80/ /%7i (fcrnfll Ham ^rlianl IGibrary Cornell University Library KF 801.S88 1874 V.I A treatise on the law of contracts / 3 1924 018 822 829 S. K| Cornell University VB 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/cu31924018822829 A TREATISE ON THE LAW OF CONTRACTS. BY WILLIAM W. STOKY, COUNSELLOR-AT-LAW. 'OUigamur aut re, aufc rerliis, aut simul utroque, aut conseDSn, aut lege, aut jure honorario, aut necessitate, aut peccato." — Pakdect.,3B Justiniank^. IN TWO VOLUMES. Vol. I. FIFTH EDITION. By MELVILLE M. BIGELOW. BOSTON: LITTLE, BROWN, AND COMPANY. 1874. Entered according to Act of Congress, in the year 1856, by WILLIAM W. STOEY, In the Clerk's OfBce of the District Court of the District of Massachusetts. Entered according to Act of Congress, in the j'ear 1874, by WILLIAM W. STOHT, In the Office of the Librarian of Congress at Washington. cambkidge: press of john wilson and son. TO MY FAT H BE THIS WORK IS AFFECTIONATELY INSOKIBBD, ADVERTISEMENT TO THE FIFTH EDITION. The preparation of this edition was commenced about three years ago by the Hon. Edmund H. Bennett ; but that gentleman, after prosecuting the work about a year, was compelled to abandon it by reason of failing health, and it then lay dormant until the summer of 1873. The present editor (who, in giving aid to Judge Bennett in the earlier part of the work, had acquired some familiarity with it) was at this time desired to complete the preparation of the edition, and after much hesitancy consented. This hesitancy might well have taken a more decided form had the extent of the undertaking been fully rea- lized. The amount of work already done could not be accurately ascertained, as no definite memoranda of all the Reports which had been examined could be found ; and, added to this embarrassment, the extensive work of revision and addition which, with the author's approval, was found desirable proved to require a greater amount of labor than the editor could have ventured to under- take, had he been able to see the end. It would serve no useful purpose to state in detail what editorial work has been done upon this edition. It is perhaps enough to say that there has been a com- pression of the original material of some two hundred VI ADVERTISEMENT. pages, — without the loss, the editor trusts, of any thing essential to the work. This was accomplished in part by bringing together certain subjects which had from apparent oversight been disconnected ; and in part by eliminating such matter as might with propriety be omit- ted from an elementary work on Contracts. This part of the work, if not the most important, was, in carrying out the plan of the edition, quite as necessary as any. The volumes had already become almost too large for con- venient use ; and the editor's work contemplated a con- siderable addition of new matter. The author desired that, aside from this, whatever changes, or modifications, or additions to the text should be found necessary should be made there directly, and without marks of distinction from his own work, — a compliment which, in the performance, it is hoped has not resulted in seriously marring the work. The next step was to add any new chapters, sub- chapters, or sections which seemed desirable ; and much in this direction has been done. Two entirely new chap- ters, one on Bills of Exchange and Promissory Notes, and one on Telegraph Companies, have been added ; several sub-chapters have been newly Avritten, and others of the former editions rewritten ; and at least fifty sec- tions besides have been added. Then, and finally, it was important that there should be a new numbering of the sections ; and this, with the other changes, involved a considerable change in the Index, and the making of an entirely new Table of Cases, which alone was no inconsiderable task. All this, besides the usual editorial work of examining the Reports and collecting the new cases. The addition of cases has been about three thousand ; and the table is now one of the largest to be found. In order to equal- ize the size of the volumes, it was necessary to place the ADVERTISEMENT TO FIFTH EDITION. Til list in the second volume ; for vrhicli there are some good precedents in very modern law-books. The publication of the volume has, since the editorial work upon the text was completed, been unavoidably de- layed by reason of the unusual time required in remaking the Index, the Table of Cases, and the Cross-references, and the pressure of other important duties. The editor trusts that the value of this well-known and useful work has, by his humble efforts, been in some slight degree enhanced. M. M. B. Boston, Aug. 2, 1874. ADVERTISEMENT TO THE FOURTH EDITION. The last edition of this treatise has already been ex- hausted for nearly a year, but in the anxious desire to merit the increased favor with which it was received by the profes- sion, the publication of the present edition has been deferred so as to enable the author to devote that period of time to the careful revision of the text, and thereby to endeavor to render it more exact and complete. Neither time nor labor have been spared in its preparation. Every page has been studiously examined and reconsidered in the light of the modern authorities, and in many places the text haa been rewritten. The portion of the work relating to Defences, for instance, is almost entirely new, and is more than doubled in size, as well, it is hoped, as in value. Very large additions have also been made throughout to nearly every page ; and new chapters have been written on the following subjects : — Joint and Several Contracts ; Change of Parties by Assignment ; Change of Parties by Novation or Substitution ; and The Statute of Frauds. The Reports have been carefully consulted, and a large body of impor- tant cases has been added, whUe nearly every citation in the book has been specially re-examined and verified, so as to secure, if possible, exactness in the references. It can scarcely, however, be expected that errors may not have crept in among the citations of over ten thousand cases, despite the pains that have been taken to weed them thoroughly out. In regard to the text and notes, it may be proper to say, that the plan originally adopted has been rigidly pursued ; the principles and rules of law with their modifications and ADVERTISEMENT TO FOURTH EDITION. IX illustrations being stated in the text, and the cases and au- thorities being confined to the foot-notes. The text itself has not been enlarged by quotations from judgments or encumbered by examinations of strings of cases, but all extracts and discussions of cases have been restricted to the notes. The size of the page has been considerably increased in the present edition, so that the number of pages does not fairly represent the real increase of the work. But notwith- standing the compression thus gaine^, a division into two volumes has been found necessary. It is believed, however, that this will be found to render the work more convenient and easy of use. In its present form it has swollen to more than three times its original bulk, but nothing has been added for the sake of mere amplification, and every endeavor has been used to be close and compact, as well as full. It is now the largest work, in the English language at least, on the subject of Contracts. The well-deserved success of Professor Parsons's recent and valuable work, on the same subject, has stimulated the author of the present work in his labor, and encouraged him to believe, that the profes- sion will not object to the increased size, nor the division into two volumes. W. W. STORY. Boston, May 18, 1856. ADVERTISEMENT TO THE THIRD EDITION. A NEW edition of this treatise having been called for, the author has taken occasion thoroughly to revise the text and substantially to enlarge it. Many additions have been made to it throughout, but particularly to the chapters on Sales, Bailments, and Defences ; — one new chapter has been intro- duced on the Relation of Master and Servant; — and all the late cases l)earing upon the general subjects have been ex- amined and cited. In these additions, which have enlarged the work by about three hundred pages, the author has striven to avoid mere amplification. The subject of Contracts is so large (being, as it were, one wing of the law, the other of which is torf), that it is difficult to determine the proper limits of a treatise like the present. Any line of limitation must, of necessity, be arbitrary. But it is hoped that the present edition will be found to be materially increased in usefulness, and more worthy of the favor bestowed upon the work by the profes- sion. W. W. STORY. Cambiudgb, May 16, 1851. ADVERTISEMENT TO THE SECOND EDITION". In preparing the present edition for the press, the text has been thoroughly revised, and large additions have been made thereto as well as to the notes. The doctrines originally stated have been expanded and pursued into their minuter ramifications, and the late cases by which they are modified or illustrated, have been cited. Many new branches of the subject of Contracts have been iutroduced, which were not treated of in the former edition, among which may be men- tioned the law relating to usury, and to the contracts of Factors, Brokers, Auctioneers, Executors, and Administrators, Trustees, Seamen, Corporations, Guardian and Ward, and Masters of Ships. These additions (by which the bulk of the original work is nearly doubled) will, it is hoped, be thought to give to the treatise more completeness, and to render it more valuable to the profession. No labor has been spared in the endeavor to be concise as well as full, and not to en- cumber and confuse the subject by amplifying it. It will be perceived that a change has been made in the arrangement of the subjects. The doctrines relating to Part- ners and Agents, which were before treated separately in the second part, as Special Contracts, are now placed under the head of Pa.rties, and form a portion of the first part. This alteration was made with the belief that it gives a more logi- cal development to the subject. In consequence of this fact, as well as of the great enlargement of the work, it became necessary to number the sections anew. But if it be borne in mind that the sections, in which the law relating to Agents and Partners is considered, followed, in the first edition, the chapter " On the Admissibility of Parol Evidence to control Xll ADVERTISEMENT TO SECOND EDITION. written agreements," it is believed that no difficulty wiU be found to arise from the new numbering. The kind reception given by the public and the profession to the previous edition of this treatise has stimulated and encouraged the author to endeavor to render the present edition more full and complete, and it is submitted to them in the hope that it may, in its present form, be found to be better adapted to their wishes and better deserving their approbation. W. W. STORY. Boston, August 27, 1847. PREFACE TO THE FIRST EDITION. The present work is inteuded, primarily, as a text-book for students, but it is by no means restricted in its scope or design to sucli a use. Its purpose is not only to sketch an elementary outline of the law relating to simple contracts, but to elucidate and systematize, as far as practicable, the general law applicable to the subject ; in the hope that it may serve alike the student and the practitioner. It is believed, that such a work is now needed by the profession, for new circumstances and exigencies so modify and expand every department of jurisprudence, as to require new expositions of the law, however valuable preceding treatises may have been. The plan of the present work has been to render cases sub- ordinate to principles, and, instead of pursuing the common method of merely digesting the various authorities, to throw the main body of them into the notes, and to incorporate those only in the text, which seemed to afford the best illustrations of the doctrine under consideration. The author acknowledges himself to be indebted for real and valuable assistance to the Commentaries of Mr. Chancellor Kent, and to the labors of Mr. Metcalf. The lectures of the former contain many admirable sketches on the subject of Contracts, which are characterized by the comprehensive learning and ability of that distinguished jurist. But they do not profess to be more than a general sketch of the law appertaining to Contracts, and they still leave a large field unoccupied. So, also, the articles upon Contracts by Mr. Metcalf, which were published in the American Jurist, are distinguished by nice discrimination, and lucid arrange- ment, and, had they been completed, would have rendered sir PREFACE TO THE FIRST EDITION, the present work unnecessary. And here I may, also, be permitted gratefully and affectionately to acknowledge the valuable aid which I have derived from the Commentaries of my father, Mr. Justice Story, — an aid which it is my pride as well as my pleasure to receive ; they have materially abridged my labors, and, in many instances, rendered further investi- gation unnecessary. With the most unfeigned diffidence, this treatise is now submitted to the profession, with the wish, that it may aid their researches, and with the hope, that they will not "measure by the scale of perfection, the meagre product of reality." Boston, June 17, 1844. CONTENTS OF YOLS. L, II. [THE FIGURES EEFEB TO THE SECTIONS.] VOLUME I. PART I. Contracts not under Seal, CHAPTER I. Section Different Kinds of Contracts 1-71 CHAPTER II. Of the Parties to a Contract 72-199 CHAPTER III. Contracts of Agents 200-277 CHAPTER IV. Contracts of Partners 278-327 CHAPTER V. Executors and Administrators 328-372 CHAPTER VI. Trustees 373-385 CHAPTER VU. Guardian and "Ward 386-389 CHAPTER VIII. Corporations 390-400 XVI CONTENTS. CHAPTER IX. Auctioneers 401-426 CHAPTER X. Brokers 427-433 CHAPTER XI. Factors 434-452 CHAPTER XII. Ship's Husband 453 CHAPTER XIII. Master of Ships 454-463 CHAPTER XIV. Change of Parties by Assignment 464-478 CHAPTER XV. Change of Parties by Novation or Substitution .... 479-488 CHAPTER XVI. Mutual Assent of the Parties 489-541 CHAPTER XVII. The Consideration 542-609 CHAPTER XVIII. Illegal Contract 610-749 CHAPTER XIX. Contracts in Violation of a Statute 750-770 CHAPTER XX. Construction of Contracts 771-818 CHAPTER XXI. Of the Admissibility of Parol Evidence to affect Written Agreements 818-830 CONTENTS. X\n VOLUME II. PAET II. Particulak Contracts. CHAPTER XXn. Preliminary 831 CHAPTER XXIII. Bailments. — Degrees of Negligence . 832-834 CHAPTER XXrV. Deposits 835-851 CHAPTER XXV. Mandate 852-857 CHAPTER XXVI. Gratuitous Loans 858-867 CHAPTER XXVII. Pawn or Pledge 868-880 CHAPTER XXVIII. Contract of Hire 881-888 CHAPTER XXIX. Locatio Operis. — Hire of Labor and Services .... 889-902 CHAPTER XXX. Innkeepers 903-914 CHAPTER XXXI. Common Carriers 915-960 CHAPTER XXXn. Carriers of Passengers 961-978 VOL. I. 6 XVIU CONTENTS. CHAPTER XXXIII. Postmasters and Mail Contractors 979, 980 CHAPTER XXXIV. Telegraph Companies 981-989 CHAPTER XXXT. Sale of Personal Property 990-993 CHAPTER XXXVI. The Price 994 CHAPTER XXXVII. Consent of the Parties 995, 996 CHAPTER XXXVIII. Of the Form of a Contract of Sale. — Statute of Frauds 997-1015 CHAPTER XXXIX. Delivery sufficient to transfer the Property in the Goods sold 101'6-1035 CHAPTER XL. Stoppage in Transitu lOSG-1049 CIIAITER XLI. Express and Implied "Warranty lOaO-1079 CHAPTER XLII. Fraudulent Misrepresentation or Couceaiment .... 1080-1084 CHAPTER XLTII. Eemedy for a Bi-each of the Contract of Sale .... 1085-1106 CHAPTER XLIV. Guaranty and Suretyship 1107-1112 CHAPTER XLV. Of the Form of a Contract of Guaranty or Suretyship. Statute of Frauds 1113-1118 CONTENTS. XIX CHAPTER XLVI. Guaranty of Rill of Exchange or Promissory Note . . 1119-1121 CHAPTER XL VII. Construction of the Contract of Guaranty or Suretyship 1122, 1123 CHAPTER XLVIU. Discharge of Party 1124-1139 CHAPTER XLIX. Eights of Surety and, Guarantor 1140-1152 CHAPTER L. Of the Appropriation of Payments 1153-1156 CHAPTER LI. Bills of Exchange and Promissory Notes 1157-1203 CHAPTER LH. Landlord and Tenant 1204-1211 CHAPTER LIII. Commencement, Extent, and Duration of a Lease . . 1212-1219 CHAPTER LIV. Eights and Liabilities of the Landlord 1220-1225 CHAPTER LV. Rights and Liabilities of the Tenant 1226-1250 CHAPTER LVL Of the Determination of the Tenancy 1251-1276 CHAPTER LVII. Assignment of the Lease 1273-1276 CHAPTER LVm. Rights and Liabilities of the Outgoing Tenant .... 1277-1283 CHAPTER LIX. Action of Assumpsit for Use and Occupation .... 1284-1288 XX CONTENTS. CHAPTER LX. Master and Servant 1289-129-1 CHAPTER LXI. Eights, Duties, and Liabilities of the Master .... 1295-1301 CHAPTER LXII. Eights, Duties, and Liabilities of the Servant .... 1302-1307 CHAPTER LXin. vant on Dissolution tract 1308-1316 Eights of Master and Servant on Dissolution of the Con- PAET m. Defences and Damages. CHAPTER LXIV. Defences, Preliminary 1317-1320 CHAPTER IJilV. Performance of a Contract 1321-1339 CHAPTER LXVI. Payment 1340-1352 CHAPTER LXVn. Eeceipts 1353 s CHAPTER LXVm. Accord and Satisfaction 1354-1358 CHAPTER LXrX. Arbitrament and Award 1359-1378 CHAPTER LXX. Pendency of another Action. — Former Judgment or Verdict 1379-1389 CONTENTS. XXI CHAPTER LXXI. Eelease. — Alteration 1390-1402 CHAPTER LXXn. Tender 1403-1413 CHAPTER LXXIII. Statute of Limitations 1414-1432 CHAPTER LXXIV. Statute of Frauds 1433-1467 CHAPTER LXXV. Set-off 1468-1471 CHAPTER LXXVI. Penalties and Liquidated Damages 1472-1478 CHAPTER LXXVII. Interest 1479-1494 Page Index Vol. II. 687 Cases Cited Vol. IL 755 PART I. CONTRACTS NOT UNDER SEAL. CONTRACTS NOT UNDER SEAL. CHAPTER I. DIFFERENT KINDS OF CONTRACTS. § 1. A CONTRACT is a deliberate engagement between com- petent parties, upon a legal consideration, to do, or to abstain from doing, some act.^ In its widest sense it includes records and specialties, but the term is usually employed to designate only simple or parol contracts. By parol contracts, is to be understood, not only verbal and unwritten contracts, but all contracts not of record nor under seal. This is strictly the legal signification of the term contract, inasmuch as the existence of a consideration which is necessary to constitute a parol agreement is not requisite, or rather is presumed, in obligations of record and in specialities.^ ' A better statement of the essentials of a simple contract has seldom been given than that in Comyn on Contracts, p. 2 : " 1st. A person able to contract. 2d. A person able to be contracted with. 3d. A thing to be con- tracted for. 4th. A good and sufficient consideration. 6th. Clear and explicit words to express the contract. 6th. The assent of both contracting parties." ' Chitty on Cont. (5th Am. ed.) 20. Chief Justice Marshall, in Sturges V. Crowninshield (4 Wheat. 196), defines a contract to be " an agreement in which a party undertakes to do or not to do a particular thing.'' This definition is intended to embrace all kinds of contracts, whether by record, specialty, or parol, and therefore omits the consideration. It seems impos- sible, however, to classify these three species of obligation under the generic term contract, since, as every definition must either state or omit the con- sideration, it must necessarily be incomplete as to the one or the other class. Blackstone's definition, "an agreement, upon sufficient consideration, to do or not to do a particular thing " (2 Black. Comm. 446), seems better in this particular, inasmuch as a deed may be considered as importing a considera- TOL. I. 1 2 niFFERENT KINDS OF CONTRACTS. [CHAP. I. § 2. Contracts are divided into three classes. 1st. Contracts of Record, such as judgments, recognizances, and statutes staple. 2d. Specialties, which are contracts under seal, — such as deeds and bonds. 3d. Simple Contracts, or contracts by parol. There is no such fourth class as contracts in writ- ing, distinct from verbal and sealed contracts ; both verbal and written contracts are included in the class of simple contracts, and the only distinction between them, at common law, is in regard to the mode of proofs § 3. The first two classes of contract we do not in the present treatise propose to discuss, but shall confine ourselves to the consideration of the principles applicable to simple contracts. It may be well, however, here to state, the various particulars in which simple or parol contracts are distinguished from specialties, or contracts under seal. § 4. In the first place, specialties do not require a considera- tion to render them obligatory at law ; while the consideration is tlie very life of a parol agreement. tion, although it be unnecessary to express it on the face of the instrument, and although both parties be estopped to deny it. Yet even this definition omits all mention of the competency of the parties, and of that deliberate assent of the understanding which is requisite to the validity of every con- tract, and therefore it seems imperfect. A contract is defined, by an able writer in the Law Magazine, as " a mutual engagement voluntarily and de- liberately entered into between two persons, at least, to do something bene- ficial to each otiier." 1 Law Mag. 581. Chitty, in his work on Contracts, gives a fuller and more elaborate definition, but it only includes parol con- tracts, and might rather be called a description than a definition. " A contract not under seal," he says, " is the mutual assent of two or more persons, competent to contract, founded on a sufficient and legal motive, jiiduceinent, or consideration, to perform some legal act, or omit to do any thing, the performance of which is not enjoined by law." Chitty on Cont. 7. Upon the whole, Blackstone's seems to approach nearest to a correct definition. The term obligation, which includes every legal tie, as distinguished from imperfect obligations, such as .ififection and gratitude, and natural obligations, which afford no legal remedy, would seem the better generic term, comprehending the different species of record, specialty, and parol contract. Custom has, however, aflixed to all species of legal obligation the term contract. See 20 Am. Jur. 1. ' Rann v. Hughes, cited in the note to 7 T. R. 350 ; Ballard uj Walker, 3 Johns. Cas. 65 ; Perrine v. Cheeseman, 6 Halsted, 17-4 ; People v. Sliall, 9 Cow. 778 ; Thacher d. Dinsmore, 5 Mass. 801. See Hunt v. Reynolds, 9 R.I 303 (1869). CHAP. I.] CONTRACTS UNDER SEAL. 8 § 5. In the second place, specialties must be sealed and delivered ; but a mutual understanding and assent are alone necessary to complete a parol contract. § 6. In the third place, the technical doctrine of estoppel obtains in respect to specialties. Neither party can go behind the 'instrument, and the recital therein of any material fact precludes the right to controvert it.^ In simple contracts, however, although an admission therein of a fact affords evi- dence of its truth, it may be disproved, and evidence may be given to controvert it.^ § 7. In the fourth place, in case of the death of either party to a specialty, the remedy by the ancient common law survives against the heir, if mentioned therein, and by statute against the devisee, and affects the realty ; ^ but the remedy on a parol contract extends only to the personal property of the contractor, and is binding only upon his personal representatives, namely, his executors and administrators. § 8. At the common law, also, a specialty debt is entitled to a priority over a simple contract debt in the payment of the debts of a testator or intestate,* although in many of the Amer- ican States the rule is altered by statute. § 9. In the fifth place, a deed must be declared upon spe- cially, and profert must be made, and the defendant is entitled to oyer thereof.^ But there is neither profert nor oyer in the pleadings on a simple contract. § 10. A parol contract, then, is any contract not of record, nor under seal, whether it be written or verbal. Certainty, ' 2 Black. Comm. 295 ; Comyns's Dig. Estoppel, A. ; Taylor v. Clow, 1 B. & Ad. 223 ; Lainson v. Tremere, 1 Ad. & El. 792 ; Doe v. Ford, 3 Ad. 6 El. 649 ; Doe d. Preece v. Howells, 2 B. & Ad. 744 ; Bowman v. Taylor, 2 Ad. & El. 278 ; Hayne v. Maltby, 8 T. R. 438 ; Cox v. Cannon, 4 Bing. N. C. 453; 6 Scott, 347; 6 Dowl. 625; Levy u. Home, 3 Q. B. 760; Carter v. James, 13 M. & W. 137 ; Beckett v. Bradley, 8 Scott, N. R. 843; 7 Man. & Grang. 994; Carpenter v. BuUer, 8 M. & W. 209. = Parish v. Stone, 14 Pick. 201, 202. ' Bac. Abr. Heir, F. 1, Ancestor, F. ; 2 Black. Comm. 243; Jefferson V. Morton, 2 Wms. Saunders, 6, n. 4, 8 a; Farley v. Briant, 3 Ad. & El. 839. * 2 Black. Comm. 465. ' 1 Chitty, Plead. (6th ed.) 397. 4 DIFFERENT KTNDS OP CONTRACTS. [CHAP. I. and facility of proof, are all the advantages gained by reducing such an agreement to writing,^ the liabilities of the respective parties are not changed.^ EXPRESS AND IMPLIED CONTRACTS. § 11. Every contract is founded upon the mutual agreement of the parties ; and that agreement may either be formally stated in words, or committed to writing, or it may be a legal inference, drawn from the circumstances of the case, in order to explain the situation, conduct, and relations of the parties. When the agreement is formal, and stated either verbally or in writing, it is usually called an express contract. When the agreement is matter of inference and deduction, it is called an implied co)itntct. Both species of contract, are, however, equally founded upon the actual agreement of the parties, and the only distinction between them is in regard to the mode of proof, which belongs to the law of evidence. In an implied contract, the law only supplies that which, although not stated, must be presumed to have been the agreement intended by tiie parties.^ It is on a similar ground that if the contract is silent as to time, a reasonable time is always intended.* ' The learned author is here speaking, of course, of contracts at commott law, and not of such as by some statute, as the statute of frauds for in- stance, must be in writing. ^ Skynner, C. B., in delivering the opinion of the court, in Rann v. Hughes, cited in the note to 7 T. R. 3.")0, says, " All contracts .are, by the law of England, distinguished 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. If they be merely written, and not specialties, they are parol, and a consideration must be proved." See, however, Stackpole v. Arnold, 11 Mass. 30, where the late Chief Justice Parker says, " There are three classes of contracts ; namely, special- ties, written contracts not under seal, and parol or verbal contracts.'' This classification, however, was only employed in relation to the particular point before the court, and does not agree with the established authorities. L'ook V. Bradley, 7 Conn. 57 ; People v. Shall, 9 Cow. 778 ; Burnet v. Bisoo, 4 Johns. 235 ; Thacher v. Dinamore, 5 Mass. 301 : Brown v. Adair, 1 Stew. & Port. 51. See 20 Am. Jur. 4. ^ 2 Black. Comm. 443. In the Roman law, implied contracts are entitled, " Ohligationes quasi ex contractu." Church v. The Imperial Gas Light Co., 6 Ad. & El. 859. " Fordt). Colesworth, 9 B. & S. 559. CHAP. I.] EXPRESS AND IMPLIED CONTRACTS. 5 § 12. The law always presumes such agreements to have been made as justice and reason would dictate, and assists the parties to any transaction in an honest explanation of it.^ Or, as sometimes stated, the law implies a promise, wherever there is an antecedent legal duty and obligation ; ^ or a promise may be implied wherever a relation exists between two parties which involves the performance of certain duties by one of them, and a payment therefor by the other.^ But a promise will not be implied, contravening the express declarations of the party charged, made at the time of the supposed agree- ment,* unless such declarations be at variance with some legal duty, and then the law will imply a promise to perform that duty ; as where a husband wrongfully expels his wife or minor child from his house, and declares that he will not be respon- sible for articles furnished to them, the law sets his declaration at naught, and compels him to pay for necessaries furnished to them.^ W herever a party avails himself of the benefit of ser- vices done for him, although without his positive autliority or request, the law supplies the formal words of contract and presumes him to have promised an adequate compensation ; ^ as where a person buys an article without stipulating for the price, he is presumed to have undertaken to pay its market value ; or where he allows another to do any work or make any article for him, he impliedly binds himself to pay what it is worth ; '' or where he holds the money of another as trustee or • Chief Justice Marshall, in Ogden v. Saunders, 12 Wheat. 3tl, says, " A great mass of human transactions depend upon implied contracts, which are not written, but grow out of the acts of the parties. In such cases, the parties are supposed to have made those stipulations which, as honest, fair, and just men, they ought to have made." As where the gov- ernment takes private property for public uses. United States v. Russell, 13 Wall. 623. " Kelby ». Andrew, 43 Miss. 342 ; Clutterbuck v. Coffin, 3 M. & G. 842. ' See Morgan v. Ravey, 6 H. & N. 265. ■• Whiting V. Sullivan, 7 Mass. 107 ; Worthen v. Stevens, 4 Mass. 448 ; 3 Starkie, Ev. 1763 ; Selway v. Fogg, 5 M. & W. 83. " Robison v. Gosnold, 6 Mod. 171; Harris v. Morris, 4 Esp. 42; 2 Kent, Comm. 125, 126; Thompson u. Hervey, 4 Burr. 2178; Angela McLellan, 16 Mass. 31 ; Van Valkinburg v. Watson, 13 Johns. 480. ' " Abbot V. Hermon, 7 Greenl. 121 ; Brackett v. Norton, 4 Conn. 624. Fisher ». School Dist. No. 17, 4 Cush. 494. ' The law does not so readily imply a contract to pay for labor and ser- 6 DIFFERENT KINDS OP CONTRACTS. [cHAP. I. bailee, the law supposes a promise to restore it. So if services are rendered gratuitously, and without any agreement for com- pensation, express or implied, no action lies on a quantum me- ruit, however beneficial the service to the defendant.^ So, also, where a person engages to do any work or perform any service, he is understood to engage that he has sufficient skill and ability to fulfil his contract,^ and, also, that he will use all the means necessary to accomplish it.^ So, also, if a party of friends meet to dine at a tavern, and give a joint order for dinner, and after dinner all but the plaintiff depart without paying, and the plaintiff" pay for all, he may maintain an action against the others on an implied promise by them to pay their several proportions of the joint liability.^ So, also, each party would be responsible to the innkeeper on an implied promise to pay the reckoning, unless it were known that all were guests vices rendered by one's relatives, or for board furnished a, relative, as in other cases where no such relation exists. See Hartman's Appeal, 3 Grant, 271 ; Butler v. Slam, 50 Penn. St. 456 ; Dufifey v. DuflFey, 44 Penn. St. 399 ; Perry v. Perry, 2 Duv. 312 ; Smith v. :Milligan, 43 Penn. St. 107 ; Updike V. Titus, 2 Beasl. 151. It raises no implied promise in a parent to pav a child who remains in his family after he is of age ; the child m.ust prove an express promise. See Ridgway v. English, 2 Zab. 409 ; Williams v. Hutch- in.son, 3 Comst. 312; Robinson v. Cushman, 2 Deiiio, lo2. But an agree- ment by the father that his son should be paid out of his estate, after his death, is valid. Updike v. Ten Broeck, 3 Vro mi, 105. This rule applies to adopted children. Lunay u. Vantyne, 40 Vt. 501 (1868). If one performs labor for another, merely with the hope and expectation of receiving a legacy from him, it is said there is no implied contract to pay for such ser- vices, if no legaoy be given in the will. Davison v. Davison, 2 Beasl. 246 ; Kennard v. Whitson, 1 Houst. 36. But special circumstances may modify this doctrine. See Robinson v. Raynor, 28 jST. Y. 494. There is no implied contract that a surety shall be paid by his principal for the use of his name; but the law allows the parties to make an express contract to that effect. Perrine v. Hotchkiss, 58 Barb. 77 (1870). ' Pendleton v. Empire Stone Dressing Co., 19 N. Y. 13 ; Hodges v. Rutland & Burlington Railroad Co., 29 Vt. 220 ; James v. O'Driscoll, 2 Bay, 101 ; Lee r. Lee, 6 Gill & Jolins. 309 ; Defrance v. Austin, 9 Penn. Si. .309; Bartholomew v. Jackson, 20 Johns. 28. " See post, § 891, 1330, and cases cited. ^ Savage v. Whitaker, 15 Me. 24. * Per Lord Kenyon, 8 T. R. 614 ; Forster v. Taylor, 3 Camp. 49. CHAP. I.J EXPRESS AND IMPLIED CONTEACTS. 7 of one, — ill which case, as credit would have been given but to the inviter, he alone would be liable.^ So, too, an agent who has collected money for his principal, even upon an illegal contract, is under an implied obligation to pay the same to his principal.^ § 13. So, also, if a man having a title to certain property silently permit another to deal with that property as his own, in all transactions between such person and others, acting in the confidence that the property belonged to him, the true owner would be bound. Thus, if a man stand by and know- ingly see his own property sold, and either encourage the sale, or do not forbid it, the law implies a contract between him and the vendee, and accredits the actual seller as his agent ; and this rule obtains on the clear ground, that if one of two inno- cent persons must suffer a loss, and a fortiori, where one has misled the other, he who has been the cause of the loss ought to bear it.^ But in all cases, the circumstances must be such as unequivocally to imply a contract between the parties, and evidence may be given to rebut such a presumption. § 14. So, also, the mere silence of a person may create an implied liability, where it was his duty to speak in case he in- tended not to assume a personal responsibility, and especially where his silence afforded a material inducement to the con- tract. Thus, where A., wishing to buy a harness, invited C. to accompany him to a harness-maker, and there induced the harness-maker to sell him the harness on credit, by an assur- ance, in O.'s presence, that if he did not pay, 0. would, — and A. having made default, C. paid the money and brought his action against A. to recover the amount paid, — it was held, that as C. stood by and tacitly assented to A.'s promise of payment, he must be taken to have given him an express ' Roll. Abr. 24, 31. » Caldwell V. Harding, 1 Lowell, 326 (1869). The published time-tables of a railroad company also constitute a contract on behalf of the company with those who act upon them that the trains run as therein stated. Dentou V. Great Northern Railw. Co.. 5 El. & Bl. 860 (1856). Post, § 970. ' Teasdale v. Teasdale, Sel. Ch. Cas. 69 ; 1 Story, Eq. Jur. § 385 ; Storrs V. Barker, 6 Johns. Ch. 166, 169 ; Wendell v. Van Rensselaer, 1 Ji.hns. Ch. 354; Heane ». Rogers, 9 B. & C. 686 ; Graves v. Key, 3 B. & Ad. 318, note a; Pickard v. Sears, 6 Ad. & El. 474. See Nicholson v. Hooper, 4 M. & Cr. 179. 8 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. authority ; and 0. having acted thereon, the law would imply a promise from A. to repay the money. ^ § 15. So, also, although a merely voluntary and unauthor- ized payment of the debt of a third person ordinarily raises no implied promise on the part of such person to repay it,^ yet there are certain cases, where the debt was legally obligatory, and the payment was by compulsion of law, in which the law will import a request from the original debtor and a promise of repayment.^ Thus, where a carriage belonging to the plain- tiff was sent to the defendant, a coach-maker, to be repaired, and while in his possession it was distrained by his landlord for rent due from the defendant, and the plaintiff was forced to pay the rent in order to redeem his carriage, it was held, that he might reclaim the money so paid in an action of assumpsit against the defendant.* The same rule was held in a case where a sub-tenant was forced under a threat of distress to pay a ground-rent to the original lessor, which was due to his immediate landlord. ^ And where an executor paid a legacy in full, having inadvertently omitted to deduct the legacy duty required by act of Parliament, it was held that the legatee was responsible tlierefor.^ § 16. A fortiori, where there is a special privity of con- tract, as in the case of sureties, or joint and several debtors, or indorsers and acceptors of a negotiable security, a payment by one raises an implied promise of contribution by the others," ' Alexander v. Vane, 1 M. & W. 511. ' Bancroft v. Abbott, 3 Allen, 52-1 ; Richardson v. Williams, 49 Me. 658 ; South Scituate v. Hanover, 9 Gray, 420 ; England v. Marsden, Law R. 1 C. P. 529 (1.S66) ; distinguishing Exall v. Partridge, 8 T. R. 308. ' Exall V. Partridge, 8 T. R. 308 ; Sapsford v. Fletcher, 4 T. R. 511 ; Fisher «. Fallows, 5 Esp. 171 ; Hales v. Freeman, 4 Moore, 21; Foster V. Lev, 2 Ring. N. C. 269 ; Sutton v. Tatham, 10 Ad. & El. 27 ; Brown v. Hodgson, 4 Taunt. 189 ; Longchamp v. Kenny, 1 Doug. 137. " Exall V. Partridge, 8 T. R. 308. See also Morrill v. Derby, 34 Vt. 440; Gleason v. Dyke, 22 Pick. 390 ; Sargent v. Currier, 49 N. H. 310 (1870). ' Sapsford v. Fletcher, 4 T. R. 511. " Hales V. Freeman, 4 Moore, 21. ' Fishnr V. Fallows, 5 Esp. 171 ; Exall v. Partridge, 8 T. R. 308. In this case Lord Kcnyon says, " Some propositions have been stated to which CHAP. I.] EXPRESS AND IMPLIED CONTRACTS. -9 unless tlie sum paid is only the share of the person paying.^ So if an agent settles an account with his principal, in which the principal is charged with a payment by the agent of a debt due from the principal to a third person, when the same has not been paid, the law raises an implied contract between tlie agent and such third person to pay the debt, and the latter may maintain an action against him therefor.'^ But if one of two adverse claimants to the same fund receives it in his own name and for liimself, the other cannot recover it of him, as being received to his use, though justly entitled to it. Tlie law raises no implied contract in such a case to pay it over to the party who had the better claim.^ § 17. Whenever there is a uniform usage * in a particular trade, the parties are presumed to have contracted in reference thereto, unless it be expressly excluded by them, or unless it be inconsistent with the actual terms of their agreement.^ It I cannot assent. It has been said, that where one person is benefited by the payment of money by another, the law raises an assumpsit against the former; but that I deny : if that were so, and I owed a snm of money to a friend, and an enemy chose to pay that debt, the latter might convert himself into my debtor [creditor] nolens volens." ..." I admit that where one person is surety for another, and compellable to pay the whole debt, and he is called upon to pay, it is money paid to the use of the principal debtor, and may be recovered in an action against him for money paid, even though the surety did not pay the debt by the desire of the principal." See also Kemp V. Finden, 12 M. & W. 421 ; Prior v. Hembrow, 8 M. & W. 873. ^ Geopel V. Swinden, 13 Law Jour. (n. s.) Q. B. 113 ; Edger v. Knapp, 6 Scott, N. R. 707; 5 Man. & Grang. 753; Holmes v. Williamson, 6 M. & S. 158. ^ Putnam v. Field, 103 Mass. 556 (1870), distinguishing French v. Fuller, 23 Pick. 108. And see Frost v. Gage, 1 Allen, 262 ; Mellen v. Whipple, 1 Gray, 317. " Butterworth v. Gould, 41 N. Y. 450 (1869). And see Patrick v. Met- calf, 37 N. Y. 332 ; Exchange Bank v. Rice, 107 Mass. 37 (1871). Bradley V. Root, 5 Paige, 632 ; and New York Ins. Co. v. Roulet, 24 Wend. 505, incline the other way. * In respect to the effect of usage in modifying a contract, see post, §791. 5 Lewis V. Marshall, 8 Scott, N. R. 846 ; 7 Man. & Grang. 729 ; Spicer V. Cooper, 1 Q. B. 424; Sweet ». Lee, 3 Man. & Grang. 466; Trueman V. Loder, 11 Ad. & El. 589 ; Blackett v. R. E. Ins. Co., 2 Tyrw. 266 ; 2 C. & J. 244 ; The Bridgeport Bank v. Dyer, 19 Conn. 140. 10 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. must, liowever, be a general usage, or a universal custom, wliich'is brought home to the knowledge of the party defendant, or it must be the special course or habit of dealing of one of the parties, recognized and assented to by the other, or no svich presumption will arise. ^ In sucli cases, the usage is understood to form a portion of the contract, and to exclude a rule of law inconsistent with it. Thus, au established usage in the Bridgeport Bank not to send packages of money or checks to New York, by the mail, but by the captain of the steamboat, once a week, of which usage the party giving the check was informed, was held to be sufficient evidence of an agreement between the parties not to insist on the usual rule of law regarding the transmission of checks.^ In case a gen- eral usage is set up as modifying a contract, it must be proved to exist by instances, and cannot be supported by evidence of opinion merely.^ But whenever a particular course of dealing has been uniformly adopted between two parties, any contract made between them will be presumed to be made on the basis of such usage.'* Thus, if in a particular branch of trade it be uniform usage to sell upon a certain credit, a contract of sale, in which nothing is said as to the terms of payment, will be supposed to be made upon such credit.^ But a distinction must be noticed between a general usage and the customary act of a party. There is no implied contract, for instance, that, a gas company shall continue to supply its customers, in the absence of any statutory duty of that character, merely because they have been accustomed to do so.^ 1 Wood V. Wood, 1 C. & P. 59 ; Moore v. Vougliton, 1 Stark. 487 ; Scott V. Irving, 1 B. & Ad. 605 ; Chitty on Cont. 20; Stewart v. Aberdein, 4 M. & W. 211; The Reeside, 2 Sumner, 569; Macomber v. Parker, 13 Pick. 182; Scwall v. Gibbs, 1 Hall, 612. 2 The Bridgeport Bank v. Dyer, 19 Conn. 137. See also Bodfish v. Fo.x, 23 Me. 90. 8 Cunningham v. Fonblanque, 6 C. & P. 44 ; Hall v. Benson, 7 C. & P. 711. * Bruce v. Hunter, 3 Camp. 467 ; Eaton v. Bell, 5 B. & Al. 34; Chitty on Cont. 22 ; post, § 794 to 801. 5 Swancott V. Westgarth, 4 East, 75 ; Gordon v. Swan. 2 Camp. 429, n. " MoCune v. Norwich City Gas Co., 30 Conn. 521 (1862). CHAP. I.] EXPEESa AND IMPLIED CONTRACTS. 11 § 18. These promises of law, however, only supply omissions, and do not alter express stipulations. The general rule is, that a contract will be implied only when there is no express contract, " expressum facit cessare taciturn. " If, therefore, there be an express contract between the parties, the plaintiif, in an action to recover the consideration for work and labor done, or for money pai4, must declare specially thereupon ; and so long as that contract remains unrescinded, he cannot recover the value of his services upon a quantum meruit.'^ Yet if the special contract be wholly abandoned, or its terms be varied by the mutual consent of the parties, the law implies a new promise.^ Tims, if work additional to that contemplated in the original contract be done at the request of the party benefited by it, he will be liable therefor, upon an implied promise to pay for it.* So, also, where either party to an express contract is injured, or the labor or expense sustained by him in doing the work is enhanced by the neglect or omission of the other, an implied promise of indemnity there- for will arise, additional to the express agreement.^ So, also, if entire performance, according to the express agreement, be rendered impossible through the fault of either party, the party in fault will be liable on a quantum meruit, or other action on the case, the compensation being graduated as far as possible by the terms of the express contract. ' Starke v. Cheeseman, Lord Rayra. 538 ; Toussaint v. Martinnant, 2 T. R. 105 ; Whiting v. Sullivan, 7 Mass. 107 ; Cutter v. Powell, 6 T. R. 320; Cowley V. Dunlop, 7 T. R. 668 ; Cook v. Jennings, 7 T. R. 884 ; Chitty oa Cont. 25 ; Trask v. Duvall, 4 Wash. C. C. 185 ; Moorsom v. Kymer, 2 M. & S. 316; Standen v. Chrismas, 10 Q. B. 135; Creighton v. Toledo, 18 Ohio St. 447 ; Harris v. Story, 2 E. D. Smith, 364 ; Churchward v. The Queen, Law R. 1 Q. B. 173 (18G5) ; Hubbell v. Warren, 8 Allen, 173. 2 Rees V. Lines, 8 C. & P. 125 ; Selway v. Fogg, 5 M. & W. 83 ; Smith V. Smith, 1 Sandf. 206. 3 Goodrich v. Lafflin, 1 Pick. 57 ; HUl v. Green, 4 Pick. 114 ; 20 Am. Jur. 8. * Lovelock B. King, 1 Mood. & Rob. 60 ; Dubois v. Del. & Hud. Can. Co., 12 Wend. 334 ; Damon v. Granby, 2 Pick. 345 ; Hoadley v. McLaine, 4 Moo. & S. 3t0; Smith v. Smith, 1 Sandf. 206. « Lovelock V. King, 1 Mood. & Rob. 60 ; Dubois t>. Del. & Hud. Can. Co., 12 Wend. 334 ; Damon v. Granby, 2 Pick. 345 ; Hoadley v. McLaine, 4 Moo. & S. 340 ; 10 Bing. 482. 12 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. § 19. Again, if in a written contract the words of recital or reference manifest a clear intention that the parties sliall do certain acts not expressly stipulated, the courts have therefrom inferred a covenant to do such acts and have sustained actions of covenant for their non-performance, in like manner as if the instrument had contained express covenants to perform them.i But wliere parties have made an express agreement to perform certain acts, it is not to be extended by implication, so as to embrace all other unstipulated acts, which may be either con- venient or necessary to the perfect performance of their express covenants ; for it may very naturally happen, and indeed such is tlie presumption, that, having expressed some, they have expressed all the conditions by which they intended to be bound, and that what is omitted forms as much a part of the intention as what is stipulated. ^ Thus, wliere the plaintiff, by a written contract, agreed with the defendant to manufacture for the latter a certain quantity of cement, for which the latter agreed to pay him four pounds weekly during the two years following the date of the agreement, and five pounds weekly during the subsequent year, after which the defendant agreed to receive the plaintiif into partnership ; and each party bound himself in a penal sum to fulfil the engagement, it was held, that the stipulation in the agreement did not raise an implied covenant that the defendant should continue the business and should employ tlie plaintiff therein during two or three years, but only, that he would pay weekly sums for three years to the plaintiff, on condition of his performing certain duties, and that so long as the plaintiff was ready and willing to perform them, he was entitled to recover such wages.^ 1 Aspdin V. Austin, 5 Q. B. 685 ; Dunn v. Sayles, ib. 685 ; Sampson v. Easterby, 9 B. & C. 505 ; 6 Bing. 644 ; Saltoun v. Houstoun, 1 Bing. 433 ; Duke of St. Albans v. Ellis, 16 East, 352 ; Earl of Shrewsbury v. (iould, 2 B. & Al. 487. ' Aspdin V. Austin, 5 Q. B. 684; Dunn v. Sayles, 5 Q. B. 685; Pilking- ton V. Scott, 15 M. & W. 657. 8 Aspdin V. Austin, 5 Q. B. 671. But see Regina v. Welch, 2 El. & B. 357 ; Emmens v. EldiTton, 4 H. L. Cas. 624. In this case Cronipton, J., said: "The cases of Aspdin v. Austin, 5 Q. B. 671, and Dunn v. Sayles, Ib. 685, must, I think, be considered as decided upon the construction of CHAP. I.J EXPRESS AND IMPLIED CONTRACTS. 13 § 20. But when the terms of a written contract are incom- plete, so as to work an injury to one of the parties, if strictly construed, the law will imply such stipulations as would be necessary to cai'ry into effect the manifest intentions of the parties, and the essential objects of the contract. Thus, if a workman contract to work for his employers for a period of twelve months, with a stipulation that he will work for no one else during that time, and in consideration of his good and faithful services, his employers agree to pay him such wages as the articles he makes shall be worth, at the usual prices for similar work, — the law will imply a stipulation to find reason- able work and employ the workman during such time.^ If it be " agreed " between A. and B. that B. shall pay A. a sum of money for his lands on a particular day, this amounts to an implied contract by A. to convey the lands to B., since " agreed " is the word of both.^ So an agreement by B. to "furnish" P. a stated quantity of ore, raises an implied con- tract in F. to accept the ore.^ § 21. So, if there be a failure of consideration to support the express contract, or if it be determined by the occurrence of some event provided for in its terms, then an implied under- taking may be raised. So, if the express promise be merely coextensive with the implied contract, an action upon either the particular covenants, and the peculiar circumstances appearing in those cases. If they are to be taken as deciding that there is no obligation on the part of the employer to continue the relation between the parties in cases like the present, or that, where there is an agreement to employ and serve for a specified time, at a specified salary, an action is not maintainable against the employer immediately for a wrongful termination of the relation, but that the party discharged, instead of suing for damages immediately, must wait, and remain idle for the specified period, and then sue for the salary as a sum certain, I should think that they ought not to be supported in a court of error." ' Regina v. Welch, supra; Pilkington v. Scott, 15 M. & W. 657. But see Elderton v. Emmens, supra. ' Pordage v. Cole, 1 Saund. 819 I. And see Richards v. Edick, 17 Barb. 261. 8 Barton v. McLean, 6 Hill, 256. And see Whidden v. Belmore, 50 Me. 360 (1863) ; Mclntyre v. Belcher, 14 C. B. (n. s.) 65i. 14 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. will be sustained.! Thus, an action for money had and .received will lie upon a promissory note or bill of exchange, and a declaration on the special agreement is unnecessary .2 So, where the illegality of consideration invalidates an express agreement to pay a just debt, antecedently due, a promise will be implied to pay the debt founded upon the original consid- eration. Thus, where an agreement was made, by which an attorney was to receive for his services ten per cent upon the sum recovered, although the agreement was void from cham- perty, it was held, that he might recover, upon a quantum mer- uit, for his services up to the time when the agreement was entered into.^ But if an express contract be avoided on account of fraud, no contract will be implied in contradiction thereof, because no person can be presumed to have made an implied promise at variance with his express agreement."' If, therefore, money have been advanced or goods parted with upon a fraud- ulent contract, the plaintiff should treat it as a nullity,^ and bring an action of trover to recover the money or the goods, or an action for money had and received to recover the money. For, by bringing an action of assumpsit on the contract, he affirms it, and destroys the very ground for recovery.'' EXECUTED AND EXECUTORY CONTRACTS. § 22. Contracts are also distinguished into executed and executory contracts. An executed contract is one in which nothing remains to be done by either party, and where the transaction is completed at the moment that the agreement is made, — as where an article is sold, and delivered, and pay- ' Gibbs V. Bryant, 1 Pick. 119 ; Cornwall v. Gould, 4 Pick. 444; Gordon V. Martin, Fitz-Gib. 303 ; Guy v. Gower, 2 Marsh. 275 ; Bank of Columbia V. Patterson's Adm'r, 7 Cranch, 299. = Gibbs B. Bryant, 1 Pick. 121 ; Goodrich v. Lafflin, 1 Pick. 67 ; Lin- ningdale v. Livingston, 10 Johns. 36. ' Thurston v. Percival, 1 Pick. 415. * Sehvay v. Fogg, 5 M. & W. 83 ; Ferguson v. Carrington, 9 B. & C. 69 ; Campbell v. Fleming, 1 Ad. & El. 40. ' See Grannis v. Hooker, 31 Wis. 474 (1870). ' Ferguson v. Carrington, 9 B. & C. .59 ; Campbell v. Fleming, 1 Ad. & El. 40; Story on Agency, § 259, note (2), 2d edition. CHAP. I.] EXECUTED AND EXECUTORY CONTRACTS. 15 ment therefor is made on the spot.^ Contracts to sell personal property are executory, while a completed sale by delivery is executed ; but the language used in an agreement about the sale may not always be decisive whether the one or the other is meant.^ An executory contract is a contract to do some future act, — as where an agreement is made to build a house in six months, or to do an act on or before some future day, or to lend money upon a certain interest payable at a future time.^ Where the contract is executory, if the agreement be that one party shall do a certain act, or acts, for the performance of which the other party shall pay a sum of money, the perform- ance of the act is a condition precedent to the payment of the money.* § 23. There is also a class of contracts, partaking of the nature both of executory and of executed contracts ; where a portion of a contract is entirely performed, and a portion of the consideration paid, and still another portion remains to be completed, and its equivalent consideration to be paid. Thus, for instance, where a shipwright engages to build a ship, in consideration that certain instalments of the price shall be paid at stated times dur^ing the progress of the work, — after the payment of one instalment, the contract is so far executed, that if the vessel be destroyed in the hands of the builder, the money paid cannot be reclaimed ; but the contract is at the same time executory as to the remainder of the vessel, which the builder is bound to go on and complete." ' " An executed contract is one, in which the object of the contract is performed." By Marshall, C. J., Fletcher v. Peck, 6 Cranch, 136. 2 See Blasdell v. Souther, 6 Gray, 152 ; Pettingill v. Merrill, 47 Me. 109 ; Gregory v. Stryker, 2 Denio, 628 ; Benford v. Sanner, 40 Penn. St. 9 ; Carnes v. Apperson, 2 Sneed, 662; Love rj. Crook, 27 Ala. 624; Terry v. Wheeler, 25 N. Y. 520 ; Allen v. HoUis, 31 Geo. 143. 2 Plowden, R. 9 ; 2 Black. Comni. 447. * Willington v. The Inhab. of West Boylston, 4 Pick. 101; Hunt v. Livermore, 5 Pick. 395. " Clarke v. Spence, 4 Ad. & El. 448 ; 6 Nev. & Man. 399 ; Laidler v. Burlinson, 2 M. & W. 614 to 617 ; Goode v. Langley, 7 B. & C. 26 ; Sim- mens V. Swift, 5 B. & C. 857 ; Mucklow v. Mangles, 1 Taunt. 318 ; Woods «. Russell, 5 B. & Al. 942 ; Seymour v. Montgomery, 1 Keyes, 463 ; Wil- kinson on the Law of Shipping, ch. 2 ; Story on Sales, § 232 to 236. See Read v. Fairbanks, 24 Eng. Law & Eq. 220. 16 DIFFERENT KIND3 OF CONTRACTS. [CHAP. I. § 24. Again, a contract may be executory on one side, and executed on the other. As where an article is sold on credit and delivered to the buyer, or where wages for a certain amount of work are paid before the work is done. ENTIRE AND DIVISIBLE CONTRACTS. § 25. There is also another distinction, namely, that between entire contracts and divisible contracts, which it may be well to advert to in this place, inasmuch as it modifies the rights and alters the remedies of the parties thereto.^ A divisible contract is a contract the consideration of which is, hy its terras, suscepti- ble of apportionment on either side so as to correspond to the unascertained consideration on the other side : as a contract to pay a person the worth of his services, so long as he will do certain work ; or to give a certain price for every bushel of so much corn as corresponds to a sample ; or to work, at a cer- tain price per month, for an indefinite, or even a specified,^ number of months.^ The criterion of a divisible contract is, that the extent of the consideration on either side is indeter- minate until the contract is performed.* Neither party to such a contract can claim more than an equivalent for the actual consideration on his part. No specified entirety of considera- tion on either side constitutes a condition of the bargain, but only a certain relation and proportion between the considera- tions on both sides, to be ascertained on the completion of the contract. Thus, in the instances just stated, there is no total quantity of work, and no exact number of bushels of corn, and no total price specified, but the price is to be adjusted so as to become an equivalent for the labor or the corn, after the con- ' If a contract be one and entire, and a portion of it is invalid under the statute of frauds, it cannot be divided so as to allow an action upon a part not so void. Hodgson v. Johnson, EL, Bl. & El. Gyf) (lKo8). But if a contract consists of two collateral agreements, only one of which relates to an interest in land, then if that part of the contract has been executed, the fact that the whole contract was not in writing will not preclude an action on the other part, founded on such a promise, to be performed after such execution. Green «. Saddini;ton, 7 El. & Bl. 603. = Davis V. Maxwell, 12 Met. l'SU. ' Nichols V. Coolahan, 10 Met. 449. * See More v. Bonnet, 40 Cal. 261 (1870). CHAP. I.J ENTIRE AND DIVISIBLE CONTRACTS. 17 tract is performed. The workman might, therefore, leave oiF his work at any time and claim the worth of his services, because the payment therefor is not conditioned on a perform- ance of the whole amount of work to be done. If, then, the thing to be done is in its nature apportionable, and no entire sum has been fixed as the price therefor, the contract will be held to be apportionable. Thus, where the plaintiff was em- ployed to repair a ship, and no total sum for the entire repairs was fixed, and after having done a portion of the work, he refused to go on until he should be paid therefor, it was held that he could recover a quantum meruit} But if the party ' Roberts v. Havelock, 3 B. & Ad. 404. In this case Lord Tenterden said, " I have no doubt that the plaintiff in this case was entitled to recover. In Sinclair v. Bowles (9 B. & C. 92), the contract was to do a specific work for a specific sum. There is nothing in the present case amounting to a contract to do the whole repairs, and make no demand till they are com- pleted. The plaintiff was entitled to say, that he would proceed no further with the repairs till he was paid what was already due." Mr. Smith, in his Leading Cases, vol. 2, p. 13, note, after referring to this case, goes on to say, in respect to Lord Tenterden's language: "From these words it may be thought that his Lordship's judgment proceeded on the ground that the per- formance of the whole work is not to be considered a condition precedent to the payment of any part of the price, excepting when the sum to be paid and the work to be done are both specified (unless, of course, in case of special terms in the agreement expressly imposing such condition) ; and certainly good reasons may be alleged in favor of such a doctrine, for when the price to be paid is a specified sum, as in Sinclair v. Bowles, it is clear that the court and jury can have no right to apportion that which the parties themselves have treated as entire, and to say that it shall be paid in instal- ments, contrary to the agreement, instead of in a round sum, as provided by the agreement; but, where no price is specified, this difficulty does not arise, and perhaps the true and right presumption is, that the parties intended the payment to keep pace with the accrual of the benefit for which payment is to be made. But this, of course, can only be where the consideration is itself of an apportionable nature, for it is easy to put a case in which, though no price has been specified, yet the consideration is of so indivisible a nature, that it would be absurd to say that one part should be paid for before the "remainder; as where a painter agrees to draw A.'s likeness, it would be absurd to require A. to pay a ratable sum on account when half the face only had been finished : it is obvious that he has then received no benefit, and never will receive any, unless the likeness should be perfected. There are, however, cases — that, for instance, of Roberts v. Havelock — -in which vol.. I. 2 18 DIFFERENT KINDS OP CONTRACTS. [CHAP. I. employed for an entire term be injured and disabled in the work, he can recover for the actual time of his service, with- out offering to complete the work after his recovery, pi-ovided the illness was of such severity and duration that the employer was not bound to receive him.^ If, therefore, money be ad- vanced on a divisible contract, in contemplation of an execu- tory consideration, which subsequently fails in part, the excess above the value of the consideration actually performed may be recovered. § 26. An entire contract is a contract the consideration of which is entire on both sides. The entire fulfilment of the promise by either, in the absence of any agreement to the con- trary,^ or waiver,'^ is a condition precedent to the fulfilment of any part of the promise by the other.* Whenever, therefore, there is a contract to pay a gross sum, for a certain and defi- nite consideration, the contract is entire, and is not apportion- able either at law or in equity. The principle upon wliich this rule is founded seems to be, that as the contract is founded upon a consideration de[iendent upon the entire performance thereof, if from any cause it be not wholly performed, the casus foederis does not arise, and the law will not make provi- sion for exigencies against which the parties have neglected to fortify themselves.^ Thus, where an employer hired a sailor the consideration is in its nature apportionable, and there, if no entire sum have been agreed on as the price of the entire benefit, it would not be unjust to presume that the intention of the contractors was that the remuneration should Ifeep pace with the consideration, and be recoverable toties qiiolies by action on a quantum meruit.'''' See also Sicliels v. Patlison, 14 Wend. ii.57 ; Withers v. Reynolds, 2 B. & Ad. 882 ; Farnsworth i-. Garrard, 1 Camp. IW ; Baxendale u. Great Eastern Ry. Co., Law R. 4 Q. B. 244 (1869) ; Briggs r. Titus, 7 R. I. 441. ' Hubbard v. Belden, 27 Vt. 645 (1855) ; Fenton v. Clark, 11 Vt. .i.i7 ; Robinson!?. Davison, Law R. 6 Exch. 2t)'J (1871). See post, § 51; Patrieli V. Putnam, 27 Vt. 7.59 (18.i,!.). 2 Whitcomb v. Gilman, 35 Vt. 297 (1862) ; Provost v. Harwood, 29 Vt. 219 (1857). » CahiU V. Patterson, .30 Vt. 592 (1858). ^ But the employer, in case of a voluntary abandonment of such a eon- tract by the servant, may waive his advantage, as by a tender of payment for the actual time of service. Patnote v. Sanders, 41 Vt. 66 (1868). " 1 Story, Eq. Jur. 470 ; Ex parte Smyth, 1 Swanst. 338 ; and the reporter's note and cases cited. 1 Wms. Saunders, 320 d, note (c) ; Chanter v. Leese, 4 M. & W. 295 ; 5 M. & W. 698. CHAP. I.] ENTIRE ANp DIVISIBLE CONTRACTS. 19 by a written contract to go a certain voyage, and do his duty on board during the whole of the voyage, for which he agreed to give him thirty guineas, and the sailor died before the voy- age was finished, it was held that the contract was entire, and that the whole service, which was a condition precedent to the payment of the wages, not having been performed, no part of the thirty guineas could be recovered.^ But this case may be explained by the fact that the thirty guineas was an extra price for the voyage, much larger than the ordinary wages would amount to for the length of such a voyage, and that both par- ties understood and intended that the contract should be entire, and that the sailor should take the risk of the whole voyage. In other tribunals, and in cases where there is no expressly entire contract, the death, or sickness of the laborer, is a sufficient excuse for non-performance, and he may recover pro tanto, for the time he has labored.^ However, if the con- tract is positive and absolute, it must be performed, though it may have become unexpectedly burdensome, or impossible, by unforeseen events ; or the contractor will be liable in damages for the breach.^ And after performance the party is not required to make up lost time before he can claim what is ' Cutter V. Powell, 6 T. R. 326 ; 3 Vin. Abr. Apportionment ; Appleby V. Dods, 8 East, 800; Abbott on Shipping (Story's ed. 1829), 447, n. 1; Grimman v. Legge, 8 B. & C. 326 ; 2 Man. & Ry. 488 ; Paradine v. Jane, Aleyn, 26 ; Jennings v. Camp, 13 Johns. 94; Reab v. Moor, 19 Johns. 887 ; Faxon v. Mansfield, 2 Mass. 147 ; Stark v. Parker, 2 Pick. 267 ; Ex parte Smyth, 1 Swanst. 338 ; the reporter's note and cases cited. 2 Fenton », Clark, 11 Vt. 567 ; Fuller v. Brown, 11 Met. 440. 3 Brown v. Royal Ins. Co., 1 El. & El. 858 (1859) ; Hall v. Wright, El., B. & E. 746 (1858) ; Schwartz v. Sailnders, 46 111. 18 (1867) ; Taylor J). Caldwell, 3 B. «& S. 826 (1863). In this case the court held that the contract was not absolute. Blackburn, J., in delivering judgment said : " This rule is only applicable when the contract is positive and absolute, and not subject to any condition, either express or implied. And there are authorities which, as we think, establish the principle that 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 fulfil- ment of the contract arrived some particular specified thing continued to exist, so that when entering into the contract, they must have contemplated such continuing existence as the foundation of what was to be done ; then, in the absence of any express or implied warranty that the thing shall exist, 20 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. due.i So, also, if a party agree to work for a year, for the certain sum of one hundred and twenty dollars, and before the expiration of the year, abandon such agreement without the consent of the other party, he cannot recover upon a quantum meruit.'^ The same is true of a contract for teaching school for a definite term ; if the teacher leave before the term closes, without excuse, he can claim nothing for his part perform- ance.^ So, also, where a ship was let to freight at a certain rate per month, to be paid on her final discharge at the end of the voyage, and she was lost before the voyage was completed, it was held that no portion of the freight could be recovered.* A contract by a railroad company to furnish six cars, on notice, for an excursion party, for $56 each, has been held an entire contract, and a demand for only four was held not suffi- cient to make the company liable for not furnishing any.^ So a contract to deliver on board a vessel 100 tons of oil-cake, at $48 per ton, has been thought not complied with by tender- ing 107 tons and demanding payment for the whole.^ In all these cases, it is wholly immaterial whether the exact and com- the contract is not to be construed as a positive contract, but as subject to an implied condition that tlie parties shall be excused in case, before breach, performance becomes impossible from the perishing of the thing without default of the contractor." See Howell v. Knickerbocker Life Ins. Co., 44 N. Y. 276 (1B71) ; Clifford v. Watts, Law R. 5 C. P. 577 (1870), an in- teresting case containing a review of the authorities. See also § 51, post. 1 McDonald v. Montague, 30 Vt. 357 (1858). ^ Stark V. Parker, 2 Pick. 267; Waddington v. Oliver, 2 N. R. 61 Byrd v. Boyd, 4 McCord, 246 ; Willington v. West Boylston, 4 Pick. 103 Chandler v. Thurston, 10 Pick. 209; Shaw v. Turnpike Co., 2 Penn. 454 Huttman v. Boulnois, 2 C. & P. 510; Philbrook v. Belknap, 6 Yt. 383 Hair V. Bell, C Vt. 35 ; Winn v. ■Southgate, 17 Vt. 355 ; Aaron v. Moore, 34 Mo. 79 ; Olmstead v. Beale, 19 Pick. 628 ; Ranger v. Great Western Ry Co., 5 H. L. Cas. 72 (1854). But see contra, Britton v. Turner, 6 N. H. 481. '•^ Clark V. School District, 29 Vt. 217 (1857). * Byrne v. Pattinson, Abbott on Ship. 347. See also Smith v. Wilson, 8 East, 437 ; Mitchell v. Darthez, 2 Scott, 771; 2 Bing. N. C. 555; Gib- bon V. Mendez, 2 B. & Al. 17. See Taylor v. Laird, 1 H. & K. 266 (1856). ° Illinois Central Railroad Co. v. Demars, 44 111. 292 (1867). " Stevenson ». Burgin, 49 Penn. St. 36 (1865). See Whidden v. Belmore, 50 Me. 367 (1863), where less than was bargained for was tendered; Soloman ;;. Neidig, 1 Daly, 200. CHAP. I.j ENTIRE AND DIVISIBLE CONTRACTS. 21 plete performance of the whole contract be rendered impossible by overwhelming necessity, or be occasioned by the negligence of the party.i If the contract be not completely executed, no action can be maintained for the consideration. Nor is this doctrine confined to the common law ; for courts of equity have universally adopted the same rule, except in some few cases, in which there were peculiarly equitable circumstances, and which were founded in fraud, or surprise, or mistake.^ § 27. So, also, in contracts for labor and services, where a specific work is agreed to be done for a specific price, the work must be wholly completed before any portion of the price can be claimed ; unless performance was prevented or the contract was broken^ by the opposite party,* or unless there was a waiver by him.6 Thus, if a painter should agree to paint a picture for a certain price, he could not deliver the picture unfinished, and claim a portion of the price. ^ So, also, if A. agree to repair and make perfect a given article for a certain sum of money, he could recover nothing for partially repairing it.^ And the same is true if the party waive one of the terms of the contract ; he cannot afterwards allege a breach in this respect, and claim a ratable proportion of pay in case he does not com- plete the work.^ If, however, a party acting honestly and with 1 Paradine v. Jane, Aleyn, 26, 27. See 10 Am. Jurist, 251, 1833; Gilpins V. Consequa, 1 Pet. C. C. 91; Youqua v. Nixon, 1 Pet. C. C. 221 ; Ex parte Smyth, 1 Swanst. 338, and the reporter's note and cases cited. See Appleby v. Myers, Law R. 2 C. P. 651 (1867) ; Stubbs v. Holy- well Railway Co., Law K. 2 Exch. 311 (1867) ; Clark v. Gilbert, 26 N. Y. 279. 2 1 Story, Eq. Jur. 470 to 479. See Knauss v. Shiflfert, 58 Penn. St. 152 (1868). 8 Preble v. Bottom, 27 Vt. 249 (1856). See Hill v. Hovey, 26 Vt. 109 (1853). * Appleby v. Myers, Law R. 2 C. P. 651 (1867), in the Exchequer Chamber, reversing 1 C. P. 615 ; 8. c. Har. & R. 628. ° See Morrison v. Cummings, 26 Vt. 486 (1854) ; McClurg v. Price, 59 Penn. St. 420 (1868). 6 Cutter V. Powell, 2 Smith, L. C. 13, note. ' Sinclair v. Bowles, 9 B. & C. 92 ; 2 Wms. Saunders, 350 (n. 2) ; Mucklow V. Mangles, 1 Taunt. 316 ; Woods v. Russell, 5 B. & Al. 942 ; Farnsworth v. Garrard, 1 Camp. 88. See also Niblo v. Binsse, 44 Barb. 54 ; Jackson t. Cleveland, 19 Wis. 400 ; Cunningham v. Jones, 20 N. Y. 486 (1859) ; Smith v. Brady, 17 N. Y. 173 (1858). 8 Paige V. Fullerton Woollen Co., 27 Vt. 485 (1854). 22 DIFFERENT KINDS OF CONTRACTS. [CHAP I. lond fide intention of fulfilling the contract, performs it sub- stantially, but fails in some comparatively slight particular, he is entitled to a fair compensation, according to the contract ; the other party receiving credit for whatever loss or damage he may have sustained by these deviations.^ But where performance of the contract has been so negligent and defec- tive as to be of no value at all, the employer may refuse to accept the work, and put an end to the contract ; and he can- not be made liable by any subsequent performance after the time within which the work was to have been completed. ^ And if a person agrees by an entire contract to build a house for another upon the land of the latter, and the building is destroyed by fire before its completion, though without the fault of either party, the builder can recover nothing for the work actually done.^ But if a person contracts to put into another's building a quantity of machinery, the work being divided into several parts, at separate prices for each part, no time being fixed for payment, and the work is so far done that the owner of the building uses them for his business, although not completed, and a fire destroys the building and machinery, the plaintiff can recover for the work and materials actually done and provided, but not the agreed price for the whole contract.* § 28. Another illustration of this rule is to be found in cases of sales. Where a certain and definite thing is sold for a cer- tain price, the contract is unquestionably an entirety, and the purchaser, if he retain the article, will be liable for the entire sum, unless there be a breach of warranty, or unless, under the circumstances, he be permitted to retain it as agent of ' Gleason v. Smith, 9 Gush. 476 ; Snow v. Ware, 13 Met. 42 ; Veazie v. Bangor, 61 Me. 509; Veazie w. Hosmer, 11 Gray, 396 ; Cardell v. Bridge, 9 Allen, 35.5 (1764); Tipton u. Feitner, 20 N. Y. 423 (1859) ; Preston v. Finney, 2 W. & S. 55 ; Chambers v. Jaynes, 4 Barr, 43. '' Miller i'. Phillips, 31 Penn. St. 218 (18.58). " Tompkins v. Dudley, 25 N. Y. 272 ; Eaton v. Joint Sch. Dist., 23 Wis. 874(1868). < Appleby v. Meyers, Law R. 1 C. P. 615 (1866). See also Menetone V. Athawes, 3 Burr. 1592; Niblo v. Binsse, 1 Keyes, 476 (1864). But see Taylor v. Caldwell, 3 B. & S. 826 ; Adlard v. Booth, 7 C. & P. 108. CHAP. I.] ENTIRE AND DIVISIBLE CONTRACTS. 23 the vendor. So, where two or more things are sold together for one gross sum, the contract is not susceptible of severance. Thus, where a cow and four hundred pounds of hay were sold for seventeen dollars ; it was held, that the contract was entire.^ And this rule obtains because the terms of such a contract not only afford no means of ascertaining the price affixed to each separate article, but also do not show that the purchaser would have been willing to take a part without the whole ; — and therefore, great injustice might be done by construing the contract to be severable, and forcing the pur- chaser to take a portion at an estimated reduction of the price. The entirety is th^efore properly considered as the only legal consideration. § 29. There seems to be another class of contracts, partak- ing of the nature both of entire and of divisible contracts, in which, although a certain quantity or number of things is brought together, no total price is fixed, but it is to be calcu- lated at a certain rate per single article or measure ; or wliere, the things being of different kinds, although a total price is named, a certain valuation is affixed to each thing ; and in such cases the contract may be treated as a separate contract for each article, although they be all included in one instrument of conveyance. Thus, where A. purchased two parcels of real estate, tlie one for £700, the other for £500, and took one conveyance of both, A. being afterwards ejected from one by reason of defect of the title, was held to be entitled to recover therefor against the vendor. ^ So, also, where a certain farm, and dead stock, and growing wheat were all sold to- gether, but a separate price was affixed to each, it was held, that the contract was only entire as to each item, and was severable into three contracts, and that a failure to comply with the contract as to one item did not invalidate the sale, and give the vendor a right to reject the whole contract.^ In ' Miner v. Bradley, 22 Pick. 459. Miner v. Bradlee was fully approved in Costigan v. Hewkins, 22 Wis. 74 (1867). And see Manning v. Humph- reys, 3 E. D. Smith, 218. '^ Johnson v. Johnson, 3 Bos. & Pul. 162; Miner v. Bradley, 22 Pick. 459. 3 Mayfield v. Wadsley, 3 B. & C. 361; 5 Dowl. & Ryl. 228; Wood v. Benson, 2 Cr. & J. 94. See also Kingdom v. Cox, 12 Jurist, 336 ; 2 C. B. 661. 24 DIFFERENT KINDS OP CONTEACTS. [CHAP. I. such cases, the contract may be considered as entire or separa- ble, according to the circumstances of the particular case, and tlie criterion is to be found in the question, whether the whole quantity is of the essence of the contract. If, therefore, although the terms of the contract afford the rule for the apportionment of the consideration, yet if there be a special agreement to take the whole or nothing, or if the evidence clearly sliow that such was the purpose of tlie parties, tlie con- tract would be entire. Where, therefore, a contract was made to deliver a quantity of lumber at a given day, at a certain price per foot, to be paid for on the delivery and acceptance of the whole, it was held to be an entire contract, and the delivery of the whole of the lumber by the appointed day, to constitute a condition precedent to the right of payment of any part, although the part delivered should have been iised.^ So, also, where an agreement was made by A. to work on B.'s farm for " seven months, at twelve dollars per month," and it appeared that the time of service was the essential feature of the con- tract, it was held, that the contract was entire, and that A. could not recover thereupon, if he left B 's service before tlie expiration of the seven months, without good cause. ^ So, where tlie agreement is absolutely and unconditionally to take the whole of an indefinite quantity, at a certain rate per meas- ure, and there is no usage of trade creating a different rule, the contract will be considered as an entirety, and not a sepa- rate sale of each portion measured ; the measure being only a means of estimating the gross sum, and the quantity sold being an entire quantity.^ ^ Paige V. Ott, 5 Denio, 406. See also Dayis v. Maxwell, 12 Met. 290; Sharpe v. Johnson, 60 ISarb. 144 (1.S71). ' Davis V. Maxwell, 12 Met. 286. See also Irving v. Thomas, 18 Me. 418; Stark v. Parker, 2 Pick. 207 ; Olmstead v. Beale, 19 Pick. .".28 ; Miller V. Goddard, 34 Me. 102. But see contra, Britton v. Turner, 6 N. H. 481. = Waddington v. Oliver, 2 Bos. & Pul. N. R. 61 ; Symoiids v. Carr, 1 Camp. 361 ; Walker v. Dixon, 2 Stark. 281 ; Kingdom v. Cox, 12 Jnrist, 33(; ; 2 C. B. 661 ; Franklin d. Miller, 4 Ad. & El. 606, 606 ; Oxendale v. Wetherell, 9 B. & C. 386 ; Withers v. Reynolds, 2 B. & Ad. 882. See Story on Sales, § 244, 245, and notes ; Casamajor v. Strode, Cooper t. Brougham, 510 ; 8 Cond. Ch. 516 ; Symonds v. Carr, 1 Camp. 361 ; James r. Shore, 1 Stark. 426 ; Roots v. Dormer, 4 B. & Ad, 77 ; 1 Nev. & Mann. CHAP. I.] ENTIRE AND DIVISIBLE CONTRACTS. 25 § 30. So, also, where the plaintiif purchased of the defend- ant an entire cargo of yellow and white corn on board of the defendant's schooner, and agreed to pay one sum per bushel for the yellow, and another sum for the white, the defendant warranting the corn to be of a certain quality, — and the pur- chaser paid the seller $1200 " on account of corn per schooner," but upon unlading, all of the corn did not corre- spond to the warranty, and the purchaser, after accepting a portion of it, refused to receive the remainder, which was in- ferior, and brought his action to recover the difference between the sum he had paid and the sum due on the corn he had taken, it was held, that as the contract was entire, the action could not be maintained ; and that to entitle A. to recover he should have rescinded the contract by returning, or offering to return all the corn, or he should have accepted all, and brought his action on the warranty.^ In a later case,^ C. sold P. all the corn he had, supposed to be 600 bushels, the white at 65 cents, 667. The case of Baldey v. Parker, 2 B. & C. 40, was not intended to define an entire contract, but what species of contract was referred to by the statute of frauds. The question which arose in the case was merely on the construction of the statute. ' Clark V. Baker, 5 Met. 4.52. Mr. Justice Hubbard, after commenting upon the cases of Johnson v. Johnson, 3 Bos. & Pul. 162, and Miner v. Bradley, 22 Pick. 459, said, " While we fully approve these cases and feel that they support the plaintiff's position, so far as relates to contracts for different articles, where the consideration is divisible, or to cases where two distinct contracts are embraced in one settlement ; still we think they neither go the length nor do they support the doctrine that the contract is not entire merely because the several articles are sold by weight or measure, and the value is ascertained by the price affixed to each pound or yard or foot of the quantities contracted for. On the other hand, we believe the legal prin- ciple, governing in such cases, does not depend, either solely or necessarily, on the nature of the articles which are the subject of the contract, or on the prices affixed to each, but upon the nature of the contract itself. If the contract is entire, if it is one bargain, then it matters not whether there is one or are many articles, — and though each may have an appropriate price. In the one case, the vendor might have been unwilling to sell one portion without selling the whole ; in another, the buyer might be unwilling to take a part unless he could have the whole. Thompsons. Conover, 1 Vroom, 329 (1863). 26 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. and the yellow at 63. He delivered the white and offered to deliver the yellow, but P. declined to accept it, although he " The question, tben, in the present case, resolves itself into this : Was there one bargain for the whole cargo, or were there two distinct contracts for the yellow and white corn, or was there a separate and independent bargain for each bushel of corn contracted for, in consequence of which the receipt of one or more bushels of the warranted quality imposed no duty upon the plaintiff to retain the residue? And we are of opinion that the contract was an entire one. The bargain was not for 2000 or 3000 bushels of corn, but it was for the cargo of the schooner Shylock, be the quantity more or less ; a cargo known to consist of two different kinds of corn ; and the means taken to ascertain the amount to be paid were in the usual mode, by agreeing on ihe rate per bushel for the two kinds, and to take the whole. The schooner was hauled to the wharf of the plaintiff, and the cargo put under his control, and with all the possession that could be given before it was unladed. No further act was to be done by the vendor. No measure- ment of quantity was to precede the delivery. For the whole quantity was delivered, whether more or less, and the measure was needed only to ascer- tain the amount of the respective kinds, and thus to fix the sum to be paid. And in pursuance of this contract, §1200, on account of the entire cargo, was advanced to the defendant. No agreement was made that the party might reject, as it came from the vessel, such part as did not agree with the warranty, and pay only for what he actually retained ; but the bargain was for the whole cargo at an agreed rate per bushel. And although the plain- tiff refused to take the whole from the vessel, and in consequence the de- fendant was compelled, for the purpose of obtaining his vessel, either to receive a part back, or to unlade it himself for the plaintiff; yet in principle we consider the delivery the same to the plaintiff as though the whole had been unladed in bulk into his warehouse, and the measuring had taken place afterwards. There is no ground, on the evidence as reported, to maintain that there were two contracts for the distinct kinds of corn ; for it does not appear but that the 1400 bushels, that were retained, consisted of a part of each. So that the plaintiff, to support his position, must contend, as he has contended, that the bargains in this case were sepiarate bargains for each several bushels of a given quality, and for a distinct price. But this separa- tion into parts so minute, of a contract of this nature, can never be admitted ; for it might lead to the multiplication of suits indefinitely, in giving a distinct right of action for every distinct portion. As well might a man who sold a chest of tea by the pound, or a piece of cloth by the yard, or a piece of land by the foot or by the acre, contend that each pound, yard, foot, or acre was the subject of a distinct contract, and each the subject of a separate action. The cases of VVaddington v. Oliver, 2 N. R. 61 ; Leggett v. Cooper, 2 Stark. 103 ; Oxendale v. Wetherell, 9 B. & C. 386 ; Kaldey v. Parker, 2 B, & C. 37; Shaw v. Badger, 12 S. & R. 27.5; and Bowker v. Hoyt, 18 Pick. 555, support the view we take of this contract. CHAP. I.] ENTIRE AND DIVISIBLE CONTRACTS. 27 had ground some of the white and mixed it with his own. The contract was held to be entire, and P. recovered of C. for the conversion of the white corn. § 31. Where, however, several different articles are bought at one time, it is often exceedingly difficult to determine whether the contract is entire or several. The cases are very contradictory upon this point, tlie same kind of contract being held to be entire at one time, and several at another. Thus, where a number of horses were set up at auction in separate lots, and the plaintiff bid off three of them, it was held by Lord Keiiyon, that the contract was entire, and aa title could only be made to one of them, that the plaintiff was not bound to keep it, and could recover the deposit money for all.^ So, also, where at an auction sale certain railway shares were sold in distinct lots of 100 shares each, and the defendant bought three of them at three distinct biddings, and a bill of parcels was given for 300 shares ; it was held, that the jury were war- ranted in treating it as an entire contract, — the subsequent delivery and acceptance of the bill of parcels showing, that the parties treated the contract as an entire one.^ § 32. But, on the other hand, a contrary rule has been, held. Thus, where several distinct lots of growing crops were knocked down to a bidder, and his name marked against them in the catalogue of sale, it was held, that a distinct contract arose for each lot, and as each lot was under £20 in value, that the memorandum did not require a stamp. ^ So, also, the same rule was held in another case, where several lots of grow- ing turnips were sold ; and Mansfield, C. J., said, " The ques- " The plaintiff 's redress was easy, -^ — either to rescind the contract by returning all the corn purchased and suing for the money advanced; or by action upon his warranty, for the injury sustained by the delivery of an arti- cle inferior to that warranted." But in this case, upon subsequent trial, the court admitted evidence to prove a usage in the port where the corn was sold, that when a cargo of corn, lying in a vessel, is sold in bulk, under a warranty of quality, the purchaser is at liberty to receive and retain as much of the corn as corre- sponds to the warranty, and to reject the rest. Clark v. Baker, 11 Met. 186. See post, § 35, 36. ' Chambers v. Griffiths, 1 Esq. 151. » Franklyn t). Lamond, 4 C. B. 647. * Hoots V. Lord Dormer, 4 B. & Ad. 77. 28 DIFFEKEM KINDS OF CONTRACTS. [CHAP. I. tion is, whether the contract should be in writing as being for a sale of goods amounting to £10 ; there is no ground for that objection, for the contract for each stitch was a separate sale ; for the same reason no stamp was necessary, because no one lot was worth ^620."^ And also. Justices Heath and Chambre said, " As soon as the purchaser had bought the first lot, there was a complete contract, which could not be avoided by his buying another lot." In these two last cases no bill of parcels seems to have been given. So, if A. covenants to deliver 300 barrels of flour, in lots of 100 barrels, and payment for each lot to be made on delivery, this is clearly a separate con- tract for each 100 barrels.^ But a contract for the sale of 700 cords of wood, at ^o per cord, the vendor to deliver as much as he could that winter, and the balance the next winter, the buyer to pay for eacli winter's delivery at tlie close of that sea- son, is an entire contract for the whole, so that a delivery and acceptance of a part the first winter takes the whole out of the operation of the statute of frauds.^ § 33. In this diversity of cases, it is difficult to state any rule. But on the whole, the weight of opinion and the more reasonable rule would seem to be, that wliere there is a pur- chase of different articles, at different prices, at the same time, the contract would be several as to each article, unless the taking of the whole was rendered essential either by the nature of the subject-matter, or by the act of the parties. Wliere a bill of parcels is taken, and includes tlie articles bought, under one wliole price, it would, if accepted, afford evidence of an intention by both parties to treat the contract as entire. And wherever the failure as to a part would materially defeat the objects of the contract, and would have affected the sale, had such failure been anticipated, the contract would be entire. This rule would found the interpretation of the contract on the intention of the parties, as manifested by their acts, and ^ Einmerson v. Heelis, 2 Taunt. 46. See also Johnson v. Johnson, 3 ,Bos. & Pul. 162; MayEeld «. Wadsley, 3 B. & C. 361; ante, § 29. 2 Sawyer v. Chicago, &r.. Railway Co., 22 Wis. 403 (1868). 3 Gaultt!. Brown, 48 N.H. 183 (1868), following Cuff ?;. Penn, 1 M. & S. 21, ilisapproving Seymour v. Davis, 2 Sandf. 239, which also was not ap- proved in McKnight v. Dunlop, 1 Seld. 537 ; and Boutwell v. 0'K.eefe, 32 Barb. 434. CHAP. I.] ENTIRE AND DIVISIBLE CONTRACTS. 29 by the circumstances of the case.i Of course, if two articles be bought at the same time under the agreement that one may be returned if it do not prove satisfactory, there would be no entirety of contract.^ § 34. It follows, from these rules, that neither party can rescind an entire contract in part, and enforce it in part, and that each party is liable for the whole consideration, or for no part of it. If, therefore, the party advancing the consideration would bring an action against the other to recover it, he must rescind the contract totally. ^ The contract may, however, be apportioned with the consent of the parties, whether it be expressed or implied, so that the excess of consideration advanced, may be recovered in an action for money had and received ; and a consent by either party to treat the contract as several will be implied from the doing by him of any act inconsistent with the entirety of the contract. Thus, if the purchaser of a gross number of bales of cotton, accept a por- tion only of them without objection, and not in the course of receiving the whole, his acceptance will be considered as a waiver of his right to insist upon the entirety of the contract.'* • The doctrine of Lord Kenyon, in Chambers v. GrifBths, 1 Esp. 151 (ubi sup.), was said by Lord Broii New York Exchange Co. v. DeWolf, 31 N. Y. 273 (1865). " Mill Dam Founderv v. Hovey, 21 Pick. 417. ^ McCarren v. McNulty, 7 Gray, 139 ; Atkins v. Barnstable, 97 Mass. 428. ■* Ibid. ; Brown on Sales, § 11, 45 ; Com. Dig. Ap;reement, A., Condi- tion, C. ' Byrne v. Pattinson, Abbott on Ship. 347 ; Smith v. Wilson, 8 East, 4.'i7 ; Mitchell v. Darthez, 2 Scott, 771 ; 2 Biiig. N. C. 655 ; Gibbon v. Mendez, 2 B. & Al. 17. « Staunton v. Wood, 16 Q. B. 638. ' Cuckson V. Stpnes, 1 El. & El. 248 (1859). See Stray v. Russell, ib. 886. « Bristol V. Jones, 1 El. & El. 484 (1869). CHAP. I.] CONDITIONAL AND ABSOLUTE CONTRACTS. 35 contract. It does not create a binding obligation on the de- fendant to pay any thing ; he is left solely to his discretion. ^ So if the fulfilment of a promise is left entirely to the honor or discretion of the promisor, no action can be maintained against him.2 A prumise by a person to give another, in considera- tion of his services, " as much as to any relation on earth," is too vague twnd indefinite to constitute a specific cbntract ; but as it shows that the services were not rendered gratuitously, the promisee could recover a reasonable compensation for the same ^ after the promisor's death. So, an agreement by a debtor to pay a certain debt, whenever " in his opinion his circumstances would enable him to do so," creates no legal obligation for which an action will lie, unless the promisor is of ability in his own opinion, although the jury find he was so in fact.* § 42. A condition subsequent is one which follows the per- formance of the contract, and operates to defeat and annul it, upon the subsequent failure of either party to comply with the condition. Thus, a devise of land for " the purpose of build- ing a school-house, provided it be built " on a certain site, was held to be a present grant of the land, subject to forfeiture, in case the school-house should not afterwards be built. ^ So, also, where a lease was made, containing a stipulation that, " if the lessee suffer more than one person to every one hundred acres to reside on, use, or occupy any part of the premises, the lease shall be void," the stipulation was considered as a condi- tion subsequent, the non-compliance with which annulled the lease.^ § 43. Sometimes a condition is of such a nature that its operation may be either precedent or subsequent. Thus where in a policy of insurance there is a clause that no action shall be sustained unless brought within twelve months from the ' Roberts v. Smith, 4 H. & N. 315 (1859). And see Taylor ». Brewer, 1 M. & S. 290. = Roberts v. Smith, 4 H. & N. 315; Barnard ». Gushing, 4-Met. 230; Nelson V. Von Bonnhorst, 29 Penn. St. 352. « Graham v. Graham., 34 Penn. St. 475. ^ Nelson v. Von Bonnhorst, 29 Penn. St. 362. * Haydi-n v. Stoughfon, 5 Pick. 628; Brlghara v. Shattuck, 10 Pick. 309; Atkins V. Howe, 18 Pick. 16 ; Dresser Manuf. Co. v. Waterston, 3 Met. 9. ° Jackson v. Brownell, 1 Johns. 267. 36 DIFFERENT KINDS OP CONTRACTS. [CHAP. I. loss, such a stipulation has been sometimes called a condition precedent to the right of recovery, and sometimes a condition subsequent by which the right to indemnity for the loss is defeated, which is the same thing under a different designa- tion.i ' § 44. No particular words are necessary to constitute a con- dition precedent or a condition subsequent, and if there be any question upon tliis point, it must be determined by the inten- tion of the parties, as manifested by circumstances of the particular case.^ For not only may the exact terms of a con- ' Amesburv v. Bowditch Mut. Fire Ins. Co., 6 Gray, .596 (1856) ; Ketchum v. Protection Ins. Co., 1 Allen (N. B.), 136 (1818) ; AYiIson v. iEtna Ins. Co., '27 Vt. 99 ; Cray v. Hartford Fire Ins. Co., 1 Blatclif. 280. " Worsley v. Wood, 6 T. R, 720 ; Tufts v. Kidder, 8 Pick. 537 ; John- son V. Reed, 9 jMass. 78 ; Gardiner v. Corson, 15 Mass. 500; Knight v. The NewEng. Worsted Co., '2 Cush. 286; Rowland v. Loach, 11 Pick. 151; Kane v. Hood, 13 Pick. -281 ; Grey v. Friar, 4 House Lords Cases, 565. Crompton, J. : " This was an action of covenant to recover rent, alleged to be due on the lease of a coal-mine. The defendants below having pleaded that the tenancy had been determined by them under a proviso enabling them to determine the lease by notice at the end of eight years, the plaintiff replied, showing the non-performance of certain covenants ; and the ques- tion arose, whether, on the true construction of the proviso, the performance of the covenants was or was not a condition precedent to the determination of the term. Whether particidar words do or do not amount to a condition precedent must be gathered from the real intention of the parties, as appear- ing upon the whole instrument. If such intention is apparent, the parties must be bound by the bargain which they have chosen to enter into ; but in ascertaining the meaning and true construction of the deed, it is by no means unimportant to observe what the ellcct of the construction, one way or the other, would be. Accordingly, the counsel for the plaintiffs in error, in their argument, pointed out the multiplicity and minute nature of the covenants contained in this lease, and argued, from the impossibility of per- forming all of them to the letter, that the parties were not likely to have intended that the benefit of this clause was to be lost to the lessees bv the infraction of any of the numerous and minute covenants. A proviso of this kind being for the benefit of the lessees, and being one in its nature to be useful only when the lessees desire to put an end to their lease against the will of their lessor, it seems hardly likely the arrangement should be such as to leave it practically in the power of the lessor to say whether the lessees should ever be able to avail themselves of it or not. I quite agree with what was said in the Exchequer Chamber, that these reasons would not justify the court in refusing to put the construction upon the words which they plainly require ; but they appear to me to be important in ascertaining what that construction is, and whether the words do not really bear a con- CHAP. I.] CONDITIONAL AND ABSOLUTE CONTRACTS. 37 dition be modified so as to harmonize them with the evident intention of the parties, but where no condition has been expressed, it may be implied from the facts of the case.^ Thus, where a contract was made in London for the sale ot tallow by a particular ship " on arrival," and it was specified, that if it did not arrive before a stated day, the bargain was to be void, and the ship was wrecked, but the cargo was saved, and might have been sent round to London by a different con- veyance than the ship, but was not ; it was held that the man- ifest intention of the parties was, that the contract should be void, unless the tallow arrived in the ordinary course of trade and navigation, and that the sellers were not, therefore, answerable for a non-delivery thereof.^ So, also, where in a repository for the sale of horses by auction, certain rules were posted up regulating sales by private contract in such place, and affixing certain conditions thereto, it was held, that where the buyer had notice of them, he impliedly agreed to be bound by them as the conditions of the sale, although no express ref- erence was made thereto.^ § 45. A condition precedent corresponds to the suspensive condition of the civil and Scottish law, and a condition subse- quent to the resolutive condition. Mr. Brown, in his Treatise on Sales, says : " A condition resolutive, when it is accom- plished, puts an end to the contract, but does not suspend its existence." " The contract is perfect, notwithstanding the pi-esence of a condition subsequent, and is merely liable to be rescinded, on the condition being accomplished." " The effect struction which would not lead to consequences which the parties were not likely to have contemplated. Words capable of being treated as conditions precedent to rights of action, have in many cases, some of which were cited at the bar, been construed as not amounting to conditions precedent, by looking at the provisions of the whole deed as assisting to ascertain the meaning and construction of the particular expressions ; and words of this nature cannot be said necessarily to amount to conditions precedent, as they are not construed to do so when they occur in the common case of cove- nants for quiet enjoyment." ' Boyd V. Siffkin, 2 Camp. 827 ; Idle v. Thornton, 3 Camp. 274; Story on Sales, § 252 ; Dodge v. Gardiner, 31 N. Y. 239. = Idle V. Thornton, 3 Camp. 274. ' Bywater v. Richardson, 3 Nev. & Man. 748 ; 1 Ad. & El. 508. 38 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. of a proper suspensive condition, or condition precedent, in the contract of sale, is, that there is no complete sale, until the condition is accomplished." So, also, Pothieri says : " Les conditions rcsolutoires sont celles qui sont opposdes, non pour suspendre I'obligation jusqu'a I'accomplissement, mais pour la faire cesser lorsqu'elles s'accomplissent. Une obligation contract^e sous une condition r^solutoire est done parfait des I'instrtnt du contrat." § 46. Wliere no time is fixed within which a condition shall be performed, the rule is, tliat it must be performed within a reasonable time.^ Of course, no universal rule can be laid down as to what constitutes reasonable time, which will apply to all cases. The only rule wliicli can be stated, is, that any delay in the performance of the condition, which operates as an injury to the other party, will be considered as unreasona- ble. ^ What is such a delay in any particular case, must depend upon its peculiar circumstances. In relation to condi- tiojis precedent which operate to the advantage of tlie party performing the first act, performance is usually at the option of such party at any time during his life.* But in relation to con- ditions subsequent, the rule is otherwise,^ and the time of per- forming the condition does not depend upon the mere will and pleasure of the party who is to perform it, but on the circum- stances of the case, and it must be done within a reasonable time.^ If, however, the time of performance be specified in the contract, the condition must be performed at the appointed time.' § 47. Again, where the condition is precedent, it must be strictly performed in every particular, in order to entitle the • Trait6 des Obligations, No. 224. See also No. 198. = Hamilton v. Elliott, 5 S. & K. 384 ; Hayden v. Stoughton, 5 Pick. 628. ' Ibid. ■• Finlay v. King's Lessee, 8 Pet. 376 ; Plowd. 16 ; Hayden v. Stough- ton, ij Pick. 634; Bothy's Case, 6 Co. 31a; Com. Dig. Condition, G. 3, 4. ' Ibid. ; Hayden v. Stoughton, 5 Pick. 534. " Cora. Di;:;. Condition, 6. 6. ' As to Time of Performance, see post, § lo27, 1328, 1396. See also 1 Wms. Saunders, 320 b. CHAP. I.] CONDITIONAL AND ABSOLUTE CONTRACTS. 39 party, whose duty it is to perform it, to enforce the contract against the other party.' Thus, where A. covenanted to pay B. for doing the carpenter's work on certain houses, when he siiould receive from the architect his certificate, that " the work was fully and completely finished according to the speci- fication," it was held to be a condition precedent, which must be strictly performed before payment could be recovered ; and that a certificate by the architect, that the houses, although not finished exactly according to the specification, yet were " finished " in such a " manner, that he would accept them, if he were the owner," and that " he was satisfied as to the work and material," was not a sufficient performance of the condi- tion. ^ Nor does it matter that such condition is difficult or foolish, for if it be so, it is the fault of the party who engages to perform it, and he should suffer the consequences.^ A con- dition of a fire insurance policy, that the insured shall procure a certificate from the nearest magistrate as to the fact and amount of the loss before he can recover, is a condition prece- dent that must be strictly performed, and a refusal of the mag- istrate to make such a certificate because he did not know the facts will not excuse a non-compliance.* But if the condition 1 Dana v. King, 2 Pick. 155 ; Seymour v. Bennet, 14 Mass. 266 ; Hunt «. Livermore, 5 Pick. 395 ; Albany Dutch Church v. Bradford, 8 Cow. 457 ; Shaw V. Turnpike Co., 2 Penn. 454 ; Johnson b. Reed, 9 Mass. 78 ; Byrne i>. Pattinson, Abbott on Ship. 347 ; Mason v. Harvey, 8 Ex. 819. * Smith V. Briggs, 3 Denio, 73. See also upon this subject of architects', surveyors', or engineers' certificates, Veazie u. Bangor, 61 Me. 509; Scott V. Corporation of Liverpool, 1 Giff. 216; 3 De G. & J. 334; Ranger v. Great Western Railway Co., 5 H. L. C. 72 (1854) ; Mlntosh v. Great Western Railway Co., 3 Sm. & Gif. 146 (1855) ; North Lebanon Railroad Co. V. McGrann, 33" Penn. St. 530 (1859) ; Condon v. Southside Railroad Co., 14 Graft. 302 (1858) ; Snodgrass v. Gavit, 28 Penn. St. 221 (1857) ; Milner v. Field, 5 Exch. 829 (1850); Herrick v. Belknap, 27 Vt. 673 (1851) ; O'Reilly v. Kerns, 52 Penn. St. 214 (1866) ; Brown v. Overbury, 11 Exch. 715 (1856). As to the conclusiveness of such certificates, see Sadler v. Smith, Law R. 5 Q. B. 40 (1869) ; Benbow v. Jones, 14 M. & W. 193; Dines v. Wolfe, Law R. 2 P. C. 280; Roberts v. Bury Improvement Com., Law R. 5 C. P. 310 (1870). ' Worsley v. Wood, 6 T. R. 720 ; Com. Dig. D. 1 ; post, § 586, 587. " Worsley v. Wood, 6 T. R. 710 ; Roumage v. Mechanics' Fire Ins. Co., 1 Green, 110; Leadbettcr v. Etna Ins. Co., 13 Me. 265; Protection Ins. Co. V. Pherson, 5 Ind. 417; Noonan v. Hartford Fire Ins. Co., 21 Mo. 40 DIFFERENT KINDS OP CONTRACTS. [CHAl*. I. be impossible or illegal, or repugnant at the time the contract is made, or become so afterwards, it will usually be void, and the contract will be considered absolute.^ So, also, if a strict per- formance be waived or prevented by the party, who had a right to insist upon it, he cannot absolve himself from his part of the contract, on the ground of a non-performance of the condition.^ It would seem, also, that a performance according to the exact terms, or in the exact mode stated in the contract, would not, in all cases, be necessary, but that a substantial performance would suflSce, provided no injury or inconvenience was thereby occasioned to the other party, and provided the exact perform- ance of the condition as to mode and time, were not of the essence of the contract.^ Such cases are, however, in their nature exceptional, and peculiar in their circumstances. The mere fact, moreover, that the performance of the condition does not accrue to the benefit of the other party, will be no excuse for the non-performance thereof.^ § 48. A waiver of the performance of a condition is not to be implied from the mere silence of the other party in case of a breach, \inless such silence be inconsistent with any other explanation ;^ nor will a mere indulgence be considered as a waiver of forfeiture.^ But if, a condition precedent being unperformed, the other party proceed to perform his part of 81 ; Alderman v. West of Seotlaiid Ins. Co., 5 Upper Canada, 37 ; Scott v. Phoenix Ass. Co., Stuart, 354. ■ See Harvy v. Gibbons, 2 Lev. 161 ; Nerot v. Wallace, 3 T. R. 17; Gilpins V. Consequa, Pet. C. C. 91 ; Hughes v. Edwards, 9 Wheat. 489 ; ib. 345. = Williams v. Bank of U. S., 2 Pet. 102 ; Cooper v. Mowry, 16 Mass. 7 ; Stockton v. Turner, 7 J. J. Jlarsh. 192 ; Webster v. Coffin, 14 Mass. 196 ; Badlam v. Tucker, 1 Pick. 287 ; Miller v. Ward, 2 Conn. 494 ; Crump v. Mead, 3 Mo. 233 ; Clark v. Moody, 17 Mass. 149 ; U. S. v. Arredondo, 6 Pet. 691 ; Whitney v. Spencer, 4 Cow. 39 ; Merrill v. Emery, 10 Pick. 507. And provisions that the contract shall become " void " for the failure to per- form some condition subsequent are usually construed to mean that the contract shall be voidable at the election of the other party. And the consequence is that the breach may be waived. See Shearman v. Niagara Fire Ins. Co., 46 N. Y. 526 (1871) ; Armstrong v. Turquand, 9 Irish C. L. 32 (18.58). ' Worsley v. Wood, 6 T. R. 720. * Jarvis v. Rogers, 3 Vt. 339 ; Gray v. Blanchard, 8 Pick 290. *■ Gray v. Blanchard, 8 Pick. 292 ; Jackson v. Crysler, 1 Johns. Cas. 125. » Ibid. CHAP. I.] CONDITIONAL AND ABSOLUTE CONTRACTS. 41 the contract, such an act will be construed as a waiver of the condition by him, and he will thereby be estopped from relying upon the non-performance thereof in an action brought against him for negligence in the performance of his contract.^ So if the condition be to perform a certain thing by a certain day, and the performance of another thing on another day be accepted in place thereof, the strict performance of the condi- tion will • be waived.* A parol waiver cannot, however, be made of a contract under seal.^ Conditions in a contract are to be construed strictly against those for whose benefit they are reserved, when they impose burdens on other parties ; and they will not be extended by implication beyond their actual terms, and the indisputable intention of the parties.* All stat- utes, therefore, imposing penalties, or duties, or taxes, on sub- jects or citizens (which are in the nature of conditions), are to be construed strictly against the government, and are not to be extended, by implication, beyond the clear import of the language used.^ § 49. Conditions may be divided into four classes. 1st. Those which are possible at the time of their creation, and afterwards become impossible either by tlie act of God or by the act of the party. 2d. Those which are impossible at the time of their creation. 3d. Those which are against law or public policy. 4th. Those which are repugnant to the grant or gift by which they are created, or to which they are annexed.^ The rule in respect to the two latter classes is, that they are void.^ So, also, if they be impossible in their inception, or be rendered impossible by the act of the party entitled to the bene- fit of them, or by the act of God, they are generally held void, ' Betts V. Ferine, 14 Wend. 219. ' Warren v. Mains, 7 Johns. 476 ; Lindsey v. Gordon, 13 Me, 60 ; Porter v. Stewart, 2 Aik. 427. ' Gray v. Blanchard, 8 Pick. 290 ; Jackson v. Crysler, 1 Johns. Cas. 125 ; Porter v. Stewart, 2 Aik. 417. * Catlin V. The Springfield Fire Ins. Co., 1 Sumner, 440. ' U. S. V. Wigglesworth, 2 Story, 369 ; Andrews v. U. S., 2 Story, 202. « 2 Story, Eq. Jur. § 1304; Co. Litt. and note by Butler, 206 a. ' See post, Illegal and Impossible Considerations, and the chapter on Illegal Contracts. 42 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. though courts of equity will in some cases afford relief.^ But if they be subsequently rendered impossible by the act of the party who is bound to perform them, he is treated as in delicto, and the condition is obligatory on him.^ § 50. Again, in these cases, conditions subsequent may produce a different result from conditions precedent. Thus, where an estate is granted xipon a condition subsequent to be performed after the estate is vested, and it is rendered void by any of the causes above stated, the estate becomes absolute. But if the condition be precedent to the vesting of the estate, if it be void, it renders the grant void also, and the grantee can take nothing thereby.^ § 51. In addition to conditions precedent and subsequent, there are in certain classes of contracts implied conditions, as in the case of contracts for personal services. In such cases, where the services are to be performed during the lifetime of tlie party agreeing to perform them, there is an implied con- dition that the party shall live to do the work ; and shoi^ld he die before full performance, his personal representative would not be liable to an action for the breach. So a contract by an author to write a book, or by a painter to paint a picture, within a reasonable time, would, it is said, be deemed subject to the condition, that if tlie author became insane, or the painter paralytic, there would be no breach of the contract. So a contract to play the piano upon a certain occasion, is subject to the condition that the party shall be physically able to do so at the time ; and illness, rendering performance impossible, will be a valid excuse.* 1 See ante, § 26. 2 See 2 Story, Eq. Jur. § 1304 and 1S07, and eases cited ; Com. Di'g. Condition, D. 1; Thornborow v. AVhitacre, 2 Ld. Raym. 1164; Co. Litt. 206 h, 207 a, Butler's note; Graydon v. Hicks, 2 Atk. 18; Jones u. The Earl of Suffolk, 1 Bro. Ch. 528. See also Story on Bailm. § 25. See post, § 253. 8 2 Black. Comm. 156, 157; Co. Litt. 206a; Cary v. Bertie, 2 Vern. 389; 1 Fonbl. Eq., B. 1, ch. 4, § 1, note e. * Robinson v. Davison, Law R. 6 Exch. 269 (1871) ; Hall v. "Wright, El. B. & E. 746 (IS.:,8), per Pollock, C. B. ; Hubbard v. Belden, 27 Vt. 645 (185.=)). In Roliinson v. Davison, supra. Chief Baron Kelly savs, " that though the above rule was laid down in a dissenting oi)inion, it was still correct, and appeared to have been assented to by the majority." See also, as to implied conditions, Taylor v. Caldwell, 3 Best & S. 826 (1868) ; CHAP. I.J JOINT AND SEVERAL CONTRACTS. 43 JOINT AND SEVERAL CONTRACTS. § 52. Contracts may also be either joint or several, or joint and several. 1 § 53. The first rule governing a contract where there is more than one party on either side, is that it is to be construed as a joint right or obligation, unless it be made several by the terms of the contract ; or as the rule is stated in Sheppard's Touchstone,^ " If two, three, or more bind themselves in an obligation, ohligamur nos, and say no more, the obligation shall be taken to be joint only, and not several." This, however, is a rule of construction and not of law, and is adopted upon the presumption that parties only intend to assume a joint respon- sibility, unless they directly assume a several responsibility. If, therefore, there should be words indicating or implying a several right or liability, the contract will not be treated as joint solely, unless such a construction be required to carry out the intention of the parties, and to meet the justice of the case.^ § 54. It has indeed been held in a series of cases that a contract is to be construed solely according to the interest of the parties, so as to be several if the interest be several, and joint where the interest is joint, notwithstanding the fact that the terms of the contract are joint.* This doctrine has, how- Stubbs V. Holywell Ry. Co., Law R. 2 Exch. 311 (1867) ; Kintrea v. Perston, 1 H. & N. 857 (1866) ; Bland v. Ross, 14 Moore P. C. C. 210 (1860) ; Eddy V. Clement, 38 Vt. 486 (1866) ; ante, § 26. ' See Jacobs v. Davis, 34 Md. 204 (1870). ' 1 Shep. Touchstone, 375. See also Bac. Abr. tit. Obligation, D. ; King V. Hoare, 13 M. & W. 499; English v. Blundell, 8 C, & P. 332; Hill V. Tucker, 1 Taunt. 7 ; Yorks v. Peck, 14 Barb. 644 ; Byers v. Bobey, 1 H. Black. 236 ; 1 Saund. 291 6, n. 4 ; Sorsbie v. Park, 12 M. & W. 156. ' Withers v. Bireham, 3 B. &. C. 264; Servante v. James, 10 ib. 410; Anderson v. Martindale, 1 East, 601. See Moss v. Wilson, 40 Cal. 159 (1870). ■* James v. Emery, 5 Price, 529 ; Servante v. James, 10 B. & C. 410 ; Lane v. Dri.ikwater, 1 C. M. & R. 599; Withers v. Bireham, 3 B. & C. 264; Shep. Touchstone, 166, and note by Mr. Preston; Eccleston v. Clip- sham, 1 Wms. Saund. 153 ; Carthrae v. Brown, 3 Leigh, 98 ; Ludlow v. McCrea, 1 Wend. 228; Trustees of Perry ville'i). Letcher, 1 Monroe, 11. 44 DIFFERENT KINDS OP CONTRACTS. [CHAP. I. ever, been strenuously denied, and has formed a topic of dis- cussion and difference in several late cases in the Courts of Exchequer and of the Queen's Bench. The result of these cases is somewhat doubtful, but the better doctrine would seem to be, that a contract is to be construed, firsts according to its express words, if they be clear and unambiguous, and not according to the interest of the parties where it conflicts with such terms ; second, according to the interest, where the words are ambiguous and susceptible of different constructions. If, therefore, the contract be made expressly joint, and nothing be said indicating an intention to make it several, it is to be con- strued as solely joint. If, \)j its terms, it be both joint and several, it may be treated as either, according to the interest of the parties, in order to subserve the purposes of justice. If it be several in express terms, it must be so treated, though the interests be joint. ^ A distinction is, however, to be taken in this respect between covenantors and covenantees, for although a covenant may by express words be made both joint and sev- eral as to covenantors, notwithstanding the severalty of the interests, it would not be so as to covenantees. If, therefore, a joint and several covenant be made by covenantors, they would be severally liable if the interests were several.^ But the same covenant cannot be both joint and several as to covenantees ; and if the interest be joint, a joint action must be brought.^ Yet, if there be two different covenants in the same contract, one joint and several and the other several, the covenantee might bring a separate action against one, provided the subject-matter of the covenants were not the same ; and ' Mills V. Ladbroke, 7 Man. & Grang. 218 ; Place v. Dclegal, i BIng. N. C. 426 ; Hall v. Leigh, 8 Crancli, .50 ; Poole v. Hill, 6 M. & \V. 835 ; Seaton v. Booth, 4 Ad. & El. 528; Wilkinson v. Hall, 1 Biug. N. C. 713. See also Haddon «. Ayres, 1 El. & El. 118 ; Thompson v. Hakewell, 19 C. B. (n. s.) 713 (1865). '' Bradburne v. Botfield, 14 M. & W. 559 ; Robinson v. Walker, 1 Salk. 393 ; Keightley v. Watson, 3 Exch. 716 ; 1 Wms. Saunders, 1.54, note 1 ; Enys V. Donnithorne, 2 Burr. 1190. ' Bradburne v. Botfield, 14 M. & W. 559 ; Hopkinson v. Lee, 6 Q. B. 971; Byrne j). Fitzhugh, 1 C. M. & R. 613; Hatsall v. Griffith, 4 Tyrw. 487; 2 Cr. & Mees. 679; Petrie v. Bury, 3 B. & C. 353; Southcote v. Hoare, 3 Taunt. 87 ; Slingsby's Case, 5 Co. 18 b; Anderson v. Martindale, CHAP, I.] JOINT AND SEVERAL CONTRACTS. 45 not otherwise.! But a composition deed by a debtor, with all his creditors, gives each creditor a right to a separate action.^ § 55. Where the subject-matter of the contract is entire, as if it be to pay a whole sum to several parties, it is solely joint, and no one can bring a separate action for his share.* Nor will the mere fact that the share of each is stated, give a separate right of action, if the intention be to pay only one sum in solidoA Thus, where the defendant covenanted with the plaintiff and one A. B. to pay the plaintiff and the said A. B. one annuity or clear yearly sum of £30 " in the shares and proportions following," namely, the sum of £15, being one moiety of the said annuity or yearly sum, to the plaintiff, (fee, and the sum of £15, the remaining moiety thereof, to the said A. B., " it was held that the covenantees had a joint and not a several interest ;" ^ the sum being, throughout the deed, treated as one annuity, and not as two. So, also, where different sums of money are contributed by several persons, and the amount raised is advanced as one total sum, it has been held the action for repayment should be jointly brought.^ § 5G. But if the agreement be to pay to each covenantee a specific sum, or to perform distinct and separate duties to each of the obligees, the contract would be treated as several.'' 1 East, 497; Sweigart v. Berk, 8 S. & R. 308; Dob c. Halsey, 16 Johns. 34 ; Sims v. Harris, 8 B. Monroe, 55 ; Tapscott v. Williams, 10 Ohio, 442; Foley v. Addenbrooke, 4 Q. B. 207, 208. See also Pugh V. Stringfield, 3 C. B. (n. s.) 2 (1857) ; Calvert v. Bradley, 16 How. 580 ; Bartlett «. Holbrook, 1 Gray, 114; Jewett u. Cunard, 3 Woodb. & Min.277. ' Duvall V. Craig, 2 Wheat. 45. ^ Grosty V. Gibson, Law R. 1 Exch. 112 (1866) ; Lay v. Mottram, 19 C. B. (n. 8.) 479. 5 Lane v. Drinkwater, 1 C. M. & R. 613 ; Winterstoke Hundred's Case, Dyer, 370 a, p. 59; May v. May, 1 C. & P. 44; English v. Blundell, 8 ib. 332 ; Osborne v. Harper, 5 East, 229. * Lane v. Drinkwater, 1 C. M. & R. 599 ; Byrne v. Fitzhugh, 1 ib. 613 ; Osborne v. Harper, 5 East, 229 ; Foley v. Addenbrooke, 4 Q B. 208. * Lane ». Drinkwater, 1 C. M. & R. 599. But see Shaw v. Sherwood, Cro. Eliz. 729. « May V. May, 1 C. & P. 44; Ivans v. Draper, 1 Roll. Abr. 31, pi. 9; Saund. 116, n. a. ' Brand v. Boulcott, 3 Bos. & Pul. 235 ; Palmer v. Sparshott, 4 Scott, N. R. 743 ; 4 Man. & Grang. 137 ; Owston v. Ogle, 13 East, 538 ; Hall v. Leigh, 8 Crancb, 50 ; Shaw v. Sherwood, Cro. Eiiz. 729 ; Withers v. Bir- cham, 3 B. & C. 254. 46 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. Thus, where the defendant promised one Thomas that, in con- sideration of the surrender of a copyhold, he would pay to his (Thomas's) two daughters £20 apiece, it was held, that the promise was several, and as the parties had distinct interests, every one of them could bring the action.^ So, also, where the defendant was master of a vessel, and covenanted with the plaintiff and others, part-owneVs, and their several and respec- tive executors, administrators, and assigns, to pay certain moneys to them and to every of their several and respective executors, . Legh, 1 Bos. & Pul. 447 ; Payne u. Rogers, Doug. 407 ; Skaife v. Jackson, 3 B. & C. 422; Gram v. Cadwell, 5 Cow. 489; Barker V. Richardson, 1 Younge & Jerv. 362. ^ Twopenny v. Young, 3 B. & C. 210. ,In this case Bayley, J., says, " In general, where a simple contract security for a debt is given, it is ex- tinguished by a specialty security, if the remedy given by the latter is co- extensive with that which the creditor had upon the former. We are not called upon to say whether that would be the case when the remedies are not coextensive ; for where there is that in the instrument which shows that 68 DIFFERENT KINDS OF CONTRACTS. [CHAP. I. § 68. Where two or more persons, not being partners,^ are jointly, or jointly and severally, liable on the same contract, or on different contracts for one debt,^ and one of them, after the liability thereon has arisen, satisfies the whole claim or more than his own proportion of it, he is entitled to contribution from the other obligors, and may recover from them their several proportions of the common liability, in an action for money paid by him to their use.^ Nor is it necessary to prove that he paid such sum by compulsion* upon suit brought, or judgment rendered against him. But if the sum paid by him be no more than his own share, he would not, of course, be the parties intended the original security to remain in force, the new one has not the effect of extinguishing it, as was recently decided in the case of Solly V. Forbes, 2 Br. & B. 38. There, a release was given to one of two partners, with a proviso that it should not operate to deprive the plaintiff of any remedy which he otherwise would have against the other partner ; and that he might, notwithstanding the release, sue them jointly. A joint action having been commenced, the party released pleaded the release, to which plaintiff replied, that he sued him only in order to recover against the other ; and, on demurrer, the replication was held good. Plere, the language of the bill of sale shows that it was intended merely as a further security ; that makes the effect of it the same as if an express proviso had been inserted, and prevents it from operating as an extinguishment of the remedy on the note, either as against Eummen or the defendant." See Pannell v. M'JMechen, 4 Har. & J. 474; s. o. Redf. & B. Lead. Cas. 569; Sohier t'. Loring, 6 Cush. 537 ; s. c. Redf. & B. Lead. Cas. 574, and note ; North v Wakefield, 13 Q. B. 536 ; Lancaster v. Harrison, 4 Moo. & P. 561. ' The rules as to contribution do not apply to partners. Pearson v. Skelton, 1 M. & W. 504; Sadler v. Nixon, 5 B. & Ad. 936. ' Deering «. Winchelsea, 2 Bos. & Pul. 270; Mayhew v. Crickett, 2 Swanst. 185; Craythorne v. Swinburne, 14 Ves. 160; Norton v. Coons, 3 Denio, 130; Chaffee v. Jones, 19 Pick. 260. ' Kemp V. Finden, 12 M. & W. 421 ; Burnell v. Minot, 4 Moore, 342; Prior V. Henibrow, 8.]\I, & W. 873; Davies v. Humphreys, 6 M. & W. 153 ; Pitt V. Purssord, 8 M. & W. 538 ; Sison v. Kidman, 4 Scott, N. R. 429 ; Edger v. Knapp, 6 Scott, N. R. 707 ; Bachelder v. Fiske, 17 Mass. 469. 4 Pitt V. Purssord, 8 M. & W. 539. In this case the plaintiff and defend- ant, together with the principal debtor, signed a joint and several promissory note as sureties for the principal debtor, and the latter paid only a portion of the amount of the note when it became due, and the plaintiff then paid the residue, although no demand for payment had been made on him by the creditor, and subsequently brought his action against the defendant, his co- CHAP. I.] JOINT AND SEVERAL CONTRACTS. 59 entitled to an action for contribution.^ Nor does it matter in such case, whether the contract in respect of which the joint, or joint and several liability arises, be a contract under seal, or by parol, or merely implied.^ Thus, if four persons jointly retain an attorney to defend them from a civil or criminal charge, or to conduct an action for them, and one pay the retainer, the others are liable for contribution.^ But this implied promise of contribution may be rebutted by special circumstances, tending to show a different understanding between the parties.* Thus, where one of four sureties quali- fied his obligation by adding to his signature the words " surety for the above names," it was held, that he was not liable for contribution to the first surety who had paid the debt.6 § 69. Where one of the obligors to a joint and several obligation is sued thereon, it seems that he would not ordina- rily be entitled to receive contribution for the costs of defend- surety for contribution; and it was held that he was entitled to recover a moiety of the amount he had paid. " All the parties,'' said Baron Parke, " were jointly and severally liable to the holders of the note,' and as all ■were liable, one party who has paid the note may bring an action against his co-surety for contribution without showing that he had paid it by compul- sion." See also Cowell v. Edwards, 2 Bos. & Pul. 268 ; Odlin v. Greenleaf, 3 N. H. 270. •■ Geopel V. Swinden, 13 Law Jour. (n. s.) Q. B. 113. " Edger v. Knapp, 6 Scott, N. R. 707 ; Holmes v. Williamson, 6 M, & S. 158 ; Hussey v. Crickitt, 3 Camp. 173 ; Alexander v. Vane, 1 M. & W. 511. 8 Edger v. Knapp, 6 Scott, N. R. 707. * Turner v. Davies, 2 Esp. 479. In this case Lord Kenyon said, "I have no doubt, that where two parties become joint sureties for a third per- son, if one is called upon and forced to pay the whole of the money, he has a right to call on his co-security for contribution ; but where one has been induced so to become surety at the instance of the other, though he thereby renders himself liable to the person to whom the security is given, there is no pretence for saying that he shall be liable to be called upon by the person at whose request he entered into the security. This is the case here : Da- vies, the defendant, became security, at the instance of Turner, the plaintiff, to Brough ; and there is still less pretext for Turner to call on the defendant in this action, as he took the precaution to secure himself by a bill of sale. I am of opinion the defendant ought to have a verdict." See also Byers v. McClanahan, 6 Gill & Johns. 256; Taylor v. Savage, 12 Mass. 98; Thomas v. Cook, 8 B. & C. 728 ; Robison v. Lyle, 10 Barb. 612. See post, § 1148. * Harris v. Warner, 13 Wend. 400. 60 DIFFERENT KINDS OF CONTEACTS. [CHAP. I. ing the claim, because he ought to have paid it at once. Yet, if there should be a clear ground of defence, it would perhaps entitle liim to contribution. The authorities, however, are quite contradictory on these points, and the rule seems not to be settled.^ § 70. In the next place, we come to the question of sur- vivorship of parties. Where a contract is made by two or more persons jointly, and not jointly and severally, and one of them dies, his liability dies with him, and the survivors become aloiie responsible. The action upon the contract cannot therefore be brought against his representatives. Nor can the survivors, after satisfying the claim, enforce contribu- tion against the representatives of the party who is dead.^ If all of the joint obligors die, however, the representatives of the last survivor become liable on the contract, although they have no right of contribution against the representatives of the other parties. The same rules, also, apply in cases of joint obligees ; in case of the death of one, the right of action vests solely in the survivors, and in case of the death of all, the representatives of the last survivor are alone entitled to an ^ The rule that costs are recoverable between co-sureties was clearly held in Kemp v. Finden, 12 j\t. & W. 4"21. Baron Parke said, "They were costs incurred in a proceeding to recover a debt for which, on default of the principals, both the sureties were jointly liable, and the plaintiff hav- ing paid the whole costs, I see no reason why the defendant should not pay his proportion." The same rule was held in Davis v. Emerson, 17 Maine, 61; and in Bonney v. Sucly, 2 Wend. 481, and Cleveland v. Covington, 3 Strob. 184, a principal was held liable to his sureties for costs. The limitation that there should appear to be ground of defence, is stated in Fletcher v. Jackson, 23 Vt. 5'J3. See also Beckley v. Munson, 22 Conn. 299. The opposite doctrine was, however, ruled by Lord Tenterden in Roach V. Thompson, 4 C. & P. 194 ; Mood. & Malk. 487 ; Gillett v. Rippon, ib. 406, and Kni;:;ht v. Hughes, ib. 247. See also Boardman v. Paige, 11 N. H. 431, in which it was .held that where judgment -was recovered against one, on a suit against all the signers of a note, there was no right of contribution, the costs not being a burden common to all the signers. See also Henry v. Goldney, 15 M. & W. 494, in which the same doctrine is stated. 2 Bac. Abr. Obligation (D.) ; Anderson v. Martindale, 1 East, 497 ; Rolls V. Yate, Yelv. 177 ; Tippet v. Hawkey, 3 Mod. 263 ; Yorks v. Peck, 14 Barb. 648; Calder v. Rutherford, 3 Br. & B. 302; Foster v. Hooper, 2 Mass. 572 ; Waters v. Riley, 2 Harr. & Gill, 305. CHAP. I.] JOINT AND SEVERAL CONTRACTS. 61 action.^ If the coutract be joint and several, the liability of the deceased party survives to his representatives, and may be enforced against them either by the obligee in respect to the original obligation, or by the co-obligors in an action for contribution. 2 § 71. Yet where a contract is, by its terms, solely joint, if it appear by direct proof, or if the facts of the case clearly warrant an inference, that the parties intended it to be joint and several, it will be held in equity to be joint and several, and in case of tlie death of one of the parties, his representa- tives will be held liable. The ground upon which courts of equity proceed in such cases, is, that wherever the nature of the transaction or the facts of the case plainly show that the responsibility was intended to be joint and several, the omission of terms making it so is a matter of mistake or accident, against which relief should bo given. ^ Every con- tract for a joint loan for the benefit of all the obligees will, therefore, in equity, be treated as a joint and several contract, wiiether the transaction be of a mercantile nature or not.* Where, however, the inference of a joint and several liability cannot properly be made, and, a fortiori, where it is repelled by the facts of the case, a court of equity will not interfere. It will not, therefore, make a joint bond several against a mere surety, except upon positive proof that such was the agreement of the parties ; and wherever the obligation or covenant is purely matter of arbitrary convention, not growing out of any antecedent liability in all or any of the obligors or 1 Ibid. ; Rolls v. Tate, Yelv. 177 ; Anderson ». Martindale, 1 East, 497 ; Martin v. Crompe, Ld. Eaym. 340. 2 Withers o. Bircham, 3 B. & C. 254; Shaw v. Sherwood, Cro. Eliz. 729; Towers v. IMoor, 2 Vern. 99; May v. Woodward, Freeman, 248, n. ^ 1 Story, Eq. Jur. § 162 to 164; Yorks v. Peck, 14 Barb. 644; Wilkinson v. Henderson, 1 Mylne & Keen, 682 ; Thorpe v. Jackson, 2 Younge & Coll. 553. Weaver v. Shryock, 6 Serg. & Eawle, 262 ; Sumner u. Powell, 2 Mer. 30 ; Underbill ti. Horwood, 10 Ves. 227 ; Ex parte Kendall, 17 Ves. 625 ; Cowell V. Bikes, 2 Russ. 191 ; Hunt ». Rousmanier's Adm'rs, 8 Wheat. 211. See also Yorks v. Peck, 14 Barb. 644. 62 DIFFERENT KINDS OP CONTRACTS. [CHAP. I. covenantors to do what they have undertaken (as, for example, a bond or covenant of indemnity for the acts or debts of third persons), a court of equity will not, by implication, extend the responsibility from that of a joint to a joint and several undertaking ; ^ unless in cases where, through plain mistake, and contrary to their actual agreement, the parties have omitted to insert in the obligation terms rendering it several as well as joint.^ ' Per Mr. Justice Story in 1 Story, Eq. Jur. § 164 ; Sumner v. Powell, 2 Mer. 30; Harrison v. Field, 2 Wash. 136; Ward v. Webber, 1 ib. 274; Richardson v. Horton, 6 Beav. 186 ; Burn v. Burn, 3 Ves. 573. = Wiser v. Blacbly, 1 Johns. Ch. 607 ; Crosby v. Middleton, Prec. Ch. 809 ; Berg v. Radoliff, 6 Johns. Ch. 302 ; Rawstone v. Parr, 3 Russ. 421, 539. CHAP. II.] LUNATICS AND IDIOTS. 63 CHAPTER II. OF THE PARTIES TO A CONTRACT. § 72. We now come to tlie consideration of the competency of parties to contract. The general principle of law is, that all persons not rendered incompetent by personal disability, or by considerations of public policy, may be parties to a con- tract. § T3. Incompetency to contract is of two kinds : 1st, Nat- ural ; and 2d, Legal. The former of these classes subdivides itself naturally into the contracts of : first, Lunatics and Idiots ; secondly, Drunkards. Lord Coke enumerates four different classes of persons, who are deemed in law to be non compotes mentis. The first is an idiot or fool natural'; the second is he who was of good and sound memory, and by the visitation of God has lost it ; the third is a lunatic, lunati- cus, qui gaudet in lucidis intervalKs, and sometimes is of good and sound memory, and sometimes non compos mentis; and the fourth is a non compos mentis by his own act, as a drunk- ard.i No contract can exist, unless there be a mutual consent of the parties, and an intelligent understanding of its terms ; and accordingly the first incapacity, recognized by tire law, arises whenever the mental infirmity of either party, or of both parties, precludes the possibility of a just apprehension of the terms of the agreement, or of an intelligent assent to them.^ LUNATICS AND IDIOTS. § 74. And, first, as to the contracts of lunatics. A lunatic is a person who is crazy or deranged in intellect, and who is ' BeTerley's Case, 4 Co. 124; Co. Litt. 247 a. « Ersk. Institute, 418. 64 OP THE PARTIES TO A CONTRACT. [CHAP. II. incapable of logical sequence of thought or argument.^ This class includes not only those who have been unsound in intel- lect from their birth, and those who are permanently insane, but also those in whom the fits of lunacy are intermittent, or who are insane only upon some one subject or class of subjects. If the lunacy be permanent and general, the lunatic is wholly incapacitated from contracting, either in his own behalf, or as agent for another person.^ But if it be merely intermittent, or if it be confined to a particular subject or class of subjects, so that the mind can act with perfect sanity upon all other subjects, or has lucid intervals of sanity, the incapacity to con- tract is limited to the subjects in respect to which the party is insane, and to the time during which he is suffering from a fit of lunacy. 3 And if a contract be made by an insane person during a lucid interval, it will be valid although the party be insane immediately before and after.* If, however, a party be ' This rule was reaffirmed upon great deliberation in the very recent case of Banks v. Goodfellow, Law R. 5 Q. B. 549 (1870), in which the dicta to the contrary in Waring v. Waring, 6 Moore, P. C. 341, and Smith V. Tebbitt, Law R. 1 P. & M. 398, were disapproved. Every person may be deemed of unsound mind who has lost his memory and understanding by old age, sickness, or other accident, so as to render him incapable of trans- acting his business, and of managing his property. Young v. Stevens, 48 N. H. 135 (1868) ; Dennett v. Dennett, 44 N. H. .531. = Scntance v. Poole, 3 C. & P. 1 ; Dunnage v. White, 1 Wils. Ch. 67; Hall V. Warren, 9 Ves. 605. ^ Hall V. Warren, 9 Ves. 605 ; Lewis v. Baird, 3 McLean, 56. ' This same doctrine was laid down by M. D'Aguesseau, as advocate- general, in the parliament of Paris, in the case of the Prince de Conty ; a translation of a portion of whirh is to be found in 2 Evans's Pothier on Obli- gations, Xo. HL We subjoin the extract containing the desci-iption of a lucid interval. " It must not be a superficial tranquillity, a shadow of repose, but on the contrary a profound tranquillity, a real repose ; not a mere ray of reason, which only serves to render its absence moi'e manifest as soon as it is dissipated, not a flash of lightning, which pierces through the darkness only to render it more thick and dismal, not a glimmering twilight, which connects the day with the night, but a perfect light, a lively and continued radiance, a full and entire day separating the two nights of the madness which precedes, and that which follows it; and, to adopt another image, it is not a deceitful and faithless stillness which follows or forebodes a tempest, but a sure and steady peace for a certain time, a real cal.-n and a perfect serenity ; in short, without looking for so many different images to represent CHAP. II.] LUNATICS AND IDIOTS. 65 a monomaniac, or be insane upon any class of subjects, his power to contract is restricted to those subjects upon which he is entirely sane. And it should, therefore, clearly appear, in the case of a contract by such a person, that his insanity in other particulars did not interfere with his powers or injure his judgment, in the particular matter of his contract. So, also, it should clearly appear, in cases where a contract is made by a lunatic during a lucid interval, that his mind was in com- plete possession of its sane powers during such interval, and was not in the sliglitest measure affected by his lunacy. If it be proved that a party is subject to monomania or lunacy, the presumption is, that he is incapable of contracting, and it becomes incumbent upon the otlier party seeking to recover against him to prove clearly that the lunatic or monomaniac was perfectly sane and in full possession of his powers at the time when the contract was made.^ But there is no presump- our idea, it must not be a simple diminution, a remission of the malady, but a kind of temporary cure, an intermission so clearly marked, that it is entirely similar to the restoration of health. And, as it ia impossible to judge in a moment of the quality of an interval, it is necessary that it should last sufficiently long to give an entire assurance of the temporary re-estab- lishment of reason ; this period it is not possible to define in general, and it depends upon the different kinds of madness. But it is always certain that there must be a time, and that time considerable. These rcflrctions are not only written by the hand of nature on the minds of all men, the law also adds its characters in order to engrave them more profoundly in the heart of judges." ' Attorney-General v. Parnther, 3 Bro. C. C. 443. In this case Lord Thurlow said, " There is an infinite, nay, almost an insurmountable difficulty in laying down abstract propositions upon a subject which depends upon such a variety of circumstances as the present must necessarily do. General rules are easily framed ; but the application of them creates considerable difficulty in all cases in which the rule is not sufficiently comprehensive to meet each circumstance, which may enter into, and materially affect, the particular case. There can be no difficulty in saying, that if a mind be possessed of itself, and that at the period of time such mind acted, that it ought to act efficiently. But this rule goes very little way towards that point which is necessary to the present subject ; for though it be true, that a. mind, in such possession of itself, ought, when acting, to act efficiently, yet it is extremely difficult to lay down, with tolerable precision, the rules by which such state of mind can be tried. The course of procedure, for the purpose of trying the state of any party's mind, allows of rules. If derange- Trr»T T 66 OF TirE PARTIES TO A CONTRACT. [CHAP. II. tion of law that a temporary hallucination or delusion result- ing from a disease has continued ; and the party must show the existence of such alleged insanity at the time the contract was made.i The effect of partial insanity, or delusions, not affecting the general faculties, upon the power of a person to make a will or contract, not relating to the subject about which the de- lusions exist, has indeed been much discussed of late ; and it may now be considered settled that such partial insanity does not affect the competency of the party to contract about other matters. Thus, where a person had been confined as a lunatic for twenty years, and was subject to delusions that he was personally molested by a man who had long been dead, and that he was pursued by evil spirits whom he believed to be visibly present, it was held that he could notwitlistanding make a will, bequeathing all his property to a favorite niece.''^ ment be alleged, it is clearly incumbent on the party alleging it to prove such derangement; if such derangement be proved, or be admitted to have existed at any particular period, but a lucid interval be alleged to have pre- vailed at the period particularly referred to, then the burden of proof attaches on the party alleging such lucid interval, who must show sanity and compe- tence at the period when the act was done, and to which the lucid interval refers ; and it certainly is of equal importance, that the evidence in support of the allegation of a lucid interval, after derangement at any period has been established, should be as strong and as demonstrative of such fact, as where the object of the proof is to establish derangement. The evidence in such a case, applying to stated intervals, ought to go to the state and habit of the person, and not to the accidental interview of any individual, or to the degree of self-possession in any particular act; for from an act with reference to certain circumstances, and which does not of itself mark the restriction of that mind which is deemed necessary, in general, to the disposition and management of affairs, it were certainly extremely dangerous to draw a conclusion so general, as that the party, who had confessedly be- fore labored under a mental derangement, was capable of doing acts binding on himself and others." ' Staples V. AVellington, 58 Mc. 454 (1870). = Banks v. GoodfcUow, Law R. 5 Q. B. 549 (1870). In this very interesting case, Cockburn, C. J., thus lays down the law. " The question whether partial unsoun Inst. Lib. 3, tit. 20, § 8 ; Dig. Lib. 50, tit. 17, 1. 5, 40. " In Brown «. .Jodrell, 3 C. & P. 30, lunacy was pleaded as a defence to an action of assumpsit for work and labor done. Lord Tenterden said : " I think that this defence cannot be allowed, and that no person can be suf- fered to stultify himself, and set up his own lunacy in his defence. If indeed it can be shown, that the defendant has been imposed upon by the plaintiff in consequence of his mental imbecility, it might be otherwise, and such a defence might be admitted." Sentance v. Poole, 3 0. & P. 1 ; Levy v. Baker, ]\I. & M, 106, n. ; Manby v. Scott, 1 Sid. 112 ; Baxter v. The Earl of Portsmouth, 5 B. & C. 170. In Faulder v. Silk, 3 Camp. 126, Lord EUenborough thought, " that an inquisition of lunacy was by no means con- ckisive on the trial of that issue, but was admissible as evidence.'' See also Ser^'cson v. Sealey, 2 Atk. 412 ; Tarbuck v: Bispham, 2 M. & W. 2 ; Ball V, Wannin, 3 Bligh (n. s.), 1. '' Dane v. Kirkwall, 8 C. & P. 679 ; Year-Book, 9 Henry VI. 6 ; Britton, tit. Dette, fol. 66. •■ Ba.\ter v. The Earl of Portsmouth, 5 B. & C. 170 ; Chitty on Contracts, CHAP. II.] LUNATICS AND IDIOTS. 75 cient reason is, however, apparent for the difference of the rule relating to parol contracts and to specialties, since if the men- tal infirmity be so great in the one case as to invalidate con- tracts under seal (which may differ from a parol contract only in the fact of sealing and delivery), why is it not sufficient to annul a parol contract, which may be entered into with less deliberation, and affords a wider scope for surprise and imposi- tion ? § 81. In America, the old maxim has been utterly dis- carded, as at variance with reason and justice, and the author- ities fully sustain the more just and equitable doctrine, that either lunacy or idiocy nullifies a contract, and that it may be either specially pleaded or shown in evidence, under the general issue. ^ § 82. "Where a contract has been executed, if it be for the procuring either of necessaries or of articles suited to the rank and station of the lunatic, and be entered into lond fide, a court of law will enforce it.^ The ground of this rule is, that since the lunatic has had the benefit of the articles, and no advantage has been taken of him, it is but just that he should 136. But see Yates v. Boen, 2 Str. 1104 ; Faulder v. Silk, 3 Camp. 126 ; Sergeson v. Sealey, 2 Atk. 412, contra. ' Mitchell V. Kingman, 5 Pick. 431 ; Seaver v. Phelps, 11 Pick. 804 ; Fitzgerald v. Reed, 9 Sm. & Marsh. 94 ; Rice v. Peet, 15 Johns. 503; Grant V. Thompson, 4 Conn. 203 ; Lang v. Whidden, 2 N. H. 435 ; Somes v. Skinner, 16 Mass. 348. It has been held, however, in Massachusetts, "that the deed of a person non compos, not under guardianship, conveyed a seisin, and was voidable only, but when under guardianship, was void." Wait v. Maxwell, 5 Pick. 217 ; Breckenridge v. Ormsby, 1 J. J. Marsh. 236. * Baxter v. Earl of Portsmouth, 2 C. & P. 178 ; 7 D. & R. 617. The defendant in this case, being a lunatic, hired and used certain carriages and harnesses, which were made to his order, and for which he agreed to pay a certain annual sum. The defendants were unaware of his insanity. Suit was instituted upon the contract, and it appeared in evidence that the de- fendant often used the carriages, and that they were suitable to his rank and situation. Abbott, Chief Justice, in his opinion said : " I was of opinion, at the trial, that the evidence produced in this case was not such as ought to defeat the plaintiff's right of recovering in the present action ; considering that it was brought for the hire and use of carriages suited to the state and degree of the defendant, and by him actually ordered and enjoyed." Mc- Crillis V. Bartlett, 8 N. H. 569 ; Wentworth v. Tubb, 1 Y. & Col. C. C. 171; Molton v. Camroux, 12 Jur. 800; 2 Exch. 487.. 76 OF THE PARTIES TO A CONTRACT. [CHAP. II. pay for them, " Qui sentit commoduvi, sentire debet et onus." Or, as has been elsewhere stated, if a person of apparently sound mind, and not known to be otherwise, purchases prop- erty which is beneficial to him, by a contract otherwise fair and bond fide, and which has been fully completed, paid for, and enjoyed, and cannot be restored so as to put the parties in statu quo, such contract will not be afterwards set aside either by the lunatic or his representative, unless upon proof of fraud or undue imposition.^ Nor is this rule confined to executed contracts for necessaries, although it applies with peculiar force thereto, but governs generally all completely executed contracts for the purchase of property, where the lunatic is not of an utterly unsound mind, the fact of lunacy is unknown, and no advantage has been taken, and where the subject-matter of the contract has been fully enjoyed and can- not be restored so as to put the parties in statu quo? Indeed, ' Young V. Stevens, 48 N. H. 133 (1868). ^ Molton y. Camroux, 2 Exch. 487; 4 ib. 17. In this case the court said: " We are not disposed to lay down so general a proposition as that all executed contracts bondjide entered into, must be taken as valid, though one of the parties be of unsound mind ; we think, however, that we may safely conclude, that when a person, apparently of sound mind, and not known to be otherwise, enters into a contract for the purchase of property which is fair and bondjide, and which is executed and completed, and the property, the subject-matter of the contract, has been paid for and fully enjoyed, and cannot be restored so as to put the parties in statu quo, such contract cannot afterwards be set aside, either by the alleged lunatic, or those who represent him ; and this is the present case, for it is the purchase of an annuity which has ceased." In Beals v. See, 10 Barr, 60: " As to the rest of the case, the judge charged pretty much as the law is laid down in La Rue v. Gilkyson, 4 Barr, 'Mo, in which it was said, that an insane man, like an infant, is liable on his executed contract for necessaries ; and in which it was intimated, that he would be hable for merchandise innocently furnished to his order. Should he have made a wild and unthrifty purchase from a stranger unapprised of his infirmity, who is to bear the loss that must be incurred by one of the parties to it? Not the vendor, who did nothing that any other man would not have done. As an insane man is civilly liable for his torts, he is liable to bear the consequences of his infirmity, as he is liable to bear his misfor- tunes, on the principle that where a loss must be borne by one of two inno- cent persons, it shall be borne by him who occasioned it. A merchant, like any other man, may be mad without showing it ; and, when such a man o-oes into the market, makes strange purchases, and anticipates extravagant profits, CHAP. II.J LUNATICS AND IDIOTS. 77 the rule has been pressed still further, and it has been held in a late case in the Court of Exchequer, that where a lunatic pays a deposit on the purchase of real estate to a vendor who has no knowledge of his lunacy, and the contract itself is fair, he cannot recover the deposit.^ Whether the doctrine to this •what are those who deal with him to think ? To treat him as a madman, would exclude every speculator from the transactions of commerce. The epidemic of the oountiy is, an impatient desire to become suddenly rich by desperate adventure, instead of awaiting the slow but sure approach of wealth from industry and small profits. Had there been fraud, or undue advantage taken, — but the judge declares that it was not imputed at the trial, and we are bound by his report, — the personal appearance and ex- travagant views of the intestate might have been left to the jury, as circum- stances that ought to have put the defendants on their guard ; but the prayers for direction seem to have been founded on a notion that, independent of every other consideration, a nnn compos mentis has not capacity either to make or to execute a contract, under any circumstances — a position alto- gether untenable. But the question of fair dealing seems not to be seriously agitated ; and, if the plaintiff had relied on it, it would have been his busi- ness to go with it before the jury.'' Fitzhugh v. Wilcox, 12 Barb. 235; Price V. Berrington, 3 Mac. & G. 486; Dane v. Kirkwall, 8 C. & P. 679. ' Beavan v. M'Donnell, 23 Law J. Rep. (n. s.) 94; 9 Exch. 309. In this case the reasoning of the court through Mr. Baron Parke was as follows : " The question is whether the present case falls within the principle of Molton V. Camroiix, and we think that it does. It will be observed, that the replica- tion in this ease states an additional fact, the absence of which occasioned the remark by Mr. Justice Patteson, in giving the judgment of the Court of Error. The special verdict in that case stated, that the intestate was, at the time of the contract, a lunatic, and of unsound mind, so as to be incapable to manage his affairs. Mr. Justice Patteson observed, ' that did not show such a state of mind in the grantee as to render him necessarily incapable of know- ing the nature of his acts.' The replication supplies this supposed defect by averring that the plaintiff was a lunatic, and of unsound mind, and thereby incapable of contracting, or of understanding the meaning of contracts, and the statement is, in other respects, the same as that of the special verdict in this case. We think this makes no difference between the present cas« and that already decided, and we are further of opinion that this falls within the principle of that case. This action was not brought on an executory contract. The plaintiff is seeking to recover back a sum of money paid to the defendant on a contract, which the defendant has performed, and accord- ing to which he is entitled to retain it. The contract was entered into by the defendant, and the money received fairly and in good faith, arid without knowledge of lunacy, and being a transaction completely executed, as far as the deposit is concerned, the defendant has done all he is bound to do to 78 OP THE PARTIES TO A CONTRACT. [CHAP. 11. extent would be supported in this country seems doubtful,^ but it is clearly established that wherever a contract is made with a lunatic apparently sane, and without ingredients of fraud and overreaching, it cannot, when executed, be rescinded, unless the parties can be reinstated in their previous position.^ § 83. Where, however, the contract is executory, it could not be enforced against the lunatic.^ Yet if he had received any advance thereon, he would be bound, in rescinding his contract, to restore it to the other party.* So, if the contract make that his own. The plaintiff has had all he bargained for, the power of buying the estate and a title established in a given time on payment of the residue of the purchase-money. The case is in substance the same as if the plaintiff had paid to the defendant a sum of money down, to abide the event of his performing a certain piece of work in a certain time ; and if the defendant has done this stipulated work, the money is now his own, and the plaintiff cannot recover it back. Judgment for the defendant." This, however, would seem to be merely an executory contract, the payment of the deposit being merely a preliminary, and to secure the performance of the whole contract. The whole contract failing, it would seem that there was no consideration to support the payment of the deposit, except the delivery of the abstract of title by the vendor. And inasmuch as the deposit was £416, the consideration seems grossly beyond the worth of such acts. The consideration for the payment of the deposit being the complete con- tract, on the failure thereof, it would seem that so much of the deposit only should have been retained as would remunerate the vendor for his acts and trouble. ' The cases in this country are somewhat contradictory. Seaver v. Phelps, 11 Pick. 304; Rice v. Peet, 15 Johns. 503; Fitzgerald v. Reed, 9 Sm. & M. 94, are contrary to the rule as laid down in Beavan v. M'Donnell. But in Beals v. See, 10 Barr, 60, the court seem to support it. In Loomis ». Spencer, 2 Paige, 158, the Chancellor said: "A court of equity ought not to interfere where the lunatic has actually had the benefit of the prop- erty, if the contract was made in good faith, without knowledge of the incapacity, and where no advantage has been taken of the situation of the party." But it is also held in this case that the parties must be replaced in static quo. See Wait v. Maxwell, 5 Pick. 217 ; La Rue v. Gilkyson, 4 Barr, 375. ' Beavan v. M'Donnell, 9 Exch. 309 ; Beals v. See, 10 Barr, 56 ; Price v. Berrington, 7 Hare, 394 ; 3 Mao. & G. 486 ; Molton v. Camroux, 2 Exch. 487; 4 ib. 17 ; Fitzhugh v. Wilcox, 12 Barb. 235; Dane v. Kirkwall, 8 C. & P. 679. ^ Beavan v. M'Donnell, 9 Exch. 309; La Rue v. Gilkyson, 4 Barr, 375; Loomis V. Spencer, 2 Paige, 158 ; Beals v. See, 10 Barr, 60. * Loomis V. Spencer, 2 Paige, 158; Molton v. Camroux, 2 Exch. 487; 4 ib. 17 ; Hall v. Warren, 9 Ves. 605. CHAP. II.] LUNATICS AND IDIOTS. 79 be partially executed, it would be binding on the lunatic as far as it was executed completely, but not in respect to the part not executed, unless the contract were not susceptible of apportionment.^ In all cases where the circumstances under which a contract is made, are such as would, in the mind of a reasonable man, induce a belief in the insanity of the other party, the contract would be held to be invalid on the ground of fraud. § 84. But the deed of a lunatic is only voidable, and not void ; and in order to avoid it, on his restoration to his right mind, he miist return the price paid, or the contract for its payment, if not paid. If he receive payment after the return of sanity, and gives no notice of his intention to disaffirm the conveyance, his ratification may be inferred.^ But in a late case in Massachusetts, it was deliberately held that an insane person, or his guardian, may bring an action to recover land of which a deed was made by him while insane, which deed has not since been ratified or affirmed, without first restoring the consideration to the grantee.* ' Beavan v. M'Donnell, 9 Exch. 309. ' Arnold v. Richmond Iron Works, I Gray, 434. But see Gibson v. Soper, infra, in which Arnold u. Richmond Iron Works was commented on. See also Molton v. Camroux, 2 Exch. 487 ; 4 ib. 17 ; Price v, Berrington, 3 Mac. & G. 486 ; Fitzhugh v. Wilcox, 12 Barb. 235. ' Gibson V. Soper, 6 Gray, 279. In this case Thomas, J., said : " This is a writ of entry, brought for the demandant by his probate guardian, to re- cover a farm situated in Great Barrington in this county. The tenant pleads the general issue, and claims title under a deed of the demandant, dated July 2.0th, 1853, but delivered some time in November of that year. The demandant replies, that at the time of the making and of the delivery of the alleged deed he, the grantor, was an insane person. " The tenant says, that at the time of the execution of the deed, and as the consideration therefor, the tenant executed and delivered to the de- mandant a contract in writing, by which among other things, he stipulated to pay the debts of said Gibson, consisting in part of incumbrances upon said real estate, to support said Gibson and his wife, to pay said Gibson an annuity for his life, and to pay certain sums of money to the children of -books are taken from dicta, and it was there said that at this age of the world, when all the tendencies of the law of nations are to exempt individuals and private con- tracts from injury or restraint in consequence of war between their governments, the court were not disposed to declare such contracts unlawful as have not been adjudged to be inconsistent with a state of war. It was therefore held, upon the most care- ful consideration of the subject, that a lease of land by a citizen of a rebel State, during the late civil war or rebellion, to a citi- zen of Massachusetts, then residing there, was not invalid ; and the lessor was allowed to sue and recover the rent in the courts of that State.i Yet if such alien enemy reside within the United ' Kershaw v. Kelsey, 100 Mass. 561 (1868). The opinion of Judge Gray contains such an exhaustive examination- of this subject as to justify the following extract: "It is," says he, " uni-versally admitted that the law of nations prohibits all commercial intercourse between belligerents, without a license from the sovereign. Some dicta of eminent judges and learned commentators would extend this prohibition to all contracts what- ever. In a matter of such grave importance, the safest way of arriving at a right result will be to examine with care the principal adjudications upon the subject, most of which were cited in the argument. " The celebrated judgment of Sir William Scott, in the leading case of The Hoop, 1 C. Rob. 196, determined only that all trading with a public enemy, unless by permission of the sovereign, was interdicted ; and that all property engaged in such trade was lawful prize of war. None of the numerous authorities there cited went beyond this. The principal reason assigned is, that in a state of war the question when and under what regula- tions commercial intercourse, which is a partial suspension of the war, shall be permitted, must be determined, on views of public policy, by the sover- eign, who alone has the power of declaring war and peace; and not by individuals, upon their own notions of convenience, and possibly on grounds of private advantage, not reconcilable with the general interest of the State. In the case of The Indian Chief, 3 C. Rob. 22, the same principle was applied to the case o{ a foreign merchant resident in the British possessions in India. And all the later cases in the same court were of trading or licenses to trade with the enemy, directly or indirectly. "It is true that, in the case of The Hoop, that eminent jurist does also somewhat rely upon the consideration of the total inability to enforce any contract by an appeal to the tribunals of the one country on the part of the 94 OP THE PARTIES TO A CONTRACT. [CHAP. II. States or in England, and be within the protection and license of the government, his contract may be enforced.^ No valid subjects of the other. The rule is certainly well settled, that during any war, foreign or civil, an action cannot be prosecuted by an enemy, residing in the enemy's territory, but must be stayed until the return of peace, or, in the words of the old books, donee terrce sint communes. Staunf. Prerog. fol. 39. Co. Litt. 129 h. Sanderson v. Morgan, 39 N. Y. 231. Whelan V. Cook, 29 Md. 1. But that rule temporarily restrains the remedy only, without denying or impairing the existence of the right ; as was said by the Supreme Court of New York, while Chancellor Kent presided there, ' The present plea only bars the plaintiff, in his character of alien enemy com- morant abroad, from prosecuting the suit ; it does not so much as touch the merits of the action.' Bell v. Chapman, 10 Johns. 185. That it has nothing to do with the validity of the contract sued upon is manifest from the case of a ransom bill, which is universally admitted to be a lawful con- tract, and yet upon which no action can be maintained in a court of common law during the war, but may after the return of peace. Rioord v. Betten- ham, 3 Burr. 1734; s. c. 1 W. Bl. 563; Anthon v. Fisher, 2 Doug. 650; 8. c. 3 Doug. 178 ; Brandon v. Nesbitt, 6 T. R. 28 ; 1 Kent Coram. (6th ed.) 107. The reasons assigned by common-law judges for the plea of alien enemy are, that an enemy to our government shall not have the benefit and protection of its laws in its courts ; and that the fruits of the action may not be remitted to a hostile country, and so furnish resources to the enemy. Hutchinson v. Brook, 11 Mass. 122 ; Sparenburgh v. Bannatyne, 1 Bos. & Pul. 170; M'Connellt). Hector, 3 Bos. & Pul. 114. The objection has not been much favored ; for even in a real action, after the plaintiff has recovered judgment, alien enemy at the time of the original suit is no good plea to scire facias to obtain an execution : West v. Sutton, 2 Ld. Raym. 853 ; s. c. 1 Salk. 2 ; Holt, 3 ; and in a personal action brought by an alien friend, his becoming an enemy by the breaking out of war, which could not have been pleaded earlier, has been held no ground for staying judgment after verdict, or execution after judgment, or affirmance of a judgment on error. Vanbrynen v. Wilson, 9 East, 321; Buckley v. Lyttle, 10 Johns. 117; Owens V. Hanney, 9 Cranch, 180. No answer in the nature of a plea of alien enemy has been filed in this case, and no objection made to the capacity of the plaintiff to sue, but only to the validity of the contract sued on ; and therefore no question of the personal disability of the plaintiff is involved, or need be considered, except so far as to show that it is wholly independent of the merits of the cause of action. " In Potts V. Bell, 8 T. R. 548, the elaborate arguments of the common lawyers and civilians and the judgment of the court were confined to the question of the illegality of a British subject's trading with an enemy, and ' Com. Dig. tit. Alien, C. 5 ; Wells v. Williams, 1 Salk. 46 ; Boulton V. Dobree, 2 Camp. 163 ; Chitty on Prerog. 48, 49. CHAP. II.] ALIENS. 95 contract, however, except for the payment of ransom-money, whether express or implied, can subsist between a citizen of the the single point decided was that an insurance upon such trading was illegal. In Antoine v. Morshead, 6 Taunt. 237 ; s. c. 1 Marsh. 658 ; it was held that a bill of exchange drawn on England by a British subject imprisoned in France, payable to another British subject also imprisoned there, and indorsed to a French banker, during the war, might be sued upon by the latter in England after the return of peace ; and Chief Justice Gibbs said : ' I can collect but two principles from the cases cited by the counsel for the defendant, and they are principles on which there never was the slightest doubt. First, that a contract made with an alien enemy in time of war, and that of such a nature that it endangers the security or is against the policy of this country, is void ; such are policies of insurance to protect an enemy's trade. Another principle is, that however valid a contract origin- ally may be, if the party become an alien enemy he cannot sue ; the crown, during the war, may lay hands on the debt, and recover it ; but if it do not, then, on the return of peace, the rights of the contracting alien are restored, and he may himself sue. No other principle is to be deduced.' In-Willison V. Patteson, 1 Moore, 133 ; s. c. 7 Taunt. 440 ; a bill of exchange drawn upon a British subject resident in England, and having funds of an enemy in his hands, by an alien enemy residing in the hostile territory, payable to his own order, and by him indorsed to a British subject also residing there, was held void, because a direct trading with the enemy. The recent case of Esposito V. Bowden, 7 El. & Bl. 763, was upon a charter-party for a voyage by a British subject to an enemy's port, which the plea alleged could not be performed without ' dealing and trading with the queen's enemies ; ' and the judgment of the Exchequer Chamber, as delivered by that excellent commercial lawyer, Mr. Justice Willes, was equally limited, and stated the general proposition upon which the judgment was based in this form : ' 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 license of the crown, is illegal.' "We now come to the American cases cited for the defendant. The earliest is that of Hannay v. Eve, 3 Cranch, 242, which merely decided that a contract made in fraud of the laws of the United States could not be enforced in the courts of the United States. In the later case of Kennett ' V. Chambers, 14 How. 38, the same principle was applied, and it was held that a contract made in the United States, after Texas had declared itself independent of Mexico, but before its independence had been acknowledged by the United States, to convey lands in Texas, in consideration of money advanced in the United States to enable Texas to carry on war against Mexico, was in contravention of the public policy and treaties of the United States, when it was made, and could not therefore be enforced in their 96 OP THE PARTIES TO A CONTRACT, [CHAP. II. United States and an alien enemy, unless by permission of the government.! But a contract made by a neutral witli a citizen courts, after Texas had been admitted into the Union. To say that the present case falls within the same principle is to beg the whole question in controversy. "In Thirty Hogsheads of Sugar o. Boyle, 9 Cranch, 191, the only point discussed or adjudged was that produce of territory in the occupation of the enemy must be condemned by a prize court as enemy's property, so long as it belonged to the owner of the soil, whatever his national character or personal domicil. A like rule was held to apply in the recent civil war, in the Prize Cases, 2 Black, 635. "In the cases of The Rapid, 1 Gall. 304; The Julia, ib. 601-604; and The Emulous, ib. 571 ; Mr. Justice Story indeed spoke of the unlawfulness, of communications with the enemy as extending to all contracts and every kind of intercourse. But all aucb statements were obiier dicta; for neither of those cases involved so broad an application. In The Julia, he admitted, in the Circuit Court, that ' the proposition is usually laid down in more restricted terms by elementary writers, and is confined to commercial inter- course ; ' and in delivering the judgment of affirmance in the Supreme Court, he defined the point decided to be ' that the sailing on a voyage under the license and passport of protection of the enemy, in furtherance of his views and interests, constitutes such an act of illegality as subjects the ship and cargo to confiscation as prize of war.' 1 Gall. 601 ; 8 Craneh, 190. In The Emulous, the only question in issue was of the confiscation of enemies' property ; and his decree was reversed by the Supreme Court. Brown v. United States, 8 Cranch, 110. His decree in The Rapid was affirmed. 8 Cranch, 155. But in that case, as well as in The Joseph, 1 Gall. 545, and 8 Cranch, 451, the decision was simply that the sending of a vessel by an American to or from an enemy's port after a declaration of war was a trading with the enemy, which would warrant a condemnation in a prize court. " In delivering the judgment of the Supreme Court in the case of The Rapid, Mr. Justice Johnson said : ' In the state of war, nation is known to nation only by their armed exterior ; each threatening the other with conquest or annihilation. The individuals who compose the belligerent States exist, as to each other, in a state of utter occlusion. If they meet it is only in combat.' ' On the subject which particularly affects this case, there has been no general relaxation. The universal sense of nations has acknowledged the demoralizing effects that would result from the admission of individual intercourse. The whole nation are embarked in one common ' Com. Dig. tit. Alien, C. 5; Griswold v. Waddington, 15 Johns. 57; 16 Johns. 438; Musson v. Fales, 16 Mass. 334; The Francis and Cargo, 1 Gall. 448 ; The Rapid, 8 Cranch, 156 ; The Alexander, 8 Cranch, 169 ; The Julia, 8 Cranch, 181. CHAP. II.] ALIENS. 97 in an enemy's country is valid, and a suit thereon may be main tained in the courts both of England and of the United States.^ bottom, and must be reconciled to submit to one common fate. Every individual of tbo one nation must acknowledge every individual of the other nation as his own enemy, because the enemy of his country.' And in speaking of the rule of prize law, which condemns property engaged in hostile trade, 'the object, policy, and spirit of the rule is to cut off" all communication or actual locomotive intercourse between individuals of the belligerent States. Negotiation or contract has therefoi-e no necessary con- ' Houriet v. Morris, 3 Camp. 303. An alien cannot take lands by the act of the law, but only by the act of the party. He cannot, therefore, take lands by descent, curtesy, dower, or guardianship, but he may by purchase, whether it be by grant or by devise. The theory of the common law is, that he does not take lands for his own benefit, but for the benefit of the State, and therefore he cannot hold them against the State. But, as he is trustee for the State, no one can disturb him in his title and possession, except the sovereign power. Co. Litt. 2 b; 129 6; 14 Hen. IV. 20; Dyer, 2 b. Until inquest or oflice found, therefore, he occupies the same position as every other person holding land, and may defend his title in a real action against all persons but the sovereign, during his life. Upon his death, however, the sovereign becomes seised without office found, because his freehold cannot be inherited by his blood, and it therefore would be in abeyance. During his life, he has complete dominion over it, and may convey the same to a purchaser ; but the purchaser, in such case, would take it subject to seizure by the sovereign, after oflice found. Fox v. Southack, 12 Mass. 143 ; Sheaffe v. O'Neil, 1 Mass. 256 ; Knight v. Duplessis, 2 Ves. 360 ; Powell on Devises, 316 ; Fairfax's Devisee v. Hunter's Lessee, 7 Cranch, 603 ; Jackson v. Clarke, 3 Wheat. 1 ; Craig v. Radford, 3 Wheat. 594 ; Orr v. Hodgson, 4 Wheat. 453 ; Doe d. Governeur's Heirs v. Rob- ertson, 11 V/heat. 332 ; Fish v. Klein, 2 Mer. 431. But in Kentucky an alien, who has resided in the State two years, may take lands by purchase or descent. Louisville v. Gray, 1 Litt. 149. In Massachusetts an alien might formerly take real estate by devise or deed, but it was defeasible by the State, and if he died intestate and seised of real estate, it immediately vested in the Commonwealth, without office found. Waugh v. Riley, 8 Met. 296 ; Slater V. Nason, 15 Pick. 345. But this is now changed by statute, and an alien, whether resident or non-resident, may now hold, transmit, and convey real estate, changing the law as laid down in Foss v. Crisp, 20 Pick. 124; Gen. Sts. ch. 90, § 38; Lumb v. Jenkins, 100 Mass. 527 (1868). In North Carolina an alien may take land by purchase, but not by devise, nor by inheritance. 3 Ired. 141 ; 2 Hayw. 37 ; ib. 104 ; ib. 108. In New York a devise to an alien is void by statute. 2 N. Y. Rev. Stat. 57, § 4. In Louisiana aliens may inherit and transmit real, estate. Duke of Richmond V. Milne, 17 La. 312. VOT.. I. 7 98 OF THE PARTIES TO A CONTRACT. [CHAP. II. § 97. Indeed, generally, an alien friend may, when injiu-ed, bring any personal action which a citizen can ; and although nection with the offence. Intercourse inconsistent with actual hostility is the offence against which the operation of the rule is directed.' 8 Cranch, 160-103. These expressions would seem to have been intentionally, as they are necessarily in judicial effect, limited to the case before the court, of actual passage of persons or transmission of property between the terri- tories of the belligerents. In Scholefield v. Eichelberger, 7 Pet. 686, in which a contract made with an enemy during war for the purchase of goods was held void, the same learned judge, after asserting in the broadest terms, and outside of the question at issue, that ' the doctrine is not at this day to be questioned that, during a state of hostility, the citizens of the hostile States are incapable of contracting with each other,' took the precaution of adding, ' To say that the rule is without exception would be assuming too great a latitude.' " The general statements of Mr. Justice Daniel in Jecker v. Montgomery, 18 How. 110, and Mr. Justice Clifford in Hanger v. Abbott, 6 Wallace, 632, that as a consequence of the state of war all communication and inter- course between the citizens of one belligerent and those of the other are unlawful, were manifestly but repetitions of earlier dicta, without having occasion to scrutinize them with care ; for in the first case the vessel and cargo condemned as prize were knowingly sent by a citizen during war to an enemy's port ; and in the second the only question was of the suspension of the running of the statute of hmitations while the courts were closed during war. The Ouachita Cotton, 6 Wallace, 521, was a case of a sale of merchandise, which was strictly an act of commercial intercourse. " In the most recent judgment of the Supreme Court of the United States upon this subject, delivered since the argument of this case, the general doctrine is thus stated by Mr. Justice Davis : ' By a universally recognized principle of public law, commercial intercourse between States at war with each other is interdicted. It needs no special declaration on the part of the sovereign to accomplish this result, for it follows from the nature of war th.at trading between the belligerents should cease. If commercial inter- course were allowable, it would oftentimes be used as a color for intercourse of an entirely different character ; and in such a, case the mischievous con- sequences that would ensue can be readily foreseen. But the rigidity of this rule can be relaxed by the sovereign, and the laws of war so far sus- pended as to permit trade with the enemy. Each state settles for itself its own policy, and determines whether its true interests are better promoted by granting or withholding licenses to trade with the enemy.' United States V. Lane, 8 Wallace, 196. See also McKee v. United States, ib. 166. " Chancellor Kent, in a most able and learned opinion delivered in the Court of Errors of New York, and again in his Commentaries, asserted with great positiveness, as a necessary consequence from the doctrine of the CHAP. II.J ALIENS. 99 lie is not admitted to the same political and municipal rights as a citizen, yet he is equally entitled with him to the protec- illegality of all commercial intercourse and traffic, that all contracts made ■with the enemy during war were utterly void. Griswold v. Waddington, 16 .Johns. 438 ; 1 Kent Comm. 67. But the case of Griswold v. Waddington, as the learned Cliancellor candidly admitted at the outset of his opinion, was a case of commercial intercourse in the strictest sense, a dealing between commercial houses and with commercial paper; and nothing further was brought into judgment, except that a commercial partnership between the citizens of two countries was dissolved by the breaking out of war between them. His more general statements, therefore, in the opinion, Hke the repetition of them in his Commentaries, have not the weight of an adjudica- tion. " The only authorities, English or American, cited by Mr. Justice Story or Chancellor Kent, which aiford any color for extending the doctrine beyond trading directly or indirectly with the enemy, or insurances upon or licenses for such trade, are one ancient order in the Black Book of the Admiralty, two cases in the Year Books, and a dictum in the Court of Chancery. " The Black Book of the Admiralty contains a direction that ' inquisition be taken of all those who intercommunicate (^entrecommunent) , buy or sell with any of the enemies of our lord the king, without special license of the king or of his admiral.' It might well be doubted whether entreconimunent, in its connection with buying and selling, was intended to include any thing but trading or commercial intercourse. But it is sufficient to observe that, as that great legal antiquary, John Selden, tells us, ' The book itself is rather a monument of antiquity, yet not above about Henry VI., than of authority, and rather as a purpose of what was in some failing project, than ever in use and judgment held authentical. Most of it is against both the now received and former practice.' Selden's notes to Fortescue, ch. 32, 3 Selden's Works, 1898. " Chancellor Kent observes, 'Brian, J., is made to say in 19 Edw. IV., Bro. Abr., tit. Denizen et Alien, pi. 20, that an obligation made to the enemy of the king is void.' But it appears, both in the original Year-Book of 19 Edw. IV. 6, pi. 4, and in Chief Justice Brooke's Abridgment, that the obligation sued on was made in the third year of the king ; and the plea was that the plaintiff was born in the allegiance of the King of Denmark, who and all his subjects had been enemies since the eighth year of the king, in other words, not that the plaintiff was an enemy at the making of the obligation, but only at the time of bringing suit, that is to say, an ordinary plea of alien enemy, to the disability of the plaintiff, and not to the validity of the contract ; the dictum of Chief Justice Brian was only that ' perhaps the obligation would be void against the party, but the king should have it ; ' and even of this Chief Justice Brooke added in the place cited, and also in pi. 16 of the same title, quaere ; and Chancellor Kent himself, when 100 OF THE PARTIES TO A CONTRACT. [CHAP. U. tion of his person and property, and may bring suits in tlie courts of the United States and of the States, to vindicate his Chief Justice of the Supreme Court of New York, said : ' Tbe doctrine once held in the English courts, that an alien's bond became forfeited by the war (Year-Book, 19 Edw. IV. pi. 6), would not now be endured. The pica is called in the books an odious plea, and the latter cases concur in the opinion that the ancient severities of war have been greatly and justly softened by modern usages, the result of commerce and civihzation.' Clarke v. Morey, 10 Johns. 71, 72. The authority of the dictum as evi- dence of the law of nations at this day may be weighed by the ruling in the same court a few years earlier (also referred to by Chancellor Kent in Griswold v. Waddington), that ' all men may seize such goods as enemies of the king bring into the kingdom, and hold the goods to their own proper use.' 7 Edw. IV. 13, 14, pi.' 5 ; Bro. Abr. Property, 38. It is hardly necessary to remark that, by our law, enemies' goods on land within our territory cannot be seized by private citizens to their own use, nor even by the government, without an act of Congress. Brown v. United States, 8 Cranch, 110; Alexander's Cotton, 2 Wallace, 404. " In Ex parte Boussmaker, 13 Ves. 71, upon an application by an alien enemy to prove a debt in bankruptcy. Lord Erskine did say, ' If this had been a debt arising from a contract with an alien enemy, it could not possi- bly stand; for the contract would be void.' But the nature of the debt does not appear by the report ; and this dictum was wholly extra-judicial ; for the contract was made before the war, and the debt was allowed to be proved, reserving the dividend. "The continental writers, cited by Chancellor Kent, fall far short of supporting his assertion, that they ' unitedly prove that all private communi- cation and commerce with an enemy in time of war are unla^vful.' Judge Story, as we have already seen, in the case of The Julia, 1 Gall. 601, acknowledged that they usually confined the prohibition to commercial intercourse ; and hardly any of them, even as quoted by Chancellor Kent, go beyond that. The strongest, according to his statement, would appear to be Grotius, Cleirac, and Valin. But Grotius, in the place relied on, by no means ' says expressly that private contracts with the enemy touching private actions and things are unlawful, and controlled by the duty which the citizen owes to his own State.' At the utmost, he leaves it an open question ; for his words are : ' Sed de ipsorum actionibus et rebns quseri potest, quia videmus hsec quoque concedi hostibus non posse sine aliquo damno partis ; unde videri possunt talia pacta illieita cum civibus ob jus supereminens civitatis ; ' and again : ' Lex quidem posset adimere subditis aut perpetuis aut temporariis banc potestatem ; sed neque lex hoc semper facit, parcit enim civibus,' &c. De Jure Belli, Lib. 3, c. 23, art. 5. And the positions of Cleirac and Valin are apparently founded not upon the general law of nations, but upon particular ordinances of France. Cleirac, 197 ; 2 Valin, 31, 253. " On the other hand, in the case of Coolidge v. Inglee, 13 Mass. 26, CEIAP. II.J ALIENS, lOl rights or to redress his wrongs.^ He may, therefore, take ad- vantage of the insolvent laws of the State in which he is resi- dent ; ^ and he is entitled to the same protection as citizens against frauds practised on him. Thus, where the plaintiffs were manufacturers in England of " Taylor's Persian Thread," which was an action on a promissory note given by one American citizen to another, in consideration of the sale to him of a British license, Mr. Justice Jackson, delivering the unanimous judgment of this court, after deliberate advisement, and speaking of the argument that all intercourse with an enemy is unlawful, said : ' This general proposition cannot be maintained, in the unlimited extent to which it has been carried in the argument for the defendant. Commercial intercourse between two nations at war is under- stood to be prohibited. This interdiction applies, in general, to any species of commerce by which the enemy may be benefited at the expense of our own country. But the books of the highest authority on the law of nations, and the usages of all civilized people in modern times, abundantly prove that intercourse is not universally prohibited, and that even contracts with an enemy are in some cases allowable.' And after carefully examining in detail the statements of the text writers, expressing the belief that ' the prohibition is confined, among all civilized nations in modern times, to such intercourse as is commercial,' and ' dismissing this idea of something myste- riously noxious and criminal in every kind of intercourse with an enemy,' he proceeds to the consideration of the question whether the contract sued on was lawful, and arrives at the result that it was. That decision was indeed overruled by the Supreme Court of the United States in Patton v. Nicholson, 3 Wheat. 204, on the ground that the use of such a license by a citizen was unlawful. But this only shows that the general principle was misapplied in Coolidge v. Inglee, not that it was unsound or inaccurately stated. The wrong application of a principle does not weaken either the principle itself or the obligation of courts to adhere to it. Capen v. Bar- rows, 1 Gray, 380. That a citizen could not, consistently with a state of hostility and with his duty to his own country, take or use a license from the public officers of the enemy, does not affect the extent of the right of communication or contract between private citizens. Musson v. Fales, 16 Mass. 332, was a case of trading or commercial intercourse, which was held not to be so unlawful as to be no foundation for an action at law by a party who did not know that the party with whom he dealt was an enemy ; and exhibits no intention to modify the statement of the general doctrine in Coolidge V. Inglee." ' Taylor v. Carpenter, 2 Woodb. & Min. 15 ; Ex parte Barry, 2 Howard, 65 ; Barry v. Mercein, 5 Howard, 103 ; De la Vega v. Vianna, 1 B. & Ad. 284; Judiciary Act, § 11; Russel v. Skipwith, 6 Binn. 241; Clarke v. Morey, 10 Johns. 69. ^ Judd V. Lawrence, 1 Cush. 531. 102 OF THE PARTIES TO A CONTRACT. [CHAP. II. and the defendants, in America, imitated their names, trade- marks, envelopes, and labels, and placed them on thread of a different manufacture, it was held that the plaintiffs could recover for the fraud, although they were aliens.^ § 98. The question whether an alien is at liberty to re- nounce all allegiance to the United States, at his pleasure, has been much discussed, and considerable difference of opinion has been expressed.^ The rule of the common law is, that natural-born subjects owe a perpetual allegiance, which cannot be divested by any act of their own, unless authorized specially by legislative provisions.^ But it has been doubted whether this strict rule was applicable to this country. Mr. Chancellor Kent, after a historical review of all the cases in the federal coui'ts, states that " the better opinion would seem to be, that a citizen cannot renounce his allegiance to the United States without the permission of government, to be declared by law, and that as there is no legislative regulation in this case, the rule of the Ena;lisli common law remains unaltered.* ' Taylor «. Carpenter, 3 Story, 458. Mr. Justice Story, in this case, said, "Various grounds of objection are suggested in the answer of the defendant, none of which appear to me to be oi any validity. First, it is sufigested that the plaintiffs are aliens. Be it so. But in the courts of the United States, under the Constitution and Laws, they are entitled, being alien friends, to the same protection of their rights as citizens. There is no pretence to say, that if a similar false imitation and use of the labels of a citizen put upon his own manufactured articles, had been designedly and fraudulently perpetrated and acted upon, it would not have been an inva- sion of his rights, for which our law would have granted ample redress. There is no diiference between the case of a citizen and that of an alien friend, where his rights are openly violated." See also Coats v. Holbrook, 2 Sandf. Ch. 586. ^ Talbot V. Janson, 3 Call. 133 ; The Case of Isaac "Williams, 2 Cranch, 82, note ; JIurray v. The Charming Betsy, 2 Cranch, 64 ; U. S. v. Gillies, Pet. C. C. 159; Santissima Trinidad, 7 ^^'hcat. 28o ; Ainslie v. Martin, 9 Ma^s. 4.54-461. = Story's Case, Dyer, 298 6, 300 5; 1 Black. Comm. 370, 371 ; 1 Hale, P. C. 68 ; Foster, C. L, 7, 69, 183. ■" 2 Kent, (.'omm. pt. iv. lect. 2.5, p. 49. See also Shanks v. Dupont, 3 Pet. 242 ; and Inglis v. The Trustees of the Sailors' Snug Harbor, ib. 99. The naturalization laws of the United States, requiring the alien ■who is to be naturalized to abjure his allegiance, without evidence of a CHAP. II.] INFANTS. 103 INFANTS. § 99. The next class of persons legally disabled from con- tracting, except under certain limitations, is that of infants. Human life is divided into four periods, each of which is a multiple of seven. Natural infancy ends at seven years ; puberty begins at fourteen years ; legal infancy ends at twenty- one years ; and the natural life of a man is threescore years and ten.^ The law takes no cognizance of the acts or con- tracts of persons under seven years of age, whether they be civil or criminal. After seven years, any person may be capi- tally punished and may make voidable contracts. After four- teen years, which is the age of discretion, any person may become executor or executrix, and is presumed to have author- ity to make a will. But until a person is twenty-one years of age, he is a legal infant, and is incapable of making a binding contract. Before that age, the law presumes his faculties to be immature, undisciplined, and incompetent to guard against artifice and subtlety, and it therefore extends to all contracts, previously made, its protection and guardianship.^ A person is of full age to contract on the day preceding the twenty-first anniversary of his birth, and it has been adjudged, " that if one be born on the first day of February, at eleven at night, and on the last day of January, in the twenty-first year of his age, at one of the clock in the morning, he make a will of land, and die, 'tis a good will, for he was then of age." ^ This rule has, by some writers, been thought to have originated in the feudal law, by release by his sovereign, would seem to be inconsistent with this doctrine ; as would also the rule, which was held in United States v. Wyngall, 5 Hill, 16, that an alien may enlist in the army of the United States, and his con- tract will be valid. ' So, also, a person not heard from during seven years, is presumed to be dead. = Co. Litt. 172, 381 ; Bac. Abr. Infancy and Age, I. 3. 3 Anon., 1 Salk. 44; Herbert v. Turball, 1 Keb. 689; 1 Sid. 162; State V. Clarke, 3 Harrington, 557; Hamlin u. Stevenson, 4 Dana, 597; Roe v. Hersey, 3 Wils. 274; Fitz-Hugh v. Bennington, 6 Mod. 260. See Bingham on Infancy, American ed., and the valuable notes of Mr. Bennett, and Mac- pherson on Infancy, for a full discussion of the law applicable to infants. 104 OP THE PARTIES TO A CONTRACT. [CHAP. II. which the authority of the guardian in chivalry continued until his male ward arrived at the age of twenty-one years, because, until then, the ward was incapable of doing knight- service and attending his lord to the wars. But the suggestion of Sir William Blackstone, that this rule was probably copied from the old Saxon constitution on the continent, which extended the age of minority " ad annum vifjesimum primum, et eo usque juvenes sub tutdam reponunt" seems to have more weight.^ Probably the original reason upon which the rule was founded was a physical one, for, according to Pliny, " Homo crescit in longitudinem ad annos usque ter sejjtenos." The age at which persons are competent to contract is different in different countries. By the Roman law, full age is fixed at twenty-five years, and such is generally the law on tlie conti- nent of Europe. But in France, twenty-one years is the age of majority.^ In the United States, the rule of the common law, making twenty-one years the age of majority, generally obtains, although in some of the States female infants attain their majority at the age of eighteen years.* § 100. The law allows to infants certain privileges, as a secu- rity against that imposition to which they are peculiarly open from their ignorance and inexperience, and in respect of which they stand in need of protection and guardianship. These privileges are, however, entirely personal, and can only be taken advantage of by the infant himself; for, inasmuch as the reason for whij3h they are allowed does not apply to any party of full age, they are therefore denied to him.* If, therefore, any person being of full age, enter into an agreement with an infant, he is bound thereljy, despite the want of reciprocal responsibility, and it is only at the option of the infant or his ' 1 Black. Comm. 464. " Code Civil, art. 488 : " La majority est fix6e k vingt-un ans accomplis ; a cet age on est capable de tons les actes de la vie civile, sauf la restriction portee au titre du Mariage." ^ This is the case in Vermont and Ohio, 9 Vt. 42, 79 ; 2 Kent, Comm. lect. 31, p. 231. In Maryland, 6 H & J. 100. " Bac. Abr. Infancy and Age, I. 4 ; Co. Litt. 78 6, 171 & ; Oliver v. Houdlet, 13 Mass. 240; Whitney v. Dutch, 14 Mass. 463; 2 Black. Comm. 67. See Douglas v. Watson, 17 C. B. 685 (1856) ; Putnam v. Hill, 88 Vt. 85 (1865) . But a personal representative may of course avail himself of the plea. Dinsmore v. Webber, 59 Maine, 103 (1871). CHAP, n.] INFANTS. 105 representatives to avoid it.' Thus, where an adult promised a minor to marry her, it was held, that she could maintain an action against him for breach of promise, although he could not against her.^ So, also, in another case, an infant was allowed to maintain an action for money advanced on a crop of potatoes sold to him by an adult, although the adult could not have maintained an action against him.^ This rule is founded upon the theory, that the adult has entered into the contract with all the experience and knowledge requisite to counteract fraud and imposition, while the infant is presumed to be flex- ible of purpose, easily persuadable, and susceptible of influ- ences which may be greatly injurious to his rights. So, also, for the same reason, a third person, not a party to the contract, cannot take advantage of the infancy of one of the parties to avoid it, unless it be void in its inception.* § 101. The contracts of infants are divided into three classes : namely, first, those which are absolutely void ; second, those which are only voidable ; and third, those which are binding. And, in the first place, if they be positively injurious to the interests of the infant, and can only operate to his prejudice, they are absolutely void ; for in such case, the presumption is almost irresistible, that some unfair advantage has been taken of him, or some injurious influence has been exerted. The only difference in this respect between the contracts of adults and infants, is, that in the one case injury is only evidence of imposition, while in the other it is allowed as an uncontrollable presumption thereof, because of the inexperience of the infant.^ 1 Coan V. Bowles, 1 Shower, 171 ; Van Bramer ». Cooper, 2 Johns. 279 ; Hartness ». Thompson, 5 Johns. 160 ; 2 Inst. 483 ; Rose v. Daniel, 2 Const. Rep. (S. C.) 549; U. S. v. Bainbridge, 1 Mason, 71; Comyn on Cont. 153 ; Bac. Abr. Infancy and Age, I. 4. Yet as the remedy is not mutual, a court of equity will refuse to decree specific performance, at the suit of the infant. Flight v. BoUand, 4 Russ. 298; Thompson v. Hamilton, 12 Pick. 429. "^ Holt V. Ward, 2 Strange, 937. ' Warwick v. Bruce, 2 M. & S. 205. " Keane v. Boycott, 2 H. Black. 511; Bac. Abr. Infancy and Age, I. 4; Oliver v. Houdlet, 13 Mass. 237; Kendall v. Lawrence, 22 Pick. 640; Nightingale v. Withington, 15 Mass. 272 ; Worcester v. Eaton, 13 Mass. 371. ' Zouch V. Parsons, 3 Burr. 1794; Keane v. Boycott, 2 H. Black. 611 ; 106 OP THE PARTIES TO A CONTBACT. [CHAP. 11. Thus where a bond is executed by him as surety, inasmuch as it cannot be for his benefit, it would seem to be void ; ^ and where a release is made by him to his guardian, it is void.^ § 102. But, in the second place, where the contract may be beneficial to the infant, it is only voidable, and may be affirmed or avoided by him when he becomes of age.^ For, inasmuch as the privilege of infants is given by the law only as a protec- tion against the impositions of crafty and designing persons, it does not render those contracts void, which may manifestly enure to the benefit of the infant, and may be intended by the other party as an advantage to him. This class includes the greater part of those contracts which may be entered into by an infant ; for it is the policy of the law not to encumber his free action by disabilities, but only to allow him the right to suspend his ultimate decision, upon a doubtful question of benefit, until he shall be of full age and placed on a footing similar to that of the other contracting party. His own power of deciding the question of advantage is not extinguished, except in cases which are necessarily injurious to his interests ; but in respect to all questions which may be beneficial, he has the right of ratifying them as soon as he is presumed to be able so to do. The courts lean to construing the acts and contracts of infants to be only voidable, and not void.* Thus the deed Bac. Abr. Infancy and Age, I. 3 ; Whitney v. Dutch, 14 Mass. 457 ; OHver V. Houdlet, 13 Mass, 239 ; Shep. Touch. 232 ; Tucker v. Moreland, 10 Pet. 59 ; The King v. Shinfield, 14 East, 641 ; U. S. v. Bainbridge, 1 Mason, 82 ; Frid^'e v. The State, 3 Gill & Johns. 103. ' But see Hinely v. Margaritz, 3 Barr, 428 ; Fetrow v. Wiseman, 40 Ind. 148 (1872). ' Keane v. Boycott, 2 H. Black. .511; Tucker v. Moreland, 10 Pet. 59; Bingham on Infancy, 11 ; Baker v. Lovett, 6 Mass. 78 ; Fisher v. Mowbray, 8 East, 330 ; Baylis v. Dineley, 3 M. & S. 477 ; Allen v. Minor, 2 Ciil, 70 ; Colcock v. Ferguson, 3 Desaus. 4S2 ; Fridge v. The State, 3 Gill & Johns. 115; Yent v. Osgood, 19 Pick. 572. ' Zouch V. Parsons, 3 Burr. 1808; Keane v. Boycott, 2 H. Black. 511; Maddon v. White, 2 T. R. 161 ; Boston Bank v. Chamberlin, 15 Mass. 220 ; Whitney v. Dutch, 14 Mass. 462; Oliver v. Houdlet, 13 Mass. 239; Tucker V. Moreland, 10 Pet. 59 ; Bruce v. Warwick, 6 Taunt. 118 ; 2 M. & S. 205 ; Fisher v. Jewett, Berton, 25 ; Kendall v. Lawrence, 22 Pick. 644. '' Cole V. Pennoyer, 14 111. 158; Cummings v. Powell, 8 Texas, 80; Fonda v. Van Home, 15 Wend. 631, 635 ; Breckenridge's Heirs v. Ormsby, 1 J. J. Marsh. 236 ; 1 Am. Lead. Cas. 103, 104. CHAP. II.] INFANTS. 107 of an infant conveying lands, is voidable only, unless it should appear on its face to be to the prejudice of the infant, upon the ground of the solemnity of the instrument ; ^ and the same is true of a lease made by an infant, though the rent be not the best attainable .^ But a mortgage made by an infant feme covert to secure a debt of her husband is absolutely void.^ So, also, a promissory note or bill of exchange made by an infant, which was long considered to be void, is now held to be only voidable ; * and an account stated is now held to be only voidable, and may be ratified by him on his arriving at full age, and if he do so ratify it, an action of debt, as well as of assumpsit, may be maintained upon it.^ So, also, a contract of partnership by an infant,^ or a bond made by him,^ are merely voidable, and not void. § 103. An exception to this rule obtains, however, in the case of a power of attorney, executed by an infant, which is treated as utterly void,^ although upon what ground it is difficult sat- ' Boston Bank u. Chamberlin, 15 Mass. 220 ; Tucker v. Moreland, 10 Pet. 71 ; 2 Kent's Comm. lect. 31, p. 234, 235 ; Zouch v. Parsons, 3 Burr. 1804; Worcester v. Eaton, 13 Mass. 371; Kendall v. Lawrence, 22 Pick. 540; Bool u. Mix, 17 Wend. 119; Gillet v. Stanley, 1 Hill, 121. See Wiser V. Lockwood, 42 Vt. 720 (1870). ^ Slator M. Brady, 14 Irish C. L. 61 (1863) ; Slator v. Trimble, ib. 343 (1861). 3 Chandler v. McKinney, 6 Mich. 217 (1859) ; Sanford ». McLean, 3 Paige, 117 ; Cronise v. Clark, 4 Md. Ch. 403 ; Thornton w. Illingworth, 2 B. & C. 826. '' Goodsell V. Myers, 3 Wend. 479 ; Fisher «. Jewett, Berton, 25 ; Law- son V. Lovejoy, 8 Greenl. 405 ; Dubose v. Wheddon, 4 M'Cord, 221 ; Wright V. Steele, 2 N. H. 61 ; Whitney v. Dutch, 14 Mass. 462 ; Reed v. Batehelder, 1 Met. 559 ; Story on Bills of Exchange, § 84 ; Earle u. Reed, 10 Met. 389 ; Fetrow v. Wiseman, 40 Ind. 148 (1872) ; but see contra, Swasey v. Vanderheyden, 10 Johns. 83; M'Crillis ». How, B N. H. 348; M'Minn v. Richmonds, 6 Yerg. 9. « Williams M. Moor, 11 M. & W. 256. « Goode u. Harrison, 5 B. & Al. 147. ' Conroe v. Birdsall, 1 Johns. Cases, 127 ; Curtin v. Patton, 11 S. & R. 309 ; Fisher ». Mowbray, 8 East, 330 ; Bingham on Infancy (Bennett's ed.), ch. 2, § 3 ; Hinely v. Margaritz, 3 Barr, 428. ^ Bac. Abr. Infancy and Age, I. 3 ; Saunderson v. Marr, 1 H. Black. 75 ; Finch's Law, 102 ; Keane «. Boycott, 2 H. Black. 511 ; Tucker v. More- land, 10 Pet. 59 ; Eagle Fire Co. u. Lent, 6 Paige, 635 ; Pickler v. State, 18 Ind. 266 (1862) ; Trueblood v. Trueblood, 8 Ind. 195 (1866). 108 OF THE PARTIES TO A CONTRACT. [CHAP. 11. isfactorily to determine. The point, however, is settled, and an authority so delegated, even though it enure to the benefit of the infant, is a nullity, and cannot be rendered valid by a subsequent ratification. Yet a power of attorney, authorizing another to receive seisin of land for an infant, or to complete his title to an estate, conveyed to him by feoffment, is only voidable, because it is for the interest of the infant, and comes within the rule.-* § 104. An infant may not only refuse to perform his execu- tory contracts during his infancy,^ but he may disaffirm them when he comes of age, and leave the other party remediless. As when he borrows money and expends it, or purchases goods and sells them, or consumes them, or makes a promis- sory note, he cannot be compelled to pay, even though he have received all the benefit thereof ; and the plea of infancy is a perfect defence both for the infant and his representa- tive.^ § 105. So, also, where the contract is executed, he may ordi- narily disaffirm it at any time ; as whei-e he sells any article, he may reclaim it upon tendering the price he paid ; * or if he lease lands, he may receive the rent and suffer the lessee to remain, or he may rescind the contract, and treat the lessee as a trespasser.^ And if he convey by bargain and sale, he may avoid such conveyance without entry, or he may convey to another person without notice to the first purchaser.^ Again, an infant may avoid his special agreement even though it be an entire contract, when partially executed, and recover a reasonable compensation for services actually performed, in ' Bro. Abr. Faits, 31 ; 1 Roll. Abr. 730 ; Zouch v. Parsons, 3 Burr. 1808 ; 1 Wooddeson, 400. ■^ Heath v. West, 6 Foster, 193; Carr v. Clough, ib. 280; Knox v. Flack, 10 Harris, 337. ' 20 Am. Jur. 257. * Willis V. Twambly, 13 Mass. 204; Badger u. Phinney, 15 Mass. 359; Hubbard v. Cummings, 1 Greenl. 13 ; Roof o. Stafford, 7 Cow. 183 ; Carr V. Clough, 6 Foster, 280; Wheatly v. Miscal, 5 Ind. 142. Stee also Baldwin v. Van Deusen, 37 N. Y. 487 (1868). * Blunden v. Baugh, Cro. Car. 303, 806. ' Stearns on Real Actions, 186; Jackson v. Carpenter, 11 Johns. 539; Jackson v. Burohin, 14 Johns. 124. But see Roberts v. Wiggin, 1 N. H. 75. CHAP. II.] INFANTS. 109 like manner as if no such special agreement had been made.^ But if the other party suffer injury from the failure of the infant to perform his contract, this fact should be taken in reduction of the compensation. And if it should appear that his services were, under the circumstances, of no value, he could recover nothing.^ § 106. But where a contract is completely executed, and it appears that it was beneficial to the infant, and was entered into bond fide, the infant cannot rescind it, unless he can place the other party in statu quo? Thus, where money and articles and outfit were advanced to an infant to enable him to go to California and labor, the infant agreeing to give as compensa- tion therefor, one-third of all the avails of his labor, and a set- tlement was made and the money paid over, it was held that the infant could not rescind the agreement and recover the sum paid, deducting the money advanced and the value of the outfit, — the whole circumstances showing the contract to be perfectly fair and reasonable, and beneficial to the infant, and the proposed arrangements not being such as would put the other party in statu quo.* And it is often declared that an ' Moses V. Stevens, 2 Pick. 332 ; Vent v. Osgood, 19 Pick. 572 ; Jud- kins V. Walker, 17 Me. 38 ; Bishop v. Shepherd, 23 Pick. 492. But see Weeks v. Leighton, 5 N. H. 348 ; and M'Coy v. Huffman, 8 Cow. 84. But see Whitmarsh v. Hall, 3 Denio, 376. ' Thomas v. Dike, 11 Vt. 273 ; Moses v. Stevens, 2 Pick. 332. ^ If an infant advances money to his brother, with directions to use it for the support of their parents, and it is so used by him, it cannot after- wards be recovered back by the infant on arriving at full age. Welch v. Welch, 103 Mass. 562 (1870). '' Breed v. Judd, 1 Gray, 457. The court said, " But what was the con- tract? In substance and effect, it was that the defendants should furnish the outfit, and that the plaintiff should furnish his labor and time, and that of the fruits of the enterprise the plaintiff should have two-thirds and the defendants one-third. The amount of the outfit furnished does not appear, but it does appear that the contract was reasonable and beneficial to the infant. No time was prescribed for the plaintiflf to be absent. He was, in fact, absent nine months. The contract was fully executed ; the defendants received their share of the fruits of the enterprise, the plaintiff retained his. The case has been argued as if the gold-dust were the result of the plaintiff's labor alone ; whereas it was the result of the union of the labor of the plain- tiff and the capital of the defendants. The offer of the plaintiff to deduct, 110 OF THE PARTIES TO A CONTRACT. [CIIAP. II, infant must restore what lie has received, if he has it when he brings an action to recover what he has paid ; if not, he naust allow what it was worth by way of deduction from his claim.^ So, also, where a special contract has been made and executed on both sides, the infant cannot, upon coming of age, claim to receive additional compensation, if there were no fraud or overreach- ing in the bargain. Thus, where an infant of fourteen years of age entered into an agreement to work until he should arrive at full age, in consideration of being furnished with board, clothing, and education, during such time, and the terms from the sum to be recovered, the amount paid for his outfit and expenses, would not place the parties in statu quo. The defendants took the risk of the life, health, and good fortune of the plaintiff. If the enterprise had ■wholly failed, thoy would have had no claim upon the plaintiff for remunera- tion, and the capital advanced would have been wholly lost. To make the defendants whole, they must be compensated for the risk assumed, and under all the circumstances of the case the sum advanced was deemed a reasonable consideration for a third part of the proceeds of the plaintiff '3 labor. The measure of compensation is to be determined, not by the result, but by the circumstances existing when the agreement was made. It may be suggested that this construction of the agreement makes the contract of the parties one of partnership, and that by a contract of partnership an infant cannot be bound. So long as the contract remains executory, this is true. After the plaintiff had received the defendants' money for his outfit and voyage, he could not have been compelled to perform the contract and go to California. Upon his arrival there, he might have elected to rescind the contract. He might, at his own pleasure, have terminated the agree- ment. But he chose to do none of these, but to proceed and perform his agreement, and to pay over to the defendants their just proportion of the proceeds of the business. And we know of no gi^ound, upon which, after arriving at full age, he can change the entire character of a contract so made and executed, treat the money so advanced by the defendants as a simple loan, and claim for himself all the fruits of an enterprise in which their money and his labor were the common stock, and this when the contract, as originally made, is found to have been fair, reasonable, and even beneficial to the plaintiff." "If the contract set up by the defendants could, even after being fully executed, be rescinded, it seems to be conceded this could only be by putting the defendants in statu quo. If this includes, as seems to be obviously just it should, a fair compensation for the risk they neces- • sarily incurred, the result would be only to come back to the starting-point, the jury having found the agreement, under all the circumstances, a reason- able one." ' Locke V. Smith, 41 N. li. 346 ; Heath v. Stevens, 48 N. H. 251 (1869). But the authorities are not agreed on this point. CHAP. n.J INFANTS. Ill of the contract did not indicstte any fraudulent advantage taken of him, and were sanctioned by the guardian, and the contract was wholly performed on both sides, it was held that the infant could not maintain a quantum meruit for his services merely by showing that, by reason of the events which had happened, his services were worth more than the stipulated compensation.^ But it is held that an infant may avoid his assignment without tendering the consideration received.^ And the later and more carefully considered authorities declare that if a party is not bound by his contract for want of sufficient capacity to make it, as in the case of infants, persons non compotes, and the like, such party is not bound to return the consideration received, befoi'e he can sustain an action to recover back the consideration paid.^ § 107. Where the contract is executory on the part of the adult, if it be disaffirmed by the infant, he is also discharged from the performance of his part of the agreement. And if, in such a case, the infant have advanced the consideration, he may, upon disaffirmance of the contract, recover it. Thus, where an infant purchased a share in the defendant's trade, and advanced a certain sum thereupon, to be retained by the defendant as a forfeiture, in case the infant should fail to fulfil an agreement to enter into partnership with the defendant, and he did fail so to do it, it was held that the infant could recover it.* But where the contract is executory on the part of the infant, and has been executed by the adult, and the infant refuses to complete his contract, it has been said that there is no remedy by which the adult can recover the consideration paid.^ But the cases do not support this assertion in its full ' Stone V. Dennison, 13 Pick. 1. See also Breed v. Judd, 1 Gray, 455, 459. " Briggs V. McCabe, 27 Ind. 327 (1866). See Miles v. Lingerraan, 24 Ind. 385 (1865J, holding the same doctrine as to the case of a disaffirm- ance of a deed of real estate by an infant. ' See Bartlett v. Drake, 100 Mass. 176 (1868) ; Price v. Furman, 27 Vt. 268 ; Chandler v. Simmons, 97 Mass. 508 ; Gibson v. Soper, 6 Gray, 279. But see Bartlett v. Cowles, 15 Gray, 445, and cases cited. < Corpe V. Overton, 10 Bing. 252 ; 3 M. & Scott, 738. See Dinsmore V. Webber, 59 Maine, 103 (1871). » 20 Am. Jurist, 260; Shaw v. Boyd, 5 S. and R. 309, where an infant received 1500 for giving a bond to release dower, and yet recovered 112 OP THE' PARTIES TO A CONTRACT. [CHAP. II. extent. The true rule seems to be, that when articles are fur- nished to the infant, which do not come within the definition of " necessaries," and which are consumed or parted with, — or when money is lent, which is expended by the infant, — that the other party has no remedy to recover an equivalent for the goods or the money, if the specific consideration given by him have been parted with, or be incapable of return.^ But wherever the specific consideration, whatever it be, exists, and remains in the hands of the infant, at the time of his disaffirm- ance of the contract, and is capable of return, the infant is bound to give it up, and he is treated as a trustee of the other party, if the contract be made originally in good faith.^ The ground of such a distinction is, that in the first case, the goods or money cannot be returned, and to make the infant liable therefor, in damages, merely because they had been used by him, would be to deprive him of his privilege of affirming or avoiding his contract entered into bond fide, when it was impos- sible for him to return the actual consideration. But in the other case, where the actual consideration remains in the hands of the infant; andean be returned, it would be a tort in him to retain it, and his privilege is, as Lord Mansfield has said, to be used as a shield and not as a sword. The moment the infant disaffirms a contract, the parties stand upon the same footing, and the riglits to property in the subject-matter of the contract remain the same, as if no contract had been made. In the one case, then, upon disaffirmance of the con- tract, the subject-matter, as between these parties, would not be in existence, and could not be returned, and tlie damage must be borne by him who incurred the risk. But, in the other case, the subject-matter would belong to the adult as much as it ever did, and the retaining of it by the infant would dower without refunding the money. Crymes v. Day, 1 Bailey, 820 ; Jones V. Todd, 2 J. J. Marsh. 361. • Probart v. Knouth, 2 Esp. 472, note ; Earle v. Peale, 1 Salk. 386 ; Darby v. Boucher, 1 Salk. 279. = Badger v. Phinney, 15 IMass. 359. In Badger v. PLiniiey, the ground of the decision seems to have been that the defendant had been guilty of a fraud in stating he was of age, and for that reason the plaintiff might avoid the contract. Willis v. Twambly, 13 Mass. 204 ; Reeve, Dom. Rel. 245. CHAP. H.J INFANTS. 113 be tortious, and an action of replevin would therefore lie.^ The very ground upon which the infant ever held the goods, namely, the contract, being gone, he can have no legal title to them afterwards. For the same reasons, where money is paid by an adult upon an executory contract to be performed by the infant, he cannot compel the infant to perform it, although the money has been expended by the infant. § 108. Every person deals with an infant at arm's length, at his own risk, and with a party for whom the law has a jealous watchfulness. But although an adult cannot enforce an exec- utory contract, upon which he has advanced the consideration, nor recover in an action of assumpsit, where the specific and identical consideration has been parted with by the infant ; yet this rule operates in some measure reciprocally ; for if the infant have already advanced money upon a contract which is executory on the part of the adult, he cannot disaffirm it and sue the other party for the advance, if it were paid on a valua- ble consideration which has been partially enjoyed, and espe- cially if he had received the benefit of liis contract.^ As, where an infant advanced money on a lease, and subsequently, on coming of age, disaffirmed it and sued the lessor for the sum advanced ; it was held, that he could not recover.^ Where the contract is executed on both sides, an infant, when he comes of age, cannot disaffirm it, without returning the consideration,* unless he has disposed of it during infancy ;° for although, if the consideration on the part of the infant had not been paid, it could not be recovered, because he is an irresponsible ' Badger v. Phinney, 15 Mass. 359 ; Shannon v. Shannon, 1 Sch. & Lef. 324 ; Ilsley v. Stubbs, 5 Mass. 284. = 20 Am. Jur. 260; 2 Kent's Comm. lect. 31, p. 240; Earl of Bucking- hamshire V. Drury, 2 Eden, 72 : Wilmot, 226, note ; M'Coy v. Huffman, 8 Cow. 84; Roof v. Stafford, 7 Cow. 184; Weeks v. Leighton, 5 N. H. 343 ; Holmes v. Blogg, 8 Taunt. 35, 508 ; Wilson v. Kearse, Peake, Ad. Cas. 196 ; Kirton v. Eliott, 2 Bulst. 69 ; Corpe v. Overton, 10 Bing. 252. ' Holmes V. Blogg, 8 Taunt. 35, 508 ; 1 Moore, 466 ; 2 Moore, 5.52. See, however, Moses v. Stevens, 2 Pick. 332. ' Breed v. Judd, 1 Gray, 458; Bailey v. Bamberger, 11 B. Mon. 113; Cummings v. Powell, 8 Texas, 80 ; Bartholomew v. Finnemore, 17 Barb. 428; ante, § 61 a. * Price V. Furman, 27 Vt. 268 (1855), and cases cited. 114 OF THE PARTIES TO A CONTRACT. [CHAP. II. person, yet it is but just and equitable, that if he has only paid for what he lias enjoyed, he should not be entitled to reclaim his money without refunding the consideration of it. In such a case, if he could, it would clearly operate as a direct fraud.i The law does not render an infant responsible for his promises to do ; but it does make him liable for his acts already done, when he has received the equivalent therefor, and cannot return it. But elsewhere it is held that an infant may avoid his contract and recover back the consideration advanced.^ So he may recover for labor performed under a contract he refuses to perform.^ § 109. The privileges, with which the law invests the infant, are merely additional to the rights which he enjoys in common with adults. If he have paid money on a consideration which has failed, he may reclaim it, and he may always have a remedy against fraud.^ § 110. Infancy cannot, however, be pleaded as a defence to actions which are founded in tort, but only to actions which are founded in contract. Thus, an infant is liable in trover for a tortious conversion of goods intrusted to his care.^ So, also, where goods were delivered to an infant who was master of a ship, under a contract that he should carry them to a particu- lar place, and they were wrongfully shipped by him to a different port, he was held liable in trover for the conversion.^ So, also, he is personally answerable for slander, or assault, or trespass ; ' 2 Kent's Comra. lect. 31, p. 240 ; Earl of Buckinghamshire v. Drury, 2 Eden, 72. 2 Riley V. Mallory, 33 Conn. 201 (1866), calling the language of Lord Mansfield, in Holmes v. Blogg, a " senseless dictum.'' And see Miles v. Lingerman, 24 Ind. 385 ; Briggs v. McCabe, 27 Ind. 330 (1866). See also Heath V. Stevens, 48 N. H. 251 (1869), denying Holmes v. Blogg, 8' Taunt. 608. ' Lufkin V. Mayall, 25 N. H. 83 ; Locke v. Smith, 41 N. H. 846. And see Hill V. Anderson, 6 S. & M. 216. ■* Bruce v. Warwick, 6 Taunt, 120; Corpe v. Overton, 10 Bing. 252. » Homer v. Thwing, 3 Pick. 492 ; Bristow v. Eastman, 1 Esp. 172 ; Mills V. Graham, 1 Bos. & Pul. N. R. 140; Peigne v. Sutcliffe, 4 M'Cord, 387; Green v. Sperry, 16 Vt. 390; Brown v. Maxwell, 6 Hill, 592; School Dist. c. Bragdon, 3 Foster, 511 ; Towne v. Wiley, 23 Vt. 865 ; Baxter v. Bush, 29 Vt. 465 (1857). * Vasse V. Smith, 6 Cranch, 226. See Towne v. Wiley, 23 Vt. 355. CHAP. II.] INFANTS. 115 for his privilege is no protection against his direct misdeeds and oifences.i An infant is liable in tort for the negligent use of a horse hired for a ride, whether it be necessary or not.'' But wliere an action against an infant is founded solely in contract, it cannot be converted into a tort by the plaintiff, so as to charge the infant ex delicto, for, otherwise, the protection which the law affords to him might be frustrated by the mere form of action.^ Thus, where the plaintiff delivered a mare to the defendant, who was an infant, to be moderately ridden by him, and the mare having been injured wliile in his hands, an action was brought charging him ex delicto; it was held, that the defendant might plead his infancy in bar, inasmuch as the matter was founded purely in contract, and the injury could only be a subject for damages.* For the same reason he would not be liable in delicto on a false and fraudulent warranty.^ Although the action, however, be brought in assumpsit, if it be really founded in tort, so that an action ex delicto might be brought against the infant, the mere form of the action will not afford a right to him to set up his infancy as a defence.^ Thus, where an action of assumpsit for money had and received was brought against an infant, to recover money which he had fraudulently embezzled, it was held, that the defendant could not plead his infancy in bar, because the action was, in sub- stance, an action ex delicto, for which an action of trover might have been substituted.'^ So an infant is liable for the proceeds of property stolen by him and sold.^ But he is not liable for ' Jennings u. Rundall, 8 T. R. 337; Vasse v. Smith, 6 Cranch, 226; 2 Kent's Comm. lect. 31, p. 240, 241. = Burnard v. Haggis, 14 C. B. (n. s.) 45 (1863). ' And a promissory note to compromise a tort would be no more binding than any other. Hanks v. Deal, 3 M'Cord, 257. * West «. Moore, 14 Vt. 447 ; Morrill v. Aden, 19 ib. 505 ; Gilson ». Spear, 38 ib. 311 (1865). * Jennings v. Rundall, 8 T. R. 337; Preseott ». Norris, 32 N. H. 101; Green u. Greenbank, 2 Marsh. 485. « Vasse V. Smith, 6 Cranch, 226 ; Bristow v. Eastman, 1 Esp. 172 ; Burnard v. Haggis, 14 C. B. (n. s.) 45 (1863). See Harrisons. Fane, 1 Scott, N. R. 287 ; 1 M. & G. 550. ' Bristow V. Eastman, 1 Esp. 172 ; Peake, 223. 8 Shaw V. Coffin, 58 Me. 254 (1870); Elwell ». Martin, 32 Vt. 217; Howe V. Clancey, 53 Me. 130. 116 OP THE PARTIES TO A CONTRACT. [CHAP. II. malicious prosecution of a suit brought in his name by his next friend, without his knowledge, although he afterwards assents to it before he comes of age ;^ but he would be, it seems, if he carries on such suit after arriving at full age.^ § 111. If the infant have been guilty of positive fraud, and thereby imposed upon the other party to his injury, he cannot set up his infancy as a defence to an action for the considera- tion, although the matter be in contract ; for by his fraud he has put himself without the pale of his privilege, and is respon- sible to the same extent, as if he were an adult. Fraud ren- ders a contract void ab initio, and not voidable ; and therefore, if the infant by fraudulent representations deceive the other party, and thereby induce him to part with his goods, such an agreement will be utterly void, and the infant will be liable in an action of trover for conversion. He cannot thereby take advantage of his own wrong. Thus, if a party falsely repre- sent himself to be of age, and goods be sold to him upon faith of such a representation, for which he refuses to pay on the score of infancy, the vendor may rescind the contract and retake the goods. But though there has been some conflict on the point, it is now settled that an infant, by representing himself to be of age, or a married woman, by representing her- self to be sole, cannot be made liable on contracts thus made, even if an action in tort for the deceit can be maintained.^ ' Burnham v. Seaverns, 101 Mass. 860 (1869). ' Sterling v. Adams, 3 Day, 411. ' Liverpool Association v. Fairhurst, 9 Ex. 422 ; Johnson v. Pye, 1 Sid. 2.>S ; s. c. 1 Keb. 913 ; Wright v. Leonard, 11 C. B. (n. 8.) 258 ; Bartlett V. Wells, 1 Best & S. 836; Cannam v. Farmer, 3 Ex. 698; Brown «. McCune, 5 Sandf. 225 ; Prescott v. Norris, 32 N. H. 101 ; Morriam v. Cunninj;ham, 11 Gush. 40; Burley v. Russell, 10 N. H. 184. The cases to the rontniry are Cox v. Kitchin, 1 Bos. & P. ?>.]S ; Word v. Vance, 1 Nott & M. 197 ; and Kilgore v. Jordan, 17 Tex. 341. See also Fitts v. Hall, 9 IM. H. 441, explained in Burley v. Russell, supra; Keen v. Coleman, 89 Penn. St. 209 ; Wallace v. Morse, 5 Hill, 391 ; Towne v. Wiley, 23 Vt. 361 ; Badger v. Phinney, 15 Mass. 369. The ground upon which the defence of infancy or coverture in such cases is allowed, is that otherwise such persons would lose the protection which the law seeks to afford them during their disability. In Merriam v. Cunningham, supra, Mr. Justice Bigelow said : CHAP. II.J INFANTS. 117 §112. We next come to the consideration of the subject of Ratification by an Infant. A void contract is incapable of rat- ification ; for no promise can ever revive that which never had any existence. But a contract, which is merely voidable, may be ratified when the infant attains the age of legal maturity, without any new consideration. ^ § 113. No binding ratification of a contract can be made by the infant, until he comes of age, except perhaps in the case of a suit by a minor against an adult, on a contract not exe- cuted by the minor, which has been allowed as an exception, " The plaintiff seeks to avoid the defendant's plea of infancy in the present case by proof that the defendant fraudulently represented himself to be of full age, and thereby obtained credit for the keep of the horses, to recover the price of which this action of assumpsit is brought. But it appears to us that no such answer to a plea of infancy can be allowed without overturning the well-established rules of law applicable to the contracts of minors. The plaintiff seeks to recover upon a contract which, upon plea and proof, is legally avoided. The fraud of the defendant, if ever so clearly shown, does not restore validity to his promise, or in any way enhance its obligation ; it is the contract which forms the sole right of the plaintiff to recover in this suit, and no liability upon it, as such, can be maintained against the defend- ant, who has established its legal invalidity. If the position assumed by the plaintiff is sound, then the result would be that a plaintiff in an action of assumpsit on a contract which the law holds void, would recover damages for an injury caused by the fraudulent misrepresentations of the defendant. It is manifest that no such confusion of rights and remedies can exist in the law. Besides, in an action of assumpsit the measure of damages is the amount which the defendant promised to pay by his contract ; but for fraudu- lent representations the plaintiff could recover only the damages actually sustained, which might, and often would be, much less than the amount due on the contract, for the very reason that the infant may have been over- reached, and promised to pay more than an equivalent for that which he received by the contract. The doctrine contended for by the plaintiff would effectually deprive infants of that protection which the law sedulously seeks to afford them in their dealings.'' What the rule in equity may be does not appear to have been fully decided. In Nelson v. Stocker, 5 Jur. (n. s.) 262 (18.59), Stuart, V. C, refused to allow the defendant to set up the plea of infancy, but the case was one of acquiescence after majority as well as mis- representation of age. The Vice-Chancellor does, however, say : " There- fore, on the ground of misrepresentation, if it stood upon no other ground, there would be enough to found an equity in favor of the plaintiffs." See also Bartlett v. Wells, 1 B. & S. 836 (1862) ; De Roo v. Foster, 12 C. B. (n. s.) 272 (1862) ; Bigelow on Estoppel, 485-493, and cases cited. ' Grant v. Beard, 50 N. H. 129 (1870). 118 OP THE PARTIES TO A CONTRACT. [CHAP. II. — upon the ground, that otherwise there could be no consid- eration to support the contract.^ § 114. There is a distinction between those acts and words ■which are necessary to ratify an executory contract, and those which are sufficient to ratify an executed contract. In the lat- ter class of cases, any explicit acknowledgment of liability will operate as a ratification. But, in order to ratify an executory agreement made during infancy, there must be not only an acknowledgment of primary liability, but an express promise, voluntarily and delibeiately made by the infant upon his arriving at the age of maturity .^ No act or word, there- fore, which does not unequivocally imply a new and primary promise by the infant himself, will be sufficient to create a liability on his executory contract.^ Thus, where a debt, ^ Nfwlaiid on Cont. 14, sed qucere; Zoueb v. Parsons, 3 Burr. 1808; Forrester's Case, 1 Sid. 41 ; Reeve, Dom. Rel. 249, 254. See Minock v. Shortridge, 21 Mich. 304. ' See Proctor v. Sears, 4 Allen, 95 (1S62) ; Irvine v. Irvine, 9 Wall. 617; Thompson v. Lay, 4 Pick. 49; Hubbard v. Cummings, 1 Greenl. 11 ; Thrupp V. Fielder, 2 Esp. 628; 2 Kent's Coram. 2:j7, and notes; Whitney V. Dutch, 14 Mass. 460; Dilk v. Keighley, 2 Esp. 481; Jackson v. Carpen- ter, U Johns. 539; Deason v. Boyd, 1 Dana, 45; Harmer u. Killing, 5 Esp. 102 ; Tucker v. Moreland, 10 Pet. 73 ; Smith v. Mayo, 9 Mass. 62 ; Ford V. Phillips, 1 Pick. 202. 8 M.awson v. Blane, 10 Exch. 20G ; 26 Enfj. Law & Eq. 560. Parke, B., in this very late case observed : " Now to take the case out of the statute, there must be either a promise by the defendant in writing after he came of full age, or a ratification of the prior contract. The term ' ratification' has already had an interpretation given to it in Harris v. Wall ; and there it was held that a ratification means such a ratification as would make a person liable as principal for an act done by a third person in his name. I take the meaning of ' ratification ' to be different from a promise. It is an admission that he is liable, and bound to pay that debt on a contract which he made when an infant ; therefore, in order to bring the case within Lord Tenterden's Act, there must be an admission in writing, that he was liable to pay on that contract which he made when he was a minor ; that is, he was liable to pay, and bound to pay his acceptance, — bound to pay in prcesenti the acceptance when due. Kow, so understanding the meaning of the term ' ratify,' I was of opinion, at the trial, and I still continue to be of the same opinion, that this letter does not amount to a sufficient acknowledgment of his liability as acceptor of the bill; it is only an assurance. A man might consider himself in honor bound to pay the bill, and it is an assurance that CHAP. II.] INFANTS, 119 contracted during infancy, was partially paid by the infant after he came of age, it was held not to be a sufficient ratification, although it was an explicit acknowledgment of indebtment.i Indeed, any mere admission of liabiHty is not a sufficient confirmation to sijstain an action upon an in- fant's executory contract; for. although it rebuts the pre- sumption of payment created by the statute of limitations, it affords no ground for an action, because the infant may legally refuse to pay a debt, which he acknowledges to be due,^ Thus where a defendant, after he became of age, said " he owed the plaintiff, but was unable to pay him, but that he would endeavor to get his brother bound with him," it was held to be no ratification of his contract made during infancy.^ But any direct confirmation and recognition of his promise, although it do not amount to a promise in so many words, will be sufficient to bind the party ; as if he should say, " I do ratify and confirm," or do " agree to pay the debt," or " I have not the money now, but when I return from my voyage I will the bill would be paid, not a recognition of being bound to pay by virtue of that bill. The terms of the letter are: ' Your brother tells me ' — I will repeat this again — 'Your brother tells me you are very uneasy about the £500 bill ; pray, make yourself easy about it, as I will take care that it is paid.' Not, ' Make yourself easy about it ; you are sure it will be paid, because I am liable as acceptor ; ' but, ' I will take care that it is paid,' that is, he means to give an assurance that some party will pay it. It is clear who he means to be the party to pay it, certainly the drawer of the bill, and that the means of payment are to come from Sir Henry Pottinger ; and he assures the plaintiff that it will be paid, and that Sir Henry Pottinger will come to England in June ; he points to him as the source from which pay- ment is to be derived. My opinion was at the trial, and still is, that this is reallj' not any admission that he is liable as principal in virtue of that bill of exchange, that is, as principal, liable to pay the debt. It amounts to nothing more nor less than an assurance, that the plaintiff may be calmed in his feelings on the assurance that this bill will be sure to be paid, and points to the arrival of Sir Henry Pottinger in England, in June. I think the rule ought to be, therefore, discharged." See also Rowe v. Hopwood, Law R. 4Q. B. 1 (1868). ' Thrupp V. Fielder, 2 Esp. 628. ^ Lara v. Bird, cited in Peake on Evid. (2d ed.) 260 ; Whitney v. Dutch, 14 Mass. 460; Jackson v. Mayo, 11 Mass. 147; Martin v. Mayo, 10 Mass. 137; Peirce v. Tobey, 5 Met. 168; Ordinary!). Wherry, 1 Bailey, 28; Wilcox V. Roath, 12 Conn. 550; Proctor v. Sears, 4 Allen, 95 (1862). " Ford V. Phillips, 1 Pick. 202 ; Hale v. Gerrish, 8 N. H. 374. 120 OP THE PARTIES TO A CONTRACT. [CHAP. II. settle." 1 So, where an infant wrote after coming of age, — " I am sorry to give you so much trouble, but will, without neglect, remit to you in a short time," it was held to be a sufficient ratification of his contract.^ A fortiori, if an infant, who has accepted a bill of exchange, or made a promissory note during his infancy, sign, after his attaining his majority, a written order or authority to his banker or agent, directing a payment thereof, this is a ratification which renders him liable in a suit brought on the uote.^ But where an infant, having been sup- plied with goods, on arriving at majority, wrote at the end of the account sent him by the seller, " Particulars of account to the end of 1867, amounting to £162 lis. 6d., I certify to be correct and satisfactory," this was held not to constitute a ratification, within the statute.* Continuance, for a month after majority, in an employment for an entire term, is a ratification of the contract ; and if the party then abandon the contract before his term of service expire, without cause, he cannot recover for the work performed during his infancy.^ § 115. The promise must, however, be made voluntarily and freely, and, it has been thought, with a knowledge on the part of the infant that he is not legally liable upon his contract.^ If, therefore, his promise be obtained by fraud, or duress, or fear, or, possibly, made in ignorance of his legal rights, it is void.' So, also, the promise must be made to the party in interest, or his agent, and only creates a liability coextensive ' Thompson v. Lay, 4 Pick. 48 ; Whitney v. Dutch, 14 JIasa. 460 ; Bar- naby v. Barnaby, 1 Pick. 221 ; Harris v. Wall, 1 Exeh. 128. - Hartley v. Wb.arton, 11 Ad. & El. 934. ^ Huntu. Massey, 5 B. & Ad. 902; 3 Nev. & Blan. 109. ^ Kowe V. Hopwood, Law R. 4 Q. B. 1 (1868). See Harris ». Wall, 1 Exoh. 122 ; Mawson v. Blane, 10 Exch. 206. " Forsyth v. Hastings, 27 Vt. 640 (1855). ^ Hussey v. Jewett, 9 Mass. 100 ; Ford v. Phillips, 1 Pick. 203 ; Harmer V. Killing, 6 Esp. 102; Smith v. Mayo, 9 Mass. 64; Robbins v. Otis, 1 Pick. 368 ; Millard v. Hewlett, 19 Wend. 301 ; Hinely o. M irgaritz, 3 Barr, 42«. But it may well be doubted whether the promise must have been made with knowledge of non-liability. See Morse v. Wljeeler, 4 Allen, 570, hold- ing the contrary on a review of the cases. ' Brooke v. Gaily, 2 Atk. 34; Harmer i;. Killing, 5 Esp. 102. See Big- elow V. Grannis, 2 Hill, 120. CHAP. II.J INFANTS. 121 ■with its terms.^ And the promise must be that the infant himself will pay, and not that some other person will.^ An exception to the rule which requires a promise in order to ratify an executory contract is introduced in favor of an agree- ment by an infant to man-y, in whioh circumstances and con- duct, intimating a continuing intention to marry after arriving at legal maturity, are sufficient to raise a new promise.^ § 116. A ratification may be either absolute or conditional. If it be the latter, the terms of the condition must have hap- pened or been complied with before an action can be sus- tained.* Thus, on a promise to pay a debt, when " he is able," the ability of the party must be proved in order to charge him.^ Or if he promise to pay a note upon the happening of a cer- tain event, such event must be proved to have happened, or the party is not liable. Or if a party promise to pay a certain part of a debt, he is only bound to the extent of the new promise.^ § 117. But if the contract be executed, any slight acknowl- edgment of liability or admission of the contract is a sufficient ratification ; for it is the sound policy of the law to suffer con- tracts, already completed, to remain undisturbed, whenever they are not founded on fraud or duress, while it shrinks from enforcing the performance of future acts upon executory con- tracts made during infancy. When any acknowledgment of liability is made, or can be implied with certainty from the acts or words of the parties, the law considers this a sufficient ratification of that which is completed. Thus, if an infant mortgage his land, and after he comes of age, convey the same land, subject to the mortgage, he thereby confirms the mort- 1 Goodsell V. Myers, 3 Wend. 479 ; Hoit v. Underbill, 10 N. H. 436. * Mawson v. Blane. 10 Exch. :.06 ; 26 Eng. Law & Eq. 560, supra. ' 2 Stark. Evid. 941; Hutton «. Mansell, 3 Salk. 16, 64; 6 Mod. 172; Wightman v. Coates, 16 Mass. 1 ; Bobo v. Hansell, 2 Bailey, 114. * Thompson v. Lay, 4 Pick. 49 ; Martin v. Mayo, 10 Mass. (Rand's ed.) 141, note ; Robbiris v. Otis, 1 Pick. 370 ; Everson v. Carpenter, 17 Wend, 419. 5 Thompson v. Lay, 4 Pick. 49 ; Proctor v. Sears, 4 Allen, 95 (1862). " Green v. Parker, cited 1 Esp. N. P. 164 ; Peake's Evid. 260 (2d ed.) ; Bobo v. Hansell, 2 Bailey, 114. See Martin v. Mayo, 10 Mass. (Rand's ed.) 141, and note. 122 OF THE PARTIES TO A CONTRACT. [CHAP. 11. gage.i So, if, after attaining majority, he redeliver a deed made during infancy.^ In many cases, mere acquiescence or silence affords a conclusive presumption of ratification, where it is susceptible of such an interpretation.^ Thus, where a contract is voidable, and the benefit is a continuing one, the infant will be bound by it, unless he expressly dis- affirm it upon coming of age.* So, if, after coming of age, he accept rent upon a lease made during his infancy, it is a ratification of the lease, and he cannot avoid it.^ So, if he make a lease for a term extending beyond the time of his in- fancy, and after coming of age he make no objection, and do no act contradicting such a presumption, his acquiescence will be treated as a ratification ; ^ since he is receiving a continu- ing benefit from the continuance of the lease, and thereby acquiring a claim for rent against the lessee, and it is this cir- cumstance, rather than silence, which amounts to a ratification. So, if, after coming of age, he retain, without objection, prem- ises leased to him, he will be understood to affirm the lease." So, if he retain possession of land conveyed to him during his minority,^ or convey it to a third person, or continue to act, as if the land were his own property, it will be a ratification of • Boston Bank v. Cliamberlin, 15 Mass. 220 ; Deason t>. Boyd, 1 Dana, 45. See Middleton v. Hoge, 5 Bush, 478. = Davidson v. Young, 38 111. 145 (1865). ^ Brown v. Caldwell, 10 S. & R. 114; Holmes v. Blogg, 8 Taunt. 35; 1 Moore, 466 ; Goods v. Harrison, 5 B. & Al. 147 ; Lawson v. Lovejoy, 8 Greenl. 405. See Davidson v. Young, .38 111. 145 (1865). " Richardson u. Boright, 9 Vt. 868. See Irvine v. Irvine, 9 AVall. 626. But see Carrell v. Potter, 23 Mich. 377 (1871), where it was held that the retention of the consideration for five months, during most of which time the infant was absent from the State, was not alone enough to raise an infer- ence of ratification. ' Ashfield V. Ashficld, W. Jones, 167, affirmed in the Exchequer Chamber by all the judges ; Latch, 199 ; Godb. 364 ; Story v. Johnson, 2 Younge & Coll. 586 ; Barnaby v. Barnaby, 1 Pick. 224. ' Smith V. Low, 1 Atk. 489 ; Van Dorens v. Everitt, 2 Southard, 460. ' Kctsey's Case, Cro. Jac. 320; Kirton v. Eliott, 2 Bulst. 69; 1 Roll. Abr. Enfants (K), 731; Evelyn v. Chichester, 3 Burr. 1719; Baylis v. Dineley, 2 M. & S. 681 ; Holmes v. Blogg, 8 Taunt. 35, 37. 8 Cheshire v. Barrett, 4 M'Cord, 241 ; Dana v. Coombs, 6 Greenl. 89 ; Lynde v. Budd, 2 Paige, 191 ; Hubbard v. Cummings, 1 Greenl. 11 ; 20 Am. Jur. 273, and cases cited. CHAP. II.] INFANTS. 123 the conveyance.'^ And even a repudiation of the tenancy after arriving at majority will be of no avail, if the tenancy be not avoided before the rent falls due.^ And this, too, though the infant be assignee of a lease.^ But if an infant buys land and gives his note for it, and subsequently, but before his majority, sells the land, and retains the proceeds after he is of age, this is not a ratification of his note given on the original purchase.* And it is held that the mere receipt of rents from improvements made upon a defendant's land during his infancy, does not constitute a ratification of the contract under which they were made, so as to operate as a lien upon his property by virtue of a mechanics' lien law.^ However, if during his infancy he profess to be a partner in a particular firm, it has been held that he will be liable on contracts made by the firm after he has arrived at maturity, unless he expressly deny and disaffirm the partnership at that time,^ although he ceased to be a partner before attaining his majority. So, also, where an infant has made purchases, if, after coming of age, he treat the property purchased as his own, when it is in a condition to be restored, and is of value, ' Hubbard v. Cummings, 1 Greenl. 11 ; Henry v. Root, 83 N. Y. 526 (1865), containing an elaborate examination of the cases on this point. ^^ Blake v. Concannon, Irish R. 4 C. L. 323 (1870). This case, tried before Pigot, C. B., decides that a person cannot repudiate a liability for rent which actually became due during his infancy. The facts were that cer- tain lands were let to the defendant, an infant, in May, 1866, on rent payable in November and May. He possessed and enjoyed the lands until the 20th of April, 1867, when, being still an infant, he left the possession, and on attaining his majority, which occurred shortly afterwards, he repudiated the contract of tenancy, and the tenancy under it. But it was held that he could not escape payment of the rent due in November, 1866 ; though it was other- wise as to the rent due the following May. = Mahon v. O'Farrell, 10 Irish Law, 527 ; Kelly v. Coote, 6 Irish Com. Law, 469 (1856). * Walsh V. Powers, 43 N. Y. 23 (1870). See Weed v. Beebe, 21 Vt. 495. = MoCarty v. Carter, 49 111.^ 53 (1868). « Goode V. Harrison, 5 B. &'a1. 147 ; Miller v. Sims, 2 Hill (S. C), 479. See, on the other hand, Dana v. Stearns, 3 Cush. 372. The mercantile contracts of a minor, as partner in a firm, are voidable, not void ; but the ratification should clearly appear. Minock v. Shortridge, 21 Mich. 304 (1870) ; Kennedy v. Doyle, 10 Allen, 161 (1865). 124 OF THE PARTIES TO A CONTRACT. [CHAP. II. — either by merely retaining it witliout notice to the seller of his readiness to restore it, and, a fortiori, by selling or other- wise disposing of it, or declining to return it after demand by the seller, a ratification will be implied. ^ Indeed, wherever he continues, after coming of full age, to occupy a position which is only explicable upon the supposition that he intends to stand by his contract, it will be considered as a ratification of an executed contract. He is, however, allowed a reasonable time after he comes of age, — locus j^anitcnticE, — during which he may disaffirm his contract, and during which a mere acqui- escence, without any unequivocal acts establishing a clear intention to confirm his contract, will not operate as a con- firmation.^ § 118. The late English cases seem to assert the doctrine that the infant is bound expressly to disaffirm his contract within a reasonable time after coming of age, and that if he neglect to do so, his silence will operate as an affirmance of his contract.^ The same doctrine is also asserted in several cases in this country,* but the better opinion would seem to be that mere silence, for a reasonable time, would only operate as a ratification of a contract, where, from the circumstances of the case, it raises an implied promise to abide by it ; as where it was the duty of the infant to disaffirm, or where he exercises rights of ownership of articles sold to him, inconsistent with any other view than that he intends to keep them and pay for them, — or where he resells them ; ^ or, as elsewhere ex- ' Boyden v. Boyden, 9 Met. 519 ; Boody v. MoKenney, 23 Me. 517 ; Aldrich v. Grimes, 10 N. H. 194. ' Tuclcer V. Morelaiid, 10 Pet. 75, 76 ; Jackson v. Carpenter, 11 Johns. 542 ; Holmes v. Blo-t;, 2 Moore, .552 ; 8 Taunt. 35. •" Dublin & Wicklow Railway Co. v. Black, 8 E.xcb. 181 ; 16 Eng. Law & Eq. 56(1-558 ; North-Western Ruilway Co. v. M'Michael, 5 Exch. 114-121 ; Leeds & Thirsk Railway Co. v. Fearnley, 4 Exch. 26; Cork & Bandon Railway Co. v. Cazenove, 10 Q. B. 935 ; The Jlidland Great Western Rail- way Co. V. Quinn, 1 Ir. Com. Law, 383. As to what constitutes a repudia- tion, see Baker's Case ; In re the Contract Corporation, 25 Law Times (N. s.), 726 (Dec. 8, 1871) ; Law R. 7 Ch. 115; Ebbett's Case, Law R. 6 Ch. 302. ■* Holmes v. Blogg, 8 Taunt. 39, by Dallas, J. ; Richardson v. Boright, 9 Vt. 368 i Kline v. Beebe, 6 Conn. 506 ; Scott v. Buchanan, 11 Humph. 474. ^ In an admirable note to Dublin & Wicklow Railway Co. v. Black, 16 CHAP. II.] INFANTS. 125 pressed, mere inaction is not a ratification unless the infant remains in possession after coming of age, of sometliing valu- Eng. Law & Eq. 558, the editor (Mr. Bennett) says, " It may be doubted whether the current of authorities in America, at the present time, will war- rant the abstract position, that a bare neglect to disaffirm, is itself a, ratifica- tion, unless accompanied with some positive acts indicative of an intention to abide by the contract. Silence for an unreasonable time, taken in con- nection with other facts, such as using the propert;^ purchased, retaining" possession of it, selling or mortgaging it, or in any way converting it to the infant purchaser's own use, would undoubtedly be a sufficient ratification. The American decisions are numerous and clear upon this point. Thus, in Lawson v. Lovejoy, 8 Greenl. (Bennett's ed.) 405, a. minor bought a yoke of oxen for which he gave his note ; after arriving at full age he ' converted the oxen to his own use, and received the avails.' This was held a binding ratification, and the infant was adjudged liable on his note. " So in Boyden v. Boyden, 9 Met. 519 (1845), a minor having given his note for a horse and plough, kept the horse a year after attaining full age, and then sold him. The plough he kept and used two or three years, with- out giving any notice of a desire to disaffirm the contract. The jury were told this operated as a ratification. "In like manner in Cheshire v. Barrett, 4 M'Cord, 241 (1827), an infant having given his note for a horse, which he sold after arriving at full age, was held thereby to have ratified the contract. Deason v. Boyd, 1 Dana, 45 (1833), is precisely similar. See also Alexander v. Heriot, Bailey, Eq. 223. Boody v. McKenney, 23 Me. 517 (1844), is one of the most recent cases to the same point. The case of Delano v. Blake, 11 Wend. 85 (1833) , is one of the strongest American cases, in support of the position that the infant must positively disaffirm, within a reasonable time, or he will be bound. There an infant received the note of a third person, not the debtor, in payment for work and labor. This note he kept for eight months, after the arrival at maturity, when the maker becoming insolvent, the infant tendered the note to the original debtor, and sued him on account for his services. It was held that simply retaining the note so long a time was, under all the circumstances, a ratification. See also Thomasson v. Boyd, 13 Ala. 419 (1848). " In Aldrich v. Grimes an infant purchased property, with a privilege of return, if it did not answer. After he became of age, the vendor requested him to return it, if he did not intend to keep it. The infant said ' he could not return it then, and did not know as he should ; he did not know but he should keep it.' He did keep and use it for two or or three months, when he offered to return it, but the adult declined to receive it, and sued him for the price. The infant was held liable on his note for the price. " All these cases proceed upon the ground of intention. There must exist an intention to abide by the contract; and a close examination of those cases where the infant has been held not to have ratified the purchase, will 126 OP THE PARTIES TO A COXTRx\CT. [CHAP. 11. able, the retention of which indicates a design to appropriate it to liis own use.^ show that a mere neglect to give notice that he repudiates the contract, has not been considered per se, a ratification. Thus, in Smith v. Kelley, 13 Blet. 309, an infant bought goods, and three days before he came of age the sellers attached them on a writ against him for their price. The officer took the goods into his own custody, and held them under the attachment until the time of trial. The infant, however, never gave any notice of bis intention to repudiate the contract, but it was held that there was not here sufficient evidence of a ratification, the defendant not having the actual possession and custody of the goods, he was not bound to disaffirm the purchase. " So in Thing v. Libbey, 16 Me. 65 (1839), an infant having purchased property assigned it during his minority bond fide to secure a debt due a third person. The infant remained in possession of the goods some time after he became of age, but as agent for the assignee. He never gave any notice of an intention to disaffirm the contract, but being sued for the goods, was held not to have ratified the purchase. " The case of Dana v. Stearns, 3 Cush. 372 (1849), bears also upon this point. There, B., a minor, and S., a person of full age, entered into a partnership, to the capital stock of which B. contributed about $900, and which was dissolved by mutual consent, before B. came of age. On the dissolution, it was ascertained that the firm had made about .$300, and B. sold and conveyed to S. all his interest in the partnership property, for which he received the note of S. for -91100, secured by a mortgage of per- sonal property, and S. at the same time cave B. an obligation to pay the debts of the firm. After coming of age, B. proved his note against the estate of S., who had taken the benefit of the insolvent law, and also insti- tuted proceedings with a view to enforce his claim under the mortgage. It was held, that by these proceedings B. had not ratified the partnership, and had not made himself liable for the partnership debts. " The true rule on tin's subject seems to have been laid down in Hale u. Gerrish, 8 N. H. 374 (1836), that the acts relied upon to constitute a ratifi- cation, must be of a character to constitute as perfect evidence of a ratifica- tion as would an express and unequivocal promise to pay. In that case, the infant not only did not disaffirm after arriving at full age, but when called upon to pay, said he owed the debt, and that the plaintiff would get his pay, but refused to give his note, as he would be liable to be arrested. This was considered no ratification. " So, in Ford i\ Phillips, 1 Pick. 202 (1822), the infant not only did not give any notice of a disaffirmance, but said, after his majority, that he owed the plaintiff, and would try to get his brother to be bound for it. The con- tract was held not to be ratified. Goodsell u. Myers, 3 Wend. 479 (1830), ' N. H. M. P. Ins. Co. v. Noyes, 32 N. H. 345. CHAP. 11.] INFANTS. 127 § 119. A ratification lias a double effect ; it both affirms the original contract, and creates a new one ; so that the party to whom the infant is liable may sue upon either.^ But where an action is brought upon the contract of an infant, a ratification or promise, made subsequent to the commencement of the suit, though after his coming of age, will not sustain it.'^ § 120. We shall now consider those contracts which are bind- ing upon the infant, ah initio, and need no ratification. First. Where an infant is authorized, by statute, to make a contract for the public service, as to enlist in the army or navy, with the consent of his parent or guardian, such contract is deemed to be for his benefit, and is neither void nor voidable.^ is to the same effect. There an infant purchased a horse during minority, and gave his note. A year after he became of age he said to a third per- son, he owed the debt and was going to pay it. He never gave any notice of an intention to disaffirm. Held, he was not bound. Thompson v. Lay, 4 Pick. 48 (1826) , is clear to the point of the necessity of an express rati- fication. Hoit u. Underhill, 9 N. H. 436 ; Wilcox v. Roath, 12 Conn. 550 ; Smith V. Mayo, 9 Mass. 62, and many other authorities to the same effect exist. Benham u. Bishop, 9 Conn. 330 (1882), bears strongly upon this point. There, an infant purchased real estate during infancy, for which he gave his note. He remained in possession some time after he became of age, and then submitted the question to arbitration, whether he was bound to pay the note. Neither of these facts was considered a ratification, although the infant gave no notice of repudiation. Daggett, J., pertinently said, in giving judgment, ' An infant buys a horse, carriage, or land, gives his promissory note for the price, and, upon coming of full age, does not return the property, nor offer to return it. To a suit on the note, he pleads infancy, and a new promise is replied; — will that evidence support the issue ? ' " The fact that part payment even of a debt contracted during infancy will not be a ratification, as has been often held (Thrupp v. Fielder, 2 Esp. 628; Hinely v. Margaritz, 3 Barr, 428; Bobbins u. Eaton, 10 N. H. 561), would seem to show conclusively that a fortiori, a bare non-disaffirmance would not have any such effect. , ' ' On the review of the authorities it would seem that the dictum of Dallas, J., above cited, is not sustained, either upon principle or authority, and that some act is necessary, on any infant's part, tending to show an intention to ratify, or he will not be bound." See Irvine ». Irvine, 9 Wall. 617. > Gibbs V. Merrill, 3 Taunt. 307 ; Hunt v. Massey, 5 B. & Ad. 902 ; Hartley v. Wharton, 11 Ad. & El. 934 ; Cohen v. Armstrong, 1 M. & S. 724. ' Thing u. Libbey, 16 Me. 55 ; Goodridge v. Ross, 6 Met. 487. ' U. S. «. Bainbridge, 1 Mason, 71 ; Commonwealth v. Harrison, 11 128 OP THE PARTIES TO A CONTHACT. [CHAP. II. § 121. Second. All acts which he is under a legal obligation to do are binding upon him ; ^ as giving a bond for the support of his illegitimate child, where the statute obliges him to sup- port his illegitimate child, and makes it necessary for him to give such bond.^ So, also, as he is bound, by law, to provide for the support of his wife and children, he is answerable for neces- saries furnished to them.^ He is of course liable for necessa- ries furnished himself; and a written acknowledgment by an infant of a debt incurred for necessaries is an answer to a plea of the statute of limitations.* § 122. Third. An infant may bind himself as an ajiprentioe to a trade,^ and if he be made a party to the indenture, or if his consent be expressed in it, it is said in England, he cannot dissolve the relation.^ But he may set up his infancy as a defence for violation of his covenants, by the common law,^ although he cannot abandon his master's service, and avoid his indenture,® unless his master desert him.^ In this coun- try articles of apprenticeship, except by force of some statute, Mass. Go ; U. S. v. Anderson, Cooke, 143 ; Commonwealth v. Murray, 4 Binn. 487. A minor between the ages of eighteen and twenty-one may law- fully enlist as a member of a regiment of volunteers in the service of the United States. Lanahan v. Birge, 30 Conn. 43S (1862). ' The People v. Moores, 4 Denio, 519 ; Baker v. Lovett, 6 Jlass. 80. See also U. S. v. Bainbridge, 1 Alason, Sli ; The People v. Miillin, 2.5 Wend. 698; Winslow i). Anderson, 4 Mass. 376; Elliott v. Plorn, 10 Ala. 348. = The People v. Moores, 4 Denio, 519 ; IMcCall v. Parker, 13 Met. 372. = Turner v. Trisby, 1 Str. 168 ; Bull. N. P. 155. ■• Wilhns y. Smith, 4 El. & B. 180 (l.So4). ° The King v. Arundel, 5 M. & S. 257; Woodruff v. Logan, 1 Eng. 276. « 2 Kent, Coram, pt. iv. lect. 31, p. 242 ; "Wood v. Fenwick, 10 M. & W. 195 ; The King v. Great Wigston, 3 B. & C. 484. ' Wbittingham v. Hill, Cro. Jao. 494; Gylbert v. Fletcher, Cro. Car. 179; Jennings u. Pitman, Hutton, 63; Lylly's Case, 7 Mod. 15; Whitley B. Loftus, 8 Mod. 190; Blunt v. ]\Ielcher, 2 Mass. 228; In the matter of McDowles, 8 Johns. 331 ; Harper v. Gilbert, 5 Cush. 417 ; Balch v. Smith, 12 N. H. 437 ; Harney v. Owen, 4 Blackf. 338. See also Mr. Bennett's note to Bing. on Infancy, 90. By the custom of London, infancy is no de- fence. » The King v. Great Wigston, 5 Dowl. & Ryl. 339; 3 B. & C. 484. " The King v. Mountsorrel, 3 M. & S. 497. CHAP. II.] INFANTS. 129 are not absolutely binding, but voidable at the election of the minor.i § 123. A contract for labor and service is, however, voidable by an ihfant ; ^ and even although it be an entire contract, he may recover a quantum meruit for the labor actually performed, deducting, as some authorities hold, any damage which may have accrued to his employer in consequence of the imperfect performance.^ But on this last point many cases hold that if an infant has legally avoided his contract for labor, the rights of the parties are as if no such contract had ever been made ; and if he has agreed to give notice before leaving, but does not, he may recover all his wages, without any deduction for dam- ages in not complying with his contract.* His action should, however, be brought in the name of his parent or guardian. Payment of wages to the son is ordinarily no defence to an action by the father, because to the father alone are his wages due.^ Yet if the son be emancipated, and allowed to work on his own account, he alone is entitled to his earnings, and they cannot be attached by his father's creditors.^ The father's consent that the child shall have his own earnings will be im- plied from a knowledge that he is working for himself, if no ' See Harney «. Owen, 4 Blackf. 338 ; Vent v. Osgood, 19 Pick. 572 ; Peters v. Lord, 18 Conn. 337 ; Nickerson a. Easton, 12 Pick. 112. = Nickerson v. Easton, 12 Pick. 112; Vent v. Osgood, 19 Pick. 572; Francis v. Felmit, 4 Dev. & Bat. 498 ; Medbury v. Watrous, 7 Hill, 110. See also Bing. on Infancy, and Mr. Bennett's note, p. 89, 90 ; Peters v. Lord, 18 Conn. 337. - Moses V. Stevens, 2 Pick. 332 ; Thomas v. Dike, 11 Vt. 273 ; Vent v. Osgood, 19 Pick. 572 ; Hoxie v. Lincoln, 25 Vt. 206 ; Judkins v. Walker, 17 Me. 38; Medbury u. Watrous, 7 Hill, 110; Moulton u. Trask, 9 Met. 577 ; Corpe v. Overton, 10 Bing. 252 ; Ray v. Haines, 52 111. 485 (1869) ; Dallas u. Hollingsworth, 3 Ind. 537. But see Whitmarsh v. Hall, 3 Denio, 375, contra, as to any deductions. ' Derocher v. Continental Mills, 58 Me. 217 (1870), reviewing the cases; Robinson v. Weeks, 56 Me. 102. » Shute V. Dorr, 5 Wend. 204; Clapp ». Green, 10- Met. 439; Gal- braith v. Black, 4 S. & R. 207 ; White v. Henry, 24 Me. 531 ; Keen V. Sprague, 3 Greenl. 77. See Melntyre v. Fuller, 2 Allen, 345 (1861). = Morse v. Welton, 6 Conn. 547; Jenney v. Alden, 12 Mass. 875; TiUotson V. McCriUis, 11 Vt. 477 ; Lord v. Poor, 23 Me. 569 ; U. S. «. Mertz, 2 Watts, 406 ; Burlingame v. Burlingame, 7 Cow. 92 ; Nixon v. Spencer, 16 Iowa, 214 ; Hardwick «. Pawlet, 36 Vt. 320. VOL. I. 9 130 OF THE PARTIES TO A CONTRACT. [CHAP. 11. objection be made by his father.^ And if the son's wages are paid to the father, under an agreement that they belong to the son, the latter may sue the father for them.^ So, also, when a father leaves a son in charge of a mother, whom he has deserted, he cannot claim the child's earnings.^ Nor can he claim his earnings where the father is a pauper and insane, since he is under no obligation to support his child in such case.* Emancipation by the father must be proved, and will not be presumed.^ Desertion by the child with vagrancy and crime does not of itself constitute emancipation.^ § 124. Fourth. Executed contracts of marriage are binding upon an infant. By the common law, the age of consent, at which the contract of marriage may be made, is fourteen years in a male, and twelve in a female, and a marriage entered into after that age, and before majority, is valid, and cannot be avoided.^ But if the contract be entered into before such age, which is called the age of discretion, it is voidable at the mere will of either party, without legal process ; or if one party only be under the age of discretion, it is at the option of either to affirm it or not. This is an anomaly in the law relating to promises. If, however, an infant be married, and affirm such contract after arriving at maturity, no subsequent marriage ceremony is necessary. Such affirmance may be either express or implied, if the parties still continue to live together, between an infant and adult. It comes, however, within the general ' Whiting V. Earle, 3 Pick. 201; Corey v. Corey, 19 Pick. 29; Can- ovar V. Cooper, 3 Barb. 115 ; Cloud o. Hamilton, 11 Humph. 104 ; Clinton v. York, 26 Me. 167 ; Armstrong v. McDonald, 10 Barb. 300 ; Taunton v. Plymouth, 15 Mass. 203 ; Perlinau v. Phelps, 25 Vt. 478. But see Stiles V. Granville, 6 Cush. 458. 2 Ayer v. Ayer, 41 Vt. 302 (18G8). See Mears w. Bickford, 55 Me. 628 ; Abbott v. Conversf, 4 Allen, 530. ' Wodell V. Coggeshall, 2 Met. 89 ; The Etna, Ware, 462 ; Chilson ». Phillips, 1 Vt. 9. See Wood v. Corcoran, 1 Allen, 405. * Jenness v. Emerson, 15 N. H. 486. ' Sumner u. Sebec, 3 Greenl. 223 ; White v. Henry, 24 Me. 531. « Bangor v. Readfield, 82 Me. 60. ' Such is still the law in Massachusetts, although the person officiating at the marriage of a minor under that age is liable to a statute peualty. Parton v. Hervey, 1 Gray, 119. CHAP. II.] INFANTS. 131 principles of contract, which require a reciprocal assent of the parties, and is allowed in these particular cases, upon the ground stated by Lord Coke, that " in contracts of matrimony, either both must be bound, or equal election of disagreement be given to both."i § 125. Fifth. The representative acts of an infant are bind- ing, generally ; as where he is an executor or trustee ; ^ upon the plain ground, that such contracts do not concern his own interest, and to render them void, would be to invalidate the contract of the cestui que trust, who may be perfectly compe- tent to contract, and who has an undoubted right, if he choose, to take the risk of the infant's competency. § 126. Sixth. Contracts for " necessaries " are binding upon an infant, and as well in favor of an attaching creditor in gar- nishment as of his own creditor.^ The ground, upon which the contracts of infants for necessaries are enforced, has been said to be, not because they are contracts, but only " since an infant must live as well as a man, the law gives a reasonable price to those who furnish him with necessaries." * Tliis class includes by far the greatest number of cases in which an infant is liable on his contract. The legal term " necessaries " is a relative term, not strictly limited to such things as are abso- lutely requisite for support and subsistence, but to be construed liberally, and varying with the estate and degree, the rank, for- tune, and age of the infant.^ His real and not his ostensible fortune and circumstances, however, constitute the test and criterion, as to whether the articles are necessaries or not.^ • Co. Litt. 79 b, and notes 44 and 45 ; 1 Roll. Abr. 341 ; Bac. Abr. In- fancy and Age, A. ; 1 Black. Comra. 436. ^ The King v. Great Wigston, 5 Dowl. & Eyl. 339 ; 3 B. & C. 484. 3 Scofield V. White, 29 Vt. 330 (1857). * Bac. Abr. Infancy, I. 1. ^ Bac. Abr. Infancy, I. 1 ; Com. Dig. Enfant, B. 5 ; Rainsford v. Fenwick, Carter, 215 ; Hands v. Slaney, 8 T. R. 678 ; Harrison v. Fane, 1 Scott, N". R. 287. « Story V. Pery, 4 C. & P. 526 ; Cook v. Deaton, 3 C. & P. 114 ; Burg- hart V. Angerstein, 6 C. & P. 699 ; Ford v. Fothergill, 1 Esp. 211. In Story B. Pery, 4 C. & P. 526, which was a case where clothes were furnished by a tailor to the defendant, a minor, the charges for which were proved to be reasonable, Lord Tenterden said: "The question, if there be any in this 132 OP THE PARTIES TO A CONTRACT. [CHAP. II. What would be necessary to one person in one situation in life, would by no means be so in another and different one ; and what is suitable is therefore considered as necessary. i Thus, a servant's livery was considered a necessary in one case, for wliich the defendant, his master, was liable ; and horses, and jewelry, and lodgings have been held to be necessaries under certain circumstances.^ But articles which are purely orna- mental and not useful, are not necessaries ; ^ and Vaughan, C. J., held that " balls and serenades at night must not be accounted necessaries," even for a nobleman.* In a recent and leading case,^ a lady under age, residing with her father, as a member of his family, gave instructions to solicitors, through her father as agent, concerning a marriage settlement. Upon her mar- riage she was sued by the solicitors, jointly with her husband, as upon a contract for necessaries furnished before marriage ; and the action was sustained. § 127. Again, in order to bring any articles furnished to an infant within the class of necessaries, it must appear that they were to supply personal wants, either of the body, as food, clothing, lodging, medicines, and the like, — or of the mind, as in the case of schooling and instruction ; ^ and what would be proper expense for instruction would depend on the station case, is, whetlier these things were necessaries, suited to the defendant's station and rank in society. It is the duty of all to enforce that wholesome provision, which protects infants from their own improvidence ; and that cannot be better done than by preventing others from encouraging them in that improvidence. If a tradesman trusts an infant, he does it at his peril, and he cannot recover, if it turn out that the party has been properly sup- plied by his friends." ' Brooks V. Crowse, Andr. 277 ; Clowes v. Brooke, 2 Str. 1101 ; Barber V. Vincent, 1 Freeman, 631. = Hands v. Slaney, 8 T. R. 578; Harrison d. Fane, 1 Scott, N. R. 287; Peters w. Fleming, 6 M. & W. 42 ; Crisp v. Churchill, cited in Lloyd v. Johnson, 1 Bos. & Pul. 340. But see Rainwater v. Durham, 2 Nott & M'- Cord, 524. 5 Peters v. Fleming, 6 M. & W. 42 ; Brooker v. Scott, 11 M. & W. 67; Chappie V. Cooper, 13 M. & AY. 252. -See Ryder v. Wombwell, Law R. 4 Exch. 32 (1868) ; s. c. Law R. 3 Exch. 90. ■* Riiirifford V. Fenwick, Carter, 216, sed qucere. ' Helps V. Clayton, 17 C. B. (n. s.) 553 (1864). « Tupper V. Cadwell, 12 Met. 562, per Mr. Justice Dewey; Co. Litt. 72; 2 Roll. 271 ; Chappie v. Cooper, 13 M. & W. 262. CHAP. II.J INFANTS. 133 and condition of the infant.^ This rule is extended so as to include the wife and children of the infant, and he will be responsible for necessaries furnished to them in like manner as he would if furnished to himself.^ He has been thought liable for articles bought to present to his bride ; ^ as also for a wedding suit for himself.* Yet for necessaries furnished to a person he is to marry, and in view of that marriage, he is not liable.^ § 128. Whether the articles furnished are actually necessary to the particular infant, is a question of fact for a jury ; but whether they come within the class of necessaries suitable to persons in his condition, is a question of law.^ That is, when- ever the articles supplied are of a doubtful character, and may or may not have been necessary for the particular infant, it is for the jury to determine, under the direction of the court, as to what the legal term necessaries imports, whether the articles in question were necessaries in the particular case. But if the articles be manifestly not necessaries, but mere luxuries or conveniences, the court will adjudge the question as matter of law, without putting it to the jury ; and though the articles may under certain circumstances be considered as necessaries, yet if no special circumstances be shown, making them so, and ' Peters v. Fleming, 6 M. & W. 48. A good common school education would in all cases be considered as necessary. Manby v. Scott, 1 Siderfin, 112 ; Middlebury Coll. v. Chandler, 16 Vt. 683 ; Raymond v. Loyl, 10 Barb. 489. But in this country a regular collegiate education has been held not to be within the class of necessaries for a person of ordinary rank and cir- cumstances in life. Middlebury Coll. v. Chandler, 16 Vt. 683. And an ao-reement to board, clothe, and school an infant in return for his labor cannot be repudiated after it has been executed. Squier u. Hydliff, 9 Mich. 274 (1861) ; Mountain v. Fisher, 22 Wis. 93 (1867). = Turner v. Trisby, 1 Str. 168 ; Bacon, Max. 67 ; Rainsford v. Fenwick, 1 Carter, 215; Beeler v. Young, 1 Bibb, 519. ' Jenner v. Walker, 19 Law Times (n. s.), 398. ' Sams V. Stockton, 14 B. Mon. 232. 6 Turner u. Trisby, 1 Str. 168 ; Beeler v. Young, 1 Bibb, 519 ; Abell v. Warren, 4 Vt. 149. « Beeler v. Young, 1 Bibb, 519 ; Stanton v. Willson, 3 Day, 87 ; Maddox B. Miller, 1 M. & S. 788 ; Bac. Abr. Infancy and Age, I. 1 ; Lowe v. Griffith, 1 Scott, 458; Phelps v. Worcester, 11 N. H. 51; Grace v. Hale, 2 Humph. 27 ; Tupper v. Cadwell, 12 Met. 559 ; Mason v. Wright, 18 Met. 306. 134 OP THE PARTIES TO A CONTRACT. [CHAP. II. they are primd facie not within the class, the court will adjudge the question as matter of law.^ Thus, where fruit, confection- ' Such at least seems to be the current of opinion in the recent cases. In Peters v. Fleming, 6 M. & W. 42, the plaintiff, who was a jeweller, brought an action against an infant for the price of four rings, a gold watch- chain, and a pair of breastpins ; infancy was pleaded in defence, and the plaintiff replied that the articles were necessaries suitable to the estate, degree, and condition of the defendant. It appeared that the infant was the eldest son of a gentleman of fortune, who was a member of Parliament, and that he was an undergraduate at the University of Cambridge, and resided at the university. The jury found that the articles were necessaries, and a motion was made to set aside the verdict as contrary to evidence. The Co^rt of E.xchequer, however, refused to interfere, and Baron Parke said, " It is perfectly clear, that from the earliest time down to the present, the word necessaries was not confined, in its strict sense, to such articles as were necessary to the support of life, but extended to articles fit to maintain the particular person in the state, station, and degree in life in which he is; and therefore we must not take the word ' necessaries ' in its unqualified sense, but with the qualification above pointed out. Then the question in this case is, whether there was any evidence to go to the jury that any of these articles were of that description. I think there are two that might fall under that description, namely, the breastpin and the watch-chain. The former might be a matter either of necessity or of ornament; the usefulness of the other might depend on this, whether the watch was necessary; if it was, then the chain might become necessai-y itself Now it is impossible for us to say that a judge could withdraw it from the consideration of the jury, whether a watch was not a necessary thing for a young man at college, .and of the age of eighteen or nineteen, to have. That being so, it is eijually, as far as the chain is concerned, a question for the jury ; there was, there- fore, evidence to go to the jury. The true rule I take to be this, — that all such articles as are purely ornamental are not necessary, and arc to be rejected, because they cannot be requisite for any one ; and for such matters, tlicrcfore, an infant cannot be made responsible." But in Harrison v. Fane, 1 Man. & Grang. 550, the action was brought against an infant h\ a livery- stable keeper for tlic hire of horses, and it appeared that the defendant was the younger son of a gentleman who had once been a member of Parliament, and that the defendant had a horse of his own, and sometimes hunted with his fatlier's hounds. Under these circumstances, the judge charged the jury that the horses were not necessaries, but the jury found a verdict for the plaintiff, and the court set it aside as perverse and contrary to law. Tindal, C J., said, "I do not say that horses and gigs are not necessaries under any circumstances ; but no evidence was given that they were so in the present case. All that was shown was that defendant kept a horse, and sometimes hunted with his father." Maule, J., said, "The plaintilf alto- gether failed in making out that the horses which he had let to defendant CHAP. IJ.] INFANTS. 135 ery, Ac, were supplied to a student at Oxford for dinners at his rooms, where he received parties, of friends, it was held, were necessaries. I doubt whether the jury thought they were so; they were probably of opinion that an improper defence had been set up." In Brooker v. Scott, 11 M. & W. 67, dinners, confectionery, soda-water, lozen- ges, oranges, jellies, and other articles of a similar kind, were furnished to an infant, for the price of which an action was brought, and the jury having given a verdict for the plaintiff, a rule nisi was obtained, and the court held, that the articles were prima facie not necessaries, and as no circumstances were alleged to make them so, the plaintiff should be nonsuited. The counsel having cited the remarks of Baron Parke (supra) in Peters v. Flem- ing, that "the word necessaries was not confined in its strict sense to such articles as were necessary to the support of life, but extended to articles fit to maintain the particular person in the state, station, and degree of life in which he is," Baron Alderson said, " That is to be understood with this qualification, which is pointed out in the same judgment, that the articles be useful. If they are useful, whether they be necessaries will depend on the condition and quality of the individual. But these are articles merely useless and luxurious." To the objection that the articles might have been necessaries, Baron Parke said, "If there be special circumstances you ought to show them; " and Lord Abinger said, " The question is, whether on the face of this bill we see any articles that we think should have been considered by the jury under all the circumstances of the case as necessaries, and we think there are none." See Wharton v. Mackenzie, and Cripps v. Hills, 6 Q. B. 606 ; 48 Eng. Com. Law Rep. 606. This was an action for fruit, con- fectionery, marmalade, ices, soda-water, and other articles sold and delivered to an infant, — and it appeared that these articles were furnished for dinners given by the infant, who was an Oxford undergraduate, at his own rooms. The judge directed the jury, " that in considering what articles should be considered necessary, they were to take into their estimation the rank and fortune of the defendant, and to determine whether the supply was extrava- gant." A rule nisi having been obtained for misdirection, the case was re- argued. Mr. Justice Coleridge said, " It is a most important inquiry, how far the question is for the court, and how far for the jury. In some cases, the question must be for the judge. Suppose the son of the richest man in the kingdom to have been supplied with diamonds and race-horses, the judge ought to tell the jury that such articles cannot possibly be necessaries. In Wharton v. Mackenzie, the fact of the defendant's illness was proved in order to explain the supply of some of the articles. In such a case, the question is a mixed one of law and fact, and must go, with proper directions, to the jury. Without any explanation, the court ivill decide the question. As to what is the meaning of the word ' necessaries,' we have my brother Parke's admirable judgment; to which I will make only one addition, sug- gested by the argument urged at the bar. It is said that we are to look at the circumstances of each defendant. True, we must do so. But the arti- lo6 OF THE PARTIES TO A CONTEACT. [CHAP. II. that so far as the articles were furnished for entertainments given by the defendant to his friends, the question was properly- one of law, it being manifest that such articles could in no sense be necessary to him.^ It seems, also, that it is incum- bent on the plaintiff to prove affirmatively, that the articles sold were necessary, and if he give no such proof, the verdict must be for the defendant.^ § 129. But if articles, however necessary in kind, be furnished to an infant, who is already supplied by his friends ; or if things be furnished of too expensive a nature, or unsuitable to the infant's condition, no action can be maintained for their price. In order to charge the infant for necessaries, it is not only necessary to prove, that they were suitable in quality, but also that they were suitable in quantitij? Thus, if a minor have been already supplied with ten coats by one tradesman, when the plaintiff supplies him with another, he cannot recover the price thereof, on the ground that it was necessary.* It is cles supplied must be necessaries, and not merely comforts or conveniences. Then we shall arrive at the principle acted on in Brooker v. Scott, 11 M. & W. 67, where the court decided that it could not be necessary for an under- graduate to have dinners at his own lodgings, unless under circumstances furnishing an explanation. It cannot otherwise be necessary, though possi- bly convenient or proper. This rule imposes no hardship on tradesmen. If they do not intend to pander to extravagance, let them not give credit. In one of these cases, the bill was allowed to run on for two years and a half. That could have been done only, lest, if the bill were sent in earlier, the supply of such articles might be stopped. Tradesmen must understand that, if they choose so to act, they are trusting only to what they call the honor of the parties supplied." ' Wharton v. Mackenzie, h Q. B. 611 ; Cripps v. Hills, ib. ; Brooker V. Srott, 11 M. & W. 07; Harrison v. Fane, 1 Scott, N. R. 287; Stanton V. Willfon, .J Day, 37; Rainwater v. Durham, 2 Nott & M'Cord, 521; Bent V. .Planning, 10 Vt. 225 ; Rundel v. Keeler, 7 Watts, 239 ; Phelps v. Worcester, 11 N. H. .51 ; Grace v. Hale, 2 Humph. 27. "^ Harrison r. Fane, 1 Seott, N. R. 287 ; Glover v. Ott, 1 M'Cord, 572. ^ Burghart v. Angcrstein, 6 0. & P. 690; Johnson v. Lines, 6 Watts & Serg. 80, and eases cited above. ^ Story V. Pery, 4 C. & P. 520 ; Burghart v. Angerstein, 6 C. & P. 690. In Cook V. Deaton, 3 C. & P. 114, which was a suit by a tailor against a minor, Best, C. J., said, " the plaintiiF ought to have made inquiries of the father. The father says he knew nothing about the plaintiff's supplying Lis son with clothes. As there were proper clothes provided by the father, those furnished by the plaintiff cannot be considered as necessaries." CHAP. II.] INFANTS. 137 incumbent on the tradesman to satisfy himself, by due inquiry, tliat the articles which he furnishes arc actually suitable, both in quality and quantity, and his ignorance or carelessness will prevent his recovery in an action upon the contract.^ But while an infant remains under the care of his father or guar- dian,- and is supported by him, he is not liable, even for neces- saries, upon the ground that otherwise the father would be deprived of the right of exercising his discretion as to the manner and degree of his support.^ § 130. It has always been held that an infant is bound to pay a reasonable price for such necessary things as relate to his maintenance and education, — as for food, lodging, apparel, medical attendance, and schooling,^ — unless credit be given solely to the parent, which is presumed to be the fact, if it appear that the infant was placed at school, or is supported by him.^ But an infant can only be charged upon contracts relat- ing to his personal wants of body or mind,^ and he will not be liable for expenditures or services in respect to his personal or real estate, nor for insurance on his stock in trade,^ nor for goods and wares supplied to him to furnish his shop, or to enable him to carry on his trade, even although he obtain his ' Charters u. Bayntun, 7 C. & P. 52, 55 ; Burghart v. Angerstein, 6 C & P. 690 ; Bainbridge v. Pickering, 2 W. Bl. 1325 ; Ford v. Fothergill, Peaks, 229 ; 1 Esp. 211 ; Mortara v. Hall, 6 Simons, 465 ; Guthrie v. Mur- phy, 4 Watts, 80 ; Kline v. L'Amoureux, 2 Paige, 419. ' Kraker v. Byrum, 13 Rich. 163. = Angel V. McLellan, 16 Mass. 31 ; Wailing v. Toll, 9 Johns. 141 ; Con- nolly V. Hull, 3 M'Cord, 6 ; Kline v. L'Amoureux, 2 Paige, 419 ; Guthrie v. Murphy, 4 Watts, 80 ; Bainbridge v. Pickering, 2 W. Bl. 1325. ■* Manby v. Scott, 1 Sid. 112; Baker «. Lovett, 6 Mass. 78 ; Stone v. Dennison, 13 Pick. 1 ; Deane u. Annis, 14 Me. 26; ante, § 77 a; Tupper V. Cadwell, 12 Met. 563. * Crantz v. Gill, 2 Esp. 472; Duncomb v. Tickridge, Aleyn, 94; Bac. Abr. Infancy and Age, I. 1; Angel v. McLellan, 16 Mass. 28; Wail- ing V. Toll, 9 Johns. 141 ; Simms v. Norris, 5 Ala. 42 ; Phelps v. Worces- ter, 11 N. H. 61; Baker v. Lovett, 6 Mass. 78; Stone v. Dennison, 13 Pick. 1. " In Munson v. Washband, 31 Conn. 303 (1863), it was held that a female infant might employ an attorney to prosecute one who had seduced her, and would be bound to pay for his services and expenditures. ' N. H. M. F. Ins. Co. v. Noyes, 32 N. H. 345. 138 OF THE PARTIES TO A CONTRACT. [CHAP. II. subsistence thereupon ;^ for it is not sufficient in such cases to show that the contract was beneficial to him in a pecuniary point of view, — it must also be for necessaries.^ Yet if any articles supplied to him for the carrying on of his trade, or other purpose, be consumed by him as necessaries, he would be liable therefor, in an action of assumpsit.^ So, also, he is not liable for money borrowed by him to lay out in necessaries, and therefore the lender must, at his peril, lay it out for him, or see that it is so laid out by him.* Nor is he liable for money advanced to relieve him from a draft to do military duty.^ For it is clearly established, that even if the infant do appropriate money so borrowed, to the procurement of necessaries, he will ' Whittingham v. Hill, Cro. Jac. 494 ; Latt v. Booth, 3 Car. & Kir. 292 ; Kundel V. Keeler, 7 Watts, 237; Whywall v. Champion, 2 Str. 1083; Tupper V. Cadwell, 12 IMct. .562 ; Dilk v. Keighley, 2 Esp. 480. But see Breed v. Jiidd, 1 Gray, 459, in which it is said by the court, " we suppose an infant, who had learned the trade of a carpenter, might be charged with a chest of tools necessary to do his labor as a journeyman ; or a laborer with his pickaxe and spade. If the going to California to labor was, in view of the plaintiff's situation and condition in life, a reasonable and prudent step, it would be difficult to say that he might not be charged with the ex- penses of the outfit." See also Coates u. Wilson, 5 Esp. 152. ' Tupper V. Cadwell, 12 Met. 662. Mr. Justice Dewey says, "It has sometimes been contended that it was enough to charge the party, though a minor, that the contract was one plainly beneficial to him in a pecuniary point of view. That proposition is by no means true, if, by it, it be intended to sanction an inquiry, in each particular case, whether the expenditure, or articles contracted for, were beneficial to the pecuniary interests of the minor. The expenditures are to be limited to cases where, from their very nature, expenditures for such purposes would be beneficial ; or, in other words, they must belong to a class of expenditures which are in law termed beneficial to the infant. AVhat subjects of e.xpenditure are included in tins class is a matter of law, to be decided by the court. The further inquiry may often arise, whether expenditures, though embraced in this class, were necessary and proper, in the particular case ; and this may present a ques- tion of fact. It is, therefore, a preliminary question to be settled, whether the alleged liability arises from expenditures for what the law deems ' neces- saries,' and unless that be shown, it is not competent to introduce evidence to .show that, in a pecuniary point of view, the expenditure was beneficial to the minor, as that is irrelevant." " Turberville v. Whitehouse, 1 C. & P. 94. ■* Bac. Abr. Infancy and Age, I. 1 ; Bent v. Manning, 10 Vt. 225. » Dorrell v. Hastings, 28 Ind. 478 (1867). CHAP. II.] INFANTS. 139 not be liable for it in law, inasmuch as the contract arises upon the lending, and its validity would, at best, be dependent on a contingency, namely, whether it was actually applied to procure necessaries ; and if this contingency occur, it cannot, by ex post facto operation, make the contract absolutely bind- ing.i But if the money were borrowed for the express purpose of purchasing particularly specified articles, which are neces- sary, ought not the lender to be treated as having himself supplied the articles, through the agency of the infant, and so be permitted to recover, as for goods sold ? He would certainly be entitled to relief in chancery, in such a case.^ § 131. But an infalit cannot bind himself either by parol con- tract or deed, to pay a sum certain, even for necessaries ; for he is not to be precluded by the form of his contract from his right of estimating the actual worth of the articles supplied, beyond which he is not bound.^ Thus, an infant has been held not to be liable on an account stated,* nor on a bill of exchange accepted,^ nor on a promissory note given for necessaries, unless he ratify them upon coming of age.^ Indeed, in all the modern decisions, there is a strong tendency manifested to treat all the contracts of infants, which 'are not unquestionably and absolutely injurious to the infant, as merely voidable and not void. This, in truth, seems to be by far the more equitable doctrine, since while it affords entire protection to the infant, ' Earle v. Peale, 1 Salk. 386 ; Darby v. Boucher, 1 Salk. 279 ; Probart V. Knouth, 2 Esp. 472, n. 1 ; Com. on Cont. 161 ; Bac. Abr. Infancy and Age, I. 1. " The law knows of no contracts, but what are good or bad at the time of the contract made, and not to be one or other, according to a subsequent contingency." Earle v. Peale, 10 Mod. 67. ' " 2 Evans's Pothier on Obi. 26 ; Marlow v. Pitfeild, 1 P. Wms. 558 ; Reeve, Dom. Kel. 330. See Clarke v. Leslie, 5 Esp. 28 ; Randall v. Sweet, 1 Denio, 460. ^ Bac. Abr. Infancy, I. 1 ; Mitchell v. Reynolds, 2 Kent, Comm. 466e; 10 Mod. 85 ; Earle v. Reed, 10 Met. 387 ; Dubose v. Wheddon, 4 M'- Cord, 221. ^ Wood V. Witherick, Noy, 87 ; Latch, 169 ; Trueman v. Hurst, 1 T. R. 40 ; Bartlett v. Emery, 1 T. R. 42, note (a) ; Ingledew v. Douglas, 2 Stark. 36. But see Williams v. Moor, 11 M. & W. 256, in which an infant is held to be responsible on an account stated. 6 Williamson v. Watts, 1 Camp. 652. • Ante, § 58. 140 OP THE PAETIES TO A CONTRACT. [CHAP. II, it also, by enlarging his capacity, operates as a benefit to him, and at the same time operates less to the injury of the adult. §132. It was formerly held that an infant was bound by his single bill for necessaries, and that an action of debt would lie on such an obligation. But this instrument is now almost wholly disused in England, and it has been doubted whether the rule is now law.i An infant's penal bond has also been held to be void, though given for necessaries ; but this does not destroy the simple contract, upon which the infant still re- remains liable, because the bond never had any force.^ § 133. In the next place, as to the liability of the father in respect to the contracts of his infant child.^ The liability of the father being founded upon the legal presumption that his child is his authorized agent, it is essential that the articles supplied or service rendered to the infant should appear to have been with the assent and by authority of the father.^ It is not, 1 Chitty on Cont. 150; 20 Am. Jur. 285. " Co. Litt. 172 a; Ayliflfi). Archdale, Cro. Eliz. 920; Bac. Abr. Infancy and Age, I. 1; Hunter v. Agnew, 1 Fox & Smith, 15. ^ Though this is properly a branch of the law of agency, it is more con- venient to consider the subject here. * In Baker v. Keen, 2 Stark. 501, Abbott, C. J., said: "A father would not be bound by the contract of his son, unless either an actual authority were proved, or circumstances appeared from which such an authority might be implied. Were it otherwise, a father, who had an imprudent son, might be prejudiced to an indefinite extent ; it was therefore necessary, that some proof should be given that the order of a son was made by the authority of his father. The question, therefore, for the consideration of the jury was, whether, under the circupnstances of the particular case, there was sufficient to convince them that the defendant had invested his son with such authority. He had placed his son at the military college at Harlow, and had paid his expenses whilst he remained there. The son, it appeared, then obtained a commission in the army, and having found his way to London, at a consider- able distance from his father's residence, had ordered regimentals and other articles suitable to his equipment for the East Indies. If it had appeared in evidence that the defendant had supplied his son with money for this pur- pose, or that he had ordered these articles to be furnished elsewhere, the circumstance might have rebutted the presumption of any authority from the defendant to order them from the plaintiff. Nothing, however, of this nature had been proved, and since the articles themselves were necessary for the son and suitable to that situation in which the defendant had placed him, it was for the jury to say, whether they were not satisfied, that an autliority had been given by the defendant.'' In Fluck v. Tollemache, 1 C. & P. 5, the infant was a cadet of fifteen years of age, to whom the plaintiff had supplied clothes, and the father, on the bill being sent to him, refused CHAP. II.] INFANTS. 141 however, necessary that an express assent or authorization should be given by the father ; it will be implied from the cir- to pay it. Burrough, J., said to the jury : " An action can only be main- tained against a person for clothes supplied to his son, either when he has ordered such clothes, and contracted to pay for them ; or when they have been at first furnished without his knowledge, and he has adopted the con- tract afterwards ; such adoption may be inferred from his seeing his son wear the clothes, and not returning them, or making, at Or soon after the time when he knows of their being supplied, some objection. Here, the only knowledge that it appeared the defendant had of the transaction, was being asked for the money ; he then repudiated the contract altogether. It would be rather too much, that parents should be compellable to pay for goods that any tradesman may, without their knowledge, improvidently trust their sons with." So, also, the same rule was held in Blackburn v. Mackoy, 1 C. & P. 1, and Rolfe u. Abbott, 6 C. & P. 286; Clements V. Williams, 8 C. «& P. 58 ; Seaborne v. Maddy, 9 C. & P. 497 ; Shelton v. Springett, 11 C. B. 452 ; 20 Eng. Law & Eq. 281, andMortimore v. Wright, 6 M. & W. 482. Lord Abinger said : " I am clearly of opinion that there was no evidence for the jury in this case, and that the plaintiff ought to have been nonsuited. The learned judge was anxious, as judges have always been in modern times, not to withdraw any scintilla of evidence from the jury ; but he now agrees with the rest of the court, that there ought to have been a nonsuit. In the present instance, I am the more desirous to make the rule absolute to that extent, in order that there may be no uncertainty as to the law upon this subject. In point of law, a father who gives no authority, and enters into no contract, is no more liable for goods supplied to his son, than a brother, or an uncle, or a mere stranger would be. From the moral obligation a parent is under to provide for his children, a jury are, not unnaturally, disposed to infer against him an admission of a liability in respect of claims upon his son, on grounds which warrant no such inference in point of law." " With regard to the case in the Court of King's Bench, of Law V. Wilkin, if the decision is to be taken as it is reported, I can only say that I am sorry for it, and cannot assent to it. It may have been influenced by facts which do not appear in the report ; but as the case stands, it appears to sanction the idea that a father, as regards his liability for debts incurred by his son, is in a different situation from any other relative ; which is a doctrine I must altogether dissent from. If a father does any specific act from which it may reasonably be inferred that he has authorized his son to contract a debt, he may be liable in respect of the debt so contracted ; but the mere moral obligation on the father to maintain his child, affords no in- ference of a legal promise to pay his debts ; and we ought not to put upon his acts an interpretation which abstractedly, and without reference to that moral obligation, they will not reasonably warrant. In order to bind a father in point of law for a debt incurred by his son, you must prove that he has contracted to be bound, just in the same manner as you would prove 142 OF THE PARTIES TO A CONTRACT. [CHAP. II. cumstances of the case, and wherever he has actual knowledge of a contract entered into by his child and does not expressly object, the law implies an assent thereto. Thus, if articles be delivered for the son at the father's house, or if he see his son wearing clothes which he himself has not purchased, it would be sufficient to render him liable prima facie, although he may refute such a presumption.^ And under some circumstances he may be liable for necessaries supplied to his son by order of his wife.^ So, also, where similar contracts have been pre- viously made by the child, and assented to by the father, such fact would furnish a presumption of liability on the part of the father which he must rebut by plain evidence to the contrary, — as, for instance, that he prohibited the tradesman in the' actual case, — or he will be held liable. ^ But whether the such a contract against any other person; and it would bring the law into great uncertainty, if it were permitted to juries to impose a liability in each particular case, according to their own feelings or prejudices." See also Thayer v. White, 12 Met. 343; Gordon v. Potter, 17 Vt. 350; Edwards v. Davis, 16 Johns. 284 ; Pidgin v. Cram, 8 N. li. 353 ; Rolfe v. Abbott, 6 C. & P. 287; Urmston v. Newcomen. 4 Ad. & El. 899; Seaborne V. Maddy, 9 C. & P. 497; Finch v. Finch, 22 Conn. 411; Hunt v. Thompson, 8 Scam. 180; Owen v. White, .5 Porter, 435; Clements v. Wil- liams, 8 C. &-P. 58; Blackburn v. Maekey, 1 C. & P. 1 ; Turquand v. Dawson, ] C. M. & R. 710, note; Mortimore v. Wright, 6 M. & W. 482; Van Valkinburgh v. Watson, 13 Johns. 480 ; Gordon v. Potter, 17 Vt. 348; Varney v. Young, 11 Vt. 258 ; Benson v. Remington, 2 Mass. 113 ; Town- send V. Burnhara, 33 N. H. 270. ■ Fluck V. Tollemache, 1 C. & P. 5 (supra) ; Eolfe v. Abbott, 6 C. & P. 286 ; Deane v. Annis, 14 Me. 26 ; Thayer v. White, 12 Met. 343. In Law V. Wilkin, 6 Ad. & El. 718, the defendant's son was at school, and appearing to be in want of clothes, the defendant supplied him. When the boy went home, he took the clothes with him, but did not wear them. There was no evidence that the father ever saw the clothes, or knew any thing about them. The judge at nisi priiui nonsuited the plaintiff on the ground that there was not sufficient evidence to charge the defendant ; but the Court of King's Bench set it aside on the ground that there was some evidence ; and Lord Denman said : " A father is properly liable for any necessary pro- vision made for his infant son." But in Mortimore v. Wright, 6 M. & W. 482, Lord Abinger said : " With regard to the case of Law v. Wilkin, if the decision is to be taken as it is reported, I can only say that I am sorry for it, and cannot assent to it." See supra. " See Bazeley v. Forder, Law R. 3 Q. B. 658 (1868). ' In the case of Bryan v. Jackson, 4 Conn. 288, where the defendant's CHAP. II.] INFANTS. 143 circumstances import assent in the particular case is a question for the jury. § 134. Where the contract is not for necessaries, the father's authority and assent thereto must clearly appear ; but where the child lives with his father, and the contract is for absolute necessaries, the obligation of the father being a mixed one of legal and moral duty, his authority and assent might, perhaps, be presumed. Mere moral obligation, however, in no case is sufficient to create a liability on the part of the father, even for necessaries, and unless the circumstances be such as to bear an implication of assent, he will not be responsible.^ But in case of necessaries his assent will be implied from slighter circum- stances than where the contract is for articles not necessaries. Where, however, the father expressly states his dissent to the contract, he of course will not be bound thereby, and so, also, where the circumstances show that articles were supplied con- trary to his wishes, he is absolved from responsibility.^ infant son had previously bought goods of the plaintiff which had been paid for by the defendant without objection, or notice not' to trust his son further, and the son afterwards took up goods of a similar nature, which were sued for ; it was held, that the previous payments were a recognition of the son's authority by which the father was rendered liable, — although he had ordered his son to contract no more debts, such prohibition not being made known to the plaintiff. See also McKenzie v. Stevens, 19 Ala. G91 ; Deane v. Annis, 14 Me. 26. In the case of Thayer v. White, 12 Met. 343, goods had been previously bought of T. by the defendant's son, a minor, with the defendant's express consent. Subsequently the son bought goods again of T. in the name of his father, on si.x months' credit, and wrote to his father informing him thereof, and the father made no reply, and it was held that the jury were warranted in inferring the consent of the father from his silence, and that he was therefore liable. See also Baker v. Keen, 2 Stark. 501 ; Van Valkinburgh v. Watson, 13 Johns. 480 ; Mortimore v. Wright, 6 M. & W. 482. » Mortimore v. Wright, 6 M. & W. 482; Chilcott v. Trimble, 13 Barb. 502; Shelton v. Springett, 11 C. B. 452; 20 Eng. Law & Eq. 281, and Bennett's note. Gordon v. Potter, 17 Vt. 348 ; Raymond v. Loyl, 10 Barb. 483. See also cases cited above ; Kelley v. Davis, 49 N. H. 187 (1870) . ^ In Gordon v. Potter, 17 Vt. 350, Redfield, J., says, " But there is one defect in the case, which we think must clearly, and indisputably, preclude any recovery against the father. It does not appear that the father ever gave the son any authority, either expressly or by implication, to pledge Ii4 OP THE PARTIES TO A CONTEACT. [CHAP. II. § 135. Where the child does not live with the father, stricter proof would be required of his assent, than where they live to- gether, since in the latter case the presumption of assent grows more naturally out of the case. Where the child is entirely deserted by the father, it is not settled whether the father would be liable, even for necessaries, but it seems, on broad principles, that the moral obligation of a father to his child ought to create such a liability, in cases where the child is of weak age and unable to support himself, at least so far as to prevent him from perishing by actual destitution. But the authorities do not support this doctrine, and it is said tliat ia case the child is utterly deserted by the father, his sole resource, in the absence of any thing to show a contract express or implied on the father's part, is to apply to the parish, and then the proper steps can be taken to enforce performance of the parent's legal duty. ^ his credit for the articles ; but the contrary. And unless the father can be made liable for necessaries, for his infant child, against his own will, then, in this case, the plaintiff must fail to recover. I know there are some cases, and dicta of judges, or of elementary writers, which seem to justify the con- clusion, that the parent may be made liable for necessaries for his child, even against his own will. But an examination of all the cases upon this subject will not justify any such conclusion." 1 Per Jervis, C. J., in Shelton v. Springett, 11 C. B. 452 ; 20 Eng. Law & Eq. 2.S1. Maule, J., said, " I am of the same opinion. People are very apt to imagine that a son stands in this respect upon the same footing as a wife. But that ia not so. If it be asked, is, then, the son to be left to starve, ^ the answer is, he must apply to the parish, and they will compel the father, if of ability, to pay for his son's support. That is the course which the law points out. But the law does not authorize a son to bind his father by his contracts. Upon the evidence in this case, it is clear there was a total absence of authority in the son to contract on the part of the father, the debt now sued for. The plaintiff originally contracted with the son, intend- ing to trust him for pa3'mfut. There is nothing in the correspondence from which we can infer an intention on the father's part to confer authority upon the son to contract a liability for him. The letter written by the defendant's attorney does not admit, or give any color of admission of, an original liability. I think there is not even what is called a scinlilla of evidence. But it is quite clear that there is not such evidence as would justify a jury in finding a verdict for the plaintiff. I therefore agree with my lord, that the rule must be made absolute to enter a nonsuit." In the case of Urmston V. Newcomen, 4 Ad. & El. 899, the question, whether a father deserting CHAP, n.] INFANTS. 145 § 136. If the father be in a state of separation from his wife and allow his child to live with her, he impliedly constitutes his infant child, would be liable for necessaries, did not arise exactly, be- cause the child was left with relations who were able to support him, and whom the father understood to undertake to do so. Under these circum- stances it was held, that the father having reasonable grounds to suppose the child provided for, was not liable ; but the court declined to give an opinion as to what the law would be in case of utter desertion without any such circumstances. See Maule v. Maule, 1 Wils. & Shaw, 266. In 1 Black. Comm. 449, it is said, " No person is bound to provide a maintenance for his issue unless where the children are impotent and unable to work, either through infancy, disease, or accident, and then is only obliged to find them with necessaries, the penalty in refusal being no more than 20s. a month." The liability there alluded to is, however, to Stat. 43 Eliz. ch. 2, § 7, and it was argued in this case of Urmston v. Newcomen, that the existence of the statute showed an absence of common law liability. Sir John Campbell, in this connection, said, "By the common law, if a child perish for want of proper care, it is murder in the person neglecting it." Lord Denman added, "If the person has the actual custody,'' — and Patteson, J., said, " or the child be part of his family. Would it be murder in a parent to abscond ? " In Stanton v. Willson, 3 Day, 37, the father was divorced from the mother (the plaintiff), and two of the children were in her custody, a third re- mained with the father for some time, but fled from him through fear of violence and abuse, went to live with the mother and her second husband, and the action was brought to recover the expenses of maintenance and education. The coui't held the father liable, two judges dissenting, and said: "Parents are bound by law to maintain, protect, and educate their legitimate children, during their infancy, or nonage. This duty rests on the father ; and it is reasonable it should be so, as the personal estate of the wife, and in her possession at the time of the marriage, becomes the prop- erty of the husband, and instantly vests in him. By the divorce, the rela- tion of husband and wife was destroyed ; but not the relation between Bird and his children. His duty and liability, as to them, remained the same, except so far forth as he was incapacitated or discharged by the terms of the decree. This decree takes from him the guardianship of two of his children; and with it the right, which, as natural guardian, he might other- wise have exercised ; and releases him from those duties only which a guardian, as such, is bound to perform. This transfer of the guardianship to the plaintiff vested her with powers similar to those of guardians in other cases ; and the appointment of the plaintiff to this trust did not subject her to the maintenance of the children, her wards, any more than a stranger would have been subjected by a like appointment. By accepting the trust, she became bound to provide for, protect, and educate them, at the expense of Bird, unless the decree of the general assembly has made other adequate VOL. I. 10 146 OF THE PARTIES TO A CONTRACT. [CHAP. II. her his agent to supply the child with necessaries.^ And this would be especially the case, where the father has a right to provision, which, by the terms of that decree, she is bound to apply. This is not the case here. The sum allowed was directed to be paid to her as her part and portion of Bird's estate, and in lieu of all claims of dower. "Articles furnished by a guardian for the necessary support, mainten- ance, and education of his ward, or by others at his request, are proper articles to be charged on book. Book debt is the proper action ; and the party is, by statute, in this action, made a competent witness. What articles are to be considered as necessaries must depend, in some measure, on the circumstances of the party for whom they are furnished. The court can only instruct the jury as to the classes of articles, which, by law, are con- sidered as necessaries, but the quantity, or extent to which they have been furnished is a fact to be left to the jury ; and to what amount they shall be allowed must depend on their discretion. It may be generally true, that minors under the government of parents cannot bind their parents for neces- saries without their consent. The danger of encouraging children in idle- ness and disobedience, and of their being inveigled into expense by the artful and designing, furnishes a sufficient reason for the rule ; but neither the rule nor the reasoning will apply to the charges in respect to two of the children in this case. The articles were furnished by the guardian herself, or at her request; who, in virtue of her trust, had full power to contract, and make the father liable for necessaries, not only without but against his consent. " With respect to the charges on account of Herman's support, if it is admitted, that ' he eloped from his father for fear of personal violence and abuse, and could not with safety live with him,' every reason for the rule that can be given, ceased to operate. Protection and obedience are relative duties ; and when the wisdom that should guide the infant is lost in delirium, and the arm that should protect, and the hand that should feed him, is lifted for his destruction ; obedience is no longer a duty, and the child cannot with any propriety be said to be under the government of a father. But because the father has abandoned his duty and trust, by putting the child out of his protection, he cannot thereby exonerate himself from its maintenance, edu- cation, and support. The duty remains, and the law will enforce its per- formance, or there must be a failure of justice. The infant cast on the world must seek protection and safety where it can be found ; and where, with more propriety can it apply, than to the next friend, nearest relative, and such as are most interested in its safety and happiness ? The father having forced his child abroad to seek a sustenance under such circumstances, sends a credit along with him, and shall not be permitted to say it was fur- nished without his consent, or against his will." See Kelley v. Davis, 49 N. H. 187 (1870J. But see Gordon v. Potter, 17 Vt. 350, where the contrary doctrine is held. In this case Redfield, J., said : " It is obvious that it [the law] makes ' Rawlyns v. Vandyke, 3 Esq. 250, 252 ; Rumney v. Keyes, 7 IT. H. 671. CHAP. II.] INFANTS. 147 the cbild.^ But this is not true if the wife be living in adul- tery.^ So, also, where, in the absence of her husband, a wife contracted for the board of her daughter, who was a minor, at a particular place, and the child stayed there for a certain time, no provision for strangers to furnish children with necessaries, against the will of parents, even in extreme cases. For if it can be done in extreme cases, it can in every case, where the necessity exists ; and the right of a parent to control his own child will depend altogether upon his furnishing neces- saries, suitable to the varying taste of the times. There is no stopping place short of this, if any interference whatever is allowed. If the parent aban- dons the child to destitution, the public authorities may interfere, and in the mode pointed out by statute, compel a proper maintenance. But this, ac- cording to the English common law, which prevails in this State, is not the right of every intermeddling stranger." The same doctrine is held in Ray- mond V. Loyl, 10 Barb. 483, that there is no legal obligation on a parent to maintain his child independent of statute. See also Hunt v. Thompson, 3 Scam. 180 ; Varney v. Young, 11 Vt. 2.58 ; Chilcott v. Trimble, 13 Barb. 602 ; Kelley v. Davis, 49 N. H. 187 (1870), reviewing the cases on this sub- ject. But in Dennis v. Clark, 2 Cush. 352, Metcalf, J., said: " By the common law of Massachusetts, and without reference to any statute, a father, if of sufficient ability, is as much bound to support and provide for his infant children, in sickness and in health, as a husband is bound, by the same law and by the common law of England, to support and provide for his wife. 2 Mass. 116, 419. Now, it is clearly the law of England, as well as of this Commonwealth, that if a husband desert his wife, or wrong- fully expel her from his house, and make no provision for her support, a person who furnishes her with necessary supplies may compel the husband, by an action at law, to pay for such supplies. And our law is the same, we have no doubt, in the case of a father who deserts or wrongfully discards his infant children. In England, however, the liability of a father, in such case, is matter of doubt, depending, it seems, upon another question equally doubtful ; namely, whether he is bound, by the common law,- to maintain his infant children. Urmston v. Newoomen, 6 Nev. & Man. 454, and 4 Ad. & El. 899. That was an action against a father to recover pay for boarding, clothing, &o., his infant daughter. The court held, upon the facts of the case, that the father was not liable to the action. But they declined to give an opinion upon ' the general question, whether, by the common law, a parent is bound to maintain his deserted legitimate child.' Coleridge, J., said that his opinion was, that a parent was not so bound. 6 Nev. & Man. 466. Neither of the other judges intimated an opinion on the question. See Cro. Eliz. 849 ; O. Bridgm. 257 ; 4 East, 84 ; 6 M. & W. 488 ; 9 C. & P. 497." See also Owen v. White, 5 Porter, 436. In the matter of, Ryder, 11 Paige, 187. ' The King v. Greenhill, 4 Ad. & El. 624. " Atkyns v. Pearce, 2 C. B. (n. s.) 763 (1857). 148 OF THE PARTIES TO A CONTRACT. [CHAP. II. and then was removed by her mother to another place, and an action was brought for the board in the latter place, it was held, that as the husband had paid the board at the first place, he thereby impliedly acknowledged the discretionary power of his wife to contract for such purpose, and therefore that he was liable. 1 § 137. Where the child voluntarily leaves the father, the latter would not be responsible for any debts unless his author- ization and assent were distinctly proved,^ or unless, perhaps, in cases of absolute necessity in so far as to prevent the child from perishing. A fortiori the father would not be liable in such cases, where it appears that the child was able to support himself, and actually did earn enough to pay for strict neces- saries.^ § 138. The term " necessaries " as relating to the liability of the father, receives a much more strict and limited construc- tion, than when it relates to the child — and the father with- out his assent express or implied, would never be liable for any thing but absolute necessaries ; and if a fatlier give a son ' Forsyth!). Milne, Sitt. after M. T. 1808, K. B., cited in Chitty on Cont. 147 ; Paley on Principal and Agent, 120, note 2. See also Bryan v. Jack- son, 4 Conn. 288 ; McKenzie ». Stevens, 19 Ala. 691 ; Thayer v. White, 12 Met. 843. ^ Angel V. M'Lellan, 16 Mass. 28. ' See Weeks v. Merrow, 40 Me. 151. In Eolfe v. Abbott, 6 C. & P. 286, the defendant's son, who was nineteen years of age and had a situation worth £90 a year, ordered clothes of a tailor who sent the bill to the father. Gurney, J., said to the jury: "The question in this case is, whether these clothes were supplied to the son of the defendant by the assent of the de- fendant. For, to charge him, it is essential that the goods should have been supplied with his assent, or by his authority. Indeed, if the law were not so, any one of you who had an imprudent son might have bills to a large amount at the tailor's, the hatter's, the shoemaker's, and the hosier's, and you know nothing at all about it." In Blackburn v. Mackey, 1 C. & P. 1, the defendant's son was a minor living away from his father as a clerk in Lon- don, and receiving a guinea a week as wages. The father did not supply him with clothes, and being greatly in need of them, he bought them, and suit was brought to recover their price of the father. But Abbott, C. J., told the jury that " a father was not bound to pay for articles ordered by his son, unless he had given some authority, express or implied." See also Baker v. Keen, 2 Stark. 501. CHAP. 11.] INFANTS. 149 a reasonable allowance, he would not be liable even for things strictly necessary.^ § 139. Again, if a person adopt the relationship of a father, or hold out the child as being his own, he will be liable in like manner as if it were truly his child, although it be illegitimate, or although it be the child of other persons.^ But a father-in- law is not, at the common law, bound to maintain his wife's children by a former marriage, unless he take them into his house, and assume the character of parent, or adopt them as his own.^ But if he educate and support them, he cannot re- cover a remuneration therefor, unless there be an express promise to repay him.* § 140. Whether, the father being dead, the mother is liable for the support of her infant children, does not seem to be entirely settled, but the inclination of authority is against her liability.^ At all events, it is well established that the mother could, in no case, be liable to the same extent as the father for the maintenance of the child.^ § 141. The legal obligation of the father to pay for the maintenance and support of the children, does not seem to be annulled by the fact that the child has an independent prop- erty of his own,^ although, generally, courts of equity incline > Crantz v. Gill, 2 Esp. 471. = Hesketh v. Gowing, 5 Esp. 131 ; Cameron v. Baker, 1 C. & P. 268 ; Nichols V. Allen, 3 C. & P. 36. = Tubb V. Harrison, 4 T. R. 118 ; Cooper v. Martin, 4 East, 76 ; Stone V. Carr, 3 Esp. 1 ; Freto v. Brown, 4 Mass. 675 ; Minden v. Cox, 7 Cow. 235. This is made otherwise by Statute of 4 & 5 Will. IV. eh. 76, § 57, in England. * Felly V. Rawlins, Peake, Ad. Cas. 226 ; Cooper «. Martin, 4 East, 76 ; Williams o. Hutchinson, 5 Barb. 122 ; Grossman v. Lauber, 29 Ind. 618 (1868). * Tilton V. Russell, 11 Ala. 497 ; Pray v. Gorham, 31 Me. 241 Raymond v. Loyl, 10 Barb. 483 ; Commonwealth v. Murray, 4 Binn. 487 are against the obligation of the mother. But see contra, Benson v. Rem ington, 2 Mass. 113; Nightingale v. Withington, 15 Mass. 274; Hughes v Hughes, 1 Bro. C. C. 387 ; Matthewson v. Perry, 87 Conn. 435 (1870) Simpson v. Buck, 5 Lans. 337 (1871). See cases cited note 1, ante, p. 143, « Ibid.; Dawes v. Howard, 4 Mass. 97; In the matter of Ryder, 11 Paige, 185 ; Buckley v. Howard, 36 Tex. 565 (1872). ' Dawes v. Howard, 4 Mass. 97 ; In the matter of Kane, 2 Barb. Ch. 375. 150 OF THE PARTIES TO A CONTRACT. [CHAP. II. to appropriate to the maintenance of the child the income of his own property ; ^ and where the father is without means to educate and support his children, courts of equity will always make a prospective allowance for such purpose out of the property of the children.^ § 142. In consideration of this obligation on the part of the father to maintain his children, the law gives him a right to all their earnings ; ^ and in case of his death the mother has the right.* But whenever this obligation fails, the right fails likewise ; and if the children support themselves, or their maintenance is from their own property, or if they live with their mother when separated from the father, the father will not be entitled to their earnings.^ So, also, the father may relinquish his claim to the earnings of his child, by eman- cipating him, or by contract with those for whom he works, allowing them to pay the child the wages for his labor, or by any act importing an intention to abandon all claim thereto.^ § 143. An infant must sue by guardian, or prochein ami J And if he have a guardian, he may, with his consent, sue ' Jervoise v. Silk, Cooper, 52 ; Maberly v. Turton, 14 Ves. 499 ; Simon 1;. Barber, Taml. 2'2. ' Newport w. Cook, 2 Ashm. 332; In the matter of Kane, 2 Barb. Ch. 375; Buckley v. Howard, 35 Tex. 565 (1872). ' Benson v. Remington, 2 Mass. 113; Shute v. Dorr, 5 Wend. 204; Clapp V. Green, 10 Met. 439 ; ante, § 74 a ; Nightingale v. Withington, 15 Mass. 274. See Dodge v. Favor, 15 Gray, 82 (186U). And he may assign this right for a consideration to enure to himself. Day v. Everett, 7 Mass. 154; Ford v. McVay, 55 111. 119 (1870). ' Simpson v. Buck, 5 Lans. 337 (1871) ; Gray v. Durland, 50 Barb. 100; Mattliewson V. Perry, 37 Conn. 435 (1870). ' Wodell V. Coggeshall, 2 jNIut. 89 ; Chilson v. Philips, 1 Vt. 41 ; Gale ti. Parrot, 1 N. H. 28 ; Freto v. Brown, 4 Mass. 675. ^ See ante, § 74 a ; Jenney v. Alden, 12 Mass. 375 ; Whiting v. Earle, 3 Pick. 201; Varney v. Young, 11 Vt. 258; Burlingame i'. Burlingame, 7 Cow. 92 ; Canovar v. Cooper, 3 Barb. 115 ; Clinton v. York, 26 Me. 167. But if an infant son, who has been given his time, return and work for his father until of age, he cannot recover for his services. Albee v. Albee, 3 Oregon, 321 (1871). ' 2 Inst. 261, 390 ; Co. Litt. 135 6 ,• Cro. Car. 86 ; Cro. Jac. 641. CHAP. II.] MARRIED WOMEN. 151 by the 'prochein ami ; ^ but he can only defend by guardian.^ The prochein ami is not, however, to be considered as a party to tlie suit, but merely as an attorney, having power to prose- cute the right of the infant, but not to do any act to his injury, such as to release or compromise his suit.^ Payment to him, without ratification by tlie infant, is therefore no satisfaction of a rccovci-y ; * and the suit may be compromised and dismissed witliout his consent.^ His power over the subject-matter com- mences with the suit, and if a previous demand were necessary to perfect the cause of action, he cannot maintain it.® MARRIED WOMEN. § 144. "We now come to the fourth division of persons in- competent to contract, namely, married women. The rule of the common law is, that a married woman cannot, during her coverture, make an obligatory contract.'' And her deed is absolutely void.* And she cannot contract, even with her hus- band's consent, unless she be living as a, feme sole, her husband being civiliter mortuus? Her legal existence is, during such period, merged in that of her husband, and neither she nor he 1 Thomas v. Dike, 11 Vt. 273 ; Hardy v. Scanlin, 1 Miles, 87 ; McGiffia V. Stout, Coxe, 92 ; Trask v. Stone, 7 Mass. 241 ; Rucker v. M'Neely, 4 Blackf. 179 ; Bouohe v. Ryan, 3 ib. 472. A minor may recover, in an action by his next friend, for services contracted to be paid for to him. Boynton v. Clay, 68 Me. 236 (1870). See Jennings v. Collins, 99 Mass. 29 (1868). 2 Hutt. 92 ; Palm. 225 ; 1 Roll. Abr. 287 ; Cro. Jac. 641. See note to Bingham on Infancy, p. 123 ; Swan ». Horton, 14 Gray, 179. 8 Sinclair v. Sinclair, 13 M. & W. 640 ; Crandall v. Slaid, 11 Met. 288 ; Miles v. Kaigler, 10 Yerg. 10 ; Isaacs v. Boyd, 5 Port. 388 ; Brown V. Hull, 16 Vt. 673. * Allen V. Roundtree, 1 Speers, 80; Smith v. Redus, 9 Ala. 99 ; Bethea V. McCall, 3 ib. 450. 6 Longneuker v. Greenwade, 5 Dana, 516. * Miles V. Boyden, 3 Pick. 213. ' Marshall v. Button, 8 T. R. 645 ; Lewis v. Lee, 3 B. & C. 291 ; Faith- orne v. Blaquire, 6 M. & S. 73. But in this, as in the other cases of disa- bility, the defence is personal, available only by the feme. Crumbley v. Searcey, 46 Ala. 328 (1871). s Concord Bank w. Bellis, 10 Cush: 276. » Davis V. Burnham, 27 Vt. 662 (1855). 152 OP THE PARTIES TO A CONTRACT. [CHAP. 11. can be sued upon lier contracts, unless they are ratified or assented to by him. Upon marriage, all her personal estate is vested in her husband ;-^he assumes all her debts, and may sue upon all her ohoses in action, and receive the profits of lier labor. Yet no choses in action, unless they be reduced to pos- session before, her death, will survive to the husband, — and if he die before reducing them to possession, they become the wife's sole property,^ — and if she die before they are reduced to his possession, they go to her heirs. ^ So, also, he is only jointly liable with her for her debts contracted before her mar- riage, and he cannot be sued alone without some new consid- eration to him (as delay or inconvenience to the creditor), and in case of her death, he is absolved from liability therefor,* whether he received a fortune by her or not. There is, how- ever, one exception to this rule, which obtains when a pro- missory note or bill of exchange is given to her while unmarried, in which case, the marriage is considered as an indorsement to the husband, and he can sue upon it alone. ^ The freehold and inheritance of the wife are subject, however, to other rules and regulations ; for the husband does not by the marriage acquire an absolute power over them, so as to enable him to make a sale of them without her consent, but he has only a right to receive the rents and profits accruing from them during her life.^ It is the policy of the law, in order to prevent domestic discord, to create a legal unity ; it therefore makes the will of one paramount, according to the Homeric maxim, " Oix djadov nohixoiQuvt)] • sl^ ttoiQavog eara)."'^ ' A promissory note given by the husband to the wife before marriage becomes null upon marriage, and does not revive on the survivorship of the ■wife. Abbott «. Winchester, 105 Mass. 115 (ly70) ; Chapman v. Kellogg, 102 Mass. 2-16 (1869). ' Bac. Abr. Baron & Feme, C. 3 ; Gaters v. Madeley, 6 M. & W. 423. '' Belts V. Kimpton, 2 B. & Ad. 273 ; Pattee v. Harrington, 11 Pick. 221. * Mitfhinson v. Hewson, 7 T. R. 348 ; Richardson v. Hall, 1 Br. & B. 50; Com. Dig. Baron et Feme, E., 2 C. and (n.) ; Heard v. Stanford, Cas. t. Talb. 173; s. c. 3 P. Wms. 409; 1 Chitty, Plead. (6th ed.) 33; Rumsey v. George, 1 M. & S. 180 ; Blilner v. Milnes, 3 T. R. 631 ; Pittam V. Foster, 1 B. & C. 248. 6 M'Neilage v. HoUoway, 1 B. & AI. 218. 6 Bac. Abr. Baron & Feme, C. 1, D. I. ' Iliad, II. 204. See also the preceding lines. CHAP. II.] MARRIED WOMEN. 153 § 145. These are, however, exceptions to this general rule, which have been introduced out of regard to the interests of man and the necessities of woman, in order to afford her the privilege of contracting to supply herself with necessaries, and to create a sufficient security for those who provide her with means of subsistence. § 146. First. The first of these exceptions is where the hus- band is oiviliter mortuus, that is, where he is under a legal disa- bility to make any contract, and his civil existence is suspended ; as where he is transported for life under a judicial sentence ; or where he has entered some monastic institution ; or where he is banished.^ So, also, a temporary transportation of the hus- band enables the wife to sue as a feme sole during the term of transportation, but the husband's right revives upon his return.^ This exception in favor of the wife during the transportation of the husband, was first created in the case of Thomas of Weyland,^ who was abjured the realm for felony, — and after- wards, in the case of Sir Robert Belknap, one of the justices of the Court of Common Pleas, who was banished to Gascony until he should obtain the king's favor, and his wife. Lady Belknap, brought an action in the Common Pleas, which was sustained.* This action was commemorated by the lawyers of the day by a rhyming distich in Latin, which Lord Coke has handed down to us in his 1st Institute, to the following effect : — " Ecce modo mirum, quod foemina fert breve Regis, Non nominando virum conjunctum robore Legis."* At the common law, imprisonment for life would not, as it seems, so extinguish the legal existence of the husband, as to render the wife competent to contract and render herself liable as a feme sole.^ But in some of the States of the United • Ex parte Franks, 7 Bing. 762 ; Marsh v. Hutchinson, 2 Bos. & Pul. 231 ; Year-Book, 2 Henry IV. 7. ^ Spooner v. Brewster, 2 Car. & P. 36 ; Boggett v. Frier, 11 East, 304, note (Day's ed.) ; Ex parte Franks, 1 Moo. & S. 1. » Year-Book, 19 Edw. I. cited Co. Litt. 133 a. ' Year-Book, 2 Henry IV. 7. 5 Co. Litt. 132 6. « Boggett V. Frier, 11 East, 304; Co. Litt. 133 (note 209) ; Marsh v. 154 OP THE PARTIES TO A CONTRACT. [CHAP. II. States, the wife is enabled, by statute, to demand a divorce a vinculo matrimonii, if the husband be sentenced to imprison- ment for the term of life, or for seven years or more ; and his pardon will not revive his conjugal rights, after a divorce for such cause. 1 § 147. Second. Another exception is where the husband has been absent and unheard of for a period of seven years, in which case the law, presuming that he is dead, allows to the wife all the rights of a. feme sole to contract; at least, unless it be proved that he is still living.^ § 148. Third. Another exception is by the custom of London, by which a married woman may carry on a trade separately from her husband, and on her own account, and if the husband do not interfere to oppose it, she may, as to all the transactions connected with that business, be treated as a single woman. She may sue and be sued ; and although the husband must be made a nominal party to the suits, both by and against her, yet she is considered as the real party in interest, and the judgment does not affect the husband.^ § 149. Fourth. Another exception obtains in cases where a husband utterly abandons his wife, and leaves the country without making any provision for her support.^ Such an aban- Hutchinson, 2 Bos. & Pul. 231. But see Ex parte Fraiiks, 1 Moo. & S. 1 ; s. c. 7 Bing. 702, in which it was more recently decided, that the wife of a convicted felon, sentenced to transportation for fourteen years, but detained in confinement in the hulks, was liable to be made a bankrupt, if she traded on her own account. ' Mass. Rev. Stat. ch. 76, § 5. ^ Robinson v. Reynolds, 1 Aik. 174. ' Bac. Abr. Baron & Feme, M. ; Beard v. Webb, 2 Bos. & Pul. 93; Caudell v. Shaw, 4 T. R. 361. The same custom prevails in some of the United States, as in Pennsylvania and South Carolina. Burke v. Winkle, 2 S. & R. 1«9 ; Newbiggin v. Pillans, 2 Bay, 162 ; State v. Collins, 1 M'Cord, 355 ; McDowall v. Wood, 2 Nott & M'Cord, 242 ; City Council V. Van Roven, 2 M'Cord, 465 ; Mi-grath v. Robertson, 1 Des. 445. •• Abbot V. Bayley, 6 Pick. 93 ; 2 Story, Eq. § 1387 ; Story on Part. § 11 ; 2 Roper on Husband and Wife, ch. 18, § 4, p. 174, 175 ; Cecil V. Juxon, 1 Atk. 278; Lamphir -u. Creed, 8 Ves. 599; Com. Dig. Chan- cery, 2 M. 11. This rule has been extended by the Revised Statutes of Massachusetts, to all cases where a married woman shall come from any other State or country into this State without her husband, he having never CHAP. II.] MARRIED WOMEN. 155 donment will be implied, whenever the husband deserts the wife, and leaves the country with a declared intention not to return, or under circumstances which unequivocally indicate such an intention.^ Going to California to reside and never returning, lived -with her in Massachusetts. Gregory v. Paul, 15 Mass. 34. See also De Gaillon v. L'Aigle, 1 Bos. & Pul. 357 ; Walford v. Duchesse de Pienne, 2 Esp. 65i. ' Gregory v. Pierce, 4 Met. 478 ; Clark v. Valentine, 41 Ga. 143 (1870). Gregory v. Pierce was a case of assumpsit brought upon a promissory note made by a married woman (the defendant), who lived in Massachusetts, and whose husband left her and went to Ohio in 1818, and there remained till his death in 1832. Mr. Justice Shaw, in de- livering the judgment, said, " The principle is now to be considered as established in this State, as a necessary exception to the rule of the common law, placing a married woman under disability to contract or maintain a suit, that where the husband was never within the Commonwealth, or has gone beyond its jurisdiction, has whoUy renounced his marital rights and duties, and deserted his wife, she may make and take contracts, and sue and be sued in her own name, as a feme sole. It is an application of an old rule of the common law, which took away the disability of coverture ■when the husband was exiled or had abjured the realm. Gregory v. Paul, 15 Mass. 31 ; Abbot v. Bayley, 6 Pick. 89. In the latter case, it was held, that in this respect, the residence of the husband in another State of the United States, was equivalent to a residence in any foreign state ; he being equally beyond the operation of the laws of the Commonwealth, and the jurisdiction of its courts. But, to accomplish this change in the civil rela- tions of the wife, the desertion by the husband must be absolute and com- plete ; it must be a voluntary separation from and abandonment of the wife, embracing both the fact and intent of the husband to renounce de facto, and as far as he can do it, the marital relation, and leave his wife to act as a. feme sole. Such is the renunciation, coupled with a, continued absence in a foreign state or country, which is held to operate like an abjuration of the realm. In the present case, the court are of opinion, that the circumstances stated are not sufficient to enable the court to determine whether the hus- band had so deserted his wife, when the note in question was given. The only facts stated are, that he was insolvent when he went away ; that he was absent, residing seven or eight years in Ohio ; that he made no provision for his wife and her family, after 1816 ; and that she supported herself and them by her own labor. But it does not appear that he was of ability to provide for her ; that he was not in correspondence with her ; that he de- clared any intention to desert her, when he left, or manifested any such in- tention afterwards ; or that he was not necessarily detained by sickness, imprisonment, or poverty. The fact of desertion by a husband may be proved by a great variety of circumstances, leading with more or less prob- ability to that conclusion ; as, for instance, leaving his wife, with a declared intention never to return ; marrying another woman, or otherwise living in 156 OF THE PARTIES TO A CONTRACT. [CHAP. II. enables the wife to sue and be sued as a feme sole} So, also, when the wife is compelled by the cruelty of the husband to flee his house, and she quits the country, and he provides no means for her support, and maintains no relation with her, she will be entitled to sue and be sued as a feme sole? In the United States this rule, also, would apply to cases where the wife was forced to leave the husband and live in a different State,^ the States being considered in view of this rule as for- eign countries. The presumption in all such cases, however, is that the husband will return, in case he have ever resided in the country ; but it may be rebutted, — thereal intent of the husband being the criterion of the right of the wife to contract as a feme sole. This exception is but an extension or new application of the old common-law rule, that whenever the husband was banished or had abjured the realm, his wife could contract as a feme sole.^ adultery, abroad ; absence for a long time, not being necessarily detained by his occupation or business, or otherwise ; making no provision for his wife, or wife and family, being of ability to do so ; providing no dwelling or home for her, or prohibiting her from following him ; and many other cir- cumstances tending to prove the absolute desertion before described. The general rule being that a married woman cannot make a contract or be sued, the burden of proof is upon the plaintiff to show that she is within the ex- ception. Ill an agreed statement of facts, sucli fact of desertion, using this term in the technical sense above expressed, as a total renunciation of the marriage relation, must be agreed to, or such other facts must be agreed to, as to render the conclusion inevitable. If the facts stated are all that can be proved in the case, the court would consider that the plaintiff had not sustained the burden of proof, and therefore could not have judgment. See Williamson i'. Dawes, 9 Bing. 292 ; Strctton v. Busnach, 4 Moo. & S. 678 ; s. c. 1 Bing. N". C. 139 ; Bean v. Morgan, 4 iM'Cord, 148. But apprehending that the statement may have been agreed to, under a misap- prehension of the legal effect of the facts stated, and that other evidence may exist, the court are of opinion, and do order, that the agreed statement of facts be discharged, and a trial had at the bar of the Court of Common Pleas." See also Bean u. Morgan, 4 M'Cord, 148 ; and 2 Kent, Comm. 157. ' Osborn v. Nelson, 69 Barb. 381 (1871) ; Chapman v. Lemon, 11 How Pr. 235. « Gregory v. Paul, 15 Mass. 31 ; M' Arthur «. Bloom, 2 Duer, 151. ' Abbot u. Bayley, 6 Pick. 93. • Co. Litt. 132 h, 133 a; ante, § 86. CHAP. II.] MARRIED WOMEN. 157 § 150. Connected with this exception is another, growing out of it, which obtains when the husband is an alien or foreigner, and has never lived in the country ; in which case, he is pre- sumed to have no intention to come to his wife, and she is, therefore, enabled to contract as a feme sole.'^ But if he have ever resided in this country, the exception would not obtain.^ § 151. Fifth. Another and partial exception is where a hus- band and wife are divorced a mensa et thoro (by which the marriage is not dissolved but may be re-established by the agreement of both parties), in which case the disability of the wife to contract is partially removed ; and during such divorce she may sue her husband for the alimony decreed to her by the court, and may also bring suit in the ecclesiastical courts for any personal injury.^ § 152. The well-settled rule of the common law, which now obtains in the English courts,, is, that coverture is a good plea, notwithstanding a divorce a mensa et thoro, and that no mar- ried woman can either sue or be sued as a feme sole, though living apart from her husband, and receiving an ample allow- ance for her separate maintenance, unless the husband be under some civil disability.* But the rule in some parts of this country differs from that of the common law of England, and allows the wife, during a divorce a mensa et thoro, to main- tain suits, either for injuries done to her person or property, or upon contracts express or implied arising after the divorce, without joinder of the husband.^ 1 Walford 0. Duchesse de Pienne, 2 Esp. 554 ; De Gaillon v. L'Aigle, 1 Bos. & Pul. 357. ° Kay V. Duchesse de Pienne, 3 Camp. 123 ; Gregory v. Paul, 15 Mass. 31 ; Robinson v. Reynolds, 1 Aik. 174. ' Motteram v. Motteram, 3 Bulst. 264 ; Chamberlain v. Hewitson, 1 Ld. Raym. 73 ; s. o. 5 Mod. 71 ; 2 Dane's Abr. 307. * Hatchett v. Baddeley, 2 W. Bl. 1082 ; Lean u. Schutz, 2 W. Bl. 1195 ; Hyde v. Price, 3 Ves. 443 ; Marshall v. Button, 8 T. R. 546. This rule, after many contradictory decisions, was finally settled in the last cited case, and is supported by all the modern cases. Lewis v. Lee, 3 B. & C. 291. " Dean v. Richmond, 6 Pick. 467 ; Abbot v. Bayley, 6 Pick. 89 ; 2 Kent, Comm. 157. See Revised Statutes of Massachusetts, part 2, tit. 7, ch. 77, as to the power of a married woman to contract, &o. Pierce v. Burn- 158 OP THE PARTIES TO A CONTRACT. [CHAP. II. § 153. But, although, during her coverture a married woman cannot render herself personally responsible on her contracts, yet if a contract be made with her on good consideration, during the marriage, the husband may, if he please, take advantage of it, and recover in an action upon it, making her a co-plaintiff in the suit. So, also, in sucli a case, if the husband do not elect to sue thereupon, her right to sue separately thereon remains merely in abeyance during his life, and survives to her personally upon his death. ^ Thus, where the wife had undertaken to cure a wound for the sum of ^10, and the patient would not pay the agreed sum after he was cure^ ; she and her husband brought suit against him, and recovered judg- ment, and a writ of error being brought thereon in the Exchequer Chamber, on the ground that a married woman could not sue, the court said, that, " being grounded in a prom- ise made to the wife upon a matter arising upon her skill, and on a performance to be made to the wife, she is the cause of the action, and so the action brought in both their names is well enough, and such action shall survive to the wife," — wherefore the judgment was approved.^ All the earnings of the wife during her coverture, and all gifts to her, are in the same predicament. So, also, upon all clioses in action, such as a bond, bill of exchange, or promissory note, given to her during her separate life, the husband may either sue alone, or make her a co-plaintiff, and his indorsement will make such bill or ham, 4 Met. 303. Mr. Chancellor Kent, in his Commentaries, vol. ii. pt. iv. lect. 28, p. 158, speaking of this rule says, "This is the more reasonable doctrine ; and it seems to be indispensable that the wife should have a capacity to act for herself, and the means to protect herself, while she is withdrawn, by a judicial decree, from the dominion and protection of her husband. The court of Massachusetts has intentionally barred any inference that the same consequence would follow if the husband was imprisoned by law for a public offence or crime. But such a case might be equivalent to an abandonment of the wife, and. ground for a divorce a meiisa et thoro ; and there is as much reason and necessity in that case as in any other, that the wife should be competent to contract, and to protect the earnings of her own industry." ' Dougherty «. Snyder, 15 S. & K. 84; Ankerstein v. Clarke, 4 T. K. 616 ; Gaters v. Madeley, 6 M. & W. 425 ; ante, § 144. ' Brashford v. Buckingham, Cro. Jao. 77. CHAP. II.J MARRIED WOMEN. 159 note negotiable.^ But if, before he reduces such chose in action to his possession, she die, he can only sue thereupon as her administrator, and not personally.^ So, also, if he die before reducing it to possession, it becomes the sole property of the wife, and she can sue upon it alone.^ Again, if he should join her name with his own as co-plaintiff, and bring an action thereupon, and should die after judgment, the wife would be entitled to the benefit of the chose in action, as the judgment would survive to her.* § 154. Since, therefore, the husband, by reducing his wife's choses in action to his possession during his life, can acquire a personal right thereto, so as to prevent the survivorship of the remedy to her, it becomes necessary to consider what con- stitutes a reduction to possession. And in this respect the rule is, that the husband must appropriate them to himself by some precise and specific act evidencing a clear disagreement ' Mason v. Morgan, 2 Ad. & El. 30 ; s. c. 4 Nev. & Man. 46. = Day B. Pargrave, cited in Philliskirk v. Pluckwell, 2 M. & S. 393 ; 1 Roll. Abr. 345. ' Woodman v. Chapman, 1 Camp. 189 ; Ankerstein v. Clarke, 4 T. R. 616; Philliskirk v. Pluckwell, 2 M. & S. 393; Swann v. Gauge, 1 HayTv. (N. C.) 3 ; Brown v. Langford, 3 Bibb, 497 ; Richards v. Richards, 2 B. & Ad. 447; Ryland v. Smith, 1 Myl. & Cr. 53; Gaters v. Madeley, 6 M. & W. 423. In this case Baron Parke said: "This is an action on a promissory note — an instrument on which no one can sue unless he was originally a party to it, or has become entitled to it under one who was. A promissory note is not a personal chattel in possession, but a chose in action of a peculiar nature ; but which has indeed been made by statute assignable and transferable according to the custom of merchants, like a bill of exchange; yet still it is a chose in action, and nothing more. When a chose in action, such as a bond or note, is given to a feme covert, the husband may elect to let his wife have the benefit of it, or if he thinks proper, he may take it himself; and if, in this case, the husband had in his lifetime brought an action upon this note in his own name, that would have amounted to an election to take it himself, and to an expression of dissent on his part to his wife's having any interest in it. On the other hand, he may, if he pleases, leave it as it is, and in that case the remedy on it survives to the wife, or he may, according to the decision in Philliskirk v. Pluckwell, 2 M. & S. 393, adopt another course, and join her name with his own ; and in that case, if he should die after judgment, the wife would be entitled to the benefit of the note, as the judgment would survive to her." ' Ibid. • 160 OP THE PARTIES TO A CONTEACT. [CHAP. H. to the further continuing of a separate interest in the wife.i Thus, if a husband receive the money on a promissory note, or sue alone and recover upon a bond made to his wife, he will have reduced it to his possession.^ But the reception of interest on a chose in action, or even of a partial payment thereof, will only be a reduction to his possession of the por- tion received, and the remainder will survive to the wife.^ So, also, possession by the husband in the capacity of executor or trustee is not such a reduction to possession as to destroy her right.* § 155. With these exceptions a married woman is incapacitated legally to enter into any contract, so as to bind herself person- ally, or to sue or be sued in her own name during her cover- ture.^ Her contracts are only binding upon her through his consent and ratification, and even then she cannot sue or be sued alone upon them. Tims, for instance, the common con- tracts which she makes with tradesmen to supply the family with necessaries, only bind the husband upon the presumption that he has empowered her to act as his agent, which may be rebutted and negatived by evidence.^ § 156. But connected with the wife's disabilities, and grow- ing directly out of them, are certain privileges and immunities, to counterbalance, in some measure, the disadvantages imposed upon her by her coverture. She is not personally liable upon her contracts, and can throw the whole burden of those expenses for which she would otherwise be liable, upon her husband, if they can be recovered of him at law ; and if they cannot be recovered of liim, she may utterly avoid them. § 157. This brings us to the consideration of those contracts entered into by the wife, for which the law makes the husband ' Scarpellini v. Atclieson, 14 Law J. (n. s.) Q. B. 333; 8. c. 7 Q. B. 864; Nash v. Nash, 2 Madd. 133; Ryland v. Smith, 1 Myl. & Cr. 63; Gaters v. Madeley, 6 M. & W. 425 ; Bendix v. Wakeman, 12 M. & W. 97. See Fleet v. Perrins, Law R. 4 Q. B. 500 (1869). 2 Ryland v. Smith, 1 j\Iyl. & Cr. 53. = Nash V. Nash, 2 JNIadd. 133 ; Hart v. Stevens, 14 Law J. (n. s.) Q. B. 148, cited Smith on Contracts, p. 223, note (6) ; s. c. 6 Q. B. 938. * Baker v. Hall, 12 Ves. 497. " Farrar v. Bcssey, 24 Vt. 89. " Bao. Abr. Baron & Feme, H. 3. CHAP. II.] MARRIED WOMEN. 161 responsible. 1 The general rule is, that the wife can only bind the husband by her contract as his agent, acting under his authority or with his coucui'rence, either express or implied.^ In cases where the consent of the husband is expressly given, little dispute can occur, and the question is solely for the jury. The great proportion of cases where the question whether the husband has authorized or assented to the contract of the wife arises, are where the authorization is to be implied from the circumstances. The general presumption is, where the wife is living with the husband, that she has authority to bind him for the payment of such tilings as are suitable to the station which he permits her to assume ; the presumption, however, may be overturned by showing want of authority in the wife.^ § 158. And in the first place, as to the liability of the husband for 7ieeessaries furnished to his wife. The consideration of this liability divides itself into two heads : first, when the contract is made while the husband and wife are living together ; and, second, when it is made while they are living apart. § 159. The rule applicable to the first class of cases is, that so long as the husband and wife cohabit, and he is apparently sustaining the marital relation, he is bound to supply her with necessaries suitable to her station ; and this, too, notwithstand- ing any agreement made between them.* If he omit to do so, the law by an implication from his duty, creates an obligation on his part to pay for all necessaries which the wife purchases for herself. This liability of the husband is generally treated as growing out of his implied assent, but it would seem more properly to stand upon the ground that it is a direct right on her part created by the marital relation. At all events, the general rules of agency do not apply to these cases, for the husband cannot avoid his liability for necessaries furnished to ' It 13 more convenient to consider this subject here than to transfer it to the chapter on Agents. 2 Montague v. Benedict, 3 B. & C. 685 ; Seaton v. Benedict, 5 Bing. 30 ; Mizen v. Pick, 3 M. & W. 481 ; Eumney v. Keyes, 7 N. H. 571. 3 Jolly V. Rees, 15 C. B. (n. s.) 628 (186i). See Ryan v. Nolan, Irish R. 3 C. L. 319 (1869) ; Shoolbred v. Baker, 16 L. T. (n. s.) 359 (1867). * Johnston V. Snmner, 3 H. & N. 261 (1858). VOL. I. 11 162 OP THE PARTIES TO A CONTRACT. [CHAP. II. his wife during cohabitation, by a general prohibition to all persons, or even by a special prohibition to an individual tradesman, from contracting therefor with his wife.^ A for- tiori, the mere fact of his ignorance would be of no protection to him against such contract. Nor does the fact that the tradesman credits only the wife make any difference, for even although he should not know she was married, the husband would be bound. ^ So also, although the husband be a lunatic and confined in an asylum, his wife has still authority to pledge his credit for necessa,ries supplied to her, which is avowedly an obligation not growing out of assent. ^ § 160. The responsibilities of a husband are not solely those of contract ; they stand upon a higher ground, for marriage is not simply a contract, but a civil and religious status, carrying with it obligations and duties of a peculiar character. An agreement to marry is purely a contract, but it was reserved for Protestantism and the common law to treat the marriage itself as a contract, and the relations and duties of husband and wife as founded solely upon contract. In the Roman Catholic church, it is considered as a religious vow, and is viewed as a sacrament. Were it only a contract, a breach of it, by either party, would entitle the other to treat it as null, and to avoid all obligations arising therefrom, — and by mutual agreement the bond of matrimony, might, at any time, be loosed. But neither by the common nor statute law of England or America, are these common incidents of contracts recognized as belonging to the relation of marriage. Divorce in England formerly must have been by act of Parliament,'' and in xVmerica, ' Bentley v. Griffin, 5 Taunt. 356 ; Rotoh t). INIiles, 2 Conn. 638 ; Emery v. Neighbour, 2 lialst. 142 ; Dixon v. Hurrell, 8 C. & P. 717 ; Tebbets v. Hap- good, 34 N. H. 420. ^ Cunningham v. Irwin, 7 S. & R. 247 ; Furlong v. Hysom, 35 Me. 332. •" Read V. Legard, 6 Exch. 642 ; 4 Eng. Law & Eq. 628. But the fact that the husband is a lunatic can give the wife no greater authority to pledge her husband's credit than she has in ordinary cases. Richardson v. Du Bois, Law R. 5 Q. B. 61 (1.S70) ; s. c. 10 B. & S. 830. "" Bat divorces are now decri'cd by court in England ; and a husband, after a dissolution of the marriage by the Divorce Court, under St. 20 & 21 Vict. ch. 85, is not liable for a tort committed by the wife during coverture Capel V. PoweU, 17 C. B. (n. s.) 743. CHAP. II.] MARRIED WOMEN. 163 although more freely admitted than in England, and for a greater variety of causes, it requires a judicial decree.^ The doctrines relating to marriage, as thus generally stated by Baron Alderson, in a late case, evidently do not stand solely on the ground of contract : ^ " By the marriage contract, entered into by the parties when in their sound senses, the husband contracts a relation which gives certain rights to his wife, and it is sufficient for iis to say, that one of them is, that she is entitled to be supported according to the estate and condition of her husband. If, through the omission or misconduct of her husband, she is compelled to procure the necessary articles for herself, — as, for instance, where he drives her out of his house, or brings improper persons into his house, so that any respectable woman must leave it, he does, according to the cases, give her authority to pledge his credit for her necessary suste- nance elsewhere ; that is, he has given her such authority by force of the original relation between husband and wife. So, where he omits to furnish her with necessaries while living with him, she may procure them elsewhere, as otherwise she might perish. Here the husband being lunatic, and, by God's visitation, unable to provide her with necessaries, she surely must be considered as in a situation where a neighbor may furnish her with them ; and then, as, by the relation which he has originally contracted, the husband should have provided her with them himself, he becomes liable to the person who does it for. him." § 161. Considering the liability of the husband as one grow- ing out of the marital relation, the limits of his liability are evident. Whenever he has performed that duty, he is legally absolved from other responsibilities. Where, therefore, he pays his wife an adequate allowance to enable her to furnish herself with necessaries ; ^ or wherever he actually furnishes • The same view is taken by Mr. Bishop in his admirable work on Mar- riage and Divorce (§ 29 to 44), to which we would refer the reader for a further discussion of the question, and a full citation of the authorities bear- ing upon it. 2 Read v. Legard, 15 Jur. 496 ; 6 Exch. 642 ; 4 Eng. Law & Eq. 628. ' Kimball B. Keyes, 11 Wend. 33; Mott u. Comstock, 8 Wend. 544; Baker ». Barney, 8 Johns. 72 ; Cany v. Patton, 2 Ashm. 140. 164 OP THE PAETIES TO A CONTRACT. [CHAP. II. sufficient " necessaries " ^ to her ; or wherever she violates her duties as wife, by abandoning him without cause,^ or by eloping with an adulterer, — he is, as we shall see, entirely absolved from his liability on her contracts, even for " necessaries." § 162. The husband is, however, at law, only liable for nec- essaries, and not for money lent the wife without his knowl- edge. ^ Yet, in equity, if the circumstances be such as would render the husband liable for the necessaries purchased there- with, he will be liable for money borrowed for such purpose, provided it be so applied, and not otherwise.* § 163. In law, the term " necessaries " is understood to mean not only articles which are of absolute necessity, but also such things as are suitable to the fortune and condition of the person to whom they are supplied.^ But it is not sufficient, that the articles be of a proper kind and quality ; they must also be of a proper quantity, and not be excessive in number and amount.^ If the wife be already abundantly supplied, additional goods, though of a proper kind and quality, would not be considered "necessaries."^ It becomes, therefore, the duty of a trades- man not only to ascertain whether the goods he furnishes be suitable to the condition and rank of the wife, but whether she be already sufficiently provided with such goods.^ • Kimball v. Keves, 11 Wend. 33; Mott v. Comstock, 8 AVend. 644; Baker v. Barney, 8 Johns. 72 ; Cany v. Patton, 2 Ashm. 140. And see Boardman v. Silver, 100 Mass. 330 (1868). ^ Hunter v. Boucher, 3 Pick. 289 ; Johnston v. Sumner, 3 H. & N. 261 (is.is) ; post, § 72. ^ Stone i\ Maenair, 1 Moore, 126; s. c. 7 Taunton, 432; Marlow v. Pitfeild, 1 P. Wms. 558 ; Stephenson v. Hardy, 3 Wilson, 38S ; Walker v. Simpson, 7 Watts & Serg. 83 ; Grindell v. Godmond, 5 Ad. & El. 755 ; Earle v. Peale, 1 Salk. 387 ; Darby v. Boucher, 1 Salk. 279 ; Franklin v. Foster, 20 Mich. 75 (1870) ; Knox v. Bushell, 3 C, B. (x. s.) 334. * Earle v. Peale, 1 Salk. 387 ; Harris v. Lee, 1 P. Wms. 66 ; Marlow v. Pitfeild, 1 P. Wms. 658; ]\lay u. Skey, 16 Sim. 588; West v. Wheeler, 2 Car. & Kir. 714. ° Seiiton u. Benedict, 5 Bing. 28; s. c. 2 Moo. & P. 66; Montague v. Benedict, 3 B. & C. 631 ; s. c. Montague v. Baron, 5 Dowl. & Ryl. 532. 6 Seaton v. Benedict, 5 Bing. 28 ; s. c. 2 Moo. & P. 66 ; Atkins v. Cur- wood, 7 C. & P. 756 ; Freestone v. Butcher, 9 C. & P. 643. See Furlong u. Hysoni, 35 Me. 833; Eames u. Sweetser, 101 Mass. 78 (1869). ' Reneaux v. Teakle, 8 Exch. 680 ; 20 Eng. Law & Eq. 346. " Montague v. Benedict, 8 B. & C. 631, 638. There is a pleasant CHAP. II.J MARRIED WOMEN. 165 § 164. Necessary medical advice and attendance are within the rule,^ unless the credit is given directly to the wife,^ and also the funeral expenses of the wife, so that the husband, if he neglect to provide them, is liable to any one volunteering to perform such reasonable duty.^ But fees of counsel and attor- neys furnished to the wife on a hill for divorce, or charged in defending her against a libel of divorce by the husband, are not considered as necessaries.* Bovill, C. J., thus states the compass of the wife's authority to pledge her husband's credit : " The domestic arrangements of the family being usually left to the control of the wife, her authority extends to all those matters which fall within her department ; as, for instance, the supply of provisions for the house, clothing for herself and children, and things of that sort. Or, if the wife, with the concurrence of her husband, carries on a separate trade, goods supplied to her for the purposes of tliat trade would fall within passage in the opinion of Mr. Justice Hyde, dissenting from the judgment of the court in Manby v. Soott, 1 Sid. 109, reported in 1 Mod. 128, which I cannot refrain from giving place here, that the student, weary with knitting his brows over the dry text, may here relax into a smile at the judge's quaint representation of a wife's occupations. " Admit that in truth the wife wants necessary apparel, woollen and linen, and thereupon she goes into Paternos-' ter Row, to a mercer, and takes up stuff, and makes a contract for necessary clothes ; thence goes into Cheapside, and takes up linen there in like man- ner : and also goes into a third street, and fits herself with ribbons, and other necessaries suitable to her occasions, and her husband's degree. This done, she goes away, disposes of the commodities to furnish herself with money to go abroad to Hyde Park, to score at gleeke, or the like. Next morning this good woman goes abroad into some other part of London, makes her neces- sity and want of apparel known, and takes more wares upon trust, as she had done the day before ; after the same manner she goes to a third and fourth place, and makes new contracts for fresh wares, none of these trades- men knowing or imagining she was formerly furnished by the other, and each of them seeing and believing her to have great need of the commodities sold her ; shall not the husband be chargeable and liable to pay every one of these, if the contract of the wife doth bind him ? " • Wood 0. O'Kelley, 8 Cush. 406. .But the dreams and revelations or visions of a person in a mesmeric sleep are held in this case not to be necessaries. " Carters. Howard, 39 Vt. 106 (1866). » Ambrose u. Kerrison, 10 C. B. 776 ; 4 Eng. Law & Eq. 361 ; Jenkins ». Tucker, 1 H. Bl. 90. * Coffin V. Dunham, 8 Cush. 404; Wing v. Hurlburt, 15 Vt. 607; Shelton V. Pendleton, 18 Conn. 417. See post, § 176. 1C6 OF THE PARTIES TO A CONTRACT. [CHAP. II. the same category. . . . Even that limited authority must, how- ever, be subject to this condition, that the goods be suitable to the position which the husband allows his wife to assume, or to the trade which he allows her to carry on."i But the wife's authority in the management of household aifairs is more extensive when the husband is absent from home for long periods of time than when he remains at home in the manage- ment of his business.2 § 165. Where a married woman, living with her husband, carries on trade, his liability in her contracts and debts, in relation to the trade, is one purely of agency or partnership, and depends upon his assent and authorization. If he share in the profits, or they are applied to the maintenance of the family, the law implies an authority by the wife to bind him in all necessary acts in the business.^ So, also, her autiiority to draw or indorse bills, sign notes, and make purchases, would be implied, whenever it necessarily belonged to the business, or whenever it can be shown that it was her habit to do such acts, and that her husband had constantly assented thereto.^ And her indorsement by his consent of a note made payable to her during coverture, passes a good title to the indorsee.^ But her authority to draw a bill or note cannot be inferred from the mere fact that she was known to the husband to be engaged in carrying on business, and that the note was given in the course of such business ; and such a note would not be available against the husband even in the hands of a hond fide indorsee,'' without circumstances showing authorization by him. Wherever notes or bills are drawn by a wife, she acts as 1 Phillipaon v. Ilavter, Law R. 6 C. P. 3S (1870). See Ruddock u, Mai-sli, 1 H. & N. (iOl (1857). In this case the wife of a laborer bad in- curred a debt for provisions for the use of the family ; and the husband was held liable, though he had supplied the wife with money to keep the house. 2 jNIuador v. Page, 39 Vt. 306 (1866). 3 Petty V. Anderson, 2 C. & P. 38 ; Clifford «. Burton, 1 Bing. 199. But see Smallpieee r. Dawes, 7 C. & P. 40. * Prestwiek u. Marshall, 7 Bing. 665 ; Cotes v. Davis, 1 Camp. "185 ; Barlow v. Bi^hllp, 1 East, 432. ^ Stevens «. Beals, 10 Gush. 291, denying Savage v. King, 5 Shepley (17 Me.), 301, contra. <> Reakert v. Sanford, 5 Watts & Serg. 164. CHAP. II.] MARRIED WOMEN. 167 the agent of the husband, and the note or bill should exhibit her agency, — otherwise, as in all other cases of agency, she alone would be bound, and her liability is nothing alone.^ The husband might, however, by subsequently assenting to a bill accepted by his wife, render himself personally liable.^ § 166. In the next place, as to the liability of the husband, where 'the articles supplied to the wife are not necessaries. Here there is no legal obligation growing out of the marital relation, as in the case of " necessaries," — and the contracts of the wife bind the husband only on the ground of her implied authority as his agent. And in such case, the presumption of law is, that the husband did not authorize or assent to her contract. It becomes, therefore, incumbent ou the tradesman supplying a married woman with articles which are not neces- saries, to assure himself that she is authorized thereto by her husband, since, in an action for their price, he will be obliged to prove affirmatively, that the debt was contracted on the express or implied authority of the husband. ^ And it is not for the husband to prove that he has given notice to the trades- man not to trust his wife, but for the tradesman to show a state of facts which unequivocally imply that he authorized her to make the contract, or assented to it afterwards.* Nor does it make any difference in this respect, that the tradesman is deceived by the false appearance assumed by her into a belief that she had authority to buy, or that the goods were in the class of necessaries, if by cautious inquiries he might have ascertained her real condition ; for if the goods be not actually necessaries, and the husband have not authorized the purchase, he is not liable, although the tradesman was deceived.^ It is, however, the office of a jury to decide, from the facts of each ' Minard v. Mead, 7 Wend. 68. See Gulick v. Grover, 4 Vroom, 463 (1868). = Lindus v. Bradw^ell, 5 C. B. 583. '■' Montague v. Benedict, 3 B. & C. 636 ; Atkins v. Curwood, 7 C. & P. 760 ; Montague v. Espinasse, 1 C. & P. 357 ; Waitbman v. Wakefield, 1 Camp. 120 ; Reid v. Teakle, 13 C. B. 627 ; 24 Eng. Law & Eq. 332. ' Spreadburyu. Chapman, 8 C. & P. 371; Mizen v. Pick, 3 M. & W. 481; Atkins v. Curwood, 7 C. & P. 756; Barnes u. Jarrett, 2 Jur. 988; Keakert v. Sanford, 5 Watts & Serg. 164. ■- Waifhman v. Wakefield, 1 Camp. 120; Atkins v. Curwood, 7 C. & P. 766 ; Wilson v. Burr, 25 Wend. 386. 168 OF THE PARTIES TO A COlvTRACT. [CHAP. II. case, whether they indicate an assent by the husband to the contract of the wife.^ § 167. There are, however, certain presumptions of his assent, which arise in law ; as, for instance, in cases wliere orders are given by her in those departments of her husband's household, which are under her superintendence ; provided such orders be not excessive or extravagant in kind or quan- tity.^ Again, the fact that the husband sees the wife use and wear articles which are not " necessaries," and which he knows that she has bought, without disapprobation, creates a strong presumption of his assent ; although if he should express his disapprobation, and a fortiori, if he should have refused to pay for similar articles before, it would be otherwise.^ Again, the same presumption of assent arises as to goods wliich the husband permits her to receive at the house, knowing that they are purchased by her, while they are living together,* — and as to her contracts for the hire of servants.^ These pre- sumptions, however, may be rebutted, — as, for instance, by proof that the wife has a separate income, in which case the knowledge of the husband that she had bought certain goods, and his permitting her to use or wear them, without expressing any disapprobation, would afford no indication of his assent to become personally liable therefor, since he may fairly suppose them to be purchased out of her own funds.i^ In all such cases, however, his safest course is to return the articles to the tradesman when he can do so." § 168. Cohabitation furnishes also a strong presumption of the assent of the husband, where the articles supplied are not necessaries. This affords, however, merely a presumption, ' Montague v. Benedict, 3 B. & C. 635 ; Smallpiece v. Dawes, 7 C. & P. 40; Bcntlcy v. Griffin, 5 Taunt. 356; Holt v. Brien, 4 B. & Al. 255; Manby r. Scott, 1 Sid. 121 ; Freestone v. Butcher, 9 C. & P. 643. ^ Ibid. ; Freestone v. Butclier, 9 C. & P. 643. = Atkins V. Curwood, 7 C. & P. 756. See Smith v. Allen, 1 Lansing, 101 (1869). ■■ Waithman v. Wakefield, 1 Camp. 120 ; Gilman v. Andrus, 28 Vt. 241 ; Emmett v. Norton, 8 C. & P. 506 ; Freestone v. Butcher, 9 C. & P. 643. ^ White V. Curler, 1 Esp. 200 ; s. c. 6 T. R. 176. ' Freestone v. Butcher, 9 C. & P. 643. ' Waithman v. Wakefield, 1 Camp. 120. CHAP. II'.] MARRIED WOMEN. 169 which may be rebutted by proof of the contrary.^ Thus, if the evidence show that credit was given solely to the wife, or that her husband was wholly ignorant of the contract, or expressly forbade the tradesman to trust his wife, the presumption fails, and he will be absolved from liability .^ But so strong is the presumption of the assent of the husband to the wife's contract, created by cohabitation, that it has been decided, that if a man cohabit with a woman, holding her out to be his wife, he is liable for goods furnished to her during their cohabitation by a tradesman, who knew that they were not married.^ A forti- ori, this would be the case, if the tradesman suppose them to be married. Moreover, if the pretended husband go abroad and leave the woman he holds out as his wife at his residence, he would be liable to tradesmen for necessaries supplied to her during his absence in like manner as if she had actually been his wife ; but after his death his executor would be absolved.* Yet if the tradesman knew their intercourse to be adulterous, the ostensible husband would not be liable, without an express promise or authorization to him or his agent.^ After their separation, however, he would not be liable for necessaries furnished to her, unless she were actually his wife, or unless he continued to hold her out as such, either expressly or impliedly, by allowing her to remain in his house.^ ' Montague v. Benedict, 3 B. & C. 635; Watson v. Threlkeld, 2 Esp. 637; Robinson v. Nalion, 1 Camp. 245; Connerat u. Goldsmith, 6 Ga. 14; Blades v. Free, 9 B. & C. 169 ; Clifford v. Laton, 3 C. & P. 15. = Bentley v. Griffin, 5 Taunt. 356; Taylor v. Brittan, 1 C. & P. 16, note; Metcalfe v. Shaw, 3 Camp. 22; Holt v. Brien, 4 B. & Al. 255 ; Etherington v. Parrot, 2 Ld. Raym. 1006 ; s. c. 1 Salk. 118 ; Petty v. Anderson, 2 C. & P. 38; s. c. 3 Bing. 170; Bolton v. Prentice, 2 Str. 1214; Hardie v. Grant, 8 C. & P. 512; Spreadbury v. Chapman, 8 C. & P. 372. 3 Robinson v. Nahon, 1 Camp. 246 ; Watson v. Threlkeld, 2 Esp. 637 ; Ryan v. Sams, 12 Q. B. 460 ; Mace v. Cammel, Lofft, 782 ; Munro u. De Chemant, 4 Camp. 215 ; Blades v. Free, 9 B. & C. 167 ; Etherington v. Parrot, 1 Salk. 118, and Evans's note; Norwood v. Stevenson, Andr. 227; Bull. N. P. 136 ; Hudson v. Brent, cited 1 Bos. & Pul. 338. * Blades v. Free, 9 B. & C. 167. ' Norton u. Fazan, 1 Bos. & Pul. 226 ; Blades v. Free, 9 B. & C. 167. ' Munro v. De Chemant, 4 Camp. 215 ; Ryan v. Sams, 12 Q. B. 460. In this case, the defendant and Mrs. S., his mistress, lived together for years 170 OP THE PARTIES TO A CONTEACT. [CHAP. II. § 169. So, also, although the wife have been guilty of adultery, yet if the husband still continue to cohabit with her, he is liable for necessaries ; ^ for cohabitation after knowledge of adultery is a condonation of the offence.^ And if the husband, after his wife has left him adulterously, receive her back, he becomes again, liable on her contracts for neces- saries.3 § 170. Where the wife has been accustomed to purchase articles of a particular tradesman, whether they be necessaries or not, and the husband has paid for them without objection, it will be considered as sufficient evidence of an assent to her purchasing similar articles from him in future.^ And, in such a case, if the husband would avoid all liability on such con- as husband and wife, and occupied three houses successively ; at each time of their coming into a house the plaintiff was employed to do work and furnish materials, Mrs. S. as well as the defendant giving directions, and the defendant sanctioned her orders and paid the bills. The plaintiff knew that she was the defendant's mistress. While residing in tlie third house they separated; but Mrs. S., without the defendant's sanction, sent for the plaintiff to the house which she had not yet left, and ordered fittings up for a new house of her own. It was held, in an action for the last-mentioned goods, that it was a proper question for tlie jury, whether or not the defend- ant had given the plaintiff reason to believe that I\Irs. S. continued to be his agent, and that on their finding the aflirmative, the defendant was liable. Lord Denman, C. J., said, "In Munro v. De Chemant, 4 Camp. 215, it may be presraned that the parties had lived long separate ; and it is consist- ent v/ith the statement there that Lord EUenborough may have noticed that circumstance as important if the parties were not married, but told the jury, ' if you think they are proved to have been man and wife, the case will be different.' And the order there seems to have commenced a new account. Here the defendant sanctions orders to the plaintiff in the name of Stanley, while the person in question is living with him under that name ; and she afterwards gives orders to the plaintiff in the same name, circumstances apparently continuing unaltered. It would be unreasonable to expect more evidence in such a case." ' Norton v. Fazan, 1 Bos. & Pul. 226 ; Harris v. Morris, 4 Esp. 41 ; Watson V. Threlkeld, 2 Esp. 637; Blades v. Free, 9 B. & C. 167; Kobison V. Gosnold, Mod. 171. ' Quincy V. Quincy, 10 N. H. 272; Hall v. Hall, 4 N. H. 462. ^ Harris v. Morris, 4 Esp. 41. See also Rennick v. Ficklin, 3 B. Mon. 166. " Filmer v. Lynn, 4 Nev. & Man. 569; S. c. 1 Har. & W. 59; Gihnan V. Andrus, 28 Vt. 241 (1856). CHAP. II.] MARRIED WOMEN. 171 tracts, he must give notice to the tradesman not to supply his "wife with such goods in future, and then he will not be liable, if the tradesman do not observe the prohibition.^ And a notice to the servant of the tradesman is, in this respect, considered as equivalent to a notice to the tradesman himself.^ Yet if the prohibition be not brought home to the knowledge of either the tradesman, or his agent, or his servant, it will not bind him.^ § 171. If credit be given solely to the wife, the husband is not liable, although they live together, and although he see her in possession of the goods bought.* If, therefore, the tradesman should take her promissory note in payment, which would plainly indicate a reliance on her personal credit, the husband would not be liable for the price of the goods, nor on the note, nor need he prove that the goods were not " necessaries." ^ The question whether credit were given to the wife, is, however, generally a question of fact for the jury.6 § 172. Having now considered the responsibility of the hus- band on the wife's contract, while they live together, it remains for us to consider his liability in case of a separation from his wife. And, in the first place, where a separation has ensued in consequence of the adultery of the wife, whether it be by a decree of divorce, or by the voluntary elopement of the wife, or by expulsion from the house of the husband, he is not responsible, even for the necessaries of life furnished to ' Etherington v. Parrot, 1 Salk. 118 ; s. c. 2 Ld. Raym. 1006 ; Bolton v. Prentice, 2 Str. 1214; Hardie v. Grant, 8 C. & P. 512. A husband is not liable for goods supplied to his wife after notice to the plaintiff not to trust her, unless he has neglected his legal duty to provide for her. Keller ». Phillips, 39 N. Y. 351 (1868). = Ibid. ^ Manby u. Scott, 1 Sid. 127; Todd v. Stokes, 1 Ld. Raym. 444; Mon- tague u. Benedict, 3 B. & C. 635; Child «. Hardyman, 2 Str. 875; Lungworthy v. Hockmore, 1 Ld. Raym. 444, n. * Bentley b. Griffin, 5 Taunt. 356 ; Taylor v. Brittan, 1 C. & P. 16, u. , Dixon V. Hurrell, 8 C. & P. 717 ; Carter v. Howard, 39 Vt. 106 (1866) ; ante, § 167; Taylor u. Shelton, 30 Conn. 122 (1861). * Metcalfe v. Shaw, 3 Camp. 22. * Ibid. ; Harvey v. Norton, 4 Jur. 42 ; Bentley v. Griffin, 5 Taunt. 356. 172 OF THE PARTIES TO A CONTRACT. [CHAP. 11, her;i nor for medicine and medical attendance furnished, atliia wife's request, for his children remaining with her during a temporary absence from home, if his wife be living in adultery at the time, and thougli the plaintiff be ignorant of the fact.^ The law will not only not force a husband to support au adulterous wife, but it will not allow her to receive dower. Nor is it necessary in such cases to give notice not to trust the wife, if the fact that the wife and husband live permanently separate be known, inasmuch as it is considered the duty of the tradesman to make inquiries, before he trusts a woman under such circumstances.^ Indeed, the presumption is against the husband's liability when he lives apart from his wife, and if a tradesman supply her under such circumstances, the burden of proof is on him to show the liability of the husband.* § 173. But if the wife have lately left the husband, and the fact of their separation be not notorious, and not in fact known to the tradesman, a general notice would seem to be necessary to aljs(jlve the husband.^ And if the husband allow the wife to remain in his house, and live with her after she has been guilty of adultery, he is liable for necessaries supplied to her.^ Nor would he be absolved from liability by afterwards leaving the house for such cause, and abandoning her, unless the circumstances under which it is done be equivalent to notice ' Hethrington v. Graham, 6 Bing. 135 ; Hunt v. De Blaquiere, 5 Bing. 650 ; Hardie v. Grant, 8 C. & P. 512 ; Emmett v. Norton, 8 C. & P. 606 ; Govier v. Hancock, 6 T. R. 603 ; Norton v. Fazan, 1 Bos. & Pul. 226 ; Ozard v. Darnford, Selw. N. P. 221 ; Bird v. Jones, S Man. & Ryl. 121 ; Cox V. Kitchin, 1 Bos. & Pul. 338 ; Hunter v. Boucher, 3 Pick. 289; Cooper V. Lloyd, 6 C. B. (n. s.) 519 (1859). ^ Atkyns v. Pcarcc, 2 C. B. (n. s.) 763 (1857). ' Todd V. Stokes, 1 Ld. Raym. 441, 445 ; Hinton v. Hudson, Freem. 248. ^ Clifford V. Laton, 3 C. & P. 16 ; Mainwaring v. Leslie, 2 C. & P. 607; Bird v. Jones, 3 Man. & Ryl. 121; Edwards v. Towels, 5 Man. & Grang. 624; Hindley v. Westmeath, 6 B. & C. 200; Blowers u. Sturtevant, 4 Denio, 46; Walker v. Simpson, 7 Watts & Serg. 83; Cany V. Patton, 2 Ashm. 140. But see Rumney v. Keyes, 7 N. H. 671 ; Frost v. Willis, 13 Vt. 202. ^ Todd V. Stokes, 1 Ld. Raym. 444, 446 ; Hinton v. Hudson, Freem. 248. » Houliston V. Smyth, 3 Bing. 130. CHAP. n.J MARRIED WOMEN. 17S to the public that he leaves her because of her adultery. Thus, where a husband, on account of the adultery of his wife, left her with his two children in his house, without making any provision for her, and she continued to live there in adul- tery, it was held, that the husband was liable to the tradesman for necessaries supplied to her, unless the tradesman knew or ought to have known the circumstances under which she was living.! Where the wife and husband have separated on account of the adultery of the wife, she does not acquire the character of a feme sole, althoxigh her husband be not liable for her debts, and although there be no divorce ; and being a feme covert, the tradesman who supplies her even with neces- saries, does so at his own risk, and cannot recover their value from her.^ He has no security, therefore, but to exact pay- ment on the spot for all he sells her. " Norton v. Fazan, 1 Bos. & Pul. 226. In tliis case Chief Justice Eyre said: "If the defendant, in another action brought against him by some other tradesman, shall be able to establish the notoriety of his wife's situa- tion, he may defend himself. But as the case stands at present, this woman appears to have been living in a house in which she was placed by the de- fendant himself, together with two children bearing the husband's name, both of whom were born in wedlock. It is true that she had an adulterous intercourse with another man, but that was not proved to be known to this tradesman. If the defendant can bring it home to any other tradesman who shall be in the same situation as the present plaintiff, that he did know or ought to have known the circumstances under which the wife was living, the defendant may perhaps be able to prevent another verdict passing against him." Rawlyns v. Vandyke, 3 Esp. 250. 2 Hatchett v. Baddeley, 2 W. Bl. 1081. In this case, Blackstone, J., says: " It seems to be supposed, by the argument, that if the husband is not bound to pay this debt, it follows, that the wife may be compelled alone. But this is no legal consequence. I think, in the present case, that it cannot be recovered of either. And I see no hardship in a man's losing his money, that avows upon the record, that he furnished a coach to the wife of a player, whom he knew to have run away from her husband. If this were universally known to be law, it would be difficult for such women to gain credit ; and this would consequently reduce the number of wanderers. But be this as it may, I am clearly of opinion, that in no case can a.ny feme covert be sued alone, except in the known excepted cases of abjuration, exile, and the like ; where the husband is considered as dead, and the woman as a widow, or else as divorced a vinculo. Co. Litt. 133 a.'' See also the note of Mr. EUsley to this case, p. 1080 ; Compton v. Collinson, 1 H. Bl. 360 ; Hyde v. Price, 3 Ves. 443; Lean v. Schutz, 2 W. Bl. 1198, and note (d); Gilchrist 174 OP THE PARTIES TO A CONTRACT. [CHAP. II. § 174. When the separation is by act of law, as by a decree of divorce a mensd et thoro, the responsibility of the husband is governed by the terms and conditions of the decree. If the court refuse her alimony (as in cases of adultery in England), she cannot bind the husband for necessaries, under any cir- cumstances. If the court award her a certain sum as alimony, she has no power to bind him so long as that sum is paid, however insufficient it may be, in point of fact, to enable her to procure the things which are suitable to her rank and posi- tion ; the award of the court being conclusive on the question of adequacy. 1 Nor will a court of law enforce a contract for necessaries against the husband, although the decree awarding the alimony have ceased to be operative, provided it be renew- able on application.'^ Yet if the alimony be not paid, the wife is not bound to sue for the allowance, but the husband is liable in an action by the tradesman. ^ So, also, he is liable for nec- essaries provided for his wife pending a suit in the ecclesiasti- cal court, and before alimony is decreed, although a decree afterwards made should direct the alimony to be paid from a date before the time when the necessaries were provided.* So, also, if the separation arises from the lunacy of the husband, and he is confined in an asylum, he is nevertheless liable for the wife's support in the mean time.^ § 175. Where the separation between the two parties is not by act of law, but is bi/ deed, or by mutual agreement without deed, the wife cannot contract so as to bind the husband, pro- V. Brown, 4 T. E. 766 ; Marshall v. Rutton, 8 T. R. 545. The objections to such a doctrine, stated in Cox v. Kitcliin, 1 Bos. & Pul. 339 : " How is she to find the moans of supporting herself? How is she to procure even a joint of meat for her daily subsistence? " &c., are easily enough answered. She can pay for whatever she would purchase on the spot. Credit is not necessary. ' Willson V. Smyth, 1 B. & Ad. 801 ; Hunt v. De Blaquiere, 5 Bing. 550. = Willson V. Smyth, 1 B. & Ad. 801. ' Hunt V. De Blaquiere, 5 Bing. 550 ; Keegan v. Smith, 5 B. & C. 375 ; Willson V. Smyth, 1 B. & Ad. 801 ; Lewis v. Lee, 3 B. & C. 291; Baker t). Barney, 8 Johns. 72. * Keegan v. Smith, 5 B. & C. 375. ^ Read v. Legard, 6 Exch. 637; 4 Eng. Law & Eq. 523; Shaw v. Thompson, 16 Pick. 198. See Brookfield v. Allen, 6 Allen, 585 (1863). CHAP. II.J MARRIED WOMEN. 175 vided he allow her an ample and separate maintenance.^ And if the tradesman supply her even with necessaries on credit, he has no legal claim upon her, since she, being a feme covert, cannot be separately liable. Nor has he any legal claim there- for against the husband, since the latter is not liable for neces- saries supplied to her during such separation, if the fund which he allots to her be sufficient for her support and duly paid. The allowance being made by the husband and not by the court, a different rule prevails in the two cases ; and in order to avoid her contract for necessaries, it is incumbent on the husband to show, that the allowance is adequate under the circumstances, and that it has been actually paid. Nor will the wife's mere acquiescence prove its adequacy.^ But if she have an adequate sum allowed to her for her maintenance, it would not matter whether it were paid by the husband or by any other person.^ In either such case, whoever trusts her, trusts entirely to her honor,^ unless he had been accustomed to trust her before, and was not aware of the separation, it not having become a matter of notoriety." But, although it is incumbent upon the husband to prove the adequacy of the allowance and the due payment of it,^ because such proof is requisite to rebut the presumption of his liability for " neces- saries " furnished to his wife ; yet it is not necessary for him to give notice of the allowance to the tradesman, in order to ' Marshall v. Rutton, 8 T. R. 545 ; Hodgkinson v. Fletcher, 4 Camp. 70; Emmett w. Norton, 8 C. & P. 506; Corbett v. Poelnitz, 1 T. R. 6 ; Willson B. Smyth, 1 B. & Ad. 801 ; EUah v. Leigh, 5 T. R. 679 ; Chambers v. Donaldson, 9 East, 471 ; Lewis v. Lee, 3 B. & C. 291 ; Johnston v. Sum- ner, 3 H. & N. 261 (1858). See the able case of Cany ». Patton, 2 Ashm. 140, where this subject is treated with great acuteness. As to the authority of the wife to effect insurances in the long absence of the husband from home, see O'Connor v. Hartford Fire Ins. Co., 31 Wis. 160 (1872). ^ Nurse v. Craig, 2 N. R. 148; Hodgkinson v. Fletcher, 4 Camp. 70; Baker v. Barney, 8 Johns. 72; Holt v. Brien, 4 B. & Al. 252; Willson v. Smyth, 1 B. & Ad. 801 ; Dennys v. Sargeant, 6 C. & P. 419. = Litson V. Brown, 26 Ind. 489 (1866) ; Clifford v. Laton, Mood. & Malk. 102 ; s. c. 3 C. & P. 16. See Johnston v. Sumner, 3 H. & N. 261 (1858) ; Boardman v. Silver, 100 Mass. 330 (1868). * Todd V. Stokes, 1 Ld. Raym. 444 ; Nurse v. Craig, 2 N. R. 148. ^ Todd V. Stokes, 1 Ld. Raym. 444 ; Cany v. Patton, 2 Ashm. 140. 6 Hodgkinson v. Fletcher, 4 Camp. 70 ; Nurse v. Craig, 2 N. R. 148 ; Chitty on Cont. 173. 176 OP THE PARTIES TO A CONTRACT. [CHAP. II. absolve himself from liability. ^ Whether the allowance be sufficient is a question for the jury solely.^ But if the wife consent to live apart from the husband upon a certain fixed allowance, she cannot pledge his credit for necessaries, though the allowance prove inadequate.'' § 17G. There is, however, one exception to the rule, that the husband is not liable for the wife's debts during their sep- aration, provided there be a sufficient allowance granted her; which obtains in cases where she incurs expenses for the pur- pose of protecting herself, by articles of peace, against his vio- lence, for this is a diminution of her allowance by misconduct on his part, which ought not to enure to his benefit.* But he would not be liable to pay the bill of an attorney whom she employs to procure an indictment of him,^ — nor would he be liable to an attorney for professional services rendered to the wife, in forwarding a petition of divorce against him, nor in defending a petition for divorce instituted by him against lier for her fault. ^ Nor would he be responsilile for the counter- part of the deed of separation procured by the wife's trustee, except upon liis express promise.^ § 177. It was formerly thought to be an exception to the rule, that a married woman is not personally responsi- ble for her debts, where a married woman lives separate from her husband, and by fraudulently representing herself to ' Mizen v. Pick, 3 M. & W. 481 ; Turner v. Winter, Selw. N. P. 262. See also Clifford v. Laton, Mood. & Malk. 102; s. c. 3 C. & P. 16. ^ Hopkinson v. Fletcher, 4 f'amp. 70; Emmett v. Norton, 8 C. & P. 606; Pidgin v. Cram, 8 N. H. Sr.O ; Atkins v. Cm-wood, 7 C. & P. 756; Ewers r. Iliitton, 3 Esp. 2.05 ; Marshall v. Rutton, 8 T. R. 545. 3 Biffin V. Bignell, 7 H. & N. 877 (1862). •* Turner v. Uookes, 10 Ad. & El. 47. And see Shepherd v. Mackoul, 3 Camp. :126 ; Brown v. Ackroyd, 5 El. & Bl. 819 ; 34 Eng. Law & Eq. 214. * Grindell v. Godraond, 6 Ad. & El. 765 ; Ladd v. Lynn, 2 M. & W. 265. « Coffin V. Dunham, 8 Cush. 404; Wing v. Hurlburt, 15 Vt. 607; Shelton V. Pendleton, 18 Conn. 417 ; Shepherd v. Mackoul, 3 Camp. 326 ; Dorsey v. Goodenow, Wright, 120 ; Ray v. Addin, 50 N. H. 82. See, how- ever. Brown u. Ackroyd, 5 El. & Bl. 819 ; Mccrudy v. Taylor, 20 W. R. 2.32. Nor would the wife herself be liable, unless by express promise after the divorce. Wilson v. Burr, 25 Wend. 386. See Williams v. Fowler, M'Clel. & Younge, 269. ' Ladd V. Lynn, 2 M. & W. 265. CHAP. II.J • MARRIED WOMEN. 177 be a feme sole, obtains credit for goods supplied to her.i But whatever may be the rule of liability in an action of deceit, or in a court of equity, it is settled that an action on the contract cannot be maintained.^ § 178. A husband is not, however, bound for necessaries furnished to his wife, if she have left his house voluntarily with- out sufficient cause, although she do not go away with an adul- terer or in an adulterous manner ; ^ except for funeral expenses incurred in burying her in a suitable manner.* But if he turn her out of doors without sufficient cause,^ or if she leave him, because of ill-treatment,^ or because he has brought a prostitute into the house to live with him as his mistress,^ or for any ' Cox V. Kitchin, 1 Bos. & Pul. 338 ; Collins v. Eowed, 1 Bas. & Pul. N. K. 54. ' Liverpool Association v. Fairhurst, 9 Ex. 422 ; ante, § 111, note 3 ; post, § 180. ^ Horwood V. Heffer, 3 Taunt. 421 ; Child v. Hardyman, 2 Str. 876 ; Hindley v. The Marquis of Westmeath, 6 B. & C. 200 ; Mainwaring v. Leslie, 2 C. & P. 607 ; M'Cutchen v. M'Gahay, 11 Johns. 281 ; Walker v. Simpson, 7 Watts & Serg. 83 ; Brown v. Patton, 3 Humph. 136 ; Cany v. Patton, 2 Ashm. 140; Brown v. Mudgett, 40 Vt. 68 (1868). ■■ Bradshaw v. Beard, 12 C. B. (n. s.) 344 (1862). * Thompson v. Hervey, 4 Burr. 2177 ; Montague v. Benedict, 3 B. & C. 631; Lungworthy v. Hockmore, 1 Ld. Raym. 444; Etherington v. Parrot, 2 Ld. Raym. 1006 ; s. c. 1 Salk. 118 ; Hodges v. Hodges, 1 Esp. 441. * In Hodges v. Hodges, 1 Esp. 441, Lord Kenyon said that, where a wife's situation in her husband's house was rendered unsafe from his cruelty or iU-treatment, he should rule it to be equivalent to a turning her out of the house, and that the husband should be liable for necessaries furnished to her under those circumstances. Brown v. Ackroyd, 5 El. & B. 819 (1856). It was held in this case that when the wife was compelled, for her protection, to obtain a divorce a mensa et thoro, she might pledge his credit for the expenses of the proceeding. But the wife must show reasonable cause for entering the suit ; and neither a momentary ebullition of temper nor a threat of violence, not seriously made, afford this reasonable ground. See Rice o. Shepherd, 12 C. B. (n. s.) 332 (1862) ; Wilson v. Ford, Law R. 3 Exch. 63 (1868), a very interesting and important case. See also Johnston v. Manning, 12 Irish Com. Law, 148 (1860). ' Corbett v. Poelnitz, 1 T. R. 6. In Horwood v. Heffer, 3 Taunt. 421, it was held, that the fact that the husband kept a courtesan under his roof was not a sufficient cause to justify the wife in abandoning him. But in Houlis- ton V. Smyth, 3 Bing. 127, this case is severely reprobated. In this latter case, Best, C. J., said: " There is not the least pretence for this motion; VOL. 1. 12 178 OF THE PARTIES TO A CONTRACT. [CHAP. II. other adequate reason, he will be liable,^ and must support her according to his means and position in life,^ although the only ground on which a new trial can be asked for is a supposed misdi- rection on my part. I told the jury that if they were of opinion the defend- ant's wife had reasonable ground to apprehend personal violence, she was Justified in leaving her husband ; that the man who received and supported her under such circumstances acted like a Christian, and in a Christian country was entitled to compensation. I am still of that opinion, and it is warranted even by the case of Horwood v. Heifer; for Lawrence, J., says, ' You did not state any apprehension of her personal safety ; ' from which it may be inferred that if evidence had been adduced of such apprehension, the decision of the court would have been the other way. But a woman is not bound to wait till actual violence is committed, and if she has reasonable ground for apprehending danger, may fly from the presence of her husband. It has been objected, that the establishment of this principle may lead fanciful women to quit their homes without sufficient reason. The apprehen- sion, however, is not to be merely such as a fanciful woman may entertain, but such as a jury shall esteem to have been felt upon reasonable grounds. It was put to the jury in the present case whether they thought the woman had reasonable ground for apprehending personal violence. The jury were warranted in concluding she apprehended a repetition of the violence offered to her the year preceding ; and more horrid treatment no female had ever experienced. If I had recollected the cases decided by Lord Ellenborough, I should have decided, even at Nisi Prius, against the case of Horwood v. Heffer. The doctrine in that case cannot be law. Is a decent woman to stay under the same roof with a prostitute ? to sit at the same table with her ? or to give place, and receive her meals in a separate apartment ? The law can never require a woman to act contrary to decency. If a wife remains in the house with her husband and an adulteress, I doubt whether she could afterwards obtain a divorce for the adultery of her husband ; her continuance in the house with her husband under such circumstances, might be considered as an assent to his conduct, and prejudice her case in the spiritual court." Mr. Justice Park said, " There is no ground whatever for interfering with this verdict. The direction to the jury was perfectly correct. ' Houliston V. Smyth, 3 Bing. 127; Reed v. Moore, 5 C. & P. 200; Emery v. Emery, 1 Younge <& Jerv. 501 ; Sykes v. Halstead, 1 Sandf. 483. And where the wife lives apart from her husband, for justifiable reasons, and takes a minor child with her, the husband will be liable for necessaries furnished the child, by the mother's order ; she having no means adequate to her support according to her husband's degree, ^azeley v. Forder, Law R. 3 Q. B. 569, Cockburn, C. J., dissenting (1868) ; s. c. 9 Best & S. 599. See Hall v. Weir, 1 Allen, 261 (1861) ; Reynolds v. Sweetser, 16 Gray, 78 (I860); '^ Baker ». Sampson, 14 C. B. (n. s.) 383 (1863) ; Bazeley v. Forder, Law R. 3 Q. B. 559 (1868) ; PhilUpson v. Hayter, Law R. 6 C. P. 38 (1870). CHAP. 11.] MARRIED WOMEN. 1'79 notice be given that she is not to be trusted. But when she leaves him on account of difficulties and disagreement in the family, it must clearly appear that they arose from his miscon- duct, or he will not be responsible on her contracts.' If the wife voluntarily elope, and not with an adulterer, and after- wards solicit her husband to receive her again, and he refuse, he will be bound from that time for necessaries furnished to her.'^ Yet if such an elopement be with an adulterer, it would be otherwise.^ If, however, the husband receive his wife again, after she has been turned away by him for adultery, and then turn her away again, he is liable for necessaries furnished to her.* § 179. In case a husband has obliged his wife to leave his house on account of his ill-treatment to her, or has turned her out of doors without sufficient cause, the husband would be liable for the reasonable costs of a suit at law or in equity insti- tuted against him in behalf of his wife.^ And where a husband, separated from his wife, by his violent conduct renders it nec- and the true question was, whether the conduct of the defendant was such as to occasion on the part of his wife a reasonable and strong apprehension of personal violence. From what had passed before, she had a reasonable ground for apprehending such violence, and the jury have drawn the proper conclusion. I am surprised at the language ascribed to the court in Hor- wood V. Heffer, because it is abhorrent from every feeling of a man and a Christian. It is not to be endured that the mistress of a house should con- fine herself to a chamber with bare necessaries, when a prostitute is sitting at the same table with her husband. That cannot be the law of England, because it is not the law of morality and religion.'' Certainly it seems but just, that if a man may expel his wife from his house for her adultery, she should be entitled to leave the house for his adultery. See Ham v. Toovey, Selw. N. P. 246 ; Aldis v. Chapman, Selw. N. P. (8th ed.) 272. See also Sykes v. Halstead, 1 Sandf. 483. ' Blowers v. Sturtevant, 4 Denio, 46. " Ewers v. Hutton, 3 Esp. 256 ; Child v. Hardyman, 2 Str. 876, and the cases collected in 2 Str. 1214, n. 1; Bac. Abr. Baron & Feme, H. ; M'Cutchen v. M'Gahay, 11 Johns. 281 ; M'Gahay v. Williams, 12 Johns. 293 ; Clement v. Mattison, 3 Rich. 93 ; Cunningham v. Irwin, 7 S. & R. 247 ; Henderson v. Stringer, 2 Dana, 293. ' Govier o. Hancock, 6 T. R. 603. * Harris ». Morris, 4 Esp. 41. " Williams v. Fowler, M'Clel. & Younge, 269 ; Shepherd ». Mackoul, 3 Camp. 326. But see Shelton v. Pendleton, 18 Conn. 417. 180 OF THE PARTIES TO A CONTRACT. [CHAP. II. essary for her to exhibit articles of the peace against him, he is liable for expenses thereby incurred, although he allow her a separate maintenance.^ § 180. In cases of fraudulent misrepresentation on the part of the wife of her authority to bind her husband, upon princi- ple, she would be liable in trover for the goods, if they were in her possession, — or for their value, if she had parted with them upon a valuable consideration, which she retained.^ If, how- ever, they had been consumed by her, or she had given them away, or had parted with the proceeds of a sale thereof, the seller would be remediless ; upon the ground that to render her responsible, in such cases, would be to impose the real liability upon the husband, who, not having authorized her purchase, could not be legally bound thereby. Besides, another and stronger reason is to be found in the policy which throws upon the vendor the risk, in cases where he knowingly sells to a married woman, and which renders it his duty to guard against her deceit, by not implicitly trusting to her representa- tions. If, however, she still retain the goods purchased, or their proceeds, she would, upon principle, be liable therefor in trover ; upon the ground that her fraud, which is a tort, annuls the contract, and leaves her in the situation of a person having goods for which she has paid no consideration, and which do not belong to her. She could not, of course, be liable in an action of assumpsit, since the form of the action would virtu- ally, and, at least, for the purposes of the trial, affirm the con- tract, and she could only be rendered personally responsible upon the ground that there was no contract in existence, because of the fraud ; but only a tort. If the action proceed upon the ground of the existence of a contract, the defence that she is not liable personally on her contracts, would be ' Turner i). Eookes, 10 Ad. & El. 47 ; s. o. 2 Perry & Dav. 294. See ante, § 176. '' Decrly v. The Duchess of Mazarine, 2 Salk. 646 ; Waithman v. Wake- field, 1 Camp. 120. The same rule would seem to apply to married women as to infants, in this respect. Partridge u. Clarke, 5 T. E. 194; Waters v. Smith, 6 T. R. 451 ; Pitt v. Thompson, 1 East, 16 ; Wilkins v. Wetherill, 3 Bos. & Pul. 220; Pearson v. Meadon, 2 W. Bl 903; Luden «. Justice, 1 Bing. 344 ; s. c. 8 Moore, 846. CHAP. II.] MAREIED WOMEN. 181 unanswerable. And a married woman may always set up the defence of coverture in an action of contract, at least in a suit at law, although the contract was entered into through a fraud- ulent representation by her that she was sole.^ § 181. A vendor could not, however, retake from a married woman goods obtained from him without a false representation, ' See ante, § 111. In Liverpool Adelphi Loan Association v. Fair- hurst, 9 Ex. 422 ; 26 Eng. Law & Eq. 396, Pollock. C. B., said : " The ques- tion in this case is, whether an action will lie against a husband and wife, for a false and fraudulent representation by the wife to the plaintiffs, that she was sole and unmarried, at the time of her signing a promissory note as surety to them for a third person, whereby they were induced to advance a sum of money to that person. We think the action will not lie. A feme covert is unquestionably incapable of binding herself by a contract ; it is altogether void, and no action will lie against her husband, or herself, for the breach of it. But she is undoubtedly responsible for all torts committed by her during coverture, and the husband must be joined as a defendant. They are liable, therefore, for frauds committed by her on any person, as for any other per- sonal wrong. But when the fraud is directly connected with the contract with the wife, and is the means of effecting it, and parcel of the same transaction, the wife cannot be responsible, and the husband be sued for it together with the wife. If this were allowed, it is obvious that the wife would lose the protec- tion which the law gives her against contracts made by her during coverture ; for there is not a contract of any kind which a. feme covert could make, whilst she knew her husband to be alive, that could not be treated as a fraud ; for every such contract would involve in itself a fraudulent representation of her capacity to contract. Accordingly, it has been held in the case cited, and so much commented upon, during the argument (Cooper v. Witham, reported in 1 Lev. 247), that the wife could not be bound in such a case. It is true that Twisden, J., assigned another reason, namely, that the wife having represented herself to be sole, and induced the plaintiff to marry her, it was a felony in her, and so no action could lie till the felony was tried ; but it was said, that if the wife had been pardoned, by which that objection was removed, yet it seemed the action would not lie, and the reason was that ' the fact sounded in contract.' The case is also reported in 1 Sid. 376, and there one o"f the reasons stated is, that the ground of the action was ' the communication and contract of the wife.' " In the case of an infant it was held, for a similar reason, that he could not be made liable for a fraudulent representation that he was of full age, whereby the plaintiff was induced to contract with him (Johnson v. Pye, 1 Sid. 258 ; 1 Keb. 913) ; and according to the latter report, it was said, that if the action should be maintainable, ' all the pleas of infancy would be taken away, for such affirmations are in every contract.' " See farther, as to the ground of allowing the defence, Merriam v. Cunningham, 11 Cush. 40. 182 OP THE PARTIES TO A CONTRACT. [CHAP. II. even although she should still retain them in her possession ; because as her possession was acquired by contract, she could not be made responsible thereon, and there being no tort, trover could not be sustained. Besides, it would not, in such a case, be by any means evident, that the seller did not trust to the personal credit of the woman, which he might fairly do ; for, although he could not maintain an action against her, person- ally, for the purchase-money, yet the consideration, on her part, would be good, and sufficient to support the contract, though it would not be valuable. SLAVES.! § 182. We shall now consider the contracts of slaves. The condition of slaves in the slave-holding States in this country is analogous to that of slaves among the ancient Greeks and Romans, and not to that of the villeins of feudal times.^ They are considered in most respects as chattels and not as persons. They can bring no actions and acquire no property by descent or purchase.^ They can enforce no promise made to them either in law or equity,* and notes given to them are void.^ § 183. There are some modifications of these rules of the Roman law, by statute and usage among some of the slave- holding States, but otherwise they generally obtain in this country. A slave may, however, contract with his master respecting his manumission, and the agreement can be enforced by law.^ But this is the only contract which he can make, he being considered as a thing, and not a person. 1 This title is retained as matter of history, notwithstanding the abolition of slavery in the United States. '^ Bynum v. Bostick, 4 Des. 267 ; 21 Am. Jur. 18. ' Cunningham v. Cunningham, Cam. & Norwood, 356. ^ Beall V. Joseph, Hardin, 52 ; Willis v. Bruce, 8 B. Mon. 548. In Glen V. Hodges, 9 Johns. 67, it is held that a slave cannot contract a debt. ' Gregg t). Thompson, 2 Rep. Const. Ct. (S. C), 331. ^ Williams u. Brown, 3 Bos. & Pul. 69; Ketletas v. Fleet, 7 Johns. 324; In the case of Tom, 5 Johns. 365. But see Anderson v. Poindexter, 6 Ohio St. 622. CHAP, n.] SEAMEN. 188 SEAMEN. § 184. We now come to the sixth class, namely, seamen, who are peculiarly under the guardianship of the law, and are often called the wards of admiralty. By a law of the United States,! it is provided, that " no sum exceeding one dollar shall be recovered from any seaman or mariner (in the mer- cliant service) by any person, for any debt contracted during the time such seaman or mariner shall actually belong to any ship or vessel, until the voyage for which such seaman or mari- ner engaged shall be ended." It has been held, however, that, inasmuch as the effect of the statute is to avoid, or at least to suspend a contract, which otherwise might be enforced at law forthwith, the defendant must be held to a strict com- pliance with the statute provision creating his exemption, and must produce the shipping paper, which he is required, by the first section, to sign, and which is, therefore, the proper evi- dence of his contract.^ § 185. The contract of a seaman for his wages is construed by the courts very liberally in his favor, in consideration of the general recklessness and thoughtlessness as well as ignorance which characterize this class of persons. Wherever, therefore, in the shipping articles any stipulation is inserted derogating from the general rights and privileges of seamen, it will be held void in equity and admiralty, unless the nature and ope- ration of the clause have been fully explained to the seaman, and unless an additional and fully adequate compensation be allowed to him on consideration of such stipulation.^ So, also, ' 1 Laws of U. S. (Story's ed.) ch. 56, § 4, p. 104. ' Reynard v. Brecknell, 4 Pick. 302. ^ Mr. Justice Story, in Brown v. Lull, 2 Sumner, 449, thus lays down the rule, and its reasons: "It is well known, that the shipping articles, in their common form, are in perfect coincidence with the general principles of ' the maritime law as to seamen's wages. It is equally well known, that courts of admiralty are in the habit of watching with scrupulous jealousy every deviation from these principles in the articles, as injurious to the rights of seamen, and founded in an unconscionable inequality of benefits between the parties. Seamen are a class of persons remarkable for their rashness, thoughtlessness, and improvidence. They are generally necessitous, igno- 184 OP THE PARTIES TO A CONTRACT. [CHAP. II. the usual clause that no seaman shall be entitled to his wages, or any part thereof, until the arrival of the ship at the port of rant of the nature and extent of their own rights and privileges, and, for the most part, incapable of duly appreciating their value. They combine, in a singular manner, the apparent anomalies of gallantry, extravagance, profu- sion in expenditure, indifference to the future, credulity, which is easily won, and confidence, which is readily surprised. Hence it is, that bargains between them and ship-owners, the latter being persons of great intelligence and shrewdness in business, are deemed open to much observation and scrutiny ; for they involve great inequality of knowledge, of forecast, of power, and of condition. Courts of admiralty, on this account, are accus- tomed to consider seamen as peculiarly entitled to their protection ; so that they have been, by a somewhat bold figure, often said to be favorites of courts of admiralty. In a just sense they are so, so far as the maintenance of their rights, and the protection of their interests against the effects of the superior skill and shrewdness of masters and owners of ships are concerned. Courts of admiralty are not, by their constitution and jurisdiction, confined to the mere dry and positive rules of the common law. But they act upon the enlarged and liberal jurisprudence of courts of equity; and, in short, so far as their powers extend, they act as courts of equity. Whenever, there- fore, any stipulation is found in the shipping articles, which derogates from the general rights and privileges of seamen, courts of admiralty hold it void, as founded upon imposition or an undue advantage taken of their necessities, and ignorance, and improvidence, unless two things concur; first, that the nature and operation of the clause is fully and fairly explained to the sea- men; and secondly, that an additional compensation is allowed, entirely adequate to the new restrictions and risks imposed upon them thereby. This doctrine was fully expounded by Lord Stowell, in his admirable judg- ment in the case of the Juliana (2 Dods. 604) ; and it was much considered by this court in the case of Harden v. Gordon (2 Mason, 641, 656, 557) ; and it has received the high sanction of Mr. Chancellor Kent, in his Com- mentaries (vol. iii. lect. 46, p. 193). I know not, indeed, that this doctrine has ever been broken in upon in courts of admiralty, or in courts of equity. The latter courts are accustomed to apply it to classes of cases far more extensive in their reach and operation ; to cases of young heirs selling their expectancies ; to cases of reversioners and remainder-men dealing with their estates ; and to cases of wards dealing with their g-uardians ; and above all, to cases of seamen dealing with their prize-money and other interests. If courts of law have felt themselves bound doivn to a more limited exercise of jurisdiction, as it seems from the cases of Appleby v. Dods (8 East, 300) and Jesse v. Roy (1 Cromp. Mces. & Rose. 316, 329, 339), that they are, it is not, that they are insensible of the justice and importance of these considerations, but because they are restrained from applying them by the more strict rules of the jurisprudence of the common law, which they are called upon to administer." See also The Betsy and Rhoda, in the District Court of Maine, 3 N. Y. Leg. Obs. 215. CHAP. II.J SEAMEN. 185 discharge, is never construed as a condition precedent, but as an indication of time and place of payment.^ § 186. Tlie contract made by a seaman for his wages is of a peculiar character, and seems to demand some brief considera- tion in this place. And in the first place, let us consider when he is entitled to wages, and secondly, when he forfeits or loses his wages. The first rule is, that freight is the mother of wages, and if the ship have earned its freight, the seaman has earned his wages,^ though this rule does not apply to the mas- ter of the ship.^ If a ship complete her outward voyage, and earn freight, but perish on the homeward voyage, the seaman will be entitled to wages for the outward voyage, unless the two be, by agreement, consolidated into one.* Wherever a voyage is divided by various ports of delivery, a proportional claim for wages attaches at each of such ports, and all attempts to evade that title by renunciations, obtained from the mariners without any consideration, by collateral bonds or contracts inserted in the body of the shipping articles, are void.^ So, also, the sickness of the seaman during the voyage, or his inability to perform his work, in consequence of any injury received in the service of the vessel, will not destroy his right to receive wages.^ So, also, if a master, in violation of his contract, discharge a seaman from the service of the ship dur- ing the voyage, he will still be entitled to full wages to the end of the voyage, deducting any wages which he may, during such time, have earned in another vessel.'^ So, also, if the master • Swift V. Clark, 16 Mass. 173 ; Johnson v. Sims, 1 Peters, Adm. 215 ; The George Home, 1 Hagg. Adm. 370. " Abbott on Shipping, pt. v. ch. 11, p. 5.58. ' Hawkins v. Twizell, 5 El. & B. 883 (1866). ' Ibid.; Anon., 1 Ld. Raym. 639; 12 Mod. 408; Appleby w. Dods, 8 East, 300 1 Jesse ». Roy, 4 Tyrw. 626 ; s. c. 1 C. M. & R. 316 ; The Juliana, 2 Dods. 504 ; Pitman v. Hooper, 3 Sumner, 286 ; Locke v. Swan, 13 Mass. 76 ; Moore ». Jones, 16 Mass. 424 ; The Cynthia, 1 Peters, Adm. 204. ^ Per Mr. Justice Story, Abbott on Shipping (Am. ed.), 448; Chancel- lor Kent, in 3 Kent, Comm. 190; Edwards v. Child, 2 Vern. 727. « Abbott on Shipping, pt. v. ch. 2, p. 652 ; Chandler o. Grieves, 2 H. Bl. 606, note (a) ; Williams v. The Brig Hope, 1 Peters, Adm. 138 ; Holmes v. Hutchinson, Gilpin, 448. ' Robinett v. The Ship Exeter, 2 Rob. Adm. 261 ; The Beaver, 3 Rob. Adm. 92 ; Curtis on Merch. Seamen, 300, and cases cited ; The Rovena, 186 OP THE PARTIES TO A CONTRACT. [CHAP. IL put a seaman forcibly ashore and leave him ; ^ or if the seaman leave the ship, because there are not sufficient provisions on board, or for cruelty, he does not lose his wages.^ But, although repeated acts of cruelty and oppression on the part of the master will justify a seaman in abandoning the vessel, yet a single act of assault and battery vrill not, although it exceed the bounds of moderation, unless, indeed, there be reasonable grounds of apprehension, that such acts will be repeated.^ In case a seaman die during the voyage, the better opinion seems to be, that his heirs and representatives can recover wages up to the time of his death, and no longer.* Again, if, after the seamen are hired, the owner do not send the ship on the voyage, they must be paid for the time during which they worked on board the vessel.^ But if a seaman be incompetent to perform his duty properly, he is liable to have a deduction made from his wages, so as to conform the recompense to the worth of his sevices.^ And a loss to the ship or cargo, occa- sioned by his gross negligence, may be set off against his wages.' But where a seaman might have been discharged in Ware, 309 ; The Nimrod, Ware, 9 ; Girard v. Ware, Peters, C. C. 142 ; Bush V. Alonzo, 2 Cliff. 548. ' Girard v. Ware, Peters, C. C. 142. ' The Maria, 1 Peters, Adm. 186; The CaHilia 1 Hagg. Adm. 59; The Eliza, 1 Hagg. Adm. 186 ; Rice v. The Polly and Kitty, 2 Peters, Adm. 415 ; Ward v. Ames, 9 Johns. 138. ^ Steele v. Thachor, Ware, 91. * 3 Kent's Comm. in lect. 46, p. 189, and. cases cited; Armstrongs. Smith, 1 Bos. & Pul. N. R. 299 ; Carey v. The Kitty, Bee, 255. But see Natterstrom v. The Hazard, 2 Hall, L. J. 359. But see Cutter v. Powell, 6 T. R. 320 ; Beale u. Thompson, 3 Bos. & Pul. 425. The decisions are contradictory, some assuming that the wages for the whole voyage are recov- erable, and some asserting that the wages to the death of the seaman are alone recoverable. Mr. Chancellor Kent, in his Commentaries (lect. 46, p. 196), gives the weight of his opinion in favor of the rule stated in the text. See, however, Walton v. The Ship Neptune, 1 Peters, Adm. 142 ; Sims w. Jackson, 1 Peters, Adm. 157, note ; s. c. 1 Wash. C. C. 414. See Curtis on March. Seamen, 293 ; Sherwood v. Mcintosh, Ware, 109. ' Wells V. Osman, 2 Ld. Raym. 1044. ^ Atkyns v. Burrows, 1 Peters, Adm. 247 ; Mitchell v. The Ship Oro- zimbo, 1 Peters, Adm. 250; Sherwood v. Mcintosh, Ware, 109. ' The New Phcenix, 2 Hagg. Adm. 420 ; Brown v. The Neptune, Gilpin, 89. CHAP. II.] SEAMEN. 187 the course of the voyage for gross misbehavior, if the master refuse to discharge him, aud leave him in imprisonment abroad, he will be entitled to his wages, until his return, after deducting from the claim his period of imprison men t.i But in case his voyage is interrupted by the supreme authority of the state, as where the seaman is sent for on legal process, without any reasonable possibility of his ever being able to rejoin the ship on the voyage, the coatract is held to have been dissolved from that time ; and no further wages can be claimed. 2 § 187. Where the seaman ships on a general trading or freighting voyage, without any limitation of time, or any cer- tain destination or fixed terminus to the voyage, either the master or mariner may put an end to the contract at any port, provided it be not done at a time or under circumstances par- ticularly onerous or injurious to the other party .^ § 188. Seamen are bound to exert themselves to their utmost in the service of the ship, for the compensation agreed upon, and any promise of additional reward, made when the ship is in distress, for the purpose of stimulating their efforts to save her, are treated as void ; especially if there be any unfair practices, or reluctance to do their duty, on the part of the sailors.* Yet if the vessel be wrecked, and parts thereof and of the cargo be saved by the crew, they having performed extraordinary services as salvors, it seems that they would be entitled to receive salvage.* Ordinarily, however, a seaman is not absolved from his duty to remain by the vessel, and give ' Buck V. Lane, 12 S. & R. 266. ' Melville v. De Wolf, 4 El. & B. 844 (1855). Lord Campbell, C. J., distinguished the case from Beale v. Thompson, 4 East, 546, in this, that the contract there was only suspended ; aa embargo being only a temporary impediment. 3 The Crusader, Ware, 449. * Harris v. Watson, Peake, 72 ; Stilk ». Myrick, 2 Camp. 317 ; Thomp- son V. Havelock, 1 Camp. 527; Abbott on Shipping, pt. ii. ch. 4, p. 146; Harris v. Carter, 3 El. & B. 559 ; 25 Eng. Law & Eq. 220; The Arammta, 1 Spinks, 224; 29 Eng. Law & Eq. 582. See Hartley v. Ponsonby, 7 El. & B. 872 ; post, § 703. • The Two Catherines, 2 Mason, 334 ; Pitman v. Hooper, 3 Sumner, 60 ; The Neptune, 1 Hagg. Adm. 227; Hobart v. Drogan, 10 Peters, 122; Taylor v. The Cato, 1 Peters, Adm. 48. 188 OP THE PARTIES TO A CONTEACT. [CHAP. II, his best aid to her, in case of shipwreck ; and it is only under very peculiar and uncommon circumstances, that a seaman whose connection with the vessel is not dissolved can claim salvage. Whether shipwreck constitutes an exception to the rule that wages depend upon the earnings of freight, so as to enable seamen who have saved the fragments of a ship to recover wages, as far as the value of those fragments will per- mit, is a much vexed question, but it seems now to be the inclination of opinion, that it does constitute an exception, and that wages may be recovered to the extent of the worth of the materials saved. ^ Where the mariner's connection with the vessel has been dissolved de facto ^ as if the captain desert the vessel with his crew, without question he may then become a salvor and claim salvage in like manner as a stranger, but he loses all claim for wages. ^ § 189. By a statute of the United States a seaman ia entitled to his wages " as soon as the voyage is ended, arid the cargo or ballast fully discharged at the last port of delivery." ^ The construction given to this claim is, that the wages are due upon the discharge of the seamen ; and if by the terms of the contract, or the usage at the place where the contract is com- pleted, the seaman's term of service expires with the mooring of the vessel at the wharf, and before the unlading of the cargo, his claim to wages commences from such time. The question whether the cargo must be discharged before such ' Pitman «. Hooper, % Sumnfr, 290 ; The Neptune, 1 Hagg. Adm. 227 ; The Two Catherines, 2 Mason, 334 ; Abbott on Shipping, p. 451, n. 1 (Am. ed. 1829), and note by Mr. Justice Story; Lewis v. The Ehzabeth and Jane, Ware, 41 ; Taylor v. The Cato, 1 Peters, Adm. 48 ; Giles v. The Cynthia, 1 Peters, Adm. 203 ; Adams v. The Sophia, Gilpin, 77 ; Brackett v. The Hercules, Gilpin, 184; Weeks v. The Catherina Maria, 2 Peters, Adm. 424; Curtis on Merch. Seamen, p. 285. But the Supreme Courts of New York and Massachusetts have treated the claim of the seamen as a claim of salvage, and do not admit shipwreck to be an exception. Froth- ingham u. Prince, 3 Mass. 563 ; Coffin u. Storer, 5 Mass. 252 ; Dunnett ». Tomhagen, 3 Johns. 154. See also 3 Kent, Comm. lect. 46, p. 195. But see Jurgcnson v. The Catherina Maria, 2 Peters, Adm. 424. "" Mason v. The Ship Blaireau, 2 Cranoh, 240, 270 ; The Neptune, 1 Hagg. Adm. 236, 237; Hobart u. Drogan, 10 Peters, 108; Curtis on Merch. Seamen, p. 289. = U. S. Laws, ch. 66, § 6, Act of July 20, 1790. CHAP. II.] SEAMEN. 189 right accrues, depends upon the custom of the port, in the absence of a special contract.^ § 190. By act of Congress, one-third of the seamen's wages is due at every port where the ship unlades and delivers her cargo, unless there be a contract to the contrary ; and if the wages be not paid in ten days after the cargo and ballast are fiiUy discharged, admiralty process in rem may be instituted against the ship.^ § 191. A seaman has a lien for his wages on the ship itself, and on tlie freight. But he has no lien on the cargo, as cargo, although so far as the cargo is subject to freight, he may attach it as security for the freight that may be due.^ In respect to the ship it has been said, that " he has a right to cling to the last plank, in satisfaction of his wages.* This lien of the mar- iner is not, however, of the same nature as the common-law lien, and is not dependent on possession.^ It is merely a spe- cial charge upon the vessel or freight, and follows it wherever it goes, attaching to the vessel, or to its proceeds, according to the Option of the mariner,^ and entitled to priority of payment over all the other debts of the vessel.' It is destroyed by the utter destruction of the vessel, by total and absolute payment of the wages, or by prescription, laches, or renunciation of his right, by the mariner. There is no fixed rule, as to what lapse of time will constitute such prescription, or laches, or renuncia- tion of right, but each case must depend on its peculiar cir- * The Mary, Ware, 456, 458; The Ship Susan, 1 Peters, Adm. 165; The Philadelphia, 1 Peters, Adm. 210 ; The Happy Return, 1 Peters, Adm. 266; Holmes v. Bradshaw, Dunlap, Adm. Pr. 99. ' Act of Congress, 20th July, 1790, ch. 29, § 6. 3 .The Lady Durham, 3 Hagg. Adm. 200. * Lord Stowell, in The Sydney Cove, 2 Dods. 13 ; The Neptune, 1 Hagg. Adm. 227 ; Lewis v. The Elizabeth and Jane, Ware, 41 ; Pitman v. Hooper, 3 Sumner, 60. " Ex parte Foster, 2 Story, 145. ' * Sheppard v. Taylor, 6 Peters, 675 ; Brown v. Lull, 2 Sumner, 443 ; The Nestor, 1 Sumner, 73 ; The Neptune, 1 Hagg. Adm. 227 ; The Dunve- •gan Castle,- 3 Hagg. Adm. 129; Curtis on Merch. Seamen, p. 817, and cases cited. ' The Madonna d'Idra, 1 Dods. 37 ; The Sydney Cove, 2 Dods. 1 ; The Ship Virgin, 8 Peters, 538 ; The Paragon, Ware, 322. 190 OP THE PARTIES TO A CONTRACT. [CHAP. II. cumstances.i In the admiralty courts of America, the statute of limitations does not run against suits by mariners for their wages. ^ § 192. But this right to wages and this lien on the vessel and on every plank of her, does not apply in cases where the vessel has been abandoned as derelict and become the subject of salvage by others ; but only in cases where the vessel has been wrecked and broken up, and the seamen themselves are the salvors.^ § 193. In the next place, let us consider by what means a mariner may lose or forfeit his wages. And first, as to the modes in which he may lose his wages. Usually we have seen, that whenever freight is earned, wages are earned, and the converse of this rule is generally true, that where freight is lost, wages are lost. If, therefore, there be a total loss or capture of the vessel during her voyage, the seaman loses his wages.* But the hypothecation, or even the sale of the ship, if not made under the authority of a competent court, will not ' Brown v. Jones, 2 Gall. 481 ; Willard v. Dorr, 3 Mason, 91, 161 ; The Sarah Ann, 2 Sumner, 206 ; Pitman v. Hooper, 3 Sumner, 286 ; The Re- becca, 5 Rob. Adm. 102. ^ Ibid. ; Brown v. Jones, 2 Gall. 481. ' Lewis V. The Elizabeth and Jane, Ware, 41. In this case, Mr. Justice Ware says : " The general rule founded on principles of policy, is, that wages are dependent on the successful termination of the voyage. Sea- men have then their threefold remedy, against the master, the owners, and the ship. Until that time their right to wages, and consequently their lien on the ship, are but inchoate and contingent. They become perfect on her safe arrival at the port of destination. Any misfortune that destroys the voyage, puts an end to the claim for wages, or rather prevents its ever com- ing to maturity. Shipwreck, followed by abandonment, seems necessarily to involve this consequence. The contract is dissolved. The connection of the crew with the ship is at an end. The property is derelict, and the finder acquires a possession and an interest, which the master and mariners cannot legally disturb. They have no longer a right to intermeddle with the goods. The rights of the owner continue, but if he does not appear and make his claim within a year and a day, the title, subject to the salvor's lien, by the law of nations, as now understood, accrues to the sovereign." The Aquila, 1 Rob. Adm. 34; Valin, L. 4, tit. 9, art. 27; Jacobsen's Sea Laws, B. 4, oh. 4 ; Dunnett v. Tomhagen, 3 Johns. 154. * Abbott on Shipping, pt. v. ch. 3, § 1, p. 571 ; Appleby v. Dods, 8 East, 800 ; Abemethy v. Landal, 2 Dougl. 539 ; Pitman v. Hooper, 3 Sumner, 50. CHAP. II.] SEAMEN. 191 destroy his claim for wages, and the mariner will be preferred to the holder of the bottomry bond.^ We have also seen, that the wrecking of a vessel will not always destroy his right to wages. ^ Any partial loss of freight will not touch the right of a seaman to his wages, but the loss of freigiit must be total.* But in case of shipwreck, it would seem that the payment of a proportion of freight, for the cargo saved, would not entitle the seamen to wages in the same proportion.* Nor would it seem, that, if freight be advanced, the mariner would have a claim for wages thereupon, in case of destruction of the voyage, since the shipper would be entitled to recover it.^ § 194. Again, if freight be lost by the negligence or miscon- duct of the 'master or owner, or be voluntarily abandoned by them, or if the owner contract for freight upon terms or contingencies differing from the general rules of the maritime law, or if no cargo be furnished to the ship on either the out- ward or the homeward voyage, the mariner will be entitled to receive his wages ; and these form an exception to the gen- eral rule, that freight is the mother of wages.^ The rule in this respect, as stated by Mr. Justice Story, is, that sea- men are entitled to their wages, where freight is or might he earned.'^ ' The Sydney Cove, 2 Dods. 11; The Madonna d'Idra, 1 Dods. 37; The Lady Durham, 3 Hagg. Adm. 196. ^ Ante, § 188. ^ Pitman v. Hooper, 3 Sumner, 67, 286. • Pitman v. Hooper, 3 Sumner, 67, 286; The Neptune, 1 Hagg. Adm. 227. ° Pitman e. Hooper, 3 Sumner, 67, 286, overruling the anonymous case in 2 Show. 283. See Watson u. Duykinck, 3 Johns. 335; Griggs v. Austin, 3 Pick. 20. « The Saratoga, 2 GaU. 175 ; Woolf v. The Oder, 2 Peters, Adm. 261 ; Hoyt V. Wildfire, 3 Johns. 518; The Two Catherines, 2 Mason, 319; Pitman v. Hooper, 3 Sumner, 290; The Juliana, 2 Dods. 504; Van Beuren v. Wilson, 9 Cow. 158. ' Pitman v. Hooper, 3 Sumner, 289. In this case Mr. Justice Story said : " The general formulary, as laid down in Lord Tenterden's Treatise on Shipping (Abbott on Shipping, pt. iv. ch. 2, § 4, p. 447), is this : ' The payment of wages is generally dependent upon the payment of freight. If the ship has earned its freight, the seamen, who have served on board the ship, have in like manner earned their wages. And, as in general, if a 192 OF THE PARTIES TO A CONTRACT. [CHAP. H. § 195. In the next place, a seaman may, by his conduct, forfeit his wages either totally or partially, and whatever amounts to a breach of duty may affect his wages. Desertion, which, in the maritime law, signifies not merely an unauthor- ized absence from the ship, but an unauthorized absence with intent not to return, animo non revertendi, constitutes a for- feiture of all title to wages, and to rights in the proceeds of the voyage in the nature of wages.^ If a seaman quit a ship without leave, or in disobedience of orders, but with an intent to return to duty, although he would be punishable not only by personal chastisement, but by damages by way of dimin- ship, chartered on a voyage out and home, has delivered her, outward bound cargo, but perishes in the homeward voyage, the freight for the outward voyage is due ; so, in the same case, the seamen are entitled to receive their wages for the time employed in the outward voyage, and the unloading of the cargo, unless by the terms of the contract the outward and homeward voyages are consolidated into one.' To language so very general, certainly nothing further than general truth can be, or ought to be attributed. In truth, however, the language is far from being accurate ; and it is not com- prehensive enough to embrace the exceptions to the general rule, or even all the cases which fall within it. Thus, it is not true in every case in the maritime law, that the payment of wages is dependent upon the payment of freight ; for if freight be earned, it is wholly immaterial, whether it be paid or not. So the earning of freight is by no means necessary in all cases to give a title to wages ; as, for example, where the ship performs her voyage without the owner having furnished any cargo, or where there is a special contract between the owner and freighter, varying the right to freight from the general law ; as where the freight is made dependent upon the perform- ance both of the outward and the homeward voyage. The case of shipwreck, where materials are saved from the wreck, furnishes a still stronger illustra- tion ; for in such a case the seamen earn their wages, as far as the materials saved go, even though the freight for the homeward voyage is wholly lost. So that a moment's reflection will teach us, that the general text of Lord Tenterden does not contain a full or an accurate exposition of the whole doctrine appUcable to the subject. It affords one, out of many illustrations of the maxim. In generalibus versaiur error. If the doctrine be susceptible of any exact generalization (which perhaps it is not) , it would be more cor- rect to say, that the general rule, though not the universal rule, is, that the seamen are entitled to wages for the full period of their employment in the ship's service for any particular voyage, in which freight is or might be earned by the owner." ' Coffin V. Jenkins, 3 Story, 113 ; Abbott on Shipping, pt. v. ch. 3, p. 676 ; The Rovena, Ware, 309; Spencer v. Eustis, 21 Me. 519. CHAP. II.] SEAMEN. 193 ished compensation, yet such conduct does not constitute the offence of desertion for which the maritime law enacts a for- feiture of all antecedent wages.^ By statute of the United States, however, it is enacted that forty-eight hours absence from the ship without leave, if a proper entry thereof be made in a log-hook, shall be deemed a desertion.^ This statute is only construed to give to the mariner, who absents himself without leave, the space of forty-eight hours, within which if he return, he is not guilty of desertion. But if he do absent himself, it is at his own peril, and if he be unable, through any chance, to rejoin the ship, he forfeits his wages.^ But although desertion is generally attended with a total forfeiture of wages, yet there are cases, where the party either has a strong excuse, and the circumstances are exculpatory or alle- viating, or where, having a locus poenitentice, he acknowledges his fault, and offers to return to duty within a reasonable time, in which only a partial forfeiture will be decreed.* § 196. A desertion must, however, take place during the voyage, and before its termination. The question arises, therefore, when the voyage is to be considered ended. The rule on this point is that the voyage is ended when the ship has arrived at her last port of destination, and is moored in good safety in her proper and accustomed place. And although seamen are ordinarily bound to stay by the ship, and assist in the unloading of the cargo, unless there be some express or implied agreement growing out of usage, to the contrary, yet a non-compliance with this duty will not be a desertion so as to forfeit all the seaman's wages.^ ' Per Mr. Justice Story, Cloutman v. Tunison, 1 Sumner, 376 ; The Ship Mentor, 4 Mason, 84 ; 3 Kent, Comm. lect. 96, p. 198, 199. « Act of 1790, eh. 56 (29), § 5, commented on in 1 Sumner, 373, and CofBn V. Jenkins, 3 Story, 113. See Roberts v. Knights, 7 Allen, 449. ' Coffin V. Jenkins, 3 Story, 113; Cloutman ». Tunison, 1 Sumner, 373. * Ibid. ; Bordman v. The Elizabeth, 1 Peters, Adm. 128 ; Dixon v. The Cyrus, 2 Peters, Adm. 407 ; The Mentor, 4 Mason, 84. See also the cases collected in Kinne's Law Compendium, vol. ii. p. 637 (tit. The Law of Ships and Maritime Commerce). " Cloutman v. Tunison, 1 Sumner, 377; The Pearl, 5 Rob. Adm. 224; The Baltic Merchant, Edw. Adm. 86. In the first case cited, Mr. Justice Story lays down the whole doctrine thus : " But there must not only be a desertion, VOL. I. 13 194 OF THE PARTIES TO A CONTRACT. [CHAP. H. § 197. If a seaman, in the course of the voyage, or in a for- eign port, claim higher wages than those stated in the shipping but the desertion must be in the course of the voyage, and before its termina- tion in the home port, to justify an infliction of the forfeiture by the maritime law. It is not sufficient, that there has been a desertion after the voyage has ended ; although it be within the period for which the party is bound to do duty on board the ship. It must be during the voyage. Now, when is the voyage ended, in the sense of the maritime law ? I answer, when the ship has arrived at her last port of dc'stination, and is moored in good safety in the proper and accustomed place. I do not say that the officers or seamen are then discharged from any further duty, and are not bound to attend to the unHvery of the cargo. On the contrary, I maintain, that the seamen, and a fortiori the officers, are bound to remain by the ship, and watch over her concerns, and assist in the unlivery of the cargo, if made in a seasonable time ; unless there be some express or implied agreement, or established usage, to dispense with their further services. There is a clause in the common ship articles, pointed to this very duty. ' And whereas ' (says the clause) ' it is customary for the officers and seamen, on the vessel's return home in the harbor, and whilst her cargo is delivering, to go on shore each night to sleep, greatly to the prejudice of such vessel and freighters, be it further agreed by the said parties, that neither officer or seaman shall, on any pretence whatever, be entitled to such indulgence ; but shall do their duty by day in discharging the cargo, and keep such watch by night as the master shall think proper to order for the preservation of the same.' And this very stipulation is in the present articles, and constitutes a part of the contract. But it is one thing to be responsible for a violation of the terms of the contract ; and quite another thing to incur the visitation of the mari- time penalty of forfeiture of the whole wages of the voyage. In the present case, it is, in my judgment, quite clear that the voyage was ended, so far as the maritime law is concerned, at the time when the asserted act of deser- tion took place. The vessel was not only safely moored, but had come to the wharf, and had been duly entered, and part of her cargo had been dis- charged. However reprehensible the act then was, it, was not a desertion during the voyage ; and therefore, so far as the forfeiture turns upon the principles of the maritime law, it was not incurre. McCarthy, 8 Allen, 42. But see Graham v. Schmidt, 1 Sandf. 74. ° Garth 1'. Howard, 8 Bing. 461 ; Helyear v. Hawke, 5 Esq. 72, 73 ; Langhorn v. AUnutt, 4 Taunt. 611 ; Betham v. Benson, Gow, 45 ; Fairlie V. Hastings, 10 Ves. 123; Paley on Agency, by Lloyd, 257, 268, 269; Maosters v. Abraham, 1 Esp. 375 ; Hannay v. Stewart, 6 Watts, 489 ; Story on Agency, § 187 ; Doggett v. Emerson, 3 Story, 700. CHAP. III.] EXTENT OP AUTHORITY. 211 could not be presumed to be made by him as agent.^ So, also, if the agent should give a warranty, contrary to his in- structions, the principal would be bound, if the agency were general.^ So, also, an agent employed for a special object, may use the ordinary means for accomplishing it, and if he make false representations, in the due course of such transac- tion, the principal is bound by them.^ And any fraud or misrepresentation, which would bind the principal, if he made it himself, will equally bind him, if made by his agent within the scope of his authority,* and in the course of his business. § 215. But fraudulent acts of the agent beyond the scope of his authority, and especially if they be in contravention of his duty and against tRe rights of his principal, will not be binding upon the principal. Wliere, therefore, the agent of a wharfinger, whose duty it was to give receipts for goods actu- ally received at the wharf, fraudulently gave a receipt for goods which had not been received, the principal was held not to be responsible.^ So, also, the representations of a professed agent, although they should form a part of the res gestce, would not be available to prove the fact of his agency or the extent of his authority, if questioned by his principal, however pub- licly such declarations should be made.® » Helyear v. Hawke, 5 Esp. 72, 73; Lobdell v. Baker, 1 Met. 193; Hubbard v. Elmer, 7 Wend. 446 ; TiUotson v. McCriUis, 11 Vt. 477. ^ Alexander v. Gibson, 2 Camp. 555 ; Cornfoot v. Fowke, 6 M. & W. 358 ; Pickering v. Busk, 15 East, 43 ; Fenn v. Harrison, 3 T. R. 760 ; s. C. 4 T. R. 177. = Sandford ». Handy, 23 Wend. 260. ' Doggett V. Emerson, 3 Story, 700; Locke v. Stearns, 1 Met. 560; Schneider v. Heath, 3 Camp. 506 ; Daniel v. Mitchell, 1 Story, 172 ; Wilson V. Fuller, 3 Q. B. 72 ; Collins v. Evans, 5 Q. B. 828 ; Lobdell v. Baker, 1 Met. 193 ; Noble v. The Northern Illinois, 23 Iowa, 109 (1867) ; Teter v. Hinders, 19 Ind. 93 (1862). See Henshaw v. Noble, 7 Ohio St. 226 (1857) ; Fitzsimmons v. Joslin, 21 Vt. 129 ; Crump v. U. S. Mining Co., 7 Gratt. 852. * See Coleman v. Riches, 16 C. B. 104 ; 29 Eng. Law & Eq. 323 ; Grant V. Norway, 10 C. B. 665 ; Hubbersty v. Ward, 8 Exch. 330. ° Brigham v. Peters, 1 Gray, 145 ; Mussey v. Beecher, 3 Cush. 517 ; Tuttle V. Cooper, 5 Pick. 417. Whether a principal, who has had the bene- fit of a contract made by his agent, is responsible for a deliberate fraud committed by his agent in the making of the contract, by which fraud alone 212 CONTRACTS OP AGENTS. [CHAP. III. § 216. On the same principle, notice to an agent, in respect to the subject-matter of his agency, is considered as notice to the principal.! The notice must, however, be given to the agent in the course of the very transaction to which it applies, or within so short a time previously as to create the presump- tion that it is in the memory of the agent, or the principal will not be bound.^ So, also, knowledge acquired by an agent in the course of business is the knowledge of his principal. ^ § 217. In all cases, where an authority is conferred upon an agent, whether it be express or implied, or whether it be of a special or general nature, it is always construed to include all the necessary or usual modes and means of so executing it as to accomplish the objects of the agency. For, to invest an agent with authority to do a certain act, and to deny him the means requisite to carry his authority into effect, would be idle and absurd. Whenever, therefore, an authority is conferred, all necessary suljordinate powers accompany it.* Thus, an authority to recover and receive a debt, will confer upon an the contract was obtained, qucere. See Udell v. Atherton, 7 H. & N. 172 (1861), in which the Court of Exchequer were equally divided on the ques- tion. Sec also Archbold v. Howth, Irish R. 1 C. L. 608 (1866), discussing Udell ('. Atherton. See further, Proudfoot v. Montefiore, Law R. 2 Q. B. 611 ; National Exchange Co. v. Drew, 2 Macq. 103 ; 32 Eng. Law & Eq. 1 ; Burnes v. Pennell, 2 H. L. C. 497. ' Dresser v. Norwood, 17 C. B. (n. s.) 466 (1864). In this case the court say- that when the agent of the buyer purchases on behalf of his principal goods of the fa( tor of the seller, the agent having present to his mind at the time of the purchase a knowledge that the goods he is buying are not the goods of the factor, though sold in his name, the knowledge of the agent, however acquired, is the knowledge of the principal. See also HiU v. North, 34 Vt. 604 (ISCl) ; Smith v. South Royalton Bank, 32 Vt. 341 (1859) ; Backman V. Wri-ht, 27 Vt. 187 (1855). ° Story on Agency, § 140 ; Hiern v. Mill, 13 Ves. 120 ; 1 Story, Eq. Jur. § tfJS ; Hargreaves v. Rothwell, 1 Keen, 159 ; 2 Liverm. on Agency, 2.15, 2:37 ; Lawrence v. Tucker, 7 Greenl. 195 ; Bracken v. Miller, 4 Watts & Seig. 102. ■' Sutton V. Dillaye, 3 Barb. 529. See Ross v. Houston, 25 Miss. 591. ' Howard v. Baillie, 2 H. Bl. 618 ; Story on Agency, § 58 et seq.; With- ington V. Herring, 5 Bing. 442 ; Rogers v. Kneeland, 10 Wend. 218 ; Peck V. Harriott, 6 S. & R. 146 ; 1 Bell, Coram. 387, art. 412, 4th ed. ; 3 Chitty on Com. and Manuf. 200. See PoUock v. Stables, 12 Q. B. 765 ; Bayliffe V. Butterworth, 1 Exch. 426. CHAP. III.J EXTENT OP AUTHORITY. 213 attorney the power of arresting the- debtor.^ So, also, an au- thority to settle losses on a policy, includes a power to refer the matter to arbitration.^ So, also, an agent employed to procure the discounting of a note or bill, may, if necessary, or proper, indorse it in his own name, or in that of the principal.^ So, also, all means justified by the usages of trade may be em- ployed by the agent to effect the object intended to be attained by the agency. Thus, under a general authority to sell, sales on credit for a reasonable time * may be made, if they be conformable to common usage, or to the previous habit of dealing between the parties ; but not otherwise.^ So the servant of a dealer in horses has an implied authority to bind his principal by wai*- ranty, though the latter give express orders to the contrary, if the buyer have not notice of the fact.® Where an authority, although conveyed in general and unlimited terms, is conferred in relation to the particular subject-matter of the agency, it will be restricted to such subject-matter, according to the gen- eral rules of construction.' Formal instruments are generally strictly construed, and the authority conferred thereby is limited by the terms, so as to embrace only such incidental powers as are necessary and proper to give full effbct thereto." Thus, a power of attorney to sell, assign, and transfer stock, will not include a power to pledge them for the agent's own debt.^ So, a power to bargain and sell land, will not confer ' Howard v. Baillie, 2 H. Bl. 618, 619, 620 ; Com. Dig. Attorney, C 16, citing Palmer, 894. ' Goodson V. Brooke, 4 Camp. 163. ' Fenn v. Harrison, 4 T. R. 177 ; Nickson v. Brohan, 10 Mod. 109 ; Hicks 1). Hankin, 4 Esp. 116 ; Ex parte Robinson, Buck, 113 ; Bayley on Bills, 5th ed. ch. 2, § 7. * Brown v. Central Land Co., 42 Cal. 267 (1871). * Forrestier v. Bordman, 1 Story, 43 ; Ekins v. Macklish, Ambler, 184, 186; Paley on Agency, by Lloyd, 3d ed. 198, note; Anon., 12 Blod. 514; Scott V. Surman, Willes, 407 ; Houghton o. Matthews. 3 Bos. & Pul. 489 ; Newsora v. Thornton, 6 East, 17; Goodenow v. Tyler, 7 Mass. 36; May V. Mitchell, 5 Humph. 365. See Towle v. Leavitt, 3 Foster, 360. « Howard v. Sheward, Law R. 2 C. P. 148 (1866) ; Brady v. Todd, 9 C. B. (n. s.) 592, holding it otherwise in case the principal is not a dealer. ' See post. Construction of Contracts. 8 Wiltshire v. Sims, 1 Camp. 258; Paterson v. Tash, 2 Str. 1178; Guerreiro v. Peile, 3 B. & Al. 616. » Attwood V. Munnings, 7 B. & C. 278, 283, 284 ; Ducarrey v. Gill, 214 CONTRACTS OP AGENTS. [CHAP. III. an authority to grant a license to a person to enter and cut timber on the land, though done bond fide, with a view of inducing him to buy.^ And a power to sell personal property does not necessarily confer a power to sign the principal's name to a contract of sale, so as to bind him under the statute of frauds.^ So, also, an authority to sell on credit does not include an authority to collect the price.^ § 218. So, also, an authority conferred by any written instru- ment is always restricted to those acts which are obviously incidental and occasional to the particular subject-matter to which they refer.* Thus, where a person was authorized to superintend a farm, he was held to possess no power to sell it, or the things belonging to it.° But, if the language of an instrument be susceptible of different interpretations, and the agent be in fact misled, and adopt that one which was not intended by the principal, the principal will, nevertheless, be bound. For he who occasions the mistake should suffer the injury.^ Indeed, wherever an express authority is conferred by informal instruments, such as letters of advice, or instruc- tions which are general in their terms, and convey a general authority, the rule of construction is more liberal than that applicable t(j formal and deliberate instruments.' § 219. Again, a promise of indemnity to an agent for the performance of all the acts ordered by his principal, is implied Mood. & Malk. 450 ; Withington v. Herring, 5 Bing. 442 ; Story on Asencv, § 02, 07; Rossiter v. Rossiter, 8 Wend. 494; Hogg v. Snaith, 1 Taunt. 347 ; Murray v. East Ind. Co., 6 B. & Al. 204, 210, 211 ; Hay v. Goldsmidt, 1 Taunt, r.4;) ; Bott v. McCoy, 20 Ala. 578. ' De Bouchout v. Goldsmid, 5 Ves. 211. Coleman v. Garrigucs, 18 Barb. 60. = Selple V. Irwin, 30 Penn. St. 513 (1858). ' Hubbard v. Elmer, 7 Wend. 446 ; Story on Agency, § 69 ; Kilgour v. Finlyson, 1 H. Bl. 155. ^ Story on Agency, § 71, 78, and cases cited; Cod. Lib. 2, tit. 13, 1. 16; Pothier, Pand. Lib. 3, tit. 3, n. 4; Guerreiro v. Peile, 3 B. «& Al. 616; Paterson v. Tash, 2 Str. 1178; Wiltshire v. Sims, 1 Camp. 258. " See Loraine v. Cartwright, 3 Wash. C. C. 151 ; Courcier v. Bitter, 4 M'a.sh. C. C. 551 ; De Tastett v. Crousillat, 2 Wash. C. C. 132 ; 1 Liverm. on Agtncy, KK) ; Story on Agency, § 79 ; Pickett v. Pearsons, 17 Vt. 470. ' Story on Agency, § 82. CHAP. III.] EXTENT OF AUTHORITY. 215 from the relation of the parties ; and even when he commits a trespass, he lias a claim for reimbursement of all damages he thereby sustains, provided he act bond fide, 'without suspicion of wrong, and in pursuance of orders.^ The principal is under an implied obligation to indemnify an innocent agent for obey- ing his orders, when the act would have been lawful in respect to both, if the principal had the authority which he claimed.^ § 220. We have seen that an agency may be created by im- plication and presumption from circumstances, or from the acts of the parties ; and where this is the case, the implied agency will be restricted to the purposes for which it was obviously created, and is limited by the general usage, course, and scope of the business for which it was created. If it arise by im- plication from numerous acts, done by the agent with the tacit assent of the principal, it must be limited to acts of a similar nature. If it be an implied authority to do a particular act, the agency must be limited to the appropriate means of accomplishing that act only.^ An authority is, however, to be inferred often from the nature of the business of the agent ; as, if one send goods to an auction-room, or to a broker's, an implied authority to sell arises, because it is not to be supposed that they were sent there for any other purpose.* But, where such a presumption does not naturally grow out of the circum- stances of the case, no such agency will be implied. Thus, if a person send his watch to^a watchmaker, to be repaired, and the watchmaker sell it, inasmuch as possession of the watch does not necessarily imply either ownership or a power to sell it, the owner would not be bound by such a sale.^ § 221. There is, however, one modification of this rule, which obtains in cases where the agency is enlarged by the necessity of the case. Whenever, therefore, extraordinary • Gower V. Emery, 18 Me. 79. See post, § 261. " Howe V. Buffalo, N. Y., &c., Eailroad Co., 37 N. Y. 297 (1867). •• Odiorne v. Maxoy, 13 Mass. 178; Salem Bank v. Gloucester Bank, 17 Mass. 1 ; Story on Agency, § 87 ; 1 Liverm. on Agency, 36 to 40 ; Paley on Agency, by Lloyd, 161, 162, 3d ed. * Saltus V. Everett, 20 "Wend. 267 ; Pickering v. Busk, 16 East, 88 ; 2 Kent, Comm. lect. 41 , p. 622. 5 Pickering v. Busk, 15 East, 38. 216 CONTRACTS OP AGENTS. [CHAP. III. emergencies arise, requiring the agent to overstep the limits of his authority, in order to attain the object contemplated by the agency, he will be justified in assuming extraordinary powers, in consideration of the necessities of the case. Thus, although a factor be required by his orders to sell at a particular price, yet, if the goods be of a perishable nature, so that the sale is indispensable to prevent a greater loss, he will be justified in selling them. So, also, the master of a ship is, in times of necessity, invested with an added authority, exceeding his ordinary power, in respect to the ship and cargo ; and in cases of great emergency, may sell them, or hypothecate the ship.^ So, also, a supercargo is not bound to observe the exact terms of his instructions, if the interests of the owner would be thereby sacrificed, or the objects of the voyage frustrated.^ The same principle applies also to cases where the agency is primarily created by necessity ; as where a mere stranger, under circumstances of necessity, makes himself agent for the purpose of saving property from injury or destruction. So, also, salvors may dispose of the propei'ty saved by them, in behalf of the parties in interest, if it be of such a nature that it cannot be kept without injury .^ So, also, if goods be exported, and the vendee, upon their arrival, refuse to receive them, and it would not comport with the interest of the vendor to have them returned, the vendee may sell them for the bene- fit of the vendor, and hold him liable, in an action for damages, to the amount of the difference, giving him the benefit of a sale in tlie foreign market.* But an agent employed in driving stock has no power to dispose of it on the ground that it has become foot-sore and unable to travel.^ ' Hawtayne v. Bourne, 7 M. & W. 699 ; 2 Kent, Comm. lect. 41, p. 614, 8d ed. ; Forrestier v. Bordman, 1 Story, 43 ; 3 Chitty on Com. and Manuf. 218 ; 1 Comyn on Cont. 236 ; The Gratitudine, 3 Rob. Adm. 255 to 258. See post, as to the authority of masters of vessels. ^ FoiTestier v. Bordman, 1 Story, 43. ' Story on Agency, § 142 ; Story on Bailments, § 83, 189 ; Paley on Agency, by Lloyd, "JS, 29, 80, and note m; Kemp v. Pryor, 7 Ves. 240; Cornwal v. Wilson, 1 Ves. 509, by Lord Hardwicke. ■* Kemp V. Pryor, 7 Ves. 240, 241, 242, 247, by Lord Eldon; Story on Agency, § 143 ; Cornwal v. Wilson, 1 Ves. 509, by Lord Hardwicke. ' Beitz V. Martin, 12 Ind. 306 (1859). CHAP. III.j FORM AND EXECUTION. 217 FORM AND EXECUTION OP AN AGENT'S POWER. § 222. We now come to the form and execution of an agent's power. And, first, we shall consider the proper form in which an agent should execute a contract in be- half of his principal, so as to avoid all personal responsibility thereupon. The general rule applicable to this subject is, that the principal will neither be personally bound by a specialty signed by his agent, nor capable of suing thereupon, unless it appear on its face to be his deed, and unless it be made in his name.^ The reason of this rule is, that the instru- ment would be utterly without legal effect, unless it were construed to be the deed of the agent ; for parol evidence is inadmissible to contradict the manifest meaning of the terms actually used. Every instrument under seal, therefore, although it be executed by the agent, within the scope of his authority, and in behalf of his principal, will be considered as the deed of the agent. And even if an agent should commence a deed by a description of his agency, thus, " I (A. B.), as agent of 0. D., do hereby grant, sell," &o., or should sign and seal it " A. B. for C. D.," it would be considered as his own deed, and not as the deed of his principal.^ But if a sealed instrument purport to be the deed of the principal, the agent is not personally bound, unless it contain apt words to bind him personally.^ The power of attorney, given by a corporation, to execute a ' Story on Agency, § 147, 161, and cases cited ; Com. Dig. Attorney, C. 14 ; 2 Kent, Comm. lect. 41, p. 629 ; Combes's Case, 9 Co. 77 a ; 1 Roll. Abr. Authority, p. 330, 1. 87 ; United States v. Parmele, 1 Paine, C. C. 252 ; Clark's Executors v. Wilson, 3 Wash. C. C. 560. 2 Frontin v. Small, 2 Ld. Kaym. 1418 r s. c. 2 Str. 705 ; Wilks v. Back, 2 East, 142; Fowler v. Shearer, 7 Mass. 14; Elwell v. Shaw, 16 Mass. 42; s. c. 1 Greenl. 339 ; Copeland v. Mercantile Ins. Co., 6 Pick. 198 ; Lutz v. Linthicum, 8 Peters, 165; Bacon v. Dubarry, 1 Ld. Raym. 246; Paley on Agency, by Lloyd, 181 ; Appleton v. Binks, 5 East, 148 ; Cayhill v. Fitz- gerald, 1 Wils. 28, 58 ; Brinley v. Mann, 2 Cush. 387 ; Anon., Moore, 70. ^ Abbey v. Chase, 6 Cush. 57 ; Stetson v. Patten, 2 Greenl. 358 ; Delius v. Cawthorn, 2 Dey. 90 ; Jefts v. York, 4 Cush. 371 ; 8. o. 10 Cush. 392. And gee Moor v. Wilson, 6 Foster, 332 ; Haven v. Adams, 4 AUen, 80. 218 CONTRACTS OF AGENTS. [CHAP. III. deed, must be by vote or under the seal of the corporation, and not under that of the attorney.^ So, also, if a deed be made to a person through his agent, it should be made to the prin- cipal by name.^ Yet if the name of the principal be inserted in the body of a specialty as grantor, and also be subscribed by the agent in connection with his own name, it will be sufficient. But it would not be an invalid execution of a deed by an agent, to sign merely his principal's name, without adding any words indicating an agency.^ The proper mode of subscrib- ing an instrument, as agent, is to sign the name of the princi- pal first (A. B.), and then to add, " by his attorney," or " by his agent" (C. D.).* But the mere order in which the names are written is not material, the execution being otherwise properly made.^ Unless the deed purport on its face to be the deed of the principal, it will be considered as the deed of the agent, if his name be first signed ; upon the ground that whatever follows the name first signed is mere description or identification of the person bearing it, and not intended as a limitation of his liability. § 223. This rule, however, only applies to instruments under seal, and does not extend to instruments not under seal.^ In all cases of parol contracts, especially if they be maritime or commercial coiitracts, which are generally carelessly and loosely drawn, the intention of the parties constitutes the rule of inter- pretation, whenever it can be deduced from the consideration of the whole instrument.^ Thus, where a note began, " I prom- ■ Bank of Columbia v. Patterson's Adm., 7 Cranch, 299-305; Damon V. Granby, 2 Pick. 845 ; Tippets v. Walker, 4 Mass. 595. A deputy may, however, do an act, and sign his whole name, and yet bind his principal ; for the deputy in law has the whole power of the principal, which the agent has not. Parker v. Kett, 1 Salk. 95 ; Craig v. Radford, 3 Wheat. 594. = 1 Stair, Inst, by Brodie, B. 1, tit. 12, § 16 ; Story on Agency, § 151. ' Forsyth v. Day, 41 Me. 382; Hunter v. Giddings, 97 Mass. 41. The dictum of Fletcher, J., in Wood v. Goodridge, 6 Cush. 120, does not seem to have been approved in the same court. And see Jones m. Phipps, Law E. 3 Q. B. 567. ^ Wilks v. Back, 2 East, 142. " Mussey v. Scott, 7 Cush. 215. * Bac. Abr. Leases for Years, L 10; Com. Dig. Attorney, C. 14; Combes's Case, 9 Co. 77. ' Story on Agency, § 154, and cases cited; N. E. Mar. Ins. Co. v. De CHAP. III.] FORM AND EXECUTION. 219 ise," and was signed, " Pro C. D., A. B.," it was held to bind the principal.^ And a bond so signed was also held not to be personally binding on the agent.^ So, also, where A., being a duly authorized agent, wrote on a note, " By authority from B., I hereby guarantee the payment of this note," and signed his own name ; it was held to be the guaranty of the principal and not of the agent.^ And, where A., as agent, signed a receipt, " for the owners," he was held not to be personally liable.* So, also, where there is only a verbal contract, the agent will not be personally liable, if he inform the party, with whom he deals, of his agency. Thus, where the defendant employed the plain- tiff, who was a paper-hanger, to do a job at Tippell's house, and informed him that it was on Tippell's account ; it was held that the defendant was not chargeable with the price of the work.^ § 224. There is, however, one modification to this doctrine, which obtains whenever it does not clearly appear, from the terms or the nature of the contract, that the agent intended to assume no personal responsibility ; and, in such case, he will be personally liable, whether the instrument be sealed or not. Wolf, 8 Pick. 66 ; Stackpole v. Arnold, 11 Mass. 27 ; Hunter u. Miller, 6 B. Mon. 612 ; Rogers v. March, 33 Me. 106 ; Cooke v. Wilson, 1 C. B. (n. s.) 163 (1866) ; Barlow v. Cong. Soc. in Lee, 8 Allen, 460. ' Long V. Colburn, 11 Mass. 97. See also Pentz v. Stanton, 10 Wend. 271; Emerson v. Prov. Manuf. Co., 12 Mass. 237; Ballou v. Talbot, 16 Mass. 461 ; Mann v. Chandler, 9 Mass. 335 ; Hills v. Bannister, 8 Cow. 31 ; Barker v. Mechanic Fire Ins. Co., 3 Wend. 94; Mott v. Hicks, 1 Cow. 616 ; Brookway v. Allen, 17 Wend. 40. See also Ex parte Buckley, 14 M. & W. 473. In this case, one of several partners signed a bill, " For John Clarke, Kichard Mitchell, Joseph Phillips, and Thomas Smith," and it was held that the firm were liable. The case of Hall v. Smith, 1 B. & C. 407, in which a different doctrine was held, is therein expressly overruled. See also Mr. Justice Story's remarks on Hall v. Smith, Story on Partnership, § 143. ^ Grubbs v. Wiley, 9 Sm. & M. 29 ; Bray v. Kettell, 1 Allen, 80. ' N. E. Mar. Ins. Co. v. De Wolf, 8 Pick. 66 ; Passmore v. Mott, 2 Binn. 201. See also Wiley v. Shank, 4 Blackf. 420 ; Fiske v. Eldridge, 12 Gray, 474; Haverhill Mut. Fire Ins. Co. v. Newhall, 1 Allen, 130; Bank of British North America v. Hooper, 5 Gray, 667 ; Lindus v. Bradwell, 6 C. B. 583; Slawson V. Loring, 6 Allen, 340 ; Brown v. Parker, 7 Allen, 337. * Waddell v. Mordecai, 3 Hill (S. C), 22. See also Ex parte Buckley, 14 M. & W. 473 ; Lerned v. Johns, 9 Allen, 419; Ellis v. Pulsifer, 4 Allen, 166. ' Owen V. Gooch, 2 Esp. 567. 220 CONTRACTS OF AGENTS. [CHAP. Ill, The reason of this rule is, that it being perfectly competent for an agent to assume any personal responsibility, he must be presumed to have intended to bind himself, unless the terms of the instrument be expressive of a different intention. ^ Thus, where a committee of a town, being authorized to build a bridge, made an agreement for the work, headed " agreement between " K., S., and H., " committee of the town of" W., and therein the committee promised to pay, it was held, that the committee intended to bind themselves, and that they were personally responsible.^ So, also, where a president of an incorporated company, having authority to sign notes, signed one by which he promised to pay, it was held that he \\"as liable upon his personal engagement, although he described himself as the president of sucli company.^ And where the solicitors or the assignees of a bankrupt gave an agreement in these terms, " We, as solicitors, &c., do hereby undertake to pay," it was held that they were personally bound.* The principal will, however, be by no means exonerated, although he be unknown at the time of making the contract, unless the act done be actually beyond the scope of the agent's authority, or unless exclusive credit be given to the agent.^ Of course, where one executes an instrument in the name of another, assuming to be his agent, but having in fact no authority so to act, he is him- self responsible,^ in some form of action. ' Paley on Agency, by Lloyd, ch. 6, § 1, 2, p. 378, 402; Stackpole v. Arnold, 11 Mass. 27, 29 ; Leadbitter v. Farrow, 5 M. & S. 345; Kennedy v. Gouveia, 3 Dowl. & Ryl. .503 ; Stevens v. Hill, 5 Esp. 247 ; 2 Kent, Comm. lect. 41, p. 630, 631, 3d ed. ; Story on Agency, § 155 ; Appletoa v. Binks, 5 East, 148; Cayhill v. Fitzgerald, 1 Wils. 28, 58; Cass v. Ruddle, 2 Vern. 280 ; Norton v. Herron, Ry. & Mood. 229 ; s. C. 1 C. & P. 648 ; Duvall v. Craig, 2 Wheat. 45; Higgins v. Senior, 8 M. & W. 834; Savage v. Rix, 9 N. H. 263; Tanner v. Christian, 4 El. & B. 591; 29 Eng. Law «& Eq. 103. ' Simonds M.Heard. 23 Pick. 120; Blanchardu.Blackstone, 102Mass. 343. ' Barker v. Mechanic Fire Ins. Co., 3 Wend. 94. * Burrell v. Jones, 3 B. & Al. 47. See also Norton v. Herron, 1 C. & P. 648; Eaton v. Bell, 5 B. & Al. 34; Parker v. Winlow, 7 El. & B. 944; Deslandes v. Gregory, 2 El. & El. 602 ; Fullam v. West Brookficld, 9 AUen, 1. * Higgins i,. Senior, 8 M. & W. 834; Trueman v. Loder, 11 Ad. & EL 589. See Negus v. Simpson, 99 Mass. 388; Fleet v. Murton, Law R. 7 Q. B. 126, 131 (1871) ; Calder v. DobcU, Law R. 6 C. P. 486 (1871). « Pahuer v. Stephens, 1 Denio, 471 ; Collen v. Wright, 8 El. & B. 647; Weeks v. Propert, Law R. 8 C. P. 427 (1873). CHAP. III.] POBM AND EXECUTION. 221 § 225. This modification is not, however, very extensive in its operation ; for, whatever may be the terms of a parol con- tract, made within the scope of Ms authority, he will not be personally liable, if he can show clearly that exclusive credit was given to his principal. Unless this fact can be made out, however, the party contracting with an agent by parol may sue him primarily, if he be bound by the form of his contract. Thus, a policy of insurance made by an agent in his own name, though for the benefit of the principal, will be considered as the contract of each party.^ But the principal cannot claim that the agency relation has been changed by the fact that the agent has rendered himself personally liable on a contract made on behalf of the principal.^ § 226. Where, however, the situation and business of the agent indicate that he is contracting in hehalf of another per- son, and not on his own account, and particularly where an agency is avowed, although the name of the principal be not disclosed ; the common law will create a responsibility on the part of the principal, although the contract contain no mention of him. Thus, where factors or brokers, whose whole business is that of agency, purchase goods for their principal in their own name, by written contract, the principal will be bound immediately, so that he may sue and be sued thereon.^ So, also, where the master of a ship makes a written contract for repairs, it will be considered as the several contract of both the ' Wolff V. Horncastle, 1 Bos. & Pul. 323 ; Lucena v. Craufurd, 3 Bos. & Pul. 98 ; De Vignier v. Swanson, 1 Bos. & Pul. 346, n. ; Bell v. Gilson, 1 Bos. & Pul. 343 ; Marsh, on Ins. B. 1, ch. 8, p. 311, 312, 2d ed. " Dow V. Worthen, 37 Vt. 108 (1864). 3 Story on Agency, 161, 162, and cases cited; Paley on Agency, by Lloyd, 207, 208 ; 1 Bell, Coram. 385, 386, § 408, 409, 410, 4th ed. ; 2 Kent, Comm. lect. 41 ; Atkyns v. Amber, 2 Esp. 493 ; Snee v. Prescot, 1 Atk. 248 ; Morris v. Cleasby, 4 M. & S. 666 ; Paley on Agency, by Lloyd, ch. 2, § 2, p. HI, note 3 ; ib. cb. 4, § 1, p. 324 ; Edwards v. Golding, 20 Vt. 38; Squires v. Barber, 37 Vt. 658 (1865). If the consignee of goods, at the time he received them, acted only as agent of a third party, and the carrier must have known the fact, the consignee is not personally liable for the freight, though he does not notify the carrier that he has acted as agent. Boston & Maine R. Co. v. Whitcher, 1 Allen, 497 ; Dart v. Ensign, 49 N. Y. 619 (1872). See Amos v. Temberley, 8 M. & W. 798; Sanders v. Van Zeller, 4 Q. B. 260. 222 CONTRACTS OP AGENTS. [CHAP. III. master and the owner.i The same exception also governs in the case of a bottomry bond entered into by the master of a ship, and made in his own name.^ And a charter-party, or bill of lading, made by the master, and signed in his own name, in the usual course of the employment of the ship, will bind the owner ; and although the owner cannot be sued directly upon such bond or charter-party, because it is not his deed, he is, nevertheless, bound by it.^ Indeed, generally, when an agent contracts in his own name, he only adds his own personal responsibility to that of his principal, wherever the principal would be bound, if the form only of the contract were differ- ent.* In such cases, the equitable doctrine supersedes the strict rules of the common law. And wherever an agent has contracted within the scope of his authority, and the contract would not be binding upon the principal at law, it will be enforced in a court of equity. ^ § 227. Ordinarily, an agent contracting on behalf of the government, or of the public, is not personally bound by such contract, because it is not to be presumed either that a public agent intends to bind himself personally, or that a party con- 1 Abbott on Shipping, pt. 2, ch. 3, § 1, 2, 3 (ed. 1829) ; James v. Bixby, 11 Mass. 36 ; IngersoU v. Van Bokkelin, 7 Cow. 670. 2 Abbott on Shipping, pt. 2, ch. 2, § 1 to 8 ; 3 Kent, Comm. lect. 46, p. 161, 162, 163, 3d ed. ; 1 Bell, Comm. § 446-466, 4th ed. 8 Abbott on Shipping, pt. 2, ch. 2, § 5 ; Blood v. Goodrich, 9 Wend. 68 ; 1 Liverm. on Agency, ch. 2, § 3, p. 35, 36 ; 3 Kent, Comm. lect. 46, p. 162, 163, 3d ed. ; Gardner v. Lachlan, 8 Sim. 126, 128 ; Meyer v. Barker, 6 Binn. 234; Schack t>. Anthony, 1 M. & S. 573. ' Hopkins v. Lacouture, 4 La. 64 ; Mechanics' Bank v. Bank of Colum- bia, 5 Wheat. 326 ; Higgins v. Senior, 8 M. & W. 834; Beebee v. Robert, 12 Wend. 413. " The suppression of the principal's name is entirely consistent with the practice of many trades, to conceal transactions of specu- lation. The effect is that if the broker enters into contracts in his own name, and has a principal, those whom he contracts with will have the responsibility both of the principal and of the broker.'' Per Bovill, C. J., in Calder m. Dobell, Law R. 6 C. P. 486 (1871). See Thomson «. Davenport, 9 B. & C. 78; Addison v. Gandassequi, 4 Taunt. 574; Paterson v. Gandasequi, 15 East, 62 ; Mortimer v. McCallan, 6 M. & W. 58. And where the dealer has no knowledge of the existence of a principal, and there is nothing to put him on inquiry, he may set oif a debt due from the agent in an action by the principal. Squires v. Barber, 37 Vt 558 (1865). ^ Clark's Executors v. Van Eiemsdyk, 9 Cranch, 163 ; Van Reimsdyk r. Kane, 1 Gall. 630 ; Story on Agency, § 162. CHAP. III.J FORM AND EXECUTION. 228 tracting with him, in his public character, means to rely upon his individual responsibility.^ And therefore a quartermaster of the army is not personally responsible for the payment of services of a clerk employed by him in government work alone.^ § 228. But if a contract expressly state the agency of the party on the face of it, he will not incur any personal liability thereupon, unless he acted without authority. Nor is it neces- sary that there should be an express declaration of agency in the contract, if it clearly appear from the general context of the instrument, that he is dealing as agent, and does not in- tend to assume personal responsibility thereon.^ Thus, where Richard Mitchell signed a note of hand, promising to pay a sum of money " for John Clarke, Richard Mitchell, Joseph Phillips, and Thomas Smith," and it appeared that he was the agent of Clarke, Phillips, and Smith, it was held that he could not be sued alone upon the note, but that all the four persons should have been made parties.* So, also, where an auc- tioneer, in the sale of an estate, made the following memoran- dum, " I, B. Driver, as agent for the vendor, hei'cby agree to sell to the above-named R. H. Gaby, &c.," it was held, in an action brought against the auctioneer, on account of the de- fault of the vendor to deliver an abstract of title, that the agent was not personally liable.^ So, also, although the written con- tract contain no expression of agency, yet if the letters or pa- pers previous to the contract clearly indicate that the party is contracting as agent, and assumes no personal liability, he will only be liable as agent.^ § 229. Where an authority is coupled with an interest in the property itself, it will bind the principal although it be ex- ' Perrin v. Lyman, 32 Ind. 16 (1869), Gregory, J. ; Hodgson v. Dexter, 1 Cranch, 345 ; Nichols v. Moody, 22 Barb. 611 ; Belknap v. Reinhart, 2 Wend. 375. '' Perrin v. Lyman, supra. = Downman v. Jones, 14 Law J. (n. s.) Q. B. 228 ; 7 Q. B. 103 ; Amos V. Temperley, 8 M. & W. 798 ; Ex parte Buckley, 14 M. & W. 469 ; Gaby tf. Driver, 2 Y. & J. 555 ; Spittle v. Lavender, 5 Moore, 270 ; Owen v. Gooch, 2 Esp. 567. * Ex parte Bucldey, 14 M. & W. 469. See Aspinwall v. Torrance, 1 Lans. 381 (1870). * Gaby v. Driver, 2 Y. & J. 555. See also Spittle v. Lavender, 5 Moore, 270. * Downman v. Jones, 14 Law J. (n. s.) Q. B. 228 ; 4 Q. B. 235, n. 224 CONTBACTS OP AGENTS. [CHAP. III. ecuted in the name of the agent. ^ Thus, where a factor has the legal title to property, subject to the equitable title of the owner, and where he is authorized to sell in his own name, he may so sell it, and pass the legal title. ^ The same rule applies to cases where there is an authority coupled with an interest in mortgages, and other conveyances of real and personal prop- erty to the grantee, and the grantee is authorized to sell under certain circumstances. ^ § 230. Having already considered the form which is neces- sary in the execution of an authority, we next come to the con- sideration of the actual execution of it. The general rule is, that no act or contract by an agent, however proper in form, is binding upon his principal, unless it be within the limits of his authority.** He is, therefore, bound to observe the exact instruc- tions of his principal ; and if his act or contract vary materially therefrom, in nature, extent, or degree, it will not be binding upon the ])rincipal, whether the variation be beneficial or not ; for the question is, whether the agent has done his duty strictly, and not whether he has acted with good motives. If, there- fore, an agent, who is authorized to do an act conditionally, do it absolutely, the principal will not be bound. So. also, if he be commissioned to buy an entire thing, and he buy a part of it only, the purchase will not be binding on him ; or if, by mistake, he orders a greater quantity than the principal di- rected.^ But a trifling variation from the terms of his agency will not absolve the principal from lialjility.^ ' Hunt V. Kousmaniere, 2 Mason, 2J4 ; 3 Mason, 291; 8 "Wheat. 174; 1 Peters, 1. ^ Coates V. Lewes, 1 Camp. 444; Baring v. Corrie, 2 B. & Al. 137; Martini v. Coles, 1 M. & S. 140, 147 ; Pickering v. Busk, 16 East, 38 ; Story on Agency, § 164. ^ Hunt V. Kousmaniere, 2 Mason, 244 ; S Mason, 294 ; 8 Wlieat. 174 ; 1 Peters, 1. " Upton V. Suffolk Co. Mills, 11 Gush. 586 ; Clark v. LiUie, 39 Vt. 405 (1867). 5 Honkel v. Pape, Law R. 6 Exch. 7 (1870) . The defendant in this case wrote a telegraphic order for three rifles from the plaintiff. The operator mistook the word " three " for " the," and the plaintiff, I'elying upon a pre- vious communication, sent fifty rifles. Defendant declined to pay for more than three ; and the court sustained him. « Story on Agency, § 165, 170, 175, 176, 192; Ure u. Currell, 4 Mar- CHAP, in.] FORM AND EXECUTION. 225 § 231. If the agent exceed his authority, by doing something cumulative and additional to the complete execution of his power, the principal will be liable for all, except such unau- thorized excess. But where the power is imperfectly executed, and the rightfully executed part cannot be separated from the excess, the principal is absolved from all liability.^ Thus, if an agent were empowered to procure insurance upon a ship for two thousand dollars, and he should procure a policy for two thousand dollars on the ship, and two thousand dollars additional on the cargo, the principal would be bound by the policy on the ship, and not by the policy on the cargo ; unless under special circumstances.^ But, if an agent, being author- ized to sign a note for six months, should sign it for sixty days, it would be utterly void against the principal.^ So, where an agent is authorized to buy a certain quantity of goods, he will not be bound to purchase the exact quantity, if it be divisible, or if the quantity do not go to the essence of the contract. Thus, if an agent, being authorized to buy a hundred bushels of corn, at a certain price, should buy two hundred, the princi- pal would be liable for the one hundred. So, also, if in such case the agent should buy only fifty, being unable to procure more at the price at which he was limited, the principal would be bound thereby, unless the exact quantity were of the essence tin (n. s.) , 502 ; Manella v. Barry, 3 Cranch, 415 ; Co. Litt. 258 6 ; Paley on Agency, by Lloyd, 29 ; Howard v. Baillie, 2 H. Bl. 623 ; 2 Kent, Coram, lect. 41, p. 618. See Ireland U.Livingston, Law R. 2 Q.B. 99 (1866) ; Johnston u. Kershaw, Law R. 2 Exoh. 82 (1867) . If it be generally known that an agent's authority in a particular kind of transaction is almost always limited, he cannot bind him with whom he contracts, in favor of his principal, in excess of his actual authority. Baines v. Ewing, Law R. 1 Exch. 320 (1866), criticising Story, Agency, § 131, 4th ed. ' Story on Agency, § 166; 1 Story, Eq. Jur. § 96, 177, and note; Sug- den on Powers, 3d ed. ch. 5, per tot. and especially § 8 ; Harg. note to Co. Litt. 258 a; Bright v. Boyd, 1 Story, 487; Zouch v. Woolston, 2 Burr. 1146; Alexander v. Alexander, 2 Ves. 644; Com. Dig. Attorney, C. 15; 1 Liverm. on Agency, ch. 5, § 1, p. 101, 102 ; Campbell v. Leach, Ambl. 740 ; Jenkins u. Kemishe, Hard. 395 ; Roe v. Prideaux, 10 East, 158 ; Dig. Lib. 17, tit. 1, 1. 33. See Reid u. Dreaper, 6 H. & N. 813 (1861). " 1 Liverm. on Agency, ch. 6, § 1, p. 101, 102 ; Story on Agency, § 169, 170. ' Batty V. Carswell, 2 Johns. 48. VOL. 1. 15 226 CONTRACTS OP AGENTS. [CHAP. HI. of the contract. But, if tlie authority were to purchase the fee of a certain estate, and the agent should purchase a part of it, or a life-interest in it, the principal would not be bound ; because the entirety, or the nature of the estate, would form an essential consideration of the purchase.^ DUTIES AND LIABILITIES OP AN AGENT TO HIS PRINCIPAL. § 232. An agent is bound to exercise only ordinary dili- gence, and reasonable skill ; and he is responsible only for such injuries as arise from a want thereof.^ Ordinary diligence is that diligence which persons of common prudence use in the conduct of their own affairs. Reasonable skill is the average skill possessed by persons of common capacity, employed in the same business.^ The mere fact, that an agent has sold or let property at an undervalue, will not make him responsible, if it appear that he acted in entire good faith.* But in a very recent case^ the court say that it is well settled that an agent employed to sell land is held to the strictest fairness and integ- rity, and is bound to act in the utmost good faith ; so that he cannot himself become the purchaser, and so that if he is au- thorized to sell land at a fixed price, and sells for a greater price, he must account to his principal for the excess.® § 233. Every agent is bound to execute the incidental orders and instructions of his principal, whenever, for a valuable con- sideration, he has undertaken to perform certain oflEices or duties out of which they spring. Nor does it matter, whether ' 2 Kent, Comm. lect. 41, p. 618. = Evans V. Potter, 2 Gall. 13; FuUer v. Ellis, 39 Vt. 345 (1867). ^ Story on Bailments, § 431 to 434; Jones on Bailments, 94, 98, 99; Denew t>. Davc-rell, 3 Camp. 451; Seare v. Prentice, 8 East, 848; Simpson V. Swan, 3 Camp. 291; Madeira v. Townsley, 12 Martin, 84; Davtnall v. Howard, 4 B. & C. o-to ; Story on Agency, § 183, and cases cited ; Leveriok v. Meigs, 1 Cow. 645. The same rule prevails in regard to diligence, in the Roman law, the Scotch law, and the French law. Hei- nec. Elem. Juris, Lib. 3, tit. 14, § 788; Id. Pand. Lib. 17, tit. 1, § 233; Pothier, (Euvres, edit. 1681, 4to, p. 455; Ersk. Inst. B. 3, tit. 1, § 21 ; Id. tit. 3, § 36; BeD, Comm. § 411, p. 387. * Dyas V. Cruise, 2 Jones & Lat. 460. See Gorman «. Wheeler, 10 Gray, 362. 6 Kerfoot V. Hyman, 52 111. 612 (1869). See Grumley v. Webb, 44 Mo. 444. « Merryman v. David, 31 lU. 404. See Leake v. Sutherland, 26 Ark. 219 (1868). CHAP. III.] DUTIES AND LIABILITIES. 227 such orders or instructions be expressly given, or arise from im- plication, either from the habits of the parties in their previous intercourse, or from the general usage of trade.^ Thus, an agent having the goods of his principal in his hands, is bound to in- sure them in three instances. First, where there is a positive order. ' Secondly, wherever the usage of trade, or the previous habit of dealing between the parties creates an implied obliga- tion to insure them ; although there be no special order in the particular case. Thirdly, where a merchant abroad sends bills of lading to his correspondent here, and ingrafts thereupon an order to insure, as the implied condition on which the bills of lading are to be accepted, the agent is bound to obey, if he accept them.^ In these three instances, the agent will render himself responsible for all losses and injuries, growing out of the omission to insure. But, unless something have been held out by the agent to the principal to induce the belief that he will procure insurance, he will not be compelled to insure. ^ § 234. Wherever any duties grow reasonably out of the orders of the principal, so that a proper attention to the facts stated therein, or to the condition or situation of the property, would have induced persons of reasonable skill to perform such duties, the agent will be responsible for any loss arising from' his neglect.* Thus, where A., being an insurance broker, was employed by B. to insure goods for a part of a voyage from Malaga to Dublin, namely, from Gibraltar to Dublin, B. intending to take the risk of the preceding portion of the voy- age on himself, and A. effected an insurance on goods, " at and from Gibraltar to Dublin, beginning the adventure from the 1 Story on Agency, § 189 et seq. See Williams ». Higgins, 30 Md. 404 (1868). 2 Smith V. Lascelles, 2 T. R. 189; Marsh, on Insurance, B. 1. ch. 8, p. 269, 297 i 1 Liverm. on Agency, ch. 8, § 1, p. 323, 325, 326 ; Morris v. Summerl, 2 Wash. C. C. 203 ; 8. c. Marsh, on Ins., by Condy, note to p. 301 ; Paley on Agency, by Lloyd, 18; 1 Phillips on Ins. ch. 22, p. 519 to 624 ; Wallace v. Tellfair, 2 T. R. 188, note ; Story on Agency, and cases cited ; Moore v. Mourgue, Cowp. 479 ; Comber v. Anderson, 1 Camp. 523. ' Smith V. Lascelles, 2 T. R. 189. See Schaeffer v. Kirk, 49 111. 251. * Park V. Hammond, 6 Taunt. 495 ; s. C. 4 Camp. 344 ; Mallough v. Bar- ber, 4 Camp. 150 ; Fomin v. Oswell, 3 Camp. 357 ; 1 Liverm. on Agency, 352. 372, 373, 374; Paley on Agency, by Lloyd, 18. 228 CONTRACTS OP AGENTS. [CHAP. III. loading thereof on board at Gibraltar," and the vessel was lost after leaving Gibraltar; it was held, that if A. had paid a proper attention to the facts, he would have known that the goods were to be laden at Malaga ; and that he was therefore liable for his negligence in insuring goods to be laden at Mal- aga, — no goods having, in fact, been laden at the latter port.-' § 235. Whenever the agent receives instructions, he must comply with them faithfully, unless they be either unlawful, or unless some sudden and unforeseen emergency arise, not con- templated in such instructions ; in which 'case, if strict adher- ence to them would either operate as an injury, and frustrate the intention of the principal, or would be impossible, he wiU be excused therefrom.^ But in all other cases, he must obey his instructions ; and although the act done in violation there- of be intended for the benefit of the principal, it wiU. not ex- cuse him. Every loss, growing out of a non-compliance with his orders, must be borne by him personally,^ and all the profit accruing therefrom enures to the benefit of the principal. But, if the main ol^ject of the orders be attained, without any additional expense or risk, a slight and unimportant deviation from their literal terms will not subject the agent to liability. Thus, if an agent be limited to a certain price for the pur- chase of goods, and he exceed it, but make up such excess by a saving in some other part of the same business, as in the expense of shipping them, he would be excused ; at least in equity.* § 236. Where the agent receives no instructions, he must conform to the usage of trade or the custom applicable to the particular agency ; and any deviation therefrom, unless it be justified by the necessity of the case, will render him solely liable for all the loss or injury resulting from it.^ Thus, if an ' Park V. Hammond, fi Taunt. 495 ; s. c. 4 Camp. 344. = Catlin V. Bull, 4 Camp. 183 ; Dusar v. Peril, 4 Binn. 861 ; 3 Cliitty on Com. and Manuf ch. 3, p. 218 ; Story on Agency, § 193-197. = See Wilson v. Wilson, 26 Penn. St. 394; Scott v. Rogers, 31 N. Y. 676 ; Johnson v. New York Central Railroad, 31 Barb. 198. ■* Cornwal v. Wilson, 1 Ves. 519 ; Smith on Merc. Law, B. 1, eh. 5, § 2 ; 3 Chitty on Com. and Manuf. ch. 3, p. 219, note 1 ; Story on Agency, § 85, 198. 5 Story on Agency, § 96, 185, 199 ; 3 Chitty on Com. and Manuf. ch. 3, p. 215, 216 ; Young v. Cole, 3 Bing. N. C. 724 ; Belchier v. Parsons, Ambler, CHAP. III.] DUTIES AND LIABILITIES. 229 agent should sell upon credit, when the usage was to make such sales for cash ; or should omit to present notes taken by him, for payment ; or should allow further time for the pay- ment of them, after they become due ; he would be personally responsible.-' So, also, the same rule would apply, if in insuring goods, he should omit the usual clauses inserted in a policy, and a loss should occur which would have been covered by such clauses.2 So, also, if, following the usage, he should appoint a sub-agent, the sub-agent would in like manner be responsible to the principal or agent for reasonable diligence and skill. But, if the agent used reasonable diligence in appointing him, he would not be responsible for the sub-agent's neglect or fraud.^ Yet, if the compliance with such usage would, in a particular case, be injurious to the interests of his principal, he will not only not be bound to comply with it, but if he do, knowing that it will be productive of injurious results, he will render himself personally liable therefor.* Thus, if an agent should store the goods of his principal in a place which he knew to be dangerous and improper, he would not be justified, although similar goods were usually stored in similar places. § 237. An agent is also bound to keep regular accounts and vouchers of all transactions occurring in his agency ; and if 219, 220 ; RusseH «. Hankey, 6 T. R. 12 ; CaflFrey v. Darby, 6 Ves. 496 Massey v. Banner, 1 Jac. & Walk. 241; Moore «. Mourgue, Cowp. 480 Smith V. Cologan, 2 T. R. 188, note a; Warwicke v. Noakes, Peaks, 68 Paley on Agency, by Lloyd, 9, 10, 21, 45, 46, 47, 204, 205, 209, 3d ed. ; 2 Kent, Comm. lect. 41, p. 622 to 624, 3d ed. ^ Littlejohn v. Ramsay, 4 Martin (n. s.), 655 ; Gilly v. Logan, 2 Martin (k. 8.), 196; Hosmer w. Beebe, 2 Martin (n. s.), 368; Richardson u. Wes- ton, 4 Martin (N. s.), 244; Leverick v. Meigs, 1 Cow. 646; Caffrey v. Darby, 6 Ves. 494 ; 1 Liverm. on Agency, ch. 8, § 2, p. 368 ; ib. 354. 2 Mallough V. Barber, 4 Camp. 150. See also Comber v. Anderson, 1 Camp. 523 ; Park v. Hamond, 4 Camp. 344 ; 8. C. 6 Taunt. 495 ; Walker v. Smith, 4 Dall. 389. ' Mainwaring v. Brandon, 8 Taunt. 202, 204 ; Bromley v. Coxwell, 2 Bos. & Pul. 438 ; Cockran v. Irlam, 2 M. & S. 301 ; Goswill v. Dunkley, 2 Str. 680 ; Paley on Agency, by Lloyd, 17, 20 ; 1 Liverm. on Agency, ch. 2, § 4, p. 56 to 67; Story on Agency, 201, and note 2. * Sadock V. Burton, Yelv. 202 ; Anon., 12 Mod. 514; 3 Chitty on Com. imd Manuf. ch. 8, p. 215, 216, 218, note 1; 2 MoUoy, B. 3, ch. 8, § 5; Story on Agency, § 199. 230 CONTRACTS OP AGENTS. [CHAP. IH, any loss accrue, through his neglect so to do, he will be liable therefor in equity.' So, also, an agent must keep his own property distinct from that of his piincipal ; for if, through his negligence, he be unable to distinguish one from the other, the whole will be considered as the property of the principal, as a species of penalty for his negligence.^ Thus, if an agent should deposit funds belonging to his principal in a bank, in his own name, and without any mark to distinguish them as belonging to his principal, and the bank should become insol- vent, he would be liable for the loss.^ All the profits made by an agent in the course of his agency, whether incidental or direct, enure to the benefit of his principal. No agent can appropriate any incidental profit arising therein, although he be justified in so doing by usage ; for such usage is considered a usage of fraud and plunder. Thus, if an agent have made interest on his principal's money in his hands, he will, in gen- eral, be obliged to account for it.* He is, therefore, restricted to a proper compensation ; and the profits, however they may accrue, must be passed to the credit of the principal.^ § 238. When a factor guarantees payment on a sale, in con- sideration of an additional recompense, he is said to receive a del credere commission, and in such case, upon failure of pay- ment by the purchaser, he himself becomes liable personally. But an agent under such a commission is only understood to ' White u. Lady Lincoln, 8 Ves. 363 ; s. c. 15 Ves. 441 ; Chedworth v. Edwards, 8 Ves. 49 ; Paley on Agency, by Lloyd, 48, 49 ; 1 Stoiy, Eq. Jur. § 468, 623 ; 1 Liverm. on Agency, cb. 8, § 7, p. 434 to 436 ; Smith on ilerc. Law, 94 ; Gallup v. BlerriU, 40 Vt. 133 (1868) ; Boston Carpet Co. V. Journeay, 36 N. Y. 384 (1867). ^ Fletcher u. Walker, 3 Madd. 73; Wren v. Kirton, 11 Ves. 379, 382; Lnpton V. 'White, l.j Ves. 432 ; Paley on Agency, by Lloyd, 48, 49, 51 ; 1 Beawes, Lex Jlerc. Factors, p. 44, 46 ; Chedworth v. Edwards, 8 Ves. 49 ; 3 Chitty on Com. and Manuf. ch. 3, p. 215, 220 ; Story on Agency, § 205. ^ < affrey v. Darby, 6 Ves. 496 ; Massey v. Banner, 1 Jao. & Walk. 241 ; 4 Madd. 413 ; AVren v. Kirton, 11 Ves. 377, 382 ; Macdonnell v. Harding, 7 .Sim. 178 ; Darke v. Martyn, 1 Beav. 626 ; Fletcher v. Walker, 3 Madd. 73. * Rogers v. Boehm, 2 Esp. 704. See Leake v. Sutherland, 25 Ark. 219. ^ Story on Agency, § 207 ; 3 Chitty on Com. and Manuf. ch. 3, p. 216, 221 ; Diplock v. Blackburn, 3 Camp. 43 ; Massey v. Davies, 2 Ves. Jr. 317 ; V. Jolland, 8 Ves. 72 ; Paley on Agency, by Lloyd, 3, 4 ; Smith on jNIcrc. Law, 94 ; Lafferty v. Jelley, 22 Ind. 471. CHAP. III.] DUTIES AND LIABILITIES. 231 guarantee the payment of the money by the purchaser, and not the safe remittance of it to the hands of the principal.^ § 239. Whenever an agent violates his duties and obliga- tions to his principal, and loss accrues, either directly or indi- rectly, as a consequence of his neglect or misconduct, he will be liable to his principal. Thus, if an agent should know- ingly deposit goods in an improper place, and they should be destroyed there by fire, he would be responsible for the loss, although it were the direct consequence of the fire and not of his negligence.''' So, if an agent neglect to procure insurance when he is bound to do so, he is responsible for any direct consequence, entailing a loss.^ But although it is not neces- sary that such a loss should be the immediate result of such misconduct, yet it must actually have resulted therefrom, and not be merely a possible or probable result thereof.* Thus, although an agent be ordered to make sales on a certain credit, and he actually makes them on a longer credit, and yet, before the period allowed by the orders elapse, the vendee fail, the agent would not be responsible, because the loss would have occurred if he had obeyed his instructions.^ But if a voyage , be properly insured, and the ship deviate therefrom, or if the ship be lost by a risk which would not have been covered by a policy made in accordance with the order, or if the insurance be illegal, the agent would not be liable, although he should violate or neglect his orders.® ' Leverick ». Meigs, 1 Cow. 645 ; Heubach w. Rother, 2 Duer, 253. But see Mackenzie v. Scott, 6 Bro. P. C. by Tomlin, 286 ; 1 Liverm. on Agency, 408 to 411; Lucas v. Groning, 7 Taunt. 164; Story on Agency, §215. 2 Paley on Agency, by Lloyd, 10, 19, 20, 21, 75, 76 ; Caffrey v. Darby, 6 Ves. 496 ; Davis v. Garrett, 6 Bing. 716. ' Wallace v. Tellfair, 2 T. R. 188, note; Smith d. Lascelles, 2 T. R. 187 ; Delaney v. Stoddart, 1 T. R. 24 ; Morris v. Summerl, 2 Wash. C. 0. 203; De Tastett u. Crousillat, 2 Wash. C. C. 132, 136; Parker u. James, 4 Camp. 112. But an agent is not bound to insure for his principal unless expressly instructed so to do ; or unless an understanding to that effect exists between them. Lee v. Adsit, 37 N. Y. 78 (1867). * Story on Agency, eh. 8, per tot. and cases cited. ^ Paley on Agency, by Lloyd, 19, 20, 21, 74, 75 ; Story on Agency, §222. 6 Marsh, on Ins., B. 1, ch. 8, § 2, p. 800; Delaney v. Stoddart, 1 T. R. 232 CONTRACTS OF AGENTS. [CHAP. III. § 240. Where an agent is authorized to receive payment of a debt, he is bound to receive the whole of sucli payment in money ; unless he have a special authority to receive payment in a different mode ; or unless such authority is to be inferred from circumstances ; ^ or from usage ; as in the case of factors, who are allowed by usage to sell on credit.^ DEFENCES OP AGENTS AGAINST THEIR PRINCIPALS. § 241. In the next place, as to the defences of agents against their principals. If an agent conform to all his duties, as stated in the foregoing pages, he will not be responsible to his principal for any losses accruing from his agency.^ So, also, although he do not exactly comply with his instructions, yet if his deviations therefrom be justified by the necessity of the case ; as where a literal compliance therewith would have frustrated the object of the agency, and been injurious to the interest of his principal ; ^ or if the subject-matter of his agency be founded in immorality, illegality ,5 or fraud, or contravene the principles of public policy ; ^ or if his neglect or violation of his duties and instructii3ns do not occasion the loss or injury actually sustained ; or if the instructions were so given as to have misled him;'' he will not be responsible therefor. In 22 ; Webster v. De Tastet, 7 T. R. 157 ; Paley on Agency, by Lloyd, 74, 75, 76 ; Smith v. Lascelles, 2 T. R. 186 ; Marzetti v. Williams. 1 B. & Ad. 415. ' Barker v. Greenwood, 2 Younge & Coll. 419, 420; Catterall u. Hindle, Law R. 1 C. P. 186 (1866). See Parsons v. Martin, 11 Gray, 115. 2 3 Chitty on Com. and Manuf. 199 ; Story on Agency, § 108, 110, 209. See post. Factors. Hutchings v. Hunger, 41 N. Y. 155 (1869). ' See Story on Agency, ch. 9, per tot. " Dusar V. Perit, 4 Binn. 361 ; The Gratitudine, 3 Rob. Adm. 240, 257. ° But see Murray v. Vanderbilt, 39 Barb. 140, that an agent is bound to pay 0¥er money collected for his principal, although upon a contract illegal inter partes. « Bexwell v. Christie, Cowp. 395 ; Webster v. De Tastet, 7 T. R. 157 ; Simpson v. Nichols, 3 M. & W. 240 ; 1 Story, Eq. Jur. § 296, 308 ; 1 Liverm. on Agency, ch. 1, § 2, p. 14 to 22 ; Thomson v. Thomson, 7 Ves. 471); Cannan v. Bryce, 3 B. & Al. 179; Langton v. Hughes, 1 M. & S. 593 ; Le Guen v. Gouverneur, 1 Johns. Cas. 436 ; Edgar v. Fowler, 3 East, 222; Bryan v. Lewis, Ry. & Mood. 386. ' Pickett V. Pearsons, 17 Vt. 470. CHAP. III.] DEFENCES AGAINST PRINCIPALS. 2S3 every case there must be both an injury and a wrong, in order to sustain an action thereupon, and damnum absque inj'urid, or injuria absque damno, is a perfect defence.-' § 242. The most complete and important defence, however, which can be made by an agent, is, that tlie principal has rati- fied his acts and omissions ; for a subsequent sanction has the same effect as a prior order. The maxim of tlae common law is, " omnis ratihabitio retrotrahitur et mandato cequiparatur ; " and a ratification, when once made deliberately, becomes in- stantly obligatory, and cannot be afterwards revoked.^ A ratification must be made by the principal ; an agent cannot ratify the unauthorized act of another, at least when he cannot delegate his power .^ § 243. A ratification must, however, be made with a full knowledge of all the facts and circumstances, or it will not be obligatory on the principal, although such facts or circum- stances may have been innocently concealed, or inadvertently misrepresented.* Where the agent acts in the name of his principal by an instrument under seal, the general rule is, that the ratification should also be under seal.^ Yet if the agent should afiis a seal to his contract when none was necessary, a parol ratification would render the contract binding as a simple contract.^ But when the contract by the agent is not under ' Paley on Agency, by Lloyd, 19, 20, 21, 75, 76; Delaney v. Stoddart, 1 T. R. 22 ; Webster ». De Tastet, 7 T. R. 157. * Smith v. Cologan, 2 T. R. 188, note ; Clark's Ex'rs v. Van Riemsdyk, 9 Cranch, 153 ; Bigelow v. Denison, 23 Vt. 565 ; Moss ». Rossie Lead Min- ing Co., 5 Hill, 137 ; Frixione v. Tagliaferro, 10 Moore, P. C. 174. ' Hill B. Canfield, 63 Penn. St. 77 (1869). ■* Story on Agency, § 239, and cases cited; Wolff «. Horncastle, 1 Bos. & Pul. 320, 324 ; Copeland ». Mercantile Ins. Co., 6 Pick. 198 ; Conn v. Penn, Pet. C. C. 496 ; HorsfaD v. Fauntleroy, 10 B. & C. 755 ; Bell ». Cunning- ham, 3 Peters, 69, 81 ; Lazarus v. Shearer, 2 Ala. 718 ; Freeman v. Rosher, 13 Q. B. 780; Penn., Del., &c.. Navigation Co. v. Dandridge, 8 Gill & J. 248; Pittsburgh & S. R. R. Co. u. Gazzam, 32 Penn. St. 340 (1858) ; Billings V. Morrow, 7 Cal. 171 ; Combs v. Scott, 12 Allen, 493. ' Bloodgood V. Goodrich, 9 Wend. 68 ; s. c. 12 Wend. 525 ; Hanford v. McNair, 9 Wend. 54 ; Story on Agency, § 49, 242, 252 ; Despatch Line of Packets v. Bellamy Man. Co., 12 N. H. 205. See McLityre v. Park, 11 Gray, 102. • Worrall v. Munn, 1 Selden, 229 ; Mitchell v. St. Andrew's Bay Land 234 CONTRACTS OP AGENTS. [CHAP. III. seal, it is not necessary that the ratification should be express and formal, but it may arise by implication from collateral circumstances, from the acts of the principal, or the habits of dealing between the parties, and even from his silence and ac- quiescence, when it was incumbent on him to object, or when the presumption of a ratification is the only satisfactory expla- nation of such a silence. 1 Thus, where A. and B. being jointly interested in a quantity of oil, A. entered into a written con- tract for the sale of it, without B.'s permission, who refused, at first, to be bound by it ; but afterwards, in an altercation with the purchasers, B. acquiesced and said, " Well, then, the oil must be delivered," this was held to be a ratification.^ So, also, where an agent, without authority, compromised a debt of his principal, who after knowledge of the fact, made no objection, and acquiesced for a length of time in the act, be was held to be bound. So, also, if an owner should receive the proceeds of a sale by his supercargo, without objection, it would be a ratification of the sale.* Indeed, silence always affords a strong presumption of ratification ; ^ especially where Co., 4 Fla. 200. But see Wheeler v. Nevins, 34 Me. 54 ; Baker v. Free- man, 35 Me. 485. ' Codwise V. Hacker, 1 Caines, 526 ; Ward v. Evans, 2 Salk. 442 ; 2 Ld. Raym. 928 ; Thorold v. Smith, 11 Mod. 88 ; Conn v. Penn, Peters, C. C. 496; Loraine v. Cartwright, 3 Wash. C. G. 151 ; Richmond Manuf. Co. V. Starks, 4 Mason, 296 ; Armstrong v. Gilchrist, 2 Johns. Cas. 424 ; Bank of Columbia v. Patterson's Adm'r, 7 Cranch, 299 ; Rogers v. Kneeland, 13 Wend. 114 ; Terril v. Flower, 6 Martin (La.), 683 ; Baker v. Byrne, 2 Sm. & M. 193; Conant v. Bellows Falls Canal Co., 29 Vt. 263 (1857). But see contra, Cady ». Shepherd, 11 Pick. 400; Story on Agency, § 49 and note; ib. § 242, 252, 2d ed. ; Story on Part., § 122, and note; Brigham v. Peters, 1 Gray, 139. See Gulick v. Grover, 4 Vroom, 463; Drakely v. Gregg, 8 Wall. 242. ^ Soames v. Spencer, 1 Dowl. & Ryl. 32. See also Maclean v. Dunn, 4 Bing. 722; Johnson v. Smith, 21 Conn. 627; Byrne v. Doughty, 13 Ga. 46. ^ Armstrong v. Gilchrist, 2 Johns. Cas. 424. " Forrestier v. Bordman, 1 Story, 43 ; Hastings v. Bangor House Pro- prietors, 18 Me. 436 ; Moss v. Rossie Lead Mining Co., 5 HjU, 137. » McConnell v. Bowdry, 4 Mon. 392; Veazie v. Williams, 8 How. 134; Wallace v. Morgan, 23 Ind. 399 (1864) ; Toledo, &c., Ry. Co. v. Prince, 60 111. 26 (1869) ; Farwell v. Howard, 26 Iowa, 381 (1868) ; MoCuUoch v. McKee, 16 Penn. St. 289. CHAP. III.] DEFENCES AGAINST PRINCIPALS. 235 there are peculiar relations between the parties, such as that of husband and wife, or father and son, where the duty of dis- avowal is more urgent.^ So, also, where a party, having a disputed claim against another, intrusted a receipt in full to his agent, and the latter settled with the debtor for one-half the amount, and gave him the receipt, and the principal re- ceived the money, and sued the debtor for the balance, it was held, that, by receiving the money, he had ratified the act of his agent.^ And, a fortiori^ when a principal knowingly re- ceives the receipts and proceeds of a contract made by an agent, he makes it his own by implication, so that, in such case, if the agent had been guilty of fraudulent assertions, the principal would be liable thereon ; for, qui sentit commodum sentire debet et onut? And a ratification may be made after the principal lias expressed disapprobation of the act.^ § 244. There is, however, one important modification of this rule, — namely, if the act of the agent be void, or if it be illegal or directly injurious to another, no subsequent ratifica- tion will render it operative. But if it be merely voidable, a ratification will have the same effect as a prior authority, and give it full authority ah initio!' Thus, if an agent, without authority, make a purchase of goods, and give a bought note therefor, and the principal, after full knowledge of the transac- tion, ratify it, such a ratification will render the signing of the note valid under the statute of frauds, so as to bind both parties.^ § 245. There is, however, an exception to this doctrine, which obtains in cases where the act of the agent, if author- ized, would create an obligation on the part of third persons ' 2 Greenleaf on Evidence, § 67. See Bank of Orleans -e. Fassett, 42 Vt. 432 (1869). * Palmerton ii. Huxford, 4 Denio, 166. ' Foster v. Swasey, 2 W. & M. 217. See Lyman v. Norwich University, 28 Vt. 560 (1856) ; Crans v. Hunter, 28 N. Y. 389. * Woodward u. Harlow, 28 Vt. 338 (1856). ' Co. Litt. 295 &, 306 h, Hargr. & Butler's note ; Gilb. on Tenures, 75 ; Dyer, 263, pi. 37; Com. Dig. Confirmation; 1 Story, Eq. Jur. § 806; Wilkinson v. Leland, 2 Peters, 661, 662 ; Vernon's Case, 4 Co. 2 6. ' Maclean v. Dunn, 4 Bing. 722. 236 CONTRACTS OF AGENTS. [CHAP. III. to perform certaia acts and duties, the omission of which would operate to their injury ; or where it would defeat a right or estate already vested in such third person.^ In such cases, a subsequent ratification of the unauthorized act will not bind the third person.^ Thus, where a lease contained a condition that either party might determine it upon six months' notice ; notice by an unauthorized agent of the landlord was held not to be valid to determine the lease, although subsequently rati- fied by the principal.^' So, also, notice or demand of payment of a bill of exchange or promissory note, by an unauthorized person, would not render the party liable in damages for his default, although such notice or demand should be ratified by the holder.* So, also, notice of the dishonor of a note or bill of exchange by a stranger would not be a notice which would bind an indorser or drawer.^ § 246. A principal must either adopt the whole transaction of a person acting without authority or refuse the whole. He cannot " blow hot and cold ; " and therefore, if he treat a party as his agent in respect to one part of a transaction, he thereby ratifies the whole of it.® Thus, he cannot adopt a sale, made by his agent, without authority, and yet refuse to be bound by the representations of the agent made at the time of the sale.^ And if a principal ratify a contract by his agent, > See Bird v. Brown, 14 Jur. 132 ; 4 Exch. 786. 2 Paley on Agency, by Lloyd, 190, and note c, 345, 347; Co. Litt. 258 a; Fitchet v. Adams, 2 Str. 1128 ; Goodtitle v. Woodward, 3 B. & Al. 689; Right v. Cuthell, 5 East, 491 ; Doe ?). Walters, 10 B. & C. 626 ; Story on Agency, § 246, and note 2 ; Solomons v. Dawes, 1 Esp. 83 ; Coore V. Callaway, 1 Esp. 115; Coles v. Bell, 1 Camp. 478, note. ' Eight V. CutheU, 5 East, 491 ; Doe v. Goldwin, 2 Q. B. 143. ^ Freeman v. Boynton, 7 Mass. 483 ; Bank of Utica v. Smith, 18 Johns. 230; Chitty on BiUs, ch. 9, p. 396, 8th ed. ' Tindal v. Brown, 1 T. R. 167; Stanton v. Blossom, 14 Mass. 116; Story on BiUs of Exchange, § 303, 304 ; Hovil v. Pack, 7 East, 164 ; Smith V. Hodson, 4 T. R. 212 ; Ferguson v. Carrington, 9 B. & C. 59 ; Corning v. Southland, 3 Hill, 552 ; Billon v.' Hyde, 1 Atk. 128 ; Story on Agency, §250. « Hough V. Richardson, 3 Story, 689 ; Wilson v. Poulter, 2 Str. 859 ; Hovil V. Pack, 7 East, 164 ; Daniel v. Mitchell, 1 Story, 172 ; Small u. Attwood, Younge, 407 ; 8. c. on appeal, 6 Clark & Finn. 232 ; Jlundorff v. Wiekersham, 63 Penn. St. 87 (1869). ' Hough V. Richardson, 3 Story, 689 ; Crans v. Hunter, 28 N. Y. 389. CHAP. III.J LIABILITIES TO THIRD PERSONS. 237 he incurs the same liabilities as if he had originally authorized it.^ So, if an undisclosed principal adopt a contract made by his agent, he must adopt it in omnibus ; and if, for instance, it were coupled with. an agreement that the defendant should have a right to set off a debt due to him from the agent, the principal must take the contract subject to the agreement for the set-ofif.2 LIABILITIES OP AGENTS TO THIRD PERSONS. § 247. We shall next consider the liabilities of agents to third persons. Where an agent contracts in behalf of his principal, he will not be liable to third persons, when credit is given exclusively to the principal.^ Nor will a third person be allowed to set off a debt against the agent in a suit by the principal when he knew the character of the agent, though unaware who his principal was.* But if credit be given to the agent exclusively, or to both principal and agent, the agent will be personally responsible.* In most of the cases of ' Wilson V. Tummon, 6 Scott, N. R. 904 ; 8. c. 6 Man. & Grang. 236 ; Smethurst v. Taylor, 12 M. & "W. 554 ; Doe v. Goldwin, 2 Q. B. 143. 2 Ramazotti v. Bowring, 7 C. B. (n. s.) 851 (1860), per Erie, C. J. 8 As to proof of usage to establish an agent's personal liability on a con- tract properly executed by him as agent, see Humphrey v. Dale, 7 El. & B. 266; Fleet v. Murton, Law R. 7 Q. B. 126 ; Hutchinson v. Tatham, Law E.8C. P. 482 (1873). * Semenza ». Brinsley, 18 C. B. (n. s.) 467 (1865). ' See Hancock v. Fairfield, 30 Me. 299 ; Chadwick v. Maden, 9 Hare, 188 ; 12 Eng. Law & Eq. 180 ; Potts v. Henderson, 2 Carter, 327. But a person cannot escape personal liability by signing his name as agent, if the instrument, taken together, show that he is in fact the principal. Lennard v. Robinson, 5 El. & B. 125 (1855) ; Tanner v. Christian, 4 El. & B. 691 (1855) ; Norton v. Herron, Ry. & Mood. 229. In Tanner v. Christian, supra, Wight- man, J., said : " There is no doubt that a person, acting for and on behalf of another, may contract in such terms as to bind himself personally. In each case the question is, whether the intention that he should do so appears. One test is, to see who is, by the provisions of the contract, to act in the performance of it. Now here Christian, though for and on behalf of Norris, for whom perhaps he was merely agent, has made a contract by which he himself is to do all that is to be done. Taking the whole language of the agreement together, it is not Norris, but Christian on behalf of Norris, who agrees to let. ... It is not a case in which we call in aid any extrinsic fact to construe the agreement ; but on the face of it it appears that Christian is to aot." In all such cases the question of liability must be determined from a 238 CONTEACTS OP AGENTS. [CHAP. III. contract, therefore, the principal question is, to whom was the credit given; and this is a question of fact for the jury.* Where an agent exceeds his authority, he will be personally responsible to the person with whom he is dealing, if the limi- tations of his authority be unknown to such person,^ or if he guarantee a ratification by his principal of acts which the other party knows to be beyond his authority.^ Thus, where the defendant made an agreement with the plaintiff, who was master of the brig Sir Alexander Mackenzie, in respect to a certain voyage, and described himself as " consignee and agent of the above brig and cargo, on behalf of Mr. Meirelles, merchant, of Liverpool," and the voyage having been per- formed, an action was brought against the defendant for the proper construction of the whole instrument. See Alexander v. Sizer, Law Ei 4 Exch. 102 (1869) ; Lindus v. Melrose, 2 H. & N. 293 ; s. c. 3 H. & N. 177. See also Williamson v. Barton, 7 H. & N. 899 (1862) ; Higgins v. Senior, 8 M. & W. 834 ; Parker v. Winlow, 7 El. & B. 942 (1857) ; Bur- ton V. Furnis, 3 H. & N. 926 (1858). As to the effect of acceptance by procuration, see O'Reilly v. Richardson, 17 Irish Com. Law, 74 (1865) ; Stagg V. Elliott, 12 C. B. (n. s.) 373 (1862) ; Story on Agency, § 72. ' Story on Agency, § 261, 279 ; Scrace v. Whittington, 2 B. & C. 11 ; Iveson V. Conington, 1 B. & C. 160 ; Cunningham v. Soules, 7 Wend. 106 ; 3 Chitty on Com. and Manuf. 211, 212. See ante, § 223, 224. 2 CoUen V. Wright, 8 El. & B. 647 ; Weeks v. Propert, Law R. 8 C. P. 427 (1873); Cherry v. Colonial Bank, 6 Moore, P. C. (n. s.) 236 (1869). In such cases the authorities are conflicting whether the remedy against the agent is on the cotitract, or by action on the case. See Jefts v. York, 4 Cush. 371; s. o. 10 Cush. 395; Abbey d. Chase, 6 Cush. 56 ; Ogden «. Raymond, 22 Conn. 385 ; Walker v. Bank of N". Y., 13 Barb. 689 ; Jenkins V. Hutchinson, 13 Q. B. 744 ; Bay v. Cook, 2 Zab. 343. See 1 Lans. 381. ^ Smout u. Ilbery, 10 M. & W. 1. In this case Alderson, B., said: " The courts have held that where a party making the contract as agent bond Jide believes that such authority is vested in him, but has in fact no such authority, he is still personally liable. In these cases, it is true, the agent is not actuated by any fraudulent motives ; nor has he made any statement which he knows to be untrue. But still his liability depends on the same principles as before. It is a wrong, differing only in degree, but not in its essence, from the former case, to state as true what the individual making such statement does not know to be true, even though he does not know it to be false, but believes, without sufficient grounds, that the statement will ulti- mately turn out to be correct. And if that wrong produces injury to a third person, who is wholly ignorant of the grounds on which such belief of the supposed agent is founded, and who has relied on the correctness of his assertion, it is equally just that he who makes such assertion should be per- sonally liable for its consequences." CHAP. III.] LIABILITIES TO THIRD PERSONS. 2S9 freight, and the plaintiff proved that Mr. Meirelles had never authorized the defendant to act for him, and rejected the con- tract, it was held that the defendant was personally liable.^ So, also, where a broker, who had received special instructions to purchase silk of a certain quality, purchased silk of a differ- ent quality, he was held to be liable personally in an action for the price.2 So, also, where an agent holds himself out as principal, without disclosing the fact of his agency, or if he ex- ceed his authority ,3 he will render himself responsible, because he thereby assumes the credit upon his contract.* The princi- pal, however, would also be liable, if the act were within the scope of the agent's authority.^ So, also, where agents sup- press the name of their principal, though they are known to be agents, they are personally liable.^ And where a party draws a bill and appends to his signature the word " agent," without stating for whom he is agent, he makes himself per- sonally liable ; ^ and he may sue in his own name.^ And if in fact he have no principal, he will be personally liable ; and no subsequent ratification by a stranger will relieve him.^ ' Kennedy v. Gouveia, 3 Dowl. & Ryl. 503. " East India Co. v. Hensley, 1 Esp. 111. 3 Royce v. Allen, 28 Vt. 234 (1856) ; Meech ». Smith, 7 Wend. 315 ; Feeter v. Heath, 11 Wend. 478. * Owen V. Gooch, 2 Esp. 567 ; Ex parte Hartop, 12 Ves. 352 ; Paterson «. Gandasequi, 15 East, 62; Stackpole v. Arnold, 11 Mass. 27; Raymond w. Crown & Eagle Mills, 2 Met. 319 ; 2 Kent, Comm. lect. 41, p. 629 ; Smyth V. Anderson, 7 C. B. 21; Peterson ti. Ayre, 13 C. B. 364, note; Waring V. Mason, 18 Wend. 425 ; Story on Agency, § 266, 267 ; Royce v. Allen, 28 Vt. 234 (1856). See Barry v. Pike, 21 La. Ann. 221. * Jones V. Littledale, 6 Ad. & El. 486 ; Pentz v. Stanton, 10 Wend. 271 ; Paterson v. Gandasequi, 15 East, 62 ; Higgins v. Senior, 8 M. & W. 834 ; Kymer v. Suwercropp, 1 Camp. 109 ; Raymond v. Crown & Eagle Mills, 2 Met. 319 ; French v. Price, 24 Pick. 13. * Paterson v. Gandasequi, 15 East, 62. Cases cited in the immediately previous notes ; Winsor v. Griggs, 5 Cush. 210. A fortiori if he sign his own name without qualification, even if he describe himself as " agent" in the contract. Paice v. Walker, Law R. 5 Exch. 173 (1870) ; Anderton v. Shoup, 17 Ohio St. 125 (1866) ; Collins v. Buckeye St. Ins. Co., ib. 215. But see Gaff v. Theis, 33 Ind. 307 (1870) ; Aspinwall v. Torrance, 1 Lans. 381. ' Webb V. Mauro, Morris, 488. 8 Johnson v. Catlin, 27 Vt. 87 (1854). ' Kelner v. Baxter, Law R. 2 C. P. 174 (1866). See Gunn v. London, 240 CONTRACTS OP AGENTS. [CHAP. III. § 248. Where an agent buys goods in the country for a foreign principal, credit is ordinarily to be taken as given to the agent, and not to the principal ; ^ but this depends upon a proper construction of the intention of the parties.^ So, also, if an agent sell goods for a foreign principal, he would be re- sponsible for a breach of contract by his principal in not de- livering them ; although the contract should be made in the principal's name, — and the reason of this rule is the improb- ability that credit in such a case would be given to the foreigner.^ But where the contract is expressly with the foreign principal in writing, and the agent merely signs the contract as his rep- resentative and in his principal's name, the agent would not be liable, the reason of the rule failing.* Thus, where foreign principals made a written contract with the plaintiff, whereby they, by name, agreed to hire him to serve them abroad at a certain rate and for a certain period, and their agent signed the contract for them in London, " for Vacher & Tilly, — Charles Kekul^," it was held, that the agent did not thereby render himself personally responsible for the wrongful dismis- sal of the plaintiff by his foreign principals.^ &c., Ins. Co., 12 C. B. (n. s.) 694 (1862) ; Payne v. New South Wales, &c., Nav. Co., 10 Exch. 283 ; Scott v. Ebury, Law R. 2 C. P. 255 (1867). ' Thomson v. Davenport, 9 B. & C. 87 ; Lennard v. Robmson. 5 El. & B. 125 (1855) ; Risbourg v. Bruckner, 3 C. B. (n. s.) 812 (1858) ; Green v. Kopke, 18 C. B. 549; Peterson v. Ayre, 13 C. B. 353. Where the agents of a foreign principal effected a purchase of corn in their own names, paid the amount, and received the sum paid fi,-om the principal, he having ratified the contract, it was held that he could not recover the sum paid to the agents, on discovering that the corn had already been sold in foreign waters, before the purchase by the agents. Risbourg v. Bruckner, 3 C. B. (n. s.) 812 (1858). ^ Green v. Kopke, 18 C. B. 649 (1856). See Paice v. Walker, Law R. 5 Exch. 173 (1870) ; Reid v. Dreaper, 6 H. & N. 813 (1861). ' Thomson v. Davenport, 9 B. & C. 87 ; Smyth ». Anderson, 7 C. B. 21; Wilson v. Zulueta, 14 Q. B. 405; Mahony v. Kekul6, 14 C. B. 390; 25 Eng. Law & Eq. 280. : * Mahony v. Kekul^, 14 C. B. 390, per Jervis, C. J. ; Peterson v. Ayre, 13 C. B. 353; 24 Eng. Law & Eq. 382; Smyth v. Anderson, 7 C. B. 21. See Armstrong v. Stokes, Law R. 7 Q. B. 605 (1872); Hutton v. Bullock, LawR. 8Q. B. 335(1873). » Mahony v. Kekul6, 18 Jur. 314 ; 25 Eng. Law & Eq, 280 ; 14 C. B. 390. In this case Jei-vis, C. J., said : " I think this is a very clear case, and that there ought to be no rule. No doubt, ordinarily, the question arising on ,i contract is one of intention, and that intention, it may be, is frequently to CHAP. III.] LIABILITIES TO THIRD PERSONS. 241 § 249. But although an agent who acts without authority renders himself personally liable, a question arises whether he would be liable in an action on the contract itself, or only in a special action for damages, whicli does not seem to be settled. The weight of authority, however, seems to be in favor of the rule as laid down in a recent case in England, that where a person acts as agent, and so names himself in an instrument, he cannot be made a party to the instrument, and be sued upon it, unless it be shown that he was the real principal ; although he would be liable in a different form of action for damages resulting from his misrepresenting himself to have authority to act as agent when he had no authority. ^ Nor would it seem be gathered from the contract and other circumstances ; but where, as in this case, the contract is in writing, and clear upon the face of it, we must look to the contract alone. Where an agent in England buys for a foreigner resident abroad, a long series of decisions has established that the agent is generally to be considered as pledging his own credit, because it is highly- improbable that the seller would have given credit to the foreigner. But where the contract is made in writing, expressly with the foreigner, and not with the agent, the latter is not liable. But it is argued, that because the agent in this case has signed the contract, he is therefore to be liable. That does not at all follow. Kekule here represents himself as signing, not on his own account at all, but for Vacher & Tilly, professing to bind them, and if signing within the scope of his authority, actually binding them. Wilson V. Zulueta is altogether distinguishable. The decision there proceeded upon the particular words of the contract, and the court held that Zuluet.a, though contracting on behalf of a foreign principal, had, by the terms of the contract, made himself liable. In the present case Kekul6 signs, repre- senting Vacher & Tilly, and not at all on his own account ; it is just the same as if he had signed the name. The verdict was, therefore, rightly en- tered for the defendant, on the first issue, and there wiU be no rule." See also Rogers v. March, 33 Me. 106. See 5 Gray, 657. " Whenever any person, especially one who resides abroad, intrusts another with the gen- eral management of his property, it would be highly inconvenient if he did not invest such agent with a general authority to receive for him the moneys which are paid to the agent in the course of such management." Per Byles, J., in Webber v. GranviUe, 9 C. B. (n. s.) 883 (I860). ' Jenkins v. Hutchinson, 13 Q. B. 74i. In this case Lord Donman said : " It is not pretended that the defendant had any interest as principal; he signed as agent, intending to bind a principal, and in no other character. That he may be liable to the plaintiff in another form of action, for any damage sustained by his representing himself to be agent, when he was not, is very possible ; but the question is here, whether he can be sued on the VOL. I. 16 242 CONTRACTS OF AGENTS. [CHAP. III. to make any difference whether there were mala fides in the transaction, or whether the misrepresentation were simply by mistake and without fraudulent intention, — in neither case would the agent be liable on the contract,^ unless, perhaps, charter-party itself, as a party to it. No reported case has decided that a party so circumstanced can be sued on the instrument itself. Mr. Justice Story, in his book on the Law of Agency, p. 226 (ed. 1839), in a note, states that the decisions in the American courts are conflicting on this point, and that in England it is held, that the suit must be by a special action on the case (citing Polhill v. Walter, 3 B. & Ad. 11-i). That case does not, perhaps, establish the broad proposition ; for the contract was a bill of exchange — an instrument differing in many respects from ordinary contracts. But, even in the case of a bill of exchange, the Court of Exchequer, in Wilson V. Barthrop (2 M. & W. 863), did not at once repudiate the possibility that an agent might be so liable. The case, however, went off, on the ground that he might have had authority to bind the principal, and did not appear to ha\e acted mala fide. " In the absence of any direct authority, we think that a party who exe- cutes an instrument in the name of another, whose name he puts to the instrument, and adds his own name only as agent for th.at other, cannot be treated as a party to that instrument, and be sued upon it, unless it be shown that he was the real principal." See also Lewis v. Nicholson, 21 Law J. (n. s.) Q. B. 311; Downman v. Jones, 9 Jurist, 454; s. c. 4 Q. B. 235, n. ; Smout v. Ilbery, 10 M. & W. 1. The same rule obtains in Maine, Stetson V. Patten, 2 Greenl. 358 ; and in Massachusetts, Long v. Colburn, 11 Mass. 97 ; Ballou v. Talbot, 16 Mass. 461 ; Jefts v. York, 4 Cush. 371 ; 8. c. 10 Cush. 395 ; and in Pennsylvania, Hopkins v. Mchally, 11 S. & R. 126. But in New York, the agent has been held personally liable on the contract in such cases. Dusenbury v. Ellis, 3 Johns. Cas. 70 ; White v. Skinner, 13 Johns. 307 ; Meech v. Smith, 7 Wend. 315 ; Randall v. Van Veohten, 19 Johns. 60; Palmer v. Stephens, 1 Denio, 471; and in New Hampshire the rule is similar. Woodes v. Dennett, 9 N. PL 55 ; Savage v. Rix, 9 N. H. 263. ' Jenkins v. Hutchinson, 13 Q. B. 744, and cases cited above. In Smout V. Ilbery, 10 M. & W. 1, B.aron Alderson says: " On examination of the authorities, we are satisfied that all the cases in which the agent has been held personally responsible will bo found to arrange themselves under one or other of these three classes. In all of them it will be found that he has either been guilty of some fraud, has made some statement which he knew to be 'false, or has stated to be true what he did not know to be true ; omitting, at the same time, to give such information to the other contracting party as would enable him, equally with himself, to judge as to the au- thority under which he proposed to act. Of the first, it is not necessary to cite any instance. Polhill v. Walter is an instance of the second; and the cases where the agent never had any authority to contract at all, but believed CHAP. III.J LIABILITIES TO THIRD PEESONS. 243 •where thei'e are apt words therein to charge him as princi- pal.i § 250. But if credit be given solely to the principal, — as if the agent declare his agency, and expressly refuse to incur personal responsibility at the time, — the irresponsibility of the principal will not create a liability on the part of the agent, unless the agent have been guilty of some misrepresentation or fraud.^ So, also, public officers, who are known to contract in their official character, will not be responsible on contracts that he had, as when he acted on a forged warrant of attorney, which he thought to be genuine, and the like, are instances of the third class. To these may be added those cited by Mr. Justice Story, in his book on Agency, p. 226, note 3 (§ 264, n. 2). The present case seems to us to be distinguishable from all these authorities. Here the agent had, in fact, full authority originally to contract, and did contract in the name of the prin- cipal. There is no ground for saying, that in representing her authority as continuing, she did any wrong whatever. There was no mala fides on her part, no want of due diligence in acquiring knowledge of the revocation ; no omission to state any fact within her knowledge rehating to it, and the revocation itself was by the act of God. The continuance of the life of the principal was, under these circumstances, a fact equally within the knowledge of both contracting parties. If, then, the true principle derivable from the cases is, that there must'be some wrong or omission of right on the part of the agent, in order to make him personally liable on a contract made in the name of his principal, it will follow, that the agent is not responsible in such a case as the present. And to this conclusion we have come. We were, in the course of the argument, pressed with the difficulty, that, if the defend- ant be not personally liable, there is no one liable on this contract at all ; for Blades «. Free has decided, that in such a case the executors of the husband are not liable. This may be so ; but we do not think, that, if it be so, it affords to us a sufficient ground for holding the defendant liable. In the ordinary case of a wife, who makes a contract in her husband's life- time, for which the husband is not liable, the same consequence follows. In that case, as here, no one is liable upon the contract so made." See Blades V. Free, 9 B. & C. 167. 1 See Woodes v. Dennett, 9 N. H. 55; Savage e. Kix, 9 N. H. 263, in which it is held that if a person having no authority to act as agent, under- take so to act in making the contract, he will be personally liable, if the contract, after rejecting therefrom what he was not authorized to put in it, contain apt words to charge himself as principaL But see the cases cited supra. 2 Smout V. nbery, 10 M. & W. 10 ; Jones v. Downman, 4 Q. B. 239 ; Lewis V. Nicholson, 21 Law J. (n. s.) Q. B. 811 ; 12 Eng. Law & Eq. 430 ; Story on Agency, § 266. 244 CONTRACTS OP AGENTS. [CHAP. III. made for the gOYernment ; because exclusive credit is consid- ered to be given to the government, and not to its agents.^ Thus, the governor of a fort, or colony, or the captain of a mil- itary company, is not liable for stores or provisions supplied to his order for the use of the government, or for the support of troops. 2 But a committee acting for a town do not contract in a public capacity, so as to exclude personal liability.^ § 251. If a person make a contract in his own name, or assume a personal liability by the terms of his contract, he will be personally liable, although the fact of his agency be known ;"* as if he give a note, in his own name, for goods purchased by him for his principal, and acknowledged to be so purchased, by the terms of the note itself ; ^ or if he procure a policy of insur- ance to be underwritten in his name ; ^ or accept a bill in his own name, drawn upon him on account of his principal : ' or, especially wliere the instrument is under seal, and is ostensibly the deed of the agent, this rule will apply .^ § 252. Agents are also responsible, personally, when there is no other person who can be made legally responsible as a principal, upon the ground that he who contracts in his own name, as agent of a person incapable of contracting, must be ' Simonds v. Heard, 23 Pick. 124; Hodgson v. Dexter, 1 Cranch, 345; Preeman v. Otis, 9 Mass. 272. = Macbeath v. Haldimand, 1 T. R. 180 ; Rice v. Chute, 1 East, 679 ; Myrtle v. Beaver, 1 East, 136 ; Gidley v. Lord Palmerston, 7 j\Ioore, 91 ; s. c. 3 Br. & B. 275 ; post, § 254. = Simonds v. Heard, 23 Pick. 124. < Waring v. Mason, 18 Wend. 425 ; Clealand v. Walker, 11 Ala. 1058 ; Franklyn v Lamond, 4 C. B. 637 ; Wilder v. Cowles, 100 Mass. 487. See Hutchinson v. Tatham, Law R. 8 C. P. 482 (1873). * Altbrd u. Eglisfield, Dyer, 230 b; Paley on Agency, by Lloyd, 378, 379; Talbot u. Godbolt, Yelv. 137; 2 Kent, Comm. lect. 41, 629, 630, 3d ed. ; Jones v. Littledale, 6 Ad. & El. 48G ; Norton v. Herron, 1 C. & P. 64S ; s. c. Ivy. & Mood. 229 ; Leadbitter v. Farrow, cited in Bayley on Bills, ch. 2, § 7, 5th ed. ; s. c. 6 M. & S. 345 ; Le Fevre v. Lloyd, 6 Taunt. 749 ; Goupy v. Harden, 7 Taunt. 169 ; Lucas v. Groning, 7 Taunt. 164 ; Stackpole v. Arnold, 11 Mjiss. 27 ; Newhall v. Dunlap, 14 Me. 180. " Stackpole v. Arnold, 11 Mass. 27 ; 1 Emerigon, Assur. ch. 5, § 4, p. 139; Story on Agency, § 272; Marsh, on Insur. B. 1, ch. 8, § 2, p. 292. ' Thomas v. Bishop, 2 Str. 955. » Meyer v. Barker, 6 Binn. 228, 234 ; Stone v. Wood. 7 Cow. 463 ; Story on Agency, § 156, 166, 157, 161, 272, 273. CHAP. III.] LIABILITIES TO THIRD PERSONS. 245 presumed to intend to bind himself; and also, because the party with whom the agent contracted would otherwise have no remedy.^ Thus, if an agent signed a note " as guardian of A. B. ; " or as "trustee of A. B. ;" or as " executor of A. B. ; " he will render himself personally liable ; because neither the ward in the first case, nor the trustee in the second, nor the person deceased in the last, could be personally and primarily liable.^ Yet if persons consent to deal with an agent, without relying upon his personal credit and responsibility, but upon the faith that they will be repaid by the principal, whether the principal be legally bound or not, the agent will not be liable.^ § 253. The liability of an agent may also arise by implica- tion from his acts ; or from the general usage or habits of the particular parties. The general rule is that the party to whom credit is knowingly and exclusively given is liable ; and if it be given to both parties, both parties are responsible.* An exclusive credit to the agent is sometimes so strongly inferred from the circumstances, as to afford a presumption of law ; as, where a factor buys and sells goods for a principal in a foreign country.^ So, also, in some particular agencies, as in that of a factor and master of a ship, a double responsibility will be presumed.® This presumption can, however, be disproved, and " Layng v. Stewart, 1 Watts & Serg. 222. ' Thacher v. Dinsmore, 5 Mass. 299; Forster v. Fuller, 6 Mass. 68; Sumner v. Williams, 8 Mass. 162 ; Hills ». Bannister, 8 Cow. 31 ; Childs V. Monins, 2 Br. & B. 460; Lambert v. Knott, 6 Dowl. & Ryl. 122; King V. Thom, 1 T. R. 487 ; Parrott v. Eyre, 10 Bing. 283 ; Horsley v. Bell, 1 Bro. C. C. 101, note; 8. o. Ambler, 770; Eaton v. Bell, 5 B. & Al. 34; Higgins V. Livingstone, 4 Dow, 355. ^ Smith on Merc. Law, 79 ; 2 Kent, Comm. p. 630, 631, 3d ed. ; Burls V. Smith, 7 Bing. 705 ; Tobey v. Claflin, 3 Sumner, 379; Parrott v. Eyre, 10 Bing. 283. See Aspinwall v. Torrance, 1 Lans. 381. * Paley on Agency, by Lloyd, 368, 370, 371 ; Smith on Merc. Law, 79 ; Owen v. Gooch, 2 Esp. 567 ; Ex parte Hartop, 12 Ves. 352 ; Addison v. Gandassequi, 4 Taunt. 575 ; Paterson v. Gandasequi, 15 East, 62 ; Tliomson V. Davenport, 9 B. & C. 78, 88, 90. See Armstrong v. Stokes, L. R. 7 Q. B. 598 (1872). ' Gonzales v. Sladen, Bull. N. P. 130 ; 2 Liverm. on Agency, 249 ; Paley on Agency, by Lloyd, 248, 273; Paterson v. Gandasequi, 15 East, 62; Thomson v. Davenport, 9 B. & C. 78 ; Houghton v, Matthews, 3 Bos. & Pul. 489 ; De Gaillon v. L'Aigle, 1 Bos. & Pul. 368. 8 1 Bell, Comm. § 418, p. 398, 4th ed. ; Abbott on Shipping, pt. 2, ch. 2, 246 CONTRACTS OP AGENTS. [CHAP. III. proof of exclusive credit must always be matter of evidence, dependent on the circumstances of each particular case.^ It is the duty of the agent, if he would avoid personal liability, to disclose his agency, and not of others to discover it ; and if he fails to do so, and deals with persons unaware of his agency, he must answer personally for the debts he contracts.^ But an action cannot be brought against both principal and agent in any of these cases .^ § 254. The foregoing rules, with regard to the liability of agents, apply exclusively to cases of private agency. The doc- trine in relation to agents contracting in behalf of the govern- ment, or of the public, is, that such agents will not be personally bound upon their contracts, as to third persons, unless they expressly make themselves liable ; or, at least, unless there be a manifest intention between the parties to create a personal responsiljility on tlie part of the agent.* The reason of this rule is, that no private person can be presumed to have assumed any liability in respect of the contracts of the government ; and no person can be presumed to have intended to trust to him ]>ersonally, inasmuch as the ability of the government to pay its just debts is vastly greater than that of any private individual can possibly be. This principle applies not only to simple contracts, but to specialties executed by agents of the government, under their own seals and names.* § 3, p. 91 (ed. 1829) ; ib. § 4, p. 93 ; ib. § 5, p. 95 ; Pothier on Obligations, by Evans, 448. ' Hussey v. Allen, 6 Mass. 163 ; Ricb v. Coe, Cowp. 636 ; Leonard v. Huntington, 15 Johns. 2'J8 ; Marquand v. Webb, 16 Johns. 89 ; Garnham r. Bennett, 2 Str. 816; James v. Bixby, 11 Mais. 34; Hussey v. Christie, 9 Ea>t, 432; 3 Kent, Comm. lect. 46, p. 161, 3d ed. ; 1 Bell, Comm, § 484, p. 413. = Baldwin v. Leonard, 39 Yt. 260, 266 (1867), per Steele, J. • Borell V. Newell, 3 Daly, 233. ^ Macbeath v. Haldimand, 1 T. R. 172 ; Bowen v. Morris, 2 Taunt. 374, :!S7 ; Unwin v. Wolscley, 1 T. R. 674 ; Lee v. Munroe, 7 Cranch, 366 ; Brown v. Austin, 1 Mass. 208; Dawes v. Jackson, 9 Mass. 490; 2 Kent, Comm. lect. 41, p. 632; Walker v. Swartwout, 12 Johns. 444; Gidley v. Lord Palmerston, 3 Br. & B. 275 ; Bend v. Hoyt, 13 Peters, 263 ; Story on Agency, ch. 11, § 302 et seq. ; Crowell v. Crispin, 4 Daly, 100 (1871). » 3 Chitty on Com. and Manuf. 213, 214; Unwin v. Wolseley, 1 T. R. 674; Walker v. Swartwout, 12 Johns. 444. CHAP. III.J LIABILITIES TO THIRD PERSONa. 247 § 255. An agent is personally liable to third persons for his misfeasances and positive wrongs ; ^ but he is, ordinarily, only responsible to his principal for his omissions and non-fea- sances in the course of his duty.^ The principal, in such case, ■would be solely liable. Thus, if the servant of a common car- rier negligently lose a parcel of goods intrusted to him, the principal alone will be responsible to the bailor or owner. ^ But if, in levying an execution, an officer should wilfully break and injure the property of the debtor, he would be personally responsible.* So, also, if both principal and agent be wrong- doers, both are liable personally. Thus, if an auctioneer should be employed by a sheriff to sell goods at auction, which he had unlawfully seized upon an execution, both sheriff and auction- eer would be liable to an action of trespass.^ So one who has professed to have authority to act as agent is liable to the party acting upon the warranty, if the latter's acts come within the limits of the warranty ; but not, if they are beyond it.^ No action, however, will lie against the agent for the mis- feasance of persons retained by him in the service of his prin- cipal.^ § 256. There are, however, some exceptions to this rule as to non-feasances. Thus, the postmaster-general will not be ' Udell V. Atherton, 7 H. & N. 172 ; Barwick v. English, &c., Bank, LawR. 2 Exch. 259 (1867). See Archbold v. Hovrth, Irish R. 1 C. L. 608 (1866), discussing Udell v. Atherton. ' Paley on Agency, by Lloyd, 396-399 ; Lane v. Cotton, 12 Mod. 488 ; 6. c. 1 Ld. Raym. 646, 655 ; Story on Bailments, 400 ; Clark v. Mayor, i&c., of Washington, 12 Wheat. 40 ; Randelson v. Murray, 3 Nev. & Per. 239 ; s. c. 8 Ad. & El. 109 ; Milligan ». Wedge, 12 Ad. & El. 737. 2 Lane v. Cotton, 12 Mod. 488. ■» Paley on Agency, by Lloyd, 396-399 ; Story on Agency, § 308 : Cam- eron V. Reynolds, Cowp. 403; Perkins v. Smith, Sayer, 40, 42; Story on Bailm. § 402, 404. ' Farebrother v. Ansley, 1 Camp. 343. See also Stephens v. Elwall, 4 M. & S. 269 ; Perkins v. Smith, Sayer, 40 ; s. C. 1 Wils. 328 ; M'Combie V. Davies, 6 East, 538. « Pow V. Davis, 1 Best & S. 220 (1861). See also Collen v. Wright, 8 El. & B. 647; Taylor v. Shelton, 30 Conn. 128; Hegeman v. Johnson, 35 Barb. 200. ' Stone V. Cartwright, 6 T. R. 411 ; Hills v. Ross, 3 Ball. 331 ; Nichol- son V. Mounsey. 15 East, 383 ; Paley on Agency, by Lloyd, 402 ; Denison V. Seymour, 9 Wend. 9, 12; Bush v. Steinman, 1 Bos. & Pul. 404; Story on Agency, § 313. 248 CONTRACTS OF AGENTS. [CHAP. III. liable for the default or negligence or misfeasance of his depu- ties, or clerks, on the ground of public policy ; but the deputies will be treated as principals.^ So, also, by the principles of the maritime law, masters of ships, although the, agents of the owners, will be responsible as principals to third persons, not only for their own negligences and non-feasances, but for that of their sub-agents.^ A master of a ship will not, however, be responsible for wilful trespasses and injuries, done by persons employed under him, any more than the owner will.^ § 257. Where the agent, in the due exercise of his powers, makes a contract as agent, taking no personal responsibility, the action must be brought against the principal. So, also, if money be paid over to a known agent for the use of his princi- pal, an action for money had and received cannot be main- tained against him, but must be brought against the principal,* the agent being only responsible for breach of his actual author- ity to his principal.^ But if the payment to the agent>be utterly void, so that he is not accountable to his principal, or if the contract Ije voidable for fraud on the part of the principal,^ he will be liable to the parties paying liim,'' unless he have actually paid over the money to his principal.^ Thus, if money be paid by > Rowning v. Goodchild, 3 Wils. 443; s. C. 6 Burr. 2718; 2 W. Bl. 906 ; Whitfield v. Le Despencer, Cowp. 765 ; Seymour v. Van Slyck, 8 Wend. 403, 422; U. S. v. Kirkpatrick, 9 Wheat. 720, 735. = Schieffelin v. Harvey, 6 Johns. 170, 176 ; Morse v. Slue, 1 Vent. 238 ; s. c. 1 Mod. 85 ; Abbott on Shipping, pt. 3, ch. 3, § 3 (ed. 1829) ; Dunlop v. Munroc, 7 Cranch, 242 ; Story on Agency, § 314. ' Bowcher v. Noidstrom, 1 Taunt. 568. See also Nicholson j;. Mounsey, 15 East, 3)S4. ^ Staplrfield V. Yewd, Bull. N". P. 133, cited 4 Burr. 1986 ; Dixon v. Hamond, 2 B. & Al. 313 ; Edden v. Read, 3 Camp. 339 ; Sims v. Brittain, 4 B. & Ad. 375 ; Shand v. Grant, 15 C. B. (n. s.) 324 (1863) ; Holland v. Russell, 1 Best & S. 424 (ISfil). See Kelly u. Solari, 9 M. & W. 64; Newall V. Tomllnson, Law R. 6 0. P. 405 (1871). ° Williams v. Everett, 14 East, 697. « Shipherd v. Underwood, 55 111. 475 (1870). ' BuUer v. Harrison, 2 Cowp. 565 ; Bishop v. Eagle, 10 Mod. 23 ; Cos V. Prentice, 3 M. & S. 344 ; Hearsey v. Pruyn, 7 Johns. 181 ; Bamford v. Shuttleworth, 11 Ad. & E. 926; Colvin v. Holbrook, 2 Comst. 126; Costi- gan V. Ncwlaiid, 12 Barb. 456. But see Elliot u. Swartwout, 10 Peters, 137. » Horsfall r. Handley, 2 Moore, 5 ; 8. c. 8 Taunt. 136 ; White v. Bart- lett, 9 Bing. 378; Tope v. Hockin, 7 B. & C. Ill; Coles v. Wright, 4 Taunt. 198; Whitbread v. Brooksbank, 1 Cowp. 69. CHAP. III.] LIABILITY OF PRINCIPAL. 249 mistake to an agent, he will be liable to a personal action therefor, so long as it remains in his hands, although his prin- cipal be credited therefor on account forwarded to him.^ So where the plaintiff bought cotton of the defendant, each acting for an undisclosed principal, and a mistake was made in the weight of the cotton, whereby the plaintiff overpaid the defend- ant ; and where, before the mistake was discovered, the de- fendant had allowed the money so received to be settled in account with his principal, to whom he had made advances, and who still owed him a large balance, the plaintiff was allowed to recover from the defendant the sum overpaid. The court said that the case did not fall within the rule by which an agent was relieved from personal responsibility in case of a bond fide payment of money received by him on account of his principal.^ ■ But if the money be actually paid over to the prin- cipal, the agent will not be liable,''* unless he have been guilty of fraud or of improper conduct.* But this rule only applies to cases- where money is paid to an agent by a third person for the use of the principal ; and when money is paid to the agent by the principal for the use of a third person, no action lies against the agent by such third person, but only by the prin- cipal.^ LIABILITY OF PRINCIPAL. § 258. 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 tui'n round and sue him in his own name.® Where an agent deals in his own name, the ' BuUer v. Harrison, 2 Cowp. 565 ; Cox v. Prentice, 3 M. & S. 344. « Newall V. Tomlinson, Law R. 6 C. P. 405 (1871). ' Horsfall v. Handley, 2 Moore, 5 ; s. c. 8 Taunt. 136 ; White v. Bartlett, 9 Bing. 378 ; Granger v. Hathaway, 17 Mich. 600 (1869). ■* Townson v. Wilson, 1 Camp. 396 ; Clark v. Johnson, 3 Bing. 424 ; Kobson ». Eaton, 1 T. R. 62 ; Rogers v. Kelly, 2 Camp. 123 ; Smith v. Sleap, 12 M. & W. 588 ; Wakefield v. Newbon, 6 Q. B. 280 ; Ashmole v. Wainwright, 2 ib. 837 ; Snowdon v. Davis, 1 Taunt. 359. See Newall v. Tomlinson, Law R. 6 C. P. 405 (1871). = Williams v. Everett, 14 East, 697. « Ferrand v. Bischoflfsheim, 4 C. B. (n. s.) 710 (1858), per Cockburn, C.J. 250 CONTKACTS OF AGENTS. [CHAP. III. creditor may nevertheless resort to the after-discovered princi- pal ; but if the creditor, by his conduct, has caused the state of accounts between the principal and agent to be altered, his right is subject to the state of those accounts ; for it would be unjust to call on the principal to pay, when the creditor has induced the principal to believe that he looked to the agent alone.i EIGHTS OP AGENTS. § 259. We now come to the rights of agents, in respect of their j^nnctpals and third persons. Every agent is entitled to a compensation for all services done by him in respect to the agency, unless there be a special agreement between the parties to the contrary ; or unless he be a gratuitous agent or manda- tary ; or unless the service be in respect to some matter which is illegal, or immoral, or in contravention of public policy. And the agent is entitled to the commission, even though the prin- cipal himself make the sale directly, provided the result were effected through the means of the agent.^ So if the principal declines to sell after the agent has procured a purchaser, and rescinds the agent's authority, the agent is entitled to a reason- able compensation for his services, and need not resort to a special action for the wrongful withdrawal of his authority.^ This compensation is called a commission, and is determined, in the absence of any express agreement,* by the usage in the ' Macfarlane v. Giannacopulo, 3 H. & N. 860 (18o8), per Watson, B. « Green v. Bartlett, 14 C. B. (n. s.) 681 (1863). This was a case of an auction sale ; the agent being the auctioneer. See post, Auctioneers. •■■ Prickett v. Builder, 1 C. B. (n. s.) 296 (1856). " I take it to be ad- mitted that it is not competent to a principal to revoke the authority of an agent, without paying for labor and expense incurred by him in the course of the employment. The right of the agent to be reimbursed depends upon the terms of the agreement. A general employment may carry with it a power of revocation on payment only of a compensation for what may have been done under it; but there may also be a qualified employment under which no payment shall be demandable, if countermanded. In the present case, I think the evidence showed that the employment was of that qual- ified character." Per JerviB, C. J., in Simpson v. Lamb, 17 C. B. 603 1856). * See Lara v. Hill, 15 C. B. (n. 8.) 45 (1863), as to the construction of CHAP. III.J EIGHTS OP AGENTS. 251 particular business in respect to which the agency is exer- cised ; or, in the absence of any usage, by the worth of the services rendered, which is a fact to be determined by a jury.i Extraordinary commissions are sometimes allowed ; as, com- missions del credere, where the agent sells on credit, at his own risk, and guarantees payment. § 260. Before an agent can claim compensation, he must have faithfully performed all his duty ;2 unless, by the usage in the particular business in respect to which the agency is cre- ated, a proportional remuneration be allowed for a partial per- formance of the agency. And if the agent departs from his instructions, he will not be entitled to the commission ; as, where he was employed to sell to third persons, and in point of fact sold to himself.^ So, also, if the principal die before the business is completed, and the agent become his executor or administrator, his right to receive commissions as agent is determined. But if an agent, who has been employed for a determinate period, be improperly discharged before the expira- tion of the time, he is primd facie entitled to compensation for the whole term for which he was employed. But the defendant, upon whom the burden of proof lies, may show either that the plaintiff was actually engaged in other profitable service dur- ing the term, or that such employment was offered to him, and rejected.* This, however, bears upon the case only in mitiga- the following agreement :" No accommodation that may be afforded as to time of payment or advance to retard the pajTnent of commission." ' Eicke V. Meyer, 3 Camp. 412 ; Cohen u. Paget, 4 Camp. 96 ; Roberts V. Jackson, 2 Stark. 225 ; Chapman v. De Tastet, 2 Stark. 294 ; Bower v. Jones, 8 Bing. 65; Robinson v. N. Y. Ins. Co., 2 Caines, 357; Miller v. Livingston, 1 Caines, 349 ; Story on Agency, § 326 et seq. ; Armstrong v. Toler, 11 Wheat. 261, 262 ; Story on Conflict of Laws, § 244-2.56 ; Wyburd V. Stanton, 4 Esp. 179 ; Josephs v. Pebrer, 3 B. & C. 689 ; Haines v. Busk, 6 Taunt. 521 ; Stackpole v. Earle, 2 Wils. 188 ; Waldo v. Martin, 4 B. & C. 319 ; 8. C. 6 Dowl. & Ry. 864 ; Parsons v. Thompson, 1 H. Bl. 822. 2 Hamond v. Holiday, 1 C. & P. 384 ; Broad v. Thomas, 7 Bing. 99 ; Dalton V. Irvin, 4 C. & P. 289 ; Read v. Rann, 10 B. & C. 438 ; Venmim V. Gregory, 21 Iowa, 326 (1866) ; Walker v. Tirrell, 101 Mass. 257 (1869). 3 Salomons v. Pender, 3 H. & C. 639 (1865). ' King V. Steiren, 44 Penn. St. 99 (1862) ; Costigan v. Mohawk & Hud- son R. R. Co., 2 Denio, 609 ; 2 Greenleaf, Evid. § 261 a. 252 CONTRACTS OP AGENTS. [CHAP. III. tion of damages.^ An agent is also entitled to his commission even though he exceed his powers if the principal afterwards ratify ; ^ and the principal cannot relieve himself by refusing to consummate the authorized bargain of his agent, or by an act of his own disabling him from performance.^ § 261. All expenses and advances properly incurred, or paid by an agent, and all losses incurred by him in the course of his agency, should be reimbursed to him.* So, also, if the agent, by the direction of his principal, innocently and unsus- piciously do a wrong, or commit a trespass, he will be entitled to compensation from his principal for the damages he sus- tains.^ The loss or damage for which an agent can claim compensation must, however, be the immediate result of a legal agency, and not the casual or remote result ; that is, the agency must be the cause, and not the occasion of the loss or damage.^ And to enable an agent to recover damages from his principal, sustained in defending a suit on the principal's be- half, the agent must show that the loss arose from the fact of agency, and that he was acting within the scope of his author- ity, and without fault or laches on his part.'' § 262. If, however, an agent be guilty of gross negligence, fraud, or misconduct, or violation of his instructions,^ he can- not recover even for the advances and disbursements made in ' King V. Steiren, 44 Penn. St. 99. 2 Nesbit V. Helser, 49 Mo. 383 (1872). ^ lb. See Gillett v. Corum, 7 Kans. 156 (1871). But the broker must find a purchaser able and willing to complete the bargain on the terms re- quired ; and if the party have not the means to comply and propose other terms which are not accepted, the broker will not be entitled to a commis- sion. Covington Drawbridge Co. v. Shepherd, 20 How. 227. * Story on Agency, § 335-3S9 ; Ramsay v. Gardner, 11 Johns. 439; Powell V. Trustees of Newburgh, 19 Johns. 284; D'Arcy v. Lyle, 5 Binn. 441 ; Hill V. Packard, 5 Wend. 375 ; Rogers v. Kueeland, 10 Wend. 218. ' Adamson v. Jarvis, 4 Bing. 66 ; Allaire v. Ouland, 2 Johns. Cas. 54, Coventry u. Barton, 17 Johns. 142; Avery u. Hulscy, 14 Pick. 174; Fletcher V. Harcot, Hutton, 55; Powell v. Trustees of Newburgh, 19 Johns. 284; Gower V. Emery, 18 Me. 79. See Haskin v. Haskin, 41 111. 197 (1866). « Story on Agency, § 341 ; Pothier, Traite de Mandat, n. 75, 76 ; Frix- ione V. Tagliaferro, 10 Moore, P. C. 175 (1856). ' Frixione v. Tagliaferro, 10 Moore, P. C. 175 ; 34 Eng. Law & Eq. 27. ' Porter v. Silvers, 35 Ind. 295 (1871). CHAP. III.] EIGHTS OP AGENTS. 253 the course of his agency ,i unless the principal ratify his acts.^ Nor can he recover for services and expenses in making a con- tract which is illegal and void by statute.^ So, also, he cannot recover for expenses and payments made after the revocation of his authority.* § 268. The cases in ■which an agent can sue third persons in behalf of his principal, may be divided into several classes, in all of which the rights of the two parties are correlative against each other. (1.) Where an express contract in writing is made with the agent, personally, the principal not being named, — as where a charter-party is executed by the master of a vessel in his own name, in behalf of the owner ; ^ or where a promissory note is given to the agent personally in his own name, though it be for the benefit of the principal ; ^ or where a negotiable note indorsed in blank is sent by the owner to his agent for collection, and the agent sues as indorsee.'^ But if the contract express the agency and name the principal, the suit cannot be brought in the name of the agent ; and whenever the instrument, viewed as a whole, plainly indicates that the contract is not made personally with the agent, suit must be brought in the name of the principal.^ ■ Dodge V. Tileston, 12 Pick. 328, 332 ; Savage v. Birckhead, 20 Pick. 167 ; Sea v. Carpenter, 16 Ohio, 412. 2 See Nisbet v. Helser, 49 Mo. 383 (1872). ' Stebbins D. Leo wolf, 3 Cush. 1,S7. * Vernon v. Hankey, 2 T. R. 113 ; 3 Bro. C. C. 314; Copland v. Stein, 8 T. R. 204 ; Paley on Agency, by Lloyd, 121, 122, 187 ; Story on Agency, §349. 6 Humble v. Hunter, 12 Q. B. 310; Schmaltz v. Avery, 16 Q. B. 655 ; 3 Eng. Law & Eq. 394. « Commercial Bank v. French, 21 Pick. 486 ; Faii-field v. Adama, 16 Pick. 381 ; Fisher v. Ellis, 3 Pick. 322 ; Buffum v. Chadwick, 8 Mass. 103. See also Wheelock v. Wheelock, 5 Vt. 433 ; Joseph ». Knox, 3 Camp. 320; Atkyna v. Amber, 2 Esp. 493; Solomons v. The Bank of England, 13 East, 135, note. f Solomons v. The Bank of England, 13 East, 135 ; Adams e. Oakes, 6 C. & P. 70. See also Story on Agency, § 394, and cases cited ; Dugan V. U. S., 3 Wheat. 172. 8 Per Mr. Justice Story, in Story on Agency, § 395, note ; Bowen v. Morris, 2 Taunt. 374 ; Hinds v. Stone, Brayton, 230 ; Griffith v. Ingledew, 6 S. & R. 429 ; Amos v. TemperJey, 8 M. & W. 798 ; Bickerton v. Burrell, 6 M. & S. 383 ; Rayner v. Grote, 16 M. & W. 359. 254 CONTRACTS OP AGENTS. [CHAP. III. § 264. (2.) Where the agent is the ostensible principal, and the fact of the agency does not appear, he is entitled to sue. So, if a person contract for an unknown and unnamed princi- pal, he may himself sue as principal, unless it appear that the defendant relied upon his character as being only that of agent, and would not have contracted with him as principal, had he known him to be so.^ Where in the contract the agent is stated expressly to be principal, the agent may not only main- tain an action, but it is not competent for the real principal, if he be a third party, to sue thereupon. ^ § 265. (3.) Where by usage of trade the agent is authorized to act as owner or principal, and is dealt with as such, he may sue, although he is known to be an agent. And in this class of cases it matters not whether the contract be deemed to be made exclusively with the agent or not.^ Generally speaking, where the agent has a special property or interest in the subject-matter of the contract, or a lien thereon, he would be entitled to sue, — as if he be a factor, or auctioneer, or master of a ship.* § 266. (4.) In all cases of torts, where the agent sustains a private and personal injury from the fraud or deceit of a third person, he may maintain an action against him for such wrong- ful act ; and wherever he is induced, by false representations, to pay over money belonging to his principal to a person not entitled to receive it, he may bring an action to recover it back.^ » Schmaltz v. Avery, 16 Q. B. 665 ; 3 Eng. Law & Eq. 895. ' Humble v. Hunter, 12 Q. B. 810; Schmaltz v. Avery, 16 Q. B. 655; 3 Eng. Law & Eq. 394. * Story on Agency, § 269, 397, and cases cited. » Williams v. Millington, 1 H. Bl. 81, 84 ; Girard v. Taggart, 5 S. & R. 19, 27; Coppin i,. Craig, 7 Taunt. 243; Hudson «. Granger, 6 B. & Al. 27. See post, § 402, 4:57, 458. * Story on Agency, § 416 ; Stevenson v. Mortimer, 2 Cowp. 806, per Lord Mansfield ; Oom«. Bruce, 12 East, 225 ; Holt v. Ely, 1 Com. Law, 420 ; 1 El. & B. 795. In this case Lord Campbell said : " I am of opinion that this rule ought to be discharged. I think that Holt, under the circumstances of this case, may well maintain this action for the amount which he paid to the defendant, he (Holt) having been induced to pay the money by the fraud and false representation of the defendant. I am also of opinion that Holt was guilty of negligence, and that he could not have set off this payment, if Lane CHAP. III.J EIGHTS OF AGENTS. 255 § 267. Ordinarily, tlie right of the agent to sne is sul)ordi- nate to that of the principal, and may be superseded or extin- guislied at any time by his intervention.^ Any defence which ■would be sufficient to defeat a suit, if brought by the principal, will also be complete against the agent.2 But if a written con- tract be made exclusively with the agent, who expressly states himself therein to be principal, the real principal would not be entitled to maintain an action thereupon,^ by showing that the professed principal was merely his agent. Yet if the contract contained any indication of agency, the rule would be other- wise.* The same rule also applies to public agents ; in as far as they are not suable, they cannot sue.^ § 268. Where a person makes a contract in the character and with the profession of agent, for some unknown and un- named principal, when in fact he is himself the principal, he would be ordinarily entitled to sue in his own name thereon.^ had brought an action against him to recover the amount of the fund with which he had been intrusted. I will even go further, and say, that as it is clear there was a fraud practised hy Ely, the defendant, upon Holt, and assuming that there was a general authority to Holt to pay money on Captain Lane's account, I think that in that case either Captain Lane or Holt might maintain this action. Wliere a man pays money by his agent, which ought not to have been paid, either the agent or the principal may bring an action to recover it bacli. That is the ground of the decision in Stevenson v. Mor- timer. That principle has been adopted by Mr. Justice Story in his work on Principal and Agent ; and I consider it a maxim of law, that where a fraud has been practised upon a person, that he should be replaced in the same position as he was before such fraud was practised upon him. I think this case comes within that principle, and that this rule to enter a nonsuit should therefore be discharged." See also 18 Eng. Law & Eq. 424. 1 Coppin u. Walker, 7 Taunt. 237 ; Coppin v. Craig, 7 Taunt. 243 Morris v. Cleasby, 1 M. & S. 576 ; Walter v. Ross, 2 Wash. C. C. 283. ^ Atkyns v. Amber, 2 Esp. 493 ; 3 Chitty on Com. and Manuf. 201, 202 203, 211 ; Leeds v. Marine Ins. Co., 6 Wheat. 565 ; Smith on Merc. Law, 77 ; Story on Agency, § 404, 405 ; Solomons v. Bank of Eng., 13 East, 135 n. ; De la Chaumette v. Bank of Eng., 9 B. & C. 208; s. c. 2 B. & Ad 385. ' Humble v. Hunter, 12 Q. B. 310; Schmaltz v. Avery, 16 Q. B. 655 3 Eng. Law & Eq. 395. * Ibid. ^ Bainbridge v. Downie, 6 Mass. 253 ; Dugan v. U. S., 3 Wheat. 172, 180. Schmaltz v. Avery, 16 Q. B. 655 ; 3 Eng. Law & Eq. 393. 256 CONTRACTS OP AGENTS. [CHAP. III. Yet if this deceit should operate injuriously as a fraud upon the other party., and the contract were executory, it seems that he could not enforce it.^ And if the person dealing with him as agent relied upon his character as being what he repre- sented it to be, and would not have contracted with him as principal, the same rule would apply .^ RIGHTS OF PRINCIPALS. § 269. Rights of principals. Inasmuch as the principal is bound by the acts and contracts of his agents, within the scope ' Rayner v. Grote, 15 M. & W. 359. 2 In Schmaltz y. Avery, 16 Q. B. 655 ; 3 Eng. Law &Eq. 893, an action on a charter-party not under seal, against the defendant, a ship-owner, for not taking the cargo on board, according to the charter-party, Patteson, J., said: " The question raised on the plea of non-assumpsit is, whether the action will lie at the suit of the present plaintiff. The charter-party, in terms, states that it is made by Schmalz & Co., the plaintiffs, as agents for the freighter. It then states the terms of the contract, and concludes with these words : ' This charter-party being concluded on behalf of another party, it is agi'eed that all responsibility on the part of Schmalz & Co. ceases as soon as the cargo is shipped.' The declaration treats the charter-party as made between the plaintiff and the defendant, without mentioning the character of the plaintiff as agent, and without any reference to the concluding clause, thereby treating the plaintiff as principal in the contract. " At the trial it was proved that the plaintiff was, in point of fact, the real freighter. No objection was taken to the admissibility of the evidence by which that fact was established ; but at the close of the plaintiff's case it was objected, that he was concluded b}" the terms of the charter-party, and fixed with the character of agent ; so that he could sue only in that charac- ter, and consequently that there was a variance between the declaration and the proof. A verdict was found for the defendant, with liberty to enter a verdict for the plaintiff for £5 10s., if the court should be of opinion that he was entitled to sue as principal, notwithstanding the terms of the charter- party; and a rule nisi was obtained so to enter it. We are of opinion that the rule must be made absolute. It is conceded that if there had been a third party who was the real freighter, such third party might have sued, although his name was not disclosed in the charter-party ; but the question is, whether the plaintiff can fill both characters of agent and principal, or rather whether he can repudiate that of agent and adopt that of principal, both characters being referred to in the charter-party, but the name of the principal not being therein mentioned. CHAP. III.] EIGHTS OP PRINCIPALS. 257 of their authority, he has, also, a reciprocal right against third persons, coextensive with his own liability. Nor does it mat- " The cases principally relied on for the defendant were Bickerton v. Bur- rell, 6 M. & S. 383, and Rayner v. Grote, 15 M. . Gififord, 1 Roll. Abr. 331, tit. Autlioritie, E. pi. 4; Charnley u. Winstanley, 5 East, 266 ; Story on Bailm. § 206 ; Hunt v. Rousmaniere, 8 Wheat. 174, 201-204. See Story on Agency, § 481, and note ; Minett v. Forrester, 4 Taunt. 541 ; Parker v. Smith, 16 East, 382 ; Dixon v. Ewart, 3 Meriv. 332. * See Michigan Ins. Co. v. Leavenworth, 30 Vt. 11 (1856). And no notice need be given in such case. Ibid. ' Rigs V. Cage, 2 Humph. 350; Peries ». Aycinena, 8 Watts & Serg. 64 ; Johnson v. Johnson, Wright, 594 ; Gale v. Tappan, 12 N. H. 145 ; Campanari v. Woodburn, 15 C. B. 400 ; Johnson v. Wilcox, 25 Ind. 182 ; Ferris v. Irving, 28 Cal. 645. 8 Cassiday v. M'Kenzie, 4 Watts & Serg. 382. And see Carriger v. Whittington, 26 Mo. 313. As to the general doctrine of revocation by death, see Wilson v. Edmonds, 4 Fost. 517 ; Saltmarsh v. Smith, 32 Ala. 404 ; Gleason v. Dodd, 4 Met. 333 ; Huston v. Cantril, 11 Leigh, 137 ; Scruggs V. Driver, 31 Ala. 274 ; Yemngton v. Greene, 7 R. I. 589. ' Story on Agency, § 483, 484, 485, 489 ; Davis v. Lane, 10 N. H. 156. 264 CONTRACTS OP AGENTS. [CHAP. III. and afterwards marry, she may still be an agent, unless pro- hibited by her husband.-^ So, also, although insanity generally operates as a revocation of the agency, it has not this eiFect in cases wliere a power is coupled with an interest, so that it can be exercised in the name of the agent.^ § 277. A principal may, by acts or omissions, so conduct himself, after he has actually terminated the agency, as to ren- der himself liable for the acts of his late agent, where the latter still professes to act in the capacity of agent.^ In a late case in England,* the defendant, residing near London, had a jewelry shop at Lewes. His business there was managed by an agent, who was in the habit, by the defendant's authority, of getting goods from the plaintiff. The agent absconded, went to the plaintiff in London, and obtained a quantity of jeweli'y of him, saying that he was going to Lewes. The Court of Queen's Bench held, that the defendant, by failing to give notice of the termination of the agent's authority, had become liable, under the above state of facts, for the value of the goods. ^ Co. Litt. 52a; Com. Dig. Attorney, C. 4; ib. Baron et Feme, D. 2 Davis V. Lane, 10 N. H. 156. « Tier v. Lampson, 35 Vt. 179 (1862) ; Diversy v. Kellogg, 44 111. 114 (1867). 4 Summers v. Solomon, 7 EI. & B. 879 (1857). See Bradish v. Bel- knap, 41 Vt. 172 (1868). Notice of the revocation of the agency need not be given where the agent had only a special authority to do a particular act. Watts V. Kavanagh, 35 Vt. 34 (1861). The principal cannot terminate the agency by mere secret instructions to his agent. Trickett v. Tomlinson, 13 C. B. (n. s.) 663 (1863). CHAP. IV,"J CONTEACTS OF PARTNERS INTER SESE. 265 CHAPTER IV. CONTRACTS OP PARTNERS. § 278. We now proceed to the consideration of special con- tracts of agency, in which the powers, duties, and liabilities of the parties are modified by their peculiar relationship. This class we shall divide into the following classes : 1st, Partners ; 2d, Executors and Administrators ; 3d, Trustees ; 4th, Guar- dian and Ward ; 5th, Corporations ; 6th, Auctioneers ; 7th, Brokers and Factors ; 8th, Consignees ; 9th, Supercargoes ; 10th, Ship's-husbands ; 11th, Masters of Ships. § 279. The law relating to Partnership differs from the general law relating to agency principally in the fact that each partner has an interest in common with the other part- ners, in the whole property, business, and responsibilities of the partnership ; which a mere agent has not. § 280. A partnership is a contract to share the profits of any business.^ As between the parties thereto, it cannot be created by the mere operation of' law, but depends solely upon the fact of agreement. No third person can be introduced into a firm but with the consent of the other partners.^ Neither a joint tenancy, nor a tenancy in common, of itself, constitutes a partnership ; and, therefore, the representative of a surviving partner does not become one of the firm.^ § 281. The same rules which apply to the capacity of per- sons to contract generally, apply to the parties to the particu- lar contract of partnership.* ' See Koyes v. Cushman, 25 Vt. 390; Putnam ». Wise, 1 Hill, 234. - Story on Partnership, § 5; CoUyer on Partnership, B. 1, ch. 1, § 1, p. 4, 6, 2d ed. ; Ex parte Barrow, 2 Rose, 252, 255; Crawshay ti.Maule, 1 Swanst. 608, 509, and the learned note of the reporter, p. 509. ' Pearce v. Chamberlain, 2 Ves. 33 ; Story on Partnersliip, § 3 ; 3 Kent, Comm. lect. 43, p. 25. * Story on Partnership, ch. 2, per tot. Ante, ch. 2, per tot. 266 CONTRACTS OP PARTNERS. [CHAP'. IV. § 282. The consideration on which the contract of partner- ship is founded may be either money or property, or mere labor or skill. ^ In every partnership, where there is any prop- erty, it is common stock, and is first liable for the partnership debts. After they are paid, and the partnership is dissolved, it is subject to a division among the members, or their represent- atives, according to agreement.^ § 283. Partnerships are either mriversal, general, or limited and special. The first species is where all the property, labor, and skill of both parties are employed for their mutual benefit. The second species is, where the partnership is confined to general business. The third, species is, where the partnership is limited to some one Ijranch of business. Partnerships are also either private partnerships, or joint-stock companies, either incorporated or unincorporated. There is no difference between them, except that corporations are governed strictly by the terms of their charter, and tlie stockholders or share- holders are not personally liable for the acts or contracts of the officers or members, unless expressly declared to be so by their cliarter.^ So, also, there are ostensible partners, who are and appear as partners ; nominal partners, who appear as partners, but are not ; and dormant or secret partners. Partnerships may be created in regard to any business, except a mere personal office of trust ; and may be created by deed, by parol, or by tacit assent.* § 284. We propose to consider, first, what constitutes a partnership, as between the partners, and their duties to each other ; and, second, what constitutes a partnership as to third persons, and the corresponding duties. § 285. Wherever there is both a community of interest in the capital stock and in the net profits, the contract of partner- ship is created so as to bind the partners.^ It is not, however, ' Story on Partnership, § 16 ; 3 Kent, Comm. lect. 43, p. 25 ; PutTen- dorf. Droit de la Nat. Lib. 5, ch. 8, § 1 ; Pothier, Contrat de Sooi6t6, No. 1 ; Dob V. Halsey, 16 Johns. 34. ^ 2 Kent, Comm. lect. 43, p. 24; Story on Partnership, § 16. ^ See post, Corporations. " Story on Partnership, ch. 5 ; U. S. Bank v. Binney, 5 Mason, 176, 183. ' See Duryea v. Whitcomb, 31 Vt. 395 (1858) ; Brigham v. Dana, 29 Vt. 1 (1856). "It does not seem to be requisite to the constitution of a strict partnership, that each partner, as between themselves, should be liable CHAP. IV.] CONTRACTS OP PARTNERS INTER SESE. 267 necessary that both of these circumstances should concur, in order to constitute a partnership; for even if the whole capital stock be the exclusive property of one of the parties, yet if there be a community of profit and loss, the parties will be partners. So, also, there are some partnerships where there is no common property, or stock employed in the business ; as in the case of mere factors or brokers. If there be no agreement, express or implied, as to the partnership property, it will be considered as the common stock of both parties ; and if there be no agreement as to the proportional share of the profits which each partner shall receive, both partners are to share equally.! This last presumption would only seem to arise where there is not only no actual contract as to the apportion- ment of profits, but no evidence growing out of the modes of dealing of the parties, or of the books and accounts, from which a contract might be inferred.^ If, however, the agree- to share indefinitely in the losses of the concern. An agreement to share in the profits, and consequently in the losses, as they affect the adventure, will ordinarily be held sufficient to constitute a strict partnership." Brigham v. Dana, 29 Vt. 1, 9, per Redfield, C. J. See also Bucknam v. Barnum, 15 Conn. 67; Loomis v. Marshall, 12 Conn. 70; Bond v. Pittard, 3 M. & W. 857; Smith v. Small, 54 Barb. 223 (1869). ' Reid V. HoUinshead, 4 B. & C. 867 ; Collyer on Partnership, B. 2, ch. 1, § 2, p. 112, 113, 2d ed. ; Ex parte Gellar, 1 Rose, 297 ; Soul^ v. Hayward, 1 Cal. 345 ; Sims v. Willing, 8 S. & R. 103 ; Musier v. Trumpbour, 5 Wend. 274 ; Everitt v. Chapman, 6 Conn. 347 ; SKent, Comm. lect. 43, p. 24, 25 ; Story on Partnership, § 27, 28 ; Wadsworth v. Manning, 4 Md. 59. But see Hitchings v. Ellis, 12 Gray, 449 (1859). 2 See Stewart v. Forbes, 1 Hall & Twells, 472 ; s. c. 1 Mao. & Gord. 137. In this case Lord Cottenham, referring to the case of Peacock v. Pea- cock, 2 Camp. 45, where Lord Ellenborough held, that in the absence of all positive stipulations in the particular case, a presumption of an equal divi- sion of profit would arise, said; " In that case it was properly held, that in the absence of any contract between the parties, or any dealing from which a contract might be inferred, it would be assumed, that the parties had car- ried on business on terms of an equal partnership. . . . But what would have been the decision in Peacock v. Peacock, if the books and accounts, instead of absolute silence as to the shares of the partners in each year, had described the shares in which the partners were interested in the business, and had attributed to the plaintiff four-sixteenths only of the shares of the business ? These entries are as conclusive of the rights of the parties as if they had been found prescribed in a regular contract." See also Thompson V. Williamson, 7 Bligh (n. s.), 432 ; Webster v. Bray, 7 Hare, 177 :. Story on 268 CONTRACTS OP PAETNEES. [CHAP. IV. ment expressly declare that the property is furnished by one partner, and the parties are to have a community of interest in the net profits, it will constitute a partnership only as to the profits."^ But wherever the parties themselves do not intend to create a partnership, they will not be responsible to each other as partners ; for the intent is the key to the contract.^ On the other hand, where the parties agree to form a partner- ship, and actually proceed to carry into execution the joint business, they become partners, though they do not understand the conditions of the agreement alike.^ § 286. Where the several partners disagree in regard to the propriety of a particular partnership transaction, the decision is with the majority in number, although the interest or shares of each be different ; provided such rule be consistent with the articles of copartnership. The minority are, however, entitled to notice, and are to be consulted. The articles of a copart- nership cannot, however, he altered, except by the unanimous consent of all.* If there be a balance of opinion, no action can Partnership, § 24, and notes ; Roach v. Perry, 16 111. 37 ; Donelson v. Posey, 13 Ala. 752. ' Meyer v. Sharpe, 5 Taunt. 74; Smith v. Watson, 2 B. & C. 401 ; Hes- keth M. Blanchard, 4 East, 144; Ex parte Hamper, 17 Ves. 404; Mair v. Glennie, 4 M. & S. 240. See Stocker v. Brookelbank, 3 Mac. & Gord. 250; Clement v. Hadlock, 13 N. H. 185 ; Julio v. Ingalls, 1 Allen, 41 ; Hall v. . Leigh, 8 Cranch, 50 ; Story on Partnership, § 27. = Wish V. Small, 1 Camp. 331, note; Dry v. Boswell, 1 Camp. 329, 330; Story on Partnership, § 80 ; Hazard v. Hazard, 1 Story, 371. See Hawkins v. Mclntyre, 45 Vt. 496 (1873). 3 Cook J). Carpenter, 34 Vt. 121 (1861). * Const V. Harris, Turn. & Russ. 496 ; Story on Part. § 123 ; Lloyd v. Loaring, 6 Ves. 773 ; Davies v. Hawkins, 3 M. & S. 488 ; Kirk v. Hodgson, 3 Johns. Ch. 400, 405; Watson on Part. ch. 4, p. 194, 2d ed. ; Minnit v. Whinery, 2 Bro. P. C. 323; 5 Bro. P. C. by Tomlins, 489; Green v. Miller, 6 Johns. 39 ; 5 Co. 63 a ; Coll. on Part. B. 3, ch. 1, p. 261, 2d ed. ; Grindley v. Barker, 1 Bos. & Pul. 229 ; Vice v. Fleming, 1 Y. & J. 227, 230 ; Rooth v. Quin, 7 Price, 173 ; Willis v. Dyson, 1 Stark. 164 ; Attor- ney-General V. Davy, 2 Atk. 212 ; The King v. Beeston, 3 T. R. 592 ; Lord Galway v. Matthew, 1 Camp. 403 ; s. c. 10 East, 264 ; 3 Kent, Comm. lect. 43, p. 45, 4th ed. ; Gow on Part. ch. 2, § 2, p. 52, 3d ed., and note; Livingston v. Lynch, 4 Johns. Ch. 673, 597 ; Withnell v. Gartham, 6 T. R. CHAP. IV.] PARTNERS. — WHEN LIABLE TO EACH OTHER. 269 be made by either party, in respect to tlie matter of difference ; and if, tlierefore, such disagreement be in respect to the essential objects and purposes of the partnership, it amounts to a suspension thereof, as to all persons having notice of the disagreement.^ § 287. We have already considered the rights growing out of the relation of partners to third persons ; and we now shall consider the rights and liabilities of partners to each other. Every partner is liable to the partnership for losses and in- juries resulting from his gross negligence, unskilfulness, or misconduct ; and the measure of skill and diligence required of him is the same as that required of an agent for hire, namely, reasonable diligence and ordinary skiU.^ A partner is bound, however, to exercise his best discretion, and to observe a per- fect good faith in all his transactions, or he will be responsible to his copartners.^ So, also, he must not violate the articles of partnership ; nor transact any business on his own account, incompatible with the interest of the partnership ; * nor exceed his power and authority ; for in such case, if loss result, he will be personally responsible therefor.^ Besides this, he is 1 Willis V. Dyson, 1 Stark. 164 ; Story on Part. § 123. One partner has power to collect and discharge a claim due the firm, although the other partners have forbidden the debtor to pay such partner. Noyes v. New Haven, &c.. Railroad Co., 30 Conn. 1 (1861). * Story on Part. § 169 ; Lefever v. Underwood, 41 Penn. St. 605 ; Blisset V. Daniel, 10 Hare, 493 ; Story on Agency, § 183 ; ante. Agency. In Lefe- ver u. Underwood a partner mixed funds of the firm with his own, deposit- ing them in his own name in a bank which failed ; and it was held that he was liable to the copartner for his share of the money, the latter being igno- rant that the funds had been thus used. ' Russell ». Austwiek, 1 Sim. 62 ; 3 Kent, Coram, lect. 43, p. 51, 4th ed. ; Story on Part. § 174 ; Carter v. Home, 1 Eq. Cas. Abridg. Account, A. pi. 13 ; Fawcett «. Whitehouse, 1 Russ. & Myl. 132, 148 ; Kitchens «. Congreve, 4 Russ. 562 ; Featherstonhaugh v. Fenwick, 17 Ves. 298 ; Dough- erty V. Van jSfostrand, Hoffm. 68, 69, 70 ; Burton v. Wookey, Madd. & Geldart, 367 ; Knight v. Marjoribanks, 11 Beav. 322 ; 2 Macn. & Gord. 10 ; Crawshay u. Collins, 15 Ves. 218, 227; Jefferys v. Smith, 3 Russ. 158. " Burton v. Wookey, Madd. & G. 367 ; Story on Part. § 177 ; 3 Kent, Coram, lect. 43, p. 61, 4th ed. ; Long v. Majestre, 1 Johns. Ch. 305 ; Glassington v. Thwaites, 1 Sim. & Stu. 124. « Coll. on Part. B. 2, ch. 2, § 2, p. 131 to 161, 2d ed. ; Stoughton v. Lynch, 1 Johns. Ch. 467. 270 CONTRACTS OF PAETNEBS. [CHAP. IV. bound to keep strict accounts of his individual transactions in behalf of the partnership, and also of his receipts, and to keep them open for inspection. ^ § 288. In case one of the partners have advanced capital to the concern, interest will be allowed where there is an agreement or understanding to that effect ; ^ but whether, in the absence of any evidence of such an understanding, interest will be allowed is not clearly settled. It has been held in America, that neither partner, in such case, will be entitled to interest on advances before a general settlement or dissolu- tion ; 3 but a contrary opinion has been intimated in a late case by an eminent English judge.* § 289. The articles of partnership are to be strictly adhered to, and are to be construed according to the general rules of interpretation, applicable to contracts in general, and stated in a subsequent part of this treatise.^ They are also liable to be controlled in equity by the acts of the partnership ; and such as have not been acted upon are treated as if they had never existed.^ The partnership commences from the date and exe- cution of the articles, unless some other time is therein speci- fied ; and this rule cannot be varied by parol evidence of a contrary intention.'^' It exists, unless limited, or dissolved by agreement, until the death of one of the partners. ' Coll. on Part. B. 2, ch. 2, § 1, p. 121 ; Rowe v. Wood, 2 Jac. & Walk. 653, 558 ; Ex parte Yonge, 3 Ves, <& B. 36 ; Goodman v. Whiteomb, 1 Jac. & Walk. 689 ; Story on Part. § 181. " Hodges V. Parker, 17 Vt. 242 ; Winsor v. Savage, 9 Met. 346 ; Millau- don V. Sylvestre, 8 La. 262. ' Lee V. Lashbrooke, 8 Dana, 214; Jones v. Jones, 1 Ired. Eq. 382; Honore v. Colmesnil, 7 Dana, 199 ; Waggoner v. Gray, 2 H. & Munf. 603 ; Dexter v. Arnold, 3 Mason, 284. ■' JMillar V. Craig, 6 Beav. 433. See also, as to this point, Hodges v. Parker, 17 Vt. 242 ; Stoughton v. Lynch, 1 Johns. Ch. 467 ; Beacham v. Eckford, 2 Sandf. Ch. 116. » Story on Part. § 190 ; Gow on Part. ch. 2, § 4, p. 109, 3d ed. See England M. Curling, 8 Beav. 129 ; Whitworth v. Harris, 40 Miss. 483. " Jackson v. Sedgwicjc, 1 Swanst. 460, 469 ; Story on Part. § 192. ' Featherstonhaugh v. Fenwick, 17 Ves. 299 ; Booth v. Parks, 1 Molloy, 466 ; Crawshay v. Collins, 16 Ves. 218 ; U. S. Bank v. Binney, 6 Mason, 176. CHAP. IV.] PARTNERS. — WHEN LIABLE TO THIRD PERSONS. 271 § 290. This brings us to the consideration of what consti- tutes a partnership as to third persons; and in tliese cases the real intent of the parties constitutes no criterion of respon- sibility, for the law will uot permit them, by a private arrange- ment, to limit their responsibility to others. Whatever may be their intent, therefore, a partnership will be created between themselves as to third persons, unless the whole arrangement and agreement between them either exclude some of the essen- tial ingredients of a partnership ; or unless it be clearly a case of mere agency, or joint tenancy.^ Thus, if A. and B. should agree to carry on business for their joint profit, and to divide the profits between them, but B. should bear all the losses, and should agree that there should be no partnership between them, as to third persons dealing with the firm, they would be held partners, although inter sese they would be held not to be partners.^ The existence of a partnership cannot, however, lie proved by the profession or act of one only, if proof of the acknowledgment and admission of the others whom he rep- resents to be his copartners cannot be made out actually or by implication ; ^ nor can it be proved by general reputation.* But successive acts or declarations, or acknowledgments made by each of several defendants, tending to show a partnership, 1 Story on Partnership, § 30 et seq. ; 3 Kent, Comm. lect. 43, p. 25, 26 ; Coope V. Eyre, 1 H. Bl. 37; Gow on Partnership, ch. 1, p. 10, 11, 3d ed. ; ib. ch. 4, p. 153; Smith v. Watson, 2 B. & C. 401; Harding v. Fox- croft, 6 Greenl. 76 ; Jackson v. Robinson, 3 Mason, 138 ; Hoare v. Dawes, 1 Douo-. 371; Post u. Kimberly, 9 Johns. 470; Holmes v. United Ins. Co., 2 Johns. Cas. 329; Gibson v. Lupton, 9 Bing. 297; Hall v. Leigh, 8 Craneh, 60. 2 Per Mr. Justice Story, in Hazard v. Hazard, 1 Story, 371, and cases cited there. See also Waugh v. Carver, 2 H. Bl. 235 ; Hesketh v. Blan- chard, 4 East, 144; Dob v. Halsey, 16 Johns. 34; Cheap v. Cramond, 4 B. & Al.' 663. See Wood v. Vallette, 7 Ohio St. 172 (1857) ; Bromley v. Elliot, 38 N. H. 287 ; Dwinel v. Stone, 30 Me. 384. 8 Welsh V. Speakman, 8 Watts & Serg. 257. See Davis v. Evans, 39 Vt. 182 (1866). The giving a firm note by one, in the absence of the other, for goods purchased by both, presents a strong prima facie case of partnership in an action by another on a contract made by one in the name of the firm. Drennen v. House, 41 Penn. St. 30 (1861). See Brewster v. Sterrett, 32 Penn. St. 115 (1858) ; Hogg v. OrgiU, 34 Penn. St. 344 (1859). 1 Carlton v. Ludlow Woollen Mill, 27 Vt. 496 (1854). 272 CONTEACTS OF PARTNERS. [CHAP. IT. are admissible, and are equivalent to a joint declaration. ^ And they may make themselves partners as to third persons, though they be not such strictly between themselves.^ § 291. In all cases where a partnership is created by agree- ment between the parties themselves, they are liable, as part- ners, to third persons. Their public liability, however, extends far beyond their private liability to each other, and may arise in contravention of their mutual intent, and in cases where, as between themselves, they would not be partners. Their lia- bility, as partners, to third persons, may arise in two ways ; either by a participation in the profits of the partnership, or by holding themselves out as partners.^ § 292. First. Whether persons be actually partners or not, they will be responsible as partners to all persons to whom they hold themselves out by their words or conduct, as such.* And if a person should, either by expressly professing to be a part- ner when he is not, induce any one to credit the partnership, or should, after his withdrawal from the firm, permit his name to be used by them, he would be personally liable.^ The fact that persons conduct business as if they were copartners, is sufficient primd facie evidence of a copartnership, and no writ- ten articles are necessary.® * Haughey v. Strickler, 2 Watts & Serg. 411 ; Barcroft v. Haworth, 29 Iowa, 462 (1870) ; Byington v. Woodward, 9 Iowa, 360. * Town V. Hendee, 27 Vt. 258 (1855) ; Fitch v. Harrington, 13 Gray, 468 (1859). 3 3 Kent, Comm. lect. 43, p. 32, 33, 4th ed. ; Waugh v. Carver, 2 H. Bl. 235, 246 ; Post v. Kimberly, 9 Johns. 489 : Ex parte Watson, 19 Ves. 459 ; Fox v. Clifton, 6 Bing. 776 ; Parker v. Barker, 1 Br. & B. 9 ; Goode V. Harrison, 6 B. & Al. 147 ; Bond v. Pittard, 3 M. & W. 357 ; 2 Bell, Comm. B. 7, ch. 2, p. 623, 624, 6th ed. See Reynolds v. Hicks, 19 Ind. 113 (1862). ^ Ibid. ; Stearns v. Haven, 14 Vt. 640 ; Benedict v. Davis, 2 McLean, 347 ; Perry v. Randolph, 6 Sm. & M. 335. ^ Stearns v. Haven, 14 Vt. 540 ; Story on Partnership, § 65 ; Young v. Axtell, cited 2 li. Bl. 242 ; Guidon v. Robson, 2 Camp. ;i02 ; Whitman v. Leonard, 3 Pick. 177 ; Griswold v. Waddington, 15 Johns. 57 ; Casco Bank v. Hills, 16 Me. 155; Kirk v. Hartman, 63 Penn. St. 97 (1869). See Ford v. Whitmarsh, Hurl. & Walm. 53; Fitch v. Harrington, 13 Gray, 468 ; Wood v. Pcnuell, 51 Me. 62 ; Irvin ». Conklin, 36 Barb. 64 ; Bowie V. Maddox, 29 Ga. 285. See Pratt v. Langdon, 12 Allen, ,544. « Forbes v. Davison, 11 Vt. 660; Gilbert v. Whidden, 20 Me. 367; Griffin ». Doe, 12 Ala. 783. See Charman v. Henshaw. 15 Gray, 293. CHAP. IT.j PARTNERS. WHEN LIABLE TO THIRD PERSONS. 273 § 293. Second. Whenever a party receives a proportional share of the net profits of the partnership, however small it may be, he is liable to third persons as a partner, whether he have any interest in the property of the partnership or not. Neither, in such case, does it make any difference, whether or not there be an express agreement between the parties, not to be liable as partners ; for that agreement would only limit their responsibility to each other. If there be a participation in the profits, after deducting the losses, the parties wiU be liable as partners to third persons, whatever be the mode of apportion- ing the share of each. An agreement, therefore, that one party shall receive a compensation proportioned to the net profits, creates the same liability as if the agreement were that he should receive a direct share in them. The reason upon which this rule is founded is, that a mutual interest in the net profits would entitle each party to an account, and would give each a specific lien for his proportion, or a preference in pay- ment over the other creditors. Therefore, in case of loss, as his security would be increased, his liabilities ought also to be extended.! § 294. The modern doctrine seems to be, that participation in the profits is not conclusive evidence that a person, not held out as an ostensible partner, is such, but is only cogent evi- dence of that fact ; and that the real and true test in such cases is, whether the party sought to be charged as partner has authorized the ostensible partners to carry on the trade in his behalf.2 ' Bond o. Pittard, 3 M. & W. 357 ; Dry v. Boswell, 1 Camp. 329, 330 ; Waugh V. Carver, 2 H. Bl. 235, 246 ; Ex parte Rowlandson, 1 Rose, 89, 92; Coll. on Part. B. 1, ch. 1, § 1, p. 24, 229, 2d ed. ; Miller v. Bartlet, 15 S. & R. 137; Ex parte Hamper, 17 Ves. 404; Ex parte Watson, 19 Ves. 461 ; Turner v. Bissell, 14 Pick. 192 ; Loomis o. Marshall, 12 Conn. 69; Champion «. Bostwick, 18 Wend. 175, 184; Cary on Part. 11, con- taining a defence of the principle; Perrine v. Hankinson, 6 Halst. 181. See Bucknam v. Barnum, 15 Conn. 67 ; Cushman ». Bailey, 1 Hill, 626 ; Macy I). Combs, 15 Ind. 469 (1860). « Cox V. Hickman, 8 H. L. C. 268 ; Kilshaw v. Jukes, 3 B. & S. 847 (1863) ; Niehoff v. Dudley, 40 111. 406 (1866) ; BuUen v. Sharp, Law R. 1 C. P. 86, reviewing Waugh v. Carver and other cases. Bromley v. Elliot, 38 N. H. 287; Berthold v. Goldsmith, 24 How. 536; Hallet v. Desban, 14 La. An. 529 ; Pratt v. Langdon, 12 Allen, 644 ; Gouthwaite b. Duckworth, 12 East, 421, seema contrary. Trr.T . 18 274 CONTRACTS OF PARTNERS. [CHAP. IV. § 295. But if two or more parties participate in the gross profits of a partnership, by which is meant the profits before the losses are deducted, or the gi'oss receipts, although the pre- sumption is that they are partners, it may be repelled by clear proof of a different intention and understan ding between them.^ Nor does the mere mode of participating in gross profits alter the liabilities of the parties ; for if a person receive a certain compensation for his labors or services proportioned to the gross profits, or in the nature of a commission upon them, he will not be considered as a partner, if it be distinctly proved that the contract was intended to be one of mere agency, and that the participation in gross profits was only designed as a convenient mode of estimating the compensation of the agent. ^ The reason upon which this rule is said to be founded is, that a compensatioi} fluctuating with the profits, and uninfluenced by the losses, gives a person no direct interest in the profits, suffi- cient to entitle him to an account, or to give him a lien for his share, and therefore works no injury to the other creditors.^ § 296. The distinction is between a participation in the net profits, whether by a compensation proportioned thereto, or by a direct share therein, on the one hand, which will render a party, so partaking, a partner ; and a participation in the gross profits or receipts, whether it be direct, or by a compensation, graduated by the gross profits indeed, but in its nature exclud- ing the idea of partnership, which will not render the parties liable as partners.* 1 See Parker v. Canfield, 37 Conn. 250 (1870). And this prima facie presumption applies to one who receives a sum equal to a certain share of the profits. lb. « See Crawford v. Austin, 34 Md. 49 (1870). * A lay or share in the proceeds or catchings of a whaling voyage does not create a partnership in the profits of the voyage, but is in the nature of seamen's wages, and is governed by the same rules. See Coffin v. Jenkins, 3 Story, IVl ; Wilkinson v. Frasier, 4 Esp. 182 ; Perrott v. Bryant, 2 Younge & Coll. 61 ; Baxter v. Rodman, 3 Pick. 435 ; Grozier v. Atwood, 4 Pick. 234; Rice v. Austin, 17 Mass. 197, 203; the Frederick, 5 Rob. Adm. 8. See Niehoff p. Dudley, 40 111. 406 (1866). * The cases on this point are exceedingly contradictory and confusing, and the distinctions so subtle that they are hardly perceptible. The distinction is stated to be between " an interest in the profits themselves, as profits, and the payment of a given sum of money, in a proportion to a given quantum CHAP. IV.] PARTNERS. — WHEN LIABLE TO THIRD PERSONS. 275 § 297. Again, it would seem, where an arrangement is made by which a party undertaking labor and services in re- of the profits ; as the reward of, and as a compensation for labor and ser- vices.'' Gow on Part. ch. 1, p. 18, 3d ed. Lord Eldon uses similar lan- guage, in Ex parte Hamper, 17 Ves. 404, where he says : " The distinction is so thin, that I cannot say it is established upon due consideration.'' See also Ex parte Rowlandson, 1 Rose, 89, 91, 92. It seems rather difficult, however, to perceive any essential difference between the two cases. Is it not the same thing, in its practical operation, to receive a certain proportion of the profits, or to receive a certain sum proportional to the profits ? In each case there is actually the same interest in the amount of profits ; the share or compensation fluctuates with the profits ; and the result is the same. If a person ia to receive twenty per cent on the profits, is it not the same thing as if he is to receive twenty cents on every dollar of the profits ? And yet this illustration answers the distinction. This whole distinction is utterly unfounded in legal principle, and unsupported by any reason of pub- lic policy. The equitable rule of construction, and that which obtains in all other contracts, is, that the intention of the parties shall furnish the key of their contract ; and that no agreement shall be construed in contradiction of such intention, if it be apparent. This rule is applied to the contract of partnership, whenever the question is between the parties themselves ; but whenever the question is in respect of their liabilities to third persons, an artificial rule is introduced, contradicting the general rule of interpretation, and of a purely arbitrary nature. This rule, having been once founded, could not easily be overthrown ; but common sense, struggling hand in hand with common law, and rebelling against so artificial a doctrine, created a distinction, by which it was enabled again to replace the equitable rule of interpretation, which had been ejected by the exception. This distinction, however, is so subtle as to create more difficulty than even the arbitrary rule. Although it is manifest that its operation, in relation to persons receiving a compensation proportioned to profits, so far from being anom- alous, is, in reality, in coincidence with the general doctrines of interpreta- tion. The contradiction in the cases grows out of a desire of reconciling the exception with the general rule. There seems, in truth, to be no pos- sible ground for the exception'; for the intention of the parties at once dis- tinguishes cases of mere agency from those of partnership, and is the only sound test of liability. The doctrine is, however, well settled, and is as stated in the text. See Grace v. Smith, 2 W. Bl. 998 ; Story on Partnership, § 23 to 38, note 2, to § 36 ; Waugh v. Carver, 2 H. Bl. 244, 245 ; Bond v. Pittard, 3 M. & W. 357 ; Cheap v. Cramond, 4 B. & Al. 663, 670 ; Saville v. Robertson, 4 T. R. 720 ; Cutler v. Winsor, 6 Pick. 335 ; Bailey v. Clark, 6 Pick. 372 ; Turner V. Bissell, 14 Pick. 193 ; Chase v. Barrett, 4 Paige, 148, 159. See, how- ever, Thompson v. Snow, 4 Greenl. 264, and Loomis v. Marshall, 12 Conn. 69. But see Hesketh v. Blanohard, 4 Bast, 144, 146 ; Mair v. Glennie, 4 M. & S. 240; Wish v. Small, 1 Camp. 331, note; Perrott v. Bryant, 2 276 CONTRACTS OP PARTNERS. [CHAP. IV. spect to a business is to receive, by way of compensation, a cer- tain share of the gross profits, after certain specified deductions are made, but is not to be rendered liable for any losses, or to be entitled to an account or specific lien or preference in pay- ment, that the contract of partnership is not created.^ In such a case, where the party has no responsibilities for losses as partner, compensation would be received by him solely in the character of agent, and not of partner.^ § 298. An agreement between several persons to make a joint purchase of goods does not make them partners, unless they are to be jointly concerned in the net profits arising from the subsequent disposal of them.^ Thus, where three persons agreed to purchase a quantity of oil, one of them to take one- fourth, a second to take one-fourth, and the third, whom they empowered to purchase, to take the remaining two-fourths, it was held, that this did not make them partners.* The sub- scribers of certain specified sums, for the building of a semi- nary or other such object, do not thereby become partners, or jointly liable beyond the amount of their subscriptions for the Younge & Coll. 61, 67, 68; Withington v. Herring, 3 Moo. & P. 30; Champion v. Bostwick, 18 Wend. 175, 184. See also the cases cited in relation to this subject in Story 'On Partnership, ch. 4 ; and particularly Pearson v. Skelton, 1 M. & W. 604; s. c. Tyrw. & Grang. 848, in which the criterion of partnership is clearly pointed out as being in a participation in the net profits, or a participation in the gross profits or receipts. See also Denny v. Cabot, 6 Met. 82 ; Cutler v. Winsor, 6 Pick. 335 ; Macy v. Combs, 15 Ind. 469 (1860). ' Denny v. Cabot, 6 Met. 82 ; Bradley v. White, 10 Met. 304, 306. See also Pott V. Eyton, 3 C. B. 32 ; Dunham v. Rogers, 1 Barr, 255 ; Eawlinson V. Clarke, 15 M. & W. 292; Rice v. Austin, 17 Mass. 197. " Ibid. See also Vanderburgh v. Hull, 20 Wend. 70 ; Turner v. Bissell, 14 Pick. 192; Loomis v. Marshall, 12 Conn. 69 ; Conklin v. Barton, 43 Barb. 435 ; Voorhees v. Jones, 6 Dutch. 270 ; Reynolds v. Hicks, 19 Ind. 113 ; Catskill Bank v. Gray, 14 Barb. 471 ; Pratt v. Langdon, 12 Allen, 544; Parker v. Caufield, 37 Conn. 260 (1870). 3 Grace v. Smith, 2 W. Bl. 1001 ; Hoare v. Dawes, 1 Doug. 373 ; Do- mat, De la Society, Liv. 1, tit. 8, § 3, 7 ; 1 (Euvres de Domat, p. 266, 266; Baldwin V. Burrows, 49 N. Y. 199 (1872). See also Biflf v. Brazil), 27 Iowa, 131 (1869). ' Coope V. Eyre, 1 H. Bl, 37. See also Dunham v. Rogers, 1 Barr, 255. CHAP. IV.] PARTNERS. — AUTHORITY AND LIABILITY. 277 debts incurred for such enterprise beyond the subscription list.i § 299. Again, an agreement between several parties to become partners at some future time, or communications and agreements with a view to the future formation of a partner- ship, or conditional agreements to become partners, do not constitute the parties partners, until the time appointed for the actual commencement of the partnership, or the happening of the condition.^ AUTHORITY AND LIABILITY OF PARTNERS. § 300. In the next place, as to the authority and liahility of partners. Each partner is the general agent of the firm. For all purposes connected with the partnership, therefore, he may dispose of the whole, or any part of the personal property belonging thereto, and collect debts due the firm, as a partner,^ in like manner as if he were sole owner. But one partner cannot sell to himself, without the consent of the other part- ners.* So, all transactions by a partner, as agent of the firm,^ will bind a firm, notwithstanding' the objections of the other partners,^ unless the objections are known to the party dealing with the firm.^ This rule applies to all cases, whether the pai'tners be ostensible, nominal, or dormant ; ^ for if any one be held out as a partner, and he be trusted upon faith in such 1 Shibley V. Angle, 37 N. Y. 626 (1868). • Dickinson v. Valpy, 10 B. & C. 142; Bourne v. Freeth, 9 B. & C. 640 ; Meigh ». Clinton, 11 Ad. & El. 418 ; Fox u. Frith, 10 M. & W. 131 ; Fox u. Clifton, 6 Bing. 776 ; Gabriel v. Evill, 9 M. & W. 297 ; Battley v. Bailey, 1 Scott, N. R. 143; Walstab v. Spottiswoode, 15 M. & W. 501. ■ s Ayer v. Ayer, 41 Vt. 346 (1868). * Comstock V. Buchanan, 57 Barb. 127 (1864). s Story on Part. § 94, 101 ; 3 Kent, Comm. lect. 43, p. 44, 4th ed. ; Watson on Part. ch. 2, p. 91 to 93, 2d ed. ; Gow on Part. ch. 2, § 2, p. 57 to 54, 3d ed. ; Coll. on Part. B. 3, ch. 1, § 1, p. 263 to 268, 2d ed. ; Fox V. Hanbury, Cowp. 445 ; Coles n. Coles, 15 Johns. 159, 161 ; Ander- son V. Tompkins, 1 Brock. 456. « Wilkins v. Pearce, 5 Denio, 541 ; Sage v. Sherman, 2 Comstock, 418. 7 Yeager v. Wallace, 57 Penu. St. 365 (1868). « Swan V. Steele, 7 East, 210; Sandilands v. Marsh, 2 B. & Al. 673; U. S. Bank v. Binney, 5 Mason, 176 | Winship v. Bank of U. S., 6 Peters, 529 ; Coll. on Part. B. 3, ch 1, p. 259; Watson on Part. ch. 4, p. 166, 167, 2d ed. ; Gow on Part. ch. 2, § 2, p. 36, 37, 8d ed. ; Coll. on Part. B. 2, ch. 2, § 1, p. 128, 129; Story on Part. § 103, 104; Tarns v. Hitner, 9 Barr, 441. 278 CONTRACTS OF PARTNERS. [CHAP. IV. representation, not to hold the partnership liable would be a fraud upon the public ; and if he be actually a partner, there is no reason why the other partners should not be responsible for acts done by him as their agent. A partner, therefore, would have full power, without the consent or knowledge of his copartners, to mortgage or sell all the stock in trade by his contract. 1 And if money be borrowed by one of the partners on the credit of the firm, all the partners are liable although he misappropriate the money .^ § 301. One partner does not, however, by virtue of his part- nership, possess authority to sign and seal deeds for the others ; and, therefore, in a conveyance of real estate, all the partners must join, or the deed will only operate as a convey- ance of the separate interest of the actual grantors.^ Nor does the mere fact of the existence of a partnership, per se, imply an authority in one of the partners to open a banking account in his own name on behalf of the firm.* Nor does a mere partnership to get orders on commission and divide the ex- penses authorize one of the partners to draw a bill in the firm name to raise funds to execute an order. ^ § 302. The authority of each partner to bind his copartners, being coextensive with those of a general agent of the firm, is subject, also, to the same limitations as those which apply to cases of general agency. It must, therefore, l^e restricted in its exercise to such transactions as arise in the ordinary course of the business carried on by the partnership. But he will be authorized as to third persons, regardless of the articles of partnership,® to follow any particular mode or course of deal- ' Tapley v. Butterfleld, 1 M(3t. 515 ; Arnold v. Brown, 24 Pick. 89 ; Hennessy v. The Western Bank, 6 Watts & Surg. 300 ; Greuley v. Wyetli, 10 N. H. 15 ; Lawrence v. Taylor, 5 Hill, 107 ; Anderson v. Tompkins, 1 Brock. 456 ; Halstead v. Shepard, 23 Ala. 668 ; Nelson v. Wheelock, 46 ni. 25 (1867). ^ Onondaga Bank v. De Pay, 17 Wend. 47. See Emerson v. Harmon, 14 Me. 271 ; Hayward v. French, 12 Gray, 453. " Coles V. Coles, 16 Johns. 159 ; Story on Part. § 94. See McDonald v. Eggleston, 26 Vt. 154 (1853) ; Dillon v. Brown, 11 Gray, 179. " TheAllianeeBanku. Kearsley, LawR. ffC. P. 433 (Ls71). See Cooke ti. Seelcy, 2 E.xch. 746. ^ Yates v. Dalton, 4 H. & N. 850 (18 8). " Edwards v. Tracy, 62 Penn. St. 374 (1869) ; Hoskinson v. Eliot, ib. 393. CHAP. IV.] PARTNERS. — AUTHORITY AND LIABILITY. 279 ing, if it be justified by the usage of trade, or expressly authorized, or be implied from the circumstances of the case.^ Thus, in a mercantile partnership for commercial purposes, the right of each partner to pledge the credit of the firm grows out of the general usage and law merchant, and is implied in the very object of the partnership. And in such cases, there- fore, one partner may, by drawing or indorsing promissory notes, or accepting bills of exchange or other negotiable secu- rities, or by any other acts appropriate and incident to the busi- ness, bind the firm.^ S'o one partner has the power to employ a banker ; and when that banker ceases to carry on business, he may employ another.^ But if a partnership be organized for farming or mining purposes, the directors or agents thereof will not, as incident thereto, possess a power to draw ov accept bills, or to draw and indorse notes for the company ; * for such powers do not necessarily or naturally grow out of a partnership for those purposes. Nor has a member of a firm of attorneys authority to bind his partners by drawing a post- dated check in the firm name.^ So, also, where it is not in the common course of the business to give letters of credit or of guaranty, one partner could not bind the firm by the letters of credit or guaranty ^ drawn by him. Nor does the mere fact of ' See ante. Agency; Story on Part. § 111 et seq., § 127, 128; Sandi- lands V. Marsh, 2 B. & Al. 678 ; Payne v. Ives, 3 Dowl. & Ryl. 664 ; CoU. on Part. B. 3, ch. 1, § 3, p. 279, 280, 281; Crawford v. Stirling, 4 Esp. 207 ; Hope v. Cust, cited 1 East, 63 ; Ex parte Nolte, 2 Glyn & Jam. 306 ; Sutton V. Irwine, 12 S. & E. 13 ; Hamill ;;. Purvis, 2 Penn. 177 ; Dun- can «. Lowndes, 3 Camp. 478; Dickinson v. Valpy, 10 B. & C. 128; Dob «. Halsey, 16 Johns. 38 ; Shirreff v. Wilks, 1 East, 52 ; Mullett v. Huch- ison, 7 B. & C. 639 ; Thicknesse v. Bromilow, 2 Cr. & J. 425 ; Green- slade V. Dower, 7 B. & C. 635; 3 Kent, Comm. lect. 43, p. 46, 4th ed. ; 2 Bell, Comm. B. 7, p. 618, 5th ed. ' Story on Part. § 102 ; 3 Kent, Comm. lect. 43, p. 40 to 42, and cases cited; Winship v. Bank of U. S., 5 Peters, 529 ; U. S. v. Binney, 5 Mason, 176; s. C. 5 Peters, 629; South Carolina Bank v. Case, 8 B. & C. 427; Fisher w.Tayler, 2 Hare, 218; Moseley v. Ames, 6 Allen, 163. = Beale v. Caddick, 2 H. & N. 326 (1857). ■* Hedley v. Bainbridge, 2 G. & D. 483 ; Levy v. Pyne, Car. & M. 453. » Forster v. Mackreth, Law R. 2 Exch. 163 (1867) . ' Hope V. Cust, 1 East, 53 ; Duncan v. Lowndes, 3 Camp. 478 ; Hasle- ham V. Young, 5 Q. B. 833 ; Butterfield v. Hemsley, 12 Gray, 226. 280 CONTRACTS OP PABTNEES. [CHAP. IV. partnership give authority to one partner to bind the other by a submission of a partnership matter to arbitration.^ In such cases, therefore, either an express authority, or usage, or extraordinary exigencies, must be proved.^ And it is imma- terial that an incidental benefit may result to the firm ; if the contract is beyond the scope of the firm business it will not bind the other partner.^ § 303. Again, all acts and contracts intended by a partner to bind the firm must be made in its name, or they will ordi- narily be considered as his private act and contract.* It is not necessary, however, that the name of the firm should be signed, provided it appear on the face of the written contract or note that it is to be for partnership purposes.^ And though a note be signed individually by the members of a firm, instead of in the firm name, by reason of the preference of the payee, it will be a partnership note, if the consideration for which it was given went into the firm business.^ Yet if the partner author- ized to draw a bill of exchange in behalf of this firm, make it in his own sole name, and there is nothing to show that it was on partnership account, the partnership is not bound thereby, even though the bill be made for a partnership purpose.' For when credit is given solely to the individual partner, no part- nership liability arises. And where a partnership is carried on in the name of one partner, in order to bind the firm on contracts signed by him, it is necessary to show that the sig- nature was intended to bind the firm,^ and that the transaction ' Martin v. Thraslier, 40 Vt. 460 (1868). "i Wilson V. Williams, 14 Wend. 146 ; Catskill Bank v. Stall, 15 Wend. 364; Mayberry v. Sainton, 2 Harring. 24; Mauldin v. Branch Bank, 2 Ala. 502. See Darling v. March, 22 Me. 188 ; Rollins v. Stevens, 81 Me. 454. ' Barnard ». Lapeer, &c., Plank Road Co., 6 Blich. 274 (1859). ■• Kirk V. Blurton, 9 M. & W. 289 ; Faith v. Richmond, 11 Ad. & El. 339 ; Story on Part. § 102. ' Mason v. Rumsey, 1 Camp. 884 ; 3 Kent, Comm. leet. 43, p. 41. « Kendrick v. Tarbell, 27 Vt. 512 (1855) ; Patch v. Wheatland, 8 Al- len, 102. ' Emly V. Lye, 15 East, 7; Siffkin v. Walker, 2 Camp. 308; Faith v. Richmond, 11 Ad. & El. 339; Kirk v. Blurton, 9 M. & W. 284; Pothier, De Soci6t6, n. 100, 101, 105. " U. S. Bank v. Binney, 5 Mason, 176, 183 ; Bank of Rochester v. Mon- teath, 1 Denio, 402. CHAP. IV.] PARTNERS. — AUTHORITY 4.ND LIABILITY. 281 •was for partnership purposes, and within his authority ; — and the burden of proof is on the creditor.^ But where a partner signs a bill or other instrument with his own name, he will not be personally responsible, if on the face of the note it appear that he signs for his copartners. Thus, where a partner signed a promissory note " for John Clarke, Richard Mitchell, Joseph Phillips, and Thomas Smith," — Richard Mitchell ; it was held that the firm was liable.^ § 304. To the general rule that a partner may bind the firm in transactions within the scope of the business of tlie copartnership, there are two exceptions. The first is, that one partner cannot, without the consent of his copartners, submit or refer any matter to arbitration, although it immediately refer to the business of the partnership.^ § 305. The other exception is, that one partner cannot exe- ' Etheridge v. Binney, 9 Pick, 274. " Ex parte Buckley, 14 M. & W. 472. In this case the contrary doctrine, as held in Hall v. Smith, 1 B. & C. 407, was expressly overruled. Baron Parke says, " This is, ^n'md facie, a promise by one partner, for himself and the other three partners, and it amounts to one promise of the four persons constituting the firm ; and if Mitchell had authority, the firm is bound. I really must say I think Hall v. Smith cannot be supported. The partner, in making the promise, is only an agent for the firm. Then does it bind him personally, or does it bind the firm? No doubt the instru- ment was intended to bind the firm ; and as he had authority as a partner to do it, it had that effect. I think we must certify our opinion to the Lord Chancellor, that there was no separate right of action against Mitchell upon any of these notes." See also Story on Part. § 143, in which Mr. Justice Story, speaking of the case of Hall v. Smith, says : " This construction of the instrument certainly goes to the very verge of the law, and perhaps may be thought to deserve further consideration." See also Bank of Rochester V. Monteath, 1 Denio, 402 ; Palmer v. Stephens, 1 Denio, 471. ' Com. Dig. Arbitrament, D. 2 ; 2 Bell, Comm. B. 7, p. 618, 5th ed. Stead V. Salt, 3 Bing. 101; Adams v. Bankart, 1 C. M. & R. 681 Kartbaus v. Ferrer, 1 Peters, 222, 228 ; Strangford v. Green, 2 Mod. 228 Buchanan v. Curry, 19 Johns. 137 ; 3 Kent, Comm. lect. 43, p. 49, 4th ed. In Pennsylvania and Kentucky, a different doctrine obtains, and one partner may, by an unsealed instrument, submit a matter to arbitration, so as to bind the partnership. Taylor v. Coryell, 12 S. & R. 248; Southard v. Steele, 8 Mon. 435 ; Cotton ». Evans, 1 Dev. & Bat. Eq. 284. But see Gow on Part. ch. 2, § 2, p. 66 ; Gow's Supp. to Part. ch. 2, § 2, p. 17 ; Boyd V. Emmerson, 2 Ad. & El. 184 ; Harrison v. Jackson, 7 T. R. 207 ; Strangford v. Green, 2 Mod. 228; Story on Part. § 114, 115, 116. 282 CONTRACTS OP PARTNERS. [CHAP. IV. cute a specialty so as to bind his copartners, unless authority be expressly given him under seal.^ This doctrine is strictly declared in all the English decisions, with one exception; namely, that where a specialty is signed and sealed by one partner in the presence, and with the consent of the others, they will be bound thereby, although the agent have only parol authority to execute it. Except in this one instance, therefore, the execution of a sealed instrument must be by authority, given under seal ; and no previous parol assent, or subsequent parol ratification, is sufficient to render the partnership liable.^ § 306. In America, however, this exception is subject to many restrictions and modifications.^ And the more equitable doctrine, declared in the courts of the United States, is, that a previous parol assent, or a subsequent parol ratification, whether express or implied, is sufficient to give validity to a deed signed by one partner in behalf of the partnership ; al- though, unless such assent or ratification be given, a deed so signed would only be binding upon the particular partner.* A fortiori, if one partner, in the presence of his copartners and without their objection, subscribe their names to a sealed instrument, it becomes the deed of all.^ ' Ante, § 243 ; Watson on Part. ch. 4, p. 218 to 222, 2d ed. ; Coll. on Part. B. 3, ch. 2, § 1 ; p. 308 to 312, 2d ed. ; Gow on Part. ch. 2, § 2, p. 57 to 60 ; 3 Kent, Comm. Icct. 43, p. 47, 48, 49, 4th ed. ; Story on Agency, § 49, 50, 51 ; Harrison v. Jackson, 7 T. R. 207 ; Metcalfe v. Rycroft, 6 M. 6 S. 75 ; Elliot v. Davis, 2 Bos. & Pul. 338 ; Hawkshaw v. Parkins, 2 Swanst. 543 ; Skinner v. Dayton, 19 Johns. 513. " Gow on Part. ch. 2, § 2, p. 58 to 60, 3d ed. ; Steiglitz v. Egginton, Holt, N. P. 141 ; Harrison v. Jackson, 7 T. R. 207 ; Metcalfe v. Rycroft, 6 M. & S. 75 ; Elliot v. Davis, 2 Bos. & Pul. 338 ; Hawkshaw v. Parkins, 2 Swanst. 543. See Dillon v. Brown, 11 Gray, 179. » Act of Congress of March 1, 1823, ch. 149, § 25 ; Laverty v. Bnrr, 1 Wend. 529 ; Bank of Rochester v. Bowen, 7 Wend. 168 ; N. Y. Firemen Ins. Co. V. Bennett, 5 Conn. 574. "* Harrison v. Sterry, 5 Cranch, 289. See Cady v. Shepherd, 11 Pick. 400, in which all the authorities are reviewed and the doctrine elaborately discussed. Skinner v. Dayton, 19 Johns. 513 ; Gram v. Seton, 1 Hall, 262, in which all the authorities are examined and discussed. Anderson v. Tompkins, 1 Brock. 462 ; Lee v. Onstott, 1 Pike, 206 ; Morse v. Bellows, 7 jST. H. 549 ; Henderson v. Barbee, 6 Blaekf. 26. ^ Henderson v. Barbee, 6 Blackf. 26 ; Pike v. Bacon, 21 Me. 280. CHAP. IV.J PABTNERS. — AUTHORITY AND LIABILITY. 283 § 307. Another infringement is also made upon the English doctrine by act of Congress, -which provides that a custom- house bond given in the name of a firm, and signed by one partner, for the payment of duties upon goods imported for and belonging to the partnership, is binding upon the firm.^ §308. The general doctrine, that the partnership is liable for all transactions by one partner, acting as agent, within the scope of the partnership business, is not limited to cases ■where such partner acts hond fide ; but extends to all acknowl- edgments, admissions, frauds, or misrepresentations by one partner, made maid fide, in relation to matters apparently ■within the scope of his authority.^ This doctrine is founded not only upon reasons of public policy, but also upon the ground that there is an implied undertaking, on the part of each partner, to be responsible for the honesty of all, and wherever an injury must result to one of two innocent persons, it should be borne by the party whose act is the cause of the injury. If credit, therefore, be given bond fide to the firm, on account of the misrepresentation or concealment of one part- ner, all the partners will be responsible, notwithstanding their ignorance thereof, and notwithstanding any private agreement between them, limiting their liability.^ But if the party with whom the partner deals have knowledge or notice that he is » Act of Congress of March 1, 1823, ch. 149, § 25. ^ U. S. Bank ». Binney, 5 Mason, 176, 187, 188 ; Etheridge v. Binney, 9 Pick. 272 ; ■Winship v. Bank of U. S., 5 Peters, 529 ; Story on Part. § 105 ; Coll. on Part. B. 3, ch. 1, p. 260 ; Thicknesse v. Bromilow, 2 Cr. & J. 428 ; Clavering v. Westley, 3 P. Wms. 402; Baker v. Charlton, Pc-ake, 80; 1 Montagu on Part. p. 37, note c; Swan v. Steele, 7 East, 210; Ex parte Bolitho, Buck, 100; South Carolina Bank v. Case, 8 B. «& C. 427; Manuf. & Mech. Bank v. Winship, 6 Pick. 11 ; Mifflin u. Smith, 17 S. & R. 165 ; 2 Bell, Comm. B. 7, § 615, 618, 5th ed. ; Onondaga Bank u. De Puy, 17 ■Wend. 47 ; Locke v. Stearns, 1 Met. 560. 8 Gow on Part. ch. 2, § 2, p. 55, 3d ed. ; Coll. on Piirt. B. 3, ch. 1, § 4, p. 282 to 290, 2d ed ; Lacy m. M'Neile, 4 Dowl. & Rjl. 7 ; Pittam v. Foster, 1 B. & C. 248 ; Burleigh v. Stott, 8 B. & C. 36 ; Helsby v. Mears, 5 B. & C. 504; Bignold v. Waterhouse, 1 M. & S. 255; Story on Part. § 107, 108; Willet u. Chambers, Cowp. 814; Stone v. Marsh, 1 Ry. & Mood. 364; s. c. 6 B. & C. 561; Hume v. BoUand, 1 Ry. & Mood. 371; Marsh v. Keating, 2 CI. & Finn. 250; Boardman v. Gore, 15 Mass. 331; Rapp V. Latham, 2 B. & Al. 795. See Linton v. Hurley, 14 Gray, 191. 284 CONTRACTS OF PAETNBKS. [CHAP. IV. acting maid fide, or beyond his authority, and especially if there be collusion between them, the firm will not be bound by any act done, or contract made by them.^ In cases of fraud by one partner, the limitation in bar of the claim in equity only begins to run upon the discovery of the fraud by the party defrauded. 2 § 309. The application of a joint security by a partner in discharge of his individual debt, although it does not of itself give rise to an imperative presumption of mala fides, yet throws upon the creditor the burden of proof, not only that the whole transaction has been in entire good faith on his part,^ but with- out negligence ; for as such a use of the partnership funds is a misappropriation, the mere nature of the transaction is enough to put him on his guard, and he is bound to acquaint himself with the actual authority of the partner.* But where the negotiable paper of a firm, although given by a partner in pay- ment of his private debt, passes into the hands of a lond fide holder, for valuable consideration, without actual or construc- tive notice, the partnership would be liable.^ § 310. The release of a partnership del}t by one partner will be void as to the firm, if it be taken in discharge of the sepa- rate debt of the partner releasing it, by a creditor who has 1 Snaith v. Burridge, 4 Taunt. 684 ; Rogers v. Batchelor, 12 Peters, 221 ; Story on Part. 110; Coll. on Part. B. 3, ch. 1, p. 269 to 282, 2d ed. ; Green V. Deakin, 2 Stark. 347 ; Hope v. Oust, 1 East, 53 ; Story on Agency, § 125 ; Ex parte Agace, 2 Cox, 312 ; Watson on Part. ch. 4, p. 180, 2d ed. ; Farrar u. Hutchinson, 9 Ad. & El. 641 ; Arden ». Sharpe, 2 Esp. 624; Ex parte Goulding, 2 Glyn & Jam. 118. 2 Blair v. Bromley, 5 Hare, 642. 8 Frankland v. M'Gusty, 1 Knapp, 274 ; Ex parte Bonbonus, 8 Ves. 540 ; Lloyd u. Freshfield, 9 Dowl. & Ryl. 19 ; Gansevoort v. Williams, 14 Wend. 133 ; Dob v. Halsey, 16 Johns. 34. If one partner delivers property of the firm, in fraud of the others, to a person in payment of a private debt due him, this binds the whole firm. Farley v. Lovell 103 Mass. 387 (1869) ; approving Homer v. Wood, 11 Cush. 62. i Rogers V. Batchelor, 12 Peters, 229. 6 Ibid. ; Ridley v. Taylor, 13 East, 175 ; Williams v. Thomas, 6 Esp. 18 ; Livingston v. Roosevelt, 4 Johns. 251; 3 Kent, Comm. lect. 43, p. 44; N. Y. Firemen Ins. Co. v. Bennett, 5 Conn. 574; Austin v. Vande'rmark, 4 Hill, 259; WeUs w. Evans, 20 Wend. 251 ; s. c. 22 Wend. 324; Waldo Bank v. Lumbert, 16 Me. 416. CHAP, IV.] PARTNERS, — AUTHORITY AND LIABILITY. 285 knowledge of all the circumstances. In such cases the burden of proof is on the holder or creditor to repel the presumption of fraud or collusion, unless there were circumstances from which the assent of the partners might be inferred ; because the nature of such a transaction should have put the creditor on his guard.-' § 311. If, however, credit be exclusively given to a particu- lar partner, in any contract, he only will be bound ; and the same rule applies as that which obtains in contracts of agents.^ Such credit must, however, be exclusive ; and in order to be deemed exclusive, must be given with full knowledge of all the parties interested. ® The rule applicable in cases of mere agency does not apply to the case of credit given to an osten- sible partner, where there are unknown dormant partners ; be- cause the creditor is in such case deprived of the right of choosing his debtor. So, also, the rule does not apply to the case of a partnership carried on in the sole name of one part- ner, who at the same time transacts business on his own sep- arate account, provided the contract be made in behalf of the partnership.* But where a note is signed by a partner in his ^ Gram v. Cadwell, 6 Cow. 489 ; Evernghim v. Ensworth, 7 Wend. 326 ; ShirrefF v. Wilks, I East. 48; Story on Part. § 133, 134, 135; Farrar v. Hutchinson, 9 Ad. & El. 641; Ex parte Bonbonus, 8 Ves. 540; Gow on Part. ch. 4, § 1, p. 149, 3d ed. ; Coll. on Part. B. 3, ch. 2, p. 331 to 347, 3d ed. ; Frankland v. M'Gusty, 1 Knapp, 272; Loyd v. Fresh- field, 2 C. & P. 325 ; Foot v. Sabin, 19 Johns. 154 ; Dob v. Halsey, 16 Johns. 34; Gansevoort v. Williams, 14 Wend. 133; Rogers v. Batchelor, 12 Peters, 229. 2 See Chapman v. Devereux, 32 Vt. 616 (1860). ' It will be considered exclusive if there be an arrangement, known to one dealing with the firm, that one of the partners shall not be liable for purchases made by the firm on credit. Hastings v. Hopkinson, 28 Vt. 108 (1855). * Gow on Part. ch. 4, § 1, p. 162 ; Story on Agency, § 291, 292. See ante. Agency, and cases cited. Hoare v. Dawes, Doug. 371 ; Story on Part. § 138, 139 ; 2 Kent, Comm. lect. 41, p. 630, 631, 4th ed. ; Paley on Agency, by Lloyd; Thomson v. Davenport, 9 B. & C. 78; U. S. Bank v. Binney, 6 Mason, 176 ; Winship v. Bank of U. S., 5 Peters, 529; Kelley v. Hurl- burt, 5 Cow. 534 ; Mifflin v. Smith, 17 S. & R. 165. This principle only ap- plies to commercial partnerships, however. Pitts v. Waugh, 4 Mass. 424 ; Smith V. Burnham, 3 Sumner, 435; Saville v. Robertson, 4 T. R. 725; Robinson v. Wilkinson, 3 Price, 538 ; Melledge v. Boston Iron Co., 5 Cush. 158 ; post, § 1343. 286 CONTRACTS OP PARTNERS. [CHAP. IV. individual name, and not in the name of the firm, the firm is not responsible therefor, unless they had treated the note as their own.^ § 312. An incoming, partner will not be liable in respect to debts contracted by the firm previously to his becoming a member, unless he expressly or impliedly assume such respon- sibility. The presumption of law is against his liability, but it may be repelled by proof. ^ § 313. A retiring partner will, however, be responsible to creditors of the firm for debts contracted while he was a mem- ber, notwithstanding any private agreement between the part- ners relative to his responsibility, unless the creditors assent to such arrangement, and agree to consider the- remaining part- ners as their exclusive debtors.^ So, also, if an ostensible partner retire from a firm, he will be responsible for all debts and liabilities of the firm contracted subsequently to his retire- ment, with persons having no knowledge thereof, who have previously dealt with the firm. For the fact of his being a part- ner may be the only ground upon which credit was given to the firm ; and every one who deals with the firm, without notice of such fact, is entitled to give credit to all of the members.* But if such person be a dormant partner, he will not be liable for any debts contracted after he retires from the firm; be- ' Emly V. Lye, 15 East, 7 ; Siif kin v. Walker, 2 Camp. 308. See ante, §302. 2 Coll. on Part. B. 3, ch. 3, § 2, p. 361, 2d ed. ; Story on Part. § 152; Shirreff v. Wilks, 1 East, 48; Williams v. Jones, 5 B. & C. 108; Vere v. Ashby, 10 B. & C. 289 ; Catt v. Howard, 3 Stark. 5 ; Ex parte Jackson, 1 Ves. Jr. 131; Kirwan v. Kirwan, 2 Cr. & Mees. 617; Helsby u. Mears, 5 B. & C. 504; Ex parte Pecle, 6 Ves. 602; Hoby v. Roebuck, 7 Taunt. 157 ; Ketchum v. Durkee, Hoffm. 538 ; Babcock v. Stewart, 58 Penn. St. 179 (1868). » Coll. on Part. B. 3, ch. 3, § 3, p. 383 to 398, 2d ed. ; Evans v. Drum- mond, 4 Esp. 89 ; Reed v. White, 5 Esp. 122 ; Thompson v. Percival, 5 B. 6 Ad. 925; Oakeley v. Pasheller, 10 Bligh (n. s.), 548; 4 CI. & Finn. 207 ; Gough v. Davies, 4 Price, 200 ; Harris v. Lindsay, 4 Wash. C. C. 271 ; Hart V. Alexander, 2 M. & W. 484 ; Daniel v. Cross, 3 Ves. Jr. 277 ; Bedford v. Deakin, 2 B. & Al. 210 ; Featherstone v. Hunt, 1 B. & C. 113 ; Blew V. Wyatt, 5 C. & P. 397 ; Smith v. Rogers, 17 Johns. 340 ; Story on Part. § 158, 159. See Richards v. Fisher, 2 Allen, 527. * See Spaulding v. Ludlow Woollen Mill, 36 Vt. 150 (1863). CHAP. IV.] PARTNERS. — AUTHORITY AND LIABILITY. 287 cause credit cannot be supposed to have been given to him, he never having been held out as a partner. An ostensible part- ner is, therefore, bound to give notice of his retirement to all creditors with whom he has previously dealt, in order to limit his responsibility in future transactions ; and if loss accrue in consequence of his omission so to do, he must suffer the con- sequences of his own negligence.^ But no notice of retirement need be given, by either an. ostensible or a dormant partner, to persons with whom the firm has had no previous dealings, unless such partner allow his name to be used as if he were one of the firm ; in which case he will be responsible to any one who is thereby deceived.^ § 314. Notice may be either express or implied. To all per- sons, who have been accustomed to deal with the firm pre- viously, express notice should be given. Knowledge of the fact, however it be obtained, is sufficient notice, however ; and if the circumstances, under which such person deals with a firm subsequently to the retirement of one partner, be such as to raise the presumption of his knowledge of the fact, notice will be inferred, and he must prove his ignorance, to entitle himself to recover against the retired partner. The question of notice is, ordinarily, a matter compounded of law and fact, which must depend upon the circumstances of each particular case, and is for the determination of a jury. Notice in any public gazette in the place where the part^iership exists is suf- ficient notice to all persons, who have not previously dealt with the firm, whether it be seen by them or not ; and such notice is sufficient to create a presumption of knowledge on the part of every one, unless the retiring party, by some act or omis- " Coll. on Part. B. 3, ch. 3, § 3, p. 369 to 375, 2d ed. ; 3 Kent, Comm. lect. 43, p. 66, 67, 68, 4th ed. ; Gow on Part. ch. 5, § 2, p. 248 to 251 j Story on Part. § 160, 161; Graham v. Hope, Peake, 154; Gorham v. Thompson, Peake, 42 ; Watson on Part. ch. 7, p. 384, 385. 2 Parkin ». Carruthers, 3 Esp. 248; 3 Kent, Comm. lect. 43, p. 67, 68; Williams v. Keats, 2 Stark. 290; Brown v. Leonard, 2 Chitty, 120; New- some V. Coles, 2 Camp. 617 ; Dolman v. Orchard, 2 C. & P. 104 ; Tombeck- bee Bank v. Dumell, 5 Mason, 66; Lansing v. Gaine, 2 Johns. 300; Ketohamu. Clark, 6 Johns. 144, 148; Carter v. Whalley, 1 B. & Ad. 11; Le Roy v. Johnson, 2 Peters, 198, 200. 288 CONTRACTS OP PARTNERS. [CHAP. IV. sion, actually or apparently contimie his liability.^ The same rule, in regard to notice, also obtains in case of a dissolution of the partnership by the act of the partners.^ § 315. If a retiring partner fraudulently withdraw a portion of the partnership funds, when the partnership is insolvent, he will be responsible, whether notice of his retirement be given or not. It is, however, on account of the fraud that he is held liable, and unless it exist, he will not be responsible.^ A retiring partner who conceals his withdrawal, and allows the re- maining members to contract in the name of the old firm, is liable to those who give them further credit on the faith of the continuance of the former partnership.* DISSOLUTION OP PARTNERSHIP. § 316. We come next in order to the consideration of what constitutes a dissolution of partnership. A partnership may be dissolved in six ways : 1st. By the death, or incapacity, or bankruptcy, of the parties, or of either party ; 2d. By the consent and agreement of the parties, or some of them; 3d. By the expiration of the time limited in the articles of copartner- ship for its duration ; 4th. By the decree of a court of equity ; 5th. By the extinction of the subject-matter of the partnership, or the completion of the business ; 6th. By a war between the countries of which the partners are respectively subjects. § 317. First. A partnership will be entirely dissolved by the death of one of the partners, however numerous the partners 1 Story on Part. § 160, 161, 162; 3 Kent, Comm. leot. 43, p. 67, 68; Coll. on Part. B. 3, ch. 3, p. 368 to 371, 2d ed. ; Gow on Part. cli. 5, § 2, p. 248 to 251, 3d ed. ; Watson on Part. ch. 7, p. 384, 385, 2d ed. ; 2 Bell, Comm. B. 7, p. 640 to 643, 5tli ed. ; Parkin v. Carruthers, 3 Esp. 248 ; Carter v. Wlialley, 1 B. & Ad. 11 ; Newsome v. Coles, 2 Camp. 617 ; Godfrey a. Turnbull, 1 Esp. 371. ^ Story on Part. § 128, 129, 162 ; Gow on Part. ch. 5, § 2, p. 248 to 251, 3d ed. ; Coll. on Part. B. 3, ch. 3, § 3, p. 368 to 375, 2d ed. 3 Anderson v. Maltby, 2 Ves. Jr. 244; 9. C. 4 Bro. C. C. 423 ; Coll. on Part. B. 3, ch. 3, § 3, p. 400 to 404, 2d ed. ; Parker v. Ramsbottom, 3 B. & C. 257 ; Ex parte Peake, 1 Madd. 346 ; Gow on Part. ch. 6, § 2, p. 237, 238, 3d ed. ; Story on Part. § 163. * Buffalo City Bank v. Howard, 35 N. Y. 600 (1866). CHAP. IV.] PARTNERSHIP. — DISSOLUTION. 289 may be ; upon the ground that the personal qualifications and skill of each party constitute the consideration of the contract. The dissolution takes effect from the time when the surviving partners receive notice of the death of one of the members.-' So, also, if either party become incapacitated to act, the partner- ship is dissolved ; whether such incapacity be created by law, or exist in fact ; as if a person become palsied or idiotic ; or if he lose his capacity by reason of outlawry, or attainder of fel- ony, or treason ; or by subsequent marriage, if the partner be a feme sole ; or if war be declared between the countries of which the partners are subjects respectively.^ So, also, the absolute absconding of one partner would operate to dissolve a partnership, although a mere voluntary and temporary absence would not.^ Where one of the partners sells his share to a stranger, or to one of the firm, the change of parties would also dissolve the partnership,* unless there be a special provi- sion for such a circumstance in the articles of copartnership. Again, the bankruptcy or insolvency of either the whole firm, or of an individual member ; or a voluntary and hond fide assignment by one of the partners of all his interest in the stock, operates as a dissolution of the partnersliip, and tlie assignee or purchaser becomes tenant in common with the other partners.* This rule is founded upon the fact that a continua- 1 Story on Part. § 317, 318, 319 ; Nerot v. Burnand, 4 Russ. 250 ; 3 Kent, Comm. lect. 43, p. 56 ; Crawshay u. Collins, 15 Ves. 218 ; Gow on Part. oh. 6, § 1, p. 219, 220 ; VuUiamy v. Noble, 3 Meriv. 614 ; Gillespie ». Hamilton, 3 Madd. 251 ; Scholefield v. Eichelberger, 7 Peters, 586 ; Burwell v. Cawood, 2 How. 660 ; Knapp x>. McBride, 7 Ala. 19. 2 Griswold V. Waddington, 16 Johns. 438 ; Story on Part. § 303, 304, 315 ; Coll. on Part. B. 1, ch. 2, § 2, p. 71 ; Watson on Part. ch. 6, § 1, p. 216, 217, 3d ed. ; Nerot v. Burnand, 4 Russ. 247 ; Potts ». BeU, 8 T. R. 561 ; The Rapid, 8 Cranch, 166, 161; The Hoop, 1 Rob. Adm. 196; The Julia, 8 Cranch, 181. See Clemontson t>. Blessig, 11 Exoh. 135. 8 Whitman v. Leonard, 3 Pick. 179 ; Arnold u. Brown, 24 Pick. 94. See Ayer v. Ayer, 41 Vt. 346 (1868) ; Tenney v. New England Prot. Union, 37 Vt. 64 (1864). 4 Cochran «. Perry, 8 Watts & Serg. 262. 6 Marquand «. Pres. & Dir. of N. Y. Manuf. Co., 17 Johns. 526 ; Ketcham •0. Clark, 6 Johns. 148; 3 Kent, Comm. lect. 43, p. 69, 4th ed.; Rodriguez V. Heffeman, 5 Johns. Ch. 417 ; Nicoll «. Mumford, 4 Johns. Ch. 522, 525; Ex parte Barrow, 2 Rose, 252 ; Murray o. Bogert, 14 Johns. 818 ; Kingman VOL. I. 19 200 COXTRACTS OP PARTNERS. [CHAP. IT. tion of the partnership is at variance with the regulation of the bankrupt law, the whole of the bankrupt's property being vested in the assignee. The dissolution takes effect from the decree of bankruptcy under tlie commission, and reverts to the time when the act of bankruptcy was committed.^ Prom the time, therefore, of the act of bankruptcy, all the acts of the bank- rupt partner are void, and the solvent partners cannot carry on the jDartnership business.^ So, also, in the case of involuntary assignment, under judicial process, where a separate creditor of the partner levies an execution on the partnership goods and sells them, the partnership is dissolved pro tanto, to the extent of the right, title, and interest levied upon, and sold.^ § 318. Secondly. If there be no definite time agreed upon limiting the duration of the partnership, it may be dissolved at any moment by one partner ; for, in such case, it can only exist by the consent of all the parties. But if the partnership be formed for a definite time, it can only be dissolved, within that time, by the mutual agreement of all the parties.* § 319. Thirdly. If a time be fixed for the duration of the partnership, upon the expiration of such time it is dissolved. V. Spurr, 7 Pick. 235 ; Heath v. Sansom, 4 B. & Ad. 175 ; Tapley v. Butter- field, 1 Met. .515 ; Havens v. Hussey, 5 Paige, 30, 31 ; Hitchcock!). St. John, Hoflfm. 611 ; Anderson v. Tompkins, 1 Brock. 46C ; Pearpoint v. Graham, 4 Wa^h. C. C. 232 ; Story on Part. 307-309 ; Arnold v. Brown, 24 Pick. 94. ' Story on Part. § 314 ; Watson on Part. ch. 5, p. 302 to 313, 2d ed. ; Gow on Part. ch. 5, § 3, p. 298 ; Coll. on Part. B. 4, ch. 1, p. 583 to 590; Foxu. Hanbury, Cowp. 445 ; H.igue v. RoUeston, 4 Burr. 2174 ; Ex parte Smith, 5 Ves. 295 ; Harvey v. Crickett, 5 M. & S. 336 ; Button v. Morrison, 17 Ves. 194 ; Barker v. Goodair, 11 Ves. 78 ; Thomason v. Frere, 10 East, 418. ' Barker v. Goodair, 11 Ves. 78 ; Button v. Morrison, 17 Ves. 193 ; In re Wait, 1 Jac. & Walk. 605 ; Story on Part. § 340, 341. ' Moody V. Payne, 2 Johns. Ch. 548 ; Button v. Morrison, 17 Ves. 194; Allen V. Wells, 22 Pick. 450 ; Story on Part. § 261, 263, 311 ; Skipp v. Har- wood, 2 Swanst. 585, 586, note ; Nicoll v. Mumford, 4 Johns. Ch. 525 ; Rod- riguez V. HefFernan, 5 Johns. Ch. 417, 428. ^ Pearpoint v. Graham, 4 Wash. C. C. 234; Peacock v. Peacock, 16 Ves. 56 ; Miles v. Thomas, 9 Sim. 606 ; 1 Story on Eq. Jur. § 668 ; Bishop v. Breckles, Hoffm. 534; 3 Kent, Comm. lect. 43, p. 58; Griswold v. Wad- dington, 15 Johns. 57 ; Heath v. Sansom, 4 B. & Ad. 172 ; Story on Part. § 268, 209, 275, and note 3 ; Pothier, Pand. Lib. 17, tit. 2, u. 64 ; Doe v. Miles, 1 Stark. 181 ; 1 Montagu on Part. pt. 3, ch. 1, § 1, p. 90 (113) ; Sanderson v. Milton Stage Co., 18 Vt. 107. CHAP. IV.] PARTNERSHIP. — DISSOLUTION. 291 But if, at the expiration of the time, the partnership should still be continued, it will be considered as a mere partnership at will, and dissoluble at the instance of either party. ^ § 320. Fourthly. A partnership may be dissolved by a decree of a court of equity ; or it may be declared void ab initio. It may be dissolved on account of wilful fraud, misconduct, or even gross negligence on the part of any partner, whenever it is productive of injury to the partnership. Such misconduct must not, however, be trivial, or the court will only enjoin his duty upon the faulty partner. So, also, a dissolution will be granted where the undertaking of the partnership is impracti- cable, or where some one of the partners is disabled from con- tributing his skill and labor, when such disability obviously obstructs the interests of the partnership ; as if the person become so insane as to be disqualified from performing the duties of the partnership.^ Insanity does not, however, per se work a dissolution of the partnership, but only gives to the other parties the right of election, whether to continue it or not.^ And generally, indeed, where any thing occurs to obstruct or prejudice the interests of the partnership, it will afford a reasonable ground for a decree of dissolution. § 321. Lastly, a partnership may be dissolved by the comple- tion of the whole business for which it was formed ; * or by the ' Williams v. Jones, 5 B. & C. 108 ; Crawford v. Hamilton, 3 Madd. 254 Scholefield c. Eichelberger, 7 Peters, 694 ; VuUiamy v. Noble, 3 Meriv. 614 Gratz V. Bayard, 11 S. & R. 41 ; Coll. on Part. B. 1, ch. 2, § 2, p. 73, 74 Gow on Part. oh. 6, § 1, p. 219, 220. 8d ed. ; Story on Part. § 275, and note 3. ^ Wrexham r. Hudleston, cited in 1 Swanst. 514, note ; Sayer v. Bennet, 1 Cox, 107 ; Waters v. Taylor, 2 Ves. & Bea. 301 ; Jones v. Noy, 2 Myl. & K. 125; Milne v. Bartlet, 3 Jur. 358, April, 1839; Wray v. HutcHnson, 2 Myl. & K. 235; 1 Story, Eq. Jur. § 673; Goodman v. Whitcomb, 1 Jac. & Walk. 689 ; Chapman v. Beach, 1 Jac. & Walk. 694; Loscombe v. Russell, 4 Sim. 8 ; 3 Kent, Coram, lect. 43, p. 58, 60 ; Gratz V. Bayard, 11 S. & R. 41 ; 1 Montagu on Part. p. 3, ch. 1, p. 113; Gow on Part. ch. 3, § 1, p. 221, 3d ed. ; Littlewood v. Caldwell, 11 Price, 97; Story on Part. § 282-300 ; Gow on Part. ch. 5, § 1, p. 227, 3d ed. ; Pearce V. Piper, 17 Ves. 1 ; Beaumont v. Meredith, 3 Ves. & Bea. 180, 181 ;, Reeve V. Parkins, 2 Jac. & Walk. 390. 8 Story on Part. §294; Pothier, de Soci^t^, n. 141, 142, 148, 152; Coll. on Part. B. 2, ch. 3, § 3, p. 195. 4 Story on Part. § 280, 281 ; 3 Kent, Coram, lect. 43, p. 53 ; Griswold v. Waddington, 16 Johns. 438 ; Fellows v. Wyman, 33 N. H. 351. 292 CONTRACTS OF PARTNERS. [CHAP. IT. destruction of the subject matter of the partnership, — as if the partnership be in reference to a ship to be employed by them, and the ship be burnt or totally lost. § 322. Where a dissolution results from the retirement of one or more of the partners, or from the act of the parties, it becomes necessary for notice thereof to be given, to absolve the withdrawing members from responsibility to third persons ; for a partnership is, as to such persons, considered as continu- ing, until they are actually aware of its dissolution, or have had notice thereof. When, therefore, the dissolution results from the retirement of a known 'partner^ or from a change of known parties, the retiring partner will still continue to be liable, unless notice of his retirement be given.^ This rule stands upon the ground that persons dealing with a firm give credit to all the known parties, and the withdrawal of one may affect his confidence in the firm, and consequently all his deal- ings with it. Where, however, the reason fails, the rule fails ; and as no credit can be given to an unknown or dormant part- ner, -notice of his withdrawal is not necessary, except to those who know of his connection with the firm.^ § 323. Where a known or ostensible partner retires from the firm, actual notice of his withdrawal must be given to all who have had previous dealings with the firm ; ^ and a public notice not Ijrought home to their knowledge will not be suffi- cient.* And even though legal notice be given, if the retiring partner subsequently allow his name to appear in the firm, as a partner, he will be liable as such.^ Of course, if knowledge ' 3 Kent, Comm. leot. 43, p. 67, 68 ; Story on Part. § 160, 161 ; Gor- ham V. Thompson, Peake, 42; Waikinson d. Bank of Penn., 4 Whart. 482; Pitcher D. Barrows, 17 Pick. 361. ° Ibid. ; Evans v. Drummond, 4 Esp. 89 ; Newmarch v. Clay, 14 East, 239; Farrar v. Deflinne, 1 Car. & Kir. 580; Magill v. Merrie, 5 B. Mon. 168; Hunt v. Hall, 8 Ind. 215 (1856) ; Ellis v. Bronson, 40 111. 455 (1866). ' Pratt V. Page, 32 Vt. 13 (1859). See Holdane v. Butterworth, 5 Bosw. 1 ; Powles v. Page, 3 C. 1'. 16 ; Richardson v. Moies, 31 Mo. 430. ■* Watkinson ». Bank of Penn., 4 Whart. 482; Pitcher v. Barrows, 17 Pick. 361 ; Gorham v. Thompson, Peake, 42 ; Wardwell o. Haight, 2 Barb. 549; 3 Kent, Comm. lect. 43, p. 67, 68; Story on Part. § 100, 161 ; Howe V. Thayer, 17 Pick. 91; Vernon v. Manhattan Co., 17 Wend. 524; s. c. 22 Wend. 183 ; Little v. Clarke, 36 Penn. St. 114 (1859). ^ Wait V. Brewster, 31 Vt. 516 (1859), and cases cited. See Am. CHAP. IV.] PARTNERSHIP. — DISSOLUTION. 293 on their part be proved, notice is unnecessary. But in respect to persons who have not had previous dealings with the firm, public notice printed in a regular newspaper of the city where the partnership existed, when published in a fair and reason- able manner, is sufficient.^ If, however, an ostensible partner still allow his name to remain in the firm, he will continue to be responsible to all persons not knowing his separation there- from, in like manner as if he were actually a member.^ § 324. The dissolution of partnership destroys the joint powers and authorities of the partners to employ the partner- ship property or credit, otherwise than for the purpose of set- tling up the affairs of the partnership, and winding up the concern. From the moment of the dissolution, the partners become, as to all other business connected with the partner- ship, distinct persons, and tenants in common of the whole stock. One partner cannot create any new obligations or con- tracts, so as to bind the partnership ; nor can he transact any business on account thereof; nor indorse nor transfer partner- ship securities to third persons without the consent of all.* But as to third persons, who have no notice of the dissolution, the rule is different.* Linen Co. v. Wortendyke, 24 N. Y. 650 ; Williamson v. Pox, 38 Penn. St. 214; Clapp v. Upson. 12 Wis. 492; Waite v. Foster, 33 Me. 424. ' Shurlds V. Tilson, 2 McLean, 458 ; Leroy v. Johnson, 2 Peters, 198 ; Ketcham v. Clark, 6 Johns. 144, 148 ; Carter v. Whalley, 1 B. & Ad. 11 ; Parkin v. Carruthers, 3 Esp. 248; Newsome v. Coles, 2 Camp. 617; Dol- man V. Orchard, 2 C. & P. 104 ; Tombeckbee Bank v. Dumell, 5 Mason, 56. " Ibid. ; Clapp v. Rogers, 2 Kern. 283 ; Pope v. Risley, 23 Mo. 185 ; Lyon V. Johnson, 28 Conn. 1 ; Mech. Bank u. Livingston, 33 Barb. 458 ; Bank of the Commonwealth v. Mudgett, 45 Barb. 663 ; Story on Part. § 160. See Ellis v. Bronson, 40 111. 455 (1866). 8 Peacock v. Peacock, 16 Ves. 49, 57 ; Wilson v. Greenwood, 1 Swanst. 480 ; Crawshay v. Mauls, 1 Swanst. 506 ; Whitman v. Leonard, 3 Pick. 177 ; Kilgour V. Finlyson, 1 H. Bl. 156 ; Brisban v. Boyd, 4 Paige, 17 ; 3 Kent, Comm. lect. 43, p. 63, 64; Abel v. Sutton, 3 Esp. 108; Lansing v. Gaine, 2 Johns. 300; Sanford v. Micklcs, 4 Johns. 224; Foltz v. Pourie, 2 Desaus. 40 ; Fellows v. Wyman, 33 N. H. 351 ; Fisher v. Tucker, 1 M'Cord, Ch. 173; Poignand v. Livermore, 5 Martin (n. s.), 324; Tombeckbee Bank v. Dumell, 5 Mason, 56 ; Allison v. Davidson, 2 Dev. Eq. 79, 84 ; Palmer v. Dodge, 4 Ohio St. 21 (1854). 4 Hunt V. Hall, 8 Ind. 215 (1856) ; Ellis v. Bronson, 40 lU. 455 (1866). 294 CONTBACTS OP PARTNERS. [CHAP. IT, § 325. There are, however, some powers and authorities, will oh are absolutely indispensable, in order to wind up the affairs of the partnership after its dissolution ; and in relation to such object, the partnership still exists, in a restricted form. Hence, every partner may pay and collect debts due to the partnership, and apply the partnership funds to the payment of its debts; he may, also, adjust and settle unliquidated debts; or receive property of the partnership ; or give acquittances, and discliarges, and receipts, for acts done or moneys paid in behalf of the partnership ; and, generally, do any acts which are necessary to conclude the partnership.^ Yet if such author- ity have been delegated to one partner in particular, the others would have no authority so as to bind the partnership, except in dealing with persons not notified. § 326. Whether declarations or acknowledgments, made by a partner after the dissolution, in reference to duties, obliga- tions, or transactions of the partnership, before such dissolu- tion, will be binding upon the partners who have not assented to such declarations, is open to doubt. As, for instance, whether a partnership debt, barred by the statute of limita- tions, can be revived by the acknowledgment of one partner, after the dissolution of the partnership. The doctrine con- stantly maintained by the common-law courts of England is, that a debt can be so revived. But it has been recently par- tially overturned by an act of Parliament.' In America, the English doctrine obtains in some of the States, and in others it has been expressly overruled. The Supreme Court of the United States hold, that such an acknowledgment is not ' Fox V. Hanbury, Cowp. 445 ; Harvey v. Crickett, 5 M. & S. 336 ; Wood- bridge V. Swann, 4 B. & Ad. <133 ; Smith v. Stokes, 1 East, 363 ; 1 Moiitagii on Part. App. note 2, m, p. 136 ; 2 Bell, C'omui. B. 7, ch. 2, p. 643 : ib. p. 637 ; Combs v. Boswell, 1 Dana, 475 ; Murray v. Mumford, 6 Cow. 441 ; Murray v. Murray, 5 Johns. Ch. 78. ' See Story on P.irt. § 324, and note 1, where the authorities are elaborately discussed; Hogg v. Orgill, 34 Penn. St. 344 (ly.J'J), approving the conclu- sions arrived at in Story on Part. § 323 ; Stat, of 9 Geo. IV. ch. 14, 9th of May, 1828 ; Braithwaite v. Britain, 1 Keen, 206 ; Winter v. Innes, 4 Myl. & Cr. Ill ; 3 Kent, Comm. lect. 43, p. 49, 50, 51 ; Levy v. Cadet, 17 S. & Pb. 126 ; Walden v. Sherburne, 15 Johns. 409 ; Baker v. Stackpole, 9 Cow. 422 ; Belote v. Wynne, 7 Yerg. 534. CHAP. IV.] PARTNERSHIP. — DISSOLUTION. 295 binding, upon the ground that it is a new promise or contract, and not a revival or continuation of the old one. This doc- trine seems to have the greatest weight, and to stand upon the best principle.^ § 327. Ordinarily, however, a dissolution of copartnership ends the powers of the partners to act or contract for each other, except as to matters necessary for the closing up of the partnership affairs.^ None of the partners can therefore create any new obligations against the partnership, or sell or purchase goods on account, or subsequently trade with the partner- ship funds.^ So, also, one partner cannot, after the dissolu- tion of the firm, bind his copartners by the renewal of a note, even under a general authority, " to settle the business of tlie firm, and for that purpose use their name."* ■ Nor could he in such case negotiate it in the partnership name.® But where the individual note of a partner, made after the dissolution of the partnership, was transferred to the firm in payment of a debt, it was held, that such note, being payable to bearer, might be legally transferred to a third person by another part- 1 Whitcomb v. Whiting, Doug. 652 ; Boydelli). Drummond, 2 Camp. 157 ; Hyleing v. Hastings, 1 Ld. Raym. 389 ; Jackson v. Pairbank, 2 H. Bl. 340 ; Clarke v. Bradshaw, 8 Esp. 155 ; Brandram v. Wbarton, 1 B. & Al. 468 ; Wood V. Braddick, 1 Taunt. 104. But see 3 Kent, Coram, lect. 43, p. 51 ; Story on Part. § 323, and note 1. In Bell v. Morrison, 1 Peters, 351; Van Keuren v. Parmelee, 2 Comst. 523, reviewing the cases ; Sage v. Ensign, 2 Allen, 240 ; Myers v. Standart, 11 Ohio St. 29 ; Tappan v. Kimball, 10 Post. 136 ; Payne v. Slate, 89 Barb. 634 ; Keppert v. Colvin, 48 Penn. St. 248 ; Levy v. Cladot, 17 S. & R. 126 ; Searight v. Craighead, 1 Penn. 135 ; Yandes v. Lefavour, 2 Blackf. 371 ; Hopkins v. Banks, 7 Cow. 653 ; Baker V. Stackpole, 9 Cow. 420; Brewster v. Hardeman, Dudley (Ga.), 138, — it is held not to be binding. But see Roosevelt v. Mark, 6 Johns. Ch. 266 ; Hunt V. Bridgham, 2 Pick. 581 ; Shelton v. Cocke, 8 Munf. 191 ; Simpson v. Geddus, 2 Bay, 533. 2 Evans v. Evans, 9 Paige, 178 ; Story on Part. § 324-328. ' See Story on Part. § 322-329 ; National Banku. Norton, 1 Hill, 572 Crawshay v. Collins, 15 Ves. 218; Brisban v. Boyd, 4 Paige, 17 ; Geortner V. Trustees of Canajoharie, 2 Barb. 625 ; Humphries v. Chastain, 5 Ga. 166 French v. Backhouse, 5 Burr. 2727 ; Palmer v. Dodge, 4 Ohio St. 21. 4 National Bank v. Norton, 1 Hill, 572 ; Martin v. Kirk, 2 Humph. 529 McMicken v. Webb, 6 How. 292. « Parker v. Macomber, 18 Pick. 505 ; Dickerson v. Wheeler, 1 Humph. 51. See Dana i;. Conant, 30 Vt. 246 (1858). 296 CONTRACTS OF PARTNERS. [CHAP. IV. ner who was authorized to settle the partnership accounts.^ So, also, a promise by a partner to pay a note on which the firm are indorsers, no notice of dishonor having been given, is not binding on the other members of the firm.^ ' Parker u. Maoomber, 18 Pick. 505. ' Schonemaa u. Pegley, 7 Barr, 433. CHAP. V.J EXECUTOBS AND ADMINISTRATORS. 297 CHAPTER y. EXECU^^ORS AND ADMINISTRATORS. § 828. Another class of agents consists of executors and administrators ,1 who are tlie personal representatives and agents for the testator, the former being appointed by him in his will, and the latter being appointed by the court having jurisdiction over the probate of wills. The authority of an executor, being given by the will itself, becomes complete upon the death of the testator ;2 but the authority of the administrator being derived from the court, he cannot exercise his full powers until letters of administration have been granted.* Therefore, although an executor may bring an action before proving a will, the administrator must wait until letters of administration have issued.* For the same reason, a release, or assignment, or surrender, which would be valid if made by the executor before probate, would not ordinarily be binding if made by the administrator before he takes out letters of administration.^ But after an administrator has received letters, the same general rules apply to him as to an executor. § 329. There are several kinds of executors and adminis- trators, namely : First, the executor proper, who is appointed ' The author has been greatly indebted, in the preparation of this abstract of the law relating to executors and administrators, to Mr. Williams's admi- rable treatise on this subject, to which the student is referred. " Hensloe's Case, 9 Co. 38 a; Graysbrook v. Fox, Plowd. 281; WooUey V. Clark, 5 B. & Al. 744 ; Smith v. MiUes, 1 T. K. 480. See Johnson v. War- wick, 17 C. B. 516 (1856). ' Martin v. Fuller, Comb. 371 ; Wooldridge v. Bishop, 7 B. & C. 406 ; Phillips V. Hartley, 3 C. & P. 121. * Ibid. ; Humphreys v. Ingledon, 1 P. Wms. 753. 5 Middleton's Case, 5 Co. 28 b ; Whitehall v. Squire, 1 Salk. 295 ; The King V. Great Glenn, 5 B. & Ad. 188 ; 1 Williams on Executors, pt. 1, b. 5, ch. 1, § 2. 298 EXECUTORS AND ADMINISTRATORS. [CHAP. V. legally by will. Second, the executor de son tort, as he is called, who is any pei'son who, no person having been ap- pointed by the will, officiously assumes the office and the duties of an executor. ^ Any intermeddling with goods, which is not done out of mere charity or kindness, but which is an assumption of right over the goods to be administered upon, will be sufficient to render a person an executor de son tort. Thus, it has been held, that the taking a Bible or a bedstead ; or killing cattle ; or using, giving away, or selling goods ; or entering upon lands leased and taking possession ; or demand- ing, receiving, or receipting for the debts due to the deceased ; or paying debts clue from him, will constitute a person execu- tor de sun tort? One who collects money in a savings bank, 1 lelonging to the deceased, and pays it out for expenses of the last sickness and funeral, becomes liable as executor de son tort.^ But it does not per se constitute one an executor de son tort, to receive money from one who is executor de son tort, and apply part to one's own debt, and the remaining sum to the funeral expenses.* But the performance of offices of mere charity and kindness, such as locking up the goods for preser- vation, or directing the funeral and paying the expenses thereof, or making an inventory, or feeding his cattle, will not make a person executor de son tort.^ So, also, if a person have a colorable title to the goods with which he meddles, or if he act as agent for a rightful executor during the life of the latter, and not otherwise, he will not render himself executor de son tort.^ Payment by an executor de son tort may be good ' 1 Williams on Executors, pt. 1, B. 3, cb. 6, p. 148; Swinburne, pt. 4, § 23, p. 21. This term was formerly also applied to executors who were guilty of maladministration. Stokes v. Porter, Dyer, 167 a. 2 Robbins's Case, Noy. '^9 ; Stolies v. Porter, Dyer, 167 a, 160 h ; Read's Case, .0 Coke, 33 ; Padgct v. Priest, 2 T. U. 97 ; Godolph. pt. 2, ch. 8, § 1 ; Mayor of Norwich v. Johnson, 3 Lev. 35; Anon., Dyer, 56 a. ^ Bennett ji. Ives, 30 Conn. 321) (18G2). " Lysley v. Clarke, 14 Eng;. Law & Eq. 510 ; Paull v. Simpson, 9 Q. B. .065. See Alvord v. Marsh, 12 Allen, 603. ° 1 Williams on Executors, pt. 1, B. 3, ch. 5, p. 151 ; Godolph. pt. 2, ch. 8, 36 ; Dyer, 166 6 ; Fitz. Executor, pi. 24 ; Harrison v. Rowley, 4 Ves. 216 ; Bac. Abr. tit. Executors (B. 4). See Root v. Geiger, 97 Mass. 178. " Femings v. J.arrat, 1 Esp. 336 ; Com. Dig. Admr. (C. 2) ; Hall v. Elliot, Pcake, 87 ; Cottle v. Aldrich, 4 M. & S. 17o. But see Tomlin v. Beck, CHAr. V.J EXECUTORS AND ADMINISTRATOES. 299 against the rightful administrator, if the creditor had good cause to believe the person making the payment had authority to act as executor.! Whether the acts he did are of such a character as to render him an executor de son tort, is a question of law for the court ; but what acts he did is a question for a jury.2 § 330. Again, of administrators there are, 1st. The adminis- trator proper, who is the person appointed by the court, in the absence of any will, to administer the estate of the deceased. 2d. The administrator cum testamento minexo, who is appointed by the court in cases where a will has been made, by which either no executor is appointed, or where the executor refuses to accept the office, or is incapable of acting. 3d. The admin- istrator de bonis non, who is appointed in the place of the ex- ecutor, in case the latter dies intestate after having proved the will, but before he has administered the personal estate of the deceased. For in case of the death of an executor before he has administered the estate of the testator, his office is not transmitted to his executor, but is wholly determined.^ § 331. Any person may be made an executor or administra- tor, unless he or she be expressly forbidden.* The common rules as to incapacity of persons to contract on their own ac- count do not apply to their contract in behalf of other persons. Aliens, outlaws, feme coverts,^ infants of any age, and even in Turn. & Kuss. 438. A person who deals with the goods of a testator, as agent of the rightful executor, is not an executor de son tort, although the will has not been proved. Sykes v. Sykes, Law R. 6 C. P. 113 (1870), doubting Sharland v. Mildon, 5 Hare, 469. And see Cottle v. Aldrich, 4 M. & S. 175. 1 Thomson v. Harding, 2 El. & B. 630 ; 20 Eng. Law & Eq. 145. ' Padget V. Priest, 2 T. R. 99. = Isted V. Stanley, Dyer, 372 ; Hayton v. Wolfe, Cro. Jac. 614 ; Day v. Chatfeild, 1 Vern. 200 ; 1 Williams on Executors, pt. 1, B. 3, ch. 4, p. 146. ' 1 Williams on Executors, pt. 1, B. 3, ch. 1, p. 125. ' Payment to a feme covert executrix, made in good faith, at her request as such, is good, though the husband never consented to her aetin"- as execu- trix, and though subsequently to the payment he refused to allow her to act as such, probate being refused her on that ground ; if the party paying had no knowledge that the husband had not assented, though knowing that the wife was &feme covert. Pemberton v. Chapman, El. B. & E. 1056 (1858) ; 7 El. & B. 210. 800 EXECUTORS AND ADMINISTEATORS. [CHAP. V. ventre sa mere, and corporations, may be executors/ but idiots and lunatics cannot be executors, because of their mental in- capacity.^ POWERS OP EXECUTORS. § 332. We now propose to consider the powers, duties, and liabilities of executors and administrators. And in the first place, as to the powers. An executor or administrator (for their powers are the same after administration is granted to tlie latter) has the same property in the personal effects and cJioses in action of the deceased as the latter had while living. He may, therefore, enter the house of the heir or devisee, for the purpose of removing any goods belonging to the deceased, provided the house be open, or the key in the door so that he can unlock it ; but he cannot force his way into it by violence, nor can he even break open a chest containing papers, money, or goods belonging to the deceased ; and if he cannot obtain them without force, he must bring his action.^ So, also, he has an absolute power to dispose of the whole personal estate, including chattels specifically bequeathed,* so as to give a valid title thereto to every person dealing with him bond fide and without collusion, even against legatees and creditors.^ He may either mortgage, sell, lease, assign, or pledge all the assets, whether they be goods or choses in action.'^ But if the party ' Caroon's Case, Cro. Car. 8 ; Godolpb. pt. 2, ch. 9, § 1 ; Purefoy v. Eogers, 2 Saund. 388, note k; Wentw. Oflf. Ex. 375; 1 Williams on Executors, pt. 1, B. 3, ch. 1; Hix v. Harrison, 3 Bulst. 210; Killigrew v. Killigrew, 1 Vern. 184 ; 3 Bac. Abr. by Gwyllim, p. 5, tit. Executors (A.) 2 ; Toller on Executors, 80, 31. ' Codolph. pt. 2, ch. 6, § 2 ; Bao. Abr. Executors (A.) 6 ; Hills v. MiUs, 1 Salk. 36. ' Cobbett V. Clutton, 2 C. & P. 471 ; 2 Williams on Executors, pt. 3, B. 1, ch. l,p. 664. ^ Humble v. Bill, 2 Vern. 444 ; Ewer v. Corbet, 2 P. Wms. 149 ; Andrew V. Wiigley, 4 Bro. C. C. 137 ; Burting v. Stonard, 2 P. Wms. 150 ; 2 Williams on Executors, pt. 3, B. 1, ch. 1, p. 670; Drohan v. Drohan, 1 Ball & Beat. 185. » Whale V. Booth, 4 T. K. 625, n. (a) ; Nugent v. GiiFord, 1 Atk. 463. " Scott V. Tyler, 2 Dick. 725 ; Mead v. Orrery, 3 Atk. 239 ; M'Leod v. Drummond, 17 Ves. 1.32 ; Andi-ew v. Wrigley, 4 Bro. C. C. 138 ; Mead v. Byin,L;toii, 10 Vt. 116. CHAP, v.] POWERS OP EXECUTORS. 301 with wliom he deals fraudulently collude with him, — as if he know that the executor is violating his trust, and acts in fraud of parties beneficially interested, — the transaction will be wholly void for fraud.^ The mere fact that a personal creditor of an executor knowingly receives payment of, or security for, his debt out of the assets of the estate, will not of itself render the transaction void at law if there be no fraud ;2 but it will in equity, on the ground that the knowledge on the part of the creditor, that the executor is paying a private debt out of assets not personally belonging to him, is a notice of the misappli- cation, and necessarily involves the creditor in the wrong.^ Whenever there has been apparent collusion, however, not only creditors but also legatees may question the validity of the transaction.* § 333. Where the deceased is the lessee of property for a term of years, it becomes a question what are the rights of the executor in respect thereto. And the rule seems to be now settled, that he is at liberty to underlet or assign the lease, either for the whole term or for a portion thereof, unless the lease to the deceased contain an express condition, that neither he nor his executors nor administrators shall underlet or assign the lease on pain of forfeiture.^ For although a condition be contained therein, forbidding the lessee to underlet, but not expressly in terms forbidding his executor, the executor is not bound by the condition, but may underlet.^ So, also, the 1 Doe V. Fallows, 2 Cr. & J. 481 ; Scott v. Tyler, 2 Dick. 725 ; 1 Story, Eq. Jur. § 423, 424, and cases cited. 2 Whale V. Booth, 4 T. R. 625, n. (a) ; Farr v. Newman, 4 T. R. 642 ; Doe V. Fallows, 2 Cr. & J. 481. = 1 Story, Eq. Jur. § 422, 423 ; Hill v. Simpson, 7 Ves. 166 ; Bonney v. Kidgard, 1 Cox, 145 ; Scott v. Tyler, 2 Dick. 724 ; Mead v. Lord "Orrery, 3 Atk. 235 ; M'Leod v. Dnimmond, 17 Ves. 154; Wilson u. Moore, 1 Myl. & K. 126, 837. * 1 Story, Eq. Jur. § 424 ; Hill v. Simpson, 7 Ves. 152 ; M'Leod v. Drum- mond, 14 Ves. 359. * 2 Williams on Executors, pt. 3, B. 1, ch. 1, p. 677; Seers v. Hind, 1 Ves. Jr. 294; Anon., Dyer, 66 a, pi. 8; Phillips v. Everard, 5 Sim. 102; Roe B. Harrison, 2 T. R. 429. « Ibid. ; Roe v. Harrison, 2 T. R. 425 ; Doe v. Bevan, 3 M. & S. 357 ; Sir William More's Case, Cro. Eliz. 26; Thornhil o. King, Cro. Eliz. 757; Lloyd V. Crispe, 5 Taunt. 249. 802 EXECUTORS AND ADMINISTRATORS. [CHAP. V. death of the lessee does not work a forfeiture of a lease, made on condition that the lease shall not be assigned, but the tenure becomes vested in the executor.^ § 334. Again, the right of action which a testator or intes- tate maj' have upon any chosen in action survives to the ex- ecutor. He may, therefore, bring an action ordinarily upon any obligation, contract, debt, covenant or duty, whether it be under seal or not, or whether it be written or unwritten, which could have been brought by the person lie represents.^ But a right to bring an action for a tort to the person does not sur- vive to the executor.^ Nor can he have an action for a breach of contract, which solely affects the person of the testator or intestate, and does not operate to the injury of his personal estate^ Thus, an executor cannot have an action for a breach of promise of marriage, when no damage has resulted there- from to the estate ; nor for injuries affecting the life or health of the deceased.^ But he may have an action for all injuries affecting the personal estate, whatever the form of the action may be, whether it be trespass, or trover, or debt on a judg- ment, provided the subject-matter be damage to the estate, and not solely to the person.^ § 33.5. Again, where there is a breach of a contract made with the executor or administrator, he may sue thereupon, either in his own name, or in his representative character.' So, also, he may bring an action on a judgment recovered by ' Parry v. Harbert, Dyer, 45 h ; Windsor v. Burry, Dyer, 4.5, note. " 1 Williams on Executors, pt. 2, B. 3, oh. 1, § 1, p. 556; Wheatley v. Lane, 1 Saund. 216 a, note (1) ; Le Mason v. Dixon, W. Jones, 173, 174; Devon v. Pawlett, 11 Vin. Abr. 133, pi. 27 ; Crawford v. Wbittal, Doug. 4, n. ' Cora. Dip:. Administration (B. 13) ; Covenant (B. 1) ; Bao. Abr. Ex- ecutors (N.) ; Chamberlain v. Williamson, 2 M. & S. 408 ; 1 Williams on Exe.utors, pt. 2, B. 3, cli. 1, § 1, 560, 567. " Ibid. * Chamberlain v. Williamson, 2 M. & S. 408 ; 1 Williams on Executors, pt. 2, B. 3, ch. 1, § 1, p. 568. See Cutting v. Tower, 14 Gray, 183. 8 Ibid. ; Knights v. Quarles, 2 Br. & B. 102 ; Russel's Case, 5 Co. 27 a ; Rutland v. Rutland, Cro. Eliz. 377; Williams v. Cary, 4 Mod. 403; Cham- berlain V. Williamson. 2 M. & S. 408. ' Needham v. Croke, 1 Freem. 638 ; Thompson v. Stent, 1 Taunt. 322 ; Foxwist V. Tremaine, 2 Saund. 208 ; Petrie v. Hannay, 3 T. R. 659 ; Smith V. Barrow, 2 T. R. 477 ; Ord v. Fenwick, 3 East, 104; Webster v. Spen- cer, 3 B. & Al. 364; Partridge v. Court, 5 Price, 412 ; s. c. 7 Price, 591. CHAP. V.J POWERS OP EXECUTORS. 303 him as executor or administrator, either in his own name, or in his representative character.^ But if he talce a bond from a simple contract creditor, he cannot bring an action thereon in his representative character, though it be given to him as executor, because the bond, being an obligation of a higlier nature than the simple contract, extinguishes it.^ § 336. If there be several executors, they have a joint and entire interest in the personal estate of the deceased, with a right of survivorship.^ They are all regarded as one person, each having an interest in the whole estate, which is incapable of separation from the interest of the others, or of assignment independent of that of the others.* If, therefore, one executor release his part of a debt, he releases the whole debt.^ Each executor is the agent of all the rest, and is fully empowered to dispose of the whole estate by his single act.^ If, therefore, any contract be made with one executor, it is made with all, and may be sued by them jointlyj But where there are several executors, they must all join in bringing actions.^ Yet, if they do not sue jointly, the defendant can only take advantage thereof by pleading in abatement that there is an- other executor or administrator, but it is not sufficient for him to plead the general issue.^ But an executor cannot, by tak- ing possession of a chattel, real or personal, belonging to the » Crawford v. Whittal, Doug. 4, n. 1 ; Bonafous v. Walker, 2 T. R. 126. ^ Hosier v. Lord Arundell, 3 Bos. & Pul. 7 ; Partridge v. Court, 5 Price, 419. s Anon., Dyer, 23 b; Jacomb v. Harwood, 2 Ves. 267; Ex parte Higby, 19 Ves. 463 ; Owen v. Owen, 1 Atk. 495 ; 3 Bao. Abr. 30, tit. Ex- ecutors (D.) 1 ; 2 Williams on Executors, pt. 8, B. 1, ch. 2, p. 683 ; Flan- ders V. Clarke, 3 Atk. 509 ; s. c. 1 Ves. 9. * Ibid. ; Godolph. pt. 2, ch. 16, § 1. See Hannum v. Day, 105 Mass. 33 (1870). 5 Wllland V. Fenn, 2 Selw. N. P. 767 ; Simpson v. Gutteridge, 1 Madd. 616 ; Anon., Dyer, 23 6 ; Jacomb v. Harwood, 2 Ves. 267. ^ Ibid. ; Powell v. Evans, 5 Ves. 844. See George v. Baker, 3 Allen, 326, n. 7 Nation v. Tozer, 1 C. M. & R. 174. 3 Smith V. Smith, Yelv. 130 ; Brookes v. Stroud, 1 Salk. 3 ; Hensloe's Case, 9 Co. 37. See Rubber Co. v. Goodyear, 9 Wall. 788. ' Cabell V. Vaughan, 1 Saund. 291, note. S04 EXECUTORS AND ADMINISTRATORS. [CHAP. V. estate, create a new liability, and confer a charge on the other personally in his own individual character, which, without such act, would not have existed.^ Thus, if an executor take possession of a tenure belonging to the testator, and person- ally enjoy it, his coexecutor is not thereby charged as joint occupant.2 It was at one time asserted, that administrators had not the same powers with executors to bind each other by the separate act of one, but that they must act jointly, as their power was not given by the testator. ^ But this doctrine has been since overruled, and it has been held, that adminis- trators stand in this respect on the same footing with ex- ecutors.* § 337. It follows, from what has been said, that several executors or administrators cannot ordinarily sue a defendant, who has made a joint contract with one of the executors or administrators.^ Indeed, generally speaking, one executor or administrator cannot sue his coexecutor or administrator, nor can the survivors of several executors sue the executor of the deceased executor.^ Yet, if a debtor make his creditor one of his executors, and he neither prove the will nor act as execu- tor, he may be sued by the others.'^ § 338. An executor or administrator is not at common law entitled to any allowance or commission for his labor and ser- vices, in executing his trust, either at law or in equity ; ^ but he is entitled to be reimbursed for all reasonable expenses and I 2 Williams on Executors, pt. 3, B. 1, ch. 2, p. 685 ; Nation v. Tozer, 1 C. M. & K. 174. 2 Ibid. 8 By Lord Ilardwicke, in Hudson v. Hudson, 1 Atk. 460. 4 Willand v. Fenn, cited 2 Ves. 267 ; Selw. N. P. 767, note (8), 6th ed. ; Jacomb v. Harwood, 2 Ves. 267. 5 V. Adams, Younge, 117 ; Moffatt v. Van Jlillingen, 2 Bos. & Pul. 124, n. (c) ; Fitzgerald v. Boehm, 6 Moore, 332 ; Godolph. pt. 2, ch. 16, § 2. * Ibid. ; Went. Off. Executors, 75; 2 Williams on Executors, pt. 3, B. 1, ch. 2, p. 691 ; Edmonds v. Crenshaw, 14 Peters, 166. ' Dorchester v. ^\"ebb, W. Jones, 345 ; Kawlinson v. Shaw, 3 T. R. 657 ; Gleadow v. Atkin, 2 Cr. & J. 548. ' Schieffelin v. Stewart, 1 Johns. Ch. 633 ; Robinson v. Pett, 3 P. Wms. 261 ; Brocksopp v. Barnes, 6 Madd. 90. CHAP. V.J POWERS OP EXECUTORS. 305 outlays,! which do not arise from his default,^ and in most American States he is allowed, by statute, or custom, a certain per cent as commissions, or such other sum as the proper court may determine. DUTIES OP EXECUTORS AND ADMINISTRATORS. § 339. In the next place, as to the duties of executors and administrators. The first duty of the executor is to bury the deceased in a manner suitable to his condition and estate.^ He is not, however, entitled to expend an extravagant sum therefor, but is limited to such expenses as,' considering the ap- parent estate and rank of the deceased, seem reasonable and proper.* If he exceed these, and the estate prove to be insol- vent, he cannot recover therefor.* An executor is not, how- ever, limited to any specified sum, but each case must be regulated by its peculiar circumstances.^ § 340. In the next place, it is the duty of an executor to prove the will, or to take out letters of administration, to make an inventory of the personal estate, and to collect the effects belonging to the estate ; this he must do with diligence.^ If, however, he omit to make an inventory, this fact cannot be taken advantage of against him, after the lapse of an unrea- sonable length of time.® § 341. In the next place, it is the duty of the executor or administrator to pay the debts due from the estate of the de- ceased. Ordinarily the executor or administrator is only 1 Macnamara v. Jones, 2 Dick. 587; Potts v. Leighton, 15 Yes. 277; Hide V. Hayivood, 2 Atk. 126. 2 Pannel v. Fenn, Cro. Eliz. 348. 8 2 Black. Coram. 508 ; Shelly's Case, 1 Salk. 296. * Ibid. ; Edwards v. Edwards, 2 Cr. & Mees. 612 ; Hancock v. Podraore, 1 B. & Ad. 260 ; Stag v. Punter, 8 Atk. 119. s Stag V. Punter, 3 Atk. 119. 6 Edwards v. Edwards, 2 Cr. & Mees. 612 ; Reeves v. Ward, 2 Scott, 395 ; s. c. 2 Bing. N. C. 235 ; Stag v. Punter, 3 Atk. 119 ; Hancock v. Pod- more, 1 B. & Ad. 260. 7 2 Williams on Executors, pt. 3, B. 2, eh. 1, § 1, 2, 3; Hooker «. Ban- croft, 4 Pick. 50 ; Walker v. Hall, 1 Pick. 20 ; White v. Swain, 3 Pick. 865 ; Oglesby v. Howard, 43 Ala. 144. 8 Ritchie V. Rees, 1 Add. 144 ; Pitt v. Woodham, 1 Hagg. 247 ; Bowles V. Harvey, 4 Hagg. 241 ; Higgins v. Higgins, 4 Hagg. 242. VOL. I. 20 S06 EXECUTORS AND ADMINISTRATORS. [CHAP. V. bound to pay the debts out of the personal estate ; and it is in respect to the personal estate solely that we shall con- sider his duties. The first class of debts which he is bound to pay, is the funeral expenses, as far as they are reasonable and proper. 1 The second class is for the expenses of probate and taking out administration, and of any suit, which it may be necessary for him to bring,^ together with the fees, of the attorney and solicitor .^ The third class of debts consists of debts due to the state or crown by record or by specialty ; not including debts which are of any other kind.^ The fourth class embraces any debts to which priority is given by statute. The fifth class embraces all debts of record, and comprises, 1st. Judgments of a court of record against the deceased, which take precedence of other debts of record, whether they be prior in point of time or not.^ This class does not include judgments against the executor or administrator, which are only entitled to a priority over debts of an equal degree, upon which judgment has not been obtained.^ It does not matter, however, whether the judgment be upon a specialty or simple contract; it is in either case equally entitled to precedence.'^ 2d. Recognizances and statute securities, such as statutes merchant, statutes staple, and recognizances in the nature of statutes staple, are entitled to the next priority after judg- ments.* The sixth class embraces debts by specialty, under which are reckoned debts by bond, by covenant, and breaches of contracts under seal, and debts by mortgage, where there ' The King v. Wade, 5 Price, 621 ; 2 Black. Comm. 508. ^ 2 Black. Coram. 611 ; Loomes v. Stotlierd, 1 Sim. & Stu. 458 ; 2 Williams on Executors, pt. 3, B. 2, ch. 2, § 1. ' Turwin v. Gibson, 3 Atk. 720. 4 Littleton v. Hibbins, Cro. Eliz. 793 ; Went. Off. Ex. 261 ; Com. Dig. Administration (C. i!j ; 2 Williams on Executors, pt. 3, B. 2, ch. 2, § 1, p. 721 ; Erby v. Erby, 1 Salk. 80. SThe Sadlers' Case, i Co. 59 6, 60 a; Harrison's Case, 5 Co. 28 b; Went. Off. Ex. 271 ; Searle r. Lane, 2 Vern. 89. « Ashley v. P.)i-ock, 3 Atk. 308 ; 2 Williams on Executors, pt. 3, B. 2, ch. 2, § 2, p. 720 ; Seott v. Ramsay, 1 Binn. 221 ; Center v. Billinghurst, 1 Cow. 33 ; Leiper v. Levis, 15 S. & R. 108. ' Toller, 264 ; 2 Williams on Executors, pt. 3, B. 2, ch. 2, § 2, p. 731. * 2 Williams on Executors, pt. 3, B. 2, ch. 3, § 2, p. 732, 733. CHAP. T.J DUTIES OF EXECUTORS AND ADMINISTRATORS. 307 is bond or covenant for the payment of money.^ One specialty debt does not take precedence of another, merely because the former is overdue and the latter not due.^ But a specialty, which is contingent, as a bond of indemnity, is postponed to debts of an inferior degree,^ until breach of condition.* The seventh and last class of debts consists of those created by a contract not under seal ; and of these, debts to the state or king must be first paid,^ and next the wages of laborers and domestic servants.'' ' Gallon V. Hancock, 2 Atk. 435 ; Jones v. Powell, 1 Eq. Cas. Abr. 84 ; Lomas v. Wright, 2 Myl. & K. 769 ; Broome v. Monck, 10 Ves. 620 ; Ben- son V. Benson, 1 P. Wms. 130 ; Turner v. Wardle, 7 Sim. 80. " 1 Roll. Abr. 927, tit. Executors; 2 Williams on Executors, pt. 3, B. 2, ch. 2, § 2, p. 744, 746. ' Harrison's Case, 5 Co. 28 b ; Philips v. Echard, Cro. Jac. 8 ; Milles V. Sherfield, Cro. Jac. 102 ; Lancy v. Fairechild, 2 Vern. 101 ; Hawkins v. Day, Ambl. 160; Read v. Blunt 6 Sim. 567. ■* Cox V. Joseph, 6 T. R. 307 ; Musson v. May, 3 Ves. & B. 194. The executor or administrator is bound to pay a debt by bond before simple contract obligations, though the bond be not yet due. Woodshaw v. Fulmerstone, 1 Leon. 187 ; Lemun v. Fooke, 3 Lev. 57. But in Norman v. Baldry, 6 Sim. 622, Shadwell, V. C, is reported to have said that he had always understood the law to be, that an executor who had paid simple contract debts of his testator, a bond being in existence, but not then paya- ble, ought to be allowed those payments. The editor of the last (6th) English edition of Williams on Executors, thus comments on this position : "Probably the learned judge did not intend to apply the observation so generally as it is stated in the report, but to confine it to the case of a bond payable on a contingency ; with respect to which the law so understood is in accordance with all the authorities. The true rule, it is submitted, appears to be, that where it is uncertain whether any thing will ever become payable on the special security, it shall not stand-in theway of the payment of simple contract debts ; but where a sum will certainly become due, though on a future day, the special security is entitled to priority, like any other obliga- tion of its class. See ace. Atkinson v. Grey, 1 Sm. & G. 577, 681." In this case of Atkinson v. Grey, it was held that a covenant by a surety for payment of a debt at a future day is not a contingent, but an actually exist- ing debt, which must be provided for before simple contract creditors are paid. " I have not been able," said the Vice-Chancellor, " to follow the argument that, the covenant being one in the way of suretyship, a surety is not called upon to pay at all if the principal debtor should pay, and that this makes the debt contingent." ' Bac. Abr. Executors (L. 2). ' 2 Black. Comm. 611. In Massachusetts the priority of debts is regu- lated by statute. See Gen. Sts. ch. 99, § 1. 308 EXECUTORS AND ADMINISTRATORS. [CHAP. V. § 342. In respect to debts of the same class, and which are entitled to no legal or equitable precedence over each other, the executor or administrator is privileged to pay them in any order he may elect, and may give precedence to whichever he chooses.i He may, therefore, give a preference to his own deljt over all others of an equal degree.- But he cannot retain payment for the whole of his own debt out of equitable assets,^ but only out of legal, and in such case he is limited to his proportional part.* Again, if the testator appoint his debtor to be his executor, the debt becomes thereby extinguished ; for the executor could not maintain an action against himself for it.^ But the rule that when a creditor is appointed executor liy his debtor his right of action is suspended, applies only when the executor has received assets, and does not apply at all where the debt arises upon a negotiable instrument which has been legally transferred by the executor.^ § 343. In the next place, after payment of all the debts, it is the duty of the executor or administrator to pay the legacies. Before payment of the legacies, however, the testator is bound to pay all vested debts, and if he do not, and the estate is not sufficient to pay the debts, he renders himself personally liable therefor to the extent of his misappropriation. So, also, if there be only coyitingent debts against the estate, it would seem that the executor cannot pay legacies, without assuming con- tingent liabilities, and, therefore, he would not be bound to pay over the legacies until all contingent liability on the debt was gone, unless upon the legatee's giving him ample indemnity therefor, as by a security to refund the legacy, if debts should ' Lyttleton v. Cross, 3 B. & C. 322 ; Lepard v. Vernon, 2 Ves. & B. 53 ; Waring v. Danvers, 1 P. AVms. 295. •* Woodward v. Lord Darcy, Plowd. 184 ; Dyer, 2 a ; Warner v. Wains- ford, Hob. 127. ' See Lowe v. Poskett, 16 C. B. 500 ; 32 Eng. Law & Eq. 427. ^ Anon., 2 Cas. Ch. 54; Hopton v. Dryden, Prec. Ch. 181. 6 Co. Litt. 204 h ; Went. Off. Executors, ch. 2, p. 73 ; Fryer v. Gild- ridge, Hob. 10; Dorchester v. Webb, Cro. Car. 373; Wankford v. Wank- ford, 1 Salk. 299 ; Errington v. Evans, 2 Dick. 457 ; Cheetham v. Ward, 1 Bos. & Pul. 630. " Lowe V. Peskett, 16 C. B. 500 ; 32 Eng. Law & Eq. 427. CHAP. V.J DUTIES OP EXECUTORS AND ADMINISTRATORS. 309 afterwards appear.^ Again, if the executor pay over legacies in ignorance of the existence of any debts outstanding against tlae estate, he cannot ordinarily plead in defence to an action for such debts, plene administravit, for he is bound to pay debts before legacies.^ He may, however, in such a case, compel the legatees by will to refund.^ And if a great lapse of time have taken place, and the creditors have been guilty of great laches, it would seem that such a plea would be good.* § 344. Where a legacy is given generally, without specifying the time of payment, the executor is not bound to pay it over until the lapse of a year from the testator's death ; and this is allowed him for the sake of convenience, and to enable him to see whether the assets are sufficient without it, to pay the debts.^ The legacy, however, vests in the legatee on the death of the testator, and if the legatee die before recovering it, his personal representative will be entitled to it.'' § 345. If the assets be not sufficient to pay all the legacies, the specific legacies take precedence of the general legacies, and in case there are more than enough assets to pay the spe- cific legacies, but not enough to pay the general legacies, the latter alone are abated, so as to give to each general legatee his proportion of the overplus.'^ A specific legacy is a legacy of some identified thing, distinguished from all others of the same kind ; as a legacy of the " diamond ring presented to me by A." 8 A general legacy is a legacy of something indetermi- ' Hawkins v. Day, Ambl. 160; 8 Meriv. 554; Nector v. Gennet, Cro. Eliz. 466 ; Simmons v. Bolland, 3 Meriv. 549 ; Vernon v. Egmont, 1 Bligh (N. s.), 571. ^ Davis V. Blackwell, 9 Bing. 6 ; s. c. 2 Moore & Scott, 8 ; Norman v. Baldry, 6 Sim. 621 ; Richards v. Browne, 3 Bing. N. C. 493. 3 Nelthrop v. Hill, 1 Oas. Ch. 136 ; Davis v. Davis, 8 Vin. Abr. 423, tit Devise (Q. d) ; 1 Roper on Legacies, 398, 3d ed. ■* Ibid. ; Chelsea Water Works v. Cowper, 1 Esp. 275. * Garthshore v. Chalie, 10 Ves. 13 ; 2 Williams on Executors, pt. 3, B. 8, ch. 2, § 5, p. 880; Forbes v. Ross, 2 Cox, 115. " Ibid. ; Collins v. Macpherson, 2 Sim. 87. ' Clifton V. Burt, 1 P. Wms. 679; 2 Black. Comm. 513; Toller, 839 ; 2 Williams on Executors, pt. 3, B. 3, ch. 4, § 2, p. 972. 8 2 Williams on Executors, pt. 3, B. 8, ch. 2, § 8, p. 838 ; 2 Fonbl. Eq. B. 4, ch. 2, § 5, note (o) ; Purse v. Snaplin, 1 Atk. 416. 310 EXECUTORS AND ADMINISTRATOES. [CHiP. T. nate or not specific, as a legacy of a " diamond ring," or of " £1000," -which is satisfied by a delivery of any diamond ring, or £1000 in any form of money or stock.^ An executor has no power to give himself a preference in respect to the pa}^- ment of a legacy to himself, as he has in the payment of a debt.2 § 346. The general rule in respect to general legacies is, that no preference shall be given to one over another, but that, in case of a deficiency of assets, they shall all abate proportion- ally.2 But this rule only applies to legacies to volunteers, without valuable consideration ; and in cases where there is any valuable consideration to support a legacy, as if it be in consideration of a relinquishment of dower, or of any legal claim, existing at the time of the testator's death, it will take precedence of other general legacies.* So, also, if the manifest intent of the testator be to give a priority to any particular legacy, his intention must be carried into effect.^ § 347. Where a legacy is left to an infant, the executor can- not, without the sanction of a court of equity, pay it to him, or to any one on his account, but he must keep it until the infant become of age, and then pay it over to him personally.^ And if the executor pay it over to the father, or any one else, he will be responsible.^ Again, an executor cannot pay to the infant any part of the capital of the legacy for any purpose except for mere necessaries.^ But in respect to the interest, ■ Ibid. 2 Toller, 387 ; 2 Williams on Executors, pt. 3, B. 3, ch. 4, § 2, p. 972. ' Shirt V. Westby, 16 Ves. 396; Coppin v. Coppin, 2 P. Wms. 296; Fretwell v. Stacy, 2 Vern. 434; Apreece v. Apreece, 1 Ves. & B. 864; Blower V. Morret, 2 Ves. 420. * Heath v. Dendy, 1 Russ. 543 ; Davies v. Bush, Younge, 1341 ; Buvridge V. Bradyl, 1 P. Wms. 127 ; Blower v. ^Morret, 2 A'es. 420 ; Davenhill v. Fletcher, Ambler, 244. ' Lewiii V. Lewin, 2 Ves. 415 ; Marsh v. Evans, 1 P. Wms. 668 ; Attor- 7iey-GeneraI v. Robins, 2 P. Wms. 23. « Dagley v. Tolferry, 1 P. Wms. 285 ; Cooper v. Thornton, 8 Bro. C. C. 97 ; Rotheram v. Fanshaw, 3 Atk. 629 ; Philips v. Paj^et, 2 Atk. 80. ' Ibid. ; See Miles v. Boyden, 3 Pick. 213. « Davies v. Austen, 3 Bro. C. C. 178 ; Lee v. Brown, 4 Ves. 362 ; Walker V. Wetherell, 6 Ves. 473. CHAP, v.] DUTIES OP EXECUTOES AND ADMINISTRATORS. 311 he may pay over whatever a court of equity would have ordered him to pay over ; i and a court of equity will always order that the interest be paid over to the infant for his maintenance, in case the bequest is vested so that he could take it immediately, if he were of age, provided his parents are unable to maintain , him, and not otherwise.^ If the legacy be contingent, a coui-t of equity will not order the executor to pay the interest to the infant, unless perhaps by consent of the legatees over.^ § 348. Where a legacy is left to a married woman, it should bo paid over to her husband, whether she live with him or be separated by divorce.* But if the wife be separated from her husband, without criminality on her part, a court of equity would interfere, and oblige the husband to make a settlement on her, as the condition of the payment of the legacy to him.* But although the husband should refuse to make a settlement on the wife, it seems that he would be entitled to receive the interest on the legacy.^ § 349. Where the legatee is abroad, and has been unheard from for such a number of years as to create a presumption of his death, the legacy may perhaps be paid to the succeeding party entitled to it,^ but it is safer for the executor to take a bond of indemnity. § 350. Whether, if a will should contain a direction or power to raise money out of the rents and profits of the estate, the executor would be authorized to sell or mortgage the estate in case the annual rents and profits would not satisfy the pur- poses of the trust, without entailing serious delays and incon- ' Ibid. ; 1 Roper on Leg. 768, 3d ed. ; Lee v. Brown, 4 Ves. 362. ^ Greenwell v. Greenwell, 5 Ves. 194 ; Collis v. Blackburn, 9 Ves. 470 ; Stretch V. Watkins, 1 Madd. 253 ; Andrews v. Partington, 3 Bro. C. C. 60, 401 ; Hoste v. Pratt, 3 Ves. 733 ; Maberly v. Turton, 14 Ves. 499 ; Hawkins V. Watts, 7 Sim. 199. ^ Lomax V. Lomax. 11 Ves. 48 ; Errington v. Chapman, 12 Ves. 21 ; Cavendish «. Mercer, 5 Ves. 195, n. ; Evans v. Massey, 1 Y. & J. 196. * Palmer v. Trevor, 1 Vern. 261 ; Stephens v. Totty, Cro. Eliz. 908 ; Green v. Otte, 1 Sim. & Stu. 250 ; Carr v. Eastabrooke, 4 Ves. 146. 5 Brown v. Elton, 3 P. Wms. 202 ; Lady Elibank v. Montolieu, 5 Ves. 737; March v. Head, 3 Atk. 720; 1 Roper on Leg. 773, 3d ed. ' SleechD. Thorington, 2 Ves. 562. ' Dixon V. Dixon, 3 Bro. C. C. 610 ; Mainwaring v. Baxter, 5 Ves. 458. 312 EXECUTORS AND ADMINISTRATORS. [CHAP. V. veniences, is a question upon which entirely opposite opinions have been held. By the older cases, the executor was restrained to the application of the annual rents and profits/ but the later cases admit a power to sell or mortgage, where it is required to carry out the manifest objects of the trust.^ If, therefore, a testator should direct a gross sum to be paid out of the rents and profits of an estate at a fixed time, or for a definite pur- pose, which must be accomplished within a certain time, and the annual rents and profits would be inadequate to pay such sum within the intended time, a power to sell or mortgage would be allowed in equity.^ INTEREST ON LEGACIES. § 351. Where a specific legacy is given, it is appropriated to tlie legatee from the death of the testator, and any increase which may accrue to it in the intermediate time between the death of the testator and the delivery of the thing, belongs to the legatee.* Nor does it matter in this respect whether the delivery be postponed by the testator to a certain specified ' Ivy V. Gilbert, 2 P. Wms. 13, 19 ; TrafFord v. Ashton, 1 P. Wms. 418, and note by Ur. Cox; Evelyn v. Evelyn, 2 P. Wms. 666-670; MiUs v. Banks, 3 P. Wms. 1 ; Okeden v. Okeden, 1 Atk. 650, and note by Mr. Saunders. - Green v. Belchior, 1 Atk. 505 ; Baines v. Dixon, 1 Ves. 42 ; Countess of Shrewsbury v. Earl of Shrewsbury, 1 Ves. Jr. 233 ; s. c. 3 Bro. C. C. 120 ; Allan V. Backhouse, 2 Ves. & B. 65 ; Bootle v. Blundell, 1 Meriv. 193-233. ^ In Allan v. Backhouse, 2 Ves. & B. 75, Sir Thomas Plumer, speaking on this question, says of the phrase, " rents and profits : " " Whatever might have been the interpretation of these words, had the case been new, whatever doubt might have arisen upon them, as denoting annual or permanent profits, it is now too late to speculate ; this court having, by a technical, artificial, but liberal construction, in a, series of authorities, admitting it not to be the natural meaning, extended those words, when applied to the object of raising a gross sum at a fixed time, when it must be raised and paid without delay, to a power to raise by sale or mortgage, unless restrained by other words." See also 2 Story, Eq. .Jur. § 10G4 a, where this construction is said by j\Ir. Justice Story to be " neither artificial or technical, although it is certainly a liberal construction of the words of the testator, in order to accomplish his intent." " Pearson v. Pearson, 1 Sch. & Lef. 10 ; Laundy v. Williams, 2 P. Wms. 481 ; Sleech v. Thorington, 2 Ves. 563. See Cooper v. Scott, 62 Penn. St. 139. CHAP. V.J DUTIES OF EXECUTORS AND ADMINISTRATORS. 813 time.^ Again, interest is allowed on general legacies after the lapse of a year from the testator's death, if no time of payment be appointed ; but all interest which accrues within the year belongs to the residuary legatee.^ Nor does it matter that pay- ment of legacies be impracticable at the end of the year ; they nevertheless will carry interest, which the executor is bound to pay, if there be sufficient assets to enable him to do so.^ There are two exceptions to this general rule, however, which obtain whenever the legacy is given in payment of a debt,* or is bequeathed to an infant child, in both of which cases interest is allowed from the time of the testator's death. ^ § 352. When a time is appointed at which the legacy shall be paid, it must be paid at that time, and interest begins to run thereafter, and not before.^ There is also an exception to this rule in favor of legacies to infant children, where there is no other provision for their maintenance," and to persons to whom the testator stands in loco parentis, whenever there is a mani- fest intention on his part that they shall receive maintenance out of the legacy.^ Where a legacy is given payable at a cer- tain future time " with interest," interest will only begin to run after the lapse of a year from the testator's death.^ LIABILITIES OP EXECUTORS AND ADMINISTRATORS. § 353. In the first place, as to the liabilities of an executor or administrator, for the contracts and acts of the deceased. ' Barrington v. Tristram, 6 Ves. 345. See Merritt v. Richardson, 14 Allen. 239. ' Pearson v. Pearson, 1 Sch. & Lef. 10; Wood v. Peuoyre, 13 Ves. 334. ' Ibid. ; Freeman v. Simpson, 6 Sim. 75. ' Clark V. Sewell, 3 Atk. 99 ; Shirt v. Westby, 16 Ves. 898. * Beckford v. Tobin, 1 Ves. 310 ; Crickett v. Dolby, 3 Ves. 13 ; Acherley V. Wheeler, 1 P. Wms. 783 ; Newman v. Bateson, 3 Swanst. 689. = Heath v. Perry, 3 Atk. 101 ; Tyrrell v. Tyrrell, 4 Ves. 1 ; Crickett v. Dolby, 3 Ves. 10. See Pike v. Walley, 15 Gray, 345. ' Wynch V. Wynch, 1 Cox, 433 ; Harvey v. Harvey, 2 P. Wms. 21 ; Acherley v. Wheeler, 1 P. Wms. 783 ; Incledon v. Northcote, 8 Atk. 430 ; Chambers v. Goldwin, 11 Ves. 2; M'Dermott «. Kealy, 3 Russ. 264, note; Mills V. Robarts, 1 Russ. & Myl. 555. ^ Ibid. ; Leslie v. Leslie, Lloyd & G. t. Sugd. 1 ; Boddy v. Dawes, 1 Keen, 862. ' Knight V. Knight, 2 Sim. «fe Stu. 490. See Fish's Estate, 1 Tuck. 122. 314 EXECUTORS AND ADMINISTRATORS. [CHAP. V. And in tliis respect the general rule is that the executor or administrator is liable in a suit upon any matter of contract which could have been enforced against his testator or intes- tate ; 1 as the implied promise of an innkeeper to keep safely the goods of his guest.^ And this rule ordinarily obtains, whether the executor or administrator be named in the con- tract or not,3 and whether the contract be to pay a debt which is uncertain and sounds in damages.* Yet if the contract be personal in its nature, and the performance by the deceased himself be the essence thereof, his executors will not be liable, unless the contract have been broken by the deceased during his lifetime.^ Thus, if an author contract to write a book, and before completing it, die, his executors will be discharged therefrom.^ § 364. Again, where the deceased has contracted jointly with others, the contract becomes chargeable only upon the survivors among the contractors, and not upon the executor of the deceased ; unless he be the last of several joint contractors, in which case the executor of him who last dies is solely chargeable.^ But if the contract be joint and several, or sev- eral, the executor is liable if he be sued in a separate action, but he cannot be sued at law jointly with the other contractors.^ ' Sellers V. Lawrence, Willes, 421 ; 2 'Williams on Executors, pt. 4, B. 2, ch. 1, § 1, p. 1224; Bac. Abr. Executors (P.) 1 ; Com. Dig. Administra- tion (B. 14); Mellun v. Baldwin, 4 Mass. 480. = Morgan v. Ravey, 6 H. & N. 265 (1861). ^ Went. Off. ExcTutor, ch. 11, p. 239, 243 ; Hyde v. Skinner, 2 P. Wms. 197; Toller on Executors, 463; Co. Litt. 209 a; Quick v. Ludborrow, 3 Bulst. 30. '^ Bac. Abr. Executors (P.) 2 ; Berisford v. Woodroff, Cro. Jac. 404 ; Clark u. Thomson, Cro. Jac. 671 ; Wilson v. Tucker, 3 Stark. 154 ; Quick V. Ludborrow, 3 Bulst. 30. * Hyde v. The Dean of Windsor, Cro. Eliz. 553 ; Marshall v. Broadhurst, 1 Tyrw. 349 ; Cooke v. Colcraft, 2 W. Bl. 856 ; Baxter v. Burfield, 2 Str. 1266 ; Stebbins v. Palmer, 1 Pick. 71 ; Harnson v. Conlan, 10 Allen, 86. » Marshall v. Broadhurst, 1 Tyrw. 349 ; s. c. 1 Cr. & J. 403. ' Godson V. Good, 2 Marsh. 300; s. c. 6 Taunt. 594; Hamond v. Jelhro, 2 Brownl. 99 ; Osborne v. Crosbern, 1 Sid. 238 ; Towers v. Moor, 2 Vern. 99 ; Calder v. Rutherford, 3 Br. & B. 302 ; Foster v. Hooper, 2 Mass. 572. » May V. Woodward, 1 Freem. 248 ; Hall v. Huffam, 2 Lev. 228. CHAP. V.J LIABILITIES OF EXECUTORS AND ADMINISTEATOES. 315 In case of a partnership debt, which is a joint contract, how- ever, executors may be sued in equity, though not in law,i and the weight of opinion seems to be that a copartnership debt is also several, so as to give to a creditor a right to proceed against the executor, although the surviving partner be solv- ent;^ but this is doubtful. Yet if the surviving partner be insolvent, the executor undoubtedly would be liable.^ § 355. Where a testator leaves an unexpired term of years, it vests in the executor, and he cannot ordinarily free himself therefrom without surrendering entirely his office.^ Yet he may do so, if the value of the premises is less than the rent, and there is a deficiency of assets, but while there are assets, he cannot renounce the term, but must hold it until they fail.^ If, however, the executor or administz-ator do not enter upon the demise, although he is bound to pay the rent as long as he has assets, he may plead plene administravit to an action there- for, if he have exhausted the assets, for he is liable as executor or administrator only in the detinet ; ^ but if he enter upon the demised premises, he becomes liable as assignee of the term, and may be sued by the lessor, either personally or in his rep- resentative character, and in such case he cannot plead plene administravit, even although he be sued as executor, and the judgment is de bonis propriis!' Yet if the land prove to be of less value than the rent, he may plead such fact specially, and ' Vulliamy v. Noble, 3 Meriv. 619. " Devaynes v. Noble, 1 Meriv. 630; s. o. 2 Russ. & Myl. 495; Sleecli'a Case, 1 Meriv. 539 ; Wilkinson v. Henderson, 1 Myl. & K. 582 ; 2 Wil- liams on Executors, pt. 4, B. 2, ch. 1, § 2, p. 1240. ^ Ibid. * Billinghurst v. Speerman, 1 Salk. 297 ; Bolton v. Cauham, PoUex. 125 ; s. c. 1 Vent. 271 ; Com. Dig. Administration (B. 10). ' Went. Oflf. Ex. u. 11, p. 244, c. 12, p. 290 ; Wilkinson v. Cawood, 3 Anstr. 909; Reid v. Lord Tenterden, 4 Tyrw. 118; 2 Williams on Execu- tors, pt. 4, B. 2, ch. 1, § 2, p. 1249. « Howse V. Webster, Yelv. 103 ; Helier v. Casebert, 1 Lev. 127. But query, whether this distinction between entry and non-entry in favor of the latter now obtains. See Williams v. Bosanquet, 1 Br. & B. 238 ; Nation c. Tozer, 1 C. M. & R. 176. ' Boulton r. Canon, 1 Ereem. 337 ; Jevens v. Harridge, 1 Saund. 1, note 1 ; Hope V. Bague, 3 Ji'ast, 2 , Plelier v. Casebert, 1 Lev. 127 ; Lyddall V. Dunlapp, 1 Wils. 4; BaililFs of Ipswich v. Martin, Cro. Jac. 411. 316 EXECUTORS AND AD3IINISTKAT0ES. [CHAP. V. pray judgment whether he shall be chargeable in any other capacity than that of executor.^ He will, nevertheless, be chargeable with so much rent as the premises are fairly worth.^ For all rent which has accrued during the life of the testator, the executor or administrator is only liable in his representa- tive capacity, and not personally, and the judgment is de bonis testatoris? § 356. Upon the death of the husband, no debts contracted by the wife while she was single, and remaining due at his death, survive against the executor and administrator;^ and if the wife die before the husband, he is not liable on her debts contracted while she was single, beyond her assets in his hands, as her executor or administrator.^ But he is not liable on account of any fortune which he may have received with her.6 § 357. An executor or administrator is never liable on the contracts of his testator or intestate beyond the assets that come to his hands, and any personal liability which he may incur results from his own contract, as we shall see. § 358. Actions founded in tort, on which the deceased would have been personally liable, if living, do not, by the common law, survive against the executor or administrator.^ Yet, al- though the matter be founded in tort, if it be of such a nature that it can be treated as a breach of implied contract, the executor will be liable in an action on the contract.^ Thus, although trespass will not lie against tlie executor for a wrong- ' Billinghurst v. Speermau, 1 Salk. 297 ; Buckley v. Pirk, 1 Salk. 317. ^ Ibid. ^ 1 Roll. Abr. 603 (S.), pi. 9; Fruen v. Porter, 1 Sid. 379; 2 Williams on E.xecutors, pt. 4, B. 2, ch. 1, § 2, p. 1246; Nation v. Tozer, 1 C. M. & K. 176. " 2 Williams on Executors, pt. 4, B. 2, cla. 1, § 2, p. 1255; Woodman V. Chapman, 1 Camp. 189. ^ Ibid. ; Heard v. Stanford, Cas. t. Talb. 173 ; s. c. 3 P. Wms. 409. « Went. Off. E.X. 3C9 (14th ed.). 'Wheatky [•. Lane, 1 Saund. 216, n. 1; Went. Off. Ex. 255; Anon., Dyer, L'71 a; Hambly v. Trott, 1 Cowp. 375; Perkinson v. Gilford, Cro. Car. 540; Pitts v. Hale, 3 Mass. 321; Mellen v. Baldwin, 4 Mass. 480; Wilbur V. Gilmore, 21 Pick. 250. 8 Hambly v. Trott, 1 Cowp. 375 ; Powell v. Layton, 2 Bos. & Pul. N.R. 870; Le Mason v. Dixon, W. Jones, 173. CHAP, v.] LIABILITIES OP EXEOUTOES AND ADMINISTRATORS. 317 ful taking and detention of a horse by the deceased, yet the executor may be sued for the use and hire of the horse, treat>- ing the whole matter as one of implied contract.^ Again, actions on torts survive against the executor by statute, when- ever the personal property of the deceased is thereby injured.^ § 359. In the next place, as to the liability of an executor or administrator upon his own contracts and acts. An execu- tor or administrator is never liable on the contracts of the tes- tator, as we have seen, beyond the assets which come to his hands. He may, however, after the death of the testator or intestate, make contracts upon which he will render himself personally responsible, and these will now form a subject for consideration.^ § 360. If an executor make a contract, or promise as executor, and not on a new consideration, but on a consideration moving to the testator, he does not thereby render himself personally liable, but only liable in the character of executor, and judg- ment will only be given against him de bonis testatoris ; and on a count alleging a promise " as executor^'' the executor will be no further charged than on a promise by the testator.* § 361. But if the executor make a promise on a new con- sideration, not already existing, but moving to himself, he will be personally liable thereupon.^ Thus, if he promise to pay a debt of the testator's, in consideration of forbearance of the creditor to institute a suit, he will render himself personally liable.^ So, also, if the executor promise to pay a debt of the ' Hambly v. Trott, 1 Cowp. 375. ° Stat. 4 Edw. III. ch. 7 ; Jenney v. Jenney, 14 Mass. 231 ; Badlam v. Tucker, 1 Pick. 389 ; Holmes v. Moore, 5 Pick. 257. ^ Executors, &c., who employ an attorney are personally liable for his services. Mygatt 13. Wilcox, 45 N. Y. 306 (1871) ; Bowman v. Tallman, 2 Kob. (N. Y.) 385. ■> Dowse V. Coxe, 3 Bing. 20 ; Powell «. Graham, 7 Taunt. 581 ; Ashby v. Ashby, 7 B. & C. 444; Segar v. Atkinson, 1 H. Bl. 102. ' Hamilton v. Incledon, 4 Bro. P. C. 4 ; Childs v. Monins, 5 Moore, 282 ; s. o. 2 Br. & B. 460; Beech w. Kennegal, 1 Ves. 126. ^ Goring 0. Goring, Yelv. 11 (Amer. ed.) ; Johnson u. Whitchcott, 1 Roll. Abr. 24, tit. Action sur Case (V.) pi. 33 ; Chambers v. Lever- sage, Cro. Eliz. 644; Davis v>. Reyner, 2 Lev. 3; 1 Ventr. 120; Deeks v. Strutt, 5 T. R. 690; Scott v. Stevens, 1 Sid. 89; Bradly «. Heath, 3 Sim. 543 ; Keech v. Kennegal, 1 Ves. 126. 318 EXECUTORS AND ADMINISTRATORS. [CHAP. V. testator at & future day, he makes the debt his own.^ So, also, money lent to the executor is a sufficient consideration to make him individually liable.^ But the mere possession of assets does not seem to be a sufficient consideration.^ And a fortiori a promise by an administrator or executor to pay the debt of the testator or intestate where there were no assets would be nudum pactum.^ § 362. It is enacted by the statute of frauds that " no action shall be brought whereby to charge an executor or administra- tor, upon any special promise, to answer damages out of his own estate, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in ivritmg, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized." ^ The memorandum required by this section of the statute of frauds should set forth distinctly both the promise and the consideration, either in express terms, or by reference to some- thing extrinsic, by which it may be rendered certain. It is not, however, necessary that the consideration should be stated expressly, provided there manifestly appear to be a sufficient consideration.^ "Whether or not it was performed is a matter of evidence.' ' Goring V. Goring, Yelv. 11 ; Bradly v. Heath, 3 Sim. 543 ; Childs v. Monins, 2 Br. & B. 4G0 ; Reech v. Kenncgal, 1 Ves. 126. ^ Rose V. BowIlt, 1 H. Bl. 108 ; Powell v. Graham, 7 Taunt. 586. = Dueks V. Strutt, 5 T. R. 690 ; Rann v. Hughes, 7 T. R. 350, n. ; s. C. 4 Bro. P. C. 27. But see Reech v. Kennegal, 1 Ves. 120 ; Trewinian v. Howell, Cro. Eliz. 91. ■■ Pearson v. Henry, 5 T. R. 6 ; Goring v. Goring, Yelv. 11, n. 2 ; Oke- son's Appeal, 59 Penn. St. 99 (1868). 5 29 Car. H. eh. 3, § 4. See Mass. Gen. Sts. oh. 106, § 1. * The first case on this subject was "Wain v. Warlters, 5 East, 10, which was modified subsequently by the case of Stapp v. Lill, 1 Camp. 242 ; s. C. 9 East, 348 ; Lyon i;. Lamb, Fell on Merc. Guar. 318 ; Morris v. Stacey, Holt, N. P. 153 ; 2 Stark. Evid. 349 ; Champion v. Plummer, 1 Bos. & Pul. N. R. 252 ; "Wheeler v. Collier, Mood. & M. 125 ; Bovs v. Ayerst, Madd. & G. 316. See also Jenkins v. Reynolds, 3 Br. & B. 14; Saunders v. Wake- field, 4 B. & Al. 595 ; Morley v. Boothby, 3 Bing. 107 ; Leos v. Whitcomb, 5 Bing. 84; Cole v. Dyer, 1 Cr. & J. 461; Newbury v. Armstrong, 6 Bing. ' Stapp V. Lill, 1 Camp. 242 ; s. c. 9 East, 348. CHAP. V.J LIABILITIES OP EXECUTORS AND ADMINISTRATORS. 319 § 363. An executor, with assets, is answerable for the funeral expenses of the testator, although he do not order them, nor expressly promise to pay for them, for the law implies a promise to pay all reasonable ^ funeral expenses, from the fact of his having assets.^ Yet if the funeral be ordered by another person than the executor, to whom credit is given, the executor will not be liable^ to the person employed, although he may be bound to repay the amount so expended by the person ordering the expenses incurred.* § 364. If an executor submit a claim against himself as executor to arbitration, without protesting that the reference shall not be taken as an admission of assets, he thereby renders himself personally liable on the award, for the submission itself is otherwise treated as an admission that he has assets enough to pay, if it be decided that he is liable.^ § 365. The trade of the deceased dies with him, and his executor or administrator cannot, without direction of court, carry it on, even though ordered to do so by the will, without incurring a personal responsibility on all contracts made by him in the course thereof.^ An executor who carries on the trade of his testator, though avowedly in the name of executor, is personally liable for all the debts thus contracted by him.'' The executors of a deceased partner are not liable as partners 201 ; James v. Williams, 3 Nev. & Man. 196 ; s. c. 6 B. & Ad. 1109 ; Lay- thoarp V. Bryant, 3 Scott, 250 ; s. c. 2 Bing. N. C. 735 ; Sears v. Brink, 3 Johns. 210 ; Rogers v. Kneeland, 13 Wend. 114; Peltier u. Collins, 3 Wend. 4.59. See also Egerton v. Mathews, 6 East, 308, and note. But see Ex parte Gardom, 15 Ves. 287, 288. ■ See Magennis v. Dempsey, Irish R. 3 C. L. 327 (1868). 2 Tugwell V. lieyman, 3 Camp. 298 ; Rogers v. Price, 3 Y. & J. 28 ; Jenkins v. Tucker, 1 H. Bl. 90 ; Ambrose v. Kerrison, 10 C. B. 776 ; 4 Eng. Law & Eq. 361. ' Brice ». Wilson, 3 Nev. & Man. 512; Walker v. Taylor, 6 C. & P. 752. < Ambrose v. Kerrison, 10 C. B. 776 ; 4 Eng. Law & Eq. 361. ' BiddelJ v. Sutton, 5 Bing. 200 ; Robson v. , 2 Rose, 50 ; Barry v. Rush, 1 T. R. 691 ; Pearson v. Henry, 5 T. R. 7 ; Worthington v. Barlow, 7 T. R. 453. 8 Barker v. Parker, 1 T. R. 295 ; Ex parte Garland, 10 Ves. 119 ; Ex parte Richardson, Buck, 209 ; Wightman v. Townroe, 1 M. & S. 412 ' Labouchere v. Tupper, 11 Moore, P. C. 198 (1857). 320 EXECUTORS AND ADMINISTRATORS. [CHAP. V. with the surviving partners, merely because the latter carried on the business with their assent and encouragement ; they must have voluntarily employed the testator's assets in the trade.i And, in this respect, the law is somewhat tyrannous, for while it throws upon the executor a personal responsibility, it denies to him any personal benefit from the trade. Within this rule, however, is not included the performance and com- pletion of any unfinished executory contract made by the tes- tator or intestate, which are not essentially personal, — such as a contract to build a house, or publish a work, when the building or publishing is already commenced.^ Again, the mere buying of particular articles by the executor for the pur- pose of furthering the sale of the testator's assets, such buying not being intended as an increase of stock for the purposes of trade, will not render the executor liable.^ Where executors carried on the business of the testator after his decease, and supplied the defendant with goods therefrom, it was held that they could sue as executors, though it did not appear that any of the materials belonged to the testator.* § 366. In the next place, an executor or administrator may become responsible on his bond for negligence or improper con- duct in administering the estate ; and in such case he is said to be guilty of a devastavit, or wasting of assets. For all mal- administration or mismanagement of the estate, the executor or administrator is liable in a court of equity, and this is the proper tribunal for the adjustment of all difficulties arising from breaches of trust. Courts are, however, extremely liberal in respect to executors and administrators, and will not render them liable on slight and trivial grounds, although a proper performance of the trust will be insisted upon.^ A devastavit ' Riohter v. Poppenhusen, 57 Barb. 309 (1870). " Marshall v. Broadhurst, 1 Cr. & J. 403 ; Edwards v. Grace, 2 JM. & W. 190; Dakin v. Cope, 2 Russ. 170; Garrett w. Noble, 6 Sim. 504; Siboni v. Kirkman, 1 M. & W. 418. ' 2 Williams on Executors, pt. 4, B. 2, ch. 2, § 1, p. 1275; Toller on Executors, 487 ; Eden on Bank. 5. * Abbott V. Parfitt, Law R. 6 Q. B. 346 (1871), explaining Bolingbroke v. Kerr, Law R. 1 Exch. 222 (1866) . ' Powell V. Evans, 6 Ves. 843; Raphael v. Boehm, 18 Ves. 410; Tebbs V. Carpenter, 1 Madd. 298.. See Moore's Estate, 1 Tuck. 41. CHAP, v.] LIABILITIES OP EXECUTORS AND ADMINISTRATORS. 321 may occur, not only through a direct and -wilful misapplication of funds, but also by acts of negligence.^ If an executor or administrator collude with a purchaser to sell the testator's goods at an undervalue, or merely nominal price ; 2 or if he pay out legacies before debts ; or pay the notes out of their legal order, having notice of all, and the assets prove to be de- ficient ; 8 or if he release or compound debts due to the testator, where it does not manifestly appear to have been done for the benefit of the estate ; * or, if he pay debts which he is not bound to pay ; ^ he will be guilty of a devastavit, and render himself personally responsible. Again, he is considered in equity^ (although this rule would not appear to obtain at law) as a gratuitous bailee, and to be responsible, therefore, only for losses growing out of gross negligence or misconduct, and not for losses resulting from Unavoidable accident or force, such as theft, or fire, or the like ; or from reasonable confidence disappointed, or, indeed, from any cause not growing out of his gross negligence.'^ If he proceed to pay the legacies, after haying paid all the debts of which he has any cognizance, and subsequently an outstanding debt appears, of which he had no notice, he will be protected in equity against it, in case of a deficiency of assets, if he have acted in good faith, and with 1 See Holmes v. Bridgman, 37 Vt. 28 (1864) ; Oglesby v. Howard, 43 Ala. 144. 2 Worseley v. De Mattoa, 1 Burr. 475 ; 1 Story, Eq. Jur. § 422, 424, and cases cited; Ewer v. Corbet, 2 P. Wms. 148; Went. Off. Executor, 302; Bac. Abr. Executors (L.) 1 ; Holland v. Prior, 1 Myl. & K. 240. » 2 Black. Comm. 511 ; Rock v. Leighton, 1 Salk. 310 ; 1 Saund. 333 a, n, 8; Vernon u. Egmont, 1 Bligh (n. s.), 571; Hawkins v. Day, Ambl. 160; Harman v. Harman, 2 Show. 492. * Went. Off. Ex. 303 ; Cocke v. Jennor, Hob. 66 ; Brightman v. Keighley, Cro. Eliz. 43; Com. Dig. Adm'n (I.) ; Bac. Abr. Executors (L.) 1. ^ Com. Dig. Adm'n (I. 1) ; Vez v. Emery, 5 Ves. 141 ; Doyle v. Blake, 2 Sch. & Lef. 243 ; Giles v. Dyson, 1 Stark. 32. 8 Massey v. Banner, 1 Jao. & Walk. 243 ; Edwards u. Freeman, 2 P. Wms. 447 ; 1 Story, Eq. Jur. § 90, and case cited ; Johnson v. Johnson, 3 Bos. & Pul. 162; Croft's Executors v. Lyndsey, 2 Freem. 1. ' Crosse v. Smith, 7 East, 246 ; Johnson v. Johnson, 3 Bos. & Pul. 162, 169 ; Jones v. Lewis, 2 Ves. 240 ; Brown v. Litton, 1 P. Wms. 141 ; Webster v. Spencer, 3 B. & Al. 360; Clough v. Bond, 3 Myl. & Cr. 490. See post, § 377, note ; State v. Meagher, 44 Mo. 856 (1869). VOL. I. 21 322 EXECUTORS AND ADMINISTRATORS. [CHAP. T. due caution .1 And even in law, if he should pay a simple contract debt, without notice of a specialty debt, he would not be liable in case of a deficiency of assets, unless he appear to have been wanting in diligence and caution.^ But in courts of equity he will always be protected under circumstances of hardship or injustice, where he has been guilty of no improper or negligent conduct.^ § 367. It is considered in equity as a breach of trust for an executor to leud money belonging to the estate upon any per- sonal security, such as a bond or promissory note, — for which he renders himself liable individually,* unless the will directs him to do so, in which case he is bound to exercise a sound discretion in lending to a responsible person.^ But even then, executors cannot lend to each other,^ nor, apparently, will a loan avail against creditors .'^ § 368. Where there are two or more executors or adminis- trators, one is not liable for the acts of the other, unless he have assented thereto, or have become involved therein and connected therewith by some act of his own.^ One executor is not, therefore, liable ordinarily for the assets which have come to the hands of his coexecutors,^ unless they have passed through his hands, and have been handed over to them by him ' 1 Story, Eq. Jur. § 90 ; Edwards v. Freeman, 2 P. Wms. 447 ; Johnson V. Jobnson, 3 Bos. & Pul. 162, 169 ; Hawkins v. Day, Ambl. 160 ; Chamber- laine v. Chamberlaine, 2 Freem. 141. But see Coppin v. Coppin, 2 P. Wms. 296 ; Orr v. Kaines, 2 Ves. 194 ; Underwood v. Hatton, 5 Beav. 36. ^ Davies v. Monkbouse, Fitzglb. 76 ; Brooking v. Jennings, 1 Mod. 174; Britton V. Battburst, 3 Lev. 115 ; Hawkins v. Day, Ambl. 160. "* 1 Story, Eq. Jur. § 90, and cases cited ; Clough v. Bond, 3 Myl. & Cr. 490. ■• Terry v. Terry, Prec. Ch. 273; s. c. Gilb. 10; Ryder u. Bickerton, 8 Swanst. 80; Walker v. SjTiionds, 3 Swanst. 63; Vigrass v. Binfield, 3 Madd. 62 ; Holmes v. Dring, 2 Cox, 1. See Johnston «. Maples, 49 111. 101. 6 Forbes v. Ross, 2 Cox, 116. See Walls v. Grigsby, 42 Ala. 473. « Stickney v. Sewell, 1 Myl. & Cr. 8 ; Gleadow v. Atkin, 2 Cr. & J. 648; V. Walker, 6 Russ. 7. 7 Doyle V. Blake, 2 Scb. & Lef. 231. " Went. Off. Executor, 306; Anon., Dyer, 210 a; Hargthorpe v. Mil- forth, Cro. Eliz. 318 ; Langford v. Gascoyne, 11 Ves. 835. ^ Hargthorpe v. Milforth, Cro. Eliz. 318 ; Littlehales v. Gascoyne, 3 Bro. C. C. 74; Langford «. Gascoyne, 11 Ves. 335. CHAP, v.] LIABILITIES OP EXECUTORS AND ADMINISTRATORS. 323 without sufficient reason.^ But he cannot absolve himself from responsibility by paying over the assets to his coexecutors ; he must show that they have been applied in conformity with the trusts of the will.^ So if one executor contribute in any way to enable his coexecutor to obtain assets, he is ordinarily liable.^ If, therefore, coexecutors agree with each other to divide their duties, and one to take charge of one part of the estate, and another of a different part, each will be responsible for the acts of the others.* But where an executor places assets in the hands of his coexecutor, he will not be chargeable, if he would have been authorized from the position and char- acter of the coexecutor, to have placed them in his hands had he been a mere stranger.^ Thus, if the coexecutor be a banker, in perfectly solvent circumstances, or have been the confidential ^ Edmonds v. Crenshaw, 14 Peters, 166 ; Townsend v. Barber, 1 Dick. 356 ; Davis v. Spurling, 1 Russ. & Myl. 66 ; Shipbrook v. Hinchinbrook, 11 Ves. 254; 2 Story, Eq. Jur. § 1280 a. 2 Edmonds v. Crenshaw, 14 Peters, 166. In this case, Mr. Justice M'Lean, delivering the opinion of the court, said : " Where there are two executors in a will, it is clear that each has a right to receive the debts due to the estate, and all other assets, which shall come into his hands ; and he is responsible for the assets he receives. This responsibility results from the right to receive, and the nature of the trust ; and how can he discharge him- self from this responsibility ? In this case the defendant has attempted to discharge himself from responsibility by paying over the assets received by him to his coexecutor. But such payment cannot discharge him. Having received the assets in his capacity of executor, he is bound to account for the same ; and he must show that he has made the investment required by the will, or in some other mode, and, in conformity with the trust, has applied the funds. One executor, having received funds, cannot exonerate himself, and shift the trust to his coexecutor, by paying over to him the sums re- ceived. Each executor has a right to receive the debts due to the estate and discharge the debtors ; but this rule does not apply as between the executors. They stand upon equal ground, having equal rights, and the same responsi- bilities. They are not liable to each other, but each is liable to the cestui que trust, to the full extent of the funds he receiyes. Douglass v. Satterlee, 11 Johns. 16 ; Fairfax's Executors v. Fairfax, 5 Cranch, 19." * Langford v. Gascoyne, 11 Ves. 335 ; Shipbrook v. Hinchinbrook, 11 Ves, 254; 16 Ves. 477. See Daly's Estate, 1 Tuck. 95 (1867). * Gill V. Attorney-General, Hardr. 314 ; Lees v. Sanderson, 4 Sim. 28 ; Shipbrook v. Hinchinbrook, 11 Ves. 252 ; s. C. 16 Ves. 477. 6 Churchill v. Hobson, 1 P. Wms. 241 ; Chambers v. Minchin, 7 Ves. 198. See Kincade v. Conley, 64 N. C. 387. 32-4 EXECUTORS AND ADMINISTRATORS. [CHAP. V. agent and attorney of the testator, the executor would not be liable for money placed in his hands. ■• Again, if one executor passively allow his coexecutor to take assets without doing any act to further it, he will not be liable, at least in equity, unless he were bound to interfere and prevent it.^ But if he know that the funds are misapplied, and he does not interfere to prevent the misappropriation, he would be liable.^ ' Chambers v. Minchin, 7 Ves. 198 ; Bacon v. Bacon, 5 Ves. 331. ' Langford v. Gascoyne, 11 Ves. 335 ; Joy t. Campbell, 1 Sch. & Lef. 811 ; Hovey v. Blakeman, 4 Ves. 596. But the rule would seem to be dif- ferent at law. See Crosse v. Smith, 7 East, 216. ^ Williams v. Nixon, 2 Beav. 472. In this case, Lord Langdale said: " There can be no doubt that, if an executor knows that the moneys received by his coexecutor are not appUed according to the trusts of the will, and stands by and acquiesces in it, without doing any thing on his part to pro- cure the due execution of the trusts, he will, in respect of that negligence, be himself charged with the loss ; but in cases of this kind it is always to be observed that the testator himself, having invested certain persons with the character of executors, has trusted them to the extent to which the law allows them to act as executors ; and in that character each has a separate right of receiving and giving discharges for the property of the testator. In this particular case, the testator, having money in tlie funds, and other prop- erty to a considerable amount, directed certain annuities to be paid, and bequeathed his residuary estate in the mode stated. Both executors proved the will, and thereupon each of them became entitled to receive the property. One of them did receive the property, — the dividends upon the stocks and funds, and the other personal estate. If Mr. Nixon knew that his coexecu- tor was misapplying the moneys thus received, and acquiesced in it, he became himself liable ; because he was a witness and an acquiescing party to the misapplication, or breach of trust ; but if he was not aware of the mis- application, I know of no case in which the court has gone the length of saying that an executor shall be held personally answerable for standing by and permitting his coexecutor to do that which, fi^r any thing he knows to the contrary, was a performance of the trusts of the will. In this case it is clear Mr. Nixon must have known there was stock in the funds. He might have known that the dividends arising from that stock were, from time to time, received by Mr. Mills; knowing that he might, nevertheless, have full reason to believe that they were duly applied according to the trusts and directions of the will, in satisfaction of the annuities, or of the rent of the leasehold estate possessed by the testator at his death, and which was pay- able out of the whole estate. The argument for the plaintiff proceeds upon this, that you are to impute to Mr. Nixon a knowledge of all that he might have known. It is said he proved the will, and must therefore have known its contents, and what was to be done in pursuance of the trusts ; this is a CHAP. T.] LIABILITIES OF EXECUTORS AND ADMINISTRATORS. 325 ^ § 369. Where two executors have joined in signing a receipt, both will be liable thereon. But a distinction has been re- peatedly made in favor of cases where the signing by one was merely a matter of form, he having no control over the money, or the money having been received beforehand by the other ; and it would, therefore, seem, though this is by no means without doubt, that the question which tests the liability of an executor who has joined his coexecutor in a receipt, is, whether he gave the receipt as a mere form, or whether he had control over the money ; in the former case he would not be liable, in the latter case he would be liable.^ The cases are, however, in this respect, very contradictory, and the later cases have adhered to the strictest rule in considering receipts.^ presumption which I tliink the law itself will draw, and he must therefore be taken to have known the contents of the will ; then it is argued that, on proving the will, he was bound to make a statement upon oath respecting the value of the property, and therefore became acquainted with the particulars. He might have had some knowledge of it to the limited extent which can be known on such occasions ; but I cannot impute to him a knowledge of the exact state or amount of the property or of the claims upon it, or the clear amount of the balance in the hands of his coexecutor. I certainly do not recollect any case in which the principle has been carried to the extent to which it has been here pressed ; and if, in this case, I were to charge Mr. Nixon generally with all the assets received by his coexecutor, I must, in every other case, say that an executor who does not personally act, and who, having no reason to suspect any misapplication by his coexecutor, permits him to act alone, is liable for every misapplication committed by his coexecutor ; I do not think I can lay down any such rule." Clark v. Clark, 8 Paige, 152. ' See Churchill v. Hobson, 1 P. Wms. 243 ; Westley v. Clarke, 1 Eden, 857 ; Hovey v. Blakeman, 4 Ves. 608 ; Scurfield v. Howes, 3 Bro. C. C. 95 ; Joy V. Campbell, 1 Sch. & Lef. 341 ; Boyle v. Blake, 2 Sch. & Lef. 242 ; Walker v. Symonds, 3 Swanst. 64; Sadler v. Hobbs, 2 Bro. C. C. 117; 2 Story, Eq. Jur. § 1281. See Black's Estate, 1 Tuck. 145. 2 Sadler u. Hobbs, 2 Bro. C. C. 114; Scurfield v. Howes, 3 Bro. C. C. 94 ; Chambers v. Minchin, 7 Ves. 197 ; Brice v. Stokes, 11 Ves. 324 ; Moses v. Levi, 3 Younge & Coll. 359 ; Shipbrook v. Hinohinbroolc, 16 Ves. 477. But see Monell v. Monell, 5 Johns. Ch. 283 ; in which Chancellor Kent does not seem to admit any distinction between executors and trustees in respect to their receipts. So in Westley v. Clarke, 1 Eden, 357, the strict doctrine was strongly assailed by Lord Northington, and in Hovey v. Blake- man, 4 Ves. 607, Lord Alvanley contended against the conclusiveness of the rule, although he admitted it. But it is said by Mr. Justice Story (2 Eq. Jur. § 1281, note) to be " now established by what must be deemed over- ruling authority." See also Manahan v. Gibbons, 19 Johns. 427 ; Sutherland V. Brush, 7 Johns. Ch. 22, 23. See post, Receipts. 326 EXECUTORS AND ADMINISTRATORS. [CHAP. T. § 370. Where an executor, after partially administering the estate, renounces his office, and surrenders the assets to his coexecutor, he is nevertheless liable for all the assets which he has received.^ And if an executor has proved the will, he cannot afterwards renounce his office, so as to act in relation to the estate in a different character. 2 But if he have not proved the will, he may renounce his office, and may assist the executor without creating a personal liability.^ § 371. Executors and administrators are chargeable with interest on the assets in their hands in two cases. 1st. Where they have been guilty of negligence in not accounting for the money, or in not investing it properly. Ordinarily, indeed, it is not their duty to invest funds belonging to the estate. Yet, if they be guilty of negligence in not accounting for the funds, or if they hold them for an unreasonable time in their hands, or if they' keep money dead in their hands without apparent reason or necessity, they are chargeable with simple interest from the time when such funds should have been paid over or invested.'* 2d. Where they have been guilty of a breach of trust, as by converting to their own personal use and profit the money in their hands as executors Or administrators.^ And in such cases tlicy must pay the interest they niake,^ and in cases of gross breach of trust, they are chargeable with com- 1 Read v. Truelove, Ambl. 417 ; Doyle v. Blate, 2 Sch. & Lef. 231 ; Underwood v. Stevens, 1 Meriv. 712 ; Rogers v. Frank, 1 Y. & J. 409 ; Edmonds v. Crenshaw, 14 Peters, 166 ; Douglass v. Satterlee, 11 Johns. 16. ^ Graham v. Keble, 2 Dow, 17 ; Balclien v. Scott, 2 Ves. Jr. 678. s Orr V. Newton, 2 Cox, 274 ; Statey v. Elph, 1 Myl. & K. 195 ; Dove t). Everard, 1 Russ. & Myl. 231. * Dunscomb v. Dunscomb, 1 Johns. Ch. 510 ; Schieffolin v. Stewart, 1 Johns. Ch. 620 ; Boynton v. Dyer, IS Pick. 7 ; Rocke v. Hart, 11 Ves. 59 ; Treves v. Townshend, 1 Bro. C. C. 384 ; De Peyster v. Clarkson, 2 Wend. 77; Wyraaii v. Hubbard, 13 Mass. 232. See Kamb v. Lamb, 11 Pick. 371. ^ Mannings. Manning, 1 Johns. Ch. 635 ; Ratelifie v. Graves, 1 Vern. 196 ; Dunscomb «. Dunscomb, 1 Johns. Ch. 510 ; Piety v. Stace, 4 Ves. 620 ; Perkins t). Baynton, 1 Bro. C. C. 375 ; Forbes v. Ross, 2 Bro. C. C. 430 ; Boynton v. Dyer, 18 Pick. 7. See Chri^tic's Estate, 1 Tuck. 81 (1869). " Ibid. ; Forbes v. Ross, 2 Cox, 110 ; Rockc. v. Hart, 11 Ves. 60 ; Pocock V. Rtddiiigton, 5 Ves. 794 ; Piety v. Stace, 4 Ves. 620. See McElroy v. Thompson, 42 Ala. 656. CHAP, v.] LIABILITIES OP EXECUTORS AND ADMINISTRATORS. 327 pound interest.^ They are also probably liable for interest where they mix the trust funds with their own, and deposit them in a bank where they receive interest on their ovra money.^ § 372. Executors may not only represent the testator, but they may be constituted trustees under the will, and their duties and liabilities in this character we shall now proceed to consider. ' Schieffelin v. Stewart, 1 Johns. Ch. 620 ; Dunscomb o. Dunscomb, 1 .Tohns. Ch. 608 ; Manning ». Manning, 1 Johns. Ch. 536 ; Boynton v. Dyer, 18 Pick. 7 ; Raphael v. Boehm, 11 Ves. 92 ; s. c. 13 Yes. 407 ; Stacpoole v. Stacpoole, 4 Dow, 209 ; 2 Story, Eq. Jur. § 1277. ' See Hess's Appeal, 68 Penn. St. 454 (1871). 328 TEUSTEES. [chap. VI. CHAPTER VI. TRUSTEES. § 373. A TRUSTEE is a person holding the legal title to prop- erty, under an express or implied agreement to apply it, and the income arising from it, to the use and for the benefit of another person, who is called a cestui que trust. Trusts are, therefore, equitable interests in property, based on confidence, over which courts of equity alone have full jurisdiction. ^ A trust may be created either by specialty or parol, and may be express or implied, but the statute of frauds of 29 Charles II. ch. 3, § 7 (which is generally adopted in the United States), requires that it should be in writing. It is not necessary, how- ever, that the declaration of trust should be made in any particular form, but it will be sufficient if it can be clearly extracted from any letters or writings of the party ,2 and al- though it be expressed in the form of a request, or desire, or recommendation. If, however, a trust be so vague and indefi- nite, that its object and terms cannot clearly be ascertained, it will not be carried into effect.^ The statute also exempts trusts arising, transferred, or extinguished by operation of law, and does not extend to declarations of trusts of personalty.* § 374. A trustee is bound to perform all acts which are necessary for the proper execution of his trust. But by the English rule, as he is not allowed compensation for his ser- ' 2 Story, Eq. Jur. ch. 24, § 962 ; Cooper on Eq. PI. Introd. p. xxvii. ; Start V. Hellish, 2 Atk. 610; Com. Dig. Chancery (2 H.). ' 2 Story on Eq. Jur. § 973 ; Crooks v. Brookeing, 2 Vern. 106 ; Inchiquin V. French, 1 Cox, 1 ; Smith v. Attersoll, 1 Euss. 266. ' Stubbs V. Sargon, 2 Keen, 265 ; Ommanney v. Butcher, Turn. & Russ. 260, 270. . * Nab V. Nab, 10 Mod. 404 ; Fordyce v. Willis, 3 Bro. C. C. 586 ; 2 Story, Eq. Jur. § 972. See Mass. Gen. Sts. ch. 100, § 19. CHAP. VI.] TRUSTEES. 820 vices, he would stand iu the position of a gratuitous bailee, and be responsible only for losses or improper execution of his trust, in cases of gross negligence.^ The rule denying him compensation does not, however, obtain generally in America,^ and it is the general practice in America to allow commissions to trustees in cases of open and admitted trusts, where the trustee has not forfeited them by gross misconduct.^ It would seem, that in all the States where a compensation is given, he would be a bailee for hire of labor and services, and bound to ' 2 Story, Eq. Jur. § 1268 ; Story on Bailments, § 173, 174 ; Manning v. Manning, 1 Johns. Ch. 527, and cases therein cited ; Chatham v. Lord Audley. 4 Ves. 72 ; Robinson v. Pett, 3 P. Wms. 251 ; Annesley's Case, Ambler, 78 ; Brocksopp v. Barnes, 5 Madd. 90 ; Jenkins v. Eldredge, 3 Story, 333. * Meacham v. Stemes, 9 Paige, 399 ; Barrell v. Joy, 16 Mass. 221 ; Jen- kins V. Eldredge, 3 Story, 333 ; Denny v. Allen, 1 Pick. 147. But see Man- ning V. Manning, 1 Johns. Ch. 527, where the English rule is maintained by Chancellor Kent. Mr. Justice Story, in commenting upon the rule as indi- cated by Mr. Chancellor Kent in the case of Manning v. Manning, and by Lord Cottenham in Homo v. Pringle, 8 CI. & Finn. 264-287, says: "I confess that I have not been able quite so clearly to see, or so strongly to approve, the policy of the rule. Trusts may be very properly considered as matters of honor and kindness, and of a conscientious desire to fulfil the wishes and objects of friends and relatives. But the duties and responsibilities of the office of a trustee are sufficiently onerous and perplexing in themselves ; and mistakes, even of the most innocent nature, are sometimes visited with severe consequences. Nor can any one reasonably expect any trustee to devote his time or services to a very watchful care of the interests of others, when there is no remuneration for. his services, and there must often be a positive loss to himself, in withdrawing from his own concerns some of his own valuable time. To say that no one is obliged to take upon himself the duty of a trustee, is to evade, and not to answer, the objection. The policy of the law ought to be such as to induce honorable men, without a sacrifice of their private interest, to accept the office ; and to take away the temptation to abuse the trust, for mere selfish purposes, as the only indemnity for ser- vices of an important and anxious nature. The very circumstance, that trus- tees now often stipulate for a compensation before accepting the office, and that courts of equity now sanction such an allowance, is a distinct proof that the rule does not work well, and is felt to be inconvenient or unreasonable in practice. The rule to disallow compensation to trustees has not been gen- erally adopted in America." 8 Jenkins v. Eldredge, 3 Story, 332, 333 ; Dixon v. Homer, 2 Met. 420; Clark v. Piatt, 30 Conn. 282 (1861). See Blake v. Pegram, 101 Mass. 592. 330 TRUSTEES. [CHAP. TI. exercise ordinary diligence. And he engages that he has suf- ficient skill to execute the duties of his office properly. And, indeed, a trustee seems generally to be bound to take the same care of the trust fund as a prudent and discreet man would take of his own property, to manage it for the best interest of the cestui que trust, and to make no profit or advantage out of it for himself personally.^ § 375. In regard to the preservation of trust property, the rule is, that a trustee must keep it with the same care as if it were his own. And if the trust property be lost or destroyed, or be stolen, he will not be responsible, unless the loss occur through the want of ordinary care and diligence.^ He is even allowed in equity to establish any amount stolen from him by his own oath, where no other mode is practicable.^ So, also, if loss be incurred owing to the necessary or proper transmis- sion of it through other hands ; as if money be placed in the hands of a banker in good credit, to be remitted by a bill, drawn by a person in good credit, and the banker should become bankrupt, the trustee would not be responsible.* § 376. It is the duty of a trustee to keep regular accounts, to collect all debts, to defend all suits brought against the trust property, and to give notice of such suit to his cestui que trust ; to keep himself properly informed in respect to all circum- stances affecting the trust property, and to use reasonable dili- gence in executing his trust.^ He will not be liable, if he have not been guilty of more than ordinary negligence, for loss by 1 Boynton ». Dyer, 18 Pick. 6, and cases cited ; The Charitable Corp. v. Sutton, 2 Atk. 406 ; Clough v. Bond, 3 Myl. & Cr. 490 ; 1 Story, Eq. Jur. § 465 ; 2 ib. § 1269, and cases cited ; Hart v. Ten Eyok, 2 Johns. Ch. 76 ; Thompson v. Brown, 4 Johns. Ch. 619; Caffrey v. Darby, 6 Ves. 488; Wilkinson «. Stafford, 1 Ves. Jr. 32, 41. See Blauvelt v. Ackerman, 6 C. E. Green, 141 (1869). 2 2 Story, Eq. Jur. § 1269 ; Morley v. Morley, 2 Cas. Ch. 2 ; Knight ». Lord Plimouth, 3 Atk. 480; Jones v. Lewis, 2 Ves. 240. 8 Ibid. * Ibid, ; Ex parte Belchier «. Parsons, Ambl. 219 ; Knight v. Lord Pli- mouth, 3 Atk. 480 ; Clough v. Bond, 3 Myl. & Cr. 490. 5 Freeman v. Fairlie, 3 Meriv. 29, 41 ; Pearse v. Green, 1 Jac. & Walk. 135, 140 ; Adams v. Clifton, 1 Russ. 297 ; Walker v. Symonds, 3 Swanst 68, 73 ; Boynton v. Dyer, 18 Pick. 6 ; 1 Story, Eq. Jur. § 465 ; 2 ib. § 1276 ; Caffrey v. Darby, 6 Ves. 488. CHAP. TI.] TRUSTEES. 331 inevitable accident or force, — such as losses by fire or robbery,! and he will be allowed to establish the amount lost by his own oath.^ Again, inasmuch as trustees stand in a fiduciary rela- tion to their cestui que trust, they are not permitted to accept of his bounty, nor to purchase the trust property from him ; ^ and the reason of this rule is, that the position of the trustee enables him to exercise a commanding influence over his cestui que trust, and affords opportunities for fraudulent or excessive advantage. Yet although, ordinarily, no purchases by a trus- tee from his cestui que trust are binding, yet if the sale be made with the most entire good faith and openness, and with no circumstances indicating the least advantage taken by the trustee, such sales will be permitted to stand, if the cestui que trust desire it.* But even in a case of a purchase of trust property without suspicion, the cestui que trust may claim to have it set aside.^ If there be any inequality or inadequacy of price, a fortiori, the sale would not be binding. And the mere fact that a trustee sells property, bought by him of his cestui que trust, for a larger price than he gave for it, would make him a trustee for the overplus.^ But when a cestui que trust, knowing of a purchase of the trust property by his trus- tee, and of his own right to avoid it, assents to the application ' 2 Story, Eq. Jur. § 1269 ; Ex parte Belchier v. Parsons, Ambl. 219. " Morley v. Morley, 2 Cas. Ch. 2 ; Knight v. Lord Plimouth, 3 Atk. 480; Jones V. Lewis, 2 Ves. 240. » 1 Story, Eq. Jur. § 311, 321 ; Hatch v. Hatch, 9 Ves. 297 ; Hylton v. Hylton, 2 Ves. 548 ; Farnam v. Brooks, 9 Pick. 212 ; Bulkley v. Wilford, 2 CI. & Finn. 102, 177 ; Arnold v. Brown, 24 Pick. 89, 96. •* 1 Story, Eq. Jur. § 321, and cases cited ; Beeson v. Beeson, 9 Barr, 279 ; Painter v. Henderson, 7 Barr, 48 ; Jenkins v. Eldredge, 3 Story, 290. ' Davoue v. Fanning, 2 Johns. Ch. 252 ; Campbell v. Walker, 5 Ves. 678 ; Ex parte Laeey, 6 Ves. 625 ; Ex parte Bennett, 10 Ves. 381 ; Whit- comb V. Minchin, 5 Madd. 91 ; Cane ». Lord Allen, 2 Dow, 289, 299; Ed- wards V. Meyrick, 2 Hare, 60; 1 Story, Eq. Jur. § 311. In the case of a sale by a client to an attorney, the attorney must prove the entire absence of any advantage taken of the client, and then the sale will be good and bind- ing. Hunter v. Atkins, 3 Myl. & K. 113 ; 1 Story, Eq. Jur. § 312 ; Cane w. Lord Allen, 2 Dow, 289 ; McKinley v. Irvine, 13 Ala. 681. « Fox «. Mackreth, 2 Bro. C. C. 400 ; Prevost v. Gratz, Peters, C. C. 367; s. c. 6 Wheat. 481; Edwards v. Meyrick, 2 Hare, 60; Hawley v. Cramer, 4 Cow. 717 ; Slade v. Van Vechten, 11 Paige, 21. 332 TRUSTEES. [chap. VI. of the purchase-money to his own use, such an assent will operate as a ratification of the sale.^ § 377. But besides these general rules, there are some special acts, in relation to which courts of equity have enlarged the liabilities of a trustee and required a stricter measure of diligence. Thus, it is the duty of a trustee to invest the funds of his cestui que trust, and not to keep them dead in his hands ; and if he suffer money belonging to his cestui que trust to re- main idle and unproductive for an unreasonable length of time, he will be chargeable with simple interest thereon, and in case of gross delinquency, with compound interest.^ Yet a trustee cannot be surcharged upon evidence of witnesses that the property ought to have yielded more than it did, when there is no evidence as to particulars, and there is evidence that the rents demanded were at fair prices, and every thing received had been accounted for, and tlie property very much improved under his management.^ But in investing the property in his hands as trustee he is bound to exercise the strictest circum- spection and caution;* and if he put it in the control of persons who ought not to be intrusted witli it, or if he invest it in stock in which a court of equity is not accustomed to direct funds in its possession as trustee to be invested, the trustee would be liable for any loss or depreciation in value, although he may have acted in entire good faith.^ But where he acts 1 Beeson ». Beeson, 9 Barr, 279. See Boerum v. Scbenck, 41 N. Y. 182. 2 2 Kent, Comm. lect. 30, p. 230, and cases cited; Boynton v. D)"er, 18 Pick. 7 ; Raphael v. Boehm, 11 Ves. 92 ; Green v. Winter, 1 Johns. Ch. 26 ; Dunscomb v. Dunscomb, 1 Johns. Ch. .'j08 ; Phillips v. Phillips, 2 Freem. 11 ; 2 Story, Eq. Jur. § 1277 ; Wright v. Wright, 2 M'Cord, Ch. 185 ; Pvev. Stat, of New Jersey, 779, § 11 ; Evertson v. Tappen, 6 Johns. Ch. 497. ^ Moore's Appeal, 10 Barr, 435. * The duty of trustees to invest the trust funds in safe securities is most strictly enforced in King u. Talbot, 40 N. Y. 76 (1869), in which a very valuable opinion is given by Woodruif, J. " Clough V. Bond, 3 Myl. & Cr. 490, 496 ; Hancom u. Allen, 2 Dick. 498; Traflford ». Boehm, 3 Atk. 444; Adye v. Feuilleteau, 1 Cox, 24; s. c. 2 Dick. 499, note; Jackson v. Jaukson, 1 Atk. 513 ; Knight d. Earl of Ply- mouth, 1 Dick. 126 ; Fyler v. Fyler, 3 Beav. 650 ; Holland v. Hughes, 16 Ves. 111. CHAP. VI.J TRUSTEES. 333 within the strict hne of his duty, and does what a court of equity would order under similar circumstances, he will not be liable.^ If, therefore, he deposit money in the hands of a banker in good credit, who afterwards fails, he would not be responsible.^ The same doctrine obtains where he is forced to do an act from necessity.^ ' Cloiigh V. Bond, 3 Myl. & Cr. 490. In this case, Lord Cottenham, speaking of the personal representatives of a deceased person, who are treated as trustees, says : " It will be found to be the result of all the best authorities upon the subject, that, although a personal representative, acting strictly within the line of his duty, and exercising reasonable care and dUi- genoe, will not be responsible for the failure or depreciation of the fund, in which any part of the estate may be invested, or for the insolvency or mis- conduct of any person who may have possessed it ; yet, if that line of duty be not strictly pursued, and any part of the property be invested by such personal representative in funds or upon securities not authorized, or be put within the control of persons who ought not to be intrusted with it, and a loss be thereby eventually sustained, such personal representative will be liable to make it good, however unexpected the result, however little likely to arise from the course adopted, and however free such conduct may have been from any improper motive. Thus, if he omit to sell property when it ought to be sold, and it be afterwards lost without any fault of his, he is liable : PhilHps e. Phillips, 2 Freem. 11 ; or if he leave money due upon personal security, ■ which, though good at the time, afterwards fails : Powell v. Evans, 5 Ves. 839; Tebbs v. Carpenter, 1 Madd. 290. And the case is stronger, if he be himself the author of the improper investment, as upon personal security, or an unauthorized fund. Thus, he is not liable upon a proper investment in the three per cents, for a loss occasioned by the fluctuations of that fund : Peat v. Crane, 2 Dick. 499, note ; but he is for the fluctuations of any unauthorized fund : Hancom v. Allen, 2 Dick. 498 ; Howe v. Earl of Dartmouth, 7 Ves. 137, see p. 150. So, when the loss arises from the dis- honesty or failure of any one to whom the possession of part of the estate has been intrusted. Necessity, which includes the regular course of business in administering the property, will, in equity, exonerate the personal repre- sentative. But if, without such necessity, if he be instrumental in giving to the person failing possession of any part of the property, he will be liable, although the person possessing it be a coexeoutor or coadministrator. Lang- ford V. Gascoyne, 11 Ves. 333 ; Lord Shipbrook v. Lord Hinchinbrook, 11 Ves. 252 ; 16 Ves. 477 ; Underwood v. Stevens, 1 Meriv. 712." And see Hanbury v. Kirkland, 3 Sim. 265 ; Broadhurst v. Balguy, 1 Younge & Coll. C. C. 16, 28. 2 Knight V. Lord Plimouth, 3 Atk. 480 ; Jones v. Lewis, 2 Ves. 240 ; Rowth V. Howell, 3 Ves. 665 ; Massey v. Banner, 4 Madd. 416 ; Adams v. Claxton, 6 Ves. 226. 8 Ex parte Belchier v. Parsons, Ambl. 219 ; 2 Story, Fq. Jur. § 1269. 834 TRUSTEES. [chap. VI. § 378. Again, a trustee is not permitted to invest the prop- erty of liis cestui que trust solely in personal securities of any kind ; nor can he allow any debt which comes to his possession to stand upon the personal credit of the debtor. ^ He is, there- fore, bound to take security on real estate, or something of permanent value, or to act under the direction of a court of equity, which he may always claim. ^ § 379. Such, undoubtedly, are the rules, which are held in the English courts of equity to govern the duties of a trustee in investing the property of his cestui que trust. ^ A more limited doctrine was at one time advanced by Lord Northing- ton, who declared that a letting of money on personal secu- rity did not, of itself, constitute gross negligence and breach of trust, but that other circumstances must be shown in order to charge the trustee.* This doctrine, however, did not meet with favor, and has been since wholly denied in the English cases.^ It would seem, however, to have been adopted in this country as the most proper and reasonable rule ; ® for, as has been said by Mr. Justice Story, that " to add hazard and risk to trouble and to subject a trustee to loss which he co.uJd not foresee, and consequently not prevent, would be a manifest hardship, and would be deterring every one from accepting so necessary an office." ^ It has been directly held in the Supreme Court of Massachusetts, that a loan by a guardian, upon the promissory note of the borrower, payable in one year with 1 Powell V. Evans, 5 Ves. 839 ; Tebbs v. Carpenter, 1 Madd. 290 ; Adye e. Feuilleteau, 1 Cox, 24; Ryder v. Bickerton, 3 Swanst. 80; Walker v. Symonds, 3 Swanst. 62 ; Holmes v. Bring, 2 Cox, 1,2; Wilkes v. Steward, Coop. 6 ; 2 Story, Eq. Jur. § 1274. See Richardson v. Boynton, 12 Allen, 138. 2 Ibid. J Leech v. Leech, 1 Cas. Ch. 249 ; 2 Story, Eq. Jur. § 1276, note 1. See Lovell v. Minot, 20 Pick. 116. s Holmes v. Bring, 2 Cox, 1, 2; Adye v. Feuilleteau, 1 Cox, 24; Ryder t). Bickerton, 3 Swanst. 80 ; 1 Eden, 149, and Mr. Eden's note, p. 150 ; 2 Story, Eq. Jur. § 1274. * Harden v. Parsons, 1 Eden, 148. ' Wilkes V. Steward, Coop. 6 ; Walker v. Symonds, 3 Swanst. 62. See also Lowson v. Copeland, 2 Bro. C. C. 156, and Mr. Bell's note. ^ Harvard College v. Amory, 9 Pick. 461 ; Lovell v. Minot, 20 Pick. 116, 119 ; Case of Calhoun's Estate, 6 Watts, 185 ; Thompson v. Brown, 4 Johns. Ch. 628 ; Jones's Appeal, 8 Watts & Serg. 143 ; Hext v. Porcher, 1 Strobh. Eq. 170 ; Twaddell's Appeal, 5 Barr, 15 ; Brown v. Wright, 39 Ga. 96. ' 2 Story, Eq. Jur. § 1271. And see King v. Talbot, 40 N. Y. 76. CHAP. TI.j TRUSTEES. 835 interest, and secured by a pledge of shares in a manufacturing corporation, the amount of the loan being about three-quarters of the par value of the shares, and less than three-quarters of their market value, was an investment made with sound dis- cretion; and although the borrower failed before the note became due, and the shares fell in value below the amount of the note, the guardian was held not to be responsible for the loss.i Mr. Chief Justice Shaw, in this case, reasserts the rule declared in a previous case, " that all that can be required in such cases is, that the trustee shall conduct himself faithfully, and exercise a sound discretion." ^ § 380. Again, where a trustee places money belonging to his cestui que trust in the hands of a banker, he must be care- ful to distinguish the fund from his own property, and to keep a separate account thereof, or he will be held liable in case of the failure of the banker.^ Where, therefore, a guardian, on the day of the receipt of money belonging to his ward, depos- ited it in his own name in a banking institution then in good credit, but which subsequently failed, and took a certificate thereof, payable to himself or bearer, it was held that the loss fell upon him, although on the day of deposit, by indorsement on the certificate, he declared it to be the property of his ward, and placed in the bank for his benefit.* § 381. But, where special directions are given as to the duties of trustees in the instrument creating the trust, they will override the rules of equity, and form the guide and exposition of the duties of the trustee ; and it is only in cases where a trustee acts without special directions, that he will be bound by the strict rules stated above. § 382. Where a trustee commits a breach of trust wilfully, he is personally liable to make good any injury resulting there- from to his cestui que trust. If, therefore, he sell the trust ' Lovell 0. Minot, 20 Pick. 119. See Kinmonth v. Brigham, 5 Allen, 277 (1862). ' Harvard College v. Amory, 9 Pick. 461. See also Smith v. Smith, 4 Johns. Ch. 281, 445, where Mr. Chancellor Kent seems to adopt the same rule. See also Clark v. Garfield, 8 Allen, 427 (1864). = Massey v. Banner, 4 Madd. 413 ; Freeman v. Fairlie, 3 Meriv. 29. « Jenkins v. Walter, 8 Gill & Johns. 218. 336 TRUSTEES. [chap. TI. property improperly, and receive payment therefor, although he can pass the title to a bond fide purchaser for a valuable consideration, he will be personally responsible ; and if he should afterwards come into possession of the same property, the trust would revive and attach to it again. '^ So, also, the same rule obtains where he misapplies the money, or invests it in improper securities ; ^ and if he make use of it for his private advantage and profit, he will be responsible for all the profit made thereon.^ "Wherever there is a breach of trust, the debt is treated as a simple contract debt, and is only binding upon personal assets of the trustee, even in cases of fraud, unless there be some acknowledgment of the debt, under seal, by the trustee.* But courts of equity, in such cases, will so marshal the debts, that if the personal assets be exhausted by specialty creditors, the simple contract creditors will take their place, and receive satisfaction out of the real estate.^ § 383. Where funds are placed in the hands of a trustee for accumulation, in trust for a minor, to be held until such minor arrives at full age, he would be justified in appropriat- ing the interest, and, if necessary, even the principal, to the maintenance and education of the cestui que trust, where there is no other property adequate for their purposes, and where the minor is of tender age, without living parent, there being no devise over and no third person interested in the fund.® And indeed where a trustee expends the interest or 1 2 Story, Eq. Jur. §'1264 ; Pocock o. Reddington, 5 Ves. 800; Harri- son V. Harrison, 2 Atk. 121 ; Bostock v. Blakeney, 2 Bro. C. C. 653 ; Forrest V. Elwes, 4 Ves. 497 ; Earl Powlet v. Herbert, 1 Ves. Jr. 297 ; Byrchall v. Bradford, Madd. & G. 235. If one who holds an estate in trust, -with power to dispose of it for his own benefit and others', convey it to a third person, acquainted loitli the nature and character of the trust, and without any con- sideration or benefit to the cesiuis que trust, the transaction wiU be deemed fraudulent as to them, and they may follow the estate in the hands of such grantee. Smith v. Bowen, 35 N. Y. 83 (1866) . " Ibid. ; Steele v. Babcock, 1 Hill, N. Y. 527 ; Estate of Evans, 2 Ashm. 470. ' Fawcett u. Whitehouse, 1 Russ. & Myl. 132 ; Docker ». Somes, 2 Myl. & K. 664 ; Wedderburn v. Wedderburn, 4 Myl. & Cr. 41 ; 1 Story, Eq. Jur. § 465 ; Saegar v. Wilson, 4 Watts & Serg. 601. * Bartlett v. Hodgson, 1 T. R. 42 ; Vernon v. Vawdry, 2 Atk. 119 ; 2 Story, Eq. Jur. § 1285, 1286. ^ Cox V. Bateman, 2 Ves. 18. " Petition of Potts, 1 Ashm. 340. CHAP. VI.] TEUSTEES. . 337 principal of an accumulating fund, under circumstances that would induce a chancellor to make a decree for such a use, the court will allow him, in the settlement of his accounts, credit for such expenditures, in like manner as if a previous order had been given. ^ § 384. Where there are several trustees, one is not respon- sible for the acts of the others, of which he has no cognizance, or which he has not co-operated in or connived at.^ And if one of several ti-ustees sign a receipt jointly with the others, this mere fact alone will only render him liable for money which he has received.^ And in this respect the liability of a trustee is distinguished from that of an executor, the latter being ordinarily liable for the money received by his coexecu- tor if lie join with him in a receipt ; * and this distinction in favor of the trustee obtains upon the ground, that, as he is bound to join with his cotrustee in a receipt, the act is not a voluntary one, and ought not to bind him. Yet if a joint re- ceipt be given, and it do not appear from the instrument itself, and cannot be clearly proved how much was received by one trustee, and how. much by the other, each will be charged with the whole, the liability being the same as if the parties had mixed up their personal account with their account as trus- tees.^ Again, if the trustee have improperly suffered his cotrustee to retain property for a long time without proper security ; or if he connive at or assent to any improper act by his cotrustee ; or if he agree with his cotrustee that the latter shall transact exclusively a certain part of the duty ; or if he pay over to his cotrustee any funds which he may receive, — ' Petition of Potts, 1 Ashm. 340. '^ 2 Story, Eq. Jur. § 1280. ' lb. § 1281 ; Fellows v. Mitchell, 1 P. Wins. 83, and Cox's note ; Churcliill V. Hobson, 1 P. Wms. 241 ; Westley v. Clarke, 1 Eden, 360 ; Monell v. Monell, 5 Johns. Ch. 283. ■* 2 Story, Eq. Jur. § 1280a; Sadler v. Hobbs, 2 Bro. C. C. 1.14; Moses V. Levi, 3 Younge & Coll. 859, 397; Chambers v. Minchin, 7 Ves. 197; Brice v. Stokes, 11 Ves. 324; Shipbrook v. Hinchinbrook, 16 Ves. 477. » Fellows V. Mitchell, 1 P. Wms. 83 ; s. c. 2 Vern. 504 ; 2 Storj-, Eq. Jur. § 1282 ; Hart v. Ten Eyck, 2 Johns. Ch. 108 ; Mumford v. Murray, 6 Johns. Ch. 1, 16. VOL I- 22 S3 8 TRUSTEES. [chap. TI. he will not be jointly liable.^ But when a trustee becomes a purchaser at a sale by a cotrustee, it is necessary, in order to render the sale utterly void by reason of the fraudulent acts of the seller, to connect the purchaser with them.^ § 385. It is hardly necessary to add that a party may be personally liable on his contracts, in some cases, although the contract be i« fact in relation to the property of the cestui que trust, and although the defendant add the word " Trustee " to his signature.^ 1 Gill V. Attorney-General, Hardr. 314; Shipbrook v. Hinchinbrook, 16 Ves. 479 ; Sadler v. Hobbs, 2 Bro. C. C. 116 ; Keble v. Tbompson, 3 Bro. C. C. 112 ; Langston v. OUivant, Coop. 33 ; Caffrey v. Darby, 6 Ves. 488 ; Oliver v. Court, 8 Price, 127 ; Mumford v. Murray, 6 Johns. Ch. 14 ; Bate V. Scales, 12 Ves. 402. 2 Beeson v. Beeson, 9 Barr, 279. s See Pumpelly v. Phelps, 40 N. Y. 60 (1869) ; Bush v. Cole, 28 N. T. 261 ; DeWitt v. Walton, 5 Seld. o71. CHAP. VII.] GUARDIAN AND WABD. 839 CHAPTER VII. GUARDIAN AND "WARD. § 386. The same general principles that apply to trustees govern the relation of guardian and ward. During the exist- ence of the relation, a general inability to contract with each other is imposed upon them.^ No sale therefore by the ward to the guardian will be binding, while such relation continues ; and even transactions entered into between them after the connection is dissolved will be closely scrutinized in equity, and unless they be in the most entire good faith, and without any undue influence or advantage taken of the ward, will be set aside ; for the antecedent relationship will, in case of undue advantage, be considered as operating as an improper influence upon the bargain.^ But after the relationship has been entirely dissolved, and the accounts all settled after the coming of age of the ward, and sufficient time has elapsed to place the parties in complete independence of each other, so that they deal with each other as strangers, their transactions will be binding.^ And, although the rule is that a guardian is not entitled to claim any remuneration or compensation for his services beyond his expenses and outlay ; * nor for services before his appointment ; ^ yet, after the complete dissolution of the rela- ' 1 Story, Eq. Jur. § 317 ; Dawson v. Massey, 1 Ball & Beat. 226. " Ibid. ; Dawson v. Massey, 1 Ball & Beat. 229 : Wright v. Proud, 13 Ves. 186 ; Wedderburn v. Wedderburn, 4 Myl. & Cr. 41 ; Hylton v. Hylton, 2 Ves. 548 ; Wood v. Downes, 18 Ves. 126 ; 2 Kent, Comm. lect. 30, p. 230 ; Hatch V. Hatch, 9 Ves. 297. See Archer v. Hudson, 7 Beav. 551 ; Gale v. Wells, 12 Barb. 84; Hayward t>. Ellis, 13 Pick. 272. s Dawson v. Massey, 1 Ball & Beat. 229, 232 ; Aylward v. Kearney, 2 Bali & Beat. 463 ; Hylton v. Hylton, 2 Ves. 647 ; 1 Story, Eq. Jur. § 320. ■" Ante, Trustees. This is the general rule, but it has been altered by statute in some of the States in this country. N. Y. Rev. Stat. vol. ii. p. 153, § 20, 21 ; Mass. Gen. Stat. ch. 109, § 31. 5 Clowes V. Van Antwerp, 4 Barb. 416. 340 GUARDIAN AND WARD. [CHAP. VII. tion, where parties act in entire independence of each other, any bounty or gift by the ward will be good, and will be con- sidered as the performance of a moral duty.^ § 387. In respect to the management of the ward's property in the hands of the guardian, he is a mere trustee.^ Ordina- rily he cannot change the investment of the property of his ward, whatever it may be, and he is bound to exercise ordinary skill and diligence and sagacity in investing the money which comes to his hands. If, therefore, he suffer money to lie idle and unproductive for an unreasonable length of time, or if he mingle it witli his own funds so that the two funds cannot be distinguished, he is liable for simple interest;^ ajid if he have been guilty of gross negligence or misconduct, he will be chargeable under some circumstances with compound interest, the court ordering that rests shall be made in making up his accounts, and the interest at each rest charged as principal.* If, however, he change the investment of property belonging to his ward, in good faith, and for the presumed advantage of the latter, it will be good if it be such as a court of equity ' Lord Eldon, in Hatch v. Hatch, 9 Ves. 297, thus expresses himself on this subject: "There may not be,'' says he, "a more moral act, one that would do more credit to a young man beginning the world, or afford a better omen for the future, than if, a trustee having done his duty, the cestui que trust, taking this into his fair, serious, and well-informed consideration, were to do an act of bounty like this. But the court cannot permit it, except quite satis- fled that the act is of that nature, for the reason often given; and recollect- ing that in discussing whether it is an act of rational consideration, an act of pure volition uninfluenced, that inquiry is so easily baffled in a court of justice, that, instead of the spontaneous act of a friend uninfluenced, it may be the im- pulse of a mind misled by undue kindness, or forced by oppression; and the difSculty of getting property out of the hands of the guardian or trustee thus increased. And, therefore, if the court does not watch these transactions with a jealousy almost invincible, in a great majority of cases, it will lend its assist- ance to fraud, where the connection is not dissolved, the account not settled, every thing remaining pressing upon the mind of the part}- under the care of the guardian or trustee." ^ Sec Moore v. Hazelton, 9 Allen, 104; Hicks v. Chapman, 10 ib. 463. 3 Hughes' Appeal, 53 Pcnn. 500 (1866). Owen v. Peebles, 42 Ala. 338. ^ 2 Kent, Comm. lect. 30, p. 230 ; Wright v. Wright, 2 M'Cord, Ch. 185 ; Ringgold V. Ringgold, 1 Harr. & Gill, 11 ; Raphael v. Boehm, 11 Ves. 92; Schieffelin v. .Stewart, 1 Johns. Ch. 620; Ex parte Baker, 18 Ves. 246. In New Jersey, guardians are chargeable with ten per cent interest, when tliey CHAP. VII.J GUARDIAN AND WARD. 341 would order.^ Again, he is bound to lease the lands of his ward, although he cannot sell them ; but if he lease them for a term extending beyond the age when his ward attains major- ity, the latter may avoid the lease.^ § 388. So, also, he is bound to keep' separate accounts in respect to his ward, and to distinguish all property belonging to the latter from his own, and to deposit money which he held as guardian in the ward's name ; or, in case of loss, he will render himself personally liable therefor .^ § 889. Again, a guardian cannot apply the property of the ward to his own use and profit. And if he attempt to do so, all the profit which he makes will enure to the benefit of his ward.* All his acts relating to the property of his ward are acts of agency, for which he is bound to account. And if he commit waste, or be guilty of wilful misconduct, or be wanting in ordinary diligence, he will be responsible for tlie loss.^ Or if, shortly after the ward attains majority, the guardian pur- chases his estate at a greatly inadequate price, and without are guilty of negligence or fault in not placing their ward's money at inter- est. See also Revett v. Harvey, 1 Sim. & Stu. 602 ; Docker v. Somes, 2 Myl. & K. 665; Boynton v. Dyer, 18 Pick. 1; Vaughan v. Bibb, 46 Ala. 153 (1871) ; Lane v. Mickle, lb. 600. ' 2 Kent, Comm. lect. 80, p. 230; 2 Story, Eq. Jur. § 1357; Inwood V. Twyne, Ambl. 418; Pierson v. Shore, 1 Atk. 480; Ashburton v. Ash- burton, 6 Ves. 6 ; Dorsey v. Gilbert, 11 Gill & Johns. 87. When a guar- dian advances his own money in paj-ment of debts or expenses of his ward, under such circumstances as render that course of proceeding proper, he is entitled to interest on the money so advanced. Hayward v. Ellis, 13 Pick. 272. = Genet v. Tallmadge, 1 Johns. Ch. 661 ; Jones v. Ward, 10 Yerg. 160 ; Roe V. Hodgson, 2 Wils. 129 ; Field v. Schieffelin, 7 Johns. Ch. 164 ; Snook V. Sutton, 5 Halst. 133. ' Stanley's Appeal, 8 Barr, 431 ; Jenkins v. Walter, 8 Gill & Johns. 218 ; Massey v. Banner, 4 Madd. 416 ; Freeman t!. Fairlie, 3 Meriv. 29 ; Wor- rell's Appeal, 9 Barr, 508. * 2 Kent, Comm. lect. 30, p. 229 ; Fawcett v. Whitehouse, 1 Buss. & Myl. 132; ante, Trustees; Petition of Getts, 2 Ashm. 441. See Atkinson V. Atkinson, 8 Allen, 15; Martin v. Raborn, 42 Ala. 648 (1868). » Ibid. ; 1 Story, Eq. Jur. § 90 ; ib. § 1269 ; Belchier v. Parsons, Ambl. 218 ; Crosse v. Smith, 7 East, 246 ; Massey v. Banner, 1 Jac. & Walk. 243 ; Harding v. Lamed, 4 Allen, 426 ; Clark v. Garfield, 8 Allen, 427 ; Richard- son V. Boynton, 12 Allen, 138. 342 GUARDIAN AND WARD. [CHAP. Til. settling an account, the purchaser will be deemed fraudulent.^ But if he use ordinary diligence in the preservation of the property entrusted to him, he will not be liable for losses occasioned by irresistible force or inevitable accident, such as losses by fire or robbery .^ If he receive the note of a third person in payment of a valid debt, he acts at his peril.^ 1 Eberts V. Eberts, 55 Penn. St. 110 (1867). « 2 Kent, Comm. p, 229. But see Jackson's Case, 1 Tuck. 71 (1866), that a guardian may be liable under some circumstances for property taken from him by force. ' Lane v. Mickle, 46 Ala. 600 (1871). CHAP. VIII.] CORPORATIONS. 343 CHAPTER VIII. CORPORATIONS. § 390. Corporations are, in the United States, created by the legislature, and in England by the royal charter and act of Parliament. They may also arise by prescription. There are, in this country, certain corporations, created originally by charter, previous to the revolution, but these have been recog- nized and adopted either impliedly, or by the express provision in the constitution of the States in which they were situated. Corporations are divided into aggregate and sole. A sole cor- poration is composed of one person, who is created a corpora- tion in order to confer certain privileges, such as succession, which in his private capacity he would not possess. Tlie king, bishops, deans, parsons, and vicars, in England, are examples of sole corporations.^ § 391. Aggregate corporations at common law are combina- tions of individuals united into one collective body, under a special name, and invested with certain privileges, immunities, and capacities as a body which do not belong to them as indi- viduals, such as the capacity of succession and perpetuity ; and this class of corporations is almost the only one known in this country. Aggregate corporations are subdivided into public and private. Public corporations being founded by the gov- ernment for political purposes solely (where the whole interest belongs to the government), such as towns, cities, parishes, counties, government banks (where the stock is exclusively owned by the government), and hospitals endowed by govern- ment.^ And private corporations being any corporation of which the foundation is private, however extensive or public its uses may be.^ Insurance, railroad, canal, bridge, and turn- • Co. Litt. 8 6, 250 a ; 1 Black. Comm. 469, 475 ; Dartmoutli College v. Woodward, 4 Wheat. 518. " 2 Kent, Comm. lect. 33, p. 274, 275 ; Dartmouth College v. Woodward, 4 Wheat. 518 ; Philips v. Bury, 2 T. K. 346. ' Ibid. 344 CORPORATIONS. [CHAP. VIII. pike companies, colleges, hospitals, and banks, are therefore private corporations, unless they be created and endowed and owned solely by government.^ So, also, eleemosynary cor- porations, which are corporations instituted for purposes of charity, if founded by private persons, are private corporations, although they be for general and public charity. Nor does the fact, that the funds of a corporation founded by private per- sons have been increased by the bounty of government, thereby render the corporation public.^ § 392. If a corporation be public, its existence is dependent upon the pleasure of the government by which it is created, and it may be modified in its constitution and privileges and powers by the government.^ But, by common law, a private corporation is not subject to the control or interference of the government, unless it violate its charter, or unless the govern- ment, in incorporating it, reserve special powers to interfere.* If, therefore, special powers be not reserved, the government cannot, without the consent of the corporation, alter or amend the charter, or divest the corporation of any of its franchises, or add to them, nor can it increase or diminish the number of trustees, nor remove the members, nor change nor control the administration thereof, nor compel it to receive a new charter.^ A corporation is, of course, subject to the general law of the land, and to the general superintending power of a court of equity, which possesses full jurisdiction in all cases of an abuse of trusts to redress grievances and to suppress frauds.^ ' Ibid. ; U. S. Bank v. Planters' Bank, 9 'Wheat. 907 ; Dartmouth Coll. v. Woodward, 4 Wheat. 618. ' Allen V. MfKeen, 1 Sumner, 299 ; Philips v. Bury, 2 T. R. 346 ; s. c. 1 Ld. Raym. 5, 9. ^ Dartmouth College v. Woodward, 4 Wheat. 518 ; Philips v. Bury, 1 Ld. Raym. 5, 6 ; 2 T. R. 346. * Micou V. Tallassee Bridge Co , 47 Ala. 652 (1872). In Massachu- setts, by statute (Rev. Stat. ch. 44, § 23), it is enacted that every act of incorporation, passed after such statute, shall be subject to amendment, alteration, or repeal, at the pleasure of the legislature, unless there be an express provision to the contrary in the act. See Gen. St. ch. 68, § 41. ' Dartmouth College v. Woodward, 4 Wheat. 518 ; The King v. Pasmore, 3 T. R. 240 ; Ellis v. Marshall, 2 Mass. 269 ; Wales v. Stetson, 2 Mass. 143 ; Wilmington Railroad «. Reed, 13 Wall. 264. " Dartmouth College v. Woodward, 4 Wheat. 518 ; Mayor of CoTentrv CHAP. VIII.] CORPORATIONS. 345 § 393. The incidents of a corporation are stated by Black- stone 1 to be, 1st. To have perpetual su(Jcession ; and therefore all aggregate corporations have a power necessarily implied of electing members in the room of such as go off. 2d.' To sue and be sued, implead or be impleaded, grant or receive by its corporate name, and do all other acts as a natural person may. 3d. To purchase lands, and hold them for the benefit of them- selves and their successors. 4th. To have a common seal. 5th. To make by-laws or private statutes for the government of the corporation." Mr. Chancellor Kent adds a fifth inci- dent ; namely, the power of amotion or removal of members.^ What principally concerns us in the present treatise is their powers and liabilities in respect to their contracts, and these we shall proceed to consider. § 394. A corporation is an artificial person, having a cor- porate name, and having, in general, the same powers to contract as a natural person, unless it be limited by the charter or act of incorporation, in which case it is bound to observe the exact limits prescribed ; ^ or, as sometimes expressed, cor- porations can make no contracts except such as are either expressly provided for in their charter, or such as are neces- sary to carry into effect their corporate powers.* Its con- tracts are generally made through some agent, under the corporate name, who affixes thereto the corporate seal ; and they must be made in the manner prescribed by the charter, if any is given, or they are null and void.^ By the old com- mon law, a corporation could not act or contract by parol, V. Att'y-Gon. 7 Bro. P. C. 235; Att'y-Gen. v. Earl of Clarendon, 17 Ves. 491; 2 Fonbl. Eq. B. 2, pt. 2, ch. 1, § 1, note a; Green ». Rutherfortli, 1 Ves. 462 ; Att'y-Gen. v. Utica Ins. Co., 2 Johns. Ch. 371. ' 1 Black. Comm. 475. ' 2 Kent, Comm. lect. 33, p. 277. See Whittenton Mijls v. Upton, 10 Gray, 584. •■ Dartmouth College v. Woodward, 4 Wheat. 518 ; Allen v. McKeen, 1 Sumner, 299 ; 2 Kent, Comm. lect. 33, p. 289 ; Fleckner v. U. S. Bank, 8 Wheat. 338 ; Bank of Columbia v. Patterson's Administrator, 7 Cranch, 299. ^ Bank of Augusta v. Earle, 13 Peters, 519; Bank of Chillicotte r. Swayne, 8 Ohio, 257; Andrews v. Union Mut. Fire Ins. Co., 37 Me. 256;, Bank of U. S. v. Owens, 2 Peters, 527 ; Riley v. Rochester, 5 Seld. 64. * Head v. Providence Ins. Co., 2 Cranch, 127. 346 CORPORATIONS. [CHAP. Till. but was bound in all cases to use its corporate seal. But this doctrine has been gradually relaxed, until, at the pres- ent day, in England, the rule is subjected to the following exceptions, in which it is not required to act under its seal ; namely : 1st. Where the acts done are of daily ne- cessity, or too insignificant to be worth the trouble of affixing the common seal. 2d. "Where the corporation has a head, as a mayor or a dean, who may give commands. 3d. Where the acts to be done must be done immediately, and it would be impossible to wait for the formation of a common seal. 4th. Where the very object and purpose of the corpora- tion require that it should have the power of acting without the seal, as in the case of a bank, which must have the power to issue bills of exchange and promissory notes without the seal.^ All the exceptions are founded on necessity, or great convenience.^ In America, however, the old common- law rule has worn away altogether, and the doctrine obtains, that a corporation may be bound by the contracts of its agents,^ done within the scope of their authority, whether they be under seal* or by parol, or express or implied, and that in ^ East London Water Works Co. v. Bailey, 4 Bing. 287 ; Church v. Im- perial G. L. Co., 6 Ad. & El. 846 ; Randle v. Deane, 2 Lut. 1497 ; Mayor of Stafford v. Till, 4 Bing. 75 ; Slark v. Highgate Archway Co., 5 Taunt. 792 ; Broughton v. Manchester Water Works, 3 B. &i Al. 12 ; Smith v. Birmingham & S. Gas Light Co., 3 Nev. & Man. 771. The rule seems, however, to have been somewhat relaxed in Beverley v. Lincoln Gas Light Co., 6 A. & El. 829 ; and in Mayor of Ludlow v. Charlton, 6 U. & W. 820 ; Williams v. Chester and Holyhead Ry., 15 Jur. 828; 5 Eng. Law & Eq. 497 ; Digglo v. London and Blackwall Ry., 6 E.xch. 442 ; Clarke v. Cuckfield Union, B. C. C. 81 ; 11 Eng. Law & Eq. 442 ; Denton u. East Anglian Ry. Co., 3 Car. & Kir. 17 ; 2 Kent, Comm. p. 291, note; Australian Royal, &c., Co. V. Marzefti, 11 Exch. 228 ; Henderson v. Australian Royal, etc., Co., 5 El. & B. 409 ; 32 Eng. Law & Eq. 1(17 ; Copper Miners' Co. v. Fox, 3 ib. 420; 16 Q. B. 229 ; Renter v. Electric Tel. Co., 6 El. & B. 346 ; Kicholson v. Bradfield Union, Law R. 1 Q. B. 620 (186G). See Mayor of Kidderminster V. Hardwick, L. R. 9 Ex. 13 (1873), where a seal was held necessary. ^ See London Dock Co. v. Sinnott, 8 El. & B. 347 (1867), in which a seal was held necessary as to executory contracts. ^ The officers of a municipality are its proper agents for executing con- tracts ; the vote of the inhabitants alone cannot constitute a contract. Union Pacific R. Co. V. Davis County, 6 Kans. 256 (1870). ^ A corporation may contract in writing, under seal, although the usual OHAP. VIII.] CORPOBATIONS. 347 respect to the appointment of an agent, or to his acts and contracts, it stands upon the same footing as a natural person.^ It is not, therefore, necessary that there should be a vote or a deed or any writing in order to render a corporation liable on a contract on which a private person would be liable.^ Nor is it necessary that the whole board of directors of a bank, for instance, should be consulted, or a vote taken upon every trifling detail of the business.^ It is, however, a general rule, that all contracts made in behalf of a corporation should be made in their corporate name, and if an agent undertake to contract without using the corporate name, he renders himself liable to the same extent as if he represented an individual.* But a mere misnomer will not invalidate a grant to or a con- tract by a corporation, if it can be clearly shown that the instrument was made by or to the corporation.^ A corporation or company may do business under any name ; and a note signed " Zelotes Terry, Trustee," may bind a community of Shakers of which he is trustee.^ § 395. Yet the non-user of the corporate name by an agent corporate seal be not used, but only such a seal as is generally used by a private individual. Eureka Co. v. Bailey Co., 11 Wall.' 488 (1870). ' Bank of Columbia v. Patterson's Administrator, 7 Cranch, 299 ; United States Bank v. Dandridge, 12 Wheat. 69, 70; Fleekner v. The U. S. Bank, 8 Wheat. 338 ; Story on Agency, § 53 ; Kelley v. Mayor of Brooklyn, 4 Hill, 263 ; 2 Kent. Comm. lect. 33, p. 291, and cases cited; Bank of the Metrop- olis V. Guttschlick, 14 Peters, 19; Hayden v. Middlesex Turnpike Co., 10 Mass. 397 ; The Canal Bridge v. Gordon, 1 Pick. 297 ; Dunn v. Rector of St. Andrew's Church, 14 Johns. 118 ; Essex Turnpike Co. v. Collins, 8 Mass. 299 ; Conant v. Bellows Falls Canal Co., 29 Vt. 263 (1857) ; Angell & Ames on Corporations, ch. 9. ' Ibid. See also Mill Dam Foundery v. Hovey, 21 Pick. 417. ' Bradstreet v. Bank of Royalton, 42 Vt. 128 (1869). See Waits v. Windham Mining Co., 37 Vt. 608 (1865) ; Foot v. Rutland & W. R. R. Co., 32 Vt. 633 (1860) ; Bank of Middlebury v. Rutland & W. R.R. Co., 30 Vt. 159 (1858). * Ibid. See also Mill Dam Foundery v. Hovey, 21 Pick. 417 ; Brinley V. Mann, 2 Cush. 337. ' 2 Kent, Comm. lect. 33, p. 292 ; Anon., 1 Leon. 163 ; 1 Kyd on Corp. 234, 236, 252 ; Case of the Chancellor of Oxford, 10 Co. 57 6 ; Hager's Town Turnpike Road Co. v. Creeger, 6 Harr. & Johns. 122 ; N. Y. Afri- can Soc. V. Varick, 13 Johns. 38 ; First Parish in Sutton v. Cole, 3 Pick. 232. ' Pease v. Pease, 35 Conn. 131 (1868), containing a review of the cases. 348 CORPORATIONS. [CHAP. Till. in signing a contract only operates, at the present time, as primd fade evidence in favor of the corporation ; and the presumption which it thus created may be rebutted by evi- dence of mistake or surprise; or, indeed, by any evidence whicli would bind a principal, upon the contract of his agent.^ ' In Melledge v. Boston Iron Co., 5 Cush. 173, Mr. Chief Justice Shaw said, "The second prayer for instructions was: That the defendants' corporate name not appearing on the notes, and the notes on their face not disclosing any agcnc}-, Ilurace Gray & Co., and not the corporation, are bound by these notes. This instruction was given, as tlie defendants insist, with Euch qualiiications and restrictions as talce away the whole legal effect and operation of it. This is true, and it leads to the other principal question in the present case. It is undoubtedly true that the notes were not signed in the defendants' regular corporate name, by which they were incorporated ; that the notes on the face of them did not disclose any agency ; and that they were signed by Horace Gray & Co., who have a separate firm and house of trade of that name. If it wei-e an absolute and uncpialified rule of law, that upon these facts Horace Gray & Co., and not the corporation, were bound, and the judgi' was bound so to instruct, of course that would put an end to the question whether these notes could be the notes of the defendants. The court did give the instructions prayed for, but with this qualification, Jliat this ruling was not to be understood as preventing the plaintiff from maintaining his action, if the.jury were satisfied, — 1st, that these notes were in fact the notes of the Boston Iron Company, executed under a name adopted and sanctioned by them as indicative of their contracts ; or, 2d, that the plaintiff received these notes upon a legal demand against the defendants, under misapprehension of the facts, as to the matter that Horace Gray & Co. and the Boston Iron Company were not the same, the plaintiff acting under the belief that they were, and such belief being induced by the acts of the defendants or their legal agents. The effect of the instraetion thus given, we think, was, that the facts mentioned in the prayer for instructions, namely, the corporate name not appearing on the notes, and the notes not disclosing any agency, but signed Horace Gray & Co., constituted ^rjnidyaci'e evidence, that those were the notes of Horace Gray & Co. and not of the Boston Iron Company, and standing alone would warrant and require the direction that Gray & Co. and not the Boston Iron Companj- were bound by them ; but that this evidence might be rebutted, and controlled by proof aliunde that they were in fact the notes of the Boston Iron Company, because cxeiuted under a name adopted and sanctioned by them as indicative of their contracts, and it may be added, given in satisfaction of their debt. The court are of opinion that this direction was correct. If by any possible proof the presunqition arising from the face of the note, from the form of the execution, from the corporate name of the company not being used, and the use of the name of a mercan- tile firm, could be rebutted, then the evidence was primd facie, and not conclusive. It seems to be now well settled, in this Commonwealth, since CHAP. VIII.] CORPORATIONS. 349 Thus, where an agent made a promissory note, commencing " I promise to pay," and signed it with his own name, adding the great multiplication of corporations, extending to almost all the concerns of business, that trading corporations, whose dealings embrace all trans- actions from the largest to the minutest, and affect almost every individual in the comaiunity, are affected like private persons with obligations arising from implications of law, and from equitable duties which imply obligations ; with constructive notice, implied assent, tacit acquiescence, ratifications from acts and from silence, and from their acting upon contracts made by those professing to be their agents, and generally by those legal and equitable considerations which affect the rights of natural persons. We are not deal- ing here with the weight, force, or effect of the evidence, but only whether any evidence aliunde could control the presumption arising from the note ; and we think there was evidence competent to go to the jury, from which they might infer that the defendants had so adopted a name, other than their corporate name, for the special purpose of giving notes, as to be bound by it when used by a general agent, in liquidation of their own debts. This results from a series of decisions both in England and in this country, but particularly in America, quite too numerous to be reviewed here. I will allude to a few. In the Supreme Court of the United States, in the case of Bank of Columbia v. Patterson, 7 Cranch, 299, it was held that a corporation might be bound both by express and implied provisions, and that by acting on the contracts made by their agents, they adopted and ratified them. In the case of United States Bank v. Dandridge, 12 Wheat. 64, the subject was considered at great length, and it was held that a corporation is bound by the same presumptions which would affect a natural person ; that the authority of agents ma)' be proved from their acts, and that corporations may be affecteil by parol proof and presumptions of fact in the same manner as natural persons. The case is an instructive one, and though the Chief Justice dissented, it has been generally acquiesced in as sound law. In Massachusetts, in the case of Canal Bridge v. Gordon, 1 Pick. 2J7, it was held that a corporation could be bound without vote or deed by implication from corporate acts. This pro- ceeded on the broad ground that corporations can be bound by implication as well as individuals. In Minot v. Curtis, 7 Mass. 444, the court say : ' We know not why corporations may »ot be known by several names, as well as individuals.' As that case arose on pleading, the court further say that if this point had been before the jury as a question of fact, the defendants would have been bound to prove the identity of the parish thus acting under dif- ferent names. This, of course, could be done by any proof tending to estab- lish such identity. The case of Medway Cotton Man. Co. v. Adams, 10 Mass. 360, is in point with the present, except that there the corporation was plaintiff, whereas here it is defendant. The averment was, that the defendants, by their promissory note, &c., promised the said Medway Cotton Manufacturing Company, by the name of Richardson, Metcalf, & Co. That came before the court on demurrer, and the declaration was held good. The opinion was 350 CORPORATIONS. [CHAP. VIII. " agent Bellamy Man. Co.," and at the same time executed a mortgage in the name of the company, to secure the payment given by Sewall, J., "who states the principle on which it was founded. He says, it was a question of identity, which was sufficiently there stated by way of averment, to be good on demurrer ; but had it been traversed or tried, would, as he states, depend on an inquiry of facts, which might or rtight not be proved, and might be provable by evidence extraneous to the note. The same point was subsequently decided in Commercial Bank u. French, 21 Pick. 486. Without going more at large into authori- ties that a corporation may have sevcial names, I will cite the third edition of Angell and Ames on Corp. 206 (4th ed. § 234), which lays down the rule that the misnomer of a corporation in a grant, obliga- tion, or other written contract, does not prevent a recovery thereon by or against the corporation in its true name, provided its identity with that intended by the parties to the instrument be averred in pleading, and apparent in proof; and the authors cite many cases in support of the rule thus stated. The court are therefore satisfied that it was competent for the plaintiff, if he could, to show by evidence that the notes were in fact the notes of the defendants, given in a name adopted by them to authenticate their con- tracts, and therefore that the modification prescribed to the rule asked for by the defendants and given, was correct, and adapted to the case then in proof. In this connection several authorities were cited to the point, that when a creditor knowing that one acts as agent for a principal in making pur- chases, takes the note of the agent, without that of the principal, he waives the responsibility of the principal, and gives credit to the agent. This prin- ciple, though taken with some ijualifications (Thomas v. Davenport, 9 B. & C. 78. In this case Littledale, J., says, — ' the genuine principle is, that the seller shall have his remedy against the principal rather than against any other person ') , is no doubt correct, but not applicable to the present case. The ground of the plaintiff is, not after taking the note of the a^ent to revert back to the principal, but to show that the note taken was in fact and in legal effect the note of the defendants. It was urged in this cui mection that the court should have given an opinion on the questions of law stated in this prayer for instructions, and upon the facts there stated ; but as we under^tand it, these facts were only a part of the evidence ; there was much other evidence which was competent, such as the fact, that the company had no meetings ex- cept a formal annual meeting ; that there was no vote appointing Horace Gray & Co. agents, or appointing any agent, or prescribing the powers of agents ; that a large amount of business was done by and in the name of the Boston Iron Co., in the way of purchases, sales, and other dealings, which was done wholly by Horace Gray & Co. ; that tlsese were open and notorious, from which constructive notice to the company might be presumed, — from all which a jury might infer the aulhorit)- which is the subject of inquiry. If so, the judge could not be called upon to express an opinion on a question of law, arising from a part of the evidence ; the only question is, whether the iud:;e was cor- CHAP, Tin.] CORPORATIONS. 351 of it, it was held that the note would bind the company as their note, if the agent had- authority at the time to execute it, rect in submitting the evidence to the jury ; and he was so, if there was com- petent evidence proper for their consideration, and from which they might infer the fact sought to be proved. Shaw v. Woodcock, 7 B. & C. 73. Under this same objection also, the question was discussed, whether a cor- poration can adopt the name of a mercantile firm, and bind themselves by notes given iii its name. It may not be a wise aiTangement, but we are not prepared to say they cannot do it. Suppose the case, which actually occurred, as appears in the case of Goddard v. Pratt, 16 Pick. 412, that a manufacturing company pass a vote or by-law, providing that all their mercantile business shall be done, and contracts made in the name of a partnership, whose stock they have taken, and to whose business they have succeeded. It may be wise in such a case, in order to keep up an established, extensive, and valuable cor- respondence, and retain the run of custom and good-will of an old-established firm. That case was the reverse of the present, and the struggle there was to charge the firm, who defended on the ground that their firm name designated the obligations of the company, and not their own, and the case turned on the question whether the plaintiff, when he dealt with them, knew of the dis- solution of the old firm ; if he djd not, then, by a well-known rule of the law of partnership, the firm were bound to him, not having given notice of their dissolution. Had the point in that case been whether the corporation were bound, we can have no doubt they would have been held bound by their vote, for notes made in the name designated. It was further relied on by the defendants, that it was not the intent of Horace Gray & Co. to give the note of the Boston Iron Co., even if they had authority so to do ; but further, that there was no evidence that they had such authority. In regard to the first, it depended wholly upon the weight or sufficiency of the evidence, which, for reasons already given, we do not go into. As to the authority, it requires some further consideration. Undoubtedly to charge a party by the act of an agent, and corporations can be charged in no other way, it is incumbent on the plaintiff to prove the authority of the agent. But how is such au- thority to be proved ? No doubt the vote of the corporation entered on their records or minutes is the regular and proper evidence ; but suppose they pass no votes, or keep no records, or refuse to produce them, and yet, de fado, transact a large amount of business. If the authority of agents could be proved in no other way than by the production of such a vote, those who deal with them would have but a precarious security for their rights. But we think that it is estafblished by the cases cited, and many others which could be produced, that having proved the constitution of a corporation by the act of incorporation, and the acting under it by the persons incorporated and their associates, the powers of agents as well as any other fact neces- sary to charge them, may be proved by corporate acts, and by the acts of persons professing to be their agents and servants, and the tacit acquiescence of the corporation. This was decided in the case of- Narragansett Bank v. 352 CORPORATIONS. [CHAP. VIII. or if the transaction was subsequently ratified.^ So, also, where a corporation and a firm have the same name, if the Atlantic Silk Co., and Westcott v. Same, 3 Met. 282. In these cases the defendants had refused, on notice, to produce their records. But so far as third persons are concerned, the production of books which contain no entry on the subject, is the same as if they had refused, on notice, to produce their books. Corporations, like natural persons, may be bound by such acts, as proving either a previous authority or subsequent ratification. When a cor- poration consists of a small number of persons, like a partnership, it may transact all its business by conversation, without formal votes, and it would be a violation of the plainest principles of justice to hold those who deal with them to prove all their acts by written votes, which they do not keep or do not produce. And inasmuch as the powers of agents may be proved by extraneous evidence, the extent and limitation of their powers may be proved in the same manner. And when general and very large powers are exer- cised by an agent or firm apparently intrusted with the entire business of the corporation, and no vote appears on the production of their records, prescribing or limiting their powers, the corporation are as well bound by their declarations and statements, upon the subject of the dealings of the companj- and whilst acting therein, as by their acts and contracts. Such declarations and staleinents of agents, made in connection with their deal- ings, are res ycalir. The next objection is to the quahfication annexed by the judge to the sixth instruction prayed for and given. The objection is that it assumed a hypothetical case, of which there was no evidence. A^'lu'fher there was any evidence we cannot judge, — but if there was ifone, it was a mere illustration and explanation of the rule of law, which could not mislead the jury. Dole v. Thurlow, 12 Met. 1.57. The next question turns upon the eiiihth request for instructions. The prayer is as follows : The juilge is requesteil to iiistrurt the jury, 'that the acts of Horace Gray & Co., and the knowledge of Horace Gray & Co., are not the acts and knowledge of the defendants, except in those matters which were within the scope of their authority as agents ; and that if they, without authority from the de- fendants, held out to the public that the names of Horace Gray & Co. would bind the defendants, the defendants were not bound by the knowledge of Horace Gray & Co. that they had so held themselves out, and it was necessary to bring home knowledge to the defendants in some other way than by showing knowledge by Horace Gray & Co ' This in^truction was given, and the position then taken and the principles of law therein stated declared to be correct, but accompanied with the further instruction, that if Horace Gray and Horace Gray & Co. wei-e the general and only agents of the defendants, vested with full powers to act in their behalf, in all matters of purchase and sale, and in giving notes, and in all the business of the de- ' Despatch Line of Packets v. Bellamy Manuf. Co., 12 N. H. 205. See also Flint v. Clinton Co., 12 N. H. 430; HaJ^va^d v. Pilgrim Society, 21 Pick. 270. CHAP. VIII.] CORPORATIONS. 353 party contracting with the corporation suppose the name to be used as the corporate name, and such supposition be in- duced by tlie corporation, it would be liable.^ Indeed, gener- ally, the law of agency applying to private individuals applies with equal force to corporations, and they are equally affected with implied obligations, such as constructive notice, implied assent, tacit acquiescence, and implied ratifications, in respect to contracts made by persons held out by them as their agents. § 896. Again, a corporation may sue and be sued for its acts, or upon its contracts, in like manner as if it were a nat- ural person. It may also sue and be sued by its own members, and may contract with them in the same manner as with any strangers.^ So, also, corporations are liable to a special action fendants ; and the concerns of the Boston Iron Company, in the way of business, were wholly transacted by them, and no others, and that such had been the case for a series of years, and this had knowingly been permitted by the defendants, then it was competent for the jury to find that the de- fendants had notice of these acts of using the signature of Horace Gray & Co. for the Boston Iron Company, as promisors of notes, and to infer that they had sanctioned them. Whether these acts were sufficiently fre- quent and of such a character as to satisfy the jury that Horace Gray & Co. did so conduct, &c., was wholly left to the jury, under the various instruc- tions given in the case. The court are of opinion that this instruction, as given to the jury by the presiding judge, with this qualification and com- mentary on the evidence, was correct. The request for insti-uctions as- sumed a ^tate of facts, which did not constitute the whole case. If the request was founded oil the ground that the agents had no authority to use any other name than the corporate name of the defendants, in giving notes, and that it could not be within the scope of their authority to do so, without express authority or without a vote or the production of written authority, then, for reasons already given, we think it was not correct in point of law, and ought not to have been given; but if such authority, like all other authority, could be proved by evidence aliunde, then the only question was, what was their authority, what were its extent and limits, and whether the acts and declarations in question were within its jBcope ; and then it seems to us that it was proper, and the court was bound, to add the qualifications stated, and to submit the question to the jury." ' Despatch Line of Packets v. Bellamy Manuf. Co., 12 N. H. 205. See also Flint v. Clinton Co., 12 N. H. 430 ; Hayward v. Pilgrim Society, 21 Pick. 270. ' Dartmouth College v. Woodward, 4 Wheat. 518 ; 1 Kyd on Corpora- tions, 13, 69, 189 ; 1 Black. Comm. 469, 475 ; Allen v. McKeen, 1 Sumner, 299. „^. , 23 354 CORPORATIONS. [CHAP. TITI. on the case for neglect and breaches of duty, — and to actions of trespass and trover for damages occasioned by the trespasses and torts committed by their agents, under their authority. ^ § 397. In all cases, corporate powers are to be strictly con- strued, and not to be extended beyond the clear intention of the charter ;^ and all powers must be exercised in the manner and form directed in the charter.^ So, also, the acts of tlie agents of corporations are strictly construed.* But though a corporation exceed its powers, still, if its act is not illegal and is presumably within its powers, and for its benefit, it will be bound in favor of one who had no notice that it had exceeded its authority, no prejudice being proved.^ The primd facie power of a corporation to contract cannot be insisted upon as ' Yarboroa;ih r. The Bank of England, 16 East, 6; Smith v. Birmingham & S. Gas Light Co., 1 Ad. & El. 526: Townsend v. Susquehannah Turn- pike, 6 Johns. 90 ; 2 Kent, Comm. lect. 33, p. 284 ; Thayer c. Boston, 19 Piek. 516; Baker v. Boston, 12 Piek. 184; Eastern Counties Railways. Broom, 6 Exch. 314 ; 2 Eng. Law & Eq. 406 ; Watson v. Bennett, 12 Barb. 196 ; Goodspeed v. East Haddam Bank, 22 Conn. 530. 2 See Governor & Co. of Copper Miners v. Fox, 16 Q. B. 229 ; 3 Eng. Law & Eq. 420, and Bennett's note ; Hood v. New York & New Haven Railroad Co.. 22 Conn. .002; Stewart's Appeal, 56 Penn. St. 413 (1867). ' Bank of Augusta i\ Earle, 13 Peters, 587 ; Head v. Providence Ins. Co., 2 Cranch, 167; Bank of U. S. v. Dandridge, 12 Wheat, 68; Runyan V. Coster, 14 Peters, 122 ; First Parish in Sutton v. Cole, 3 Pick. 2:52 ; The People V. Utica Ins. Co., 15 Johns. 358; Sharp v. Johnson, 4 Hill, 92; Dublin Corp. t. Attorney-General, 9 Bligh (n. .s.), 395. 4 Mayor, &e., of Colehester v. Lowten, 1 Ves. & B. 245; Case of St. Mary's Church, 7 S. & R. 530; The King v. Bagshaw, 7 T. R. 363; Vau- wiokle V. Camden & Amboy R. R. Co., 2 Green (X. J.), 162. '■ Royal British Bank v. Turquand, 5 El. & B. 248; 6 ib. 327 (1856). See Taylor v. Chichester, &c., Ry. Co., Law R. 2 Exch. 3.56 (1867) ; Brad- street V. Bank of Royalton, 42 Vt. 128 (1869). It is on this ground that corporation carriers are held liable for negligence in carrying passengers beyond their own corporate line, although at the time engaged in business strictly vlira vires. See Buffett !). Troy & Boston Railroad Co., 40 N. Y. 168 (1869) ; South Wales Railway Co. p. Redmond, 10 C. B. (n. s.) 675 (isfil) ; Wilby i: Wett Cornwall Railway Co., 2 H. & N. 703; Bissell i>. I\Iichi,uan Southern Railroad Co., 22 N. Y. 2oH ; Hart v. Rensselaer & Saratoga Railrnad, 4 Seld. 37; Gary v. Cleveland & Toledo Railroad Co., 29 Barb. 35. But see Taylor v. Chichester, &c., Railway Co., Law R. 2 E.xch. 3.36. CHAP. YIII.J CORPORATIONS. 855 to matters concerning which it is expressly, or by reasonable inference impliedly, prohibited from contracting.^ § 398. Whether a municipal corporation is bound to pay bonds issued for the raising of volunteers for the army, or for the furnisliing of substitutes for persons drafted, depends on tlie question of its authority.^ Where the citizens of a town which was unable to procure volunteers, under a certain bounty act, voluntarily advanced money to pay extra bounties, with the understanding that the money was to be refunded on the passage of a law of authorization, it was held that an act autliorixing taxation to pay all " loans made in good faith," was sufficient authority for the repayment of the money ad- vanced.^ But the corporation is under no legal or moral obli- gation to pay such bonds, in the absence of authority.* § 399. Corporations may be in some cases estopped from denying that their notes, bonds, or other assignable instru- ments, were beyond their corporate powers, when the same contain recitals of their being valid and in conformity to their acts, especially when the same are held by an innocent in- dorsee or purchaser.^ So the negotiable notes of a manufac- turing corporation, though given by its officers for their own accommodation, are good in the hands of a bond fide holder for value, before maturity, and without notice of the nature of the consideration.^ ' Shrewsbury & B. Ry. Co. v. Northwestern Ry. Co., 6 H. L. Cas. 113 (1857). See Ernest v. NichoUs, ib. 401 (1857). ^ Susquenanna Depot v. Barry, 61 Penn. St. 317 (1869) ; Washington County V. Berwick, 66 Penn. St. 474 (1867) ; Weister v. Hade, 52 Penn. St. 474 (1866). ^ Weister v. Hade, supra. ■* Susquehanna Depot v. Barry, supra. '■ Webb V. Heme Bay Commissioners, Law R. 5 Q. B. 642 (1870). And see Hill v. Manchester Water Works, 2 B. & Ad. 544 ; Horton v. Westminster Commissioners, 7 Exch. 780 ; Re Bahia & San Francisco Rail- way Co., Law R. 3 Q. B. 584; Freeman v. Cooke, 2 Exch. 654. See, however. Chambers v. Manchester & Milford Railway Co., 5 B. & S. 588, though in this case the bond was an absolute nullity, and it was in the hands of the original obligee. See, further, Stevens v. Gourley, 7 C. B. (n. s.) 99. « Bird V. Daggett, 97 Mass. 494; Monument National Bank v. Globe Works, 101 Mass. 57 (1869) ; Farmers' «& Mechanics' Bank v. Empire Stone Dressing Co., 5 Bosw. 275. 356 CORPORATIONS. [CHAP. VIII. § 400. Officers of a corporation, pmwt^/aci'e, cannot recover for services on a quantum meruit; they are entitled to com- pensation only by express contract.-^ Nor can a director recover for services, who was elected to serve without compensation, though a subsequent resolution was passed to pay him.^ And the rule is as applicable to presidents and treasurers or other officers as to directors.^ So where the president of a corpora- tion had been serving under a salary fixed by vote, it was held that this vote did not extend to his successor, so that he could claim the same salary by written agreement.* 1 Kilpatrick v. Penrose Bridge Co., 49 Penn. St. 118 (1865). Ordina- rily they are presumed to render their services gratuitously. 2 Loan Association i>. Stonemetz, 29 Penn. St. 534 (1858). ^ Kilpatrick v. Penrose Bridge Co., supra. ^ Commonwealth Ins. Co. v. Crane, 6 Met. 64. See also Dunston v. Imperial Gas Co., 3 B. & Ad. 125 ; Bradford v. Kimberly, 3 Johns. Ch. 431, explained in Kilpatrick v. Penrose Bridge Co., supra. CHAP. IX.] AUCTIONEERS. 357 CHAPTER IX. AUCTIONEERS. § 401. An auctioneer differs from a broker in two respects; in the first place, in the exercise of his functions as auctioneer, he cannot buy either for himself, or for a third person ; and in the second place, he cannot sell at private sale ; while a broker can both buy and sell at private sale.^ An auctioneer is solely the agent of the seller of the goods until the sale is effected, and then he becomes the agent of the buyer for certain pur- poses.2 As agent for the seller, he has, therefore, a claim for compensation, which is ordinarily in the form of a commission for services, and is determined, in the absence of any special agreement, by the common usage ; ^ and also a right to claim a reimbursement for all expenses and advances, properly in- curred by him in the course of his agency.* He is, also, enti- tled to reimbursement from his principal for damages resulting from the agency, unless he be guilty of improper and unau- thorized conduct in relation thereto.^ And for such commis- 1 Story on Agency, § 27 ; Wilkes v. Ellis, 2 H. Bl. 555 ; Daniel v. Adams, Ambl. 495 ; Barker v. Marine Ins. Co., 2 Mason, 369. 2 Williams v. Millington, 1 H. Bl. 81, 84; Girard v. Taggart, 5 S. & E. 19, 27 ; Emmerson v. Heelis, 2 Taunt. 38, 48 ; Kemeys v. Proctor, 1 Jac. & Walk. 350; Sweeting v. Turner, L. R. 7 Q. B. 310 (1872). 8 Bower v. Jones, 8 Bing. 65 ; Coles v. Trecothick, 9 Ves. 243 ; Maltby ». Christie, 1 Esp. 340; Eicke v. Meyer, 3 Camp. 412 ; Cohen v. Paget, 4 Camp. 96; Roberts v. Jackson, 2 Stark. 225; Chapman v. De Tastet, 2 Stark. 294; Robinson v. New York Ins. Co., 2 Caines, 857; Story on Agency, § 326 et seq. ; Waldo v. Martin, 4 B. & C. 319. * Story on Agency, § 335-389 ; Powell v. Trustees of Newburgh, 19 Johns. 284 ; Capp v. Topham, 6 East, 892 ; Hardacre v. Stewart, 5 Esp 103 ; D'Arcy ». Lyle, 5 Binn. 441 ; Rogers v. Kneeland, 10 Wend. 218. 5 Adamson v. Jarvis, 4 Bing. 66 ; Allaire v. Ouland, 2 Johns. Cas. 54; 358 AUCTIONEERS. [CHAP. IX. sion and expenses he has a lien on the goods to be sold, and on the proceeds thereof.^ But before he can claim compen- sation, he must have faithfully performed all his duty ; unless, by usage in the particular transaction, a proportional remune- ration is allowed for a partial performance.^ § 402. He is also, ordinarily, entitled to sue either party, while he has a beneficial interest. He may, therefore, person- ally sue his principal for damages, or expenses, or for his com- mission ; or he may, as representative of the seller, sue the buyer for the price of the goods, — even although the goods be sold at the house of the principal, and be known to be his property, — or even if he declare the name of the principal at the sale.2 But if the goods, which ho has sold, do not belong to the vendor, and are claimed by the real owner, he cannot maintain an action against the buyer.* § 403. Again, he has a right to prescribe the rules of bid- ding, and the terms of sale ; and his verbal declarations at the sale, unless they contravene the printed regulations, or the written particulars of the sale, are admissiljle against the principal, and binding on him, as incident to his authority to sell ; Ijut if they contradict the printed conditions, they are not binding.^ Coventry v. Barton, 17 Johns. 142 ; Hardacre v. Stewart, 5 Esp. 103 ; Capp V. Topham, 6 East, 392 ; Jones v. Nanney, 13 Price, 7G ; Denew v. Daverell, 3 Camp. 451. • WilUams V. Mfflington, 1 H. Bl. 81 ; Girard v. Taggart, 5 S. & R. 19, 27. ' Haniond v. Holiday, 1 C. & P. 384; Broad v. Thomas, 7 Bing. 99; Dalton V. Irvin, 4 C. & P. 289 ; Reed v. Rann, 10 B. & C. 438. ^ AVilliams v. Millington, 1 H. Bl. 81 ; Atltyns v. Amber, 2 Esp. 493 ; Robinson v. Rutter, 4 El. & B. 954. See Thompson v. Kully, 101 Mass. 291. ■* Dickenson v. Naul, 4 B. & Ad. 038 ; 1 Nev. & Man. 721. So where, by agreement between the owner and purchaser, the latter was to bid off such goods as he chose, and credit the former on a. debt, the auctioneer, having delivered the goods to the purchaser, and having paid his principal, was held not entitled to recover the sum from the purchaser, payment having been made to the principal after notice of the agreement mentioned. Grice v. Kenrick, Law R. 5 Q. B. 840 (1870). ' Gunnis v. Erhart, 1 H. Bl. 289 ; Howard v. Braithwaite, 1 Ves. & B. 209, 210 ; Powell v. Edmunds, 12 East, 6 ; Slark v. Highgate Archway Co., 6 Taunt. 792. But whether an auctioneer has a right to warrant without CHAP. IX.] AUCTIONEERS. 859 § 404. Where there are printed conditions of sale, if they be brought to the knowledge of the vendee, — as if they be posted upon the, auctioneer's box, or in the auction-room, and be seen by him, or be specially referred to in the sale itself, — or, indeed, be made known to him in any way, — they will form a part of the terms of the contract, and will be binding upon the pai'ties.^ As where, at a horse repository, there were printed conditions posted up, setting forth that no warranty of soundness would remain in force beyond twelve o'clock noon of the next day after sale ; it was held, that the buyer of a horse was bound thereby, although no special reference was made thereto in the sale itself; inasmuch as he knew of the regulations ; and, that, as he did not return the horse within the specified time, he could not recover on the war- ranty.^ So, also, where the conditions of a sale by auction were, that the goods should be cleared away at the expense of the buyer, in fourteen days, and the price should be paid on or before delivery ; and that, if any lots remained uncleared, after the time allowed, the deposit money should be forfeited, the goods resold, and the loss on the resale made good by the purchaser ; and the broker gave a bought note, which allowed fourteen days for receiving and delivery ; it was held, by the Court of Common Pleas, that only the buyer had fourteen days to take away the goods, but that the seller was bound to de- liver them immediately.^ The printed conditions, under which a sale by auction proceeds, cannot be varied or contradicted by parol evidence of verbal statements, made by the auctioneer at the time of the sale, except for the purpose of proving fraud.* Where, however, any thing is done by one party, with special instruction seems doubtful. See the above cases, and The Monte AUegre, 9 Wheat. 645. ' Mesnard v. Aldridge, 3 Esp. 271 ; Bywater v. Richardson, 1 Ad. & El. 508 : Baglehole v. Walters, 3 Camp. 154; Eagleton v. East Ind. Co., 3 Bos. & Pul. 55. As to the effect of failing to offer for sale goods advertised to be sold by auction, see Spencer v. Harding, L. R. 5 C. P. 561 ; Harris v. Nickerson, L. R. 8 Q. B. 286 (1873). " Bywater v. Richardson, 1 Ad. & El. 608. See, to the same point. Atkins V. Howe, 18 Pick. 16. ' Hagedorn v. Laing, 6 Taunt. 162. * Shelton v. Livius, 2 Cr. & J. 411; Gunnis v. Erhart, 1 H. Bl. 289; Powell ». Edmunds, 12 East, 6 ; Slark v. Highgate Archway Co., 6 Taunt. 792 ; Bradshaw v. Bennett, 6 C. & P. 48. 360 AUCTIONEERS. [CHAP. IX. the permission of the other, in contravention of the conditions of sale, it would geem to amount to a waiver thereof,^ and of course, if there be any special agreement, varying the con- ditions, the parties would not be bound by them.^ Where, therefore, a party, to whom money was due from the owner of goods sold by auction, agreed with the owner, before the auc- tion, that the goods, which he might purchase, should be set -against the debt, and became the purchaser of the goods, and was entered as such by the auctioneer ; it was held, that he was not bound by the printed conditions of sale, which specified that purchasers should pay a part of the price at the time of the sale, and the rest on delivery.^ § 405. In respect to what constitutes an entire contract of sale by auction, the same rules apply as to a common contract of sale. If the consideration be entire, and not distinctly sus- ceptible of apportionment by the very terms of the contract, the contract is entire, and not otherwise.* Where, therefore, several lots of goods, or several things are put up as distinct things, and are knocked down to the purchaser for distinct sums, for which his name is marked in the catalogue against each lot or thing by the. auctioneer, there is a distinct contract as to each thing.^ But if they all be marked down to him at one sum, or as one lot, the contract is entire.^ § 406. Again, an auctioneer has a special property in the goods sold, and may sue the purchaser for the price thereof, either in his own name, or in the name of his principal ; ' un- less he make the memorandum of the terms of sale as agent, in which case he must, as we have seen, sue in his principal's name, as agent, and not in his own as principal.^ Although, ' Ex parte Gwynnc, 12 Ves. 379. " Bartlett v. Purnell, 4 Ad. & El. 792. ' Ibid. ■> Ante, cli. 2. ' Roots V. Lord Dormer, 4 B. & Ad. 77 ; Emmerson v. Heelis, 2 Taunt. 88 ; Baldey v. Parker, 2 B. & C. 44 ; .James v. Shore, 1 Stark. 426. 8 Dykes v. Blake, 4 Bing. N. O. 463 ; a. c. 6 Soott, 320 ; Chambers v. Griffiths, 1 Esp. 151. ' Williams v. Millington, 1 H. Bl. 81, 85 ; Girard v. Tasoart, 5 S. & R. 19, 27 ; Coppin v. Craig, 7 Taunt. 243 ; Robinson v. RiUter, 4 EI. & B. 954 (1855). * Bird V. Boulter, 4 B. & Ad. 446. Ante, Agency. CHAP. IX.] AUCTIONEERS. 361 if the clerk, following his dictation, make the memorandum, the auctioneer may sue as principal.^ § 407. The duties of the auctioneer are, in the iSrst place, to take the same care of the goods which are sent to him for sale as if they were his own property. His responsibilities and duties, in this respect, are those of a bailee for hire of labor and services, which bailment is technically called locatio operis. He is bound to exercise only ordinary diligence and skill, and is not responsible for unavoidable accidents.^ So, too, it is said that he must knock down to the highest bon^ fide bidder goods offered for sale without reserve.^ § 408. Again, it is his duty strictly to observe all the instruc- tions of his principal, and all the conditions of sale ; and if he deviate from them, he will be personally liable for the conse- quences, as well in respect to his liabilities as to his remedies.* Thus, where goods are intrusted to him to sell at auction, he would not be authorized to sell them at private sale.^ He would not be bound, however, strictly to obey instructions which would operate as a fraud upon others. And if no spe- cial instructions be given, it is his duty to follow the common custom in the business. If, however, although he disobey his instructions, the principal afterwards, with full knowledge thereof, either expressly or by implication, assent to his course, such assent will be a ratification thereof, which will entitle him to the same rights as if he had strictly followed his instructions.® In no case, however, can he dispose of goods at private sale.^ § 409. So, also, where an auctioneer, after a sale by public auction, receives a deposit therefor from the vendee, it is his ' Bird V. Boulter, 4 B. & Ad. 446. Ante, Agency. ' Maltby v. Christie, 1 Esp. 340 ; Stoiy on Bailm. § 431. » Warlow V. Harrison, 1 El. & E. 814, 318. See Harris v. Nickerson, L. R. 8 Q. B. 286 (1873). • Jones V. Nanney, 13 Price, 76 ; S. C. M'Clel. 25 ; Bexiyell v. Christie, 1 Cowp. 393 i Denew v. Daverell, 3 Camp. 461. ''Danielj). Adams, Ambl. 495. See Williams «. Evans, Law R. 1 Q. B. 352- « Catlin V. Bell, 4 Camp. 183 ; Johnston v. Usborne, 11 Ad. & El. 549 ; Smith V. Cologan, 2 T. R. 189, note ; Forrestier v. Bordman, 1 Story, 43 ; Veazie v. Williams, 3 Story, 612. ' Jones V. Nanney, 13 Price, 76 ; 8. C. M'Clel. 25 ; Bexwell v. Christie, 1 Cowp. 396; Denew K. Daverell, 3 Camp. 451 ; Daniel v. Adams, Ambl. 495, 3G2 AUCTIONEERS. [CHAP. IX. duty as the agent, or rather as the stake-holder of both vendor and vendee, to retain the deposit until the sale is coniplete, and it is ascertained to whom the money belongs .^ § 410. Again, the authority committed to an auctioneer is a personal trust, which he cannot delegate to another without the consent of the owner .^ He cannot, therefore, authorize his clerk to act as agent for his employer, in his absence.^ He is not, however, bound, in all cases, to become the orator on the occasion ; but he may employ another person to use the ham- mer, and make the declamations, provided it be in his pres- ence, and under his immediate direction and supervision.* Nor, in such a case, will his occasional absence for a time during the sale, invalidate the sale.^ § 411. Again, an auctioneer, like every other agent, cannot, ordinarily, purchase the goods of his principal, either on his own account, or in behalf of a third person.® And this rule is founded on the clearest principles of justice and -of sound policy ; since, in such case, the interest of the agent, as agent, would be wholly at variance with his interest as purchaser, and would tend directly to the furtherance of fraud.' § 412. The liabilities of an auctioneer sometimes result from an omission by him to perform his duties ; sometimes they are natural incidents thereto, and sometimes they are assumed by him, either from design or negligence. If he fail to comply with his instructions, and with the conditions of sale ;8 or, if he do not employ ordinary diligence in taking care of the goods intrusted to him for sale ; or, if he delegate his charge, and injury accrue ; or, if he purchase the goods, ' Edwards v. Hodding, 5 Taunt. 815 ; Gray v. Gutteridge, 3 C. & P. 40 ; Spittle V. Lavender, 5 Moore, 270 ; 8. c. 2 Br. & B. 452. ° Coles V. Trecothick, 9 Ves. 243 ; Commonwealth v. Harnden, 19 Pick. 482 ; Ess v. Truseott, 2 M. & W. 385 ; Combes's Case, 9 Coke, 75 ; Com. Dig. Attorney (C. 3) ; Laussatt v. Lippincott, 6 S. & R. 886 ; Solly v. Rath- bone, 2 M. & S. 298. ^ Coles v. Trecothick, 9 Ves. 243. * Commonwealth v. Harnden, 19 Pick. 482. ' Ibid. » But see Scott v. Mann, 36 Tex. 167 (1872). ' Barker v. Marine Ins. Co., 2 Mason, 369 ; Church v. Marine Ins. Co., 1 Mason, 341; Copeland v. Mercantile Ins. Co., 6 Pick. 204; Wright v. Dannah, 2 Camp. 203; Gillett v. Peppercorne, 3 Beav. 78; Story on Agency, § 13, 108; Downes v. Grazebrook, 3 Meriv. 200. ' See Mainprice v. Westley, 6 B. & S. 420 (1866). CHAP. IS.J AUCTIONEERS. 863 or do any other improper act, he is liable therefor to the pur- chaser, and cannot recover his commissions.^ So, also, if he do not disclose the name of his principal at the time of the sale,^ he assumes the responsibility of the sale, and is answer- able in damages to the vendee for any injury which may have resulted from the non-completion of the contract.^ But an auctioneer being only responsible for ordinary diligence, would not be liable when his duties were doubtful ; as for an injury arising from an omission to comply with a statute recently passed, of doubtful construction, and which had not received a judicial interpretation.* § 413. Where, in a sale by auction, a deposit of money is made by the vendee in the hands of the auctioneer, we have seen that his duty is to retain it until the sale is complete, and it is ascertained to whom it belongs. Until the sale is completed, he is the stake-holder of both parties, and is liable therefor.^ If, therefore, he pay it over to the vendor before the contract is completed, although he receive no notice from the vendee not to do so, and although he have acted entirely bond fide, yet, if the sale be annulled on account of the ven- dor's defect of title, he will be liable to the vendee for the deposit, in an action for money had and received.^ But he is not, in such case, liable for interest thereon, unless the money be demanded, or notice be given that the contract has been rescinded ; "^ or perhaps, unless it be proved that he made ' Post, § 342 to 346, and cases cited. See also Brown v. Staton, 2 . Chitt. 353 ; Nelson ». Aldridge, 2 Stark. 435 ; Denew v. Daverell, 3 Camp. 451. " It seems that if the auctioneer advertises a sale without reserve, and does not disclose the name of his principal, he personally contracts for a sale without reserve, and is liable in damages for a breach, at the hands of the purchaser. Mainprice v. "Westley, 6 B. & S. 420 (1865) ; Warlow v. Harrison, 1 El. & EI. 295 (1858). ^ Hanson v. Roberdeau, Peake, 120; Mills v. Hunt, 20 Wend. 431; Franklyn v. Lamond, 4 C. B. 637. " Hicks V. Mintum, 19 Wend. 550. ' Edwards v. Hodding, 6 Taunt. 815 ; Hanson v. Roberdeau, Peake, 120 ; Gray v. Gutteridge, 3 C. & P. 40 ; Burrough v. Skinner, 5 Burr. 2639. 6 Gray u. Gutteridge, 3 C. & P. 40. ' Gaby «. Driver, 2 Y. & J. 549 ; Lee v. Munn, 1 Moore, 481 ; s. C. 8 Taunt. 45 ; Calton v. Bragg, 15 East, 223. 364 AUCTIONEERS. [CHAP. IX. interest thereon.^ If the auctioneer receive money as a deposit on the sale, knowing that there is a defect in the title, he would, a fortiori, be liable therefor, although he had paid it over to the vendor.^ But where an action is brought against the auctioneer for the deposit, he cannot recover the costs thereof from the principal, in an action for money had and received, but must declare specially.^ § 414. Again, if the auctioneer be guilty of negligence, and omit to take proper precautions to secure his commis- sions, or auction duty, he cannot recover them from the ven- dor or vendee.^ As where the auctioneer sold the goods of A. and B. together, as the goods of A., and C. became the purchaser of some of A.'s goods, and through negligence in not giving C. notice that they belonged to A., C. settled with A. for the price, it was held, that the auctioneer could not recover the price from the buyer.^ And it was also held, that, in such a case, if the auctioneer bring an action against the buyer for the price of the goods, the buyer might set off a debt due from A. to him.^ § 415. So, also, if the auctioneer, in selling the goods, un- dertake to warrant them to be of a certain quality or species, without disclosing the name of the principal, he will be per- sonally liable thereon, whether he were possessed of authority or not. Although, if he have not exceeded the limits of his authority, he will have an action over against his principal. But if he disclose the name of his principal, and make a war- ranty within the limits of his authority, he will not be person- ally liable for breach thereof.^ ' Curling V. SImttleworth, 6 Bing. 121. " Edwards v. Hodding, 5 Taunt. 815. ' Spurrier v. Eldertou, 5 Esp. 1. " Denew v. Daverell, 3 Camp. 451; Capp v. Topham, 6 East, 392; Jones V. Nanney, 13 Price, 76 ; Hicks v. Minturn, 19 Wend. 650. ^ Coppin V. Walker, 7 Taunt. .237. « Coppin V. Craig, 7 Taunt. 243. ' Hanson v. Roberdeau, Peake, 120 ; Fenn v. Harrison, 3 T. R. 761 ; Catlin i>, Bell, 4 Camp. 184; Prince v. Clark, 1 B. & C. 186. There seems to be some doubt whether an auctioneer has, in virtue of his office, a right to warrant without special authority. See The Monte AUegre, 9 Wheat. 645 ; Blood v. French, 9 Gray, 197. But see Gunnis ». Erhart, 1 H. Bl. 289 ; Howard v. Braithwaite, 1 Ves. & B. 209, 210 ; Powell v. Edmunds, 12 East, 6. CHAP. IX.] AUCTIONEERS. 365 § 416. Again, if the auctioneer be guilty of fraud, or deceit, or assume the responsibility of selling disputed goods, he will render himself personally liable to the party defrauded. If, therefore, he have notice that the goods which he is about to sell do not belong i'ightfully to his employer, — or that the title to them is a matter of dispute, — and he, nevertheless, proceed to sell them, he will be personally responsible.^ But if he be deceived himself, and be ignorant that his employer has not an undisputed title to the goods, although he will, in the first instance, be responsible to the true owner, yet he will have his remedy against his em.ployer.2 But in cases where he connives with the vendor to defraud the buyer, he has no remedy against his confederate for damages recovered against him by the party defrauded.^ As it is the fraud which prevents him from recovering, the rule would not apply to a case where he was employed to act merely for the purpose of trying or asserting a right ; or where he was deceived into a belief in the goodness of the vendor's title.* But if the auctioneer make material misrepresentations, and the purchaser be thereby influenced to buy, he is responsible to the purcliaser.^ § 417. So, also, where the plaintiff, on the sale of a barge, addressed the company present, complaining of ill-usage from the owner, and asserted that the owner had a claim against him, by which the company were prevented from bidding, and 1 Hardacre v. Stewart, 5 Esp. 103 ; Adamson v. Jarvis, 4 Bing. 66 ; s. c. 12 Moore, 241. ' Adamson v. Jarvis, 4 Bing. 66 ; s. c. 12 Moore, 241 ; Medina v. Stough- ton, 1 Salk. 210 ; Sanders v. Powell, 1 Lev. 129 ; Crosse v. Gardner, Carth. 90. See post, ch. 16. In Stevens v. Legh, 22 L. T. 84; 24 Eng. Law & Eq. 210, the plaintiff sent a horse to the defendant, an auctioneer, to be sold on certain representations known to be false to the owner but not to the auctioneer. The latter sold the horse accordingly, and received the price ; but before he paid it over to the plaintiff the purchaser discovered the fraud, rescinded the contract, and gave the auctioneer notice not to pay the price to the plaintiff, but demanded it back : these facts were held to be a, good defence by the plaintiff against the auctioneer, in an action for money had and received. See also Murray v. Mann, 2 Exch. 538. " Merryweather v. Nixan, 8 T. R. 186 ; Adamson v. Jarvis, 4 Bing. 66 ; s. c. 12 Moore, 241. ' Ibid. ' Bardell v. Spinks, 2 Car. & Kir. 646. 866 AUCTIONEERS. [CHAP. IX. the barge was knocked off 'to the plauitiff ; it was held, that, under the ch'cumstances, he could not insist upon the sale.^ § 418. Again, if there be a mistake of a material and essen- tial character, — as, if the property prove to have no existence, or cannot be found, — or any such mistake as that, without it, the party would never have entered into the contract at all, the purchaser may rescind the contract altogether, and is not bound to accept the article and sue for damages.^ Nor does it make any difference that the sale was made under a stipu- lation that error or misstatement should not vitiate the sale, if the misdescription be wilfully or fraudulently made, with a de- sign to mislead, and operate to enhance the value of the sub- ject-matter.^ Indeed, it has been held, — and this seems to be the just and true doctrine, — that if, under such a con- dition, there be a mistake as to a material part, forming the main or essential inducement to the sale, the contract may be avoided by the buyer, although there was no fraud.* § 419. In the next place, as to the employment by the vendor or auctioneer, of puffers, by-bidders, white bonnets, or decoy-ducks, as they are technically called ; that is, persons who, without having any intention to purchase, are employed by the vendor to raise the price by fictitious bids, thereby in- creasing competition among the bidders, while they themselves are secured from risk by a secret understanding with the ven- dor that they shall not be bound by their bids. And in respect to these persons, the rule of law is, that, if their bidding ope- rate to mislead and deceive the buyer, it will vitiate the sale.^ ' Fuller V. Abrahams, 6 Moore, 316 : s. c. 3 Br. & B. 116. ' Norfolk V. Worthy, 1 Camp. 3^0 ; Robinson v. Musgrove, 8 C. & P. 469 ; s. c. 2 Mood. & Rob. 92 ; Flight v. Booth, 1 Bing. N. C. 377 ; Ham- mond V. Allen, 2 Sumner, 387 ; Daniel v. Mitchell, 1 Story, 172 ; Sherwood V. Robins, 3 C. & P. 339 ; s. c. Mood. & Malk. 194; Malins v. Freeman, 2 Keen, 25. ' Ibid. ; Robinson v. Musgrove, 8 C. & P. 469 ; s. C. 2 Mood. & Rob. 92 ; Norfolk v. Worthy, 1 Camp. 337. See post, oh. 5. " Flight V. Booth, 1 Bing. N. C. 377 ; Leach v. Mullett, 3 C. & P. 115 ; Sherwood v. Robins, 3 C. & P. 339; s. c. Mood. & Malk. 194; DobeU u. Hutchinson, 3 Ad. & El. 355, 872 ; Belworth v. Hassell, 4 Camp. 140 ; Sug- den on Vend. 264; Dykes v. Blake, 4 Bing. N. C. 463. ' See Towle v. Leavitt, 3 Fost. 860 ; Pennock's Appeal, 14 Penn. St. CHAP. IX.] AUCTIONEERS. 367 If, therefore, all of the bidders, except the buyer, be bidding for the vendor, or if the bid, immediately preceding the last bid of the buyer, be by a by-bidder or puffer, the sale is voidable by the buyer. ^ But if a person, or persons, be em- ployed to bid up to a certain sum, in order to prevent a sacri- fice of the property, and the price be afterwards raised by real bidders, the sale will be valid,^ unless the express conditions of the sale be thereby violated. § 420. Again, the vendor may employ by-bidders or puffers, if he give notice to the other bidders of his intention ; since, in such a case, it would not operate as a fraud.^ But in all cases it behooves the vendor to be careful in making any such secret arrangement ; as such bad faith is looked upon with great suspicion in courts of justice, and the cases leave it somewhat doubtful whether a more stringent rule might not be applied.* Where property is advertised to be sold " without reserve" the vendor is thereby excluded from any interference either directly or indirectly, which may, under any possible circumstances, affect the right of the highest bidder to be con- sidered as the purchaser, whatever bid he may make. And any such violation of his implied engagement will render the contract of sale voidable.^ § 421. If, however, the seller do not authorize the auctioneer or by-bidder to make sham bids, he is not liable in an action by the buyer, although such sham bids were made, because he 446 ; Staines c. Shore, 16 Penn. St. 200 ; Crowder v. Austin, 3 Bing. 368 ; Green v. Baverstock, 14 C. B. (n. s.) 204 (1863) ; National Bank v. Sprague, 5 C. E. Green, 159 (1869). ' Bramley v. Alt, 3 Ves. 024; Veazie v. Williams, 3 Story, 620; Wheeler v. Collier, Mood. & Malk. 125 ; Howard v. Castle, 6 T. B,. 642 ; Bexwell V. Christie, Cowp. 396 ; Smith v. Clarke, 12 Ves. 477 ; Crow- der V. Austin, 3 Bing. 368 ; Sugden on Vend. 18, 19. 2 Smith V. Clarke, 12 Ves. 477 ; ConoUy u. Parsons, 3 Ves. 625, note; Bramley u. Alt, 3 Ves. 622 ; Veazie v. Williams, 3 Story, 620 ; Steele v. Ellmaker, 11 S. & R. 86 ; Woodward v. Miller, 2 Collyer, 279. 5 Wheeler v. Collier, Mood. & Malk. 125 ; Crowder v. Austin, 3 Bing. 868 ; Bowles v. Bound, 5 Ves. 608. '' See post. Illegal Sales. » Thornett v. Haines, 16 M. &. W. 367 ; Robinson v. Wall, 10 Beav. 61, 73 ; 2 Phillips, 372. 368 AUCTIONEERS. [CHAP. IX. was wholly disconnected from the fraud ; and the remedy of the buyer is against the party making the sham bids.^ § 422. In the next place, as to the operation of the statute of frauds upon sales by auction. This statute, in its fourth section, enacts, " that no action shall be brought whereby to charge any person 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 sliall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereto by him lawfully authorized." And the seven- teenth section of the same statute enacts, that " no contract for the sale of any goods, wares, and merchandises, for the price of ten pounds sterling or upwards, shall be allowed to be good, except the buyer shall accept part of the goods so sold, and actually receive the same ; or give something in earnest to bind the bargain, or in part payment ; or that some note or memorandum in writing of the said bargain be made, and signed by the parties to be charged by such contract, or their agents, thereunto lawfully authorized." ^ Sales by auction are held to be witliin the terms of both these sections, on the ground that although they are made in the presence of many witnesses, yet, that such evidence ought not to be admitted merely because its quantity would render perjury less frequent ; for an opportunity would, nevertheless, be afforded for an in- definiteness of construction, and an uncertainty of practice, which it was the very object of the statute to prevent.^ § 423. As to the memorandum required by the fourth sec- tion, the rule is, that it should distinctly set forth the promise and the consideration, either in itself, or by reference, con- tained in itself, to something extrinsic, by which they may be ' Veazie v. Williams, 3 Stoiy, 620. * The amount necessary to bring a sale within the provisions of this statute is fixi^d in New York at $oO ; in Vermont at .?40 ; in Maine at S30 ; in New Hampshire at $33; and in Massachusetts at $.50. In Rhode Island this particular provision has never been adopted. 5 Kenworthy v. Schofield, 2 B. & C. 947 ; Walker v. Constable, 1 Bos. & Pul. 306 ; Emmerson v. Heelis, 2 Taunt. 38 ; White v. Proctor, 4 Taunt. 209 ; Hinde v. AVhitehouse, 7 East, 558. CHAP. IX.] AUCTIONEERS. 369 made certain ; that it should be signed, at least by one party, and that the name of the other should appear on it.* The exact terms of the consideration need not, however, be stated ; provided it appear distinctly that there is some consideration.^ § 424. As to the memorandum required by the seventeenth section, it has been held, that it should contain the full terms of the contract ; that is, the names of the buyer and seller, the subject of sale, the price, and the terms of credit, and the conditions of sale, if there be any.^ A mere signing of the auction catalogue with the prices of the article bought is not, therefore, sufficient, if there be any conditions of sale not stated therein.* It is not necessary, however, that the memorandum should be signed by both parties, provided the name of the party charged be affixed thereto with his consent or by his order.^ Again, it is not necessary that all of the terms of the contract should appear upon the same paper ; for if they can be clearly and unmistakably collected from several papers referring to each other, or from a defective memoran- dum, coupled with a letter referring thereto, and supplying the deficiency, it will be sufficient to satisfy the requisitions of the statute.^ But the memorandum, or papers, must be suffi- ' Kenworthy v. Schofield, 2 B. & C. 947 ; Stapp v. Lill, 1 Camp. 242 ; 8. c. 9 East, 348 ; Lyon v. Lamb, cited Fell on Merc. Guaranty, 318 ; Mor- ris V. Stacey, Holt, N. P. 153 ; Champion v. Plummer, 1 Bos. & Pul. N. R. 252 ; Morley v. Boothby, 3 Bing. 107. See ante, § 347. = Ibid. ; Stapp v. Lill, 1 Camp. 242 ; s. c. 9 East, 348. ' Champion v. Plummer, 1 Bos. & Pul. N. R. 254; Kenworthy u. Scho- field, 2 B. & C. 947 ; Kain v. Old, 2 B. & C. 627 ; Elmore v. Kingscote, 5 B. & C. 583 ; Saunderson v. Jackson, 2 Bos. & Pul. 238 ; Hinde v. White- house, 7 East, 558 ; Harvey v. Stevens, 43 Vt. 653 (1871). See Price v. Durin, 66 Barb. 647 (1868). * Hinde ». Whitehouse, 7 East, 558 ; Kenworthy v. Schofield, 2 B. & C. 947. ' Johnson v. Dodgson, 2 M. & W. 653 ;" Schneider v. Norris, 2 M. & S. 286 ; Egerton v. Mathews, 6 East, 307 ; Laythoarp v. Bryant, 3 Scott, 250 ; Weio-htman v. Caldwell, 4 Wheat. 85, and note; Penniman v. Hartshorn, 13 Mass. 92 ; Merritt v. Clason, 12 Johns. 102 ; Barstow v. Gray, 3 Greenl. 409 ; Douglass v. Spears, 2 Nott & M'Cord, 207 ; 2 Kent, Comm. 510, 511 ; Flight v. BoUand, 4 Russ. 298 ; Clason v. Bailey, 14 Johns. 487 ; Propert v. Parker, 1 Russ. & Myl. 625. « Saunderson v. Jackson, 2 Bos. & Pul. 238 ; Dobell v. Hutchinson, 3 Ad. & El. 356 ; Smith v. Surman, 9 B. & C. 561 ; Lent v. Padelford, 10 Mass. 230; Phillimore v. Barry, 1 Camp. 513. vnT._ T. 24 370 AUCTIONEKRS. [CHAP. IS. ciently clear to express the whole contract, without resort to verbal testimony, since, otherwise, the very object of the stat- ute would be frustrated. The only purpose for which parol evidence in relation to the memorandum is admitted, is as a means of interpretation and explanation, in cases where techni- cal terms are employed. ^ § 425. This memorandum may be made not only by the parties, but by any "agent thereunto lawfully authorized." And in respect to this provision, the rule is, in auction sales, that the auctioneer is the agent of both parties, so as to bind them by an entry in his books of the terms of the sale ; ^ un- less the facts of the particular case indicate that he is not so intended.'^ So, also, a clerk of the auctioneer, who attends the sale, and in compliance with the auctioneer's proclamation, when he knocks an article down to tlie seller, makes a memo- randum thereof in his books, without objection by the seller, is a sufficient agent within the meaning of the statute.* If, however, the auctioneer be the agent, he cannot personally bring an action against the buyer ; but the action must be brought in the name of the vendor, for whom he acts.^ Yet, if the auctioneer's deputy, or clerk, make the entry or memo- randum, following the declaration of the auctioneer at the knocking off of the article, the auctioneer may maintain an action personally.^ That is, the agent must not appear in the action to be one of the parties, but to be a third person.'' An entry cannot, however, l)e made by a clerk, not present at ' Birch V. Depeyster, 4 Camp. 385 ; Johnston v. Usborne, 11 Ad. & El. 549; Phil. & Amos on Evid. 7:ls, 739 (edit. 1838). " Bird V. Boulter, 4 B. & Ad. 446, 447. See also s. c. 1 Nev. & Man. 316, note ; Wright v. Dannah, 2 Camp. 203 ; Kenworthy v. Schofield, 2 B. & C. 94.5 ; Farebrother v. Simmons, 5 B. & AI. 333 ; Henderson v. Barnew.n.ll, 1 Y. & J. 389 ; Cleaves v. Foss, 4 Greenl. 1 ; Jenkins v. Hogg, 2 Const. 821 ; Gordon v. Sims, 2 M'Cord, Ch. 164. But he cannot bind the buyer, unless the memorandum be made on the day of the sale. Mews v. Carr, 1 H. & N. 484 (1856). = Bartlett v. Purnell, 4 Ad. & El. 793, 794. * Wright V. Dannah, 2 Camp. 203 ; Farebrother v. Simmons, 6 B. & Al. 333 ; Henderson v. Barnewall, 1 Y. & J. 389. ^ Bird V. Boulter, 4 B. & Ad. 446, 447. « Ibid. ' Ibid. ; Farebrother v. Simmons, 5 B. & Al. 333; Wright v. Dannah, 2 Camp. 203 ; Sewall ». Fitch, 8 Cow. 215. CHAP. IX.] AUCTIONEERS. 371 the sale, and not making the memorandum in the presence and with the implied consent of the parties, but entering it afterwards at the request of the auctioneer.^ If the auctioneer is himself the party in interest, though as trustee or guardian for anotlier, he has no authority to make the memorandum to bind the purchaser .^ § 426. In respect to the first exception in the statute, namely, that the buyer shall " accept a part of the goods so sold, and actually receive the same," the rule is, that a final surrender by the seller, and a complete appropriation by the buyer of the whole of the goods, or in the case of an entire contract, of a part of the goods, in process of receiying the whole, are re- quired to satisfy the statute. No such surrender can be final within the meaning of this exception, so long as the seller retains any right of lien, or of stoppage in transitu ; and no appropriation can be complete, so long as the buyer is at liberty to return the goods, in case they do not correspond to the war- ranty. The delivery must not only be sufficient to transfer the title, but also to destroy the rights of the vendor over the specific subject-matter, in virtue of the old agreement.^ And, therefore, a delivery to any person, who is a mere middle-man, in whose hands the goods are subject to any control by the vendor, is not sufficient.^ The delivery of part of the goods sold under an entire contract is sufficient.^ ' Henderson v. Barnewall, 1 Y. & J. 389 ; Alnau. Plummer, 4 Greenl. 258. ^ Tull V. David, 45 Mo. 444 (1870) ; Bent v. Cobb, 9 Gray, 397 (1857). » See ante, § 276 to 281 ; Rohde v. Thwaites, 6 B. & C. 388 ; s. c. 9 Dowl. & Kyi. 293 ; Baldey v. Parker, 2 B. & C. 37 ; Phillips ». Bistolli, 2 B. & C. 513; Smith v. Surman, 9 B. & C. 561 ; Carter v. Toussaint, 5 B. & Al. 858 ; Kent u. Huskinson, 3 Bos. & Pul. 233 ; Hanson v. Armitage, 5 B. & Al. 657; Miles v. Gorton, 2 Cr. & Mees. 504; Townley v. Crump, 5 Nev. & Man. 608 ; s. c. 4 Ad. & El. 58 ; Winks ». Hassall, 9 B. & C. 375 ; Bloxam v. Sanders, 4 B. & C. 941. •* Astey V. Emery, 4 M. & S. 264 ; Hanson v. Armitage, 6 B. & Al. 659 ; Howe V. Palmer, 3 B. & Al. 321. s Mills V. Hunt, 17 Wend. 333 ; s. c. 20 Wend. 431 ; Coffman v. Hamp- ton, 2 Watts & Serg. 377. 372 BROKERS. [CHAP. X. CHAPTER X. BROKERS. § 427. A BROKER is an agent who is employed to negotiate sales between the parties for a compensation in the form of a commission, which is commonly called brokerage.-* In the proper exercise of his functions, he does not act in his own name, but only as a middle-man.^ His business consists in negotiating exchanges ; or in buying and selling stocks, and goods, or ships, or cargoes ; or in procuring insurances and settling losses ; and, according as he confines himself to the one or other of these branches, he is called an exchange-broker, a stock-broker, a merchandise-broker, a ship-broker, or an in- surance-broker.^ A broker differs materially from a factor. ' See Smith v. Lindo, 4 C. B. (n. s.) 89.5 (1858). * Among the Romans was a class of persons called Proxenetfe, not dif- fering much from a broker in their functions, and receiving also a compensa- tion for negotiating a sale. " Sunt enim hujusmodi hominum, ut tam in magna civitate, officinaa. Est enim Proxenetarum modus, qui emptionibus, venditionibus, commerciis, contractibus Ileitis utiles, non adeo improbabili, more se exhibent. (Dig. Lib. 50, tit. 14, 1. 3.) Proxenetica jure licito petuutur. Si Proxeneta intervenerit faciendi nominis, ut multi solent, yid- eamus an possit quasi mandator teueri ? Et non puto teneri. Quia hie monstrat magis nomen quam mandat, tametsi laudet nomen." Big. Lib. 50, tit. 14, 1. 1, 2. Domat also gives a full description of a broker according to our law. He says : " The engagement of a broker is like to that of a proxy, factor, and other agent; but with this difference, that the broker being employe Wilkinson v. Martin, 8 C. & P. 1 ; jMurray v. Currie, 7 C. & P. 584 ; Green v. Bartlett, 14 C. B. (n. s.) 681 (186:)). See § 259 ; Durkee v. Ver- mont Cent. R. R. Co., 29 Vt. 127 (1856) ; Vreeland v. Vetterldn, 4 Vroom, 217; Shepherd u. Hedden, 5 Dutch. 334; Cook v. Fiske, 12 Gray, 491; Tyler u. Parr, 52 Me. 249 (1873) ; Budd v. Zoller, lb. 238 ; Carpenter v. Kynders, lb. 278. As to the effect of a usage, not known to the principal, allowing the broker a commission for bringing parties into negotiation, though no sale be effected through his agency, see Loud v. Hall, 106 Mass. 404 (1871). As to whom of two brokers claiming a commission for the same transaction is entitled to the same, see Maracelle v. Odell, 3 Daly, 123; Dryer v. Ranch, lb. 434; Glenn v. Davidson, 37 Md. 365 (1872). ^ Knapp v. Wallace, 41 N. Y. 477 (1869). And see Doty v. Miller, 43 Barb. 529 ; Barnard v. Monnot, 3 Keyes, 203 ; Lyon v. Mitchell, 36 N. Y. 235 ; Moses v. Bierling, 31 N. Y. 462 ; Jones v. Adler, 34 Md. 440 (1871) ; Cook V. Kroemeke, 4 Daly, 268. 3 Redfield v. Tegg, 38 N. Y. 212 (1868). Upon an employment to procure a purchaser of property at a certain price, the broker does not earn Ms commission unless he procures a purchaser whd is willing or offers to buy at that price. It is not sufficient that he was the means of bringing the knowledge of the fact that it was for sale at a certain price to the party who afterwards buys it for that price, but it must be through his instrumentality that the purchaser is brought to give that sum for it ; which may fairly bu presumed, where nothing appears but the fact that he brought the vendor and purchaser together, and that the latter gave the price asked for it. Wylie V. The Marine National Bank, N. Y. Common Pleas, Feb. T. 1872. See Lincoln v. McClatchie, 36 Conn. 136 ; Schwartze v. Yearly, 31 Md. 270; Harris v. Burtnett, 2 Daly, 189. 876 BROKERS. [chap. X. memorandum required by the statute of frauds. The practice of brokers is to keep books, in which they enter the terms of any contract, which they negotiate, and the names of the par- ties ; they then deliver to the buyer a note of such entry, which is called a bought note, and a similar note to the seller, called a sold note, signed in their own name ;^ and either the entry in the book, or the bought and sold notes, if signed by the broker, would be a sufficient memorandum within the statute of frauds, unless they either of them omit sufficiently to state the terms, or unless they disagree with each other.^ But if the bought and sold notes do not correspond with each other, or with the entry in the broker's books, the memorandum would not suffice, if the mistake occasioned any injury .^ If the broker be only employed to arrange preliminaries and bring the parties to- gether, and the contract be made tiy the parties themselves, he would not be an agent so as to bind them by his entry in his books.'* § 430. The broker, being invested with a personal trust, cannot delegate it to another, although the other be a sub- agent or clerk, unless with the express or implied consent of his principal to his so doing.^ So, also, he cannot, ordinarily, sell the goods of his principal in his own name, unless specially authorized ; and if he do, his principal will have the same rights and remedies against the purchaser, and incur the same liabilities,^ as if his name had been disclosed. This rule is adopted, not only upon the ground that, having exceeded his authority, the principal is not bound, for the innocent buyer ' See Benjamin on Sale, 205 et seq. (2d ed.). ' Rucker v. Cammeyer, 1 Esp. 105 ; Hindr v. Whitehouse, 7 East, 558 ; Kemble v. Atkins, 7 Taunt. 2G0 ; Rowe v. Osborne, 1 Stark. 140; Hender- son V. Barnewall, 1 Y. & J. 387 ; Beal v. M'Kiernan, 6 La. 407 ; Clason v. Bailey, 14 Johns. 484; Davis v. Shields, 26 Wend. 341. ' Ibid. ; Thornton v. Kempster, 5 Taunt. 786 ; Mitchell v. Lapage, Holt, N. P. 253 ; Camming v. Roebuck, Holt, N. P. 172 ; Bird v. Boulter, 4 B. & Ad. 443; Davis v. Shields, 26 Wend. 341. * Aguirre v. Allen, 10 Barb. 77. ' Henderson v. Barnewall, 1 Y. & J. 387 ; Story on Agency, § 29, 109 ; Magee v. Atkinson, 2 M. & W. 440. « Campbell v. Hicks, 4 H. & N. 851 (1858). CHAP.X.] BROKERS. 377 might nevertheless be injured thereby, i but also that, as he has neither the possession of the goods nor the indicia of posses- sion, the vendee cannot be deceived into a belief that he is the principal, or is acting otherwise than as a broker.^ But there are some exceptions to this rule, created by usage ; as in the cases of policies of insurance, which are commonly made in the name of the policy broker, and which he is then enabled to sue upon.8 Unless, however, he act in the capacity of factor, as well as of broker, ho cannot, unless in the excepted cases created by usage, contract in his own name* He may, of course, be empowered to sell in his own name, which will, of itself, constitute him in so far a factor ; and an authority to sell in his own name may be implied from a previous course of dealing between the parties, — but this is a question for a jury.^ But if a broker enter into a contract for an undisclosed principal, the latter may sue thereon in his own name ; ^ and this rule obtains although there be a rule of the exchange, on which the contract is made, declaring that a contract made for an undisclosed principal shall be regarded as the contract of the broker solely ,'' and although this rule be known to the principal.^ § 431. So, also, he cannot act as agent of both parties where he is intrusted wjth authority to conclude the sale and to fix the terms himself, in behalf of each, for such a power would enable him to effect frauds. Thus, if A. employ him to buy certain goods at the lowest price, and B. employ him to sell similar goods at the highest price, he would not be au- ^ It is no part of the ordinary duty or power of a broker to cancel engagements once properly made. Xenos v. Wiokham, Law R. 2 H. L. 296 (1866), a very interesting case on this subject. 2 Baring v. Corrie, 2 B. & Al. 148. ' Paley on Agency, by Lloyd, 362 ; 3 Chitty on Com. and Manuf. 210 ; Baring v. Corrie, 2 B. & AL 147; Story on Agency, § 109. ^ Baring v. Corrie, 2 B. & Al. 148 ; Johnston v. Usborne, 11 Ad. & El. 557. 5 Kemble v. Atkins, Holt, N. P. 434. * And the buyer may sue the broker in such case for a breach of the cod- tract. Reid v. Dreaper, 6 H. & N. 813 (1861). ' Dale V. Humfrey, El. B. & E. 1004 (1860) ; s. c. 7 El. & B. 266. * Humphrey v. Lucas, 2 Car. & Kir. 152. 378 BROKERS. [CBAP. X. thorized to make a sale of such goods between those parties.^ So, also, a broker cannot, ordinarily, buy or sell on credit, unless he be justified in so doing by the usage of trade. ^ So, also, a broker has, ordinarily, no authority to receive payment for property sold by him ; and if the purchaser make payment to him, he does so at his own risk, unless from other circum- stances an authority to receive it can be inferred.^ Insurance brokers are, however, considered to have acquired by usage an authority to adjust losses, and to receive payment of them ; but they can only receive payment in mone}'.* But a broker may be authorized to receive payment, either in express terms, or by necessary implication from the circumstances ; as, if he be empowered to sell as a principal ; or, if he have been in the habit of receiving payment for the principal in previous deal- ings ; and, in such cases, a payment to him will discharge the purchaser from all liability.^ A usage among stock-brokers that on the purchase of one broker of another, the buyer may within a certain time substitute another party — the real princi- pal — as buyer, unless he can be reasonably objected to by the seller, is a reasonable and valid usage.^ ' Story on Agency, § 31 ; Wright v. Dannah, 2 Camp. 203. See also Walker v. Osgood, 98 Mass. 349 (1867) ; Farnsworth v. Hemmer, 1 Allen, 494 ; Lloyd v. Colston, 5 Bush, 587. 2 Henderson v. Barnowall, 1 Y. & J. 387 ; Paley on Agency, by Lloyd, 212 ; Story on Agency, § 60. ' Baring v. Corrie, 2 B. & Al. 137 ; Campbell v. Hassel, 1 Stark. 233; Paley on Agency, by Lloyd, 279, 280 ; Story on Agency, § 109. See Hig- gins V. Moore, 31 N. Y. 417 ; Bosw. 344. ■* Todd V. Reid, 4 B. & Al. 210 ; Scott v. Irving, 1 B. & Ad. 605 ; Bous- field V. Creswell, 2 Camp. 545 and note ; Ptichardson v. Anderson, 1 Camp. 43, note ; Story on Agency, § 103, note, § 109 ; Kussell v. Bangley, 4 B. & Al. 395 ; Bartlett v. Pentland, 10 B. & C. 760. A general usage that an insurance broker, in.^tead of collei;ting the amount of a loss in vi07iey, may set it off against a claim which the insurance company has against such broker for other matters, is not binding upon the party insured, if unknown to him ; and he may collect the amount of the loss of the company. S«cct- ing V. Pearce, 9 C. B. (n. s.) 534 (1861). See also Gabay v. Lloyd, 3 B. & C. 793 ; Scott v. Irving, 1 B. & Ad. 606. 6 Coates V. Lewes, 1 Camp. 444 ; Favenc v. Bennett, 11 East, 36 ; White- head V. Tuckett, 15 East, 400; Pickering v. Busk, 15 East, 38. 6 Grissell v. Bristowe, Law R. 4 C. P. 36 (1868), in the Exchequer Chamber, reversing the decision below, in Law R. 3 C. P. 112. CHAP. X.J BROKERS. 379 § 432. The vendor is bound by all acts done by the broker ■within the limits of his authority. If, therefore, he have au- thority to sell without any limitation as to price, he may sell at any price which he himself thinks is reasonable and fair, under the circumstances.^ And knowledge on the part of the principal that it is the ordinary course of business for his broker to make a prepayment for goods amounts to a specific permission to the broker to do so ; so that, in such case, if the goods should be destroyed before actual delivery to the princi- pal, the loss will be the latter's.^ So, also, if he be employed to purchase goods of a general description, he cannot be made liable for not procuring them of a particular quality, provided they answer to such description. So, also, if there be no re- striction as to the mode in which he shall sell goods, or as to tlie terms of sale, he may sell by sample, or with warranty.* But it is well established that a broker or agent employed to sell has, primd facie, no authority to receive payment other- wise than according to the usual course of business.* A per- son, however, who employs a broker to bargain for him in a particular market, thereby authorizes him to contract in the manner usual there, provided the usage be not of such a nature as to change the employment. But a person who holds him- self out to act as a broker, and charges a brokerage, cannot set up, as against a person unconnected with the market, and ignorant of its usages, a usage that he should fill a different character from that of broker.^ A mere broker cannot sue in ' East India Co. v. Hensley, 1 Esp. 112 ; Paley on Agency, by Lloyd, 208, 209. = Sentance v. Hawley, 13 C. B. (n. s.) 458 (1863). . ' Andrews v. Kneeland, 6 Cow. 354 ; The Monte AUegre, 9 Wheat. 643 ; Randall v. Kehlor, 60 Me. 37 (1872). * Per Keating, J., in Catterall v. Hindle, Har. & R. 267 (1866). This case was reversed in the Exchequer Chamber (Law R. 2 C. P. 368); but this general proposition was not disturbed. The reversal was on the ground that the court had undertaken to say, as matter of law, that payment in advance to a broker was ineffectual, — a matter which should have been submitted to the jury. ' MoUett V. Robinson, Law R. 7 C. P. 84, 94 (1872), Cleasby, B. ; s. c. Law R. 5 C. P. 646. 380 BROKERS. [chap. S. his own name on a contract made by him, wherein he is de- scribed as broker.! § 433. It has in England now become settled law that ■when a contract for the purchase and sale of shares has been made between individuals, through their respective brokers, or with the intervention of jobbers, members of the stock-exchange, the lawful usages and rules of the exchange are incorporated into and become part of all such contracts, and the rights of the parties are determined by the operation of these rules and usages.^ In Bowi-ing v. Shepherd, just cited, Kelly, C. B., said that the substantial effect of all the decisions, as applicable to such transactions, was, that when the dealings of all the parties are complete, by the giving the names of the ultimate buyer and the ultimate seller, and the acceptance by them respectively of the persons so named, the original con- tractor, the broker or jobber, was discharged, and a contract of sale arose between the ultimate buyer and the ultimate seller, capable of enforcement both at law and in equity. ' Fairlie u. Fenton, Law R. 5 Exch. 169 (1870). A broker signing a contract note as selling broker for undisclosed principals, cannot sue as principal on tbe contract. Sliarman v. Brandt, Law R. 6 Q. B. 720 (1871). " Bowring v. Shepberd, Law R. 6 Q. B. 309, 321 ; Grissell v. Bristowe, Law R. 4 C. P. 36 ; Coles v. Bristowe, Law R. 4 Ch. 3. In Mollrtt v. Rob- inson, Law R. 5 C. P. 616, 653 (1870), Bovill, C. J., says : " The general rule of law is, that persons who engage a broker to transact business for them in a general market authorize him to do so according to the general and known usages and customs of that market, although tbcy themselves may not be aware of them ; and if the business is transacted in the ordinary and usual course, the principals are bound by such usages and customs, whether they had actual knowledge of them or not." See Grisscll cj. Bristowe, Law R. i C. P. 36 (1868), in the Exchequer Chamber, holding the usage of the exchange reasonable, by which the buying broker substitutes another as huyev on the " name day," thus relieving himself from liability, provided he is one who cannot be reasonably objected to. See also, as to customs of the exchange, Cropper v. Cook, Law R. 3 C. P. 194 (1S6S) ; Maxtcd v. Paine, Law R. Exeh. 132 (1871); s. c. Law R. 4 Exch. 82, 203; Coles v. Bristowe, Law R. 4 Ch. 3 (1868) ; Duncan v. Hill, Law R. 6 Exch. 255 (1871) ; Davis v. Haycock, Law R, 4 Exch. 373 (1869) ; Allan v. Sundius, 1 H. & C. 123 (1802) ; Gibson v. Crick, ib. 142 (1862) ; Graves v. Legg, 9 Exch. 709 ; 11 ib. 642 ; 2 H. & N. 210 (1857). CHAP. XI.] FACT0E9. 381 CHAPTER XI. FACTORS. § 434. A FACTOR is an agent employed to sell the goods or merchandise of his principal, which are in his possession, for a commission. He is often called a commission-merchant, or consignee ; and the goods received by him for sale are called a consignment. If he reside in the same country as his prin- cipal, he is called a home factor ; if in a different country, he is called a foreign factor. If he accompany a cargo on a voyage, and have it in charge to sell, he is called a super- cargo.^ But under all these different titles he is merely a factor, subject to all the liabilities, and having the same rights and duties of this class of agents. A factor differs from a broker, as we have seen, in several important particulars. He may buy and sell in his own name ; and he has the goods or merchandise in respect to which his agency is created in his possession ; while a broker, as such, cannot, ordinarily, buy and sell in his own name, and has no possession of the goods sold.^ The test as to whether an agent is merely a broker or is a factor is to be found in the question, whether he has any possession or special property in the subject-matter of sale ; for if he has, he is in so far a factor, although he may unite the two characters. If he have no possession or special prop- erty, he is merely a broker, and his rights, duties, and liabili- ties are different. § 435. In respect to his commission, the rule is, that a factor is always entitled thereto, if he have properly performed his duty. But if he be guilty of gross misconduct, or if he exe- > Beawes, Lex Merc. 44, 47, 6th ed. ^ Baring ». Corrie, 2 B. & Al. 148 ; 2 Kent, Comm. 622, note ; Story on Agency, § 34. 382 FACTORS. [chap. 21. cute his duties in such a manner as to prevent any benefit to the principal, he will not be entitled to receive his commission.^ So, also, a factor cannot recover the difference, when through his negligence the proceeds of the sale are not equal to the ex- penses ; nor can he recover expenses occasioned by his negli- gence.^ Whether, when the purchaser fails, he is entitled to receive a commission, is a question which depends upon the usage of trade in the particular place, and in the particular business,^ and in respect to which there does not seem to be any distinct and independent rule of law. Again, whenever he undertakes to guarantee to his principal the payment of the purchase-money, he is entitled to an additional compensation therefor, on account of the risk which he assumes, which is called a del credere commission, — the phrase del credere being equivalent to guaranty or warranty. When the factor assumes this contract of guaranty, he does not render himself primarily responsible to the principal, but only secondarily liable, in case of the failure of the buyer to fulfil his contract ; and he is entitled to the general rights of a guarantor, as to notice.* His agreement, however, to sell upon such commission is not a promise to answer for the debt of another, and need not be in writing. 5 And a factor, under a del credere commission, is only understood to guarantee the payment by the purchaser, and not the safe remittance to the principal.^ § 436. In virtue of his special property in goods consigned to his care, a factor may buy and sell in his own name, as well as in the name of his principal; and, in such case, if he be the supposed principal, the purchaser will be entitled to the ' Hamond v. Holiday, 1 C. & P. 384; White «. Cliapman, 1 Stark. 113. ' Dodge V. Tileston, 12 Pick. 328. ' Clark V. Moody, 17 Mass. 145. * Gall V. Comber, 7 Taunt. 658; Peele w. Northcote, 7 Taunt. 478; Morris v. Cleasby, 1 M. & S. 576; Thompson v. Perkins, 3 Mason, 282; 2 Kent, Comm. 624, 625; Holbrook v. Wight, 24 Wend. 169. The rule, as stated in Grove v. Dubois, 1 T. R. 112, has been expressly overruled. ' Couturier v. Hastie, 8 Exch. 40 ; 16 Eng. Law & Eq. 562, and Bennett's note ; Bradley v. Richardson, 23 Vt. 720 ; WolfiF v. Koppel, 6 Hill, 458 ; 2 Denio, 368. * Leverick v. Meigs, 1 Cow. 645 ; Story on Agency, § 215. But see Mackenzie v. Scott, 6 Bro. P. C. by Tomlins, 286. CHAP. SI.] FACTORS. 383 same rights as if he were tlie real principal. Payment to him by the purchaser will therefore discharge the latter from all liability to the principal.^ So, also, the purchaser, in such case, may consider the factor as principal, and set off any debt due from the factor to him against the price of the goods.^ Yet, if before all the goods are delivered, and before any part of them is paid for, he be informed that they do not belong to the factor, he cannot set them off against a debt due from the factor, in an action against him by the principal.^ Whenever the factor sells in his own name, he may bring an action against the purchaser for the price, and prosecute his remedied in like manner as if he were actually the principal ; and he will also be responsible to the purchaser for the per- formance of his part of the contract.* Where, however, the party dealing with a factor gives exclusive credit to him, he cannot afterwards have recourse to the principal.^ § 437. But although, when the factor contracts in his own name, he is entitled to sue the purchaser personally, and to en- force payment from him, yet his rights in this respect may be superseded by the consignor, and the latter may bring his ac- tion directly against the purchaser, although the purchaser dealt with the factor, as owner, in good faith ; but, in such case, the purchaser will have the same rights as if he were sued by the factor, and may treat the contract in all respects as if the factor were the sole principal.® He may, therefore, ' Story on Agency, § 112 ; Drinkwater v. Goodwin, 1 Cowp. 256 ; John- ston V. Usborne, 11 Ad. & El. 549. " Rabone v. Williams, 7 T. R. 360 ; George v. Clagett, 7 T. R. 359 ; s. c. 2 Esp. 557 ; Baring v. Con-ie, 2 B. & Al. 148 ; Turner v. Thomas, L. E. 6 0. P. 610 (1871). ' Moore v. Clementson, 2 Camp. 22 ; Waring v. Favenck, 1 Camp. 85 ; Maanss v. Henderson, 1 East, 335; Eastcott v. Milward, 7 T. R. 361. It is immaterial that the purchaser had the means of ifcnowledge. Berries v. Imperial Bank, 43 L. J. C. P. 3 (1873'). ■* Story on Agency, § 112 ; Drinkwater v. Goodwin, 1 Cowp. 256 ; John- ston V. Usborne, 11 Ad. & El. 549 ; Franklyn v. Lamond, 4 C. B. 637. ' Paterson v. Gandasequi, 15 East, 62 ; Addison v. Gandassequi, 4 Taunt. 674 ; 2 Kent, Comm. 632. ° Story on Agency, § 420, and cases cited ; Taintor v. Prendergast, 3 Hill, 72 ; Ilsley v. Merriam, 7 Cush. 242 ; Small v. Attwood, Younge, 407, 462 ; Leverick v. Meigs, 1 Cow. 645 ; Smith on Merc. Law, 135 ; Stracey V. Decy, 7 T. R. 361 ; George v. Clagett, 7 T. R. 369 ; Warner v. M'Kay, 1 M. & W. 696. 38-4 PACTOES. [chap. XI. if he did not know of the capacity of the factor, when the sale was made, set off a debt due to him from the factor .^ So, also, the principal may call upon the purchaser to pay over the money to him and not to the factor, and if the latter should pay no heed to such requisition, he would render himself liable to the principal.^ If, however, exclusive credit be given to the factor, the principal could not interfere. The case of a foreign factor is also an exception to this rule ; — as, between himself and the purchaser he is treated as the sole contracting party, and the principal can iieither sue nor be sued upon his con- tract.^ Another exception to this rule also obtains in cases where the lien or claim of the factor upon the property bought or sold, or its proceeds, equals or exceeds the amount or value thereof; and in such a case the rights of the agent are para- mount to those of the principal ; and if the purchaser, after notice thereof, pay over the purchase-money to the principal, he will be liable therefor to the factor.* Where a factor re- ceives instructions, he is bound to comply therewith, and if he sell contrary to the directions of his principal, he becomes per- sonally responsible for the entire amount of the debt.'"" § 438. In the absence of express instructions, the powers of the factor depend upon the usage of trade.® A factor may, ' Parker v, Donaldson, 2 Watts & Serg. 9 ; Hogan ». Shorb, 24 Wend. 458 ; Warner v. M'Kay, 1 M. & W. 595. = Lisset V. Reave, 2 Atk. 394 ; 2 Kent, Comm. 632. ' Story on Agency, § 423 ; New Castle Man. Co. v. Red River Railroad Co., 1 Rob. (La.) 145. But see contra, Kirkpatrick v. Stainer, 22 Wend. 244. * Hudson ». Granger, 5 B. & Al. 27, 32 ; Story on Agency, § 408, 424; Drinkwater v. Goodwin, 1 Cowp. 256 ; Paley on Agency, by Lloyd, 285, 288, 365, 366. * Walker u. Smith, 4 Dall. 389 ; Laussatt u. Lippincott, 6 S. & R. 392. And see Evans v. Root, 3 Seld. 186 ; Day v. Crawford, 13 Ga. 508. ° Etheridge v. Binnoy, 9 Pick. 272 ; Clark v. Van Northwick, 1 Pick. 343 ; West Boylston Manuf. Co. v. Scarle, 15 Pick. 225 ; Goodenow v. Tyler, 7 Mass. 36 ; Clark v. Moody, 17 Mass. 145. See cases cited in the succeeding notes. Dwight v. Whitney, 15 Pick. 179 ; Evans v. Potter, 2 Gall. 13. In this case, which was assumpsit for breach of orders against the master of a ship, who was also consignee of an adventure of the plaintiff's, Mr. Justice Story said ; " A factor is bound to ordinary diligence in relation to the property confided to him. Where his orders leave the management of the property to his discretion, he is bound only to good faith and reasonable conduct. He may lawfully do whatever the course and usage of the trade CHAP. XI.] FACTORS. S85 therefore, in such cases, sell upon credit, if he be justified by the usage of trade in the particular business in respect to which he is agent.^ But in a case where such is not the usage of trade he cannot sell upon credit, without an express authority.^ So, also, he cannot allow other than the usual terms of credit. Nor can he improperly hasten a sale, so as to enable him to cover his advances ; ^ but he must sell at the fair market price.* He may, however, take a negotiable note for the price, payable to himself or order, without rendering him- self personally responsible, provided the note be not beyond the usual period of credit.^ And even if he should include in such note the price of goods sold on his own account, or on account of other principals, this fact alone could not, as it seems, make him personally liable.^ But if, after the usual term of credit has expired, he take a note payable to himself requires ; and, indeed, unless his orders restrict him, he is bound to conform to this course of the trade. In no case can he wantonly sacrifice the prop- erty without being responsible to the shipper. If he can advantageously sell the property, and neglect so to do, he must answer in damages. But if the markets be low, or unusually crowded, if new and unexpected difficulties arise, he is not obliged to sell at all events and under every disadvantage. Neither the interests of commerce, nor the good faith due to his employer, would countenance such a proceeding. Neither can a factor lawfully pledge the property of his principal for his own private debts ; but he may lawfully pledge it for the duties accruing thereon; or for any other purposes which the usage of trade sanctions and approves." 1 Forrestier v. Bordman, 1 Story, 43 ; Van Alen v. Vanderpool, 6 Johns. 69 ; M'Kinstry v. Pearsall, 3 Johns. 319 ; Robertson v. Livingston, 5 Cow. 473; Hapgood v. Batcheller, 4 Met. 573; Kiley v. Wheeler, 44 Vt. 189 (1872). " Forrestier v. Bordman, 1 Story, 43 ; Greely ». Bartlett, 1 Greenl. 172; Scott V. Surman, Willes, 400; Van Alen v. Vanderpool, 6 Johns. 69; Goodenow v. Tyler, 7 Mass. 36 ; Burrill v'. Phillips, 1 Gall. 360 ; Houghton V. Matthews, 3 Bos. & Pul. 489 ; Myers v. Entriken, 6 Watts & Serg. 44 ; Delafield v. Illinois, 26 Wend. 192; s. c. 8 Paige, 527. = Shaw V. Stone, 1 Cush. 228. ■• Bigelow V. Walker, 24 Vt. 149. ' Goodenow v. Tyler, 7 Mass. 36; Greely v. Bartlett, 1 Greenl. 175; Dwight V. Whitney, 15 Pick. 179 ; Goldthwaite v. M'Whorter, 5 Stew. & Port. 289. ' Hapgood V. Batcheller, 4 Met. 573 ; Corlies v. Gumming, 6 Cow. 181 ; Hamilton v. Cunningham, 2 Brock. 351. But see Brown v. Arrott, 6 Watts & Serg. 402 ; Symington v. M'Lin, 1 Dev. & Bat. 291. VOL. 1. 25 386 FACTOES. [chap. XI. at a future day, he renders himself personally liable.' But, where he complies with the usage, he is not liable, although injury ensue. Thus, where a factor, with orders to sell for cash, sold and delivered the goods, but, according to the usage, did not send in his bill until the next day, before which time the purchaser had become insane and did not pay it, it was held that the sale was binding on the principal.^ § 439. Where a factor, being duly authorized to sell on credit, takes a promissory note payable to himself, he takes it in trust for his principal, and subject to his order, and he would not be personally liable thereon, in the event of the insolvency of the purchaser, before payment.^ If, in such case, the factor had guaranteed the sale, the principal would, never- theless, be entitled to claim the note, or to give notice to the purchaser not to pay it to the factor. So, also, if the factor, in sucli a case, should fail or die, the note would not pass to his assignees or representatives, but would enure to the benefit of the principal ; and if his assignees or representatives should receive payment thereof, or should refuse to surrender it to the principal, they would be personally liable to him.* In such a case, however, if the party purchasing from the factor did so without knowledge of the principal, he would be dis- cliarged by payment to the administrators or representatives of the factor.^ The note would, however, be subject, as we shall see, to the lien of the factor for his commission and expenses. § 440. Where a factor malces advances, or incurs liabilities upon a consignment of goods, he may sell them in the exer- ' Wiltshire v. Sims, 1 Camp. 258 ; Illinois v. Delafield, 8 Paige, 527 ; 8. c. 26 Wend. 192 ; 2 Kent, Comm. 622, 623. ' Clark V. Van Northwick, 1 Pick. 343. ^ Messier v. Amery, 1 Yeates, 540 ; Goodenow v. Tyler, 7 Mass. 36 ; Scott V. Surman, Willes, 400 ; 2 Kent, Comm. 623 ; Titeomb v. Bearer, 4 Greenl. 542 ; Edmond v. Caldwell, 15 Me. 340 ; Hapgood v. Batcheller, 4 Met. 573. • De Valengin v. DufFy, 14 Peters, 290 ; Godfrey v. Furzo, 3 P. Wms. 185 ; Ex parte Dumas, 1 Atk. 234 ; Tooke v. HoUingworth, 5 T. R. 226 ; Scott V. Surman, Willes, 400; Kip v. Bank of New York, 10 Johns. 63; Thompson v. Perkins, 3 Mason, 232. " De Valengin v. Duflfy, 14 Peters, 290. CHAP. XI.J FACTORS. 887 cise of a sound discretion and according to the general usage, and reimburse himself for all expenses and liabilities out of the proceeds of the sale ; and the consignor cannot interfere, unless there be some existing arrangement between himself and the factor, which controls or varies this right.^ Thus, if contemporaneously with the consignment, and with the ad- vances and liabilities, orders be given by the consignor, which are assented to by the factor, that the goods shall not be sold until a certain fixed time, the factor is bound by such agree- ment, and cannot sell even to reimburse himself for his liabili- ties and advances, until such time has elapsed.^ So, also, if orders be transmitted not to sell under a fixed price, and they are assented to, the factor cannot sell to reimburse himself for his liabilities and advances, unless, after due notice, the con- signor refuse to provide any other means to reimburse the factor ; ^ and if he do sell, without notice or demand, he will be liable to the consignor for damages arising therefrom.* And, indeed, in no case can the factor sell contrary to orders, so long as the consignor stands ready and offers to discharge his advances and liabilities.^ But when a consignment is ' Brander v. Phillips, 16 Peters, 129; Brown v. M'Gran, 14 Peters, 479. '^ Pothonier. u. Dawson, Holt, N. P. 383 ; Graham v. Dyster, 6 M. & S. 1, 4, 5 ; Brown v. M'Gran, 14 Peters, 495 ; B16t v. Boiceau, 1 Sandf. Ill; 3 Comst. 78; Smart v. Sandars, 3 C. B. 380; 5 C. B. 894; Marfield V. Douglass, 1 Sandf. 860; Marfield v. Goodhue, 3 Comst. 70. But see Parker v. Brancker, 22 Pick. 46, in which a relaxation of this rule was held to obtain in favor of cases where, by reason of an untoward state of the market, the just expectations of both parties had been defeated, in which case the factor was held to be empowered to sell, after a demand upon his principal of repayment and his neglect to repay. 3 Parker v. Brancker, 22 Pick. 46 ; Brown v. M'Gran, 14 Peters, 495 ; Frothingham v. Everton, 12 N. H. 239 ; Tucker v. Wilson, 1 P. Wms. 261 ; Lockwood V. Ewer, 2 Atk. 303 ; Hart v. Ten Eyck, 2 Johns. Ch. 100. ■> Frothingham v. Everton, 12 N. H. 239 ; Parker v. Brancker, 22 Pick 40. ° Brown v. M'Gran, 14 Peters, 495 ; Pothonier v. Dawson, Holt, N. P. 883 ; Graham v. Dyster, 6 M. & S. 1, 4, 5. Brown v. M'Gran was approved in Whitney v. Wyman, 24 Md. 131. The English doctrine goes further than this, and denies to the factor the right to sell contrary to the principal's orders, although the latter neglect on request to repay the advances. Smart V. Sandars, 5 C. B. 894. 388 FACTORS. [chap. XI. made without specific orders as to the time or mode of sale, and the factor incurs liabilities and makes advances, the con- signor cannot, by subsequent orders given after the liabilities are incurred, or the advances are made, suspend or control the factor's right of sale for the purpose of reimbursing himself therefor, except so far as respects the surplus of the consign- ment, not necessary to cover the liabilities and advances.-' This right of the factor vrould especially obtain in cases where the consignor becomes insolvent, and where, therefore, the consignment constitutes the only fund for indemnity.^ ^ Ibid. ; Marfield v. Douglass, 1 Sandf. 360 ; Blarfield v. Goodhue, 5 Comst. 70. " The same general rules as to the duties and powers of a factor are laid down in the Code de Commerce of Holland, articles 80-83, from which we quote the following passage, translated b)' authority from the Dutch original : " Le commissionnaire (art. 80), pour toutes les actions qu'il aurait i exercer contre son commettant, tant pour le remboursement de ses avances, interets et frais, que pour les obligations courantes giCil a confradees pour lui,* aura un privilege sur la valeur des marchandises ou effets que le commettant lui a exp^dies de F^tranger pour 6tre vendus pour son compte, s'ils se trouvent a sa disposition dans ses magasins ou dans un depot public, ou s'ils se trou- vent en sa possession de quelque autre maniere, ou si, avant leur arrivie, il peut constater I'expedition qui lui en a ete faite par un eonnaissement ou par une lettre de voiture." " Le m6me privilege (art. 81) appartient an com- missionnaire auquel out ^te envoyes des marchandises ou effetS dans le m^me but, d'un autre lieu situ6 dans I'int^rieur du royaume, mais seulement et exclusivement pour ses avances, interets et frais, ou pour les obligations cju'il a contract^es par rapport aux marchandises ou eifets sur lesqucls il veut exercer son privilege." " Si les marchandises ou effets (art. 82) ont ete vendus et livres pour le compte du commettant, le commissionaire se rem- boursera sur le produit de la vente, du montant de ses avances, interets et frais, par preference aux autres creanciers du commettant." " Si le commet- tant (art. 83) a envoye de F^tranger au commissionaire des marchandises ou effets, avec ordre de les tenir en depot a sa disposition, ou bien s'il a limite son pouvoir de les vendre, et si le premier est i;este en demeure de satisfaire aux obligations pour lesquelles il est accord^ un privilege aux terraes de Fart. 80, le commissionnaire pourra, sur la production des preuves necessaircs, et sur une simple requite, obtenir du tribunal d'arrondissement de son domicile, de faire vendre les marchandises ou effets sur lesquels il est privilegid, en vente publique, ou par deux courtiers nommes par le tribunal. * This power, which is in the nature of a general lien, is not given by the correspond- ing article of the French Code de Commerce (No. 9.3), or by any of the excellent dispo- sitions of the Spanish code with respect to the rights and liabilities of factors. CHAP. XI.J FACTORS. 389 § 441. But where goods have been consigned to a factor for sale, the transaction would seem to import an obligation on the part of the consignee to give a reasonable credit, so far as concerns a sale of the goods, for all advances made thereon by him, even although the consignment were made without stipulations as to price, time, or mode of sale.^ If, therefore, he should proceed to sell the goods at once, so as to sacrifice the interests of the consignor, without previous demand of payment for his advances, he would expose himpelf to a claim for damages.^ But he is only bound to wait a reasonable time, and he may then proceed to sell, in the exercise of a sound discretion and in good faith, without demanding repay- ment of his advances by the principal, or notifying to him an intention to sell.* Yet the consignee is not bound to wait until the sale of the goods, or to depend thereon solely for his advances, but may immediately maintain an action therefor, unless there be an an agreement to the contrary.* § 442. When the factor is expressly ordered not to sell at all, and he violates his instructions, the damages would be the difference between the actual price received and the highest price the article bore in the market between the reception of the instructions and the commencement of the suit; provided the suit be commenced within a reasonable period after the transaction.^ But where he is ordered to sell at a fixed price, and he violates his instructions, the measure of damages suivant le cours de la bourse ou du marche ; et cela soit en totality, soit en telle partie que le juge ordonnera, selon le montant de la dette." * 1 Dpham V. Leiavour, 11 Met. 183 ; Frotliingham v. Everton, 12 N. H. 239. ' Ibid. 3 Marfield w. Douglass, 1 Sandf. 360 ; Marfield v. Goodliue, 3 Comst. 70. This doctrine does not, however, obtain in England. See Smart v. Sandars, 5 C. B. 894. " Beckwith v. Sibley, 11 Pick. 482 ; Whitwell «. Brigham, 19 Pick., 117. * Marfield v. Douglass, 1 Sandf. 360 ; Marfield v. Goodhue, 3 Comst. 70. * No such power is given by the French code; and the Spanish code (art. 127) says, ahsolutely and without exception, " El comisionista debe sujetarse en el desempeno de su encargo, cualquiera que sea la naturaleza de Co. Litt. 232 6, Butler's note. ' Master v. Miller, 4 T. R. 820 ; Lampet's Case, 10 Co. 48 a ; Thallhimer o. Brinckerhoff, 3 Cow. 623. In Bacon's Abridgment, tit. Obligation, A., it is stated, that " a bond is a chose in action, which cannot be assigned over, so as to enable the assignee to sue in his own name ; 3'et he has, by the assignment, such a title to the paper and wax that he may keep or cancel it." 3 Ibid. ; Stafford v. Buckley, 2 Ves. 177, 181 ; Breverton's Case, Dyer, 30 6; Co. Litt. 232 6, note 1. And see United States v. Buford, 3 Peters, 30. ■* Gibson V. Cooke, 20 Pick. 17. Mr. Justice Dewey, in this case, says : ' ' The doctrine of equitable assignments has been gradually extending to meet the convenience of trade and business, and has been favorably viewed in the courts of law, subject, however, to the legal principle, that in such cases the assignee can enforce his claim only in the name of the assignor, unless there be an express promise by the debtor to pay the assignee. Under this limitation cJioses in action generally may be the subject of an assignment ; and debts which are contingent, and money yet to become due, may weU be assigned, these circumstances only operating to postpone the liability of the debtor until the c.ontingency happens and the money becomes payable." 408 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIT. sideration is treated as a declaration of trust, conferring upon the assignee tlie same riglits against the original debtor as the assignor himself would have had.^ And even if the assign- ment be without consideration, yet, if the debtor has made a new promise to the assignee, this has been held a valid assignment.^ § 466. The doctrine formerly obtained that the instru- ment by which an assignment was made must be of as high a nature as the instrument assigned.^ But this rule has been very much modified, if not quite overthrown, by the late cases, and it seems that the assignment of a contract may- now be ex- ecuted simply by a transfer of the evidence of the contract.'* But there must be an actual delivery, — and a bare agreement to deliver, without any actual or symbolical transfer of the evidence of the contract, would be insufficient. Thus, an in- dorsement on an instrument, directing a debtor to pay to a third person a portion of the amount due, would not be opera- tive as an assignment, so long as the instrument remained in the hands of the creditor, although the debtor had notice of the indorsement.^ § 467. The policy of courts of equity has been to uphold and give effect to assignments in cases whei'e they would not be supported at common law. No particular form is necessary in equity to constitute an assignment ; any order, writing, or act by a creditor, which makes an appropriation of a fund be- ' 2 Story, Eq. Jur. § 1040, 1055 ; Langton v. Horton, 1 Hare, 549 ; Trull V. Ea.-tman, 3 Met. 121 ; Goring v. Biekerstaff, 1 Ch. Gas. s ; 1 Madd. Ch. Prac. 437 ; 1 Fonbl. Eq. B. 1, ch. 4, § 2, and note g ; Com. Dig. Chancery, 2 II. Assignment; Duke of Ghandos v. Talbot, 2 P. Wms. COS; Story on Bills of Ex. § 199, 201 ; Ilinkle v. Wanzer, 17 How. 353 ; Haskell v. Hilton, 80 Me. 419. ' Smilie V. Stevens, 41 Vt. 321 (1868). ' Wood V. Partridge, 11 Mass. 4S8 ; Perkins v. Parker, 1 Mass. 117 ; Brewer v. Dyer, 7 Cash. 338 ; Dennis v. Twitchell, 10 Met. 180. * Jones V. Witter, 13 Mass. 304; Dunn v. Snell, 15 Mass. 481; Dennis V. Twitchell, 10 Met. 180; Ford v. Stuart, 19 Johns. 342; Tibbits v. George, 5 Ad. & El. 107 ; Preseott v. liuU, 17 Johns. 284 ; Bobbins v. Bacon, 3 Greeiil. 346 ; Porter v. BuUard, 26 Me. 448 ; Vose v. Handy, 2 Greenl. 822. And see Currier v. Howard, 14 Gray, 511 (1860). ' Whittle V. Skinner, 23 Vt. 531 ; Palmer v. Merrill, 6 Gush. 282. CHAP. XIV.J CHANGE OP PARTIES BY ASSIGNMENT. 409 longing to him, in tlie hands of the debtor, being sufficient.^ The order should, however, be direct upon the debtor or person holding the funds of the drawer ; and an authority given to a person not privy to the contract to receive and pay over funds in the hands of the debtor, would not constitute a sufficient assignment in equity .^ Thus, where A., the engineer of a rail- way company, being indebted to his banker, wrote to the solici- tors of the company, authorizing them to receive the money due to him from the company, and requesting them to pay it over to the banker, and the solicitors, by letter promised the banker to pay him such money on receiving it, it was held, that the transaction did not constitute an equitable assignment of the debt, the solicitors not being privy to the contract, and that the letter of A. should have been to the company itself.^ ' 2 Story, Eq. Jur. § 10-t3 to 1047 ; Row v. Dawson, 1 Ves. 332 ; Ex parte South, 3 Swanst. 393 ; Morton v. Naylor, 1 Hill, 683 ; Clemson v. Davidson, 6 Binn. 392 ; Crowfoot v. Gurney, 2 Moo. & S. 473 ; 8. c. 9 Bing. 372 ; Ryall v. Rowles, 1 Ves. 348 ; Burn v. Carvalho, 4 Myl. & Cr. 690. ' Rodick V. Gandell, 1 De G. M. & G. 763 ; 15 Eng. Law & Eq. 22, 28 ; Garrard v. Lord Lauderdale, 3 Sim. 1. See post, § 450 et seq. = Rodick V. Gandell, 1 De G. M. & G. 763 ; 15 Eng. Law & Eq. 22. In this oase Lord Truro commented thus on the authorities : "I think the case may properly be decided upon the main ground of equity made by the bill, that is, whether the letters relied upon constitute a vaUd equitable assignment of the debts due from the several railway companies mentioned in those letters, according to the law of this court, as pronounced by Lord Eldon in Ex parte South, 3 Swanst. 392, and by Lord Cottenham in Burn v. Carvalho, 4 Myl. & Cr. 690. " The law relied upon on the part of the bank, as stated by Lord Eldon in the case of Ex parte South, is to the following effect : ' If a creditor gives an order on his debtor to pay a sum in discharge of his debt, and that order is shown to the debtor, it binds him.' The same law is thus pro- nounced by Lord Cottenham, in the case of Burn v. Carvalho : ' In equity an order given by a debtor to his creditor, upon a third person having funds of the debtor, to pay the creditor out of such funds, is a binding, equitable assignment of so much of the fund.' " Numerous cases were cited during the argument, but they all seem to me to be to the same legal effect, although they vary in circumstances. It will, however, be necessary to advert to those cases, so far as to show that they do not extend the principal beyond what it was enunciated, by Lord Eldon and Lord Cottenham, in any way bearing upon the case. " The law, as stated by those learned Judges, was not disputed upon the 410 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIV. § 468. Again, the assent of the debtor is not necessary in equity to give validity to the assignment,^ but it is proper that part of the defendants, who rested their defence upon the ground that tha present case does not fall within that law. " In Ex parte South, 3 Swanst. 392, the order was given by Jane Kow to Alderson, her creditor, directed to the executor of a person indebted to Jane Row, and requiring the executor to pay the debt so owing to Jane Row to Alderson, her creditor. " Lett V. Morris, 4 Sim. 607, was an order by a builder upon his cus- tomer and employer, directing such employer to pay the timber merchant the amount due to him for timber supplied for the work, out of the money which should become due to the builder in respect of the work he was doing. " In Yeates v. Groves, 1 Ves. Jr. 280, Dawson sold certain premises to Groves & Dickenson, and he gave to Brown, his creditor, an order upon Groves & Dickenson, requiring them to pay Brown the amount due to him from Dawson, out of the purchase-money due from Groves & Dickenson to Dawson. " Crowfoot V. Gurney, 2 Moo. & S. 473, was the common case of an order directed to a debtor, and adopted and acted upon by him, directing him to pay the amount due from him to a creditor of the party giving the order. " The other cases cited, which differ somewhat in their circumstances, do not extend the principle of the quoted decision. "The case of Burn v. Carvalho, 4 Myl. & Cr. 690, is before cited; the facts were very simple : Fortunato gave to Burn, bis creditor, an order upon Rego, his agent, who then held goods or money of his, Fortunato, in his hands, directing Rego to pay Burn his debt. So far, the case was of the most ordinary kind ; but although Burn forthwith sent the order out to Rego, yet before it reached Rego, at Bahia, Fortunato became bankrupt, and Fortu- nato's assignees insisted, that by reason that notice of the transaction had not reached Rego before the act of bankruptcy by Fortunato, the goods or funds remained in the order and disposition of Fortunato as apparent owner at the time of the act of bankruptc)', and that under the provisions of the bank- ruj5t statutes, the creditors were entitled to the goods free from the lien. Lord Cottenham held that as Burn had sent out the order as soon as practicable, the goods could not be deemed after the order was sent, to remain with the consent of Burn, who in law had become the true owner, in the order and disposition of Fortunato as apparent owner. That was the only point of diiference in the decision at law and by the Chancellor, and which point in no respects bears upon the present case. "The counsel for the - bank stated they mainly relied upon the case of ' Ex parte South, 3 Swanst. 393 ; Spring v. So. Car. Ins. Co., 8 Wheat. 268-282; Bell v. London & North- Western Railway Co., 15 Beav. 648; 21 Eng. Law & Eq. 566. CHAP. XIV.] CHANGE OP PAETIES BY ASSIGNMENT. 411 notice of the assignment should be at once given to him, in order to save the rights of the assignee, in case of a bond fide Row V. Dawson, 1 Ves. 331. The case is not very distinctly reported, and therefore I have inspected the registrar's books, and it appears that the question in that case was, whether Tonson and Cowdery (two persons who had respectively made advances to Gibson), or the assignees of Gibson, were entitled to receive a certain sum of money then in the hands or under the control of Swinburne, the deputy-controller of the exchequer ; and the rights of the parties depended upon the effect of an order given by Gibson before his bankruptcy to Tonson and Cowdrey, in consideration of present advances made by them. The order was in these terms : ' Out of the money due to me from Horace AValpole out of the exchequer, and what will be due at Michaelmas, pay to Tonson £400, and to Cowdery £200, value received.' The order was immediately lodged with the officer of the ex- chequer, Swinburne, but Gibson became bankrupt before the order was acted upon ; and Gibson's assignees filed their bill, praying that the amount in Swinburne's hands might be paid to them, or if Tonson and Cowdery were entitled to priority, the residue might be paid to them. The Lord Chancel- lor held the document to be an assignment of the fund in the exchequer, of which the only practicable notice was given by service of the order upon the officer of the department, thus reducing the case to the ordinary position of an order upon a debtor or person having funds belonging to the giver of the order, requiring the debtor to pay the debt or fund to the creditor of such giver of the order. The illustrations adopted by the Lord Chancellor mani- fest that he deemed the case to be of the ordinary description 1 have men- tioned. He says : ' Suppose an obligee receives the money on the bond, and writes on the back of it, "Whereas I have received the principal and interest from such an one, do you, the obligor, pay the money to him : " this is just that case.' If the ease of the bond and the case before the court were identical, as the Lord Chancellor states, then the order, in both cases, was in substance directed to the debtor ; and this case materially differs in the fact, that the order to Pinniger and Westmaoott was not an order upon a debtor, or upon a person by whom the debt assigned would be paid ; this is an essential difference in point of fact, and in the legal operation of the instrument. I do not discover that this case extends the principle upon which instruments of the nature of that under consideration have been held to operate as equitable assignments. " Several eases were cited, which do not appear to me to have any ma- terial bearing upon the case. Among them was Ex parte Scudamore, 3 Ves. 86. A power of attorney was given in pursuance of a previous agreement between Shepherd and a creditor. Shepherd granted a po%ver of attorney to Williams, his former partner, to collect partnership debts, and upon trust to pay the creditor out of Shepherd's share. The money was received by the attorney ; and the assignees of Shepherd, who had become bankrupt, disputed the right of the creditor to receive the money from the attorney, 412 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIY. payment to the assignor, or subsequent assignee, without notice.^ So, also, in equity, the assignee may under some cir- according to the trust. No question was discussed whether the trust in the power of attorney in favor of the creditor had the effect of assigning the debts to be collected ; but the sole point in dispute was whether the trust in the power of attorney in favor of the creditor was a fraudulent pref- erence. " In rjtzij,erald v. Stewart, 2 Sim. 333 ; 2 Russ. & Myl, 457, the question was whether the dc'feiidants ought to be held trustees for the plaintiff of the proceeds of certain West India consignments as security for an annuity, and contains nothing applicable to the present case. " In Gibson v. Minet, 9 Moore, 31, Gibson gave to Mintern, his creditor, an order upon Minet, his debtor, to hold £400 at the disposal of Mintern, the creditor ; and the only point discussed in the case was whether the order under the circumstances was revocable. " In Garrard v. Lord Lauderdale, 3 Sim. 1, the question was whether an assignment to A. to collect certain debts, and to pay the proceeds to B., who was no party to the transaction, was an assignment of which B. could entitle himself to the benefit ; it was held that he could not. " The decision in the case of Watson v. The Duke of Wellington, 1 Russ. & Myl. 602, does not appear to me to favor the plaintiff's case. The only point decided was that the letter given by the Marquis of Hastings to Colonel Doyle did not amount to a direction to pay, but was merely an intimation and suggestion, leaving Colonel Doyle the full exercise of his discretion. So far as the case can be deemed to have any bearing upon the present case, it is rather adverse than favorable to the bank. " E.x parte Smith, 6 Ves. 447, has really no bearing upon this case. Hartsink accepted bills upon the securit}' of platina, and the question was, if the agreement between the original parties to the bill enured to the ben- efit of the indorsees of the bills, Hartsink, the acceptor, having become bankrupt, not paying the bills ; and it was held that the indorsees were not entitled to enforce the lien. " I believe I have adverted to all the cases cited which can be considered as having any bearing upon the present case ; and the extent of the prin- ciple to be deduced from them is, that an agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order, directing such person to pay such funds to the creditor, will create a valid equitable ' Stocks V. Dobson, 4 De G. M. & G. 11 ; 19 Eng. Law & Eq. 9G ; Rodick V. GandcU, 1 De G. M. & G. 763 ; 15 Eng. Law & Eq. 31 ; Foster v. Black- stone, 1 1M\1. & K. 2'J7 ; Timson v. Ramshottom, 2 Keen, 35 ; Ward v. Mor- rison, 25 Vt. 593 ; Meux v. Bell, 1 Hare, 73 ; 2 Story, Eq. Jur. § 1047, 1057 ; Williams v. Thorp, 2 Sun. 257 ; Jones v. Witter, 13 Mass. 304. CHAP. XIV.J CHANGE OP PARTIES BY ASSIGNMENT. 413 cumstances ^ sue in his own name, and enforce payment directly against the debtor, making him as well as the assignor a party to the bill.2 § 469. Courts of equity will also support assignments not only of cJioses in action actually existing, but also of possibili- ties and expectancies and contingent rights and interest, not ordinarily assignable at law, provided the transaction be fair, and not contrary to public policy .^ For instance, an assign- charge upon such fund ; in other words, -will operate as an equitable assign- ment of the debts or fund to which the order refers. It therefore becomes necessary to examine whether the letters in question come within the prin- ciple referred to. " I think that a decision, that the authority to Pinniger & Westmacott contained in the letter dated 26th December, 1845, to receive the debt due from the railway companies, and to pay what should be received to the bank, operated as an assignment in equity of the railway debts, would be to extend the principle much beyond the warrant of the authorities ; and I also think that the eifect of such a decision upon the interest of persons giving orders of the like description might be very injurious, and would be contrary to the intention of the parties to the transaction. If an assignment of the debts had been intended, it would have been quite as easy for Gandell & Brunton to have directed the order to the railway companies as to Pin- niger & Westmacott. It rather seems to have been intended that the bank should have no title or interest in the debts until the amount of the debts should have been adjusted, and some definite portion been adjusted and realized. " The letter clearly does not fall within the terms of the principle stated by either Lord Eldon or Lord Cottenham, inasmuch as the order was neither upon a debtor of Gandell & Brunton, nor upon any one holding funds of Gandell & Brunton, nor, as regarded Pinniger & Westmacott, was there any subject-matter upon which the order could presently attach. It was a mere authority to receive, which might or might not be acted upon ; it was not directed to the railway companies, nor to any officer or representative of any of the companies, in any sense to make it available against the com- panies, who might have paid Gandell & Brunton, or any attorney or agent appointed by them, or have arranged for time to pay, or have compromised or compounded at their discretion." ' See Hammond v. Messenger, 9 Sim. 327, in which the subject is fully examined by Shadwell, V. C. ; Ontario Bank v. Mumford, 2 Barb. Ch. 596 * 2 Story, Eq. Jur. § 1057 ; Ex parte South, 8 Swanst. 393 ; Lett v. Morris, 4 Sim. 607 ; Smith v. Everett, 4 Bro. C. C. 64 ; Tiernan v. Jackson, 5 Peters, 598; Townsend v. Carpenter, 11 Ohio, 21. 3 Hartley u. Tapley, 2 Gray, 565 ; Field . Guthrie, 1 Bing. N. C. 697. 416 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIV. ■whale-ship by way of mortgage, and of all oil, head-matter, and other cargo which may be caught and brought home on a that debt should be paid. Again, in Curtis v. Auber (1 Jac. & Walk. 526, 5."1), where an assignment was made of the present and future earnings of a ship, Lord Eldon supported it, and said : ' In one case I think it was held, that although you might assign the wool then growing on the backs of the sheep, you could not assign the future fleeces. But still it was a good equitable assignment, and rendered the future earnings liable in equity.' "The same doctrine was maintained by Mr. Vice-Chancellor Shadwell, in Douglas v. Russell (4 Sim. 524), and his decree was afterwards affirmed by the Lord Chancellor (1 IMyl. & K. 488) , upon appeal, as to an assign- ment of freight earned and to be earned on an outward and homeward voyage, then about to be undertaken. And it was acted upon and sup- ported in a like assignment of freight to be earned on a particular voyage in the case of Leslie v. Guthrie (1 Bing. N. C. 697, 708, 709), where the whole subject was argued at large, in a suit of the assignees under a bank- ruptcy. " But the latest case, and certainly one of the most important and satis- factory in its reasoning, as well as its conclusion, is that of Langton v. Hor- ton (1 Hare, 549), before Mr. Vice-Chancellor Wigram. There a deed of assignment by way of mortgage was made of a whale-ship, and her tackle and appurtenances, and all oil and head-matter and other cargo, which might be caught and brought home in the ship on and from her then present voy- age ; and the question arose between an execution creditor of the assignor, and the assignee, whether the assignment was good as to the future cargo obtained in the voyage after the assignment. The learned Vice-Chancellor decided that it was. Upon that occasion he said: 'Is it true, then, that a subject to be acquired after the date of a contract cannot, in equity, be claimed by a purchaser for value under that contract ? It is impossible to doubt, for some purposes at least, that, by contract, an interest in a thing not in existence at the time of the contract may, in equity, become the property of a purchaser for value. The course to be taken by such pur- chaser to perfect his title, I do not now advert to ; but cases recognizing the general proposition are of common occurrence. A tenant, for example, contracts that particular things, which shall be on the property when the term of his occupation expires, shall be the property of the lessor at a cer- tain price, or at a price to be determined in a certain manner. This, in fact, is a contract to sell property not then belonging to the vendor, and a court of equity will enforce such contracts, where they are founded on valu- able consideration, and justice requires that the contract should be specifi- cally perfoi-med. The same doctrine is applied in important cases of contracts relating to mines, where the lessee has agreed to leave engines and machinery not annexed to the freehold, which shall be on the property at the expiration of the lease, to be paid for at a valuation. The contract applies, in terms, to implements which shall be there at the time specified ; and here neither CHAP. SIV.] CHANGE OF PARTIES BY ASSIGNMENT. 417 whaling voyage.^ Nor is it necessary that the fund assigned be of a definite or ascertained amount. But it has been laid down that where an equitable interest is assigned, in order to give the assignee a locus standi in a court of equity, the party assigning that right must have some substantial possession, some capability of personal enjoyment, and not a mere naked right to overset a legal instrument.^ § 470. Again, in equity, a valuable consideration is not now held to be necessary to support an assignment, provided the instrument of assignment be complete in form, — on the ground that a trust is created tliereby, which is to be distin- guished from a merely voluntary contract.^ But a mere agree- construction nor decision has confined it to those articles which were on the property at the time the lease was granted. ' ' ' But it is not necessary that I should refer to such cases as these, for Lord Eldou, in the case of the ship Warre (8 Price, 269, n.), and in Curtis V. Auber (1 J. & W. 526), has decided all that is necessary to dispose of the present argument. Admitting that those cases are not sjpecifically and in terms like the principal case, they are not of the less authority for the pres- ent purpose ; for they remove the difficulty which has been raised in argu- ment, and decide that non-existing property may be the subject of valid assignment. " ' I will suppose the case of the owner of a ship, which is going out in ballast, proposing to borrow of another party a sura of £5000 to pay the crew and furnish an outfit, and agreeing that, in consideration of the loan, the homeward cargo should be consigned to the party advancing the money. It cannot reasonably be denied, in the face of the authorities I have just referred to, that a court of equity, upon a contract so framed, would hold that the party advancing the money was, as against the owner, entitled to claim the homeward cargo. And if a party may contract for the consign- ment of a homeward cargo, I cannot see why he may not contract with the owner of a ship engaged in the South Sea fisheries, that the fruit of the voy- age, the whales taken, or the oil obtained, shall be his security for the amount of his advances. I cannot, without going in opposition to many authorities which have been cited, throw any doubt upon the point that Bimie, the contracting party, would be bound by the assignment to the plaintiffs.' ' " Now, it seems to me that this reasoning is exceedingly cogent and strik- ing ; and it stands upon grounds entirely satisfactory and conclusive upon the whole subject." ' Mitchell V. Winslow, 2 Storj', 630 ; Langton v. Horton, 1 Hare, 549. ' Per Lord Abinger in Prosser v. Edmonds, 1 Younge & Coll. 496 ; 2 Story, Eq. Jnr. § 1040 g. ' Kekewich i). Manning, 1 De G. M. & G. 176 ; 12 Eng. Law & Eq. 120 i- VOL. I. 27 418 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIV. ment, or executory instrument of conveyance, would not be valid as an assignment, without consideration ; for a court of equity will not intefpose to assist mere volunteers.^ § 471. At faw, the doctrines are by no means so liberal in .cases of assignment, although the differences are in most re- spects merely formal. The assent of the debtor is absolutely required at law in order to enable the assignee to bring an ac- , tion in his own name against him ; ^ and a mere order on him to pay over to a third person the funds of the drawer in his hands, will be insufficient until it is accepted.^ There are, however, certain exceptions which obtain in favor of negotiable instruments, and which are created by, the policy of the law, to answer the demands of public convenience.* If, therefore, a contract be negotiable and payable to order-, it may be assigned by mere indorsement ; and if it be payable to bearer, a simple delivery constitutes a sufficient assignment.^ But the mere Lord Eldon in Pulvertoft v. Pulvertoft, 18 Ves. 84; Ex parte Pye, 18 Ves. 140 ; Dennison v. Goehring, 7 Barr, 179 ; Nesmith v. Drum, 8 Watts & Serg. 10. Kekewich v. Manning was followed in Mayo v. Carrington, 19 Gratt. 124 (18U9), an elaborate case on this subject. ' Ibid. ; Kennedy v. Ware, 1 Barr, 4-30. ' Tibbits V. George, 5 Ad. & El. 115 ; 2 Story, Eq. Jur. § 1041 ; Stocks V. Dobson, 4 De G. M. & G. 11 ; 19 Eng. Law & Eq. 97 ; Meux v. Bell, 1 Hare, 73; CooUdge d. Ruggles, 15 ilass. 3S7 ; Usher.K. D'Wolfe, 13 Mass. 290 ; Williams v. Everett, 14 East, 582 ; Yates v. Bell, 3 B. & Al. 643 ; De Bernales v. Fuller, 14 East, 590, note ; Mandeville v. Welch, 6 Wheat. 277 ; Tiernan v. Jackson, 5 l\-ters, .')97 ; Adams v. Claxton, 6 Ves. 231 ; Scott V, Porcher, 3 Meriv. 662; Jessel v. Williamsburgh In.s. Co., 3 Hill, 88; Gibson V. Cooke, 20 Pick. 17. See post, § 450. ^ Ibid. ; Gibson v. Cooke, 20 Pirk. 15 ; itolibins v. Bacon, 3 Greenl. 346 ; Mandeville v. Welch, 5 \Vheat. ■^l'l. In Gibson v. Cooke, Mr. Justice Dewey says : " An order or draft lor a part only of the liability or debt of the drawee does not, against his, consent, amount to an assignment of any portion of the debt or liability, and does not authorize the institution of a ■suit in the name of the assignor for the whole or any par* of the sum due from tJie debtor; and the reasun of this rule is, that a debtor is not to h.^ve his responsibilities so far varied from the terms of his original contract as to subject him to distinct demands on the part of several persons, when his con- tract was one and entire." A check for a portion of the funds on which it is drawn is no assignment. Moses v. Franklin Bank, 34 Md. 574 (1871). And see BuUard v. Randall, 1 Gray, 605 ; Chapman v. White, 2 Seld. 412. * Gibson v. Cooke, 20 Pick. 17 ; Robbins u. Bacon, 3 Greenl. 346. » Fenner v. Meares, 2 W. Bl. 1269; Israel v. Douglas, 1 H. Bl. 239; CHAP. XIV.] CHANGE OP PARTIES BY ASSIGNMENT. 419 delivery of a note or bill payable to order, without indorsement, is not sufficient.! There may also be cases where the assent of the debtor might be implied from the nature of the transac- tion, — as where property is delivered by a bailee to B. for the use of C, or to be delivered to C, in which case the acceptance of the bailment might be treated as equivalent to an express promise to comply with the terms of the bailment, so as to render any further assent unnecessary .^ But it seems doubt- ful whether, if there be no express promise or act by the bailee, he would be held to be responsible at law to any person but the bailor ,3 though he undoubtedly would in equity.* If, however, Mowry v. Todd, 12 Mass. 283 ; Jones v. Witter, 13 Mass. 307 ; Crocker v. Whitney, 10 Mass. 319; Coolidge v. Ruggles, 15 Mass. 388; Lampet's Case, 10 Co. 48 a; Thallhimer v. Brinckerhoff, 3 Cow. 623 ; Com. Dig. As- signment, D. ; Tiernan v. Jackson, .5 Peters, 597 ; Williams v. Everett, l-l East, 582; Crowfoot v. Gurney, 9 Bing. 372; Hodgson v. Anderson, 3 B. & C. 842; Baron v. Husband, 4 B. & Ad. 611; MandevOle v. Welch, 5 Wheat. 277. ' Freeman v. Perry, 22 Conn. 617 ; Hedges v. Sealy, 9 Barb. 214. ' Story on Bailm. § 103 ; Israel v. Douglas, 1 H. Bl. 242 ; Farmer v. Russell, 1 Bos. & Pul. 296 ; Priddy v. Rose, 3 Meriv. 86, 102. ^ Williams v. Everett, 14 East, 582 ; Tiernan v. Jackson, 5 Peters, 597 ; Pigott V. Thompson, 3 Bos. & Pul. 149, and note (a) ; Martyn v. Hind, 2 Cowp. 437 ; Lilly v. Hays, 5 Ad. «& El. 548 ; Ex parte South, 3 Swanst. 393. Mr. Justice Story (2 Eq. Jur. § 1041)- says: "In the common case where money or other property is delivered by a bailor to B. for the use of C, or to be delivered to C, the acceptance of the bailment amounts to an express promise from the bailee to the bailor, to deliver or pay over the property accordingly. In such a case it has been said that the person for whose use the money or property is so delivered may maintain an action at law therefor against the bailee, without any further act or assent on the part of the bailee ; for a privity is created between them by the original undertaking. But of this doctrine some doubt may perhaps be entertained, unless there is some act done by the bailee, or some promise made bj' him, whereby he shall directly contract an obligation to such person to deliver the money or other property over to him ; otherwise it would seem that the only contract would be between the bailor and his immediate bailee." In his note to this passage he adds : " There is certainly some confusion in the cases in the books on this subject. Lord Alvanley, in Pigott v. Thompson, 3 Bos. & Pul. 149, seems to have thought that if A. lets land to B., in consideration of which B. promises to pay the rent to C, the latter may maintain an action on that promise. But ■• 2 Story, Eq. Jur. § 1041 ; Stocks v. Dobson, 4 De G. M. & G. 11 ; 19 Eng. Law & Eq. 97 ; Meux v. Bell, 1 Hare, 73. 420 CHANGE OF PARTIES BY ASSIGNMENT. [CHAP. XIV. the debtor have notice of the assignment, and assent to it, and promise to pay the assignee, a privity of contract is created between the two parties, and the assignee may sue in his own name ; ^ but otherwise he must bring his action in the name of the assignor ; ^ or if the assignor be dead, in the name of his executor or administrator .^ § 472. Again, an assignment will not, ordinarily, be valid at law, unless the subject of it have an existence, actual or potential, at the time of the assignment.* Mere possibilities, expectancies, or contingent rights and interests are not assign- able at law, unless in special cases where they are coupled with some present interest, and pass by way of release, estoppel, or fine.^ It would seem, however, that the assignment of freight, in the course of earning, would be supported at law.^ Thus, he said that his brothers thought differently. So, in Jlarchington v. Vernon, cited in 1 Bos. & Pul. 101, note, Jlr. Justice BuUer is reported to have said, that if one person makes a promise to another for the benefit of a third, that third may maintain an action upon it. Probably it will be found, upon a thorough examination of the oases, that the true principle on which they have proceeded is that where the promise is construed to be made to A., for the use or benefit of B., A. alone can maintain an action thereon. But if there is a promise in general terms, which may be construed to be made to B. through A., there B. may maintain an action thereon. The cases of Williams r. Everett, 14 East, 582, and Tiernan v. Jackson, 5 Peters, 597, 601, contain the fullest expositions of the doctrine." ' Tibblts V. George, 5 Ad. & El. 115; Crocker v. Whitney, 10 Mass. 316 ; Mowry v. Todd, 12 Mass. 281 ; Warren v. Wheeler, 21 Me, 484 ; Ford V. Adams, 2 Barb. 349 ; De Bern.ales v. Fuller, 14 East, 590, note ; Mande- ville V. Welch, 5 Wheat. 277 ; Barrett v. Union M. F. Ins. Co., 7 Cush. 175 ; Hodges V. Eastman, 12 Vt. 358 ; Barger v. Collins, 7 Hiir. & J. 213. Jessel V. Wiiliamsburgh Ins. Co., 3 Hill, 88; Coolidge v. Ruggles, 15 Mass. 387 ; Stocks v. Dobson, 4 De G. M. & G. 11 ; 19 Eng. Law & Eq. 97. ' Dawes v. Boylston, 9 Mass. 337 ; Cutts v. Perkins, 12 Mass. 206. " Mitchell V. Winslow, 2 Story, 638 ; Langton v. Horton, 1 Hare, 549 ; Robinson v. Macdonnell, 5 M. & S. 228; Lunn v. Thornton, 1 C. B. 379; Moody w. Wright. 13 Met. 17; Fetch p. Tutin, 15 M. & W. 110; Congreve V. Evctts, 10 E,xch. 298; Hope v. Hayley, 5 El. & B. 830; 34 Eng. Law & Eq. 189. ' 2 Story, Eq. Jur. § 1040; Arthur v. Bokenham, 11 Mod. 152; Doe v. Oliver, 10 B. & C. 181 ; Weale v. Lower, PoUe.x. 54 ; Fearne on Conting. Rem. ch. 6, § 5, p. 363 ; Benslcy v. Burdon, 2 Sim. & St. 519. " Leslie v. Guthrie, 1 Bing. N. C. 697, 710. CHAP. XIV.] CHANGE OP PARTIES BY ASSIGNMENT. 421 future wages to be earned under a contract for service, existing at the time of an assignment, may be assigned, although the amount of such wages be then not known.^ But money to be earned under some future engagement, if any should be made, cannot be assigned, there being no right or interest in esse to which the assignment can attach.^ § 473. Courts of law, however, now follow the doctrine of equity, as far as possible, without infringing upon estab- lished principles of common law ; and it has been said that the beneficial interest of the assignee is so far protected that the defendant may set off a debt due to the assignee in like manner as if the suit had been brought in his name.* ' Hartley v. Tapley, 2 Gray, 665 ; Emery v. Lawrence, 8 Cush. 161. See Maccsnber v. Doane, 2 Allen, 541 ; Boylen v. Leonard, ih. 407. ' Mulhall V. Quinn, 1 Gray, 105, Shaw, C. J., said: " The future earn- ings constituted a mere possibility, coupled with no interest. There was no subsisting engagement under which wages were to be earned ; and it de- pended altogether upon a future engagement whether any thing would ever become due. Such was the decision of the judge who tried the cause ; and we are satisfied that it was correct. None of the cases go so far as to hold that the mere possibility of being again employed by the city and of earning wages under that employment at a future time, is capable of being assigned. The debt may be conditional, uncertain as to amount, or contingent, but to be the subject of an assignment there must be an actual or possible debt due or to become due. The assignment of an unliquidated balance is good. Crocker v. Whitney, 10 Mass. 316. A power of attorney, although ir- revocable in terms, does not amount to an assignment when no assignable interest exists at the time. Hall v. Jackson, 20 Pick. 194. The case of Carrique v. Sidebottom, 3 Met. 297, went on the ground, not only that there was no assignable interest, but apparently no interest to assign, and only a power of attorney to receive. In Gardner v. Hoeg, 18 Pick. 168, though it was an assignment of -wages not earned, yet it was for a voyage on which the assignor had shipped for a certain lay or rate of wages to be earned. In the case of Weed v. Jewett, 2 Met. 608, in which the assignment was held good, the assignor was in the actual employment of the company summoned as trustees, and it does not appear whether for a certain time or indefinitely. So in Emery v. Lawrence, 8 Cush. 151, the assignor was in the actual employment of the trustees. The true principle is stated, and the proper distinction taken in Brackett v. Blake, 7 Met. 336. If a party is under an engagement for a term of time to which a salary is affixed payable quarterly, especially if he has entered upon the duties of his office, although at any time liable to be removed, he has an interest which may be assigned." See Twiss V. Cheever, 2 Allen, 40 ; Skipper v. Stokes, 42 Ala. 256. ^ Gorser v. Craig, 1 Wash. C. C. 424, sed qucere. 422 CHANGE OP PARTIES BY ASSIGNMENT. [CHAP. XIV. § 474. Where the assignment is perfected by the assent of the debtor, the assignee stands in place of the assignor. He is entitled to all his remedies, and is subject to all the equities between him and his debtor. And the debtor on his paii; may avail himself of all the equitalile defences he would have had against the assignor, and to none other. ^ § 475. Where there is no fraud, and the subject-matter of the assignment is not created by the assignor, as in the case of a warehouse receipt, bond, or charter-party of a third per- son, it is the duty of the assignee to make inquiries in respect to it ; and the original maker of the security is not bound to volunteer information.^ But if the assignee so give notice of the assignment as to induce a belief that he has been deceived, the creator of the security is bound to inform him of the real circumstances, and unless he do, he cannot be allowed to take advantage of the equities between the assignor and him- self, where they operate as an injury to the assignee.^ If, liowever, the assignee have sufficient notice to put him on inquiry, it is the same as if full notice were given him of any fraud which he might on inquiry have discovered.* § 476. After notice of tlie assignment has been given, the equitable interest of assignees is protected in courts of law against all interference of the original parties.^ If, therefore, the assignment be in good faith and for a valuable considera- tion, neither the bankruptcy of the assignor nor his release will defeat the action of the assignee, although it be brought in the name of the assignor. ^ And if a bond be assigned, the courts ' Mitchell V. Winslow, 2 Story, 630 ; Priddy v. Rose, 3 Moriv. 86 ; Coles V. Jones, 2 Vern. (i!)2 ; jMurray v. Lylburn, 2 Johns. Ch. 441 ; ^lani^les v. Dixon, 3 H. L. C. 702 ; 18 Eng. Law & Eq. .S2 ; Bartlettc. Pearson, 2!) Me. 'J ; Commercial Bank v. Colt, 1.5 Barb. 506 ; Sanborn !'. Little, 3 X. H. 539 ; Wood V. Partridge, 11 ]\Iass. 488 ; Willis v. Twambly, 13 Mass. 204 ; Greene V. Darling, :') Mason, 201. « i^Iangles v. DLxon, 3 H. L. C. 702 ; 18 Eng. Law & Eq. 82. ^ Ibid. ■* Commercial Bank c. Colt, 15 Barb. 506. * Dunrklee v. Greenfield S. IMill Co., 3 Fost. 245; Ahier u. George, 1 Camp. I!92. .See Piiley v. Talier, 9 Gray, o72. " Dix V. Cobb, 4 Mass. 508; Brown v. Maine Bank, 11 Mass. 153; Winch r. Keeley, 1 T. R. 619 ; Blake v. Buchanan, 22 Vt. 648 ; Webb o. Steele, 13 N. H. 230. See post, as to assignments in fraud of creditors. CHAP. XIV.J CHANGE OP PARTIES BY ASSIGNMENT. 423 will set aside a release given by the obligee after notice to the obligor of the assignment, and prevent him from fraudulently interfering to defeat the action. i § 477. Assignments that are illegal or against public policy will be sustained neither at law nor in equity. An assignment, therefbre, by an officer in the army or navy of his pay ,2 or of his commission,^ or by a judge of his salary ; * or an assign- ment which savors of maintenance ; ^ or the assignment of a • right of action for personal tort,^ or of a right to file a bill in equity for a fraud,^ will not be supported. "Within this class are included assignments of contracts for champerty and main- tenance, which 'are considered in a subsequent part of this treatise.^ But where a chattel has been wrongfully converted, the owner may sell it so as to give the vendee a right of action, in his own name against the wrong-doer.^ § 478. It "is held that* contracts for the performance of personal duties or services are unassignable by the employer.^" Where a chose in action is assigned to the- government, no express {)romise is necessary from the original debtor ' Alner v. George, 1 Camp. 892. ■-■ Flarty v. Odium, 3 T. R. 681; Wells v. Foster, 8 M. & W. 149;^ Davis V. Duke of Marlborough, 1 Swanst. 79 ; Stone v. Lidderdale, 2 Anst. ' 533 ; 2 Story, Eq. Jur. § 1040 d to 1040/; Grenfell v. Dean and Canons of Windsor, 2 Beav. 544; M'Carthy v. Goold, 1 Ball & Beat. 387. 3 Collyer v. Fallon, Turn. & Russ. 459. * Flarty v. Odium, 3 T. R. 681. But in Brackett v. Blake, 7 Met. 837, it is held that an assignment of a salary may be made, so as to prevent its attachment upon trustee process. See also Chandler v. Parker, cited in the same case, p. 337. See Waldo a. Martin, 4 B. & C. 319 ; Greville v. Att- kins, 9 B. & C. 462. " Prosser v. Edmonds, 1 Younge & Coll. 481, 496. « Comegys v. Vasse, 1 Peters, 198 ; Gardner ». Adams, 12 Wend. 297 ; Commonwealth v. Fuqua, 3 Litt. 41. A claim for a personal injury is not assignable before final judgment for the same. McGlinchy v. JIall, 58 Me. 152 (1870) ; Rice v. Stone, 1 Allen, 566 ; Linton v. Hurley, 104 Mass. 353 (1870). ' Prosser v. Edmonds, 1 Younge & Coll. 48; ; Morrison v. Deaderick, 10 Humph. 342. 8 See post, § 578, 581. 9 Hall «. Robinson, 2 Comst. 293 ; Webber v. Davis, 44 Me. 147. w Hayes v. Willis, 4 Daly, 259 (1872). 424 CHANGES OF PARTIES BY ASSIGNMENT. [CHAP. XIT. to enable the government to sue in its own name.^ But vhere a claim, barred by the statute of limitations, is assigned to the government, it acquires no new validity thereby.^ 1 Bac. Abr. Prerogative, 2, 3 ; The King v. Twine, Cro. Jac. 180. See also U. S. V. Buford, 3 Peters, 13. • ' United States v. Buford, 3 Peters, 13. CHAP. XV.] CHANGE OP PARTIES BX NOVATION, ETC. 425 CHAPTER XV. CHANGE OP PARTIES BT NOVATION OR SUBSTITUTION. § 479. The term novation, which is borrowed from the Roman law, signifies the substitution, with the agreement of all parties concerned, of one debt for another, or of one party for another. By the Roman law the contract was only termed novatio, when between the same parties a new engagement was substituted for the old one ; but where a new party was intro- duced and substituted for debtor or creditor, the contract bore the name of expromissio. The English term novation, which seems now to be coming in use, comprehends both forms. ^ § 480. There are two modes by which a novation of par- ties may take place. First, where, by agreement between all parties, a new debtor intervenes, and assumes the debt, in which case the old debtor is discharged ; and second, where a new creditor intervenes to whom the same debtor agrees to pay the debt, in which case the new creditor acquires all the rights of the former creditor. In both of these cases the same rules of law apply ; and the substituted contract completely ex- tinguishes the previous one. Thus, " if A. owes B. XlOO, and B. owes C. jElOO, and the three meet and it is agreed between them that A. should pay C. the £100, B.'s debt is extinguished, and C. may recover that sum against A." ^ So, also, where the defendant having purchased a wagon of the plaintiff sold it immediately afterwards to C, and all the parties having met together, it was agreed between them that C. should pay to the plaintiff the price of the wagon, it was held that the debt due from the defendant to the plaintiff was thereby extingiiished.^ ' As to novation the learned reader is referred to Foster v. Dawber. 6 Exeh. 839 ; 3 Am. Law Reg. (n. s.) 65. ' Tatlock V. Harris, 3 T. R. 180, per Mr. Justice BuUer. ' Heaton v. Angier. 7 N. H. 397. 426 CHANGE OF PARTIES BY NOTATION, ETC. [CHAP. XV. So, also- where the plaintiffs were creditors and the defendants were debtors to Taillasson & Co., and by consent of all parties an arrangement was made that the plaintiffs should take the defendants as their debtors instead of Taillasson & Co., it was held, that the plaintiffs were entitled to recover on a count for money had and received against the defendants, the original debt having been extinguished. i So, if A. has a note against B. and C, and in satisfaction thereof takes a note from C. and D., and surrenders the old note, this is a novation.^ § 481. This contract bears a strong affinity to an executed assignment with consent of the debtor ; but in order to avoid the operation of the legal rule that a chose in action is not assignable so as to give the assignee a right of action in his own name, it is treated as a new contract, the consideration of which is the convenience resulting from the substitution of new parties, — the distinction being between the assignment of an old contract and the inception of a new one. In order, therefore, to constitute a strict novation, as the contract is un- derstood in the civil and Roman law, it is necessary that there should be an express assent of all jjarties, an express promise and acceptance between the new parties, and an entire relin- quishment of all claim on, or responsibility to the original creditor. It would not be a pure novation so long as the original creditor had any authority over the subject-matter, or either party had any claim on him, or responsibility to him.^ In the examples just given it will be observed that the ground of the decision was the entire extinguishment of the original debt. § 482. It is manifest that a strict novation but rarely takes place, although contracts in the nature of novations are ' Wilson V. Coupland, 5 B. & Al. 228. See also Thompson r. Percival, 5 B. & Ad. 925 ; Evans v. Drummond, 4 Esp. 89 ; Reed v. White, 5 Esp. 122. In these cases the debtor was accepted by the drawee as solely- responsible. See also Butterfield v. Hartshorn, 7 IST. H. 345 ; Whartou v. Walker, 4 B. & C. 163. See post, § 573. ' Gresham v. Morrow, 40 Ga. 487 (1869). ' In Justinian Institutes it is said (Lib. 3, tit. 30, § 3), "Solum nova- tionem prioris obligationis fieri, quoties hoc ipsum inter contrahentes expres- sum fuerit, quod propter novationem prioris obligationis convenerunt; alioqui et manere pristinam obligationem et secundam ei accedere." CHAP. XV.J CHANGE OP PARTIES BY NOVATION, ETC. 427 of frequent occurrence in the English law. "Within this term all drafts or orders for the payment of money or transference of merchandise to extinguish a debt, may, with a little lati- tude, be considered to fall, as, though not answering to the exact definition, they are, in many cases, subject to the same rules as govern novations. Where an order drawn by a credi- tor on his debtor, in favor of a third person, to pay over any amount in his hands belonging to the debtor, is accepted by all parties, it operates, ordinarily, as a conditional extinguish- ment of the debt, in case the order is actually complied with.i It may, however, be specially accepted by the third person as an absolute payment of his debt, in which case the con- tract is a pure novation. § 483. In respect to the rights and liabilities of parties where an order or draft upon a debtor is given in favor of a third person, the decisions are extremely conflicting. In a considerable number of cases it has been held, that the mere assent of the debtor on whom the order is drawn and an in- dorsement or transference by him on his books of the amount in favor of the third person, is sufficient to destroy the right of the original creditor to revoke the order, and to appropriate the sum to the third person.^ But this has been strenuously denied in nearly all the more modern English cases, and it has been repeatedly affirmed that the assent of all the parties is necessary to create such a privity of contract as would entitle the third per- son to recover, and would disable the drawer of the order from revoking it; and the ground of this rule is, that until the debtor and third person have assented to and interchanged promise and acceptance, the debtor is the mere mandatee of the drawer.^ A stricter doctrine has, however, been asserted in ' Cuxon V. Chadley, 3 B. & C. 591 ; post, § 1343, 1350, ^ This doctrine was held in Weston v. Barker, 12 Johns. 281 (Spencer, J., dissenting); Neilson v. Blight, 1 Johns. Cas. 205; Israeli). Douglas, 1 H. Bl. 239 (spoken of with disapprobation in Taylor v. Higgins, 3 East, 169, and Johnson e. Collings, 1 East, 98) ; Ward v. Evans, 2 Ld. Raym. 928 ; Fenner v. Meares, 2 W. Bl. 1269 ; Surtees v. Hubbard, 4 Esp. 203 ; Hall w. Marston, 17 Mass. 575 ; Gibson v. Minet, 2 Bing. 7. ' Scott V. Porcher, 3 Meriv. 652 ; Crowfoot v. Gurney, 2 Moo. & S. 473, 480 ; 9 Bing. 372 ; Hodgson v. Anderson, 3 B. & C. 842 ; Williams v. Eve- 428 CHANGE OP PARTIES BY NOVATION, ETC. [CHAP. XV. several cases, in which it lias been held, that not only the assent of all parties is required, but that the contract should clearly be considered by them as an extinguishment of the debt so far as the original parties were concerned ; ^ or, in other rett, U East, 582 ; Yates v. Bell, 3 B. & Al. 643 ; Mowry v. Todd, 12 Mass. 28-i ; Meert v. Moessard, 1 Moo. & P. 11 ; Gibson v. Cooke, 20 Pick. 15 ; Owen v. Bowen, 4 C. & P. 93. In this ease A. gave a sum of money into the hands of B. to pay to C, and it was ruled by Lord Tenterden, in an action against B. by A. to recover the money, that unless C. had consented to look to B. for the payment of that sum, A. was entitled to recover. In Baron v. Husband, 4 B. & Ad. 613, Lord Denman says : " The defendant received the money as the agent of the assignees and not of the plaintiff; he held it subject to their control and directions, and would continue to be accountable to them until he entered into some binding engagement with the plaintiff to hold it for his use. As soon as that engagement was entered into, and not until then, he would hold the money to the plaintiff's use. This is the doctrine laid down in A\'illiams v. Everett, 14 East, 582 ; Whar- ton V. ^Valker, 4 B. & C. 163 ; Scott v. Porcher, 3 Meriv. 652 ; Wedlake v. Hurley, 1 Cr. & J. 83." See also Maxwell v. Jameson, 2 B. & Al. 55 Drake v. Mitchell, 3 East, 251 ; Walker v. Eostron, 9 M. & W. 418, 420 Robertson v. Fauntleroy, 8 Moore, 10 ; Burn v. Carvalho, 1 Ad. & El. 883 Fairlie v. Denton, 8 B. & C. 395 ; Enthoven v. Hammond, 1 Com. Law, 22 22 Eng. Law & Eq. 476 ; Barlow v. Browne, 16 M. & W. 126. In MaxweU V. Jameson, 2 B. & Al. 55, one of the makers of a joint and several promis- sory note, after it had become due, gave his bond to the holder for the amount, but before the commencement of the action no money was actually paid on the bond; and it was said by Mr. Justice Holroyd, "In order to support this action [assumpsit for money paid], the debt must have been extin- guished either by an actual or a virtual payment of monej- by the plaintiff to the defendant's use. There has clearly been no actual payment ; and in order to have made the giving of the bond operate as a virtual payment, the defendant must he shown to haoe been a paiiy to that transaction, which was not the case." See Pickens v. Hathaway, 100 Mass. 247 ; Wrin-ht v. Law- ton, 37 Conn. 167 (1870). ' Wilson V. Coupland, 5 B. (fe Al. 228. In Wharton v. Walker, 4 B. & C. 164, Mr. Justice Bayley, commenting on this case, says: " The case of Wilson V. Coupland is very distinguishable from the present. There the defendants were originally indebted to Taillasson & Co. for money had and received, and Taillasson & Co. were indebted to the plaintiffs, and with the consent of all parties it was arranged that the plaintiffs should take the de- fendants as thuii- debtors. By that arrangement the demand against Taillas- son & Co. was extinguished, and the defendants having been indebted to them for money had and received, it was held that the plaintiffs might recover in that form of action. In the present case no money was ever had and received by the defendant to the use of any person, which objection existed in Israel v. Douglas, and has caused the propriety of that decision to be CHAP. XV.J CHANGE OF PARTIES BY NOVATION, ETC. 429 words, a strict novation of the debt is necessary to found a right on the part of the third person to recover against the drawee. since doubted. But there is another objection to the present case. If, by an agreement between the three parties, the plaintiff had undertaken to look to the defendant and iiot to his original debtor, that would have been binding, and the plaintiff might have maintained an action on the agreement ; but in order to give him that right of action there must have been an extinguish- ment of the intermediate debt. No such bargain was made between the parties in this case. Upon the defendant refusing to pay the plaintiff, the latter might still sue Lythgoe, and this brings the case within Cuxon v. Chad- ley." It is to be observed, however, that the ground upon which the judg- ment of the court in Wilson v. Coupland was founded, was not that the original debt was extinguished, but only that there was an " absolute prom- ise " between the plaintiff and defendant, and it is nowhere admitted in the case that th% original parties were unconditionally released. Mr. Justice Best says: "A chose in action is not assignable without the consent of all parties. But here all parties have assented, and from the moment of the assent of the defendants, it seems to me that the balance of £768 became money had and received to the plaintiff's use. It is said that the promise was conditional. That may, perhaps, be doubtful, but supposing it to be conditional, the event has happened upon which it became absolute.'' The case really decides nothing more than that where the drawee makes an absolute promise to pay, he renders himself liable to the holder of the order. See also Ford v. Adams, 2 Barb. 349, 350. In this case the declaration averred that J. S., being indebted to the plaintiff, made an order to the defendant to deliver the plaintiff a certain quantity of wood, and that the defendant accepted the order and promised J. S. to deliver the wood. But it was held on demurrer that the action was not maintainable, and the court said : * ' The defendant's acceptance of the order, and his promise as stated in the declaration, were without any consideration, and therefore void. This case cannot be likened to one where a debt due upon a bond, or any other contract not negotiable, has been assigned, and the debtor makes an express promise to pay. In such a case the assignee can, in his own name, in a court of equity, compel the payment of the debt. The debtor, in such a case, is under a moral and equitable obligation to pay the debt to the assignee ; and that obligation is a sufficient consideration for his promise to pay the debt. Compton v. James, 4 Cow. 13. But in this case the plaintiff is not the assignee of the debt due from the defendant to Jacob Schyer. The order which he held gave him no equitable right to compel the defend- ant to deliver to him any wood, nor was the defendant by reason of the order under a,ny moral or equitable obligation to deliver any wood to Jacob Schyer or to the plaintiff. He received nothing for his acceptance of the order and his promise to deliver the sixty cords of wood. The debt due from him to Jacob Schyer was not thereby satisfied in whole or in part ; and 430 CHANGE OP PARTIES BY NOVATION, ETC. [CHAP. XV. § 484. The true result of the English cases would seem to be, that the assent of the three parties is necessary to create a had the defendant delivered the sixty cords of wood to the plaintiff, he could not have discharged the defendant from the whole or any part of the debt due to JacDb Schyer. The plaintiff gave no consideration to Jacob Schyer for the order, nor to the defendant for his acceptance of the order, and his promise to deliver the wood. If the defendant had, in consideration of his owing $200 to Jacob Schyer, promised to deliver to him sixty cords of wood, the promise would have been without consideration, without a promise on the part of Jacob Schyer that he would accept the wood in satis- faction of part or the whole of the debt due to him." In this case it will be observed that there was no privity of contract between the plaintiff and the drawee, and no reciprocal promise and acceptance between them, which, of itself, would bring the case within the decisions requiring assent of all par- ties, without going so far as to require an utter extinguishment of the debt. See also Thomas v. Shillibeer, 1 M. & W. 124 ; French v. French, 3 Scott, N. R. 125; 2 Man. & Grang. 644; Short v. City of New Orleans, 4 La. An. 281 ; McKinney v. Alvis, 14 III. 34. In Butterfield v. Hartshorn, 7 N. H. 345, an action of assumpsit was brought by the plaintiff to recover an amount claimed against the estate of a person deceased. The executor sold a farm belonging to the estate to the defendant, and left in the defendant's hands a portion of the purchase-money to pay the plaintiff and other credi- tors their demands against the estate, which the defendant promised the executor to pay ; but it was held that the plaintiff could not recover. Upham, J., said, in delivering the judgment: "The principal question in this case is whether the plaintiff can avail himself of the promise made by the defendant to the executor, he never having agreed to accept the defend- ant as his debtor, nor having made any demand on him for the money prior to the commencement of this suit." " In cases of this kind a contract, in order to be binding, must be mutual to all concerned, and until it is completed by the assent of all interested, it is liable to be defeated, and the money deposited countermanded." Tims far this case proceeds exactly upon the grounds of the decisions cited in the previous note, and the doctrine laid down is amply sufficient to support the judgment. But the learned judge continues: "It seems also to be clear that no contract of the kind here attempted to be entered into can be made, without an entire change of the orii;inal rights and habilities of the parties to it. There is to be a deposit of money for the payment of a prior debt, — an agreement to hold the money for this purpose, and an agreement on the part of a third person to accept it in compliance with this arrangement. It is made through the agency of three individuals for the purpose of payment ; and it can have no other effect than to extinguish the original debt, and create a new liability of debtor and creditor betwixt the person h(51ding the money and the indi- vidual who is to receive it. On any other supposition there would be a duplicate liability for the same debt ; and the deposit, instead of being a payment, CHAP. XV.J CHANGE OF PARTIES BY NOVATION, ETC. 431 reciprocal right and obligation between the drawer and the person in whose favor the order is drawn, but that the absolute extinguishment of the original debt would not be required. The taking of a draft or order would seem to operate as a conditional payment of the debt, and when accepted by the drawee, it would be binding as between him and the holder, so as provisionally to exclude the original drawer ; but on non- payment by the drawee, the condition failing, the holder of the draft would have a right to recur to the original creditor.^ would be a mere collateral security, — which is totally different from the avowed object of the parties. " What proceedings will constitute an assent to this contract, and discharge the original debtor ? Will a demand of the money have this effect ? An individual who should receive advices from his debtor of a deposit of money for his benefit, would hardly deem a demand of the money, accompanied by a refusal of payment, a discharge of the prior debt. A suit to recover money is no more decisive evidence of an election to receive it than a demand ; and the bringing of a suit cannot be considered evidence of an assent to a contract, and thereby support the action, which had no foundation until it was brought. ' ' To entitle the plaintiff to recover, there must be an extinguishment of the original debt; and it is questionable whether in cases of this kind, any thing can operate as an extinguishment of the original debt but payment, or an express agreement of the creditor to take another person as his debtor in discharge of the original claim." See also Scott v. Porcher, 3 Meriv. 652 ; and Baron v. Husband, 4 B. & Ad. 614. ' In Bedford v. Deakin, 2 B. & Al. 210, one of three pai-tners, after a dissolution of partnership, undertook by deed to pay a particular partner- ship debt on two bills of exchange, and that was communicated to the holder, who consented to take the separate notes of one partner for the amount, strictly reserving his right of action against all three, and retained possession of the original bills, the separate notes having proved unproduc- tive ; it was held that the creditor might still resort to his remedy against the other partners, and that the taking the separate notes and receiving them several times, did not amount to a satisfaction of the joint debt. In delivering the judgment, Mr. Justice Bayley says: "In this case, all the three partners originally were jointly liable to this debt ; and no arrange- ment between themselves can vary the right of the creditor. That right, however, may be destroyed by the creditor consenting to accept of the sep- arate security of one partner in discharge of the joint debt, and that is the foundation of the decision in the two cases cited from Espinasse's Reports ; but there is no such consent here. The three notes which the plaintiff took from Bickley (two of which have been successively renewed, but one not) Cannot amount to a satisfaction of the joint debt ; unless, first, they were 432 CHANGE OP PAETIES BY NOVATION, ETC. [CHAP. XT. The mere conditional claim against the original creditor would not, on principle, seem to interfere with the holder's when taken by the plaintiff, intended by him as a satisfaction for it ; or unless, secondly, the conduct of the plaintiff has, without the fault of Deakin, produced mischief to him." See also Wilson v. Coupland, 5 B. & Al. 231. The same rule, also, was laid down in Robinson u. Read, 9 B. & C. 449. In Reed v. White, 5 Esp. 122, where the separate bill of one owner of a vessel was taken for a claim against the vessel, Lord Ellenborough said : " If the plaintiff, dealing with White separately, has adopted him, he has discharged the others." "The question is, whether it was intemled as a settlement with Jiim alone, and adopting him as the single debtor.^' See post, § 979, 979 a. See also Cuxon v. Chadley, .S B. & C. 591. In this case J. C. being indebted to S., and R. C. being indebted to S. and also to J. C, it was verbally agreed between the three that S. should transfer the debt due to him from J. C. to the account of R. C, and S., in pursuance of such agreement, delivered to R. C. an account in which he (R. C.) was charged with the debt due from J. C. to S., and it was held that J. C. was not thereby discharged ; and the ground of this judgment was, that there was no proof of any agreement as between S. and J. C. to extinguish the original obligation, the mere entry in the books not having that effect. Ab- bott, C. J., said : " S. is not proved to have said, ' I will take you, Robert, as my debtor, and discharge James ; ' he is not proved ever to have said or done that which would have the effect of discharging J." " I consider the entry [' to your brother's account, £14 Is.'] made by S. to mean no more than this : ' I will debit the account of R. for £14 Is., not, I will discharge J. at all events from this sum.' It amounts, at most, to an accord, but cer- tainly not to a satisfaction." In Tatlock v. Harris, 3 T. R. LSO, a biU of exchange was drawn by the defendant and others, on the defendant alone, in favor of a fictitious person (which was known to all parties concerned in drawing the bill), and the defendant received the value of it from the second indorser ; and it was held that a bona fide holder, for a valuable considera- tion, might recover the amount of it in an action against the acceptor, for money paid or money had and received. Lord Kenyon, in delivering the judgment of the court, says : "In making this decision we do not mean to infringe a rule of law which is very properly settled, that a chose in action cannot be transferred ; but we consider it as an agreement between all the parties to appropriate so much property to be earned to the account of the holder of the bill ; and this will satisfy the justice of the case without infring- ing any rule of law.'' In Drake v. Mitchell, 3 East, 257, one of three joint covenantees gave a bill of exchange for a part of a debt secured by the covenant, on which bill judgment was recovered ; and it was held that the judgment was no bar to an action of covenant against the three, though stated to have been given for the payment and in satisfaction of the debt, not being averred to Tiave been accepted as satisfaction, nor to have produced it in fact. Lord Ellenborough says : " One may agree to accept of a different CHAP. XV.] CHANGE OP PARTIES BY NOVATION, ETC. 433 right against the drawee, and there seems to be no sufficient reason to require its absolute extinguishment. The holder would, of course, be bound primarily to look to the drawee, and to omit no proper steps to obtain payment ; and, until the condition failed, would have no right as against tlie original drawer. There may, of course, be cases where an order is taken as absolute payment ; and whether it be or not is a ques- tion of fact for a jury to determine. ^ But ordinarily, in the common transactions of business, the taking of an order is not understood to amount to a discharge of the principal. Of what value would the order be, if the holder could not compel pay- ment by the drawee ? and why, to render it available, should he be obliged absolutely to abandon his original claim ? There is no reason why he should not hold both. If col- lateral or secondary security may be held, why not primary security ? It is clearly established that the taking of a bill of exchange, drawn upon a third person, only operates as a con- ditional payment, and may be sued against the drawee if ac- cepted, — why the same rule should not apply to cases of mere orders, it is difficult to perceive. At all events, this doctrine would seem to be supported by the main body of authorities, and to be best supported on principle. The objection that without an extinguishment of the original debt, there is no consideration to uphold the new promise of the drawee, seems scarcely tenable. The obvious consideration is, the right of the drawer to make the order, the existence of the debt, and the convenience resulting from the change of parties. The drawer has an undoubted right to give the order, and the lia- security in satisfaction of his debt, but it is not stated here that the hill and note were accepted in satisfaction." See also Hennings v. Rothschild, 4 Bing. 334; Ward v. Evans, 2 Ld. Raym. 928; Hawley v. Foote, 19 Wend. 516. ' Thompson v. Percival, 5 B. & Ad. 982, where a separate bill was given for a joint debt, Lord Denman said : " It appears to us that the facts proved raised a question for the jury, whether it was agreed between the plaintiff and James, that the former should accejrt the latter as their sole debtor and should take the bill of exchange accepted by him alone, by way of satisfac- tion for the debt due from both." The same point is ruled in Reed ». White, 6 Esp. 122. See previous note. But see Evans v. Drummond, 4 Esp. 89 ; and BailHe v. Moore, 8 Q. B. 497 ; Gififord v. Whittaker, 6 Q. B.. 249. VOL. I. 28 434 CHANGE OP PARTIES BY NOVATION, ETC. [CHAP. XV. bility of the drawee is sufficient consideration. The same con- sideration supports the original and the subsequent promise.^ § 485. In America, as well as in England, there has been no little fluctuation concerning the right of a stranger to enforce a promise made for his benefit. But it has been very recently held, upon a consideration of the authorities, that the general rule of law is, that a person who is not a party to a contract, and from whom no consideration moves, cannot sue on the contract, and that consequently a promise made by one person to another, for the benefit of a third person who is a stranger to the consideration and promise, will not support an action by the latter .^ But there is said to be an exception to the rule in those cases in which the defendant has in his hands money which in equity and good conscience belongs to the plaintiff; and other exceptions have been suggested.^ And where > Lilly V. Hays, 5 Ad. & El. 550. See post, § 57i. ' Exchange Bank v. Rice, 107 Mass. 37 (1871). When such a promise is within the statute of frauds, see Brightman v. Hicks, 108 Mass. 246 (1871). ' Ibid. In this case the plaintiffs were indorsees of a bill of exchange. After the plaintiffs had taken the bill, the defendants, who were the drawees of the same, and had dishonored it, promised the drawer to accept the bill upon the arrival of cotton, which was afterwards received ; and upon this promise the defendants were sued. Mr. Justice Gray, who delivered the judgment of the court, after stating the rule as given in the text, proceeded to say: " The unguarded expressions of Chief Justice Shaw in Carnegie v. Morrison, 2 Met. 381, and Mr. Justice Bigelow in Brewer v. Dyer, 7 Cash. 337, to the contrary, on which the learned counsel for the plaintiffs relied at the argument, were afterwards, and while those two distinguished judges continued to hold seats upon this bench, qualified, the limits of the doctrine defined, and a disinclination repeatedly expressed to admit new exceptions to the general rule, in unanimous judgments of the court, drawn up by Mr. Justice Mi'tcalf, and marked by his characteristic legal learning and cau- tious precision of statement. Mellen v. Whipple, 1 Gray, 317 ; Millard v. Baldwin, 3 Gray, 484; Field v. Crawford, 6 Gray, 116; Dow t-. Clark, 7 Gray, 198. Those judgments have since been treated as settling the law of Massachusetts upon this subject. Colburn v. Phillips, 13 Gray, 64 ; Flint v. Pierce, 99 Mass-. 68. "The first and principal exception stated by Mr. Justice Metcalf to the general rule consists of those cases in which the defendant has in his hands money which in equity and good conscience belongs to the plaintiff; as where one person receives from another money or property as a fund from ■which certain creditors of the depositor are to be paid, and promises, either CHAP. XV.J CHANGE OP PAETIES BY NOVATION, ETC. 435 the defendant accepts the money or property, and promises the plaintiff to hold it to his use, he thereby constitutes him- expressly, or by implication from his acceptance of the money or property without objection to the terms on which it is delivered to him, to pay such creditors. That class of cases, as was pointed out in 1 Gray, 322, includes Carnegie v. Morrison and most of the earlier cases in this Commonwealth ; as well as the later cases of Frost v. Gage, 1 Allen, 262, and Putnam v. Field, 103 Mass. 656. " The only illustration which the decisions of this court afford, of Mr. Justice Metcalf's second class of exceptions, is Felton v. Dickinson, 10 Mass. 287, in which it was held, in accordance with a number of early Eng- lish authorities, and hardly argued against, that a son might sue upon a promise made for his benefit to his father. Those cases, with the proposition on which they have sometimes been supposed to rest, that, by reason of the near relationship between parent and child, the lattet might be thought to have an interest in the consideration and the contract, and the former to have entered into the contract as his agent, are not now law in England. Tweddle v. Atkinson, 1 B. & S. 393 ; Addison on Con. (6th ed.) 1040 ; Dicey on Parties, 84. And this case does not require us to consider whether they ought still to be followed here. " The third exception admitted by Mr. Justice Metoalf is the case of Brewer v. Dyer, 7 Cush. 337, in which the defendant made a written prom- ise to the lessee of a shop to take his lease (which was under seal) and pay the rent to the lessor according to its terms, entered into possession of the shop with the lessor's knowledge, paid him the rent quarterly for a year, and then, before the expiration of the lease, left the shop, and was held liable to an action by the lessor for the rent subsequently accruing. That case may perhaps be supported on the ground that such payment and receipt of the rent, after the agreement between the defendant and the lessee, war- ranted the inference of a direct promise by the defendant to the lessor to pay the rent to him for the residue of the term. See McFarlan v. Watson, 3 Comst. 286. It certainly cannot be reconciled with the later authorities without limiting it to its own special circumstances, and affords no safe guide ill the decision of the present case. " The plaintiffs are then obliged to fall back upon the first exception to the general rule. But they fail to bring their case within that exception, or within any of the authorities to which they have referred us. " In Carnegie v. Morrison, 2 Met. 381, the defendants, having funds in cash or credit of the plaintiffs' debtor, gave him a letter of credit, which was shown to the plaintiffs, and on the faith of which they drew the bill for the amount of which they sued the defendants ; and the drawing of that bill, whereby they made themselves liable to the drawer thereof, was a consid- eration moving from them. In Lilly v. Hays, 5 Ad. & El. 548 ; 8. c. 1 Nev. & Per. 26, the defendant, as the jury found, had authorized the plaintiff to be told that the defendant had received the money to his use, and thus prom- 436 CHANGE OP PARTIES BY NOVATION, ETC. [CHAP. XV. self agent of the plaintiff ; and the agency is said to be the consideration for the promise. ^ But if the defendant act ised the plaintiff to pay it to him. So in Walker v. Rostron, 9 M. & W. 411, the defendant had promised the plaintiff to pay the sum in question. And the rule established by the modern cases in England, as laid down in the text-books cited for the plaintiffs, does not permit the person for whose benefit a promise is made to another person from whom the only consider- ation moves to maintain an action against the promisor, unless either the latter has also made an express promise to the plaintiff, or the promisee acted as the plaintiff's agent merely. Met. Con. 209 ; Addison on Con. (6th ed.) 630, lOil ; Chit. Con. (8th ed.) 53. Where the promisee is in fact acting as the agent of a third person, although that is unknown to the promisor, the principal is the real party to the contract, and may therefore sue in his own name on the promise made to his agent. Sims v. Bond, 5 B. & Ad. 889 ; s. c. 2 Nev. & Man. 608 ; Huntington v. Knox, 7 Cush. 371 ; Berry V. Page, 10 Gray, 398; 'Hunter v. Giddings, 97 Mass. 41; Ford v. Wil- liams, 21 How. 287. "In the case at bar the plaintiffs had acquired no title in the cotton against which the draft was drawn. The bill of lading was not attached to the draft, or made payable to the holder thereof, or delivered to the plain- tiffs. The case is thus distinguished from Allen v. Williams, 12 Pick. 297, and Michigan State Bank v. Gardner, 1.5 Gray, 362, cited at the argument. The cotton was not of sufficient value to pay the draft, and the balance of account between the defendants and the drawer, at the time of their receipt and sale of the cotton, and ever since, was in favor of the defendants. There is no ground therefore for implying a promise from the defendants to the plaintiffs to pay to them either the amount of the draft or the proceeds of the cotton. Tiernan v. Jackson, .5 Peters, 580 ; Cowperthwaite v. Sheffield, 1 Sandf. 416, and 3 Comst. 243; Winter v. Drury, 1 Seld. 525; Yates v. Bell, 3 B. & Aid. 643. The plaintiffs did not take the draft or make ad- vances upon the faith of any promise of the defendants, or of any actual receipt by them of the cotton or the bill of lading, but solely upon the faith of the drawer's signature and implied promise that the defendants should have funds to meet the draft. The whole consideration for the defendants' promise moved from the drawer and not from the plaintiffs. And the defend- ants made no promise to the plaintiffs. Their only promise to accept the draft was made to Hill, the drawer, after the draft had been negotiated to the plaintiffs ; and there is no proof that the defendants authorized that prom- ise to be shown to the plaintiffs, or that Hill, to whom that promise was made, was an agent of the plaintiffs. His relation to them was that of drawer ' Lilly V. Hays, 5 Ad. & E. 548 ; Exchange Bank v. Rice, and notes, supra. CHAP. XV.] CHANGE OP PARTIES BY NOTATION, ETC. 437 merely as agent of the debtor in the matter, he will be person ally liable, it seems, only in case of an express promise to the plaintiff.! and payee, not of agent and principal. To infer, as suggested in behalf of the plaintiffs, that he was their agent in receiving the defendants' promise, so that they might sue them thereon in their own name, would be imsupported by any facts in the case, and would be an evasion of the rules of law, which will not allow any person who took the draft before that promise was made to , maintain an action upon that promise, either as an acceptance or a promise to accept." The facts of several late New York cases may bring them within the principal exception above mentioned, by which the right of action of a third person is allowed. See Delaware & Hudson Canal Co. ». Westchester Co. Bank, 4 Denio, 97 ; Dingeldein v. Third Avenue R. Co., 37 N. Y. 575 (1868) ; Hall v. Robbins, 4 Lans. 463; 61 Barb. 33 (1871); Lawrence v. Fox, 20 N. Y. 268 (1859). The rule of the liability of the defendant is, however, usually stated without qualification in these and other cases. See also Lilly v. Hays, 5 Ad. & E. 648. In this case money had been put into the hands of the defendant for the plaintiff, to whom the defendant said he would pay it ; and the facts were communicated to the plaintiff by the de- fendant's authority. The defendant on being sued objected that there was no consideration from the plaintiff; but the objection was overruled. Pat- terson, J., said: "The only question is upon the alleged want of consid- eration moving from the plaintiff. It is true that the rule of law requires such a consideration in all cases, though in an action for money had and received a direct consideration is seldom shown. But suppose that a debtor sent money to a general agent for the creditor, would there be any doubt that, as soon as the'agent received it, he would be accountable to the cred- itor for it, as money had and received to his use ? Would it be an answer that there was no consideration moving from the creditor to the agent ? Or is it not a consideration if the money is sent to a general agent for the cred- itor, and received by him, he informing the creditor of it. That is the case here. The money was sent by Wood to the defendant ; he admitted hold- ing it for the plaintiff's use, and said he would pay it him. There is a con- sideration moving here through the instrumentality of Wood, the original debtor, to the defendant as agent for the plaintiff." Coleridge, J. : "The facts here show that the defendant was the agent of the plaintiff; that agency supplies the consideration." ^ Bigelow V. Davis, 16 Barb. 561 ; Jackson v. Stevens, 108 Mass. 94 (1871), and note 3, supra. See also Colvin v. Holbrook, 2 Comst. 126; Merritt v. Johnson, 7 Johns. 472 ; Cobb v. Becke, 6 Q. B. 930. 438 CHANGE OP PABTIES BY NOVATION, ETC. [CHAP. ST. § 486. Again, in England as well as in America, there is a somewhat different class of cases, wherein a special trust is created by the agreement, from which a privity of the third person arises by implication ; — as where the agreement relates to some property or thing belonging to the third person, or in respect to which he has a special interest, and the considera- tion grows out of the use of such property .^ Thus, where It is doubtless correct in cases like Lilly v. Hays to say that the agency between the parties establishes the consideration ; but that is a somewhat obscure statement. The meaning seems to be, that the creditor, on receiv- ing information of the transaction of his debtor, and accepting the promise of the defendant, is influenced thereby to change his position towards the fomier, and conditionally to relinquish his right of action against him. By accepting the new situation he thus puts himself to an inconvenience in respect of his original claim ; and this furnishes the consideration for the defendant's promise. ' In Pigott I'. Thompson o Bos. & Pul. 149, Lord Alvanluy said : " It is not necessary to discuss whether if A. let land to B., in consideration of which the latter promises to pay the rent to C, his executors and adminis- trators, C. may maintain an actisiguees CHAP. XV.] CHANGE OF PARTIES BY NOVATION, ETC. 439 premises belonging to the third person are sub-let, the under- tenant agreeing to pay over the rent to the landlord without privity of the latter, it has been held that the landlord may sue tlie sub-tenant for the rent.^ So it was in an early case held, that where the defendant, being a remainder-man, prom- ised a father who was about to fell timber for the purpose of raising a portion for his daughter, that if he would forbear to do so, the defendant would pay the daughter £1000, the daughter could maintain the action.^ But the cases of this class have been overruled in England, and denied in America ; and it is now held that nearness of relationship and conse- quent interest in the promise are not sufficient to raise a privity of contract.^ of the drawee, on a promise made by the bankrupt to the drawee that he •would honor the bill, Mr. Justice BuUer said, that "independent of the rules which prevail in inorcantile transactions, if one person makes a promise to another for the benefit of a third, that third person may maintain an action on it." In this case the third person had a special interest in the subject- matter of the contract. See also Carnegie v. ilorrison, 2 Met. 381 ; Bell v. Chaplain, Hardr. 321 ; Bigelow v. D.ivis, 16 Barb. 564; Arnold v. Lyman, 17 Mass. 400 ; Sohemerhorn v. Vandcrhcyden, 1 Johns. 140 ; Gold v. Phil- lips, 10 Johns. 412 ; Farley v. Cleveland, 4 Cow. 432 ; Barker v. Bucklin, 2 Denio, 55. ' Brewer v. Dyer, 7 Cush. 337 ; Mellen v. Whipple, 1 Gray, 323. But see Exchange Bank v. Rice, 107 Mass. 37 (1871), in which some doubt is thrown upon the authority of Brewer v. Dyer. • Button V. Pool, 1 Vent. 318 ; s. c. 2 Lev. 210. Of this case Lord Mansfield said, in Martyn v. Hind, Cowp. 443; s. c. 1 Doug. 146: "It is difficult to conceive how a doubt could be entertained in the case of Dutton V. Poole." See also RookwootJ's Case, Cro. Eliz. 164, which was similar in its circumstances. Sometimes these cases are put upon the ground of near- ness of relationship, as by Scroggs, C. J., in 2 Lev. 211, in which he says : " There is such apparent consideration of aifection from the father to his children, for whom nature obliges him to provide, that the consideration and promise to the father may well extend to the children." But it is rather the special interest that children have in the property, than the aflfection, which creates the true privity of consideration in these cases. See also Levet v. Hawes, Cro. Eliz. 619, 662 ; Bourne v. Mason, 1 Ventr. 6. ■> Tweddle v. Atkinson, 1 B. & S. 393 ; Addison, Contracts, 1040 (6th ed.); Dicey, Parties, 84; Griffith v. Ingledew, 6 Serg. & R. 429, 442; Metcalf, Contracts, 208; 1 Smith's L. C. 142 (6th Eng. ed.). See Ex- change Bank v. Rice, 107 Mass. 37, 42. 440 CHANGE OP PARTIES BY NOVATION, ETC. [CHAP. XV. § 487. It is proper here to consider that class of cases where orders are given upon depositaries, such as wharfingers and ware- housemen, to deliver specific goods sold to the purchaser. It is the custom for the vendor to give these orders in writing to the vendee, who sends them to the depositary for acceptance ; and when accepted by him, he becomes the bailee for the purchaser.-^ But it would seem, in these cases, to make no difference, as to the legal result, whether the order be sent by the purchaser or by the seller. In either case, the acceptance of the order, and the transference on the books of the depositary, would vest the title to the goods in the purchaser .^ A distinction is, therefore, to be observed between these cases in which the order relates to specific goods, which must be distinguished from all other similar goods, and cases where the order relates to a sum of money, which may be paid in any coins of the country. In the former case the order gives a special interest in certain defi- nitely ascertained articles, and in the latter it could only occa- sion a general responsibility for the sum stated ; and this distinction may be the reason for the different rule which obtains in England in the two classes of cases. § 488. In all cases of novation where, by assent of all parties, there is a new promise between the substituted parties, and an extinguishment of the old debt, the contract is not an undertaking to pay the debt of a third person, within the ' Scudder v. Worster, 11 Cush. 573 ; Gillett v. Hill, 2 Cr. & Mees. 5.36 ; Harman v. Anderson, 2 Camp. 243; HoU v. Griffin, 3 JIoo. & S. 732; s. c. 10 Bing. 246; Whitehouse v. Frost, 12 East, 621; Lickbarrow v. ]\Iason, 6 East, 20, n. See post, § 1031; Hammond v. Anderson, 1 Bos. & Pul. N. R. 69. 2 In Bryans v. Nix, 4 M. & W. 791, Parke, B., saj's : "If the inten- tion of the parties to pass tbe property, whether absolute or special, in certain ascertained chattels is established, and they are placed in the hands of a depositary, no matter whether such depositarj' be a common carrier, or shipmaster employed by the consignor, or a third person, and the chattels are so placed on account of the person who is to have that property, and the depositary assents, it is enough ; and it matters not by what documents this is effected ; nor is it material whether the person who is to have the property be a factor or not ; for such an agreement may be made with a factor, as weli as any other individual." Salter v. Woollams, 3 Scott, N. R. (i5 ; 2 Man & Grang. 650. CHAP. XV.] CHANGE OP PARTIES BY NOTATION, ETC. 441 meaning of the statute of frauds.^ And where the novation is complete, it is not affected by fraud in the original debtor. Thus, if A. buys property of B. through B.'s fraudulent represen- tation, and gives a note to C. for the full amount, in discharge of a debt due from B. to C, the latter, if innocent of the fraud, may recover the whole amount of A.'s note against him.^ • Bird V. Gammon. 3 Bing. N. C. 883; Read v. Nash, 1 Wils. 305. » Morris v. Whitmore,- 27 Ind. 418 (1866). 442 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. CHAPTER XVI. MUTUAL ASSENT OF THE PARTIES. § 489. The next subject which we propose to consider is the assent of the parties to a contract. There are three requisites to legal assent : namely, it should be mutual ; it should be without restraint ; it should be understandingly made, and without error or mistake. We shall consider, therefore, the qualities which characterize consent, under three heads : name- ly, 1st. Mutuality of Assent ; 2d. Duress ; 3d. Mistake. § 490. In order to create a contract, it is essential that there should be a reciprocal assent to a certain and definite proposi- tion.! So long as any essential matters are left open for further consideration, the contract is not complete ; ^ and the minds of the parties must assent to the same thing in the same sense.^ A mere offer not assented to, constitutes no contract, for there must be not only a proposal, but an acceptance thereof.* So ' If one party attaches to a proposition of the other a signification not authorized by reasonable inference or fair understanding, what injury results from the misunderstanding must fall upon him. Thompson ». Ray, 46 Ala. 224 (1871). SafTold, J. 2 Brown v. New York Central Railroad, 44 N. Y. 79 (1870). See also Lyman v. Robinson, 14 Allen, 254; Rid;;w:iy «.. Wharton, 6 H. L. C. 268. A paper signed by persons engaged in a particular trade, as follows : " We, the undersigned, hereby agree to pay our share of costs, equally divided, for the purpose of engaging counsel and to bring our cases before the courts," does not create a contract with an attorney to whom a portion of the sub- scribers, deliver the paper, without the knowledge of the others ; at least such a paper cannot be enforced against the other subscribers. Smith i'. Duch- ardt, 45 N. Y. 51)7 (1871)-. ^ Hartford & N. H. Railroad v. Jackson, StfeC'onn. 614. * Tucker v. Woods, 12 Johns. 190 ; Jackson v. Galloway, 5 Ring. N. C. 75, 76 ; Rowell v. Montville, 4 Greenl. 270 ; Johnson v. Kin;;, 2 Ring. 270 ; Cope V. Albinson, 8 Exch. 185; 16 Eng. Law & Eq. 470, and Bennett's note ; Gaunt v. Ilill, 1 Stark. 10 ; Eskridge v. Glover./i Stew. & Port. 264 ; Governor, &c. v. Fetch, 10 Exch. 610; 28 Eng. Law & Eq. 470. Where one party made a written proposition to another to do certain work for him, and the latter purchased some materials for the work, but which might be as CHAP. XVI.J MUTUAL ASSENT OP THE PARTIES. 443 long as a proposal is not acceded to, it is binding upon neither party, and may be retracted.^ Thus, where A. applied to an insurance company for insurance, and agreed upon the rates to be paid, and the policies were made out, but not delivered, because A. refused to accept them or sign the notes, it was well used for other purposes, and began the work, but gave no notice to the other of his acceptance of the proposition, it was held to be no binding contract, since a mere mental determination to accept would not be sufficient. White V. qorlies, 46 N. Y. 467 (1871). ' In an action for services in selling an estate for the defendant, it appeared that the defendant told the plaintiff that he would give him a cer- tain sum if he would obtain a purchaser ; that the plaintiff, who was not a broker, neither did nor said any thing at the time to show that he accepted the offer, but within a few days told J. S. that the defendant wanted to sell, and took him to see, but did not find, the defendant ; and that afterwards J. S. bought the estate, but the defendant did not know till after the sale that the plaintiff had done any thing to aid it. The Supreme Court of Mas- sachusetts held that there was evidence for the jury of a continuing offer, of an acceptance, and of a performance by the plaintiff of the contract thus formed. Bornstein v. Lans, 104 Mass. 216 (1870). " The case," say the court, " was evidently tried in the Superior Court, upon the assumption that there was no valid contract between the parties, and that there was a mere proposition on the part of the defendant, without any acceptance on the part of the plaintiff, so that their minds never met on the subject-matter. But we think that an offer which is in its nature continuous and open for some period of time, and which is also conditional upon an event which may not immediately happen, but must at aU events be attended with some delay, becomes a valid con- tract on good consideration, if accepted in fact, and upon the fulfilment of the condition, within a reasonable time and before an actual retraction of the offer. In Train v. Gold, 5 Pick. 380, 384, the court (Wilde, J.) say : ' Nor is it necessary that the consideration should exist at the time of making the promise ; for if the person to whom the promise is made should incur any loss, expense, or liability in consequence of the promise, and relying upon it, the promise thereupon becomes obligatory. Thus if A. promises B. to pay him a sum of money if he will do a particular act, and B. does the act, the promise thereupon becomes binding, although B., at the time of the promise, does not engage to do the act. In the intermediate time the obli- gation of the contract or promise is suspended ; for until the performance of the condition of the promise there is no consideration, and the promise is nudum pactum; but on the performance of the condition by the promisee, it is clothed with a valid consideration, which relates back to the promise, and it then becomes obligatory.' See also Goward v. Waters, 98 Mass. 596. The converse of the proposition is laid down in Ball v. Newton, 7 Cush. 599, in which case it was held that a written promise to pay certain fees is not binding, and cannot be enforced in favor of a party who rendered the services without any knowledge of or reliance upon such promise." 444 MUTUAL ASSENT OP THE PARTIES. [CHAP. XVI. held that he might retract, and that the bargain was not com- pleted. ^ And if one party offers to transport merchandise not exceeding a certain quantity, at a certain rate, during certain months in the year, and the other party replies, merely accepting the terms, but does not engage to send any merchandise, there is no completed contract between them.^ Nor does it matter by what mode assent is expressed, provided it be intelligible. Thus, it may be given by a nod, by shaking hands, taking off a shoe, or drawing a shilling across the hand, all of which are signs of ratification among different nations.^ Again, a blow of the hammer at an auction sale is sufficient to complete the contract, unless the offer be retracted before the hammer is down.* So, also, a contract may be created between deaf and dumb persons, so as to be completely obligatory, by any signs which are reciprocally intelligible ; for assent may be as per- fectly given by means of pantomime as by the more refined hieroglyph of words. A contract may be made by telegram,^ and the contract is complete when the acceptance or telegram is forwarded.^ But if the message is not properly transmitted, the sender is bound by it only as he sent it, and not as it was erroneously transmitted by the telegraph operator.'^ And the extent to which telegrams are to be treated as written contracts depends much upon the circumstances under which they are sent, and the intent and object for which they are trans- mitted.^ § 491. So, also, the silence of either party will import assent to the terms of a contract, whenever it would have been incum- bent on him to express his dissent, if he did not agree thereto ; ' Real Estate M. F. Ins. Co. v. Roessle, 1 Gray, 336. « Chicago, &<■., Railway r. Dane, 43 N. Y. 240 (1870). ' 2 Black. Comm. 448 ; Toullier Hubbard v. Coolidge, 1 Met. 93 ; Train v. Gold, 5 Pick. 380 ; Toullier des Contrats, § 32. ' Thruston v. Thornton, 1 Cush. 89. ^ Johnson v. Fessler, 7 Watts, 48. * See Peru v. Turner, 1 Fairf. 185, where sLs years afterwards was held an unreasonable time. ° Mactier v. Frith, 6 Wend. 103 ; Beckwith v. Cheever, 1 Post. 41 ; Peru V. Turner, 1 Fairf. 185. * Freeman v. Boston, 5 Met. 56 ; Lancaster v. Walsh, 4 M. & W. 16 ; Thatcher v. England, 3 C. B. 254; Gerhard v. Bates, 2 El. & B. 476; 20 Eng. Law & Eq. 133 ; Williams v. Carwardine, 4 B. & Ad. 621. See also Janvrin v. Exeter, 48 N. H. 83 (1868) ; Crawshaw v. Roxbury, 7 Gray, 874 ; Crowell v. Hopkinton, 45 N. H. 9 ; Fitch v. Snedaker, 38 K. Y. 248 (1868) ; Jones v. Phoenix Bank, 4 Seld. 228 ; Morse v. Bellows, 7 N. H. 549; Wentworth o. Day, 3 Met. 352; Symmes v. Frazier, 6 Mass. 344; Fallick V. Barber, 1 M. & S. 108. Officers as well as others who comply with an offer of reward for information which will lead to the conviction of persons, may recover the reward. See Neville v. Kelly, 12 C. B. (n. s.) 740; Smith v. Moore, 1 C. B. 438; England v. Davidson, 11 Ad. & El. 856. 446 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. however, that the offer of a reward must have been known and acted upon by the party claiming it, before he performed the service on which he founds his claim. There is no mutual assent or agreement, unless such knowledge exists.^ Such an offer of reward is not, however, to be considered as unlimited in time, and continuing until a formal withdrawal is made, but to be restricted to what, under the circumstances, is a reasona- ble time.^ But an offer of reward to a public officer to do what it is incumbent on him to do by law, is not binding, because it is contrary to public policy.^ § 494. A circular offer for sale of a stock in trade, with a conclusion that " tenders will be received and opened at our office," does not bind the party to accept the highest bid, although no right be expressly reserved to decline all bids.* § 495. If, by the terms of an offer, a certain time be pre- scribed, within which it may be accepted by the other party, it must be accepted within that time. The rule of law is, that the party making such an offer may retract it at any time pre- vious to its acceptance by the other party, and an acceptance subsequent to such retraction would create no contract, although it should be within the time originally prescribed ; and the ground upon which this rule is said to be founded, is that the offer being merely gratuitous, there is no sufficient con- sideration to support it, until it is accepted.^ Thus, where A. proposed to exchange horses with B., and to give B. a specific sum as difference, upon which proposition B. had the privilege of reserving his determination until a certain day, and before that day A. retracted his proposal, it was held that B. could not ■ Fitch V. Snedaker, 38 N. Y. 248 (1868). ' Loring v. Boston, 7 Met. 409. ' Pool V. Boston, 5 Cush. 219 ; Smith v. Whildin, 10 Barr, 39. See also post. " SpenCLT V. Harding, Law R. 5 C. P. 561 (1870), distinguishing Wil- liams V. Canvardine, 4 B. & Ad. 621; Thatcher u. England, 3 C. B. 254; Tarner «. Walker, Law R. 1 Q. B. 641 ; Law R. 2 Q. B. 301. = Eskridge v. Glover, 5 Stew. & Port. 264; 20 Am. Jur. p. 15-32; Cooke V. Oxley, 3 T. R. 653 ; Routledge r. Grant, 4 Ring. 661 ; Payne v. Cave, 3 T. R. 148 ; Boston & Maine Railroad v. Bartlett, 3 Cush. 225 ; Wright V. Bigg, 15 Beav. 592 ; 21 Eng. Law & Eq. 591 ; Jordan v. Norton, 4 M. & W. 155. CHAP. XVI.] MUTUAL ASSENT OP THE PARTIES. 447 enforce against him his proposal, it not having been accepted before it was withdrawn.^ So, also, where X. offered to pur- chase a house of Z., and gave him six weeks to consider whether he would accept it or not, it was held that X. could retract his proposal at any time within the six weeks, before it was accepted.^ The assent of the party having the option of accepting or rejecting such an offer must be either express or necessarily implied from his acts or words, in order to bind the party making the proposal. And if he be silent, or do no act manifestly expressive of assent, no contract arises.^ § 496. It would, however, seem to be more consonant with justice, and with the agreement of the parties, to enforce a different rule, and to hold, that whenever an offer is made, granting to a party a certain time within which he is to be en- titled to decide as to whether he will accept it or not, the party making such offer is not at liberty to withdraw it before the lapse of the appointed time, unless by agreement with the other. The reason which is given, that the offer is without consideration and gratuitous until accepted, does not seem to be well founded. The consideration is the expectation or hope, that the offer will be accepted, and this is sufficient legally to support the promise. The agreement is, therefore, to be looked upon as an engagement by the one party, that he will not sell within a certain time, in consideration that the other party will consider the matter, and not give a refusal at once. Again, the making of such an offer might betray the other party into a loss of time and money, by inducing him to make examina- tion, and to inquire into the value of the goods offered ; and this inconvenience assumed by him is a sufficient consideration for the offer.* Suppose that, on faith of the offer, he pro- ' Eskridge v. Glover, 6 Stew. & Port. 264. ' Routled^e v. Grant, 4 Bing. 661. ' Corning v. Colt, 6 Wend. 253. , * Com. Dig. Action on the Case, Assumpsit, B. ; Violett v. Fatten, 6 Cranch, 142, 152; Knight v. Rushworth, Cro. Eliz. 469; Brooks v. Ball, 18 Johns. 837 ; Perkins v. Binke, 2 Sid. 123 ; Traver v. , 1 Sid. 57 ; Brett ». Pretyman, 1 Sid. 283 ; Loo v. Burdeux, 1 Sid. 369 ! Train v. Gold, 6 Pick. 384; Willetts v. Sun Mut. Ins. Co., 45 N. Y. 45' (1871). See also White v. Demilt, 2 Hall, 405; Babcock v. Wilson, 17 Me. 872; Appleton v. Chase, 19 Me. 74. In Violett v. Patton, 5 Cranch, 142, it is said by Mr. Chief Justice Marshall: "To constitute a 448 MUTUAL ASSENT OP THE PARTIES. [CHAP. XTI. ceed to make arrangements to enable him to purchase, or to make calculations to determine whether he is in a condition to buy, or whether the offer is worth accepting, and is fairly ex- erting his best judgment on the matter, is there any justice in allowing the other party to interfere and break his promise, after inducing a loss of time, or money, or convenience ? Nor does this view of the matter want authority. The doctrine con- tended for has been asserted by Toullier in France, and obtains in Scotland and Holland.^ " In Prance," says Toullier, " when he who makes an offer has fixed a determinate time for accept- ance, or has expressly or tacitly engaged not to revoke before the answer of the other party, the promise is not revocable during the terms ; so, if I offer to you 100 pipes of wine at a certain price, and add, that I wait your answer before selling them to another, I cannot revoke my offer before the time necessary for having your answer. But if that answer is un- duly delayed, I regain my freedom, which I had suspended only for a limited time."^ Professor Bell, also, in his late work on Sales, reprobates the English rule. " It seems inconsistent," he says, " with the plain principles of equity, that a person who consideration, it is not necessary that a benefit should accrue to the person making the promise. It is sufficient that something valuable flows from the person to whom it is made, and that the promise is the inducement to the transaction." So, in Train v. Gold, it is said, "Any gain to the promisor, or loss to the promisee, however trifling, is a sufficient considera- tion to support an express promise ; " and this is affirmed in all the cases above cited. The mere fact that the consideration is trifling, is not suffi- cient to render the promise gratuitous. In the case in question, if there were no consideration for the promise, what inducement could there be for the oflerer to make his offer ? It must be evident that he expecteil an ad- vantage, or hoped it at least. See post, for the doctrine as to what consti- tutes a sufficient consideration. Again, it is not true that all gratuitous promises are void. Exceptions are allowed in cases of salvage, and of a mandate, and of the contracts by infants, and of work and labor done, with the acquiescence of the party in whose favor it is done, though without his order, and in some cases of subscriptions. See Phillips Limerick Acad. v. Davis, 11 Mass. 113; Story on Bailm. § 137, 164; Abbott on Shipping, pt. 4, ch. 10. Voluntary subscriptions are valid. See Mirick v. French, 2 Gray, 420. ^ Code de Commerce de HoUande. Dispositions Generales, art. 1, p. 65; 1 Stair, 3, 9. " Toullier, Droit Civ. Frangais, p. 33, No. 30. CHAP. XVI.] MUTUAL ASSENT OF THE PARTIES. 449 has been induced to rely on such an engagement, should have no remedy in case of disappointment. If, for example, a mer- chant propose to sell to another a cargo of sugar or of tobacco, and agree to give him a certain time to determine whether he will buy the goods or not, engaging not to dispose of them till the time has elapsed, and in the meanwhile he dispose of them, and disappoint the person to whom the promise has been made, who may have rejected an advantageous offer from another dealer, it seems unjust that, for the disappointment thus oc- casioned, there should be no remedy. The only answer to this in the English law, appears to be, that no one is entitled to rely on a unilateral engagement gratuitously made and without consideration. But one cannot help feeling that a rule so dif- ferent from what commonly happens in the intercourse of life raises that inconsistency between law and justice which is sometimes complained of. The subtleties of lawyers never ought to interfere with the common sense and understanding of mankind ; and the law is on a better footing where an en- gagement, seriously made, is enforced by the law without regard to the motive from which it proceeds." § 497. Again, it is difficult to see why the same rule should not apply to cases where a proposal is made with a privilege to the other party to accept within a given time, that applies to sales " on trial." Sales " on trial " are executory contracts of sale, in which it is agreed that the proposed purchaser shall take the article of sale for a certain space, " on trial," with the privilege of returning it, in case it do not suit him. And, in these cases, if the seller allow to the purchaser a definite time for trial, the rule is, that he cannot, by any retraction of his offer, deprive the other of the right of trial during the whole term ; or of the privilege of accepting the article at any time before the time has elapsed.^ Nay, the rule goes even further than this, and allows the proposed purchaser to change his mind any number of times, and state different decisions to the other during the term, unless he return the article, or clearly break off the negotiation by a final refusal. § 498. In the next place, a proppsal may not only be made 1 Ellis V. Mortimer, 1 Bos. & Pul. N. R. 257 ; Humphries v. Carvalho^ 16 East, 45 ; Reed v. Upton, 10 Pick. 622. TOL. I. 29 4i>0 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. personally, but by means of agents^ or letters, in case the parties are at a distance from each other. And in such cases, the rule is, that if the proposition be made in writing, and sent by the post, the person making the offer can retract by a subsequent letter reaching the other party at any time before an answer of acceptance is written and put in the mail. But as soon as such answer is placed in the mail, the contract is completely closed as to both parties. Although, therefore, a letter containing a retraction of the offer be actually on the way at the time when the letter of assent is mailed, yet the contract is closed, unless such letter of retraction be received prior to the mailing of the letter of assent. An acceptance by written communication takes effect from the time when the letter containing the acceptance is sent, and not fi'om the time when it is received by the other party.^ And the person as- ' And tlie letters of agents may be sutHcient to constitute a contract bt'twei'u the principals. See Cowley v. Watts, 17 Jur. 172 ; 17 Eng. Law & Eq. 147. " The Court of Kind's Bencb, in the case of Adams v. Lindsell, 1 B. & Al. 681, conclusively settled this to be the English doctrine. The case was this : The defendants, by letter, offered to sell to the plaintiffs certain spec- ified goods, " receiving an answer in course of post." The letter, being misdirected, arrived two days later than it ought, and was immediately answered by the plaintiff accepting the offer; but in the mean time, the goods had been sold to a third pcrsnn. It was held, that as soon as the letter of arceptancc was written and put in the mail the bargain was per- fected, and nothing remained to be done but to deliver the goods, which was not essential to complete the sale. The court disregarded the case of Cooke V. Oxlcy, 3 T. R. 054, which decides the contrary doctrine, and which is so inaccurately and deficiently reported that it is of little weight as an authority. Indeed, from the remarks of Baylcy, J., in Humphries v. Carvalho, 16 East, 48, it would seem that the ground of the decision in Cooke V. O.xley was, that " there was only a proposal of sale by one party, and no allegation tliat the other jiarty had acceded to the contract of sale," which harmonizes the case with the other authorities. The rule enunciated in the text has, since the last edition, been held in Hamilton v. Lycoming Ins. Co., 5 Barr, '.V.YJ ; Levy v. Cohen, 4 Ga. 1. Sec also Potter v. Sanders, 6 Hare, 1; Dunlop v. Higgins, 1 H. L. C. 381; 12 Jur. 295; Tayloe V. iVIerchants' Fire Ins. Co., 9 How. 390 ; Duncan v. Topham, 8 C. B. 225 ; The Palo Alto, Daveis, 344; Vassar v. Camp. 14 Barb. 341, and 1 Kern. 441'; Beckwith v. Cheever, 1 Fogt. 41; Averill u. Hedge, 12 Conn. 436; Kentucky Ins. Co. v. Jenks, 5 Ind. 96; Halleck u. Commercial Ins. Co., 2 Dutch. 280; Lungstrass v. German Ins. Co., 48 Mo. 201 (1871). But see Gillespie v. Edmonston, 11 Humph. 553. Dunlop v. Higgins, 1 CHAP. XVI.J MUTUAL ASSENT OP THE PARTIES. 451 senting cannot, therefore, even stop his letter on the road after it is once mailed.^ But a retraction takes effect when the letter H. L. C. 881, was commented on in British & Am. Tel. Co. v. Colson, Law R. 6Exch. 108 (1871). The Supreme Court of Massachusetts has, however, maintained the doc- trine, that no acceptance is binding until knowledge of it has reached the other party. The case, in which this point was decided, is M'CulIoch v. The Eagle Ins. Co., 1 Pick. 278, and is as follows : The insurance company, on the first day of January, offered by letter to insure the brig of the plaintiff on certain terms. On the next day the offer was retracted by another letter. On the third day the first letter containing the proposal was received by the plaintiff, and an answer accepting it was immediately put in the mail, before the letter revoking the offer was received. The letter containing the retraction, and that containing the acceptance, crossed each other on the road ; and it was held that there was no contract. The reason- ing of the court is as follows : " The offer did not bind the plaintiff until it was accepted, and it could not be accepted to the knowledge of the defend- ants until the letter announcing the acceptance was received, or at most until the regular time for its arrival by mail, had elapsed. Had the vessel arrived in safety on the 2d, or on the morning of the 3d, the plaintiff would not have accepted the offer, and was not bound to Acept, so that the de- fendants would not have been entitled to any premium, and both must be bound in order to make the contract binding upon cither, unless time is given by one to the other," &c. The first proposition in this reasoning is only a new definition of the term " acceptance," which the law has already defined differently ; and if it be correct, it seems impossible that a contract by letter should ever be com- pleted ; since, if the defendants were not bound until they had received notice of the acceptance, by a parity of reasoning, the plaintiffs were not bound until they had received information that their acceptance was acceded to ; and inasmuch as neither party could ever be sure that the other party had not retracted by a letter then upon the way, no contract would ever arise. This is the reasoning of the court in Adams v. Lindsell, and seems satisfac- ' This may be considered the well-settled doctrine, notwithstanding a few decisions inclining the other way. See Townsend's Case, Law R. 13 Eq. 148 (1871) ; Clark v. Dales, 20 Barb. 42 ; Myers v. Smith, 48 ib. 614 (1867) ; Trevor v. Wood, 86 N. Y. 307 (1867) ; HebVs Case, Law R. 4 Eq. 9 (1867) ; Thomson v. James, 18 Dunlop, 1 ; Hutcheson v. Blakeman, 3 Met. (Ky.) 80 ; Falls v. Gaither, 9 Port. 605 ; Chiles v. Nelson, 7 Dana, 281 ; Eliason v. Henshaw, 4 Wheat. 225 ; Cornwellsi). Krengel, 41 111. 894 (1866) ; Abbott v. Shepard, 48 N. H. 14 (1868) ; STewcomb v. De Roos, 2 El. & El. 271. The cases sometimes cited opposite are Dunmore v. Alexander, 9 Sh. & Dun. 190 ; Head v. Prov. Ins. Co., 2 Cranch, 167 ; Head v. Diggon, 3 Man. & Ryl. 97 ; Routledge v. Grant, 4 Bing. 653. 452 MUTUAL ASSENT OP THE PARTIES. [CHAP. XVI. of retraction is received, and not when it is sent. But where an acceptance is conveyed by verbal message, it would not seem tory. The true reason why, if the vessel had arrived in safety before the letter containing the acceptance was mailed, there would have been no con- tract, seems to be that the subject of the contract (namely, a voyage from Martinico to the United States) having failed, the contract also fails ; because if a contract be founded upon the existence of something which does not in fact exist, although both parties supposed that it did when the contract was made, the agreement would, of course, be null from error or mistake. But we suppose that if the vessel had arrived at any time subse- quent to the mailing of the answer of acceptance, the insurance would have been effected, and the plaintiff would have been rendered liable for the pre- mium. See the subsequent case of M'Intyre v. Parks, 3 Met. 207. The rule, therefore, as stated in Adams v. Lindsdl, seems the most cor- rect, namely, " The defendants 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 cornpleted by the acceptance of it by the latter.'' This rule has been also sustained by the Court of Errors in New York, in the case of Mactier v. Frith, G Wend. 103, and in Connecticut, in Averill v. Hedge, 12 Conn. 4:30. See also an able criticism on the case of Cooke V. Oxley, in 20 Am. .Jur. 20, sustaining the doctrine as stated in the text. But see Sprague v. Train, 34 Vt. loO. This doctrine of the common law, as stated in Bracton, 1, 2, c. 5, is supported by the Roman and Scottish law. See 1 Story, Eq. Jur. § 230, note, and cases cited. Barbeyrac, in his notes on Grotius, says.: " If one mentally accedes to an offer, there is, in fact, a union of minds, but assents must be proved; there- fore a manifestation of assent is necessary as matter of evidence. It follows that assent to a proposal operates from the time that it is conveyed to the proposer. ^Vh<•n they are apart, and communicate by letter or message, the assent operates from the time when the party expresses his assent to the messonger, or puts it on paper in the form of an acceding to the offer made to him." See Pothier on Sales, No. 32 (Cushing's translation) ; Chitty on Cont. 14; Story on Agency, § 493, note; Long on Sales (Rand's ed.), 6, 183, 199 ; 2 Kent, Comm. 477, note (2) ; Mactier v. Frith, G Wend. 103 ; BrLsban v. Boyd, 4 Paige, 17, 20. A different rule from this would evidently be productive of great mischief, and clog the facilities of commercial inter- course. Thus, suppose an offer be made to a foreign correspondent to pur- chase a certain quantity of cotton, at a certain prire, during the necessary time whirh would elapse between the receipt of this letter, and the receipt of the letter assenting to his letter of acceptance, the market miulit, and in all proba- bility would, so vary as to render either tlie purchase or the sale undesirable according to the terms of the first proposition, and the bargain would never be concluded. The practical custom of merchants is founded upon the com- mon-sense rule, namely, to accept by letter ami send the article immediately, without waiting for an assent to their acceptance. Pothier, in his treatise on Sales, states an intermediate doctrine between CHAP. XVI.] MUTUAL ASSENT OF THE PARJ'IES. 453 to be binding until the other party has received information of it. the English and the Massachusetts rule, which seems to embrace the advan- tages of both and to avoid the objections to both. He says : " In this con- tract, as in others, the consent of the parties may be manifested, not only between those who are present together, but also between those who are at a distance from each other, by moans of letters, or through the intervention of an agent, per epistolam, aut per nuntium. In order that the consent of the parties may take place in the last-mentioned case, it is necessary that the will of the party who makes a proposition in writing should continue until his let- ter reaches the other party, and until the other party declares his acceptance of the proposition. This will is presumed to continue, if nothing appears to the contrar)' ; but, if I write a letter to a merchant living at a distance, and therein propose to him to sell me a certain quantity of merchandise, for a certain price ; and, before my letter has time to reach him, I write a second, informing him that I no longer wish to make the bargain ; or if I die ; or lose the use of my reason ; although the merchant, on the receipt of my let- ter, being in ignorance of my change of will, or of my death or insanity, makes answer that he accepts the proposed bargain, yet there will be no contract of sale between us ; for, as my will does not continue until his receipt of my letter, and his acceptance of the proposition contained in it, there is not that consent or concurrence of our wills which is necessary to constitute the contract of sale. This is the opinion of Bartolus and the other jurists cited by Bruneman, ad. 1. 1, § 2, D. de contrah. empt. (18, 1. 1, § 2,) who very properly reject the contrary opinion of the Gloss, ad diciam legem. It must be observed, however, that if my letter causes the merchant to be at any expense, in proceeding to execute the contract proposed, or if it occasions him any loss, as, for example, if in the intermediate time between the receipt of my first and that of my second letter, the price of that par- ticular kind of merchandise falls, and my first letter deprives him of an opportunity to sell it before the fall of the price ; in all these cases I am bound to indemnify him, unless I prefer to agree to the bargain as proposed by my first letter. This obligation results from that rule of equity, that no per- son should suffer from the act of another ; Nemo ex alterius facto proegravari debet. I ought therefore to indemnify him for the expense and loss which 1 occasion him by making a proposition which I afterwards refuse to execute. For the same reason, if the merchant, on the receipt of my first letter, and before receiving the second, which contains a revocation of it, of being in ignorance of my insanity or death, which prevents the conclusion of the bar- gain, charges to my account and forwards the merchandise ; though in that case there cannot properly be a contract of sale between us, yet he will have a right to compel me or my heirs to execute the proposed contract, not in virtue of any contract of sale, but of my obligation to indemnify him, which results from the rule of equity above mentioned." See also Toullier des Contrats, § 30; Duranton, Contrat de Vente, Liv. 3, tit. 6, § 45 ; Story on Agency, § 493, u. ; Brisban v. Boyd, 4 Paige, 17, 20; 2 Kent, Comm. 477. 454 MUTUAL ASSENT OP THE PARTIES. [CHAP. XVI. I § 499. But where a proposal is made by letter, and the other party writes a letter accepting it, and places it in the hands of some person as his agent to forward the letter, the contract will not be concluded so long as the letter remains in the agent's hands. And although the agent so employed be post^ master, the contract is incomplete until the letter is actually mailed. Where, therefore, A., at Hopkinton, on the l.Jth of January, made an application to an insurance company at Concord for insurance on his house, and the insurance com- pany stated by letter the terms on which they would insure, and prepared a written application and a premium note, both bearing date of the 16th, to be signed by A., and upon their being returned to the insurance company by mail, a policy bearing the same date was to be forwarded, and A.'s agent, who was the postmaster at Hopkinton, presented the written application and note on the 28th, and A. immediately signed them, and left them in the hands of the postmaster to be for- warded to the insurance company, and the papers were mailed and forwarded on the 3d of February, but the insurance com- pany refused to give A. the policy, — the buildings having been destroyed by fire on the 31st of January, — it was held, in an action for the loss, that no contract of insurance had been completed, the papers signed by A. being in the hands of his agent, and therefore revocable, until after the buildings had been destroyed. ^ § 500. Similar is the case where an order is sent by letter for merchandise. If the article be forwarded before the letter of retraction is received, the contract is completed, and the ■ orderer is in the same predicament as if no retraction had been made. If, however, the order be received, and accepted either by letter, or by a procurement of the articles ordered, or by an action thereupon by the correspondent importing an ac- See also M'Intyre v. Parks, 3 Met. 207, where A., beinj;- in a State where the sale of lottery tii.kels was unlawful, wrote to B. in a State where the sale was lawful, to purchase tickets ; and it was held that the sale was completed in tlic State where the assent was >;ivcn, and not where it was received. See also Head v. Di-gon, 3 iMan. & Ryl. 97, and 1 Duer on Ins. 116 to 131, hi note, where the sulijcct is fully iliscussed. ' Thayer v. Middlesex Mutual Fire Ins. Co., 10 Tick. 326. CHAP. XVT.] MDTUAL ASSENT OP THE PARTIES. 455 ceptance, and before the articles were all procured, or were sent, the orderer should retraxit his order, he would be bo'und to take the goods already purchased, and to indemnify the other party for his expenses, trouble, and services. Again, if, in such a case, the person of whom they were ordered should order them of a third person, the first orderer would be bound to indemnify the second for all responsibilities incident to the compliance with the order. ^ § 501. Where an offer is made and accepted by letters, they form a valid and binding contract, although they have reference to the future making of a formal agreement, and although the parties intend to have a written contract executed.^ But if, after various letters have passed between the parties, and various propositions have been made, the parties finally reduce their agreement to writing, the written contract is to be taken as containing the joint terms of the bargain, and it is not to be varied by the letters or representations made previously ; ^ for the very object of a written agreement is to obviate all doubt in regard to the exact terms of the bargain, and to sat- isfy each party of the understanding of the other as to the stipulations of both.* Yet, if one party be guilty of fraudu- lent representations to induce the bargain, the other may, upon proof thereof, recover against him.^ § 502. But if a proposition be made with certain conditions or limitations, the acceptance must correspond to it in terms, or otherwise it will be considered as a new proposition, requir- ing the subsequent assent of the other party to render it bind- ing.^ A letter accepting an offer of property advertised for ' Potliier, Contrat de Vente, No. 32 ; Duranton, Cours de Droit Pran- jais, Vol. 16 ; Contrat de Vente, Liv. 3, tit. 6, § 45 ; 2 Pardessus, No. 253 ; Bell on Sak's, p. 38. ^ Thomas v. Dering, 1 Keen, 729. ' But see Curamings v. Antes, 19 Penn. St. 287. * Kain v. Old, 2 B. & C. 63i; Vandervoort v. Columbian Ins. Co., 2 Caines, 161 ; Mumford v. McPherson, 1 Joluis. 414; Pickering v. Dowson, 4 Taunt. 779 ; Meyer v. Everth, 4 Camp. 22. s Daniel v. Mitchell, 1 Story, 172 ; Doggett v. Emerson, 3 Story, 700 ; Dobell 0. Stevens, 3 B. & C. 623 ; Wright v. Crookes, 1 Scott, N. K. 685 ; post. Illegal Contract. ' Slaymaker v. Irwin, 4 Whart. 369 ; Honeyman v. Marryatt, 6 H. L. C. 456 MUTUAL ASSENT OP THE PARTIES. [CHAP. XVI. sale, but adding some conditions or terms not eCiitained in the original advertisement, does not constitute a complete contract.^ For wherever an agreement is to be established by a series of letters, it can only be created by a proposal being accepted in the terms proposed, without any fresh terms being superadded.^ Thus, where B. was the lessee of a house belonging to C, and D. by letter proposed to B. to purchase the lease for a certain sum, to which proposal B. answered that he would underlet the premises on the terms proposed, it was held that no contract arose, inasmuch as the proposal being for an assignment of the original lease, an agreement to underlet was not an acceptance of the exact terms offered.-^ So, where A. offered to purchase the lease of a house from B., if possession should be given on a particular day, and a definitive answer be made within six weeks, and B. accepted the proposal within the time, but offered possession upon a different day, and A. retracted his offer before the six weeks had elapsed ; it was held, that inas- much as neither party had ever agreed as to the terms pro- posed by the other, either of them might rescind it at any time.* So, if a trader order goods of a specified quantity or quality, or upon certain terms of credit, and the goods forwarded be neither of the same quality nor quantity, or if the credit be shorter, he is not bound to receive them.^ So, where R. in New York wrote to W. in Boston, offering to sell coal, and that he could load 375 tons " on Monday," and on the next Monday after the receipt of the letter W. telegraphed to E.., ^" ship that cargo 375 tons immediately," but R. did not begin 112 (1857) ; Andrews v. Garrett, 6 C. B. (n. s.) 262 (1859). For a propo- sition on one side, professedly accepted on the other, but with some ma- terial condition or quahfication annexed, does not become a binding contract until such qualification is also a^es where forged notes have been received, but certainly with more strength when the party receiv- ing them is the one purporting to be bound to pay. For he knows better than any other whether they are his notes or not ; and if he pays them, or receives them in payment, and continues silent after he has had sufBcient opportunity to examine them, he should be considered as having adopted them as his own.' " Against the pressure of these authorities there is not a single opposing case ; and we must, therefore, conclude, that both in England and x\merica, the cpiestion has been supposed to be at rest. The ease of Junes e. Ryde, b Taunt. 488, is clearly di.-tinguishable, as it ranged itself within the cla>s of cases where forged ^securities of third persons had been received in pay- ment. Bruce u. Brnce, 5 Taunt. 40.'j, is very shortly and obscurely reported ; but from what is there mentioned, as well as from the notice taken of it by Lord Ciiief Justice (iibb-*, in Smith j). Jlercer, 6 Taunt. 77, it must have turned on the same distinction as Jones v. Ryde, and was not governed by Price V. Xeal. " But if the present case is to be considered, as the defendants' couu-.el is most solicitous to consider it, not as a case where the notes have been paid, but as a case of credit, as cash, upon the receipt of ihem, it will not help the argument. In that point of view, llic notes must be deemed to liave been aci'e])ted by the defendants as genuine notes, and payment to liave been promised accordingly. Credit was given for them, as cash, bv the defend- ants, for nineteen days, and, dm-iug all tliis period, no right could exist in CHAP. XVI.J MISTAKE OP FACT. 487 where the payee of the note or bill is an innocent party, and where the person making the mistake is a party to the bill, or the plaintiffs to recover the amount against any other person, from whom tlii'v ivere reoeived. By such delay, according to the doctrine of Lord Chief Justice Gibbs, in Smith v. Mercer, 6 Taunt. 76, the prior holders would be discharged ; and the case of the Gloucester Bank v. The Salem Bank, 17 Mass. 33, adopts the same principle ; so that there would be a loss produced by the negligence of the defendants. But waiving this narrower view, wo think the case may be justly placed irpon the broad ground, that there was an acceptance of the notes as genuine, and that it falls directly within the authorities which govern the cases of acceptances of forged drafts. If there be any difference between them, the principle is stronger here than there ; for there the acceptor is presumed to know the drawer's signature. Here, a fortiori, the maker must be presumed, and is bound to know his own notes. He cannot be heard to aver his ignorance ; and when he receives notes, purporting to be his own, without objection, it is an adoption of them as his own. "The general question as to the effect of acceptances, has repeatedly come under the consideration of the courts of common law. In the early case of Wilkinson v. Lutwidge, 1 Str. 648, the Lord Chief Justice considered that the acceptance of the bill was, in an action against the acceptor, a suffi- cient proof of the handwriting of the drawer ; but it was not conclusive. In the subsequent case of Jenys i\ Fawler, 2 Str. 946, the Lord Chief Justice would not suffer the acceptor to give the evidence of witnesses, that they did not believe it the drawer's handwriting, from the danger to negotiable notes ; and he strongly inclined to think that actual forgery would be no defence, because the acceptance had given the bill a credit to the indorsee. Subsequent to this was the case of Price v. Neal, already commented on, in which it was thought that the acceptor ought to be conclusively bound by his acceptance. The correctness of this doctrine was recognized by Mr. Justice BuUer, in Smith v. Chester, 1 T. E. 655 ; by Lord Kenyon, in Bar- ber V. Gingell, 3 Esp. 60, where he extended it to an implied acceptance ; and by Mr. Justice Dampier, in Bass v. Clive, 4 M. & S. 15, and it was acted upon by necessary implication by the court, in Smith v. Mercer. 6 Taunt. 76. In Levy v. The Bank of the U. S., 1 Binn. 27, already referred to, where a forged check, drawn upon the bank, had been accepted by the latter, and carried to the credit of the plaintiff, and on the refusal of the bank afterwards to pay the amount, the suit was brought, the court ex- pressly held the plaintiff entitled to recover, on the ground that the accept- ance concluded the defendant. The case was very strong, for the fraud was discovered a few hours only after the receipt of the check, and imme- diate notice given. But this was not thought in the slightest degree to vary the legal result. ' Some of the cases,' said the court, ' decide that the acceptor is bound, because the acceptance gives a credit to the bill, &c. But the modern cases certainly notice another reason for his liability, which 488 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. note, or negotiable paper. And, therefore, if a person, not being a party thereto, discount it, supposing it to be good, and it prove to be a forgery, he may recover it on the ground that it is paid under a mistake of fact, for such person is not bound to know wliether the bill is a forgery or not, in like manner as if he were a party on the face of the note or bill.^ And in case a bill or note should be discounted by a third person, the money paid on it could be recovered, if it prove to be a forgery, although it be not indorsed by the person in whose behalf it was discounted. 2 For the vendor of any bill of exchange im- pliedly warrants it to be of the kind and description it purports we think has much good sense in it, namely, that the acceptor is presumed to know the drawer's handwriting, and by his acceptance to take this knowl- edge upon himself.' After some ri'scarch, we have not been able to find a single case, in which the general doctrine, thus asserted, has been shaken, or even doubted ; and the diligence of the counsel for the defendants on the present occasion has not been more successful than our own. Considering, then, as we do, that the doctrine is well established, that the acceptor is bound to know the handwriting of the drawer, and cannot defend himself from payment by a subsequent discovery of the forgery, we are of opinion that the present case falls directly within the same principle. Vt'e think the defendants were bound to know their own notes, and having once accepted the notes in question as their own, they are concluded by their act of adop- tion, and cannot be permitted to set up the defence of forgery against the plaintiffs. " It is not thought necessary to go into a consideration of other cases cited at the bar, to establish, that the acceptor may show that the accepted bill was void in its origin, as made in violation of the stamp act, &c. ; for all these cases admit the genuineness of the notes, and turn upon questions of another nature, of public policy, and a violation of the laws of the land. Nor are tlie cases applicable, in which bills have been altered after they were drawn, or of forged indorsements, for these are not facts which an acceptor is presumed to know. Nor is it deemed material to consider in what cases receipts and stated accounts may be opened for surcharge and falsification. They depend upon other principles of general application. It is sufficient for us to declare, that we place our judgment, in the present ease, upon the ground that tlie di-lendants wei-e bound to know their own notes, and having receiveil them without objection, they cannot now recall their assent. We think this doctrine founded on public policy and convenience ; and that actual loss is not necessary to be proved, for potential loss may e.N-ist, and the law will always presume a possible loss in cases of this nature.'' ' Jones V. Ryde, 1 Marsh. 1.57 ; s. c. 5 Taunt. 488 ; Cocks v. Master- man, 9 B. & C. 905 ; Young v. Cole, 3 Bing. N. C. 730. ' Fuller V. Smith, Ry. & Mood. 49. CHAP. XVI.] MISTAKE OP FACT. 489 on its face to be, although he do not indorse it.^ But it seems, that, in England, the person discounting it should give notice that it is a forgery to the indorser on the day it becomes due, so as to enable him to give notice to the antecedent parties, or he cannot recover.^ § 531. The mistake must, however, be in regard to a mate- rial fact, affecting and modifying the act or contract. For if it be in respect of a trifling and insignificant matter, it will not be a good defence to an executory agreement, nor a good claim for recovery upon an executed contract. Thus, where a mis- take of a quarter of an acre was made in a sale of twenty acres, the premises being well known to both parties, it was held to be no good ground for rescinding the contract, inasmuch as the mistake could not have operated materially to affect the pur- chase.^ Yet, if the exact quantity or number of the subject- matter be of the essence of a contract, as if the contract be entire, a slight mistake might be sufficient to avoid it. Thus, if an article be bought for a definite purpose, any mistake as to quantity, though very slight, which would, nevertheless, render it unfit for the purpose, would afford a ground to avoid the sale.* § 532. Again, where there is a misdescription of the subject- matter of a contract, not arising from fraud, but founded in mistake, ignorance, or carelessness, if it be in a substantial and material point, so affecting the contract as that it may reasonably be supposed that but for such misdescription the contract would not have been made, it will afford a good ground to avoid the contract.^ Thus, where a sale was made > Gompertz v. Bartlett, 2 El. & B. 849 ; 24 Eng. Law & Eq. 156. * Wilkinson v. Johnson, .3 B. & C. 428 ; Cocks v. Mastermau, 9 B. & C. 902; Smith v. Mercer, 6 Taunt. 76; Story on Bills, § 111, 225, 262, 263, 413, 451. ^ Smith V. Evans, 6 Binn. 102 ; Mann v. Pearson, 2 Johns. 37 ; 1 Story, Eq. Jur. § 141. * Ante, § 16. ' Flight V. Booth, 1 Bing. N. C. 376. In this case, Tindal, C. J., said : " It is extremely difficult to lay down, from the decided cases, any certain definite rule' which shall determine what misstatement or misdescription in the particulars shall justify a rescinding of the contract, and what shall be the ground of compensation only. All the cases concur in this, that 490 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. of the lease of a house, which was described to be " a free public-house," aud when the lease was made, it coutained a proviso, that the lessee and his assigns should take all their beer from a particular brewery, it was held, that the misde- scription was fatal to the contract. ^ So, also, where parties made an agreement for the purchase and sale of an interest in a public-house, which was stated to have eight years and a half to run, and it turned out that the buyer had only an in- terest of six years, it was held, that the buyer might treat the contract as a nullity, and recover the purchase-money ad- vanced by him. 2 So, where an article was sold under the name of foreign refined rape-oil, but warranted only equal to sample, and oil was delivered which in fact corresponded to the sample, but was not foreign refined rape-oil, it was held the purchaser was not bound to accept it.^ § 533. In cases of sales of personal property, where the mistake is in respect to the title of the vendor of the subject- matter, and he proves to have no title at all, the contract may be entirely avoided, and the vendee may avail himself of such ■where the misstatement is wilful or designed, it amounts to fraud ; and such fraud, upon general principles of law, avoids the contract altogether. But with respect to misstatements which stand clear of fraud, it is impossible to reconcile all the cases ; some of them laying it down that no misstatements which originate in carelessness, however gross, shall avoid the contract, but shall form the subject of compensation only : Duke of Norfolk v. Worthy, 1 Camp. j4U ; Wright v. Wilson, 1 iVIood. & Rob. 207 ; whilst other cases lay down the rule, that a misdescription in a material point, although occasioned by negligence only, not by fraud, will vitiate the contract of sale. Jones v. Edney, 3 Camp. 2.s,j ; AVariiig v. Hoggart, Ry. & Mood. 39 ; and Stewart u. AUiston, 1 Mer. 26. In this state of discrepancy between the decided cases, we think it is, at all events, a safe rule to adopt, that where the misdescription, although not proceeding from fraud, is in a material and substantial point, so far affecting the subject-matter of the con- tract that it may reasonably be supposed, that, but for such misdescription, the purchaser might never have entered into the contract at all, in such cases the contract is avoided altogether, and the purchaser is not bound to resort to the clause of compensation. Under such a state of facts, the purchaser may be considered as not liaving purchased the thing which was really the subject of the sale." ' Jones V. Edney, 3 Camp. 285. ' Farrer v. Nightingal, 2 Esp. 639. ' Nichol V. Godts, 10 Exch. 191 ; 26 Eng. Law & Eq. 527. CHAP. XVI.] MISTAKE OP FACT. 491 fact as a defence to an action for the consideration-money ; or he may wholly abandon the contract ; or he may reclaim the purchase-money, if he have advanced it.^ But if the vendee ' Story on Sales, § 188, 203; Bi-adeen v. Brooks, 22 Me. 403; Code Nap. art. 1699.' The decisions upon this point are most embarrassing and contradictory, and the comment of Mr. Chancellor Kent will be instructive. He says (Comm. vol. ii. p. 470) : "On the subject of the claim to a com- pletion of the purchase, or to the payment or return of the consideratioii- money, in a ease where the title or the essential qualities of part of the subject fail, and there is no charge of fraud, the law does uot seem to be clearly and precisely settled ; and it is difficult to reconcile the cases, or make the law harmonize on this vexatious question. The rules on this branch of the law of sales are in constant discussion, and of great practical utility, and they ought to be distinctly understood. It would seem to be sound doctrine, that a substantial error between the parties concerning the subject-matter of the contract, either as to the nature of the article, or" as to the consideration, or as to the security intended, would destroy the consent requisite to its validity. The principles which govern the subject, as to defects in the quality or quantity of the thing sold, requii-e a more extended examination; and they are the same in their application to sales of lands and chattels. " In the case of a purchase of land, where the title in part fails, the Court of Chancery will decree a return of the purchase-money, even after the purchase has been carried completely into execution, by the delivery of the deed and payment of the money, provided there had been a fraudulent misrepresentation as to the title. But if there be no ingredient of fraud, and the purchaser is not evicted, the insuiScieney of the title is no ground for relief against a security given for the purchase-money, or for rescinding the purchase, and claiming restitution of the money. The party is remitted to his remedies at law on his covenants to insure the title. In Frisbee v. Hoffnagle, the purchaser, in a suit at law upon his note given to the vendor for the purchase-money, was allowed to show in his defence, in avoidance of the note, a total failure of title, notwithstanding he had taken a deed with full covenants, and had not been evicted. But the authority of that case and the doctrine of it, were much impaired by the Supreme Court in Maine, in a subsequent case, founded on like circumstances ; and they were after- wards in a degree restored by the doubts thrown over the last decision by the Supreme Court of Massachusetts in Knapp v. Lee. The same defence was made to a promissory note in the case of Greenleaf u. Cook, and it was overruled on the ground that the title to the land, for the consideration of which the note was given, had only partially failed ; and it was said, that to make it a good defence in any case, the failure must be total. This case at Washington is contrary to the defence set up and allowed, and to the principle established in the case of Gray v. Handkinson ; but it seems to be supported by the case of Day v. Nix, where it was decided by the English court of C. B., that a partial failure of the consideration of a note was no 492 MUTUAL ASSENT OF THE PARTIES. [CHAP. XYI. still 1-etain undisturbed possession of the property sold, and a fortiori if no claim be made against him by an adverse party, he cannot jjlead want of title in the vendor, in defence of an action for the price. ^ This rule, however, does not hold in sales of real property ; and in such cases the vendee cannot utterly disclaim the sale, but is put to his remedy on the cove- nants in his deed.'' § 534. Where the want of title is only partial, — as if goods be sold which are under mortgage, — the vendee may avoid the sale, and reclaim the purchase-money, which he may have advanced, if the incumbrance materially diminish the value of defence, provided the quantum of damages arising upon the failure was not susceptible of definite computation. The cases are in opposition to each other, and they leave the question how far and to what extent a failure of title will be a good defence, as between the original parties to an action for the consideration-money on a contract of sale, in a state of painful uncer- tainty. I apprehend that in sales of laud the technical rule remits the party back to his covenants in his deed ; and if there be no ingredient of fraud in the case, and the party has not had the precaution to secure himself by covenants, he has no remedy for his money, even on a failure of title. Tliis is the strict English rule, both at law and in equity ; and it applies equally to chattels, when the vendor sells without any averment of title, and without possession. In sales of chattels, the purchaser cannot resist payment in cases free from fraud, while the contract continues open, and he has possession. But in this country the rule has recei\L'd very considerable relaxation. In respect to lands, the same rule has been considered to be the law in New York ; while, on the other hand, in South C'arolina, their courts of equity will allow a party suffering by the failure of title, in a case without warranty, to recover back the purchase-monc}-, in the sale of real as well as of personal estates." See Knapp u. Lee, 3 ^ick. 4o2 ; Day v. Nix, 9 iloore, 159. ' Kennebec Log Driving Co. v. Burrill, 18 Me. 314; Case v. Hall, 24 AVend. 102 ; Vibbard v. Johnson, 19 Johns. 77 ; Whitney v. Lewis, 21 Wend. 132 ; Lloyd v. Jewell, 1 Grueul. 352 ; Sumner v. Gray, 4 Pike, 467. But see contra, Frisbee v. HofFnagle, 11 Johns. 50; Knapp v. Lee, 3 Pick. 452. This rule also obtains in the Roman law, ^or iuJhe contract of sale the seller was not understood to warrant his title to Jte gStods sold, but only to agree to defend his possession ; so in the old FrenJh IJw^ which followed the Roman law. The Code Napoleon has, however, settled the question otherwise in France, by declaring, in the ]^99th article, that " la vente de la chose d'autrui est nuUe." See Poj?hier on Cont. No. 1 ; Story on Sales, §7. ^ Mandeville «. Welch, 5 Wheat. 277 ; Greenleaf v. Cook, 2 AVheat. 13. CHAP. XVI.] MISTAKE OF FACT. 493 the thing sold, and go to the essence of the contract.^ The same rule applies where the title of the vendor fails as to a part of a mass or number of goods sold. If the whole num- ber be a material inducement to the sale in fact ; or if the contract be entire, so as to render the whole a material induce- ment in law, the buyer may treat the sale as void.^ But if the quantity, in respect to which the title fails, be slight and un- important;^ or if, being material, the vendee choose to keep it, without objection ; or if, the contract being entire, the vendee accept the portion in respect to which the title is good, the only effect of the mistake would be to reduce the price propor- tionally to the failure.* § 535. Again, a mistake may arise in respect to the quantity or number of things included in a contract. As, for instance, where, in the sale of a certain set of articles, a purchaser sup- poses himself to be buying the whole at a particular price, while the seller supposes him to offer that price for a part only ; and, in such cases, no contract arises, for want of mutuality of agreement. So, also, if a lessee should suppose that his lease was to include a particular room or set of rooms, which the lessor did not intend to let, the contract would be void, if the mistake were material.^!' And the same rule would apply, ' Farrer v. Nightingal, 2 Esp. 639 ; Curtis v. Hannay, 3 Esp. 82 ; Ham- mond V. Allen, 2 Sumner, 394; s. C. 11 Peters, 70. " Farrer v. Nightingal, 2 Esp. 639. In this case, Lord Kenyon said : "I Lave often ruled, that where a person sells an interest, and it appears that the interest, which he pretended to sell, was not a true one ; as, for example, if it was for a lesser number of years than he had contracted to sell, the buyer may consider the contract as at an end, and bring an action for money had and received, to recover back any sum of money he may have paid in part performance of the agreement for the sale ; and though it is said here, that upon the mistake being discovered in the number of years of which the defendant stated himself to be possessed, he offered to make an allowance pro tanto, that makes no difference in the case. It is sufficient for the plaintiff to say. That is not the interest which I agreed to purchase." John- son V. Johnson, 3 Bos. & Pul. 170 ; ante, § 16, 17. 3 Stebbins v. Eddy, 4 Mason, 414. ■* Johnson v. Johnson, 3 Bos. & Pul. 170. > 1 Story, Eq. Jur. § 144 ; Calverley v. Williams, 1 Ves. Jr. 210 ; Milli- gan V. Cooke, 16 Ves. 1 ; Poole v. Shergold, 1 Cox, 273 ; Brown on Sales, §217. 494 MUTUAL ASSENT OF THE PARTIES. [CHAP. XVI. where premises were sold for the residue of a term, of which both parties supposed that only eight years were unexpired, the price being founded on that supposition, if it should after- wards appear that twenty years were, in fact, unexpired. ^ § 536. "Where a mistake arises in regard to the quality or value of the subject-matter of a contract, the contract will be binding, unless there be a breach of covenant or warranty ; and in such cases, the mere mistake would not vitiate the con- tract ; 2 particularly if the other party had the means of avoid- ing the mistake by inquiry.^ § 537. Where an agreement relates to a particular person, in whom a personal trust and confidence are reposed, a mistake respecting the individual will vitiate the agreement. Thus, in the case of a promise to marry, or of an agreement to sell upon credit, or of a loan or gift, a mistake of the particular person intended avoids the contract. So, also, if A. agree to sell on credit to B., mistaking him for C, and reposing a special confidence in the solvency and honor of C, the mis- take would avoid the sale. And, an agreement to sell to a particular firm, described by the vendee or broker to be com- posed of certain persons, when in point of fact it was not, would avoid a contract, if the mistake should operate to the injury or inconvenience of the seller.* But where considera- tion for the person forms no inducement to the contract, the mistake, being merely inconsequential, would not avoid it ; and if, purely through mistake of person, any party should be em- ployed to do a particular act or series of acts, and should do them, the party making the mistake must bear the conse- quences thereof, and cannot throw them upon the innocent party. ^ § 638. Where a mistake occurs as to the nature of the sub- ject-matter of the contract, there is no assent, and of course no contract ; as if an unopened cask or barrel be bought upon the supposition that it contains one thing, when it actually con- ' Okill V. Whittaker, 2 Phillips, 338; 11 Jur. 681. ' See post, Sales. ' Warner v. Daniels, 1 Woodb. & M. 91. * Mitchell V. Lapage, Holt, N. P. 263. « Pothier on Oblig. pt. 1, No. 9. CHAP, XVI.] MISTAKE OP FACT. 495 tains another, there is no sale.^ Thus, if a person buys cotton, to arrive " per Peerless from Bombay," he may show that he meant the ship Peerless which was to leave Bombay in Decem- ber, and not the Peerless which left in October, as the vendor claimed.^ So, where payment of a note is made in counterfeit bank-notes, the person making such payment being innocent, for them the payee may recover of him the amount of such notes, in an action for money had and received ; ^ provided he offer to return them in a reasonable time.* If, however, by the agreement, notes or coins are to be received in payment, it is not regarded as a bargain for cash, but in the nature of barter ; and if they prove worthless or counterfeit, the loss, in the absence of fraud, must be borne by the receiver.^ So, where an article was sold as " waste silk," when it was no such thing ; ^ or where a material was bought as " scarlet cuttings," which was not scarlet cuttings ; " or where a stone was sold as a bezoar stone, when it was not ; ^ or where a quantity of dried leather, and bones, and burnt clay, was sold as " a seroon of indigo ; " ^ the sale was held to be void. So, also, if a pair of candlesticks be bought and sold as being silver, both parties believing them to be so, and they turn out to be plated, the contract is at an end.^" § 539. Where there is a mutual mistake, as to a fact form- ' Conner v. Henderson, 15 Mass. 319. And see Rice v. DwigLt Manu- facturing Co., 2 Cush. 80. " Raffles V. Wichelhaus, 2 H. & C. 906 (1864). ^ Young V. Adams, 6 Mass. 182 ; Jones v. Ryde, 5 Taunt. 488 ; EUia V. Wild, 6 Mass. 321 ; Mudd v. Reeves, 2 Harr. & J. 368 ; Hargrave v. Dusenberry, 2 Hawks, 326 ; Markle v. Hatfield, 2 Johns. 456 ; Keene u. Thompson, 4 Gill & J. 463. ■* Salem Bank v. Gloucester Bank, 17 Mass. 1-33 ; Bank of U. S. v. Bank of Georgia, 10 Wheat. 333 ; Raymond v. Baar, 13 S. & R. 318 ; Price V. Neal, 3 Burr. 1354; Levy v. Bank of U. S., 4 Dall. 234; 1 Binn. 27. ' ElUs V. Wild, 6 Mass. 321 ; Alexander v. Owen, 1 T. R. 225 ; 3 Star- kie on Evid. 1089 ; post, § 1340-1351. ' Gardiner v. Gray, 4 Camp. 144; Meyer v. Everth, 4 Camp. 22. ' Bridge V. Wain, 1 Stark. 504 ; Shepherd v. Kain, 5 B. & Al. 240. ' Chandelor v. Lopus, Cro. Jac. 4. Williams v. Spafford, 8 Pick. 250. '" Pothier on Oblig. pt. 1, ch. 1, n. 18. See also post. Implied Warranty, I 1060. 496 MUTUAL ASSENT OF THE PARTIES. [CHAP, XVI. ing the basis of the contract, the contract will be void, although no fraud be practised.^ Thus, if the suliject-matter of the contract, though supposed by both parties to be in exist- ence, be actually destroyed at the time the contract is made, it will be void.^ Nor does it make any difference in the rule, that the suljject-matter is known to both parties to be liable to accidents and contingencies, by which it may be destroyed at any moment. Thus, if a person should sell a house, which at the moment of the sale had been destroyed by fire or other- wise, though he was ignorant of the fact, the basis of their contract being gone, the contract would be void.^ So, also, if a horse be sold, which both parties believe to be alive at the time of the sale, but which is in fact dead, there is no sale.* So, also, if an insurance should be made of goods supposed to be on board a particular ship, and the premium should be paid, and the goods should prove not to be on board, the in- surer could recover the premium of insurance.^ So, also, where Ijills of exchange were drawn upon a firm in Havre by their agent in New York, and sold on the same day that the drawers failed, but the agent as well as the purchaser was ignorant of such failure at the time of the sale, it was held, that the purchaser was entitled to rescind the contract, on the ground of a mutual mistake of a material fact.^ § 540. Again, a mistake may arise in respect to the consid- eration to be paid for a certain act or thing, and the rule in such case is, that if the person who is to pay the considera- tion suppose it to be smaller than the other party intends, no contract would be effected ; "^ but if the party who is to pay the consideration suppose it to be large?- than it is, a contract would arise for the lesser sum. Thus, if A. agree to buy two ' Miles V. Stevens, 8 Barr, 21. ' Plitchcoik V. Giddings, 4 Price, 135. 3 Allen V. Hammond, 11 Peters, 63 ; Hitchcock v. Giddings, 4 Price, 135 ; Daniell, 1 ; 1 Story, Eq. Jur. § 143 ; 2 Kent, Comm. 469. * 1 Story, Eq. Jur. § 143, 143 a; Allen v. Hammond, 11 Peters, 71. And see Hastie v. Couturier, 9 Exeli. 102; 20 Eng. Law &Eq. 533. * Park on Ins. ch. 19, p. 503, 6th ed. 1809 ; Hammond v. Allen, 2 Sum- ner, 398. « Leger v. BonnaflK, 2 Barb. 475. ' Greene v. Bateman, 2 Woodb. & M. 362. CHAP. XVI.] MISTAKE OF FACT. 497 certain articles, supposing the price to be ten dollars apiece, and B. agree to sell it, understanding that he is to receive only ten for both, the sale of both would be understood to be for ten dollars.^ So, also, where shingles were sold and delivered at f3.25, but there was a mutual mistake as to whether this sum was to be paid for a bunch or for a thousand, it was held that unless both parties had understandingly assented to one or other of these views, no special contract as to price had been created. ^ § 541. Where money is paid by mistake, under an ignorance or forgetfulness of facts, or under a misapprehension of the state of the contract on which the party pays it, if he be not legally nor morally obliged to pay, it may be recovered back.^ Nor is it any defence to an action to recover such money, that the other party had the means of knowledge.* But if money be paid in ignorance of a fact which would have absolved the party paying it in law, but not in morals and conscience, it would seem, that such a mistake ought not to be a sufficient ground to entitle the party paying to reclaim it. Thus, if the statute of limitation should have absolved a party from legal liability to pay a just debt, and in ignorance, or mistake, or forgetfulness, that the time prescribed already had passed, he should pay it, he could not reclaiin the money. So money paid in settlement of a prosecution for bastardy, com- menced in good faith, and with reason to believe that the complainant was with child, is paid upon a lawful considera- tion, and cannot be recovered back.^ But a negotiable security 1 Brown on Sales, § 223 ; Pothier, Contrat de Vente, n. 36. ' Greene v. Bateman, 2 Woodb. & M. 359. ' Kelly V. Solari, 9 M. & W. 54 ; Lucas v. Worswick, 1 Mood. & Rob. 293 ; Pearson v. Lord, 6 Mass. 84 ; Bond ». Hays, 12 Mass. 36 ; Lazell v. MUler, 15 Mass. 208 ; Mowatt v. Wright, 1 Wend. 355 ; Burr v. Veeder, 3 ' Wend. 412 ; Dickins ». Jones, 6 Yerg. 483 ; Wbitcomb v.' Williams, 4 Pick. 228; Goddard v. Merchants' Bank, 2 Sandf. 247; Merchants' Bank w. M'Intyre, 2 Sandf. 431. * Ibid.5Waite v. Leggett, 8 Cow. 195 ; Wheadon v. Olds, 20 Wend. 174 ; Kelly V. Solari, 9 M. & W. 54. ' Thompson v. Nelson, 28 Ind. 431 (1871). VAT. T. 3.i 498 MUTUAL ASSENT OP THE PARTIES. .[CHAP. XVI. given by a party in satisfaction of a liability from which he had been discharged in law in ignorance of the facts which constituted such discharge, cannot be enforced against him, by the party to whom it was given, though he may have had the means of knowing those facts.^ » Bell V. Gardiner, 4 Man. & G. 11. CHAP. XVn.] THE CONSIDERATION. 499 CHAPTER XVII. THE CONSIDERATION. § 542. We now come to that incident of a simple contract, which distinguishes it from a specialty, and without which it cannot exist, namely, the consideration. § 543. An agreement, without consideration, is utterly void, and no action can be maintained thereupon ; " Ex nudo pacta non oritur actio." ^ In the case of a contract under seal, the law always presumes a sufficient consideration, which the parties, except in special cases, are estopped ^ from deny- 1 The same rule obtains in the Roman law, and the foreign commercial law. 1 Pothier on Oblig. p. 42 ; Story on Bills, § 180, p. 200 ; Chitty on Cont. 27 ; Doc. & Stu. Dial. 2, c. 24 ; Rann v. Hughes, 7 T. R. 850, n. ; Myddleton V. Lord Kenyon, 2 Ves. Jr. 391 ; Sharington v. Strotton, Plowd. 302, 308 ; Pothier, Pand. Lib. 2, tit. 14, n. 33 ; 2 Pothier on Oblig. by Evans, u. 2, p. 19-25. Of course, although a contract when made may not be valid, for want of mutuality of obligation, yet it becomes valid and binding upon a due subsequent performance by the promisee of that which was the consid- eration of the promise. Willetts v. Sun Mut. Ins. Co., 45 N. Y. 45 (1871). ' Cooch V. Goodman, 2 Q. B. 580, 599, where, in delivering the opinion of the court. Lord Denman said: " It should, however, be observed, that a covenant, being under seal, does not by law require any consideration to support it, and though an illegal consideration may be shown and will vitiate it, and, if a consideration be stated on the face of a deed, a different one may be proved in order to raise a legal defence ; yet a mere failure of con- sideration which once existed, may have no more effect than a total want of consideration in the first instance. Several cases are cited in Com. Dig. tit. Covenant, F., to show, that, under circumstances, a failure of consideration will prevent an action of covenant from being maintainable ; and we are by no means prepared to deny this proposition. But in the present case, there has not been any such failure ; and therefore, we are of opinion, that the case comes within the general rule laid down in Com. Dig. Fait, C. 2, and the cases there cited ; namely, that if one party executes his part of an indenture, it shall be his deed, though the other does not execute his part." 500 THE CONSIDERATION. [CHAP. \YH. ing ; 1 while in the case of a simple contract (under which term is included all contracts not under seal, whether oral or writ- ten),^ a sufficient consideration must not only exist in fact, and be averred in the pleadings, but must also be proved, in order to entitle either party to recover. Nor is the case of a promis- sory note or a bill of exchange ordinarily an exception to this rule ; for, as between the original parties to the bill or note, although the presumption is, that the consideration is sufficient, so that it is unnecessary for the plaintiff to establish a consid- eration, yet failure or illegality of consideration may be in- sisted upon by the defendant, as a defence or bar to the action by the original payee ; and the only difference between the case of a bill or note and any other contract, as to the inunedi- ate parties, is, that the burden of proof is shifted.^ The doctrine that the failure or illegality of consideration is no defence or bar to the title of a bond fide holder of negotiable paper for a valuable consideration, without notice of the defect, must, indeed, be regarded as an exception. It stands upon grounds of public policy and convenience, and is indis- pensable in order to give to negotiable paper that security and facility of circulation, without which it would be nearly useless to the community.* § 544. By the Roman law a naked agreement, without a cause, gave no right to an action ; but where there was a cause the agreement became an obligation, and gave birth to a right of action. " Quum nulla subest causa praeter conventionem, hie constat non posse constitui obligationem. Igitur nuda ' In some of the States in this country, the want of consideration is, by local usaj^e or hy statute, rendered a complete defeuee to a sealed contract. .Sivift V. Hawkins, 1 Dall. 17 ; Solomon v. Kimmel, 5 Binn. 232 ; Case ». Boushton, 11 Wend. 106; Leonard v. Bates, 1 Blackf. 173; Walker v. Walker, 13 Ired. 335; Coyle v. Fowler, 3 J. J. Marsh. 473. ' Cook V. Bradley, 7 Conn. .57 ; People v. Shall, [) Cow. 778 ; Burnet v. Biseo, 4 .Johns. 23.j ; Thacher «. Dinsmore, 5 JIass. 301. * 3 Kent, Comm. 80-82; Jackson v. Warwick, 7 T. R. 121 ; Story on Part. § 178, 187, and cases cited, p. 200; Caiitty on Bills, ch. 3, § 1, p. 78- 85, 8tli ed. ; ib. p. 90-92 ; Collins v. Martin, 1 Bos. & Pul. 651 ; Holliday V. Atkinson, 5 B. & C. 501. " Story on Bills, § 187, 188; Collins «. Martin, 1 Bos. & Pul. 651; Bramah v. Roberts, 1 Bing. N. C. 469. CHAP. XVII.] THE CONSIDERATION. 601 pactio obligationem non parit.''^ By the common law the cause is carefully discrimhiated from the motive ; a good motive not being sufficient to support a contract. The causa of the Roman law is equivalent to the consideration of the common law ; and by the latter term is to be understood some cause which has a value susceptible of legal appreciation, and not merely a moral motive.^ Yet, although the least consider- ation that is appreciable in value will be sufficient to support a contract, it must appear not to be utterly valueless. For if the contract be founded iipon a consideration mistakenly supposed to be of value, yet if it turn out afterwards to be utterly worth- less, the contract cannot be enforced.^ § 545. But although a consideration is absolutely essential, in order to support a parol contract, yet it is not necessary that it should be expressed in writing, even although the contract ' Digest, Lib. 2, tit. 14, 1. 7, § 4. Plowden, in a note to the case of Sharington v. Strotton (Plowd. 309), thus states the rule: " Nudum Pac- tum est ubi nulla subest causa praeter conveutionem ; sed ubi subest causa, fit obligatio et parit actionem." The word "propter," instead of "praeter," occurs in some editions of the Roman Digest. See also Wood's Civil Law, ch. 1, p. 205, and note. Viner's Abr. Nudum Pactum, A. pi. 1. In the Civil Code of France, the rule is thus laid down : " L'obligation sans cause, ou sur une fausse cause, ou sur une cause illicite, ne pent avoir aucun effet." Code Civil, Liv. 3, tit. 3, ch. 2, sect. 4, art. 1131. " In Thomas v. Thomas, 2 Q. B. 859, Mr. Justice Patteson, commenting on the term " causa," says : "It would be giving to causa too large a con- struction if we were to adopt the view urged for the defendant ; it would be confounding consideration with motive. Motive is not the same thing with consideration. Consideration means something that is of some value in the eye of the law, moving from the plaintiif : it may be some benefit to the plaintiff, or some detriment to the defendant ; but at all events it must be moving from the plaintiff. Now that which is suggested as the consideration here, a pious respect for the wishes of the testator, does not in any way move from the plaintiff; it moves from the testator; therefore, legally speaking, it forms no part of the consideration." See also Sharington v. Strotton, Plowd. 309, and note ; Mouton v. Noble, 1 La. An. 192 ; Jen- nings V. Brown, 9 M. & W. 501 ; Beaumont v. Reeve, 8 Q. B. 483 ; Hol- comb V. Stimpson, 8 Vt. 141 ; Haven v. Hobbs, 1 Vt. 238 ; 2 Kent, Comm. 618, n. (1). 3 Cabot V. Haskins, 3 Pick. 83 ; Maull v. Vaughan, 45 Ala. 134 (1871). See post, § 437, 453, 465, 480. Warder v. Tucker, 7 Mass. 449 ; Freeman a. Boynton, 7 Mass. 483 ; White v. Bluett, 23 Law J. (n. 8.) Exch. 36 ; 24 Eng. Law & Eq. 434 ; Sykes v. Dixon, 9 Ad. & El. 693 ; James v. Williams, 5 B. & Ad. 1109. 502 THE CONSIDERATION. [CHAP. XVII. itself be written, provided it be proved, in point of fact.^ But if the consideration be stated in the written contract, it is to be taken as the actual consideration, unless the contract im- port others not expressed therein ; as if the words " for other considerations " be used.^ The statement of the consideration in a parol contract does not, however, operate by way of estoppel, so as to prevent the parties from showing additional considerations, in like manner as in cases of specialties.^ And if a written contract do not set forth the specific consideration, but state in general terms that it is founded on a valuable consideration, such a statement will be considered as primd facie evidence of the fact.* § 546. The law requires not only a consideration, but that it should be valuable. A valuable consideration is distin- guished from a good consideration. A good consideration is an equitable consideration, founded upon mere love, or affec- tion, or gratitude, which, although it will support the contract as between the parties, when executed, will not support an action to enforce an executory contract ; but a valuable con- sideration is a legal consideration emanating from some injury or inconvenience to the one party, or from some benefit to the other party .^ § 547. The subject naturally divides itself into, 1st. Valu- able Considerations ; 2d. Insufficient Considerations. Valu- able considerations are of various kinds, and for the sake of distinctness and facility of reference, we propose to divide them into the following classes : ® 1st. Benefit or Injury ;■ ' Arms V. Ashley, 4 Pick. 71 ; Tingley v. Cutler, 7 Conn. 291 ; Patchin V. Swift, 21 Vt. 292 ; Thompson v. Blanchard, 3 Comst. 336 ; Cummings u. Dennett, 26 Me. 397. ' Leonard v. Vredenburgh, 8 Johns. 29 ; Maigley v. Hauer, 7 Johns. 341 ; Elliott V. Giese, 7 Harr. & J. 457. ° Peacock v. Monk, 1 Ves. 128; Schemerhorn v. Vanderheyden, 1 Johns. 139; Emery o. Chase, 6 Greenl. 232; Clarkson v. Hanway, 2 P. Wms. 204. But see The King v. Scammonden, 3 T. R. 474; Cutter v. Reynolds, 8 B. Monr. 696 ; Emmons v. Littlefield, 18 Me. 233. « Whitney v. Stearns, 16 Me. 394 ; Sloan v. Gibson, 4 Mo. 33. * 2 Black. Comm. 297 ; Story on Prom. Notes, § 183 ; Com. Dig. Action on Case. Assumpsit, B. 1, 2, 4, 6, 9, 10; Violett v. Patton, 6 Cranch, 142. • " Valuable considerations," says Sir William Blackstone, " are divided CHAP. XVII.] BENEFIT OR INJURY. 503 2d. Forbearance ; 3d. Assignment of a Qhose in Action; 4th. Mutual Promises; 5tli. Consideration moving from Third Persons. BENEFIT OR INJURY. § 548. In the first place, as to considerations arising from benefit or injury. The principal requisite, and that which is the essence of every consideration, is, that it should create some benefit to the party promising, or some trouble, prejudice, or inconvenience to the pJffty to whom the promise is made ; wherever, therefore, any injury to the one party, or any benefit to the other party springs from a consideration, it is sufiicient to support a contract.^ But in order to render an injury to the by the civilians into four species : 1. Do, ut des ; as, when I give money or goods, on a contract that I shall be repaid money or goods for them again. Of this kind are all loans of money upon bond, or promise of repayment; and all sales of goods, in which there is either an express contract to pay so much for them, or else the law impHes a contract to pay so much as they are worth. 2. The second species is, facio, ut facias ; as, when I agree with a man to do his work for him, if he wOl do mine for me ; or if two persons agree to marry together, or to do any other positive acts on both sides. Or, it may be to forbear on one side on consideration of something done on the other; as, that in consideration A., the tenant, will repair his house, B., the landlord, will not sue him for waste. Or, it may be for mutual forbearance on both sides ; as, that in consideration that A. wUl not trade to Lisbon, B. will not trade to Marseilles, so as to avoid interfering with each other. 3. The third species of consideration is, facio, ut des ; when a man agrees to perform any thing for a price, either specifically men- tioned, or left to the determination of the law to set a value to it. And when a servant hires himself to his master for certain wages or an agreed sum of money ; here the servant contracts to do his master's service, in order to earn that specific sum. Otherwise, if he be hired generally ; for then he is under an implied contract to perform this service for what it shall be reasonably worth. 4. The fourth species is, do, ut facias ; which is the direct counterpart of the preceding ; as, when I agree with a servant to give him such wages upon his performing such work ; which, we see, is nothing else but the last species inverted ; for serous facit, ut hems det, and herus dat, ut servtis faciat.'''' 2 Black. Comm. 444. ' Com. Dig. Action on the Case, Assumpsit, B. 1 ; Forth v. Stanton, 1 Saund. 210, note 1, 2 ; Miller v. Drake, 1 Caines, 45 ; Powell v. Brown, 3 Johns. 100 ; Forster v. Fuller, 6 Mass. 58 ; Overstreet v. Phihps, 1 Litt. 123 ; Lent v. Padelford, 10 Mass. 230 ; Train v. Gold, 6 Pick. 380 ; Met- calf's Digest, Agreement, and cases cited; WiUiamson v. Clements, 1 604 THE CONSIDERATION. [CHAP. XVII. promisee a good consideration, it must be an injury upon en- tering into the contract, and not from a breach of it.^ It is not necessary t):at the consideration and promise should be equiv- alents in actual value, for it would be impossible ever precisely to determine whether in a given case the consideration was adequate, without a psychological investigation into the mo- tives of the parties. Besides, if no contract were good but those which were apparently of equal benefit to both parties, probably very few contracts which are made would be legally valid. Each party to a contract may ordinarily exercise his own discretion, as to the adequacy of the consideration ; and if the agreement be made bond fide, it matters not how insig- nificant the benefit may apparently be to the promisor ,2 or how slight the inconvenience or damage appear to be to the prom- isee ; provided it be susceptible of any legal estimation.^ Taunt. 523 ; Gully v. The Bishop of Exeter, 10 *B. & C. 606 ; Violett v. Patton, 5 Cranch, 14? ; Kirwan v. Kirwan, 2 Cr. & M. 623 ; Hubbard ti. Coolidge, 1 Met. 93. Tt is a good consideration for. a promise for extra pay for services to mariners, that part of the crew having left the ship, whereby it became dangerous for the rest to go on with it, they nevertheless agreed to proceed for the increased remuneration. They were not bound to proceed, and doing so was a detriment to them. Hartley 0. Ponsonby, 7 El. & B. 872 (18f)7). So where the plaintiiF, owning certain bills in the hands of the defendant, consented that the defendant should retain them for the purpose of getting them discounted, this was held a sufficient considera- tion for the defendant's promise to dispose of the proceeds in a certain man- ner, if he succeeded in getting the bills discounted. Hart v. Miles, 4 C. B. (n. s.) 371 (1858). See also, as to benefit and injury as a consideration, Shadwell v. Shadwell, 9 C. B. (n. s.) 159 (1860) ; Foster v. Phaley, 35 Vt. 303 (1862) ; Dorwin v. Smith, \h. 69 ; Perry v. Buckman, 33 Vt. 7 (1860). ' Lord Campbell, C. J., in Gerhard v. Bates, 2 El. & B. 476 ; 20 Eng. Law & Eq. 135. ^ Any advantage to the promisor,' however slight, is a sufficient consid- eration. Hart V. Miles, 4 C. B. (n. s.) 371 (1858) ; Rutgers )'. Lucet, 2 Johns. Cas. 92 ; Clark v. Gaylord, 24 Conn. 484 ; Spangler v. Springer, 22 Penn. St. 4.58; Clark v. Sigourney, 17 Conn. 511; Harlan v. Harlan, 20 Penn. St. 303. ^ Com. Dig. Action on the Case, Assumpsit, B. ; Davis v. Morgan, 4 B. & C. 8. See post, § 271 ; Pierce v. Fuller, 8 Mass. 223 ; Bragg v. Tanner, cited Cro. Jac. 397 ; Lawrence v. McCalmont, 2 How. 426 ; Hubbard v. Coolidge, 1 Met. 84 ; Clark u. Sigourney, 17 Conn. 511 ; Sanborn v. French, 2 Fost. 246 ; Whittle v. Skinner, 23 Vt. 532 ; Bainbridge v. Firmstone, CHAP. SVII.] BENEFIT OR INJURY. 505 Thus a promise to pay the bond of a third person, if the obligee will go before a magistrate, and malce oath that it was rightly read to the obligor before he executed it, is binding, because " the travail of coming before the mayor is a very good consideration." i So, also, proof of a debt is a sufficient consideration for a promise to pay, because it is a charge to the plaintiff.''' And a promise to pay a certain sum of money, on condition that the plaintiff call for it at a particular time, is binding ; because the condition is an inconvenience to the plaintiff.^ So, a promise by an uncle to pay his nephew an annuity in consideration of, or as an inducement to, his mar- riage with a person to whom he was already engaged, is founded upon good consideration, and is binding.* So, also, a promise in consideration of receiving a certain sum of money, to pay the same into court, is good ; because the party receiv- ing the money had the benefit of it.* So, also, where, in order to facilitate the making of an agreement, for which there was sufficient consideration between A. and C, B., who received no benefit himself, became a party thereto, it was held, in an action against B., that, as the agreement was such as A. would not have made, unless B. had consented to be a party, there was a sufficient consideration for B. to promise.^ Again, where the defendant promised to the plaintiff to pay him XIOOO, if the latter would surrender to him a letter, written by 0., then deceased, by means of which the defendant was enabled to determine certain controversies, and obtain a large portion of O.'s effects, it was held that there was sufficient 8 Ad. & El. 743. In Train v. Gold, 5 Pick. 384, Mr. Justice Wilde said : " If a contract is deliberately made without fraud, and with a full knowledge of all the circumstances, the least consideration will be sufficient." Raikes V. Todd, 8 Ad. & El. 846. ' Knight V. Rushworth, Cro. Eliz. 469 ; Brooks v. Ball, 18 Johns. 337 ; Perkins v. Binke, 2 Sid. 123. ' Traver v. , 1 Sid. 67 ; Brett v. Pretyman, 1 Sid. 283 ; Loo v. Burdeux, 1 Sid. 369 ; Tuke's Case, 7 Mod. 13. " Train v. Gold, 6 Pick. 384. See Willetts v. Sun Mutual Ins. Co., 45 N. Y. 45 (1871). ' Shadwell v. Shadwell, 9 C. B. (n. s.) 159 (1860). ' Anon., 2 Vent. 45; Com. Dig. Action on the Case, Assumpsit, B. 10. « Baily v. Croft, 4 Taunt. 611. See also Bainbridge v. Firmstone, 8 Ad. & El. 743. 506 THE CONSIDERATION. [CHAP. XVII. consideration to support the promise.^ So, also, an agreement by a creditor to take less than the face of his demand, upon receiving security for the amount to be paid, is founded on a sufficient consideration, growing out of the additional security.^ So, too, an agreement to allow the pastor of a church a credit on property not paid for, in consideration of his age, long services, and resignation as pastor, is valid. ^ § 549. But where the consideration is manifestly worth- less, it would not support the contract. Thus, a promise by a father to discharge his son from a note he held against him, in consideration that the son would make no more complaint of the distribution of his father's property, has been held to be without consideration, and void.* So, a promise to sell goods to a person on the usual terms, and for full value, the buyer being responsible, is no consideration for the latter's 1 Wilkinson v. Oliveira, 1 Bing. N. C. 490. See Orme v. Galloway, 9 Exch. 54-1; 24 Eng. Law & Eq. 621. " Phillips V. Berger, 2 Barb. 608. ^ Worrell v. Presbyterian Church, 8 C. E. Green, 96 (1872). See Miller V. Baptist Church, I Har. (N. J.) 251. 4 White V. Bluett, 23 Law J. (n. s.) Exch. 36 ; 24 Eng. Law & Eq. 434, Pollock, C. B., said: "The plea is clearly bad. By the argument a prin- ciple is pressed to an absurdity, as a bubble is blown until it bursts. Look- ing at the words merelj-, there is some foundation for the argument, and following the words only, the conclusion may be arrived at. It is said, the son had a right to an equal distribution of his father's property, and did complain to his father because he had not an equal share, and said to him, I will cease to complain if you will not sue upon this note. Whereupon the father said, If you will promise me not to complain, I will give up the note. If such a plea as this could be supported, the following would be a binding promise : A man might complain that another person used the public high- way more than he ought to do, and that other might say, do not complain, and I will give you five pounds. It is ridiculous to suppose that such prom- ises could be binding. So, if the holder of a bill of exchange were suing the acceptor, and the acceptor were to complain that the holder had treated him hardly, or that the bill ought never' to have been circulated, and the holder were to say, now, if you will not make any more complaints, I will not sue you, such a promise would be like that now set up. In reality, there was no consideration whatever. The son had no right to complain, for the father might make what distribution of his property he liked ; and the son's abstaining from doing what he had no right to do can be no con- sideration." And Baron Alderson added: "There is a consideration on one side, and it is said the consideration on the other is the agreement itself; if that were so, there could never be a nudum pactum." CHAP. STII.J BENEFIT OR INJURY. , 507 promise to pay the vendor the prior debt of a third person.-' So, a contract whereby the defendant agreed " to remain with Mrs. A. for two years from the date hereof, for the purpose of learning the trade of dress-maker," was made to be a nude pact, there being no stipulation on Mrs. A.'s part operating as an inducement to such an agreement, so that no action could be maintained against the defendant for leaving her mistress.^ So, also, where an instrument was signed by the defendant in these terms : " Mr. J , as you have a claim on my brother for £5 17s. 9d. for boots and shoes, I hereby undertake to pay the amount within six weeks," it was held to be without con- sideration, and void.^ So, also, an agreement to do what a person is already bound to do, is invalid ; and it is said it is not necessary, in order to invalidate the consideration, that the plaintiff's prior obligation to afford that consideration should have been an obligation to the defendant, but it may have been an obligation to a third person.* The latter part of the propo- sition has, however, been directly denied, and a contrary rule declared, where the former contract was made with a third person.^ But a promise to pay for improvements to be made on land sold, in case the title should prove worthless, is not nudum pactum.^ § 550. Where the inadequacy of consideration is so gross as to create a presumption of fraud and overreaching, or of unconscientious advantage taken under circumstances of distress or improvidence on the one side, or of mental incom- petency on the other, the contract founded thereon cannot be enforced at law or in equity ; and a court of equity will, at the instance of the party deceived, interfere and set it aside after it is executed.^ In cases of gross inadequacy, the court will 1 Pfeiffer v. Adler, 37 N. Y. 164 (1867). = Leea v. Whitcomb, 2 Moo. & P. 86 ; s. c. 5 Bing. 34. See also Sykes V. Dixon, 9 Ad. & El. 693 ; Bates v. Cort, 3 Dowl. & Kyi. 696. But see Elderton v. Emmens, 6 C. B. 160. 8 James v. Williams, 5 B. & Ad. 1109. 4 Shadwell v. Shadwell, 9 C. B. (n. s.) 159, 178 (1860), per Byles, J. ; Cole V. Shurtleflf, 41 Vt. 311 (1868) ; Cobb v. Cowdery, 40 Vt. 25 (1867) ; Reynolds ». Nugent, 25 Ind. 328 (1865). s Scotson V. Pegg, 6 H. & N. 295 (1861). 6 Richardson v. Gosser, 26 Penn. St. 335 (1855). ' Gwynne v. Heaton, 1 Bro. C. C. 6, and cases cited In the note by Mr, 508 THE CONSIDERATION. [CHAP. XTII. also take advantage of every circumstance which indicates oppression or improper advantage, to found a presumption of fraud, and thereby to rescind the contract.^ The mere inade- quacy of the consideration is not, however, in such cases the ground upon whicli a contract is invalidated, but the fraud which is thereby indicated ; and, however inadequate the con- sideration may be, yet if the circumstances of the case indicate no unfair advantage on the one side, or no great incompetency on the other, the contract will be valid .^ § 551. Where a benefit is done to a third person, at the re- quest of the promisor, it is sufficient to support his promise. As, for instance, where a person contemporaneously becomes surety for the del its, or for the performance of certain duties, or covenants, of third persons, or assumes any species of col- lateral obligation, or guaranty, he renders himself liable there- upon. The consideration, which supports this contract, is the favor which the surety receives from a compliance with his ex- press or implied request or desire, that credit should be given to the principal.^ Any person may render himself liable as surety to a third person, without the knowledge of the princi- pal ; nor is it necessary that there should be any consideration Perkins; Heathcote v. Paignon, 2 Bro. C. C. 167; Osgood v. Franklin, 2 Johns. Ch. 23; s. o. l-t Johns. .^27; George v. Richardson, Gilmer, 230; White V. Damon, 7 Ves. 30; Cathcart i\ Robinson, 5 Peters, 204; Coles v. Trecolhick, 9 Ves. 234; M'Kinney v. Pinckard, 2 Leigh, 149; Seymour «. Delancy, 3 Cow. 44.5 ; Sarter v. Gordon, 2 Hill, Ch. 126; Moffat v. Winslow, 7 Paige, 124; Copis r. IWiddleton, 2 Madd. 410; Griffith v. Sprat- ley, 1 Cox, 383 ; post, § 228 ; Follett v. Rose, 3 :\I(Lean, 332 ; Robinson v. Sehly, 6 Ga. 51.5 ; Gasque v. Small, 2 Strob. Eq. 72 ; Kidder v. Chamberlin, 41 Vt. 62 (1808) ; Church v. Chapin, 35 Vt. 223 (1862). ' Ibid.; James v. Morgan, 1 Lev. Ill ; Hough v. Hunt, 2 Ohio, 495; Williams v. Powell, 1 Ired. Eq. 460 ; Hardeman v. Burge, 10 Yerg. 202 ; Butler V. Haskell, 4 Desaus. 651 ; Udall o. Keuney, 3 Cow. 590 ; Wormack V. Rogers, 9 Ga. 60 ; Johnson i'. Dorsey, 7 Gill, 20!) ; Eilw.ards v. Burt, 2 De G. JNI. & G. 55 ; 15 Eng. Law & Eq. 435 ; Judge r. Wilkins, 19 Ala. 765. ^ Com. Dig. Action on the Case, Assumpsit (B.), and cases cited, supra ; Milnesu. Cowley, 8 Price, 620; Hubbard u. Co.>lidge, 1 Met. 93; Stew.art !). The State, 2 Harr. & Gill, 114 ; Johnson v. Titus, 2 Hill, 606. See post, § 483, 4S4. ^ Brown V. Garbrey, Gouldsb. 94 ; Kirkby v. Coles, Cro. Eliz. 137 ; Stadt r. Lill, 9 East, 348 ; Leonard v. Vredenburgh, 8 Johns. 29 ; Hunt v. Adams, fi Mass. 362 ; Howe v. Ward, 4 Greenl. 195. CHAP. XVn.] BENEFIT OB INJURY. 509 moving directly between the principal and surety ; ^ for so long as there is some consideration for the promise between the im- mediate parties, it is binding. But unless the promise be contemporaneous with the original debt, and constitute the inducement thereto, it will not be binding.^ A guaranty, there- fore, of a debt already contracted, or of a contract already made, will not be binding, for want of consideration.^ Where there is a promise to pay the pre-existing debt of another per- son to his creditor, there must be a new consideration to sup- port it, for the original consideration of the principal's contract cannot be so extended as to support the new promise.* § 552. In England, it was formerly the doctrine that a stranger to the consideration of a contract made for his "bene- fit, might maintain an action upon it if he stood in such near relationship to the party from whom the consideration pro- ceeded that he might be considered a party to the consider- ation. But this doctrine has recently been overruled ; and it is now established in that country that no stranger to the con- sideration can take advantage of a contract, though made for his benefit. The consideration must move from tlie party entitled to sue upon the contract.^ In America, the decisions have been conflicting on the point ; but the tendency of the courts is in the same direction.^ ' Minet's Case, 14 Ves. 189; Moriey v. Boothby, 3 Bing. 113. In this case. Best, C. J., said : " No court of common law has ever said that there should be a consideration directly between the persons giving and receiving the guaranty. It is enough, if the person for whom the guarantor becomes surety has benefit, or the person to whom the guaranty is given suffer in- convenience, as an inducement to the surety to become guaranty for the principal debtor." ^ Payne v. Wilson, 7 B. & C. 423; D'Wolf v. Rabaud, 1 Peters, 476; Mecorney v. Stanley, 8 Cush. 85. ^ Leonard v. Vredenburgh, 8 Johns. 29; D'Wolf v. Rabaud, 1 Peters, 476 ; Bailey v. Freeman, 11 Johns. 221 ; Hunt v. Adams, 5 Mass. 358 ; Flagg V. Upham, 10 Pick. 148 ; Mecorney v. Stanley, 8 Cush. 85 ; post, § 146. •■ Packard v. Richardson, 17 Mass. 129; Thacher v. Dinsmore, 5 Mass. 301; 1 Saund. 211, and note; Bixler u. Ream, 3 Penn. 282. "= Tweddle v. Atkinson, 1 Best & S. 393 (1861) . " It would be a monstrous proposition to say that a person was a party to the contract for the purpose of suing upon it for his oivn advantage, and not a party for the purpose of being sued." Ibid., per Crompton, J. 6 Exchange Bank v. Rice, 107 Mass. 37 (1871) ; Griffith v. Ingledew, 6 Serg. & R. 429, 442 ; Metcalf, Contracts, 208. 510 THE CONSIDERATION. [CHAP. XVII. § 553. It is not, however, absolutely necessary, in order to constitute a sufficient consideration to a promise, that a bene- fit should accrue to the promisor ; for if that promise be made as the inducement to a subsequent engagement by a third person with the promisee, it will be a sufficient consideration. Thus, in the case of a letter of credit given by A. to B., the person who, on the faith of such letter, trusts B. has his remedy against A., although no benefit accrue to A. as the consideration of his promise. ^ So, also, if one person should promise to subscribe to pay a certain sum, provided a certain third person would pay a particular sum, this promise would be founded on a sufficient consideration, if such third person should, in consequence thereof, subscribe such sum.^ So, also, all subscriptions, if they are at first gratuitous promises, and not binding, become binding, whenever the subscriber knows that outlays or engagements are made or liabilities assumed in consequence thereof.^ So, also, all subscriptions made on condition that certain acts shall be done, are binding, if such acts be done.* And this knowledge would be implied from circumstances ; and express notice need not be proved.^ FOEBEAEANCB. § 554. In the next place, as to forbearance. Forbearance to sue is a good consideration only when the party forbearing has ' Violettw. Patton, 5 Cranch, 142, 152; 2 Peters, Cond. 2U ; Carnegie V. Morrison, 2 Met. 381 ; Maud v. Waterhouse, 2 C. & P. 579 ; Smith v. Algar, 1 B. & Ad. 603 ; Emmett v. Kearns, 7 Scott, 687 ; 7 DowL P. C. 630 ; 5 Bing. N. C. 559. ^ See George v. Harris, 4 N". H. 533 ; Cong. Soc. in Troy v. Perry, 6 N. H. 164 ; Troy Academy v. Nelson, 24 Vt. 189 ; Watkins v. Eames, 9 Cush. 537. See Ayers's Appeal, 28 Penn. St. 179 (1857). ' Bryant v. Goodnow, 5 Pick. 229 ; Farmington Acad. «. Allen, 14 Mass. 172 ; Homes v. Dana, 12 Mass. 190; Watkins v. Eames, 9 Cush. 637 ; Ives V. Sterling, 6 Met. 310; Thompson v. Page, 1 Met. 665; post, § 570, 577; Mirick v. French, 2 Gray, 420 ; Robertson v. March, 3 Scam. 198 ; Barnes r. Ferine, 9 Barb. 202. * AVilliams College v. Danforth, 12 Pick. 641 ; Munroe v. Perkins, 9 Pick. 305. ' Farmington Acad. v. Allen, 14 Mass. 172 ; post, § 580. CHAP. XVII.] FORBEARANCE. 511 a right to sue in his own name, either at law or in equity.^ Forbearance for a certain or reasonable time to institute a suit upon a well-founded claim, or even upon one which is doubt- ful,2 is a sufficient consideration to support a promise ; since it is a benefit to the one party,, and a prejudice to the other.^ If the time of forbearance be stated, it must be a reasonable time ; and an agreement to forbear per breve aut paululum tempus, or pro aliquo tempore, will not be sufficient, inasmuch as the party promising may, in such case, sue immediately after the promise is made.* The law on this subject has been thus stated : An agreement to forbear for a reasonable time, or for a fixed period, followed by such forbearance, constitutes a good consideration for a promise by a third person to pay the debt,^ but otherwise, where the time of forbearance is wholly » Graham v. Johnson, Law R. 8 Eq. 36 (1869). " Blake v. Peck, 11 Vt. 483 ; Truett v. Chaplin, 4 Hawks, 178 ; Zane v. Zane, 6 Munf. 406. ^ Thornton v. Fairlie, 2 Moore, 397 ; Richardson v. Mellish, 2 Bing. 229 ; s. o. 9 Moore, 458 ; Bidwell v. Catton, Hob. 216 ; Stewart v. McGuin, 1 Cow. 99 ; Richardson v. Brown, 1 Cow. 255 ; Rippon v. Norton, Yelv. 1 ; Harris v. Richards, Cro. Car. 272 ; Elting v. Vanderlyn, 4 Johns. 237 ; King V. Weeden, Style, 264 ; Barber v. Fox, 2 Saund. 137, and note ; Forth v. Stanton, 1 Saund. 211, and note ; May v. Alvares, Cro. Eliz. 387 : Com. Dig. Action on the Case, Assumpsit, B. 1, 2; Chapin v. Lapham, 20 Pick. 467 ; Blake v. Cole, 22 Pick. 97 ; Ward v. Fryer, ,19 Wend. 494; Watson v. Randall, 20 Wend. 201. See Jennison v. Stafford, 1 Cush. 168; Giles V. Ackles, 9 Barr, 147 ; Rood v. Jones, 1 Dougl. (Mich.) 188 ; McKinley v. Watklns, 13 111. 140; Boyd v. Freize, 6 Gray, 653. Even though tho litigation has not been actually commenced. Cook v. Wright, 1 B. & S. ■559 (1861). Or though it subsequently appears that the claim was un- founded. Ibid.; Callisher v. Bisehoffsheim, Law R. 5 Q. B. 449 (1870). See Cooper v. Parker, 15 C. B. 822 ; Ockford v. Barelli, 25 Law Times (n. 8.), 504 (1871). The forbearance itself must be upon a legal considera- tion in order to be binding. Reynolds B. Ward, 5 Wend. 502 ; Parmelee v. Thompson, 45 N. Y. 58 (1871). Nor will the giving a new obligation, with additional security, for part of a debt avail as a consideration for an agree- ment to extend the time of payment of the residue. Gibson v. Rennie, 19 Wend. 389 ; Parmelee v. Thompson, supra. * Com. Dig. Action on the Case, Assumpsit, B. Lonsdale v. Brown, 4 Wash. C. C. 148 ; Sidwell v. Evans, 1 Penn. 385 ; Downing v. Funk, 5 Rawle, 69. 5 Oldershaw v. King, 2 H. & N. 517 ; Thomas v. Croft, 2 Rich. 113 ; Downing v. Funk, 5 Rawle, 69 ; Clark v. Russel, 3 Watts, 213. 612 THE CONSIDERATION. [CHAP. SVII. vague and undetermined.^ The mere indefiniteuess of the agreement, as to the time of forbearance, will not, however, invalidate it. If, therefore, the agreement be to forbear for a reasonable time, it is sufficient, since the court will decide, when the action is brought, whether the period of time actually- allowed is a reasonable time.^ So, also, if no agreement be made as to the length of time during which the promisor will forbear, the law will presume that he promises to forbear for a reasonable time ; and this is sufficiently certain, since Id cer- ium est, quod certum reddi potest.^ Thus, if one promise to pay the debt of another, in consideration that the creditor " will forbear, and give further time for the payment " of the debt, it is a sufficient consideration, though no particular time of for- bearance be stipulated ; provided the declaration aver, that he did actually forbear from such a day to such a day,* and the actual time be reasonable. It is not, however, necessary, in such a case, that the actual time during which forbearance was exercised should be set forth in the declaration. A general allegation of forbearance will be sufficient, if it be proved that it was for a reasonable time.^ A general forbearance to sue is considered as a perpetual forbearance, and therefore a good' consideration.^ But a forbearance to sue without any promise is not a good consideration ; it may in connection with other facts be evidence of an agreement to forbear, and, as such, form a good consideration for a promise.^ Nor is there any ^ Crofts V. Beale, 11 C. B. 172; Mecorncy d. Stanley, 8 Cush. 85; Walkers. Sherman, 11 Met. 170. 2 1 Roll. Abr. 26, 1. 50 ; Lonsdale v. Brown, 4 Wash. C. C. 148 ; Therne t). Fuller, Cro. Jac. 397 ; Beven v. Cowling, Poph. 183 ; Cowlln v. Cook, Latch, 151; 8. c. Noy, 83; Anon., 1 Freem. 66; Com. Dig. Action on the Case, Assumpsit, B. ; Hakes c. Hotohkiss, 23 Vt. 235. 8 Cowlin V. Cook, Latch, 151 ; s. c. Noy, 83; Therne v. Fuller, Cro. Jac. 397 ; Beven v. Cowling, Poph. 183 ; Mapes v. Sidney, Cro. Jac. 683 ; s. c. Hutt. 46 ; I-Iamaker v. Eberley, 2 Binn. 506 ; Maynell v. Jilackallye, Style, 459 ; Barnehurst w. Cabbot, Hardr. 5 ; Clark v. Russel, 3 Watts, 213. » King 1;. Upton, 4 Grecnl. 387 ; Elting v. Vanderlyn, 4 Johns. 237 ; Allen V. Pryor, 3 A. K. Marsh. 305. See Morton v. Burn, 7 Ad. & El. 19 ; Willatts V. Kennedy, 8 Bing. 5. 6 Payne v. Wilson, 7 B. & C. 423; Elting v. Vanderlyn, 4 Johns. 237. 6 Clark V. Kussel, 3 Watts, 213 ; Sidwell v. Evans, 1 Penn. 385 ; Hume V. Hinton, Style, 304 ; Elting v. Vanderlyn, 4 Johns. 237 ; Herring w. Dorell, 8 Dowl. P. C. 604. ' Mecorney v. Stanley, 8 Cush. 88. CHAP. XVII.] POEBEA RANGE. 513 legal consideration in the case of a promise for a past forbear- ance.' § 555. Where a contract is made of such a nature as to imply a promise to forbear bringing a suit, it will be equally binding as if the promise were express. If, therefore, a person having a judgment debt take from his debtor a promissory note for the amount payable at a future time certain, the agreement to suspend nis remedy for that period is necessarily implied in the transaction, and constitutes a good consideration for the giving of a note.^ § 556. An agreement to forbear to sue or enforce a claim, which is utterly unfounded, and upon which there is no good cause of action, is void for want of consideration.^ A forbear- ance to sue a claim, which is made in good faith, although it prove to be entirely groundless, is a good consideration for a promise.* It might be different if the plaintiff knew he had no claim. ^ Thus, if one of two joint obligors on a bond be released by the obligee, and the other promise afterwards to pay it, in consideration of forbearance on the part of the obligee, the promise would be void for want of consideration, because the release of one obligor is a release of the other.* ■ Carter v. Moses, 39 111. 539 (1864). " Baker v. Walker, 14 M. & W. 468. See post. A promise to extend tlie time of payment of a debt already due is not binding unless made upon some new consideration. A part payment of the debt, or interest in arrcar, or to pay future interest promptly, the contract being already on interest, is not sufficient. Parmelee v. Thompson, 45 N. Y. 68 (1871) ; Kellogg v. Olmsted, 25 N. Y. 189. * Jones V. Ashburnham, 4 East, 455 ; Smith v. Algar, 1 B. & Ad. 604; Com. Dig. Action on the Case, Assumpsit, F. 8; Gould v. Armstrong, 2 Hall, 266 ; Cabot v. Haskins, 3 Pick. 83 ; Warder v. Tucker, 7 Mass. 449 ; Freeman v. Boynton, 7 Mass. 483 ; May v. Coffin, 4 Mass. 347 ; Atkinson v. Settree, Willes, 482; Randall v. Harvey, Palm. 394; Rosyer v. Langdale, Style, 248 ; Nelson v. Serle, 4 M. & W. 795 ; Slack v. Moss, Dudley (Ga.), 161 ; Wade v. Simeon, 2 C. B. 548 ; N. H. Bank v. Colcord, 15 N. H. 119 ; Martin v. Black, 20 Ala. 309 ; Lowe v. Weatherley, 4 Dev. & Batt. 212 ; Silvernail v. Cole, 12 Barb. 685 ; Llewellyn v. Llewellyn, 3 Dowl. & L. 318 ; Edwards v. Baugh, 11 M. & W. 641 ; White v. Bluett, 23 Law J. (n. s.) Exch. 36. See Hennessey v. Hill, 62 111. 281 (1869). 4 Callishert). Bischoffsheim, LawR. 5 Q. B. 449 (1870) ; Cook v. Wright, 1 B. & S. 559. And see Llewellyn v. Llewellyn, 3 Dowl. & L. 318. ' Wade B. Simeon, 2 C. B 648. • Herring w. Dorell, 8 Dowl. P. C. 604; Hammon », Roll, March, 202. VOL. I. 33 51-1 THE CONSIDERATION. [CHAP. XTTt. And it has been held that an agi-eement not to bring forward a certain existing set-off, against the price of work being per- formed, was not binding, though made in consideration of a deduction from the price of the work ; ^ but a contrary doctrine has also been maintained.^ So, also, a promise by an heir to pay the Ijond of his ancestor, in consideration of forbearance to sue him thei-eupon, is void, unless he be expressly bound in the bond. 3 So, also, forbearance to sue a note, given by a feme covert, without her husband's consent, during her cover- ture, or a bond as surety given by an infant, is no consid- eration to support a new promise to pay,* because no liability ever attached to either party. So, also, a promise by an heir, in consideration of forbearance to prosecute a suit in chancery against him, to which he could not be made a party, will not support an action.^ Yet if the defendant would avail himself of the insufficiency of such a consideration, in a suit upon his promise, he must show conclusively that the claim could not have been enforced, either in law or in equity.^ § 557. Again, it must appear that there was some party who could be sued, for otherwise forbearance would be a mere form.^ But if it appear that the claim was only doubtful, the consideration would be sufficient.^ Thus, where a ship, hav- ing on board a pilot, as required by law, ran afoul of another vessel, and proceedings were instituted by the owners of the latter to compel the owners of the former to make good the damages ; and the same vessel was detained until bail was given ; and, pending such proceedings, tlie agent of the owners of the damaging vessel agree to indemnify the owners of the damaged vessel, and to pay a stipulated sum as damages ; it ' Lovett V. King, 16 Ind. 464 (1861) ; M'Gillivray v. Simson, 2 C. & P. 320; &. c. 9 Dowl. &%!. 35. " Louden v. Tiffany, 5 Watts & S. 307. ' Barber v. Fox, 2 Saund. 136 ; s. c. 1 Vent. 159. '' Loyd V. Lee, 1 Str. 94 ; Goodwin v. Willoughby, Latch, 142 ; s. c. Poph. 177; ante, § 101, 165, 171. ° Tooley v. Windham, Cro. Eliz. 206. « Gould V. Armstrong, 2 Hall, 266. ' Jones ». Ashburnham, 4 East, 455 ; Nelson v. Sorle, 4 M. & W. 795. ' Riehardson v. Mellish, 2 Bing. 229 ; s. c. 9 Moore, 435 ; Longridge o. Dorville, 5 B. & Al. 117; Wilbur v. Crane, 13 Pick. 284; Union Bank of Georgetown v. Geary, 5 Peters, 114. CHAP. XTII.] FORBEARANCE, 515 ■was held, that, there being contradictory decisions as to whether ship-owners were liable for an injury done by their ship, while under the control of a pilot, as required by law, there was a sufficient consideration to support the promise.^ § 658. If, however, the claim be well grounded, forbearance to sue it is a sufficient consideration to support the promise of a third person, as well as that of the party liable to the suit, if the bringing of the suit would occasion any inconvenience or injury to such third person .^ An agreement by the holder of a promissory note to forbear to sue the maker for a certain and reasonable time is a sufficient consideration for a guaranty of payment by a third person.^ So, also, a forbearance by A. at the request of B. to enforce z, fieri facias, against the goods of a third person, for £60, was held to be a good consideration for B.'s promise to pay A. £107 in seven days.* So, where forbearance is given by the assignee of a debt who could not have sued in his own name, the consideration is sufficient.^ So, also, a promise, to pay the debt of another if the creditor would stay an execution therefor for a certain time, is a suffi- cient consideration, if the execution be stayed until after the agreed day.® So, also, if an executor or administrator, in con- sideration of a forbearance by a creditor of the testator to sue, promise to pay his debt, he will be personally bound, although he have no assets,^ upon the ground that such forbearance is a matter of personal benefit. But if no advantage or benefit accrue to the administrator in his individual capacity, his ' Longridge v. Dorville, 5 B. & Al. 117. See Wade v. Simeon, 2 C. B. 5i8. ' Reynolds v. Prosser, Hardr. 71 ; Davison v. Hanslop, T. Raym. 211 ; Quick V. Copleston, 1 Sid. 242. ^ Sage V. Wilcox, 6 Conn. 81. ■* Smith V. Algar, 1 B. & Ad. 603. ° By the older decisions, the consideration was not sufficient in such cases, unless the assignee had a letter of attorney to sue and release. 1 Roll. Abr. 20, pi. 11, 12, and cases there cited. " Giles V. Aokles, 9 Barr, 147. See also McKelvy v. Wilson, 9 Barr, 183. See Lent v. Padelford, 10 Mass. 230. ' Goring V. Goring, Yelv. 11 (Am. ed. by Metcalf), note 2; 1 Saund. 210, note 1 ; Treford v. Holmes, Hutt. 108 ; Parker's Case, Hutt. 66 ; Porter V. BQle, 1 Freem. 125 ; 2 Saund. 137, note c. 516 THE CONSIDERATION. [CHAP. 2TII. promise will not render him liable beyond his assets ; for a promise is only coextensive with the consideration, unless some particular consideration of fact warrant its extension, so as to create an individual liability. ^ The benefit accruing personally to the administrator arises from the fact that the creditor may bring a suit against him immediately ; and if there be no present assets, he may have judgment to recover quando bona acciderint? § 559. It is not, however, necessary that the forbearance should be in respect of a present and immediate right of action ; but it will be sufficient if the promise be to forbear to prose- cute a claim when it shall become due. Thus, an agreement by a surety to forbear to institute a suit against the principal, whenever his cause of action shall arise, is a sufficient consid- eration for a promise of indemnity by a third person, although the surety have no cause of action at the time of th-e agree- ment.3 § 560. Wherever forbearance to sue either operates as a benefit to the one party, or as an injury to the other, it will be sufficient to support a promise made thereupon. As, for in- stance, a promise by a judgment debtor to pay the debt and costs, in consideration of a stay of execution, is binding, and will support an action.* So, also, if an obligor, on Ijeing called upon to pay his bond, should promise to pay on a future day, ' Bac. Abr. Executors and Admr's, M. 2 ; Rann v. Hughes, 7 T. E. 350, note. ^ 21 Am. Jur. p. 272. It has been said, that the executor's promise impKes assets ; but this would be no reason, since a failure of assets would then be a failure of consideration, and invalidate the promise, which it does not. See Pearson v. Henry, 5 T. R. 8 ; Rann v. Hughes, 7 T. R. 350, note j Browne's Case, 1 Freera. 409 ; Reech u. Kennegal, 1 Ves. 121), by Lord Hard- wicke. See ante. Executors and Administrators. ^ Hamaker v. Eberley, 2 Binn. 506 ; Bidwell v. Catton, Hob. 216 ; Parker V. Leish, 2 Stark. 229. ■■ The contrary doctrine was held by Lord Mansfield and Ashhurst, J., in an anonymous case in Cowp. 128, upon the ground that it w.is turning a judgment debt into a debt upon simple contract ; but this seems only to be a matter between the parties, and was diiferently adjudged in Tisdale's Case, Cro. Eliz. 758 ; and in the case of Tanner v. Hague, 7 T. R. 420. The rule, as stated in the text, seems the better-founded doctrine. See Baker v. Walker, 14 M. & W. 468. CHAP. XVII.] FOEBEABANCB. 517 assumpsit would lie ou this promise.^ Forbearance to levy an execution,^ or to protest a bill of exchange drawn on the party promising,^ or the withdrawing of objections to the probate of a will,^ are sufficient considerations, upon the same ground. So, also, all compromises of doubtful claims, or conflicting rights, and all arrangements made for the purpose of prevent- ing litigation, constitute a sufficient consideration to support a promise, if made bond fide, although they may be founded upon a mistake.^ § 561. It is not only not necessary, however, that forbear- ance should be unlimited, so as to operate as a total discharge of liability ; but it is immaterial whether suit be already com- menced or not, or whether the proceedings be at law or in equity.^ The only question is, whether forbearance is either a benefit to the one party, or an injury to the other. § 562. In cases where forbearance to sue is the consideration of a promise, the declaration should state distinctly to whom the forbearance was given ; so that it may appear whether it were an injury or benefit to either party. For unless the party to whom it is given were actually liable in the suit, or, at least, unless his liability were doubtful, the forbearance would con- stitute no sufficient consideration.^ ' Foster V. Allauson, 2 T. R. 479 ; Ashbrooke v. Snape, Cro. Eliz. 240. See, however, Codman o. Jenkins, 14 Mass. 99, in which this doctrine is denied ; but the cases before cited sufficiently establish the rule, as stated in the text. » Boyle V. Scarborough, Style, 395, 440 ; Cro. Eliz. 848, 868, 909 ; Godb. 159, pi. 220; Best v. Jolly, 1 Sid. 38; Love's Case, 1 Salk. 28; Lent ». Padelford, 10 Mass. 230 ; Jennings v. Hatley, Yelv. 20 ; Newsom's Case, Clayton, 139. = Pinchard v. Fowke, Style, 416. < Hill V. Buckminster, 6 Pick. 393. " Barlow V. Ocean Ins. Co., 4 Met. 270 ; Pickering v. Pickering, 2 Beav. 31 ; Leonard v. Leonard, 2 Ball & Beat. 179, 180 ; Shotwell v. Murray, 1 Johns. Ch. 516 ; Lyon v. Richmond, 2 Johns. Ch. 51 ; 1 Story, Eq. Jur. § 131 ; O'Keson v. Barclay, 2 Penn. 531. See post, § 571. " Hamaker v. Eberley, 2 Binn. 506. ' Jones V. Ashburnham, 4 East, 455; Marshall v. Birkenshaw, 1 Bos. & Pul. N. R. 172. See Lent v. Padelford, 10 Mass. 230, and the cases there cited. 518 THE CONSIDERATION. [CHAP. XVII. ASSIGNMENT OF A CHOSE IN ACTION. § 563. The assignment of a chose in action is a suificient consideration for a promise by the assignee, unless it be void for illegality or other sufficient reason.^ An assignment of a chose ill action will not, at the common law, however, confer upon the assignee a right of action in his own name against the original debtor, unless such debtor either expressly promise to pay the assignee, or unless the assignment be made with his assent, in which case the law implies a promise from him to the assignee, the consideration of which is the discharge of liability to the assignor in respect of the claim. ^ § 564. There are, however, certain exceptions to this rule, which obtain at law in favor of negotiable instruments, and which are created by the policy of the law, t(j answer the demands of public convenience. Wherever, therefore, the con- tract is negotiable, if it be payable to order, it may be assigned by mere indorsement, and if it be payable to bearer, a mere delivery constitutes a sufficient assignment.^ In equity, how- ever, this distinction between negotiable instruments and in- struments not negotiable is wholly disregarded. Every bond fide assignment for a valuable consideration is considered as a declaration of trust, and confers upon the assignee the same ' See Graham v. Gracie, 13 Q. B. 548 ; Whittle v. Skinner, 23 Vt. 532 ; Edson r. Fuller, 2 Fost. 185 ; Harrison v. Knight, 7 Tox. 47 ; Sherman o. Barnard, 19 Barb. 801. For a full consideration of this subject, see ante, ch. xiv. ' Tiernan v. Jackson, 5 Peters, ,597 ; Crowfoot v. Gurney, 9 Bing. 372 ; Hodgson V. Anderson, 3 B. & C. 842 ; Baron v. Husband, 4 B. & Ad. 611 ; 2 Story, Eq. Jur. § 1039. See Price v. Seaman, 4 B. & C. 625; Edson v. Fuller, 2 Fost. 185 ; Graham v. Gracie, 13 Q. B. 548 ; Whittle ». Skinner, 23 Vt. 532. ' Tenner v. JMcares, 2 W. Bl. 1269; Isr.iel v. Douglas, 1 H. Bl. 289; Mowry «. Todd, 12 Mass. 288; Jones y. Witter, 13 Mass. 307; Crocker v. Whitney, 10 Mass. 319 ; Coolidge v. Rusf,des, l.'j Mass, 388 ; Lampet's Case, 10 Co. 48 n ; Thallhimer v. Erinckerhofif, 3 Cow. 623 ; Com. Dig. Assign- ment, D. ; Tiernan i\ Jackson, 5 Peters, ."y.)7 ; Williams v. Everett, 14 East, 582 ; Crowfoot v. Gurney, 9 Bing. 372 ; Hodgson v. Anderson, 3 B. & C. 842; Baron e. Husband, 4 B. & Ad. 611 ; Maudeville i\ Welch, 5 Wheat. 277. CHAP. XVII.j ASSIGNMENT OP A CHOSE IN ACTION. 619 rights of action against the original debtor as the assignor himself would have.^ § 665. Again, not only possibilities, expectancies, and con- tingent rights may be assigned in equity, but may be made the subject of a contract which could be enforced upon the happen- ing of the event on which the contingency is founded, and not before.^ An unliquidated account has been held assignable.^ Courts of law, however, now follow the doctrine of equity, as far as possible, without infringing upon established principles of common law ; and the beneficial interest of the assignee is so far protected, that it has even been held the defendant may set off a debt due to the assignee in like manner as if the suit had been brought in his name.* § 566. Whenever assignments are illegal or against public policy, they will not be sustained either in equity or law ; and, therefore, will constitute no consideration for a promise.^ Thus, the assignment of his pay by an officer in the army or navy ; ^ or' an assignment which savors of maintenance ; ^ or the assignment of a right of action for a tort,^ — will not sup- port 'a contract. § 567. Where a chose in action is assigned to the govern- ment, no express promise is necessary from the original debtor, and the government may sue in its own name.^ But where ^ 2 Story, Eq. Jur. § 1040, 1055 ; Langton v. Horton, 5 Beav. 9 ; Trull y. Eastman, 3 Met. 121 ; Goring v. BickerstafF, 1 Cas. Ch. 8 ; 1 Madd. Ch. Pr. 437 ; 1 Fonbl. Eq. B. 1, ch. 4, § 2, and note fir ; Com. Dig. Chancery, 2 H. Assignment; Dulce of Chandos u. Talbot, 2 P. Wms. 603; Story on Bills of Ex. § 199, 201. - 2 Story, Eq. Jur. § 1040, 1040 & ; Stokes v. Holden, 1 Keen, 145 ; Wells V. Foster, 8 M. & W. 149. See § 469. ' Wescott !). Potter, 40 Vt. 272 (1867), overruling the dictum of Red- field, J., in Whittle u. Skinner, 23 Vt. 531. * Corser v. Craig, 1 Wash. C. C. 424. ^ See Greville v. Attkins, 9 B. & C. 462; Waldo v. Martin, 4 B. & C. 319. " Flarty v. Odium, 3 T. R. 681 ; Wells v. Foster, 8 M. & W. 149 ; Davis V. Duke of Marlborough, 1 Swanst. 79 ; Stone «. Lidderdale, 2 Anst. 533 ; 2 Story, Eq. Jur. § 1040 d to 1040/. ■< Prosser v. Edmonds, 1 Younge & Coll. 481, 496. See post, § 678, 579. 8 Gardner v. Adams, 12 Wend. 297 ; Commonwealth v. Fuqua, 3 Litt. 41 . » Bac. Abr. Prerogative, 2, 3 ; The King «. Twine, Cro. Jac. 180. 520 THE CONSIDERATION. [CHAP. XVII. the assignment is of a claim barred by the statute of limita« tions, it acquires no new validity thereby.^ MUTUAL PBOMISES; § 568. Mutual promises are concurrent considerations, and will support each other, unless one or the other be void ; ^ in which case, there being no consideration on the one side, no contract can arise. But if the promise on one side be only voidable, as in consideration of money given, or of a promise by an infant, it is sufficient.^ § 569. Mutual promises, however, to be obligatory, must be made simultaneously. If they be made at different times on the same day, they will not be a good consideration for each other, because of the want of reciprocity of obligation at the moment the contract is made.* It is not, however, necessary that each promise should be absolute, so that either party could enforce it against the other ; — for a promise conditional on the doing of some act may be rendered binding by the act, while it may give no right to compel the doing of it. Thus, if a guaranty be given on condition of the employment of a particular person, the guarantor could not insist that such per- son should be emphiyed, although, if he should be employed, the guaranty would be binding.^ Yet, until the conditional ' United States v. Buford, 3 Peters, 13. ^ Babcock v. Wilson, 17 Me. 372. ^ Com. Dig. Action on tbe Case, Assumpsit, B. 14; Doct. and Student, 181 ; Lamplei;i;li v. Brathwait, Hob. 105 ; s. c. 1 Smith's Leading Cases, 67 ; Parish v. Stone, 11 Pick. 108. ' Nichols V. Raynbrcd, Hob. 88 6 ; 1 Chitty, PI. 297 ; 2 Kent, Comra. 46.5 ; Livingston v. Rogers, 1 Caines, 585 ; Tucker v. Woods, 12 Johns. 190; Keep V. Goodrich, 12 Johns. 397. See Lester v. Jewctt, 12 Barb. 502 ; McKinley v. Watkins, 13 111. 110 ; Dorsey v. Packwood, 12 How. 126 ; Governor & Co. of Copper Miners v. Fox, 3 Eug. Law & Eq. 420, and Bennett's note; 16 Q. B. 229 ; Commercial Bank v. Nolan, 7 How. (Miss.) 608; L'Amoreux v. Gould, 3 Seld. 319. * Kennaway «. Treleavan, 5 M. cfe W. 501. In this case Baron Parke said: " There is a case in the books, of Newbury v. Armstrong, 6 Bing. 201, which strongly resembles the present. There the guarantee was in these terms: ' I agree to be security to you for T. C. for whatever, while in your employ, you may trust him with, and in case of default, to make the same good ; ' CHAP. XVII.] MUTUAL PROMISES. 621 promise be rendered binding by the act or time on which it is conditioned, it maybe retracted ;i unless, perliaps, when the retraction operates as an injury to the other party, — as by Inducing him to make engagements or assume responsibilities.^ § 670. Reciprocal promises of marriage are binding ; and the promise of an infant to marry is a sufficient consideration for a corresponding promisd.^ A promise by a woman to marry a man is a good consideration for a note given by him to her, before such marriage, and the subsequent marriage does not of itself annul the note.* So, also, a promise to accept and pay for goods, is a sufficient consideration for a promise and the contract was held to be good, on tl\e ground that the future em- ployment of the party was a sufficient consideration. It is said, and truly, that in the present case there was no binding contract on the plaintiffs, and that, notwithstanding the guarantee, they were not bound to employ Paddon. But a great number of the cases are of contracts not binding on both sides at the time when made, and in which the whole duty to be performed rests with one of the contracting parties. A guarantee falls under that class ; when a person says, ' In case you choose to employ this man as your agent for a week, I will be responsible for all such sums as he shall receive during that time, and neglect to pay over to you ;' the party indemnified is not, therefore, bound to employ the person designated by the guarantee ; but if he do employ him, then the guarantee attaches and becomes binding on the party who gave it. It is, therefore, no objection in the present case to say that the plaintiffs were not obliged to take Paddon into their service ; they might do so or not, as they pleased ; but having once done so, the guarantee attaches, and the defendant becomes responsible for the default." See also Mozley V. Tinkler, 1 C. M. & R. 692 ; and ante, § 39 to 52 ; Morton v. Burn, 7 Ad. & El. 19 ; 2 Wms. Saund. 137 i ; Laythoarp v. Bryant, 2 Bing. N. C. 735. ' Routledge ». Grant, 4 Bing. 660. = See White v. Demilt, 2 Hall, 405 ; Babcock v. Wilson, 17 Me. 372 ; Appleton V. Chase, 19 Me. 74. ' Willard v. Stone, 7 Cow. 22; Wightman v. Coates, 15 Mass. 1; Boynton ». Kellogg, 3 Mass. 189 ; Holcroft v. Dickenson, Carter, 233 ; s. c. 1 Freem, 95, 347 ; Harrison v. Cage, 5 Mod. 412 ; s. c. 12 Mod. 214; Baker v. Smith, Style, 295, 304. An oral agreement to marry and pay the debts of the intended husband, in consideration that he convey her his property, is vahd and binding on the husband if fully performed by the wife. Dygert v. Remerschnider, 32 N. Y. 629 (1865) . And see Miller v. Goodwin, 8 Gray, 542. * Wright «. Wright, 59 Barb. 606 (1871), modifying any thing contrary in Curtis v. Brooks, 37 Barb. 476. 522 THE CONSIDERATION. [CHAP. XVII. to sell and deliver them.^ And, indeed, tlie promise by one party to do an act which is not void, constitutes a sufficient consideration for a promise by the other party ; ^ as for an exchange of work, by which the accounts of each party may be paid by the other.^ Nor is it necessary in such cases that an express agreement should be proved, but it may be inferred from such circumstances as usually accompany a similar en- gagement.* So, also, where several persons mutually agree to contribute certain sums of money toward a common object, which they desire to accomplish, the promise of all is a suffi. cient consideration for the promise of each,^ at least if the non-performance by one would occasion any prejudice to the others ; or if, in consequence of such promises, liabilities be incurred within his knowledge.^ § 571. In the next place, all mutual compromises and ar- rangements, by which doubtful legal rights are waived or debts are settled, are valid, as being on sufficient consideration, if entered into without fraud." The compromise of a claim may be a good consideration for a promise, even before any litigation is commenced.' But, as we have already seen, the waiver of a legal right which has no actual existence, or could not be enforced for want of any responsible party, would not ' Appleton V. Chase, 19 Me. 74; Bettisworth v. Campion, Yelv. 13-1; Nichols V. Raynbred, Hob. 8s 6, and note by Williams ; Briggs v. Tillot- son, 8 Johns. 304 ; White v. Demilt, 2 Hall, 405. ' Quarles v. George, 23 Pick. 401; j\[ytTs v. Morse, 15 Johns. 425; Babcock V. Wilson, 17 Me. 372 ; Briggs v. Tillotson, 8 Johns. 304 ; Howe v. O'Mally, 1 Murph. 287; Coleman v. Eyre, 45 N. Y. 38 (1871). ' Davis t>. Petit, 27 Vt. 216 (1855). < Wightman t). Coates, 15 Mass. 1 ; Southard v. Re.xford, 6 Cow. 254. » Society in Troy v. Perry, 6 N. H. 164 ; George v. Harris, 4 N. H. 533; Commissioners v. Perry, 5 Ohio, 58 ; State Treasurer v. Cross, 9 Vt. 289 ; Watkins v. Eames, 9 Cush. 537 ; Mirick v. French, 2 Gray, 420. " Bryant v. Goodnow, 5 Pick. 229 ; Farmington Acad. u. Allen, 14 Mass. 172 ; Homes v. Dana, 12 Mass. 190 ; Williams College v. Danforth, 12 Pick. 541.^ ' Penn v. Lord Baltimore, 1 Ves. 4.50 ; Union Bank v. Geary, 5 Peters, 114; Barlow v. Ocean Ins. Co., 4 Met. 270; McKinley v. Watkia^, 13 111. 140; Longridge v. Dorville, 5 B. & Al. 117. " Cook'u. Wright, 1 B. & S. 669 (18C1). CHAP. XVII.] MUTUAL PROMISES. 523 be a sufficient consideration.^ So, if the compromise be against public policy, as if it be to waive a suit which the public interest demands should be prosecuted, it would not be binding.2 But where there is an honest difference of opin- ion between different parties as to doubtful rights, and a bond fide compromise is made, it will be supported both in law and in equity, whether the consideration be equal or not on both sides.^ And where the compromise has been founded upon, a mistake in point of law, but with full cognizance of all the facts, it will afford no ground of relief in equity,* unless there were imposition or breach of trust between parties standing in confidential relations, or fraudulent advantage taken by one over the other.^ So, also, all family compromises are upheld in equity ; but in all such cases there must be strict honesty.^ So, also, the acceptance of a part of the sum due on a debt is a good consideration for a release of the whole claim, pro- vided any change be made in the mode of payment, beneficial to the creditor, — as if the part payment be in a more con- venient place, or at a day before the whole debt is due.^ Where ' Wade V. Simeon, 2 C. B. 648; Newell v. Fisher, 11 Sm. & M. 431; White V. Bluett, 23 Law J. (n. s.) Exch. 36 ; 24 Eng. Law & Eq. 434. If A.'s house takes fire by accident, and communicates to B.'s, and upon B.'s representation to A. that he was the cause and is liable for it, he induces A. to give him a note for the value, such note is void. Knotts v. Preble, t>0 111. 226 (1869). ' Coppook V. Bower, 4 M. & W. 361 ; Gardner v. Maxey, 9 B. Monr. 90; Clark v. Kicker, 14 N. H. 44; Walbridge v. Arnold, 21 Conn. 424. ' Longridge v. Dorville, 5 B. & Al. 117 ; Gould v. Armstrong, 2 Hall, 266 ; Edwards v. Baugh, 11 M. & W. 641. ■* Storrs V. Barker, 6 Johns. Ch. 169, 170 ; Leonard v. Leonard, 2 Ball & Beat. 179 ; Shotwell v. Murray, 1 Johns. Ch. 616 ; Lyon v. Richmond, 2 Johns. Ch. 61; Stewart v. Stewart, 6 CI. & Finn. 969 ; Harvey v. Cooke, 4 Kuss. 34; Gordon v. Gordon, 3 Swanst. 470; Pickering v. Pickering, 2 Beav. 31, 56 ; Hunt v. Rousmaniere, 1 Peters, 15 ; s. c. 8 Wheat. 179. ^ Smith V. Pincombe, 3 Macn. & G. 653 ; 10 Eng. liaw & Eq. 50 ; Groves V. Perkins, 6 Sim. 576 ; Evans v. Llewellin, 1 Cox, 340; 1 Story, Eq. Jur. § 132-138 ; Langstaffe v. Fenwick, 10 Ves. 406 ; Stewart v. Stewart, 6 CI. & Finn. 911, 966. « See 1 Story, Eq. Jur. § 131, 132 ; Smith v. Pincombe, 3 Macn. & G. 653 ; 10 Eng. Law & Eq. 50 ; Stapilton v. Stapilton, 1 Atk. 210 ; Jodrell v. Jodrell, 9 Beav. 45. ' Howe V. Mackay, 6 Pick. 44 ; Brooks v. White, 2 Met. 283 ; Kellogg v. 624 THE CONSIDERATION. [CHAP. XVII. there are mutual accounts and claims between persons, any bona fide settlement between them to liquidate the account will he upheld.! UNILATERAL CONTRACTS. § 572. When the party to whom an offer or promise has been made makes no express promise in return, the contract is said to be unilateral ; and it is not binding until accepted. Indeed, it cannot properly be called a contract before accept- ance. Upon being accepted, the offerer or promisor becomes bound to perform his agreement. But as to the other, if any thing still be necessary on his part to enable the offerer to fulfil his engagement, he may, it seems, refuse to take the step without incurring liability.^ For instance, if a person offer to supply another with iron, he may, before acceptance retract his offer ; but after acceptance he will be bound to supply the iron according to his offer, wlien it is ordered. And if it be not ordered, it is held that he has no right of action against the other party, notwithstanding the acceptance.^ The reason probably is, that the acceptance, considered as a promise, is without consideration. CONSIDERATION MOVING PROM THIRD PERSONS.* § 573. It is now well settled as a general rule, although the early cases are quite contradictory on the point, that in cases of simple contract, if one person make a promise to another for the benefit of a third, it is not binding in favor of the latter, without a promise by him to the plaintiff, except in peculiar cir- Richards, 14 Wend. 116 ; Harper v. Graliam, 20 Ohio, 105 ; Lee v. Oppen- heiincr, 32 Me. 253 ; Slbree v. Tripp, 15 M. & W. 23. See post, § 1340 -1353. 1 Willcinson v. Byers, 1 Ad. & El. 106. See also Wilbur v. Crane, 13 Pick 2.S4 ; Hey v. Moorhouse, 6 Bing. N. C. 52. ' Burton V. Great Northern Railway Co., 9 Ex. 507. ' lb. ; Great Northern Railway Co. v. Witham, Law R. 9 C. P. 16 ; 43 Law J. C. P. 1 (1873). ■* A conb.ideration moving to third persons, of which the defendant gets the benefit, as by beini; admitted into partnership with them, will often sup- port a promise by the defendant. Philpot v. Gruninger, 14 Wall. 670 (1870). CHAP. XVII.] CONSIDERATION MOVING PROM THIRD PERSONS. 525 cumstances, as where money or property is placed in the hands of the defendant which in equity and good conscience belongs to the plaintiff.! The tendency is to restrict the rule to the doctrine of privity .^ It is not indeed required that the plaintiff should be privy to the consideration ; but if he be a stranger to the consideration, there must generally be a promise to him from the defendant to enable him to maintain his action. Where, therefore, the declaration stated, that A. owed the plaintiff £13, and that in consideration thereof, and that A., at the de- fendant's ref[uest, had promised the defendant to work for him at certain wages, and also, in consideration that A. would leave the amount, which might be earned by him, in the de- fendant's hands, he (the defendant) undertook and promised to pay the plaintiff the said sum of £13, it was held, although it appeared that A. had performed his part of the agreement, that the plaintiff could not recover, because he was clearly a mere stranger to the consideration, no prom- ise having been made to him." But on the other hand, • Exchange Bank ». Rice, 107 Mass. 37 (1871). See ante § 552, and note. ^ The rule has always been strict in the case of sealed instruments. Southampton v. Brown, 6 B. & C. 718; Sanders v. Filley, 12 Pick. 651; Johnson t- . Foster, 12 Met. 167 ; Hinkley v. Fowler, 15 Me. 285. ^ In Crow V. Rogers, 1 Str. 592, the court, without much debate, held that the plaintiff was a stranger to the consideration, and gave judgment for the defendant. This case was affirmed in Starkey v. Mill, Style, 296 ; and the same doctrine was held in Bourn v. Mason, 2 Keble, 457, 527 ; S. P. stated in De la Bar v. Gold, 1 Keble, 44, and Crow «. Rogers was again affirmed in Price v. Easton, 4 B. & Ad. 434. In Dutton v. Pool, 1 Vent. 318, 322; s. c. 2 Lev. 210, and T. Raym. 302, the doctrine was held, that if one person make a promise to another for the benefit of a third, the latter may maintain an action upon it, although the consideration do not move from him. This case is cited and approved by Lord Mansfield, in Martyn w. Hind, 2 Cowp. 443 ; 1 Doug. 146, who said that it was a matter of surprise how a doubt could have arisen. But these early cases have been overruled. Tweddle u. Atkinson, 1 B. & S. 393 ; Leake, Contracts, 222. See also Rippon e. Norton, Yelv. 1 ; Whorewood v. Shaw, Yelv. 25, and Metcalf 's note (1) ; Carnegie v. Waugh, 2 Dowl. & Ryl. 277 ; Bafeild v. Colkrd, Aleyn, 1 ; Bell V. Chaplain, Hardr. 321; Osborne v. Rogers, 1 Wms. Saund. 264; Curtis V. Collingwood, 1 Vent. 297; Disborne ». Denabie, 1 Roll. Abr. 31, pi. 6 ; Company of Felt Makers ». Davis, 1 Bos. & Pul. 102. The distinctiou 526 THE CONSIDERATION. [CHAP. XVII. where the plaintiffs were creditors, and the defendants were debtors of T., and by consent of all parties an arrangement was made that the defendant should pay to the plaintiffs the debts due from them to T., it was held, that the agreement was for a sufficient consideration.' So, also, where the decla- ration stated that the defendants being in possession of certain mortgage deeds, of which A. was desirous to obtain an assignment by the payment of £500, the plaintiff con- sented, at A.'s request, to accept bills for that amount, drawn by A., upon A.'s procuring the defendants to delivjer the mort- gage deed to the plaintiff as a security ; and that the defend- ants, in consideration of the acceptance of the bills by the plaintiff, undertook to deliver the deeds to him upon his pay- ing the amount of the bill ; it was held, that this w^as a suf- ficient consideration to support the action by the plaintiff, it appearing that all the parties were together when the agree- ment was made.^ Indeed, a privity of contract will always be implied, where the promise or agreement is made in the pres- ence of the third person, with his assent.^ But unless tho promise is made to the plaintiff, or the consideration moves from him, he cannot generally sue on it.* § 574. According to the rule as laid down by the English courts, a privity of contract sufficient to enable the third per- in the text is fully supported in Williams v. Everett, 14 East, 682 ; Pigott t). Thompson, 3 Bos. & Pul. 149; Tipper v. Bicknell, 3 Bing. N. C. 710; Webb V. Rhodes, 3 Bing. N. C. 734 ; Wilson v. Coupland, 5 B. & Al. 228 ; Lilly 1'. Hays, 5 Ad. & El. 550; Jones v. Robinson, 1 Exch. 456; Thomas V. Thomas, 2 Q. B. 857 ; Sargent v. Morris, 3 B. & Al. 281 ; Rowe v. New- bury, W. Jones, 415 ; Hammond on Parties, 79 ; 1 Chitty, Plead. 5. And see Watson v. Swann, 11 C. B. (n. s.) 756; Page v. Becker, 31 Mo. 446; Fithian v. Monks, 43 Mo. 503 ; Chesterfield, &c., Co. v. Hawkins, 3 H. & C. 677. ' Wilson V. Coupland, 6 B. & Al. 228. ' Tipper v. Bicknell, 3 Bing. N. C. 710. See M'Coubray v. Thomson, Irish R. 2 C. L. 228 (1868). « Tipper I). Bicknell, 3 Bing. N". C. 710 ; Webb v. Rhodes, 3 Bing. N. C. 734 ; AVilson v. Coupland, 6 B. & Al. 228 ; Disborne v. Denabie, 1 Roll. Abr. 31, pi. 5 ; Starkley v. Mylne, ib. 32, pi. 13. ' M'Coubray v. Thomson, Irish R. 2 C. L. 226 (1868) ; Exchange Bank V. Rice, 107 Mass. 37 (1871). See ante, § 485, 552. CHAP. XVII.] CONSIDERATION MOVING FROM THIRD PERSONS. 527 son to sue directly on the contract, will only exist where a direct promise passes between them, or at least a recognition is made as between them of the promise.^ It has, indeed, been asserted, and doubtless correctly, that in the action for money had and received, a direct promise to the plaintiff need always not be shown ; and that if a debtor sliould send money to a third person, the general agent of his creditor, such third person would be accountable to the creditor for it, as money had and received to his use.^ And in the case referi-ed to it was held that the defendant, by receiving money from another for the plaintiff and promising so to pay it, and authorizing his promise to be communicated to the plaintiff, had made himself the plaintiff's agent in the matter ; and that thus the consid- eration of agency had arisen, which was sufficient to support the promise.^ § 575. It was formerly supposed that the near relation- ship of parent and child would be sufficient to enable the latter to sue upon a promise made to the former for the benefit of the child, without any actual promise to or consideration from the latter.* But the doctrine is not now received with favor, and it was recently held in England, that where two fathers mutually agreed in writing to each pay the son of one who had married the daughter of the other the sum of £200, such son • Price V. Easton, 4 B. & Ad. 434 ; Williams ». Everett, 14 East, 582 ; Barlow v. Browne, 16 M. &. W. 126; Cobb v. Becke, 6 Q. B. 930; Gib- son ». Minet, Ry. & Mood. 68 ; Wedlake v. Hurley, 1 Cr. &. J. 83 ; Baron V. Husband, 4 B. & Ad. 611. See Bigelow v. Davis, 16 Barb. 561 ; Jones V. Robinson, 1 Exch. 454 ; Thomas v. Thomas, 2 Q. B. 851 ; Gerhard v. Bates, 2 El. &. B. 476; 20 Eng. Law & Eq. 133; Davis v. Calloway, 30 Ind. 112 (1868). This subject was thoroughly considered by Mr. Justice Gray in Exchange Bank v. Rice, 107 Mass. 87 ; and certain unguarded expressions in some of the earlier cases were overruled. » Lilly V. Hays, 5 Ad. & El. 550; s. c. 1 Nev. & Per. 26. ^ This doubtless means that the defendant, by accepting the money and promising the plaintiff to pay it to him, thereby induced the plaintiff to change his position towards his original debtor, and to relinquish or relax his effort against him, which being an inconvenience raised a consideration. See ante, § 485, and note. * Bourne e. Mason, 1 Ventr. 6 ; Dutton v. Pool, lb. 318 ; Felton ti. Dickinson, 10 Mass. 287. 528 THE CONSIDERATION. [CHAP. XVIT. could not recover of his wife's father the £200, notwithstanding his near relationship to the party from whom the consideration moved.i INSUFFICIENT CONSIDERATIONS. § 576. We now come to the second division, namely, in- sufficient considerations. These we shall divide into the fol- lowing classes : 1st. Gratuitous ; 2d. Illegal and Impossible ; 3d. Moral ; 4th. Executed. GRATUITOUS PROMISES. § 577. Promises which are wholly gratuitous are void, for want of consideration ; for, however obligatory they may be in morals or in honor, inasmuch as they are not founded upon an injury or deprivation to the promisee, or a benefit to the promisor, they are not regarded by the law as legal and valuable considerations.^ Thus, a mere promise to pay the debt of a friend is not legally obligatory, and will not support an action.^ So a promise to pay for past services is not bind- 1 Tweddle v. Atkinson, 1 B, & S. 393 (1861). Wightman, J., there said: "Some of the old decisions appear to support the proposition that a stranger to the consideration of a contract may maintain an action upon it, if he stands in such a near relationship to the party from whom the con- sideration proceeds, that he may be considered a party to the consideration. The strongest of those cases is that cited in Bourne v. Mason, 1 Vent. 6, in which it was held that the daughter of a physician might maintain assumpsit upon a promise to her father to give her a sum of money if he performed a certain cure. But there is no modern case in which the propo- sition has been supported. On the contrary, it is now established that no stranger to the consideration can take advantage of a contract, although made for his benefit." See also Neubrecht v. Santmeyer, 50 111. 74 (1869) ; Exchange Bank v. Rice. 107 Mass. 37 (1871). See ante, § 485, ' Holliday v. Atkinson, 8 Dowl. & Ryl. 163; s. o. 5 B. & C. 501 ; Harris V. Watson, Peake, 72 ; Ne^vman v. Walters, 3 Bos. & Pul. 612 ; Wilkinson V. Byers, 1 Ad. & El. 109 ; 8. c. 3 Nev. & Man. 853 ; Mills i-. Wyman, 3 Pick. 211 ; Thorne ». Deas, 4 Johns. 84. 8 Reading Railroad v. Johnson, 7 Watts & Serg. 317. See James u. Williams, 5 B. & Ad. 1109. In some States a promise to pay the balance of a debt, which has been discharged by the creditor, by an accord and satis- faction, is not binding : Warren v. Whitney, 24 Me. 561 ; Phelps v. Dennett. CHAP. XVII.] GRATUITOUS PROMISES. 629 ing, unless they were rendered with the knowledge or request of the defendant, express or implied.^ And a promissory note, given by a father to a son, in consideration of affection only, is void.2 So if a wife promises to pay a person for a barn which he had built on her land by the order and on the credit of her husband, acting for himself, and not as agent for her, it is invalid for want of consideration.^ So, also, some cases hold that subscriptions to public works and charities cannot be col- lected, if they be merely gratuitous, and have not operated to induce engagements and liabilities, within the knowledge of the subscriber.* But where, on faith of a subscription, work has been performed, or liabilities assumed ; as, for instance, where a building is erected or begun, an action may be maintained against any subscriber who refuses or neglects to pay his sub- scription.' On an agreement of subscription to a certain medical 57 Me. 491 ; Stafford «. Bacon, 1 HQl, 532 ; in others the contrary is held . Trumball v. Tilton, 1 Fost. 129, reviewing the authorities. ' Sanderson v. Brown, 57 Me. 313 (1869) ; Alien v. Woodward, 2 Fost. 544 ; Wilson v. Edmonds, 4 Fost. 517 ; Bartholomew v. Jackson, 20 Johns. 28. 2 HoUiday ». Atkinson, 5 B. & C. 501 ; 8. c. 8 Dowl. & Ryl. 163. See also Dodge V. Adams, 19 Pick. 429. s Morse v. Mason, 103 Mass. 560 (1870). And see Chamberlin v. Whitford, 102 Mass. 448 (1869). * Boutell V. Cowdin, 9 Mass. 254; Phillips Limerick Academy v. Davis, 11 Mass. 113; Bridgewater Academy ». Gilbert, 2 Pick. 579; Stewart v. Hamilton College, 2 Denio, 403, and 1 Comst. 581. See Troy Academy v. Nelson, 24 Vt. 189 ; Barnes v. Ferine, 9 Barb. 202 ; Wilson ». Baptist Ed. Soc, 10 Barb. 309 ; Gait v. Swain, 9 Gratt. 633 ; Foxcroft Academy v. Favor, 4 Greenl. 382, and Bennett's note. It is now well settled that volun- tary subscriptions for educational, charitable, or other similar objects, are valid and binding in law ; and that the implied, if not expressed undertaking or duty of the promisee to faithfully appropriate the funds to the prescribed object is a sufficient consideration, if there were no other, for the promise of the subscriber. Ladies' Collegiate Institute v. French, 16 Gray, 196 ; Thompson v. Page, 1 Met. 565. The dicta to the contrary in some of the earlier Massachusetts cases are not now regarded as law. See Pitt v. Gruth, 49 Mo. 74 (1871), making a distinction between a public and purely private enterprise. ' Robertson v. March, 3 Scam. 198. See also Sperry v. Johnson, 11 Ohio, 452 ; Caul ». Gibson, 3 Barr, 416 ; Sandforth v. Halsey, 2 Denio, 235 ; Watkins v. Eames, 9 Cush. 537. See ante, § 570; Trustees, &o. v. Gar- 34 530 THE CONSIDERATION. [CHAP. XVII. institution " for the purpose of building a medical college for said institution," the last instalment to be paid " when the building shall be completed, the building to be such an one as is referred to in the plan and specification to be made by E. B.," no action lies for the last instalment, if the medical in- stitution, after the payment of the other instalments, and after occupying the building for three years as a medical college, but before its completion, convey it to an institution for the education of females, who complete it according to said plan and specification, but occupy it for their own purposes. -"^ But there must be a privity of contract between the plaintiffs who seek to enforce such subscription, and the defendant.^ And ordinarily it is only to his cosigners that a person is liable for his subscription. Yet if the subscribers call a meeting, and appoint a committee to carry out the object of the subscription, each subscriber having notice of such meeting and taking part in it or assenting to its action would be responsible to such committee for his subscribed share. ^ But if he had no notice of such meeting, he would not be liable.* So, also, similar vey, 53 111. 4(1 (1^70); McClure v. Wilson, 43 111. 356; but not going quite as far. as George v. Harris, -t N. H. 535 ; Johnston v. Wabash College, 2 Carter, 565 ; Lathrop v. Knapp, 27 Wis. 21-1 (1870). 1 Worcester Med. Inst. v. Bi^elow, 6 Gray, 498. See also North Eccle- siastical Society v. jMatson, 30 Conn. 26 (1869) ; Berkeley Divinity School V. Jarvis, 32 Conn. 412; McDonald v. Gray, 11 Iowa, 508; Wayne, &o., Institute v. Smith, 30 Barb. 576 ; Franklin College v. Hurlburt, 28 Ind. 844; Graff c. Pittsburg, &c.. Railroad Co., 31 Penn. St. 489. ^ Curry v. Rogers, 1 Fost. 247. In Farmington Academy v. Allen, 14 Mass. 17:^, Parker, C. J., says : " According to the decision in the case of The Trustees of Limerick Academy u. Davis [11 Mass. 113], cited in the present argument, this action cannot be supported upon the original prom- ise, of which the subscription paper is the evidence ; for it appears by that decision that a promise of this sort, made to no particular person, and having only a public benefit for its consideration, is no more binding in law than it is upon the consciences of men who are base enough to refuse to perform them. That case was well decided." But in the case from which the quotation is made, the subscriber, after the incorporation of the plaintiffs, had, upon request, furnished some material towards the construc- tion of the building ; and he was held liable on this ground for money laid out by them to his use on the completion of the building. ' See Mirick v. French, 2 Gray, 420. * Curry v. Rogers, 1 Fost. 255. In this case the court say: "A difB- CHAP. XVII.J GRATUITOUS PROMISES. 531 promises to individuals are Toid ; unless others are induced thereby to advance money or part with property, or to do culty arises here, which, upon the facts presented, cannot be obviated. There is no privity of contract between the parties to the suit, and nothing shown which can place them in the relation of debtor and creditor. If the defendant can be holden at all, in this action, it must be upon the general counts. The evidence cannot sustain the special count upon the subscription paper. The contract by that paper was with the cosigners, and not with the plaintiffs. That others signed the paper with him is a sufficient consideration to raise a promise to pay according to the special agreement ; and that consideration may be so transferred by the action of the defendant as to bind him to others for money paid. Unless some action were taken by the defendant, binding upon him, whereby he became obli- gated to others for the purposes of carrying out the designs of the subscribers to the paper, he could be holden to the subscribers only. This contract was with them ; not with others. This committee, the plaintiffs in this action, were appointed at a meeting of some of the subscribers. There is no provision in the paper for any such meeting ; but upon those who saw fit to attend it, and who took part in its proceedings, the appointment of the committee may be binding. It may be regarded as a subsequent arrange- ment and agreement among themselves, to abide by and carry out their doings. Upon such, the plaintiffs should have a good claim. They were, in fact, employed by them to proceed and erect the building ; and we can discover no good reason why they should not have a legal cause of action, upon a count for money paid, for all sums properly expended in furtherance of the object and designs of the donors. Upon those, also, who did not attend the meeting at which the plaintiffs were appointed, but who subse- quently assented to its doings, and agreed to the expenditure of the money by the committee, the plaintiffs should have a claim. Upon those, too, who recognized the proceedings of the plaintiffs, and ratified their doings, there may likewise be a cause of action. But this defendant stands not in the light of either. He was not notified to attend the meeting at which the plaintiffs were appointed. He neither attended that nor any other meet- ing ; nor did he consent to, or ratify its doings, or in any way recognize his liability thereafter. We can discover no privity of contract whatever be- tween him and the building committee. There were no dealings or transac- tions of any kind between them. His contract, if any, was with his cosigners. George v. Harris, i N. H. 633. And, upon the facts presented here, it is they alone who can maintain an action, if it can be maintained at all. " The cases cited in the argument are based upon a different state of facts, and do not sustain the plaintiffs in this suit. Homes v. Dana, 12 Mass. 190, was a subscription to a newspaper establishment; and the plaintiff's intestate, Larkin, was, by the express terms of the subscription, made the trustee to receive and appropriate the money. Trustees of Farmington Academy «. Allen, 14 Mass. 172, was a subscription to raise funds for the 532 THE CONSIDERATION. [CHAP. XVII. other acts to their own iBJury, and then they will be obligatory on the promisor, in order to avoid a fraud upon tliird persons. ^ This exception, however, does not apply to every gratuitous promise which has afforded an inducement to others to make similar promises, but only to those of persons who, relying upon the performance of such promise, have, in consequence thereof, contracted liabilities and engagements, or made ad- vances, which a breach of the original promise would enlarge or render more burdensome.^ Thus, the subscription of a establishment of an academy, ' payable to such persons as shall, or may be by the legislature appointed trustees.' The plaintiffs were subsequently made such trustees by the legislature, as was provided in the paper. Bryant V. Goodnow, 5 Pick. 228, was a subscription to establish a line of stages. The paper provided that there should be a meeting of the stockholders, for the purpose of making such arrangements, obligations, and officers, as might be necessary to carry into effect the objects proposed. A meeting was accordingly held, and the plaintiff, Bryant, chosen agent of the company, and authorized to expend money to purchase horses, coaches, and other necessary things connected with the business of the company. In each of these cases, there was something upon which to base either an express or implied promise from the defendants to the plaintiffs. In the first, Larkin was the person to whom the money was to be paid by the terms of the paper ; and in the second and third, the way was pointed out in the papers, by which the plaintiffs should become the payees of the subscribers. In the last case it is also indirectly held, that the defendant was entitled to notice of tlie meeting at which the agent was appointed ; and so far, that case is an authority for the defendant here ; for no notice whatever, of the meeting at which the plaintiffs were appointed, was ever brought home to this de- fendant. " The general principle, that in an action of assumpsit there must be either an express or an implied promise from one party to the other ; that there must be privity of contract of some kind between them, is believed to hold good in all instances. It is not sufficient that moneys are advanced, or services rendered for a party, to make him liable therefor. They must have been authorized, either expressly or impliedly, or must have been subse- quently sanctioned by hira. There must be something, out of which an undertaking can be raised ; some privity must exist between them. Rens- selaer Glass Factory v. Reid, 6 Cow. 603 ; Carter v. Gault, 13 Pick. 531 ; Butterfield v. Hartshorn, 7 N. H. 350." ' Homes p. Dana, 12 Mass. 190; Farmington Acad. v. Allen, 14 Mass. 172; Amherst Acad. v. Cowls, 6 Pick. 427; Cong. Soc. in Troy «. God- dard, 7 N. H. 435 ; University of Vermont v. Buell, 2 Vt. 48 ; Macon v. Sheppard, 2 Humph. 335 ; Ives v. Sterling, 6 Met. 310. ' 21 Am. Jur. 282. CHAP. XTII.J GBATUITOUS PROMISES. 633 particular person to a charity would not be obligatory, although it may have induced many subsequent subscriptions, because no injury is done to the other subscribers by a breach of pay- ment by one. Yet if the subscribers had not agreed to pay a definite sum, but only their proportion in order to raise a par- ticular sum for a specified object, and such sum liad been thereto applied, so tliat a non-payment by one would extend the liability of the others, the promise of each could be en- forced.i But a subscription to pay T. the sums subscribed, to be ' Phillips Limerick Acad. v. Davis, 11 Mass. 115 ; Bridgewater Acad. v. Gilbert, 2 Pick. 679; ante, § 193, 206; Crosbie v. M'Doual, 13 Ves. 157. In this case the Lord Chancellor said: "Various instances may be put of nudum pactum'at law. If one man says to another, he will give him £1000 to purchase a house, and actually pays part, that is a mere voluntary promise, nudum pactum, not the foundation of an action. But put the case of a declaration, stating a promise, in consideration that tlie plaintiff would agree for the purchase of a house ; and leaving her own residence, would go and reside in that house, and execute the conveyance ; and that the plaintiff did accordingly at the special instance of the defendant make the purchase ; change her residence ; and, that she had been obliged to pay the money under the contract ; and the defendant refused to perform his promise ; would that be nudum pactum, where one party does not merely pay, but does some act, like the consideration under the head of contract in the civil law, 'Facio ut facias''? Suppose, for instance. A., living in Jamaica, sends a cargo to B., resident in London, who is not to receive any benefit, but is to deliver it over to another person, and is directed to insure. B. may refuse to receive the cargo ; but if he consents to receive it, though it is for the benefit of the consignor, he is bound to make the insurance ; and many actions have been brought upon that principle. I am not prepared to say this case goes the whole length of that ; but it deserves consideration, whether a woman, having no desire to enter into this contract, no means of performing it, another person, not merely making a spontaneous promise, but causing her upon the faith of his promise to place herself in a situation insuring her ruin if he should not perform it ; and having executed part, which is a strong indication of the nature of the transaction, cannot in equity be compelled to execute the remainder, though the particular forms of law might not enable the plaintiff to reach it by an action. The question is, whether this is a case of that description, or mere nudum pactum, with a performance of part, giving no action for the remainder? " "The principle of law upon these actions is, that though upon a mere voluntary promise an action does not lie, yet, if one man binds himself to pay, and does pay money in consequence of an obligation undertaken by another, the one has money, which, in equity and conscience, ought to be the money of the other; and that is not nudum pactum." 534 THE- CONSIDEBATION. [CHAP. XVII. expended in repairing a certain road, creates no liability to pay a third person who makes such repairs, although T. assumes to assign the promises to him ; for there is no privity between the subscribers and the assignee of T.^ So, an agreement by a creditor to accept a certain percentage in full satisfaction of an overdue debt from the promisor, is void for want of considera- tion, although it be upon a condition that no other creditor should receive a greater percentage.^ § 678. So, also, merely gratuitous services will afford no consideration upon which to raise an implied promise to pay their worth.^ Thus, voluntary assistance in saving property from fire ; * or the payment of the debts of another without request ; ^ or voluntarily securing property found afloat in a river,^ or beasts found straying,'^ — will not be good ground for an action. And this is upon the plain ground stated by Eyre, C. J./ that " it is better for the public that these voluntary acts of benevolence from one man to another, ^\'hich are charities and moral duties, but not legal duties, should depend altogether for their reward upon the moral duty of gratitude." Another reason for this rule is to be found in the annoyance and ex- pense to which every one might be subjected, if he were ob- liged to pay for services which he does not need or require, and which may be in their nature officious, altliough well in- tended. So, at common law, as children are not bound to support their parents, a promise to pay for such support, already furnished, is not binding.^ ' Van Rensselaer v. Aikin, 44 N. Y. 126 (1870). ' Perkins v. Lockwood, 100 Mass. 249 (18G8). ' See Roscorla v. Thomas, 3 Q. B. 2:)4. * Bartholomew v. Jackson, 20 Johns. 28. * Jones u. Wilson, 3 Johns. 434 ; Menderback v. Hopkins, 8 Johns. 436 ; Beath v. Vandenburgh, 10 Johns. 361; Child v. Morley, 8 T. R. 610; Frear v. Hardenbergh, 5 Johns. 272. ' Nicholson v. Chapman, 2 H. Bl. 254. See Baker v. Hoag, 3 Barb. 203; 7 ib. 118. In the very recent case of Chase v. Corcoran, 106 Mass, 286 (1871), it was held that a promise is implied by law from the owner of a boat who claims and receives it of one who has found it adrift and brought it ashore, to pay him for the necessary expenses of preserving the boat while in his possession. ' Binstcad v. Buck, 2 W. Bl. 1117. ■I Nicholson V. Chapman, 2 H. Bl. 2r)4 ; Story on Bailm. § 169. » Stone V. Stone, 32 Conn. 142 (1864). CHAP. XVII.J GRATUITOUS PROMISES. 535 § 579. There is, however, an exception to this rule, which is allowed by the maritime law in cases of salvage, which is a compensation for actual services rendered in rescuing property from destruction by the perils of the sea or by pirates. This exception is founded in an enlarged and liberal policy, both to prompt the generous motives of humanity in cases which are greatly encompassed with danger, to overcome the natural re- luctance of fear, and to discourage the evil spirit of unright- eous gain and plunder, which, under the circumstances in which salvage is allowed, offers a temptation to acts which are easily concealed, and are wholly unjustifiable. Salvage, however, is not ordinarily allowed in cases where the services rendered are within the duty of the party rendering them. The amount of compensation is liberal, and in the nature of an honorary re- ward, and is determined by a court of admiralty in view of the circumstances of the case. The salvors have a lien therefor on the property saved. ^ § 580. So, also, where a party knowingly permits another to do certain work or labor for him, without interfering to pre- vent it, although such work may have been commenced with- out his order, yet an implied promise will be raised to pay for the value of such services, unless the circumstances of the case negative such a presumption.^ But, if a workman be employed to do a particular piece of work, and, without con- sulting his employer, he proceed to perform additional work, of which the employer has no knowledge, and to which he does not assent, the workman cannot recover therefor, — on the plain ground, that a man is not bound to pay for work which he did not authorize, and which he may not wish to have done,^ and of which, however beneficial it may be, he does not wish to bear the expense. § 581. Another exception to the general rule is to be found in the case of a mandate, which is a bailment in regard to which the mandatary or bailee agrees to do some act without recompense.* No party is bound to make such a gratuitous ' Abbott on Shipping, pt. 4, ch. 12 ; Bearse v. 840 Pigs of Copper, 1 Story, 314 ; The Ship Blaireau, 2 Cranch, 240. = Ante, § 11. ■> Hort V. Norton, 1 M'Cord, 22. ■• Story on Baihn. § 137. 536 THE CONSIDERATION. [CHAP. XVII. engagement, nor after making it, is he bound to execute it. But if he accept it, and in executing it he do it amiss, so that through his negligence or heedlessness any damage ensue to the other party, he is responsible therefor. A mandatary is not answerable for his omissions or non-feasance of his en- gagement, even though special damage result, but only for his misfeasance. 1 That is, he is not bound to begin to do it at all, but if he do begin, he must do it properly. Thus, where a party undertook, without reward, to carry several hogsheads of brandy from one cellar and deposit them in another, and he did it so negligently that one of the casks was staved, and the brandy lost ; it was held that he was answerable for the dam- age, because of his carelessness, although he was not a com- mon carrier, and performed the service gratuitously, but that he would not have been chargeable if the injury had been caused by the carelessness of some other person meeting him in the street.^ ILLEGAL AND IMPOSSIBLE CONSIDERATION. § 582. Every contract, the consideration to which is tainted with illegality or immorality,^ is void ; and as the considera- tion of a contract is twofold, moving from either party to the other, it follows, that every agreement to do an illegal act is invalid, the act being the consideration on one side.* A con- tract may be illegal, because it contravenes the principles of the common law, or tlie special requisitions of a statute. The former illegality exists whenever the consideration is founded upon a transaction which violates public policy or morality, — as a contract to commit, conceal, or compound a crime ; a contract for illicit cohabitation ; or a contract in fraud of the ' Story on Bailm. § 164 to 172 ; 2 Kent, Comm. 570, 671. ' Coggs V. Bernard, 2 Ld, Raym. 909, 919, 920 ; Elsee v. Gatward, 5 T. R. 143 ; Wilkinson v. Coverdale, 1 Esp. 75 ; Rutgers v. Lucet, 2 Johns. Cas. 92 ; Doct. and Stu. Dial. 2, ch. 24, p. 176. See also the case of Thorne v. Deas, 4 Johns. 84; Balfe v. West, 13 C. B. 466 ; 22 Eng. Law & Eq. 606. " Taylor v. Chester, Law R. 4 Q. B. 309 (1869). * 22 Am. Jur. 23; 2 Kent, Comm. 466. CHAP. XTII,] ILLEGAL AND IMPOSSIBLE CONSIDERATION. 537 rights and interests of third persons. The illegality created by statute exists when the act is either expressly prohibited, or when the prohibition is implied from tlie nature and objects of the statute.! § 583. Where a contract is founded upon two considerations, one of which is merely void, but not illegal, and the other is good, the contract will be bindi^ig, and entitle the party to dam- ages, to the extent of the good consideration ; provided, by its terms, it be susceptible of apportionment.^ Thus, where there was a verbal agreement to sell a certain farm, and dead stock, and growing wheat, at separate prices, it was held, that the contract was distinct as to each item, and although the agree- ment as to the land was void, because it did not comply with the requisitions of the statute of frauds, it being oral, yet, that the agreement as to the wheat and dead stock was bind- ing.^ If, however, the contract be an entirety, the partial failure of the consideration would wholly invalidate it.* But where the contract consists of but one consideration, which is illegal, or where a part of this consideration is illegal, the whole contract is void.^ So, where part of an entire agree- ' Stoiy on Bills of Exchange, § 186. The Roman and French law incul- cates the same general principles. Qtiod turpi ex causa promissum est, non valet. Inst. Lib. 3, tit. 20, § 2-1 ; Pothier on Oblig. n. 43 to 46. An agreement that all matters in dispute shall be submitted to arbi- tration, is not illegal, though ousting the courts of jurisdiction until the matters have been thus decided. Scott v. Avery, 5 H. L. C. 811 (1856). 2 Bliss V. Negus, 8 Mass. 51 ; Crisp v. Gamel, Cro. Jac. 128 ; Pikard v. Cottels, Yelv. 66 ; Com. Dig. Assumpsit, B. 13 ; Best v. Jolly, 1 Sid. 38 ; Cripps V. Gouldinge, 1 Roll. Abr. 30 ; Action sur Cas, Y. 2 ; Brett v. S., Cro. Eliz. 755 ; Hynds v. Hays, 25 Ind. 31 (1865) ; Treadwell v. Davis, 34 Cal. 601 (1868). 8 Mayfield «. Wadsley, 3 B. & C. 361 ; s. c. 6 Dowl. & Ryl. 228. See also Wood V. Benson, 2 Cr. & J. 94. 4 Roby V. West, 4 N. H. 285 ; Chater v. Beckett, 7 T. R. 201 ; Loomis ■V. Newhall, 15 Pick. 167; Crawford v. Morrell, 8 Johns. 253; Filson v. Himes, 5 Barr, 452 ; Hall v. Dyson, 17 Q. B. 785 ; 10 Eng. Law & Eq. 424 ; Howden v. Simpson, 10 Ad. & El. 793 ; Gamble v. Grimes, 2 Carter, 392. 8 Waite V. Jones, 1 Bing. N. C. 662 ; Featherston v. Hutchinson, Cro. Eliz. 199 ; Lewis v. Davison, 4 M. & W. 654 ; Stevens v. Webb, 7 C. «fe P. 60 ; Shackell v. Rosier, 2 Bing. N. C. 646 ; Scott v. Gillmore, 3 Taunt. 226 ; Bridge v. Cage, Cro. Jac. 103 ; Card v. Hope, 2 B. & C. 661 ; Jones v. 538 THE CONSIDERATION. [CHAP. XYII. ment must be in writing to be valid under the statute of frauds, a part of such agreement cannot be proved by parol. ^ So, also, as there is a consideration moving from each side in every contract, the same rule applies to an agreement to do two or more acts ; and in such case, if one be illegal, and the other be legal, the contract is void, but if one be merely void and in- sufficient, and the other be good^ the contract is valid.^ But if the agreement be to do an act, which may be effected either by lawful or unlawful means, the law will presume in favor of the contract that the parties contemplated the employment of legal means.^ § 584. If a contract grow immediately out of an immoral or illegal act, or be connected with it ; as, for instance, if it be to indemnify a person for an act known to be a trespass,* it is in- valid. But if it be wholly disconnected from the illegal act, and founded on a new and independent consideration, it may be enforced, though the illegal act was known to the party to whom the promise was made, and he was the contriver of it.^ Thus, if A. should become answerable for expenses on account of a prosecution for the illegal exportation of goods, or should advance money to defray the expenses, these acts would con- stitute a new contract, founded upon a new consideration, unless such an agreement were made prior to the illegal ex- portation, and formed a part of the consideration therefor.^ This proceeds upon the ground that the consideration of the new contract is not founded upon an illegality. Waite, 7 Scott, 317; s. c. 5 Bing. 2>r. C. 341 ; Deering v. Chapman, 22 Me. 488 ; Filson v. Himes, 5 Barr, 452 ; Carlton v. Bailey, 7 Foster, 230 ; Perkins V. Cummings, 2 Gray, 258 ; Gaitskill v. Greatlieatl, 1 Dowl. & Ryl. 359. ' Foquet V. Moore, 7 Exch. 870 ; 16 Eng. Law & Eq. 466, and Bennett's note; Vaughan v. Hancock, 3 C. B. 766. " Lewis V. Davison, 4 M. & W. 654 ; Stevens v. Webb, 7 C. & P. 60. ' Ibid. * Davis V. Arledge, 3 Hill (S. C), 170. ' Hodgson V. Temple, 5 Taunt. 181 ; Toler v. Armstrong, 4 Wash. C. C. 297 ; s. c. 11 Wheat. 258 ; Story, Confl. Laws, § 248, 240 ; Jones v. Ran- dall, 1 Cowp. 39 ; Bryan v. Lewis, Ry. & Mood. 386 ; Howell i-. Fountain, 3 Kelly, 176. See Hibblewhite v. M'Morine, 6 M. & W. 402, in which Bryan v. Lewis is overruled. « Armstrong v. Toler, 11 Wheat. 258 ; Story, Confl. Laws, § 250 ; Clugas V. Penaluna, 4 T. E. 466 ; Holman v. Johnson, 1 Cowp. 344, CHAP. XVII.] ILLEGAL AND IMPOSSIBLE CONSIDERATION. 539 § 585. Wliere the consideration is illegal, either party may take advantage of this circumstance to avoid his contract. For the law allows the guilty party to take advantage of the ille- gality of his own act, not with a view of conferring a benefit on him, but upon grounds of public policy.^ And an executed contract subsequently made, and inconsistent witli the illegal contract, is equivalent to a repudiation of it.^ This subject is intricately interwoven with the subject of Illegal Contracts, and the reader is referred to that title in the present treatise, for a more extended consideration of it. § 586. A contract founded upon an impossible consideration is void ; for the law will not compel a man to attempt to do that which is not within the limits of human capacity. Lex neminem oogit ad vana aut impossihilia? But he will not be excused if the intention of the parties can be substantially per- formed.* A consideration may be impossible either in fact or in law ; ^ that is, it may be impossible for the party physically to perform it, — as if he promise to go from Westminster to Rome in three hours ; or it may not be within his legal capa- city, as if he promise to discharge a party of a debt due to a third person, without the authority of such third person.* Thus, where a friend of a bankrupt promised to pay his as- signees all such sums as the bankrupt had received on a certain partnership account, and had not accounted for, in considera- tion that they would engage on their part to forbear and desist from taking an examination before the commissioners in refer- ence to such sums, and that the commissioners would also for- ' Holman v. Jolinson, 1 Cowp. 343 ; Maokey v. Brownfield, 13 S. & R. 241, 242 ; Griswold v. Waddington, 16 Johns. 486 ; Langton v. Hughes, 1 M. & S. 593 ; Josephs v. Pebrer, 3 B. & C. 639 ; 2 Kent, Comm. 467. •- Lafferty v. Jelley, 22 Ind. 471 (1864). ' 1 Powell on Cont. 160 to 164 (ed. 1790) ; ib. 178, 179. * White V. Mann, 26 Me. 361. ' Nerot V. Wallace, 3 T. R. 17. ^ Harvy w. Gibbons, 2 Lev. 161. This is a case where the defendant promised to repair the plaintiff's barge, in consideration that the plaintiff would discharge him from a debt of twenty pounds due to a third person ; and judgment for the plaintiff was reversed by the King's Bench, on the ground that the plaintiff could not discharge a debt due to another. See also Bates v. Cort, 2 B. & C. 474, 540 THE CONSIDERATION. [CHAP. XTII, bear and desist from such examination, the promise was held to be void, partly upon the ground that it was in violation of the legal duty of the commissioners and of the assignees, and partly upon the ground that it was not within the legal power of the assignees to prevent an examination by the commission- ers. Lord Kenyon, in that case, said : " The ground on which I found my judgment is this, — that every person, who, in con- sideration of some advantage either to himself or to another, promises a benefit, must have the power of conferring that, benefit up to the extent to which that benefit professes to go ; and that not only in fact, but in law." ^ § 587. This rule does not, however, extend to contracts founded upon difficult, improbable, or contingent considera- tions ; for it is the duty of the promisor well to weigh the dif- ficulty or improbability of his consideration, before he binds himself to perform it ; and the law will not help him to avoid duties which he has deliberately imposed upon himself, so long as they are per se possible.^ And even if a man contract to do something which is at the time impossible in fact, but not im- possible in its nature, he is liable in damages for a breach of contract for non-performance. Thus, it will be no excuse for the non-performance of an agreement to deliver goods of a certain quality, that they could not be obtained at the particu- lar season when the contract was to be executed.^ So, also, a covenant by a tenant to repair is binding, although the prem- 1 Nerot V. Wallace, 3 T. R. 17. It has been held to be no valid defence to an action upon a note given before the rebellion for the price of slaves, warranted to be slaves for life, that by the results of the war the slaves became free. Wilkinson v. Cook, H Miss. 367 (1870) ; Loggins v. Buck, 33 Tex. 113 (1870). ' Co. Litt. 206 a ; TufneU v. Constable, 3 Nev. & Per. 47 ; s. c. 7 Ad. & EI. 708; Izon v. Gorton, 5 Bing. N. C. 601 ; s. c. 7 Scott, 537; Stockwell V. Hunter, 11 Met. 418 ; Brecknock Co. v. Pritchard, 6 T. R. 750. See post, Landlord and Tenant ; Piatt on Cov. 569 ; Blight v. Page, 3 Bos. & Pul. 296, note; Worsley v. Wood, 6 T. R. 718, 719; Huliug ti. Craig, Addison, 342; 1 Powell on Cont. 160 to 164 (ed. 1790). ' Gilpins V. Consequa, Peters, C. C. 91 ; Youqua v. Nixon, Peters, C. C. 221 ; Fischel v. Scott, 15 C. B. 69 ; 28 Eng. Law & Eq. 404. See post, Defence, Performance. Paradiue v. Jane, Aleyn, 26 ; Atkinson v. Ritchie, 10 East, 533 ; Hadley v. Clarke, 8 T. R. 259 ; Beswick v. Swindells, 3 Ad. & El. 883 ; 2 Black. Comm. 340 ; Hall v. Wright, El. B. & E. 746 ; Taylor v. CaldweU, 3 B. & S. 826 (1863). CHAP. XVII.] ILLEGAL AND IMPOSSIBLE CONSIDERATION. 541 ises occupied by him be destroyed by fire. So, also, the sick- ness and consequent inability of a party to perform his contract is no excuse, because he should have guarded against such a contingency .1 But in a contract for the performance of manual labor, for a stipulated time, requiring health and strength, an actual inability to perform the labor, arising from sickness, at the commencement of the time, though not continuing through the whole time, will excuse performance.^ So, also, if a person undertake to deliver goods at a particular place, without limi- tation of his liability in case of loss or injury, and they be destroyed on the way, he is responsible for the loss.^ § 588. A man may by apt words bind himself that it shall rain to-morrow, or that he will pay damages.* A contract to do what is impossible in fact to be done, may nevertheless be binding.^ A contract to deliver to A. at a future day, in good working order, a steam saw-mill, situated on land conveyed to A., is not excused because the boiler accidentally explodes before that day, though without the fault of the obligor.^ So, if A. contracts to build, a house for another on the latter's land, and complete it ready for use and occupation, he is bound to do so, although, from a latent defect in the soil, the walls crack and settle, and it becomes dangerous and unfit for occu- pation before it is completed, and the owner is compelled to take it down and rebuild.'^ If a policy of insurance positively requires, as a condition precedent, that notice should be given of the calamity within seven days after its occurrence, the fact that instantaneous death makes it impossible to gire such notice furnishes no excuse.* But if a party by his own ' Alexander v. Smith, i Dev. 364. " Dickey v. Linscott, 20 Me. 453. ' Thomson v. Miles, 1 Esp. 184. See post, Bailments ; Story on Bailm. § 36 ; Paradine v. Jane, Aleyn, 26, 27. * Maule, J., in Canham v. Barry, 1.5 C. B. 619. ' Clifford V. Watts, Law R. 5 C. P. 577 (1870), commenting on Marquis of Bute V. Thompson, 13 M. & W. 487 ; Hills v. Sughrue, 15 M. & W. 253 ; Barker v. Hodgson, 3 M. & S. 267 ; Taylor v. Caldwell, 3 B. & S. 826. ■ « Wood V. Long, 28 Ind. 314. ' Dermott v. Jones, 2 Wall. 1 (1864) ; School Trustees v. Bennett, 3 Dutch. 515. And see Brumby v. Smith, 3 Ala. 123 ; Adams v. Nichols, 19 Pick. 275. • Gamble v. Accident Assurance Co., Irish R. 4 C. L. 204 (1869). 542 THE CONSIDERATION. [CHAP. XVII. act renders performance impossible on the part of the other, the latter is excused.' So, an impossibility arising from an act of the legislature subsequent to the contract discharges the contractor from liability.^ But the mere fact that perform- ance of a contract has been rendered more burdensome and expensive, but still not impossible, by a law enacted after it has been made, never excuses a party .^ Thus, if a vendor of slaves warrants that they are slaves for life, and the Constitution of the State subsequently emancipates all slaves, the vendee is still bound to pay the whole purchase-money.* Public agents do not bind their principals, if they act without authority, although within the general scope of their promise.^ In a late case in the Exchequer Chamber, it was held by four judges against three, that if a man, after making a contract to marry, became afflicted with a disease causing bleeding at the lungs, so that he became " incapable of marriage without great danger of his life, and therefore unfit for the married state," this was no excuse for refusing to marry, and he was held liable to an action.^ But a contract for personal service, like that of an apprenticeship, is released by the permanent illness or death of the apprentice ; although the covenant be absolute on the father's part that the covenants shall be performed." Tem- porary illness, it seems, of a servant employed for a term of years, does not justify the master in dismissing the servant, nor always suspend the right of the servant to recover wages during such temporary illness.^ § 589. Where, however, a contract, not impossible in its in- ception, afterwards becomes impossible to be performed, a court of equity will relieve against the performance, if no in- ' Malone v. Dookrill, Irish R. 3 C. L. 561 (1869). ' Baily V. De Crespigny, Law R. 4 Q. B. 186 (1869). = Baker v. Johnson, 42 N. Y. 126 (1870). " Haskill V. Sevier, 25 Ark. 152 (1867) ; Willis v. HaUiburton, 25 ib. 173; Jacoway v. Denton, 25 ib.,625 (1869). * Parsel v. Barnes, 25 Ark. 261 (1868). « Hall V. Wright, El. B. & E. 746 (1858). Interesting opinions are given on both sides of this question. ' Boast V. Firth, Law R. 4 C. P. 1 (1868). And see Taylor v. Caldwell, 3 B. & S. 826, distinguishing Hall v. Wright, El. B. & E. 746. » Cuckson V. Stones, 1 El. & El. 248 (1859). And see Harmer v. Cop- nehus, 6 C. B. (n. s.) 236. CHAP. XVII.] MORAL CONSIDERATION. 548 jury be thereby done to the party claiming' that it shall be per- formed ; and courts of equity will interfere to prevent the enforcement of contracts for the purpose of harassment and vexation.! But on the question of executing an agreement, hardship alone cannot be regarded as a suflicieut ground of relief, unless it amount to so great a degree of inconvenience and absurdity as to afford judicial proof that such an agree- ment could not have been intended by the parties.^ MORAL CONSIDERATION. § 590. A moral obligation alone is not a sufficient legal con- sideration to support either an express ^ or implied promise ; for the law, although it will not suffer any immorality, cannot undertake to enforce every promise which a man of strict honor and integrity would feel himself bound to fulfil. The performance, therefore, of many purely mOral obligations must be left to the good faith of the individual ; and it is neither within the province nor the policy of the law to apply a meta- physical standard of morality to the conduct of men in their common relations of life.* Thus, where one gave a deed of land, described as being " supposed to contain ninety-three acres," and upon admeasurement, it being found to be far smaller, the vendee promised to pay back a proportional part of the price, it was held, that as the terms of the contract indicated a willingness by both parties to take the risk of any mistake which there might be in the quantity, the promise was a mere nudum pactum.^ So, also, where a son who was of age was suddenly taken sick among strangers, and was relieved by the plaintiff, and thereupon the father wrote to the plaintiff promising to pay the expenses incurred, the promise was not considered sufficient to sustain an action, inasmuch as the » Smith V. Morris, 2 Bro. C. C. 314. = Prebble v. Boghurst, 1 Swanst. 309. ^ But see Mussersj. Ferguson, 55 Penn. St. 475 (1867). * See Eastwood v. Kenyon, 11 Ad. & El. 438; Gear u. Archer, 2 Barb. 424 ; Kaye v. Dutton, 7 Man. & Grang. 807 ; Jennings v. Brown, 9 M. &W. 601 ; Littlefield v. Shee, 2 B. & Ad. 811 ; Beaumont v. Reeve, 8 Q. B. 483. But see Kendall ». Kendall, 7 Greenl. 171. » Smith V. Ware, 13 Johns. 259. 544 THE CONSIDERATION. [CHAP. XVII. father was not liable for the son's debts after he came of age.^ So, also, a promise by a son to pay for necessaries furnished to ' Mills V. Wyman, 3 Pick. 207. In this case Chief Justice Parker clearly lays down the whole doctrine relating to moral consideration as follows : "General rules of law established for the protection and security of honest and fair-minded men, who may inconsiderately make promises without any equivalent, will sometimes screen men of a different character from engage- ments which they are bound inforo conscientiw to perform. This is a defect inherent in all human systems of legislation. The rule that a mere verbal promise, without any consideration, cannot be enforced by action, is universal in its application, and cannot be departed from to suit particular cases, in which a refusal to perform such a promise may be disgraceful. " The promise declared on in this case appears to have been made without any legal consideration. The kindness and services towards the sick son of the defendant were not bestowed at his request. The son was in no respect under the care of the defendant. He was twenty-five years old, and had long left his father's familj-. On his return from a foreign country, he fell sick among strangers, alld the plaintiff acted the part of the good Samaritan, giv- ing him shelter and comfort until he died. The defendant, his father, on being informed of this event, influenced by a transient feeling of gratitude, promises in writing to pay the plaintiff for the expenses he had incurred. But he has determined to break this promise, and is willing to have his case appear on record as a strong example of particular injustice sometimes neces- sarily resulting from the operation of general rules. " It is said a moral obligation is a sufficient consideration to support an ex- press promise ; and some authorities lay down the rule thus broadly ; but upon examination of the cases we are satisfied that the universality of the rule cannot be supported, and that there must have been some pre-existing obligation, which has become inoperative by positive law, to form a basis for an effective promise. The cases of debts barred by the statute of limitations, of debts incurred by infants, of debts of bankrupts, are generally put for illustration of the rule. Express promises founded on such pre-existing equitable obligations may be enforced ; there is a good consideration for them ; they merely remove an impediment created by law to the recovery of debts honestly due, but which public policy protects the debtors from being compelled to pay. In all these cases there was originally a quid pro quo ; and according to the principles of natural justice, the party receiving ought to pay ; but the legislature has said he shall not be coerced ; then comes the promise to pay the debt that is barred, the promise of the man to pay the debt of the infant, of the discharged bankrupt to restore to his creditor what by the law he had lost. In all these cases there is a moral obligation, founded upon an antecedent valuable con- sideration. These promises, therefore, have a sound legal basis. They are not promises to pay something for nothing ; not naked pacts ; but the voluntary revival or creation of obligation which before existed in natural law, but which had been dispensed with, not for the benefit of the party obliged solely, but CHAP. XTII.j MORAL CONSIDERATION. 645 a father, was held to be void for want of consideration.^ The promise of a partner selling out to his copartner to make up principally for the public convenience. If moral obligation, in its fullest sense, is a good substratum for an express promise, it is not easy to perceive why it is not equally good to support an implied promise. What a man ought to do, generally he ought to be made to do, whether he promise or refuse. But the law of society has left most of such obligations to the interior forum, as the tribunal of conscience has been aptly called. Is there not a moral obligation upon every son who has become affluent by means of the education and advantages bestowed, upon him by his father, to relieve that father from pecuniary embarrassment, to promote his comfort and happiness, and even to share with him his riches, if thereby he will be made happy ? And yet such a son may, with impunity, leave such a father in any degree of penury above that which will expose the community in which he dwells to the danger of being obliged to preserve him from absolute want. Is not a wealthy father under strong moral obligation to advance the interest of au obedient, well-disposed son, to furnish him with the means of acquiring and maintaining a becoming rank in life, to rescue him from the horrors of debt incurred by misfortune? Yet the law will uphold him in any degree of parsimony, short of that which would reduce his son to the necessity of seeking public charity. "Without doubt there are great interests of society which justify with- holding the coercive arm of the law from these duties of imperfect obliga- tion, as they are called ; imperfect, not because they are less binding upon the conscience than those which are called perfect, but because the wisdom of the social law does not impose sanctions upon them. " A dehberate promise, in writing, made freely and without any mistake, — one which may lead the party to whom it is made into contracts and ex- penses, — cannot be broken without a violation of moral duty. But if there was nothing paid or promised for it, the law, perhaps wisely, leaves the execution of it to the conscience of him who makes it. It is only when the party making the promise gains something, or he to whom it is made loses something, that the law gives the promise validity. And in the case of the promise of the adult to pay the debt of the infant, of the debtor discharged by the statute of limitations or bankruptcy, the principle is preserved by looking back to the origin of the transaction, where an equivalent is to be found. An exact equivalent is not required by the law ; for there being a consideration, the parties are left to estimate its value ; though here the courts of equity will step in to relieve from gross inadequacy between the consideration and the promise. " These principles are deduced from the general current of decided cases upon the subject, as well as from the known maxims of the common law . ' Cook V. Bradley, 7 Conn. 67. See also Prear v. Hardenbergh, 5 Johns, 272. See ante, § 134, 135, and 159, 160. TOL. 1. 85 546 THE CONSIDERATION. [CHAP. XVII. the amount of a loss to the copartner by reason of an honest mistake as to the state of the partnership accounts, is also a mere moral consideration, and will not support an action.' § 591. A qualification to this rule, however, obtains in cases where there was originally a sufficient valuable consideration upon which an action could have been sustained, but where, in consequence of some statute or positive rule growing out of general principles of public policy, the right of action is suspended, and the party is exempted from legal liability. In such cases the moral obligation is sufficient to support an express promise, though it will not raise an implied promise.^ The general position, that moral obligation is a suflBcient consideration for an express promise, is to be limited in its application to cases where, at some time or other, a good or valuable consideration has existed." Cook v. Bradley, 7 Conn. 57; Littlefield v. Shee, 2 B. & Ad. 811; Yelv. (Met- calf 's ed.) 4 a, note 1 ; Parker v. Carter, 4 Munf. 273 ; M'Pherson v. Rees, 2 Penn. 521 ; Pennington v. Gittings, 2 Gill & Johns. 208 ; Smith v. Ware, 13 Johns. 259; Edwards v. Davis, 16 Johns. 281, 283, note; Greeves v. M'AUister, 2 Binn. 591; Chandler v. Neale, 2 Hen. & Munf. 124; Fonbl. on Eq. by Laussatt, 278, note; 2 Kent, Comm. (2d ed.) 465. Contra, Glass V. Beach, 5 Vt. 172 ; Barlow v. Smith, 4 Vt. 144 ; Commissioners of the Canal Fund v. Perry, 5 Ohio, 58. See also Seago v. Deane, 4 Bing. 459 ; Wells V. Horton, 2 C. & P. 383 ; Davis v. Morgan, 6 DowL & Ryl. 42. "A legal obligation is always a sufficient consideration to support either an express or an implied promise ; such as an infant's debt for necessaries, or a liither's promise to pay for the support and education of his minor children. But when the child shall have attained to manhood, and shall have become his own agent in the world's business, the debts he incurs, whatever may be their nature, create no obligation [upon the father] ; and it seems to follow, that a promise founded upon such a debt has no legally binding force." • Eakln v. Fenton, 15 Ind. 59 (1860) ; Abey v. Bennett, 10 Ind. 478 (1858) ; Spahr v. Hollingshead, 8 Blackf. 415. ' In Geer v. Archer, 2 Barb. 424, the doctrine on this point is thus stated : " There is a class of cases where it has been said that a moral obli- gation is sufficient to support an express promise ; such, for instance, as the obligation to pay a debt barred by the statute of limitations, or an insol- vent's discharge, or to pay a debt contracted during infancy, or coverture, and the like. But a mere moral or conscientious obligation, unconnected with a prior legal or equitable claim, is not enough. The result of all the cases on this head is summed up in a note to 3 Bos. & Pul. 249, in these words': ' An express promise, therefore, as it should seem, can only revive a precedent good consideration, which might have been enforced at law, through the medium of an implied promise, had it not been suspended by CHAP. XVII.] MORAL CONSIDERATION. 547 Tliis exception includes all promises barred by the statute of limitations, or discharged by the bankrupt or insolvent law ; ^ and promises by an adult to pay debts contracted during his infancy ; ^ and promises by a drawer of a bill of exchange, or by an indorser of a bill or note, to pay it, although he may not have received such notice as would render him legally some positive rule of law ; but can give no original right of act'on, if the obligation on which it is founded never could have been enforced at law, though not barred by any legal maxim or statute provision.' The rule as thus stated received the emphatic approbation of Justice Spencer in the case of Smith V. Ware, 13 Johns. 257. The same doctrine is substantially asserted by Bronson, J., in Ehle v. Judson, 24 AVend. 97 ; and such I believe to be the settled rule. It forms a criterion at once safe, certain, and easy to be understood and applied. Testing the present case by that- rule, it is apparent that the promise cannot be upheld. The supposed obli- gation which is invoked for its support most clearly never could have been enforced in any tribunal known to our law. The case of Bentley v. Morse, 14: Johns. 468, cited by the plaintiff's counsel, was a ease of moral obliga- tion sufficient to support an express promise within the rule above referred to. There money had been paid and a receipt taken,, and afterwards the party to whom it was paid brought an action for the same money, and recov- ered, through the omission of the defendant to produce the receipt in evi- dence in his defence. A subsequent promise by the plaintiff in that action, that if the defendant had the receipt he would refund the money, was held to be valid, and supported by the moral obligation to pay the money. The court likened it to a case of a promise by an infant, to pay a debt contracted during his nonage, or of an Insolvent or bankrupt to pay a debt from which he Is discharged by his certificate. We hold that it is not in all cases necessary that the moral obligation, in order to be a good foundation for an express assumpsit, should be such as that, without the express promise, an action could once have been sustained upon it ; but that if it could have been made available in a defence, it is equally within the rule. The test is, could it have been enforced before it was barred by the legal maxim or statute pro- vision ? Upon this ground the case of Bentley v, Morse Is within the rule stated." See Nash v. Kussell, 5 Barb. 556 ; Mardls v. Tyler, 10 B. Monr. 382 ; Watkins v. Halstead, 2 Sandf. 311 ; Way v. Sperry, 6 Cush. 238 ; Turner v. Chrisman, 20 Ohio, 332 ; Warren v. Whitney, 24 Me. 561. ' Besford v. Saunders, 2 H. Bl. 116 ; Maxim v. Morse, 8 Mass. 127 ; Scouton V. Elslord, 7 Johns. 36 ; Erwin v. Saunders, 1 Cow. 249 ; Sliippey V. Henderson, 14 Johns. 178 ; Willing v. Peters, 12 S. & R. 177 ; Stafford r. Bacon, 25 Wend. 384 ; s. c. 2 Hill, 363. ' Barnes v. Hedley, 2 Taunt. 184; ante, § 116, 117, and cases cited. 548 THE CONSIDERATION. [CHAP. XVII. liable thereupon ; ^ and it is said, subsequent promises to pay for goods sold and delivered on Sunday.^ § 692. There is also an exception to the rule that a moral consideration is not sufficient to support a promise, which is admitted in the case of gi-atuitous bailees or trustees holding the goods or property of another. In such case, the law raises an implied promise, on the part of the trustee, to do all those acts which are requisite to a due performance of the trust, al- though it implies no agreement that he shall receive a com- pensation therefor. Yet, where his promise is purely voluntary, and founded upon motives of friendship or kindness, he would only be bound to exercise good faith and reasonable diligence in executing the trust, and would be responsible only for gross negligence.^ So, also, a gratuitous bailee of goods is bound to exercise a like degree of diligence, and will be responsible for a similar degree of negligence.* ' Hopes V. Aider, 6 East, 16, note ; Lundie v. Robertson, 7 East, 231, and note ; Haddock v. Bury cited in 7 East, 236. The case of Watson u. Turner, BuUer, N. P. 130, 281, would seem to settle a different doctrine. This was an action against the overseers of a parish for supplies furnished to a pauper, settled in the parish and boarding out of it, under an agreement made by the overseers and the plaintiff, and a subsequent promise made by them after the supplies were furnished to pay the bill ; the agreement was enforced upon the ground, "that overseers are under moral obligations to support the poor." The true reason, however, seems to be, that they were legally bound to supply paupers casually in the parish, and paupers settled there, but resident elsewhere, and under theu- charge. Simmons v. Wilmott, 3 Esp. 91 ; Lamb v. Bunce, 4 M. & S. 275 ; 21 Am. Jur. 258 ; Wing v. Mill, 1 B. & Al. 104. There was, also, a legal liability in the case of Suffield v. Bruce, 2 Stai-k. 175. See Lee v. JIuggeridge, 6 Taunt. 36, in which it was held, that a moral obligation is a sufficient consideration to support a subsequent promise. This doctrine is, however, abridged and modified in Littlefield v. Shee, 2 B. & Ad. 811 ; and denied in the case of Eastwood v. Kenyon, 11 Ad. & El. 438, Denman, C. J. See also Wennall v. Adney, 3 Bos. & Pul. 247, 249, note. But see Greeves v. M'Allister, 2 Binn. 691 ; Doty v. Wilson, 14 Johns. 381, which recognize the doctrine of the sufficiency of a moral consideration to support an express promise. The modern cases have, however, established the doctrine as stated in the text. See Mills v. Wyman, 3 Pick. 211, cited supra; Monkman v. Shepherdson, 11 Ad. & EL 415; Beaumont v. Reeve, 8 Q. B. 483; Jennings v. Brown, 9 M. & W. 501. 2 Melchoir v. McCarty, 31 Wis. 252 (1872). But see Pope v. Linn, 60 Me. 83 (1863). ' 2 Story Eq. Jur. § 1268. ■> Story on Baijm. § 173, 174. CHAP. XVII.] EXECUTED CONSIDERATIONS. 649 § 593. The ground upon which these exceptions are founded, IS, that these contracts being merely voidable and not void, in their inception, they may be revived by a subsequent promise, provided they were originally founded upon an express or im- plied request by the party benefited. But, where the promise is void, ah initio, it is not capable of ratification. Thus, where a married woman gave a promissory note, and after her hus- band's death, promised, in consideration of the forbearance of the payee, to pay it, it was held, that the note was absolutely void, and that forbearance, where there was no cause of action originally, is not a sufficient consideration to raise a promise.^ So, also, a bare promise by an adult to pay a bond given by him as surety during his infancy would not be on sufficient consideration, because the bond was void, and what is void in its inception cannot be made good by a ratification.^ So, also, where certain goods were supplied to a feme covert, living apart from her husband, and for which she, after his death, promised to pay, it was held, that the subsequent promise was void, because, the goods being supplied to her during the life of her husband, the price constituted a debt due from him,^ and not from her. EXECUTED CONSIDERATIONS. § 594. A consideration, in regard to the time when it oper- ates, is either, 1st. Executed, or something already performed before the making of the defendant's promise ; 2d. Executory, or sometliing to be done after the promise ; 3d. Concurrent, as in the case of mutual promises ; or, 4th. Continuing. § 595. These last classes, namely, Executory, Concurrent, and Continuing Considerations, are sufficient to support a con- tract, not void from other reasons ; but it has been said that an ' Lord V. Lee, 1 Str. 94; Watkins v. Halstead, 2 Sandf. 311. But see Vance J. Wells, 8 Ala. 399. " Ante, § 76 ; Keane v. Boycott, 2 H. Bl. 511 ; Tucker v. Moreland, 10 Peters, 69. = Littlefield v. Shee, 2 B. & Ad. 811 ; Meyer v. Haworth, 8 Ad. & El. 467. QufEre, whether this would be so if the husband was not bound, as in case personal credit was given to a wife who had a separate fortune ? Lee V. Muggeridge, 5 Taunt. 36. 550 THE CONSIDERATION. [CHAP. XTII. executed consideration will not support a promise, unless it be executed at the request of the promisor. ^ This, however, is not a principle of law, but a rule of pleading, and amounts to nothing more than an affirmation that in assumpsit upon a contract, founded upon a consideration which is executed or past, the declaration must allege that the consideration was executed at the request of the promisor, or otherwise it will not appear that it was not officious, and without his consent or knowledge. § 596. The difficulty in which this subject is involved, and the apparent injustice and absurdity of some of the deci- sions, arise chiefly from a want of discrimination between the law and the pleadings. The decision of the court in many of the cases, which apparently affirms the principle of law, was by no means a decision upon the merits of the case, but merely upon a question of pleading ; and its seeming absurdity is the result of a defective declaration. Thus, in the case of Hunt V. Bate,^ which was the authority upon which many of the earlier cases were decided, the declaration averred that the de- fendant promised to save the plaintiff harmless, in considera- tion that he had become bail for the defendant's servant, and judgment was arrested, in consequence of the defect in the pleadings. On the next page, however, of the same book, an anonymous case is reported, in which a promise to pay £20, " in consideration that the plaintiff, at the special instance of ' Osborne i). Rogers, 1 Saund. 264, Williams's note, 1 ; Doct. and Student, 181; 1 lloll. Abr. 11; Bac. Abr. Assumpsit, D. ; Lampleigli v. Brathwait, Hob. 105 6; s. c. 1 Smith, Leading Cast-s, 67, and the learned note of the editor, p. 69 to 76, 2d ed. ; 1 Powell on (_'ont. 348 ; 22 Am. Jur. 1 ; 1 Lill. Abr. 29'J; Child v. Morley, ST. R. 610; Stokes v. Lewis, 1 T. R. 20; Naish V. Tatlock, 2 H. Bl. 319; Richardson c. Hall, 1 Br. & B. 50; Durn- ford V. Messiter, 5 M. & S. 446 ; 1 Dane, Abr. 119 ; 1 Selw. N. P. 48, 1st ed. ; Hayes v. Warren, 2 Str. 9.j3. If the consideration be executory, it is not perhaps absolutely indispensable to state it to be at the request of the promisor, lor ex itrcessltnte it seems implied. See Fisher u. Pyne, 1 Man. & Grang. 26.5, and the reporter's note h ; 1 Smith, Leading Cases, 66 to 68, and the learned note of the editor, p. 69 to 76, 2d ed. But see Com. Big. Pleader, C. 70 ; Tripps v. Rand, 2 Lev. 198. If services be rendered under a r.^ntrart with a third person, not the servant or agent of the defend- ant, though for the defendant's benefit, the defendant will not be liable without a promise. Indianapolis Railway Co. v. O'Reilly, 38 Ind. 140 (1871). ' Dyer, 272 o. CHAP. XTII.j EXECUTED CONSIDERATIONS. 551 the defendant, had taken to wife the cousin of the defendant," was enforced at law, although the marriage was executed and past before the undertaking and promise. So, also, an affida- vit of deljt for money lent and work and labor done, was held to be insufficient, because it did not state that it was " at the instance and request of defendant." The court said : ^ " Money paid to and for the use of the defendant does not necessarily raise a cause of action ; because a man cannot, of his own will, pay another man's debt without his consent, and thereby convert himself into a creditor. So the goods may, consist- ently with this affidavit, have been sold and delivered to a third person for the defendant's use, without his being acquainted with the transaction ; and if so, he cannot be charged with them. An- affidavit which is to operate in restraint of the lib- erty of a party, ought to use unequivocal language." So, also, where the declaration alleged that the defendant promised to pay the plaintiff £3, in consideration that the plaintiff had de- livered him twenty sheep, it was held that, as the declaration alleged a past consideration, it was not sufficient ; for it did not appear that the sheep were not delivered as a gift, in which case there would have been no foundation for a promise to pay therefor.2 It is impossible to suppose that this decision could be on the merits of the case, since, if the delivery were a mere bailment, the promise would have turned it into a sale. Again, where the declaration stated a promise to repay money which had been lent, it was held to be insufficient " for this cause only, that the moneys in the last promise were not said to be lent at the defendant's request, for it may be lent to his use contrary to his desire." ^ It is one of the elementary principles of pleading, in the action of assumpsit, that a valid consideration should be alleged as a foundation for the promise which the plaintiff would enforce, whether the consideration would, as a matter of fact, be implied or not. That considera- tion is the request of the plaintiff; and though it might be in- ' Durnford v. Messiter, 5 M. & S. 445. ' Jeremy v. Goochman, Cro. Eliz. 442. ' Oliverson v. Wood, 3 Lev. 366. See also Hayes v. Warren, 2 Bar- nardiston, 141 ; s. C. 2 Str. 933 ; Comstock v. Smith, 7 Johns. 87 ; Parker V. Crane, 6 Wend. 649 ; Leland v. Douglass, 1 Wend. 492 ; Balcom ». Craggin, 5 Pick. 295 ; Stanhop's Case, Clayton, 65 ; Hunt v. Bate, Dyer, 272. 552 THE CONSIDERATION. [CHAP. XVII. ferred as a fact by the jury, or by the law, yet an omission to state it in the declaration would, in special pleading, be a fatal defect, preventing a decision upon the merits, yet carrying to the mind of a careless reader the full effect of such a decision. This rule will explain many, if not all, of the old cases, and seems only to be founded in justice ; for, unless a request be stated, it does not necessarily appear on the face of a declara- tion that the service rendered was beneficial, or was not gratu- itous, and perhaps obtrusive ; and in either of these alternatives there is no ground for the claim of the plaintiff, without an ex- press request. But if the promise be " coupled to the consid- eration by the request," it becomes more than a naked promise. The result may be stated, therefore, to be, that where the con- sideration is past, the declaration should state that it was executed at the request of the party sought to be charged, and then, if there be no vital objection on the merits, the party may recover.! § 597. The next question which arises, is as to the necessity of actually proving the previous request of the promisor. And in this respect the rule seems to be, that if the consideration be one which does not raise an implied promise in law, the previ- ous request must be actually proved, as well as declared.^ If ' 1 Saund. 264, Williams's note, 1; 3 Salk. 96; 1 Powell on Cont. 351, 352 (edit. 1790) ; Sydenham v. Worlington, Godb. 31 ; s. c. Cro. Eliz. 42 ; 2 Leon. 224; Hardrcs v. Prowd, Style, 465; Larapleigh v. Braithwait, 1 Brownl. 7 ; s. c. Moore, 866 ; Hob. 105 ; Bosden v. Tbinn, Cro. Jac. 18; s. c. Yelv. 40; Townsend v. Hunt, Cro. Car. 408 ; Corastock v. Smith, 7 Johns. 87 ; Livingston v. Rogers, 1 Caines, 584. See Bulkley v. Landon, 3 Conn. 76 ; 1 Powell on Cont. 351, 352 (edit. 1790) ; 1 Fonbl. Eq. B. 1, ch. 5, § S, note a, 6th od. ; Com. Dig. Action on the Case, Assumpsit (B. 12) ; Seago V. Deane, 4 Bing. 459 ; Pawle r. Guan, 4 Bing. N. C. 448 ; 1 Smith, Lead. Cas. 66, and the learned note of the eilitor, p. 69 to 76, 2d ed. ; Mills V. Wyraan, 3 Pick. 207 ; Bell v. Morrison, 1 Peters, 373 ; Lonsdale v. Brown, 4 Wash. C. C. 148 ; Cook v. Bradley, 7 Conn. 57 ; Exeter Bank v. Sullivan, 6 K. H. 136; Levy v. Cadet, 17 S. & R. 126; Searight v. Craighead, 1 Penn. 135. A promise made upon a past consideration is binding, even without request, if the consideration moves directly from the promisee to the promisor, and inures to the latter's benefit. Boothe v. Fitzpatrick, 36 Vt. 681 (1864). ' Kaye v. Button, 7 Man. & Grang. 807; Victors v. Davies, 12 M. & W. 758. See also Mr. Sergeant Maiming's note to Fisher v. Pyne, 1 Man. & Grang. 265 ; Hopkins v. Logan, 6 M. & W. 241. CHAP. XVII.] EXECUTED CONSIDERATIONS. 553 it be proved, it matters not whether the execution of it have or have not actually turned out to be beneficial to the promisor.^ § 598. In what cases, then, is a promise implied by law, so as to render it unnecessary to prove such request ? In the first place, a promise is implied whenever the consideration is bene- ficial to the party subject to be charged, and is actually adopted or taken advantage of by him.^ For, in such a case, the per- son executing the consideration becomes the accredited agent of the promisor, by the fact that the latter adopts his act ; ac- cording to the maxim, Omnis ratihahitio retrotrahitur et man- dato equiparatur. If, however, the person sought to be charged refuse to adopt or take advantage of the consideration, when ' Ibid. ; Kaye v. Dutton, 7 Man. & Grang. 807. ' 1 Fonbl. Eq. B. 1, ch. 5, § 1, note a, 5th ed. ; 1 Saund. 264, Williams's note ; Oatfield v. Waring, 14 Johns. 192 ; Hicks v. Burhans, 10 Johns. 243 ; Doty K. Wilson, 14 Johns. 878 ; Lonsdale v. Brown, 4 Wash. C. C. 148 ; Mills V. Wyman, 3 Pick. 207 ; Cook v. Bradley, 7 Conn. 67 ; Exeter Bank V. Sullivan, 6 N. H. 136 ; Bell v. Morrison, 1 Peters, 371 ; Levy v. Cadet, 17 S. & R. 126 ; Searight v. Craighead, 1 Penn. 13.5 ; Lawes, PI. in As- sumpsit, 435 ; Greeves v. M'AUister, 2 Binn. 592 ; Pillans v. Van Mierop, 8 Burr. 1671 ; Fisher ». Pyne, 1 Man. & Grang. 265, note h ; 1 Smith, Lead. Cas. 67, 68, and the editor's learned note, p. 69 to 76, 2d ed. In eases of indehitatv^ assumpsit for goods sold and delivered , or for labor and services performed, or for money lent, it is the common practice to declare that the goods were sold and delivered, or the labor and services were performed, or the money lent, at the request of the defendant ; and this allegation has usually been considered necessary. But the learned reporters, in note 6 to the case of Fisher v. Pyne, 1 Man. & Grang. 265, have expressed a decided opinion that it is not necessary, and that the existence of the debt, as a debt, is sufficient to found the right of action, whether it originally came from either the plaintiff or defendant. They insist that the note of Sergeant Williams to Osborne v. Rogers, 1 Saund. 264, which countenances the sug- gestion that a request must be alleged, is founded upon a mistake of that case, which was one of an executory contract, where it was said that no such precedent request need be stated. See Com. Dig. Pleader (C. 70). In- deed, it would seem, from the note to Fisher v. Pyne, that even if the consideration were past, it would be unnecessary to allege a request, if the act stated in the consideration cannot, from its nature, have been a gratuitous kindness, but imports a consideration per se, it being immaterial to the right of action whether the bargain, if actually concluded and executed, or the loan, if made and the money actually advanced, was proposed and urged by one party or the other. See also Mouutford v. Horton, 2 Bos. & Pul. N. R. 62. But see Hayter v. Moat, 2 M. & W. 56. See Victors v. Davies, 12 M. & W. 758, in which it is decided that no request need be averred. 554 THE CONSIDERATION. [CHAP. XVII. performed, a promise on his part -would not be implied, since he is not bound to indemnify persons for acts done without his consent or wish, however beneficial such acts may be, unless he takes advantage of them, and refuses to ratify them.^ Exam- ples of this rule are to be found in cases where a husband per- mits his wife to receive goods which he did not authorize her to buy, and for which he knows his own credit has been jjledged ; and to cases where an infant retains a lease after he arrives at full age, without objecting.^ So, also, where A. purchases goods for B., and B. receives them and uses them without objection, knowing that they are not a gift, a promise would be implied on his part to pay for them ; and no previous request need be proved. 3 § 599. In the next place, where one man is compelled to pay money which another is bound by law to pay, a promise by the latter is raised by law to reimburse the person paying.* But in these cases the plaintiff must prove that the payment was made by compulsion of law, for the benefit of the defendant ; or, in other words, that it was a case where the party to whom the money was paid had a legal claim for the payment, although he was not the party justly liable therefor. To do this, he must show such a contract as the law will enforce.^ Thus, for ex- ample, where there are cosureties, any one of them who is compelled to pay may recover of his cosureties their propor- tion.6 § 600. But wherever the law does not raise an implied promise on these grounds to pay, a previous request must be jjroved in order to sustain an action ; for no express promise, made upon a past consideration, can be enforced, differing ' Ibid. " Ante, § 117 and cases cited. " The Fishmongers' Co. v. Robertson, 5 Man. & Grang. 192 ; Law v. Willcin, 6 Ad. & El. 718. ' Povvnal u. Ferrand, 6 B. & C. 439 ; Child v. Morlev, 8 T. R. 610; Exall V. Partridge, 8 T. R. 308 ; Jenkins v. Tucker, 1 H. Bl. 90 ; Sargent V. Currier, 49 N. H. 310 (1870). ^ Pawle V. Gunn, 4 Bing. N. C. 448, per Tindal, C. J. ; Spencer v. Parry, 3 Ad. & El. 338 ; Dawson v. Linton, 6 B. & Al. 521 ; Brown v. Hodgson, 4 Taunt. 189. See ante, § 15, 16. ' Davies v. Humphreys, 6 M. & W. 153 ; Pitt v. Pursord, 8 M. & W. 638. CHAP. XVII.J CONTINUING CONSIDERATIONS. 555 from that which would be implied by law.^ And this rule ob- tains, not because the consideration is executed, but because, unless it be beneficial to the promisor, and adopted by him, or create a legal liability on his part, it would be merely a moral consideration, which, as we have seen, is not sufficient alone to support a promise.2 The rule, therefore, is, not that an exe- cuted consideration will not support a contract, for although it be executed, the law will imply a promise wherever it does not appear to be merely moral ; but that a prior request Kshould be alleged.^ § 601. If the consideration be " executed in part only," it is called a " coyitinuing consideration."^ The rule applicable to the pleadings upon continuing considerations differs from that ' Roscoria v. Thomas, 3 Q. B. 234. This was an action for the breach of the warranty of a horse. The declaration alleged that, in consideration that the plaintiff, at the request of the defendant, had bought of him a horse for £30, the defendant promised that he was sound and free from vice. It was objected, in arrest of judgment, that the executed consideration would not support the subsequent express promise that the horse was sound. The court held, after advisement, that " the promise in the present case must be taken to be, as in fact it was, express : and the question is, whether that fact will warrant the extension of the promise beyond that which would be implied by law ; and whether the consideration, though insufficient to raise an implied promise, will nevertheless support an express one. And we think that it will not. The cases in which it has been held that, under certain circumstances, a consideration insufficient to raise an implied promise, will nevertheless support an express one, will be found collected and re- viewed in the note to Wennall v. Adney, 3 Bos. & Pul. 249, and in the case of Eastwood v. Kenyon, 11 Ad. & El. 438. They are cases of voidable contracts subsequently ratified, of debts barred by operation of law, sub- sequently revived, and of equitable and moral obligations, which, but for some rule of law, would of themselves have been sufficient to raise an im- plied promise. All these cases are distinguishable from, and indeed inapplicable to, the present, which appears to us to fall within the general rule, that a consideration past and executed will support no other promise than such as would be implied by law." Jackson v. Cobbin, 8 M. & W. 790; Brown v. Crump, 6 Taunt. 800; Granger v. Collins, 6 M. & W. 458; Hopkins v. Logan, 5 M. & W. 241 ; Victors v. Davies, 12 M. & W. 758 ; Lattimore v. Garrard, 1 Exeh. 809. * Jennings ». Brown, '9 M. & W. 501 ; Eastwood v. Kenyon, 11 Ad. & El. 438 ; Monkman v. Shepherdson, 11 Ad. & El. 415. => See Albany City Ins. Co. v. Whitney, 70 Penn. St. 248 (1871). * Com. Dig. Action on the Case, Assumpsit (B. 12) ; 1 Powell on Cont. 349 (ed. 1790) ; Loomis v. Newhall, 15 Pick. 169 ; Andrews v. Ives, 3 Conn. ' 863. 656 THE CONSIDERATION. [CHAP. XVII. which prevails in the pleadings upon executed considerations. And although, if the consideration appear to be wholly executed and past, a precedent request is indispensable to support the declaration ; yet if the consideration appear, on the face of the declaration, to be a continuing consideration, it is substantially good, although no precedent request be averred. Although the consideration move from a third person, yet if it be a continu- ing consideration, it will be sufficient to support a promise made to the person for whose benefit the consideration moved. Thus, if A. deliver money to B. for the use of C, and B. after- wards promise C. to pay it, the promise is binding.' § 602. The following are examples of continuing considera- tions: Where the plaintiff declared, that the defendant married a maid, who sojourned in tlie plaintiff's house, and did " then desire the plaintiff, that his wife might still continue in the house a year longer, to which the plaintiff agreed ; and after- wards, about the middle of the year, the defendant promised, in consideration that the plaintiff would suffer the wife to con- tinue in the house for the whole of the year, he would pay the plaintiff for the whole year, as well the past as the future," — this was held to be a good consideration.^ So, also, a promise, in consideration that the lessee then in possession, under an unexpired lease, had paid his rent well, to save him harmless, during the whole term, past as well as future, was held to be binding, on the ground that " prompt payment of the rent is a continuing consideration, when he (the tenant) remains in possession."^ So, where a father promised A. to pay him a certain sum of money if A. would marry his daughter, at his (the father's) request, and there was no agreement as to the ' Lilly V. Hays, 5 Ad. & El. 548 ; Williams v. Everett, 14 East, 682 ; Com. Dig. Action on the Case, Assumpsit (B. 15) ; 2 Story, Eq. Jur. § 1041. 2 Cotton V. Wescott, 3 Bulst. 187 ; s. c. 1 Rolle, 381. See also Meni- ■wetlx-rVs Case, Clayt. 43; 1 Lill. Abr. 114; Bae. Abr. Assumpsit (D.) ; 1 Powell on Cont. 349, et seq. (ed. 1790) ; Warcop u. Morse, Cro. Eliz. 138; Loomis V. Newhall, 15 Pick. 159 ; Powley v. Walker, 5 T. R. 373 ; Adams v. Danscy, 6 Bing. 506. ' Pearle v. linger, Cro. Eliz. 94. See also Jones v. Clarke, 2 Bulst. 73; Com. Dig. Action on tbe Case, Assumpsit (B. 12) ; 1 Powell on Cont. 850 (ed. 1790). CHAP. XTII.] CONTINUING CONSIDERATIONS. 657 time when the money should be paid ; it was held to be a sufficient continuing consideration for a promise to pay it, made after the marriage, although the plaintiff married the daughter without the consent and knowledge of the father.^ In fact, marriage is always considered as a continuing consid- eration, and a promise made in consideration thereof is valid, and can be enforced, although it be made after marriage.^ § 603. The same rule applies to the common case of a promise in respect to an existing debt, or legal liability, still binding upon the party promising, provided that the promise be such as the law will imply .^ But if the promise exceed or differ from the promise implied by law, it would in such a case be void. Thus, an existing debt is a sufficient consideration for a promise by the debtor to pay it in prcesenti, or upon de- mand ; but it will not support a promise to pay it at a future fixed time.* But if there is a running account with items on both sides, and a balance is struck in favor of one party, this acts as a new consideration sufficient to take it out of the stat- ute of limitations, and would seem a sufficient consideration for a promise to pay at a future day.^ § 604. If the consideration be executory, it is not indispen- sable to aver a precedent request, because it would be neces- sarily implied ; ^ but a performance by the plaintiff must be ' Marsh v. Kavenford, Cro. Eliz. 59 ; s. c. 2 Leon. Ill ; Sandhill v. Jenny, Dyer, 272 6 ; 3 Salk. 96 ; Townseud ». Hunt, Cro. Car. 408. But qusere, whether, if there had been no promise before the marriage, the promise after the marriage, which is alleged to have been at the request of the father, would be good. The authorities on this point are contradictory. In Marsh V. Kavenford, it is held to be good, upon the ground that the natural affection of the father doth continue, and her advancement is a sufficient cause. This doctrine is affirmed in OHverson v. Wood, 3 Lev. 366. But Sandhill v. Jenny, Dyer, 272 6, maintains the contrary doctrine. See Com. Dig. Action on the Case, Assumpsit (B. 12), and 1 Powell on Cont. 360 (ed. 1790) ; Sydenham v. Worlington, Godb. 31 ; 2 Leon. 224. = Barker v. Halifax, Cro. Eliz. 741 ; Oliverson v. Wood, 3 Lev. 366. ' Hodge B. Vavisor, 1 RoUe, 414. See Lee v. Maddox, 1 Leon. 168 ; Russell V. Buck, 11 Vt. 166 ; Roscorla v. Thomas, 2 Gale & D. 308 ; s. c. 3 Q. B. 234. * Hopkins v. Logan, 5 M. & W. 247. See also Roscorla v. Thomas, 2 Gale & D. 508 ; s. c. 3 Q. B. 234. » Ashby V. James, 11 M. & W. 542. • See Fisher v. Pyne, 1 Man. & Grang. 265, note 6 by the reporters ; 1 558 THE COXSIDERATION. [CHAP. XVII. alleged, and then a special request to the defendant to pay ; although in many cases the general conclusion, licet scepe re- qucesitus, will be sufficient.^ TOTAL OR PARTIAL FAILURE OP CONSIDERATION. § 605. We shall now consider the effect of a total or partial failure of consideration. Where the consideration of a con- tract totally fails, that is, when that which was supposed to be a consideration turns out to be none, the contract, as far as the immediate parties are concerned, may be avoided, and the same rule applies as if there never had been any consideration. Thus, if a lease should be made of a house, and it should turn out to be burned at the time, as the consideration would to- tally fail, no contract would arise.^ Again, where the title to goods sold totally fails, the contract would not be binding, and may be rescinded, even though the possession of the vendee be wholly undisturbed.^ So, also, where goods are sold under the warranty that they are of a particular kind or quality, or adapted to a particular use, and they turn out to be utterly valueless, and not to answer the description, the contract is at an end, and they need not even be returned.* But they must be utterly valueless to both parties ; if they be of any value to the vendor, or if their loss would be any injury to him, they must be returned.^ So, also, where a note has been given, a total failure of consideration is a sufficient defence to a suit brought Smith, Lead. Cas. 67, and the learned note of the editor, p. 69 to 76, 2d ed. ; Com. Dig. Pleader (C. 69), (C. 70) ; Com. Dig. Action on the Case, As- sumpsit (B. 12). ' Com. Dig. Pleader (C. 70) to (C. 75) ; Chitty on Plead. 322, 323, 324 (3d London ed. 1817). ' Farrer v. Nightingal, 2 Esp. 639; Graham v. Oliver, 3 Beav. 124; Waddington v. Oliver, 2 Bos. & Pul. N. R. 61; Couturier v. Hastie, 5 H. L. C. 673 (1856). 2 2 Kent, Comm. lect. 39, p. 46-9 ; 1 Story, Eq. Jur. § 779 ; Paton v. Rogers, 1 Ves. & B. 351; Graham v. Oliver, 3 Beav. 124; Hill v. Buckley, 17 Ves. 394. * Poulton V. Lattimore, 9 B. & C. 259 ; Story on Sales, § 408, 458. ' Perley v. Balch, 23 Pick. 283. CHAP. XTIT.] TOTAL OR PARTIAL FAILURE OP CONSIDERATION. 559 between the immediate parties to enforce payment ; ^ but not as to third persons holding bond fide, for value received, before it became due.^ § 606. Where the consideration only partially fails, it will not afford a ground to rescind the contract utterly, unless it be an entire contract, or unless the failure be in so material a point that, had it been known, the bargain would not have beeii made.^ If the contract were entire, a partial failure would be equivalent to a total failure, unless a partial performance were accepted without objection, in which case an agreement would be implied to render it severable, and the party would only be bound proportionally to the part performed.* If the failure be in respect to a material point touching the essence of the con- sideration, it would also afford a good ground in equity to set aside the contract ; or if the party to whom the consideration moves should choose to insist on the partial performance, he could reduce the consideration on his part proportionally.^ Thus, if a certain number or quantity of goods be sold, and the seller can only give a valid title to a part, or can only de- liver a part, the remainder being burned while at his risk, the buyer is only bound to pay for the part received, and if the purchase-money be paid, he may recover proportionably to the deficiency.^ But where a contract is not entire, and the failure is not in respect to a material point touching the essence of the contract, so that there may be a compensation in dam- ages for this deficiency, the contract cannot be rescinded, but ' Story on Bills, § 18i, 187. A contract to pay an annuity to one who should marry the defendant's daughter, is not released merely because such marriage might be annulled by the court for impotence in the husband, if the parties to the marriage take no steps to annul it. Cavell v. Prince, Law R. 1 Exch,. 246. = Story on Bills, § 184, 187, 188; Robinson ti. Reynolds, 2 Q. B. 196. ' Casamajor v. Strode, Coop. ^.'Brougham, 510; Roflfey v. Shallcross, 4 Madd. 227 ; Johnson ». Johnson, 3 Bos. & Pul. 162. * Ibid. ; ante, § 29, 34. " Franklin v. Miller, 4 Ad. & El. 599 ; Boone v. Eyre, 1 H. Bl. 273, note a ; Street v. Blay, 2 B. & Ad. 461 ; Davis ». Street, 1 C. & P. 18 ; Damer v. Langton, 1 C. & P. 168 ; Weston v. Downea, 1 Doug. 23 ; Mavor V. Pyne, -8 Bing. 285. See White v. Mann, 26 Me. 361. • Oxendale v. Wetherell, 9 B. & C. 386. 560 THE CONSIDERATION. [CHAP. XVII. the party 'is put to his special action thereon for damages.^ If a note be given, and the consideration do not totally fail, but only partially, in some courts the deficiency cannot be pleaded in reduction of the amount, in an action on the note, but a special action for damages should be brought ;^ for as the note is in its nature entire, the defence thereto must be entire and go to the whole claim ; though many allow such deduction to be made. So, also, where the consideration only partially fails, it is a defence, ^jrc tanto, in suits on contracts i-especting per- sonal property, work, and labor.^ Thus, if a contract be made to build a house for a specified sum in a particular manner, and the work actually done be inferior to that contemplated in the agreement, the defendant may, upon proof of such fact, reduce the plaintiff's compensation to an equivalent of the actual benefit received.* § 607. Where the title partially fails as to the whole subject- matter of a contract, as if goods be sold which are under mort- gage, or incumbrance of any sort, the contract may be wholly rescinded.^ Where a contract is founded upon tivo considera- tions, one of wliich is merely void, but not illegal, and the other is sufficient, it will be binding,'' and entitle the party to ' Story on Sales, § 204, 205, 423, and cases cited ; Johnson v. Johnson, 3 Bos. & Pul. 162 ; Casamajor v. Strode, Coop. i. Brougham, 610 ; Roffej v. Shallcross, 4 Madd. I'll. ^ Tye V. Gwynne, 2 Camp. 346 ; Moggridge i>. Jones, 14 East, 486 ; ]\Iorgan v. Richardson, 1 Camp. 40 ; Parish u. Stone, 14 Pick. 209 ; Grant V. Welchman, 16 East, 207 ; Pcrley v. Balch, 23 Pick. 283 ; Shepherd v. Temple, 3 N. H. 4.55 ; Beecker v. Yrooman, 13 Johns. 302 ; Day v. Nix, 9 Moore, 159. ^ See 2 Kent, Comm. 472, as to the case of real property. * 2 Stark. Evid. 97, 2H0, 640 ; 3 Stark. Evid. 176 ; Hayward v. Leonard, 7 Pick. 181 ; Tve v. Gwynne, 2 Camp. 346 ; Parish v. Stone, 14 Pick. 210 ; Mondcl V. Steei, 8 M. & W. S5S ; Bac. Abr. Rent (L.). ' 2 Kent, Coram. 470; Farrcr v. Nightingal, 2 Esp. 639; Graham o. Oliver, 3 Bcav. 124 ; Hill v. Buckley, 17 Ves. 394 ; Paton u. Rogers, 1 Ves. & B. 351 ; Story on Sales, § 423, and cases cited. ' Bliss V. Negus, 8 Mass. 51 ; Pikard v. Cottels, Yelv. 56 ; Crisp v. Gamel, Cro. Jac. 128; Bruer v. Southwell, Style, 58; Shann v. Bilby, Style, 280; BestB. Jolly, 1 Sid. 38; Onslow, N. P. 145; 1 Lill. Abr. 297; Com. Dig. Action on the Case, Assumpsit (B. 13) ; Mayfield v. Wadsley, 3 B. & C. 361 ; Wood v. Benson, 2 Cr. & J. 94. CHAP. XYII.] TOTAL OR PARTIAL FAILURE OP CONSIDERATION. 561 damages to the extent of the good consideration. Thus, a promise in consideration of an assignment of a title by dower, and of forbearing to sue an attacliment out of chancery upon a decree, will be enforced ; because, although a title to dower cannot be assigned at law, but only released to the terre-tenant, the forbearance is sufficient to support the contract.^ But if a promise be made upon two considerations, one of which is illegal or fraudulent, it is void, even although the other consid- eration be good.^ Thus, if a bill of exchange be given partly for spirituous liquors sold contrary to law, and partly for money lent, it is not binding.^ So a promissory note for a sum, part of which is fixed and part contingent, is not negotia- ble.* So, also, where a party covenants in the alternative to do one of two specified things, if one of them be illegal, the whole agreement will be void.^ But if the agreement be to do an act which may be effected either by lawful or unlawful means, the law will presume in favor of the contract an inten- tion to perform it legally, for illegality will not be presumed, but must be proved.^ So, also, where there is one considera- tion, and it is partially illegal, the contract is void.^ § 608. By the common law, the want of an adequate con- sideration is no defence to an action on a bond, or on any other sealed instrument ; ^ although, in some of the States in the ' Com. Dig. Action on the Case, Assumpsit (B. 13) . An assignment of a title to dower would probably be now held to be valid in equity, and, therefore, a sufficient consideration. See 1 Story, Eq. Jur. § 624, &c., eh. 12. But this does not impugn the principle of the case. ' Featherston v. Hutchinson, Cro. Eliz. 199 ; Morris v. Chapman, T. Jones, 2-t ; Bridge v. Cage, Cro. Jac. 103 ; Crawford v. Morrell, 8 Johns. 253 ; Com. Dig. Covenant (F.) ; Story on Bills, § 187 ; Waite v. Jones, 1 Bing. N. C. 662. ^ Scott V. Gillmore, 3 Taunt. 226 ; Bliss v. Negus, 8 Mass. 60 ; Shackell V. Rosier, 2 Bing. N. C. 646 ; 8. c. 8 Scott, 69. " Palmer v. Ward, 6 Gray, 340. ' Lewis V. Davison, 4 M. & W. 654 ; Stevens v. Webb, 7 C. & P. 60 ; Waite V. Jones, 1 Bing. N. C. 656 ; s. c. 5 Bing. N. C. 341 ; ShackeU v. Rosier, 2 Bing. N. C. 646 ; Story on Sales, § 504; ante, § 431. ' Ibid. ; Lewis v. Davison, 4 M. & W. 654 ; Waite v. Jones, 1 Bing. N. C. 666 ; s. c. 5 Bing. N. C. 341. ' Ibid. « 2 Black. Comm. 446 ; 1 Fonbl. Eq. B. 1, ch. 5, § 1, note a; Sharington VOL. I. 36 562 THE CONSIDERATION. [CHAP. XTII. Union, either local custom or statute has given validity to such a defence.^ Indeed, mere inadequacy of consideration, where it is not of so gross a nature as to indicate fraud on the one side, or utter incompetency on the other, will not, of itself, invalidate an agreement, either in law or in equity.^ But a total failure of the consideration constitutes a good defence generally to an action on a sealed as well as -an unsealed instru- ment ; for if the foundation of the covenant fail, the covenant fails also.^ Thus, it will be a good defence to an action by the lessor for rent, that the lessee had been evicted from the premises, either by the lessor, or by any person having a para- mount title.* § 609. The rule applies, also, to cases of an eviction of the lessee from part of the premises by the lessor, the rent not being apportionable ; but if the eviction be by a stranger, with title paramount, the eviction is only a discharge pro tanto, be- cause the rent is in such ease apportionable.^ But an eviction from a part of the land by the lessor is no defence to an action on- any other covenant, as to repair the premises, which the ». Strotton, Plowd. 308; 1 Powell on Cont. 341, 342; Borell v. Dann, 2 Hare, 440. 1 Case V. Boughton, 11 Wend. 106 ; Swift v. Hawkins, 1 Ball. 17. ^ 1 Story, Eq. Jur. § 245, 246; Borell v. Dann, 2 Hare, 440, 450; Follett V. Rose, 3 McLean, 332; Robinson v. Schly, 6 Ga. 515. The doctrine concerning inailequacy of consideration is thus stated and illus- trated by Mr. Justice Perkins, in Schnell v. Nell, 17 Ind. 29 (1861) : " The consideration of one cent will not support the promise of Schnell. It is true that, as a general proposition, inadequacy of consideration will not vitiate an agreement. Baker v. Roberts, 14 Ind. 552. But this doctrine does not apply to a mere exchange of sums of money, of coins whose value is exactly fixed, but to the exchange of something of, in itself, indeterminate value for money, or perhaps for some other thing of indeterminate value. In this case, had the one cent mentioned been some particular one cent, — a family piece, or ancient; remarkable coin, possessing an indeterminate value, extrinsic from its simple money value, — a different view might be taken." See § 5.50. = Com. Dig. Covenant (F.) ; Alsope v. Sytwell, Yelv. 18 ; ante, § 480. •• Salmon v. Smith, 1 Saund. 204, note 2; Jordan v. Twells, Cas. t. Hard. 161 ; Dorrel v. Andrews, Hob. 190, and note by Williams ; Xeale v. Mackenzie, 1 M. & W. 747 ; liayne v. Maltby, 3 T. R. 438, 442 ; Bao. Abr. Kent (L.) (M.) ; Com. Dig. Covenant (F.). » Bac. Abr. Kent (L.) (M.) ; Newton v. AUin, 1 Q. B. 518. CHAP. XVII.J TOTAL OE PARTIAL FAILURE OP CONSIDERATION. 563 lessee can still perform ; ^ and the reason of this difference seems to be, that the rent is founded upon an actual enjoyment of the land, and, as it were, issues out of it.^ So, if a lease be agreed on, and the lessee execute his part, and the lessor do not execute his part, whereby there is no lease, the covenants in the indenture sealed by the lessee are void. So, also, is a bond given for the performance of the covenant. Indeed, wherever the consideration for the covenants in a sealed instru- ment wholly fails, or is wholly void, the covenants are also void.^ But a conveyance made to a third person, in satisfac- tion of illegal claims taken up by such third person, at the request of the grantor, is held to have been made upon a valid consideration.* » Newton v. AUin, 1 Q. B. 518. " Bac. Abr. Rent (L.). ' Com. Dig. Covenant (F.), and cases there cited. See § 556, et seq. • Wright V. Hughes, 13 Ind. 109 ; Butler v. Edgerton, 15 Ind. 15 ; Butler e. Myer, 17 Ind. 77 (1861). 564 ILLEGAL CONTRACTS, [CHAP. XVIII. CHAPTER XVni. ILLEGAL CONTRACTS. § 610. The next subject of which we propose to treat is that of unlawful contracts. Contracts are sometimes said to be illegal, either because the consideration of the promise is ille- gal, or because the promise itself is illegal. The illegality of the consideration has been -already adverted to. But the dis- tinction between an illegal promise, and an illegal consideration, seems purely technical, inasmuch as the promise constitutes the consideration on one side. That this technicality exists, is evi- dent from the form of pleading on a contract, in which the party plaintiff must allege both a legal consideration and a legal promise, in order to maintain his action.^ The distinction tends to convey the erroneous impression that the party from whom the legal consideration moves may enforce his claim against the party promising to perform an illegal act, though the latter party cannot enforce the contract against the former. This, however, is an entire mistake. Every executory contract, the consideration of which is illegal on either side, is void ; and neither party can found any claim upon it against the other party. If the contract be executed, however, that is, if the wrong be already done, the illegality of the consideration docs not confer upon the party guilty of the wrong the right to renounce the contract ; for the general rule is, that no man can take advantage of his own wrong ; and the innocent party, therefore, is alone entitled to such a privilege.^ But if both parties be guilty, neither can ordinarily obtain relief on their contract, either at law or in equity. This rule is not, however, without modifications and exceptions ; but before proceeding to ' PoweU on Cont. 176 (ed. 1790). ^ Taylor v. Weld, 5 Mass. 116. CHAP. XVIII.] ILLEGAL CONTBACTS. 665 consider them, it becomes necessary to notice a position which has been supported by high authorities in the law. § 611. The general rule is, that where an illegal contract has been made, neither courts of law nor of equity will interpose to grant any relief to the parties, but will leave them where it finds them, if they have been equally cognizant of the illegality, — according to the maxim, " In pari delicto potior est conditio defendentis et possidentis." And the parties are in pari delicto if the plaintiff cannot make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was a party .^ Yet this rule is not without exceptions, which are allowed on the ground of public policy. An illegal contract will never, indeed, be enforced, if it be executory ; but if it be executed, in despite of a statute or rule of public policy prohibiting it, relief will often be granted in equity, not only by setting aside the agreement, but by ordering a repayment of money paid under it. But relief will never be granted where the parties are in pari delicto, unless in cases where public policy would be thereby promoted ; for it is not the benefit of the party, but of the public, that is regarded. And at law, where money is paid on an illegal agreement, it may be re- covered before the execution of the agreement, but not after- wards.2 § 612. It was maintained by Blackstone, where an act, not immoral in itself, is either enjoined or prohibited by statute, and the rule is enforced by the annexation of a pecuniary penalty to the transgression thereof, that there is nothing in- trinsically immoral or illegal in the infringement thereof, pro- vided, that the prescribed penalty, which he considered in the nature of an alternative rather than a punishment, be duly paid.^ Hence arose a distinction, which was repeatedly ' Taylor v. Chester, 10 B. & S. 237, 247, per Mellor, J. See also Simpson v. Bloss, 7 Taunt. 246 ; Fivaz v. Nicholls, 2 C. B. 501, 512, per Tindal, C. J. = Hastelow v. Jackson, 8 B. & C. 221 ; M'Kinnell v. Robinson, 3 M. & W. 434; Bone v. Ekless, 5 H. & N. 925 (1860). ' 1 Black. Comm. 58. " In relation to those laws, which enjoin only positive duties, and forbid only such things as are not mala in se, but mala prohibita merely, without any mixture of moral guilt, annexing a penalty to non-compliance, here, I apprehend, conscience is no further concerned than 566 ILLEGAL CONTRACTS. [CHAP. XVIII. affirmed in the courts, between mala prohibita and mala in se ;. the former being merely violations of statute provisions, involv- ing no immorality, and considered as offences only because they were forbidden, while the latter were transgressions of the moral code, as well as of the legal code of duties. § 613. But this distinction has been long since abrogated, as utterly unsound, and every act is now considered to be illegal in itself which is expressly forbidden, either by statute or otherwise.! Indeed, it is difficult to see the object of the penalty, unless it be interpreted as a prohibition of the offence ; for, in any other view, taxation, rather than penal prohibition, would seem to be its aim, and any one might purchase a right to transgress the statute law. Lord Holt supports the doctrine that an agreement to do acts which are mala prohibita, is void, for want of consideration, " because," he says, " a penalty im- plies a prohibition ; thence, no prohibitory words in the stat- ute." Upon this reasoning, which seems to be conclusive, all the late decisions have been founded, and the rule is now per- fectly established, that no agreement to do an act forbidden by statute, or to omit to do an act enjoined by statute is bind- ing.^ § 614. But although a contract is equally void, whether it be malum in se, or merely malum prohibitum ; yet the position of the parties, as to their remedies, is not the same in both cases. The general rule is, that where an illegal contract has been made, neither a court of law nor of equity will interpose to grant relief to the parties thereto, if they have been equal par- by directing a submission to the penalty, in case of our breach of those laws, &c. In these cases, the alternative is offered to every man : either abstain from this, or submit to such a penahy ; and his conscience will be clear, whichever side of the alternative he thinks proper to embrace." " Lex pure poenalis obligat tantum ad pcenam non item ad culpam ; lex poenalis mixta et ad culpam obligat et ad poenam.'' Sanderson de Oblig. Conscient. Prael. 8, § 17, 24. ' Bank of U. S. v. Owens, 2 Peters, 638 ; Aubert «. Maze, 2 Bos. & Pul. 871 ; Watts v. Brooks, 3 Ves. 612. ° Bartlett v. Vinor, by Lord Holt, Carth. 252 ; Clark v. Protection Ins. Co., 1 Story, 109 ; De Begnis v. Armistead, 10 Bing. 110 ; Cope v. Row- lands, 2 M. & W. 153 ; D'Allex v. Jones, 2 Jur. (n. s.) 979 ; 37 Eng. Law & Eq. 476 1 Bensley v. Bignold, 5 B. & Al. 335. CHAP. XVIII.] ILLEGAL CONTRACTS. 507 takers and promoters of the illegality, but will leave them where it finds them ; according to the maxim, In pari delicto potior est conditio defendeiitis et possidentis.^ But, in order that this rule should take full effect, one of two requisites must occur. First, the contract must have been malum in se, in- volving criminality or moral turpitude ; or, second, if it be merely malum prohibitum, it should appear that the parties are in equal fault, in pari delicto, and that the contract is ex- ecuted. § 615. And in the first place, if a contract be malum in se, being essentially immoral and criminal, neither party has any remedy against the other. Nor can money paid thereupon be reclaimed at law or in equity.^ If, therefore, a sum of money be paid by way of bribe,^ or for the compounding of a felony,* or as a premium for future prostitution,^ or for a wager,^ it cannot be recovered on refusal of the other party to perform his part of the contract. Nor can an action be brought to en- force the performance of the contract. Ux turpi contractu non oritur actio. And it has been held that an action cannot be maintained for the breach of a contract for renting rooms, where the owner refused to allow the lessee to use them upon discovering that he intended to deliver lectures in them main- taining that the character of Christ was defective, and im- peaching his teaching and that of the Bible.'^ This was on the ground that, Christianity being a part of the law of Eng- land, the matter was blasphemous. It was also illegal by statute. § 616. In the next place, where the contract is malum pro- ' See cases cited post. ' Howson V. Hancock, 8 T. K. 677 ; Smith v. Bromley, 2 Doug. 696 ; Browning v. Morris, 2 Cowp. 790 ; Wliite v. Franklin Bank, 22 Pick. 184 ; Lowell V. Boston & Lowell Railroad Co., 23 Pick. 32 ; Worcester v. Eaton, 11 Mass. 376. ' Browning v. Morris, 2 Cowp. 793. * Worcester v. Eaton, 11 Mass. 376 ; Collins v. Blantem, 2 Wils. 347. ' Matthews v. L— e, 1 Madd. 658 ; Binnington v. Wallis, 4 B. & Al. 650. « Rourke v. Short, 5 El. & B. 904 (1856). See Crofton v. Colgan, 10 Irish Com. Law, 133 (1859). ' Cowan V. Milbourn, Law R. 2 Exch. 230 (1867). 568 ILLEGAL CONTRACTS. [CHAP. XVIII, hibitum, and does not involve any moral turpitude or crimi- nality, one party may, under certain circumstances, have a remedy against the other party on an executed or executory contract ; and this rule is admitted on grounds of public policy. And first, if the contract be executed, the title of either party to relief will depend upon whether both parties are in equal fault, in pari delicto. If they be m pari delicto, no relief will be granted, but they will be left remediless ; their contract will not be set aside, and any money which may have been ad- vanced cannot be recovered.^ But if they be not in pari de- licto, the rule is directly the reverse.^ Whenever, therefore, one party, acting under circumstances of great need, or op- pression, or hardship, or great inequality of condition, makes a contract in violation of a law, or rule of public policy, intended to protect persons against oppression, or extortion, or deceit, he is not in equal fault, and he may recover of the other any money that he may have advanced, or he may have his con- tract set aside ; ^ and relief is granted in such cases, on the ground that the public interest, and not solely the private ' Browning v. Morris, 2 Cowp. 793 ; White v. Franklin Bank, 22 Pick. 188 ; Williams v. Hedley, 8 East, 378 ; Smith v. Bromley, 2 Doug. 696 ; Lowell V. Boston & Lowell Railroad Co., 23 Pick. 32; Worcester v. Eaton, 11 Mass. 376. See also 1 Story, Eq. Jur. § 298, 299, and cases cited ; Howson v. Hancock, 8 T. R. .575 ; Collins v. Blantem, 2 WUs. 347; Thomas v. Richmond, 12 Wall. 349 (1870). ^ Browning v. Morris, 2 Cowp. 792 ; White v. Franklin Bank, 22 Pick. 188; Smith v. Bromley, 2 Doug. 696; St. John v. St. John, 11 Ves. 535; Hatch V. Hatch, 9 Ves. 298 ; Roche v. O'Brien, 1 Ball & Beat. 358 ; Neville V. Wilkinson, 1 Bro. C. C. 548 ; Lowell v. Boston & Lowell Railroad Co., 23 Pick. 32. » Ibid. ; 1 Story, Eq. Jur. § 321 ; Smith v. Bromley, 2 Doug. 696. In this case Lord Mansfield said : " If the act is in itself immoral, or a violation of the general laws of public policy, there, the party paying shall not have this action ; for where both parties are equally criminal against such general laws, the rule is, potior est conditio defendentis. But there are other laws, which are calculated for the protection of the subject against oppression, extortion, deceit, &c. If such laws are violated, and the defendant takes advantage of the plaintiff's condition or situation, there the plaintiff shall recover ; and it is astonishing that the Reports do not distinguish between the violation of the one sort and the other." See also Bosanquett v. Dash- wood, Cas. t. Talb. 39, 40 ; Chesterfield v, Janssen, 2 Ves. 156 ; Jones v. Barkley, 2 Doug. 684. OHAP. XTIII.] ILLEGAL CONTRACTS. 569 interest of the individual requires it.^ This rule applies to cases of usurious contracts, wherein it is considered that the lender has availed himself of the necessities or urgencies of the bor- rower to extort from him an unlawful rate of interest ; and an action for money had and received will lie, therefore, for the excess paid beyond the principal and lawful interest thereon.^ So, also, the same doctrine applies to money paid as a premium for a lottery ticket.^ § 617. Again, if the contract be executory, to do an act not immoral in itself, but prohibited by some special rule of public policy, and one party advance money in consideration of the future execution of the illegal act, the intermediate time be- tween such advance and the performance of the act is a locus pcBnitentice, during which he may rescind his contract, and ut- terly abandon it, and recover tlie money advanced.* And this rule obtains although the parties be in equal fault.^ Thus, where money was advanced to procure a place in the customs, and an action was brought therefor before the place had been procured, it was held that the plaintiff could recover.^ But in such a case, the money can only be recovered upon the ground of an utter abandonment of the contract, and the plaintiff must be careful not to affirm the contract by his action. The ground upon which this rule obtains is, that it tends to prevent the execution of illegal contracts, and while it is productive of no injustice to either party, promotes public policy and good morals. § 618. 'Illegal contracts may be divided into two classes: 1st. Contracts which violate the common law ; 2d. Contracts which violate the statute provisions. ' 1 Story, Eq. Jur. § 298 ; St. John v. St. John, 11 Ves. 535 ; Lacaus- sade V. White, 7 T. R. 635. ' Astley V. Reynolds, 2 Str. 916 ; Browning v. Morris, 2 Cowp. 793 ; Vandyck v. Hewitt, 1 East, 98. ^ Browning v. Morris, 2 Cowp. 793 ; Jaques v. Golightly, 2 W. Bl. 1073. « White V. Franklin Bank, 22 Pick. 189 ; Tappenden v. Randall, 2 Bos. & Pul. 467 ; Aubert v. Walsh, 3 Taunt. 277 ; Lowry v. Bourdieu, 2 Dong. 470; Utica Ins. Co. v. Kip, 8 Cow. 20; Cotton v. Thurland, 5 T. R. 405; Jaques V. Withy, 1 H. Bl. 67 ; Morris v. M'CuUock, Ambl. 432 ; Adams Exp. Co. V. Reno, 48 Mo. 264 (1871). " Ibid. « Walker v. Chapman, Loflft, 342 ; White v. Franklin Bank, 22 Pick. 189. 670 ILLEGAL CONTRACTS, [CHAP. XTIII. CONTEACTS IN VIOLATION OP THE COMMON LAW. § 619. This class of contracts we shall subdivide, for the sake cf convenience, into the following classes : 1st. Contracts void on account of fraud ; 2d. Contracts void on account of im- morality ; 3d. Contracts in violation of public policy. CONTRACTS VOID ON ACCOUNT OP FRAUD. § 620. 1st. Fraud has been defined to be " every kind of arti- fice employed by one person for the purpose of deceiving an- other," and this is sufficiently descriptive of fraud.^ The courts, however, have strenuously refused to attach any exact definition to the term, or to lay down any except general rules in respect to it. For fraud is as difficult to define as it is easy to perceive ; and any positive definition or rigid rule would be easily evaded by craft, so as to place cases manifestly fraudulent beyond its exact limits. Through this wise abstinence, therefore, fraud remains undefined and unlimited by any forms, but is to be inferred from the special circumstances of every case. Wher- ever it occurs, it vitiates the transaction tainted by it, both in law and equity. No agreement, although it be apparently fair, and in compliance with the formalities of law, can be enforced, if it be essentially unfair and fraudulent. For a contract to be binding, must be not only within the letter, but also within the spirit of law. And unless it be made in good faith, and free from the stain of fraud and imposition, it will be spurned from the threshold of every legal tribunal.^ But a contract voidable for fraud, and not void, remains valid until rescinded.^ ' The following definitions of fraud were given in the Roman law: " Do- lum malum Servius quidem ita definit, machinationem quandam alterius decipiendi causa, cum aliud simulatur, et aliud agitur. Labeo autem posse [et] sine simulations id agi, ut quis circumveniatur : posse et sine dolo malo, aliud agi, aliud simulari ; sicuti faciunt, qui per ejusmodi dissimulationem deserviant, ot tuentur vel sua vel alien a. Itaque ipse sic definiit, dolum malum esse omnem calliditatem, fallaciam, machinationem ad circimiveni- endum, fallendum, decipiendum alterum adhibitam. Labeonis definitio vera est." Dig. Lib. 4, tit. 3, 1. 1, § 2. ' See Termor's Case, 3 Co. 77 ; Bright v. Eynon, 1 Burr. 390 ; Foxcraft Reese River Silver Mining Co. v. Smith, Law R. 4 H. L. 64 (1869). CHAP. XVIII.] CONTRACTS VOID ON ACCOUNT OP FRAUD. 571 § 621. It is not necessary that the fraud should arise from either party personally. The fraud of an authorized agent will invalidate a contract entered into by him in behalf of his prin- cipal. Thus, where an agent sold a picture belonging to his principal, and knowingly permitted the vendee to be deceived in relation to a fact which would have materially influenced his judgment, the contract was held to be void as against the purchaser.^ And where an agent has made a contract with a third person, although he have transcended the real limits of his authority, yet if the principal ratify it, and make the con- tract his own by availing himself thereof, he is liable in like manner as if he had personally made the contract. If, there- fore, the agent have made misrepresentations, the principal is bound thereby ; for the latter cannot ratify the contract, and avoid the responsibility of the representations which formed its basis, but he must avoid or ratify the contract in toto? V. Devonshire, 1 W. Bl. 193. and cases there cited ; Ludlow v. Gill, 1 Chip. 49 ; Duncan v. M'Cullough, 4 S. & R. 483 ; Dingley v. Robinson, 6 Greeul. 127 ; Ferguson v. Carrington, 9 B. & C. 69. ' Doe V. Martin, 4 T. R. 39 ; Fitzherbert v. Mather, 1 T. R. 12 ; Hill V. Gray, 1 Stark. 434; Cornfoot v. Fowke, 6 M. & W. 358. See Fox v. Mackreth, 2 Bro. C. C. 420. In Cornfoot v. Fowke, supra, the plea was that the defendant had been induced to enter into the agreement sued on, by the fraud and covin of the plaintiff. The evidence proved nothing to support that plea ; for the plaintiff had merely put the house into the hands of an agent to be let at a stipulated rent ; he had neither himself stated, nor authorized the agent to state, any thing false or deceptive. It did not appear that the employer had not told the agent and desired him to apprise the purchaser. It was the over-zeal of the agent for which the principal was not to suffer. The court held that the plea was not made out by evi- dence which merely showed the agent to have stated what he believed to be true; viz., that there was no objection attaching to the house. But if the defence had rested, not on the allegation of fraud, but simply upon the ground of misrepresentation, or concealment on the part of the principal, the deci- sion might have been different. See the interesting ease of The National Exchange Co. v. Drew, 2 Macq. 145 (1855). ' See Fitzsimmons v. Joslin, 21 Vt. 129 ; National Exchange Co. v. Drew, 2 Macq. 103 ; 32 Eng. Law & Eq. 1 ; Hough v. Richardson, 3 Story, 689. In this case, Mr. Justice Story said: " The sale, then, being made, by Moulton, not as himself the owner, which he was not, but as the agent of the owners, it follows, that they are bound by his representations made at 572 ILLEGAL CONTEACTS. [CHAP. XVIIL Again, where a party has made a false representation to one person as an inducement to a contract, and he knows that that person has stated such representation to a third person, who, upon faith thereof, makes a contract with tlie first party, the intermediate person will he considered as an agent of the first party by implication. Thus, where A., being about to sell a public-house, falsely represented to B., who was about to pur- chase it, that the receipts were £180 a month, and B., to the knowledge of the defendant, communicated this misstatement to the plaintiff, who became the purchaser instead of B., it was held, that an action lay against the seller, he having, by his silence, made the representation of B. his own.^ § 622. The party gniilty of fraud cannot, however, avoid the contract, for no man can take advantage of his own wrong,^ unless it be in some few instances, excepted upon grounds of public policy. It is solely at the option, therefore, of the party upon whom the fraud is practised, whether he will be bound by the agreement or not.^ Yet, if he determine to avoid a contract because of the fraud, he must give notice of such the time toucliing the sale, as a part of the res gestce ; and as to the pur- chasers, it makes no difference whether these representations were made hy the authority of the owners or not, if they were material to and constituted the basis of the sale, and it was made by the purchaser on the faith and credit of these representations. Under such circumstances, the sale is good in the entirety, or not good at all. The owners have no right to insist upon the vahdity of the sale independent of the representations. The whole must be taken together as a part of one and the same transaction. It cannot be adopted in part and rejected in part. It must be taken as good for the whole or not at all. I have on several occasions expressed my opinion upon this point; and especially in the case of Daniel v. Mitchell and others, 1 Story, 172 ; and in another case recently argued, Doggett i\ Emerson and others, and decided in favor of the plaintiff. The case of Small v. Attwood, Younge, 407, and the same case on appeal, Attwood v. Small, 6 CI. & Finn. 232, go far to support the same doctrine, although somewhat distinguishable in its circumstances." Doggett v. Emerson, 3 Story, 729 ; Veazie v. Wil- liams, 3 Story, 612. ' Pilmore v. Hood, 6 Scott, 827 ; s. C. 5 Bing. N. C. 97. See Gerhard V. Bates, 2 El. & B. 476 ; 20 Eng. Law & Eq. 129 ; Crocker v. Lewis, 3 Sumner, 8 ; Hunt v. Moore, 2 Barr, 105 ; Weatherford v. Fishback, 3 Scam. 170; McCracken v. West, 17 Ohio, 16. " See Bessey v. Windham, 6 Q. B. 166 ; Nichols v. Patten, 18 Me. 231. " Steel V. Brown, 1 Taunt. 381 ; Deady v. Harrison, 1 Stark. 60. CHAP. XVIII.] CONTRACTS VOID ON ACCOUNT OP FRAUD. 673 determination to the other party, within reasonable time after his discovery of the fraud.^ And if, with knowledge of the fraud, he acquiesce in the contract expressly; or bring an action on the contract ; ^ or do any act importing an intention to stand by it; or remain silent under circumstances which plainly indicate a continuing assent thereto, — he cannot after- wards avoid it ; for, practically, no man is injured, if he know of the deceit which is practised, and consent to it, since the deceit becomes then an agreed fact of the case.^ If, therefore, he make a compromise of the whole matter, or release the other party from liability, or expressly waive all right to pro- ceed against him, he is bound thereby as by a new agreement.* So, also, if he treat the subject-matter as his own, as by selling or leasing, he cannot avoid the contract on the ground of fraud, even although he should afterwards discover some new inci- dent to the same fraud, making it more to his injury than he supposed.^ So, also, if, when a contract is made for work, to be done at a stipulated price, and it is discovered, before the work is commenced, that there has been such a misrepresenta- tion as to its value as to afford to the party engaging a ground to repudiate the contract, yet if he do not complain, but pros- ecute the work, he can demand no more than the contract price.^ But so long as he remains in ignorance that he has been defrauded, his conduct will not be considered as importing such an acquiescence therein as to depi'ive him of taking ad- vantage of the fraud within reasonable time after his actual discovery thereof.' Nor does it matter, as to his right of re- 1 Masson v. Bovet, 1 Denio, 69 ; Herrin v. Libbey, 36 Me. 3S0 ; Tisdale V. Buckmore, 33 Me. 461. And if possible must put the other party in statu quo. Cook V. Gilman, 34 N. H. 566 ; Poor t>. Woodburn, 25 Vt. 234. ^ Ferguson v. Carrington, 9 B. & C. 59. ' Campbell v. Fleming, 1 Ad. & El. 40; s. C. 3 Nev. & Man. 834; Selway v. Fogg, 5 M. & W. 83 ; Miles u. Dell, 3 Stark. 23. * Vigers v. Pike, 8 CI. & Finn. 680 ; Parsons v. Hughes, 9 Paige, 691 ; Hough V. Richardson, 3 Story, 695, 698. * Ibid. ; Campbell v. Fleming, 1 Ad. & El. 40; Selway v. Fogg, 5 M. & W. 83 ; Masson ». Bovet, 1 Denio, 69. » Saratoga Railroad Co. v. Row, 24 Wend. 74. And see Blydenburgh V. Welsh, Baldwin, 331 ; Lamerson e. Marvin, 8 Barb. 10 ; Selway v. Fogg, 5 M. & W. 83 ; Campbell v. Fleming, 1 Ad. & El. 40. ' Doggett V. Emerson, 3 Story, 740. In this case, which was a sale of 674 ILLEGAL CONTRACTS. [CHAP. XVIII. covery, what length of time passes before his discovery of the fraud, provided he had not the means of discovering it before, and provided he is not guilty of laches} Lapse of time, how- ever, always constitutes an objection to the maintenance of a suit; since the fact that a long time has passed without com- plaint or perception of injury would indicate an absence of fraud ; and still greater weight would be given thereto, if it should appear to have operated to obscure or destroy the evi- timber lands under a false representation that they contained a great amount of timber, a bill was brought, after the lapse of six years, on which the plain- tiff was held to be entitled to recover. Mr. Justice Story said: "In the next place, as to the lapse of time. This in many cases is a most important consideration, and weighs much, and sometimes. Est maximi et momenti ponderis, especially when there has been a great change of circumstances as to the character and value of the property, in the intermediate period ; and a fortiori, where the party complaining has been fairly put upon his dili- gence, and has had ample means of inquiring as to all the material facts, and has chosen to lie by in gross indifference and indolence. This question does not indeed seem fairly open upon the present pleadings. The bill charges that the plaintiff first discovei-ed the gross fraud and imposition practised upon him in July, 1841, and, as it should seem, by means of the memorial of Emerson to the commissioners, in March, 1841, and their report thereon made in July, 1811. The answer sets up no denial to this statement of the bill ; and does by imphcation admit its correctness. But whether this be a just inference or not, it seems to me that the lapse of time cannot interpose any bar to the relief asked by the bill, if otherwise well founded ; for the memorial of Emerson is of itself clear proof, that he was before that time fully aware of all the material facts ; and there is no pretence to say, that he communicated them to the plaintiff. Neither is it shown that the plaintiff had, by any other means, obtanied suitable information to put him upon inquiry. In short, for aught that appears in the case, the plaintiff never discovered the gross falsity of the representations made to him until the memorial and report brought it home to his knowledge. Besides, as was remarked by the Lord Chancellor, in Partridge v. Usborne, 5 Russ. 195, 232, when one party to a contract makes a positive representation, it is not laches in the other not to proceed immediately to verify that representation. At all events, the defence is not put upon any such ground as the lapse of time, and knowledge by the plaintiff of the material facts, so as to have called upon him for precise proofs of his real situation and of the time when he first discovered the full nature and extent of the deception practised upon him. So that it seems to me that the court is not called upon in this case, by the state of the pleadings and evidence, to act upon an}- such de- fence as the lapse of time, whatever, under other circumstances, might have been the just value of any such defence." ' Ibid. ; Irvine v. Kirkpatrick. 7 Bell, App. 186 ; 3 Eng. Law & Eq. 17. CHAP. XVIII.] CONTRACTS VOID ON ACCOUNT OF PEAUD. 575 dence in rebutter of fraud, or greatly to change the circum- stances of the case.^ But if, in addition to the lapse of time, the party claiming to recover had the means of knowledge, he must plainly show that he has not been guilty of laches, or he cannot recover.^ It is not, however, considered as laches in a party not to proceed immediately to verify representations, on the basis of which he makes a contract, but he will be allowed reasonable time. to do so.^ But where a man is guilty of gross laches, in not employing means of knowledge within his reach, and proceeds to treat the subject-matter as his own, and to sell it, or use it, for his advantage and to its injury, he could not claim to set his contract aside, even in equity, on the ground of fraud. A fortiori, if a man be cognizant of all the circum- stances, and do not complain, but deal with the other party as if he had no case against him, he would, as has been said, " build up, from day to day, a wall of protection for such opponent, which will probably defeat any attack on him." * And it has been held that executed contracts tainted with fraud are also binding.^ § 623. The general rule is, that before a party can rescind a contract and recover the advances he may have made there- on, he must restore the other to the condition in which he stood before the contract was made; but in cases of fraud, where the subject-matter of the contract has become so en- tangled and complicated as to render it impossible to do this, the injured party, upon offering to restore the property received and to reinstate the other into his previous condition, as far as it lies in his power, may rescind the contract and recover his advances.* But when the subject-matter is of no value at all ' Hough V. Richardson, 3 Story, 695, 698 ; Doggett ». Emerson, 3 Story, 740; Sanborn v. Stetson, 2 Story, 481 ; Veazie v. Williams, 3 Story, 611 ; Attwood V. Small, 6 CI. & Finn. 351. ^ Ibid. ; Hough v. Richardson, 3 Story, 695. ' Partridge v. Usborne, 5 Euss. 195 ; Doggett v. Emerson, 3 Story, 740. ' By Lord Cottenham, in Vigers v. Pike, 8 CI. & Finn. 562 ; Sanborn V. Stetson, 2 Story, 481'; Veazie v. Williams, 3 Story, 611. ' Noble V. Noble, 26 Ark. 317 (1870) ; Anderson ». Dunn, 19 Ark. 650. ° Masson v. Bovet, 1 Denio, 69. In this case Beardsley, J., said: " It was urged on the argument that a contract cannot be rescinded by 676 ILLEGAL CONTRACTS. [CHAP. XVIII. to either party, it need not be restored.^ And if a person re- scind a contract for fraud, he can recover back the money- paid, in an action for money had and received, only when he can return the consideration received, and place the other party in statu quo. If he cannot do this, his remedy is by an action for deceit.^ § 624. But where both parties have been guilty of a fraud- ulent intention, the law refuses to interfere, and leaves them as it finds them.^ Thus, if A. should open a policy of in- surance on his ship, then at sea, and deliver it to B., to un- derwrite upon it, allowing him until the next day to consider one of the parties alone, so as to authorize a recovery by him of what had been paid upon it, unless the other party is thereby fully restored to the condition in which he stood before the contract was made. This is certainly the general rule ; but in cases of fraud, such as this was, it can only mean that the party defrauded, if he would rescind the contract, must return or offer to return every thing he received in execution of it. To retain the whole, or a part only of what was received upon the contract, is incompati- ble with its rescission ; and hence the necessity of restoring what had been received upon it. " This is not exacted on account of any feeling of partiality or regard for the fraudulent party. The law cares very little what his loss may be, and exacts nothing for his sake. If, therefore, he has so entangled himself in the meshes of his own knavish plot, that the party defrauded cannot unloose him, the fault is his own ; and the law only requires the injured party to restore what he has received, and, as far as he can, undo what had been done in the execution of the contract. This is all that the party defrauded can do, and all that honesty and fair dealing require of him. If these fail to extricate the wrong-doer from the position he has assumed in the execution of the contract, it is in no sense the fault of his intended victim, and upon the principles of eternal justice, whatever consequences may follow, they should rest on the head of the offender alone." See Stevens v. Austin, 1 Met. 557; Howard v. Cadwalader, 5 Blackf. 225; Martin v. Roberts, 5 Cush. 126 ; Frost v. Lowry, 15 Ohio, 200. ' Perley v. Balch, 23 Pick. 288. ' Clarke w. Dickson, El. B. & E. 148 (1858). ^ Taylor v. Weld, 5 Mass. 116 ; Deady v. Harrison, 1 Stark. 60 ; Robin- son V. M'Donnell, 2 B. & Al. 134 ; Doe i\ Roberts, 2 B. & Al. 369 ; Hawes V. Loader, YeLv. 196 ; 1 Story, Eq. Jur. § 61 ; Holraan v. Johnson, 1 Cowp. 341 ; Hannay v. Eve, 3 Cranch, 242 ; Warburton v. Aken, 1 IMcLean, 460 ; Goudy V. Gebhart, 1 Ohio St. 262; Clay w. Ray, 17 C. B. (n. s.) 188 (1864), an interesting case, involving a fraudulent compounding with credit- ors. See also Dillon v. Stephenson, 12 Irish Com. Law, 81 (1860). CHAP. SVIII.] CONTEACTS VOID ON ACCOUNT OP FRAUD. 677 the offer, and in the mean time A. should privately learn that the ship was lost, and with the intention of misleading B., should write to him, that, if he had not signed the policy, he need not, as the ship had been heard from ; and B., not having then sigiied the policy, but being misled by the letter to sup- pose the ship was safe, should then sign the policy and return it to A., intending thereby to gain the premium, without run- ning any risk ; in such a case, as each party would have in- tended a fraud upon the other, to obtain some advantage, the law would doubtless refuse redress to both. § 625. It is an established rule in law and in equity, that fraud will never be presumed, but must be clearly established by proof, dolum ex indiciis perspicuis prohari convenit} And it is hardly necessary to say that if a deed, lease, or will is sought to be set aside on the ground of fraud, the burden of proof is upon the party alleging the fraud.'^ It is not, however, neces- sary that positive and express proof thereof should be given ; for, whenever it is manifestly indicated by the circumstances and condition of the parties contracting, it will be presumed to exist. Nor is it necessary, in order to found a right in the party defrauded to recover on the contract, that the guilty party should appear to have been benefited by the fraud, or to have colluded with, the person who is.^ But it will not be im- plied from doubtful circumstances, which only awaken sus- picion.^ Courts of equity are, however, invested with a more extensive and unrestricted jurisdiction than courts of law, in cases of fraud ; and will often grant relief in cases where the circumstances and evidence would be inadequate to support a verdict founded thereupon in a court of law.^ But although the powers of courts of law are more restricted, yet, wherever fraud is clearly proved by the evidence to exist, it will always ' Cod. Lib. 2, t;t. 21, § 6. » Beatty v. Fishel, 100 Mass. 448 (1868) ; Stewart v. Thomas, 15 Gray, 171 ; Baldwin «. Parker, 99 Mass. 79 ; Howe v. Howe, 99 Mass. 88. ' Pasley v. Freeman, 3 T. R. 51. " Gould V, Gould, 3 Story, 540 ; Trenchard v. Wanley, 2 P. Wms. 166 ; Chesterfield v. Janssen, 2 Ves. 155, 156 ; Fullagar v. Clark, 18 Ves. 483 ; 1 Story, Eq. Jur. § 190. ' 1 Story, Eq. Jur. § 190 ; Chesterfield ». Janssen, 2 Ves. 156, 156 ; Ful- lagar V. Clark, 18 Ves. 483 ; Boynton v. Hubbard, 7 Mass. 112. TOL. 1. 87 578 ILLEGAL CONTRACTS. [CHAP. ZTIII. furnish a good ground of relief at law to the full extent of its jurisdiction, although it may not be given in the same way as by a court of equity ; and if relief can be practically and satis- factorily administered through the forms of law, it -will be granted there as readily as in equity.^ And when there is a complete and adequate remedy at law, a bill in equity will not lie.2 § 626. In cases of fraud, the general rule is, that a court of equity has jurisdiction, even although the party deceived may obtain relief by an action at law.^ But where the com- plainant does not seek to set aside the contract in toto, but merely to recover a compensation in damages, his proper remedy is by an action at law, inasmuch as this is properly a question for a jury.* But where the bill has the payment of damages as the alternative, damages may be awarded.^ § 627. Where contracts are made with persons of weak intellects, or whose minds are enfeebled by disease, the law is peculiarly scrutinizing, and is very prompt to infer fraud wherever the circumstances indicate that any improper ad- vantage has been taken, or any undue influence has been exerted upon such persons ; and it will raise a presumption of fraud, where, if the case were one of a person in full exercise of his faculties, no such presumption would be raised.^ Thus, ' Boynton ». Hubbard, 7 Mass. 112 ; Jackson ». Burgott, 10' Johns. 457 ; Bright V. Eynon, 1 Burr. 39G ; Hazard v. Irwin, 18 Pick. 95 ; Boreing v. Singery, 2 Har. & Johns. 455 ; Singery v. The Attorney-General, 2 Har. & Johns. 487 ; Corbett v. Brown, 8 Bing. 33 ; Polhill v. Walter, 3 B. & Ad. 114. = Clark V. Flint, 22 Pick. 231 ; Boston Water Power Co. v. Boston & Worcester R. R. Co., 16 Pick. 512 ; Dana v. Valentine, 5 Met. 8. See also Law V. Thorndike, 20 Pick. 317. ' Bradley v. Bosley, 1 Barb. Ch. 149. See Hobartw. Andrews, 21 Pick. 626, 533. But in cases charging fraud, and fraud only, the court has no jurisdiction. Fiske v. Slack, 21 Pick. 361 ; Holland v. Cruft, 20 Pick. 321. •■ Ibid. ; Cocke v. Hardin, Litt. Sel. Cas. 374 ; Russell v. Clark, 7 Cranch, 69 ; Newham v. May, 13 Price, 749 ; Blackwell v. Oldham, 4 Dana, 195; Hardwick v. Forbes, 1 Bibb, 212. See 2 Story, Eq. Jur. § 794 to 800. ' Andrews v. Brown, 8 Cush. 130. ' Blachford v. Christian, 1 Knapp,' 77. In this case. Lord Wynford said : " The law will not assist a man who is capable of taking care of his own interest, except in cases where he has been imposed upon by deceit, CHAP. XVIII.J CONTRACTS VOID ON ACCOUNT OP FRAUD. 579 where A., being eighty-three years of age, was entitled to the annual produce of a fund of the value of ^66000, during his life, and he executed a deed, assigning all his right therein to his daughter and her husband, t-o whom the reversion be- longed, in consideration of an annuity of ,£40 a year ; and in a suit instituted to reduce the deed, it was admitted that the assignor was very weak and infirm, and addicted to intox- ication ; and it also appeared that the deed was drawn up by the agent of the daughter and her husband, and that no agent or attorney was employed in behalf of the father : under these circumstances, it was held, that the deed was void, on the ground of over-influence.^ It is not necessary in such cases against whicli ordinary prudence could not protect him. If a person of ordinary understanding, on whom no fraud has been practised, makes an imprudent bargain, no court of justice can release him from it. Inadequacy of consideration is not a substantial ground for setting aside a conveyance of property ; indeed, from the fluctuation in prices, owing principally to the gambling spirit of speculation that unhappily now prevails, it would be diffi- cult to determine what is an inadequate price for any thing that is sold ; at the time of the sale, the buyer probably calculates on a rise in the value of the article bought, of which he would have the advantage ; he must not, therefore, complain if his speculations are disappointed, and he becomes a loser instead of a gainer by his bargain. But those who from imbecility of mind are incapable of taking care of themselves, are under the special pro- tection of the law. The strongest mind cannot always contend with deceit and falsehood ; a bargain, therefore, into which a weak one is drawn under the influence of either of these, ought not to be held valid, for the law requires that good faith should be observed in all transactions between man and man. If this conveyance could be impeached on the ground of the imbecility of Fitzsimmons only, a sufiicient case has not been made out to render it invalid ; for the imbecility must be such as would justify the jury, under a commission of lunacy, in putting his property and person under the protection of the Chancellor ; but a degree of weakness of intellect, far below that which would justify such a proceeding, coupled with other circumstances, to show that the weakness, such as it was, had been taken advantage of, will be sufiicient to set aside any important deed." See also Gartside v. Isherwood, 1 Bro. C. C. 660, 561 ; 1 Story, Eq. Jur. § 234 to 238, and cases cited ; Mahn v. Malin, 2 Johns. Ch. 238 ; Huguenin v. Baseley, 14 Ves. 290 ; Ball v. Mannin, 3 Bligh (n. s.), 1 ; Bennet v. Vade, 2 Atk. 325, 329; Osmond v. Fitzroy, 8 P. Wms. 130; Ex parte Allen, 15 Mass. 58; M'Diarmid v. M'Diarmid, 3 Bligh (n. s.), 374; Breed v. Pratt, 18 Pick. 115 ; Welker v. Ebert, 29 Wis. 194 (1871). ' M'Diarmid v. M'Diarmid, 3 Bligh (n. s.), 374. See also Farnam v. Brooks, 9 Pick. 212. 580 ILLEGAL CONTRACTS. [CHAP. XVIIl. that the party should appear to have been so completely imbecile as to justify a jury, under a commission of lunacy, in putting his person and property under the protection of a court of chancery ; but if he appear to liave been of a feeble under- standing, and the bargain be so unconscionable as to betoken imposition, it will be set aside in equity. ^ But if the person be possessed of an ordinary understanding, and no fraud have been practised on him, the mere fact that his bargain is im- prudent, or greatly to his disadvantage, will afford no ground to free him from it. 2 § 628. But mere inadequacy of consideration will not alone be sufficient to avoid a contract, unless it be of so gross a nature, or under such circumstances, as to indicate improper advantage taken, and undue inflnence exerted over the mind of a person, and then relief will be granted in equity, not on the ground of inadequacy of consideration, but on the ground of fraud, as evidenced thereby.^ Or, as has been elsewhere stated, mere inadequacy of price is not sufficient ground for avoiding a sale, unless it is so gross as to afford presumptive evi- ' Blachford v. Christian, 1 Knapp, 77 ; Malin v. Malin, 2 Johns. Ch. 238 ; Willis V. Jernegan, 2 Atk. 2.51 ; 1 Story, Eq. Jur. § 236 ; Gartside v. Isher- wood, 1 Bro. C. C. 559, 560, 561. * As to impositions upon foreigners, unable to read the English lan- guage, or other persons unable to read, in procuring their signatures to contracts, see Walker v. Ebert, 29 Wis. 194 (1871) ; Taylor v. Atchinson, 64 111. 156 ; Douglas v. Matting, 29 Iowa, 498 ; Whitney v. Snyder, 2 Lans. 477. Walker v. Ebert was a suit upon a note by a bond Jide indorsee for value against the maker : and the defendant was allowed to show that he could not read English, and had been deceived as to the character of the instrument. See also Gibbs v. Linabury, 22 Mich. 429 (1871). " Davidson v. Little, 22 Penn. St. 215. In this case the court say: " Such gross inadequacy as there was in this case is very well calculated to fix upon the transaction a serious suspicion of its fairness. It is contrary to all our usual experience that a man should part with his property at five per cent, of its value, unless he was excessively weak or ignorant, or under the influence of some deception. But if the vendor was thoroughly acquainted with every fact which it was necessary fo. him to know ; if he was twenty- one years of age, and of sound mind; if there were no circunstanoes which gave the vendee an improper control over him, amounting to mental impris- onment ; if, in short, the vendee behaved honestly, and the vendor was able to act like a free man, with his eyes open, then the one had a right to sell, and the other to buy, on any terms they saw proper to agree upon. CHAP. XVIII.] CONTRACTS VOID ON ACCOUNT OF FRAUD. 581 dence of actual fraud, or is in fact coupled with fraud, sur- prise, ignorance, mistake, delusion, or imbecility.^ § 629. By the Roman law a distinction was made between cases of positive fraud or dolus malus, and cases where one had acquired an advantage over the other by sharpness and craftiness ; solertia or dolus bonus. As to tlie latter, the maxim was : In pretio emptionis el venditionis naturaliler lieet contra- hentibus se cireumvenire. § 630. So, also, by the Roman and Scottish law, the con- tract was only liable to reduction on account of fraud, where fraud was employed to induce a party to make a contract (ubi dolus dedit causam contractui) which he would not other- wise have made. Wliere the fraud is merely incidental to the contract, that is, when a party intending previously, and of his own accord, to enter into a contract, is merely deceived in modi contrahendi, the contract is not thereby vitiated, but the party defrauded has a claim for damages to the extent of his injury. This distinction does not, however, obtain in the common law, and is not admitted in equity.^ ' Parmelee «. Cameron, 41 N. X- 392 (1869). ^ In regard to the latter class, Pothler says : " Dans le for int^rieur, on doit regarder comme contraire ^ cette bonne foi, tout ce qui s'ecarte tant soit peu de la sinc6rit6 la plus exacte et la plus scrupudeuse : la seule dis- simulation sur ce qui concerne la chose qui fait I'objet du march^, et que la partie avec qui je contracte auroit int^ret de sgavoir, est contraire k cette bonne foi ; car puisqu'il nous est commande d'aimer notre prochain autant que nousmdmes, il ne pent nous fitre permis de lui rien cacher de ce que nous n'aurions pas voulu qu'on nous cachat, si nous eussions €t& a sa place. Dans le for ext^rieur, une partie ne seroit pas ecoutiie a se plalndre des ces 16g^res atteintes que celui avec qui il a contracte auroit donn^es a la bonne foi ; autrement il y auroit un trop grand nombre de conventions qui seroient dans le cas de la recision, ce qui donneroit lieu A trop de proems, et causeroit un derangement dans le commerce. II n'y a que ce qui blesse ouvertement la bonne foi qui soit, dans ce for, regarde comme un vrai dol, sufEsant pour donner lieu k la recision du contrat, tel que toutes les mauvaises manoeuvres et tons les mauvais artifices qu'une partie auroit employes pour engager I'autre i contractor ; et ces mauvaises manoeuvres doivent 6tre pleinement justifi^es." This doctrine seems also to obtain in the Scottish law. Pothier des Oblig. pt. 1, art. 3, n. 30, p. 19. It is perhaps unnecessary to say, that by the " for int6rieur," Pothier means the conscience, which is governed by principles of morality only ; while by the " for exterieur," he means the courts of law, which are governed solely by the practical law. 582 ILLEGAL CONTRACTS. [CHAP. XVIII. § 631. Fraud is of various kinds ; but by far the largest number of cases consist either in misrepresentation or con- cealment. We shall therefore divide the subject into these two classes : 1st. Misrepresentation ; 2d. Concealment. MISEEPRESENTATION. § 632. Where a party designedly misrepresents a certain fact, for the purpose of misleading and imposing upon the other party, to his injury, he is guilty of positive fraud ; dolum malum ad circumveniendiim} Properly speaking, a represen- tation is a statement, or assertion, made by one party to the other, before or at the time of the contract.^ Nor is it any '.Laidlawu. Organ, 2 Wheat. 178, 179; Pidcock v. Bishop, 3 B. & C. 605; Smith v. Bank of Scotland, 1 Dow, 272; 1 Story, Eq. Jur. § 192; Evans v. Bicknell, 6 Ves. 174, 182 ; Cochran v. Cummings, 4 Dall. 250 ; Prentiss v. Kuss, 16 Me. 30 ; Smith v. Richards, 13 Peters, 26 ; Murray v. Mann, 2 Exch. 538 ; Watson v. Poulson, 15 Jur. 1111 ; 7 Eng. Law & Eq. 585. " Behn v. Burness, 3 B. & S. 753. " Though it is sometimes contained in the written instrument, it is not an integral part of the contract ; and, con- sequently, the contract is not broken though the representation proves to be untrue; nor (with the exception of the case of policies of insurance, at all events marine policies, which stand on a peculiar anomalous footing) is such untruth any cause of action, nor has it any efficacy whatever, unless the representation was made fraudulently, either by reason of its being made ■with a knowledge of its untruth, or by reason of its being made dishonestly, with a reckless ignorance whether it was true or untrue. See Elliot v. Von Glehn, 13 Q. B. 632; Wheelton v. Hardisty, 8 El. & B. 232 ; on appeal, 8 ib. 285. " If this be so, it is difficult to understand the distinction which is to be found in some of the treatises, and is in some degree perhaps sanctioned by judicial authority (see Barker, appellant, Windle, respondent, 6 El. & B. 675, 680) , that a representation, if it differs from the truth to an unreason- able extent, may afl'ect the validity of the contract. ^Vhere, indeed, the misrepresentation is so gross as to amount to sufficient evidence of fraud, it is obvious that the contract would on that ground be voidable. " Though representfitions are not usually contained in the -wiitten instru- ment of contract, yet they sometimes are. But it is plain that their insertion therein cannot alter their nature. A question however may .arise, whether a descriptive statement in the written instrument is a mere representation, or whether it is a substantive part of the contract. This is a question of construction which the court, and not the jury, must determine. If the CHAP. XVIII.] MISREPRESENTATION. 583 matter by what means such misrepresentation is effected, whether by silence, by acts, or by words or signs, or artifices court stould come to the conclusion that such a statement by one party was intended to be a substantive part of his contract, and not a mere represen- tation, the often discussed question may, of course, be raised, whether this part of the contract is a condition precedent, or only an independent agree- ment, a breach of which will not justify a repudiation of the contract, but will only be a cause of action for a compensation in damages. In the con- struction of charter-parties, this question has often been raised, with reference to stipulations that some future thing shall be done or shall happen, and has given rise to many nice distinctions. Thus, a statement that a vessel is to sail, or be ready to receive a cargo, on or before a given day, has been held to be a condition (see Glaholm v. Hays, 2 Man. & Grang. 257 ; Oliver v. Fielden, 4 Exch. 135 ; Croockewit v. Fletcher, 1 H. & N. 893 ; Seeger v. Duthie, 8 C. B. (n. s.) 45) ; while a stipulation that she shall sail with all convenient speed, or within a reasonable time, has been held to be only an agreement (see Tarrabochia v. Hickie, 1 H. & N. 183; Dimech V. Corlett, 12 Moo. P. C. C. 199; Clipshara v. Vertue, 5 Q. B. 265). But with respect to statements in a contract descriptive of the subject-matter of it, or of some material incident thereof, the true doctrine, established by principle as well as authority, appears to be, generally speaking, that if such descriptive statement was intended to be a substantive part of the con- tract, it is to be regarded as a warranty, that is to say, a condition on the failure or non-performance of which the other party may, if he is so minded, repudiate the contract in toto, and so be relieved from performing his part of it, provided it has not been partially executed in his favor. If, indeed, he has received the whole or any substantial part of the consideration for the promise on his part, the warranty loses the character of a condition, or, to speak perhaps more properly, ceases to be available as a condition, and becomes a warranty in the narrower sense of the word; viz., a stipulation by way of agreement, for the breach of which a compensation must be sought in damages (see Ellen v. Topp, 6 Exch. 424-441 ; Graves v. Legg, 9 Exch. 709-716 ; adopting the observations of Serjeant Williams on the case of Boone v. Eyre, 1 H. Bl. 273, note a, in 1 Saund. 320 d, 6th ed. ; Elliot v. Von Glehn, 13 Q. B. 632). Accordingly, if a specific thing has been sold, with a warranty of its quality, under such circumstances that the property passes by the sale, the vendee having been thus benefited by the partial execution of the contract, and become the proprietor of the thing sold, cannot treat the failure of the warranty as a condition broken (unless there is a special stipulation to that effect in the contract : see Bannerman v. White, 10 C. B. (x. s.) 844) ; but must have recourse to an action for damages in respect of the breach of warranty. But in cases where the thing sold is not specific, and the property has not passed by the sale, the vendee may refuse to receive the thing proffered to him in performance of the contract, on the ground that it does not correspond with the descriptive statement, or in 584 ILI,EGAI, CONTRACTS. [CHAP. XTIII. of any kind ; it is fraud, if the party upon whom they are practised be actually deceived thereby.^ Again, any material misrepresentation, although it be not embodied in the contract, is considered as a constructive or legal fraud, if it be known by the person making it to be false. Nor would it seem to be necessary to prove a fraudulent intent or motive on his part ; for if a person be actually deceived by a misrepresentation, the practical result is the same, whether it were a wilful fraud or not. It would also seem, upon general principles, that where one party to a contract suffers injury from the false represen- tation of the other party in respect to a material fact, he who has thereby occasioned the injury should bear the loss, whether his statement were known to him to be false, or were made through ignorance, mistake, or carelessness, and supposed to be true, — on the plain ground, that before one party under- takes to make a material statement vital to the contract and for his own interest, he is bound to ascertain whether it is true or false. This rule should of course be limited to cases where the false statement is m respect to a fact of which the party making it professes to have knowledge, and should not extend to statements merely of belief or opinion, made in good faith. But if a person assume to know a material fact, when he does not know it, and falsely represent it, it is difficult to see why he should not be responsible for the injury occasioned thereby, whether his representation were in good faith or not. The good faith seems to be of no consequence : it is the incorrectness of the statement which has induced the injury, and operated as a legal fraud. No person in making a contract is authorized to state a matter merely of belief as a matter of fact of which he has knowledge, — if he do so, and the fact he states be ma- terial, and operate as a distinct inducement to the contract, he otliur words, that the condition expressed in the contract has not been per- formed. Still, if he receives the thing sold, and has the enjoyment of it, he cannot afterwards treat the descriptive statement as a condition, but only as an agieeuient, for a breach of which he may bring an action to recover damages." ' 3 Black. Comm. 166 ; 1 Story, Eq. Jur. § 202 ; 2 Kent, Comm. 482 ; Dig. Lib. 2, tit. 14, 1. 7, § 9 ; Dig. Lib. 18, tit. 1, 1. 43, § 2 ; Pothier, de Vente, 234, 237, 238 ; Cochran v. Cummings, 4 Dall. 250 ; Warner v. Daniels, 1 Woodb. & M. 91. As to the necessity of notice that the contract is repu- diated, see Ripley v. Ilazelton, 3 Daly, 329. CHAP. XVIII.J MISREPRESENTATION. 585 should be responsible therefor.^ As regards third persons not privy to the contract, and deriving no interest therefrom, it may well be said that they should only be responsible' for statements known by them to be false, or made in bad faith ; but as regards the parties themselves, the case would be different. The parties have no such right to rely on the gratuitous representations of third persons, that they have to rely upon the representations of each other. In the one case, the statement is without a consideration to support it ; in the other, the statement operates as inducement and consideration to make the contract. It cannot be said, however, that this doctrine is clearly settled.^ ' Fisher v. Mellen, 103 Mass. 603 (1870). The party making the representations must have known or had reason to believe them false : Ober- lander v. Spiess, 45 N. Y. 176 (1871); Meyer v. Amidon, ib. 169; unless he makes them as of matters within his personal knowledge, as distinguished from opinion or belief. See Bennett v. Judson, 21 N. Y. 238 ; Marsh v. Falker, 40 N. Y. 562. ^ This doctrine has undergone many fluctuations, and the cases are- so contradictory, that it is impossible to lay down any rule as a settled one. Wherever the misrepresentation is embodied in the contract, there is no doubt that it will vitiate the contract, whether it be wilful or not. But where the misrepresentation is not embodied in the contract, there seems to be a great conflict of authorities as to whether it is or is not necessary, that a person, who makes a misrepreseiatation, should make it with knowledge of its falseness', in order to enable the other party deceived to avoid the contract. In Pawson v. Watson, 2 Cowp. 785, one of the earliest cases, which was an action on a policy of insurance, alleged to have been made on a false verbal misrepresentation. Lord Mansfield said: "There is no distinction better known to those who are at all conversant in the law of insurance, than that ■which exists between a warrmity or condition which makes part of a written policy, and a representation of the state of the case. Where it is a part of the written policy, it must be performed ; as if there be a warranty of convoy, there it must be a concoy ; nothing tantamount will do, or answer the pur- pose ; it must be strictly performed, as being part of the agreement ; for there it might be said, the party would not have insured without convoy. But as, by the law of merchants, all dealings must be fair and honest, fraud infects and vitiates every mercantile contract. Therefore, if there is fraud in a representation, it will avoid the policy, as a fraud, but not as a part of the agreement. If, in a life policy, a man warrants another to be in good health, when he knows at the same time he is ill of a fever, that will not avoid the policy ; because by the warranty he takes the risk upon himself. But if there is no warranty, and he says, ' the man is in good health,' when in fact he knows him to be ill, it is false. So it is, if he does not know whether he is well or ill ; for it is equally false to undertake to say that which he knows 586 ILLEGAL CONTRACTS. [CHAP. XVIII. On the contrary, although it is asserted by many of the most distinguished judges, it is denied in most of the late cases in nothing at all of, as to say that is true ■which he knows is not true." In Hodgson V. Richardson, 1 W. Bl. 463, Yates, J., says: "The concealment of material circumstances vitiates all contracts upon the principles of natural law.'' In Haycraft v. Creasy, 2 East, 92, the question first directly arose, as to whether the knowledge of the person making a representation, that it was false, was necessary to constitute a fraud. In this case Lord Kenyon said : " It was enough to state that the case rested on this, that the defendant affirmed that to be true withiu his own knowledge which he did not know to be true. Thi5i is fraudulent, not perhaps in that sense which affixes the stain of moral turpitude on the mind of the party, but falling within the notion of legal fraud, such as is presumed in all the cases within the statute of frauds. The fraud consists, not in the defendant's saying that he believed the matter to be true, or that he had reason so to believe it, but in asserting positively his knowledge of that which he did not know. There are, it is true, some duties of imperfect obligation, as they are called, the breach or neglect of which will not subject a party to an action. If I know that one in whose welfare I am interested is about to marry a person of iid'amous character, or to enter into commercial dealings with an insolvent, it is my duty to warn him ; but no action lies if I omit it ; but if any one becomes an actor in de- ceiving another ; if he lead him by any misrepresentations to do acts which are injurious to him ; I learn from all religious, moral, and social duties that such an action will lie against him to answer in damages for his acts. And when I am called to point out legal authorities for this opinion, I say that this case stands on the same grounds of law and justice as the others which have been decided in this court on the same subject." In Schneider v. Heath, 3 Camp. .oUO, Sir James Mansfield said : "It signifies nothing whether a man represents a thing to be different from what he knows it to be, or whether he makes a representation which he does not know, at the time, to be true or false, if in point of fact it turns out to be fal>e." So, also, ilr. Cliief Justice Best, in Adamson v. Jarvis, i Bing. 6l), sa^s: " He who affirms either what he does not know to be true, or knows to be false, to another's prejudice and his own gain, is, both in morality and law, guihy of falsehood, and must answer in damages."' Again, the House of Lords held the same doctrine in the case of Humphrys v. Pratt, 5 Bligh (x. s.), 154. So also in Railton v. Mathews, 10 CI. cfe Finn. 931, there is a dictum of Lord Tottenham to the same effect. In Cornfoot r. Fowke, 6 j\[. & "\V. 3.38, there was a difference of opinion among the judges. Tliis was a question as to whether a misrepresentation as to certain le.i-^cd premises, which was made by an agent innocently, while his principal knew that tlie representation was false, would avoid the lease. Mr. Baron Parke (with whom were the majority of tlie court) held that it would not: he said : "It is, I think, justly said, that it is not enough to support the plea that tlic representation is untrue ; it must be proved to have been fraudulently made. As this representation is CHAP. XVIII.] MISREPRESENTATION. 587 England. It may be said to be established, that a contract will be invalidated by any misrepresentation made either with not embodied in the contract itself, the contract cannot be affected, unless it be a IVauduleiit representation, and that is the principle on which the plea is fovuided. Now the simple facts, that the plaintiff knew of the existence of the nuisance, and that the agent, who did not know of it, represented that it did not exist, are not enough to constitute fraud ; each person is inno- cent, because the plaintiff makes no false representation, and the agent, though he makes one, does not know it to be false ; and it seems to me to be an untenable proposition that if each be innocent, the act of either or both can be a fraud." Lord Abinger, on the contrary, said, after citing the cases of Williamson v. Allison, 2 East, 446, and Hodgson v. Richardson, 1 W. Bl. 463 : " Nothing is more certain than that the concealment or misrepre- sentation, whether by principal or agent, by design or by mistake, of a material fact, however innocently made, avoids the contract on the ground • of a legal fraud. But though I consider this ease as coming fully within the meaning of a legal fraud, even if the agent is presumed to be ignorant of the falsehood of his misrepresentation, I am very far from conceding that it is a case void of all moral turpitude." In Smout v. Ilbery, 10 M. & W. 1, the same court held a different doctrine, and agreed with Lord Abinger. In this case, Baron Alderson said : " There is a third class, in which the courts have held that where a party making the contract as agent bona fide believes that such authority is vested in him, but has in fact no such authority, he is still personally liable. In these cases, it is true the agent is not actuated by any fraudulent motives, nor has he made any statement which he knows to be untrue. But still his liability depends on the same principles as before. It is a wrong, differing only in degree, but not in its essence, from the former case, to state as true what the individual making such statement does not know to be true, even though he does not know it to be false, but believes, without sufficient grounds, that the statement will ultimately turn out to be correct. And if that wrong produces injury to a third person, who is wholly ignorant of the grounds on which such belief of the supposed agent is founded, and who has relied on the correctness of his assertion, it is equally just that he who makes such assertion should be personally liable for its consequences." So also in Railton v. Mathews, 10 CI. & Finn. 934, the same doctrine was asserted on appeal to the House of Lords. This was a case where the respondents, though cognizant of certain material facts affect- ing an agent's credit, had not communicated them to the plaintiff, who became his cosurety on a bond to the respondents ; and in the course of the judgment Lord Cottenham said: " In my opinion there may be a case of improper concealment or non-communication of facts which ought to be com- municated, which would affect the situation of the parties, even if it was not wilful and intentional, and with a view to the advantage the parties were to receive." This doctrine was again reversed in Moens v. Heyworth, 10 M. & W. 147, and in Taylor v. Ashton, 11 M. & W. 401, and the rule was 588 ILLEGAL CONTRACTS. [CHAP. XVIII. intent to defraud, or with knowledge of its falsity ; but whether an action will lie for a misrepreseutation mistakenly made and stated, " That independently of any contract between the parties, no one can be made responsible for a representation of this kind [namely, that a certain banking company was in a prosperous condition] , unless it be fraudu- lently made." The doctrine of Smout v. llbery is, that there is liability for a misrepresentation without moral fraud. In Taylor v. Ashton, it is asserted that there must be knowledge that the misrepresentation is false, or, in other words, moral fraud. In Polhill v. Walter, 3 B. & Ad. 114, a middle ground was taken. The court thought that "corrupt motive" was not necessary, but a statement known to be untrue, though uttered with no intention to defraud, was sufficient to invalidate a contract. "If the defendant," Lord Tenterdcn says, " had good reason to believe his repre- sentation to be true, he would have incurred no liability, for he would have made no statement which he knew to be false ; a case very different from the present, in which it is clear that he stated what he knew to be untrue, though ■with no corrupt motive." But the misrepresentation in this case was by the defendant that he had authority to pass a bill, in consequence of which it was accepted, and as the court say, " he no doubt believed the acceptance would be ratified," but he should have " done no more than make a state- ment of that belief." There was, therefore, scarcely an intentional false- hood, and certainly not a corrupt motive. Yet the contract was held to be invalidated thereby. See also Foster v. Charles, 6 Bing. 396 ; 7 Bing. 105, in which Tindal, C. J., said: " It is fraud in law if a party makes repre- sentations which he knows to he false, and injury ensues, although the motives from which the representations proceeded may not have been bad ; the per- son who makes such representations is responsible for the consequences." The knowledge of the party making a representation that it is false is admitted to be necessary in Freeman v. B.aker, 5 B. & Ad. 806. In Evans v. Collins, 5 Q. B. 804, the sheriff brought an action against an attorney for false repre- sentation as to the identity of a person to be taken in execution by him, in consequence of which he arrested the wrong person, and was forced to pay damages, and the defendants pleaded that they had reason to believe their representation to be true, and made it in good faith ; and the jury found for the defendants on the issue joined on this plea. Lord Denman, however, gave judgment for the jjlaintiff, notwithstanding the verdict, and said: "One of two ]icrsons has suifei-ed bythe conduct of the other. The sufferer is wholly free from blauie ; but tlic party who caused his loss, though charged neither with fraud nor with negligence, must have been guilty of some fault when he made a false representation. He was nut bound to make any state- ment, nor justified in making any which he diil not know to be true; and it is just that he, not the party whom he has misL.'d, should abide the conse- quence of his misconduct. The allegation that the defendant know his rep- resentation to be false is, therefore, immaterial." This judgment, however, was overruled by the Court of £,\chequer (Collins v. Evans, 5 Q. B. 820), CHAP. SVIII.J MISREPRESENTATION. 589 without intention to defrand, but nevertheless completely false, is rendered doubtful by the late cases. But in all cases of this on the ground that there was no fraud, and that the representation was honestly made. See also Fuller v. Wilson, 3 Q. B. 58, in which Lord Den- man had previously asserted the same doctrine — which had been also over- ruled, in error on other points, by the Court of Exchequer, in Wilson v. Fuller, 3 Q. B. 68. See Lord Denman's remarks in Barley v. Walford, 9 Q. B. 206. In Rawlings v. Bell, 1 C. B. 959, Tindal, C. J., said: "On the part of the plaintifF it was contended that the falsehood of the statement was sufficient to support the action, although it was made without any inten- tion to mislead, and without any knowledge of its falsehood. But it seems to us that a statement false in fact, but not false to the knowledge of the party making it, — as in Polhill v. Walter, 3 B. & Ad. 114, — nor made with any intention to. deceive, will not support an action, unless from the nature of the dealing between the parties, a contract to indemnify can be implied. " In this case the I'ight to maintain the action rests upon the alleged assertion by the wife that she had a right to distrain. But there could be no retainer of the plaintiff to distrain given by wife, nor any contract by her to indemnify him. Her representation, therefore, being made honestly, and without knowledge of its falsehood, was not sufficient to give a right of action." Again, the late case of Ormrod v. Huth, 14 M. & W. 651, which was an action on the case against the defendants, who were dealers in cotton, for fraud, in representing certain samples as fair, which were not, the court said : ' ' The rule which is to be derived from all the cases appears to us to be, that where, upon the sale of goods, the purchaser is satisfied without requiring a warranty (which is a matter for his own consideration), he cannot recover upon a mere representation of the quality by the seller, unless he can show that the representation was bottomed in fraud. If, indeed, the representation was false to the Icnowledge of the party making it, this would, in general, be conclusive evidence of fraud ; but if the repre- sentation was honestly made, and believed at the time to be true by the party making it, although not true in point of fact, we think this does not amount to fraud in law ; but that the rule of caveat emptor applies, and the repre- sentation itself does not furnish a ground of action ; and although the cases may in appearance raise some difficulty as to the effect of a false assertion or representation of title in the seller, yet it will be found on examination that in each of those cases there was either an assertion of title embodied in the contract, or a representation of title which was false to the knowledge of the seller. The rule we have drawn from the cases appears to us to be supported so clearly by the early as well as the moife recent decisions, that we think it unnecessary to bring them forward in review, but satisfy ourselves with saying that the exception must be disallowed, and the judgment of the Court of Exchequer affirmed." In these two last cases it will be perceived that the representation was merely of opinion, and one was a sale where the doctrine of caveat emptor applied, and the party had no legal right to rely 590 ILLEGAL CONTRACTS. [CHAP. SVIII. kind, where the misrepresentation is purely accidental and without fraudulent design, it is not necessary to consider it to on the statement. In Thorn v. Bigland, 8 Exch. 725 ; 20 Eng. Law & Eq. 470, which was an action on a contract of sale, in which fraudulent misrep- resentation was alleged. Baron Parke said: "The law is perfectly settled, that, independently of duty, no action will lie for a false misrepresentation unless it is made by a person knowing it to be untrue, or with a fraudulent intention to induce another to act on the faith of, and alter his position to his damage. The law is so settled by Collins v. Evans, 5 Q. B. 820, and Ornirod v. Huth, 14 M. & W. 651. "Was then this statement by the defend- ant false and fraudulent within this description? I see no fraud at all. The account he gave is true so far as it goes, but it omits a part. It is merely inaccurate." The question in this case, it will be observed, ^rose upon a contract of sale, in respect to which the doctrine of caveat emptor applies. Mr. Justice Story, however, in his Commentaries on Equity says : ' ' Whether the party thus misrepresenting a material fact knew it to be false, or made the assertion without knowing whether it were true or false, is wholly immaterial ; for the affirmation of what one does not know or believe to be true is equally, in morals and law, as unjustifiable as the affir- mation of what is known to be positively false. And even if the party inno- cently misrepresents a material fact by mistake, it is equally conclusive ; for it operates as a surprise and imposition upon the other party." See also Doggett V. Emerson, 3 Story, 7;32, and Hough v. Richardson, 3 Story, 690, in which Mr. Justice Story affirmed the same doctrine. See also Daniel v. Mitchell, 1 Story, 172 ; Attwood v. Small, 6 CI. & Finn. 232 ; Farnam v. Brooks, 9 Pick. 213 ; Ainslie v. jMedlycott, 9 Yes. 21 ; Graves v. White, 2 Freem. 57 ; Pearson v. Morgan, 2 Bro. C. C. 389 ; Burrowes v. Lock, 10 Ves. 475 ; De Manneville v. Crompton, 1 Ves. & B. 354 ; 1 Marsh, on Ins. B. 1, ch. 10, § 1 ; Ex parte Carr, 3 Ves. & B. Ill ; M'Ferran v. Taylor, 3 Cranch, 270 ; Rosevelt v. Fulton, 2 Cow. 184 ; 1 Story, Eq. Jur. § 193. In Tryon v. Whitmarsh, 1 jNIct. 1, 9, in an action for a deceitful representa- tion that a person was entitled to credit, it was held that it must be proved that the defendant did not believe his representation to be true, and the question whether he made his statement bond fide was for the jury. This, however, was from the nature of the case a mere statement of opinion. In Lobdell V. Baker, 1 I\Iet. 201, the rule is clearly laid down by Mr. Justice Wilde, " Where a party affirms either that which he knows to be false, or does not know to he true, to another's loss and his own gain, he is responsible in damages for the injury occasioned by such falsehood. This is a very just and reasonable principle, and is well established." This case was re- affirmed in 3 Met. 469. In Stone v. Denny, 4 Met. 161, this case is again commented on by the court, and it is said that " fraud will be inferred when the party makes a representation which he knows to be false, or as to which he has no knowledge or information, and no grounds for expressing his belief; and in such cases the party would be held liable for his false repre- CHAP. XTIII.J MISREPRESENTATION. 591 be a fraud, since, if it be made by mistake, it would avoid the contract, if it should touch its essence, on the ground of a want sentation ; " and the ruling of the Chief Justice in a previous trial was supported, namely, "that an unqualified affirmation, or as of his own knowledge, of the correctness of the schedule, made by the defendant, he not knowing whether it was correct, with a view to induce the plaintiff to make the purchase, if it proved false, was a fraud which would render the defendant liable.'' In Mason v. Crosby, 1 Woodb. & M. 853, which was a bill in equity claiming relief on account of fraud in the sale of real estate, Mr. Justice Woodbury says: "Nor is it material in this case whether or not either of the respondents or their agent knew to be false what was stated by any of them, provided he did state what was not true, and it was to a material point and was relied on. A vendor in cases like this is not in his own person or by another to throw firebrands, and say he is in sport, or make material statements which are untrue, and excuse himself by his own ignorance." The same doctrine is laid down in Smith v. Babcock, 2 Woodb. & M. 260 ; and Doggett v. Emerson, 1 Woodb. & M. 205 ; Buford v. Cald- well, 3 Mo. 335; Snyder v. Findley, Coxe (N. J.), 48, 78. In M'Ferran V. Taylor, 3 Cranch, 280, Mr. Chief Justice Marshall says : " That this misrepresentation is material, cannot be denied ; but it is contended by the defendant that it originated in mistake, not in fraud ; and as the country was at that time unknown to both the contracting parties, and the material object was to give the purchaser a right to take the land he had purchased out of the tract already located for the seller, an accidental error in the description of the place where the tract in contemplation of the parties lay, an error which could have had, at the time, no influence on the contract, ought not now to affect the person who has innocently committed it. " From the situation of the parties and of the country, and fi-om the form of the entry, it is reasonable to presume' that this apology is true in point of fact ; but the court does not conceive that the fact will amount to a legal justification of the person who has made the misrepresentation. He who sells property on a description given by himself, is bound to make good that description ; and if it be untrue in a material point, although the variance be occasioned by a mistake, he must still remain liable for that variance.'' In Russell v. Clark, 7 Cranch, 69, where a general letter of recommendation was written, it is held that if a representation concerning the credit of another be honestly made, its falsity does not render the person making it liable to an action ; and the ground upon which the decision is put is that such representations are necessarily matters of opinion, given as such and received as such. The same doctrine is held in Lord v. Goddard, 13 How. 198, 210, in a similar case, where a commercial letter of recommendation was written, on faith of which credit was given and a loss sustained. In Hammatt v. Emerson, 27 Me. 326, it was held, that in a contract of sale, a misrepresentation must have been known to be false to avoid the contract, and that fraudulent intent must appear, but the court say: "When one has 592 ILLEGAL CONTRACTS. [CHAP. XVIII. of mutual assent of the parties.^ For if a gross misrepresen- tation be made as to a material fact, it matters not whether it be treated as a constructive fraud, or as a mere mistake, the right of the deceived party to avoid it is the same.^ A ques- made a representation positively, or professing to speak as of his own knowledge, without having any knowledge on the subject, the intentional falsehood is disclosed, and the intention to deceive is also inferred." A similar rule was laid down in McDonald v. Trafton, 15 Me. 225 ; and Inger- soll V. Barker, 21 Me. 474. See also Allen v. Addington, 7 Wend. 1 ; Young V. Covell, 8 Johns. 25 ; Weeks v. Burton, 7 Vt. 67 ; Ewins v. Cal- houn, ib. 79 ; Lord v. CoUey, 6 N. H. 99. See also Boyd v. Browne, 6 Barr, 316 ; Hopper v. Sisk, Smith (Ind.), 102. And see, to the point that where material facts are falsely stated by a person as of his knowledge and not of his opinion only, he is liable therefor, Hazard i). Irwin, 18 Pick. 96 ; Stone V. Denny, 4 Jlet. 160 ; Doggett v. Emerson, 3 Story, 732 ; 1 Woodb. & M. 205 ; Lobdell v. Baker, 1 Met. 193 ; 3 Met. 469 ; Gough v. St. John, 16 'Wend. 646 ; Thomas v. IMcCann, 4 B. Monr. 601 ; Munroe v. Pritchett, 16 Ala. 785 ; Joice v. Taylor, 6 Gill & Johns. 54 ; M'Cormick v. Malin, 5 Blackf. 609 ; Lockridge v. Foster, 4 Scam. 570. 1 Fhght V. Booth, 1 Bing. N. C. 377 ; Farnam v. Brooks, 9 Pick. 233 ; M'Ferran v. Taylor, 3 Cranch, 270 ; Daniel v. Mitchell, 1 Story, 193 ; Hough V. Richardson, 3 Story, 691 ; Warner v. Daniels, 1 Woodb. & M. 91. ' Doggett V. Emerson, 3 Story, 73.". This was a bill in equity to set aside a purchase of land, made upon gross misrepresentation as to the kind and quality of timber contained thereon. Mr. Justice Story said: "Upon the first question it does not appear to me that there is any reasonable ground to doubt that the purchase of the plaintiff was made upon an entire credit given to the representations of Williams of the quantity and quality of the timber on the township. The plaintiff resided in Boston, and, con- fessedly, had no knowledge of timber lands, and had never seen the town- ship. He must, therefore, have placed implicit reliance upon the statements of Williams. Now it is quite immatei-ial, in a case of this sort, whether Williams was himself at once the deceiver and the deceived. The question is not whether he acted basely and falsely, but whether the plaintiff pur- chased upon the faith of the truth of his representations. If the plaintiff did so purchase, then, upon the settled principles of courts of equity, the bargain ought to be set aside as founded upon gross misrepresentation and gross mistake, going to its veiy essence and objects. The whole doctrine turns upon this, that he who misleads the confidence of another by false statements in the substance of a purchase shall be the sufferer, and not his victim." See also Smith v. Babcock, 2 Woodb. & M. 246 ; M'Ferran v. Taylor, 3 Cranch, 270 ; Buford v. Caldwell, 3 Mo. 335 ; Munroe v. Prit- chett, 16 Ala. 785 ; Collins v. Denison, 12 Met. 549 ; Wallace v. Stone, 38 Vt. 607 (1866). CHAP. XVIII.] MISREPBESENTATION. 593 tion of this kind came before the House of Lords m a very recent case.^ The appellants having been induced to take shares in a banking company through a report of the directors representing the company to be in a flourishing condition, which proved to be false, sought to escape the consequences of their contract by reason of the alleged misrepresentation. But they were not allowed to do so. The Lord Chancellor said : " As regards that case of misrepresentation, it is unnecessary to consider how far the law would be applicable to a case of this description ; because, in point of fact, we find nothing whatever upon the evidence before us to satisfy us that any misrepresentation was made to their knowledge, or with such a degree of carelessness and negligence on their part, ... as to amount to a necessary implication of knowledge on their part of the representations being false. All that we have before us is this, that they did make a very flourishing report of the state of the accounts. It is said, and it is admitted, that there were certain debts which were assumed, before the representation was made, to be good, and which now have turned out to be bad. Not one word is told us, nor any suggestion made, as to the directors having any knowledge whatever of the debts which were reckoned to be good at the time when the repre- sentations were made, being bad." But in another recent case, before the House of Lords,^ Lord Cairns says : " I apprehend it to be the rule of law, that if persons take upon themselves to make assertions as to which they are ignorant whether they are true or untrue, they must, in a civil point of view, be held as responsible as if they had asserted that which they knew to be untrue. Upon that part of the case, my lords, I apprehend that there is no doubt." ^ § 633. The misrepresentation must, however, be in regard to some material fact, operating as an inducement or considera- tion to the contract. Thus, if a party should ofier an estate for ' Jackson v. Turquand, Law R. 4 H. L. 305 (1869). = Eeese River Silver Mining Co. v. Smith, ib. 64 (1869). ' See also Oakes v. Turquand, Law R. 2 H. L. 325 (1867) ; Henderson V. Royal Britisli Bank, 7 El. & B. 356 (1857) ; Venezuela Ry. Co. ». Kisoh, Law R. 2 H. L. 99 (1867) ; Barber v. Meyerstein, Law R. 4 H. L. 317 (1870). VOL. 1. 38 594 ILLEGAL CONTRACTS. [CHAP. XVIJI. sale, representing at the time that it contained a valuahle mine, and thereupon, induced by this fact, some person should buy the land, and the representation should prove false, the contract for the sale, or the sale itself, if completed, would be avoided for fraud ; for the misrepresentation touches the very essence of the contract. ^ So, also, if a person in the sale of a vessel should falsely represent her to be copper-fastened ; or to be newly rigged ; or to have been built within a year, — the vendee would not be bound by the contract.^ So, also, false representations that a steam-engine was of twenty-horse power, and fit for mining purposes, that it was free from rust, and was in good oi-der, and had been so certified to be by engineers, would be sufficient to vitiate a contract of sale made on the basis thereof, because the misrepresentations are vital thereto.^ So, also, where, in the treaty for the purchase of a house, the defendant affirmed that the rent was diO per annum, when it was only =£20, it was held, that the falsity of the statement vitiated the contract.* But if the misrepresentation be in re- spect to an immaterial fact, which, if known to the purchaser, would not have affected his decision, it affords no ground to set aside the contract.^ Falsity, alone, is not a sufficient ground to avoid a contract, but it must work an injury ; ^ or, as it has ' Lowndes v. Lane, 2 Cox, 363 ; Daniel v. Mitchell, 1 Story, 172 ; 1 Domat, B. 1, tit. 2, § 1], art. 12; Di--. Lib. IS, tit. 1, 1. 54; Jarvis v. Duke, 1 Vera. 19 ; 1 Story, Eq. Jur. § 196. ^ Lowndes v. Lane, 2 Cox, 363 ; Shepherd v. Kain, 5 B. & Al. 240 ; Fletcher v. Bowsher, 2 Stark. 601. ^ Hazard v. Irwin, 18 Pick. 95. * Rlsiiey V. Selb}-, 1 Salk. 211. " 1 Story, Eq. Jur. § 190; Morris Canal Co. v. Emmett, 9 Paige, 168; Stebbins v. Eddy, 4 Mason, 414; Winch f. Winchester, 1 Ves. & B. 375; Geddes v. Pennington, 5 Dow, 159 ; Camp v. Pulver, 5 Barb. 91 ; Green v. Gosden, 4 Scott, N. K. 13 ; 3 Man. & Grang. 446 ; Vane v. Cobbold, 1 Exch. 798. " Fellowes v. Lord Gwydyr, 1 Euss. & ]Myl. 83; Foster v. Charles, 6 BInL:-. 39i;; 7 Bing. 105; Vernon v. Keys, 12 East, 637; 2 Kent, Connn. 490. A person employed to serve liy the defendant as his substitute in the army may recover the agreed compensation, although through the defendant's advice he deceived the officers as to his name, age, and place of birth, but nevertheless served out the whole period of his enlistment. Servis v. Cooper, 4 Vroom, 68 (1868). CHAP. XVIII.] MISREPRESENTATION. 595 been expressed, " fraud without damage, or damage without fraud, gives no cause of action, but where these two concur and meet together, there an action lieth." ^ The question, however, wlietlier a representation is or is not material in a given case, is for the determination of a jury.^ § 634. Yet in all cases of misrepresentation, it is requisite that the party claiming to set aside the contract should actu- ally have been deceived by it, to his injury ; for if he knew the statement to be false at the time when it was made, it could not have influenced his decision, and the reason for which such contracts are treated as void falls to the ground. So, also, if the representation be productive of no injurious results, its mere falsity constitutes no reason for setting the contract aside ; for a mere intention to defraud, not carried into effect, will not vitiate a contract.^ If, therefore, a person should rep- resent cloth to be blue, and the buyer should see that it is murrey ; or should represent a house to be in good order, and the lessee should see that several windows are broken out ; he could not be bound to make good such representation, simply because it could not have deceived the party to whom it was made. But if it actually operate as a deception, — as if the person to whom such a statement is made should be blind, or should actually not perceive the statement to be false, — it will be a fraud. § 635. Again, every actual misrepresentation, which is ma- terial, is a fraud, although it be apparently true. Thus, if words be used in a double sense, — as if articles be repre- sented to be silver, when they are German silver, and be pur- chased in the belief that they are Mexican silver, — the contract would be void. So, also, where artifice is employed for the purpose of deception, or where a trick is played, by which a person is deceived into making a contract wholly different from what he intended, the fraud and surprise would vitiate it. • Croke, J., 3 Bulst. 95. ' Lindenau v. Desborough, 8 B. & C. 586 ; Westbury v. Aberdein, 2 M. & W. 267. 3 Foster v. Charles, 6 Bing. 396; 7 ib. 105; 2 Kent, Coram. 490; Pothler de Vente, n. 210 ; Vernon v. Keys, 12 East, 637, 638 ; 1 Story. Eq. Jur. § 202, 203. 596 ILLEGAL CONTRACTS. [CHAP. XVIII. Thus, where A. agreed to buy a horse, and to give a barleycorn for the first nail, and to double it for every nail in the horse's shoes, and an action was brought for the price, it was held that a bargain in such terms was void.^ So, also, where the de- fendant, being about to furnish the plaintifFs son with goods on credit, inquired of the defendant by letter, whether his son had, as he asserted, £300 of his own property, and the de- fendant answered that he had, — the fact being that he had lent his son X300 on his promissory note, payable with interest, on demand, — and the son afterwards became insolvent, it was held that this was a misrepresentation, for which the defendant was liable in damage to the plaintiff.^ Some of these cases seem to have been determined on the ground that there never was any agreement, because the parties meant different things when they made a contract : there was no assent of the minds. § 636. Yet, though the reitresentation be even wilfully false, in order to found a right in the party to whom it is made to avoid it, it should be of such a nature that he had a clear right to rely upon it, as an actual and undisputed fact ; for if he had not, it was his own folly and indiscretion to trust to a statement, made under no legal obligation or pledge for its ac- curacy ; and the policy of the law, which encourages vigilance and caution, will not assist him.^ The question therefore arises, what representations made by one party has the other a right to rely upon. And here the great distinction is between representations as to matters of fact, and as to matters of opinion or judgment. Every misrepresentation of a material fact is fraudulent in law, if the party to whom it was made did not have equal means of knowing or ascertaining its falsity ; or if it be made in such a manner as to induce him to forbear making any inquiries in respect to it.* Thus, in the case of ■ James v. Morgan, 1 Lev. 111. See also Smith on Contracts, p. 99, and the remarks on the case of Thornborow v. Whitacre, 2 Ld. Kaym. 1165. ' Corbett v. Brown, 8 Bing. 35 ; 1 Moo. & S. 86 ; 5 C. & P. 363. ^ Trower v. Newcome, 3 Merlv. 704; Scott v. Hanson, 1 Sim. 13 ; Fen- ton o. Browne, 14 Ves. 144; 2 Ivent, Coram. 484-487, 4th ed. ; Davis e. Meeker, 5 Johns. 354 ; Harvey v. Young, Yelv. 21 ; 1 Story, Eq.- Jur. § 199 ; Taylor v. Fleet, 1 Barb. 474. ■• Vernon v. Keys, 12 East, 637 ; Hazard v. Irwin, 18 Pick. 95 ; Attwood CHAP. XVin.] MISREPRESENTATION. 59T sales of personal property, the rule of caveat emptor generally obtains, by which every purchaser, who makes a naked con- tract of sale without either an express or implied warranty, is vinderstood to depend solely on his own judgment ; since, if he do not choose to rely on his own skill and judgment, he may require a warranty, or so frame his contract by embodying any representation therein as to render the seller responsible.^ Yet, if the seller make material misrepresentations, on faith of which the purchase is made, the law will not only not enforce the sale, in case the seller was guilty of wilful falsehood, but will create an implied warranty on his part that such state- ment is true, although it be neither embodied in the contract, nor made with fraudulent intent, provided it be in respect to a matter stated as a fact, of which the other has not equal means of knowledge with him.^ Thus, if the seller be a producer or manufacturer, and state that goods are of a certain quality, the law imports a warranty that such representation is true, be- cause, from his position, he has, or necessarily ought to have, more knowledge in respect of them than the buyer.* But if a purchaser, choosing to judge for himself, do not avail himself of the knowledge or means of knowledge open to him or his agents, he cannot claim to set the contract aside, on the ground that statements false in fact were made to him ; for the rule of V. Small, 6 CI. & Finn. 232 ; Hougli v. Richardson, 3 Story, 690 ; Smout v. Ilbery, 10 M. & W. 1 ; Haycraft v. Creasy, 2 East, 92. In the recent case of The National Exchange Co. v. Drew, 2 Macq. 103 (1855), it was held by the House of Lords that when a tottering joint-stock company, with a view to raise its shares in the market, represented the concern as most prosperous, and offered money to two of their shareholders to buy additional shares, saying, "You shall not be called upon for any further contribution till the stock can be sold at a profit ; " and the shares became worthless, it was held that the company could not even recover the money so advanced to the shareholders, and Cornfoot's Case was elaborately explained. ' Ormrod v. Huth, 14 M. & W. 651. '' Schneider v. Heath, 3 Camp. 506 ; Baglehole v. Walters, 3 Camp. 154 ; Mellish V. Motteux, Peake, 115 ; Bywater v. Richardson, 1 Ad. & El. 508 ; 2 Kent, Comm. 490 ; Jones v. Bright, 5 Bing. 533 : Brown ». Edgington, 2 Man. & Grang. 290 ; Smith v. Babcock, 2 Woodb. & M. 246. ^ Ibid. ; Jones v. Bright, 5 Bing. 633 ; Brown v. Edgington, 2 Man. & Grang. 290. 598 ILLEGAL CONTRACTS. [CHAP. XVIII. caveat emptor applies, and he must also prove that they were fraudulently intended. ^ Again, if the means of knowledge be within the reach of the purchaser, and he is nevertheless in- duced to forbear to employ them, by the statement of the seller, the contract would be voidable.^ The ground upon which all these doctrines proceed is, that ordinarily a man relies upon his own judgment and skill in making a purchase. But if he actually repose confidence in the statements of the vendor as to matters of fact material to the bargain, whether he be com- pelled to do so through the necessities of the case, — as when he has not the means of knowledge, — or be persuaded to do so by the seller, the reason for the rule fails, and an exception is, therefore, admitted.^ But if he have the means of knowledge, and do not choose to use them, he has himself only to blame for trusting implicitly to statements which the seller honestly m.akes. But a distinct assertion by the vendor of a patent- right, as to what was covered by the patent, with knowledge of its falsity and with intent to defraud the buyer, and on which the latter relies, avoids the contract, although the buyer might have discovered the fraud by searching the records of the patent-office.'' Of course, if the seller fraudulently misrepre- sent facts, or state facts to exist which he knows not to exist, his fraud would vitiate the contract, provided the misstatements were in respect to a material point." ' Pasley v. Freeman, 3 T. R. 57; Attwood v. Small, 6 CI. & Finn. 232; Hough v. Kifhardson, 3 Story, 690; Bagluhole v. Walters, 3 Camp. 154; Schneider v. Heath, 3 Camp. 506; Bluett v. Osborne, 1 Stark. 384; Mason V. Crosby, 1 Woodb. & M. 342. = Ibid. ; Vernon v. Keys, 12 East, 637 ; Attwood v. Small, 6 CI. & Finn. 232 ; Taylor v. Fleet, 1 Barb. 474 ; Smith v. Babcock, 2 Woodb. & M. 296 ; TuthiU 1). Babcock, ib. 298; Mason v. Crosby, 1 Woodb. & M. 342; Schneider v. Heath, 3 Camp. 506. ' Warner «. Daniels, 1 Woodb. & M. 90; Taylor v. Fleet, 1 Barb. 473 ; Collins V. Denison, 12 Met. 549 ; TuthiU v. Babcock, 2 Woodb. & M. 298. " David V. Park, 103 Mass. 501 (1870). And see Watson u. Atwood, 26 Conn. 313 ; Manning v. Albee, 11 Allen, 520 ; 14 Allen, 7 ; Brown v. Castles, 11 Cush. 348. * 1 Story, Eq. Jur. § 197; 1 Marshall on Ins. B. 1, ch. 10, § 2, p. 473; 1 Domat, B. 1, tit. 2, § 11, art. 3, 11, 12. See also 2 Kent, Comm. 484, 485 ; Taj'lor v. Ashton, 11 M. & W. 401 ; Cornfoot v. Fowke. 6 M. & W. 358. See ante, § 032, note ; Ormrod v. Huth, 14 M. & W. 651 ; Hazard CHAP. XVIII.] MISREPRESENTATION. 599 § 637. But where a statement is not made as a fact, but only as an opinion, the rule is quite different. Thus, a false repre- sentation as to a mere matter of opinion — as the quantity of wood on the land to be conveyed — does not avoid the contract.^ And representations of a promissory character as to the thing sold, relating to what it will be in the future, or so far as they are expressions of opinion, do not avoid a sale, unless known to be false, or made with intent to deceive.^ Ordinarily, a naked statement of opinion is not a representation on which a buyer is legally entitled to rely,^ unless perhaps in some special cases, where peculiar confidence or trust is created between the parties. The ground of this rule is probably the impractica- bility of attempting to discover by means of the rules of law the real opinion of the party making the representation, and also, because a mere expression of opinion does not alter facts, though it may bias the judgment. Mere expressions of opinion are not, therefore, considered so tangible a fraud as to form a ground of avoidance of a contract, even though they be falsely stated.* Thus, the common language of puffing and commend- ation, and the statements made at auction sales, where the article sold is equally open to the observation of both parties, though false in fact, and bad in morals, are not treated as frauds. But it would be otherwise if the character and quality of the commodity be disguised or concealed, so as to deceive and impose upon the buyer ; or if the value be enhanced by improper means, as if puffers and by-bidders be employed at auction sales. ^ A fortiori, if an honest opinion be given as to V. Irwin, 18 Pick. 105 ; Doggett v. Emerson, 3 Storj, 733 ; 1 Woodb. & M. 205. ' Longstore v. Jack, 80 Iowa, 298 (1870). " Pike V. Fay, 101 Mass. 134 (1869). ' Hazard v. Irwin, 18 Pick. 105 ; Evans v. Collins, 5 Q. B. 804, 820 Stebbins v. Eddy, 4 Mason, 414; Taylor v. Ashton, 11 M. & W. 401 Moens v. Heyworth, 10 M. & W. 147 ; Trower v. Newcombe, 3 Meriv. 704 Scott V. Hanson, 1 Sim. 13; Fenton u. Browne, 14 Ves. 144; Davis u. Meeker, 5 Johns. 354. ' Ibid. ^ 2 Kent, Coram. 482, 483, 484, 4th ed. ; Turner v. Harvey, Jacob, 178 ; 1 Story, Eq. Jur. § 201 ; Dig. Lib. 18, tit. 1, 1. 43; Bramley v. Alt, 3 Ves. C24 ; Smith v. Clarke, 12 Ves. 483 ; Twining v. Morrice, 2 Bro. C. C. 330 ; 600 ILLEGAL CONTKACTS. [CHAP. SVIII. the value of property sold, it will not afford a good ground to inralidate a contract, however ill-founded it may be.^ Yet, where a representation is made going to the essence of a con- tract, the party making it should be careful to state it as an opinion, and not as a fact of which he has knowledge, or he may be liable thereon. The question whether a statement was intended to be given as an opinion, and was so received, is, however, one for a jury to determine, upon the peculiar circum- stances of the case.^ But whenever a belief is asserted as in a fact which is material or essential, and which the person asserting knows to be false, and the statement is made with an intention to mislead, it is fraudulent, and affords a ground of- relief. Thus, where the vendor of a note asserted that he believed the maker to be responsible, wlien he knew he was not, and the vendee acted upon his representation of belief, it was held to be equivalent to an assertion that the maker was responsible.^ § 638. But there may be cases when especial confidence is reposed in the opinion of a party who is an expert, and who knows that his judgment is relied upon, wherein a false state- ment of opinion, artfully made, for the purpose of misleading the other party, might furnish sufficient ground to avoid a con- tract made on faith thereof.'* Thus, if a man of skill and judg- 1 Fonbl. Eq. B. 1, ch. 4, § 4, note c; Pickerings. Dowson, 4 Taunt. 785; Marquis of Townshend v. Stangroom, 6 Ves. 338; Bexwell v. Christie, 1 CoTvp. 395. See also Ward v. Center, 3 Johns. 271; Upton v. Vail, 6 Johns. 181; Kussell u. Clark, 7 Cranch, 92; Adams r. Paigt.', 7 Pick. 542; Pierce v. Jackson, 6 Mass. 242 ; Moore v. Tracy, 7 Wend. 229 ; Whittier v. Smith, 11 Mass. 211. See post, § 667. ' 1 Story, Eq. Jur. § 197 ; Hepburn !'. Dunlop, 1 "Wlioat. 189 ; 2 Kent, Comm. 485 ; Vernon v. Keys, 12 East, 632 ; Harvey v. Young, Yelv. 21 ; Jendwine v. Slade, 2 Esp. 572. = Lomi V. Tucker, 4 C. & P. 15 ; Power v. Barham, 4 Ad. & El. 473 ; Plill V. Gray, 1 Stark. 434; De Sewhanberg v. Buchanan, 5 C. & P. 343; Keatcs v. Cadogan, 10 C. B. 592 ; 2 Eng. Law & Eq. 318 ; Hazard t>. Irwin, 18 Pick. 95 ; Foster v. Caldwell, 18 Vt. 176. -'■ Foster w. Swasey, 2 Woodb. & M. 217. See also Stebbins v. Eddy, 4 Mason, 414. * 1 Story, Eq. Jur. § 198 ; 1 Pothier on Obllg. n. 17 to 20, and note a ; Pothier de Vente, n. 233 to 241 ; Hill v. Gi-ay, 1 Stark. 434, explained in Keates v. Cadogan, 10 C. B. 591 ; 2 Eng. Law & Eq. 318 ; 2 Kent, Comm. 482, 4th ed. ; Pilmore v. Hood, 5 Bing. N. C. 97 ; Pidcock v. Bishop, 3 B. & C. 605 ; Baglehole v. Walters, 3 Camp. 154 ; Schneider v. Heath, 3 Camp. CHAP. XVIII.] MISHEPEESENTATION. 601 ment in pictures, knowing that his judgment was depended upon, should represent a particular painting to be the work of one of the old masters, or should even falsely state that such was his opinion, with an intent to deceive the purchaser, and the latter should be induced by such statement to purchase the picture, the sale would probably be held to be void.^ But these cases are peculiar in their circumstances, and form an excep- tion to the general rule. § 639. Where a misrepresentation is embodied in a contract, the general rule is, that it will avoid the contract, if it be in a vital point. But "this rule is subject to the same modification as to misstatements of matter of fact, and as to matters of opinion. If the misstatement be in respect to a matter purely of opinion, it will not avoid the contract, and this question is for the decision of the jury.^ Thus, where words of descrip- tion are contained in a bill of parcels, or memorandum of sale, and the subject-matter does not answer to them, if they be stated expressly as opinion,^ or if they relate to a matter in re- spect to which, from its nature, only an opinion can be formed, their mere falsity will not vitiate the contract.* Thus, where a bill of parcels described certain pictures which were sold, to be " Four pictures, views in Venice, Canaletto," it was held, that it was properly left to the jury to say whether this was in- tended as an expression of opinion or not ; since upon such fact depended the liability of the seller.^ But if the descrip- 606 ; Pickering v. Dowson, 4 Taunt. 779, 784 ; Cornfoot v. Fowke, 6 M. & W. 359, 383 ; Wright v. Crookes, 1 Scott, N. R. 685 ; Laidlaw v. Organ, 2 Wheat. 178, 195 ; Mellish v. Motteux, Peake, 115 ; Arnot v. Bisooe, 1 Ves. 96 ; 2 Kent, Coimn. 482-484 (4th ed.), and note. ' 2 Kent, Comm. 482, 4th ed. ; 1 Story, Eq. Jur. § 198 ; Hill v. Gray, 1 Stark. 434 ; Pilmore v. Hood, 6 Bing. N. C. 97. ' Power V. Barham, 4 Ad. & El. 476 ; Jendwine v. Slade, 2 Esp. 573. •" Dunlop V. Waugh, Peake, 123. * See Story on Sales, § 358, and cases cited. ' Power V. Barham, 4 Ad. & El. 476 ; 6 Nev. & Man. 62 ; 8. C. 7 C. & P. 356. In Jendwine ». Slade, 2 Esp. 573, Lord Kenyon said: "It was impossible to make this the case of a warranty ; the pictures were the work of artists some centuries back, and there being no way of tracing the picture itself, it could only be matter of opinion whether the picture in question was the work of the artist whose name it bore, or not. What, then, does the catalogue import ? That, in the opinion of the seller, the picture is the 602 ILLEGAL CONTRACTS, [CHAP. XVIII. tion be in respect to a matter of fact, relating to the identity or quality of the subject of sale, which is susceptible of accurate knowledge, and especially if it be in respect to a fact which the seller is bound to know, its falsity would vitiate the con- tract, if it were material ; for in such a case it would be con- sidered as an express warranty .^ Within this last branch of the rule, nearly all the cases of sales come ; and where a fact is stated expressly in a contract, it must be clearly shown to be given and received as an opinion, or it will invalidate the contract.^ Thus, where a sale note was given in these words, ■work of the artist whose name he has affixed to it. The action in its present shape must go on the ground of some fraud in the sale. But if the seller only represents what he himself believes, he can be guilty of no fraud. The catalogue of the pictures in question leaves the determination to the judg- ment of the buyer, who is to exercise that judgment in the purchase." In Power V. Barham, Lord Denman, in commenting on the ease of Jendwine v. Slade, said : "I think that the case was correctly left to the jury. We must take the learned judge to have stated to them that the language of Lord Kenyon in Jendwine v. Slade, was merely the intimation of his opinion upon such a contract as was then before him. It may be true that, in the case of very old pictures, a person can only express an opinion as to their genuine- ness ; and that is laid down by Lord Kenyon in the case referred to. But the case here is, that pictures are sold with a bill of parcels, containing the words, ' Four pictures, views in Venice, Canaletto.' Now, words like these must derive their explanation from the ordinary way in which such matters are transacted. It was, therefore, for the jury to say, under all these cir- cumstances, what was the effect of the words, and whether they implied a warranty of genuineness, or conveyed only a description or expression of opinion. I think that their finding was right ; Canaletti is not a very old painter. But, at all events, it was proper that the bill of parcels should go to the jury with the rest of the evidence." See also Lomi v. Tucker, 4 C. & P. 15 ; Hill V. Gray, 1 Stark. 434 ; De Sewhanberg v. Buchanan, 6 C. & P. 343; Hough v. Richardson, 3 Story, 690. ' Winsor v. Lombard, 18 Pick. 60; Shepherd v. Kain, 5 B. & Al. 240; Hastings v. Lovering, 2 Pick. 214 ; Henshaw v. Robins, 9 Met. 83 ; Hazard V. Irwin, 18 Pick. 95 ; Budd v. Fairmaner, 8 Bing. 51. ^ Doggctt V. Emerson, 3 Story, 782. In this case Mr. Justice Story- said : " It appears to me that it is high time that the principles of courts of equity upon the subject of sales and purchases should be better understood, and more rigidly enforced in the community. It is equally promotive of sound morals, fair dealing, and public justice and policy, that every vendor should distinctly comprehend, not only that good faith should reign over all his conduct in relation to the sale, but that there should be the most scrupu- lous good faith, an exalted honesty, or, as it is often felicitously expressed, CHAP. XVIII.] MISEEPRESENTATION, 603 " Sold 2000 gallons prime quality winter oil," it was held, that, this being a misrepresentation as to a matter of fact, of the truth of which the seller might easily inform himself, it constituted a warranty which he was bound to make good.^ § 640. If, however, the bill of parcels or memorandum of sale in which the subject-matter is described also contain an express warranty as to particular qualities, and the warranty does not fail, the buyer must show that the description was false within the knowledge of the seller, to entitle him to re- cover. For an express warranty as to particular facts or qual- ities is considered as an implied exclusion of warranty as to every other fact or quality ; according to the maxim, " Expres- sio unius est exclusio alterius" ^ Thus, where a receipt was given in the following words, "Ree'd of A. D., £10 for a gray four-year-old colt, warranted sound," and the colt proved to be sound, but more than four years old, it was held, that the buyer could not recover for such falsity of description, without showing that the seller wilfully misled him, since the descrip- tion was evidently intended as identification.-' But whex-e the uberrima fides, in every representation made by him as an inducement to the sale. He should, literally, in his representation, tell the truth, the whole truth, and nothing but the truth. If his representation is false in any one substantial circumstance going to the inducement or essence of the bargain, and the vendee is thereby misled, the sale is voidable ; and it is usually im- material whether the representation be wilfully and designedly false, or ignorantly or negligently untrue. The vendor acts at his peril, and is bound by every syllable he utters, or proclaims, or knowingly impresses upon the vendee, as a lure or decisive motive for the bargain. And I cannot but believe, if this doctrine of law had been steadfastly kept in view, and fairly upheld by public opinion, the various speculations, which have been so sad a reproach to our country, would have been greatly averted, if not entirely suppressed, by its salutary operation." ' Winsor v. Lombard, 18 Pick. 60. See Fraley v. Bispham, 10 BaiT, 820 ; Richmond Trading Co. ». Farquar, 8 Blackf. 89 ; Osgood v. Lewis, 2 Harr. & Gill, 495 ; Lamb v. Crafts, 12 Met. 353 ; Wason v. Rowe, 16 Vt. 627. " Budd V. Fairmaner, 8 Bing. 51 ; Richardson «. Brown, 1 Bing. 344. ^ Budd V. Fairmaner, 8 Bing. 61. In this case, Tindal, C. J., said: " A written instrument was produced by the plaintiff to show the nature of the contract between him and the defendant, and we are to interpret that instrument like all others, according to the intention of the parties. The instrument appears to be a receipt for £10, for a ' gray four-year-old colt, 604 ILLEGAL C0NTEACT3. [CHAP. XVIII. memorandum, or receipt, or bill of parcels contains no ex- press warranty, the description itself creates an implied war- warranted sound.' I should say that, upon the face of this instrument, the intention of the parties was to confine the warranty to soundness, and that the preceding statement was matter of description only. And the difference is most essential. Whatever a party warrants, he is bound to make g'ood to the letter of the warranty, whether the quality warranted be material or not; it is only necessary for the buyer to show that the article is not according to the warranty ; whereas, if an article be sold by description merely, and the buyer aftenvards discovers a latent defect, he must go further, allege the scienter, and show that the description was false within the knowledge of the seller. And where there is an express warranty as to any single point, the law does not beyond that raise an implied warranty that the commodity sold shall be also merchantable. Therefore, in Parkinson v. Lee, 2 East, 313, upon a sale of hops by sample, with a warranty that the bulk of the com- modity answered the sample, although a fair merchantable price was given, it was held that the seller was not responsible for a latent defect, unknown to him, but arising from the fraud of the grower from whom he purchased. A party who makes a simple representation stands, therefore, in a very dif- ferent situation from a party who gives a warranty. And if so, how can I say that this distinction was not present to the mind of the defendant in this case? When he sells a gray four-year-old colt, warranted sound, he means to say that he will be responsible for the soundness, but that the rest is only matter of representation, for which he will not be answerable, unless it be shown to be false within his knowledge. Many cases have been referred to, and some stress has been laid on the effect of the word dedl when contained in a grant ; but, according to Lord Eldon, in Browning v. Wright, 2 Bos. & Pul. 21, words of that nature ' import a contract in law, the effect and mean- ing of which would be affected by the subsequent words of the indenture ;' and in the cases relied on for the plaintiff, the sellers had delivered com- modities essentially different from those which they had professed to sell." It will be observed that this case is purely one of interjjretation, and the doctrine as to description would seem to be intended to be confined to oases where there is a distinction made by the parties between the description and the warranty, like that which was before the court. The ground of the court will be more evident from the ojjinions of Mr. Justice Bosanquet and Mr. Justice Alderson, who both treat the case as proceedmg upon a manifest intention on the part of the vendor, as expressed in the memorandum, to distinguish between what he was willing to warrant, and what was mere description. The former says : "In every case where the contract appears on a written instrument, the instrument must be construed according to the intent of the parties. As, where the dealing is by a contract note, the article delivered must agree with the terms of the note ; or, where a ship is insured, it must correspond with the warranties contained in the policy. What is the instrument here P Not a contract of sale, but a mere receipt, describing an CHAP. XVIII.] MISREPRESENTATION. 605 raiity,and the buyer is not bound to prove wilful fraud.^ In the former case, the seller is understood to say, " I will war- rant that the subject-matter has certain qualities, but I will not warrant that it has any others." In the latter case he is considered, by implication, as saying, " I undertake to pledge myself that the subject-matter is what I describe it to be." § 641. It is not necessary that the misrepresentation should be made directly between the actual parties ; for if a party make a representation to one person in respect to a sale, and that representation is known by the vendor to constitute the basis of a subsequent sale to a person to whom it is communi- cated, it will be treated as if it were made directly by the ven- dor himself.^ Where, therefore, the defendant being about to sell a public-house, falsely represented to B. that the receipts were £180 a month, and B.,with the knowledge of the defend- ant, communicated this representation to the plaintiff, who be- came the purchaser, it was held that an action lay against the defendant at the suit of the plaintiff.^ So, also, if an agent make a misrepresentation which he was not authorized by his principal to make, the principal will be bound thereby, if he were a general agent, or if, being a special agent, he be held out to have a more enlarged authority.* § 642. An action will lie against an uninterested person for making a false and fraudulent representation of a fact as then antecedent contract. Are we to infer from the terms used, that the party had expressly contracted the animal should be four years old ? The collo- cation of the word warranted shows that such was not the intention of the parties. Richardson v. Brown proceeded on this principle, and Dickenson V. Gapp is almost the same case as the present. Interpreting this instru- ment, therefore, according to the intention of the parties, I think it clear that the warranty was confined to soundness." See Richardson «. Brown, 1 Bing. 344. ' Shepherd v. Kain, 5 B. & AI. 240; Winsor ». Lombard, 18 Pick. 60; Hogins V. Plympton, 11 Pick. 99 ; Power v. Barham, 6 Nev. & Man. 62 ; 8. C. 4 Ad. & El. 473 ; Hastings v. Lovering, 2 Pick. 214. See post, Sales. ' Crocker v. Lewis, 3 Sumner, 8 ; Barden v. Keverberg, 2 M. & W. 63, 64. 3 Pilmore v. Hood, 5 Bing. N. C. 97. See also Hill v. Gray, 1 Stark. 434; Langridge v. Levy, 2 M. & W. 519; Medbury b. Watson, 6 Met, 247-260. « Lobdell V. Baker, 1 Met. 202. See ante, Agents, § 213. 606 ILLEGAL CONTRACTS. [CHAP. XVIIL existing (and not otherwise), to the seller, whereby the latter sustains damage by trusting the purchaser on the credit of such misrepresentation ; and this doctrine, though formerly opposed, has been repeatedly affirmed in the English and American juris- prudence.^ Thus, where a contract for the delivery of live- stock at a distant place would have been fulfilled but for the false and fraudulent i-epresentations of a third person (the de- fendant), that the plaintiff had abandoned all intention of ful- filling it, in consequence of which the plaintiff, having come to the stipulated place with the drove, found that the bargainee had been supplied by the defendant, and incurred great expense and loss of time in disposing of it elsewhere ; it was held, that an action would lie against the defendant, although the contract to deliver could not have been enforced against the plaintiff by action.^ But this rule only applies to cases where the representation by a third person is known by him to be false, since otherwise it can only have weight as an expression of opinion ; for if it appear to have been made by him bond fide, he will not be liable, although it prove to be unfounded.^ Thus, where the defendant, being consulted in relation to the credit of a third person, who had applied to the plaintiff to deal with him, stated that he knew of his own knowledge that the party might be safely credited, and the plaintiff thereupon trusted him, and suffered a large loss in consequence, it was held that this statement of the defendant was only to be taken as a strong expression of confidence in the solvency of the party, and, as it was bond fide, did not render him liable.* ' Pasley v. Freeman, 3 T. R. 51 ; 2 Kent, Comm. 489, and eases cited; Eyre v. Dunsford, 1 East, 318 ; Allen v. Addington, 7 Wend. 9. * Benton v. Pratt, 2 Wend. 38.5. » Ashlin V. White, Holt, N. P. 387 ; Scott v. Lara, Peake, 226 ; Shrews- bury V. Blount, 2 Man. & Grang. 475 ; s. c. 2 Scott, N. R. 588 ; H.^ycraft V. Creasy, 2 East, 92 ; Tapp v. Lee, 3 Bos. & Pul. 367 ; Gallager v. Brunei, 6 Cow. 846 ; Hutchinson r'. Bell, 1 Taunt. 558 ; Ames v. Millward, 2 J\loore, 713 ; s. C. 8 Taunt. 637 ; Eyre v. Dunsford, 1 East, 318 ; Pasley v. Free- man, 3 T. R. 51 ; Foster v. Charles, 6 Bing. 396 ; s. c. 7 Bing. 105 ; 4 Moo. & P. 741; Young w. Covell, 8 Johns. 23; Lord ^). Goddard, 13 How. 198. * Haycraft v. Creasy, 2 East, 92. In this case Lord Kenyon disagreed with the other judges, and held that the affirm.ation by the defendant that the CHAP. XVIII.] MISREPRESENTATION. 607 This case, however, presses the doctrine quite as far as it would probably be upheld now. But wherever a person fraudulently, and with a design to deceive, misrepresents the circumstances of a third person, as an inducement to another to supply him goods on credit, or to make any contract, he will be liable there- for.i But ill all such cases the party deceived can only recover of the party making the fraudulent statement such damage as is fairly and immediately referable thereto,^ and if no damage is caused by the fraud, there is no right of action.^ And if a person who has sold goods on the representation by another of the purchaser's circumstances, afterwards refuse to sell a greater amount without further references, the person misrep- resenting is not liable beyond the damages due at the date of such a refusal by the seller.'* But where the statement is fraudulent, it is not necessary to show that the defendant was benefited thereby,^ or that he colluded with any one who was, in order to entitle the plaintiff deceived to recover.^ Nor is it necessary to prove a malicious motive therefor, since, if the party said what was false within his knowledge, and thereby occasioned an injury, it is a sufficient ground of action." But where the fraudulent statement of a third party is not known or connived at by eitlier of the original parties, as between tliem, the party who trusted to the misrepresentation should bear the loss, on the ground that, where one of two innocent parties must suffer, he whose act afforded the occasion for the fact of the good credit of the party was within his Imowledge, rendered him liable in damages. See post, § 1125 et seq., and cases cited. ' Ibid. ; Hamaru. Alexander, 2 Bos. & Pul. N. R. 241 ; Hutchinson v. Bell, 1 Taunt. 558 ; Upton v. Vail, 6 Johns. 183 ; Pasley v. Freeman, 3 T. R. 51 ; PoIhiU V. Walter, 3 B. & Ad. ll4 ; Wilson v. Butler, 4 Bing. N. C. 748. See post. Guaranty, § 1125. « Corbett v. Brown, 8 Bing. 35 ; s. C. 6 C. & P. 363. See Stafford v. Newsom, 9 Ired. 507 ; Tuckwell v. Lambert, 5 Cush. 23. ••■ Fuller V. Hodgdon, 25 Me. 243 ; Ide v. Gray, 11 Vt. 615. * Ibid. ; Hutchinson v. Bell, 1 Taunt. 558. s See Young v. Hall, 4 Ga. 95 ; Stiles v. White, 11 Met. 356. « Pasley v. Freeman, 3 T. R. 51 ; Eyre v. Dunsford, 1 East, 318. ' Foster v. Charles, 4 Moo. & P. 61, 741 ; s. c. 6 Bing. 39C ; 7 Bing. 107; PolhiU V. Walter, 3 B. & Ad. 114; Tapp v. Lee, 3 Bos. & Pul. 867. See Collins v. Denison, 12 Met. 649 , Barley v. Walford, 9 Q. B. 197 ; Boyd v. Browne, 6 Barr, 310. 608 ILLEGAL CONTHACTS. [CHAP. XVIII. injury should bear it.^ The party defrauded may, however, as we have seen, subsequently assent to the fraud, after he is in full knowledge of it, so as to destroy his right of action. Thus, if he should make a settlement or compromise of the whole matter with the other party, or should release him, he could not set aside the contract. So, also, mere silence and acqui- escence for a long time, if entirely unexplained, might deprive him of his right, upon the presumption of a compromise or re- lease, implied from the delay. So, also, the same presumption might arise, if, after the discovery of the fraud, the party de- frauded still continue to deal with the otlier.^ But it is not necessary that a contract void for fraud should be rescinded before an action is brought upon it ; it is sufficient if the party entitled to rescind does so before he has done any act to ratify the same.^ CONCEALMENT.* § 643. The general rule, both of law and equity, in respect to concealment, is, that mere silence, with regard to a material fact, which there is no legal obligation to divulge, will not avoid a contract, although it operate as an injury to the party from whom it is concealed.^ Thus, if A. knowing that there is a mine in the land of B.,of which B. is ignorant, should contract to purchase the land without divulging the fact, it would be a valid contract, although the land was sold at a price which it would be worth without the mine ; because A. is under no legal obligation, by the nature of the contract, to give • Lickbarrow v. Mason, 2 T. R. 70; 8. c. 6 East, 20; Goodman u. East- man, 4 N. H. 455 ; Root v. French, 13 Wend. 572 ; Lane v. Borland, 14 Me. 77. ' Parsons v. Huglies, 9 Paige, 691 ; Vigers v. Pike, 8 CI. & Finn. 562, 630. ' Clough V. London & N. W. Railway Co., 25 Law Times (n. s.), 708 (1871). " In Smitli V. Hughes, Law R. 6 Q. B. 604 (1871), these sections are quoted with approbation by Cockburn, C. J., although attributed to " Mr. Justice Story." ^ See Irvine v. Kirkpatrick, 7 Bell, App. 186; 3 Eng. Law & Eq. 17; Otis !;. Raymond, 3 Conn. 413 ; Van Arsdale v. Howard, 6 Ala. 596. CHAP. XVIII.] CONCEALMENT. 609 any information thereof.^ Nor does the passive acquiescence of the seller in the self-deception of the buyer entitle the latter to avoid the contract.^ But this principle only applies to cases where the vendee is deceived by the silence of the vendor ; for if a single word be spoken which tends to mislead him, the contract will be set aside for fraud.^ If, therefore, in the foregoing illustration, B. had suspected that there was a mine in the land, and had inquired of A. whether he knew of any peculiarity about the land which gave it a greater value than it apparently had, and he had misled him, a court of equity would set aside the contract.* § 644. The law never undertakes to refine upon nice ethical distinctions ; and although it lends no countenance to injus- tice, and will not support immorality, yet it often stops short of enforcing a merely honorary obligation. Questions of law must be determined upon general principles, which, although they reach the aggregate of cases, may often fail to extract the sting of injustice and immorality from the individual case. Thus, it is the general policy of the law, in order to induce vigilance and caution, and thereby to prevent those opportuni- ties of deceit which lead to litigation, to throw upon every man the responsibilities of his own contracts, and to burden him with the consequences of his careless mistakes. But this gen- eral rule, though founded in true policy, often affords occasions for that very deceit which it is one of the main objects of the rule to prevent. Thus, although a vendor is bound to employ no artifice or disguise for the purpose of concealing defects in the article sold, since that would amount to a positive fraud on the vendee; yet, under the general doctrine of caveat emptor, he is not, ordinarily, bound to disclose every defect of which he may be cognizant, although his silence may operate virtu- ' Fox «. Mackreth, 2 Bro. C. C. 420 ; Turner v. Harvey, Jacob, 178 ; Har- ris V. Tyson, 24 Penn. St. 347. 2 Smith!). Hughes, Law R. 6 Q. B. 597 ; Horsfallw. Thomas, 1 H. & C. 90. See Raffles v. Wichelhaus, 2 H. & C. 906 ; Scott v. Littledale, 8 EI. & B. 815. ' Pidcock V. Bishop, 3 B. & C. 605 ; Baglehole v. Walters, 8 Camp. 154. See Bench v. Sheldon, 14 Barb. 66 ; Kintzing v. McElrath, 5 Barr, 467 ; Pearce v. Blackwell, 12 Ired. 49 ; Wood v. Ashe, 3 Strobh. 64 ; Ferebee v. Gordon, 13 Ired. 350. " Ibid. ; Livingston v. Peru Iron Co., 2 Paige, 390. VOL. I. 39 GIO ILLEGAL CONTRACTS. [CHAP. XVIIL ally to deceive the vendee. It is evident, however, that without some such general rule, the facilities of sales would be greatly- impeded, and there would be no security to the vendor. ^ § 645. But an improper concealment or suppression of a material fact, which the party concealing is legally bound to disclose, and of which the other party has a legal right to insist that he shall be informed, is fraudulent, and will invalidate a contract.^ Thus, for instance, in cases of insurance, the party insuring being under an obligation to acquaint the underwriter with all facts and circumstances affecting the risk which are peculiarly within his knowledge, or which are not matters of general information, tlie concealment of any such fact or cir- cumstance which a true answer to even a general question would have elicited will be fatal to the contract of insurance.^ So, also, in sales by auction, by which goods are offered to the public under the profession that the highest bidder shall take them, the secret employment of by-bidders and puffers, by which the price is enhanced by pretended competition and fictitious bids, is a fraud, if it operate to deceive the buyer injuriously.* So, also, if facts, which materially affect the nature or extent of a surety's liability, and tend to increase his risk, be concealed, or if he be suffered to make the agreement while he is de- ceived, the concealment is a fraud, which vitiates the contract.^ ' 1 Story, Eq. Jur. § 201 ; 2 Kent, Comm. 483, 484, 4th ed. ; Wilkin- son on Shipping, ch. 4, p. 89 to 103. " 1 Story, Eq. Jur. § 204, 205, 206 ; 2 Kent, Comm. 481 ; Pidcock v. Bishop, 3 B. & C. 605 ; Fox v. Mackreth, 2 Bro. C. C. 420 ; Turner v. Harvey, Jacob, 178 ; Earnam v. Brooks, Pirk. 2;U ; Harrower v. Hutchinson, Law R. o Q. B. 5«4 (1.S70) ; Proudloot v. Montefiore, Law R. 2 Q. B. 511 (1867) ; Bates V. Hewitt, ib. 595. A prior jiromise by the plaintiff to marry another does not avoid a promise to marry the plaintiff, if it was not fraudulently withheld from the deleiidant. Beachey v. Brown, El. B. & E. 796 (1860). ' Marshall on Ins. B. 1, ch. 10, § 2 ; Lindenau v. Desborough, 8 B. & C. 586, 592; Elton v. Larkins, 6 C. & P. 90; Vose v. Eagle Life Ins. Co., 6 Gray, 42. If the concealment is of an immaterial fact, it will not avoid the contract unless there was a warranty. lonides v. Pacific Ins. Co., Law R. 6 Q. B. 674 (1871) ;' Jliles v. Connecticut Life Ins. Co., 3 Gray, 580; Ken- nedy V. Panama, &c., Mail Co., Law R. 2 Q. B. 580 (1867) ; s. c. 8 B. & S. 571. * See ch. on Auctioneers. * Pidcock V. Bishop, 3 B. & C. 605 ; Smout v. Ilbery, 10 M. & W. 1 ; Railton V. Mathews, 10 CI. & Finn. 934 ; Smith v. Bank of Sootland, 1 CHAP. XVIII.j CONCEALMENT. 611 So, it has been held, directors of a company issuing a pro- spectus, are bound to disclose every material fact, or they will be liable to indemnify a person who has taken shares on the faith of their prospectus, although they might have thought the concealment would be beneficial to the persons taking shares ; but this doctrine was overruled in the House of Lords, and it was there decided that an action in tort could not be main- tained for a mere concealment.^ § 6-16. A distinction should here be observed between the concealment of extrinsic circumstances, aifecting the value of the subject-matter of sale, or operating as an inducement to a contract, such as the state of the market ; and the conceal- ment of intrinsic circumstances appertaining to its nature, character, and condition, such as natural defects or injuries. In respect to extrinsic circumstances, the rule is, that mere silence as to any thing which the other party might by proper diligence have discovered, and which is open to his examina- tion, is not fraudulent, unless a special trust or confidence exist between the parties, or be implied from the circumstances of the case. But any concealment, by one party, of intrinsic de- fects, which could not have been discovered by the other, and which were especially within the knowledge of the former, would avoid the contract ; silence being considered a fraud, when trust is necessarily implied by the circumstances. A fortiori, any artifice employed to conceal a defect, or to deter a person from perceiving it, would be a direct fraud upon him^^ In respect to extrinsic circumstances, the rule is, that neither Dow, 272 ; 2 Kent, Comm. 483, 4th ed. Some of the later cases have said that the language of Mr. Justice Bailey, in Pidcock v. Bishop, must be taken in connection .with the actual facts in that case, in which there was actual ' fraud ; and it has recently been held that a creditor who takes a guaranty is not bound to disclose to the surety every fact in his own knowledge which might affect the surety or his willingness to enter into the contract. See North Brit- ish Ins. Co. V. Lloyd, 10 Exch. 523; 28 Eng. Law & Eq. 456; Owen u Homan, 25 ib. 1 ; 4 H. L. C. 997 ; Hamilton v. Watson, 12 CI. & Finn. 109. See Evans v. Keeland, 9 Ala. 42. See post, § 1125. 1 Peek V. Gurney, Law R. 13 Eq. 79; reversed 43 Law J. Ch. 19. See also New Brunswick, &c., Co. v. Muggeridge, 1 Drew. & Sm. 363; Central Railway Co. v. Kisch, Law R. 2 H. L. 113; Henderson v. Lacon, Law R. 5 Eq. 263 ; Oakes v. Turquand, Law R. 2 H. L. 325. » Chisolm V. Gadsden, 1 Strob. 220; Baglehole v. Walters, 3 Camp. 154; Schneider v. Heath, 3 Camp. 606. 612 ILLEGAL CONTRACTS. [CHAP. SYIII. party is ordinarily bound to notify them to the other, and mere concealment will not nullify the contract. But the party concealing a fault must be careful to do no act, and say no word indicative of his assent to any mistaken proposition by the other, and must play an entirely negative part, for if he do any thing positive, he will render himself liable.^ For exam- ' Lord Brougham, in the case of Attwood v. Small, 6 CI. & Finn. 232, speaking upon this subject, says : "If two parties enter into a contract, and if one of them, for the purpose of inducing the other to contract with him, shall state that which is not true in point of fact, which he knew at the time that he stated it not to be true, and if, upon that statement of what is not true, and what is known by the party making it to be false, the contract is entered into by the other party, then, generally speaking, and unless there is more than that in the case, there will be at law an action open to the party entering into such contracts, an action of damages grounded upon the deceit, and there will be a relief in equity to the same party to escape from the con- tract which he has so been inveigled into making by the false representation of the other contracting party. In one case it is not necessary that all those three circumstances should concur in order to ground an action for damages at law, or a claim for relief in a court of equity ; I mean in the case of warranty given, in which the party undertakes that it shall in point of fact be so, and in which case, therefore, no question can be raised upon the scienier, upon the fraud or wilful misrepresentation. In this case that is clearly out of the question, therefore all those three circumstances must com- bine : first, that the representation was contrary to the fact ; secondly, that the party making it knew it to be contrary to the fact ; and thirdly, and chiefly, in my view of the case, that it should be this false representation which gave rise to the contracting of the other party. ' Dolus dan-i locum con- tractui,' is the language of the civil law, not dolus malus generally ; not the mere fraudulent conduct of the party trying to overreach his adversary ; not mere misconduct and falsehood throucjhout, unless dfrlit locum contractui; because then comes in the equitable principle of the civil law, which forms a part of all other systems of jurisprudence, whether founded upon it or not, being grounded on the highest consideration of natural equity, Ex dolo non oritur contradus. " My lords, the cases which have been referred to, and which are per- fectly clear upon this point, may be shortly recalled to the recollection of your lordships, for the purpose of clearly showing that the materiality as well as the falsehood of the statement, and the knowledge of the party mak- ing it, that it was untrue, must concur in order to give relief in equity, and to give an action for damages at law, the two remedies being coextensive and acting in exactly the same circumstances. " The first case that is mentioned in suits of this sort is that of Lysney v. Selby, Ld. Raym. 1118, a case for affirming the rent of houses sold by de- fendant to plaintiff to be more than it was, in which Lord Chief Justice CHAP. XTIII.] CONCEALMENT. 613 pie, if a vendee, having private information of an extrinsic event or fact, unknown to tlie vendor, and materially affecting Holt held, that if one buys upon a representation of so much rent, and relies upon it, and will inquire no further, if the representation be false, an action will lie ; but if the vendor will inquire further, that is, if not relying upon the representation of rent made, he says, ' I do not rely upon the represen- tation, but I wiU satisfy myself by my own inquiry,' then Lord Holt seems to have been of opinion that the action would not lie. Then there is the case of Dobell v. Stevens, 3 B. & C. 623, before Lord Tenterden. It was a question on the purchase of an ale-house, arising out of a misrepresenta- tion of the receipts of the house, — a very common case, — and Lord Ten- terden, in directing the jury, said that he relied on the purchase of the ale-house having been made on the faith of the representation. Now sup- pose, instead of its having been made on the faith of the representation, the party had said, ' I draw so much beer in a month.' ' But,' says the other, ' I will not be satisfied with your telling me that ; you will have no objection to verify and corroborate your statement of the draught, by giving me access to your beer books, or to your brewer's account.' ' Oh, with all the pleasure in the world,' says the vendor of the beer-house ; ' come, or send any person you choose.' And suppose the person had either gone and satisfied himself or sent his clerk, which clerk had made a report to him, and said, ' I have looked through the books, and I am perfectly satisfied ; ' or if the party, not satisfied with the clerk's report, had gone himself and looked at the beer books, and said, ' I see it is all right ; ' would he then be allowed, six jnonths after that, to come and say, ' I will be off the bargain, because I find there is a less draught of beer than I expected ? ' Or could he have come with any success into Lord Chief Justice Tenterden's court, and asked for damages on the ground of misrepresentation, because, instead of three butts, there were only two butts of beer drawn ? ' No,' my Lord Chief Justice would have said, ' how can I say that the purchase was made upon the faith of that representation, when I know that the purchase was made upon your own examination of the books, and your clerk's report, which report of your clerk was confirmed by your own ocular inspection.' If your lordships look at the case of Ekins v. Tresham, 1 Lev. 102 ; s. c. Sid. 146, nom. Leakins V. Clissel, your lordships will find the pleadings there set out, and that the defendant made such a representation, to which representation the plaintiff ' adhibens Jldem, donne . Hunter, 3 Fost. 128 ; Murphy v. Hubert, 16 Penn. St. 50. ' Hawes «. Leader, Cro. Jao. 270 ; jMartindale v. Booth, 3 B. & Ad. 505 ; Steel V. Brown, 1 Taunt. 381 ; Baker v. Lloyd, Bull. N. P. 258 ; Robinson V. M'Donuell, 2 B. & Al. 134; Doe v. Roberts, 2 B. & Al. 367 ; Deady v. Harrison, 1 Stark. 60; 'Banks v. Thomas, 1 Meigs, 33; Kichols v. Patten, 18 Me. 231 ; Jones v. Yates, 9 B. & C. 532 ; Wall v. Provident Institution, 6 Allen, 320 CHAP. XVIII.] FRAUD UPON THIRD PERSONS. 627 fraud, unless the sale be completely bond fide, or unless the subsequent possession by the vendor appear to be merely the condition of an executory contract.^ ' Edwards v. Harben, 2 T. R. 587. In this case, Duller, J., said : " But if the deed or conveyance be conditional, there the vendor's continuing in possession does not avoid it, because by the terms of the conveyance the vendee is not to have the possession till he has performed the condition. Now here the bill of sale was on the face of it absolute, and to take place immediately, and the possession was not delivered ; and that case makes the distinction between deeds, or bills of sale which are to take place immedi- ately, and those which are to take place at some future time. For in the latter case the possession continuing in the vendor till that future time, or till that condition is performed, is consistent with the deed; and such pos- session comes within the rule, as accompanying and following the deed. That case has been universally followed by all the cases since. One of the strongest is quoted in Bucknal and others v. Roiston, Pr. in Ch. 287 ; there one Brewer, having shipped a cargo of goods, borrowed of the plain- tiff £600 on bottomry, and at the same time made a bill of sale of the goods, and of the produce and advantage thereof, to the plaintiflf. There Sir E. Northey cited a case ' where a man took out execution against another ; by agreement between them, the owner was to keep the possession of them upon certain terms, and afterwards another obtained judgment against the same man, and took the goods in execution ; and it was held that he might, and that the first execution was fraudulent and void against any subsequent creditor, because there was no change of the possession, and so no altera- tion made of the property.' And he said it had been ruled forty times iu his experience at Guildhall, that if a man sell goods, and still continue in possession as visible owner of them, such sale is fraudulent and void as to creditors, and that the law has been always. so held. The Lord Chancellor held in the principal case that the trust of those goods appeared upon the very face of the bill of sale. That though they were sold to the plaintift's, yet they trusted Brewer to negotiate and sell them for their advantage, and Brewer's keeping possession of them was not to give a false credit to him, as in other cases which had been cited, but for a particular purpose agreed upon at the time of the sale. So that the Chancellor in that case proceeded on the distinction which I have taken ; he supported the deed, because the want of possession was consistent with it. This has been argued by the de- fendant's counsel as being a case in which the want of possession is only evidence of fraud, and that it was not such a circumstance per se as makes the transaction fraudulent in point of law : that is the point which we have considered, and we are all of opinion that if there be nothing but the absolute conveyance, without the possession, that in point of law is fraudu- lent." This case is also cited and approved by Marshall, C. J., in Hamil- ton V. Russel, 1 Cranch, 310 ; Cadogan v. Kennett, 2 Cowp. 432 ; Jarman v. Woolloton, 3 T. R. 618 ; Stone v. Grubham, 2 Bulst. 225 ; Bucknal v. Rois- ton, Pr. in Ch. 285 ; Reed v. Wilmot, 7 Bing. 577 ; 8. C. 6 Moo. & P. 628 ILLEGAL CONTRACTS. [CHAP. XVIII. § 658. If the conveyance, or bill of sale, be conditional on its face, and possession be not, by its terms, to be surrendered until such condition is performed, the contract is binding against the creditors, if it be in other respects bond fide, and for a -^-aluable consideration. So, also, if the transaction be bond fide and merely by way of mortgage, or collateral secu rity, it would be good.^ In many of the States in the United States, it is declared by statute, that a mortgage should not be considered as fraudulent, although possession is retained by the mortgagor, provided that record thereof he duly made ; for the record is considered as constructi-^-e notice of the transac- tion to the creditors.^ The only effect of such statute would, however, seem to be in affirmation of the rule of the common law. But where the bill of sale, or conveyance, is absolute, and the vendor nevertheless retains possession, a presumption of fraud would in all cases arise. But whether the mere fact that the vendor is to retain possession, is to be considered as aifording prhnd facie evidence of fraud, which may be re- butted by proof, — or as affording conclusive evidence of fraud, — is a question open to much doubt, and in respect to which the cases are distressingly contradictory. § 659. The first case on this subject, and one of the leading cases, is Twyne's case, which was deciiled in the Star-Chamber in the forty-fourth year of the reign of Queen Elizabeth.^ The 5.J3 ; Stephenson v. Clark, 20 Vt. 624 ; Cailbury v. Nolen, 5 BaiT, 320. See Parker v. Procter, 9 Mass. 390 ; Slater c. Dufller, 18 Pick. 373. ' Martindale v. Booth, 3 B. & Ad. 498 ; Minshall v. Lloyd, 2 M. & W. ■ 450 ; Steward v. Lombe, 1 Br. & B. .510, 512 ; D'Wolf v. Harris, 4 Mason, 515; Ward v. Sumner, 5 Pick. 59; Kiild v. Rawlinpon, 2 Bos. & Pul. 59; Glover V. Austin, 6 Pick. 220; Conard v. Atlantic Ins. Co., 1 Peters, 449; Bissell V. Hopkins, 3 Cow. 166 ; Holbrook v. Baker. 5 Greenl. 309 ; Edwards t. Harben, 2 T. R. 695; Armstrong v. Baldock, Gow, 35. = Mass. Gen. Stat. ch. 151, § 1; Forbes t. Parker, 16 Pick. 462; Bul- lock V. Williams, 16 Pick. 33; ShurtlelT v. Willard, 19 Pick. 202. See also Laws of New York, sess. 56, ch. 279 ; Lee v. Huntoon, 1 Hoffin. 448 ; Camp r. CVnmp, 2 Hill, 628; Stat, of Kentucky, Dec. 13, 1820, Feb. 22, 1837, Feb. 1, 1839 ; Stat, of Geor-ia, Dec. 26, 1827 ; Stat, of Virginia, Dec. 1792, Feb. 1819; Indiana Rev. Stat. 18;!8, p. 470; Stat, of Tennessee, 1831; Stat, of Connecticut, 1838, p. 72, 73 ; Rev. Stat, of Vermont, 1839, p. 317. See 2 Kent, Coram. 530, n. ^ Twyne's Case, 3 Coke, 80 ; s. c, reported under the name of Chamber- lane V. Twyne, Moore, 638. See also Shep. Touch. 66. CHAP. XTIII.] FRAUD UPON THIRD PERSONS. 629 facts of that case were as follows. Pierce was indebted to Twyne in £400, and was also indebted to C. in £200. Pend- ing an action by C. to recover liis demand, Pierce, being pos- sessed of goods to tlie value of £300, secretly, by deed, conveyed all his goods and chattels to Twyne, in satisfaction of Twyne's debt. Pierce, however, continued in possession, and sold some of the goods, notwithstanding the deed, and sheared some sheep, that were a part of the effects, and marked them with his own mark. C. having afterwards obtained judgment, endeavored to levy execution on the goods, but was resisted by Twyne. The question which the court were called upon to decide, was, whether the conveyance was fraudulent by the statute of 13 Elizabeth ; and they held that it was, on the following grounds : " 1st. That it had the signs and marks of fraud, because the gift is general, without exception of his apparel, or any thing of nec- essity ; for it is commonly said, quod dolus versatur in generali- bus. 2d. The donor continued in possession, and used them as his own, and by reason thereof, he traded and trafficked with others, and defrauded and deceived them.^ 3d. It was made in secret, et dona clandestina sunt semper suspiciosa. 4th. It was made pending the writ.^ 5th. Here was a trust between the parties ; for the donor possessed all and used them as his proper goods, and fraud is always apparelled and clad with a trust, and a trust is the covert of fraud. 6th. The deed contains, that the gift was made honestly, truly, and bond fide ; et clausula inoonsuetoi semper inducunt suspicionem." § 660. The next leading case on this subject was Edwards v. Harben.^ In this case, Mercer offered to Harben a bill of sale of sundry chattels as a security for a debt. This Harben re- fused to take, unless he should be permitted, at the expiration of fourteen days, if the debt should remain unpaid, to take pos- session of the goods, and sell them in satisfaction of the debt, returning the surplus money to Mercer. A bill of sale was ac- cordingly executed, purporting on the face of it to be absolute, ' See Worseley v. De Mattos, 1 Burr. 482. ' See Holbird v. Anderson, 5 T. R. 235 ; wherein it was held that a bill of sale will not be deemed fraudulent, merely because it was executed pend . ing an action against the vendor. ' 2 T. R. 587. 630 ILLEGAL CONTRACTS. [CHAP. XVIII. and a corkscrew was delivered to Harben in the name of the whole. Mercer died within the fourteen days, and immediately upon their expiration Harben took possession of the goods and sold them. A suit was then brought by Edwards, a cred- itor of Mercer, charging Harben as executor in his own wrong ; and the question was, whether this bill of sale was fraudulent and void, because it was not accompanied by a delivery of pos- session, although it was on its face absolute. It was deter- mined to be fraudulent, and it was said by Buller, J., in the judgment, that all the judges of England had been consulted on a motion for a new trial in the case of Bamford v. Baron, and were unanimously of opinion, that " unless possession ac- companies and follows the deed, it is fraudulent and void ; " ^ and he went on to say, that this principle had been long set- tled, and never had been seriously questioned ; and took a distinction between bills of sale which are to take place im- mediately, and those which are to take place at some future time, on performance of a condition. He then continues : " This has been argued by the defendant's counsel as being a case in which the want of possession is only evidence of fraud, and that it was not such a circumstance per se, as makes the transaction fraudulent in point of law ; that is the point which we have considered, and we are all of opinion, that if there is nothing but the absolute conveyance, without the possession, that, in point of law, is fraudulent." In subsequent cases the same doctrine has been acted upon, and the case of Edwards v. Harben expressly affirmed.^ § 661. But this doctrine, tliat possession of goods sold under an absolute bill of sale affords a conclusive presumption of fraud, seems to have been modified in England by the general current of the late cases ; and, although there are some cases which maintain the doctrine of Edwards v. Harben, yet the ' In Bucknal v. Roiston, Pr. in CIi. 285, it was stated by one of the counsel, anjuendo, that it had been ruled forty times, in his experience, at Guildhall, that if a man sells goods, and still continues in possession of them as visible owner, the sale is fraudulent and void as to creditors. ^ Steel V. Brown, 1 Taunt. 382; Reed v. Wilmot, 7 Bing. 583; s. c. 6 Moo. & P. 56i ; Pa-et v. Perchard, 1 Esp. 205 ; WordaH v. Smith, 1 Camp. 332. See Parker v. Procter, 9 Mass. 390; Slater v. Dudley, 18 Pick. 373. CHAP. XVIII.J FRAUD UPON THIRD PERSONS. 631 weight of authority preponderates to the modified doctrine, that possession in these cases, by the vendor, only affords a badge or primd facie presumption of fraud. This doctrine was as- serted by Lord Eldon, in the case of Kidd v. Rawlinson ; ^ and afterwards affirmed by him in the case of Lady Arundell v. Phipps ; ^ in which, referring to his former decision, he said : "The mere circumstance of possession of chattels, however familiar it may be to say it proves fraud, amounts to no more than that it is primd facie evidence of property in the man possessing, until a title not fraudulent is shown, under which the possession has followed." Lord Mansfield also held, that possession was only a badge of fraud, and that whether the circumstances created a necessary presumption of fraud, was a question for the jury.^ Lord Tenterden also was of opinion, that continued possession was not conclusive evidence of fraud.* And Mr. Justice Parke, in the case of Martindale v. Booth,^ where there was an assignment of the furniture, household goods, and fixtures of a tavern to secure payment of a debt, with a proviso for the grantee to take possession, on failure of payment of any of the instalments, and sell the property, and that the grantor until then should keep the possession, says : " I think the want of delivery of possession does not make a deed of sale of chattels absolutely void. The dictum of Buller, J., in Edwards v. Harben, has not been generally considered in subsequent cases to have that import. Tlie want of delivery is only evidence that the transfer was colorable. In Benton v. Thornhill,^ it was said in argument, that want of possession was not only evidence of fraud, but constituted it; but Gibbs, C. J., dissented ; and although the vendor there, after executing a bill of sale, was allowed to remain in possession, Gibbs, C. J., at the trial, left it to the jury to say, whether, under all the circum- stances, the bill of sale were fraudulent or not." " It may bo a ' Kidd V. Kawllnson, 2 Bos. & Pul. 59. ^ Arundell v. Phipps, 10 Ves. 145. 3 Martin u. Podger, 2 W. Bl. 701. * Eastwood V. Brown, Ry. & Mood. 312 ; Martindale v. Booth, 3 B. & Ad. 505. > Martindale v. Booth, 3 B. & Ad. 505. « Benton v. Thornhill, 2 Marsh. 427. 632 ILLEGAL CONTRACTS. [CHAP. XVIII. question for a jury, whether, under the circumstances, a bill of sale of goods and chattels be fraudulent or not ; and if there were any grounds for thinking that a jury would find fraud here, we might, this being a special case, infer it ; but there is no ground whatsoever for saying that this bill of sale was fraudulent." In this case, however, it will be observed, that the possession was consistent with the terms of the deed, and therefore it was not fraudulent within the rule of the case of Edwards v. Harben. In Steward v. Lombe, it ,vas said by Lord Chief Justice Dallas, that " the case of Edwards v. Harben has been dissented from often," and by Mr. Justice Park, that " doubts have arisen as to the extent of the doctrine there laid down." i In Latimer v. Batson,^ Lord Chief Justice Ab- bott said, " I perfectly agree, that possession is to be much re- garded ; but that is with a view to ascertain the good or bad faith of the transaction." " Here the jury have affirmed the good faith of the transaction. The question for their consider- ation was properly, whether this was a bond fide transaction ; and that fact being ascertained, the subsequent possession was unimportant."^ In Hoffman v. Pitt,* Lord EUenborough said, speaking of an assignment of chattels made without surrender of possession : " The not taking possession was, in some meas- ure, indicative of fraud ; but was not conclusive. But to make it absolutely void, there must be something that showed the deed fraudulent in the concoction of it. It was incumbent on the person claiming title to show that the transaction was ho7td fide." § 662. The conclusion to be drawn from these, and other Eng- lish cases, asserting a similar doctrine, would, therefore, seem to be, that, by the modern rule, which obtains in England, the mere fact that there is no change of possession, after an abso- lute bill of sale has been made, would not, of itself, necessarily constitute such a fraud as to avoid the sale, — but that it is a badge of fraud, which, taken with the other circumstances of the case, may afford a conclusive presumption of fraud, or may be ' Steward v. Lombe, 1 Br. & B. .512, 513. ' Latimer v. Batson, 7 Dowl. & Ryl. 110. See also s. c. 4 B. & C. 654. ' Wordall v. Smith, 1 Camp. 332. * Hoffman v. Pitt, 5 Esp. 25. CHAP. XVIII.] FRAUD UPON THIRD PERSONS, 63S rebutted and explained, so as to render the sale valid.^ All its effect is to afford a primd facie presumption of fraud. § 663. The rule of law applicable to this subject which ob- tains in America is by no means .settled, and the question is embarrassed by decisions which are utterly contradictory and irreconcilable. § 664. In the Supreme Court of the United States, the doc- trine of Edwards v. Harben, that an absolute bill of sale or conveyance, without surrender of possession, is, of itself, con- clusive evidence of fraud, has been affirmed to its full extent. In the case of Hamilton v. Russel,^ Mr. Chief Justice Marshall, after quoting fully from the case of Edwards v. Harben, pro- ceeds to say : " This court is of the same opinion. We think the intent of the statute is best promoted by that construction ; and that fraudulent conveyances, which are made to secure to a debtor a beneficial interest, while his property is protected from creditors, will be most effectually prevented by declaring that an absolute bill of sale is itself a fraud, unless possession ' ac- companies and follows the deed.'" This construction, too, comports with the words of the act. Such a deed must be con- sidered as made with an intent " to delay, hinder, or defraud creditors." The same doctrine is affirmed in the Circuit Court by Mr. Justice Story .^ § 665. So, also, in the United States courts, it is held, that although possession be not given, yet if the bill of sale or con- veyance be not absolute, but conditional that the property shall remain in the possession of the vendor until performance of the condition, then the sale would not be fraudulent. So, also, if the bill of sale be, on the face of it, merely by the way of mortgage or security,, and pursuant to an agreement between ' See also, to this point, Eastwood v. Brown, Ky. & Mood. 312 ; Bald- win V. Cawthome, 19 Ves. 166 ; Jezeph v. Ingram, 1 Moore, 189 ; Benton V. Thornhill, 2 Marsh. 427 ; s. c. 7 Taunt. 149 ; Reed v. Wilmot, 5 Moo. & P. 553 ; s. c. 7 Bing. 577 ; Woodham v. Baldock, 3 Moore, 11 ; s. c. Gow, 35 ; Leonard v. Baker, 1 M. & S. 251 ; Watkins v. Birch, 4 Taunt. 823 ; 2 Kent, Comm. 520 ; Hoffman v. Pitt, 5 Esp. 22. ' Hamilton v. Russel, 1 Cranch, 810. See also Conard v. Atlantic Ens. Co., 1 Peters, 449. See Bissell v. Hopkins, 3 Cow. 189, and the cases there collected ; U. S. v. Hooe, 3 Cranch, 73. 'Meeker v. Wilson, 1 Gall. 419. 634 ILLEGAL CONTRACTS. [CHAP. XTIIL the parties that the mortgagor shall retain possession, it would be valid.^ § 666. But the doctrine, which is promulgated iu the State courts, differs in the different States. In Massachusetts,^ Maiue,^ New Hampshire,* New Jersey,^ Tennessee,^ Ken- tucky,' North Carolina,^ Texas,^ Arkansas,!" g^jj,^ Ohio,ii we find ' Hamilton v. Russel, 1 Cranch, 810; D'Wolf v. Harris, 4 Mason, 515; Conard v. Atlantic Ins. Co., 1 Peters, 449 ; Meeker v. Wilson, 1 Gall. 419 ; U. S. V. Hooe, 3 Cranch, 79 ; U. S. v. Conyngham, 4 Dall. 358 ; Phettiplace V. Sayles, 4 Mason, 821. » Brooks V. Powers, 15 Mass. 244; Bartlett v. Williams, 1 Pick. 288; Homes v. Crane, 2 Pick. 607 ; Wheeler v. Train, 8 Pick. 255 ; Ward v. Sumner, 6 Pick. 59; Shumway t>. Rutter, 7 Pick. 56; s. c. 8 Pick. 443; Adams v. Wheeler, 10 Pick. 199 ; Marden v. Babcock, 2 Met. 99 ; Briggs V. Parkman, 2 Met. 258. In the last case, Mr. Justice Wilde said: "It has always been held by this court, that where a vendor continues in posses- sion of the goods sold, after the sale, with the consent of the vendee, such a possession is only a badge or presumptive evidence of fraud, which it is proper to submit to a jury, and which may be e.xplained, and the inference of fraud repelled by other evidence.'' ' Reed v. Jewett, 5 Greenl. 96 ; Holbrook v. Baker, 5 Greenl. 309 ; Brinley v. Spring, 7 Greenl. 241 ; Ulmer v. Hills, 8 Greenl. 826 ; Cutter v. Copeland, 18 Me. 127. In this last case the courts go so far as to affirm that a mortgagor may, by an arrangement with the mortgagee, become the agent of the mortgagee, and retain the possession, without affording even prima facie evidence of fraud. Bradeen v. Brooks, 22 Me. 468. * Haven v. Low, 2 N. H. 13 ; Coburn ». Pickering, 8 N. H. 415 ; Lewis V. Whittemore, 5 N. H. 364 ; Ash o. Savage, 5 N. H. 545 ; Kendall v. Fitts, 2 Post. 1 ; Coburn v. Pickering, 3 N. H. 415. ^ Sterling v. Van Cleve, 7 Halst. 285 ; Bank of New Brunswick u. Has- sert, Saxton, 1 ; Mount v. Hendricks, 2 South. 738 ; Cumberland Bank v. Hann, 3 Harrison, 222. * Callen v. Thompson, .3 Yerg. 475 ; Maney v. Killough, 7 Yerg. 440 ; Mitchell V. Beal, 8 Yerg. 141. ' Baylor v. Smithers, 1 Littcll, 112; Goldsbury v. May, 1 Littell, 256; Hundley v. "Webb, 3 J. J. Marsh. 648 ; Breckenridge v. Anderson, 3 J. J. Marsh. 710 ; Allen v. Johnson, 4 J. J. Marsh. 285 ; Woodrow v. Davis, 2 B.- Monr. 298 ; Wash v. Medley, 1 Dana, 269. * Howell V. Elliott, 1 Dev. 76 ; Vick v. Kegs, 2 Hayw. 126 ; Falkner v. Perkins, 2 Hayw. 224 ; Smith v. Niel, 1 Hawks, 341 ; Trotter v. Howard, 1 Hawks, 820. ' Bryant v. Kelton, 1 Texas, 415. "> Field V. Simco, 2 Eng. 269. " Barr v. Hatch, 3 Ohio, 529 ; M'Lean v. Lafayette Bank, 3 McLean, 687. CHAP. XVin.] FEAUD UPON THIRD PERSONS. 635 the later doctrine of the English courts, that possession only affords a primd fade evidence of fraud, which may be sustained, or rebutted, by proof of the other circumstances of the case. In South Carolina, the doctrine has been subject to fluctuations, but this doctrine seems also to obtain there now.^ But in Virginia,^ Pennsylvania,^ Vermont,* Illinois,^ Florida,^ and ' In the case of Croft v. Arthur, 3 Desaus. 229, the strict rule as to the effect of possession was said to be better founded. In De Bardeleben v. Beekman, 1 Desaus. 346, the court held that if possession did not accompany an unrecorded bill of sale of chattels, it was void as to the creditors, although there was no doubt of the fairness of the transaction. Again, in Kennedys. Ross, 2 Rep. Const. Ct. 125, the doctrine of Edwards v. Harben was affirmed. But in Terry v. Belcher, 1 Bailey, 568, and Howard v. Williams, 1 Bailey, 575, and Smith v. Henry, 2 Bailey, 118, the relaxed doctrine that possession constitutes only prima facie evidence of fraud, was enunciated. But see again, Anderson v. Fuller, M'Mullan, Eq. 27. ^ Alexander v. Deneale, 2 Muuf. 341 ; Robertson v. Ewell, 3 Munf. 1 ; Land e. Jeffries, 5 Rand._ 211 ; Claytor v. Anthony, 6 Rand. 285 ; Sydnor V. Gee, 4 Leigh, 535. ■■' Young V. M'Clure, 2 Watts & S. 147 ; Clow v. Woods, 5 S. & R. 285 ; Welsh V. Bekey, 1 Penn. 57 ; Cowden v. Brady, 8 S. & R. 510 ; 2 Kent, Comm. 522, 523, 524; Brady v. Haines, 18 Penn. St. 113. ^ Boardman v. Keeler, 1 Aik. l.jS ; Mott v. McNiel, 1 Aik. 162 ; Weeks ». Wead, 2 Aik. 64; Fletcher !). Howard, 2 Aik. 115; Beattie v. Robin, 2 Vt. 181 ; Judd u. Langdon, 5 Vt. 231 ; Hutchins v. Gilchrist, 23 Vt. 82 ; Farnsworth v. Shepard, 6 Vt. 521. In this case Mr. Justice Mattock said : " This still remains the settled law of the land; and although some learned gentlemen of the law have supposed that the court would eventually retrace their steps, as the courts in some neighboring States have done, that is, leave this as a badge of fraud to the jury, among others ; yet we are not disposed to recede a jot, nor to advance a whit, but to remain stationary upon this, in other governments, vexed question, so as to give this branch of the law at least the quality of uniformity." See Wilson v. Hooper, 12 Vt. 653; Stiles v. Shumway, 16 Vt. 435. ' Thornton v. Davenport, 1 Scam. 296. In this Illinois case the true doctrine is laid down with precision. All conveyances, it is held, of goods and chattels, where the possession is permitted to remain with the alienor oi vendor, are fraudulent per se, and void as to creditors and purchasers, unless the retaining of possession be consistent with the deed : where the transac- tion is hand fide, and from the nature and provisions of the deed, the pos- session is to remain with the vendor, that possession being consistent with the deed, does not avoid it ; and therefore mortgages, marriage settlements. ' Gibson v. Love, 4 Fla. 217. 636 ILLEGAL CONTRACTS, [CHAP. XTIIl. Connecticut/ the strict rule of the old. English law and of the United States courts is adhered to. In New York, the doctrine has not been wholly settled, although it seemed to preponder- ate in favor of the rule declared in the United States courts, that possession constitutes a conclusive presumption of fraud.'^ This question is, however, now set at rest in that State by a statute, declaring, that unless a sale or assignment be accom- panied by an immediate delivery, and be followed by an actual and immediate change of possession, it shall be presumed to be fraudulent and void, as against the creditors, &c., and shall be conclusive evidence of fraud, unless it shall be made to appear, and limitations over of chattels, are valid without transfer of possession, if the transfer be bond fide, and the possession remain with the person accord- ing to the deed. But an absolute sale of personal property, and the possession remaining with the vendor, is void as to creditors and purchasers, even though authorized by the terms of the bill of sale. The opinion of one of the judges in that case went to the whole length of the salutary doctrine, that the mortgagee or vendee taking a bill of sale for security, must take possession, even though the arrangement in the deed or mortgage be ditfer- ent, because " the policy of the law will not permit the owner of personal property to create an interest in another, either by mortgage or absolute sale, and still continue to be the visible owner.'' ' Patten v. Smith, 5 Conn. 196 ; Swift o. Thompson, 9 Conn. 63 ; Toby V. Reed, 9 Conn. 216 ; Mills v. Camp, 14 Conn. 219 ; Osborne v. TuUer, U Conn. 529 ; Norton v. Doolittle, 32 Conn. 410 ; Hall «. Gaylor, 37 Conn. 650 (1871) ; Lake v. Morris, 30 Conn. 201 (1861). ° In Sturtevant v. Ballard, 9 Johns. 337, it was held by Mr. Justice Kent, that if the vendor be permitted to retain possession in the case of an abso- lute bill of sale of chattels, it was an act of fraud in law, as against creditors, and tliat, though the agreement appear on the face of the deed, it would be equally so, unless some good motive at the same time was shown. The rule applied equally to conditional as to absolute sales, unless the intent of the party in creating the condition was sound and legal. The result of the case was that a voluntary sale of chattels, with an agreement either in or out of the deed, that the vendor may keep possession, is, except in special cases, and for special reasons, to be shown and approved of by the court, fraudu- lent and void as against creditors. In Ludlow v. Hurd, 19 Johns. 221, however, the question, whether possession constituted a presumption of fraud, or proof thereof, was left as a debatable point. And in Bissell v. Hopkins, 3 Cow. 166, the doctrine of Sturtevant v. Ballard was entirely overthrown, and the doctrine asserted, that possession was merely evidence, and not proof of fraud. And see Thompson v. Blanchard, 4 Comst. 303. But in Divver v. McLaughlin, 2 Wend. 590, the doctrine of Sturtevant v. Ballard was again recognized. See also Collins v. Brush, 9 Wend. 198. CHAP. XVIII.] FRAUD UPON THIRD PERSONS. 687 on the part of the persons claiming under such assignment, that the same was made in good faith, and without any attempt to defraud.^ § 667. Again, it is considered a fraud against the rights of third persons, secretly to employ by-bidders, or puffers, whose sole office is to excite competition and inflate the price by fic- titious bids in sales by auction, while, by a secret understand- ing with the auctioneer or seller, that they shall not be held by their bids, they avoid all risk. And in respect to such persons, the rule is, that if their false bidding operate directly as a fraud upon the vendee, the latter may avoid the purchase.^ If, there- ' N. Y. Rev. Stat. vol. ii. p. 136, § 5, 6, 7. It is also enacted that the question of fraudulent intent, in all cases of fraudulent conveyances and con- tracts, shall be deemed a question of fact, and not of law. See Cunningham i>. Freeborn, 11 Wend. 240 ; Doane v. Eddy, 16 Wend. 523 ; Randall v. Cook, 17 Wend. 63 ; Smith v. Acker, 23 Wend. 653 ; White v. Cole, 24 Wend. 116 ; Butler v. Van Wyck, 1 Hill, 438 ; Cole v. White, 26 Wend. 511 ; Hanford v. Artcher, 4 Hill, 271. This question, though discussed with much diversity of opinion in Hanford v. Artcher, was settled in the jurisprudence of New York by that case. Mr. Chancellor Kent (2 Kent, Comm. 529, note e), after reviewing all the cases, says : "And it may now be considered as finally settled in the jurisprudence of New York, and as the true doc- trine of the Revised Statutes, that leaving the possession of chattels on sale, or mortgage, or assignment, in the hands of the vendor, or mortgagor, or assignor, is only presumptive evidence of fraud, and it rests with the de- fendant to rebut that presumption as a matter of fact, by showing proof of good faith, and an honest debt, and an absence of an intent to defraud. The doctrine of the Supreme Court was that there must appear to have been good and sufiicient reasons, or some satisfactory excuse, for non-delivery at the time, and that the presumption of fraud cannot be rebutted merely by prov- ing good faith and absence of a fraudulent intent. The old doctrine was that non-delivery, except in special cases, was fraudulent, and an inference of law for the court. The doctrine now finally settled in the senate is that the whole is a question of fact for a jury. The Chancellor (Walworth) and the Supreme Court have struggled nobly to maintain what I believe to be the only safe and salutary principle requisite to protect creditors and bar fraud. The senate have established, upon the letter of the Revised Statutes, the more lax and latitudinary doctrine, which places the most common and the most complex dispositions of property, as between debtor and creditor, at the variable disposal of a jury." In Hanford v. Artcher, the president of the senate (Bradish) gave a learned historical review of the English and American authorities, and ably vindicated the decision of the senate. See McVicker v. May, 3 Barr, 224 ; Jordan v. Frink, 3 Barr, 442. " Bramley ». Alt, 3 Ves. 624 : Veazie v. Williams, 3 Story, 620 ; Wheeler 638 ILLEGAL CONTRACTS. [CHAP. XVIII. fore, all of the bidders except the purchaser be fictitious bid- ders, or if the bid immediately preceding that of the purchaser be made by a puifer, the buyer may avoid the sale ; for it is evident, that, as he has purchased under the false supposition that he is contending with real bidders, he has been deceived wilfully and injuriously, and the very condition of an auction sale, which is, that the highest real bidder shall take the subject- matter, is broken. But if a person be employed merely to bid up the subject-matter of sale to a certain price, in order to pre- vent a sacrifice of the property, and the price be afterwards raised by real bidders, after one of whose bids the purchaser makes the last bid, the sale will be valid, because there has been no fraud in purpose, and no damage or fraud in fact.^ V. Collier, Mood. & M. 125 ; Howard v. Castle, 6 T. R. 642 ; Bexwell v. Christie, 1 Cowp. 396 ; Smith o. Clarke, 12 Ves. ill ; Crowder v. Austin, 3 Bing. 368 ; Sugden on Vend. 18, 19 ; ConoUy v. Parsons, 3 Ves. 62.5, note. See Towle v. Leavitt, 3 Fost. 360, an able case on this subject. Staines v. Shore, 16 Penn. St. 200 ; Green v. Baverstock, 14 C. B. (n. s.) 204 (1863). See ante, § 637 and notes. ' The rule of law applicable to this class of cases is far from being dis- tinctly settled. The cases are quite contradictory, and cannot be har- monized; but the weight of doctrine seems to be upon the whole the rule propounded in the text. The tirst case in which the question as to the effect of puffers at an auction sale came before the court was in Bexwell v. Christie, 1 Cowp. 396, in which Lord Mansfield held the practice to be a fraud upon the buyer and on the public. " The question, then, is," said he, " whether the owner can privately employ another person to bid for him. The basis of all dealings ought to be good faith ; so more especially in these transac- tions, where the public are brought together upon a confidence that the articles set up for sale will be disposed of to the highest real bidder : that could never be the case if the owner might secretly and privately enhance the price by a person employed for that purpose ; yet tricks and practices of this kind daily increase, and grow so frequent, that good men give in to the ways of the bad and dishonest in their own defence. But such a practice was never openly avowed. An owner of goods set up to sale at an auction never yet bid in the room for himself. If such a practice were allowed, no one would bid. It is a fraud upon the sale and upon the public. The disallow- ing it is no hardship upon the owner. For if he is unwilling his goods should go at an under price, he may order them to be set up at his own price, and not lower ; such a direction would be fair." This case is recognized and the same rule adopted by Lord Kenyon, in Howard v. Castle, 6 T. R. 643, in which he says: " I will not go into the general reasoning on this subject, because it is very ably stated by Lord Mansfield in the case alluded to. Only part of that reasoning has now been adverted to by the plaintiff's counsel, CHAP. XTIII.] FRAUD UPON THIRD PERSONS. 639 Again, the vendor may employ puffers and by-bidders, if he give notice of such fact at the time of the sale, since, in such case, it would not operate as a fraud.^ but the rest of it is applicable to this case. The whole of that reasoning is founded on the noblest principles of morality and justice, — principles that are calculated to preserve honesty between man and man. The acts of Parlia- ment that have been referred to did not intend to interfere with this point, but to leave the civil rights of mankind to be judged of as they were before. In the case cited Lord Mansfield mentioned an instance in which the owner may legally and fairly bid at the auction, namely, where, before the bidding begins, he gives public notice of his intention ; and in such a case no duty is to be paid under the acts of Parliament that have been referred to. The circumstance of puffers bidding at auctions has been always complained of: if the first case of this kind had been tried before me, perhaps I should have hesitated a little before I determined it ; but Lord IMansfield's comprehensive mind saw it in its true colors, as founded in fraud ; he met the question fairly, and made a precedent which I am happy to follow." But Lord Loughborough, in Conolly v. Parsons, 3 Ves. 625, note, questions the sound- ness of this opinion, and doubts whether "the judgment of one person is deluded and influenced by the bidding of others." He says : " This point comes now before me very much by surprise. I should not have thought the case decided by Lord Mansfield bore much upon it. The last case carries a great degree of authority with it ; but I fancy it turned upon the circum- stance that there was no real bidder, and the person refused instantly. It was one of those trap auctions that are so frequent in this eitj'. The reason- ing goes large certainly; and does not at all convince me. I should wish it to undergo a reconsideration ; for if it is law, it will reduce every thing to a Dutch auction, by bidding downwards. I feel vast difficulty to compass the reasoning, that a person does not follow his own judgment because other persons bid ; that the judgment of one person is deluded and influenced by the bidding of others. It may weigh, if A., a skilful man, B., a cautious man, and C, a wealthy man, are in competition; but where it is publicly known that persons are employed to bid, it would be very foolish in any one to let himself be so influenced." " I have seen public advertisements of lots put up again as lots bought in for the owner. If it is considered as a contract with all the world, he cannot countermand the sale and sell by private contract. They meet upon these terms : the seller has fixed the value in his own mind, but hopes to get more ; the buyer has done the same, but hopes to get it for less. They stand en- tirely equal. If it is unfair for the seller to get more, it is equally unfair for the buyer to get it for less. It is not doubted at any sale, except where there is an express stipulation to sell without reserve, that there is somebody ' Wheeler v. Collier, Mood. & M. 125 ; Crowder v. Austin, 3 Bing. 368 ; Bowles V. Round, 5 Ves. 508. See Latham v. Morrow, 6 B. Monr. 630 ; Thornett v. Haines, 16 M. & W. 871 ; post, § 548. 640 ILLEGAL CONTRACTS. [CHAP. XVIII. § 668. If, however, either the owner of the goods sold by auction, or tlie auctioneer himself, be innocent of the fraud, for the seller. The buyer goes to the sale with this knowledge, that he shall not get the article under a price the seller thinks to be a reasonable price. There are several articles sold almost always by auction, that could not possibly be sold so, if the vendor was not allowed somebody to look after his interest. There ai-e not above three or four purchasers of scarce and valuable books ; they would divide them, if the person selling has not some means of guarding against that. I should be extremely glad to find any case that would draw into consideration what might be all the conse- quences of applying that philosophical doctrine, as I call it, to sales by auction. It goes no further in point of authority than when the purchaser declares off immediately." So, also, Sir Richard Arden, in Bramley v. Alt, 3 Ves. 622, limits the rule to cases where all the bidders, except the pur- chaser, are puffers. This case was one where one person only bid for the vendor, at £7.5 per acre, and then, afterwards, in a contest of real bidders among themselves, the estate was run up to £100 17.s. an acre, and this was held not to avoid the sale. In the opinion, he says : " It is contended, as a point established by Howard v. Castle, 6 T. R. 642, that neither courts of law nor of equity will support this sale. I have looked into that case, which was relied upon at the trial, and is the only defence set up against the per- formance of this agreement. Upon that case, there is no doubt that no man shall be compelled to abide by such a bargain ; no person being present but the buyer and the persons bidding on behalf of the seller ; iind in conse- quence of his zeal he was induced to bid, thinking he was bidding against real purchasers. The judges were of opinion that it was a mere fraud upon him as a purchaser ; that a man going to an auction has a right to expect that he is bidding against real purchasers. He may be induced upon that supposition, which he has a right to make, to give as much as any man will for himself; and if he is induced to bid by that method, he has been the dupe of a fraud. I perfectly subscribe to that; but is this a case of that com- plexion ? and am I to understand that, if at any sale any one person bids for the seller without having declared it, though he ceased to bid, and the pur- chaser pursued his bidding against hnnafide bidders, he shall, from the mere circumstance of that one person bidding for the seller, avail himself of that to put an end to his contract ? I can collect no such thing ; and should be son-}- that was to prevail. On the contrary, I see it expressly stated that no other persons were present but those who bid on the part of the seller. I am told the Lord Chancellor, in a late case, intimated that he could not consider himself bound to hold that the purchaser could refuse to abide by the contract, because there were persons who bid for the seller. I do not know whether his lordship gave any opinion. I have no doubt that if there were none but puffers, and a person was induced '^; that method to give more than the value, neither courts of law njr of equity would support it. I was amazed to find no witnesses were examined for the defendant; but it CHAP. XVIII.] FRAUD UPON THIRD PERSONS. 641 and do not know that sham-bidders are employed, he will not be liable to an action by the buyer ; but the remedy of the now appears that the reason which induced his counsel very properly not to call any, thinking it would be in vain, was, that several days afterwards he confirmed the sale, by paying part of the auction duty ; which he states by his answer he was rather inveigled into. The fact is, that at the sale one person was authorized to bid for the seller as far as seventy-five guineas ; and did so. It is said that ought to have been proclaimed. No doubt a man may buy in an estate ; for the statutes authorize the auctioneer not to pay the duty if it is bought in ; but it is said that ought to be an open declared thing. Where is the difference between that and setting it up at seventy-five guineas ? The judge's report shows this fictitious bidder did not induce him to go on; for afterwards began the contest between him and Mills, who swears he was a real bidder. Can I say the defendant was in- duced by the fraud of the seller to bid what he would not have given if he had not been so induced ? Therefore, without impugning the authority of that case, to which as stated I perfectly subscribe, I am clearly of opinion that no fraud was practised upon the defendant ; that he was bidding at a fair sale, and became the purchaser ; and I do not believe the judges meant that if one person was bidding for the seller, that shall vitiate the bargain, if under all the circ^umstanoes that does not operate as a fraud upon the buyer. This contract, therefore, ought to proceed." In Smith v. Clarke, 12 Ves. 481, Sir W. Grant held, that, where a person was employed to bid up to a certain sum to prevent a sacrifice of the property, the purchaser was bound by the sale, though the bid immediately previous to the last bid was made by the puffer. This relaxation of doctrine is approved of in Steele v. EUmaker, 11 S. & R. 86 ; Jenkins v. Hogg, 2 Const. 821 ; and Wolfe V. Luyster, 1 Hall, 146. But in the late case of Crowder v. Austin, 3 Bing. 368, the doctrine of Lord IMansfield, in Bexwell v. Christie, is adopted. In this case, the plaintiff sought to recover the price of a horse sold to him by the defendant at a public auction, one condition of which action was, that the horse should be sold to the best bidder. The defendant resisted the contract on the ground that after a, bona fide bidder had bid £12, a servant of the plaintiff's, stationed by him at the auction, made repeated biddings up to £23, and it was hold by the whole court, that the transaction was a fraud, which vitiated the sale, and that the doctrine of Lord Mansfield was the correct one. In the still later case of Veazie v. Williams, 3 Story, 624, the doctrine stated in the text was held by jMr. Justice Story. In this case certain mill privileges were sold at auction, and the auctioneer made sham bids, by which the price was greatly enhanced ; but as the action was brought against the seller, who had never authorized the sham bidding of the auctioneer, the case was not decided simply on the ground of fraud. In the opinion delivered by Mr. Justice Story in this case, after reviewing the cases on this subject, he said : " Ifappears to me that there is room for some distinctions VOL. I. 41 642 ILLEGAL CONTRACTS. [CHAP. XVIII. latter must be against the party committing the fraud, whether he be the sham-bidder, or the owner, or tlie auctioneer .^ upon this subject, wliicli, if they do not fully reconcile the cases, are at all events well adapted to subserve the purposes of private justice and con- venience, as well as public policy. Where all the bidders at the sale, except the purchaser, are secretly employed by the seller, and yet are apparently real bidders, and the purchaser is misled thereby, and is induced to give a larger price in consequence of their supposed honesty and exercise of judgment, there the sale ought to be held a fraud upon the purchaser, because he has been intentionally deluded by them. But where there are real bidders, as well as secret bidders for the sellers, there, if the last bid before the purchaser's bid be a real bid, and no intentional deceit has been practised by what have been sometimes called decoy-ducks, to mislead or surprise the judgment or discretion either of other real bidders or of the purchaser, there seems to be a solid ground to hold that the sale is valid, and for the very reasons stated by Lord Loughborough and Lord Alvanley. It seems to me that Sir William Grant, in Smith v. Clarke, 12 Ves. 477, 482, has pointed out the true line of distinction in his comments upon the cases ; and although he did not then express any positive opinion, it is suf- ficiently evident what his opinion was, — an opinion entitled to very great weight, for he was among the ablest judges that ever graced the courts of equity of England. He there said : ' After the case of Bramley v. Alt, and what Lord Rosslyn stated to be his strong and clear opinion in ConoUy v. Parsons, it would be too much for me to say this is in itself a fraud ; unless I could say, every direction by a vendor to any person to bid in his behalf is of itself such a fraud as to vitiate every agreement that takes place at an auction, at which that direction is given. In Bexwell v. Christie, very general and broad principles are laid down by the Court of King's Bench; beyond any that the ease immediately before the court required. The subsequent case, Howard v. Castle, proceeded upon the ground of plain and direct fraud ; Lord Kenyon stating, that it appeared at the trial to be bot- tomed in fraud ; that it was fraud from beginning to end. There was no real bidder ; and there were several bidders for the vendors. Wlicnever I shall be able to state the same proposition of any case, I shall come to the same conclusion. But it is clear Lord Kenyon had not always entertained the same opinion as to tlie doctrine in Bexwell v. Christie; for in Twining v. Morrice, he states, with respect to bidders being employed for the vendors, that he does not say the doctrine in Bexwell v. Christie is wrong ; but everybody knows that such persons are constantly employed. In Bramley I). Alt, Lord Alvanley expresses his opinion that it is perfectly legal for a man to state a price, below which ho would not permit a sale ; and his lord- ship observes, that there is no difference between setting up the lot at a given price, and employing a person to prevent a sale under that price ; if ' Veazie v. Williams, 3 Story, 620. CHAP. XVIII.J CONTRACTS VOID ON ACCOUNT OF IMMORALITY. 643 IMMORAL CONTRACTS, § 669. Having considered the subject of contracts wliich are void on account of fraud, we now come to the consideration that is communicated. I do not mean to state a proposition so general, as that there can be no fraud through the medium of persons employed by the vendors. Lord Rosslyn appears, in ConoUy v. Parsons, to doubt whether there can be that species of fraud : whether, in any case, the purchaser can be said to bo defrauded merely by being drawn in through eagerness of zeal and competition with others. I do not go that length ; for if the person is employed, not for the defensive precaution, with a view to prevent a sale at an undervalue, but to take advantage of the eagerness of bidders to screw up the price, I am not ready to say, that it is such a transaction as can be justified in a court of equity. Neither do I say, that, if several bidders are employed by the vendor, that in such a case a court of equity would compel the purchaser to carry the agreement into execution ; for that must be done merely to enhance the price. It is not necessary for the defensive purpose of protection against a sale at an undervalue. I leave those cases to be determined upon those grounds, whenever they may occur. It is sufBcient to say, this is not a case of that description. These plaintiffs had not a fraud in contemplation ; and were not in a situation that made it peculiarly incum- bent upon them to take care not to permit a sale at an undervalue.' ]\Ir. Chancellor Kent, in his learned Commentaries (vol. ii. p. 538, 539, 5(h ed.), seems to me to have arrived at the true and just and satisfactory result. ' It would seem,' says he, ' to be the conclusion, from the latter cases, that the employment of a bidder by the owner would or would not be a fraud, according to circumstances tending to show innocence of intention, or a fraudulent design. If he was employed bona fide to prevent a sacrifice of the property under a given price, it would be a lawful transaction, and would not vitiate the sale. But if a number of bidders were employed by the owner, to enhance the price by a pretended competition, and the bidding by them was not real and sincere, but a mere artifice in combination with the owner, to mislead the judgment and inflame the zeal of others, it would be a fraudulent and void sale. So it will be a void sale, if the purchaser prevails on the persons attending the sale to desist from biddings, by reason of sug- gestions by way of appeal to the sympathies of the company.' But, be the general doctrine upon this subject as it may, no case has fallen under my notice, in which it has been held, that the act of the auctioneer in receiving or making false bids, unknown and unauthorized by the seller, would avoid the sale. And upon principle, it is very difficult to see why it should avoid the sale, since there is no fraud, connivance, or aid given by the seller to the false bids. If the purchaser is misled by the false bids of the auc- tioneer to suppose them to be real, he may have an action against the auctioneer for the injury sustained thereby. But what has the innocent man to do with such a transaction, which he has in no sense sanctioned?" 644 ILLEGAL CONTRACTS. [CHAP. XVIII. of contracts wliicli are void either for immorality or because they contravene some rule of public policy. And in the first place, as to contracts which the law repudiates on the ground of immorality. § 670. All contracts in violation of morality, and founded upon considerations contra honos mores, are void. All duties Sec also Kex v. Marsh, 3 Y. & J. 831 ; 1 Story, Eq. Jur. § 245, and note. So, also, Mr. Chancellor Kent, in his Commentaries, lays down the rule, that " in sound policy, no person ought, in any case, to be employed secretly to bid for the owner against the honafide bidder at a public auction. It is a fraud on the very face of the transaction." 2 Kent, Comm. 539. See also Baham v. Bach, 13 La. 287. In Twining v. Morrice, 2 Bro. C. C. 32G, a specific performance was refused upon the ground that the solicitor of the seller was present, and bid, although he, in reality, did not bid for the seller. See the remarks on that case in E.x parte Lacey, 6 Ves. 629, and Townshend v. Stangroom, 6 Ves. 338. See also the note (6) to Purkins's edition of 2 Bro. C. C. 331. The actual b_y-bidding of puffers can, as it would seem, only operate upon the buyers as a deceit, or fraud, or surprise, and must always, if it have any mfluence, be injurious to their interests. The doctrine of Lord Mansfield seems to us to be founded in principle, and to create no practical difficulty ; the onl)- objection that has been offered to it, that it might lead to a sacrifice of goods for less than their value, can be easily obviated by the precautions which he recommends, of setting them up at a certain upset price. This rule is also upheld in the Scottish law. In Anderson v. Stewart (16 Dec. 1814), it was held, that a sale made where puffers were employed could not stand. In this case. Lord Glenlee said: " There is good ground for complaint when the price has been raised by unreal and fictitious offers, for, notwithstanding it is said that a person ought to judge for himself, jot he is entitled to redress if any such improper means are used to draw him on. At the same time, this is a very delicate question. A person going to a public sale takes his chance of biddings being made out of frolic, or out of malice, by persons who have no desire to purchase, but, as they run the risk of the property falling in their hands, he must just take his chance of such things. That, however, is a different case from offers which are altogether fictitious, for against any thing of that kind the purchaser is entitled to redress ; and I think the offers here were fictitious." In Gray v. Stewart and others (7th Aug. 1753), the same doctrine was held, and in the judgment of the court it is said : " The person who advertises a sale by auction pledges his faith to the public that he is to sell to the highest bidder, and is not to buy for himself. In this case the pursuer was really the highest offerer, seeing the offer of a white bonnet is no offer at all." See also Cicero de Officiis, 1. 8 ; Huber, Prcelectiones, xviii. 2, 7. See, however, Moncrieff ti. Goldsborough, 4 Harr. & M'H. 282 ; Donaldson v. M'Roy, 1 Browne (Pa.), 346 ; Morehead v. Hunt, 1 Dev. Eq. 35. CHAP. XVIII.] CONTRACTS VOID ON ACCOUNT OF IMMORALITY. 645 enjoined by the divine law are not enforced, indeed, by the common or statute law, not only because its forms and modes of proceeding do not enable it to adjust nice questions of morals, but because strict rules as to ethicalB|uestions would tend to destroy freedom of opinion, and to affoM opportunities for per- secution. But no agreements to do act*, forbidden by the law of God, or which are manifestly in furtherance of immorality, and tend to contaminate the public mind, are tolerated, or can be enforced by the common law. Thus, all contracts, whether they be by parol, or under seal, to pay a certain sum, on con- sideration of /wtwre illicit intercourse ( premium pudoris et pu- dictice) are utterly void. The general maxim is Bx turpi con- tractu non oritur actio} Some doubt formerly existed whether an agreement in consideration of a past seduction were not enforce- able ; ^ but it has since been decided that such a consideration will not support a parol promise.^ But a sealed contract, made in consideration oipast seduction and cohabitation, or past cohab- itation without seduction, can be enforced ; not merely because it is binding in honor and conscience, for such a reason is not ' Fonbl. Eq. B. 1, ch. 4, § 4, and notes ; 1 Story, Eq. Jur. § 296 ; Walker v. Perkins, 3 Burr. 1568 ; s. c. 1 W. Bl. 617 ; Franco v. Bolton, 3 Ves. 368 ; Gray v. Mathias, 5 Ves. 286 ; Matthews v. L— e, 1 Madd. 558 ; Clarke ». Periam, 2 Atk. 333 ; Binnington v. Wallis, 4 B. & Al. 650 ; 1 Pothier on Obligations, 23 ; 2 ib. 2 ; Co. Litt. 206 6 ; Coolidge v. Blake, 15 Mass. 429 ; Hall v. Palmer, 3 Hare, 532. 2 See Binnington v. Wallis, 4 B. & Aid. 650, 652. * Beaumont o. Reeve, 8 Q. B. 483 ; Fisher v. Bridges, 3 El. & B. 642, 649. In Beaumont v. Reeve, the decision was based on the broad ground that the consideration alleged was only a moral one, not that it was illegal. See Fisher v. Bridges, ut supra. Patterson, J., said : " This declaration appears to be framed on a view suggested by some expressions in Binnington v. Wallis [supra], which point to a distinction between that case and cases where the defendant is the seducer of the plaintiff. But looking at East- wood V. Kenyon [11 A. & E. 438], and Jennings ». Brown [9 M. & W. 496] , it is clear that that circumstance is of no consequence as to the legal right. The seduction could give the plaintiff no direct right of action, and can therefore create no liability of any kind from which a consideration can arise." In Fisher v. Bridges, Jervis, C. J., said: "It is clear that past cohabitation and previous seduction are not good considerations for a parol promise ; but they are not therefore illegal considerations. They are no considerations at all." 646 ILLEGAL CONTRACTS. [CHAP. XVIII. legally sufficient ; but because a specialty imports a consider- ation, which, if not unlawful, both parties thereto are estopped from denying. 1 And a promise to support a bastard child is a sufficient consideration to support an assumpsit.^ The reason wliy a different rule obtains in the last two mentioned classes of cases seems to be, that, in the former class, the contract is executory, or continuing, and to permit it would be to offer a premium for future unchastity ; but in the latter class, the con- tract being executed, the injury is done, and may otherwise be I'emediless ; and there is no principle of law which forbids a party to redress a past injury, or atone for a wrong which he has already committed. ^ If the consideration be illegal, the contract may be avoided by a proper plea, even though it be a specialty, and the illegality be not apparent on the face of the instrument.* A parol contract, however, made upon the con- sideration of past illicit intercourse, is void ; ^ for the con- sideration is merely moral, and is executed. § 671. So, also, a lease of lodgings for the purposes of pros- titution is void.^ And the same rule governs in cases of con- tracts for clothes, or board and lodging, the price of which is to be paid out of the profits of prostitution. But the mere fact that the person to whom board and lodging, or any articles are ' AVImloy V. Norton, 1 Vera. 483; .Matthew v. Hanbury, 2 Vern. 187; Spicer v. Ilayward, Pr. Ch. Hi; Annandale u. Harris, 2 P. Wms. 432; Cray v. Kooke, Cas. t Talb. lo3 ; Turner v. Vaughan, 2 Wils. 339. It is finally settled in England that a promise made in contemplation of past illicit intercourse is void for want of consideration. 2 Kent, Conim. 618, n. 1. See Beaumont v. Reeve, 8 Q. B. 483 ; Jennings v. Brown, 9 M. & W. 496. See ante, § 427, 46.3, and notes. ^ Jennings v. Brown, 9 M. & W. 496 ; Holcomb v. Stimpson, 8 Vt. 141 ; Haven v. Plobbs, 1 Vt. 238. ^ Binnington v. Wallis, 4 B. & Al. 650. ^ Collins V. Blantern, 2 Wils. 341, 347; Com. Dig. Pleader, 2 W. 18, 23, 25, 2(J, 27. ' Matthews v. L — e, 1 Madd. 5J8 ; Binning-ton v. Wallis, 4 B. & Al. 650 ; Beaumont v. Reeve, 8 Q. B. 483 ; Jennings v. Brown, 9 M. & W. 496 ; Eastwood v. Kenyon, 11 Ad. & El. 438. " fJirarily W.Richardson, 1 Esp. 13; Dyett ». Pendleton, 8 Cow. 727, 737 ; Lloyd v. Johnson, 1 Bos. & Pul. 340; Appleton r. Campbell, 2 C. & P. 347 ; Jennings v. Throgmorton, Ry. & :Mood. 2.")1 ; Bowry v. Bennet, 1 Camp. 848, and note. See Commonwealth v. Harrington, 3 Pick. 29, 30' Pearco v. Brooks, Law R. 1 Exch. 213 (1866) ; s. c. 4 H. & C. 358. CHAP. XVIII.J CONTRACTS VOID OX ACCOUNT OF'IMMORALITY. 647 furnished, is a prostitute, does not invalidate the contract therefor, unless the very object of the agreement be to pander to her prostitution.^ So a contract to pay an annuity to the mother of the defendant's illegitimate children is not void, if there be no inducement for future cohabitation ; ^ or, as stated elsewhere, a contract by a father of illegitimate children to pay their mother an annuity for taking charge of and rearing the children, is founded upon a sufficient legal consideration.^ But a contract for the printing or sale of obscene or libellous books and prints is void.^ And if such books or prints be seized in compliance with an order therefor, the seller cannot recover the price.^ So, also, it is a good defence to an action for not supplying manuscript according to agreement, that the matter of the work is libellous and immoral. ^ And no action lies for pirating a book which professes to contain the amours of a courtezan ; and it is no answer to the objection that the de- fendant is also a wrong-doer in publishing them, and that he therefore ought not to set up their immorality as a defence.'^ Contracts for the sale of slaves, being against sound morals and natural right, have no validity except by positive law, and can be enforced only so long as that law exists ; and if repealed, no action lies to enforce a contract made prior thereto.^ § 672. Yet where a contract, founded upon an immoral con- sideration, has been executed, neither law nor equity will inter- fere to set it aside, if both persons have been equally in fault. In such cases the legal maxim. In pari delicto, potior est con- • Bowry v. Bennet, 1 Camp. 348; Williamson v. Watts, 1 Camp. 553; Lloyd V. Johnson, 1 Bos. & Pul. 840 ; Crisp u. Orarcliill, 1 Bos. •& Pul. 840. ' Adams v. Eeade, 2 Irish Jur. (n. S.) 197 (1856). ^ Smith V. Roche, 6 C. B. (n. s.) 223 (1869), disapproving any intima- tion to the contrary in Crowhurst v. Laverack, 8 Exch. 208. See also Jen- nings V. Brown, 9 M. & W. 496 ; Linnegar v. Hodd, 5 C. B. 437 ; Hicks v. Gregory, 8 C. B. 378. " Fores v. Johnes, 4 Esp. 97 ; Poplett v. Stockdale, Ry. & Mood. 337 ; S. c. 2 C. & P. 198 ; Stockdale v. Onwhyn, 2 C. & P. 163. 6 Ibid. « Gale v. Leokie, 2 Stark. 107. ' Stockdale v. Onwhyn, 2 C. & P. 163. ' Buokner v. Street, 1 Dillon, 248 (1871), in which the subject is elab- orately examined. See also Osborn v. Nicholson, ib. 219. 648 ILLEGAL CONTRACTS. [CHAP. XVJL. ditio dcfendcntis, applies. Thus, where money has been paid in consideration of an immoral act, as for instance, of past illicit intercourse, it cannot be recovered, if both parties were equally criminal. ^ So if an illegal contract has been fully exe- cuted, and the money paid under it remains in the hands of a mere depositary, the party for whose use he holds the money may recover it of him.^ But if a party pays another a sum of money to prevent exposure of a violation of law by the party paying, he cannot recover it back.^ And so, if a party ad- vances money to aid another in violating the law, he cannot recover it.* § 673. A distinction, however, is to be made between those cases in which one of the parties has, by an illegal act, taken advantage of the other, or imposed upon him, and those cases in which both parties have been equally in fault. This dis- tinction obtains in cases of usurious contracts, wherein it is considered that the lender has availed himself of the necessi- ties or urgencies of the borrower, to extort from him an unlaw- ful rate of interest ; and an action for money had and received will therefore lie for the excess paid beyond principal and law- ful interest.^ ' This doctrine, though well established in law, long veered about with the opinions of the various equity judges, and relief was often aiforded upon no very well considered ground. The modern rule, however, leaves the parties where it finds them, and affords no relief upon any contracts, tainted with immorality. 1 Story, Eq. Jnr. § 2'J6-298, 303, and cases cited ; Smith V. Bromley, 2 Doug. 697 ; Vandyck v. Hewitt, 1 East, 96 ; Howsou V. Hancock, 8 T. R. .d75 ; Tomkins v. Bernet, 1 Salk. 22 ; Collins v. Blan- tem, 2 Wils. 347; Lowry v. Bourdieu, 2 Doug. 468. See also Worcester i). Eaton, 11 Mass. 375 ; Phelps v. Decker, 10 Mass. 267, 274 ; Bull. N. P. 131, 133. See Immoral Consideration, ante, § 670; Morgan v. GroflF, 4 Barb. .524. = Woodworth v. Bennett, 43 N. Y. 273 (1870). ' Arter v. Byington, 44 111. 468 (1807). " Hall w. Costello, 48 N. H. 176 (1868). 5 1 Story, Eq. Jur. § 296 to 303. Lord IMansfield, in Smith v. Bromley, 2 Doug. 696, says : " If the act is in itself immoral, or a violation of the general laws of public policy, there the party paying shall not have this action [to recover back the money] ; for where both parties are equally criminal against such general laws, the rule is, potior est conditio defendentis. But there are other laws which are calculated for the protection of the sub- ject against oppression, extortion, deceit, &c. If such laws are violated, CHAP. XVIII.] CONTRACTS IN VIOLATION OP PUBLIC POLICY. 649 CONTRACTS IN VIOLATION OP PUBLIC POLICY. § 674. We no-w come to the third class of illegal contracts, namely, conti-acts which violate the rules of public policy. The rule of law, applicable to this class of cases, is, that all agreements which contravene the public policy are void, whether they be in violation of law or of morals, or tend to interfere with those artificial rules which are supposed by the law to be beneficial to the interests of society, or obstruct the prospective objects flowing indirectly from some positive legal injunction or prohibition.^ § 675. Public policy is in its nature so uncertain and fluctuating, varying with the habits and fashions of the day, with the growth of commerce and the usages of trade, that it is difficult to determine its limits with any degree of exactness. It has never been defined by the courts, but has been left loose and free of definition, in the same man- ner as fraud. This rule may, however, be safely laid down, that wherever any contract conflicts with the morals of the time, and contravenes any established interest of society, it is void, as being against public policy.^ § 676. The enlargement of trade and the growth of cities, with the new and various relations created thereby, have ren- and the defendant takes advantage of the plaintiff's condition or situation, there the plaintiff shall recover ; and it is astonishing that the reports do not distinguish between the violation of the one sort and the other." Astley v. Reynolds, 2 Str. 916 ; Browning v. Morris, 2 Cowp. 790 ; Vandyck v. Hewitt, 1 East, 98 ; Worcester v. Eaton, 11 Mass. 876, 377. ' 1 Story, Eq. Jur. § 294 to 305. ' " The power of courts to declare a contract void for being in contra- vention of sound public policy is a very delicate and undefined power, and, like the power to declare a statute unconstitutional, should be exercised only in cases free from doubt." Richmond v. Dubuque, &c., R. R. Co., 23 Iowa. 191 (1868), per Coles, J. The case under consideration was a monopoly. A written contract, upon good consideration, and without fraud or undue influence, wherein one party binds himself to devise his real estate to another, is not against public policy ; and the heirs or legatees of the promisor may be held liable for a failure to fulfil it. Parsell v. Stryker, 41 N. y. 480 (1869) ; Johnson v. Hubbell, 5 Am. Law Reg. 177. And see Rivers v. Rivers, 3 Desaus. 195 ; Jones v. Martin, 3 Anst. 882 ; Podmoro v. Gunning, 7 Sim. 644 ; Stephens v. Reynolds, 2 Seld. 458. 650 ILLEGAL CONTRACTS. [CHAP. XVIII. dered many species of contracts valid, which were formerly- considered to conflict with public policy. For instance, fore- stalling, which is the buying and contracting for any merchan- dise or victual on its way to the market, or dissuading persons from bringing their provisions there ; regrating, which is the bujdng of corn and dead victual in any market, and reselling it within four miles of the place where it is bought; and en- grossing, which is the purchasing of large quantities of dead victual or corn, to sell again, — all of which were formerly considered to be against public policy, when trade was small, and money scarce, and markets few, constitute, at the present day, great arteries of commerce, and are the very form and pressure of certain branches of trade. Indeed, without them, what would become of wholesale commission merchants and jobbers ? § 677. A general example of a contract against the public policy of the present day is to be found in a confederation or combination of persons for the purpose of preventing competition at an auction sale, and of depressing the price of the property below its fair market value. Thus, if two or more persons should agree not to bid against each other at auction, but that one should bid, and then divide with the others the subject- matter of sale, the agreement would be absolutely void, and in- capable of ratification,! on the ground that it tends injuriously to affect the character and value of sales by auction.^ So a contract between two persons, each of whom sends in sealed proposals for the collection of town taxes, that they should share equally in the profits and losses, whoever should obtain the contract, is against public policy, and void ; without any proof that any injury arose in the particular case.^ But if an association of bidders be formed for honest and just purposes, and do not conflict with the rights and interest of the seller, — as, if it be for the purpose of enabling them to purchase together, what ' Wheuler v. Wheeler, 5 Lans. 355 (1872). = Ante, § 637 ; 1 Story, Eq. Jur. § 293 to 302 ; Doolin «. Ward, 6 Johns. 194; Wilbur v. How, 8 Johns. 444; Thompson v. Davies, 13 Johns. 112; Jones V. Caswell, 3 Johns. Cas. 29; Toler v. Armstrong, 4 Wash. C. C. 297; 11 Wheat. 258; Gardiner v. Morse, 25 Me. 140. ' Atcheson v. Mallon, 43 N. Y. 147 (1870). And see Mills v. Mills, 40 N. Y. 545 ; Gulick v. Ward, 5 Halst. 87. CHAP. XVm.j CONTEACTS IN VIOLATION OP PUBLIC POLICY. 651 they could not purchase separately, — their agreement will be valid, as being no fraud on the public, while it is a positive advantage to the seller. It must, in such cases, be clearly proved, that the association was for honest and just purposes, and did not operate as a fraud, or any agreement between the parties not to bid against each other will be void.^ So a con- tract between creditors, for whose benefit an assignment is made by a debtor of all his property, and the assignee, that the latter may buy the property at the auction sale and apply the pro- ceeds to their debts, is not void as tending to prevent competi- tion at the sale.^ So, also, two or more persons may agree together to purchase property sold by auction, and fix the price which they are willing to give, and appoint one of their number to bid for them ; for such an agreement could operate to the injury of no one.^ But an agreement to create " a cor- ner " in stock, by buying it up so as to control the market, and then purchase for future delivery, is illegal and void. * And an agreement by a turnpike corporation, to grant to certain indi- viduals the privilege of passing the gate free from toll, in consideration of their withdrawing their opposition to a legisla- tive act, touching the alteration of the road, has been held to be void, as being prejudicial to fair and unbiassed legislation.^ 1 Phippen v. Stickney, 3 Met. 384, 387 ; Smull v. Jones, 1 Watts & Serg. 128 ; Smith v. Greenlee, 2 Dey. 126 ; Wolfe v. Luyster, 1 Hall, 146 ; Jen- kins V. Hogg, 2 Const. 821. In New York, however, this distinction is not adhered to, but in all cases an agreement not to bid against particular per- sons, or not to bid at all, is treated as a fraud. See Jones v. Caswell, 3 Johns. Gas. 29 ; Doolin v. Ward, 6 Johns. 194 ; Wilbur v. How, 8 Johns. 444; Thompson v. Davies, 13 Johns. 112. See also Dudley?;. Little, 2 Ohio, 504 ; Piatt v. Oliver, 1 McLean, 295 ; Gulick v. Ward, 5 Halst. 87. ^ Bradley v. Kingsley, 43 N. Y. 534 (1871). And see Phippen v. Stick- ney, 3 Met. 384; ^muU v. Jones, 1 Watts & Serg. 128. ' Smull V. Jones, 6 Watts & Serg. 122. An agreement by the subscribers to a charity to vote for the same candidate for aid is not against publif policy. Bolten v. Madden, Law R. 9 Q. B. 55 (1873). * Sampson v. Shaw, 101 Mass. 146 (1869). ' Pingry u. Washburn, 1 Aik. 264. See Simpson v. Lord Howden, 1 Keen, 583 ; s. c. 3 Myl. & Cr. 97 ; Lord Howden v. Simpson, 10 Ad. & El. 793; The Vauxhall Bridge Co. v. Earl Spencer, 2 Madd. 356; Jacob, 64; Edwards v. Grand Junction Eailway Co., 1 Myl. & Cr. 650; Hah v. Dyson, 17 Q. B. 785 ; 10 Eng. Law & Eq. 424, and Bennett's note. 652 ILLEGAL CONTRACTS. [CHAP. XVIIL So, a contract to erect a building for a school district, issued by a board of directors to one of their own number, who takes part in letting the contract, is void as against public policy, the two positions being antagonistic.-' § 678. In the consideration of contracts against public policy, we shall somewhat arbitrarily divide the suljject into the follow- ing heads : 1st. Contracts in Restraint of Trade ; 2d. Con- tracts in Restraint of Marriage ; 3d. Marriage Brokage Con- tracts; 4th. Wagers and Gaming; 5th. Contracts to offend against the Law and Public Duty ; 6tli. Usury ; 7th. Trading with an Enemy. CONTRACTS IN RESTRAINT OP TRADE. ^ § 679. An agreement in general or total restraint of trade is void, although it be founded on a legal and valuable considera- tion. And this doctrine was held at as early a period as during the second year of the reign of Henry V., in the Year-Book of which 3'ear (1415) a case is reported where a weaver, in a moment of passion against his trade, gave a bond never to carry it on more, and suit was brought thereupon. Whereupon Mr. Justice Hall, in a violent burst of indignation, exclaimed, " A ma intent vous pur res aver demurre sur luy que 1' obliga- tion est voide, eo que le condition encountre common ley, et per Dieu, si le plaintiff fuit icy, il irra al prison, tanqu'il ust fait fine an Roy." In commenting on which language, Lord Macclesfield, in a much later case, says : ^ " I cannot but ap- prove of the indignation that judge expressed, though not his manner of expressing it." The same rule has been uniformly adhered to, even to the present day, and the attempt, which was at one time made to restrict it by raising a distinction be- tween parol and sealed contracts, never obtained. An agree- ment, therefore, not to carry on a certain business anywhere, is invalid, whether it be by parol or specialty, or whether it be for a limited or for an unlimited time ; ^ as an agreement not 1 Pickett V. School Dist. No. 1, 25 Wis. 551 (1870). ^ See Treat v. Shoninger Melodeon Company, 35 Conn. 513 (1869) ; Jones ('. Lees, 1 H. & N. 189 (1856). ^ Mitchel V. Reynolds, 1 P. Wnis. 193. ■* Mitchel V. Reynolds, 1 P. Wnis. 181, where the subject is elaborately discussed. Homer v. Ashford, 3 Bing. 323 ; Pierce v. Fuller, 8 Mass. CHAP. XVni.] CONTRACTS IN RESTRAINT OP TRADE. 653 to run a steamboat in any of the rivers, bays, or waters of a State for ten years.^ The reason of this rule is said to be, that the tendency of such agreements would be to promote monopo- lies, to check competition, enterprise, and industry, and to de- prive the public of b(?neficial services and labors.^ Thus, where A. gave a bond by which he bound himself never afterwards " in his own name, or in the name of another, to conduct, carry on, use, or employ the art, trade, or occupation of an iron- founder or caster, or be concerned, interested, employed, or engaged, directly or indirectly, in any manner whatsoever, or under any pretence whatsoever, in the business of founding or 223 ; Nobles v. Bates, 7 Cow. 307 ; Morris o. Colman, 18 Ves. 437 ; 1 Pow. on Cont. 167 ; Hitchcock v. Coker, 6 Ad. & El. 438 ; 2 Comyn on Cont. 467, 1st ed. ; Gale v. Reed, 8 East, 80; Com. Dig. Trade; Archer v. Marsh, 6 Ad. & El. 967 ; liinde v. Gray, 1 Man. & Grang. 195 ; Alger v. Thacher, 19 Pick. 61 ; Lange v. Work, 2 Ohio St. 519. ' Wright V. Ryder, 36 Cal. 342 (1868). ' Parker, C. J., in Mitchel v. Reynolds, 1 P. Wms. 190, states the reasons for this rule to be : " 1st. The mischief which may arise from them, 1st, to the party by the loss of his livelihood and the subsistence of his family ; 2dly, to the public, by depriving it of a useful member. Another reason is the great abuses these voluntary restraints are liable to ; as, for instance, from corporations, who are perpetually laboring for exclusive advantages in trade, and to reduce it into as few hands as possible ; as likewise from masters, who are apt to give their apprentices much vexation on this account, and to use many indirect practices to procure such bonds from them, lest they should prejudice them in their custom, when they come to set up for themselves. 3dly. Because in a great many instances they can be of no use to the obligee, which holds in all cases of general restraint throughout England ; for what does it signify to a tradesman in London what another does at iSTewcastle? and surely it would be unreasonable to fix a certain loss on one side, without any benefit to the other. The Roman law would not enforce such contracts by an action. See Puff. Lib. 5, c. 2, sect. 3 ; 21 H. 7, 20. 4thly. The fourth reason is in favor of these contracts, and is, that there may happen instances wherein they may be useful and beneficial, as to prevent a town from being overstocked with any particular trade ; or in case of an old man, who finding himself under such circumstances either of body or mind as that he is likely to be a loser by continuing his trade ; in this case, it will bo better for him to part with it for a consideration, that by selling his custom, he may procure to himself a livelihood, which he might probably h.ave lost by trading longer. 5thly. The law is not unreasonable, as to set aside a man's own agreement for fear of an uncertain injury to him, and fix a cer- tain damage upon another ; as it must do, if contracts with a consideration were made void." 654 ILLEGAL CONTRACTS. [CHAP. XVIII. casting in iron," it was held, that as it purported to exclude A. everywhere, and at all times, from a participation in the trade or business referred to, it was void, as being against public policy .1 So, also, a covenant by the lessor of a brewery that he will not, during the continuance of the demise, carry on the business of a brewer or merchant, or agent for the sale of ale, &c., in S. and elsewhere, or in any other manner whatsoever be concerned in the said business, is void, as being a general restraint of trade.^ So, of a covenant not to carry on a certain trade at any place within the United States.^ So, a contract not to carry on the business of making or selling shoe-cutters " within the Commonwealth of Massachusetts," is void as in restraint of trade.* So, " throughout the State of New York." ^ So, of " all the territory west of Albany." ^ The purchase of an exclusive right to the use of a patent or secret is not, however, within the rule.''' But a contract by which the lessee of a mine agreed to use his influence with his employees to induce them to trade only at the store of the lessor, and that the lessee would accept no order given him by his employees for goods purchased elsewhere, and that he would neither give an order on any other store, nor any note or other evidence of indebtedness to be transferred to any other store, is in restraint of trade and un- lawful.^ On the other hand, a contract in restraint of the sale of liquor is not illegal in those States in which it is restrained by statute.' § 680. But an agreement in partial restraint of trade, re- stricting it within certain reasonable limits, as in one county.^" or within reasonable times,!^ or confining it to particular per- ' Algor V. Thacter, 19 Pick. 53. = Hinde V. Gray, 1 Man. & Grang. 195 ; s. c. 1 Scott, N. R. 123. ' Lange v. Work, 2 Ohio St. 520. * Taylor v. Blanchard, 13 Allen, 370 (1866). ' Lawrence v. Kidder, 10 Barb. 641. See Dunlop v. Gregory, 6 Seld. 241. ° Lawrence v. Kidder, 10 Barb. 641. ' Vickery v. Welch, 19 Pick. 623. « Crawlbrd B. Wick, 18 Ohio St. 199 (1868). » Harrison ». Lockhart, 25 Ind. 112 (1865). '» Lange v. Werk, 2 Ohio St. 519 ; Studabaker v. White, 81 Ind. 211 (1869). " See Hastings v. Whitley, 2 Exch. 611 ; Sainter v. Ferguson, 7 C. B. 716 ; NichoUs v. Stretton, 10 Q. B. 346 ; Bowser v. Bliss, 7 Blackf. 344. CHAP. XTIII.] CONTRACTS IN RESTRAINT OP TRADE. 655 sons, -would, if made upon a legal consideration, be valid.^ And this modification of the rule obtained as early as during the eighteenth year of the reign of James I. (1621). ^ Such an agreement not only does not obstruct trade, but is often- times requisite and necessary, as well for the advantage of the public as of the individual.^ Yet such a contract, though it be under seal, requires a sufficient consideration, which must be either apparent on the face of the deed, or exist in fact, or, if contested, be established by proof.* This is, perhaps, the only exception to the general rule, that a specialty imports a consideration which cannot be denied by either party, although its failure or illegality may be shown aliunde. But in cases of thi s kind, the consideration may be disproved ; although it is other- wise, if it is apparent upon the deed, when it will be presumed to be sufficient.^ But if a sufficient consideration be admitted in the pleadings, the deed in restraint of trade will be sustained, although it do not, in its terms, express the exact consideration. Thus, where the plaintiff declared that the defendant, for the consideratibn mentioned in the deed declared upon (which the plaintiff brought into court), covenanted to submit to certain restrictions of trade, which covenant he broke, it was held, on general demurrer, that the consideration was sufficiently stated.^ It is not necessary, however, that the consideration should be adequate, in point of fact ; for a consideration which would be legally sufficient to support a simple contract, will be ordinarily sufficient to support an agreement for a particular and partial ' Rannie v. Irvine, 7 Man. & Grang. 976 ; Chappel v. Brockway, 21 Wend. 157 ; Hartley v. Cummings, 5 C. B. 247 ; McClurg's Appeal, 58 Penn. St. 61 (1868) ; Gomper^ v. Rochester, 56 Penn: St. 194 (1867) ; Jenkins v. Temples, 39 Ga. 656 (1869). ^ Broad V. JoUyfe, Cro. Jac. 596. 3 Bunn V. Guy, 4 East, 190 ; Mitchel v. Reynolds, 1 P. Wms. 181 ; Pierce B. Woodward, 6 Pick. 206 ; Perkins v. Lyman, 9 Mass. 622 ; Hayward v. Young, 2 Chitty, 407 ; Hitchcock v. Coker, 1 Nev. & Per. 796 ; 8. c. 6 Ad. & El. 438 ; Homer v. Ashford, 8 Bing. 322 ; Shackle v. Baker, 14 Ves. 468 ; Palmer v. Stebbins, 3 Pick. 188 ; Davis v. Mason, 6 T. R. 118. See also Mallan v. May, 11 M. & W. 653 ; Wickens v. Evans, 3 Y. & J. 318. * Mitchel V. Reynolds, 1 P. Wms. 181 ; Hutton v. Parker, 7 Dowl. P. C. 439. 5 Homer v. Ashford, 3 Bing. 322. ' Ibid. 656 ILLEGAL CONTRACTS. [CHAP. XVIIl. restraint of trade.^ Thus, one dollar was held to be a suffi- cient consideration for a contract not to run a stage-coach in ' See T.illis v. Tallis, 1 El. & B. 897, n. ; 18 Eng. Law & Eq. 162, where Lord Campbell said: " The law relating to contracts in restraint of trade has been altered by late decisions. For many years the contract was void, unless the consideration was adequate to the restriction. According to Par- ker, C. J., in Mltchel v. Reynolds, 1 P. Wms. 181, the court was to see that it was made upon a good and adequate consideration, so as to be a proper and useful contract. But in Hitchcock v. Coker, 6 Ad. & EI. 438, it was held that the court had no judicial perception of the ratio of the consideration to the restriction ; and that, if there was a legal consideration of value, the contract ought to be enforced without reference to the quantum of that value. Also in Mitchel v. Reynolds, 1 P. Wms. 192, it is said : ' AVherever such contract stat indifferenter, and for aught appears, maj'be either good or bad, the law presumes it j^rimd Jade to be bad.' But according to the tenor of the later decisions, the contract is valid unless some restriction is imposed beyond what the interest of the plaintiff requires ; and his interest has been considered to extend very widely. In respect of time, the restriction may be unlimited, according to Hitchcock v. Coker, 6 Ad. & El. 438 ; and though, in respect of space, there must be some limit, yet contracts have been supported where the area of exclusion was apparently greater than the area of the plaintiff's practice. In Homer v. Graves, 7 Bing. 744, where the area of exclusion from practice as a dentist was a circle round York of the diameter of two hundred miles, in giving judgment that this was an unnecessary restriction, it is laid down : ' unless the case was such that the restraint was plainly and obviously unnecessary, the court would not feel itself justified in interfering.' And in Mallan v. ^Nlay, 11 M. & W. 667, where exclusion from the practice of a dentist in London, although containing above a million of inhabitants, was held to be reasonable and valid, the court says : ' It would be better to lay down such a limit as, under any circumstances, would be sufficient protection to the interest of the contracting party, and if the limit stipulated for does not exceed that, to pronounce the contract to be valid.' Applying these principles to the present case, and considering that the plaintiff's business, to which the covenant relates, is the diffusion of books published by him in the manner allegeil, and thus is almost uncon- nected with any particular locality, we cannot find that the exclusion of the defendant from London, and from one hundred and fifty miles round the general post-office, and from Liverpool and Manchester, was unreason- able ; and we are therefore of opinion that the plaintiff had a good cause of action in the breaches of contract which he has assigned." See also Law- rence V. Kidder, 10 Barb. 649. In this case Scldcn, J., said: " But while contracts which thus go to the restraint of trade throughout an entire State or country, are uniformly void, those which impose restraint upon it only in a particular town or district, are sometimes held valid. The principal diffi- culty attending the whole subject is to ascertain the precise nature of this CHAP. XVIII.] CONTRACTS IN RESTRAINT OF TRADE. 657 opposition to the plaintiff.^ And ten shillings was held to be a sufficient consideration for an agreement not to keep a draper's shop in Newgate market.^ If there be no consideration, however, or if the consideration be of no real value, and merely colorable, the contract in restraint of trade, which, in itself, the law never favors, must be either a fraud upoa the parties restrained, or a mere nude pact ; and in either case it would be void.* § 681. The limitations of such a contract must be reasonable in regard both to time and to place. The test of the reasonable- ness of any restriction is, whether it is such as only affords a fair protection to the party in whose favor it is made, and at the same time does not militate with the public interest. If it be greater th-an is necessary to insure the protection of the party, it is oppressive, and therefore unreasonable.* Thus, a contract entered into by a practising attorney, for a valuable consideration, that he would relinquish and make over to B. & G., two other attorneys, his business of attorney, so far as re- spected his professional practice in London, and one hundred and fifty miles from thence, and that he would not practise as an attorney within those limits, was holden to be valid, although there was no limitation of time.^ So, also, an agreement not to run a stage-coach between Providence and Boston, in oppo- exception to the general riile, and the reasons upon which it is founded. In many of the early cases the language of the courts would seem to imply that the adequacy or extent of the consideration had something to do with the validity of the contract. They say that a mere pecuniary consideration is not sufficient ; that there must be something, although it does not appear very clearly what, added to this to support the contract. This idea, how- ever, of the necessity of any greater or other consideration for a contract of this description, than any other, was obviously unfounded, and has been exploded by the recent cases. Hitchcock v. Coker, 6 Ad. & El. 438 ; Green V. Price, 13 M. & W. 698." 1 Pierce v. Fuller, 8 Mass. 223. " Bragg V. Tanner, cited Cro. Jac. 597. See also Steams ». Barrett, 1 Pick. 443 ; Palmer v. Stebbins, 3 Pick. 188. » Hitchcock V. Coker, 6 Ad. & El. 438. * Horner v. Graves, 7 Bing. 735 ; Ward v. Byrne, 5 M. & W. 548 ; Green v. Price, 13 M. & W. 695 ; 16 M. & W. 346 ; Kannie v. Ii-vine, 8 Scott, N. R. 674 ; 7 Man. & Grang. 969 ; Mallan v. May, 11 M. & W. 653 ; Hitchcock V. Coker, 6 Ad. & El. 438 ; Lange v. Werk, 2 Ohio St. 520. * Bunn V. Guy, 4 East, 190, cited and recognized by Tindal, C. J., in Hitchcock V. Coker, *6 Ad. & EL 455 ; s. c. 1 Nev. & Per. 796. VOL. I. 42 658 ILLEGAL CONTRACTS. [CHAP. XTIII. sition to the plaintiff's stage-coach,' and an agreement not to be interested in any voyage to the north-west coast of America, or in any traffic with the natives of that coast, for seven years, were both held to be valid.^ But an agreement prohibiting to a person the pursuit of a certain trade throughout the State of New York, has been heid to be a contract in total restraint of trade, within meaning of the rule of the common law.^ § 682. There is a distinction to be observed between restric- tions as to place, and restrictions as to time. A general re- striction as to place will vitiate a contract ; * but a general > Pierce v. Fuller, 8 Mass. 223; Hearn v. Griffin, 2 Chitty, 407. See Clark V. Crosby, 37 Vt. 188 (1864). ^ Perkins v. Lyman, 9 Mass. 522. ' Lawrence v. Kidder, 10 Barb. 653. In this case, Selden, J., said: " The next question is, whether in passing upon contracts of this descrip- tion we are to confine our views to our own State, or whether we are to look at the whole United Statej as constituting a single state or nation. In other words, whether the same rules are to be applied to a contract embrac- ing the State of New York alone, as by the common law has always been applied to those embracing the whole territory of Great Britain. "This question involves a variety of considerations, and admits perhaps of considerable discussion. But there are one or two leading ideas, which, in my view, are decisive of it. In the first place, the people of this State have no control over, or influence upon, the municipal laws of the other States. They may, if they please, impose the most burdensome restrictions upon particular trades. Wo cannot say, therefore, that a restraint which is coextensive with this State leaves the residue of the union open to the party to pursue unrestrained the same trade. Again, it is repugnant to the general frame and policy of our government to regard the union, in respect to our ordinary internal and domestic interests, as one consolidated nation. For all these purposes each State is a separate community, with separate and independent public interests. It is by no means the same thing to the people of this State, whether an individual carries on his trade within or without its borders. I am, therefore, of the opinion, independent of author- ity, that a contract prohibiting to an individual the pursuit of any trade or employment throughout the State of New York, should be regarded as a contract in total restraint of trade within the rule of the common law. "This seems to have been the view taken by the supreme court in the case of Chappel v. Brockway, 21 Wend. 157, before referred to; although it does not appear that the point was then raised, nor did the case necessarily involve it. Judge Bronson says, that 'contracts which go to the total restraint of trade, as that a man will not pursue his occupation or carry on business anywhere in the State, are void.' " " Ward V. Byrne, 5 M. & W. 548 ; Lawrence v. Kidder, 10 Barb. 653 ; CHAP. XVIII.] CONTBACTS IN RESTRAINT OP TRADE. 659 restriction as to time will not of itself constitute a sufficient ground to avoid it. If, therefore, the contract restrict the de- fendant from carrying on a trade within a space far greater than is necessary to protect the plaintiff in the enjoyment of his trade, the restriction would be considered as unreasonalile, and could not be enforced. The reasonableness of the dis- tance, prescribed by the terms of the agreement, will vary, of course, with the peculiar circumstances of each case, and must depend upon the populousness of the neighborhood, the nature of the trade or profession, and the mode in which it is carried on.i But the fact that the agreement in restraint of trade is indefinite, in respect to its duration, will not, avoid it, if, in other respects, it be reasonable. Thus, where the condition of' a bond was, that the obligor, after leaving the service of the . obligee, should not set up business in a shop within half a mile Hitchcock V. Coker, 6 Ad. & El. 438 ; Tallis v. Tallis, 1 El. & B. 397, n. ; 18 Eng. Law & Eq. 162. ' See the remarks of Parke, B., in Ward v. Byrne, 5 M. & W. 548; Hinde v. Gray, 1 Scott, N. E. 123 ; Hitchcock v. Coker, 6 Ad. & El. 455 ; s. c. 1 Nev. & Per. 796 ; Horner v. Graves, 7 Bing. 735 ; Archer v. Marsh, 6 Ad. & El. 967 ; s. c. 2 Nev. & Per. 562. In Proctor v. Sargent, 2 Man. & Grang, 33, Tindal, C. J., said : " I think the rule is properly laid down in Hitchcock V. Coker, where it is said that ' where the restraint of a party from carrying on a trade is larger and wider than the protection of the per- son with whom the contract is made, can possibly require, such restraint must be considered as unreasonable in law, and the contract which would enforce it must therefore be void.' Although a contract restraining a party from carrying on the business of a dentist within one hundred miles round York was decided to be unreasonable in Horner v. Graves, it does not follow that we are tb hold in this case that a radius of five miles is also unreason- able. This must depend upon the population, the nature of the business, and how far it is ramified in that radius, and upon other circumstances of which we are not bound to take notice. Also, I think that when we are deciding upon the unreasonableness of a contract of this kind, we cannot leave out of consideration the duration of the restraint ; for, although I admit that where we once hold a restriction to be unreasonable ?n point of space, the shortness of the time for which it is imposed will not make it good, yet where the question is, whether the restraint is unreasonable or not, in point of space, that which would be unreasonable were it to continue for any length of time, may not be so when it is to last only for a day or two. I approve of th6 ruling in Ward v. Byrne, but I deny its application to the present case. I think that we cannot hold that the contract set out in this declaration is void, and that our judgment must be for the plaintiff." 660 ILLEGAL CONTRACTS. [CHAP. XVIII. of the obligee, during his life, the restriction, although indefi- nite in point of time, was held to be good.^ So, also, where a surgeon took an assistant, who entered into a bond not to practise on his own account, for fourteen years, within ten miies of the place where the surgeon lived, the bond was held to be good.^ So, of a contract not to engage in business within sixty miles of a place named, within ten years. ^ And where a special distance is stated, it is to be estimated by the shortest mode of access, if such a construction would subserve the pur- poses of the contract.* The well settled rule seems to be that if a party covenants not to do an act within a certain distance of a given place, the proper mode of admeasurement is to draw a circle round such place of the radius of such distance ; or, in other words, to measure the distance by a straight line upon a horizontal plane, or as the crow flies.^ Contracts in partial re- straint of trade are not only valid at law but may be enforced in equity.^ § 683. The question whether a restriction of trade is or is not reasonable, is one of law for the court, and not of fact for the jury ; and the tendency in the courts has been to construe all restrictions liberally, and not strictly.'' But whenever a 1 Hitchcock V. Coker, 6 Ad. & El. 453 ; Leighton v. Wales, 3 M. & W. 550 ; Archer v. Marsh, 6 Ad. & El. 966 ; s. c. 2 Nev. & Per. 562. See also Pemberton v. Vaushan, 10 Q. B. 87 ; Price v. Green, 16 M. & W. 346. " Davis V. Mason, 5 T. R. 118. See also WaUis v. Day, 2 M. & VV. 273. ' Whitney v. Slayton, 40 Me. 224. '■ Woods V. Dennett, 2 Stark. 89, by Lord EUenborough ; Leigh v. Hind, 9 B. & C. 774, per Lord Tenterden, C. J., and Littledale, J. Parke, J., thonj;ht the distance should be estimated by an air-line, or "as the crow flies." * Mouflet V. Cole, 25 Law Times (n. s.), 839; Law R. 7 Exch. 70 (1871). The defendant covenanted with the plaintiff, to whom he had sold a public-house, that he would not engage in the business of the keeper of a public-house "within the distance of one-half of a mile of the said prem- ises." Held (per Martin and Channell, BB.), that the distance should be measured upon the principle above stated. Held (per Cleasby, B.), that the subject-matter of the covenant should be considered, and that in this case the distance should be measured as a travelled distance from the one house to the other. « Guerand v. Dandelet, 32 Md. 561 (1870) ; Catt v. Tourle, Law R. 4 Ch. 659. ' Mallan v. May, 11 M. & W. 053 ; Proctor v. Sargent, 2 Man. & Grang. CHAP. XVIII.J CONTRACTS IN RESTRAINT OP TRADE. 661 contract is made in restraint of trade, the burden of showing that it is valid and reasonable, and founded on a good consid- eration, rests on the party seeking to enforce it.^ 31. But see Lawrence v. Kidder, 10 Barb. 650. In this case tie doctrines relating to restraint of trade are ably and elaborately considered, and Selden, J., in delivering the judgment of the court, says: "It is said in many of the cases that the contract must be reasonable ; that it must not impose restrictions upon one party which are not beneficial to the other. In the leading case on the subject, referred to in all the later cases, Ch. J. Parker says, that in order to uphold a contract of this kind, it must appear ' that it was reasonable for the parties to enter into it ; that it was a proper and useful contract, and such as could not be set aside without injury to a fair contractor.' Mitchel v. Reynolds, 1 P. Wms. 181. And in the late case of Chappel v. Brockway (21 Wend. 157), before cited. Judge Bronson says that, ' whatever may be the pecuniary consideration, it must appear in addition that there was some good reason for entering into the contract, and that it imposes no restraint upon one party which is not beneficial to the other.' All this, however, about the reasonableness of the contract, its benefits to the one or the other party, the inadequacy of a pecuniary consid- eration, &o., is obviously founded upon the erroneous idea that in regard to this species of contract, the law, not content with effectually protecting the rights of the public, undertakes to extend its guardianship over the private interests of the parties concerned — to supervise their acts with a view to their own individual advantage. This notion cannot be reconciled with that uniform policy which leaves parties to make whatever contracts they please, provided no legal or moral obligation is thereby violated or any public interest impaired, nor with some of the adjudications on this particular sub- ject. Judge Bronson himself, in Chappel v. Brockway, while he adopts the phraseology of some of the old cases, notices the fact that the cases of Pierce v. Fuller (8 Mass. 223) and Palmer v. Stebbins (3 Pick. 188) can- not be reconciled with the idea implied by that phraseology, and yet he says, that it does not appear that the court (in those cases) intended to lay down a new rule. . . . The whole doctrine on the subject may be summed up in this : that the law will tolerate no contract which upon its face goes to prevent an individual for any time, however short, from rendering his ser- vices to the public in any employment to which he may choose to devote himself; nor one which deprives any section of the country, however small, of the chances that the obligor in such contract may furnish to it the accom- modation arising from the prosecution of a particular trade, unless it appear that the obligee himself intends to and can supply such accommodation. "I am not here establishing any new rule. It is the doctrine to be deduced from all the cases, taken together, and it harmonizes with them all. Thus construed, there is no conflict among the authorities, so far as the points adjudicated are concerned, although many dicta may, no doubt, be ■ found, which are more or less inconsistent with the view here taken." ' Ross V. Sadgbeer, 21 Wend. 166. 662 ILLEGAL CONTRACTS. [CHAP. XTIIL § 684. Another class of contracts has been held in England to be in restraint of trade, and therefore illegal at common law, namely, contracts among employers in different establishments as to the wages of their men, the time and hours of their labor, and the discipline and management of their business ; and, by inference, contracts arising by combinations among workmen for the purpose of raising their wages. Contracts for such purposes, if not punishable criminally, are nevertheless incapa- ble of being enforced against the respective parties to them.i ' Hilton V. Eckersley, 6 El. & B. 47, 66 (1855-56) ; 32 Eng. Law & Eq. 198; 34 ib. 224. Alderson, B., said: "This was an action by which the plaintiff sought to enforce a bond against the defendant. The condition of the bond recited that the defendant and seventeen other obligors, being respectively owners and occupiers of mills and other premises in Wigan and the neighborhood, carried on their business of spinners and weavers of cot- ton yarn and cloth, and employed many work-people and servants ; and that certain societies or combinations subsisted in the neighborhood amongst divers persons, whereby persons willing to be employed were deterred by a reasonable fear of social persecution and other injuries from hiring them- selves to work at the said establishments ; and that thereby the legal control of the obligors over their property and estabhshments was injuriously inter- fered with ; and that these combinations were sustained by funds arbitrarily ■ levied and extracted from the workmen employed by the obligors and receiving wages from them ; and that it was necessary to take measures for vindicating their legal rights to the control and management of their own property, which would best sustain the rights of the laborer to the free disposal of his skill and industry ; and that, to effect this, the obligors had agreed to carry on their works in regard to the amount of wages to the laborer to be employed therein, and the times and periods of the engage- ments of work-people, and the hours of work, and the suspending of work, and the general discipline of their works and establishments (in conformity to law) for the period of twelve months from the date of the bond, in con- formity with the resolutions of a majority of the said obligors present at any meeting to be convened as therein meiitioned ; and that, fur that purpose, they had entered into the bond ; and the condition of the bond was therein stated to be that, if the several obligors and their partners should so carry on their works for twelve months in conformity with the resolutions of such majorit)-, the bond as to £500, in which each was to be bound, should be void ; otherwise to be in full effect. The plea concluded with an averment that, sa\'e as aforesaid, there was no consideration for execution of the bond by defendant ; and that the bond was in restriction of trade, and illegal and void. "To this plea there was a demurrer. And, on its being argued before the judges of the Court of Queen's Bench, the majority of that court gave CHAP. XVIII.j CONTRACTS IN RESTRAINT OF TRADE. 663 § 685. There is another class of contracts of an analogous character, whereby a person is restricted from dealing with judgment in favor of the plea. We are of opinion that the judgment was right, and ought to be affirmed. " The question is, whether this is a bond in restraint of trade : and we think it is so. Prima facie, it is the privilege of a trader in a free country, in all matters not contrary to law, to regulate his own mode of carrying it on according to his own discretion and choice. If the law has in any matter regulated or restrained his mode of doing this, the law must be obeyed. But no power short of the general law ought to restrain his free discretion. Now here the obligors to this bond have clearly put themselves into a situation of restraint. ' ' First, each of them is prevented from paying any amount of wages except such as the majority may fix, whatever may be the circumstances of the work to be done and his own opinion thereon. Secondly, they can only employ persons for such times and periods as the majority may fix on, however much the minority may deem it for their own interest to do other- wise. The hours of work, the suspending of work, partially or altogether, the discipline and management of their establishments, is to be regulated by others forming a majority, and taken from every individual member. And all this for a fixed period of twelve months. All these are surely regulations restraining each man's power of carrying on his trade according to his discretion, for his own best advantage, and therefore are restraints on trade not capable of being legally enforced. "We do not mean to say that they are illegal, in the sense of being criminal and punishable. The case does not require us ; and we think we ought not to express any opinion on that point. "But then it is said that these regulations, otherwise illegal, are prevented from being so considered by the circumstances against which they were intended to operate. It appears that a counter combination existed on the part of certain workmen, and that the alleged object of this bond was to counteract this, and to set the willing and industrious workmen free from its powers. But, supposing this to be the object, and that we may even consider it as laudable, we cannot agree that it is laudable or right to use such means of counteraction. The maxim injuria non excusat injuriam is a sound one, both in common sense and at common law. This is only to put one wrong as counterbalancing another wrong, to place the industrious workman in the fearful situation of being oppressed by a majority of masters in order to prevent him from being oppressed by a majority of his fellow-workmen. And besides, here it is to be observed that the masters' combination is not limited to the duration of the suggested combination of the workmen. It is to last for twelve months absolutely : so that, if the combinations assigned as the excuse for it broke up, as they almost always do, in a short period, this restraint upon the obligors would •till continue in force after the object against which it seems to have been directed had long ceased to exist. " This bond, therefore, if not altogether illegal and punishable, is framed 664 ILLEGAL CONTRACTS. [CHAP. XVIII. others than individuals specified in the contracts, which are not considered as against public policy, nor in restraint of trade.^ Thus, a demise of a house, with an agreement on the part of the lessee to buy all his beer of the lessor is good.^ So a cov- enant by the purchasers of land from a brewer that he and his assigns should have the exclusive right of supplying beer to any public-house that might be erected on the premises so bought, is not void as being in restraint of trade.^ So, also, a condition in a deed of composition, that a publican shall con- tinue to deal with his creditors for twelve years in the articles of their respective trades, is valid. So, also, a contract with the proprietors of a theatre not to write dramatical pieces for any other theatre, is legal.* But in all such cases, the person restricted is only bound to deal with the specified persons so long as they furnish good articles of a marketable and whole- some quality ; and if the articles supplied prove to be stale, to enforce at all events a contract by wliich the obligors agree to carry on their trade, not freely as they ought to do, but in conformity to the wiU of others ; and this, not being for a good consideration, is contrary to the public policy. *' We see no way of avoiding the conclusion that, if a bond of this sort between masters is capable of being enforced at law, an agreement to the same effftt amongst workmen must be equally legal and enforceable : and so we shall be giving a legal effect to combinations of workmen for the purpose of raising wages, and make their strikes capable of being enforced at law. We think that the legislature have been contented to make such strikes not punishable : and certainly they never contemplated them as being the subject of enforcement by a suit at law, on the part of the body of delegates, against any workmen who might have been seduced by some designing person to sign an engagement with penalty to contmue in the strike as long as a majority were for holding out. " We think, for these reasons, that the judgment of the Court of Queen's Bench is right, and ought to be affirmed." ' Cooper V. Twibill, 3 Camp. 286, note ; Eannie v. Irvine, 7 Man. & Grang. 969 ; Jones v. Edney, 3 Camp. 285 ; Holcombe v. Hewson, 2 Camp. 391; Doe v. Reid, 10 B. & C. 849; Gale v. Reed, 8 East, 80; Morris v. Colman, 18 Ves. 437 ; Weaver v. Sessions, 6 Taunt. 154. ' Cooper V. Twibill, 3 Camp. 286, u. ; Jones v. Edney, 3 Camp. 285 ; Holcombe v. Hewson, 2 Camp. 391. ' Catt V. Tourle, Law R. 4 Ch. 6*4 (1869), commenting on Hills v. CroU, 2 Phillips, 60. * Morris v. Colman, 18 Ves. 437. CHxVP. XVIII.] CONTRACTS IN RESTRAINT OP TRADE, 665 unwholesome, or bad, the restriction is not binding.^ Thus, where a house was leased on condition that the lessee should purchase his beer from the lessor, and the former was sued for breach of condition, and it appeared that he had purchased of other persons than the lessor, but that the beer supplied by the lessor had been bad, nauseous, and unwholesome, it was held that the lessee was not, under such circumstances, bound to conform to the condition.^ § 686. Patented inventions, and secrets of art or trade, not patented, are not within the -purriew of the rule against re- straint of trade ; and a trader may sell a secret in his art, and restrain himself generally from the use of it. These excep- tions are allowed for the purpose of stimulating inventive genius, and of encouraging science and well-directed ingenuity. An agreement in relation to the disposition and use of pat- ented machines, although it be in restraint of trade, will be binding, if made within the time to which such patent-right is limited.^ So, a covenant by the patentee of a process for man- ufacturing articles to be used in a business not local in its character, as a part of his sale of such patent, to do no act to injure the buyer or the business, and " at no time to aid, assist, or encourage in any manner any competition against the same," is not necessarily void as in restraint of trade.* ^ Holcombe v. Hewson, 2 Camp. 391 ; Thornton v. Sherratt, 8 Taunt. 529. ' Cooper V. Twibill, 3 Camp. 286, note; Holcombe v. Hewson, 2 Camp. 391 ; Thorntons. Sherratt, 8 Taunt. 529. ' Bryson v. Whitehead, 1 Sim. & Stu. 74 ; Viekery v. Welch, 19 Pick. 626. * Morse Twist Drill Co. v. Morse, 103 Mass. 73 (1869). In Leather Cloth Co. V. Lorsont, Law R. 9 Eq. 345, a company had been formed for the purpose of working a certain process of manufacture, introduced into Great Britain from America. They purchased the right, with an agreement of the vendors that they would not, directly or indirectly, carry on, nor would they, to the best of their power, allow to be carried on by others, in any part of Europe, any company or manufactory having for its object the manufacture or sale of productions therein manufactured in the business or manufacture of the vendors, and would not communicate to any person or persons the means or processes of such manufacture, so as in any way to interfere with the exclusive enjoyment by the purchasing company of the benefits agreed to be purchased. It was held that the restraint was not 666 ILLEGAL CONTRACTS. [CHAP. XYIII. CONTRACTS IN RESTRAINT OP MARRIAGE. § 687. In the next place, contracts in restraint of marriage are void, upon grounds of public policy. If a man and woman reciprocally agree to marry each other, the contract is undoubt- edly good. But if, by the terms of the contract, one of the parties be restrained from marrying at all, or from marrying anybody, unless it be a particular person, and there be no corresponding obligation on that person, the contract is consid- ered as injurious to the general interests of society, and there- fore void.i Thus, an agreement between a man and a woman, by which he promised to pay her ^61000, if he married any person except herself, was held to be void.^ So, also, a bond from a widow not to marry again, was decreed to be delivered up, although there was a counter bond to pay her a sum of money, if she did not.^ § 688. So, also, a wagering contract for fifty guineas, that the plaintiff would not marry within six years, is primd fade greater, having regard to the subject-matter of the contract, than was neces- sary for the protection of the purchasers ; and it was enforced against the vendors. The decision acknowledges the principle that contracts are void, if their object is to deprive the state of the benefit of the labor, skill, or talent of a citizen. But the court say that, on the other hand, public policy requires that when a man has, by skill or other means, obtained something that he wants to sell, he should be at liberty to sell it in the most advan- tageous way in the market, and, in order to enable him to do this, it is necessary that he should be able to preclude himself from entering into com- petition with the purchaser, provided the restriction is not unreasonable. He may not have any more restraint than is necessary for the benefit of the purchasers, but to that extent he m.iy have it. ' Baker v. "White, 2 Vern. 215; Low v. Peers, Wilmot, 86-i ; 4 Burr. 222.'5 ; Cock v. Richards, 10 Ves. 429, 438 ; Key v. Bradshaw, 2 Vern. 102 ; Atkins V. Farr, 1 Atk. 287; 2 Eq. Cas. Abr. 247, 248; Woodhouse v. Shepley, 2 Atk. 535 ; 1 Story, Eq. Jur. § 274. ^ Low V. Peers, Wilmot, 364 ; 4 Burr. 2225 ; s. P. Cock v. Richards, 10 Ves. 429, 438. ' Baker v. White, 2 Vern. 215. There is a distinction in the Roman law between general restraints of marriage, and restraint in respect of some par- ticular person ; and the former class of cases was held to be contrary to policy, and void ; but not the latter. Pothier, Pand. Lib. 85, tit. 1, n. 34 ; Dig, Lib. 35, tit. 1, 1. 63, 64 ; 1 Story, Eq. Jur. § 277. CHAP. XVIII.] CONTRACTS IN RESTRAINT OP MARRIAGE. 667 in restraintof marriage, and is void, unless it appear that such restraint was prudent and proper under the circumstances.^ § 689. Conditions annexed to gifts, legacies, and devises, in restraint of marriage generally, are conditions in violation of public policy and that freedom of choice which is the safe- guard of marriage, and are all void. So, also, if the condi- tion, although it be not in restraint of marriage generally, narrow down and limit the freedom of choice, so as unreasona- bly to check and restrain it, it will be void. Thus, where a legacy was given to a daughter, on condition that she should not marry without consent, or should not marry a man who was not seised of an estate in fee-simple, of the clear yearly value of £500, it was held to be a void condition, because it tended directly to prohibit marriage.^ § 690. Yet if the condition be reasonable in itself, and do not, in point of fact, operate improperly to restrain the contract of marriage, it will be binding ; for the law will not break down those conditions which a provident affection has erected to guard the inexperience of youth against the machinations of the crafty and selfish; and while its -policy is to encourage entire freedom of choice in marriage, it will also protect the rash and hasty from the consequences of their own folly. Yet a parent, under the pretence of affection and generosity, can- not incumber his gift with conditions that obstruct the real interests of the child, or the claims of society.^ Thus, a legacy given to a daughter, to be paid her at twenty-one years 'of age, on condition that she do not marry before that time, is valid ; for such a postponement would manifestly enure to the benefit of the child.* So, also, a condition not to marry against the consent of friends,^ or not to marry a particular person ; or ' Hartley v. Kice, 10 East, 22. » Keily v. Monck, 3 Kidgw. P. C. 205, 244, 247, 261 ; 1 Eq. Cas. Abr. Condition, C, in marg. ; 1 Chitty, Eq. Dig. Marriage, IV. ; 1 Story, Eq. Jur. § 280. » 1 Story, Eq. Jur. § 280, 281 ; 1 Fonbl. Eq. B. 1, ch. 4, § 10, note q; Godolph. Orph. Leg. pt. 1, ch. 15, § 1. « Stackpole v. Beaumont, S Ves. 96, 97 ; Scott v. Tyler, 2 Dick. 721, 722, 724. ' Desbody u. Boyville, 2 P. Wms. 547 ; Scott v. Tyler, 2 Bro. C. C. 431, 485 ; 2 Dick. 722 ; Clarke v. Parker, 19 Ves. 1 ; Lloyd v. Branton, 3 Meriv. 108 ; Dashwood v. Bulkeley, 10 Ves. 239. 668 ILLEGAL CONTRACTS. [CHAP. XVIII. prescribing a particular place, or particular ceremonies,^ is good ; because such conditions are not considered as creating an unreasonable restraint of marriage. The same rule also applies to a condition in the will of a husband, that his widow shall not marry again, or that she shall only receive an annuity while she remains a widow. ^ But a condition, that a child shall not marry until fifty years of age,^ or shall not marry any person inhabiting the same town, or county, or State, or shall not marry any person, unless he be of a particular profession or trade, is void ; because it operates as a virtual restraint of marriage generally.* § 691. If the condition of a gift or devise be precedent, the party in whose favor it is made must strictly comply with its requisitions. If the condition, however, be subsequent, the necessity of complying with it depends entirely upon its legality. For if it be illegal or void in any way, it is wholly inoperative, and the gift becomes absolute and unfettered by it. But if it be legal, it has the same operation and effect as any other con- dition, and if it be broken, will destroy the right of the party holding under it.^ § 692. Again, there is another class of contracts relating to marriage, — namely, where a deed is made between a husband and wife, providing for their future separation, — which are considered void, as being against the policy of the law, and tending to facilitate the separation of husband and wife.^ ' Scott V. Tyler, 2 Bro. C. C. 488 ; 2 Dick. 721 ; Godolph. Orph. Leg. pt. S, ch. 17, § I to 10 ; 1 Story, Eq. Jur. § 285. - Scott V. Tyler, 2 Bro. C. C. 488 ; 2 Dick. 721, 722 ; Harvey v. Aston, 1 Atk. 379 ; Marples i'. Bainbridge, 1 IMadd. 590 ; Richards v. Baker, 2 Atk. 821 ; I Roper on Leg., by White, ch. 13, § 2, p. 721, 722. ^ 1 Story, Eq. Jur. § 283. * Scott V. Tyler, 2 Bro. C. C. 488 ; 2 Dick. 721. - 1 Story, Eq. Jur. § 288 ; Co. Litt. 206 a; ib. 217 a; ib. 237 o, and note 152 ; Bertie v. Faulkland, 3 Cas. Ch. 130 ; s. c. 2 Freem. 220 ; 2 Vern. 333 ; 1 Eq. Cas. Abr. 110, marLnn; Harvey v. Aston, 1 Atk; 361; 2 Com. 726; 1 Fonbl. Eq. B. 1, ch. 4, § 10, note q; Graydon v. Hicks, 2 Atk. 16 ; Long V. Dennis, 4 Burr. 2052 ; Popham v. Bampfeild, 1 Vern. 83. In the civil and ecclesiastical law there is no distinction between conditions precedent and conditions subsequent in respect to marriage. Harvey m. Aston, 1 Atk. 375 ; Reynish v. Martin, 3 Atk. 332. « Durant v. Titley, 7 Price, 677 ; Hindley D. Marquis of Westnieath, 6 B. & C. 200, 212. CHAP. XVIII.] MARRIAGE BROKAGE CONTRACTS. 669 Thus, a deed conveying lands as a security for the separate maintenance of the wife, in case future differences between husband and wife should arise, and they should cease to live together, is void.^ But a deed contemplating an immediate separation is held to be valid, on the ground that, if a separa- tion is decided upon and inevitable, such a deed serves to save ■ the wife from destitution.^ So, where the husband and wife were already separated, an agreement by the husband to pay a sum of money to the wife during separation, is valid, and may be enforced in chancery.^ So, also, although a deed should purport to be made in contemplation of an immediate separa- tion, yet if, in fact, the parties should continue to live together, apparently as man and wife, it would not be good.* § 693. Again, where the separation of man and wife is inev- itable and decided upon, a contract to furnish money to defray the expenses of procuring a divorce, would be binding, as not tending to induce a separation, but only to provide means to effect an ultimate decision.^ MARRIAGE BROKAGE CONTRACTS. § 694. Marriage brokage contracts, by which are meant con- tracts or agreements to negotiate a marriage between two parties, for a certain compensation, are utterly void,^ and inca- pable of confirmation ; ^ and even money paid upon them may be reclaimed in equity.^ The law considers marriage as a ' Hindley v. Marquis of Westmeath, 6 B; & C. 201, 212. ' Ibid. ; Jee v. Thurlow, 2 B. & C. 647 ; St. John v. St. John, 11 Vea. 534. ' Bucknell v. BuckneU, 7 Irish Ch. 130 (1857). ' Hindley v. Marquis of Westmeath, 6 B. & C. 200, 212. > Moore v. Usher, 7 Sim. 384. ' Boynton v. Hubbard, 7 Mass. 118 ; Arundel v. Treyillian, 1 Rep. Ch. 87 ; Drury v. Hooke, 1 Vern. 412 ; Hall v. Potter, 3 Lev. 411 ; a. c. Show. P. C. 76 ; Cole v. Gibson, 1 Ves 507 ; Debenham v. Ox, 1 Ves. 276 ; Smith V. Aykwell, 3 Atk. 566 ; Hylton v. Hylton, 2 Ves. 548 ; Stribble- hill V. Brett, 2 Vern. 446; s. c. Pr. Ch. 165; s. c. 1 Bro. P. C. 57; Roberts v. Roberts, 3 P. Wms. 74, note 1, 75, 76 ; Law v. Law, 8 P. Wms. 394 ; 1 Story, Eq. Jur. § 263 ; Drury v. Hooke, 1 Vern. 412. ' Cole V. Gibson, 1 Ves. 503; 1 Fonbl. Eq. B. 1, eh. 4, § 10, note s; Roberts v. Roberts, 3 P. Wms. 74, and Cox's note. 8 Smith V. Bruning, 2 Vern. 392; 1 Fonbl. Eq. B. 1, ch. 4, § 10; Goldsmith v. Bruning, 1 Eq. Cas. Abr. 89. See Crawford v. Russell, 62 Barb. 92 (1872). 670 ILLEGAL CONTRACTS. [CHAP. XVIII. moral and political duty, and all improper restrictions upon freedom of choice, and all agreements tending to impair that mutual love and confidence upon which domestic happiness has its only safe foundation, and which are the only securities for faithfulness and morality in marriage, are. stains which it will not permit to rest upon its ermine. Where, therefore, a bond was given, by which the obligor bound himself to pay a certain compensation to the obligee for his assistance afforded in effecting an elopement and marriage, it was held to be utterly void, although it was freely given after the marriage, and not in consequence of any previous agreement to that effect; upon the ground that it directly tended to encourage an immoral and illegal act, and, to enforce it, would be to offer a reward for seduction. ^ For the same reason, if a parent or guardian, or any person nearly connected to a party, privately connive with a third person, and agree to forward a marriage between such parties, by the exertion of an improper influence, in consideration of a certain compensation ; or agree, upon payment of a certain sum, to consent to such marriage, the contract will be utterly void ; upon the ground that it is a bar- gain in contravention of the right of third persons, and as iniquitous morally as legally. Thus, where a party gave a bond for a particular sum to B., in consideration that B. would consent that he should marry B.'s daughter, it was held to be void. 2 WAGERS AND GAMING. § 695. Gaming by itself is lawful by the common law, un- less it be accompanied by fraud, and then the fraud invalidates the contract.^ Money fairly lost at gaming, and paid, cannot, therefore, be recovered at law by an action for money had and ' Williamson v. Gihon, 2 Sch. & Lef. 356, 362. ' Kcat V. Allen, 2 Vera. 588; 1 Madd. Ch. Pr. 231 ; 1 Fonbl. Eq. B. 1, ch. 4, § 11 ; 1 Eq. Cas. Abr. 90, F. 5 ; Crawford v. Russell, 62 Barb. 92 (1872). ' Sherbon v. Colebach, 2 Vent. 175 ; Tbistlewood v. Cracroft, 1 M. & S. 600 ; Bulling v. Frost, 1 Esp. 235 ; Bosanquett v. Dashwood, Cas. t. Talb. 41 ; Rawden v. Shadwell, Ambl. 269 ; Wilkinson v. L'Eaugier, 2 Younge & Coll. 864 ; Babcock v. Thompson, 3 Pick. 446. CHAP. XTIII.] WAGERS AND GAMING. 671 received.^ But either party to a wager may, before the object of the same be determined, recover the sum which he has deposited.^ Statutes have, however, been passed in England, and in this country, by which gaming is prohibited ; and when- ever it is forbidden by statute, money lost at gaming can be recovered from the party to whom it is paid, provided the case be within the prohibition of the statute.^ But it has been held in England, that money knowingly lent for gaming pur- poses is not recoverable.* Again, in view of the disastrous effects of gaming in the production of idleness and dissipation, and waste of property, and the consequent ruin of families, as well as that it is prohibited by statute, courts of equity not only refuse to interfere to enforce contracts of gaming, but lend their aid to suppress them, and a bill in equity will be supported to have any gaming security delivered up and cancelled.'' § 696. The statute provisions do not generally extend, how- ever, so far as to embrace within them wagers, which are a species of gaming.^ But the law, although it tolerates wagers, holds them in no favor ; and wherever any particular wager is either contrary to public policy, or, in any manner, immoral and injurious, or even troublesome and impertinent, it cannot be enforced. The courts have often reprehended these contracts, and seize upon every opportunity and every circumstance to in- validate them. But it is well established at common law, that a wager is a legal contract, which the courts are bound to en- force, although it be in respect to a matter which is trifling, or in which the parties have no interest.' The famous case in 1 Cotton V. Thurland, 6 T. R. 405. See Rourke v. Short, 5 El. & B. 904 (1856) ; Crofton v. Colgan, 10 Irish Com. Law, 133 (1859). ' Cleveland v. Wolff, 7 Kans. 184 (1871) ; Eltham v. Kingman, 1 B. & Aid. 683. ^ Ibid. ; Thorpe v. Coleman, 1 C. B. 990. * M'Kinnell ». Robinson, 3 M. & W. 434. But see, contra, Utica Ins. Co. V. Scott, 19 Johns. 1 ; Utica Ins. Co. v. Bloodgood, 4 Wend. 652 ; Utica Ins. Co. V. Cadwell, 3 Wend. 296. 6 1 Story, Eq. Jur. § 303, 304 ; 1 Fonbl. Eq. B. 1, oh. 4, § 6, and note e ; Robinson v. Bland, 2 Burr. 1077 ; Rawden v. Shadwell, Ambl. 269, and Mr. Blunt's notes ; Woodroffe v. Farnham, 2 Vern. 291 ; Wynne v. Callander, 1 Russ. 293 ; Portarlington v. Soulby, 3 Myl. & K. 104. 6 A contract for the sale of property intended to be used for the pur- pose of gaming is not void under the statutes of Indiana. Cummings v. Henry, 10 Ind. 109; Bickel v. Sheets, 24 Ind. 1 (1865). ' Jones V. RandaU, 1 Cowp. 37 ; Edgell v. M'Laughlin, 6 Whart. 176 ; Good V. Elliott, 3 T. R. 693 ; Morgan v. Pebrer, 4 Scott, 230 ; s. c. 3 Bing. 672 ILLEGAL CONTRACTS. [CHAP. XVIU. ■which this bold doctrine was first clearly laid down, arose upon a wager, whether or not a certain person had bought a wagon before a certain day : and it was held to be legal, and the win- ner was allowed to recover against the loser the amount of the wager. Mr. Justice Buller, nevertheless, dissented from the opinion of the other three judges, and insisted that the court ought to refuse to waste its time in the consideration of such questions.^ The doctrine is now well settled, that wagers upon N. C. 460 ; Bunn v. Riker, 4 Johns. 426 ; Bland v. CoUett, 4 Camp. 157. A wager on a subject in which the parties have no interest, is not valid in New Hampshire. Perkins v. Eaton, 3 N. H. 152. See Stetson v. Mass. M. F. Ins. Co., 4 Mass. 330 ; Ball J>. Gilbert, 12 Met. 397, and cases cited ; Lewis v. Little- field, 15 Me. 233; Rice v. Gist, 1 Strob. 82 ; CoUamer v. Day, 2 Vt. 144; AVest V. Holmes, 26 Vt. 530. See Noycs v. Spaulding, 27 Vt. 420 (1855), as to stock-jobbing contracts ; also Brua's Appeal, 55 Penn. St. 294 (1867). • Good V. Elliott, 3 T. R. 698. In this case, Buller, J., said : " I take it to be agreed by all my brethren, with whom I have the misfortune to differ, that if the wager concern the interest of the public, or impute a crime or dis- grace to another person, it is void, and cannot be made the subject of an action. The question then is, whether there be any sound difference between a wager throwing an imputation on another, and a wager which respects his property only ; I can find none. But, on the contrary, I go further ; for I hold, that though the wager imputes no crime or disgrace to another, and though it do not call in question any pecuniary interest of another ; yet, if it concern the person of another, no action can he maintained upon it. And, therefore, I am of opinion that a bet on a lady's age, or whether she has a mole on her face, is void. No third person has a right to make it a subject of discussion in a court of justice, whether she passes herself in the world as being more in the bloom of youth than she really is, or whether what is apparent in her face to every one who sees her is a mole or a wart ; and yet these are circumstances which cannot, in a court of law, be stated as an injury ; for if a man say that a young woman who passes for twenty- three years of age is thirty-three, or that she has a wart on her face (which is considered as a nasty thing) , no action will lie for it. I will put one case more, which, if it do not appear too ludicrous, perhaps may be found to bear upon the present question. Suppose a bet were made whether a young lady squinted with her right eye or her left eye ; shall it be the subject of sober inquiry in a court of justice how the organs of her eyes are formed, and which of them it is that looks directly to the object before her? Shall the parties in the action be permitted to say, the inquiry is no injury to her, for everybody sees that she squints, and it makes no difference to her whether it be with one eye or the other? No. The answer is, you, the plamtiff and defendant, have no right by an idle wanton bet to bring her person or even her name in question. The principle of the cases, in which it has been said that a bet respecting a third person is void, is not CHAP. SVIII.J , WAGERS AND GAMING. 673 indifferent matters, without other interest to either party than results from the wager, are legal at common law, unless they because it occasions a temporal loss to that third person, or because it sub- jects him to puiiisbment, but because the laws of the country are calcu- lated only to try adverse rights, and not to indulge or entertain the impertinent inquiries of others, upon matters in which they are in nowise interested. What is it to the plaintiff or the defendant, whether this woman uought the wagon, or stole it, or whether she has paid for it, or is insolvent and never can pay for it ? If it be permitted to these parties to try whether this woman owes £4 for the wagon to the former owner of it, the necessary consequence is, that any two men may try all the debts, the circumstances, and the solvency of another, which will afford a ready means of making men in trade bankrupts before their time. If it appear on the face of the record that the interest of the public, or of an individual, is materially affected, the proper way of taking advantage of the objection is by demurrer, or by motion in arrest of judgment. Da Costa v. Jones and Atherford v. Beard are express authorities upon this point ; and by them it is established that if the action lead to improper inquiries it may be stopped in limine. The case of Atherford v. Beard can be supported on no other grounds ; for in that case there was a confession by the defendant that he had lost the wager, and, therefore, it was unnecessary, and indeed it was not attempted, to unravel or examine any accounts respecting the public revenue. But where the inquiry affects the character or interest of an individual, justice can only be done by stopping it at the outset ; for if the parties are permitted by their counsel to tell their own story at large in public, it is a very feeble and inadequate mode of protecting the character of the person traduced, for the court to say we cannot receive evidence of what has been stated, or, after the mischief has been done, to say it should not have been done. By the very statement of the case the busy curiosity and the foolish tattle of the world a.re set in motion ; and it is beyond the reach of human jurispru- dence afterwards to efface its effects. Let us adhere then to the case of Da Costa v. Jones, and much mischief will be prevented, no inconvenience can arise. The wisdom of that determination convinced the mind of every man who heard or who has read it ; and I can find no reason for departing from it in one instance more than in another, in which it is said that the action cannot be maintained. One case in which it is determined that the action wi.! not lie is where the bet affects the interest or the feelings of a third person. I subscribe to both the propositions. The interest or the feelings of a third person may both be involved in this inquiry ; but if it affect her interest only, that decides against the plaintiff. And when we speak of the feelings of others, I know of no line to go by, but whether the matter at all concerns the person or transactions of another. Men's feelings are as different as their faces ; one man will exult in having made a sharping bargain, when another would blush at the mention of it ; but the craft of the one, or the remorse of the other, are not apt to be put to the test by an VOL. I. 43 674 ILLEGAL CONTRACTS. [CHAP. XVIII. are in respect to a subject which is libellous, indecent, illegal, and violates public policy, good morals, or the peace of society .^ § 697. A wager, however, on a subject which is illegal,^ or which offends against public policy, is void. Thus, a wager as to the event of a sparring match ; ^ or a cock-fight ; * or whether a horse can trot eighteen miles within" an hour,^ — are illegal ; because they tend to create disturbance, and to encourage action on an idle wager between other persons." However difBcult it may soem to answer the reasoning of Mr. .Justice BuUer, the decision in Good v. Elliott has been adhered to ever since, aiid is now well established. See cases cited supra, and also Hussey v. Crickitt, 3 Camp. 1C8 ; Jones v. Ran- dall, 1 Cowp. 37 ; Fisher v. Waltham, 4 Q. B. 889 ; Moon v. Burden, 2 Exch. 22 ; RamloU Thackoorseydass v. SoojumnuU Dhondmull, 6 Moore, P. C. 300 ; Doolubdass Pettamberdass i\ Kamloll Thackoorseydass, 7 Moore, P. C. 239; 3 Eng. La,w & Eq. 39; Grant v. Hamilton, 3 McLean, 100; Ross V. Green, 4 Harrington, 308 ; Dunman v. Strother, 1 Tex. 89. In the later case of Evans v. Jones, .3 51. & W. 82, one of the learned judges said : " It is too late now to say that no wager can be enforced at law, though I think it would have been better if they had been originally left to the decision of the Jockey Club." See Da Costa v. Jones, 2 Cowp. 729 ; Ather- fold !;. Beard, 2 T. R. 610. By Stat. 8 & 9 Vict. ch. 109, § 18, wagers- are now prohibited in England. See Coombes v. Dibble, Law R. 1 Exch. 248 (1866). ' In the Revised Statutes of New York, 1 R. S. 663, § 8, it is declared, that " all wagers, bets, or stakes, made to depend on any race or upon any gaming by bet or chance, or upon any bet, chance, casualty, or unknown or contingent event whatsoever, shall be unlawful ;" and " all contracts for and on account of any money or property or thing in action so waged, bet, or staked, shall be void." See also Peck !'. Bri;:gs, 3 Denio, 108, and Lewis V. Miner, 3 Denio, 103 ; Ruckman v. Pitcher, 1 Comst. 392 ; Storey v. Brennan, 15 N. Y. 521. Gaming is also prohibited in Massachusetts, and money lost in gaming can be recovered. Rev. Stat. p. 1, ch. 60, § 12, 14, 15. It is declared that persons losing money by gaming may recover it back ; and if within three months he do not sue therefor, any other person may sue therefor, and recover treble the value of the money or goods lost, one moiety being to the use of the Commonwealth, and the other to the suitor. All securities and conveyances are also declared void if any part of the con- sideration therefor be for gaming ; except as to bond fide holders for a valuable consideration without notice. Mass. Rev. Stat. ch. 60, § 13-16, p. 387. And see Mass. Gen. Stat. ch. 85. ' Dcnniston v. Cook, 12 Johns. 376. ' Hunt V. Bell, 1 Bing. 1 ; 7 Moore, 212 ; Egerton u. Furzeman, 1 C. & P- 613. " Squires v. Whisken, 3 Camp. 140. ' Brogden v. Marriott, 3 Bing. N. C. 88 ; 2 Scott, 712. CHAP. XVIII.] WAGERS AND GAMING. 675 cruelty. So, also, a wager, as to whether a war will be de- clared ; ^ or whether a prisoner will be convicted on a criminal charge ; ^ or upon the event of an election ; ^ or that a plaintiff will not marry within six years, — is void.* § 698. So, also, wagers which tend to affect the feelings or interests of third persons ; ^ or lead to indecent exposures and examinations ;.or are in any manner contra bonos mores,^ — are void. Thus, a wager as to the sex of the celebrated Chevalier D'Eon ; '' and a wager as to whether Joanna Southcote, a pre- tended prophetess, and an unmarried woman, would have a child by a certain day, was held to be illegal.* So, also, a wager whether a woman has dommitted adultery ; or has had a bastard child ; or any wager which wantonly exposes a person to ridicule or improper imputation, or which operates as a libel, — is void.s § 699. In the United States wagers are generally made void by statute ; as are also all species of gaming. i" And the loser of an illegal wager may recover his deposit of the stake- holder, if he has not paid it over at the time suit is brought. ii So, too, wager policies of insurance, that is, policies effected ' Allen V. Hearn, 1 T. R. 57, n. 6; Busk v. Walsh, 4 Taunt. 290. ' Evans v. Jones, 5 M. & W. 77. s ]M'Allister v. Hoffman, 16 S. & R. 147 ; Hickerson v. Benson, 8 Mo. 8 ; BaU v. Gilbert, 12 Met. 397 ; Tarleton v. Baker, 18 Vt. 9 ; Wheeler v. Spencer, 15 Conn. 28 ; Stoddard v. Martin, 1 R. I. 1 ; Gardner v. Nolen, 3 Harrington, 420; Guyman v. Burlingame, 36 111. 201. ■" Hartley ». Rice, 10 East, 22 ; Rust v. Gott, 9 Cow. 169 ; Wroth u. Johnson, 4 Harr. & M'Hen. 284; Allen v. Hearn, 1 T. R. 67. ' It has been decided in the Supreme Court of Pennsylvania, that no wager concerning any human being is recoverable- in a court of justice. Phillips V. Ives, 1 Rawle, 37. The court was, however, divided in opinion. * Eltham v. Kingsman, 1 B. & Al. 684. ' Da Costa v. Jones, 2 Cowp. 729. 8 Ditchburn v. Goldsmith, 4 Camp. 152. « Da Costa v. Jones, 2 Cowp. 729 ; Atherfold i). Beard, 2 T. K. 610 ; Gilbert v. Sykes, 16 East, 150 ; Hartley v. Rice, 10 East, 22 ; Shirley v. Sankey, 2 Bos. & Pul. 130. '" See Edgell v. M'Laughlin, 6 Whart. 176 ; Knight ». Gregg, 26 Tex. 506 ; Hayden v. Little, 35 Mo. 418 ; Monroe v. Smelly, 25 Tex. 586 ; Mosher v. Griffin, 61 111. 184 (1869) ; Sutphin v. Crozer, 1 Vroom, 267 ; Perkins v. Clomm, 23 Ark. 221. " Graham v. Thompson, Irish R. 2 C. L. 64 (1867). See Savage v. Madder, 86 Law J. (n. s.) Exch. 178. In Shaw v. Gardner, 30 Iowa, HI 676 ILLEGAL CONTRACTS. [CHAP. XTIII. by parties having no interest in the subject of insurance, are void by statute in England, and generally in America. ^ CONTRACTS TO OFFEND AGAINST THE OBLIGATIONS OF COMMON LAW AND PUBLIC DUTY. § 700. Contracts to do acts which are indictable, or punish- able criminally ; or to conceal and compound stich acts ; or to suppress evidence in a criminal prosecution, — are void.^ Thus, it is a good defence to an action for not supplying manuscript to complete a work, according to agreement, that the matter of the intended publication is of an unlawful and indictable nature. 3 So, also, a contract to indemnify a printer for pub- lishing a libel,* or to save harmless any person intending to commit an assault, is void. So, also, a bond, note, or other promise, is void, if it be given in consideration of compounding a i^rosecution for felony, treason,^ or a public misdemeanor ; ^ or in consideration of concealing treason and felony,' it being a punishable misprision ; or of compounding informations on (1870), the parties bet $100 on the election of General Grant, and Shaw not having $100 to deposit, put into the hands of the stakeholder the promissory note of a third person for $175, which the stakeholder handed over to Gardner after the election, and he collected $175 of the maker. Shaw was allowed to recover of him the amount above $100 as for money had and received. ' See note to Lord v. Dall, 1 Bigelow, 158. = Badger v. Williams, 1 Chip. 137; Bowen v. Buck, 28 Vt. 308 (1856). ' Gale V. Leckie, 2 Stark. 107. ' Poplett V. Stockdale, 2 C. & P. 198, per Best, C. J. ; By. & Mood. 337. " Fivaz V. NichoUs, 2 C. B. 501. A note given to compound felony is so void, that it is not necessary to prove that a felony had in fixct been com- mitted. Chandler v. Johnson, 39 Ga. 89 (1869). And see Porter v. Jdnes, 6 Cold. 313 (1809). As to agreements to stifle a prosecution, see Crooke V. Powerscourt, 16 W. R. 969 (18C8, Ir. Q. B.). Agreeing to discontinue a pending prosecution is as much an illegal consideration for a note as a contract not to prosecute. Conderman v. Trenchard, 58 Barb. 165 (1870).' " Prole t'. Wiggins, 3 Scott, 607 ; 3 Bing. N. C. 230 ; Collins v. Blantern, 2 Wils. 3-17 ; Queen v. Barmston, 3 Nev. & Per. 167 ; Edgcombe v. Rodd, 6 East, 294; Commonwealth v. Pease, 16 Mass. 91; Ayer k. Hutchins, 4 Mass. 373 ; Commonwealth v. Cony, 2 ilass. 52:) ; Hinesburgh v. Sumner, 9 Vt. 23; Den v. Moore, 2 South. 470; People v. Buckland, 13 Wend. 592; Bell V. Wood, 1 Bay, 249 ; Cameron v. M'Farland, 2 Car. Law Repos. 415 ; Harding v. Cooper, 1 Stark. 467; Taylor v. Lendey, 9 East, 49; Pool v. Cousfield, 1 Camp. 55. ' 4 Black. Comm. 120, 121 ; 1 Chitty, Crim. Law, 3, 4. CHAP. XVIII.] AGAINST COMMON LAW AND PUBLIC DUTY. 677 penal statutes, in criminal cases ;i or of compromising an assault with riot and obstruction of a public officer .^ So, also, an agreement to pay a sum of money to an officer for an escape from mere arrest, or from prison ; and an agree- ment, by a third person, to indemnify an officer, for neglecting his duty in the service of a precept, being founded on a consid- eration to do an illegal act, are void.^ But if the agreement be by a creditor, and the object be only to try a contested title, it would probably be good.* The same general rule applies where an officer takes a bond or note of a prisoner, confined for a criminal offence, in consideration of his going at large, and as a security for his return into custody ; because the in- dulgence is a violation of his duty on the part of the officer, for which he is indictable.^ So, also, a contract to reprint a literary work, in violation of a copyright secured to a third person, is void.^ So, also, a contract to indemnify a person for a future act known to be a trespass, is void ; although, if the act be not known to be a trespass, the contract would be binding.^ But to render a contract void on the ground that it stifles a prosecution for a criminal offence against the promisor, it is necessary that the promise should be made for gain, and not merely out of weakness or motives of compassion and kind- ness.^ And ^here an act occasioning only private injury, though criminal in itself, has been already committed, a con- tract under seal to make satisfaction therefor to the individual injured, in consideration of a waiver of prosecution, would seem to be good.^ Thus, a bond given to a person injured by an ' 4 Black. Comm. 364; 1 Russell on Crimes, B. 2, ch. 13. " Keir v. Leeman, 9 Q. B. 392; 2 Lead. Grim. Cases, 221, 241, note (2d ed.) ; Bowcn v. Buck, 28 Vt. 308 (1856). ' Hodsdon v. Wilkins, 7 Greenl. 113 ; Ayer v. Hutchins, 4 Mass. 370 ; Churchill v. Perkins, 6 Mass. 641; Denny v. Lincoln, 5 Mass. 885; Webber V. Blunt, 19 Wen(}. 188. * Clark v. Foxcroft, 6 Greenl. 296. " Churchill v. Perkins, 5 Mass. 641; Denny v. Lincoln, 5 Mass. 385; Ayer v. Hutchins, 4 Mass. 370 ; Hodsdon v. Wilkins, 7 Greenl. 113. * Nichols V. Ruggles, 3 Day, 146. ' Davis V. Arledge, 3 Hill (S. C), 170. ' Ward V. Allen, 2 Met. 53 ; Commonwealth v. Pease, 16 Mass. 91. ' Johnson v. Ogilby, 3 P. Wms. 278 ; Price v. Summers, 2 South. 678 ; Plumer v. Smith, 5 N. H. 553 ; Stone v. Hooker, 9 Cow. 154. See also Edgeombe v. Rodd, 5 East, 303. 678 ILLEGAL CONTRACTS. [CHAP. XVIII. • assault and battery, to make satisfaction and to prevent prose- cution, has been held to be good.^ But this exception seems to be doubtful, and at all events only applies to cases where the misdemeanor is purely personal.^ If it be a public misde- ' Price V. Summers, 2 South. 578. See also Keir v. Leeman, 9 Q. B. 371. ^ See Osbaldiston v. Simpson, 13 Sim. 513, where promissory notes delivered by one person to another to induce the latter to forego a prosecu- tion against him for cheating at cards, were decreed to be given up, on the ground that it would be extremely dangerous to allow a party to be a judge in his own cause, and to determine in his own favor, what amount of penalty ought to be paid for a breach of the law committed by another person, not- withstanding he may have suffered from it. See also Ex parte Critchley, 3 Dowl. & L. 527 ; s. c. 10 Jur. 112. A question of this character was recently considered by the House of Lords in Williams v. Bayley, Law R. 1 H. L. :300 (1866). A son had forged his father's indorsement; and the father, to stifle a criminal prosecution of his son, had executed an agreement to make an equitable mortgage of his property in settlement. The question was whether the agreement was good in equity. Lord Chancellor Cranworth said : " Here are several forged notes. The bankers, in the presence of the father and of the person who forged them, both being persons of apparent respectability in the country, carrying on business as tradesmen, and the father having the presence and the assistance of his solicitor, the bankers say to him what amounts to this : ' Give us security to the amount of these notes, and they shall all be delivered up to you ; or do not give us security, and then we tell you we do not mean to compound a felony ; in other words, we mean to prosecute.' That is the fair inference from what passed. Now, is that a transaction which a court of equity will tolerate, or is it not ? . . . . Many grounds on which a court ■ of ecjuity has acted in such cases do not apply in this case. The parties were not standing in any fiduciary relation to one another ; and if this had been a legal transaction, I do not know that we should have thought that there was any pressure that would have war- ranted the decree made by the Vice-Chancellor. But here was a pressure of this nature. We have the means of prosecuting, and so transporting your son. Do you choose to come to his help, and take on yourself the amount of his debts — the amounts of these forgeries? If you do, we wiU not prosecute; if you do not, we will. . . Is that or is it not legal? In my opinion, my lords, 1 am bound to go the length of saying that I do not think it is legal. I do not think that a transaction of that sort would have been legal, e\en if, instead of being forced on the father, it had been pro- posed by him, and adopted by the bankers ; and I come to that conclusion upon this short ground, tliat in Wallace v. Ilardacre, 1 Camp. 45, although the decision there, founded upon the facts of tliat particular case, was against the view I am taking, yet there Lord Ellenborough positively states that which has always been understood to be the correct view of the law upon CHAP. SYIII.] AGAINST COMMON LAW AND PUBLIC DUTY. 679 meaner, no contract to compound or stifle it would be hind- ing.i this subject, namely, that although in that case there was no reason for treating the agreement as invalid, yet it would have been othei-wise if the agreement had been substantially an agreement to stifle a criminal prose- cution. And although that was merely a dictum, in a nisi -prius case, yet on all occasions I have found, on looking at the reports, by the late Lord Camp- bell, of Lord Ellenborough's decisions, that they really do, in the fewest possible words, lay down the law, very often more distinctly and more accurately than it is to be found in many lengthened reports ; and what is so laid down has been subsequently recognized as giving a true view of the law as applied to the facts of the case. Now, is the agreement in question, or is it not, one the object of which is to stifle a criminal prosecution ? If there be any case in which that character can be properly given to an agree- ment, I think that this is such a case ; and therefore, in my opinion, the decree is perfectly right.'" ' Wallace v. Hardacre, 1 Camp, 45 ; Edgcombe v. Rodd, 6 East, 303 ; Johnson v. Ogilby, 3 P. Wms. 279 ; Harding v. Cooper, 1 Stark. 467. In Keir v. Leeman, 9 Q. B. 392, Tindal, C. J., reviews the cases and dicta upon this question. He says : "It seems clear, from the various authorities brought before us on the argument, that some misdemeanors are of such a nature that a contract to withdraw a prosecution in respect of them, and to consent to give no evidence against the parties accused, is founded on an illegal consideration. Such was the case of Collins u. Blantern, 2 Wils. 341, 347, which was the case of a prosecution for perjury. It is strange that such a doubt should ever have been raised. A contrary decision would have placed it in the power of a private individual to make a profit to himself by doing a great public injury. It is difiicult to comprehend the case of John- son V. Ogilby, 3 P. Wms. 277, 279, as stated- in Peere Williams's Reports. There a prosecution for a fraud was suppressed, and that suppression made the consideration for an agreement to pay money. The distinction between felony and misdemeanor seems to have been the foundation of the decision, if it was made, by Lord Talbot, a distinction overruled in Collins v. Blantern, which was decided at a later period. It is not, .indeed, at all clear that the indictment for the fraud was compromised, as a part of the agreement, or that the fraud was an indictable one : and perhaps the case may be so ex- plained. If not, it cannot, we conceive, be sustained as law. " In Drage v. Ibberson, 2 Esp. 643, however, Lord Kenyon adverted to, and stated that he should adhere to the class of cases which held that the consideration for an agreement, being the settling of a misdemeanor, might be good in law. Thus a settlement of an indictment for a nuisance, preferred by public authority, was held (Fallowes v. Taylor, 7 T. R. 475) a lawful consideration for a -bond binding the defendant to remove the nuisance ; we presume, on the ground, which however is not very satisfactory, that the main object of the prosecution, the removal of the nuisance, was thereby effected. But the court seem to have overlooked the consideration that a 680 ILLEGAL CONTRACTS. [CHAP. XVIII. § 701. The obtaining of money by false pretences is one of those crimes which it is unlawful to agree not to prosecute, and a note given for such forbearance is void in the hands of the payee. 1 And even assaults and batteries have been held to defendant who had infringed a public right was thereby entirely freed from the punishment due to a violation of public law. In Edgcombe v. Rodd, 5 East, 'J9i, Le Blanc, J., assigns this as a reason for the consideration being illegal, that there the prosecution was for a public misdemeanor, and not for a private injury to the prosecutor. It is difficult to reconcile this principle, which we think a just one, with the decision in Fallowes v. Taylor, 7 T. R. 47.5 ; nor can Pool v. Bousfield, 1 Camp. 5.5, be reconciled with it. There an agreement to stifle a motion against the defendant, that he should answer the matters of an affidavit, was held illegal. " But there is a class of cases, such as Beeley v. Wingfield, 11 East, 46, and Baker v. Townsend, 7 Taunt. 422, which do not at all break in upon sound principles. These are cases where the private rights of the injured party are made the subject of agreement, and where, by the previous con- viction of the defendant, the rights of the public are also preserved inviolate. As Gibbs, C. J., in the latter case, well observes, ' the parties have referred nothing but what they have a right to refer. They have referred the several assaults ' (by which we understand him to mean their several rights to damages for those assaults) ; ' these may be referred. They have referred the right of possession ; that may be referred. The reference of all matters in dispute refers all other their cicil rights;'' which words show our previous interpretation to be correct. The case of Beeley v. Wingfield was after conviction ; and the promissory note seems merely to have been given for the expenses of the prosecution, and was obviously a part of the punishment inflicted by the court after conviction of the offence. " Indeed, it is very remarkable what very little authority there is to be found, rather consisting of dicta than decisions, for the principle, that any compromise of a misdemeanor, or indeed of any public offence, can be other- wise than illegal, and any promise founded on such a consideration otherwise than void. If the matter were res integra, we should have no doubt. on tliis point. We Iiave no doubt that, in all offences which involve damages to an injured party for which he may maintain an action, it is competent for him, notwithstanding they are also of a public nature, to compromise or settle his private damage in any way he may think fit. It is said, indeed, that in the case of an assault he may also undertake not to prosecute on behalf of the public. It may be so ; but we are not disposed to extend this any further. "In the case before us, the offence is an assault coupled with riot and the obstruction of a public officer. No case has said that it is lawful to compromise such an offence." ' Clubb V. Hutson, IS C. B. (n. s.) 414. And see Shaw o. Reed, 30 Me. 105; Shaw v. Spooner, 9 N. H. 197. CHAP. XVIII.] AGAINST COMMON LAW AND PUBLIC DUTY. 681 be within the rule.^ The doctrine sometimes taken, that the rule never applied to misdemeanors, but only to felonies,^ is now exploded, and it may generally be considered unlawful to com- pound a misdemeanor^ subject to very few exceptions,^ as well as felonies,* and the case of Keir v. Leeman was unanimously afiBrmed in the Exchequer Chamber.^ § 702. A compromise of a civil process, or of a private in- jury, is, however, binding ; as where an officer accepts a note or bond from a prisoner convicted of a breach of the excise laws, for the purpose of saving his property from sale, or his body from imprisonment.'^. In any -case where the imprisonment is not for the purposes of punishment, but only for security of a debt, or an obligation, and the officer accepts bail, it is bind- ing, because his duty is to accept it under such circumstances.'^ So, also, where the prosecution is merely for fraud, and the parties make a compromise thereof, by which all legal pro- ceedings are agreed to be stopped, it will be binding.^ And a promise to pay money to one through whose land a road had been laid out, for withdrawing his opposition to opening it, is binding.^ § 703. But an agreement with a public officer to compensate him for doing an act which it is his legal duty to do without compensation, is void ; because every officer is bound to do his duty, conformably to law.^" Thus, a contract with a branch pilot of New York to assist a vessel in distress, for a certain extraordinary compensation, was held to be void ; because as- - • Corley v. Williams, 1 Bailey, 588 ; Vincent v. Groom, 1 Yerg. 430 ; Jones V. Rice, 18 Pick. 440. " See Johnson v. Ogilby, 3 P. Wms. 277 ; Drage v. Ibberson, 2 Esp. 643; Coppock v. Bower, 4 M. & W. 361. ' See Fay v. Oatley, 6 Wis. 65. * Jones V. Rice, 18 Pick. 440. * 9 Q. B. 371. « Pilkington v. Green, 2 Bos. & Pul. 151 ; Sugars v. Brinkworth, 4 Camp. 44; Stonington v. Powers, 37 Conn. 439 (1870). ' Churchill v. Perkins, 5 Mass. 542 ; Brett v. Close, 16 East, 293. « Johnson v. Ogilby, 3 P. Wms. 279. s Weeks v. Lippencott, 42 Penn. St. 474 (1862). "• Pool ». Boston, 6 Cush. 219 ; Callagan v. Hallett, 1 Caines, 104 ; Mitchell V. Vance, 6 Monr. 529 ; Bac. Abr. Assumpsit, E. ; Smith v. Whildin, 10 Barr, 39. 682 ILLEGAL CONTRACTS. [CHAP. XTIII. sistance in such cases is, by statute, imposed upon the pilot as a duty ; and such a contract might lead to oppression.^ But if a portion of the seamen desert in a foreign port, so that it is unsafe to go to sea with tlie diminished crew, a contract by the master to pay the remaining hands a specific sum in addition to their wages, is valid.^ Still, in general, the performance of a legal duty furnishes no consideration for a promise ^ to pay for such service. So, also, demanding and receiving more than the fees prescribed by law, for official duties, is indictable, and the excess may be recovered in an action of assumpsit for money had and received.* So, also, a promise of reward to a constable for arresting a criminal under a warrant which he is legally bound to execute, is void.^ And, in general, an agree- ment which interferes with the course of justice is void ; as an agreement contrary to the policy of an act of the legislature,^ or a promise to conduct proceedings in bankruptcy so as to injure the debtor's credit as little as possible.'^ The same rule applies to a promise to pay extra compensation to a wit- ness to attend upon court ; ^ to pay sailors extra wages for doing only their duty ; ^ and, generally, a promise to pay a per- son for doing any act which such person is already bound to do.^" The plain ground upon which this rule is founded, is, ' Callagan v. Hallett, 1 Caines, 104. See also County Commissioners v. Jones, Breese, 103. = Hartley v. Ponsonby, 7 El. & B. 872 (1807), commenting on Stilk v. Myrick, 2 Camp. 817. But see Harris v. Carter, 3 El. & B. 659; The Araminta, 1 Spinks, 224. ' Tilden v. Mayor of New York, 56 Barb. 340 (1870). ^ Woodgate o. Knatclibull, 2 T. R. 148; Jons v. Perchard, 2 Esp. 507; Bridge v. Cage, Cro. Jao. 103 ; Badow v. Salter, W. Jones, 65 ; s. C. Latch, 64; Dew v. Parsons, 2 B. & Al. 562. •• Smith V. Whildin, 10 Barr, 89 ; Pool v. Boston, 5 Cush. 219 ; Stamper V. Temple, 6 Humph. 113 ; Gillmore v. Lewis, 12 Ohio, 281 ; Rea v. Smith, 2 Handy, 198. « Elliott V. Richardson, Law R. 5 C. P. 744 (1870). ' Bracewell v. Williams, Law R. 2 C. P. 196 (1866). « Willis V. Peckham, 1 Br. & B. 515 ; Collins v. Godelroy, 1 B. & Ad. 950 ; Sweany v. Hunter, 1 Murphey, 181. » Stilk V. Myrick, 2 Camp. 317 ; Harris v. Watson, Peake, 72. " Crowhurst v. Laverack, 8 Exch. 208 ; 16 Eng. Law & Eq. 498, and Bennett's note. CHAP. XVIII.] AGAINST COMMON LAW AND PUBLIC DUTY. 683 that the contract is extortionate.^ But a note given to a jailer, by a person in jail, for the payment of a fine and costs, is not void as against public policy .^ § 704. All contracts to indemnify officers against prospec- tive non-feasance, malfeasance, or misfeasance of their official duties, are void.^ Thus, the rule applies in cases of an agree- ment to allow a prisoner to escape ; * or to indemnify the officer against such escape, if he will permit it ; ^ or to deliver an execution debtor to an officer at a future day, in considera- tion of his forbearing to arrest the debtor, when in his pres- ence and power.^ But an agreement by creditors to indemnify a sheriff for not serving an execution, which they intended to impeach as fraudulent, and for the purpose of trying that question, is valid.'' § 705. If, however, the act, which forms the consideration of a promise, be supposed at the time to be legal, though it afterwards turn out not to be so, a promise of indemnity there- for would be good and binding. Thus, where Harcot brought one Battersey to an inn, and affirmed to the host that he ar- rested Battersey by virtue of a commission of rebellion, and requested the host to keep him safely over night, and promised to save him harmless ; the promise was held to be binding, though the arrest and imprisonment were illegal.^ So, where the commissioner and overseer of highways ordered the plaintiff ' 4 Black. Comm. 141. = St. Albans Bank v. Dillon, 30 Vt. 122 (1857). ' Doty V. Wilson, 14 Johns. 381; Given v. Driggs, 1 Caines, 450; Kneeland v. Rogers, 2 Hall, 579 ; Hodsdon v. Wilkins, 7 Greenl. 113 ; Ayer V. Hutchins, 4 Mass. 370 ; Churchill v. Perkins, 5 Mass. 541 ; Devlin v. Brady, 36 N. Y. 531 (1867). ' Featherston v. Hutchinson, Cro. Eliz. 199 ; s. c. 3 Leon. 208 ; Blith- man v. Martin, 2 Bulst. 213 ; 8. c. Godb. 250 ; Kenworthy v. Stringer, 27 Ind. 498 (1867). ' Ayer v. Hutchins, 4 Mass. 370 ; Dive v. Maningham, Plowd. 60 ; Martyn V. Blithman, Yelv. 197; Hodsdon v. Wilkins, 7 Greenl. 113. Money paid to a jailer, to procure the release of aprisoner on criminal process, without giving bail, is illegally paid, and cannot be recovered back. Smart j), Cason, 50 111. 195 (1869). " Denny v. Lincoln, 5 Mass. 385 ; Fanshor v. Stout, 1 South. 319. ' Clark V. Foxcroft, 6 Greenl. 296. ' Bao. Abr. Assumpsit, E. ; Winch, 48 ; Hutt. 55 ; 2 Johns. Cas. 56. 684 ILLEGAL CONTRACTS. [CHAP. XTIII. to pull down a turnpike gate, supposing it to be a nuisance, and promised " to bear him out," the promise was held to be bind- ing.i So, also, a promise to indemnify against an act which turns out to be a trespass, is good, unless the promisee knew the act contemplated to be a trespass.^ § 706. So, also, a promise to indemnify an officer for the execution of an act apparently legal, is good.^ As if a bond of indemnity be given to g, sheriff for attaching or distraining disputed property. But a promise to indemnify him for doing an act manifestly in violation of his duty, or for omitting to do an act which is plainly his duty, will be void.* § 707. An agreement under seal, however, to indemnify an officer for an illegal act, already done, is valid,^ for the same reason as that which obtains in bonds given in consideration of past cohabitation ; namely, that the seal imports a consider- ation, and that the act being done, no injury can result to the public from a contract to indemnify the party, it being no con- sideration for the act itself. A parol agreement to the same effect, however, would not be binding, because the consideration is executed.^ § 708. Again, all secret agreements, which are founded upon violations of public trust or confidence, are yoid.^ Where, ' Coventry v. Barton, 17 Johns. 142 ; Avery v. Halsey, 14 Pick. 174. ^ Stone V. Hooker, 9 Cow. 154. See also Allaire v. Ouland, 2 Johns. Cas. 52 ; Avery v. Halsey, 14 Pick. 174. ^ Arundel v. Gardiner, Cro. Jac. 652 ; Blackett v. Crissop, 1 Ld. Rajin. 279; Griffiths v. Hardenbergh, 41 N. Y. 4(34 (1869). And see Kneeland V. Rogers, 2 Hall, 679; Stone v. Hooker, 9 Cow. 154; Doty v. Wilson, 14 Johns. 379. " Wi-ight V. Lord Verney, 3 Doug. 240 ; Chitty on Cont. 678 ; Mitchell i\ Vance, 5 Monr. 529 ; Feathcrston v. Hutchinson, Cro. Eliz. 199. A promise by a justice of the peace, who h.is carelessly entered a judgment on his docket for the wrong party, that, if he will move in the county court to set aside the judgment and the execution, he will pay all the damages caused by his own mistake, if the execution is not set aside, is not against public polic}- ; and an action will lie thereon. Christopher v. Van Liew, 57 Barb. 18 (1869). ' Bao. Abr. Assumpsit, E. ; Hutt. 55; s. C. Winch, 48 ; Hall v. Huntoon, 17 Vt. 244. * Coventry u. Barton, 17 Johns. 142 ; Avery v. Halsey, 14 Pick. 174. ' Fuller V. Dame, 18 Pick. 472 ; Pingry v. Washburn, 1 Aik. 264 ; Lord CHAP. XVIII.J AGAINST COM.MON LAW AND PUBLIC DUTY. 685 therefore, a person occupying a public office, agrees, for a re- ward, to exercise his official influence in questions affecting both public and private rights, so as to bring about the private advantage of persons interested, the contract would be void. For every public officer is bound to be disinterested in the con- sideration of all public questions, and any contract which in- terferes with the free and unbiassed exercise of his judgment in relation to a question of trust or confidence reposed in him, is against public policy and good morals. Thus, where an agree- ment was made to remunerate commissioners appointed to take testimony, and bound by the nature of their appointment to secrecy, provided they would disclose the testimony so taken, it was held to be void.^ So, also, if a contract should be entered into between a member of Parliament and third per- sons, by which the former should agree to withdraw all oppo- sition to a certain bill incorporating a railway company, in consideration of £5000, it would be held to be void.^ And the same rule would apply to an agreement by an insolvent to pay a creditor for withdrawing all opposition to his discharge.^ Any such promise to one creditor to induce him to enter into a compromise, securing him better terms than other creditors, is void.* So, also, where A., being a member of the legislature, entered into an agreement with B. to use- his influence in the legislature to procure an act of incorporation for a proposed company, on a certain pecuniary consideration, the agreement was held to be void.^ It would seem, however, that whenever Howden v. Simpson, 10 Ad. & El. 821 ; Vauxhall Bridge Co. v. Earl Spencer, 2 Madd. 356 ; s. c. Jacob, 64. ' Cooth V. Jackson, 6 Ves. 12, 81, 32, 35. 2 Lord Howden v. Simpson, 10 Ad. & El. 821. = Hall V. Dyson, 17 Q. B. 785 ; 10 Eng. Law & Eq. 424 ; Gould v. Wil- liams, 4 Dowl. P. C. 91 ; Murray v. Reeves, 8 B. & C. 421 ; Humphreys v. Welling, 1 H. & C. 7 (1862). ■> Geere v. Mare, 2 H. & C. 339 (1863) ; Fisher v. Bridges, 3 El. & B. 642. Not only is a note or promise,. secretly given to one creditor to induce him to sign a composition deed with other creditors, void, but if money be paid for the same purpose, the debtor may recover it back. If both parties are ire delicto, they are not in pari delicto, because the one has power to dictate, the other no alternative but to submit. Atkinson v. Denby, 6 H. & N. 778, affirmed in the Ex. Ch. 7 H. & N-. 934. See Higgins v. Pitt, 4 Exch. 312. * Fuller v. Dame, 18 Pick. 473. 686 ILLEGAL CONTRACTS. [CHAP. XVIII. a member of Parliament or of the legislature has a personal interest in the subject-matter of a question before such parlia- ment or legislature, he may agree to withdraw all opposition thereto growing out of his private and not his public interest, upon a consideration, provided that his agreement be not secret, and do not operate as a fraud or surprise on such body, but be wholly open.i Thus it is not illegal for the promoters of a rail- way to agree with a land-owner, though a member of Parlia- ment, to pay him for withdrawing his opposition to their bill, and give it his countenance and support.^ - But a contract to procure or endeavor to procure the passage of an act in the legislature by sinister means, or even by using personal influ- ence with the members, is void, as being contrary to public policy and the integrity of political institutions.^ And a con- tract to pay a person for his services in obtaining a contract from the government to purchase its supplies of the promisor, is against public policy and void.* § 709. Again, contracts for the sale of public of&ces come under this class of contracts in violation of public duty, and are void. And this rule obtains upon the ground that they tend to destroy the responsibilities of the office, and to betray ' Lord Howden v. Simpson, 10 Ad. & El. 821 ; Simpson v. Lord How- den, 1 Keen, 583 ; 8. c. 3 Myl. & Cr. 97 ; Vauxhall Bridge Co. v. Earl Spencer, 2 Madd. 356. • ' Shrewsbury v. North StaflFordshire Railway Co., Law E. 1 Eq. 593 (1865). ' Clippinger v. Hepbaugh, 5 Watts & Serg. 315 ; Powers v. Skinner, 34 Vt. 274 (1861), and numerous cases cited. See also Fuller v. Dame, 18 Pick. 472. But some courts hold that a party may contract to work for the passage of a bill by the legislature, if he does not conceal his interest in the matter ; but states to the members for whom and by whom he is employed. Miles V. Thorne, 38 Cal. 335 (1869) . In New York it has been held that a contract to give " all the aid in one's power, spend such reasonable time as may be necessary, and generally to use one's utmost influence to procure the passage of a certain law," is void, as tending to subject a legislature to secret, improper, and corrupt influences. Mills v. Mills, 40 N. Y. 543 (1869). And see Frost v. Belmont, 6 Allen, 159; Powers v. Skinner, 34 Vt. 281. * Tool Co. V. Norris, 2 Wall. 45 (1864), a valuable case on this sub- ject. But the mere employment of an agent to negotiate a contract with a government ofiicer, for supplies, by sending in a bid for his principal, is not illegal. Winpenny v. French, 18 Ohio St. 469 (1869). CHAP. XVIII.] AGAINST COMMON LAW AND PUBLIC DUTY. 687 the interests of the public.^ But it would seem that a contract for a private office, of which the other party is cognizant, and to which he does not refuse his assent, would be good, if it were not manifestly productive of injurious results.^ Nor is the employment of agents to procure contracts with the government illegal.^ So, also, the profits and emoluments of a public office of trust are not a good subject of sale. Thus, it has been held, that the prize-money of a sailor, or the full pay or half pay of an officer, is not assignable at law,* nor in equity,^ upon the ground that any salary, paid for the performance of a public duty, ought not to be perverted to other uses than those for which it was intended. The same is true of a promise on consideration of aiding in the election of a person to office, though it be not secretly made.^ So, of an agreement to resign an office and use the party's influence to secure the appointment of another.' ' Blackford v. Preston, 8 T. R. 89 ; Card v. Hope, 2 B. & C. 662 ; East Ind. Co. V. Neave, 6 Ves. 173; Thomson v. Thomson, 7 Ves. 470; Morris v. M'Cullock, Ambler, 432 ; 1 Story, Eq. Jur. § 295 ; Chesterfield v. Janssen, 2 Ves. 125 ; Waldo v. Martin, 4 B. & C. 319 ; Cardigan o. Page, 6 N. H. 183 ; Lewis v. Knox, 2 Bibb, 453 ; Bowers v. Bowers, 26 Penn. St. 74 (1856); Martin v. Wade, 37 Cal. 168 (1869). Nulla aM re magls Romana Respublica interiit, quam quod magistratus oflicia venalia erant. Co. Litt. 234 a. In Filsoa v. Himes, 5 Barr, 452, there was a covenant to pay a gross ' sum in consideration of a transfer of certain property, and a promise and guaranty on the part of the vendor, that a post-office should be removed from a neighboring village to the place of business of the vendee, and that he should be appointed to it as postmaster, and it was held, that the bargain was one, the consideration one, the covenant one, and that as the procurement of an appointment to office by private influence was part of the indivisible consideration, and illegal and void on the ground of public policy, the whole was void. See also Bourke v. Blake, 7 Irish Com. Law, 348. " Richardson v. Mellish, 2 Bing. 242, 243, 246, 247. ' Winpenny v. French, 18 Ohio St. 469 (1869). • Lidderdale v. Montrose, 4 T. R. 248 ; Flarty v. Odium, 3 T. R. 681 ; Barwick v. Reade, 1 H. Bl. 627. ' Stone V. Lidderdale, 2 Anstr. 533, in -which the case of Stuart ». Tucker, 2 W. Bl. 1137, holding the contrary doctrine, is expressly over- ruled. See Pahner v. Bate, 2 Br. & B. 676 ; Arbucldey v. Cowtan, 3 Bos. & Pul. 321 ; Flarty v. Odium, 3 T. R. 681 ; Mothwold v. Walbank, 2 Ves. 238 ; Meredith v. Ladd, 2 jST. H. 517 ; Cardigan v. Page, 6 N. H. 183. » Nichols V. Mudgett, 32 Vt. 546. •' Meacham v. Dow, 32 Vt. 721 (1860). 688 ILLEGAL CONTRACTS. [CHAP. XTIll. § 710. Contracts for the maintenance of suits, or for cham- perty, or embracery, or bribery, or extortion (which are void by common law and by statute, and are indictable offences), come under this rule, and are void.^ Indeed, wherever the contract is to do acts which are illegal and prohibited, it is void, and no action can be maintained on it.^ Maintenance is the officious assistance by money or otherwise, proposed by a third person to either party to a suit in which he himself has no legal interest, to enable the party to prosecute or defend it.^ It is not, in the strict sense of the term, maintenance to ad- vance money for, or to agree to pay the costs of a suit, before it is commenced, but only after the suit is commenced ;* yet the mere fact, that the agreement is made before the suit is commenced will not render agreements good in equity which would be void for maintenance, if they had been made after suit was commenced.^ § 711. But the doctrine of the common law as to mainte- nance does not apply to persons who either have any real in- terest in the suit promoted by them, or who act in the lond fide belief that they have. Indeed, the law in this respect has been greatly modified by the late cases, and by the general change of opinions and customs ; and maintenance has been said to be now confined to cases where a stranger, having no interest in the suit, improperly, for the purpose of stirring up litigation and strife, encourages others to bring actions, or make defences ' Hacket v. Tilly, 11 Mod. 93 ; s. c. 2 Ld. Kaym. 1207 ; Fox v. Tilly, 6 Mod. 225 ; Given v. Driggs, 1 Caines, 450 ; Kuecland v. Rogers, 2 Hall, 579 ; Hackett v. Tilley, Holt, 201 ; Swett v. Poor, 11 Mass. 549. ' Craig c. Missouri, 4 Peters, 410. The subject of maintenance was much discussed in the late ease of Sprye v. Porter, 7 El. & B. 67 (1856) ; Simpson v. Lamb, 7 El. & B. 84 ; Elliott v. Richardson, Law R. 6 C. P. 744 (1870). ^ 4 Black. Comm. 134; State v. Wynne, 1 Hawks, 454; Dyer, 355 6; Co. Litt. 368 ; Bac. Abr. Maintenance ; Ciiitty on Cont. 675 ; Thurston v. Percival, 1 Pick. 415; Redman v. Sanders, 2 Dana, 70; Brinley !). Whiting, 5 Pick. 359 ; Belding v. Pitkin, 2 Caines, 147. * 2 Story, Eq. Jur. § 1048, note 2 ; 1 RusseU on Crimes, B. 2, ch. 20, p. 177. * 2 Story, Eq. Jur. § 1048, note 2 ; Wood v. Downes, 18 Ves. 125 ; Strachan v. Brander, 1 Eden, 303, note; Arden v. Patterson, 6 Johns. Ch. 44. CHAP. XVIII.J MAINTENANCE, CHAMPERTY, BRIBERY. 689 which they have no right to make.^ Advice by any person to institute a suit does not amount to maintenance, unless it ap- pear to have been urged maliciously or without reasonable or probable cause.^ So, also, if money be advanced from motives of friendship and charity, and not of speculation, to a poor person, to enable him to prosecute a suit, it is not mainte- nance.^ The same rule also holds where the person advancing . money has any supposed interest in the subject-matter of suit, independent of his advance, whether such interest be great or small, certain or uncertain, vested or contingent ; the sole ob- ject of the rule as to champerty and maintenance being to prevent entire strangers from fomenting litigation by officious assistance.* If, therefore, there be any privity of interest grow- ing out of peculiar relations of trust or confidence between the parties, independent of the assistance rendered to carry on the suit, — as if they stand in relation of landlord and tenant, father and son, master and servant, husband and wife,^ — mere 1 Findon v. Parker, 11 M. & W. 675, 682. Lord Abinger said: " The law of maintenance, as I understand it upon the modern constructions, is confined to cases where a man improperly, and for the purpose of stirring up litigation and strife, encourages others either to bring actions, or to make defences which they have no right to make. I do not like to give an opinion upon an abstract case, and therefore am not desirous to consider it ; but if a man were to see a poor person in the street oppressed and abused, and without the means of obtaining redress, and furnished him with money, or employed an attorney to obtain redress for his wrongs, it would require a very strong argument to convince me that that man could be said to be stirring up litigation and strife, and to be guilty of the crime of main- tenance ; I am not prepared to say, that, in modern times, courts of justice ought to come to that conclusion. However, I give no opinion upon that point. In this case I proceed upon the ground that there was reasonable evidence of a common link of interest uniting the proprietors of the lands in question at the time they made the agreement." See also FUght v. Leman, 4 Q. B. 883 ; Pechell v. Watson, 8 M. & W. 691 ; Hunter v. Daniel, 9 Jur. S26 ; Thallhimer v. Brinckerhoff, 3 Cow. 647. ' Ibid. ' Master v. Miller, 4 T. K. 340; Ferine v. Dunn, 3 Johns. Ch. 608; Thurston v. Percival, 1 Pick. 417 ; Baker v. Whiting, 3 Sumner, 475. * Wickham v. Conklin, 8 Johns. 220; Thallhimer v. Brinckerhoff, 3 Cow. 647. See Call v. Calef, 13 Met. 362. 5 Ibid. ; Moore v. Usher, 7 Sim. 384 ; 4 Black. Comm. 135 ; 2 Story, Eq. Jur. § 1049; Williamson v. Henley, 6 Bing. 299; 1 Kussell on Crimes, B. 2, ch. 20, p. 177. VOL. I. 44 690 ILLEGAL COXTEACTS. [CHAP. XVJII. assistance by money or services would not amount to main- tenance. And this rule would also embrace the relation of attorney and client, if there were no ingredient of champerty to poison the contract.^ Maintenance is, however, to be care- fully distinguished from champerty, and only constitutes a part of it ; and if there be no bargain for an interest or share of the subject-matter of the suit, money advanced or assistance ren- dered will often be a good consideration for a contract, when, if such were not the case, the consideration would be bad.^ § 712. Embracery is another species of maintenance, and consists of any practices by which it is attempted to influence a jury corruptly to one side, whether it be by promises, persua- sions, entreaties, money, entertainments, or the like, and avoids a contract made in consideration thereof.^ Nor does it matter whether the jury be actually influenced or not ; the attempt alone constitutes the offence. And if money be given to any person to be distributed by him as a bribe to the jury, it con- stitutes embracery, although the money be not distributed. Wherever a person, from his relationship to the parties, is justified in maintaining a suit, he may exercise his influence to persuade or labor a juror to appear and give a verdict ac- cording to his conscience ; but a mere stranger cannot do even this.* § 713. Champerty, as distinguished from maintenance, is a bargain for an interest in or share of the subject-matter of a suit, in case it prevail, in consideration that the champertor advance money or carry on the suit at his own expense,^ — while maintenance does not involve any agreement for an in- terest in the subject-matter. Champerty is, therefore, main- tenance, and something more, and is frowned upon both by ' Thallhimer v. Brinckerhoff, 3 Cow. 647, supra. ' 1 Russell ou Crimes, B. 2, ch. 20, p. 176 ; Strange v. Brennan, 10 Jur. 649. ' 1 Russell on Crimes, B. 2, ch. 21, p. 183 ; 1 Hawk. P. C. ch. 27, 466 ; 4 Black. Coram. 140. ^ 1 Russell on Crimes, B. 2, ch. 21, p. 183; 1 Hawk. P. C. ch. 27, 466; 4 Black. Comm. 140. * 2In-st. .504; 2 Roll. Abr. 116; Bao. Abr. Maintenance, B. 5 ; In re Masters, 4 Dowl. P. C. 18 ; 1 Russell on Crimes, B. 2, ch. 20, p. 179. CHAP. XVIII. J EMBRACERY, CHAMPERTY, BRIBERY. 691 law and equity, as tending not only to foment litigation, but to pervert the objects of the law.^ Thus, where an attorney, after rendering some service in a suit brought by the defend- ant, entered into an agreement with him, by which he was to receive ten per cent upon the sum recovered, the agreement was held to be void for champerty.^ A contract between attorney and client that the former shall prosecute a case at his own expense, for a certain part of the subject in litigation, is champertous and void.^ And a contract between client and attorney, that the latter should receive a moiety of the amount recovered, for his compensation, though made abroad where such a contract is legal, is void in England, if to be performed there, as much as if made there.* And even contracts between attorney and client for a larger compensation, on condition of success, are looked upon with great suspicion, and the presump- tion is said to be against their validity.^ In England, a contract between an attorney and client, that in consideration of his advances and services, the former shall have, in addition to his legal costs and charges, a sum according to the benefit to the client resulting from the suit, and sufficient to reward the attor- ney, is as much void for maintenance as if the attorney were » 2 Story, Eq. Jur. § 1049; Strachan «. Brander, 1 Eden, 303, and note ; Arden v. Patterson, 6 Johns. Ch. 44, 48 ; Wood v. Griffith, 1 Swanst. 55 ; AVallis v. Duke of Portland, 3 Ves. 494 ; Holloway v. Lowe, 7 Port. 488. ' Thurston v. Percival, 1 Pick. 415. See also Spencer v. King, 5 Ohio, 183 ; Lathrop o. Amherst Bank, 9 Met. 489 ; Byrd v. Odem, 9 Ala. 755 ; Satterlee v. Frazer, 2 Sandf. 141. See also Boardman v. Thompson, 25 Iowa, 488 (1868), overruling Wright u. Meek, 3 Greene (Iowa), 472; Kennedy v. Broun, 13 C. B. (n. s.) 677 (1863) ; 2 Am. Law Reg. (n. s.) 372, note ; Lafferty v. Jelley, 22 Ind. 471 ; Coquillard v. Bearss, 21 Ind. 479; Scobey v. Ross, 13 Ind. 117. ' Martin v. Clarke, 8 R. I. 389 (1866) ; HoUoway v. Lowe, 7 Port. 488 ; Weakly v. Hall, 13 Ohio, 167. A statute prohibiting attorneys from pur- chasing bonds, choses in action, &c., for the purpose of bringing suits upon them, does not apply to a purchase of stock in a corporation. Ramsey v. Gould, 67 Barb. 399 (1870). ' Grell V. Levy. 16 C. B. (n. s.) 73 (1864). * Nesbit V. Lockman, 34 N. Y. 167 ; Hitchings v. Van Brunt, 38 N. T. 335 (1868). Some cases are still more strict. Evans v. Ellis, 5 Denio, 640; Howell V. Ransom, 11 Paige, 638. 692 ILLEGAL CONTRACTa. [CHAP. XTIII, to have a share of the property recovered.^ And in England, a contract by a client to pay a barrister for advocating his cause is illegal, and cannot be enforced.^ So, also, the assignment to a navy agent of part of the subject of a prize suit then depend- ing, in consideration of his paying the costs thereof, was held to be void for champerty. It is not confined to advances of money, in consideration of a division of the subject-matter of suit, but embraces all modes of assistance furnished on such consideration. Thus, an agreement to give up certain secur- ities, or to communicate certain information, or to procure evidence, upon condition of receiving a portion of the sum recovered, is champerty .^ Nor does the rule in equity differ from that Thich obtains at law : in both tribunals champerty constitutes a complete defence to a contract.* § 714. There is another species of champerty, which con- sists in buying or selling a pretended or doubtful title to land not in possession of the seller, but held adversely by another person.^ In such a sale it is immaterial whether the title of the vendor be good or bad, if the land be held adversely to him.^ But where the party selling land does not know that there is an adverse possession, he would not be liable to the statute penalty for selling the pretended title, even although he should know that there was an adverse claim. '^ So, also, ' Earle v. Hopwood, 9 C. B. (n. s.) 566 (1861) ; and see the learned note of the American editor. ' Kennedy v. Broun, 13 C. B. (n. s.) 677 (1863), a very interesting case. ^ Stanley v. Jones, 7 Bing. 369 ; Hartley v. Russell, 2 Sim. & Stu. 244. * 2 Story, Eq. Jur. § 1049 ; Strachan v. Brander, 1 Eden, 303, and note ; Arden v. Patterson, 5 Johns. Ch. 44, 48; Wood v. Griffith, 1 Swanst. 55; Wallis V. The Duke of Portland, 3 Ves. 494. * Whitaker v. Cone, 2 Johns. Cas. 58 ; Brinley v. Whiting, 5 Pick. 355 ; 1 Russell on Crimes, B. 2, ch. 20, p. 181; Dexter v. Nulson, 6 Ala. 68; Martin v. Pace, 6 Blaokf. 99 ; Williams v. Hogan, Meigs, 187 ; Ring v. Gray, 6 B. Monr. 368 ; Burhans v. Burhans, 2 Barb. Ch. 398 ; McGoon v. Ankeiiy, 11 111. 558. But see Edwards v. Parkhurst, 21 Vt. 472 ; Dunbar V. McFall, 9 Humph. 505. " Tomb V. Sherwood, 13 Johns. 289. ' Etheridge v. Cromwell, 8 Wend. 629 ; Hassenfrats v. Kelly, 13 Johns. 466 ; Le Roy v. Veeder, 1 Johns. Cas. 417 ; Preston v. Hunt, 7 Wend. 63 ; Sessions v. Reynolds, 7 Sm. & M. 132. CHAP. XVIII.] VIOLATION OF FOREIGN LAW3. 603 where an executory contract is made for the sale of land, while the vendor is in peaceable possession, a deed in pursu- ance thereof afterwards given, when the land is in adverse possession, is not void for champerty.^ But the purchase of an estate which is in suit, if made with a knowledge that it is in suit, is void for champerty, unless it be made in consum- mation of a previous bargain, or be founded on the ties of blood.^ § 715. This rule does not, however, apply to sales or assign- ments of personal property, or choses in action. In relation to personal property, the rule is that any debt or claims may be assigned after the institution of a suit for the recovery thereof, unless the assignment savor of maintenance, as if it be made on condition that the suit shall be prosecuted, or if the as- signee undertake to pay costs, or make advances beyond the mere support of the exclusive interest he has so acquired.^ § 716. At law, whenever a debt is assigned, suit should be brought in the name of the original creditor, unless there be a privity between the debtor and the assignee.* But it is the policy of courts of equity to uphold assignments, when bond fide made, and to enable the assignee to sue in his own name, and enforce payment of the debt directly against the debtor, making him, as well as the assignor (if necessary), a party to the bill.5 § 717. There is another class of contracts, coming under this head, the object of which is a violation of the laws of another nation, which should, upon principle, be treated as utterly void, but which has never been directly pronounced ' Chiles V. Conley, 9 Dana, 385. " Jackson v. Ketohum, 8 Johns. 482 ; Jackson v. Andrews, 7 Wend. 152; Murray v. Ballou, 1 Johns. Ch. 673; Hawk. P. C. B. 1, eh. 27, tit. Champerty; Mowse v. Weaver, Moore, 655; 4 Kent, Comm. 449. 3 Harrington v. Long, 2 Myl. & K. 590, 592 ; Thallhimer v. Brincker- hoff, 3 Cow. 647; 2 Story, Eq. Jur. § 1050; Williams v. Protheroe, 6 Bing". 309. * Ante, § 376 e, et seq. See 2 Story, Eq. Jur. § 1041, and cases cited. = 2 Story, Eq. Jur. § 1057 ; Ex parte South, 3 Swanst. 393 ; Wood v. Griffith, 1 Swanst. 56 ; Hartley v. Russell, 2 Sim. & Stu. 244; Williams v. Protheroe, 5 Bing. 309 ; Leslie v. Guthrie, 1 Bing. N. C. 697 ; Malcohn V. Charlesworth, 1 Keen, 63 ; Spring v. South Car. Ins. Co., 8 Wheat. 268. 694 ILLEGAL CONTRACTS. [CHAP. XVIII. to be void by any court of common law, and, therefore, seems to form an exception to the general rule. It is greatly to be regretted that this class of cases should not be em- braoed within that lofty principle of law which annuls every contract having the taint of immorality, and that the com- mon law of England should crouch before the dictation of its commercial interests, so far as to permit its courts to be polluted by contracts wliich are founded in any species of fi-aud, bad faith, and immorality. In this respect, England and America may well receive a lesson from the principle, which is boldly enunciated in the Roman code : Pacta qua contra leges constittitionesquc , vel contra bonos 7nores, fiunt, niil- lam vim habere, iiidubitati juris est} The broad principles of international law seem to demand that universal comity, by which no one nation shall connive at the infraction of the laws of another. The highest policy of a people, as of an individual, is honesty. It is, also, the highest morality, which is far better; and, in an age in which commercial and mari- time intercourse is so extended, as to draw all nations closer into a peaceful brotherhood of interest and feeling, and to smooth the asperities of political economy, this doctrine de- forms the whole system of international jurisprudence. § 718. Xo nation can be justly called upon actively to enforce all the municipal regulations of another nation ; for this would be not only beyond the proper spliere of its duties, but would be an adoption of the foreign law. But, at least, it would seem desirable, that the law should not, by the en- forcement of contracts, having for their object the infringe- ment of a foreign law, afford oppoi'tunities, and multiply motives for acts, which are, at best, contrary to the private duty of the individual, and to the public right of the foreign nation. If the right of one nation to i-egulate its own com- merce, by its own legislation, be recognized, — to enforce a con- tract, made anywhere, in violation of its legal provisions, is to attack its ri.iilit, or at least, its power to carry that right into effect. And, therefore, when a wealthy and powerful nation enforces such contracts, it tyrannizes over the weaker. Such a principle tends to provoke retaliation, and retaliation gener- ' Cod. Lib. 2, tit. 3, § 6. CHAP. XVIII.] VIOLATION OP FOREIGN LAWS. 695 ates a multitude of evils, and awakens bad passions, which interfere with the interests of both countries. Indeed, if it were carried to its ultimate results, it would create a national right of remonstrance, and even of war ; but operating, as it does, only occasionally and secretly, and under the shadow of suspicion and immorality, it is productive of less practical evils in its results, but is not therefore the less repugnant to principle. § 719. There seems, in truth, to be no great difficulty in refusing to enforce a contract which is intended to violate the laws of another country upon the ground that the con- sideration is immoral. That it is the duty of every person in his intercourse with a foreign nation to conform to its laws is manifest ; that it is a violation of his duty not to do so is a correlative proposition. In the discussion of these cases, therefore, the question, how far one nation is bound to observe the laws of another nation, need not be determined. There is an easier solution of all difficulty, lying in the ques- tion whether the contract be founded upon a sufficient con- sideration. If it be immoral, it is not, and therefore is void. Then the only question is, whether a violation of private duty is immoral. Besides, such contracts tend to familiarize the mind with fraud, and to weaken the force of legal obHgation, and therefore should be rejected as void upon grounds of public policy. They are, in the quaint language of Lord Chief Justice Wilmot, contracts " to do that which is injurious to the community, and the reason why the common law says that such contracts are void, is for the public good. You shall not stipu- late for iniquity." ! § 720. Whether the doctrine contended against would govern in every case in which a contract is in violation of the laws of another nation than that wherein it was made, seems to be doubtful. But there is one class, which embraces nearly all of the cases to which the principle applies, — namely, contracts in violation of the revenue laws of another country, — which is undoubtedly governed by this doctrine. The settled rule of law is, that no nation is bound to pay any regard to the revenue laws of another nation ; and all contracts are treated as if such laws did not exist. This doctrine was first allowed 696 ILLEGAL CONTRACTS. [CHAP. XVIII. by Lord Hardwicke, in a case where the plaintiff shipped, by the defendant, a quantity of gold from Portugal, in viola- tion of the laws of Portugal by which such an importation was forbidden. The defendant refused to deliver the gold upon arriving at London, which was the port of destination ; and it was held to be no objection to the contract that it was in respect of an unlawful trade.^ The grounds of this decision were, that the public necessity required the importa- tion of bullion, and that, however it might be by the law of Portugal, by the law of England the trade was not only legal, but very much encouraged. So, also, where the plaintiff (be- ing a Frenchman) sold to the defendant (a British subject) certain goods, and the defendant gave a bill of exchange there- for, which was sued in the Court of Exchequer in England, it was held that the plaintiff could recover.^ This doctrine, ' Boucher v. Lawson, Cas. t. Hardwicke, 189. See also PlancW v. Fletcher, 1 Doug. 252. In tUs case, the voyage was evidently connived at by France, and favored by the English policy, for the purpose of exporting French goods. See also Lever v. Fletcher, 1 Marsh. Ins. 58 to 61 ; Holmau V. Johnson, 1 Cowp. 341 ; Biggs v. Lawrence, 3 T. R. 454 ; Clugas v. Pena- luna, 4 T. R. 466; Randall v. Van Rensselaer, 1 Johns. 94; Lightfoot v. Tenant, 1 Bos. & Pul. 651 ; Story, Conll. Laws, § 257. ' Pellecat v. Angell, 2 C. M. & R. 311. In this case. Lord Abinger said : " It is perfectly clear that where parties enter into a contract to con- travene the laws of their own country, such a contract is void ; but it is equally clear, from a long series of cajes, that the subject of a foreign country is not bound to pay allegiance or respect to the revenue laws of this ; except, indeed, that where he comes within the act of breaking them himself, he cannot recover here the fruits of that illegal act. But there is nothing illegal in merely knowing that the goods he sells are to be disposed of in contravention of the fiscal laws of another country. It would have been most unfortunate if it were so in this country, where, for many years, a most extensive foreign trade was carried on directly in contravention of the fiscal laws of several other states. The distinction is, where be takes an actual part in the illegal adventure, as in packing the goods in prohibited parcels or otherwise, there he must take the consequences of his own act ; but it has never been said that merely seUing to a party who means to violate the laws of his own countrj- is a bad contract. If the position were true which is contended for on the pait of the defendant, that this appears upon the plea to have been a contract for the express purpose of smuggling the goods, it would follow that it would be a breach of the contract if the goods were not smuggled ; but nothing of the kind appears upon the plea ; it only states a transaction which occurs about once a week in Paris ; the plaintiff CHAP. XVm.J VIOLATION OP FOREIGN LAWS. 697 however, although firmly established by the whole weight of subsequent decisions, has been repeatedly and vehemently repro- bated, as inconsistent with good faith, and repugnant to good morals. Nevertheless, it has found its advocates, and is de- fended by Valin and Emerigon;^ the latter for want of a sufficient reason, resorting to the poor excuse that smuggling is a vice common to all nations. Pothier, however, has de- cidedly condemned it, and he has been strongly seconded by many of the ablest writers.^ sold the goods, tlie defendant might smuggle them if he liked, or he might change his mind the next day ; it does not at all import a contract of which the smuggling was an essential part.'' See Kohn v. Schooner Renaisance, 5 La. Ann. 25. ' 2 Valin, Coram, art. 49, p. 127 ; 1 Emerigon, ch. 8, § 5, p. 212, 215, 218, edit, par Boulay Paty. " Pothier, Assur. n. 68, note of Estrangin. Mr. Justice Story, in his Commentaries on the Conflict of Laws, § 257, in stating the common-law rule, says : " An enlightened policy, founded upon national justice, as well as national interest, would seem to favor the opinion of Pothier in all cases where positive legislation has not adopted the principle, as a retaliation upon the narrow and exclusive revenue system of another nation. The contrary doctrine seems, however, firmly established in the actual practice of modern nations, without any such discrimination, too firmly, perhaps, to be shaken, except by some legislative act abolishing it." So, also. Chancellor Kent has taken ground with Pothior. He says: "It is certainly matter of surprise and regret, that in such countries as France, England, and the United States, distinguished for a correct and enlightened administration of justice, smuggling voyages, made on purpose to elude the laws, and seduce the subjects of foreign states, should be countenanced, and even encom'aged, by the courts of justice. The principle does no credit to the commercial jurisprudence of the age.'' So, also, Mr. Marshall and Mr. Chitty have added the sanction of their judgment to the doctrine as con- tended for by Pothier. 1 Marsh. Ins. 69 to 61, 2d ed. Mr. Chitty says : " There is something in these decisions to which a liberal mind cannot readily assent ; and the impropriety of them seems to have been hinted at by Lord Kenyon, in the before-mentioned case of Waymell v. Keed [5 T. R. 699]. It is impossible not to feel a greater inclination towards the opinion of Pothier, who observes, ' that a man cannot carry on a contraband trade in a foreign country, without engaging the subjects of that country to commit an offence against the laws which it is their duty to obey ; and it is a crime of moral turpitude to engage a man to commit a crime; that a man, carrying on commerce in any country, is bound to conform to the laws of that country ; and therefore to carry on an illicit commerce there, and to engage the sub- jects of that country to assist him in so doing, is against good faith ; and 698 ILLEGAL CONTRACTS. [CHAP. XVIII, USURY. § 721. In the next place, usurious contracts are void. Usury is defined by Sir Edward Colse to be " a contract upon a loan of money, or giving days for forbearing of money, debt, or duty, by way of loan, chevisance, shifts, sales of wares, or any other doings whatsoever." ^ In the usual acceptance of the term it signifies the illegal rent of money. § 722. Usury was held in abhorrence in England at as early a' date as the reign of Alfred, and the severest powers of the king and the church were exerted against the usurer.^ The Jews, who chiefly pursued the trade in money, were on this account not only branded with infamy and disgrace, but were fined, imprisoned, and banished the realm, while the Christians were forbidden, under the severest penalties, from pursuing it. It seems to be doubtful, however, whether all loans of money for rent were prohibited by common law, or whether only Jewish usury, which was forty per cent, was prohibited. Sir Edward Coke says, that " it appeareth that, by the ancient laws of the realm, usury was unlawful and punishable."^ consequently a contract made to favor and protect tliis commerce is peculiarly unlawful, and can raise no obligation.' If our law be justifiable in protecting these transgressions, it can be only on the plea of necossit}'. But where is the necessity? Shall we be told that it is impossible to ascertain in the English courts the complex provisions of another country's revenue law ? Surely this argument can avail but little, when it is recollected that in all cases where the argument is not coii\ enient, the law of another country, however complex, is the rule by which contracts negotiated in that country are tried and construed. It may be true that the rule of our law was adopted by way of retaliation for the illiberal conduct of other states, and is continued from a cautious policy. But a cautious policy in a great state is but too often a narrow policy ; and, after all, the best policy for a state, as well as for an individual, will perhaps be found to consist in honesty and honorable conduct. Indeed, the s3-stem is so directly opposite to (he clear principles of right feeling between man and man, that nothing could have withheld the states of Europe from concurring for its total abrogation, except the smallncss of the gain or loss that attends upon it." See also La Jeune Eugenic, -I Mason, 459, 461. » 3 lust, l.jl, c. 70. ^ Comyn on Usury, 2 ; 2 Roll. Abr. 800; Saunderson v. Warner, 2 Roll. 240. 3 3 Inst. 152. CHAP. XVIII.] USURY, 699 And the authority he cites seems to establish his assertion. But Chief Justice Hale thought that all usury was not against common law, but only Jewish usury.i At all events, by the statutes of 3 Henry VII. and 11 Henry VII., all usury is, in the words of Sir Edward Coke, " damned and prohibited." After the enactment of these statutes, however, public opinion began gradually to change upon this subject, and in the thirty- seventh year of the reign of Henry VIII. an act was passed sanc- tioning the taking of interest on loans of money, and limiting it to the amount of ten per cent per annum, but providing that any person taking more than such sum should forfeit for every offence the treble value of the money, &c., be forborne, and suffer imprisonment. But the effects of this statute not being found to be beneficial, or to serve to prevent excessive usury, it was repealed by the statute 5 & 6 Edward VI. ch. 20, and usury was entirely forbidden, under penalty of a forfeiture of the sum lent, and of the usury. The statute of 13 Elizabeth, ch. 8, re-established, however, the statute of Henry VIII., and fixed the legal rate of interest at ten per cent. Tliis percentage was afterwards reduced by the statute of 21 James I. ch. 17, to eight per cent ; by the 12th of Charles II. ch. 13, to six per cent; and by the 12 Anne, ch. 16, to five per cent, which at present regulates the law of interest in England. The rate of interest permitted by statute in the United States ranges, where usury laws prevail, at from six to ten per cent. § 723. In order to constitute the offence of usury, there must be, 1st. A loan ; 2d. It must be for more than legal in- terest ; 3d. The principal must be to be returned at all events. § 724. In the first place, there must be a loan. And it is not a loan of money for A. to purchase of B. a demand he has against C, though at C.'s request, and it is not usury for C. to secure the debt to A., although the latter purchases the claim at a discount.2 A contract, not for the loan of money or goods, nor for the forbearance of an existing debt, cannot be usurious.^ It is not, however, necessary that the transaction should be a formal loan ; for if it be, to all intents and purposes, the same ' Hardr. 420. » Crane v. Price, 35 N. Y. 494 (1866). « Stockwell V. Holmes, 33 N. Y. 53 (1865). 700 ILLEGAL CONTRACTS. [CHAP. XVIII. thing as a loan, it is of no consequence that it is effected under cover of a fictitious sale, or of any other mere formality of proceeding.^ Thus, where B., through an agent, applied to 0. to borrow a sum of money at an interest of fifteen per cent per annum, to be secured in a mortgage and lot ; and C. replied that he was willing to advance the money, but would have nothing to do with a mortgage, but that he would purchase the property for the sum required, and would rent it to B. for a rent equivalent to fifteen per cent on the sum advanced, with a privilege to B. to redeem the property for the sum advanced on paying up the rent ; and this j^roposition was acceded to ; it was held to be a usurious contract, the form in which it was put being merely a device for the evasion of usuiy.^ So, also, wherever money and goods are advanced together, or goods are advanced alone, to be taken at a specified price ; and at the end of a certain time, a sum equal to the price at which the goods are valued is to be returned, together with the money, the contract will be usurious, if it be manifestly intended as a loan, and if the value affixed to the goods be nominal or exces- sive, so as to have the effect of usury. Thus, where the plain- tiff, being desirous to raise a sum of money, applied to B., who advanced him a certain number of silks to sell and raise money upon, for which the plaintiff gave a note for £2224, and the goods were sold under the direction of the defendants for £799 ; it was held, that this contract was in substance an usurious loan, and was void.^ Again, the mere forbearance ' Scott V. Lloyd, 9 Peters, 418, 445 ; Bank of U. S. v. Waggener, 9 Peters, 400 ; Lloyd v. Scott, 4 Peters, '224 ; Douglass v. McChesney, 2 Kaad. 109 ; Chesterfield jj. Jansen, 1 Wils. 292 ; Lowe v. Waller, 2 Doug. 736 ; Comyn on Usury, sect. 8, p. 94 ; Davis v. Hardacre, 2 Camp. 375 ; Agricultural Bank v. Bissell, 12 Pick. 586. ' Tyson v. Rickard, 3 Har. & J. 109. ' Barker v. Yansommer, 1 Bro. C. C. 161. In this case the Lord Chan- cellor said : " It is argued by one gentleman that this was a mere sale, that, therefore, the court cannot look into it. I allow that, if this was in the com- mon course of trade, it would be so. That was the reason upon which the Court of Exchequer refused relief in the Duke of Ancaster's case. But I am to inquire whether, under the mask of trading, this is not a method of lending money at an extraordinary rate of interest. There is no doubt that if they had talked of this as a loan of money, there would have been an end of the case. The question, then, is only whether there is any method of CHAP. XVIII.] USURY. 701 to exact money held by another person at the time at which it is due upon an express or imphed agreement that more than legal interest shall be paid, is treated as an usurious loan.i § 725. In all such cases, ■where the usury does not appear on the face of the contract, the question whether the contract is a bond fide sale, or merely a cover for a loan, is for a jury to decide, in view of the circumstances of the case. And if they find that it is essentially a loan, it will be void for usury .^ The mere fact, however, that goods are advanced to enable a person to raise money upon them, creates of itself a presump- tion that the transaction is usurious,^ unless the circumstances indicate a willingness on the part of the person to whom they are advanced, to take them, and an expectation on his part of making a profit thereby.* Although, however, such a contract cannot be recovered upon, yet, if goods be advanced, the per- son to whom they are advanced is liable for the sum which they actually bring, but not for their value at the time of the transaction ; for the person advancing them knows that they showing the court that they meant so, short of their treating of it as such, in plain language. There is not a doubt that, in this case, the transaction was merely for the purpose of raising money, to supply the necessities of this young man. Do they deny knowing the goods were to be sold ? I take it, therefore, as an advancement of goods, instead of money, to supply his necessities. It is a question of more difficulty, what is the sum, of which the account is to be taken, whether the value of the goods, or the sum really made. In the case in Eq. Abr. 91, the court thought proper to charge the person only with what he really made of the goods, and this is the proper rule ; for the person advancing the goods knows that they are not to be sold in the shop, but in the lump, at a different kind of market, and that what can be got for them, in that way, is all that will redound to the benefit of the party to whom they are advanced ; this lays out of the case the value they were of, to be sold in the shop." ' Scott V. Lloyd, 9 Peters, 440 ; Floyer v. Edwards, 1 Cowp. 113. See Gray v. Belden, 3 Ela. 110 ; Craig v. Hewitt, 7 B. Monr. 476. 2 Tate V. Wellings, 3 T. R. 535 ; Train v. Collins, 2 Pick. 145, 152 ; Scott V. Lloyd, 9 Peters, 445 ; Stevens v. Davis, 3 Met. 211 ; Andrews v. Pond, 13 Peters, 65 ; Thomas v. Catheral, 6 Gill & J. 23 ; Tregoning v. Attenborough, 7 Bing. 97. = Davis V. Hardacre, 2 Camp. 375 ; Richards v. Brown, 2 Cowp. 770 i Rich V. Topping, 1 Esp. 176. * Coombe v. Miles, 2 Camp. 553. 702 ILLEGAL CONTRACTS, [CHAP. XTIII. are to be sold in a different place, and at once, and that the price they actually bring is all the benefit that the other party Avill receive from them.^ And, therefore, the law understands the contract to be a sale of goods for such a price as the first vendee shall acquire by a subsequent sale. § 726. In the next place, the loan, to be usurious, must be for more than the legal rate of interest. But if the contract be a mere device to secure an illegal rate of interest, it is equally usurious, whatever be its form. Thus, the mere form of a transfer of goods or stock, or of a discount of notes, or of an annuity, will not make a contract good, which is in sub- stance and intent of the parties an usurious loan.^ If, there- fore, a note payable in gold and silver, be taken for the full face of depreciated paper, which is lent, it will constitute usury. ^ So, also, if a note be antedated for the purpose of enabling the payee to receive more tlian legal interest, it is usurious.* So, also, where money was lent to a brewer, who, in consideration thereof, agreed to pay to the lender a salary as clerk in the brewery, more than equal in amount to the legal interest on the sum lent, it was held to be an usurious contract.^ So, also, if a man lend ^100 for a year on legal interest, and at the same time compel the borrower to take a loan of a house at £60 rent, which is not worth £20, the con- tract is usurious, it being a mere device to evade the statute.^ So, if one agrees, in consideration of obtaining a discount of a note for $1500 to use only $1000 for his general purposes, and ' Browning v. Morris, 2 Cowp. 792 ; Pit v. Cholmondeley, 2 Ves. 567 ; Ex parte Scrivener, 3 Ves. & B. 14 ; Scott v. Nesbit, 2 Bro. C. C. 641 ; Bar- ker t). Vansommer, 1 Bro. C. C. hr2; Hindle v. O'Brien, 1 Taunt. 413; Smith V. Bromley, 2 Doug. 696 ; Bond v. Hays, 12 Mass. 34; 1 Story, Eq. Jur. § 298, note, § 301, 302 ; Ex parte Sldp, 2 Ves. 489. ^ Tate V. Wellings, 3 T. R. 531 ; Smedley v. Roberts, 2 Camp. 607 ; Stribbling v. Bank of the Valley, 5 Rand. 132 ; Barker v. Vansommer, 1 Bro. C. C. 149. ^ Bank ofU. S. v. Owens, 2 Peters, 635; Bank of the Valley «. Stribling, 7 Leigh, 36. ' Williams v. Williams, 3 Green (N. J.), 255. ' Wright V. Wheeler, 1 Camp. 165, u. ' Saunder's Case, Shep. Touch. 62 ; Douglass v. McChesney, 2 Rand. 100. CHAP. XVIII.J USURY. 703 to allow the other $500 to remain on deposit for the payment of the $1500 note when due, this transaction is usurious and void.^ And so, where a bonus is deducted out of the original loan, though six per cent interest only be secured, yet, as the loan is reduced by the bonus, interest on the full sum would be more than six per cent on the actual sum lent,' and, therefore, usurious.^ Nor does it make any difference, whether the illegal interest is to be paid in mcJney or in goods ; the rule applies in both cases.^ § 727. Again, where the lender discounts the bill or note of the borrower, deducting more than legal interest, the con- tract will be void, if it be a mere cloak to cover a loan.* But although the discounter is in such case generally restricted to taking merely legal interest, he may, nevertheless, charge a reasonable sum in addition as a remuneration for any trouble, expense, or inconvenience, to which he may be put.^ It should, however, clearly appear that the additional compensa- tion was reasonable, and was not a mere device to evade the statute, or it will not be allowed.^ Thus, a banker, bill-broker, or other person, discounting a bill, may charge a reasonable commission for his trouble ; but if the commission be unrea- sonable, or a mere pretence to ol)tain more than legal interest, the contract will be usurious. Where, therefore, the holder of a note for $1000 payable to himself, requested another person to get it discounted, who by indorsing it procured it to be done, and paid over the avails, except thirty dollars, which he retained for his indorsement and services, it was held that the > East River Bank «. Hoyt, 32 N". Y. 119 (1865). ' Whitney v. Tyler, 12 Met. 193. ' Tyson v. Rickard, 3 Har. & J. 109 ; Comyn on Usury, sect. 15, p. 160. * Massa v. Dauling, 2 Str. 1243 ; Bank of U. S. v. Owens, 2 Peters, 537; Powell v. Waters, 8 Cow. 669; Matthews v. Griffiths, Peake, 200., * Auriol V. Thomas, 2 T. B. 52; Hutchinson v. Piper, 4 Taunt. 810; Baynes v. Fry, 15 Ves. 120 ; Comyn on Usury, sect. 12 ; Lyman v. Morse, 1 Pick. 295, note; Thurston v. Cornell, 38 N. Y. 281 (1868). " Masterman v. Cowrie, 3 Camp. 488 ; Lee v. Cass, 1 Taunt. 611 ; Ham- mettj). Yea, 1 Bos. & Pul. 144; Scott v. Lloyd, 9 Peters, 440; Kent ». Lowen, 1 Camp. 178; Comyn on Usury, sect. 12; Stevens v. Davis, 3 Met. 211; Beadle v. Munson, 30 Conn. 175 (1861), explaining Jacks v. Nichols, 1 Seld. 178. And see Hutchinson v. Hosmer, 2 Conn. 341. 704 ILLEGAL CONTRACTS. [CHAP. XVIII. transaction was usurious, and that the usury might be alleged in bar of a recovery of a subsequently substituted note.^ The mere fact, however, that interest on a bill of exchange is taken in advance, will not of itself make a loan usurious, if it be done bond fide and in the ordinary course of business,^ but the circum- stances of the case may render it usurious. So, the advantage which the lender obtains by the difference of exchange between the place of loan and the place oT payment, is not usury .^ But whether the transaction be a bond fide discount in the way of trade, or a loan of money made with an intent to exact usurious interest, is a question for a jury.^ It is not usury for the lender to exact as a condition of his loan, that the bor- rower shall also guaranty the payment of a debt due from some third party to the lender.^ Nor is it usury for the maker of a note to pay a consideration to a third person to indorse it and get it discounted at the bank ; and the latter can recover on it.^ § 728. A bona fide sale of negotiable securities is, how- ever, valid, for the mere inequality of price is not sufficient to vitiate a sale.^ So, also, the bond fide sale of one's credit by way of guaranty, or by making a note for another's accommo- dation, though for a compensation exceeding the legal rate, has ' Steele v. Whipple, 21 Wend. 103. See also Seymour v. Strong, 4 Hill, 255 ; Seneca County Bank v. Sehermerhorn, 1 Denio, 133. ^ New York Firemen Ins. Co. v. Ely, 2 Cow. 678 ; N. Y. Firemen Ins. Co. V. Sturges, 2 Cow. 664 ; Marsh v. Martindale, 3 Bos. & Pul. 154 ; Agricultural Bank v. Bissell, 12 Pick. 586 ; Utica Ins. Co. v, Bloodgood, 4 Wend. 652 ; Bank of Utica v. Phillips, 3 Wend. 408 ; Thornton v. Bank of Washington, 3 Peters, 40. ' Eagle Bank v. Rigney, S3 N. Y. 613 (1865) ; Oliver Lee's Bank v. Walbridge, 19 N. Y. 134. " * Supra, note 2 ; Marsh v. Martindale, 3 Bos. & Pul. 154 ; Masterman ». Cowrie, 3 C.imp. 488 ; Lyman v. Morse, 1 Pick. 295, note. * Valentine v. Conner, 40 N. Y. 248 (1869). And see Thomas v. Mur- ray, 32 N. Y. 605. « Chatham Bank v. Betts, 37 N. Y. 356 (1867) ; Van Duzer u. Howe, 21 N. Y. 531. ' Powell V. Waters, 8 Cow. 669 ; Nichols v. Pearson, 7 Peters, 103 ; Cram v. Hendricks, 7 Wend. 569 ; Churchill v. Suter, 4 Mass. 156 ; Bridge V. Hubbard, 15 Mass. 96 ; French v. Grindle, 15 Me. 163 ; Braman v. Hess, 13 Johns. 52; Munn v. Commission Co., 15 Johns. 44; Lane v. Steward, 20 Me. 98 ; Holford v. Blatchford, 2 Sandf. Ch. 149. CHAP. XVIII.] USURY. 705 been held not to be usurious, if the transaction be unconnected with a loan between the parties. ^ § 729. Contracts by which compound interest is secured, are not, in themselves, necessarily usurious. And parties may agree to settle accounts at stated times, and to turn any balance of interest due at such times into principal.^ So, also, an agreement to pay interest annually or semiannually, making rests at such times, and to add the interest then due to the principal, and treat this whole sum as principal, is valid.^ So, also, where there is no antecedent agreement, and after interest becomes due, a promise is made to pay interest thereon, in con- sideration of forbearance, it is good.* But if no antecedent agreement be made to settle accounts at stated times, or to make rests, and then to turn the interest into principal, if the ' More V. Howland, 4 Denio, 264 (Beardsley, J., dissenting) ; Mazuzan V. Mead, 21 Wend. 285 ; Ketchum v. Barber, 4 Hill, 224. 2 Wilcox V. Howland, 23 Pick. 167 ; Hamilton v. Le Grange, 2 H. Bl. 144; 8. c. 4 T. R. 613; Newal v. Jones, Mood. & M. 449; Eaton v. Bell, 5 B. & Al. 34 ; Mowry v. Bishop, 5 Paige, 98 ; Ex parte Bevan, 9 Ves. 223. In this case, Lord Eldon said : " As to the question of compound in- terest, it is clear you cannot a priori agree to let a man have money for twelve months, settling the balance at the end of six months ; and that the interest shall carry interest for the subsequent six months ; that is, you can- not contract for more than five per cent, agreeing to forbear for six months. But, if you agree to settle accounts at the end of six months, that not being part of the prior contract, and then stipulate that you will forbear for six months upon those terms, that is legal. So this is legal between merchants, where there is no agreement to lend to either, but they stipulate for mutual transactions, each making advances ; and that, if at the end of six months the balance is with A., he will lend to B. ; and vice versa. That sort of transaction has taken place. I admit, generally, that cannot be applied to the case of a real security ; and you may not, when the debt comes to a certain sum, take a real security and five per cent. I do not know, if that would do in a mercantile transaction. It is not enough to say in this case, that these accounts have been settled from half year to half year ; and there- fore it is legal to take interest in this way ; for the transactions may be evi- dence of previous agreement." See also Morgan v. Mather, 2 Ves. Jr. 20 ; Marsh u. Martindale, 3 Bos. & Pul. 154; Comyn on Usury, sect. 14, and cases cited ; Caliot v. Walker, 2 Anstr. 495 ; Bainbridge v. Wilcocks, Baldw. 538 ; Kellogg v. Hickok, 1 Wend. 521. ' Ibid. " Ibid. ; Eaton v. Bell, 5 B. & Al. 34; Newal v. Jones, Mood. & M. 449 ; Wilcox v. Howland, 23 Pick. 167 ; Tylee v. Yates, 3 Barb. 222. VOL. I, 45 706 ILLEGAL CONTRACTS. [CHAP. XTIII. person to whom the interest is due lets the time when it is payable pass without exacting payment, he cannot, in an action on the contract, recover compound interest.^ § 730. Ignorance of the law will not excuse a party from the penalties of usury, if his contract be, in fact, usurious.^ For if more than a legal rate of interest is intentionally taken, it is usury, whether the party be ignorant or not what was the legal rate.^ But where there was no intention to evade the law, a mere mistake of fact, resulting from accident, by which more than legal interest is allowed or taken, will not utterly vitiate the contract, but only afford a ground to reduce the sum to the legal rate.* Thus, where an agreement was made on the 23d of May, 1617, to lend £20 for a year, and the scrivener, in drawing up the bond for repayment, made it payable on the 24th of May next ensuing ; it was held, that, as this was purely a mistake of fact, and the parties had no corrupt intention, the agreement was not usurious.^ So, also, if a mistake be made in the calculation of interest, or indeed as to any. fact con- nected with the contract which gives it the appearance of usury, it may be explained, and will not vitiate the contract.^ But a mistake of laiu will not save an usurious contract. And if a greater rate of interest than is legal be reserved or taken by a party to a contract, on the mistaken supposition of a legal right so to do, the contract will be void for usury. '^ § 731. If there be an agreement to take more than legal interest, it is of no consequence that no unlawful excess of interest is taken, for it is equally void whether there be an actual payment or only a promise to pay.^ • Wilcox V. Rowland, 23 Pick. 167 ; Hastings'^. Wiswall, 8 Mass. 455; Doe V. Warren, 7 Greenl. 48. » Lloyd v. Scott, 4 Peters, 205. = Bank of Salina v. Alvord, 81 N". Y. 473 (1865). • Buckley v. Guildbank, Cro. Jac. 678 ; Ballard v. Oddey, 2 Mod. 307; Nevison v. Whitby, W. Jones, 396; Bush v. Buckingham, 2 Vent. 83; Glasfurd v. Laing, 1 Camp. 149 ; Comyn on Usury, sect. 2. ' Buckley v. Guildbank, Cro. Jac. 678. See also Nevison v. Whitby, W. Jones, 396 ; s. C. Cro. Car. 601. « Maine Bank v. Butts, 9 Mass. 49, 55 ; Bank of Utica v. Smalley, 2 Cow. 770 ; N. Y. Firemen Ins. Co. v. Ely, 2 Cow. 678 ; Gibson v. Stearns, 8 N. H. 185. ' Maine Bank v. Butts, 9 Mass. 49, 55. ^ Hammond v. Hopping, 13 Wend. 505 ; Clark v. Badgley, 3 Halst. 233. CHAP. XVIII.] USURY. 707 § 732. Again, a contract may be to be performed at the place where it is made, or elsewhere. And if the latter, it may be for a rate of interest which is illegal at the place where it is made, and legal where it is to be performed, — or the converse. And in this respect the rule as to usury is, that the law of the place where a contract is made governs its construction, unless it be to be performed in a different place, — in which case the law of the place of performance governs.^ If, therefore, a contract stipulate for a rate of interest which is illegal at the place where it is made, it will be void for usury, unless its tei'ms contemplate the performance thereof at a diiferent place, where the rate of interest secured is legal.^ Nor does it make any diiference as to this rule, that by the terms of the agreement the debt is to be secured by a mortgage on real property in a different place, — the law of the place where it is made will govern.^ If it do not manifestly appear that the contract is made with reference to the laws of another place, and in view of a performance elsewhere, the lex loci contractAs governs ; and a contract void thereby is void everywhere.* But where a contract is to be executed in a different place from that wherein it is made, and a higher rate of interest is permitted in the place of performance than in the place of making, the parties may stipulate for the highest interest, without rendering their contract usurious.^ So, also, it seems that a higher rate of interest than that allowed by either place may in some cases be secured by the contract, provided the amount above the legal interest be merely a mode of calculating the difference of ex- change, or be claimed as damages for some non-performance • 2 Kent, Comm. 460; Story, Confl. Laws, § 304, 305; Andrews v. Pond, 13 Peters, 78 ; De Wolf v. Johnson, 10 Wheat. 383 ; Robinson v. Bland, 2 Burr. 1077 ; Van Schaick v. Edwards, 2 Johns. Cas. 355 ; Thomp- son V. Powles, 2 Sim. 194; Boyce c. Edwards, 4 Peters, 111. "■ Ibid. ; Andrews v. Pond, 13 Peters, 78 ; Story, Confl. Laws, § 304, 805. ' De Wolf V. Johnson, 10 Wheat. 383. * Andrews v. Pond, 13 Peters, 78. "■ Ibid. ; Scofield ». Day, 20 Johns. 102 ; 2 Kent, Comm. 460, 461 ; Stapleton v. Conway, 8 Atk. 727 ; Dewar v. Span, 3 T. R. 425 ; Depau v. Humphreys, 8 Martin (n. s.), 1, 30. See Jacks v. Nichols, 1 Seld. 178; Davis 0. Garr, 2 Seld. 134. 708 ILLEGAL CONTRACTS. [CHAP. XTIII. by the debtor, and the transaction appear to be entirely bond fide and not a mere cover for usury .^ § 733. We now come to the third requisite of a usurious contract, namely, that the principal must be to be repaid at all events. In all contracts, therefore, where the lender of money assumes a risk upon the loan, by which the repayment of tlie sum is. hazarded, the contract is not usurious.^ Thus, if money be lent on bottomry, the repayment thereof being de- pendent on the safe arrival of the vessel, the lender may ex- act more than the legal rate of interest.^ So, also, the statute does not apply to contracts of insurance,* or of guaranty, nor to wagers,^ the very nature of which is risk, and conditional liability. Nor does it embrace post-obit contracts, by which the lender agrees, in consideration of a sum advanced on the spot, to give the latter a larger sum on the death of some par- ticular person, from whom the borrower has expectations, if he survive such person ; for although such contracts may be re- lieved against in equity as being unconscionable, when they are extortionate,^ yet they have never been considered as usurious, because of the hazard which attaches to them.^ So, also, the purchase of an annuity for life or lives, if made lond fide, and not as a mere cloak for usury, does not come within the regu- lations of the statute.^ Yet if the mere form of purchasing an annuity be assumed in order to evade the statute of usury, and ' Andrews v. Pond, 13 Peters, 65, 77, 78 ; Chapman v. Robertson, 6 Paige, C27 ; Peck v. Mayo, 14 Vt. 33 ; Story, Confl. Laws, § 307. See also post, § 1486, note. = Ex parte Wilson, 2 Jur. 98. ' Sharplcy v. Hurrel, Cro. Jac. 208 ; Sayer v. Glean, 1 Lev. 64 ; Long V. Wharton, 3 Keb. 304; Thorndike v. Stone, 11 Pick. 183. ' Joy V. Kent, Hardr. 418 ; Chesterfield v. Jansen, 1 Wils. 286 ; s. C. 1 Atk. 347. ' Button V. Downham, Cro. Eliz. 643 ; Lamego v. Gonld, 2 Burr. 715. « 1 Story, Eq. ,Jur. § 342 ; Lushington v. Waller, 1 H. Bl. 94 ; Chester- field V. Janssen, 1 Atk. 347 ; Mathews v. Lewis, 1 Anstr. 7 ; Wharton v. May, 5 Ves. 27 ; Boynton v. Hubbard, 7 Mass. 119. ' Lushington v. Waller, 1 11. BI. 94; Chesterfield v. Janssen, 1 Atk. 347 ; Batty v. Lloyd, 1 Vern. 141. ' Scott V. Lloyd, 9 Peters, 449 ; Lawley v. Hooper, 3 Atk. 278 ; Comj-n on Usury, sect. 5, and cases cited ; Chesterfield v. Janssen, 1 Atk. 347 ; 8. C. 1 Wils. 295. CHAP. XVIII.J USUET. 709 the contract be virtually a loan, and not a sale, it will be treated as usurious.^ The question is solely, what is the sub- stance of the transaction, and the true intent of the parties ; for if the contract be intended as a sale, it is good ; if it be in- tended as a loan, it is bad ; and this question is for the deter- mination of the jury upon the peculiar circumstances of the case.^ The mere fact, however, that a loan of money was talked about and meditated beforehand, although it affords ground for suspicion, will not of itself render a contract usurious 3 § 734. The rule^ therefore, is, that no contract is usurious, unless it be a loan for more than legal interest, of the repay- ment of which there is no hazard taken, except that wliich is necessary and incidental to a loan. The mere common risk of repayment of a loan is not sufficient hazard to take it out of the statute. If, however, the transaction be a formal evasion of the statute, and although it avoid the form of a loan, be, nevertheless, essentially a contract of borrowing and lending, it will be usurious, if more than legal interest be received thereby. And where a contract is not on the face of it usuri- ous, it is always a question for the jury to determine, whether it is a mere device to evade the statute, or is a bond fide transac- tion to which the statute does not apply,* — the intention of the parties being the test of the legality of a contract. § 735. In the next place, as to some general considerations. Where a contract is usurious in its origin, that is, whe're, by its original terms, it contemplates the taking of more than legal interest, it is utterly void. So strict is this rule, that even a bond fide holder of negotiable paper for a valuable consideration without notice cannot recover thereon, if such paper were origi- ' Ibid. ; Scott v. Lloyd, 9 Peters, 449 ; Marsh v. Martindale, 3 Bos. & Pul. 154; Drew v. Power, 1 Sch. & Lef. 182; Richards v. Brown, 2 Cowp. 776 ; Lloyd v. Scott, 4 Peters, 206. " Ibid. ; Richards v. Brown, 2 Cowp. 776. ' Train v. Collins, 2 Pick. 145 ; Murray v. Harding, 3 Wils. 390 ; 8. C. 2 W. Bl. 869 ; Scott v. Lloyd, 9 Peters, 449 ; Chesterfield v. Janssen, 1 Atk. 347. * Bank of U. S. v. Waggener, 9 Peters, 400 ; Scott v. Lloyd, 9 Peters, 445; Andrews v. Pond, 13 Peters, 65; Stevens v. Davis, 3 Met. 211; Thomas v. Catheral, 6 Gill & J. 23. 710 ILLEGAL CONTRACTS. [CHAP. XVIII. nally usurious.^ Nor does it matter that more than legal interest is not in fact exacted, for if the contract provide for the payment of an illegal rate of interest, and there be no mere mistakes of fact, it is void, whether such illegal interest be exacted or not.^ Every contract which is usurious in its origin is absolutely void, and no subsequent act of the parties can make it valid. § 736. So, also, if a new security be taken, or a new con- tract be made to pay a debt, or perform a contract which is usurious in its origin, as between the original parties, or as be- tween any parties who are cognizant of the usurious nature of the original contract, such new security or contract is void.^ But where a usurious bond or note comes to the hand of a lond fide holder, without knowledge of the usury, if a new contract be made, securing to him the full payment of such bond or note, it will be valid.* Again, if a usurious contract be originally made, and the parties thereto agree to substitute therefor a new contract which is not usurious, such new con- tract will be valid. ^ § 737. But where a contract is valid, and not usurious in its inception, any subsequent taking of more than legal interest will not render the original contract void, but only subject the party paying it to the penalty prescribed in the statute ; that is, the usury attaches in such cases to the person, and not to the ' Ackland v. Pcarce, 2 Camp. 599 ; Lowe v. Waller, 2 Doug. 736 ; Young V. Wright, 1 Camp. 141 ; Sauerwein v. Brurmer, 1 Harr. & Gill, 477 ; Powell v. Waters, 8 Cow. 669 ; Bank of U. S. v. Waggener, 9 Peters, 399. 2 Clark V. Badgley, 3 Halst. 233 ; Brown v. Fulsbye, 4 Leon. 43 ; Shep. Touch. 63 ; Body v. Tassell, 3 Leon. 205 ; s. c. 1 Mod. 69 ; Roberts v. Trenarne, Cro. Jac. 507 ; Hammond v. Hopping, 13 AVend. 505. ^ Bridge v. Hubbard, 15 Mass. 96 ; Cuthbert v. Haley, 3 Esp. 22 ; 8 T. R. 890 : Bank of U. S. v. Waggener, 9 Peters, 399 ; Ri-ed v. Smith, 9 Cow. 647 ; Powell v. Waters, 8 Cow. 669 ; Wickes v. Gogerly, 1 C. & P. 396 ; Hargreaves v. Hutchinson, 2 Ad. & El. 12 ; Brigham v. Marean, 7 Pick. 40 ; Moncure v. Deriuott, 13 Peters, 345 ; Chapman v. Black, 2 B. & Al. 588 ; Walker v. Bank of Washington, 3 How. 62. * Moncure v. Dormott, 13 Peters, 345; Kent v. Walton, 7 Wend. 256; Cuthbert V. Haley, 8 T. R. 390. " Barnes v. Hedley, 2 Taunt. 184 ; Wright v. Wheeler, Peake, Ad. Cas. 175 ; 8. c. 1 Cimp. 165, note ; Kilboiu-n v. Bradley, 3 Day, 356 ; Botsford e. Sanford, 2 Conn. 276. CHAP. XVIII.] USURY. 711 contract.^ So, also, if a new usurious contract be made to pay illegal interest on a contract or bond which was valid in its inception, the latter contract does not vitiate the former.^ And if a renewal note is avoided for usury, not affecting the original note, the latter may be recovered.^ If, therefore, one man, being already legally indebted to another, promise to for- bear exacting such debt, on condition that the latter shall pay usurious interest on it, such subsequent contract is void, but it does not prevent the party from recovering the original valid debt.* And if a note or security of any kind be originally given for a legal consideration, it cannot afterwards be rendered usurious in itself by any usurious sale or discount thereof, but the usury only attaches to the new contract or promise.^ So, if a valid claim is embraced in a subsequent security, which is invalid as being made upon usurious considerations, the valid claim is not made void, or in any way discharged.^ § 738. But although the mere fact that a contract contem- plates the taking of more than legal interest originally, makes it void, yet it does not subject the party contracting for it to the penalty of the statute, unless it be actually taken.'' The penalty is incurred only by the actual reception of interest, and if it be actually taken, it matters not whether the contract were or were not usurious in its origin,^ the legality or illegality • Bank of U. S. v. Waggener, 9 Peters, 399 ; Floyer v. Edwards, 1 Cowp. 112 ; Cram v. Hendricks, 7 Wend. 569 ; Braman v. Hess, 13 Jahns. 62 ; French v. Griudle, 15 Me. 163 ; Gardner v. Flagg, 8 Mass. 101 ; Thompson v. Woodbridge, 8 Mass. 256 ; Chadbourn v. Watts, 10 Mass. . 121 ; Pollard v. Scholy, Cro. Eliz. 20 ; Gray v. Fowler, 1 H. Bl. 462. ^ Ibid. ; Chitty on Cont. p. 612 a, note. » Farmers' and Mechanics' Bank v. Joslyn, 37 N". Y. 353 (1867) ; Crane V. Hubbel, 7 Paige, 413 ; Brown v. Dewey, 1 Sandf. Ch. 57 ; Billington v. Wagoner, 33 N. Y. 31. ■■ Ramsdell v. Soule, 12 Pick. 126 ; PoUard v. Scholy, Cro. Eliz. 20 ; Bank of U. S. V. Waggener, 9 Peters, 400. ' Ibid. 8 Cook V. Barnes, 36 N. Y. 520 (1867). ' Fisher v. Beasley, 1 Doug. 237; Loyd v. Williams, 3 Wils. 261; Commonwealth v. Frost, 5 Mass. 53; Simpson v. Warren, 15 Mass. 460; Maddock v. Hammett, 7 T. R. 184; Pearson v. M'Gowran, 3 B. & C. 700. 8 Ibid. ; Doe v. Brown, Holt, N. P. 296 ; Bank of U. S. v. Waggener, 9 Peters, 400. 712 ILLEGAL CONTRACTS. [CHAP. XVIII. of the original contract affording no criterion of the liability of the parties to the penalty, and the only question being, whether an illegal rate of interest has actually been recovered. § 739. In the next place, as to the effect of an usurious con- tract upon the remedies of the parties. The general rule is, that where parties have made an illegal contract, knowing it to bo so, no relief will usually be granted to them, either in law or in equity ; ^ but they will be left in whatever condition the contract places them, the maxim being. In pari delicto po- tior est coyiditio defendentis. There are, however, some excep- tions to this rule, and among them contracts for usury are admitted as an exception, on the ground of public policy.^ Although, therefore, an usurious contract for the payment of illegal interest is void, so that the lender not only cannot en- force it either at law or in equity against the borrower, but is subject to the penalty prescribed in the statute if he take illegal interest ; yet the borrower cannot avail himself of the defence of usury, nor can he reclaim the illegal interest already paid, unless he actually pay, or offer to pay to the lender all that is bond fide due to him ; that is, the principal actually lent, with the legal interest thereon.^ For although the borrower ' 1 Story, Eq. Jur. § 298; Tomkins v. Bernet, 1 Salk. 22; Smith v. Bromley, 2 Doug. 697 ; Collins v. Blantern, 2 Wils. 347 ; Worcester v. Eaton, 11 Mass. 308; M'CuUam v. Gourlay, 8 Johns. U7 ; Neville ». Wilk- inson, 1 Bro. C. C. .543 ; Watts v. Brooks, 3 Yes. 612; Osborne v. Williams, 18 Ves. 379; St. John v. St. John, 11 Ves. 635; Howson v. Hancock, 8 T. R. 575. ^ Smith V. Bromley, 2 Doug. 695, note. In this case, Lord Mansfield said: "If the act is in itself immoral, or a violation of the general laws of public policy, there, the party paying shall not have this action ; for, where both parties are equally criminal against such general laws, the rule is, potior est conditio defewhntis. But there are other laws which are calcu- lated for the protection of the subject against oppression, extortion, deceit, &c. If such laws are violated, and the defendant takes advantage of the plaintiff's condition or situation, there the plaintiff shall recover; and it is astonishing that the reports do not distinguish between the violation of the one sort and the other." Astley v. Reynolds, 2 Str. 916; Browning i;. Morris, 2 Cowp. 79U ; Clarke v. Shee, 1 Cowp. 20! I. ' Fanning v. Dunham, 5 Johns. Ch. 142 ; Fitzroy v. Gwillim, 1 T. R. 153; Hindle «. O'Brien, 1 Taunt. 413; Astley v. Reynolds, 2 Str. 915; Clarke v. Shee, 1 Cowp. 200; Mason v. Gardiner, 4 Bro. C. C. 436 ; Rogers t). Rathbun, 1 Johns. Ch. 367. CHAP. XVIII.] USURY. 713 will be protected against usury, he will not be allowed to avail himself thereof for the purpose of taking advantage of the lender, and defrauding him of money actually advanced ; the maxim being, that he who seeks equity must do equity.^ § 740. If, however, the borrower offer to repay the principal borrowed, together with legal interest thereon, he may avail himself of usury as a defence to an action on a contract to pay more than legal interest.^ So, also, if he have already paid the money on such an usurious contract, he may reclaim the excess paid above the principal and legal interest, and no more ; ^ the necessity of his wants, and the duress of circum- stances affording the reason for not applying to him the gen- eral rule applicable to a particeps criminis, namely, that the law will leave him where it finds him. The exceptional rule in these respects is the same, both in law and in equity, usury being permitted to him with the same limitation in both fo- rums, as either a defence or a ground of relief. Where goods have been advanced for the borrower to raise money upon, he would only be bound to offer to pay to the lender the actual price received thereon, and interest, and not the value of the goods ; for as money and not goods is the object of such a con- tract, the borrower is only bound to repay the money actually produced by the goods.* § 741. The right to avoid a contract for usury adheres only to the parties, and a stranger cannot avail himself of usury as a defence.^ Thus, a subsequent mortgagee cannot take advantage of usury in a prior mortgagee.* But where a person is indirectly connected with the contract, as if he be a ' Ibid. ; Scott v. Nesbit, 2 Bro. C. C. 649 ; 1 Story, Eq. Jur. § 301 ; Ex parte Skip, 2 Ves. .489 ; Benfield v. Solomons, 9 Ves. 84. ' See eases cited supra. ' 1 Story, Eq. Jur. § 302; Smith v. Bromley, 2 Doug. 696, note; Browning v. Morris, 2 Cowp. 792 ; Bond v. Hays, 12 Mass. 34 ; Bosanquett V. Dashwood, Cas. t. Talb. 41 ; Pit v. Cholmondeley, 2 Ves. 567. * Earlier v. Vansommer, 1 Bro. C. C. 161. 5 Ohio & Miss. Railroad Co. v. Kasson, 37 N. Y. 218 (1867) ; Williams V. Tilt, 36 N. Y. 319 (1867). And see Dix v. Van Wyck, 2 Hill, 622 ; Post V. Dart, 8 Paige, 640'; Billington v. Wagoner, 33 N. Y. 31 (1866). « Mechanics' Bank v. Edwards, 1 Barb. 271 ; Stoney v. American Life Ins. Co., 11 Paige, 636. 714 ILLEGAL CONTHACTS. [CHAP. XVITI. guarantor thereon, he is so far a party as to entitle him to the defence of usury .^ § 742. If a principal deliver money to his agent to loan on lawful interest, and the agent, without his knowledge, exacts also a bonus for himself, the principal is not affected thereby, and the loan as to him is not void for usury. ^ TKADING WITH AN ENEMY WITHOUT LICENSE. § 743. Every contract made with an euemy, with knowledge that he is so, is void, unless it be made with the special per- mission of the government.^ Thus, a policy of insurance upon the property of an enemy is void.* And the same rule applies to the case of bills of exchange, promissory notes, and all other contracts, made with the subject of an enemy's country. This rule is said to obtain upon the ground that the resources of the enemy may be thereby increased and his wants sup- plied.^ ' But this prohibition cuts both ways ; for the resources of the other party may be equally increased, and his wants equally relieved. The true reason seems to be, that the two parties are at war, and it is the policy of war for each party to injure the other party to its utmost ability, even though such injury may be recoiling continually. Besides, no two coun- tries can be at war while the citizens thereof are at peace, for the very objects of war might be thereby frustrated. § 744. It is partly on this ground at least that no action will lie for goods sold to aid in the late rebellion against the United States ; ^ and a note for such supplies stands on the • Huntress v. Patten, 20 Me. 28. « Bell V. Day, 32 N. Y. 165 (1865) ; Condit v. Baldwin, 21 N. Y. 219. ' See Griswold v. Waddington, 15 Johns. 57; 8. c. 16 Johns. 438, in which the whole doctrine respecting the illegality of commercial intercourse between belhgerents is thoroughly discussed, and the cases examined. 1 Kent, Comm. 68 ; Scholefield v. Eichelberger, 7 Peters, 586 ; Story on Bills, § 99 to 105. ^ Phillips on Insurance, subsec. 147, 223, 237 et seq., and cases cited. ° Willison V. Patteson, 7 Taunt. 417, and oases cited in American edition. « Hanauer v. Doane, 12 Wall. 842 (1870) ; Texas v. White, 7 Wall. 700. See also Hamilton v. Nowlin, 5 Cold. 84 (1867) ; Tatum v. Kelley, 25 Ark. 210 (1868) ; PuiddcU v. Landers, ib. 238; McMurtry v. Ramsey, ib. 349; Portis V. Green, ib. 376. CHAP. XVIII.] TRADING WITH AN ENEMY WITHOUT LICENSE. 715 same ground.^ So, a note by a person to a substitute, to pay for his serving in the Confederate army, is void.2 But a note given to pay for rent of a hospital building for Confederate sol- diers, has been held good.^ So, a carrier employed in carry- ing Confederate troops to the war, is not liable for negligent injury to a captain of a Confederate company or crew.* So, contracts founded upon or in consideration of Confederate notes, are not binding.^ And a note and mortgage, the con- sideration of which was a loan of Confederate notes, are void.® But payment in Confederate notes, once accepted, cannot be recovered.'^ § 745. So, also, all commercial partnerships existing between citizens of the two countries are dissolved by war, so that nOy new contract can arise between them pending such war.^ This rule was even carried so far, as to prohibit a remittance of supplies to a British colony, during its temporary subjection to the enemy, although the supplies were but partially and im- perfectly made by the enemy, and when they were absolutely necessary.9 Nor can an ally engage in trade with a common enemy, without rendering himself liable to the penalty of seiz- ure and forfeiture of property so engaged, i'' If, however, a ' Waitzfelder v. Kahnweiler, 56 Barb. 800 (1870). The mere fact, how- ever, that the profits of a firm come in part from work done for the Confed- erate government will not so far affect the whole profits as to make a note void which has been given by one member of the firm to another, though the note be founded on a division of that fund. GuUatt v. Thrasher, 42 Ga. 429 (1871). 2 Chancely v. Bailey, 37 Ga. 632 (1868) ; Pickens v. Eskridge, 42 Miss. 114 (1868). « Fottrell V. German, 6 Cold. 580 (1868). * Martin v. Wallace, 40 Ga. 52 (1869). And see Wallace v. Cannon, 38 Ga. 199. ' Hale V. Sharp, 4 Cold. 276 (1867) ; Walker v. Walker, ib. 300. ° Stillman v. Looney, 3 Cold. 20 (1866) ; Thornburg v. Harris, ib. 157 (1866) ; Gill v. Creed, ib. 295 (1866) ; Potts v. Gray, ib. 468 (1866). 7 Henly v. Franklin, 3 Cold. 472 (1866). 8 Griswold v. Waddington, 16 Johns. 57; s. c. 16 Johns. 438, 488; Sea- man V. Waddington, 16 Johns. 510 ; Bank of New Orleans v. Matthews, 49 N. Y. 12 (1872) ; McStea v. Matthews, 50 N. Y. 166 (1872). » La Bella Giudita, cited in The Hoop, 1 Rob. Adm. 207. " The Nayade, 4 Rob. Adm. 251 ; The Neptunus, 6 Rob, Adm. 403. 716 ILLEGAL CONTRACTS, [CHAP. XTIU. plaintiff be deceived by the defendant, and trade with him, not knowing him to be an enemy, he may, after the return of peace, maintain an action upon such a contract. § 746. During war, all right of action is suspended between belligerents, unless the alien enemy be under the protection of the government ; as, where he comes into the country by li- cense during war ; or being there at the time of the war, is permitted to continue. Thus, where, during a war between England and America, an American vessel, pretending to be a neutral, went into Bermuda, and in the character of a neu- tral obtained credit for repairs ; it was held, that the owners of the vessel were an,swerable, on the restoration of peace, to the British merchants who aided them to repair ; upon the ground that the plaintiffs were ignorant of the national character of the vessel, and dealt upon the faith that they were dealing with a neutral.^ § 747. A license, however, from the government, legalizes the contracts of its subjects with foreign enemies, so that they may be enforced in the courts of the licensing government, and the party be protected from prize law.^ If, however, the license be limited, and its limitations be transgressed, it will legalize any contract, or portion of a contract, within its terms. Thus, where the license only extended to the Importation of certain specific articles from the enemy's port, and others were taken on board, not included in the license ; it was held, that the license protected the articles within its terms.^ § 748. The only exception that obtains to this strict rule, is the case of ransom bills, which are contracts of necessity.* But a ransom bill cannot be put in suit on the part of the alien enemy in the courts of the other belligerent. And in England, where such contracts were formerly legal, proceedings were always carried on in the name of the hostage suing for his » See ante. Alien, § 54 ; Crawford v. The Wm. Penn, Peters, C. C. 106 ; Musson V. Fales, 16 Ma.ss. 832. See Coolidge v. Inglee, 13 Mass. 46. ' Patton V. Nicholson, 3 Wheat. 207, note; Crawford v. The Wm. Penn, Peters, C. C. 106. ' Butler V. AUnutt, 1 Stark. 222 ; Keir v. Andrade, 6 Taunt. 498 ; Camelo V. Britten, 4 B. & Al. 184; Clark v. Protection Ins. Co., 1 Story, 128. * 1 Kent, Comm. 68 ; Maisonnaire v. Keating, 2 Gall. 336. CHAP. XVIII.J TRADING WITH AN ENEMY WITHOUT LICENSE. 717 liberty.i A bill of exchange drawn or negotiated in favor of any person competent to sue, would, however, be binding, if it wei-e given for a ransom of a captured ship, unless it were pro- hibited by some statute.^ So, also, a bill, drawn by a prisoner of war upon a fellow-subject resident in his own country, will be valid, whether it were made payable to an alien enemy, or indorsed to him, if it be for the purpose of obtaining necessaries and subsistence for the prisoner.* So, also, in cases of cartel- ships, where bills are drawn and negotiated in the enemy's country, for purposes connected with the objects of the voyage, such as for necessary repairs, provisions, and other supplies, they are valid.* ' The Rebecca, 5 Rob. Adm. 102; Maisonnaire v. Keating, 2 Gall. 325, 337, 341; Story on Bills, § 101. The statute of 43 George III. ch. 160, § 33-35, forbids contracts for ransoming captured property, and renders them void in England. ' Cornu ». Blackbume, 2 Doug. 641 ; Anthon v. Fisher, 2 Doug. 649, note ; Yates v. Hall, 1 T. R. 73 ; Maisonnaire v. Keating, 2 Gall. 325, 337, 341 ; Ricord w. Bettenham, 3 Burr. 1734; Brandon v. Nesbitt, 6 T. R. 23,; Story on Bills of Exchange, § 101 ;' PuiFendorf de Jure Nat. et Gent. Lib. 8, cap. 7, § 14, and Barbeyrac's note ; Vattel, B. 3, ch. 16, § 414. 8 Antoine v. Morshead, 6 Taunt. 237 ; Daubuz v. Morshead, 6 Taunt. 332 ; Duhammel u. Pickering, 2 Stark. 90 ; Bayley on Bills, ch. 2, § 9, p. 75, 76. ^ Potts 0. Bell, 8 T. R. 548. See also Houriet v. Morris, 3 Camp. 303 ; The Hoffnung, 2 Rob. Adm. 162 ; The Cosmopolite, 4 Rob. Adm. 8 ; The Clio, 6 Rob. Adm. 67 ; Story on Bills, § 102, 103. As to the operation of the doctrines of the text upon cases growing out of the late civil war in this country, between parties on opposite sides of the military lines, consult United States v. Six Boxes of Arms, 1 Bond, 446 ; Brown V. Hiatt, 1 Dill. 372 ; Dean v. Nelson, 10 Wall. 158 ; Ludlow v. Ramsey, 11 Wall. 581 ; Caldwell v. Harding, 1 Lowell, 326 ; Cocks v. Izard, 4 Am. Law T. Rep. 68 ; Elgee v. Lovell, 1 Woolw. 102 ; Hamilto» v. Mutual Life Ins. Co., 9 Blatchf. 234; Semmes v. Hartford Fire Ins. Co., 13 Wall. 158; Phillips v. Hatch, 1 Dill. 571 ; Montgomery v. United States, 15 Wall. 395 ; Butler u. Maples, 9 Wall. 766. As to contracts made between parties within the Confederate lines, see Thorington u. Smith, 8 Wall. 1 ; Hanauer v. Woodruff, 15 Wall. 439 ; Delmas v. Insurance Co., 14 Wall. 661 ; White v. Hart, 13 Wall. 646 ; Osbom v. Nicholson, ib. 654; Cappell I). Hall, 7 Wall. 542 ; McKesson v. Jones, 66 N. C. 258 ; Williams v. Mon- roe, 67 N. C. 33 ; Cronley v. Hall, ib. 9. 718 ILLEGAL CONTRACTS. [CHAP. XTIII. ILLEGAL TAXATION. § 749. The rule concerning the liability of a party upon a note given for the payment of taxes during the existence of the Southern Confederacy has been in substance thus stated : A de facto government, able to maintain its supremacy by its arms, may exercise the power of taxation. But after it has assessed a tax, if it is overthrown before the tax is collected, and the power of the rightful sovereign is re-established, the tax will not be enforced. Those who have paid the tax have no redress, since they can look only to the defunct govern- ment ; but those who were not compelled to pay during the existence of the government, will not be liable afterwards upon any notes or securities given for it.^ ' Brown, C. J., in O'Bryne w. Savannah, 41 Ga. 331, 336 (1870). This was the case of a note given for taxes assessed by the authorities of Savan- nah during the war. In general, if an illegal tax be assessed and collected under protest, the amount may be recovered in an action for money had and received. Newman v. Livingston Co., 45 N. Y. 676 (1871) ; Lorillard v. Monroe, 11 N. Y. 392 ; Mygatt v. Chanango, lb. 563 ; Chegaray v. New York, 12 N. Y. 220 ; Chapman v. Brooklyn, 40 N. Y. 381 ; Joy u. Oxford, 3 Greenl. 131 ; Preston v. Boston, 12 Pick. 7 ; Goodrich v. Lunenburg, 9 Gray, 38 (1857) ; Middlesex Railway Co. v. Charlestown, 8 Allen, 332 (1864) ; Bacon v. Barnstable, 97 Mass. 421 (1867) ; Carleton y. Ashburn- ham, 102 Mass. 348 (1869). See Barrett v. Cambridge, 10 Allen, 48 (1865) ; Gerry u. Stoneham, 1 Allen, 319 (1861) ; Tobey v. Wareham, 2 Allen, 694 (1861) ; Tinslar v. Davis, 12 Allen, 79 (1866) ; Salmond v. Hanover, 13 Allen, 119 (1866). CHAP. XIX.] CONTRACTS IN VIOLATION OP A STATUTE. 719 CHAPTER XIX. CONTRACTS IN VIOLATION OF A STATUTE. § 750. We now come to the consideratioii of contracts in violation of a statute; and the rule in regard to such con- tracts is, that they are utterly void, whether the consideration of the agreement, or the act to be performed, be in violation of a statute.^ And a note or check made absolutely void by statute is so in the hands of an innocent holder for value.^ § 751. A statute may either expressly prohibit or enjoin an act, or it may impliedly proliibit or enjoin it by affixing a penalty to the performance or omission thereof. Nor does it make any difference, whether the prohibition be express or implied ; in either case a contract in violation of its provisions is void.^ It was, however, formerly held, that, if a statute only annexed a penalty to the performance of certain acts or con- tracts, without expressly prohibiting them, the penalty was to be considered, not as punishment or prohibition, but only as a tax, which would not invalidate the act or contract, but only subject the party infringing the provision of the statute to the ' Bartlett v. Vinor, Carth. 252; Holman v. Johnson, 1 Cowp. 343 Mouys V. Leake, 8 T. R. 411 ; Kerrison v. Cole, 8 East, 231 ; Doe v. Pitcher, 6 Taunt. 869 ; Greenwood v. Bishop of London, 6 Taunt. 727 Newman v. Newman, 4 M. & S. 66 ; Wigg i). Shuttleworth, 13 East, 87 Ribbans v. Crickett, 1 Bos. & Pul. 264 ; GaUini v. Laborie, 6 T. R. 242 Law V. Hodson, 11 East, 300; Tales v. Mayberry, 2 Gall. 560; Hunt v. Knickerbacker, 6 Johns. 327 ; and Wheeler «. Russell, 17 Mass. 258, where all the cases are collected and discussed. ' Conklin v. Roberts, 36 Conn. 461 (1870). ' De Begnis v. Armistead, 10 Bing. 107 ; Fergusson v. Norman, 5 Bing. N. C. 80 ; Wetherell v. Jones, 3 B. & Ad. 221 ; PeUeoat ». Angell, 2 C. M. & R. 311 ; Bell v. Quin, 2 Sandf. 146 ; Barton v. Port Jackson Plank Road, 17 Barb. 404 ; Aiken v. Blaisdell, 41 Vt. 655 (1869). 720 CONTRACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. payment of the penalty .^ Thus, under the statute of 27 Henry VI., which imposes a penalty for selling property at a fair on Sunday, a sale made on that day was held to be binding, al- though the seller was liable to pay the penalty.^ But this doc- trine has long since been exploded ; and it is now well settled, that a penalty implies a prohibition, though there be no pro- hibitory words in. the statute ; and that an agreement in viola- tion of a statute prohibiting or enjoining an act absolutely, or only under a penalty, cannot be enforced.^ But a statute which subjects to a penalty " every pedler or other person going from place to place, carrying to sell, or exposing for sale any goods without license," has been held not to render illegal a sale made by such pedler or other person without license, and the price of goods thus sold may be recovered by suit.* The penalty is not attached to the sale, but to the exposing for sale. And there is no distinction between an act forbidden by law under a speci- fied penalty, and one for which merely a specified penalty is provided.^ § 752. Thus, it was held, that an action would not lie for breach of an agreement to dance at a certain theatre, it not being licensed, according to the provision of the statute of 10 George 11.^ So, also, a note given for shingles, not sur- ^ Comyns v. Boyer, Cro. Eliz. 485 ; Gremare v. Valon, 2 Camp. 144 ; 1 Black. Comra. 68. See Ex parte Dyster, 2 Rose, 349; Johnson ». Hudson, 11 East, 180. '' Comyns v. Boyer, Cro. Eliz. 485. See also Ex parte Dyster, 2 Rose, 349 ; Gremare v. Valon, 2 Camp. 144. ^ Drury v. Defontaine, 1 Taunt. 136, in which Lord Mansfield said: "If any act is forbidden under a penalty, a contract to do it is now held void. That case [Comyns v. Boyer, Cro. Eliz. 485] is not now law." Bartlett v. Vinor, Carth. 252 ; Skinner, 322 ; De Begnis ». Armistead, 10 Bing. 110 ; Beusley v. Bignold, 5 B. & Al. 335 ; Nichols v. Ruggles, 3 Day, 145 ; Tyson v. Thomas, M'Clel. & Y. 119 ; Forster v. Taylor, 5 B. & Ad. aS7 ; Little v. Poole, 9 B. & C. 192 ; Fenuell v. Ridler, 5 B. & C. 406; s. c. 8 Dowl. & Ry. 204 ; Smith v. Sparrow, 4 Bing. 84 ; Kcpner v. Keefer, 6 Watts, 231; Clark v. Protection Ins. Co., 1 Story, 119; Wheeler v. Russell, 17 Mass. 258 ; Pattee v. Greely, 13 Met. 284 ; Bell v. Quin, 2 Sandf. 146. ■• Jones V. Berry, 33 IST. H. 209 (1856), citing and approving Williama V. Tappan, 3 Foster, 385 ; and Braokett v. Hoyt, 9 Foster, 264. 6 Aiken v. Blaisdell, 41 Vt. 655 (1869). « Gallini v. Laborie, 6 T. R. 242 ; The King v. Handy, 6 T. R. 286. CHAP. XIX.] CONTRACTS IN VIOLATION OF A STATUTE. 721 veyed, and not of the dimensions required by the statute for- bidding the sale, is void.^ So, also, a contract is void, for the same reason, if made for lottery tickets ; ^ or for bank-notes, the sale or circulation of which is prohibited, under a penalty ; ^ or for the sale of spirituous liquors contrary to law ; * or for an insurance on naval ' stores, exported against an order in council ; ^ or for the proceeds of a voyage in the slave-trade ; ® or for the sale of a title to lands, previously adjudged to be illegal ; ^ or for insurance on a voyage, really intended in violation of the non-intercourse acts. ^ A license to retail spirituous liquors, granted for one year, and for which the licensee has paid one dollar to the clerk of the board of public officers which issued it, as required by statute, is not a contract, and is annulled by the passage, within the year, of an act pro- hibiting all sales of intoxicating liquors, except in certain cases not within such a license.^ But sometimes contracts are pro- hibited for the mere protection of one of the parties against an undue advantage which the other party is supposed to possess over him. In such cases the parties are. not regardecj as being equally guilty ; and so the rule is not deemed applicable, though both have violated the law.^" Cases of usury, of money paid to a creditor by a bankrupt to procure his signature to a cer- ' Wheeler v. Russell, 17 Mass. 258 ; Law v. Hodgson, 2 Camp. 147 ; s. o. 11 East, 300; Forster v. Taylor, 5 B. & Ad. 889. See also Springfield Bank v. Merrick, 14 Mass. 322. ' Hunt V. Knickerbacker, 5 Johns. 327. = Springfield Bank v. Merrick, 14 Mass. 322. ■* Perkins v. Cummings, 2 Gray, 268. See Gaylord v. Soragen, 32 Vt. 110 (1859) ; Converse v. Foster, 32 Vt. 828 (1860) ; Backman v. Mussey, 81 Vt. 547 (1859) ; Harrison v. Nichols, ib. 709 ; Buck v. Albee, 27 Vt. 190 (1856) ; s. c. 26 Vt. 184 (1854). * Parkin v. Dick, 11 East, 502. « Tales V. Mayberry, 2 Gall. 660. ' Mitchell V. Smith, 1 Binn. 110. ' Russell V. Degrand, 15 Mass. 35. See also Ribbans v. Crickett, 1 Bos. & Pul. 264; Camden v. Anderson, 6 T. R. 723; 1 Phillips on Ins. ch. 3, § 2 ; 1 Com. on Cont. 39, 46, 1st ed. » Calder v. Kurby, 5 Gray, 597. '» Deming v. The State, 23 Ind. 416 (1864), Frazer, J. ; overruling The State V. State Bank, 5 Ind. 353. See Browning v. Morris, 2 Cowp. 790 : Howson U.Hancock, 8 T. R. 675; Worcester v. Eaton, 11 Mass. 368; Wheaton v. Hibbard, 20 Johns. 292 ; Schroeppel v. Corning, 5 Denio, 236. VOL. I. 46 722 CONTRACTS IN VIOLATION OP A STATUTE. [CHAP. XIX. tificate, contrary to statute, and money paid in violation of acts regulating lotteries, are mentioned as examples ; in such cases the money paid could not be recovered.^ § 753. So, also, all contracts made in violation of the statute forbidding persons from exercising any " worldly labor, busi- ness, or work of their ordinary (or secular) callings, upon the Lord's day, or any part thereof (works of necessity or charity alone excepted)," come under the general rule, and are void. Nor does it matter as to the validity of a contract made on Sunday, whether it be made privately or publicly ,2 or that the delivery of the thing contracted for takes place subsequently, on a week-day .3 Thus, where a horse was sold on Sunday, upon a warranty, the warranty was held to be void.* And the ' Deming v. The State, supra. "^ Fennell v. Ridler, 5 B. & C. 406 ; State v. Suhur, 33 Me. 539. But see Boynton v. Page, 13 Wend. 425. ^ Foreman v. Ahl, 55 Penn. St. 325 (1867). ' The statutes of Khode Island and South Carolina follow the statute of 29 Charles II. oh. 7, § 1, as set forth in the text. In the statute of New Hampshire the words are " of his secular calling to the disturbance of others," and there is also a prohibition to " use any play, game, or recreation on that day or any part thereof." But the statutes of Maine, Vermont, jMassachusetts, Connecticut, and Pennsylvania interdict eoeri/ land of secular labor on Sunday, whether in one's ordinary calling or not. The courts of these States have, with the exception of jNIassacliusetts, pronounced all con- tracts made in violation of this statute to be void. Fox v. Abel, 2 Conn. 560 ; Lyon v. Strong, 6 Vt. 219 ; Adams v. Gay, 19 Vt. 358 ; Clough v. Davis, 9 N. H. 500 ; Varney v. French, 19 N. H. 233 ; Kepncr v. Keefer, 6 ^\ai.ts, 231 ; Berrill v. Smith, 2 Miles, 402 ; Fox v. Mensch, 3 Watts & Serg. 444. The New York statute refers only to " servile labor" and " exposing goods for sale." But the judicial opinions in Massachusetts seem to indicate a broader doctrine ; and although there is no express decision, which contra- dicts the general doctrine, there are some dicta which point that way. In the case of Geer v. Putnam, 10 Mass. 312, which was assumpsit on a promissory note, the defendant pleaded in bar, that it was made on Sund.ay ; to which the plaintiff replied by a general demurrer. Judgment being rendered for the plaintiff in the Common Pleas, the defendant brought a writ of error in the Supreme Court, where his counsel abandoned the point, and the judgment was affirmed. But the general question was not considered by the^ court at all, it not being necessary ; for the plea was clearly bad, on generaj demurrer, for not alleging either that the note was made within that part of the Lord's day on which secular business is prohibited, or was not withir^ the exception in respect to works of necessity or charity. The judg- CflAP. XIX. J CONTEACTS IN VIOLATION OP A STATUTE. 723 same would be true of a note in the hands of the payee given for the purchase of the horse ; ^ though it would be other- wise of a note in the hands of a bond fide indorsee.^ If the statute declares the contract void, only in case it be made be- fore sunset on Sunday, it must appear affirmatively that it was ment, therefore, was right, upon the defective state of the pleadings. In Clap V. Smith, 16 Pick. 247, the authority of Geer v. Putrtam was recog- nized, and the opinion of the court was founded thereupon; in this case, it was said, by Wilde, J., that the case of Geer v. Putnam having been so long before the public, and no attempt having been made in the legislature to change the exposition of this law, the statute might be considered as expounded by public opinion, and, therefore, as not prohibiting the making of contracts on that day. This, however, was extrajudicial ; for, in the case at bar, the question was, whether an assignment in general terms, referring to a schedule annexed, which was executed on Saturday, but the assignment not being annexed until Sunday, was valid. Here, also, it did not appear on what part of the day the schedule was annexed ; but the court held, that if the assignment were void, yet the plaintiff's title was good, as supported by verbal proof of a delivery to him, in trust. Since the above note was written, the courts of Massachusetts have distinctly declared the doctrine which elsewhere obtains, that all contracts made on Sunday, being in violation of a statute prohibiting " the doing of any labor, business, or work, except only works of charity and necessity," are void. In Robeson v. French, 12 Met. 24, it was decided that an action cannot be maintained for a deceit practised in the exchange of horses on Sunday, and in Pattee v. Greely, 13 Met. 284, it was held, that a bond made on Sunday was void. See also Allen v. Deming, 14 N. H. 133. So, also, as the Revised Statutes of Massachusetts provide that " no person shall travel on the Lord's day, except from necessity or charity," under penalty of ten dollars for every offence, it was held, in Bosworth v. Swansey, 10 Met. 363, that a person travelling on Sunday, neither from necessity nor charity, cannot maintain an action against a town for an injury received by him, by reason of a defect in a highway, which the town is by law obliged to repair. These cases harmonize the ilassachusetts decisions with those in the other States of America and with the English decisions. ' Pope V. Linn, 50 Me. 83; Tilloek v. Webb, 56 Me. 100; Sayre v. Wheeler, 31 Iowa, 112 ; Day v. McAllister, 15 Gray, 433. See Cranson v. Goss, 107 Mass. 439 (1871), and cases cited. Quaere, whether an action could be maintained upon the original consideration when legal. See Sayre V. Wheelock, supra. 2 State Capital Bank «. Thompson, 42 N. H. 369 (1861) ; Cranson v. Goss, 107 Mass. 439 (1871). 724 CONTRACTS IN VIOLATION OP A STATUTE. [CHAP. XIX. 80 made.i But it is held, that the mere signing an instrument on Sunday will not make it void, if it is not to take effect until delivery.^ § 754. The statute, it will be observed, only prohibits the exercise of business or work of the ordinary calling of the party. The validity of any contract made on Sunday will, therefore, depend upon whether or not it relates to the ordinary calling of the person making it ; ^ and it becomes necessary to consider what is intended by this phrase. The " ordinary call- ing," then, of a man, is understood to embrace all contracts which peculiarly belong to his profession, business, or trade in which he is engaged, and does not extend to ordinary acts done by him, which do not specially relate thereto, although they be incidental and collateral. Thus, if a livery-stable keeper lets a horse on Sunday, this is void, as being within his ordinary calling^ But the hiring of a laborer by a farmer, though it be incidental to farming, does not peculiarly belong thereto, and has been held not to be within the statute.^ It is perhaps on this ground in part, that a will made on Sunday is held valid, even though the testator was not then in extremis.^ But an agreement made by an attorney on Sunday, binding him per- sonally to the settlement of his client's affairs, has been held ' Nason (1. Dinsmore, 3i Mc. 391. ^ Beitenman's Appeal, 55 Penn. St. 183 (1867). 8 The King v. Whitnash, 7 B. & C. 602 ; s. c. 1 Man. & Kyi. 452 ; Drury v. Defontaine, 1 Taunt. 131 ; Bloxsome v. Williams, 3 B. & C. 233. 4 Wbelilen v. Chappel, 8 R. I. 230 (1865). And if tbe horse or car- riage be injured while so unlawfully let, a promise to pay for it is not bind- ing. Tillock V. Wahh, 56 Me. 100. See Hall v. Corcoran, 107 Mass. 251. ^ The King w. Whitnash, 7 B. & C. 596. In this case,. Mr. Justice Bayley said : " The true construction of the words ' ordinary calling,' seems to me to be, not that without which a trade or business cannot be carried on, but that which the ordinary duties of the calling bring into continued action. Those things which are repeated daily or weekly in the course of trade or business are parts of the ordinary callinij of a man exercising such trade or business, but the hiring of a servant once in the year does not come within the meaning of those words." Sandiman v. Breach, 7 B. & C. 96. « Bennett v. Brooks, 9 Allen, 118 (1864) ; George v. George, 47 N. H. 27 (18G(J), in which the subject is thoroughly examined. And see Weidman V. Marsh, 2 Am. Law Jour. 408 (1850) ; Whart. Dig. Wills, pi. 73. CHAP. XIX.] CONTRACTS IN VIOLATION OF A STATUTE. 725 not to be good.i And a contract to publish an advertisement in a paper issued on Sunday, is void, and compensation cannot be recoTered.2 In all these cases, however, it must be under- stood that the act done must come fairly and reasonably within the terms of the statute forbidding it ; for as the common law did not render contracts void because made on Sunday, the case must be brought directly within the prohibition of the act. Thus, if the statute forbids only " common labor," a single con- tract for the sale of land will not be within its prohibition.^ But money loaned on Sunday cannot be recovered back, where the statute forbids all " secular business " on Sunday.* And it is held that a valid contract cannot be rescinded on the Sabbath.^ A new promise, made on Sunday, has been held sufficient to remove the bar of the statute of limitations ; ® but the decisions are not harmonious on this subject,' being gov- erned perhaps by the different language of the statutes of the several States. § 755. Yet if either party make the contract hand fide, and without knowledge that the other is exercising his ordinary calling in making it, he may avail himself of the contract, because he is not knowingly involved in the illegality ; but the other party cannot enforce the contract, or plead its illegality in defence.^ § 756. But a contract for the sale of goods will not be void under the statute, unless it be made legally complete on' Sun- day.^ If it be a mere bargaining, without a definite agree- 1 Peate v. Dicken, 1 C. M. «& R. 422 ; 8. c. 6 Tyrw. 116. See also Scarfe v. Morgan, 4 M. & W. 270. ' Smith !■. Wilcox, 19 Barb. 581. ' Bloom V. Richards, 2 Ohio St. 888. ' Finn V. Donahue, 35 Conn. 216 (1868). ' Benedict v. Bachelder, 24 Mich. 475 (1871). ' Thomas ». Hunter, 29 Md. 406 (1868). And see Lea v. Hopkins, 7 Barr, 492. ' Bumgardner ». Taylor, 28 Ala. 687 (1856). 8 Smith V. Wilcox, 19 Barb. 581 ; Bloxsome u. Williams, 3 B. & C. 232 ; s. c. 5 Dowl. & Ryl. 82 ; Fennell v. Rldler, 5 B. & C. 406 ; s. c. 8 Dowl. & Ryl. 204 ; Myers v. The State, 1 Conn. 502. ° See Goss v. Whitney, 24 Vt. 187 ; Lovejoy v. Whipple, 18 Vt. 379. If A. on Sunday requests the use of B.'s horse, which B. does not then agree 726 CONTRACTS IN VIOLATION OP A STATUTE. [CHAP. XIX. ment ; or if it do not comply with the requisitions of the statute of frauds, so as to be legally binding, — it will be valid. Thus, where a horse was bought by parol on Sunday, but was not delivered until Monday, it was held to he a valid sale, be- cause the sale was not made binding on Sunday under the statute of frauds. 1 Yet if the contract be virtually settled on Sunday, and all the terms agreed upon, it would be doubtful whether the mere deferring of the signature thereto until Mon- day would render it valid. ^ And a guaranty for the fulfilment of a lease, executed and delivered on a Sunday, is void, although the lease to which it applies be not executed until a following week-day. 3 The authorities also hold that contracts made on the Sabbath cannot be ratified and made binding afterwards,* except perhaps where property delivered on that day is re- tained, and a partial payment or a new promise to pay is made on a week-day.^ § 757. If the contract has been settled and discharged, the law will not aid the parties to repudiate it and get back in statu quo.^ § 768. There has been a distinction lately drawn between cases where a contract violates a statute law designed for the to furnish, but subsequently does furnish, A. cannot refuse to pay a fair value for such service because of what was said on Sunday. Dickinson v. Richmond, 97 Mass. 45. 1 Bloxsome v. Williams, 3 B. & C. 2?r2 ; Lovejoy v. AVhipple, 18 Vt. 379 ; Fennell u. Ridler, 8 Dowl. & Kyi. 20i ; s. o. 5 B. & C. 40G ; WiUiams v. Paul, 6 Bing. 653. ^ Smith V. Sparrow, 4 Bing. 87. ' Merriam v. Stearns, 10 Cush. 257. * Pope V. Linn, 60 Me. 83 (1863) ; Day v. McAllister, 15 Gray, 433 (1860) ; Cranson v. Goss, 107 Mass. 439 (1871), and many cases there cited. 5 Sumner v. Jones, 24 Vt. 317 ; Adams v. Gay, 19 Vt. 358 ; Williams v. Paul, 6 Bing. 653. But see Simpson v. NichoUs, 3 M. & W. 240, 244 ; s. c. 6 M. & W. 702, note ; Tuckerman v. Hinkley, 9 Allen, 454 (1864) ; Kountz V. Price, 40 Miss. 341 (1866). See also Boutelle v. Melendy, 19 N. H. 196; Perkins v. Jones, 25 Ind. 499 (1866) ; Sayre v. Wheeler, 31 Iowa, 112 (1870) ; Sargent v. Butts, 21 Vt. 99. ' Horton v. Buffinton, 105 Mass. 399 (1870) ; Myers v. Meinrath, 101 Mass. 366. CHAP. XIX.] CONTRACTS IN VIOLATION OP A STATUTE. 727 protection of the public, and where it violates a statute law wliich is merely designed for the protection of the revenue. And it has been held, that where there was a mere breach of a revenue regulation, which was protected by a specific penalty, and there was no fraud upon the revenue, and no clause in the statute making the contract illegal, that it was valid, and only subjected the party to the payment of the penalty.^ But this distinction has not found favor, and seems now to be abrogated, and the true rule seems to be, as laid down by Baron Parke, that " notwithstanding some dicta apparently to the contrary, if the contract be rendered illegal, it can make no difference in point of law, whether the statute which has made it so has in view the protection of the revenue, or any other object." ^ § 759. There is another distinction to be observed between cases where the contract is directly in violation of a statute, and cases where it is collaterally connected with some inciden- tal illegality not contemplated in its terms. If the illegality do not form a portion of the contract, but be entirely collateral, and capable of complete separation therefrom, the contract will be binding. But if the illegality be inherent, so that it consti- tutes a portion of the consideration, the contract will be void.^ Thus, where a person sold tobacco, without previously comply- ing with the statute regulations as to obtaining a license, it was held that he could sue the vendee for the price, since the con- tract of sale was wholly independent of and collateral to the illegality.* So, also, where a rectifier of spirits had sold spirits without having previously conformed to the provisions of the excise act, requiring him to send with them a permit stating 1 Johnson v. Hudson, 11 East, 180; Brown v. Duncan, 10 B. & C. 98 ; Hodgson V. Temple, 5 Taunt. 181. " Cope V. Rowlands, 2 M. & W. 157. See also Story, Confl. Laws, § 259, note ; Pellecat v. Angell, 2 C. M. & K. 311 ; D'Allex v. Jones, 2 Jur. (n. s.) 979 ; 37 Eng. Law & Eq. 477 ; Taylor v. Crowland Gas Company, • 26 ib. 460; 10 Exch. 293. 3 Wetherell v. Jones, 3 B. & Ad. 221 ; Pellecat v. Angell, 2 C. M. & R. 311 ; The Queen v. Somerby, 9 Ad. & El. 311 ; Fergusson v. Norman, 5 Bing. ISr. C. 76 ; Forater v. Taylor, 5 B. & Ad. 889 ; Little v. Poole, 9 B. & C. 200. See also Story, Confl. Laws, § 247 to 255. * Johnson v. Hudson, 11 East, 180. 728 CONTRACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. their true strength, — it was held that he could recover the price thereof ; for there was no illegality in the mere contract of sale, but only in the subsequent omission of the vendor to send a proper permit.^ § 760. So, also, if an act in violation of either statute or common law be already committed, and a subsequent agree ment entered into, which, though founded thereupon, consti tuted no part of the original inducement or consideration of the illegal act, such an agreement is valid. ^ If, therefore, goods, which have been smuggled, be sold to a third person, he knowing the fact, yet, unless the sale be in pursuance of an original agreement, entered into before the smuggling, and forming an inducement thereto, the vendee will be liable for 1 Wcthorell v. Jones, 3 B. & Ad. 221. In this case, Lord Tenterden said : " ^Ve are of opinion that the irregularity of the permit, though it arises from the plaintiff's own fault, and is a violation of the law by him, does not deprive him of the right of suing upon a contract which is in itself perfectly legal ; there having been no agreement, express or implied, in that contract, that the law should be violated by such improper delivery. Where a con- tract which a plaintiff seeks to enforce is expressly, or by implication, for- bidden by the statute or common law, no court will lend its assistance to give it effect; and there are numerous cases in the books where an action on the contract has failed, because either the consideration for the promise or the act to be done was illegal, as being against the express provisions of the law, or contrary to justice, morahty, and sound policy. But where the consideration and the matter to be performed are both legal, we are not aware that a plaintiff has ever been precluded from recovering by an in- fringement of the law, not contemplated by the contract, in the performance of something to be done on his part." In Fergusson v. Norman, 5 Biug. N. C. 8f , Tindal, C. J., said : "A distinction may easily be drawn as to those duties imposed on the pawnbroker which are entirely collateral to the indi- vidual contract ; and it would be too much to say, because he had not ob^ervcd the enactment of the statute in such matters, that therefore the contract made by him should be void. Suppose an instance in which his name was required to be put up over the door, and some mistake had been made. A penalty is given for not putting up the name ; but it would not follow that contracts entered into by an individual whose name had been incorrectly spelled, would be therefore void." 2 Armstrong y. Toler, 11 Wheat. 258, 271, 276; The George, TheBoth- nea, and the Janstaff, 1 Wheat. 408 ; The George, 2 Wheat. 278 ; Tenant V. Elliott, 1 Bos. & Pul. 3 ; Farmer v. Russell, 1 Bos. & Pul. 296 ; Cannan V. Bryce, 3 B. & Al. 179 ; Filson v. Himes, 6 Barr. 452. CHAP. XIX.J CONTEACTS IN VIOLATION OF A STATUTE. 729 the price.i So, also, if A. should, during war, contrive an illegal plan for importing goods from the country of the enemy, on his own account, and goods should be sent to B. in the same vessel, and A. should, at the request of B., become surety for the payment of duties on B.'s goods ; or should assume the responsibility of the expenses which might be incurred on account of a prosecution for illegal importation ; or should advance money to B. to enable him to pay those expenses, — A. might maintain an action upon the promise of B. to refund the money : because if the act constituted no part of the orig- inal scheme, the contract would be foimded upon a new and legal consideration, unconnected with the original act, although remotely caused by it. Yet if the importation had been the result of a scheme between the plaintiff and defendant, a bond given to repay any advances, made in pursuance of such an agreement, would be void.^ Indeed, wherever the original illegal contract is so involved in the contract on which the action is brought, that the two cannot be separated, — and whenever they seem to be but a continuation of the same agree- ment, — no action can be supported on either. But if the subsequent agreement be totally disconnected from the original, it may be enforced.^ This distinction will be found to form the principle which lies at the root of many apparently con- tradictory cases, and to offer the best solution to tlie various and opposing decisions. § 761. There seems also to be a distinction between cases where the statute is merely directory in its terms, and the terms which are not complied with are only collaterally con- nected with the contract, and cases where the statute is directly prohibitory, and its requisitions are conditions precedent, di- rectly affecting the contract. And, in the former case, it would 1 Armstrong v. Toler, 11 Wheat. 271, 276. 2 Armstrong u. Toler, 11 Wheat. 258. » Tenant v. Elliott, 1 Bos. & Pul. 3 ; Farmer v. Russell, 1 Bos. & Pul. 296 ; Simpson v. Bloss, 7 Taunt. 246 ; Petrie v. Hannay, 3 T. R. 418 ; Aubert v. Maze, 2 Bos. & Pul. 371 ; Gas Light Co. v. Turner, 5 Bing. N. C. 666; s. c. in error, 6 Bing. N. C. 324; Story on Sales, § 608. See also Phalen v. Clark, 19 Conn. 421 ; Fisher v. Bridges, 3 El. & B. 642 ; 26 Eng. Law & Eq. 210. 730 CONTRACTS IN VIOLATION OP A STATUTE. [CHAP, SIX. seem, that the contract was merely Yoidable, and not void.^ Thus, although an assignment of a patent, or a deed, is re- quired by statute to be recorded, yet as this requisition is merely directory, and for the purpose of giving notice to bond fide purchasers for a valuable consideration, it does not render the assignment void.^ § 762. Again, wherever goods are sold, or money lent, for the express purpose of enabling a party to violate either the statute or the common law, an action cannot be maintained on the sale or loan,^ even though, it is held, the illegal purpose be not carried out.* Thus, where a person sold goods, in order that they might be exported to a place, exportation to which was forbidden by statute,- and a bond was given for the price, it was held, that the vendor could not recover in an action on the bond.^ So, also, where a vendor knowingly sold certain drugs to a brewer, to be used in his brewery, contrary to the provisions of a certain statute, it was held, that he could not recover the price, although it did not appear that the drugs were actually used in the brewery. ^ The same rule also ap- plies to spirituous liquors sold contrary to law ; ^ to money lent 1 Fergvisson v. Norman, 5 Bing. N. C. 84 ; Cope v. Rowlands, 2 M. & W. U9; Little v. Poole, 9 B. & C. 192; Warren v. Manuf. Ins. Co., 13 Pick. 518 ; Ward v. Wood, 13 Mass. 539 ; the Brig Draco, 2 Sumner, 157 ; Brooks u. Byam, 2 Story, 512 ; Johnson v. Hudson, 11 East, 180. ^ Brooks V. Byam, 2 Story, 542. ' See White v. Buss, 3 Cush. 448; Ex parte Bell, 1 M. & S. 751 ; Light- foot V. Tenant, 1 Bos. & Pul. 551 ; Langton v. Hughes, 1 M. & S. 596, 597 ; Story, Confl. Laws, § 246, &c. ; Craig v. The State of Missouri, 4 Peters, 410; Spurgeon v. McElwain, 6 Oliio, 444. But see Ex parte Bulmer, 13 Ves. 313 ; an T. R. 599 ; Bernard w. Reed, 1 Esp. 91 ; Biggs V. Lawrence, 3 T. R. 154; Chigas v. Penaluna, 4 T. R. 466; Pellecat v. Angell, 2 C. M. & R. 311 ; Catlin v. Bell, 4 Camp. 183 ; Brown on Sales, § 187, 188. " WaymeU v. Reed, 5 T. R. 590 ; Bernard v. Reed, 1 Esp. 91 ; Biggs p. Lawrence, 3 T. R. 454 ; Clugas v. Penaluna, 4 T. R. 466. * Clarke v. Shee, 1 Cowp. 197 ; s. c. 2 Doug. 698, n. See Cork Distil- leries Co. V. Great Southern Railway Co., Irish R. 5 C. L. 177 (1871). ' Holman v. Johnson, 1 Cowp. 341; Pellecat v. Angell, 2 C. M. & R. 311; s. c. 1 Gale, 187; Brown on Sales, § 182. The same rule obtains in the law of Scotland. Walker v. Falconer, Mor. Diet. 9543 (1757) ; More V. Steven, ib. 9545 (1765) ; Cullen v. Philp, ib. 9564 (1793). CHAP. XIX.] CONTRACTS IN VIOLATION OP A STATUTE. 783 make out false invoices of goods, to enable the vendee to im- port them ; or should, after receiving a bill of exchange for the price, state the goods in the invoice at a lower and false price, to enable the vendee to avoid paying the legal duty, — in both cases he could not recover.^ § 765. We have already seen that wherever there are two considerations to a promise, if cither of them be unlawful, the promise is void, but if one of them 'be only void, the other will support a promise.^ But where the contract is to do two or more acts for a sufficient and legal consideration, and one of them is void, and capable of separation from the other acts, the contract is binding in relation to tlie lawful acts, and void as to the remainder. The reason of this distinction is, that, inasmuch as the entire consideration forms the basis of every portion of the promise, — in the one case, if a part of the con- sideration be illegal, it vitiates the whole ; while, if a part be merely void, it has no legal effect, being mere surplusage. Where, therefore, the contract is severable, and there are dif- ferent acts to be done, some of whicli are void, and others bind- ing, tlie agreement may be treated as if it were composed of several distinct contracts, with the same consideration, and en- forced as far as it is lawful, and rejected as to the residue.^ ' Pellecat v. Angell, 2 C. M. & R. 311 ; s. c. 1 Gale, 187 ; 5 Tyrw. 94:5. Professor Bell, in his Treatise on the Contract of Sale, p. 22, 23, says : " The result of all the cases on this subject [smuggling] seems to be, (1.) That no contract for importing or exporting goods in order to defeat the revenue laws can be enforced, whether the person so acting be a native or a foreigner. (2.) That the mere sale by a merchant abroad, whether a native of this country or a foreigner, of goods which the buyer afterwards smuggles into this country, is not illegal, nor is an action denied upon the contract to the seller. (3.) That every one participant in the attempt to evade the revenue laws, by furnishing the means of facilitating the intention to smuggle, is to be held a party to the illegal contract, and action is denied to him. (4.) That, in the balancing of evidence, the circumstance of the seller being a native, gives a. bias against him. (5.) That, on a sale of goods prohibited to be imported, or known to be smuggled, action will not be sustained for the price on the one hand, or for the delivery of the goods on the other. (6.) That the purchasing, bond fide, of goods not prohibited, but which have been smuggled, is effectual." ' Deering v. Chapman, 22 Me. 488. ' Ley, 79 ; Mayfield v. Wadsley, 3 B. & C. 361 ; s. c. 6 Dowl. & Kyi. 228 , 734 CONTEACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. Thus, if the condition of a bond consist of several distinct parts, some of which are void, and some good, it is void only for the insufficient part, and good for the rest. So, also, if a bond be given for the performance of covenants contained in a sepa- rate instrument, some of which are lawful, and others unlawful, the same rule prevails.^ This doctrine is equally applicable to contracts not under seal. Where, however, the binding part of a promise cannot be separated from the void part, as would be the case if the contract were an entirety, the whole is void.^ If, therefore, any part of the entire consideration for a promise, or any part of the promise itself, incapable of separation from the rest, be void, the whole agreement is void.^ If part of a contract is illegal, no separation of the good from the illegal will be attempted, if the party seeking to enforce the contract is a wrong-doer.* § 766. This doctrine has always been admitted in cases where a part of the promise is void by the common law ; but where a part of the promise is rendered void by the provisions of a statute, the whole contract was formerly held to be void. The dictum on which this rule was founded, and which has been so often repeated in the books, is ascribed to Lord Ho- bart, and is as follows : " The statute is like a tyrant ; where he comes, he makes all void. But the common law is like a nursing father ; it makes only void that part where the fault is, and preserves the rest." ^ This, however, so far from being Kerrison v. Cole, 8 East, 236 ; Collins v. Blantem, 2 Wils. 351 ; Mouys v. Leake, 8 T. R. 411 ; Van Dyck v. Van Beuren, 1 Johns. 362 ; Green v. Price, 13 M. & W. 695 ; Frazier v. Thompson, 2 Watts & Serg. 235. ' Chamberlain v. Goldsmith, 2 Browul. 281 ; Norton v. Syms, Moore, 856 ; Kerrison v. Cole, 8 East, 236 ; Mayfield v. Wadsley, 3 B. & C. 361. ' Frazier v. Thompson, 2 Watts & Serg. 235 ; Woodrulf v. Hinman, 11 Vt. 592. ' Featherston v. Hutcliinson, Cro. Eliz. 199. ' Saratoga Co. Bank v. King, 44 N. Y. 87 (1870) , explaining and dis- tinguishing Leavitt v. Palmer, 8 N. Y. 19 ; Curtis v. Leavitt, 15 N. Y. 14; Tracy v. Talmage, 14 N. Y. 188. A promissory note given for an account, part of which is illegal, is held to be wholly void. Widoe u. Webb, 20 Ohio St. 431 (1870), overruling any thing to tbe contrary in Doty v. Knox County Bank, 16 Ohio St. 133. ' Lord Hobart, in Norton v. Simmes, Hobart, 14 ; Plowd. 68 : 1 Brownl. CHAP. XIX.] CONTRACTS IN VIOLATION OF A STATUTE. 785 a general dictum, applying to all agreements in contravention of any statute, was apparently limited to the statute of 23 Henry VI., then under consideration, which prescribes the form of obligation that an officer shall take from the person arrested, and expressly makes " any obligation, in other form, void." § 767. The modern cases, however, have abrogated this par- ticular distinction between contracts which are void by the com- mon law, and those which are rendered void by statute regula- tions ; and the same rule is held to be applicable to both cases, namely, that wherever the contract is to perform binding and void acts, and they can be separated, it will be valid in respect to such acts as are not void, whether the other part be void by statute, or at the common law ; provided, however, that if it be contrary to a statute, the whole of a contract be not rendered void by the express or implied provisions of the statute ;^ as in the case of 23 Heury VI., in relation to bonds illegally taken by the sheriff. Thus, where a conveyance of an advowson, including the next pi-esentation, was made for an entire sum, it was held to be good in respect to the advowson, and void as to the next presentation, for simony, which is pro- hibited by statute.^ So, also, there are several analogous cases, where certain provisions in a deed were in \'iolation of the property tax act of 46 George III., and the mortmain act of 9 George II. ch. 36.3 § 768. This rule applies to cases where part of an agreement is void by the statute of frauds. If the part of the contract 64 ; Moore, 856 ; Maleverer v. Redshaw, 1 Mod. 35. See also Shep. Touch. 374. ' Mouys ». Leake, 8 T. R. 411 ; Kerrison v. Cole, 8 East, 231 ; Doe v. Pitcher, 6 Taunt. 359 ; Greenwood v. Bishop of London, 5 Taunt. 727 ; Newman ». Newman, 4 M. & S. 66 ; Wigg v. Shuttleworth, 13 East, 87 ; Gaskell V. King, 11 East, 165 ; Howe v. Synge, 15 East, 440 ; Tinckler v. Prentice, 4 Taunt. 549 ; Fuller v. Abbott, 4 Taunt. 105 ; Eeadshaw v. Rai- ders, 4 Taunt. 57 ; Bac. Abr. Covenant, G. ; Officers, F. ; Ellis on Debtor and Creditor, 377, note o. ^ Greenwood v. Bishop of London, 5 Taunt. 727 ; Newman v. Newman, 4M. &S. 66. ' Wigg V. Shuttleworth, 13 East, 87; Gaskell ». King, 11 East, 165; Howe V. Synge, 15 East, 440 ; Tinckler v. Prentice, 4 Taunt. 549 j Fuller V. Abbott, 4 Taunt. 105 ; Eeadshaw v. Raiders, 4 Taunt. 57. 736 CONTRACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. which is rendered void by the statute be so connected with the part which is valid that the two cannot be separated, the whole is void. If they can be separated, the contract is valid, pro tanto} Thus, where a woman, upon the death of her husband, in consideration of being allowed to continue in the occupation of premises leased to him, promised, orally, to pay the rent which was already due, and, also, the rent which should sub- sequently accrue during the term of her occupation, it was held, that the agreement was entire, and that, as the promise as to one part was void by the statute of frauds, it could not stand good for the other.^ But where there was a verbal contract to sell a certain farm and dead stock, and growing wheat, at separate prices, it was held, that the contracts were distinct, and although the agreement as to the land was void, by the statute of frauds, because it was oral, yet the agreement as to the wheat and dead stock was binding.^ § 769. We have already seen that when a contract is made to do an act prohibited by statute, no action can be maintained to enforce performance, or to obtain damages for a breach thereof. Nor if the claim be really founded on the contract, will an action on the case for damages be supported.^ But where a prohibited contract is made for the hire, use, or con- veyance of property, or for services of any kind relating there- to, and the property is accordingly surrendered by the owner, although he could bring no action on the contract to recover the price, yet if the bailee wrongfully use or appropriate the property, and transcending his rights and powers under the contract, destroy or injure it, it seems that he would be liable ' Lexington v. Clarke, 2 Vent. 223 ; Cooke v. Tombs, 2 Anst. 420. See Koberts on Frauds, 111, note 53 ; Lea v. Barber, 2 Anst. ■425, note ; Cbater V. Beckett, 7 T. R. 201 ; Thomas v. Williams, 10 B. & C. 66-1. See also Crawford v. Morrell, 8 Johns. 253 ; and Mayfield v. Wadsley, 3 B. & C. 361 ; s. c. 5 Dowl. & Rvl. 22S ; Wood u. Benson, 2 Cr. & J. 94. " Lexington v. Clarke, 2 Vent. 223. ' Mayfield v. Wadsley, 3 B. & C. 361 ; s. c. 5 Dowl. & Ryl. 228. See also Wood V. Benson, 2 Cr. & J. 94. * Gregg V. Wyman, 4 Gush. 322 ; Simpson t). Bloss, 7 Taunt. 246 ; Fivaz V. Nieholls, 2 C. B. 501 ; Phalen v. Clark, 19 Conn. 421 ; Jennings I). RundaU, 8 T. R. 335 ; Fitts v. Hall, 9 N. H. 441 ; Woodman v. Hub- bard, 5 Fost. 67. CHAP. XIX.] CONTRACTS IN VIOLATION OF A STATUTE. 737 in an action on the case for damages. But in such a case the injury should be susceptible of complete separation from the contract, for if the claim grow out of the contract it will not be good.i Thils if a carrier of the mail should, contrary to the law of the United States, undertake to carry and deliver a packet of bank-notes to the person to whom it is addressed, no action could be maintained for the non-carriage according to the contract ; but if the carrier should refuse to redeliver the packet to the owner, he would be liable therefor in an action of trover.2 But although the rule is well settled, that where the plaintiff cannot support his demand without relying on an unlawful agreement, he cannot recover,^ yet it is sometimes very difficult of application, and in several cases which have occurred in this country, it has been differently applied to similar facts. The question in these cases was whether, if a ' Lewis V. Littlefield, 16 Me. 233 ; Phalen v. Clark, 19 Conn. 421 ; Gregg V. Wyman, 4 Cush. 322 ; Dwight v. Brewster, 1 Pick. 51 ; Frost v. Hull, 4 N. H. 153. f Dwight V. Brewster, 1 Pick. 51. Parker, C. J., said in this case: " The principal ground of defence to the action was, that by the law of the United States, it was made unlawful for a carrier of the mail to take any letter or packet, and deliver it to the person to whom it was sent, and that such mail carrier was made liable to a penalty for so doing ; that if it was unlawful to carry, it must be unlawful to send, and that no action could be maintained for the non-performance of an undertaking that constituted an offence. That no action will lie for damages for not performing an unlawful contract, has been settled by this court in several actions heretofore. The cases of Springfield Bank v. Merrick, 14 Mass. 322 ; Russell v. De Grand, 15 Mass. 35, and Wheeler v. Kussell, 17 Mass. 258, establish this principle, and the English cases are full to this point. The principle settled is, that a party to an unlawful contract shall not receive the aid of the law to enforce that contract, or to compensate him for the breach of it. It is not easy, however, to discern how a party to such contract, who becomes possessed of the property of the other party, with which he is to do something which the law prohibits, can acquire a right to that property. The contract being void, the property is not changed, if it remains in the hands of him to whom it is committed. If he has executed the contract with it, or it has become forfeited by judicial process, or if stolen or lost without his fault, he may defend himself against any demand of the owner in ordinary cases : but if he has it in his possession, he must be liable for the value of it ; so that in an action of trover, with proper evidence of a conversion, the plaintiff would undoubtedly prevail." ' Phalen v. Clark, 19 Conn. 421. VOL. I. 47 738 CONTRACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. person in violation of the statute let his horse on Sunday, to be driven to one place, and the hirer drove him beyond that plac to another, so as to injure or kill the horse, the owner could maintain trover for the conversion of the animal. The Supreme Court of Massachusetts, in a well-known case,^ formerly held that trover was not maintainable, on the ground that the claim of the plaintiff, although in form for a tort, was in sub- stance to recover damages for a breach of contract ; and also because the plaintiff could not prove his case, without showing the illegal contract by which the defendant obtained possession of the horse, so that the conversion of the horse was merely a breach of the contract not to drive him beyond a partic- ular place.^ On the other hand, the Superior Court of New Hampshire,^ in an able and carefully reasoned judgment, held ' Gregg V. Wyman, 4 Cush. 322. = So Wheldon v. Chappel, 8 R. I. 230. ' Woodman v. Hubbard, 5 Fost. 67. Perley, J., said: " If the owner places his property in the hands of another, to be used temporarily for au unlawful purpose, or in any unlawful way, though the contract which he makes respecting the illegal use is void, he does not forfeit his property in the thing which he has thus delivered to another on an illegal contract. Where the property is intrusted to another to be wholly devoted and appro- priated to an illegal purpose, perhaps the law is different ; as in the case where goods are shipped to be carried to the public enemy. . . . The property in the horse remained, therefore, in the plaintiff; and it would seem to follow as a necessary conclusion that for a direct, substantial inva- sion of that right, he might maintain the proper action against the defendant or a third person. In such an action he would not claim by or through the illegal contract, but would claim, as the general owner of the horse, for an injury done to his right of property, which was antecedent to the contract, and not derived from it, nor defeated by it. " The action of trover is founded upon property in the plaintiff, and a conversion by the defendant. A conversion consists in an illegal control of the thing converted, inconsistent with the plaintiif 's right of property. If one hire a horse to be driven to one place, and voluntarily drive him to another, it is a conversion, and trover will lie. Wheelock v. Wheelwright, 5 Mass. 104. " This is in accordance with the law in other cases, where the bailee for one purpose diverts the thing bailed to another ; as where a carrier uses, or sells, or delivers to the wrong party, the commodity which ho received to transport. The circumstance that the property is in the hands of the bailee, with the license of the owner to use it for one purpose, gives no right to use it for another ; and the invasion of the owner's right of property is as com- plete, when the bailee goes beyond his license and duty, as if the control CHAP. XIS.J CONTRACTS IN VIOLATION OP A STATUTE. 739 that the owner could maintain trover for the conversion, on the ground that the driving of the horse beyond the agreed place over the property were usurped without any bailment. There can be no doubt, on the authorities, that trover would be a proper remedy in this case, if the illegality of the contract on which the defendant took the horse into his possession, had not been set up as a defence. " If, however, though there has been in this case a technical legal conver- sion, the real and substantial claim of the plaintiff is merely to recover damages for the breach of an illegal contract ; if he must, notwithstandino- the form of his action, claim in fact by and through his contract, he cannot evade the consequences of his illegal act by adopting a fictitious action, allowed in ordinary cases for the purposes of the remedy. In some cases the plaintiff, for convenience of his remedy, when his claim arises under a contract, is allowed to allege his gravamen in a criminal neglect of duty in the manner of performing, or in neglecting to perform, the contract. Govett V. Radnidge, 3 East, 62. But in such case, by varying the form of the remedy, the plaintiff cannot deprive his adversary of any defence, such as infancy, which he might have set up, if the claim had been made for a breach of the contract. Jennings v. Eundall, 8 T. R. 335 ; Green v. Green- bank, 2 Marshall, 485 ; Fitts v. Hall, 9 N. H. 441. " "The question, then, becomes material whether the only real injury which the plaintiff suffered was by a breach of the contract ; or whether the driving of the horse to another place was a substantial invasion of the plain- tiff's right of property. " When the defendant voluntarily drove the horse beyond the limits for which he was hired, he acted wholly ivithout right. He then took the horse into his own control, without any authority or license from the owner. The conversion was in law as complete, the wrongful invasion of the plaintiff's right of property was as absolute as if, instead of driving the horse a few miles beyond the place for which he had hired him, he had detained and used him for a year, or any other indefinite time, or had driven him to mar- ket and sold him. If taking the wrongful control of the horse, and driving him ten miles, was not a substantial conversion, how far must the defendant have driven him ? how long must he have detained him ? and what other and further wrongful acts was it necessary that he should do, in order to make himself a substantial and real wrong-doer ? It would seem to be quite clear that if the original act, assuming control over the horse, was not a substantial invasion of the plaintiff's right of property, no subsequent use or abuse of the horse by the defendant could make it so ; and that if the defendant cannot on the facts of this case be charged for the conversion of the horse, he could not have been if he had sold or wilfully destroyed him. In other words, the plaintiff having delivered the horse into the defendant's hands on a contract that was illegal, but which nevertheless left the general property in the plaintiff, the defendant may do what he will with the horse, and the plaintiff can have no remedy, because whatever he does can be no 740 CONTRACTS IN VIOLATION OP A STATUTE. [CHAP. XIX. was a wrongful invasion of the plaintiff's right of property, having nothing to do with the contract, and that if the mere more than a breach of his unlawful contract to return the horse. This does not appear to be a reasonable conclusion. The cases are not entirely unan- imous as to what acts of a bailee, who receives goods on a void or voidable contract, are sufficient to make him liable for a tortious conversion. The question has arisen most frequently where infancy has been set up as a defence. Vasse v. Smith, 6 Cranch, 231 ; Campbell v. Stakes, 2 Wend. 137; MiUs v. Graham, 4 Bos. & Pul. 140; Homer v. Thwing, 3 Pick. 492, are strong authorities to the point that an infant who receives goods on a contract, and disposes of the property without right, is liable in trover ; and these cases are cited and approved by the learned Chief Justice in Fitts v. Hall, 9 N. H. 44.3. Wilt v. Welsh, 6 Watts, 9, and perhaps Jennings v. Rundall, 8 T. R. 336, must be regarded as somewhat in conflict with these cases. Jennings v. Rundall, however, is criticised and doubted in Fitts ». Hall. Homer v. Thwing, 3 Pick. 402, maintains the position th.at in a case like this, driving the horse beyond the place for which he was hired, is a substantial conversion and a direct injury to the plaintiff's right of property, and not in substance a mere breach of the defendant's contract. In that case it was held that infancy was no defence to trover for such a conversion of a horse. If the action had been substantially upon the infant's voidable contract, he could not h.ave been charged. We think the weight of authority and of argimient are very decidedly in favor of the rule declared in Homer V. Thwing. " From these premises the conclusion would seem to follow that trover may be maintained on the facts of tins case. If the plaintiff made an illegal contract respecting the horse, that contract is void ; but the illegal contract being for a temporaiy use of the horse, the consequences do not extend to a forfeiture of the plaintiff's general I'ii^ht of property ; and for a wrongful invasion of that right he may maintain trnver a;;ainst the defendant, the bailee, or a third person. This is tlie doctrine of Dwight v. Brewster, 1 Pick. 51. In that case the contract was not only void but illegal. " Driving the horse beyond the place for which he was hired is a wrongful invasion of the plaintiff's right of property, and a substantial convei-sion. In tro\er for such a conversion, the plaintiff's claim is neither in form nor in substance by, through, or under the illegal contract, and the invalidity and illegality of the contract arc no defence to the suit. The contract is no link in the chain of the plaintiff's case; he shows the contract, which was invalid and illegal ; but notwithstanding the contract, and in spite of it, his right of property remained. That right has been directly invaded by the defendant's wrongful act, and this action is the appropriate remedy. . . . " One case of high authority we are obliged to regard as in conflict with the conclusion to which we have arrived, and tliat is the recent case of Gregg V. Wyman, 4 Cush. 322, in the Supreme Court of IMassarhusetls. The able and elaborate judgment in that case, and the great respect due to all the CHAP. 2IX.] CONTRACTS IN VIOLATION OF A STATUTE, 741 fact that the plaintiff must show possession to have been ob- tained through an illegal contract, was sufficient to prevent him decisions of that court, have caused the principal hesitation which we have felt in holding that the present action could be maintained. " We understand the decision in Gregg v. Wyman, to be put, in the first place, upon the ground that the claim of the plaintiff, though in form for a tort, was in substance to recover damages for the breach of the illegal contract. This position does not appear to be very confidently maintained, and would seem to be entirely inconsistent with the case of Homer v. Thwing, 8 Pick. 492, decided in the same court. If the cases are to be regarded as in coniict, we prefer the rule of Homer v. Thwing. '" The other ground is that the plaintiff could not prove his case without showing the illegal contract by which the horse went into the defendant's hands ; that he could not show the conversion of the horse by driving beyond the place for which he was hired, without showing the terms of the illegal contract ; and, therefore, as he was obliged to show his own illegal act in making out his case, he cannot recover. " Granting that in order to show the wrongful act of the defendant, upon which he relied, the plaintiff was obliged to prove that he had made an illegal and void contract, and violated the law, the question still recurs and remains, whether the consequences of his illegal act affect his right of prop- erty in the horse, and whether the defendant's act was a direct injury to that right, or only in substance a breach of the illegal contract. The general property remained in the plaintiff. That does not seem to be anywhere denied, and is the express doctrine of Dwight v. Brewster, and is necessarily involved in Phalen v. Clark, and Lewis v. Littlefield. It would not seem to follow as a legal or a logical consequence that because the plaintiff had made an illegal contract respecting the horse, which still left the property in him, that though the illegal contract necessarily appeared in the plaintiff's proof of a direct and substantive injury to his property, no recovery could be had. The illegal contract appears in the case ; the plaintiff has violated the law, and the contract is void. What then? The plaintiff's property in the horse still remains. Was the act of the defendant within the limits and scope of the contract, and a mere breach of it? If so, he is not liable. But if the act was not covered by the contract, and done within it and under it, but was a direct, voluntary wrong to the plaintiff's right of property, he may recover. The reasoning of the court in Gregg v. Wyman is quite conclusive to show that the plaintiff, having absolute power over his own property, and having delivered it to the defendant, the plaintiff can never show that the defendant has done any wrong to his right of property without showino- the contract on which it was delivered. So, if the defendant should refuse to deliver the horse on demand, or should sell him or destroy him, it would in none of these cases appear that any wrong had been done to the plaintiff until he showed the contract, and that the act of the defendant was not under and within it. Whether the horse was delivered on a sale to the 742 CONTRACTS IN VIOLATION OF A STATUTE. [CHAP. XIX. from recovering for a tort beyond the limits and scope of that contract, then the plaintiff by like reasoning could not recover for any violation of his property thus obtained, even should it amount to a sale thereof. And the Supreme Court of Massa- chusetts have, in a very recent case, expressly overruled their former decision ; and it may now be considered settled, that the action in such cases is maintainable.^ § 770. Another class of contracts in violation of, or not in conformity to a statute, are such contracts as require a stamp, in order to their validity. Without discussing at length what instruments do or do not require a stamp, in order to their validity, it has been generally settled that a contract is not absolutely void for want of a stamp, under the United States revenue acts, unless the omission to annex it be fraudulent, or intended as an evasion of the law.^ defendant, or on an agency to sell, would not appear without evidence of the contract. It necessarily follows from this view of the case that a man is wholly without remedy for any injury that may be done to the horse he lets on Sunday, in violation of law, if the necessity of showing his illegal eon- tract will preclude his recovery. Though the property is conceded to remain in the plaintiff, he has no remedy to enforce his right, because he cannot show it without showing the illegal contract of letting. And in aU the numerous cases where horses are illegally let on Sunday, the hirer might with perfect impunity retain or sell them. This appears to us to be pushing the application of a well-settled principle to an unnecessary and extravagant length, not required nor warranted by the general current of the authorities. "^Ve are of opinion that the instructions of the court were correct, and that there must be judgment on the verdict." ' Hall V. Corcoran, 107 Mass. 251 (1872) ; State v. Pike, 49 N. H. S99 (1870) ; IMorton v. Gloster, 46 Me. 520 (1859). See Cotton v. Sharpstein, 14 Wis. 226 (1861). As to the right of action against a common carrier for injury to persons or property in transportation under contracts of carriage made on Sunday, see Carroll v. Staten Island R. Co., 65 Barb. 32 (1873) ; Merritt v. Earle, 29 N. Y. 120 ; Mahoney v. Cook, 26 Penn. St. 342 ; Phila- delphia, W. & -B. R. Co. 0. Philadelphia Steamb. Co., 23 How. 209, 218; Smith V. Wilcox, 24 N. Y. 353. " It is not material whether the contract made was good or bad ; it was enough to entitle the plaintiff to recover that the defendant, being a common carrier, had in his custody for transportation the plaintiff's property, and by his negligence, or in violation of his duty, it was lost." Wright, J., in Merritt «. Earle, supra. ^ See Tobey v. Chipman, 13 Allen, 123 ; Ilolyoke Machine Co. v. Frank- lin Paper Co., 97 Mass. 150 ; Desmond v. Norris, 10 Allen, 250. CHAP. XX.J CONSTRUCTION OP CONTRACTS. T43 CHAPTER XX. CONSTRUCTION OP CONTRACTS. § 771. Inasmuch as every contract derives its force from the mutual assent of the parties thereto, to certain terms, it be- comes necessary, not only to interpret those terms, in order to ascertain the intention of the parties in entering into the agreement, but also so to construe them as to give a legal operation to such intention. The collection of such intention, by inferences from stated terms, or from actual circumstances, or both, is the office of interpretation. The adjustment of such intention to paramount law is the office of construction.^ § 772. Language is not only imperfect, and susceptible of various interpretations, but is also so liable to the careless misuse or ignorant misapplication of terms, that some rules of interpretation and construction seem to be absolutely neces- sary, in order to render agreements either intelligible or conso- nant with the intentions of the parties. An agreement to do a single definite act, upon a certain consideration, is simple, and easily interpreted. But where a general object is to be -attained by means of a multitude of different stipulations dependent upon future contingencies, it must evidently be mat- ter of great difficulty, and indeed, almost of impossibility, to anticipate all events and circumstances materially affecting the contract. In such cases, the contract in itself, however well drawn, if unexplained by inferences drawn from attendant circumstances, or from the general tenor of the instrument, would often be unintelligible or inoperative. The object, there- fore, .of interpretation and construction, is so to expound the contract as to render it legal and valid, as well as operative in ' See Lieber's Legal Hermeneutios. 74'1 CONSTRUCTION OP CONTRACTS. [CHAP. XX. effecting the purpose and object which it was designed to accomplish. § 773. The general rules of interpretation and construction are the same both in law and in equity ; ^ and are equally ap- plicable to specialties and simple contracts.^ Courts of equity have, however, assumed larger powers than courts of law, in the application of these rules, by which they are enabled to reach cases, which, however equitable, could not be enforced in a court of law. Wherever, therefore, a precise and strict con- formity to the grammatical meaning of the terms of a contract would be impossible, they will be so modified as to render them as nearly coincident as possible with the actual and evident in- tent of the parties. Thus, a strict compliance with the terms of a contract is' generally necessary to entitle either party to enforce it against the other at law ; but if the non-compliance do not affect the essence of the contract ; as if the contract be broken in respect of time or mode of its performance, when neither time nor mode of performance were essential considerations, a court of equity will grant relief, if the circumstances under which relief is claimed be equitable.^ § 774. The first rule of exposition, which originates and governs every other rule, is, that the contract shall be so inter- preted as to give effect to the intention of the parties, as far as it is legal, and mutually understood.* Verba intentioni, non ' 3 Black. Coram. 431 ; Doe v. Laming, 2 Burr. 1108 ; 1 Fonbl. Eq. 6th ed. 149, note h ; Eaton v. Lyon, 3 Ves. 692 ; Ball v. Stone, 1 Sim. & Stu. 210. ' Seddon v. Senate, 13 East, 74, per Ld. EUenborough ; Hewet v. Painter, 1 Bulst. 174, 175 ; Kane v. Hood, 13 Pick. 281 ; Robertson v. French, 4 East, 130. ^ 2 Story, Eq. Jur. § 736, 747, 771, 776, 777, 779; Hipwell v. Knight, 1 Younge & Coll. 415 ; Doloret v. Rothschild, 1 Sim. & Stu. 690. See White V. Mann, 26 Me. 361. * Courts, in the construction of contracts, look to the language employed, the subject-matter, and the surrounding circumstances ; and may avail them- selves of the same light which the parties enjoyed whea the contract was ex- ecuted. They are, accordingly, entitled to place themselves in the same situation as the parties who made the contract, in order that they may view the circumstances as those parties viewed them, and so judge of the meaning of the words, and of the correct application of the language to the diings de- ecrlbed. Nash v. Towne, 6 Wall. 689 (1866). CHAP. XX.J CONSTRUCTION OP CONTRACTS. 745 e contra,, dehent inservire. In the construction of a contract, reference must be had to the intention of the parties, as ascer- tained from their situation, and the whole scope of the con- tract.i Whenever such intent can be- distinctly ascertained from the language used,^ it -will prevail, not only in cases where it is not fully and clearly expressed, but also even where it contradicts particular terms of the agreement. The object of the law, in laying down rules of exposition, is to discover the meaning of the parties, and not to impose it, and the expression is, therefore, wholly subservient to the manifest intention.^ Although, therefore, descriptive words be used in a written instrument, which are, when taken with reference to the existing facts, repugnant or incon- sistent with each other, yet, if the intent of the parties be clearly manifested thereby, the misdescription will not vitiate the instrument.* Thus, where the condition of a bond of £2000 was to "render a fair, just, and perfect account, in writing, of all sums received ; " it was held to be broken by a neglect on the part of the obligor to pay over such sums ; for Lord Mansfield said, it was clearly the intention of the parties that the money should be paid; and Buller, J., added, that it could not be meant, that so large a penalty should be taken merely to enforce the making out of a paper of items and figures.® So, where the owners of several parcels of land, 1 Ricker v. Fairbanks, 40 Me. 43 (1855). " See Cooke v. Barr, 39 Conn. 296 (1872). ' Throckmerton v. Tracy, Plowd. 160 ; Shep. Touch. 86 ; Simond v. Boy- dell, 1 Doug. 271 ; Aguilar v. Rodgers, 7 T. 'R. 423 ; Bache v. Proctor, ] Doug. 382 ; Dormer v. Knight, 1 Taunt. 417 ; Doe v. Worsley, 1 Camp. 2(J; Doe v. Laming, 4 Camp. 77 ; Tombs v. Painter, 13 East, 1 ; Quacken- boss «. Lansing, 6 Johns. 49. Lord Chief Justice Hobart, in Clanrickard v, Sidney, Hobart, 277, said : " I do exceedingly commend the judges, that are curious and almost subtile, astuti (which is the word used in the Proverbs of Solomon in a good sense, when it is to a good end), to invent reasons and means to make acts according to the just intent of the parties, and to avoid wrong and injury, which by rigid rules might be wrought out of the act." This language is approved by Lord Hale in Crossing v. Scudamore, 1 Vent, 141 ; and by Chief Justice Willes in Doe v. Salkeld, Willes, 676, and Park hurst e. Smith, Willes, 332. See Thompson ». McKay, 41 Cal. 221 (1871). * Cleaveland v. Smith, 2 Story, 287. " Bache v. Proctor, 1 Doug. 382. 746 CONSTRUCTION OP CONTRACTS. [CHAP. XX. through which there was a private way, having a gate across it, entered into covenants, by indenture, for widening the way, and the following memorandum was subjoined to the indenture : " The gate above mentioned is to be kept up, except by the consent of the parties ; " it was holden, that the intent of the parties was, that the gate should be upheld, until, by agree- ment, it should be taken down ; and then, that it was to remain down for ever.^ So, also, a covenant by a lessee not to exer- cise the trade of a butcher upon the demised premises, was held to be broken by his selling raw meat by retail, although no beasts were slaughtered there ; because it was the manifest intention of the lessor to preclude the exercise of the trade in any form, in order to prevent a depreciation in the value of the tenement.^ So, also, where a contract was made in London for the sale of tallow, then at sea, in which it was agreed that if it did not arrive at a particular time the contract should be void ; it was held, that the evident understanding was, that it was to arrive at London, and not elsewhere ; and, as it did not arrive there, the contract was void.^ So, a contract to em- ploy a person for a year if he can " fill the place satisfac- torily " gives the employer the right to discharge him before the end of the year, he (the employer) being the sole judge of the propriety of such action.* § 775. This rule does not, of course, apply to those cases where there was a fraudulent intention, or where one party purposely misled the other; for, under such circumstances, to give effect to the real intention, would be to reward dis- honesty. The undertaking of each must be construed in that sense in which he supposed it to be understood by the other. Thus, where a note was made by a debtor, and given by him to his creditor, "for £20, borrowed and received," "which I ' Fowle V. Bigelow, 10 Mass. 379. ' Boe V. Spry, 1 B. & Al. 617. See also Dormer v. Knight, 1 Taunt.. 417 ; Doe v. Keeling, 1 M. & S. 95. ' Idle V. Thornton, 3 Camp. 274. * Tyler v. Ames, 6 Lans. 280 (1872). See also Huggans v. Fryer, 1 Lans. 276 ; Chadwick v. Lamb, 29 Barb. 518 ; Rich w. Milk, 20 lb. 616 ; Hall V. Sampson, 19 How. Pr. 481 ; Farrell v. Hildreth, 38 Barb. 178. CHAP. XX. J CONSTRUCTION OP CONTRACTS. 747 promise never to pay ; " it was held to be properly described as a promissory note, on which the maker was liable.^ § 776. Wlien some of the terms of the agreement contradict the manifest intention, as clearly indicated by the agreement taken as a whole, the intention governs.^ Thus, where the condition of a bond for payment of money was, that the bond should be void if the money was not paid ; it was held to be wholly inconsistent with the nature of the bond itself, and was therefore rejected, leaving the bond in full force as a perfect contract.^ So, also, a note or bill of exchange, made payable to the order of a fictitious person, in whose name it is indorsed, will, in favor of a bond fide holder, without notice of the fraud, be held to be payable to the bearer.* The same rule applies to cases where an evide'nt mistake has been made in an instru- ment.^ Thus, an agreement to convey " the Hawkins lot, containing one hundred acres," was held to convey the whole lot set off to Hawkins, and answering to the general descrip- tion, although it contained one hundred and six acres.® So, also, where a bond was given, conditioned to pay one hundred pounds, by six equal instalments, on certain specified days, " until the full sum of one pound should be paid," the court allowed the word hundred to be inserted after one, in order to effectuate the evident intention of the parties.'^ So, where a cer- tain farm was sufiiciently described in a deed tO identify it, and was referred to as being lot No. 17, whereas it was not lot No. 1 Simpson v. Vaughan, 2 Atk. 32. 2 A construction that will give an unlimited and customary signification to every part of a contract, is to be preferred. Rolker v. The Great West- em Ins. Co., 3 Keyes, 17 (1866). 8 Vernon D. Alsop, T. Kaym. 68; 1 Lev. 77; s. c. 1 Sid. 105; Mills v. Wrio-ht, 1 Freem. 247. See also Finch's Law, 52 ; Stockton v. Turner, 7 J. J. Marsh. 192 ; Gully v. Gully, 1 Hawks, 20 ; Ayres v. Wilson, 1 Doug. 385; Simpson v. Vaughan, 2 Atk. 32. 4 Gibson v. Minet, 1 H. Bl. 590 ; Collis v. Emett, 1 H. Bl. 313 ; Tat- lock V. Harris, 3 T. R. 176 ; Stone v. Freeland, 1 H. Bl. 316, note. 6 Savile, 71, pi. 147. See Weak v. Esoott, 9 Price, 595 ; Crowley v. Swindles, Vaugh. 173 ; Ferguson v. Harwood, 7 Cranch, 414 ; Cleaveland t. Smith, 2 Story, 279. 8 Butterfield v. Cooper, 6 Cow. 481 ; Stebbins v. Eddy, 4 Mason, 414. ' Waugh V. Bussell, 5 Taunt. 707. 748 CONSTRUCTION OF CONTRACTS. [CHAP. ST.' 17, it was held, that such incorrect reference must be rejected, because the lot was sufficiently identified without it, and to give effect thereto would be to invalidate the deed.^ So, also, where a devise is made of a hlack horse, when the testator has only a white one ; or of a freehold estate, when he has only leasehold estates, his will would be interpreted to apply to the white horse, or to the leasehold estates.^ § 777. But in all such cases it should appear, either that there was a plain mistake of parties in writing out the contract, or that the instrument, taken as a whole, contains within itself ample evidence of the intention of the parties, — for the clear terms of a written contract cannot be contradicted by any ex- ternal evidence of a different intention, but only explained thereby. Where, fr6m the language of the contract, there can be no uncertainty as to the true meaning of its terms, it is not competent to give evidence to show that a different meaning was intended.^ It is only where the terms are self-contradic- tory, or doubtful and ambiguous, or contain mistakes, that they are to be warped from their apparent meaning.* The only exception to this rule would seem to be where the terms of the written agreement are so inconsistent with the manifest intention of the parties, as to operate as an entire nullification of the contract, in which case the terms would be construed so as to give effect to the intention. Thus, in a case before cited, where a bill of exchange was made payable to a fictitious person or order, it was held that, inasmuch as the actual terms would ^ Wortliington v. Hylyer, 4 Mass. 205. 2 Door V. Geary, 1 Vee. 255 ; Day v. Trig, 1 P. Wms. 286 ; Wigram on Intorp. of Wills, p. 54, § 67. " Curtiss V. Howell, 39 N. Y. 211 (1868). And wlien tbe meaning of an instrument is clear, the erroneous construction which the parties to it have themselves put upon it, will not control its effect. Railroad Company v. Trimble, 10 Wall. 367 (1.S70). The practical interpretation which parties interested have by their conduct given to a written instrument, in cases of an ancient grant of a large body of land asked for and granted by general description, is always admitted as among the very best tests of the intention of the instrument. Cavazos v. Trevino, 6 Wall. 773 (1867). ' Parkhurst v. Smith, Willes, 332 ; post, ch. xxii. See also note to §781. CHAP. XX.] CONSTRUCTION OP CONTRACTS. 749 reduce the contract to a mere nullity, it should be construed as payable to bearer, it being impossible to conceive that the parties intended to make an utterly illusory and null agree- ment ; and because, if such were the intention of the makers, it was a fraud.^ § 778. Again, the general rule in the interpretation of de- scriptive words used in deeds and grants and contracts is, that courses, distances, admeasurements, and ideal lines, must yield to known and fixed monuments upon the ground itself, referred to in such instrument, whether they be natural or artificial. And this rule obtains upon the clear ground that there is a much greater liability to error in statements of courses and distances which are the result of reckoning or survey, than in describing monuments, which are fixed facts. Thus, where in a grant of land the land was described as " beginning on the north line of the million acres, at a yellow birch-tree, six miles east from the south-east corner," the birch-tree being marked as a monument in the original survey of the land, and it ap- peared that the birch-tree did not, in fact, stand in the north line, as supposed, but was so situated that a gore of land was left between it and the said north line ; it was held that the birch-tree, and not the north line, was to be taken as the boun- dary of the land granted.^ ' Collis V. Emett, 1 H. Bl. 313 ; Gibson v. Minet, 1 H. Bl. 569. ' Cleaveland v. Smith, 2 Story, 279. In this case, Mr. Justice Story- said : " It is with a view to ascertain the intention of the parties to deeds and grants, that courts of law, for the purpose of founding just presumptions of the intention, hai e adopted certain rules of interpretation, not as artificial rules, built upon mere theory, but as the true results of human experience. When, therefore, they have held it to be a general rule, in the interpretation of the descriptive words of deeds and grants, that courses, and distances, and admeasurements, and ideal lines, should yield to known and fixed monuments, natural or artificial, upon the ground itself, they have but adopted the result of the common sense of mankind, because sources of mistake may more easily arise from the former than from the latter ; and it is more likely that men may commit an error in courses, or distances, or admeasurements, or in references to ideal lines, such as those of surveys, than in monuments, and fixed and stationary objects, visible on the very land ; and that in purchases and sales and bounties, the latter, as the best ordinary means of information, as well as of exclusive jiossession, are upper- most in their minds, and regulate their acts and intentions. Hence, a known spring, referred to as the corner of a boundary line, has always been deemed 750 CONSTRUCTION OP CONTRACTS. [CHAP. XX. § 779. When the intent of the parties to a contract is man- ifestly paramount to the manner chosen to affect it, if it can- not operate in the mode intended, it may operate in such mode as will legally effect the intention. The difficulty which this rule is intended to obviate usually occurs in cases where some legal impediment prevents the contract from taking effect ac- cording to the particular mode contemplated by the parties. Thus, where a grant of land, by bargain and sale, was made by a father to a son, " to have and to hold after death of the grantor ; " although it could not operate as a bargain and sale, because a freehold cannot, at common law, be made to commence in futuro, yet it was construed as a covenant of the father to stand seised to his own use during his life, and after his death to the use of his grantee and his heirs ; and by this means the evident intention of the father to give his son a full title, after his own decease, was effected.^ So, also, deeds intended to oper- ate as a lease and release, and which are void in that form, may be construed as a covenant to stand seised to uses, and be thereby rendered operative.^ a more certain reference, in the understanding of the parties, than the ideal line of a survey of the land of another person, supposed to tenninate at the same place. If they differ in point of location, the uniform rule is, that the spring governs as to the corner boundary, and not the survey. For the like reason, the plan of a survey, if it does not coincide with the actual monu- ments on the land, yields to the latter in point of certainty, and proof of intention. The same ground is equally true as to courses and distances from monument to monument. If they differ, the monuments govern, and not the courses or distances ; or, in other words, measurements yield to monuments, because they are more open to mistake, and less carefully observed, or significantly marked." Newsom v. Pryor, 7 Wheat. 7 ; M'lver V. Walker, 9 Cranch, 173 ; Boardman v. Reed, 6 Peters, 328 ; Doe V. Galloway, 5 B. & Ad. 43 ; Frost v. Spaulding, 19 Pick. 44.5 ; Wendell v. The People, 8 Wend. 190 ; Conn v. Penn, Peters, C. C. 496 ; Magoun V. Lapham, 21 Pick. 135 ; Esmond v. Tarbox, 7 Greenl. 61 ; Machias v, Whitney, 16 Me. 343. ' Wallis V. Wallis, 4 Mass. 135; Doe v. Simpson, 2 Wils. 22; Doe v. Salkeld, Willes, 673; Doe v. Whittingham, 4 Taunt. 20; Shep. Touch. 82, 83 ; Roe v. Tranmer, 2 Wils. 78. In this qase, Willes, C. J., says : " Cer- tainly it is more considerable to make the intent good in passing the estate, if by any legal means it may be done, than by considering the manner of passing it, to disappoint the intent and principal thing, which was to pass the land. Osman ». Sheafe, 3 Lev. 370." ' Roe V. Tranmer, 2 Wils. 75 ; Shep. Touch. 82. See also Goodtitle u. Bailey, 2 Cowp. 697 ; Hastings v. Blue Hill Turnpike, 9 Pick. 80 ; Vanhorn CHAP. XX. j CONSTRUCTION OF CONTRACTS. 751 § 780. Where the language of an instrument is neither un- certain nor ambiguous, it is to be expounded according to its apparent import ; i and is not to be warped from the ordinary meaning of its terms, in order to harmonize it with uncertain suppositions, in regard either to the probable intention of the parties contracting, or to the probable changes which they would have made in their contract, had they foreseen certain contingencies. Wherever the words are clear and definite, they must be understood according to their grammatical construc- tion and in their ordinary meaning.^ For such, it is natural to V. Harrison, 1 Ball. 137 ; Shove v. Pincke, 5 T. R. 124 ; Pray v. Pierce, 7 Mass. 381 ; Russell v. Coffin, 8 Pick. 143. ' And in such case, whether the contract be oral or written, its construc- tion and effect are to be determined by the court. Globe Works v. Wright, 106 Mass. 207 (1870) ; Rice v. Dwight Manuf. Co., 2 Cush. 80; Short v. Woodward, 13 Gray, 96 ; Pratt v. Langdon, 12 Allen, 544. Where the in- tention is apparent, any error in the particulars or details of a description will be disregarded, as well in the case of a mortgage note as of persons or property. Prescott v. Hayes, 43 IST. H. 593 (1862). ■ 2 2 Evans's Pothier on Oblig. 37 ; Co. Litt. 147 a. Mr. Wigram, in his Treatise on the Interpretation of Wills, lays down, as a general principle of interpretation, the following propositions : — " Proposition I. A testator is alwaj's presumed to use the words In which he expresses himself, according to their strict and primary acceptation, unless, from the context of the will, it appears that he has used them in a different sense, in which case the sense in which he thus appears to have used them will be the sense in which they are to be construed. " Proposition II. Where there is nothing in the context of a will from which it is apparent that a testator has used the words in which he has expressed himself in any other than their strict and primary sense, and where his words so interpreted are sensible with reference to extrinsic circumstances, it is an inflexible rule of construction, that the words of the will shall be interpreted in their strict and primary sense, and in no other, although they may be capable of some popular or secondary interpretation, and although the most conclusive evidence of intention to use them in such popular or secondary sense be tendered. " Proposition III. Where there is nothing in the context of a will, from which it is apparent that a testator has used the words in which he has expressed himself in any other than their strict and primary sense, but his words, so interpreted, are insensible with reference to extrinsic circum- stances, a court of law may look into the extrinsic circumstances of the case, ,to see whether the meaning of the words be sensible in any popular or 752 CONSTEUCTION OF CONTRACTS. [CHAP. XX. suppose, is the intention of the party using them. Thus, where a testator devised " my estate at Ashton," parol evidence was held to be inadmissible to show that he intended to pass not only his lands in Ashton, but also those in adjoining parishes, which he was accustomed to call his Ashton estate. ^ So, also, where an insurance w"as effected on fruit, and the policy con- tained the usual clause, that corn, fruit, &c., "are warranted free from average, unless general, or the ship be stranded," secondary sense, of which, with reference to these circumstances, they are capable. " Proposition IV. Where the characters in which a will is written are difficult to be deciphered, or the language of the will is not understood by the court, the evidence of persons skilled in deciphering writing, or who understand the language in which the will is written, is admissible to declare what the characters are, or to inform the court of the proper meaning of the words. " Proposition V. For the purpose of determining the object of a testator's bounty, or the subject of disposition, or the quantity of interest intended to be given by his will, a court may inquire into every material fact relating to the person who claims to be interested under the will, and to the property which is claimed as the subject of disposition, and to the circumstances of the testator, and of his family and affairs, for. the purpose of enabling the court to identify the person or thing intended by the testator, or to deter- mine the quantity of interest he has given by his will. "The same (it is conceived) is true of every other disputed point, respecting which it can be shown that a knowledge of extrinsic facts can, in any way, be made ancillary to the right interpretation of a testator's words. ' ' Proposition VI. Where the words of a will , aided by evidence of the material facts of the case, are insufficient to determine the testator's meaning, no evidence will be admissible to prove what the testator intended, and the will (except in certain special cases, see Prop. VII.) will be void for uncer- tainty. " Proposition VII. Notwithstanding the rule of law, which makes a will void for uncertainty, where the words, aided by evidence of the material facts of the case, are insufficient to determine the testator's meaning, courts of law, in certain special cases, admit extrinsic evidence of intention to make certain the person or thing intended, where the description in the will is insufficient for the purpose. "These cases may be thus defined: Where the object of a testator's bounty, or the subject of disposition (that is, the person or thing intended), is described in terms which are applicable indifferently to more than one person or thing, evidence is admissible to prove which of the persons or things so described was intended by the testator." ' Doe V. Chichester, 4 Dow, 65 ; Miller v. Travera, 8 Bing. 244. CHAP. XX.] CONSTRUCTION OF CONTRACTS. 753 and the ship was stranded in the course of the voyage ; the underwriters were held to be liable for an average loss arising from perils of the seas, though no part of the loss arose from the act of stranding ; and Lord Kenyon said : " Without inquiring into the reasons for introducing this exception, on the grammatical construction of it I have no doubt." " If it liad been intended that the underwriters should only be an- swerable for the damage that arises in consequence of strand- ing, a small, variation of expression would have removed all difficulty ; they would have said, ' unless for losses arising from stranding.' " ^ The maxim applicable to cases coming within this class, is, " Quoties in verbis nulla est amliguitas, ill nulla expositio contra verba expressa fienda est. Divinatio non inter- pretatio est quae omnino recedit a liter d.^' ^ § 781. The interpretation and construction of a contract should be favorable and liberal. Unless an agreement be manifestly intended to be frivolous or inconsistent, it should be so construed as to give it some effect ; for the parties must be supposed to have intended something by their agreement. The maxim is, Verba debent intelligi cum effectu, ut res magis valeat quam pereat? If words, therefore, be susceptible of two ' Burnett v. Kensington, 7 T. R. 222. In the subsequent case of Aguilar V. Rodgers, f T. R. 423, Lord Kenyon said : " The words here used are not equivocal, and we ought not to depart from them. It would be attended with great mischief and inconvenience, if, in construing contracts of this kind, we were not to decide according to the words used by the contracting parties. . . . On the grammatical construction of the words, which is the safest rule to go by, I am of opinion," &c. See also Gerrard v. Clifton, 7 T. R. 676 ; Mansell v. Burredge, 7 T. R. 352 ; Ware v. Hylton, 3 Dall. 199 ; 2 Evans's Pothier on Oblig. 38, 39. See also Vattel, B. 2, ch. 17, § 263. "It is not permitted to interpret what has no need of interpretation." = Co. Litt. 147 a. ' See Wigram on Interp. of Wills, p. 42; Proposition II., ante, § 639, note. " Whenever," says Willes, J., in Parkhurst v. Smith, Willes, 332, "it is necessary to give an opinion upon the doubtful words of a deed, the first thing we ought to inquire into is, what was the intention of the parties. If the intent be as doubtful as the words, it will be of no assistance at all. But if the intent of the parties be plain and clear, we ought if possible to put such a construction on the doubtful words of a deed, as will best answer the intention of the parties, and reject that construction which manifestly tends to overturn and destroy it. I admit that though the intent of the VOL. 1. 48 754 CONSTRUCTION OP CONTRACTS. [CHAP. XX. different senses, they are so to be understood as to have a legal and actual operation ; or if their ordinary and grammati- cal construction would render the contract frivolous and in- operative, when such was evidently not the intention of the parties, they should be construed according to their less obvi- ous meaning.^ So, also, where the language of a contract, if interpreted in its strict and primary sense, would conflict witli the evident intention of the party using it, — as if it would be senseless in view of the circumstances of the case, or wholly inapplicable thereto, — it will be interpreted according to the secondary sense of the words used. Thus, if, in a will, the testator leaves a certain portion of his estate to his "child," who would, according to the strict interpretation of the term, be his legitimate offspring only, or to his " son," who is strictly his immediate descendant, — and it should appear that lie had only an illegitimate child in the one case, or no immediate de- scendant, but only a grandson or an adopted child, in the other, the words of the will would be so construed as to har- monize with the facts of the case.^ So, also, the particles " to," " from," and " until," which, if used in their ordinary sense, are exclusive of times and places to which they refer, parties be never so clear, it cannot take place contrary to the rules of law, nor can we put words in a deed which are not there, nor put a construction on the words of a deed directly contrary to the plain sense of them. But where the intent is plain and manifest, and the words doubtful and obscure, it is the duty of the judges (and this is that astutia which is so much com- mended by Lord Hobart, p. 277, in the case of the Earl of Clanrickard) to endeavor to find out such a meaning in the words as will best answer the intent of the parties." See also Gibson v. Minet, 1 H. Bl. 569-614. Ante, § 636 a, and note. ■ " Where the words may have a double intendment, and the one standeth with law and right, and the other is wrongful and against law ; the intend- ment which standeth with law shall be taken." Co. Litt. 42 a, h, 183 a ; Parkhurst v. Smith, Willis, 332 ; Wright v. Cartwright, 1 Burr. 282 ; Fonbl. Eq. B. 1, c. 6, § 13; Shep. Touch. 87, 88; Smith v. Packhurst, 3 Atk. 136; Robinson v. Hardcastlc, 2 T. R. 2-54 ; Roe v. Tranmarr, Willes, 682 ; Gray V. Clark, 11 Vt. 683; Patrick v. Grant, 14 Me. 233; Thrall v. Newell, 19 Vt. 202. ' Wigram on the Interp. of Wills, p. 43 ; Wilkinson v. Adam, 1 Ves. & B. 422; Woodhouselee v. Dalrymple, 2 Meriv. 419 ; Beachcroft v. Beach- croft, 1 Madd. 430; Bayley v. Snelham; 1 Sim. & Stu. 78; Steede v. Berrier, 1 Freem. 292, 477 ; Gill v. Shelley, cited Wigram on Wills, p. 44. CHAP. XX.] CONSTRUCTION OP CONTRACTS. 755 may be so construed as to include such times and places, if an exclusive construction manifestly frustrate the intention of the parties.^ Thus, where a lease was granted for twenty-one years from the day of the date, it was held that the phrase " from the day " was to be regarded as inclusive and not ex- clusive.2 So, if a note should begin "I promise," and be signed by an agent in this manner: " Pro A. B. — 0. D.," or " A. B., agent for C. D. ; " it would be held to be the note of the principal.^ § 782. This rule of liberal construction will be applied to all cases in which the contract would, if strictly construed, be illegal ; for there is not only no presumption in law against the validity of a contract, but, on the contrary, every presump- tion is allowed in its favor.* But if the contract be ambigu- ously expressed, and be susceptible of different interpretations, and the party who is to do the act be actually mislSd, and perform one act when a different act was intended by the other ' The King u. Stevens, 5 East, 254-260; the King v. Skiplam, 1 T. R. 490 ; Wright v. Cartwright, 1 Burr. 285 ; 3 Leon. 211 ; 1 Evans's Pothier on Oblig. 92, and note 6; Story on Agency, § 152. ^ Pugh M. Duke of Leeds, 2 Cowp. 725. In this case. Lord Mansfield said : " The ground of the opinion and judgment which I now deliver is, that 'from ' may, in the vulgar use, and even in the strict propriety of language, mean either inclusive or exclusive; that the parties necessarily understood and used it in that sense which made their deed effectual ; that courts of justice are to construe the words of parties so as to effectuate their deeds, and not to destroy them, — more especially where the words themselves abstractedly may admit of either meaning." ' Long V. Colburn, 11 Mass. 97. See also Emerson v. Prov. Hat Manuf. Co., 12 Mass. 237 ; Ballou v. Talbot, 16 Mass. 461 ; Hills v. Ban- nister, 8 Cow. 31 ; Story on Agency, § 154. ' Co. Litt. 42 ; Archibald v. Thomas, 3 Cow. 284 ; Mills v. Wright, 1 Freem. 247 ; Vernon v. Alsop, T. Raym. 68 ; s. C. 1 Sid. 105 ; Finch's Law, 62 ; Parkhurst v. Smith, Willes, 332 ; Pugh v. Duke of Leeds, 2 Cowp. 714 ; Wright V. Cartwright, 1 Burr. 285 ; Ackland v. Lutley, 1 Perry & D. 636 ; The Queen v. Ruscoe, 8 Ad. & El. 386. Lord Lyndhurst, in Shore ». Wilson, 9 CI. & Finn. 397, says : " The rule is this, and it is a fair and popular rule, that where a construction consistent with lawful conduct and lawful intention, can be placed upon the words and acts of parties, you are to do so, and not unnecessarily to put upon these words and acts a construction directly at variance with what the law prohibits or enjoins." See also Many v. Beek- man L-on Co., 9 Paige, 188. 756 CONSTRUCTION OP CONTRACTS. [CHAP. XX. party, the contract will be construed in favor of the party mak- ing the mistake, — on the ground that the mistake was the consequence of the carelessness or negligence of the other party, and" he, therefore, should suffer .^ Thus, where an agent is misled by the ambiguity in the orders of his principal, and adopts the wrong construction of them, he will be exonerated, if his act be bond fide? § 783. A liberal interpretation is specially to be given to all commercial contracts. They are not to be construed strictly and technically, like bonds, which are generally technical in their form and drawn with caution, but all the facts and cir- cumstances in the transaction which may be indicative of the intention of the parties are to be considered.'^ And this rule stands upon the manifest ground that as these contracts are almost invariably drawn up loosely and informally, leaving much to inference, and often requiring a consideration of ex- trinsic circumstances to render them intelligible, a strict con- struction would frequently defeat the objects and intentions of the parties, and render them an unsafe basis for those exten- sive credits, by which the commerce of the world is carried on. Contracts of guaranty, for instance, are always to be construed in this mode.* Thus, a contract by a manufacturer of goods to fill an order for them " as soon as possible," means within a reasonable time, considering the manufacturer's ability to make them, and the orders then on hand ; it does not require him to lay aside all other work and devote all his means to this order.^ § 784. When the terms of a contract are doubtful and in- definite, they will be limited to the subject-matter of the con- tract, and to its obvious nature and object. Or, as elsewhere stated, words are not to be taken in their broadest import, when they are equally appropriate in a sense limited to the ' Barney v. Newcomb, 9 Cush. 47. '' Loraine v. Cartwright, 3 Wash. C. C. 151 ; Courcier v. Eltter, 4 Wash. C. C. 551 ; 1 Liv. on Agency, 403, 404; De Tastett v. CrousiUat, 2 Wash. C. C. 132 ; Story on Agency, § 74. ^ Bell V. Bruen, 1 How. 169 ; s. c. 17 Peters, 161 ; Lawrence v. MoCal- mont, 2 How. 426. * Ibid. See also Mason v. Pritchard, 12 East, 227 ; Haigh v. Brooks, 10 Ad. & El. 309 ; Mayer v. Isaac, 6 M. & W. 605. ' Attwood V. Emery, 1 C. B. (n. s.) 110 (1856). CHAP. XX.] CONSTRUCTION OF CONTEACTS. 757 object the parties had in view, and their apparent intent aa deduced from the whole iustrument.^ Verba generalia re- stringuntur ad habilitatem rei vel aptitudinem peraonce? Where, therefore, the contract is defective in its terms, or ambiguous, it will not be literally construed, but the law will supply what- ever is necessary to effect the evident objects of the parties.^ Thus, where a policy of an insurance contained a stipulation that a ship should " sail or depart with convoy," and the ship departed with convoy, and afterwards proceeded alone ; it was held, that the stipulation was broken, and that convoy meant " convoy for' the voyage ; " upon the ground that the very object to be attained by such stipulation would be frustrated, unless she remained under convoy during the whole voy- age.* So, also, the common covenant in a lease, for " unin- terrupted and quiet enjoyment, without the hinderance and interruption of any persons whatsoever," is restricted to the evictions and disturbances of persons having lawful title, and does not extend to the trespasses of wrong-doers or to the pub- lic acts of government.^ § 785. Again, general expressions used in a contract are controlled by the special provisions therein.^ And where, by a written agreement, the defendant undertook to do certain work for the defendant in houses " in South and Southampton Streets ; " and it appeared that, at the date of the agreement. > Hoffinan ». iEtna Fire Ins. Co., 32 N. Y. 405 (1865). » 1 Pow. on Cent. 377 ; Doe ». Burt, 1 T. R. 703. ' ' To do a thing " as soon as practicable" does not require the use of every human moans. It implies that there may be some delay. Reedy v. Smith, 42Cal. 245 (1871). The terra "merchant" held not to include a manufacturer. Josslyn v. Parson, Law R. 7 Ex. 127 (1872). The term "article" in a carrier's receipt construed. Wetzell v. Dins- more, 4 Daly, 193 (1871) ; Earle v. Cadmus, lb. 237. * Jefferyes v. Legendra, 1 Show. 321 ; Lilly v. Ewer, 1 Doug. 72; Webb V. Thomson, 1 Bos. & Pul. 5 ; Anderson v. Pitcher, 2 Bos. & Pul. 164. ' Chanudflower v. Prestley, Yelv. 30, and cases there cited in note. See also, generally, Greenby ». Wilcocks, 2 Johns. 1 ; Dobson v. Crew, Cro. Eliz. 705 ; Pen v. Glover, Moore, 402 ; s. c. Cro. Eliz. 421. * Chapin v. Clemitson, 1 Barb. 311. 758 CONSTEUCTION OF CONTRACTS. [CHAP. XX. the defendant had houses in South Street, but not in South- ampton Sti'cet, it was held, that as the parties had in contem- plation work to be done on the houses then owned by plaintiff, the agreement should be restricted thereto.^ The same rule applies to the construction of a mercantile guaranty. Wherever it is preceded by a recital definite in its terms, and to which the general words obviously refer, the liability will be limited by the recital.^ ' Hitchin v. Groom, 5 C. B. 515. ' Bell V. Bruen, 1 How. 109. In this case, Mr. Justice Catron says : " Letters of guaranty are usually written by merchants ; rarely with caution, and scarcely ever with precision ; they refer in most cases, as in the present, to various circumstances, and extensive commercial dealings, in the briefest and most casual manner, without any regard to form ; leaving much to inference, and their meaning open to ascertainment from extrinsic circum- stances and facts accompanying the transaction ; without referring to which they could raiely be properly understood by merchants, or by courts of jus- tice. The attempt, therefore, to bring them to a standard of construction, founded on principles neither known nor regarded by the writers, could not do otheiTvise than produce confusion. Such has been the consequence of the attempt to subject this description of commercial engagement to the same rules of interpretation applicable to bonds and similar precise con- tracts. Of the fallacy of which attempt, the investigation of this cause has furnished a striking and instructive instance. These are' considerations applicable to both of the arguments. "The construction contended for as the true one on the part of the plaintiffs, is, that the letter of the defendant must be taken in the broadest sense which its language allows, thereby to widen its application. To assert this as a general principle, would so often, and so surely, violate the intention of the guarantor, that it is rejected. We think the court should adopt the construction which, under all the circumstances of the case, ascribes the most reasonable, probable, and natural conduct to the parties. In the language of this court, in Douglass v. Reynolds, 7 Peters, 122, ' Every instrument of this sort ought to receive a fair and reasonable inter- pretation according to the true import of its terms. It being an engagement for the . Maund, 2 T. R. 760, in which a contrary rule was laid down, is said not to be Iftw. See also Edwards v. Goldsmith, 16 Penn. St. 43 ; Bomeisler v. Dobson, 5 Whart. 398. See also Eaton v. Smith, 20 Pick. 150; Bradley v. Wheeler, 44 N. Y. 496 (1871). The effect of a subsequent contract upon a pre-existing one is a question for the court to determine from their terms. Cocheco Bank v. Berry, 52 Me. 293 (1864). ' Short D. Woodward, 13 Gray, 86 (1859). " School District!). Lynch, 33 Conn. 330 (1866). The construction of a written contract is a question of law, to be decided by the court. Randall V. Thornton, 43 Me. 226 (1857) ; Nash v. Drisco, 51 Me. 417 (1864) ; but it is for the jury alone to determine from all the evidence, what was said and done by the parties to a verbal contract. Guptill v. Damon, 42 Me. 271 (1856) . Where the contents of a wi-itten contract which is lost, are proved by parol, without any copy, its construction must be determined by the jury. Moore y. Holland, 39 Me. 307 (1855). The construction of a contract con- tained in letters is a question of law for the court. Smith v. Faulkner, 12 Gray, 251 (1858). ■" And when a contract is plain in its terms, it is not to be controlled by evidence of usage. Barnard v. Kellogg, 10 Wall. 383 (1870) ; Stagg o. Connecticut Ins. Co., ib. 589. See also Dodd v. Farlow, 11 Allen, 426. CHAP. XX.J COXSTRUCTION OP CONTRACTS. 767 the parties in respect to matters with regard to which the con- tract itself affords a doubtful indication, or perhaps no indica- tion at all.^ Thus, evidence of usage was held to be admissible to show that the term " days " in a bill of lading meant " working days ; " ^ and that a contract to pay a certain sum " per day " for labor and services was an agreement to pay such sum for every ten hours' work,^ and that the word " town" included the vicinity of the place.* So, where a pauper and other persons agreed in writing to " serve B. & Co." for a cer- tain length of time and for certain prices, and " to lose no time on our own account, to do our work well, and behave ourselves in every respect as good servants," and on trial it appeared that the pauper had occasionally absented himself on holidays during the year, it was held, that the custom of persons em- ployed in the particular trade, under contracts like that of the pauper, to have certain holidays in the year, might properly be inquired into to define the exact terms of the particular con- tract.^ So, where bought and sold notes are given on a sale of goods, in an action for the price, it may be shown that by usage of trade all sales of that specific article are by sample, although not so expressed in the notes. ^ So, also, where, in a charter-party, the charterer engaged that the vessel should be unloaded at a certain average rate per day, and that, if de- tained for a lono;er period, he would " pay for such detention at the rate of £5 per diem, to reckon from the time of the vessel being ready to unload, and in turn to deliver," it was held, that evidence was admissible to show that by usage of trade the words, " in turn to deliver" had a peculiar meaning.'^ So, also, where it appeared that,, by the usage of the banks at Washington, four days' grace were allowed on bills and prom- issory notes, it was held that demand and notice given in ac- cordance with such usage would bind the indorser, — on the ground that where bills and notes are made payable at a cer- tain bank, it is presumed that the parties intend that demand ' Hutton V. Warren, 1 M. & W. 475. ' Cochran v. Retberg, 3 Esp. 121. ' Hinton v. Locke, 5 Hill, 437. « Steger V. Dwyer, 31 Iowa, 20 (1S70). » The Queen v. Stoke-upon-Trent, 5 Q. B. 303. • Syers v. Jonas, 2 Exch. 111. ' Robertson v. Jackson, 2 C. B. 413. 768 CONSTEUCTION OP CONTRACTS. [CHAP. XX. and notice shall be given according to the usage of such bank.^ § 795. Usage, therefore, is admissible for the purpose of de- termining the real intentions and understanding of the parties, where they are not determined by the actual terms of the con- tract. But inasmuch as the actual terms employed in a writ- ten contract afford the most certain and determinate evidence of the intentions of the parties, usage is not admissible to contradict or supersede the positive and definite provisions se- cured thereby, but only to explain whatever is indeterminate in their expression.^ And much caution is observed by the courts in allowing evidence of usages which do not agree with the apparent provisions of the contract.^' When, therefore, it was attempted to establish a custom that the owners of packet vessels between New York and Boston should be liable only for damage occasioned by their own neglect, it was held that this was not admissible to vary the terms of a bill of lading by which goods were to be delivered in good order and condition, "the dangers of the seas only excepted."* Besides, the pre- ' Mills V. Bank of U. S., 11 Wheat. 481, and also Renner v. Bank of Columbia, 9 Wheat. 581 ; Bank of Washington v. Triplett, 1 Peters, 25 ; Chicopee Bank v. Eager, 9 Met. 583. = Hone V. Mutual Safety Ins. Co., 1 Sandf. 137. ^ Schooner Reeside, 2 Sumner, 567. * Schooner Reeside, 2 Sumner, 567. In this case Mr. Justice Story, in delivering judg-ment, said: "I own myself no friend to the almost indis- criminate habit, of late years, of setting up particular usages or customs in almost all kinds of business and trade, to control, vary, or annul the general liabilities of parties under the common law, as well as under the commercial law. It has long appeared to me, that there is no small danger in admitting such loose and inconclusive usages and customs, often unknown to particular parties, and always liable to great misunderstandings and misinterpretations and abuses, to outweigh the well-known and well-settled principles of law. And I rejoice to find, that, of late years, the courts of law, both in England and in America, have been disposed to narrow the limits of the operation of such usages and customs, and to discountenance any further extension of them. The true and appropriate office of a usage or custom is, to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of their contracts, arising not from express stipulations, but from mere implications and presumptions, and acts of a doubtful or equivocal character. It may also be admitted to ascertain the true meaning of a par- ticular word, or of particular words in a given instrument, when the word or CHAP. XX.] CONSTRUCTION OF CONTRACTS. 769 sumption is, that -when the terms of a contract are reduced to writing, and are inconsistent with the usage, the parties agree to waive the usage. ^ § 796. Nor is it every usage that is admissible even to ex- plain a contract. For if it be to do an illegal act, or if it violate the express requirements of a statute, or defeat the essential provisions of the contract, it cannot be given in evi- dence. Thus, a usage among banks in Massachusetts to regard a certain bank post-note, payable at a future day certain, as payable without grace, there being no express stipulation to that effect in the note itself, would not be admissible to explain the contract, because it is contrary to the Revised Statutes of Massachusetts, providing that on all promissory notes, payable at a future day certain, grace shall be allowed, unless there be words have various senses, some common, some qualified, and some technical, according to the subject-matter to which they are applied. But I apprehend, that it can never be proper to resort to any usage or custom to control or vary the positive stipulations in a written contract, and, a fortiori, not in order to contradict them. An express contract of the parties is always admissible to supersede, or vary, or control, a usage or custom ; for the latter may always be waived at the will of the parties. But a writtun and express contract cannot be controlled, or varied, or contradicted by a usage or custom : for that would not only be to admit parol evidence to control, vary, or contradict written contracts ; but it would be to allow mere pre- sumptions and implications, properly arising in the absence of any positive expressions of intention, to control, vary, or contradict the most formal and deliberate written declarations of the parties. " Now, what is the object of the present asserted usage or custom ? It is to show, that, notwithstanding there is a written contract (the bill of lad- ing), by which the owners have agreed to deliver the goods, shipped in good order and condition, at Boston, the danger of the seas only excepted ; yet the owners are not to be held bound to deliver them in good order and con- dition, although the danger of the seas has not caused or occasioned their being in bad condition, but causes wholly foreign to such a peril. In short, the object is, to substitute for the express terms of the bill of lading an im- pUed agreement on the part of the owners, that they shall not be bound to deliver the goods in good order or condition ; but that they shall be liable only for damage done to the goods occasioned by their own neg- lect. It appears to me, that this is to supersede the positive agreement of the parties ; and not to construe it. The exception must, therefore, be sus- tained." » Schooner Keeside, 2 Sumner, 567 ; 3 Kent, Comm. 260 ; Rogers v. Mechanics' Ins. Co., 1 Story, 607. VOL. I. 49 770 CONSTRUCTION OF CONTRACTS. [CHAP. XX. an express stipulation to the contrary.^ But where the usage is not immoral or illegal in itself, "the mere fact that it is in con- travention of the general rules of the common law will not render it inadmissible, provided it appear to be reasonable and convenient. Thus, where a certain cargo of corn was sold in bulk under a warranty, it was held that evidence was admissi- ble to show a usage in the place where it was sold that the purchaser could keep as much of the corn as answered the war- ranty and decline taking the residue, — although the general rule of law required him, if he would rescind tVie sale, to restore the entire quantity.^ But a usage that warehouse receipts pass by delivery, without indorsement, has been held bad.^ ' Perkins v. Franklin Bank, 21 Pick. 483 ; Mechanics' Bank v. Merchants' B.. Fonblanque, 6 C. & P. 44 ; Hall v. Benson, 7 C. & P. 711 ; Atkins v. Howe, 18 Pick. 16 ; Singleton v. Hilliard, 1 Strob. 203. See Cope v. Dodd, 13 Penn. St. 33 ; United States v. Buchanan, 8 How. 83, 772 CONSTRUCTION OP CONTRACTS. [CHAP. XX. ticular port, in respect to a particular trade, is not a sufficient custom to limit the terms of a contract of insurance ; but it must be some known or general custom in the trade, applica- ble to all ports of the State wherein it exists..^ So, also, proof that a particular mode of selling cotton in Mobile " was yerj common in the trade, but that a few factors in Mobile would not do so," was held not to be proof of a usage of trade.^ § 799. In respect of the usages of the stock exchange, it has become settled law, that where a contract for the purchase and sale of shares has been entered into between individuals through their respective brokers, or with the inter- vention as purchasers or sellers of jobbers, members of the stock exchange, the lawful rules and usages of the exchange are incorporated into and become part and parcel of all such contracts ; and the rights and liabilities of individuals, parties to any such contracts, are determined by the operation upon the contracts of these rules and usages.^ § 800. If, however, the parties to a contract have previously dealt together in a certain manner, following a particular usage or custom, such usage may be given in evidence to interpret their intentions and understanding, although it be confined to them individually.* Thus, where the usage of a bank, not to transmit checks by mail, but by a certain steamboat, was well known to a party drawing a check, it was held, that he must be supposed to have made such usage a part of any arrange- It is for this reason that a usage or construction given to particular worJs in Boston, Ma.-s., will not affect a policy of insurance upon a vessel made at Rockland, Maine, unless such usage or construction is known to the parties, or is shown to exist at the latter place. Cobb v. Lime Rock F. & M. Ins. Co., 68 Me, 326 (1870). ' Rogers v. Mechanics' Ins. Co., 1 Story, 606 ; Renner v. Bank of Colum- bia, 9 Wheat. .581 ; Taunton Copper Co. v. Merchants' Ins. Co., 22 Pick. 108; Child v. Sun Mutual Ins. Co., 3 Sandf. 26. " Austin V. Crawford, 7 Ala. 335. s Bowring v. Shepherd, Law R. 6 Q. B. 809 (1871), Kelly, C. B. ; Grissell v. Bristowe, Law R. 4 C. P. 36 ; Coles v. Bristowe, Law R. i, Ch. 3; Davis v. Haycock, Law R. 4 Ex. 373. •* Loring v. Gurney, 5 Pick. 15 ; Bridgeport Bank v. Dyer, 19 Conn. 136 ; Bodfish V. Fox, 23 Me. 90; Bourne v. Gatliff, 11 CI. & Finn. 45-70. CHAP. XX.] CONSTRUCTION OP CONTRACTS. 773 ment with the bank in respect to the transmission of the check ; as no express agreement to the contrary appeared. ^ § 801. If, however, the terms employed in a contract be in- consistent with the construction which custom or usage require, they must be understood in the sense in which they were ob- viously employed. 2 So, also, if plain and ordinary terms and expressions be used, to which no local nor technical and pecu- liar meaning be attached, they cannot be altered by evidence of a mercantile usage. For though usage may be admitted to elucidate what is doubtful, it is not admissible to contradict what is plain.* Thus, where a policy of insurance was, by its terms, to continue on a ship until she was " moored twenty- four hours, and on the goods tUl safely landed; " it was held, that evidence of the usage that the risk on the goods, as well as on the ship, expired in twenty-four hours, was inadmissible.* So, also, where words have a known legal meaning, as the technical words in a deed, they cannot be varied by usage,^ un- less such usage be specially referred to in the contract itself; or unless the wo'rds be explained in the contract so as to con- form to the usage. ^ Thus, where a demise was made of lands, to be held from the feast of St. Michael, which must be taken, legally, to mean from New Michaelmas ; it was held, that evi- dence of usage and custom could not be introduced to show 1 Bridgeport Bank v. Dj-er, 19 Conn. 136. 2 3 Stark. Evid. 1036 ; 2 Stark. Evid. 452, et seq. ; Dickinson v. Lilwall, 4 Camp. 279 ; Gibbon v. Yonng, 8 Taunt. 260 ; Lewis v. Thatcher, 15 Mass. 433 ; Webb v. Plummer, 2 B. & Al. 746 ; 2 Phil. Evid. 45, 46 ; Hotham v. East India Co., 1 T. R. 638. ^ Blaokett v. Royal Exchange Assurance Co., 2 Cr. & J. 249, per Lord Lyndhurst ; 3 Stark. Evid. 1036 ; Hawes v. Smith, 3 Fairf. 429 ; 2 Stark. Evid. 566 ; Greenl. Evid. § 280, 295. See Partridge v. Insurance Co., 15 Wall. 573 (1872). * Parkinson i^. Collier, Park on Ins. 470; Yeats v. Pim, 2 Marsh. 141 ; Greenl. Evid. § 292 ; Blackett v. Royal Exchange Assurance Co., 2 Cr. & J. 244, 249, 250. 5 2 Stark. Evid. 527 ; Doe v. Benson, 4 B. & Al. 588 ; Frith v. Barker, 2 Johns. 327 ; Sleght v. Rhinelander, 1 Johns . 192 ; Thompson v. Ashton, 14 Johns. 316 ; Stoever v. Whitman, 6 Binn. 417 ; Henry v. Risk, 1 Dall. 265 ; Homer v. Dorr, 10 Mass. 26. * Ellniaker v. EUmaker, 4 Watts, 89 ; Brackett v. Leighton, 7 Greenl. 885 ; Doe v. Lea, 11 East, 812. 774 CONSTRUCTION OF CONTRACTS. [CHAP. XX. that Old Michaelmas was intended.^ But such evidence would be admissible on a mere letting by parol. ^ § 802. It is also a general rule, that a contract is to be ex- pounded according to the law or custom of the place where 1 Doe V. Lea, 11 East, 313 ; 2 Stark. Evid. 455 ; 3 Stark. Evid. 1038 ; SlegM V. Rhinelander, 1 Johns. 192. 2 Doe V. Benson, 4 B. & Al. 588. In Hone v. Mutual Safety Ins. Co., 1 Sandf. 138, tlie question as to when evidence of usage is admissible was carefully considered ; and the court in this case said : " It is one of the most embarrassing subjects with which we meet, to determine when and for what purposes evidence of a usage shall be received ; and we can add our testi- mony to that of Judge Story, in the case of the Schooner Reeside, ^_ Sumner, 567, as to the frequency of the attempts to construe and influence contracts by proof of usage. "We have endeavored, by a careful consideration of the principles of law, and the adjudications on the subject, to ascertain the true ground upon whirh this usage must be admitted or rejected. " We find it clearly settled, that a general usage, the effect of which is to control rules of law, is inadmissible. So of one which contradicts a settled rule of commercial law. In the application of this principle, in one instance, the usage rejected was to the effect that a bill or note payable to order, and indo'scd specially, without adding the words, or order or bearer, ceased to be negotiable. Edie v. East India Co., 2 Burr. 1216. In another case, the universal u.-^age in Boston was proved to be, that when a cargo was insured for a voyage out and proceeds home, and the proceeds were not returned, a portion of the premium was refunded to the injured ; but the court refused to receive the usage to reduce the recovery on premium notes given upon such an insurance. Huiner v. Dorr, 10 Mass. 2G. " In Frith v. Barker, 2 Johns. 327, a master of a ship claimed to recover freight on fifty hogsheads of sugar, from which, owing to the leakage of the vessel, the sugar washed out during the voyage, and the casks were empty on their arrival in this port. The master offered to prove that, by the usage of merchants at New York, freight was payable for the empty casks under such circumstances ; and the court held it was not competent. " On the other hand, there is a great variety of cases in which the courts have permitted evidence to be given, tu show the meaning of terms in com- merce and the arts, or of words and phrases peculiar to mercantile pursuits. This is generally spoken of as proof of uso^e ; although in man)- cases it is rather the definition of technical language. Thus, without citing the cases at large, we will refer to the following instances, as illustrating the principle upon whicli they proceed. ' Hoots' were proved not to include sarsaparilla, in the clause relative to average in a marine policy, the insurance being on sarsaparilla ; the term ' skins,' in a like instance, does not include bear-skins having the fur on them ; the word ' outfits,' in policies on whaling vessels, includes one-fourth of the catchings, the catchings becoming virtually the CHAP. XX.] CONSTRUCTION OF CONTRACTS. 775 it is made, where tlie actual intention of the parties in this re- spect is not expressly stated, but is to be inferred from the nature, objects, and occasion of the contract.^ Any ambiguity proceeds of a large portion of the outfits, and the like. So proof has beeu allowed of the meaning of the term ' sea-letter,' in policies at a particular port ; the meaning of the word ' cargo,' in particular voyages and lines of trade ; the customs of a particular trade in respect of convoy, the mode of unlading goods at the port of destination, the period of detention allowable at intermediate ports for landing parts of a cargo, the meaning of ' proceeds of goods shipped,' and the like. " But when an attempt was made to prove that, by the usage, a boat lost from the stern davits was not to be paid for under a policy on a ship, her tackle, &e., or that a boat slung upon the quarter was not covered by such a policy, the Supreme Court of Massachusetts, and the Court of Exchequer in England, in contemporary decisions, rejected the evidence. "In Rankin v. The American Insurance Co., 1 Hall, 619, the defendants offered to prove in bar of a recovery on a policy on merchandise, that by the usage of trade in this port, it was indispensable, to charge the indem- nitors for goods imported, that an actual survey should be made on board by the port-wardens, finding that the goods were properly stowed, and were damaged on the voyage by the perils of the sea. This court held that the evidence was inadmissible. And see Turner v. Burrows, 5 Wend. 541, affirmed in error, 8 ib. 144. " In fine, we believe that the rule of construction applicable to policies of insurance does not differ from that applied to other mercantile instruments. Its sense and meaning are to be ascertained from the terms of the policy, taken in their plain and ordinary signification ; unless such terms have, by the known usage of trade in respect to the subject-matter, acquired a mean- ing distinct from the popular sense of the same terms, or unless the instru- ment itself taken together shows that they were understood in some peculiar manner. And that while we may not enlarge or restrict the clear and ex- pUcit language of the contract, by proof of a custom or usage ; yet in the application of the contract to its subject-matter, in bringing it to bear upon any particular object, the customs and usages of trade are admissible to ascer- tain what subjects were within, and what were excluded from its operation. Such evidence is proper, on the same principle that proof of the meaning of technical words, and words of science and the arts, is permitted in arriving at the intention of the parties in the construction of contracts." ' Story's Conflict of Laws, § 272 ; Trimbey v. Vignier, 1 Bing. N. C. 151, 159; De la Vega u. Vianna, 1 B. & Ad. 284; British Linen Co. v. Drummond, 10 B. & C. 903 ; Wilcox ». Hunt, 13 Peters, 378, 379 ; Harri- son V. Sterry, 5 Cranch, 289, 298 ; Robinson v. Bland, 1 W. Bh 234, 256 ; Depau V. Humphreys, 8 Martin (n. s.), 1, 8, 9, 13, &c. ; Morris v. Eves, 11 Martin, 730 ; Courtois v. Carpentier, 1 Wash. C. C. 376 ; Pope v. Nickerson, 3 Story, 484. The general rule is that contracts, in respect to their construction and force, are to be governed by the law of the country in which they are to be performed. Hall v. Costello, 48 N. H. 176 (1868). 776 CONSTRUCTION OF CONTRACTS. [CHAP. XX. i of terms may be thus explained by the common signification of those terms in the country where it is made. Thus, " a pack of wool" may differ in weight in Yorkshire and Wiltshire, and the word would be construed to mean the one weight or the other, according to the place where the contract is made.^ So, also, the terms " cotton in bales " mean compressed bales in some places, and in others merely bags ; and the meaning of the phrase would depend upon the place where the contract for the cotton was made. 2 Again, where the lessee of a rabbit warren covenanted to leave on the warren 10,000 rabbits, for which the lessor was to pay ^60 per thousand, it was held, that evidence was admissible to show that by the custom of the country the word " thousand," as applied to rabbits, meant one hundred dozen or twelve hundred.^ But if the law positively establish a particular measure, and prohibit the use of any other, as is the case with respect to corn in England, the con- tract will be understood to refer to such legal measure, whatso- ever be the local usage to the contrary ; for no usage can be permitted to supersede the law.* So, also, a note made in Eng- land for £100, would mean £100 sterling, and a note made in America for the same nominal sum would be construed to mean .£100 in American currency. So, if a contract be made in England for the sale of land in Jamaica, and the vendee agree ' 1 Evans, Pothier on Oblig. 94, note 6; Master, &c., of St. Cross v. Lord Howard de Walden, 6 T. R. 343. " Taylor v. Briggs, 2 C. &. P. 525. " Smith V. Wilson, 3 B. & Ad. 72.S. See, however, Hinton v. Locke, 5 Hill, 437, in which Mr. Justice Bronson expressed a question as to whether the doctrine of this case could be supported, on the ground that it was "a plain contradiction of the express contract of the parties." But he, never- theless, licld, in the case before him, where a carpenter was hired at twelve shillings per dni/, that it was admissible for him to show a universal usage amoiiij carpenters to consider ten hours labor to be a day^s work ; so that if he woi-ked twelve hours and a half within the twenty-four hours, he was en- titled to be paid for a day and a quarter. This case seems quite as strong as that of Smith v. Wilson, and quite as much in contradictiou to the strict words of the contract. ^ 1 Evans, Pothier on Oblig. 94, note b ; !\Lister, &o., of St. Cross v. Lord Howard de Walden, 6 T. R. 338; Hockin v. Cooke, 4 T. R. 314; Noble V. Durell, 3 T. R. 271 ; The King v. Major, 4 T. R. 750. CHAP. XX.] CONSTRUCTION OP CONTRACTS. 777 to give £20,000 for the land, without specifying in what cur- rency, in the absence of all expressions and circumstances inti- mating a different intention, the contract would be interpreted to mean that the price should be paid in English currency ; although the difference between the English pound sterling and the Jamaica pound, exclusive of any premium on bills of ex- change, is forty per cent.^ Marriage contracts and settlements also come within the same rule.^ So, where, in an action upon an unstamped agreement made at Jamaica, it appeared that by the law of that island a stamp was necessary to render it valid ; it was held, that the action could not be maintained in England.^ Nor does it make any difference whether the con- tract be made between foreigners, or between foreigners and citizens;* and ignorance of the foreign law will not release a party from a contract made in a foreign country.^ § 803. But alfliough a contract is ordinarily to be construed according to the law of the place where it is made, yet if it be to be performed in some other place, it must be construed according to the law of the place where it is to be performed.^ If no place of performance be either expressly stated or im- 1 Story, Conflict of Laws, § 271, 272; 2 Burge, Comm. on Col. and For. Law, pt. 2, ch. 9, p. 860, 861. " Story, Conflict of Laws, § 276 ; Anstruther v. Adair, 2 Myl. & K. 513, 516. See also Breadalbane v. Chandos, cited in 4 Burge, Comm. on Col. and For. Law, Appendix, 749, 755 ; Feaubert o. Turst, Pr. Ch. 207 ; Decouche v. Savetier, 3 Johns. Ch. 190 ; Mostyn v. Fabrigas, 1 Cowp. 174; Comstock v. Smith, 20 Mich. 338 (1870). 3 Alves V. Hodgson, 7 T. R. 241 ; s. c. 2 Esp. 528; Clegg v. Levy, 3 Camp. 166. * Story, Conflict of Laws, § 279 ; Smith v. Mead, 3 Conn. 253 ; De Sobry V. De Laistre, 2 Har. & John. 193, 228. 6 Dalrymple v. Dalrymple, 2 Hagg. Consist. 60, 61 ; Story, Conflict of Laws, § 273 ; Blanchard v. Russell, 13 Mass. 1. « Story, Conflict of Laws, § 270, 280 ; Andrews v. Pond, 13 Peters, 65 ; Prentiss v. Savage, 13 Mass. 23 ; Chapman v. Robertson, 6 Paige, 627 ; 2 Kent, Comm. 457 ; Pope v. Nickerson, 3 Story, 484. A contract made in this State to subscribe to shares in the capital stock of a railroad corporation established by the laws of another State, and having their road and treasury there, is a contract to be performed there, and is to be construed by the laws of that State. Penobscot and Kennebec Railroad Co. v. Bartlett, 12 Gray, 244 (1858). 778 CONSTRUCTION OP CONTEACTS. [CHAP< XX. plied from the terms of the contract, the law of the place where it was made will govern.^ Thus, where a note is made at Dublin for £100, payable at London, it would be interpreted to mean £100 in English currency, and not in Irish currency.^ So, where a merchant in America orders goods to be purchased for him in England, the contract is to be expounded according to the law and custom of England ; for there the final consent completing the contract is given, and there the contract is exe- cuted.^ So, also, although the lex loci contractus governs as to the rule of interest, in the absence of any express contract, yet if the place of payment or performance be different from that of the contract, interest will be reckoned according to the rate allowed by such place.* § 804. So, also, if a contract be to be performed partly in one country, and partly in another country, it has a double operation, and each portion is to be interpreted according to the laws of the country where it is to be performed.^ Thus, where a bill of lading is made of goods, some of which are to be delivered at one port, and some at another, in different countries, the bill of lading is to be construed in reference to the portion delivered at each port, according to the laws of that port. 8 So, also, the same rule applies to contracts of 1 Story, Conflict of Laws, § 282 ; Coolidge v. Poor, 15 Mass. 427 ; Con- sequa v. Fanning, 3 Johns. Ch. 587, 610 ; Bradford v. Farrand, 13 Mass. 18 ; Milne v. Moreton, 6 Binn. 353, 359, 365 ; Pope v. Nickerson, 3 Story, 484. 2 Story, Conflict of Laws, § 272 a; Kearney v. King, 2 B. & Al. 301 ; Sprowle V. Lcgge, 1 B. & C. 16. " Whiston V. Stodder, 8 Martin, 95 : Malpica v. McKown, 1 La. 248, 255. Tlie Lord Chancellor, in the late case of Pattison v. Mills, in the House of Lords, said: " If I, residing in England, send down my agent to Scotland, and he makes contracts for me there, it is the same as if I myself went there and made them." Pattison v. Mills, 1 Dow & Clark, 342 ; Albion F. & L. Ins. Co. V. Mills, 3 Wils. & Shaw, 218, 233; 3 Biirge, Comm. on Col. and For. Law. pt. 2, ch. 20, p. 753. * Story, Conflict of Laws, § 291 to 297, and cases cited; 2 Kent, Comm. 460; Robinson v. Bland, 2 Burr. 1077 ; Ekinsu. East India Co., 1 P. Wms. 396 ; Fanning v. Consequa, 17 Johns. 611. 5 Pope V. Nickerson, 3 Story, 485. « Ibid. CHAP. XX.] CONSTRUCTION OP CONTRACTS. " 779 af&eiglitment and shipment, some portions of which are to be performed at the- home port, some at the foreign port, and some at the return port.^ § 805. Again, a contract is to be construed in reference to the time when it was made ; and to contemporaneous laws and usages. The state of the country, the manners of society, and the customs, which are a fluctuating law, pervading and modi- fying contracts, are implied in almost every transaction, and therefore will often elucidate questions which, standing alone, would be scarcely intelligible. Ancient grants are, therefore, to be expounded according to the law of the time when they where made.^ Thus, where a proprietary grant was made in 1680 of " a piece of land below high-water mark, to set a shop upon, not exceeding forty feet in width," it was construed to extend to low- water mark ; and the court said: " Whatever may be the construction of analogous words in a recent conveyance, made in terms of precision and accuracy, and when considera- ble value is attached to flats in the beds of rivers, creeks, and coves, it is obvious, that to apply rigid rules of construction to transactions which took place early after the settlement of the country, when conveyancing was little understood, and when the mud of a river or harbor was supposed to be worth nothing, would be often attended with injustice, and, in many instances, subvert the titles to property of almost incalculable value." ^ Usage, however, or contemporaneous exposition, is not to be called in aid, when the language of a contract is clear and precise, but onlv where it is equivocal or doubtful ; as in the ' Pope V. Nickerson, 3 Story, 485. * Co. Litt. 8 6; Amb. 288. "Every grant shall be expounded as the intent was at the time of the grant; as if I grant an annuity to J. S. until he be promoted to a competent benefice, and at the time of the grant he was but a mean person, and afterward is made an archdeai;on, yet if I offer him a competent benefice, according to his estate at the time of the grant, the annuity doth cease." Per Wray, C. J., Gro. Eliz. 35. ^ Adams v. Frothingham, 3 Mass. 360. See also Att'y-Gen. v. Parker, 3 Atk. 577 ; Withnell v. Gartham, 6 T. R. 388 ; Weld v. Hornby, 7 East, 199 ; Codman v. Winslow, 10 Mass. 149 ; Branch's Maxims, Hening's ed. 30. 780 CONSTRUCTION OP CONTRACTS. [CHAP. XX. construction of ancient statutes and charters, and other instru- ments, the meaning of which is obscure.-' § 806. The exposition is to be upon the whole contract, and not upon disjointed parts taken separately.^ Several instru- ments made at the same time are to be construed together as parts of one contract, where it is necessary to carry into effect the agreement and intention of the parties.^ The oljject of the contract, and the intention of the parties, is to be gathered from a consideration of all the parts of the agreement, and one 1 Iggulden V. May, 2 Bos. &Pul. N. R. 449 ; s. c. 7 East, 237 ; and before Lord Eldon, 9 Ves. 325. See also Tritton v. Foote, 2 Cox, 174; Rubery v. Jervoise, 1 T. R. 229 ; Livingston v. Ten Broeck, 16 Johns. 23 ; Peake on Evid. 119, 2d ed. ; 3 Stark. Evid. 1031 ; 1 Phil. Evid. 1st Am. ed. 419, 420 Cortelyou v. Van Brundt, 2 Johns. 307 ; M'Keen v. Delancy, 5 Cranch, 22 Sheppard v. Gosnold, Vaugh. 169 ; Rogers v. Goodwin, 2 Mass. 475 Packard v. Richardson, 17 Mass. 144; Stuart v. Laird, 1 Cranch, 299; 1 Kent, Comm. 434, 1st ed. ; Blankley v. Winstanley, 3 T. R. 279 ; The King V. Osbourne, 4 East, 327 ; Rex v. Varlo, 1 Cowp. 250 ; Mayor of London v. Long, 1 Camp. 22. ^ Li the case of Washburn v. Gould, 3 Story, 162, Mr. Justice Story says: "There is no magic in particular words; but we must understand them as they stand and are used in the particular instrument ; and, in searching for the true interpretation, we must look at all the provisions of the instrument, and giv^ such effect to it as its obvious objects and designs require, without nicely weighing the precise force of single words." So, also, Lord Hobart, in Trenchard v. Hoskins, Winch, 93, says: "Every deed ought to be construed according to the intention of the parties, and the intents ought to be adjudged of the several parts of the deed, as a general issue out of the evidence, and intent ought to be picked out of every part, and not out of one word only." Lord Ellenborough, in Barton v. Fitzgerald, 15 East, 541, thus states the rule : " It is a true rule of construction that the sense and meaning of the parties in any particular part of an instrument may be collected ex aniecedeniibus et consequentibus. Every part of it may be brought into action in order to collect from the whole one uniform and consistent sense, if that may be done." Miill V. Huntress, 43 N. H. 480 (1862). In construing a written agreement, the court will not only look at the surrounding circumstances, but will read the preliminary agreement as well as the papers referred to in the agreement to be construed, with a view to discover the intention of the parties, and the sense in wliich terms apparently ambiguous or inconsistent were used by them. Salmon Falls Manuf. Co. v. Portsmouth Co., 46 N. H. 249 (1865). CHAP. XX.] CONSTRUCTION OP CONTRACTS. 781 clause is to be interpreted by another. ^ Ex anteccdmtihus et consequentibus Jit optima interpretatio ; nam turpis est pars, quce cum suo toto non convenit. Thus, where the Tender of an estate warranted it against himself and his heirs, and cove- nanted that he, " notwithstanding any thing by him done to the contrary," was seised lawfully and absolutely in fee-simple, and that he had a good right and full power to convey ; and the breach of covenant was, that other persons were rightfully en- titled to the said land, to whom he had been obliged to become tenant, and had thus lost his fee-simple ; it was held, that the general covenant of good right, lawful title, . Lawrence, 38 K. Y. 71 (1868). ' Stackpole v. Arnold, 11 Mass. 31. See also Woollam v. Hearn, 7 Vea. 218 ; Hunt v. Adams, 7 Mass. 522. ^ Kelly V. Crniningham, 1 Allen, 473. * Higgins V. Senior, 8 M. & W. 844, 845 ; Gray v. Gutteridge, 1 M. & R. 618 ; Leadbitter v. Farrow, 5 M. & S. 346 ; Nash ». Towne, 6 Wall. 690 (1866) ; Ford «. Williams, 21 How. 287 (1858). But if a contract is signed " B., by C," parol evidence is admissible to show that B. was only an agent 798 ADMISSIBILITY OP PAROL EVIDENCE [CHAP. XXI. the plaintiffs jointly with the defendants, and apparently a joint undertaking by all the signers, was in fact signed by the plain- tiffs as one party, and by the defendants as a second party, is inadmissible, as tending to contradict or control a written in- strument.^ But a written contract may be superseded by a subsequent verbal agreement inconsistent with it.^ And it is held that a written contract of agency may be enlarged by proof of subsequent declarations and conduct of the principal.^ § 821. The object of interpretation is, as we have seen, to ascertain the intention of the parties. Whenever such inten- tion is clearly and definitely expressed, no rules of interpreta- tion are requisite, but only in cases where there is an ambi- guity or deficiency in the record of such intention. These rules, however, would be often incapable of application, without the introduction of evidence in respect to certain facts and circumstances, the existence of which is presupposed by them. Many such facts and circumstances must necessarily exist, ■which, although entirely unrecorded, materially affect the na- ture and extent of a contract, and the situation of the parties ;^ and in respect to these, parol evidence is admitted. Thus, when it becomes material to ascertain the purpose for which a ■writing was executed, if not inconsistent with its terms, it may properly be proved by parol. ^ Where a contract is not reduced to writing, it is manifest that parol evidence is the only evi- dence which can be given, in respect to its nature, object, and extent.^ of A., and thus to charge A. as principal, although there is no intimation in the contract that B. was such agent. Lerned v. Johns, 9 Allen, 419 (1864). ' Myrick v. Dame, 9 Cush. 248 (1852). In a suit by the payee of a promissory note, against one who indorsed it in blank at the lime it was given, parol evidence is admissible to show the real nature of the trans- action. Riley v. Gerrish, 9 Cush. 104 (1851). •■ Lulzbacher v. Davidson, 34 N. Y. Superior Ct. Rep. 145 (1871). ^ Hartford Fire Ins. Co. v. Wilcox, 57 111. 180 (1870). ■' Griffiths V. Hardcnbergh, 41 N. Y. 464 (1869). ' Hutchins V. Hebbard, 34 N. Y. 24 (1865). ^ It is probable, also, that the rule excluding extrinsic evidence to afifect written instruments applies only to controversies between the parties to the contract, and that strangers or third persons may contradict or control the CHAP. XXI.J TO AFFECT WEITTEN AGREEMENTS. 799 § 822. Inasmuch as the terms of a written contract mani- festly contain a more deliberate and definite record of the in- tention and mutual understanding of the parties i than that loose talk which usually precedes a contract,^ the law has rightly insisted that the parties shall not contradict such an. instrument by parol evidence.^ Thus, where A. entered into a recitals in a contract, to which they are not parties. See Furbush v. Good- win, 25 N. H. 440 (1852) ; Eaton v. Alger, 2 Keyes, 41, 45 (1865) ;.Taylor V. Baldwin, 10 Barb. 587 (1850) ; Fuller v. Acker, 1 Hill, 473 (1841) ; Reynolds v. Magness, 2 Ired. 30 ; Woodman v. Eastman, 10 N. H. 359 ; Krider v. La£ferty, 1 AVhart. 314 ; Evans v. Wells, 22 Wend. 345. ' And parol evidence is inadmissible to show that the contract was dif- ferent from that expressed in the writings even of an unlettered person, who can neither read nor write, if the material parts of the writings were fully read and explained to the party before they were executed, and he fully understood their meaning and effect. Selden v. Myers, 20 How. 506 (1857) . ' See Carter v. Hamilton, 11 Barb. 147 ; Hakes v. Hotchkiss, 23 Vt. 231 ; Pollen v. Le Roy, 30 N. Y. 549 (1863) ; Fitch v. Woodruff & Beach Iron Works, 29 Conn. 82 (I860) ; Cook v. Combs, 39 N. H. 592 ; Perry v. Armstrong, 39 N. H. 683 (1859). It is only where a written contract is intended by the parties to contain their whole agreement, that oral evidence of previous negotiations is excluded. Harris v. Rickett, 4 H. & N. 1 (1859). And see Pacific Iron Works v. Ncwhall, 34 Conn. 69 (1867). But if a verbal agreement has been made previous to or contemporaneous with a written bill of sale of chattels, that the purchaser shall pay the price to a third person, creditor of the seller, such agreement will merge, and evidence thereof be inadmissible to vary the writing. Kelly v. Roberts, 40 N. Y.432 (1869). ' Lord Tenterden, in Kain v. Old, 2 B. & C. 634, says : " Where the whole matter passes in parol, all that passes may sometimes be taken together, as forming parcel of the contract, though not always, because matter talked of at the commencement of a bargain may be excluded by the language used at the termination. But if the contract be in the end reduced to writing, nothing which is not found in the writing can be considered as a part of the contract." See also Finney ». Bedford Commercial Ins. Co., 8 Met. 348; McLellan v. Cumberland Bank, 24 l\Ie. 566 ; Hodgdon v. Waldron, 9 N. H. 66 ; Sayre v. Peck, 1 Barb. 464 ; Shaw v. Shaw, 50 Me. 94 (1863) ; Doyle V. Di.xon, 12 Allen, 676. It is held that a bill of lading containing certain limitations of a carrier's liability does not operate to merge a verbal agreement concerning the carriage made before the execution of the bill of lading. Bostwick v. Bait. & O. R. Co., 60 N. Y. 76 (1872). In an action on » written agreement td pay a sum of money, evidence is inadmissible to show a previous oral agreement that the defendant 800 ADMISSIBILITY OF PAROL EVIDENCE [CHAP. XXI. ■written agreement to haul all the logs upon a certain lot to another place before a stated time, it was held, that he could not introduce evidence to show that at the time of making the contract he said that if there should not be snow enough he should leave them on the ground.'- So a formal bill of sale, absolute upon its face, cannot be proved by parol to have been on condition.^ So a contemporaneous oral warranty cannot be engrafted upon a complete and formal written instrument or should be allowed to deduct a sum of money, then due from ths plaintiff to him, from the next amount which should become due from him to the plaintiff. Wright v. Smith, 16 Gray, 499 (1860). If a purchase of a share in a ship is made by taking a bill of sale, absolute in its terms, and expressing a present sale, parol evidence is incompetent to show an agreement between the parties that the title should not rest in the purchaser until the completion of the repairs which were then making upon her ; but, as between the parties, and in defence to a claim by the vendor of an allowance for expenses of repairs, parol evidence is competent to show an agreement by him to pay the expenses himself. Rennell v. Kimball, 5 Allen, 356 (1862). So if a patent-right for making sewing-machines is conveyed by deed, the purchaser cannot prove by parol evidence that, at the time of the sale and prior to the execution of the deed, the seller war- ranted the machines made under the patent " to work well, and not drop stitches, and to do the various sewing of the family." Galpin v. Atwater, 29 Conn. 93 (1860). ' Hodgdon v. Waldron, 9 N. H. 66. ' Davis V. Bradley, 24 Vt. 55. A formal bill of sale, absolute in its terms and under seal, conveying personal property with covenants of war- ranty, cannot, in an action at law between the parties to it, be shown by parol evidence to have been intended only as collateral security. Harper v. Ross, 10 Allen, 332 (1865). A bill of parcel of goods, acknowledging the receipt of payment by note, is not conclusive evidence of the contract ; but parol evidence is competent to show that the sale was conditional, and that the title was to remain in the vendor until a note signed by responsible persons should be furnished to him. Hildreth v. O'Brien, 10 Allen, 104 (1865), citing and approving Hazard v. Loriug, 10 Cush. 2G7 ; Caswell w. Keith, 12 Gray, 351 (1859). And a bill in equity may be maintained to redeem shares in the capital stock of a corporation which have been trans- ferred by an instrument absolute in its terms, upon parol proof that iu reality the transfer was made only as collateral security for a debt. Newton V. Fay, 10 Allen, 506 (1865). So parol evidence is competent to show that - an assignment, absolute in terms^is intended as collateral security merely. Mulford V. Muller, 1 Keyes, 31 (1864). And parol evidence is competent in equity to prove that a deed of conveyance, absolute in fonn, was intended CHAP. XXI.J TO AFFECT WRITTEN AGREEMENTS. 801 bill of sale.^ But the law is otherwise as to informal instru- ments, such as a mere bill of parcels, containing merely the names of the parties, the amount of goods and prices, and a receipt of payment.^ So, also, in an action for use and occupa- tion, where an absolute lease had been given in writing, it was held, that parol evidence could not be admitted to show that the lessor said, on signing it, that it was not in accordance with her previous agreement, and that she did it upon the parol condition that a different lease should be substituted after- wards ; for this would be to change an absolute lease into a conditional one.^ So, where a contract of lease was shown by a as a mortgage only. Van Dusen v. Worrell, 3 Keyes, 311 (1867) ; Bab- cock V. Wyman, 19 How. 289 (1856). So to prove a trust, even if it varies or contradicts the terms of a deed absolute on its face. Hayden v. Denslow, 27 Conn. 335 (1858); Kelley v. Hill, 50 Me. 470 (1862). Courts of equity will open a written contract, and receive parol evidence to let in an equity arising from facts perfectly distinct from the construction of the instrument itself. Tucker v. Madden, 44 Me. 206 (1857). But generally speaking, conversations controlling or changing the stipulations in written contracts are, in the absence of fraud, no more received in a court of equity than in a court of law. Willard v. Tayloe, 8 Wall. 558 (1869) . ' Boardman v. Spooner, 13 Allen, 361. And see Warren v. Wheeler, 8 Met. 97 ; Button v. Gerrish, 9 Cush. 89 ; Raymond v. Raymond, 10 Cush. 134 ; Howe v. Walker, 4 Gray, .318 ; Galpin v. Atwater, 29 Conn. 93 (1860), reviewing the cases. ' Dunham v. Barnes, 9 Allen, 352 (1864) ; Hazard v. Loring, 10 Cush. 267. In the latter case, Bigelow, J., said: "The rule that parol evidence is not admissible to vary, explain, or control a written contract, is not applicable to mere bills of parcels, made in the usual form, in which nothing appears but the name of the vendor and vendee, the articles purchased with the prices affixed, and a receipt of payment by the vendor. These form an exception to the general rule of evidence, being informal documents, intended only to specify prices, quantities, and a receipt of payment, and not used or designed to embody and set out the terms and conditions of a contract of bargain and sale. They are in the nature of receipts, and are always open to evidence, which proves the real terms upon which the agree- ment of sale was made between the parties. 1 Cowen & Hill's note to Phil, on Evid. 385, n. 229 ; 2 ib. 603, n. 295 ; Harris v. Johnston, 3 Cranch, 311 ; Wallace v. Rogers, 2 N. H. 506; Bradford v. Manly, 13 Mass. 139; Fletcher v. Willard, 14 Pick. 464." A bill of parcels may be shown by parol evidence to have been given by way of mortgage only. Caswell v. Keith, 12 Gray, 351 (1859). ' Browning v. Haskell, 22 Pick. 310. See also Keyes v. Dearborn, 12 N. H. 62. VOL. I. 51 802 ADMISSIBILITY OP PAROL EVIDENCE [CHAP. XXI. letter from the lessor and an indorsement thereon by one of the lessees. The lessor there offered to prove the terms of the lease by parol evidence, but it was excluded on the ground that the agreement appeared to be in writing, and parol testi- mony was inadmissible to vary or modify its terms.^ So a written agreement for drawing stone " at the rate of one dollar and twenty-five cents per load of two tons each," fixes the rate by the ton, without regard to the number of tons actually drawn in one load ; and cannot be varied by parol evi- dence.^ So evidence of an oral agreement of the mortgagor and mortgagee, immediately after the delivery of a mort- gage of personal property, that the mortgagor shall retain the right to sell or exchange the property, is inadmissible to con- trol the construction or effect of the mortgage.^ So, in an action to recover damages for a breach of a covenant against incumbrances, by reason of the existence of a right in a third person to cut and remove standing trees, oral evidence is inad- missible to prove that the parties both intended to except this right from the operation of the covenant, and that it was mutually understood between them that the trees were not to pass with the land.* So it is not competent for the acceptor of a bill of exchange to show by parol that he accepted the bill on a condition then agreed on between him and the maker, that on a certain event which occurred the maker would renew the bill.^ § 823. But in consideration of the difficulty of comprehend- ing, within the terms of a contract, all that the parties intend, and from the mischief which might often result from too rigid and literal an interpretation thereof, a modification has been 1 Mallory v. Tioga Railroad, 3 Keyes, 354 (1867) « Huntley v. Woodward, 9 Gray, 86 (1857). » Clark t>. Houghton, 12 Gray, 38 (1858). * Spurr V. Andrew, 6 Allen, 420 (1863). ' Young V. Austen, Law R. 4 C. P. 553 (1869). So parol evidence is inadmissible to show that the drawer of a bill of exchange, at the time he signed the same, entered into a contract under which the payment was to be made at a different time and in a different manner from that which the bill imports. Abrey v. Crux, Law R. 5 C. P. 37 (1869). CHAP. XXI.] TO AFFECT WRITTEN AGREEMENTS. 803 introduced in cases where the language employed is either technical, ambiguous, or obscure. In such cases parol evi- dence is admissible not to contradict or vary the terms of a written contract, but either to explain and interpret what were otherwise doubtful; or to supply some deficiency.^ Thus, parol evidence of usage is admissible to explain the terms of a contract.2 So, the testimony of experts is admitted to explain technical terms, either local or provincial, or to interpret and decipher characters and signs, or to translate from foreign languages.^ So, also, contemporaneous writings, relating to the same subject-matter, are admissible in evidence.* And parol testimony is admissible to show that a written contract was delivered conditionally, to operate as an agreement only upon the happening of a certain contingency,^ or not until the happening of a given event,^ but not that a bill or note should be renewed ; "^ nor for the purpose of postponing 1 1 Greenl. on Evid. § 278, et seq. See also Doe e. Hiscocks, 5 M. & W. 363, 367, where the matter is ably discussed by Lord Abinger ; Hoadly v. M'Laine, 10 Bing. 482 ; 4 Moo. & S. 340 ; Hasbrook v. Pad- dock, 1 Barb. 635. The rule is very well stated by Wells, J., in Stoops v. Smith, 100 Mass. 63. In an action on a written contract for the manufacture and delivery of " horn chains," oral evidence is admissible to show that the parties intended by "horn chains" chains made of hoof and horn. Swett ». Shumway, 102 Mass. 365 (1869). 2 Plain and certain words of grant or contract cannot be varied or con- trolled by proof of a usage or custom at variance with their grammatical and obvious meaning. Goodyear v. Ogden, 4 Hill, 104 ; Mutual Safety Ins. Co. V. Hone, 2 Comst. 235 ; Swamscot Machine Co. v. Partridge, 5 Post. 369 ; Linsley v. Lovely, 26 Vt. 123; Cooper v. Purvis, 1 Jones (N. C), 141; Stillman v. Hurd, 10 Tex. 109 ; Phillipps v. Briard, 1 H. & N. 21. » 1 Greenl. on Evid. § 280, 281, 292 ; 2 Stark. Evid. 565 ; Birch ». Depeyster, 1 Stark. 210, and cases there cited; Smith v. Wilson, 3 B. & Ad. 728 ; Astor v. Union Ins. Co., 7 Cow. 202. When an ambiguity exists in a bought and sold note from its describing an article which does not exist, evidence by an expert to show how the article mentioned therein is ordinarily spoken of in trade and conversation, is competent in explanation of the ambiguity. Pollen v. Le Roy, 30 N. Y. 549 (1863). * Leeds v. Lancashire, 2 Camp. 205 ; Hartley u. Wilkinson, 4 Camp. 127 ; 1 Greenl. on Evid. § 283, and cases cited. = Pym ». Campbell, 6 El. & B. 370 (1856) ; 36 Eng. Law & Eq. 91. « Wallis B. Littell, 11 C. B. (n. s.) 369. And see Foster ». Jolly, 1 C. M. & R. 703. ' Young V. Austen, Law R. 4 C. P. 553. And see Hoare v. Graham, 3 Camp. 67. 804 ADMISSIBILITY OP PAROL EVIDENCE [CHAP. XXL the time for payment out of a fund within the control of the maker of the note.^ So, also, parol evidence may be given to explain facts and circumstances to which the contract relates ; ^ and persons or property mentioned therein may be identified when designated by nicknames, by which they are not com- monly known.^ So, also, oral evidence is competent to show that a mortgage, expressed to be to secure payment of a stated amount, was only given to secure the mortgagee for indorsing a note for the mortgagor, made at the same time, and for the ^ Free v. Hawkins, 8 Taunt. 92. An oral agreement is not admissible to show that a bill or note, absolute on its face, was not to be paid until the plaintilf had sold and applied thereon certain securities which the defendant had delivered him at the time of the bill. Abrcy v. Crux, Law R. 5 C. P. 37 (1869). And see Young v. Austen, Law R. -i C. P. 553 ; distinguished by Castrique v. Buttigieg, 10 Moore, P. C. 94. '^ Under an agreement in writing to convey "the wharf and flats occu- pied by T. and owned by H.," parol evidence is admissible to show the extent of the land occupied by T. and owned by H. at the time of the agree- ment. Gerrish v. Towne, 3 Gray, 82 (1854). A written lease of the " Adams House " may be proved by parol to have been intended to include only so much of the building as was fitted up as a hotel, by the name of the "Adams House," and not the separate shops which occupied the whole of the ground floor except the entrance to the hotel. Sargent v. Adams, 3 Gray, 7j! (1854). A deed of a trait of land, " known by the name of the mill spot," maybe explained by parol evidence of what "the mill spot" was commonly reputed, at and before the time of the execution of the deed, to include. Woods v. Sawin, 4 Gray, 322 (1.S55). A description in a written contract of " a certain tract of land, called Mount Hope, containing about forty acres," may be shown by evidence of the acts of the parties to include a tract of seventy acres, known by that name to the parties. Old Colony Railroad Corp. i: Evans, 6 Gray, 25 (1S56). And see Emery !). Webster, 42 Me. 204 (1856). 3 Edge V. Salisbury, Ambl. 70 ; Baylis v. Attorney-General, 2 Atk. 239 ; Goodingc v. Goodinge, 1 Ves. 231 ; Uoe v. Hiscocks, 6 M. & W. 363, 3(17 ; Jeacock v. Falkcner, 1 Bro. C. C. 295; Ponnereau v. Poyntz, ib. 473; JMackell v. Winter, 3 ^'es. 540 ; Lane v. Earl Stanhope, 6 T. R. 345 ; Doe V. PLithwaite, 3 B. & Al. 632; 1 Greenl. on Evid. § 288; Woods v. Sawin, 4 Gray, 322; Noonan v. Lee, 2 Black, 499 (lsr,2) ; Sturtevant v. Randall, 53 Me. 149 (1865) ; Waring v. Ayres, 40 N. Y. 357 (1869) ; Ben- nett r P.ercc, 28 Conn. 315 (1850) ; Emery r. Web.-ter, 42 Me. 204 (1856) ; Pope r. IMachias AVater Power Co., 62 Me. 535 (1864). Parol evidence is admissible to identify the subjcct-njatter, and show what the grantor intended by " the west half of lot No. 76." Pettit v. Shepard, 32 X. Y. 97 (1865). CHAP. XXI.] TO AFFECT WRITTEN AGREEMENTS. 805 same amount, as the mortgage.! So, also, if there be an am- biguity as to which of two or more persons or things be in- tended, it may be elucidated by parol evidence ; or, if there be a declaration by one party, assented to by the other, of the meaning intended to be given to certain terms or clauses, when such term or clause is obscure or ambiguous,^ parol evidence of such fact may be given. So, also, whatever goes to limit the terms of a contract may be given in evidence ; as printed rules on the walls of a horse bazaar, limiting the vendor's liability, on a warranty of a horse, to a certain time.^ So, where a broker made an entry of a sale in his books without mention- ing that it was a sale by sample, it was held that parol evi- dence of such fact was admissible, it appearing that no bought and sold note had been given.* So, also, a new agreement in respect to the subject-matter of the contract,^ and additional thereto,^ may be proved by parol, if it do not contradict the I Kimball v. Myers, 21 Mich. 276 (1870). ^ I Greoul. on Evid. § 28S, and cases cited; 1 PhiL & Am. on Evid. 732 ; Doe V. Holtom, 4 Ad. & El. 76 ; Sanford v. Raikes, 1 Meriv. 646 ; Colbourn K. Dawson, 10 C. B. 765 ; 4 Eng. Law & Eq. 378 ; Goldshede r. Swan, 1 Exch. 154. Oral evidence is admissible to show that the word "barrel," used in a written contract, was meant by both parties to be a certain number of gallons. Miller v. Stevens, 100 Mass. 518 (1868). ' Bywater v. Richardson, 1 Ad. & El. 508. See also Murley v. M'Der- mott, 3 Kev. & Per. 356 ; Jeffery v. Walton, 1 Stark. 267. See Story on Agency, § 79. ^ Waring v. Mason, 18 Wend. 425. And see Syers v. Jonas, 2 Exch. 111. In a sale in writing, oral evidence is admissible to show that the sale was by sample, and that the article delivered did not correspond with the sample. Pike v. Fay, 101 Mass. 134 (1869). In an action to enforce a contract for the sale of goods, the only legal evidence of which is an entry in the books of a broker employed to make this single contract, parol evi- dence is not competent to show that the contract thus stated, if within the broker's authority, was different from the contract actually made through him ; but is admissible to show the extent of an agent's authority, and that the contract as thus reduced to writing differs from that which the broker was authorized to make. Coddington v. Goddard, 16 Gray, 436 (1860). » See Small v. Jenkms, 16 Gray, 156 (1860). ^ Thus parol evidence is admissible to show that, subsequent to the date of the contract, and before a breach of it, the parties made a new oral agreement, on a new and valuable consideration, enlarging the time of per- formance, and varying its terms. Emerson v. Slater, 22 How. 28 (1859),. an important case, in which the authorities are carefully examined. 806 ADMISSIBILITY OF PAEOL EVIDENCE [CHAP. XXI. terms of the original agreement.^ Thus, where A., by a writ- ten instrument, conveyed property to B. in consideration of a certain sum paid therefor, an additional oral agreement may be shown to repay the sum, on the happening of a certain event.^ So, the time of performance of an agreement necessarily made in writing under the statute of frauds, may be proved to have been enlarged by a subsequent oral agreement.^ So parol evidence of a verbal agreement is competent, altliough contracts or other instruments in writing have been executed in pursu- ance of such agreement, and by way of partial performance thereof.* So, where the plaintiff conveyed to defendant a house by deed with a covenant against incumbrances, and oc- cupied it afterwards for a certain time, parol evidence that the plaintiff was to possess it rent free, and that defendant agreed to pay the taxes assessed before the conveyance, is not contra- dictory to the deed, and is admissible.^ So parol evidence is admissible to correct an error in the name of the payee of a written order, where it is so connected with the testimony that the real owner may be clearly ascertained.^ § 824. Upon the same principle parol evidence of usage is permitted " to annex citizens,^' as it is termed ; that is, to 1 Lapham v. WTnipple, 8 Met. 59 ; Brigbara v. Rogers, 17 Mass. 573 Blanchard c. Trim, .38 N. Y. 225 ; Clark v. Merriam, 25 Conn. 576 (1857) Miles u. Roberts, 34 N. H. 215 (1866) ; Seago v. Deane, 4 Bing. 459 Franklin v. Long, 7 Gill & J. 407. Parol evidence is competent to show a special contemporaneous agreement to charge nothing for services to be rendered by one who was not an attorney at law, but was " authorized and employed " by a written power of attorney to manage and defend a suit at law. Joannes v. Mudge, 6 Allen, 245 (1863). Parol evidence is admissible if it does not contradict or vary the terms of a written contract, but only makes an addition to it. Malpas ». The London & S. AV. Railway Co., Law R. 1 C. P. 336 (1866). Thus, where the defendant was indebted to the plaintiff on a note, and at his request the plaintiff discharged him from the debt by an instrument under seal, parol evidence was held admissible on the part of the plaintiff to prove, that before the discharge was executed, the defendant promised that if the plaintiff would execute it he would pay the amount due by the note with interest within two years. Clarke v. Tap- pin, 32 Conn. 66 (1864). " Lapham v. Whipple, 8 Met. 59. ' Stearns v. Hall, 9 Cush. 3L * Barker v. Bradley, 42 N. Y. 316 (1870). » Hersey v. VerriU, 39 Me. 271 (1855). « Jacobs V. Benson, 39 Me. 132 (1856). CHAP. XXI.] TO AFFECT WRITTEN AGREEMENTS. 807 show those incidents and accessories which impliedly accom- pany the subject-matter of the agreement.^ Thus, a lessee, by deed, may introduce evidence of a local custom of the coun- try, by which he is entitled to an away-going crop, although no such right be reserved in the deed ;2 for the custom does not contradict the express provisions of the deed, but only supplies evidence of the intention of the parties in respect to an im- plied and incidental right growing out of the contract. So, although a contract for the sale and delivery of specific articles is in writing, in an action to recover damages for its breach, the fact that at the time of making it the defendant was noti- fied by the plaintiff of his object in entering into it, and that it was to enable him to fulfil a previous agreement with another party, may be proved by parol, as bearing on the question of damages.^ So, also, many conditions are affixed by mercantile usage to the taking of promissory notes and bills of exchange ; and the usages of banks, known to the parties to a contract, are recognized as proper evidence to explain the intention of the parties.* But no evidence will be admitted of any custom which is inconsistent with the express terms of the contract itself.^ Or, as it has been elsewhere stated, parol evidence of usage is generally admissible to enable the court to arrive at the real meaning of the parties, who are presumed to have contracted in conformity with it; but it is not admissible to contradict or vary the express stipulations restricting or en- larging the exercise and enjoyment of the customary right.^ ' 1 Greenl. on Evid. § 294. s Wigglesworth v. Dallison, 1 Doug. 201 ; Hughes v. Gordon, 1 Bligh, 287 ; Senior v. Armytage, Holt, N. P. 197 ; Hutton v. Warren, 1 M. & W. 466 ; White v. Sayer, Palm. 211. = Messmore v. New York Shot and Lead Co., 40 N. Y. 422 (1869). * Blanchard v. Hilliard, 11 Mass. 85; Eenner v. Bank of Columbia, 9 Wheat. 681 ; Bank of Washington v. Triplett, 1 Peters, 25 ; City Bank v. Cutter, 3 Pick. 414. Where negotiable paper is drawn to a person by name, with addition of " cashier " to his name, but with no designation of the par- ticular bank of which he was cashier, parol evidence is admissible to show that he was the ca.shier of a bank which is plaintiff in the suit, and that in taking the paper he was acting as cashier and agent of that corporation. Baldwin V. Bank of Newbury, 1 Wall. 234 (1863). ' Yeats V. Pim, Holt, N. P. 95, and note ; Holding v. Pigott, 7 Bing. 465, 474; Blackett v. Royal Exch. Ass. Co., 2 Or. & J. 244. ' Bliven V. N. E. Screw Co., 23 How. 420 (1859). 808 ADMISSIBILITY OP PAROL EVIDENCE [CHAP. XXI. § 825. Parol evidence will also be admitted to show that an instrument is void, and never had any legal existence or bind- ing force. ^ Thus, fraud, illegality of the subject-matter, want of delivery,^ duress, incapacity either in fact or in law, and whatever would vitiate the contract, ah initio, may be given in evidence to invalidate a written contract.^ But evidence to vary or impair the legal effect of a contract, where fraud or want of good faith is not alleged, is inadmissible.* § 826. Parol evidence is often admissible to show that one signer to a note or other contract, who is apparently a princi- pal, was in fact only a surety, and known to be such by the party seeking to hold him as principal.^ § 827. So, also, recitals of facts in an instrument may be contradicted or explained, where the party is not estopped to deny them. As, for instance, where a charter-party was dated February 6th, and conditioned that the ship should sail on or before February 12th, parol evidence was admitted to show that it was not executed until after the day upon which she was to sail, and that the condition was therefore waived.^ So, also, parol evidence is admissible to prove that a strict com- pliance with the terms of the contract, or with certain legal ' Thus parol evidence is admissible to show that certain subscriptions were confidential in character, and therefore fraudulent. N. Y. Exchange Co. V. De Wolf, 31 N. Y. 273 (1865). "^ Parol evidence is admissible to show that an instrument was inchoate merely, and was delivered as an escrow to a third person. Sweet v. Stevens, 7R. I. 37.5 (1863). ' 2 Starkie on Evid. 340; 1 Greenl. on Evid. § 284, and cases cited; Buckler v. IMillerd, 2 Vent. 107 ; Stouflfer v. Latshaw, 2 Watts, 165 ; Van Valkenburgh v. Rouk, 12 Johns. 338; Webster u. Woodford, 3 D.ay, 90; Barrett y. Bu.xton, 2 Aik. 167; Goodwin v. Hubbard, 15 Mass. 219; Boyce V. Grundy, 3 Peters, 219 ; Johnson v. Miln, 14 Wend. 195 ; Tayloe v. Riggs, 1 Peters, 591. ^ Baltcs V. Ripp, 3 Kcyes, 210 (1866). " See Davis v. Barrington, 10 Fost. 517 (1855). « Hall V. Cazenove, 4 East, 477 ; Tait on Evid. 332 ; Breck v. Cole, 4 Sandf. 79 ; Abrams v. Pomeroy, 13 111. 133. Unless the date is made a part of the agreement itself, as it is in a note payable sixty days after date. Joseph V. Bigelow, 4 Cush. 82. Parol evidence of an erroneous date, in a mortgage of personal property, not under seal, is admissible. Partridge v. Swazey, 46 Me. 414 (1859). CHAP. XXI.] TO AFFECT WEITTEN AGREEMENTS. 809 requisitions, was waived. Thus, a waiver of notice by the maker or indorser of a promissory note may be proved ; ^ or a change of the place of presentment ; or an enlargement of the time ; or a total remission of the whole claim by the holder. So, also, parol evidence may be given to prove an entirely new agreement in substitution for the original,^ or in addition to it ; ^ or to prove an insufficient, or additional,* or illegal considera- tion.^ Thus, parol evidence is admissible to show that at the time a promissory note was given by A. to B. for money lent, an agreement was made to pay a certain sum as extra interest, and that all the payments made by A. were for the extra in- terest, and not upon the note.^ ' Patterson v. Vose, 43 Me. 652 (1857). Waiver of a condition in a deed may be proved by parol evidence. Leathe v. Bullard, 8 Gray, 545 (1857). ^ Thus, a tenant gave the demandant two deeds, each of an undivided half of premises, the whole of which was demanded, and the tenant was per- mitted to show by parol evidence that the second deed was, by agreement of the parties thereto, merely a substitute for the first deed, on account of some real or supposed defect therein. Fisk v. Fisk, 12 Gush. 150 (1853). ^ Thus, although a bill of sale of a vessel, absolute in its terms, expresses a certain sum as the consideration, the vendor may prove an oral agreement to pay an additional sum upon a certain contingency, and recover such sum upon the happening of the event. Clark v. Deshon, 12 Cush. 689 (1853). An agreement in writing, by which a mortgagee agrees to deliver up the mortgage note to be cancelled, upon the doing of certain things by the mort- gagor, " which settles all accounts with said mortgagor," may be shown by parol evidence to have been intended as a settlement of all claims for prop- erty taken from the premises by the mortgagor. Hemenway v. Bassett, ISGray, 378 (1859). , * Wheeler v. Billings, 38 N. Y. 263 (1868) ; Miller u. Goodwin, 8 Gray, 542 (1857) . Parol proof of the actual consideration of a sale is admissible, although a bill of sale is executed by the seller, and a bond by the pur- chaser, as part of the same transaction, if neither of them states the terms and conditions of the sale. Paget v. Cook, 1 Allen, 622 (1861). ' Story on Agency, § 79, 80 ; Keating v. Price, 1 Johns. Cas. 22 ; Mills ». Wyman, 3 Pick. 207 ; 1 Greenl. on Evid. § 304 ; 1 Phil. & Am. on Evid. 767 ; Ballard v. Walker, 3 Johns. Cas. 60 ; Pothier on Oblig. pt. 3, ch. 6, art. 2, n. 636 ; Munroe v. Perkins, 9 Pick. 298 ; Lattimore v. Harsen, 14 Johns. .380; White v. Parkin, 12 East, 578; Hotham v. East Ind. Co., 1 T. R. 638 ; Blood v. Goodrich, 9 Wend. 68 ; Youqua v. Nixon, Peters, C. C. 221. ' Kohan V. Hanson, 11 Cush. 44 (1863). 810 ADMISSIBILITY OF PAROL EVIDENCE [CHAP. XXI. § 828. There are two species of ambiguity, namely, that which is apparent on the face of the instrument, and which cannot be rendered certain by tlie evidence of collateral facts and surrounding circumstances, admissible under the rules of construction, and which is called ambiguitas patens ; ^ and that which, although apparently certain and without ambiguity, for any thing that appears upon the face of the deed or instru- ment, is rendered ambiguous by extrinsic and collateral matter, out of the deed, which is called ambiguitas latens. A patent ambiguity cannot be explained by parol evidence ; ^ or, in the words of Lord Bacon : '■^Ambiguitas patens is never holpen by averment ; and the reason is, because the law will not couple and mingle matter of specialty, which is of the higher account, with matter of averment, which is of inferior account in law ; for that were to make all deeds hollow and subject to aver- ments, and so in effect that to pass without deed which the law appointeth shall not pass but by deed." Where the lan- guage descriptive of property or persons is uncertain^ and obscure, it is a latent ambiguity, which can be explained by evidence.* But where the intention of the party is ambigu- ' 1 Greenl. on Evid. § 297, 300 ; 1 Phil. Evid. ch. 10. ' Doe V. Westlake, 4 B. & Al. 57 ; Doe v. Hiscocks, 5 M. & W. 363 ; Cheyney's Case, 5 Co. 68 ; Strode v. Russel, 2 Vern. 624 ; Harris V. Bishop of Lincoln, 2 P. Wms. 136; Hitchin v. Groom, 5 C. B. 520; Blossburg & Corning Railroad Co. v. Tioga Railroad Co., 1 Keyes, 486 (1864). But where it is necessary to determine the date of a promissory note in suit, and the name of the month is so inartificially written that, upon inspection, the presiding judge cannot determine whether it should be read June or January, extraneous evidence is admissible to show the true date. Fenderson v. Owen, 54 Me. 372 (1867). ^ Thus, a testator devised property to "my nephew, Joseph Grant." His brother had a son named Joseph Grant, and his wife's brother had a son of the same name. There being a. latent ambiguity, parol evidence was admitted to show which Joseph Grant was meant by the testator. Grant V. Grant, Law R. 6 C. P. 380, 727 (1870). ' Thus, goods were sent by sea to be delivered " at the Essex Railroad Wharf." The Essex Railroad owned but one wharf, which was by the side of their road, above two drawbridges. Parol evidence was admitted to prove that a wharf called Phillips's Wharf, below the bridges, was used by the railroad to receive merchandise at, and was generally known as the Essex Railroad Wharf, and was the wharf intended by the parties. Sutton V. Bowker, 5 Gray, 416 (1855). CHAP, XXI.] TO AFFECT WRITTEN AGREEMENTS. 811 ously expressed, but the property of persons clearly described, it is a patent ambiguity, and parol evidence will not be allowed. " Therefore, if a man give land to I. D., and I. S., et hceredibus, and do not limit to whether of their heirs, it shall not be sup- plied by averment to whether of them the intention was the inheritance should be limited. But if it be amhiguitas latens, then otherwise it is ; as if I grant my manor of S. to J. F. and his heirs, here appeareth no ambiguity at all. But if the truth be, that I have the manors both of South S. and North S., this ambiguity is matter of fact ; and, therefore, it shall be holpen by averment whether of them it was that the party in- tended should pass." ^ § 829. In the case of a latent ambiguity the actions of the parties previous to and contemporaneous with the contract are admissible to explain it. As, where a bargain is made for wheat, generally, without stating the quality, parol evidence may be given that the previous usage of the parties was to furnish wheat of a particular quality.^ So, where a party agreed in writing to pay partly in cash and in part by an order, parol evidence is admissible to show that the order was to be for sash and blinds, and not money. ^ So, also, a receipt for money may be explained by showing that something short of the terms was intended, even though it read in full of all de- mands ; * it being conclusive only as to the amount paid, and ' Bacon's Law Tracts, p. 99, 100. See also Morris v. Edwards, 1 Ohio, 189; 2 Starkie on Evid. 546. Thus, a testator devised " all my estate in Shropshire, called Ashford Hall," and parol evidence was admitted to prove the extent of the lands constituting the estate. Ricketts v. Tnrquand, 1 H.L. 0.472(1848). ' 1 Powell on Cont. 372, 384; Graves v. Key, 3 B. & Ad. 313. The words " more or less" in a broker's note for the sale of goods as follows: "Sold to N. W. for account of S. C, five hundred bundles, more or less, gunny bags," do not create a latent ambiguity, and parol evidence is inad- missible to show the understanding between the parties. Cabot v. Winsor, 1 Allen, 646 (1861). » Hinnemann v. Eosenback, 39 N. Y. 98 (1868) ' Richardson v. Beede, 43 Me. 161 (1857). But a written receipt for money, showing that it was received in full payment and satisfaction for all claim for damages and costs in a suit, cannot be controlled or varied by parol evidence. Brown v. Cambridge, 3 Allen, 474 (1862). And see Bus- well ». Poineer, 37 N. T. 312 (1867). C. transferred to E. a note pay- 812 ADMISSIBILITY OP PAROL EVIDENCE [CHAP. XXI, not being evidence of a contract, but only of payment.^ But parol evidence is not admissible to show that a promissory note in the usual form was intended as a receipt, and that the sum for which the note was given was in fact a payment by the payee to the maker of an antecedent debt, and not a loan or advancement.^ So parol evidence is inadmissible to prove that a promissory note was intended as a receipt fqr money put into the defendant's hands, by the payee, to be loaned for him.^ So, an order for the payment of money in the hands of the payee, or his assignee, is evidence in writing of his title to the payment, which cannot be varied or contradicted by parol evi- dence.* But a common invoice, or bill of parcels, as " A. B. bought of C. D., &c.," is not such a contract, but that oral evidence is admissible to show what the real contract was, and that C. D. was not in fact the seller of all the articles mentioned.^ § 830. Ambiguity of language is, however, to be distin- guished from unintelligibility and inaccuracy,^ which latter able to bearer, and took E.'s receipt for it, agreeing ' ' to account for the same on demand." In an action by E. against the maker, it was held that the receipt was not in itself a contract of baihnent, and that the exclusion of the parol testimony of the parties to the contract, to prove its nature, was erroneous. Eaton v. Alger, 2 Keyes, 41 (1865). So, while a bill of lading, in so far as it is a contract, cannot be explained by parol, yet being a receipt as well as a contract, it may in that regard be so explained, especially when used as the foundation of a suit between the original parties to it. The Lady Franklin, 8 Wall. 32.5 (1868) . ' Tucker v. Maxwell, 11 Mass. 143 ; Johnson v. Johnson, ib. 359, 363 ; Johnson v. Weed, 9 Johns. 310 ; Putnam v. Lewis, 8 ib. 389 ; May v. Bab- cock, 4 Ohio, 346 ; Wilkinson v. Scott, 17 Mass. 249 ; Delaney v. Towns, 1 Allen, 407 (1861). If the facts of a case taken together exhibit no latent ambiguity, parol evidence is inadmissible. Dascomb v. Sartell, 1 Allen, 281 (1861). " BiUings v. Billings, 10 Cush. 178 (1852) ; City Bank v. Adams, 45 Me. 455 (1858). = Shaw r. Shaw, 50 Me. 94 (1863). ■• Parker v. Syracuse, 31 N. Y. 376 (1865). ' Holding V. Elliott, 5 H. & N. 117. " Thus, a committee was appointed to assign dower in lot 4, and an un- divided half of lot 3. They assigned fifty acres " of the south-westerly side of said lots, and it was held that there was no ambiguity in the terms of the assignment, and that parol evidence was inadmissible to show that all the THAP. XXI.] TO AFFECT WRITTEN AGREEMENTS. 813 may render a contract void.^ A word may often be unin- telligible to one person when it is intelligible to another, and may be exceedingly inaccurate, without being ambigu- 0US.2 Thus, in the will of Nollekins, the sculptor, " all the marble in the yard, the tools in the shop, bankers, mod, tools for carving," were devised to Alex. Goblet. A contro- versy arose on the word "mod," which, although inaccurate, and to inexperienced persons, perhaps, unintelligible, was recognized by sculptors as a common abbreviation for models, and such the court decided to be its meaning.^ Words can- not be said to be ambiguous unless their signification seem doubtful and uncertain to persons of competent skill and knowledge to understand them.* And if the terms are clear, evidence is not admissible that they were understood in a different sense. Thus, a recorded note of the directors of a corporation, being a written instrument, must be construed by its terms alone, with reference to the subject-matter to which it applies ; and parol evidence is not admissible of the senso in which it was understood by a director.^ So parol evidence is not admissible to determine the intention of the parties to a deed. That is to be gathered from the deed itself.^ parties understood the part assigned to be the easterly half of lot 3. Young V. Gregory, 46 Me. 475 (1859). ' See Nichols v. Williams, 7 C. E. Green, 63 (1871). ' Wigram on Interpretation of Wills, 174, 175, pi. 200-204; 1 Greenl. on Evid. § 298. ' Goblet V. Beechey, 3 Sim. 24 ; Wigram on the Interpretation of Wills, 179, 185. i 1 Greenl. on Evid. § 298. « Gould V. Norfolk Lead Co., 9 Gush. 338 (1852). The foUowing lan- guage in an agreement, ' ' containing, twice as many rods as there is to " an- other tract, is of such plain and obvious import that it cannot be controlled by parol evidence of the intention of the parties. Fitzgerald v. Clark, 6 Gray, 393 (1856). « Rogers v. McPheters, 40 Me. 114 (1855) ; Whitney v. Slayton, 40 Me. 224 (1855). KF 801 S88 187U ^ Author Vol, Stroy, William Wetmore Title Copy A Treatise on the law of v- Date Borrower's Name