vendor is not bound to know his own title, so far at least as with ordinary diligence he may know it: and the case is severely criticized by Lord St. Leon- ards (/). The Irish case relied on by the Lords as a (z) Boswell v. Coaks (C. A.), 27 Ch. D. 424; per Cur. at p. 454. (a) Heywood v. Mallalieu, 25 Ch. D. 357 (definite adverse claims known to a vendor must be disclosed even if he thinks them unfounded). (6) Broad v. Munton, 12 Ch. D. 131 (C. A.), per Cotton, L. J., at p. 149: whether this would be sufficient ground for rescind- ing the contract, quaere, per Jessel, M. E., at p. 142. (e) Marsh and Earl Granville (C. A.), 24 Ch. D. 11, 22, -where the purchaser was held not hound to accept as the commence- ment of title a voluntary deed not stated in the contract to be such. (d) 1 H. L. C. 605. (e) S. C. mm. Gibson v. D'Este, 2 Y. & C. 542. (/) Sugd. Law of Property, 614, 637, &c. SALES OF LAND : DUTIES OF VENDOR AND PUnCHASER. 543 direct authority may be distinguished on the ground that the representation there made by the lessor that there was no right of way was made not merely with an honest belief, but with a reasonable belief iu its truth (g). The decision in Wilde v. Gibson was much influenced by the purchaser's case having been rested in the plead- ings to a certain extent upon charges of actual fraud, which, however, were abandoned in argument: the doctrine of constructive notice, it was said, could not be applied in support of an imputation of direct personal fraud. Even so the result in modern practice would only be that the plaintiff would have to pay the costs occasioned by the unfounded charges; he would not lose any relief for which he otherwise showed sufficient grounds (h). And on examining the pleadings it is difficult to find any imputation sufficient to justify the grave rebukes expressed in the judgments (i). Altogether the case strongly illustrates the confusion and incon- venience which follow from the use of the word fraud with a latitude inconsistent with its -fc ordinary and [ -^ 508] natural meaning. It was also said by Lord Campbell that a court of equity will not set aside an executed conveyance on the ground of misrepresentation or con- cealment, but only for actual fraud (k) ; but this dictum has not been followed. Where copyhold land has been sold as freehold, apparently in good faith, the sale was set aside after conveyance (Z). Here, however, the seller had notice when he bought the land himself that some part of it at least was copyhold. On the other hand there may be a want of diligence on the pur- chaser's part which, although not such as to deprive him of the right of rescinding the contract before comple- tion, would preclude him from having the sale set aside after conveyance (m). (ff) Indeed the Court seems to have thought it was true, not- withstanding the adverse result of an action. Legge v. Croker, 1 Ball. & B. 506, Sugd. op. tit. 657. (h) Hillard v. Eiffe, L. K. 7 H. L. 39; see next chapter. ((") The bill in Gibson v. D'Este, which is to be found in the printed cases of 1848, has the words "carefully concealed" in one passage: "fraudulently concealed " in another may mean, of course, fraudulently in a technical sense. (k) 1 H. L. C. 632. (1) Hart v. Swaine, 7 Ch. T>. 42; also in Haygarth v. Wearing, 12 Eq. 320, an executed conveyance was set aside on simple m isrepresen tati on . (m) M'Culloch v. Gregory, 1 K. & J. 286, where a will was mis-stated in the abstract so as to conceal a defect of title, but the purchaser omitted to examine the originals. 544 MISREPRESENTATION. AND FRAUD. General As a general result of the authorities there seems to rule - be no doubt that on sales of real property it is the duty of the party acquainted with the property to give sub- stantially correct information, at all events to the extent of his own actual knowledge {n), of all facts material to the description or title of the estate offered for sale, but not of extraneous facts affecting its value : the seller, for example, is not bound to tell the buyer what price he himself gave for Ihe property (o). 18 Exception as The general rule seems not applicable as between to occupation lessor and lessee, where the letting is for an occupation by the lessee himself, and so far as concerns any physi- cal fact which can be discovered by inspection; for in ordinary circumstances the landlord is entitled to as- sume that the tenant will go and look at the premises for himself, and therefore is not bound to tell him if they are in bad repair or even ruinous (p). leases. [•507] Family settlements: duty of full dis- closure. •^f E. Family Settlements. In the negotiatons for family settlements and com- promises it is the duty of the parties and their profes- sional agents not only to abstain from misrepresenta- tions, but to communicate to the other parties all mate- rial facts within their knowledge affecting the rights to be dealt with. 10 The omission to make such communi- cation, even without any wrong motive, is a ground for setting aside the transaction. " Full and complete communication of all material circumstances is what the Court must insist on" (q). " Without full disclos- ure honest intention is not sufficient," and it makes no difference if the non-diselosure is due to an honest but mistaken opinion as to the materiality or accuracy of the information withheld (r). 20 The operation of this (») See Joliffe v. Baker, 11 Q. B. D. 255, but that case is of little authority, if any, on the question of contract, see per Smith, J. in Palmer v. Johnson, 12 Q. B. D. at p. 37, explaining his own part in Joliffe v. Baker. (o) 3 App. Ca. 1267. (p) Keates r. Earl Cadogan, 10 C. B. 591, 20 L. J. C. P. 76. The general rule does apply as to matters of title: Mostyn v. West Mostyn Coal, &c, Co., 1 C. P. I). 145. (q) Gordon v. Gordon, 3 Ssv. 400, 473. (r) lb. 477. How far does this go? It can hardly he a duty 18 If an error is made in the deed, or if there is any formality essential to its taking effect, or it contains a clause stipulating what the parties did not intend, equity wili grant relief. Elliott v. Sackett, 108 IT. S. 132; McMillan v. Fish, 2 Stew. Ch. 610; Gerdesu. Moody, 41 Cal. 355; Berry v. Lowell, 72 Ala. 14. 18 See Burkholder's Appeal, 9 Out, 39; Stub v. Lies. 6 Watts, 43. w A man has no right to rely upon what another says he in- COMPANIES : CONTRACTS OF PROMOTERS. 545 rule is not affected by the leaning of equity, as it is called, towards supporting re-settlements and similar arrangements for the sake of peace and quietness in families (s). F. Partnership, Contracts to take Sliares in Companies, Partnership. and Contracts of Promotors. Contracts to take The contract of partnership is always described as shares. one in which the utmost good faith is required. So far as this principle applies to the relations of partners after the partnership is formed, it belongs to the law of part- nership as a special and distinct subject; and in fact the principle is worked out in definite rules to su. Kelly, 3 Knapp, P. C. 257, 293: but Lord Broug- ham's language is much too wide; as to the point actually decid- ed see p. 519 below. (in) Evans v. Carrington, 2 D. F. J. 481. It is there said however that non-disclosure of adultery would be enough to avoid a separation deed. (») Evans v. Carrington, 2 D. F. J. 481, 501; cp. Evans v. Ed- FRAUD. 549 for the transfer of property or possession by a repre- sentation that the property will be used for some law- ful puipose, when the real intention is to use it for an unlawful purpose (o). It has been said that it is not fraud to make a contract without any intention of per- forming it, because peradventure the party may think better of it and perform it after all : but this was in a case where the question arose wholly on the form of the pleadings, and in a highly technical and now hap- pily impossible manner (p). And both before and since it has repeatedly been considered a fraud in law to buy goods with the intention of not paying for them (q). Here it is obvious that the party would not enter into the contract if he knew of the fraudulent in- tention: but the fraud is not so much in the conceal- ment as in the character of the intention itself. It would be ridiculous to speak of a duty of disclosure in such cases. Still there is ignorance 'on the one hand and wrongful contrivance on the other, such as to bring these cases within the more general description of fraud given in Ch. VIII. p. 391, above. The party defrauded is ' entitled, and was formerly Eight of entitled at law as well as in equity, to rescind the con- rescinding tract " Fraud in all courts and at all stages of the fraudulent transaction has been held to vitiate all to which it at- con rae " taches (r). 21 ^ We shall now consider the elements of fraud sepa- [ -^ 513] rately; and first the false representation in itself. It Elements does not matter whether the representation is made by oi fraud- express words or by conduct, 22 nor whether it consists in monds, 13 C. B. 777, where, however, express representation was averred. (u) Feret v. Hill, 15 C. B. 207, 23 L. J. C. P. 185, concedes this, deciding only that possession actually given under the con- tract cannot be treated as a mere trespass by the party de- frauded. ( p) Hemingway ». Hamilton, 4 M. & W. 115. (q) Ferguson v. Carrington, 9 B. & C. 59; Load v. Green, 15 M. & W. 216, 15 L. J. Ex. 113; White v. Garden, 10 C. B. 919, 923, 20 L. J. C. P. 166; Clough v. L. & N. W. Ey. Co., L. E. 7 Ex. 26; Ex parte Whittaker, 10 Ch. 446, 449, per Mellish, L. J.; Donaldson v. Farwell, 3 Otto (93 U. S,), 631. But it is not such a "false representation or other fraud " as to constitute a mis- demeanor under s. 11, sub-s. 19 of the Debtors Act, 1869; Ex parte Brett. 1 Ch. D. 151. (r) Per Wilde, B., Udell v. Atherton, 7 H. & N. at p. 181. 21 In general, courts of law and equity have concurrent juris- diction in cases of fraud. Skrine v. Simmons, 11 Ga. 401; Tom- lin v. Cox, 4 Harrison, 76; Gilbert v. Burgott, 10 Johns. 457. 22 Denny v. Gilman, 26 Me. 149; Buford v. Caldwell, 3 Mo. 477; Mulligan v. Bailey, 28 Ga. 507. 550 MISREPRESENTATION AND FRAUD. Examples of fraudulent represen- tation. [ * 514] What is fraudulent conceal- ment. the positive assertion or suggestion of that 'which is false, or in the active concealment of something ma- terial to be known to the other party for the purpose of de- ciding whether he shall enter into the contract. 28 These elementary rules are so completely established and so completely assumed to be established in all decisions and discussions on the subject that it will suffice to give a few instances. There may be a false statement of specific facts: 24 this seldom occurs in a perfectly simple form. Canham v. Barry (s) is a good example. There the contract was for the sale of a leasehold. The vendor was un- der covenant with his lessor not to assign without license, and had ascertained that such licence would not be refused if he could find an eligible tenant. The agreement was made for the purpose of one M. becom- ing the occupier, and the purchaser and M. represented to the vendor that M. was a respectable person and could give satisfactory references to the landlords, which was contrary to the fact. This was held to be a fraudulent misrepresentation of a material fact such as to avoid the contract. A more frequent case is where a person is induced to acquire or become a partner in a business by false accounts of its position and profits (t). Or the representation may be of a general state of things: thus it is fraud to induce a person to enter into a particular arrangement by an incorrect and unwar- rantable assertion that such is the usual mode of con- ducting the kind of business in hand (m). 2 ° How far it must be a representation of existing facts will be speci- ally considered. -^-"Active concealment" 26 seems to be the appro- priate description for the following sorts of conduct: taking means appropriate to the nature of the case to (s) 15 C. B. 597; 24 L. J. C. P. 100. (t) E. g. Rawlins v. Wiekham, 3 De G. & J. 304. The cases where contracts to take shares have been held voidable for mis- representation in the prospectus are of the same kind. («) Eeynell v. Sprye, 1 D. M. G. 680. 23 The concealment of a fact which one ought, as a legal duty to disclose, is in law a fraudulent representation. Aorston v. Ridgway, 18 111. 23; Trigg v. Read, 5 Humph. 529; Wintz v. Mor- rison, 17 Texas, 372; Belden v. Henriques, 8 Cal. 87. 24 Stone v. Denny, 4 Met. 151; Hubbell v. Meigs, 50 N. Y. 480; Campbell v. Hillman, 15 B. Monr. 508; Hallu. Bradbury, 48 Conn. 32. 25 If a deceitful promise is made which is not meant to be per- formed it is deemed a fraud. Dowd v. Tucker, 41 Conn. 197; Miller v. Howell, 1 Scam. 499; Farrar v. Bridges, 3 Humph. 566. 26 See note niimber 23, and 2 Kent's Com. 482, 491. FRAUD : KNOWLEDGE OF UN1RUTH. 551 prevent the other party from learning a material fact — such as using contrivances to hide the defects of goods sold (x): or making a statement true in terms as far as it goes, but keeping silence as to other things which if disclosed would alter the whole effect of the state- ment, so that what is in fact told is a half truth equiva- lent to a falsehood (y): or allowing the other party to proceed on an erroneous belief to which one's own acts have contributed (z). It is sufficient if it appears that the one party knowingly assisted in inducing the other to enter into the contract by leading him to believe that which was known to be false (a). Thus it is where one party has made an innocent misrepresentation, but on discovering the error does -nothing to undeceive the other (&). As to this last point it is to be observed that As to mere in ordinary cases it is not the duty of one party to a silence: contract to correct a misapprehension of the other to Smitrj *>• which he has done nothing to contribute, though he Hu § lles - may be aware of it. " Passive acquiescence in a self- deception" (c) cannot be put on the same footing as an active encouragement of it which has the nature of "ag- gressive deceit" (d). Even if the one party asks the other a question as to some collateral matter on which he is not bound to give information, mere silence on the other's part is not equivalent to a representation. This was decided by the Supreme Court of the United States in LaidlawY. Organ (e). 27 The contract there in ques- Laidlaw v. tion was a sale of tobacco. On the morning -^-of the ? r P n ; 1( .-, sale the buyers knew, but the sellers did not know, that . *- " ' peace had been concluded between the United States and England. The sellers asked if there was any news affecting the market price. The buyers gave no answer, and the sellers did not insist on having one, and it was held that the silence of the buyers was not a fraudu- lent concealment. And, notwithstanding that the deci- (x) See Benjamin on Sale, 449. (y) Peek v. Gurney, L. R. 6 H. L. 392, 403. (z) Hill v. Gray, 1 Stark. 434, as explained in Keates v. Earl Cadogan, 10 C. B. 591, 600; 20 L. J. C. P. 76; qu. if the explana- tion does not really overrule the particular decision, per Lord Chelmsford, L. R. 6 H. L. 391; Benjamin, 451-2. (a) Per Blackburn, J. Lee v. Jones, 17 C. B. N. S. at p. 507; 34 L. J. C. P. at p. 140. (b) Reynell v. Sprye, 1 D. M. G. at p. 709. (c) Smith v. Hughes, L. R. 6 Q. B. 597, 603. (d) Keates v. Earl Cadogan, supra. («) 2 Wheat. 178. The case is almost exactly parallel to Smith v. Hughes (last note but one), but Was not there cited. '" See also Harris p. Tyson, 12 Harris (Pa.), 347; Bell v. Byer- son, 11 Iowa, 233; Hobbs v. Parker, 31 Me. 143. 552 MISREPRESENTATION AND FRAUD. Represen- tation made without belief in its truth: actual know- ledge of falsehood not neces- sary. Action of deceit. [*518] sion has been criticized (/) it seems right; for silence in such a case is of itself equivalent at most to saying, "It is not our business to tell you"; which indeed, as a part of the general law, the other party may be pre- sumed to know already. 28 The real question in such a case is whether there was nothing beyond mere silence. If there is evidence of any departure from the attitude of passive acquiescence, to that extent there is evidence of fraud; and perhaps it i= not too much to say that the Court should be astute to find it. That which gives the character of fraud to a represen- tation untrue in fact is that it is made without belief in its truth; not necessarily with positive knowledge of its falsehood.' 29 Where a false representation amounts to an actionable wrong, it is always in the party's choice, as an alternative remedy, to seek rescission of the con- tract, if any, which has been induced by the fraud: and the cases at common law have established that a false representation may be a substantive ground of action for damages though it is not shown that the person making the statement knew it to be false. It is enough to show that he made it as being true within his own knowledge, with a view to secure some benefit to him- self, or to deceive a third person, and without believing it to be true (g). On the -fa other hand there is no actionable wrong in a representation which though untrue in fact is believed to be true by the person mak- ing it (h), even if the belief is not held on reasonable (/) Story. Eq. Jur. into it by some fraud of C. to which B. is no party (n). Thus in Sturge v. Starr (o) a woman joined with her supposed husband in dealing with her interest in a fund. The marriage was in fact void, the man having concealed from her a previous marriage. It was held that this did not affect the rights of the purchaser. And so if A. effects -fa an insurance on the life of B., [ ^ 530] false statements made by B. to the insurance office con- cerning his own health, but not known by A. to be false, do not in the absence of special conditions avoid the contract (p). When we come to deal with contracts made by agents ^ s to rep- the question arises to what extent the representations of resenta- the agent are to be considered as the representations of tions made the principal for the purposes of this rule. And this y agents " question, though now practically set at rest by recent decisions, is one which has given rise to some difficulty. A false statement made by an agent with his principal s express authority, the principal knowing it to be false, is obviously equivalent to a falsehood told by the prin- cipal himself; and we do not know that it has ever been supposed to make any difference whether the agent knows the statement to be false or not. But we may also have the following cases. The statement may be not expressly authorized by the principal, nor known to be untrue by him, but known to be untrue by the agent; or conversely, the statement may be not known to the (m) Clough v. L. & N. W. Ky. Co. (Ex. Ch.) L. R. 7 Ex. 26, an exceedingly instructive case: as to the misconceived act being justified by reference to the true ground of rescission afterwards discovered, cp. Wright's ca. 7 Ch. 55. (n) See per Lord Cairns, Smith's ca. 2 Ch. at p. 616. (o) 2 My. & K. 195. (p) Wheelton v. Hardisty, 8 E. & B. 232, 285, 27 L. J. Q. E. 241. 566 THE RIGHT OF RESCISSION. The only question is L*531] whether the repre- sentation was within the agent's authority. Barwick v. English Joint Stock, Bank, Mackay v. Commercial Bank of New Brunswick. agent to be untrue, and not expressly authorized by the principal, the true state of the facts being, however, known to the principal. There is no doubt that in the first case the principal is answerable, subject only to the limitation to be presently stated (q). In- the second case there is every reason to believe that the same rule holds good, notwithstanding a much can- vassed decision to the contrary (r), which, if not over- ruled by the remarks since made upon it (s), has been cut down to a decision on a point of pleading which perhaps cannot, and certainly need not, ever arise again. We can at once see that the above distinctions are material, if at all, only when there is a question of fraud -fa in the strict sense, and then chiefly when it is sought to make the principal liable ex delicto. Where a non- fraudulent misrepresentation suffices to avoid the con- tract, there it is clear that the only thing to be ascer- tained is whether the representation was in fact within the scope of the agent's authority. But it may be now taken as the law that this is the only question even in a case of fraud. It has been so laid down by a consid- ered judgment of the Exchequer Chamber (t), fully approved by later decisions of the Judicial Commit- tee (w). According to this the rule is "that the mas- ter is answerable for every such wrong," including fraud, "of the servant or agent as is committed in the course of the service and for the master's benefit, though no express command or privity of the master be proved." Although the master may not have authorized the par- ticular act, yet if "he has put the agent in his place to do that class of acts" he must be answerable for the agent's conduct. 12 It makes no difference whether the (q) The rule applies to. an agent who profits by the fraud of a sub-agent employed by him: Cockburh, C. J. in Weir v. Bell, 3 Ex. D. at p. 249. M Cornfoot v. Fowke, 6M.&W. 358. (s) 2 Sm. L. C. 88: and see especially per "Willes, J. in Barwick v. English Joint Stock Bank, L. R. 2 Ex. 262. (t) Barwick v. English Joint Stock Bank, L. R. 2 Ex. 259. («) Mackay v. Commercial Bank of New Brunswick, L. R. 5 P. C. 394, 411; Swire v. Francis, 3 App. Ca. 106. 12 If an agent in a particular transaction covered by his author- ization, makes fraudulent representations the other party may treat them as made by the principal although he did not direct them; because he has employed the agent to do the thing and he must bear whatever comes from the manner of doing. Locke v. Stearns, 1 Met. 560; Kennedys. McKay, 14 Vroom, 288; Durst v. Burton, 47 N. Y. 167; Jeffrey v. Biglow, 13 Wendell, 518; Perley v. Catlin, 31 111. 533. FRAUD OF AGENTS. 567 principal is a natural person or a corporation (x). In two of the cases just referred to, a banking corporation was held to be liable for a false representation made by- one of its officers in the course of the business usually conducted by him on behalf of the bank ; and this involves the proposition that the party misled is entitled to re- scind the contract induced by such representation. 13 On the whole there seems to be no room for serious doubt that the law of England as now settled is cor- rectly expressed by s. 238 of the Indian Contract Act: — "Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations ^-made or frauds committed [ -£■ 532] by agents in matters -which do not fall -within their authority«do not affect their principals. ' ' u The directors and other officers of companies, acting Directors within the functions of their offices, are for this pur- and pro- pose agents, and the companies are bound by their acts moters - and conduct. Conversely, where directors employ an agent for the purposes of the company, and that agent commits a fraud in the course of his employment with- out the personal knowledge or sanction of the directors, the remedy of persons injured by the fraud is not against the directors, who are themselves only agents, but against the company as ultimate principal (y) : and one director is not liable for fraud committed by another director without his authority or concurrence (z). Ee- ports made in the first instance to a company by its di- rectors, if afterwards adopted by a meeting and "indus- triously circulated," must be treated as the representa- (x) L. R. 5 P. C. 413-5, dissenting from the dicta on this point in Western Bank of Scotland v. Addie, L. R. 1 Sc. & D. 145, which, though apparently intended to be decisive, have not been followed. Swift v. Jewsbury (Ex. Ch.), L. R. 9 Q. B. at p. 312, per Lord Coleridge, C. J. (;/) Weir v. Barnett, 3 Ex. D. 32, affd. in C. A. nom. Weir v. Bell, ib. 238. But a director who profited by the fraud after knowledge of it would probably be liable : see judgments of Cockburn, C. J. and Brett, L. J. (z) Cargill v. Bower, 10 Ch. D. 502. 13 If a special agent commits a fraud not within the scope of his agency the principal is not responsible. Echols v. Dodd, 20 Texas, 190; Kennedy v. Price, 2 C. E. Green, 415; Fellows v. Oneida, 36 Barb. 655' 14 A fraud practiced upon an agent, is in law, a fraud upon his principal. May v. Magee, 66 111. 112. 568 THE EIGHT OF RESCISSION. tions of the company to the public, and as such will bind it (a). Statements in a prospectus issued by pro- moters before the company is in existence cannot indeed be said with accuracy to be made by agents for the com- pany: for one cannot be an agent even by subsequent ratification for a principal not in existence and capable of ratifying at the time (b). But such statements also, if afterwards expressly or tacitly adopted, become the statements of the company. It is a principle of gen- eral application, by no means confined to these cases, that if A. makes an assertion to B., and B. repeats it to C. in an unqualified manner, intending him to act upon it, and O. does act upon it, B. makes that asser- tion his own and is answerable for its consequences. If he would guard himself, it is easy for him to say: "This is what A. tells me, -^-and on his authority I repeat it; for my own part I believe it, but if you want any fur- ther assurance it is to him you must lobk." (c). It is to be borne in mind that in a case of actual fraud on the part of an agent the responsibility of the , principal does not in any way exclude the responsibility OWT1 TlPT^rtTlfl l frand of the agent. "All persons directly concerned in the commission of a fraud are to be treated as principals"; and in this sense it is true that an agent or servant cannot be authorized to commit a fraud. He cannot excuse himself on the ground that he acted only as agent or servant (d). 15 [*533] Agent always liable for his The repre- sentation mast be in the same transaction. D. The representation must be made as part of the same transaction. It is believed that the statement of the rule in this form, though at first sight vague, is really more accurate than that which presents itself as an alternative, but is in fact included in this — namely that the representation must be made to the other party or with a view to his acting upon it. The effect of the rule is that the un- truth of a representation made to a third person, or even to the party himself on some former occasion, in the (a) Per Lord Westbury, New Brunswick, &c. Co. v. Cony- beare, 9 H. L. C. 711, 725. (b) P. 107 above. (c) Smith's ca. 2 Ch. 604, 611, p. 517 above; and further, as to the application of the doctrines of agency to partners and direct- ors on these points, Lindley, 1. 314 sqq. (d) Per Lord Westbury, Cullen v. Thomson's Trustees and Kerr, 4 Macq. 424, 432; Swift v. Winterbotham, L. E. 8 Q. B. 244, 254. 15 Story on Agency, Sec. 308; Etter v. Baily, 8 Barr, 442; Bennett v. Ives, 30 Conn. 329; Bell v. Josselyn, 3 Gray, 309. REPRESENTATION OF AGENTS. 569 course of a different transaction and for a different purpose, cannot be relied on as a ground either for rescinding a contract or for maintaining an action of deceit. Thus in Western Bank of Scotland v. Addie (e) Western the directors of the bank had made a series of flourish- Bank of ing but untrue reports on the condition of its affairs, in Scotland v. • Addie which bad debts were counted as good assets. The shareholder who sought relief in the action had taken additional shares on the faith, as he said, of these reports. But it was not shown that they were issued or circulated for the purpose of inducing existing shareholders to take more shares, or that the local agent of the -^ bank who effected this particular sale of shares [ *fc 534] used them or was authorized to use them for that pur- pose. Thus the case rested only on the purchaser having acted under an impression derived from these reports at some former time; and that was not such a direct connexion between the false representation and the conduct induced by it as must be shown in order to rescind a contract. This however, was not the only ground of the decision: its main principle, as explained in a later case in the House of Lords, being that a person who remains a shareholder, either by having affirmed his contract with the company or by being too late to rescind it, , cannot have a remedy in damages against the corporate body for representations on the faith of which his shares were taken (/). In Peek v. Gumey (g) the important point is decided Peek v. that the sole office of a prospectus is to invite the public Gurney. to take shares in the company in the first instance. Those who take shares in reliance on the prospectus are entitled to their remedy if the statements in it are false. But those statements cannot be taken as addressed to all persons who may hereafter become purchasers of shares in the market; and such persons cannot claim any relief on the ground of having been deceived by the prospectus unless they can show that it was specially communicated to them by some further act on the part of the company or the directors. Some former decisions the other way (h) are expressly over- ruled. The proceeding there in hand was in the nature (e) L. R. 1 Sc. & D. 145. (/) Houldsworth v. City of Glasgow Bank, 5 A pp. Ca. 317. (<7) L. E. 6 H. L. 377, 395: and see the case put by Lord Cairns as an illustration at p. 411. (h) Bedford v. Ba^shaw, 4 H. & N. 538, 29 L. J. Ex. 59; Bag- shaw v. Seymour. 18 C. B. 903, 29 L. J. Ex. 62. n. The authority of Gerhard v. Bates, 2 E. & B. 476, 22 L. J. Q. B. 364, is saved by a rather fine distinction: L. B. 6 H. L. 399. 570 THE EIGHT OF RESCISSION. Way v. Hearn. [*535J As to rights of party misled: general statement. of an action of deceit, but the doctrine must equally apply to the rescission of a contract. In Way v. Hearn (i) the action was on a promise by the defendant to indemnify the plaintiff against half of the -^ loss he might sustain by having accepted a bill drawn by one B. Shortly before this, in the course of an investigation of E.'s affairs in which the defendant took part, R. had at the plaintiff's request concealed from the accountant employed in the matter the fact that he owed a large sum to the plaintiff; the plaintiff said his reason for this was that he did not wish his wife to know he had lent so much money upon bad security. At this time the bill which was the subject of the indemnity was not thought of; it was in fact given to get rid of an execution afterwards put in by another creditor. Here a misrepresentation as to B.'s solvency was made by E. in concert with the plaintiff, and communicated to the defendant; but it was in a transaction unconnected with the subsequent contract between the plaintiff and the defendant, and the de- fendant was therefore not entitled to dispute that con- tract on the ground of fraud. 2. As to the right of the party misled. This right is one which requires, and in several modern cases of im- portance has received, an exact limitation and defini- tion. It may be thus described: The party who has been induced to enter into a con- tract by fraud, or by concealment or misrepresentation in any matter such that the truth of the representation made, or the disclosure of the fact, is by law or by spe- cial agreement of the parties of the essence of the con- tract, may affirm the contract, and insist, if that is pos- sible, on being put in the same position as if the repre- sentation had been true: Or he may at his option rescind the contract within a reasonable time (k) 16 after discovering the misrepresen- tation, unless it has become impossible to restore the parties to the position in which they would have been if the contract had not been made, or unless any third person has in good faith and for value acquired any in- terest under the contract. (i) 13 C. B. N. S. 292, 32 L. J. C. P. 34. (Jc) But qu. whether time is in itself material: See L. E.7Ex. 35, 8 Ex. 205. 16 It is incumbent upon the party to act promptly. Byers v. Chapin, 28 Ohio, 300 Gates; v. Bliss, 43 Vt. 299; Pratt v. Fiske, 17 Cal. 380; Hunt v. Hard wick, 68 Ga. 100; Samuels v. King, 50 Ind. 527. ELECTION TO RESCIND. 571 -fclt will be necessary to dwell separately on the sev- [ fa 536] eral points involved in this. And it is to be observed that the principles here considered are not confined to any particular ground of rescission, but apply generally when a contract is voidable, either for fraud or on any other ground, at the option of one of the parties; on a sale of land, for example, it is constantly made a con- dition that the vendor may rescind if the purchaser takes any objection to the title which the vendor is un- able to remove; and then these rules apply so far as the nature of the case admits. A. As to the nature of the right in general, and what Ofaffirma- is an affirmation or rescission of the contract. tion and rescission "A contract induced by fraud is not void, but void- in S eneral - able only at the option of the party defrauded;" " in other words, valid until rescinded (I). Where the nature of the case admits of it, the party misled may affirm the contract and insist on having the representation made good. If the owner of an estate sells it as unincumbered, concealing from the purchaser the existence of incumbrances, the purchaser may if he thinks fit call on him to perform his contract and re- deem the incumbrances (m). If promoters of a part- nership undertaking induce persons to take part in it by untruly representing that a certain amount of capi- tal has been already subscribed for they will them- selves be put on the list of contributories for that amount (n). It is to be remembered that the right of election, and Election to the possibility of having the contract performed with avoid or compensation, does not exclude the option of having the contract wholly set aside. "It is for the party defrauded to elect whether he will be bound " (o). But if he does fa affirm the contract, he must affirm it in all its terms. 18 [ fa 537] Thus a vendor who has been induced by fraud to sell goods on credit cannot sue on the contract for the price (I ) Oakes v. Turquand, L. E. 2 H. L. 346, 375-76. (m) Per Eomilly, M. E. in Pulsford v. Eichards, 17 Beav. 96. Cp. Ungley v. Ungley, 5 Ch. D. 887. (n) Moore and De la Torre's ca. 18 Eq. 661. (o) Eawlins v. Wickham, 3 De G. & J. 304, 322 17 Myton a.jThurlaw, 23 Kan. 212; Nealton v. Henry, 131 Mass. 153. 18 The contract cannot be rescinded in part and treated as binding in part. Eavmond v. Barnard, 12 Johns. 274; Hendricks v. Goodrich, 15 Wis. 679; Jewett v. Petit, 4 Mich. 508; Weeks v. Eobie, 42 N. H. 316. affirm. 672 THE EIGHT OK RESCISSION. What shall determine election. [•588] of the goods before the expiration of the credit: the proper course is to rescind the contract and sue in tro- ver (p). When the contract is once affirmed, the elec- tion is completely determined; and for this purpose it is not necessary that the affirmation should be express. Any acts or conduct which unequivocally treat the con- tract as subsisting, after the facts giving the right to rescind have come to the knowledge of the party, will have the same effect (q). Taking steps to enforce the contract is a conclusive election not to rescind on ac- count of anything known at the time (r). v> A share- holder cannot repudiate his shares on the ground of misrepresentations in the prospectus if he has paid a call without protest or received a dividend after he has . had in his hands a report showing to a reader of ordin- ary intelligence that the statements of the prospectus were'nottrue (s), or if after discovering the true state of things he has taken an active part in the affairs of the company (t) or has affirmed his ownership of the shares by taking steps to sell them (u); and in general a party who voluntarily acts upon a contract which is voidable at his option, having knowledge of all the facts, cannot afterwards repudiate it if it turns out to his disadvantage (x). And when the right of repudia- tion has once been waived by acting upon the contract as subsisting with knowledge of facts establishing a case of fraud, the subsequent discovery of further facts constituting " anew -fa incident in the fraud" cannot revive it (y). 20 The exercise of acts of ownership over ( p) Ferguson v. Carrington, 9 B. & C. 59. This is unimpor- tant in practice now that the old forms of action are abolished, but it is retained as a good illustration of the principle. (?) Clough v. L. & N. W. Ry. Co. (Ex. Ch.j, L. R. 7 Ex. at p. 34. (r) Gray v. Fowler (Ex. Ch.), L. R. 8 Ex. 249, 280. (s) Scholey v. Central Ry. Co. of Venezuela, 9 Eq. 266 n. it) Sharply v. Louth & East Coast Ry. Co. (C. A.),, 2 Ch. D. 663. (u) Ex parte Briggs, 1 Eq. 483; this however was a case not of mis-stated facts but of nuterial departure from the objects of the company as stated in the prospectus. {x) Ormes v. Beadel, 2 D. F. J. 332, 336. (y) Campbell v. Fleming, 1 A. & E. 40. This does not apply where a new and distinct cause of rescission arises: Gray v. Fow- ler, L. R. 8 Ex. 249. 19 The parties to a contract may rescind at any time by mutual agreement. Barber v. Lyon, 8 Blackf. 218; McFaddenu. O'Don- nell, 18 Cal. 160; Echals v. Butler, 28 Miss. 114. 20 An executory promise to waive a stipulation in a contract may be withdrawn at pleasure, unless founded on a considera- tion. Reynolds v. C. B. & Q. R. R., 11 Neb. 186; Dunning v. Mauzy, 49 111. 368; Boutwell v. O'Keefe, 32 Barb. 434. ELECTION MUST BE COMMUNICATED. 573 property acquired under the contract precludes a sub- sequent repudiation, but not so much because it is evi- dence of an affirmative election as because it makes it impossible to replace the parties in their former posi- tion; a point to which we shall come presently. "When the acts done are of this kind it seems on principle immaterial whether there is knowledge of the true state of affairs or not, unless there were a continu- ing active concealment or misrepresentation practised with a view to prevent the party defrauded from dis- covering the truth and to induce him to act upon the contract; for then the affirmation itself would be as open to repudiation as the original transaction. Some- thing like this occurs not unfrequently in cases of un- due influence, as we shall see in the next chapter. Omission to repudiate within a reasonable time is evidence, and may be conclusive evidence, of an elec- tion to affirm the contract; and this is in truth the only effect of lapse of time. 21 Still it will be more conven- ient to consider this point separately afterwards. If on the other hand the party elects to rescind, he Election to is to manifest that election by distinctly communicat- rescind must ing to the other party his intention to reject the con- cated'to"' 1111 " tract and claim no interest under it. 22 One way of do- other party, ing this is to institute proceedings to have the contract judicially set aside, and in that case the judicial rescis- sion, when obtained, relates back to the date of the commencement of such proceedings (z).. ?3 Or if the other party is the first to sue on the -^- contract, the [ ^T 539] rescission may be set up as a defence, and. this is itself a sufficient act of rescission without any prior declaration (z) Reese Eiver Silver Mining Co. v. Smith, L. E. 4 H. L. 73-5. What if proceedings were commenced in an incompetent court ? On principle there seems no reason why that also should not be effective as an act of rescission in pais. The proposition that in equity "the mere assertion of a claim unaccompanied by any act to give effect to it" is not enough (Clegg v. Edmondson, 8 D. M. G. 787, 810) refers as a general proposition only to sub- stantive rights. In the particular case it was a claim to share in certain partnership profits. As to shares in companies, see below. 21 The party having the right to rescind must act promptly after the discovery of the ground for rescission, and must do so distinctlv and unequivocally. Hunt v. Siger,l Daly (N. Y. C. P.), 209; Blen v. Bear River &c. Co., 20 Cal. 602. 22 Parmalee w. Adolph, 28 Ohio. 10; Carney v. Newberry, 24 111. 203; Mullin v. Bloomer, 11 Iowa, 360; Henderson v. Hicks, 58 Cal. 364. 23 Thurston v. Beauchard, 22 Pick. 18; Schofield v. Holland, 37 Ind. 220. 574 THE EIGHT OF RESCISSION. What communi- cation sufficient. [*540] of an intention to rescind (a). 24 For the purposes of pleading the allegation that a contract was procured by- fraud has been held to import the allegation that the party on discovering it disaffirmed the contract (6). "Where the rescission is notdeclared in judicial proceed- ings, no further rule can be laid down than that there should be " prompt repudiation and restitution as far as possible" (c). The communication need not be formal, provided it is a distinct and positive rejection of the contract, not a mere request or inquiry, which is not enough (d). 2S But it seems that if notwithstanding an express repudiation the other party persists in treat- ing the contract as in force, then judicial steps should be taken in order to make the rescission complete as against rights of third persons which may subsequently intervene. Especially this is the case as to repudiating shares in a company. The creditors of a company are entitled to rely on the register of shareholders for the time being, and therefore it is not enough for a share- holder to give notice to the company that he claims to repudiate. A stricter rule is applied than would follow from the ordinary rules of contract (e). "The rule is that the repudiating shareholder must not only repudi- ate, but also get his name removed, or commence pro- ceedings to -fa have it removed, before the winding-up; but this rule is subject to the qualification that if one repudiating shareholder takes proceedings the others will have the, benefit of them if, but only if, there is an agreement between them and the company that they shall stand or fall by the result of those proceedings, (o) Clough v. L. & N. W. Ey. Co. (Ex. Ch.), L. R. 7 Ex. 36. (6) Dawes v. Harness, L. B. 10 C. P. 166. The earlier cases there cited, especially Deposit Life Assurance Co. v. Ayscough, 6 E. &B. 761, 26 L. J. Q. B. 29, are not wholly consistent. (c) Per Bramwell, B. Bwlch-y-Plwm Lead Mining Co. v. Baynes, L. E. 2 Ex. 326. Id) See Ashlev's ca. 9 Eq. 263. . (ej Kent v. Freehold Land &c. Co. 3 Ch. 493, Hare's ca. 4 Ch. 503, Scottish Petroleum Co. C. A., 23 Ch. D. 413. But if there are several repudiating shareholders in a like position, proceed- ings taken by one of them and treated by agreement with the company as representative will enure for the benefit of all: Pawle's ca. 4 Ch. 497; McNeill's ca. 10 Eq. 503, apparently rests only on this ground, see review of cases per Baggallay, L. J. 23 Ch. D. at p. 433. "' Where the contract itself provides a method of rescission it should be followed. McKav v. Carrington, 1 McLean, 50; Davis v. Parish, Litt. Sel. Cas. 156. 26 The notice ot rescission need not always be express. Graham v. Holloway, 44 111. 385; Howard v. Hunt, 57 N. H. 467; Moore v. Rogers, 19 111. 347. WHERE RESCISSION INADMISSIBLE. 575 but not otherwise " (/). "Where the original contract was made with an agent for the other party, communi- cation of the rescission to that agent is sufficient, at all events before the principal is disclosed (g). And. where good grounds for rescission exist, and the contract is rescinded by mutual consent on other grounds, those grounds not being such as to give a right of rescission, and the agent's consent being in excess of his authority, yet the rescission stands good. There is nothing more that the party can do, and when he discovers the facts on which he might have sought rescission as a matter of right he is entitled to use them in support of what is . already done. In Wright's (h) case the prospectus of a company contained material misrepresentations. The directors had at a shareholder's request, and on other grounds professed to cancel the allotment of his shares, which they had no power to do, though they had power to accept a surrender. Afterwards the company was wound up, and then only was the misrepresentation made known to him. But it was held that as there was in fact a sufficient reason for annulling the contract, which the directors knew at the time though he did not, the contract was effectually annulled, and he could not be made a contributory even as a past member (i). Inasmuch as the right of rescinding a voidable con Right of tract is alternative and co-extensive with the right of rescission affirming it, it follows that a voidable contract may be ^y 6 ^ ea e avoided by or -fa against the personal representatives of r j, g^ji the contracting parties (fc). And further, as a contract against for the sale of land is enforceable in equity by or represen- against the heirs or devisees of the parties, so it may tatiyes. be avoided by or against them where grounds of avoid- ance exist (I). B. The contract cannot be rescinded after the position No rescis- of the parties has been changed so that the former state sion unless of things cannot be restored^ j£»~ (/) Lindley, L. J. 23 Ch. D. at p. 437. to former (g) Maynard v. Eaton, 9 Ch. 414. position. (h) 7 Ch. 55. Cp. Clough v. L. & N. W.'Ry. Co. supra, p. 529. (i) But Wickens, V.-C. thought otherwise in the court below (12 Eq. 331) and the correctness of the reversal is doubted by Lord Justice Lindley (2. 1426.) (7c) Including assignees in bankruptcy: Load v. Green, 15 M. & W. 216, 15 L. J. Ex. 113; Donaldson v. Farwell, 3 Otto (93 TJ. S.) 631. (1) Gresley v. Mousley, 4 De G. & J. 78: and see cases cited in next chapter, ad fin., and Charter v. Trevelyn, 11 CI. & P. 714, 26 The party rescinding must return the consideration or what- ever else he received under the contract and otherwise do what 576 THE RIGHT OF RESCISSION. Where the party in fault has acted on the faith of the contract. Common dealings with subject- matter of contract. [*542] This may happen in various ways. The party who made the misrepresentation in the first instance may have acted on the faith of the contract being valid in such a manner that a subsequent rescissiou would work irreparable injury to him. And here the rule applies, but with the important limitation, it seems, that he must have so acted to the knowledge of the party misled and without protest from him, so that his conduct may be said to be induced by the other's delay in repudiating the contract. Thus where a policy of marine insurance is voidable for the non-disclosure of a material fact, but the delay of the underwriters in repudiating the in- surance after they know the fact induces the assured to believe that they do not intend to dispute it, and he consequently abstains from effecting any other insurance, it would probably he held that it is then too late for the underwriters to rescind (m). Or the interest taken under the contract by the party misled may have been so dealt with that he cannot give back the same thing he received. 27 On this principle a shareholder cannot repudiate his shares if the character and constitution of the company have in the meantime been altered. This was the case in -^ Clarke v. Dickson (n), where the plaintifl; had taken shares in a cost-book mining com- pany. The company was afterwards registered under the Joint Stock Companies Act then in force, apparently for the sole purpose of being wound up. In the course of the winding-up the plaintiff discovered that fraudu- lent misrepresentations had been made by the directors. But it was by this time impossible for him to return what he had got; for instead of shares in a going con- cern on the cost-book principle he had shares in a limited liability company which was being wound up (o). It was held that it was too late to repudiate the shares, where the parties on both sides were ultimately representatives, and as to the defendants through more than one succession. (m) Per Cur. Morrison v. Universal Marine Insurance Co. (Ex. Ch.), L, E. 8 Ex. at p. 205; cp. Clough v. L. & N. W. By. Co. (Ex. Ch.), L. E. 7 Ex. at p. 35. (n) E. B. & E. 148; 27 L. J. Q. B. 223. (o) The fact of the wiDding-up having begun before the re- pudiation of the shares is of itself decisive according to the later cases under the present Companies Act: but here the point was hardly made. will put him and the other party in statu quo. McMichael v. Kilmer, 76 N. Y. 36; Spencer v. St. Clair, 57 N. H. 9; Brown v. Witter, 10 Ohio, 142; Jennings v. Gage, 13 111. 610; California Steam Nav. Co. ». Wright, 8 Cal. 585. 27 Moore v. Bare, 11 Iowa, 198; Barber v. Lyon, 8 Blackf. 215; Barnett v. Stanton, 2 Ala. 181; Desha v. Robinson, 17 Ark. 228. misled. WHERE RESCISSION INADMISSIBLE. 577 and his only remedy was by an action of deceit against the directors personally responsible for the false state- ments (p). As Crompton, J. pat it, "You cannot both eat your cake and return your cake" (q). A similar case on this point is Western Bank of Scotland v. Addie (r). There the company was an unincorporated joint stock banking company when the respondent took his shares in it. As in Clarke v. Dickson, it was after- wards incorporated and registered for the purpose of a voluntary winding-up. It was held as a probable opinion by Lord Chelmsford, and more positively by Lord Cranworth, that the change in the condition of the company and of its shares was such as to make restitu- tion impossible, and therefore the contract could not be rescinded (s). There issome reason to thinkthat where goods or securities have been delivered under a contract voidable by the buyer on the ground of fraud, and before the repudiation their value has materially fallen through some cause unconnected with the fraud, this is such a change in the condition of the thing contracted for -fa as to make restitution impossible in law (t). The [ -fa 543] case is simpler where the party misled has himself chosen Conduct to deal with the subject-matter of the contract, by of party- exercising acts of ownership or the like, in such a manner as to make restitution impossible; and it is of course still plainer if he goes on doing this with know- ledge of all the facts; if the lessee of mines, for example, goes on working out the mines after he has full infor- mation of the circumstances on which he relies as en- titling him to set aside the lease (u). So a settlement of partnership accounts or a release contained in a deed of dissolution (x) cannot be disputed by one of the parties if in the meantime the concern has been com- pletely wo and up and he has taken possession of and sold the partnership assets made over to him under the arrangement (y); and an arrangement between a com- pany and one of its directors which has been acted upon by the company so as to change the director's position (p) "Which course was accordingly taken with success: Clarke v. Dickson, 6 C. B. N. S. 453; 28 L. J. C. P. 225. (q) E. B.'& E. at p. 152. (r) L. E. 1 Sc. & D. 145. (s) It would seem, but it does not clearly appear, that in this case also the misrepresentations were not discovered till after the commencement of the winding-up. (t) Waddell v. Blockey, 4 Q. B. D. 678, 683, per Thesiger, L. J. (u) Vigers v. Pike, 8 CI. & F. 562, 650. (x) Urquart v. Macpherson, 3 App. Ca. 831. Skilbeck v. Hilton, 2 Eq. 587. 37 PRINCIPLES OP CONTRACT. 578 THE RIGHT OF RESCISSION. T*544]. No rescission against innocent purchasers for value. Fraudulent roles. cannot afterwards be repudiated by the company (z). So a purchaser cannot after taking possession maintain an action to recover back his deposit (a). The right to recover back money paid under an agree- ment on the ground of mistake, failure of considera- tion, or default of the other party is also subject to the same rule. 28 Thus a lessee who has entered into posses- sion cannot recover back the premium paid by him on the ground of the lessor's default in executing the lease and doing repairs to be done by him under the agree ■ ment(fe): nor can a party recover back an excessive payment after his own dealings have made it impossi- ble to ascertain what was really due (c). ■^ C. The contract cannot be rescinded after third per- sons have acquired rights under it for value. 29 The present rule is altogether, as the last one is to some extent, a corollary from the main principle that a contract induced by fraud or misrepresentation is as such not void but only voidable. The result is that when third persons have acquired rights under the transaction in good faith and for value, those rights are indefeasible. The rule is also stated to be an ap- plication of the principle of convenience "that where one of two innocent parties nmst suffer from the fraud of third, the loss should fall on the one who enabled the third party to commit the fraud" (d). 30 Thus when a sale of goods is procured by fraud, the property in the goods is transferred by the contract (e), (a) Sheffield Nickel Co. v. Unwin, 2 Q. B. D. 214. (a) Blackburn v. Smith, 2 Ex. 783; 18 L. J. Ex. 187; but it was also held that apart from this the objection came too late under the conditions of sale in the particular case. (b) Hunt v. Silk, 5 East 449. (c) Freeman v. Jeffries, L. R. 4 Ex. .189, 197. (d) Babcock v. Lawson, 4 Q. B. D. at p. 400. (e) Load v. Green, 15 M. & W. 216; 15 L. J. Ex. 113; where 28 Where rescinding is permissible, and it has been made by the party not in fault, the one entitled may recover back the con- sideration or whatever else he has paid on the contract; includ- ing compensation for work done, goods delivered, and the like, prior to the rescission. Bayliss v. Pricture, 24 Wis. 651; Can- ada v. Id.. 6 Cush. 15; Drew v. Clagget, 39 N. H. 431; Cross- grove v. Himmerlich, 4 P. F. Sm. 203; Hickock v. Hoyt, 33 Conn. 553; Wea^herby v. Higgins, 6 Ind. 73; Warren v. Tyler, 81 111. 15; Dubois v. Delaware Canal, 4 Wend. 285. fe See Davis v. Building Union, 32 Md. 285; Culver v. Banks. 78 111. 625; Park Bank v. Watson, 42 N. Y. 490; Clark v. Thayer, 105 Mass. 216. 30 See Bartlett v. Henry, 10 Johns. 185; Bryan's Appeal, 5 Out. (Pa.) 389: Scarlett v. Gorham, 28 111. 319; Hoffman ti. Noble 6 Met. 68; Dickerson v. Evans, 84 111. 451. RIGHTS OF THIRD PERSONS. 579 subject as between the seller and the buyer to be re- vested by the seller exercising his option to rescind when he discovers the fraud. A purchaser in good faith from ttie fraudulent buyer acquires an indefeasi- ble title (/). S1 And a person who takes with notice of the f raud is a lawful possessor as against third persons, and as such is entitled to sue them for all injuries to the property, unless and until the party defrauded ex- ercises his right of rescission (g). The same rule holds good as to possession or other partial interests in property. A. sells goods to B., but resumes the possession, by arrangement with B., as a security for the price. Afterwards B. induces A. to re- deliver possession of the goods to him by a fraudulent misrepresentation, and thereupon pledges the goods to C, who advances money -jf upon them in good faith [ "A" 545] and in ignorance of the fraud. This pledge is valid, and C. is entitled to the possession of the goods as against A. (fe). It must be carefully observed that a fraudulent pos- Distinction sessor cannot give a better title than he has himself, where there even to an innocent purchaser, if the possession has j_ s "° co ° tract not been obtained under a contract with the true owner, mer ely ob- but by mere false pretences as to some matter of fact tained by concerning the true owner's contract with a third per- fraudulent son. To put a simple case, A. sell goods to B. and de- P retences - sires B. to send for them. C. obtains the goods from A. by falsely representing himself as B.'s servant: now C. acquires neither property nor lawful possession, and cannot make any sale or pledge of the goods which will be valid against A., though the person advancing his it was held that a fraudulent buyer becoming bankrupt had not the goods in his order and disposition with the consent of the true owner; for the vendors became the true owners only when they elected to rescind and demanded the goods from the assignees. (/) White v. Garden, 10 C. B. 919; 20 L. J. C. P. 167; Steven- son v. Newnham (Ex. Ch.), 13 C. B. 285, 303; 22 L. J. C. P. 110, 115. The statute 24 & 25 Vict. c. 96, s. 100, which provides for restitution to the true owner of chatties obtained by false pretences, &c, after conviction of the offender, has been construed in accordance with this principle: Moyce v. Newington,4 Q.B.D.32. (49] Judicial Committee in this form: "In order that the remedy should be lost by laches or delay, it is, if not uni- versally, at all events ordinarily . . necessary that there should be sufficient knowledge of the facts constituting the title to relief " (x). To the same effect it has been said in the Supreme Court of the United States: " Acquiescence and waiver are always questions of fact. There can be neither with- out knowledge." And the knowledge must be actual, not merely possible or potential : "the wrongdoer cannot make extreme vigilance and promptitude conditions of rescission" (y). 3i Acquiescence need not be manifested by any positive act; the question is, whether there is sufficient evidence either from lapse of time or from other circumstances of " a fixed, deliberate and unbiased determination that the transaction should not be impeached " (2). In estimat- ing the weight to be given to length of time as evidence of acquiescence the nature of the property concerned is material (a). And other special circumstances may prevent lapse of time even after everything is known from being evidence of acquiescence; aB when nothing is done for some years because the other party's affairs are in such a condition that proceedings against him would be fruitless (6). If a party entitled to avoid a transaction has precluded himself by his own acts or acquiescence from disputing it -jf in his lifetime, his representatives cannot come for- [ -j{ 550] ward to dispute it afterwards (c). («) 3 D. F. J. at p. 77. The case was one not of rescinding a contract but of a breach of trust; but the principles are the same. (a;) Lindsay Petroleum Co. v. Hurd, L. R. 5 P. C. 221, 241. (y) Pence v. Langdon, 9 Otto (99 U. S.), at p. 581. (z) Per Turner, L. J. Wright v. Vanderplank, 8 D. M. G. 133, 147. The epithets, however, are more specially appropriate to the particular ground of rescission (undue influence) then before the Court. More generally, the only proper meaning of acquies- cence is quiescence under such circumstances that assent may be reasonably inferred from it: per Cur. in DeBusschet). Alt (C. A.), 8 Ch. D. at p. 314. (a) 8 D. M. G. at p. 150. (6) Scholefield v. Templer, 4 De G. & J. 429. (e) Skottowe v. Williams, 3 D. F. J. 535, 541. 35 For illustrative cases as to the time of rescission see Nealon v. Henry, 131 Mass. 153; Knight v. Houghtolling, 85 N. C. 17. 584 THE RIGHT OF RESCISSION. Special ob- It is said that holders of shares in companies are ligation-of um i er a special obligation of diligence as to making their ' 1 1 J i ffG n ('*.■ in ' case of share- e l ec tion, but the dicta relate chiefly if not wholly to ob- holders. jections apparent on the face of the memorandum or arti- cles of association. With the contents of these a share- holder is bound to make himself acquainted, and must be deemed to become acquainted, when his shares are allotted (d). But objections which can be taken upon these must proceed on the ground, not of fraud or mis- representation as such, but of the undertaking in which shares are allotted being substantially a different thing from that which the prospectus described and in which the applicant offered to take shares. Nor are we aware of any case in which the rule has been applied to a re- pudiation of shares declared before a winding-up and on the ground of fraud or misrepresentation not appar- ent on the articles. Still it seems quite reasonable to hold that in the case of a shareholder's contract lapse of time without repudiation is of greater importance as evidence of assent than in most other cases. Same general The authorities thus far cited have been from courts rule at law, of equity. The same general principle was laid down Wch' in in the Exchequer Chamber in 1871. "We think the "' " party defrauded may keep the question open so long as he does nothing to affirm the contract . . . . In such cases the question is, has the person on whom the fraud was practised, having notice of the fraud, elected not to avoid the contract ? or has he elected to avoid it ? or has he made no election ? We think that so long as he has made no election he retains the right to determine it either way, subject to this, that if in the interval whilst [ -^ 5511 he is -^-deliberating an innocent third party has acquired an interest in the property, or if in consequence of his delay the position even of the wrongdoer is affected, it will preclude him from exercising his right to rescind. And lapse of time without rescinding will furnish evi- dence that he has determined to affirm the contract, and when the lapse of time is great it probably would in practice be treated as conclusive evidence to show that he has so determined (e). The French law treats the right of having a contract (d) Central Ry. Co. of Venezuela v. Kisch, L. R. 2 H. L. at p. 125; Oakes v. Turquand, ib. at p. 352; and see Ch. VIII. p. 433, above. (e) Per Cur. Clough v. L. & N. "W. Ry. Co., L. R. 7 Ex. at p. 34, repeated in Morrisons. Universal Marine Insurance Co., L. R. 8 Ex. at p. 203, and cited by Lord Blackburn in Erlanger v. New Sombrero Phosphate Co., 3 App. Ca. at p. 1277. See the remarks on delay and acquiescence in the several judgments in that case. UNFOUNDED CHARGES OF FRAUD. 585 judicially set aside for fraud, &c, as a substantive right Fixed period of action, and limits a fixed period of ten years, running of limitation from the discovery of the truth, within which it must by Fr ' law ' be exercised (/). One or two points remain to be mentioned, which we Unfounded have reserved to the last as being matter of procedure, charges of but which depend upon general principles. Courts of : raud d *f." justice are anxious to discover and discourage fraud in parties mak- every shape, but they are no less anxious to discourage ing them and rebuke loose or unfounded charges of fraud and must P a y personal misconduct. The facts relied on as establish- cos s " ing a case of fraud must be distinctly alleged and proved (gr). Where such charges are made and not proved, this will not prevent the party making them from having any relief to which he may otherwise ap- pear to be entitled, but he must pay the costs occasioned by the unfounded charges (h). And in one case, where the plaintiff made voluminous and elaborate charges of fraud and conspiracy, which proved -^- to be unfounded, [ ~jr 552] the Court of Appeal not only made him pay the costs of that part of the case, but refused to allow him the costs even of the part oh which he succeeded. It was held that he had so mixed up unfounded and reckless asper- sions upon character with the rest of the suit as to for- feit his title to the costs which he otherwise would have been entitled to receive (i). The special jurisdiction of courts of equity to order Independent the cancellation of an instrument obtained by fraud or jurisdiction misrepresentation is net affected by the probability or ° ^ ■ s t° practical certainty that the plaintiff in equity would men t f or have a good defence to an action on the instrument, nor fraud, &c. is it the less to be exercised even if the instrument is already in his possession. He is entitled not only not to have the contract enforced against him, but to have it judicially annulled (fc). 36 (/) Code Civ. 1304. (g) In equity pleading a charge of fraud in general terms would not support a hill on demurrer: Gilbert v. Lewis, 1 D. J. S. at p. 49, per Lord Westbury. (h) Hilliard v. Eiffe, L. R. 7 H. L. 39, 51, 52; London Chartered Bank of Australia v. Lempriere, L. E. 4 P. C. at p. 597; Clinch v. Financial Corporation, 5 Eq. at p. 483; per Lord Cairns, Thom- son v. Eastwood, 2 App. Ca. at p. 243. (i) Parker v. McKenna, 10 Ch. 96, 123, 125. (it) London and Provincial Insurance Co. v. Seymour, 17 Eq. 36 A person may, on application to the equity tribunal, have cancelled an inequitablebargain to which he has been entrapped or practically compelled, though there has been neither technical fraud nor technical duress. Davenport v. Cole, 2 Halst. 522; Birdsongu. Id., 2 Head., 289. 586 DURESS AKD UNDUE INFLUENCE. [*558J ' * CHAPTER XL DURESS AND UNDUE INFLUENCE. Contrct void- -^ * ne consent of one party to a contract is obtained by able if con- the other under such circumstances that the consent is sent not free, not free, the contract is voidabJe at the option of the party whose consent is so obtained. 1 It is quite clear that it is not merely void (a). 2 The transaction might indeed be void if the party were under actual physical constraint, as if his hand were forcibly guided to sign his name; or perhaps if he were so prostrated by fear as not to know what he was doing (6) ; but this would be not because his consent was not free, but because there was no consent at all. 3 What then are the circumstances which are held by English courts to exclude freedom of consent? The treatment of this question has at common law been singularly narrow and in equity singularly comprehen- sive. I. Duress at Common Law. The common At common law the coercion which will be a sufficient 85; and see Hoare v. Bremridge, 8 Ch. 22, there explained and distinguished. Therefore a defendant sued on an instrument ■which he alleges to he voidable may properly add to his defence a counter-claim for the cancellation of the instrument. It may also be proper to ask for a transfer to the Chancery Division if the action is in the Queen's Bench Division, but this is not a matter of course. See Story v. Waddle (C. A.), 4 Q. B. D. 289. Where, conversely, a purchaser sues for the return of his deposit, and the vendor counter-claims for specific performance, a transfer to the Ch. D. will generally be ordered: London Land Co. v. Harris, 13 Q. B. D. 540. (a) Co. 2 Inst. 482, and 2nd resolution in Whelpdale's ea. 5 Eep. 119. (6) Savigny, Syst. 3. 109. But the analogy of Matthews v. Baxter, L. R. 8 Ex. 132, is against this. 1 In general the party exercising the duress is bound arid the other has his election whether to abide by the contract or not. 2 Veach *. Thompson, 15 Iowa, 380; Clark v. Pease, 41 N. H. ' 414; Loomis v. Ruck, 56 N. Y. 462. 3 When the contract is absolutely void for duress, there is not even an imperfect consent because the entire lack of any yield- ing of the will evidently leaves the formal contracting simply null. Singer Mfg. Co. v. Rawson, 50 Iowa, 634; Nevada Bank v. Bryan, 62 Iowa, 42; Loomis v. Ruck, 56 N. Y. 462. PAYMENTS UNDER COMPULSION. 587 cause for avoiding a contract may consist in duress or law doctrine menace; that is, either in actual compulsion or in the of Duress. threat of it. In modern books the term duress is used to include both species. It is said that there must be some threatening of life or member, or of imprison- ment, or some imprisonment or beating itself. Threat- ening to destroy or detain, or actually detaining prop- erty, does not amount •^■to duress (c). And this ap- [ "Jf 554] plies to agreements not under seal as -well as to deeds (d). The reason appears to be that the de- tainer is a wrong of itself, for which there is an appro- priate remedy. Should the party chose to make terms instead of pursuing his rights (at all events when there is nothing to prevent him from so doing), he cannot afterwards turn round and complain that the terms were forced upon him (e). "It must be a threatening, beat- ing, or imprisonment of the party himself that doth make the deed, or his wife" (c) or (it seems) parent or child (/). And a threat of imprisonment is not duress In a case of unless the imprisonment would be unlawful. This is menace the illustrated by two rather curious modern cases, in both threat must of which the party's consent was determined Jay the thing unlaw- fear of confinement in a lunatic asylum. In Cum- ful. ming v. Ince (g) the plaintiff had been taken to a luna- tic asylum and deprived of the title deeds of certain property claimed by her. Proceedings were com- menced under a commission of lunacy, but stayed on the terms of an arrangement signed by counsel on both sides, under which the deeds were to be deposited in certain custody. The plaintiff afterwards repudiated this arrangement and brought detinue for the deeds. On an issue directed to try the right to the possession of the deeds as between herself and the other parties the Court held that in any view the defendants were wrong. For if their own proceeding under the commission were justified, they could not say the plaintiff was competent to bind herself, and if not, the agreement was obtained by the fear of a merely unlawful imprisonment and therefore voidable on the ground of duress. And it made no difference that the plaintiff 's counsel was party to the arrangement. His assent must be considered as enforced by the same duress: for as her agent he might (c) Shepp. Touch. 61. (d) Atlee v. Backhouse, 3M. & "W. 633; Skeate v. Beale, 11 A. & E. 983. (e) See Silliman v. United States, 11 Otto (101 U. S.), 465. (/) Ro. Ab. 1. 687, pi. 5; Bac. Ab. Duress (B). (g) 11 Q. B. 112, 17 L. J. Q. B. 105. 5S8 DUKESS AND UNDUE INFLUENCE. [*555] Money paid under cir- cumstances of compul- sion recover- able back. well have feared fpr her the -^-same evils that she feared for herself. In Biffin v. Bignell (h), on the other hand, the defendant was sued for necessaries supplied to his wife. She had been in a lunatic asylum under treatment for delirium tremens, and on her dis- charge the husband promised her 12s. a week to live apart from him, adding that if she would not he would send her to another asylum. The wife was accordingly living apart from the husband under this agreement. It was held that her consent to it was not obtained by duress, for under these circumstances "the threat, if any, was not of anything contrary to law, at least not so to be understood" : consequently the presumption of authority to pledge the husband's credit was effectually excluded, and the plaintiff could not recover («'). The narrowness of the common law doctrines above stated is considerably mitigated in practice, for when money has been paid under circumstances 6i practical compulsion, though not amounting to duress, it can generally be recovered back. This is so when the pay- ment is made to obtain the possession of property wrongfully detained (fe) ;* and the property need not be goods for which the owner has an immediate press- ing necessity, nor need the claim of the party detain- ing them be manifestly groundless, to make the pay- ment for this purpose' involuntary in contemplation of law (Z). 5 So it is where excessive fees are taken under colour of office, though it be usual to pay them (m) ; or where an excessive charge for the performance of a duty is paid under protest (n). The person who actu- {h) 7 H. & N. 877, 31 L. J. Ex.. 189.. (i) Qu. whether in any case he could have recovered without showing that the wife had repudiated the arrangment. (fc) Wakefield v. Newbon, 6 Q. B. 276, 280, 13 L. J. Q. B. 258; Green v. Duckett, 11 Q. B. D. 275. (/) Shaw v. Woodcock, 7 B. & C. 73. (m) Dew v. Parsons, 2 B. & Aid. 562; Steele v. Williams, 8 Ex. 625 22 L J. Ex. 225. (n) Parker v. G. W. Ey. Co., 7 M. & Gr. 253, 292. And see *_ The unlawful detention of personal property, or the threat to take it away unlawfully although made under the forms of law, while it may not have the effect of duress is deemed so far a compulsion that money paid to retain it or regain possession may be recovered as not parted with voluntarily. Chase v. Dwinall, 7 Greenl. 134: People v. Vischer, 9 Cal. 365; Sartwell v. Horton, 28 Vt. 370; Harvey v. Oluey, 42 111. 336; Laterrade v. Kaiser, 15 La. An. 296; Dakota v. Parker, 7 Minn. 267; Maxwell v. Gris- wold, 10 How. (U. S.) 242; Hendy v. Soule, Dready, 400. 6 Money paid to get control of goods lawfully attached on a just demand cannot be reclaimed. Kohler v. Wells, 26 Cal. 606; McMillan v. Vischer, 14 Cal. 232; Dickerman o.Lord, 21 Iowa,338. DOCTRINE OF UNDUE INFLUENCE. 589 ally receives the money may properly be sued, though he receive it only as an agent (o). The case of -fa one [ -^ 556] creditor exacting a fraudulent preference from a debtor as the price of his assent to a composition (p) is to a certain extent analogous. But in all these cases the But on the foundation of the right to recover back the money is g round not not the involuntary character of the payment in itself, ° n itself but but the fact that the party receiving it did no more of failure of than he was bound to do already, or something for considera- which it was unlawful to take money if he chose to do it, tion - though he had his choice in the first instance. Such payments are thus regarded as made without considera- tion. The legal effect of their being practically invol- untary, though important, comes in the second place; the circumstances explain and excuse the conduct of the party making the payment. Similarly in the kin- dred case of a payment under mistake the actual founda- tion of the right is a failure of consideration, and ig- norance of material facts accounts for the payment having been made. The common principle is that if a man chooses to give away his money, or to take his chance whether he is giving it away or not, he cannot afterwards change his mind; but it is open to him to show that he supposed the facts to be otherwise or that he really had no choice. The difference between the right to recover money back under circumstances of this kind and the right to rescind a contract on the ground of coercion is further shown by this, that an excessive payment is not the less recoverable if both parties hon- estly supposed it to be the proper payment (q). We therefore dwell no farther on this topic, but proceed to consider the more extensive doctrines of equity. IT. The equitable doctrine of Undue Influence. In equity there is no rule defining inflexibly what kind The equit- or amount of compulsion shall be sufficient ground for able doctrine avoiding a transaction, whether by way of agreement " f Undue or by -fa way of gift. 6 The question to be decided in r ± 557] other authorities collected in notes to Marriott v. Hampton, 2 Sm. L. C. (0) Steele v. Williams, supra. (p) Atkinson v. Denby, 6 H. & N. 778, in Ex. Ch. 7 ib. 934, 31 L. J. Ex. 362. Supra, Ch. VI., p. 336. (g) Dew v. Parsons, 2 B. & Aid. 562. 6 Contracts are set aside in equity for force exciting apprehen- sions short of the duress of the common law. Central Bank v. Copeland, 18 Md. '305; Davis v. Luster, C4 Mo. 43; Brown v. Peck, 2 Wis. 261; 1 Story's Eq. Sec. 239. 590 DURESS AND UNDUE INFLUENCE. Generality of the principle. Excercise of influence need not be proved in detail when relation of habitual in- fluence established. each case is whether the party was a free and voluntary agent (r). Any influence brought to bear upon a person entering into an agreement, or consenting to a disposal of prop- erty, which, having regard to the age and capacity of the party, the nature of the transaction, and all the circumstances of the case, appears to have been such as to preclude the exercise of free and deliberate judg- ment, is considered by courts of equity to be undue in- fluence, and is a ground for setting aside the act pro- cured by its employment. 7 "The principle applies to every case where influence is acquired and abused, where confidence is reposed and betrayed" (s). 8 And if it is once established that a person who stands in a position of commanding in- fluence towards another has obtained an advantage from him while in that position, it will be presumed, in the absence of rebutting proof, that the advantage was ob- tained by means of that influence: and it is not neces- sary for the party complaining to show the precise man- ner in which the influence was exerted. Indeed one chief object of the rules which will presently be dis- cussed is too prevent those who unduly obtain benefits from persons under their dominion from making them- selves safe by the secrecy of the particular transac- tion (£)." It is very possible that the circumstances would in many such cases, if they could be fully brought out, amount to proof of actual compulsion or fraud; so that it may perhaps be said that undue influence, as the term is used in courts of equity, means an influence in the nature of compulsion or fraud, the exercise of which in the particular instance to determine the will of the one party to the advantage of the other is not specifically proved, but is inferred from an existing relation of do- minion on the one part and submission on the other («). (r) Williams v. Bayley, L. R. 1 H. L. 200, 210. (s) Per Lord Kingsdown, Smith v. Kay, 7 H. L. C. at p. 779. It) See Dent v. Bennett, 4 My. & Cr. at p. 277. («) In Boyse v. Rossborough, 6 H. L. C. at p. 48, it is said that, taking the words in a wide sense, all undue influence may 'See Rau v. Van Zedlitz, 132 Mass. 164; Duncombe v. Rich- ards, 46 Mich. 166; Griffith v. Godey, 113 U. S. 95; Allore v. Jewell, 4 Otto, 511. 8 A more latent suspicion will not be sufficient. Hetrick's Appeal, 58 Pa. St. 497. 9 As a general rule relief will be afforded in equity, in all trans- actions in which "influence has been acquired and abused, in which confidence has been reposed and betrayed." Smith v. Kay, 7 H. L. Cas. 750. 1 PRESUMPTION FROM CONFIDENTIAL RELATIONS. 591 Given apposition, of general and habitual influence, [-^-558] its exercise in the particular case is presumed. But again, this habitual influence may itself be pre- General in- sumed to exist as a natural consequence of the condi- fluence pre- tion of the parties, though it be not actually proved sumed tron » that the one habitually acted as if under the domina- lotions ^ tion of the other. There are many relations of com- mon occurrence in life, from which "the Court presumes confidence put'' in the general course of affairs "and in- fluence exerted" in the particular transaction com- plained of (x). i0 Persons may therefore not only be proved by direct evidence of conduct, but presumed by reason of stand- ing in any of these suspected relations as they may be called, to be in a position of commanding influence over those from whom they take a benefit. 11 In either case they are called upon to rebut the presumption that the particular benefit was procured by the exertion of that influence, and was not given with due freedom and deliberation. They must "take upon themselves the whole proof that the thing is righteous" (y). We shall here observe that this, like several other of the peculiar rules of equity, is not a rule of substantive law but a rule of evidence. This is well shown in the arrangement of the Anglo-Indian codes. We find the rule of law laid down in the Contract Act (see Note O). But the lule of evidence finds its place, not here, but in the Evidence Act (I. of 1872, s. Ill):— "Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confi- dence, the burden of proving the good faith of be resolved into coercion and fraud; but the case the"re consid- ered is that of a will, in which undue influence has a more re- stricted meaning than in transactions inter vivos; see note (h), p. 560 in fra. (x) Per Lord Kingsdown, Smith v Kay, 7 H. L. C. 750, 779. (y) Gibson v. Jeyes, 6 Ves. 266, 276. The like burden of proof is cast upon those who take any benefits under a will which they have themselves been instrumental in preparing or obtaining: Fulton v. Andrew, L. R. 7 H. L. 448, 472. 10 The relation of trustee arid cestui que trust is one of peculiar confidence. 11 The same rules as that which exist between trustee and ces- tui que trust applies to all persons who occupy a fiduciary or quasi fiduciary relation as, executors or administrators, agents, (Bar- low v. Ehinelander, 1 Johns, ch. 550), husband and wife (Dar- lington's Appeal, 5 Norris, 512), medical or religious advisers (Greenfield's Estate, 12 Harris (Pa.), 232). See Hill on Trus- tees (4th Am. Ed. ), 547. 592 DURESS AND UNDUE INFLUENCE. the transaction is on the party who is in a po- sition of active confidence." [ *j{ 559] -^-It may be doubted whether the inconvenience of thus separating rules which are so closely connected in practice is not too heavy a price to pay for the illustra- tion of their distinct nature: but the value of the illus- tration in itself is unaffected by this. " Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influ- ence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed " (z) ■ " Nothing can be more important to maintain than the jurisdiction, long asserted and upheld by the Court, in watching over and protecting those who are placed in a situation to require protection as against acts of those who have influence over them, by which acts the person having such influence obtains any benefit to him- self. 12 In such cases the Court has always regarded the transaction with jealousy " (a) 13 — a jealousy almost in- invincible, in Lord Eldon's words (6). " In equity persons standing in certain relations to one another, such as parent and child (c), man and wife (d), doctor and pa- (z) Per Lord Chelmsford, Tate v. Williamson, 2 Ch. 55, 61. (a) Lord Hatherly, Turner v. Collins, 7 Ch. 329, 338. lb) Hatch v. Hatch, 9 Ves. at p. 296. (c) Archer v. Hudson, 7 Beav. 551 ; Turner v. Collins, 7 Ch. 329. (d) Lord Hardwicke's remarks in Grigby v. Cox, 1 Ves. sen. 517 (though not the decision, for it was not a gift but a purchase, and apparently there was no evidence to bear out the charge of collu- sion), and the decision in Nedby v. Nedby, 5 De 6. 1 Sm. 377, seem contra; but see Cobbett v. Brock, 20 Beav. 524; Page i>. Home, 11 Beav. 227; showing that there is a fiduciary relation between persons engaged to be married; and Coulson v. Allison, 2 D. F. J. 521, 524, the like as to persons living together as man and wife though not lawfully married. In all these cases the burden of proof was held to be on the man (as holding under such 12 McCormick v. Malin, 5 Blackf. 509; Turner v. Id., 44 Mo. 535; Bayliss v. Williams, 6 Cold. 442; Kline v. Id., 7 P. F. Sm. 120; Gillespie v. Holland, 40 Ark. 28; Brown v. Burbank, 64 Cal. 99. 13 Equity not only regards the transaction with a jealous eye but it goes further, and forbids any person standing in a fiduciary .relation, from making any profit in any way at theexpense of the party he is bound to protect. . / BURDEN OP PROOF. 593 tient (e), attorney and client (/), confessor and penitent, guard- ian and ward (17), are subject -fa to certain presumptions when [ "J?" OoOJ transactions between them are brought in question; and if a gift or contract made in favour of him who holds the position of influ- ence is impeached by him who is subject to that influence, the courts of equity cast upon the former the burthen of proving that the transaction was fairly conducted as if between strangers, that the weaker was not unduly impressed by the natural influence of the stronger, or the inexpeiienced overreached by him of more mature intelligence (ft). Lord Brougham in Hunter v. Atkins (i) made the Rules in following distinctions between the various kinds of rela- Hunter v tions as affecting the burden of proof in respect of the Atkins, validity of the act. J (a). If it is not snown that special confidence was reposed in the person taking the benefit, specific proof is required of incapacity, fraud, [or compulsion] vitiat- ing the particular transaction. (b ). If a confidential relation is proved (not being one of those next mentioned) proof is required of circum- stances making it likely that some advantage was taken of such relation [though not of the precise circumstances under which the act impeached took place]. (c). But if the party taking the benefit stands towards the other " in any of the known relations of guardian circumstances a position of influence) to support the transaction. It may not be so however in a case of mere illicit intercourse: see Farmer v. Farmer, 1 H. L. C. 724, 752. (e) Dent v. Bennett, 4 My. & Cr. 269; Ahearne v. Hogan, Din. 310; s. v. Blackie v. Clark, 15 Beav. at p. 603. (/} Gibson v. Jeyes, 6 Ves. 266; Holman v. Loynes, 4 D. M. G. 270; Gresley v. Mo'nsley, 4 De G. & J. 78, 94. (g) Hatch v. Hatch, 9 Ves. 297; Maitland v. Irving, 15 Sim. 437. (A) Per Lord Penzance, Parfitt v. Lawless, L. R. 2 P. & D. 462, 468. It is to be noted that this does not apply to wills, as to which undue influence is never presumed: ib. ; Boyse v. Rossbor- ough, 6 H. L. C. 2, 49; Hindson v. Weatherill, 5 D. M. G. 301, 311, 313: though a disposition by will may be set aside as well as an act inter vivos when undue influence is actually proved: but then, it seems: the influence must be such as to "overpower the volition without convincing the judgment:" Hall v. Hall, L. R. 1 P. & D. 482. See Walker v. Smith, 29 Beav. 394, where' between the same parties gifts by will were supported and a gift inter vivas set aside. Lord Penzance has now added to the list of suspected relations that of promoters of a company to the company which is their creature: Erlanger v. New Sombrero Phosphate Co., 3 App. Ca. at p. 1230. But is not personal confidence essential to make the present doctrine applicable ? And has any case gone the length of casting on a promoter the burden of proving in the first instance that a contract between him and the company was a fair one ? (0 3 My. & K. 113, 134. 38 PRINCIPLES OF CONTBACT. 594 DURESS AND UNDUE INFLUENCE. [*561] Wider rale in Hoghton v. Hoghton; gu. how far tenable. and ward, attorney and client, trustee and cestui que trust, &c. [this &c. is important, as will immediately ap- pear], then in order to support the [act] he ought to show that no such advantage was taken . . .the proof lies upon him that he -fc has dealt with the other party, the client, ward, &c, exactly as a stranger would have done." If it is asked, what are the classes of persons who fall within this last description, the answer is, that as the Court of Chancery has never ventured to define fraud (k), so it has refused to commit itself to any enumeration of the description of persons against whom the jurisdiction now in question ought to be most freely exercised." The cases in which it has been actually exercised are considered as merely instances of the application of a principle "applying to all the variety of relations in which dominion may be exercised by one person over another" (I). Therefore Lord Brougham's distinction between the cases in which influence must be proved, and those in which it is presumed, affords no certain guide: the &c. of his enumeration is a term of in- definite extent. At most it can be said that as to certain well- known relations the Court is now bound by authority to presume influence, and that as to any other relation which the Court judges to be of a confidential kind it is free to presume that an influence founded on the confidence exists, or to require such proof thereof as it may think fit. Another general proposition of much importance was laid down by Lord Romilly in Cooke v. Lamotte (m), and again soon afterwards in Hoghton v. Hoghton (n), which, if it could be relied on to its full extent, would considerably modify the doctrine of Hunter v. Atkins. This proposition is in substance as follows: — (k) 10 Ves. 306; 1 D. M. G. 691. (I) Sir S. Romilly, org Huguenin v. Baseley, 14 "Ves. 285, adopted by Lord Cottenham, Dent v. Bennett, 4 Mv. & Cr. 269, 277; Billage v. Southee, 9 Ha. 534, 540. Cp. 'D'Aguesseau (CEuvres, 1. 299) "Pareeque la raison de l'ordonnance est generale, et qu'elle comprend egalement tous ceux qui peuvent avoir quelque empire sur l'esprit des donateurs, vos arrets en ont etendu la disposition aux maitres, aux medecins, aux confes- seurs." (m) 15 Beav. 234, 240. (») 15 Beav. 275, 298 ; the most important passage of the judg- ment is also set out in the notes to Huguenin u. Baseley, 2 Wh. & T. L. C. 14 The jurisdiction extends to all those who occupy positions of trust and confidence towards others. Hill on Trustees (4th. Am. Ed.), 547. BURDEN OP PROOF. 595 In every case where "one person obtains, by voluntary T^- donation, a large pecuniary benefit from another," [ ^ 562] the person taking the benefit is bound to show "that the donor voluntarily and deliberately performed the act, knowing its nature and effect." 15 For this purpose a voluntary donation means any transaction in which one person confers a large pecuni- ary benefit on another, though it may be in form a con- tract (o); and the rule is said to obtain whether there is any confidential relation or not. And further, if the case is one of those in which "the Court, from the relations existing between the parties to the transaction, infers the probability of undue influence having been exerted," the presumption thus raised has to be rebutted by proving, hot only "that the person likely to be so influenced fully understood the act he was performing, but also that his consent to perform that act was not obtained by reason of the influence possessed by the person receiving the benefit." There is also a dictum of Lord Hatherley in favour of this extended doctrine: "It is clear that anyone taking any advantage under a voluntary deed, and set- ting it up against the donor, must show that he tho- roughly understood what he was doing, or, at all events, was protected by independent advice" (p). 16 It is nevertheless very -doubtful whether these wide statements, which (except, perhaps, as to Cooke v. Lamott) go beyond what was required for the decisions that gave occasion for them, can be accepted as law. They have not been contradicted in any reported case, but the* present writer has reason to know that tbey cannot be relied on in practice. Carried to their full extent, they would make an irrevocable gift almost impossible. No man could confer a boon with grace or enjoy it without misgiving. It has been suggested in the Irish Court of Chancery that if Hunter v. Atkins goes too far in one direction, •^ Cooke v. Lamotte and Hoghton v. Hoghton go too [ -fa 563] far in the other, and it may finally be established that (o) E. g. Cooke v. Lamotte, 15 Beav. 234; Dent v. Bennett, 4 My. & Cr. 269, 273. (p) Phillips v. Mullings, 7 Ch. at p. 246. 15 The scrutiny, to detect undue influence in cases of gifts is more severe and searching than in cases of contracts. Slocum v. Marshall, 2 "Wash. C. C. 397; Wistar's Appeal, 4 P. F. Sm. 63. 16 Bispham's Equity (4th. Ed.), Sec. 231. 596 DURESS AND UNDUE INFLUENCE. Burden of proof where" no special relation. Auxiliary rules and doctrines on special points. Voluntary dispositions generally. [*B64] the true rule lies between these (q). The supposed middle course would however be difficult to define. It is certain that in the absence of any special rela- tion from which influence is presumed, and when it is shown that the grantor fully understood the effect of his act, the burden of proof is on the person impeach- ing the transaction (r), and he must show affirmatively that pressure or undue influence was employed. 17 Having thus stated the fundamental rules, we may proceed to say something more of — (1) The auxiliary rules applied by courts of equity to voluntary gifts in general : ( 2 ) The like as to the influence presumed from special relations, and the evidence required in order to rebut' such presumption: (3) What are the continuing relations between the parties from which influence has been presumed: (4) From what circumstances, apart from any con- tinuing relation, undue influence has been inferred: and herein of, the doctrine of equity as to sales at an undervalue and " catching bargains " : (5) The limits of the right of rescission. 1. As to voluntary dispositions in general. (Cp Dav. Conv. 3. pt. 1. Appx. No. 4. A volutary settlement which deprives the settlor of the immediate control of the property dealt with, though it be made not for the benefit of any particular donee, but for the benefit of the settler's children or family ■ generally, and free from any suspicion of unfair motive, is not in a much better position than an absolute and immediate gift. It seems indeed doubtful whether the Court does not consider -^ it improvident to make in general indefinite contemplation of marriage the same kind of settlement which in contemplation and consid- eration of a definitely intended marriage it is thought improvident not to make (s). It is conceived that the ground on which such dis- positions are readily set aside at the instance of the set- tlor's representatives is not the imprudence of the thing ( q) Kirwan v. Cnllen, 4 Ir Ch. 322, 328. (r) Blackie v. Clark, 15 Beav. 595; Toker v. Toker, 31 Beav. 629, 3 D. J. S. 487. (s) Everitt v. Everitt, 10 Eq. 405; but here some of the usual provisions were omitted. 17 If there has been a fall and fair examination and communi- cation of every particular resting in the breast of the one who seeks to establish the contract with the person the contract will be upheld. Norris v. Taylor, 49 111. 17. CONFIDENTIAL RELATIONS : EVIDENCE. 597 alone, but an inference from that, coupled with other circumstances — such as the age, sex, and capacity of the settlor— that the effect of the act was not really con- sidered and understood at the time when it was done (t). n The absence of a power of revocation has often been As to power insisted upon as a mark of improvidence in a voluntary of revocation, settlement; and it has been even held to be in itself an almost fatal objection: but the doctrine now settled by the Court of Appeal is that it is not conclusive, but is only to be taken into account as matter of evidence, and is of more or less weight according to the other circum- stances of each case (w). 19 It was a rule of Chancery practice that a voluntary settlement could not be set aside at the suit of a de- fendant. The person impeaching it had to do so by a substantive proceeding in either an original or a cross suit (re). Under the new practice he will proceed by counter-claim if sued on the deed. 2. Auxiliary rules as to the influence presumed from Special rela- special relations. tlons - The principle on which the Court acts in such cases Age, &c. not is not affected either by the age or capacity of the per- material - son ^ conferring the benefit, or by the nature of the [ -fa 565] benefit conferred (y). "Where a relation of confidence is once established, 20 either some positive act or some complete case of aban- , donment must be shown in order to determine it:" it will not be considered as determined whilst the influ- (0 Ift.;\Prideaux v. Lonsdale, 1 D. J. S. 433: this ground is strongly taken by Jessel, M. R. in Dutton «>. Thompson, 23 Ch. D. at p. 281. So common ignorance or mistake of both parties as to the effect ot an instrument may sometimes be inferred on the face of it from its unreasonable or unusual character: see p. 454 supra. («) Hall v. Hall, 8 Ch. 430, where the former cases are re- viewed. (x) Way's tr. 2D. J. S. 365, 372; Hall o. Hall, 14 Eq. 365, 377. (y) Per Turner, L. J. Rhodes v. Bate, 1 Ch. 252, 257, 260; Holman v. Loynes, 4 D. M. G. 270, 283. 18 Lord Eldon, in Hugerenin v. Baseley 14 Vesey, 273, said the question is not whether she knew what she was doing but how the intention was produced. 19 When no motive for the gift appears, the absence of a power of revocation is prima facie evidence of mistake. Miskey's Ap- peal, 107 Pa. St. 628; G-arnsey v. Mundy, 24 N. J. Eq. 243; Rus- sell's Appeal, 25 P. F. Sm. 269. 20 See Cowell v. Cornell, 75 N. Y. 99; Farmer v. Id., 39 N. J. Eq. 211. 598 DURESS AND UNDUE INFLUENCE. Influence presumed to continue. Evidence required to rebut pre- sumption of influence. Father and son. ence derived from it can reasonably be supposed to re- main (y). Where the influence has its inception in the legal authority of a parent 2I or guardian, it is presumed to continue for some time after the termination of the legal authority, until there is what may be called a complete emancipation, so that a free and unfettered judgment may be formed, independent of any sort of control (z). It is obvious that without this extension the rule would be practically meaningless. It is said that as a general rule a year should elapse from the termination of tbe authority before the judgment can be supposed to be wholly emancipated: this of course does not exclude actual proof of undue influence at any subsequent time (a). With regard to the evidence to be adduced to rebut the presumption in a transaction between a father and a son who has recently attained majority, the father is bound "to show at all events that the son was really a free agent, that he -had adequate independent advice . . . that he perfectly understood the nature and extent of the sacrifice he was making, and that he wa» desirous of making it." Solicitor and "^° a sain, where a solicitor purchases or obtains a benefit from client. a client, a court of equity expects him to be able to show that he has taken no advantage of his professional position; that the client was so dealing with him as to be free from the influence which a solicitor must necessarily possess, and that the solicitor has done as much to protect his client's interest as he would have done in the case of a client dealing with a stranger" (6). [ -^t 566] ~k He must give all the reasonable advice against himself that he would have given against a third per- son (c). And he must not deal with his client on his (y) Per Turner, L. J. Khodes v. Bate, 1 Ch. 252, 257, 260; Hol- man v. Lyones, 4 D. M. G. 270, 283. (z) Archer v. Hudson. 7 Beav. 551, 560; "Wright v. Vanderplank, 8 D. M. G. 133, 137, 146. (a) See per Lord Cranworth, 7 H. L. C. at p. 772. (b) Savery v. King, 5 H. L. C. at p. 655. Casborne v. Bnrsham, 2 Beav. 76. seems not quite consistent with this, but there the plaintiff was not theclienthimself, but his assignee in insolvency, and the client's own evidence was rather favourable to the so- licitor. (c) Gibson v. Jeyes, 6 Ves. 266, 278. As to solicitor's charges see Lyddon i. Moss, 4 De. G. & J. 104. 21 Transactions between parent and child are not viewed with the samedegreeof suspicion as those between guardian and ward. The leading case on ihe exercise of paternal influence, is Taylor v. Id., 8 How. 183, and see also Noble v. Moses, 74 Ala. 604; Bergen v. Udall, 31 Barb. 9; Miller v. Simonds, 72 Mo. C69. DUTY ATTACHED TO FIDUCIARY RELATIONS. 599 own account as an undisclosed principal. "From the very nature of things, where the duty exists that he should give his client advice, it should be disinterested advice; he cannot properly give that advice when he is purchasing himself without telling his client that he is purchasing" (d). The result of the decisions has been thus summed up by the Judicial Committee of the Privy Council. "The Court does not hold that an attorney is incapable of purchasing from his client; but watches such a trans- action with jealousy, and throws on the attorney the onus of showing that the bargain is, speaking generally, as good as any that could have been obtained by due diligence from any other purchaser" (e). 22 He is not absolutely bound to insist on the intervention of another professional adviser. But if he does not, be must not be surprised at the transaction being disputed, and may have to pay his own costs even if in the result it is up- held. "The broad principle on -which the Court acts in cases of this pi(j nc i ar y description is that, wherever there exists such a confidence, of relations whatever character that confidence may be, as enables the per- generally, son in whom confidence or trust is reposed to exert influence over the person trusting him, the Court will not allow any trans- action between the parties to stand unless there has been the fullest and fairest explanation and communication of every par- ticular resting in the breast of the one who seeks to establish a contract with the person so trusting him" (/). In other words, every contract entered into by per- sons standing in such a relation is treated as being uberrimae -jtftdei, and may be vitiated by silence as to [ ^ 567] matters which one of two independent parties making a similar contract would be in no way bound to com- municate to the other; 23 nor does it matter whether the (d) McPherson v. Watt (Sc), 3 App. Ca. 254, 272. (e) Pisani v. A.-G..for Gibralter, L. H. 5 P. C. 516, 536, 540. According to Morgan v. Minett, G Ch. D. 638, there is a still more stringent rule as to gifts — an absolute rule of law "that while the relation of solicitor and client subsists the solicitor cannot take a gift from his client." Sed qu. See note at end of this chapter. (/) Per Page "Wood, V.-C. Tate v. Williamson, 1 Eq. at p. 536. 22 The attorney must prove the absence of undue influence, or the "fratts innexa clienta," as it is termed. 23 Miller v. Erwin, 1 McCord Ch., 524; Mahan v. Smith, 6 Heisk. 367; Motto. Harrington, 12 Vt. 199, Smith v. Brother- line, 12 P. F. Sm. 461, and see Perry v. Dickens, 105 Pa. St 83, for a case which is exceptional. 600 DURESS AND UNDUE INFLUENCE. omisBion is deliberate, or proceeds from mere error of judgment or inadvertence (g). Thus a medical attendant who makes with his pa- tient a contract in any way depending on the length of the patient's life is bound not to keep to himself any knowledge he may have professionallyacquired, whether by forming his own opinion or by consulting with other practitioners, as to the probable duration of the life (h). Perhaps the only safe way, and certainly the best, is to avoid such contracts altogether. In Qrosvenor v. Sherratt (i), where a mining lease had been granted by a young lady to her brother-in- law (the son of her father's executor) and uncle, at the inducement of the said executor, "in whom she placed the greatest confidence," it was held that it was not enough for the lessees to show that the terms of the lease were fair; they ought to have shown that no bet- ter terms could possibly have been obtained; and as they failed to do this, the lease was set aside (fc). This comes very near to the case of an agent dealing on his own account with his principal, when ''it must be proved that full information has been imparted, and that the agreement has been entered into with perfect good faith" (g). Nor is the agent's duty altered though the proposal originally came from the principal and the principal shows himself anxious to complete the trans- [ -jf 568] action as it -^-stands (m). The same rules apply to an executor who himself becomes the purchaser of part of his testator's estate (n). But this obligation of agents and trustees for sale appears (as we have already con- sidered it, p. 243 above) to be incidental to the special nature of their employment, and to be a duty founded on contract rather than one imposed by any rule of law which guards the freedom of contracting parties in gen- eral. — i> — . (g) Molony v. Keman, 2 Dr. & W. at p. 39. (ft) PoDham v. Brooke, 5 Russ^ 8. (t) 28 Beav. 659, 663. (k) This is an extreme case. The Indian Contract Act, s. 16 (see Note M. ) does not seem to go so far. It does make it the duty of a contracting party in loco parentis to the other to dis j close all material facts. "A. sells by auction toB. a horse which A. knows to be unsound. A. says nothing tc'B. about the horse's unsoundness. This is not fraud in A." (s. 17, illust. a): but if "B. is A.'s daughter and is just come of age, here the rela- tion of the parties would make it A. 's duty to tell B. if the horse is unsound" (ib. illust. b). (tit) Dally v. Wonham, 33 Beav. 154. (n) Baker u. Read, 18 Beav. 398; where however relief was re- fused on the ground of 17 years' delay. DUTY ATTACHED TO FIDUCIARY RELATIONS. 601 The duty cast upon a solicitor, or other person in a Family like position of conscience, who deals on his own account arra nge- with his client, of disclosing all material circumstances J^L within his knowledge, does not however bind him to tionally communicate a "speculative and consequential" possi- favoured, bility which may affect the future value of the subject- matter of the transaction, but which is not more in his own knowledge than in the client's (o). 2i It must not be forgotten that the suspicion with which dealings between parents and children presumably still under parental influence are regarded by courts of equity is to a certain extent counteracted by the favour with which dispositions of the kind known as family arrangements are treated. In many cases a balance has to be struck between these partly conflicting pre- sumptions. "Transactions between parent and child may proceed upon arrangements between them for the settlement of property, or of their rights in property in which they are interested. In such cases this Court regards the transactions with favour. It does not min- utely weigh the considerations on one side or the other. Even ignorance of rights, if equal on both sides, may not avail to impeach the transaction {p). 1 '" On the other hand, the transaction -^-may be one of bounty from the [ "^ 569] child to the parent, soon after the child has attained twenty-one. In such cases this Court views the trans- action with jealousy, and anxiously interposes its pro- tection to guard the child from the exercise of parental influence." (g). 26 (o) Edwards v. Meyrick, 2 Ha. 60, 74; Holman v. Loynes, 4 D. M. G. at p. 280. (p) Perhaps it is safer to say that the "almost invincible jeal- ousy" of the Court is reduced to "a reasonable degree of jeal- ousy;" cp. Lord Elden's language in Hatch v. Hatch, 9 Ves. at p. 296, and Tweddell v. Tweddell, Turn. & E. at p. 13. On the question of consideration see Williams v. Williams, 2 Ch. 294, 304. (q) Baker v. Bradley, 7 D. M. G. 597, 620. See also Wallace v. Wallace, 2 Dr. & W. 452, 470; Bellamy v. Sabine, 2 Ph. 425, 439; Hoghton v. Hoghton, 15 Beav. 278, 300; and on the doc- trine of family arrangement not applying when a son without consideration gives up valuable rights to his father. Savery r. King, 5 H. L. C. at p. 657. A sale by a nephew to his [great] 2 *See Henry v. Raiman, 1 Casey, 354. , 25 Family compromises especially if they are made in good faith and with full disclosure and favored in equity. Shartel's Appeal, 14 P. F. Sm. 25; Wilen's Appeal, 9 Out. (Fa.) 121. * The mere existence of the relation of parent and child is not ' enough to vitiate an act which, as between strangers would have been valid. Millican v. Id., 24 Texas, 426; Jenkins v. Pye, 12 Peters, 241; Bergen v. Udall, 31 Bark, 9. 602 DURESS AND UNDUE INFLUENCE. Relations from which influence presumed. It must be observed that the rules concerning gifts, or transactions in the form of contract which are sub- stantially gifts, from a son to a father, do not apply to the converse case of a gift from an ancestor to a de- scendant: there is no presumption against the validity of such a gift, for it may be made in discharge of the necessary duty of providing for descendants (?'). 3. .Relations between the parties from which influence has been presumed. It would be useless to attempt an exact classification of that which the Court refuses on principle to define or classify: but it may be convenient to follow an order of approximate analogy to the cases of well-known re- lations in which the presumption is fully established. Cases analogous to parent and child. [*570] a. Relations in which there is a power analogous to that of parent or guardian. 27 Uncle in loco parentis and niece: Archer v. Hudson, 7 Beav. 551; Maitland v. Iroing, 15 Sim. 437. Step-father in loco parentis and step-daughter: Kempson v. Ashbee, 10 Ch. 15; Espey v. Lake, 10 Ha. 260. Executor of a will (apparently in a like position) and the testator's daughter: Grosvenor v. Sherratl, 28 Beav. 659. •fc Husband of a minor's sister with whom the minor had lived for some time before he came of age: Griffin v. Deveuvill, 3 P. Wms. 131, n. But the mere fact of a minor living with a rela- tive of full age does not raise a presumption of influence; or the presumption, if any, is rebutted by proof of business-like habits and capacity on the donor's part: Taylorv. Johnston, lOCh. D. 603. Two sisters living together, of whom one was in all respects the head of the house, and might be considered as in. loco parentis towards the other, though the other was of mature years: Harvey v. Mount, 8 Beav. 439. Brother and sister, where the sister at the age of 46 executed a voluntary settlement under the brother's advice and for his benefit: Sharp v. Leach, 31 Beav. 491. Husband and wife on the one part, and aged and infirm aunt of the wife on the other: Griffiths v. Robins, 3 Mad. 191. Distant relationship by marriage: the donor old, infirm, and his soundness of mind doubtful; great general confidence in the uncle of his reversionary interest in an estate of which the uncle is tenant for life is not a family arrangement; Talbot v. Stani- forth, 1 J. & H. 484, 501. As to the amount of notice that will affect a purchaser, Bainbrigge v. Browne, 18 Ch. D. 188. (r) Beanland v. Bradley, 2 De G. & Sm. 339. 27 The same principles are applicable to cases in which a vol- untary gift is obtained by a person who stands in loco parentis to the donor. Dunn v. Chambers, 4 Barb. 376; Kennedy v. Id., 2 Ala. 571; Seers v. Shaffer, 2 Seld. 268. . RELATIONS WHENCE INFLUENCE PRESUMED. 603 donee, who was treated by him as a son: Steed v. Calley, 1 Kee. 620. This rather than the donor' s insanity seems the true ground of the case, see p. 644. Keeper of lunatic asylum and recovered patient: Wright v. Proud, 13 Ves. 136. There are also cases of general control obtained by one person over another without any tie of relationship or lawful authority : Bridgman v. Green, 2 Ves. Sr. 627, Wilm. 58, where a servant obtained complete control over a master of weak understanding: Kay v. Smith, 21 Beav. 522, affirmed nom. Smith v. Kay, 7 H. L. C. 750, where an older man living with a minor in a joint course of extravagance induced him immediately on his coming of age to execute securities for bills previously accepted by him to meet the joint expenses. In Lloyd v. Clark, 6 Beav. 309, the influence of an officer over his junior in the same regiment was taken into account as in- creasing the weight of other suspicious circumstances; but there is nothing in the case to warrant including the position of a su- perior officer in the general category of "suspected relations." b. Positions analogous to that of solicitor. 28 Cases analogous to Certificated conveyancer acting as professional adviser: Bhodes solicitor v. Bate, 1 Ch. 252. Counsel and confidential adviser: Broun v. and chent - Kennedy, 33 Beav. 133, 148, 4 D. J. S. 217. Confidential agent substituted for solicitors in general manage- ment of affairs: Huguenin v. Baseley, 14 Ves. 273 (s). ■y^-A person deputed by an elder relation, to whom a young man ["-JL-5711 applied for advice and assistance in pecuniary difficulties, to ascertain the state of hjs affairs and advise on relieving him from his debts: Tate v. Williamson, 1 Eq. 528, 2 Ch. 55. The relation of a medical attendant and his patient is treated as a confidential relation analogous to that between solicitor and client: Dent v. Bennett, 4 My. & Cr. 269; Billage v. Southee, 9 Ha. ' 534; Ahearne v. Hogan, Dru. 310; though in Blaclcie v. Clark, 15 Bea. 595, 603, somewhat less weight appears to be attached to it. It does not appear in the last case whether the existence of "any- (s) A fortiori, where charcters of steward and attorney are com- bined: Harris v. Tiemenheere, 15 Ves! 34. A flagrant case in Baker v. Loader, 16 Eq. 49. Cp. Moxon v. Payne. 8Ch. 881, where however the facts are not given in any detail. As to a land agent purchasing or taking a lease from his principal, see also Moloney v. Kernan, 2 Dr. & W. 31; Lord Sclsey v. Ehoads. 2 Sim. & St. 41, 1 Bli. 1. In Rossiter v. Walsh, 4 Dr. & W. 485, where the transaction was between an agent and a sub-agent of the same principals, the case was put by the bill (p. 487) ; but not decided, on the ground of fiduciary relation. See p. 567 above. 28 As to transactions between attorney and client see Wright?). Walker, 30 Ark. 44; Eyan v. Ashton, 42 Iowa, 365; Yonge v. Hooper, 73 Ala. 119. 604 DURESS AND UNDUE INFLUENCE. Spiritual influence mixed character of the cases. [ * 572] Undue influence without fiduciary relation. thing like undue persuasion or coercion" (p. 604) was merely not proved or positively disproved: on the supposition that it was disproved there would be no inconsistency with the other authori- ties. For another unsuccessful attempt to set aside a gift to a medical attendant, see Pratt v. Barker, 1 Sim. 1, 4 Russ. 507 ; there the donor was advised by his own solicitor, who gave positive evidence that the act was free and deliberate. o. Spiritual influence. z9 It is said that influence would be presumed as between a clergyman or any person in the habit of imparting religious in- struction and another person placing confidence in him Dent v. Bennett, 7 Sim. at p. 546. There have been two remarkable modern cases of spiritual influence in which there were claims to spiritual power and extraordinary gifts on the one side, and implicit belief in such claims on the other; it was not necessary to rely merely on the presumption of influence resulting there- from, for the evidence which proved the relation of spiritual confidence also went far to prove as a fact in each case that a general influence and control did actually result: Nottidge v. Prince, 2 Giff. 246; Lyon v. Home, 6 Eg. 655 (<)'. In the former case at all events there wr.3 gross imposture, but thespiritual dominion alone would have been sufficient ground to set aside the gilt: for the Court considered the influence of a minister of religion over a person under his direct spiritual charge to be stronger than that arising from any other relation (u). There seems to have been* also in Norton v. Belly, 2 Eden, 286, the earliest reported case of this class, a considerable admixture of actual fraud and imposi- tion. > The authority of Suguenin v. Baseley, 14 Ves. 273, as to this particular kind of influence, is to be found not in the judgment, which proceeds on the ground of confidential agency, but in Sir. S. Romilly's argument in ~fc reply, to which repeated judicial approval has given a weight scarcely if at all inferior to that of the decision itself. 4. Circumstances held to amount to proof of undue influence, apart from any continuing relation. In a case where a father gave security for the amount (t) In Lyon v. Home the evidence appears to have been in a very unsatisfactory condition, and on many particulars to have led to no definite conclusion : the case is therefore more curious than instructive. (it) 2 Giff. 269, 270. 29 As to validity of gifts from nuns to their convents see Whyte v. Mead, 2 Iredell, Eq. 420. As to medical and religious advisers see Ahearne v. Hogau. 1 Drury, 310; Greenfield's Estate, 12 Harris (Pa.), 232; McCarthy v. Id., 9 Ired. 620. RELATIONS WHENCE INFLUENCE PRESUMED. 605 of certain notes believed to have been forged by his son, Securities the holders giving him to understand that otherwise the obtained bv son would be prosecuted for the felony, the agreement Williams v ■was set aside, as well on the ground that the father acted Bay ley. under undue pressure and was not a free and voluntary agent, as because the agreement was in itself illegal, as being substantially an agreement to stifle a criminal prosecution (x). 30 In Ellis v. Barker (y) the plaintiff's,interest under a will was practically dependent as to part of its value on his being accepted as tenant of a farm the testator had occupied as yearly tenant. One of the trustees was the landlord's stewart, and in order to induce the plaintiff to carry out the testator's supposed intentions of provid- ing for the rest of the family he persuaded the land- lord not to accept the plaintiff as his tenant unless he would make such an arrangement with the rest of the family as the trustees thought right. Under this pressure the arrangement was executed: it was practi- cally a gift, as there was no real question as to the rights of the parties. Afterwards the deeds by which it was made were set aside at the suit of the plaintiff, and the trustees (having thus unjustifiably made them- selves partisans as between their cestuis que trust) had to pay the costs. 31 These are the most distinct cases we have met with of a transaction being set aside on the ground of undue influence specifically proved to have been used to pro- cure the party's consent to that particular transac- tion (z). -^In Smith y. Kay (a) a young man completely un- [ TT ols\ der the influence and control of another person and Smith v. acting under that influence had been induced to exe- ay * cute securities for bills which he had accepted during his minority without any independent legal advice; and the securities were set aside. There was in this case evidence of actual fraud; but it was distintly affirmed that the decision would have been the same without (x) Williams v. Bayley, L. E. 1 H. L. 200; cp. p. 288 above. (y) 7 Ch. 104. (z) Cp. Ormes v. Beadel, 2 Giff. 166, revd. 2 D. F. J. 333, on the ground that the agreement had afterwards been voluntarily acted upon with a knowledge of all the facts. (a) 7 H. L. C. 750. 30 Coffman v. Lookout Bank, 5 Lea, 232; Jordan v. Elliott, 12 W. N. of C. 56. 31 Also the deed of a married woman will be avoided if her acknowledgement was obtained by duress. Michener v. Cavender, 2 Wright (Pa.), 337; Loudrn v. Blythe, 4 Harris (Pa.), 532. 606 DURESS AND UNDUE INFLUENCE. Other circum- stances from which undue influence inferred. As to ^undervalue. General rule: undervalue has of itself no effect. [*574] it, it being incumbent on persons claiming under the securities to give satisfactory evidence of fair deal- ing (6). This comes very near to the peculiar class of cases on "catching bargains" with which we shall deal pre- sently. Undue influence may be inferred when the benefit is such as the taker has no right to demand [i. e. no nat- ural or moral claim] and the grantor no rational mo- tive to give (c). Inadequacy of the consideration, though in itself not decisive, may be an important element in the con- clusion arrived at by a court of equity with respect to a contract of sale. The general rule of equity in this matter has been thus stated by Lord "Westbury: "It is true that there is an equity which may be founded upon gross inade- quacy of consideration. But it can only be where the inadequacy is such as to involve the conclusion that the party either did not understand what he was about or was the victim of some imposition" (d). 32 ■^-The established doctrine is that mere inadequacy of price is in itself of no more weight in equity than at law (e). It is evidence of fraud, but, standing alone, by no means conclusive evidence (/). 33 Even (ft) Pp. 761, 770. The securities given were for an amount very much exceeding the whole of the sums really advanced and the interest upon them: p. 778. (e) Purcell v. M'Namara, 14 Ves. 91, 115. (d) Tennent v. Tennents, L. R. 2 Sc. & D. 6, 9. For a modern instance of such a conclusion being actual drawn by the Court from a sale at a gross undervalue, see Rice v. Gordon, 11 Beav. 265, 270; cp. Underhill v. Horwood, 10 Ves. at p. 219; Summers v. Griffiths, 35 Beav. 27, 33. and the earlier dictum there referred to of Lord Thurlow in Gwynne v. Heaton (1 Bro. C. C. 1, 9), that "to set aside a conveyance there must be an inequality so strong, gross, and manifest, that it must be impossible to state it to a man of common sense without producing au exclamation at the inequality of it." (c) Wood v. Abrey, 3 Mad. 417, 423; Peacock v. Evans, 16 Ves. 512, 517; Stillwell v. Wilkins, Jac. 280, 282. (/) Cockell v. Taylor, 15 Beav. 105, 115. 32 A contract will not be ill on the sole ground that the advan- tages of the bargain were greatly in favor of one of the parties: Robertson v. Smith, 11 Texas, 211. 33 Too small a consideration, while not enough in itself to im- pair the contract, may when combined with fraud, undue influ- ence, mental weakness, immature years or drunkenness produce a nullity of the contract, which no one alone could do. M'Clure v. Lewis, 4 Mo. App. 554; Howe Machine Co. v. Rosine, 87 111. 105; Parkhurst v. Hosford, 21 Fed. Rep. 827; Holland v. Barnes. 53 Ala. 83. UNDERVALUE. 607 when coupled with an incorrect statement of the con- sideration it -will not alone be enough to vitiate a sale in the absence of any fiduciary relation between the parties (g). But if there are other circumstances tending to show But coupled that the vendor was not a free and reasonable agent, the v/ . ltlci otner fact of the sale having been at an undervalue may be a stances" mav material element in determining the Court to setit aside, be material Thus it is when one member of a testator's family con- as evidence veys his interest in the estate to others for an inade- tht ^ consent, quate consideration, and it is doubtful if he fully un- °£ consenT derstood the extent of his rights or the effect of his wa s wanting, act (h). If property is bought at an inadequate price from an uneducated man of weak mind (i) or in his last illness (fc), who is not protected by independent advice, the burden of proof is on the purchaser to show that the vendor made the bargain deliberately and with knowledge of all the circumstances. Nay, more, when the vendor is infirm and illiterate and employs no sepa- rate solicitor, "it lies on the purchaser to show affirma- tively that the price he has given is the value," and if he cannot do this the sale will be set aside at the suit of the vendor (I). In 1871 a case in the Court of Ap- • peal was decided on the ground that "if a solicitor and mortgagee . . obtains a conveyance [of the mortgaged property] from the mortgagor, and the mortgagor is a man in humble circumstances, without any legal advice, then the onus of justifying the transaction, -^-andshow- [ tAt 575] ing that it was a right and fair transaction, is thrown upon the mortgagee" (m). Similarly if a purchase is made at an inadequate price from vendors in great distress, and without any profes- sional assistance but that of the purchaser's attorney, "these circumstances are evidence that in this purchase advantage was taken of the distress of the vendors," and the conveyance will be set aside (n). 34 (g) Harrison r. Guest, G D. M. G. 424, 8 H. L. C. 481. (h) Sturge v. Sturge, 12 Beav. 229; cp. Dunnage v. White, 1 Swanst. 137, 150. (i) Longmate v. Ledger, 2 Giff. 157, 163 (affirmed on appeal, see 4 D. F. J. 402). (fc) Clark v. Malpas. 31 Beav. 80, 4 D. P. J. 401. (/) Baker v. Monk, 33 Beav. 419, 4 D. J. S. 388, 391. (m) Lord Hatherley, C. Prees v.' Coke. 6 Ch. 645, 649: though in general there is no rule against a mortgagee buying from his mortgagor: Knight v. Majoribanks, 2 Mac. & G. 10; and see Ford v. Olden, 3 Eq. 461. (») "Wood v. Abrey, 3 Mad. 417, 424. 84 Leake on Contracts, 427. 608 DURESS AND UNDUE INFLUENCE. "Equality between the contracting parties." [•576] Can specific performance be refused on the ground of under- value alone? It has even been said that to sustain a contract of sale in equity "a reasonable degree of equality between the contracting parties " is required (o). But such a dic- tum can be accepted only to this extent: that when there is a very marked inequality between the parties in social position or intelligence, or the transaction arises out of the necessities of one of them and is of such a nature as to put him to some extent in the power of the other, the Court will be inclined to give much more weight to any suspicious circumstances attending the formation of the contract, and will be much more exacting in its demands for a satisfactory explanation of them, than when the parties are on such a footing as to be presumably of equal competence to understand and protect their re- spective interests in the matter in hand. The true doc- trine is well expressed in the Indian Contract Act, s. 25, expl. 2. " An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given." A sale -fa made by a per- son of inferior station, and for an inadequate price, was upheld by the Court of Appeal in Chancery,and ultimately by the House of Lords, when it appeared by the evidence that the vendor had entered into the transaction delib- erately, and had deliberately chosen not to take inde- pendent professional advice (p). It is not so clear however that a degree of inadequacy of consideration which does not amount to evidence of fraud, &c, such as to be a ground for avoiding the con- tract, may not yet be a sufficient ground for refusing specific performance. The general rule as to granting specific performance, so far as it bears on this point, is that the Court has a discretion not to direct a specific performance in cases where it would be highly unreason- able to do so: it is also said that one cannot define be- forehand what shall be considered unreasonable (q). On (o) Longmate v. Ledger, 2 Gift at p. 163, by Stuart, V.-C. : cp. the same judge's remarks in Barrett v. Hartley, 2 Eq. at p. 794. But see the more guarded statement in Wood v. Abrey, 3 Mad. at p. 423. "A court of equity -will inquire whether the parties really did meet on equal term's; and if it be found that the vendor was in distressed circumstance*, and that advantage was taken of tlmi distress, it will avoid the contract. ' ' ( p) Harrison v. Guest, 6 D. M. G. 424, 8 H. L. C. 481 ; cp. Rosher v. Williams, 20 Eq. 210. (q) See Watson v. Marston, 4 D. M. G" 230, 239, 240, and dicta there referred to. UNDERVALUE AND SPECIFIC PERFORMANCE. 609 principle it might perhaps be doubted whether it should over be considered unreasonable to make a man perform that which he has the present means of performing, and which with his eyes open he has bound himself to per- form by a contract valid in law. And it is said in Wat- son v. Marston (g)'that the Court "must be satisfied that the agreement would not have been entered into if its true effect had been understood." Possibly this may be considered to overrule those earlier decisions which fur- nish authority for refusing a specific performance simply od the ground of the apparent hardship of the contract. The question now in hand is whether inadequacy of consideration, not being such as to make the validity of the contract doubtful (r), is regarded ■£ as making the [ -jf 577] performance of it highly unreasonable within the mean- ing of the above rule: and for this purpose we assume the generality of the rule not to be affected by anything that was said in Watson v. Marston. The authorities are so conflicting that the best course Conflicting seems to be to set them against one another and leave authorities the matter to the reader's judgment. Our own impres- collected, sion is that the opinion to which Lord Eldon at least inclined, and which was expressed by Lord St. Leon- ards and Lord Komilly, is the better supported and the more likely to be upheld whenever the point come be- fore a Court of final appeal. In favour of treating inadegua- Contra, cy of consideration OS a ground for refusing specific performance. Young v. Clark, Pre. Ch. 538. Savilie v. Saville,l P.Wms.745. Collier v. Brown, 1 Cox 428. Underwood v. JSilehcox, 1 Ves. Sr. 279. Otter eases of the early part of the 18th century cited from MS. in Howell y. George, 1 Mad. p. 9, note (I). (r) Doubt as to the validity of the contract, short of the conclu- sion that it is not valid, has always been held a sufficient ground for refusing specific performance. Probably this arose from the habit or etiquette by which courts of equity, down to recent times, never decided a legal point when they could help it. Now that legal and equitable jurisdiction are united the Court will consider the question of damages if an action for specific performance is brought in a case such that under the old practice the bill would have been dismissed without prejudice to an action: Tamplin v. James (C. A.), 15 Ch. D. 215. 39 PRINCIPLES OF CONTRACT. 610 DURESS AND' UNDUE INFLUENCE. Day v. Newman, 2 Cox 77, see p. 90, and ad fin.: the case was of a sale at a great over-value (nearly double the real value), and there were cross suits for specific performance and for re- scission. There was nothing to show fraud, but it was consid- ered "too hard a bargain for the Court to assist in." Both bills were dismissed! White v. Damon, 7 Ves. 30, before Lord Kosslyn. In Wedgewood v. Adams, 6 Beav. 600, 606, specific perform- ance was not enforced against trustees for sale, when the con- tract (as the Court inclined to think, but with some doubt [ -j{ 578] whether such could jf have been the real intention of the parties) bound them personally to exonerate the estate from in- cumbrancers', and it was doubt- ful whether these did not ex- ceed the amount of the pur- chase-money. But this was not like the ordinary case of an agreement between a purchaser and a vendor in his own right, since the trustees undertook a personal risk without even the chance of any personal advan- tage. Faine v. Browne, before Lord Hardwicke, cited 2 "Ves. Sr. 307, and referred to by Lord Lang- dale in Wedgwoods. Adams, was a peculiar case: the hardship was not in any inadequacy of the purchase-money, but in the fact that the vendor would lose half of it by the condition on which he was entitled to the property. In Faleke v. Gray, 4 Drew. 651, (in 1859) there was some- thing beyond mere inadequacy: Anon. Cited in Mortimer v. Capper, 1 Bro. C. C. 158: (sale of an allotment to be made by Inclosure Commissioners; value unascertained at date of con- tract). White v. Damon, 7 Ves. 30, 34, on re-hearing before Lord Eldon (but limited to sales by auction). Coles v. Treeothick, 9 Ves.' 234, 246, per Lord Eldon: "unless the inadequacy of price is such as shocks the conscience, and amounts in itself to conclusive and decisive evidence of fraud in the transaction, it is not itself a sufficient ground for re- fusing a specific performance." Western v. Bussell,' 3 Ves. & B. 187, 193. Borell v. Dann, 2 Ha. 440, 450, per Wigram, V.-C. Abbott v. Sworder, 4 De G. & Sm. 448, 461 : per Lord St. Leo- nards, "the undervalue must UNDERVALUE AND SPECIFIC PERFORMANCE. 611 the agreement was for a pur- chase at a valuation, and there was no valuation, by a compe- tent person. V.-C. Kindersley however expressed a distinct opinion that specific perform- ance ought to be refused on the mere ground of inadequacy, even if there were none other, relying chiefly on White v. Da- ' man and Day v. Newman. He referred also to Vaughan v. Thomas, 1 Bro. C. C. 556 (a not very intelligibly reported case, where the agreement was for the re-purchase of an annui- ty: the statement of the facts raises some suspicion of fraud): — to Heathcole v. Paignon, 2 Bro. C. C. 167; (but this and other cases there cited in the report- er's notes prove too much, for they are authorities not for refus- ing specific performance, but for •fa actually setting aside agree- ments on the ground of under- value alone, which we have seen is contrary to the modern law:) — and to Kien y. Stukeley, 1 Bro. P. C. 191, where specific per- formance was refused by the House of Lords, reversing the decree of the „ Exchequer in equity (but on another ground, the question of value being "a very doubtful point among the Lords," S. C. Gilb. 155, mom. Keen v. Stvekley). The decisions in Cosligan v. nastier, 2 Sch. & L. 160, and Howell v. George, 1 Mad. 1 (though the dicta go farther), show only that a man who has contracted to dispose of a greater interest than he has will not be compelled to com- plete his title by purchase in order to perform the contract. be such as to shock the con- science' ' [i. e. as to be sufficient evidence of fraud, cp. Lord El- don's dictum supra]. Lord Justice Pry, writing in 1858, considered this to be "the well established principle of the Court." (On Specific Per- formance, \ 281); and this is repeated in the second edition, 1881 (2 424,- p. 194), notwith. standing the case of Faleke v. Gray, which is said to ' 'break the recent current of authori- ties." Haywood v. Cope, 25 Beav. 140, 153. [*579] 612 DURESS AND UNDUE INFLUENCE. Exceptional pases of expectant heirs and rever- sioners. [•580] A brief notice of Continental laws as to sales at an undervalue, and of the French law on tbe head of cap- tation (partly corresponding to our Undue Influence;, will be found in the Appendix (s). We have still to deal with an important exceptional class of cases. That which may have been a discre- tionary inference when the discretion of courts of equity was larger than it now is has in these cases be- come a settled presumption, so that fraud, or rather un- due influence, is "presumed from the circumstances and condition of the parties contracting" {t). lb The term fraud is indeed of common occurrence both in' the earlier (t) and in the later authorities: but "fraud does not here mean deceit or circumvention ; it means an unconscientious use of the power -fa arising out of these circumstances and conditions " (u) : and this does not come within the proper meaning of fraud, which is a misrepresentation (whether by untrue assertion, sup- pression of truth or conduct) made with the intent of creating a particular wrong belief in the mind of the party defrauded. Perhaps the best word to use would be imposition, as a sort of middle term between fraud, to which it comes nearer in popular language, and com- pulsion, which it suggests by its etymology. The class of persons in dealing with whose contracts the Court of Chancery has thus gone beyond its gen- eral principles are those who stand, in the words of Sir George Jessel, "in that peculiar position of rever- sioner or remainderman which is oddly enough de- scribed as an expectant heir. This phrase is used, not in its literal meaning, but as including every one who has either a vested remainder or a contingent remain- der in a family property, including a remainder in a (s) Note P. (t) Lord Hardwicke in Chesterfield v. Janssen, 2 Ves. Sr. at p. 125, classifies this in general terms as " a third kind of fraud:" he proceeds (at p. 157) to make a separate head of catching bar- gains, as "mixed cases compounded of all or several species of fraud:" but the phrase as to presumption is almost literally re- peated, and it is obvious that these cases really come under his third head. (u) Per Lord Selborne, Earl of Aylesford v. Morris, 8 Ch. 484, 491. 35 Heirs and reversioners are very often driven by distress to make bargains which are unjust and unfair to themselves; and it has been found necessary to protect them by putting the onus of proving that the price is an adequate one on the shoulders of the purchaser. Needles «. Id., 7 Ohio (N. S.), 432; Mastin v. Marlow, 65 N. C. 695; Nimmo v. Davis, 7 Texas, 26; Power's App., 13 P. F. Sm, 443; Boynton v. Edwards, 1 Hoff. Ch. 382. EXPECTANT HEIRS AND REVERSIONERS. 613 portion as well as a remainder in an estate, and every- one who has the hope of succession to the property of an ancestor — either by reason of his being the heir ap- parent or presumptive, or by reason merely of the ex- pectation of a devise or bequest on account of the sup- posed or presumed affection of his ancestor or relative. More than this, the doctrine as to expectant heirs has been extended to all reversioners and remaindermen, as appears from Tottenham v Emmet (c) and Earl ofAyles- ford v. Morris (d). So that the doctrine only includes the class I have mentioned, who in some popular sense might be called expectant heirs, but also all remainder- men and reversioners" (e). The Act 31 Vict. c. 4 has modified the practice of Motives for the Court of Chancery (which now continues in the exceptional Chancery Division) less than might be supposed: it is treatment, therefore necessary to give in the first place a connected |- ?f e ( ?S m P" view of the -^- whole doctrine as it formerly stood. It L. "* J was considered that persons raising money on their ex- g. au ^ pectancies were at such a disadvantage as to be peculi- arly exposed to imposition and fraud, and to require an extraordinary degree of protection (/): and it was also 2. Public thought right to discourage such dealings on a general policy as to ground of public policy, as tending to the ruin of fami- wel ? are of lies (gr) and in most cases involving " a sort of indirect fraud upon the heads of families from whom these transactions are concealed" (h). Moreover laws against usury were in force at the time 3. Evasion when courts of equity began to give relief against these of usury " catching bargains " as they are called (i) ; any trans- l a-ws - (c) 14 W. R. 3. (d) 8 Ch. 484. {e) Beynon v. Cook, 10 Ch. 391, n. (f) ''A degree of protection approaching nearly to an inca- pacity to bind themselves by any contract:" Sir W. Grant in Peacock v. Evans, 16 Ves. at p. 51 4. (g) Twistleton v. Griffith, 1 P. Wms. at p. 312; Cole v. Gib- bons, 3 P. "Wms. at x>. 293; Chesterfield v. Janssen, 2 Ves. Sr. at p. 158. (ft) Per Lord Selborne, Earl of Aylesford v. Morris, 8 Ch. 484, 492; Chesterfield v. Janssen, 2 Ves. Sr. 124,. 157. (?) In Wiseman v. Beake, 2 Vern. 121, it appears from the statement of the facts that twenty years or thereabouts after the Restoration this jurisdiction was regarded as a novelty: for the defendant's testator " understanding that the Chancery began to relieve against such bargains" took certain steps to make him- self safe, but without success, the Court pronouncing them "a contrivance only to double hatch the cheat." But in Ardglasse v. Muschamp, 1 Vern. 238, it is said that many precedents from Lord Bacon's, Lord Ellesmere's and Lord Coventry's times were produced. 614 DUKESS AND UNDUE INFLUENCE. Extension ot the doctrine. [*582] Former actions which looked like an evasion of those laws were very narrowly watched, and it may be surmised that when they could not be brought within the scope of the statutes the Courts felt justified in being astute to de- feat them on any other grounds that could be dis- covered (fc). The doctrine which was at first introduced for the protection of expectant heirs was in course of time ex- tended to all dealings whatever with reversionary in- terests. In its finally developed form it had two branches : — ■Jt 1. As to reversionary interests, whether the rever- sioner were also an expectant heir or not : a. The rule 1 of law that the vendor might avoid the sale for undervalue alone : S6 b. The rule of evidence that the burden of proof was on the purchaser to show that he gave the full value. 37 It is this part of the doctrine that is changed by the Act 31 Vict. c. 4. . 2. As to " catching bargains " with expectant heirs and remaindermen or reversioners in similar circum- stances, i. e. bargains made in substance on the credit of their expectations, whether the property in expectancy or reversion be ostensibly the subject-matter of the trans- action or not (I): The rule of evidence that the burden of proof lies on the other contracting party to show that the transaction was a fair one. We use the present tense, for neither the last mentioned Act nor the repeal of the usury laws, as we shall see presently, has made any change in this respect. The part of the doctrine which is abrogated was inti- (h) The reports ot the cases on this head anterior to Chester- field v. Janssen are unfortunately so meagre that it is difficult to ascertain whether they proceeded on any uniform principle. But the motives ahove alleged seem on the whole to have been those which determined the policy of the Court. On the gradual ex- tension of the remedy cp. the remarks of Burnett, J. in Chester- field v. Janssen, 2 Ves. Sr. at p. 145. (1) Earl of Aylesford v. Morris, 8 Ch. at p. 497. 36 When a transaction with an expectant heir or reversioner is set aside on the sole ground of inadequacy of price the court will grant relief only upon the payment of the sum actually advanced with interest and costs. This is in accordance with the maxim " he who seeks equity must do equity." Williams v. Mfg. Co., 1 Md. Ch. 306; Boyd v. Dunlap, 1 John. Ch. 478; Boynton v. Hubbard, 7 Mass. 112, and see Smull v. Jones, 6 W. & S. 128 and Seylor v. Carson 19 P. F. Sm. 81, for decisions which seem to be at variance with this doctrine. 37 Butler i). Duncan, 47 Mich. 94; Poor v. Hazelton, 15 N. H. 564; Irullu. Eastman, 3 Met. 121. REVERSIONARY INTERESTS. 615 mately connected both in principle and in practice with doctrine as that which remains; and though it seems no longer nee- to sale . s of essary to go through the authorities in detail, it may in^ereste'"^ still be advisable to give some account of the manner in which it was applied (m). The general rule established by the cases was that the purchaser was bound to give the fair market price, and to preserve abundant evidence of the price having been adequate, however difficult it might be to as- certain what the true value was. It was applied to reversionary interests of every kind, and the vendor was none the less entitled to the benefit of it if he had acted With full deliberation. The presumption originally thought to arise from -fa transactions of this [-^-583] kind had in fact become transformed into an inflexible rule of law, which, consistently carried out, made it well nigh impossible to deal with reversionary interests at all. The modern cases almost look as if the Court, finding it too late to shake off the doctrine, had sought to call the attention of the legislature to its inconveni- ence by extreme instances. Sales were set aside after the lapse of such a length of time as 19 years, and even 40 years (n). A sub-purchaser who bought at a con- siderably advanced price was held by this alone to have notice of the first sale having been at an undervalue (o). In one case where the price paid was 2001., and the true value as estimated by the Court 238L, the sale was set aside on the ground of this undervalue, though the question was only incidentally raised and the plaintiff's ca'e failed on all other points (p). Finally Parliament found it necessary to interefere, Act to and by the "Act to amend the law relating to sales of amend the reversions," 31 Vict. c. 4 (7th December, 1867), it was lav ? re- enacted (s. 1) that no purchase (defined by s. 2 to in- la j- ln S to elude every contract, &c., by which a beneficial interest reversions in property may be acquired), made bona fide and with- 21 Vict. c. 4. out fraud or unfair dealing of any reversionary interest in real or personal estate, should after January 1, 1868 (s. 3), be opened or set aside merely on the ground of undervalue. Subject only to a saving of pending suits (s. 3) this act is retrospective, and this is the more re- markable inasmuch as the right taken away by it from (m) A digest of the cases was given in the two first editions (p. 550, 2nd ed.). (m) St. Albans Harding, 27 Beav. 11; Salter v. Bradshaw, 26 Beav. 161. (o) Nesbitt v. Berridge, 32 Beav. 280. ( p) Jones v. Eicketts, 31 Beav. 130. 616 DURESS AND UNDUE INFLUENCE. Limited [ • 584] effect of -the Act. General rules of equity as to "catching -bargains" unaffected. any vendor of a reversion who might otherwise have set aside the sale on the ground of undervalue alone was (as in the case of a sale voidable on any other ground) not a mere right of suit, but an interest which was transmissible by descent or devise (q). The Act is carefully limited to its special object of - (according to the usual practice of the Court, 5 per cent.), and the relief is granted only on those terms. Moreover it is held not unjust that he should obtain it at his own expense, since he calls in the assistance of the Court to undo the -fa consequences of his own [ "w 588] folly (g) : and accordingly the general rule is to give no costs on either side (h). (c) "No attempt has been made to show by any independent evidence (if such a tiling could be conceived possible) that the terms thus imposed on the plaintiff were fair and reasonable," 8 Ch. 496. (d) See the judgment of the M. R. Beynon v. Cook, 10 Ch.391, n., and Nevill v. Snelling, 15 Ch. D. at p. 703. (e) Per Jessel, M. R. in Middleton v. Brown (C. A.), Feb. 20, 1878; Nevill v. Snelling, 15 Ch. T>. 679, where the lender system- atically took advantage of a mistaken over-payment of interest by the borrower. (/) Tottenham v. Green, 32 L. J. Ch. 201: a case decided under the old rule as to dealings with reversionary interests, but the principles seem applicable in all cases where the burden of proof is still on the lender. (g) Earl of Aylesford v. Morris, 8 Ch. at p. 499. (h) In the cases of sales of reversions under the former law on that head the practice was for sometime to treat the suit as a re- demption suit, and give the purchaser his costs as a mortgagee: but the later rule was to give no costs on either side, except that the plaintiff had to bear such as were occasioned by any un- founded charges of actual iraud: Edwards v. Burt, 2 D. M. G. at p. 65; Bromley v. Smith, 26 Beav. at p. 676, and costs might be 620 DURESS AND UNDUE INFLUENCE. As tq the lender suing on the contract. [ • 589] Application of principles to sales of reversionary interests by persons in dependent position. The rale of evidence casting a special burden of proof on the lender being peculiar to equity, there was generally no defence at law to an action brought by him to enforce a contract of this kind : nor would an equitable plea under the Common Law Procedure Act have been available, since such pleas were admitted only when they showed cause for absolute and uncon- ditional equitable relief. But the rule of evidence es- tablished in equity must now prevail in every branch of the High Court, aud the probable effect of this may be expressed as follows: When a lender of money sues on a special contract, whether the contract be embodied in a negotiable in- strument or not, and the borrower proves facts which bring the contract within the description of a "catching bargain" as understood by courts of equity, the lender mu°t prove the reasonableness of the bargain (*) ; and if he fails to do so, he cannot recover on the special contract, but can recover his principal and reasonable interest as on a common count for money lent. It must be noticed that the importance of this class of cases is much diminished, though the law is not affected, by the. Infants' Relief Act, 1874, which makes loans of money to infants absolutely void and -^ forbids any action to be brought on a promise to pay debts contracted during infancy. See p. 60, supra. The same principles apply, so far as they are appli- cable to a transaction of sale as distinguished from loan, to the sale of reversionary interests by persons who are not in an independent position, as when the sale is made by a man only just of age in pursuance of terms settled while he was still an infant. Here the burden is on the purchaser to show the fairness of the transaction. He is not bound to show that the price given was absolutely adequate; but he is bound, not- withstanding the Act of 1867 (31 Vict. c. 4, p. 583 above), to show that it was such as, upon the facts known to him at the time, he might have reasonably thought given against the defendant as to any transaction in which there had been misconduct on his part: Tottenham v. Green, 32 L. J. Ch. 201, 206. In Nevillu. Snelling, the plaintiff having offered before action brought to repay the sums actually advanced with interest at 5 per cent., the defendant was ordered to pay the costs: 15 Ch. D. at p. 705. But this surely goes near to stultify- ing the rule. (t) Qv. is this a question for the jury or for the Court? Prima, facie it should be a question of fact: but there are some analo- gies (e. g. the cases on restraint of trade) for treating it as a ques- tion of law. REVERSIONARY INTERESTS. 621 adequate. Moreover he ought to see, where practica- ble, that the seller has independent legal advice. These rules seem to be established by O'Rorke v. Boling- broke (fc), which is remarkable as an almost singular instance of an impeached transaction with an " expect- ant heir" being upheld. There a father and son nego- tiated with a purchaser for the sale of the son's rever- sionary interest expectant on the death of the father. The sale was completed three weeks after the son came of age. The price was agreed to after some bargain- ing; it was founded on a statement of value furnished by a third person, and would have been adequate if the father's life had been a good one. The purchaser did not know and had no reason to believe anything to the contrary, but it was in fact a bad life. The young man took no independent advice, being "penniless, and ex- cept for his father friendless" (I). The father died within three months after the sale. Four years later the son sued to have the whole transaction set aside, but failed in the House of Lords after succeeding in the Court of Appeal in Ireland. The majority of the Lords (ra) held that the burden of proof was indeed on -fr the buyer, but that he had satisfied it. Lord [ ^ 590] Hatherley dissented, thinking that it was the buyer's absolute duty to see that the young man had independ- ent advice. We have yet to examine another alleged ground of "Surprise" equitable relief against contracts, founded on the notion a nd ''im- of an inequality between the contracting parties: we P rovide nce. " say alleged, for we adopt the opinion, for which there is high authority, that it ought not to be treated as a substantial ground for avoiding transactions, but only as matter of evidence: we mean "surprise," or "sur- prise and improvidence." The case of Evans v. Llewellyn (n) may be. taken as Evans v the typical instance. The plaintiff was a person of in- Llewellyn, ferior station and education who acquired by descent a title in fee simple to a share in land in which the de- fendant had a limited interest. His title was first com- municated to him by the defendant, who represented to him (as the fact appears to have been) that the circum- stances of the family created a moral obligation in the plaintiff not to insist on his strict rights, and offered to purchase his interest for a substantial though not (Jfc) 2 App. Ca. 814. (0 Lord Blackburn, at p. 837. (m) Lord Blackburn, Lord O'Hagan, and Lord Gordon. (ra) See following note. 622 DURESS AND UNDUE INFLUENCE. [*591] Qu. if "sur- prise," &c. and sub- stantive cause for avoiding contracts. adequate consideration. The defendant suggested to the plaintiff to consult his friends in the matter, -which however he did not do. Three days intervened between the first interview and the conclusion of the business by the acceptance of the defendant's offer. It was con- sidered that the plaintiff was under the circumstances not a free agent and not equal to protecting himself, and was* taken by surprise, and the sale was set aside (o). The case seems somewhat anomalous, but it has been suggested by very high authority that it would still be followed in setting aside a contract as " improvident and *f{ hastily carried into execution " (p), and it has been distinctly approved in the Court of Appeal in Chancery (q). It is submitted, however, that there is no. intelligible reason for treating surprise or improvidence as a sub- stantive cause for setting aside contracts, much less for attempting to give these words a technical signification. Both terms are in fact merely negative and relative. Surprise is nothing else than the want of mature de- liberation : improvidence is nothing else than the want of that degree of vigilance which a man of ordinary prudence may be expected to use in guarding his own interest. Now one man's deliberation and prudence are not the same as another man's, nor is the same man equally deliberate or prudent at all times. A man may enter into a contract with less deliberation than the average wisdom of mankind would counsel, or than he himself commonly uses, in affairs of the like nature, and yet the contract may be perfectly valid. But he must in any case understand what he is doing; for if he does not, there is no true consent and no contract (r), and his consent must be freely given; for if it is not, the contract is voidable at his option. And if it be dis- (d) 2 Bro. C. C. 150; 1 Cox, 333, a fuller report, -which is here followed; the other if correct would reduce it to a plain case of fraud or at all events misrepresentation. In Haygarth v. Wear- ing. 12 Eq. 320, which to some extent resembled this, the ground of the decision was a positive misrepresentation as to the value of the property. (p) Lord St. Leonards in Curzon v. Bel worthy, 3 H. L. C. 742: there the appellant relied on express charges of fraud, which were not made out: but Lord St. Leonards thought he might possibly have succeeded if he had rested his case on the ground suggested. (q) Per Turner, L. J., in Baker v. Monk, 4 D. J. S. at p. 392. (r) The cases of lunacy and drunkenness are exceptionally treated, the contract being only voidable, supra, Ch. II. p. 93, and see p. 418. " SURPRISE." 623 pated whether there was or not any real consent, or But circum- whether consent was or not freely given, then circum- !{^ n< ^. s "? stances of what is called surprise or improvidence may mav j, e be very material as evidence bearing on those issues. material- Unusual haste or folly in entering into an engagement for proving is a circumstance to be accounted for: and the best way the existence of accounting for it may in all the circumstances of a ground's for particular case be to suppose that the party did not avoiding the know what he was about, or that he was wrought upon contract, by conduct of the other party of such a kind as to make as fuuda - the contract voidable on the ground of fraud. Surprise error or and improvidence, therefore, are -fa matters from which fraud, those whose province it is to judge of the facts may [ -fa 592] conclude, as a fact in particular cases, that there was no true consent, or that the consent was not free. But it is not to be affirmed as a general proposition of law that haste or imprudence can of itself be a sufficient cause for setting aside" a contract, nor even that there is any particular degree of haste or imprudence from which fundamental error, fraud, or undue influence, will be in- variably presumed. "The Court will not measure the degrees of understanding" (s). It seems to follow that Possible what is recorded in such a case as Evans v. Llewellyn (t) explanation is not an enunciation of law, but an inference of fact. ° f Evans v. Such an inference may be useful in the way of analogy ewe yn ' when similer circumstances recur, but is not binding as an authority. The view here taken may be supported Opinions of by the observations of the judges in The Earl of Bath J j? (1 f es f 1 5 ., and Mountague' 's Case (a. d. 1693) (u). In that case an ^ Mounta- Baron Powel said (3 Ch. Ca. at p. 56): gue's case. " It is said, This is a Deed that was obtained by Surprize and circumvention. Now I perceive this word Surprize is of a very large and general Extent. ... I hardly know any Surprize that should be sufficient to set aside a Deed after a Verdict, unless it be mixed with Fraud, and that expressly proved." [i.e. the verdict in favour of the deed precludes the party from asserting in equity that he did not know what he was about: for he should have set up that case at law on the plea of non est factum}. " It must be admitted that there was Deliberation, and Considera- tion and Intention enough proved to make it a good Deed at Law, otherwise there would not have been a Verdict for it" : per L. C. J. Treby, ib. at p. 74. The judgment of the Lord Keeper Somers is even (s) Bridgman v. Green, Wilmot, 58, 61. (0 1 Cox 333. («) 3 Ch. Ca. 55, Cp. Story, Eq. Jurisp. \ 351. 624 DURESS AND UNDUE INFLUENCE. [ * 593] Analogy to doctrine as to in- adequacy of consi- deration. The right of rescission is like that in cases of fraud, &c. and gov- erned by same rules. more decided, and points out clearly the difference be- tween an instrument which is void both at law and in equity, and one which is voidable in equity (p. 108): — "It is true, it is charged in the Bill that this De^ed -was ob- tained by Fraud and Surprize. . . . But whosoever reads over the Depositions -^ will see that the End they aimed at was to attack the Deeds themselves as false Deeds and not truly exe- cuted ; but that being Tried at Law, and the "Will and deeds veri- fied by a verdict, the Counsel have attempted to make use of tbe same Evidence, and read it all, or at least the greatest Part of it, as Evidence of Surprize and Circumvention "Now, for this word (Surprize) it is a Word of a general Sig- nification, so general and so uncertain, that it is impossible to fix it; a Man is surpriz'd in every rash and indiscreet Action, or whatsoever is not done with so much Judgment and Considera- tion as it ought to be ; But I suppose the Gentlemen who use that Word in this Case mean such Surprize as is attended and accom- panied with Fraud and Circumvention ; such a Surprize indeed may be a good ground to set aside a Deed so obtain'd in Equity and hath been so in all times; but any other Surprize never was, and I hope never will be, because it will introduce such a wild Uncertainty in the Decrees and Judgments of the Court, as will be of greater Consequence than the Belief in any Case will answer for." Moreover the doctrine thus stated is exactly analogous to that which we have seen to be undoubted law con- cerning inadequacy of consideration. The value of the subject-matter of a contract, and therefore the adequacy of the consideration, which depends on if, is in most cases easier to measure than the degree of deliberation or prudence with which the contract was entered into. It can hardly be contended on principle that "surprise" or "improvidence," which in fact represent nothing but an opinion of the general character of a transaction, founded on a precarious estimate of average human conduct, ought to have a greater legal effect than inad- equacy of consideration, which generally admits of be- ing determined by reference to the market value of the object at the date of the contract. 5. Limits of the right of rescission. The right of setting aside a contract or transfer of property voidable on the ground of undue influence is analogous to the right of rescinding a transaction void- able on any other ground, and follows the same rules with some slight modifications in detail. " SURPRISE." 625 What is said in the last chapter of rescinding con- tracts for fraud or misrepresentation may be taken as generally applicable here. We proceed to give some examples of the special application of the principles. ■^■The right to set aside a gift or beneficial contract \ -^ 594] voidable for undue influence may be exercised by the Examples, donor's representatives or successors in title (x) as well as by himself, and against not only the donee but per- sons claiming through him (y) otherwise than as pur- chasers for value without notice (z). But the jurisdic- tion is not exercised at the suit of third persons. 38 The Court will not refuse, for example, to pay a fund, at the request of a petitioner entitled thereto, to the trustees of a deed of gift previously executed by the petitioner, because third parties suggest that the gift was not freely made (a). On the other hand it is not necessary to the support jurisdiction of a claim to set aside a contract on the ground'of un- not confined due influence to show that the influence was directly **>, influence employed by another contracting party. It is enough ^J^v'to the to show that it was employed by someone who expected contract, to derive benefit from the transaction, and with the knowledge of the other party or under circumstances sufficient to give him notice of it. The most frequent case is that of an ancestor or other person in loco pa- rentis inducing a descendant, etc., to give security for a debt of the ancestor. But if the other party does all he reasonably can to guard against undue influence being exerted (as by insisting on the person in a de- pendent position having independent professional ad- vice,) and the precautions he demands are satisfied in a manner he cannot object to at the time, the contract cannot as against him be impeached (6). It appears to be at least doubtful whether a contract can be set aside on the ground of influence exerted on (x) E. g. Executor: Hunter v. Atkins, 3M. & K. 113; Coutts v. Ac worth, 8 Eq. 558. Assignee in bankruptcy: Ford v. Olden, 3 Eq. 461. Devisee: Greslev v. Mousley. 4 De G. & J. 78. Heir: Holman v. Loynes, 4 D. M. G. 270. (ij) Hugnenin v. Baseley, 14 Ves. 273, 289. Cp. Molony v. Kernan, 2 Dr. & W. 31, 40. (z) Cobbett v. Brock. 20 Beav. 524, 528. (a) Metcalf ' s tr. 2 D. J. S. 122. (6) Compare Cobbett v. Brock, 20 Beav. 524, with Berdoe v. Dawson, 34 Beav. 603. As to what amounts to notice, Maitland ,v. Backhouse, 16 Sim. 58; Tottenham v. Green, 32 L. J. Ch. 201. 38 Generally, only duress to the party, not to a third party will avoid the contract. Schee v. McQuilken, 59 Ind. 269;Eobinson v. Gould, 11 Cush. 55; Spaulding v. Crawford, 27 Texas, 155. 40 PRINCIPLES OF CONTEACT. 626 DURESS AND UNDUE INFLUENCE. one of the parties by a stranger to the contract who did not expect to derive any benefit from it (c); 39 except [ -^ 595] where the contract -^ is an arrangement between cestuis que trust claiming under the same disposition, and the trustee puts pressure on one of the parties to make concessions; the ground in this case being the breach of a trustee's special duty to act impartially (d). Confirma- The right to set aside a contract originally voidable on tion and the ground of undue influence may be lost by express acquiescence, confirmation (e) or by delay amounting to proof of ac- quiescence (/). But any subsequent confirmation will be inoperative if made in the same absence of independ- ent advice and assistance which vitiated the transaction in the beginning (g). This has been strongly stated in the judgment of the Lords Justices in Moxon v. Payne (h) : " Frauds or impositions of the kind practised in this case cannot be condoned; the right to property acquired by such means cannot be confirmed in this Court unless there be full knowledge of all the facts, full knowledge of the equitable rights arising out of those facts, and an absolute release from the undue influence by means of which the frauds were practised. To make a con- firmation or compromise of any value in this Court the parties must be at arm's length, on equal terms, with equal knowledge, and with sufficient advice and protec- tion." And delay which can be accounted for as not un- reasonable in all the circumstances is no bar to relief (*"). In short, an act " the effect of which is to ratify that which in justice ought never to have taken place" ought to stand only upon the clearest evidence (j). The effect of delay on the part of the person seeking relief is also subject to a special limitation. In a case between solic- itor and client, or parties standing in any other confi- dential relation, less weight is given to the lapse of time than is due to it when no such relation subsists (k). (e) Bentley ». Mackay, 31 Beav. 143, 151. On principle the answer should clearly he in the negative. (d) Ellis v. Barker, 7 Ch. 104. (e) Stump v. Gaby, 2 D. M. G. 623; Morse v. Royal, 12 Ves. 355. (/) Wright v. Vanderplank, 8 D. M. G. 133, 147; Turner v. Collins, 7 Ch. 329. (g) Savery v. King, 5 H. L. C. at p. 664. (h) 8 Ch. 881, 885. And a confirmation will not he helped by the presence of an independent adviser of the party confirming, if, in consequence of the continuing influence of the other party, his advice is in fact disregarded: ib. (i) Kempson v. Ashbee, 10 Ch. 15. (j) Morse v. Royal, 12 Ves. at p. 374. (k) Gresley v. Mousley, 4 De G. & J. 78, 96. But even in a case 39 Contra., Rankin v. P atton,65 Mo. 378. CONFIRMATION AND ACQUIESCENCE. 627 ■^ In the case of a deliberate confirmation* after the [ -^ 596] relation of influence has ceased to exist, it need not be shown that the donor knew the gift to be voidable (Z): otherwise where the alleged confirmation is connected with the original transaction and takes place under sim- ilar Circumstances (m). An adoption of the instrument impeached for a par- ticular purpose (as by the exercise of a power contained in it) may operate as an absolute confirmation of the whole (n). It seems that the presumption of influence arising Semble no from confidential relations is not to be extended to cases presumption where a merely trifling benefit is conferred (o). This is ? f uudue more than a simple application of the maxim De minimis ^hereTthe non curat lex, for the transaction brought in question ga in is might be in itself of great magnitude and importance, trifling, though the advantage gained by one party over the other were not large. Indeed the case to which this principle seems most likely to be applicable is that of a transac- tion not of a commercial nature, and on such a scale that the parties, dealing fairly and deliberately, might choose not to be curious in weighing a comparatively small bal- ance of profit or loss. As regards the relation between .solicitor and client, it Special is a question whether there is not an inflexible rule of questions as public policy against the solicitor taking a gift from the to relation i- a • ?• c i- * • a 40 of solicitor client, irrespective of any presumption of influence. and c ij en * Such a rule, if it exists, is outside the law of contract altogether. It would apply only during the actual con- tinuance of the relation: and the mere fact that A. has been B.'s solicitor would not raise a presumption against an act of bounty from B. to A. after that relation had been fully determined. 41 But the subject has never been authoritatively discussed, with regard to the supposed distinction, in a Court of Appeal; and existing author ities (p) can hardly be deemed conclusive. between solicitor and client a delay of eighteen years has been held fatal; Champion v. Rigby, 1 Russ and M. 539. (!) Mitchell v. Homfray, C. A., 8 Q. B D. 587. (m) Kempson v. Ashbee, 10 Ch. 15. (n) Jarratt v. Aldam, 9 Eq. 463. (o) Per Turner, L. J., Ehodes v. Bate, 1 Ch. at p. 258. (p) See Morgan v. Minett, 6 Ch. D. 638. 40 According to Holman v. Loynes, 4 DeG., M. and G., 270, a gift from a client to his counsel is absolutely void. Greenfield's Estate, 2 Harris (Pa.), 489. 41 A client may make a gift by will to his solicitor, provided it was not made under any misapprehension caused by the solicitor. Hindson v. Weatherill, 5 De G. M. and G. 301. 628 AGREEMENTS OP IMPEKFECT OBLIGATION. [•597] Nature of imperfect obligations. How pro- duced. • CHAPTER XII. AGREEMENTS OF IMPERFECT OBLIGATION. Undee this head we propose to deal with topics of a miscellaneous kind as regards their subject-matter, and forming anomalies in the general law of contract, but presenting in those anomalies some remarkable uni- formities and analogies of their own. Between contracts which can be actively enforced by the persons entitled to the benefit of them, and agree- ments or promises which are not recognized as havirjg any legal effect at all, there is another class of agree- ments which though they confer no right of action are recognized by the law for other purposes. These may be called agreements of imperfect obligation. Some writers (as Pothier) speak of imperfect obligations in the sense of purely moral duties which are wholly with- out the scope of law: and what we here call Imperfect Obligations are in the civil law called Natural Obliga- tions. But this term, the use of which in Roman law is intimately connected with the distinction between ius civile and ius gentium (a), would be inappropriate in English. "Where there is a perfect obligation, there is a right coupled with a remedy, i. e. an appropriate process of law by which the authority of a competent court can be set in motion to enforce the right. Where there is an imperfect obligation, there is a right without a remedy. This is an abnormal state of things, making an exception whenever it occurs to the general law -^ expressed in the maxim Ubi ius ibireme- dium. And it can be produced only by the operation of some special rule of positive law (6). Such rules may (a) Savigny, 01)1. J. 22, sqq. For a summary statement of the effects of a natural obligation in Roman law see Prof. Muirhead's note on Gai. 3. 119 a. (V) It was once held that a purely moral obligation might give rise to an inchoate right which could be made binding and en- forceable by an express promise. And if this were so the state- ment in the text would not be correct: but the modern authori- ties disallow such a doctrine. See 2 Wms. Strand. 428; supra, p. 169. DEBTS BARRED BY STATUTE. 629 operate in the following ways to produce an imperfect obligation : 1. By way of condition subsequent, taking away a remedy which once existed. 2. By imposing special conditions as precedent to the existence of the remedy. 3. By excluding any remedy altogether. We shall now endeavour to show what are the effects of an imperfect obligation in these three classes of cases. 1. Under the first head we have to notice the opera- i. Remedy tion of the Statutes of Limitation, so far as it illus- lost — trates the present subject (c). The statute of limita- Statutes of tion of James I. (21 Jac. 1, c. 16, s. 3) enacts that the Llmltatl0n - actions therein enumerated— which, with an exception since repealed, comprise all actions on simple con- tracts (d) — "shall be commenced and sued" within six years after the cause of action, and not after. By the modern statute 3 & 4 Wm. 4, c. 42, s. 3 (e), following the presumption of satisfaction after the lapse of twenty years which already obtained in practice (/), it is enacted that (inter alia) all actions of covenant or debt upon any bond or other -fa speciality " shall be [ "^ 599] commenced and sued" within twenty years of the cause of lotion. 1 We need not stop to consider the excep- tions for disability, or the rules as to the time from which the statutes begin to run: for the object through- out this chapter will not be to define to what cases and under what conditions the laws under consideration apply, when that is abundantly done in other treatises, (e) Debts contracted by an infant are often compared to debts barred by the statutes of limitation: and the comparison is just to this extent, that at common law they might be rendered en- forceable in much the same manner, and practically the author- ities are interchangeable on this point. But an infant's contract is in its inception not of imperfect obligation, but simply void- able. (d) As to the extent to which the statute applies to proceed- ings in equity see Knox v. Gye, L. R. 5 H. L. 656. (e) This section is not affected by the Real Property Limitation Act, 1874, except that proceedings to recover rent or money charged on land will have to be taken within 12 years: 37 & 38 Vict. c. 57, ss. 1, 8. (/) Bac. Abr. 5. 226 (Limitation D. 1) ; Roddam v. Morley, 1 Be G. & J. 17. 1 The statute begins to run from the time when the complain- ing party is first entitled to bring his suit. McMichael v. Car- lyle, 53 Wis. 504; Pridgeon v. Greathouse, 1 Idaho (N. S.), 359; Jones v. Id., 91 Ind. 378. 630 AGREEMENTS OF IMPERFECT OBLIGATION. Results. Incidental [*600] rights of creditor preserved. but to observe the general results which follow when they do apply. Now there is nothing in these statutes to extinguish an obligation once created. The party who neglects to enforce his right by action cannot insist upon bo en- forcing it after a certain time. But the right itself is not gone. It is not correct even to say without quali- fication that there is no right to sue, for the protection given by the statutes is of no avail to a defendant un- less he expressly claims it. Serjeant Williams, after noticing the earlier conflicts of opinion on this point, and some unsatisfactory reasons given at difterent times for the rule which has prevailed, concludes the true rea- son to be that "the Statute of Limitations admits the cause or consideration of the action still existing, and merely discharges the defendant from the remedy " (g). This alone shows that an imperfect obligation subsists between the parties after the time of limitation has run out. In the case of unliquidated demands that obliga- tion is practically inoperative, since an unliquidated demand cannot be rendered certain except by action or an express agreement founded on the relinquishment of an existing remedy. 3 Bat in the case of a liquidated debt the continued existence of the debt after the loss of the remedy by action may have other important ef- fects. Although the creditor cannot enforce payment by direct process of law, he is not the less entitled to use any other -^ means of obtaining it which he might lawfully have used before. Thus if he has a lien on goods of the debtor for a general account, he may hold the goods for a debt barred by the statute (h). And any lien or express security he may have for the par- (g) 2 Wms. Sannd. 163; cp. Scarpellini V. Atcheson, 7 Q. B. at p. 878, 14 L. J. Q. B. at p. 338, on the technical effect of a plea of the statute. The rule continues under the new practice, Order XIX. r. 15. (ft) Spears v. Hartly, 3 Esp. 81. 2 Aside from the Statute of Limitations, lapse of time after a debt has been contracted is always material, either alone or in connection with other facts, to the question whether or not the debt has been paid. Under the unwritten laws a debt either of a specialty or a j udgment will be presumed to be paid after a lapse of twenty years unexplained when there has been no rec- ognition of it, by the debtor, and in many cases the jury may infer payment after a less period varying according to the cir- cumstances. Houck v. Id., 3 Out. (Pa.) 552; Gaines v. Miller, 111 U. S. 395; Rowland v. Windley, 86 N. C. 36; Morrow v. Robinson, 4 Del. Ch. 521; Bailey v. Jackson, 16 Johns. 210; Brigg's Appeal, 12 Norris (Pa.), 485; Murphy v. Phila. Trust Co., 7 Out. (Pa.) 379. ACKNOWLEDGMENT OF BARRED DEBTS. 631 ticular debt remains valid (i). If the debtor pays money to him without directing appropriation of it to any particular debt, he may appropriate it to satisfy a debt of this kind (k) : much more is he entitled to keep .the money if the debtor pays it on account of the par- ticular debt, but not knowing, whether by ignorance of fact or of law, that the creditor has lost his remedy. So an executor may retain out of a legacy a barred debt owing from the legatee to the testator (I). He may also retain out of the estate such a debt due from the testator to himself: and he may pay the testator's bar- red debts to other persons (m) : and this even if the personal estate is insufficient (n). But though a cred- itor may retain a barred debt if he can, he may not re- sist another claim of the debtor against him by a set- off of the barred debt: for the right of set-off is statu- tory, and introduced merely to prevent cross actions, so that a claim pleaded by way of set-off is subject to be defeated in any way in which it could be defeated if made by action (o). This reason applies equally to all other cases of imperfect obligations. Herein our law differs from the Roman, in which compensatio did not depend on any positive enactment, but was an equita- ble right derived from the ius gentium. Again, the creditor's lost remedy may be revived by Aeknow- the act of the debtor. The decisions on the statute of ledgment James I. have established that a renewed promise to °y debtor, pay, or an -^ acknowledgment from which a promise [-^601] can be inferred, excludes the operation of the statute. 3 It was formerly held that the statute rested wholly on a presumption of payment, and therefore that any ac- knowledgment of the debt being unpaid, even though coupled with a refusal to pay, was sufficient. But this (i) Higgins v. Scott, 2 B. & Ad. 413; Seager v. Aston, 26 L. J. Ch. 809 (on the statute of 3 & 4 Wm. 4). (k) Mills v. Fowbes, 5 Bing. N. C. 455; Nash v. Hodgson, 6 D. M. G. 474. {I) Courtenay v. Williams, 3 Ha. 539; cp. Eose v. Gould, 15 Beav. 189. (m) Hill v. Walker, 4 K. & J. 166; Stahlscbmidt v. Lett, 1 Sm. & G. 415. (n) Lowis v. Rumney, 4 Eq. 451. (o) The defence of set-off must be specially met by replying the statute of limitation, see 1 Wms. Saund. 431. 3 If a debtor makes a fresh acknowledgment of the debt to the creditor, the law adds thereto his promise to pay it, and the stat- ute again begins to run from the time that an action is maintain- able on the new promise. Falmer v. Gillespie, 14 Norris (Pa.), 340; Eoss v. Id., 20 Ala. 105; Elder v. Dyer, 26 Kan. 604; Mur- ray v. Coster, 20 Johns. 576; Hannah v. Hawkins, 5 Lea, 240. 632 AGREEMENTS OF IMPEKFECT OBLIGATION. What ia sufficient acknow- ledgment. [•602] opinion has long since been overruled (p). The rule has been explained thus. It is settled law that a sta£e of facts on which there is an existing and complete le- gal liability is of itself no ground for a fresh promise to satisfy the same liability: thus an express promise to pay the sum due on an account stated creates no new cause of action, there being already in contemplation of law a promise to pay on request (q). But in the case of a barred debt this reason for a new promise being inoperative does not exist: the original remedy is gone, while the original consideration remains as a sufficient foundation for a subsequent promise. Since the ac- knowledgment operates, according to the modern view, as a new promise, it is not effectual unless made before the commencement of the action (r). The modern law nas been concisely stated by Mbllish, L. J. "There must be one of three things to take the case out of the statute. Either there must be an ac- knowledgment of the debt, from which a promise to pay is to be implied; or secondly, there must be an uncon- ditional promise to pay the debt; or thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed" (s). 4 The promise must be to pay the debt as -fa ex debito in- stitiae; a promise to pay as a debt of honour is in- sufficient, as it excludes the admission of legal li- ability (t). When the promise is implied, it must be as an inference of fact, not of law; 5 the payment of interest under compulsion of law does not imply any promise to pay the principal (u). The acknowledgment or promise, if express, must be (p) 2 Wms. Saund. 183, 184. ' (2) Hopkins v. Logan, 5 M. & "W. 24; for another instance see Deacon v. Gridley, 15 C. B. 295, 24 L. J. C. P. 17. (r) Bateman v. Pinder, 3 Q. B. 574, 11 L. J. Q. B. 281. But the explanation is not satisfying, since the consideration for the new promise is wholly past, and therefore insufficient according to modern doctrine. See p. 170, above. (s) Mitchell's claim, 6 Ch. at p. 828. And see Wilby v. Elgee, L. E. 10 C. P. 497; Chasemore r. Turner (Ex. Ch.), L. E. 10 Q. B. 500, 506, 510, 520, and the later case of Meyerhoff v. Frohlich, 3 C. P. JD. 333, in C. A., 4 C. P. D. 63, which also show how- much difficulty there may be in determining in a particular case whether there has been an unconditional promise; Quincey v. Sharpe, 1 Ex. D. 72; Skeet o. Lindsay, 2 Ex. D. 314. (t) Maccord v. Osborne, 1 C. P. D. 568 (on Lord Tenterden's Act). («) Morgan v. Eowlands, L. E. 7 Q. B. 493, 498. * Stowell v. Fowler, 59 M. H. 585. 6 Bell v. Morrison, 1 Peters, 351 ; Moore v. Bauk ot Columbia, C Peters, 86. CONFLICT OF LAWS AS TO LIMITATION. 633 in writing and signed by the debtor 6 ( 9 Geo. 4, c. 14, s. 1 ) or his agent duly authorized (Mercantile Law Amend- ment Act, 1856, 19 & 20 Vict. c. 97, s. 13). But an acknowledgment may still be implied from the pay- ment of interest, or of part of the principal on account of the whole, without any admission in writing (so). 1 The more recent statute .which limits the time for statutory suing on contracts by specialty contains an express provision proviso as to acknowledgment and part payment (3 & for ao ~ 4 Wm. 4, c. 42, s. 5) (y). The cases as to acknowledg- J^^f g * ment, &c. under the statute of James, and Lord specialty Tenterden's Act, are not applicable to this proviso, debts. Here the operation of the acknowledgment is indepen- dent of any new promise to pay, and the action in which the acknowledgment is to be operative must be founded on the original obligation alone (z). The Act for the Limitation of Actions and Suits gt a t. of relating to Real Property (3 & 4 Wm. 4, c. 27) does Limitation not only bar the remedy, but extinguishes the right at as t0 real the end of the period of limitation: (s. 34, see Dart V. ^ "ht^well & P. 402). It is therefore unconnected with our as remedy present subject. taken away. We have seen that by the operation of the statutes of English limitation applicable to contracts the right itself is not statutes of destroyed, but only the conditions of enforcing it are nm * tatl0n i affected. The law of limitation is a law relating not analogous to the substance of the cause of action, but to pro- foreign laws cedure. Hence follows a consequence which is import- affecting ant in private -fa international law, namely that these I « oOoJ enactments belong to the lex fori, not to the lex contractus, ? remedy and are binding on all persons who seek their remedy as pa r t f in the courts of this country. A suitor in an English lex fori. court must sue within the time limited by the English statute, though the cause of action may have arisen in (x) 2 Wms. Saund. 181, 187, see also the notes to Whitcomb v. Whiting, 1 Sm. L. C. (y) See Pears v. Laing, 12 Eq. 41. (z) Roedam v. Morley, lDe G. & J. 1, opinion of Williams and Crowder, JJ. at p. 15. 6 Haydon v. Williams, 7 Bing., 163. 7 If the debtor pays the interest, or part of the principal, under circumstances involving an admission oi the whole, he thereby takes the debt out of the previously running statute. Ilsey v. .Tewett, 2 Met. 168; Hale?'. Morse, 49 Conn. 481; Cucullu v. Hernandez, 103 U. S. 105; Walker v. Wait, 50 Vt. 668; Buxton v. Edwards, 134 Mass. 567; Egery v. Decrew, 53 Me. 392; Cocker v. Id., 2 Mo. App. 451 ; Whipple v. Stevens, 2 Fost. (N. H.) 219; Kaufmann v. Broughton, 3 Ohio, 338; Engman v. Immel, 59 Wis. 249. 634 AGREEMENTS OF IMPERFECT OBLIGATION. a country where a longer time is allowed (a). a Con- versely, an action brought in an English court within the English period of limitation is maintainable although a shorter period limited by the law of the place where the contract was made his elapsed, even if a competent court of that place has given judgment in favour of the defendant on the ground of such period having expired (5). And for this purpose a document under seal has been treated by an English court as creating a specialty debt, though made in a country where our distinction between simple contract and specialty debts does not exist, and more than six years before action brought (c). The House of Lords, as a Scotch court of appeal, has had to decide a similar question as between the law of Scotland and the law of France. It was held that the Scottish law of prescription applied to an action brought in Scotland on a bill of exchange drawn and accepted in France, the right of action on which in France had been saved by judicial proceedings there (d). In the case where the shorter of the two periods of limitation is that allowed by the foreign law governing the sub- stance of the contract, and that period has elapsed, it is [ -^ 604] of course necessary to -^- ascertain that the foreign law is analogous to our own in its operation, and merely takes away the remedy without making the contract void at the end of the time of prescription. But it is con- sidered that an actual destruction of the right would be so inconvenient and unreasonable that it may almost be presumed that such is not the operation of the law of any civilized state; and the English courts would not put such a construction on the foreign law unless com- pelled so to do by very strong evidence ( e). (a) British Linen Co. v. Drummond, 10 B. & C. 903. (J) Huber v. Steiner, 2 Bing, N. C. 202 (debt barred by French law: Harris v. Quine, L; R. 4 Q. B. 653 (debt barred by Manx law): in the latter case Cockburn, C. J., expressed some doubt as to the principle, admitting however that the rule was settled by authority: Savigny too (Syst. 8. 273) is for applying that law which governs the substance of the contract. (c) Alliance Bank of Simla v. Carey, 5 C. P. D. 429 (a bond executed in British India). Possibly the use by British subjects of an English form, unmeaning at the place of execution, may justify the inference that they at the time intended the docu- ment to operate as an English deed. Otherwise the decision seems not easy to support. (d) Don v. Lippmann, 5 CI. & F. 1. See also 2 Wins. Saund. 399. (e) Huber v. Steiner, 2 Bing. N. C. 202, where it was in vain 8 Burchard v. Dunbar, 82 111. 450; Scoville v. Canfield, 14 Johns. 338; Trimby v. Vignier, 1 Bing. (K. C.) 151. STATUTE OF FRAUDS. 635 We shall presently see that analogous questions con- cerning the lex fori may arise in other cases of imper- fect obligations. 2. Under the second head fall the cases of particular 2. Condi- classes of contracts where the law requires particular tions pre- sets to to be done by the parties or one of them (in re- cedent to spect of the form of the contract or otherwise) as con- A^tatute di tions precedent to the contract being recognized as f Frauds s. enforceable. 9 4. A. The most important of the enactments thus impos- ing special conditions on contracts is the fourth section of the Statute of Frauds (29 Car. 2, c. 3). The fourth section enacts that after the date there mentioned ' "no action shall be brought whereby to char-ge any executor or administrator upon any special promise to answer damages out of his own estate ; or whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriages of another person ; or to charge any person upon any agreement made upon consideration of marriage; or upon any contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them ; or upon any agreement that is not to be per- formed within the space of one year from the making thereof; unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith or some other person there- unto by him lawfully authorized." ■jf The terms of the 17th section (16th in the Bevised [ -fa 605] Statutes) are different. It does not only prevent con- tracts for the sale of goods of the value of 10Z. or up- wards (Lord Tenterden's Act, 9 Geo. 4, c. 14, s. 7, has the effect of substituting "value" for "price") (e) from being sued upon except under the conditions specified, but enacts that they shall not "be allowed to be good": and it has been thought that where the conditions are not satisfied the agreement is absolutely void as against the party who has not signed (/). But the weight of attempted to show that by the French law of prescription the right was absolutely extinguished. (e) Harman v. Reeve, 18 C. B. 587, 595, 25 L. J. C. P. 257. ( / ) Where one party has signed and the other not, the contract 9 If a contract contains a condition precedent, this is where a stipulation is to bind a party only on the transpiring of a certain, event, such a party cannot be in default so long as from any cause, the condition remains unfilled. Baltimore E. R. v. Polly, 14 Grat. 447; Bruce v. Snow, 20 N. H. 484; Oakley v. Morton, 1 Kernan, 25; Vanhorn v. Dorrance, 2 Dallas, 304, 636 AGREEMENTS OP IMPERFECT OBLIGATION. Effect of s. 4 for some time not settled. [•606] recent opinion is in favour of holding that, notwithstand- ing the difference of language, the 17th section, like the 4th, is only a law of procedure (g). There is no posi- tive decision on the point. The cases of part acceptance of the goods or part payment of the price are expressly provided for, either of these having the same effect as a duly made memorandum in writing. We now return to the fourth section. For the sake of brevity we shall use the term " informal agreement " to signify any agreement which comes within this sec- tion and does not comply with its requirements. For some time it was not fully settled what was the effect of this enactment on informal agreements. There was some authority for saying it made them void. It was never held necessary in the courts of law for a de- fendant sued on an informal agreement to plead the stat- ute specially, as in the case of the statutes of limitation: and it has been held (before the C. L. P. Act) that a spe- cial •£ plea was not only unnecessary but bad as an "argumentative denial" of the contract declared upon (h). Moreover an action cannot be maintained when, although it is not brought to enforce any right ex contractu, the right which is the foundation of the plaintiffs claim depends on an informal agreement. In Carrington v. Boots (i) the plaintiff sued in trespass for seizing his horse and cart: the defendant pleaded that they were incumbering and doing damage on his ground: the plain- tiff replied a verbal agreement that the defendant should sell the crop and grass growing there to the plaintiff, and that the plaintiff might enter with his horse and cart to take them. It was held that this agreement was for the sale of an interest in land within s. 4, and that the plain- tiff could not set it up, though it might have been avail- is said to be good or not at the election of the party who has not signed — i. e. he may sue the other who has signed, though the other cannot sue him. Benjamin on Sale, 219. This is also the case under s. 4: Laythoarp v. Bryant. 2 Bing. N. C. 735. (g) Lord Blackburn in Maddison v. Alderson, 8 App. Ca. at p. 488; Brett, L. J. in Britain v. Eossiter, 11 Q. B. D. at p. 127. Cp. judgment of Williams, J. in Bailey v. Sweeting, 9 C. B. N. S. 843, 859, 30 L. J. C. P. 150, 154; and see Anson, 66, and an article in 9 Am. Law Rev. 435. The supposed distinction between the two sections is pointedly taken in Laythoarp v. Bryant, 2 Bing. N. C. 735. 747, and Leroux v. Brown, 12 0. B. 801, 824, 826. (7t) Reade v. Lamb, 6 Ex. 130, 20 L. J. Ex. 161. Since the Judicature Acts the defence of the statute must always be dis- tinctly raised on the pleadings. Order XIX. r. 15, cp. r. 20. As to the former practice in equity see Johnasson v. Bonhote (C. A.J 2 Ch D. 298. Once properly raised the defence is available without, further repetition at any subsequent stage of the proceedings: ib. (0 2M.&W. 248. INFORMAL AGREEMENTS UNDER STATUTE OF FRAUDS. 637 able, as a licence only, in answer to an action for tres pass (k). Both here and in the later case of Reade v Lamb above cited the judges said distinctly enough that informal agreements were not only not enforceable but void. And so Sir W. Grant appears to have thought in Randall v. Morgan (I). These dicta are not consistent with the decisions to be presently mentioned in which the existence of an imperfect obligation is implied. And there had also been judicial expressions of opinion the other way. But it is not necessary to notice these, for the point was expressly decided by the Court of Common Pleas in Leroux v. Brown (m), where the earlier dicta are also considered. The action was on a contract not Decision in to be performed within one year, and made in France, Leroux v. where by the French law the plaintiff might have sued Brown: on it. For the plaintiff it was argued that s. 4 of the ^vouTbut ■fr Statute of Frauds applied to the substance of the con- r jl 6071 tract, and therefore, on general principals of private in- only not en- ternational law did not affect contracts which were made forceab] out of England: and which as to their substance were to be governed by the law of the place where they were made. But for the defendant it was answered that this enactment, like the Statute of Limitation, only affected the remedy, and was therefore a law of the procedure of the English courts, and as such binding on all suitors who might seek to* enforce their rights in those courts: the agreement might be good enough for any other pur pose, but the plaintiff could not sue on it in England. And this view was adopted by the court. Jervis, C. J. said: " The statute in this part of it does not say that unless those requisites are complied with the contract shall be void, but merely that no action shall be brought upon it. 10 . . . . The fourth section relates only to the procedure and not to the right and validity of the con- tract itself." It will be observed that the plaintiff was here in the curious position of contending, in order to support his right to recover on a contract made in France, that it would have been absolutely void if made in Eng- land (n). The decision in Leroux v. Brown, taken to- ! . (fc) Cp. Crosby v. Wadsworth, 6 East 602. (I) 12 Ves. at p. 73. (m) 12 C. B. 801, 22 L. J. C. P. 1; and see per Lord Blackburn in Maddison v. Alderson, ubi sup. (n) Leroux v. Brown was doubted by Willes, J. in Williams, 10 Potts v. Merritt, 14 B. Monr. 406; Lucas v. Mitchell, 3 A. K. Marsh, 244; Cooper v. Hornsby, 71 Ala. 62; Minns v. Morse, 15 Ohio, 568; Crane v. Gough, 4 Md. 316; Harrows. Johnson, 3 Met. (Ky.) 578; Swanzlyu. Moore, 22 111. 63; Philbrook v. Belknap, 6 Vt. 383; Cornellison v. Id., 1 Bush. 149. 638 AGREEMENTS OF IMPERFECT OBLIGATION. geiher •with the reasoning by which it was arrived at, seems to involve the following propositions as corol- laries : (a-) A foreign or colonial court would enforce an English agreement, notwithstanding that it was infor- mal under s. 4 of the Statute of Frauds, if it had the general requisites of a valid contract in English law, and was not informal according to the local law of pro- cedure." (/?) An English court would enforce a foreign agree- ment, if enforceable by the foreign law applicable to the substance of the agreement, notwithstanding that if made in England it might have been held void under s. 17. (This would not be inconsistent with Hope v. [ -Jc 608] Hope (o), which only shows -fa that English courts will not enforce any contract, to whatever law it should be referred, which contains "any material provision tend- ing directly to infringe within England the policy of the English law" : the expression of Turner, L. J. that a contract must be "consistent with the laws and policy of the country in which it is sought to be enforced" means, as appears by the context, nothing more exten- sive. The agreement there in question was made in France between an Englishman and his wife, and pro- vided in effect for the collusive conduct of a divorce suit in England.) • It was even argued in one recent case that the words "no action shall be brought" confine the operation of the statute to civil process, so that an informal agree- ment for service not to be performed within a year might be enforced by criminal process under the Master and Servant Act, 1867. But the Court held that such a construction would be too unreasonable, and the sta- tute must mean that informal agreements are not to be enforced in any way (p). app. Wheeler, resp. 8 C. B. N. S. 299, 316. Savigny, syst. 8. 27o, also takes the opposite view. We have just seen that the assump- tion as to the effect of s. 17, which, however, is not necessary to the decision, is not now generally accepted. (o) 8 D. M. G. 731, 740, 743. (p) Banks v. Crossland, L. E. 10 Q. B. 97. The Act is now repealed by the Employers and Workmen Act, 1875, 38 & 39 Vict. c. 90. Qu. whether the decision ba applicable to the mali- cious breaches of contract in particular cases which are made 11 When a court is called upon to enforce a contract which has been made in another state or county, it will test the validity of the contract by the foreign law except where domestic policy forbids. Evans v. Kittrell, 33 Ala. 449; Evans v. Andrews, 78 111. 558; Bank of Augusta v. Earle, 13 Peters, 519; Collins Iron Co. v. Burkham, 10 Mich. 283. MONET PAID UNDER INFORMAL AGREEMENTS. 639 It being established that the informal agreements we Results of are considering are not void, it follows that they give im P erf eet rise to imperfect obligations. We will now indicate undfi^s. ^ of the results. We have seen that neither the obligation Statute of itself nor any right immediately founded on it, can be Frauds, directly enforced. But it is recognized for the purpose of explaining anything actually done in pursuance of it, and anything so done may in many cases be a good consideration for a new obligation on a subsequent and distinct contract, or a sufficient foundation for a new obligation quasi ex contractu. a. Money paid under an informal agreement cannot As to be recovered back merely on the ground of the agree- money paid, ment not ^ being enforceable. 12 Thus if a responsi- ["A - 609] bility has been assumed and executed under a verbal guaranty, the guarantor cannot recover back the money paid by him (q). So a purchaser cannot recover a de- posit paid on an informal agreement for the sale of land, the vendor remaining ready and willing to com- plete (r). And not only can the one paity keep money actually paid to him by the other, but if money is paid by A. to B. in order to be paid over to C. in pursuance of an informal agreement between A. and C. which C. has executed, then C. can recover it as money received to his use. In Griffith v. Young (s) the plaintiff was the defendant's landlord. The defendant wished to assign to one P., which he could not do without the plaintiff's consent. It was verbally agreed that P. should pay the defendant 100Z. for goodwill, out of which the defendant was to pay 40Z. to the plaintiff for his con- sent to the assignment, P. knowing of this agreement paid the 100Z. to the defendant: it was held that the defendant was liable to the plaintiff for 40Z. in an action for money received to his use. Lord Ellenborough said: "If one agree to receive money for the use of another upon consideration executed, however frivolous or void the consideration might have been in respect of the person paying the money, if indeed it were not ab substantive offences by* the Conspiracy and Protection of Pro- perty Act, 1875, 38 & 39 Vict. c. 86. (?) Shaw v. Woodcock, 7 B. & C. 73, 83, 84. Cp. Sweet v. Lee, • 3 M. & Gr. 452. (r) Thomas v. Brown, 1 Q. B. D. 714. (*) 12 East 513. 12 A contract which cannot be enforced because not in con- formity with the statute of frauds, is rendered good by voluntary execution. Sovereign v. Ortman, 47 Mich. 181, and neither party can undo what has been done. Freeman u.Headly, 4Vroom, 523. 640 AGREEMENTS OP IMPERFECT OBLIGATION. solutely immoral or illegal, the person so receiving it cannot be permitted to gainsay his having received it for the use of that other." On the same principle, if on the faith of an informal agreement money has been paid in advance to a party who afterwards refuses or fails to perform his part of it, or has been expended on his account, it is conceived that proof of the agreement may be admitted to show what was in fact the consideration which has failed (t). b. The execution of an informal agreement may be [ -jf 610] -^shown as a fact, and the party who has had some benefit from such execution, so as in fact to get what he bargained for, cannot treat the bargain as a nullity. Thus the delivery of possession under an informal agreement for the sale of land is a good consideration for a promissory note for the balance of the purchase- money (u). It was held in the case cited that the bar- gain was for a future conveyance, and that the de- fendant, who did not deny the plaintiffs' allegation that they were willing to convey, had got all he bargained for. The same holds of an account stated. In Cocking v. Ward (a;) there was an oral agreement* by an incoming tenant from year to year to pay 100Z. to the outgoing tenant: it was held that the agreement was within s. 4 of the statute, and the outgoing tenant could not re- cover the 100Z. on the agreement itself, but that on an account stated he conld. Again, money due simply under an informal agree- ment from the plaintiff to the defendant cannot of course be set off; but the performance of an informal agreement by the defendant may be good as an accord and satisfaction. In Lavery v. Turley (y) the plaintiff sued for goods sold, &c. : the defendant pleaded an equitable plea showing that in pursuance of an agree- ment between the parties (which turned out to be ver- bal) the defendant had given up to the plaintiff pos- session of a house and premises in satisfaction of the causes of action sued upon. The plea was held good, and it seems it was good enough at law (per Bramwell and Channel], BB. ) Pollock, C. B. said: "It is pleaded as a fact that the defendant performed the agreement and the plaintiff accepted such performance in satisfac- it) See Pullbrook v. Lawes, 1 Q. B. D. 284. u) Jones v. Jones, 6 M. & W. 84. *) 1 C. B. 858, 15 L. J. C. P. 245. y) 6 H. & N. 239, 30 L. J. Ex. 49. PAKT PERFOKMANCE. 641 tion. The objection that the agreement was not in writing is got rid of. The fourth section of the Statute of Frauds does not exclude unwritten proof in the case of executed -^- contracts (z). This of course does not [ ^ 611 j mean that the agreement itself can in any case be sued upon (z). c. It is a well-known doctrine of equity that one who As to part has partly performed an informal agreement for the performance purchase or hiring of land (a) is entitled to and can m e 1 mi Y- sue for a specific performance at the hands of the other party, if the acts of part performance have been done on the faith of an existing agreement, and have been of such a kind that the parties cannot be restored to their original position, and if the existence of an agreement is reasonably to be inferred from the acts themselves, or they are " unequivocally referable to the contract"(6). This seems to be the real meaning of the distinctions as to what is or is not a sufficient part performance (c). Payment of money is in itself an equivocal act, and therefore the part payment of purchase-money is not a sufficient part performance (d). But payment of in- creased rent by a yearly tenant holding over has been held a sufficient part performance of an agreement for a lease (e). Here the part performance consists not in the payment itself, but in a possession which, though continuous in time with the old possession of the plain- tiff as yearly tenant, is shown to be in fact referable to some new agreement (/). This doctrine of part per- formance is not -^-indirect contradiction of the Statute [■^■612] of Frauds. It would be erroneous to say that a court (z) Cp. Souch v. Strawbridge, 2 C. B. 808, 814, 15 L. J. C. P. 170, and remarks on the dictum there in Sanderson v. Graves, L. R. 10 Ex. 234, 238, 241. (a) The doctrine is not extended to other transactions, Britain '«. Eossiter, C. A. 11 Q. B. D. 123, 131. (6) Madilison v. Alderson, 8 App. Ca. at p. 476; Bell's Princi- ples 479, cited by Lord Selborne, ib. at p. 477. (c) See the authorities collected, Dart V. & P. 2, 1023. (d) Lord Selborne, 8 App. Ca. at p. 479. (e) Nunn v. Fabian, 1 Ch. 35. See explanation of that case by Baggallay, L. J. in Humphreys v. Green, 10 Q. B. D. at p. 156; Brett. L. J. took a different view, and could not accept Nunn v. Fabian, ib. p. 160. (/) On the general theory of possession as constituting part performance see per Jessel, M. E. TJngley v. Ungley, 5 Ch. D. at p. 890: " The reason is that possession by a stranger is evi- dence that there was some contract, and is such cogent evidence as to compel the Court to admit evidence of the terms of the con- tract in order that justice may be done between the parties "; to same effect Cotton L. J. in Britain o. Eossiter, 11 Q. B. D. at p. 131. 41 PRINCIPLES OF CONTEACT. 642 AGREEMENTS OF IMPERFECT OBLIGATION. of equity accepts proof of an oral agreement and part performance as a substite for the evidence required by the statute. The plaintiff's right in the first instance rests not on contract but on a principle akin to estoppel; the defendant's conduct being equivalent to a continu- ing statement to some such effect as this: It is true that our agreement is not binding in law, but you are safe as far as I am concerned in acting as if it were. A man cannot be allowed to set up the legal invalidity of an ■ agreement on the faith of which he has induced or al- lowed the other party to alter his position (g). In the law of Scotland such facts are said to " raise a personal exception " (h). The same principle of equity is carried out in cases of representation independent of contract (see p. 615, below) and even of mere acquiescence. In equity an owner may be estopped by acquiescence from asserting his rights, although there has not, been any agreement at all (i). This also explains why the plain- tiff must show part performance on his own side, and part performance by the defendant would be imma- terial (fc). When the Court is satisfied that the plain- tiff has altered his position on the faith of an agree- ment, and that the defendant cannot be heard to deny the existence of that agreement, it proceeds to ascertain by the ordinary means what the terms of the agreement were. The proof of this is strictly collateral to the main issue, though the practical result is that the agreement is enforced. Ante-nuptial d. The case of an agreement in consideration of mar- r^L^Mfn'' " a €> e presents special difficulties, and has to be treated I « oloj in an -^ exceptional manner. This subject is fully discussed in Mr. Davidson's volume on settlements (Dav. Conv. vol. 3, part 1, appendix No. 1, to which place the reader is' referred for details). It is thoroughly settled that the marriage itself does not constitute such a part performance as to make the agreement bind- (g) Caton v. Caton, 1 Ch. at p. 148, Morphett v. Jones, 1 Swanst. at p. 181, Dale v. Hamilton, 5 Ha. at p. 381; accordingly the cases on estoppel at law are compared by Lord Cranworth in Jor- den v. Money, 5 H. L. C. 165, 213, and by Lord Campbell in Piggot v. Stratton, 1 D. F. J. 33, 49. It must be admitted, how- ever, that the recent authorities do not exhibit a very definite or settled theory. (h) Bell, cited by Lord Selborne, 8 App. Cas. 476. (i 1 See Ramsden v. Dyson, L. R. 1 H. L. 129, 140, 168; Powell v. Thomas, 6 Ha. 300; and the remarks of Fry. J. in Willmottc. Barber, 15 Ch. D. 96, 105. (,A) Caton v. Caton, supra. AGREEMENTS IN CONSIDERATION OF MARRIAGE. 643 ing in equity in the manner just mentioned, though other acts may have that effect (I). The next question is, what is the effect of a post- Effect ot nuptial "note or memorandum" satisfying the requisites confirmation of the statute on an ante-nuptial informal agreement ? by post-nup- The authorities are not very clear on this point. It is ia wrl ing " submitted however that if attention be given to the actual decisions rather than to the language used on various occasions, little or no real conflict will be found. It is not the Statute of Frauds alone that has to be con- sidered in these cases, but also the statute of 13 Eliz. c. 5, and the extensive application of it by judicial con- struction to voluntary dispositions of property. Two distinct questions are in fact raised: namely whether an informal ante-nuptial agreement can after the mar- riage be rendered valid as against the promisor, and whether a post-nuptial settlement can be made to re- late back to such an agreement so as to be deemed a settlement made for valuable consideration and thus be rendered valid as against creditors. 13 The first question Good as is answered in the affirmative by the decision in Bark- against j worth v. Young (m). The case was decided °n de- E 10mis °l^ h murrer, and the facts assumed by the Court on the case Young, made by the plaintiff's bill were to this effect. The testator against whose estate the suit was brought had orally promised his daughter's husband before and in consideration of the marriage that at his death she should have an equal share of his property with his other children. After the marriage the testator made an affidavit in the course of a litigation unconnected with this agreement, in which he incidentally admitted it. It was held that the affidavit -^-was a sufficient L *K "14J note or memorandum of the agreement within the Statute of Frauds, and that as such, although subse- quent to the marriage, it rendered the agreement bind- ing on the testator. The second question is practically (though as will be Bad as seen, not quite decisively) answered in the negative by against set- the almost contemporaneous decision in Warden v. t . ^ re ? lt_ Jones (n). That was a creditor's suit to set aside a en ' v _ j ones- post-nuptial settlement. It was attempted io support tl) See Lassencev. Tierney, 1 Mac. & G. 551, 571; Surcome e. Pinniger, 3 D. M. G. 571, 575. (m) 4 Drew 1. (n) 23 Beav. 487, 2 De G. & J. 76. "See Tarbell v. Id., 10 Allen, 278; Marshall v. Morris, 16 Ga. 368; Miller v. Goodwin, 8 Gray, 542; Rivers v. Thayer, 7 Eich. Eq. 136. 644 AGREEMENTS OF IMPERFECT OBLIGATION. the settlement as having been made pursuant to an oral ante-nuptial agreement. This agreement was not referred to in the settlement by any recital or other- wise. It was held both by Komilly, M. R. and by Lord Cran worth, C. on appeal, that the settlement could not be supported: and Lord Cran worth inclined to think (o) that if the settlement had expressly referred to the agreement it would have made no difference." The result of this and of Barkworth v. Young ap- pears to be that the imperfect obligation arising from an informal ante-nuptial agreement can be made perfect and binding as between the parties by a post-nuptial note or memorandum; but that the marriage consider- ation cannot in this way be imported into a post-nuptial settlement made in pursuance of the agreement so as to protect it from being treated as a voluntary settle- ment and subject to the consequent danger of being set aside at the suit of the settler's creditors. 15 There seems to be no ground in either case for drawing any distinction between promises made by one of the per- sona to be married and promises made by a third per- son to either of them. 16 These doctrines appear to be both reasonable in themselves and not inconsistent with one another. There is nothing unexampled in a trans- action being valid as regards the parties to it and in- valid as regards the rights of other persons. It is dif- ficult to see why a writing satisfying the requisites of the statute should in this case be deprived of its effect [ ~fc 615] as -£■ against the party to be charged merely by reason of the marriage having taken place between the dates of the original promise and of the writing. Oq the other hand the rights of creditors would be in serious danger if a mere reference to an ante-nuptial agreement, of which there was no evidence beyond the memory of the persons who for this purpose would have a common in- terest in upholding its existence, were to be admitted to make a post nuptial settlement unimpeachable (p). (o) Notwithstanding Dundas v. Dutens, 1 Ves. jtin. 199. (p) Cp. the remarks of Sir T. Plumer. M. E. in Battersbee v. Farrington, 1 Swanst. 106, 113, doubting whether a recital in a post-nuptial settlement of ante-nnptial written articles would of itself as against creditors be sufficient evidence of the existence "As to anti-nuptial contracts, see Eichardson v. Pierce, 7 E. I. 330; Doyle v. Dixon, 97 Mass. 208; Houghton v. Id., 14 Ind. 505. 15 Nail v. Maurer, 25 Md. 532; Kimborough v. Davis, 1 Dev. Eq. 71. 16 Ogdens. Id., 1 Bland, 284; 1 Bishop on Married Women, Sec. 785, 787. EQUITABLE ESTOPPEL. 645 There is yet another class of cases, not resting on Cases of contract or agreement at all, in which courts of equity e q uit able es- have compelled persons to make good the representa- Anguished tions concerning existing facts (q) on the faith of which they have induced others to act. The distinction is pointed out by Romilly, M. R. in. Warden v. Jones (r): and the extension of the doctrine to married women shows very forcibly that it has nothing to do with con- tract or capacity for contracting: for a married woman's interest in property, though not settled to her separate use, has repeatedly been held to be bound by this kind of equitable estoppel (s). B. Another curious and important instance of an im- b. "Slip" in perfect obligation arising out of special conditions im- marine in- posed on the formation of a complete contract is to be surance: Acts found in the case of marine insurance. In practice the gtamrjed S agreement is concluded between the parties by a memo- policy, randum called a slip, containing the terms of the pro- posed insurance and initialed by the underwriters (t). It is the practice of -fa some insurers always to date the [ -fa 616] policy as of the date of the slip (u). At common law the slip would constitute a binding contract. This however is not allowed by the revenue laws. By the Act now in force on this subject, 30 Vict. c. 23, s. 7, "No contract or agreement for sea insurance (other than such insurance as is referred to in the 55th section of the Merchant Shipping Act Amendment Act, 1862) [i. e. against the owner's liability for r.ccidents of the kinds mentioned in s. 54 of that Act] shall be valid unless the the same is expressed in a policy." And by s. 9 no policy can be given in evidence or admitted to be good or available in law or in equity unless duly stamped. The part of the Act which gives rise to the peculiar results we are about to consider is the 7th section. The 9th section is in the same language as other revenue enactments relating to instruments chargeable with stamp duties (x): and like those enactments, it does not affect any rights or remedies directly, but only in of such articles. And see May on Voluntary and Fraudulent Alienations ol Property. Chap. 5, p. 346, sqq. (q) Per Lord Selborne, Citizens' Bank uf Louisiana v. First National Bank of New Orleans, L. R. 6 H. L. 352, 360, and Mad- dison v. Alderson, 8 App. Ca. at p. 473. (r) 23 Beav. at p. 493; cp. Yeomans v. Williams, 1 Eq. 184, 186: and see Dav. Conv. 3. 640-646. (s) Sharpe v. Foy, 4 Ch. 35, Lush's trusts, ib. 591. For the form of this, see L. R. 8 Q. R. 471, 9 Q. B. 420. (u) See L. R. 8 Ex. 199. (x) See the Stamp Act, 1870, 33 & 34 Vict. c. 97, s. 17. 646 AGREEMENTS OF IMPEBFECT OBLIGATION. [*617] Modem recognition of the slip. To explain . intention of parties. To fix true date of con- tract. an indirect manner by establishing an arbitrary rule of evidence. The earlier statutes on the matter now before us were differently worded, and made every contract of insur- ance "null and void to all intents and purposes" which was not written on duly stamped paper or did not con- tain the prescribed particulars. (35 Geo. 3, c. 63, ss. 11, 14; 54 Geo. 3, c. 144, s. 3: the latter statute was expressly pointed, as appears by the preamble, against the practice "of using unstamped slips of paper for contracts or memorandums of insurance, previously to the insurance being made by regular stamped policies.") It was settled on these statutes that the preliminary slip could not be regarded as having any effect beyond that of a mere proposal (y) : and it was even held that the slip could not be looked at by a court of justice for any purpose whatever (z) The change in -jlf the lan- guage of the existing statute (which repealed the earlier enactments) has given the Courts the opportunity of adopting a more liberal construction without actually overruling any former authorities. Since the Act of 30 Vict, the fact has been judicially recognized that the slip is in practice and according to the understanding of those engaged in marine insurance the complete and final contract between the parties, fixing the terms of the insurance and the premium, and neither party can without the assent of the other deviate from the terms thus agreed on without a breach of faith. Accordingly, though the contract exprested in the slip is not valid, that is, not enforceable at law or in equity, it may be given in evidence wherever it is, though not valid, material (a). In the case referred to the slip was admitted to show whether the intention of the parties was to insure goods by a particular named ship only, or by that in' which they might be actually shipped, whatever her name might be. A still more important application of the same principle was made in Cory v. Patton (b), where it was held that the time when the contract is concluded and the risk accepted is the date of the slip, at which time the underwriter becomes bound in honour, though not in law, to execute a formal policy; that the Court, when a duly stamped (y) See per Willes, J. in Xenos v. Wickham, L. E. 2 H. L. 296, 314, Smith's ca. 4 Ch. 611. . (z) See per Blackburn, J. in Fisher v. Liverpool Marine Insur- ance Co., L. K. 8 Q. B. 469, 474. (a) Per Cur. Ionides v. Pacific Insurance Co., L. E. 6 Q. B. 674, 685, aflfd. in Ex. Ch. 7 Q. B. 517. (6) L. E. 7 Q. B. 304, see further s. c. 9 Q. B. 577. 647 policy is once before it, may look to the slip to ascertain the real date of the contract; and therefore that if a material fact comes to the knowledge of the assured after the date of the slip and before the execution of the policy, it is not his duty either in honour or in law to disclose it, and the non-disclosure of it does not vitiate the policy. This holds though after the completion of the contract by the slip a new term be added for the benefit of the underwriters (c). The same doctrine has been -^- considered and allowed, though not directly [ ^ 618] applied, in other cases. In Fisher v. Liverpool Marine Collateral Insurance Co. (d) the slip had been initialed but the bearings of insurance company had executed no policy. In the e rme ' case of an insurance with private underwriters it is the duty of the broker of the assured to prepare a properly stamped policy and present it for execution. But in the case of a company the policy is prepared by the company executed in the company's office, and handed over to the assured or his agent on application. It was held that there was no undertaking by the company, distinguishable from the contract of insurance itself, to do that which it would be the duty of a broker to do in the case of private underwriters; that the only agree- ment of the company with the assured was one entire agreement made by the initialing of the ship and that as this was an agreement for sea insurance, the statute applied and made it impossible to maintain any action for a breach of duty with regard to the preparation and execution of a policy. In Morrison v. Universal Marine Insurance Co. (e), the question arose of the effect of delivering without protest a stamped policy pursuant to the slip after the insurers had discovered that at the date of the slip a material fact had been concealed. It was held in the Exchequer Chamber, reversing the judgment of the Court below, that the delivery of the policy did not proclude the insurers from relying on the concealment, but that it was a question properly left to the jury whether they had or had not elected to abide by the contract. This implies not only that the rights of the parties are determined at the date of the slip, but that the exepution of the stamped policy afterwards has little or no other significance than that of a necessary (c) Lishruan v. Northern Maritime Insurance Co., L. E. 8 C. P. 216. affirmed in Ex. Ch. 10 C. P. 179. (d) L. R. 8 Q. B. 469 (Blackburn, J. diss.) affd. in Ex. Ch. 9 Q. B. 218. («) L. E. 8 Ex. 40, in Ex. Ch. ib. 197. 648 AGREEMENTS OP IMPERFECT OBLIGATION. Application in winding- [*619J up insurance companies. Stamp duties in general. Variation by subsequent unstamped agreement. formality (/). In the case of a mutual marine in- surance association, a letter by which the assured under- ■^ took to become members of the association was admitted as part of one agreement with the stamped policy, to show that the assured were contributories in the winding-up of the association (g). In the winding- up of another such association a member has been admitted as a creditor for the amount due on his policy, though unstamped, when the liability was admitted by entries in the minute books of the association, which seem to have been considered equivalent to an account stated (h). It has already been observed that the general revenue laws as to stamp duties are on a different footing. How- ever their effects may in one or two cases resemble to some extent those which under the present head we have attempted to exhibit. Thus if an unstamped document combines two characters (as, for instance, if it purports to show both an account stated and a receipt), and if in one of those characters it requires a stamp, and in the other not, it may be given in evidence in the second character for any purpose unconnected with he first (i)." In a case where the parties to an agreement in writ- ing had afterwards varied its terms by a memorandum in writing, and the memorandum was not stamped, the plaintiff joined in his action a count on the agreement in its original form and another on the agreement aa varied: and when it appeared by his own evidence that the memorandum did materially alter the first agree- ment, but was unavailable for want of a stamp, it was held that he could not fall back on the agreement as it originally stood (&). 18 Neither this decision nor the (/) See the judgment of Cleasby, B. in the Court below, L. R. 8 Ex. at p. 60. (jf) Blyth & Co.'s ca. 13 Eq. 529. (h) Martin's claim', 14 Eq. 148. (i) Matheson v. Ross,- 2 H. L. C. 286, and see JChitty on Con- tracts, 125 (10th ed.). (fc) Reed v. Deere, 7 B. & C. 261. 17 A contract which is void in the country where made is also void wherever its enforcement is sought. Skinner v. Tinker, 34 Barb. 333; Clegg v. Levy, 3 Camp. 166; Wynne v. Jackson, 2 Russ. 351. 18 In the old cases, and some of the modern ones, it has been held that a specialty cannot be varied or abrogated by words not under seal because "every contract ought to be dissolved by matter of as high a nature as the first deed. Rutland v. Case, 5 Co. 25 b; Vaugn v. Ferris. 2 W. & S. 46; Hume v. Taylor, 63111. 43; Perry v. Clymore, 3 McCord, 245; Dalacroix v. Bulkley, 13 Wendell, 71; Chapman v. McGrew, 20 111. 101. But the reverse was laid down in Canal Co. v. Ray, 101 U. S. 522. COSTS OF UNCERTIFICATED SOLICITORS. 649 earlier authorities on which it rested, were referred to in Noble v. Ward (I). In that case there was a sub- stituted agreement which was void under s. 17 of the Statute of Frauds: and it was held that -^- as the par- [ ^ 620] ties had no intention of simply rescinding the former agreement, that former agreement remained in force. The two cases, if they can stand together, must do so by reason of the distinction between a contract the record of which is unavailable for want of a stamp, and an agreement which is void from its inception. In a much litigated case of Evans v. Prothero (m) Attempt to the question arose whether a document purporting to use unstamp- be a receipt for purchase-money on a sale of land, but ? d document insufficiently stamped for that purpose, can be admit- gp e ^ t * ted as evidence to prove the existence of an agreement character, for sale : but the form in which it arose was unfortu- nately ill suited for the attainment of a final and satis- factory decision. The existence of the agreement was in issue on a trial directed by the Court of Chancery: the document above mentioned was tendered as proof and objected to: the jury found in favour of the agree- ment, and a new trial was applied for. This was granted by Lord Cottenham: on the second trial the same thing happened again: Lord Cottenham sent the case back to a third trial, holding on each occasion that the document was inadmissible. The third trial took the same course as the first and second. But the motion for a fourth trial came before Lord St. Leonards, who took a con- trary view to Lord Cottenham's and refused it. The judges before whom the applications came in the Court of Chancery in the first instance, and those before whom the issues were tried at Cardiff assizes, were also divided in opinion. The point must therefore be re- garded as still quite unsettled, though the analogy of other authorities seems to favour the opinion of Lord St. Leonards. C. There are also many statutes which impose special q statutory conditions on the exercise of particular professions and conditions occupations and the sale of particular kinds of goods, affecting pro- •jf Most of these, however, are so framed, or have been so r^fgoVi construed, as to have an absolutely prohibitory effect, L « J (I) L. R. 1 Ex. 117, in Ex. Ch. 2 Ex. 135: but otherwise -where the substituted agreement has been executed in part; for this shows that the old one is gone: Sanderson v. Graves, L. E. 10 Ex. 234. (m) 2 Mac. & G. 319, 1 D. M. G. 572. 650 AGREEMENTS OF IMPERFECT OBLIGATION. Attorneys and solici- nncertificat- ed solicitor how far allowed. that is, not merely to take away or suspend the remedy by action, bat to render any transaction in which their provisions are disregarded illegal and void. The prin- ciples applicable to such cases have been considered under the head of Unlawful Agreements (Ch. VI.). In a few cases, however, there is not anything to prevent a right from being acquired, or to extinguish it when ac- quired, but only a condition on which the remedy de- , pends. Of this kind are the provisions of the Act 6 & 7 Vict. c. 73, with respect to attorneys and solicitors, and of the Medical Act, 1858 (21 & 22 Vict c. 90), with respect to medical practitioners. By the 6 & 7 Vict. c. 73, s. 26, extended by 37 & 38 Vict. c. 68, it is enacted in substance that an attorney tors. Costs of or solicitor practising in any court without having a stamped certificate then in force (as provided for by ss. 22—25, and now 23 & 24 Vict. c. 127, ss. 18—23) shall not be capable of recovering his fees for any business so done by him while uncertificated. This however does not make it unlawful for the client to pay such fees if he thinks fit, nor for the solicitor to take and keep them. It has been held that a defeated party in an action who has to pay his adversary's costs is bound by any such payment which has been actually made, and cannot claim to have it disallowed after taxa- tion (n). But, since the Act of 1874 at all events, a successful party whose solicitor was uncertificated can- not recover costs if the objection is made on taxa- tion (o). This appears to leave untouched an earlier case (p) where it was decided that items for business done by a solicitor while uncertificated must be allowed as against the client in a taxation on the client's own application; for the client submits to pay what shall be found due, not -^ only what the solicitor might have sued for, and the debt is not destroyed. Proceedings taken by a solicitor who has not renewed his certificate cannot be on that account set' aside as irregular (q). It is said that an attorney can have no lien for business done by him while uncertificated (r). But the case cited for this (s) was on the earlier Attorneys Act, 37 Geo. 3, c. 90, by which the admission of an attorney neglecting to obtain his certificate as thereby directed was in ex- (») Fullalove v. Parker, 12 C. B. N. S. 246, 31 L. J. C. P. 239, 240. (o) Fowler v. Monmouthshire Canal Co., 4 Q. B. D. 334. ( p) lie Jones, 9 Eq. 63. (q) Sparling v. Brereton, 2 Eq. 64. (r) Chitty's Archbold's Pr. 69, ed. 1866. (s) Wilton v. Chambers, 7 A. & E. 524. [ *:622] MEDICAL ACT. 651 press terms made void (s. 31): it was held that under the special circumstances of the case (which it is un- necessary to mention), there had been a neglect within the meaniDg of the statute so that the attorney's ad- mission was void, and that he must be regarded as hav- ing been off the roll of attorneys. He was therefore, as a necessary consequence, incapable of acquiring any right whatever as an attorney while thus disqualified. It is submitted that under the modern Act there is no reason for depriving an uncertificated solicitor of his lien, at any rate in the absence of any wrong motive or personal default in the omission to take out the certifi- cate. Apart from this, a solicitor cannot in any case sue As to time of for costs till a month after the bill has been delivered suing for (6 & 7 Vict. c. 73, s. 37), unless authorized by a judge costs - to sue sooner on one of certain grounds now much en- larged by the Legal Practitioners Act, 1875, 38 & 39 Vict. c. 79 (*). The rights of medical practitioners now depend on Medical the Medical Act, 1858, and (in England only) the Apo- practitioners, thecaries Act, 55 Geo. 3, e. 194. Before the Medical Common law Act the state of the law, so far as concerned physicians jijLri p ysl " (but not surgeons or apothecaries) was this. It was presumed, in accordance with the general usage and understanding, that the services •fc of a physician were [ ^ 623] honorary, and were not intended to create any legal ob- ligation : hence no contract to pay for them could be implied from his rendering them at the request either of the patient or of a third person. But this was a presumption only, and there was nothing contrary to law in an express contract to pay a physician for his services, which contract would effectually -exclude the presumption (u). The Medical Act, 1858 (21 & 22 Vict. c. 90). s. 31, Provisions of enacts that every person registered under the Act shall Medical Act, be entitled according to his qualification to practice medicine, &c, and to recover reasonable charges for professional aid, &c. : but it is provided that any col- lege of physicians may pass a by-law that none of their fellows or members shall be entitled to sue "in manner afores.aid." The effect of this enactment is to put an (l) As to special agreements between solicitor and client, see p. 629, below. («) Veitch v. Russell, 3-Q. B. 928, 12 L. J. Q. B. 13. No such presumption exists in the United States; and qu. how far, if at all, it exists in English colonies. 652 AGREEMENTS OF IMPERFECT OBLIGATION. Apothecaries Act,55Gteo.3. Does s. 31 of the Medical [*624] Act extend to express contracts? end to the presumption of honorary employment which formerly existed (x). It remains competent however for a medical man to attend a patient on the under- standing that his attendance shall be gratuitous, and whether such an understanding exists or not in a dis- puted case is a question of fact for a jury (y). By the Act 55 Geo. 3, c. 194, s. 21, an apothecary cannot recover his charges without having a certificate from the Apothecaries' Society: and this is not repealed by the Medical Act (z). Moreover s. 31 of the Medi- cal Act enables a practitioner to sue only "according to his qualification," and a qualification in one capacity does not entitle him to sue for services rendered in another (a). It may perhaps be doubted whether the "reasonable charges" of s. 31 include remuneration for which there -^T is an express contract: for as to this there was no necessity for any enabling enactment. Again this question arises: Can a patient who has expressly con- tracted to pay his physician avail himself of this sec- tion to refuse payment on the ground of the charges being unreasonable? Then, if the proviso as to col- legiate by-laws is to be taken as applicable only to the same matter as the enactment which it qualifies, it may possibly follow that there is no power for a college to make a by-law to restrain a fellow or member from su- ing on an express contract. It seems more probable, however, that s. 31 should be read together with the following section (s. 32) and taken as co-extensive with it. That section enacts that no practitioner shall re- cover any charge for medical or surgical advice, &c, unless he proves that he is registered under the Act (6). And this at all events includes express as well as im- plied contracts; it also includes contracts made with any third person who is to pay for medical attendance as well as those made with the patient himself . In Alvarez (x) Gibbon v. Budd, 2 H. & C. 92, 32 L. J. Ex. 182. See judg- ment of Martin, B. (y) Gibbon v. Budd, last note. (z) See decisions on this Act collected, 1 Wins. Saund. 513-4. (a) Leman v. Fletcher, L. E. 8 Q. B. 319. (6) It was held not necessary that the practitioner should have been registered at the time of rendering the services sued for if he could prove that he was actually registered at the time of the trial in Turner v. Reynall, 14 C. B. N. S. 328, 32 L. J. C. P. 164. But see contra, Leman v. Housely, L. K. 10 Q. B. 66, decisively and at all events as to apothecaries; for an unrepealed section of the Apothecaries Act (55 Geo. 3, c. 194, s. 20) expressly forbids unqualified persons to practise: and in the clear opinion of the Court on the construction and intention of the Medical Act also. MEDICAL ACT. 65S de la Rosa v. Prieto (c) the plaintiff was a Spanish practitioner domiciled in England but unregistered, and he had agreed with the defendant, who was the chief medical officer of a Peruvian ship of war lying in the Thames, to take the medical charge of the men on board for a fixed monthly sum during the defendant's absence. It was held that this contract fell within the Act and the plaintiff could not recover. It made no difference that the defendant was a medical man, for the plaintiff was not his assistant but was acting indepen- ^- dently, and merely looked to him for payment. [-^-625] It was also argued that the contract should be governed not by the law of England but by the law of Peru; but the Court held, that since s. 32 of the Medical Act was part of the lex fori of the country where the remedy was sought, the general rule that the lex fori governs the remedy must be applied. Cp. the decision on s. 4 of the Statute of Frauds in Leronx v. Broum (d). By the Austrian Code (§ 879) special agreements for remuneration between a physician or surgeon and his patient, as well as between a lawyer and his client, are mill and void. The general result is, that according to the modern General re- law there is no presumption against the existence of a suit as to contract to remunerate a medical attendant for his ser- medical vices; but registration under the Medical Act, and also J^rees the proper special qualifications for the special branch of practice in which the services are rendered (which registration and qualification, according to the later and better opinion, must exist at the time the services are rendered) (e), are conditions precedent to his recov- ering anything for such services on a contract either express or implied: and the right to recover on an im- plied contract at all events (and probably also on an express one) may be excluded in the case of fellows or members of any college of physicians by a prohibitive by-law (/). Moreover, it seems probable that even an express contract is subject to the condition of the charges being reasonable. 3. We now come to the cases in which some positive 3. No rule of law or statutory enactment takes away the rem- remedy edy altogether. allower beer, &c, by County Courts Act, 1«67. • 631] Trade union agree- ments under Trade Union Act, 1871. By the Act 24 Geo. 2, c. 40, s. 12, commonly known as the Tippling Act, no debt can be recovered for spir- ituous liquors supplied in quantities of less than -twenty shillings' worth at one time (a). The County Courts Act, 1867 (30 & 31 Vict. c. 142), s. 4, similarly enacts that no action shall be brought in any court for the price of beer or other specified liquors ejusdem generis consumed on the premises. The Act of Geo. 2 applies whether the person to whom the liquor is supplied be the consumer or not (6). t^As these enactments do not make the sale illegal, money which has been paid for spirits supplied in small quantities cannot be recov- ered back (c). A debt for such supplies was once held to be an illegal consideration for a bill of exchange (d) : but this decision seems dictated by an excess of zeal to carry out the policy of the Act, and is possibly ques- tionable. In a later case at Nisi Prius (e) Lord Tenter- den held that where an account consisted partly of items for spirituous liquors within the Tippling Act, and partly of other Items, and payments had been made generally in reduction of the account, the vendor was at liberty to appropriate these payments to the items for liquor, so as to leave a good cause of action for the balance; thus treating these. debts, like debts barred by the Statute of Limitation of James I., as existing though not recoverable. The writer is not aware of any decision on the modern enactment as to beer, &c, in the County Courts Act, 1867. By the Trade Union Act, 1871 (34 & 35 Vict. c. 31), s. 4, certain agreements therein enumerated and relat- ing to the management and operations of trade unions cannot be sued upon, but it is expressly provided that they are not on that account to be deemed unlawful. In this enumeration are included agreements to pay sub- scriptions. It has also been decided that a member of a trade union who complains of having been wrongfully expelled cannot be reinstated by the Court, though this may be done in the case of a club or other voluntary as- sociation holding property for purposes lawful at com- (a) By 25 & 26 Vict. c. 38, an exception is made in favour of sales of spirituous liquor not to be consumed on the premises, and delivered at the purchaser's residence in quantities of not less than a reputed quart. (6) Hughes -v. Done or Doane, 1 Q. B. 294, 10 L. J. Q. B. 65. (c) Philpott v, Jones, 2 A. & E. 41. (d) Scott r. Gillmore, 3 Taunt. 226. (e) Crookshanks v. Rose, 5 C. & P. 19. TIPPLING ACT : TRADE UNION AGREEMENTS. 659 mon law, on the ground of the expelled member being deprived of a right, of property (/). Practically trade union Subscriptions are thus placed on the same footing as subscriptions to any club -^ which is not proprie- [ -fa 632] tary (g). So far as we are aware there is nothing in *" principle against the payment of subscriptions to a club being legally enforced: but it would in most cases be extremely difficult, if not impossible, to ascertain who were the proper persons to sue (h). The same difficulty exists in the case of any numerous unincorporated asso- ciation. But this belongs to another division of our subject (i). The present place seems on the whole the most appro- Cases of priate one for mentioning a singular case which may be analogy to regarded as the converse of those we have been dealing imperfect with. A valuable consideration is given in the course of Effect 'f ns ' a transaction which as the law stands at the time is repeal of wholly illegal and confers no right of action on either usury laws party. Afterwards the law which made the transaction il- as to legal is repealed. Ts the consideration so received a good macfe'oefore. foundation for a new express promise on the part of the receiver ? The question came before the Court of Ex- chequer in 1863, some years after the repeal of the usury laws. The plaintiff sued on bills of exchange drawn and accepted after that repeal, but in renewal of other bills given before the repeal in respeet of advances made on terms which under the old law were usurious. The for-, mer bills were unquestionably void: but it was held by the Court (Martin, B. dissenting) that the original ad- vance was a good consideration for the new bills. The question was thus stated in the judgment of the major- ity: — "Whether an advance of money under such cir- cumstances as to create no legal obligation at the time to repay it can constitute a good consideration for an ■^f- express, promise to do so." And the answer was [ *j{ 633] given thus: — " The consideration which would have been (/) Eigby v. Connol, 14 Ch. D. 482; cp. Wolfe v. Matthews, 21 Ch. D. 194. (?) In the case of a proprietary club the proprietor can sue: see Eaggett v. Bishop, 2 C. & P. 343; Eaggett v. Musgrave, ib. 556. f. (h) In the common law courts of some of the United States, however, the still more difficult attempt has been made to enforce promises to subscribe to public objects in which the subscribers had a common interest: and in Massachusetts and New York not without success: Hilliard on Contracts, 1. 259; Parsons on Con- tracts, 1. 377. But see now Cottage Street Church v. Kendall, 121 Mass. 528, where the opinion expressed in earlier dicta, that " it is a sufficient consideration that others were led to subscribe by the very subscription of the defendant," was overruled, (i) See pp. 204, 223, supra. 660 AGKEEMENTS OP IMPEKFECT OBLIGATION. Treatment of equitable obligations at common law. [ • 634] Summary of results. sufficient to support the promise if the law had not for- bidden the promise bo be made originally does not cease to be sufficient when the legal restriction is abrogated. ... A man by express promise may render himself liable to pay back money which he has received as a loan, though some positive rule of law or statute intervened at the time to prevent the transaction from constituting a legal debt " (fc). The debt, therefore, which was orig- inally void by the usury laws, seems to have been put in the same position by their repeal as if it had been a debt once enforceable but barred by the Statute of Limitation. 19 There is one other anlaogy to which it is worth while to advert, although it was never of much practical im- portance, and what little it had has in England been taken away by the Judicature Acts. Purely equitable liabilities have to a certain extent been treated by com- mon law courts as imperfect obligations. The mere existence of a liquidated claim on a trust against .the trustee confers no legal remedy. But the trustee may make himself legally liable in respect of such a claim by an account stated (Z), or by a simple admission that he holds as trustee a certain sum due to the cestui que trust (m). A court of law has also held that a pay- ment made by a debtor without appropriation may be appropriated by the creditor to an equitable debt (n). ■fa It may be useful to sum up in a more general, from the results which have been obtained in this chap- ter. An imperfect obligation is an existing obligation which is not directly enforceable. This state of things results from exceptional rules of (k) Flight v. Reed, 1H.&C. 703, 715, 716; 32 L. J Ex. 265, 269. But is not the consideration -wholly past at the time of the promise? The consideration for accepting a renewed bill of ex- change is not the value received which was the consideration of the original bill, but the abandonment of the right of action there- on. Prof. Langdell (Summary, I 76'i supports the case on the ground that the bills sued on were an actual payment of the usu- rious loan. Quod nimium subtiliter dictum videtur. (/) Topham v. Morecroft, 8 E. & B. 972, 983; Howards. Brown- hill, 23 L. J. Q. B. 23. (m) Eoper v. Holland, 3 A. & E. 99. (n) Bosanquet v. "Wray, 6 Taunt. 597. 19 If a contract reserving interest is valid in a state where and when made, it will be enforced by the courts of another state. wherein, had it been there entered into, it would have been void for usury. Phila. Loan Co. v. Towner, 13 Conn. 249; Scott v. Perlee, 39 Ohio, 63; Commercial Bank v. King, 2 La. An 457- DeWoli v. Johnson, 10 "Wheaton, 367. v GENERAL RESULTS. 661 positive law, and especially from laws limiting the right to enforce contracts by special conditions precedent or subsequent. When an agreement of imperfect obligation is execu- tory, a right of possession immediately founded on the obligation can be no more enforced than the obliga- tion itself. Acts done in fulfilment of an imperfect obligation are valid, and may be the foundation of new rights and liabilities, by way of consideration for a new contract or otherwise. A party who has a liquidated and unconditional claim under an imperfect obligation may obtain satisfaction thereof by any means, other than direct process of law which he might have lawfully employed to obtain it if the obligation had not been imperfect. The laws which give rise to imperfect obligations by imposing special conditions on the enforcement of rights, are generally treated as part of the law of procedure of the forum where they prevail (o), and as part of the lex fori they are applicable to contracts sued upon in that forum without regard to the law governing the sub- stance of the contract (p); but on the other hand they are not regarded in any other forum. (o) Contra Savigny, Syst. 8. 270, 273. (p) This (it is conceived) does not apply to revenue laws, and enactments which are merely ancillary to revenue laws, such aa the 30 Vict. c. 23, s. 7, as to marine insurances. [*635] • APPENDIX. Savigny's definitions of Vertrag and obliga- torischer Vertrag. [*636] Note A. (pp. 1, 6). Terminology and Fundamental Conceptions of Contract. In the two first editions I made nse of Savigny's definition of Vertrag "(which can only be translated by Agreement, but in a widersense than is known to any English writer). It now seems to me out of place in a special treatise on Contract. In the third volume of his System Savigny deals in the most general way with the events capable of producing changes in rights and duties in the field of private law. Such events he calls jurislisehe Thats- achen , an expression to which our own accustomed " acts in the law" seems well fitted to correspond. To speak, as some writers do, of "judicial facts," is to use language which is so far from being English that it becomes intelligible only by a mental re- translation into German. Greater nicety might be obtained, if desired, by coining the term " event in the law" for jurislisehe T/iatsache in its widest sense, and reserving " act in the law" for the species which Savigny proceeds to mark off from the genus, namely, freie Handlung, or better, perhaps, for the further speci- fied kind of voluntary acts which manifest an intention to bring about particular legal consequences. Such an act is called by Savigny Willenserklarung: Specifying yet more, "we distinguish, the acts in which the will of only one party is expressed from those in which the wills of two or more concur. This last species gives the conception of Vertrag. Savigny defines it as the con- currence of two or more persons in the expression of a common intention, whereby mutual rights and duties of those persons are determined. " Vertrag ist die Vereinigung Mehrerer zueiner iibereinstimmenden Willenserklarung, wodurch ihre Rechtsver- haltnisse bestimmt werden." (Syst. 3. 309. ) This covers a much wider field than that of contract in any proper sense. Every transaction answering this description includes an -fa agreement, but many transactions answer to it which include far more: con- veyances oi property, for example, including- dispositions inter vivos by way of trust and even gifts, 'and marriage. A still fur- ther specification is needful to arrive at the notion of Contract. A contract, in Savigny's way of approaching it, is an agreement which produces or is meant to produce an obligation ( obligator- iseher Vertrag). It is thus defined in his Obligationenrecht, #52 (vol. ii. p. 8): "Vereinigung Mehrerer zu einer ubereinstim- menden Willenserklarung, wodurch unter ihnen eine Obligation entstehen soil." Now the use of the more general notion of Ver- trag, as Savigny himself explains, is not to clear up anything in the learning of contracts. It is to bring out the truth that other transactions which are not contracts, or which are more than con- tracts, have in common with them, the character of consent being (b'62) TERMINOLOGY OF CONTRACT. 663 an essential ingredient. Moreover we should have to consider, before adopting this terminology, the wider question whether the retention of Obligations as a leading divsion in a, modern system of law be necessary or desirable. To apply this division to the Common Law would be as violent a proceeding, in any case, as to ignore it in Roman Law. Tho distinction between the ideas denoted by dominium and obligatio is ot course as fundamental in England as anywhere else; and the habit of using "obligation" as a synonym of "duty," though respectable authority may be found for it, as in my opin- ion to be deprecated. For these reasons Savigny's definition, admirable as it is for its owu purposes and in its own context, and instructive as his work is almost everywhere as an example of scientific method, is now reserved for this note. The reason for which I am no longer content to adopt the Indian Contract Act to the same extent as in the two first editions have been sufficiently explained in the text. I also think it more convenieut to exhibit continuously in this place the provisions of the Act as to the formation of con- tracts than to give them incidentally in the course of my own work. They are as follows: — Indian Contract Act {Preliminary). Indian Contract 2. In this Act the following words and expressions are used in Act. the following senses, unless a contrary intention appears from Interpre- the context: — tation (a) When one person signifies to another his willingness to do clause. or to abstain from doing anything, with a view to obtaining the "Pro- assent of that other to such act or abstinence, he is said to make posal." a proposal: -fa (6) When the person to whom the proposal is made signifies his [ -A- 637] assent thereto, the proposal is said to be accepted. A proposal '-pro- when accepted becomes a promise: mise." (c) The person making the proposal is called the "promisor," ,.„ the person accepting the proposal is called the " promisee ": ^T" (d) When, at the desire ot the promisor, the promisee, or any mi ^° i r | other person, has done or abstained from doing, or does, or abstains an . ^, r from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the. 'Conside- promise: ration." (e) Every promise and every set of promises forming the con- "Agree- sideration for each other, is an agreement: ment." (/) Promises which form the consideration, or part of the con- "Reciprocal sideration for each other, are called reciprocal promises: nroniises." (_?) An agreement not enforceable by law is said to be void: ~ (h) An agreement enforceable by law is a contract (a): "Void (i) An agreement which is enforceable by law at the option of agreement, one or more of the parties thereto, but not at the option of the "Contract." other or others, is a voidable contract: "Voidable (7c) A contract which ceases to be enforceable by law becomes contract." void when it ceases to be enforceable. "Void [It would have been more verbally consistent, perhaps, to say contract." in the last sub- section, " becomes a void agreement."] (a) Compare Blackstone's language (2. 442): "A contract . . is thus defined : an agreement upon sufficient consideration to do or not to do a particular thing." 664 APPENDIX. Communi- cation, acceptance and revo- cation ot proposals. Communi- cation when [*638] complete. Chapter I. Of the Communication, Acceptance and Bewcation of Proposals, 3. The communication of proposals, acceptance ot proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting, or revoking, by -which he intends to communicate sach proposal, acceptance, or revocation, or which has the effect of communicating it. [It would be difficult to find any such general statement in the English authorities; and the language of this section is perhaps open to criticism. A little reflection will show, however, that the substance of it is taken for granted in the whole treatment of questions of contract in our books. ] 4. The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete as against the "A- proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it oomes to the knowledge of the proposer. The communication of a revocation is complete as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge. Illustrations. (a) A. proposes by letter to sell a house to B. at a certain price. ■The communication of the proposal is complete when B. receives the letter. (b) B. accepts A. 's proposal by a letter sent by post. The com- munication of the acceptance is complete as against A. when the letter is posted ; as against B. when the letter is received by A. (c) A. revokes his proposal by telegram . The revocation is com- plete as against A. when the telegram is despatched. It is complete as against B. when B. receives it. B. revokes his acceptance by telegram. B. 's revocation is com- plete as against B. when the telegram is despatched, as against A. when it reaches him. [What of an acceptance that does not arrive at all ? The letter of the text seems to lead to the conclusion of Household Fire Insur- ance Co. v. Grant (p. 35 above); but the spirit of Illustration (c) looks the other way.] Revocation of **• -^ P ro P osai ma y be revoked at any time before the commu- proposals nication of its acceptance is complete as against the proposer, but and ac- ceptances. not afterwards. An acceptance may be revoked at any time before the communi- cation of the acceptance is completed as against the acceptor, but not afterwards. Illustration. A. proposes, by a letter sent by post, to sell his house to B. B. accepts his proposal by a letter sent by post. A. may revoke his proposal at any time before, or at the moment when B. posts his letter of acceptance, but not afterwards. B. may revoke his acceptance at any time before or at the mo- ment when the letter communicating it reaches A., but not afterwards. CONTRACT BY CORRESPONDENCE. 665 6. A proposal is revoked "Re vocation, (1.) By the communication of notice of revocation by the pro- how made. poser to the other party ; -fa (2.) By the lapse of the time prescribed in such proposal for I" -4r 639] its acceptance, or if no time is so prescribed, then by the lapse of a reasonable time, without communication of the acceptance [this seems intended, notwithstanding the unqualified language of s. 5, to cover the case of an acceptance sent by post being lost or seriously delayed]. (3.) By the failure of the acceptor to fulfil a condition preced- ent to acceptance ; or, (4.) By the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before accept- ance. [The words in italics do not represent English law.] 7. In order to convert a proposal into a promise, the accept- Acceptance ance must must be (1) be absolute and unqualified; absolute. (2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communi- cated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but if he fails to do so, he Acceptance accepts the acceptance (a). by perform- 8. Performance pf the conditions of a proposal, or the accept- ing condi- ance of any consideration for a reciprocal promise which may be tions or offered with a proposal, is an acceptance of the proposal. receiving 9. In so far as the proposal or acceptance of any promise is considera- made in words, the promise is said to be express. In so far as tion. such proposal or acceptance is made otherwise than in words, the Promises promise is said to be implied. express and implied. *NoteB. (p. 35). [*640] Authorities on Contract by Correspondence. The first case of any importance is Adams v. Lindsell, 1 B. & Adams V- Aid. 681. Defendants wrote to plaintiffs, "We now offer you Lindsell.' 800 tods of wether fleeces, &c. " (specifying price and mode of delivery and payment), "receiving your answer in course of post." Here, therefore, the mode and time for acceptance were prescribed. This letter was misdirected, and so arrived late. On receiving it, the plaintiffs wrote and sent by post a letter accept- («) Compare Leather-Cloth Co. v. Hieronimus, L. R. 10 Q. B. 140. There goods were ordered to be sent by an unusual route for a special reason; this reason ceased to exist before the order could be executed, and the goods were sent by the usual route: the Court held that this, being acquiesced in by the buyer, was a sufficient performance of the original contract, and not of a substituted contract; and therefore no special memorandum of such alleged substituted contract was required to satisfy the Statute of Frauds. See further, as to the difference between a substituted agreement and substituted performance, Sanderson v. Graves, L. R. 10 Ex. 234: Hickman v. Haynes, L. R. 10 C. P. 598; Plevins v. Downing, 1 C. P. D. 220. 666 APPENDIX. Dnnmore v. Alexander (Se). [*641] Potter v. Sanders. Dunlop v. Higgins. ing the proposal, but the defendants, not, receiving an answer when they should have received it if their proposal had not been delayed, had in the meantime (between the despatch and the arrival of the reply) sold the wool to another buyer. The jury were directed at the trial that as the delay was occasioned by the neglect of the defendants, they must take it that the answer did come back by course of post. On the argument of a rule for a new trial, it was contended that there was no contract till the answer was received. To this the Court replied: — " If that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it; and so it might go on ad infinitum. The defend- ants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs, and then the contract is completed by the ac- ceptance of it by the latter. Then as to the delay in notiiying the acceptance, that arises entirely from the mistake of the de- fendants, and it therefore must be taken as against them that the plaintiffs' answer was received in course of post. " As far as the case goes, it seems to amount to" this: An accept- ance by letter is complete as against the proposer from the date of posting the acceptance if it arrives within the prescribed time, if any, or otherwise within a reasonable time; but if the com- munication of the proposal is delayed by the fault of the pro- poser, and the communication of the acceptance is consequently delayed, such delay is not to be reckoned against the acceptor. In the Scotch case of Dnnmore v. Alexander, 9 Shaw & Dunlop, 191), an acceptance and revocation were written at different times but posted and received at the same time: held that the revoca- tion -fa was effectual. No distinction was taken between postal and other communications. The French Court of Cassation sim- ilarly held in 1813 that when an acceptance and the revocation of it arrive together there is no contract. Merlin, Repertoire, Veidc, ? 1, Art. 3, No. 11 lis, Langdell Sel. Ca. Cont. 155. In Potter v. Sanders, 6 Ha. 1, the posting of a letter of accep- tance is said to be an act which "unless interrupted in its pro- gress" concludes the contract as from the date of the posting. This seems to imply that a letter not received at all would not bind the pioposer. Then comes Dunlop v. Higgins, 1 H. L. C. 381. a Scotch appeal decided by Lord Cottenham. Here the proposal did not' pre- scribe any time, but the nature of it (an offer to sell iron) implied that the answer must be speedy. The acceptance was posted, not by the earliest possible post, but in business hours on the same clay when the proposal was received. The post was then delayed by the-state of the roads, so that the acceptance was re- ceived at 2 p. m. instead of 8 a. m., the hour at which that post should have arrived. The decision was that the contract was binding on the proposer; and it might well have been put on the ground that the acceptance in fact reached him within a reason- able time. Lord Cottenham, however, certainly seems to have thought the contract was absolutely concluded by the posting of the acceptance (within the prescribed or a reasonable time), and that it mattered not what became of the letter afterwards. It appears to have been so understood in Duncan v. Tophnm, 8 C. B. 225, where, however, the decision was on other grounds. CONTRACT BY CORRESPONDENCE. 667 The later cases arose out of applications for shares in com- Hebb's ca. panies being made and answered by letter. Sebb's case, 4 Eq. and Reid- 9, decides only that an allotment of shares not duly despatched path's ca. will not make a man a shareholder; for the letter of allotment was sent to the company's local agent, who did not deliver it to the applicant till after he had withdrawn his application. But the same judge (Lord Romilly), held in Reidpath's case, 11 Eq. 86, that the applicant was not bound if he never received the letter. In British and American Telegraph Company v. Colson, L. R. 6 British and Ex. 108, it was fourfd as a fact that the letter of allotment was American never received. The Court (Kelly, C. B., Pigott, B., and Bram- Telegraph well, B.) held that the defendant was not bound, and endeavored Co. v. to restrict the effect of Dunlop v. Higgins. Colson. In Townsend's case, 13 Eq. 148, the letter of allotment miscar- Townsend's ried, and was delayed some days by the applicant's own fault in ca giving a defective address. By a simple application of Adams v. Lindsell (expressly so treated in the judgment, p. 154) it was held that the applicant was bound, and that a withdrawal of his application, j? posted, (and it seems delivered, p. 151) before he [ -jfc- 6421 actually received the letter of,allotment, was too late. In Harris 1 case, 7 Ch. 557, the letter of allotment was duly re- Harris' ca ceived, but in the meantime the applicant had written a letter withdrawing his application on the ground of the delay (ten days) in answering it. These letters crossed. The Lords Jus- tices (James and Mellish) held that the applicant was bound, on the authority of Dunlap v. Biggins, with which they thought it difficult to reconcile British and Amer. Telegragh Co. v Colson (a), On this, however, no positive opinion was given, ''because al- though the contract is complete at the time when the letter ac- cepting the offer is posted, yet it may be subject to a condition subsequent that if the letter does not arrive in due course of post, then the parties may act on the assumption that the offer has not been accepted" (per Mellish, L. J., at p. 597). In Wall's case, 15 Eq. 18, Malins, V.-C, held that as a fact the Wall's ca. letter had been received, inclining, however, to think Harris' case an authority for the more stringent construction of Dunlop v. Higgins — viz., that the contract is absolute and unconditional by the mere posting. This construction was held by the Court of Appeal in Household Fire Insurance Co. v. Grant, 4 Ex. D. 216, p. 34, above, to be the correct one. The American case of Tayloev. Merchants' Fire Insurance Co., 9 American How, S. C. 390, decided by the Supreme Court in 1850, is of less an( j foreign importance to English readers than it was a few years ago, the authorities ground being now fully covered by our own decisions. But it may still be useful to give some account of it. The insurance company's agent wrote to the plaintiff offering to insure his house on certain terms. The plaintiff wrote and posted a letter accept- ing these terms, which was duly received. The day after it was posted, but before it was delivered, the house was burnt. Tho objection was made, among others, that there was no complete contract before the receipt of the letter, an assent of the company after the acceptance of the proposed terms being essential. But the Court held that such a doctrine would be contrary to mer- cantile usage and understanding, and defeat the real intent of the parties. This decides that a contract is complete as against the proposer by posting a letter which is duly delivered. It may be useful to cite part of the judgment: — (a) It seems not to have been disputed that the letter of allot- ment was in fact sent within a reasonable time. 668 APPENDIX. [*643] Place of contract where it is made by correspon- dence. German Commercial Code. [•644] "The fallacy of the argument, in our judgment, consists in the assumption that the contract cannot be consummated without a ■^•knowledge on the part of the company that the offer has been accepted. This is the point of the objection. But ^ little, reflec- tion will show that in all cases of contracts entered into between parties at a distance by correspondence it is impossible that both should have a knowledge of it the moment if becomes com- plete. This can only exist where both parties are present. . . It is obviously impossible ever to perfect a contract by corres- pondence, if acknowledge of both parties at the moment they be- come bound is an essential element in making out the obliga- tion. . . It seems to us more consistent with the acts and de- clarations of the parties to consider it complete on the transmis- sion of the acceptance of the offer in the way they themselves contemplated, instead of postponing its completion till notice of such acceptance has been received and assented to by the com- pany. ' ' For why make the offer, unless intended that an assent to its terms should bind them? And why require any further assent on their part after an unconditional acceptance by the party to whom it is addressed?" (Pp. 400, 401.) See also 7 American Law Eeview, 433, "Contract by Letter, " where American and French opinions are collected ; and for modern German theories on the subject, Vangerow, Pand \ 603, Windscheid, Pand. \ 306. The German writers are driven to strange shifts to find semblances of authority in the Quellen on these modern controversies. There seems to be a fair consinsus of authority, such as there is, for holding that the place to which a contract made by corres- pondence should be referred is that whence the acceptance is despatched. Savigny, Syst. 8, 253, 257 ; Newcomb v. De Boss, 2 E. & E. 270, 29 L. J. Q. B. 4. Conversely, where an offer to buy goods is made by a letter posted in the city of London, and accepted by sending the goods to the writer's place of business in the city, the whole cause of action arises in the city. Taylor v. Jones, 1 C. P. D. 87. So in criminal law a false pretence contained in a letter sent by post is made at the place where the letter is posted. Reg. v. Holmes, 12 Q. B. D. 23. The German Commercial Code has the following provisions on this subject: — 318. When a commercial contract is proposed between parties present at the same time, the acceptance must be immediate^ otherwise the proposer is no longer bound to his proposal, f 319. When a proposal is on foot between parties at a distance, the proposer remains bound until the time at which he may fairly expect an answer to reach him if despatched in ordinary course and in due time.f In estimating this time he may assume that his -^ proposal was duly received [surely not if, as in Adams v. Lindsell (a), it was delayed by his«own negligence?] In the event of an acceptance despatched in due time not arriving till after such time as aforesaid, no contract is concluded if the proposer has given notice of revocation in the meantime, or gives it forthwith [olme Verzug) on receiving the acceptance. [The clauses marked | seem only to say in a rather elaborate way that a proposal is revoked by the lapse of a reasonable time without acceptance ; s. 319, however, tacitly involves the im- portant proposition — now negatived, as we saw in the text, by English law — that an answer which never arrives, whether sent by post or otherwise, cannot conclude a contract. ] (a) 1 B. & Aid. 681. CONTRACT BY CORRESPONDENCE. 669 320. When the revocation of a proposal reaches the other party before or at the same time with the proposal itself, the proposal is deemed null and void (1st fiir nieht gesehehen zu erachten.) In like manner the acceptance is deemed null and void if the revocation has been communicated to the proposer before the acceptance or at the same time with it. 321. Where an agreement has been concluded between parties at a distance, the conclusion of the agreement is to be dated from the time at which the communication of the acceptance was delivered tor despatch [out of the acceptor's control?] (in welchem die Erklarurjg der Annahme Behufs der Absendung abgegeben ist). 322. An acceptance subject to conditions or reservations is equivalent to a refusal coupled with a new proposal. The subject is dealt with by the Swiss Federal Code of Obliga- tions (in force since January 1, 1883), on the same lines, but rather more fully, in Articles 1 — 8. We subjoin the French text. I. Des Obligations Resultant d'tjn Conteat. De la conclusion des contracts. Article premier. II n'y a contrat que si les parties ont irnnifeste d'une maniere concordante leur volonte reciproque. Cette mani- festation peut etre expresse ou tacite. 2. Si les parties se sont raises d'accord sur tous les points essen- tiels, elles sont presum^es avoir entendu s'obliger definitivement, encore qu'elles aient reserve' certains points secondaires. A defaut d'accord sur ces points secondaires, le juge les regie en tenant compte de la nature de 1'affaire. II n'est pas prejuge par les presentes dispositions aux regies coricernant la forme des contrats. ■^•3. Toute personne qui propose a une autre laconclnsion d'un (" -^ 6451 contrat en lui fixant un delai pour accepter est liee par son offre jusqu'a l'expiration du d<51ai. Elle est degag£e, si l'acceptation ne lui est pas parvenue avant le terme fix6. 4. Lorsque l'offre a6t6 faite si une personne presente sans fixa- tion d'un delia pour l'acceptation, l'auteur de roffre est degag6 si l'acceptation n'a pas lieu sur-le-champ. 5. Lorsque l'offre a ete faite sans fixations de d61ai a une per- sonne non presente, l'auteur de l'offre reste lie jusqu'au moment ou il peut s'attendre a l'arriv£e d'une rtiponse qui serait expe- dite a temps et r£gulie;rement. II a le droit d'admettre, pour le calcul ft etablir, que le destinataire a recu l'offre en temps voulu. Si l'acceptation exp£di6e a temps parvient tardivement & l'au- teur de l'offre et que celui-ci entende ne plus £tre li6, il doit, sous peine de dommages et int&ets, en informer imm^diatement l'acceptant. Lorsque, k raison de la nature, speciale de 1'affaire prorios^e, l'auteur de l'offre devait ne pas s'attendre 4 une acceptation ex- presse, le contrat est repute^ conclu si l'offre n'a pas et6 refuse'e dans un delai convenable. 6. L'auteur de l'offre n'est pas lie lorsqu'il a fait & cet £ga'rd des r&erves formelles (par exemple, par l'adjonction des mots: "sans engagement"), ou si son intention de ne pas s'engager r<5- sulte n^cessairement soit des circonstances, soit de la nature speciale de 1'affaire proposed. 7. L'offre est considered comme non avenue, si le retrait en parvient a l'autre partie avant l'offre ou en meme temps. 670 APPENDIX. Italian Commercial Code. [*646] De m6me, l'acceptation est consideree eomme noti avenue, si le retratt en parvient a l'auteur de l'offre avant l'acceptation ou en meme temps. 8. Lorsqu'un contrat est intervenu entre absents, ildeploie ses effets a dater du moment ou l'acceptation a 6t6 expedite. Lorsqu'une acceptation expresse n'est pas necessaire, les effets du contrat commencent & dater de la reception de l'offre non refusee. The Italian Commercial Code in force since Tan. 1, 1883, takes a somewhat different line, to the following effect (Art. 36): — A contract made by correspondence is complete only if the ac- ceptance is received by the proposer within the time prescribed by him (if any), or otherwise a reasonable time. But the proposer may ratify an- overdue acceptance by forthwith giving notice to the proposer. Where the proposal is such that acceptance involves immediate action, and a previous acceptance in terms is not required by the -j^- terms of the proposal or by the usage of business, the con- tract is concluded by the acceptor acting on the proposal. Both proposal and acceptance are revocable before the conclu- sion of the contract. But if the acceptor has begun to act on the proposal before receiving notice of its revocation, the proposer is liable ttf him for resulting damage. These rules'apply only to bilateral contracts. Unilateral pro- mises become binding as soon as they come to the knowledge of the promisee. Separate estate: Power of alienation. Note C. (p. 86). History of the Equitable Doctrine of Separate Estate. When the practice of settling property to the separate use of married women first became common, it seems probable that neither the persons interested nor the conveyancers had any pur- pose in their minds beyond excluding the husband's marital right so as to secure an independent income to the wife. The various forms of circumlocution employed in all but very mod- ern settlements to express what is now sufficiently expressed by the words "for her separate use, " will at once suggest themselves as confirming this. In course of time, however, it was found that by recognizing this separate use the Court of Chancery had in effect created a new kind of equitable ownership, to which it was impossible to hold that the ordinary incidents of ownership did not attach.- Powers of disposition were accordingly admitted, including alienation by way of mortgage or specific charge as well as absolutely; and we find it laid down in general terms about a century ago that a, feme covert, acting with respect to her separate property is competent to act as a feme sole (a). Never- theless the equitable ownership of real estate by means of the separate use, carrying as incidents the same full right of disposi- tion by deed or will that a feme sole would have, was fully reeog- (a) Hulmeu. Tenant, 1 Wh. & T. L. C. In Peacock v. Monk, 2 Ves. Sr. 190, there referred to by Lord Thurlow, no such gen- eral rule is expressed. As to the recognition of separate pro- perty by Courts of Common Law, see Duncan v. Cashin, L. R. 10 C. P. 554. SEPARATE ESTATE. 671 nized^only by much later decisions (s). From a mortgage or specific charge on separate property to a formal contract under seal, such as if made by a person sui tun's would even then have bound real estate in the -fa hands of his heir, Ave may suppose [ 5^. 647 1 the transition did not seem violent; and instruments expressing ' such a contract to be entered into by a married woman came to be regarded as in some way binding on any separate property she might have. In what way they were binding was not settled Power to for a good while, for reasons best stated in the words of V.-C. bind the Kindersley's judgment in Vaaghan\. Vanderslegcn(a). separate '"The Courts at first ventured so far as to hold that if" a estate by married, woman " made a contract for payment of money by a formal in- written instrument with a certain degree of formality and sol- struments: enmity, as by a bond under her hand and seal, in that case the historical property settled to her separate use should be made liable to the view given payment of it; and this principle (if principle it could be called) by V.-C. was subsequently extended to instruments of a less formal char- Kindersley. acter, as a bill of exchange or promissory note, and ultimately to any written instrument. But still the Courts refused to extend it to a verbal agreement or other assumpsit, and even as to those more formal engagements which they did hold to be payable out of the separate estate, they struggled against the notion of their being regarded as debt% and for that purpose they invented rea- s >ns to justify the application of the separate estate to their pay- ment without recognizing them as debts or letting in verbal con- tracts. One suggestion was that the act of disposing of or charg- ing separate estate by a married woman was in reality the exe- cution of a power of appointment (4), and that a formal and solemn instrument in writing would operate as an execution of , a power, which a mere assumpsit would not do. . . . Another reason suggested was that as a married woman has the right and capacity specifically to charge her separate estate, the execution by her of a formal written instrument must be held to indicate an intention to create such special charge, because otherwise it could not have any operation." Both these suggestions are on the later authorities untenable, Earlier as indeed V.-C. Kindersley then (1853) judged them to be (c); doctrines the theory of specific charge was revived in the later ease oCSltat- now un- lock v. Shattoclc (il), but this must be considered as overruled (e). tenable. One or two other suggestions— such as that a married woman should have only such power of dealing with her separate estate as might be -^ expressly given her by the instrument creating the [ ~^f 048 J separate use — were thrown out about the beginning of this cen- tury (/), during a period of reaction in which the doctrine was thought to" have gone too far, but they did not find acceptance; and the dangers which gave rise to these suggestions were and still are provided against in another way by the device of the re- (2) Taylor v. Meads, 4 D. J. S. 597; Pride v. Bubb, 7 Ch. 64. (o) 2 Drew. 1G5, 180. {b) E. g. Dnke of Bolton v. Williams, 2 Ves. at p. 149. (e) Cp. Murray v. Barlee, 3 M. & K. 209, where the arguments show the history of the doctrine, Owens v. Dickenson, 1 Cr. & Ph. 48, 53, where the notions of power and charge' are both dis- missed as inapplicable by Lord Cottenham. {(I) 2 Eq. 182, 193. (e) Robinson v. Pickering, C. A., 16 Ch. D. 660. (/) See Jones v. Harris, 9 Ves. 486, 497; Parkes 11. White, 11 Ves. 209, 220 sqq. ; and collection of case 5 Ves. 17, note. 672 APPENDIX. strainton anticipation, as curious an example as any that English law presents of an anomaly grafted on an anomaly (b). Judgment of The modern locus clasoicus on the subject is the judgment of Turner L.J. Turner, L. J., in Johnson v. Gallagher (e), which had the full ap- in Johnson v. proval of the Judicial Committee in London Chartered Bank of Gallagher. Australia v. LemprQre (d). It had already been distinctly fol- "General lowed in the Court of Appeal in Chancery as having placed the engage- doctrine upon a sound foundation (e). The general result was ments" may _ to this effect: bind separate' " Not only the bonds, bills, and promissory notes of married estate with- women, but also their general engagements, may affect their out special separate estates" (3 D. F. J. 514): and property settled to a form, but married woman's separate use for her life, with power to dispose with proved of it by deed or will, isfor this purpose her separate estate (/). or presumed These " general engagements " are subject to the forms imposed intention: by the Statute of Frauds or otherwise on the contracts made in rules as to pari materia by persons competent to contract generally, but not this. to any other form: there is no general rule that they must .be in writing. A " general engagement" is not binding on the separate es- tate unless it appear " that the engagement was made with ref- erence to and upon the faith or credit of that estate " (3D. F.J. 515). Whether it was so made is a question of fact to be determined on all the circumstances of the case: it is enough " to show that the married woman intended to contract so as to make herself — that is to say, her separate property — the debtor" (L. E. 4 P. C. 597). Such intention is presumed in the case of debts contracted by a married woman living apart from her husband [3 D. F. J. 521). (This tallies with the rule of common law, which in this case ex- cludes even as to necessaries the ordinary presumption of author- ity to pledge the husband's credit: see notes to Manby v. Scott in 2Sm. L. C.) j" JL 6491 'A' The like intention is inferred where the transaction would he otherwise unmeaning, as where a married woman gives a, guar- anty for her husband's debt (g) or joins him in making a promis- sory note (h). The "engagement" of a married woman differs from a con- tract, inasmuch as it gives rise to no personal remedy against the married woman, but only to a remedy against her separate prop- erty (j). But it creates no specific charge, and therefore the remedy may be lost by her alienation of such property before suit (3 D. F. J. 515, 519, 520-2) (k). (ft) See Lord Cottenham's judgment in Tulett v. Armstrong,- 4 M. & Cr. 393, 405. (e) 3 D. F. J. 494, 509 sqq. Id) L. R. 4 P. C. 572. (e) Picard v. Hine, 5 Ch. 274. ( f) Mayd n. Field. 3 Ch. D. 587, 593. (g) Morrell v. Cowan, 6 Ch. D. 166 (reversed 7 Ch. D. 151, but only on the construction of the document), where no attempt was made to dispute that the guaranty, though not expressly re- ferring to the -separate estate, was effectual to bind it. (/») Davies ». Jenkins, 6 Ch. D. 728. »(i) Hence, before the Act of 1882, the married woman, not being a real debtor, was not subject to the bankruptcy law in re- spect of her separate estate: Ex parte Jones, 12 Ch. D. 484. (k) Ace. Eobinson v. Pickering, C. A. 16 Ch. D. 660, which SEPARATE ESTATE. 678 In cases where specific performance would be granted as be tween parties sui iuris, a married woman may enforce specific performance of a contract made with her where the consideration on her part was an engagement binding on her separate estate according to the above rules; and the other party may in like manner enforce specific performance against her separate estate (e). The language of the Judicial Committee we have cited as to The se pa- the married woman's intention of making herself — that is, her ra ^ e estate a separate property — the debtor, suggests that the separate estate quasi may be regarded as a sort of artificial person created by Courts artificial of Equity, and represented by the beneficial owner as an agent person, with full powers, somewhat in the same way as a corporation sole is represented by the person constituting it forthetime being. As a contract made by the agent of a corporation in his em- ployment can bind nothing but the corporate property (/), the engagement of a married woman can bind nothing but her separate estate. This way of looking at it is no doubt artificial, but may possibly be found to assist in the .right comprehension of the doctrine. Some instances of ordinary contracts which may be incidental Applica- to the management and enjoyment of separate estate, so that it tions. would y^-be highly inconvenient if the separate estate were not r ,a, gKQ"! bound by them, are given in the judgment of the Judicial Com- L »T J mittee above referred to (L. E. 4 P. C. at p. 594). A married woman's engagement relating to her separate prop- erty will have the same effect as the true contract of an owner sui iuris in creating an obligation which will be binding on the property in the hands of an assignee with notice (g). If a married woman becomes sui iuris by the death of the hus- Effect of band, judicial separation or otherwise, what becomes of the debts cessation of of her separate estate? It appears that they do not become legal coverture, debts for this would be to create a new right and liability quite different from those originally created by the parties; but that the creditor's right is to follow in the hands of the owner or her representatives the separate estate held by her at the time of contracting the enagement, and still held by her when she be- came sui iuris, but not any other property. Property subject to a restraint on anticipation cannot in any case be bound (7(). A kindred and still open question is this: Can the separate estate Liability of of a woman married before January 1, 1883, be held liable for separate her debts contracted before marriage? Apart from recent legis- estate for lation it seems no less difficult to hold that the overture and the debts before existence of separate property enable the creditor to substitute marriage. for a legal right a wholly 'different equitable right, than to hold decided that a creditor of a married woman on the faith of her separate estate is not thereby entitled to a charge on her separate property, or to an injunction to restrain her from dealing with it. (e) The cases cited in Sug. V. & P. 206, so far as inconsistent with the modern authorities (see Picard r. Hine, 5 Ch. 274, where the form of decree against the separate estate is given, Pride v. Bubb, 7 Ch. 64), must be considered as overruled. (/) Unless, of course, he contracts in such a way as to make it also his own personal contract. (g) Per Jessel, M. R., Warne r. Routledge, 18 Eq. 500. (h) Pikeu. Fitzgibbon, C. A. 17 Ch. D. 454. Earlier cases are . indecisive. For the view taken in the Court below in Johnson v. Gallagher, where the bill was filed after the death of the husband, see 3 D. F. J. 495, and the decree appealed from at p. 497. 43 PBINCIPLES OF CONTRACT. 674 APPENDIX. [*651] How far is a married woman's "engage- ment" bound by the ordinary forms of contract. McHenry v. Da vies: qussrc. that the cessation of the coverture turns that sort of equitable right into a legal debt. It has been held that after the husband's bankruptcy the wife's separate estate is liable in equity to pay her debts contracted before the marriage (y); but Malins, V.-C, seems to have decided this case partly on the ground that the bankruptcy was evidence that the settlement of the property to the wife's separate use was fraudulent as against her creditors. Before the Debtors Act, 18G9, when a married woman and her husband were sued at law on a debt contracted by her before the marriage and either the husband and wife or the wife alone had been taken in execution, the wife was entitled to be discharged only if she had not separate property out of which the debt could be paid (z) ; and an order for payment can now be made under s. 5 of the Debtors Act on a married woman, and the existence -^■of sufficient separate estate would justify commitment in de- fault (a). But the practice of the Courts in the exercise of this kind of judicial discretion does not throw much light on the ques- tion of a direct remedy. On principle it should seem that a married woman's engage- ment with respect to her separate estate, while not bound by any peculiar forms, is on the other hand bound in every case by the ordinary forms of contract ; in other words, that no instrument or transaction can take effect as an engagement binding separate estate which could not take effect as a contract if the party were sui iuris. That is to say, the creditor must first produce evidence appropriate to the nature of the transaction which would establish a legal debt against a party sui iuris, and then he must show, by proof or presumption as explained above, an intention to make the separate estate thedebtor. There is, however, a decision the other way. In McHenry v. Darifs (b), a married woman, or rather her separate estate, was sued inequity on a bill of exchange indorsed by her in Paris. It was contended for the defence, among other things, that the bill was a French bill and informal according to French law. Lord Eomilly held that this was immaterial, for all the Court had to be satisfied of was the general intention to make the separate estate liable, of which there was no doubt. This reasoning i.3 quite intelligible on tha assumption that engagements bind separate estate only asspecifie charges ; the fact that the instrument creating the charge simulated more or less successfully a bill of exchange would then be a mere accident (e). The judgment bears obvious marks of this theory; we have seen indeed that it was expressly adopted by the same judge in an earlier case (/I), and we have also seen (;/) Chubb v. Stretch, 9 Eq. 555, following Biscoo v. Kennedy, briefly reported in marginal note to Hulme r. Tenant, 1 Bro. C. C. 17. The decision of the C. A. in Pike v. Fitzgibbon throws great doubt on this. (a) Ivens v. Butler, 7 E. & B. 159, 28 L. J. Q. B. 145; Jay v. Amphlett, 1H.&C. 637, 32 L. J. Ex. 17G. («) Dillon v. Cunningham, L. It. 8 Ex. 23. Here the married ■woman had been sued alone, and there was no plea of coverture: but probably the same course would be taken in the case of a judgment against husband and wife for the wife's debt dum sola. (b) 10 Eq. 83. (e) Note, however, that in the case of parties sui iuris n bill of •exchange cannot be treated as an equitable assignment: Shand v. Du Buisson, 18 Eq. 233. Nor a cheque: Hopkinson v. Foster 19 Eq. 74. (d) Shattock v, Shattock, 2 Eq. 182; supra, p. 647. SEPARATE ESTATE. 675 that it is no longer tenable. Take away this assumption (as it must now be taken away) and the reasoning proves far too much : it would show that the indorser sui iuris of a bad bill of exchange ought to be bound notwithstanding the law merchant, because he has expressed his intention to be bound. The true doctrine being that the '' engagemeut" differs froma contract not in the nature of the transaction itself, but in making only the separate estate the debtor, it follows that in all that relates to the ■& transaction I" ], a positive duty of maintaining and working its line, and it must not enter into any agreement that amounts to a delegation or abandonment of this duty (a) ■ in Be- man v. Rufford, however, the strong expression occurs that, " on the principle that has been so often laid down, this court will not tolerate that parties having the enormcus powers which railway companies obtain [)*] should apply one farthing of their funds in a way which differs in the slightest degree from that in which the legislature has provided that they shall be applied " (p. 565). The remarks of the Lord Justice Turner in the later case of Shrewsbury & Birmingham Ry. Co. v. L. <£- N. \V. Ry. Co., 4 D. M. G. 115, 132, are lessstrong; in Simpson v. Westminster Palace Hotel Co., 2D. F. J. 141, a dissenting shareholders' suit, he seems to confine himself to the power of a meeting to bind the minority on partnership principals [/3]. We have dwelt so far on these decisions in this place (though one or two of them do not even in their language really postulate the docti-ine of limited special capacities) because they had much weight in East Anglian Railways Co. v. E. C. Railway Co., 11 C. B. 775, 21 L. J. C. P. 23, which for some time was treated as a lead- ing case, and was the chief obstacle to the restoration of the com- mon law doctrine of "general capacity." Lord Kramwell has expressed a distinct opinion that it was wrongly decided: 11 Ch. D., at p. 501: -^-it is here cited, however, for its importance in the history of the subject. It was in effect the case of an agree- ment by one railway company to promote the undertaking of (a) As a lease of the undertaking, or grant of exclusive running powers and control of the line to another company. LIMITS OF CORPORATE POWERS. 679 another. The Court said: " It is clear that the Defendants have a limited authority only, and are a corporation only for the pur- pose of making and maintaining the railway sanctioned by the Act, and that their funds can only be applied for the purposes directed and provided for by the statute." (Nor does it matter that au application of funds not authorized by the Act is expected to be for the profit of the line.) " They are a corporation only for the purpose of making and maintaining the Eastern Counties Railway. Every proprietor when he takes shares has a right to expect that the conditions upon which the Act was obtained will be performed . . . the public also has an interest in the proper administration of the powers conferred by the Act [>■]. . If the company is a corporation only for a limited purpose, and a contract like that under discussion is not within their authority, the assent of all the shareholders to such a contract [,#], though it may make them all personally liable to perform their contract, would not bind them in their corporate capacity or render liable their corporate funds." This was followed by Macgregor v. Dover and Deal Railway Co. (in Ex. Cb.), 18 Q. B. 618, 22 L. J. Q. B. 69. The plaintiff in error, the chairman of the South Eastern Railway Co., had undertaken that his company should guarantee certain parliamentary expenses of the Dover and Deal Company. Held, on the authority of the last case, that the agreement was void as an attempt to bind the S. E. Company to do an act which to the knowledge of both parties would be illegal; " not merely an act which they have no power to do, but an act contrary to public policy and the provisions of a public Act of Parliament" [y]. In Hart v. Eastern Union By. Co., 7 Ex. 246, 21 L. J. Ex. 97, in Ex. Ch. 8 Ex. 116, 22 L. J. Ex. 20, it was even contended,. but without success, that when a "company was empowered by its Act to borrow money on debentures, there was no right of action on such debentures because the Act had no words expressly giving, it, and provided another special remedy in certain events. Cp. Slark v. Highgate Archway Co., 5 Taunt. 792. But this doctrine did not long pass unquestioned. The theory j> eac +: on j n of general capacity was upheld in S. Yorkshire By. & Biver Dun a„,, t u v^t Co.'y. G. N. By. Co., 9 Ex. 55, 22 L. J. Ex. 305. The action was ""T ^° rK " on an agreement that the defendant company should have the ~ ' p '„ use of the plaintiff company's line for carrying coal for 21 years, -p '„' j' u( j' paying tolls on a scheme framed to secure to the" plaintiff com- ' . ' ,. g " pany a dividend -^-varying with the quantity of coal carried. The p . B defendant company pleaded that the agreement was unauthorized p' . t-cjo'-] and void. The arguments turned a good deal on the question L"W DD "J whether these payments were such "tolls" as contemplated by the Railways Clauses Consolidation Act, and on that ground the decision in favour of the agreement was affirmed in the Exche- quer Chamber (9 Ex. 642), nothing being said on the general doctrine. In the Court below, Parke, B., afterwards Lord Wens- leydale, expressed his opiuion that as a corporation the defen- dants had power to do all things connected with the manage- ment of the concern unless prohibited by the Act of Parliament (9 Ex. 67) and that the contract was prima facie binding, and must be enforced if it could not be made out that it was forbid- den by the Act (9 Ex. 88, 22 L. J. Ex. 315). The classical pas- sage of his judgment, as it may now fairly he called, is as fol- lows: "Generally speaking, all corporations are bound by a covenant under their corporate seal properly affixed, which isalegal mode 680 APPENDIX. of expressing the will of the entire body, and are boundas much as an individual is by his deed. Contracts with partnerships stand upon a different footing. They relate to the power of one member of a partnership to bind another, and constitute a branch of the law of principal and agent. In partnerships, where all the members do not concur in a contract (as often they do not) one partner may bind the other in all contracts within the scope of their ordinory partnership dealings. In those beyond, the individual partners making the contract are bound, not the other partners. But corporations, which are creations of law, are, when the seal is properly affixed, bound just as individuals are by their own contracts, and as much as all the members of a partnership would be by a contract in which all concurred. But where a corporation is created by an Act of Parliament for par- . ticular purposes with special powers, then indeed another ques- tion arises. Their deed, though under their corporate seal, and that regularly affixed, does not bind them if it appears by the express provisions of the statute creating the corporation, or by necessary or reasonable inference from its enactments, that this deed was ultra vires — that is, that the legislature meant that such a deed should not be made. ' ' His view adopted in subsequent cases. [*659] This is adopted by Blackburn, J. in his judgment in Taylor v. Chichester & MidhursU Railway Co., L. R. 2 Ex. 356, 383. In the Exchequer Chamber Blackburn and Willes, JJ. were a dis- senting minority: the decision of the majority was reversed in the House of Lords, L. R. 4 H. L. 628. but on the ground that the agreement then in question was clearly within the company's ordinary and -fc proper businessj so that no shareholder could have objected to the directors entering into it, and thus the more general question was left at large. The judgments of the dis- senting j udges below remain entitled to considerable weight: and at ail events, in the words of Blackburn, J., "Lord Wensley- dale's mode of stating the proposition has been adopted as ex- pressing the true doctrine, by the Court of Queen's Bench in Chambers v. Manchester & Mil ford Railway Co., 5 B. & S. 588; 33 L. J. Q. B. 268; by the Court of Common Pleas in South Wales Railway Co., v. Redmond, 10 C. B. N. S. 675 [see per Erie, C. J. at p. 682] ; by the Court of Exchequer in Bateman v. Mayor, &c. , of Ashton-under-Lyne, 3H.&N. 323; 27 L. J. Ex. 458 [where, however, one member of the court could not get over the East Anglian Railways case, though personally not approving it] ; by Lord Crauworth, C. in delivering the judgment in the House of Lords in Shrewsberry & Birmingham Railway Co. v. N. W. Railway Co., 6 H. L. C. 113." Lord Cranworth's femarks must be specially cited. Statements " Prima facie corporate bodies are bound by.all contracts under of the law to their common seal. When the Legislature constitutes a corpor- same effect ation it gives to that body prima facie an absolute right of con- in House of tracting. But this prima facie right does not exist in any case Lords. where the contract is one which, from the nature and object of the incorporation, the corporate body is expressly or impliedly prohibited from making : such a contract is said to be ultra vires (a). And the question here, as in similar cases, is whether (a) This term, if restricted to the definition here given of it, is harmless and possibly convenient ; but it has become so ambig- uous by less accurate usage that we have preferred to avoid it. LIMITS OF CORPORATE POWERS. 681 there is anything on the face of the act of incorporation which expressly or impliedly forbids the making of the contract sought to be enforced " (6 H. L. C. at p. 135). The actual ground of decision was that in this case, whether the contract was valid or not, the time had not arrived at which it was to take effect. Moreover Lord Wensleydale was enabled to repeat his opinion even more distinctly in the House of Lords : Scottish N. E. Rail- way Co. v. Stewart, 3 Macq. 382, 415 (and see per Willes, J., L. R. 2 Ex. 390-1). " There can be no doubt that a corporation is fully capable of binding itself by any contract under its common seal in England and without it in Scotland, except when the statutes by which it is created or regulated expressly or by necessary implication piohibit -^ such contract between the parties. Prima facie all its [ -JW- 6601 contracts are valid, and it lies on those who impeach any contract to make out that it is avoided." Lord St. Leonards took the same view in E. C. Ry. Co. v. Hawkes in the Court of Chancery (see 1 T>. M. G. 737, 752, 759- 60), and still more clearly in the House of Lords (5 H. L. C. 331). " The appellants as a corporation have all the powers incident to a corporation except so far as they are restrained by their act of incorporation. Directors cannot act in opposition to the pur- pose for which their company was incorporated [>■], but short of that they may bind the body just as [the proper officers, &e. of] corporations ill general may do" (p. 373). Again, "the safety of men in their daily contracts requires that this doctrine of ultra vires should be confined within narrow bounds" (p. 371). He further stated the effect of this and other shortly preceding de- cisions of the House of Lords (which however do not much illus- trate our particular subject), as being to " place the powers and liabilities of directors and their companies in making contracts and in dealing with third parties upon a safe and rational foot- ing. They do not authorize directors to bind their companies by contracts foreign to the purposes for which they were established, but they do hold companies bound by contracts d uly entered into by their directors for purposes which they have treated as within the objects of their Acts, and which cannot clearly be shown not to fall within them" (p. 381, and see L. E. 9 Ex. 389). This case is the more important inasmuch as it was one of specific per- formance of a contract to purchase land and pay a sum of money as compensation and damages, and the contract was enforced, notwithstanding that in the result the land was not wanted by the company. The doctrine was also discussed by Erie, J. in Mayor of Nor- Opinion of wicli v. Norfolk Ry. Co., 4 E. & B. 397, 24 L. J. Q. B. 105 (a case Er i e j" where there was an extraordinary division of opinion in the Court on the questions actually before them, and especially whether the particular contract was or was not unlawful in itself : see p. 235 above). He thought the true view to be that corporations were prohibited by implication only from using their parliamentary powers in order to defeat the purposes of incorporation, and crit- icised the judgment in the East Anglian case as too wide (4 E. & B. 415, 24 L. J. Q. B. 112) : and he carefully pointed out the danger of overlooking the difference between a dissenting share- holder's suit in equity and an action by astranger against the corp- orate body (4 E. &B.419, 24 L. J. Q. B. 113). Thesamelearnedjudge furthersaid in Bostock v. N. Staffordshire Ry. Co., 4 E. &B. 798, 819, 24 682 APPENDIX. [*661] Later cases in equity. Eiche v. Ashbury, &c. Co. in Ex. Ch. [•662] L. J. Q. B. 225, 231 (this however was not a case of contract), citing the Sutton's if Hospital case, " By common law the creation of a corporation conferred on it all the rights and liabilities in respect of property, contracts, and litigation, which existence confers on a natural subject, modified only by the formalities required for expressing the will of a numerous body. . . Those of its rights and liabilities which are unaffected by statute exist as at com- mon law." Turning to the later cases in courts of equity, we find marked signs of an abandonment of their earlier view, and adhesion to the doctrine of general capacity. In considering the power of building societies (which were statutory quasi-corporations; see now the Act of 1874, 37 & 38 Viet. c. 421, to borrow money, the question has been treated on all hands as being not whether the borrowing of money was expressly or necessarily permitted by the statute, but whether it was forbidden or clenrly repugnant to the constitution and objects of the society: Laing v. Reed, 5 Ch. 4; Ex parte Williamson, ib. 309 (notwithstanding the wording of the head-note in the latter case, see p. 312). And in Ex parte Birmingham Banking Co., 6 Ch. 83, the Court of Appeal held without hesitation that an incorporated company can prima facie mortgage any part of its property, and this as well for an existing debt as for a new loan. The articles of asso- ciation authorized borrowingon mortgage, but the Lords Justices did not stop to discuss whether this would or would not include a mortgage to secure pre-existing debts («), resting this part of their decision on the general power of a body corporate to '" hold property and dispose of it as freely as an individual, unless it is specially prohibited from so doing" (James, L. J. at p. 87). One may also refer to the view taken by Turner, L. J. that the affirmative provisions of the Companies Clauses Act do not ex- clude other modes of contracting: Wilson v. West Hartlepool By. Co. , 2 1>. J. S. 475, 496. In Bath's ca. , 8 Ch. D. 334, the C. A. was unanimously of opinion that a corporation or quasi-corporate as- sociation has as an incident to its existence the same power of compromising claims against it that a natural person has. Lastly, we have the doctrine of general capacity deliberately adopted by the whole Court of Exchequer Chamber in Biche v. Ashhury By. Carriage Co., L. E. 9 Ex. 254. sqq. The division of the Court was confined to the questions (i) whether a company formed under the Companies Act. 1862, is forbidden to undertake business substantially beyond itsobjects as defined in the memo- ir randum of association and (ii) whether, apart from this, an as- sent of all the shareholders could in this case be inferred in fact. The decision of the House of Lords (L. E. 7 H. L. 653) disposes of these questions without touching the general doctrine. For later unsuccessful attempts to extend the so-called doctrine oCultra vires, see A.-G. v. G. E. By. Co., 5 App. Ca. 473: L. & N. W. By. Co. v. Price, 11 Q. B. D. 485. A corporation, if it lawfully carries on its business in a foreign country, is treated by the Courts of that country "as a creature of the law of its own country, and subject to all the legislative control and direction that may be properly exercised over it at the place of its creation:" and persons dealing with it are bound by whatever is duly done under the laws of that place in respect of its powers and obligations: Canada Southern By. Co. v. Gebhard, 109 U. S. (2 Davis) at p. 537. (a) As to which see Inns of Court Hotel Co., G Eq. 82. LIMITS OF CORPORATE POWERS. 683 Application of doctrines of partnership and agency. A case in which this view appears most clearly, and indeed Application exclusively, is Simpson v. Denison, 10 Ha. 51. The suit was in- of partner- stituted by dissentient shareholders to restrain the carryingout s j,;p ] aw . " of an agreement between their company (the Great Northern) and Simpson '» another railway company, by which the Great Northern was to Denison take over the whole of that company's traffic, and also to re- strain the application of the funds of the Great Northern Com- pany for obtaining an Act of Parliament to ratify such agree- ment. The V.-C. Turner treated it as a pure question of part- nership: " How would this case have stood " he says in the first paragraph of the judgment " if it had been the case of an ordi- nary limited partnership? " The Eailways Clauses Consolida- tion Act became in this view a statutory form of partnership arti- cles, to which every shareholder must be taken to have assented: and the general ground of the decision was that " no majority can authorize an application of partnership funds to a purpose not wan-anted by the partnership contract." For the purpose of the case before the Court this analogy was perfectly legitimate; and the dissent expressed by Parke, B. (in South Yorkshire, <£-c. Co. v. G. N. H. Co., 9 Ex. 88, 22 L. J. Ex. 315), must be considered only as a warning against an unqualified extension of it to ques- tions between the corporate body and strangers. The rule comes „, , , out, ifnossible, even more clearly in Pickering v. Stephenson, 14 ' „,, Eq. 322, 340, where it is thus set' forth by Wickens, V.-C. "The 0I . e . . . principle of jurisprudence which I am asked here to apply is R. , ? 2 that the governing body of a corporation that is in fact a trading „ . , p ' partnership cannot in general use the funds of the community for e P enstm - Jf- any purpose other than those for which they are contributed. [ "j^DDoJ By the governing body I do not ot course mean exclusively either directors or a general council (a), but the ultimate authority with- in the society itself, which would ordinarily be a majority at a general meeting. According to the principle in question the special powers given either to the directors or to a majority by the statutes or other constituent documents of the association, however absolute in terms, are always to be construed as subject to a paramount and inherent restriction that they are to be exer- cised in subjection to the special purposes of the original bond of association." It is to be observed that this passage contains no indication of opinion on the extent to which a corporation may be bound by the unanimous assent of its members. Any dissenting shareholder may call for the assistance of the Rights of Court to restrain unconstitutional acts of the governing body, dissenting but he must do so in his proper capacity and interest as a share- s i iare . holder and partner. If the Court can see that in fact he repre- holders, sents some other interest, and has no real interest of his own in the action, it will not listen to him; as when the proceedings are taken by the direction of a rival company in whose hands the nominal plaintiff is a mere puppet, and which indemnifies him against costs: Forrest v. Manchester, &e. By. Co., 4 D. F. J. 126: so where the suit was in fact instituted by the plaintiff's solicitor on grounds of personal hostility, Sobson v. Dobbs, 8 Eq. 301. But if he has any real interest and is proceeding at his own risk, he is not disqualified from suing by the fact that he (a) Referring to the peculiar constitution of the company then n question. 684 APPENDIX. has collateral motives, or is acting on the suggestion of strangers or enemies to the company, or even has acquired his interest for the purpose of instituting the suit: Colman v. E. C. By. Co., su- pra; Seatonv. Grant, 2 Ch. 459; Bloxam v. Metrop. By. Co., 3 Ch. Parties to 337. For full collection of cases, see Lindley, 2. 1001. As a rule action. the plaintiff in actions of this kind sues on behalf of himself and all other shareholders whose interests are identical with his own; but there seems to be no reason why he should not sue alone in those cases where the act complained of cannot be rati- fied at all, or can be ratified only by the unanimous assent of the shareholders: Boole x. G. W. By. Co., 3 Ch. 262. There is another class of cases in which abuse of corporate powers or authorities is complained of, but the particular act is within the competence of, and may be affirmed or disaffirmed by, "the ultimate authority T JLgg4] within the society itself" (in the words of Wickens, ■+; V.-C. just now cited), and therefore the corporation itself is prima fade the proper plaintiff. See Lindley, 2. 895 sqq. Gray v. Lewis, 8 Ch. 1035, 1051; MaeDougall v. Gardiner, 10 Ch. 606, 1 Ch. D. 13, 21; Bussellv. Wakefield Waterworks Co., 20 Eq. 474. J'The ma- jority are the only persons who can complain that a thing which they are entitled to do has been done irregularly" (a). The ex- ception is when a majority have got the government of the cor- poration into their own hands, and are using the corporate name and powers to make a profit for themselves at the expense of the minority ; then an action is rightly brought by a shareholder on behalf of himself and others, making the company a defendant: Menier v. Hooper's Telegraph Works, 9 Ch. 350; Mason v. Harris (C. A.), 11 Ch. D. 97. We mention these cases only to distin- guish them from those with which we are now concerned. Limited With regard to the doctrine of limited agency, and to itspecu- agencv of ^ ar importance in the case of companies constituted by public directors &c. documents, all persons dealing with them being considered to know the contents of those documents and the limits set to the agent's authority by them, it may be useful to give Lord Hath- erley's concise statement of the law (when V.-C.) in Fountaine v. Carmarthen By. Co., 5 Eq. 316, 322. "In the case of a registered joint-stock company, all the world of course have notice of the general Act of Parliament and of the special deed which has been registered pursuant to the pro- visions of the Act, and if there be anything to be done which can only be done by the directors under certain limited powers, the person who deals with the directors must see that those limited powers are not being exceeded. If, on the other hand, as in the case of Boyal British Bank v. Turquand (b), the directors have power and authority to bind the company, but certain pre- liminaries are required to be gone through on the part of the com- pany before that power can be duly exercised, then the person contracting with the directors is not bound to see that all these preliminaries have been observed. He is entitled to presume that the directors are acting lawfully in what they do. That is the result of Lord Campbell's judgment in Boyal British Bank v. Turquand." For fuller exposition see Lindley, 1. 253. 334. (a) Mellish, L. J., 1 Ch. D. at p. 25. As to a shareholder's right to use the company's name as plaintiff, see Pender v. Lush- ington, 6 Ch. D. 70; Duckett v. Gover. ib., 82; Silber Light Co. v. Silber, 12 Ch. D. 717; Harben v. Phillips, 23 Ch. D. 14, 29, 38. (6) 5 E. & B. 248, 6 ibid. 327, 24 L. J. Q. B. 327, 25 ibid. 327. LIMITS OF CORPORATE POWERS. 685 ■fcThe contrast of the Wo classes of cases is well shown in Royal \ -A- 665 1 British Bank v. Turquand (supra) and Balfour v. Ernest, 5 C. B. N. Royal S. 601, 28 L. J. C. P. 170. In the former case there was power for British Bank the directors to borrow money if authorized by resolution: and v Turquand it was held that a creditor taking a bond from the directors un- &,,_ ' der the company's seal was not bound to inquire whether there had been a resolution. Jervis, C. J. said in the Exchequer Chamber (the rest of the Court concurring) : — "We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here on reading the deed of settlement would find not a prohibition from borrowing, but a permission to do so on certain conditions." The same principle has been followed in many later cases (Ex parte Eagle Insurance Co., 4 K. & J. 549, 27 L. J. Ch. 829; Camp- bell's ea. &c., 9 Ch..l, 24; Totterdell v. Fareham Brick Co., L. R. 1 C. P. 674; Be Ctunly Life Assce. Co., 5 Ch. 288, a very strong case, for the persons who issued the policy were assuming to carry on business as directors of the company without any au- thority at all; Romford Canal Co., 24 Ch. D. 85,] and it was de- cisively affirmed by the House of Lords in Ilahony v. East Holy- ford Mining Co., L. E. 7 H. L. 869. In that case a bank had honored cheques drawn by persons acting as directors of the company, but who had never been properly appointed; and these payments were held to be good as against the liquidator, the dealings having been on the face of them regular, and with de facto officers of the company. Shareholders who allow persons to assume office and conduct the company's business are, as against innocent third persons, no less bound by the acts of these de facto officers than if they had been duly appointed. It is for the shareholders to see that unauthorized persons do not usurp office, and that the business is properly done (a). In Balfour v. Ernest the action was on a bill given by direc- tors of an insurance company for a claim under a policy of another company, the two companies having arranged an amal- gamation; this attempted amalgamation, however, had been ju- dicially determined to be void: Ernest v. Nicholls, 6 H. L. C. 401, revg. S. C. nom. Port of London Co.'s case, 5 D. M. G-. 465. The directors had power by the deed of settlement to borrow money for the objects and business of the company and to pay claims aaa-\ •on policies granted -fcby the company, and they had a power to f -jf 666] make and accept bills, &c. which was not restricted in terms as to the objects for which it might be exercised. It was held that, taking this with the other provisions of the deed, they could bind the company by bills of exchange only for its ordinary purposes, and not in pursuance of a void scheme of amalgama- tion, that the plaintiffs must be taken to have known of their want of authority, which might have been ascertained from the deed, and that they therefore could not recover. "This bill is drawn by procuration," said Willes J., "and unless there was authority to draw it the company are not liable (b) . . . this is the bare case of one taking a bill from Company A- in respect of a debt due from Company B., there being nothing in the deed (a) Opinion of judges, at p. 880; per Lord Hatherley, at pp. 897-3 (6) 'in form it was a hill drawn by two directors on the com- pany's cashier, and sealed with the company's seal. APPENDIX. [*667] Ratification of irregular transactions by assent of all the share- holders. Spaekman v. Evans, &c. considered. (which must be taken to have been known to the plaintiffs) to confer upon the director authority to make it." The connection with ordinary partnership law is brought out in the introductory part of Lord Wensleydale's remarks in Erncstv. Nkholls (6 H. L. C. 401, 417):— "The law in ordinary partnerships, so far as relates to the powers of one partner to bind the others, is a branch of the law of principal and agent. Each member of a complete partnership is liable for himself, and as agent for the rest binds them, upon all contracts made in the course of the ordinary scope of the partnership business Any restriction upon the au- thority of each partner, imposed by mutual agreement among themselves, could not affect third persons, unless such persons had notice of them ; then they could take nothing by contract [sc. as against the firm] which those restrictions forbade. [The law in this form, t. c, the presumption of every partner being the agent of the firm, being obviously inapplicable to joint-stock companies), the legislature then devised the plan of incorporat- ing these companies in a manner unknown to the common law, ■with special powers of management and liabilities, providing at the same time that all the world should have notice who were the persons authorized to bind all the shareholders by requiring the co-partnership deed to bo registered . . and made ac- cessible to all." The continuation of the passage, however, goes too far; in fact, it disregards the distinction established by Royal British Bank v. Turquand, and the Courts have distinctly declined to adopt it {Agar v. Athenxum Life Assce. Soc., 3 C. B. N. S. 725, 27 L. J. C. P. 95; Prince of Wales Assce. Co. v. Harding, E. B. & -fr E. 183. 27 L. J. Q. B. 297). The last one of this class is C/iaj)leo v. Brunswick Building Society, 6 Q. B. D. 696. We now pass on to the cases which show how far transactions in the conduct of a company's affairs which in their inception were invalid as against any dissenting shareholder may never- theless be made binding on the partnership and decisive of its . collective rights (at all events as between the company and its own past or present members) by the subsequent assent of all the shareholders, though such assent be informal and shown only by acquiescence. The leading examples on this head are given by the well-known cases in the House of Lords which arose in the winding-up of the Agriculturists' Cattle Insurance. Company. They have been relied on as authorities for the proposition that the unanimous assent of shareholders may bind a company in its corporate capacity to anything; but since the decision of the House of Lords in Ashbury^ Ry. Carriage <£■ Iron Co. v. Riche, L. E. 7 H. L. 653, this view is untenable. "In no one of those cases," observed Lord Cairns, "was there any question as to whether the power of the whole company had been exceeded" (L. H. 7 H. L. 674). The whole matter was one of the internal constitution and affairs of the company, and there was no occa- sion to consider to what extent or in what transactions the assent of shareholders was capable of binding the company as against strangers. Moreover, the irregular act which was ratified was unauthorized as to the manner and form of it, but belonged to an authorized class, as pointed out by Lord Romilly (L. E. 3 H. L. 244-5) (a). The general nature of the facts was thus: At a meeting of the company an arrangement was agreed to, after- («) See also the judgment of Archibald, J., in Riche v. Ash- bury Ry. Carriage Co., L. E. 9 Ex. 289. LIMITS OF CORPORATE POWERS. 687 wards called the Chippenham arrangement, hy which share- holders who elected to do so within a certain time might retire from the company on specified terms by a nominal forfeiture of their shares. The deed of -settlement contained provisions for forfeiture of shares, but not sueli as to warrant this arrangement It was held — In Emm v. Sinallcombe, L. R. 3 H. L. 249, that the Chippenham arrangement could be supported (as having become part of the internal regulations of the company) only by the assent of all the shareholders, but that in fact there was knowledge and acquies- cence- sufficiently proving such assent. A shareholder who had retired on the terms o'f the Chippenham arrangement was there- fore not liable to be put on the list of contributories (Cp Brotherhood's *ca., 4 D. F. J. 566, an earlier and similar deci- [ ■*■ 6681 sion in the same winding-up. In Spademan v. Emm, ib.. 171, that a later and distinct com- promise made with a smaller number of dissentient shareholders had not in fact been communicated to all the shareholders as dis- tinct from the Chippenham arrangement, and could not be deemed to have been ratified hy that acquiescence which ratified the Chippenham arrangement; and that a shareholder who had re- tired under this later compromise was therefore rightly made a contributory. In Houldsworth v. Evans, ib., 263, that time was of the essence of the Chippenham arrangement, so that when a shareholder was allowed to retire on the terms of the Chippenham arrangement after the date fixed for members to make their election, this, in fact amounted to a distinct and special compromise, which ought to have been .specially communicated to all the shareholders: this case therefore followed Spaekman v. Evans (a). Cp. Stewart's ca., 1 Ch. 511. The question of the shareholders' knowledge or assent in each case involved delicate and difficult inferences of fact, and on these the opinions of the Lords who took part in the decisions were seriously divided. It may perhaps also he admitted that on some inferences of mixed fact and law there was a real difference; but it may safely be affirmed that on any pure question of law there was none (6). These cases appear to establish in substance the following propositions: (1). For the purpose of binding a com- pany as against, its own shareholders, irregular transactions of an authorized class may be ratified by the assent of all the indi- vidual shareholders. (2). Such assent must be proved as a fact. Acquiescence with knowledge or full means of knowledge may amount to proof of assent, and lapse of time, though not con- clusive, is material. The converse proposition that the assent of a particular shareholder will bind him to an irregular trans- action as against the company is likewise well established, but does not fall within our present scope. See Campbell's ca., &c, 9 Ch. 1. The later case of Phosphate of Lime Co. v. Green, L. R. 7 C. P. phosphate of 43, was of much the same kind though in a different form. The Lj me q action was by the company against past shareholders for a debt, (} reen and the defence rested on an accord and satisfaction which had been effected by an irregular forfeiture of the defendant's shares, and which in the -fa result was upheld on the ground of the [ -A- 6891 shareholder's acquiescence. There is nothing to throw any light (a) See also Lindley, 1. 740, 743. and L. R. 7 C. P. 51-2, and note the remark of Willes, J., p. 53. (b) See per Willes, J., L. li. 7 C. P. 60. 688 APPENDIX. Public Policy E. C. Ey. v. Hawkes. Taylor v. Chichester, &c. Co. [*670] Ashbury Ey. Carriage Co. v. fiiehe. Policy of Companies Act. on the question whether in the case of a trading company formed under the Companies Act, 1862, there is any class of acts which not even the unanimous assent of shareholders can ratify: it was not necessary to consider the existence of such a distinction, nor was it brought to the attention of the Court. Note that the diffiulty as to inferences of fact was much less than in the cases before the House of Lords, as the Court had to say, not whether there had been acquiescence, but whether there was evidence from which a jury might reasonably have found acquiescence (see pp. 61, 62) (a). Doctrine of public policy. In E. C. By. Co. v. Howies, 5 H. L. C. 331, Lord Cranworth, who as we have seen was a decided upholder of the prima facie unlimited capacity of corporations, after citing Colman v. E. C. By. Co., Salomons v. Laing, Bagshaw v. E. Union By. Co. (see above, pp. 655, 656), expressed himself as follows: — " It must be now considered as a well settled doctrine that a company incor- porated by Act of Parliament for a special purpose cannot devote any part of its funds to objects unauthorized by the terms of its incorporation, however desirable such an application may appear to be." In this case the disputed contract was held good, and the distinction was pointed out between an act which is forbid- den or illegal in itself, e. g., obstructing a navigable river by building a bridge across it, as in Mayor of Norwich v. Norfolk By. Co., 4 E. & B. 397, and an act which is merely unauthorized as between directors and shareholders. A pretty full account of this case is given in the judgment of Blackburn, J., in Taylor v. Chi- chester & Midhurst By. Co., L. E. 2 Ex. 356, 386—9; and the ef- fect of the doctrine of public policy in imposing restrictions on corporate action which are beyond and independent of the rights of individual shareholders, and which therefore their assent is powerless to remove, is explained in a subsequent passage of the same judgment, which points out that in incorporating a com- pany the legislature has two distinct purposes, the convenience of the shareholders and the benefit of the public. Every share- holder has rights against the corporation analogous to those of partners between themselves, and may object to unauthorized acts being done. These individual rights however may be waived. But if the legislature actually forbids the company to enter upon certain transactions, then no assent will make -fc such transactions binding. Whether such a prohibition exists de- pends in each case on the construction of the statute (pp. 378-9). How far the Court should be guided in the construction of such statutes by the consideration of the general policy of such legislation is a question on which there has been much differ- ence of opinion. We have already referred shortly to Ashbury By. Carriage Co. v. Biche. In this case the distinct question arose (for the first time it is believed), whether the Companies Act of 18C2 does or does not forbid a company formed under it to bind itself by con- tract to an undertaking beyond the .purposes specified in the memorandum of association. The 12th section of the Act says that a company shall not alter its memorandum of association except in certain particulars as to capital and shares (b); the Ex- (a) See further on the subject of ratification by companies, Lindley 1. 258-263. (b) Extended by the Act of 1867, ss. 9, sqq., 21, but only to other matters of the like sort APPENDIX (note e). 689 chequer Chamber was equally divided as to the effect of this. Blackburn, Brett and Grove, J.T., were of opinion that it did not amount to making companies incapable of binding themselves to anything beyond the scope of the memorandum; Archibald, Keating and Quain, JJ., held that it did. They thought it to be " the policy as well as the true construction " of the Act " to ignore (so to speak) the existence of the corporation and the power of the shareholders, even when unanimous, to contract or act in its name for any purpose substantially beyond or in ex- cess of its objects as defined by the memorandum of association " (p. 291). Admitting that a corporation has prima facie as inci- dent at Common Law the large powers laid down in the Sutton's Hospital case, 10 Co. Bep. 30 b, and citing the statement of the law by Lord Cran worth in Shrewsbury and Birmingham By. Co. v. N. W. By. Co. (given above, p. 659), the judgment of Archibald, J. (L. B. 9 Ex. pp. 292-3), proceeds to say that "the presump r tion of a prima facie general authority to contract " is rebutted by the " express provision that the scope and objects of the com- pany as originally declared by its memorandum of association shall be unchangeable." The corporation may be regarded as non-existent for the purpose of contracts beyond these objects; and if so, the individual assents of all the shareholders cannot give the ideal legal body of the corporation a capacity of which the legislature has deprived it, so as to render an agreement sub- stantially beyond the defined objects "a contract of the ideal legal body, which exists only as a corporation and with powers and capacity which are thus admittedly exceeded." This opinion was confirmed by the unanimous decision of the ■^ House of Lords, L. B. 7 H. L. 653, which proceeds not so [" JL 6711 much on any one section as on the intention of the Act appear- ing from its various provisions taken as a whole. The existence and competence of the company are limited by the memorandum of association, which is "as it were the area beyond which the action of the company cannot go " (Lord Cairns, at p. 671). This being the fundamental instrument, a provision in the articles of association which has the effect of applying the capital of the company to a purpose not within the scope of the memorandum is invalid {Guinness v. Land Corporation of Ireland. C. A. 22 Ch. D. 349). Precisely analogous questions are not likely to arise very often, but the decision lays down with sufficient clearness the lines that must henceforth be followed in the treatment of the law. As to when the Attorney-General is entitled to inter- fere, see A.-G. v. G. E. B. Co., (C. A.), 11 Ch. D. 449. Note E. (p. 166). Foreign Laws Prescribing Forms of Contract. The draft Civil Code of New York adopts the chief provisions of the Statute of Frauds in terms which to some extent embody the results of leading English decisions (ss. 794, 865, 1537). The Civil Code of Lower Canada, s. 1235, adopts in substance the 17th section as extended by Lord Tenterden's Act, The foundation of Lower Canadian Law is French, and the code is in a general way modelled on the Code Napoleon ; but this is not the only place in which English law has had a marked influence on it. ... The French Code (Art. 1341-8) requires an instrument in 44 PRINCIPLES OF CONTRACT. 690 APPENDIX. writing when the subject matter of the contract exceeds the sum or value of loOfr. This is understood (like the 17th section of our statute as distinguished from the 4th) to be a rule of the lex contractus, not of the lex fori : see the note in Sirey & Gil- bert's Codes Annotes. Also compromises must be in writing (Art. 2044). The Italian Code adds to and modifies this. The general limit of value is fixed at 500 instead of 150 lire (Art. 1341). More- over several particular kinds of contracts have to be in writing, [ JC 672 J of which if the chief are sales of immoveable property, certain contracts as to servitudes and other real rights, leases for more than nine years, grants ot annuities, and compromises (Art. 1314). Both in French and in Italian law the instrument in writing (acte sous seing prive scrittura privata) is of no avail unless signed, and that, it seems, by all parties : moreover there must be actual written signature, not a mark. (Codes Annotes on Art. 1322 sqq.; Mazzoni, Diritto Civ. Ital. Bk. 3, Pt. 2, ? 171.) The only resource of illiterate persons is apparently to call in a notary so as to give the instrument a yet higher degree of solemnity as an '' authentic act." And unilateral contracts are subject to certain additional forms. The Prussian Landrecht (Parti. Tit. 5, § 131) requires a writ- ing where the value of the subject-matter exceeds fifty thalers. From the operation of all these laws, however, commercial contracts are excepted : in France by the construction put in practice upon general words saving the commercial law (a), which are held without more to show that the substantive part of the enactment does not apply to anything governed by the Commer- cial Codes (Codes Annotes, § 3 of note, and Cattaneo & Borda, on Art. 1341 of Fr. and Ital. Codes respectively): in Italy by an express exception in the new Commercial Code (Art. 44) ; and in Prussia, by the express terms of the German Commercial Code, which it is presumed override the laws of all particular German states (ft). The last-named Code requires a solemn instrument for the formation of companies (174, 208), and a contract in writ- ing to enable a pledgee to exercise a summary power of sale (310, 311) (c). [*673] Cause in modern French law. ■^ Note F. History of Consideration. We may first note the difference between our Consideration and its nearest Continental analogies: a difference not always realized, and instructive euongh to be worth dwelling upon a little. We read in the French Code Civil, following Pothier: L'obligation sans cause, ou sur une fausse cause, ou sur une cause illicite. ne peut avoir aucun eftet" (d). Looking at this text alone, nothing would at first sight seem more natural to an English lawyer than simply to translate cause by consideration, (a) Le tout sans prejudice de ce qui est prescrit dans les lois relatives au commerce, Code Civ. 1341. (6.) Art. 317. Bei Handelsgeschaften ist die Giiltigkeit der Vertrage durch schriftliche Abfassung oder andere Formlichkei- tennicht bedingt. (c) With leave of the Court obtained ex parte, or without it, if there is an express contract to that effect. (rf) Code Civ. 1131, Pothier Obi. % 42. CONSIDERATION. 6P1 Bnt let him turn to a French commentary on the Code, and he finds no distinct and comprehensive definition of cause as a legal term of art, but a scholastic discussion of efficient, final, and im- pulsive causes (6). Going on to see -what is in fact included in the cause of the French law, we find it wider than our Considera- tion in one way and narrower in another. On the one hand the existence of a natural [)'. e. moral] obligation, or even of a real or supposed duty in point of honour only (c), may be quite enough. Nay, the deliberate intention of conferring a gratuitous benefit, where such intention exists, is a sufficient foundation for a bind- ing unilateral promise: "Dans les contrats de bienfaisance, la liberalitc que l'une des parties veut exercer envers Pautre est une cause suffisante de l'engagement qu'elle contracte envers elle." (Pothier, I.e.) (d). The meaning of sans causr seems accordingly to be confined to cases of what we should call total failure (as distinguished from mere absence) of consideration (e). On the other hand there is this limitation, that the promisee must have an interest in the subject-matter ot the promise which is apparent and capable of estimation (Pothier \\ 54, 55, 60). This doctrine seems to have arisen from a doubtful extension, if not a mis- understanding, of the technical rules which governed the Roman Stipulation. Of course a contract between A. and B. cannot as a rule give a right of action to C, but the maxim Alteri stipulari nemo potest (/) is relied on by French jurisprudence as equivalent •jf to the wider general proposition that a promise by A. to B. to [ -Jf 674] do something for C.'s benefit gives no right of action to any one. Pothier puts this case: The owner of a well opposite my friend's window promises at my request to whitewash it so as to give my friend more light: 1 cannot sue him for not doing it, though I had promised to pay him for it and should have been liable to pay for the work if done. In English phrase the rule would seem to come to this: — there can be no contract where the nature of the agreement is such that the promisee could recover only nominal damages for a breach of it. But it seems the doctrine is not much favoured, and slight circumstances are laid hold of to exclude its application, e.g. a contingent legal liability of the promisee in respect of the subject-matter. The Code (Art. 1119) expresses no more in terms than the Latin maxim, but is of course construed in the same way (g). In the Civil Code of Lower Canada, however, we find the English consideration intro- duced, professedly as a synonym of cause (ss. 984, 989) : it would seem therefore that the English jurisprudence on this point has been there introduced by English lawyers, and has in effect supplanted the French by its greater convenience and simplicity. (6) Demolombe, Cours du Code Nap. 24. 329. (c) "Desir de satisfaire aux lois de Fhonneur et de la d^licatesse. " Sirey and Gilbert, Codes Annotes, ad loc; Demolombe, op. cit. p. 335. (fZ) The same in the modern law, see extract from Eogron in Langdell's Sel. Ca, on Cont. 169. (c) Demolombe, op. cit. p. 342. (/) D. 45. 1 de v. o. 38, ? 17; I. 3. 19, ? 4. The rule could always be escaped by inserting a liquidated penal sum payable to the stipulator: a stipulation thus framed, Will you pay so much to J.S. on such a day? would be naught, but if it ran, Will you pay so much to me if you do not pay J.S.? it was good enough. It is not quite clear from Bracton's language (fo. 100 a-b) whether he meant to contradict the rule of the civil law. (#) Codes Annotes, ad loc. ; Demolombe, op cit. p. 198. 692 APPENDIX. History of the English conception. [*675] Case in 37 H. 6. For the intermediate mediseval usage see Codex LL. Normanni- carum (about A. D. 1250), ap. Ludewig, Eeliq. MSS. vii. 313. (De pactis ... ex promisso enim nemo debitor constituitur, nisi causa legitima precesserit promittendi . . . nee eciarn promissio aliquem facit debitorem nisi causa promittendi fuerit premonstrata. Thus the Roman theory whether in its classical or in its modern shape .falls short of the completeness and common sense of our own; but only one step seems wanting (a). If the Roman lawyers or the civilians in modern times had ever fairly asked themselves what were the common elements in the various sets of facts which under the name of causa made various kinds of contracts actionable, they could scarcely have failed to extract something equivalent to our Consideration. The fact that they did not take that step is much more difficult to account for than the fact, it a fact it be, that we did. The actual history of the English doctrine is obscure. The most we can affirm is that the general idea was formed some- where in the latter part of the fifteenth century; that at tho same time or a little -^- later nudum pactum lost its ancient meaning, (viz. an agreement not made by specialty so as to support an action of covenant, or falling within one of certain classes so as to support an action of debt) and came to mean what it does now; and that the word Consideration in the sense now before us came into use, at least as a settled term of art, still later. It is hardly needful to mention that in the early writers oonsiderare, consideralio always mean the judgment of a court; this usage was preserved down to our own time in the judgments of the common law courts in the form "It is considered," wantonly altered to "It is adjudged" under the Judicature Acts. The early cases of actions of assumpsit show by negative evi- dence which is almost conclusive that in the first half of the 15th century the doctrine of Consideration was quite unformed, though the phrase quid pro quo is earlier, see 10 Ed. 3. 23. But in 1459 we find a great advance in a case to which we have al- ready referred as showing that an action of debt would then lie on any consideration executed. The case was this: Debt in the Common Pleas on an agreement between the plaintiff and de- fendant that plaintiff should marry one Alice, the defendants daughter, on which marriage defendant would give plaintiff 100 marks. Averment that the marriage had taken place and the defendant refused to pay. Dan vers, J. said: "The defendant has Quid pro quo: for he was charged with the marriage of his daughter and by the espousals he is disch arged, so the plaintiff has done what was to be paid for. So if I tell a man, if he will carry twenty quarters of Wheat of my master Prisot's. to C, he shall have 40s., and thereupon he carry them, he shall have his action of debt against me for the 40s; and yet the thing is not done for me, but only by my command; so here he shows that he has performed the espousals, and so a good cause of action has accrued to him; otherwise if he had not performed them" (6). Moile, J. agreed: Prisot, C. J. and Danby, J. thought such an action not maintainable except on a specialty, and an objection was also taken to the jurisdiction on the ground of marriage be- ing a spiritual matter: the case was adjourned and the result is not stated. It is pretty clear however that Danvers at any rate (a) TJlpian once comes near to taking it: D. 19. 5 de praescr. verbis, 15; Hunter's Roman Law, 373. (J) M. 37 H. 6, 8, pi. 18. CONSIDERATION. 693 had grasped the leading and characteristic point of the modern learning of Consideration — namely, that when a thing is done at a man's request, the law does not ask whether it is for his ap- parent benefit, but takes it as against him to be of the value he has himself chosen to put upon it. The word is not here used, but the thing is expressed by Quid pro quo: so it is in another curious case of the jr same year, where a bond given for an as- [ "^ 676] signment of debts was decreed in Chancery to be cancelled, for the reason that no duty (a) was vested in the assignee by the assignment, so that he had not Quid pro quo for his bond. Whence it seems that an assignment of debts was not then recognized as creating any right which could be enforced inequity (6). In an earlier case of assumpsit for not building a mill as promised (t»), the objection was taken that it did not appear what the builder was to have for his work. But here, probably, the idea is not that there must be quid pro quo to support the promise, but that without reward there can be no relation of hiring and service to found the duty of doing the work properly. Some time later we find the principle expressed thus: If I promise J. S. a certain sum for the commons (board) of J. D. an action of debt lies for this, "car la ley intend que J. S. est un tiel per que service jeo aie advantage" (d). In the Doctor and Student (A. D. 1530) we find substantially the modern doctrine, though this last point is not particularly mentioned. The following passage shows that the notion of nudum pactum was then completely transformed : — ■ "And a nude or naked promise is where a man promiseth Doctor and another to give him certain money such a day,. or to build an Student. house, or to do him such certain service, and nothing is assigned for the money, for the building, nor for the service; these be called naked promises because there is nothing assigned why they should be made ; and I think no action lieth in those cases, though they be not performed." (Dial. 2, c. 24.) Not many lines below this passage the word Consideration is Argument's used, but in such a way as to make it probable that the writer j n gharine- did not regard it as a technical term. So far as we know, the fo Q v gt ro t- first full discussion of Consideration by that name is in Plowden's ^ on j^jcjj report of Sharington v. Strotton (Mich. 7 & 8 Eliz.) (e). The 7&'g Eliz' question in the case was whether natural love and affection was a good consideration to support a covenant to stand seised to uses. The action was trespass, and the defendants justified as servants of parties entitled under the covenant. The argument fjr the plaintiffs insists on ' 'value or recompense" as the essence of Consideration, and shows a full understanding of the law in its modern sense. Among other cases marrying the promisor's daughter at his request is put as a good consideration. The ar- gument for the defendants is long and -^ desultory, and goes [ -^ 677] into much irrelevant matter about Aristotle, the utility of mar- riage, and the Law of Nature; and the notion is brought in that the consideration for a promise must show some apparent bene- fit to the promisor; it is said that a promise to pay money in consideration of marriage, such as above mentioned, would be (a) Sic in the book: the word is here and elsewhere used with a double aspect, like obligation as debt still is. lb) Hil. 37 H. 6, 13, pi. 3. (c) 3 H. 6, 36, pi. 33 (p. 143 above). (d) 1 Eol. Ab. 593, pi. 7, citing 17 E. 4, 5; and see other cases and dicta there collected. (e) Plowd, 298, 302. 694 APPENDIX. True origin of the doc- trine perhaps in equity. Connexion of quid pro quo with ac- tion of debt. [•678] nudum pactum but for regard to Nature (a). It is also said that every deed imports a consideration, viz: the will of him that made it. But this seems a desperate argument. For it must be remembered that the common law rule of a deed wanting no consideration at all was inapplicable (6). Before the Statute of Uses a merely gratuitous agreement or declaration of uses with- out any transfer of legal possession was ineffectual to create a use even if made by deed: and the Statute executes a legal estate only where before the Statute there would have been a use en- forceable in equity. In the result the Co urt held that the cove- nant was effectual to transfer the use, natural love and affection being a sufficient consideration to support it. It does not appear whether they were prepared to go th e whole length of the argu- ment for the defendants and hold natural love and affection a good consideration for contracts of all sorts. As is well shown by this case, the question of Consideration was ot importance in the learning of Uses before the statute (c). And the reflection is obvious that both the general conception and the name of Consideration might have had? their origin in the Court of Chancery and the law of uses, and have been thence imported into the law of contracts rather than developed by the common law courts. On this hypothesis a connexion with the Eoman causa may be suggested with some plausibility. Judge O. W. Holmes, jun., has put forward a quite different theory of the origin of Consideration, which he regards as noth- ing else that a generalization from the technical requirements of the action of debt in its earlier form (The Common Law, chapter on History of Contract, pp. 253, sqq. ; Early English Equity, in Law Quarterly Review, No. 2) . One mode of proving a debt was by the oath of sufficient men, as one mode of defence was by the corresponding process of compurgation, which under the name of wager of law survived into the present century. These men are -fc the "good suit " of our mediaeval pratice: inde producit secimn is the common style. How this may be connected with the modern doctrine of simple contracts is best told in Mr. O. W. Holmes's own words: — ' ' The rule that witnesses could only swear to facts within their knowledge, coupled with the accident that these witnesses were not used in transactions which might create a debt except for a particular fact, namely, the delivery of property, together with the further accident that this delivery was quid pro quo, was equivalent to the rule that when a debt was proved by witnesses there must be quid pro quo. But these debts proved by witnesses instead of by deed are what we call simple contract debts, and thus beginning with debt, and subsequently extending itself to other contracts, is established our peculiar and most important doctrine that every simple contract must have a consideration. This was never the law as to debts or contracts proved in the usual way by the defendant's seal, and the fact that it applied only to obligations which were formerly established by a pro- cedure of limited use goes far to show that the connection with procedure was not accidental. (a) It is curious that the case was argued on principle without any reference to precedents in the Court of Chancery. It can scarcely have been of first impression. (b) The passage is cited in some modern books as an illustra- tion of or authority for that rule, but manifestly per ineuriam. (c) Only the precautions long embodied in the practice of con- veyancers prevent it from being so still. APPENDIX (note g). 695 "The mode of proof soon changed, but as late as the reign of Queen Elizabeth we find a trace of this original connection. It is said, ' But the common law requires that there should be a new cause (('. e., consideration), whereof the country mav have intelligence or knowledge lor the trial of it, if need be, so that it is necessary for the public weal ' («)■ Lord Mansfield showed his intuition of the historical grounds of our law when he said, ' I take, it that the ancient notion about the want of consideration was for the sake of evidence only; for when it is reduced into writing, as in covenants, specialties, bonds, &c, there was no ob- jection to the want of consideration ' (6). " It it should be objected that the preceding argument is nec- essarily confined to debt, whereas the requirement of considera- tion applies equally to all simple contracts, the answer is, that in all probability the rule originated with debt, and spread from debt toother contracts." (The Common Law, pp. 258, 259.) Some of the steps in the process thus sketched out are conjec- tural, and it is not clear that the proof per sectam had not be- come of little account, in the King's Court at all events, before the constructive epoch of the Common Law had fairly set in. (Glanv. X. c. 17; Bracton, fo. 400 b, \ 9; see Mr. Holme's re- marks on these passages, pp. 257, 262 of his book. ) And there may have been — I -^C suspect there was — greater complication of [ -f{ 679] influences than we can now trace in detail. I find it hard to believe that the quid pro quo developed from an accident of pro- cedure into a substantive rule of law without any reinforcement from the civilian idea of causa, which must have been perfectly familiar to our thirteenth-century lawyers. The fact established beyond a doubt by Mr. Holmes, that as late as the sixteenth century the doctrine of Consideration was not fully applied to the action of assumpsit, is in itself not decisive; as it is certain on any view, that it was long before assumpsit got clear of its early association with trespass and was understood to be in sub- stance an action of contract. On the other hand the apparently indefinite range of assumpsit, when once the gulf between mis- feasance and mere nonfeasance was bridged, must have reacted on the idea of Consideration whencesoever it had come, by mak- ing the need for its application more sharply felt. On the whole, I do not think the materials are ripe for a posi- tive conclusion. But the elements contributed by Mr. Holmes are assuredly not to be neglected; and the lines of search opened by him will probably lead to further results at that desirable but still quite uncertain time when the rich unpublished records of our mediaeval law shall be methodically examined and compe- tently edited. Note G. (p. 207). Early Authorities on Assignments of Choses in Action. In Mich. 3 Hen. IV. 8, pi. 34, is a case where a grantee of an j_ Cases annuity from the king sued on it in his own name. No question ^here seems to have been raised of his right to do so. a direct In Hil. 37 Hen. VI. 13, pi. 3 (see p. 676 above), it appears that ass i gnmen t by the opinion of all the justices an assignment of debts was no only is j n (a.) Sharington~T~Strotten, Plowden, 298, at p. 302, M. 7 & question. 8 Eliz. (6) Pillans v. Van Mierop, 3 Burrows, 1663, 16G9. 696 APPENDIX. consideration {quid pro quo) for a bond, forasmuch as no duty was thereby vested in the' assignee: and the Court of Chancery acted on that opinion by decreeing the bond to be delivered up: thus it is clear that the notion of such an assignment being good in equity though not at law had not then arisen. It may be noted in pass- ing that the case is otherwise interesting, as it shows pretty fully the relations then existing between the Court of Chancery and the Courts of Common Law. In Hil. 21 Ed. IV. 84, pi. 38, the question was raised whether an annuity for life granted without naming assigns could be [ -^r 680] granted ~fc over; and the dictum occurs that the right of action, whether on a bond or on a simple contract, cannot be granted over. Mich. 39 Hen. VI. 26, pi. 36. If the king grant a duty due to him from another, the grantee shall have an action in his own name: " et issint nepuit nul autre f aire." So Mich. 2 Hen. VII. 8, pi. 25. " Le Boy poit grantersa action ou chose gui gist en action; ct issint ne poit nul aider person." In Roll Abr. Action sur. Case, 1. 20, pi. 12, this case is stated to have been decided in B. R., 42 Eliz., between Mowse and Edney, per curiam: A. is indebted to B. by bill {i. e., the now ob- solete form of bond called a single bill), and B. to C. B. assigns A.'s bill to C. Forbearance on C.'s part for a certain time is no consideration for a promise by A. to pay C. at the end of that time (s. v. contra, ib. 29, pi. 60): for notwithstanding the assign- ment of the bill, the property of the debt remains in the assignor. In none of these cases is there a word about maintenance or public policy. On the contrary, it appears to be assumed through- out that the impossibility of effectually assigning a chose in ac- tion is inherent by some unquestionable necessity in the legal nature of things. Finally, in Termes dc la Ley, tit. CAo.se in Ac- tion, the rule is briefly and positively stated to this effect: Things in action which are certain the king may grant, and the grantee have an action for them in his own name: but a common person can make no grant of a thing in action, nor the king himself of such as are uncertain. No reason is given. The exception in favour of the Crown may perhaps be derived from the universal succession accruing to the Crown on forfeitures. This would naturally include rights of action, and it is easy to understand how the practice of assigning over such rights might spring up without much examination of its congruity with the legal principles governing transactions between subjects. Before the expulsion of the Jews under Edward I. they were treated as a kind of serfs of the Crown (tayllables au Roy come les soens serfs et a nul autre: Statutes of Jewry, temp, incert., dated by Prynne 3 Ed. 1), and the king accordingly claimed and exercised an arbitrary power of confiscating, releasing, assigning, or licens- ing them to assign, the debts due to them. Cp. charter of Fred- erick II., Pet. de Vineis Epist. lib. 6, no. 12: " omnes et singuli Judaei degentes ubique per terras nostrae iurisdictioni subiectas Christianae legis et Imperii praerogativa servi sunt nostrae Cam- erae speciales." And see on this subject Y. B. 33 Ed. 1 (in Rolls series), pp. xli. 355, and Pry nne's " Short Demurrer to the Jews, " &c. (Lond. 1656, a violent polemic against their re-admission to England), passim. [ -jf 681 ] * In Hil. 9 Hen. VI. 64, pi. 17, Thomas Rothewel sues J. Pewer 2. Cases f° r maintaining W. H. in an action of detinue against him, where Rothewel, for " un box ove charters et muniments." Defence, that the right of W. H. had granted to Pewer a rentcharge, to which the muni- an assignee ments in question related, and had also granted to Pewer the ASSIGNMENTS OF CHOSES IN ACTION. 697 box and the deeds, then being in the possession of Rothewel to to sue in the the use of W. H., wherefore Pewer maintained W. H., as he name of the ■well might. To this Paston, one of the judges, made a curious assignor was objection by way of dilemma. It was not averred that \V. H. in question, was the owner of the deeds, but only that Rothewel had them to his use ; and so the property of them might have been in a stran- ger : " et iss-int ceo fuit chose enaction et issint tout void" : the pre- cise meaning of these words is not very clear, but the general drift is that, for anything that appeared, W. H. had no assigna- ble interest whatever ; and it looks as if the strong expression tout void was meant to take a higher ground, distinguishing be- tween a transaction impeachable for maintenance and one wholly ineffectual from the beginning. But if W. H. was the true owner, Paston continued, then the whole property of thedeeds,&c, passed to Pewer, who ought to have brought detinue in his own name («). Babington, C. J., and Martyn, J., the other judges present, were of a contrary opinion, holding that any real inter- est in the matter made it lawful to maintain the suit. The at- tempt to assign a chose in action is here cornpared by the coun- sel for the plaintiff to the grant of a reversion without attorn- ment ; showing that the personal character of the relation waa considered the ground of the rule in both cases. In Mich. 34 Hen. VI. 30, pi. 15, Robert Horn sued Stephen Foster for maintaining the administrators ot one Francis in an action against him, R. Horn : the circumstances being that Horn was indebted to Francis by bond, and Francis being indebted to Stephen in an equal sum assigned the debt and delivered the bond to him, authorizing him, if necessary, to sue on it in his (Francis') name, to which Horn agreed ; and now Francis had died intestate, and Stephen was suing on the bond in the name of the administrators with their consent. And this beingpleaded for the defendant, was held good. Prisot, in giving judgment, compared the case of the cestui que use of lands, whether origi- nally or claiming by purchase through him to whose use the feoff- ment was originally made, -^-taking part in any suit touching [ -^f 682] the lands. On this Fitzherbert remarks (Mayntenauns, 14) " Nota icy que per ceo il semble que un clnitepuit estre assigne pour satisfac- tion." So it is said in Hil. 15 Hen. VII. 3, pi. 3, that if one is indebted to me, and deliver to mean obligation in satisfaction of the debt, wherein another is bound to him, I shall sue in my debtor's name, and pay my counsel and all things incident to the suit ; and so may do he to whom the obligation was made, for each of us may lawfully interfere in the matter. Brooke, Abr. 140 b, observes referring to the last-mentioned case : " Et sic vide que chose in action poet estre assigne oustre pur loyal cause, come iust det, mez nemy pur maintenance." This form of expression is worth nothing, .as showing that assignment ot a chose in action meant to the writer nothing else than empower- ing the assignee to sue in the assignor's name. He was at no pains to explain that he did not mean to say the assignee could sue in his own name ; for he did not think any one could sup- pose he meant to assert such a plainly impossible proposition. This evidence seems sufficient to establish with reasonable cer- (a) Another argument put by the plaintiff's counsel, though not very material, is too quaint to be passed over : Whatever in- terest Pewer might have had by the grant of the rent and the deeds relating to it, yet he had none in the box, and therefore in respect of the box, at all events', there was unlawful maintenance on his part. 698 APPENDIX. tainty the statement in our text, and to convert what was a not improbable conjecture a priori into historical fact. The histor- ical difficulty is one which extends to the whole of our law of contract, namely, that of tracing any continuity of general prin- ciples in the interval between the purely Roman expositions of them in Bracton and Britton and theirfirst appearance in a defi- nitely English form. Note H. (p. 260). Occupations, dealings, &c. , regulated or restrained by statute. (The list here given is probably not complete. A certain num- ber of the references have been taken from the Index to the lie- vised Statutes without further verification. The occasional as- terisks mean that further remarks on the Act or matter thus de- noted will be found in the chapter on Agreements of Imperfect Obligation. ) Apothecaries. 55 Geo. 3, c. 194 ; 37 & 38 Vict. c. 34. Attorneys. See Solicitors. Bankers. 3 & 4 Win. 4, c. 98; 7 & 8 Vict. c. 32; 8 & 9 Vict. c. 76; 17 & 18 Vict. c. 83: See Lindley, 1. 191. Brewers. Inland Revenue Act, 1880, 43 & 44 Vict. c. 20, Part 2. T + 6831 * Brokers. 6 Ann. c. 68 (Rev. Stat.); 57 Geo. 3, c. lx.; rep. L in part, 33 & 34 Vict. c. 60. Smith v. Undo, 4 C. B. N. S. 395, 587; 27 L. J. C. P. 196, 335. Building. See Metropolitan. Cattle. (Sale in London) 31 Geo. 2. c. 40. Chain Cables and Anchors. (Sale forbidden if not tested and stamped) 34 & 35 Vict. c. 101, s. 7; 37 & 38 Vict. c. 51. Chemists. See Poisons (Sale of). Chimney Sweepers must take out a certificate, and are liable to penalties if they exercise their business without one: 38 & 39 Vict. c. 70. Clergy. Charging benefices forbidden, 13 Eliz. c. 20; Ex parte Arrowsmilh, 8 Ch. D. 96. Trading forbidden, 1 & 2 Vict. c. 106. Supra, p. 257. Coals. (Sale in London) 1 & 2 Vict. c. cli. Companies. (Formation of: partnerships of more than ten persons for banking, or twenty for other purposes, must if not otherwise privileged, be registered under the Act) Companies Act, 1862, s. 4. As to what is an association for the acquisition of gain within that s., see Smith v. Anderson (C. A.), 15 Ch. D. 247, overruling Sykes v. Beadon, 11 Ch. D. 170. Conveyancers. 33 & 34 Vict. c. 97, s. 60. Supra, p. 256. Dangerous Goods (importation, manufacture, sale, and carriage). Nitro-glycerine, &c. Explosi ves Act, 1 875, 38 Vict. c. 17. Petroleum, &c. 34 & 35 Vict. c. 105. Generally: Explosive Substances Act, 1883, 46 Vict. c. 3 (but this has only a remote bearing on any contract). Excise. General regulations as to trades and businesses subject to laws of — 7 & 8 Geo. 4, c. 53. 4 & 5 Vict, u. 20. 4 & 5 Wm. 4, c. 51. 26 & 27 Vict. c. 33, s. 15. 3 & 4 Vict. c. 17. 30 & 31 Vict. c. 90, s. 17. Game (sale of). 1 & 2 Wm. 4, c. 32. Porritt v. Baker, 10 Ex. 759. STATUTORY RESTRICTIONS ON CONTRACTS. 699 Gaming Securities. 5 & 6 Win. 4, c. 41. Goldsmiths. 17 & 18 Vict. c. 96 (and several earlier Acts) Gunpowder (manufacture and keeping). Explosives Act,1875, 38 & 39 Vict, c. 17. Insurance (Life). Assured must have interest, 14 Geo. 3, c. 48. The statute is a defence for the insurers, but if they choose to pay on au insurance without interest the title to the insurance moneys as between other persons is not affected: Worthington v. Curtis, 1 Ch. D. 419, see p. 334, supra. (Marine). The like: insurances of goods on British ships, ■^ "interest or no interest, or without further proof of interest I" JL- 6841 than the policy, or by way of gaming or wagering, or without benefit of salvage to the assurer," are made void by 19 Geo. 2, c. 37. See notes to Goram v. Sweeting, 2 Wms. Saund. 592-7. The prohibition of this statute extends to policies on profit and com- mission: Allkins v. Jupe, 2 C. P. D. 375. * .Requirement of stamped policy, 30 & 31 Vict. c. 23. Intoxicating Liquors. Licensing Acts, 1872-1874, 35 & 36 Vict. c. 94, and 37 & 38, Vict. c. 49 (and several earlier Acts). • Landlord and Tenant. Property Tax: 5 & 6 Vict. c. 35, s. 103. Lamb v. Brewster (C. A.) 4 Q. B. D. 607. Ground game: 43 & 44 Vict. c. 47, s. 3. Lotteries. Forbidden by 10 Wm. 3, c. 23 (Rev. Stat: al. 17) and a series of penal statutes, of which the last is 8 & 9 Vict. c. 74. Marine Store Dealers. Public Stores Act, 1875, 38 & 39 Vict. c. 25, ss. 9-11. * Medical Practitioners. 21 & 22 Vict. c. 90, 22 Vict. c. 21, 23 & 24 Vict. cc. 7, 66. Metropolitan Buildings. 18 & 19 Vict. c. 122, 25 & 26 Vict. c. 102. Money. Contracts, &c, must be made in terms of some cur- rency. Coinage Act, 1870, 33 Vict. c. 10. s. 16. Old Metal. (Minimum quantities to be bought at one time by dealer in) Prevention of Crimes Act, 1871, 34 & 35 Vict. c. 112, s. 13. Passenger steamer. Voyage without Board of Trade certificate unlawful, Merchant Shipping Act, 1854 (17 & 18 Vict. c. 104), s. 318. Dudgeon v. Pembroke, L. R. 9 Q. B. 581. Pawnbrokers. 35 & 36 Vict. c. 93. Supra, p. 256. Poison (sale of). 31 & 32 Vict. c. 121, s. 17, and see 32 & 33 Vict. c. 117, s. 3. Berry v. Henderson, L. R. 5 Q. B. 296. Printing. 32 & 33 Vict. c. 24. Bensley v. Bignold, supra, p. 253. Public Office (sale forbidden). 5 & 6 Edw. 6, c. 16; 3 Geo. 1, c. 15; 49 Geo. 3, c. 126; 53 Geo. 3, c. 54; 1 & 2 Geo. 4, c. 54; see Grseme v. Wroughton, 11 Ex. 146, 24 L. J. Ex. 265; and Benja- min, 507. Beligions Opinions (expression of). 9 Wm. 3, c. 35 (Rev. Stat: al. c. 32). See Cowan v. Milbourn, L. R. 2 Ex. 230. Seamen. Sale of or charge upon wages or salvage invalid, 17 & 18 Vict. c. 104, s. 233. Simony. Purchase of next presentation, 13 Ann. c. 11 (Rev. Stat: al. 12. Ann. stat. 2, c. 12). The purchase of a liie estate in an advowson is not within the statute, and the purchaser, if a clerk, may offer himself for admission on the next avoidance: Walsh v. Bishop of Lincoln, L. R. 10 C. P. 518. ■^r Slave Trade. Illegal, and contracts relating to avoided, 5 [_ -^ OOOj Geo. 4, c. 113, 6 & 7 Vict. c. 88. As to construction of the stat- utes on contracts made abroad, Santos v. lllidge, 6 C. B. N. S. 841, 28 L. J. C. P. 317, in Ex. Ch. 8 ib. 861, 29 L. J. C. P. 348. Solicitors. 23 & 24 Vict. c. 127, Unqualifled persona are for- 700 APPENDIX. bidden to practise, and a solicitor omitting to take out annual certificate cannot recover costs. Special agreements in writing between solicitor and client as to remuneration are now valid, 33 & 34 Vict. c. 28, ss. 4-15, if not in the nature of champerty, s. 11: *they cannot be sued upon, but may be enforced or set aside in a discretionary manner on motion or petition, ss. 8, 9. See Bees v. Williams, L. R. 10 Ex. 200. A promise to charge no costs at all in the event of losing the action is good apart from the statute, and is not touched by s. 11. Jennings v. Johnson, L. R. 8 C. P. 425. As to non-contentious business, this Act is superseded by the Solicitors' Remuneration Act, 1881, 44 & 45 Vict. c. 44. Spirits. &c. (sale of). * In small quantities, 24 Geo. 2, c. 40, s. 12 (Tippling Act); 25 & 26 Victf. c. 38; 30 & 31 Vict. c. 142, s. 4. To passengers on ship during voyage, 18 & 19 Vict. c. 119, s. 62. Spirits (methylated). As to making, warehousing, sale, &c. : 18 & 19 Vict. c. 38 (and several later Acts). Sunday. Work in ordinary callings by tradesmen, &c, and public sales by any person on Sunday forbidden, 29 Car. 2, c. 7. See Benjamin on Sale, 537-9. Tobacco. Growing tobacco is forbidden by 12 Car. 2, c. 34, 1 & 2 Will. 4, c. 13 (extending the prohibition to U. K.): and the tobacco- trade is further regulated by a great number of Customs and Excise Acts. * Trade Union Contracts. 34 & 35 Vict. c. 31, s. 4. ' Usury. The various statutes which fixed (with sundry excep- tions) a maximum rate of lawful interest were all repealed by 17 & 18 Vict.c. 90. It would be perhaps needless' at such a dis- tance of time to mention this, were it not that by an extraordi- nary oversight the last edition of Story on Contracts (£ 722) rep- resents the statute of Anne (12 Ann. stat. 2, c. 16) as still regu- lating the law of interest in England. *As to securities given after repeal of usury laws for money lent on usurious terms be- fore the repeal, Flight v. Reed, 1H.&C. 703, 32 L. J. Ex. 265. Wagers. 8 & 9 Vict. c. 109, supra, p. 258. Benjamin on Sale, 435. As to the extent of the excentions, Parsons v. Alexander, 5 E. & B. 263, 24 L. J. Q. B. 277; Coombes v. Dibble, L. R. 1 Ex. 248; Diggle v. Higgs, 2 Ex. D. 422; Trimble v. Hill (appeal to J. C. from New S. Wales on colonial statute in same terms), 5 App. [ ^- 686] Ca. -jr 342. Forbearance of proceedings to enforce payment of racing debts by purely conventional sanctions is not an unlaw- ful consideration: qu. whether or not a good consideration: qu. Bulb v. Yelierton, 9 Eq. 471. Wages. Payment otherwise than in money forbidden, 1 & 2 Wm. 4, c. 37 (Truck Act), in the trades enumerated in s. 19. Cutis v. Ward, L. R. 2 Q. B. 357. The stoppage of wages for frame rents, &c, in the hosiery manufacture is forbidden, and all contracts to stop wages and contracts for frame rents and charges are made illegal, null, and void, by 37«& 38 Vict. c. 48. See Willis v. Thorp, L. R. 10 Q. B. 383; Smith v. Walton, 3 C. P. D. 109. Weights and Measures. Standards defined, and use of other weights and measures forbidden. 5 Geo. 4, c. 74 ; 5 & 6 Wm. 4, c. 63; 18 & 19 Vict. c. 72; 22 & 23 Vict. c. 56. The use of the metric system is legalized by 27 & 28 Vict. c. 117. Sales by cus- tomary weights or measures which are well known multiples of standard weight or measure are not unlawful: Hughes v. Hum- phreys, 3 E. & B. 954, 23 L. J. Q. B. 356; Jones v. Giles, 10 Ex. 119, 23 L. J. Ex. 292. INDIAN CONTRACT ACT ON UNLAWFUL AGREEMENTS. 701 Note I. (p. 349). Indian Contract Act on Unlawful Agreements (ss. 23, 24, 26, 27, 28, 30, 57, 58). [It is thought unnecessary to set out here the illustrations, of which there are several, to s. 23, as the cases put are suffici- ently obvious. It must be remembered, however, that the illus- trations are an integral part of the enactment. None is given on the head of public policy, whether from a desire not to limit ju- dicial discretion or from the difficulties attending the subject: so that the Courts are apparently left to fall back upon the Eng- lish authorities. The sections or clauses which distinctly differ from the corresponding English law are marked with an aster- isk.] 23. The consideration or object of an agreement is lawful un- less it is forbidden by law; or is of such a nature that, if permit- ted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of an- other; or the Court regards it as immoral or opposed to public policy. In each of these cases, the consideration or object of an agree- ment is said to be unlawful. Every agreement of which the ob- ject or consideration is unlawful, is void. 24. If any part of a single consideration for one or more ob- jects, -fcor any one or any part of any one of several considera- [ -X- 687] tions for a single object is unlawful, the agreement is void. ,, ( Illustration. A. promises to superintend, on behalf of B., a legal manufac- ture of indigo and an illegal traffic in other articles. B. promises to pay to A. a salary of 10,000 rupees a year. The agreement is void, the object of A.'s promise, and the consideration for B.'s promise, being in part unlaw- ful. 26. Every agreement in restraint of the marriage of any per- son, other than a minor, is void. 27. Every agreement by which anyone is restrained from exer- cising a lawful profession, trade, or business of any kind, is to that extent void. Exception 1. One who sells the good-will of a business may- agree with the buyer to refrain from carrying on a similar busi- ness, within specified local limits,* so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein,* provided that such limits appear to the Court reasonable, regard being had to the nature of the business. Exception 2. Partners may, upon or in anticipation of a disso- lution of the partnership, agree that some or all of them will not carry on a business similar to thatof the partnership withinsuch local limits as are referred to in the last proceeding exception. Exception 3. Partners may agree that some one or all of them will not carry on any business other than thatof the partnership, during the continuance of the partnership. 28. Every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals or which limits the time within which he may thus enforce his rights, is void to that extent. 702 APPENDIX. Exception 1. This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects, shall be referred to arbitration, and that only the amountawarded in such arbitration shall be recoverable in respect of the dispute so referred. *When such a contract has been made a suit may be brought for its specific performance, and if a suit other than for such specific performance, or for the recovery of the amount so awarded, is brought by one party to such contract against any other such party in respect of any subject which they have so agreed to refer, the existence of such contract shall be a bar to the suit. [ -jf 688] if Exception 2. Nor shall this section render illegal anycontract in writing by which two or more persons agree to refer to arbi- tration any question between them.which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration. 30. Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made. This section shall not be deemed to renderunlawfulasubscrip- tion or contribution, or agreement to subscribe or contribute, made or entered into for or toward any plate, prize or sum of money* of the value or amount of five hundred rupees or up- wards, to be awarded to the winner or winners of any horse-race.* Nothing in this section shall be deemed to legalize any trans- aclion connected with horse-racing to which the provisions of section 294 A. of the Indian Penal Code apply. 57. Where persons reciprocally promise, firstly to do certain things which are legal, and secondly, under specified circum- stances, to do certain other things which are illegal, the first set of promises is a contract, but the second is a void agreement. Illustration. A. and B. agree that A. shall sell B. a house for 10,000 rupees, but that if B. uses it as a gambling house, he shall pay A. 50,000 rupees for it. The first set of reciprocal promises, namely, to sell the house and to pay 10,000 rupees for it, is a contract. The second set is for an unlawful object, namely, that B. may use the house as a gambling house, and is a void agree- ment. 58. In the case of an alternative promise, one branch of which is legal and the other illegal, the legal branch alone can be en- forced. Illustration. A. and B. agree that A. shall pay B. 1,000 rupees, for which B. shall afterwards deliver to A. either rice or smuggled opium. This is a valid contract to deliver rice, and a void agreement as to the opium. APPENDIX (NOTE K). 703 • Note K. (p. 389). [ + 689] Indian Contract Act on Impossible Agreements. 53. "When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation from the other party for any loss which he may sustain in consequence of the non-performance of the contract. Illustration. A. and B. contract that B. shall execute certain work for A. for a thousand rupees. B. is ready and willing to exe- cute the work accordingly, but A. prevents him from doing' so. The contract is voidable at the option of B., and if he elects to rescind it he is entitled to recover from A. compensation for any loss which he has incurred by its non-performance. 56. An agreement to do an act impossible in itself is void. A contract to do an act which after the contract is made be- comes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Where one person has promised to do something which he knew, or with reasonable diligence might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise. Muslrations. a. A. agrees with B. to discover treasure by magic. The agree- ment is void. 6. A. and B. agree to marry each other. Before the time fixed for the marriage A. goes mad. The contract becomes void. c. A. contracts to marry B., being already married to C, and being forbidden by the law to which he is subject to practise polygamy. A. must make compensation to B. for loss caused to her by the non-performance of his promise. d. A. contracts to take a cargo for B. at a foreign port. A.'s government afterwards declares war against the country in which the port is situated. The contract becomes void when war is declared. e. A. contracts to act at a theatre for six months in considera- tion of a sum paid in advance by B. On several occasions A. is too ill to act. The contract on these occasions be- comes void (a). (a) A. would apparently be bound under s. 65 to restore a pro- portionate part of the payment, which in England he would not unless there were something in the particular contract to shovf that the payment was intended to be apportioned. 704 APPENDIX. [ -^f 690] if 67. If any promisee neglects or refuses to afford the prom- isor reasonable facilities for the performance of his promise the promisor is excused by such neglect or refusal as to any non-per- formance caused thereby. Illustration. A. contracts with B. to repair B.'s house. B. neglects or re- fuses to point out to A. the place in which the house re- quires repair. B. is excused for the non-performance of the contract if it is caused by such neglect or refusal. Compare also Chapter III. of the Act "On Contingent Contracts," ss. 31—36. Note L. (p. 451). Braclon on Fundamental Error. De acquirendo rerum dominio, fo. 156, 16: — "Item non valet donatio, nisi tarn dantis quam accipientis concurrat mutuus con- sensus et voluntas, scilicet quod donator habeat animum donandi et donatarius animum recipiendi. Nuda enim donatio (a) et nuda pactio non obligant aliquem nee faciant aliquem debitorem ; ut si dicam, Do tibitalem rem, et non habeam (6) animum don- andi nee tradendi nee a traditione incipiam, non valet, utsi dicam, Do tibi istam rem, et illam nolim (c) tradere vel (c) sustinere quod illam tecum feras vel arborem datam suecidas, non valet donatio quia donator plene non consentit. Item opor- tet quod non sit error in re data, quia si donator senserit de una re et donatarius de alia, non valet donatio propter dissensum: et idem erit si dissentio: fiat in genere, numero, et quautitate. . . . [Then follow instances. ] Et in finenotandum quod si in corpus quod traditursit consensum, non nocet, quam vis circa causam dandi atque recipiendi sit dissentio: ut si pecuniam numeratam tibi tradam, vel quid tale, et tu eamquasi creditam(d) accipias, constat, ad te proprietatem transire." [ ^ 691] * NoTE M - (p- 478 )- Mistake in Wills. Properly speaking, there is no jurisdiction in any court to rec- tify a will on the ground of mistake. The Court of Probate may reject words of which the testator is proved to have been ignor- ant, whether inserted by the fraud or by the mistake of the per- (a) ratio MS. Hobhouse, Lincoln's Inn. (6) halmero MS. Hobh. (c) MS. Hobh.: edd. nolui, et. (d) Traditam ed. 1569, followed without remark by Sir T. Twiss, 1878, who also gives bya misprint, and translates tali for tale immediately above. (See on the general character of this edition '■ The Text of Bracton," by Prof. Paul Vinogradoff, Law Quarterly Review, No. 2. But creditam is the reading of a ma- jority of good MSS. (Lincoln's Inn, Camb. Univ., Brit. Mus. , Bibl. Nat. Paris) and is evidently required by the sense. Brac- ■ ton is quoting from the Digest, 41. 1. de acq. rer. doru. 36: cp. Giiterbock, Henr. de Bracton, p. 85, who assumed, without, cause as the MSS. now show, that Bracton misunderstood the passage. The corruption; however, is an easy and early one. APPENDIX (NOTE N). 705 60n who prepared the will (a). But it has no power to remedy a mistake "by modifying the language used by the draughtsman and adopted by the testator so as to make it express the supposed intention ot the testator. . Sueh a mode of dealing with wills would lead to the most dangerous consequences, for it would con- vert the Court of Probate into a court of construction of a very peculiar kind, whose duty it would be to shape the will into con- formity with the supposed intentions of the testator " (b). Ex- actly the same rule has been laid down in equity (c). The cases in which it is said that the Court will interfere to correct mistakes in wills may be classified thus: 1. Cases purely of construction according to the general inten- tion collected from the will itself (d). 2. Cases of equivocal description, of words used in a special habitual sense (d), or of a wrongly given name which may be cor- rected by a sufficient description (e). 3. Cases of dispositions made on what is called a, false cause (/), t. e., on the mistaken assumption of a particular state of facts ex- isting, except on which assumption the disposition would not have been made. These are analogous to the cases of contract governed by Couturier v. Haslie(g): and just as in those cases, the expressed intention is treated as having been dependent on a con- dition which has failed. But the true view of all these cases appears to be not that the words are corrected, but that the intention when clearly ascer- tained is carried out notwithstanding the apparent difficulty caused by the particular words. *• Note N. (p. 485). [ -fa 692] On the supposed equitable doctrine of " making representations good." I shall here endeavor to show in detail, in accordance with what Original is said in the text, that this much alleged head of equity, in so tar statement as it purports to establish any rule or principle apart from the j n Ham- ordinary rules as to the formation of contracts on the one hand, me rsley v. and the principle of estoppel by assertion as to existing facts on D e Bj e i. the other is imaginary. In the principal class of cases the "rep- resentation " is of an intention to make a provision by will for persons about to marry, in reliance on which representation the marriage takes place. The leading authority is Hammersley v. De Biel (li), decided by the House of Lords in 1845 on appeal from the Court of Chancery'. Iu the Court below (/) Lord Cottenham (a) E. g. Morrell v. Morrell, 7 P. D. 68, following Fulton v. ■ Andrew, L. E. 7 H. L. 448. (J)-Harter v. Harter, L. B. 3 P. & D. 11, 21, following Guard- house v. Blackburn, L. E. 1 P. & D. 109. (c) Newburgh v. Newburgh, 5 Madd. 364. (d) See Hawkins on Construction of Wills, Introduction. (e) Not only an equivocal name may be explained, but a name which applies to only one person may be corrected by a descrip- tion sufficiently showing that another person is intended: Charter v. Charter, L. B. 7 H. L. 364. (/) Campbell v. French, 3 Ves. 321. ( 9 ) 5 H. L. C. 673. Supra, pp. 371, 441. (h) 12 CI. & F. 45. (») 12 CI. & F. at p. 62. 45 PEINOIPLKS OF CONTRACT. 706 APPENDIX. Subsequent explanations in House of Lords. [*693] bad laid down the proposition that "a representation made by one party for the purpose of influencing the conduct of the other party, and acted on by him, will in general be sufficient to en- title him to the assistance of the Court for the purpose of realiz- ing such representation. ' ' This appears to be the source of all the similar statements which have since been made(c). Taken withits context, however, it need not mean more than that an exchange of proposals and statements by which the conduct of parties is deter- mined may, as containing all the requisites of a good agreement, amount to a contract, though nottoaformal contract. To Mr. Justice Stephen Lord Cottenham's words "appear to mean only that con- tracts of this nature may be made like other contracts by informal documents and partly by documents and partly by conduct" (d). And in this sense the rule seems to have been understood in the House of Lords both in the same and in subsequent cases. Lord Brougham and Lord Campbell speak of the transaction in plain terms as a contract. In the Rolls Court it had also been dealt with on that footing (e). Still more pointed is the remark made by Lord St. Leonards in 1854: — "Was it merely a representation in Hammersley v. De Bielf Was it not a proposal with a condi- tion which, being accepted, was equivalent to a contract?" (/). In the terms of the Indian Contract Act, it was the case of a pro- posal accepted by the performance -^-of the conditions. The state- ment " I will leave you 10,0007. by my will if you marry A.," if made and acted on as a promise, becomes a binding contract (the marriage undertaken on the faith of that promise being the consideration), and so does a statement in less plain language which amounts to the same thing. On the other hand the stater ment " If you marry A. I think, as at present advised, I shall leave you 10,000/.,'' is nota promise and cannot become a contract: neither can it act as an estoppel, for it cannot matter to the other party's interest whether the statement of an intention which may be revoked at any time is at the moment true or false. And the same is true of any less explicit statement which is held on its fair construction to amount to this and no more. Such was the result of the case where Lord St. Leonards put the question just cited (g). And in that case the true doctrine was again distinctly affirmed by Lord Cranworth (7i). ' ' By what words are you to define whether a party has entered into an engagement as distinct from a contract, but which becomes a contract by another person acting upon it? Where a man en- gages to do a particular thing, he must do it; that is a contract; but where there are no direct words of contract, the question must be, what has he done? He has made a contract, or he has not; in the former case he must fulfil his contract; in the latter there is nothing that he is bound to fulfil. Again: "There is no middle term, no tertium quid between a representation so made as to be effective for such a purpose, and being effective for it, and a contract: they are identical." (e) The turn of language is in itself not novel. It seems to be modelled on that which had long before been used in cases of a different class and for a different purpose. See Evans v. Bicknell 6 Ves. 174. (d) 5 Ex. D. 299. (e) Nom. De Beil v. Thomson, 3 Beav. 469. (/) Maunsell v. Hedges White, 4 H. L. C. at p. 1051: cp. t> 105a (g) Maunsell v. Hedges White, 4 H. L. C. 1039. (h) At pp. 1055-6. " REPRESENTATIONS." 707 He proceeded to comment on Hammersley v. De Biel, and to express a decided opinion that the language there used by Lord Cottenhani was not meant to support, and did not support, the notion that words or conduct not amounting to a true contract may create an equitable obligation which has the same effect. "The only distinction I understand is this, that some words which would not amount to a contract in one transaction may possibly be held to do so in another." In the case of Jorden v. Money (z), which came before the House of Lords some months later, it was held, first, that the statement there relied on as • binding could not work an estoppel, because it was a statement not of fact but of intention ; secondly, that on the evidence it did not amount to a promise, and therefore could not be binding as a contract. Lord St. Leonards dissented both on the evidence and on the law. His opinion seems -fcon the whole to come to [ -A- 694] this: "My inference from all the facts is that this statement was a promise: but it not, I say it is available by way of estop- pel, for I deny the existence of any rule that equitable estoppel can be by statement of fact only and not of intention." On this point, however, the opinion of the majority (Lord Cran- worth and Lord Brougham) is conclusive (a). Nor is the contention of Lord St. Leonards altogether well paired with what he had himself said not long before in Maunsell v. Hedges White (6) : " T do not dispute the general principle that what is called a representation, which is made as an inducement for another to act upon it, and is followed by his acting upon it, will, especially in such a case as marriage, be deemed to be a contract." In a much earlier case of the same class before Lord Eldon (e) Cases in the language used is indecisive: "arrangement" and "engage- Court of nient" seem preferred to "agreement." In two later ones de- chancery cided by Sir John Stuart (d), an informal statement or promise Opinion as to a settlement on a daughter's marriage, and an informal of Stuart promise to leave property by will to an attendant as recompense V.-C. for services, were held to be enforceable. The Vice-Chancellor certainly seems to have adopted the opinion that a "representa- tion" short of contract had somehow a binding force. Heap- pears further to have held that, inasmuch as these were not prop- erly cases of contract, it was immaterial to consider whether the Statute of Frauds applied to them, and to have thought that the opinion of Lord Cranworth in Jorden v. Money was inconsistent with the decision in Hammersley v. De Biel (e). But these opin- (z) 5 H. L. C. 185. A pretty full summary is given by Stephen, J., 5 Ex. D. at p. 301. (a) And see Mr. Justice Stephen's criticism, 5 Ex. D. at p. 303. (b) 4 H. L. C. at p. 1059. (c) Luders v. Anstey, 4 Ves. 501. (d) Prole v. Soady, 2 Giff. 1 (1859); Loffus v. Maw, 3 Giff. 592 (1862). ' In Loffus v. Maw there is a suggestion that the "representation" affects the specific property as an equitable charge. (e) Loffus v. Maw, 3 Giff. at pp. 603-4. In Prole v. Soady, a strange and entangled case, no point was made on the Statute of Frauds. But there it appears to have been established as a fact that the wile's father represented to the intended husband, an Englishman, that a certain trust disposition of Scotch land in the proper Scottish form was irrevocable. This was, as regards the person to whom it was made, a representation of foreign law, and therefora equivalent to a representation of fact. And thus 708 [*695] Recent cases of saine class. [*696] APPENDIX. ions are inconsistent with the true meaning and effect of the cases in the House of Lords which -^-have already been cited: and one of them is now expressly overruled (a). It must be admitted that later judicial expressions are to be found which in some degree countenance them: but these have been, without excep- tion, unnecessary for the decision of the cases in which they oc- curred. Nor could they in any event outweigh declarations of the law made (as I venture to think) with sufficient clearness in a Court which not only gives the law to all others in England, but disclaims any power of reconsidering its own decisions. It is remarkable that the authoritative, explanation of Hammersley y. De Biel (b) given in Maunsell v. Hedges White (c) has in almost all the recent cases been left unnoticed. Coverdale v. Eastwood (1872) {d) was a case of precisely the same type as Hammersley v. De Biel. Bacon, V.-C. decided it on the ground that the transaction amounted to a contract, and so it was expressed in the decree. But he also thought that there existed, and was applicable to the case in hand, "this larger principle, that where a man makes a representation to an- other, in consequence of which that other person contracts en- gagements, or alters his position, or is induced to do any other act which either is permitted by or sanctioned by the person mak- ing the representation, the latter cannot withdraw from the rep- resentation, but is bound by it conclusively." Coles v. Pillcing- ton (e) (1874, before Malins, V.-C.) was a case of a verbal agree- ment to allow the occupation of a house. This had been acted on by the plaintiff, and thus was enforceable notwithstanding the Statute of Frauds under the rule of equity as to part per- formance :' but a difficulty was raised about want of considera- tion, and the supposed doctrine of "representations" was in- voked, in a manner previously unheard of, to supply a kind of moral consideration. But the plaintiff had agreed to pay the ground rent and rates and taxes during the occupation ; which surely was consideration enough. In lie Badcock, 17 Ch. D. 361 (1880) the same judge treated the cases on marriage settlements as depending on actual contract (see at p. 366). Then in Dash- wood v. Jermyn (f) (1879), which was another marriage case, Ba- con, V.-C. held that the connexion between the statement relied on as a promise and the marriage alleged to have taken place on the face of it was not sufficiently made out. He stated the gen- eral rule thus : — " If a man makes a representation on the faith of which another man alters his position, enters into a deed, in- curs an obligation, ■^•the man makingitis hound to perform that representation, no matter what it is, whether it is for present the decision may have been right on the ground of estoppel. But it is far from easy to discover on what ground it really proceeded. The case went to the Appeal Court, but was compromised: seel Ch. 145. The still later case of Skidmore v. Bradford, 8 Eq. 134, decided by the same judge in 1869, may be and has been regarded as a case of true contract: Fry on Specific Performance, \ 299, p. 133, 2nd ed. (a) Loffus v. Maw is clearly disapproved by Lord Selborne and Lord O'Hagan in Maddison v. Alderson, 8 App. Ca. at pp. 473, 483. (6) 12 CI. & F. 45. (c) 4 H. L. C. 1039. (d) 15 Eq. 121. le) 19 Eq. 174. see at p. 17a (/) 12 Ch. D. 776. " REPRESENTATIONS." 709 payment sr for the continuance of the payment of an annuity, or to make a provision by will. That in the eye of a Court of Equity is a contract, an engagement which the man making it is bound to perform." This appears to qualify to some extent the dicta of the same .iudge in Cmcrdale v. Eastwood. Here Ave read no longer of two distinct kinds of obligation, by contract and by "representation,'' but of one kind of obligation, and that a con- tractual one, arising from the representations made by one party with the intent that they should be acted upon, and the conduct of the other who does act upon them. Finally we haxe Ahlerson v. Maddison (1880) («), where there was an agreement to leave property by will as a reward for services. Here Stephen, J. set forth, as we have seen in the text, the view that it must be a con- tract or nothing : and he held that a contract was proved by the facts of the case. The decision was reversed by the Court of Ap- peal on the ground that, the case being within the Statute of Frauds, there was no sufficient part performance ; and the same view was taken by the House of Lords. No encouragement whatever, to say the least, was given to the doctrine.of "' repre- sentation." So far the authorities as to direct enforcement of "representa- c ageg f tions." We do not count among them Piggot v. Stralton (i), de- collateral cided by the Court of Appeal in 1859, in which Lord Campbell "representa- incidentally took a minimizing view of the effect of Jorden v. tions" Money (c). That case, so far as it did not proceed on express inducing covenant, was one of equitable estoppel. The representation contracts. was not of intention at all, but that a certain state of facts with its legal consequences existed and would continue to exist. But another class ot decisions now calls for mention. These lay down, or seem to lay down, a rule to the effect that where a con- tract has been entered into upon the representations of one party that he will do something material to the other party's interest under it, and he does not make good that represention, he cannot enforce specific performance of the contract : and in one case the contract has even been set aside at the suit of the party misled. It is difficult in these cases to sec why the so-called representation does not amount to a collateral agreement, or even to a term in the principal contract itself. In the first set of cases, where spe- cific performance was -fa refused, a vendor or lessor had repre- [-^r-697] sented that he would do something for the purchaser's or lessee's benefit, either in the way of repair or improvement on the prop- erty itself (d), or by executing works on adjoining property as part of a general plan (e). In these cases it has been thought immaterial, since the remedy of specific performance is ''not matter of absolute right," to consider whether the collateral "independent engagement " could or could not have been sued on as a contract or warranty (/). In the one case which goes (a) 5 Ex. D. 293, 7 Q. B. D. 174, 8 App. Ca. 467. (6) 1 D. F. J. :«. (c) At p. 51. But Lord Selborne seems to adopt the opinion of Lord Cranworth to its full extent in Citizens' Bank of Louisi- ana v. First National Bank of New Orleans, L. E. H. L. at p. 360. (d) Lamare ,'. Dixon, L. R. 6 H. L. 414. (e) Beaumont t>. Dukes, Jac. 422; Myers o. "Watson, 1 Sim. N. S 523. '(f) Lord Cranworth, 1 Sim. N.S. 529 (this was in 1851, and, coming to the Vice-Chancellor's Court from the Exchequer, he probably took doctrines of equity current in the books as he found 710 APPENDIX. farther the contract was a partial re-insurance effected by one insurance society (A.) with another (B.) for one-third of the original risk, the secretary of society A. stating, when he pro- posed the re-insurance, that one-third was to be re-insured in like manner with another office C. , and the remaining one-third retained by A., the first insurers. This last one-third was afterwards re- insured by A. with C. without communication with B. It was held that society B. was entitled to set aside the policy of re-in- surance given by it on the faith that society A. would retain part of the liability. And it was said to make no difference that such an intention was really entertained at the time : for the change of intention ought to have been communicated. " If a person makes a representation by which he induces another to take a particular course, and the circumstances are afterwards altered to the knowledge of the party making the representa- tion, but not to the knowledge of the party to whom the representa- tion is made, and are so altered that the alteration of the cir- cumstances may affect the course of conduct which may be pur- sued by the party to whom the representation is made, it is the imperative duty of the party who has made the representation to communicate to the party to whom the representation has been made the alteration of those circumstances" (a). This case, decided by the Lords Justices in 1864, is that which gives rise to most difficulty. No reason appears why the retain- ing of the specified part of the risk by the re-insuring office should not have been deemed a term or condition of the contract. In- deed it seems to have been an integral part of the proposal, and evidence was offered that by the constant usage of insurance r JL. (39g 1 offices it was -jfe- so understood. The judgments, however, cer- tainly do not proceed on that footing. Possibly it might be said that the representation in this case, being of something to be done not in a more or less distant future, but at the same time with and as part of the proposed transaction, was in the nature of a representation of fact. It might be put thus: "We are re- insuring one-third with C. ; one-third of the risk we keep; will you, B., take the other third?" And thus put, it might be re- garded as an alternative case of contract or estoppel, in which (for some reason not evident from the report) the Court preferred the less simple course. In the other cases it is by no means clear that the existence of a true collateral agreement or warranty is excluded; in at least one similar case (ft) the question is treated as one of agreement en- tirely. In the latest of the kind, Lamare v. Dixon (c), which came before the House of Lords in 1873, the principal agreement was for a lease of cellars to be used as wine vaults. During the negotiations the lessor assured the lessee either that he had al- ready taken, or that he would forthwith take, sufficient measures to keep the cellars dry and fit for a wine merchant's use. It seems most natural to regard this as a warranty: still, so tar as it is related to anything already done, it might be regarded as a positive statement of fact. "You will find the cellars dry," or any speech to that effect, might mean either: "I undertake to them : it may be a question if he would have adhered to this later, when we look at his opinions in Maunsell v. Hedges "White and Jorden v. Money) ; Lord Cairns, L. R. 6 H. L. 428. (a) Traill v. Baring, 4 D. J. S. 318, 329, per Turner, L. J., ap- proved by Fry, L. J., Scottish Petroleum Co., 23 Ch. D. at p. 438. (ft) Peacock v. Penson, 11 Beav. 355. (c) L. E. 6 H. L. 414. " REPRESENTATIONS." " 711 make the cellars dry," or, "That has been done which is known by competent experience to be sufficient to ensure dryness." The line between warranty and estoppel is here a fine one, and per- haps not worth drawing, but still it is possible to draw it: and when Lord Cairns said "I quite agree that this representation is not a guarantie," he may have meant that he preferred to regard * it as a statement of fact operative by way of estoppel. There certainly does run through these cases, however, the idea that specific performance is so iar a discretionary remedy that it may be refused to a party seeking it on grounds which do not affect his legal rights under the contract. But it seems a tenable position that equity judges have taken a needlessly narrow view of what is a binding agreementon the principles of the common law (c). In fact agreements collateral to leases, and not in writ- ing, have of late years been enforced without doubt. In the last case, which was in 1875 (d), the lessor's undertaking was to -^•repair and furnish the house demised. In all of them the facts [ ^f 699] appear undistinguishable in their character from those which have been treated in the Court of Chancery as establishing a right to relief on the ground of ''representation." There remains a class of cases in equity in which it has been Cas e3 where held that a statement made to a person intended to act upon it f a i se re _ by one who knows it to be false, or is recklessly ignorant whether presentation it is true or false, may create in the person who acts on it to his gi V es as injury a substantive right to compensation. Here the statement ^ Tor ,g a is a wrong, and the remedy is precisely analogous to, and before substantive the Judicature Acts was concurrent with, that which was given r i a ht f at law by the action of deceit, or action on the case in the nature ac ti n of an action of deceit (e). It will be sufficient to give references to a few of the decisions (/). ' A rule established by someof these, of which Slim v. Oroucher (/) is an instance, is that a man in whose peculiar knowledge a fact must have been cannot be heard to say that when he afterwards positively asserted the contrary of the fact he had forgotten the true state of things. Whether courts of common law would have refused to admit this rule, or whether, even if not affirming it as (c) It would be curious to know in what proportion of cases under the old practice a party left by the Court of Chancery, as the phrase was, to make what he could of it at law, derived sub- stantial or any profit from that liberty. ((f) Angell v. Duke, L. E. 10 Q. B. 174. The others are Mor- gan v. Griffith, L. E. 6 Ex. 70; Erskine v. Adeane, 8 Ch. 756. The ground taken as to the Statute of Frauds is that the collat- eral agreement is not a ' 'contract or sale of lands, " &c. : the effect of the Statute being as it were exhausted by the principal con- tract; with which the collateral one must of course be consis- tent. (e) "It is precisely analogous to the common law action for deceit" ; Lord Chelmsford, L. E. 6 H. L. atp. 390. " It is in the nature of an action or proceeding ex delicto": Lord Cairns, ibid, at p. 402. (/) Evans v. Bicknell (1801), 6 Ves. 174 (where Lord Eldon comments at large on the danger of similar actions in courts of law, the defendant being then unable in those courts to give evi- dence); Slim v. Croucher (1860), 1 D. F. J. 518 (where, as to the concurrent jurisdiction, see per Lord Campbell at p. 523: but the case might also be considered as one of estoppel, see per Lord Selborne, 5 App. Ca. at p. 935) ; Peek v. Gumey, L. E. 6 H. L. 377 (1S73). 712 APPENDIX. a rule of law, they would not have- acted on it in practice as a rule of evidence, is now a question of no importance (z). It is worth remark that not unfrequently a difficulty occurs in drawing the line between contract or warranty and fraud, as we have already seen that there does between contract and estoppel. » " Most of the cases . . . when looked at, if they do not ab- solutely amount to contract, come uncommonly near it. ... If you choose to say, and say without inquiry, ' I warrant that,' that is a contract. If you say ' I know it,' and if you say that in f -jr 7001 ° rd er it to save the trouble of inquiring, that is a false vepre- sentation — you are saying what is ialse to induce them to act upon it " (a). Cases are indeed quite possible in which the legal effect of the facts may equally be considered as warranty, estop- pel, or duty ex delicto. And since equity judges, dealing with facts and law together, were not bound to distinguish with pre- cision, and often did not distinguish, on which of two or more possible grounds they rested their decisions, it is not surprising that a good deal of ambiguity has gathered round the subjects discussed in this note. Indian Contract Acton Fraud, &c. Note O. (p. 481). Indian Contract Act on Fraud, etc. (6). 1 0. All agreements are contracts (c) if they are made by the free consent of parties competent to contract, for a lawful con- sideration and with a lawful object, and are not hereby expressly declared to be void 13. Two or more persons are said' to consent when they agree upon the same thing in the same sense. 14. Consent is said to be free when it is not caused by (1) coercion, as defined in section fifteen, or (2) undue influence, as defined in section six- teen, or (3) fraud as defined in section seventeen, or (4) misrepresentation, as defined in section eigh- teen, or (5) mistake, subject to the provisions of sections twenty, twenty-one, and twenty-two. Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresention, or mistake. 15. Coercion is the committing, or threatening to commit, any act forbidden by the Indian Penal Code, or the unlawful detain- ing or threatening to detain, any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Explanation. — It is immaterial whether the Indian Penal Code is oris not in force in the place where the coercion is employed. (z) Lord Chelmsford seems to have thought the equitable remedy was more extensive than the legal (L. E. G H. L. 390): but in the case of Siim v. C'roucher Lord Campbell recognized no distinction. (a) Lord Blackburn. Brownlie v. Campbell (Sc.) 5 App. Ca. at p. 952: the whole passage should be studied. , (b) The illusrations are here omitted. Some of them have been already cited in the text. (c) See the definitions in s. 2, note A., p. 636, above. INDIAN CONTRACT ACT ON FRAUD. 713 •fa [This goes in terms far beyond English law, for it does not f ■&• 7011 require that the coercion should be exercised by or even known to the other party, nor that the person coerced should be the party whose consent is to be obtained, or in any way related to him. I do not know whether the section has been judicially in- terpreted in any of the High Courts.] 16. Undue influence is said to be employed in the following cases: — (1) When a person in whom confidence is reposed by another, or who holds a real or apparent au- thority over that other, makes use of such con- fidence or authority for the purpose of obtain- ing an advantage over that other, which, but for such confidence or authority, he could not have obtained; (2) When a person whose mind is enfeebled by old age, illness, or mental or bodily distress, is so treated as to make him consent to that to which, but for such treatment, he would not have con- sented, although such treatment may not amount to coercion. Fraud means and includes any of the following acts commit- ted by a party to a contract or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract: — (1) The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) The active concealment of a fact by one having knowledge or belief of the fact; (3) A promise made without any intention of per- forming it; (4) Any other act fitted to deceive; (5) Any such act or omission as the law- specially declares to be fraudulent. Explanation. — Mere silence as to facts likely to affect the will- ingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is in itself equivalent to speech. 18. Misrepresentation means and includes — (1) the positive assertion, in a, manner not war- ranted by the information of the person mak- ing it, of that which is not true, though he be- lieves it to be true; (2) any branch of duty which; without an intent to deceive, gains an advantage to the person com- mitting it, or any one claiming under him, by misleading -^-another to his prejudice, or to [^ 702] the prejudice of any one claiming under him ; (3) causing, however innocently, a party to an agreement to make a mistake as to the sub- stance of the thing which is the subject of the agreement. [Sub-s. (21 seems hardly in place here. The framers of the draft Civil Code of New York, from which it is taken (g 758), appear to have generalized from BvlMey v. Wilford, 2 CI. & P. 102. That case, however, proceeds rather on the special duty of an agent, see p. 246 above; and the ratio decidendi is expressly that a professional agent shall not take advantage of his own ig- norance. There was also evidence and a finding of actual fraud.] 714 APPENDIX. 19. When consent to an agreement is caused by coercion, un- due influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. . A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the rep- resentations made had been true. Exception.. — If such consent was caused by misrepresentation, or by silence fraudulent within the meaning of section seventeen, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence. Explanation. — A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom siich misrepresentation was made, does not render a contract voidable. 20. Where both parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agree- ment is void. Explanation. — An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact. 21. A contract is not voidable because it was caused by a mis- take as to any law in force in British India; but a mistake as to a law not in force in British India has the same effect as a mis- take of fact. 22. A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact. Nothing is said as to the time within which a voidable con- r ^ 7031 tract -^ must be rescinded; the obligation to restore any advan- •- " J tage received under the contract is declared in ss. 64, 65; but it does not appear what is to happen if restitution is impossible; as to goods obtained under a voidable contract, the title of " a third person who before the contract is rescinded buys them in good faith of the person in possession " is secured by s. 108, exception 3, " unless the circumstances which render the contract voidable amounted to an offence committed by the person in possession or those whom he represents," a limitation which appears to be new; but no general principle is laid down as to rights of third persons intervening. S. 66 provides that ' ' the rescission of a voidable contract may be communicated or revoked in the same manner, and subject to the same rules, as apply to the communi- cation or revocation of a proposal." French authorities before Revolution. Note P. (p. 579). Foreign laws on undue influence and allied subjects. French jurisprudence has sometimes been cited in our Courts as affording useful analogies in cases where it was sought to set aside gifts on the ground of undue influence, especially spiritual influ- ence. (CEuvres d'Aguesseau, 1. 284, 5. 514, ed. 1819; Lyon v. Same, 6 Eq. 571.). Without denying the instructiveness of the UNDERVALUE IN FOREIGN LAW. 715 comparison it may be pointed out that these French cases pro- ceeded on rather different grounds. Charitable bequests in gen- eral were unfavorably looked on as being " inofficious " towards the natural successors. This principle is strongly brought out by D'Aguesseau in the case of the lietigieuses du Saint-Sacrement (CEuvres, vol. 1. p. 295): — " Ces dispositiones universelles, contraires aux droits du sang et de la nature, qui tendent a frustrer les heritiers d'une succes- sion legitime, sont enelles-memespeufavorables; nonqueceseul moyen soit peut-etre suffisant pour anea'ntir un tel legs: mais lorsqu'il est soutenu par les circonstances du fait . . . lorsque la donation est immense, qu'elle est excessive, qu'elle renferme toute la succession . . . dans toutes ces circonstances la justice s'est toujours elevee contre ces actes odieux; elle a pris les heritiers sous sa protection; elle a casse ces donations inofficieuses, exces- sives et contraires a Futility publique." In modern French practice a will may be set aside tor captation Modern law or suggestion. But, as with us, the burden of proof is on the f captation -^■objector to show that the testator's will was not free, and some- r .A. 704.]' thing amounting to fraudulent practice must be proved. "La L "* -I suggestion oe saurait etre separee," says Troplong, "d'un dol subversif de la libre volonte du testateur . . On a toujours ete tres-difficile en France a admettre la preuve de la suggestion et de la captation." (Droit civil explique, Des donations entre-vifs et des testaments, art. 492. On the other hand the Code Civil (art. 907, 909-911) contains > express and severe restrictions on dispositions by wards in favour of their guardians, and by persons in their last illness in favour of their medical or spiritual advisers. These apply alike to willa and to gifts inter vivos. The Continental enactments as to the effect of inadequacy of Continental consideration on a sale are derived from the rule of Koman law, j aw ag fa namely that a sale for less than half the true value may be set sa i es a t aside in favour of the seller unless the purchaser elects to make undervalue tip the deficiency in the purchase money: Cod. 4. 44.de resc. vend. -. ., , 2. " Rem maioris pretii si tu vel pater tuus minoris pretii dis- w ' traxerit, humanum est ut vel pretium te restituente emptoribus fundum venditum recipias, vel, si emptor elegerit, quod deest iusto pretio recipias. Minus autem pretium esse videtur, si nee dimidia pars veri pretii soluta sit." A less undervalue was not of itself a sufficient ground: C. eod. tit. 8, 15. The old French old French law adhered to this rule: Pothier, Obi. § 33. " On estime com- j aw munement enorme la lesion qui excede la moitie du juste prix, " id. Contr. de Vente, \ 330, sqq. Pothier however goes on to say that this does not apply to sales of reversionary interests (con trat de vente de droits successifs) nor to other speculative contracts (cohtrats aleatoires), on account of the difficulty of fixing the true value; nor to sales of moveable property: cp. id. de Vente, \ 341. Thus the rule and the exception, as touching: immoveable prop- erty, were just the reverse of our own law as it stood before 1868. The modern French Code fixes the undervalue for which a sale Code Civil (of immoveable property only) may be set aside at 7-12ths. It adds this important limitation, that a general presumption of undervalue must be raised by the circumstances alleged onbehalf of the seller before evidence of the actual existence and amount of the inadequacy can be admitted. There are also certain pre- cautions as to the kind of proof to be allowed. If undervalue to the prescribed extent is established the buyer has the option of 716 APPENDIX. submitting to a rescission of the sale or paying up the difference. (Code Civ. 1674-1685.) Nothing is said about sales of reversion- ary interests, but.it has been decided in accordance with the older law that the section does not apply to them: Codes Annotcs, 1 i" JL. 705] 798. "Ne sont -fcpassujettesa larescisiou pour lesion les ventes L * J snivantes . . . {inter alia} La vente de droits suceessifs, encore qu'elle spit faite a un (Stranger." And the provision applies in favour of the seller only (art. 1683). Any waiver of the seller's possible rights on this score, however express, is inoperative (1674). There are exceptional provisions for the case of " partage faitpar l'ascendant" (1079) and in favour of minors (1305, sqq.) Italian Code. The provisions of the Italian Code are in substance the same as those of the Code Napoleon (Codice Civile, 1529-1537). Prussian The provisions of the Prussian Code — Allgem. Landrecht, part Code. I. Tit, II. \\ 58, 59 ("Von der Verletzung fiber die Halite")— are substantially as follows: The objection that the purchase money is disproportionate to the value of the thing sold does not of itself suffice to avoid the contract. "But if the disproportion is so great that the purchase-money exceeds double the value of the thing sold, then this raises a legal presumption (rechtliche Vermuthung), of which the buyer may take advantage, of an error such as to avoid the contract." The buyer may by his contract waive the benefit of these pro- visions (§ 65); and the seller cannot in any case dispute the con- tract on the ground of undervalue. The reason of this appears to be that the judicial presumption is not of fraud, but of error, and that the vendor cannot be pre- sumed to be in error as to the value of his own property. The Austrian Code (|| 934, 935), following the extended in- terpretation of the Roman rule san ctioned by the prevailing modern opinion in Germany, see Vangerow, Pand. £611 (3. 326), enacts that inadequacy of consideration to the extent of more than one-half in any bilateral contract gives the party injured a right to call upon the other to make up the deficiency or rescind the contract at that other's option. This right may be waived beforehand, and the rule does not apply to judicial sales by auc- tion. Thus the French Code follows the rule of the Roman law, giv- ing the remedy to the seller only, but adds a qualifying rule of evidence which limits the remedy to cases where there is some ground of suspicion besides the undervalue itself. The Prus- sian Code reverses the civil law by giving the remedy only to the buyer, and the Austrian Code extends it to both parties, and to every kind of contract for valuable consideration. These dis- crepancies seem to favour the conclusion that the course our own law has always taken with respect to property in possession, and now takes (since the Act 31 Vict. c. 4) with respect to property _ AQ , * n revers i° n i ' s on tne whole the wisest. It is worth while to [ W 706 J observe that the Civil Code of Lower -fa Canada has altered the law of that province in the same direction, and declares without exception that personsof full age "are not entitled to relief from their contracts for cause of lesion only" (J 1012). On the other hand the question was considered in framing the Italian Code, and the rule of the civil law was deliberately adhered to. (Maz- zoni,Diritto Civile Italiano, 3. 357.) The different enactments we have mentioned may be thus re- capitulated: — Austrian Code. Observa- tions and summary. UNDERVALUE IN FOREIGN LAW. 717 Extent of Inadequacy of considera- tion giving right of res- cission. English Law. No distinction, j In possession. None. Nature of property. Moveable or In possession Immoveable or reversion. To -which party. French Code Immoveable and decisions only. thereon (fol- lowed by Italian Code). In reversion. (Before 1868) Any. (Since 1868) None, f In possession. 7-12ths (coupled with circumstances of presump- tion.) . In reversion. None. Seller. Seller. Prussian Code. Austrian Code. No distinction. No distinction. Over 1-2. Over 1-2. Buyer. Either party In any con- tract for valuable considera- tion. (718) INDEX. [The paging refers to the [*] pages. J ACCEPTANCE: of proposal, general but not universal form of agreement, 5. express or tacit, 9. by performing conditions of proposal, 12. when in time, 24. double, of same proposal, 28. must be communicated, 31. when the contract is made by correspondence: difficulties of the sub- ject, 31. theories in English authorities, 33. by post, effectual, though never delivered, 35. will not relate back to date of proposal, 37. must be unqualified, 38. examples of insufficient acceptance, 39. of sufficient acceptance, 40. with immaterial or ambiguous addition, 40. by conduct as well as by words, must be certain, 46 by receiving document with special conditions, 46. of misunderstood proposal, effect of, 432, 434, 435. ACCIDENT: destroying subject-matter of contract, effect of, 362, 367. ACCOUNT: action of, 141. ACKNOWLEDGMENT of debt barred by Statute of Limitation, 601. See Limitation. ACQUIESCENSE: cannot exist without knowledge, 399. as a bar to rescinding contract, 548. lapse of time as evidence of, 548, 549. in cases of undue influence, 595. may work estoppel in equity, 569. "ACT OF GOD": meaning of: no general definition possible, 366. ADVERTISEMENT: contract by, 12, sqq. such contracts not exempt from the Statute of Frauds, 22. AGENCY: general theory of, 50, 212. positions of actual or professed agent as regards principal, 95. contracts made by agents. 95, sqq. contract by authorized agent known to be such, 97. when agent is personally liable, 98. how agent's liability may be excluded or limited when he contracts in his own name, 99. contracts by authorized agent, but not known to be such, 100. rights of undisclosed principal, 100. rights of other contracting party, 101. election to sue principal or agent, 102. position of professed agent who has no authority: where » responsible principal is named, 103. (719) 720 INDEX. [The paging refers to the [*] pages. ] ' AGENCY— continued. where no responsible principal is named, 107. when professed agent may disclose himself as real principal, 108. effect of death of principal on subsequent contracts of agent before notice, 96. sub-agent appointed without authority is not agent of principal, 426. fraudulent misrepresentation or concealment of, 487. AGENT: authority of, its constitution aud'end, 96. corporation liable for wrongs of, in course of employment, 115. must not deal secretly on his own account in business of agency, 243. must not sell to or buy from himself, 244. must not profit by his own negligence, 246. must account to principal, notwithstanding collateral illegality in the transaction, 333. knowledge of, is knowledge of principal, 97, »., 101. statements of, how far binding on principal, 530. always liable for his own wrong, 533. AGREEMENT: denned, 1. void, what, 2, 7. consent,, how expressed, 1. analysis of, as accepted proposal, 4. See Acceptance; Proposal. no contract unless the terms are certain, 42. no contract where the promise is illusory, 44. of Lunatic not so found by inquisition (which see) not void, but void- able, 92. Unlawful (which see), CIi. VI. unlawful, the different classes of 232. See Unlawful Agreements. against Public Policy (which see), 271, sqq. See also Champerty; Marriage; Restraint of Teade. Impossible, 350, sqq. See Impossible Agreements. conditions affecting validity of consent, 390. See Mistake, &c. where there may be an apparent, but no real consent and no contract, 411. election to adopt, where originally void, 450. parol addition to or variation in terms of — effect as regards specific per- formance, 468. informal, execution of, may be good consideration or accord and satisfac- tion, 610. effect of part performance, 611. ante-nuptial, how far made binding by post-nuptial settlement, 613. Savigny's definition of, considered, 635. AGREEMENTS OF IMPERFECT OBLIGATION: their nature and effects, 597, sqq. conflict between lex fori and lex contractus, 603, 606, 625. general results as to, 634. ALIEN: wife of, when she can contract as feme sole, 82. enemies, disabled from suing here but not from contracting, 95. INDEX 721 [The paging refers to the [*] pages.] ANNUITY: agreement to give, charged on land, implies personal covenant for repayment, 2\!o. APOTHECARIES: cannot recover charges unless properly qualified at time of services, C23, 624, n. ARBITRATION: agreements for reference, now practically enforceable, 291. right of action may be conditional on award, 292. ARBITRATOR: can recover remuneration on express contract, 626. ARTIFICIAL PERSON: nature of, 110. partnerships and other bodies treated as, by custom though not by law, 112. separate estate of married woman, analogous to, 649. And see CORPORATION. ASSIGNEE: rights of, under contract, 206, sqq. takes subject to equities, 211. f . rule may be excluded by agreement, 213. ASSIGNMENT: of Contract (which see). 188, sqq. of pensions, &c. void, 287. ASSUMPSIT: action of, its introduction, 142. ATTORNEYS AND SOLICITORS. See Solicitor AUCTION: sale by, formation of contract in, 13. where sale without reserve, 15. effect of misleading particulars at, 502. employment of puffers at, 518. AWARD: whether stranger can be bound by, 193. mistake in, can be rectified only by the Court, 404. BANKRUPTCY : loan obtained by infant under pretence of full age, provable in, 78. anomalous effects of, on contractual rights, 197. secret agreements with particular creditors void, 240. laws, attempts to evade, 255. BARRISTER: fees of, for advocacy not recoverable from client, 626. for non-litigious business, qu., 627. fees paid by client to solicitor, whether recoverable by counsel, 628. judicial notice. of counsel's fees in taxing costs, 629. BILL OF EXCHANGE: infant's, not void but voidable, 58. is not an equitable assignment, 651, n. is an unconditional order in writing, 157. acceptance of, must be in writing and signed, 157. cheque is a, 21 9. And sec Negotiable Instruments. BILL OF LADING: transfer of contract by indorsement of, 224. is not properly negotiable, 227. effect of misdescription of goods in, 492. 46 PRINCIPLES OF CONTRACT. 722 INDEX. [The paging refers to the [*] pages.] BILLS OF SALE, 163. BOND: of infant, Voidable, not void, 53. with unlawful condition, void. 328. is absolute if the condition is impossible at the time, but discharged if it subsequently becomes impossible, 387. with alternative conditions, where one impossible, 388. of foreign government treated as negotiable instrument by English law, 220. • BRACTON: his theory of fundamental error, Note L. BROKERS: statutes affecting, 683. CANADA (LOWER): Civil Code of, 674. CANCELLATION of instruments by courts of equity, 552. CARGO: sale of, when previously lost, 371. "CATCHING BARGAINS": rules of equity as to, 584. what are marks of, 585. on what terms borrower relieved, 587. CAUSA: in Roman law of contract, 135. its relation to cause in modern French and consideration in English law, 137, 673. CHAMPERTY: definition of, 293. , what amounts to, 295. bargains to find means for litigation and share property recovered, 296. solicitor cannot purchase subject-matter of the suit from his client, 297. purchase of subject-matter of litigation, not in itself unlawful, 298. .statute of Henry VIII. against, 300. proceedings in lunacy exceptional, 302. not justified by kinship, 303. rules against, whether applicable to agreements made abroad, 345. CHARTER-PARTIES: express exceptions in, 373. conditions in, 489. CHEQUE: is a bill of exchange, 219. effect of crossing with words "not negotiable," 221. CHILDREN: right of, to enforce provisions for their benefit in settlements, 199. custody of, agreements as to, 304. CHOSE IN ACTION: wh.7 formerly not assignable, 206. early authorities on assignment of Note G. CIVIL DEATH, meaning of, 81, n. wife of person civilly dead can sue alone, 81. COERCION: contracts entered into under, voidable in equity, 392. money paid under, recoverable, though the transaction otherwise un- lawful. 3:J6. and though circumstances do not amount to duress, 555. INDEX. 723 [The paging refers to the [*] pages. ] COMPANIES ACT, 1862: company under, cannot bind itself by contract for purposes foreign to the memorandum of association, 127, 670. COMPANY: general powers of incorporated, 120. limited by special purpose of incorporation, 124. has prima, facie power to mortgage its property, 661. powers of directors, &c. limited by principles of partnership, 122. rights of dissenting shareholders, 123. how far third persons are bound to know limits of directors' authority, 123, 664. ratification of irregular transactions by assent of shareholders, 667. under Act, of 1862, incapable of contracting for purposes not within memorandum of association, 127, 670. ■when bound by negotiable instruments, 128, 130. And see Corporation. when bound by promoters' agreements, 192. unincorporated, power of, to sue by public officer, 199. transferable debentures, &c. issued by, 214. purchase of shares in order to sue company or directors at one's own risk is not maintenance, 300.> contract to take shares in, not void, but only voidable on ground of error, &c, 428. sale of shares in, avoided bv petition for winding-up unknown to parties, 442. duty of directors, &c. to state facts truly in prospectus, 508. duty of promoters to make full disclosure, 509. transfer of shares invalid when directors' consent obtained by fraud, 519. ■when bound by statements of directors, &c, 532. statements of prospectus addressed only to original shareholders, 534. repudiation of shares in, when too late, 433, «., 542, 546. (winding-up of) secret agreement to delay proceedings void, 290. COMPENSATION: for misdescription on sale of land, 497. ^ purchaser can recover after completion, 498. See Specific Performance. COMPROMISE: consideration for, 181. of criminal proceedings when lawful, 289. of civil proceedings, void when improperly procured, 290. cannot be set aside for mistake or oversight as to particular points of law, 407. by law of France must be in writing, 671. CONDITIONS: special, on ticket, &c, how far binding on party taking the docu- ment, 46. in restraint of marriage, 309. to be performed by stranger, must be performed at obligor's peril, 356. impossible or necessary, 384. treatment of impossible conditions in bonds, 386. alternative conditions where one becomes impossible, 388. representations amounting to, their nature and effect, 486, 488. CONDITIONS OF SALE: effect of, on right to compensation, 497. CONFIRMATION: of infant's marriage settlement, 58. And see Acquiescence. 724 INDEX. [The paging refers to the [*1 pages.] CONFLICT OF LAWS: as to lav/fulness of agreement, 339, sqq. how far foreign law will be admitted to decide lawfulness of agreement made abroad, 341. effect of change of law, 346. as to existence of remedy, 603, 606, 625. CONSENT: for legal agreement, requsites of, 2. ways of declaring. 4. to contract, conditions affecting validity of, 391. CONSIDERATION: general character of, 9, 167. gradual formation of the doctrine, 168. in contracts in writing, 169. promises founded on moral duty, 169. s past consideration, 170. adequacy not material, 172. doubt as to contingent consideration, 174. reciprocal promise as consideration, 175. promise must.be enforceable, 176. iow far promise to perform existing duty can be consideration, 177. how far required for discharge of contracts, 179. for variation of contracts, 180. abandonment or forbearance of rights, 180. forbearance must be definite and of a really disputed right, 182. application of the doctrine in equity to contracts under seal, 183. specific performance of voluntary agreement not granted, 183. external evidence of, 184. illicit cohabitation, if future, an unlawful consideration; if past, no con- sideration, 262. for agreement for separation, 266. for agreement in partial restraint of trade, sufficient if of some value, 315. unlawful, makes whole agreement void, 321. failure of, the true ground for recovering back compulsory payments, 556. inadequacy of, as evidence of fraud, 574. execution of informal agreement as, 610. forbearance to enforce racing debts in conventional forum, whether a good, 686. history of the doctrine of, Note F. CONSTRUCTION: % of contract not altered by mistake of parties, 402. rules of, common to law and equity: general intent prevails. 453. what is a rule of, 45G. peculiar rules of, in equity, 461, sqq. CONTRACT: definition of, 1, 7. voidable, what, 2, 8. tacit, distinct, from quasi-contract, 10. by performance of conditions of public offer or advertisement, 12,S3g.,21. legal theory of such contracts, 12. difficulties raised by the modern cases, 17. effect of Statute of Frauds on contract by advertisement, 22. by letter, when concluded, 35. conclusion of, may be postponed until execution of formal instrument, 41. capacity of parties to, 49, sqq. See Infants; Married Women; Lunatic; Corporation. INDEX. 725 [The paging refers to the [*] pages.] CONTRACT— continued. form of, 134. by foreign laws, Note E. , See Formal Contracts. procedure upon, in mediaeval English law, 139. consideration for discharge or variation of, 179. * persons affected by, 186, sqq. parties must be ascertained at time of contract, 187, 190. third persons not bound, 191. third persons not entitled by the contract itself, 200. third person cannot sue at law on contract made tor his benefit, 201. , strauger cannot sue for damage by non-performance of, 201, n. authorities in equity, 202. attempts to enable a stranger to sue for convenience of parties, 204. assignment of contract, 206. under Judicature Act, by rules of equity, or by special statutes, 207. rules of equitable assignment: notice to debtor, 209. what is meant by assignments being subject to equities, 211. assignment may be free from equities by agreement of parties, 213. instruments may be made transferable, 214. ~~ but not negotiable except by law merchant or statute, 216. nature of, in partnership with transferable shares, 221. in bill of lading, transferable by indorsement, 224, 227. Unlawful, Ch. VI. 'See Agreement; Unlawful Agreements. agreement to commit breach of, void, 237. forbidden by statute, 678. malum prohibitum and malum in se, 253. agreement may be not void though forbidden, 257. in restraint of trade. 310. to make disposition by will, good by English law, 309. unconditional, not excused by performance being in fact impossible, 360. when held conditional on performance being or remaining possible, 367, sqq. construction of certain exceptions providing for accidents. 373. dissolution of, by subsequent impossibility does not affect acquired rights, 378. See Impossible Agreements. effect of, not altered by mistaken construction acted on by party, 402. ambiguous, construction acted upon by parties will be adopted, 403. effect, of including property in, by mistake, 430. satisfaction by stranger, whether a bar to subsequent action upon, 423. personal, cannot be assigned, 425. in writing, cannot be varied by verbal agreement, 456. but may be verbally waived in equity, qu. whether at law, 457, n. apparent, where document not meant to operate as, 458. when voidable for Misrepresentation (-which see), 485, sqq. And see Rescission. representations of intention, not amounting to, can have no effect, 482. requiring stamp, variation of by subsequent unstamped agreement, 619 # CONVICTS: disabilities of, as to contracting, 94. COPYHOLDER: infant, must pay fine, 64. COPYRIGHT: assignments of, 164. CORPORATION: sole and aggregate, 112. can act only by agent, 114. ' cannot incur strictly personal liabilities, 114. 726 INDEX. [The paging refers to the [*] pages. ] CORPORATION — continued. but may be liable ex delicto for acts of its agents, 115. consequences of, the distinction of it from its existing members, 117. what is the presumption of common law as to general competence of, 119. powers of, how modified by rights of dissenting members, 121. by considerations of public policy as to purposes of incorporation, 124. and as to the interest of the public as investors, 126. cannot bind itself by negotiable instruments, 128. unless by special provisions or as a necessary part of its business, 129. bound by estoppel, &c, 131. contracts formerly required to be under seal, 146. exception as to contracts in course of trade, 149. in case of non-trading corporations as to contracts incidental to purposes of incorporation. 151. contracts of municipal corporations, 152. appointments to offices, 153. may sue upon executed contract though not originally bound, 154. liable on contract implied in law, 155. statutory forms of contract, 156. summary of law as to form of corporate contracts, 156. whether seal equivalent to signature for making negotiable instruments, 219. modern authorities on powers of. Note D. capacities incident to incorporation generally, 653. created for special purposes: meaning of ultra vires, 658. rights of dissenting shareholders to restrain action of, 663. power of officers to bind by apparently regular acts, 664. how far irregular transactions may be ratified by assent of all members, 667. CORRESPONDENCE : contract by, 31, sqq, complete by posting acceptance, 35. authorities on, Note B. COUNSEL. See Baeeistee. COVENANT: relating to real property, person not party may take benefit of, 200. when covenants run with land, 224. difference between common law and equity, 227. to pay money under unlawful agreement, void though distinct from the original agreement, 327. to exercise power by will, whether good, 310, «. CREDITORS: agreements in fraud of, 238. CUSTODY OF CHILDREN: agreements as to, how iar valid, 304. CUSTODY OF INFANTS' ACT, 305. CUSTOM: some contracts of infants binding by, 73. modern, may add to the law merchant, 220. CUSTOMS OF LONDON: as to infant apprentice, 73. as to married women trading alone, 82. certain securities taken by chamberlain go to successor, 113. as to leases, 142, ». DEATH: revocation of proposal by, 37. of principal, revocation of agent's authority by, 96. civil, 81. INDEX. 727 [The paging refers to the [*] pages.] DEBENTURES: transferable, rights of holder of, 214. DEBT: action of, in mediaeval English law, 140. assignment of, 209. DECEIT, ACTION OF: may lie against corporation, 115. what is ground for, 515. suits in former equity practice analagous to, 699. DEED: peculiarity of promises made by, 6, 48. of agent, principal not liable on, 98. treated by early English writers as equivalent to Eeman Stipulation, 137. why it cannot be written on wood, 144. whether within Statute of Frauds, 163. executed in error as to its contents, not binding, 413. executed in favour of wrong party, whether void, 433. DEPOSIT: recovery of, See Money Paid. DIRECTORS: of public companies, extent of their authority presumed to be known, 122, 661. power of, to bind company by statements, 531. how far third persons are bound to know whether particular acts are au- thorized, 665. DOMICIL: effect of law of, on validity of marriage, 250. DRUNKENNESS: effect of, on capacity of contracting, same as of insanity, 49, 87. contract of drunken man voidable, not void, 93. DURESS: what is, at common law, 553. when it consists in threats the threat must be of something unlawful, 554. recovery of money paid under compulsion, 555. EASEMENTS: new kinds cannot be created, 228. ECCLESIASTICAL LAW: influence of, on legal view of morality, 260. ELECTION: to avoid contract made in infancy, 59. to charge principal or agent, 102. to adopt agreement void for mistake, 450. And see RESCISSION. "ENGAGEMENT." See Sepaeate Estate. EQUITIES: undisclosed principal must take agent's contract subject to, 101. assignment of contract subject to, 211. but may be excluded by agreement of parties, 213. attaching to negotiable instrument, 221 . EQUITY: treatment of infants' marriage settlements in, 58. no specific performance of infant's contract, 59, 62. liability of infant in, of false representation of full age, 75. adopts rule of law as to acts of lunatic, &c, 92. what is good consideration in, 183. treatment of voluntary covenants and imperfect gifts in, 183, 184. 728 INDEX. [The paging refers to the [*] pages. ] EQUITY— continued. who may be bound by or may enforce contract in, 192, 203. assignment ot contract in, 207. notice to bebtor required, 209. assignee takes subject to "equities," 211. assignment "free from equities," 213. agrees with common law as to negotiable instruments, 218. doctrine of, as to covenants running with land, 227. will not protect copyright of seditious or immoral publications, 269. rules of, as to custody of infants, 304. doctrine of, as to unlawful agreements where parties not in pari delicto, 337. apparent difference from common law, as to repayment of money paid under contract when further performance become impossible, 379. contracts voidable in, on ground of fraud, &c., 392. rule of, as to purchase for value without notice, 398. will not deprive purchaser for value of anvthing he has actually got, 398, ». agrees with law as to recovering back payments made by mistake, 409. as to fundamental error avoiding agreement, 415. decisions in, on sales of land where parcels included by mistake, 430. on purchase of a party's own property by mistake, 444. correction of obvious mistakesin expression both at law'and in equity, 452. agrees with law in excluding parol evidence on questions of pure construc- tion, 457. oral waiver of written contract in, 457, n. restricted construction of general words in, 461. when time is of essence ot contract in, 463. relief against penalties in, 465. , admission of oral evidence as defence against specific performance of contract in writing, 468. Rectification of instruments in {which see), 470. sqq. supposed doctrine of, as to effect of "representations," 431, sqq. agrees with law as to creditor's duty to surety, 493. rules of, as to specific performance and compensation on sales of land, 496, sqq. suits analogous to action of deceit in, 516. former difference of, from law as to sales by auction, 518. rules of, as to loss of remedies by acquiescence, 548. jurisdiction of, to cancel instruments, 552. doctrine of, as to undue influence, 556, sqq, as to voluntary settlements generally, 564. as to supposed requirement of equality, 575. as to refusing specific performance on ground of undervalue, 577. as to "expectant heirs," 580. as to "catching bargains," 584 as to part performance of informal agreement,. 611. as to estoppel by representation or acquiescence, 612, 615. liabilities in, incidentally recognized at common law, 633. ESTOPPEL: corporations bound by, 131. of holder of instrument dealing with it as negotiable, 220. of party who has induced a fundamental error by misrepresentation, 448. of one party to instrument who act3 as other's agent in preparing it, 475. by negligence, whether applicable to deeds, 414, n. statements binding by way of, 482, 615. EVIDENCE: extrinsic, always admissible to show illegality of agreement, 328. INDEX. 729 [The paging refers to the [*] pages.] EVIDENCE— continued. subsequent conduct of parties may be evidence of original unlawful intention, 3:29. rules of, distinguished from rules of construction, 456. parol, not admitted to vary written contract, 4.VJ. of oral variation, admitted as defence to specific performance of written agreement, but not to obtain performance of agreement as varied, 468. oral, inadmissible to rectify instrument where there is previous agree- ment in writing, 471. but admissible, if uncontradicted, where there is ud previous written agreement, 472. EXCISE: statutes regulating trades, &c, subject ta laws, 683. EXECUTORS: general right and liability of, on contracts of testator, 191, n., 206. cannot sue or be sued on contracts of personal service, 189, 368, 374. or on contract to marry, 377, n. EXPECTANCY: sale of; not unlawful, 302. EXPECTANT HEIRS: protection of, by courts of equity, 530. FIDUCIARY RELATION: between contracting parties, effect of, 558. instances of, 559, 569. FORBEARANCE TO SUE: as consideration for promise, 181. FOREIGN LAW: foreign revenue laws said to to be disregarded, 281. as to stamps, effect of, 283. agreements lawful by, but not by law of forum, treatment of, 340. subsequent prohibition by, deemed to make performance of contract not unlawful but impossible, 346. contract rendered impossible of performance by, not discharged, 362. as to form of contract, Note E. on undue influence, &c, Note P. And see Conflict of Laws. FORFEITURE: relief against, inequity, 466. FORMAL CONTRACTS: their importance in ancient law, 133. position of formal and informal contracts in Roman law, 134. in old English law, 138. requirements of form now the exception, 145. contracts of record, 145. cases where form specially required, 145, sqq. foreign laws as to. Note E. See Corporations; Frauds (Statute of). FRANCE: law of, as to champerty, 345. FRAUD: of agent, corporation liable for, 115, 531. on third party, makes agreement void, 238, 241. on creditors in compositions, &c, 238. settlements in "fraud of marital right,' 1 247. dissimulation of unlawful purpose by one party to contract is, 336. lax use of the term in Chancery, 480. delivery of goods to wrong person obtained by, passes no property, 420, ?«., 545. how distinguished from misrepresentation, 511. 730 INDEX. [The paging refers to the [*] pages. ] FRAUD — continued. passive acquiescence in self-deception of other party is not, 514. what is fraudulent representation or concealment, 515. silence when equivalent to falsehood, 516. reckless assertions, 516. negligent ignorance, 517. special doctrine as to sales by aucfion, 518. marriage not avoided by, 519. transactions voidable when consent of third person obtained by, 519 rules as to rescinding contract for, how far the same as for simple mis- representation, 521. contract incidental to a fraud is itself fraudulent, 528. unfounded charges of, visited with costs, 505, 551. And see Rescission. FRAUDS, STATUTE OF: contracts by advertisement not exempt from, 22. as to special promise by executor, 157. as to guaranties, 158. as to agreements in consideration of marriage, 159. as to interests in land, 160. as to agreements not to be performed within a year, 160. as to the note or memorandum, 161. effect of note signed by one party only, 8. whether applicable to deeds, 163. foreign laws analogous to, Note E. on assignment of trust, 207. effect of, where writing does not represent the real agreement, 469. informal agreements within s. 4 not void: other wis* as to s. 17, 606. effects of informal agreements, 608. relation of, to equitable doctrine of part performance, 612. ante-nuptial agreements confirmed by post-nuptial writing, 613. FRAUDULENT PREFERENCE: agreements with particular creditors by way of, 238, 239. GAMING: securities for money won at, 259. treatment of gaming debts contracted abroad and not unlawful by local law, 343. GAVELKIND: conveyance by infant tenant in, 73. GENERAL WORDS: restrained by context or by intention appearing from external evidence, 461. GERMAN COMMERCIAL CODE: on formation bf contracts, 643. exempts commercial contracts from requirements of form, 672. extends rule of market overt, 397, n. GIFT: imperfect, not aided in equity, 184. acceptance of, as loan, effect of, 419. GOODS: order for delivery of may be assignable free from equities, but cannot be negotiable, 220, n. contract cannot run with, 224. effect of misdescription of, in bill of lading, 492. delivery of, to wrong person by mistake or fraud does not pass property, 545. And see Sale of Goods. INDEX. 731 [The paging refers to the [*] pages. ] GUARANTY: within Statute of Frauds, 158. voidable for misrepresentation or dissimulation to surety. 493. HORSES: sale of, in market overt, 164. HUSBAND AND WIFE. See Maeeied Women; Sepaeate Estate; Sepab- ate Property; Separation Deeds; Custody of Children. IGNORANCE: of law, may be material as excluding specific unlawful intention, 330, 347. does not in general exclude civil liability, 395. reckless or negligent, carries responsibilities of knowledge, 517. See also Mistake. IGNOBANTIA IUBIS: meaning of, explained by Lord Westbury, 445. ILLEGALITY: alleged, of contracts by companies tending to defeat purposes of incorporation, 125. And see UNLAWFUL AGREEMENTS. IMMORAL AGREEMENTS: void ; what are such, and what is immoral consideration, 260. agreement immoral iuf-e geniivm cannot be justified by any local law, 340. IMMORAL PUBLICATIONS: punishable by criminal law, and therefore no ground of civil rights, 269. IMPOSSIBLE AGREEMENTS: general statement of law as to, 350. agreement impossible in itself void: what is meant by impossibility for this purpose, 352. "practical impossibility" not equivalent to absolute impossibility, 354. repugnant promises, &c, 355. promisor's not having means of performance is not impossibility, 356. warranty of contingent acts or events, 356. agreement impossible in law, void, 357. promisor excused when performance becomes impossible by law, 357. performance being impossible in fact, no excuse in absolute contract, 360. impossibility by foreign law, no excuse, 362. effect of accident subsequent to contract: analogy of contract to pay rent when premises accidentally destroyed, 363. exception of accidents not contemplated by contract, 366, sqq. where performance depends on existence of specific thing, 367. where subject-matter destroyed without fault on either side, 368. state of things at date of agreement not contemplated by parties, 370. sale of cargo lost at dafe of contract, 371. construction of covenants in mining leases, 372. express exceptions in commercial contracts, 373. where performance of services contracted for depends on life or health of promisor, implied condition that life or health shall continue, 374. anomalous treatment of contract to marry, 376. impossibility caused by default of promisor, equivalent to breach o contract, 379. by default of promisee, discharges promisor, and he may recover loss or rescind the contract, 380. alternative contracts where one thing is or becomes impossible, 382. conditional contracts where the condition is or becomes impossible. 384. where condition of bond impossible, obligatipn is absolute, 387. otherwise where the condition subsequently becomes impossible, 387. ?32 INDEX. CThe paging refers to the [*] pages.] IMPOSSIBLE AGREEMENTS— continued. alternative conditions in bonds where one is or becomes impossible, 388. Indian Contract Act on impossible agreements, Note K. INDIAN CONTRACT ACT: its definitions of agreement, &c, Note A. on contracts of persons of unsound mind, 38, 94. on promises for past consideration, 171. on discharge of contracts, 180. on parties to contract by agent, 110. on knowledge of agent being knowledge of principal, 97, n. makes wagers void, 272, n. prdvisions of, as to unlawful agreements, Note I. provisions of, as to impossible agreements. Note K. does not adopt English rule of market overt, 397, n. on material common mistake avoiding agreement, 441. on time being of essence of contract, 464. abolishes distinction between penalty and liquidated damages, 467, n. on distinction of mere silence from representation. 515, n. on sales by auction, 518. on responsibility of principal for fraud of agent, 531. on inadequacy of consideration, 575. on coercion, undue influence, fraud, misrepresentation and mistake, NoteO. on rescission of voidable contracts, 703. INFANTS: generally cannot bind themselves by contract, 51. general statement of the law, 51. contracts of, voidable at common law: no real authority for holding them in any case void, 53. bonds, 53. trading contracts, 54. contracts of service, 54. leases, 55. sales of land, 56. partnership, 56. marriage, 57. marriage settlements, 57. negotiable instruments and accounts stated, 58. infant cannot have specific performance, 59. at what time he may avoid his contracts, 59. See Infants Relief Act. liable on obligations incident to property; leases and railway shares, 64. liable when contract for his benefit, 66. liable for necessaries, 67. what are necessaries, how ascertained, 68. liability ior necessaries on simple contract only, 72. what contracts infants can make by custom or statute, 73. not liable for wrong when the cause of action is substantially on a, con- tract, 74. whether liable on contract implied in law, 76. liable in equity for representing himself as of full age, 76. but not to prejudice of subsequent valid contract, 78. agreements between parents as to custody or education of, 304. INFANTS RELIEF ACT: makes certain agreements of infants void, 60. does not make ratification wholly inoperative, 61. effect of section 1 , . 63. effect since the Act of affirming agreement voidable at common law, 630 INDEX. 733 [The paging refers to the [*] pages.] ] INSANITY. See Lunatic. INSURANCE: contract of, liberally construed in favour of true intention, 474. INSURANCE (FIRE): contract of insurers to reinstate is unconditional after election made, 3(if). effect of, as between landlord and tenant, 364. implies condition that property is correctly described, 492. INSURANCE (LIFE): no such duty of disclosure as in marine insurance, 400. INSURANCE (MARINE): must be expressed in policy, 164. seamen's wages not insurable at common law, 306. where voyage illegal to knowledge of owner, void, 324. voidable for material misrepresentations or non-disclosure, 489. stamped policy required by statute, 616. the "slip " nevertheless recognized for collateral purposes, 617. the rights of the parties determined at the date of the slip, 618. statutory provisions as to, 683. KNOWLEDGE: how far material on question of unlawfulness of agreement, 348. means of, as affecting right to rescind contract for misrepresentation, 525. LAND: Statute of Frauds as to sale of interest in, 160. what covenants run with, 224. And see Sale of Land. LANDLORD AND TENANT: covenants running with tenancy or reversion, 224. lessor cannot resume possession actually delivered on discovering un- lawful purpose or fraud of lessee, 323, 513. but may rescind if possession has not been delivered, semble, 324. rent payable though premises accidentally destroyed, 363. lessor is not bound to inform lessee of state of premises, 506. statutes affecting contracts between, 684. LAW MERCHANT: peculiarities of, as to negotiable instruments, 217. not invariable, 220. LEASE: of infant at common law. voidable, 55. statutory powers of infants to renew and make, 73. covenants in, when they run with land, 224. Statute of Frauds as to, 160. of tenements for unlawful purpose, no action on covenants, 323. for lives, effect of contract for sale of, 446. LEX LOCI: marriage of domiciled British subjects wherever celebrated, governed by English law, 250. requirement of stamp, how treated in foreign court, 283. by what local law the lawfulness of an agreement is determined, 339. LIMITATION, STATUTES OF: ' promise or acknowledgement by married woman cannot revive barred debt, 80 promise to pay debt barred by, 165. debts not extinguished, 599. money paid by debtor without particular directions maybe appropriated to satisfy barred debt, 600. 734 INDEX. [The paging refers to the [»] pages.] LIMITATION, STATUTE OF— continued. executor may pay barred debt of testator, 600. barred debt cannot be set off, 600. but statute must be pleaded, 600. right of action restored by subsequent acknowledgment, 601. acknowledgment operates as new promise in case under statute of James, 601. otherwise of specialty debt under stat. of William IV., 602. applied according to lex fori, not lex contractus, 603. LIQUIDATED DAMAGES: distinction of, from penalty, 467. LONDON: custom of, as to infant apprentice, 73. ' as to married women trading alone, 82. LUNATIC: marriage of, void, 87. so found by inquisition, incapable of acts in the law, 87. liable for necessaries, 87. contracts in lucid intervals and contracts prior to lunacy good, 88. contract of (not so found by inquisition), in general voidable not void, 38, 93. history of different doctrines on the subject, 88-93. contract of, why only voidable though he has no agreeing mind, 418. MAINTENANCE: attempts to oppose equitable assignments on ground of, 206. definition of; it includes champerty, 293. what amounts to, 295. statute of Henry VIII. against buying pretended titles, 300. what dealings are within the statute, 301. no maintenance without unlawful intention, 302. inay be justified by kindred or affinity, 303. MAJORITY: abuse of corporate powers by, 664. MALUM PROHIBITUM and malum in se, 253. MARITAL EIGHT: settlements in fraud of, 247. MARKET: sale of horses at, overt, 164. overt, provisions of German Code as to, 397, n. MARRIAGE: of infants, 57. promise of, infant may sue but is not liable on, 57. of lunatics, void, 87. agreements in consideration of, 159, 188. within prohibited degrees, void, 249. whether valid in England if invalid by law of party's domicil, 250. of members of Royal Family, Act regulating, 250. agreements in general restraint of, void, 307. conditions in restraint of, 308. polygamous, not recognised by English Divorce Court, 341. illness unfitting for, does not avoid contract to marry, 376. contract to marry not uberrimx fidei, 510. not rendered invalid by fraud, 511, 519. informal agreements in consideration of, how far made valid by post- nuptial settlement, 613. MARRIED WOMEN: at common law cannot contract, 79. INDEX. 735 [The paging refers to the [*] pages.] MARRIED WOMEN— continued. acquisition of things in action by, 79. renewed promise by, cannot revive barred debt, 80. exceptions to incapacity: queen consort, 81. wife of person civilly dead, 81. " of alien who has never been in England, 82. custom of London as to sole trader, 82. effect of Act of 1882 thereon, 8:3, n. exceptional contracts with husband as to separation, 83, statutory exceptions, judicial separation, &c, 83. equitable doctrine of separate estate {which see), 84. Married Women's Property Act, 1882, . . 85. as to debts contracted during coverture, qu., 86. settlements of, in fraud of marital right, 247. interests of, may be bound by equitable estoppel, 615. And see Separate Estate and Separate Peopeety. MAXIMS : alteri stipulari nemo potest, 673. in pari delicto potior est condicio defendentis, 332. locus regit actum, 346. non videntur qui errant consentire, 393. nulla voluntas errantis est, 399. ignorantia iuris haud excusat, 445. mala grammatica nou vitiatchartam, 453. expressio unius est exclusio alterms, 455. verba accipiuntur fortius contra proferenten, 501. MEDICAL PRACTITIONERS : regulations of Medical Act as to their right of remuneration, 623. conditions precedent to recovering charges, 625. presumption of influence in gifts, &c, from patients, 571. MINES : construction of unqualified covenants to work, 372. MISREPRESENTATION : producing fundamental error, effect of, 448. fraudulent or non-fraudulent, 479. non-fraudulent, conditions under which it can affect validity of con- tract, 481, 485. distinction of it from mere non-disclosure, 495, 526. special rules as to, in contracts of insurance, 489. in contract of suretyship, 493. in contract for sale of land, 495. rules of equity as to performance with compensation, 496. duty of vendor to describe property correctly, 502. — in family settlements, 507. in partnership and contract to take shares, 507. in contract to marry, 510. when it is an actionable wrong, 515. ■where party misled has means of knowledge, 525. immaterial, in cases of active representation, unless he uses his means and acts on his own judgment, 525. rights ot party misled, 521. . And see Rescission. MISTAKE : distinction of from Fraud, 391, 392. in private law has not as such any universal consequences, 394. does not as a rules avoid liability, 395. certain exceptions to this for protection of persons acting under judicial process, 396. 736 INDEX. [The paging refers to the [•] pages.] MISTAKE— continued. sometimes a condition of title : purchase for value without notice, 397. does not as a rule alter existing rights of the party or of other persons : instances of misdelivery of goods and payments to wrong persons, 400. mistake in construction by parties does not alter contract, 402. special cases where it is of real importance, 404. mistake ol fact and of law, 405. the distinction is really of limited application, 400. cases of compromise, &c, 40(5. the distinction does apply inflexibly to recovering back money paid by mistake, 409. and in equity as well as at law, 409. mistake excluding true consent, 411. different kinds of fundamental error, 412. as to nature of transaction, 413. as to its legal character (as whether sale or gift), 419. mistaken delivery of money, &c , passes no property, 420, n. as to person of the other party, 420. as to subject-matter of the contract, 427. herein as to the specific thing, 429. as to nature of company in which shares are taken, 432. or as to kind, 433. as to quantity or price, 434. or other material attribute of subject-matter, 430. when error must be common to avoid agreement, 438. as to existence of subject-matter, 441. agreements to purchase or pay rent for property really one's own, 444. where fundamental error produced by misrepresentation. 447. rights and remedies of parties, where agreement void for fundamental error, 449. election to adopt agreement, 450. mistake in expression of true consent, 451, sqq. correction of obvious mistakes by ordinary construction, 452. restriction of general words, 454, 461. in expression of contract, a bar to specific performance, 467. Rectification of instruments on ground of (which sec), 470. Bracton's treatment of fundamental error, Note L. MONEY PAID: by infant under voidable contract, cannot be recovered after contract executed. 60. under Unlawful Agreement (which see) when it can be recovered back, 332, sqq. in actual ignorance of fact though with means of knowledge, recover- able, 409. with knowledge of facts, though under mistake of law, not recoverable (except mistaken payment by officer of court), 410. cannot be recovered back where former state of things cannot bo re- stored, 543. under compulsion, recoverable, 555. under informal agreement within s. 4 of Statute of Frauds, not recover- able, 609. for small debts within Tippling Act, not recoverable, 63'). MONEY RECEIVED: action for, lies against corporation, 155. MORTGAGES: treatment of, in equity, 466. the Court will treat nominal sale as, if such is true intention, 466. INDEX. 737 [The paging refers to the [*] pages.] NECESSARIES: liability of infant for, 67, sqq. the liability is on simple contract only, 72. what are, a question of mixed fact and law, 68. existing supply how far material, 69. apparent means of buyer not material, 70. not confined to goods, 71. liability of lunatic for, 87. NEGLIGENCE: of agent, corporation answerable foi as well as natural person, 115. estopped by, extent of, 414 n. agent must not profit by his own, 246. does not exclude right to rescind for misrepresentation, 525. NEGOTIABLE INSRUMENTS: must be in writing, 157. of infants, voidable, 58. payable to treasurer, &c, of a society for time being, bad, 205. peculiar qualities of, 217. ' what can be admitted as, 219. bonds of foreign government treated as such by English law, 220. how they cease to be so, 221. corporations in general cannot issue, 128. in what cases they can, 130. principal bound by acceptance of agent though not in principal's name, 99. the holder of, cannot make title through forged indorsement, 399. signature of, in error as to nature of instrument, not binding, 414. And see Bill of Exchange. NOTICE: assignee of married woman's separate property with, bound by engage- ment affecting it, 650. to debtor, of assignment of contract, 188, 209. purchase for value without, 226, 397. NOVATION: its nature explained, 193. NUDU31 PACTUM: in Roman law, 136. change in the meaning of the term iu English use, 676. OFFENCE: agreement to commit, void, 235. compounding of, 288. OFFER. See Proposal. OFFICES: appointments to, by corporations must be under seal, 153. sale of unlawful, 286, 305. PAR DELICTUM: doctrine of, 332. oualifications of and exceptions to it, 333, 336. PARCELS: mistake as to, in sales of land, 430. PART PERFORMANCE: equitable doctrine of, 131, 611. PARTIES: to contract, rules as to. 187. to action on contract made by agent, 95, sqq. 47 PRINCIPLES OF CONTEACT. 738 INDEX. [The paging refers to the [«] pages. ] PARTNERSHIP: contract of shareholder in company, a modified contract of. 121. shares in, transferable at common law, 221. release in deed of dissolution cannot be disputed by party after concern completely wound up, 543. PENALTIES: imposition of, by statute, implies prohibition, 253. relief in equity against, 465. and liquidated damages, 466. PERSONAL CONTRACTS: implied condition in, as to life or health of party continuing, 374. not assignable, 188. PHYSICIANS: rights of. as to payment for services at common law, 623. under Medical Act, 623, 625. POST OFFICE: whether common agent of parties in correspondence by letter, 34, 401. PRINCIPAL AND AGENT: principal when liable on contracts made by agent, 97, sqq. rights of undisclosed, 100. right to countermand unexecuted authority, 335. sub-agent not agent of principal, 426. principal not liable if exclusive credit given to agent, 102. agent's authority determined by death of principal, 96. when professed agent may declare himself as real principal, 108. principal when answerable for representations of agent, 530. agent always liable for his own wrong, 533. And see AGENCY. PROMISE: definition of, 1. • by advertisement or general announcement, nature and limits of, 12. by deed, binding without acceptance in English law, 6, 48. illusory, 44. inferred in fact or implied by law, 10. founded on moral duty, not binding without valuable consideration, 169. to pay for past services rendered on request, 170. too vague to be enforced, 176. how far promise to perform existing duty can be consideration, 176, 178. to several, whether one can sue on. 204. See Acceptance ; Agreement. PROMISES: in same instrument, where some lawful and some not, 321. PROMOTERS: agreements of, when binding on company, 192. fiduciary position of, as regards company, 560, n. statements of, may become statements of company, 532. PROPOSAL: as generally cannot repudiate after commencement of winding-up 546 must be diligent in repudiation, 550. SHARES: transfer of, 165, 222. sale of, after winding-up, not enforceable, 442, 447. error in numbers of, not material, 433. SHIPS: transfer of, 164. SIMONY: purchase of next presentation, 684. SLAVERY: American opinions as to effect of abolition of, on prior contracts, 270. coutract for sale ot slaves in slave country, not void in England, '342.' statutes against slave trade, 685. "SLIP:" in marine insurance, effect of, 165. SOCIAL DUTY: whether agreement against, void, 306. SOLICITOR: what agreements with client are bad for champerty, 297. purchase of subject-matter of suit, by, 297. costs of uncertificated solicitor not recoverable, 621. how soon costs may be sued for, 622. special agreement with client, 629. statutes affecting, 685. SOLICITOR AND CLIENT (contracts between): how affected by the rules of law against champerty, 297, 685. allowed by statute, 629, 568. presumption of influence in contracts between, 566. SOLICITORS' REMUNERATION' ACT: as to agreements between solicitor and client, 629. SPECIFIC PERFORMANCE: not granted at suit of infant, 59. nor since Infants' Relief Act of any contract made during infancy, 62. against married woman's separate estate, 649. of contract by railway company to purchase land, 660.^- refused against purchaser who bid for wrong lot, 430. refused in certain cases where contract ambiguous or description excus- ably misunderstood, 432. refused where instrument sued on does not express the real agreement 467. with compensation, on sale of land, 496. at suit of either party where misdescription not substantial. 497. at purchaser's option where substantial and capable of estimation, 497. where misdescription substantial and not capable of estimation, option only to rescind or to affirm unconditionally, 499. when vendor can make good his description, 500. whether it can be refused for undervalue alone, 576. whether not enforceable where collateral representation not being a term of the contract or amounting to a distinct contract has not been fulfilled, 697. 744 INDEX. ["The paging refers to the [*] pages.} SPIRITS: statutes affecting sale of, 685. SPIRITUAL INFLUENCE: its relation to undue influence. 571. treatment of, by French law, Note P. STAMPS: effect of foreign laws as to, 283. unstamped document when admissible as evidence, 619. variation of contract by subsequent unstamped agreement, 619. STATUTE OF FRAUDS. See Feauds, Statute of. STATUTE OF LIMITATION. See Limitation, Statutes op. STATUTES: construction of prohibitory, 251, 253. what is meant by policy of, 252. particular occupations, &c, regulated by, Note H. "STIFLING PROSECUTION," 288. STIPULATION: in Roman law, 134. STRANGER: to contract, cannot- sue on it, 204. satisfaction of contract by, whether it bars action, 424. SURETY: when discharged by subsequent dealings between creditor and debtor, 241. entitled to benefit of securities, 243. discharged by misrepresentation or concealment on part of creditor, 493. but creditor not bound to volunteer information, 495. "SURPRISE": whether a ground of relief against contracts, 590. SWISS FEDERAL CODE: on contract by correspondence, 644. TALLIES: former use of, 144. THIRD PARTIES: cannot sue on contract, 200. apparent exceptions to this rule, 202, sqq. fraud on, vitiates contract, 237. wrong to, not presumed, 240. instrument not rectified against interests of, 474. TIME: when of essence of contract in equity, 463. may be made so by express agreement, 463. TIME-TABLE: effect of statement in, 15. TIPPLING ACT: small debts for spirits made not recoverable by, 630. TRADE: contracts of corporations in course of, need not be under seal, 149. agreements in restraint of. See Restraint op Trade. TRADE UNIONS: agreement for strike not enforceable, 31 0. but since Act of 1871. not punishable, 310, n. certain agreements of, lawful but not enforceable, 631. TRADING WITH ENEMIES: without licence from crown, illegal, 278. contracts dissolved or suspended by war, 279. neutral trade with belligerents not unlawful, 281. INDEX. 745 [The paging refers to the ["] pages.] TRESPASS: agreement to commit, void, 237. TRUSTEES: notice of assignment to, 210. must account to cestuis que trust notwithstanding collateral illegality, must be impartial as between cestuis que trust, 572. TRUST: how far in the nature of contract, 197. assignment of, 207. agreement to commit breach of, void, 237. UNDERVALUE: does not itself avoid contract, but mav be evidence of fraud, &c., 573. whether specific performance can be refused for, 576. treatment, of in foreign law, Note P u UNDUE INFLUENCE: what is, 557, sqq. presumed from certain relations, 558. burden of proof in such cases, 559. presumption does not extend to wills, 560. supposed general rule as to voluntary donations, 562. voluntary settlements when set aside, 563. influence once shown presumed to continue, 565. purchases by solicitor from client, 566. duty of persons in fiduciary relations, 566. Indian Contract Act on duty of party contracting in loco parentis, 567, n. no presumption against "family arrangements," 568. particular relations where influence presumed, 569. relations analogous to parent and child, 569. " " solicitor and client, 570. spiritual influence, 571. apart from fiduciary relation, 572. undervalue, how far material, 573, sqq. , by foreign laws, 704. protection of expectant heirs, &c, 579, sqq. rules of equity as to "catching bargains," 584. sales of reversionary interests by persons in dependent position, 589. "surprise," &c, as evidence of, 590. rescission of contract for, 594. whether material if exerted by stranger to the contract, 595. effect of confirmation or delay, 595. doctrine of captation in French law, Note P. UNLAWFUL AGREEMENTS: general classification of, 232. to commit offence, &c. , 235. to commit civil wrong, 237. in fraud of creditors, 238. for marriage within prohibited degrees, 249. so made by prohibitory statutes, 251. agreements contrary to Public Policy (which see), 271. general rules as to treatment of them, 319, sqq. where promises are independent, the lawful ones enforceable, 320. unlawful consideration avoids whole agreement. 321. where immediate object unlawful, agreement void, 322. ulterior unlawful intention of both parties, or of one known to the other, makes agreement void. 322. effect of intended unlawful use of subject matter of contract, 323. 746 INDEX. [The paging refers to the [*] pages. } UNLAWFUL AGREEMENTS— continued. innocent party may rescind on discovering unlawful intention of the other, 324. agreements void as part of unlawful scheme, though subsequent to the unlawful act, 325. securities subsequently given for payment of money under unlawful agreements, void, 328. illegality may always be shown by extrinsic evidence, 329. where immediate object not unlawful, unlawful intention must be shown to have existed at date of agreement, 329. the parties' knowledge or ignorance of the law may be material for this purpose. 330. unlawful intention not to be presumed, 331. when payments under, can be recovered. 332. rule that party in pari delicto cannot recover, 332. collateral illegality does not aflect duty of agents to account to princi- pals, 333. money recoverable where agreement not executed, 335. unless manifestly repugnant to justice or morality, 335. where payment not voluntary, or parties otherwise notinpari deliclo,336. conflict of laws as to lawfulness: what local law governs, 339. contract ior sale of slaves made and to be performed in a slave state is recognized in English courts, 342. conflict of laws in time: contract dissolved by performance becoming unlawful, 346. whether, in absence of original unlawful intention, an agreement may become valid by performance becoming lawful, 347. statutes forbidding or regulating particular contracts collected, Note H. Indian Contract "Act on, Note 1. USURY LAWS: repeal of, has not altered doctrine of "catching bargains," 581. its effect on subsisting loans, 632. VARIATION: oral, of written contract, available for defendant but not for plaintiff, 468. VENDOR AND PURCHASER. See Sale of Land; Specific Pebfoemance. VIS MAJOR : meaning of, 366. VOID AND VOIDABLE: distinction between these terms, 7. confusion between the terms, 53. contracts of infacts at common law voidable, not void, 58. contracts of lunaticss when void or voidable, 87, 92. agreement may be void without being forbidden, or rice versi, 257. deed void in part by statute, not necessarily void altogether, 321. / contract depending on personal skill, &c, made void, not voidable by subsequent disability, 376. in some cases agreement may be void as against third persons but void- able as between the parties, 448. VOLUNTARY COVENANT: specific performance of, not granted, 184. VOLUNTARY DEED: not rectified against grantor, 477. And see Undue Influence. VOLUNTARY GIFT OR SETTLEMENT: question as to burden of proof on donee, 562. readily set aside, 563. power of revocation not necessary to validity of, 564. INDEX. 747 [The paging refers to the [•] pages.] WAGERS : void by statute, but not illegal, 258. former treatment of them at common law, 271. parties repudiating, may recover deposit from stakeholder, 335. authorities as to, 685. WAGES: statutory enactments as to payment of, 686. . WARRANTY: implied, of agent's authority, 106. implied in contract to marry. 106. effect of, as distinguished from condition, 486. implied, on sales of goods, 4:29, it. express, on sales of goods, 487. WEIGHTS AND MEASURES : statutes regulating, 686 WILL : covenant not to revoke, not broken Vy subsequent marriage, 308. contract to make disposition by, lawful, 310. execution of wrong document as, wholly inoperative, 415, n. presumption of undue influence never applied to, 560, n. cannot be rectified, but general intention may take effect against par- ticular words, Note M. WINDING-UP: • secret agreement for conduct of, void, 290. right to proceed with creditor's petition for, not saleable, 299. shares cannot be repudiated after, 539, 546. of insurance companies, application of prohibitory stamp laws to poli- cies, 619. WRITING: contracts in, not a special class in English law, 169, n. THE END OF SECOND SERIES. Phila. : Blackstone Pub. Co. '•-!>'£