OJornfll ICam i>rt|nnl Blibtatg Cornell University Library KF 801.Z9H47 A treatment of the fundamental principle 3 1924 018 828 651 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018828651 r^. A Treatment of the Fundamental Principles of the LAW OF CONTRACT With Digests of Cases Contained in Keener's and Williston's Casebooks Gompiieti By CARL HELM, l.L.B. NEW YORK CITY, I9I4 A Treatment of the Fundamental Principles of the LAW OF CONTRACT With Digfests of Cases Contained in Keener's and Williston's Casebooks Compiled By CARL HELM, LL.B. New York City, 1914 ' ^ Copyright, 1914, By CARL HELM, LL.B. INTRODUCTORY NOTE. The preparation of this treatment of the fundamental princi- ples of the Law of Contract was prepared for the purpose of assisting legal students in their study of this subject by the case system and to afford a thorough, concise review for graduates and practitioners. The system usually followed in presenting the material herein contained is, first, to raise the question or issue involved by sup- posititious cases; second, to present digests of the leading cases bearing upon such issues; and third, to follow these with a thor- ough, logical treatment of the same, first, with a view to presenting the true principles involved, and second, with a statement of the law as it is. The arrangement of topics and of cases discussed is taken from Keener's collection of Cases. It is earnestly recommended that the legal student first care- fully read and digest the decisions to be treated as they are presented in Keener's and Williston's Casebooks, before proceeding with the treatment given them herein. This book was developed out of the writer's work on the subject while a student at Columbia University under Professor Charles T. Terry, supplemented by researches into the works of Langdell, Keener, Anson, Leake and Ashley. New York City, Jan. 1, 1914. CARL HELM. TABLE OF CONTENTS. PAET I. FORMATION OF CONTRACTS. ; CHAPTER I. PAGE SIMPLE CONTRACTS 1 Section I— OFFER AND ACCEPTANCE 3 (a) Necessity of Intention to Create a Legal Obligation 3 (b) Effect of Mistake 5 Rights of Third Parties 5 Estoppel 6 Fraud 7-8-9 (c) Necessity of Communication of Offer and Acceptance 13 (d) By Whom Offer Must Be Accepted 37 (e) Necessity of Certainty of Terms 37 (f ) Acceptance Must be in Terms of Offer 41 (g) Termination of Offer by Revocation 43 (h) Termination of Offer by Lapse of Time 51 (i) Termination of Offer by Counter-Offer or Modified Acceptance 53 (j) Termination of Offer by Death or Insanity 53 Section II— CONSIDERATION. Nature of 55 (a) Distinction Between Motive and Consideration 57 (b) When Consideration is Necessary 59 (c) Surrender of Right as a Consideration 63 (1) Early History 63 (2) Specific Cases 65 (3) Consideration v. Acceptance 70 (4) Subscription and Composition Agreements 75 (d) Performance of, or Promise to Perform a Contract Obligation, as a Consideration 77 (e) Performance of, or Promise to Perform a Non-Con- tract Obligation, as a Consideration 92 (f) Forbearance to Sue or Compromise, as a Consider- ation for a Promise 94 (g) Antecedent Act or Agreement as a Consideration.. 100 (h) Moral Obligation as a Consideration 106. CHAPTER II. CONTRACTS UNDER SEAL. Section I— Signing and Sealing 112 Section II — Delivery 112 viii Table of Contents PAGE Section III — Consideration 116 Distinction Between Want of Consideration and Failure of Consideration 118 PART II. OPERATION OF CONTRACTS. CHAPTER III. RIGHTS AND LIABILITIES OF THIRD PERSONS. Section I— BENEFICIARIES 121 Section II— ASSIGNEES 130 (a) By Act of the Parties 130 (b) By Operation of Law 143 Under Entire and Under Severable Contracts 144 CHAPTER IV. JOINT AND SEVERAL CONTRACTS 150 Summary 157 CHAPTER V. CONTRACTS PERFORM ABLE IN THE ALTERNATIVE. . 159 Summary 161 CHAPTER VI. CONDITIONAL AND UNCONDITIONAL CONTRACT. Section I — Conditions Precedent or Concurrent 164 (a) Express or Implied in Fact 164 Warranty Distinguished 166-175 Defendant's Satisfaction as a Condition 188 Production of Certificate as a Condition 189 Valuation as a Condition 193 Agreement to Arbitrate v. Condition of Arbitration . . 193 (b) Conditions Implied in Law 195 Breach in Limine 206 Breach After Part Performance 206 Breach of Instalment to Pay and Breach of Instal- ment to Deliver 213 In re Strict Performance of Conditions 214 Obligation Distinguished from Condition in Same Promise 215 Section II — Conditions Subsequent 218 Section III — Waiver of Performance of Conditions 223 Anticipatory Breach . 225 Tahle of Contents ix PAGE SiiCTKix IV — Unconditional Contracts 231 CHAPTER VII. Remedy for Breach of Contract 239 PART III. DISCHARGE OF CONTRACTS. Rescission 51 Novation 125 Accord and Satisfaction 82 Release 78-117 TABLE OF CASES. A. Page ,- Abbott V. Doane 91 Adams v. Kuehn 124 Adams v. Lindsell, 15-16-20-21-22-23-24-25- 26-27-28-23-30-31-32-33-35-36 - Aller V. Aller 116-117 Alliance Bank, The, v. Broom 97 Anderson v. Martindale 155 Anonymous 95 Appleby V. Johnson 41 Arend V. Smith 91 Arkansas Smelting Co. v. Bel- den Mining Co 132-133 Armitage v. Insole 182-183-184 Atkins and Wife v. Hill 106 Atkinson v. Settree 92 Ayres V. The C, R. I. & P. Ry. Co 85-86-87 B. Bagge v. Slade 78-79 Balnbridge v. Firmstone 66 - Baker v. Holt 41 Bankart v. Bowers 204 Barnes v. Hekla Fire Insur- ance Co 130 Bartlett v. Wyman 83-84-88 Batterbury V. Vyse 190 Baxter v. Burfield 143 Bay V. Williams 127 Beach v. The First IVIethodist Episcopal Church 54 Beaumont V. Reeve 108 Beckham v. Drake, Knight & Surgey 143-144 Beecham and Smith v. Smith. 151-152 Beecher v. Conradt 234 Behn v. Burness, 173-174-175-176-177-178-179 Bellows V. Sowles 98-99 Bettini V. Gye 215-216-217 Bidder v. Bridges 81-82-83 Birks V. Trippet 187-188 Bishop V. Eaton 34-35-36 Blake & Co. v. Hamburg Bre- men Fire Insurance Co 30 Blewitt V. Boorum 113-114 Blossom V. Dodds Express Co. 10-12 Boit & McKenzie v. Maybin. .33-34 Boone v. Eyre 212-233 Borden v. Boardman 129 Boston Ice Co. v. Potter 37 -Boston & Maine Railroad, The, Page V. Bartlett 45 Boulton V. Jones 9-37-53-131 Boylan v. Hot Springs Rail- road Co 9 Bradburne v. Bradburne 70 Bradford v. Roulston 103-105 Bradford v. Williams 215 Brauer v. Shaw 50-51 Brice v. Bannister, 131-134-135-136-140-143 Brill V. Tuttle 134-135-136 British Wagon Co., The, and The Parkgate Wagon Co. v. Lea & Co 132-133 Brooks V. Ball 66 Brooks V. Haigh 66-67 Brown v. Foster 188-189-190-191 Buck V. Manhattan Life In- surance Co 221 Byrne & Co. v. Van TIenhoven & Co 47-48-49-50 Cadwell & Blake 172-173-205 Cage v. Acton 219 -Callisher v. Bischoffsheim 98-99 Callonell v. Briggs 167 Campbell v. Jones 233-236 Campbell v. Lacock 122 Candor and Henderson's Ap- peal 116 -Carlill V. Carbolic Smoke Ball Co 70 Carter v. Nichols 134 Chamberlain v. Williamson. .143-144 Chicago & Great Eastern Rail- way Co., The, V. Dane 39 Chicago, Santa Fe & California Railroad Co. v. Price 191 Chism V. Schipper 191-192 Choice V. Moseley 160 Christie v. Borelly 236 Clark V. Fey 210 Clarke v. Watson 190-191 Cline & Co. v. Templeton 98-99 Coleman v. Applegarth and Bradley 48-49 Consumers' Ice Co. v. Brewster 7 Cook V. Wright 97 Cooke V. Oxiey 32, 44, 49 Cort & Gee v. The Ambergate, Nottingham & Boston & Eastern Junction Railway Co. 228 Xll Table of Cases Page Couturier v. Hastie 14-15 Cowan V. O'Connor 15 Cowley V. Patch 156 Crears v. Hunter 99 Cresswell R. Co. v. Martendale 230 Crisp V. Gamel 71 Crisp and Goldings Case 70-71 Cromwell v. Grunsden 112 Crossley v. Maycock 41 Cundy and Bevington v. Lind- say 7-9 D. Daniels v. Newton 226-227 Darie v. Noble 188 'Davis Sewing Machine Co. v. Richards 29-34-35-37 Davis V. The Clinton Water Works Co 122-123-124 Day V. Caton 17-18-19 Delaware & Hudson Canal Co. V. Pa. Coal Co 193-194 Devlin V. The IVlayor, Alder- men and Commonalty of the City of New York 132 Devon V. Powlett 143 Dickinson v. Calahan 14S-149 Dickinson v. Dodds 48-49-50 Dixon V. Adams 77 Docket V. Voyel 101-102 Drake v. White 161 Drew V. Nunn 54-55 Duke of St. Albans, The, v. Shore 207-209 Dunham & Dimon v. Pettee & IVIann 171-172 -Dunlop v. Higgins 16-27-36 Dunton v. Dunton 69 Duplex Safety Boiler Co., The, v. Garden 74-188-189-190-191 ■ Durnherr v. Rau 129 Dusenbury V. Hoyt 109 Dutton and Wife v. Poole, 121-123-127-128-129 Eastwood V. Kenyon 107-108 Eddy V. Davis 234-235 Edmunds v. IVIerchants' De- spatch Transportation Co... 8-9 Elliott V. Blake 219 Elmore v. Sands 10 England v. Davidson 93 Evans v. Nicholson 15-16 Evans & Co. v. McCormick. 34-35-36 F. Farrow v. Wilson and Wife..., 149 Page Felthouse v. Bindley 17-18-19 First National Bank V. Watkins 33 " Fitch and Jones v. Snedaker. . 3 Flight V. Reed 103 Foakes v. Beer 80 - Fonseca v. Cunard Steamship Co 9 Foster v. IViackinnon B-9 Franklin v. IVliiier 213 Freeth v. Burr 229 Frost V. Knight 218-226-227-228 Fuller's Cases 64 G. Gerii V. Poidebard Silk Manu- facturing Co. . .209-210-211-212-213 Gifford V. Corrigan 127 Gilbert v. The North American Fire Insurance Co 113-114 Giles V. Giles 171 Gillmore v, Lewis 94 Glaholm v. Hays 174-175-176 Glazebrook v. Woodrow 201 Glenn v. Marbury 131-133 Goshen National Bank, The, v. Bingham 139 Goulding v. Davidson 109 Grant v. Johnsorf 203-204 Gray v. Gardner 220 -Great Northern Railway Co., The, V. Witham 39-46 Gunning v. Royal 98-99 H. Haas V. Myers 30 Hadley v. Baxendale 238 Hale V. Spaulding 15s Hallock V. The Commercial Insurance Co 28-29-32-33 -Hamer v. SIdway 69 Harber Brothers Co. v. The Moffat Cycle Co 231 Harris's Case 28 Harris v. Great W 9-10 Harris v. More 94 Harris v. Nickerson 43-44 Hart V. Miles 67 Harvey v. Facey 38 Hatch V. Purcell 103 Hawes v. Smith 65 Hawkes and Wife v. Saunders 107 Hayden v. Bradley 186 Hayward v. Andrews 131 Hayward v. Barker and Wife. 110 Head v. DIggon 44 Hebb's Case 27-28 Heermans v, Ellsworth 138-139 Henderson v. Stephenson 9-10 TAiii.ii OF Casks xui Page -Henthorn v. Fraser 22-29-30 Herring v. Dorell 93 Hesketh v. Gray 220 Hewitt V. Anderson 3 Hoare V, Rennie 207-209 ■ Hobbs V. iVlassasoit Whip Co.. 18 Hoclister v. De ia Tour, 218-226-227-228 Honcl< V. IVIuller 230 Hoplployee would not have the legal right without the consent of the oKployer, to split up his claim for services and recover in separate actions. Neitlier can he confer such right upon an assignee. Brice v. Bannister, 3 Q. B. 569, 1878, p. 909: One Gough had contracted to build a ship for the defendant, payments to be made at intervals. Gough gave plaintiff an order for £100 of the money to become due and defendant had notice of this. After the notice the defendant advanced money to Gough, who had become unable to complete the ship through lack of funds, and had not enough to pay the plaintiff. The court held .the defendant received notice of the assignment and should have done nothing to prejudice the plaintiff's rights. Advances were made by the defendant on his own account and the plaintiff should not suffer thereby. Assignees 135 Walker v. The Bradford Old Bank, 12 Q. B. 511, 1884, p. 932: One Reynolds assigned to the plaintiff in trust all sums due or which might come to his credit in defendant bank. At the time of Reynolds's death £217 were due, but at the assign- ment only £14 were due. The plaintiff gave defendant notice of the assignment after the death of Reynolds and brought suit for the £217. The bank put in three defenses: (1) That it was a voluntary assignment and was not one which a court of equity would have enforced; (2) that at the date of the assignment the £217 was no debt or other legal chose in action; (3) that the notice of the assignment not having been given till after the death of the assignor it was then too late to give it, and that it is there- fore ineffectual. The court held the first defense was not good, as plaintiff's position did not permit it to impeach the as- signment on this ground; that the second defense was not good, because as was held in Brice v. Bannister an accruing debt may be assigned, and the court held this to have been an accruing debt; that the third defense is not good, because the right of the assignee vests at the time of the assignment and not at the time of the notice. The effect of the notice is merely to shut off all equities; until it is given the equities may come in. (See end of this chapter.) Of course, a man cannot assign something he does not have. A possibility does not mean anything in this respect. That some- thing may happen in the future doesn't amount to a property right in the present. The subject of an assignment is a chose in action, that is, a legal right. If a man has entered into a con- tract under which he is entitled to receive certain monies in the future, that is a legal right; that is an accruing debt; that is not a possibility; it is a legal certainty; it is an obligation then, which he may assign. In Brice v. Bannister there was a legal obligation under a contract, which the assignor had a right to ; which he could enforce at law; that is what he assigned to the plaintiff. In the supposititious case above, after A had been engaged by B in Jan- uary, he had a legal right to one month's salary, but nothing more. He could have been discharged at the end of any month; it was a month to month contract, terminating at the end of each month. He could not assign anything at the beginning of each month but the wages due at the end of the month. Walker v. The Bradford Old Bank would not be law on the second point of its de- cision, that £217 were capable of assignment. Nothing could be covered by that assignment except the amount due at the time the assignment was executed. Over and above that there was nothing but a possibility. Of course, if the debtor had contracted to increase his deposits up to that sum then you would have an accruing debt under a legal, enforceable contract; then an assign- ment of the deposits then in hand or to grow due thereafter, would have been effectual. Things which are assignable are choses in action; not possibilities. In Brill v. Tuttle there is a new point. The distinction is one which exists in the New York law, between an order drawn upon a specific fund and one which is not so drawn, the New York law being, that where an order is drawn upon a specific fund, there is a good assignment and the assignee may sue in his own name by virtue of a statute; but where there is no specific fund, or where the order is not drawn for a payment to be made out of a specific fund, there is no assignment, and the assignee has no rights against the drawee unless the drawee accepts. It is difficult to see any consideration for the promise of the drawee implied in the acceptance in the latter case, how he, by reason of acceptance, 136 Operation of Contracts becomes liable to the assignee, but this is the way the law stands in New York. The New York court takes the view that the English court does in Brice v. Bannister, with reference to the splitting up of the claim, really because of a statutory pro- vision in the code, which you will find in other code States also. It eliminates increased inconvenience to the debtor. The provision is one which allows the plaintiff or the defendant to bring into the action all of the parties having an interest in the subject matter. (Sec. 447 Code of Civil Procedure.) So that if the debtor thinks he has been inconvenienced by being sued upon a portion of the whole claim against him, and thinks he stands in danger of being subjected to partial suits, he may bring all the parties to the claim into one suit, and thus joining all the assignees, the rights of all of them may be settled in one suit. The statute in England is just like the New York Code of Procedure. "Equitable Assignment," as used on page 912 of Keener's Cases in Brice v. Bannister simply means, that where there is something which at law is not a good assignment because of the informality of the so-called assignment, and the assignee could not recover at law, such a defense being inequitable against the assignee, equity will afford a remedy to the assignee. You have an equitable assignment where there has been an imperfect at- tempt by the owner of the claim to transfer it to another; where the attempt cannot be effectuated at law in any way but where if the intended transferee has paid value, his right will be enforced in equity. It is a fundamental principle of equity jurisdiction that a court of equity will do nothing for a volunteer, that is, one who has parted with no value, because if he parted with no value, no- body could have injured him very much. That is the reason for the requirement that the so-called assignee in an equitable assign- ment must have parted with value. The thing which the assignee at common law received was simply a power of attorney which en- abled him to sue in the name of the assignor, the assignor being the real party to the record. The assignor upon collection becom- ing the trustee of the money. But for that right at law there must have been the legal forms used for the appointment of such an attorney; an accurate expression of the intention to transfer the chose in action. Where the accurate forms were not used; where the power of attorney was imperfect, but where the intended assignee has paid value the court of equity would enforce his rights and you would have what is called in these cases an "equit- able assignment." Now all cases of such orders as you have in Brice v. Bannister, which orders do not assume the form of an assignment or power of attorney, provided the party to whom the order is given has paiJ value for it, are cases of equitable assign- ment, so-called. Legh V. Legh, 1 B. & F. 447, 1799, p. 901: The plaintiff had a bond of the defendant's which she assigned to John Legh, who sues in the plaintiff's name on the said bond. The defendant pleaded a release, which the plaintiff had given after assignment made to John Legh. It was held that the defendant should not be allowed to take advantage of the release when it would be against good faith. The release was set aside. Littlefield v. Storey, 3 Johnson's 426 (N. Y.), 1808, p. 903: Defendant owed the plaintiff money and the plaintiff as- signed the debt to one Sheppard, giving notice thereof to the de- fendant. In an action of debt by assignor as nominal plaintiff the def eiiSant pleaded in defense, that he had already paid the plaintiff the debt. Plaintiff alleged that he brought the suit solely for the Assignees 137 benefit of Sheppard. The court held that after the notice had been given a release on payment by the debtor to the assignor does not affect the rights of the assignee. Welch V. Mandeville, 1 Wheaton's 233 (U. S.), 1816, p. 903: The defendant owed money to the plaintiff and the debt was assigned to one Prior. Of this defendant had notice. In a suit by the assignee it appeared a dismissal and release was pro- cured by collusion between the assignor and the defendant, debtor. The court held this to be no bar to a subsequent suit for the benefit of the assignee. "Courts of law," says the court, "follow- ing in this respect the rules of equity, now take notice of assign- ments of choses in action, and exert themselves to afford them every support and protection not inconsistent with the established principles and modes of proceeding which govern tribunals acting according to the course of the common law. They will not, there- fore, give effect to a release procured by the defendant under a covenous combination with the assignor in fraud of his assignee, nor permit the assignor injuriously to interfere with the con- duct of any suit commenced by his assignee to enforce the rights" which passed under the assignment." These three cases simply illustrate the power usurped by the courts of law from the courts of equity. They cannot be justified as decisions by courts of law. By giving the assignee rights in these cases the court of law was usurping absolutely the powers of equity The assignee would use his own name in a court of equity, and he would be allowed to recover because he has no remedy in a court of law, either in his own name or in the name of the assignor. At first choses in action were not assignable at common law, the assignee had to sue in the assignor's name, and if there was any bar to a recovery he failed; next, courts of equity gave relief in cases where an assignee was met by a bar in an action at law, allowing him to sue in equity in his own name; next, courts of law (these cases) usurped the powers and functions of equity and protected assignees in the same way a court of equity would, even though the assignee was obliged to sue in the assignor's name as in these cases; the law courts still compel the assignee to sue in the assignor's name, nevertheless they give him the equitable rights which equity courts would give. After the assignee's rights have attached, the debtor, with full knowledge of those rights (because in these cases notice was given to the debtor) has by collusion with the assignor sought to destroy those rights, and has succeeded in destroying them as a matter of law, and therefore the court of equity says that this debtor (defendant), having been guilty of this inequitable act which re- sulted in destroying the rights at law of the plaintiff, "we will allow plaintiff to sue in his own name in this court and recover." The result of notice (without going into the question whether notice is necessary) is, that notice "shuts out new equities be- tween the debtor and the assignor." What is meant is that after the assignee has given the debtor notice, nothing which can happen by the act of the assignor, or with his consent, can effect the rights of the assignee. It shuts out further or new defenses. Up to the time of such notice, any defenses which the debtor has ac- quired against, the creditor, (counter-claims, etc.) he may set up in an action by the assignee, because the latter steps into the as- signor's shoes. Of course, until the debtor knows of the assign- ment he has a right to all defenses against the action which he may acquire by dealing with the assignor. After he has received notice his right to get defenses from, or to enter into negotiations 138 Operation of Contracts with, the creditor ceases, because he knows that the property is vested in a third party. In Welsh v. Mandeville the court states very squarely what is done to reach the decision in that and similar cases. Courts of law have adopted the procedure of courts of equity. It is as though he were allowed to sue in his own name. The courts dis- regard entirely the form of the action. Parsons v. Woodward, 2 Zabriskia 196, N. J., 1849, p. 906: The plaintiff agreed to sell the defendant 4,000 trees, but afterward assigned the contract to one Hitchens, of which notice was given to the defendant. Later the plaintiff made a general assignment for the benefit of his creditors. The defendant re- fused to accept trees on the ground of the second assignment. The court held that "beneficial contracts are assignable in equity, in which case, when bona' fide and for a valuable consideration, the assignor becomes a trustee for the assignor." And therefore "the proper replication to the answer is, that the debt or contract, though in the name of the plaintiff, yet in substance belongs to a third party, and therefore did not pass under the assignment for the benefit of the creditors; if not, it is still in the plaintiff for the benefit of such third person and the action can be main- tained." Is any beneficial interest in the contract left in the assignor after the assignment? Does the fact that he can release the debt or make a subsequent assignment to another prove that there is? This case shows that the assignor becomes in a sense "a passive trustee for his assignee." Hence a second assignment by the as- signor for the benefit of his creditors passed nothing and a suit by the first assignee in the name of the assignor can be main- tained. It is not a true trust. See Ames Cases on Trusts. CASE: A holds a claim against B; A assigns it to C for value, but C does not give B notice; then A assigns it to D, who pays nothing, but gives B notice; A then assigns it to E, who both pays consideration and gives B notice. What assignee has the prior right? Heermans v.' Ellsworth, 64 N. Y. 159, 1876, p. 916: The plaintiff sued on an assignment made by one Fellows to him, to re- cover money due from the defendant. The defendant proved pay- ment to Fellows after execution of the trust deed. Before this Fellows had brought an action against the plaintiff to revoke the trust deed and the defendant was a witness. There was also other evidence showing notice to the defendant, who claimed that he had no knowledge of the trust deed. The court held that the burden of proof was on the plaintiff to show that payment was made after the assignment and to the wrong person and that defendant had notice of the assignment. Any payment to the original creditor before notice is received is valid. CASE: A to-day executes a deed to lot X to C. The deed is not recorded. To-morrow he executes a deed to the same lot to D, and D records the deed. Whose property is it? Miller & Reist v. Kreiter, 76 Pa. 78, 1874, p. 918, holds "that the period from which to determine the rights of the assignee and defendant is not the date of the assignment, but the time when the latter had notice," i. e., all rights of set-off against the assignor, the creditor, acquired before the debtor receives notice of the assignment, may be pleaded in an action by the assignee on the debt. There are some authorities on the other side, but the heavy weight of authority as regards the effect of the giving of notice of an assignment of a chose in action is, that it is of no importance Assignees 139 whatever to perfect the assignment. Notice to the debtor is no part of the assignment. And it seems perfectly clear that that is as it should be, logically. If you are going to allow an assignment of a chose in action, as a transfer of a piece of property, and A, the owner of the chose, transfers it to C and thereafter goes through the form of transferring it to D, at the time he goes through the form of transferring it to D, he has nothing to trans- fer. So that as a matter of common sense, the first assignee in point of time gets all the assignor has, and thereafter, although the subsequent assignee should give notice to the debtor first, the second assignee would have no better right than he would have had otherwise, which was nothing. But notice of the assignment of a chose in action given to the debtor is of vast importance in other respects, and the importance of it is to fix the rights of the assignee in respect to the right of the debtor to limit his obliga- tion -with the assignor; to prevent the promisor from doing any- thing with the promisee to injure the assignee's rights; to pre- vent the arising of any equity between the promisor and promisee which might effect the assignee; in other words, to shut out the equities. Take the case of Heermans v. Ellsworth, which was a case where the owners of the chose in action assigned it to C and after the assignment B, the debtor, paid A and the question was what are the rights of C, under these circumstances, against B ? The court held that unless C could establish that before B had paid A, he (C) had notified B of the assignment, he had no rights at all. And that is the only conclusion the court could come to. B knew nothing about C; he only knew that he owed A a debt and had a right to pay him any time, and the fact that there had been a transaction between others could not effect him without notice of it. The only thing that notice was important for, was that if he thereafter did anything against C's rights, he would nevertheless have to pay C. So in the other case of Miller v. Krieter. There, in the defense of an action on the assigned claim, the defendant attempted to make set-off of claims which he had against the assignor and the court said he was entitled to set-off. the claims because he had acquired them against the assignor be- fore he knew that the assignor had parted with the claim. If the assignee had notified the defendant of the assignment, that he was the owner of the claim and the debtor had thereafter acquired a claim against the assignor, he could not have set it off against the assignee. It is true that the assignee's rights are acquired from the assignor, but they may be better than the assignor's rights, in this respect, that if after the assignment, by a trans- action between the debtor and the assignor, the debtor acquires a defense against the claim by the assignor, which he can set up against the assignor, he yet cannot set it up against the assignee provided notice was given prior to its being acquired by the debtor. CASE: A says to B that he has a cargo of tea at sea and asks so much for the cargo. B buys it and gives his note for the purchase price. The fact is that A has no tea. A endorses the note to C for value, C knowing nothing of the previous contract. What are C's rights against B? The Goshen National Bank v. Bingham, 118 N. Y. 349, 1890, p. 921. One Brown ' by false representations to the plaintiff Bank obtained a certified check to his own order for $5,000 which he transferred to the defendant but failed to endorse. As soon as the plaintiff discovered the fraud and that Brown had no funds, they instituted an action against the defendant to re- cover possession of said certified check. That is one suit in the ease. The other was from the following facts: — The defendant 140 Operation of Contracts obtained from Brown a power of attorney to endorse the check and after such endorsement sued the bank for the amount of the check. The Court held this check not having been properly endorsed by Brown in the first place, could not come under the rules of the law merchant respecting negotiability but was in fact merely the assignment of a chose in action. The defendant therefore holds it subject to all equities which subsisted against the assignor before notice was given to the debtor. "Assignability" covers both transfers of negotiable instru- ments on the one hand and choses in action, on the other. This case brings out the difference between negotiability and assign- ability. Upon assignment (as in this case, by reason of the in- strument -not being properly endorsed when passed to Bingham — making it a chose in action) all the equities are let in, meaning by this that upon an action upon the chose in action, the promisor can set up any defences he would have had in a suit by the promisee up to the time of the notice. While on the other hand negotiability shuts out the equities, in the case of a purchaser in good faith for value before maturity. In the case of negotiable paper, the trans- feree may get a better title than the transferor had as in the case of the note given for the tea represented falsely to have been at sea. In the hands of C the innocent purchaser for value it consti- tuted a good claim against the maker although if the payee him- self sued on it he would be defeated. Negotiable paper after maturity or when transferred zvithout endorsement is a mere chose in action and is governed by the rules of choses in action; the equities are let in. CASE: Suppose A draws a check upon the X bank for $500 and makes it payable to B or order and delivers it to B. What are B's rights against the bank ? Risley v. The Phenix Bank, 83 N. Y. 318, 1881, p. 925. The defendant had $18,000 to the credit of the Georgetown bank. The Georgetown bank orally assigned the plaintiff $10,000 for a consideration and gave the plaintiff a check for the amount. The plaintiff presented the check to the defendant with notice of the as- signment and defendant agreed to pay to someone known at the bank. The plaintiff procured such a person the next day but the defendant refused to pay because the credit of the Georgetown bank had been attached that morning by the Federal authorities. The Court held that the check drawn upon the general funds of the drawer in the hands of the drawee did not of itself operate as an equitable assignment. To have held the bank on the check alone the acceptance must have been in writing thereon. But an assignment can be made and proven by parol provided consider- ation is paid for it and since notice was given the defendant was bound to the plaintiff only and should have done nothing to preju- dice his rights. It is untrue that a check ffives the holder any right whatever against the bank. It is not an assignment of a chose in action consisting of the deposits, in any sense. The relation between a depositor and his bank is simply that of debtor and creditor and a check is a request that the bank pay part of the deposit to the holder of the check; it gives the holder no right against the bank; it is no assignment at law; neither is it an assignment as regarded by equity unless the payee paid value for the check when it would be treated in the same way as the order was treated in Brice v Bannister and would be enforced as an equitable assignment. Rise- ly v. Bank is an authority and represents the law for the proposi- tion that a check is not an assignment of the deposits in an ac- count or any part of them. The whole difficulty of the plaintiff in that case was to establish an assignment apart from the check. Assignees 141 The plaintiff was compelled to establish outside of the check evidence that he had an assignment of a chose in action and he did here because he showed the Georgetown bank had assigned orally $10,000 worth of its deposit and the check was given simply as an indication or evidence pf the intent to transfer to the plaintiff that amount of its deposits. The method they adopted did not legally effectuate the transfer, but the intention was to assign that amount of the deposits and the question was whether the intention could be effectuated in another way, and they found it could be, for an assignment could be made by word of mouth. The court held here that such assignment of a chose in action by word of mouth was good. Of course one would expect such a holding, because as as- signment was originally merely a power of attorney which could be given just as well by mouth as otherwise. The third point is that the owner of a claim may split it up by assignment into several parts ; he may assign part to A and part to B and the rest to C, in New York. The reason for the general rule that courts will not allow a claim to be split up except with the consent of the debtor, is that it would impose hardship upon the debtor, subject- ing him to several claims instead of one. In New York under the statute covering procedure in such cases, the plaintiff may join in the action or upon motion of the defendant there may be joined in an action, all those who have any interest in the subject of the litigation. That being so, the debtor could no longer claim that he was put to trouble by the splitting up of the claim against him. If the check had been accepted by the bank the bank would be obliged to pay the payee because then you have a draft. A check is sometimes called an inland bill of exchange, it being simply an order upon the bank, if the bank accepts it the bank then becomes liable as the acceptor of a draft, which under the rules of commercial paper makes the acceptor responsible to the party named in the paper. The promise of the bank, the acceptor, is considered to be a promise made to the payee or drawee and the depositor for the consideration furnished by the drawer, i. e. the obligation to the depositor is considered to be the consideration for the obligation of the bank as acceptor. It is difficult to see how the rule that a consideration must move from the plaintiff in every case is followed in that case. The only answer we get to it is that by the law merchant the acceptor of a draft becomes liable. It may not be a good rule on the doctrine of consideration but that he is liable is beyond question. Incidentally the Court held that to make a valid assignment, of a chose in action, it is not necessary to deliver the chose in action, at least where the chose in action consists of something which is not embodied in or evidenced by an instrument. This chose in action was a simple claim against the bank. It might look, at first sight, as if this case were inconsistent with the Massachusetts case of Palmer v. Merril, supra, but these cases are not necessarily inconsistent. The Massachusetts case held, in a case involving an insurance policy, that unless there were a delivery of the insurance policy, the assignment was not complete. That a chose in action must be delivered, if it is capable of delivery. All that the New York case holds is that where you have a chose in action which is not capable of delivery, which is not evidenced by an instrument, a delivery is not necessary. It does not appear from Eisley v. Bank, what the New York court would have held in a case similar to Palmer v. Merril. The fact of it is, that in New York the courts would hold that some kind of delivery, where the chose in action is capable of delivery, would be necessary. As a matter of principle, a delivery should not be necessary. 142 Operation of Contracts A delivery of a chose in action is the very best piece of evidence in the world of the assignment of it, but that is not to say that ab- sence of such delivery excludes other good evidence of an assign- ment. The failure to pass over a chose in action might be a very suspicious circumstance against one who olaims the assignment, out that is a long way from saying that there had been no assign- ment. That is a question of proof, and the best proof consists of the delivery of the chose in action, if it is capable of delivery. But there might be other evidence by which -the assignment could be proved. The Courts seem to have come from considering that the de- livery of a chose in action, where capable of delivery, is the strong- est proof or evidence, and from holding that a so-called assign- ment is suspicious if not accompanied by such delivery, to the point where they hold, as a matter of law, that such delivery must take place. It is no delivery of a chose in action to appoint one an agent. As a general rule, the Courts have required that where it is capable of delivery such delivery should be made. Howell v. Mclvers, 4 Term R. 690, holds that an assignment of a chose in action need not be by deed. This is carried further in Risely v Bank where it is held that it need not even be in writing. Tallman v. Hoey, 89 N. Y. 537, 1882, p. 930. The plain- tiff sues for money due on the sale of property. The defendant as a counterclaim sets up an indebtedness by plaintiff to one Lynch and an assignment of this claim to defendant. Assignment was in the form of an order to pay defendant or bearer. Held, if it was a bill of exchange the plaintiff could not be liable as the defendant showed no written acceptance of the same. Furthermore judg- ment m.ust be for the plaintiff, on the counterclaim, as the defend- ant shows no consideration for an equitable assignment and cannot recover without proof of same. Equity never will do anything for a plaintiff who is a mere volunteer; who has given no consideration. In order to set the ma- chinery of equity in motion, the plaintiff in attacking an act of the defendant as unconscionable, must show that he has parted with something upon the basis of the defendant's action which he now repudiates. It is an invariable rule of equity. In Tallman v. Hoey the defendant has what was intended to be an assignment of a chose in action but it was not because of some defect in the legal form, because of some failure to comply with the require- ments of law as to form and where therefore the holder of it must get relief in a jurisdiction other than law, but in order to set the machinery of equity in motion the first thing you must show is that you furnished a consideration. Not being able to do that in this case the counterclaim was not allowed. Walker v. The Bradford Old Bank is sound on the point that you need not show any consideration in a legal assignment. It is none of the debtor's business that the assignee paid no money; it makes no difference to him. Where there is a legal assignment the assignee is not obliged to go into equity. He has a right at law, and at law it is not necessary to show a consideration. He is not suing upon a contract between himseM and the defendant. He is suing as the transferee of a right between the defendant and a third party. Of course there must be a consideration in that con- tract, but not for the case of a technical, correct, legal assignment. It is only when the assignee has no technical legal assignment, or where for other reasons he must go into equity that he must show a consideration, because the rule in equity is universal that no one has any standing who has not shown a consideration. In addition to the proposition. in the Walker case that an as- Assignees 143 signee of a legal assignment, need not show that he paid a consid- eration, there are two other points: (1) Held, on the authority of Brice v. Bannister that the thing assigned was a chose in action because in the language of that case there was an accruing obligation. The Walker case has never been criticized or overruled, but the Brice v. Bannister case didn't hold any such thing. As a matter of fact there never was any accruing debt. It might never have been over £48. In Brice V. Bannister the Court held, that if there was an obligation, a con- tract under which something in the future will accrue, that was the subject of an assignment. It is a legal right subject to assignment. There was no such assignment in the Walker case with reference to anything other than £48. As to the subsequent deposits it seems to have been an assignment of a mere uossibility. The court took out of the text in Brice v. Bannister two words, and gave them a meaning that this was an accruing debt. (Cf. O'Keefe v. Allen, 888, as to assignment of possibility.) (2) The other point in the case was that a failure to give notice does not affect the assignment in the least. That is good law, on the better authorities; the Court in this case simply say- ing that though this is unnecessary, it happens that under the Judicature act, such notice is necessary to enable an assignee to use his own name when he sued. The assignment is complete, but if he wants to sue in his own name he must give notice. (b) By Operation of Law. CASE : A engages B to work on his farm for him and agrees to pay him a certain sum, by the year. A dies. Would you say B would be obliged to go on working or would he be entitled to quit? Devon v. Powlett, 2 V. A. 132, 1714, p. 936. Holds the right to enforce a contract passes to personal representative, not heirs, though the contract was to pay to the intestate "his heirs or ex- ecutors." Baxter v. Burfield, 2 Strange, 1266, 1746, p. 937: Holds an apprentice is not bound to serve the executors of his master after the master's death, where the covenants in the indenture of apprenticeship did not mention executors. Beckham v. Drake, 8 M. & W. 846, p. 937: Holds the right of action for the breach of a contract under which plaintiff was engaged in a business requiring his personal skill does not pass to his assignees in bankruptcy by operation of statute which includes "every beneficial contract executory or part executed which the assignees could perform and thereby add to the personal estate" of the bankrupt. Bankrupt may therefore himself bring the suit. Chamberlain v. Williamson, 2 M. & S. 408, 1814, p. 942; Holds an administrator cannot sue for breach of promise of marriage made by defendant to the intestate (no allegation of special damage being made) for this declaration is based on a mere personal injury to which the administrator is not privy, by law or in fact. In General no personal action like an action for a tort will pass even to an assignee or personal representative; it cannot be as- signed either by act of the parties or by operation of law. Such contracts as Chamberlain v. Williamson (for breach of promise, made by defendant to plaintiff's intestate), and those named in the Drake case, for service of a physician, etc., are non- assignable. Chamberlain v. Williamson does not stand alone: it is no curiosity in the law, but represents the general principle that a purely personal contract is not assignable. This has been carried 144 Operation of Contracts so far that even in those States where there are statutes express- ing the proposition that all rights of contract piass either by as- signment between the parties, or by operation of law upon the death of one of them this is qualified in just the way it was at common law, in other words, the statute is held not to vary the rule in such a case as Chamberlain v. Williamson. 58 N. Y. 282; 132 Mass. 363; 55 Maine 142. As an example of a bilateral contract consisting entirely of promises which are personal, note this case: In consideration of A's promise to teach B drawing, B promises to teach A music: — purely personal, and would not pass by assignment either between the parties or by operation of law. There are two distinct questions involved in these cases: Beckham v. Drake and Chamberlain v. Williamson involve the question, whether a right arising from a breach of a certain con- tract will nass as a right, by assignment or by operation of law. The other cases involve the question, whether the rights and liabili- ties under the contract will pass by assignment or by operation of law; e. g. Stubbs v. Railway, and the last three cases. It is a dif- ferent question entirely. CASE: In a bilateral contract by which A agrees to paint B's house red and B agrees to pay $500; $100 at the completion of each quarter of painting and A gets the house half finished and dies. How much should A's personal representative recover? Did A break the contract? CA^E : A agrees to sell and deliver to B 500 bushels of wheat and B agrees to pay $1.00 per bushel for it and A delivers 200 bushels and stops. Would you allow a recovery of anything? In the first contract, for whose benefit is this provision to pay in installments? For the benefit of the contractor, to facilitate his work? It certainly is not for the benefit of the party who is hiring him. CASE: Suppose A fits out an expedition to go to San Fran- cisco around the Horn for B, who agrees to pay $10,000, one half to be paid when the vessel reaches the Horn and the balance at the end of the voyage. While the vessel is enroute and before it reach- es the Cape, A dies, how much could his representative recover? CASE: Where A agrees to put up 8 houses in one year and B agrees to pay him $6,000, payable says B, at the rate of $500 per month. A prepares the foundation for all the buildings and works two months, and then dies. Nothing having been paid, how much would the representative recover? CASE: B agrees to build a house for A and A to pay $5,000, and B gets it half finished and dies. Would you allow his repre- sentatives to recover one-half on a quasi-contract? CASE : A engaged B to work for him at $100 per month, the term of service to be one year and B promising to work for a year, works for five months, and then quits voluntarily, having been paid nothing. How much would you allow him to recover? Is this the same case, to-wit: — CASE: A engages B for a year for $1,200 and to pay him at the rate of $100 per month, B agreeing. After five months would you allow him to recover any- thing after quitting? Consider these cases where B died? Stubbs, Administrator, v. The Holywell Railway Co., 2 Ex. 311, 1867, p. 944: The plaintiff's intestate was employed by the defendant to carry on certain work to be completed in fifteen months the payments to be made in five instalments. The first of these was paid and after working long enough to be entitled to receive the next two instalments, but before either of them was paid, the plaintiff's intestate died. Less than three fifths of the Entire and Severable 145 work was completed but no default on the part of the deceased, i. e. voluntary default, was proved. The administrator sues to re- cover for the work done at the actual contract price. The Court held the intestate was vested with a claim at the end of the second and third quarters and that claim descended to his personal representative, who may sue for the contract price and not on quantum meruit. "His death, no doubt, dissolved the contract, but it did not divest his representative of the right of action which had already accrued to the deceased, and which survived to that representative." Health and life were implied conditions and his breach, his noncompletion of the contract, through death is ex- cused. There are three classes of contracts which may involve this issue in Stubbs v. Ry. (1) A class like the ship expedition to a port and return, or typified by the bilateral contract to pay $5,000 for the construction of a house. In other words, the class of cases where there is a lump sum promised for a completed piece of work of a nature such that you could not say that the party who is to pay would pay anything for part of it. In the case of the ex- pedition certainly no one could say that A would give one penny for the ships going one-half way down to the Cape and stopping, and no one would say that the nature of the building of a house is such that the owner would not give one penny for a story of the house; that he never would have entered into the contract except for a completed thing. The (2) is a class of cases typified by the case where A engages B to perform services for $100 per month the term of service to be one year and the (3) class of cases is the class of cases typified by the case where A engages B to work for a year for $1,200 payable at the rate of $100 per month. It is this third class of cases under which Stubbs v. Railway falls; that was an agreement by the defendant to pay the intestate £500 for a completed piece of work, the £500 payable at the rate of £100 when each one-fifth was completed. With regard to the 1st and 2nd class of cases the law is well settled. The first class is a class in which you find what are known as ENTIRk contracts. And in every entire contract you have an implied condition that the money promised is promised in the intention of the parties upon the condition that the entire work is done; and that condition is implied in fact, that is to say, it is a genuine condition intended by the parties. Take a contract for the building of a house; everybody knows, that no man when he has promised to pay $5,000 for the construction of a house would have agreed to pay one cent for a portion of the house. He wants a whole house and the clear inference is that he would not have made the contract at all unless he could get the completed thing, so the condition is implied in fact, from the clear intention of the parties, in an entire contract. In the second class of cases on the other hand you have what is called a SEVERABLE contract, as distinguished from an entire contract. You have a contract in which it is equally clear, that the parties have indicated by the terms of the contract that the considerations on the respective sides are apnortionable, one part to the other part. When A says to B, "I will pay you $100 per month if you agree to work for 12 months," that means that he re- gards the services as worth $100 per month, but he wants B's promise to work for 12 of them. The intention shown by that kind of a contract is deemed to be an intention to apportion a month to $100; these are the respective values put by the parties upon the consideration furnished by the other party. That is apportionable, that is a severable contract. J 146 Operation of Contracts The doubt arises about the 3d class and you find the authori- ties about equally divided upon it. That class is a class of cases where A agrees to pay B $1,200 for a piece of work payable at the rate of $100 per month and the cases divide only upon the question of what that indicates, as to the intention of the parties. They do not agree that the wages shall be $100 per month. The case is different from that. They agree that the compensation shall be $1,200 but payable at the rate of $100 per month, and what does that mean? Does it mean that the party is willing to make ad- vances during the term of services for the convenience of the con- tractor or does it mean that to his mind the services are worth $100 a month if they stop at the end of every month. Some courts hold the first and some the latter. Some courts put that class among entire contracts, others say it is a severable contract. That appears to be just as much an entire contract as in the first class of cases. It seems that the man who is promising to pay at the rate of $100 per month is doing so to give the party performing the services the convenience of having his money right along; that he is in a sense making advances out of the total price to the party who has con- tracted; that he is assuming that the whole work will be done in advance; that the contractor does not earn the money under the contract unless he finishes the work completely; in other words, that the price or its equivalent payable, at the rate of, is simply an indication of the method of payment of the total consideration. But you will find equally respectable authorities on both sides. Stubbs v. Railway is that kind of a case. This court held that it was a severable contract, they allowed the plaintiff to recover three full quarterly installments with £10 traveling expenses, treating it as a severable contract. There are just as good authorities holding under similar facts that the plaintiff, the intestate, had broken the condition, namely the entire fuMillment of the work and having broken a condition he could riot recover anything on the contract. What would be the difference in the effect in each of these three contracts, of a breach by voluntary act, on the one hand, and by death or sickness, on the other. The condition in entire contracts, the first class of contracts, is a genuine condition, remember, im- plied in fact; that is, the parties intended it to be there and you will be saved a great deal of trouble if you remember that there is nothing xvhich excuses the performance of a genuine condition. That is the contract of the parties, that something shall happen only if something else happens; that is the heart of the contract, and to say that anything could excuse that would be making a con- tract for the parties; no one can do that; nothing excuses the per- formance of a condition implied in fact. The party who is entitled to insist upon it may waive it for it is in for his benefit and if he doesn't raise the question the condition is gone, but that is not ex- cusing it; nothing excuses the non-performance of a condition whether death, sickness or anything else. It may be waived, but not excused by anything. Now the non-performance of a promise in a contract may be excused. When a man promises to paint a picture or promises to perform services in a contract looking to personal services, the performance of that promise will be excused by death or disabling sickness. That is because in every contract for personal services it is said to be an implied condition in the promise, that it will be performed "if" life and health continue. That is the reason; there is an implied condition in the promise for personal services, it must be so, everyone understands that. But that is a condition, which excuses the non-performance of a proi.iise because it is as- sumed that the parties contemplated that in regard to the promise but that is a very different thing from excusing a condition which Entire and Severable 147 is the basis of another promise. If a man says, "I shall not per- form unless you perform something else," then of course if the other thing not having been done he refuses to perform, non-performance is excused. The distinction drawn is the distinction ' between the excuse of the non-j)erformance of a condition on the one hand, and the excuse of the non-performance of a promise on the other hand. In an entire contract if the condition is broken, namely the non- completion of the whole task, the liability of the promisor is at an end if he chooses to rely upon the condition; so that in the case of building the house, the case of painting the picture or any other entire contract, it does not make any difference, as far as the lia- bility of the other party to pay is concerned, whether the failure to complete is due to the voluntary act of the party who promises the services or by his death. There cannot be any recovery in either case because the condition is broken. But on the other hand if a breach of a condition is caused by sickness, no action would lie, for that breach of the performance of the promise is excused be- cause to that promise there is an implied condition of continued life and health. So in the case of the building of the house, if the con- tractor A dies, he has broken the condition, he has not fulfilled his promise and because of the breach of the condition his representa- tive will be non-suited in an action for what he did do; but in an action against the estate for the breach of his promise there will be no recovery because of the implied condition that his promise was subject to continued life and health. A^ozv in an entire contract where there has been a breach by the contractor through his voluntary act by which he forfeits his rights under the contract, •will there be u recovery alloived on quasi contract? Certainly not, for the failure to perform the condition arose through the volun- tary act of the contractor; that is his fault; he has inflicted the loss upon himself and you could not say that the other party had been unjustly enriched; he is enriched it may be, but not unjustly and not at the expense of the other party because he has done it himself. Could there be a recoz'ery ivhere the breach of the condition is caused by the death or illness of the contractor? If the condition in an entire contract is a genuine condition, put in by the parties as it is, then there could not be any recovery in quasi-contract be- cause if the promise to pay $5,000 for a piece of work completed, is a promise based upon the condition that the work be completed, it certainly is clear that it is the intention of the parties that nothing shall be paid unless the condition is performed. Now the law in quasi-contracts implies a contract even where there is no intention of the parties to make a contract; implies it for the purpose of the remedy; but, of course, the law will never imply a contract when it is contrary to the express agreement of the parties. A quasi-contract, a contract implied in law, is for the pur- pose of working out equity where the parties have not covered the ground by protecting themselves, but it would be a most outrageous inequity for the courts to compel a man to pay for something for which he has stipulated in an express contract with the other party that he shall not pay for unless a certain thing is done, namely, that all the work be done; that would be rank injustice instead of equity, so THAT IN NEITHER AN ENTIRE CON- TRACT, WHEfiE IT IS CAUSED BY THE DEATH OR ILLNESS OP THE CONTRACTOR, OR BY HIS VOLUNTARY ACT, CAN THERE BE ANY RECOVERY AFTER BREACH, ON THE CON- TRACT, OR IN ANY OTHER FORM OF ACTION. The differ- ence between the two cases of the breach being that in the case where the breach has been caused by death or illness no action will lie, but where voluntary, the ordinary action for breach of con- 148 Operation of Contracts tract will lie. Jii severable contracts where the consideration is apportion- able and tvhcrc therefore yon have no such condition as in the entire con- tract the result would be different. The case where A leaves volun- tarily without cause at the end of five months, because the con- sideration is apportionable because the contract is severable, B is entitled there to five months' wages, A having a counter-claim for the damages which he has suffered by reason of B's breach. But if B's failure to comply is through the cause of his death or illness his estate may recover five months' full wages without any counter-claim on the part of the promisor, because there has been no breach by A that is not excused. The third class of cases will be disposed of according as you find the courts treating it as an entire contract, in which case it falls within the class of rules stated with reference to the first class of contracts, or a sever- able contract, in which case it falls within the class of rules stated with reference to the second class of contracts. As to the class of cases such as the wheat case, where in a bilateral contract A agrees to sell and deliver 500 bushels of wheat and B agreed to pay $1 per bushel, and A having delivered 300 bushels stopped, as to the rights of the parties: A great many courts, including the New York courts, call that class of contracts entire contracts, and say that A can recover nothing for the 300 bushels because B only agreed to pay $500 for 500 bushels; that A can recover nothing in any form of action for the 300 bushels; but the courts which hold that way hold also that in case B paid A $300 already, that he (B) will not be allowed to recover that money, although A has not legally earned it, for the reason, say these courts, that if B recovers that money it will have to be in an action of quasi-contract, unjust enrichment, and that action is based upon an equitable action and it would be rather inequitable to allow B to recover from A the money which has been paid for the 300 bushels of wheat, although on his legal rights A was not entitled to the money or any of it. B has his action against A for the breach of the contract and to that extent A will have to give up part of the money which he has received, as damages, but as far as the payment for the wheat is concerned that money will Fe allowed him. In StubbS v. Ry. the intestate having received £100 in a jurisdiction where this would be called an entire contract, B would have to sue to recover the £100 in quasi-contract, which is based upon an equitable doctrine and the court would probably say that while the estate has no right to recover for the two further quarters in any form of action nevertheless it is not inequitable for the estate to keep what it has, although if B had not paid it, it could not be recovered. Dickinson v. Calahan's Adms., 9 Pa. 227, 1852, p. 947: Plaintiff's (Calahan's) intestate agreed to furnish defendant's in- testate with 3,000,000 feet of lumber per year at $6 per M. Both parties died and plaintiff thereafter delivered 136,000 feet to the defendant, for which suit is brought, contract price being de- manded. Defendant (1) proves breach of plaintiff's intestate during his life, and (2), that the contract was personal and does not pass to personal representatives of the parties, hence, that defendants are not bound to perform. Held, for plaintiff for value of the 136,000 feet at $6 per M; but defendant i^ not bound to further perform the contract, since no such substitution was in- tended by the parties to the contract. Dickinson v. Calahan gives additional reasons against as- signability in the case of assignment by operation of law, than exists in other cases. The duty of the personal representative is to wind up the affairs of the decedent, not to carry them on. One Entire and Severaisle 149 year is given for that. It would be against the policy of the law to allow a contract to devolve upon the personal representative which would make the executor go into a business for a series of years. Farrow v. Wilson, 4 C. P. 744, p. 955, holds death of the master puts an end to personal service contract. Distinction between assignability of rights, and the assign- ability of duties or Habilifics under a contract: Take a contract to paint a picture. Suppose it were a bilateral contract. There would be a contract the duty under which in the ordinary cases could not be assierned on the artist's part. But if he has finished the picture, and has earned the price of the picture, of course there would be no objection to the assignment of his right to the money. So we have first to consider this question, in determining whether a contract is assignable or not, whether it is a right sought to be assigned, unmixed with liability. (1) If it is, it will be assigned. (2) If it is a right mixed with the liability, then you have the second question: Is the liability one involving a personal element or not? If it is, the right cannot be assigned, as it could not be assigned without the liability. That would be the Calahan case again. There was a breach by . the defendant in that case. The contract may have had an end at the death of the two parties. Nevertheless the court al- lowed the plaintiff to recover the contract price of the lumber. That was a mistake, because with the right to have $6 per thous- and feet of lumber was mixed up the liability to deliver 300,- 000 feet per year. And to say that the plaintiff succeeded to the right to collect the $6 per thousand, and not be bound to furnish the 300,000 a year is absurd. There is this ground upon which the decision could be supported: That the plaintiff was really al- lowed to recover on a quantum valebat, and that the best way to get at that was what the parties set out in their contract to be the price. Lacy V. Getman, 119 N. Y. 109, 1890, p. 956. The plain- tiff agreed to work as a farm hand for the defendant's testator for one year at $200. The testator died, but the plaintiff con- tinued to work for the year and sues on the said contract for the $200. It was HELD that the death of the master terminated the contract for labor and the plaintiff can recover from the estate only for the work done while the master was alive. The court treated the contract as a personal contract which would not be capable of assignment. CHAPTER IV. JOINT AND SEVERAL CONTRACTS. CASE: A conveys to B and C, lot X; what are their rights? Joint tenants at common law. Theory of joint tenancy is that each owns the whole. The right of survivorship (Jus accrescendi) is its most important characteristic. CASE: If for a consideration A promises to pay to B, C and D and each of them $1,000, has B or C or D a right of action? Or must they be joined in one action ? CASE: A, B, C and D convey land which they own in com- mon, to J. S.; in consideration of the conveyance J. S. promises to pay $10,000, making the promise to A, B, C, D and each of them. A sues on the promise. Can he recover? If in this case A, B, C and D had each owned one of four lots, which together constituted the land conveyed to J. S.; same promise; and A sues. Should he recover ? Slingsby's Case, 5 R. 18, 1587, p. 961, decides that there can be no such thing in the law as joint and several convenantees ; that if a covenant is in form joint and several with reference to the covenantees, the words attempting to make the covenant sev- eral are surplusage; that in such a covenant all the covenantees must join. In other words, it will be construed according to the interest; if the covenant is ambiguous, it will be construed joint OR several, but never joint and several. People V. Harrison, 82 111. 84, 1876, p. 988, decides that there may be joint and several covenantors, and that when such is the case the covenantee may sue all of them or each of them; or, all of them and each of them in succession ; that a judgment against one is no bar to an action against another covenantor, and that there is no bar until the covenantee gets satisfaction. This case is law, as is Slingsby's case, yet these two things are opposed to each other. These two cases cannot be reconciled. Slingsby's case decided that tliere cannot be any such thing as joint and several covenantees or promisees, because if there were, that would give to each separate convenantee or promisee a right of action, and there would be a joint right besides, and gives as a reason for thus deciding the matter, "that the court cannot then tell to whom to give the judgment." The same court in a dictum, and People v, Harrison and a S'reat many decisions later, have held that there may be such things as joint and several covenan- tor.« and they do not seem to be impressed with any difficulty in that case in determining against whom judgment shall be given. We have then this peculiar situation; though A, B, C and D could jointly and severally promise to pay X $100 and five suits could be brought and five judgments obtained, if X should promise A, B, C and D jointly and severally, only a joint obligation is created. Why not allow five suits and judgments? It is not il- logical, so to do. Actions of this sort are all the time allowed in cases of beneficiaries. The answer to the difficulty which the court had in Slingsby's case is, that there is no question to whom the judgment shall be given. Each one is entitled to judgment. There were four promises, and a consideration for each, so judgment must be for each of them. Of course, there can be but one satisfaction. When Joint and Several 151 you have joint and several covenantees, it means that the con- sideration moves from them, so there cannot be more than one collection on the consideration. You have four distinct promises, but the promises are all to pay one and the same sum of money. Now, if A, one of the several covenantees, collects the money, and B would sue upon it, of course he is suing upon an action which does not exist, and thereby he would be bringing a fraudulent ac- tion. But he himself, however, is not defrauded by A's collection, as A has a portion of money which belongs to B. B simply com- pels A to give him his share. So there is no difficulty of the sort surmised by the court. The question as to whom to give judgment to never arises. The court must give judgment to the one who sues, assuming that the $1,000 had never been paid by the de- fendant. The same thing is true in the case of joint and several prom- isors, as in People v. Harrison. A, B and C jointly and severally promise to pay D $1,000. By the contract, D is entitled to the money. He has the credit of three people, each of them bound, and he gets a method of procedure which enables him to sue each one or all of them together. He does not secure any more money, but he has the money very well secured by four promises. That is the ordinary form of an undertaking in a bail bond on attachment. A principal and two sureties. It would be absurd to say that the court would not know how much the person to whom the bond is given could collect. They know the liability of the bond, and they know that the three, jointly and severally, did not promise to pay more than the amount which was lost. They would allow prosecutions on those several promises until the obligation had been paid in one way or the other, because that was the form of the undertaking. The defendants and each of them, promise to the plaintiff. The plaintiff could have gotten judgment from each or from all of them, but when he had once collected it, that was the end of his right. It is a matter going to the form and number of promises only. This question in Slingsby's case as to whether the interests were joint or several has nothing in the world to do with it. You might just as well say, that when A procures from B, C and D a joint and several undertaking with H. S. that H. S. shall do certain things for A, that he cannot hold C and D, because C and D really had no interest in the matter. Because, if you allow the interest of the covenantees in such a case as Slingsby's to be of any ef- fect, you are overruling their express language. It is absurb. The rule in Slingsby's case has been changed by statute in some jurisdictions. See Neg. Insts. Law (N. Y.) Sec. 27 (5.) Sorsbie v. Park, 12 M. & W. 146, 1843, p. 963. The principle of this case is that when you have a covenant, which, as far as the English language can convey is joint or several, or joint and several, the interest of the parties could not possibly make any difference. When a man clearly promises in one way you cannot introduce facts to prove that he promised in another way. That is permitted only when the language is ambiguous. What you are looking for is the intention of the parties. When the language is clear, that determines the promise. If the language is not clear, then the next test is, what is the interest of the parties. That is likely to indicate the intentions of the parties. William Beecham and Richard Smith v. Henry Smith, B. & E. 442, 1858, p. 969: Plaintiffs sue on a note on which it appears one of the plaintiffs, Richard Smith, signed with the defendant and one other, as joint and several makers, as well as being named a payee. Defendant pleads a set-off for contri- 152 Operation of Contracts bution which he will be entitled to from Richard Smith if he pays the entire obligation. Held, if R. Smith were suing alone that would be a good plea, but the plaintiffs are suing on the several obliga- tion of the defendant and are entitled to recover. Where three parties promise jointly and severally, if sued, one of them has to pay. The obligation on the face of it being an obligation of all three of them, each binding himself severally on that obligation, any one who pays the claim can recover from the others the proportionate shares. Here Richard Smith is not suing alone, the suit is joint; if Richard Smith had sued alone then, the defendant in this case would have had a set-off. But the plain- tiffs in this case were Beecham and Smith, and while the de- fendant might have had a set-off against Smith alone, he certainly did not have any such set-off against Beecham and Smith together, as they were joint plaintiffs. Joint obligations in contract act the same as joint interests in real estate. The characteristic of joint ownership in real estate is that each joint owner owns the whole parcel. It is a peculiar con- ception: Three people owning the whole claim, the whole piece of property. It is entirely different from tenancy in common, in which the several persons do not own the whole claim, but own each a separate and distinct part. It is because of the peculiar conception in joint ownership that each one owns the piece of property, that the right of survivorship attaches to it. If A and B each own the whole lot jointly, of course, the whole title is left in B when A dies. It cannot go to A's heirs. Just as soon as joint ownership drops out there is no ownership but one. It was only as joint owners that each owned the whole. This characteristic applies to contracts. If they are joint promisors, each of the joint promisors owes the whole claim. If joint promisees the whole claim is owed to each of the joint promisees. But the promise in form being joint, if the promisoi: