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Commercial Precedents 
 
 SELECTED FROM THE COLUMN OP 
 
 REPLIES AMD DECISIONS 
 
 OP THE 
 
 NEW YORK 
 
 JOURNAL OF COMMERCE, 
 
 — X— 
 
 AJSr ESSENTIAL WORK OF REFERENCE FOR 
 EVERY BUSINESS MAN 
 
 — X — 
 
 -BY- 
 CHARLES PUTZEL, OP THE NE\r York Bar, and H. A. BAHR 
 
 HARTFORD, CONN. : 
 
 AMERICAN PUBLISHING COMPANY. 
 1887. 
 
Copyright, 1881. 
 CHARLES PUTZEL and H. A. BAHR 
 
TO 
 
 DAVID M. STONE, 
 
 EDITOR-IN-CHIEF OF 
 
 -THE NEW YORK JOURNAL OF COMMERCE," 
 this volume is 
 Respectfully Dedicated. 
 
PREFACE. 
 
 " The commercial, equally with other branches of the common law, 
 grew up out of personal usage, and the principle of growth or adapta- 
 tion to the wants of the commercial world, remain inherent in the 
 system," Estimating the importance of this book with reference to 
 the amount of property afloat in the shape of bills, notes, and checks, 
 the magnitude of our shipping interests, the complexity of our busi- 
 ness in all its branches, there never has been a time when it called for 
 greater accuracy and discrimination, or invited the attention of mer- 
 chants and professional men with motives of equal urgency. 
 
 ^^The New York Jownal of Commerce,^^ for more than a quarter of a 
 century, has been the recognized authority throughout this broad land, 
 in commercial matters viewed in the most comprehensive sense of the 
 term. Among the departments of this journal, its editor, David M. 
 Stone, Esq., has for many years devoted one or more columns daily, 
 owing to the demands of many thousand subscribers, to answering the 
 questions of these subscribers on the important and every-day usages 
 and principles employed in every known business of the civilized 
 world. From these columns known as ''Replies and Decisions," we 
 have selected with great care and with the combined judgment of a 
 lawyer and of a business man, those which are in vogue to day and of 
 vital importance to every business man as well as to those who have 
 relations witli business men, particularly the lawyer. 
 
 The selections comprehending the usages and principles in practice 
 in the numberless branches of business, are arranged alphabetically, 
 according to the subject-matter, and under their appropriate heads and 
 subdivisions, together with a careful index alphabetically arranged 
 and subdivided, so as to enable the most indifferent reader to find the 
 question or subject-matter desired, giving the number of the page, and 
 the number of the question on the page. "We have avoided repetition 
 of matter, and presented the " Replies and Decisions," as they appeared 
 in "The Journal of Commerce," and hence disclaim any originality for 
 the subject-matter. Our selections from the files of " The New York 
 
 V 
 
7i 
 
 PREFACE. 
 
 Journal of Commerce," are taken for a number of years sufficient to 
 embrace the many heads or subject-matter as appear in the table oi 
 contents. They contain the usage, principles, and authorities, and are 
 free from technical language save where technical terms are absolutely 
 necessary, and so as to be understood by every one. This book will 
 by no means rank among commercial law books, for it does not con* 
 tain the principle or the theoretical basis of such a work, and it is far 
 from its province. It is the actual, applied and every -day usage ot 
 commerce which makes this an essential work of reference for every 
 man in business, and applicable to all the states throughout the union, 
 for it is the common law, and wheresoever the statutes of a particular 
 state govern the question, the name of the state is given in the body of 
 the book, as well as in the index. Where the matter should appear 
 under more than one head in the index, it is cross-indexed, so as to 
 insure its being readily found as well as to avoid repetition in the body 
 of the book. The arrangement of the subject-matter, including the 
 classification of topics and a complete index of every question, will 
 be found to be highly practical in its simplicity. 
 
 From the encouragement given by bankers, exporters and import- 
 ers, manufacturers, and lawyers, to this undertaking, it is to be hoped 
 that this compilation may be of great and general use to the business 
 and professional men throughout the United States. 
 
 CHARLES PUTZEL, 
 H. A. BAHR. 
 
 New York. 
 
TABLE OF CONTENTS. 
 
 (see also the index in back part of this volume.) 
 
 Page. 
 
 Assignments, .... 9 
 Attachments, . . . .11 
 Banks, National, State, and 
 
 Savings, . . . .12 
 Bills of Exchange, . . 46 
 Bills of Lading, ... 52 
 Book-keeping, ... 60 
 Brokers and Brokerage, . 63 
 Business Forms, . . . 589 
 Carriers, Common, . . 72 
 
 Checks, 89 
 
 City Authorities, . . . 107 
 Coin, Weights and Measures, 109 
 Collaterals, . . . .110 
 Collection, . . . .114 
 Commercial Terms, . . 126 
 Consignment and Commission 
 
 Accounts, . . .135 
 Contracts, .... 152 
 Corporations, . . . 156 
 Custom House and Post Of- 
 fice, . . . .170 
 
 Debts, 175 
 
 Deeds, . . . . .179 
 Divorce, . . . .182 
 
 Drafts, 185 
 
 Employer and Employee (see 
 
 Principal and Agent). 
 Executions (see Judgments). 
 Executors and Administra- 
 
 tors, .... 207 
 Exports and Imports, . . 221 
 Freight, . . . .222 
 
 Gifts, 227 
 
 Guaranty, . . . .228 
 Guardian, . . . .233 
 Heirs and Legatees, . . 235 
 Homestead, .... 241 
 Husband and Wife, . . 243 
 
 Page. 
 
 Infants, 248 
 
 Insolvency, . . . .249 
 Insurance, Fire, Life, and 
 
 Marine, . . • . 257 
 Interest, . . . .278 
 Internal Revenue and Li- 
 cense, .... 285 
 Intestacy, .... 289 
 Judgments and Executions, . 291 
 Landlord and Tenant, . . 297 
 
 Leases, 315 
 
 Loans, 320 
 
 Marriage, .... 321 
 
 Married Women, . . . 323 
 
 Miscellaneous, . . . 325 
 
 Mortgages, Chattel, Real, . 343 
 
 Naturalization, . . . 359 
 
 Negligence, .... 360 
 
 Notes, ..... 361 
 
 Partnership, .... 387 
 
 Patents and Copyright, . 415 
 
 Power of Attorney, . . 419 
 
 Principal and Agent, . . 421 
 
 Real Property, . . . 437 
 
 Receipts, .... 450 
 
 Receivers, .... 451 
 
 Seller and Purchaser, . 451 
 
 Settlement of Accounts, . 484 
 
 Shipping, .... 487 
 
 Statute of Limitations, . 518 
 
 Sureties, .... 523 
 
 Taxation, .... 524 
 
 Telegraph, .... 534 
 
 Trade-marks, . . . 537 
 Trespass, . . . .539 
 
 Trustees, .... 540 
 
 Usury, . . . . . 543 
 
 Warehouse, .... 545 
 
 Wills, 547 
 
 (vii) 
 
TO THE READER. 
 
 In the back part of this volume is a full alphabetical Index 
 of the 1,383 cases contained in the work. 
 
 Any particular case can be easily found by looking in the 
 Index under the appropriate head and then referring to the 
 number of the question and number of the page as given. 
 
 Tiii 
 
COMMERCIAL PRECEDENTS. 
 
 ASSIGNMENTS. 
 
 (See also insolvency.) 
 
 1. In 1875 A made an assignment for the benefit of his creditors. 
 The assignment was duly filed in this State (N. Y.) and New Jersey, 
 and the assignee settled with all the creditors by compromise. One 
 party held notes against A. who also signed the compromise and re- 
 ceived his dividend, but did not surrender the notes by some inadvert- 
 ence. A now fears that this party may or has assigned these notes to 
 other parties, and these parties may, at some future time, demand pay- 
 ment, notwithstanding that the original holder received the dividend 
 and signed the general release. The assignee was not aware of the 
 existence of these notes, A merely putting the amount of the indebt- 
 edness on the schedule: neither did the assignee advertise to limit 
 creditors, there being so few and all known. Now what course would 
 it be best to take? Have the assignee advertise, or let it remain in 
 abeyence, the assignee still holding all the papers? 
 
 A. If the debt was properly discharged under the assign- 
 ment, the notes are worthless. No one can take them after their 
 maturity and acquire a title to them, however innocent he may 
 be, as they cease to be negotiable, and the receiver takes a note 
 after it is due subject to all the equities between the original 
 parties. If A is uneasy he can compel the delivery of the notes, 
 or a statement that they are destroyed. 
 
 2. A party takes extension, and gives notes secured by a mortgage 
 on real estate. The last note is protested, the party having assigned. 
 Can an individual creditor compel the trustee to have the mortgage 
 foreclosed at once? Or must there be unanimity among the creditors? 
 Debtor lives in Ohio and the property is situated there. 
 
 A. On the motion of a creditor the courts will compel the 
 trustees to foreclose, if no good reason can be shown to the 
 contrary. 
 
 3. A broker fails and makes a general assignment of all his effects 
 for the benefit of his creditors. Among his creditors is an insurance 
 company, having to his credit on its books an amount of script which 
 
10 
 
 ASSIGNMENTS. 
 
 previous to his failure he had sold and received pay for. but neglected 
 to transfer. Now has that insurance company a right to take that 
 script in payment of its claim, or does it belong to the party who 
 bought and paid for it ? 
 
 A. We understand the scrip to be negotiable, and if the cer- 
 tificate was sold and delivered in good faith, the buyer would 
 have a title not subject to the private account between the com- 
 pany and tlie broker, even though it had not been transferred on 
 the books of the corporation. 
 
 4. A party made an assignment to assignee selected by creditors of 
 all stock on hand, for which they signed a paper to release party from 
 all claims Then the assignee sold the stock and received about $.'^5 
 for same at auction, he has offered the dividend to the creditors, but 
 being so small none have called to get same, and it is now over five 
 years. In two years the claims will be outlawed. Please let me 
 know what is to be done with the money, does it go back to the party 
 making assignment at the time, or what is to be done with it ? 
 
 A. It would be unsafe for the assignee to make this decision 
 for himself, or we for him. His proper course is to apply to the 
 court liaving jurisdiction for an order discharging him from the 
 trust, or otherwise making disposition of the funds. 
 
 5. B makes advances to A on warehouse receipts of merchandise 
 in store to two-thirds the value of goods. 
 
 A gives C, a creditor, a regular assignment of the margins on those 
 goods. 
 
 D, a creditor, obtains a judgment and attaches the margins. 
 The question is, who is entitled to the surplus when goods are sold, 
 C or D? In other words, will a judgment preclude the assignment ? 
 
 A. Tlie preceding assignment, if legal and regular, will hold 
 the surplus, 
 
 6. Micii. — A party in Michigan makes an assignment; will an at- 
 tachment on goods hold, providing bonds of assignee have not been 
 filed ? 
 
 A. The Michigan insolvent law vests all the property of the 
 debtor in the assignee from the execution of the assignment, 
 which, on being recorded, is allowed the same effect as a deed of 
 real estate, without reference to the assignee's bonds, of course 
 therefore the property cannot be attached by any creditor, under 
 the State law, after that time. 
 
ATTACHMENTS. 
 
 11 
 
 ATTACHMENTS. 
 
 1 . How can a judgment be collected from a clerk who draws his 
 salary weekly in advance? Is there any process by which his em- 
 ployers can be made to disclose what wages he is receiving, and with- 
 hold a portion each week until the debt is paid ? 
 
 A. Tlie attachment process can only be employed wliere 
 something is owed by the attachee or employer to the judgment 
 debtor, and we know of no process by which unearned wages can 
 be reached on execution. 
 
 2. We wisli to secure a debt of a large amount by suit in the Su- 
 preme Court of this State (N. Y.). The defendant being a non- 
 resident, we propose to attach his property, and would like to know 
 what an attachment will cover besides his stock. Will it apply to his 
 cash in bank, and to what collections he may make from his customers 
 after the date of the issue of the attachment ? 
 
 A. If a general bank deposit Avere held to be in specie, the 
 property of the depositor, tliere would be no question on the sub- 
 ject ; but, the courts holding it to be a mere debt, this seems to 
 lead to the conclusion that such a deposit, due a non-resident, is 
 not property within the State capable of attachment. Section 
 648 of the Code of Civil Procedure, according to Commissioner 
 Throo]), was prepared with great care, in the hope of settling 
 most of the puzzling questions with respect to the attachment of 
 debts, but though the section declares that a cause of action 
 arising out of contract may be attached, and specifies various 
 classes of obligations made by non-residents as capable of attach- 
 ment, yet it does not in terms cover the case of a debt due a 
 non-resident. This reasoning applies equally to both branches 
 of the inquiry presented by our correspondent, unless the collec- 
 tions may be reached in the shape of actual property of the non- 
 resident debtor, and not in the character of a debt due him. 
 Nevertheless, both cases seem to be fairly within the principle in 
 Russel V. Ruckman, 3 E. D. Smith, 419, where the court uplield 
 the attachment of a promissory note made by a resident, payable 
 to the non-resident del)tor in the attachment proceedings. If a 
 note, being mere evidence of a debt, can be tlius attached, tliere 
 seems to be no sufficient reason why a non-resident's bank bal- 
 ance cannot be held ; and we accordingly believe that, following 
 that decision, both balance and collections can be so covered. 
 
12 
 
 BAXKS. 
 
 3^ H. I. — Will an ai?signinent of wages unearned hold good from 
 attachment, under the following circumstances, in this State: A gives 
 B an order on the company that employs him, on the first of each 
 month, for all money that he may earn or wliich may be due him the 
 present month, and the company accepts the above order in favor 
 of B? 
 
 A. Wr kiKiw nothing in the Laws of Rhode Island to render 
 siicli an assignment invalid, })rovidcd that A owes B at the time 
 (tf tlie assiLHiment, and tliat it is niade in good faith to secure 
 tlu' del)t and not to jtrotect the Avages, so that tliey maybe ap- 
 plied to A*s own use or benefit. If this last be the case, we do 
 not lliink the assignment woidd hold good against a creditor 
 wliose debt ante-dated tlie transaction. 
 
 4. 1 1. I. — Are the officers' and sailors' (including engineers of 
 steamers of the merchant marine) wages due liable to attachment for 
 their debts contracted while on board or on shore? 
 
 A. The Federal law ])rovides that " no wages due or accruing 
 to any seaman or apj)rentice shall be subject to attachment or 
 arrest from any court" (U. S. R. S., sec. 45, 36). AVe know of 
 no sncli exception in favor of officers or engineers. By Rhode 
 Island law, mariners' wages are exempt from attachment until 
 after the termination of the voyage on wliich they have been 
 earned. 
 
 BANKS. 
 
 NATIONAL AND STATE. 
 
 1 . A note due to-day is presented at the bank for payment at 11 
 o'clock A. M. The note is protested for non-payment. Can the holder 
 of such noto collect the protest if the maker of such note can prove 
 thit he had the money at the bank at 3 o'clock p. m.? 
 
 A. We sup])0se, although it is not stated, that the note is 
 payable at a given bank. The maker, by that promise, is bound 
 to have the money at the place appointed at all times within 
 banking hours, so that if the note is presented five minutes after 
 the bank is o]»ened in the morning, and payment is refused, the 
 })romise is Itroken. tlie paper is dishonored, and it may be pro- 
 tested without pi-cscnt ing it again. But if the maker can find 
 tlie holder at any time dnringthe day and tender him the money, 
 he can save himself from any costs. 
 
 2. We deposited in a Xew York bank a check drawn upon the 
 First National Bank of Newark; th(^ latter bank having failed, the 
 
BANKS, 
 
 13 
 
 New York bank notifies us that they have deducted the amount of the 
 check from our account, but do not return the check to us, conse- 
 quently we have neither the money nor our check. If we had the 
 latter we could get the amount from the drawer, but he refuses to give 
 a new check until the old one is surrendered to him. U ader these 
 circumstances has not the New York bank become a creditor of the 
 Newark bank, and have we not ground of action against it to recover 
 our deposited check or its equivalent ? 
 
 A. It may be that the check went into the Newark bank and 
 was canceled ; if so, under the decision of our Court of Appeals 
 the bank cannot return the check, and the payee has lost the 
 money. If the check has not gone in, the bank should return 
 it, and can be compelled to surrender it. 
 
 3. When a bank certifies a check, does it charge it to the account 
 of the depositor and retain the money for the payment of it ? 
 
 A. The bank, when it certifies a check, charges the amount 
 to th« depositor precisely as if the same had been paid, and 
 (with the exception above noted) holds itself bound to pay the 
 check on presentation. 
 
 4. A bank certified two checks. One was forged and the other 
 raised. Both checks came into the possession of an innocent holder, 
 who, relying on the bank's certification, gave value for them. Has 
 the liability of the bank in such cases ever been determined by the 
 Court of Appeals; if not, what is the prevailing decision of the lower 
 courts ? 
 
 A. The bank is liable to a holder in good faith for the forged 
 check, but our highest judicial tribunal (N. Y.) in a decision 
 severely criticised by us, has taken the ground that the bank is not 
 liable for a raised check it has certified, and even after it has been 
 paid such a check may upon discovery recover the money of tlie 
 presenter. 
 
 5. Has there ever been a decision of our courts in regard to the 
 liability of a bank which receives on deposit from a dealer a check 
 drawn on the same bank by another dealer, whose account proves to 
 be overdrawn at the end of the day's business, and who fails to make 
 it good ? In other words, does not the receiving of the check by the 
 second teller (who is an ofiBcer of the bank) amount to the same as the 
 certification of the same by the paying teller ? If not, how does the 
 subsequent certification, on the same day of other checks of the same 
 party, affect the case ? 
 
 A. There is a decision in our Court of Appeals holding a 
 
14 
 
 BAXKS. 
 
 l»ank liable for a check on itself which it receives on deposit and 
 f>asses to the depositor's credit, whether tlie account against 
 which it is drawn is irood or not : and in a recent California case 
 tlie conrt quoted the New York decision as <rovernino:. But tliis 
 was under the old system of bankinir, where the cashier was the 
 one l)oth to pay checks and to receive deposits. Now all this is 
 chanired, one teller receives and another pays. If the depositor 
 wishes to have the check hold good without recourse to himself, 
 let him present it to the paying teller and draw the money or 
 have it certified. If he deposits without such precaution, we 
 think tliat lie should be held to have waived his right, and should 
 stand as the indorser of the check, precisely as if it was drawn 
 on another bank. A Philadelphia judge took this view of it in 
 a very important case. The courts here might still follow the 
 old precedent (which is latest law) in this State (N. Y.), but it 
 will be modified by modern custom in due time. 
 
 6. A depositor deposited with this bank for collection on the 20th 
 of July a check upon a bank in this city (N. Y.) for $2,500, which 
 check was sent through the Clearing House as usual on the 2lGt and 
 pronounced good and paid by the drawee bank; after receipt of the 
 money, or equivalent thereto (no notice by one o'clock that said check 
 was spurious having been received), our bank paid to depositor a por- 
 tion of said check. 
 
 On the second inst. the drawee bank sent a notice that it liad dis- 
 covered said check had been "raised" from $25 and demanded a re- 
 fund of balance. 
 
 This bank had no interest in the check, not even having credited it 
 to account of depositor until after one o'clock on the 21st, simultane- 
 ously charging him the amount paid him. "We hold the balance un- 
 drawn on said check, but for the deficit which bank is responsible, the 
 bank receiving the deposit presenting it for payment and receiving 
 the money on it and then parting witli it, or the bank which paid it 
 and twelve days afterward notifying its having been "raised ?" 
 
 This bank did not negotiate the check for value, having no interest 
 in it whatever, the only "currency" it nominally gave to it being in 
 its list of " debit checks" in the clearing on the 21st. 
 
 A. We have noticed at very great length the decisions in this 
 State (N. Y.) giving to a bank which had paid money on a 
 raised check drawn upon itself the right to sue for and recover 
 the over-payment. Our Conrt of Appeals held that the drawee 
 bank was not bound, although it had certified the check after it 
 was raised, and the holder took the check upon such certifica- 
 
BANKS. 
 
 15 
 
 tion. We criticised the decision, and on the strength of our 
 criticism application was made to the Court for a re-hearing of 
 the case, but this was refused. We had not previously expressed 
 any opinion on the case, but we have always considered it a very 
 inequitable decision. The principle is sustained in Bank of Com- 
 merce vs. Union Bank, 3 N. Y. (3d Com.), 230. 
 
 7„ In certifying a check does a bank guaranty the payment of the 
 same whenever presented ? or simply certify that the amount on the 
 check is to the credit of the drawer in the bank at the time the check 
 ;s presented, without thereby guarantpng its payment ? 
 
 Ao • It was formerly supposed that the certification promised 
 absolute payment of the check when properly presented ; but our 
 Court of Appeals, in evident ignorance, as we think, of the effect 
 of their decision, or of the real nature of the question upon which 
 they passed, have decided that if the amount of the check has been 
 altered since it was drawn, the bank cannot be held to pay 
 the altered amount, although the certification was placed upon it 
 after the alteration. But if the clieck has not been tampered 
 with, the bank after certification is held for its payment. 
 
 8. If a Richmond check is made payable to A, of New York, and 
 he deposits it in bank and stamps on back For deposit only in Bank 
 of New York for credit of A," does this require that the forwarding 
 bank should guaranty the indorsement, or does not the fact of its 
 coming from said bank prove its genuineness ? 
 
 A. The Bank of New York in collecting the check in that way 
 does guaranty the indorsement in any case, and is responsible for 
 its genuineness. 
 
 9. If A gives a check to an employee of B, payable to the order 
 of B, can the employee at once get the same certified at the bank 
 where it is payable, or is it necessary that B indorse the check before 
 the bank is obliged to certify it ? 
 
 A. A bank is not obliged to certify a check at all, and it does 
 so as a matter of courtesy and accommodation to the holder, who 
 prefers such certification to payment. In granting such courtesy 
 and accommodation the bank may impose such conditions as it 
 chooses to prescribe, and if the holder refuses to accept these, it 
 may decline to certify. Some banks insist on indorsement by the 
 payee before certification, unless the check is presented on the 
 
16 BANKS. 
 
 part of the dra^yer, ])iit wo do not defend the requirement, nor 
 believe it t<^ be justified by any sound policy. But what can the 
 vlvvk do if such eertilieation is refused? He cannot ask for pay- 
 ment because the check is drawn to order and not yet indorsed. 
 He must get liis firm's indorsement before he can presen!: the 
 clun k for payment, and when thus indorsed, then the bank will 
 offer to certify it. 
 
 10. The following notice is in several of the New York banks: 
 " While this bank will use due diligence it will not be responsible for 
 checks paid, although payment on the same may have been stopped." 
 Is a bank responsible provided it pays checks on which payment has 
 been stopped? Does tlie above notice release the bank from or change 
 the nature of its responsibility in any way ? Is there any distinction 
 in tlie above case between notes, drafts, or checks ? 
 
 A. We do not think the al)ove "notice" likely to prove a 
 sulhci«nt defense if a bank pays a check or order after it lias had 
 full and distinct notice in writing that payment has been stopped. 
 In plain terms we do not believe a bank can charge the payment 
 of a check to its depositor after lie lias distinctly in writing, with 
 a full description, countermanded the order. 
 
 11. A. of Boston, telegraphs C, of New York, to invest $1,000 
 and directs C to draw on him for the amount at sight through the 
 National Bank of New York. At the same time, by request of A, the 
 National Bank of Boston telegraphs the National Bank of New York 
 to pay ("'s draft on A for $1,000. and the National Bank of New York 
 pays C the amount of the draft as requested. In case A fails to pay 
 C's draft, is C liable for the amount, or will the National Bank of 
 Boston be held liable ? 
 
 A. In case C's draft comes back unpaid, he can be held to 
 pay it. If neither A nor C can pay it, the National Bank of 
 Boston stands in the gap. 
 
 12. I give a person a check on a bank for $100 which is raised by 
 the party to $2,100, and is cashed by the bank for that amount. 
 Provided the person who raised the check cannot be found, who must 
 lose tlie $2,000, the drawer of the check or the bank? 
 
 A. Unless the check has been so carefully drawn as to invite 
 alteration, the drawer cannot in any case be charged by the bank 
 with a greater sum than he included in the order as it left his 
 hands. Ia this State (N. Y.) the Court of Appeals has 
 
BANKS. 
 
 17 
 
 decided that the drawee may recover of the payee or of the bank 
 through which it was collected the extra amount paid ; but if 
 this cannot be done the drawee must lose it. 
 
 13. John Smith draws his check for $100 against his account io 
 the Iron National Bank to the order of Moonshine, Cough & Co. li 
 next becomes the property of the Hundredth National Bank of Phila- 
 delphia, which has paid the money for it, and which indorses it and 
 sends it to its New York correspondent, say the Four Hundredth 
 National Bank, for collection and credit. The correspondent in turn 
 indorses it and collects it of the Iron Bank through the regular Clear- 
 ing House exchanges. Upon its reaching the hands of the Iron Bank 
 teller, the writing upon the back purporting to be the indorsement of 
 Moonshine, Cough & Co. is found to be utterly illegible. The check 
 having been indorsed by the two banks through which it passed, is 
 paid by the Iron Bank and charged to Smith's account. Subsequently, 
 upon settlement of Smith's bank book and return to him of his can- 
 celed checks, he is dissatisfied with the writing on the back of this 
 check, declares it not the genuine indorsement of Moonshine, Cough & 
 Co., and refuses to allow the charge against his account. Suppose one 
 of the regulations of the New York Clearing House be that The 
 written indorsement of a bank, member of the Clearing House Associa- 
 tion, shall be held as a sufficient guarantee and responsibility to any 
 other bank being a member of the same, for all previous indorsements, 
 without any special indorsement for guarantee, provided that such 
 indorsements shall not be construed to supply, or as a guarantee for a 
 missing indorsement," and upon investigation this writing prove not 
 to be the genuine indorsement of the firm aforenamed: 
 
 Who must bear the loss ? 
 
 Is a bank bound to know the indorsements to be correct which may 
 cover the back of a check drawn upon it, above the indorsement of the 
 bank or party from which it receives the check, in order to secure it 
 against loss in case one or more of such indorsements, legible or illegi- 
 ble, prove upon investigation after payment to be not the genuine 
 indorsement of the party named in the body of the check? 
 
 The writing on the back of Smith's check being an illegible scrawl 
 (to any one not familiar with it), should it be held to be an absence " 
 of or a "missing indorsement " ? 
 
 A. The Hundredth National Bank of Philadelphia must lose 
 the money unless it can recover of the person from whom it received 
 the check. 
 
 The drawee bank is not bound as to the correctness of any of 
 the indorsements, except for its own protection. If the check 
 comes through any other bank or responsible party, the latter Is 
 held for the genuineness or sufficiency of the indorsements with 
 or without any Clearing House rule to that effect. 
 
18 
 
 BANKS. 
 
 The illc\i»il)ility of tlie indorsement, if the writing was taken 
 to he tlie signature of the original payee, does not make the case 
 one of missing" or ''absent" indorsement. It appears that 
 tlie indorsement was a forgery ; tlie next genuine indorser is 
 therefore llie loser, unless he can detect the person from whom 
 he had it and i-ecover the money. 
 
 14. T\'g deposit a country check at our bank, and the same is 
 pass(Ml to our credit. The check is lost through the mail. Has the 
 bank any i-iglit to charge the check back to us ? 
 
 A. The bank has no riglit to charge the check back, being 
 responsible for the loss ; but it has the right to ask the co-opera- 
 tion of the depositor in securing a duplicate from the drawer. 
 
 15. Some time since we were notified by a correspondent that he 
 had not received check which we had sent him. On a second notifi- 
 cation of the same fact we advised with our bank, and by their direc- 
 tion we issued duplicate check, they agreeing to stop original. On 
 examination of checks returned, we find both checks, original and 
 duplicate, the party dishonestly or otherwise using both, and our bank 
 not refusing to receive the original after agreeing to do so, and fur- 
 thermore now disclaim any responsibility whatever. 
 
 A. The drawer of a check has a right, as far as the drawee 
 is concerned, to coiuiternumd its ])aynient, and the bank after ac- 
 cepting such a notice pays the check at its own peril. As far as 
 the ])ul)lic is concerned, however, the drawer is liable to any one 
 who holds the lost check duly indorsed, in good faith for value, 
 and such holder, if the bank refuses payment, can collect the 
 same irom the drawer. The bank in the case cited may " dis- 
 claim any res])onsibility," luit it cannot law^fully charge that 
 countermanded check it agi'ced not to pay to the drawer's ac- 
 count ; and if it does, and refuses to let liim draw the sum thus 
 charged, the courts Av^ill convince the officers of their error. 
 Tlie r{!ceivers of the clieck who indorsed and collected both can 
 b(3 made to return the money, and, if done by design and not an 
 accident, l)c punished for their dishonesty, 
 
 1 6. A presents B's check for $ to the bank on which it is 
 
 drawn. Tlie drawer B has not sufficient money on deposit in said 
 bank to meet the check. Has A (the payee) then the legal riglit to 
 demand of the bank that the amount standing to the credit of B shall 
 be paid to him on his surrendering tlie check? And would the bank 
 
BANKS. 
 
 19 
 
 De held harmless by either refusing or complying with the demand? 
 And if the bank compbed with the demand, could it charge to B's ac- 
 count a portion of the amount of the check, that is, the amount paid 
 A on its surrender? 
 
 Ao TMp; ?s a very important question and has been widely 
 discussedo Morse on Banking says . " The better rule perhaps 
 would be, to save misunderstandings and complications, that if a 
 bank cannot pay in full it not only may not, but must not, pay 
 at alL" The writer supports this with the following argument: 
 
 " The drawer has not requested the bank to make a part pay- 
 ment. He has demanded that it do a certain act, to wit, pay a 
 certain sum of money on his account. If it w^U not do this act 
 according to the terms of the authority embodied in the request, 
 it by no means follows that it is authorized to substitute for it a 
 partial performance, or in fact a materially different act. Power 
 to pay only a part of a sum is not necessarily implied in an order 
 expressed without alternative to pay that specific sum." 
 
 But this view has been successfully combatted by other 
 writers, and Daniel on Negotiable Securities (vol. 2, page 539}, 
 says . 
 
 " It is quite clear, we think, that unless the holder will sur- 
 render the check the bank is not obliged to pay it in part, for it 
 is entitled to the check as a voucher. But if the holder offers to 
 give up the check on receiving part payment, we cannot perceive 
 that the bank w^ould be warranted in refusing such part pay- 
 ment ; and so, likewise, if the holder would place a sufificient 
 sum to the drawer's credit, to make the check good before draw- 
 ing out the amount." 
 
 In a case tried in the Court of Common Pleas of Philadelphia 
 (Bromley v. Com. National Bank), in 1872, it appeared that the 
 payee of a check for f 725 presented it for payment. The bank 
 had but $229.92 to the drawer's credit, and the teller tlierefore 
 declined. Tlie payee then demanded such balance on account as 
 the bank held. This was refused ; and he then offered to de- 
 posit to the drawer's credit sufficient money to make the check 
 good if the bank would then pay it. This the bank also declined, 
 but the court on trial awarded to the holder of the check that 
 money^ and said that having first presented a check that covered 
 it, and offered to surrender the check for it, he was entitled to It 
 In view ot this case, the best writers say that if the holder offers 
 to surrender the check and accept for it the balance less than its 
 
20 
 
 BANKS. 
 
 face wliich the bank may hold, the drawer would have no right 
 to complain, and, as the payee consents, the bank would have no 
 right to refuse it. 
 
 17. A draws a check on a bank payable to B, and B indorses the 
 same in blank. C presents the check for payment and the teller asks 
 C to indorse it; C refuses. Can C protest and collect damages of 
 either the maker of the check or of the bank ? and can A collect 
 damages of the bank for refusing to pay his check ? 
 
 A. The only ol)ject in asking C to indorse is to liave him 
 identify and guaranty the endorsement of B. If C declines and 
 the bank still refuses to pay, C can protest the check, but the 
 bank would probably pay it to the notary who made the demand 
 before protest. If not, and protest is made, C has still no claim 
 for damages on the bank, but he can collect principal and costs 
 of A. A can collect of the l)ank all that any jury would allow 
 in the way of damages ; but if the bank showed by proper evi- 
 dence that they did not know the signature of B, and asked C's 
 indorsement as a guaranty of its genuineness, the verdict would 
 not })robably carry any damages beyond the cost of protest. 
 
 1 8. Can a bank legally refuse to give credit next morning for a 
 check returned the previous afternoon, after all the officers had left 
 and the bank closed ? 
 
 A. As we understand the position, the bank may return the 
 check at any time that afternoon or early the next day, and if 
 charged with it in account can claim the proper credit for its re- 
 turn as not good. In London a check can only be detained until 
 5 o'clock P. M. of the day of presentation, but in this country it 
 was decided (Overman v. Hoboken City Bank, 31 N. 1. L. R. 
 [2 Yroom], 563,) that 24 hours was not unreasonable delay. 
 The clieck in this case was presented between 12 and 1 o'clock 
 of one day, and returned as not good the next day about noon. 
 Basley, C. J. decided that the bank was not liable for the check 
 by reason of this long retention, and had a right to retain it thus 
 for re-examination of the drawer's account. 
 
 19. A makes a deposit at his bank, consisting of cliecks on differ- 
 ent institutions, and receives credit for the same in his pass-book. Can 
 lie draw out part or all of the sum thus credited to In'rn the same day, 
 or can the bank legally refuse him the money ? 
 
BANKS. 
 
 21 
 
 A. It is the custom for banks to cash checks drawn against 
 such deposits, but if they have any doubt of the value of the 
 deposit they would be justified in limiting the drawer until the 
 deposited checks had been cashed. The checks credited as cash 
 in the pass-book, if not paid, are charged back to the depositor; 
 and there is no legal obligation on the part of the bank to cash 
 a check drawn against them, although as a courtesy to the de- 
 positor this usage is almost universal. 
 
 20. A gives B a check m payment of a legitimate debt. Shortly 
 
 afterward, and before B can present the check at the bank, A stops 
 payment of it. In due course B presents it and is refused payment, 
 although there are sufficient funds to meet it. Does the notification of 
 A relieve the bank of all responsibility, and can the bank subsequently 
 pay out all of A's balance and leave B's check unsatisfied ? 
 
 A. In this State (N/ Y.) such a notice from the drawer is 
 sufficient to justify the bank in refusing to pay if the counter- 
 mand has been received before the check has been presented or 
 the bank has notice of it. In plain words, the drawer of the 
 check has countermanded the order on the bank, and this is 
 sufficient as between these two parties. A court in a Western 
 State a little while since held that a bank could not go on pay- 
 ing out the funds of the depositor, and was liable to the holder 
 of the check, but we do not think that it is good law. It would 
 not be accepted in this State (X. Y.), where a different principle 
 has prevailed. 
 
 21. (1.) What is the correct thing for a paying teller to do when a 
 note is presented for payment, for which the funds are ready and 
 which is otherwise good, but past due ? Should he pay it, send it 
 back, or refer the holder to the drawer ? 
 
 (2.) In case, under the above circumstances and for the above reason, 
 a note is sent back unpaid, can it be legally protested? And if pro- 
 tested is the drawer entitled to damages for injury to his credit suf- 
 fered by the protest, or to any other satisfaction ? And if so, should 
 tie look for it to his own bank, or to the holder of the note ? 
 
 A. (1.) If the note was some time past due, even if payable at 
 the bank, the teller should be put upon inquiry as to the cause 
 of the delay, and if this was not satisfactory should delay pay- 
 ment, and by mutual consent, if possible, .refer the matter to the 
 maker. 
 
BAXKS, 
 
 (2.) The note should not be protested in such a case, as there 
 would be no object whatever in doing it. All the indorsers are 
 discharged by the delay (unless there is a legal excuse for it) 
 and the maker is as much held without a protest as with it. 
 The note being past due and non-negotiable, and no protest 
 therefore required, the fees for the protest could not be recovered 
 of any of the ])arties. German v. Ritchie, 9 Kans., 110; Noyes 
 V. White, id. 030. Daniel on Xcg. Ins., vol. ii, page 9. 
 
 22. Has there ever been a case where a bank has refused the pay- 
 ment of a check that it had certified? If so, when, and what bank 
 did it? 
 
 A. A city bank, whose teller certified to a note made payable 
 at its counter, refused to cash it on the ground that its teller 
 made a mistake in such certification, the man's account not 
 being good for the amount as he supposed, and its position was 
 sustained by the courts. 
 
 23. A owes B and gives him his check on City Bank. B keeps 
 his account in the City Bank also, and deposits A's check, w'hich the 
 teller enters to his credit on his pass-book. On the following day the 
 bank returns A's check to B, stating that A's account is not good for 
 the amount of the check. We would like to know if the bank is not 
 liable to B for failure to protest or notify B on day deposited. 
 
 A. The old rule of law was that a bank which receives a 
 check on itself and places it to the credit of the depositor has 
 virtually certified to it and cannot return it and erase the credit. 
 This was based on the theory that the cashier, w^ho in old times 
 received and paid out all the funds, was the proper person to 
 know if the check was good, and if he took it and placed it to 
 the credit of a depositor the bank was held for it. But the cus- 
 tom of banking has changed. The cashier does not handle the 
 funds directly ; there is one teller to receive and another to pay. 
 If a depositor wishes to hold the bank he should take it to the 
 paying teller and have it certified before he gives it to the receiv- 
 ing teller for dci)osit. In these changed conditions the courts 
 are coming to the view that the bank may return a check on 
 itself, received from a depositor, if not found to be good, pre- 
 cisely as it may return a check on any other institution, and this 
 may be done on the following day. In this State (N. Y.) the 
 
BANKS. 
 
 23 
 
 old law has not been changed by any modern decision, and a 
 judge in California, quoting the New York decision, reaffirmed it. 
 On the other hand, a judge in Pennsylvania, before whom an 
 article on this subject from our pen was read in open court, de- 
 cided that the bank was not held and might return the clicck. 
 
 24. Checks are sent in from other banks after banking hours and 
 credits given m lump, after which they are passed upon by book-keepers, 
 and those found to be not good returned, usually the same afternoon 
 Can a bank legally refuse to give credit for checks so returned? 
 
 A. The first credit is not absolute, but is contingent on 
 the examination, precisely as a depositor is credited in his 
 book with his daily deposit, and can be charged back with all 
 checks or even bank notes, that upon examination or collection 
 prove not to be good. 
 
 COLLECTION. 
 
 25. A makes a check payable to bearer and pays itto B, B holds 
 the check some sixteen days and pays it to C, C the next day takes it 
 to a bank in another town and gets the money on it, paying the custo- 
 mary fee for collecting, but does not indorse it. The bank the same 
 day sends it for collection to the bank on which it was drawn. A draft 
 is returned without delay on its city correspondent, and is sent forward 
 the same day and is presented for payment, which is refused and the 
 draft is protested, the bank issuing the draft failing that day. Which 
 of the parties bears the loss ? 
 
 A. The bank from which C drew his money must stand in 
 the gap. When it accepted anything but cash for the check, it did 
 so at its own risk, and if it had received the check from the 
 maker only the day before it could not go back on liim for the 
 money. 
 
 26. I cut the following memorandum from the margin of a letter 
 of a Chicago bank : 
 
 " This bank in receiving collections, acts only as your agent, and does not 
 assume any responsibility beyond due diligence on its part,"tlie same as on its 
 own part. " 
 
 Suppose A deposits draft in bank here on B at Smithville. Bank 
 here sends draft to Smithville bank for collection. B pays draft and 
 Smithville bank remits draft on New York Draft returns from New 
 York, "No funds." If bank here used " due diligence " m selecting 
 Smithville bank as agent does A have to stand the loss if any results ? 
 Does it make any difference whether A made sight draft or on time, 
 and bank has discounted it and A has had the proceeds ? 
 
24 
 
 BANKS. 
 
 A. Tho bank receiving the draft on deposit, wlictlicr it was 
 on siglit or on time, will have to i)ay the depositor in lull and use 
 due diligence " to save what it can by collecting it out of the 
 defaulters. 
 
 27. A draft was presented at our office to-day at 3.30 p.m. by a 
 bank runner. Our cashier paid it, but contends that had he refused to 
 do so the bank could not legally protest it and collect the same. I 
 maintain that if presented within reasonable business hours and pay- 
 ment refused, it can be protested and fees of same collected. 
 
 A. A draft on a bank must be presented in banking hours. 
 A draft on a business house is to be presented during business 
 hours. This is the greatest trouble in our city. Banking hours 
 are fixed by common consent from 10 to 3 o'clock. Business 
 hours have no fixedness," and bank runners take checks to 
 collect at all hours up to G p.m. In tlie summer season, when so 
 many principals leave their offices at an early hour in the after- 
 noon, this habit is exceedingly inconvenient, and often quite 
 embarrassing. Drafts presenting at 4^, 5, 5i, and even as late 
 6 o'clock, sometimes even after the youngest clerks have gone 
 home, and no one but a porter is in charge, and a protest is 
 noted, the fee for which is to be collected in the morning. There 
 is hardly a day in the summer season when* some dispute on this 
 point is not referred to us for settlement. We have often sug- 
 gested that the wliole difficulty be settled by legislation. The 
 better way would be to limit by law the time for presenting at 
 business houses drafts, <fec., for acceptance and collection to a 
 given hour, say to one hour later than the usual limit of banking 
 hours. At present there is no limit, and if the case is taken into 
 the courts, then the day of the week (Saturday being an excep- 
 tion usually), tlie period of the year, the custom of the particular 
 trade, and various other points would be required in evidence to 
 decide whether the liuur of presentation was really within rea- 
 sonable " business hours or not. As the average juryman knows 
 little on this theme, no one could predict the verdict. 
 
 28. A B, acustomer residing in Reading. Pa., sent me a check post 
 dated December 10; at the time of its maturity A B requested me not to 
 present the same tillJanuary 1. Accordingly! deposited it in my bank 
 December 31, when the amount of check was entered in my book 
 
BANKS. 
 
 25 
 
 as cash. January 14 I received notice of protest. On inquiry at the 
 bank for reason of this delay, we received the reply that the bank ic in 
 the habit of sending its collections for Reading, Pa., to Pittsburgh, Pa. 
 Now has the bank a right to attend to the collection of a check in such 
 a roundabout way ? Can I hold the bank responsible for the loss 
 nicurred through their way of doing business ? 
 
 A. If our correspondent can show that the bank did not use 
 due diligence in collecting his check, and that in consequence of 
 such neglect the check was not honored, he can hold the institu- 
 tion responsible. But neither of these are proved in the above 
 narrative. The bank followed its usual routine of collections, 
 and there is nothing to show that the check would have been 
 paid if it had been presented a feiv days earlier. The check is 
 still valid against the drawer, unless the bank on which it was 
 drawn failed during the period of the delay, the account of the 
 drawer being good all the time. It appears to us that A B, and 
 not collecting bank, is the party to be censured. If the 
 check was good January 5tli, it ought to have been good three or 
 four days thereafter 
 
 DEPOSIT AND DEPOSITORS. 
 
 29. A B & Co have made an assignment. Included in their 
 liabilities are loans from a bank on the firm's notes with usual indorse- 
 ment. Those notes are not yet due, but the bank immediately ou 
 annoimcement of assignee's appointment took possession of A B & Co.'s 
 balance, refusing payment of all checks made against it, and which 
 were drawn before assignment was made. The bank gives for its 
 reason for this action its intention to hold the balance toward payment 
 of notes when due. 
 
 1. Must not a bank wait until such notes become due before taking 
 action, and even then only by due process of law in the same manner 
 as any other creditor ? 
 
 2. Cannot the holder of check under such circumstances sue and 
 recover together with damages for such detention ? 
 
 A. We think that the bank will be legally justified in its 
 action. 
 
 30. Are depositors in national banks allowed or entitled to interest 
 when deposits are left untouched for a longer time than a day or a 
 week, say for three months or more ? Is a depositor entitled to 
 interest ? 
 
 A. The depositor is not entitled to interest on the deposit, no 
 matter how long it is left. The bank must keep a considerable 
 portion of the depositor's balance on hand to be ready for any 
 
2(3 JiAyKS. 
 
 call upon it ; and it is entitled to the use of such part as it maj 
 Bafoly loan out ai2:ain, as a recompense for transacting the business 
 for the depositor. 
 
 31. If I telegraph to a bank Is check of A B good for one hun- 
 dred dollars ? " and the bank replies " Yes," does this reply make the 
 bank responsible for the papnent of the check ? 
 
 A. It is a dangerous thing for a bank to make such a reply, 
 unless it is very sure the account will be kept good until the 
 check is presented, as it cannot charge the sum specified to the 
 depositor and may have trouble with the holder, if the money is 
 drawn out before it is demanded by him. We feel confident that 
 a bank would not be licld in this State (X. Y.), if the depositor 
 sliould not have sufficient to his credit to meet a particular check, 
 provided at the time the inquiry was made the account was good 
 as represented. But the answer should be qualified in all cases 
 so as to avoid any seeming certification of a particular check to be 
 thereafter presented. 
 
 32. A check on a Savannah bank payable to the order of one of 
 our depositors in the interior of the State (N. Y.), was sent to us by 
 him for his credit, without his endorsement. I indorsed for him, 
 guarantying his signature thus: " John Doe," indorsement guaranteed 
 "L. P. Jones, cashier," and forwarded it to our bank in Savannah for 
 collection and credit. It was presented for payment and refused, the 
 cashier contending that it must bear the genuine signature of the 
 payee, and that my guaranty would only hold me individually, and 
 would not hold the bank I represent. Was he right as to the last 
 point ? 
 
 A. The indorsement of L. P. Jones, cashier, the bank collect- 
 ing the money, or having the same placed to its credit, guaranties 
 on the part of the bank the genuineness or sufficiency of the per- 
 son's indorsement, even without the words prefixed to the signa- 
 ture. 
 
 S3. A deposit being made in bank of cash and country checks, and 
 the amount entered as a credit in the depositor's book, should not the 
 bank notify the depositor without delay, if it concluded not to credit 
 in its books the full amount as shown by deposit book ? Were they 
 to neglect so to notify depositor and damages occur, would the bank be 
 liable or not ? 
 
 A. The baidv, after further examination, might conclude to 
 
BANKS. 
 
 27 
 
 hold the checks, in whole or in part, for collection, instead of 
 giving the depositor credit for them as cash. It ought, most cer- 
 tainly, to notify the depositor of this change if he is likely to 
 draw against the deposit ; but if it fails to do so, we do not think 
 the bank can be held in damages. 
 
 34. ^^A. — A owes a certain bank a note of $500 and he liolds a 
 certificate of deposit of that bank for a Hke amount. The bank goes 
 into the hands of a receiver, and its assets are only sufficient to pay 50 
 cents on the dollar. Can A be made to pay the full amount of his 
 note and receive only 50 per cent, of his claim against the bank ? or is 
 the certificate an oUset to the note ? 
 
 A. The Virginia courts not having decided this question, they 
 may, if they so determine, establish a rule of their own, under 
 the State statutes ; but the weight of authority, elsewhere, is in 
 favor of allowing such a set-off, provided the depositor's debt 
 to the bank was contracted prior to the assignment, and was 
 not due on a subscription to capital stock. In the two specified 
 exceptions, the rule is the other way. Waterman on Set-off, 24 ; 
 Bank v. Sherlock, Pennsylvania Supreme Court, June 22, 1877 ; 
 Piatt V, Bentley, Thompson's Bank Cases, 758, <fcc. 
 
 DIRECTORS AND STOCKHOLDERS. 
 
 35. Under the national banking law, a director of a national 
 bank is an officer of the bank in the eye of the law, and could not 
 therefore vote a proxy for a stockholder ? 
 
 A. The directors of a bank are not ''officers" in the appli- 
 cation of the law. In section 5,136 this is plainly shown. The 
 association is there given power to elect or appoint directors, 
 and by its board to appoint the officers ; and to adopt by-laws to 
 regulate " the manner in which its stock shall be transferred, its 
 directors elected or appointed, its officers appointed, its property 
 transferred," <fec., all of which shows that directors are not 
 classed as officers. 
 
 36. At an election for directors of a national, bank can a director 
 who is a shareholder vote a proxy, and is he considered an officer of 
 the bank ? 
 
 A. A director is not included among those who cannot act as 
 proxies at an election. The law provides that "no officer, clerk, 
 teller, or bookkeeper of such association shall act as proxy." 
 The law throughout distinguislies between the directors as such 
 
28 
 
 BAXKS. 
 
 and the otlicers as such ; in sec. 15 (513G) it authorizes the 
 board of directors to appoint a president, vice-president, cashier, 
 and other ofiicers. In another parairrapli it authorizes the 
 board of directors to })rescribe how its directors shall be 
 elected or ap]»()inted and its officers appointed," and in other 
 })rovisions settles this question beyond a doubt. A director may 
 therefore act as ])roxy for a stockliolder. 
 
 37. ^^'ill you please explain the duty, responsibility, and privileges 
 a director has in a national bank ? I want to do my duty as far as I 
 can, and I know of no person who can define it half as well as you can. 
 Your reply will instruct many hundreds who are directors, simply al- 
 lowing their name to be used, but giving no time or attention to the 
 workings of the bank. 
 
 xV. We liave not space to enumerate the duties, responsibili- 
 ties, and privileges of a director in a national bank, which we 
 suppose to be the position referred to in tlie inquiry. 
 
 He is required to be a citizen of the United States, to own ten 
 shares of the stock, to see that the bank has been duly organ- 
 ized, that the reserve is properly maintained, that the business 
 carried on is legitimate, tliat no dividend is declared out of any- 
 thing but profits, that no loan is made on the security of the 
 stock, that no loan is made on a deposit or pledge of United 
 States notes, that no check is certified witliout the drawer has 
 the amount to his credit, that the funds of tlie institution are 
 not wasted by fraud of any of the officers or clerks, that the re- 
 ports of its condition are duly made to the Comptroller of the 
 Currency, and to see that no loan to any one concern exceeds 
 ten per cent, of tlie bank's paid up capital. The directors must 
 take an oatli to execute the provisions of the law, and if they 
 knowingly violate, or permit any officer or servant of theirs to 
 violate any of these provisions, they are personally liable for all 
 the resultant damage. 
 
 38. Will you quote the law relating to the liability of stockhold- 
 ers of a State bank toward depositors ? 
 
 A. The original State free banking act provided against in- 
 dividual li;ii)ility of stockholders except where it was recognized 
 in tlie articles of incorporation. The new Constitution, how- 
 ever, in article viii, sec. 7, enacted that the stockholders in all 
 
BANKS. 
 
 29 
 
 banking associations issuing bank notes or any kind of paper 
 credits to circulate as money " after the 1st of January, 1850, 
 shall be individually responsible to the amount of their respec- 
 tive shares, " for all its debts and liabilities contracted after that 
 date. It was decided that this liability was pro rata, so that 
 each stockholder was only chargeable with his share of the 
 deficit up to the amount of his stock, and not for the deficiency 
 of other stockholders from whom nothing could be collected. 
 After the national system was adopted the State bank issues 
 were taxed out of existence, and as they issue no " bank notes 
 or any kind of paper credits to circulate as money, " it is doubt- 
 ful if their stockholders are liable unless the articles of associa- 
 tion so provide. 
 
 39. Are stockholders in "National " banks personally liable? If 
 so. is there not an exception when capital stock of the bank is a cer- 
 tain amount, say three or five million of dollars ? 
 
 A. The stockholders of a national bank, as a rule, are in- 
 dividually liable to an amount equal to their stock, not for each 
 other, but each for himself, ratably for any deficiency to meet 
 the debts of the bank. The exception is in favor of the share- 
 holders of any bank with a capital not less than five million and 
 a surplus of 20 per cent., the latter to be maintained. This was 
 inserted to cover the case of the Bank of Commerce, whose 
 charter exempted the stockholders from all personal liability, so 
 that it could not change from a State to a National bank without 
 increasing the risk of its shareholders, and this was adopted to 
 meet that emergency. 
 
 40. A sells to B national bank stock and delivers certificate with 
 power of attorney attached, which B holds and does not transfer the 
 stock out of A's name. Nearly five years after the bank make an 
 assessment and claim it of A. Is he liable ? 
 
 A. Where it is provided by the by-laws of a national banking 
 association, under authority of the Banking act, that " the stock 
 of this bank shall be assignable only on the books of this bank, " 
 the decision of the New York Court of Appeals in Johnson v. 
 Underbill, 52 N. Y., 203, justifies the conclusion that in New 
 York, at all events, A would be held primarily liable to the 
 
30 
 
 BAXKS, 
 
 assessment in tlie case above stated. Jolinson v. Underhill, it is 
 true, was a case coniinir under the joint-stock incorporation law 
 of New York, l)ut the decision turned upon a jtrovision of that 
 law identical in elfect with the by-law above quoted. The 
 Court held tluit the vendor's pei'sonal liability continued as long 
 as tlie stock remained in his name; but at the same time it was 
 decided that whatever amount he should be compelled to pay 
 under these circumstances could be recovered by him from his 
 vendee. The National Banking act itself declares that " every 
 person becoming a shareholder by such transfer shall, in propor- 
 tion to his shares, succeed to all the rights and liabilities of the 
 prior holder of such shares." Where no such by-law as we 
 have quoted exists, no doubt the transferee would be liable in the 
 first instance, under this clause. 
 
 41. Is a stockholder in a banking or industrial corporation per- 
 sonally and individually responsible for all the liabilities of a company 
 that has become mvolved ? 
 
 A. Most of the joint stock companies in this State are 
 formed under a law which protects the stockholders, if the law 
 is complied with, from all further individual liability. As to the 
 banks, a few by charter and national law, are protected from all 
 personal liability ; but in most of our banks the stockholder is 
 liable for his share of any deficit to the extent of his stock. 
 That is, if a bank of ^100,000 capital becomes involved, and 
 owes 1100,000 above its assets, a man who owns f 1,000 of its 
 stock would lose his investment and have to pay in to the credi- 
 tors 81,000 more. But if half of the stockholders could not re- 
 spond to such an assessment, the solvent among the list need not 
 contribute for that delinquency. If the loss calls for an assess- 
 ment of half, or any otlier portion of the par value of the stock, 
 each stockholder can be called upon only for his own share, and 
 the creditors will lose the amounts assessed against the stock- 
 holders who cannot respond. 
 
 42. Would not a director who had thus withdrawn and received 
 payment out of the funds of the bank be bound to return the amount 
 received with mterest, and be liable m case of failure or loss of the 
 bank, and would he not be hable to breach of trust as director ? 
 
BAIiKS. 
 
 31 
 
 A. No one, whether a common shareholder or director, would 
 be liable if the bank should subsequently fail, except for an 
 amount equal to the stock he held in the reduced capital, provided 
 the payment to him was not in excess of the sum actually due, 
 and was not itself an infringement of the actual capital as stated 
 after the payment. 
 
 43. Why are national banks prohibited from lending on their 
 shares of stock ? Why is it inexpedient to lend on its shares of stock ? 
 
 A. A bank might be started with $5100,000, all lent out again 
 to the stockholders on a pledge of the certificates, and thus there 
 would not be a dollar of capital or security for the depositors, if 
 the banks were not prohibited from lending on their own stock. 
 
 44. In the case of the assets of a national bank being deemed 
 inadequate to meet its liabilities, and the stock having materially fallen 
 in value, say 25 per cent., what recourse has a stockholder to protect 
 himself against further depreciation ? 1 understand of course that the 
 billholders are protected from loss, but has the Government any right 
 to intervene for the protection of stockholders when it is apparent that 
 the capital of a bank has become impaired by losses ? If so, on whose 
 application is this done ? 
 
 A. An application to the Department at Washington on 
 behalf of the stockholders will lead to an examination of any 
 such bank, and if its stockholders require any active protection, 
 to the institution of the proceedings necessary to such a result. 
 
 45. Can a national bank, under the National Bank law, refuse to 
 transfer its stock when a certificate is presented properly indorsed by 
 a responsible party, assigning as a reason that the party in whose name 
 the stock stands is a debtor to the bank ? Has such a bank the right, 
 under the law, when issuing a certificate of stock, to write or stamp on 
 the face of it words to the efi'ect that the bank will not transfer the 
 stock while any hability exists against the party in whose name the 
 stock stands," although none exists at the time the stock is issued ? 
 
 A. The United States Circuit Court, District of Indiana, in 
 Evansville Bank v. Metropolitan Bank, held that a by-law of the 
 bank that no transfer of stock should be made without the con- 
 sent of the board of directors by any stockholder who was 
 indebted to the bank, is in violation of the 35th section of the 
 National Bank act, and not binding. (10 Am. Law Reg. N. S. 
 774.) The above decision rests upon the authority of the United 
 
32 
 
 BAyKS. 
 
 States Supreme Cmirt in the case of Bank v. Lanier, 11 Wallace, 
 3»;9. Here the i»lea Avas that the bank was organized, and its 
 l)v-hi\v forbidding transfer of stock while indebted, etc., adopted 
 under the oGth section of the act of 18G3, but the court rejected 
 the contention, saying: " Congress evidently intended, by leaving 
 out of the law of 1801 tlie 3Gth section of tlie act of 1863, to 
 relieve the holders of bank shares from the restrictions imposed 
 by that section. The policy on the subject was changed, and the 
 directors of banking associations were in effect notified that 
 thereafter they must deal with their shareholders as they dealt 
 with otlier ])eoi>le. As the restrictions fell, so did that part of 
 the by-law relating to the sul)ject fall Avith them." The clause 
 in question, therefore, stanii)ed on the certificate, is of no validity. 
 
 46. Can a director who is under protest in the bank as indorser 
 vote his stock at an election for directors of said bank ? 
 
 A. The law provides that " no shareholder whose liability is 
 
 past due and unpaid shall be allowed to vote." If a director is liable 
 
 as an indorser of a i)ast due and unpaid obligation, he cannot 
 
 legallv vote on liis own stock, altliough he might vote as the proxy 
 
 of another. 
 
 MISCELLANEOUS. 
 
 47, Will you give me some authorities on the question of usury as 
 appUcable under national bank charter, especially as to pleas in usury 
 and the action for penalties as prescribed by the charter ? 
 
 A. The following are all the cases we have on our record, 
 which we tliiidv Avill be of interest : 
 
 The penalty for usury under the National Bank act is not 
 recoverable by an action in the courts of New York. — Hintermeis- 
 ter V. First National Bank (1875), 5 Tliomp. A' C, 484; 3 Ilun., 
 345. lieversed, by Court of Appeals, 18 Alb. Law Jour., 163. 
 
 The United States Statutes of 1864, ch. 106, sec. 30, limiting 
 the forfeiture for usurious charges by national banks to the 
 interest, applies to banks in all the States, and supersedes the 
 State laws on that subject. — Central National Bank v. Pratt, 115 
 Mass., 539. This exercise of power by Congress is constitutional. 
 Same case, ai)proving 22 Ohio St., 492, and disapproving 50 New 
 York, 95. 
 
 National Ixmks may take the rate of interest limited by the 
 
33 
 
 State law, without incurring the penalty of usury. — Tiffany v. 
 National Bank of Missouri, 18 Wall. (U. S. Supreme Court), 
 409 ; Wiley v. Starbuck, 44 Ind., 298. 
 
 A contract made by a national bank in Xew York at a higher 
 rate of interest is void. — First Xational Bank v. Lamb, 50 New 
 York, 95 ; 57 Barb., 429. Reversed by U. S. Supreme Court in 
 Farmers and Mechanics' National Bank v. Fearing, 12 Alb. Law 
 Jour., 310. 
 
 The penal consequence of making a usurious loan by a national 
 bank is forfeiture of twice the amount of illegal interest, under 
 section 30 of the National Bank act of June 3, 1864. The prin- 
 cipal debt is not forfeited. Nor does the mere fact that such a 
 loan is prohibited by statute, without any words declaring the 
 contract void, preclude the bank from recovering back the 
 amount loaned. — Bank v. Moore, 2 Bond, 170. 
 
 In an action by a national bank against the indorser of a note, 
 he cannot plead usury, the right of action for the usury being in 
 the drawee. — Bly v. Second National Bank of Titusville, 14 Alb. 
 Law Jour., 298. 
 
 In an action to recover the principal of a usurious debt, more 
 than two years after the payment of the usurious interest, the 
 debtor cannot set off the amount of such usurious payment against 
 principal. — Higley v. The First National Bank of Beverly (Ohio), 
 13 Alb. Law Jour., 388. Before judgment, the penalty for 
 taking usurious interest by a national bank does not bear interest. 
 —Ibid. 
 
 Plaintiff can recover twice the amount of interest paid in excess 
 of the legal ra^e.^Hintermeister v. First National Bank, etc., 13 
 Law Jour., 163. 
 
 48. A B deposited in a national bank $] 00, for which said bank, 
 in compliance with his request, issued its certificate of deposit, which 
 reads as follows : 
 
 National Bank, March 30, 1878. 
 
 Tliis day C D has deposited in this bank $100, which sum will be paid him, 
 or order, upon the surrender of this certificate. Signed, E. F. G., Cashier. 
 
 Anterior to this, judgment had been obtained against A B, and the 
 judgment creditors had the proper garnishment served on the bank on 
 the 10th day of April 1878. to answer. On the ISthof April, Ix^fore 
 the bank answered the suggestions, A B went to the bank and do- 
 
 3 
 
84 
 
 JLiXKS. 
 
 manded the money for liis certificate. The bank refused to pay on 
 account of said prarnisliment. On the subsequent day A B appeared at 
 the counter of another banking house and requested the banker to give 
 him the money on the certificate. Knowing nothing of the former 
 proceedings in the case, the certificate was cashed at its full face value. 
 The next day the certificate was presented to the national bank for 
 payment, which was refused for the reason given above. The case 
 came up in court on the garnishment, and the national bank answered 
 that there was nothing at the credit of A B, but the amount was to the 
 credit of certificate account, and that a third party claimed the money 
 as holder of the certificate. The case was fully argued for judgment 
 creditors and the bank. The court decided that judgment creditors of 
 A B were entitled to the money, and not the banker who cashed the cer- 
 tificate. Will you be kind enough to give me your opinion as to who 
 is legally entitled to the money ? If there have been any judicial 
 opinions in similar cases please refer to them. 
 
 A. The above certificate of deposit, being negotiable in form, 
 ve think could no doubt liave been transferred to the banking 
 house whicli actually cashed it, in such a manner that the deposit 
 would not have been subject to the demands of A B's creditors. 
 What ai)pears to us to be the fatal defect of A B's case, however, 
 is this : After he had demanded the dei)osit and it was refused 
 liim, the certificate became an over-due obligation, subject to 
 whatever equities might exist between A B and his creditors. 
 Authority for this point is scarcely needed, but it may be found 
 in Daniels on Xegotiable Instruments, ii, 604 ; and Coye v. 
 Palmer, 16 Cal., 158. An equity in favor of A B's creditors liad 
 attached to the certificate before it was transferred, and when 
 transferred it was an over-due instrument. We therefore think 
 the decision sound. 
 
 49. In February last R procured from a New York bank a certifi- 
 cate of deposit for SI 00 payable to the order of H. and deposited it in 
 a United States ^Mail Letter Box, sealed in envelope and directed to 
 H, who resides out of town. H has never received it, and its pajrmenb 
 has never been demanded by others though nearly three months have 
 elapsed. H having never endorsed the certificate, no one can obtain 
 the money unless by forging his name, and hence the bank canno' 
 rightfully pay or be compelled to pay the amount to any othej person 
 The bank officers know H to be a responsible man. H consc^^t^ tc 
 give the bank his receipt in full for the certificate on receiving .:i?s 
 amount, but objects to giving security. Has the bank any iegai ■ 
 moral right to demand of H, as a condition to paying him this monev, 
 that he shall give a bond of indemnity or any security against the 
 
BANKS. 
 
 35 
 
 future presentment of this certificate "by some other person ? The case 
 seems different from that of the usual check, which the bank has not 
 obxigated itself to pay. 
 
 A. The payee has no right to insist that the bank shall pay 
 with nothing but his word between it and a second payment. If 
 the certificate is found H can endorse it and pass it, and the new 
 holder can compel the bank to make it good. H promises that 
 he will not do this ; his character makes it probable that he will 
 keep his promise ; but the bank is entitled to a bond besides. 
 
 50. In the year 1863 the Union Bank of obtained a judgment 
 
 against one of our customers, which never having been paid, remains 
 on record. Subsequently the bank changed its title and charter from 
 a State to a national bank, and is now known as ''The Union National 
 
 Bank" of . Now, can the latter institution re\^ve this judgment, 
 
 there being nothing on record to show that this claim was ever assigned 
 to the national from the State bank, or, can the judgment be revived at 
 all, there being no longer any such bank acting under a State charter ? 
 
 A. In this State the transfer of title to property from a State 
 to a national bank, the latter succeeding the former, need not be 
 made by assignment, as it is done by statute in the enabling 
 act thus : " All the assets, real and personal, of the said bank, 
 shall immediately by act of law, and without any conveyance or 
 transfer, be vested in and become the property of the national 
 banking association into which said bank shall have been con- 
 verted." The national bank thus owns the judgment belonging 
 to the State bank, and may revive it precisely as the other could 
 if vo change had been made. 
 
 5 1 . Can you tell me the laws of the State of Ohio in regard to 
 foreign banking capital ? perhaps you might quote the statute. 
 
 Ac Every company, association, or person, not incorporated 
 under the laws of Ohio, or of the United States, who shall have 
 a place of business in that State, and engage in lending money, 
 receiving deposits, buying and selling bullion, bills of exchange, 
 notes, bonds, stocks, etc., is declared to be bankers, and they are 
 rec uired to make annual return under oath of the (1) amount 
 of bills receivable purchased or discounted, and considered col- 
 lectible ; (2) the average amount of accounts receivable ; (3) 
 the average amount of cash ; (4) average amount of stocks, 
 
36 
 
 BAJi'KS. 
 
 bonds, c^'c, in any way represcntinij: assets ; (5) average amount 
 of real estate at assessed value ; (6j average amount of all do- 
 posits ; (7) average amount of accounts payable, exclusive of 
 current deposit accounts ; (8) amount of ca])ital paid in or em- 
 ])loyed. From the aggregate sum of the first live items the 
 auditor is required to deduct the aggregate sum of the fifth (so 
 tlie law reads, though it seems to conflict with the previous 
 clause), sixth, and seventh items, and the remainder thus obtained 
 is subject to taxation the same as other personal property in the 
 same city, ward, or township. (Ohio Revised Statutes, 1880, 
 sections 2,758, 2,759.) 
 
 52. A national bank advertises the following business : 
 
 "Bills of cxclinn.ire and letters of credit on Europe, remittances through the 
 mails to Europe, collections of claims, inheritances, etc , in Europe, certificates 
 of passage to and from Europe." 
 
 The question arises, can a national bank transact such business under 
 its charter ? And if not, does it thereby forfeit its charter ? Who 
 is responsible to its customers in such transactions ? If a loss should 
 result out of sucli transactions cannot the stockht)lders throw it off upon 
 the officers of the bank ? 
 
 A. Unless the bank can legally engage in the business de- 
 scribed, its officers cannot bind the corporation to any contract, 
 or fix upon it any liabilities in connection therewith. For, 
 
 One principle will always hold, viz.: that w^liatever is beyond 
 the power of the corporation is, a fortiori, hejond that of the 
 directors, and therefore in considering the legal effect of any 
 proceedin<^ done, entered upon or ratified by them, we must first 
 consider whether such proceeding could have been done, entered 
 u})on or ratifiedby the corporation itself." — Green's Brice's Ultra 
 Vires, 411. The collection of every kind of business paper is 
 regarded by the courts as a part of the banking business. — 
 (Morse on Banks and Banking, 322.) But " a banking corpora- 
 tion can engage in no business transaction which is not, properly 
 speaking, of a banking nature." — Ih., 5. The issue of passage 
 tickets to Europe is clearly not of this nature. The collection of 
 inheritances is more in doubt, but the l)usiness might be con- 
 ducted in such a way as to constitute legitimate banking. As 
 to the forfeiture of the charter in such a case, the act, if legal, 
 
BANKS. 
 
 3T 
 
 might work a forfeiture if the Government chose to institute 
 proceedings to tliat end, but in a doubtful or immaterial case, the 
 court would not be likely to declare a forfeiture. And if any 
 liability is incurred by reason of an act not within the power of 
 the bank to perform, " the individuals who take part in the pre 
 tended corporate act are responsible."- — (Grant on Corp., 281.) 
 
 53. Will you kindly state if a banker and his firm (if such embraces 
 others besides him) are liable for the sale of bonds which they declared 
 perfectly good, and which are bought through faith in such statement, 
 if payment of the very first interest due after the purchase is in default 
 and all following payments are disregarded ? 
 
 A. Any one who sells a w^orthless bond, representing it to 
 be good when he knew it to be bad, can be indicted for 
 obtaining money under false pretenses ; but he is irot liable if he 
 has acted in good faith even though the interest is never met. 
 No man is obliged to be infallible in his judgment. We have no 
 doubt that bonds are sold as good when the sellers have reason 
 to know that the investment is a bad one ; but it is difficult to 
 obtain such proof of this guilty knowledge as will bring the cul- 
 prits within the law. 
 
 54. A New York banking-house issues its circular letter of credit 
 for $1,000 to a man going West. This letter requests any one making 
 payments on it to indorse the same on its back. The holder takes 
 his letter to a western banker, and draws $50(i on it. The banker 
 making the payment fails to record it on the back of the letter. 
 The man then presents the letter to another banker in another place, 
 and draws a draft for $1,000, the full amount of his credit. This 
 draft is cashed, and is forwarded together with the letter to New York 
 for collection. In the mean time, however, the first draft has been 
 presented and paid, and when the second is presented it is refused, as 
 there is only $500 remaining in the hands of the banker to the credit 
 of the letter against which it is drawn. Now, who loses that $500, 
 the man to whom the letter was issued having absconded ? 
 
 A. The New York banking-house must pay that one thousand 
 dollars, and can recover the five hundred of the agent who drew 
 the first draft and failed to make the indorsement. The loss of 
 this modest sum may teach him a lesson worth the money. The 
 holder of the thousand dollar draft and the letter authorizing it 
 can collect the same of the New York banker, with damages for 
 non-acceptance, and interest from the day of demand. 
 
38 
 
 BAyKS. 
 
 55. D & Co. are Western bankers keeping an account with a 
 Chicago bank, and frequently telegraph for money for various purposes. 
 It is known to the Chicago bank that one of the partners is away on a 
 short trip. They receive a forged telegram from D & Co. to send $100 
 
 by mail to Henry Jones, care of Hotel. St. Louis. As Mr. Jones 
 
 is' a swindler, who loses the money, D & Co., Chicago bank, or tele- 
 graph company ? 
 
 A. Wc suppose that our correspondent means to say that the 
 l)ank received a telegram purporting to come from D & Co., 
 wliich ])rovcd to be a forgery. This being true, the l)ank loses 
 the money unless it can catch the rogue. The telegraph com- 
 pany is not responsible unless it guarantees the signature. This 
 it is always ready to do for a consideration. Had this been re- 
 quired the fraud would have been detected. 
 
 56. 1. If A, who is cashier of the National Bank at C , dis- 
 counts a draft payable at D , and indorses the draft '-Pay to 
 
 D or order for acc't of Nat. B'k C , A , cashier," is A 
 
 liable individually, or does his indorsement bind the bank only ? 
 
 2. If the bank only is liable upon the above indorsement, suppose 
 A should indorse the said draft as cashier, omitting the name of his 
 bank, would parole evidence be admissible to supply the name of such 
 bank, and thereby fix it with liability ? 
 
 3. Suppose the'bank C sliould fail after A, cashier's endorsement, 
 
 could A be held individually liable if draft was returned protested ? 
 
 A. 1. There can be no question where a bank officer is au- 
 thorized to indorse for the bank, and as in this case gives the 
 name of his bank as well as his own, the bank alone is bound 
 and he incurs no individual responsibility. Chitty on Bills, ch. 
 2, pp. 37, 38 ; Story on Agency, sec. 153 and note 275 ; Wilks v. 
 Bach, 2 East., 142, and a host of other authorities. 
 
 2. Where the name of the principal was omitted it was once 
 held that the agent was personally liable, but this rule lias been 
 modified until the following is the principle generally accepted : 
 " If it can, upon tlie whole instrument, be collected, that the true 
 object and intent of it are to bind the principal, and not to bind 
 the agent, coui-ts of justice will adopt that construction of it, 
 however informally it may be expressed." Story on Prom. 
 Notes, sec. 69 ; Pentz v. Stanton, 10 Wend., 271 ; Mec. Bk. Alex- 
 andria V. Bk. of Columbia, 5 Wheat., 326, and many others. 
 
 3. The failure will not affect the question. It is admitted 
 
BANKS. 
 
 39 
 
 that the signature of a bank officer as such, with his official title 
 attached, made in the regular course of business, in a manner 
 usual and customary, and for which he is duly authorized, binds 
 only the bank in any event. Only in cases where he signs 
 wholly without authority is he held personally liable, and here, 
 although the question is disputed, the authorities are inclined 
 to hold that he is not liable on the instrument itself as in- 
 dorser, but in a separate action. The " indorsement by the 
 cashier of a bank, ' A B, cashier,' is sufficient to pass title of the 
 bank, unless he is prohibited by the by-laws of the corporation." 
 Story on Prom. Notes, sec, 137 ; Fleckner v. Bank of the U. S., 
 8 Wheat., 360, 361 ; Wild v. Passamaquoddy Bank, 3 Mason, 
 505. 
 
 57. A borrows money of a national bank in New York city; his 
 obligation is dated 1st instant, and is payable on demand. He returns 
 the amount loaned to him at 3 p. m. on the 3d of the same month. 
 How many days' interest does he owe the bank ? 
 
 A. It is the custom of the banks to charge for three days in 
 such a case, but by law no more than two days' interest could 
 be collected. 
 
 58. Is a national bank in the State of New York allowed to 
 charge 7 per cent, interest ? 
 
 A. It is illegal for any bank in this State (N. Y.) to charge 
 more than 6 per cent, for the loan or forbearance of money, but 
 the penalty provided by law for such overcharge in the case of 
 banks is very mild, being a forfeiture of the interest if not yet 
 paid, or a liability to be sued within two years for twice the 
 amount if it has been collected. 
 
 59. A borrows $500 from a national bank and renews it from 
 time to time, paying each renewal illegal interest and part of principal 
 until principal is reduced to $200. Can A before he pays the balance 
 due ($200) recover penalty by suit qui tarn. 
 
 A. An action would lie at any time within two years to re- 
 cover the excess of interest paid, no matter what might be the 
 case as to maturity or the payment of the note itself. The 
 National Bank act declares, in the original, section 30, tliat the 
 action is in the nature of debt; and if our correspondent's 
 
40 
 
 BAXKS. 
 
 inquiry is aimed at that point, we should be inclined to say that 
 though this alone does not preclude tlie action qui tam, yet the 
 fact that the ]>enalty is given entire to the person i)aying the 
 illegal interest, or his legal representatives, seems to render that 
 form of action unsuitable. 
 
 60. In making returns to collector of internal revenue of amount 
 of United States bonds to be deducted from taxable capital, some 
 banks have estimated them at their present market value, others at 
 purchase value, and still others at par value. 
 
 Will you kindly inform us if there has been a recent decision of the 
 Attorney-General or United States Supreme Court authorizing or 
 legalizing either of the first two methods, and if so, please quote the 
 decision ? 
 
 In that case can banks which have deducted bonds at par value 
 recover excess of taxes previously paid ? 
 
 A. The opinion of tlie Attorney-General, dated October 21, 
 and published in the Journal of Commerce, October 24, 1878, was 
 to the effect that in reckoning the value of United States bonds 
 for the purpose of deducting such amount from taxable bank 
 capital, the ])rice })aid, not including accrued interest, should be 
 taken. 
 
 The United States Treasurer, in a letter to the ^lercliants' 
 National Bank of Baltimore, transmitting the opinion, states 
 that no claim for refund of taxes would be entertained. 
 
 61 . When a national bank reduces its capital must the whole num- 
 ber of shares be reduced pro rata, each shareholder receiving a reduced 
 number of shares ? Or would it be lawful to allow certain share- 
 holders to withdraw, the bank paying them a certain sum of its assets, 
 thereby relieving such shareholders from any liability that might fall 
 on them in case of the bank failing ? Or would not such shareholder 
 be bound to return the amount received from the bank for the benefit 
 of all shareholders, and assume his liability with other shareholders ? 
 
 A. Any plan of reduction to which the shareholders assent, 
 which leaves tlic capital of the bank at the sum nominally repre- 
 sented, if it meets the approval of the Comptroller of the Cur- 
 rency as provided for in section 5,143 B,. S., and is not below the 
 le-gal limit, is lawful and proper. 
 
 62. A pays to a national bank in a western city a sum of money 
 for them to place to credit of B, in New York, by telegraph. The 
 bank telegraphs its correspondents in New York to pay B, who, upo:^ 
 
BANKS, 
 
 41 
 
 asking for the money, is informed that the bank will not pay on a tele- 
 gram, as it might be fraudulent. In the meantime B receives draft, 
 draws check on bank having this money (or at least telegraphic 
 notice), and the bank allows it to go to protest. Has B any redress ? 
 
 A. The New York bank has not brought itself under any 
 obligation to B, and hence the latter has no claim upon it. A at 
 the West pays liis money to C-bank, the latter agreeing that 
 D-bajik in New York shall repay the money to B. If D-bank 
 will not do it on the receipt of the telegram, no one has any 
 claim on D-bank for the resulting damage, unless it has con- 
 tracted or bound itself to pay on such notice. B may fall back 
 on A, if the latter has agreed to pay certain funds on a given 
 day in New York, and has failed in his arrangements. A can 
 then collect his damages of C-bank, the latter having undertaken 
 a service it failed to perform. The C-bank can then recover 
 of the D-bank, if the latter had agreed to obey its orders by tele- 
 graph, and then refused to acknowledge it. But the probability is 
 that the C-bank will have to stand in the gap, as it appears to 
 have undertaken a task for which it had made no provision, and 
 which it therefore failed to execute. 
 
 63. A person holds a certificate of deposit payable to his order, 
 which he indorses to another, but afterward calls at the bank and re- 
 quests that payment be refused. Ought the bank to refuse payment ? 
 Is there a difference between this and the person's check drawn to his 
 own order and indorsed ? Could he stop payment of his check ? 
 "Would it make any difference whether the certificate or check was in- 
 dorsed in blank or to the person presenting it ? 
 
 A. A certificate of deposit stands on a footing totally differ- 
 ent from that of a check. The latter is an order of the drawer 
 to pay the holder or payee so much money. If this is counter- 
 manded there is no such obligation on the bank to pay it : it has 
 nc order. But a certificate of deposit is a promise or undertak- 
 ing on the part of the bank to pay on the return of the certifi- 
 cate properly indorsed, and the bank refuses at its own risk 
 when due demand is made. If the original holder lias lost the 
 certificate, or claims to have been defrauded of it, the bank will 
 sometimes refuse payment to the presenter for the sake of help- 
 ing the loser to recover. But it is liable for damages if it thug 
 refuses a bona fide holder for value. 
 
42 
 
 BANKS. 
 
 64. A national bank was recently suod in trover in our State 
 courts. The question has arisen among our lawyers as to whether the 
 national bank can have the case removed to the Federal courts. 
 
 A. If the suit involved, as it probably would, the construction 
 of '"any law })rovidini!,- for national banking associations," the 
 bank would have the right to transfer the same to the United 
 States Circuit Court for that district. Rev. Stat., sec. 629, para- 
 graph 10. 
 
 65. We hold some coupon bonds of a western city, on the back of 
 which is the following indorsement: " For value received the National 
 Bank of Blank hereby guaranties the payment of this }x)nd. (Signed) 
 John Smith, Cashier.'' The same indorsement was made upon the 
 back of the coupons, but has been mostly cut off in cutting the 
 coupons. State whether or not the indorsement will hold the bank 
 for the payment of both the principal and interest, or if not, whether 
 or not it will hold the cashier personally ? 
 
 A. The only way in Avhicli a National Bank could find 
 authority to become a guarantor of a municipal bond would be 
 under the general clause of the bank act, giving it the poAvers 
 incidental to the business of banking. If the bank had taken 
 the bonds as collateral, and was obliged to guaranty their pay- 
 ment in order to realize its debt, it is possible that the guaranty 
 might be sustained under this clause. The question, however, is 
 a new one, so far as any adjudication is concerned, and the prima 
 facie case is against the validity of the guaranty. Morse, in his 
 treatise on banking, says : " It is a general rule that a bank has 
 no powder to engage as surety for another in a business in wiiich 
 it has no interest and from w^hich it can derive no profit. There- 
 fore it has no right to become an accommodation indorser." And 
 its indorsements for value received must no doubt be incidental 
 to tlie business of banking, and if the guaranty had this charac- 
 ter tlie circumstances need to be shown. 
 
 The form of the guaranty is such that we think it cannot, in 
 any event, create any personal liability on the part of the 
 cashier. 
 
 66. Have banks, organized under the national or State law, the 
 right to issue commercial letters of credit ? Also, have they the right 
 under their charters to obtain letters of credit from any foreign bank 
 or bankers to or with their correspondents with bills of lading at- 
 tached ? 
 
BANKS. 
 
 43 
 
 A. We see no legal objection to this business as we under- 
 stand it. 
 
 67c A national bank issues its certificates of deposit in the usual 
 form, payable on demand, stipulating that they shall bear interest at 6 
 per cent, if left three months. Desiring to reduce the rate of interest 
 it issues a letter to depositors holding certificates, as follows: " Hav- 
 ing resolved to call in all certificates of deposit which are drawing in- 
 terest at 6 per cent., you will at your earliest convenience present for 
 
 payment, or re-issue at 4 per cent., certificate No. , for $ , 
 
 dated . Notice is hereby given, and it is understood that your 
 
 certificate will cease drawing interest after February 1 next." 
 
 Has a bank the power, without going into liquidation, thus to cancel 
 its contract with its depositor ? If the depositors refuse to present 
 their certificates, will they cease to draw interest after February 1 ? 
 Does the option in this case rest in the bank or the depositors ? 
 
 A. Money due on demand is also payable on demand, and if 
 tender of payment is made, that stops all interest on the same 
 thereafter, or reduces it to a rate offered by the debtor, at his 
 option. The bank may, therefore, by notice to the holder, stop 
 all interest after a fixed date, or may offer a continuance at a 
 lower rate. Both parties have the same option. 
 
 68. Mr. Jones hands to cashier of National Bank ten thousand 
 dollars of railroad bonds with orders to send to New York for sale, 
 and credit to his account. Owing to decline in price he instructs 
 cashier to hold until further orders. Suddenly cashier commits for- 
 gery and other things, and on examination it is discovered that these 
 bonds have been sold and no return made. Can the owner hold the 
 stockholders of the bank for the amount received, or for any loss oc- 
 curring through this transaction ? Are the stockholders of national 
 banks responsible for losses incurred by the cashier in transactions not 
 directly pertinent to their business ? Suppose the owner had given a 
 car of grain to the cashier to sell for him under the same circum- 
 stances and with same result, would the bank be responsible, and is 
 there not some limit to the acts which the officers of a national bank 
 may do legally ? 
 
 A. We do not think that the bank can be held legally re- 
 sponsible for such a breach of trust on the part of the casliier. 
 
 SAVINGS BANKS. 
 
 69. T have funds in a savings bank and have lost my book. The 
 bank refuses to give me a new book or pay the money without my 
 bond, with a satisfactory surety, to hold it harmless. I cannot give 
 such a bondsman. Please tell me, if you can, how I am to get my 
 money ? As I cannot comply with the rule of the bank, I suppose 
 
44 
 
 BAXKS. 
 
 there miist be some utiier way in whicli I can get it, and tlie bank be 
 protected. 
 
 A. Most savings banks, where the depositor can be identified 
 beyond question, will issue a new book after a reasonable adver- 
 tisement of the loss of the old one. We presume the bank in 
 question will do this. If it refuses, the courts will compel it to 
 pay the money due. 
 
 70. Having an account in the Bowery Savings Bank in this city, 
 I wish to say that a party got possession of my pass-books and drew 
 from the bank the greater part of my deposit without my knowledge, 
 and now the bank, after mature consideration, deny me the amount so 
 drawn. Now I wish to know if I can obtain redress for my loss by 
 putting the case in court ? 
 
 My case is this: the money was drawn with the aid of the pass-book 
 but the signature is not the same as my own. 
 
 A. One of the conditions of the deposit is that the bank is 
 exonerated if a payment is made on presentation of the bank 
 book. If the depositor can show that the bank did not use due 
 diligence he might make a case against the bank, but our judg- 
 ment is that he cannot recover. 
 
 7 1 • Suppose some promissory notes are made payable at a savings 
 bank where the payee has an account, and the bank declines to receive 
 them on the ground that they do no commercial business, does this re- 
 fusal invalidate the notes ? or what is the best course to pursue ? 
 
 A. The notes should not be made payable at a savings bank, but 
 they are just as valid, only if the bank declines, the maker must 
 provide some other method of paying them when due, or they 
 may be protested. 
 
 72. Are savings banks restricted by law to the payment of only 5 
 per cent, interest on deposits, or can they declare a dividend to make a 
 higher rate ? 
 
 A. The savings banks in this State (X. Y.) are restricted to 5 
 per cent, regular interest or dividends. They must, however, 
 declare an extra dividend at least once in three years, when 
 their surplus earnings amount to 15 ])er cent, of their deposits. 
 
 73. (1.) Does the law fix any time in which the receiver of a broken 
 savings bank shall close up its affairs, declare final dividend, and ren- 
 der account ? 
 
 (2.) Is there any way by which a savings bank or its depositors can 
 
BAXKS. 
 
 45 
 
 rid themselves of a number of bankrupt trustees, who have neither the 
 confidence of depositors nor of their fellows ? 
 
 A. (1.) It would be quite impracticable to fix such a limit by 
 law, but the receiver is subject to judicial directions in these 
 particulars, and may be called to account if guilty of unreasona 
 ble delay. 
 
 (2.) If the bankruptcy of the trustees endangers the trust 
 funds, there is some precedent for the exercise of the equity 
 powers of the courts to remove them, but it appears to us rather 
 doubtful if sufficient grounds are here stated for such a course. 
 
 74. Who elect the trustees and directors of savings banks when 
 vacancies occur ? 
 
 A. In this State under the revised statutes the savings banks 
 are made virtually close corporations, the existing trustees 
 having power of self perpetuation in the filling of all vacancies. 
 
 75. Mass. — What is the proper form of notice to the secretary of a 
 savings institution, in order to withdraw an amount requiring sixty 
 days notice ? 
 
 A. A written notice that the subscriber intends to withdraw a 
 stated amount of money is the proper form, but a verbal notice 
 is legally sufficient. 
 
 76. What are the laws in some of the Eastern States in regard to 
 directors or trustees and officers of savings banks being forbid to bor- 
 row money of the institutions with which they are connected ? 
 
 A. The Massachusetts Savings Bank law of 1876 provides 
 that " no member of a committee or board of investment, or officers 
 of such corporation charged with the duty of investing its funds, 
 shall borrow or use any portion thereof, be surety for loans to 
 others, or in any manner, directly or indirectly, be an obligor for 
 money borrowed of, or loaned by, the corporation." (Supple- 
 ment to Gen. Stat, of Mass., 450.) 
 
 The Connecticut law provides that " no officer of a savings 
 bank shall be a borrower, or surety for a borrower, of any of 
 its funds, nor receive any money or valuable thing, for negotiat- 
 mg, procuring, or recommending any such loan from such bank, 
 or for selling or acting in the sale of any stocks or securities to 
 such savings bank, and any such officer, who shall violate any 
 
46 
 
 BILLS OF EXCHANGE. 
 
 provision of this section, shall forfeit to the State 81,000," 
 (General Statutes of Conn., Rev. of 1875, p. 292.) 
 
 The hnv of Maine forbids the deposits and funds of savings 
 banks to be loaned " directly or indirectly to any one of the 
 trustees, or any hrni of which he is a member." (Maine R. S. 
 1871, 421.) The Rhode Island law has a simple provision of the 
 same kind. (R. S. 1857, 292.) 
 
 BILLS OF EXCHANGE. 
 
 (See also drafts.) 
 
 1 . Does the acceptor of a bill of exchange become personally liable 
 for its payment at maturity, or can he then plead " no funds," or that 
 the drawers have not complied with their obligations, and on proving 
 this, escape ? This question is of interest, as it appears by French law 
 that a party once accepting a bill must pay it or go into bankruptcy ; 
 whereas by English law there are certain cases in which he is not liable. 
 What these cases exactly are we have up to the present been unable 
 to find out. Please state what the exceptions are, if any, by American 
 law. 
 
 A. According to Story " by the law of England, an accept- 
 ance of a bill of exchange binds the acceptor to payment at all 
 events." (Story on Bills of Exchange, sec. 140. 4th Ed.) So 
 too, in this country, the same author observing, in section 164, 
 that " by our law it is absolute and binding in every event." 
 But, in the section lirst cited, he points out the existence of 
 another rule. " By the law of Leghorn if the bill is accepted and 
 the drawer fails, and the acceptor has not sufficient effects of the 
 drawer in his hands at the time of the acceptance, the accept- 
 ance becomes void." By the rule that the law of the place of 
 the contract governs its interpretation, it has once happened that 
 the Leghorn law^ determined a case decided in the English courts 
 (Burrows v. Jemino, 2 Strong, 733). Story's statement of the 
 English law, however, which differs from our correspondent's 
 conception of it, is also supported by Chitty, in his standard work 
 on bills ; and neither writer makes mention of any excei)tion to 
 the liability of the acceptor in any event, save in the custon of 
 Leghorn above stated. Of course we are now speaking of a 
 general acceptance, to which the payee is always entitled. If he 
 permits the acceptor to make conditions, they will take the case 
 out of the general rule. 
 
BILLS OF EXCHANGE. 
 
 47 
 
 2 . Is it proper to deliver a bill of lading when a sight or time bill 
 is accepted ? If no, whose loss is it, if the goods be perishable and are 
 injured while waiting for maturity of the bill ? 
 
 A. The United States courts have recently decided that a bank 
 through whose hands a bill of exchange, with bill of lading at- 
 tached, is sent for collection, is bound to deliver the former when 
 the latter is accepted, unless it has express instructions to the 
 contrary. 
 
 3. A documentary (wheat) bill of exchange, drawn here on parties 
 in England, goes to protest for non-payment. Is it obligatory on 
 the holders of the bill to sell the cargo, or may not other friends of the 
 drawers, without the consent of the acceptors, take up the bill and 
 receive the documents without prejudice to or further accountability 
 on the part of the holders ? 
 
 A. Where the acceptor fails, another party, with the consent 
 of the holder, may pay the bill for the honor of the drawer, or of 
 any one of the indorsers, and become the custodian of the pro- 
 perty designed for its security. He cannot intervene if the 
 holder refuses his consent, but he need not ask permission of the 
 insolvent acceptor. 
 
 .4. If a bill of exchange is protested for non-acceptance, or a note of 
 hand made by a party who becomes insolvent before it is due, and 
 guaranty is refused by an indorser, can the holder, by the laws of 
 England and the United States, obtain an attachment on the estate of 
 the surety ? And if so what is the responsibility of the party so ob- 
 taining the attachment, in case the bill or note be ultimately paid at 
 maturity ? 
 
 A. Chitty says " in this country (England) if the drawee, on 
 presentment for acceptance, dishonor the bill, either wholly or 
 partially, the holder may insist on immediate payment by the 
 parties liable to him, as well from the drawer as from the 
 prior endorsers ; or in default thereof may immediately com- 
 mence actions against each of them ; and though the instrument 
 may be somewhat like a note, yet if it also resembles a bill, and 
 acceptance be refused, an action is inamediately sustainable.'* 
 (Chitty on Bills, 341.) 
 
 " The same doctrine has been repeatedly recognized in the 
 United States." (ib, note.) This being so, the suit may be 
 commenced by attachment, provided the other conditions of an 
 
48 
 
 BILLS OF EXCHAXGE. 
 
 action by attachment exist. These are statutory, and varj 
 more or less in all the States ; but generally, we think, an at- 
 tachment may be had if there is reason to apprehend that the 
 creditor is about to remove property from the jurisdiction of the 
 court where the action is brought. Respecting promissory notes, 
 an attachment may be had in some of our States before the debt 
 is due, but so far as we know, not so in England. In New York 
 wliore credit was given upon condition that the debtor would 
 make certain consignments of merchandize to the creditor as 
 security, and after obtaining the credit be refused to ship the 
 goods, the creditor was allowed an attachment before his 
 debt matured. (Ward v. Begg, 18 Barb., 139.) 
 
 5. A, of Chicago, 111., draws a sight draft through H & X\, of 
 Chicago, on B, of Augusta, Ga., against a cargo of flour. The draft is 
 authorized by B, but before presentation of the draft B is notified of 
 the death of A. Can B pay the draft legally after notification of the 
 death of A ? The flour was received and partly sold by B. 
 
 A. It will make no difference about the flour, &c. A bill of 
 exchange differs from a check : with the latter the drawee pays 
 at his own risk after notice of drawer's death ; but a bill of 
 exchange if delivered to the payee or his agent, is not affected 
 by the death of the drawer, " and the drawee may accept and pay 
 it." Daniels on Neg. Ins., vol. I, page 372 ; Hammonds v. Bar- 
 clay, 2 East., 22T ; Chitty on Bills, 325. 
 
 6. A, of Wilmington, sells B, of New York, 1000 barrels of tar, 
 free on board, at a certain price. A submits tlie invoice and draws 
 for the amount on B through a bank at Wilmington. Who pays the 
 exchange ? 
 
 A. Tliis will depend on the understanding between the parties, 
 but if nothing is said or implied about this between them, it is 
 suflficient if B in New York cashes here the claim for the face of 
 the bill as rendered. If therefore, with this understanding A 
 draws on New York for the face of the bill, lie must pay what- 
 ever it costs to transfer the result to Wilmington ; in other words, 
 the exchange is at A's expense. If there is any doubt about this 
 it sliould form part of tlie terms of the contract at the time it is 
 made. 
 
 7. Does the responsibility of the drawer and the indorser of the 
 bill cease after same has been accepted, even if not paid at maturity ? 
 
BILLS OF EXCHANGE. 
 
 49 
 
 A. If he does not meet his obligations the drawer and in- 
 dorsers, on due notice of default, are alike successfully bound to 
 make good the promise to the holder, precisely as if acceptance 
 had been refused. 
 
 8. A buys foreign exchange of a prominent banker with agreement 
 to send check for payment of the same by return mail. He fails to do 
 so, and instead makes an assignment; however, he indorsed exchange 
 to B, who took it in settlement of an account, giving his receipt in full, 
 as he knows about the responsibility of the maker. Has the banker 
 (maker) a legal right to stop the payment of the draft ? 
 
 A. The banker is held for the amount of the purchaser of 
 the bill, the latter taking it in good faith, and if he prevents its 
 acceptance or stops its payment on the other side, he is liable 
 not only for the principal, but the damages established by statute 
 for its return protested. 
 
 9. A month ago we sold a bill of goods to a responsible party in 
 a distant city of this State (N. Y.) on the following terms: Goods taken 
 as is, weighed up flat, at price agreed upon and 30 days' interest added 
 to amount of bill; settlement by acceptance of our draft at 60 days 
 from date of bill. We shipped the goods as directed and sent to pur- 
 chaser, by mail, invoice and bill of lading, and our draft for acceptance. 
 The party retains our draft yet, and we cannot get it returned to us. 
 He has written to us once in reply to our request for acceptance, and 
 gave us an evasive answer. The conditions of sale were fully carried 
 out by us, and no complaints have been made by purchaser. We 
 would Hke to know : 
 
 1. By retaining our draft has not drawee made himself liable to us 
 the same as though he had accepted the draft ? 
 
 2. How can we compel the drawee to accept our draft and return it 
 to us, and what is the best course for us to pursue in the premises ? 
 
 3. What is the law governing such a case, and the law generally 
 governing the matter of accepting time drafts ? 
 
 A. The law of this State (N. Y.) has provided for just such 
 cases and is very explicit ; it reads as follows : " Every person 
 upon whom a bill of exchange is drawn, and to whom the same 
 has been delivered for acceptance, who shall destroy such bill, or 
 refuse within 24 hours after such delivery, or within such other 
 period as the holder may allow, to return the bill accepted or 
 non-accepted, to the holder, shall be deemed to have accepted 
 the same." At the end of the 60 days and grace suit may be 
 4 
 
50 BILLS OF EXCHANGE. 
 
 broiiglit upon the draft precisely as if it had been accepted and 
 returned to the liohh'r. 
 
 10. From a correspondent abroad I received the following bill of 
 exchange for collection : 
 
 "On the first day of August pay to the order of A three hundred 
 pounds sterling. B, Master Ship X. 
 
 To Messrs. C B, New York.'' 
 
 A dispute having arisen as to the manner of settlement, please answer 
 the following questions : 
 
 Is the bill payable on the 1st, or on the 4th day of August ? 
 
 Has settlement to be made at the rate for 60 days, or sight prime 
 banker's bills ? 
 
 Is the posted rate or actual selling rate to be accepted for settle- 
 ment ? 
 
 A. All sucli bills, not being land bills, are subject to grace, 
 and the acceptance is due on the 4th of August. 
 The GO-day rate governs. 
 
 The actual market rate for undoubted' bills is all that can be 
 exacted, but settlement is usually made by the posted rates. 
 
 11. £1.000. London, September 24th, 1877. 
 At sight pay to the order of X Y Z one thousand pounds, and charge to 
 
 account of A B. 
 
 To M N, St. Louis, :Mo. 
 
 It was presented for collection by a bank. M N offered to 
 pay on demand at rate current for bankers' 60-day exchange on 
 London, 
 
 Bank threatened to protest unless draft paid at rate current for bankers* 
 sight exchange on London. 
 
 1. ^Vould bank have been justified in protesting ? 
 
 2. If yea, why ? 
 
 3. If nay, why ? 
 
 4. Can such a draft be collected in St. Louis by legal process ? 
 
 5. If yea, at what rate of exchange ? 
 
 6. Would the case be changed were the draft on New York instead 
 of St. Louis, C(Etcr is par ibus ? 
 
 7. If yea, in what particulars ? 
 
 The custom of bankers in New York is to pay such drafts (contain- 
 ing also the clause payable at the current rate of exchange") at the 
 60-day rate. 
 
 8. Has this custom any legal sanction ? 
 
 9. Can payment at a higher rate be enforced ? 
 
 A. There is no law in reference to such a case, as far as we 
 know, save that custom will be maintained by the courts. The 
 law supposes that in drawing and receiving an order of this kind^ 
 
BILLS OF EXCHANGE. 
 
 51 
 
 botli parties know what is tlic usual method of settlement, and 
 that such custom establishes therefore the terms of the compact. 
 Here the settlement for such a bill would be the 60-day rate, and 
 we tliink the bank at St. Louis made a mistake in exacting tlie 
 sight rate under threat of a protest. If suit were brought on the 
 above in the United States Courts it is possible that judgment 
 would be given for $4,866.5 under section 3,565 of the Revised 
 Statutes fixing the value of the pound sterling as the " par of 
 exchange." 
 
 1 2 . Can a merchant doing business in New York refuse to accept 
 bills of exchange drawn on liim by a merchant in a foreign country, 
 because the revenue stamps which the laws of that foreign country 
 demand are not on the bills of exchange when presented ? 
 
 A. If draAvn in England the document without the stamp is 
 illegal, and the drawee should not accept it ; at any rate he should 
 not without requiring the affixing of the stamp. 
 
 13. What time is allowed for the presentation for acceptance of 
 a bill of exchange drawn at 60 days on New York ? 
 
 A. If the bill is drawn at 60 days from date it need not be 
 presented at all for acceptance, as the holder, if he chooses, may 
 wait until it is due before presenting it. If it is 60 days from 
 sight, it must be presented " within a reasonable time," and 
 exactly what this is must be left to the circumstances of each 
 case. The Commercial Code of France fixes the limit according 
 to the different places where the bill is drawn, but here there is 
 no such limit. The bill should be forwarded by due course of 
 mail, and when received at the location of the drawer, ought to 
 be presented within a full day after it comes to hand. 
 
 14. Have there been any decisions in New York State on any case 
 similar to the following ? A paper (of which the following is a copy) 
 is drawn, accepted, and indorsed : 
 
 New York, August 20, 18T4. 
 Four months after date pay to the order of m3'self five hundred dollars with 
 current rate of exchange on New York. John Jones. 
 
 To Johu Smith, Louisville, Ky. 
 
 The above is accepted by John Smith and indorsed by Jones to the 
 Bank of Louisville. Does the insertion of the words current rate of 
 exchange " render tlie sum of money so uncertain as to keep the paper 
 from being a bill of exchange ? 
 
52 BILLS OF LADING. 
 
 A. The above is a proper bill of exchange ; like the addition 
 of " with interest," tlie plirase with current rate of exchange " 
 has a well-known conimercial meaning, and covers a quantity 
 easily ascertained and defined. 
 
 15. Is the drawee who discounts a bill of exchange on a certified 
 copy of the bill, with a duplicate bill lading attached (the original draft 
 and bill of lading having been lost through the mail) justified in pay- 
 ing the certified draft? 
 
 A. If the drawee is protected against any use of the old bill 
 of lading (that is, if it was to his order and consignment) he 
 may pay the draft without fear. 
 
 16. A buys B's bill of exchange on C in London. C accepts the 
 bill and, faihng before maturity, pays fifty per cent, and gets dis- 
 charge in bankruptcy. B also goes into bankruptcy, paying less than 
 fifty per cent. Can A rank on B's estate for the full amount of the 
 bill or only on the balance unpaid by C ? 
 
 A. If both estates are in bankruptcy at the same time, A can 
 prove against both, and collect from each any sum they pay not 
 exceeding the amount due him altogether. 
 
 17. "What are the legal rights of the owner of bill of exchange 
 who has remitted it to Europe with l)ill of lading attached; upon ac- 
 ceptance has surrendered the bill of lading; thereafter and before the 
 maturity of the bill the acceptor fails ; it being further observed that 
 the said bill bears a case of need address ? 
 
 A. Upon the insolvency of the acceptor of a bill of exchange 
 the holder in almost every foreign country has the right to pro- 
 test it at once " for better security ;" and where there is a case 
 of need" clause to apply to this direction for a second accept- 
 ance. If that is refused he may come back on the drawer and 
 require security or indemnification. The rate of damages in 
 such a case is governed by the law here if the bill was drawn in 
 this State. 
 
 BILLS OF LADING. 
 
 1 . What constitutes a date of shipment, the day on which a bill 
 of lading is signed (which is generally the day on which goods are put 
 aboard vessel), the day of clearance, or the day of sailing ? For ex- 
 ample: A sells B a parcel of goods, ''to be shipped from a foreign 
 port diuring the i^onth of January." The goods are put aboard vessel 
 January 30, and bill of lading is so dated, while the vessel does not 
 
BILLS OF LADING. 
 
 53 
 
 clear or sail for 30 days after that. What are B's rights under these 
 circumstances ? 
 
 A. In such contracts the date of the bill of lading has been 
 settled as the date of shipment. This being in January is suffi 
 cient to meet the contract. Where actual clearance or leaving 
 port before a given date is to be exacted, it must be specified in 
 tlie agreement. 
 
 2. Are goods shipped from a certain port on a vessel leaving 
 August 2, bill of lading for said goods being dated July 31, by law 
 considered August or July shipments ? 
 
 A. So far as we have been able to discover, after considera- 
 ble search, the meaning of the word "shipment," in a legal 
 sense, has never been decided. According to Webster it is "the 
 act of putting anything on board of a ship or other vessel ;" but 
 we think the courts, if called on to construe the contract, would 
 inquire whether or no this definition expressed the true meaning 
 of the parties, and if they found that the word in such contracts 
 is generally understood to carry the idea of sailing on the day 
 of shipment, that they would give effect to that construction. 
 If the vessel was advertised to sail in July, and made a bona 
 fide attempt to go to sea, but was hindered by adverse winds, or 
 like causes, we suppose there is little doubt but the transaction 
 would be held to be a July shipment. And even without such 
 an attempt it is still a question whether putting the goods on 
 board in July does not answer the conditions of a contract call- 
 ing for "shipment" in July. 
 
 3 . Would a vessel be liable for short cargo — pieces or feet — under 
 a bill of lading reading as follows: ''Three hundred pieces (300), 
 containing 50,000 superficial feet, more or less, all on board to be 
 delivered " ? 
 
 A. The "more or less," by a strict construction, applies only 
 to the superficial feet, and we think the vessel would be re- 
 quired by an assignee of the bill of lading for value, to deliver 
 300 pieces. 
 
 4. A ships goods to B in Europe, say SI, 000. A gets three-quar- 
 ters advance on invoice of $1,000, say $750, from banker C, in New 
 York, by giving him a bill of exchange 60 d:.ys after sight, made to 
 A's order and indorsed by A, drawn on banker D, in Europe, together 
 with two bills of lidding, certificate of inLurai::o, and invoice, all duly 
 
54 
 
 BILLS OF LADING. 
 
 indorsed by A, as bills of lading and insurance certificate read to 
 order. C sends bill of exchange, bills of lading, certificate of insur- 
 ance, &c., to his correspondent banker E, in Europe, who presents the 
 draft to banker D for acceptance. B, who has an account current with 
 banker D, is notified a draft of $750 has been presented to him for 
 acceptance, and B will have to deposit or make good this $750 before 
 banker D will accept the draft. B makes good this $750 and receives 
 credit for say 55 days' interest before maturity of draft, as well as the 
 amount of the draft, and B now gets possession of two bills of lading, 
 certificate of insurance, and invoice. D now accepts draft and returns 
 it to E without the bills of lading, insurance certificate, and invoice, 
 and E holds draft for collection. Before maturity of said draft banker 
 D has failed. Upon whom does the loss fall ? Is not A released the 
 moment banker E accepts banker D's acceptance of draft and surren- 
 ders the securities ? Now should A be held as maker and indorser of 
 the draft, and compelled to pay the same when returned to New York 
 protested? Has he not the right to demand the identical papers he 
 gave with the draft, such as bills of lading, etc., etc., or has the banker 
 C or E the right to surrender the securities and still hold A as maker 
 and indorser of said draft? Are bankers allowed 10 per cent, protest 
 on this transaction, and how does this atfect B ? Who is entitled to 
 the assets of banker D ? 
 
 A. If the draft is duly protested A is lield responsible for its 
 payment, and only the draft need accompany the demand. Not 
 the acceptance of the draft, but its payment or a failure to pre- 
 sent and protest it, will release the drawer. The ten i)er cent, 
 is allowed by law in this State on drafts returned from Europe. 
 B is responsible for the balance of the account beyond the f 750 ; 
 but in most contracts of this sort the shipper here answers the 
 responsibility as to the banker, and the consignee (B) is usually 
 only held to his agreement that the draft shall be accepted by 
 D; if it is accepted it is then, as most of these engagements 
 read, at the risk of the holder. A has recourse to D, and a 
 claim on his assets. 
 
 5. A k Co. ship a boat load of corn from say Buffalo to New 
 York, consigned to order of John Smith, Cashier. Bill of lading 
 comes forward, and on demand of parties who buy the corn here, is 
 turned over to them to secure title, and proves to be indorsed as fol- 
 lows: Without recourse, John Smith, Cashier." What is the forcQ 
 of this indorsement, and does it release the bank in case of any ques- 
 tion of title ? 
 
 A. John Smith guaranties the genuineness of ])revious signa- 
 tures and their regularity, but does not affirm the title of the 
 shippers to the corn, nor their right to dispose of it. 
 
BILLS OF LADING. 55 
 
 6. "We make advances on goods, shipped from a distant part of 
 the country, consignors drawing on us through bankers at sight, with 
 bill of lading attached. Goods are shipped to order, and bill of lad- 
 ing indorsed by shippers in favor of bankers. The bankers indorse 
 bill of lading (which of course is surrendered to us on payment of 
 draft) ''without recourse to" — the bankers. We desire to know in 
 regard to the legal effect of this indorsement, does it absolve the 
 bankers of all responsibility, in case the bill of lading should turn out 
 to be fraudulent — a forgery, no goods actually shipped, no such bill 
 of lading signed by the transportation company ? Would not the law 
 compel the bankers to guarantee at least the genuineness of the bill of 
 lading in spite of the indorsement "without recourse"? Has this 
 question been well settled in law, and how ? 
 
 A. The banker is not responsible under these circumstances 
 to the drawee of a bill for the genuineness of the signature to 
 the same, or for the genuineness of any of the accompanying 
 documents, provided it lias acted in good faith throughout, and 
 was not a party to the fraud. 
 
 7. Will the Journal advise us as to the usage, in cases where the 
 shippers lose the ship's receipt, and require bills of lading without pro- 
 ducing the evidence of shipment ? 
 
 A. By proving that they are the shippers, and giving a bond 
 to indemnify the master against any loss through the reappear- 
 ance of the receipt, a bill of lading may be obtained. 
 
 8. Where a bill of lading, deliverable to order, is attached to a 
 time draft, and forwarded therewith to an agent for collection without 
 instructions, is not such agent required by law to deliver the bill of 
 lading upon the acceptance of the draft? Will a sight draft (which 
 in this State is entitled to grace), with a bill of lading attached, be 
 held to be a time draft within the meaning of the law ? 
 
 A. The Supreme Court of the United States has decided that 
 where no instructions are given, the agent is justified in surren- 
 dering the bill of lading upon acceptance of the draft, and this 
 would apply to a sight draft that was entitled to grace. 
 
 9. Are the owners liable when a captain or the agents sign a 
 fraudulent bill of lading or counterfeit ? 
 
 A. If a bill of lading actually signed by the master of a ves- 
 sel for goods not on board will not bind the vessel, much less 
 can a bill which is not only false in that respect, but is counter- 
 feit besides, constitute the ground of a claim. The opening re- 
 mark of Judge Davis of the United State Supreme Court, in the 
 
5G 
 
 BILLS OF LADING. 
 
 case of tlic Lady Franklin, 8 Wall, 325, may be a]>pro])riately 
 cited here. The Judge said: ''The attempts made in the 
 prosecution of this libel, to charge this vessel for the non- 
 delivery of a cargo which she never received, and therefore 
 could not deliver, because of a false bill of lading, cannot be 
 successful, and we are somewhat surprised that the point is 
 pressed here." 
 
 10. In a decision you say " there is no law which obliges a car- 
 rier to give any written receipt or contract for the delivery of goods." 
 When vessels are loaded, say with lumber, etc., the shipper requires 
 bill of lading in certain form in order that he may draw for cost of his 
 shipment, effect insurance, etc. Without this he must be subject to 
 much inconvenience, and probably loss. What recourse has he then 
 if captains refuse to sign bills of lading as presented, or give proper 
 voucher for receipt of cargo ? 
 
 A. The books declare it to be the duty of the shipmaster to 
 issue a bill of lading in common form for goods shipped on 
 board. And though this is not a duty enjoined by statute, yet it 
 was intimated by the court in the case of the Mayflower (3 Ware, 
 300), that in case of refusal to sign such a bill, suit may be 
 brought against the vessel. 
 
 1 1 . What is the meaning of the clauses in bills of lading " with 
 primage and average accustomed," when primage is paid, and without 
 primage and average accustomed," when primage is not paid ? and 
 would the omission of the first endanger the rights of a vessel, or 
 would the omission ot the second endanger the rights of the shipper ? 
 
 A. Primage is the small payment allowed to the master of the 
 vessel for his care and attention to the cargo ; and average in 
 this connection is the right reserved to divide pro rata between 
 the owners of the ship and the proprietors of the cargo any small 
 items of expense for towage, pilotage, &c. The prevailing custom 
 would be observed without the insertion of the words. 
 
 12. Are steamship companies justified in demanding as a right 
 that shippers make out their own bills of ladmg in fall, even to the 
 calculation of the amount of freight due ? Can a sliipper compel the 
 steamship company to issue and sign bills of ladmg for goods taken 
 on board ? 
 
 A. There is no law which obliges a carrier to give any written 
 ^•*ceipt or contract for the delivery of goods. Most shipowners 
 
BILLS OF LADING. 
 
 57 
 
 arc willing to furnish and sign bills of lading, but some lines re- 
 quire their customers to submit the documents for signature. 
 
 1 3. Foreign steamship bills of lading usually Contain this clause : 
 " Freight payable at current rate of exchange for bankers' drafts on 
 date of ship's arrival." Question: What is the current rate ? Steam- 
 ship agents contend; "Rate which consignee would have to pay for 
 first class bankers' sight draft for an amount equal to his individual 
 freight, even if same was only $5 " 
 
 A. We presume that our correspondent has misquoted the bill 
 of lading, as most of the steamship companies now insert the 
 condition that the sight rate shall govern. But if this is not in 
 the bill of lading, the freight is payable by immemorial usage 
 (and settled by legal authority) at the sixty-day rate. 
 
 14. What responsibility is assumed by indorsers of bills of lading 
 for goods shipped to order ? 
 
 A. An indorser of a bill of lading assumes no responsibility in 
 regard to the carriage or delivery of the property described, but 
 may be held responsible for the bona fide character or genuine- 
 ness of the document. 
 
 15. Is the bill of lading that a vessel brings with her the property 
 of the consignee of the cargo, or is the consignee obliged to hand it 
 back to the vessel, receipted, on the delivery of the cargo ? 
 
 A. The vessel should have a copy of the bill of lading, besides 
 the number which the captain has affirmed to for the use of the 
 shipper. The ship may demand one of the latter, with the 
 proper indorsement, when it delivers the cargo, and this is the 
 usual custom. 
 
 16. Can railroads and vessels demand and retain bills of lading 
 where goods are consigned direct ? Would not consignee's own order 
 be sufficient to obtain them ? Have they any right to demand that 
 they shall see invoices of goods for this information, to learn if they 
 were properly named and weighed as stated in bills of lading ? 
 
 A. It is a good delivery where one is made to a named con- 
 signee, because that fulfills the undertaking of the carrier ; but 
 he has the right, if he chooses, to demand the surrender of the 
 bill-lading, as that also is provided for in the document. He has 
 nothing to do with the invoice or other papers passing directly 
 between the parties. 
 
58 
 
 BILLS OF LADIXO. 
 
 17, If the master of a vessel signs bills of lading for a lot of cotton 
 on delivery of press receipts, with the shippers' guaranty against loss by 
 fire, or otherwise, attached, and after said bills of lading are consigned 
 and hvpothecated, the said cotton is destroyed by fire while in press, 
 and the shippers not being insured and unable to replace the cotton, 
 on whom does the loss fall, the shippers of the cotton not being able 
 to respond ? Is not the signing of bills of lading as above a criminal 
 act ? 
 
 A. A bill of lading signed by the master where the property 
 was never delivered to the ship, or in the captain's custody, will 
 not bind the ship nor its owners, without express authority from 
 the latter. 
 
 18. A vessel is chartered at London at 58 shillings per ton for a 
 round voyage to Brazil and back to United Kingdom, or, at 50 shillings 
 to Brazil and back to New York, finishing her round trip there. The 
 charter gives the vessel a lien on the homeward cargo for full amount 
 of freight of the round trip, or balance of it if she is paid anything on 
 account in Brazil. The charterers' agents in Brazil recharter the ves- 
 sel at say 'JO shilUngs and 5 per cent, to New York, and msist that 
 captain sign bills of lading without prejudice to sub-charter party. The 
 captain refuses to sign them or to recognise this charter party, and 
 sails without signing bills of lading, and now holds the cargo for bal- 
 ance of freight of his round trip. 
 
 1. Can he do this, or demand more than the sub-chartered rate ? 
 
 2. Was he not obliged to sign bills of lading even though the clause 
 was inserted <• as per f3razil charter party ?" 
 
 3. Could the charterers in Brazil not have libeled the vessel, and 
 held her till the captain did sign the bills of lading ? 
 
 4. The charterers' agents signed the bills of lading ; had they any 
 right to do so without an order from the captain, and are such bills of 
 lading negotiable ? 
 
 5. Should not the Brazil charterers have refused to accept such bills 
 of lading ? 
 
 A. 1. There is some conflict of authority on the question 
 whether the property of a third person can be thus subjected to a 
 lien for freight due from the charterer, the affirmative having been 
 held in the-English case of Faith v. East Indian Company (4 Barn, 
 and Aid., 630), cited with approval in the United States Supreme 
 Court of Gracie v. Palmer (8 Wlieaton, 605). The more equit- 
 able rule would appear to be that the lien should take effect only 
 to the extent of the freight money due, or stii)ulated, on the 
 specific goods in question, being the property of third persons 
 (The Volunteer, 1 Sum., 573 ; Christie v. Lewis, 2 Brod. and B., 
 410). 
 
BILLS OF LADING. 
 
 59 
 
 2. The object of the words sought to be inserted in the bills of 
 lading being to waive this lien on the part of the shipowner, the 
 master was not bound to sign such a bill (The Mayflower, 3 
 Ware, 300). And if he had signed, the bill would have been in- 
 effectual to determine the controversy above discussed, the mas- 
 ter having no power to w^aive a condition of the charter (The 
 Salem's cargo, 1 Sprague, 380). 
 
 3. Accordingly, though a libel suit might have been brought 
 for the purpose specified, Ave do not think it could have been suc- 
 cessful. 
 
 4. A bill of lading not signed by the master, or agent in pos- 
 session of the vessel, or some one in his behalf, is a document 
 for which we find no precedent in the books on maritime law. 
 
 The truth is, the agents in Brazil should have secured the cai> 
 tain, or at least tendered him the diff'erence in freight, before 
 asking him to sign the bills thus tendered for his signature. The 
 captain, in our opinion, was justified in his refusal. 
 
 1 9. A vessel, either through causes of bad weather or inability to 
 receive on board all the cotton of her cargo that may be tendered in 
 one or more days, the master signs bills of lading in advance where, 
 through his personal knowledge or that of the consignee of the vessel 
 (they having orders on the presses for delivery) know that said cotton 
 is ready for delivery to the vessel as soon as the causes above referred 
 to are removed. 
 
 Would bills of lading so executed be binding against ship and 
 owners ? And further, would said cotton be considered in the custody 
 or possession of the master ? 
 
 A. The original rule^ that a ship cannot be bound by a bill of 
 lading, signed for merchandise not actually on board, was 
 strongly laid down by the Queen's Bench in the well known 
 case of Grant v. Xorway, 10 C. C, 665, where it was said by the 
 Chief J ustice that " the very nature of a bill of lading shows 
 that it ought not to be signed until goods arc on board, for it 
 begins by describing them as shipped." So in the later case of 
 Hubbersty v. AYard, in the English Exchequer (Eng. Law and 
 Eq. Rep., 551), Chief Baron Pollock said: '^We think that 
 when a captain has signed bills of lading for a cargo that it is 
 actually on board his vessel, his power is exhausted; he has no 
 right or power, by signing other bills of lading for goods that 
 
00 
 
 BOOKKEEPING. 
 
 are not on board, to charge his owner." Tliese authorities were 
 accepted by the Supreme Court of the United States in the cases 
 of the Schooner Freeman, etc., y. Buckingham et al., 18 How., 
 182, and in that of the Lady Franklin, 8 Wall, 325. At a later 
 period the English courts modified tlie rule so as to cover goods 
 in the master's custody, though not on board the ship. In 1868, 
 the case of the British Columbia, etc.. Company v. Nettleship 
 was decided in the Common Pleas (18 L. S. Rep., 291). There 
 the master, through carelessness, signed bills of lading for a box 
 of machinery, which was delivered on the quay where the vessel 
 was loading, but was never put on board, and the court left it to 
 the jury to say whether or no it had been actually placed in the 
 custody of the shipowner's servants. The jury found that it 
 had been, and the judgment accordingly was that the shii)owner 
 was bound. All the judges concurred, the in-incii)le being 
 briefly stated in one of the opinions to be "that delivery to the 
 agent of a ship for the purpose of loading is sufficient to create 
 liability on the owner's part." 
 
 The same case has not, however, so far as we know, been liti- 
 gated in our courts ; and, though it is likely they would follow 
 the later English authority on this point, it is to be observed that 
 this does not by any means go so far as the case of our corre- 
 spondent requires. The goods were there actually on the quay 
 within I'each of the ship s tackles, and, as the jury found, in the 
 custody of the ship's servants. Possession of an order on the 
 press, however, could not, in our opinion, be considered actual 
 custody of the cotton, at least without acceptance of the order 
 at the press, and distinct separation of the bales, so as to consti- 
 tute a good delivery. The direct or implied assent of the vessel 
 owner might perhaps alter the case somewhat, but even then no 
 implication could be drawn except from specific proof of knowl- 
 edge or authority sufhcient to estop the owner from contesting 
 the master's acts, as beyond the usual scope of his employment. 
 
 BOOKKEEPING. 
 
 (See also settlement of accounts.) 
 
 1, Two persons enter into co-partnership; one furnishes all the 
 capital needed to begin with, say So 00, and other furnishing no capi- 
 tal. In the articles of co-part norshin that they have had drawn up, it 
 
BOOKKEEPING, 
 
 61 
 
 is stated tliat $250 has been contributed in cash by each partner, 
 whereas one contributes nothing, but agrees to give his individual ncte 
 for the $250 to the other partner. Are the articles of partnership 
 righx in this respect in reading that each contributes half of capital in 
 cash ? and if not how should they be worded to cover this point ? 
 Also please state how the entries in regard to the capital under the 
 above circumstances should be made in the books upon the commence- 
 ment of business ? 
 
 A. If the note is duly executed and delivered the articles are 
 all right. Each has then contributed 8250, and B has borrowed 
 of A 8250 for this purpose. The books may then credit each 
 partner with half the capital. A will hold B's note for the con- 
 tribution of the latter, to be paid as soon as B has the money, or 
 by consent to be charged against his account. 
 
 2. A Building and Loan Association was organized in 1876, and 
 the first series was started in that year, and each succeeding year a new 
 series was begun. The profits for the first year as a matter of course 
 belonged to the first series, but as each succeeding series was begun the 
 question of an equitable division of the profits presented itself, viz. : 
 What proportion of last year's profits belonged to each of the first, 
 second, and third series ? 
 
 The business of the association runs about as follows : At each 
 monthly meeting the stockholders of each series pay their fixed sub- 
 scription of $1 per month per share, the borrowers paying in addi- 
 tion to their subscription the amount of interest per month on their 
 loans. The money then, although coming from different series, is 
 pooled and loaned to the highest bidder, except when stockholders 
 wish to withdraw, in which case they are paid out of the above-named 
 pool, a certain percentage of the ^ains being deducted from the asso- 
 ciation value of the stock. The amount so deducted is credited to the 
 series from which the stockholder withdraws, although the money was 
 paid out of the common pool, and if loaned would earn a profit for 
 each series, whereas in this case it only earns a profit for one series. 
 
 A. In answer to the above it is evident that the question of 
 the equitable division of the profits of the association first pre- 
 sents itself at the beginning of the second fiscal year. 
 
 Each series is entitled to its own legitimate earnings. As far 
 as these proceed from fees it is easy to determine to which series 
 they belong. The earnings from investment of funds, consid- 
 ered as " a common pool," is the apparent difficulty. The cash 
 book should be so kept in columns as to show the receipts and 
 disbursements, and consequently the cash on hand, for account of 
 
G2 
 
 BOOKKEEPING. 
 
 each series, day by day. The oxpensos slioidd be ko])t in a sep- 
 arate column. AVlien a b^an (or deposit in a trust company) is 
 made, saitl b)an or deposit slioubl l)e made for account of series 
 No. 1 and Xo. 2 res|)ectively, and so charged against each series 
 pro rata of tlie casli on hand belonging to each ; and whatever 
 interest or income is derived from the investment should be 
 credited monthly to the profit and loss account of series Nos. 1 
 and 2 respectively, pro rata of the investment, whetlier received 
 in cash or not. 
 
 I would then charge each profit and loss account with the ex- 
 penses of the month, pro rata of the profits shown by each. 
 These profit and loss accounts will then show, at the end of each 
 month, the net earnings of each series. Proceeding each fiscal 
 year, in like manner for each existing series, I think the desired 
 result will be fully obtained. 
 
 3. To determine the profits, say a year's business, which is the 
 most proper, to inventory stock, etc., at cost or market value, and what 
 is the custom among business houses ? 
 
 A. The correct way is to inventory the stock at its current 
 market value. As it would involve very great labor to estimate 
 each article by itself, the usual course is to take the stock at its 
 cost, and then to make such allowances or deductions on the 
 gross result as will bring the total to the actual market value. 
 
 4. I am a bookkeeper, and it is my custom to take off a trial bal- 
 ance of my books every month. The merchandise account properly 
 shows a debit balance every time; what would it signify if, in the 
 regular routine of bookkeeping, the merchandise balance should be 
 thrown upon the credit side, the trial balance being correct, or proving 
 the books to be correct ? If a remedy is necessary how should it be 
 remedied, there being stock on hand at the same time ? 
 
 A. The merchandise is debited with the stock at commence- 
 ment, and with all purchases. It is credited with the sales, and 
 at the closing of the books with the stock on hand, the difference 
 being the profit or loss. If in a trial balance made to prove the 
 books the difference in the merchandise account stands on the 
 credit side, no notice need be taken of that fact, since such an 
 event is possible and not improbable. 
 
BROKERS AND BROKERAGE, 
 
 63 
 
 BKOKEKS AND BKOKERAGE. 
 
 1 . We employ a broker in another city, say Boston, to sell a lot 
 of goods for us. He received an offer for the goods at a certain figure, 
 delivered in that city. If we accept the offer do we pay brokerage on 
 the amount we net from the transaction, or on the face of the bill, with- 
 out deducting freight ? When no previous arrangement has been 
 made as to brokerage, what percentage can a merchandise broker 
 justly claim ? 
 
 A. The brokerage will be governed in amount by the usual 
 charge in Boston on the description of merchandise, whatever it 
 may be, and will be calculated on the bill rendered to the buyer. 
 
 2. We beg to ask if we are justly entitled to charge our com- 
 mission on the duty-paid price of goods sold for a party abroad, such 
 goods having been sold at that price, less the duty in bond ? Also, is 
 the broker entitled to charge brokerage on the duty paid or bond 
 price ? 
 
 A. If the sale was made in bond, that price governs both the 
 commission and brokerage. If sold delivered out of bond or duty 
 paid that price will govern. 
 
 3. On the 31st October we sold through a broker here 12 casks 
 of merchandise for export to Canada, on a sample, and on arrival of 
 the goods the consignees rejected them on the ground that they did 
 not come up to the sample, though w^e gave our Canada friends an 
 opportunity to examine every package, in handing their agents here a 
 delivery order to the bonded warehouse, from whence they took the 
 goods and shipped them. After nearly seven months we effected a 
 settlement, through the good offices of their agents — not the broker — 
 allowing nearly 30 per cent, from the face of the invoice; and here the 
 question arises : Are we bound to pay the broker his commission if his 
 contract does not hold good ? 
 
 A. The brokerage is legally due notwithstanding the difficulty, 
 and would have been due if all the goods had been returned. 
 
 4. A firm with whom I do business, determining to abandon a 
 manufacturing department of their business, ask me to find a pur- 
 chaser for their factory, promising me if successful $100. I discover 
 a gentleman willing to buy, with whom several interviews are held, 
 resulting in his taking a five years' lease of the property, with the 
 privilege of purchase on or before expiration. On requesting some 
 compensation for my services I am refused, on the ground that I failed 
 to make a sale. In the premises, what am I entitled to ? 
 
64 
 
 BROKERS AXD BROKERAGE. 
 
 A. Our correspondent is certainly entitled to, and can legally 
 collect, some compensation for his troul)le. We tliink that half 
 the offered i)ay should be the least tlie owners ought to give him. 
 The contract may result in a sale, in which case he could recover 
 the full amount. 
 
 5, A ship broker has placed in his hands directions to secure a 
 suitable vessel for a certain freight. In the meantime, while he was 
 looking for such a vessel, other parties called upon the merchant and 
 were referred to the said broker. One of these parties, without any 
 authority, spoke to the agent of a vessel and offered tlie freight. He 
 then again saw the merchant, and without naming tlie vessel said he 
 could charter a vessel for a certain sum. The broker in question 
 afterward saw the agent of the vessel, who said that he had had the 
 freight offered, and when told that the party who offered it did so 
 w^ithout authority, he sent the captain up with the first broker, who 
 introduced him to the merchant and named the vessel for the first 
 time. No bargain was made then, as the captain refused to accept the 
 terms offered. The merchant afterward sent a telegram to the second 
 broker and authorized him to take up his vessel at the sum he named (not 
 knowing it was the same offered by the first broker). Tlie charter was 
 finally made through the second broker, of the vessel named and in- 
 troduced by tlie first broker, the merchant having written letters to the 
 agent stating that the first broker was authorized, and that as he had 
 referred the second broker to the first, he signed the charter party, 
 supposing it came through the first broker, although by the hand of 
 the second. The question now is, did not the introduction of the 
 captain and the first naming of the vessel by the first broker entitle 
 him to the commission, both in equity and law ? 
 
 A. According to the decision in the case of Ludlow v. 
 Carman, 2 Holt, 107, it would appear that the second broker 
 alone is entitled to the brokerage. There are many cases where 
 it is difficult to decide, and even where the brokerage is legally 
 due to one it is a case of real hardship to the other, who has 
 done more to earn the pay than his successful competitor. 
 
 6. A, the principal, places 3,600 tons of iron in the hands of B, 
 a broker, to sell. B places the iron in the hands of C, another broker, 
 who sells the iron to D, subject to trial of 100 tons. D tries the 100 
 tons, but finds the iron unsuitable and so notifies C, who immediately 
 offers the iron to E ; but B also offers the iron to E without withdraw- 
 ing the iron from C. E buys the iron of B, as B told him that C no longer 
 had the iron to sell. E liad been previously made known to B by C, 
 and C regarded E as his customer. The question is, lias C any claim 
 against B for brokerage on the sale of the 3,500 tons to E ? 
 
BROKERS AXD BROKERAGE, 
 
 65 
 
 A. E's testimony must be the main dependence in settlin^^ 
 tliis question. If tlie iron was brouglit to Ids attention by C, and 
 Ids mind was subsequently made up, on C's solicitation and rep- 
 resentations, to buy the goods, we think C earned his commission, 
 and has a good claim against A therefor. 
 
 7. Is a broker legally entitled to his brokerage when he has sold 
 a cargo of goods to be shipped from a certain port in Europe, wliile 
 the same comes from a different port ? The market has declined and 
 purchasers refuse to accept the cargo on the ground that the sellers 
 have not fulfilled their contracts. The sellers thereupon accept the 
 buyers' decision and do nothing to force the goods on the buyers. 
 Please give us the law on this matter, leaving out customs or usages, 
 or also what a broker's poHcy should be ; and if cases of this kind have 
 been decided by any court of this State (X. Y.) please cite such 
 decisions. 
 
 A. A broker under contract to effect a sale of goods to arrive, 
 who effects the contingent sale, is entitled to compensation for 
 his services, even if the goods do not arrive and the sale is not 
 consummated, unless his principals have stipulated that he shall 
 share the chances of non-arrival. N. Y. Common Pleas, 1867, 
 Paulsen v. Dallett, 2 Daly, 40. 
 
 8. Is a broker entitled to his brokerage when he has sold a lot of 
 goods to arrive, payable 60 days after delivery, and has passed ac- 
 cepted contracts to both buyer and seller ; the seller refusing to deliver 
 the goods, because the buyer has failed since the contract was accepted, 
 and refuses to pay cash less interest ? 
 
 A. The broker is legally entitled to his brokerage in the case 
 described, but it is the ordinary custom, or at least a very com- 
 mon one, to waive this charge when for any reason there is a 
 failure of delivery, although the brokerage has been fairly and 
 fully earned. 
 
 9. 1 gave a real estate agent an order to sell my house at a 
 certain figure. He informs another agent of it, who brings me a party 
 that makes me an offer which I refuse. He then leaves, saying he 
 would be back m the afternoon with his wife, but fails to come until 
 the next day m the evening, and not with his wife but the real estate 
 agent, and is then ready to take it at the figure I placed upon it at 
 first. In the meantime I concluded I would not sell at all. but with- 
 drew it from the market, and informed the agent by postal accord- 
 ingly, which he claims he did not receive. He now claims commission. 
 There having been no sale is he entitled it ? 
 
 5 
 
66 
 
 BBOKEns A2W BUOKEUAQE. 
 
 A. On tlic assninption tliat the second agent was recognized, 
 that tlic offer to sell at a certain fignre was held ont to him the 
 same as to the first agent, that the offer Avas not limited to the 
 day Avlien the purchaser first called, and that there was ]io 
 effectual revocation, it must be granted that the agent earned his 
 commission. As to the sufficiency of the revocation, Ave knoAv 
 of no adjudication in point, but Ave are disposed to think it in- 
 sufficient, unless it can be shoAvn that it actually reached the 
 agent before the intending purchaser Avas ready Avitli his ac- 
 ceptance. 
 
 10. A broker makes a sale of certain goods to arrive. These 
 goods on arriA^al of ship are damaged to such an extent that we sell 
 them at auction for account of the underwriters. Can the broker who 
 made the sale claim a bi'okerage, and if so on which price is it to be 
 reckoned, that in the sale-contract, or the price realized at auction ? 
 
 A. The legal claim of the broker is established Avhcn tlie sale 
 is concluded and the bargain ratified by both buyer and seller. 
 If the goods ncA'er arriA'e Ave suppose that he can collect his fees. 
 But it is the custom, as Ave understand, in most branches of the 
 trade for the broker's remuneration to depend on the carrying 
 out of the contract up to actual deliA'ery ; so that if the bargain 
 fail of its completion he does not collect any brokerage. If lie 
 insists on his legal rights the brokerage would be due on the 
 original sale, but Ave think most brokers would not take that 
 ground. 
 
 1 1 . Can a real estate agent collect commission for letting a house 
 which at one time Avas in his hands, but since taken out and let to a 
 party who, through his instrumentahty, the owner became acquainted 
 with ? 
 
 A. If an agent introduced the tenant to the landlord while 
 the renting of the property was in his hands, and out of that 
 came the subsequent bargain, he could, probably, collect his com- 
 mission. 
 
 12. A broker in real estate entered into a joint speculation Avith 
 me in the purchase of a piece of land, I to adA^ance the money at legal 
 rate of interest and he to receive one-third of the net profit as his 
 share of the speculation. The land was sold at a loss, and I learn that 
 the broker has receiA^ed about $5,000 for commissions connected with 
 the purchase, and for Avliich he has not accounted to me. Have I not 
 
BROKERS AND BROKERAGE. 67 
 
 a just and legal claim against him for two-thirds of the commissions 
 received by him in the matter ? 
 
 A. The net profit may fairly be reckoned as having no refer- 
 ence to the brokerage, and with this understanding the broker 
 could not be expected to divide his perquisite with his partner in 
 the speculation. 
 
 13. A, residing in Canada, procures for residing in New York, 
 from C, also residing in Canada, five thousand dollars gold coin at six 
 per cent, per annum, but wants of B a written obligation to pay him 
 (A) an annual commission of two per cent, as long as B keeps the 
 money of C. If B gives this obligation, can it be considered as usury, 
 and can A enforce its payments ? 
 
 A. The fact that a borrower pays a broker a commission for 
 his services in procuring the loan, in addition to the lawful in- 
 terest paid to the lender, does not render the loan usurious, pro- 
 vided the broker acts as agent merely, and is not himself the 
 person making the loan, and the lender receives no part of the 
 commission.— United States Supreme Court, 1828, Coster v. Dil- 
 worth, 8 Cow., 299; 1830, Barretto v. Snowden, 5 Wend., 181. 
 
 14. Suppose a broker, entirely through an oversight, neglects to 
 complete an order which he has from a customer, and advises the cus- 
 tomer only of such portion as was filled, and that upon discovering 
 the error a change in the market meanwhile permits him to execute 
 the unfilled portion more advantageously for the customer. Now, 
 since he would have been responsible to his customer for any loss in- 
 curred by his oversight, is he on the other hand obliged to give the 
 customer the benefit which has actually resulted from the circum- 
 stances as described ? 
 
 A. He is both legally and morally obliged to give his princi- 
 pal the benefit of the decline, at which in consequence of his 
 oversight he was enabled to execute part of the order. 
 
 15. Will you please inform us if John Smith, who says on his 
 card that he is a broker in fruits, spices, etc., and has a corresponding 
 broker in the West who sends his orders to Smith, and he buys his 
 goods just where he pleases, is he (Smith) agent of the buyer or 
 seller ? 
 
 A. For some purposes, such as signing a contract within the 
 statute of frauds, the broker is agent for botli parties. But 
 primarily, says Story, he is deemed merely the agent of the 
 party by whom he is originally employed. This statement no 
 
68 
 
 BROKERS AXD BROKERAGE. 
 
 (loiil)t covers the matter of commissions; and if the person is 
 employed by, or holds liimself out as the agent of, the buyer, as 
 in the above case, we think he cannot claim to be the agent of 
 the seller, for the inirpose of charging him a commission. 
 
 16. A note broker brings to our office a mortgage note for $1,000 
 signed by John Smith and indorsed by James Brown. We buy it, and 
 afterward find that the name of James Brown was forged. The 
 broker makes no statement about the note, simply hands it to one of 
 our firm, naming the rate, and gets a check. Have we any claim on 
 the broker ? Suppose the broker said the indorser of the note was 
 first-class and on his statement we bought it, would this make the 
 broker liable ? Please give us your views about the liability of a note 
 broker, how far he can go without danger, and how he can make him- 
 self liable. Can an interested party come into court to prove a signa- 
 ture or to prove that a signature was not that of his partner or his 
 own ? 
 
 A. A note broker is responsible for all the money lie receives 
 for which he has not given the promised equivalent. In the 
 case under notice the buyer of the note can recover the price 
 paid, with costs. Interested parties are not now excluded from 
 the witness box. 
 
 The Rhode Island Supreme Cornet, in Aldrich vs. Jackson 
 (5 R. I. Rep., 218), states the doctrine in the following terse 
 form : " The vendor of a bill or note, by the very act of sale, 
 impliedly warrants the genuineness of the signature of the pre- 
 vious parties to it." The same doctrine is held in Terry vs. 
 Bissell, 26 Conn. Rep., 23; in Thrall vs. Newell, 19 Yerm. Rep., 
 202, and elsewhere. 
 
 17. A requests a broker to sell some exchange, and the broker re- 
 ports in writing that he can realize for it $4.99 per pound sterling, 
 making $7,387 currency. In delivering the bills of exchange the 
 broker finds that he has made a mistake, the price he was offered for 
 the exchange being only $4.78. Who should suffer the loss of the dif- 
 ference in the proceeds, admitting that $4.99 was about 1 per cent, 
 above, and $4.79 about 1 per cent, below the market rate? 
 
 A. The broker is responsible: he must furnish a buyer at 
 $4.99 or return the exchange. But where a mistake has been 
 made the parties, if they choose, may compromise or leave the 
 settlement to arbitration. 
 
 18. If A buys what purports to be B's note from C (who is a note 
 
BROKERS AND BROKERAGE. 
 
 69 
 
 broker), and the note is forged, is C responsible to A for tke amount 
 of the note ? 
 
 A. The note broker who sells a note bearing a forged signa- 
 ture, although he is ignorant of its character, is liable to the 
 purchaser for the whole of his damage in the transaction. The 
 note broker does not guaranty that B will pay the note, but he 
 does guaranty that B has agreed to pay it, otherwise the thing 
 sold is not in any sense a merchantable article. 
 
 19. A party m Tennessee telegraphs a cotton commission firm in 
 New York to buy 100 bales December cotton and to sell whenever 
 one-half cent a pound higher. It is bought, and amount required, 
 $2.50 a bale and commission, remitted. After receiving letter and 
 statement from New York, Tennessee finds that under the contract re- 
 ported the cotton is deliverable by the seller at any day from the 1st 
 to the 31st of December, upon five days' notice to buyer. Tennessee 
 writes New York that that is not the kind of contract he wanted, and 
 that if it cannot be changed so that he could sell whenever he (the 
 buyer) wanted to, to cancel the contract without loss or charge to him. 
 New York thereupon sells cotton without notice at a loss to Tennessee. 
 T repudiates both purchase and sale, and demands the return of his 
 remittance of $2.75. 
 
 A. We think, if the exact story is told, that New York 
 must return the 12.75 to Tennessee. It does not seem to us that 
 the first contract was justified by the terms of the order ; but if 
 so the New York house liad no right to sell to Tennessee's 
 prejudice on receipt of the second order. 
 
 20. A local broker buys of a local merchant a bill of goods, hand- 
 mg the name of a merchant in a distant city as the purchaser. A con- 
 tract with shipping instructions is sent to the seller and the goods 
 are got ready for shipment. At this point the broker directs the seller 
 to delay shipment, and later, makes the statement that through the 
 miscarriage of a telegram to his correspondent who forwarded the 
 order, notifying him of the purchase, the buyer declines to take the 
 merchandise. The market meantime having declined, what recourse 
 has the seller ? Is the broker bound to compel the original buyer to 
 accept the goods, or failing in that, furnish the seller with another 
 buyer ? Or, failing in that also, should he (the broker) assume the 
 loss which results to the seller through his inability to place the goods 
 at the price at which he took them ? In short, how far does the re- 
 sponsibility of the broker go in the premises, he being able to show 
 that the miscarriage of the message and the consequent rejection of the 
 goods was through no negligence of his own ? 
 
70 
 
 BROKERS AXD BROKERAGE. 
 
 A. We do not see that the seller has any redress for his dis- 
 appointment. 
 
 21. A, an importer, buys of B, an excliange broker, certain bills 
 of excliange drawn by C, a banker ; in the transaction A does not 
 come in contact with C. We will assume the mail closes on Wednes- 
 day, and as usual B sends the exchange to A on Tuesday, and A sends 
 his check or money to B on Wednesday after maihng the exchange. 
 Subsequently B fails to pay C for his exchange, and suspends payment. 
 Can C hold A for the amount of exchange, and can he stop the ac- 
 ceptance or payment ? 
 
 A. Tlie general rule is, as observed by Judge Peckham in tlie 
 case of Higgins v. Morse, 34 N. Y. (Court of Appeals), 417, that 
 a broker employed to sell, has no authority as sucli to receive 
 payment. But, wliere the person contracting for the sale has 
 the property in his })ossession, and delivers it, lie is clothed witli 
 the indicia of aiitliority to receive payment, es])ecially when the 
 owner is not known." A decision in point was that by the 
 Supreme Court in Lentilhon and Martin v. Vorwerck, reported 
 in Lalor's Supplement to Hill and Denio, 443. There an ex 
 change broker negotiated a sale between plaintiff and defendant, 
 the plaintiffs delivering the bill to the broker, who received 
 payment and died insolvent before paying over the money. The 
 court h(dd that the defendant was not bound to ])ay tlie price of 
 the bill over again, that his payment to the broker was a dis- 
 charge of his obligation. This case stands unreversed as an 
 authority in this State, though of course it is liable (as a possi- 
 bility) to reversal in case the question should be carried to the 
 court of appeals. It is to be borne in mind that the decision 
 turned upon the delivery of the bill to the broker, without notice 
 to the customers to ])ay the principal. The court intimated that 
 in such a case the customers should have been notified. Under 
 these circumstances, while the question may not perhaps be con- 
 sidered finally settled upon this principle, payment to the broker 
 is prima facie good if he is entrusted wdtli the bill without notice. 
 Otherwise, if he receives the money and does not pay it over, 
 the buyer can be compelled to pay a second time, to the principal 
 direct. 
 
 22. I bought from H, a broker, 100 shares of stock, for SI, 000 , 
 paid $900 cash, and I owe him $100, on this purchase. H failed and 
 
BROKERS AND BROKERAGE. 
 
 71 
 
 made an assignment, and the assignee wants me to prove my debt. 
 How shall I do this ? On the day of H's failure, tlie stock sold at 7, 
 to-day at 12. Had H any right to dispose of my stock ? 
 
 A. If the stock had been transferred H could not legally sell 
 it, but the statement shows that it was stock sold but not de- 
 livered. We think the $900 and interest is the better claim to 
 make. 
 
 23. Suppose I were to sell a lot of goods to a stranger, through a 
 broker, and in a few days later that stranger seeing in the paper that 
 I had received a similar lot of goods, calls upon me without the 
 broker's knowledge, and buys that second lot, is the broker entitled to 
 any brokerage on that second lot ? 
 
 A. If this statement is literally correct and s the whole of the 
 story, the broker is not entitled to any brokerage on the last lot. 
 
 24. A represents a manufacturing company on commission and 
 calls upon B who requires some of their work, but is not then ready to 
 close the order. A leaves a card of the manufacturing company with 
 the understanding that B will notify him or the house when ready to 
 purchase. B notifies the company and they close the order without in- 
 forming A that they are in receipt of word from B. Is not A entitled 
 to commission on the order ? 
 
 A. As A did not really make the sale he cannot claim the 
 commission as a matter of i-iglit. Pie might leave a card with 
 every purchaser in the country, and ask for commission on the 
 entire sales of the company. It looks as if there had been too 
 little consideration for him, however, on the part of the company, 
 or the buyer, or both, in the case described. 
 
 25. Two brokers representing respectively seller and buyer agree 
 as to the value of a certain article of merchandise, based on a given 
 standard, and send their principals each a certificate to that effect 
 signed by both brokers. In law, in the above case, is not the brokers' 
 decision final and binding upon their principals without the right of 
 appeal by the principals ? 
 
 A. A broker has no authority not delegated to him, or imj)licd 
 in the trust committed to him. In the case presented, unless 
 the principals agreed to be bound by the award or engagement 
 made ill their name by their brokers, they cannot be legally held 
 until they have confirmed the same. 
 
 26. A, some ten days before 'writes B, both brokers, to know if 
 certain bonds could be sold at 50. B writes in intervals of some four 
 
72 
 
 COMMOy CARRIERS. 
 
 days apart, saying they would bring first 25 then 37|. A replies, 
 asking if they could not be carried to 50, as this was the owner's price, 
 who lived in the country and that it would take days or so to com- 
 municate with him. B therefore sells at 50 and charges one-fourth per 
 cent, commission, making 49 1 net to A. A denies Bs authority to 
 sell. 
 
 A. It may be a nice question whether B was justified in selling 
 at 50 by the terms of the correspondence, and this could only be 
 settled by a careful examination of it : but it is a fair inference 
 from the statement, as it seems to us, that this was A's desire, and 
 without further information we should justify B m his action. 
 A asked B if lie could not get 50 cents and told B this was the 
 owner's price ; if this did not mean that A wanted B to sell the 
 bonds at 50, it was at least well calculated to convey this im- 
 pression. 
 
 27. A has some property for sale, and informs B of the same, asking 
 him to look for a purchaser. B meets C and inquires if C would buy 
 at a very low figure, and C says he would look at property, as he knows 
 & party desiring to purchase. B introduces C to A and makes engage- 
 ment to bring a purchaser. C promises B one-half commission if saie 
 is consummated. A sells the property to C's friend without the knowl- 
 edge of B, and C refuses to divide commission. Can B recover his 
 share from C, or must he look for payment from A, or is B not entitled 
 to any share ? 
 
 A. As B did not introduce or negotiate with the purchaser, he 
 cannot claim commission from A, and as his contract with C 
 was verbal he cannot legally collect of him. 
 
 COMMON CARRIERS. 
 
 1 . A ships a bill of goods to a customer in New Orleans, and re- 
 quests B & C (who are the agents of connecting line of steamers run- 
 ning from New York to New Orleans) by letter to ensure them on 
 their open policy for $500, and let charges follow with freight. A 
 gets no reply to his letter, nor is it returned to him, and it happens 
 that the goods are not covered, either purposely or througti neglect. 
 Should the steamer be lost at sea, can the owner of the goods recover 
 the $500 ? Bill of lading is given at Richmond, but nothing is said 
 as to insurance. 
 
 A. Unless the agents have undertaken by an agreement ex- 
 pressed or implied to insure in obedience to such instructions, 
 they are not responsible for their failure to comply and the loss 
 will fall on the owner. 
 
COMMON CARRIERS. 
 
 73 
 
 2. Having purchased a year's commutation tickets of the Delaware, 
 Lackawanna & Western Railroad, and on the first of the present month 
 I happened to have them at the wrong end of the line, which neces- 
 sitated my paying fare on the cars, and for wliich payment I received a 
 ticket redeemable at any office of the company for 10 cents, while the 
 fare I paid was 35 cents ; now, in equity, is not this corporation, when 
 they refuse to refund me the full fare I paid on the cars, exacting of 
 their patrons double pay for one service ? And do our laws when they 
 permit corporations to do business in the State allow them this priv- 
 ilege ? 
 
 A. The commutation ticket is purchased on the express con- 
 dition that it shall be shown or used. If the purchaser leaves it 
 at home he has no right to insist that the company shall make 
 the loss originating from his own carelessness wiiolly good to 
 him. 
 
 3. Can the presentation of a shipping receipt for signature, specify- 
 ing "one thousand kegs gunpowder," be taken as a "note in writing" 
 within the meaning of the law, or whether a written letter of notifica- 
 tion to the master should have been previously delivered ? 
 
 A. A description of the article plainly written on the receipt 
 to be signed, if presented at the time of shipment, \vill answer 
 the requirement, if the attention of the receiver is duly called to 
 it. But to avoid all disputes, it is better to have the notice on a 
 paper which can be left with the freight. 
 
 4. We have parcels of goods arriving from England, deliverable to 
 us at the port of New York. We wish to know if we are obliged to 
 receive the goods in Brooklyn, Jersey City, or Hoboken ; or, are the 
 steamship companies and consignees of vessels obliged to deliver goods 
 in the city ? Are there any decisions on this point ? 
 
 A. According to present custom all such goods must be landed 
 on Manhattan Island, or, the carrier must pay the ferriage and 
 extra costs (if any) of cartage. But there is no law to govern, 
 and when it becomes customary to waive the rio'ht, a landing: in 
 Brooklyn, Hoboken, or Jersey City may answer. The Cunard 
 Line used to reserve in their bill of lading the right to discharge 
 across the river. No carrier can otherwise com})el a consignee 
 to receive goods except on this island. 
 
 5. Is there any law regulating the delivery of packages by express 
 companies to parties occupying an upper office in a public building, or 
 a flat in a private one ? Nearly all the drivers refuse to bring packages 
 
74 
 
 COMMON CARRIERS. 
 
 further than the front door. Are they legally right, or should they 
 deliver them at the door of the office or apartment occupied by the 
 consignee ? 
 
 A. An ex})ress company is bound to deliver the package to the 
 person named as consignee, and to place it within his premises. 
 It is not sufficient to leave it on the sidewalk if the office is on 
 the first floor, or to leave it in the lower hall if the office is up 
 stairs. A man who has an office below cannot insist that the 
 carrier shall take the package up stairs ; but one whose office is 
 np stairs may refuse to accept delivery unless the package is 
 brought to him at the room or place where he transacts his busi- 
 ness. We have noticed the habit of the express companies and 
 have heretofore commented thereon. There is no warrant in 
 law for the delivery on the sidewalk of a package that may easily 
 be carred inside ; and if the office of the consignee is on the 
 second, third, or fourth floor, he may require that the package be 
 brought thither to him. 
 
 6. Has an express company the right to exact an extra charge 
 for the city delivery of a package consigned say to Sixtieth Street, and 
 forwarded from Buffalo, expressage paid ? If entitled to such a charge 
 can they demand for the service more than the usual rate of the best 
 city express companies ? 
 
 A. Express and telegraph companies are a law unto them- 
 selves. As the law is commonly understood if the package or 
 message is properly directed and duly prepaid neither of these 
 messengers can exact anything extra for its delivery. But both 
 of them will do it, and we often have dispatches and parcels on 
 other people's business sent to our residence, and duly directed 
 with the name and number, the carriage of which the senders 
 have prepaid and suppose we are receiving without cost to us, on 
 which a further sum is demanded and collected, because of the 
 increased distance from the average centre of business. 
 
 7. A ships to B on his own account 100 bales of cotton, which B 
 sells for A's account to arrive. Tlie cotton was shipped December 23, 
 but on March 10 the railroad company notifies A that 40 bales wore 
 burned in December in transit. B was forced to go into the market 
 after cotton had advanced from 1^ to 2 cents per pound, and replace 
 the cotton. Should A bear the loss, or should it fall on the railroad 
 company, for if they had notified either A or B at the time the cotton 
 was burned it could have been replaced without any loss to A ? 
 
COMMON CARRIERS. 
 
 lb 
 
 A, The carrier was bound to give notice of loss at once to the 
 consignee. The measure of its liability in case of failure to 
 deliver is the cost of replacing the goods at the date wlien the 
 consignee was notified, and might thus have protected himself. 
 
 8. Grain received here by rail is discharged by the railroad com- 
 pany into elevators, and at 1 1 o'clock each day the elevator receipts 
 are sent to the consignees. Thus consignees whose grain arrives after 
 1 1 o'clock A. M. to-day will have no knowledge of the fact till to-morrow 
 at that hour. Should such grain be destroyed by fire to-night while 
 in the elevator, on whom would the loss fall, leaving insurance out of 
 the question ? 
 
 A. The courts have decided that where freight is delivered 
 on the dock it is at the risk of the carrier until the owner has 
 been notified and has had an opportunity to take it away. If 
 instead of the dock the carrier puts it into an elevator, the same 
 rule will apply, and the carrier is responsible to the owner until 
 lie has been notified of the delivery and had time to protect it. 
 
 9. Is a common carrier liable as such, or as warehouseman (which 
 latter capacity is liable without hire, receiving neither storage or 
 wharfage), for loss or damage by fire to goods delivered to him and 
 waiting shipment or ex-ship and waiting the convenience of 
 consignee ? 
 
 A. It is usually understood that a common carrier as such, 
 if he is not exempted therefrom by special agreement, is liable 
 for a loss by fire of all goods received by him for carriage, and 
 up to the time that he has tendered delivery to the consignee, 
 or given notice to the latter with reasonable time for him to 
 remove the property. 
 
 10. When goods are shipped by several connecting lines of rail- 
 roads and steamers on a through bill of lading, on a through rate of 
 freight, is, or is not the last carrier responsible to consignees for short 
 packages, and what is the best method of compelling settlement in 
 such cases ? 
 
 A. If the consignee can prove delivery in full to the first 
 carrier, delivery to the second will cast on him the burden of 
 showing that the shortage did not occur while the goods were in 
 his custody. Such, at least, is the effect of the Sui)reme Court 
 decision in the case of Smith v. X. Y. etc. R. R. Co., 43 Barb., 
 225. If it did so occur, he can be held responsible, by suit, if he 
 
76 
 
 COMMOX CARRIERS. 
 
 will not otherwise answer the demand. If the sliortagc occurred 
 before delivery to him, the previous carrier must be lield. 
 
 11. A ships to B a certain lot of cotton by steamer ; the steamer 
 happens to have a similarly marked lot of inferior cotton and gives B 
 five bales of them. B's agent or warehouseman receives the cotton as 
 tendered by boat, and the error is not discovered for four weeks. B 
 reports case to A and he says he shipped no such bales. An inquiry 
 substantiates this statement. The steamer claims to have delivered 
 the correct mark and number of bales, alleges laches, and says she is 
 not liable. 
 
 A. We think the steamer can be held for A's damage. Due 
 diligence on the part of the carrier would have noted a second 
 lot of cotton marked the same as one already shipped, and would 
 have added a fresh shipping mark, or separated the cotton in a 
 way to avoid the error. 
 
 12. A B, merchants, ship a cargo of goods to foreign merchants, 
 G H, taking bills of lading to order. They draw a draft at 45 days' 
 sight on G H for amount of invoice, attach bills of lading, and nego- 
 tiate the draft, with documents, with their local bankers, C D, who in 
 turn send the draft with documents to E F, bankers in New York. 
 E F in their turn send the draft alone (having retained the bills of 
 lading) to their correspondent, who present it to G H and it is accepted. 
 The vessel arrives before the maturity of the paper, and the master 
 (being cognizant of who were the consignees) delivers the cargo to G 
 H without production of the bill of lading. After discharge of the 
 vessel and before maturity of the draft G H fail, the draft is dis- 
 honored, the bills of lading still remaining in the possession of E F. 
 Is the vessel liable for delivering the cargo under the circumstances, 
 and whose business is it to enforce this hability ? If the vessel is not 
 liable, who bears the loss ? 
 
 A. The question is a little inconsistent. If the cargo was 
 shipped to the order of the shipper, and bills of lading thus 
 signed, then G H were not the consignees of the cargo, and the 
 captain could not have been " cognizant " of that which was not 
 true. We suppose, however, our correspondent to mean that the 
 captain knew the cargo was designed for G H, and so delivered 
 it to him without authority. Of course in that case the ship is 
 held for such a violation of the contract, since the bills of lading 
 promised to deliver it to the order of A B, and no such order 
 had been received. The one who holds the bills of lading, await- 
 ing his indorsement, is the projicr one to enforce the liability. 
 
COMMON CARIUERS. 
 
 13. We received by steamer 11 cases of goods; of these, two cases 
 were ordered for examination to the public stores. We were waiting 
 for these two cases for three days, when we finally sent to the Appraiser 
 inquiring why they were delayed. He then informed us that he only 
 received one case, and could not pass the entry until the other case 
 came to the public stores. We found out after a good deal of trouble 
 that by a mistake the Merchants' Dispatch had taken the missing case 
 to Canada. Their excuse is that some cases similarly marked came in 
 bond for Canada, and it was a mistake on their part, but they would 
 telegraph at once for the case. We have not as yet received the case, 
 nor can we sell the other goods from the steamer, until the two cases 
 in the public stores have been passed as correct. We have written to 
 the Merchants' Dispatch, but they have not sent us even an answer. 
 Are we not entitled to damages from the Merchants' Dispatch for this 
 delay, and have we not a good claim against them in court ? 
 
 A. The claim for damages is certainly a good one if the facts 
 are correctly stated. 
 
 14. A, B, and C are three transportation companies, composing a 
 through line from Baltimore to the Roanoke River. Goods are ship- 
 ped and bills lading given by A, stipulating that the companies com- 
 posing this through line would be only responsible for damages 
 on their respective lines. Goods are damaged while in possession of C, 
 A and B holding each other's and C's receipt in good order. Would 
 an action lie against A or B, C being insolvent ? 
 
 A. Connecting companies forming a through line have a 
 right thus to limit their responsibility to loss occurring to goods 
 wdiile in their own custody, and the presumption therefore is in 
 this case that the terms of the bill of lading are sufficient to 
 relieve A and B from liability. Except in consequence of an 
 express stipulation, however, A, the first carrier, would continue 
 responsible from the receipt of the goods until their delivery to 
 the place of consignment. 
 
 15. A lives in Providence, R. I., and B in Dallas, Texas. B buys 
 100 bales cotton for A, and ships the cotton to A by the Texas and 
 Pacific Railroad through to Providence, rate guaranteed through at 
 $1.10 per 100 lbs. The cotton was marked C. B. | 0. B draws on A 
 at sight for the cost of the cotton, less the freight, with bill of lading 
 signed by the Texas Pacific Railroad attached to the draft. A pays 
 the draft when presented, and holds the bill of lading for the cotton; 
 95 bales of the cotton comes along and is delivered to A by the Wor- 
 cester Railroad in Providence. The freight bills for the 95 bales cot- 
 ton are presented to A, with expenses on the same at $1.10 per 100 
 pounds. A receives the 95 bales and pays the freight bills for the 
 
78 COMMON CARRIERS. 
 
 same to the Worcester Railroad. The other 5 bales are lost. Who is 
 A to look to for the other 5 bales lost ? 
 
 A. A has a legal claim on the signer of the bill of lading 
 for the cotton, and also npon any connecting line that has 
 acknowledged receipt of the goods. 
 
 1 6. We have a shipment from Saii Francisco on which freight, ac- 
 cording to contract rate on bill of lading, is $1.75 per 100 pounds, for 
 1,100$19.25, and the New York Central Railroad sends us in a bill for 
 the gross overcharge of $51.57, which we refuse to pay, as these over- 
 charges happen so frequently it is becommg a nuisance, sometimes 
 taking two or three months to refund, and sometimes never refunding 
 at all. The Central refuse to deliver the goods unless we pay $51.57, 
 and say they will refund the overcharge We have shown bill of lad- 
 ing with rate inserted to their warehousemen and they refuse to deliver 
 still, and have stored. The goods are sold to arrive. Can we not re- 
 cover damages ? 
 
 A. Legally our correspondents have a good case, but the rail- 
 road company employ counsel by the year, and are the most 
 arbitrary, exacting, and overbearing corporation of w^hicli we 
 have any knowledge in the world. These cases are common, 
 and a suit against such a company so intrenched is not a fair 
 remedy for the gross wrongs which it perpetrates. 
 
 17, Is a boat liable as a common carrier when a simple receipt is 
 taken and each package of goods marked with consignee's name and 
 address in case shipper does not take a bill of lading ? If yes, would 
 not this manner of shipping place the responsibility where it belongs ? 
 A claims that in shipping by the river steamers and saiHng vessels, 
 where the custom is not to sign bills of lading, that marine insurance 
 is unnecessary, as the boat is responsible for the cargo ; while B claims 
 that it is and that the boat is not responsible. 
 
 A. The question here raised is very directly answered in the 
 following sentences from Angell on Carriers, section 88: "The 
 doctrine has been extensively considered in New York, and it is 
 in that State clearly understood to be, that masters and owners 
 of vessels, wdio undertake to carry goods for hire, are liable as 
 common carriers, whether the transportation be from port to 
 port within the State, or beyond sea, at home or abroad, and they 
 are answerable as well by the marine laws as the common law, 
 from all loss not arising from inevitable accident, or such as 
 could not be foreseen or prevented ; except so far as the excep- 
 
COMMON GARRIERS. 79 
 
 tion is extended to perils of the sea by the special terms of the 
 contract contained in the charter party or bill. of lading." In 
 case, therefore, they carry goods on a mere receipt, without 
 special terms limiting their liability, they can be held to the full 
 measure of responsibility above intimated. 
 
 18. Will you please state whether an Express Company is liable 
 for the full value of articles of jewelry, sent without declaration of 
 value, w^hen such article is lost in transportation, or whether the 
 Hability is limited to the amount of $50, as stipulated in the receipt. 
 
 A. If the sender accepted the receipt with the full knowledge 
 of the restriction, and there is no negligence on the part of the 
 carrier, the recovery in case of loss Avill be thus limited. 
 
 19. 1- In what respect does the liability of railroads differ from 
 that of ships for losses by fire or otherwise ? 
 
 2. Suppose an invoice of merchandise is forwarded by a through 
 line from this point to New York, part rail, part water, and is lost at 
 sea, either by fire or by sinking of the vessel, is not the railroad com- 
 pany issuing the bill of lading liable for the loss without insurance of 
 any kind by the consignor ? 
 
 A. No carrier is responsible for a loss that occurs by the act 
 of God. A fire at sea, or the sinking of a vessel b}^ a storm or 
 other agency beyond human control, excludes liability. But a 
 fire in a car or other conveyance, miless excepted in the bill of 
 lading, does not release the carrier from liability. 
 
 20. We shipped by a freight line a case of merchandise which 
 should have reached its destination in a fortnight, but it was not deliv- 
 ered until three months had elapsed. Is not the transportation com- 
 pany obliged to take the goods and pay us, as the customer decHnes to 
 do so ? If not, what remedy have we ? 
 
 A. The carrier need not take the goods, but he can be com- 
 pelled to pay whatever damages the shipper suffered by reason 
 of his default in delivering them. 
 
 21. Does the stamping upon a bill of lading by an express com- 
 pany of the words, " Value asked and not given," limit the liability of 
 the company to the amount of $50, as stated in a note at the bottom of 
 the bill of lading ? This inquiry relates to shipments of ordinary mer- 
 chandise only. 
 
 A. The courts in some instances have allowed the express 
 companies to profit by such a limitation. We think that it is 
 
80 COMMON CARRIERS. 
 
 aii'ainst public policy, and that there will come a time when cor- 
 })oratioiis who undertake a public service will be held by that act 
 to have assumed its i)roper and reasonable liabilities, and not 
 allowed to limit or restrict this by any imposed conditions. 
 
 22. Upon whom would the loss fall in the event of a barge or 
 ligliter being sunk which had goods belonging to us on board of her, 
 and were being transported from the wliarf to a railroad depot for 
 transit ? 
 
 A. If ''Subscribers" themselves employed the lighter, and 
 the latter was in fault, her owner is responsible. If employed by 
 the railroad, the latter must answer. If the loss, however, was 
 the result of an inevitable accident, known as the "act of God," 
 our correspondents will have to bear it themselves. But if a 
 colliding vessel, being at fault, was the cause of the damage, its 
 owners can be made to respond. 
 
 23. A vessel on making delivery of her cargo at port of discharge 
 finds some packages short, and agrees to pay for them ; is the vessel to 
 pay the invoice price of these Trackages, irrespective of whether the 
 merchandise has increased or diminished in value since the time of 
 shipment ? or is the vessel to pay such an amount as it would cost to 
 replace the missing packages at the time of the delivery of the cargo ? 
 
 A. The measure of damages is the value of the goods in the 
 market at the place where the carrier promised to deliver them. 
 Angell on Carriers, sec. 488. 
 
 24. Is a railroad company responsible for damage by fire, water, or 
 collision to property in transit when not due to the negligence of the 
 company's servants ? The transportation companies exempt- themselves 
 from liabihty under these different heads. 
 
 A. xV carrier is not responsible, or liable, under the circum- 
 stances described. 
 
 25. Last fall we ordered shipped to this place some cases sheet- 
 ings, the cost was say 4c. per yard. They were never delivered to us, 
 but we traced them to another house which received and sold them at 
 Yc. per yard. 
 
 This is admitted by one of the partners of the other firm and the 
 local agent of the railroad, who said he was sure the other house had 
 the goods. 
 
 After eight months had elapsed the railroad company pays us the 
 4c. per yard cost, with interest, and we acknowledge receipt of cash on 
 account. 
 
COMMON CARRIERS. 
 
 81 
 
 1. Have we recourse on tlie railroad for the difference between cost 
 price and what the goods were sold for here? 
 
 2. We owe the railroad a balance on uncollected freight; can it not 
 be set off against our claim ? 
 
 3. Have we recourse against the house which did receive our 
 goods ? 
 
 A. Prospective profits form no part of the estimate of dam- 
 ages where goods are lost. The net cash value of the goods at 
 the place where delivery is promised is the measure of recovery. 
 If the house which appropriated tlie goods took them wrongfully 
 the sufferers may prosecute that firm for the misappropriation 
 and collect all the damages which they can prove as the direct 
 result of such conversion. 
 
 26. A steamship company at Liverpool have an agent at Antwerp. 
 This agent, knowing what the goods are and fully describing them in 
 his contract, signs through bills of lading to New York for them, the 
 goods to be shipped by steamer to Liverpool and then trans-shipped on 
 steamer to New York. The shipment does not arrive here, causing 
 great prejudice and loss to consignee. On inquiry the agent of steam- 
 ship company here says his company refused to take the lot at Liver- 
 pool, their steamer being prohibited from carrying goods of that 
 nature. What redress, if any, has consignee for prejudice caused by 
 the non-arrival of goods ? And to whom ought he to apply ? 
 
 A. The agent at Antwerp being fully recognized by the com- 
 pany, and having authority to sign in its behalf, the latter is held 
 by the agreement and liable in damages for a breach of the 
 covenant, unless the shipment of the articles named at Liverpool 
 is prohibited by law. Li that case, although neither the agent 
 or the shipper was aware of the prohibition, we think the con- 
 tract is void. There cannot be a legal contract to perform an 
 illegal act. 
 
 27. I bought a ticket on the Brooklyn, Bath & Coney Island 
 Railroad at Greenwood. I paid the regular fare to Coney Island, and 
 upon arriving at Bath I alighted, and upon the arrival of the following 
 train for the Island I handed my ticket to the conductor, who refused 
 to accept it, saying it was only good for a continuous passage. State 
 whether such ticket must be accepted? Would I be compelled to ask 
 for a stop-over check from the conductor, and is he compelled to fur- 
 nish me with same ? Is such ticket good until used ? What course 
 could I pursue should I be ejected from the train ? 
 
 A. The courts have recognized the right of railroad com 
 6 
 
82 
 
 COMMOy CARRIERS. 
 
 jianics to sell tickets ''good for this day only'' and "good only 
 for a continuous passage." Hence the purcliaser of such a 
 ticket is bound by its conditions. If lie wishes to stop over at 
 any way station, he must either i)rocure a check or have the 
 leave indorsed on his ticket. 
 
 28. The Harlem Rcailroad Company issue excui*sion tickets which 
 are good only on the day bought (so it reads on ticket). If I buy one 
 on Saturday and use one coupon, can they refuse to take the other on 
 Monday ; or, can they compel me to pay full fare, and if 1 refuse can 
 they eject me from the car ? 
 
 A. Tlie courts have decided that where an excursion ticket 
 at less than the regular fare is issued, witli this limitation, the 
 company has the right to refuse it on the subsequent day, 
 
 29. If I purchase a through ticket from Newark to Philadelphia, 
 and after getting upon a train of five passenger cars and one palace 
 car, learn there are no vacant seats in the passenger cars, but several in 
 the palace car, can I compel the conductor to furnish me with a seat 
 in that car ? 
 
 A. The passenger cannot " compel " tlie conductor to give 
 him a seat anywhere. But having contracted for the carriage he 
 is entitled to a seat, and if he demands a seat and one is refused, 
 he can bring an action against tlie company for damages result- 
 ing from their breach of contract. 
 
 30. Can one who purcliases four railroad tickets claim and hold 
 against other passengers, four seats, though he occupies but one. If 
 one ticket secures one seat, do four tickets give title to four seats ? 
 
 A. A man may buy four passage tickets, but if this is all he 
 can claim no more room than he can occup}'. But in addition to 
 the passage, he may secure seats or compartments in the palace 
 car, and then he is entitled to the space contracted for, wlietlier 
 he occupies it or not, and may prevent any other person from 
 trespassing on his rights. 
 
 31. We have a customer at Smith ville, Ohio, who has bought 
 some wheat in Chicago, and had it shipped thence to New York by 
 rail. The railroad company gives a bill of lading consigning the grain 
 to us at New York, but containing the clause to be stopped at Smith - 
 ville to be cleaned." The question arises in our minds as to how far 
 the railroad company would be responsible to us in case the grain, 
 after having been taken from the cars at Smithville should not be re- 
 
COMMON CARRIERS. 
 
 83 
 
 turned to them, or, if an inferior quantity of grain should be sub- 
 stituted ? 
 
 A. Ill a case of this kind, the carriers would be more than 
 likely to protect themselves from any liability of the kind referred 
 to by the stipulations of their bill of lading ; but aside from that, 
 if the grain were taken from their custody, on the order of the 
 shipper or consignee, for the purpose specified, they could not as 
 carriers be held responsible for its return to them, or for any- 
 thing that might happen to it while out of their custody. 
 
 32. We had goods shipped from New York via Charleston. On 
 arrival we found one case had been damaged by water on board 
 steamer, but the company refuse to pay damages as the goods were 
 not insured. It is evident that the goods were damaged through 
 negligence, as the steamer made a good passage and had no stress of 
 weather. Please advise us if we can recover. 
 
 A. A common carrier so far insures the safe delivery of 
 goods that if they are damaged by Avater simply from want of 
 proper care he must respond. He must show that the damage 
 came by stress of Aveather or other act of God. 
 
 33. What IS the law in regard to the responsibility of a steamship 
 on leakage occurring on merchandise shipped in good order. On a 
 recent shipment fully one-third arrived empty, and no one seems 
 to be responsible. 
 
 A. If the negligence of the carrier can be established, he can 
 be made to respond in damages. Most of the bills of lading 
 protect the vessel from claims for leakage, and this will bar any 
 claim unless carelessness or mismanagement can be established 
 by evidence. 
 
 34. Having shipped a lot of goods to Hawkinsville, Georgia, by a 
 Florida steamship company, they giving through bills of lading to 
 Hawkinsville, Ga., which bills of lading were copied from the receipts 
 given on the pier by the company's agent, the goods are shipped by 
 the agent to Hawkinsville, Florida. We now have a bill presented by 
 our customer for loss of sale of goods and extra freight. Provided the 
 goods are marked Hawkinsville, Ga., can we compel the steamship 
 company to pay the damages ? In case the goods are marked Florida, 
 and the company's receipt says Georgia, who is responsible ? 
 
 A. If a person ships goods on a Florida steamer, under the 
 circumstances narrated, whether rightly or wrongly marked, the 
 
84 
 
 COMMOX CARRIERS. 
 
 law generally holds him responsible for the error, and he would 
 not be able to recover damages from the line, his own negligence 
 having led to the misadventure. 
 
 35. A ships to B 100 bags of coffee, but describes it in tlie bill of 
 lading as corn, in order to obtain a lower rate of freight. If the ship- 
 ment or any portion be lost, could the road be compelled to pay for 
 coffee or for corn only ? If the road discovers before or after delivery, 
 the true nature of the contents of the bags, can it exact a higher rate 
 of freight than that for which it has already issued a bill of lading ? 
 Could it legally refuse to deliver till the higher rate was paid ? 
 Could the road maintain an action for fraud against A ? 
 
 A. The fraud of the shipper we think vitiates the contract, 
 and places the carrier in the same position in regard to the goods 
 as if they had been shipped Avithout any agreement as to their 
 carriage. The higher rate for coffee could tlierefore be charged, 
 and delivery refused until paid. If the carrier, not having 
 discovered the fraud, should complete the contract according to 
 its terms, he would then, we think, be aide to maintain an action 
 against the ship})er for the deceit and damage. 
 
 36. order one or more cases (of strictly winter goods) to be 
 shipped from Liverpool, so that we can have them in store by a given 
 time. The vessel arrives in good season, but by some oversight or 
 neglect on part of owmers or employees, they are returned to port of 
 departure (Liverpool), and arrive again too late for our sales, neces- 
 sitating our carrying the same until the next season. Where is our 
 remedy ? 
 
 A. The vessel must pay all direct damages occasioned by the 
 unwarrantable delay, to be established by evidence when the case 
 is tried. 
 
 37. On the 7th day of June charter was made in New York for 
 
 the ship , then at Genoa. The said sliip was represented by the 
 
 chartering agents as having been in Genoa some time and ready to 
 proceed to the loading port, and further that she would be at such 
 loading port by the 15th of June, but grace was verbally allowed to 
 the 30th of June. The charter states that the said ship being tight, 
 staunch and strong, and every way fitted for the voyage, shall, with all 
 convenient speed, after discharging inw^ard (at Genoa) cargo, proceed 
 
 to and there load," etc. The said ship did not report at said 
 
 port until some time in August following, insisted upon being 
 
 loaded upon that charter made 7th June, and its consequences. The 
 said charter provides that the penalty for non performance is estimat- 
 
COMMOX CARRIERS. 
 
 85 
 
 ed amount of freight. The questions are : If the charter's agents had 
 declined to load the ship would they not have made the charterer 
 liable to the penalty under ordinary circumstances ? But, under the 
 circumstances, is not tlie ship fully liable for the penalty, in view of 
 the fact that she did not proceed as bound to do ? She did not leave 
 Genoa until about the Gth of August. The charterer having suffered 
 damage and loss in the market value of the material, is he not entitled 
 to recover from the ship and owners ? 
 
 A. It appearing that the voyage from Genoa to the port of 
 loading might have been made in eight days, arriving on the 15tli 
 of June, a delay until some time in August must be considered 
 such a breach of contract as to enable the charterer to recover 
 the stipulated penalty, if made applicable by the charter to either 
 party ; and if the damage is greater than the penalty, he may 
 even abandon the penal clause and recover actual damages. 
 (Abbot on Shipping, 285.) We think the charterer was also 
 fully discharged from his obligation to load the ship. (Freeman 
 V. Taylor, 8 Bing., 124.) 
 
 38. What is the law regulating the right of railroad companies to 
 charge storage on merchandise not removed on the day of its arrival ? 
 
 A number of boxes received on Saturday were carted away, part on 
 the same day and the remainder were called for on Monday. A 
 charge of $4 was imposed and delivery refused until the amount was 
 paid. Is this legal ? 
 
 A. A common carrier must give the consignee notice of arrival 
 and a reasonable time for removal before he can store the goods 
 at his expense. If the goods arrived and notice was given in 
 time to remove them on Saturday and the consignee failed to 
 take them away, the carrier could store them at Tiis expense and 
 make a reasonable charge (no more) for that service ; and he 
 has a lien on the goods until the freight and all such charges are 
 paid. 
 
 39. A western house orders a package of merchandise to be sent 
 to them by express without further instructions. The package is lost 
 by a railroad accident ; who ought to stand the loss ? The express 
 company disclaim any liability over $50, according to the receipt 
 given, the value not being declared. 
 
 A. The loss will lie between the express company and the 
 buyer. We hope to see the time Avhen no express company or 
 other common carrier Avill be legally allowed to shirk responsi- 
 
86 
 
 COMMON CARRIERS. 
 
 bility on account of exceptions and reservations in tlio receipt 
 given. 
 
 40. In case of loss by fire or water, partial or total, of goods ship- 
 ped by the Electric line of steamers, plying between Xew York and 
 Wilmington, Delaware, via Chester, is the ship company responsible ? 
 
 A. The inquiry is too vague for a definite answer. The cir 
 cumstances of the loss must lirst be known, and next the stipula- 
 tions of the bill of lading, if any, limiting the liability of the 
 company for losses of that character. For such losses in general, 
 however, we may say, carriers by water are responsible unless 
 they have protected themselves by special contract in their bills 
 of lading. 
 
 41. Is a steamboat company liable for value of merchandise if lost 
 while in transit, either by accident or carelessness ? Is a railroad com- 
 pany equally liable in case of loss ? Is the responsibility the same if 
 goods are burned or otherwise destroyed in company's depot at either 
 end of the route, while still in their possession ? What is the differ- 
 ence of liability between what is known as an inland line (steamer on 
 river or sound) and an outside or ocean line, in case of loss ? 
 
 A. Common carriers, whether by land or water, inland or 
 ocean, are responsible for loss or damage of merchandise which 
 they have undertaken to transport, unless the injury is done by 
 means beyond the control of man, known as the act of God," 
 or by the })ul)lic enemy ; or unless by contract, inserted in the 
 bill of lading or otherwise, or notice brought home to the shij)- 
 per, they have restricted their common law liability. Their re- 
 sponsibility begins as soon as the goods are in their custody, and 
 is the same whether in warehouse or depot or in transit, except that 
 after arrival at destination, and the carrier's duty as to notice to 
 the consignee has been performed, they are no longer lial)le ex- 
 cept for ordinary care of the property. There is also a luitional 
 law, by which vessel owners may esca})e liability for loss beyond 
 the value of their interest in the vessel, and her freight on the 
 voyage during which the loss occurred. 
 
 42. On the 31st July a person in the South shipped us 100 bales 
 of cotton, receiving therefor from, the steamer a bill of lading. The 
 shipper before attaching draft to bill of lading wrote across it, " Insure 
 this shipment under your policy," and in obedience to these instructions 
 the cotton was insured on the steamer from port to port. On arrival 
 
COMMON CARRIERS. 
 
 87 
 
 of steamer we find that one half the cotton was burned on the steamer's 
 dock the day after the bill of lading was signed. As the cotton was 
 only insured on steamer, the insurance company will not recognize the 
 claim. We claim that we followed instructions in insuring as soon as 
 we received the bill of lading, and also that the steamship company is 
 liable to the shipper for the lost cotton, for the reason that they did not 
 use proper diligence in allowing the cotton to remain a day on their 
 dock after their bill of lading had been issued. 
 
 A. We presume the insurance company's claim of exemption 
 from liability to be well founded, as the cotton was never on 
 board the vessel, but of this we cannot be sure without having 
 before us the language of the policy. The terms of the bill of 
 lading are also important. If it does not contain tlie common 
 exception against losses by fire, the steamship company is un- 
 doubtedly responsible for the value of the burned cotton. But if 
 loss by fire is excepted in the bill of lading, liability of the com- 
 pany becomes a nice question of law and fact. The weight of 
 authority makes the carrier liable notwithstanding the stipulated 
 exception, if the loss is due to his negligence ; but the question 
 whether he was in fact negligent in permitting tlie cotton to lie 
 over night on the wharf, is one for the jury, and would depend 
 in part upon facts not in our possession ; as, for example, the time 
 of day when the cotton was delivered to the ship, the amount of 
 freight in advance of it on the wharf, &c. 
 
 43. Among other stipulations contained in the body of a bill of 
 lading as used by the New York and Savannah steamships is the fol- 
 lowing, viz.: "It is expressly stipulated that the articles named in 
 this bill of lading shall be at the risk of the owner, shipper, or consignee 
 thereof, while on the pier or wharf awaiting shipment, and as soon as 
 delivered from the tackles of the steamer at her port of destination ; 
 and if not taken away the same day by him they may (at the option of 
 the steamer's agent) be sent to store, permitted to lay where landed, 
 or returned to the port of shipment, at the expense or risk of the 
 aforesaid owner, shipper or consignee." Under this clause to what ex- 
 tent, if any, is a steamship liable as a common carrier for the loss or 
 damage by fire or robbery after the goods are safely landed on a 
 covered wharf at the usual place of discharge, competent watchmen 
 being always on the wharf to guard the goods ? It is not customaiy 
 in this port specially to notify consignees of the arrival of goods, but a 
 general notice of all tlie consignees by each steamer is published in the 
 daily pajiers succeeding the day of arrival. Suppose goods lie on the 
 wharf over Sundays or legal holidays ; at whose risk are they ? What 
 were the points, circumstances, and decision in a case which we believe 
 
88 COMMOX CAIUUERS. 
 
 passed through your courts a few years since, where a " Sound" 
 steamer discharged her cargo on a covered pier, her usual place of 
 landing in your city, on 3d of July, and the goods (leather we think) 
 were destroyed by fire on 4th of July, a legal holiday ? 
 
 A. Tlie case relative to wliicli our correspondent inquires 
 was that of Ely v. New Haven Steamboat Company, 53 Barl)., 
 207. The plaintiff had. been in the habit of receiving consign- 
 ments weekly for a long time, by defendant's boats, and a ship- 
 ment of leather for him arrived at the wharf early in the morn- 
 ing of July 4, and was })laced on the pier. No notice was given 
 of its arrival, it was left until the next day, and on the afternoon 
 of the 5th it was destroyed l)y fire. It was shown that plaintiff's 
 store was closed on the 4th, so that no notice could have been 
 given, and the court said that the responsibility of the steamboat 
 company under these circumstances as a carrier had ceased, and 
 only that of a wharfinger, for actual negligence, remained. 
 
 This case, however, is not as decisive as could be wished on 
 the main question in the case described by our correspondent, 
 viz.: Whether actual, and not merely constructive notice to con- 
 signee is necessary in order to terminate the carrier's liability as 
 such. The court relied in part on the long course of dealing 
 between the parties, and in part on the fact that the plaintiff's 
 store was closed on the 4th, in order to dispense with notice, and 
 still intimated that the question whether notice was not required 
 properly might have been left to the jury. We cannot find that 
 the Georgia courts have adjudged the point, but the Louisiana 
 Supreme Court (Ivohn & Bordier vs. Packard, 3 La., 224,) has 
 ruled strongly the otlier way, deciding that even proof of usage 
 would not discharge the carrier from the necessity of giving 
 actual notice to the consignee of the arrival of his goods, news- 
 paper notice not being sufficient. We will not undertake to pre- 
 dict which way the Georgia courts will decide, tliough the weight 
 of authority seems to be that actual notice, and an opportunity 
 to take away the goods, must be afforded the consignee, before 
 the carrier's responsibility, as such, will cease. The stipulation 
 in the bill of lading above described might hv licld to dispense 
 with the second branch of this requirement, l»ut it would have no 
 bearin<'' on the first. The steamboat company renuiins liable as 
 
CHECKS. 
 
 89 
 
 warehousemen, for ordinary care of the property, after their lia- 
 bility as carriers ends, and until the property is actually claimed 
 by the consignee. 
 
 CHECKS. 
 
 CERTIFICATION. 
 
 1 . I wish to he referred to New York State cases and United States 
 Court cases deciding responsibihty of parties to raised check, both 
 before and after certification. 
 
 A. The principal New York case on this subject is that of the 
 Marine National Bank v. The National City Bank, decided by 
 our Court of Appeals in 1874, and reported in 59 N. Y., 67. It 
 was there held, as stated in the syllabus, that a bank, by certi- 
 fying a check in the usual form, simply certifies to the genuine- 
 ness of the signature of the drawer, and that he has funds suffi- 
 cient to meet it, and engages that these funds will not be with- 
 drawn from the bank by him ; it does not warrant the genuine- 
 ness of the body of the check as to payee or amount." The de- 
 cision, which contained a miserable pettifogging argument in its 
 support, excited a great deal of criticism, and a motion for re- 
 argument was made, but this was denied without any sufficient 
 reason. 
 
 Under this rule it makes no difference, so far as the respon- 
 sibility of the certifying bank is concerned, whether the altera- 
 tion is made before or after certification 
 
 Daniels says : " Where money is paid by a bank upon a ' raised ' 
 or altered check by mistake, the general rule is that it may be re- 
 covered back from the party to whom it was paid, as having been 
 paid without consideration, but if either party has been guilty of 
 negligence or carelessness, by which the other has been injured, 
 the negligent party must bear the loss. The doctrine is clear 
 and is sustained by authority. The bank is not bound to know 
 anything more than the drawer's signature, and in the absence 
 of any circumstance which inflicts injury upon another party, 
 there is no reason why the bank should not be reimbursed." 
 (Negotiable Instruments, vol. 2, p. 573.) The following decis- 
 sions are cited, in addition to the New York case above : Espy 
 V. Bank of Cincinnati, 18 Wall (U. S.), 614 ; Redington v. Wood, 
 45 Cal., 406 ; Nat. Park Bank v. Ninth Nat. Bank, 46 N. Y., 77 ; 
 
90 
 
 CHECKS. 
 
 Bank of Commerce v. Union Bank, 3 Corns., 230 ; Third National 
 Bank v. Allen, 5l» Mo. 
 
 2. Does the certification of a check by a bank release the drawer 
 from responsibihty ? If so, does it make any difference whether the 
 certification is procured by the drawer or the holder of the check ? 
 
 A. If the drawer of a check gets it certified, and pays it out, 
 he is held for it precisely as if there were no certification upon 
 it. But if the holder presents the check, and instead of drawing 
 the money takes the certification, he thereby releases the drawer 
 from all responsibility in case the bank should fail or suspend be- 
 fore the money is drawn. 
 
 3. A has presented to him a draft by the collector of a bank, and 
 having accepted it, received a notice of the day on which it was due, 
 at the foot of which is printed checks on other banks not received 
 unless certified." On the day when the draft is due A presents his 
 check, certified, in payment of the draft, and receives the draft and 
 bill of lading. A defalcation occurring in the bank on which the 
 check is drawn, when it reaches it in the regular course of clearing, 
 payment is refused, as the bank has suspended payment. Now is A 
 held for the payment of the check, or if not, to whom does the bank 
 holding the check look ? 
 
 A. The drawer who pays out a certified check is held for it to 
 the close of the next business day, if all the parties are in one 
 city or town ; after that, if he has the money to his credit, the 
 payment is at the risk of the receiver. 
 
 4. I send a check for $40 to the bank for certification, duly en- 
 dorsed. The paying teller refuses to certify it, but says he will pay it 
 if the bearer is identified. Can I compel the bank to certify the check 
 or else pay it without identification ? 
 
 A. There is no law compelling an indorser to identify him- 
 self at a bank, nor is there any legal course by w^hich the holder 
 can compel the bank to certify or pay the check without it. It 
 is a case for mutual concession and accommodation, and for the 
 protection of the community every man ought to be willing to 
 take the pains to identify himself where he is unknown. He de- 
 mands payment of the bank, and the Ijank not knowing him re- 
 fuses payment. He luis the check ])rotested if the bank still 
 persists, althouuli when presented by a notary, who vouches for 
 the endorsement, the bank would probably pay. But suppose 
 the check is protested, the holder can then sue, not the bank, but 
 
CHECKS. 
 
 91 
 
 the drawer of the check, and compel him to pay the same, with 
 the costs of protest. The drawer coukl then sue the bank for 
 damages consequent on its refusal. The bank would plead that 
 the endorser was nnknown and refused to identify himself. The 
 jury in such a case would probably return six cents damages, 
 that would not carry costs. Or if small damages were given the 
 drawer would probably be asked to withdraw his account. The 
 truth is, that it is best for the interests of all that the bank 
 should insist upon identification, but as it has no legal right to 
 demand it, the request should be made of the indorser as a mat- 
 ter of courtesy and mutual protection. 
 
 5. Suppose a party deposits in his bank a check certified by 
 another bank after banking hours, and credit received, but the money 
 not demanded until next morning, when payment is refused, can the 
 depositor be held liable ? 
 
 A. We do not see how a bank can refuse to pay a check it 
 has certified unless it is insolvent. In this or in any other case 
 the depositor would be liable if the check was duly presented the 
 next day for collection. 
 
 FORGED, RAISED, AND LOST. 
 
 6. A gentleman offers this among the reasons why we should pur- 
 chase his patent to prevent altering figures upon checks, that in case 
 our check is altered from fifteen dollars to fifteen hundred dollars, we 
 would lose the difference in case of the banks paying it. We say, 
 "No, the bank would lose it." 
 
 A. If the check is properly drawn, the drawer cannot lose 
 anytliing by its subsequent alteration. In this State (N. Y.) our 
 highest court has decided that even the bank which pays the 
 altered check need not lose the extra sum to which the order has 
 been raised, but can recover it of the payee, or the bank through 
 which the payee has collected it. But the drawer is not called 
 upon to suffer. 
 
 7. A gives a bank check to the order of B ; B indorses it in blank 
 and passes it to C, and C carelessly loses same. Payment of check has 
 been stopped at bank. Bank requests A not to issue a duplicate 
 check. If the check falls into an innocent party's hands and is paid, 
 would A. be responsible for check ? 
 
 A. The check is negotialjlc, and one who receives it in good 
 faith, without notice and for value, can recover it of the drawer. 
 
92 
 
 CHECKS. 
 
 8. As a matter of law, barring all custom, suppose John Jones 
 draws a check on his bank payable to his own order, and then in- 
 dorses it unconditionally, with his signature only, puts said check in 
 his pocket, loses it, it is picked up by some stranger, is presented at 
 the bank on which it is drawn, and paid by said bank, whose loss is it ? 
 Is the bank legally liable for not exacting the customary identification 
 of the person presenting the check for payment? Further,^ is the 
 bank bound by law to pay said check in legal tender without identifi- 
 cation of presenter ? 
 
 A. The bank has nothing to do with the "presenter" if it 
 knows the signature and is satisfied that the check is properly 
 indorsed. John Jones instructs the bank to pay a certain 
 amount to his own order. If he indorses it and the bank knows 
 his signature, the check is then payable without further identifi- 
 cation of anybody. If he loses such clieck and the money is . 
 irawn beyond recovery, he loses the money, as tlte bank can 
 charge the clieck to liis account. This is both law and custom. 
 
 9. My name is forged to amount of $350. I prove that all checks 
 over S75 are made "to order." Is there any lack of care on my part 
 in the matter, and am I in any sense legally responsible for loss to the 
 bank ? 
 
 A. We do not see how a man can be held responsil)le for a 
 forged check with which he has no concern, wlictlier he ])roves 
 the point stated or not. If a man has, by gross negligence, 
 aided in the issue of a forged check, he may be liable for that as 
 for any other negligence by which his neighbor suffers. 
 
 1 0. Our traveller collected a bill and the check was made to our 
 order. He forged an indorsement and obtained the amount from the 
 banking house. Can we recover from the latter ? 
 
 A. This has been legally decided. If the check was paid by 
 the drawee our correspondent can collect the money. The better 
 way, however, is for the drawer of the check to refuse to have it 
 charged to his account and to issue a new check for the same 
 amount. If the drawer declines to do this, our correspondent 
 can sue for his bill. 
 
 1 1 . The owner of a lost check requests the drawees to stop pay- 
 ment of it, saying : "My name, if indorsed on the check, is forged." 
 The check is presented for payment by a bank and is, apparently, 
 properly indorsed. Have the drawees the right to refuse payment, no 
 instructions to that effect having been given by the drawers ? 
 
CHECKS. 
 
 98 
 
 A. In England the drawee of a check is protected l)v act of 
 Parliament in paying it to any person who presents it, if it ajn 
 pears to be properly indorsed, although that indorsement may be 
 a forgery, but in this country the drawee must see tliat tlie in- 
 dorsement is genuine, and he pays it at his oavu peril. If the 
 drawees of the above check pay it, and the indorsement of the 
 payee is forged, they will simply lose the money, as they cannot 
 charge it to the drawer'? account. They need not, therefore, 
 wait for instructions, but liave the right to protect themselves. 
 
 12. Who suffers the loss in the following case: A B gives his 
 check payable to C D, or bearer, the usual way checks are drawn, for 
 $100. C D loses the check and it gets in the hands of another party, 
 for value. C D gives notice to the drawer that he has lost the check, 
 and requests him to give notice to the bank on which it is drawn not 
 to pay it, which is done before the check is presented for payment. 
 
 A. A B is responsible to a bona fide holder of the check for 
 its value, although he has stopped its payment at the bank, and 
 C D must lose it, unless the "other party" can recover "the 
 money of the finder who passed it to him. 
 
 13. About a month ago a servant girl lost a check for about $40 
 that a gentleman had given her for her wages. She called on the gen- 
 tleman, and he went to the bank and had the payment stopped. She 
 has called on him several times since. He says the check has not been 
 presented to the bank, but he will not give her the money, neither will 
 he give her any encouragement. What is the best course for her to 
 take ? Is it necessary to advertise the loss of the check in the 
 papers, etc. ? 
 
 A. If the check was payable to bearfer it is negotiable as it 
 stands, and the girl must give bonds -in two good sureties to hold 
 the drawer harmless before she can lawfully demand either the 
 money or a new check. If she has friends who will do this for 
 her, the drawer of the check will doubtless advance the monev ; 
 in fact the law will compel him to do it. If she cannot obtain 
 such sureties she must wait with patience until the employer can 
 feel certain that the check will not turn up against him. 
 
 14. A bank in this State, to whom we sent a note for collection, 
 collected the amount from the drawer of the note, and the check 
 which they sent us in settlement was lost in the mails. The bank re- 
 fused to issue a duphcate check to us without being indemnified 
 against loss, by reason of the possibihty of tiie original check being paid 
 
94 
 
 CHECKS. 
 
 at some future time. Are we obligated to give the hank such a bond ? 
 
 A. Yes, our correspondent must <>i\e a l)oiid witli two sure- 
 ties (if demanded) Itefore lie can exact a duplicate check. 
 
 15. You decided that a drawer of an original and a duplicate 
 check may, under certain conditions, be held liable for the payment of 
 both. I think you decided some time ago that the drawer could pro- 
 tect himself by putting on the one, ''duplicate unpaid," and on the 
 other, "original unpaid," thus giving notice to the purchaser of either 
 that the other is one ? Am I correct ? 
 
 A. Our correspondent is correct; if the drawer issues his 
 checks in original and duplicate, with a plain statement that one 
 being ])aid the other shall stand void, he can protect himself, but 
 each of the issues must have this condition clearly included in 
 the order; unfortunately in the case we were considering, the 
 original" was issued with no reference to any "duplicate,'" and 
 the holder of it in good faith for value can therefore claim the 
 amount from the drawer, although a duplicate has been issued 
 and paid. 
 
 1 6. A draws check to the order of B for $100 and mails the same 
 to 13, who indorses the check and deposits it with bank for collection. 
 The bank forwards same for collection, and the check is alleged to be 
 destroyed or lost. Would A be safe to draw a duplicate check for B 
 without a bond of indemnity, three months having elapsed since orig- 
 inal check was drawn ? 
 
 A. The lapse of time would render it comparatively safe to 
 issue a duplicate check; but the bank which forwarded the 
 check for collection, and is responsible for its loss, ought to write 
 a letter to the drawer agreeing to protect him from loss in the 
 transaction in case he forwards the duplicate. 
 
 17. Seeing an account of the mail robbers and their taking letters 
 from the mail bags with checks inclosed by New York firms to out-of- 
 town correspondents, in settlement of accounts, forging the signature 
 of the firm drawing the check on the back of the check, and thus 
 seeming to guaranty the indorsement as correct, presenting this to the 
 banks and obtaining the money : we want to know, in such a case, who 
 is responsible for the money paid out by the bank ? 2d. We are in the 
 habit, when requested by W^estern concerns, to remit to them balances 
 due them by our check inclosed in a letter to them. In case such a 
 check should come by unfair means into another party's hands and 
 eventually be paid by our bank (we not knowing anything in regard to 
 it), w^ould not we be relieved from any responsibility in regard to it by 
 the fact of the request from the Western party to remit check to him ? 
 
CHECKS. 
 
 95 
 
 A. Where a check is made payable to the order of a third party, 
 and his indorsement is forged, tlie bank which pays it must stand 
 the loss. In case a person is requested to remit his check in pay- 
 ment of an account and it is lost in the mail, the risk as between 
 the two falls upon the correspondent who asks for it ; but if it is 
 drawn to order, and the money paid on a forged indorsement, 
 the loss falls on the bank, which cannot, in such a case, charge 
 it to the drawer's account. 
 
 18. Can a check upon a bank, payment of which is refused because 
 of irregularity in indorsement, be legally protested ? To illustrate, 
 the check is drawn to order of John R. Jones, and is indorsed J. 
 Jones. The bank has no means of knowing that John R. Jones and 
 J. Jones are one and the same person; and the holder of the check 
 refuses to guaranty indorsement. 
 
 A. The check may be " protested" if not indorsed at all pro- 
 vided the holder chooses to go through that form, but no costs 
 for protest can be collected of the drawer, and no action thereon 
 be taken against the bank. Moreover, if any damage results to 
 the drawer directly from such protest, he may recover it of the 
 party responsible, as payment of the check duly indorsed had 
 not been demanded and refused. The bank would be fully justi- 
 fied in refusing the unguarantied indorsement of J. Jones, on a 
 check payable to the order of John R. Jones. 
 
 INDORSEMENT. 
 
 19. On the first day of November A gives B check for $500, B 
 indorses the check and pays it to C, C holds the check until December 
 1st. In the meantime A makes an assignment, and C then sends the 
 check to the bank and the check is protested and sent back to C. Now 
 does C lose the amount of the check, or is B obliged to take check 
 back from C ? 
 
 A. The indorsement of B only binds him to make the check 
 good one full day after C has had an opportunity to present it. 
 If it was drawn on a l)ank in the same place, and C did not pre- 
 sent it the next day (at least) after he received it, he has no re- 
 course to B, but must look wholly to A for his pay. 
 
 20. Does the guaranty of indorsement on the back of a check in- 
 crease in any way the liability of the last indorser from whom I receive 
 it ? and if not, why do most of the banks require it, both from banks 
 and individuals ? 
 
96 
 
 CHECKS. 
 
 A. Some persons liave an idea that an indorser only g:naranties 
 the gennineness of the person's signature and not to its entire 
 extent the sufficiency of the indorsement ; hence the request for 
 a guaranty. 
 
 21. Is not B's indorsement on A's check a legal receipt against all 
 demands ? 
 
 A. Tlie indorsement and use of a check containing such in- 
 terlineations impose no corresponding obligations upon the payee. 
 The words are mere surplusage. 
 
 22. If I deposit a check drawn to the order of another pai'ty, and 
 indorsed, and it is not good" when it arrives at the bank on which it 
 is drawn, how long will the indorser be liable ? 
 
 A. If the check is drawn on a bank in the same place tlie in- 
 dorser is held all the day on which he passes it to the depositor 
 and all the next day. If on a bank in another city, and it is sent 
 for collection within the time specified, and due notice given of 
 its non-payment, tlie indorser is held. If there is a greater delay 
 in presenting it than the time specified, the indorser is not liable. 
 
 23. A check to the order of John Smith is lost and falls into the 
 hands of a second party of the same name, who, knowing the check is 
 not intended for him, indorses it and secures the money thereon. 
 Was he guilty of forgery, and if not, on what charge could he be 
 prosecuted ? 
 
 A. The bank can l)e compelled 'to make restitution of the 
 money, just such a case liaving l)een legally decided against the 
 American Exchange Bank, which supposed it had assured itself 
 of the identity of the indorser. As for John Smith, his offense 
 is constructive larceny, for which he can be punished if caught. 
 
 24. A B draws a check on one of your city banks for $10,000 in 
 favor of his brother, C D ; C D indorses tlie check back to A B ; A B 
 then mdorses the check over to E F. Upon presentation at the bank 
 the check is found to be worthless. A B is insolvent when the check 
 is presented, but C D is good for the amount. Can E F recover from 
 C D as indorser, E F being innocent purchasers ? The question is one 
 of local interest, and I wish to know if the transfer of the check from 
 C D to A B, completing the transaction between the drawer and the 
 first indorser, does not release C D from subsequent liability ; in other 
 words, does not the indorsement of C D back to A B complete the 
 transaction ? 
 
CHECKS. 
 
 97 
 
 A. A prior indorser to whom the check comes back has ordin- 
 arily no claim on a subsequent indorser who lias possession 
 between the incidents, nor would the drawer himself have such 
 a claim. But E F, in the case described, would have a recourse 
 to all the previous names, provided there was no break in the re- 
 sponsibility by lapse of time and want of due diligence in collec- 
 tion. If the check was good when C D indorsed it back, and 
 payment was subsequently refused because of a day of more than 
 24 hours in the demand at tlie bank, C D would not be held, no 
 matter to whom he indorsed it. 
 
 25. We took a check of a customer, drawn by another party to 
 his order, which was returned to us protested. Not sufficient funds." 
 The maker of the check lives in Camden, N. J., but does business here, 
 and drew the check on a Camden. N. J , bank. The indorser will not 
 pay, and on inquiry we find that the drawer has had but one dollar on 
 deposit for over six months, the bank notifying him it would not re- 
 ceive farther deposits from him, and telling us they have thrown out 
 probably fifty checks of his within that time. Can we sustain criminal 
 action against him for issuing a worthless check, and should such 
 action be taken here or in New Jersey ? 
 
 A. In the first place if due diligence was used in collecting the 
 check, the indorser must pay it if he is solvent, or the debt can 
 be collected of him at any rate. Sending a Avorthless check does 
 not discharge the " customer" from his obligation, nor settle his 
 bill. 
 
 In the next place we think the circumstances will warrant the 
 arrest of the maker by the person to whom the check was given, 
 provided the former obtained any property through its issue, 
 since the refusal of the bank to receive any further deposits from 
 him shows that he knew the check was worthless. 
 
 The better way in this case would be to arrest him here. 
 
 26. State if the holder of a check for any amount drawn as follows, 
 "pay to the order of bearer" (latter word filled in with ink), is com. 
 pelled by any legal decision to indorse his name on back of same 
 in response to a demand by the bank on which it is drawn, before 
 he can obtain the money. State the law bearing on same. 
 
 A. Some bank letters have held that a check in wliich the 
 blank left for a name is filled up with the word " bearer," so that 
 it reads as if payable " to the order of Nearer," must be indorsed 
 
 7 
 
98 
 
 CIIKCKS. 
 
 by whoever shall be the bearer. But the courts have decided 
 (Willets V. Pha}nix Bank, 2 Duer, 121), that where the blank is 
 filled up with a fictitious name, or to the order of bills payable" 
 or the like, that the check is precisely the same as if it read 
 " pay to the bearer," and requires no indorsement to be legally 
 demanded, and protested if payment is requested. 
 
 27. Is the endorsement on a check. Pay the within to N. N. N.," 
 proper and correct ? 
 
 A. The indorsement is both proper and correct. It would be 
 just as effective, however, if the words " the within " were 
 omitted, and if the further neg'otiability of the paper is essential. 
 " Pay to the order of X. X. X." is better. 
 
 28. A check is indorsed in this way: 
 
 Pay with check to our order. 
 
 John Jones & Co., 
 
 and is presented at a banking-house for payment. Is that a limited in- 
 dorsement ? Have the indorsers the right to dictate the way in which 
 the check shall be paid, and if their signature is known to the 
 drawees, and they pay the check in cash, and the messenger absconds, 
 can they be made to pay again ? 
 
 A. The form quoted above is not a limited, but a restrictive 
 indorsement. The drawee has no right to pay except in a clieck 
 to the order of the mdorser, but he may decline to pay altogether 
 on the ground that this is not a full indorsement. If he pays in 
 any other way it is at his own risk. 
 
 MISCELLAXEOUS. 
 
 29. I am the possessor of a note due at a bank. I keep an ac- 
 count with the bank, and send my check to retire the note. The 
 check is filled up thus: ''Pay for retiring note due December 29, 
 1878, or order." Suppose the check falls into improper hands and is 
 presented at the bank, would the bank treat it as payable to bearer in 
 the absence of a name ''to order" ? 
 
 A. The courts have treated memoranda in the body of a 
 check with so much indifference that it would not be safe to say 
 that this order could only be used for the purpose specified. 
 "Pay for the ])urpose of exchange" has been held as payable to 
 any bearer. If the drawer of the check wishes to avoid all other 
 use of his check he can guard it better, " Pay only on the order 
 of the bank to cancel my note of this amount due December 
 29," would be a better form. 
 
CHECKS. 
 
 99 
 
 30. If a check is drawn on a bank, and written in the body for 
 $1,500, but in figures on the corner of the check plainly marked 
 $1,005. is a bank justified in paying the $1,500 as designated in the 
 body of the check. Our bankers here contend that they are right in 
 paying a check in accordance with what is written in the body, irre- 
 spective of the figures on the corner. They contend this is in accord- 
 ance with custom, and their lawyer is of the opinion that the courts 
 would sustain this position, though the amount intended to be drawn 
 for was only $1,005 Is it not the duty of the bank in a case of this 
 sort to tender only the lesser amount, and if payment of the larger 
 amount is insisted upon by payee, should not the bank refer the mat- 
 ter back to the drawers if circumstances will permit thus doing so ? 
 Otherwise only pay the larger amount upon being indemnified. To us, 
 looking at it in its common sense view, it would seem that the courts 
 would hold a bank to such a rule, but as there is a difference of 
 opinion, we would thank you to give us your opinion, sustained if you 
 can, by auy legal decisions ? 
 
 A. This question has been met and decided in a multitude of 
 cases. " The sum payable is usually specified in figures in the 
 upper or lower left hand corner of the instrument, as \vell as in 
 writing in the body of it. Where a difference appears between 
 the w^ords and figures, evidence cannot be received to explain it; 
 b.ut the words in the body of the paper must control. Daniel on 
 , Neg. In., vol. 1, page 66; Payne v. Clark, 19 Mo., 152; Riley v. 
 Dickens, 19 111., 30; Mears v. Graham, 8 Blackf., 144 ; Saunder- 
 son Y. Piper, 5 Bing., N. C, 425 ; Smith v. Smith, 1 P. L, 398 
 (wTiere it was 8175.94 in figures, and three hundred and seventy- 
 jive 94-100 in writing) ; 1 Parsons N. & B., 28. Daniel on Neg. 
 In., vol. 2, page 509, 'Where the marginal figures differ from 
 the w^ritten words, the words should be attended to, and not the 
 figures.' " 
 
 31. A check is drawn on a bank made payable to bearer. The 
 payee hands the check over to a third party ; the third party indorses 
 the check to the order of a fourth party. When the fourth party pre- 
 sents the check at the bank, is the latter bound to notice the indorse- 
 ments at all. or could it be held for loss, unless the check had been 
 made to order on the face, and should it require identification ? 
 
 A. Where a check is payable on its face to bearer, the 
 drawee is not bound to take notice that it has been indorsed with 
 a condition. But where his attention is drawn to such an in- 
 dorsement the drawee may reasonably demand the identification 
 of the holder, and ordinary care for the interests of othei^ re- 
 quires that he should do it. 
 
100 
 
 CHECKS. 
 
 32. A draws a check to the order of B for $20, but tlie check 
 should have been drawn for $30. Now if A writes across tlie face of 
 the check that it is for $30, and alters the figures, is it good and can B 
 draw the $30 ? 
 
 A. The check would be considered bv any of onr banks a 
 sufficient voucher for -$30, and would be paid to the order of B if 
 properly indorsed. 
 
 33. You say in reply to an inquiry regarding the omission of the 
 date of a check, -'The receiver may supply the date, but it is wholly 
 unnecessary, as it is just as negotiable or payable without it." Morse, 
 in defining the requisites of a check, says: It must be dated, for a 
 check is not payable until dated." 
 
 A. We liad before us " Morse on Banking," page 238, which 
 states that " it would seem, that if a check is not dated at all, 
 and contains no statement of a date when it is to be paid, it is 
 never payable," when we made our former answer. It may 
 " seem" so to Mr. Morse, but there is no authority wliatever for 
 it in law. Daniel on Neg. Ins., vol. 2, page 508, quotes this from 
 Morse, and disputes it, saying- "There is no adjudication to 
 this effect, and while it may be that a bank would l)e warranted 
 in refusing to pay an undated check (and this is doubtful), it 
 would not be unreasonable for it to assume a contemporaneous 
 date and to pay it accordingly." It is true that there has been 
 no adjudication of this exact question, but the case of De la 
 Courtier v. Bellamy, 2 Shower R., 422, where no date was set 
 forth in the declaration of a bill, and the court held that it was 
 immaterial, and they would assume the date on which the 
 declaration stated that the bill was drawn as the true date of the 
 bill, shows that a date is unnecessary to the validity or negotia- 
 bility of such a document, unless it is expressly payable at a 
 given time from date. Bell Com., Chitty, Bayley, and all, agree 
 tliat an inland bill of exchange is good without date. Story says 
 "there should be a date, but it is not indispensable," and he adds 
 that if to ascertain the interest " it should become necessary to 
 be inquired into, it may be ascertained by evidence, and the date 
 will be computed from the day it was actually made or issued." 
 The holder of an undated check may supply the date, or the bank 
 may pay it without a date, having the right to assume that the 
 
CHECKS. 
 
 101 
 
 date is past or present, either of which would make the payment 
 proper and lawful. 
 
 34. Is a bank teller justified in refusing to pay a check made, 
 dated, and signed on Sunday ? 
 
 A. Tliere is no good reason why a bank should refuse to pay 
 a check dated on Sunday. 
 
 35. Is a check dated ahead good in case the signer thereof dies 
 previous to the date of the check ? 
 
 A. A check dated ahead is just as good after the drawer is 
 dead as a check dated yesterday Neither of them is then col- 
 lectible at the bank, and each is our evidence of debt against the 
 estate and nothing more. 
 
 36. We owe a party in Augusta, Ga., $500. He instructs us to 
 remit him in New York exchange, which we do by sending a national 
 bank check on a national bank in New York city. Does our responsi- 
 bility in the matter cease here ? Should the bank fail before the 
 check is paid could we be held responsible for the payment of the 
 check ? 
 
 A. Our correspondent is responsible until the Georgia credi- 
 tor has opportunity to collect the check by due course of mail, 
 unless the instructions to remit are so worded that tlie remit- 
 tance, if made in good faith, is at the risk of the receiver. 
 
 37. Please tell us the difference, if any, between drafts and 
 checks as used in commercial intercourse ? 
 
 A. A check was originally defined to be " a draft or order 
 upon a bank or banking-house, purporting to be drawn upon a 
 deposit of funds, for the payment at all events of a certain sum 
 of money to a person therein named, or to him or his order, or 
 to bearer, and payable instantly on demand." The term " draft" 
 may be used to describe a check, but it is generally applied to an 
 inland bill of exchange. A check is a species of bill, but has 
 some peculiarities, as above described, not applicable to an ordi- 
 nary bill of exchange. There are many documents concerning 
 which the authorities declare that the holder of one may, at his 
 option, treat it either as a bill of exchange or as a check. Thus 
 a check dated ahead was once classed as a bill of exchange, but 
 has finally come to be known as a post-dated check, and a mem- 
 orandum check has been legally recognized as such. 
 
102 
 
 CHECKS. 
 
 38. A is owing B a bill, in payment of which a post-dated check 
 is accepted by a clerk of B, each party doing business at the same 
 bank. B, who does not sanction the act of his clerk, demands pay- 
 ment of the check from the bank. Has the bank any right to negoti- 
 ate that check, charging A's account, thus nullifying an agreement 
 which had been entered into in good faith ? And is not the accept- 
 ance of post-dated checks an implied agreement to wait until their 
 maturity, which would be broken by an effort to negotiate ? 
 
 A. The check, whoever liolds it, is not good against A's ac- 
 count until the day of its date is reached, but there is nothing in 
 la^v or equity to prevent B from negotiating it as soon as he re- 
 ceives it, if he can find any one to give him the money for it. If 
 the bank takes it, and gives B credit for the money, it cannot 
 charge the money to A until the day of the date. 
 
 39. A person draws a check on his bank to the order of another 
 as a loan to him. who immediately absconds, and the bank is notified 
 not to pay. Is he liable to any holder of said check any time after? 
 
 A. The dra^ver of the check is responsible for the money to 
 any indorsee wiio received it for value in good faith, and if 
 solvent he can be compelled to pay it. 
 
 40. A gives B his check payable to Cash. B loses the check on 
 Sunday and notifies A immediately. The next day A sends written 
 notice to the bank to stop payment. Three months later A has his 
 book balanced and finds that the check has been paid two weeks pre- 
 viously. Can B recover the amount from A ? Can A hold the bank 
 responsible ? 
 
 A. A had the right to stop payment of the check at the 
 bank, but Avas liable for it to an innocent holder for value. In 
 this case it looks as if the bank had not used due diligence in 
 paying it after the order to stop it, unless there was some altera- 
 tion of tlie date or other deception. If so, the Imnk must lose 
 it. If not, then the loss falls upon B, whose carelessness caused 
 the difficulty. 
 
 41. A orders a bill of goods from B which amounts to $200, for 
 which he tenders a $300 check, which is accepted by B, who gives his 
 check in return as change for $100, payable to bearer or order. After 
 A leaves the store his check proves to be a forgery. (^annot B stop 
 the payment of his $100 check, and finally cannot the drawer of a 
 check always stop payment of the same, if necessary ? And if so, 
 what becomes of the check in the meantime ? Say the check is pay- 
 able to bearer, the holder presents it to the paying teller and has it in 
 
CHECKS. 
 
 103 
 
 hb hand when the drawer calls and says "Don't pay," what does the 
 bank do in such a case ? 
 
 A. The drawer of a check can always countermand its pay- 
 ment at any time, unless the bank has certified it. But such 
 stoppage does not release the drawer. In the above case the 
 bank would pay at its peril, and any institution would of course 
 refuse to cash the check thus stopped by the drawer. But the 
 holder, if he has taken the check in good faith for value, can sue 
 the drawer and recover the money. We suppose that the person 
 presenting the above 8100 check at the bank had taken it of the 
 rogue and given value for it. In that case, while the drawer can 
 stop its payment at bank, he must reimburse the holder. It is 
 not an obligation against the bank, but it is good against the 
 drawer, who must take it up. 
 
 42. Is it an indictable offence to give a check upon a bank where 
 one has no funds ? Is it not the presumption of the law that the 
 maker of the check intends to have funds to meet it before the bank 
 closes ? 
 
 A. There is no presumption of fraud where one who has an 
 account in a bank issues a check upon it, although he has not a 
 sufficient amount on deposit to meet it. This is done by very 
 many respectable houses every business day in the year, the ac- 
 count being made good for all outstanding checks before the 
 bank closes. 
 
 43. A keeps an account in the D bank, and draws a check in 
 
 favor of B for $50. B presents check but there is not enough to the 
 credit of A to pay it. B then leaves the check with bank to collect 
 when A has funds enough to pay same. A afterward has enough 
 funds to his credit to pay the check, but forbids the cashier to pay on 
 the check to B more than $40. But the cashier says he cannot receive 
 the $40 in payment of check to B. A then draws out of the bank all 
 funds to his credit, and becomes insolvent. Would or not the bank 
 be responsible to B for the amount of the check ? 
 
 A. The drawer of a check has the right so far as the bank is 
 concerned to stop the payment, and the bank is not responsible 
 for refusing to cash it after receiving such an order. 
 
 44. Is a check drawn hy a party to his own order, and so in' 
 dorsed, payable to bearer ? 
 
104 
 
 CHECKS. 
 
 A. A clieck payable to the order of the drawer is not a check 
 payable to bearer. It is negotiable and to be paid wlien ])roperIy 
 indorsed ; bnt, if the indorsement is a forgery, the drawee is not 
 Itonnd by it, and the bank may recover of the payee if it can find 
 him. The bank is bound to know the signature of the drawer, 
 but does not guaranty the indorsement, although it may purport 
 to be by the same hand. 
 
 45. A sends check to B in payment of account on December 5, 
 1878, dating same January 7, 1879, undoubtedly with the intention of 
 dating it ahead, but without any special notice in remittance. A de- 
 posits check which is forwarded at once for collection. The bank to 
 which it is forwarded fails to present same, as it supposes the check is 
 dated ahead. On January 11, 1879, B receives notice that the check 
 is protested for non-payment. Who is holden for the amount ? 
 
 A. The check was dated ahead if our correspondent has made 
 no mistake in his dates, and as due diligence appears to have 
 been used in the collection, no one is " holden " to the payee but 
 the drawer. The payee who deposited it must reimburse the 
 bank if he has drawn against it. 
 
 46. Is it any safeguard now to have printed on checks in cur- 
 rent funds ? " 
 
 A. In a promissory note likely to run for several years, the 
 words " payable in current funds " might save the drawer the 
 purchase of coin at a premium ; but in a check for whose pay- 
 ment in legal tender the drawer would not be responsible, if he 
 had the money to his credit for more than one full day beyond 
 the day on which the payee received it, the expression has no 
 practical importance. 
 
 47. A gives B common bank check but written "eight days after 
 date," etc. B presents check at the expiration of eight days, but the 
 cashier refuses payment, claiming three days grace. Would B be 
 justified in protesting check ? 
 
 A. This is regulated not by custom, but by law. By the 
 supplementary act of 1875, such a check as above described is 
 payable on the day specified without grace. If tlie bank refused 
 payment the holder may protest. 
 
 48. Is a check bearing a future date received in pa\Tnent for goods 
 sold and delivered negotiable, the same as a note, or in what way is its 
 legal status different ? 
 
CHECKS. 
 
 105 
 
 A. A check dated as drawn and payable at a future day has 
 been held by many authorities to be a bill of exchange ; but a 
 post-dated check is now recognized as a proper negotiable in- 
 strument if payable to order or bearer, and is due when the date 
 is reached if that is not a holiday ; if it is, then it is due on 
 the next secular day. Daniels on Negotiable Instruments, vol. 
 2, sec. 15T8. There is all the difference between it and a pro- 
 missory note which there is between an ordinary check and such 
 a promise. 
 
 49. We frequently receive on deposit checks drawn in the follow- 
 ing manner : National Bank, through New York clearing house, 
 
 pay to or order, dollars. 
 
 Can such a check be presented at its counter for payment ? 
 If payment be refused, can such a check be protested for non-pay- 
 ment ? 
 
 Is it right for a bank to issue such checks to its customers ? I un- 
 derstand it is the ordinary check of the bank above mentioned. 
 
 A. The check must pass through the clearing house for pay- 
 ment to comply with the terms of the order. 
 
 The drawer or indorser cannot be charged with the cost of 
 protest unless the check passes through the clearing house. 
 
 We see no special objection to this form of check if the drawer 
 and payee are content with it. 
 
 50. Suppose a check is given, and the person puts his name on 
 the back of the check and draws the money at a bank, and a day 
 or two after the check is paid the bank finds out that the persons who 
 gave the check have failed, could the bank go to the man who re- 
 ceived the money and make him return it ? 
 
 A. If the money was obtained of the bank on which the check 
 was drawn, the bank cannot come back on the payee for the 
 money in any such case. If the drawer has failed and the 
 account is overdrawn, the bank must lose it. 
 
 In case of a payment where the debtor is afterward thrown 
 into bankruptcy, the creditor who was preferred in view of such 
 failure is sometimes obliged to refund the money. 
 
 51. A debtor in the country sent me some days ago another party's 
 check (as remittance), made to my order, the debtor's name not ap- 
 pearmg upon the check, but his accompanying letter advised of its 
 inclosure, what it was for and the amount. Upon examination I found 
 
106 CHECKS. 
 
 tlie check incomplete, that is, it was not wliolly filled up, the amount 
 (say $90) was entered in figures on the end of the check, in the usual 
 place, but the word '-ninety" had not been written in, the space in- 
 tended for that was wholly blank, and as the omission was an evident 
 oversight, the figures ($90) being plainly marked, and my letter of 
 advice from the debtor stating the inclosed check was for that amount. 
 I wrote the word ninety " in the check and disposed of it as usual. 
 Now did I do wrong under the circumstances ? and should I have 
 returned the check for correction and not made it myself ? 
 
 A. There arc abundant legal decisions justifying the filling 
 up of an accidental blank in a check or promissory note, in ac- 
 cordance with the facts. This is different from altering a check. 
 If a clieck l)y mistake is drawn for fifty dollars when it should 
 be ninety, the receiver may not change it. But if no amount is 
 specified either in figures or writing, and ninety dollars was in- 
 tended, the receiver and payee may supply both the figures and 
 writing. 
 
 52. For what length of time can we lawfully hold a check, leaving 
 the maker responsible for its value ? "We have a check made this day 
 which we intend to deposit in three days, and I contend that the 
 liability for the same on the part of the drawer will cease if the check 
 is held longer than two days. 
 
 A. The liability of the drawer for a check does not cease after 
 two days, or any other short limit of time. But where the 
 drawee of a check is in the place of its issue, the receiver is 
 bound to present it for payment on the day he receives it, or the 
 next day at furthest, to hold the drawer liable for the solvency 
 of the drawee. In plain terms, if the bank on which the check 
 is drawn should fail on the day the holder receives it, or on all 
 the next day, the draw^er must make it good ; but if it is held 
 longer, and the drawer has the money on deposit ready to meet 
 it, the solvency of the Ijank is at the risk of the holder. If the 
 bank remains solvent however, the drawer is held for any reason- 
 able length of time to keep the account good, so that the check 
 can be paid whenever presented. 
 
 53. What is the liability of a giver of a check protested under the 
 following circumstances ? A gives B a check on Friday at 4 p, m. 
 On the following Monday at 10.15 o'clock the bank suspends payment. 
 B deposits his check on Saturday at 1 1 o'clock ; the suspended bank 
 pays all day Saturday. The check was made payable to the order of 
 B, not to bearer, and B's bank returns check from clearing house ou 
 Monday morning protested. 
 
CITY A UTHORITIES. 
 
 107 
 
 A. If all the parties and banks were in the same place, the 
 drawer of the check is held to make it good all day Friday and 
 Saturday. After that, if the drawer had the money to his credit, 
 it is held at the risk of the holder. In tlie case above cited the 
 holder must wait on the bank for his payment. 
 
 54. A travehng agent of ours took a check of a customer with 
 the indorsement of the latter, on which was also a former indorse- 
 ment, the check having been dated several days previous. The check 
 was sent to us and presented for payment. There were no funds, nor 
 had there been for several days. The bank advised the holding of it 
 a few days, thinking funds might be forwarded. We then wrote to 
 the parties of whom we received the check, stating the fact. At the 
 end of 30 days our agent was there again, when the parties claimed 
 they had not received our letter and would not cash the check. 
 
 A. As the check appears to have been given to the agent to 
 be remitted, if our correspondent had presented it at once, and 
 on refusal of payment notified his customer, the latter would 
 have been held on his indorsement. Tlie delay there in the hope 
 that " funds might be forwarded " deprives the writer of any legal 
 claim on the indorser, provided (and tliis is important) he could 
 have saved the money in any possible way by an earlier notice. 
 But if it can be shown that the check was not good when the 
 agent took it, we think that customer may (under legal pressure) 
 be compelled to pay his debt in something better. Suit should 
 be brought on the original debt, and if the customer plead the 
 check as payment, the reply that the check was worthless, if 
 established hj proof, will enable, we think, our correspondent to 
 recover. 
 
 CITY AUTHORITIES. 
 
 1. Can you inform me briefly what is the nature and extent of 
 the security of municipal bonds legally issued and signed by the city 
 authority ? 1 contend that th^y are a lien not only upon the corporate 
 property, such as public buildings, parks, docks, franchises, etc., but 
 also upon the real estate owned within the city limits, and that in 
 default of interest the bondholders can, if necessary, levy upon this 
 private property through legal measures, by tax or otherwise, to an 
 amount sufficient to repay them. This view is contradicted that muni- 
 cipal bonds are simply a lien upon the city property owned by the city, 
 and m no way can private property of the citizens be made to pay 
 public debts. 
 
108 
 
 CITY AUTHORITIES. 
 
 A. It is tlic theory of responsibility that all the taxable 
 property in a municipality can be compelled, to the extent of its 
 salable value, to contribute to the liability of the corporation. 
 When a judgment is entered and execution is issued, the first 
 process is to levy upon the available movables belonging to the 
 municipality. After that the proper authorities are subject to 
 fhe order of the court, which may rci^uire them to levy a tax to 
 satisfy the judgment. This remedy has not, thus far, been found 
 as perfect in practice as in theory. The officials have resigned 
 or been contumacious, or have fled, and have tried all sorts of 
 dodges and subterfuges to evade the responsibility, but the power 
 exists, and can only be evaded or resisted. 
 
 2. AVhat are the duties that devolve upon the Health Com- 
 mission and what are the rights of city residents in the following con- 
 nection : 
 
 The commission assumes the right to enter any dwelling in order to 
 determine whether the drains are in order, and so far as tenement 
 houses are concerned, exercise that right. Are they bound by law to 
 make the same examination of the better class of houses when requested 
 so to do by the owners or occupants. Most people who are able are 
 willing to incur any reasonable expense, if thereby they can be assured 
 of a healthful house, but as a rule tliey are without personal knowledge, 
 and having no confidence in the knowledge of a plumber, desire the 
 advice of a reliable expert. 
 
 A. The Health Board are distinctly authorized by law to visit 
 and make inspection of all " Ferry boats, manufactories, tene- 
 ment houses, hotels and boarding houses," as well as "Edifices 
 suspected of and charged with being unsafe," and they have 
 power to enforce such measures as may be necessary. They are 
 not charged with the duty of inspecting private houses at the 
 call of owners or occupants, however, upon a roving commission 
 to ascertain whether or no they are constructed in such a manner 
 as to be healthful. This is thought we suppose to be sufficiently 
 regulated by the requirements of the building laws. We think 
 very likely that an Inspector or expert would be sent on the in- 
 vitation of a respectable householder who had reason to suspect 
 the healthfulness of his dwelling. 
 
 3. Is the State or Federal Government responsible in damages 
 for the acts of rioters ? Did the State of New York reimburse losses 
 occasioned by the draft riots in New York? 
 
COIXS, WEIGHTS AND MEASURES. 
 
 109 
 
 A. Ncitl:ier the State nor the General Government can be 
 sued for any private purpose. The Local Government is the one 
 held responsible. In the draft riots Xew York city paid about 
 one and a half million dollars indemnity to the sufferers. 
 
 COIN, WEIGHTS AND MEASUKES. 
 
 1 , Can an American citizen living in the United States buy silver 
 bullion and coin Peruvian dollars of the same standard as the dollar of 
 that country, to be used outside of the jurisdiction of both countries, 
 without making himself Hable to criminal prosecution in the United 
 States ? 
 
 A. The manufacture of such coin in this country is forbidden 
 by section 5,461 of the Revised Statutes of the United States, 
 under penalty of a fine not to exceed $3,000, and imprisonment 
 for not more than five years. 
 
 2t "Every person who fraudulently by any act, way or means, 
 defaces, mutilates, impairs, diminishes, falsifies, scales, or hghtens the 
 gold or silver coin," Is the doing simply of any of the above things 
 to a piece of coin in one's possession and belongmg to him, a fraudulent 
 act and therefore punishable according to the provisions of the statute, 
 or does it become fraud when he attempts, after having done them or 
 any of them, to pass the com as money ? 
 
 A. An owner of coin may divert one or more pieces to other 
 uses, and for such a purpose alter or deface them at pleasure ; 
 but he has no right under the law to mutilate a coin even for a 
 temporary amusement, and leave it subject or liable to be placed 
 again in the channels of circulation. 
 
 3, Please inform me of the denominations of the weights and 
 moneys standard in China, and their proportion to American or Eng- 
 lish weights and measures ? 
 
 A. In China as to weight 16 taels equal one catty or pound, 
 which is in our standard l-i- pounds avoirdupois ; 100 catties equal 
 one picul or tam, which is 133^ pounds. In money, tsien (cash) 
 is the only native coin now current. In the terms of account 
 1,000 cash are equal to 10 mace^ or 100 candareens^ or one tael. 
 At Shanghae one tael is about 81.39 in Mexican silver dollars. 
 
 4. Will you please state the exact proportion of American and 
 French weight ? How many American pounds and fractions of a 
 pound are for instance 100 kilos, wheat ? 
 
/ 
 
 110 COLLATERALS. 
 
 The Xew York Custom House assumes 100 kilos, as 221 lbs.; but 
 this is, I understand, only approximate and for custom house pur- 
 poses. 
 
 A. The kilogramme is 2.20475 lbs. avoirdupois, and 100 kilos, 
 therefore are 220.475 lbs., instead of 221 lbs. 
 
 5. What should a ton weigh ? I purchased a ton of hay and 
 received but 2000 pounds, and claimed 2240 pounds, the party selling 
 saying he never heard of anythmg bemg sold at the latter figure as a 
 ton. 
 
 A. The custom of retailing hay is 2,000 pounds to the ton, 
 and in this State (N. Y.) this is a legal ton. 
 
 COLLATERALS. 
 
 (See also Loans.) 
 
 1 , I held two notes drawn by a party who has made an assignment. 
 The first note is secured by collaterals so depreciated they will not pay 
 the face of note ; the second note is secured by collaterals which will 
 ovei-pay Now, it is asserted that the collaterals on the second note 
 having been put up for a specific purpose cannot be held for the loss 
 on the first note, and are liable to attachment by assignee. In other 
 words that I cannot bunch my collaterals. 
 
 A. The United States District Court for the Eastern Division 
 of Virginia, In re Peebles^ <fec., 13 B. R., 149, remarked : " The 
 Roman law gave a lien upon the chattels pledged for one debt, 
 for the satisfaction of all the debts held by the pledgee against 
 the pledgor. But the rule of the common law of England and 
 of this country is different." Again • " There is no lien at com- 
 mon law which gives the holder of pledged personal property a 
 lien upon it, beyond the especial object for which it was pledged," 
 except there is an express or implied contract, from the usage of 
 trade the manner of dealing between the parties, <fec. It is 
 also said, on the authority of Hepburn v. Snyder, 3 Barr., 72, 
 that liens are not favored in Pennsylvania. Our opinion, accord- 
 ingly, is that no lien would be allowed except in accordance with 
 the contract, express or implied, under w^hich the collaterals were 
 pledged. 
 
 2. A borrows from B, giving as collateral security certain warrants 
 or bonds. He afterwards gives C a written transfer to a part of those 
 warrants subject to B's lien. C presents same to B, asking him to 
 accept same. He refuses. A afterward makes payment to B of 
 
COLLATERALS, 
 
 111 
 
 amount borrowed and demands his collaterals, which B delivers. Is 
 B in any way responsible to C for his claim against A ? 
 
 A. A pledgor may subsequently assign his property in the 
 thing pledged, and the assignee will then have the same rights 
 as the pledgor. If this assignment from A to C was legally 
 made, and B had notice of it, he may have rendered himself lia 
 ble to C by delivering to A the property thus assigned, the latter 
 having divested himself of the title. 
 
 3. A loans money to B and receives as security stock collaterals 
 with a margin of 25 per cent. If B fails can A keep the collaterals 
 or can the creditors claim them ? 
 
 A. The creditors can pay off the loan to A, and thus recover 
 the collaterals for the use of B's estate. 
 
 4. If A borrows money of B, depositing with him United States 
 Bonds as collateral, and said bonds are stolen or destroyed while in the 
 custody of B, as the law now stands, the loss, I believe falls on A, 
 unless want of due diligence can be proved against B. Suppose now 
 that instead of the above B borrows United States bonds of A, depos- 
 iting with him a collateral in money, the equivalent of the bonds at 
 market value, if the bonds are lost as before, upon whom does the loss 
 fall? 
 
 A. The only difference in the two cases consists in the 
 amount of care required of B, as bailee. In the first instance 
 specified he is " bound only to ordinary care, and is liable only 
 for ordinary neglect." (Parsons on Contracts, Vol. 1, 109.) In 
 the second, according to the same authority, he is " bound to 
 great care, and liable for slight negligence" (ib. 108). The 
 omission of the most exact and scrupulous caution in this case 
 is regarded by the law as a culpable neglect (Scranton v. Baxter 
 4 Sandf, 5). But without fault on the part of the hirer of chattels, 
 in the absence of an agreement, he is not bound to make good 
 their loss (Hyland v. Paul, 33 Barb., 241). 
 
 If however, the object of putting the transaction in the form 
 stated is merely to increase the bailee's liability for negligence, 
 and A is the real borrower, the better w^ay would be for the 
 parties to come to an agreement with reference to their respective 
 liabilities. In case of a loss, and a suit, the courts would be apt 
 to inquire into the real nature of the bargain, and apply the ap- 
 propriate rule, without reference to the disguised, if such it is. 
 
112 
 
 COLLATEMALS. 
 
 5. Does a right exist to sell several lots of merchandise held as col- 
 lateral security for notes overdue and margin not deemed sufficient ? 
 Can the holder sell as he tliinks best, when or how, without consulta- 
 tion with the owner of the goods, and then look to him for any balance ? 
 Does the law prescribe any mode or form or in any way give owners a 
 right over them, or protection ? 
 
 A. The banks here use a form of note or contract which 
 authorizes prompt conversion by the bailee on default of the bor- 
 rower, but even with this there is danger, in our judgment, of 
 expensive litigation if the collaterals are hastily sacrificed. The 
 usual method is to give notice to the borrower, and then if the 
 collaterals arc not redeemed to sell at public sale, where this is 
 practicable. With pledges of merchandise without a contract as 
 to conversion, the only absolutely safe plan is to sue, recover 
 judgment, and take the collaterals on execution. 
 
 6. Has there ever been a judicial decision in this State as to the 
 responsibility of the holders of securities lodged as collateral security 
 in case said collaterals have been stolen ? When every proper precau- 
 tion has been taken are the holders of the collateral liable, and is the 
 drawer of the note freed from any obligation to pay. in the event of 
 the loss by theft of the securities ? 
 
 A. It is a well settled principle of law that the custodian of 
 collaterals is only l)ound to use " due diligence" in the care of 
 them, and if this is not impeached the obligation of the borrower 
 can be collected, although the securities are lost. Exactly what 
 is due diligence must be settled in each case by an uncertain re- 
 ference to the decision of a jury. In the suits growing out of 
 the Ocean Bank robbery the owners of the missing property con- 
 tended that the deposit of such valuables in a vault floored with 
 thin flagstones was not due diligence in the care of them, but 
 there was no dispute as to the position that if proper care had 
 been shown the loss must fall upon the owners and not upon the 
 bank. 
 
 7. A banker discounts for the mutual benefit of maker and indor- 
 ser, the note A B, indorsed by C, holding as collateral stocks belonging 
 to A B, the maker, in excess of the amount of the note. Can the 
 banker hold the excess for the payment of other indebtedness to him 
 of the maker and indorser, as against the attachments of their other 
 creditors ? Please give the authorities ? 
 
 A. We know^ of no American decision in which the question 
 
COLLATERALS. 113 
 
 above presented was directly decided either way. Morse says it 
 has been ckiimed that the banker's lien extends not alone to the 
 general deposit of the customer, ljut to any business paper, as 
 notes or bills, belonging to him, and which he has intrusted to 
 the bank for collection, " but in this broad form the statement 
 is hardly correct." (Morse on Banking, 34.) He also remarks 
 that there have been few decisions in America as to what pro})- 
 erty in the possession of the bank the lien will attach to. It Avas 
 considered a question of some difficulty by the United States Dis- 
 trict Court for the Northern District of Illinois, in re Farnsworth, 
 Brown &, Co., 5 Bliss, 223, whether the bank had a lien for its 
 balance as against the creditors in bankruptcy, on drafts of its 
 customer held for collection. The lien was in fact allowed, 
 though for reasons which would not apply to the case of pledged 
 securities. The Court argued that " it was evidently never in- 
 tended that the bank should pay over to the firm the specific 
 money collected," and left the inference that if such had been 
 the fact the lien would have been denied, and this would also 
 have been denied in the case presented by our correspondent. 
 Morse thinks the English cases would doubtless be regarded as 
 sufficient precedents to lead the decisions on similar points in 
 this country, and the summary statement of the following makes 
 strongly against the existence of a lien in such a case as that of 
 our correspondent : In re Medewe, 27 Beav., 528 ; Yanderzee v. 
 Willis, 3 Brown C.C., 21 ; Zuick v. Walker, 2 W. BL. 1154. 
 
 8. A party wished to get a certain sum from a bank and offered 
 to give as collateral security a certain number of shares of bank stock. 
 The bank is willing to make the loan, but requires the party wishing 
 to make the loan to have the stock absolutely transferred to it, and 
 bring them the certificate of stock made in the name of the bank mak- 
 mg the loan. The borrower contends that the indorsement of the cer- 
 tificate in blank in presence of a witness, and the statement on the face 
 
 of his note that he leaves number of shares of Bank as security 
 
 for this note, amply protects tlie bank as far as the certificate goes, and 
 give the bank perfect right to sell the same if his note is not i)aid at 
 maturity, and apply the proceeds to the payment of his note. Is the 
 position taken by the bank necessary in law to protect its interest, and 
 does not the position taken by the borrower amply protect the bank a* 
 far as the certificate of stock is concerned ? 
 
 A. It is not customary to transfer the stock, the security 
 
114 COLLECTION, 
 
 being considered sufficient, if the stock is good wlien the transfer 
 on the certihcate is signed in blank. We presume the bank 
 lending tlie money has an idea that the l)ank whose stock is rep- 
 resented can place a lien on its shares for a debt due to it from 
 its stockholder. 
 
 9. A loans B money, on call. B being unable to respond to call, 
 at the moment, at A's request gives A mortgage for the amount, on 
 his (B's) property as security, with the understanding that A is not to 
 record mortgage, unless B should become embarrassed. 
 
 Suppose B becomes embarrassed and fails, would this mortgage be 
 legally vahd, if not recorded until day of, or day after failure ? 
 
 A. The word " property" is vague. If it means chattels," 
 it is not a valid lien as against the creditors of the mortgagor 
 without record. But if it is real estate, it would be valid without 
 record, unless a subsequent mortgage or conveyance made in 
 good faith was recorded before it. 
 
 10. A loans B 8100,000, taking United States bonds as security. 
 He deposits the bonds in a safe in the Stock Exchange vault, or the 
 Safe Deposit Company. These vaults are supposed to be the most 
 secure places of the kind. A fire oc^rs destroying said vault and 
 securities. Can A compel the return of the loan ? In other words, 
 upon whom does the loss fall ? 
 
 A. If without A's fault the securities are missing, he can re- 
 cover his loan of B, and the loss of the bonds will fall upon the 
 latter. 
 
 COLLECTION. 
 
 le A customer of ours, residing m some country place near this 
 city, sent us a check as payment for a debt, drawn on a banker's 
 firm in his place. This check we deposited with our bank the same 
 day we received it. About 1 2 days afterwards we received notice of 
 protest. Our bank having no connection in this country place, sent 
 this check to the very banker it was drawn upon for collection, and 
 this banker returns for it his check drawn on a New York city bank, 
 and this check is not paid by the latter and therefore protested. Who 
 is the loser, our bank, our customer, or we ? 
 
 A. We think the bank is responsible, and must account for 
 the proceeds to the depositor, as it took the last-named check in 
 payment at its own risk. 
 
 2. A note is made payable at Macon, Georgia, with interest from 
 date and exchange on New York. Has the bank whxch takes ij tor 
 
COLLECTION. 
 
 115 
 
 collection a right, and is it customary to deduct collection charges from 
 the amount of the note with interest ? 
 
 A. A bank or any other collecting agent certainly has the 
 right to make a reasonable charge for collecting ; and at many 
 points in the South, and also at the West, it is customary to do 
 this, especially where the correspondent has no claim on the 
 agent for such a service. 
 
 3. In the regular course of business with our bank we deposited 
 with them for collection a note for $2,000, due in Chicago on the 13th 
 instant, which was paid on that day to the bank's correspondent. The 
 latter failed to remit for this collection, and suspended five days after 
 receipt of the money. Is our bank responsible to us for any loss we 
 may sustain ? 
 
 A. We hold that the bank here is responsible. We do not 
 believe any first-class bank in this city will deny such responsi- 
 bility. If they do, they may as well shut up shop, or at any rate 
 abandon the collection business to outside agencies, and give up 
 all the custom that is drawn to them through such an agency. 
 W^e know all that may be said concerning the hardship of being 
 held responsible for an agent who is chosen "with due dili- 
 gence" and who collects a note, and, putting the money in his 
 pocket, fails to remit ; but in our judgment the hardship would 
 be still greater on the other side if it was a sufficient answer to 
 the depositor who inquired if a note had been paid, " yes, our 
 agent collected the money, but he has spent it, and you therefore 
 have lost it!" We believe that a refusal on the part of any 
 bank to recognize its responsibility in such a case is both illegal 
 and impolitic. We hold that the bank can be compelled to pay 
 the money, even though its agent does not remit it ; and that a 
 refusal to make prompt settlement will injure it more than the 
 loss of the money. 
 
 4. If a party living in the interior sends us a draft on a party here 
 at one day's sight, with bill of lading attached for 100 bales of cotton, 
 and on acceptance of that draft we give up the bill of lading, and 
 party accepting draft fails to pay it at maturity, can party from in- 
 terior hold us for amount of draft, we charging no commission for col- 
 lecting ? If we act as brokers or bankers, and charge a commission 
 for collecting, can they hold us for amount thereof ? In either case, 
 whether as bankers or brokers, or not, we have no instructions from 
 party in interior. 
 
 1 
 
116 
 
 COLLECTION. 
 
 A. The question is one of fact as to due diligence, to ])c de- 
 termined in each case hy tlie circumstances thereof. Two or 
 three years ago a flour dealer in Richmond sold to a customer in 
 P]iUadel))hia several bills of " sliorts/' drawing at siglit there- 
 for, — and pinning the bill of lading to the draft, deposited the 
 papers in his own bank, the draft usually going to his credit, and 
 the Richmond bank forwarding the same to Pliiladelphia for col- 
 lection. The Philadelphia bank then collected the draft and 
 gave the bill of lading to the drawer. After several such trans- 
 actions the buyer Avrote to the seller, requesting him to draw at 
 one day's siglit, as the draft came so mucli in advance of the 
 property. This was done upon the next shi])ment, the papers 
 being sent in the same way without instructions. Tlie Philadel- 
 phia bank, upon the acceptance of the draft by the drawer, de- 
 livered him the bill of lading. Once in possession of the prop- 
 erty, he immediately converted to his own use and allowed the 
 draft to go unpaid. The case Avas submitted to us, and we 
 decided that the Philadel})hia bank had no right, under the cir- 
 cumstances, even without instructions, to separate the bill of 
 lading from the draft, and must therefore bear the loss. Tliat 
 bank did not acquiesce in this view at first, and tlie Riclnnond 
 bank, which had paid the drawer the money, charged it l)ack to 
 his account. Subsequently the Philadelphia bank reconsidered 
 its decision and voluntarily paid the amount of the draft, charg- 
 ing it to profit and loss. 
 
 In all cases, unless the collecting bank has some reason to 
 infer that a separation of tlie two papers is desired or authorized 
 by the drawer or his immediate agent, it should insist on pay- 
 ment or security before delivering the title to the property repre- 
 sented by the bill of lading. In our judgment the collector, 
 without instructions expressed or implied, surrenders the bill of 
 lading at his risk and peril, and if the draft is not paid is bound 
 to make it good. 
 
 5. You take the position that the collecting bank is liable if bill of 
 lading is surrendei-ed before payment of the draft, or rather its 
 maturity, and a default on the same. Do you mean that this liability 
 will attach, when the bill of lading does not consign merchandise to 
 
 order," but simply to the drawee or consignee, who under such bill 
 
COLLECTION. 
 
 IIT 
 
 of lading could get his goods at any time without producing bill of 
 lading ? 
 
 A. The conditions cited will make no difference in the liabil- 
 ity. We have never decided that every bank is liable Avho sur- 
 renders a bill of lading which has been attached to a draft 
 forwarded to him for collection. Sometimes special instructions 
 go with the papers ordering a surrender of the bill of lading 
 upon the acceptance of the draft. Sometimes this direction is 
 to be inferred from previous instructions, from established custom 
 between the parties, or from the circumstances of the case. All 
 that we have said is this : A bank officer or otlier collecting 
 agent who receives a draft to which a bill of lading has been 
 attached as an apparent security, has no right to surrender it 
 (having no instructions to this effect expressed or implied) until 
 the said draft is paid or secured to his satisfaction, and is there- 
 fore liable in such a case if the title to the property has, been 
 given up, and the draft is not paid. 
 
 The assumption by our correspondent that the consignee 
 named in a bill of lading may obtain possession of the property 
 without it, and therefore that the possession of that document is 
 of no importance, is based on the practice of some carriers which 
 is looser than the one against which our first caution is directed. 
 It is true, as we explained in a previous discussion, that the shii> 
 per, to have a perfect lien on the property in transit, must take 
 the bill of lading to his own order, but if he does not, and he re- 
 tains the bill of lading, he may stop the goods at any time in 
 transit, since the consignee cannot compel delivery to himself, 
 nor give title to any third party to receive it, without the posses- 
 sion of the document. It is the loose practice of many carriers 
 to deliver the property to the consignee without asking for the 
 surrender of the bill of lading. But suppose that the consignee 
 has previously received this bill and indorsed it over to a third 
 party, who has made an advance on it, and the carrier delivers 
 the property to the consignee without the surrender of the bill of 
 lading ? Does not our correspondent see that the holder of that 
 bill of lading thus assigned to him could recover the property, or 
 its value, from the carrier ? The promise in the bill is to deliver 
 to the consignee or his assigns ; for this })urpose he has issued so 
 
118 
 
 COLLKCrrON. 
 
 maii}^ copies of this bill, one being })re8ente(l, tlie others to stand 
 void. Until one of tliese has been presented, the carrier is liable 
 to an innocent party to whom the bill may be assigned, and who 
 may advance on the strength of tlie promise. 
 
 Thus, where goods are shipped to the order of the shipper, the 
 control of the property is wholly in his hands and goes with the 
 draft to which the bill is attached. Where the goods are shipped 
 to the order of a consignee at the place of delivery, and the bill 
 is sent with the draft, the property should still l)e held by the 
 carrier until the said bill is surrendered, or he may l)e liable for 
 its entire value. 
 
 6. A. a merchant in Richmond, through his home bank draws a 
 sight draft on B, a merchant in Petersburg. The original bank with 
 which the draft was deposited, after waiting the usual time to hear 
 from the Petersburg bank, but from which it has not heard, permits A 
 to check against his draft. It turns out that B is insolvent, and the 
 draft is returned protested. Now the question is, would the home 
 bank have recourse against A, to whom it had advanced the money, or 
 against the bank to which it sent the draft for collection ? 
 
 A. If there was no want of due diligence on the part of the 
 banks which attempted to collect the draft, A must refund the 
 money and that is the end of it. If there was culpa])le negli- 
 gence, A can recover all he has lost through such fault of the 
 bank in which he made his deposit, and that can recover of the 
 other bank which committed the fault. There is nothing in the 
 statement made which necessarily involves either bank in such 
 liability. 
 
 7, Is a bank, acting as agent in receiving collections, if unable to 
 collect the full amount of the claim, required to accept any portion of 
 the same that may be tendered, or, in receiving drafts fur acceptance, 
 is the bank or its notary, in presentment of the same, if unable to ob- 
 tain an absolute or unconditional acceptance of the draft, reipiired to 
 take an acceptance on the best terms that can be procured, though it 
 may not be for the full amount of the claim, or it may slightly differ 
 from the conditions of the draft, or the signature vary slightly from 
 the address of the drawee upon the bill ? 
 
 A. A bank us collecting agent may accept of partial ])aymciit 
 without risk, but it is not required to do this ; nor is it required 
 to talie an acceptance on a draft if tendered for part of the 
 amount, although it may and protest for the balance if it deems 
 such a course for the intei-est of its principal. 
 
COLLECTION. 
 
 119 
 
 8. We deposited at our bank here for collection a sight draft on a 
 country correspondent. It was sent to the bank in the country where 
 our correspondent kept his account and was only returned to us after 
 90 days by the country bank, unpaid, no notice to that effect having 
 been received by us or our bank in all the interim. Should not the 
 country bank pay ? 
 
 A. The country bank does not appear to have used due dili- 
 gence in the collection, but it does not follow that it is liable for 
 such neglect to pay the draft out of its own coffers. It seems to 
 us that the bank in which it was first deposited ought to have 
 taken some steps, inside of three months, to ascertain what had 
 become of that draft. 
 
 9. A receives B's check on the Orange National Bank for $100, 
 and deposits same in Central National Bank of New York as a deposit. 
 The Central National Bank sends the check through their agents, the 
 First National Bank of Newark, which collects the money but fails 
 before paying Central National Bank. Does the Central Bank or A 
 lose the $100 ? 
 
 A. In a leading editorial we noticed the new departure by our 
 Court of Appeals on this very question. In Ed. Indig. v. 
 National City Bank of Brooklyn, the highest Court in this State, 
 by the casting vote of the presiding judge, held that the collecting 
 bank in such a case, if it has used due diligence in the collection, 
 is not liable to the depositor if through the failure of the out- 
 of-town collecting agent the money is lost. 
 
 10. I beg to call your attention to the inclosed decision of Judge 
 Dillon of the United States Circuit Court, and invite your comments 
 thereon. The case is one of considerable interest, and indeed of im- 
 portance, in the principles involved, and the conclusions reached will, 
 I think, be a surprise to most bankers. 
 
 A. The case inclosed is that of the German American Bank 
 of Gustav Levi & Co., Quincy, 111., v. National Bank of the State 
 of Missouri, and the receiver thereof ; and the facts, briefly 
 stated, are that the plaintiff sent a bill of exchange to the de- 
 fendant bank " for collection and credit ;" that the defendant 
 received ])ayment in a check, which it had certified, and then 
 credited the amount to plaintiff. The collecting bank then sus- 
 pended, and after suspension collected the funds on the certified 
 check, wlii?i thereupon went into the receiver's hands. The 
 
120 
 
 COLLECTION. 
 
 plaintiffs claimed that they were entitled to these specific moneys, 
 and were not relegated to the position of general creditors of the 
 suspended bank, and the decision of the court sustains their 
 claim. Judge Dillon, in reaching this conclusion, makes two 
 })riiicipal points, viz. : first, that the receipt of a check, no matter 
 though certified, was not payment^ and therefore that the draft 
 was not in fact collected until after the suspension of the bank ; 
 and second that the money thus received was received in trust 
 for the plaintiff's bank. In a legal point of view there is nothing 
 new or startling in these positions, and we consider them sound. 
 The defendants urged that their act in crediting the plaintiffs 
 with the amount of the bill, upon receiving a certified check for 
 it, was, so far as the latter were concerned, a complete perfor- 
 mance of their agency, and that they then became general con- 
 tract creditors for the sum credited; but Judge Dillon dismissed 
 this contention by saying that the credit was provisional merely, 
 and denied that the defendant bank could thus change the nature 
 of its obligations. We think that the general principles governing 
 the relations of principal and agent support the J udge's conclu- 
 sions on this head. 
 
 11. A dealer lodged a note for collection in a New York City 
 bank, payable in a town near Boston. Several days after maturity, 
 and no protest received, the New York bank credits the note, less ex- 
 penses, in the dealer's pass-book, who then pays his Western corres- 
 pondent's draft for the net credit. The bank having subsequently re- 
 ceived a protest of the note from its Boston bank correspondent, 
 charges back the note to the dealer. The Western man cannot or will 
 not respond. On whom should the loss- fall ? 
 
 A. If the collecting agent used due diligence in protesting 
 
 and mailing the notices, the loss follows back as far as it can 
 
 go toward the man who has the money. If he will not return 
 
 it, then the man who sent it to him, and to whose account it has 
 
 been charged at bank, must lose it. 
 
 12. Some two years since we sent a draft to a banker in this State 
 for collection. He collected money on it which he has never paid over 
 to us, since which he has made an assignment. Cannot we commence 
 suit against him criminally, and shut him up for ric;t paymg the funds 
 over to us ? 
 
 A. It has been decided that the failure of a banker to pay 
 
COLLECTION, 
 
 121 
 
 over to the owners the proceeds of collections made by him Ls 
 not a breach of trust for which he is liable to a criminal prosecu- 
 tion. 
 
 13. As the treasurer of a society, and having bills to collect against 
 the members, I hand a number of such bills against members In arrean 
 to a collector, and agree upon a percentage for collecting. He calls 
 upon all of the delinquents. Some of the bills are paid to him and 
 others handed to me. Is the collector entitled legally to his commissions 
 on the amounts handed to me personally by the delinquent members, 
 and would your decision as regards this State hold good in New 
 Jersey ? 
 
 A. The case stated has not been adjudicated either in New York 
 or New Jersey, so far as we know. But " the general rule of law 
 as to commissions undoubtedly is that the whole service or duty 
 must be performed before the riglit to any commission attached." 
 (Story on Agency, 329.) This rule is modified by the prevailing 
 customs recognized in different trades. Where the agreement 
 does not distinctly specify how the commission is to be earned, 
 however, it would be left to a jury to say what compensation was 
 reasonable ; and if it appeared that the payments Avere made 
 direct to the principal in consequence of the agent's proceedings, 
 no doubt an equitable allowance would be made. 
 
 14. We sent for collection a sight draft for $121.85, on one of our 
 customers in Dallas, Texas, through the first national bank there. The 
 draft was paid, and the bank sent us a draft on a New York bank, 
 which, upon presentation, told us that it was not good, inasmuch as the 
 Dallas bank had failed. A receiver was appointed who offers through 
 his lawyer 25 cents on the dollar. Are we not entitled to the full pay- 
 ment of our claim ? 
 
 A. Our correspondents are entitled to full payment from all 
 their debtors, but this is not different from other debts, and we 
 suppose they Avill be compelled to take what they can get, unless 
 they can show a special contract with the collecting bank, by 
 which the proceeds of the draft were not to become its property, 
 according to the general rule. 
 
 15. We sent to a bank in another city a sight draft on a customer, 
 with the request to ' collect and remit proceeds." The customer paid 
 the draft and the cashier of the bank sent us his draft on a bank in 
 ohis city. This we deposited on the day it was received, and the next 
 viay It was returned to us as not good. We afterward learned that the 
 
122 
 
 COLLECriOX. 
 
 bank to wticii we sent our draft for collection was, at the time it 
 was received, under examination by the Bank Superintendent. On 
 the day we received the cashier's draft, an injunction was served on 
 the officers restraining them from any interference with the funds of 
 the bank. We are also informed that there were no funds m the New 
 York bank at the time the cashier sent us his draft. The bank whose 
 draft we hold is now in the hands of a receiver. Do we stand in any 
 different position from other creditors ? Was not the bank acting as 
 an agent simply to collect, and was it not its duty to "remit proceeds" 
 as we directed, instead of taking a worthless draft ? Is not our claim 
 entitled to preference over the claims of depositors and others ? 
 
 A. As the bank suspended after the receipt of the money, 
 our correspondent's claim is entitled to no precedence, and he 
 must take his chances with other creditors. 
 
 16. If a country liank to which we send collections fails with the 
 proceeds of our draft in its possession, must we appear as a creditor of 
 the bank ? Or if the bank remits the proceeds and fails while the re- 
 mittance is m transit, what is our position in the case " 
 
 A. A person who sends paper to a country bank for collection 
 becomes a creditor of that bank if it fails before his remittance 
 is forwarded. If it fails while the remittance is on the way, and 
 the latter proves to be good, he is lucky enougli to escape ; but 
 if the remittance is a draft not lionored on its arrival his posi- 
 tion is unchanged. 
 
 17. I get this from a distant correspondent: 
 
 Dear Sir : I inclose for acceptance and collection draft, 15 days sight, on 
 Jno. Smith & Co., $100 ; no protest. 
 
 It is duly accepted by John Smith & Co. It falls due to-day, and 
 if not paid shall I protest it for non-payment ? 
 
 A. The instructions " Xo protest" apply fairly to the non- 
 acceptance or non-payment of the draft, since the words fallow 
 the " acceptance and collection" for which the draft was enclosed. 
 The collecting bank therefore ought not to protest in case of non- 
 payment. 
 
 18. Banks are sending papers for collection with indorsements 
 stamped instead of written. Can drawee demand a written indorse- 
 ment ? And can I protest on his refusal to pay without it ? 
 
 A. xUl our correspondent has to do i.s to present the draft or 
 note as it was received, (with his own indorsement if to his 
 order,) and demand payment. If the drawee or payee declines 
 
COLLECTION. 
 
 123 
 
 to pay, then the collecting agent may protest it. The regularity 
 and sufficiency of the indorsement are guaranteed by the collec- 
 tion ; if protested the question whether the indorsement was suffi 
 cient is one between the original drawer or owner of the paper 
 and the payee who refused to make payment. Any method of 
 making a signature which the maker utters is a good signature, 
 and binds him if it can be proved that he made it. The only o\> 
 jection to a printed or stamped signature, lies in the increased 
 difficulty in proving that it is genuine ; that is, that it was actu- 
 ally affixed by authority of the person or institution it represents. 
 
 19. John White, of New York, draws a sight draft on William 
 Jones, Augusta, Ga , for $1,000, "with cost of collection." The bank 
 to which it is sent collects " free of charges." Can the bank legally de- 
 mand of the payee the difference of exchange between Augusta and 
 New York, the rate being ^ of 1 per cent, per annum ? 
 
 A. The collector in Augusta may protest the draft if Jones 
 will not pay the difference of exchange between the two points, 
 or whatever may be reckoned as reasonable " costs of collection." 
 
 20. Our correspondent in the country receives notes payable at a 
 bank m a town twelve miles distant from our correspondent. We 
 learn that the bank in the latter place (the only one there) has failed 
 or suspended. Before the bank failed he had been in the habit of 
 sending these notes by mail to the bank which has now failed. What 
 is the duty of our correspondent with respect to presenting and protest- 
 ing notes maturing in the next few days at the failed bank ? 
 
 A. He must employ some one to present the notes for pay- 
 ment at the institution, and if he can learn that any other pro- 
 vision has been made to protect the paper, he must use due dili- 
 gence to present also at the new location before protestmg for 
 non-payment. 
 
 21. If a party sends us his own one day sight draft on another 
 party, without any instructions as to protest, the same being accepted, 
 and if not paid when due, would we be liable if we did not protest ? 
 
 A. The failure on tlie part of an agent to ])rotest a draft in- 
 trusted to him for collection, in the absence of any instructions 
 to this effect, expressed or implied, will render him liable, not 
 for the face of the document, but for whatever damages may 
 result to the principal from such mistake. In the case cited we 
 
124 
 
 COLLKrrWX. 
 
 cannot see what possible daniaiie can have resulted from the 
 omission to protest, and therefore the agent cannot have com- 
 promised himself very seriously by his course. The damage 
 must be established by proof before it can be collected. 
 
 22. In receiving for collection commercial paper liable to protest 
 for non-payment on parties living at places not having banking 
 facilities, it is my rule in acknowledging receipt to notify the bank, or 
 the party sending, that for reasons stated we will not hold ourselves 
 liable for non protest m case of non payment. Now I ask your 
 opinion : Will this notification of mine hold good and protect me from 
 liability ? 
 
 A. It has been assumed in judicial opinions and by text 
 writers (Ayrault v. Pacific Bank, 47 N. Y., 573 ; Daniel on 
 Negotiable Instruments, 1,255), that a bank or other collecting 
 agent may make a special contract varying the obligations which 
 would be imposed by the mere act of undertaking the collection 
 of paper. But the duty of taking all the necessary steps to insure 
 collection is so strict that something more than mere notice 
 would appear to be necessary to vary the implied contract. If, 
 for example, such a notice should be sent, and without waiting 
 sufficient time for a reply, the bank should forward the note for 
 collection, and thereupon the amount should be lost for want of 
 due protest, we doubt very much if the notice would save the col- 
 lecting agent harmless. If on the other hand time was given in 
 which the principal might have expressed his dissent, and he 
 remained silent, it would not be in accordance with the modern 
 drift of adjudications to say that a new contract would not thus 
 be created. 
 
 23. A sends drafts for collection to a bank in the country ; B, on 
 whom they are drawn, accepts the same ; before they are due the 
 bank fails. Who is responsible for the amount ? 
 
 A. A can stop payment to the bank if it becomes insolvent 
 before the drafts become due. If the bank receives payment 
 after failure, A can recover it as money belonging to him and 
 not to the bank's account. 
 
 24. We received some time ago from our bankers' a draft on a 
 estern city for collection, collected the same and remitted the net 
 
 proceeds once by a bill of exchange bought of the same bankmg 
 
COLLECTION. 
 
 125 
 
 house where we had been in the habit of buying our exchange for 
 years, and also two bills after the one in which the above mentioned 
 amount was included. The banking house here failed and the very 
 bill of exchange was dishonored, as well as those bought afterward. 
 We charged no commission for collecting, and simply did it out of 
 courtesy. Are we to stand the loss or will our friends have to bear it ? 
 
 A. If the house sent over here a draft to collect, with instruc- 
 tions to the agents here expressed or fairly implied to collect it, 
 and with the proceeds to purchase a bill of exchange and remit 
 the same, and the agents executed the order with due care and 
 diligence, purchasing a reputable banker's bill, and forwarding 
 the same without indorsement, they are not responsible. But if 
 the agents had no orders, or if they indorsed the bill in their own 
 name, they may be legally held for its payment. 
 
 25. A correspondent in a neighboring city sends a note for col- 
 lection to the bank where it is made payable. When it falls due, the 
 maker has no funds in bank, and the note is sent to his place of busi- 
 ness to be collected. In the meantime the letter and check are pre- 
 pared and laid aside to await payment of the note. The note is not 
 paid, but the letter with the check is mailed by mistake to the owner, 
 A night telegram is sent apprising him of the error, and asking the 
 return of the check, which he dechnes. 
 
 A. The return of the check, thus sent by mistake, is called 
 for by a due regard for one's own honor, to say nothing of the 
 claims of morality ; and it may be legally enforced, beyond any 
 question. The receiver of money paid by mistake has no legal 
 title to it, and no moral right to retain it. 
 
 26. Where it is customary for a bank to credit a customer with 
 his country drafts without charge, and such drafts sent to its corres- 
 pondent in the town where they are payable, who collects the same 
 and suspends without remitting, can the bank hold its customer for the 
 amount ? 
 
 A. The bank in which the drafts are deposited is liable to its 
 customer, unless it has a contract with him that the collections 
 are to be made at his risk. 
 
 27. A had been treasurer of a school district and B is appointed 
 in his place. The trustees of the district thereupon gave B an order 
 on A for the money in his hands. On the 28th day of November A 
 gave B a check on a Xew York bank for the amount, which I de- 
 posited in a bank here the same day, and was credited with the money. 
 In a day or two A demands his bond from the trustees, and is refused 
 
126 
 
 CO.VMER CIA L TERMS. 
 
 until B can assure them that the check had been paid. B calls several 
 times at the bank for a week or more, and is told that, not having 
 heard from the check, they presume it had been paid, when B notifies 
 the trustees that he believed the check had been paid and that they 
 can give .1 his bond, which is done. Nothing is heard from the check 
 by B until the 1 6th day of January following, when he is notified by the 
 bank here that it had been lost in the mail and rc^qiiesting him to 
 procure a duplicate from A. B calls on A the following day, who 
 agrees to give him a duplicate, but makes an assignment the same day 
 without doing so. The check was good at the bank in New York for 
 several days after its date. Please answer on whom the loss will fall ? 
 
 A. In our judgment the loss will fall on the bank with whom 
 B deposited it for collection. It was not due diligence on their 
 part to discover the loss of such a check more than six wxeks 
 after it should have been paid. 
 
 28. If a paper sent to a bank for collection has the words "no 
 protest" written in ink on the face of the draft, and is protested, can 
 the notary protesting claim his fees ? 
 
 A. The notary cannot in this case collect any fees of the 
 owner of the draft. 
 
 COMMERCIAL TERMS. 
 
 1, A charterer of a vessel agrees to deliver cargo alongside ; wili 
 you please inform me how this applies ? If it does not mean within 
 "reach of vessel's tackles," and if so, what that term is ? How many 
 feet from the vessel, and where we can find the authority ? Again, is 
 it allowable in delivering alongside to do so from the hold of a hghter, 
 or must all cargo be on deck of lighter ? 
 
 A. A delivery of cargo to a ship is governed very much by 
 established usage at each port. To be " within reach of ship's 
 tackles " it must be so near that the actual gearing of the ship 
 for handling cargo may reach and be attached to it. If a lighter 
 has a covered deck the " hold " would not be a proper place from 
 which to tender cargo to a ship unless there was a well-established 
 usage at some port to this effect. 
 
 2. When a cargo is damaged oy accident to the vessel or steamer, 
 are the insured, as well as the uninsured consignees, required to sign 
 an " average bond " before the goods saved are surrendered to the 
 respective consignees ? 
 
 What is the full meaning and purport of an average bond " ? 
 
 A The contributions of cargo under general average are con- 
 
COMMERCIAL TERMS. 
 
 127 
 
 fined to cases where it has been deemed necessary to sacrifice or 
 damage part of the cargo or part of the sliip to save the rest, all 
 of the ship and cargo saved contributing pro rata of its value to 
 such a loss. If goods are thrown overboard to keep the vessel 
 from sinking, the ship and remaining cargo alike contribute in 
 proportion to pay for the sacrifice, and in the same Avay, if part 
 of the ship or outfit be cut away or sacrificed in a storm or time 
 of danger, for the common safety, all that is thus benefited con- 
 tributes to pay for the sacrifice. When goods are delivered 
 under the average bond, the owner takes his goods and simply 
 binds himself and bondsman to contribute his share of the 
 assessment. 
 
 3, If I sell pig lead on a contract reading " one hundred tons or 
 ten car loads," how much am I called on to deliver ? In other words, 
 what is the term car load supposed to mean, and what constitutes a 
 ton according to the law of this State ? 
 
 A. A legal ton is 2,000 pounds in this State (X. Y.) ; but a 
 contract is to be interpreted according to the sense in which the 
 universal custom of the trade w^ould accept the meaning of the 
 terms. The difficulty of this agreement is that its ambiguity is 
 not confined to the meaning of the word ton, but to the indefinite 
 alternative. A car load may be 20,000 to 23,000 pounds. In 
 our judgment the seller could only be compelled to deliver 
 200,000 pounds if that w^as all the ten cars contained; and h<J 
 could legally tender to the buyer the entire contents of the ten 
 cars, even though they should amount to 230,000 pounds. 
 
 4. A sells to B a bill for cash and delivers the goods on the loth 
 inst. On the 16th A calls at B's office to collect amount of bill and 
 payment is refused, B claiming that cash is payment at any time 
 within 30 days from date of invoice and delivery of goods. 
 
 A. In many departments of trade the term " cash " on a bill 
 has come to have a conventional meaning, and is fully answered 
 in such cases by a payment w ithin 30 days. " Net cash " is no 
 better since it is merely to cut off a demand for discount, and 
 does not imply any earlier promise of payment. The only way 
 to secure immediate payment without question, is to mark the 
 bill C. 0. D. or " cash on demand," or " cash in three days " 
 which gives the buyer time to examine the goods. 
 
128 COMMERCIAL TERMS. 
 
 5. Will you inform me of tlie meaning of the following terms : 
 Cash," " net cash,"' " prompt cash " ? and much oblige. 
 
 A. A bill marked terms cash " leaves it undecided whetlier 
 a discount is not to be made, while net cash " disposes of that 
 (picstion. Usually cash bills " are collected within 30 days, but 
 
 promi)t cash " is supposed to mean cash down, or payment im- 
 mediately on examination of the goods delivered. 
 
 6. Please define the following: ''A chop of tea," '-An invoice 
 of tea," A line of tea," A bracket of tea." 
 
 A. A CHOP of tea is the entire quantity of a certain kind of 
 
 tea brought to market, or in China, the entire quantity of that 
 
 kind that is made. This usually (in Congou) comprises from 
 
 600 to 1,000 chests. It is equivalent to " a dairy " in the butter 
 
 districts. 
 
 An INVOICE of tea is the whole of a shipment made by a par- 
 ticular shipper, or sent in one lot to a ])articular house. 
 
 A LINE of tea is the quantity contained or described in one 
 line in a catalogue. 
 
 A BRACKET of tea describes all the lines in such a catalogue 
 that are contained in one bracket. Every auction catalogue will 
 liave in the course of its offering, two, three, five, or more lines 
 tied together in this way. 
 
 7. Does a draft drawn "at sight" carry grace? Is there any 
 difference between a draft drawn " on demand" and '^at sight" ? 
 
 A. In this State (X. Y.) grace is expressly forbidden by 
 
 statute on all sight bills. Where grace is allowed by law or 
 
 custom on bills payable " at sight" the courts make a distinction, 
 
 usually, against goods payable on demand," as not within the 
 
 privilege. Kent's Com., vol. 3, page 102. Story on Bills, sec. 
 
 342. 
 
 8. When a mercantile house is obhged. from one cause or 
 another, shrinkage of assets or injudicious over-issue of paper, to allow 
 its notes to go to protest and stop payment on all its liabihties. does 
 it not, although it may in time pay in full, really /ai7, or does it merely 
 ^'suspend " ? 
 
 Does the word fail in a mercantile sense, mean a failure to meet 
 maturing obligations at bank and otherwise, or does it simply signify 
 a failure finally to pay the full amount of indebtedness at the con- 
 venience of the promissor ? 
 
COMMERCIAL TERMS. 
 
 129 
 
 A. To fail, in a financial sense, is to become unable to meet 
 one's engagements, and as far as a suspension is a failure to pay 
 liabilities as they become due, the latter term may be applied to 
 it. In common speech, however, a temporary delay of payments 
 by a solvent firm, owing to a financial crisis in the money market, 
 or to some sudden or unexpected embarrassment, is called a sus- 
 pension ; and absolute bankruptcy or insolvency is called a 
 
 9. What difference is there between a Finland ton and a Finland 
 last, vessel measurement ? Please give the exact proportion one bears 
 to the other. 
 
 A. It seems that this has been the subject of much inquiry, 
 not only among the Finland and Russian merchants here, but 
 also of the consuls and other officials, since when our inquiries 
 went out into all these circles they recognized the question, but 
 could not give its solution. We are very glad in these circum- 
 stances to know that our column is equal to the occasion. Last 
 in Scandinavian language means " a load," and this varies in 
 different countries. A last in Finland is equal to 149J poods. A 
 pood is 40 pounds Russian and 36 English pounds ; or to be more 
 exact 36 pounds, 1 ounce, 11 drachms in the latter weight. A 
 ton in Finland is 63 poods ; hence to change any given number 
 of lasts into tons multiply by 149.5 and divide by 63. To change 
 tons into lasts multiply by 63 and divide by 149.5. 
 
 10. I find in the finance column of a New York paper that the rates 
 paid for " carrying ranged from 5 per cent, to flat." What is the meaning 
 of "fiat," and if it means no percentage, how could a broker carry 
 gold or stocks without interest ? 
 
 I also find a New York report that '-money opened at 6 and 7 per 
 cent, on call, advanced to 1-32 and interest, and closed at 4 per cent." 
 What is meant by " 1-32 and interest ? " 
 
 A, "Flat" means free of interest. When gold or stocks loan 
 " flat " it is because there is such an abundance of either or both 
 in the market that lenders are willing to loan them free of inter- 
 est in order to get the currency for temporary use, which cur- 
 rency they are able to employ in other transactions. 
 
 By 1-32 and interest is meant the commission of 1-32, about 
 
 12 per cent, per annum, which the borrower pays in addition to 
 
 the legal rate of interest for the use of money. 
 9 
 
130 
 
 COMMERCIAL TERMS. 
 
 1 1 . Are mercantile terms (C. F. I.) cost, freight, and insurance, 
 and ( F. 0. B.) free on board, identical expressions. Having received 
 several orders lately from Europe for merchandise, I notice that in 
 some mstances F. O. B. is considered to cover freight, whereas I had 
 always presumed the letters C. F. and 1. were used in such cases. 
 
 A. We cannot say in what sense the writer's friends may 
 
 have used these abbreviations, but we have always understood 
 
 that "F. 0. B." in an order required the shipment of the goods 
 
 at the price named, free of all other charges up to the day of 
 
 sailing ; and C. F. 1. to require the price named to limit the cost 
 
 up to the point of delivery on the vessel's arrival. When a man 
 
 in New York orders an article in Liverpool by a steamer at a 
 
 certain price F. 0. B., he means that to cover the cost of placing 
 
 it on board the steamer there, ready for the voyage ; but if his 
 
 order is C. F. I., that would bring it free to the landing in this 
 
 city (N. Y.). 
 
 12. A vessel, 540 tons, gets a berth outside another vessel, April 
 23, 8.*30 A. M.; the 24th, 9.30 a. m., she takes the inside berth, where 
 she remains till May 3, 6 a. m. What wharfage does the law aUow 
 to be collected from vessel ? The wharfinger claims 10 days at $5.70. 
 I insist that vessel has to pay 9 days full rate and 1 day half rate. 
 Vessel did not discharge while lying outside. What is the definition 
 of a day in the following sentence: " For every day or part of a day? " 
 
 A. The phrase " for every day or part of a day" is inter- 
 preted as giving a full day's Avharfage for each full day, and 
 reckoning a fraction of a day also as a full day when the period 
 laps over one or more days upon another. But the act of 1877 
 explicitly establishes a half rate for vessels outside and not dis- 
 charging. The question now is whether the wharf owner can 
 reckon the part of April 24, before 9.30 during whicli the vessel 
 lay outside, as a full day (at half rates) and the remainder of 
 the day inside as a full day at full rates, thus making two days 
 at half rates, and nine days at full rates, equivalent to ten days 
 at full rates. The law is open, perhaps, to such a construction, 
 but we doubt if the courts would allow the charge, or equity per- 
 mit it. We think nine days at full rates and one day at half 
 rates a legal settlement for the service. 
 
 13. Please give a full explanation in regard to the so-called 
 general average/^ caused by damages to ships. We have a cargo on 
 
COMMERCIAL TERMS. 
 
 131 
 
 a German vessel, which is insured in a foreign company, with the 
 clause "insurers not answerable if damaged below 10 percent." It 
 appears that there is no loss on our goods, they being but slightly 
 touched. Are we responsible, pro rata, for the injury of the ship, and 
 so, have we any redress on the insurance company, notwithstanding the 
 above circumstances ? As far as I remember, the insurers are held to 
 pay expenses for repairing the vessel, but should not the owners deal 
 directly with the insurance companies, as the damage ref^^rs to the ship 
 and not to the cargo ? Do you think it right to hold an insurance 
 company responsible for damage on the ship, when they merely 
 insured the cargo ? 
 
 A. On the subject of general average, Parsons remarks : 
 " Substantially the rule is this, that where maritime property is 
 in peril, and a sacrifice of a part is made for and causes the 
 safety of the rest, that which is saved contributes to make up the 
 loss of that which is sacrificed." ( Parsons on Contracts, ii, 
 323.) He further says : " Insurers are liable for a general aver- 
 age when they insure against that peril or loss to avert which the 
 sacrifice was made ; for a loss by contribution is regarded as a 
 loss by that very peril." If the goods are separately insured, the 
 shipowner has no claim for contribution directly against the 
 insurer, but against the owner of the goods, who then has his 
 remedy over against the insurer. As to the damage to the ship 
 for which the cargo is liable to contribute, it is impossible to lay 
 down a rule which will cover every supposable case, but the loss 
 must have been incurred for the purpose of saving the ship and 
 cargo from peril. 
 
 14. Will you please inform me of the meaning and origin of the 
 term ( frequently used) " The Law Merchant ? 
 
 A. The "Law Merchant" is the name of that system of law 
 which the courts of England and the United States apply to 
 mercantile contracts. It is a branch of the common law, and 
 includes the law of shipping, marine insurance, negotiable bills 
 of exchange and promissory notes, and sales. 
 
 15. Please explain the meaning of the word "limited" as applied 
 to corporations and copartnerships ? 
 
 A. In England, in New York, and some other states, joinv 
 stock corporations and associations are allowed, and the stock- 
 holders are exempted from individual liability on condition, 
 
132 
 
 COMMERCIAL TERMS. 
 
 prescribed by law, that tlic name or title contains the word 
 "limited," to be used always in all business of tlie concern. 
 
 16. Will you please inform me of the full meaning of the word 
 "limited " as applied no\v-a-days to partnerships ? 
 
 A. The statute authorizes the formation of joint stock com- 
 panies, witliout tlie personal liability of the stockliolders, provided 
 that the word ^'limited" is incorporated in the name and con- 
 stantly used. 
 
 17. Does the meaning of the term " on call in financial circles 
 imply that money borrowed -'on call" must be paid immediately on 
 the demand of the lender ? And, also, must the borrower be provided 
 at all times subsequent to the loan for the contingency of the " call " or 
 is there some notice given ? 
 
 A. Xo notice is to be given, and the money must be returned 
 the day it is called for, before the close of banking hours. 
 
 1 8. Please state how " preferred " shares of a railroad are usually 
 created, and why these shares should take precedence over the "com- 
 mon stock," when a dividend is earned ? 
 
 A. Preferred stock is usually issued for borrowed capital. It 
 is second to the interest on the bonded debt, which must first be 
 paid. If tliere are any earnings left they go next to i)ay a divi- 
 dend on the preferred stock, and only what then remains is 
 applied to the common stock. 
 
 1 9. Please inform me if a note made out as below is sufficiently 
 explicit as to promise to constitute a " negotiable " note ? 
 
 $100. This is certify that there is due by the congregation of church to 
 
 John Smith, Esq., of order, the sum of $100, payable in one year, with interest 
 at 6 per cent, payable annually. , Pastor. 
 
 A. The writing comes within the definition of a promissory 
 
 note given in Story, sec. 12, and it is negotiable because it is 
 
 payable to a certain payee or orderc 
 
 20. Will you explain to me what is meant by " puts " and " calls " 
 in stocks V 
 
 A. ' Put entitles the holder to put or deliver stocks to the 
 signer thereof within the time and at the time therein named. A 
 ^Cali' entitles the holder to call for or demand stock of the 
 signer according to terms specified. A "Spread" is another 
 
COMMERCIAL TERMS. 133 
 
 term used, and this is a double privilege, entitling the holder 
 either to deliver to, or to demand from, the signer a certain 
 amount of stock on tlie terms specified. If the price named for 
 both is the same, it is then known as a " Straddle." 
 
 21. We receive a cargo of sugar from Mexico. Bill of lading 
 reads ''Freight 30 cents and 5 per cent, per quintal," but does not 
 state whether the same is Spanish or American weight. Can we figure 
 the quintal at 112 or only at 100 or 101 3-4 pounds ? 
 
 A. The custom of the port is to reckon such a contract at 
 100 pounds per quintal. The law of Congress, section 3,570 
 declares that the ''tables annexed shall be recognized in the con- 
 struction of contracts, and in all legal proceedings ; " and in 
 these tables a quintal (one of the terms of the metric system) is 
 put down at 100,000 grains, or 226.46 pounds avoirdu})ois ; but 
 this is only when it is used as part of that system, and estab- 
 lishes its legal equivalent when so used. 
 
 22. A schooner was loaded with a cargo of frozen herring which 
 cost $1,900. She proceeded to the mouth of the river where she 
 sprung a leak. She put into Eastport, Me , where a survey was held. 
 The cargo was condemned and the schooner ordered to be recaulked. 
 The captain called an auction on account of whom it may concern, and 
 sold the cargo for $480, which money he retained until it should be 
 called for; about one quarter of the cargo was refrozen by the pur. 
 chaser, and forwarded to Boston in another vessel, the balance was 
 sold for refuse fish on the ground. The cargo was insured by the 
 owners for §2,000, the captain also had his freight money insured in 
 another company. The insurance company paid the captain a percent- 
 age for the loss of his freight ( probably enough to pay for repairs.) 
 Are the insurance company liable for the loss on the carg.o'^ They 
 repudiate any claim, as they say it was only a partial loss, r:ia the 
 cargo was insured against total. The clause in policy reads: " Free of 
 particular average." I am informed by reliable parties of New York 
 that in such cases anything over S50 is a technical total loss. There 
 has been no call on the captain for the $480, as the insurance matter 
 is not settled. 
 
 A. The cargo having been condemned by a board of survey 
 and sold at the port of refuge, it became a technical total .oss 
 for which the underwriter or the insurance company is "iiaoie. 
 The insurer must be credited with the proceeds of the cargo 
 sold, and must pay the difference. 
 
 23. 1» What is the nature, form, and legal and commercial value 
 of a "warehouse receipt ?" 
 
134 
 
 COMMERCIAL TEliMS. 
 
 2. Would it, in a case of bankruptcy, protect the liolder against the 
 claims of the other creditors of the warehouseman, the property, goods 
 or merchandise covered by it being still in his possession ? 
 
 A. 1. Warehouse receipts arc in form simply what the name 
 implies, a receipt issued by a warehouseman for goods received 
 by him in store and held for the consignor or his assignee. They 
 are assignable, but how far a mere assignment operates to pass 
 the property to the goods, is a question yet in a very unsettled 
 state. According to mercantile usage and understanding, the 
 transfer of the document completes the delivery of the property, 
 but the English courts have held otherwise, and the part of pru- 
 dence, perhaps, requires that the assignee should not only be 
 satisfied as to the title of his assignor, but also should perfect 
 delivery by notice to the warehouseman. 
 
 2. The general creditors of a warehouseman could assert no 
 claim upon the property held by him in store, represented by a 
 warehouse recei})t, but the holder of the receipt could require the 
 delivery of the goods. 
 
 Another subscriber asks about a merchant issuing " a ware- 
 house receipt for goods in his own store and to his ow^n order," 
 etc. If the merchant is not in the warehousing business, and 
 the certificate is designed merely as a kind of chattel mortgage 
 on a part of his stock, it would have to be recorded as such to 
 perfect the lien. 
 
 24. Wliat is the meaning of the clause "working days," that is 
 occasionally inserted in cliarter parties. A vessel is chartered with 
 the clause, " Three working days wall be allowed for loading." She 
 commenced taking in cargo on Saturday the 1st, but on Monday the 
 3d, and Tuesday the 4tli, charterers are unable to give the vessel cargo, 
 owing to rough weather prevailing, but she continued loading on Wed- 
 nesday the 5th, on which day the vessel is dispatched. How many 
 working days " do you consider have been used ? 
 
 A. The " lay days " in a charter party are expressed as so 
 many 'ulays," or " running days," or "working days." It has 
 been legally decided that where "days" alone are named, the 
 usage or custom of the port, or some law forbidding w'ork on 
 Sundays or holidays, must be shown, or all the dnj's in the calen- 
 dar will be reckoned. The expression " running days " is con- 
 clusive of this meaning, and the time connnences at once and 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 
 
 135 
 
 continues without omission or intermission, no matter how- 
 impossible it may be to execute the work. But " working days " 
 exclude Sundays, holidays, and rainy weather. No day is reck- 
 oned except such as may lawfully and properly be used in work- 
 ing. In the case cited above, if the cargo was not tendered until 
 Saturday, she occupied but two working days in loading. 
 
 CONSIGNMENT AND COMMISSION ACCOUNTS. 
 
 CONSIGNEE. 
 
 1. A of New York ordered B, a commission merchant of a west- 
 ern city, to purchase 100 ])arrels dried fruit of prime quality. B made 
 the purchase, shipped the fruit, charged regular commission of 2^ per 
 cent., sent invoice in his own name and drew at sight on A for the 
 amount. A knew no one in the matter but B. On examination of 
 the goods here it was found to be not prime, except on top and sides, 
 and falsely packed underneath. A wrote B and demanded that the 
 lot of fruit should be taken back and amount refunded, or that fruit 
 of the grade ordered should be furnished. B wrote that he is only 
 agent for A, and that A must look to C, of whom B purchased the 
 fruit, for any damages. At the same time B admits that he did not 
 examine the fruit thoroughly, but relied on representations made by 
 C, of whom he purchased. Now B having had full opportunity to ex- 
 amine the fruit before accepting it, and having been paid full commis- 
 sion of 2h per cent., to whom must A look for damages ? A knew B 
 to be a responsible party, and for that reason gave him the order to 
 purchase. 
 
 A. As B invoiced the fruit in his own name and furnished no 
 statement concerning a principal, lie can be held to have guaran- 
 teed the merchantable quality of tlic fruit. A can have recourse 
 to B, leaving the latter to his remedy of C. 
 
 2. Suppose a commission merchant in Liverpool sells our tobac- 
 co and has accepted bills of exchange for net sales and he fails before 
 maturity of said bills, what are the laws of England in such cases, pro- 
 vided the commission agent does not pay for the tobacco ? 
 
 A. The statute 5 and 6 Tie, c. 39, gives agents or factors 
 intrusted with the possession of goods power to put a lien upon 
 them for loans or advances, and unless the lender acted in bad 
 faith, or with notice that tlie factor had no authority to pledge 
 the goods, it will make no difference liow the latter a])propriates 
 or misappropriates the proceeds. But this provision is solely for 
 
136 CONSIGXMEXT AND COMMISSION ACCOUNTS. 
 
 the protection of third ])crsoiis who may iiiiioceiitly make ad- 
 vances, and the agent who exceeds his authority in this respect is 
 liable to jmnishment criminally. 
 
 3, Suppose we have in Liverpool in the hands of a commission 
 merchant £3,000 worth of tobacco on whicli no advance has been 
 given, and the commission merchant should hypothecate the same to 
 raise money for his own use, could the bank hold the tobacco to meet 
 their debt after we had established the fact that the tobacco was our 
 property and that no advance had been made on it except to pay ocean 
 freight ? What is the law of England to meet such cases ? 
 
 A. Without special authority, the agent has no power, ac- 
 cording to Paley on Agency, 49, and citations, to accept or in- 
 dorse bills so as to charge his principal. The latter may there- 
 fore stop the payment of the bills, and require payment to him- 
 self ; and there is authority for the statement that even if the 
 bills are paid to the agent, after his bankruptcy, the principal 
 may still demand and receive payment from the payor. Paley, 
 81 ; Hudson v. Granger, 5 B. and Aid., 27. 
 
 4, We are agents in this city for a manufacturer, who limits us to a 
 certain price on his goods, and after our introducing said goods in this 
 market, he undersells us to one of our customers. Are we entitled to 
 any commission on such sale ? and if so, what percentage ? We re- 
 ceive 5 per cent, commission and guaranty on this account, regularly. 
 
 A. Unless there is a contract that the agents shall have a 
 commission on all the goods sold, the manufacturers have the 
 legal right to sell directly to any resident of that city without 
 paying any tribute to our correspondents. It is not considered 
 very honorable to do this, but there is no law that requires a 
 manufacturer to be a gentlemen. We cannot say, in the case 
 before us, but circumstances may have justified the sale referred 
 to, but on the face of it the inference is not favorable for the 
 producers. 
 
 5, We sell domestic goods on commission for a manufacturer at a 
 certain price and allow a trade discount. The terms of the sales are^ 5 
 per cent, discount for cash in GO days. Are we entitled co a commis- 
 sion on the net amount of the sale or on the actuai cash received, or, 
 in other words, do we have a right to charge commission before or 
 after the discount for cash is deducted ? 
 
 A. The commission is to be reckoned on the amount of the 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 137 
 
 bill of sale as rendered. If the goods were sold at 5 per cent, 
 discount, or as certainly subject at all events to such a deduction, 
 this percentage must be taken off before the commissions are 
 reckoned. 
 
 6. What commissions has a house on goods consigned to them that 
 have been destroyed by fire, when the agreement between the parties 
 reads we [the commission house] agree to keep all goods fully insured 
 in first class companies and we agree to charge for fire insurance, 
 cartage, storage, etc., 1 per cent., and for commissions and guaranty 
 5 per cent., it being understood that the guaranty is 2^ per cent., 
 and the commission 2^ per cent ? I understand that the matter was 
 fully decided by the Boston fire, by the courts of law and by arbitra- 
 tion. Please state also the price of the goods that we are entitled to 
 from the insurance company ? 
 
 A. The commission house is entitled to full commissions on 
 the goods destroyed. The price to be charged to the insurance 
 company is the market value of the goods. The Massachusetts 
 case referred to did not directly turn on the above point, but 
 rather on the title to the insurance money. Goods consigned 
 were destroyed in the great fire, having been covered by a float- 
 ing policy of insurance in the name of the consignees, their com- 
 mission to be five per cent, for all charges. The court held that 
 the consignees, having made advances on the goods, had the 
 same lien on the insurance money as they would liave had on 
 the goods. (Johnson vs. Campbell, 120 Mass., 449.) We have 
 no means of ascertaining how similar cases were settled by arbi- 
 tration. 
 
 7. A at New York consigns to B at Yokahama some goods to be 
 sold for his account and risk. After disposing of a part, and finding 
 the sale slow, on account of local legislation against their use, B con- 
 signs the balance to C at Shanghai, where they are sold. First, has 
 B any right to send the goods to Shanghai without consulting A ? 
 Second, If, however, A, rather than have trouble, accepts the sales at 
 Shanghai, can B properly charge him with the commission paid to C 
 as well as his own ? 
 
 A. If the goods were to be disposed of to the best advantage, 
 and would not sell at Yokahama, B would seem to us to be 
 justified in sending the remainder to Shanghai, and under the 
 circumstances and according to custom Avould be entitled to 
 charge full commission if under advances, and half commission 
 on the residue not advanced upon. 
 
138 CONSIGNMENT AND COMMISSION ACCOUNTS. 
 
 8. A firm is dissolved by the death of one of the partners, consigned 
 goods remain on hand at time of his death. Is the old firm or the per- 
 son who sells the goods entitled to the commission on the sale ? 
 
 A. If the goods are sold in the name of the old firm by tlie 
 surviving partner, the commissions go to its profit and loss ac- 
 count, and the survivor is not entitled to any personal compensa- 
 tion for settling up its affairs. If the goods are transferred to a 
 new firm, the old firm is entitled to the same commissions as it 
 could collect if the goods were withdrawn by the consignor. 
 
 9. We have a consignment of goods which the consignor has sold 
 without consulting us, and in such a manner that we desire to insist up- 
 on having all the commission, etc., to whicli we are legally entitled. Our 
 terms are 5 per cent, commission, 2^ guaranty, fire insurance, storage, 
 cartage, etc. It is customary in such cases to charge one -half the or- 
 dinary commission, i.e., 2^ per cent, and fire insurance etc, but we 
 should like to know if we cannot collect our full commission of 5 per 
 cent, before delivering the goods ? 
 
 A. By the chamber of commerce tables the consignee is en- 
 titled to full commission to the extent of his advances or obliga- 
 tions in behalf of the consignor, and half commission on the re- 
 mainder. 
 
 10. Under the following agreement, which does not contain any 
 limit or stipulation as to time, can A terminate the same without being 
 liable for damages to B ? Should A sell to other parties in France, 
 while no neglect on the part of B to fulfil his obligation can be shown, 
 and thereby break the contract, can B recover damages, covering the 
 expenses and charges, which in introducing the articles were much 
 larger than the profits, and any prospective profits on estimated future 
 transactions ? Also, can B compel A to take back (in such event) the 
 stock of A's goods that he may then have on hand at cost price ? 
 Agreement between a manufacturer (A) and commission merchant (B), of New 
 
 York ; A to give B the exclusive agency and right to sell the goods of A's 
 manufacture for and in France : 
 
 A agrees not to sell or ship any of his goods to France direct or through 
 agents in the United States unless with consent of B. B agrees to do all in his 
 power to introduce and sell at his expense and for his account said goods in 
 France through agents m Paris, etc., by traveling, advertising, and such means 
 as he may tind expedient. 
 
 The agreement contains furthermore prices and terms. 
 
 A. On the presumption that the contract itself is valid, the 
 damages for a breach of it would without doubt include the 
 expenses described, so far, at least, as they have not been made 
 up by the i)rofits of the contract. As to the allowance of pros- 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 139 
 
 pective profits by way of damages, they seem, in the case before 
 us, clearly to belong to the class of direct profits, which were in 
 contemplation of the contracting parties, and which, in fact, 
 formed the inducement to the contract ; and such profits it has 
 been well established by our courts may be allowed. (United 
 States V. Speed, 8 Wall, 77 ; Story v. The N. Y. and Harlem R. 
 R. Co., 6 N. Y., 85 ; Masterson v. Mayor of Brooklyn, 7 Hill, 62 ; 
 Griffin v. Colver, 16 N. Y., 489) — especially the last case cited. 
 
 11. A made a contract with B to sell goods for A on commission. 
 The contract provided that notes taken by B on sales and delivered to 
 A in payment of goods sold, should be indorsed by B. Settlement 
 was made and notes transferred to A without B's indorsement, no 
 reference being made to the contract. Tlie notes maturing two and 
 three years subsequent to the settlement are not collectible. Can A 
 recover of B on the contract, or did the settlement and receiving the 
 notes without B's indorsement waive that condition of the contract ? 
 
 A. If under the contract B is responsible to A, as a guar- 
 antor of the sales he made, he must make good any such defal- 
 cation unless an express waiver is shown. 
 
 12. A ships a number of boxes of oranges to B, a commission 
 merchant of New York. B sells a portion of them at satisfactory 
 prices, and ships the remainder (without consulting A) further North 
 to C, another commission merchant, where they arrive in a frozen con- 
 dition. C sold them and remitted the net proceeds to B. There not 
 being enough to pay the freight, and A being the loser, has he any 
 redress ? 
 
 A. If this adventure of re-shipment was undertaken by B on 
 his own hook, we do not think he can have recourse to the owner 
 for the deficit, although he may not be liable to A for the low 
 rate at which they sold. 
 
 13. In August we shipped a commission merchant a large lot of 
 dried berries and ordered him to sell on arrival or to arrive." He 
 disregards our orders and holds the berries. He died about the first 
 of October. Can we not hold his estate for the value of our berries, 
 on the date of his receiving them ? 
 
 A. The consignee of a lot of goods is not legally responsible 
 for disol)eying orders to sell, unless it can be shown that he 
 grossly neglected the trust ho had undertaken. A mere failure 
 to sell is not proof of such neglect. It is sometimes exceedingly 
 difficult, if not impossible, to execute such an order. 
 
140 coxsiaxMEyj axd c ommisswn accounts. 
 
 14. A party sliips me a quantity of vinegar to Le sold on com- 
 mission. My commission is 5 per cent., which the consignor knows 
 If I sell the vinegar and make a loss, using my best care and judgment 
 m the matter, can the consignor hold me for the loss, providing 1 have 
 not agreed to guarantee sales ? Can you give me the law on the 
 subject ? 
 
 A. We suppose our correspondent means to inquire wlietlicr, 
 if he sells the vinegar to a person he supposes to be solvent, and 
 does not collect the money, he can be held to pay the consignor. 
 Under the circumstances described we answer in the affirmative. 
 
 15. A consigns merchandise to B in New York without advances, 
 the object of the consignment being to have the goods sold to the best 
 advantage m the New York market. B wants money, and hypothe- 
 cates said merchandise to accommodate himself. Is such proceeding 
 considered in mercantile circles a breach of trust ? In other words, is 
 consigned merchandise, without advances, trust property ? And is 
 such proceeding legally wrong and criminal ? 
 
 A. These breaches of trust, described above, arc denominated 
 torts, in the law ; they are not crimes m the legal definition, but 
 a milder species of wrong. The owner of the goods, or of the 
 securities, may proceed against the first bailee for a Avrongful 
 conversion of the property, and in such an action the defendant 
 may be imprisoned. 
 
 The Factors' act, in this State (X. Y.), distinctly gives to a 
 third party who makes a loan on merchandise thus consigned a 
 lien to the extent of his advances. 
 
 In regard to negotiable securities, the same rule has been held 
 to apply Avithout any legislation. Parsons on Contracts, vol. 3, 
 sec. 273, says : As to pledges of bank notes, negotiable securi- 
 ties, indorsed notes, and other representatives of money, the 
 pledgee Avho takes them in good faith Avill acquire a lien, whether 
 the title be in the pledgor or not." It is said that this will be 
 disputed, but we do not believe that it can be overthrown. We 
 do not Gce how society can be held together under present 
 methods of business, if the protection of every one who loaned 
 on negotiable securities depended on the title of the pledgor to 
 the property on which the loan is effected. There are a hundred 
 millions loaned m New York to-day on the pledge of negotiable 
 ^^x)llaterals. The title to such securities passes by acquisition in 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 141 
 
 good faitli for value. If a man steals such securities and sells 
 them, the purchaser, who has no notice of the theft, or reason to 
 suspect the wrongful acquisition, acquires a perfect title. If the 
 mere fact of possession will justify a sale so far as to give title 
 to the buyer, it must be held to justify the pledge so far as to 
 cover an advance made in good faith upon the securities, and the 
 lender can enforce his lien. 
 
 1 6. Are we liable in case of fire for goods we may have on mem- 
 orandum ? 
 
 A. The bailee in this case is only liable for proper care and 
 diligence. If he has fire insurance applicable to such goods the 
 owner can recover his proportion of the amount collectible under 
 such a policy. Whether he is liable if he has no insurance that 
 would apply, is a question of custom and agreement. 
 
 17. If we take into our malt house a lot of barley to be malted for 
 another person, where nothing has been said about insurance, if the 
 malt house should burn down would we be liable for any damage ? of 
 course all our material is insured. 
 
 A. Factors and other depositors for hire are not bound to 
 procure insurance upon the thing bailed, without some authority, 
 expressed or implied, from the employer. (Story on Bailments, 
 sec. 456 ; Jones on Bailments, 102.) In bailments for work or 
 custody, as in the above case, if the property is destroyed by fire 
 or otherwise, without the fault of the bailee, the loss will fall 
 upon the bailer. But this responsibility may be controlled by 
 the special contract of the parties, or by the usages and customs 
 of the trade or business. (Redfield on Bailments, sec. 691.) 
 Therefore, if it is a custom in the trade for the bailee to insure 
 under the circumstances stated, without instructions, he would 
 be liable for the loss in case of fire ; if the custom is otherwise, 
 then he would not be liable. 
 
 18. We consigned some goods to a party in West Virginia. We 
 did not hear from him for a while, and then when we asked for a 
 settlement of account he wrote us that our goods were burned with 
 his own two months before, and adds : ''As these goods were yours 
 and not mine, not subject to levy for my debts, I must respectfully 
 decline to acknowledge myself in your debt. The goods were con- 
 signed me for sale on your account." Those goods were consigned, it 
 
142 COXSIGNMEXT AND COMMISSION ACCOUNTS. 
 
 is true, but we never had been apprised of the fire, neither do we 
 know if they have not been saved, as our goods are not of a perishable 
 nature. Have we any rights, if the party is good ? 
 
 A. Wc cannot blame our correspondent for feeling aggrieved 
 that two months sliould elapse after liis property was bm-ned 
 before he was informed of it, and then only when he asked for 
 payment. He certainly has the right to investigate, to inquire 
 why the goods were not insured, or if insured and destroyed, who 
 recovered and pocketed the money. If suit is brought against 
 tlie West Virginia consignee he will be compelled to prove the 
 loss, without his own fault, before he can evade responsibility. 
 
 19. Goods are consigned to us by a manufacturer on which we 
 advance a certain amount. We afterwards find imperfection in the 
 goods, and the manufacturer makes an arrangement with ono auction 
 house to receive the goods from us and pay us, as advanced, a certain 
 sum, covering our advance and our expenses on the goods. The goods 
 are finally sold by the auction house for a sum less than the 
 amount advanced to us. Can the auction house hold us responsible 
 for the deficiency, or will they have to look to the manufacturer with 
 wnom they made the arrangement, we having no funds belonging to 
 said manufacturer left in our hands ? 
 
 A. If the whole story is told, the auction house has no 
 recourse to the commission merchant for any deficiency, but 
 must look to the manufacturero 
 
 20. Is it not by commercial usage the duty of a consignee to insure 
 goods consigned to him against fire, in the absence of instructions to 
 the contrary, from the consignor ? If he neglect to do this, and the 
 property be destroyed by fire, would he not render himself lir.blc ? 
 
 A. It is the custom of commission merchants to insure con- 
 signments likely to remain any time in store, even Avithout 
 instructions to that effect. But this is done as much to protect 
 the interest of the consignee as of the consigner. In the absence 
 of a previous usage to this effect between the same parties, or 
 some expressed or implied directions in regard to it, a consignee 
 would not be held liable if he omitted it. 
 
 21. A miller places several hundred barrels of flour with a com- 
 mission merchant on consignment. The merchant sells, renders sales, 
 charging usual commission, storage, &c. In dehvering the flour four 
 barrels are found badly damaged by rats; loss say $2 per barrel. Up- 
 on whom should this loss fall, on the merchant or the consignor ? 
 
CONSIGNMEXT AXD COMMISSION ACCOUNTS. 143 
 
 A. Unless it be shown that the damage is the result of gross 
 carelessness on the part of the merchant, the loss falls on the 
 miller. When Texas was an independent republic, the account 
 of sales received by a shipper from that quarter always had a 
 deficiency charged to " ratage." Flour, pork, beans, fruits, all 
 fell short owing to the supposed depredations of the rats. At 
 last a shipment of 100 kegs of ten-penny nails fell short two 
 kegs from " ratage," and the shipper closed his account. 
 
 22. Will you be kind enough to inform me if a party in Call, 
 fornia sends me a consignment of wine and brandy of his make, if I 
 am obliged to get a license before I can offer it for sale ? 
 
 A. No person can engage in the sale of either foreign or 
 domestic wines or liquors without paying a special United States 
 internal revenue tax either as a wholesale or retail dealer accord- 
 ing to the quantity in which he proposes to sell it. 
 
 23. Is it safe to make advance on consignments which came from 
 a reputable source, although the consignor may be but the agent for 
 the owner of the goods ? 
 
 A. If our correspondent means to ask if it is absolutely safe 
 to advance upon goods without knowing whether the person who 
 receives the money has the legal right to pledge them, we answer 
 in the negative. An agent may have power to handle the prop- 
 erty of his principal without the right to sell or pledge it. In 
 such a case the consignee would have no legal lien on the prop- 
 erty for his advance. 
 
 24. If an assignment of flour, shipped in the regular way, 
 
 arrives here, inspects unsound, and is sold by the consignee, in the 
 absence of specific instructions, at full market price, can the consignor 
 claim a difference between the selhng price and the price of the same 
 brand when sound, on the ground that he has a right to know how the 
 flour inspects before it is sold ? 
 
 A. If the consignor limits the price, and the consignee has 
 made no advances, the latter has not the right to sell below the 
 limit without communicating with the former. But if no limit is 
 affixed to the invoice, and in any case if the consignee has made 
 advances, he has the right to sell at the market price. 
 
 25. A commission merchant hypothecates goods he holds on con- 
 signment upon which he has made no advance, and gets a loan for his 
 
14A COXSIGXMEXT AND COMMISSION ACCOUNTS. 
 
 own benefit. The commission merchant fails ; can the party making 
 the loan hold the goods against the owner ? 
 
 A. The Statutes of New York, vol. iv, page 462, expressly 
 give to the consignee of any goods for the purpose of sale" the 
 right to make a valid contract " with any other person, for the 
 sale or disposition of the whole or any part of such merchandise, 
 for any money advanced or negotiable instrument or other obli- 
 gation in writing given by such other person upon the faith 
 thereof." In plain terms the right to sell gives the right to hy- 
 pothecate, although the consignee may have made no advances ; 
 and the loaner wiio takes a lien on the property as his security is 
 not affected by the fact that the consignee or commission mer- 
 chant has obtained the loan for his o^vn private needs. 
 
 26. I received a lot of goods from a manufacturer on consignment 
 on which I advanced nearly their full value. 
 
 The manufacturer has made an assignment and I have received 
 a letter from a lawyer informing me that I must not sell the goods ex- 
 cept by order of the assignee. 
 
 Have I not the right to sell the goods so as to recover my advances, 
 or must I await the assignee's pleasure and be restricted by such con- 
 ditions as he may see fit to impose ? 
 
 A. " The assignee has authority, under the order and direc- 
 tion of the court, to redeem or discharge any mortgage or condi- 
 tional contract, or ])ledge, or deposit, or lien upon any property, 
 real or ]iersonal, whenever payable, and to tender due perform- 
 ance of the condition thereof, or to sell the same subject to such 
 mortgage, lien, or other incuml^rances." (Section 5,066.) 
 Under this clause of the law, the creditor will have to wait on 
 the assignee a reasonable time. Probably it w^oiild be best to 
 give him notice of claim to be repaid the advances, or allow^ed to 
 sell the goods, and if he should delay unreasonably, the Court, 
 on application, would most likely afford the creditor relief. 
 
 27. A commission house has a line of our goods which they sell for 
 us against a commission in their own name, but for our risk. In Janu- 
 ary they sent us upon our request a statement of stock on hand, in 
 which we find some goods short, in regard to which they write to us 
 ''that they have been stolen from their store in October last by some 
 sneak thief, whom they were not smart enough to catch," and regret- 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. I45 
 
 ting at the same time our loss. This was the first information wliich we 
 received that any of our goods had been stolen. We are, and have al- 
 ways been, of the opinion that the house is responsible for our goods 
 as long as they are in their hands, which they, however, deny, and re- 
 fuse to pay for the goods stolen. 
 
 A. It is a well known legal principle that a bailee is not re- 
 sponsible for the loss of goods occurring in spite of due diligence 
 in their care and protection. Commission merchants, as a rule, 
 do not avail themselves of this principle to free themselves from 
 responsibility for missing goods ; and it is a question whether due 
 diligence," while it may not protect the goods from downright 
 robbery or burglary, is consistent with their purloining by a 
 sneak thief. The question of proper care is one to be settled in 
 each case by the facts in evidence. 
 
 28. send account of sales to a shipper for goods sold for his 
 account, and write on the sale " Net proceeds to your credit." This 
 shipper takes the sale to a bank and they cash his draft on us for the 
 net proceeds of the sale. The draft is presented to us and we refuse 
 to pay it, as the said shipper is in our debt, after having placed the net 
 proceeds of this sale to his credit. Can the bank compel us to pay 
 the amount ? 
 
 A. The above is not an agreement to accept or cash a draf'^ 
 for any given amount, and only such an agreement can rende) 
 the drawee liable to the payee in case the draft is refused. 
 
 29. 1. In case of a commission house taking an order for future de* 
 Hvery and the manufacturer refusing to make the goods. 
 
 2. In case of the above order, and the price advancing, the manu- 
 facturer refusing to deliver goods at the lower price. 
 
 3. In case part of the goods delivered from stock and the manu- 
 facturer asking an advance price for the balance of the order. In the 
 above cases how far is the commission agent responsible for the manu- 
 facturer's shortcomings ? 
 
 4. "What is the difference if the above orders are accepted in writing 
 or are only verbal, the facts not being questioned ? 
 
 A. 1. A commission house which accepts an order of this 
 kind binds itself to deliver the goods at the price specified, and 
 is liable to the buyer for reasonable damages in case of failure. 
 How far the manufacturer is also held will depend on the ques- 
 tion whether the commission house acted within the scope of its 
 authoritv. 
 
 10 
 
146 COXSIGXMENT AND COMMISSION ACCOUNTS. 
 
 2. Tlic goods are to be delivered and paid for at the contract 
 price without regard to the state of the market. 
 
 3. Tlie commission agent is bound to see tliat the entire con 
 tract is performed. 
 
 4. If the contract is merely verbal it is not binding in law 
 until some consideration has been received, or part of the goods 
 have been delivered. But that will make no difference we 
 should liope, witli any commission merchant in Xew York. 
 There may be a dispute as to the terms of a verbal contract ; but 
 if tlie terms are admitted by both, the man who is able but un- 
 willing to keep his word because he is not legally held for it, 
 would steal if there Avas no law against it. 
 
 30. A commission agent in the city sells the goods of a country 
 manufactory for which it is agreed he shall charge 5 per cent, on the 
 gross sales commission, and 3 per cent, for guaranteeing the payments. 
 In course of time the commission agent fails, and in settling up his 
 bankrupt estate the manufacturer is charged with the 3 per cent, for 
 guarantee. 
 
 Is the agent entitled at law to any of the guarantee money unless 
 the account is fully adjusted ? 
 
 If entitled to the guarantee money on any of the account is he 
 entitled to it on that portion which he fails to settle ? 
 
 A, The manufacturer's account is subject to the charge for 
 guaranty, although the guaranty proved to be of little value. 
 
 31. H., of Augusta, contracts with L. & W. of Boston, to sell 
 goods of their manufacture for a certain per cent., and he (H.) agrees 
 to advance his note for one-half of the value, and to make cash ad- 
 vances for about one-sixth of the value to cover expense of freight &c. 
 There is a clause in the contract which says if any stock should re- 
 main unsold (at the end of the season) the same continues to be the 
 property of L. & W." A portion of the stock does remain unsold, and 
 is withdrawn by the manufacturers (L. & W.) from his (H's) posses- 
 sion. Is H. entitled to any commission on the portion withdrawn, and 
 how much ? or what proportion of the original commission ? 
 
 A. The New York Chamber of Commerce in the rates of 
 commission published annually under its authority decides in 
 case of such withdrawal that full commission shall be allowed up 
 to the extent of the outstanding advances, and half commission 
 on the remaining value of the consignment withdrawn. 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. UT 
 
 32. A Liverpool commission house telegraphs us offering to guar- 
 antee lid. for a certain grade of goods ; this house obtains ll|d. 
 Should the account sales be rendered as at the former or the latter 
 price ? 
 
 A. If the house receives the goods on commission, the guar- 
 anty of a certain price does not authorize the consignee to return 
 sales on that limit provided the goods are sold for more. The 
 account sales must be for at least the amount guaranteed, and 
 also for as much more as the goods may bring. 
 
 33. If a firm of commission merchants dissolves co-partnership, 
 and there remain on hand at time of dissolution certain consignments 
 which the consignor desires should be turned over to A, the one part- 
 ner, can B, the other partner, claim any commission on these when they 
 are sold or before ; in fact, is B entitled to any compensation of com- 
 mission on such consignments ? 
 
 A. The firm of A & B can claim, according to the Chamber 
 of Commerce rules, full commission to the extent of their advan- 
 ces, and half commission on the remainder of goods withdrawn by 
 consignor. Of course B can exact, if he chooses, his share of 
 such a claim. 
 
 34. A B of this city consigned for sale hhds. tobacco to C D, 
 
 a factor in yowr city, and drew against them. The factor sold enough 
 tobacco to reimburse himself for advances and then failed, making an 
 assignment. Without the knowledge or consent of the owner and 
 consignor here he hypotliecated the tobacco for money. The owner 
 here owed him nothing when he failed except perhaps an item of 
 freight ; now, can he, the consignor here, claim and obtain the tobacco 
 in kind from the assignee in your city ? If not, upon w^hat principle 
 of law, justice or equity can the property of the consignor here be 
 taken and applied to the payment of other persons' debts ? This is 
 important ; for if it can be done in your city and State (N. Y.), 
 Western shippers have no security and ought to know it at once. 
 
 A. The unrestricted right to sell always includes the right to 
 hypothecate. It is better for the owner that the consignee 
 should hypothecate for less than value, than that he should sell 
 outright, and put the money in his pocket, for the consignor 
 can now recover his property by repaying the advance. It is a 
 very plain principle of law that the consignee of goods taken to 
 sell on commission may borrow money on them, and if any one 
 should suffer by his act, it is certainly equitable that the con- 
 
148 CONSIGNMENT AND COMMISSION ACCOUNTS. 
 
 signor who trusted him witli so mucli i)ropcrtv witliout any 
 security, should stand in the gap. 
 
 The hiw of this State (N. Y.) provides that every factor or 
 agent who shall be entrusted with any mercliandise for the pur- 
 pose of sale, or as security for any advances to be made or 
 obtained thereon, shall be deemed to be the true owner thereof 
 so far as to give validity to any contract he may make with any 
 other })erson for its sale, or disposition of the whole or part of it 
 for any money advanced, or negotiable instrument or other 
 obligation in writing given by such other person upon the faith 
 thereof. 
 
 35. S & Co., of London, desire to represent m their city the firm 
 of A & Co., of New York, stating that they are acquainted with the 
 business in whicli A & Co. are engaged, and that they can get orders 
 for the goods produced by A & Co., etc. A & Co., after ascertaining 
 that S & Co. are in good standing, give them the desired agency, and 
 at their solicitation authorize them to charter vessels to be loaded with 
 such goods as they can sell. In due time they charter and send over 
 three vessels, directing A & Co. how to load them. The first two 
 vessels arrive and are promptly loaded according to instructions ; 
 cargoes go forward and are sold satisfactorily. The third vessel 
 arrives, and it is found that the cargo ordered cannot be loaded in her, 
 •by reason of her peculiar build and formation, which is of iron and 
 without ports, which makes her entirely unsuited for the trade in 
 which A & Co. are engaged. A & Co. not wishing to embarass S & 
 Co. by dechning to acknowledge the charter, cable them the situation, 
 and S & Co. send back instructions how to load, which instructions A 
 & Co. comply with, thinking, however, that their goods will be badly 
 damaged, if not made unsalal)le, by the handling necessary to get them 
 in said unsuitable vessel, but trusting to the judgment of S & Co., and 
 as the best way to get out of the trouble, cargo goes forward without 
 instructions from A & Co. S & Co. store it, where it remains for 
 several years. S & Co. report that it cannot be sold because goods are 
 unsuited for the market. It is finally sold at a heavy loss. Mean- 
 while A & Co. ascertain that while S & Co. are honorable men and in 
 good standing, that they were not acquainted with the particular 
 branch of business done by A & Co. Therefore A k Co. claim : 1. 
 That the unfortunate charter was made through want of knowledge on 
 the part of S & Co. as to the kind of vessels required. 2. That they 
 (A & Co.) would have been justified in refusing to acknowledge the 
 charter, but did acknowledge it and load vessel, only to save the 
 credit and standing of S & Co. 3. That on arrival cargo was stored 
 for several years, until the charges amounted to the value of it through 
 the want of knowledge of the business by S & Co. 4. That as the loss 
 all arises from the unwise action of S & Co., that they should stand 
 the loss. Are we right or not f 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 149 
 
 A. If S <fc Co. were very sensitive to moral ol)ligations they 
 might, and probably would, feel compelled to contribute part or 
 all of the loss sustained in the matter, but as we understand the 
 relations of the parties from the above story, the London agents 
 are not legally bound to bear a dollar of the burden entailed by 
 their want of judgment in the premises. 
 
 36. A consigns to B (who is a commission merchant) 100 barrels 
 of flour on sale ; if B sells the flour and appropriates tlie funds in his 
 business or otherwise, and fails, is he liable to a criminal prosecution 
 for such appropriation ? 
 
 A. A commission merchant, in this State (N. Y.), who fails 
 to pay his consignor, but has otherwise conducted his business 
 fairly and with no intent to defraud his creditors, is not liable 
 to criminal prosecution. 
 
 37. We sell for a manufacturer say a certain amount of dry goods 
 on commission, giving him our notes as advances on the same. We 
 also sell to him direct the raw material, taking his note in payment. 
 Suppose the manufacturer should fail, the query is, whether our notes 
 given him, being advances on merchandise consigned to us, could 
 offset what notes we held of his, whether he is in bankruptcy or not ? 
 
 A. As between the two parties, notes or other claims legally 
 due from either side, and held by them, may be pleaded in offset 
 when it comes to a settlement. But if the notes are negotiable, 
 and the manufacturer, as is most likely, has passed the mer- 
 chant's obligations to other parties, our correspondent will be 
 obliged to meet his own notes and will not be able to collect the 
 debt from his insolvent consignor and customer. The better 
 way, therefore, is to advance the supplies instead of notes, and 
 then the goods consigned will afford security. 
 
 CONSIGNOR. 
 
 38. B having failed, made an arrangement with C who agreed to 
 execute the orders for shipment of cotton and grains which B was in 
 the habit of receiving from D, his special agent in London. It was 
 further agreed that the commissions on the shipments would be equally 
 divided between B, C, and D. The orders obtained from different 
 parties in London were taken by D in C's name, but always addressed 
 to B. After several shipments were effected, D proposed to C to do 
 the business direct with him, and the proposal was accepted. B claims 
 now his share of commissions from C on all business transacted under 
 the new arrangement, alleging that it was through him that became 
 
150 COXSIGXMEXT AXD COMMISSION ACCOUNTS. 
 
 acquainted with D. C resists the claim on the ground that it was not 
 he but 1) wlio proposed the new arrangement. W'liich is right ? 
 
 A. If C, on receipt of D's proi)osal, went directly to B and 
 terminated the first engagement, lie lias a right to go on with 
 the second without sharing his gains with B ; but if he went on 
 'with the business, leaA'ing B to infer that the commissions were 
 to be divided, the latter had the right to exi)ect his share. 
 
 39. A is a commission merchant in New York holding goods on 
 consignment from B ; if A does not pay his rent or should fail, are 
 B's goods subject to attachment or levy for payment of A's rent or 
 other debts ? 
 
 A. A's goods are not subject to B's debts, unless it may be 
 for taxes on real estate, and all the property found on a place is 
 liable to be seized fur this obligation. 
 
 40. A ships a thousand barrels of flour to B, and B gets tho 
 necessary funds from the bank to make the agreed advance of three- 
 quarters of value on bills of lading, which are changed for warehouse 
 receipts on arrival of the flour. 15 meantime makes an assignment to 
 a creditor of remaining one quarter, which A claims as his property. 
 Who is the owner of balance of one quarter when the flour is sold, A 
 or the creditor ? 
 
 A. If B hypothecated the flour or obtained an advance upon 
 it, the lender would have a lien upon it, in this State (N. Y), 
 since it was in B's custody with full power to sell ; but an assign- 
 ment to cover a previous debt would only carry B's interest to the 
 assignee, and w^ould not transfer A's title. Hence A, in such a 
 case, by reimbursing advances and charges, can resume pos- 
 session. 
 
 41. What is the customary charge when an account of a manu. 
 facturcr of dry goods is changed from one commission house to 
 another ? 
 
 A. The rule adopted l )y the Chamber of Commerce establishes 
 full commission on the value of the goods withdrawn to the 
 extent of advances made, or obligations incurred, and half com- 
 mission on the remainder. The custom is widely various. On 
 valuable dry goods, not too bulky, 2| per cent, on advances, and 
 1 per cent, on the remainder, is the more common charge. But 
 in bulky goods of low cost, the latter rate is not sufficient to give 
 
CONSIGNMENT AND COMMISSION ACCOUNTS. 151 
 
 a fair remuneration ; and if the house relinquishing tlie account 
 has spent any time upon the goods witlidrawn, altliough without 
 selling them, it is certainly entitled to more than this. 
 
 42. Where goods are consigned and advances made, what are the 
 legal charges to be made when consignor transfers the goods ? 
 
 A. The legal charge is only what is customary and reason- 
 able ; and this is not regulated by statute. The Chamber of 
 Commerce have established rates recommended by this body, 
 and in the absence of agreement or other modifying conditions 
 these would govern in a suit at law. In this table, to be found 
 in eacn annual report, the Chamber authorize a charge of full 
 commissions to the extent of all advances and obligations in- 
 curred, and of half commissions on the remaining value trans- 
 ferred. 
 
 43. One of our consignors who has had large advances on his 
 goods, desires to transfer the balance of his stock to another commis- 
 sion house. His goods are irregular and liable to be claimed on. 
 Several cases we have sold remain unpaid for. On whom have we 
 redress in the event of just claims, we having delivered the goods as 
 requested to our neighbors, receiving their check for advances and 
 charges ? 
 
 A. Whatever legal recourse our correspondent may have 
 from just claims to be allowed must be referred to the owner and 
 not to the new agents. He has no claim upon them unless they 
 voluntarily assume the res})onsibility. 
 
 44. I am a manufacturer, am placing my goods in the hands of a 
 party to sell for 5 per cent, commission, I assuming all risks of the 
 accounts. Should the party selling my goods fail do I come in as the 
 rest of the creditors, or is the concern bound to pay me in full ? The 
 goods are invoiced by tliis party as his, or upon invoices bearing his 
 name. Again, should the party advance me money on my goods and 
 fail before the sale of the same, does it in any way prevent my collect- 
 ing the full amount due me ? 
 
 A. It is now settled that the sum due from a commission 
 house to his consignor is to be classed with other obligations in 
 the division of a bankrupt's estate. If the debtor has part of the 
 goods on hand on which advances have been made the owner 
 can take them back, repaying whatever is due the estate. 
 
152 CONTRACTS. 
 
 45. A imports ten cases of a fabric for B. who agrees to pay liim 2^- 
 per cent commission on the cost of the goods laid down here. The 
 goods were imported and a duty of 35 per cent, was imposed by the 
 customs authorities, after due examination by appraisers, entry duly 
 liquidated, cost made up, to which commission was added, and 13 paid 
 A for the goods. Six months after the United States makes a claim 
 on A for an additional ten per cent., on the plea of an error by the 
 appraiser as to component parts of the fabric. A therefore makes a 
 claim on B for the ten per cent. B denies his legal liability to pay 
 any sum beyond that first paid. The question involved is, is B legally 
 liable to A ? By the peculiar equity of the United States customs I 
 believe A is liable for that ten per cent. 
 
 A. The contract having been based on the cost of the goods 
 laid down here, a settlement founded on a mistake as to the cost 
 can be reopened and adjusted according to the fact. The im- 
 position of additional duty after account rendered is equivalent 
 to a mistake in the reckoning. A's claim against B for the ad- 
 ditional payment is not legal " in the technical sense, because 
 such readjustments belong to equity jurisdiction ; but as the same 
 courts in this State (N. Y.) exercise both law and equity powers, 
 this is a distinction without a practical difference. We think B 
 must pay the claim. 
 
 46. "What status have goods which are sent on memorandum to a 
 merchant who subsequently fails, and who claims the same had been 
 sold by him, although the sender had not rendered a regular bill of 
 sale for the same at the time of failure ? 
 
 A. The usages of the trade in this city ( Nc Y.) regard the 
 property, in memorandum sales, as remaining in the seller, but 
 if, as in the above case, the buyer has actually parted with the 
 goods to a third person, Ave think it would be difficult to support 
 this understanding in law. As, between the original seller and 
 buyer, the title would probably be held to remain in the former, 
 according to the implication of the memorandum, until transfer- 
 red by the rendition of a regular bill of sale, or the charging up 
 of the a'oods. 
 
 CONTRACTS. 
 
 1. A writes B for his price of certain goods. B repHes 50 cents. 
 A replies it is too hieh, and offers 48 cents. B replies, declining the 
 offer and holding at'so cents. A finally writes B, accepting the goods 
 at 50 cents, but in the meantime B had evidently reconsidered the 
 matter, and wrote A accepting his offer of 48 cents. The letters 
 
CONTRACTS. 
 
 153 
 
 crossed each other, reaching their destination on the same day, although 
 A's was dated one day before B's. 
 
 A. The precise case here described is not considered in the 
 latest American Edition of Benjamin on Sales, and it is a mod- 
 erately reasonable inference that it has not been adjudicated ; 
 facts necessary to constitute a contract by letter are there dis- 
 cussed at some length, and the author of the treatise is well 
 informed respecting the decisions on both sides of the water. 
 From the two leading English cases of Cook vs. Oxley, 3 T- R., 
 653, and Adams vs. Linsdeil, 1 B. & Aid., 681, Mr. Benjamin 
 deduces this conclusion, viz. : " That a contract becomes com- 
 plete only when the mutual assent of the parties concurs at the 
 same moment of time ; and that no number of alternate offers and 
 withdrawals, refusals, and acceptances can ever suffice to con- 
 clude a bargain." Mr. Benjamin remarks that ''the cases that 
 arise in attempts to contract by correspondence present at times 
 very singular complexity," and the case before us is one of tliese. 
 If A's acceptance had been mailed a day in advance of B's recon- 
 sidered offer, we should say that his acceptance closed the con- 
 tract, and the reduction subsequently offered by B, without 
 knowledge of the previous acceptance, would have been without 
 consideration and not binding on him. After considerable study 
 of the difficulties surrounding any other solution of the question, 
 we are disposed to believe this must be the conclusion as it 
 stands ; that the contract was closed at 50 cents when A's 
 acceptance was mailed, and B's later offer must be ruled out 
 altogether. 
 
 2. A mails B a letter saying "I accept your offer." Before B 
 receives the letter he gets a telegram from A saying I will not accept 
 your offer, I hereby cancel my letter this date." Can B hold A by 
 the letter. 
 
 A. The telegram duly delivered before the letter, recalls and 
 cancels the letter. 
 
 3. In consideration of a certain sum of money, C & Co. agree to 
 furnish and set in a building one furnace with the necessary registers, 
 tni pipe and smoke pipe, for B k Co. The walls of the above men- 
 tioned building were partially completed, when a gale blew down a 
 portion of the same, thereby destro^ng part of the hot air pipes. C 
 
154 CONTRACTS. 
 
 & Co. replaced the damaged ones and now send in a bill for extra 
 pipe, which B & Co. decline to pay, claiming that the destruction of 
 the walls was an act of Providence, and that they were not liable for 
 any damage done to C & Co's materials until the entire work was 
 finished according to contract. State if C & Co. can collect their 
 claim ? 
 
 A. If the walls were not negligently constructed or left with- 
 out protection, B & Co. cannot be obliged to make good the loss 
 of C & Co., it having been caused by inevitable accident for 
 which no one is responsible. Thus, where a mill-dam was built 
 upon a proper model, and the work was faithfully done, yet it 
 broke and destroyed a neighboring dam and mill, the owner of 
 the first dam was held exempt from liability. (Livingston vs. 
 Adams, 8 Con., 175.) B <fe Co. are therefore right in declining 
 to pay for the extra pipes unless they can be justly charged with 
 negligence. 
 
 4. A house buy through an agent of a New York house some 
 goods. The agent on the same day writes to the New York house 
 that he has sold (no contract being made) so and so, but the firm 
 answer back by return mail that the goods are not to be had in the 
 market, and offer other brands in the same lines at lower prices. The 
 house here do not want them, and claim damages on the ground that 
 the goods were worth more. Can they be successful (under the cir- 
 cum stances that the goods were not to be had and not prices put on 
 it) if they bring suit against the agent or the New York firm ? 
 
 A. If the agent made a legal contract to deliver a certain 
 description of goods, then the purchaser can tender the payment, 
 and demand the delivery. If the agent was unauthorized to sell, 
 he can be held, although the house could not. But without an} 
 legal contract a verbal acceptance of an order would create no 
 legal obligation, and under the circumstances, no moral obliga- 
 tion on the part of either agent or principals. 
 
 5. I make a contract for three monthly shipments of goods by sail 
 from Providence to Liverpool, beginning in March. Now 1 put the 
 goods in Providence ready for delivery in March, but no vessel can be 
 secured to take it ; consequently I put the March and April shipments 
 together and ship in April. Does my failure to ship in March release 
 the buyer from his obligation to take the goods ? Or is the contm- 
 gency of securing a vessel implied in a contract to ship by- sail? 
 
 A. The contract is broken by the failure to secure a vessel. 
 The seller undertakes not only to have the goods ready for ship- 
 
CONTRA CTS. 
 
 155 
 
 ment, but also to ship them, and this is an agreement that a 
 vessel shall be found to take the cargo. 
 
 6. An owner of a sawmill having cut up some logs in boards 
 wishes to get his pay, but the owner is not responsible. Now can the 
 sawyer hold the lumber as. against the owner or against the claims of 
 his creditors, on the principles of the mechanics' lien. How can he 
 raise the money from the lumber if he can hold ? Can he sell ? If so, 
 under what process ? Can he put up the lumber to save it from decay 
 and get his pay for his trouble ? 
 
 A. If the sawyer has the lumber in liis possession, as we infer 
 from the statement, he can hold it until he is tendered the cost 
 of his labor upon it. If this is not done as soon as he desires, 
 he can notify tlie owner to pay him his charges and remove it. 
 If the owner declines, he may take care of it at any reasonable 
 expense ; but we doubt whether after suitable notice to all con- 
 cerned he may sell enougli at public sale to reimburse himself. 
 Story says : " A mere right of lien is not understood to carry 
 with it any general right of sale to secure an indemnity." And 
 in a note : We think the rule is generally stated by the text 
 writers, that a party liaving a lien only, without a power of sale 
 super-added by agreement, cannot lawfully sell the chattel for 
 his reimbursement." Story on Bailments, 311, and note. 
 
 7. I have read that " contracts made on Sunday cannot be enforced," 
 and that "a note drawn on Sunday is void." You will greatly oblige 
 a reader by stating if such is the law. 
 
 A. A contract which is made in violation of the express pro- 
 visions of the Sunday laws, in any state, is void, like any other 
 illegal or prohibited contract. The laws differ in different states, 
 and that which is illegal in one state may be legal in another. In 
 this state ( N. Y.) a contract which has for its consideration the 
 doing of ordinary work or labor such as is forl)idden, would be 
 void ; but in Boynton vs. Page, 13 Wend., 425, it was held that 
 a private transfer of personal property, or any mere private con- 
 tract " which did not violate the Sunday law, or tend to produce 
 a violation of the public order and solemnity of tlie day, is not 
 void. A promissoiy note dated on Sunday, if not signed and 
 delivered that day, is valid ; and if actually signed on Sunday, 
 it has been declared to l)e valid, no matter how stringent the 
 Sunday law, if delivered on a secular day. 
 
156 
 
 CORPORA TIOXS. 
 
 8. A broker sends us a contract ( by his boy^) we take it, but do 
 not mark it accepted," nor are contracts exchanged with the party 
 from whom the goods «ire purchased. 
 
 Does our taking the contract signify our willingness to abide by its 
 terms, or must it be indorsed and exchanged ? 
 
 A. " The broker's signature to the notes will satisfy the 
 statutes." " It is not uncommon for the principals to sign their 
 approval upon the note to be handed to the other party, but this, 
 although convenient as settling the question of the broker's 
 authority, is not necessary to give validity to the contract if the 
 broker's authority can be shown by other means." " By retaining 
 the note without objection, either party ratifies the contract set 
 forth therein. By returning it at once, with his dissent, he repu- 
 diates the contract ; and his liability tlien depends, not upon 
 what the broker has done, but upon the authority which he actu- 
 ally gave to the agent." In the case cited our correspondent 
 retained the broker's memoranda without objection, and is as 
 liable as if he had written the word " accepted " upon it and 
 returned it. 
 
 9. Can damages be recovered for violation of a verbal contract or 
 agreement ? 
 
 A. Where a verbal contract is legal and binding, and can be 
 proved its violation is subject to the same penalties as the viola- 
 tion of a written agreement. In this state ( N. Y.) a verbal con- 
 tract for the sale of goods for the price of $50 or more is void 
 unless the buyer accepts delivery in whole or part, or makes part 
 payment, or gives memorandum in writing. 
 
 COEPOEATIONS. 
 
 DIRECTORS— OFFICERS— STOCKHOLDEES. 
 
 1 , Is it necessary that the president and treasurer of a company 
 organized under the law of the State of New York, dated February 
 IV, 1848, and amendments to the same, should be residents of the 
 county and city where the principal or financial office of the company 
 is located. The factory of the company is located in another State. 
 Also, is it necessary that the books of the company should be kept at 
 the principal office in this State, or can they be kept at the factory ? 
 I have consulted two lawyers regarding the above, but they are not 
 clear in their answers, except that they say the books can be kept at 
 the factory. 
 
CORPORATIONS. 
 
 157 
 
 A. In order to incorporate under the act it is necessary that 
 a majority of the trustees shall be citizens of this State. (Section 
 3, act of 1848.') If in addition it is intended that part of the 
 operations of the company sJiall be carried on in another State 
 or county, then the president and treasurer must also be actual 
 residents of the town or city in which the ])rincipal office of the 
 company within this State is located. (Laws of 1861. chapter 
 170, section 2.) At this principal office must be kc])t, open for 
 inspection every day except Sunday and the 4th of July, the 
 bock containing the list of the shareholders. (Section 25, act 
 of 1848.) There is no requirement as to the company's books 
 of account, which may therefore be kept at the factory or else- 
 where, at pleasure. 
 
 2. Please let us know in what cases directors in stock companies in 
 New Jersey and New York are liable for the debts of the concern ? 
 
 Ao In this State the stockholders are liable in all cases unless 
 such liability is limited by some particular statute. In banks 
 they are liable for an amount equal to their stock. In certain 
 joint-stock companies they are not liable if the stock was duly 
 paid in, and the concern is legally managed. But the question 
 is too sweeping for a specific answer. In New Jersey the field 
 is equally wide. 
 
 3. Please inform me as to the liability of a director, bond and stock- 
 holder in a mining enterprise organized under the laws of the State of 
 New York. The stock is unassessable. In case the enterprise should 
 prove unsuccessful, I would like to know what would be the responsi. 
 bility of a party holding above conditions, if the company should con- 
 tract debts, etc. 
 
 A. If the stock is all paid up, the annual statement duly 
 published, and the law fully complied with in other respects, 
 there need be no special liability in the cases described. The 
 bondholder would only be liable to lose his investment. The 
 stockholder and director may each be liable in certain contin- 
 gencies hinted at above. 
 
 4. A mining company is incorporated here under the laws of this 
 State (N.Y.) in 1863, for 40 years. It became defunct in 1869, so far 
 as defrauding in the payment of interest on its bonds and closing its 
 office, and returning the mining property it hold to the original owner 
 
158 
 
 CUliPuRATlONS. 
 
 up on his giving to the officers certain bonds. The officers failed to 
 comply witii the law relative to filing annual statements, and before 
 closing their office here the trustees made and filed a certificate repre- 
 senting that the capital stock had been fuUij paid in, whereas only a 
 part had in reality been paid, it is believed. The book| and papers of 
 the company have been carried away and no report ever made to the 
 stock or bondholders. Are the trustees, who have since lived in Penn- 
 sylvania, still liable to the bondholders in a penalt}^ as prescribed by 
 statute for neglecting to file the statement of the company's affairs as 
 required, by suit brought there, or does the statute of limitation bar an 
 action ? Could an innocent holder of these bonds who had been de- 
 ceived in regard to the certificate stating that the stock had been fully 
 paid in, and of the statement of the secretary that the bonds are 
 good," after the fact of their default, etc., have the trustees extradited 
 for fraud ? What is the best course to be pursued in reaching the 
 trustees under these circumstances ? 
 
 A. Through the lapse of time, no criminal action could now 
 be maintained, and therefore the extradition of the i)arties could 
 not be demanded. In all probability the civil remedy is also 
 barred by the statute of limitations ; tliougli if the trustees have 
 resided continuously without the State since their liability ac- 
 crued, or the fraud was discovered, and could now be served w4th 
 process within it, they might be made to respond. Proceedings 
 in Pennsylvania are barred by the statute of limitations in tliat 
 State. 
 
 5. Can a deed from a company, signed by the president, be acknowl- 
 edged before a commission or notary w^ho is an officer, treasurer of 
 the company ? Will it make any difference whether or not the notary 
 is a stockholder in the company ? 
 
 A. Proffat, in his work on Notaries, states the rule to be that 
 " wdiere the officer is a party in interest he cannot take the ac- 
 knowledgment." An officer, member, or stockholder of a ])rivate 
 corporation lias been decided to be a party in interest, and prior 
 to tlie change in our State law (N.Y.) permitting parties to testify, 
 could not be admitted as a witness in a suit to which the corpora- 
 tion was a party. The statute, however, merely removes the dis- 
 qualification as witness, and if Proffat 'is correct in his statement, 
 the incompetency to act officially as notary or commissioner 
 would seem still to exist, though w^e cannot find that the point 
 has been directly determined. 
 
 6. If the president of a company organized under the manufactur. 
 
/ 
 
 CUllPURA TJOXS. 159 
 
 ing and mining laws of 1848 should sell, assign, and convey all its 
 property and assets, and thereby inflict political death upon it, without 
 the knowledge or consent of a single trustee, director, or stockholder, 
 would such sale and assignment be legal or wholly illegal ? 
 
 A. A conveyance by the President of the property of a joint- 
 stock company, giving a prima facie title to the purchaser, may 
 be perfectly legal. Section 3 of the act of 1867 provides tliat con- 
 veyance of real estate, etc., shall be made to the president, and 
 " such president, and his successors from time to time, may sell, 
 assign and convey the same, free from any claim thereon against 
 any of the shareholders, or any person claiming under them, or 
 any or either of them." 
 
 7. Is there any law providing for the publication of the names of 
 the trustees or directors of life insurance companies and other corpora* 
 tions ? 
 
 A. There does not appear to be, in any of the statutes author- 
 izing the formation of corporations, any provision intended to 
 keep the public informed relative to changes in the boards of 
 directors or trustees. In the case of insurance companies the 
 law passed prior to the existence of the insurance department re- 
 quired the names of the original incorporators to be tiled in tlie 
 comptroller's office, and published in the State paper. In the 
 general acts relating to mining, mechanical, and miscellaneous 
 corporations, the names of the trustees for the first year must be 
 filed in the offices of county clerk and secretary of State, and 
 thereafter the annual reports, to be likewise filed, must be signed 
 by a majority of the trustees. But if only a majority sign, there 
 does not seem to be any method except such as the law provides 
 for procedure against unknown defendants, to ascertain the names 
 of the other trustees. In a suit, no doubt tlic court would re- 
 quire an exhibition of the corporation books, but as the enabling 
 acts all contemplate the individual liability of trustees or direct- 
 ors in certain cases, it is a manifest oversiglit that there should 
 be no readier way tlian this of ascertaining who tlie individuals 
 are in case of an attempt at concealment as described above. 
 
 8. In the first week of January, 1879, a stock company, electing one 
 of its trustees as secretary by ballot, at a certain salary for one year, 
 now find that it is better for the interest of the company, to have 
 
160 
 
 CORPORA rioxs. 
 
 another in his place. In case he refuses to resign, how may his removal 
 be effected ? If it could be shown that he had not kept the books of 
 the company, but has hired another to do the work, removing the books 
 from the office, would that not be sufficient cause ? The company also 
 find that he is subject to epileptic fits, and he carries the keys of the 
 safe and office door, thus liable at any time to put the company to 
 great inconvenience, if not loss, by having the keys stolen. 
 
 A. There are very few precedents for the removal of officers 
 of private corporations, but unless there is some special provision 
 in the charter, the by-laws, or the act under which the association 
 is organized, the various decisions which have been made in the 
 case of municipal corpora.tions, bear against tlie sufficiency of the 
 reasons above stated to constitute a cause for removal. 
 
 9. Is a person liable for the debts of a corporation if contracted 
 after he has disposed of his stock ? If so, how long thereafter will he 
 be liable, and what means are there to stop the officers from bringing 
 the company in debt at the expense of a non-stockholder ? 
 
 A. Unless made specially liable by charter or other provision 
 of law, a former stockholder would not be personally liable for 
 debts contracted after he had disposed of his shares. 
 
 10. Can the stockholder in a company relieve himself from ah 
 liability on its account by making a transfer of his stock to the com. 
 pany while it is solvent ? 
 
 A. The difficulty in determining the above que stion in a posi- 
 tive manner grows out of the silence of our state statutes on the 
 point, and the fact that the precise case, being one not likely often 
 to arise, has never to our knowledge, been litigated. The debts 
 of solvent corporations are generally paid without giving occa- 
 sion to such a controversy. But since a solvent company may 
 become insolvent, leaving shareholders in the exact position 
 stated by our correspondent, the question is one of interest. The 
 matter of solvency at the time of the transfer aside, it has been 
 lield in New York that " if a charter provides generally that the 
 stockholders shall be personally liable for the payment of corpo- 
 rate debts, and that persons having demands against the comi)any, 
 who have obtained judgment against the corporation, may sue 
 any stockholder, the suit can only be brought against such as 
 were stockholders when the debt was contracted, and not those 
 who became so afterward." (Angell & Ames on Corporations, 
 
CORPORA 1 TONS. 
 
 161 
 
 sec. 617, citing Moss v. Oakley, 2 Hill, 265.) The question in 
 this case arose under a charter, the personal lia])ility clause oi 
 which was in the same indefinite form as to the point raised, as 
 the similar clauses in our subsequent general acts. The point 
 was decided in the Court of Errors ( McCullough v. Moss, 5 
 Denio, 567). Senators Lott and Putnam, who gave oinnious on 
 the prevailing side, concurred with the view stated above, while 
 Senators Barlow and Talcott, who voted with the minority, 
 thought that only stockholders at the time of suit brought should 
 be held. In Massachusetts and Connecticut, on the other hand, 
 the latter opinion has been accepted, and shareholders at the 
 time the debts were contracted, but who had transferred their 
 stock before suit was brought, were held free from liability. 
 (Middletown Bank v. Magill, 5 Conn., 28; Child v. Coffin, 17 
 Mass., 64.) The doctrine in these last cases, so far as bona fide 
 transfers of stock in a solvent corporation are concerned, is so 
 much more agreeable to equity tlian the other that we are 
 inclined to think our own state ( N. Y.) courts would distinguish 
 the case presented from those previously decided and permit it 
 to fall under the rule in Massachusetts and Connecticut. Where 
 there is an evident purpose to defraud creditors by the transfer, 
 however, we have no doubt the original stockholder will continue 
 to be held to his liability. 
 
 1 1 . Has a stockholder of a bank the right to examine the books 
 and assets of the bank at the annual meeting of stockholders, or at any 
 other time, or is this an exclusive right of the directors of the bank ? 
 
 A. We suppose the writer refers to the stockholders of the 
 national banks. Every one owning shares has the right to 
 inspect the list of the names and residence of all the share- 
 holders in the association, and the numbers of shares held by 
 each," which must be kept in the office where its business is 
 transacted. If any further examination is required, it is to be 
 made by " a suitable person or persons " to be appointed by the 
 Comptroller of the Currency, with the approbation of the Secre- 
 tary of the Treasury. 
 
 12. A party holding stock in an insurance company or bank (not 
 national bank) pledges said stock as collateral for a loan from the com- 
 
 11 
 
162 
 
 CORPORA TIONS. 
 
 pany or bank. At a meeting of the stockholders the party wlio has 
 pledged his stock as above stated goes into the meeting, and is inform- 
 ed that he cannot vote stock so pledged. 
 
 A. Corporations are required to file a plan of incorporation, 
 and the only regulation relative to voting shares is with respect 
 to the first meeting for organization, at which, it is said, " the 
 subscribers shall vote as prescribed in the plan of incorporation." 
 Battle's Revisal Laws of N. C, tit. Cor])orations. 
 
 In ex parte Holmes, 5 Cowen, 426, the shares were held by 
 trustees for the benefit of the insurance company, and the 
 Supreme Court of New York said they could not be voted at all. 
 " It is not to be tolerated that a company should procure stock, 
 in any shape, which its officers may wield to the purposes of an 
 election." 
 
 The joint stock companies in this state ( N. Y.) are allowed 
 by law to vote upon stock that has been pledged, but Jiot trans- 
 ferred. 
 
 13. Do the first trustees of a company incorporated under the laws 
 of this state ( N. Y.) hold office for a year from the date of organiza- 
 tion regardless of a by-law, subsequently adopted, fixing an earlier 
 date for the annual meeting and election ? 
 
 What is the legal notice, by advertising, required of such annual 
 meeting ? 
 
 Have stockholders a right to examine the stock ledger or transfer 
 book of such corporation, the by-laws providing that books of accounts 
 shall be open to such inspection ? 
 
 A. The first trustees only hold office as long as the by-laws 
 appoint, and the new board will succeed as these regulations 
 prescribe. 
 
 The law prescribes that the election of trustees shall be at 
 such time and place as shall be directed by the by-laws of the 
 company ; and public notice of the time and place of holding 
 such election shall be published not less than ten days previous 
 thereto, in the newspaper printed nearest to the place where the 
 operations of the said company are carried on. 
 
 The law provides expressly for the stock register, which must 
 show who have been stockholders of the company within six 
 years, their place of residence, the number of shares they hold, 
 when each became the owner of such shares, etc., all alphabeti- 
 
CORPORA TIONS. 
 
 163 
 
 cally arranged, which must be accessible to every stockholder, 
 (and creditor too,) and their personal representatives, during the 
 entire business hours of every secular day. 
 
 14. A stock company is formed with a capital of $20,000 in 200 
 shares of $100 each ; 174 shares are placed : the remaining 26 shares 
 are now held by the company, m the name of the president as trustee. 
 Are these 26 shares entitled to a vote at the annual election of board 
 of directors, and if so can the old board of directors instruct the presi- 
 dent how to vote, or can the president on his own authority use these 
 26 shares to elect a certain ticket? 
 
 A. The stock cannot be voted. In two like cases the election 
 of directors by stock thus held have been set aside by the 
 Supreme Court. ( Ex parte Elippliars Holmes and 10 others, 
 5 Conn., 46 ; ex parte John B. Desdoily and others, 1 Wend, 98.) 
 
 15. R. i. — What action is necessary to protect from personal liabil- 
 ity the stockholders of a manufacturing corporation, working under a 
 charter granted by the State of Connecticut ? 
 
 Is the liability of directors and officers any different from that of 
 stockholders simply ? 
 
 Is there any provision of Rhode Island law whereby the interests 
 and liabilities of stockholders, directors, or officers of a manufacturing 
 company, located in Rhode Island, working under a Connecticut char- 
 ter, the legal requirements of same having been fulfilled, could in any 
 way be affected in case of disaster to the company ? 
 
 Has a creditor of an insolvent corporation, operating under circum- 
 stances above stated, any claim upon anything beyond company's 
 assets ? 
 
 A. Under Rhode Island law the members of every incorpo- 
 rated manufacturing company are jointly and severally liable for 
 all debts, until the whole amount of capital fixed by the cliarter 
 is paid in and certificate thereof filed with the town clerk. The 
 same liability exists in case the annual statement is not filed. 
 The directors are specially liable if a dividend is declared and 
 paid when the company is insolvent. The provisions of the act 
 are not in terms confined to corporations acting under state 
 charters, and it is presumed they would apply to a corporation 
 working under a foreign charter. There is no Rhode Island law 
 that we know of imposing special liabilities upon stockholders of 
 such companies, and under the circumstances stated, tlie ci-editors 
 can take only the assets. 
 
164 
 
 CORPORATIONS, 
 
 Under the Connecticut Joint Stock Corporation Act, the stock- 
 holders are liable to creditors only when the capital has l^een 
 reduced before the payment of its debts. Directors are jointly 
 and severally lialde, however, in case a dividend is declared 
 when the company is insolvent, or tlie payment would make it 
 so, provided they assented to the making of the dividend ; and 
 all officers are liable, in case they intentionally fail to perform 
 any of the duties by law required of them, for all debts contracted 
 during the period of such failure. 
 
 No action could be taken by any stockholder to defeat any 
 liability thus imposed, except to keep watch and see that the law 
 is complied with. 
 
 16. CONN. — Will yon please give a synopsis of the Connecticut 
 Limited Liability act ? 
 
 A. The only individual liability of stockholders under the 
 Connecticut Joint Stock Corporation Act appears to be in case 
 of a reduction or withdrawal of capital when, if the corporation 
 fails to pay any liabilities outstanding against it at the time of 
 such reduction or withdrawal the stockholders may be held to 
 pay in proportion to the number of shares. It is not required 
 that any of the officers shall reside in the state, but if the secre- 
 tary is non-resident the corporation must appoint a resident 
 attorney upon whom process may be served. Annual reports 
 must be made. Directors are individually liable in case of pay- 
 ment of dividend when the company is insolvent, and officers are 
 also made so liable for corporation debts contracted at any time 
 during which they shall fail intentionally to perform any of the 
 duties required of them by law. 
 
 1 7. N. J. — What are tlierights of small stockholders in corporations 
 New Jersey, where the control and management is in the hands of a 
 few? Can the small stockholders with a few shares demand an 
 inspection of the semi-annual reports and take copies of them ? 
 
 A. The New Jersey law does not, so far as we have ascer- 
 tained, provide for the inspection by the shareholders of any 
 other records of the corporation than the stock and transfer 
 books. It does not seem to have been contemplated that the 
 reports especially designed for the information of shareliolders 
 
CORPORA TlOyS. 
 
 165 
 
 should ever be withheld from them. In a proper case, however, 
 no doubt the Court of Chancery would require the exhibition to 
 be made. 
 
 1 8. N. C. — In 1870 the Legislature of North Carolina granted a char- 
 ter to a bank called the Bank of Statesville." The bank was never or- 
 ganized, nor was any record kept of the proceedings. But the cashier 
 appointed certain gentlemen directors of the bank, and another he ap- 
 pointed president, and published the bank in the newspapers as open 
 and ready to transact banking business by taking notes for money 
 loaned and receiving deposits." The gentleman who was appointed 
 president and the directors knew that their names were so used, and 
 the president, supposing the bank had been organized as advertised, 
 took five shares in stock for which he never paid. Some time after- 
 ward the cashier died, and it was ascertained for the first time that 
 there was no bank or organization, and that the cashier had been run- 
 ning on deposits. This was unknown to the president, who did not 
 live in the same town, until after the death of the cashier. There are 
 a great number of creditors and there are no assets in the bank with 
 which to pay them. Is the president liable for the debts of the insti- 
 tution to its creditors ? Should they succeed in making fraud appear 
 in the president, would he be liable above the amount of his stock, or 
 liable at all ? Please give me your ideas on the liability of the presi- 
 dent in any point of view, and if there are any decisions bearing on the 
 point, please refer me to them, or any work bearing on the point. 
 
 A. If any personal liability on the part of the officers of the 
 bank was created by the charter, or the general laws of North 
 Carolina, there is reason and authority for the belief that it could 
 be enforced, notwithstanding the fact that no organization was 
 actually formed. " A defect in the proceedings to organize a 
 corporation is no defense to a stockholder sued to enforce his 
 individual liability, as he has participated in the acts of user of 
 the corporation de facto."" (Eaton v. Aspinwall, 19 N. Y., 119.) 
 In Dooley v. Cheshire Glass Company, 15 Gray, 994, the defense 
 was that the corporation had never been duly organized, but the 
 court refused to allow the proof. The principal of esto])})el is 
 sometimes equitable, as well as technically permissible, and this 
 is such a case. Tlie doctrine does indeed seem to have been 
 somewhat doubted in Whipple v. Parker, 28 Mich., 269, but in 
 Swartwont v. ^lichigan Air Line Railroad Company, 24 Mich., 
 398, it was held that tuere may be such an estoppel. 
 
 The charter of the Bank of Statesville, liowever, imposes no 
 individual liability upon either officers or stockholders. (Private 
 
166 
 
 CORPORA TIONS. 
 
 Laws of X. C, 1869-71, chap. 64.) Neither is the general hiw 
 of the State applicable to corporations, unless a ])ersonal lialjility 
 clause is contained in the plan of incorporation ; l)ut it is wortli 
 while to remember that the officers of an incorporation are per- 
 sonally liable on any contract over Jj?100, which does not state on 
 its face whether or no individual liability exists in the plan of 
 the charter. (Battle's Revisal, 1873, p. 266.) 
 
 We suggest, in default of any remedy in this direction, that 
 persons professing to do business under a charter, not in force as 
 to them or the ])usiness they are doing, are in reality simply 
 partners, and liable as such. One of the objects of incorporation 
 is to escape the personal liability which attaches to a partnership. 
 
 Angel & Ames on Corp., 41.) And if persons associated to- 
 gether in business fail, through their own neglect, to protect 
 themselves by a charter, we do not see why their individual lia- 
 bility does not remain, as if no pretense of a charter had been 
 put forward. Neither the president's ignorance nor his failure 
 to pay for his shares would in our opinion affect his responsi- 
 bility, except as bearing on the question of fraud. 
 
 19, OHIO. — The writer was the owner of $1,000 of the capital stock 
 of a manufacturing company. On March 25, 1875, the company issued 
 bonds amounting to $31,000 ; on January 26, 1876, Mr. Blank pur- 
 chased the $1,000 stock of the writer in full knowledge of the existence 
 of the bonds, and after making inquiries of the officers of the company 
 as to the probable condition of the factory. In the same year the con- 
 cern stopped running, and the holders of the bonds have foreclosed, and 
 the factory is to be sold by the sheriff for their satisfaction. The stock- 
 holders will be assessed for the payment of the bonds ; on whom will 
 it fall, the writer or Mr. Blank ? 
 
 A. The Ohio courts say that a stockholder continues ])erson- 
 ally liable for the debts contracted while he was a stockholder, not- 
 withstanding his transfer of the stock. (Wehrman vs. Reakirt, 
 1 Cinn. S. C. R., 230 ; 2 Cinn. S. C. R., 350.) Perhaps the pre- 
 cise question above stated was not so distinctly decided in the 
 cases cited, as to place the matter absolutely beyond question, 
 but they make it more than probable that our correspondent 
 must bear the assessment. 
 
 20. Va. — A B takes five shares of stock in a building associa- 
 tion (par value of shares of $100 each), and from time to time buys 
 
CORPORA TIONS. 
 
 167 
 
 out $2,000. Parties claim that the association, by selling him more 
 than his stock, became bankers, and thereby render themselves liable 
 to the usury laws, and that the transaction is invalid and can be repu- 
 diated by A B under the usury laws. 
 
 A. These transactions have been lield usurious in Pennsylvania, 
 Connecticut, Maryland, Iowa, North Carolina, and Ohio, and not 
 usurious in New Hampshire and Massachusetts (Reiser vs. Asso- 
 ciation, 39 Penn. St., 137 ; Building Association vs. Wilcox, 24 
 Conn., 147 ; Land Society vs. Taylor, 41 Md., 409 ; Mills vs. 
 Loan Association, 75 N. C, 292 ; Building Association vs. Gal- 
 lagher, 25 Ohio St., 208 ; Hawkeye Benefit, ttc, vs. Blackburn, 
 Iowa Supreme Court, April term, 1878). The principle seems 
 to be that where such associations are mere partnerships, and do 
 not possess corporate powers, the transactions are permissible, 
 otherwise they are usurious. The West Virginia Statute which 
 authorizes the incorporation of homestead and building associa- 
 tions, however, expressly permits them to collect jiremiumsbid 
 by members for the right of precedence in taking loans," and 
 " the dues, fines, and premiums paid by the members of such cor- 
 porations, although paid in addition to the legal rate of interest 
 on loans taken by them, shall not be construed to make the loans 
 so taken usurious." — Code of West Virginia, chap. 54, sec. 27. 
 
 MISCELLANEOUS. 
 
 21. Is a stockholder of an association liable for the d^bts of the 
 same. The association has not yet taken out its charter. Is any oflBcer 
 liable for its debts ? 
 
 A. Until an association has "taken out its charter" all con> 
 cerned are liable for all the debts incurred. 
 
 22. How is a mining company organized under the laws of the 
 State of New York (act of February 17th, 1848, and acts extending 
 and amending the same), for the purpose of mining in Montana, and 
 which requires two-thirds of the capital stock represented at any meet- 
 ing to amend its by-laws, can dissolve and surrender its certificate of 
 incorporation, for the purpose of reorganizing under the laws of the 
 Territory where its proi)erty is located ? What pi*opot'tion of stock- 
 holders is required to give consent ? How long notice nuist be given 
 of intention so to reorganize, and what legal means can be resorted 
 to to defeat the plan ? Can the stockholders be compelled to surrender 
 their original certificates, or can the bondholders intervene if their 
 security after such reorganization is the same ? 
 
 A. The laws specified above do not make any pi-ovision for 
 
168 
 
 CORPORATIONS. 
 
 tlic dissolution of the corporations formed inidcr them, and the 
 previously existing law therefore applies. Tlie New York Su- 
 perior Court said, in 1855, that " no corporation can he dissolved 
 hy a mere resolution of its memhers or stockholders. In can 
 only he dissolved hy a judicial sentence or hy a surrender of its 
 charter, accepted hy the State." (N. Y. ^larhled Iron Works v. 
 Smith, 4 Duer, 362.) In an application to the courts, it would 
 of course be required that all the interested parties should have 
 notice, and an opportunity to he heard. 
 
 23. The directors of a railway guaranteed hy indorsement the 
 bonds of another railway, with which it connects, and sold such guar- 
 anteed bonds on the market for the purpose of obtaining funds to put 
 the connecting road in good condition and equip it. After paying in- 
 terest on such bonds for years, making annual reports to its share- 
 holders of the receipts and disbursements on account of the connecting 
 road, can the directors lawfully refuse to pay the interest on the ground 
 that no consideration was received for said guaranty, and the stock- 
 holders never assented to it ? In other words, can trustees, acting in 
 good faith for a principal, have their actions sanctioned by that prin- 
 cipal when it is supposed they will be ultimately remunerative and 
 repudiate them when found otherwise ? Has the question ever been 
 adjudicated ? 
 
 A. The facts stated will not prevent the legal repudiation of 
 the obligation if there proves to be a legal ground for it. Con- 
 cerning the immorality of the repudiation there can be no ques- 
 tion. 
 
 24. Having lost or mislaid certificates of stock of a chartered com. 
 pany in this city, wc would feel obliged by your informing us through 
 your columns what is legally necessary to do to get new certificates. 
 
 A. Apply for a new certificate, and advertise tlie loss of the 
 old, stating that application has been made for a new one. After 
 a reasonable limit of time the company, on the filing of a bond 
 in two sureties for its protection, will issue a new certificate. 
 
 25. When a corporate company has neglected for some years to pay 
 interest on its bonds — coupons — is it liable for interest on the amount 
 of the unpaid coupons from the time they were due, when no action 
 has been taken in law to enforce the payment of the intc^rest ? 
 
 A. The courts have now decided that where coupons remain 
 
 unpaid through default of the debtor, interest thereon may be 
 
 collected as damages for such non-payment. 
 
CORPORA TIONS. 
 
 169 
 
 26. The New York Central and Hudson River Railroad Company 
 have notified the owners of the property on the Hudson River, the 
 roadway of said company on the East and the bulkhead line on the 
 easterly side of the North River as established by law on the West, 
 that said railroad requires the same for the purposes of its incorpora- 
 tion and for the purpose of running and operating its railroads. 
 
 If the owners or any of them decline to sell for substantial reasons, 
 can the railroad compel them to sell or take their land from them 
 through their power of eminent domain granted them by the State of 
 New York ? 
 
 A. The Court of Appeals have decided that tlie power of a 
 railroad company to take land is the reasonable necessity of the 
 corporation in the discharge of its duty to the public. And the 
 court is to determine the necessity and extent of the appropria- 
 tion of land by a railroad company under the General Railroad 
 act. The course of the land owners, if they can show that there 
 is no reasonable necessity for the appropriation, is to appear 
 in court in opposition to the company's petition, of which they 
 must be duly notified. 
 
 27. Is there any real difference in the value of convertible and 
 consolidated bonds of Railroads ? Are they not reahy two issues of 
 the same mortgage ? It is stated that the trustees of the consolidated 
 bonds are about to foreclose, and we would like to know whether their 
 action would protect our interest as holders of the convertible bonds, 
 and if so would it be necessary to have our name as holders registered 
 with the trustees of the consolidated ? 
 
 A. There is no real difference between the convertible and 
 consolidated bonds, as they are equally secured under the con- 
 solidated mortgage. The holders of the convertible bonds will 
 be equally protected under the forclosure if they will come into 
 the arrangement, but they must sign the agreement w^itli the 
 holders of consolidated. 
 
 28. In an incorporated company or society consisting of fourteen 
 members, where the by-laws say that a majority shall constitute a 
 quorum for the transaction of business, can it be considered that a 
 quorum is present when only four are present, tliough these four hold 
 a proper proxy for the remaining ten ? 
 
 A. If a majority of stock is required, a proxy will answer ; 
 but where a majority of members is required unless the by-laws 
 specially provides that the attendance may be by proxy, the latter 
 will not be sufficient. 
 
170 
 
 CUSTOM HOUSE AND POST OFFICE. 
 
 29. Is it illegal in this State (N. Y.) for one or more persons to 
 use for advertisement such name as say The New York Manufactur- 
 ing Company," as a means of advertising goods or wares without com- 
 plying with the ''Act to provide for the organization and regulation 
 of certain business corporations " provided that no debts are contracted 
 under the title, no lands or leases are held ? In fact, the title of the 
 company to he only the means whereby the goods are to be advertised 
 — a trade name. 
 
 A. It is a ])enal offence for one person to assume tlie name 
 of a partnership, or to use " Co." which represents no real 
 partner. If a nnml)er of })ersons associate as a company and 
 contract no debt under such a title, they would violate no special 
 statute by using such a name. 
 
 CUSTOM HOUSE AND POST OFFICE. 
 
 CUSTOM HOUSE. 
 
 1. If imported goods are advanced by the appraiser, can the 
 advance simply be paid under protest, in view of a future recovery, 
 or is it necessary to appeal to a re-appraisement ? In case such an 
 appeal is necessary, when was such a decision rendered, and by whom? 
 
 A. An official appraisal, not appealed from, is conclusive as 
 to the dutiable value of goods, except in case the protest ])oints 
 out a violation of law, in making the a])praisal. (Roller v. 
 Maxwell, 3 Blatch.,142 ; McCall v. Laurence, la., 360 ; Hertz v. 
 Maxwell, la., 137 ; Sclmrise v. Maxwell, la., 408 ; Bartlett v. 
 Kane, 16 How., 263.) 
 
 2. If goods are stolen from a bonded warehouse does the loss 
 fall on the government, the warehouse, or the owner ; or, in other 
 words, is either the government or the warehouse responsible to the 
 importer for loss so sustained ? Does the government exact duty on 
 goods stolen while in bond, and from whom ? 
 
 A. The government declines all responsibility for goods in 
 bonded wareliouse. The warehouse is responsible unless the 
 owner or lessee can show that he used due diligence, and that lie 
 lost possession without his fault. The government could exact 
 duty under the bond, but the goods not l)eing there to resi)ond to 
 the claim, it is hardly ])robable the bondsman would be prosecuted 
 if the owner was not connected with their disappearance. 
 
CUSTOM HOUSE AND POST OFFICE. 
 
 171 
 
 3. I import 20 casks of alcohol from Germany. I use the con- 
 tjMits of those casks for manufacture in bond for export. After those 
 casks are emptied I sell them for $2.50 to $3 each without having 
 paid duty on them. Are those casks liable to duty under schedule H 
 of the tariff, viz. : Casks and barrels, empty ^ 30 per cent. 
 
 A. The casks cannot be withdrawn from bond and thrown 
 upon the market without paying the proper duty. 
 
 4. If I buy a parcel of goods in a vessel just arrived from abroad 
 and not yet entered at the Custom House, can I enter them myself, or 
 can the collector insist upon that being done by the person who sells 
 them to me ? 
 
 A. The Secretary of the Treasury, Regulation 316, decides 
 that " to prevent frauds arising from collusive transfers, all mer- 
 chandise imported into the United States shall be held and 
 deemed to be the property of the person to whom the merchan- 
 dise is consigned, any sale, transfer, or assignment prior to the 
 entry and payment, or securing the payment of the duties there- 
 on, to the contrary notwithstanding. The intent of the law being 
 to compel the original consignee to enter the goods, that intent 
 would be defeated by allowing any other person to make the 
 • entry and take the necessary oath." This answers the question 
 explicitly, and shows that the entry must be made by the 
 consignee, or in his name and with his oath. 
 
 5. If we buy goods at the factory in England are we required to 
 pay duty on the cost as invoiced from factory, or at the cost on board 
 ship (say at Liverpool) as stated in the United States Consul's cer- 
 tificate or on the invoice, expenses added (freight, insurance, etc.), to 
 the dock here ? If so, is this by authority of law, or a decision of the 
 Treasury Department? 
 
 A. The dutiable value of the merchandise is its market value 
 at the port of export, but not less than its invoiced cost, com- 
 mission added, whether paid or not. There is no duty on the 
 freight or transportation. This is regulated by act of Congress ? 
 
 6. A foreign house in Glasgow buy a lot of goods at 4|d. per 
 yard, but before the goods are ready the price has dropped to 4d. The 
 buyer wishes to consign them to a house in New York ; at what price 
 should he invoice those goods to pass the Custom House ? On the 
 day of shipment the market value is still 4d. per yard. The buyer 
 does not want to pay more duty than what is right. 
 
172 
 
 CUSTOM HOUSE AND POST OFFICE. 
 
 A. The purchaser must invoice them at cost, with commis- 
 sion added, but not less than the market price at tlie time and 
 place of export. 
 
 7. We had to receive by a certain steamer 100 packages of goods 
 which we entered in bond and gave the dehvery order to the United 
 States bonded warehouse. The Custom House weigher weighed the 
 goods (100 packages) on dock ; the captain of the steamer claims this 
 to be a delivery while the warehouse claims to have only received 99 
 packages, and we as the owners of the goods refuse to pay the freight. 
 Who is responsible for the one package missing ? 
 
 A. If the official Custom House Aveigher received and weighed 
 the 100 packages, this must be held to be a good delivery on the 
 part of the vessel. The difficulty is that the Government re- 
 fuses to be held responsible for goods lost while in its custody. 
 
 8. The revenue laws of the United States require that, before a 
 vessel bound on a foreign voyage can clear at the Custom House, the 
 cargo must be cleared by shippers. A vessel without lay-days loads 
 for several parties, one of whom considers he has some claim against 
 the vessel, and not wishing to resort to law, arbitrarily refuses to clear 
 his part of the cargo in hopes of forcing the vessel to terms. What 
 redress has the vessel, and is there no way for her to clear without 
 shipper's clearance ? 
 
 A. We have labored at this difficulty for years, but it is so 
 little understood by the average Congressman, or the political 
 heads of the Cabinet, that no reform can be secured. The law 
 requires each shipper to make a special clearance at the Custom 
 House of the goods he ships by any vessel, but imposes no 
 penalty for his neglect. The master of the vessel must then put 
 all these goods on his manifest when he clears his vessel. A 
 failure to do this subjects him to a fine. It often happens that a 
 shipper neglects to clear his goods, it being some trouble to visit 
 the Custom House in person. The only way the master has of 
 enforcing this duty is to refuse to sign the bills of lading until 
 the shipper has made his clearance. If the master puts the goods 
 on the manifest and they have not been cleared, the vessel may 
 be detained. We suggested that each shipper should be required, 
 under a penalty, to file with the vessel or its agents an invoice of 
 his goods, sworn to before a notary, and then let the master 
 submit all these with his manifest. This Avould avoid the trouble 
 
CUSTOM HOUSE AND POST OFFICE. 
 
 173 
 
 of going to the Custom House in person, and answer all tlic pur- 
 poses equally well. If a shipper refused to clear his goods a 
 mandamus might compel him, and a penalty should visit the 
 offender. Another and more difficnlt problem is to provide for 
 filling out the manifests of steamers and vessels requiring great 
 dispatch. The master wishes to clear his vessel on the day 
 before he sails, and will put on his manifest all goods thus far 
 received and cleared, and swearing that this is his cargo, obtain 
 the official clearance. He will tlien go on receiving goods up to 
 the hour of sailing. Generally the customs authorities wink at 
 this, and allow the goods to be added as a supplement after the 
 oath. Where this is not done, the goods are omitted altogether 
 from the manifest, and escape the export returns. The whole 
 system ought to be remodeled. There is no object in making 
 the owner of every package go through the form of a visit to the 
 Custom House and a separate clearance, and there ought to be 
 some way of facilitating the loading and clearance of a steamer 
 without omitting half her cargo from the manifest. 
 
 9. Is a merchant liable to pay duties on sugars in bonded ware- 
 house if the same are destroyed by fire before withdrawal ? 
 
 If duties on sugars in bonded warehouses have been paid, and such 
 sugars are destroyed before or while in course of delivery, does the 
 government refund the duties on the goods so destroyed ? 
 
 A. The law permits the Secretary of the Treasury to rebate or 
 refund the duties due or paid on goods damaged or destroyed 
 while they are in the custody of the government ; and since the 
 passage of the act no secretary has refused to make such a settle- 
 ment. 
 
 10. If a United States bonded warehouse is totally destroyed by 
 fire, and all the goods lost, does the Custom House collect duties upon 
 them ? Or. in other words, must an importer have sufiQcient insurance 
 upon bonded goods to cover invoice value and duties ? 
 
 A. The Secretary of the Treasury is allowed by law to cancel, 
 abate, or refund duties on goods lost or damaged by fire or other 
 casualty while in the custody of the government, and he has 
 never refused to do it since the act was passed. 
 
 11. To decide a dispute will you please say whether under the 
 
174 
 
 CUSTOM HOUSE AND POST OFFICE. 
 
 laws of the United States, personal luggage brought into the United 
 States, used or not used, but not for sale, is dutiable or not ? 
 
 A. The law exempts from duty wearing a})})arel in actual 
 use, and other persoiuil effects (not merchandise), professional 
 books, implements, instruments, and tools of trade, occupation 
 or employment, of })ersons arriving in the United States/' Rev. 
 Stat., sec. 2,505. 
 
 The law undoubtedly intended to allow all clothing designed 
 for the i)erson's own use, and all other articles ]>ro])erly classed 
 under the personal baggage or effects of a person traveling, to 
 come in free ; but the attempt to defraud the revenue by filling 
 many trunks with gloves, silks, etc., purchased on the order of 
 others, has led the Revenue Department to go to a great extreme 
 in the opposite direction, and in carrying out the laAv great in- 
 ^'usticc has been done, and much ill-feeling excited by a most 
 unwarranted exclusion of articles of personal property that 
 should have come Avithin the e-^emi»tion. 
 
 12. In the month of June (?) 187 i, the duty on certain goods, 
 which till then had been 35 per cent, ad valorem, was raised by a de- 
 cision of the Secretary of the Treasury, to 50 cents per pound, and 35 
 per cent, ad valorem. This rate we paid accordingly. The above 
 decision was recently reversed, however, and we have been informed 
 on authority that the additional 50 cents per pound will be refunded, 
 but of course only to those who paid duty under protest. Has the 
 Custom House a right to ask or levy a duty to which it is not entitled, 
 and can it retain the same if obtained under such circumstances ? 
 
 A. There is no way of obtaining a return of the duty except 
 by act of Congress. If the victim pays the exaction without due 
 protest, he is robbed and has no legal remedy. 
 
 POST OFFICE. 
 
 13. Can the writer of a letter get it back from the post office after 
 it has once been mailed ? 
 
 A. Sec. 171, P. 0. Ins., allows the return of a letter still at 
 the mailing office, at the request of the writer, his identity to be 
 established by his executing a fac simile of the address. Sec- 
 tion 172 provides that the delivery of a letter cannot be prevented 
 or delayed by the alleged writer after it leaves the office of mail- 
 ing. The courts, however, would intervene and stop the delivery 
 
DEBTS. 175 
 
 of a letter on application of the writer, proper cause being 
 shown. 
 
 14. If I purchase a post office order in New York for $100, pay- 
 able in Boston, and from any cause the order is lost or destroyed, and 
 is not paid in Boston, will the post office department pay my money 
 back ? 
 
 A. Section 115 of the Post Office Law provides that when 
 ever a money order has been lost, the Postmaster-General, upon 
 the application of the remitter, may order a duplicate thereof to 
 be issued without charge, providing the party losing the original 
 shall furnish a certificate from the postmaster by Avhom it was 
 payable that it had not been and would not thereafter be paid, 
 and by the postmaster issuing it that it had not been and Avould 
 not thereafter be repaid. 
 
 DEBTS. 
 
 1 , I loaned some money to a stock broker, taking as collateral an 
 assignment of said broker's seat in the Stock Board. I have tried for 
 the past year to collect this debt, but have been put olf with excuses 
 that 1 consider frivolous. Will you please inform me whether I can 
 sell the seat in the Board, and if so how to proceed ? Some of my 
 friends tell me a seat in the Board is similar to a membership in a club, 
 and not salable. 
 
 A. We are informed by the secretary of the New York Stock 
 Exchange that creditors cannot sell the seat of a debtor. When 
 a seat is sold the buyer must have his application passed upon 
 by the committee on admissions, and no member of the Exchange 
 would buy a seat under such circumstances. 
 
 2. A indorses a note for B, and B's wife furnishes security for 
 nearly the amount of the note by transferring and recording in proper 
 form some stock. 
 
 Should B fail in business and pay 25 cents on a dollar, could A pre- 
 sent for his claim the whole amount of the note, or only the balance 
 that he is not secured on ? 
 
 If A cannot receive a dividend on the whole amount of the note, 
 how could it be arranged so he could, B being willing ? 
 
 A. A can only prove for the balance of his debt deducting 
 the value of his security if he chooses to retain the latter. He 
 must surrender the collaterals to the estate in order to prove for 
 his whole debt. Every such creditor has the option of three 
 
176 
 
 DEBTS. 
 
 selections : He may rely wholly on his security ; or he may aban- 
 don his security and rely wholly on the estate ; or he may release 
 his security as far as it will go, and, proving his debt, receive a 
 dividend on the balance. 
 
 3. We were part owners in a coasting schooner for several years. 
 At a certam date we sold our interest to the captain with the knowl- 
 edge and consent of the managing owner. At this time the vessel 
 was in debt, though no demand had ever been made upon us for the 
 payment of our portion. The captain assumed our portion of the in- 
 debtedness, for which an allowance was made by us in the amount of 
 purchase. The vessel was run by the new owners for nearly a year, 
 freighted quite a large amount, and expended considerable money up- 
 on herself, when she was lost, the captain and crew with her. The 
 captain's entire estate was invested in the vessel, and uninsured. 
 After a lapse of four months from the date of loss of the vessel, two 
 firms who were part owners in the same, and who held bills against 
 her, made a claim upon us for our portion of the indebtedness at the 
 date on which we sold out, claiming that while new bills contracted 
 had been paid, the old bills remained unpaid. Are we liable ? If so. 
 to what amount, and what interest have we in freights and insurance 
 collected and moneys expended on the vessel by the new owners from 
 the date we sold out until she sunk, while the old indebtedness re- 
 mained ? 
 
 A. Our correspondents were not released from liability to 
 creditors by the captain's assumption of it on purchasing their 
 share of the vessel, unless the assent of the creditors was given 
 to such release ; neither did they, unless by specific agreement 
 to that effect, retain any interest in the vessel's earnings, insur- 
 ance, etc., in order to offset against the old debts. Provided these 
 were such as to hare been biiidiug on the shareowners when con- 
 tracted, their only avenue of escape from liability seems there- 
 fore to be by way of the statute of limitations, in the case 
 that feix years elapse from the time the debts became due and the 
 date of suit brought, or promise made to pay. There is a possi- 
 bility, however, that the debts were actually paid, and that the 
 appropriation of payments to later debts, leaving the older ones 
 a charge against our correspondents, was a device resorted to 
 after the loss of the vessel. If that should turn out to be the 
 fact, and it can be proved by the books of account, of course our 
 correspondents will be discharged from liability. 
 
DEBTS. 
 
 177 
 
 4. Suppose A loses $400 playing cards with B, is A compelled 
 by law to pay B, both being of age, or is it only a debt of honor ? 
 
 A. A cannot be compelled to pay B any sum of money on 
 such a consideration, and if B has paid and repents, he can sue 
 for and recover it. 
 
 5. Can a proof of debt against a party in another state be sworn 
 to before a notary public here, or must it be acknowledged befor^^ a 
 commissioner of that state ? 
 
 What fee is a commissioner of another state, resident here, entitled 
 to for administering oath in such a case ? 
 
 A. In some states, perhaps most, the certificate of a notary 
 would be sufficient; but there are a few states in which only a 
 statement verified before a commissioner is accepted. 
 
 For affidavits to be used in the Eastern States only 50 cents is 
 allowed by the statutes under which they are recognized. Most 
 Western and Southern States Commissioners charge one dollar. 
 
 6. A & B while in business as partners sold goods to C. A & B 
 subsequently dissolved partnership, each going into business individu- 
 ally. A buys goods from C ; C subsequently dies insolvent, owing 
 money to the firm of A & B, A at the same time owing money to 
 for goods bought after dissolution of firm of A & B. Can A put the 
 amount owing to C against the amount owing by C to the account 
 of A & B ? 
 
 A. Joint debts are no set-off against separate debts, and 
 separate debts are not a set-off against joint debts. 
 
 7. A ow^es B $10, on payment of which he tenders a $20 bill. B 
 refuses to accept the 820 bill on the ground that A is obliged to pay 
 the exact amount of the debt and has no right to expect him to change 
 the bill. Now is B correct, or does he not lose his claim to the debt 
 by refusing to accept legal money when offered in payment thereof ? 
 
 A. B is right- It is not a legal tender to demand either 
 change or a receipt. Moreover, if A tendered the exact amount 
 and B declined at the time to take it, he would not lose his 
 claim." He could recover it by suit, but could get no costs or 
 interest with it. 
 
 8. A loans to B a sum of money, receiving as collateral security a 
 warehouse receipt for goods stored by B in a pubhc storehouse, the 
 storehouse receipts are made deliverable to bearer. B fails and is 
 thrown into bankruptcy ; in this case does the collateral hold good, or 
 are the goods considered as a part of his general assets ? 
 
 12 
 
178 
 
 DEBTS. 
 
 A. If B liad a right to pledge the property A can retain liis 
 lien, and if the goods are of sufficient value, can secure his claim. 
 
 9, We sold to a certain party, out of town, several bills of mer- 
 chandise, amounting to about $2,000. The terms agreed upon were 
 60 days. When the account became due we requested a full settle- 
 ment. In answer to this request he sent us casli $500 and for the bal- 
 ance a six months' note dated from the average date of purchase. To 
 induce us to accept this settlement he wrote as follows ( his own hand- 
 writing). " I hope this will be satisfactory to you. 1 doubt tliat you 
 can sell my note at present, but you need not sacrifice the paper, as 
 you may depend on it will be paid at maturity." To oblige him. hav- 
 this guaranty we accepted the note. Before the note became due. the 
 party failed and the note was protested. We have found out that at 
 the time he made this statement he was already insolvent, having 
 given a confessed judgment, but which was not enforced nor recorded. 
 Under these circumstances have we a right ( without making us lia- 
 ble) to have the party arrested for false pretenses, in knowingly 
 defrauding us , as we could have forced pa3rment at the time. 
 
 A. The debtor's mere assurance, under the circumstances, 
 that the note would be paid at maturity, coupled as it was with 
 a hint that might have put the creditor on Ins guard, cannot bo 
 treated as a fraud punishable by criminal process. 
 
 1 0. We have a claim against an estate in Fla., made before the 
 decease of the party. We have proved it, adding interest after matur- 
 ity, and have sent it to the administrator. The attorney for the estate 
 has written us : " The law of Fla. says nothing as to interest on open 
 accounts." and that they will be prepared to settle the estate before 
 two years as allowed by statute," and therefore they cannot allow 
 interest." Please advise whether or not we can compel the payment 
 of interest. 
 
 A. It appears to be true that neither the statutes of Florida 
 nor its Supreme Court decisions furnish a positive rule on this 
 question, and it Avould therefore be unsafe to make a confident 
 statement in response to our correspondent's inquiry. But if tlie 
 claim consists of a liquidated demand, or account stated or 
 acknowledged, the w^eight of authority is in favor of the allow- 
 ance of interest. In Milton v. Blackshear, 8 Fla., 161, the Flor- 
 ida Supreme Court laid down the following rule: "We are 
 inclined to hold that in all cases where the demand sued is a 
 debt eo nomine, in contradistinction to unliquidated damages, 
 interest is allowable thereon from the time when the same 
 
DEEDS, 
 
 179 
 
 becomes legally due and payable ; and wlien no such time is 
 ascertainable, tlien interest is allowable only from the date of an 
 actual demand for payment, or of the commencement of the 
 suit." 
 
 DEEDS. 
 
 1 . If a wife sells her real estate is it absolutely necessary for her 
 husband to join in the deed of conveyance ? If it is necessary, and 
 the husband is not made a party to the deed, could he claim any use 
 of the property after the decease of his wife, or what would be the 
 result ? 
 
 A. Married women in this State (N. Y.) having been given, 
 by the law of 1860 as amended in 1862, the right to convey or 
 contract with reference to real estate, constituting then separate 
 property, the same as if they were unmarried, we see no reason 
 wh\ the husband should now join a deed of conveyance of such 
 estate. The husband's tenancy by the curtesy can only exist in 
 real estate of which his wife died seized, and not even then if 
 she has devised it away. 
 
 2. My grandfather gives me a deed to property and in the place 
 for mortgages or incumbrances is the following clause. "Subject 
 however to the rights of I. 1. C, to occupy the said premises free of 
 rent so long as he may hve or desire to occupy the said premises." 
 Does this clause debar me from giving a clear title ? Will it be neces- 
 sary for me to get a release from I. I. C. and put it upon record before 
 I can give a good title to or possession of the property to a third party ? 
 
 A. The property cannot be conveyed free of the charge with- 
 out a recorded lease from I. I. C, but the owner of the fee can 
 sell out his own title as it stands. 
 
 3. An old lady wishes to leave her house and lot to her son, 
 hut she is advised to retain her right and title to the place while she 
 lives. Now, which is the better way, shall she devise the property to 
 him by will, or shall she deed it, the deed to remain in escrow until 
 she dies ? 
 
 A. We see no objections to conveying the property by deed 
 to be held as an escrow until the grantor s deatli. A ])reccd£nt 
 for such a transaction mav be found in the case of Ruu'irles v. 
 Lawson, 13 John., 285. The advantage is that the expenses of 
 proving the will is saved. But if the mother would learn the 
 importance of observing the legal conditions to make a good 
 
180 
 
 DEEDS. 
 
 escrow, let her first read King Lear, and then take note that the 
 deed must he held in the custody of a stranger, and not of the 
 grantee, otherwise the property will pass to the son at once. 
 
 4. A resident of this State (N. Y.) makes a will in conformity to 
 the laws of the State, and also owns property in Indiana. Will it be 
 a valid will m Indiana so as to dispose of tlie real estate ? Also, how 
 should a deed be made here by a resident of this State (N. Y.) to 
 transfer real estate in Indiana ? 
 
 A. The general rule is, that wills intended to operate on real 
 estate must be executed in accordance with the laws of the State 
 or country where the realty is situated, but the rule has l)een 
 altered by statute in Indiana and other States, and a will duly 
 executed in New York according to the laws of New York will 
 pass title in Indiana. 
 
 As to deeds, the Indiana la^v makes no special requirement, 
 and such an instrument drawn after New York ])recedents would 
 be good. If acknowledged before an Indiana commissioner of 
 deeds, it would save some trouble when presenting it for record. 
 
 5. If we sell a piece of property and accept the purchaser's note 
 for the same, give purchaser deed, and the note is not paid, have we 
 any lien on the property, or could we by any process of law have the 
 deed set aside and take possession ? Again, if we sell for a stated 
 amount, give deed without consideration, accepting the purchaser's 
 credit to pay us, and he fails to make any payments as per agreement, 
 have we any recourse other than civil suit for the amount, having 
 satisfied ourselves that there had been no fraudulent representations ? 
 
 A. The, sellers have no lien on the land. They might, after 
 trying in vain to collect the consideration promised, move to have 
 the conveyance set aside for want of consideration ; but it is not 
 certain that the courts would grant it even then, if the title still 
 remained in the grantee, and they certainly would not if the 
 land had been conveyed to an innocent third party. The straight 
 course is to exhaust every remedy to collect the consideration by 
 legal process, and if that fails to move that the deed be set 
 aside for failure of consideration. This might be granted if no 
 innocent third party would suffer. 
 
 6. A sells B a house and farm and B gives A a mortgage on it 
 for part of the purchase money. After some time elapses B finds lie 
 is unable to pay A, and deeds the property back to A, to take effect 
 
DEEDS. 
 
 181 
 
 April 1st. 1878. Before that time the house takes fire and burns up. 
 B has insurance on it for $4,000, and had not transferred it to A ? 
 Cannot B claim the amount of insurance from the insurance company 
 jus^ the same as though no deed had been given to take effect on April 
 1st 1878 ? 
 
 A. If the deed did not take effect so as to transfer tlio title 
 until the first of April, it could not affect B's right to recover for 
 a loss which took place before that date. 
 
 7. A sells a piece of real estate to B for $1000 cash and $1000 
 purchase money mortgage. In one week A's mortgage not being 
 recorded, B mortgages the property to C, who immediately records his 
 mortgage. Does the purchase money mortgage take preference and 
 lose his first lien on the property ? 
 
 A. If the deed from A to B stated the fact that part of the 
 consideration was a mortgage for 81000, that would be a sufficient 
 notice to C, so that the mortgage to the latter would not be a 
 first lien. If there was no such statement and C had no notice, 
 his mortgage in this State (N. Y.) would stand fast, beinq: first 
 recorded. It is the rule in nearly all the States that where the 
 purchase money remains unpaid, the seller has a lien upon the 
 land against subsequent purchasers who have notice of that fact. 
 And upon the question what shall be a sufficient notice to charge 
 a second purchaser or mortgagee, it has been held that the latter 
 is bound to take notice of all liens shown to exist by his vendor's 
 title deed. 
 
 8. A citizen of New York dying in 1871, intestate, leaves real 
 estate in this State (N. Y.) In 1879 his children (the widow releasing 
 her right of dower) give a deed for it. Is it necessary for the husband 
 of the married daughter to sign with her, or is her independent sig. 
 nature sufficient ? 
 
 A. In this State (N. Y.) the husband's signature is not 
 necessary. 
 
 9. Is there any obstacle to the recording of a deed after the 
 death of the person making and giving the same (real estate being 
 meant), in a case where there has been neglect to record same prior to 
 the death of the maker ? 
 
 A, If the deed had been delivered and title passed before the 
 grantor's death, that event will not affect the right to have it 
 recorded. 
 
182 DIVORCE. 
 
 1 0. Have the courts ever decided that it is not necessary for a 
 deed of real estate to be recorded to make it legal ? What relief 
 would a party have who purchased a piece of property from A in good 
 faith, and finds that B has a deed dated prior, although B never placed 
 his deed on record ? Say that A has an account with B and has given 
 the deed as collateral, would that make any difference as to the owner- 
 ship of the property and the recording of the deed ? Would it be 
 necessary for B to protect himself to have either the deed recorded, or 
 a paper filed in the Register's office showing the facts ? 
 
 A. If C buys a piece of land from A in good faith, tlie title 
 on the record standing m A's name, and puts his deed on record, 
 he can hold the property, although A may Have previously sold 
 it to B, the deed to the latter not being recorded. If neither 
 deed is recorded, and B finds tliat A has sold the land again to 
 B, he will put his own on record al^out as quickly as possible, 
 and thus protect himself. It is not necessary to record the deed 
 to hold the property against the grantor, but it is necessary to 
 prevent a sale to other grantees, who ])y recording their deed 
 may obtain a title in preference. 
 
 DIVORCE. 
 
 1 , When a woman gets a divorce either absolute or limited (supposing 
 her husband to be a man of means), does she lose her right of dower, 
 or is there a division of property at the time of receiving the divorce, 
 or does the court allowance of alimony release the husband's property 
 entirely ? Or reverse the case, the liusband receiving the divorce, and 
 the wife having property in her own right: Does he receive any from 
 her estate ? 
 
 A. The right of dower in an estate is barred by more than 
 half a dozen different subjects (such as a joint conveyance of the 
 estate, etc.) and one of these is " by a divorce a vinculo matri- 
 monii.^^ And this would cut off such a claim to interest in the 
 estate of a deceased person on eitlier side. 
 
 2. Jane Doe obtained in this State (N. Y.) a divorce from John 
 Doe, both then being residents of this State (X. Y.), with permission 
 to Jane to remarry, but forbidding John's so doing during Jane's life- 
 time Can John legally marry in any other State ? and which ? Could 
 he be criminally prosecuted in any other State lor so doing ? and 
 which ? If he came here after marrying, with or without his new 
 wife, could he be criminally prosecuted ? 
 
 A. In this State (X. Y. ) it has l)een held by our Suj^reme 
 
DIVORCE. 
 
 183 
 
 Court, and a dictum of Judge Johnson in the Court of Appeals 
 is to the same effect, that the guilty party to a divorce cannot re- 
 marry, in this State (X. Y.), even though lie or slie was a 
 resident, and divorced under the laws of another State. (Smith 
 V. Woodworth, 44 Barb., 198 ; Cropsy v. Ogden, 1 Kernan, 228.) 
 Bishop, however, in his treatise on Marriage and Divorce, 
 observes that this rule is contrary to the doctrine laid down in 
 Tennessee, and contrary, he thinks, to sound canons of mter- 
 pretation. In Kentucky, the remarriage of tlie guilty party con- 
 stitutes the crime of polygamy, but a person divorced in Ken- 
 tucky was married again in Tennessee, and the courts of the 
 latter State held that no crime had been committed, and the 
 marriage was valid. In Mississippi the guilty party is not for- 
 bidden to remarry, and John Doe may therefore go thither and 
 take another wife ; indeed, so far as appears from Bishop's re- 
 searches, there is no State except New York where tlie contrary 
 has been determined, though this is not saying it might not be 
 if the case arose. Two questions are involved here. Tlie first 
 is, is the marriage under such circumstances valid ? An affirm- 
 ative answer was given by Surrogate Tucker, in the matter of 
 the Webb estate, which was tlie case of a second wife seeking 
 dower in the lands of her husband, who had been divorced here, 
 removed to Xew Jersey, married and resided there, but after- 
 ward returned to New York. (1 Tuck., 372.) The second 
 question is, may not the party be punishable for contempt ? We 
 do not know of any case in which this question has been decided, 
 but on general principles we should answer that he might be. 
 In a former reply to a similar question we stated that such parties 
 who remained and lived quietly in this State (N. Y.) were not 
 disturbed ; but they could be punished for contempt, and would 
 he, if they gave sufficient provocation in a disorderly life. If the 
 decree forbids remarriage, it seems to be a matter of no con- 
 sequence that the contract itself may be valid, in spite of the 
 prohibition, or that the act in'oliibited was not done within the 
 jurisdiction of the court. Thus, the Supreme Court in Fenner 
 et aL V. Sanborn, 37 Barb., GIO, affirmed an order of a county 
 judge imposing a fine of SoOO on the defendant, for confessing 
 udgment in a foreign State,^ contrary to the order of the court. 
 
184 
 
 DIVORCE. 
 
 We do not suppose it worth a serious inquir}^ whether parties 
 divorced here can be punished criminally in another State for 
 remarrying there, though it is, of course, possible that laws of 
 such extraordinary rigor exist, unnoticed by any of the writers 
 on the subject. 
 
 3. Can a British subject resident here for years, liaving a wife in 
 England, undergoing a sentence of five years' penal servitude, marry 
 in this country ? What course must he take ? Will it be necessary 
 to become an American citizen, in which case he is entitled to an ab- 
 solute divorce ? 
 
 A. The laws of this state (X. Y.) do not permit a divorce for 
 the cause stated. 
 
 4, The laws of South Carolina respectnig divorces are not recog- 
 nized etc. A person marrying in the State, holding property, real and 
 personal, but subsequently obtainmg a divorce in another State and 
 marrying and resettling in South Carolina ; now what power can the 
 laws of South Carolina, in the hands of the heirs of the first marriage, 
 bring to bear on the property of the person mentioned ? If there are 
 no children by the first marriage, can the other heirs by marriage claim 
 and possess the property in case of the death of the husband ? and can 
 the children of the second marriage and their claims to the property 
 be set aside on the grounds of illegitimacy, over the force that the will 
 of the father might dictate ? If there is any possibihty of the claim 
 to the property being disputed, were it not safer to transfer it to an- 
 other State holding different laws ? 
 
 A. A South Carolina judge adverting to the point raised in 
 the above communication remarked : " Few subjects are more 
 difficult, few questions more perplexing than the effect of a 
 foreign divorce." (Hull v. Hull, 2 Stroh. Eq. Rep., 167.) By a 
 foreign divorce, of course, is meant a divorce obtained in another 
 State of the Union as well as in a foreign country. The judge 
 goes on to say that " in reference to a South Carolina marriage 
 it has been often repeated, though never finally decided, that the 
 doctrine in Lolly's case is the law of this court." The doctrine 
 of thafc case was that no foreign divorce could dissolve a marriage 
 in the place where it was contracted ; and considering the disre- 
 pute into which Ihe divorce laws of many of tlie States have 
 fallen, wo doubt if the South Carolina courts would now be dis- 
 posed to depart from the direction thus given to the jurispru- 
 dence of that State on the subject. We presume, accordingly. 
 
DRAFTS, 
 
 185 
 
 that the divorce would be held void in South Carolina, and the 
 children of the second marriage illegitimate. In such case, the 
 proper heirs in South Carolina would take all the property not 
 disposed of by will, to the exclusion of these children; and not 
 more than one-fourth part of the clear net value of the estate 
 could be disposed of in favor of the second wife or children^ 
 Under these circumstances, the transfer of the property to an- 
 other State, where the divorce would be held valid, is the only 
 available expedient ; but the first wife's right of dower could not 
 be got rid of in that way. 
 
 • DRAFTS. 
 
 (See also Bills of Exchange.) 
 ACCEPTANCE. 
 
 1, I have been accustomed to receive from correspondents drafts 
 for collection at 30 days, accompanied by bills of lading with instruc- 
 tions to deliver property on payment of draft. These instructions I 
 follow literally until they are amended, which is usually the case, as a 
 merchant would hardly feel disposed to accept without getting the prop- 
 erty in hand or to pay the whole amount of the draft before maturity, 
 which I would be obliged to exact, as I have no instructions to allow 
 discount. Recently I have received from a new correspondent a draft 
 at 30 days accompanied by bill of lading, without any instructions 
 whatever. How should I act in such a case — deliver up the property 
 and take the acceptance and run the risk of a failure of payment, or 
 demand the cash, or protest for non-acceptance and return the draft ? 
 
 A. The courts have decided that in the absence of instruct 
 tions, or a well established custom equivalent to instructions 
 between the parties, the collector should surrender the bill of 
 lading on the acceptance of the draft, and is not then responsible 
 for the payment of the latter. 
 
 2. A firm sells a bill of goods to A on 90 days time, for which pur- 
 chase A gives his draft on B. who is a partner in the firm of B & Co. 
 of Philadelphia. The draft is sent forward for acceptance ; when pre 
 sented G r.ccepts the draft in the name of his firm. Is there a necessity 
 in order to prevent any possibility of trouble that the address of the 
 draft or its acceptance should be altered ? 
 
 A. The address cannot be altered now. The acceptance of 
 B k Co. if bona fide is a good acceptance, as it binds them to 
 pay the draft for the honor and credit of B. The proper wav to 
 
186 
 
 DRAFTS. 
 
 |)iH'voiit anv question in rei^ard to it, if there is any as regards 
 the riglit of B to accept in tlie name of his firm and thus to l)ind 
 them to its payment, is for him to accept in his own name above 
 the name of the firm. But that is not necessary. 
 
 3. A draws a draft at 30 days for $1,000 on B, who refuses ac- 
 ceptance, and the bill goes to protest for non-acceptance. The notary 
 marks the costs of the protest on the face of the draft, under tlie 
 figures representing the amount of the draft, which are in a corner of 
 the draft. Subsequently B accepts the draft, making it payable at 
 bank. In this acceptance does he or does he not accept the amount 
 the draft calls for and the costs likewise ? 
 
 A. The drawee should have i)aid the costs of tlie protest if 
 that had been tlie intention of the holder. The acceptance and 
 order to pay only carry with it the amount stated in the body ot 
 the draft. 
 
 4. If a note is made payable to a bank and not paid at maturity, ' 
 and a portion, or say one-half the amount, paid subsequently and not 
 indorsed on note, but placed on books to credit ol maker of note as 
 part payment, does the whole of the note draw interest till all is paid ? 
 
 A. A part payment, however acknowledged, if more than the 
 interest due at the date, is to be computed in the adjustment of 
 the final payment. 
 
 5, A correspondent sends us for collection a draft at 30 days, 
 drawn on a banker here, against a letter of credit issued by a European 
 bank ; draft being drawn for full amount of credit. The banker claims 
 that the letter of credit must be left with draft, or he will refuse ac- 
 ceptance of same, and after draft has been accepted, claims that the 
 letter of credit belongs to him. Is it proper to surrender it before the 
 money is actually j)aid ? And, should the acceptors fail before the 
 draft becomes due, would the claim hold good against the bank issuing 
 the credit, the same as if it had not been surrendered ? 
 
 A. The letter of credit is exhausted when the draft is ac- 
 cepted, as it was given simply to obtain such acceptance, and is 
 no longer of any value to the person for whose benefit it was 
 issued. 
 
 6, A doing business in another city, draws on B and C for four 
 months. The draft is presented and accepted. A gets the acceptance 
 discounted at his bank at home. The bank understands that it is ac- 
 cepted by B and C as a matter of accommodation. When the accept- 
 ance is about due A tells his bank they need not forward it for collec- 
 
DRAFTS. 
 
 187 
 
 tion. that he will take care of it. Time passes and A does not pay it. 
 Can the bank hold B and C ? 
 
 A. If payment is demanded witliin a reasona1)le time B & C 
 can be held. An acceptor is not discharged as an indorser is, if 
 the draft is not presented on the day when it is due. 
 
 7. A, a manufacturer, makes a draft payable 10 days after sight 
 upon B, a commission merchant, notifying B that he has sent goods to 
 cover the draft. B accepts the draft, the goods arrive and are unsala- 
 ble by fault in manufacture ; B notifies A and refuses payment of the 
 draft. Supposing the draft to be discounted, is B responsible because 
 of his acceptance ? 
 
 A. If the draft remained in the hands of A until after ma- 
 turity, B could successfully resist payment ; l)ut he is obliged to 
 pay it to a bona fide holder for value, the equities between him 
 and A not entering the question between him and a third party 
 who discounted it before maturity. 
 
 8. A commercial house in the United States opens a credit for a 
 foreign firm, which firm draws on the parties here and the draft is ac- 
 cepted. When the draft becomes due the foreign party or firm has 
 not made good the amount to the parties here who accepted the draft. 
 Can the parties here be made to pay the draft under such circumstan- 
 ces ? 
 
 A. The law is very plain that a man who accepts a draft is 
 bound to pay the same to a bona fide holder for value, no matter 
 wiiat may be the relation between him and the drawer. In this 
 case the commercial house must keep its promise and pay the 
 draft, although they may never recover the money. 
 
 9. It has been our custom, since seeing the decision in the Louis- 
 ville-Boston case, to hold bills of lading attached to drafts sent us for 
 collection, whether drawn at sight or on time, until drafts are paid. 
 
 A. The United States Supreme Court, in the case of the 
 National Bank of Commerce of Boston v. ^[erchants' National 
 Bank of Memphis, decided October term, 1875, gave elaborate 
 consideration to the subject, the fundamental question in the 
 case being, as stated by Judge Strong in the opinion, "whether 
 a bill of lading of merchandise deliverable to order, when at- 
 tached to a time draft and forwarded to an agent for collection, 
 without any special instructions, may be surrendered to the drawee 
 on his acceptance of the draft, or whether the agent's duty is to 
 
188 
 
 DRAFTS. 
 
 hold the bill of lading after tlie aeceptance, for the payment.'' 
 The Court lield tliat it was tlie riglit of tlie drawee m sueli ease 
 to require tlie surrender to him of tlie bills at the time of accept- 
 anee, and said : " We feel justified in saying that in our opinion 
 no respectable ease can be found in which it has been decided 
 that when a time draft has been drawn against a consignment to 
 order, and has been forwarded to an agent for collection Avith 
 the bill of lading attached, without any further instructions, the 
 agent is not justified in delivering over the bill of lading on the 
 acceptance of the draft." Of course, if there is an instruction by 
 the drawer not to deliver, that must govern. 
 
 10. ''A" is a perfectly responsible party. B a mercliant, who 
 sells A goods to the amount of $500 on 30 days' time. Before the ex- 
 piration of the time, however, B draws upon A, making the Jraft due 
 at the end of the 30 days, and gets C to discount the paper. On the 
 first presentation A " accepts " by writing his name across the face of 
 the draft ; but, when the draft becomes due, A fails to pay, and B is 
 compelled to pay C the amount of draft. Can A be sued on the accept- 
 ance ? 
 
 A. We do not know that this question has ever been decided 
 by the courts, but the sentiment of the legal profession ajipears 
 to be against the right of the drawer to bring a direct action on 
 the acceptance. In an Illinois case, the draAver assumed that he 
 could not, and brought suit for his own benefit in the name of 
 the payee. The United States Circuit Court sustained this mode 
 of procedure, and we see no reason to doubt that the courts 
 Avould follow the precedent. It concedes the draAver's substan- 
 tial right of action on the acceptance. 
 
 11. Must an out-of-town draft on a person here, reading "Ten 
 days after date please pay." etc., be presented for acceptance Avhen re- 
 ceived to hold the maker ; also, whether same can be protested for 
 non-acceptance. 
 
 A. It is entirely optional with the holder Avhether a draft at 
 so many days after date is presented for acceptance. It is pru- 
 dent to do it, and if acceptance is declined it must be protested 
 to hold the indorsers. 
 
 12. A draft at five days' sight drawn in the State of Florida on 
 our house here, must the same be accepted at once on presentation, or 
 have we any time by laAV or custom to accept the same, later, provided 
 we are wilhng to accept same from date of presentation ? 
 
DRAFTS. 
 
 189 
 
 A. In this State both by law and custom the drawees may de- 
 mand 21 hours' consideration from the time the draft is presented 
 for acceptance. 
 
 1 3. The drawee of a sight draft entitled to a reasonable time — say 
 24 hours — to examine into the correctness of the draft, either as to the 
 calculation in the invoices, or to give time for the bill of lading to 
 arrive if not attached to the draft. 
 
 A year ago a bank presented a sight draft to me about noon, without 
 bill of lading attached. I immediately telegraphed to the drawer for 
 the reason, but could not expect an answer before the time banks 
 usually turn over unpaid drafts to their notary. I explained to the 
 cashier that I was sure the bill of lading would be in the next mail, 
 but as my company required me to have bills of lading or know why 
 they were not attached, I requested him to hold the draft till next day 
 if an answer did not come before close of bank. He replied that if 
 the draft had not been officially presented by the bank, he would hold 
 it till next day for presentation, but anyhow would get the opinion of 
 the bank's attorney. At 3 I returned to the bank and learned that the 
 attorney decided the draft would have to be paid under the circum- 
 stance or go to protest ; so T paid it. 
 
 As I could reasonably expect an answer to my telegram before close 
 of mail that day, I, a duly qualified notary, offered to hold the draft, 
 and if I, as secretary, did not pay it before close of mail, would protest 
 the draft and conform of course to all laws and customs regarding the 
 maihng of notices of protest. The cashier said he did not think I 
 could do such a convenient thing. 
 
 A. Where a draft is payable on demand, or not needing ac- 
 ceptance, is held until it is due and payable, the drawee is not 
 entitled to any delay, but " in every case of presentment for ac- 
 ceptance, the drawee is entitled, if he requires it, to have twenty- 
 four hours to consider whether he will accept the bill or not ; 
 and it is usual, in such cases, for the holder to leave the bill with 
 him during that period." — Story on Bills, 237 ; Chitty on Bills, 
 ch. 7, p. 306, 307, 311, and a great host of other authorities. This 
 has never been disputed. It is provided in this State by law that 
 wliere the drawee does not return the bill within the 24 hours, 
 he shall be held to have accepted it and be liable to pay it when 
 due. The only dispute has been whether the holder was obliged 
 to leave the bill with the drawee while he took this time for con- 
 sideration, and it has been settled, both here and in England, 
 that where the drawee is not well known or for any reason the 
 
190 
 
 IJIIAF'J'S. 
 
 holder desires not to incur tlie risk, it is sutVicient tliat he leave a 
 copy of the bill with him. 
 
 If the ]>aiik left a draft Avliieh was due and payable with tlie 
 drawee on his aiireenient to })rotest it, if he did not receive ad- 
 vices by mail authorizimr the payment, it would do so at his own 
 risk, and we think that such a concession could not be required 
 of it. If the presentation was merely for acceptance, however, it 
 might safely have done this, and it was bound to give the drawee 
 twenty-four hours' consideration if he asked for it. This time 
 for consideration it will be seen is oidy given where it does not 
 postpone the day of payment. 
 
 14. A draft is presented for acceptance at my office (which by law 
 is closed at 2 o'clock P. M.) after the hour of closing, and is protested 
 for non-acceptance. Am I bound for the fees ? 
 
 A. If a draft is made on a person in his individual capacity, 
 the holder has the right to have access to him at any time during 
 business hours, and the fact that he has a professional engage- 
 ment at an office that is closed by law or custom at an earlier 
 hour, will not excuse his denial if he cannot be found within suck 
 reasonable hours as the collector had the right to select. But, 
 on the other hand, the holder or collector has no right to present 
 the draft at the office, after what he knows to be its closing hour 
 and then to protest, without making any further effort to find the 
 drawee. For instance : If a draft is made upon John Jones as 
 a private citizen, and Jones is President of a bank that closes its 
 doors at three o'clock, the holder may not seek Jones at the bank 
 at four o'clock, and because the bank is closed, protest the draft 
 without trying to find him at his residence. 
 
 DRAWEE. 
 
 15. On the first of August my house received from Smitli a draft 
 which reads as follows ; 
 
 $177.11 Blackshear, Ga., July 29, 1878. 
 
 On the 4th dav of Aucrust next pav to the order of C & Co., to pay note 
 April 8, 1878, made payable to them at 90 days), $177.11-100, value received, and 
 charge the same to the account of 
 
 To A (fc M, Savannah, Ga. 
 
 As appears from the face of the paper it was sent to pay a note which 
 C & Co. held against S. for $177.11, but the note was due August 4 
 
DRAFTS. 
 
 191 
 
 at their ofiBce, Macon, Ga. (not 90 days from April 8). On receipt of 
 draft the note was canceled and forwarded by mail to Smith and the 
 draft placed in bank for collection. On presentation of the draft 
 payment was refused and the following reason given to the notary 
 
 We are in funds, but as this draft is drawn to pay note and so speci- 
 fied in draft, we must decline payment unless note accompanies it." 
 
 Query — Was it proper to refuse payment on the grounds given ? 
 Was it at all incumbent on A & M to see to the application of the 
 money they were ordered to pay ? 
 
 A. The drawee of a draft is subject to the private instructions 
 of the drawer, and is under no other legal obligations to the 
 payee. If A & M had received instructions not to pay the draft 
 unless the note accompanied it, they did right to refuse. But on 
 the face of the draft there was no call upon them to demand the 
 note or to ask for a certification of its payment ; and if they had 
 no other authority, such a refusal was an error of judgment. 
 C & Co. have no ground of action against A & M, but they can 
 protest the draft and collect it with fees and costs from the 
 drawer. 
 
 16. A party presents ns a time draft for reception, dated in this 
 city, and which has printed on its face, " with current rate of exchange." 
 Tnking it for granted there would be no exchange, as the draft was 
 dated here and payable here, we accept it without erasing the words 
 " with current rate of exchange." The draft is paid over to a house in 
 a distant city, and in due time is forwarded here for collection. Can 
 the collecting bank require us to pay exchange ? 
 
 A. The bank cannot collect the current rate of exchange" 
 between the place of payment and a distant point simply because 
 the holder at the time of maturity happens to live at that point. 
 If this could be done, a time draft dated in New York might be 
 sent to China, and being collected from thence add a very large 
 sum to its face. 
 
 17. A Canadian firm notifies us of shipment, and draft for same 
 on six days' sight, but their bankers make the draft at sight, accom- 
 panying it with bill of lading. Our office was closed on a semi-legal 
 hohday, and the bank here holding the draft claims to have so found 
 the office and protested the draft and returned the bill of lading and 
 draft to Canada. Should not the Canadian firm pay the expenses of 
 protest ? Was the course of the New York bank correct in returning 
 the bill of lading and draft without presentation ? 
 
192 
 
 DRAFTS. 
 
 A. Tlic Canadian firm is not lia])le for the expenses of pro- 
 test on account of their error in describing the draft, as it is not 
 certain tliat the same thing might not liave happened if the error 
 had not been committed. This habit of introducing extra semi- 
 legal holidays by vote of the several exchanges we have never 
 favored, as it leads to great confusion and annoyance. We think 
 the fact of the holiday might have been recognized by the bank, 
 and the draft held over until Monday ; but bank officials are 
 themselves often in doubt as to the course they ought to pursue. 
 The })roduce exchange and all the other official boards of trade 
 adjourned over, so that tlie bank would have been fully justified 
 in holding tlie draft until Monday. 
 
 18. We buy a bill of goods of A, which on account of error in 
 shipping have not been received. Some weeks after shipping goods A 
 makes a sight draft on us for amount of bill, which we do not pay, and 
 thesame is retm-ned and protested. If we afterward find the bill correct 
 and pay A, can the holder of the draft also collect it of us V or is a 
 draft on us without notice equivalent to an assignment of the claim ? 
 
 A. If the sight draft has not been accepted or authorized by 
 him, it is in no way binding on our correspondents, and if they 
 pay their debt, the holder of it has no claim on them. 
 
 1 9. Can a drawee claim 24 hours in which to pay a demand draft ? 
 If so, in what form can it be put in which payment on day of presenta- 
 tion can be claimed ? 
 
 A. In all cases where a draft is presented for acceptance the 
 drawee is entitled to 24 hours^ consideration. If a sight draft is 
 thus presented^ where grace is allowed, the drawee could claim 
 his 24 hours but this would not delay the payment, as when ac- 
 cepted it must bear the date on which it was first seen by him. 
 If payable on demand without grace the drawee cannot claim the 
 24 hours' indulgence, and must pay it on the day the demand is 
 made, or suffer it to be ])rotested. 
 
 20. A of Chicago sells $5,000 worth of goods to B of the same 
 place, deliverable thirty days after date of sale, and calculates his profit 
 at $500; he (A) immediately orders the goods from C in New York, 
 and m payment thereof draws, with advice, on D, who holds his funds. 
 D refuses to accept, and consequently the goods are not shipped. 
 Can A hold D for damages and can B hold A for the same ? 
 
DRAFTS. 
 
 193 
 
 A. The seller A is liable to 13 for all reasonable damages for 
 non-delivery of the goods as per agreement. How far D is liable 
 to A for refusing to accept his draft depends upon the rela* 
 tions between them and the nature of their contract. If D had 
 agreed to accept A's draft to a given amount, or for funds in 
 liand, he is liable in damages for a breach of that contract. A 
 simple depositary of funds is not bound under a penalty to 
 accept" or even to pay a draft against such deposit. 
 
 21. The drawer of a draft is the agent of the drawees, having been 
 sent out by them to purchase merchandise for their account and draws 
 on them to obtain funds in order to pay for said merchandise. 
 
 This draft was sold by their agent on 30 and GO days' time, and on 
 presentation of the same by us at the office of the drawees they decline 
 to accept it, simply because it had been sold on credit and they did 
 not know the purchasers. (Of course they could not know the pur- 
 chasers in a foreign country, and ignored the judgment of their agent.) 
 The purchasers and ourselves are branch houses, consequently we suf- 
 fer, as the exchange had been sent to us to pay liabilities and must 
 suffer for goods for nearly sixty days before we can receive funds to 
 cover this draft. 
 
 Are not the drawees responsible for the acts of their agent, provided 
 he acted, and the draft was bought, in good faith ? We will state that 
 it is customary, where this draft was bought, to buy and sell ex- 
 change on credit. Suppose there is no law where this transaction oc- 
 curred allowing certain damages, or that nothing beyond the amount, 
 with interest paid on account of the draft, can be recovered from the 
 agent by our branch house, can the drawees in this city be made liable 
 for damages ? If so, can they be made liable beyond the 1 per cent, 
 allowed by our law ? 
 
 A. Unless the drawee has given authority to draw with a 
 guaranty of acceptance and the bill has been negotiated on the 
 strength of such guaranty, the holders of the draft in question 
 have no recourse except to the drawer. And the law of the 
 place where the bill was drawn will govern as to damageSc 
 Where there is no law or fixed custom, au the costs of protest, 
 of re-exchange, and other reasonable damages can be collected ^ 
 but in all civilized countries there Is now some law or established 
 usage that governs the question of damages upon returned bills. 
 
 INDORSEMENT. 
 
 22. If a banker pays a draft on which there is an irregular indorse, 
 ment, or indorsement lacking, is the party collecting the draft liable 
 for return of the funds m case fraud transpires ? 
 
194 
 
 DRAFTS. 
 
 A. All iiidorsers of a draft guaranty the genuineness and regu- 
 larity of tlie })receding indorsements, and a man who collects a 
 draft on a forged or irregular indorsement is liable to a claim for 
 the return of the money. 
 
 23. Bills at 60 days' sight, drawn in Havana on firms in this coun- 
 try. are usually drawn in favor of a minor and by him indorsed. They 
 are then sold to banks and other purchasers of paper. 
 
 Can the drawers or acceptors of such drafts resist payment on the 
 ground, either that the indorsement of a minor is illegal, or that a 
 minor has no power to transfer property by sale ? 
 
 A. It lias been decided that a bill or note indorsed by a minor 
 is good against all the parties to it so long as the infant is not 
 injured, the protection extending only to the minor himself. 
 Therefore " the bill or note will bind all the parties to it, not only 
 in favor of the minor, but also in respect to each other." Story 
 on Bills, 87. 
 
 MISCELLANEOUS. 
 
 24. A draft is drawn upon ns payable to ''John Smith or order." 
 John Smith indorses it ''Pay to Richard Roe," omitting the usual 
 words ^^or order." Richard Roe indorses it blank, and it subsequently 
 passes through other hands, all of whom make blank indorsements, 
 and it finally reaches us for payment in the hands of some reputable 
 party, say one of our city banks. Do we discharge all our liability by 
 paying the draft to the party so presenting, or can John Smith set up 
 the claim that he never authorized payment to any other than Richard 
 Roe? 
 
 A. Decisions in England, Missouri, Alabama, Kentucky, and 
 Vermont are cited by Daniel as establishing the proposition 
 that " if the paper be payable to A B or order, and A B in- 
 dorse it to CD without adding ' or order,' C D may neverthe- 
 less transfer it by indorsement, and it retains its original negoti- 
 able character." (Daniel on Negotiable Instruments, 1,493.) 
 The New York Court of Appeals has also, reversing a Superior 
 Court decision, decided that a note indorsed " Pay the within to 
 T,'* is negotialjle as though payable to T or his order (Leavitt 
 V. Putnam, 3 N. Y., 494). These authorities seem amply suffi- 
 cient to justify payment of the draft in the case described by our 
 correspondent. 
 
 25. Please inform me whether a draft drawn at sight carries with 
 it three days' grace. 
 
DRAFTS, 
 
 195 
 
 A. in this State grace is forbidden hj statute on all sight 
 bills. 
 
 26. On what day will a draft drawn as follows, and accepted on 
 August 4, be due ? 
 
 Boston. July 31, 
 
 At ten days pay to order of John Jones One Hundred Dollars, and 
 
 charge the same to the account of John Smith. 
 To H. S. Robinson & Co., New York. 
 
 You will notice it does not say after date or sight. In which way 
 should it be constmed ? 
 
 A The receiver has the right to fill the blank in accordance 
 with the terms on which it was issued. If it comes to a new 
 holder or collector still in blank, he should present it ten days 
 (with grace) from date, and protest it if not then paid. 
 
 27. I settled with A five years ago and gave him a draft on B for 
 $600. B died two years ago insolvent. Can A make me pay the 
 draft, it never having been protested ? B was ow4ng me from $'2,000 
 to $3,000 all the time. 
 
 A. If the above was an ordinary sight draft, the holder, having 
 neither collected nor protested it, cannot come back on the 
 drawer for its payment. 
 
 28. I advise my New York banker each day of the sight drafts 
 drawn on him, giving him number and amount. My drafts have the 
 word ''original" printed across the face, and they read "duplicate 
 unpaid " pay, etc. ; occasionally a customer comes and says a draft 
 of ours has gone astray or he has received no tidings of one sent 
 off some time before, or for some good reason wants a duplicate, which 
 (after examination and finding the original has not been paid up to 
 last advice in New York) I issue same having the word " duplicate " 
 printed across the face, and drawn "original unpaid pay," etc., and 
 advise the New York bank of the fact. What is the duty of the New 
 York bank in the premises ? 
 
 A. The drawee in the case described should pay the duplicate, 
 and refuse the original if afterward presentedo 
 
 29. II upon refusal of payment of tho annexed draft by the Tenth 
 National Bank (the bank saying " Have no instructions from payee 
 can the paper be legally protested in Philadelphia ? 
 
 The following is the draft 
 
 San Francisco, Cal., December 10, 1874. 
 Pay to the order of Snow, Ball & Co., one thousand dollars at the Tenth 
 National Bank, Philadelphia. Respectfully, 
 
 Hail, Storm & Co. 
 
 To Whirl Wind & Co., New York. 
 
196 
 
 DRAFTS. 
 
 A. The draft is due at the Tenth National Bank, Philadel- 
 phia, and should be presented there for payment. Sucli ])ayment 
 being refused, the draft should be ])rotested in Philadelphia, un- 
 less instructions not to protest in case of non-})aymcnt have l)een 
 sent with it. 
 
 30. In your Replies and Decisions of 20th inst. H. J. asks two 
 questions, neither of which do you answer. If " the reUef which they 
 expect is in the presentation of sight drafts for payment," you give 
 your opinion, but do not say whether it is based on some action or if 
 it IS yet to be tried and determined by the courts. The law of Georgia 
 fixes the hohdays, and does not give to any sect the right to make 
 others. The custom of this place is for the banks to send out their 
 sight drafts in the morning, and if not paid during " bank hours " to 
 put them in the hands of a notary for protest, and the notices go by 
 the night mail. Such has been the custom for years. 
 
 Will you please answer the following questions ? 
 
 First Under the customs reported above, and as there cannot be 
 two days for protesting sight drafts, would not a bank be legally 
 liable for damages for laches m collecting drafts drawn on a Jew if 
 held over when his place of business was closed on a day not a legal 
 holiday ? 
 
 Second. Can the observance of a religious holiday by any one make 
 it a legal holiday, so as to protect a bank against a charge of want of 
 dihgence, when the law does not provide for its being a legal holiday ? 
 
 Third. Can you cite a case where it has been determined by the 
 courts ? 
 
 The question of holding over sight drafts when the drawee is observ- 
 ing a religious holiday has been submitted to several of our leading 
 counsel and without their knowing the opinions of each they were 
 unanimous in saying the banks would make themselves liable. 
 
 A. The second question put in the above communication, if 
 answered in the negative, would render it unnecessary to con- 
 sider the first, since no statute, so far as we know, especially 
 authorizes tlie forbearance specified. The lack of statutory au- 
 thorization, however, does not appear to us to determine the 
 point. The general commercial law affords a number of excuses, 
 not recognized by statute, for Avhat would constitute laches in 
 the collection of bills, if the statute law alone were consulted. We 
 recur, therefore, to the first question. The case cited by us in 
 our former article on this subject (Lindo v. Unswerk, 2 Camp.. 
 602), w^as not one of failure to present for acceptance, or to 
 protest for non-acceptance, but of failure to give notice of protest 
 
DRAFTS. 
 
 197 
 
 tfi a Hebrew holyday ; but its pertinence in defining the prin- 
 ciple contended for may be shown by the following citation from 
 Story. He says : " The same general grounds which will ordin- 
 arily excuse the holder for the want of due notice of dishonor 
 upon non-acceptance of the bill, will furnish a sufficient excuse 
 for the delay to make a due presentment for payment " (Story 
 on Bills, sec 327.) The same high authority says, sec. 292: 
 " If the day on which the notice of the dishonor should ordin- 
 arily be given should happen to fall on Sunday, * * * * 
 or any other day which according to the religion of the holder, 
 or other party ^ is required to be devoted to religious purposes 
 (such as Saturday m the case of the Jews) ; in all such cases the 
 party will be entitled to the same indulgence, as to his notice, as 
 if no such day had intervened/' The words in italics, taken in 
 connection with the preceding citation, amount to an expression 
 of opinion running on all fours with our own, and if we err it is 
 in excellent company. Judge Story further says : ^' No accept- 
 ance can be required, and no presentment for acceptance can be 
 regularly made, upon a Sunday * * * * or upon any other 
 day which is a holiday, or is set apart by the religion of the 
 drawee for religious purposes." (Sec. 233, citing Chitty on 
 Bills, and Bayley on Bills to the same effect.) Bayley says : 
 " It has been held that where a man is of a religion which gives 
 to any other day of the week the sanctity of Sunday, as in the 
 case of the Jews, he is entitled to the same indulgence as to that 
 day." 
 
 These authorities, of course, do not judicially determine the 
 point in question, but they furnish such support to the doctrine 
 of our former reply that we believe them capable of establishing 
 it whenever the case should arise in the courts. Chief Justice 
 Marshall said, in 1828, that the question was one on which, at 
 that time, no decision was found in the books. We know of 
 none since, more nearly in point than that in which this observa- 
 tion was made. (Bank of Washington v. Triplett, 1 Peters, 25.) 
 The only difference between that case and the one before us is, 
 that the bill in litigation being payable at a date certain did not 
 absolutely, by the. general commercial law, require presentment 
 
198 DRAFTS. 
 
 for acceptance. But the usage of the bank required sucli pre* 
 sentnient, and the bank having received the bill for collection 
 inidertook to procure acceptance. The drawee, however, was 
 not found at his place of business, and a subsequent attempt 
 failed for the same reason. Acceptance was in fact never 
 obtained, nor the holder of the bill notified of the failure, and in 
 accordance with the usage of the banks in the District it was 
 not presented for payment until the day after the third day of 
 grace. But the Court held, Chief Justice Marshall delivering 
 the opinion, that these proceedings did not constitute such negli- 
 gence as to discharge the drawer. 
 
 Our correspondent introduces an element in the case now pre- 
 sented Avhich Avas left out in the former one, viz. : the usage of 
 the Savaimah banks. A settled usage as to the course to be 
 pursued would no doul)t determine the liability of the parties. 
 That doctrine was laid down by the Chief Justice in the case 
 just cited, and there are other sufficient authorities to the same 
 effect. But apart from such usage, it seemed to us, and still 
 seems, that the " reasonable time " which all the authorities 
 allow for the presentation of a sight draft was expansive enough 
 to save the rights of all parties if protest should be delayed one 
 day by the intervention of a religious holiday, though not one 
 established by statute law. We did not profess to give a judicial 
 decision of the point, but merely our own opinion ; and a review 
 of tlie authorities does not furnish us with any sufficient i-eason 
 to withdraw it. 
 
 31. Suppose a draft dated in New York drawn on a firm in this 
 State (N. Y.), ten days after sight or after date; said draft is presented 
 for acceptance, which is refused, and it goes to protest for non-accept- 
 ance ; is it necessary for that draft to be protested for non-payment, if 
 not paid at maturity, to hold drawers and indorsers, or is the dishonor 
 for non-acceptance sufficient ? 
 
 A. If a bill has been protested for non-acceptance, and its 
 dishonor duly notified, it is not necessary to present it again for 
 payment and protest it separately for non-payment, or to give 
 separate notice of non-payment. Daniel on Xeg. Ins., vol 2, 
 page 6; De la Torre v. Barclay, 1 Stark, part 2, 7; Story on Bills, 
 Morrison on Bills, Bayley on Bills, all agree to this. 
 
DRAFTS. 
 
 199 
 
 32. Twenty bales wool sold and shipped to John Smith for which 
 he gives draft $1000 on S. C. Jones, bill of lading attached to draft, 
 both indorsed to Brown & Co., bankers. Payment of dratt is refused, 
 whereupon Brown & Co. have it protested and return to us. Is a pro- 
 test necessary in this case, the collateral attached, bill of lading being 
 our only security ? Should not the bankers at once take possession of 
 the wool and hold for our account, instead of returning bill of lading 
 to us ? 
 
 A. We think the protest the proper course in the absence of 
 definite instructions to the contrary. 
 
 33. Is it necessary to put a two-cent revenue stamp on drafts, 
 foreign or domestic, before accepting such. Who is to bear the ex- 
 pense, the holder or the drawee ? Aside from what is customary, 
 what is the law ? 
 
 A. The law (not now in force) requires a two-cent revenue 
 stamp on all drafts drawn on a bank or banker, and the Revenue 
 Department has decided that this applies to drafts made here on 
 a foreign banker, or made abroad on a banker here ; but as a 
 matter of fact the leading drawers who sell bills here on foreign 
 bankers do not stamp them, and no attempt has been made 
 to enforce its ruling l^y the Department. When a stamp is 
 required, the person who issues it is charged with the duty ; but 
 any one who receives it is also liable, and as the contract with- 
 out the stamp cannot be enforced in the courts, it is for his 
 interest to see that a stamp is put on where one is needed. 
 
 34. 1 received for collection a draft drawn at sight and dated 
 August 24th. I presented it on August 1 9th. Can it be protested 
 for non-acceptance or non payment before the 24th of August ? 
 
 A. It should not l)e presented until the day of its date as it 
 cannot oe protested until that date is reached. 
 
 35. We call your r\ttention to the following item from the papers- 
 
 Cincinnati, July 17. — About one o'clock this afternoon v. well dressed 
 gentleman called for two drafts on New York for $10 and $12 at the house of 
 H & Co. The tickets were made out by the clerk, and as he was busy he sent 
 the party around to the exchange clerk's desk with the tickets, instead ot taking 
 them himself, as is customary. The '^tranger pretixed the figure d before the lO 
 and 7 before the 12 and then presented them to the exchange cierk. and the 
 drafts were made out for $910 and 1712 and handed to the party, who im- 
 mediately disappeared. The fraud was not discovered till the teller returned 
 from dinner. Both drafts were upon the Hanover Nrtional Bank, of New 
 York. 
 
 1. Could the drawers stop payment by giving the Hanover National 
 notice of the fraud ? 
 
200 
 
 DRAFTS. 
 
 2. Could payment of the drafts be enforced by an innocent pur- 
 chaser, without notice of the fraud ? and if so, 
 
 3. How can the drawers give such notice of the fraud as will protect 
 them ? 
 
 A. 1. The drawer can stop the payment without regard to 
 the holder. 
 
 2. Payment of the drafts cannot be enforced, but an innocent 
 holder for value can recover the amount from the drawer. 
 
 3. There is no way that the drawers can protect themselves. 
 By giving a wide publicity to the facts they may head off the 
 negotiation of the drafts, but if once sold to an innocent buyer, 
 who has had no notice, the drawer is liable. 
 
 36. ^ e have had several letters from our correspondents in dif- 
 ferent States expressing surprise that we allow grace on sight drafts. 
 Will you be kind enough to inform me what States allow grace to 
 papers drawn at sight ? 
 
 A. Grace on sight drafts is allowed either by custom or 
 express statute in Alabama, Dakota Territory, Indiana, Iowa, 
 Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missis- 
 sippi, Montana Territory, Nebraska, North Carolina, Oregon, 
 South Carolina, Utah, Wisconsin, and Wyoming. 
 
 37. We sell to John Smith a bill of goods on 30 days' time, and 
 at maturity draw on him for the amount. He does not accept the 
 draft, but permits it to go to protest. Can we collect the amount of 
 protest fees of him, supposing him to be a responsible man, or do we 
 lose it ? 
 
 A. The protest fees are not a legal charge to the said J ohn 
 Smith unless he authorized the draft, and the drawees must pay 
 it out of their own pocket. All that can be collected legally of 
 Smith, besides the costs of suit, are the original bill, with inter- 
 est from the day it was due to the day of final i)ayment. • 
 
 38. We frequently receive drafts from out-of-town bankers on 
 New York bankers drawn to the order of our customers and indorsed 
 by them to us. On date of receipt we send to New York bankers, 
 who either make such drafts payable at their bank, or give a check to 
 our order, which we deposit in our bank. « 
 
 Now, in case original draft had been given up to New York 
 bankers or bank should fail while the check had not been paid, can 
 we hold out-of-town banker and our customer ? 
 
DRAFTS. 
 
 201 
 
 Would it be the safest way for us to lodge such drafts with our 
 bank for collection ? 
 
 A. The payee of a draft or check, who presents it for pay- 
 ment and accei)ts anything but money therefor, releases the 
 drawer and indorse rs from further obligation. This risk may be 
 avoided by depositing the draft for collection on the day of its 
 receipt. 
 
 PAYMENT, 
 
 39. A, of New York, makes time draft on B, Chicago, which B 
 accepts, payable at A's office. A sells the bill to C. He fails to pre- 
 sent it here at maturity, and sends it to Chicago. Having already 
 remitted to A for its retirement, B refers holder to him. The draft is 
 protested before presentation to A. and in justification the holder — = 
 who is well acquainted with A and his business location — said that he 
 had a right to assume that A had an office in Chicago, adding further, 
 that the draft having been accepted by Chicago parties payable in New 
 York, A as drawer and indorser, stood released from any hability. 
 Who should pay the protest charges ? 
 
 A. If the ])lace of payment was so plainly designated as to 
 leave no reasonable doubt as to its location, no protest of the 
 draft could be legally made until after the presentation and de- 
 mand at such office. In fact, if the holder blundered as would 
 appear, in sending the draft to Chicago and there protesting it, 
 he is not only out of pocket the costs of that proceeding, and also 
 loses his recourse to the drawer and indorser, who are thereby 
 discharged, but he may be thankful if there is no call on him to 
 respond in damage for his error. 
 
 40» A time draft drawn to order of self, on a factor, by same a-c- 
 cepted, drawer neglecting to indorse, is it still necessary that it should 
 be done ? 
 
 A. The draft sliould be indorsed before it is presented for 
 payment, but the payment without such indorsement, the drawer 
 and indorser being the same, has been decided to be a good pay- 
 ment where it was proved that the drawer had full value, and 
 no injury resulted from the omission. 
 
 41. If A draws a draft on B, payable to the order of C, and Cgets 
 B's acceptance of the draft, and then indorses and discounts it, etc., 
 does A's responsibility cease as soon as B accepts and C indorses the 
 draft. We contend that B and C are all liable to the holder of 
 the draft until it is paid. 
 
202 
 
 DRAFTS. 
 
 A. After acceptance and discount the holder is bound to pre- 
 sent the draft at maturity for payment. If default is made and 
 due notice thereof be aiven, he has recourse to A, B, or C, each 
 and all, for liis money ; and C, as payee and indorser, has re- 
 course to both A and B if the holder comes u[)on liim. "As 
 between the payee and every subsequent indorsee or holder, the 
 acceptor contracts an obligation, by his acceptance, to pay the 
 bill, at maturity, according to the tenor thereof ; and this obliga- 
 tion he incurs conjointly, and m solido with the drawer." (Story 
 on Bills, 119). 
 
 42. A & Co., with fair credit, make draft at sight on B & Co., of 
 Smithsville, where there is no bank or notary, for S50, and deposit 
 same in Atlantic Bank, receiving cash for it. Atlantic Bank forwards 
 same for collection to Drover's Bank, without instructions as to protest. 
 Drover's Bank forwards same to Market Bank ( being the bank near- 
 est to Smithsville) for collection without instructions as to protest. 
 Market Bank misplaces draft which is found a month after, durmg 
 which time A & Co. fail in business. Draft being found B & Co. are 
 notified by letter from Market Bank of the draft with a demand for 
 payment. B & Co. refuse payment, claiming to have paid the amount 
 in part to A & Co. direct. Draft is returned by Market Bank without 
 protest. There is a loss of $50, through the failure of A & Co. AVhose 
 loss is it ? 
 
 A. Whatever loss or damage arises from the fact that the 
 draft was not duly presented, and this must appear in the evi- 
 dence, falls on the Market Bank which neglected its duty. The 
 remaining loss, if any, falls on the Atlantic Bank. 
 
 43. Should a draft or bill of exchange be protested for non-accept- 
 ance and non-payment under the following circumstances : A B of 
 Danville. Va., draws at 10 days sight on E F, of Richmond, Ya., to 
 order of C D. The draft is forwarded through bank to Richmond for 
 collection but cannot be presented to the draw^ee for acceptance or pay- 
 ment, he being a resident of Hemico county, and having no place of 
 business in Richmond. Have there been any judicial decisions 
 bearing upon the question ? 
 
 A. The draft cannot be protested, the residence of the drawee 
 being known, unless it is presented either at his residence or 
 place of business. " If the bill is addressed to a party as being 
 in one place, where he has never lived, or if he has removed to 
 another place, the holder should present it at the new^ or true 
 domicil of the drawer, if he can by diligent inquiries ascertain 
 
DRAFTS. 
 
 203 
 
 where it is." Story on Bills, 235 ; Bajley on Bills, cli. 7, sec, 1, 
 pp. 218, 219 ; Collins v. Butler, 2 Str. R., 1087 ; Bateman v. 
 Joseph, 12 East R., 433 ; Beveridge v. Burgis, 3 Comp. R., 262 ; 
 Browning v. Kinnear, 1 Gow. R., 81 ; Anderson v. Drake, 14 
 Johns. R., 114 ; Freeman v. Boynton, 7 Mass. R., 483. 
 
 44. Is a notary who presents a draft or note at the drawer's or 
 maker's office after three o'clock F. M., entitled to a fee provided the 
 draft or note be paid by certified check ? 
 
 A. Tlie notary is not obliged to take anything in payment 
 but legal tender money. If the debtor can tender him this he 
 cannot collect any fees, but he may refuse anything else, and 
 make his own terms if he accepts a check, even if the latter has 
 been certified. 
 
 45. A gives Bank of Colorado a draft on First National for pro- 
 ceeds of collection in hands of the latter for him, amounting to $2,500, 
 and this draft is sent us for collection indorsed by the cashier of the 
 Colorado Bank. We indorse and send it to First National, which re- 
 fuses to pay on the ground that the money was sent there by another 
 party, and they have not A's signature. Afterward, they offer to pay 
 if we will guaranty the signature. We claim that the Colorado Bank 
 is bound to know that the right party gave them the draft, hence that 
 their indorsement is a guaranty of the genuineness of signature. The 
 point seems to be, who is responsible for a forged signature, the pay- 
 ing bank or the one which first received it ? 
 
 A. The indorser is not held to the drawee for the genuineness 
 of the signature of the drawer, unless he gives a special guaranty 
 to this effect. Hence, if the First National paid the draft and 
 it proved a forgery of the drawer's name, they could not recover 
 the money of an innocent holder who had collected it in good 
 faith. Not having the drawer's signature, and having no means 
 of testing its genuineness, their only safety lay in exacting a 
 guaranty before payment. If they paid the draft without it, 
 they did so absolutely at their own risk. 
 
 46. A draft drawn in Mexico on a house in New York reads for 
 $5,000 silver or paper, (5,000 pesos plata o' papel), and is accepted by 
 the drawees in the same terms. At maturity they claim the right to 
 pay in silver, or to settle at the average discount that silver is quoted, 
 buying and selling say 7-8 per cent. The holders of the draft claim 
 that they are entitled to either legal-tender notes or legal-tender silver, 
 or in other words, either greenbacks, national bank notes or the Bland 
 
204 
 
 DRAFTS, 
 
 silver dollars. Both being convinced of their position being right, the 
 matter has been left to your kindness for a decision. 
 
 A. Tlie fair presumption, in the absence of a more specific 
 description, is that the payment is to be made in such silver or 
 paper as may be a lawful tender here for that sum of money ; or 
 at any rate, such as would be accepted under a contract here 
 made in such terms. The subsidiary silver coin was never a legal 
 tender in this country for more than 15 in any one payment, and 
 the act of 1875 expressly declares that trade dollars shall not be 
 a legal tender for any amount. We cannot avoid the conclusion, 
 therefore, that the payment can only be made in greenbacks, or 
 in silver dollars of the new issue. 
 
 47. Is a bank warranted in requiring a certified check for the 
 amount of a sight draft held by it, and which had been presented at 
 the payee's oflBce, while he was out ? 
 
 A. A bank is under no obligation to take anything but legal- 
 tender money in payment of a draft. If the collector does not 
 know the drawee well, he ought to exact the money or a certified 
 check. Some bank collectors, however, show but little judg- 
 ment, and refuse a check that is not certified when the standing 
 of the house is such that no such endorsement ought to be 
 required. But it is the legal right of the collector, and he may 
 exercise it at his discretion. 
 
 48. At what rate must a pound sterling draft drawn on New York 
 and past due be paid on presentation ? Should it be the current bank- 
 er's rate of day of maturity, or of the day of ^ presentation ? The 
 former is the law in Europe ; what is the law or custom here ? 
 
 A. In this country the rate is fixed on the day of presenta- 
 tion. 
 
 49. A draws on B at sight through his bankers to whose order 
 draft is payable, B accepts and in usual course tenders payment to 
 the bankers who decline to mark it paid in such a manner as to show 
 that they, the proper parties, received its amount, claiming surrender 
 of draft' sufficient. B holds that possession is not sufficient proof of 
 his having paid to lawful holder. Can B insist on the bankers mark- 
 ing as above ? 
 
 A. The surrender of the bill properly indorsed by the payee 
 is all that can be required. If the draft is to the order of the 
 
DRAFTS. 
 
 205 
 
 bankers, it must be indorsed by them or marked " paid," with 
 their signature, otherwise it is not a good payment. 
 
 50. A draft drawn on me by a correspondent abroad for 
 
 francs matures the 8th inst., Sunday, so is payable on Saturday the 
 7th. It is held by a German banking house. Not knowing how it 
 should be paid, I write there on Saturday asking if a bill of ex- 
 change drawn by A B (y will be a satisfactory payment ? They reply 
 in the affirmative. AVhen I make the tender, one of the principals says 
 that the casliier was wrong in accepting a bill of exchange of another 
 house ; that the same should have been settled with them ; that he 
 will accept my bill as his cashier said so, but only in case I pay four 
 days interest, as it is after the closing of the foreign mail. 1 pay the 
 interest demanded under protest, claiming that I have until 3 p.m., to 
 make my acceptance good without regard to foreign mails. Was this 
 not an extortion ? 
 
 A. If the whole storv is told the house had no rio^ht to exact 
 the extra interest, and our correspondent has the right to feel ag- 
 grieved at it. 
 
 51. We hold a draft drawn at 30 days' sight against B & Co. 
 How can this house claim 30 days' grace, they being recognized as 
 bankers ? 
 
 A. The statute of New York forbids grace on all sight drafts, 
 no matter on whom drawn ; and on all time drafts which appear 
 on their face to be drawn " upon any bank, or upon any bank- 
 ing association or individual banker, carrying on banking 
 business under the act to authorize the business of banking." 
 This does not apply to private banking houses, but only public 
 banks and bankers doing business under the old State law who 
 were authorized to issue bank notes, and were legally recognized 
 as banks of deposit, discount, and issue. An " individual banker" 
 might start a bank under the statute, by conforming to its pro- 
 visions, but the term has no application to a private capitalist 
 carrying on a private banking business. 
 
 52. B, doing business in Cleveland, asks the privilege of drawing 
 at sight for $1,000 on A, doing business in New York, and for which 
 B promises to remit his check to reach A by the time the sight draft 
 is presented for payment. B fails to remit the promised check, but A 
 nevertheless pays draft on presentation on April 9th at one o'clock 
 p. M. B, doing business in Cleveland, failed and made an assignment 
 on April 9th (same day) at an earlier hour than that at which draft is 
 presented, but A has not been informed of the failure and assignment. 
 
206 
 
 DRAFTS. 
 
 In the ordinary course of the mail the proceeds of the draft paid could 
 not reach Cleveland before some time on the 10th, the day following 
 the failure and assignment of B. Can A reclaim from the bank at 
 Cleveland the proceeds of such draft, allowing for the possibility of the 
 bank permitting B to check against said sight draft ? 
 
 A. If A had given no assurance to any person in Cleveland 
 so as to add to the negotiability of the draft, he can stop the 
 money he paid after B's failure at any time before it reaches the 
 hands of a holder for value, if no telegraphic or other announce- 
 ment of the payment has been used to the prejudice of innocent 
 parties. 
 
 53. Ala. — ^hat time is allowed the payee of the following de- 
 scribed drafts, under the laws of Alabama, to answer w^hether they 
 will be accepted or paid : 
 
 1. Pav to order Richard Roe one hundred dollars and charge to account 
 
 Jno. Doe. 
 
 To Henrv Smith, Mobile, Ala. 
 
 2. On demand pay to order R. Roe one hundred dollars and charge to ac- 
 count J^'O. Doe. 
 
 To Henry Smith, Mobile, Ala. 
 
 3. At sight pay to order R. Roe one hundred dollars and charge to account 
 
 Jno Doe. 
 
 To Henrv Smith, Mobile, Ala. 
 
 4. At three days' sight pay to order R. Roe one hundred dollars and charge 
 to account J^^'o. Doe. 
 
 To Henrv Smith, Mobile. Ala. 
 
 5. Thirty days after date pay to order R. Roe one hundred dollars and charge 
 to account J^'O- Doe. 
 
 To Henry Smith, Mobile, Ala. 
 
 Can the holder demand an immediate answer, or is the payee al- 
 lowed a certain time in w^hich to make reply ? 
 
 A. The Alabama statute contains a provision identical with 
 that in New York, making the retention of a bill for twenty-four 
 hours without acceptance or refusal to accept equivalent to ac- 
 ceptance ; and this provision is in such conformity to the com- 
 mercial law on the subject that it is safe to conclude that in Ala- 
 bama, as elsewhere where that law prevails, the payee of a bill 
 requiring acceptance has twenty-four liours for consideration. 
 It, therefore, becomes a question whether the bill is payable on 
 demand, or the payment is after the usual grace. In Alabama 
 bills of exchange, etc., payable at a bank or private banking 
 house, are governed by the commercial law, except so far as the 
 same is changed by the Code — Rev. Code, sec. 1833. 
 
ej.ecutcrs and administrators. 
 
 Alabama Supreme Court in Hart v, Smith, 15 Ala., 807, re- 
 luctantly conceded that sight bills were entitled to grace. As 
 the Court only decided this point, by constraint, under the in- 
 liUence of the authorities, it is a good inference that on a demand 
 bill, where the authorities are the other way, or divided, grace 
 would not liave been allowed. 
 
 The commercial law recognizes a distinction between bills as 
 to grace, and where time bills and sight bills alike carry grace, 
 bills on demand or payable at no special time or sight do not carry 
 grace. Under this distinction Nos. 1 and 2 of the foregoing bills 
 are not entitled to grace, and are therefore payable on presenta- 
 tion without privilege of delay ; while Nos. 3, 4, and 5 are entitled 
 to grace, and if the drawee demands it, when presented for ac- 
 ceptance, he may have 24 hours' consideration without prejudice. 
 When he does accept after such consideration, the acceptance 
 dates, however, from the time of original presentation. The 
 holder, in acceding to the demand, may leave the bill, or a copy of 
 it, at his option, with the drawee. If the bill is left, and the 
 drawee does not return it in 24 hours, he is held to have accepted 
 it and must pay it. 
 
 54. Mass. — Do or do not sight drafts on Boston from this carry 
 three days' grace ? If they do, does this usage extend further than 
 Boston, and how did it originate ? 
 
 A. In Massachusetts grace is allowed on sight bills by an act 
 of the Legislature, and it is therefore an old custom now sano 
 tioned by law. 
 
 55. Ohio. — Will you state whether a draft upon a man in Ohio, 
 at one day's sight, carries three days' grace or not ? 
 
 A. If it appears on its face to be drawn by a bank, banker, 
 broker, exchange broker, or banking company, it will not bear 
 grace ; otherwise it will. (Laws of Ohio, 1875, page 62.) 
 
 EXECUTORS AXD ADMINISTRATORS. 
 
 1. A leased of B a farm from April 1, 1878, to April 1, 1879, at a 
 yearly rent of $750, of which $350 was to be paid April 1, 1878, the 
 remainder April 1, 1879. Default was made, and only $40 of the first 
 $350 was paid In October B died and an admmistrator was ap- 
 pointedo A clause in the lease permitted B to sow a certain field with 
 
208 
 
 EXECUTORS AXD ADMINISTRATORS. 
 
 winter wheat and to harvest the same in July, 1879 In view of the 
 default in rent can the administrator hold the wmtcr grr.in ? 
 
 A. Prior to the Code, the counter clairo. for rent due in the 
 decedent's lifetime could not have been set oft againsl" lae ad- 
 ministrator in an action to enforce hi;? right to reap the grain, 
 but sec. 506 of the Code gives the right of set-off in such a <iase. 
 As, however, the value of the grain, if reaped by A, must be 
 credited on the rent, he should keep a strict account of expenses 
 in liarvesting, the field etc., in order to render such an account 
 to the administrator. 
 
 2. An administrator (who is also one-fifth owner) of an estate 
 desires to eject a tenant without cause and against the wish of the 
 other owners. Would the tenant be justified in refusing to vacate 
 premises having consent of four of the owners to remain (two of 
 owners being minors, i. e., 17 and 1 9 respectively), and can the tenant 
 under the circumstances be dispossessed by legal process ? 
 
 A. An administrator does not control the real property of his 
 intestate. The majority in interest of the tenants in common, 
 being in possession, can lease the property, and the dissatisfied 
 minority cannot eject the tenant. 
 
 3. I have been appointed by a Judge of Probate of the State ot 
 Connecticut admmistrator to settle an estate there. I am trying to get 
 a settlement with one of the parties. He purchased a piece of property 
 of the estate I am settling and has made several payments, but there 
 remains the amount of $1 60 still due. I hold the deed to the property, 
 but he has had the use of it since the first payment in 1865, tlio .ast 
 pavment in 1874. Now I am desirous of closing the estate, and have 
 offered him a deed to the property if he will pay the amount due- 
 He declines to accept it or to pay the difference. Can I advertise the 
 property and give the deed to the highest bidder, the first party lor- 
 feiting what he has paid ? 
 
 A. It will be necessary, unless the order appointing the ad- 
 ministrator confers the power to sell the real estate in question, 
 to obtain specific authority from the Probate Court, or a court of 
 equity, in order to convey the title away from the contract i)ur- 
 chaser. If the court of equity is resorted to, the rights ot the pre- 
 sent occupier ot the property may be determined in the same 
 proceeding. If the administrator sells to another person without 
 tliese formalities he exposes himself to the costs of a suit by the 
 party now in possession, it he is disposed to dispute the questioHo 
 
EXECUTORS AlMD ADMINISTRATORS. 
 
 209 
 
 4. What IS the law m regard to advertising by administrators of 
 estates ? For how long a period must the advertisement appear ? In 
 how many papers, and the number of times in each ? Is it obhgatory 
 where there are no debts whatever against the estate ? In the present 
 case the estate is a small one. and it is necessary to incur as little ex- 
 pense as possible in settling it. I have applied to several persons for 
 information on the foregoing, and have in each case received different 
 replies. 
 
 A. The object of the statute providing for the publication of 
 notice to creditors to present their claims seems to be the pro- 
 tection of the executor or administrator, and the provision is that 
 they "may" advertise. It has been ruled that where a statute 
 intends to impose a duty, this word is substantially the same as 
 must; but the statute in this case rather seems to accord a priv- 
 ilege than to impose a duty, and if this view is correct, and the 
 administrator or executor is willing to run the risk of unsuspected 
 debts turning up, he need not advertise at all. If he does, how- 
 ever, it must be in such papers, once a week for six months, as 
 the Surrogate shall direct, and application must be made to him 
 for an order. 
 
 5. When a husband dies m the State of New York, leaving ample 
 means in cash to pay all his debts, but the widow, not taking out any 
 letters of administration, refuses to do so. what steps can be taken to 
 oblige her to pay ? 
 
 A Application may be made to the Surrogate to appoint an 
 administrator, and this will doubtless induce the widow or other 
 parties to come forward and accept the responsibility. If it does 
 not, the Surrogate will make the appointment, and the adminis- 
 trator can possess himself of the property. 
 
 6. A, B, and C are partners doing business as A & Co. C furnished 
 all the capital. After doing business nine months C dies. A & B, 
 who are insolvent, turn over the stock of goods to C's administrator, 
 who takes possession and advertises a sale of the stock as adminis- 
 trator. In the stock is a barrel of whisky. The revenue collector 
 decides that the whisky cannot be sold unless the administrator takes 
 out a wholesale liquor dealer's license. The late firm A & Co. have a 
 retail Hcense allowing the firm to sell less than five gallons. The 
 revenue agent says the whisky cannot be sold even under this license 
 by the administrator. Is this law ? 
 
 A. If the revenue authorities insist we suppose they can 
 prevent the sale of even a barrel ot whisivy belonging to an 
 
210 
 
 EXECUTORS AND 
 
 A DMINIS TRA TORS. 
 
 estate by any one exce}>t a licensed dealer. The law applies to 
 "whoever sells or offers to sell distilled spirits. It would also be 
 within the law to prevent an administrator of tlie estate of a 
 partner from utilizing the license of the firm to which he be- 
 longed for the purpose of making the sale. The sale may be 
 made, we should think, through some licensed dealer in the place 
 without much trouble to the parties interested. 
 
 7. A died bequeathing by will the income of liis estate to B. After 
 B's death the will directs that the estate shall be divided between C 
 and D. The question arises from which shall the executor's commis- 
 sions be drawn, from the income of the estate or from the principal ? 
 
 A. Commissions are payable by the estate, rather than by 
 the legacies made a charge upon it ; and though in the above case 
 both the interests are legacies, the principal seems to us to 
 occupy the position of the estate proper, liable for all expenses 
 incurred in the settlement of the estate. 
 
 8. "What are the duties of an executor, one appointed with another 
 to settle an estate ? 
 
 A. The executor is the person to whom the testator by liis 
 will confides the administration of his personal estate, and his 
 duty is to discharge this trust in accordance with the directions 
 of the testator and the laws of the commonwealth. The will is 
 offered to the Surrogate for probate, the executor or executors 
 qualify by the usual oath, take out letters of administration, and 
 proceed in the execution of their trust. 
 
 9. There are two persons having a house left to them by a relative; 
 the will said the house should be sold and the proceeds divided equally 
 between the two heirs, but as the house would be at a sacrifice if sold 
 now, the heirs agree to wait until a good opportunity occurs to sell 
 One of the two heirs who is executrix of the above will, and now living 
 in the house, claims she can live in the house without paying rent 
 (only paying expenses such as taxes, etc.). while the other heir, who is 
 living elsewhere derives no benefit at all from the house. A portion 
 of the house was rented to another party for one year oy the deceased 
 relative. The executrix also claims that the other heir has no voice in 
 the matter at all, and that she can do as she pleases about selhng, etc. 
 
 A. On a final settlement of the accounts of the executrix she 
 can bo required to give an account of the rents and profits while 
 the estate was under her management, and pay rent for the part 
 
EXECUTORS AND ADMINISTRATORS. 
 
 211 
 
 occupied by herself. It is true that she alone has the power to 
 sell, but if she delays unreasonably the other heir can compel 
 her to carry out the provisions of the will. 
 
 10. On the 8th of October, 1872, A signed a subscription drawn 
 up in the usual form, for the purchase of a site and the erection of a 
 Church thereon. On the 2d of May, 1876, the site having been pur- 
 chased, but no Church erected, A mad^ the following indorsement on 
 the back of said subscription : 
 
 ^' For value received and for the purpose of carrying out the inten- 
 tion of erecting a Church as within mentioned. 1 hereby renew 
 
 my subscription, and bind my heirs and assigns m case of my death to 
 pay the same. Signed, A." 
 
 In March last A died. Is A's estate holden lor the payment of his 
 subscription ? 
 
 A. The estate is holden, as far as we can see, for the payment 
 of this subscription. 
 
 1 1 . My mother made a will some four years before her death giv- 
 mg her property to my sister. Prior to her death, on the day even, 
 she gave to and delivered her notes and bank book to A, her only 
 daughter, in presence of witness (her husband). Now the question is, 
 can the executor of the will made four years ago bring suit and recover 
 of A this property ? 
 
 A. A will operates only upon property which the testator 
 possesses at the time of death. If, therefore, the delivery of the 
 notes, etc., to A, by the testator during her lifetime, was accom- 
 panied by words signifying her intention to make a present gift, 
 and they were so accepted, A has a perfect title, which the 
 executor cannot disturb. 
 
 12. In the year 1870 A died, leaving behind him four small 
 children. Previous to his death a lawyer was called in to make out 
 his will, which he did. He appoints an executor and also guardian 
 (the same person) to take charge of his children. The will provides 
 that all his personal property is to be divided equally among his four 
 children, they to receive their share when each one reaches its twenty- 
 first year. One of the children reached the years specified last year. 
 He called on the executor, who told him he would have to wait 
 another year, which has passed. He asked him (the executor) last 
 month to pay him, and he told him the lawyer who drew up the will 
 was in Canada on vacation, and that he would not be back until the 
 fall. What can be done to obtain his share ? Must he wait for the 
 lawyer to return, or can he procure one and have it settled ? Can he 
 close it without a lawyer, say, for instance, a notary public ? 
 
212 
 
 EXECUTORS AND ADMINISTRATORS. 
 
 A. A notaiT public could afford no help and we fear that no 
 compulsory measure could be employed without the assistance of 
 a lawyer. But where a trustee is so manifestly derelict in his 
 duty as in this case, there may well be other points in his man- 
 agement which would repay examination under a legal micro- 
 scope. There is no doubt that he can be compelled, by legal 
 process, to pay over the fund instanter, Avith costs ; that is, as 
 soon as judgment can be obtained ; ljut if he is obstinate, more 
 or less time may be consumed in getting judgment, and if a posi- 
 tive promise can be obtained that he will pay over on the close 
 of his lawyer's vacation, it may be the part of prudence to wait, 
 rather than to enter on a course of litigation, from which the 
 costs obtained from the derelict executor Avill by no means save 
 our correspondent's pocket harmless. 
 
 13. A and B are joint executors of " a will. A borrows $5,000 
 from the estate, and gives a note w4th himself, C, D, and E as makers 
 payable to order of A and B executors, and indorsed by F. Can the 
 estate recover on such a note, and is not A liable on his bond as 
 executor to the estate the same as for other funds in his possession. 
 The money borrowed by A has been used in his private business. A 
 reply with references will much oblige a subscriber. 
 
 A. There can be no question about the right of the estate to 
 recover on the note ; but if it be uncollectible, the executor is 
 liable on his bond. In Williams on Executors, 6th Am. Ed., 
 1914, it is said " although the lending itself may not amount to 
 a legal devastavit^ yet the rule is now completely established in 
 equity, that an executor or administrator, lending money of the 
 deceased upon bond, promissory note, or other i)ersonal security, 
 is guilty of a breach of trust, and shall be personally answerable 
 if the security prove defective." 
 
 14. A and B are joint executors of a will. There was due them 
 as such executors a note for $5,000. 
 
 A collects this note and m place thereof executes his note with C, 
 D, and E as securities, (who appear to be joint makers on face of note.) 
 and F as indorser, payable to A and B as executors for $5,000. 
 
 A and B, as executors, sue A, C, D, E, and F on the note at law. 
 E and F are defending, 
 
 1. Can plaintiff recover ? 
 
 2. Is not the contract as to A void at law ? If so, can it be enforced 
 against his sureties ? 
 
EXECUTORS AND ADMINISTRATORS. 
 
 213 
 
 3. Is not the contract absolutely void as against public policy ? 
 
 4. Does the law recognize as valid a contract based upon a loan of 
 trust funds by a trustee to himself ? 
 
 5. Is there not a total failure or want of consideration ? 
 
 A. We know of no rule of law wiiich would render an obliga- 
 tion given by an executor to liis co-executor void on account of 
 the relations of the parties, though such transactions are viewed 
 with suspicion by the courts, in order to make sure tliat no undue 
 advantage is taken. The case of Forbes v. Ross, 2 Cox's Chan- 
 eery Cases, 113, was one of this kind, Avhere one of the executors, 
 contrary to the express direction of the testator, borrowed the 
 money on his own bond to a co-executor, at 4 per cent, interest, 
 when 5 per cent, was the rate obtainable elsewhere. The Lord 
 Chancellor held that the executor was chargeable under the cir- 
 cumstances with the higher rate of interest, observing that 
 " wherever a trustee contracts with himself he cannot spare him- 
 self." 
 
 In the case of our correspondent, however, if the executor A 
 alone had the money, and the sureties and indorser had no benefit 
 from its employment, tliere seems to have been no consideration 
 for their promise. We know of no decided case to wdiich we can 
 refer our correspondent on this point, nor should we, in arguing 
 such a case before a judge, consider it necessary to seek for one. 
 The general principles as to what constitutes consideration are 
 well settled. If the sureties received no benefit or value for their 
 promise, then it must be shown that the promisee or some tliird 
 party either parted with some value, or surrendered some benefit, 
 or undertook some obligation, in consequence of tlie promise. 
 But the executor was already responsible for the money in his 
 hands, and he was liable for any profits he might make in its 
 employment ; and he therefore did not assume any additional 
 liability in giving his note. We think, therefore, that the 
 guaranty was without consideration, and voidable at law so far 
 as E, F, etc., are concerned. 
 
 15. As an executor of an estate I am presented a bill by a physi- 
 cian for professional services from January I. 1865, to date. In the 
 meantime no previous bill has been presented. Will I have to pay the 
 bill as presented, or how much will the la\vs of this state ( N. Y.) com- 
 pel me to pay ? 
 
214 
 
 EXECUTORS AXD ADMINISTRATORS. 
 
 A. Tlie pliysiciau must render, if required, ii l)ill of partieu 
 lars, and only such fair and proper charges as can be brought 
 within six years can be legally collected. A physician's ])ill is 
 not such a mutual running account as may be reckoned from 
 the last established item, according to the revised code of laws 
 in this state, (X. Y.) so as to escape the statute of limitation. 
 The following are sufficient authorities on this subject: "lappre- 
 liend that to meet the requisition of the code in this particular 
 * * * there must be cross demands, matters of set-off, or 
 counter-claim under our code, something upon which the other 
 party could sustain an action." 
 
 " We ]iotice that the section of the code has introduced the 
 additional words, ' where there have been reciprocal demands 
 between the parties.' This is nearly the language of Dennison, J., 
 in Coles v. Harris (Bull, N. P., 149). ' There must be mutual 
 accounts and reciprocal demands.' This case has always been 
 treated as law." Hoffman, J., in Peck v. The New York & Liv- 
 erpool United States Mail Steamship Co., 226 Bos. (N. Y. Super- 
 ior Court, General Term). 
 
 In Perrine v. Hotchkiss, 2 T. <fe C, 370 (X. Y. Superior Court 
 1873), the Court said: "The exception in the statute made by 
 section 95 referred to, does not and was not intended to embrace 
 mere cross demands. The items which are saved by the statute 
 must constitute a part of an actual account, Avliich must not only 
 be mutual, but open and current — that is, unliquidated." 
 
 16. A party dies and leaves $50,000 cash, and by his will appoints 
 four executors, and directs that this $50,000 be invested in four per 
 cent. United States Registered Bonds for the benefit of his wife and 
 children, with the undei'standing that the executors shall hold them 
 until 1890. Should these bonds be issued in the name of the deceased 
 or in the name of the four executors ? 
 
 A. The bonds should be issued in the name of the estate. 
 
 17. Can an heir whose portion of an estate has been left in trust 
 to the executor, require from said executor and trustee, a yearly ac- 
 counting, and exhibit, if he wishes it, his securities ? 
 
 A. The heir cannot require such a yearly account. If the 
 trust is being mismanaged, or the property wasted or misapplied, 
 
EXECUTORS AND ADMINISTRATORS. 
 
 215 
 
 a bill in equity may be filed, and sufficient cause be shown, an 
 accounting might be ordered and the trustee removed. 
 
 18. Can an executor of an estate be held accountable to the heirs 
 for the rent of buildings, even though the tenants, as well as their (the 
 tenant's) bondsmen fail to pay ? 
 
 A. An executor is only responsible for due caution and dili- 
 gence, and does not guaranty the solvency of the tenants on the 
 estate. 
 
 1 9. Please inform me to what legal fees the executor of an estate 
 is justly entitled under the laws of this state (N. Y.). 
 
 A. The fees of an executor are five per cent, for receiving 
 and paying out all sums not exceeding -$1,000 ; do. two and a half 
 per cent, all sums between one thousand and ten thousand ; do. 
 one per cent, all sums over ten thousand dollars. Beyond this, 
 such allowance for })roper and actual expenses as shall appear 
 just and reasonable. 
 
 20. Can an administrator move on an estate that he is acting as 
 administrator for, and farm it to suit himself, put improvements 
 thereon, and bring in a bill for the same without the consent of the 
 heirs, and compel them to pay the same ? 
 
 A. If an administrator thus deals with an estate he is liable 
 to pay the higlicst rent wliich might have been obtainable for it, 
 and he cannot compel the heirs to pay for any improvements, 
 without the order of the Surrogate. 
 
 21. In the month of April. 1874, I sold a piece of property to S 
 and took a joint and several note signed by the said S and \\ ( his 
 father-in-law) payable the first day of April, 1875. It was verbally 
 understood at the time the note was given that I should not hurry 
 them for the payment on the note for some years after it was due, if 
 not convenient for them to pay, providing they paid the interest 
 promptly on the first of April each year. They paid the interest due 
 both in April 1875 and 1876; S was insolvent when he signed the 
 note, but W was perfectly responsible. S lived in the house with W 
 at the time. W died last fall, but before he died he willed all his 
 property both real and personal to his daughter (the wife of S ) and 
 she refuses to pay the note or interest, and S is not responsible for a 
 single dollar. Can I collect the amount of the note ? If 1 can, please 
 state the course to pursue, and confer a favor on a subscriber. 
 
 A. The estate of is liable for that note; and however dis- 
 -agreeable it may be for the daughter to comply with the demand, 
 
21G 
 
 EXECUTORS AND ADMINISTRATORS. 
 
 she will be compelled (this is both law and equity) to spare the 
 amount. The claim is to be collected like any other by suit if 
 the executor of the aviU refuses to allow ito 
 
 22. I am an executor of an estate. In settlement of a claim due 
 the estate I have received a note payable to my order as executor, 
 which I indorsed as s^ch, and turned over to the legatee, getting his 
 receipt for the same. Now, in case the drawer of the note fails to pay 
 it at maturity, am I personally liable, and can I be sued as indorser ? 
 
 A. A very good authority cautions all persons signing or in- 
 dorsing notes as agents, executors, or trustees, to take care if 
 they wish to exempt themselves from personal liability, to use 
 clear and explicit words to show that intention. The best way 
 is therefore to indorse " For the estate of John Smith, James 
 Brown, Executor." In the case above cited, the note being 
 given for a debt due the estate, made payable to the executor, 
 and by him indorsed over to the legatee who gave a receipt for 
 the same, and must have known the source and object of the 
 obligation, the receiver and his assigns would probably be held 
 by the courts as estopped from any claim on the executor person- 
 ally, if the note should not be paid ; provided always that the 
 executor had authority under the will to settle a claim with a 
 debtor of the estate in such a fashion. 
 
 23. Please inform me through your valuable paper if a son 19 
 years of age can be one of the executors of his father's will ? 
 
 A. Xo person under age can act as executor ; but if he is 
 named, and becomes of age before the estate is settled, he may 
 then, on application, be included in the trust. 
 
 24. What are the requisite legal notices to be given for the protec 
 tion of an administratrix and her bondsmen when a person (widow) 
 dies in the state of New Jersey, leaving three heirs, one a minor ? 
 The property is in the state of New York ; letters are taken out here, 
 there being no property in New Jersey, but possibly debts due there. 
 
 A. The estate being in New York and letters being taken out 
 here, the administratrix's responsibility is determined. by the law 
 of New York. In order to protect herself auainst claims of 
 creditors not presented or ascertained, she must jirocure an order 
 from the Surrogate designating the papers in which notice shall 
 be published, once a week for six months, after which she wiU 
 
EXECUTORS AND ADMINISTRATORS. 
 
 217 
 
 not be responsible to a creditor of the intestate except to the ex- 
 tent of the assets, if any, which remain in her liands. 
 
 25. Will you be kind enough to inform me what interest an exe- 
 cutor of an estate is, by law, required to return to the heirs or legatee, 
 supposing, of course, that no allusion to rate of interest has been made 
 in the will ? Can he be required to pay legal interest or only so 
 much as the funds may earn when carefully and prudently loaned ? 
 The legal interest in this state ( N. J.) is now 6 per cent., but it would 
 be impossible to invest safely any considerable amount and obtain 
 over 4 or 5 per cent over and above taxes. Again, suppose the estate 
 safely invested, earned more than legal interest, are the heirs or lega- 
 tees by law entitled to it ? 
 
 A. An executor is bonnd to pay the full legal rate of interest 
 (and more if the money has earned more) on all cash belonging 
 to the estate which he may have appropriated to his own use. 
 He may also be required to pay legal interest on all money re- 
 tained in his hands beyond a reasonable limit of time, six months 
 being usually regarded as tlie limit. Where the character of the 
 investment is not legally directed by will, statute, or order of the 
 court, the executor is required only to use a wise discretion, and 
 to pay over only what the money actually earns. The latter he 
 must pay, whether more or less, 
 
 26. Mrs. S. purchases a tract of land, about 91 acres, for which 
 she has a deed giving the bulk and bounds all right, and soon after 
 sold about 25 acres of the same. Mrs. S. has now died, and her ad- 
 ministrators sell the remainder, 66 acres, belonging to her estate, and 
 Mr. W. purchased it for $1,600. He has $800 to pay and wants to 
 borrow $800 on bond and mortgage. Would his deed from the 
 administrators be good, and the bond and mortgage hold the land of 
 66 acres without having it surveyed, and the butts and bounds written 
 in his deed and the mortgage he gives ? 
 
 A. If the administrators have the right to sell, the title from 
 them is sufficient as a good basis for the mortgage security, 
 without a survey or further minute descriotion of the property. 
 
 27. What time does the law allow an administrator to settle up 
 the affairs of a deceased person, and whether he can be compelled to 
 sell the personal property of a perishable nature of such person to pay 
 his debts before the expiration of the time allotted by law ? 
 
 A. An administrator has 18 months from the time of his 
 appointment before he can be required to account. But on the 
 
218 
 
 EXECUTORS AXD ADMINISTRATORS. 
 
 application of a creditor, the Surrogate may order him to pay a 
 particular debt at the end of six months, by the sale of property, 
 perishable or otherwise. 
 
 28. Some time since I saw a statement that when a testator in liis 
 will desired that his executor should not be compelled to give bonds, 
 notwithstanding his being a non-resident, if doing business in the city 
 the Surrogate would waive the right to demand it. Since then a prom- 
 inent lawyer has said that this was not the case. 
 
 Has an executor the right to sell real estate, if the testator direct 
 that his whole estate shall be divided among this heirs, without a 
 special power to sell ? 
 
 A. The following is chapter 657 of the laws of 1873, amend- 
 ing the Revised Statutes : 
 
 If any person applying for letters testamentary be a non-resident of the state, 
 such letters shall not'be granted until the applic-iint shall give a like bond ; pro- 
 vided, however, that such non-resident executor may receive such letters with- 
 out bonds, if the testator, by words in his last testament, has requested that his 
 executor be allowed to act without giving bonds, and if such executor has his 
 usual place of business within this state (X. Y.). 
 
 The executor has no right to sell the real estate without a . 
 power conferred by the will ; whether such a power is conferred 
 or not cannot be determined without inspection of the exact lan- 
 guage used by the testator. 
 
 29. Ten or twelve years ago a gentleman died, leaving his property 
 by will to be equally divided betvv-een his two sons, with a life interest 
 in the estate to his widow, and named the sons in the will as executors. 
 Some years after the widow died inestate, leaving an estate derived 
 from a life policy on her husband's life, and the accumulations of 
 interest from the estate. The executors have kept both interests undi- 
 vided, treating it all as one trust. The two executors are now the only 
 heirs, and they prefer to allow the property to remain as it is in the 
 name of the estate, as there would be some difficulty in agreeing to 
 what would be an equal division without selling the property, which 
 they do not care to do. Is there any law compelling settlement of an 
 estate that would affect our case, and what is the responsibility 
 attached to us as executors or individual legatees ? 
 
 A. As long as the debts are paid and the sole legatees prefer 
 to keep the property undivided, there is no objection, legal or 
 moral, to such a course. In case either of the executors should 
 waste the estate beyond his own share in it, he could be held 
 responsible, but otherwise he incurs no risk. 
 
 30. An administrator being appointed by the Surrogate for an 
 estate, the heirs consenting, and they being all of age, should not the 
 
EXECUTORS AND ADMINISTRATORS. 
 
 219 
 
 administrator divide the amounts received pro rata, rather than invest 
 for their benefit, they liaving as good a chance to invest for themselves 
 as lie has ; and must he have an order from the Surrogate before he 
 makes any division ? He says he cannot divide without an order of 
 the court. Can he not be required to settle up before the 18 montlis 
 allowed by law, when he can convert the assets into cash at once ? 
 
 A. An administrator cannot be required to dlstrilmte the 
 estate in his hands until the lapse of a year from the issue of 
 letters to him. After that time, the persons entitled may com- 
 pel him to pay their shares, on tendering him a bond of indemr 
 nity, with sureties approved by a court or iudge, conditioned to 
 refund the ratable amount that may be required in case any un- 
 settled debts against the estate shall afterwards turn up. 
 
 3 1 . Ills. — Are we entitled to interest and at what rate on a claim 
 against a solvent estate in Illinois, the executor of which takes the legal 
 time of 18 months to settle it ? If w^e are entitled to mterest, are we 
 so from the date of maturity of claim or from the time the executor 
 qualified. 
 
 A. The Illinois statutes are silent on the precise question 
 raised, but they allow interest on liquidated accounts, and as the 
 administrator is required to fix a term of court within six months 
 after qualifying, at which claims may be presented and adjusted, it 
 seems a fair conclusion that from that time, at all events, they 
 will bear interest. But if the claim is in the form of a note or 
 other adjusted account we think it will cany interest from ma- 
 turity. The rate is 6 per cent, where not otherwise stipulated. 
 
 32. Md. — What length of time is allowed executors by the law of 
 Maryland to settle an estate ? Also, what remuneration can they law 
 fully claim for making such settlement ? 
 
 A. The allowance of commissions to administrators and 
 executors is left by the Maryland law, with a maximum and a 
 minimum limit, to the discretion of the Orphans' Court. In the 
 former case it is not to be under five or above ten per cent, on 
 the amount of the inventory, and we presume the same rule 
 would be applied to executors, though they are not s})ecially 
 named in the clause. If anything is bequeathed to the executor, 
 however, by way of comi)ensation, no allowance of commissions 
 shall be made unless the compensation shall appear to the Court 
 to be insufficient. Administrators are required to render their 
 
220 
 
 EXECUTORS AND ADMINISTRATORS. 
 
 first account within twelve months after the date of their letters; 
 in the case of executors the matter appears to be in tlie discretion 
 of the Court. 
 
 33. N. J. — About 10 years ago Captain K. died, leaving his prop- 
 erty to his five children, equal shares to each. The shares were to be 
 paid to all except one daughter, whose husband was not as trustworthy 
 as he might have been. Her share was left in trust with the executors, 
 the interest to be paid to her during life, and at her death the principal 
 to be divided among her children. One executor seemed to take the 
 whole management of the estate, as the others seemed to have no de- 
 sire to interfere, though they were both interested. The managing 
 executor, after mismanaging things generally for the estate, died about 
 two years ago, and one of the other executors took charge of this 
 daughter's trust fund. It has lately been discovered that the greater 
 part of this fund has lain in his hands since last April without being 
 invested, and his answers have a great deal of the " what-are-you-going- 
 to-do-about-it ? " about them. Now I would like to know if he cannot 
 be forced to pay interest for this time, or if the money cannot be taken 
 from him and another trustee appointed by the courts ? The estate 
 was settled in Hunterdon county, N. J., and the trustee, who is a resi- 
 dent of Pa., sa>s that the court will not allow him to invest it in any- 
 thing but first mortgages on real estate, though there was nothing said 
 about the manner of its investment m the will. 
 
 A. The N. J. law makes it the duty of executors and other 
 trustees to apply to the Orphans' Court for direction as to the 
 investment of funds in their hands, and if they fail to do so, they 
 shall be accountable for the interest that might have been made 
 thereby. In Pa. the Orphans' Court is authorized by law, on 
 application by executors, &c., to direct investment in various 
 securities besides real estate ; and on proof that any trustee is 
 wasting or mismanaging the estate he may be removed by the 
 Court. So, whether the trust funds remain in N. J., or have 
 been transferred to Pa., there is an adequate remedy for the tes- 
 tamentary trustee's mismanagement. 
 
 34. N J. — What time has an administrator of a deceased person to 
 settle up the estate in the state of New Jersey ? 
 
 A. The following section of the N. J. Revised Statutes, 1874, 
 p. 524, answers the above question— 96 : " Every executor, ad- 
 ministrator, guardian, or trustee under a will shall state and set- 
 tle his account in the Surrogate's ofhce within one year after his 
 appointment, or at the first regular term of the Orphans' Court 
 
EXPORTS AND IMPORTS. 
 
 221 
 
 after the expiration of said year, unless tlie court, for good cause 
 shown, allow further time therefor." 
 
 35. Va. — What is the length of time allowed by law for executors 
 to settle the estates of deceased persons in the state of Virginia ? 
 
 A. So far as disclosed by our study of the Va. statutes, they 
 contain no special limit of time within which an executor or ad- 
 ministrator must settle the estate. Such being the case, he can 
 be required to account only by a decree of the Probate Court, at 
 the instance of a creditor or distributee. 
 
 EXPORTS AND IMPORTS. 
 
 1 . In making the calculation of the cost of goods imported for the 
 purpose of ascertaining the profit or loss, is it not necessary and proper, 
 in addition to the European cost, to add the duty, freight, and all other 
 incidental charges, and thus arrive at the aggregate cost, which has to 
 be deducted from the sale of the goods, rendered net cash by taking 
 off the customary discount, in order to arrive at the exact profit or loss 
 of the operation ? 
 
 A. If the goods were sold in bond, the European cost, freight, 
 insurance, etc., would be sufficient, but if sold duty paid, the 
 latter must certainly be added to complete the cost. 
 
 2. We bought 30 cases glass tumblers with the condition to have 
 on the invoice gross and net weight. We shipped these to Havana 
 where the import duty on these, as on many other articles, is payable 
 by weight, and importers here pay duty on the weight they declare. 
 The seller stated on the invoice the weight 50 pounds more than the 
 actual weight. Our consignee to whom we gave the weight as we 
 found it on the invoice had to pay more duty there. Can we recover 
 what is claimed from the seller ? 
 
 A. We do not think the buyer can recover of the seller the 
 damage he has received through such an over statement of the 
 weight. He might claim for short weight if the invoiced weight 
 was warranted, but the connection with the extra duty is too in- 
 direct for recovery. 
 
 3. I order goods from Germany or France under a credit on Lon- 
 don. The goods are deliverable in London, Franco- Londres. Do I or 
 does the seller insure the goods to London ? That is, at whose ex- 
 pense is such insurance properly to be ? Are the goods in possession 
 of the seller until delivered in London, the draft not been previously 
 accepted, or are they at buyer's risk on shipment, freight prepaid ? 
 
222 
 
 FRKIGHT. 
 
 A. Tlie seller insures at his own expense, or runs his own 
 risk up to the point of delivery during which time, also, he has 
 control of the goods. 
 
 FREIGHT. 
 
 1 . On a bill of lading over several railroads and a steamship 
 company, is a consignee liable for the proportion of freight, in case the 
 goods are destroyed on the vessel, up to the time of its destruction, the 
 contract to deliver goods at destination not havmg been completed ? 
 
 A. The consignee is not liable for freight unless the goods 
 are carried through as directed and delivery tendered. 
 
 2. In the case of a claim for freight per package on casks from 
 which sugar has been washed by causes exempting the vessel from lia- 
 bility for the same we have been told that the carrier may collect 
 without abatement if any of the contents remain in the package. May 
 we ask your opinion in such a matter ; and also inquire if, in your 
 judgment, freight is due if the package be landed entirely empty of 
 sugar ? 
 
 A. In case of Frith v. Baker, 2 Johns. R., 327, 50 hogsheads 
 of sugar were shipped at freight. They were properly stowed, 
 but during the voyage the ship leaked, owing to tempestuous 
 weather, by which the sugar was washed out and on the arrival 
 of the vessel the hogsheads were emptied and some fell to pieces. 
 The Court held that no freight was due. If the sugar is delivered 
 no matter how worthless it may be, or how damaged its condition, 
 the freight is thus far due ; but if the contents of the casks are 
 wasted by the perils of the sea, so that only the remains, or 
 waste, are left, no freight on such can be collected. 
 
 3. A forwarding merchant here received goods from Europe for 
 an inland house, subject to advances and charges. How long must he 
 keep them if charges are not paid before he can seU them, and under 
 what formalities can he do so ? 
 
 A. If the goods are perishable they may be sold at once. If 
 not perishable, and the shippers authorize it, it may be safe to 
 sell the property after the refusal of the inland liouse to receive 
 them, but the decisions all require a notice to the party interested 
 of the time and place of sale. If he cannot be found after a rea- 
 sonable time, public notice by advertisement, and a public sale, 
 would clear the holder of legal liability. 
 
FREIGHT. 
 
 228 
 
 4. A steamboat gives a bill of lading before reaching her point of 
 destination, she meets with an accident (snags), and to save the boat, 
 etc., throws overboard a part of the cargo ; is the boat entitled to the 
 freight money on that part of the cargo thus lost ? 
 
 A. The vessel is not entitled to freight on that part of the 
 cargo lost, save in general average, same to be paid pro rata by 
 the property benefited through the sacrifice ; but cargo saved in a 
 damaged condition earns full freight. 
 
 5 . A ships some apples to Hamburg, and owing to their perishable 
 nature is required to prepay the freight. The vessel is lost and apples 
 consequently not delivered. Can A recover what he paid as freight ? 
 Is it within the power of the owmers of the vessel to enforce payment 
 of freight after loss of ship ? 
 
 A. If freight is paid in advance and the voyage is not fully 
 performed, the shipper can claim and exact a return of the 
 money unless there is a special agreement to the contrary. 
 Watson V. Duykinck, 3 Johns., 335 ; 1 Peter's Adm. R., 207 
 note ; Detouches v. Peck, 9 John. R., 210, and many others. 
 There is a form of contract which provides that the freight shall 
 be deemed to be absolutely due to the shipowner at the time of its 
 prepayment and not in any degree dependent on the contingency 
 of the performance of the contemplated voyage, and the entire 
 fulfillment of the contract of carriage ; where such a contract is 
 made in clear and express terms there can be no recovery ; but 
 without it, the shipowner is bound to refund the money if he 
 fails to carry and deliver the goods as promised. 
 
 6. I purchase cotton largely at the South, say I buy 100 bales at 
 Jackson, Tenn., and the party who agrees to transport same signs a 
 bill of lading guaranteing that said cotton shall be landed at its des- 
 tination for a certain specified rate. The amount of the freight is 
 figured and deducted from the gross invoice and the balance paid by 
 draft several days before the cotton arrives. On the arrival of the 
 cotton it is found that the charges amount to several dollars more than 
 the sum for which the bill of lading calls, as it comes from point to 
 point over different roads, each succeeding road paying for the freight 
 already charged, whether it exceeds what they shall pay or not, and 
 take the cotton on to the next point, and so on to the end of the route. 
 Now what I would hke to know is who shall make up this over 
 charge ? The dehvering company claim that the charges must be 
 paid, right or wrong, and that leaves me so much out ; and I would 
 be pleased to learn if I am obliged to pay over-charge in this way, 
 or whether the railroad and steamship companies ought not to settle 
 
224 
 
 FREIGHT. 
 
 the matter among themselves, and make the charges no more than 
 what they would have been as specified in bill of lading. 
 
 A. If the bill of lading was signed by a carrier, and tlie con- 
 nections of the line by which the cotton came are snch as to 
 make it a through route, the carriers having an agreement among 
 themselves to this effect, the consignee may tender the amount 
 named in the contract and legally insist on the delivery of the 
 property. But if the original contract is made by a forwarder 
 not in the carrying business, and there is nothing to show that 
 the line, as such, came under any obligation as to price, the re- 
 ceiver must pay the charge, not exceeding a fair price, for the 
 carriage, and sue the original contractor for the difference. 
 This excess of charges is a common trick over all the through 
 lines, and many submit to the imposition to avoid trouble. 
 
 7. We have a cargo of paving blocks consigned to us from a east- 
 ern port ; the vessel arrives in due time and the captain reports to our 
 ofiBce and shows his bill of lading signed by him in the usual way. 
 The captain demands the freight on this cargo when discharged as the 
 only one who has a right to collect the freight. On the same day we 
 received an order signed by some one in Bangor, Maine, ordering us 
 to pay freight to a house in South street on said vessel, the order being 
 signed as part owner and agent of vessel. We contend that the order 
 was of no account, not knowing the person who signed it, and that the 
 captain was the only one who could collect the freight so long as he was 
 the master of the vessel and signed all bills of lading, and there had 
 bee^i no legal means used from restraining us from paying the captain ; 
 are we right in paying the captain his freight ? 
 
 A. A payment to the master is a good payment under the 
 circumstances ; but if the master will deliver the goods on pay- 
 ment to the " house in South Street," the consignee of the goods 
 will best serve all the parties by complying with this request. 
 
 8. A vessel is chartered in P. E. Island to load with a cargo of 
 potatoes for this port, at a certain rate per bushel. She takes in say 
 4,000 bushels, and lands here, according to Custom-house return, 
 4^300 bushels ; and on this quantity we, as agents of the vessel, claim 
 freight. The charterer claims that as he bought his potatoes at 65 
 lbs. per bushel the out-turn should be so reckoned instead of at 60 lbs. 
 per bushel as is custom here. There is nothing in charter-party or 
 bill of lading in regard to the weight, but simply that the freight is so 
 much per bushel. 
 
 A. It is a simple question as to the agreement actually made 
 
FREIGHT. 
 
 225 
 
 by the contracting parties. If botli of them liad in mind the 
 bushel of potatoes weigliing 65 lbs. wlien they bargained for the 
 freight at so much per bushel, that Avould settle it in favor of 
 that interpretation, and so if l)otli bargained Avith the 60 lbs. in 
 view. But if one had in mind the weight at the place of loading, 
 and the other the weight at the port of delivery, then the fair inter- 
 pretation which would be given to the contract by a disinterested 
 party, in accordance with the general custom, will govern. We 
 cannot say, in the case before us, what the bargain was ; ljut in 
 the absence of any other indications, the weiglit of a busliel 
 where the potatoes were bought and loaded would seem to have 
 the preference. A natural increase of goods on a voyage, it has 
 been legally settled, does not add to the freight l)ill. A cargo of 
 pressed cotton so expanded on the voyage that a much larger 
 measurement was turned out than was counted in. The Court 
 held that the freight of " 5s. per ton of cubic feet delivered" was 
 to apply only on the measurement as shipped. — Buckle v. Knoop, 
 Law Rep., 2 Ex., 125, and 2 Ex., 333, on the appeal. Without 
 other evidence of intent than above given, we doubt if the agents 
 of the vessel can claim for more bushels than were loaded ac- 
 cording to the meaning of the word " bushel " at P. E. Island. 
 
 9. In receiving shipments from Japan it frequently happens that 
 the measurements (number of feet) are incorrect. It is my habit to 
 have them remeasured here by a professional. A shipment received 
 some time ago, via England, arrived at this port per Italy, of the 
 National Line. I am obliged to pay freight before the goods are re- 
 leased. After paying I find from measurer's return, which are handed 
 to the company, tliat the bill of lading calls for an excess of feet " 
 equivalent to about $100. I ask a return from the company. 
 They say they must ask their London correspondent. To-day they 
 notify me that I must apply to shipper in Japan. I want a more 
 prompt settlement. 
 
 A. If the statement in the bill of lading of the quantity is the 
 ordinary one, and not a contract for a specified amount of room, 
 to be paid for wliether occupied or not, the shipper in Japan has 
 nothing to do with the controversy ; it is to be settled here, 
 between the ship and the consignee. In future, the latter may 
 require the measurement of the goods by the ship before payment 
 of the freight, in order to ascertain the amount due, and he can- 
 15 
 
226 
 
 FREIGHT. 
 
 not be compelled to pay, except for the quantity actually carried, 
 unless, as we say above, by virtue of some special stipulation in 
 the bill of lading. 
 
 10. Is the shipper in an ordinary bill of lading bound to pay to 
 the vessel owner freight on cargo not worth the freight agreed upon 
 and consequently not received by the consignee at a foreign port, the 
 goods having no commercial value ? 
 
 A. The value of the goods will make no difference. If the 
 consignee will not pay the freight, the shipper is liable for the 
 amount. 
 
 11. A vessel is chartered to load " a full cargo of ordinary law- 
 ful merchandise under deck, and two hundred carboys upon deck, for 
 which she is to be paid three hundred dollars on proper delivery of 
 cargo." During the voyage the carboys carried upon deck are washed 
 overboard. 
 
 Is the vessel entitled to the full amount of her freight money, when 
 she did not make a proper delivery of the whole of her cargo ? 
 
 A. The above introduces a question about which there are 
 many conflicting decisions. It has been held as in Willets v. 
 Phillips, decided by Judge Blatchford that, where part of the 
 cargo was lost, nothing was due under the charter party but the 
 captain could collect freight as such, for the portion delivered. 
 We had a case before us in which the charterer contracted to i)ay 
 a lump sum on the correct delivery of the cargo, but excepted 
 from the obligation the cargo lost by the dangers of tlie seas. 
 Leak's Digest, p. 661, liolds that the conditions of tlie delivery of 
 the cargo upon which payment under such a contract hinges, 
 " does not include cargo lost by perils excepted in the charter 
 party, and a lump sum agreed for freight, becomes payable in 
 full upon delivery of the remainder ; without deduction in respect 
 to part that is so lost without default of the master." We decided 
 in that case, although with some misgivings in view of the con- 
 flict of authorities, that the whole sum under that contract could 
 be collected, as the loss came distinctly within the exception. 
 In Bright v. Cooper, 1 Brownlow, 21, it is held that under an 
 ordinary contract, no freight whatever is due where part of the 
 cargo is lost. If the case now mentioned were left to our own 
 decision, the loss being wholly due to the perils of the sea, and 
 
GIFTS. 
 
 227 
 
 no particular exception being named in the charter party, we 
 should hold that the consignees have the right to refuse the 
 balance of the cargo, and would then be absolved from all claim 
 under the charter party ; but, if they accept the portion saved, 
 they are liable in equity for a pro rata freight, deducting from 
 the round sum promised the proper freight of the portion lost. 
 Of course, if the vessel is in fault for the loss of the deck load, 
 the consignees may accept the under deck cargo, and offset the 
 freight against the value of that which was not delivered. We 
 give an opinion of the equities of the case without attempting to 
 predict what the courts would decide as a matter of law in view 
 of the great conflict of authorities, here and in England. 
 
 GIFTS. 
 
 1 . A, during what proved to be his last sickness, loaned to his old 
 and faithful house servant $500 in the presence of C, and took the 
 note of B to the order of A, payable on demand. Without indorsing 
 the note, A immediately, in presence of B, hands it to C, and tells B 
 if he continues to live with him during his life he may have the note, 
 besides being paid the regular wages, and directs C to keep the note 
 and give it to B at his death if he does so continue to live with him. 
 A very soon thereafter dies, B having continued to hve with him. Is 
 it now safe for C to deliver the note to B ? 
 
 A. The above transaction may probably be supported as a 
 contract, made upon good consideration, viz., B's continued 
 service until the death of A. In another point of view, con- 
 sidered as donatio causa mortis, there is a good deal of conflicting 
 law on the question whether or no the unindorsed and therefore 
 non-negotiable note in question is capable of such delivery as the 
 authorities all require in order to make it a valid gift of that 
 nature. Under the decision of the Connecticut Supreme Court 
 in Brown v. Brown (18 Conn. R., 417), it appears to us that the 
 delivery was good and sufficient to support the transaction as a 
 gift. The case is not, perhaps, beyond a perad venture ; but 
 unless there are debts of the estate existing when the transaction 
 took place, which the estate will not otherwise satisfy, in which 
 case the transfer, considered as a donatio mortis causa, would 
 yield to the claim of creditors, we do not think that C would run 
 any appreciable risk in giving up the note to B on the death of 
 his master. 
 
228 
 
 CrARAXTY. 
 
 2. My brother died in a Western city and left a property consider- 
 ably above his debts, to which I am a co-heir. He gave an "lOU " 
 to a church for S500 as a subscription toward its building. Sov^, is 
 the estate liable for the payment of that donation ? The creditors 
 have severally objected, but the commissioners appointed by the 
 Probate Court liave adjudicated in favor of the church. It is paid ; 
 but we would appeal if we thought we could succeed. A referee in 
 the matter of the estate of S. & Co., has decided that a donation, 
 through a promissory note, is not good as against creditors in bank- 
 ruptcy. 
 
 A. We think tlic gift will hold good. Giving an ol^ligation to 
 pay money to a charity when one is insolvent, which was the position 
 in the case quoted, is bestowing the property of others ; but giv- 
 ing out of a solvent estate, as we infer the brother of our corres- 
 pondent did when he made liis donation, is such a choice as any 
 man has a right to make in the disposition of his own property. 
 
 GUARANTY. 
 
 1 . John Smith, agent, opens an account with us, giving a written 
 guaranty for payment of all goods purchased on account of John 
 Smith, agent," to a specified amount. 
 
 He after some years gives us notice that on a certain date he will 
 drop the agent, and we fill his orders " John Smith " after that date. 
 
 Does our guaranty cover both accounts, it being the same person 
 under different styles ? 
 
 A. If it were the same account under a different appellation 
 the case might be different, as if the guaranty was given to cover 
 a purchase by J. C. Smith, and he afterwards clianged the title 
 to J. Cotton Smith; but John Smith, agent, and John Smith, for 
 himself, may represent a very different liability, and change en- 
 tirely the character of the risk. We do not believe that the guar- 
 anty could be enforced ; it certainly could not if the guarantors 
 could show that the risk was changed when John Smith resumed 
 business in his ow^n name. 
 
 2. A let his house to B; A required of B to procure two persons, 
 C and D, as sureties for payment of the rent, A having to get the 
 signatures of the two sureties, C and D. A got the signature of C', 
 but neglected to apply to D to get his signature. At the expiration of 
 the time of payment B could not pay ; A then said to C that he (C) 
 must pay the amount of the rent. C replied to A that he (C) is not 
 bound to pay anything, as the agreement between the parties says, 
 
 We, C and D for sureties," etc., and as D has not signed, the agree- 
 
GUARANTY. 
 
 229 
 
 ment becomes null and void. In other words, D having not signed, 
 says he has nothing to pay, and C says that D having not signed, he 
 (C) also has nothing to pay. Has A, the landlord, to lose his whole 
 rent ? If not, who has to pay ? 
 
 A. The landlord, who by his own act lias released D, cannot 
 hold C, and must look to B, or lose his money. Xext time he 
 will look a little sharper after his sureties. 
 
 3. LA buys a bill of goods from us on thirty days and gives us 
 B to guaranty it. B in consequence sends us the following letter : 
 You will please ship goods for A at once amounting to $500, and if 
 your remittance is not to hand in thirty days please send notice to me 
 and I will give you check for same. 
 
 2. C buys a bill of goods on ninety days and proposes to give us 
 acceptance on D ; the latter accepts C's draft. 
 
 Now, in both cases there is no value or consideration given as to 
 guaranty or acceptance. 
 
 A. Our correspondent is entirely mistaken in supposing that 
 the guaranty and acceptance in the cases specified are without 
 consideration. It is not necessary that the person to be held 
 should receive the consideration if the transaction in which he 
 becomes pledged has an actual basis of this character. A wishes 
 to buy goods ; he induces B, C, and D to indorse his note, or to 
 give a guaranty tliat he will pay for his purchase. He presents 
 this security to E who sells him the goods. These furnish the 
 consideration, and E can hold all the parties, although only A 
 received any benefit. ' B, C, and D are not bound to A, and the 
 latter can recover nothing from them for he has given them 
 nothing for their signatures ; but E can hold them for he has 
 given a valuable consideration for the signatures. Thus A bor- 
 rows B's note (paying him nothing for it) and gets it discounted 
 at bank. A could not collect the note of B, but the bank can, 
 as it has given value for it ; and it makes no difference that B 
 received none of the money. So in each of the cases cited by 
 our correspondent the surety is legally held. 
 
 4, A bond of S500 was issued by a town in New York payable in 
 twenty years, interest semi-annually. A sold it to B with the follow* 
 ing guaranty indorsed, ''Pay to B or order ; same guarantied by me, 
 A" B sold it to C. The town failed to pay semi-annual interest ; C 
 called upon A to pay interest, giving him notice of dishonor. A called 
 and tendered to C the full amount of bond, which he refused, claiming 
 
230 
 
 GUARANTY. 
 
 he only wanted the interest due. Was. and is C bound to accept of 
 tlie tender, and can C hold bond, and collect the interest of A ? 
 
 A. The question whether the iruaraiity of a negotiable instru- 
 ment is itself negotiable — that is, whether in this case, A's guar- 
 anty is good in favor of C — has been considerably discussed, and 
 has not been absolutely settled in the court of last resort in 
 this state (N. Y.). But the decision of the Su])renie Court, Erie 
 general term, in Cooper v. Dedrich, 22 Barb., 516, was in the 
 affirmative, and we see no reason to suppose that this case will 
 not be followed, especially since it has been approved by the 
 Court of Appeals on another point. In the belief, therefore, that 
 A can be held on his guaranty, he can be required to pay interest 
 as well as principal, and his tender of the principal alone is in- 
 sufficient. And, unless by a provision in the bond, the principal 
 becomes due upon default in payment of interest, payment of the 
 bond cannot be made before maturity, without the holder's con- 
 sent. 
 
 5. B inquires from A for references of C in regard to standing, etc. 
 A replies : The man (C) is good ; sell him $5,000." C fails soon 
 afterward. Can A in any way be made responsible by law for the 
 loss B sustained ? 
 
 Suppose that A had said : ''I would sell C $5,000," could that little 
 alteration free him of responsibility ? 
 
 There is a controversy mainly regarding the words used, '-sell him," 
 or "I would sell him :" the one party holds that the positive expres- 
 sion " sell him " makes the author legally responsible ; the other party 
 says that either expression can be used without making the speaker in 
 any way responsible for the consequences as long as it is only a verbal 
 communication. 
 
 A. The words are not sufficient to imply a guaranty in either 
 case, and the speaker assumed no legal responsibility if he had 
 no reason to doul)t the correctness of his own statement. 
 
 6. A gave a guarantee to B for C to buy goods on it to the amount 
 of $500. On the 26th of July C makes a settlement with B, giving 
 him five notes for his indebtedness of about $496, payable in 60 days 
 successively, to wit : September. November, etc., etc. On the 27th of 
 September A revokes his guaranty, having been informed that B has 
 received another guaranty about the 4th of September, when C pur- 
 chased goods at B's. When does the guaranty of A expire, and is 
 he responsible for the goods bought between the 10th and the 27th of 
 September ? 
 
GUARANTY. 
 
 231 
 
 A. As the amount of the guaranty (within four dolhirs) was 
 outstanding, if the dates are correctly given, when A revoked it 
 on the 27th of September, he is only responsible fortlie payment 
 of those notes. 
 
 7. A discounts notes for B and demands a guaranty from C, and 
 receives such in a written document, stipulating that he will be respon- 
 sible for all losses occurring for discounting ''customer papers " [the 
 document is made in Germany and the expression used is kundenwech- 
 seT\ offered by B to A for discount. B failed and A has discounted 
 notes — some accommodation notes given by B, some fictitious notes 
 made by B, and some customer notes. C is willing to make good the 
 loss on customer paper which remains unpaid. Can C be held liable 
 by A for either notes, accommodation or fictitious, A claiming he took 
 them in good faith and that they were offered by B as customer papers ? 
 
 A. Tlie German word used to designate the character of dis- 
 counts guaranteed, is not in general commercial or legal usage, 
 but a literal transaction answers very well to our phrase "busi- 
 ness paper." We infer from the statement of the case above that 
 the transactions described, except the execution of the guaranty, 
 occurred here ; and that being the case, the contract is one to be 
 interpreted by our laws. Under them we think no pretense can 
 be made that the guarantor is held to make good losses arising 
 from the discount of accommodation or fictitious acceptances, no 
 matter though the bank supposed them to be actual business 
 paper. This it was the business of the discounters (A) to find 
 out, and they made the discounts at their own risk if they were 
 careless or mistaken. 
 
 8. Suppose that on January I, 1879, A sells B a promissory note 
 against C, due three months from date (December 1, 1878,) and guar- 
 anties the note good and collectible down to December 1, 1879. The 
 note not being paid at maturity. B sues the maker ten days after it is 
 due. Is the guarantor holden for the payment of said note, if it can- 
 not be got into a judgment till after December 1, 1879, in consequence 
 of not being reached on the court calendar ? 
 
 A. Due notice being given to A. he is held for the note. 
 
 9. Will the written continuing guaranty of a wife legally hold her 
 estate for the payment for goods sold her husband on open account ? 
 If so give the proper form of such guaranty. 
 
 A. It is essential to such a contract by a wife that it must 
 appear to be for her benefit, or else it must expressly charge her 
 
232 GUARAXTY. 
 
 separate estate. The following form of friiaraiity has been held 
 good: ''I agree to be responsible for all such goods as W sliall 
 buy of C," to Avhich must be added in the case of a married wo- 
 man, and I hereby charge my separate estate witli tlie fulfill- 
 ment of this obligation." 
 
 10. In the following form of guaranty can payment be collected 
 of B if A should fail to pay ? 
 
 " For value received I hereby guaranty the payment by A of all goods he 
 may purchase of C D for one year. B. " 
 
 A. The guaranty will bind B as surety to C D for A's pur- 
 chases during the year. 
 
 11. A writes us for some goods, and as his guaranty had his first 
 letter indorsed by Cashier B, of the Bank C, as follows: 
 
 A's orders to the amount of 500 dollars are good and will be promptly paid. 
 
 (Signed) B. , Cashier Bank C. 
 
 After one year's transaction of business with A he fails to pay his 
 bills, and we find that he is indebted to us for $500. Can we hold the 
 cashier yet responsible for the amount ? Or was the guaranty in tended 
 only for the first transaction ? 
 
 A. The cashier is not responsible after the fitrst -^500 were 
 paid. 
 
 12. A grocer buying goods from us runs up his account to $700 
 or $800 and fails ; but one of the firm says that "if he does not pay I 
 will," at the same time sending him more goods. After he fails, the 
 one of the firm who has promised to make his account good pays to 
 the firm $600, leaving a balance of $185. Now he is not a member 
 of the firm, and he says he will not pay the $185. Must we have a 
 written agreement to hold him responsible, or is a verbal agreement 
 sufficient when there are two or three witnesses to it. 
 
 A. The claim is good and the guarantor must pay that bal- 
 ance. 
 
 13. — 
 
 "Ninety days after date I promise to pay M. & Co., or order ten thousand 
 dollars, value received, and we hereby waive all rights, claims and benetits of 
 the homestead and all exemption laws as to this note, with interest at (left blank) 
 from date. Payable at cither bank of Savannah, with excliaugc on New York. 
 
 (Signed) J gun Smitu." 
 
 The indorsement on this note reads : "I will guarantee the payment 
 of this note to M. & Co. at maturity," signed Thomas Brown. Is this 
 indorsement enough to hold the indorser at once, if the principal should 
 fail? 
 
GUARDIAN. 
 
 233 
 
 A. If the guaranty was given when tlie note was made and 
 was part of the contract it is binding ; if it was done subsequently 
 the guarantor might plead want of consideration. In its terms, 
 otlierwise, it is well enough, but to avoid all doubt as to the plea 
 noticed it should read : " For the consideration of one dollar to 
 me in hand paid, I hereby guaranty the payment of the within 
 note at maturity." 
 
 14. We have an account against A, and also have a guaranty 
 given by B for said account to a certain amount. If A gives us 
 a note on account indorsed by B, would that in any way affect the 
 guaranty ? 
 
 A. If the amount guarantied was in excess of the face of the 
 note, we do not see how the acceptance of the latter would injure 
 the guaranty unless it is given with the understanding that it is 
 the limit and settlement of the account to which the gTiaranty 
 applied. 
 
 GUARDIAN. 
 
 1 . Can a minor whose parents have been divorced and neither of 
 whom claim the guardianship over him, and whose whereabouts are to 
 him unknown, of his own accord appoint some responsible person to 
 be his guardian, with power to give or refuse consent in order to bene- 
 fit him ? What is the form necessary to make this voluntary transfer 
 legal ? 
 
 A. A minor who is over 14 years of age can appear before 
 the Surrogate and nominate a guardian. The Surrogate will 
 make inquiries, notify all parties in interest, and on the day ap- 
 pointed proceed to confirm the nomination if it appear best. Tlie 
 fees are not large for such a service, and a legal guardian may 
 thus be secured. 
 
 2. A guardian has had charge of an estate for a period of ten 
 years ; has made no statement within that time, but collected rents 
 and paid all bills ; has also let heirs have money for personal expenses. 
 Should the guardian in final settlement allow the heirs interest on bal- 
 ance remaining in his hands at the end of each year, there being quite 
 an amount unused each year ? 
 
 A. The guardian's duty is not to suffer considerable sums to 
 remain long uninvested (six months is the longest admissible 
 period), and if he does so he is chargeable with interest. If he 
 is obliged to keep money on hand t j answer calls from his wards. 
 
234 
 
 GUARD I AX. 
 
 that fact would excuse him from tlie lia])ility to such an extent 
 as the circumstances would ai)pear to justify. 
 
 3. Is there a law in the state of New York whicli allows parents 
 to will away their children at any time before they reach the age of 
 21? 
 
 A. The father, on consent of the mother, or in case of his 
 death and omission to make such appointment, the mother 
 may by deed or by last will appoint any person or persons as 
 guardian of a minor unmarried child, during its minority, or for 
 a less time, and such appointment will stand. The deed may 
 be executed and dispose of the child before the death of the 
 parent, an order for such adoption being obtained from the County 
 Judge, and the consent of the child if over 12 years of age being- 
 first secured. 
 
 4. In 1873 A & B were sureties on a guardian's bond for C. Prior 
 to the final accounting of C, A died, and B was discharged in bank- 
 ruptcy. When B filed his petition in bankruptcy his liability as surety 
 was not scheduled. C is now insolvent. Is the estate of A discharged 
 by his death, and is the discharge of B in bankruptcy a perfect defense ? 
 
 A. Since B's liability as surety could not have been fixed 
 until C's final accounting, it was not a provable claim against B 
 in bankruptcy, and therefore was not released by his discharge. 
 The liability of A's estate depends upon the question whether 
 the bond was joint only, or joint and several. If the latter, the 
 estate must pay. (Ficlden v. Lahrens, 6 Blatch., 524.) 
 
 5. About five years since a minor, born and now living in Iowa, 
 had some money willed her by a relative in this state ( N. Y.) ; I was 
 appointed her guardian, and gave bonds, and now liave the funds in 
 trust. She has since arrived at the age of eighteen years, is married, 
 and according to the laws of Iowa has attained her majority. She 
 asks me to hand her money to her, agreeing to sign a joint receipt for 
 the same with her husband, releasing me from all responsibility in the 
 matter. 
 
 Would such a receipt be a full release to me for all demands, and 
 would the law of this state ( N. Y.) allow' me to hand her the funds in 
 this manner. 
 
 A. If it is considered as a question settled in this state ( N. 
 Y.) by the decision of Judge Daly in the matter of Brick's estate 
 (15 Abb., Pr. 12) that the marriage of a female ward terminates 
 
HEIRS AND LEGATEES. 
 
 235 
 
 the guardianship, it would be safe to pay over the fuiids as desir^ 
 ed, but we should hesitate to treat that case as authority for a 
 general rule to the above effect, and therefore think the safer 
 course would be for the guardian to apply to the Surrogate for 
 leave to i-esign upon the facts above stated, when the Surrogate 
 would either rule that the decision of Judge Daly covers the case, 
 or appoint the ward's husband guardian, in either case allowing 
 the funds to be transferred. 
 
 6. Two orphans have money in a savings bank. Can their execu- 
 trix and guardian (one person) invest the sum in real estate as a home 
 for them ? Could the executrix execute a mortgage for any deficiency 
 of the purchase money ? 
 
 A. The guardian might make such an investment in real 
 estate, subject to her responsibility if it should be an improvident 
 one, unless the funds are now invested by order of court. But 
 to execute a mortgage which would bind her wards, it would be 
 necessary first to obtain such an order. 
 
 7. A goes as bond for B who is guardian for an estate. Before 
 the children over whom B is guardian come of age, A sells all his 
 property. Now in what way is the bond secured? Is it recorded 
 against A's property same as a mortgage, or does the court take the 
 risk of the bondsman losing his property ? 
 
 A. The bondsman is accepted with that risk, but if the secur- 
 ity fails the guardian may be required to furnish an additional 
 bond. 
 
 HEIRS AND LEGATEES. 
 
 1. A husband dies and leaves several children, all of age. The 
 property consists of real estate, bonds and money in banks. "What 
 portion of the above is the widow entitled to by laws of New York 
 State, and is her right absolute to dispose of same by will, or must 
 personal be divided to surviving children at her death. 
 
 A. If the husband dies intestate, leaving children and a 
 widow, the latter in this State takes one-third interest in both 
 real and personal estate. She is not obliged to save her portion 
 of the personal for the children, but may spend it, or bequeath 
 it to whom she pleases. 
 
 2. A man living in New York State loses liis wife, leaving 
 children here ; he goes out of the State and marries again : he dies 
 
23G HEIRS AM)- LEGATEES, 
 
 there, leaving no children by his second wife ; at his death he leaves 
 considerable property ; his widow manages to get it in her name after 
 his death. At her death who does the property go to, her friends or 
 his children by his former wife ? 
 
 A. If the second wife " managed to get the ])ro})erty in her 
 name" by legal means, the children by the first wife will not 
 inherit. Bnt if the father died intestate and she seized upon the 
 pro})erty without Avarrant of law, there has been no time from 
 that day to this in which the children could not legally recover 
 their share of the estate. Her interest being her dower right, 
 would be her only claim, and that at her death would go to her 
 own next of kin. 
 
 3. A dies in Connecticut, lea\dng real estate and personal property. 
 The former is mortgaged for more than it sells for under foreclosure. 
 The personal property has been distributed years ago. B is a married 
 daughter, who holds real estate in New York in her own right. T\"ill 
 a deficiency judgment on A's bond and mortgage hold as against B, 
 and if so, to full amount of deficiency, or only to the amount received 
 by B as her share in A's personal property ? 
 
 A. B can be held liable, at the utmost, to the extent of her 
 distributive share in the estate. 
 
 4. B takes a bond and mortgage on a piece of real estate belonging 
 to A ; previous to maturity A dies ; when the mortgage becomes due 
 are his executors bound to satisfy the mortgage from his personal 
 estate, of which their is sufficient in their hands, whether they wish to 
 or not, or has B to foreclose and look to property ? 
 
 Also, can a mortgagee sue the bondman on his bond for amount of 
 mortgage without first having to foreclose ? 
 
 A. The payment of the bond of the testator secured by a 
 mortgage of real estate is by 1 R. S., 739, sec. 4, primarily 
 charged upon the real estate mortgaged, and cannot be made out 
 of the personal estate, unless by an express provision or a neces- 
 sary implication in the will. (Bedfield on Surrogates, 280 : 
 Waldron v. Waldron, 4 Bradf., 114.) By consequence, payment 
 of the bond could not be enforced against the obligor in the above 
 case without foreclosure. 
 
 5. Does a lot in a cemetery in New York State, descend only to 
 the eldest male heir ? If an interment is made, can the lot be con- 
 veyed or sold ? If no wull is left disposing of the lot, what process of 
 law is necessary (supposing my first question answered in the negative) 
 to divide the lot pro rata among heirs ? 
 
HEIRS AND LEGATEES. 
 
 237 
 
 A. Chap. 133, laws of 1847, as subsequently amended, in 
 particular by chap. 245, laws of 1874, provides that on the death 
 of a cemetery lot owner, the lot shall descend to his heirs-at-law 
 (not to a single heir). Either of the heirs may release his title 
 to the other, by a release filed with tlie Town Clerk or City 
 Register, but in order to a sale for the purpose of division among 
 the heirs, application must be made to a court of record for 
 leave. 
 
 6, ''A" died leaving some property, a widow, one son and two 
 daughters, but no will. They all drew the interest and divided it. 
 The son dies leaving no will, but it was his express wish that his share 
 should go to his mother. In that case can the sisters claim their part 
 of his share ? also, can the widow use the principal in case the interest 
 will not support her ? 
 
 A. The property of the son will descend legally, one-third to 
 his widow, the other two-thirds to be equally divided between his 
 children. When the son died, leaving no widow nor children, 
 his property is to be divided between his mother and two sisters 
 share and share alike. The mother cannot use the children's 
 share except with their consent, but they may be compelled to 
 support her if she has not sufficient means of her own. The 
 wishes of the son, not embodied in a will, are of no effect. 
 
 7, A man leaves the use of property, including a piece of land, to 
 his widow for life, after her death to go to his children. Now can the 
 widow lease the land for say 1 years, and if she dies before the ex- 
 piration of the time, will the lease hold good ? Must the lease be 
 signed by the children as well as by the widow to be valid ? 
 
 A. The widow can only give to another what she has herself 
 — ^the right of use during her natural life — and the lessee would 
 have no color of title to occupancy after her death. If the 
 children are of age and joined in the lease it would then be good. 
 
 8, By the provisions of a will $5,000 are to be invested and the 
 income paid to A during her life. At her death the pi'incipal sum 
 goes to B. If by fortunate investment the $5,000 should be increased 
 to $8,000, to whom would the $3,000 belong ? If the $5,000 should 
 shrink on whom would the loss fall ? 
 
 A. The increase having arisen from the enhanced value of the 
 investment securities, and not from regular interest or dividends, 
 it belongs to the principal and goes to B. In case of shrinkage, 
 
238 
 
 HEIRS AXD LEGATEES. 
 
 it would depend somewhat on the cause. If from imi)rovident 
 investment in securities or property not authorized by law, the 
 trustee niidit have to make up the loss himself, otiierwise B, tlie 
 remainder-nuui, Avould have to bear it. 
 
 9, A minor marries against the will of his parents and dies before 
 he comes of age. His father had placed money in savings bank to his 
 name, to be placed at his disposal when lie came of age. AVho has 
 legal claim to that money, and who to any other effects he may die 
 seized of ? 
 
 A. If the facts are all stated the father never lost his proj> 
 erty in the savings bank deposit, and may therefore reclaim it. 
 As to any property actually belonging to the minor, his widow 
 is entitled to her distributive share, which, in case there are no 
 children, is one-half, the other half going to the father. 
 
 10. A partnership existed between two persons, one of whom died 
 last July. Previous to his death, and in accordance with their old 
 business custom, an inventory was taken on the first of July. Accord- 
 ing to the terms of the partnership the surviving partner had 12 
 months from the commencement of the ensuing business season to 
 wind up the business and account for his partner's share in it. 
 
 1. Now, has he legally to the first of July next, or to the first of 
 January next, to wind up said business ? 
 
 2. Is the deceased partner to share in the business liable for any 
 debts contracted by the survi\^ng partner, in order to carry on and 
 wind up said business to the best advantage ? 
 
 3. Have the deceased partner's heirs any interest in the profits and 
 losses of said business beyond their direct interest in the assets as in- 
 ventoried at the time of his death ? 
 
 4. Can the heirs, or the person to whom assets were devised in 
 trust for said heirs, make any arrangement for the continuance of said 
 assets in said business, if satisfied that it is for their interest to do so ? 
 
 5. If so, in what form can they best arrange it so as to render it 
 safe and at the same time be of benefit to the business ? 
 
 A. 1. According to the contract the surviving partner would 
 
 have 12 months from about the date of death in which to wind 
 
 np the business, the " next season," being then the fall season, 
 
 hardly opened in July. 
 
 2. The estate would be liable for its share of losses or debts 
 incurred in winding up the business, and for these alone. 
 
 3. In the same way any profits accruing in winding np the 
 business must be equitably divided. 
 
HEIRS AND LEGATEES. 
 
 239 
 
 4. If the heirs are all of age, they can join witli the trustee 
 of the estate in any arrangement devised for the continuance of 
 the business. 
 
 5. No arrangement can be made in Avhich the property can 
 be absolutely safe, and yet be subject to the contingency of 
 trade. 
 
 11. John Smith died over 30 years ago survived by his second 
 wife, three children (minors) by his first wife, and several children by 
 his second wife. The last named received possession of all her husband's 
 property, which was small and personal property, and brought up and 
 educated all the children out of the proceeds, thereby considerably de- 
 creasing the original amount. She has always had entire control of the 
 money so left her, and is now living on same. Can the children by 
 the first wife at the death of their stepmother (the second wife) claim 
 any portion of the sum that may be left by her out of the money ori- 
 ginally received from their father, or leave the second wife's own 
 children a legal right to everything left by their mother ? 
 
 A. The children are all entitled to share alike in whatever 
 property descends to them from their father's estate. Only the 
 children of the second wife, if she dies intestate, are entitled 
 to any share in her separate estate, if such there be. 
 
 12. Ills. — In what proportions should an estate in Illinois, real 
 and personal, of a deceased gentleman, be divided among three chil- 
 dren (adults) and a deceased daughter's child (grandchild), and the 
 widow, a second wife, according to the laws of that State ? The four 
 children mentioned are his children by his first wife, he having no 
 children living by his second wife. The widow has three children by 
 a first marriage, the deceased gentleman being her second husband. 
 Do they share in the estate ? To complicate matters still more, in the 
 second marriages of these parties, the bride was his deceased brother's 
 wife, so that the children are own cousins and step-brothers and sisters. 
 
 A. If the husband died intestate, the widow will take one- 
 third of the estate, real and personal, and the remaining two- 
 thirds be divided (in four parts) equally between his children, 
 the grandchild taking it mother's portion. Her children by a 
 former husband have no share in this distribution, except as tlie 
 widow may give them her portion. The relationship between 
 the first and second wife will not affect the division of the 
 estate. 
 
 1 3. Ky. — A daughter resident of Kentucky dies, leaving mother, 
 sisters, and brother. By the laws of Kentucky, who are the heirs to 
 
240 
 
 HEIRS AND LEGATEES. 
 
 tlie property owned by the deceased, consisting of real and personal 
 estate ? 
 
 A. Under the laws of Kentucky, the mother is entitled to 
 one-half of the property, both real and personal, and the other 
 half goes to the brother and sisters in equal shares. 
 
 14. La. — What are the Lousiana laws in regard to the estate left 
 by a person who dies intestate ? What steps should the heirs of such 
 an estate take to get control of the same ? 
 
 A. The children of an intestate, whether of the whole or half 
 blood, inherit equally. Grandchildren divide the portion w^hich 
 would have come to their parents — that is, they take per stirpes. 
 If there are no descendants, all immovables which came by gift 
 from an ancestor, go back to the ascendants. If there are no de- 
 scendants, but father and mother, brothers and sisters, the estate 
 is divided into two equal ])ortions, and half goes to the father 
 and mother, and half to brothers and sisters. 
 
 The claimant of an interest in a Louisiana estate should ascer- 
 tain w^ho has been appointed administrator, and present the 
 claim to him. 
 
 15. S. C. — Supposing a man dies, leaving his property (consisting 
 of real estate and personal property) to be equally divided between two 
 legatees, A and B : A is a citizen and resident, B is not a citizen and 
 a non-resident of the United States ; can B legally come into possession 
 and dispose of the property willed to him ? Will you please tell me 
 if B can come into possession of the property in South Carolina ? 
 
 A. If the testator acquired his real estate prior to 1807, his de- 
 vise to an alien child or grandchild will be good according to the 
 laws of South Carolina, provided the devisee shall become a resi- 
 dent of the State within 12 months, and a citizen as soon as he 
 can under the laws. There is a provision also in favor of alien 
 widows ; under other circumstances B cannot take real property 
 under South Carolina law^, unless by virtue of some Federal treaty 
 provision with the country of which he is a native. By our 
 treaty with France B w^ould have the right, if a citizen of that 
 country, to take the devised property, and sell it to a citizen of 
 the United States. A clause in our treaty with Italy gives the 
 same right. As to personal estate, B can take without limita- 
 tion. If our correspondent wishes to go to the original source 
 
HOMESTEAD. 
 
 241 
 
 of information, he will need to provide himself with the South 
 Carolina Statutes and our treaties with foreign countries, 
 
 HOMESTEAD. 
 
 1 . What steps are to be taken in order to entitle a citizen of the 
 United States to become possessor of 160 acres of government land. 
 What is the first expense, has he any certain time to spend on it, and 
 has he any expense to meet after having lived on the ground for such 
 time, whatever it may be ? Also, what special conditions apply to 
 discharged soldiers ? 
 
 A. The first step is to select the land to be entered, and the 
 next to make affidavit before the Register or Receiver of the Land 
 Office in which the entry is to be made, setting forth that the 
 applicant is the head of a family, or is twenty-one or more years 
 of age, or has performed service in the army or navy of the 
 United States, that the application is made for his exclusive use 
 and benefit, and that it is made for the purpose of actual settle- 
 ment and cultivation, and not either directly or indirectly for 
 the use or benefit of any other person. On filing this affidavit 
 the fee is $5 if the entry is of not more than 80 acres, and $10 if 
 more. But a patent for the land cannot be obtained until five 
 years from the date of the entry, when he must prove by two 
 witnesses tliat he has resided on the land or cultivated it during 
 that period ; that no part of the land has been alienated, (fcc. 
 The law does not appear to exact any fee for the issue of the 
 patent. An honorably discharged soldier or sailor has six months 
 after locating his homestead and filing a declaratory statement 
 within which to commence his settlement and improvement, and 
 he may perfect title in one year, provided he served four years 
 in the army or navy, or was enlisted for that length of time and 
 discharged on account of wounds received or disability in- 
 curred in the line of duty. In other words, the term of his ser- 
 vice may be deducted from the five years' residence or cultiva- 
 tion required of other persons. A registry fee of 11 for each 
 declaratory statement filed ; a commission to be paid by the 
 homestead applicant, at the time of entry, of one per cent, 
 on the cash price as fixed by law of the land applied for, and 
 a like commission when the claim is finally established, and the 
 16 
 
HOMESTEAD. 
 
 certificate issued therefor as the basis of a patent. There is also, 
 it appears, an additional fee of #5 for this final certificate. 
 
 2. How and where may land be obtained under the Homestead 
 and Timber Growing " acts in the AVest ? What requirements are 
 necessary to oDtain land in this way ? What charges, if any, are you 
 obliged to pay on the land ? 
 
 A. The applicant may enter any unappropriated quarter section 
 of land for this purpose, make his affidavit and pay ten dollars 
 to the Register and Receiver. After ten years he must prove by 
 two credible witnesses that he has planted and for not less than 
 ten years has cultivated forty acres of the same in timber, the 
 trees being not more than twelve feet apart. He can then obtain 
 his patent. 
 
 3. 1. Cannot two or more families settle under the "homestead 
 law" on one-quarter section (160 acres) as a community, the land 
 oeing entered in the name of one of the families in question, and this 
 family at the expiration of the five years (when the land would belong 
 to it) dividing it, the pre-emptor giving to each of the other families a 
 deed for a proportion of the land at a nominal compensation, behaving 
 already derived benefit by being enabled to settle on the land through 
 the co-operation of the other families ? 
 
 2, Can two witnesses under these circumstances swear that the 
 party has lived five years on the land, and that it is not "alienated ? 
 
 A. The pre-emptor can take as many people as he chooses 
 with him upon the land, and he has not alienated it as long as 
 lie holds the title. He may, when the patent is issued to him 
 and the five years have expired, divide it among those to whom 
 he has promised it. This arrangement will in no Avay interfere 
 with the privilege. 
 
 4. V A. — Will you kmdly inform us whether the $2,000 exemption 
 from seizure under the Homestead act of Virginia covers stock of 
 goods in trader's hands, or relates to household goods exclusively ? 
 
 A. The exemption extends to property generally, but does 
 not protect goods or property against levy for the purchase 
 money of that particular property. 
 
HUSBAND AND WIFE, 
 
 243 
 
 HUSBAND AND WIFE. 
 
 (see also married women.) 
 
 1. I married a widow with four children, she having a house and 
 lot of her own. I had a foundation of brick put under it to make the 
 house good, but she still holds the house in her first husband's name. 
 
 She says to me now that 1 have no claim to the house or property 
 because it is in her first husband's name, and that she can do what she 
 likes with it. 
 
 She has four children by her first husband ; the eldest is a son un- 
 married and is about 20 years old ; the next is a daughter who is 
 married, and the other two are from six to nine years old. 
 
 Will you let me know what claim 1 have on the property ? 
 
 A. If the husband expended money upon lands of his wife in 
 his occupation, by erecting buildings or making improvements 
 thereon, the law will presume he intended it for her benefit, 
 and he cannot recover for the same." (Washburne on Real 
 Estate, vol. I, 335.) If the property should be claimed by the 
 children, after her decease, w^e are disposed to think that a claim 
 might be set up, in equity, to recover the value of the improve- 
 ments, as against them. 
 
 2. A makes transfer of his real and personal property to B without 
 consideration. B without consideration immediately transfers the same 
 property to A's wife. Is such transfer good as to the creditors of A, 
 and if not what remedy have they ? A claims that he is indebted to 
 his wife and adopts this mode of paying her. If he can prove this 
 would it make the transfer valid ? 
 
 A. Transactions of this sort are suspicious on their face, but 
 if there was a bona fide debt owed by A to his wife he had the 
 same right to pay her as any other creditor and need not have 
 taken the roundabout way adopted. The validity of the transfer 
 depends upon the original consideration between A and his wife. 
 If A's creditors believe there was none and are willing to stake 
 the costs of a suit upon this belief, their remedy is to bring an 
 action to set the conveyance aside, and subject the property to 
 their claims. 
 
 3. A man wishes to make his wife a present of all his househo'd 
 goods, furniture, paintings, silverware, etc. What is the simplest . 
 to do it to make the gift a legal one ? 
 
244 
 
 HUSBAND AND WIFE. 
 
 A. There is no difficulty in conveying a title to the wife as 
 against any but the creditors of the giver. To secure it against 
 the latter, we think a deed of trust or deed of settlement ui)on 
 the wife, must be legally executed. This can be readily done if 
 the giver is at the time solvent beyond any reasonable question. 
 
 4. Can a husband be held responsible for debts incurred by a firm 
 m which his wife has an interest, if said firm should fail ? 
 
 A. The statute of New York allows the wife to carry on busi- 
 ness in her own name and declares that no bargain or contract en- 
 tered into by a married woman in jmrsuance of this right, 
 "shall be binding upon her husband or render him or his proj)- 
 erty in any way liable therefor." 
 
 5. Is the husband legally responsible for the debts of his wife, 
 which were incurred by her before tlieii marriage ? 
 
 A. By the law of this State a suit may he l)rought against 
 the husband and wife jointly for any debt of the wife contracted 
 before marriage, but neither he nor his property (except such as 
 he may have acquired from her through such marriage) can be 
 held liable either for the debt or the costs of suit. 
 
 6. Is a mortgage or a deed made by a husband to his wife as valid 
 as if made to a third party, provided she has paid him its value ? 
 
 A. If a wife has a separate estate from which the purchase 
 money is paid, the husband's deed or other conveyance to her is 
 good in this State against all the world beside. If her sei)arate 
 estate, however, originally came from the husband himself, it 
 seems that creditors might question the conveyance. (Savage 
 v. 0'Xcil,44X. Y., 298.)' 
 
 7. Can a man's life insurance policy drawn in favor of his wife be 
 attached for debt of the husband before or after his death ? 
 
 A. In this State, unless the annual payment to maiatain the 
 insurance amounts to more than '11^500, and is made out of the 
 husban^J^s property, tlie policy is not liable for any claims against 
 the husband or his estate. In case the premium exceeds -1500 
 per annum only the excess can be claimed by the creditors. 
 
 8. I bought a house owned by a married woman'. T would like to 
 ask 'jou is it sufficient if she signs the deed, or is it law and necessary 
 that the husband must also sign it ? 
 
HUSBAND AND WIFE. 
 
 245 
 
 Is the law the same in such a case as if a married man sells prop- 
 erty, that he must have his wife to sign the deed also before he can 
 give a good title ? 
 
 A. If possessed of real property as separate estate, a married 
 woman may convey or contract in reference to it the same as 
 unmarried, and her covenants for title, if broken, bind her sepa- 
 rate estate. (Laws of 1860, chap. 90, sec. 3, as amended by 
 chap. 172, laws of 1862.) The husband's signature to the deed 
 is in this State, therefore, unnecessary, our progressive New York 
 State laws having in this respect given married women the ad- 
 vantage of married men. To avoid all dispute as to the absolute 
 title to the separate estate, however, it is quite as well for the 
 husband to join in the conveyance if he does not object. 
 
 9. A husband has his wife sign note in blank payable to himself^ 
 and fills it up afterward, writing on face of said note <• I hereby charge 
 my separate estate for the payment of this note," the wife not knowing 
 the amount or anything further in regard to its being a charge on her 
 separate estate. Is the wife holden for said note, or is it valueless to 
 holder ? 
 
 A. In the hands of a holder for value, the note would be good 
 against the wife's separate estate. When she signed she must 
 have intended her signature to have this effect ; and one who 
 signs a note in blank is just as responsible for it to an innocent 
 holder as if the writing preceded the signature. 
 
 10. A and B own a piece of property against which C (B's wife) 
 holds a mortgage for $10,000, and D an additional one of $1,500 
 against A's share. A being unable to make payment of the latter, B 
 buys his share of the property for $9,000, by agreeing to assume his 
 mortgages, and to give him a bond and mortgage in return for the 
 balance, $2,500. A being administrator, must apply for an order to 
 sell, and to save time and expense B's attorney forecloses (per agree- 
 ment) the 81.500 mortgage and buys in A's share for B for S6.500. 
 B receives his deed, and gives A his mortgage for $2,500 as above 
 mentioned, claiming that it is not necessary for his wife to sign, it being 
 a purchase-money mortgage. Is he justified in doing so ? Can this be 
 called a purchase-money mortgage ? Can a married man convey away 
 any part of his property without the knowledge and consent of his 
 wife ? Would it make the mortgage any safer if she signed ? 
 
 A. The mortgage would be more acceptable if signed by B's 
 wife, because that would prevent any dispute from arising on the 
 question. It appears to be a purchase money mortgage, but in 
 
246 
 
 HUSBAXD A XI) WIFE. 
 
 order to come within the provisions of the statnte, it must have 
 been executed at the same time witli tlie deed. With the ex- 
 ception of a mortgage for purchase-money, or tlie conveyance of 
 an estate the title of which rests only for an instant and for a 
 specific purpose in the grantor, we do not recall any other case 
 where a conveyance by a married man, in his own right, will bar 
 his wife of her right of dower, without her consent. 
 
 11. A sold B a lot in one of the cities of Florida for $2,000 and gave 
 warranty deed. He received S500 cash, and mortgage on the property 
 for balance. B's wife did not join in the mortgage, nor was she made 
 a party thereto. Has she any dower rights in the property until such 
 mortgage is paid ? Or, does said mortgage cover the whole property 
 without her being made a party, it being given for purchase-money," 
 though not so stated in the mortgage ? 
 
 A. The rule prevalent in many of the States that the vendor's 
 lien for purchase money upon the land sold and mortgaged is 
 superior to any rights which may be acquired by any of the heirs 
 or privies of the purchaser, and so superior to the wife's right of 
 dower, was adopted by the Supreme Court of Florida, in the case 
 of Bradford v. Marvin, 2 Fla., 468, and that decision appears to 
 be still the law. That being the case, the wife obtains no 
 dower until the purchase-money mortgage is first satisfied. 
 
 12. A loans B SI, 400 on a first mortgage. B's wife also signs the 
 mortgage but not the bond. B dies intestate, lea\T[ng a son. The in- 
 terest not being paid when due A institutes foreclosure proceedings, 
 and the property will be sold. Can A, if the sale should not realize 
 the amount of the mortgage, lay claim to a store which the widow has 
 commenced ? 
 
 A. If the store is paid for out of the property belonging to 
 the estate, it is subject to the claim of the mortgagee on the un- 
 satisfied bond. 
 
 13. If a married woman indorses her husband's note, can we 
 not hold her for the amount if he fails to pay ? If no. then would she 
 be holden if she signed a note jointly with him ? 
 
 A. In this State a married woman may bind lier separate 
 
 estate, either as a maker or indorser, if with her signature she 
 
 states this. 
 
 1 4. Conn. — Can, in the State of Connecticut, a wife legally execute 
 
HUSBAND AND WIFE. 
 
 247 
 
 a bill of sale on her own individual property (personal or real) without 
 knowledge or consent of her husband ? 
 
 A. Where the marriage has taken place since April 20, 1877, 
 a married woman in Connecticut may convey her real or personal 
 property without her husband's consent the same as if slie were 
 unmarried. If the marriage took place before that date the hus- 
 band must join in the Avife's deed. 
 
 15. Mass. — Can a married woman always residing in Massachusetts 
 dispose of her real estate without her husband signing the deed with 
 her ? 
 
 A. In Massachusetts a married woman can deal with and 
 convey her separate property, real or personal, the same as if she 
 were single. 
 
 1 6. N. J. — We are doing business with a house m New Jersey. 
 
 At the present time the said house is going through bankruptcy, and 
 business is now conducted in the name of the wife, under the style of 
 "L. & Co." L. wants to increase his line of credit, and proposes to 
 secure us by giving a five thousand dollar judgment note of his wife on 
 free and clear Pennsylvania lands. L. says he would not be able to 
 sign a mortgage with Mrs. L. until he gets his old matters settled. 
 Supposing the land to be of value, would this form be of sufficient 
 security ? 
 
 A. Neither the laws of New Jersey, where this married 
 woman resides, nor the laws of Pennsylvania, where the land 
 is situated, allow her to create a lien on real estate without the 
 signature of her husband. 
 
 17. N. J. — Can a wife devise real estate by will in the state of 
 New Jersey, and if not, who would inherit said real estate on her de- 
 cease, provided her husband survived her, no children having been 
 born to them ? 
 
 A. Married women in New Jersey may de\dse their separate 
 estate the same as if they M^ere single, except that they cannot cut 
 off the husband's right as tenant by courtesy where that exists. In 
 the above case the husband has no interest whatever in the wife's 
 real estate, and in default of a disposition by will it would de- 
 scend to her heirs at law, who are, there being no children, her 
 brothers and sisters, father and mother, etc., in the order named. 
 
 1 8. Va. — A, who is a trustee for an unmarried woman, loans money to 
 B, a trustee for the woman, and takes a deed of trust on real estate ; 
 
248 
 
 INFANTS. 
 
 before the return of the money by B the unmarried woman gets mar- 
 ried. Would it be necessary for her husband to join witli the 
 trustee and the woman in the release deed ? 
 
 A. By an act of the Virginia legislature passed in 1877, it is 
 made necessary for the husband to join with the wife in any contract 
 in reference to her real or personal property. Both should there- 
 fore execute the release with the trustee. 
 
 INFANTS. 
 
 1 . Will you please inform me at what age a young lady attains her 
 majority, and oblige. 
 
 A. Except where the common law rule has been changed by 
 statute, the age of majority for both males and females is 21. 
 The New York statutes validate certain acts done by persons un- 
 der that age, but the general rule is unchanged. An unmarried fe- 
 male of sound mind may make a will at 16, and a male at 18, in 
 this state (N.Y.). 
 
 2. Is a minor, doing business in his own name, responsible for 
 damage done through the negligence of his employees, and if not can he 
 be held responsible after he becomes of age for damage so done during 
 his minority ? 
 
 A. If a minor is in business and represents himself to be of 
 age when he is not, he will do well not to put in the i)lea of 
 minority to escape the legal consequences of his assumed posi- 
 tion. Infancy," as the condition of a minor is legally termed, 
 is no defense to an action not dependent upon contract. A minor 
 must answer for damages consequent upon his acts, the same as 
 if he were of age. 
 
 3. Can a minor be legally given the power of attorney to sign and 
 endorse checks and bills of lading ? 
 
 A. If the principal is of age, the attorney, being duly author- 
 ized, can bind him by his signature precisely as if he was not 
 himself an infant. 
 
 4. If a note is signed by a minor, to be paid when he is of age, can 
 it be collected of him or his father ? The minor has received no value 
 whatever and has been led to sign the note under false representations. 
 
 A. Payment of a note given under such circumstances can- 
 
INSOLVENCY. 
 
 249 
 
 not be legally enforced of cither the mmor or of his father at any 
 time. As an acknowledgment of debt it is worthless. 
 
 5. Please inform me at what age the hability of parents ceases as 
 regards debts contracted by their children. Does the sex make any 
 difference as regards the time ? 
 
 A. Parents are liable for necessaries furnished their children 
 during their minority, but not even at this age for every debt a 
 child may choose to incur. At the age of 21 this liability ceases 
 for either son or daughter. 
 
 6. Is it necessary for a minor to have a passport in traveling ? If 
 so, can I obtain one, my father not being an American citizen ? 
 
 Is it necessary for me to take out "first papers," that is, two years 
 before I can become an American citizen, or can I at once become nat- 
 uralized at 2 1 3^ears of age, having resided here 1 2 years ? 
 
 After becoming an American citizen at majority, can the authorities 
 of Germany hold me for military duty if I visit that country for a stay 
 of less than two years, my father having emigrated when I was 8 years 
 of age, but he has never been naturalized here ? 
 
 A. A passport is not necessary, and could not be obtained. 
 
 When you reach the age of 21 you can declare your intention 
 and take out full naturalization papers on the same day. 
 
 The United States will protect its citizens. If after becoming 
 an American citizen as aforesaid, you return to Germany and 
 stay there two full years, the government there has the right 
 under treaty with us to assume that you have renounced Ameri- 
 can protection, but within that date you are safe under your 
 American citizenship. 
 
 INSOLVENCY. 
 
 (see also assignments.) 
 
 1 . Does the acceptance of a dividend from a bankrupt estate in this 
 state (N. Y.) discharge the debt ? 
 
 A. The acceptance of a dividend does not necessarily discharge 
 the debt. 
 
 2. A gets a note from B, indorsed by said B, drawn to B's order 
 by C. B fails in business and pays his creditors 30 per cent.; before 
 payment of said 30 per cent, the note comes due and C lets note 
 go to protest ; the note, uncollectible now, may be worth som.ething, 
 possibly its face, in two or three years. Is A entitled to 30 per cent, 
 on the amount of note, he retaining said note ? Or must he give up the 
 
250 
 
 INSOLVENCY. 
 
 note to B on payment of the 30 per cent.? Or can A be compelled to 
 have the note valued by court and then receive 30 per cent, only on 
 balance between valuation and face of said note ? 
 
 A. A can bring suit against l)oth B and C, or if B goes into 
 bankruptcy, can prove liis wliole claim against him, take the 30 
 per cent, dividend, and recover the balance of C. But if he com- 
 promises his whole claim on the note for 30 per cent., he cannot 
 retain any account against the other parties. 
 
 3, A owes C as per his note due in New York next May, upon 
 which note A's son B is indorser. Some second mortgages and worth- 
 less stocks are also given as security for the note. In September, 1878, 
 B, the indorser. went into voluntary bankruptcy, listing this endorse- 
 ment among his liabilities and giving in no assets. A has considerable 
 insurance on his life for the benefit of B and other heirs, which poli- 
 cies are now quite valuable and on wnicli no annual premiums are due. 
 Can B's interest in these policies be made liable for his debts, or can 
 the fact that he does not give them in as assets be used to prevent his 
 discharge in bankruptcy ? If B had not listed this endorsement among 
 his liabilities and should resist their proof against his estate, could it be 
 held as a debt against him ? B's father is known to be insolvent. 
 
 A. The mere fact that B omitted his interest in the life insur- 
 ance policy from his schedule is not sufficient to prevent his dis- 
 cliarge, but the omission must be shown to be willful ( in re 
 Eidom, S B. R., 106 ; in re Connell, 3 B. R., 443 ; in re Smith, 
 13 B. R., 256). An omission of property by accident or mis- 
 take will not prevent a discharge. (Loud v. Pierce, 25 Me., 233; 
 Suydam v. Walker, 16 Ohio, 122.) But whenever an asset is 
 thus omitted, the creditor may oppose the discharge, specifying 
 the omitted item, and on trial of the issue it seems clear to us, 
 though we can cite no authority on this point, that the l)ankrupt's 
 continued neglect to amend his schedule so as to include the 
 policy would go far to prove the Avillful character of the omis- 
 sion and thus establish the statutory bar to a discharge. 
 (Sec. 5110, subdivision second, national bankrupt act.) A dis- 
 charge being withheld, the interest of B in the policy could be 
 reached by his creditors, it having been held that the beneficiary 
 lias a vested interest before the death of the person insured. If 
 the indorsement had not been scheduled as a contingent liability 
 it would still subsist as an obligation in spite of a general disr- 
 charge, because the certificate is a bar only to debts which were 
 
INSOLVENCY, 
 
 251 
 
 or might have been proved, but not against personal engage- 
 ments which were not provable. (Murray v. De Rottenham, 6 
 Johns. Ct., 52 ;) and a claim against a bankrupt as indorser can- 
 not be proved before the liability becomes fixed. (In re Lodon, 
 4 B. R., 190.) In the above case the liability does not become 
 fixed until next May. If the final dividend has not been declared 
 however, at the maturity of the note, and default, the debt might 
 be pi'oved, (Sec. 5069,) and in that case it would be barred, 
 whether it was in fact proved or not. (Hardy v. Carter & 
 Humph., 153 ; R(3gers v. West Ins. Co., 1 La. An., 161.) 
 
 4. We buy wheat for parties in an interior town, upon their orders, 
 drawing upon them at thirty days, from time to time, for the cost 
 thereof with our commission added. They fail, leaving $1,400 of 
 these notes unpaid. Must we come in as common creditors under the 
 law, or do the above facts give us any preference ? 
 
 A. The debt is not a preferred or privileged obligation. 
 
 5. Can a merchant in Rhode Island, sell his stock of goods 
 to another person and let the goods remain in same store, and 
 then carry on the business as agent and avoid paying his creditors ? 
 Will it alter the case if the person to whom he sells is or claims to be 
 a creditor ? 
 
 A. His creditors can throw him into bankruptcy and recover 
 the property for the benefit of his estate, provided, as appears, the 
 sale Avas made in view of insolvency. 
 
 6. An American merchant having a branch house in France, which 
 is conducted by his partner (also an American), fails and takes the 
 bankruptcy act ; is the house also released through this act of his debts 
 in Europe ? 
 
 A. The practice differs a little in foreign countries, but as a 
 rule a discharge in bankruptcy here will not be recognized in 
 foreign courts as applicable to debts contracted there. This 
 applies as well to houses that have no foreign partner, as to one 
 that has. An American merchant who bought goods in Paris, 
 for which he has not paid, and afterward obtained in tliis country 
 a discharge from his debts, might be prosecuted if he afterward 
 visited France, and his discharge here would not be accepted in 
 bar of the claim by the French courts. 
 
 7. A and C sold B goods in 1876. 1877, and 1878. B held a contract 
 for the farm he was on. In the fall of 1877 C takes an assignment of the 
 
2u2 
 
 INSOLVENCY. 
 
 contract and pays the amount due, on the farm, being $500, and takes a 
 deed in his own name, the farm being worth at the time $1,000 and 
 will bring to-day $1,000. Now has B an equitable share in the prop- 
 erty, and can A and C have said deed set aside by paying C the amount 
 he paid on the property, interest included ? C had no claim against B 
 in anv shape. This transaction was done in order to keep the property 
 out of the hands of B's creditors. A and C have proof to show this. 
 How should A and C proceed ? A receiver has been appointed in B's 
 property. 
 
 A. If in saying that C had no claim against B in any sha})e, our 
 correspondent means to affirm tliat B received no consideration 
 for his assignment of the contract to C, and tlie proof in other 
 respects corresponds with tlie statement, we think tlie transfer 
 can be set aside in favor of the creditors. Tliis can only be done 
 by means of a suit, w^hicli the receiver is entitled to bring. 
 
 8. The firm of A & W made'an assignment both as co-partners and 
 individually. The assets of A proved to be sufficient in amount to pay 
 the principal and interest in full of the debts proved and allowed 
 against the individual estate. Must the interest on the same be allowed 
 before the excess is turned over to the estate of the firm, the assets of 
 which fall short of meeting its habilities ? 
 
 A. This has been legally decided : " If the separate estate of 
 one partner is more than enough to pay his sejiarate debts, at 
 the amounts proved as they stood at the time of the assignment, 
 the surplus of such separate estate over such debts is to be 
 added to the partnership estate, and applied to the payment of 
 joint debts before paying interest on the separate debts after that 
 time. " In re Berrian et al., 44 How. Pr., 216 ; S. C, 6 Ben., 297. 
 
 9. Will you inform me what is the intention of the bankrupt law 
 of this State in allowing a bankrupt to prefer certain creditors to the 
 detriment of others ? I have not been able to get this information 
 from any person I have asked about it. The intention of every law is 
 a good one, but here I cannot perceive it. It appears to me to be the 
 means in the hands of a bankrupt to defraud Ids creditors. 
 
 A. The right of preferring a particular creditor does not be- 
 long especially to the law of New York, but existed at com- 
 mon law. An English judge, in endeavoring to account for 
 its existence, said : " The right has been allowed, perhaps, on 
 the principle of humanity ; or in favor of just debts, to exclude 
 debts in law not strictly ex dehlto justitice. " The judge never- 
 
INSOLVENCY. 
 
 253 
 
 theless disapproved tlie principle, and it is now in pretty general 
 disfavor, having been abolished in England and in many of our 
 our States. 
 
 10. If a party wlio has filed his assignment should become heir to 
 property by the death of a relative while proceedings are pending, 
 would said property go to the hands of his assignee for distribution to 
 his creditors ? If said assignee should fail to get his discharge, would 
 said property be liable for the old debts ? 
 
 A. The earnings and acquisitions of the insolvent subsequent 
 to the coniniencenient of the proceedings are his own, subject to 
 the eventual discharge of the assignee. If he does not succeed 
 in obtaining such discharge, they remain liable to execution or 
 attachment by the former creditors, precisely like the property 
 he previously held, Meays v. Man. National Bank, 4 B. R., 446 ; 
 S. C, 4 B. R., 660 ; S. C, 64 Penn., 74. 
 
 11. I loaned a friend my check for $100 about three months ago, 
 and he promised to return it in a few days. He handed me a small 
 box containing some jewelry which he said I could hold as security. 
 The value of the jewelry is about $40 or $50. Can I do anything with 
 the jewelry, or am I bound to keep it ? I do not see any prospects of 
 getting my money. 
 
 A. The safest way is to bring suit and recover judgment and 
 then to sell the pledged jewelry under execution. The creditor 
 can buy it in if he likes at the auction sale, and hold the debtor 
 for the remainder that is due. 
 
 12. A buys $500 worth of merchandise from B, and in payment 
 gives him (B) a four months' note, which B indorses and discounts in 
 bank. B afterward buys $1,200 worth of merchandise from A on 
 open account, thirty days' time, and before this elapses and A's note 
 matures, A fails and makes an assignment. Will the $1,200 that B 
 owes to A on open account be an offset to B's note ? 
 
 A. If B distinctly bound himself to accept the note as " pay- 
 ment, " and action on A's claim was begun before the note ma- 
 tured, there may be a question whether the two demands could 
 be set off against each other. On the presumption, however, 
 that there was no distinct agreement to accept the note as " pay- 
 ment " B has a right to proceed against A for the original debt 
 in case of the dishonor of the note, and in that case the debt 
 constitutes a good counter-claim against the demand of A. 
 
254 
 
 INSOLVENCY. 
 
 13. Does the pajTnent of a dividend by a State assignee operate as 
 a renewal of an obligation under the statute of limitations ? 
 
 A. It docs not. Pickett v. Leonard, 34 N. Y., 175; Stuart 
 V. Foster, 18 Abb. Pr., 305. 
 
 14. I am preferred creditor of A (deceased) by his will. After the 
 death of A it was found that he was insolvent and a receiver was ap- 
 pointed, but nothing further has been done. I have discovered some 
 real estate which is still on record in the name of A in another county. 
 Can 1 sue and get a judgment (the claim not being disputed) and sell 
 the real estate, or must 1 compel the receiver to dispose of the real 
 estate and apply the proceeds to the payment of the preferred creditors ? 
 
 A. If by " receiver " is meant an assignee in bankruptcy, 
 the preferred creditor cannot collect liis debt out of the real es- 
 tate in question, because it is an asset to which the assignee is 
 entitled. And if it is correctly said that a " receiver " has been 
 appointed, we do not see that he is any better off. If an admin- 
 istrator is meant, and the creditor is entitled by lapse of time to 
 bring an action, superior diligence in getting judgment and 
 issuing execution against the property would no doubt be re- 
 warded. 
 
 15. A, B & Co. are in business as partners, C being the company 
 and capitalist. A, B & Co. issue notes to be and which are discounted 
 and held by different banks; all of which are endorsed by C. C died, 
 about a year ago, with no will, and his death compelled the remaining 
 partners to make an assignment under the State Laws (New York) 
 and afterward to go into voluntary bankruptcy. They, A and B, 
 now seek to have their creditors sign for their discharge, but the 
 banks hold that by so doing they release the indorser, which in this 
 case is C, who is also one of the makers. The question is, can the 
 banks sign for the discharge of A and B, and still collect of the estate 
 of C, as one of the makers of said paper, even if it does release him of 
 being an indorser ? 
 
 A. A statute of this State, (X. Y.,) expressly authorizes credi- 
 tors to compromise with one or more members of a partnership, 
 without releasing the other members, and the provisions of the 
 same act are extended to joint debtors in general. (Chap. 257, 
 Laws of 1838.) There have been, moreover, various decisions 
 elsewhere, which are cited by Daniel in his work on Negotia- 
 ble Instruments, as establishing the rule that " a release of one 
 of two joint debtors will not discharge the others if the holder's 
 
INSOL VENCY. 
 
 255 
 
 rights against them are expressly reserved. " (Daniel, sec. 1295.) 
 We are, therefore, clearly of the opinion that the banks may, by 
 a properly worded release, discharge A and B without detriment 
 to tlieir claim against the estate of C. The same object may be 
 accomplished by a covenant not to sue A and B. 
 
 1 6. Can a member of a bankrupt firm obtain an individual legal 
 release from the creditors of the firm ? If so, does the release cover 
 the remaining members of the firm when it expressly states to the con- 
 trary ? 
 
 A. Such a release has been held good to effect the object in- 
 tended, and no more ; but a more certain way is to give the person 
 intended not to be released a covenant not to sue him for his 
 debt. This the law construes the same as a release to the coven- 
 antee, but not to his joint debtors. 
 
 17. A & Co. suspend payment and offer 25 percent, which the 
 creditors refuse, asking 50 per cent. ; nothing definite being arrived at 
 in the way of settlement, A & Co. continue business under the name 
 of B & Co., using the assets of A & Co., and after a short while again 
 fail. What rights have the creditors of A & Co. in preference to those 
 of B & Co. ? Is not their claim on the assets of A & Co. intact ? 
 
 How long after the failure of a concern is a partner liable for the 
 debts in the event of no compromise ? 
 
 A. If the parties in both are exactly the same there would 
 be no preference given to either creditors. But if otherwise, the 
 creditors of B & C would have the preference, if given to either. 
 The limit of liability is the usual statute of limitations. 
 
 1 8. We got into diflQculty and made a settlement with our creditors 
 under a deed of composition and discharge, which was confirmed by 
 the Judge of the Insolvent Court here. One creditor only refused to 
 accept the composition — a New York house. Can they in the event of 
 our going to the United States, take proceedings against us and recover 
 the amount of their account ? Is our discharge from the Insolvent 
 Court here binding on them ? 
 
 A. If the debt was contracted here a discharge under a com- 
 promise or any other form of bankruptcy proceedings in Canada 
 will not prevent a successful suit by the creditor if the debtor 
 comes into this jurisdiction. If the debt was contracted in Can- 
 ada and due to a party here, it is not so free from doubt. In 
 England and France a foreign discharge in bankruptcy would be 
 
256 
 
 INSOLVENCY, 
 
 a bar to such a case. Jiidg-o Betts, United States District Court 
 Southern District of New York, in the case of Augustus Zarega 
 (1 Legal Obs., 40, note), said that a foreign discharge in bank- 
 ruptcy does not l)ar a debt contracted here, or due to a citizen of 
 this country, but this was only a dictum, and the common im- 
 ])ression has been that if the debt was contracted al)road, a dis- 
 cluiro-e there would l^e a bar to its recovery an v where. 
 
 19. Three years ago I, J. T. A., owed A & Co. a sum of money, 
 and to secure them I had a policy of insurance taken out which I as- 
 signed to them for security. One year afterward A & Co. failed in 
 business and assigned tlie pohcy to J. S. and T. M. Shortly afterward 
 I was unable to pay the premium upon the policy and it was returned 
 to the company, and a paid-up policy was issued in its place ; the policy 
 was written in my name, but in the body of the policy is the following : 
 For the benefit of J. S. and T. M., trustees for the creditors of A 
 & Co., as collateral security for the amount of the demands of A k Co., 
 subsisting against said J. T. A. : surplus, if any, for the benefit of said 
 J. T. A.'s wife, if she shall survive him." I have also failed, and gone 
 through bankruptcy and been discharged. The trustees, S. and M., 
 still hold the policy of insurance for the demands of A & Co. against 
 me. As 1 have been discharged by the court of all my indebtedness, 
 what will become of the policy held by the trustees — will it come back 
 to my estate at my death, or will it go for the benefit of A & Co.'s 
 creditors through the trustees ? It seems to me from the manner in 
 which the policy is written that A & Co., who have assigned all their 
 claim in the policy, and who are now dissolved and out of business, can 
 have no claim, as they have no existence as a firm of A & Co. or other- 
 wise. Nor can the trustees have any demands after I have been dis 
 charged, such discharge canceling such indebtedness ; the collateral 
 is only a contingent security depending upon my payment, or to be col- 
 lected after my death. When the trustees present the policy to the 
 insurance company for payment, would not the company require them 
 to show my indebtedness to A & Co. before they would pay the policy ? 
 And as there would be no indebtedness existing at that time, would 
 they pay the amount to the trustees, or what would become of it ? I 
 am fully aware that a discharge in bankruptcy does not alfect a party 
 who holds collaterals such as stocks and bonds, etc., or prevent him 
 from selling or realizing on them at any time to secure his claim, but 
 the above case seems to be a contingent one and of a somewhat different 
 character. 
 
 A. Tlie contingency in the above case affects the value of the 
 policy, but not its title. It appears to us tliat the ownersliip be- 
 came absolute in A & Co. at all events, upon the adjudication in 
 bankruptcy. Could the assignee of J. T. A. have laid claim to 
 
INSURANCE. 
 
 257 
 
 the policy as an asset of his estate ? We think not. And if not, 
 it was because no title to it remained in J. T. A., except to the 
 ])0ssible surplus after the payment of A <fc Co.'s debt. The dis- 
 solution of this firm would not affect the title of their assignee 
 before dissolution. A & Co.'s debt was not discharged, because 
 it Avas already paid, so far as the policy would pay it, before the 
 discharge took effect. The policy must be looked upon as the 
 undertaking of a third party to pay the debt if the principal did 
 not, and it makes no difference that the time of payment was 
 made to depend upon a future event. 
 
 20. A is employed at a weekly salary by a firm that is embarrassed. 
 They wish him to make a trip for them, selling goods on salary, they 
 paying his expenses. He may be gone several months, when there 
 will be due him about $300. In case the firm fails before his return 
 can he collect the amount due him in full, or must he come in with the 
 other creditors ? Is there any limit to the amount a workman is 
 allowed in full for services where employers fail, in case the money has 
 not been put in the business ? 
 
 A. There is no provision in the State insolvent laws, so far 
 as we know, for the payment by preference of clerk's or laborer's 
 hire. 
 
 21. Under what circumstances can creditors set aside assignments 
 made by debtors, and appoint an assignee of their own selection ? 
 
 A. Since the repeal of the bankrupt law, only in case of mani- 
 fest fraud can an assignment be set aside in this State. 
 
 INSURANCE. 
 
 FIRE. 
 
 1, A instructs an insurance broker, to insure a given sum. If 
 the insurance company issues a policy under this order without collect- 
 ing the premium, giving credit to the broker, does the policy hold the 
 company in case of loss ? 
 
 A. It has been legally decided that if the broker refuses to 
 pay, the company may sue the insured for the premium and col- 
 lect it of him, although he has already paid it to the broker. Or 
 the company, if such payment is delayed or refused, may give the 
 insured notice and cancel the policy. But until this is done the 
 17 
 
258 
 
 INSURANCE. 
 
 policy will hold good, and in case of loss the company is as much 
 bound as if the premium had been paid. 
 
 2. In case of fire where a party holds the policy or renewal receipt 
 of a company, but has not yet paid the company, in that case does the 
 insurance hold good ? 
 
 A. A fire insurance company that luis issued a policy or a re- 
 newal receipt without having actually received the premium, is 
 held liable in case of loss, on the ground that it has granted a 
 voluntary credit to the insured. But the company has the right 
 at any time to demand payment, and if this is refused, to cancel 
 the policy or renewal, and after notice to that effect, is no longer 
 bound by it. 
 
 3. A buys a house and lot for $4,000, but borrows half of the pur- 
 chase money from B, for which he gave B an ordinary promissory note, 
 with a fire insurance policy for $2,000, the amount of the policy. At 
 the expiration of the $2,000 policy, or two months after its expiration, 
 B, the note holder, sends to the insurance agents the amount of pre- 
 mium required to renew a collateral insurance for one-half the amount 
 of the note he holds, that is, for $1,000. Both the policies read pre- 
 cisely alike, both giving owner's (deed holder's) name, and both having 
 written on the face by the insurance agent, " Loss, if any, under this 
 policy payable to B as collateral security." Now if B has renewed this 
 insurance, with the amount reduced as stated, and has paid for his own 
 protection and security, without having notified the owner, is the policy 
 valid ? 
 
 A. So far as appears from the above statement of the case, 
 B has no interest, legal or equitable, in the house and lot in ques- 
 tion, and therefore not an insurable interest. He can only take 
 the insurance money by direct assignment from A. We are ac- 
 cordingly of opinion that a policy obtained under the circum- 
 stances stated would not bind the company to pay it, if they 
 chose to contest it ; and we do not see that notice to A would 
 mend the matter, unless he not merely assigned the policy as de- 
 scribed, but covenanted to keep it alive. 
 
 4. I have my insurance placed through a broker, to whom I pay 
 the premiums but who receives his brokerage from the insurance 
 companies, and he brings me policies duly signed by the proper officers 
 of the companies. Can they compel me to pay it again ? and in case 
 of a fire can they refuse to pay the insurance ? I ask the question be- 
 cause I am told they can so refuse, while it appears to me, that as they 
 
INSURANCE, 
 
 259 
 
 have their protection in their own hands by refusing to give up the 
 poHcy until paid for, that if they do so they assume the risk of the 
 broker paying them and not the insured. 
 
 A. The policy provides that the broker shall not in any case 
 be considered as the agent of the company, and the courts have 
 recognized this as a valid part of the contract. The company by 
 delivering the policy without paying, makes itself liable for the 
 time, as it thus virtually gives a credit to the policy-holders. It 
 may at its option then demand payment and collect the premium, 
 although the insured has already paid the broker ; or, if payment 
 is refused, it may cancel the policy on notice to that effect. But 
 until such demand and notice of cancellation the policy will hold, 
 although the premium has not been paid. 
 
 5. A has been insured against loss bv fire in a certain insurance 
 company. Before the expiration of his policy he applies to another in- 
 surance company, in which he takes out a policy. A does not under, 
 stand English. On the evening before the expiration of the first-named 
 policy, the agent of the first insurance company calls with receipt for 
 renewal. A produces the policy of the second company and asks if it 
 is in payment for that one. Agent replies " yes," takes the money and 
 a few hours after sends him a policy. Next day A finds out he has 
 been misled by the agent, calls on the first company and demands the 
 return of the premium, insisting that he has been the victim of sharp 
 practice at least, and returned the policy. After much talk and induce- 
 ments of a reduction not accepted by A, the first company returns the 
 premium, less commission and one month's premium, short rate. 
 
 A. If the Agent " here mentioned is an insurance broker, 
 the insured has no redress, since the underwriters in all their 
 contracts expressly stipulate that all such persons shall be con- 
 sidered the agent of the policy-holder, and not of the company. 
 But if he is a clerk in the service of the underwriter, the man 
 who paid the money may sue for and recover it, as he paid it 
 under a mistake, to wiiich the said receiver contributed. 
 
 6. 1. A owns a house and insures it in his own name. He subse- 
 quently deeds it to B, w^ho immediately transfers the title to the wife 
 of A for $1 consideration. Both deeds are placed in the custody of 
 C to hold for a contingency in escrow, no notice being given to the 
 insurance company. In case of loss, is the insurance company liable, 
 and why, or why not ? 
 
 2. In case the above premises are mortgaged, how is the interest of 
 mortgage secured ? 
 
260 
 
 INSURANCE. 
 
 A. 1. If the deed was not delivered, the title is still in the 
 original owner, and the insurance in his name will hold. 
 
 2. If the policies were assigned with the loss ])ayal)le to the 
 mortgagee, and the consent to such assignment Ijy X\w under- 
 writer is indorsed thereon, the policies will hold to the extent of 
 the latter's interest, even if the owner had transferred the rest 
 of his title and interest, since the transfer is subject to the mort- 
 gage. 
 
 7. To what extent are insurance companies responsible under their 
 policies as now issued in this city (X. Y.). supposing a loss of $75,000 
 occurs on a stock of $150,000 which was only insured for $75,000 ? 
 By answering this in your columns you will oblige a subscriber. 
 
 A. There are two forms of policy, one containing a clause 
 which limits the liability of the underwriter to the proportion of 
 any loss, which the insurance bears to the whole value of the 
 property. With this clause in the policy the insured above 
 would only obtain $37,500 on his loss of $75,000. But in a 
 proper policy drawn without this clause, the insured would 
 recover the full amount of his loss. Most of the ordinary poli- 
 cies are drawn to meet the latter interpretation. 
 
 8. Is a shipper who had insured liis goods under floating fire policy 
 *' covering all risks not specifically insured or covered by marine insur- 
 ance," guilty of negligence ? 
 
 Does the fact of taking for a/? the goods, a bill of lading, "ship- 
 ped by A B to be laden on board the steamship C," or any other 
 steamship, of that line, terminate the floating insurance, not only as to 
 that part of the goods upon which by terms of the policy marine insur- 
 ance had attached, but also as to that part remaining upon the wharf ? 
 
 A. If the floating policy did apply to and covered the goods 
 to which the marine policy did not apply, then the shipper was 
 not guilty of negligence. 
 
 9. Would an iron safe be included as household furniture in set- 
 tHng an insurance loss, covered by policy specifying " household and 
 kitchen furniture, useful and ornamental? " Also whether a house is 
 untenanted or unoccupied in such a sense as to affect insurance claim, 
 when it is left tor a day or two in charge of a servant living in a lodge 
 adjoining ? 
 
 A. If an iron safe, not part of the realty, is used as a piece 
 of household furniture, in which to store the silver and other 
 
INSURANCE. 
 
 261 
 
 valuables of the household, we can see no reason why it is not 
 properly included in the description. The old policies generally 
 provided that in case of fire the insured " shall deliver as partic- 
 ular an account of the loss and damage as the nature of the case 
 will admit," and this is all that can be exacted. Leaving the 
 house for a day or two in charge of a servant living in an adjoin- 
 ing lodge, is not, in our opinion, to bring it into the list of houses 
 " untenanted and unoccupied." 
 
 1 0. An ocean steamer, insured under fire policies only, takes fire 
 in her lower hold while loading cotton at a southern port. To extin- 
 guish the fire and prevent a total loss, the steamer is flooded and sunk 
 at her berth ; is afterward raised, cargo discharged, cared for and sent 
 to its destination in same steamer, and is sold to determine the loss on 
 the same. An adjuster states the usual " general average " claim against 
 the steamer, freight and cargo, which embraces such costs as the extin- 
 guishing of the fire, raising the vessel, unloading and reloading cargo, 
 and damage thereto, etc. Please state the obligations of the fire policies 
 to repay the steamer's owners for the contribution assessed against her 
 in the '^general average." 
 
 A. It is hardly proper for us to decide a question which is 
 before the courts, perhaps in the very case to which our corre- 
 spondent refers. We refer to the claim of the owners of the 
 steamer George Appold against certain Baltimore fire insurance 
 companies for a similar loss.* The fire underwriters, while will- 
 ing to pay the loss by fire, and a reasonable proportion of the 
 expenses of extinguishing it, have, as far as we know, declined 
 to recognize their liability for general average, such as is 
 acknowledged in marine insurance, and the case we have noted 
 will probably be carried up to determine tliis question. 
 
 1 1 . Some time ago the curtain in my parlor caught fire, completely- 
 destroying one chair, shade, cornice, etc., and burning a hole in the car- 
 pet about a yard square, and damaging the hall carpet by water about 
 two yards. I am insured for $1,500. Now what I should like to know 
 is: Can the insurance company refuse to pay for the cornice because it 
 is fastened to the wall ? The house is insured by the landlord. The 
 carpets being only partially damaged, am I not entitled to have them 
 replaced ? The underwriters claim that they are only compelled to re- 
 place what is actually burned, thereby making the carpets worth about 
 one-half their previous value. I claim that I am entitled to have both 
 carpets replaced in full, also to have cornice paid for. Am I right ? 
 
 A. The cornice is part of the furniture insured, provided it 
 * Since decided in favor of the Insurance Company. 
 
262 
 
 INSi'HAiXCE. 
 
 is attached in such a way as to be removed when the tenant 
 leaves. The measure of the damage is not the new vahie, but 
 the existing cash value of the articles ruined, or if damaged, the 
 difference between their previous cash value and their present 
 worth. The underwriter would not be expected, and is not 
 liable, to furnish entire new carpets in the case described, l)ut to 
 pay the cash value of the damage. 
 
 12. Do fire insurance companies pay the full amount of the policies 
 of insurance regardless of the proportion the amount of insurance bears 
 to the whole stock of merchandise insured ? For illustration, say I 
 have a stock of merchandise worth $100,000, and have insurance there- 
 on of S75,000. Suppose S75,000 of my stock destroyed or damaged 
 by fire •, in that case do I get $75,000 from the insurance companies, 
 or only three-quarters of $75,000, that being the proportion of insur- 
 ance on the whole amount, viz.: $75,000 on $100,000 ? 
 
 A. In an ordinary fire insurance ])olicy a person who insures 
 $75,000 on property worth $100,000 will l)c paid the extent of his 
 loss, up to the whole amount of his insurance. But there is a 
 kind of policy containing a clause that provides for a payment of 
 only such proportion of the loss as the amount of insurance bears 
 to the total value of the property. Under such a policy, a per- 
 son who insures $50,000 on property worth $100,000, would only 
 receive $25,000 in case of an actual loss of $50,000. 
 
 13. A policy of fire insurance contains the following clause: 
 
 No insurance, wlietlier original or continued, shall be considered as binding 
 until the actual payment of the cash premium. But when a note is given for 
 cash premium it shall be considered a payment, provided the payment is made 
 when (hie. And it is hereby expressly stipulated and agreed, by and between 
 the parties, that in case of loss or damage by fire to the property herein insured, 
 and the note given for the cash premium, or any premium, or any part thereof, 
 shall remain uni)aid or past due at the time of such loss or damage, this policy 
 shall be void and of no etfect. 
 
 1. A note is given for premium at 90 days and the party fails to pay 
 when due, the policy thereby becoming void. Can the company collect 
 the whole note, the forfeiture of policy being caused by no action on 
 their part ? 
 
 2. If note is paid after maturity does this subsequent payment, in law, 
 reinstate the policy ? 
 
 3. A gives his note for premium payable at 90 days. Six months 
 after maturity, A sells property insured"^ to B, and transfers policy to 
 him. The company, not recollecting the holding of A's note, consents 
 to the transfer by indorsement. In case of fire is the company liable to 
 B, when neither has paid one cent of premium to the company, and 
 when a forfeiture of policy existed at the time of A's transfer ? 
 
INSUBANCE. 
 
 263 
 
 4. If the company credit a note with two or three different payments, 
 and a fire occurs, is the company Hable if any part of the note is 
 unpaid ? 
 
 A. 1. There is here a partial failure of consideration for the 
 premium note, and it is possible, by reckoning short rates of 
 insurance, to apportion the amount of recovery to the executed 
 part of the contract ; yet as the maker of the note would have 
 to plead his own default as the cause of the failure of considera- 
 tion, it does not appear to us that the defense could be admitted, 
 and we think the company could collect the entire note. 
 
 2. Payment of the note after maturity, and therefore after 
 breach of the contract and forfeiture of the policy, could not be 
 forced on the company so as to revive it, but if received without 
 objection would probably be held a waiver of the breach and 
 forfeiture, and reinstatement of the policy. 
 
 3. If the company's consent to the assignment of the policy 
 could have misled a diligent purchaser as to its validity, it is 
 likely they would be estopped to deny what their action had 
 apparently affirmed ; but if B could have ascertained by inquiry, 
 as it seems to us he might, wliether or no the policy was a valid 
 one, it does not seem to us to be a fit cause of estoppel, and the 
 company ought not to be bound. 
 
 4. By the contract as contained in the clause above cited, if 
 the loss occurs after maturity of the note, and any part of it 
 remains unpaid, the company is not liable. We suppose no 
 question is raised as to its liability for loss before maturity, but 
 if so, we are clearly of opinion that there is no room for such a 
 question. 
 
 14. On a loss by fire of a property at Flatbush, L. I., the plaintiff 
 is a mortgagor for $10,000 on a hotel property so destroyed, of which 
 the owner is a woman under age ; the guardian, the mother, refuses to 
 make proof of loss. The court hold that proof of loss must be made 
 by the owner of record. As such owner refuses to make such proof, 
 what is a mortgagor to do under such circumstances, or what recourse 
 has he ? What is our remedy ? It seems to us that if this be law, 
 capitalists will be chary about loaning on bond and mortgage. 
 
 A. It does not seem to us at all doubtful that a remedy 
 exists, or at least did exist within the time limited by the insur- 
 ance policy for proofs to be perfected. Application should have 
 
264 
 
 INSURANCE. 
 
 been made to the Court having jurisdiction in the case for an 
 order compelling the guardian to take the necessary proceedings. 
 It may not yet be too late : as to that we could not venture an 
 opinion without a more minute acquaintance with tlie circum- 
 stances. If too late, we think an action lies against the guar- 
 dian for the damages resulting from lier refusal to do her duty. 
 
 15. We are occupants of a large building with several tenants. 
 We make application for insurance, and the companies make the survey 
 and issue policies. Is our policy jeopardized by any acts of the other 
 tenants, over which we have no control ? For instance, one of them 
 introduces and uses a small engine for cutting purposes. 
 
 A. If the premises insured " be occupied or used so as to in- 
 crease the risk " the policy becomes void, unless the company 
 has previously consented to this increase of the hazard. Our 
 correspondent, therefore, will best protect his interest by notify- 
 ing his insurers and obtaining from them the necessary indorse- 
 ment on his policies. 
 
 16. "We are tenants m a building of which we rent the first floor 
 and basement , over the other parts of the house we have no control ; 
 hitherto the parties occupying these have used them for purposes 
 classed hazardous and extra-hazardous by the board of underwriters. 
 
 1. How would it affect us in case-'of fire, if without our knowledge 
 a change had taken place which altered the risk from hazardous and 
 extra-hazardous to " special hazardous ?" 
 
 2. How can we protect ourselves against such a contingency ? 
 
 A. 1. Any increase of risk in the occupancy of the premises 
 (either with or without the knowledge of the assured), not con- 
 sented to by the insurance company, would render the policy void. 
 The company agrees for a given consideration to cover so much 
 risk and no more, and cannot in reason be expected to assume a 
 greater hazard without additional ])remium. 
 
 2. It is proper that our correspondent should know, for his 
 own protection, whether or not his neighbor is engaged in any 
 trade or occupation of a class more hazardous than is permitted 
 by the terms of the policy ; if so, he should promptly notify the 
 company insuring him that an increase of risk lias occurred. 
 
 1 7. It has been advanced that the insurance on a lot of goods held 
 by the seller, for account of the buyer, and insured under the clause of 
 ''goods sold but not delivered," is vitiated or imperilled by the de- 
 
INSURANCE. 
 
 265 
 
 livery of a portion of the lot. Also, that goods held as stated above, 
 which have been paid for, do not stand in the same relation as regards 
 insurance as goods unpaid for. 
 
 Further, does the word -'removed" in place of ''delivered" in 
 above clause, carry more protection to the insured ? Your reply, with 
 court decisions in confirmation will much oblige. 
 
 A. A delivery of part of the goods, with the remainder turned 
 out or separated from the rest of the stock, has been held to be 
 a technical delivery of the whole, for the purpose of settling the 
 question of ownership ; but if the seller has agreed to keep the 
 property for any positive or given length of time, the policy 
 covering " goods sold but not delivered " will apply to it in that 
 interval beyond question. A report on the responsibility of in- 
 surance companies for goods sold and not delivered was made 
 August 12th, 1868, and republished in pamphlet form by Clayton 
 & Co., 160 Pearl St., in 1873. The committee of the under- 
 writers in that report object to the use of the words " sold but 
 not removed " as possibly covering the interest of many succes- 
 sive owners, and of attempting to apply the policy to a class of 
 goods in which the holder had no insurable interest whatever. 
 This would violate the rule established by the underwriters de- 
 clining to admit any new interest without the written assent of 
 the insurer. 
 
 In regard to goods " sold but not delivered " the report advises 
 that where the parties insured have sold and delivered the goods in 
 such a way that their responsibility for their preservation has 
 ceased, they have no insurable interest, and ought not to be pro- 
 tected. The report suggests that in all contracts for sale where 
 the sellers intend to apply their policy to the protection of the 
 goods, there shall be a stipulation on the part of the seller limit- 
 ing the time or option as to delivery to a given period. 
 
 In our judgment, however, the policy of the seller applicable to 
 goods sold but not delivered, will be h<?ld by the court to cover 
 all stock in store wdiich he is holding in good faith, either for 
 the convenience of the customer who has purchased them, or for 
 the sake of lessening his risk and avoiding too large a delivery 
 on outstanding account. He may deliver part, and hold the 
 balance till both parties are ready to close the arrangement, and 
 have the same subject to his insurance. 
 
266 
 
 INSURAXCE. 
 
 To avoid all legal question, however, it is well enough to have 
 a stated term of time in the contract of sale, during which the 
 delivery shall ])e obligatory or optional. 
 
 18. <^ur insurance policies contain the following clause: '-On 
 merchandise, hazardous or not hazardous, their own, or held by them 
 in trust or on commission, or sold but not delivered." Are not the in- 
 surance companies legally liable under this clause, on merchandise 
 which we have sold to parties, but have agreed to hold for them in our 
 store, subject to their order for delivery ? 
 
 A. Unless there is some other stipulation in the contract ex- 
 cluding such merchandise, the policy does most certainly apply 
 to it. 
 
 19. If a speculator buys a quantity of merchandise from a manu- 
 facturer, the custom of the trade being to deliver " free on board," 
 and the speculator not wishing immediate delivery requests the manu- 
 facturer to hold the goods subject to order, in the mean time making 
 cash payment for them and getting a receipted bill, will a general in- 
 surauce policy covering the manufacturer's stock apply to these goods 
 awaiting delivery ? Will the clause, Goods held subject to order, 
 covered by mill insurance," written across the bill rendered have any 
 force or value in case of loss or damage by fire, it being the custom of 
 the manufacturer to carry a maximum amount of insurance at yearly 
 rates, and terms to cover all his stock in store ? The question of course, 
 is mainly one of title, the goods often remaining uncalled for a number 
 of months or even years. 
 
 A. After making the assumption that the terms of the policy 
 are such as to cover only the pro})erty of the mill owner, and 
 that if title has completely passed to the buyer they are not cover- 
 ed by tlie policy, tlie first remaining question is dependent upon 
 circumstances not detailed above. Were the goods inspected by 
 tlie buyer, and separated from the mass of similar goods in 
 stock ? If so, and nothing further remained to ])e done but 
 make the shipment, we are of opinion that delivery was so far 
 complete as to pass title to the seller, notwithstanding tliat they 
 were by implication yet to be " free on board." In several of 
 tlie States — for example, New York, Connecticut, New Jersey, 
 Maine, and Yirginia — it has been held that the title passes if such 
 be the intention of the ])arties, even though there has been no 
 separation of the sold goods from tlie larger Inilk in stock, pro- 
 vided the whole are uniform in kind and quality. In the New 
 
INSURANCE. 
 
 267 
 
 Jersey case this was the conclusion after an elaborate considera- 
 tion of the whole question (Hurff v. Hires, 11 Vroom, 581). But 
 the necessity of separation has been much insisted on, and the 
 conclusion stated, perhaps, cannot be considered settled law. 
 Where, however, the goods have been separated, put one side, 
 and the price paid, the seller no longer having even a vendor's 
 lien, it does not seem possible to consider him as anything more 
 than a bailee. 
 
 The words written across the face of the bill may possibly in- 
 volve the manufacturer in liability for damages in case of 
 loss by fire, as they are calculated to mislead the buyer into a 
 false belief that his goods are insured. If by the terms of his 
 policy it covers " goods sold but not delivered," and he agrees to 
 keep the goods as stated, we think the pj'operty would be covered 
 by his insurance. 
 
 20. A party upon leaving his store at night shuts off his stove as 
 usual, and during the night the gas, having no escape, causes the stove 
 to burst, entirely destroying it, and doing considerable damage to 
 goods and fixtures. He has an insurance on goods and fixtures. Can 
 he make the insurance company pay the loss ? 
 
 A. The answer will depend on the terms of the policy. Most 
 of these have a paragraph similar to the following ; " If any 
 property herein insured be damaged by explosion from any cause 
 whatever, the company shall not be liable unless fire ensues, and 
 then for the loss by fire only." In such a case all the damage 
 caused by the explosion of the gas, if no fire occurred, would 
 come within the exception for which the company would not be 
 liable. 
 
 2 1 . Can the insurance on a house be collected if it should bum 
 down while the occupant is in the country, he having closed it for the 
 season ? 1 have been told that you must keep some one in the house 
 or that the insurance will be refused. 
 
 A. In most fire insurance policies recently issued there is a 
 stipulation that if the premises become vacant or unoccupied," 
 without the consent of the company indorsed thereon, then the 
 policy shall be void. If the holder of such a contract wishes to 
 continue it in force, and to leave the premises vacant, he ought 
 to take it to the company and obtain their written consent. In 
 
268 
 
 INSURANCE. 
 
 fact, it would be well if persons obtaining insurance on their 
 property would read over the policy carefully and see what the 
 contract provides. 
 
 LIFE. 
 
 22. As security for a loan John Doe assigned to me a policy of in- 
 surance taken out several years before, " for the sole and separate use 
 and benefit of Mary Ann Doe," his wife. The assignment indorsed on 
 the policy is signed by both husband and wife. The insurance com- 
 pany has indorsed on the policy an acknowledgment of the assignment 
 which is now of record in the office of the company. A clause in the 
 policy reads : " And in case of the death of the said Mary Ann Doe 
 before the decease of the said John Doe the amount of the said insur- 
 rance shall be payable to his children for their use, &c." Is the above 
 assignment valid ? Also, whether it would still hold good in event of 
 the wife dying before the husband ? I have paid a large amount in 
 premiums to keep the policy in existence, John Doe being unable or 
 unwilhng to pay the premiums. Not wishing to continue the periodi- 
 cal payments I am anxious to get a paid-up policy for its present value. 
 Couid I demand of the company a paid-up policy payable, on proof of 
 death, to myself and not to the wife of the assured ? 
 
 A. The assignee, if Mrs. Doe should die before her husband 
 leaving children her surviving, could not take any title from tlie 
 assignment, and it would be w^orthless in his hands. If the com- 
 pany chooses to issue a paid-up policy, it is his best course to ac- 
 cept it, as he will place no more money at risk. We doubt if 
 the company will accede to his request unless all the parties join 
 in it. 
 
 23. If a life insurance policy is taken out in the name of a stated 
 beneficiary, can the name of another beneficiary be substituted in the 
 identical poHcy, or is the only mode of effecting the change by letting 
 the first policy lapse and taking out a new policy, the applicant being 
 at the disadvantage of a higher rate of premium, or possibly unable to 
 get a new policy by reason of failure of health ? 
 
 A. The name cannot be changed except by the legal consent 
 of the beneficiary (who must be of full age) and also of the in- 
 surers. 
 
 24. What have been the decisions bearing on life policies contain- 
 ing this clause : "by self-destruction or suicide," if, or if not followed 
 by "sane or insane," when the holder has committed suicide ? 
 
 A. When there is no reference to insanity in the policy, and 
 evidence has been introduced to show that suicide was commit- 
 
INSURANCE. 
 
 269 
 
 ted while suffering from aberration of mind, tlie courts have 
 generally ordered the payment of the money; but where the 
 other words are added, suicide forfeits tlie contract. 
 
 25. A has his life insured in favor of his wife B ; the poHcy reads 
 " and the said company do hereby promise and agree to and with the 
 said assured, his executors, administrators and assigns, to pay tlie said 
 sum to the said assured, his executors, administrators and assigns, on 
 proof of the death of tlie said assured, said sum insured being for the 
 express benefit of B, wife of said assured." B died intestate, leaving 
 children by A. A married a second time and is now dead ; his second 
 wife C has no children by him, and he also died intestate. Will the 
 children of B have the sum insured, or will it go into the personal 
 property, so that C will have a share of it ? 
 
 A. If the wife accepts the beneficial provision in her life 
 time, and makes no disposal of it by will, at lier death one-third 
 is held by her husband, and the remaining two-thirds vests in 
 her children. 
 
 26. In the case of the disappearance of a person on whose life there 
 is an insurance policy, is the amount usually paid on the giving of satis- 
 factory bonds ? 
 
 A. No life insurance company would feel justified in paying 
 the sum insured without some evidence that the person upon 
 whose life the policy was issued was actually dead. This evi- 
 dence might be furnished by the lapse of time, and other proba- 
 bilities, so that, satisfactory bonds being given, payment would be 
 made. But mere disappearance by itself would not be sufhcient. 
 
 27. What practical effect, if any, has the law passed May 5, 1878, 
 entitled " an act for the relief of policy-holders in life insurance com- 
 panics," had in relation to policies in existence prior to the passage of 
 the act ? I learn that some companies hold that this law is only appli- 
 cable to policies taken out after the passage of the act. 
 
 A. The act referred to permits wives, with the written con- 
 sent of their husbands, to assign policies on the lives of the latter 
 for the benefit of the former, whether issued before or after the 
 passage of the act. The language is clear enougli to leave no 
 room for dispute about the meaning of the law, and if it does not 
 apply to policies issued before its passage it must be because it 
 violates the obligation of a contract, and is therefore unconstitu- 
 tional. If a policy made before the act was passed 'contains 
 
270 
 
 IXSURANCE. 
 
 a S}>ccific stipulation tliat it shall not be assigned, such an ob- 
 jection, no doubt, can be maintained, since the contract cannot 
 be annulled by the subsequent legislation. But thei'e is no 
 implied contract of this kind, which the legislature is compelled 
 to respect. It was once the policy of the law that " things in 
 action " as the legal phrase runs, should not be assignable ; but 
 when the policy was changed there was no vested right that the 
 old law should still preserve the non-negotiable character of any 
 such property. We are (piite clear that in the absence of a dis- 
 tinct stipulation in a policy mvAe in this State for the benefit of a 
 wife before May 25, 1879, that it shall not be assigned, the law 
 of May 5th makes it assignable, operating alike on old or new 
 policies. 
 
 28. A gentleman has a policy of insurance on his life made paya- 
 ble to his wife, and his wife dies, leaving two children. After his wife 
 dies, one of the children dies, leaving one child. Is the child of the 
 one dying entitled to its parent's share ? The policy has been running 
 over twenty years. 
 
 A. Tlie legal heirs of the wife living at the time of the hus- 
 band's death will be entitled to the money precisely as any other 
 property will descend. 
 
 29. When is the premium on a life insurance policy payable, when 
 the due date falls on a Sunday or a holiday ? Can a company refuse a 
 check tendered them the day before, but dated on such holiday or Sun- 
 day ? or, if the premium was not paid until the following day, could 
 they cancel a policy which contains the clause: Not disputable for any 
 cause whatever ?" Also, would it make any difference about the pay- 
 ment of the premium on a policy without this clause ? 
 
 A. It is usually understood that when a premium falls due 
 on Sunday or other holiday, it is to be paid the day before, but 
 we do not think the company should be very exacting in this re- 
 spect. 
 
 30. Does the act of renewing a policy of insurance create a new- 
 contract, or is it a mere continuation of the old one ? If the former is 
 the case, when a party pays the premium for his life insurance before 
 it becomes due, and dies in the meantime, should not the money be re- 
 funded under the doctrine that there is an implied contract to return 
 money paid on a consideration which happens to fail ? 
 
 A. The money thus freely paid not being contributed under 
 a misapprehension or mistake, cannot be recovered. 
 
/ 
 
 INSURANCE. 271 
 
 31. A policy in a life insurance company contains tins clause. 
 
 " It being understood and agreed that if after the receipt by this company of 
 not less than two or more annual premiums, this policy should cease in conse- 
 quence of the non-payment of premiums, then upon a surrender of the same, 
 provided such surrender is made to the company within 12 montlis from the 
 time of such ceasing, anew policy will be issued for tlie vahu; acquired under 
 the old one, subject to any notes or credits that may ha\ c been received on 
 account of premiums ; that is to say, if payments for two years have been made 
 it will issue a policy for two-tenths of the sum originally insured ; if for three 
 years, three-tenths, and in the same proportion for any number of payments." 
 
 The insured has paid five annual premiums in cash, but has retained 
 the original policy for several years. Does the failure to exchange pol- 
 icy forfeit his claims to paid-up insurance ''acquired under the value of 
 the old," all other conditions having been fulfilled by the holder ? 
 
 A. If any unpaid premiums are more than 12 montlis due, 
 the holder has forfeited his right to a new policy on the condi- 
 tions specified. 
 
 32. In an insurance policy in which a friend of mine was insured, 
 it is stated in policy that said company do promise and agree to pay to 
 and with the said assured, his executors, administrators, and assigns, 
 after due notice and proof of the death of said assured, said sum being 
 for the express benefit of N. D., wife of said assured. His wife died 
 about 1867, he married again, and he died in 1877 ; does the sum for 
 which he was insured revert to personal estate or to the heirs of his 
 first wife ? 
 
 A. If there were no children of the first wife we think that 
 on her death, without having assigned or bequeathed the policy, 
 it passed to her husband, and on his death went to his heirs. 
 This opinion is on the supposition that the policy is silent as to 
 the persons who should take after the wife ; if the promise was 
 for her benefit or that of her children, or heirs generally, that 
 provision would control. 
 
 MARINE. 
 
 33. I shipped goods to a foreign port and insured them here free 
 of particular average. By the stranding of the vessel a portion of the 
 goods became badly damaged, and a claim for loss is presented to the 
 underwriters, who refused to allow it on the ground that the term f.p. a. 
 covers a total loss only. I am informed that English underwriters 
 afiow such claim for damages if caused by the stranding of the vessel. 
 Are the New York underwriters right in refusing to allow the claim ? 
 
 A. The form of the policy here differs from the one referred 
 to under which a partial loss is provided for in such cases in 
 England. There, the clause exempting goods from particular 
 
272 
 
 INSURANCE, 
 
 average is limited by the words " unless the ship is stranded," 
 which in later years is often made to read unless the ship be 
 stranded, sunk, or burned." Here the exception is absolute, and 
 there can be no claim under the policy if the goods be actually 
 landed, no matter how badly damaged by the perils of the sea. 
 
 34. I apply for $1,000 insurance on one-sixteenth of a bark valued 
 at the same, and when the policy comes to hand it reads '-for $1,000 
 on bark — for the term of one year from — ," etc. In the margin it 
 reads : <'Sum insured $1,000," and "Vessel valued at $16,000.' Now 
 should it not be exactly as my application, and could not the insurance 
 company say, should I make a claim on them for partial loss, ' • this 
 vessel is only half covered, the $1,000 being on one-eighth, and we 
 will pay you half your claim." 
 
 A. The insurance company is liable for the sum it insures. 
 If the owner's interest was actually worth $2,000 and he chooses 
 to insure but half of it, that is his lookout, and no concern of the 
 underwriter. 
 
 35. If under a certificate of insurance a claim for damages is pay- 
 able in Europe, have the consignees a right, when aggrieved, to take 
 legal steps against the underwriters' agent there, or can they do so only 
 against the company here ? 
 
 A. Tlie agent abroad, if representing the company, may be 
 served in most countries with notice of the suit. 
 
 36- ^^ill you furnish your views on the following question, caused 
 by the new custom of masters of freight steamers chartered for a direct 
 voyage from American Atlantic ports to a port in Europe, of stopping 
 at Sidney, C. B., for coals without giving previous notice to the ship' 
 pers of the cargo of their intended deviation from the voyage laid out ? 
 
 1. Is such a deviation made for the convenience and benefit of the 
 ship, and not caused by accident or other similar causes, a case of bar- 
 ratry within the scope and meaning of the word, and more especially 
 when the aforementioned coal clause is not inserted in the charter 
 party ? 
 
 2. Does such a deviation, made without the approval or knowledge 
 of the shippers, vitiate their policy of insurance on cargo ? 
 
 3. In such case are the assured compelled to pay the additional 
 premium demanded by the insurers, or are the latter required to look 
 to the vessel for payment of the same ? 
 
 A. — 1. The insurance stands on a different footing. If the 
 policy was taken out for a direct voyage from port to port, witli 
 no permission to call, the reservation of the right in the charter 
 
INSURANCE. 
 
 273 
 
 party would not save the contract, and the insurance would be 
 vitiated by such deviation. Only in case of necessity, arising 
 from some unforseen emergency due to the peril of the seas, 
 would such a deviation be permitted within the contract of insur- 
 ance. If the insured wishes to protect himself in case of devia- 
 tion, he must have the consent of tlie underwriter indorsed on 
 the policy. 
 
 2. We notice in the charter party another clause, of at least 
 equ^il importance, affecting the question of insurance. It is the 
 permission given to the steamer " to tow and be towed, and to 
 assist vessels in all situations. " An insurance made by the ship- 
 per without a recognition by the underwriter of this permission, 
 would be vitiated by a deviation to engage in towing or thus as- 
 sisting another vessel. 
 
 3. A steamer that undertakes a direct voyage from port to 
 port is required to have a sufficient amount of coal and other 
 outfit for the intended voyage, and a calculation to stop at an- 
 other port for necessary supplies, without the knowledge and 
 consent of the charterers, is a violation of the whole spirit of the 
 contract. It would hardly be reckoned as barratry unless the 
 deviation was for the master's own purpose and benefit, without 
 reference to the designated employment of the ship. 
 
 37. A few montlis ago I bought goods in Boston at $25 per ton ; 
 the price having advanced, they are now worth $30. I order them to 
 be shipped by sailing vessel and insured for $30 per ton. In case of 
 loss can I recover for the amount insured, or will the insurance com- 
 pany in making up the loss, be governed by the invoice price of the 
 goods ? ($25 per ton). 
 
 A. If the goods are worth $30 and were insured for that, this 
 will be the measure of the total loss. 
 
 38. A twenty per cent, profit is insured ; upon arrival the goods had 
 further advanced. One-half of the goods being damaged are retained 
 by the sellers, though buyers are willing to accept them as sound. Can- 
 not, therefore, the buyers rightly claim the twenty per cent, profit from 
 the insurance companies upon the damaged half so retained, the latter 
 being so far as the insuring buyers are concerned, a total loss. The 
 policy contains this clause : Free from claim for general average, but 
 subject to the same per centum of loss as if the insurance was on goods. 
 In case a total loss be claimed, the underwriters to be entitled to a 
 
 18 
 
274 
 
 IXSURAXCE. 
 
 credit of the same per centum of salvage as if the insurance was on 
 cargo, and in case of contribution in general average for any portion of 
 the cargo at customary sound value, this company to be free from claim 
 for loss on such portion. " The buyers insured profit only : contract 
 reads " no arrival, no sale. " 
 
 A. The insured is entitled to his insurance on the profits for 
 the damaged portion, but at the same ratio only that the dam- 
 aged value bears to the sound value. 
 
 39. Insurance was effected on account of freight from New York 
 to two ports in the East Indies, both ports being named in the policy, 
 with one-half per cent, deduction from the premium if only one port 
 was used. At the first port the vessel delivered a portion of her cargo, 
 on which the freight was earned and due. 
 
 In event of a loss while proceeding to the second port, was the in- 
 sured entitled to the full amount of his insurance ? The vessel, how- 
 ever, proceeded with the balance of her cargo to another port not 
 named in the policy. 
 
 Did the risk of the insurer terminate at the first port of discharge ? 
 
 If so, is not the insured entitled to the reduction of one-half per cent, 
 premium ? 
 
 A. The statement of the case is not very clear, at least not 
 sufficiently so to enable us to pass upon it without supposing 
 some additions. If the insurance was to a specified port at a 
 specified premium, " with liberty to use a second port, to return 
 half per cent, if the second port be not used, no loss being 
 claimed, " which is the usual form of affecting such insurances, 
 and the second port was not used, and no loss was claimed, then, 
 in answer to the third question, the assured would be entitled to 
 a return premium of one-half per cent, as provided. 
 
 If the insurance was effected in the form as above, the risk 
 did not terminate at the first port of discharge, but was lessened 
 by so much as was received on account of the cargo delivered at 
 tlie first port of discharge. 
 
 If the policy was a valued policy, then, in case of loss between 
 the first and second port, tlie underwriter would have been liable 
 for the full amount insured, and without right to claim deduction 
 for the amount of freight collected at the first port of discharge. 
 
 The third port not being included in the policy, the risk of tlic 
 underwriter terminates at the second port of discharge. 
 
 40. — 1. Marine insurance companies, both mutual and stock, home 
 
INSURANCE. 
 
 275 
 
 and foreign, have of late taken wharf, gin-house, railroad, press and 
 warehouse risks (all on cotton) for periods extending from 5 days to 
 (in some instances) several months. 
 
 2. Suppose that under those policies or certificates a fire occurs in a 
 gin-house, on a wharf, or in a warehouse or press, can the insured re- 
 cover from such marine company by law, if the company should be 
 unwilling to pay ? Or when the company is willing to pay, can a stock- 
 holder in a stock company, or a policy-holder in a mutual company, 
 enjoin such company from paying for a risk for w^hich it is not char- 
 tered ? 
 
 A. — 1. If a company is chartered simply to insure against 
 marine losses, and is not authorized to take fire risks or to pro- 
 tect any property not absolutely afloat, the issue of a policy by 
 its officers for any purpose wholly outside of its jurisdiction 
 would be a grave offense, involving them in personal liabilities, 
 and possibly working a forfeiture of its charter. 
 
 2. If the company is authorized, as most such corporations are, 
 to insure against loss by fire, we see no reason why it would not 
 be bound by its contract, nor if it is solvent, how a stock- 
 holder, or any other person interested, could interfere to prevent 
 the payment of the proposed settlement. 
 
 41. A person owning goods stowed in warehouse of a storage com- 
 pany, and holding receipt therefor, insures them against fire under a 
 floating policy. Wishing to ship the goods he delivers the receipt to 
 steamship agent, who issues thereon bill of landing. The owner then 
 obtains a marine policy on the goods, which are all destroyed by fire, 
 part being in ship and the remainder on wharf ready for loading. Who 
 is liable for the property ? 
 
 A. All policies for marine insurance read as follows, viz : 
 " Beginning the adventure upon the said goods and merchandise 
 from and immediately following the loading thereof on board of 
 the said vessel. " In a similar case of a cargo of saltpeter to be 
 loaded on a vessel at Boston for Antwerp, some years ago, the 
 saltpeter w^as ordered out of store by the master of the vessel 
 and piled up on the wharf, the master having the privilege to do 
 so to consult his own convenience in loading the vessel. A fire 
 broke out in a warehouse on the wharf ; the vessel was hauled 
 away from the wiiarf for her safety ; but tlie saltpeter piled on 
 the wharf could not be removed, and was totally destroyed. A 
 bill of lading had been given for it and it was insured under a 
 
276 
 
 INSURANCE. 
 
 marine policy. It was held in that case that the cargo was 
 never on board the vessel, and the marine insurance therefore 
 never attached. The vessel loaded other cargo and proceeded 
 to Antwerp, where she was libeled, and a suit brought to 
 make the vessel liable under the bills of landing ; but it was 
 held that the bills of lading were constructively fraudulent, the 
 goods never having been on board the vessel. The practice of 
 giving bills of lading before the property is on board the 
 vessel is a dangerous one, and may lead to fraud, as well as ex- 
 pose innocent shippers who may suppose that their policy of 
 marine insurance covers them, to serious loss. The mistake of 
 the shipper in this case appears to have been in not paying a trifle 
 additional premium, and making his insurance to cover against 
 fire on the wharf prior to shipment. Not having done this, he 
 must bear the loss. 
 
 42. An American importer, buys an invoice of goods from B, a 
 British manufacturer, in July, and intrusts B to insure said goods. B 
 ships half the goods in July and half in September, and insures accord- 
 ing to instructions. A buys a second lot of goods from B in Decem- 
 ber, but gives no instructions as to insurance. The goods are lost. 
 Who is responsible for the loss ? 
 
 A. If the buyer said nothing about insurance in his first 
 order, and the sellers had insured and he had paid the charges 
 ^vithout question, he would have a fair claim, on the ground that 
 he supposed, as a matter of course, the second lot would also be 
 insured. But, as he gave specific directions with the first, which 
 he omitted with the second order, we do not think he can claim 
 of the sellers on the ground of their neglect, and he will have to 
 bear the loss himself. 
 
 43. When a vessel in course of her voyage puts into an intermedi- 
 ate port of distress, and for purpose of making necessary repairs, is 
 compelled to discharge part or whole of her cargo, does an ordinary 
 marine policy cover all risks on cargo meantime, the master still hold- 
 ing it in charge alongside, or as near as may be to the vessel ? 
 
 A. Under such circumstanees the marine policy covers all 
 the risks, fire included. 
 
 44. We had a quantity of goods arrive on a vessel some time ago, 
 in a damaged condition. It took some time to adjust the terms of set- 
 tlement and prepare for the sale. Should the sound value " be the 
 
INSURANCE. 
 
 277 
 
 market price at tlie day of sale, or the day the ship discharged her 
 cargo, or day of examination ? 
 
 A. . The object of fixing the sound value is to determine the per- 
 centage of loss in order to apply this to the insured value, hence 
 it should be taken at the same moment that the damaged value 
 is ascertained, that is, at the tfme of sale. 
 
 45. My vessel, of 498 tons international register, has made ten or 
 more voyages in the North Atlantic from Baltimore, Philadelphia, and 
 New York, and has always carried thirty-five hundred (3,500) qiiartei^ 
 of wheat of 60 lbs. to the bushel or 3,300 quarters of corn of 56 lbs., 
 the quantity of corn being the smaller only because there was no more 
 room in the vessel's hold. With these cargoes the vessel has always 
 been surveyed by the proper surveyors. 
 
 Now here in Boston, I have just loaded a cargo of only 3,170 quar- 
 ters of wheat, the ship when loaded having a clear side of 56^ inches 
 and drawing only 17 feet aft and 16 feet 9 inches forward. 
 
 I ask you now if the surveyor for the Boston Board of Underwriters, 
 can say that my vessel is loaded deeper than the law allows ? 
 
 In all the other Atlantic grain ports I have always loaded 750 tons 
 of wheat. Here only 678 J- tons. 
 
 A. No American statute, or Treasury regulation, so far as 
 we know, fixes the depth to which a vessel may be loaded. It 
 is a matter, however, within the practical control of the under- 
 writers, and the Boston Board have the right to act independ- 
 ently, without regard to the action of the other boards. 
 
 46. The bark John was chartered to carry a cargo to Europe, but 
 the vessel leaked so much after the cargo was all on board that the crew 
 refused to proceed in her and the voyage was subsequently abandoned 
 by the owners of the vessel. The cargo was insured, together with 
 some advances made to the ship on account of freight. Can the under- 
 writers refuse to pay the shipper for losses sustained, on the plea that 
 the vessel was declared to be unworthy, wuth the cargo which she had 
 taken ? 
 
 A. The risk of the underwriter attaches when the cargo is 
 fairly " shipped " ; whether this had been completed at the date 
 specified is a question of fact. Unless the policy contained some 
 condition in reference to the insurance for advances on account of 
 freight, restricting its application, we see no reason why it would 
 not hold in the case described. The above is without reference 
 to the warrant of seaworthiness. As to the latter, it is a well 
 miderstood maxim, that " it enters as its very foundation into 
 
278 
 
 INTEREST. 
 
 every contract of insurance on a ship. " — Parsons on Contracts, 
 40(). But seaworthiness is assumed as a fact in the absence of 
 fraud, and the proof must begin with the underwriter. If lie can 
 prove this conclusively the policy does not attach ; and the ship- 
 per would undoubtedly in such a case have a recourse to the 
 owners of the ship. 
 
 INTEREST. 
 
 1. An invoice of goods is sold at a fixed price per pound, interest 
 to be added for three months' note of buyer. The bill is rendered with 
 interest added for 93 days. To this the buyer objects, claiming it 
 should be only for 90 days (although the note drawn in customary form 
 carries the three days of grace,) interest for the three days being usu- 
 rious. 
 
 A. A three months' note usually runs 95 days, although this 
 depends a little on its date ; but in this State, (N. Y.,) the legal 
 way to reckon interest to be added to a three months' note, is to 
 take the usance for one-fourth of a year, and add it to that for 
 one-tenth of a month. The law has decided that a promissory 
 note given to pay money in a certain number of months is to be 
 interpreted as a promise to pay in so many months and three 
 days ; and therefore, a contract to add interest, or to allow inter- 
 est, for so many months, is interpreted to mean for so many 
 months and three days. Unless a three months' note can be 
 legally collected without waiting for the three days' grace, the 
 interest on the latter is as much a part of the contract as the in- 
 terest for the even three months. If " a note for three months " 
 means a note for three months and three days, then " interest to 
 be added for three months," means three months and three days' 
 interest. 
 
 2. How can interest be calculated on a sealed note m the following 
 words : 
 
 I promise to pay A B or his assignee one thousand dollars for value 
 received and to pay the interest annually. The note is not paid for five 
 years, and what I want to know is, does the interest which is to be 
 paid annually become principal and bear interest ? 
 
 A. It is the holder's fault if he has not collected the interest 
 annually, or obtained a new obligation for it, and he caimot col- 
 lect compound interest at any time afterward. Simple interest 
 
INTEREST, 
 
 279 
 
 on the original principal for five years is all that can be re- 
 covered. 
 
 3, Will you please state if in figuring interest it is correct to reckon 
 60 days as two months ? Do not the banks reckon 30 days as a month 
 if there should be more or less days than 30 ? 
 
 A. No, it is not correct, nor is it legal in this State (N. Y.). 
 If a note is dated January 1 at 60 days, the legal reckoning is to 
 take two months to March 1 and make that two-twelfths of the 
 interest for the year ; this will leave one day and the grace, in 
 all four days, each of which is to be reckoned as one-thirtieth of 
 a month. If the date was December 1 at 60 days, then February 
 1 is two months, and this making 62 days will leave but one day 
 of the grace to be reckoned. 
 
 4. Why is it that a 4 per cent, bond at a premium of $14 pays 3|- 
 per cent, interest, and at double that amount of premium pays more 
 than 3 per cent. I suppose, without figuring on it, that a 4 per cent, 
 bond ought to be at $16.67 premium to pay 3^, if at $133.33 it paid 3 
 per cent. 
 
 A. This writer ignores all computation of the effect of the 
 premium upon the annual earnings. A 4 per cent, bond bought 
 at 114 will pay an annual income of 3.508772, or say 3.51, 
 only on the supposition that it will return 114 at the end of the 
 period. But as it only returns 100, the entire loss of the pre- 
 mium will make a material difference in the average annual gain, 
 and the latter will depend on the time the bond has to run ; 
 that is over how many years the loss of 14 is to be distributed. 
 If due in one year, instead of gaining 3i per cent, there would be 
 an actual loss of nearly 10 per cent. But in reckoning the com- 
 parative earnings of a bond at 114, and one at 128, even for one 
 year, the proportion may be easily figured. We have given it 
 above at 114 ; at 128 it is^3.12i. As 128 is to 114, so is 3.508- 
 772 to 3.125. But the period the bond has to run is all impor- 
 tant in reckoning its yearly product. Thus a 4 per cent, bond 
 having 10 years to run, bought at 114 and held to maturity, pays 
 only 2.44 per annum ; but if it has 25 years to run it pays 3.18. 
 A 4 per cent, bond bought at 128, having 50 years to run, and 
 hehl to maturity, will give an annual income of 2.94. 
 
280 
 
 INTEREST. 
 
 5. If a bond of $1,000 has 14 years to run, at tlie rate of 6 per cent., 
 what premium will we have to pay on tlie same to make our money pay 
 5 per cent., the money reinvested as a sinking fund to pay for the 
 premium at the end of the 14 years and to be put at interest at G per 
 cent, and not compounded ? 
 
 A. The sum to be paid for a 6 per cent, bond of $1,000 liav- 
 ing 14 years to run, in order to pay 6 per cent., under the con- 
 ditions stated by your correspondent, is $1,082.35, and $5.55 is 
 the sum to be paid annually to the sinking fund. 
 
 It appears to me that money put at interest for 14 years, to 
 form a sinking fund, must of necessity compound, and in that 
 case a 6 per cent. $1,000 bond having 14 years to run will pay 5 
 per cent, if bought for $1,100, and $4.49 is the sum to be in- 
 vested annually at 6 per cent, for a sinking fund. 
 
 6. B holds a mortgage made in 1878, bearing 6 per cent, per annum ; 
 the mortgagor does not pay the interest till 29 days after it is due. B 
 holds, he (the mortgagor) should pay 29 days' interest at 6 per cent, per 
 annum, on the interest paid after due date. A claims that interest on 
 interest could not be collected by law, also that if claimed by B, it 
 would be usurious ; B thinks the interest for 29 days is just, and can 
 be collected by law, and that it would not be usurious. 
 
 A. Interest upon interest due, cannot be collected by law, 
 that is, payment of it cannot be enforced ; but such a payment 
 is equitable, and the receipt of it, if the debtor is willing or can 
 be induced to pay it, does not constitute usury in the legal sense 
 of the word. It does not violate any restriction, legal or moral. 
 
 7. Is it legal for A, a resident of New York, to lend B, a resident 
 of Iowa, at 8 per cent, per annum, interest and principle payable in 
 New York ? Or, whether such a transaction is legal when the interest 
 and principal is payable in Iowa only ? 
 
 A. The rule of law has been distinctly recognized, that where 
 a contract for the advance or loan of money is made in good 
 faith in one place, and to be performed in like faith m another, 
 it is lawful to charge a rate of interest allowed by law in either 
 place. Parsons on Contracts says : " In such cases the intention 
 of the parties is effectuated as a concession to trade and con- 
 venience between nations ; and if the transaction in itself is not 
 immoral, the rate of interest authorized either by the country 
 where the contract is made or to be performed is allowed to ])re- 
 
INTEREST, 
 
 281 
 
 vail. " But the law is equally explicit that " a bill or note can- 
 not be made in one place, and made payable in another, for the 
 mere purpose of creating a liability to pay a higher rate of inter- 
 est." That is evasion, and subject to the penalties of usury. 
 Where it is done in good faith, and is a bona fide transaction, it 
 will stand. 
 
 8. A sells to B some railroad bonds, coupons upon which are pay- 
 able January 1 and July 1, at a certain price and " accrued interest." 
 The bonds are dehvered and paid for February 26. For what length 
 of time is accrued interest " to be computed ? 
 
 A. The legal interest in this State is for one month and 
 twenty-five days ; the first item to be one-twelfth of the year, and 
 each of the days to be one-thirtieth of a month. 
 
 9. A was owing B $12,000. He paid the interest to the night of 
 June 30th, and on December 17th paid the principal, how much inter- 
 est was due on that date at 6 per cent., 365 days to the year. B claims 
 interest for the 17th day, while A claims he is not entitled to it. 
 "Which party is right ? Suppose A borrowed the money of C on thai 
 same day to pay B, would not interest commence the morning of that 
 day. 
 
 A. The time to be reckoned on a loan or a promissory note is 
 exclusive of the day of date, but includes the day of maturity or 
 payment. This has been legally settled. Some banks charge 
 for both, but the legal method accords with our statement. 
 
 10. If A buys on July 9th his own note due August 11th, how 
 many days interest does he make, or on the other hand if he sells his 
 note due on July 9th, due August 11th, how many days interest must 
 he pay ? Some say 33 others 34. 
 
 A. The only legal way in this State is to reckon that interest 
 would be for one month and two days : the month to be one- 
 twelfth of the year, and each of the two days to be one-thirtieth 
 of the month. This is prescribed by a statute. 
 
 11. A three days' draft is presented on Monday, and is payable 
 consequently on the following Saturday (six days from Monday being 
 a Sunday). If I discount it am I to deduct the interest from Monday 
 until Saturday, or from Monday until Sunday ? 
 
 A. The interest is always reckoned according to the face of 
 the document. If cashed on presentation the drawee is entitled 
 to deduct six days' interest. 
 
282 
 
 INTEREST. 
 
 12. An obligation payable at six months, bearing interest from its 
 date falls due on the Sunday and is paid the day previous. Should 
 the claim for interest be for the full term of six months, or for one 
 day less ? 
 
 A. If payable with grace, interest should be reckoned for six 
 months and three days. This is the uniform custom. 
 
 13. Does the bank of England when it discounts a note or bill, 
 deduct the sum for which the note or bill is given from said sum, or 
 does it deduct the discount on that sum ? In other words, does it 
 take interest on the sum for which the note or bill is given, or for the 
 sum which the bank loans upon it ? 
 
 A. McCullocli says, " When a bill of exchange is presented 
 at a banker's for discount, it is the practice to calculate the 
 simple interest for the time the bill has to run, including the days 
 of grace, which interest is called the ' discount ' ; and this being 
 deducted from the amount of the bill, the balance is paid over to 
 the presenter of the bill. This is the method followed by the 
 bank of England, the London and provincial bankers, and by 
 commercial men generally." It is obvious to the simplest reader 
 that this is not the true discount, but it is the method pursued all 
 over the world. A note of ^1,000 has twelve months to run, 
 without grace, and is to be discounted at 6 per cent. The bank 
 takes off 860 and pays the holder 8940. It has thus lent to him 
 not 81,000 at 6 per cent., but 89-10 for 860, which is over 6f per 
 cent, interest. 
 
 14. The taking of interest, in advance, on mercantile paper (notes, 
 acceptances, &c.), discounted by banks and bankers, is understood to 
 be the almost universal custom, sanctioned also by all the courts. Such 
 paper usually matures in GO days to six months. 
 
 I desire to ask whether a note for $10,000 made payable one year 
 from date, and discounted for the maker by a private individual (not a 
 bank or banker), from which he deducts the entire year's legal interest 
 in advance, paying for the note cash to the maker, can, under any 
 decisions of the courts of this or other States, be deemed usurious ? 
 
 The lender does thus obtain something over the legal per cent, per 
 annum interest, for his money actually advanced ; but custom, usage, 
 and finally the courts have decided that this is no usury as applied to 
 banks and bankers discounting mercantile paper of short dates. Is it 
 different as to notes having a longer time to run than ordinary mer- 
 cantile paper, and discounted by and for persons not bankers, mer- 
 chants or engaged in trade or commerce ? 
 
INTEREST. 283 
 
 A. Banks are allowed by statute in this State to take interest 
 in advance ; and our courts have recognized the same right in 
 individuals, although this is not provided for in the statute. The 
 court which has sustained this practice however (see N. Y. Fire- 
 men's Insurance v. Ely, 2 Cowen, 703), said : "It must, there- 
 fore, be a negotiable instrument, and payable at no distant day. 
 Under these limitations, the taking of interest in advance, either 
 by a bank, or incorporated company without banking powers, or 
 an individual, is not usurious." Precisely what is a proper limit 
 of time has not been settled. Under certain circumstances, 
 where the discount was made in good faith, and not with evident 
 intent to evade the usury laws, a year might not be considered 
 too long, but it would be the very extreme limit for an individual 
 lender. 
 
 15. Is it a custom in banking business to count 365 days or 360 to 
 the year in calculating interest ? 
 
 A. In mercantile circles it has been customary for conve- 
 nience of calculation to reckon 360 days to the year, but it is a 
 dangerous habit where there are stringent usury laws, since it is 
 usury in this State to take 6 per cent, for 360 days forbearance of 
 money. The law here is to reckon all even months alike as one- 
 twelfth of the year, and only fractions of the month as one-thir- 
 tietli of the month for each day. 
 
 16. A party purchases a bill of goods amounting to $20,000. The 
 bill (open account) matures May 30, which day is a legal holiday, and 
 therefore is not payable till tlie following day. On May 29 the pur- 
 chaser pays $10,000 on account. Now the question arises as to what 
 amount is due on the 31st. One party takes the ground that the 30th 
 being a holiday the bill was not due till the 31st, and the purchaser is 
 therefore entitled on the 31st to two days interest on $10,000 prepaid. 
 Another party takes the ground that the day of grace allowed for the 
 30th being a holiday disappeared when the 30th is used as the average 
 date due and that the 29th and 31st averaging the 30th, no interest 
 should be allowed in settlement. In other words he gains nothing by 
 paying half on the 29th. Another that he is entitled to one day's in- 
 terest on the payment of the 29th, the same as he would have been if 
 the 30th had not been a hohday, and he had paid the balance on that 
 day instead of the 3]st. Which is right ? 
 
 A. A debtor on open account gives no credit for interest by 
 paying a day or two before the bill is due. In the case cited the 
 claim for interest would not be allowed by law or custom. 
 
284 
 
 INTEREST. 
 
 1 7. TThat rate of interest docs the following note bear : 
 
 $500.00. BiNGn.\MTOx, N. Y., June 30, 1870. 
 
 Sixty days after date we promise to pay to the order of Brown cV: Co., live 
 hundred dollars, at the first National Bank of Pittston, Pa., value received, with 
 use. 
 
 Jones & Co. 
 
 This note is for goods purchased in New York State. 
 
 A. The general rule is that the interest is to be paid on con- 
 tracts according to the law of the place where they are to be per- 
 formed, in all cases where the contract expresses or implies the 
 payment of interest. Story on Conflict Laws, sec. 292, 293, 304. 
 A note made at Canada where interest was at 6 per cent., pay- 
 able with interest in England, where it was 5 per cent., was de- 
 cided to bear English interest only. See Scholfield vs. Day, 20 
 John., 102. The above note will therefore bear only Pennsyl- 
 vania interest, which is 6 per cent. 
 
 18. A merchant of Bangor buys merchandise of a New York mer- 
 chant or vice versa. The question is, how interest in the case is to be 
 charged or credited, the rate being 6 in New York and 7 in Bangor, 
 in the absence of any agreement between the parties ? e. g.. New York 
 sells to Bangor merchandise to arrive, payable in 30 days from the de- 
 livery in Bangor. On its arrival Bangor pays prompt cash, deducting 
 7 per cent, interest for the 30 days. New York demurs, and says 
 only 6 per cent, should be deducted. Which is right ? 
 
 Suppose Bangor had taken 30 days additional to the 30 of the con- 
 tract, for that additional time would interest be due at 7 or 6 per cent, 
 per annum, there being no agreement in either case ? 
 
 A. Where no rate of interest is specified, the law of the 
 place where payment is to be made will govern. Parsons on Con- 
 tracts, vol. 2, 585. The rules laid down by Judge Eedfield in a 
 celebrated case are now accei)ted : 1. If a contract be entered 
 into in one place to be performed in another, and the rate of in- 
 terest differs in the two places, the parties may lawfully stipulate 
 for the rate of interest in either. 
 
 2. If the contract calls for interest generally, and no rate is 
 specified, it shall be governed by the place of payment, unless it 
 appears that the parties intended to contract with reference to 
 the rate ruling in the other place. 
 
 What is sufficient to indicate such intention may sometimes be 
 gathered from the terms of the contract, or from custom, or from 
 outside evidence. 
 
INTERNAL REVENUE AND LICENSE. 
 
 285 
 
 1 9. Ohio. — Can a person after agreeing to and paying ten per cent, 
 for three years on money loaned at the end of that time, on paying the 
 principal, keep back such part as would virtually reduce the interest to 
 six per cent. ? 
 
 A. The statute in Ohio forfeits the excess of interest where 
 more than the legal rate is exacted, and only the principal with 
 legal interest thereon can be collected in case of a suit. 
 
 INTEKNAL KEVENUE AND LICENSE. 
 
 INTERNAL REVENUE. 
 
 1 . Is a man who has no license or permit, doing anything wrong 
 or violating the law if he, for the sake of curiosity and study, cultivates 
 some few plants of tobacco, but does not sell the crop ? 
 
 A. There is no tax on the cultivation of tobacco to any ex- 
 tent. Only those engaged in the manufacture or sale are re- 
 quired to contribute to the internal revenue. 
 
 2. Can cigars manufactured in this country be exported without 
 paying an internal revenue tax ? 
 
 A. A drawback equal to the value of the stamps affixed, is 
 allowed upon cigars that are exported. The exporter's bond is 
 cancelled on proof that the goods have been landed at a foreign 
 port. 
 
 3. Is an article manufactured from another article that is subject 
 to internal revenue tax, and on which the tax is supposed to have been 
 paid, subject to such tax ? The article in question, or the manufac- 
 tured article as I may term it, being made of what remains of the other 
 after it has served its purpose, and used for the same purpose in another 
 form after being subjected to certain processes. 
 
 A. If we understand the question, it is subject again to a tax. 
 Thus cigars are fully taxed ; but if a man takes old cigar stumps, 
 and out of this tax-paid tobacco makes new cigars, they are sub- 
 ject to a fresh tax. It would be the sanie thing if he could 
 reconstruct the cigar out of the old ashes and vanished smoke. 
 
 4. Will you inform me, first, whether a license is required to sell 
 liquors or cigars on commission ? Second, whether I can buy liquors 
 for shipment on commission without a license ? 
 
 A. No city license is required, but the internal revenue tax 
 in each case must be paid before a person can legally deal in 
 
286 
 
 INTERNAL REVENUE AND LICENSE. 
 
 either liquors or cigars. A wholesale dealer in liquors pays 
 $100, and in cigars ^5, to the United States government. 
 
 6. I keep a small assortment of drugs, and would like to know if I 
 can compound a physician's prescription containing among several 
 other things ''spirits framenti or whiskey " without paying revenue 
 as a dealer in whiskey ? 
 
 A. Compounding in good faith a physician's prescription^ in 
 which is only a small amount of spirits as one of the ingredi- 
 ents, would not in our judgment subject the author to a revenue 
 tax. 
 
 6. Bo medicines, such as oil of turpentine, castor oil or any other 
 medicine prepared according to the United States Pharmacopoeia and 
 labeled accordingly, become subject to stamp duty when put into gela- 
 tinous bottles generally known as capsules, globules, etc.? 
 
 A. We know of no ruling on the point above raised, but the 
 law appears to be tolerably clear. Section 3,436 of the United 
 States Revised Statutes, exempts from stamp tax any uncom- 
 pounded medicinal drug or chemical, and any medicine compounded 
 according to the United States or other national Pliarmacopoeia, 
 etc., " when not sold, or offered for sale, or advertised under any 
 other name, form or guise than that under which they may be sever- 
 ally denominated and laid down in said Pharmacopoeias, Dispen- 
 satories or Journals. " If " put up in a style or manner similar 
 to that of patent or proprietary medicines in general, " they 
 lose the benefit of this exemption, and become subject to the 
 stamp tax. 
 
 7. Is it lawful to sell quinine in packages of five grains and upward, 
 either by peddling or at residence, without a drug license ? If not. 
 would it be lawful to sell the same if put up and labeled by a licensed 
 druggist ? If unlawful, what penalty could be inflicted. 
 
 A. If the drug should be sold under any other designation 
 than its proper medicinal name, or in such a way as to imitate a 
 patent or proprietary medicine, each pac^cage would be liable to 
 a stamp duty of one cent, if sold at 25 cents or under, or two 
 cents, if sold at over 25 and under 50 cents, and the penalty for 
 each offense would be $50. The article might be sold, however, 
 without tax, simply as so many grains " sulphate of quinine," or 
 in the form of a prescription compounded according to the regu- 
 
INTERNAL REVENUE AND LICENSE, 
 
 287 
 
 lar formulas, if not put up in the shape of a patent medicine, or 
 making any pretension to peculiar merits as a proprietary pre- 
 paration. A State license as a peddler would, however, be 
 needed, at a cost of 820 a year, for a person traveling on foot, 
 and the penalty for selling without such a license would be $25 
 for each offense. 
 
 8. Does imported bay rum, when drawn from the original cask into 
 packages of five and ten gallons, require stamping ? If so, please in- 
 form us what kind of stamp is required. 
 
 A. All distilled spirits when drawn into packages of not less 
 than five gallons, for sale, must be gauged and stamped by the 
 Government official, the form of which is prescribed in section 
 3,321 of Revised Statutes. 
 
 9. Are manufacturers of any article other than tobacco or distillers 
 obhged to pay a United States revenue tax ? Some three or four 
 years ago there was such tax imposed upon manufacturers generally ; 
 has it not been repealed ? 
 
 A. The Internal Revenue Stamp act applies to manufacturers 
 of matches and proprietary compounds (as patent medicines and 
 the like), and also to brewers, neither of which is included in 
 our correspondent's enumeration. The manufacturers' tax, 
 known as such, was partly repealed in 1868, and the remainder 
 ceased October 1, 1870. 
 
 LICEXSE. 
 
 1 0. Is it necessary for an officer on an execution sale of liquors or 
 cigars, to obtain a permit or license from the Collector of Internal Rev- 
 enue, and would he infringe on the internal revenue laws by selling 
 such articles on execution without license or permit ? 
 
 A. A special tax is not required to be paid by an officer of 
 State, or of the United States, for selling liquor or tobacco 
 on execution, or other judicial process. Nor is any permit for 
 that j^urpose required under the internal revenue law. 
 
 1 1 o We may have occasion to send traveling salesmen to the different 
 States in the Union, for the purpose of selling our goods by sample. Can 
 you inform us whether special licenses are required in separate States, 
 and if so, which and where we shall make application for same ? 
 
 A. In most of the States licenses are necessary. Pennsyl- 
 vania is gridironed with local license laws, too numerous to be 
 
288 
 
 INTERNAL REVENUE AND LICENSE. 
 
 separately referred to. In Philadelphia, and some otlier conn- 
 ties, the County Treasurer is the official to whom application 
 must be made for license to sell by sample ; hawkers' and ped- 
 dlers' licenses must be obtained from the courts of Quarter Ses- 
 sions. In New Jersey hawkers' licenses are granted by the 
 Governor, on recommendation of the inferior court of Common 
 Pleas ; a fee must also be paid to the County Clerk. In Ohio 
 and Iowa, County Auditors issue licenses. In Indiana, County 
 Treasurers. In Illinois, such licenses, where they are required, 
 are local, and the town or city financial officers have the matter 
 in charge. In Missouri, the County Collector. In Wisconsin, the 
 Secretary of State. In Virginia, the township Assessor or City 
 Commissioner. Texas imposes an annual occupation tax upon 
 every commercial traveler, payable to the State Comptroller, but 
 a three months' license may be had pro rata. In West Virginia, 
 the Assessor for the proper assessment district must be ap- 
 plied to. 
 
 12. Is it necessary for us to take out a city license for one or more 
 trucks, owned and employed by us in receiving and delivering goods, 
 in the regular course of our business ; and also whether the fact of our 
 making any charge for cartage affects the question ? 
 
 A. If our correspondent uses his own trucks to deliver his 
 own goods, and makes no charge for such delivery, he need not 
 have them licensed. But, if he charges for cartage, he must 
 pay two dollars a year for one-horse, and three dollars for two- 
 horse carts. 
 
 13. Has the grower of tobacco the right to sell a case, or a part of 
 a case of tobacco without internal revenue license, such as jobbers 
 have ? And what license do they have to pay ? If growers are re- 
 quired to have license in the above case, would it be a penalty for the 
 grower to accept pay from jobbers who are around collecting samples ? 
 
 A. A dealer in leaf tobacco is required to pay a tax of $25, 
 but no farmer or planter is required to pay a tax for selling his 
 own production or that of his tenants paid to him as rent, pro- 
 vided he must not retail or peddle it to consumers, or to persons 
 who are not licensed dealers, or for exportation. 
 
 14. A fruit vender sets up a large stand on the sidewalk in front 
 of my house without permission ; have 1 a right to order him away, 
 
INTESTACY. 
 
 289 
 
 and if he refuses to go, what must I do to have him removed ? Can 1 
 demand rent from him ? 
 
 A. Our correspondent can have him removed summarily, un- 
 less he has a permit for his stand from the authorities ; and if he 
 has, the latter can get it revoked on a proper presentation of the 
 matter. The Bureau of Incumbrances Superintendent will take 
 the matter in charge on a proper complaint. He may be allowed 
 by our correspondent to stay, if permitted by the authorities, on 
 payment of compensation. 
 
 INTESTACY. 
 
 1 . 1. If a single man dies without leaving a will who would inherit 
 his property if he has brothers, sisters, and parents living ? 
 
 2. If a married man dies without leaving a will, having a wife but 
 no children, what disposition does the law make of his property ? 
 
 3. Who would inherit the property of a single man leaving no 
 parent, brothers, or sisters ? 
 
 A. 1. In the first case specified the father inherits, except 
 that if the intestate has received real estate from his mother it 
 goes back to her for life, and then to his brothers and sisters, or 
 their representatives. 
 
 2. In the next case the widow has one-third life interest in 
 the real estate, and one-half the personal estate absolutely, after 
 payment of debts. If there are no parents, brothers, or sisters, 
 the widow takes the whole. The real estate, subject to dower 
 right, follows the same course as in the first instance. 
 
 3. The intestate's property would go to his other collateral 
 relatives, if any ; if none, then it w^ould escheat to the State. 
 
 2. My father died leaving mother with three children, and some 
 property in real estate. He died without making any will. We were all 
 in our minority when he died, but we have since attained our majority, 
 and we have been receiving our share of the income until my brother's 
 death. The question I would like to have you answer is this : Is my 
 mother entitled to my brother's share of the income, or, must it be 
 equally divided between her and the brother and sister ? And, who 
 has to pay his doctor's bill and funeral expenses ? 
 
 A. In this State the debts and funeral expenses of the de- 
 ceased brother must be paid out of his share of the inherited 
 estate or his other property, and all the rest of his personal prop- 
 19 
 
290 
 
 INTESTACY. 
 
 erty, he never having been married, to be divided equally between 
 his mother and surviving brother and sister, share and share 
 alike. His real estate goes to his mother for her use during her 
 life, and then descends in fee to his brother and sister. 
 
 •3. If a married woman dies in this State leaving property, land, 
 bank stock, and houseliold furniture, and makes no will, is her husband 
 entitled to any of the property, if they have never had any children ? 
 If so, what proportion ? 
 
 A. The husband Avill take all the personal property, but will 
 have no interest in the real estate. 
 
 4. A widow dies intestate, leaving two sons, the one being a step- 
 son; to v/hom will the property, both real and personal, belong ? The 
 greater part of the property came from an insurance left to the widow 
 by the husband when he died. 
 
 A. If we understand the statement, the husband insured his 
 life for the benefit of his wife, and she came into possession of 
 the money at his death. Afterwards she died (without making 
 a will), leaving property both real and personal. Her son will 
 inherit it all. The step-son is not an heir of hers, and is in no 
 sense of her blood. If she had only a life estate in any of the 
 property and it was thus left by her husband, of course the child- 
 ren would inherit an equal interest in that at her death. But ii 
 the property was hers so that she could dispose of it by will, 
 her son will inherit it all. 
 
 5. In case of a married lady living in this State, dying intestate 
 and leaving a husband, liow is ihe real and personal estate divided ? 
 The lady never had any children. 
 
 A. By the statute of distributions in this State, the liusband 
 has the same share in the personal property of the wife tliat she 
 would have in his if he died intestate ; but this does not apply 
 (by an oversight in the law, as we believe), to the estate of mar- 
 ried women who have no surviving descendants. In the case 
 cited, therefore, the husband can administer on the estate, and 
 claim the wdiole personal property. The real estate would go to 
 her heirs, he having no life interest from the fact that he had no 
 children by her. 
 
 6. Ct. — In regard to the law in Connecticut, if a man dies leavmg 
 
JVDGMEXT AXn EXECUTION. 
 
 291 
 
 an estate, but no children, what portion of property does the widow 
 receive, if any, as her own ? 
 
 A. If there are no children, nor legal representatives of child- 
 ren (as grand children), the ^vidow will be entitled to half the 
 personal property for ever, and one-third the real estate for life. 
 
 7. N. J. — In case of a bequest of real estate to a minor subject to 
 a life interets of another person, and the minor dies, does the property 
 go to the minor's or testator's heirs ? Do brothers and sisters inherit 
 before parents when the property came from neither of the latter ? Is 
 the law in New Jersey different in these respects ? 
 
 A. Taking it for granted that the testator died before the 
 legatee, so that the bequest w^as vested in the latter at the time 
 of his death, the estate, in New York, New Jersey, and every- 
 where else, would go to his (the minor's) heirs. The laws gov- 
 erning descent differ somewhat, however, in New York and New 
 Jersey. In the latter State, the property would go to the intes- 
 tate's brothers and sisters, in preference to the parents. In New 
 York, the estate not having been derived from either of the 
 parents, it Avould go to the father, or if he is not living, to the 
 mother, in preference to the brothers and sisters. 
 
 JUDGMENT AND EXECUTION. 
 EXECUTION. 
 
 1. I have a judgment against a party who has bank stock in his 
 own name, but w^ho has obtained a loan upon it for about one-half its 
 value. Is there any way by which I can levy and sell or get possession 
 of the stock ? Is it the property of the party who holds it as security 
 until his claim is paid ? 
 
 A. The stock can be levied upon, and the equity in it, above 
 the lien, held to satisfy the judgment. 
 
 2. A person fails in business in this State and owes me. I obtain 
 judgment against him, but can get hold of no property to satisfy the 
 judgment. Is there any hmitation in time to that judgment ? I find 
 my debtor has acquired and holds property in Massachusetts. Can I 
 do anything to recover my claim out of his possessions in Massachu- 
 setts ? 
 
 A. In this State the judgment ceases to be a lien on the 
 property of the debtor 10 years after it is docketed, but it re- 
 mains in force for 20 years, so as to permit the issue of execution 
 
•292 
 
 JUDGMENT AND EXECUTION. 
 
 ii})on it. The way to reach the property in another State is 
 either to bring the debtor up on supplementary proceedings, ex- 
 amine him as to his possessions located elsewhere and compel 
 him to pay the debt out of them, or to commence suit in that 
 State on the judgment obtained here. 
 
 3. A sues B before a police judge in Brooklyn and obtains judg- 
 ment against him for say 8150 ; the judgment is placed in hands of a 
 constable for collection, who levies on property of C, living in the same 
 house with B. C serves the constable with a written affidavit that the 
 goods levied upon belong to him and not to B, but nevertheless tlie con- 
 stable refuses to give up the goods. Thereupon C brings a replevin 
 suit in the county court, gets his goods back, and a judgment against 
 the constable for co>ts and damages, amounting together to 8 ISO. 
 Execution is issued but returned unsatisfied. After that the constable 
 is brought up under supplementary proceedings and swears that he 
 has no property, and that he did not require A to give bonds to hold 
 him harmless for levying on the wrong person's property. Now this 
 is an outrage. Does the law allow such an in^esponsible person to 
 levy, to satisfy a judgment, indiscriminately on «??// person's property 
 and put him to trouble and expense, leaving the injured party no re- 
 dress ? 
 
 A. Chapter 788 of the laws of 1872 points out the remedy in 
 such a case which is by suit on the constable's bonds. It seems 
 that leave of court must first be obtained. 
 
 4. A holds a judgment against B for $2,000 ; B has money left 
 him by a relation in Europe ; A sends a copy of the judgment to a 
 lawyer in that country, requesting him to claim it for him. After 
 waiting a few wrecks, A receives a letter from the lawyer stating that it 
 is impossible to claim the money on the papers sent, as he is obliged 
 personally to appear at court in that State and sue for the same. As 
 circumstances will not permit A to visit that country, you will greatly 
 obhge us by advising him what method to purstte. 
 
 A. The judgment may be legally assigned to some one who 
 can sue on it abroad, but the better way is to bring the debtor up 
 in the place where he resides and the judgment has been ob- 
 tained, and upon examination, and disclosures of the proi)erty, 
 procure an order of the court for payment out of it. 
 
 5. Will you kindly inform me if a patent can be sold by the sheriff 
 under the following conditions : 
 
 Two men enter into a partnership for the manufacture and sale of a 
 patented article. One furnishes the money, the other the patent.^ After 
 working a little over a year they have not succeeded in getting the 
 
JUDGMENT AND EXECUTION. 
 
 293 
 
 article into market, and cannot meet their payments. Now if tlie land- 
 lord sells them out to get his rent, can he sell the patent, or is that ex- 
 empt from the company's debts ? 
 
 A. A patent can be taken on execution and sold like other 
 personal property. A landlord can not seize it for rent, unless 
 it has been pledged as security, without he gets judgment and 
 then takes it on execution. If fixtures, machinery, etc., are 
 mortgaged, the patented right for which these were to be em- 
 ployed would not be involved unless it was expressly covered by 
 the terms of the lien. 
 
 6. A dies leaving a widow and two children. By the terms of his 
 will (which is now being contested by one of the children, and is yet 
 undecided) he leaves, after several bequests, a large portion to his 
 widow, and upon her death, that then her portion is to vest absolutely 
 in her son J. Now I have a judgment against this son J. Has he any 
 interest now that I can sell ? (Jan the sheriff levy upon the expectant 
 estate he is to receive upon his mother's death ? and, providing he can, 
 must the surrogate's leave be obtained before execution can issue ? 
 
 A. A vented future estate is liable to execution. And an es- 
 tate is vested when there " is a person in being wdio would have 
 an immediate right to the possession of the lands upon the ceas- 
 ing of the precedent estate. " (Moore v. Littel, 41 N. Y., 66.) 
 Accordingly, if the will is established, and contains no provis- 
 ions which operate to defeat this definition of a vested future es- 
 tate, the son's interest may be sold under execution. The Sur- 
 rogate's leave is unnecessary. 
 
 7. A is a farmer living on a hired farm, has had horses, cows, 
 sheep, and such utensils as were necessary to work the farm. He sells 
 all his personal property (such as cows and horses) to B, with excep- 
 tion of one double wagon and one mowing machine, and leaves the 
 farm. Now C holds a note against A and has got judgment against 
 him ; can he take the mowing machine and wagon for such debt if 
 there is no other claim on them, or are they exempted property ? 
 
 A. Necessary " working tools and team, " not exceeding in 
 value 8250, owned by a householder, or person haA'ing a family 
 for wliom he provides, arc exempted from execution for any debt, 
 except the wages of a domestic or the purchase money of the 
 articles themselves. (Section 1,891, Code of Civil Procedure, 
 18TT.) The provision is substantially the same as that previ- 
 ously existent, under which it was held that a " threshing ma- 
 
294 
 
 JUDGMENT AND EXECUTION. 
 
 chine " was not exempt (Ford vs. Johnson, 34 Barb., 304). The 
 mowing machine, therefore, is no donbt liable to be taken on ex- 
 ecution. The wagon, not actually belonging to a " team, " is 
 probably in the same category, though this may not be quite 
 certain. 
 
 JUDGMENT. 
 
 8. A person gives a note, which is not paid at maturity, and the 
 holder takes judgment by default ; after some time the maker is in 
 position to pay, asks for a statement, remits the amount and gets a re- 
 ceipt in full ; he finds, however, that besides the interest, the cost of 
 the judgment amounts to $28.89, which appears to be excessive. The 
 question now is what is the cost of a judgment obtained in the Su- 
 preme Court of Orange county ? Is the plaintiff entitled to include the 
 fee paid to his lawyer, without being authorized by the court, and 
 should not the debtor have his note handed back to him, as also the 
 judgment, or a copy of same, so that he can see what he is legally 
 bound to pay ? In case of overcharge by the plaintiff what is the 
 remedy ? 
 
 A. The costs taxable in such a case depend upon the course 
 of pleading in the action, that is to say, the point at which the 
 default took place, the number of defendants served, if more than 
 one, and other particulars wanting in the above statement. They 
 seem, however, as our correspondent thinks, excessive. The 
 question can be determined by sending to the County Clerk of 
 Orange county for a transcript of the judgment. The surrender 
 of the note is a matter of indifference; not so, however, the 
 entry of satisfaction in the Orange County Clerk's office, and 
 here also, if there has been a transcript filed, which it would be 
 imprudent to leave for the creditor to attend to, since he might 
 be tricky, and prefer to give himself a chance to collect the 
 amount a second time. He should be asked, either to send a 
 certificate of the clerk that satisfaction has been entered, or 
 a satisfaction piece, leaving the debtor to attend to the entry 
 himself. 
 
 9, Under present law does judgment before execution have any 
 preference in case of assignment, either against real or personal, or 
 after levy does assignment release from sheriff ? 
 
 A. An assignment under the State law, Tvhich alone is now 
 in force, will neither divest the lien on realty of a judgment ex- 
 
JUDGMENT AND EXECUTION 
 
 295 
 
 isting from the date of entry nor release personal property from 
 levy. 
 
 10. If a note or acceptance unpaid at maturity, and which has sev- 
 eral indorsers, is sued on and judgment got against all the parties at 
 the same time, must the execution against the principal be first used 
 before any of those against indorser can be used ? 
 
 A. The creditor may collect of the drawer, or either indorser, 
 whichever he can realize from most conveniently to himself. 
 
 1 1 . Our broker in Liverpool sells for us a cargo of merchandise to 
 a firm in Scotland. Buyer receives and pays for cargo, but claims re- 
 clamation. Our broker investigates the claim, and is satisfied that it is 
 unjust, and would not have been made if the market for the goods had 
 not declined between the time of purchase and arrival of the goods in 
 Scotland, so declines to entertain or consider the claim, and we sup- 
 posed the matter was at an end. Nov>r, after a year or more has passed, 
 we are served with a notice of a suit against us in the Exchequer Di- 
 vision of Her Majesty's High Court of Justices in England, by writ of 
 that court dated first day of May, and we are ordered to defend that 
 suit within six weeks from notice, or judgment will be given against 
 us. Please inform us if a decision of an English court can effect a 
 citizen of the United States, and if so, how such a decision could be 
 carried out. 
 
 A. A judgment recovered in an English court could be fol- 
 lowed by levy upon any property of the defendant found within 
 the Kingdom. In this country the judgment would be without 
 effect, until after suit brought upon it, and judgment obtained 
 here, the same as upon other evidence of debt. 
 
 12. A brings suit against B, C, and D on a contract for $400, re- 
 covers judgment against B and C for full amount, and against D for 
 $100. 
 
 B is forced to pay the entire judgment and has it assigned to E. What 
 claim has B. under these circumstances, against C, who is jointly liable 
 for $400, and against D who is jointly liable for 100 ? Can he issue 
 execution against C for the $400, and against D for $100 or against 
 first, and then against C for the residue, or, being jointly liable with 
 C and D, can he only recover one-third from D of the judgment against 
 him, and one-half from C of the judgment against him, the balance be- 
 ing his share of the liability ? 
 
 A, If the $100 against D is included in the 8400 to be paid, 
 B can recover $100 from D and $150 from C, as their respective 
 contributions. 
 
29G 
 
 JUDGMENT AND EXECUTION. 
 
 13. Will a slierilf 's sale of real estate, under judgment obtained 
 in court against a husband, take away the right of the wife as to dower 
 m said real estate, in the state of New York ? Is the law in regard 
 to that the same in New Jersey ? 
 
 A. In all the States, as far as we know, where the wife has 
 a right of dower, such a sale of real estate is subject to her in- 
 terest, which cannot be taken from her without her consent by a 
 judgment against her husband. 
 
 14. In this State, (N. Y.,) we believe a judgment ceases to be a 
 lien against real estate in ten years. Can a judgment be renewed to 
 take precedence of a mortgage given after the original judgment is re- 
 corded ? 
 
 A. Before the Code of Civil Procedure, adopted in 1877, the 
 question proposed by our correspondent was considered one of 
 such difficulty that the framers of the Code declined to express an 
 opinion what the state of the law then actually was. For the 
 purpose of making it clear hereafter, however, it was provided 
 in the Code that judgments hereafter rendered, should consti- 
 tute a lien for ten years only after signing the judgment roll, but 
 that execution might nevertheless issue thereon after ten years, 
 upon recording a previous notice containing certain s|)ecified par- 
 ticulars. It was also particularly enacted that the lien of the 
 judgment should not be renewed until the filing and indexing of 
 the notice. Under this provision, a mortgage, or other incum- 
 brance, executed during the ten years of the original life of the 
 judgment, is let in on the expiration of the ten years, and the judg- 
 ment lien is remitted to a junior position. 
 
 15. A so-called judgment note was given by a firm in Illinois in 
 1858. The note was signed by the firm, as was also the confession of 
 judgment appended below. Neither of the firm signed the confession 
 of judgment in an individual capacity. Is the note outlawed ? And 
 is the confession of judgment binding, or null and void. Suit has never 
 been brought for the collection of the note, and nothing has been paid 
 on it. 
 
 A. The laws of Illinois require that confessions of judgments 
 shall be entered in court with certain formalities, and unless this 
 has Ijeen done in the above case, the note is barred l)y the Statute 
 of Limitations. If, on the other hand, judgment has been duly 
 entered, it may be revived by scire facias^ or be sued on in an action 
 
LANDLORD AND TENANT. 
 
 297 
 
 of debt against the partner or partners who signed the confession, 
 and we think that he or they would be hekl, the want of a seal 
 liaving been incidentally treated by the Illinois Supreme Court 
 as insufficient to invalidate a power to confess judgment. But 
 one partner could not bind another by his signature to the power, 
 as the same court distinctly held in Stoo v. State Bank of Illinois, 
 1 Scam., 428. 
 
 LANDLOED AND TENANT. 
 
 (see also lease.) 
 LANDLORD. 
 
 1. A lets to B for one year a cottage at $400. The tenants, man 
 and wife, find themselves afflicted with the prevailing trouble, chills 
 and fever. Their doctor, unable to account for the attack, falls back on 
 the theory of sewer gas. An expert of the Board of Health is called 
 in, who suggests alterations in the plumbing, unusually extensive. 
 "What are the rights of landlord and tenant in such a case? Is the 
 landlord compelled to make the alterations, or does refusal aUect the 
 lease, yet some months to run ? 
 
 A. It is not so much a question between the landlord and tenant 
 as between the former and the city authorities. The Board of 
 Health in our large cities are given such arbitrary power that they 
 may compel such changes in plumbing as their Avliims or fancy 
 may suggest, and the landlord has no redress. 
 
 2. "A" holds a chattel mortgage on "B's" stock of goods for 
 $1,000 and when the time expires forecloses, and only realizes $600. 
 "C," who is "B's" landlord, then looked to ''A" for $100 rent, due 
 him from "B" which he claims would have been paid if A " had 
 not foreclosed. Could C " in any case look to " A " for rent due 
 him from "B" ? 
 
 A. If A after foreclosure occupied the premises, he may be 
 held for rent during his occupancy, but cannot be held as a re- 
 sult of the foreclosure proceedings. 
 
 3. Tenants of mine relet a portion of their store for a year to ^lay 
 1, prox. rent payable monthly, and having failed before the expiration 
 of their lease, turned over the care of this and other sub-tenants, and 
 the collection of their rents, to me. After remaining in possession of 
 the premises nearly a month after the failure, and after the transfer to 
 my charge, as stated, of which he was cognizant, he moves out, 
 and declares he is not liable for rent any longer. I claim his respon- 
 
298 LAXDLOUD AXD TEXAXT. 
 
 sibility does not terminate until 1st May, and that I can collect by suit 
 if he refuses to pay. 
 
 A. Cannot enforce the sub-tenant's lease, there l)cing no 
 privity, either of estate or contract, between them. Jennings v. 
 Alexander, 1 Hilt., 154. 
 
 4. I leased a house in this city to a man ; he died before the lease 
 expired, leaving no mil. Can I hold this man's children or widow to 
 keep the house for the unexpired term of the lease ? 
 
 A. Only a man's estate can be held to make good liis con- 
 tracts. Neither his Avidow nor his children, out of their earn- 
 ings, can be compelled to contribute to this end. As far as his 
 estate will go, the rent to the end of the unex|)ired lease is col- 
 lectible. 
 
 5. A verbally leases a store to B for $10,000, he paying $2,500 in 
 advance for one quarter. C, occupying the premises, claims to hold 
 possession also under a verbal lease from A, and refuses to remove. 
 Both B and C claim to have witnesses to the contracts. What are the 
 legal rights of the parties 7 
 
 A. B can recover back his advance payment, and whatever 
 direct damages he can show that he has suffered. 
 
 6. I rent a house for one year, the agreement being made verbally 
 in the presence of a witness, the landlord agreeing to keep the roof, 
 pipes and permanent fixtures in order. If he fails to do so within a 
 reasonable time after my notifying him that certain repairs are needed, 
 can I have such repairs done myself and deduct the cost of the same 
 from my rent ? Also under the above agreement who is responsible, 
 myself or the landlord, if outside panes of glass are broken by boys 
 whose parents cannot be found ? 
 
 A. As far as the covenant to repair goes the tenant can, on 
 refusal or neglect of the landlord, after due notice, to comply with 
 his agreement, order the repairs himself, and make the charge a 
 counterclaim for the rent. Beyond this limit, as in case of the 
 broken glass, the burden of repairing is wholly with the tenant. 
 
 7. When a new building is rented as a residence, is it the duty of 
 the owner of tlie building to put in the chandeliers and brackets for 
 gas burners, unless by special agreement ? 
 
 A. Gas-fixtures are not an essential part of the realty : and 
 tne owner is not required to furnish them. The tenant must 
 
LANDLORD AND TENANT. 
 
 299 
 
 supply tliem for liimsclf if the landlord does not do it, and in 
 this case may remove them when lie leaves, or sell them if he 
 can to his successor. In later years, in this vicinity, and 
 indeed wherever gas is used, the owner of the house 
 designed for rent generally puts in the gas-fixtures, because their 
 absence is generally a bar to the letting of the premises, and lie 
 can get more than the interest on their cost in the price of the 
 lease, but he is not required to do it unless it is in his agreement. 
 
 8. I hold lease of a building with the regular stipulations in printed 
 form, and the following inserted in writing : " And I also agree to 
 make such repairs as may be required to the building, except to the 
 roof and damage caused by fire." I have made all the repairs i-equisite 
 within the building as far as the eye could discover, and put it in proper 
 and tenantable condition. A rain storm occurs and fills my basement 
 say with seven or eight inches of water and mud, and upon investiga- • 
 tion I find that the vault foundation wall is defective, having an aper- 
 ture sufficiently large to admit not only the water, but a couple of cart- 
 loads of sand with it, which had been used to cover over a new pave- 
 ment just laid down ? I also discover a big hollow under the sidewalk 
 which took over two cartloads of sand to fill up. The v/ater and mud 
 in the basement floor caused considerable damage to merchandise. I 
 make out the amount of same and present the bill to the landlord as 
 a part payment for quarter's rent due Istinst. lie says he is not liable, 
 and refuses to entertain it. Now what I want to know is, is he right 
 or wrong ? I could not know how the foundation wall stood when I 
 hired the building, as to all appearance it seemed right, and I took it 
 for granted it was. 
 
 A. It has often appeared to us equitable that a landlord 
 should be responsible for repairs, the necessity for which arises 
 out of defects of construction and like causes, and not as mere 
 incidents of use and occu])ation. But it has been firmly settled 
 by the courts that the landlord is not bound to make repairs un- 
 less he covenants to do so (Taylor, Landlord and Tenant, 104) ; 
 that he is under no obligation to protect his tenant from adjoin- 
 ing excavations (Sherwood v. Seaman, 2 Bosw., 127 ; Howard v. 
 Doolittle, 3 Duer, 464 ; AYliite v. Mealio, 37 N. Y. Superior 
 Court, 72) ; and in the contract of letting there is no implied 
 warranty that the premises are tenantable (flayer v. MoUei", 1 
 Hilt, 491). Hard as it may seem, therefore, we fear that our 
 correspondent must bear the loss himself. 
 
3U0 LAXIJLOUD AND TENANT. 
 
 9. About four months ago a pump which I have in my kitchen, 
 and which, by the way, has seen more than fifteen years' service, gave 
 out and left the house and place which myself and family are occupying 
 wilhuut any supply of water for drinking and cooking purposes. 1 
 repeatedly requested the landlord to have the pump fixed, or a new 
 one put in its place, but. as yet. without avail. Would it be legal for 
 me to have the pump fixed, or, if that should prove impossible, to have 
 a new one put up in its place, deducting the amount of the plumber's 
 bill from the rent ? 
 
 A. The landlord is not bound to repair, unless there is a 
 provision to this effect in the lease. If there is such a provision, 
 and the landlord refuses, after notice to put tlie pump in order, 
 the tenant may do it and set it off against the rent. And he 
 may also collect damages from his landlord for all he has suf- 
 fered by his neglect. 
 
 10. A party having improved real estate, insures it and lets it out. 
 Can anything his tenants do vitiate the policies in case of fiie ? The 
 question is asked, as fire policies contain so many loopholes and require 
 special permits for so many things. A landlord cannot tell whether 
 any of his tenants use oil for lights, or have any combustibles in the 
 house they occupy, or are experimenting with anything classed 
 extra or specially hazardous. 
 
 A. There is a form of policy for the benefit of a mortgagee, 
 which insures against fire, no matter what the occupant may do ; 
 but we know of no such engagement for the benefit of a landlord 
 as against the violation of the terms of the policy by his tenant. 
 
 11. A party has rented by the year an apartment in a flat house. 
 At the time of signing the lease the water flowed abundantly, botli cold 
 and hot, in the kitchen and bath room. For some time no hot water 
 can be had, and it looks as though the cold water was soon going to 
 stop as well. Is such a nuisance to be classed among the acts of God, 
 without recourse against the landlord, who must of course feel an- 
 noyed, but helpless ? or can the landlord be made to share his part of 
 this dispensation, in the shape of a reduction in the rent, which he 
 has been getting in consideration of advantages which existed at the 
 time of making the lease, but which do not exist any longer ? Can 
 the tenant throw up his lease ? Can the landlord be compelled to 
 furnish such additional pumps as are needed to force the water in 
 the kitchen and in the bath room? The lease expressly says that 
 the landlord is to keep the water pipes in order. 
 
 A. The landlord promised to keep the pipes in order, but is 
 not responsible for the pressure of water furnished by the Croton 
 
LANDLORD AND TENANT. 
 
 301 
 
 water department. If tlie latter were to give out to-morrow, tlie 
 leases of householders in the city would not thereby be vacated. 
 
 12. Is a landlord under all circumstances responsible for damage 
 to merchandise caused by rain water, the roof of the building being 
 defective, and the landlord having been notified thereof ? Who must 
 make the claim for such damage, the owner of the merchandise, or 
 the tenant who only sells said merchandise on commission ? 
 
 A. The landlord is not responsible in this case and the com- 
 mission merchant must make the loss good if he knew (as ap- 
 pears) that the roof Avas defective. 
 
 13. I was notified on the 5th inst. by my tenant that the roof had 
 leaked and his goods were damaged. No previous notice of a leak or 
 danger of a leak was given. The leak probably occurred on the night 
 of the 4th. I immediately took measures to repair, as I always do 
 whenever notified of a necessity. Tlie leak and consequent damage 
 was of course unavoidable and unsuspected, as landlord and tenant had 
 an interview on the 2d inst. and no mention was made of any leak, 
 while the freezing of water in pipes was mentioned. Tenant sends me 
 a bill for damage to his goods and I decline to pay on the ground that 
 the leak was an accident happening from a superior agency " (Harvey 
 V. Hill, Dunlap and supp., 19o) and for which the landlord is not re- 
 sponsible in damages. Please state if I am right in declining to pay 
 the damage. 
 
 A. The landlord is not responsible in this case for any dam- 
 age to the goods, if the facts are correctly stated. 
 
 14. We are joint occupants of premises, each having dealings 
 direct with the owner for our parts of the building ; the parties having 
 second floor and cellar, we the remainder of the building. Whose loss 
 is the damage received by the bursting of water pipe ? Said burst 
 occurred on the second floor, thereby damaging goods on first floor. 
 
 A. Where an accident happens entirely from a superior 
 agency, and without default on the part of the defendant, or 
 blame imputable to him, no action can be maintained against 
 him for damages. (Harvey v. Dunlap, Hill and D., Supp., 193). 
 In case of damages done by the bursting of a water pipe, Judge 
 Robinson, of the superior court observed that "no one is 
 responsible for injury received by their breaking unless caused 
 by negligence or design. If all due diligence is used in making 
 and maintaining the pipes the injury becomes an unavoidable ac- 
 cident, for which no one is responsible." (Perry v. The Mayor 
 
302 LANDLORD AXD TEXAXT. 
 
 etc., of Xew York, 8 Bos., 504.) Though the remark was possi- 
 bly obiter in that case, yet we suppose it correctly states the rule, 
 and therefore that neither the co-tenant nor landlord is liable 
 unless the bursting of the pipe was in consequence of defective 
 construction, in which case the demand should be against the 
 landlord ; or unless the tenant did not take proper care to keej) 
 the i)ipes from freezing, in Avhicli case he would be the party who 
 ought to answer. 
 
 15. ^Ve occupy a store in Broadway which is heated by steam 
 pipes. One of these pipes burst and damaged goods to the amount of 
 several hundred dollars. Can we hold the owner of the house respon 
 sible for the amount ? 
 
 A. The house-owner is not an insurer of liis tenant's goods, 
 and cannot be held liable for the damage, unless guilty of gross 
 negligence in the construction or use of the pipes. 
 
 1 6. A owns a house in Brooklyn which he leases to B for three 
 years. At the time the lease was signed the house had a cherry tree 
 in the back yard and a couple of maple trees in front. Has A any 
 right to have any or all of these trees cut down before the three years' 
 lease is up, and against B's will ? 
 
 Are the trees in the street owned by the city ? 
 
 A. The owner of the property would not have the right to 
 enter upon leased premises and remove anything that woukl 
 lessen the value of the same to the lessee, or disturb his quiet en- 
 joyment. 
 
 The trees in front belong to the owner and not to the city, but 
 the latter assumes the right to cut, trim, and sometimes to re- 
 move the same, and this is often done in a very arbitrary manner. 
 
 17. N. J. — A lives in New Jersey, where he hires a house by the 
 month. He demands of the agent and the owner that certain neces- 
 sary repairs be done, and refuses to pay until they are made. He 
 makes a portion of the repairs himself and says he will take it out of 
 the rent when he pays, but will not pay until all repairs are made. 
 The furniture in the house belongs to his wife. The landlord sends a 
 deputy sheriff and distrains the goods. Must the owner (wife of A) 
 replevin ? Can she simply protest and let it go to a sale, and then 
 hold the landlord responsible ? and what is the measure of damages ? 
 State the proper course to maintain her riglits and what are her rights. 
 Must not the landlord proceed by civil process against the husband ? 
 
 A. Our correspondent should first make sure that his land- 
 
LANDLORD AXD TEXANT. 
 
 3U3 
 
 lord is bound to repair, which is not the case unless he has 
 a^ii'reed to do so. The right of distress still existing in New 
 Jersey, and furniture in the lessee's possession being prima facie 
 liable to seizure, no vindictive damages could be obtained for 
 taking the wife's property ; and though she is not obliged to re- 
 plevy before the sale, it would be to lier advantage to do so. The 
 process adopted by the landlord is the one in common use in Xew 
 J ersey. 
 
 MISCELLANEOUS. 
 
 1 8. An agent who has during the past year collected tlie rent of 
 the store occupied by us, informs us that he has an offer for the store and 
 advises us to make the same ofier, and offers to give us 12 hoiurs to 
 think of it, and before the time expires we conclude to do as he 
 advised, and notify him of it by mail and in person. Does the accept- 
 ance of the agent's offer bind the owner, and can we hold the store for 
 another year ? 
 
 X. If the agent had authority to let the premises, and accepted 
 the offer on behalf of the owner, it would bind the latter ; but if 
 the agent took the offer to communicate it to his principal, and 
 the latter choose to let the premises to some other tenant, he 
 would not be bound by it. 
 
 19. I leased my store to a tenant for five years. I agreed to put 
 the building in good repair. It only wanted a few window glasses in 
 to put It in order, and I was to keep it in tenantable repair. About 
 twenty-five years after the building was constructed, I had an elevator 
 put in. Soon after the party took possession he sent word that he 
 wanted the elevator repaired. I think it was not my business to repair 
 it as it was a fixture, and if the building was to burn down I would 
 not recover for it without a special agreement for insurance on fixtures. 
 The tenant holds it is a part of the building ; no mention is made in 
 the lease about the elevator. 
 
 A. If there is a sufificient stairway, we doubt if the owner can 
 be obliged under a mere covenant to keep the building in " ten- 
 antable repair," to make repairs to an elevator. This is a " mod- 
 ern convenience," but buildings are tenantable without it. . 
 
 20. I rent a house from a real estate agent, but the owner of the 
 house signs the lease, in which nothing is said as to whom the rent 
 shall be paid. As I have had all the transactions with the broker, if 
 I pay him can the owner call on me for the money paid, in the event 
 of the broker faiUng or not turning the money over? 
 
304 
 
 LANDLORD AXD TEXAXT. 
 
 A. In order to justify such a payiiiciit, it would be necessary 
 for tlic tenant to prove either express uutliority, implied authoritv 
 by virtue of the course of dealings between the parties, or a usage 
 of trade. It is often the case that agents to let property also col- 
 lect the rents ; and where this has been the course of dealing be- 
 tween any particular parties it would no doubt make payment to 
 the agent safe. But this practice is perhaps not sufhciently 
 general to have become an established usage of trade, which could 
 be relied on by one having no other evidence of the agent's au- 
 thority than is specified in our correspondent's letter, and wc 
 could not advise any one to run the risk. He could pay in a 
 check to the landlord's order, or ask the agent to show his au- 
 thority to collect. 
 
 2 1 . Sixteen months ago I took apartments by the month, payable 
 monthly in advance. Shortly before the 1st of May the landlord de- 
 sired to know if we intended remaining, and on being told that we 
 did, seemed anxious to know if we would remain throughout the year. 
 He was informed that we certainly should unless something unex- 
 pected and untoward occurred. He now gives us less than a month's 
 notice that we must leave on the 1st of April, as he wants the place. The 
 rent has been paid punctually to the hour every month. Are we en- 
 titled to a month's notice, and under the circumstances can he oust us 
 before the 1st of May ? 
 
 A. Where a tenancy is from month to month no notice what- 
 ever need be given by either party to terminate the lease at the 
 end of the month. The tenant may remove or the landlord may 
 eject him, without previous notice at the end of any month. 
 
 22. About tw^o years ago we rented our present store, and during 
 our term of occupancy have built an office and other fixtures at our 
 own expense. We now intend to move and desire to remove the office 
 and fixtures. The owner of the store claims w^e cannot remove them, 
 we claim we can. 
 
 A. It is now settled that counters, offices and fixtures put in 
 by a tenant may be removed at the end of his term, providing he 
 leaves the premises in as good condition as he found them, or- 
 dinary wear and tear excepted. 
 
 23. Can a tenant remove a range which he builds in the wall of 
 premises he occupies ? also stationary tubs ? Suppose he mortgages 
 his furniture, which would include these items, can the mortgagee re- 
 
LANDLORD AND TENANT, 
 
 305 
 
 move them or dispose of them, whether rent is paid or not, v/ithout 
 consent of owner of premises ? 
 
 A. As a general thing tenants cannot remove fixtures which 
 have been made part of the freehold; and this certainly cannot 
 be done unless after the removal the tenant restores the building 
 to as complete a condition as it was in before the improvement 
 was made. Neither a range nor set-tubs, in a private dwelling, 
 would be classed as property that a tenant could mortgage, so 
 that they could be removed by the mortgagee without the consent 
 of the owner of the estate. 
 
 24. 1. What is considered to be a permanent fixture in a house 
 that a tenant must not disturb when vacating ? 
 
 2. Is a partition put up by a tenant to make two rooms out of one 
 in this category ? 
 
 3. Are stationary washtubs, partly paid by tenants, removable? 
 
 A, Domestic fixtures removable by the tenant are defined to 
 be such articles as a tenant attaches to a dwelling-house to make 
 his occupancy more confortable, and which may be removed 
 witliout doing substantial injury to the premises, such as furnar 
 ces, stoves, wardrobes, gas fixtures, &c. ; and also things merely 
 ornamental, as pier and chimney glasses, window blinds and cur- 
 tains and the like. Bat things affixed to the house, as doors, 
 windows, partitions, (unless loosely put up with screws,) shelves 
 (if nailed), locks and keys, and the like, he cannot remove, nor 
 without consent can he take shrubbery or flowers he may have 
 planted in the garden. The inquiries by which almost ever}^- 
 thing may be settled are these : Can the article be removed 
 without injury to the premises ? And will the premises be in as 
 good plight and condition after removal as they were before 
 annexation ? Stationary washtubs, toward the erection of which 
 the tenant may have contributed but part of the expense, would 
 not be removable at his option. 
 
 These remarks do not apply to trade fixtures in a shop or ware- 
 house. 
 
 25. A party owes $25, yearly rent for a piece of ground only. 
 The woman from whom he rented the ground has died, and the rent is 
 now about due and payable, and the question is, to whom is the rent 
 payable When the woman died, she left what money she had and 
 
 20 
 
306 LANDLORD AXD TEXAXT. 
 
 personal clTects, to an adopted daughter, as she had no children of her 
 own living. Tlie house she lived in and ground around it, was left by 
 the will of her deceased husband, to her use during her lifetime, and 
 at her death it was to go to his brother's children. The ground rented, 
 is a part of this property, and was let to this party last spring, by the 
 woman who has since then died, for $25 a year, payable next spring. 
 The adopted daughter claims the $25 rent, and so do the heirs of the 
 real property, viz.. the brother's children above named. The rent is 
 really not due until spring, but the party is willing to pay it now to 
 the legal claimant. Which of the two has the legal right to this rent ? 
 
 A. The proportion of yearly rent earned at the date of the 
 woman's death belongs, we think, to the ado|)ted daughtei' ; though 
 not payable till next spring ; the rest of it goes to the brother s 
 children. If the parties will not accept their division, the better 
 way would be to wait till suit, and then bring the money into 
 court and ask that the contestants be impleaded and settle the 
 matter between themselves. 
 
 26. Is the signature valid to lease of real estate by an agent, when 
 the lease is for more than one year ? 
 
 A. An agent has no power to bind the owner by an instru- 
 ment under seal executed in his own name. If the contract pur- 
 ports to be the landlord's agreement, then the question is simply 
 whether the agent had authority to execute it ; but if it purport 
 to be the agent's agreement under seal, it will not bind the owner. 
 (Dean v. Roesler, 1 Hilt, 420). Without written authority an 
 agent cannot make any kind of a lease that is good for more 
 than one year. (Cost v. Martens, 2 Robt,, 437 ; Porter v. Blei- 
 ler, 17 Barb., 149.) 
 
 TENANT. 
 
 27„ A party leased or hired a piece of land for the season,^ that is, 
 from early spring till snow comes in the fall. The land is in grass, 
 and has been used for pasture Has the lessee the right to plow the 
 land for a fall crop ? There have been no papers and nothing has 
 been said about it. 
 
 A. If the purpose for which +he land was to be used by the 
 lessee was neither expressed nor implied by the circumstances of 
 the hiring., we think he may plow and raise crops. For in such 
 a case a lessee is not restricted in devoting the premises to any 
 lawful use he may choose, unless it materially and essentially 
 affects their condition. If the land had recently been seeded, 
 
LAXDLORD AXD TEXAXT. 
 
 307 
 
 however, and this was known to the lessee, it might perhaps be 
 considered an essential change of condition to turn it into plow 
 land again, but we know of no actual authority to that effect. 
 
 28. My landlord is not the owner of the building but lessee. 
 Should he not pay his rent can the owner of the building seize property 
 of mine stored therein for such rent ? Could he seize such property 
 for the rent of the entire building (it being occupied by several tenants) 
 or only for the proportion of the building rented by me ? Are the effects 
 of boarders at a hotel or boarding house subject to similar seizure ? 
 
 A. The property of the tenant in this State, (N. Y.,) cannot 
 be seized for rent. Only such as is subject to execution can be 
 taken after suit and judgment as for any other debt. A special 
 act gives the keeper of a hotel and boarding-house in certain 
 cases a lien on the baggage of boarders. 
 
 29. What advantage results from having a lease of the premises 
 occupied by us placed on record ? 
 
 What action if any, on the part of a landlord would make a lease 
 for a year or term of years that has not been recorded invalid and de- 
 priving the party leasing the premises of their possession, there being 
 no default in the payment of the rent ? 
 
 Would change of ownership aSect our rights on premises leased ? 
 
 A. The sale of premises, leased for a longer term than three 
 years, if the purchaser took in good faith, for a valuable consider- 
 ation, without notice of the lease, would cut off the lease, unless 
 it was recorded. This answers all three of the above questions. 
 
 30. I rented a property in Xew Jersey at $30 per month for one 
 year from February 1, and have paid rent in advance, as stipulated, 
 for February and ^larch. I now find that the property is mortgaged 
 by the owner for $6,000, and he, being penniless and not able to pay 
 either taxes or interest, the property will most likely be sold by the 
 sheriff and bought in by the mortgagee. Now, sir, would you kindly 
 tell me whether my contract with the owner will hold good for the bah 
 ance of my year, or whether I will have to give up possession to the 
 purchaser, or be obliged to pay him a higher rent he may ask ; also to 
 whom I should pay the rent until the sheriff's sale takes place ? 
 
 A. A foreclosure and sale of the property will terminate the 
 lease, unless the mortgagee has given his assent to it. The 
 tenant may pay rent to the mortgagor, however, until notified by 
 the mortgagee not to do so, but it is hardly safe to pay in ad- 
 vance, as after notice lie would be liable to mortgagee. 
 
308 
 
 LANDLORD AND TENANT. 
 
 31. A leased a partially furnished house to B for one year. Plumb- 
 ing, both gas and water, soon showed its defects, being inferior m 
 quality and w^orkmanship. Plumber called in by B to repair, chiefly 
 the cesspool, to prevent water flowing into cellar. Who should pay? 
 
 or B ? On renewing lease A sent plumber to do certain repairs, 
 during which he neglected sufficiently to tighten a screw, and so ad- 
 mitted water causing a leak and damaging ceiling. Who should re- 
 pair said damage ? Landlord and plumber both refuse. If B repair 
 can he legally deduct cost from rent ? 
 
 A. A landlord is not bound to repair a house unless he cove- 
 nants to do so in the lease. If he does agree to repair, and neg- 
 lects it, the tenant may do it after due notice and off-set it 
 against the rent. A plumber, through whose fault or neglect the 
 damage has occurred, is bound to repair it, or to pay all tlie ex- 
 pense and trouble of the same. 
 
 32. A friend of mine in New Jersey has paid his rent monthly in 
 advance for years, but finds it more convenient now to pay at the end 
 of each month. His landlord threatens suit, claiming that the first 
 payment established a contract, although nothing as to the mode of 
 payment was said at the time. 
 
 A. The time when a promised rent is to be paid wdiere no 
 provision is made by a w^ritten contract, is to be determined in 
 the next place by oral evidence of the bargain ; or in the absence 
 of that, " if prior rent has been paid under the agreement, that 
 circumstance with the time and manner of payment, may be 
 necessary implication and in arriving at the correct understand- 
 ing of the parties as to the manner and time of payment, when 
 the same was not otherwise intelligently expressed. " From this 
 quotation it will be seen that the precedent established by the 
 tenant is against him, and in the absence of a specific contract, 
 will be binding upon him. 
 
 33. A party rented an apartment in a flat-house ; at the time it 
 was not noticed that tnere was a stable next door, directly under the 
 dining and bedroom windows, and no mention was made of it by the 
 landlord. As the weather becomes warmer, the odor becomes stronger, 
 and almost unbearable ; and oftentimes arises so strong at night as to 
 awaken one from a sound sleep, and the rooms always have the detest- 
 able smell in them. One of the family has not been well since living 
 in this apartment, and another has recently been taken ill , the sick- 
 ness of both is attributed to this nuisance. The Board of Health has 
 been appealed to several times, and they required a box to be made in 
 
LANDLORD AND TENANT. 309 
 
 wliicli to export the manure, but being boxed up seems to make the 
 smell the stronger. Under these circumstances is the lease, which is 
 for a little over a year, binding ? 
 
 A. The lease is binding, as the conditions described will not 
 vacate the agreement. 
 
 34. I have rented in Brooklyn a flat on the first of May with 
 the understanding that the apartments and halls were to be painted 
 and whitewashed, the former in May and the latter in June. The rooms 
 have been painted, but the halls have not yet been attended to. Can 
 I vacate the apartments on this account ? The flat would have been 
 $2 less a month, without repairs. 
 
 A. If the fiat was rented for a year the lessee cannot law- 
 fully vacate his lease because the landlord has been forgetful of 
 his promise. 
 
 35. I live in Jersey City, and rent a house which is very much out 
 of repair ; the landlord has promised to put it in repair, but does noth- 
 ing. Can I withhold the rent, or have the work done and deduct 
 from the rent ? Or must I move ? 
 
 A. Unless the needed repairs are positively part of the con- 
 tract wdien the house was rented, the landlord cannot be com- 
 pelled to make them, and the tenant has only to move at the end 
 of his lease. The lease of a house does not include an obliga- 
 tion on the part of the landlord to keep it in repair, and if he has 
 not specially contracted to do it, the tenant must make them at 
 his own expense, and cannot deduct it from the rent, nor can he 
 leave until his lease has expired. 
 
 36. Is a lessee of a house who covenants generally to repair, bound 
 to rebuild the house in case of accidental fire ? 
 
 A. In this State in case the premises are so injured by fire or 
 other casualty (without the fault of the lessee) that they are un- 
 tenantable, the lessee is authorized by special statute to termin- 
 ate the contract. 
 
 37. An agent let part of my house to a party who represented slie 
 was a dressmaker, and after moving in placed a sign on front of the 
 house announcing her business as clairvoyant and doctress. I wish to 
 get rid of her. Must I give her 30 days' notice from November], or 
 can I notify her to leave on November 1, and dispossess her then ? 
 Can I remove her sign from the house ? 
 
310 
 
 LANDLORD AXD TENANT. 
 
 A. The occui)ation of premises for an illegal business renders 
 the lease void, and the tenant may be removed by summary pro- 
 ceeding- in the district court. As a person undertaking to prac- 
 tice medicine without license from a regular medical society is 
 pursuing an illegal business, and it is not at all likely that a 
 female doctress and clairvoyant has such a license, so we have 
 no doubt that our correspondent can have his tenant legally re- 
 moved, without other notice than the court summons. 
 
 38. I let a store to a party who nailed strips to the walls, and 
 nailed his shelving and drawers to the strips. He has given up the 
 store and proceeded to take away his fixtures, leaving the strips still 
 affixed to the walls. The taking down of the strips will damage the 
 walls, and as he refused to do anything toward repairing the same. I 
 stopped him from removing his fixtures. What are my rights in this 
 matter ? He refuses to take down the strips and threatens suit. 
 
 A. The tenant can enforce his right to remove the fixtures. 
 If, however in affixing the strips and leaving them, he has been, 
 or shall be, gTiilty of doing a negligent injury to the premises, 
 the landlord may recover damages by suit ; but he cannot under- 
 take to set off the damage by preventing the tenant from taking 
 his fixtures away. Whether or no the circumstances of the case 
 are such as to support an action on the part of the landlord, Ave 
 should not care to say without knowing all the details, but we 
 fear not. 
 
 39. A hires a house of B for one year with a privilege of two 
 more. A remains two years and then moves. Can B hold A respon- 
 sible for the third year ? 
 
 A. If A took the house at the end of the first year for two 
 more he can be held, otherwise not. 
 
 40. A party leased from a landlord a store with back rooms ad- 
 joining. In the lease it was expressly stipulated that "the store was 
 to be used for the grocery business, and for no other purpose without 
 the written consent of the lessor." No mention was made of the back 
 rooms, as the lessee had had two previous leases of five years extent on 
 the same premises and under the same conditions, and had used the 
 back rooms for dwelling ; for this reason it was thought unnecessary to 
 mention in the lease that the rooms were for dwelling, although it was 
 mutually understood that they were to be used for that purpose. 
 Shortly after the lease went into operation the lessee removed his resi- 
 dence from the back rooms and has in turn fiUed them, despite the 
 
LANDLORD AND TENANT. 
 
 311 
 
 remonstrances of . the lessor, with a stock necessary for the feed busi- 
 ness — feed, oats, meal, etc. The lessor claims that the lower portion 
 of his building will be ruined, the grain drawing vermin, rats, etc., 
 and its weight tending to weaken the floor. The question now sub- 
 mitted for your answer is, what redress has the lessor and in what 
 manner can this be obtained ? 
 
 A. From the statement made it does not appear plain to us 
 that the use of the premises described is a violation of the terms 
 of the lease, although it may be an act of bad faith on the part of 
 the tenant. If the provisions of the lease have been violated the 
 lessor may sue for damages, or restrain such use by injunction, 
 at his pleasure. 
 
 41. A leases his house or place of business to B by the year, and 
 tells him decidedly that he will not let or lease it for a less period. B 
 expresses his intention of vacating the premises on the first of May, 
 proximo, that being the date of the expiration of the lease. Notwith- 
 standing this B remains in possession of the premises until the 15th of 
 May, and then moves away. Can A collect from B rent for the year, 
 or for 30 days, or rather a month only ? 
 
 A. In the city of New York a tenant whose lease by the year 
 expires May 1, but who holds over and remains in possession of 
 premises thus leased to him by the year, is liable, at the option 
 of the landlord, for the rent to the first of May following. 
 Brewer v. Knapp, 1 Pick., 382 ; Ellis v. Paige, id. 43 *, Moore v. 
 Beasley, 3 Ham, 294, and a score of other decisions. 
 
 42. I occupied a flat up town, paying my rent monthly in advance. 
 I have no lease, although I have been in the house 8 years. The pre- 
 mises are untenable ; the sewerage is in bad order and the house sink- 
 ing. I have said to the landlord several times that as soon as I could 
 find a convenient place I would move. On the 29th of June I gave 
 notice to the janitor (not knowing the whereabouts of the landlord) 
 that I was going to leave : to let the landlord know it, I did this just 
 out of courtesy, for I am aware that by the laws of this State no notice 
 is required from either side when the rent is paid monthly in advance. 
 I began to move on the 1st July, and delivered the keys to the janitor 
 on the 3d. As I was going with my family out of town on that day, 
 I told the janitor (on the 29 th) to ask the landlord, as I had been such 
 a good steady tenant, if he would let my piano and parlor carpet re- 
 main until my return from the country on the 8th, The janitor said, 
 that as the flat could not be rented without repairing (it not having had 
 any during my stay) he did not see any objection. In the interval, 
 and on the 30th, the landlord came and saw my wife ! made no men- 
 tion of any objection to my request, but, on the contrary, tried to in- 
 
312 
 
 LAXBLOIW AXD TEXAXT. 
 
 duce us to remain, saying that he could not afford to lose such tenants, 
 and offered to make a reduction in the rent, etc. When I came home 
 in the afternoon 1 had the leases of my present abode signed, etc., and 
 therefore began moving on the 1st. iSly piano and parlor carpet were 
 removed on the 9th or 10th of July : as soon as I could possibly do it 
 after my return from the country. On the 11th of July the landlord 
 called at the oflBce and demanded his rent for July, which I refused, 
 naturally, to pay. Now he has sued me lor it, I don't know upon 
 what grounds. If on account of not having given him previous 
 notice, or because I did not vacate the premises on the 1st sharp ? 
 
 A. We suppose the case narrated comes under the legal effect 
 of " holding over," and that the landlord can recover by law the 
 rent for the month of J uly. If true in every particular, it pre- 
 sents a strange case against the landlord character ; but one need 
 not be governed by motives of pure philanthropy in order to be 
 successful in a suit for rent. 
 
 43. A man owning a house is unable to pay his mortgagers and 
 the house is sold at sheriff's sale. The tenants are in a quandary to 
 know to whom to pay their rent, as two or three agents have been 
 around trying to collect. How will they find out which is the legal 
 one ? 
 
 A. Wait till the buyer under the sheriff's sale shows evidence 
 that title has passed to him. If the rents had accrued at the 
 time of the sheriff's sale, they belong to the former owner, unless 
 they have been made payable to the receiver, by order of the 
 court, to satisfy a deficiency in the proceeds of the mortgaged 
 premises. 
 
 44. Will you please answer the following ? A leases a store for 
 one year and sub-lets an office to B for the same length of time. A 
 short time after B takes possession he loans A a sum of money, perfectly 
 secured, and agrees with A that the interest of the money sliall be in 
 lieu of rent. The arrangement is renewed for a second year, when 
 after three months A fails. Shortly after he resumes business, having 
 rearranged with the landlord. B holds a receipt from A saying that 
 the interest is paid in full for the year. Regardless of this cannot A 
 collect rent for premises occupied by B ? 
 
 A. If A got his discharge, the answer turns upon the question 
 whether or no the nine months' rent overpaid l)y the sub-tenant 
 was a provable debt. If it was cancelled so that his present 
 occupancy is by a new title and u])on new consideration, it 
 seems to us probable that A could enforce a demand for rent as 
 
LANDLORD AND TENANT. 313 
 
 if B had not previously paid it. But if there was no discharge, 
 or, possibly, if there was no change in the occupancy or title to 
 occupancy of the premises, it might be held that, as under such 
 circumstance A could not separate the executory from the exe- 
 cuted i)arts of the contract, as the assignee might have done, the 
 whole must be considered as executed, and B as in possession of 
 an indivisible term, for which full consideration has been re- 
 ceived, and therefore that rent is not collectible. 
 
 45. 'A has a furnished house in the country whicli he lets to B, the 
 lease expiring May 1, 1880. Soon after taking possession B's wife is 
 taken with the chills and fever, which he (B) claims is owing to the 
 house being in a malarial district, although there are no special causes 
 operating to produce malaria. This view is also held by his (B's) phy- 
 sician who says that the wife's health will be permanently injured 
 should she remain another season. On this ground B asks for a re- 
 lease from May 1st next, which A refuses to grant, except he (B) will 
 find another tenant on the same terms for the balance of the lease. 
 Now can A hold B to his contract and sue for the balance of the rent, 
 if he (B) gives up the house, which he threatens to do ? 
 
 A. We do not think the tenant can lawfully surrender the 
 lease under the circumstances stated, and that he is liable for the 
 rent for the full period for which he originally engaged. 
 
 46. A man rents a piece of property with a house, shop, and shed 
 on it. Alongside of the shop is the shed ; this he pulls down, and in 
 its place builds another new and larger shed. He is now moving away, 
 and they say he is going to puh down the shed which he built and take 
 the lumber with him. Please state the law on the subject, and oblige, 
 
 A. In a general way all buildings erected upon the land of 
 one person by another without any authority or agreement in 
 respect thereto, become a part of the realty, and cannot be re- 
 moved. But if the shed in question is a trade fixture erected by 
 the consent or permission of the landlord for the convenience of 
 the business the tenant is conducting, the latter may remove it. 
 He must, liowever, replace the premises in as good a condition 
 as he found them, and this would involve the re-erection of the 
 smaller shed which he removed. 
 
 47. Is it necessary to give a tenant a month's notice to surrender 
 possession of a house rented by the year when there is no lease ? Also 
 could 1 get a warrant to dispossess, and have it ready to serve in case 
 the parties held over ? 
 
314 
 
 LAXDLORD AXD TEXAXT. 
 
 A. Ill tliis State (X. Y.) no notice is required to a tenant wlio 
 has taken the premises for a single year, and lie must surrender at 
 the end of his term. To avoid however, any pretext that by a 
 verbal understanding he has re-leased the property for another 
 year, if there is likely to be any difficulty, a formal notice of the 
 termination of the contract may be served upon him. It will 
 take no considerable time to obtain a warrant if the tenant under- 
 takes to hold over, and it need not be secured in advance. 
 
 48. A being a tenant of B, and wishing to make alterations, exe- 
 cuted lease agreeing to restore premises to original conditicn. Pre- 
 vious to expiration of A's lease B rents the premises as altered, to C for 
 ensuing year. C obtains from A an assignment of his unexpired 
 lease, assuming A's liability for alterations, but B refuses to release 
 A, requirmg the fulfillment of his contract. C, being in possession, re- 
 fuses to permit this, whereupon B demands from A a sum equal to the 
 cost of restoring the alterations, although he holds C's agreement to 
 restore at end of his term. A sends B in payment of last month's rent 
 a check embodying the words ''in full for all demand," which B uses 
 -with his indorsement, while still refusing to execute a formal receipt, 
 and renew the above demand through his attorney. 
 
 As B suffers no loss, can A be held for damages ? 
 
 A- A can be held to his contract, but can only be com- 
 pelled to pay whatever B suffers by his failure to comply. If B 
 suffers no possible damage A will have nothing to pay. 
 
 49. If A hires a house of B for the term of five years, on which 
 there is a mortgage, if the lease of A be duly recorded will the fore- 
 closure of the mortgage oust A as the lessee ? 
 
 A. If the mortgage is given before the lease, the lessee can 
 be dispossessed by a purchaser under foreclosure. Not so, how- 
 ever, if the lease is on record first. 
 
 50. J. — A friend of mine rents a house in New Jersey on 
 which the taxes have not been paid for three years. The tax collector 
 threatens to levy on the furniture belonging to the tenant, and on 
 which his tax (for personal property) has been paid. Can he do so ? 
 If he has such power, what is the tenant's course to pursue ? He is 
 bound by the lease for another year. 
 
 A. The tax collector may levy on the furniture or upon any 
 property on the premises. By the law of New Jersey the tenant 
 can offset it against the rent, or recover against the landlord. 
 
LEASES. 
 
 515 
 
 51, Tex. — A rents from B a dwelling house at $25 per montli for 
 12 months (an agreement made and entered into in writing). While 
 in the possession of A the house burns. Can B collect for the 12 
 months, and if so, can A compel him to rebuild ? 
 
 A. We find none, and therefore conclude that the common 
 law rule is in force in Texas. By this law^ the tenant, unless 
 there is (as there should be) a contrary provision in the lease, is 
 bound to pay rent for the term agreed upon, though the pre- 
 mises are totally destroyed by fire. As to rebuilding, that de- 
 pends upon the covenants of the lease, but if the lessor has not 
 covenanted to repair he is not bound to rebuild, and can still collect 
 his rent. In this State (N, Y.) express provision is made by law 
 for such cases, and where the building is rendered untenantable by 
 fire, the tenant may surrender the lease or not at his pleasure. 
 
 LEASES. 
 
 (see also landlord and tenant.) 
 
 1 , The first of February coming on Saturday, is it not the duty of 
 tenants whose leases expire on the first to vacate on that day ? An 
 Israehte says it is his Sunday and he cannot move until the following 
 Monday. The new tenant must leave his premises on the first and 
 w^ants possession. What course, therefore, under the circumstances, 
 must the landlord pursue to put his new tenant in possession on the 
 first, from which date his lease commences ? 
 
 A. The tenant should move on Friday the 31st, and our cor- 
 respondent has the right to insist on this ; or if that is impossi- 
 ble, as the Jewish Sabbath closes at sundown on Saturday, a com- 
 promise may be effected by his vacating the premises at that 
 hour. 
 
 2, A person rents a place of business or loft and pays his rent by 
 the month. He does not tell the owner that he will take the place for 
 a whole year, but does not also state that he will take it by the month, 
 and a written agreement has not been made. Can the person rent- 
 ing the loft vacate it before the year is up ? 
 
 A. In this city, wiiere no time is specified, the lease expires 
 the 1st of May. 
 
 3, Does the lease of a dwelling-house — say for one year— hold good 
 under a foreclosure sale ? And if not, what can the lessee do to pro- 
 tect himself against being ejected before the expiration of the lease ? 
 
316 
 
 LLASES. 
 
 A. A lease by the mortgagor is not valid against tlie mortga- 
 gee, after foreclosure, unless the latter joined in it. The only 
 safe way of leasing mortgaged premises is to obtain the mortga- 
 gee's assent ; but the lease having been taken without it, we know 
 of no way by which the tenant may save himself from ejection, 
 after foreclosure, by the mortgagee, or purchaser under the mort- 
 gage. 
 
 4. Clothing firms who were burned out, thinking it too late to 
 make a stock for the following season, withdraw, so to speak, from 
 business for a season. Must they pay their employees who are employed 
 by the year ? I place the question on the same footing with a lease, 
 which is broken by the fire. I say a contract with a clerk is also 
 broken when a firm is 'thrown out of business" by the act of God 
 or the elements. 
 
 A. The lire does not relieve any one from a contract with his 
 clerks or workmen. Formerly, unless it was specially provided 
 for in the agreement, lire did not release the tenant, and he was 
 obliged to continue the payment of his rent to the end of his con- 
 tract, although the premises were burned to the ground and his 
 landlord might refuse to rebuild. But the statute has now pro- 
 vided that a tenant may surrender his lease upon the premises 
 becoming untenantable through fire or other casualty by no fault 
 of his ; it does not extend such a provision to a contract between 
 an employer and his clerks or laborers. 
 
 5. I have a written lease of store for 18 months from October 1st. 
 The property has since passed into the hands of a receiver, who notifies 
 me that from April 1st, the rent will be increased. Will you please 
 state whether I can be obliged to pay an increased rate for unexpired 
 term of lease ? 
 
 A. The statement is wanting in particulars necessary to form 
 a positive conclusion. We infer that the receivership exists in 
 favor of a judgment creditor ; and it may be said in a general 
 way that if so, and the creditor's lien attached prior to the exe- 
 cution of the lease, the latter is subordinate, and the lessee must 
 make what terms he can with the receiver. If the lease was the 
 prior lien, then the general rule would be the reverse. 
 
 6. Last May A hired a partially furnished house for one year, rent 
 payable monthly in advance, with privilege of another year from May 
 1st next. No time being fixed within which the tenant must decide 
 
LEA SES. 
 
 317 
 
 whether he will keep it. how soon is the landlord entitled to an 
 answer ? In other words how long may the tenant legally and equita- 
 bly delay his answer ? 
 
 A. Custom fixes an early date in February as the proper time, 
 but the courts have not, as far as we know, in this State, pro- 
 nounced whether it is binding in the law. The language of the 
 cases rather inclines to the conclusion that the lessee might have 
 until the last day of his first term to make his election, but this 
 course is not equitable, and we doubt if it would be sustained. 
 
 7. If a party rents a suit of rooms on the 3d of the month, can the 
 same party move from these rooms on the foUowmg 3d v/ithout telling 
 me beforehand of their intentions ? Can I not compel them to pay 
 for the remainder of this month ? 
 
 A. Where property is let by the month, the time begins and 
 expires, without other agreement, on the date of the possession, 
 or renting, and not necessarily on the 1st of the calendar month. 
 
 8. In the absence of a lease or agreement between a landlord and 
 tenant, whether the tenant who pays his rent monthly regularly, and 
 behaves properly, doing no damage to the property, can be ejected at 
 the option of the landlord, and at any time he may see fit ? 
 
 A. If the tenant has hired his house by the year, a written 
 lease is no consequence ; he cannot be turned out except at the 
 end of the year, when he must leave if the landlord desires it. 
 If he has hired by the month, he can be turned out at the end of 
 any month if the landlord chooses. The landlord is not obliged 
 to assign any person ; he can claim his premises from the most 
 faithful and punctual tenant, when the time has expired. 
 
 9. Would a clause in the lease prohibiting the landlord from rent- 
 ing any part of the building for special hazardous purposes be sufficient 
 to keep the former tenant insured ? 
 
 A. The lease clause referred to would not " keep him in- 
 sureed," unless he considered the landlord his insurer. But 
 such a clause is a good thing for a tenant in an ordinary line of 
 business to insist upon, for the reason that the landlord is thereby 
 held responsible for any change of hazard not covered by the 
 tenant's policy of insurance, and consequently will be particular 
 not to rent any part of the building for extra or specially hazard 
 ous purposes. 
 
818 
 
 LEASES. 
 
 10. A rents of B a store on March, 1870. Verbal agreement is, 
 that A can stay in the store for at least a year ; although B lias the 
 privilege of raising the rent from S2 to $3 per month from May, 187^. 
 On the 7th of April B orders A to leave the premises on May 1. Can 
 A be compelled to move (if he paid promptly), and if so, can A claim 
 damage for having had expenses etc., which he would not have had if 
 B had told him before that he had to move May 1 ? 
 
 A. If A absolutely agreed for a year's rent, and this can be 
 proved, the verbal bargain is just as good as if it was signed, 
 sealed, and placed on record, and A cannot be put out if he pays 
 his rent, until the expiration of the time. Or, if A rented up to 
 May, with a verbal agreement (which can be proved) that he 
 should then have the privilege of renewal at ^2 or $3 advance, 
 as might be agreed upon, this would hold, and entitle him to 
 possession. If in this case he is violently dispossessed against 
 his will, he can recover damages. 
 
 1 1 . The owner of a building lets the same through a broker to 
 two parties, one to take the store and basement and the other the lofts ; 
 but in order to simplify the transaction he prefers having the contract 
 made out only to one of the two lessees. First it. was made over to 
 the party that was to occupy the lofts, but a few days later the owner 
 for some reason desired to have the contract changed to the party that 
 had rented the store, naturally with the same understanding as to 
 the subletting by one of the occupants to the other. So when the lease 
 contract was delivered to the store party by the broker, they were 
 asked at the same sime to sign also the subletting contract, but being 
 too busy at the time, they promised to do so later, and after a delay of 
 several weeks they refused to sign it altogether, they having meanwhile 
 made up a larger concern, and finding it more to their purpose to use 
 the entire building. Consequently, the party that had hired the lofts 
 from the owner, is thus deprived of their right to use their part of the 
 building, and have to sustain great inconvenience and pecuniary loss in 
 not being able to find a suitable location. 
 
 A. A verbal lease, if it can be proved is, under these circum- 
 stances, a valid contract. We are inclined to tliink that the best 
 mode of procedure in the above case is to make a demand upon 
 the owner of the building to perform his verbal contract to lease 
 the lofts, and put the party entitled into possession of them. If 
 he cannot or w411 not bring this about, he can be made to answer 
 in damages. 
 
 1 2. On the 26th of March, our landlord came to our office and con. 
 rented to let us have the building we now occupy for another year, at 
 
LEASES. 
 
 819 
 
 the old rent, and same terms as old lease. At the time of the contract, 
 only one of the firm was present, and he agreed, verbally, to take it. 
 In the course of a few minutes after the landlord left, he came back 
 and said he wished the lease to run only to February instead of May, but 
 we might have the lease until 1881 if we wished. He was told that 
 such was not the original understanding, but if both of us were satis- 
 fied we would let him know on the return of the member of our firm 
 absent, but, in the meantime, we held the place as taken for a year. 
 Instead of waiting to hear from us he let the building at an advance 
 to another party, and now denies he ever let to us. It so happened, 
 however, that our office door being open at the time of the contract, a 
 party with whom we had some business heard the contract, and is will- 
 ing to swear he heard the facts as stated. AYe wish to know if we 
 have hired our store ; or if we can be dispossessed on the first of May, 
 and what notice, if any, we must give the landlord of our intention 
 to stay. 
 
 A. If the above statement can be proved to the satisfaction of 
 a court and jury, you can hold the premises for another year. 
 No notice to the landlord is needed, but it may be well to send 
 him word that the tenants hold to the verbal lease he gave, and 
 can establish it by legal proof. 
 
 13. 'Does not a lease terminable upon a legal holiday oblige the 
 tenant to vacate the previous day ? 
 
 A. The holiday law in this State only applies to bills of ex- 
 change, bank checks, and promissory notes. It does not affect a 
 lease ; and if such lease expires on a Sunday or other holiday, 
 the lessee cannot be compelled to vacate the day before. 
 
 1 4. N. J. — A gentleman in New Jersey leased a farm from a per- 
 son whom he had known for many years, and whom he trusted so much 
 that no written arrangement of any kmd passed between them. The 
 terms were for one year with the privilege of two more, at tenant's 
 option, entirely verbal and, I believe, without witnesses. The gentle- 
 man and his wife went to work and by their taste, skill, and money, 
 changed a common looking farm house into a neat, cosy cottage, with 
 pretty flower garden and various ocher accessories of a gentleman's 
 place. So great was the improvement under their hand that the owner 
 sold it for a good deal more, and he notifies them tnat they must leave it 
 at the end of the first year, and entirely ignores his agreement of two 
 years more, tenant's option. Can the gentleman be turned out thus ? 
 what rights has he in the case ? 
 
 A. A verbal lease for three years is good in New Jersey, and 
 so, it is safe to assume, would be a lease for one year with an 
 
320 LOAXS. 
 
 option of two more. The testimony of the parties can be taken 
 to establish the agreement. So if ejected from the premises our 
 correspondent can probably obtain damages of his landlord, and 
 the improvements made by the tenant would no doubt weigh with 
 the jury in making up their verdict. 
 
 LOAXS. 
 
 (see also collaterals.) 
 
 1. Inform me whether, when receiving during business hours a 
 sum due him with accrued interest for a number of days, a creditor is 
 entitled by law or usage to include in his computation of interest the 
 day on which the payment takes place ? I have always been under the 
 impression that interest on money loaned could be charged either for 
 the day upon which it was loaned, or for the day upon which it was 
 returned, but not upon both. 
 
 A. The day a loan is dated is excluded from the time it has 
 to run and from the calculation of interest, but the day of ma- 
 turity is included. (Story on Prem. Notes, sec. 211 ; Chitty on 
 Bills, ch. 9, pp. 403, 404, 406.) 
 
 2. A owes B $100. B gives C an order on A for $80. C presents 
 this draft to A who declines to honor it. Immediately afterward, B's 
 workmen whom he owes for wages, trustee in due form the $100, 
 which A has in hand owing B. The wages are proved, and the $100 
 is thus absorbed. And now B sues A for $80, the amount of the dis- 
 honored draft, or order. Can B collect ? 
 
 A. An attempt to hold A as still liable to B for the amount 
 of the draft or order, could be made only on the theory that he 
 w^as legally bound to accept the draft, and appropriate tlie re- 
 quisite amount of the debt, owed by him to its pa}'lnent. But 
 unless A is a banker, or had funds in his hands belonging to B 
 for the special purpose of meeting such a draft ; in other words, 
 if he was merely an ordinary debtor of B, he was not bound to 
 accept the draft, and his debt having been liquidated and dis- 
 charged by the trustee process, B has no cause of action against 
 him. 
 
 3. I lend my horse to an irresponsible person to use. I demand 
 him back after a few weeks, when he says he is not through with him 
 yet. I am told that I cannot take possession then of my own property, 
 but must wait his pleasure to give it up. If the man was responsible 
 I could ^U3 him for damages. 
 
MARRIAGE. 
 
 321 
 
 A. If the owner can recover possession of his liorse without 
 a breach of the peace he may do so, otherwise he will have to 
 resort to a justice's summons. If a few day's loss of the animal's 
 use will justify the expense, he may give bonds and compel the 
 immediate delivery of the property, without waiting for the return 
 day of the summons. 
 
 4. A being in business applies to C for a permanent loan, offering 
 a stated share of profits in lieu of interest. Can C enter into such an 
 arrangement without incurring liabiHty as a general partner in the 
 business ? If no, could the liability be avoided by advertising the loan 
 as at the risk of the business, or in any manner besides forming a 
 special partnership ? 
 
 A. A loan can be made at simple interest, and by agreement 
 be subjected to the risk of the business without constituting the 
 lender a partner. But an advance of capital, subject alike to the 
 risks of the business and to a share in the profits, will be certain 
 to involve the lender in the risks of the partnership beyond the 
 limit of the loan. The special partnership act was passed ex- 
 pressly to meet this case. 
 
 MAEEIAGE. 
 
 1 . If I go to a hotel and register my own name (having a lady 
 with me) and added, and wife," can that lady claim me legally as her 
 husband ? Or if I should introduce her to any one saying " my wife," 
 has she any legal claim upon me ? 
 
 A. In this State marriage is a civil contract, and this contract 
 is proved like any other bargain. Wliere no act of solemnization 
 by a magistrate or a minister can be shown, then cohabitation as 
 man and wife, and general reputation, are sufficient to establish 
 the existence of the contract. Under the latter one of the 
 strongest proofs has always been the acknowledgment by the hus- 
 band of the wife as sucli in the presence of third parties. A man 
 who should introduce a woman as his wife, and thus record her 
 name in the register of a hotel where they passed as man and 
 wife, if she should insist on her claim, could be held as her hus- 
 band provided there were no other testimony bearing on the 
 case. 
 
 2. Does not the revised statutes of the State of New York prohibit 
 the contraction of marriages between first cousins ? 
 
 21 
 
322 
 
 MARRIAGE. 
 
 A. There is no statute in this State on the subject, and such 
 marriages are comparatively frequent. Tlie physiological rear 
 sons commonly assigned are not sustained by satisfactory evi- 
 dence, and we have no serious objections against sucli marriages. 
 
 3. Mr. A and Miss B fill out the blanks which Ministers are 
 obliged to fill with the civil authorities, giving age, residence, parent's 
 names, etc., and sign the same with their full names. Afterward these 
 documents are exliibited to a third party, and the signatures acknowl- 
 edged to be genuine. Can this be construed to be a legal marriage 
 according to the laws and legal decisions of the State of New York ? 
 
 A. In this State marriage is a civil contract, and a mutual 
 agreement between competent parties to this effect is a legal 
 marriage provided it can be proved. Wlienthis contract is made 
 in private, the difficulty is to prove thattlic parties actually made 
 such an agreement. Tlie mere filling out of a blank return 
 stating that A and B had been married, even if signed by the 
 parties themselves, is not undeniable proof tliat they were thus 
 married, or had made such a contract. It may have been filled 
 up ii\ jest, where no marriage contract existed. An actual con- 
 tract of marriage signed by the parties before witnesses would 
 be evidence ; but the better way in all cases is to follow the usual 
 customs of marriage before some responsible recognized authority, 
 as a magistrate or clergyman. 
 
 4. Because priests are legally authorized to join people in wedlock 
 in a country, such marriage being recognized in law without any- 
 further sanction in a civil court, is it therefore correct to say that " civil 
 marriage is not necessary" in such a country? Who are the parties 
 ftuthorized to perform marriages in this country, and what rules of law 
 nre such parties compelled to conform to ? Is it necessary for a minis- 
 ter of religion who performs a marriage, or is he legally bound to 
 report the same to some civil authority ? 
 
 A. Where marriage is not recognized as a civil contract, but 
 as a itligious sacrament to be celebrated only by a ])riest, it is 
 proper to say that a civil marriage is not necessary. In tliis 
 State, (N. Y.,) the following persons are legally authorized to 
 solemnize laarriages, for the purpose of being registered and au- 
 thenticated, viz : :Ministcrs of the gospel and priests of every 
 denomination, mayors, recorders and aldermen of cities ; judges 
 of ihe county courts, and justices of the peace ; and judges and 
 
MARRIED WOMEN. 
 
 323 
 
 justices of courts of record. Jews and Quakers arc allowed 
 to marry according to the regulations of their respective societies. 
 Marriage is declared in this State, (N. Y.,) to be a civil contract, 
 and any such contract duly made in any form, is a legal marriage. 
 Those who perform the marriage service in this city, are required 
 to make a return to the registrar under a penalty. 
 
 MAKRIED WOMEN. 
 
 (see also husband and wife.) 
 
 1 . Can a wife dispose by will or otherwise, of real estate wbich 
 had been previously conveyed to her by her husband ? At her death, 
 having failed to make a will, would the property revert to her husband 
 or the children in equal proportion ? 
 
 A. If there was a valid conveyance by the husband to the 
 wife, the latter can dispose of the property, in part by will. If 
 she dies intestate, the property will descend to the children in 
 equal sliares, after the husband's life estate as tenant by courtesy. 
 Tliis estate he will also possess, in spite of the will, the remainder 
 being all that can be acted upon by the wife's testament. 
 
 2. Can a married woman, whose husband is alive, act under power 
 of attorney, without interference from her husband, and receive di\a. 
 dends and interest under that power, solely and independently of him ? 
 Can her unmarried daughter, being of age, act in a similar manner 
 under joint power with her mother ? Is it absolutely necessary for a 
 povy^er of attorney to bo recorded before it is acted on ? 
 
 A. In the execution of a power it makes no difference 
 whether a woman is married or single ; her husband has nothing 
 to do with it ; and she may be joined with her daughter or any 
 one else. If the power concerns real estate, or requires tlie ex- 
 ecution of an instrument under seal, it should be recorded, other- 
 wise such record is unnecessary. 
 
 3. Is a mortgage from a husband to a wife for actual money paid 
 by her therefor, good as in other cases where the relation does not 
 exist ? 
 
 Can a wife who has real and personal property in her own right will 
 it to other parties than her husband so that he has no right of dower ? 
 
 A. Under the laws of New York, a married woman may 
 tlius contract with her husband, and sue him, the same as any 
 other person, for breach. 
 
324 
 
 MARRIED WOMEN, 
 
 The same radical married "womairs acts enable her to will her 
 real and i)ersonal property to wliomsoever she may choose, and 
 if she wills it away from lier husband it defeats his rights as 
 tenant by the courtesy, so that he has no interest in it. (Hal- 
 field V. Sneden, 54 X.^ Y., 280.) 
 
 4. Is a woman's signature to a note or other obligation good, her 
 property consisting of her one-third interest in real estate left her by 
 her deceased husband ? 
 
 A. If the signature was made during the husband's lifetime, 
 
 it may not bind her separate estate, unless it was designed to 
 
 benefit her own property. But a widow binds her property by 
 
 her signature, precisely as a single man would, and to the same 
 
 extent. 
 
 5. A being married, had no children ; his wife had brother and 
 sisters. A's wife took a brother's daughter and brought her up, and 
 it is said adopted her. A, presuming he would die first, and anxious 
 to leave his property to his wife, deeded his real estate and transferred 
 his stocks to his wife. His wife died and left no will. A is still liv- 
 ing, and has brothers and sisters living. A's wife, now deceased, held 
 deeds for the real estate and the personal property, and left no will, 
 who shall inherit the property ? 
 
 A. If A's deed to his w^ife is without flaw, he will after her 
 death, under the circumstances stated, have only a life estate in 
 it, remainder for life to her father and mother if living, or either 
 of them, remainder to her brothers and sisters. The hardship 
 of such a descent, in the present case, would justify A in taking 
 advice as to the validity of his deed. The personal property trans- 
 ferred to his wife goes back to him. 
 
 6. N. J. — I sold goods to W & B, receiving a note payable in 30 
 days at a bank in Jersey City. The note was signed by the mother of 
 W, payable to the order of her husband, and indorsed by him and 
 young W, also by B. The note was put into bank here for collection, 
 and has come back protested. The signer of the note, Mrs. W, is 
 wealthy ; none of the indorsers have any property. Now can I en- 
 force the payment of the note, Mrs. W being a married woman resid- 
 ing in Jersey City ? 
 
 A. As a married woman in New Jersey cannot make herself 
 liable for the debt or defaidt of another, we fear that she could 
 resist payment of the note in question, unless it had an existence 
 as a valid obligation aside from the transaction above described. 
 
MISCELLANEO US. 
 
 325 
 
 MISCELLANEOUS. 
 
 1. How do you understand the law in reference to a widow who 
 is in receipt of a hfe annuity payable annually and semi-annually ? If 
 she should die a month before either should be payable, would her 
 legal representatives be entitled to a pro rata amount to the day of her 
 death, to meet obligations incurred previously on the strength of that 
 income ? 
 
 A. The English rule is stated to be that " as an annuity is 
 the grant of a sum of money payable at certain appointed times, 
 although the annuitant generally dies in the interval between 
 the times of payment, yet the law does not make any apportion- 
 ment between the part of the period elapsed and that which is 
 unexpired, but limits the payment to the last period completed 
 before the death of the annuitant. This proceeds upon the in- 
 terpretation of the contract by which the grantor binds himself 
 to pay a certain sum at fixed days during the life of the annui- 
 tant ; w^ien the latter dies, such day not liaving arrived, the 
 formei" is discharged from his obligation. " — Lumley's Law of 
 Annuities, 291. " A remarkable exception to the general rule, " 
 says the editor of Story's Equity Jurisprudence, 4th ed.,sec. 480, 
 note, " has been introduced in the instance of annuities for the 
 maintenance of infants, or of married women living separate from 
 their husbands. " The point has not been decided in the New 
 York courts, so far as we can ascertain, but in Pennsylvania it 
 has been held that an annuity to support a wife or child for life 
 is payable until death and is apportionable. " — Fisher v. Fisher, 
 Pa. L. J., p. 168. If apportionable, in the above case, the annui- 
 tant's representatives may recover a pro rata amount up to the 
 time of her death. Whether so or not, however, appears to be 
 an open question in New York, as a point of law. As a point in 
 equity we give our opinion that a proportionate amount of the 
 annuity should be paid. 
 
 2. We are owners of part of a first mortgage amounting to say 
 $250,000. A part of the bonds, say S"50.000, are held as collateral se. 
 curity, and on such bonds the coupons have not been paid by the com- 
 pany for five years, as the parties holding the collaterals have ample 
 protection in the bonds, and also because the interest on the debt 
 secured is paid at stated times as agreed. The bonds are deposited by 
 
326 
 
 MISCELLANEO US. 
 
 an individual party, and not by the company who issued them. Now 
 as bondholders, we are allowing a debt to be rolled up against the 
 property in the form of past due coupons, which may lessen our security 
 in case it is found necessary to sell the property. Have we any rights 
 by which we can force the past due coupons to be presented to the 
 company for payment, and thus keep down the debt to the amount of 
 the mortgage ? 
 
 A. The owners of the deposited bonds could no doubt com- 
 pel the collection of the coupons, but we doubt if an action could 
 Ije maintained by any of the other bondholders, there being no 
 privity between them and the bailees, and their interest in the 
 question being too remote or uncertain. It might even aj)pear 
 that they w^ill be likely to benefit by the delay, since in a year's 
 time the collection of the coupons first due w^ill be barred by the 
 statute of limitation. 
 
 3. Does the law of the United States prescribe that every power 
 of attorney executed in a foreign country nmst be accompanied by a 
 consul's certificate ? or is a foreign notary's seal sufficient ? 
 
 A. There is no law of the United States on the subject. 
 Where it is necessary to prove in the courts here the proper ex- 
 ecution of a power in a foreign country, the certification of a 
 United States consul under seal would be the readiest method of 
 verifying it, but there is no statute requiring it. 
 
 4. What is the liability of an only son (in receipt of a good salary 
 from a national bank) for his father's sustenance, his mother refusing 
 it, at the same time holding and collecting rents from real estate, the 
 title to which came to him from his said father ; the mother harboring 
 a son-in-law and family of no business, turns her husband adrift as 
 non compos mentis. The question is, which could the law prevail 
 against ? 
 
 A. The law of this State, (N. Y.,) obliges children to the ex- 
 tent of their ability to contribute to the support of their parents, 
 that they need not become a town charge. On application to the 
 Overseers of the Poor, or in this city to the Commissioners of 
 Charities, it is the duty of these officials to move the Court of 
 General Sessions for an order requiring the son to contribute to 
 his father's support, and fixing the sum which he must pay. 
 
 5. Can the State of Arkansas, after guaranteeing the first mort- 
 gage bonds of a Railroad Company of her State, be sued and judg- 
 
MISCELLANEO US. 
 
 327 
 
 ment obtained on the coupons of said bonds, and if tliere is any 
 remedy ? 
 
 A. The right of a private citizen to bring suit in the Federal 
 courts against a State of the Union, was taken away by Article 
 XL, adopted as an amendment of the Constitution of the United 
 States. 
 
 6, Can water rates be legally collected from churches in New York 
 State ? Please enumerate the taxes, municipal and otherwise, for 
 which the real estate of duly incorporated rehgious societies is liable. 
 
 A. It is provided by section 4, title 1, chapter 13, part 1 of 
 the Revised Statutes, that every building erected for the use of 
 a college, incorporated academy or seminary of learning ; every 
 building for public worship ; every school-house, court-house and 
 jail ; and the several lots whereon such buildings are situated, 
 and the furniture belonging to each of them, shall be exempt 
 from taxation. " 
 
 But, as said by the Supreme Court, Bronson J., in Sharp v. 
 Speir, 4 Hill, 76, " our laws have made a plain distinction be- 
 tween taxes, which are burdens or charges imposed upon persons 
 or property to raise money for public purposes, and msessments 
 for city and village improvements, which are not regarded as 
 burdens, but as an equivalent or compensation for the enhanced 
 value which the property of the person assessed has derived from 
 the improvement. " On this principle was the decision in the 
 matter of the Mayor of New York, Sfc.,for the enlarging and im- 
 proving a part of Nassau Street, 11 John, 77, where the fancy of 
 the reader is carried back many a year by the statement that the 
 commissioners " assessed the benefit of the proposed improve- 
 ment to the following churches, to be paid by them, viz.: on the 
 French Church Du St. Esprit, 81,273, the Presbyterian Church 
 in Wall street 81,981.81, and the Scotch Presbyterian Church in 
 Cedar street 8410. " 
 
 Water rates are not taxes, and though churches, unless it may 
 be the Baptist, may not have as much use for water as other 
 property, we think that on the principles above laid down they 
 would be held liable to pay. 
 
 7. Suppose a firm has established a credit agency in one line of 
 trade, to make investigations of buyers and receive a detailed state- 
 
328 
 
 MISCELLANEOUS. 
 
 ment of their affairs in writing signed by them ; suppose there are five 
 hundred subscribers or firms who pay the agency firm a certain sum 
 per annum for information ; can a form of statement be drawn up so 
 that statement thus made by debtors to the agency firm and received 
 by the creditor if goods are delivered upon the strength of it, will be 
 so binding that the creditor can hold the debtor criminally liable in 
 case the statement was untrue ? 
 
 How long would the statement be binding ? 
 
 A. The English authorities give the right of action to third 
 parties who are misled by false representations made by first to 
 second party concerning his estate, and our own courts, where 
 they have denied the right of third parties, have done it on 
 grounds wholly wanting in the case described. Our 0])inion is 
 that a customer would be bound by representations made to an 
 agency expressly for the benefit of its subscribers. 
 
 Such a statement would have no continuing effect. If true 
 when made, and the customer (without fraud) became insolvent 
 the next day, he could not be impeached or prosecuted because 
 of the sudden change in his affairs. 
 
 8. A person finds a sum of money in a pubHc passage w^ay of an 
 institution, an insurance company, for instance. After careful adver- 
 tising the owmer fails to appear to claim tbe money. To whom does it 
 belong (subject to claim by the loser, of course), the institution where 
 the money was found or the finder ? 
 
 A. We frequently have cases like the above submitted to us 
 for adjudication. The subject ought to be more thoroughly under- 
 stood by the public. The finder of any property astray is bound 
 to do what he can to seek the owner and roturn it to him ; but 
 until the owner, or some one legally entitled to appear for him, 
 is produced, the finder can hold it against the world. Before any 
 one can question the title of the finder, he must have some color 
 of title himself. It is very common for shopkeepers to insist 
 that money found on the shop floor or in the passaire way, shall 
 1)0 left with them until the owner is discovered. This case was 
 tried in England, (Bridges v. Hawsworth, 7 Eng. Law and Eq. 
 Rep., 424,) and decided that the finder who picked up the money 
 from the floor had a title as discoverer against the shopkeeper, 
 ^\\o did not pretend that the money was his own. Tlie question 
 has also l)een settled here (McAvoy v. Medina, 11 Allen, 548), 
 
MISCELLANEO US. 
 
 329 
 
 establishing the title of the finder against every one but tlie 
 owner. 
 
 9. A changes for R a twenty-dollar bank note as an accommoda- 
 tion, giving him small bank notes therefor. Subsequently A is in- 
 formed that the twenty-dollar note is counterfeit, and notifies R to 
 redeem it. R hands hnn ten dollars on account, and a few days after 
 calls for the twenty-dollar note, offering the balance, ten dollars. A 
 then informed R that the twenty-dollar note had been stolen from him, 
 and he is unable to return it, but demands the ten dollars balance due, 
 claiming as the twenty-dollar note was counterfeit and worthless, that 
 R suffers no loss by his not returning it. R not only refuses to pay 
 the ten dollars balance, but demands from A the ten dollars already 
 paid, claiming he could return the twenty-dollar note to the party from 
 whom he received it. Can A collect the balance, ten dollars, from R, 
 or, can R collect the ten dollars already paid A ? 
 
 A. If the above statement can be substantiated in all its 
 parts by tlie legal evidence, R can be compelled to pay the re- 
 maining ten dollars, and A is under no obligation, even if he had 
 it, to return the worthless note. R can recover of the person 
 who paid it to him in the same way. 
 
 10. We have an interesting question asked of us as to the liability 
 of a hotel-keeper for the value of a trunk containing valuable clothing 
 of a guest of his house, left in his care, under the following circum- 
 stances : the guest was for several days at the hotel in question (a first- 
 class house) ; on going away the bill for the time there was made out 
 and paid in full, but inasmuch as the guest was going to Canada with 
 her children to leave them at school, and was intending to return to 
 the hotel in a few weeks, she asked the office clerk in charge and to 
 whom she paid her bill, if one of her trunks could remain at the hotel 
 until she returned. He answered that it could remain with perfect 
 safety, and it would be returned to her when she got back. On her 
 return on her way homeward, she stopped at the hotel, asked for her 
 trunk, and it could not be found. On inquiry, she found that the land- 
 land or proprietor having recently sold out his interest in the hotel, 
 had ordered all the so-called unreclaimed baggage to be sold at auction, 
 and by mistake of some of the landlord's porters or employees her 
 trunk had been sold, there being no charges against it whatever. On 
 demand of the landlord for the return of the trunk and its contents 
 intact and uninjured, he said he could not return it and would not pay 
 for the value thereof, as he did not consider himself liable for any bag- 
 gage left by permission in the hotel by any guest, after his bill was 
 paid, even if the same had been sold '-by mistake." He acknowledges 
 that the trunk was sold by his orders, that is, he ordered all -'unre- 
 claimed baggage " to be sold, and his employees had no business to 
 have taken the trunk in question up out of the baggage room where it 
 
330 
 
 MIS CELLANEO US. 
 
 had been for several weeks. Still as it was done and was sold, why he 
 ii5 not liable. \\ hal is the law of New York on this subject? 
 
 A. If the guest had left for good, the landlord or proprietor 
 would not be liable as an inn-keeper to the owner of the trunk. 
 
 The liability of an inn-keeper, as such, ceases Avhen the guest 
 pays his bill and. leaves the house with the declared intention of 
 not returning. The guest then leaves his baggage behind him 
 at his own jieril, and the inn-keeper is no longer responsible for 
 it, unless it be committed to his charge, and then only as an or- 
 dinary bailee." N. Y. Sup. Court, Winternmte v. Clarke, 5 Sand., 
 242. ^loreover, an inn-keeper's clerk has no autliority to bind 
 the inn-keeper to liability for property delivered to him beyond 
 the time that the owner remained at the inn ; nor to agree to 
 keep the property nntill the guest can send for it." Sup. Court, 
 1870, Coykendall v. Eaton, 40 How. Pr., 266 ; 42 How. Pr., 378. 
 If the lady had departed with no promise of return, the hotel 
 ])roprietor Avould only have been liable for gross negligence on 
 the part of himself or servants, as in the case of an ordinary 
 bailee without hire. Even in that case, however, he could be 
 made liable for conversion of the property to his own use, or for 
 its sale on his account. But the fact that the owner was to re- 
 turn to the hotel takes this case out of the above restrictions, 
 and in our judgment makes the hotel proprietor liable as an inn- 
 keeper for the entire value of the property. 
 
 1 1 . Receiver's certificates that were stolen, were payable to bearer 
 at 6 per cent, interest due at time they were given, i. e., there was no 
 time specified to pay them in. Can we recover the certificates or their 
 value from the parties that hold them or have held them. Would the 
 party or parties that bought or sold them do so at their own peril, in- 
 asmuch as the certificates were due at the time they were stolen ? 
 Would they not come under the same head as a promissory note due 
 at the time it was transferred, and be subject to all ofi'sets by the 
 parties that previously held it ? 
 
 A. It is a general rule that the holder of negotiable paper in 
 order to acquire a better title than that of the person from whom 
 he received it, which in the case of a thief of course is none at 
 all, must have become possessed of it before it is overdue. 
 (Daniels on Negotiable Instruments, sec. 782.) But in respect 
 to instruments payable at sight or on demand, they are not re- 
 
jmis cellaneo us. 
 
 331 
 
 garcled as instantly overdue. " A reasonable time," says Par- 
 sons, must elapse before non-payment dishonors the bill or 
 note." In case of receiver's certificates, what would be such rea- 
 sonable time would have to be decided by the court in view of all 
 the circumstances surrounding the condition and business of the 
 road. If such reasonable time had gone by when the stolen cer- 
 tificates were put in circulation by the thief, the buyer could not 
 be considered a bona fide holder and would gain no title. 
 
 12. Assuming that a bridge over a stream would connect existing 
 highways in adjoining towns, arc the towns legally liable to build such 
 bridge ? Cite authorities. 
 
 A. We know of no express statutory provision on this point, 
 but the language in the supreme court in the case of Beckwith 
 V. Whalen, 5 Lans., 370, plainly intimates the opinion that under 
 such circumstances boih towns Avould be liable to join in building 
 a bridge. The case cited occurred in Monroe county, where the 
 highway commissioners of the town of Brighton commenced suit 
 against the town of Penheld to compel it to contribute to the ex- 
 pense of a bridge across Irondequoit Creek. They were non- 
 suited, because though there was a highway on the Brighton side, 
 there was none on the Penfield side. The court said : " No town 
 is under any liability or obligation to build or maintain a bridge 
 over any stream, unless such stream intersects a higliivayy This 
 is indeed only an incidental remark, but indicates the opinion of 
 the court, in which we concur. 
 
 13. About two years ago a case of merchandise was received by us 
 fully addressed with our name, street, and number. From whom it 
 came we do not know. What is the proper course for us to pursue ? 
 Not wishing to store it longer have we a right to sell, and should the 
 sale be made at public auction ? 
 
 A. It should be advertised and sold at public vendue and the 
 proceeds, over and above expenses, held for the rightful owner 
 whenever he claims it. 
 
 14. By what rule, if any, is the line drawn between personal prop- 
 erty and real estate, in the machinery and tools of a factory ? Is all 
 machinery not fastened to the floor personal property ? 
 
 A. All that might be removed if the factory was leased is 
 personal property ; the rest belongs to the realty. 
 
332 MISCELLANEOUS. 
 
 1 5. Please give the laws governing the notary's charges for protest- 
 ing notes in this State, particularly anything relating to expenses be- 
 yond fee (75 cents), notices and postage. 
 
 A. The fees of notaries are regulated by chapter 356, laws of 
 1865. In addition to the fee of T5 cents which he is entitled 
 to charge for a protest, including his seal, and a certificate when 
 required in case of suit, he may demand ten cents for each notice 
 not exceeding five, on each bill or notice protested. He can 
 make no extra charge for postage when the notices are mailed. 
 
 1 6. e constantly receive as result of our advertising sample 
 newspapers, often a number in succession, some of them for years. 
 Many of these papers are undesirable and are not opened, I had pre- 
 viously received a bill which 1 returned saying that I had not subscribed 
 for the paper. This is an aggressive method of creating a circulation 
 which 1 do not feel like encouraging. What is my responsibility and 
 duty in the matter ? 
 
 A. The above is not a singular case. Many persons, w^e 
 should say more than a dozen, have called upon us with a similar 
 complaint. In each instance the history was the same. A new 
 paper was started and a copy left at the door. In some cases it 
 was taken in and read ; in others it went into the waste basket 
 without attention. In all, however, the receivers supposed that 
 the publication was a gratuitous offering for their inspection. 
 At the end of about ten weeks a bill for the year was i-endered. 
 Some paid it rather than to have any difficulty. Some paid it to 
 date and stopped it. Some, and we may say most, refused to do 
 anything about it, considering it an impertinent attempt to extort 
 money from them. To these has been sent a note from a lawyer, 
 the said note having been reproduced in fac simile by the chiro- 
 graphic, or hectographic process, which takes from one to two 
 hundred copies, threatening suit unless payment is made. 
 
 There has been decisions, chiefly in the rural districts, estab- 
 lishing the right of a publisher to collect his subscription money 
 from one who received his paper and had not ordered it stopped. 
 In all these cases, as far as we can trace them, the publisher had 
 sent the paper in good faith, supposing that the recipient was a 
 bona fide subscriber. In most of them, the defendant had been 
 a subscriber by his own order, and had simply designed to let his 
 
3ns C EL LANE US. 
 
 subscription lapse without taking the trouble to inform the pul>- 
 lishers of that desire. 
 
 In the cases now under consideration the receivers of the 
 paper had never made any such contract, and had no idea that 
 the paper was sent to them with any expectation of sending in a 
 bill for it. There are many so called " Trade " papers that 
 get considerable remunerative advertising by agreeing to circulate 
 a given number of copies, and these are widely distributed with- 
 out any attempt to charge for them. It was a reasonable infer- 
 ence, therefore, when a merchant received each week a copy of 
 a publication for which he had not thought of subscribing that 
 it Avas distributed gratuitously. 
 
 We cannot say what a District Court judge might decide be- 
 fore whom a case of this kind should come, but we are quite 
 clear that the superior courts on the evidence now before us, 
 would dismiss the claim as without reasonable foundation, if not 
 utterly fraudulent. To imply a contract for subscription from 
 the receipt of a few copies of a new publication thrown in at the 
 door, or sent to the address of the house through tlie Post-office, 
 at a time when such gratuitous distribution is too common to 
 attract special attention, would in our judgment be a monstrous 
 perversion of the legal principles upon which the plaintiffs seek 
 to establish their claims. We advise every one threatened by 
 this lawyer, to resist payment, and if actually sued, to defend, 
 and establish the facts. If it is necessary to combine in this 
 defense, application to us from any of our subscribers will secure 
 such association for their protection. 
 
 17. A builds the house within four feet of his dividing line of lot, 
 having side windows looking into his four feet passage. B, who owns 
 the adjoining lot. builds to the extent of his line, putting in windows 
 looking into A's lot or passage. Can A prevent B from placing win- 
 dows where they overlook A's property, or compel him to close them 
 up? 
 
 A. This point has not, so far as we know, been distinctly 
 settled by the New Jersey courts, but it has been decided that 
 ancient lights cannot be obstructed (King v. Miller, 4 Hal., ch. 
 559), and therefore unless A has the right now to inclose the 
 windows in question, they will in time become ancient lights, and 
 
334 
 
 MISCKLLAyEOUS. 
 
 he will be unable to build up to the line of his lot. Our belief 
 is, therefore, as Avas done in a somewliat similar case by Grace 
 Church iu this city, A can build a wall, erect a high fence, or do 
 any other act of that kind to i)revent B's windows from over- 
 looking his lot. Probably if the house is in course of construc- 
 tion he could obtain an injunction to prevent any windows open 
 ing on to his property. 
 
 18. Several of my neighbors owning adjoining houses in a "row 
 have a difference of opinion on the ownership of dividing fences, and 
 the question arises, on whom rests the right to reset a fence in case it 
 gets blown down ? 
 
 A. In this city the ordinances require all division fences to 
 be divided between the respective owners on either side where 
 this can be done conveniently. When it cannot be thus divided, 
 they require that the fence shall be made and kept in repair at 
 the joint and equal expense of the owners of the land on each 
 side. If any one whose duty it is to make or repair a fence 
 shall neglect so to do, for six days aftor being requested in writ- 
 ing by the owner of the adjoining ground, the latter nuiy make 
 or repair the fence, and recover from the former the share he 
 ought to pay. In case of any disagreement about division or 
 other dispute the Aldermen and Common Councilmeji of the 
 district or ward have jurisdiction to determine the rights of tlie 
 respective parties. 
 
 19. A steals from B a sum of money, and uses it to pay off a debt 
 to C. Can B recover the stolen money from C, even though it is un- 
 questionable that B identifies the money in C's possession as the money 
 stolen from him ? 
 
 A. Money and negotiable securities are excepted from tlie 
 ordinary legal rules applying to stolen personal property, and the 
 possession for value and in good faith, gives title. 
 
 20. A, from the country, buys a bill of goods from B, and orders 
 C to send a small parcel to B to be packed and shipped by B, which C 
 does. B's carman gets away with the goods instead of dehvering 
 them at the freight office. Is B liable to pay for the small parcel, or 
 who is ? 
 
 A. As B in this case was a mere bailee without compensa. 
 tion, he was bound only to use reasonable care, and if the cart- 
 
MISCELLAj^EGUS 
 
 335 
 
 man was a person apparently fit to be trusted with the goods, we 
 do not believe B can be held responsible for their loss. As C 
 obeyed A's directions, he cannot be required to replace the stolen 
 merchandise ; and therefore nobody can be looked to, save the 
 delinquent cartman. 
 
 2 1 . Does tlie fence of the yard on the right or left hand side of 
 the house belong to the owner, who mast consequently keep it in 
 order ? Or, is the half of the fence on both sides his property ? 
 
 A The law provides for dividing the line between two ad 
 joining owners so that each shall construct a proper fence on his 
 own part, if they so desire. Where this has not been done, they 
 own the fence in common, and wlicn it needs to be repaired or 
 rebuilt, eacli. can be compelled to bear his share of the burden on 
 the proper legal notice. For the most part, each owner of a 
 city lot has three neighbors, one on each hand and one in the 
 rear, who share these relations with him. 
 
 22. What redress, if any, exists in the following case : Goods are 
 manufactured for a party (transacting business as an incorporated 
 company) who receives them, and when payment is demanded, some 
 days afterward, fault is found with them, and a letter is written to the 
 manufacturers chargmg them with swindling, and threatening ex- 
 posure, e:c This letter purports to be from a company, and to be 
 signed by it. To ascertain the name of the writer, a party goes to the 
 office of the company exhibits the letter to the person in charge, and 
 mquires the name of the writer. Pretending to examine it, this per- 
 son reaches over and snatches the letter, which he puts in his pocket 
 and refuses to return, saying to the mquirer with a chuckle, " now find 
 out who wrote it. " It is believed that the person who seized the letter 
 wrote it, using the company's name ; and it is suspected that his 
 anxiety to obtain possession of it was accelerated by discovering that 
 he had, by making charges and using threats, made himself amen, 
 able to the law. Does the letter belong to the company over whose 
 name it was sent ? or to the actual writar ? or to the party to w^hom it 
 was sent ? And what is the proper course to pursue ? 
 
 A. The letter belongs to the person who received it and to 
 whom it was addressed, and if not destroyed may be obtained 
 by legal process. The young man who took it by force can be 
 punished for that act. 
 
 23. How long can a party keep a removal sign on the premises 
 after he vacates it. Is there no law that gives the light ? 
 
336 
 
 MISCELLANEO US. 
 
 A. Except by the courtesy of the owner or new tenant, if one 
 has come in, tlie outgoing tenant cannot keep a removal sign on 
 tlie premises one hour after he has vacated them. He has no 
 legal right to such an accommodation. 
 
 24. About September 1st I took board and lodging and I stated 
 particularly that I did not want to take board by the season, and there 
 was nothing more said about it at the time. I should like to leave 
 now. but the proprietor holds me responsible if I do so. When I take 
 board by the season in September when does the season expire ? 
 
 A. The season is supposed to last six or eight months, but 
 this game of the boarding house keeper threatening to sue if the 
 boarder leaves during the season is an old bullying dodge. If no 
 engagement was made for any length of time, and no contract 
 was expressed or fairly implied that the board was taken for 
 " the season " the boarder can leave at any time, paying to the 
 end of the week if by the week, or the month, if by the month, 
 and should despise the threats of the " proprietor. 
 
 25. State the law relative to selling lottery tickets, as well as buy- 
 ing the same in the State of New York ? 
 
 A. The sale of lottery tickets is forbidden in this State, (X. 
 Y.,) the seller being punishable by fine and imprisonment. The 
 purchaser may sue for, and recover twice the amount he has 
 paid. The advertisement of lotteries is illegal, and expressly 
 prohibited by statute. 
 
 26. A gentleman left notice that I shall serve on jury, with my 
 servant, who forgot to deUver or mention the same to me. Can the 
 courts hold me responsible and fme me ? 
 
 A. " Citizen " is liable to a fine, the service of the notice hav- 
 ing been in accordance with the legal requirement. When ser- 
 vants are neglectful of their duty, the master is the one to suffer. 
 
 27. Can suit be entered in United States Circuit Court, Baltimore, 
 Md., by a merchant in this city against a party in another State, say 
 Georgia, North Carolina, Texas, or any of the Eastern or Western 
 States, and notice thereof being served by sending a deputy to the 
 party, or mailing the same to him to his regular post-office ? if so, and 
 judgment be obtained, can defendant avail himself of any State laws 
 where he resides ? 
 
 A. A suit could not be brought in the Circuit Court in that 
 
MISCELLANEO US. 
 
 337 
 
 district against a citizen residing in another district, and he be 
 compelled to answer on a notice sent to him by a deputy marshal. 
 
 28. Can a State which has purchased from its own citizens the 
 bonds of a repudiating State, compel payment of them by a suit in the 
 Federal courts ? 
 
 A. The jurisdiction of the Federal courts, in suits between 
 States, has been a subject of keen controversy, but it neverthe- 
 less exists, and the Constitution does not expressly limit it to 
 political questions. On the contrary, the language of that in- 
 strument, article 3, defining the judicial power, declares that it 
 extends, generally, " to controversies between two or more 
 States. " Why may not such a controversy arise on contract ? 
 It has been suggested as an objection that the law has prescribed 
 no execution against a State. Attorney General Randolph, in 
 the celebrated case of Crisholm v. Georgia, 2 Dall. R., 419, an- 
 swered this point by saying that the Supreme Court has power 
 to decree the form and mode of execution. He also argued that 
 the action of assumpsit would lie against a State. The majority 
 of the court coincided with the opinion of the Attorney-General, 
 and ordered that unless the State of Georgia appeared in due 
 form, or showed cause to the contrary, judgment by default be 
 entered. This was a case in which the suit was by a citizen of 
 one State against another State, and the decision created such 
 alarm that a constitutional amendment was adopted, taking away 
 the power of a citizen to sue a State. But the amendment left 
 the clause regarding controversies between States untouched; 
 and the same reasoning by which the court came to the conclu- 
 sion that a State was suable on contract, under the Constitution 
 as it then stood, applies to the question whether^it is suable in 
 the same form of action, by parties who have an undisputed 
 right to claim the process of the court. It is probable that an 
 attempt to enforce the collection of repudiated State bonds in 
 this manner would arouse fierce opposition, and that all the re- 
 sources of learning and argument would be brought to bear to 
 defeat the effort. Under such circumstances it would seem pre- 
 sumptuous to undertake to forecast the result, at least without a 
 profounder study of the question than we have time to give. 
 
 22 
 
B38 
 
 MISCELLANEO US. 
 
 Our impressions are, however, that in a case where the plaintiff 
 State is the legal assignee of a debt owed by another, it might 
 command the process of the Federal court to enforce collection. 
 
 The Federal court has adjudicated in regard to State bounda- 
 ries in a suit between States, and this is as much a material issue 
 as the payment of a debt. 
 
 29. Safe was blown open and robbed six years ago of money, rail- 
 roftd and town bonds, bonds and mortgages, notes, etc. The loss was 
 thoroughly advertised at the time, and printed slips giving the num- 
 bers of the bonds and amount of each bond were put in most of the 
 New York banks and brokers offices, and sent to all the prominent 
 cities in the United States. This same Otis that has been on trial last 
 week for theft in the Canada money matter, has commenced suit 
 in the United States court to collect the past due coupons, payment of 
 ^which has been refused. This Otis claims that he purchased the 
 bonds in London, England, and claims to have a bill of sale. These 
 bonds have no market value outside of this immediate neighborhood. 
 Could any other party become an innocent holder of these bonds 
 -from such a character "as this Otis ? Could we attach these coupons 
 when presented for payment as our property as being stolen ? 
 
 A. If the stolen securities were negotiable, and came into the 
 .hands of the present holder in good faith, for valuable consider- 
 ation, they cannot be reclaimed by the former owner ; but the 
 circumstances of the above case are sufficient, in our judgment, 
 to justify legal proceedings to test the bona fides of the present 
 holder's possession. In such an action, the coupons or other se- 
 vCurities can be attached. 
 
 30. The rooms of Miss W., a dressmaker, were broken into 
 during her absence, and dresses and materials belonging to her cus- 
 tomers were stolen. Is she liable for the value of the goods ? 
 
 A. If Mis^ W. has used due diligence in the care of the 
 property intrusted to her, she is no more liable to the owners 
 for property stolen than for property destroyed by fire, or in- 
 jured by an earthquake. All establishments whose owners are 
 able, do make good these losses, as far as we know, for the sake 
 of their own interest, but if they have been guilty of no negli- 
 gence they are not legally obliged to do it. 
 
 31. State if 12 per cent, tare is or is not the usual tare on raw 
 sugars ? 
 
MIS CELLANEO US. 
 
 339 
 
 A. The tare on hogsheads of sugar here was formerly 12 per 
 cent., and is still so reckoned, we believe in some Cuban ports. 
 By regulation of the Secretary of the Treasury, under date of 
 May 22, 1879, the following rates were established at this port, 
 and this is now the custom of the trade : 
 
 Sugar in tierces and hogsheads actual tare. 
 
 Sugar in boxes 14 per cent. 
 
 Sugar in barrels 10 per cent. 
 
 Sugar in mats and Pernam. bags 2 per cent. 
 
 Sugar in other bags li per cent. 
 
 Melado 9 per cent. 
 
 Irregular packages actual tare. 
 
 32. S buys several acres of land in a valley of the Adirondacks, 
 and enters into a contra<it with C for the building of a summer cot- 
 tage. In procuring stone for the foundation of the cottage one of C's 
 workmen discovers beneath the earth a piece of ancient Indian pottery 
 . — a well-preserved jar. The workman breaks the jar in pieces and 
 distributes it among his co-laborers. One of the old inhabitants of 
 the valley, hearing of this and becoming much interested in the dis- 
 covery, succeeds in collecting from the laborers the various scraps, 
 puts them together with cement, and in a fashion restores the jar to its 
 original shape. Upon ascertaining what had taken place, S " inter- 
 views " the old inhabitant and lays claim to the relic on the ground 
 that it was found upon his (S's) land. The old inhabitant disputes the 
 claim, asserting that when S bought the land he bought only what 
 " nature " had placed upon it and in it. This state of facts suggests 
 the inquiry : 
 
 Is the Indian jar in question " treasure-trove," and, if so, does it, 
 under the laws of New York, belong to the finder, to the owner of 
 the land, or to the State ? 
 
 If is not ''treasure-trove," what sort of property is it, and to whom 
 does it rightfully belong ? 
 
 A. All mines of gold and silver discovered within this State 
 are declared by law to be the property of the people, and the 
 same is the case as to all mines of other metals on lands owned 
 by aliens, as well as mines of other metals, of a certain grade 
 in value, discovered upon the lands of citizens. And " all mines, 
 and all miner ah and fossils discovered, or hereafter to be dis- 
 covered, upon any lands belonging to the people of this State, are 
 and shall be the property of the people." (Xew York Revised 
 Statutes, part 1, title xi. chap, ix.) We know of no reservation 
 to the people of the right of property in fossils or ancient re- 
 mains found on the lands of private Uwners, and do not believe 
 
340 
 
 MISCELLAXEOUS. 
 
 tliat any such exists. The jar in question, therefore, clearly be- 
 longs to the owner of the land. It may be classed as abandoned 
 l>ersonal property, which is not, however, the property of the 
 first finder, when embedded in the soil of another man's land. 
 
 33. Is there any law compelling banks to stamp the word " coun- 
 terfeit over all counterfeit bills presented to them by depositors ? 
 
 A. We find that the provision which requires all United 
 States officers charged with the receipt or disbursement of public 
 money to stamp counterfeit bills offered them, was in 1876 ex- 
 tended to all officers of national banks. The law declares that 
 they " shall stamp or write in plain letters tlie word ' counterfeit,' 
 ' altered,' or ' worthless,' upon all fraudulent notes issued in the 
 form of and intended to circulate as money, which shall be pre- 
 sented at their places of business ; and if such officers shall 
 wrongly stamp any genuine note of the United States, or of the 
 national banks, they shall, upon presentation, redeem such notes 
 at the face value thereof." 
 
 34. I had a piece of land laid out in lots, and a map made of the 
 same, from which I sold two of the lots to a party who now claims 
 that the sale was illegal in consequence of the street fronting the lots 
 not being graded, and the fence taken down. The question is, what 
 constitutes a highway ? 
 
 A. To constitute a highway in such a case there must be not 
 only a dedication by the owner, irrevocable on his part, but an 
 acceptance of the road as and for a highways by the proper town 
 or city authorities. If the road is still fenced against the public, 
 that fact, in the absence of more positive evidence of a dedica- 
 tion, would go to show that it had not been dedicated irrevocably ; 
 and if in addition the road has been neither formally accepted 
 by the municipal authority, nor worked by such authority as a 
 highway, we doubt if it would answer the legal requirement 
 And the misdescription of the lots sold, under such circumstan- 
 ces, we have little doubt would entitle the buyer to rescind his 
 bargain. 
 
 35. I telegraph to m'y broker on 16th June, ''Buy 40 Eureka 
 Cons, at nineteen." His bill dated 18th June comes to me as follows: 
 "40 Eureka Cons. 19, $7G0 ; commission i, $5 ; $765." On such a 
 transaction am I not clearly entitled to the dividend of 50 cents, pay- 
 able 19th June on above 40 shares ? 
 
MISCELLANEOUS. 
 
 Ml 
 
 A. If the transfer books were open when the stock was 
 bought, the stock should have been transferred to the purchaser, 
 and no one but he could draw the dividend. If the books were 
 closed preparatory to the dividend, the stock could not be trans- 
 ferred, and the dividend would be payable to the one who owned 
 the stock at the date of closing. The buyer could not claim it 
 except under a special agreement. 
 
 36. In January a dividend of 10 per cent, on the stock of a com- 
 pany was declared, payable 5 per cent, on February first, and 5 per 
 cent, on April first. After the payment of the first dividend a stock- 
 holder sells his stock before the second dividend is due. Is the seller 
 or the buyer entitled to the second dividend? 
 
 A. The legal title of a dividend is in the person who owns 
 the stock and hold it in his name when the same is declared. In 
 sales and delivery of stock between the date of declaration and 
 payment, it is very common that some arrangement is made by 
 which the dividend shall accrue to the purchaser, but if this is 
 not done it can be collected by the one in whose name it stands 
 when the books are closed, and the buyer has no legal claim to 
 it. 
 
 37. I had subscribed to a book to be delivered monthly. The first 
 book was delivered July 1, and I have seen none since until to-day, 
 when I refused to take it. Is the contract signed by me binding on 
 me or not, to take the remaining 60 numbers ? 
 
 A. The delivery having been interrupted, we think the sub- 
 scriber is not legally bound to continue his receipts and pay- 
 ments. 
 
 38. We wish to sue a party in Massachusetts for a bill of goods. 
 Can we have the case brought to trial in New York city, and if so, 
 what court ? 
 
 xV. Our courts will not render judgment against a non-resi- 
 dent of the State, unless he has property within the State. In 
 that case the action may be commenced in the Supreme or any 
 of the Superior courts. 
 
 39. Pa. — I am the owner of two pews in a church ; the church 
 trustees have taken all the interior of the church out, and remodeled 
 entirely the inside ; I demand certificate for my pews ; they say they 
 don't sell any pews. The trustees took the responsibihty of removing 
 
342 
 
 MISCELLANEOUS. 
 
 my pews without my consent. Are they not bound to give me a cer- 
 tificate for my pews in the church as well located as those I held before 
 the alteration, or pay me for them ? 
 
 A. The property of a holder in his })ew is generally usufruct- 
 uary only, or a mere easement. The trustees may destroy the 
 pew altogether, as in the above case, and then are not bound, so 
 far as any actual decision goes, to give the owner another in its 
 place ; but in Massachusetts it has been decided, and in Penn- 
 sylvania intimated, that the pewholder must be indemnified for 
 his loss. (Curry v. the Trustees, etc., 2 Pittsbury Rep., 40). 
 
 40. S. C. — Smith sells Jones a farm for $30,000 on bond and mort- 
 gage, payable in ten annual installments. At the end of ten years Jones 
 has barely paid interest. Smith then borrows fi'om Davis $10,000, 
 and gives his bond with two securities, Jones being one of them. 
 
 Five years afterward Smith becomes involved and judgments are 
 obtained against him. He begins a suit to foreclose Jones's mortgage, 
 and about the same time Davis sues him and Jones his surety. Both 
 suits abate by the death of Smith, and Smith's executor revives the 
 suit of foreclosure. But Davis does not sue, as Smith's estate is in- 
 solvent and judgment creditors will absorb the proceeds of the land 
 if Smith's executor succeeded in his foreclosure and Jones was noto- 
 riously insolvent. 
 
 The suit continues five years, Jones having pleaded default in title 
 and payment, when Jones amends his answer and says his son has 
 bought Davis's bond and refuses to say what he gave for it, and he that 
 day had given his son his note for $10,000 for the bond and claims 
 the Davis bond and interest as a set olf, which with other payments 
 cancels the bond to Smith. 
 
 Please observe that Jones comes in possession of the Davis bond five 
 years after death of Smith and after suit brought. Also, that execu- 
 tors by law are required to pay judgments before other debts. 
 
 Is this a case of mutual credits between Smith and Jones ? 
 
 If so, can Jones set it up to the detriment of judgment creditors ? 
 
 If Jones is entitled to the set off, what ought the amount of set off be ? 
 The bona fide sum his son paid for it ? The $10,000 expressed in the 
 note he gave his son, or the whole amount of the Davis bond and 
 interest ? 
 
 A. Under tlie Revised Statutes of South Carolina, a counter 
 claim or set off must either arise out of the contract or transac- 
 tion Avhich is the foundation of the plaintiff's action, or in an 
 action arising on contract may be any other cause of action also 
 arising on contract, existing at the commencement of tlie action. 
 (Revised Statutes of South Carolina, section 172.) In the case 
 
MORTGAGES. 
 
 348 
 
 above stated the set off answers neither of these descriptions, 
 and "vve think will not be allowed, to any amount whatever. 
 
 MORTGAGES 
 
 CHATTEL. 
 
 1 . Can a chattel mortgage cover a constantly changing stock of 
 merchandise ? or, in other words, if we ship a bill of goods to a mer- 
 chant who has a chattel mortgage on his stock, are they mortgaged 
 when they reach his store ? ■ 
 
 A. The lien of a chattel mortgage purporting to embrace 
 both the stock of goods the mortgagor then had in his store, and 
 those he might thereafter acquire and bring into it, extends only 
 to the stock in the store when the lien was created, and to such 
 as may have been purchased and paid for from the proceeds of 
 the same. It is not a lien as against other creditors for goods 
 not thus included. 
 
 2. If a chattel mortgage is not renewed or recorded at the expira- 
 tion of one year from its date, how are the parties to it and the prop- 
 erty affected ? Suppose the mortgagor sells the property after the year 
 has expired and before renewal, how is the mortgagee affected ? How 
 must such mortgage be foreclosed, and when ? 
 
 A. The mortgage need not be foreclosed, but within 30 days 
 next preceding the expiration of the said term of one year, the 
 holder must file a copy with a statement of his interest in the 
 mortgaged property, or it is not a security against the creditors 
 of the mortgagor, or against subsequent purchasers or mort- 
 gagees in good faith. 
 
 3. "Win you advise me as to the proper method of canceling a 
 chattel mortgage, the obligation having been paid ? 
 
 A. If the mortgage was recorded, a satisfaction piece ac- 
 knowledging payment may be executed and recorded. But a 
 surrender of the mortgage with a receipt in full upon it, would 
 doubtless be sufficient. 
 
 4. A borrows $200 of B, giving chattel mortgage therefor, duly 
 recorded. B is a notary and takes A's acknowledgment to the chat- 
 tel mortgage which is in favor of B's wife. Since the mortgage was 
 given A has sold some of the articles mortgaged, but has paid nothing 
 to B on account of his $200. As the 11 months are nearly expired 
 
344 
 
 MORTGAGES. 
 
 will B be safe in merely filing a certificate by his wife, that the $200 
 is still due and unpaid ? Does B's acknowledging the execution affect 
 the validity of the lien on the chattels pledged ; and if so, would it be 
 preferable for B to require A to execute a new mortgage, to file in lieu 
 of the one now recorded, and could A pledge chattels conveyed in the 
 first instance, some of which he has since sold and received part pay- 
 ment for them, and retained the proceeds ? 
 
 A. If A has sold some of the property covered by the mort- 
 gage, with intent to defraud the mortgagee, lie has rendered him- 
 self liable to fine and imprisonment, and had better scratch 
 around and pay that debt as soon as may be ! If the existing 
 mortgage were invalid, however, for want of being properly ex- 
 ecuted, a new one could not be made to cover the chattels sold 
 and passed out of A's possession. But B could as well take A's 
 acknowledgment as that of any body else, and unless the mort- 
 gagee chooses to take possession, he has simply to refile a copy 
 of the mortgage, with a statement of his interest in the property 
 claimed, 30 days before the year expires. 
 
 5, Was there ever any law of this State, (N. Y.,) or any decision 
 rendered by the Court of Appeals, making it unnecessary to refile a 
 chattel mortgage, under the following circumstances : A bought out 
 B on the first day of January, 1870, giving ten notes of $1,500 each 
 in payment ; one note coming due at the end of the year, the second 
 in two years, and so on, the last being due January 1, 1880. To se- 
 cure payment of the notes a chattel mortgage was given on the goods 
 bought, which mortgage was duly filed, and in 1871 was refiled. In 
 1871, the person whose duty it was to attend to the matter, was advised 
 by counsel that it was unnecessary to refile it as a law had been recently 
 passed, or a decision made by the Court of Appeals to that effect. 
 
 A. We know of no such law or Court of Appeals decision. 
 There was a New York Superior Court decision in 1872 (Porter 
 V. Parmly, 43 How. Pr. Rep., 455), which held that after default 
 and change of possession it was unnecessary to refile the mort- 
 gage. But the change of possession was constructive merely, 
 and the Court of Appeals, holding that the mortgage had not in 
 reality acquired possession of the chattels, reversed the judgment 
 of the Superior Court. It is quite possible that this revised de- 
 cision, which stood until 1873, is the one referred to, though it 
 does not fully answer the description. 
 
 6. Please inform me whether a chattel mortgage to secure payment 
 of a note on demand holds good ? It is on stock of a harness maker, 
 
MORTGAGES. 
 
 345 
 
 and covers so many sets of single and double harness, blankets, whips, 
 horse boots, etc., and the privilege is given the party (verbally) to sell 
 any of the above and hand the proceeds to the mortgagee or to replace 
 the same articles should he sell any. 
 
 A. The fact that the note is on demand would make no dif- 
 ference with the security if it were properly drawn and recorded. 
 But a chattel mortgage on property left in the hands of the 
 mortgagor, which he has the right to sell or change at pleasure, 
 is not a safe reliance, as it would not hold against a third party 
 who had lawfully acquired any of the mortgaged assets. 
 
 7. A merchant gives a chattel mortgage on his stock of goods to 
 secure the payment of certain promissory notes not yet due. It con- 
 tains a provision that if an execution, warrant of attachment, or other 
 legal processes be issued before the maturity of said notes against the 
 mortgagor, it shall be lawful for the mortgagee to foreclose at once. 
 The schedule of such mortgage does not specify the quantities of the 
 articles mortgaged, but simply says "teas, coffees, sugars, spices," etc., 
 etc. Is such mortgage valid against a judgment creditor ? 
 
 A. The clause of the mortgage permitting foreclosure before 
 the due date would not of itself invalidate it if it were good in 
 other respects. But the mortgagee of a stock of goods, which the 
 mortgagor retains possession of and sells, applying the money to 
 his own use, and not as agent of the mortgagee, applying the 
 proceeds on the debt, is invalid against creditors. (Edgell v. 
 Hart, New York, 213 ; Conkling v. Shelley, 28 New York, 360 ; 
 Eussel V. Winne, 37 New York, 591.) 
 
 8. Mass. — Is it necessary to record a chattel mortgage on furniture 
 in the State of Massachusetts, and must it be renewed every year as 
 in the State of New York ? 
 
 A. Chattel mortgages in Massachusetts must be recorded in 
 the city or town where the mortgagor resides when the mortgage 
 is made, also in the city or town where he then transacts his 
 business, or follows his trade or calling. If the mortgagor re- 
 sides without the State the mortgage must be recorded in the 
 city or town where the property is. Annual renewal is not re- 
 quired. 
 
 REAL AND MISCELLANEOUS. 
 
 9. I bought a mortgage of B, interest payable semi-annually. I 
 also executed an agreement concurrent therewith, but not forming a 
 
346 
 
 MORTGAGES. 
 
 part of the assignment, whereby I obHgated myself to sell the mort- 
 gage back (resign it) to B within one year at a price, if he should elect 
 to tender the said price. It was the contemplation of both parties 
 that the interest on the mortgage w^ould be paid. Default has been 
 made m the interest, and I am obliged to foreclose in order to estab- 
 lish my rights and secure an income. Does, or does not such fore- 
 closure, so made a necessity devolving on me, extinguish B's right 
 speaking of it as equity, under the agreement above mentioned to 
 come in before the end of the year, and demand a reassignment of the 
 mortgage, provided I give him proper notice of the circumstances, and 
 of the steps which I am obliged to take ? 
 
 A. Foreclosure of the mortgage by " Justitia " w^ould imt it 
 beyond his power to fulfill his agreement for a reconveyance, 
 and if B, therefore, offers the agreed price, with the defaulted 
 interest, we think he is equitably entitled to the security, though 
 the year has not expired. 
 
 1 0. Supposing I lend a friend fifteen hundred dollars on bond and 
 mortgage for five years, and I give it to him on September 12, 1873, 
 when does it become due ? My reason for asking is this : he went to 
 a Commissioner of Deeds and had the papers made out himself and 
 they made it due October 19, 1878. I think it should be due on the 
 12th of September. 
 
 A. The date of the bond governs the maturity. A man may 
 lend money on the 12th of September, but if he accepts for it a 
 bond dated more than a month later promising payment in five 
 years, the money is not due until five years from the date of the 
 bond. 
 
 1 1 . Can the holder of a mortgage on which compound interest has 
 been paid foreclose if mortgagor sets up a defense of usury ? 
 
 A. The payment of compound interest cannot be legally en- 
 forced, but it is not usury to receive it, if the debtor is willing 
 to pay it, and such a transaction does not vitiate the obligation. 
 
 12. A B mortgages certain property to bank to secure loan of 
 $4,000 ; also deposits w^th bank a policy on same premises for $4,000, 
 loss if any payable to mortgagee. 
 
 The insurance company agree with bank that no act of A B shall in. 
 validate pohcy in bank's hands, and that in event of loss, they will 
 pay bank, although denying liabihty on poUcy to A B ; bank agrees 
 that on such payment, the insurance company shall be subrogated to 
 all bank's rights as mortgagee, under all the securities held as collateral 
 to the mortgage debt, to the extent of such payment, or at its option, 
 
MORTGAGES. 
 
 347 
 
 may pay bank the principal and interest due on bond and mortgage 
 and siiall thereupon receive a full assignment of the bond and mort- 
 gage and all other securities held as collateral to the mortgagee debt 
 
 A total loss occurs ; the insurance company claims that the act of 
 the assured has invalidated the policy and tender to bank the full 
 amount due on bond and mortgage, viz. : $4,000 and interest, and de- 
 mands assignment of bond and mortgage and also a policy to a trustee 
 to be held until the rights of all parties shall be determined, the latter, 
 as included in and constituting one of the " other securities held as 
 collateral to the mortgage debt." 
 
 Bank offers assignment of bond and mortgage, but refuses to deliver 
 policy on the ground that it, the policy, belongs to A B, the mort- 
 gagor. 
 
 Under the above facts, is or is not the insurance company entitled 
 to have the policy assigned with the mortgage ? 
 
 A. If the policy is invalid as to the mortgagor, the insuranoe 
 com})any appears to us to stand in the exact position of a pui> 
 chaser of the mortgage, the money paid on the policy represent- 
 ing the purchase money. In this view of the case, it does not 
 need any assignment of the policy, as it in that case would repre- 
 sent no right of action, and would be simply waste paper. 
 On the other hand, if the policy was good in favor of the mort- 
 gagor, at the date of the loss, no assignment by the bank could 
 take away his right to have the insurance money applied in 
 satisfaction of the mortgage ; and being terms payable to the 
 mortgagee he could make no other use of it. So that such an 
 assignment could amount to nothing in either event, and the 
 mere possession of the policy is a matter of not much greater 
 consequence. The insurance company, however, in our opinion, 
 has the prima facie right to it. The insurance company, having 
 the mortgage assigned, will of course undertake to enforce its 
 supposed rights by foreclosure, and in that action the rights of 
 aU parties can be determined. 
 
 13. I hold bond and mortgage, the principal of which fell due on 
 May 1, 1879. There was a verbal understanding that it should remain 
 unpaid for a year or two, provided the semi-annual interest be promptly 
 paid. The rate written on the bond is 7 per cent, per annum. Do I 
 jeopardize the principal by collecting interest at that rate ? 
 
 A. If the verbal understanding was such an agreement that 
 the mortgagor could not be compelled to pay it on demand, the 7 
 per cent, rate may be exacted to the close of the promised for- 
 
348 
 
 MonraA ges. 
 
 bcarancc. But if the mortgage is subject to forclosurc at any 
 time, at the will of the mortgagee, only 6 per cent, can be ex- 
 acted. If the debtor should voluntarily tender the 7 per cent, it 
 would not be usury to accept it. 
 
 14. A bought a piece of property from B, paying no money but 
 giving bond and mortgage on said piece of property, for the full 
 amount of purchase money, or, as A told me, he gave a mortgage on 
 this piece of land for amount of purchase money, and a bond to secure 
 payment of mortgage, covering all of his real and personal property. 
 This occurred about four years ago. About two years ago I purchased 
 from A, a piece of land — not a portion of the land which was mort- 
 gaged, but of his other property — on his representation that it was 
 free from all incumbrances. I having a Tinowledge of the existence of 
 this deed, spoke about it, and he told me it liad no effect on the property 
 I bought, as no steps had been taken toward a foreclosure of the mort- 
 gage, upon which he had paid nothing since it was given, not even in- 
 terest, nor had any suit been commenced upon bond, and that he 
 would guarantee me against any loss or trouble. He gave me a deed 
 for my property, I paying him in full for the same, and at once had 
 my deed recorded. B told me that his lawyer informed him that if on 
 levying on A's property under bond, there was not sufficient to pay 
 his claim in full, he could go back of my deed and take my land to 
 apply on his claim. 
 
 What I want to know then is, whether this statement of B's is cor- 
 rect, and my title to the land is contingent upon the payment of this 
 mortgage ? Must I lose all that I have paid to A, that is, the full 
 value of the land, if this is so ? Because B having deprived him of 
 everything, he (A) has nothing to pay my debt with. 
 
 A. The question here is purely one of fact, to be ascer- 
 tained by examination of the record of mortgages in the 
 county where the lands are situated. If the so-called bond, said 
 to cover all of A's real and personal property, was in fact a 
 mortgage on the land afterward bought by our correspondent it 
 Avill so appear on the record, and cannot be escaped. But if the 
 paper is correctly described as a bond, it is not likely to be so 
 made as to constitute a lien on real estate. Tlie only way to 
 ascertain is to have what should have been had in the first place, 
 a search of title. If it proves true that the land is covered by 
 the lien, and A is bankrupt, we do not see but our correspondent 
 must lose all. 
 
 15, Some 30 years ago A sold a Hfe interest to B for $100 per 
 year, B giving a mortgage on valuable property as security for pay- 
 
MORTGAGES. 
 
 349 
 
 ment of same. B or Ms heirs never paid the yearly interest, nor was 
 it ever demanded. What claim will A's heirs have on the property ? 
 The mortgage never was foreclosed ; is it outlawed ? Should an 
 amount be inserted in the mortgage as penalty for non-fulfillment of 
 contract, and no steps ever taken to secure either interest or penalty, 
 would that also be outlawed ? 
 
 A. If there has been payment of neither interest nor princi- 
 pal, nor otlier acknowledgment of a subsisting obligation by B, 
 within 20 years, the mortgage is outlawed, and the clause pro- 
 viding a penalty is no more collectible than the rest of it. 
 
 1 6. Can the holder of a second mortgage avail himself of the de- 
 fense of usury in an action brought to foreclose the first mortgage, on 
 which the borrower had paid a bonus ? 
 
 A. A mortgage founded on usurious consideration is utterly 
 void against all the other parties having liens on the property. 
 5 Den., 236 ; N. Y. Court of Appeals, Thompson v. Van Vech- 
 ten, 27 N. Y., 568, and many others. 
 
 17. 1. When a mortgage is given for a certain lot of land, are 
 the buildings situated thereon liable whether mentioned or not in the 
 mortgage ? 
 
 2. Are buildings erected on lands after a mortgage has been given 
 for the land liable for the mortgage ? 
 
 3. When a mortgage is taken on a lot on which buildings are stand- 
 ing, is it a matter of bargain as to the insurance on the buildings, or 
 is it incumbent upon the party issuing the mortgage to insure ? Some 
 of the printed forms of mortgages have the insurance clause in, while 
 others have not. Is there any law on the subject where the land 
 without the buildings is not sufficient to cover the mortgage ? 
 
 A. The word "land, " as used in legal instruments, generally 
 covers everything on the land, and a mortgage would, therefore, 
 attach upon all buildings, erected either before or after the date 
 of the mortgage, unless they should be of the class wdiich the 
 law^ permits, for trade purposes, to be considered as separate 
 from the freehold, and removable by the tenant. For example, 
 a mill built upon leased and mortgaged premises by the lessee, 
 and owned by him, Tvould not come under a mortgage given by 
 the lessor. What constitutes such a trade fixture, however, is 
 often a nice question, solvable only by a court. 
 
 The insurance of mortgaged property is a matter of bargain * 
 between the parties. Either party may issue, but the mortgagee 
 
350 
 
 MORTGAGES. 
 
 cannot cliarge the premium to the mortgagor, unless by agree- 
 ment. 
 
 1 8. Four years since I loaned the trustees of a church in this place 
 a sum of money to pay their indebtedness, taking a bond and mort- 
 gage upon their church lot, the church having previously burned down. 
 Said note or bond was signed by all the trustees of the church. But 
 since, it transpires that the trustees have no assets belonging to the 
 church. Neither do they intend to rebuild upon said lots. 
 
 No part of the principal or interest has been paid. Are the trustees 
 individually responsible for the payment of the balance of the mort- 
 gage, provided the church lot does not bring enough to satisfy the 
 debt? 
 
 A. If the mortgage was duly authorized and properly ex- 
 ecuted by the trustees as such, and the bond was signed by them 
 in their corporate capacity, they are not personally liable. But 
 if the note is signed by the trustees as individuals, they are per- 
 sonally liable, although the mortgage is executed in the name of 
 the church. 
 
 19. A holds mortgage on B's place for full value of property, 
 and there are judgments recorded against B. If A buys the place of 
 B at private sale for amount of mortgage and interest, is he holden 
 for the judgment ? 
 
 A. A would not be personally liable to pay the judgments, 
 under the circumstances stated, but the equity of redemption 
 in the mortgaged premises would remain subject to the judgment 
 lien, and A would not be able to give an unclouded title without 
 foreclosure. 
 
 20. I sell some land in New Jersey ; they agree to erect a build- 
 ing, and I agree to make a loan when 1 give a deed, to take a mort- 
 gage for land and loan for five years. Could parties put a lien on the 
 building that would take precedence of said mortgage ? What I par- 
 ticularly want to know is whether my mortgage would come in ahead 
 of any lien ? 
 
 A. No, the builder's lien would have to be satisfied before the 
 mortgage as far as the building was concerned. 
 
 21. A holds a mortgage against B's property, and when the inter- 
 est becomes due, B fails to pay the same. Can A upon not receiving 
 his interest ask the court to appoint a receiver at once to collect rents 
 from B's property, or must A wait till foreclosure proceedings are 
 instituted ? How long does it take for foreclosure proceedings ? 
 
MORTGAGES, 
 
 S51 
 
 A. If the mortgage does not contain a clause making it due 
 and payable on default in payment of interest, as we infer it does 
 not, from the omission to mention the fact, the creditor cannot 
 foreclose, and his remedy is a suit for the defaulted interest, and 
 then if execution is returned unsatisfied, the appointment of a 
 receiver may be obtained. 
 
 The shortest time in which a sale can be made in foreclosure 
 proceedings, is about 50 days, but various contingencies may 
 lengthen it so as to make the estimate of no value. 
 
 22. A bids off a farm at auction for $1,200. B agrees to loan 
 him $700 and take a mortgage on the farm. A gets disappointed and 
 can only raise $300 to pay on it. B says he won't take a mortgage on 
 it for more that $700, but he will take the deed for the place in his 
 own name, and will sell it to A for $1,300 (i. e., a bonus of $100). 
 A papng B $300, and B gives A a contract for $900 payable m pay- 
 ments of $100 yearly and interest. A pays the interest for two years, 
 gets indebted to C/, assigns the contract to C by request of C. B gives 
 a deed to A, and A gives C a mortgage on the premises for $1,200. 
 About six months later B buys the mortgage of C paying him in full 
 for same. Is or was there any usury in the transaction ? Or, can a 
 judgment creditor, or second mortgagee set up a legal claim of usury 
 as against the holder of the first mortgage ? 
 
 A. We cannot perceive any taint of usury in the mortgage 
 by A to C, and as that is the only point now open to attack, we do 
 not think a judgment creditor of A, or a second mortgagee, 
 could set up the plea. 
 
 MORTGAGEE. 
 
 23. A gives B a mortgage on real estate for $5,000, to run five 
 years. In course of time B dies, and one of his heirs, C, becomes pos- 
 sessed of this mortgage. At the end of five years inquiry is made of 
 C if it is necessary to take up the mortgage, who replies in the nega- 
 tive. The mortgage then runs along for a term of years and interest 
 has always been paid promptly. Can C call in the money due on this 
 mortgage suddenly, and in case of failure to pay. foreclose and sell 
 out property ? Must he not give reasonable timely notice ? Can Guch 
 a mortgage be foreclosed when interest in regularly paid ? 
 
 A. There is nothing to prevent the immediate foreclosure of 
 the mortgage. The holder has only to demand the money, and 
 to commence proceedings if it is not paid. These proceedings 
 are not as summary as an ejectment for non-payment of rent, 
 and the owner of the property, if it is a good security for the 
 
352 
 
 MORTGAGES. 
 
 amount, can usually replace the loan Ijcfore any serious costs 
 liavc been made, even if no extra time is given by the leniency 
 of the mortgagee. 
 
 24. AVe took a deed for a piece of property in this State on which 
 was a small mortgage, which had been paid but not canceled, the 
 mortgagee refusing to give a satisfaction piece without being paid some 
 $10 or S20. This was about eight years since. We have this mort- 
 gage, but the mortgagee holds the former owner's bond. He has not 
 demanded principal nor interest in all this time. Is he debarred by 
 statute in this State from proceeding against the property ? The 
 mortgagee moved out of the State five years ago. 
 
 A. The mortgagee can be compelled to execute a satisfaction 
 piece to clear the title to the land. He could " proceed against 
 the property," but the facts being proved could recover nothing, 
 and must pay the costs. 
 
 25. I purchased a house and lot in this city subject to a mortgage, 
 and I am now requested to pay the same, the mortgage being due. 
 Now since I came into possession of the property I learned from the 
 former owner that the mortgagee received several hundred dollars 
 bonus. 
 
 Can I refuse payment of said mortgage on the plea of usury, or have 
 I a right when settling said mortgage to deduct the amount paid as 
 bonus with interest from date of the mortgage ? 
 
 A. A mortgage for money lent is an honest debt, even if the 
 mortgagee did receive a bonus for lending the money. No 
 one but a rogue will plead usury to evade payment, and our cor- 
 respondent as an honest man cannot do it, even though the law 
 permit it. If a man would not pay an honest debt unless the 
 law compelled him to do it, he would steal if there was no law 
 to punish it. Our friend we are sure will not place himself 
 in such a list. We know of no case in this State where a man 
 has pleaded the usury law to evade payment of a mortgage, ex- 
 cept with the view of defrauding his creditor of his just dues. 
 
 26. Certain premises are mort2;aged. On them is a mill, insured, 
 and policy held by mortgagor. The mill burns and the vacant premises 
 are not worth the mortgage debt. Has the mortgagee a lien on the 
 insurance money, and if so by what means can he enforce it ? 
 
 A. The mortgagee has no lien on the insurance money in 
 such a case. He should have had an assignment of the policy 
 at the time of taking the mortgage. 
 
MORTGAGES. 
 
 353 
 
 27. A borrows from B $7,500 on mortgage and receipts for the 
 money m two installments, $2,000 and $5,500. Prior to paying over 
 the last amount, B learns that there are judgments and levies against 
 A of which he was ignorant, A having assured him that everything 
 was as straight as a string. This necessitated a visit by B to the town 
 where A resided (as his place of business was some 400 miles distant), 
 where he paid off the judgments and liens and took the mortgage for 
 $7,500. Before the maturity of the mortgage B dies, but leaves this 
 mortgage with other property in the hands of trustees a life interest 
 to one of his children, and at his death to his (B's) grandchildren. 
 After B's death, of which A had notice, he continues to pay interest and 
 made an offer to pay half of the mortgage before its maturity, to save 
 interest, which the trustees decUned. The mortgage has now matured, 
 but A claims that if the property is sold it will not bring half of its 
 value, and that if the trustees force the matter he will plead usury, 
 claiming that he paid B a sum of money which was B's expenses. The 
 trustees find an entry of the transaction on B's books, as follows : 
 
 May 15— To cash advanced A $2,000 
 
 June 4 — To cash advanced A 5,200 
 
 To expenses incurred by visiting the town of 300 
 
 A's letters show that there was misrepresentation, and that it was 
 absolutely necessary for B to revisit A's place of residence to pay off 
 claims before letting A have the balance. The trustees have a thor- 
 oughly responsible party whom B informed that he regretted letting 
 A have the $2,000, and to save the sum he had to go in $5,500 deeper. 
 Now has not A barred his right to raise the plea of usury against the 
 present holders of the mortgage ? Had B the right to charge a 
 round sum for his expenses to and from A's place of residence ? The 
 transaction was made in New York. Please give authorities. 
 
 A. The expenses of a creditor's journey to meet the debtor 
 for the purpose of making settlement were included in a new 
 security for the debt, and were held in the case of Harger v. 
 McCullough, 2 Denio, 119, not to render the security usurious. 
 So, where the creditor's expenses in traveling to examine prop- 
 erty at a distance were included, the same conclusion was reached 
 in Lynde v. Staats, 1 N. Y. Leg. Obs., 89. The same was said 
 as to expenses of searching title, in Eldridge v. Ree, 2 Sweeny, 
 155. Other similar expenses were allowed in Eaton v. Alger, 2 
 Keyes, 41, and Thurston v. Cornell, 38 N. Y., 281. The question 
 of intent is, however, an element in the case, and the sum al- 
 lowed for expenses may be so large as to raise the presumption 
 that it is intended to cover a usurious transaction, and it would 
 then be a question for the jury, whether or no such was the in- 
 tention in fact. On this point the circumstances stated do not 
 23 
 
354 
 
 MOR TGA GES. 
 
 enable us to express an opinion, except that the amount looks 
 rather large for a bona fide allowance for expenses. There is 
 nothing in the case to hinder B from setting up the plea of usury, 
 if he chooses to do so, and it is a question for the jury to decide. 
 
 28. A holds a mortgage on B's property. There are two ways of 
 foreclosing mortgages, one by order of the supreme court and the 
 other by advertising in accordance with the mortgage. A uses the 
 latter means and includes interest several weeks subsequent to date of 
 first publication of notice. Can such foreclosure afterward be set 
 aside, and how does it affect improvements erected in the meantime ? 
 
 A. Unless it appears that the claim of more than was 
 actually due was made for the purpose, or did in fact injuriously 
 affect the mortgagor or subsequent incumbrancers, but on the 
 contrary was due to an honest mistake, the validity of the sale 
 will not be affected. (Thomas on Mortgages, 408, 404.) In 
 .case the sale is set aside the purchaser still retains his substan- 
 tial interest in the property, but stands in the changed relation 
 of assignee of the mortgage, which he can therefore proceed to 
 foreclose anew. It would seem to follow that he would lose 
 •the benefit of any improvements made, but in our opinion a 
 court of equity would not set aside the sale without protecting 
 the interests of the purchaser in such a case. 
 
 MORTGAGOR. 
 
 29. Suppose a person is appointed executor to a will ; the property 
 by the will is a house and some furniture, which house was mortgaged 
 and foreclosure proceeding instituted before the death of testator. In 
 this condition the executor finds the property the debt under the mort- 
 gage probably more than the property will bring. Could the cost of pro- 
 testing the will probably be charged to the estate and with the funeral 
 expenses, have to be paid prior to the mortgage lien. 
 
 A. Such language as the following is continually to be met 
 wdth in decided cases; "Funeral expenses are to be paid in pre- 
 ference to any other debt, out of the assets of the deceased, not 
 excepting debts due by record, even to the sovereign." (Parker 
 V. Lewis, 2 Devereux's Rep. (N. C), 21.) The question is set- 
 tled in South Carolina by statute, and the expenses specified are 
 payable before debts due the Government or mortgagees (White 
 vs.' Stephens, R. M. Charlton R., 56). By the New York statute 
 
MORTGAGES, 
 
 355 
 
 also, funeral expenses are to be paid before the general distribu- 
 tion of the assets to creditors, and in Rappelyea v. Russel, 1 
 Daly, it was said that this expense " is a charge upon the estate of 
 the deceased which takes priority over every other." Notwith- 
 standing these dicta^ however, the actual question above stated does 
 not appear to have Ijeen decided, and there remains a shadow of 
 doubt in our mind whether it is likely to be decided, without 
 special statutory authority, in such a manner as to cast these 
 expenses, incurred after forfeiture, as in the above case, upon a 
 mortgagee. Where they were incurred before forfeiture, the 
 mortgagee then having in New York a mere lien and not the 
 legal title, we presume the decisions above cited would be fol- 
 lowed, and the expenses allowed, on application to the Surrogate, 
 out of the mortgaged premises. 
 
 30. Can a judgment for a deficiency arising upon a foreclosure of 
 a mortgage be enforced against the property of the mortgagor, lie 
 having been served by publication of the summons in foreclosure suit, 
 and not having appeared therein ? 
 
 A. The judgment can be enforced against property of the 
 mortgagor within the State where it was obtained ; the recent 
 United States Supreme Court decision on this point holding, 
 however^ that it cannot create a personal obligation against the 
 non-resident debtor, or reach his property in another State. 
 
 31. More than 20 years since I purchased a plot between 56th and 
 57th streets, 125 feet in each street. The city subsequently took 50 
 feet for Madison Avenue, leaving me 75 feet on the east side of Mad- 
 dison Avenue. Quiet possession has been had ever since the purchase. 
 The title is now being examined for a loan. The attorney reports an 
 old road (once used) running along the south line of 57th street and 
 extending nine feet upon my lots. This, he claims, makes the title im- 
 perfect. If this is so, I must remove it or pay his charges without 
 getting the loan, unless I can remove the cloud. 
 
 A. The first thing to be done is to look up the original deed 
 from the party who owned the lot and roadway before it was ded- 
 icated, and make sure that it contains no words which bind 
 the lot-owner in the road line, reserving the fee of the roadway 
 itself to the original grantor. This is not common in deeds, but 
 it may happen to exist, and should it be the case, would make it 
 necessary, as the next step, to acquire the fee of the roadway 
 
356 MORTGAGES. 
 
 from the heirs. Then an application should be made to the 
 commissioners of highway (the board of Aldermen) to declare 
 the discontinuance of tlie strip of land in question as a street. 
 This action on their part would clear the title. Their refusal or 
 neglect to grant the application w^ould supply the basis of an 
 action to remove the cloud. 
 
 32. A borrows a sum of money on his house, executing a mort- 
 gage, and his bond payable in three years, for the amount, interest 
 payable semi-annually. One year later he sells his house to B, who 
 assumes the mortgage and pays the interest regularly for fifteen years, 
 when he fails, and the mortgagee forcloses the mortgage, and buys in 
 the property for one-half the amount of his claim. Can he recover 
 from A, the original owner and bondsman, the balance due him ? A 
 large portion of this consists of back taxes on the property and ex- 
 penses of foreclosure. 
 
 A. We fear that A is liable, on his bond, to make up the de- 
 ficiency. Being a sealed instrument, the bond runs for twenty 
 years from its due date, or last payment of interest by the 
 obligor. 
 
 33. The holder of a first mortgage foreclosure and the mortgaged 
 property is sold without leaving any surplus towards paying a second 
 mortgage. Can the holder of the second mortgage on the same 
 property, in virtue of the bond claim from the mortgagor notwith- 
 standing ? 
 
 A. The bondsman is bound to pay the debt if the property 
 does not bring sufficient for the purpose. 
 
 34. Has not a mortgagor the legal right to demand that any pay- 
 ment, either of principal or interest, shall be indorsed on the bond ? 
 
 A. The established custom has long been to enter all pay- 
 ments on the bond, and we are disposed to think the courts 
 would now recognize this custom as having acquired the binding 
 force of law^, but we know of no actual decision to that effect. 
 The way to test the question would be to apply for an order re- 
 quiring the holder of the bond to make the entry. 
 
 35. A owns a house and lot. gets a loan on it from B, then sells 
 the property to C. After several years (three or four) the mortgage is 
 foreclosed. Is A liable to B for back taxes and assessment if property 
 does not bring enough to cover mortgage, or for only amount of bond 
 and back interest ? 
 
MORTGAGES. 
 
 357 
 
 A. A is only liable to B for any deficiency on the bond, after 
 the property has been applied toward its payment. But it will 
 amount to about the same thing, as the taxes and assessments 
 constitute a lien superior to the mortgage, and the deficiency 
 will be increased by the amount of these liabilities. As these 
 may cover the w^hole value of the property, A may be made 
 liable to the full extent of his bond. 
 
 36. Ct. — A purchases lot to build on, borrows money of B, mort- 
 gages the lot and building as security, then sells to C, subject to said 
 incumbrance. pays interest on A's note for some years , property 
 declining in value, rents fall off, and C concludes to abandon the premi. 
 ses, though at a large sacrifice. Can B collect of C's other property, 
 which the mortgage does not cover in the State of Connecticut ? 
 
 A. It is well established law in Connecticut that in such 
 cases the person who takes an estate subject to the payment of 
 incumbrances upon it, becomes personally liable for the defi- 
 ciency, if any, resulting from the sale of the mortgaged property. 
 Foster vs. Atwater, 42 Conn. Reports, 244, and cases there cited. 
 
 37. Ct. — A mortgage is usually given in this State in this manner, 
 viz. : A deed of the property is given by mortgagor to mortgagee in 
 its terms to be null and void on payment of a note for the same amount 
 of even date. Now I would ask you, in the event of foreclosure can any 
 other property of the mortgagor which may exist, be held liable in case 
 of the property not proving worth the amount of the mortgage ? There 
 is no bond, you see, given in the transaction. And again, if the 
 property be sold by the heirs of the original mortgagor, can the mort- 
 gagee, in case the property sells under foreclosure for less than the 
 amount of the mortgage, go back on the estate of the original mort- 
 gagor to supply the deficiency ? Had I not better get a bond and 
 mortgage, such as is given in New York in loaning funds of an estate, 
 in future transactions ? 
 
 A. The note which is usually given in Connecticut, and which 
 is described in the condition to the deed, is equivalent to the 
 bond given in this State, and answers the same purpose. If that 
 note is not paid and satisfied out of the premises mortgaged, the 
 maker can be compelled to pay it out of any other property sub- 
 ject to execution. 
 
 38. Ct. — Can Jones, residing in this State, and being bondsman on a 
 mortgage held by a firm in Jersey City on property in that city, be 
 held for deficiency in the event of foreclosure by mortgagees, without 
 
358 
 
 MOllTGA GES. 
 
 a personal service on Jones ? and also, whether Jones can be personally- 
 served except found in New Jersey, and before a decree is granted. 
 
 A. This question has been substantially settled by the United 
 States Supreme Court, without reference to the laws of New 
 Jersey, at the present term. The Albany Law Journal oi ^larch 
 2 gives the following syllabus of the case : " A personal judg- 
 ment rendered in a State court in an action upon a money de- 
 mand against a non-resident of the State, without })ersonal ser- 
 vice of process upon him within the State, or his appearance in 
 the action, upon service by publication, is without any validity; 
 and no title to property passes by sale under an execution issued 
 upon such a judgment. " Pennoyer, plff. in error v. Neif. 
 
 39. N. J. — Please inform me liow long a mortgage on property in 
 New Jersey that is past duo is a lien on the property, where no 
 foreclosure proceedings have been commenced. 
 
 A. The general rule is, that the statute of limitations does . 
 not begin to run against a mortgage until condition broken, or 
 non-payment of interest. If thereafter the mortgagor continues 
 in possession of the mortgaged premises without payment of in- 
 terest or rent, or admitting the existence of an outstanding 
 mortgage debt, a presumption is created that the debt has been 
 paid. The New Jersey authority on this point is Evans v. Huff- 
 man, 1 Halst., Ch. 354. 
 
 40. N. J. — An owner of real estate gives two mortgages covermg 
 the same property to two different persons, one for $5,000, one for 
 SI, 500. These mortgages are both acknowledged the same date. The 
 $5,000 one is placed on record within a few days, and the $1,500 one 
 still later. The parties to tliese transactions being now deceased, the 
 executors of the two estates each claim his to be the first mortgage. 
 The executor representing the $1,500 mortgage claiming precedence on 
 the ground that it was so understood between the parties at the time of 
 executing the papers. In law can this be so, ignoring the records ? 
 
 A. An incidental remark of the New Jersey Chancellor, in 
 the case of Gansen v. Tomlinson, 8 C. E. Green, 405, wdiere it 
 was held that the priority of registry in the case of two mort- 
 gages given at the same time to the same person, did not 
 create a preference, leads to the belief that the same conclusion 
 would be reached in the case presented by our correspondent, the 
 Chancellor saying that the statute only gives that effect as 
 
NA rURALIZA TION. 
 
 359 
 
 against subsequent mortgages without notice. If the 85,000 
 mortgage was actually delivered last, with full notice of the 
 other, the decisions justify the opinion that prior registry would 
 not give a preference, and we incline to the belief that under the 
 circumstances a court of equity, in which mortgages are fore- 
 closed in New Jersey, would give the preference to neither, but 
 require them to be satisfied pro rata. 
 
 NATUKALIZATIOK 
 
 1 . Can an alien who declares his intention to become a citizen, and 
 to whom is denied the privilege of a passport until he is fully admitted, 
 obtain any other papers to enable him to enter any countries where 
 passports are required ? or if not, what expedient is left to him ? 
 
 A. In many countries a passport is necessary. Where one is 
 needed, the traveler may obtain from the resident consul of the 
 country to which he is going a pass that will answer his purpose. 
 
 2. 1. Can American parents residing abroad claim American citi- 
 zenship for their child born there ? If so, on what conditions ? 
 
 2. Can a resident not naturalized, own real estate in this country? 
 If so, can he or she, in case of death, bequeath the same to relatives 
 here or abroad ? 
 
 A. 1. A child born abroad of American citizens formerly re- 
 siding in this country, can claim American citizenship without any 
 conditions. If that child never comes to reside in this country, 
 his children cannot assert the claim ; but if he ever does reside 
 here, then his children are citizens, although born abroad. 
 
 2. By declaring an intention to become a citizen, resident 
 aliens in New York may hold and bequeath real estate for six 
 years thereafter. 
 
 3. I am an Italian by birth, and at the age of 19 I left my country 
 for New York, where I have been residing ever since (nearly five 
 years), consequently failing to present myself to serve my town in the 
 Italian army, as required by the laws of that nation. Should I get my 
 papers out as a citizen of the United States, and then go to Italy to settle 
 some private business, to return afterward to America, could the 
 ItaUan government then cause my arrest while there, and punish me 
 in accordance with the law as a deserter ? I shall become an Ameri- 
 can citizen, but am I protected if I am compelled to go back to Italy 
 for a temporary stay ? 
 
360 ■ NEGLIGENCE. 
 
 A. If you become a citizen of the United States, and visit 
 Italy on temporary business, with an American passport, you will 
 be protected by our government. You will do well before you 
 start to have your passport countersigned by the Italian Consul 
 at this port. 
 
 4. I have been in the country four years. If I wish to become a 
 citizen how long must I wait before I can get my papers ? I am now 
 1 8 years of age, but my father is not a citizen ? If I were a citizen, 
 could I go to Europe without any risk of being taken for military 
 services ? 
 
 A. Our correspondent cannot become naturalized by his own 
 act until he is of age. When this occnrs, and he has taken out 
 his papers, he will be protected by our government while travel- 
 ing abroad. 
 
 5. I was born in November, 1847, came to this coun- 
 try in October, 1867, went to the West Indies in 1869, whence I re- 
 turned in 1871, and have lived here ever since. Suppose I should, 
 with witnesses testifying to time of my sojourn here, apply for and re- 
 ceive my first papers to-day, how soon would I be entitled to my second 
 papers, making me a full fledged citizen of the United States ? Please 
 cite the law. 
 
 A. The applicant must wait two full years from the date of 
 his first papers before he can become a citizen. Only a minor 
 who resides here three years before obtaining his majority can, 
 after five years residence, take the second papers at the same 
 date he makes his declaration. U. S. Rev. Stat., sec. 2,165-6. 
 
 NEGLIGENCE. 
 
 1 , I have a store on Broadway. The windows on the lower or 
 first floor are of plate glass for which I paid $150 a pane. Through 
 an accident one of them is broken by a passer by. Can I collect 
 through law $150 for it ? 
 
 A. The responsibility of the " passer by " will depend on the 
 nature of the accident. If a mad steer tossed him through the 
 window he could not be required to pay ; but if the accident oc- 
 curred through his fault or carelessness, he can be held to pay 
 the damage, whatever it can be proved to be. 
 
NOTES. 
 
 361 
 
 NOTES. 
 
 HOLDER. 
 
 1. A note for $600 was due and presented at G Bank on 
 
 December 31st ; funds being there to pay said note, it was certified and 
 
 amount taken from maker's account. January 1 the G Bank sus- 
 
 pended, and now the bank holding the original note looks to maker of 
 it for payment ; but bank book being balanced up, shows this $G00 as 
 being paid and charged against us. Are we liable again to pay this 
 note ? 
 
 A. The holder who takes a certification instead of the money 
 thereby relieves the maker. In the above case the bank holding 
 the paper must stand in the gap. 
 
 2. A borrows an accommodation note from B (giving him his own 
 for same amount as memorandum receipt) and discounts it at a bank, 
 stating that it is not an accommodation note. He fails ; must B pay 
 the note, or, if he refuses, can the bank proceed criminally against A ? 
 
 A. B must pay the note if he is solvent, the fact that it is an 
 accommodation note being no defense to it in the hands of a 
 third party. A might be held liable perhaps for obtaining money 
 under false pretenses, but the note is just as good to the bank as 
 if the representation was true. 
 
 3. A is in debt to B for merchandise and gives a check for the 
 amount, dated on a legal holiday, but unnoticed on the day of signing 
 it. B, on presenting the note at the bank for discount, is told to change 
 the date, which he does, for example, from the 6th to the 5 th, but in- 
 forms A of the alteration a week after, who (A) expresses himself sat- 
 isfied with it. A not pajdng the note when due, the 5th, it is protested. 
 Can B collect the amount through the court, as A pretends not to be 
 responsible for the note in consequence of the change in the date, al- 
 though he consented as stated above ? 
 
 A. The bank officer gave the holder very bad advice. In the 
 first place a note dated on a legal holiday is just as good as if 
 dated on any other day, and no alteration was required. But if 
 such alteration had been essential, it should not have been made 
 by the holder. " The alteration of the date, of the amount, of 
 the rate of interest, or by adding the words ' with interest,' or of 
 the time of paying interest, voids the note." Fay v. Smith, 1 
 Allen, 447 ; Wade v. Worthington, 1 Allen, 561 ; Irving v. Mi- 
 chael, 33 Mo., 398 ; Story on Promissory Notes, 408 a. 
 
362 
 
 NOTES. 
 
 There is a question w lietlier tlie drawer's acquiescence in the 
 alteration is not a renewal, but under tlie circumstances this is 
 of no account. As A has not paid his debt to B for the mer- 
 chandise, a suit will lie for that, as well as for the note, and B 
 has his legal remedy in tliis way. If the note is void or not i)aid, 
 the liability of A for the merchandise is still the same. If tlie 
 statement is true in all its parts A is a rogue, and B should col- 
 lect his debt. 
 
 4. A gives his note to C with C's indorsement. The note is drawn 
 to order of B, C indorsing. At maturity the note is not protested and 
 B sues C, and recovers judgment against him ; it was in evidence that 
 C was to indorse as surety, and notwithstanding its non-protest, counsel 
 held that it was in the nature of a joint note, judge so ruling, and the 
 jury rendering a verdict for B. 
 
 A. The decision is good law, and presents nothing novel in 
 its application. The law^ful possessor of the note has the right 
 to hold C as either indorser or surety ; and proof that he signed 
 as surety will render him liable without protest wnder the laws 
 of any State. 
 
 5. A makes a note as treasurer to order of himself individually, 
 indorses it *'Pay B & C and D & E," two separate firms. B & C in- 
 dorse, but by some neglect D & E do not. D & E have since failed. 
 B & C now say, through their lawyer, that they are not liable because 
 D & E failed to indorse. B & C received notice of protest, and 
 since the failure D & E verbally promised to pay it. Under these cir- 
 cumstances are B & C liable, and within what time must an action be 
 commenced ? 
 
 A. The lack of D & E's indorsement w^as in itself sufficient 
 reason for non-payment and protest, and if that were the cause 
 it appears likely to have been the holder's fault, and B & C could 
 not in reason be bound to stand in the gap. Their verbal prom- 
 ise, without some new consideration, would not bind them. As 
 the case appears above, therefore, we do not think that B <fe C 
 could be held as indorsers. An action against them, to test the 
 (juestion, would need to be commenced wdthin six years from the 
 date of protest. 
 
 6. ^Ve sold some goods to a party doing business in Indiana, for 
 which we received his two notes. One note we sold before maturity, 
 and the holder of the same accidentally omitted to send it for collec- 
 tion. The makers having failed in the meantime and gone through 
 
NOTES. 
 
 3-63 
 
 bankruptcy, settled with all their creditors except with the one spoken 
 of, who never received notice of bankruptcy or of any of the meetings 
 of creditors. Can this party collect full amount of his claim, or must 
 he accept compromise ? 
 
 A. The holder of the note lost all recourse to the iiidorscrs, 
 if any, by his failure to present it. If the settlement made was 
 a legal compromise, that is all the holder of the note can now 
 collect. 
 
 7. A gave a note to B on the 28th of November, payable on the 
 1st of January. B sold the note. A went to B to buy the note, not 
 knowing B had sold it. B would not own he had sold it, but tried to 
 make out he did not have it with him. A afterwards found out that 
 he had sold it. Now if on the day it becomes due B does not state that 
 he has sold it, and cannot produce it, is A obliged to pay it ? 
 
 Is there any law that unless the words w4th notice" are written in 
 the note, it is not entitled to notice ? 
 
 By answering these two questions, you will greatly oblige. 
 
 A. If the note is negotiable, B is not obliged to notify A that 
 he has sold it. 
 
 And A must pay it when due, if presented properly indorsed. 
 The allowance of three days' grace upon promissory notes is 
 established by custom in this State, and need not be mentioned 
 in the document itself. 
 
 8. The payee presents for discount a note in which the day of the 
 month is left out of the date ; has he or any person other than the 
 maker a right to insert the same, there being no evidence of the inten- 
 tion of the maker as to the precise date the note should bear ? The 
 note being forwarded to the payee by mail, would the date of the letter 
 of the payor be proper evidence as to his intention as to the date of the 
 note, so that the payee could insert it ? 
 
 A. If the date is omitted, the holder, if he does not know 
 the figures intended, may assume that the true date is the date 
 when it was made or issued (Chitty on Bills, ch. 5, p. 169) ; or 
 if that cannot be ascertained, from the day when its existence 
 can first be established (Com. Dig. Fait B. 3 ; Bayley on Bills, 
 ch. 7, sec. 1, p. 248). Or the holder may fill it up with an ar- 
 bitrary date (even after the maker is dead), and the fact of such 
 insertion is no defense to the demand for payment. Story on 
 Prom. Notes, sec. 48 ; Usher vs. Dauncey, 4 Camp., 97 ; 22 Eng. 
 Law and Eq. R., 516, and a host of other authorities. 
 
364 
 
 NOTES. 
 
 INDORSEMENT. 
 
 9. A gives a note payable to B or order, with collateral specified 
 therein to secure the payment thereof ; A then takes the note to C (a 
 bank) and gets it discounted for his own accommodation, leaving the 
 collaterals with the bank. Can C (the bank) hold B (the indorser) and 
 also the collaterals ? 
 
 A. The indorser B can be held for the payment (Willis v. 
 Green, 10 Wend., 517), and the collaterals are also part of the 
 security. 
 
 1 0. Suppose I am the holder of a note which was dishonored at 
 maturity, said note bearing five indorsements, and I choose to release 
 the third indorser for a consideration or otherwise, does such act of 
 mine also release from obligation the subsequent or any of the other 
 mdorsers ? 
 
 A. A lease of any one indorser will release all subsequent 
 indorsers. 
 
 11. F sells a note of M & Co., payable to the order of F to the 
 broker L without recourse. This fact (that it was sold without re- 
 course) is however not written or stamped on the note, but the broker 
 L gives F a written release from any responsibility arising from his in- 
 dorsement. L sells the note to Y on its face, that is, without mention, 
 ing anything about a release having been given to F. The note goes 
 to protest, the broker L has failed meanwhile. Is F liable for the 
 note ? And how is it, if the rate of interest allowed by F to the broker 
 was more than 7 per cent per annum ? 
 
 A. F is liable for the note. The bargain made by L does 
 not bind Y, and the latter can compel the indorser to pay, the 
 rate of interest being no bar to the recovery. 
 
 12. A banker discounts for A B his note indorsed by C D. Be- 
 fore the note matures. C D, the indorser, dies. A B fails to pay the 
 note at maturity and it is protested for non-payment, notices of protest 
 being properly served. Pending the settlement of the estate of C D, the 
 banker renews the note of A B, with another indorser, and as agreed 
 between him and the maker, and new indorser holds the old note in- 
 dorsed by C D as collateral for the new note. The note is kept re- 
 newed and the interest paid until the administrator is ready to settle 
 claims against the estate of C D. At the time of proving claims 
 against the estate of C D, the administrator holds that the renewal of 
 the note without the consent of the administrator released the estate 
 from any liability. Is he correct ? The maker was insolvent before 
 the death of C D. Please give authorities. 
 
 A. If there be any valid agreement between the maker of a 
 
NOTES, 
 
 365 
 
 note and the holder, whereby the holder agrees to give credit to 
 the maker of the note after it is due, or wliereby the payment is 
 postponed to a future day, and this agreement is made without 
 the consent of the indorser, the latter is thereby absolved from 
 all obligation to pay the same. Story on Prom. Notes, 413 ; 
 Bayley on Bills, cli. 9, pp. 441, 444, 451, 452. All the authori- 
 ties agree that giving time to the maker, or taking from him any 
 other security, such as a negotiable note with another indorser, 
 will release all the old indorsers. 
 
 13. Is there any form of demand note that can be made that 
 will absolutely hold indorser or sureties as long as the maker ? 
 
 A. The note may be in the ordinary form, indorsed as fel- 
 lows : " I guarantee the payment of this note, if demanded of 
 
 the maker, within years from date." We think this would 
 
 accomplish the object desired. 
 
 14. I give K a note at 12 months to his individual order; K in- 
 dorses it and gives it to L in payment of a claim. Thirty days before 
 the maturity of the note K notifies me not to pay the note to L when 
 it becomes due, and declares his indorsement null and void. To whom 
 must the note be paid ? 
 
 A. The indorser who has delivered the property to another 
 cannot stop the payment on a simple notice to the maker. He 
 can only stop it by legal proceedings enjoining such payment. 
 
 15. A sells B certain patents, receiving in part payment therefor 
 notes, the interest on which, according to the agreement of assignment, 
 is to be paid monthly. Should the notes show on their face that the 
 interest is to be paid monthly, and should it be indorsed on them when 
 paid, or will a receipt from A be sufficient ? 
 
 A. The notes should state that the interest is to be paid 
 monthly, although that is not indispensable. If the notes are 
 not negotiable, A's receipts for the interest are as good as the in- 
 dorsement. But if the notes are negotiable, then A may pass 
 them to another, and if the latter took them in good faith, and 
 nothing is said about the monthly interest on the document it- 
 self, he can collect the back dues in spite of A's receipt. 
 
 16. A fails and compromises with his creditors, giving as indorsers 
 on his notes C and D each individually. A draws note payable to B, 
 one of his creditors. B wishing to sell the note indorses on the back, 
 
366 
 
 NOTES. 
 
 without recourse. " Will the indorsers C and D be holden to an- 
 other party who buys the note, and if so, can they recover from B, he 
 being the first indorser, though C and Dwere the sureties ? 
 
 A. B can iiidorse without recourse to himself and have the 
 note good against all the other parties. 
 
 1 7. Do the words " without recourse, " and signed by a person on the 
 back of a paper, payable to one's order, absolve the person so signing 
 from any legal process by holder, if not paid at maturity? Also, if 
 there are two or three indorsers and the last one indorses "without re- 
 course, " is not he absolved and the others. held if protested for non- 
 payment ? 
 
 A. The words " without recourse to, " or " without recourse 
 in any event to, " written before tlie signature, will remove all 
 liability from the indorser if the obligation is not paid, leaving 
 all other parties held for the same if duly protested. 
 
 18. A note made by A and indorsed by B, in case of A's failure, 
 would B be compelled to pay the whole amount ? 
 
 A. If the note is duly presented and B is notified of non- 
 payment, the whole amount due, with interest and costs, can be 
 collected of him if the holder so elects. 
 
 19. A makes a note to his own order, or to the order of B. B in- 
 dorses the same ; the note when signed and indorsed was not dated, a 
 fact which the maker and indorser were cognizant of. Some time sub- 
 sequent to the making of said note as above described, A carries it to 
 C for discount, and dates the note the day of the discount. Does the fact 
 that the note was dated after indorsement impair the liability of the 
 indorser ? Or if the indorser was unaware of the fact that the note 
 was not dated at the time he indorsed it, would that affect differently 
 his liability ? Again, if the indorser- is held under such circumstances, 
 will you please inform me how long A could retain such a note, and 
 subsequently date it and get it discounted, so as not to impair the 
 validity of the note ? 
 
 A. A person who signs or indorses a note in blank is liable 
 to a third party who takes it in good faith for the promise w4th 
 which the blanks have been filled. And there is no limitation 
 as to the time after the signature when such paper may be filled 
 up and issued, if the parties are still alive. 
 
 20. Money obtained on a note payable to order at a bank, with 
 genuine iiidorsement, and the maker's name forged, whoso loss is it, the 
 bank or the indorser ? 
 
NOTES. 
 
 367 
 
 A. A man who indorses a forged note that is made payable 
 at a bank, and obtains money thereon from the bank where it is 
 payable, is liable for the amount, and if he can be found and is 
 solvent, the money may be recovered from him. 
 
 21. A wishing^o raise money, makes his own note in favor of B, 
 and gets B to indorse it for accommodation. The note is offered for 
 discount, but is declined. A then induces another friend, C, to indorse, 
 and the note is discounted for A's benefit. At maturity it is protested 
 for non-payment, the maker having failed. The following day C pays 
 the note. Has he recourse upon B, the first indorser, for the T/hole 
 amount, or must the indorsers divide the loss equally ? 
 
 A. Unless there was some further understanding, C can col- 
 lect the whole amount from B, with costs of protest besides. 
 
 22. How far is an indorser of a note holden when the maker be- 
 comes insolvent, and settles with his creditors for fifty cents on a 
 dollar ? 
 
 A. If the maker settles with his creditors and obtains a re- 
 lease, that discharges the indorser from all obligation. 
 
 23. In applying the rule of law that every indorser of a bill or 
 note guaranties the genuineness and sufficiency of all previous indorse- 
 ments, would not a teller, in paying checks to a bank, be safe in pay- 
 ing on the indorsement or stamp of the bank alone, without troubling 
 himself to examine the indorsements previous to that at all ? 
 
 A. If the collecting bank is good beyond question, the 
 drawee is safe in making the payment without evidence as to the 
 genuineness of the other indorsements. 
 
 24. Should a note payable in three equal annual installments, with 
 interest payable semi-annually, and having an indorser, be protested 
 when each part payment becomes due to hold the indorser ? The case 
 in question is this : The interest was paid twice (semi-annually), and 
 the first part payment, one-third of the entire amount, was paid when 
 due, and these three payments were all paid by the indorser, without 
 protest, but when the second annual payment became due the bank 
 failed to protest. Can the indorser be held, or has each part payment 
 to be protested, just the same as three distinct notes ? 
 
 A. To hold the indorser he must have notice of each default. 
 
 25. A holds a note of B indorsed by C. If A accepts a comprom- 
 ise from B, has A any claim on C for the balance ? 
 
 A holds a note of B indorsed by C. If A accepts a compromise 
 from C, has A any claim on B for the balance ? Banker. 
 
368 
 
 NOTES. 
 
 A. A release of the maker on any terms will release the in- 
 dorser, bnt a total release of the latter on whatever terms does 
 not affect the liability of the maker, to the holder, except for 
 such part of the note as may have been paid. 
 
 26. A receives a note from B, having C's indorsement as security 
 for its payment when due. Before the maturity of the note C died ; 
 now, what shall A do with the note to make C's estate responsible ? 
 The note is not due yet. 
 
 A. The holder of the note will do well to notify the executor 
 of the liability of C, but unless the note has still a very long 
 time to run, it will probably mature before the estate can be 
 settled. A notice of protest in such a case will secure the legal- 
 ity of the claim. 
 
 27. How long is the signer, Richard Roe, as surety to the following 
 note, held responsible for the payment of the same, provided he is not 
 notified of non-payment ? Will it make any difference as to the re- 
 sponsibility of the said Richard Roe whether the note remains in the 
 possession of the said John Doe, or has changed hands one or more 
 times ? 
 
 $100. Fort Covington, N. Y., Jan. 1, '79. 
 
 One year after date, for value received, I promise to pay to John 
 Doe, or order, one hundred dollars, with use. 
 
 JAMES BROWN. 
 
 Richard Roe, Surety, T. T. K. 
 
 A. Richard Roe is liable as a joint maker, and is held as long 
 as his principal for the payment of the note. 
 
 28. Is the indorsement of a wife on her husband's note, she holding 
 real estate in her own name, of any use ? 
 
 A. If the inquiry refers to this State, we answer that the in- 
 dorsement is good if in proper form. For example : " For value 
 received I hereby charge my separate estate with the payment 
 of this note." In States which have not adopted our progressive 
 legislation with respect to the property of married women, a 
 woman's indorsement of her husband's note is of no value. 
 
 29. I take a note payable to my order at bank , now is an indorse- 
 ment on the back by a third party of any use to me ? If the maker 
 fails to pay, can I collect of third party ? 
 
 A. The Supreme Court of the United States has just decided 
 that an indorsement on a note by a third party made before the 
 
NOTES. 
 
 369 
 
 same is delivered to the payee constitutes the said indorser a 
 co-maker or guarantor. We gave the same answer to the same 
 case before it was litigated. 
 
 30. If A gives his note with his wife's indorsement thereon to B, 
 and the note is protested, can B bring an action against Mr. and Mrs. 
 A jointly, and when judgment is rendered can the sheriff levy on the 
 property of Mrs. A ? 
 
 A. Unless the wife's indorsement was given with a distinct 
 contract to make it binding upon her separate estate, or it can 
 be shown that the obligation was for the benefit of such estate, 
 or of her independent business relations, we do not think a 
 judgment can be obtained and satisfied out of her individual 
 property. 
 
 MAKER. 
 
 31. I hold a promissory note falling due on January 28, and the 
 maker having acknowledged his inability to pay it at maturity, wishes 
 me to withdraw it from the bank where it has been deposited for col- 
 lection, and exchange it for a new one, extending the time of payment. 
 I have, properly filed, a document securing the payment of this parti- 
 cular note. It occurs to me that I should better receive from the maker 
 the interest up to the time the note is due, and retaining it, receipting 
 for it on the back, rather than take a renewed note. 
 
 A. If the " document securing the payment " of this note is 
 nothing more than an ordinary guaranty, our correspondent will 
 do well to use a little caution about either course of which he 
 speaks, as whether he extends or renews the note, such guaranty 
 for its payment will be worthless, unless the guarantor consents 
 to the arrangement. 
 
 32. I hold a note against a person who died a month ago. This 
 note becomes due on the 30th day of this month. He died intestate, 
 but the wife is appointed by the court without opposition as adminis- 
 tratrix of the estate. Now what I want to know is this : It is desired 
 by the administratrix to have this note extended for 30 or 60 days 
 longer, with a person acceptable to me as an indorser, which I am per- 
 fectly willing to do ; but how is this note to be extended ? What are 
 the legal forms of such transactions ? 
 
 A. The death of the maker of the note operates as an ex- 
 tension, and the payee could not enforce its payment in any cir- 
 cumstances within six months. For this reason the promise of 
 an indorser to guaranty the payment of the same on account of 
 24 
 
370 
 
 XOTES. 
 
 30 or 60 clays' further time would be valueless, being wholly with- 
 out consideration. An agreement between the payee andatliiid 
 party, by which the latter secures the final liquidation of tlio 
 debt, if duly executed for a consideration, would be valid ; l)ut 
 neitlier the administratrix nor any guarantor would execute such 
 an undertaking without a misapprehension of tlie obligation of 
 the former as to her duties concerning the payment of the note 
 at its maturity. 
 
 33. A note was mailed from a western city which w^as jost. It has 
 been advertised three times ; payment has been stopped where the note 
 was payable. Can suit be brought against the makers when the note 
 is due, if note was held by innocent parties ? 
 
 A. The maker can be compelled to pay, but the loser must bs 
 prepared to furnish ample bonds that the lost documenc will not 
 •turn up to the maker's loss. 
 
 34. Should A issue a note for 30 days, at the expiration of which 
 time the note is not presented, but is held for two years, when not only 
 the principal but interest is claimed, on the ground that A should have 
 hunted up the holder and paid his note when due, would such a claim 
 be good in the eyes of the law ? 
 
 A. Interest w^ould be due beyond question. If A did not 
 mean to pay interest he sliould have hunted up the liolder and 
 paid the note, for it carries interest from the time it was due, 
 at any rate, even thougli, "without interest up to that date. 
 
 35. A gives a note to B payable on the first of January, payable 
 at a certain bank. The first of January being a legal holiday, A de- 
 posits his money in his bank to meet his note on the 30th December. 
 B does not get his note certified nor present it at the bank where it is 
 made payable, but deposits it in his bank with his daily deposits on 
 December 31. On January 2, B has A's note returned from his (B's) 
 bank, as the bank where A had his funds had failed at 3 p. m. on 
 December 31. Now who is responsible for the payment of the note ? 
 and must A pay his note over again to B or not ? 
 
 A. The failure to present a promissory note at tlie place 
 where it is payable on the day it is due, will discliarge from re- 
 sponsibility all parties but the maker. It will not wholly dis- 
 cliarge him as to the principal, but it will relieve him from all 
 damages and charges for default ; and " if any loss has been in- 
 <;urred by the failure to present, this may be set up as a matter 
 
NOTES. 
 
 371 
 
 of defense " when he is pressed for payment. (Daniel on Negoti- 
 able Instruments, vol. 1, page 478; Armistead v. Armistead, 10 
 Leigh, 525 ; Foden v. Sharp, 4 Johns, 183.) There can be no 
 question in the case above cited, that any loss suffered by the 
 maker of the note because of failure to present it on the day of 
 maturity will fall on the holder. The note due January 1 is 
 by express statute in this State payable on the next previous se- 
 cular day, which was December 31. Story on Promissory Notes, 
 vol. iv., sec. 227, states that the maker " is under no obligation 
 to pay the note until presentment and demaiid has actually been 
 made at the banker's or other specified place ; and if he has suf- 
 fered any loss or injury by the want of a due presentment, to the 
 extent of that loss and injury he will be discharged as against 
 the holder." Rhodes v. Gent, 5 B. and Aid., 244, and many 
 others. 
 
 36. If a note drawn to the order of the maker and indorsed by 
 him, is lost or stolen, and sold by the finder (or thief) to a third party, 
 has the maker of the note any defense against such holder, or is he 
 obliged to pay the note ? 
 
 A. Negotiable securities are good in the hands of one who 
 purchases in good faith and before maturity, although the seller 
 may have found or stolen them. 
 
 37. A borrows B's note, payable to A's order, in lieu of money. 
 A has same discounted. Before the note matures A fails. Question : 
 Can the bank hold B for payment of such note if B has never had any 
 value received ? If not, and the bank charges the note up to B's 
 account at maturity (B doing business with same bank), can B recover 
 the amount of the note from the bank ? 
 
 A. If the holder pays value, it makes no difference whether 
 the maker or indorser ever received a cent of the money ; they 
 are both holden for payment, and the bank can charge the note 
 when due to B's account. 
 
 38. A time paper is made payable at Bank A ; it is discounted at 
 Bank B, which holds it when due. On notice of date when due the 
 maker offers the holder, Bank B, payment for the whole amount on the 
 day preceding the last day of grace. The bank refuses to receive pay- 
 ment on that day on the ground that it was the next day's business. 
 \yith these facts for a basis, please inform me : Had the bank the 
 right to refuse to accept payment because the last day of grace had not 
 
372 
 
 NOTES. 
 
 approached ? Believing tlie bank ought to have accepted payment 
 when olTered, the maker of tlie note did not make any tender the next 
 day, and the bank protests the paper ; could the drawer be made to 
 pay cost of protest ? Can Bank B protest paper made payable at Bank 
 A ? 
 
 A. Tlic note is not payable until the last day of grace, except 
 at the option of both parties. But the note must be presented 
 at Bank A, where it is payable, before it can be legally protested. 
 As it appears that it was not thus presented, the indorser, if any, 
 is not liable, (having been released by such failure to present on 
 the day of maturity,) and the maker, if he had the funds at 
 Bank A to meet the paper, or if he had made provision there to 
 meet it, cannot be charged with any costs of either protest or 
 suit until such demand is made. 
 
 39. We received a note from a person who omitted to fill in the 
 blank where the same was payable. 
 
 The note was left with our bank for collection, and forwarded by it 
 to a bank located some fifteen miles away from where the maker of the 
 note resided. 
 
 On the dav when the note came due, we received a postal card from 
 the maker, stating that he had received a notice from a bank "that 
 they held his note and demanded payment," and that he would not go 
 to the expense to hire a team in order to pay the note. Was it the 
 bank's duty to present the note to the maker at his residence, in the 
 absence of any other place being designated for payment ? Or w^as it 
 the maker's duty to go to the banking house and pay the note, he hav- 
 ing been duly notified of its whereabouts ? Had the bank a right to 
 protest the note, they never having presented the same to the maker ? 
 
 A. If no place is appointed for payment, the obligation must 
 be presented at the place of business, or if none can be found, 
 at the house or residence of the maker, if that can be found ; 
 the demand " cannot be made by letter through the post office " 
 (Kent's Comm., vol. 3, sec. 44, pp. 95-97), "but due diligence 
 must be used to find out the party and make the demand." So, 
 also, read all the authorities and decisions. The note in quest ion 
 cannot be lawfully protested without such a presentation where 
 the maker's residence is known. The presumption is that the 
 maker resides where the obligation is dated, and if there is no 
 other residence it must be presented there, but if it is known 
 that the maker lives elsewhere in the State, then the demand 
 
XOTES. 
 
 373 
 
 must be made where lie resides, and anything less than this is 
 not due diligence in the collection of the note. 
 
 40. n a note which has been discounted at a bank before maturity 
 is made payable at the office of a merchant, must the holder of the note 
 present it at the merchant's office ? If the holder must present it at 
 said place, should he present it before 3 p. m. ? 
 
 A. The note must be presented at the place where it is pay- 
 able, if at a bank, during banking hours ; if at an office or place 
 of general business, during business hours ; if at a residence, 
 during family hours ; and if the maker or some one for him is 
 not ready with legal-tender currency to pay it, the holder need 
 not call again. A check, even if certified, is not a legal tender, 
 and may be lawfully refused. 
 
 4 1 . Below we give you description of a note : 
 
 Bangor, Me., July 1, 1879. 
 Six months after date we promise to pay to the order of S. Greene one 
 thousand dollars, value received. 
 (Signed) James Monroe & Co. 
 
 The question we wish to submit to you is, where is the above note 
 payable, there being no particular place named in the body of the 
 same ? 
 
 A. Where no place of payment is specified a promissory note is 
 payable at the maker's place of business, or if none is known, at 
 the residence of the maker, if that is known and within the State. 
 But where the maker of a promissory note resides and has his 
 place of business in one State, and actually dates, makes, and de- 
 livers a note in another State, the holder may demand payment 
 at the place where it is dated, and if upon reasonable inquiry he 
 cannot find the maker within the State, or any one to answer for 
 him, he may protest it for default. Story on Promissory Notes, 
 sec. 386. 
 
 42. A owes B $200 for which he gives his note. The note is now 
 due and A wishes to pay it, but B cannot produce the note and says it 
 is lost. He is irresponsible. If A pays the money, how can he be 
 secured against paying it again should the note subsequently turn up 
 in other hands ? or if A does not pay it, can he stop the interest ? 
 
 A. The law of this State provides for the collection of lost 
 notes, the loser to give bonds in two sureties to guard the maker 
 against loss. We have no doubt that the maker can stop the in- 
 
874 
 
 XOTES. 
 
 terest if it is due, by paying the money into a trust company 
 and advertising for the note with a caution that the interest has 
 ceased. 
 
 43. In the case of a bill of goods bought on three months' note 
 or in place of note (privilege of) discount for cash for unexpired time, 
 would the buyer be entitled to the three days' grace of the note in cash 
 settlement ? 
 
 A. If the note is actually given, and then discounted by the 
 maker, he is entitled to have the interest for the remaining time 
 including the three days' grace deducted ; but if the purchase 
 stands on open account, no grace is allowed in the reckoning. 
 
 44. A & B and C are two firms mutually indorsing bank paper, 
 both members of the first firm knowing and agreeable to the arrange- 
 ment. A bank declines accepting A's indorsement of his firm's name, 
 though allowing B's to be good. Are not both liable, and is not the 
 bank wrong in thinking that A is not legally responsible ? 
 
 A. AYe cannot, from tlie narration, see any reason why A's 
 mdorsement of the name of A <fc B is not as good as that of B ; 
 but if the latter is the capitalist of the concern, and the notes 
 are accommodation paper, there may be a greater sense of secu- 
 rity in having the signature of the latter. 
 
 MISCELLANEOUS. 
 
 45. If A lends B his note without consideration, payable to B's 
 order and by him discounted for his own accommodation, and when 
 due B fails to pay the note, can it be collected of A ? 
 
 A. A cannot collect it of B, because he has given nothing for 
 it, but it is as good in the hands of a third person who has given 
 value for it as if B had received the money himself. 
 
 46. We buy coffee from New York jobbers on 60 days, giving 
 note to our own order, payable at office of seller. Our custom lias 
 been to remit check at maturity, payable to order of seller, trusting 
 him to cancel the note and return it. Should the payee collect such 
 draft, and having discounted our note, fail before it was presented to 
 him for payment, what is our recourse ? 
 
 A. TVIien a check is remitted expressly to cancel a particular 
 note, it is a breach of trust to apply it to any other object. Tlie 
 receiver cannot even apply it to liquidate another debt due from 
 the sender. The remedy of the latter is the same as in any 
 other like breach of trust. 
 
NOTES. 
 
 375 
 
 47. In the matter of a commercial note to be offered for sale if, in 
 drawing it with reference to time of maturity, it be dated on a Sun- 
 day, is it a legal note in this State, (N. Y.,) or in Massachusetts ? 
 
 A. There is no State in the Union in which a note is void or 
 the obligation of the maker in any way affected simply because 
 it is dated on Sunday. 
 
 48. If a note falls due on Monday, and it is a legal holiday, can the 
 bank insist on protest fees if the money is tendered Tuesday morning 
 following ? 
 
 A. By statute in this State, (N. Y.,) all bills and notes fall- 
 ing due on a holiday, are made payable on the business or secular 
 day preceding the lioliday. 
 
 49. Six months after date we jointly promise to pay to G one^ hundred dol- 
 lars, value received. Signed, A. 
 
 B. 
 
 (Dated.) C. 
 
 A and B both refuse to pay anything when the note becomes due, C 
 has paid one-third of the above amount one month before it became 
 due. In case of a suit, can C be held for anything more ? 
 
 A. The chief distinction between a joint note and one that is 
 joint and several, is that in the former suit must be brought 
 jointly against the parties, while in the latter either may be pro- 
 ceeded against. But judgment having been recovered against 
 the joint makers, the execution may be satisfied out of the 
 property of either, and he can then compel his associates to con- 
 tribute, each his share. In the above case there is only one ob- 
 scure point, not cleared in the statement. A release of one joint 
 maker is a release of all, and if C was legally released when he 
 paid his contribution the whole is void. But if C was not re- 
 leased, he is still liable for the remaining sum. 
 
 50. January 1st, 1877, A as trustee sold B real estate in Georgia 
 and took his note at three years after date, interest semi-annually, B 
 reserving the right to pay the note before maturity. About April, 
 1878, C is appointed trustee and removes to New York. July 1, 1878, 
 B (having had notice of the change of trustees) offers to pay his note 
 and interest, and is then notified by A of said change. B writes to C, 
 but as he has had no notice of transfer, he claims that he should 
 not be charged interest after July 1, 1878, although the payment was 
 delayed to July 12th. Is B liable for the 12 days' interest ? 
 
 A. The debtor B must make actual tender of the money to 
 
376 
 
 NOTES, 
 
 the person authorized to receive it, before lie can stop the inter- 
 est ; the delay is therefore his misfortune, as he loses the in- 
 terest. 
 
 51. A note drawn on the 15th of the month, and instead of being 
 made due in 15 days, reads "On September 1, pay to order, " etc. Is 
 it to run 15 days and three days' grace, same as if made due in 15 
 days ? 
 
 A. A note made due at a ftxed date in the future carries three 
 days' grace (unless the words " without grace " are used in the 
 contract), precisely as if it matured on that day by a reckoning 
 of so many days from its date. A contract in a promissory note 
 to pay money " on September 1, " is really an undertaking to 
 pay it on September 4, and it cannot be protested for non-pay- 
 ment until the latter date is reached. 
 
 52. Can a note secured by collaterals, payable on a specified day, 
 be paid sooner, without the consent of the payee ? 
 
 A. It makes no difference how the note is secured, " payment 
 jan only be made before maturity by consent of both debtor and 
 u-editor. " Ebersole v. Redding, 22 Ind., 232; Daniel on Xeg. 
 ais., vol. 2, page 233. 
 
 53. A & B are partners in the steam mill business. They buy a 
 mill, A paying cash for his half, and stands B security for his half , B 
 .'^oes into bankruptcy. The law in North Carolina is that securities 
 are released after three years ; the note has stood over three years. 
 Xs A responsible ? (B paid interest annually). 
 
 A. The payment of interest prevented tlie statute of limita- 
 tions from taking effect so as to release A, unless he has given 
 the statutory notice to the creditor, requiring him to take legal 
 measures for the collection of the debt from B, the principal. 
 So far, therefore, as appears from the above statement of the 
 case, A still remains liable. 
 
 54. A makes a note to B, who indorses it and gives it to C. A 
 does not live in the State, and B, his partner in business, pays the in- 
 terest on the note to C, charging A's account with the interest. Will 
 vou please inform me (the note is now overdue) if there is any danger 
 of its being shut out by hmitation, notwithstanding the interest being 
 promptly paid upon it ? Can B still be held as an indorser ? 
 
 A. In this State the indorsement of the interest on the note 
 
NOTES. 
 
 377 
 
 by autliority of the debtor takes the note out of the statutes of 
 limitations, and a payment of interest stops the running of the 
 statute against the surety as well as the principal. If B received 
 due notice of non-payment at the date of the note's maturity, 
 both he and his principal are held by his continued payment of 
 interest under the authority of and by consent of the maker. 
 
 55. A gives B his (A's) note to his own order in settlement of 
 merchandise bought. This note is stolen by C, and immediately the 
 loss is discovered by B, who advertises the fact in the papers. After 
 the announcement of the loss D buys the note in the open market from 
 C. Now who loses the value of the note, D or B ? 
 
 A. The note is good in D's hands if he bought in good faith 
 without notice. The advertisement in the paper, if D has not 
 seen it, is not a sufficient notice to bar D's recovery, although it 
 may raise the question whether he exercised due diligence. The 
 notice must be in some way brought home to him before he can 
 be non-suited in Ins claim for payment. 
 
 56. A legal friend says that it is law, if I make a note due 12 
 months after date drawing 10 per cent, interest per annum, that I can 
 only collect the 10 per cent, for that 12 months; in ocher words, if 
 the note lapses any length of time I can only collect legal rates of our 
 State for the lapsed time — my friend claiming the note should read 10 
 per cent, per annum until paid. 
 
 A. The statement is correct, for the reason that the amount 
 of interest payable after the note falls due is a matter of law and 
 not of contract, the contract being only for one year, and 10 per 
 cent, interest is only collectible where expressly stipulated and 
 for the period stipulated. 
 
 57. State when a note matured, drawn November 30, 1878, at four 
 months. 
 
 A. The rule is : A note due in one or more months from 
 date matures on the corresponding day of the month up to which 
 it is reckoned, if there are so many days in that month, but if not 
 so many, it then matures on the last day of the said month, to 
 which tlie usual grace must be added. Thus a note dated Nov. 
 30, 1878, at four months, matures Marcli 30th, and is payable, 
 witli grace April 2d. If dated November 28th, 29tli, or 30tli, 
 1878, at three months, it falls due February 28th, 1879, and is 
 
378 
 
 NOTES. 
 
 payable Marcli Sd, all three of these dates making the note due 
 on the same day. A note at two months dated either December 
 28th, 29th, 30th, or 31st, 1878, will mature February 28th, 1879, 
 and eacli of them will be payable Marcli 3d ; there being no day 
 in February, 1879, later than 28th, all notes reckoned up to that 
 month and bearing date of the 28th, or after, mature on the 28th 
 and are payable thi^ee days after. 
 
 58. Will you state what is the law and custom of counting time 
 on notes payable, say, 4 months after date ? Is it counted from the 
 day it is given to the same day in the month it falls due, or, is it count- 
 ed by days, counting 30 days to the month ? 
 
 A. In this State it is usury to reckon full months as 30 days 
 each, that being at the rate of a year's interest for 3G0 days. 
 The law requires all full months to be reckoned as such (from 
 the date in one month to the same date in the next) whether 
 longer or shorter ; then the grace or other odd days are computed 
 as each one-thirtieth of a month. This gives at the rate of 365 
 days to the year for the full months, and at the rate of 360 days 
 for any period less than a month. It is a custom with many 
 merchants (and not a few banks adopt the same reckoning) to 
 find how many days there are in the time the note has to run, to 
 divide these by 30, reckoning the quotient as so many full 
 months, and tlie remainder as each onc-tinrtieth of the month. 
 This is an overcharge, as it takes twelve months' interest for 360 
 days, six months' interest for 180 days, and three months' inter- 
 est for 90 days. A note is dated December 1st at two months. 
 It is entitled to one-sixth of the year's interest for the two 
 months, and to 3-360ths of the same for the three days' grace ; 
 but by the false system of reckoning the two months (62 days) 
 as two months and two days the interest will be calculated as 
 one-sixth and 5-360ths of the year respectively, making a clear 
 extortion of the two days' interest on a two montlis' note running 
 through long months, and of six days on every year's account. 
 
 59. Is a promissory note signed under seal negotiable, or can the 
 indorsers be held liable for payment of same in case of the failure of 
 the maker ? If it is not negotiable will you please give reason ? 
 
 A. We answer in the words of a recent approved text writer : 
 
NOTES. 
 
 379 
 
 " The first requisite of a bill is, that it shall be an oioen letter of 
 directioii^ — and of a note that it shall be an open promise — for 
 the payment of money. By the term ' open ' is meant unsealed ; 
 and though the instrument possess all the other requisites of a 
 note, its character as a commercial instrument is destroyed, and 
 it becomes a covenant, governed by the rules affecting common 
 law securities, if it be sealed." — Daniels on Negotiable Instru- 
 ments, p. 27. 
 
 60. I sold to Z an invoice of merchandise amounting to $2,000, 
 in settlement of which I accepted his two notes of $1,000 each, payable 
 m two and four months respectively. The first note was protested for 
 non-payment, can I sue at my discretion at once for the total amount 
 of the above invoice, or whether I can sue for the protested note only, 
 and then wait for payment or protest of the other ? 
 
 A. We see nothing to prevent our correspondent from bring- 
 ing a suit for the original debt of -152,000, if he surrenders the 
 unpaid notes, or files them with the other papers before the 
 court. 
 
 61. A merchant sells a business note, through a note-broker to a 
 bank. The note is not paid at maturity, and maker turns out a bank- 
 rupt. The note was sold without recourse " or guaranty, or repre- 
 sentation. Now the bank asks repayment from the merchant, or suit 
 for damages, on ground of knowledge of the maker's rottenness ? 
 
 A. If the sellers knew positively that the makers of the 
 paper were bankrupt and the security worthless, and impose the 
 same upon the bank under such circumstances, an action will lie 
 for the recovery of the consideration. Parsons on Contracts, 
 vol. 1, pp. 550, 551. 
 
 62. A gives a note payable to B, not to order, for dollars. B 
 
 trades the note to C, but does not indorse it ; can C recover the amount 
 from A or not ? A claims the note was only payable to B and made 
 that way purposely to keep him from trading it and to put the public 
 on notice by its wording, [f B had indorsed the note over to C would 
 that transfer the title to C ? 
 
 A. Tlie note above described is not negotiable, and a third 
 party Avho takes it, even with the proper indorsement, holds it 
 subject to all the equities between the original payee and the 
 maker. He can only sue the maker in the name of the said 
 
380 
 
 NOTES. 
 
 payee, or as his assignee, and if the maker had a good set off, or 
 defense against B, tlie liolder C can collect it. Only negotiable 
 paper indorsed in blank passes title by possession, so that 
 whether B indorse it or not, C can only collect it in B's name. 
 
 63. 1. I hold a promit'sory note drawn by A, and feeling distrust- 
 ful of him, sell it to B, who owes A a runinng account. Can C use 
 that note as a set-off to his account with A ? 
 
 2. 1 hold a promissory note which has been protested. If 1 sell it 
 to B, can he use it as a set-off to his account with A ? 
 
 3. I hold A's note not yet due, but he has failed, and is trying to 
 effect a compromise with his creditors, and B knows this. If I now 
 sell the note to B, can he use it as a set-off to his account with A ? 
 
 4. I sell A a bill of goods on 30 days' time ; at the end of 30 days 
 I draw on him at 1 days' sight. The draft is accepted but goes to 
 protest. Can I sell that draft to B to use as a set-off to his account 
 with A ? 
 
 A. Only in the first case named can B rely on the obligation 
 as a set-off against his debt to A. It is a general rule tliat the 
 purchaser of overdue and protested paper takes it subject to the 
 equities between the original parties. There are exceptions to 
 this, but it is the prevalent requirement. 
 
 64. B indorses a bank note for C , the note falls due, C does not 
 pay and is notoriously in failing circumstances. B with a view to make 
 him pay, offers to indorse a larger note on consideration that C takes 
 up the first note. C goes to the cashier, states that if he had the note 
 he could go to B and get a larger note indorsed. The cashier makes a 
 copy of the note, saying on the back of it if the original is not re- 
 turned within three days the copy must be paid, and gives the note to 
 C, retaining the copy himself. C goes to B, and says he has taken up 
 the note, hands it to B, who takes the note and takes off his name, and 
 puts it in his pocket, and then refuses to put his name to the new note. 
 "Was the cashier right in giving the note to C ? Was B right in de- 
 stroying the note ? Could the bank hold B for the payment of the 
 note ? 
 
 A. If the note was duly protested for non-payment on the 
 day it was due, and notice sent to the indorser, we think that 
 the bank, under the circumstances, can still collect the amount 
 of him, notwithstanding the original was destroyed. But if not 
 ])resented for payment and duly protested, then B, if only a sim- 
 ple indorser, could not be made to pay even if the bank held the 
 note. 
 
NOTES. 
 
 381 
 
 65. A. B. draws from Montreal at 60 days on Hcatherston & Co., 
 New York city, in favor of a Canadian bank, who forward the draft 
 to their New York correspondents for procuring acceptance and collec- 
 tion when due. These finding no trace of such a firm in the city, with- 
 out delay present the bill to Hotherston & Co., who accept the same. 
 Now, is this acceptance by Hotherston & Co. binding on them ? And 
 does the omission to protest, when drawees could not be found, release 
 the drawer and indorsers ? 
 
 A. The bolder of a bill who presents it for acceptance has a 
 right to insist that the acceptance shall be absolute, uncondi- 
 tional, and in conformity to the tenor of the document. If with- 
 out instructions he takes any other, he takes it entirely at his 
 own risk. If the acceptance contains any qualifications what- 
 ever, or the signature varies in any manner from the address 
 upon the bill, the holder may protest for his own protection and 
 notify all the antecedent parties. If they acquiesce in the con- 
 dition or variation, he is then clear, and no harm is done. 
 
 1. In the case above cited, the New York correspondents are 
 responsible for any loss or damage which may occur in conse- 
 quence of the acceptance under a different name if that proves 
 to be erroneous. 
 
 2. The acceptors are bound by the resulting consequences of 
 their signature, even if they accepted under an erroneous im- 
 pression. Thus far as to what has been done, but as to what 
 should have been done, our advice in such a case is this : When 
 no drawee can be found to accept according to the exact tenor 
 of the instrument, let a protest be prepared by the holder, and 
 notice of the fact be sent to all of the parties interested, together 
 w^ith a statement that no one being found to accept for Hcather- 
 ston k Co., a firm called Hotherston & Co., who may have been 
 intended, have accepted for the honor of the drawer. This 
 covers all the chances, and will do no harm to any one, nor leave 
 any unpleasant responsibility upon the collecting agents. 
 
 PROTEST. 
 
 66. A note dated Augusta, Ga., one month after date to the order 
 of Jones & Jones (with interest from date) and indorsed by Jones & 
 Jones with no place named for payment, is necessary to protest the 
 note at maturity of the same in order to hold the indorsers. The 
 holder of the note resides out of this State. How would it be if the 
 indorsers owned an interest m the property for which the note was 
 given ? 
 
382 
 
 NOTES. 
 
 A. Tlic omission of the place where the note is payable will 
 make no difference about the protest. A notice of non-payment 
 must be served upon the indorsers, if they can be found, in order 
 to hold them. 
 
 67. Under any circumstances will notice of protest after maturity, 
 hold indorsers of a note if it is shown that failure to present at maturity 
 was owing to no neglect of the holder ? 
 
 A. There are certain sufficient excuses for the non-presenta- 
 tion of a note at its maturity. These are classed as : 1. Inevitable 
 accident, or overwhelming calamity. 2. The prevalence of ma- 
 lignant disease which suspends the ordinary operations of busi- 
 ness. 3. The vis major (presence of political circumstances 
 amounting to a virtual interruption and obstruction of trade). 
 4. The breaking out of war between the country of the maker 
 and the country of the holder. 5. The occupation of the country 
 where the ]^artics live or the note is payable by the public enemy. 
 6. Public and positive interdiction and prohibitions of the State, 
 which obstruct or suspend commerce. 7. The utter impractica- 
 bility of finding the maker or ascertaining his residence. 
 
 There are also certain special reasons for non-presentation 
 which operate as an excuse in particular cases. The holder who 
 received from an indorser the note too late for presentation is 
 excused as far as that indorser is concerned. 
 
 AVhere a note is an accommodation made for the benefit of a 
 particular indorser who is to pay it, it need not be presented to 
 such maker to hold that indorser, the latter being in reality the 
 one who is to pay the note. 
 
 Also where there is an express waiver of presentation on the 
 instrument itself, all parties who signed after this waiver are 
 held without presentation. 
 
 But the death or insolvency of the maker is no sufficient ex- 
 cuse for non-presentation at his place of business, or wherever 
 the note is payable. 
 
 68. A notary goes to a bank after bank hours to demand payment 
 of a note, finds the bank closed, and no one there of whom to make 
 the demand. Afterward, during the evening, he meets the cashier, 
 teller or book-keeper on the street, or at his residence, and makes the 
 demand. Is the demand under such circumstances legal ? 
 
NOTES, 
 
 383 
 
 A. If tlic note was payable at the bank, a protest under such 
 circumstances would not be legal, unless the officer of the bank 
 consented to represent the institution and receive the demand, 
 and was enabled intelligently to reply that the maker of the note 
 had no funds in the bank to meet the obligation. 
 
 69. A note made payable in New York city is presented on the 
 day it is due at five minutes past 10 a. m., for payment. The bank 
 having no funds in its possession to meet it, refuses to pay. Can the 
 note be protested immediately, or has the party holding it to wait until 
 3 o'clock p. M. 
 
 A. The note, can be protested immediately, and no further 
 presentation need be made ; but if the maker can find the holder 
 at any time before three o'clock, and offer him the face of the 
 note in legal tenders, he can save the cost of protest, since he is 
 bound to accept it. If not made payable at bank he can tender 
 the money and save the protest, at any time during the day. 
 
 70. C has a note indorsed by D discounted at the E bank and pay- 
 able at the F bank, where C keeps his account. Some time before the 
 note is due C fails. At its maturity the E bank sends it to the F bank 
 for collection. At about noon that day, D, the indorser, appeared at 
 the F bank and demanded the note, offering payment, but the teller of 
 the F bank replied that the note had been returned to the E bank and 
 further remarking that C's account was closed. Question : Could the 
 note be protested and D held, payment not having been refused, and if 
 not protested could the indorser D be held ? 
 
 A. The note can be protested, and D held for its payment as 
 well as the costs of protest. If instead of a demand for the note 
 D had tendered the money, he could not be held afterward for 
 the costs of protest. 
 
 USURY. 
 
 7 1 . What is the law in the following case ? A gives an accom- 
 modation note to B, the latter sells it to C at 18 per cent, per annum. 
 C has this note discounted in his bank. Before the note becomes due 
 B fails, and the bank asks A for the amount due, which is refused on 
 the plea of usury. Can A be sued with success ? 
 
 A. If C knew that the note was accommodation paper, and 
 not good against A in B's hand, the plea of usury would be suc- 
 cessful. It has also been held in this State, (N. Y.,) in several 
 cases (Powell v. Waters, 8 Cow., 669, affirming the same in 17 
 Johns, 176), that if C did not know the facts, yet the note hav- 
 
384 
 
 NOTES. 
 
 iiig no pre-existing vitality, C takes it at a usurious rate at his 
 peril, and no breath of life can be imparted to it by that transac- 
 tion. The courts in most of the States, however, make a distinc- 
 tion between the two cases ; if the third party does not know it 
 to be accommodation, they hold he ought to recover, and any 
 one receiving title from him would of course have the same 
 right. 
 
 72. 1. Suppose Smith sells his note to Jones, a broker, at a usuri- 
 ous rate ; Clark buys the note in good faith at a discount exceeding the 
 legal rate, supposing the note at its inception was not usurious. Can 
 Smith set up successfully m New York State the defense of usury 
 against Clark ? If so, in case Clark had bought the note at the legal 
 rate, would his claim have been any better ? 
 
 A. 1. The rule in regard to usury is that a note once tainted 
 is always tainted, but once good is always good. If Jones takes 
 the note at a legal rate it is good in his hands ; if either Jones 
 or the maker himself afterward sells it at more than the legal 
 rate of interest, it is not affected, and the holder can recover. 
 
 73. A gives B a note for $625.70 at 60 days. B indorses it and 
 offers it to C at a discount of 2 per cent, per month. Will C be safe if 
 he buys it, and can he recover from A or B at his option ? 
 
 A. If the note is a hona-fide obligation in the hands of B be- 
 fore he sells it to C, then no matter how great the discount at 
 which the latter takes it, the note is a valid claim against 
 both A & B. But if A lends his note to B, and the latter has 
 given nothing for it, then the sale to C, which first renders it 
 binding on A, must be made at legal rates, or A has the defense 
 of usury. After a note is binding on the maker, it may be sold 
 at any rate, but the transfer which first renders it a valid claim 
 against him must not be at usurious rates. 
 
 74. A capitalist in Massachusetts is in the habit of purchasing 
 business paper of James, a note broker in this city. In the fall of 
 1872, when money was dear, he bought of James $20,000 of stock 
 notes, secured by shares of a stock concern in this city. Prime indorsed 
 paper was selling at the time for 1 5 to 1 8 per cent, per annum, and 
 he took these stock notes at 12 per cent., James assuring him that they 
 were business paper. It appears that Jones, the maker of the notes, 
 had authorized James, the note broker, to buy the shares of stock and 
 advance the money, holding the shares as security. The market after- 
 ward became depressed, the shares which were purchased at par went 
 
NOTES. 
 
 385 
 
 down to 90, and money being dearer it was not so easy to carry them. 
 Jones could not pay up, and he gave his notes to James to cover the 
 amount, the latter to sell them and to credit his account w^ith the pro- 
 ceeds. These were the notes which James sold as business paper. 
 When the paper matured, Jones refused to pay, put in the plea of 
 usury, and obtained an injunction to prevent the transfer of the collat- 
 erals. Our correspondent wishes to know if the plea will stand in the 
 courts. 
 
 A. We reply that it will depend upon tlie proof of the main 
 fact that Jones gave James the note for a debt actually due him, 
 he having advanced money to buy the stock, and that before 
 James sold the notes to the capitalist they were a valid claim 
 against the maker. This being proved, Jones's cunning and 
 roguish plea to evade his obligations will be of no avail to him. 
 If Jones merely left a lot of notes in the hands of James to be 
 sold for the simple purpose of raising money, the notes being 
 worthless until passed to a third person, and they were then sold 
 to another at more than 6 per cent., the plea of usury will render 
 them void. But if Jones actually owed James, and gave him 
 the notes on that account, it will make no difference that the 
 maker knew the holder would sell them at a discount, they are 
 a valid obligation. But the plea, even if successful, will not save 
 Jones from paying the money. If the notes are pronounced void, 
 then the credit to Jones' account is void also, and James can 
 sue Jones and recover the amount he owes for the purchase of 
 the stocks. But we feel certain, if we understand the proof to 
 be offered, that Jones can be compelled to recognize the validity 
 of these obligations. 
 
 MISCELLANEOUS. 
 
 75. Ct. — If a note is made and dated on Sunday for value received, 
 
 can it be collected the same as if made on a week day ? 
 
 A. A note made on any other day and dated on Sunday, is 
 good : but a note made and delivered on Sunday for a secular 
 account, or for work not allowed on that day, would not be col- 
 lectible in the Connecticut courts. Its delivery or acknowledg- 
 ment on a week day, however, would give it a legal character. 
 
 76. Ky. — Please inform a reader whether under the laws of the 
 state of Kentucky the following note sent to a bank for collection, is 
 protestable for non-payment : 
 
 25 
 
386 
 
 NOTES. 
 
 JiMTOWN, October 10, 1878. 
 Twelve months after date I promise to pay to the order of Jno. Jones Thirty^ 
 nine Dollars, value received. Tom Smith. 
 
 1 understand that notes made negotiable and payable in and dis- 
 counted by an Incorporated bank in Kentucky, are placed on the foot- 
 ing of bills of exchange, but not plain notes of hand, as above. 
 
 A. Our correspondent is right in his understanding as to the 
 class of notes on which the laws of Kentucky make protests ob- 
 ligatory. The note above recited does not belong to the class. 
 There is a Kentucky decision, however, which permits protest to 
 be made on obligations of that sort, for example, an indorsed 
 certificate of deposit. (Finer v. Clary, 17 B. Mon., 645.) And 
 all obligations of this character may be protested if the holder 
 desires it. At any rate due notice of non-payment should be 
 sent to iudorsers. 
 
 77, Pa. — The Supreme Court of Pennsylvania decided to the 
 effect that a note printed for the past decades, tlius 187- and filled up 
 ■during the present year, the 7 altered to 8, is invalid. 
 
 A. The Pennsylvania Supreme Court has repeatedly held that 
 ;aiiy alteration in a bill or note will avoid it, unless the alteration 
 is .shown to have been made before delivery. In three cases 
 (Paine v. Edsall, 7 Harris, 180 ; Miller v. Gilleland, Id., 122, and 
 Heffner v. Wenrich, 32 Pa. St., 423) the Court applied this doc- 
 trine to an apparent alteration in the date. The change of a 
 printed figure by writing over it another falls clearly within the 
 rule requiring an explanation of the alteration. In the last of 
 the above mentioned cases the Court observed : " He who takes 
 a blemished bill or note takes it with all its imperfections on its 
 head. The very fact that he received it is presumptive evidence 
 that it was unaltered at the time." We know of no decision 
 which holds an instrument invalidated by the alteration of a 
 'figure without being contested on that ground, but an alteration 
 of date being alleged in defense, the holder would be bound to 
 show that it had been made before it left the maker's hands, and 
 this we consider in accordance not merely with the Pennsylvania 
 decisions, but with commercial law everywhere. 
 
 78. Pa. — Will you kindly explain the operation of the law in re- 
 gard to judgment notes and mortgages in the State of Pennsylvania ? 
 
PARTNERSHIP, 
 
 387 
 
 A. The Pennsylvania practice of making notes containing a 
 warrant to confess judgment, iias the strong recommendation of 
 enabling the holder to collect his debt when due without the ex- 
 pense of a law suit ; but it also appears to be a convenient in- 
 strument by which to defraud other creditors. A man's property 
 may be wholly covered by a judgment note, of which no record 
 exists, and credit may be given him on the strength of his ap- 
 parent means, which, before the credit expires, may be wholly 
 taken from him, collusively, by the simple entry of judgment 
 with a prothonotary. The means of punishing the fraudulent 
 debtor for this fraud seems deficient, owing to the state of proof 
 required under the statute making the deceit a crime. The first 
 and best and only effectual remedy is to give credit to none but 
 men of established integrity ; but if there is any doubt on this 
 point, it would be well to require written representations, con- 
 taining a special guaranty that the buyer has no judgment notes 
 or mortgages out. 
 
 79. "W". Va. — A note non-negotiable under the laws of West Vir- 
 gina, but negotiable under the laws of Ohio, is executed in West Vir- 
 ginia and delivered to the payee, who resides in Ohio. The payee 
 transfers it by indorsement in blank, the holder deposits it in his bank 
 in Ohio which transmits to West Virginia bank for collection. The 
 collecting bank does not protest, holding that West Virginia laws gov- 
 ern in the case, and being non-negotiable, that protest is unnecessary 
 to hold the indorser. Should it have been protested to hold Ohio in- 
 dorser ? Please give authorities. 
 
 A. Where a contract is made in one State to be performed in 
 another, the law of the latter would govern as to presentation 
 and protest ; but this note was made in West Virginia and to be 
 paid in the same State, hence the laws of that State govern, and 
 the non-negotiable note need not be protested to hold the in- 
 dorser. Daniel on Negotiable Instruments, vol. I, pp. 657, 658. 
 
 PARTNERSHIP. 
 
 CAPITAL. 
 
 1, A and B have a store in Chicago with a capital of $50,000. A 
 is also a general partner with C in New York, and the capital of this 
 firm IS $100,000. B has no interest in the New York firm, and C has 
 none in the Chicago store. The Chicago firm becomes insolvent. It 
 
388 
 
 PARTXERSHIP. 
 
 is claimed that every creditor of the New York firm is entitled to be 
 paid in full, before any creditor of the Chicago house can collect from 
 the New York firm. 
 
 A. Partnership property must first be applied to partnership 
 debts ; if any surplus remains after selling about enough to 
 cover the debts of the New York firm, then A's share or interest 
 in that surplus can be taken and applied to the debts owing the 
 Chicago firm. All that can be claimed by the creditors of the 
 latter of the New York house is A's interest in what remains 
 after the partnership debts are covered. 
 
 2. The junior member of the firm is charged with the financial 
 administration, keepmg the cash, accounts, etc. Recently lie had just 
 prepared his deposit for the bank, and was leaving the office to make 
 the deposit, when customer came in and handed liim $50 in bills. 
 On reaching the bank he went to a desk to alter the item of bank bills 
 in the deposit slip to correspond with mcreased amount of same, but 
 on searching for the money found that the $50 had disappeared, his 
 pocket having been probably picked while gazing at the newspaper bul- 
 letin. The senior partner contends that the money should be charged 
 to the personal account of the junior partner ; the latter, however, 
 claims it should be passed to profit and loss account. Which claim is 
 correct ? 
 
 A. This is not the personal loss of the partner unless he was 
 culpably careless, and may be charged as the loss of the firm. 
 
 3. A, stockholder, accepts an order from B for certain stock, with 
 security to a certain percentage. Upon the declining of stock, which 
 forfeits the security, A notifies B either to give more collateral or else 
 he would sell out to protect himself. B advises to carry and gives col- 
 lateral, and so on in three or four more instances. On one occasion, B 
 being unable to procure more security, as the stocks are constantly 
 falling, he gives verbal assurance to A to hold on, as he had ample 
 means to cover any deficiency that might result, if the stock did not 
 recover. To this A consents, until the margin becoming too great, he 
 presses B to make good the difference, which he is unable to do. B is 
 in business with C, and represents two-thirds of the capital and C the 
 other third. Their joint capital is sufficient for their liabilities, but if 
 the law entitles A to seize upon the two-thirds of the business capital 
 of B, C will be unable to meet his obligations. The right of A to sell 
 in the moment the security ceases, does it not constitute an error if he 
 takes no advantage of it, and in the sense of the law will the unsecured 
 margin be considered as a debt ? 
 
 A. A is not obliged to sell, and he has a good claim against 
 B for the deficiency, but he cannot seize the partnership property 
 
PARTNERSHIP. 
 
 389 
 
 of B & C for the private debts of either partner; and if judg- 
 ment is obtained and execution is issued against B's estate, the 
 partnership debts of B & C must first be provided for, before 
 there is any surphis that can be applied to satisfy this execution. 
 
 4. Two friends of ours, A & B, formed a copartnership with equal 
 capital a year ago, and agreed that A in consequence of having previ- 
 ously estabhshed a business, should receive three-fifths and B two-fifths 
 of the profits. They both spend their whole time working for thd 
 business, and draw out from time to time, for Hving purposes, certain 
 sums of money; without having specified in their agreement the amount 
 that each shall draw for such purposes, or that they shall draw any. 
 The question arises : Should the store be charged with a certain sum 
 for services rendered, amount of which they can agree upon, before 
 counting profits ? or wanting any arrangement, should the amount 
 drawn be charged to each individual account, and their services go to 
 increase amount of profits ? 
 
 A. No partner in a house can charge for his services ordinary 
 or extraordinary. What each draws will stand to his debit, to 
 be offset only by profits passed to his credit when any are di- 
 vided. 
 
 5. Suppose four persons associated as partners in mercantile busi- 
 ness, each having a different interest (say A 55 per cent., B 20 per 
 cent., C 15 per cent., and D 10 per cent ), purchase real estate in this 
 city, (N. Y..) and receive deeds in the firm's name without regard to 
 partner's interest, would the property be considered as belonging one- 
 fourth to each person, or in proportion to the partnership interest ? 
 
 A. They would own in the real estate precisely as in all other 
 property belonging to the firm, only their respective interests. 
 
 6. Suppose one partner of a concern is in debt to the firm over and 
 above his right to draw money, said party being responsible, how can 
 said indebtedness be collected without dividing the firm ? Can one 
 party of a firm be sued by another member of said firm ? Could the 
 claim be assigned to a third party and collected by him ? 
 
 • A. An application may be made by a suit in equity to compel 
 a partner to make good a deficit in his account, but an action at 
 law, as a general rule, cannot be maintained against one partner 
 by another until a final accounting is made of the partnercliip 
 concerns, although an exception was once made in Massachusetts, 
 where the debt was entirely separate from the partnership busi- 
 ness. Nor could such a claim be assigned for the purpose of 
 
390 
 
 PARTNERSHIP. 
 
 giving the right of action. There is no question but what the 
 partner has a legal remedy, but exactly in what form we could 
 not decide without further particulars. 
 
 7. A friend of mine had charge of a good paying factory. When 
 
 his employer concluded to get out of business, he and myself agreed to 
 buy machinery, form a stock company and continue business. To 
 facilitate matters I gave a six months' note for $6,000, in favor of my 
 friend, who had the same discounted in bank, proceeds being placed to 
 credit of his individual account. I received a receipt for 60 shares at 
 $100, signed by him as agent of this factory, to be exchanged for cer- 
 tificate when ready. It was understood that I would furnish $4,000 
 in addition as soon as incorporation papers were obtained. Through 
 my influence I interested another party who furnishes $50,000 cash; 
 but instead of sticking to the first plan, this party and my friend form 
 a private firm, excluding me from their arrangement. Can my note 
 be forced on me for payment when due ? And can I make my friend 
 responsible for damages sustained "by being cheated out of the pros- 
 pective profits of this factory ? 
 
 A. Prospective profits cannot be reckoned in the claim for 
 damages. But if the factory, etc., were actually purchased partly 
 with the capital, and for the interest of our correspondent, he 
 cannot be excluded against his consent. He will be obliged to 
 pay his note any way. 
 
 8. A & B form copartnership for manufacturing purposes. A puts 
 in $10,000 ; B puts in $4,000, his machinery costing $3,000, and his 
 knowledge of the trade ; share and share alike in the profits. Nothing 
 being satd about interest in partnership papers, would not A be credited 
 with interest on his $10,000, and B with interest on cost of machinery 
 and S4,000, to be deducted from the profits ? 
 
 A. If nothing was said about interest, the fair inference 
 would be, under the circumstances, that the investments were to 
 offset each other, and no reckoning be made of capital on either 
 side. B's " knowledge of the trade " is quoted as part of the 
 capital, and it may have paid a better interest than the money. 
 
 DISSOLUTION, LIQUIDATION, WITHDRAWAL. 
 
 9. A and B partners, dissolve their partnership and authorize A 
 to settle all accounts and to use the name of the firm for such purpose. 
 B makes an assignment to C ; C then asks A to collect debts, etc., the 
 same as by partnership agreements. Can A in settling accounts due 
 the firm take two notes for each account, one payable to himself and 
 the other one half payable to C, and not render himself hable ? 
 
PARTNERSHIP. 
 
 391 
 
 A. We see no objection to this mode of settlement, though if 
 B's note should remain unpaid, and A's should be collected, the 
 latter probably could not retain more than half, unless B's as- 
 signee definitely accepted the note as absolute payment pro tanto, 
 and not merely as a security. 
 
 10. A and B form a private partnership, and business is transacted 
 for ten years solely in the name of A. The firm dissolves and B re- 
 tires. Neither partnership nor dissolution was advertised. A then 
 forms a partnership with C, continuing the same business, under the 
 firm name of A & Co. This latter partnership was not advertised ex- 
 cept by signs upon the building, and with partner's names and the 
 firm's also printed upon all letter sheets and bill-heads. 
 
 Is this continuous notice a sufficient protection for B against respon- 
 sibility for all transactions of the new firm ? If not, what would you 
 recommend ? 
 
 A. If B was not known as a partner, either to the public or 
 to any one doing business with the concern, he cannot be held 
 liable after the dissolution. But every one who knew that at one 
 time B was a partner, has a right to a notice that he has with- 
 drawn from the firm, and if no responsible notice is given, may 
 recover from him for any credit given to the firm on account of 
 his supposed connection with it. In the latter case, if no formal 
 dissolution is desirable, B can advertise four or five consecutive 
 days that he is no longer interested in a certain firm or business, 
 and a copy of this should be sent to any out-of-town or distant 
 correspondent likely to trust the firm on his account. Not long 
 since we recommended this to a retiring member of a firm en- 
 gaged in the lumber trade, but he was persuaded that it was an 
 excess of caution, as his name had never appeared in the title of 
 the firm, and he did not heed the advice. A dealer in Canada 
 who had known the young man's father, sold the firm, after he 
 retired, about 812,000 worth of lumber. The new firm failed, 
 the debt was not paid, and our retiring friend had the $12,000 to 
 pay, the Canada dealer making oath, no doubt honestly, that he 
 supposed the young man was still a partner in the new house, 
 and would not else have granted the credit. Changes in part- 
 nerships are not published as fully as they ought to be ; and the 
 commercial newspapers do not deal with the neglect as they 
 should, for fear, we suppose, that they may be charged with 
 mercenary motives. 
 
392 
 
 PARTNERSHIP. 
 
 1 1 . How many consecutive advertisements are required to announce 
 the dissolution or a special partnership ? and if the same must be in- 
 serted in a paper published in the city or town where the business was 
 carried on, in this State (N. Y.) ? If no daily is published there, will 
 a weekly or semi-weekly meet the requirements of the law ? 
 
 A. The statute of New York provides that no dissolution of a 
 special partnership by the acts of the parties shall take effect 
 previous to the time specified in the certificate of its formation 
 or renewal, until a notice of such dissolution shall be filed and 
 recorded in the clerk's office in which the original certificate was 
 recorded, and published once £ week for four successive weeks 
 in a newspaper printed in each ot the counties where the part- 
 nership may have places of business, and in the State paper. 
 
 12. A and B, merchants of this city, formed a partnership with 
 Jones of Baltimore, wine a has been conducted under his name — the 
 partnership being never advertised. This agreement expired on 30th 
 of June last. Will an announcement by Jones, that he is again doing 
 business m his own name be sufficient to protect A and B from any re- 
 sponsibility in his future operations ? 
 
 A. It will not be sufficient protection. Every man who knew 
 that A and B were partners in the house has a right to assume 
 that they continue such until full notice is given of their with- 
 drawal. 
 
 13. A and B (holders) form a co-partnership for manufacturing 
 purposes. They borrow capital from relatives ; after becoming some- 
 what involved, they secure by a chiiy'tel mortgage on machinery, 
 etc. After being in business for a ^ime A withdraws from the firm, 
 and fails to give notice of dissolution, .md B continues under the firm 
 name. 
 
 Can A be held responsible for debts contracted in the firm name, 
 after the dissolution had taken place ? 
 
 Can B be proceeded against for fraud in using the firm name and 
 obtaining credit thereby, if Ac concern should prove to have been in- 
 solvent at the time A went out ? 
 
 A. A can be held for all debts contracted in the name of the 
 firm until he gives notice of the dissolution. 
 
 The law in this State provides a penalty for carrying on busi- 
 ness in the name of a company where no partner is represented 
 by it, unless certain legal forms are observea in its continuance ; 
 but as both partners are li^ld to pu-bL until notice of the 
 dissolution is given, this might not apply \Ji the case described. 
 
PARTNERSHIP. 
 
 398 
 
 14. A and B's co-partnership expired March 31 by limitation. 
 They have settled up the business between them with the exception of 
 their respective rights as to an invoice dated in Europe April 3, which 
 was for a contract made through a New York agent, C, for ac- 
 count of the old firm. Said invoice is still in transit, comprising 
 some very desirable raw materials, and is claimed by both A and B, 
 who are rivals and continue in the same line of business. A's in- 
 terest in the old firm was three quarters, B's one quarter. C is now 
 agent for B since April I. What disposition should C make of the 
 above invoice whether same should be sold at auction or otherwise to 
 hio^hest bidder, and profit and loss divided pro rata as to above interests, 
 or should he recover the goods pro rata to above interests, and should 
 C require the written consent of both or either party, or has he discre- 
 tion or power in the matter ? The old firm has paid nothing to C on 
 account of above invoice. A continues his business under the old firm 
 name, and B under another. 
 
 A. C has the legal right under the circumstances to refuse 
 delivery to either party. The equitable way is for A and B to 
 agree, or to abide by a decision of a referee. Failing thus, C 
 may divide the invoice between the parties, if they will consent 
 to receive it in this way, as he may deem just and proper. 
 
 15. On dissolution of partnerships, how many papers must the 
 notice be placed in, and for what period, to comply with the law ? 
 
 A. There is no law requiring any notice to be published. 
 The law leaves it to the parties who are chiefly interested to give 
 such publicity as will relieve themselves from further and future 
 liability in case the partnership name should be used in the crea- 
 tion of fresh obligations. It is regarded as sufficient notice to 
 strangers to insert the facts of dissolution in two or more papers 
 from three to five times ; but to save himself absolutely from 
 further liability, the retiring partner should see that a written or 
 printed notice is mailed to every creditor of the old house, likely 
 to be called on to furnish goods or materials on a new credit. 
 
 16. A. B, and C commence business, A furnished $2.", 000 capital, 
 B S'"^-000. C none. A's proportion of the profit or losses is 60 per cent., 
 B's 25 per cent., C's 15 per cent. At the expiration of the term of co- 
 partnership. C is indebted to the business to the amount of 88,000, 
 and has no financial responsibility, while the amount to the credit of B 
 is but 81,000. In the settlement between A and B to what extent is 
 B liable to A for the indebtedness of C ? and where his proportion ex- 
 ceeds the amount of his credit in the business, can A look to him to 
 make it good out of his private funds ? 
 
394 
 
 PARTNERSHIP. 
 
 A. B is bound to make good the loss of the firm by C in the 
 proportion of his contract, and his share of it is 82,353. He 
 must, therefore, besides the |1,000 to his credit, pay in from his 
 private funds the sum of 81,353. 
 
 17. A and B form a copartnership for three years, A putting in 
 $40,000 cash, on which he is to receive 7 per cent, interest per annum. 
 B, who is the business man, puts in no capital but his ability as off-set 
 to A's capital. At the expiration of three years no new papers are 
 made, but the concern is understood to go on upon the same basis. At 
 the end of five years they propose to wind up the concern and divide 
 the assets. Their capital account stands, A, $80,000 ; B, $40,000. A 
 now holds that before B can receive any of his $40,000 he (A) must 
 be paid $40,000 cash first, which he put in originally, and B contends 
 that the assets, $120,000, should be divided pro rata, that is, A to take 
 out $8,000 and B to take $4,000, as the assets are realized. Which 
 is correct ? 
 
 A. It makes no difference whether the money to tlie credit 
 of each is original capital or laid by from ascertained profits ; 
 the latter is as much entitled to a pro rata dividend as the 
 former. 
 
 18. A, N, & L were in- copartnership and did business for a num- 
 ber of years. L sold out his interest in the business to his partners 
 after a few years, the others continuing the same business, B, a cus- 
 tomer of the house when all three were in partnership, failed, com- 
 promised and went through bankruptcy, holds a receipt in full and his 
 account was balanced in the books of the concern, by profit and loss, 
 before L sold out. Now B comes up and pays to the still existing 
 firm the amount lost by him. Is the partner who sold out his interest 
 in the business entitled to that share of the money which he lost, or 
 are the remaining partners entitled to the whole amount ? 
 
 A. The remaining partners, having bought all the assets of 
 the old firm, are alone entitled to the payment. 
 
 19. A, B, C, D & E are partners in business having variable in- 
 terests. Through adversity the concern becomes insolvent. The ma- 
 jority of the partners, however, decide to struggle along, using their 
 credit in the hope of retrieving their fortunes. E dissents, and with- 
 draws from the concern in regular form, the remaining partners as- 
 suming all assets and liabilities. E forms new business connections, 
 and is successful. Can he be held liable for any debts of the old firm 
 if after his withdrawal it should become bankrupt ? 
 
 A. E is responsible for all debts contracted while he is a 
 member of the firm, but not for new contracts made after his 
 withdrawal, provided due notice of this dissolution was given. 
 
PARTNERSHIP. 
 
 395 
 
 20. A and B are in partnership in the cotton factorage and com- 
 mission business ; B is the managing partner and A resides in a dif- 
 ferent portion of the State. A sells out his interest to B, who assumes 
 all tlie liabilities of the firm and continues the business on his own ac- 
 count. Previous to the dissolution there was a shipment of a hundred 
 bales of cotton to D and C, which was drawn on to the full market value, 
 and ordered to be held. At the time of the dissolution there was 
 little or no loss on this venture. B continues to do business with C 
 and D, making shipments and remittances, during which there is a de- 
 cline in the market and a consequent loss of several thousand dollars 
 before the cotton is ordered sold. A is not informed of the loss nor 
 that he will be held for it. In the meantime A dies and B fails, leav- 
 ing the indebtedness still outstanding. C and D make claim against 
 the estate of A. Can they recover ? 
 
 A. This is a legal claim against the estate of A unless bar- 
 red by the statute of limitations. 
 
 21. A firm doing business m 1869 gave a demand note with in- 
 terest at usurious rate for borrowed money. In 1872 the firm was 
 dissolved, one member retiring. The business was continued under 
 the new firm name, the new firm agreeing to pay all obligations. 
 Notice of dissolution was given to the creditors and published in the 
 papers. Since the dissolution the holder of the note has periodically 
 presented it to the new firm for payment of interest, accepting and re- 
 ceipting the same from them up to the time of the firm's assignment 
 in 1878. Since failure the holder of the note presents it to the retiring 
 partner for payment, being the first information by the retiring mem- 
 ber of his obligation since dissolution. Can the holder of the note 
 now collect from the retiring member ? If so can the retiring mem- 
 ber plead as off-set usurious interest paid by the new firm ? 
 
 A. The contract was originally voidable for usury if any of 
 the debtors chose to make that plea. It is doubtful if the retir- 
 ing partner is not released any way by the statute of limitations. 
 
 22. A firm composed of four partners. A, B, C, and D, are about 
 to make a change. The capital invested by the respective parties is 
 about as follows : A and B $150,000 respectively, C $40,000, and D 
 $30,000. According to a partnership contract the profits or losses are 
 to be divided thus : D is to get 1-10, C 1-6, and A and B equal shares. 
 The assets of the concern consist partly of merchandise and partly of 
 outstanding accounts (the latter fully equal to all liabilities of the firm.) 
 B is about to retire from the firm, and the question at point is : Is B 
 to get his $150,000 in merchandise and book accounts according to the 
 interest he has in the business, or is he to get it pro rata to his capital 
 invested ? 
 
 A. B is entitled to whatever interest he has in the firm in 
 
396 ^ TXER SHIP. 
 
 cash on the settlement of the firm's estate. If the remaining 
 partners wish to continne the business, they may discharge his 
 interest in ^vhatever form of payment may be mutually accept- 
 able. 
 
 23. Suppose a partnership has existed between two parties, carry- 
 ing on a retail business, say a fancy or dry goods store. One partner 
 eventually sells out to the other, the retiring partner stipulating in 
 writing that he will not start again in that line of business m the same 
 city. In case the retired partner should, some months after dissolv- 
 ing partnership, open a store in the same city and in the same line of 
 business, would he not be liable to an action at law, and could his 
 former partner compel him to vacate the store ? 
 
 A. There is no doubt that such a contract is valid, and we 
 think may be enforced by injunction , that the injured partner 
 can compel the other to discontinue business in violation of the 
 contract, as well as recover damages for such violation. 
 
 24. Wc sell goods to a firm composed of two members, say to the 
 amount of $200 up to the time of one of the partners' retirement 
 from the firm, and say $100 after that time. The only way that we 
 are informed of the dissolution of the partnership is by an advertise- 
 ment to that effect in a daily paper. Before either bill is paid the 
 partner who continued the business fails and goes into bankruptcy. 
 We prove our whole claim against the estate and get a certain per- 
 centage, say 25 per cent, out of it. Can we put this payment toward 
 paying the last bill and sue the retiring partner for the full amount of 
 the purchases before he retired, or must we apply the payment pro rata 
 to the entire account and hold him liable only for the remaining per- 
 centage of the $200 ? We have never been asked to release the re- 
 tiring partner, or to consent to the remaining partner's assuming the 
 liabilities for him. 
 
 A. If the last sale was made before our correspondent liad 
 any notice of the dissolution, even by a sight of the advertise- 
 ment, he can collect the remainder of his claim against the former 
 partner if he is solvent. If he had, he can still collect tlie $200 
 of that retiring gentleman, unless he has been discharged in 
 bankruptcy. 
 
 25. A, B, and C, partners equally interested in a business, propose 
 dissolution, which will take place Ivlay 1. They have paid all the in- 
 debtedness of the firm. A hac a larger sum "to his credit as partnel 
 on the books of the concern than D or C, upon which he has been al- 
 lowed interest. A claims that this surplus capital to his credit should 
 
PARTNERSHIP. 
 
 397 
 
 be paid in cash before the merchandise on hand is equally divided be- 
 tween the partners, which is the plan of settlement agreed upon. 
 Is the claim of A just and right ? 
 
 A. There is no legal rule applicable to this case, and it is one 
 for mutual agreement. It would certainly seem equitable that 
 before the stock distribution began, the ledger interest of the 
 partners should be equalized. 
 
 FIRM NAME, 
 
 26. The firm of John Smith, consisting of J. S. only, transacting 
 business with foreign countries, desires to make John Doe a partner in 
 his business ; now, ic it necessary according uo the laws of this State, 
 (N. Y.,) to change the firm name to, nay, John Smith & Co. ? If not, 
 is John Doe's signature, signing " John Smith, ' valid ? 
 
 A. If John Smith is in business in his own name, he may 
 take in one or twenty partners without changing the name, and 
 all of them who are thus authorized, may sign "John Smith'' 
 to any form of contract. If John Smith is an old firm name, 
 perpetuated by some one else, according to the legal form author- 
 ized in the statute, then, also, new members may be admitted 
 with no change in the name, but the advertisement and other 
 requirements must in that case be repeated every time the mem- 
 bership is changed. 
 
 27. In the case of several persons joining together for business 
 purposes under the title of a company, which is neither chartered nor 
 incorporated, does a contract signed as the "company" hold responsi- 
 ble the various persons composing the same ? 
 
 A. A " company " of this character is nothing more than a 
 partnership of persons in interest. Any contract made by any 
 one of them by authority of the rest, or under an appearance of 
 authority which they have justified by their action or association, 
 will bind each and all of them to the full amount. 
 
 28. Smith, Brown & Co., having conducted business for the past 
 50 years, and all the partners being deceased, the executors close up 
 the business. After the lapse of a short time some of the employees 
 start business, and carry it on under the old firm's name of Smith, 
 Brown & Co., although none of them have that name. None of the 
 heirs of Smith, Brown & Co. object. Can they legally do so, contract 
 debts, sue and recover by law ? 
 
 A. The firm name may be continued in this State, (N. Y.,) 
 
398 
 
 PARTNERSHIP. 
 
 if none of the licirs or executors of the old firm object, hv any 
 of tlie " assigns or appointees " of the old company, on tlieir 
 complying with the terms of the law as to publication and filing 
 of the certificate. 
 
 29. A, B & Co. sell out their business to C. Can C use the old 
 firm's name so that A, B & Co. are not held responsible for any debts 
 contracted by C ; and does the mere publication of the transfer of the 
 old business by A, B & Co. to C, release the former from any liabili- 
 ties contracted by the latter ? 
 
 , A. If C becomes legally qualified to use the name of the old 
 firm (observing all the necessary forms of law), and all who 
 have ever done business with the house are notified by circular 
 or otherwise of the change, A and B would not be responsible 
 for debts afterward contracted by C carrying on business under 
 that name. 
 
 30. A, B, and C enter into a copartnership; is it any way conflict- 
 ing with the laws of this State, (N. Y.,) to do business under the name 
 of two of them, as A & B, or A & C, when they are all general part- 
 ners, and advertised as such ? 
 
 A. Either of the above is legal. The law of this State, (N. 
 Y.,) (except to continue a firm name under certain restrictions) 
 forbids one man attaching & Co. " to his name when no part- 
 ner is thereby represented ; and two or more partners having all 
 their names mentioned, are prohibited in the same way from 
 using the words " k Co. " after them. But the reverse process 
 is perfectly legal. Twenty partners may lawfully do business 
 under the name of " Jones, " or "Jones & Co."; or Jones, 
 Smith, and fifty others may lawfully transact business as Jones 
 & Smith, or Jones, Smith & Co., or use any other style or title 
 for the firm that does not present to the public more partners 
 than are interested. 
 
 31. A firm, say John Jones & Co., sells merchandise to different 
 parties ; can the debtors, after having discovered the fact that said 
 firm consists of only one member, instead of two or more, take advan- 
 tage of a certain State law and refuse to pay their just dues on account 
 of the above facts ? 
 
 A. The laws of this State, (X. Y.,) prohibit a person from 
 engaging in business (unless as a successor in a certain legal 
 
PARTXERSHIP. 
 
 399 
 
 form to some firm legally established) and attaching to his name 
 the words " & Co. " Avhere there is no otlier partner. We do 
 not see how John Jones & Co., (founded and carried on only by 
 John Jones) can bring a suit in court. Tlie names of the com- 
 plainants would be required, and this would disclose the fact that 
 he was doing business in defiance of the law. How could he 
 stand in court on such a complaint ? 
 
 32. A is going into business with B in this city (N". Y.). The lat- 
 ter, who is not a resident of this State, is to be a special partner only. 
 Since A is the general partner, can he do business alone under the 
 firm name of A & Company, that is can he (A) open a bank account, 
 bill goods sold by him, and accept time drafts drawn upon him for 
 merchandise consigned, under the signature of A & Company, without 
 making his special partner a general one ? I am under the impression 
 that if A accepts a time draft under the title of A & Company, it 
 makes the special B responsible as a general partner. 
 
 A. The act of 1866 allowed a special partnership to use the 
 name of one general partner and the words " and Company " to 
 represent the other general partner or partners, provided on some 
 conspicuous place outside the building where the business is con- 
 ducted, all the names of those interested in the firm are posted 
 up ; but this is limited to cases " where there are two or more 
 general partners. " One general partner can legally do it, and 
 there is a statute expressly forbidding one person to do business 
 with the words " and Company " attached to his name, under a 
 penalty not exceeding 81,000 for each offense. 
 
 MISCELLANEOUS. 
 
 33. A and B, equal partners, have done business many years to- 
 gether, with equal capital and profits. Of late the firm liave been run- 
 ning behind, and A has paid in several bequests, making his capital 
 amount to about $30,000 more than B's. The firm finally compromise 
 with the creditors, leaving a surplus of $10,000. Should this amount 
 be divided equally, pro rata, or should A take the whole amount, which 
 would not then make their capitals equal ? 
 
 A. Unless a different result is reached by mutual agreement 
 with reference to the greater sacrifices A has made, the assets 
 gained by a compromise will be shared by both partners alike. 
 The creditors have made this a gift to A and B alike, and both 
 are to share alike in the gain. 
 
400 
 
 PARTXERSHIP. 
 
 34. Smith, Wiggin, and Brown are copartners. The firm fails, as- 
 signs as a firm and each partner individually, and afterward com- 
 promises for 25 cents on the dollar. Both Wiggin and Brown owe the 
 firm on account, Wiggin contributes all his individual property toward 
 paying the firm's debts, but lacks paying bis proportion of the 25 per 
 cent. Brown owes the firm and has nothing to contribute. Smith 
 contributes from his personal estate what is required over and above 
 the firm assets to pay the 25 per cent., and gets up all the obligations. 
 Has Smith any legal claim on either Wiggin or Brown for what he 
 contributes from his personal estate ? 
 
 A. There does not appear to be any doubt that the payment 
 of a partnership debt which is still a subsisting obligation enti- 
 tles the payor to contribution from the other partners. An 
 action of account would, however, seem to be necessary in order 
 to enforce the right, and it is not a " legal " claim, in the tech- 
 nical sense, though a good one in equity. 
 
 35. A and B form a copartnership business, agreeing to share half 
 the profits and half the losses. At the end of three years the concern 
 fails. Six years before B entered into the partnership he bought some 
 real estate, which stands in his name to-day. and which had no con- 
 nection s\'hatever with the business of the concern. Now, can the 
 creditors of the concern take or seize upon B's real estate to satisfy 
 their claims ? And if so to what extent ? I might add that A has 
 no real estate. 
 
 A. After exhausting the assets of the firm, the creditors can 
 claim the private estate of either partner to the full extent of 
 their debts. Only the wife's right of dower in the real estate 
 w^ould be exempt. 
 
 36. If A and B own real estate, results of partnership, and all of 
 said real estate being in the name of A, who gives to B a " trust deed " 
 to secure his share,' does the receiving of such deed invalidate B's 
 realty and make it personalty ? If so please quote authorities ? 
 
 A. xi properly drawn declaration of trust under the above 
 circumstances would give B a paper title to the equitable estate 
 previously his as a thing in action. " The equitable estate is the 
 estate at law in a court of equity, and is governed by the same 
 rules in general as all real property is, by imitation. The equit- 
 able estate in this court is the same as the land." Cholmondeley 
 V. Clinton, 2 lac. and W., 148 ; cited, 2 Washburn on Real Prop- 
 erty, 4th Ed., p. 489. 
 
PARTNERSHIP. 
 
 401 
 
 37. Suppose a firm be formed with name of John Smith & Co., 
 Smith not having been released from the debts of a recent failure, the 
 Company furnishing all the capital ; Smith only gives his name, and 
 drawing salary for same, his name being known to the trade and there- 
 fore of value. In such a firm would the Company's interest and cap- 
 ital be liable for Smith's debts ? 
 
 A. In the case described the assets of John Smith & Co. 
 cannot be taken to pay the debts of John Smith, and the Com- 
 pany runs no risk therefrom. Only the interest which Jolni 
 Smith has in the firm, that is, his share of the assets wdien the 
 partnersliip debts are paid, can be taken on an execution after 
 judgment against him. As he has only a salary and no interest, 
 the assets could not be touched. 
 
 38. I loan a friend $10,000 for one year at 6 per cent, interest, 
 and receive his note therefor. My main object is to assist him in a 
 business enterprise, and between us there is this understanding (either 
 written or verbal), that after settlement of note I may claim one-third 
 of what the $10,000 has made, or I may claim nothing but the 6 per 
 cent. My own circumstances then, and the degree of his success, will 
 determine my action after note is due. Am I incurring liability as a 
 partner should he fail in meantime ? I put aside question of usury, 
 and also state that our intercourse through his residence in a distant 
 State will be slight. 
 
 A. There does not seem to be the " intention " of partnership 
 in the arrangement thus set forth, although in case of failure a 
 creditor might, perhaps, claim that the money thus loaned should 
 be held subject to the risks of the business. 
 
 39. What is customary and right as to copartners' individual ac- 
 counts ? They share equally in the profits of the business, but one 
 account is larger than the other. If interest is charged at all is it right 
 to compound the interest from year to year ? 
 
 A. The practice is not uniform. Where interest is credited 
 to a partner for his capital it is placed to his credit December 31st 
 each year, and charged, not to the other partners separately, 
 but to the interest account of the fiirm as an item of general ex- 
 pense. 
 
 40. A and C are copartners. Just before the expiration of the 
 copartnership, and during the absence of B, A speculates, loses money, 
 and overdraws the bank account of the firm, which check the bank 
 carelessly pays. Has the bank a legal as well as a moral claim against 
 B (who is the only responsible party of the dissolved firm) for such an 
 overdraft ? 26 
 
402 R TNERSHIP. 
 
 A. If the bank liad no sufficient reason to sui)pose that A was 
 nsing tlie funds for other than partnership purposes, the cLaim 
 of the bank against B is just as good as if tlie money had been 
 duly and properly expended in the partnership business. 
 
 41. W. I. John & Company are mercliants buying and selling 
 goods : K is one partner, in charge of business , the other partner is 
 non-resident. K indorses a note in bank for his friend W with the 
 signature of the firm, the money bemg for Ws use. Is the firm liable 
 as indorser ? 
 
 A. Each general partner in a firm has complete authority to 
 use the partnership signature as maker or indorser of a promis- 
 sory note ; and when so used, " the note will be deemed to be 
 made on the partnership account, and bind it accordingly, unless 
 upon the face of the instrument itself, or upon collateral proof, 
 it is clearly established that the party taking it had full notice 
 that the note was drawn or indorsed for purposes and objects 
 not within the partnership business." Story on Prom. Notes, 
 section 72 ; Story on Partnerships, sections 126, 132. 
 
 42. If a party having an established business becomes full partner 
 in another concern also, does this render him liable in case of failure of 
 the latter firm for the debts beyond his capital mvested therein ? In 
 other words, will the failure of the second concern affect in any way 
 the first one ? 
 
 A. A general partner in a dozen different houses is liable to 
 the creditors of each, not only to the extent of the capital he in- 
 vests, but beyond this with any property he may possess. The 
 only distinction is this : the property he has invested in any 
 given firm is held first to satisfy the partnership debts of that 
 firm ; and only the surplus will apply to other liabilities. 
 
 43. A and B are in partnership, with a written agreement to the 
 effect' that B is to furnish a certain amount of capital and share one- 
 third in profits or losses, in consideration for which the writings 
 further express that B is not to be held for more than one-third of the 
 liabilities in case the firm becomes involved. 
 
 Would such an agreement be valid (though never published) and 
 protect B against the creditors for any claims beyond such one-third ? 
 
 Does a dissolution of copartnership — where the business is continued 
 by the remaining partner — release the retiring member from the firm's 
 previous obligations ? 
 
 A. We answer both questions in the negative. The agree- 
 
PARTNERSHIP. 
 
 403 
 
 merit in botli cases only binds the members of the firm, and will 
 not govern the relations of either with the firm's creditors. 
 
 44. A and B form a limited copartnership. A puts into the firm 
 $25,000 and his time, and is the general partner ; B puts in $100,000 
 and is the special partner. The net profits are to go 50 per cent, to 
 capital and 50 per cent, to labor. The first year's profits are made and 
 are divided as agreed upon. The next year shows losses. How are 
 they to be divided ? 
 
 A. An agreement to divide the profits of an undertaking 
 equally is considered an agreement to share the losses in the 
 same measure. 
 
 45. In the year 1872, a partnership was formed consisting of five 
 individuals, one of which contributed machinery and tools valued at 
 $15,000, and manufactured goods to the amount of $16,000 more 
 Then one of the five agreed to take charge of the business, with the 
 understandnig that he was to have a salary of $3,000 if the profits of 
 the business amounted to so much, and not otherwise. The business 
 was run until the year 1878, and during this time the party running 
 the same borrowed from one of the five individuals, some $28,000 in 
 cash to pay for goods manufactured, and for machinery and tools for 
 manufacturing said goods. In the aforesaid year, 1878, the party 
 claiming the salary made out his account, charging $3,000 per year 
 w^ith interest on the same, claiming that there had been sufficient 
 profits since 1872 to pay him his salary, over and above the $28,000 
 borrowed money to pay for said goods, etc. 
 
 Ought there to be any charge made for the use of the goods, ma- 
 chinery, and tools on hand in 1872, when the partnership was formed, 
 and deducted from the profits of said partnership, said machinery and 
 tools having been used more or less from 1872 to 1878, for the benefit 
 of said partnership, and during that time having depreciated in value 
 by use, as also the goods ? 
 
 What is the just way of arrivmg at the profits of said partnership ? 
 The party loaning the $28,000 claiming that he ought to have the 
 money returned to him before the profits can be accurately known, 
 while the party claimnig the salary says there are profits consisting of 
 book accounts, goods, including machinery and tools, which have been 
 made since the partnership was formed, sufficient to pay the debt of 
 $28,000 and his salary. And the party claiming the salary wants to 
 pay the loan of money m the book accounts, goods, machinery and 
 tools, at the cost price, while said goods and machinery have depre- 
 ciated in value by use since they were made, and it would take some 
 years to dispose of the goods to advantage to pay said loan, besides the 
 risk of bad debts, etc. 
 
 A. The equitable way of adjusting the above would be surh 
 a statement as a man would make up if he owned the Avhole es- 
 
404 
 
 PARTNERSHIP, 
 
 tablishmciit, was running it himself, and desired to see how lie 
 stood. He would take account of stock, reckoning tools, goods, 
 etc., at their present fair value, charging off bad debts, estimat> 
 ing good and doubtful debts at the sum likely to be realized for 
 them, deducting his own obligations, and calling the balance 
 profits. If no charge is made for interest on the capital, none 
 should be allowed certainly on the salary not drawn. 
 
 46. If one of four partners speculates in his own name outside the 
 firm for his own profit and fails, to what extent, if any, are the other 
 three partners liable for his credits, and how will they be affected by 
 his failure ? 
 
 A. The other partners are not concerned if their name or 
 funds are not used. When judgment is obtained against the 
 partner (in case he is sued) his interest in the firm, or what 
 would be coming to him after the partnership debts are all paid, 
 can be taken on execution. 
 
 47. A and B are partners. C, a salesman, has an interest in the 
 profits, but has no capital in the business. At the time the interest 
 was given him it was so advertised. The firm fails, settles at 50 cents 
 on the dollar, leaving a balance after settlement of $10,000, which the 
 creditors knew was left. The firm then dissolves. In the settlement 
 is C entitled to 10 per cent, (his interest in the profits) of what is di- 
 vided ? When the firm failed did C fail also ? After the failure ona 
 of the partners advertises in the name of the firm that C was no part, 
 ner. Again, the same parties are in business, C with same interest, 
 his agreement to run one year. During the year the firm has a fire 
 completely destropng the building, making a total loss. Does C's in- 
 terest cease at the time of the fire, or does it run the full time ? At 
 the time of taking stock goods were low, but when the fire occurred 
 goods had advanced very high, and the firm recovered $15,000 more 
 insurance than their stock called for, in consequence of the advance in 
 goods. Is C entitled to 10 per cent, of this profit ? 
 
 A. " Whether an agreement creates a partnership or not de- 
 pends on the real meaning of the parties to it as expressed in 
 the agreement itself," (Lindley's Law of Partnership, 18.) 
 This must be understood as applying only to the rights of sup- 
 posed partners, as between themselves, a different rule prevailing 
 when those of third persons are in question. There may also 
 be a partnership in the profits alone, and not in the property 
 which constitutes the basis of the business. In the latter case, 
 
PARTNERSHIP, 
 
 405 
 
 wliich is probably the one before us, a balance left after settle- 
 ment in bankruptcy, or an amount received for insurance on 
 stock, could not, in our opinion, be reckoned as profits to be di- 
 vided, but must be considered as belonging wholly to the parties 
 who owned the stock. 
 
 A partnership agreement would not be affected by a fire ui> 
 less in consequence of some special clause in the agreement 
 itself. Neither can C be said to have failed individually, when 
 only the firm of which he was a member had become insolvent. 
 
 48. Does a release given to one member of a firm for a consider- 
 ation, release the other partners ? 
 
 A. By statute in this State, (N. Y.,) one of several members 
 of a firm, or one of other joint debtors may be released, if the act 
 is specific and reserves the right of action against the others ; 
 otherwise it will operate to release all. 
 
 49. Can creditors release one member of an insolvent^rm, say the 
 junior partner, without releasing all, and without impairing their claim 
 against the other members of the firm ? 
 
 A. Tlie old rule was that a release of one joint debtor 
 operated to discharge all ; but the courts now allow a release to 
 one which includes a stipulation that the other joint debtors shall 
 not thereby be released, to stand as a mere covenant not to sue 
 the party thus favored. The better way is to put it in this form, 
 merely entering into a written and executed agreement not to 
 sue the partner whose release is intended. This will leave the 
 remedy intact against the others. 
 
 50. A firm advertises as follows : 
 
 Mr. B has an interest in our business from this date. A & Co. 
 
 A & C fail, can B be held for the debts as a partner ? 
 
 A. Such an advertisement is usually held to constitute tlie 
 appointee a partner; and only in case he can show that his posi- 
 tion was that of service, and the interest was merely a percent- 
 age of profits in lieu of salary, can he avoid the liability. 
 
 51. If one member of a firm buys goods for the use of said firm 
 in his own name, and I am ignorant of the fact that such firm exists 
 until I have a claim against the party who purchased the goods, who 
 can I commence proceedings against for the collection of that claim, 
 
406 
 
 PARTNERSHTP. 
 
 the party who purchased the goods, or the firm ? and is the firm holden 
 for any contracts made by the individual member in his name for their 
 use ? 
 
 A. Parsons on Contracts says : " If tlic bargain was for a 
 joint purcliasc and joint adventure, there is at once a joint lia- 
 bility for the original purchase, although it was made by one of 
 the parties alone, and he alone was known to be interested, and 
 credit was given to him alone. " Vol. 1, page 173. This is estab- 
 lished by many legal decisions. The liability of a partner springs 
 either from his holding himself out to the world as a partner, or 
 from his participation in the business and its profit or loss. 
 Either of these alone is, in general, sufficient to create this liabil- 
 ity. Buckingham v. Burgess, 3 McLean, 3(34 ; Cottrell v. Van- 
 duzen, 22 Yt., 509. 
 
 52. A and B are partners in real estate business, buying, holding 
 and renting business blocks, etc., acting as manager of the entire busi- 
 ness in detail. A and C are partners in general merchandise. A and 
 C having occasion to use a small sum of money, one of the partners 
 banks their note indorsed with the firm name of A and B to the bank 
 and gets it discounted. Before it matured A and C fail. On the ma- 
 turity of the note the bank protests it and gives A notice of protest. 
 The bank then learns that B knew nothing of tho use of the firm 
 name of A and B until after the protests, and claims that he is not 
 holden in any respect. Can the bank collect the amount of note from 
 the firm of A and B, they being solvent ? 
 
 A. In a somewhat similar case recently reported by us the 
 Court left it to the jury to decide whether the bank had good 
 reason to believe that the indorsement of afinn s name was given 
 by one partner for his own benefit, holding that this being es- 
 tablished the other members of the firm were not liable. The 
 jury so decided. That is the point to be settled in the case 
 above noted. 
 
 53. Are not all the partners and stockholders of a private bank 
 issuing certificates of deposits payable at no definite time individually 
 liable for all such certificates ? Can they be released by the holder ac- 
 cepting interest and extending the time of payment when such bank 
 is closing its business ? 
 
 A. All interested as partners are liable for the payment. If 
 the creditors accept in place of the certificate the individual ob- 
 ligation of some one of the partners, the others would be thereby 
 released. 
 
PARTNERSHIP. 
 
 407 
 
 SPECIAL. 
 
 54. Does V. special partner, by holding in the house with which his 
 capital is invested, tho position of head bookkeeper, endanger his priv- 
 ileges generally admitted to specials ? He signs by procuration. 
 
 A. Wo think that such an occupation would render a special 
 liable to be held as a general partner. 
 
 55. A, B & C are partners ; B and C are specials. B and C give 
 instructions by which A, B & C lose $100,000. Can A charge 
 lawfully to B and C the entire loss, he having been opposed to the in- 
 structions of B and C ? Has A an action against B and C for damages 
 for interfering in the management of the business of A, B & C, of 
 which A under the contract is the general manager and sharing 50 per 
 cent, of the profit or loss ? 
 
 A. B and C cannot give instructions, or interfere with the 
 management, except by A's consent or permission, the law being 
 explicit on that point, and if A has allowed them to overrule his 
 judgment, and lead liim into a business disastrous to his inter- 
 ests, he has only himself to blame. If B and C have on their 
 own motion undertaken any movement or speculation in opposi- 
 tion to A's orders, they cannot bind the firm by their ' instruc- 
 tions," and if A has not consented to the order^ and repudiates 
 it, the business is theirs, and for their own sole account The 
 statute allows a special partner to negotiate sales, purchases, and 
 other business for the partnership, but provides that no busi- 
 ness so negotiated shall be binding upon tne partnership until 
 approved by a general partner." 
 
 56. C enters into a special partnership with D for five years, with 
 a capital of $10,000, the latter to share one-third of the profit to be 
 ascertained every year. The business was so prosperous in the first 
 three years that C got his special capital back twice in profits. In the 
 last two years, however, through losses, the w^hole capital of the busi- 
 ness was sunk. The question is now, is D individually liable to C for 
 the $10,000 which he originally contributed to the business, or is the 
 capital at the risk of the business ? 
 
 A. If by the copartnership articles C was to share one-third 
 of the profits and losses, tlien as between tlie firm and its credit- 
 ors he is liable to lose liis 810,000, that being at the risk of the 
 business, but as between C and D, the former is only liable for 
 one-third of the loss, and D must make up two-thirds of it out 
 
400 
 
 PARTNERSHIP. 
 
 of any property he possesses, unless otherwise provided in the 
 articles of copartnership. 
 
 57. Your assistance is asked to define the duties and responsibili- 
 ties of a special partner. A new point seems to have arisen among the 
 dry goods people as to whether or not a special partner makes himself 
 liable as a general partner if he takes an active part in the manage- 
 ment of the business, or even acts as a clerk. Under tho law as it ori- 
 ginally existed such participation in the management of the business 
 rendered the party liable as a general partner. Has there been any 
 new law which enables special partners to take such a part, and yet 
 avoid responsibility beyond the amount specially contributed ? 
 
 A. The modified act contains tlie following section: 
 Section 17. A special partner may, from time to time, exam- 
 ine into the state and progress of the partnership concerns, and 
 may advise as to their management. He may also loan money 
 to, and advance, and pay money for, the partnership, and may 
 take and hold the notes, drafts, acceptances and bonds of, and 
 belonging to the partnership, as security for the repayment of 
 such moneys and interest, and may use and lend his name and 
 credit, as security for the partnership in any business, and shall 
 have the same rights and remedies in these respects as any other 
 creditor might have. He may also negotiate sales, purchases, 
 and other business for the partnership, but no business so nego- 
 tiated shall be binding upon the partnership until approved by a 
 general partner. Excepting as herein mentioned, he shall not 
 transact any business on account o± the partnership, nor be em- 
 ployed for that purpose as agent, attorney, or otherwise. If he 
 ; shall interfere, contrary to these provisions, he shall be deemed 
 ; a general partner. 
 
 This is too explicit to need further comment or elucidation. 
 
 58. A party residing m the city of New York becomes a special 
 • partner in a house doing business in a Southern State ; has that party 
 
 a right to assist in purchasing goods for the house without making 
 himself liable as a partner under the laws of this State ? 
 
 A. The amended law of this State gives a special partner the 
 right to " negotiate sales, purchases, and other business for the 
 partnership, although such negotiations are not binding until ap- 
 proved by a general partner." 
 
PARTNERSHIP. 
 
 409 
 
 59. If a special partner, duly advertised as such, takes an active 
 part in the management of the business, does he by so doing assume 
 the risk and responsibilities of a general partner, or does the amount 
 of his advertised interest limit his liability ? 
 
 A. The original restrictions upon the special partner have 
 been much modified in this State (N.Y.). He may advise as to the 
 management of the business, loan money to and pay money for 
 the concern, negotiate sales, purchases, and other business for 
 the partnership, without making himself liable as a general 
 partner. 
 
 60. Is a special partner's risk only the original sum of his special 
 capital, or, whether under the laws of this State (N.Y.), such a contract 
 implies being obliged to keep this capital intact to the end of the con- 
 tract ? 
 
 Example : A puts in $25,000 special capital at 6 per cent, interest, 
 and one-tliird share in the result of the business for the term of three 
 years. First year shows no profit. Second year is very unlucky. He 
 loses $15,000. Is he bound to put in another $15,000 to make up the 
 original amount to $25,000 special capital ? Or, suppose the result of 
 the second year not only wipes out all his special capital, but brings him 
 into debt to the partnership to the extent of $10,000. Now, if the 
 partnership is not brought to an end by the failure of the concern, 
 and goes on for a third year, what is A's position then ? If the third 
 year shows a profit, can A, being a debtor of the partnership, claim 
 one-third of the profits under the special partnership contract ? can he 
 also claim the 6 percent, interest on the amount originally invested, or, 
 is A obhged to make his loss of $10,000 good, and also the original 
 amount of the special " contributions ? 
 
 Or, A failing to do so, and being possessed of outside means, and 
 the third year, instead of being a successful one, draws the concern 
 still further down causing them to fail, and the creditors make him pay 
 up his indebtedness to the partnership, and over and above this sum, 
 is he also liable to them for $25,000 special capital lost in the second 
 year, and not made good ? 
 
 Another (question is, which is the correct way of keeping the ac- 
 count ? Is 'it correct to account for yearly interest and the special's 
 profit or loss in the business over the " special capital account, " or, is 
 it better to open two accounts, one on which the special capital is 
 credited and which is not changed, and account for interest, profit and 
 loss, over a private account opened in the name of the special part- 
 ner ? The above questions are intended to apply only to the laws of 
 this State. 
 
 A. The special partner is not obliged to make good any loss 
 of his capital. He may lose part or all the first year, and the 
 
410 
 
 PARTXEnsniP. 
 
 concern may still go on ; ho is not obliged to make anotlicr invest- 
 ment. But the statute specially provides that no part of the 
 capital shall be returned to him in the shape of dividends or 
 profits at any time dui'ing the continuance of the partnership, and 
 he cannot even draw interest if the payment reduces the amount 
 of the ca})ital. Any loss therefore, making a deficiency in his 
 capital must be made up before he can draw interest or profits. 
 He may make it up by direct contribution ; or, he may leave the 
 account as it stands until the succeeding profits restore it, but 
 lie can draw nothing out, under any pretense, unless tliere is left 
 behind the whole capital intact, until the copartnership expires. 
 It is better to have the special and all that refers to it under one 
 heading, and this will show at any time that the law has not 
 been violated. 
 
 6 1 . Can a special partner be held for any more than the amount 
 advertised and put in ? That is, if A contributes $5,000 to a concern, 
 and in six months time the liabilities are $J 0,000, the assets $2,000, 
 bad debts causing the deficiency, can the creditors demand anything 
 more of A, he having already lost $5,000 ? 
 
 A. If the special partner has observed all the legal formali- 
 ties, he cannot be held for the debts of the firm beyond the 
 amount he has invested. A large portion of the special partner- 
 ships have some legal defect, through the carelessness of the 
 parties and their ignorance of the requirements of the law. 
 
 62. Has West Virginia a law entitled " Allowing the formation of 
 limited partnership associations " ? 
 
 A. The code of West Virginia authorizes the formation of 
 " limited partnerships for the transaction of mercantile, mechan- 
 ical, or manufacturing business within the State, and not for the 
 purpose of banking, brokerage, or making insurance." It is 
 formed by certificate filed with the county Recorder, the names 
 of the special partners do not appear, and they are not liable 
 as long as they conform to the requirements of tlie act. They are 
 not allowed to take any other part in the management of the 
 business than to examine into and advise. (Chap. 100, Code of 
 W. Va.) 
 
 63. Are all partnerships, special or general, dissolved by the death 
 of one of the general partners ? 
 
PAFTXERSIIIP. 
 
 411 
 
 A general partner of a special partnership having died, and no no- 
 tice of continuance or dissolution having been publislied, is the estate 
 of the deceased partner held for debts contracted after his death in the 
 name of the firm ? 
 
 A. Death dissolves all partnerships unless there is a special 
 provision for continuance in the articles of agreement, or the de- 
 ceased makes such a provision in his will. Tlie deatli itself is a 
 notice to all concerned. If the executors or administrators with- 
 out such authority, put or lease funds in the partnership to con- 
 tinue the business they are personally liable as partners, but the 
 estate, as such, is not. The estate cannot in this case be made 
 liable for any new contracts. 
 
 64. Is there any law by which a special partnership in the private 
 banking business is prohibited ? 
 
 A. Special partnerships may not be formed in this State, (X. 
 Y.,) to conduct the banking or insurance business. 
 
 SURVIVORS. 
 
 65. A & B form a copartnership for five years, and in the mean« 
 time A dies ; is his widow entitled to a full share of the profits until 
 the time the contract expires ? 
 
 A. The death of a partner dissolves the firm. Unless there 
 is a provision for such continuance in the partnership articles, 
 neither the widow, heirs, nor administrators can claim the priv- 
 ilege of carrying on the business. The interest of the deceased 
 must be accounted for, and the remaining partners may continue 
 the business as their own. 
 
 66. What are the rights of a surviving partner, viz. : 
 
 1. His right to insist on selling out the partnership stock, collect- 
 ing in the deots due the firm, and paying off the indebtedness of the 
 concern, accounting to the executors of the deceased as he goes on, 
 and pa}dng them the cash which accrues after the partnership debts 
 are all paid. 
 
 2. His right under the above circumstances, to prevent the execu- 
 tors from selling the interest of the deceased to an outside party. 
 
 3. The length of time the law allows for such a settlement. 
 
 A. 1. The death of a partner dissolves the partnership, and 
 the partnership ])roperty goes to the survivors for the purposes 
 of settlement. Tliey can make no new contracts save in tlie way 
 of winding up the business. " They have all the power neces- 
 
412 
 
 PARTNERSHIP. 
 
 sary for this purpose, and no more. " In a general way all llie 
 interested are tenants in common, and the legal representatives of 
 the deceased have the right to interfere if the partnership property 
 is wasted or devoted to any other use than the single one of 
 settlement. If necessary to secure justice to the estate of the 
 deceased, the court will appoint a receiver to conduct the liqui- 
 dation. 
 
 2. The executors, if not otherwise restrained, may sell out 
 the interest of the deceased in the property of the firm, but this 
 will not serve in any way to renew the partnership, or to bring 
 the new owner into the business. 
 
 3. A reasonable time is allowed for settlement, and if more 
 is taken the courts may interfere. No charge can be made by 
 the surviving partners for their services in the settlement, nor 
 any new business undertaken with the funds belonging to the es- 
 tate of the deceased partner. 
 
 67. A was the owner of a vessel recorded in the Custom House in 
 his name. B formed a copartnership with A and the vessel became an 
 asset of the firm, each partner being charged with his proportion of her 
 value, but no transfer was made at the Custom House. In case of the 
 death of A and sale of vessel can B give a good title to purchaser ? 
 In other words, does the fact of the record at the Custom House not 
 being changed, operate against B in disposing of vessel as a firm asset ? 
 
 A. The facts of the case being established as above, there 
 would be no serious difficulty in giving title to the vessel in case 
 of A's death. 
 
 68. A and B made a contract by which A agreed to take B into 
 his business as a partner on the first of January, A investing $10,000, 
 with the new firm, to be styled A & B, and receiving therefor interest, 
 and one-half of the profits. The contract contains other details about 
 the manner of conducting the business in general, etc. A died, how- 
 ever, on the 29th of November, leaving an estate of $50,000, and five 
 children as lawful heirs, of whom two are of age, three are minors, (19, 
 17, and 15 respectively, years), and who by the terms of A's last will 
 share in his estate in five even shares ahke, to be paid to them as they 
 become of age. A few days before his death A made a codicil to his 
 last will, by which he leaves to B the good will of his business, and 
 the use of $10,000 for the term of three years, as a capital fund to 
 continue the business, B, however, to pay for the use of said money 
 to the estate of A, 1 per cent, per annum, by way of interest and 
 profits. And A further directs that all the provisions contained in the 
 
PARTNERSHIP. 
 
 413 
 
 contract of copartnership entered into by nimseif and C, and which is 
 to go into effect, on the first ot January, regarding said business, shall 
 be of force and effect also after his decease, and he directs B to liqui- 
 date his old business. B, as such, receives from the estate of A, the 
 loan of $10,000, for which he gives his acknowledgment. The two 
 children of A that are of age, demand each from the executor the 
 payment of their one-fifth share of the entire estate, being $50,000, 
 of which $40,000 are invested in bonds, and $10,000 in the firm of A 
 & B, as loan to B. The following questions arise : 
 
 1. Must the executor soil enough bonds to pay to each of the 
 children that are of age, their full one-fifth share (or $10,000) now, or 
 must the two be satisfied to receive at present only one-fifth each of 
 $40,000, and await the one-fifth of $10,000, invested with B until he 
 returns the loan after three years ? 
 
 2. If B should not make any profits during the next three years to 
 come, what rate of interest will he have to pay to the estate of A for 
 the use of the money ? 
 
 3. If B should at the end of three years not be able to return the 
 money in full to the estate, but declare himself insolvent, and continue 
 to be so, will such loss fall alike on all five children, even if the two of 
 age now receive their present share in full of $10,000 each, or would 
 it fall merely on those being minors to-day, or on those being minors 
 after three years ? 
 
 4. Can either of the heirs, or the executor, or the guardian of the 
 minor children raise legal objections against the loaning of $10,000 to 
 B, as per codicil, and in what manner must they do so to make it 
 effective ? 
 
 5. If B accepts the loan from the estate must he pay, in case of 
 profits accruing in the business, one-half of these profits to the estate, 
 as per business contract, or is the contract between him and A a dead 
 letter with the moment of A's death ? 
 
 A. The death of A dissolves the partnership. B can claim 
 the good will of the business, but must settle it up without 
 charge, and pay all dues over to A's estate. B can also claim 
 the use of the 110,000, for the period named, and must pay for 
 it the 10 per cent, only, whether he makes any profit or not 
 from it. The two children of tige can only claim each one-fifth 
 of the amount realized, and in the hands of the executors. The 
 $<10,000 will belong to the estate, but will not fall in for dividend 
 until the end of three years, and all the children will share alike 
 interest in it. If B loses it and never pays it, the children will 
 all share alike in the loss. 
 
 69. A and B have been in partnership for years without any writ- 
 ten articles of agreement with only a verbal understanding, the capital 
 
414 
 
 PARTNERSHIP. 
 
 of each to continue in the firm business without interest, and the 
 profits or losses of such business to be divided according to such verbal 
 understanding, kc. Eventually A dies, thereby leaving B as sole sur- 
 viving partner, and the latter naturally assumes the settlement of the 
 firm s business„ Another firm, C & D, being indebted to the firm A 
 & 1], dissolve partnership after the death of A, without having dis- 
 charged this indebtedness to the firm A & B, with D continuing as 
 successor to C & D. By public notification D settles the firm's (C & 
 D s) business, tendering his (D's) own individual notes, with short time 
 to run, to the order of B. Does B by accepting such individual notes 
 (from D made to the order of B) thereby release the original claims 
 of the firm A & B against the firm of C & D, without any such implied 
 intention or understanding to this effect, certamly on the part of B, 
 until the notes are paid ? Also, does B, by reason of having accepted 
 such notes from D, assume any new responsibility, or become legally 
 bound individually accountable to the estate of A for the original 
 claims of A & B against C & D in the case of non-payment of such 
 notes ? B has acted in good faith and according to his best judgment 
 as the surviving partner in settling the business of A & B, and has en- 
 deavored to account for every cent belonging to the estate of A, as 
 fast as collected from the creditors of A k B. 
 
 A. If, as we infer from the above statement, D's individual 
 obligation was not accepted distinctly as payment of the firm to 
 A & B, it appears to us, in the event of the non-payment of the 
 note, to leave the original note subsisting, and still collectible to 
 the assets of C & D, unless in the meantime is has been barred" 
 by the statute of limitations. In this latter case only, therefore, 
 or perhaps also, if assets existed out of which the debt might 
 have been collected at the time the note of D was accepted, and 
 there are now none out of which it may be made, can any ques- 
 tion of B's individual liability arise. How it should be answered 
 may depend on the facts not stated above ; but if the transaction 
 was, under the circumstances, a prudent one, and apparently for 
 the benefit of A's estate, we do not believe that any personal 
 liability will fall on B. 
 
 70. In case of one of two partners surviving and wishing to pur- 
 chase the business, how many times, and in how many papers must the 
 announcement be advertised ? 
 
 Can the old firm name be used by the surviving partner, after pur- 
 chase of the business, provided it has been used ten years previously, 
 although the firm has no foreign connections ? 
 
 A. The surviving partner has the right to continue the busi- 
 nesso As to the partnership property it must be disposed of for 
 
PATENTS AND COPYRIGHT. 
 
 415 
 
 the benefit of the surviving partner and the estate of the de- 
 ceased. If the survivor wislies to buy out the interest of the 
 latter, lie can make an arrangement with the executor or admin- 
 istrator to this effect, as they may agree. 
 
 The old name may be continued by the laws of this State, 
 after its use here five v^ars, even without any foreign intercr-t or 
 connections, provided r'^e formalities of the law as to filling the 
 certificates and publiohing the same are complied with; without 
 such compliance the use of the firm's name by one partner ren- 
 ders him liable to a penalty. 
 
 71. What is the law governing copartnerships where one of the 
 partners dies, the surviving one only having about an eighth interest in 
 the capital and a quarter in the general business ? Can the heirs of the 
 defunct partner step in and take all or any control of the business at 
 once ? Is there a law defining the time the business can be carried on 
 without allowing the heirs any say in the premises ? 
 
 A. The death of the partner without any provisions for it 
 in the copartnership agreement dissolves the firm. The heirs in 
 that case have nothing to do with carrying on the business, 
 which belongs to the surviving partner, if he so elects ; but he 
 cannot carry it on with the funds belonging to the estate. He 
 must use his own name, or new capital, for any new business. 
 
 PATENTS AND COPYRIGHT. 
 
 1. Can an article that has been patented in the United States be 
 manufactured in England or France and imported in this country with- 
 out infringing upon the right ? 
 
 A. A patent here will not prevent the manufacture and use 
 of the articles abroad, but such foreign goods cannot be sold 
 here. Xor can a patent be obtained for an article abroad by an 
 American inventor who has first made and sold it under a patent 
 in the United States. 
 
 2. I have the assignment of a patent to secure the payment of a 
 note ; has the assignment to be recorded to make it legal ? 
 
 A. The assignment will be good against the patentee ; but 
 section 4,898 Rev. Stat, provides that " an assignment, grant, or 
 conveyance shall be void as against any subsequent purchaser or 
 mortgagee for a valuable consideration, without notice, unless it 
 
416 PATENTS AND COPYRIGHT. 
 
 is recorded in the Patent Office Avitliin three months from the 
 date thereof.'' 
 
 3. My brother-in-law in England wishes me to copyright a book he 
 has written. Will you be kind enough to give me the needed infor- 
 mation as how I shall proceed ? 
 
 A. Unless the author is a citizen of the United States, or a 
 resident of this country, he cannot protect his work here by 
 copyrighting it, as the law now stands. 
 
 4. Will you be kind enough to state whether a party who manu- 
 factures a certain article and finds afterward that the article is paten- 
 ted, is hable to any penalty if not notified by the patentee ? 
 
 A. A second inventor has no right to manufacture, if the 
 prior invention has been patented, and is liable to a penalty for 
 infringing the patent. 
 
 5. The Government issued letters patent to a certain party, and 
 some months later issued duplicate letters (at least substantially such) 
 to another party for the same article, on the ground of priority of in- 
 vention. This led to litigation between the parties, or their assignees, 
 and the matter is still in court. Both parties or their assignees are 
 manufacturing the article in question. Can dealers in the article manu- 
 factured by the losing party be held liable for damages by the party 
 winning the suit ? Can the losing party or his assigns be held for 
 damages by the winner of the suit, or only estopped from manufactur- 
 ing? 
 
 A. The question here raised does not appear to have received 
 an authoritative answer without adjudication ; but proceeding 
 upon general principles it is safe to say that it would be highly 
 inequitable to impose damages upon dealers in the case suggested, 
 at all events until after notice that the patent is in dispute. After 
 such notice we should consider it the part of prudence to suspend 
 dealings until the termination of the contest. Whether or no the 
 losing party could be cast in damages would probably depend 
 upon his good faith in obtaining the patent ; if so obtained in 
 conscious fraud of another's rights, it appears to us likely that 
 damages might be awarded. 
 
 6. Having had a dispute with a friend as to whether one may 
 manufacture for his own use (though not for sale) a patented article, 
 I contending that one had that right, he that they had not, we have 
 decided to leave it to you as an authority. 
 
PATENTS AND COFYRIGIIT. 
 
 417 
 
 A. It is just as much an infringement of a patent to make 
 tlie ll.ing patented for his own use as to make it for sale. The 
 use of a patented article niiglit be, as with a screw macliine, the 
 production of screws for sale ; of course tliis would aggravate 
 the damages : but the result would be the same as if it was a 
 washing macliine to use in one's own kitchen, or a mower to cut 
 one's own grain. lie must get tlie right before lie can make or 
 use tlic machine. 
 
 7. Are patent rights subject to seizure the same as personal prop- 
 erty ? 
 
 A. Patent rights are personal property, and are not exempted 
 from execution any more than stocks or bonds. 
 
 8. A fire recently injured my machinery, and among it is a ma- 
 chine for which a patent is held. Can I rebuild this machine without 
 again paying the royalty ? A large portion of the machine on which 
 the patent is held is not injured, and will bo used again m rebuilding. 
 
 A. The owner of a patented machine has the right to repair^ 
 but not to reconstruct. The right to make it sometimes conveyed 
 by the license to use, but if that riglit has not been granted there 
 is none to rebuild. (Wilson vs. Simpson, 9 How., 123.) It will 
 be seen that the answer to the above question depends upon the 
 extent of the work to be done to the machine. 
 
 9. A owns a patent on an article used largely by B and all his 
 competitors in manufacturing a certain class of goods. Said patent 
 has been running for some years and has been used by nearly all with- 
 out papng royalty. Can A now sue B for damages and also oblige 
 him to pay a royalty in future, and let his competitors go on as before, 
 thus obHging B to stop making the article, or is he obliged to treat all 
 alike ? The infringement is so palpable that difficulty of detection 
 would be no reasonable excuse. 
 
 A. In permitting general use of his patent without action to 
 prevent it, the patentee indicates an intention to abandon it, or, 
 in the language of Judge Story, affords " a very strong presump- 
 tion of such an actual abandonment or surrender." (Wyeth vs. 
 Stone, 1 Story's Rep., 273.) Probal)ly, in the case above pre- 
 sented, the patentee could not recover damages ; but as toliis right 
 to prevent the future use of his invention without pavment of 
 27 
 
418 
 
 PATEXTS AND COPYRIGHT. 
 
 royalty, it would be unsafe to give an opijiiou witliout more spe- 
 cific evidence, such as would have to be produced on a trial. 
 
 1 0. How long will a patent run ? 
 
 A. The patents granted protect the inventor for 17 years, 
 unless ho has obtamed a patent abroad, in which case the patent 
 liere expires at the same date as the foreign issue, but not 
 to exceed the period stated When sufficient reason can be 
 shown. Congress may order an extension of the term. 
 
 1 1. Can 1 apply directly to the Patent Office at Washington, or 
 will 1 have to apply through a sohcitor of patents ? 
 
 A. There is no legal necessity for the employment of a solic- 
 itor, if the inventor can draw his own papers. He must first 
 apply to the Commissioner of Patents, in writing, setting forth 
 in full, clear, concise, and exact terms a description of his 
 invention or discovery ; if it is a compound, showing how it is 
 compounded ; if a machine, then he must furnish drawings, 
 and ultimately a model of it. 
 
 12. A contracts with B to manufacture under B's patents. Aftei ' 
 paying B considerable money as royalty, A threatens to sue B to re- 
 cover that money, on the ground that the patents are invalid. If they 
 are proved to be invahd can A recover ? If A can examine the 
 patents previous to the contract, and had been satisfied that they were 
 valid, would that alter the case ? 
 
 A. In Saxton t. Dodge, 57 Barb., 84, 114, it was held that 
 disputing the validity of a patent was a proper defense to an 
 action or a note given for license fees under a patent ; so if 
 money was paid for a license to manufacture, and this was found 
 to be valueless, we see no reason why it should not be recovered. 
 The case submitted appears to us to be one where there is a 
 mutual mistake of fact, viz., as to the validity of a patent; and 
 "money paid by a mistake of fact which causes an unfounded 
 ■belief of a liability to pay may generally be received back." 
 (Parsons on Contracts, 1, 466, and cases there cited.) A's ex- 
 amination of the patent before contract, and his conclusion that 
 it was valid, would only increase the strength of his claim to re- 
 cover back the money paid, as it would only serve to show that 
 his mistake was not the result of want of diligence in endeavor- 
 ing to ascertain the facts. 
 
POWER OF ATTORXEV. 
 
 419 
 
 13. Can an article manufactured in Europe on machinery which 
 is protected by a patent in the United States (but not in Europe), be 
 imported and sold in this country ; or would this be an infringement 
 of the American patent ? 
 
 A. It would be an infringement of the American patent. 
 
 1 4. Must all patented articles have the patented mark thereon ? 
 A. The act of Congress makes it the duty of all patentees, 
 
 their assigns, and all persons making or vending any patented 
 article for or under them, to give sufficient notice to the public 
 that the same is patented, either by fixing thereon the word 
 " patented " together with the day and year the patent was 
 granted, or when from the character of the article this cannot 
 be done, by fixing to it, or to the package where one or more of 
 them is contained, a label containing the like notice. 
 
 POWER OF ATTORNEY. 
 
 1 . Is it legal for a person who holds a power of attorney to sign 
 another's name, to do so without affixing the writer's name as having 
 legal authority to do it ? 
 
 A. This question has been widely discussed, some contending 
 that only instruments not under seal can be executed properly 
 without the added name of the attorney to show that it was done 
 by another under proper authority. Lord Ellenborough (in 
 Watkins v. Yince, 2 Stark., 368), held that the signing of the 
 principaVs name by an attorney duly authorized to contract in 
 his behalf, ^vas a sufficient signature. Where the principal is 
 present, there is no doubt about it, but in absence of the princi- 
 pal, as the deed takes effect only from the act of the attorney, 
 it is always better to add the signature of the latter. 
 
 2. Does a general power of attorney cease to be in force at the 
 death of the party who made it ? 
 
 A. The death of the principal operates per se as a revocation 
 of the power unless the agency is coupled with an interest in the 
 thing itself on which the power is to be executed, as a warrant 
 of attorney to confess judgment and the like. 
 
 3. A some years ago executed a power of attorney to B, a lawyer, 
 for the purpose of collecting certain moneys due to A in a foreign 
 
420 
 
 POWER OF ATTORXEY. 
 
 country. B transferred power of attorney to C, a personal friend of his, 
 but a total stranger to A. A was notified of the fact and made no 
 opposition, or nearly four years A was unable to obtain any infor- 
 mation in regard to the matter, nor can he now learn anything from B 
 in regard to collection, but A has positive information that C collected 
 the amount at least three years ago, and has thus far failed to account 
 for it — so B claims. Can B be held responsible to A in any form ? 
 
 A. " The employment of sub-agents or substitutes is often 
 expressly provided for in letters of attorney and other formal 
 instruments. In such cases it is clear that the original attorney 
 or agent will not be liable for the acts or omissions of the sub- 
 stitute appointed or employed by him, unless, indeed, in the a}> 
 pointment or substitution he is guilty of fraud, or gross negli- 
 gence, or improperly co-operates in the acts or omissions. In 
 many other cases a similar authority arises, by implication, from 
 the conduct of the parties, or from the usage of trade." — Story 
 on Agency, 201. The circumstances of the above case create 
 such a presumption that, unless there is some evidence of B's 
 dereliction, it would appear to be the proper course to hold C 
 directly to account. 
 
 4. Andrew Brown holds a power of attorney from John Jones & 
 Co., and signs a check thus: '-per pro. John Jones & Co., A. B." 
 The bank upon which this check is drawn contends that Andrew 
 Brown should sign his name in full otherwise the signature is not 
 complete. 
 
 A. The signature should correspond with the power of attor- 
 ney. If John Jones & Co. have given such power to A. B." 
 then A. B. can draw the money ; but if the power is given to 
 
 Andrew Brown," then neither A. B. nor A. Brown can properly 
 exercise the power. It must be " Andrew Brown," as in the 
 document. 
 
 5o How should a person holding power of an attorney sign ? 
 
 A. The question as to how an attorney should sign is not 
 simple, and the answer is governed by the terms of the power 
 itself. A man may be authorized to sign the name of the prin- 
 cipal in such language that he need only sign it, without adding his 
 own name at all ; but if he is authorized to do a certain act or 
 deed " as attorney for " the principal, then he must sign the 
 
PRINCIPAL AND AGENT. 
 
 421 
 
 principal's name "by A. B., his attorney." The latter is the 
 better way in nearly all cases. 
 
 6. Can not the attorney of a firm be authorized by the firm to sign 
 the firm name without any appendix showing the signature to have 
 been made by procuration, if he has not a partner nor has any interest 
 in the firm besides his salary ? In other words, does the signing of the 
 firm name alone necessarily imply partnership, or is it merely another 
 form of signing per procuration ? 
 
 A. The attorney of a firm may sign the firm's name without 
 attaching his own if he has sufficient authority. In Morse v. 
 Green, 13 N. H., 32, it was held that " if a party authorized 
 another to subscribe his name to a note the fact that tlie signa- 
 ture was placed there by an agent need not appear on the note.'* 
 The only risk run by the attorney is that in signing the firm's 
 name in this way he may thereby hold himself out to all who 
 witness the act as a partner and be treated as such in case of the 
 firm's insolvency. 
 
 7. I hold full power of attorney for John Doe. Does said power 
 cease in case said John Doe should be placed in an insane retreat, when 
 he has not annulled my power of attorney ? 
 
 A. This question has not been settled in all its bearings, but 
 it was said by our Superior Court, in the case of Wallis v. Man- 
 hattan Co., 2 Hall, 495, that the mere existence of lunacy 
 never operates to revoke a power until the fact is judicially es- 
 tablished by proper proceedings in chancery." In Kent's Com- 
 mentaries, vol. 2, p. 645, it is further said : " Insanity does not 
 operate as a revocation of a power coupled with an interest, nor 
 if the agent acts under a written power, or a previously acknowl- 
 edged authority, and the insanity be unknown to the party." 
 
 PKINCIPAL AXD AGEXT. 
 
 1 . I will be obliged for your opinion whether in the case of a com- 
 mission merchant and his client, and the former has by desire effected 
 an insurance on the lattcr's property or consignments of produce, has, 
 according to the custom of the place, charged to his client the rate of 
 insurance published by the company (which is a mutual one), but has 
 actually paid only in cash such rate, less 15 per cent, rebate, allowed 
 to all insurers (at their opinion, instead of waiting to participate in 
 dividends) when the transaction, be it by account sale or account stated, 
 
422 
 
 PRINCIPAL AND AGENT. 
 
 and settled or not, is disclosed to the client in its actual colors, can the 
 client recover the overcharge from the mei'chant or not, and whether 
 in New York or elsewhere ? and are there any, and if any, what, re- 
 ported cases bearing on the subject, in the New York courts ? 
 
 A. If the rebate were distinctly accounted for to the client, 
 and retained by the commission merchant as a charge for his 
 own trouble, the transaction would, no doubt, hold water ; other- 
 wise it would violate a well settled rule of law governing the re- 
 lations of principal and agent. The nearest case in point, in the 
 New York courts, was the decision of the Supreme Court in Min- 
 nesota Central Railroad Company v. Morgan, 52 Barb., 217, where 
 it w^as held that the custom of agents to appropriate insurance 
 scrip dividends is not admissible. Story says : "No agent will 
 be permitted * * * to hold any profits incidentally obtained in 
 the execution of his duty, even if it be sanctioned by usage. 
 Such a usage has been severely stigmatized, as a usage of fraud 
 and plunder. " Story on Agency, sec. 207, and authorities there 
 cited. 
 
 2. A is a merchant going to Europe, and gives to a person, B, dur- 
 ing his absence, power of attorney to sign checks in payment of bills 
 of tlie firm, which checks A's clerk, C, brings to B for his signature. 
 Instead of paying the bills, the clerk C, gets the checks caslied at the 
 bank, and puts the money in his pocket. Is B legally bound (he not 
 having taken the trouble to get receipts for the checks he signed) to 
 make good these amounts ? 
 
 A. If B & Co. were both in A's service, unless further negli- 
 gence appears on the part of the first named than is described 
 in the above statement, Ave do not think that B can be held to 
 make good C's default. 
 
 3. A, residing in New York, telegraphs B, his correspondent re- 
 siding in St. Louis, Purchase and ship for my account 500 bales even 
 running middling cotton at 10 cents 1 o. b. " B replies : "Order ex- 
 ecuted and cotton being shipped. " When B receiv^es the cotton 100 
 bales are rejected for cause, mixed and falsely packed, etc., and mean- 
 while the market has advanced. Can A demand of B that he shall 
 supply the 100 bales of like grade, even though A had placed the pur- 
 chase at Liverpool ? 
 
 A. If B shows no negligence in the matter, Ave do not think 
 that A can require him to make up the deficiency. If instead 
 of buying a specific lot of cotton B contracted for the deliA^ery of 
 
PRINCIPAL AND AGENT. 
 
 423 
 
 500 bales of the quality and condition specified, he can insist 
 upon the sellers in St. Louis fulfilling their engagement. 
 
 4. If I lii'e a salesman on commission, giving him one-half profits 
 on his trade or sales, and (in order to guard against sales that might 
 be made for the commission) agree that he shall stand half the losses, 
 and pay him 1 per cent, for collecting the bills, every week, together 
 with the amount of commission due, is he a partner ? That is, if he 
 collects $400 or $500 and makes no return, is he not subject to crimi- 
 nal prosecution ? 
 
 A. All arrangement of the character described, if all the 
 facts are stated, would not constitute the salesman a partner. 
 But if he were authorized to collect money, and paid a commis- 
 sion for doing it, a little delay in turning over the money might 
 not have w^arraiited his arrest. 
 
 5. Is there any way to give any one an interest in the profits of a 
 business, without at the same time giving him any of the rights of a 
 partner ? 
 
 A. A clerk wdio receives a certain stipulated percentage of 
 profits for his services in lieu of wages, is not necessarily a part- 
 ner, and without further agreement has neither the rights nor 
 liability of a partner. Or one may become a special partner by 
 publication without any right to interfere in the management of 
 the business. 
 
 6. A question arose, if a man in my employ who has no salary, 
 but only an interest in the profits of my business, can he be considered 
 my partner ? 
 
 If he has no salary, but has to share profits and losses, is he my 
 partner ? 
 
 His name don't appear in the firm in either instance. 
 
 A. A person who is held out to the public as an active part- 
 ner in the firm, can be held responsible as such by tliird parties, 
 no matter how lie is paid. But " it is well settled that a contract 
 to pay one employed in a certain business a salary equal in 
 amount to a certain proportion of the profits, will not make such 
 a person a partner." Miller v. Bartlett, 15 S. <fe R., 137; 
 Stocker v. Brockelbaiik, 5 E. L. <t E., 67 ; Hodgman v. Smith, 
 13 Barb., 302 ; Parsons on Contracts, vol. 1, page 162. 
 
 If the one thus employed lias to share losses as well as ])rofits, 
 he would seem to be a partner ; but even here, as between the 
 
424 
 
 PRINCIPAL AND AGENT. 
 
 man and liis employer, this may be regulated by agreement, so 
 that the former would have no further privileges as a partner 
 than are named in the contract. 
 
 7. Is there any statute law for tlie punishment of persons employed 
 by merchants, who take a percentage from sellers unknown to their 
 principals, upon the amount of goods they buy from time to time ? 
 
 A. There is no statutory penalty for the breach of duty speci- 
 fied, but the principals can recover for their own any such per- 
 centage received by their unfaithful agents. 
 
 8. We give to one of our workmen a percentage on gross amount 
 of sales in lieu of all other compensation for his services. We sell our 
 goods packed in boxes and barrels, charging for same, with the under- 
 standing with the purchaser that they (the boxes and barrels) can be 
 returned and deducted from bill. Should the amount of boxes and 
 barrels be deducted from gross amount of sales, it being understood 
 they were to be returned, when sold, and amount paid on them as a 
 deposit ? 
 
 A. The expenses of packing, etc., even if the boxes were not 
 credited on their return, would not form part of the gross 
 amount of sales, on wliicli a salesman could collect liis com- 
 mission. 
 
 9. I made arrangements with a New York commission house 
 to sell their goods in Boston, they to allow me a certain commis- 
 sion for selling, I paying all my expenses. They have just rendered 
 me the first account of my sales, and have only allowed me commissions 
 on the net amount, deducting 5 per cent, from each sale. Nothing 
 was said at the time of making arrangements, if the commission 
 should be on the net or gross amount. I claim that they have no right 
 to deduct 5 per cent. I sell the goods for a certain sum named by 
 them, and if they allow 5 per cent, for cash that is not part of my 
 transaction. I claim that if I sell the goods for 45 cents per yard, I am 
 entitled to commission on what that amounts to. 
 
 A. In the absence of any agreement or understanding to the 
 contrary, the commissions ought to be reckoned on the gross 
 amount. 
 
 10. Is a foreign agent selhng American produce, cost, freight and 
 insurance, entitled to his commission on the gross amount of invoice, 
 or only on said amount, freight being deducted therefrom ? 
 
 A. His commissions are charged on the amount collected of 
 
 the buyer. 
 
PRINCIPAL AND AGENT. 
 
 425 
 
 11. "When a buyer for an importing house, wliose duty it was to 
 buy goods in Europe, and who received salary for his services and all 
 expenses paid, severs his connection with the house, is he entitled to 
 take with him the correspondence between him, in the capacity of buyer, 
 and the manufacturer's in Europe, letters from his house here, memo- 
 randum of purchases, copy book for his orders and letters, price lists, 
 etc. ? or are these the property of the house that employed him, and 
 can the house legally claim them ? 
 
 A. Everything of this cliaracter tliat has come into the pos- 
 session of the house through him, is the property of the liouse, 
 and the hatter can legally claim it. 
 
 12. Suppose an employee of a firm or institution is hired for one 
 year from say February 1. His year of service expires and nothing is 
 said on either side in regard to a re-engagement, but the employee con- 
 tinues to perform his duties promptly and receives his salarly regularly 
 for several months or even years longer. Is the employer bound for 
 his salary to February 1 of each year, or may he dismiss his employee 
 any time during the year ? 
 
 A. Where a clerk is engaged for one year, his term of service 
 then expires, unless it is renewed directly or by implication. 
 How far his retention in service may be considered a positive 
 renewal of his engagement will depend on the circumstances of 
 eacli case, and there is no i)ositive rule applicable to such cases. 
 
 13. A family hire a young woman for general help in the house. 
 The first month they do not find her as capable as represented ; she 
 was unwilling to take directions, or to do the work as the family 
 wanted. Hoping she will improve they go on the second month. She 
 becomes more wilful in neglect of what is wanted, is impudent, and 
 the family tell lier that if she will not do as requested, she can leave, 
 and offer to pay her for the past month. She wants her full two 
 months' wages. Does the want of disposition and ability to do her 
 work satisfactorily to the family give them the right to discharge her 
 and pay merely for the time she has served ; or has she the right to 
 her full two months' pay, without regard to how she behaves or does 
 her work ? 
 
 A. She can collect lier two months' wages, as the law is now 
 administered in our minor courts. 
 
 14. If an employee engaged on weekly salary declines to work on 
 a legal holiday, can he compel payment for such day ? 
 
 A. A man engaged by tlie week at a weekly stipend must do 
 on every day of the week, Sundays included, the work necessary 
 
42G 
 
 PllIXCIPAL AND AGENT. 
 
 and proper to be done in the line of his vocation. The farm 
 laborer is expected to feed the cattle and milk on Sundaj-s as on 
 other days, and must harness the horses, etc., and drive his em- 
 ployer's family to church if that is in the line of his duty. If it 
 is necessary or proper for a clerk or other salaried person to work 
 on a legal holiday, he cannot demand the pay unless he per- 
 formed the duty. 
 
 15. Suppose A hires B January 1st for one year. On July 1st A 
 notifies B that unless he is at business at 8 a.m., he will be fined two 
 cents per minute after that time. Can this fine be deducted from B's 
 salary ? 
 
 A. The employer cannot enforce a fine of tliis character, it 
 being in the nature of a judicial proceeding to recover damages. 
 But if the employee fails to keep proper liours, and the employer 
 should discharge him, the fact could be set up as a defence 
 against any action for breach of the contract. 
 
 1 6. A lawyer agrees with me for a certain amount of money, 
 which IS paid him, to search the title and collect other matters of in- 
 terest concerning an estate. Arriving at where the estate is situated 
 he finds he has no time to remain to investigate it, as it will interfere 
 with his other business, and he places the matter in the hands of 
 another lawyer who is acquainted with the case, and on his return in- 
 forms us to that effect. After a while lawyer No. 2 sends No. 1 a 
 letter, giving his opinion of the case, and requesting $25 to commence 
 suit, or S5 for his trouble. No. 1 gives us the letter and requests the 
 money, but as there was an agreement between us that there were to 
 be no other charges than as above mentioned unless we realized some- 
 thing from the estate, I refused (for the information was not at all 
 satisfactory). Requesting my papers, title deeds, &c., which I had 
 furnished him and which he left with lawyer No. 2, he refused to re- 
 turn them unless paid the required $5. Can I compel lawyer No. 1 to 
 return those papers ? our business was with him and not with the one 
 whom he employed to do his work, for which he was paid ; and in the 
 event of his still refusing to return the papers, what method can I 
 adopt to compel him to return them ? or will it be necessary for me to 
 furnish him with $5, that he may forward it to his lawyer, that we 
 may get the papers ? 
 
 A. If tlicre is no loop-hole in a correspondent's agreement 
 with his lawyer, and it is a binding contract to the effect above 
 stated he has nothing to do with the demands of the second 
 lawyer, and can get back his muniments of title without paying 
 the '^5 demanded. But it would be in the highest degree hazard- 
 
PRIXCIPAL AXD AGENT. 
 
 427 
 
 ous for us to give a positive opinion of this kind, or any other, 
 without the written agreement, if there was one, before us ; or 
 if there was no writing, without a close examination of the wit- 
 ness, in order to know precisely what lie could swear to. And 
 unless our correspondent is very sure that there is no flaw in his 
 contract, or his means of providing it, no doubt it would be 
 cheapest to pay five dollars. 
 
 17. A entars the service of B under a contract to receive in lieu 
 of a salary a fixed commission upon all the sales of the house. Upon 
 the termination of the contract the question arises upon what A is to 
 charge his commission. A claims that he is entitled to commission 
 upon all orders which have been taken and accepted by the house with- 
 out reference to whether or not the goods have been delivered and 
 charged. The question seems to resolve itself into this . When has 
 the sale been so far effected as to entitle A to his commission — when 
 the orders have been taken in good faith and accepted by the house, 
 or when the goods have been charged up and delivered ? 
 
 A. Where a salesman is allowed a commission on whatever 
 he can sell, he is entitled to charge it on all the accepted orders 
 he may bring in, no matter when they may be charged or when 
 the goods are to be delivered. But one who has a given com 
 mission on all the sales of a house for a certain year, or period 
 of time, can only reckon it on the amount entered in the sales 
 book for that limit of time. He would demand it on the earliest 
 sales written in the book, after the date of specified beginning, 
 although the orders were taken before, and lie could not claim it 
 on sales not yet entered, although the orders were on the file to 
 be executed. 
 
 18. A agreed with a certain party to sell goods for the same 
 against commission, without specifying in the original agreement 
 whether the commission was to be paid on gross or net amounts. The 
 goods were sold on regular dry goods terms, say 5 per cent. 30 days, 
 6 per cent. 10 days. The party for whom the goods were sold, claims, 
 when settlement is made at the close of the season, that he ought to 
 pay commission only on the net amount of the sales. What is the 
 mercantile rule in such cases ? 
 
 A. The rule is to reckon commission on the amount actually 
 charged to the parties who purchased the goods, and which they 
 were expected to pay. 
 
'428 
 
 PRINCIPAL AND AGENT, 
 
 19. Previous to first of January a jobbing firm in this city re-en- 
 gaged the services of an assistant who had lor some time previously 
 been employed by them in the double capacity of buyer for one of the 
 departments of their business and general salesman. The re-engage- 
 ment was for the whole year and was for aforesaid assistant to be 
 buyer of said department. That his usefulness as a general salesman 
 was to continue was at least mutually understood, but was treated as a 
 matter of secondary importance. Recently the employer, by the exer- 
 cise of authority, has prQ,vented the employee from performing his 
 unties as a buyei, and does it solely himself at present. At the same 
 time he instructed employee to devote himself for the remainder of the 
 year to sales, as he would either buy for the department himself or 
 procure some one else to do it. Employee simply demurred. In reply 
 he was told that he had no cause for complaint as long as his salary 
 was regularly paid. Employee suggested that the contract called for 
 more on employer's part than the mere payment of money, as his re- 
 putation as a buyer and his general standing in the trade were hable 
 to be injured by such action on his part, as well as loss of experience 
 by being prevented attending to his duties as the contract called for on 
 his part. It is not alleged that employee has been either negligent, 
 incompetent, or unfaithful. Under these circumstances the questions 
 proposed are . What can employee best do ? Is he obliged to do as 
 employer says under pain of forfeiting salary, or can he maintain the 
 position intrusted to him for the whole term of the contract ? Failing 
 w^hich on employer's part, can he ti'eat it as a broken contract and re- 
 cover salary to end of year without rendering further service as 
 salesman alone, so long as they refuse to permit him to serve as buyer 
 and salesman ? 
 
 A. As the contract was not apportionablc, so much time and 
 pay as buyer, and so much additional as salesman, it nuist be 
 held to its indivisibility. A distinct engagement to employ a 
 person to render a particular service is not fulfilled by an offer 
 to give the same pay for other work in lieu of it. If tlie person 
 hired is therefore refused the opportunity to perform the service 
 according to his engagement, he has the right to treat it as 
 broken, and no hunger binding on him in any of its parts. He 
 must offer to perform the work undertaken, and being refused, 
 must do his best to obtain a re-engagement elsewhere. He can 
 then sue for the loss he has sustained during the year. 
 
 20. ^Ir. A, stranger to us. solicits the privilege of taking orders 
 for our goods while canvassing for other houses. He sends several 
 orders, which we execute and send our invoices to the customers. In 
 the course of time we are informed that our bills have been paid to 
 Mr. Aj who receipted in our name, but without having authority from 
 
PRINCIPAL AND AGENT. 
 
 429 
 
 us to collect. Have we recourse upon the parties to whom we Gent the 
 goods, or upon Mr. A ? 
 
 A. Where the selling agent 1ms never had possession of the 
 property, and no authority 'to collect has been implied from the 
 previous dealings of the parties, the rule of law would be against 
 the right of the agent to collect. Tlie difficulty is that in the 
 local courts at the West these cases are very likely to go against 
 the creditor, on the ground that houses which intrust an agent 
 with samples to sell, and recognize him by filling the orders he 
 obtains, ought to be held responsible for his honesty, and if he 
 collects the money for the goods in their name, even without 
 their authority, they ought to suffer the loss. This is not the 
 rule of law, but it will be found very difficult to enforce the lat- 
 ter against such a strong public sentiment prevailing in the rural 
 districts. 
 
 21. A and B own adjoining town lots here. A employs C, an ir- 
 responsible party, under contract to cut trees standing on his lot, which 
 fall upon and injure B s house. Is not A liable to B for all damages 
 sustained ? 
 
 A. Where wor'v is done by contract, and the employer has no 
 control over the manner of its execution, lie is generally not 
 liable for damages ; but we doubt if the above case could be 
 made to come under this rule, and think that if the damage can 
 be shown to have been the result of negligence A may be held 
 liable. 
 
 22. Two or three months ago I hu-ed a man on the dock for two 
 or three hours to truck on handtruck some bales for me. In heading 
 up one of the bales from his truck it struck another bale (which 
 had been headed up previously) and knocked it down. On the other 
 side of the bale which was knocked down was a man (who was em« 
 ployed by the captain of the boat which received the bales) in a stoop- 
 ing position, trying to arrange some bales so he could load the boat. 
 The bale fell upon him and broke his leg. He has commenced suit 
 against me, claiming $5,000 as damages, charging carelessness on my 
 hired man's part. Does the law hold me responsible for the acts of a 
 man temporarily in my employ ? And if I can prove such falling of 
 bales to be a common occurrence, which every one working near them 
 should be on the lookout for ; also that I employed this man because I 
 knew that he understood the work, and had always found him a care- 
 ful man, have I a good defense ? 
 
430 
 
 PRINCIPAL AND AGENT, 
 
 A. An employer is liable in damages for the negligent act of 
 his servant, done in the course of his employment, unless the 
 negligence of the party injured contributed in i)roducing the in- 
 jury. If the exercise of ordinary prudence would have saved 
 the man from a broken leg he cannot recover damages ; but we 
 have some doubts whether the vicinity of cotton bales in process 
 of being handled can be shown to be dangerous enough to sus- 
 tain this defense in the case of one whose vocation called him 
 into the position he was occupying near them. 
 
 23. How far does the liability of a principal as to the acts of his 
 agent extend ? If an agent exceed instructions in making a contract, 
 can the principal be held, always supposing that the other party to the 
 contract does not know to what extent the agent's powers are limited ? 
 
 A. The principal can be held to a third party for the act of 
 his agent within the scope of his apparent authority without re- 
 gard to the limitations the principal may have privately placed 
 upon it. But wdiere the agent has no apparent authority except 
 such as may be in writing signed by the principal, third parties 
 contract at their own risk if they do not acquaint themselves 
 with the extent of the agent's powders. 
 
 24. Three years ago, while I was in Germiany, my present em- 
 ployer, an importer of this city, offered me a situation through kis 
 agent there. I accepted it, and on my leaving for this country the 
 agent paid me, for the account of my employer, a sum of money in 
 order to enable mo to make the voyage. Neither on my arrival nor 
 afterward during these three years did my employer ever request me 
 to pay him back said sum ; nay, he never hinted at it. Recently, 
 however, at only one day's notice he withdrew said sum from my 
 monthly salary. Has he any right to do so ? 
 
 A. The answer turns upon a point to which no reference is 
 made in the statement. If the money advanced was a free gift 
 the giver cannot recall it, and now charge it to the beneficiary. 
 But if it was an advance with no agreement that it should be a 
 gratuity, the employer has the right to make the clerk account 
 for it, and to deduct it from his salary however inconvenient it 
 may be to our correspondent. 
 
 25. What is the law with reference to the powers of department 
 buyers in binding their principals in the placing of orders for goods to 
 be delivered at some future day or season ? For instance : In dry 
 
PRINCIPAL AND AGENT. 
 
 431 
 
 goods jobbing houses, are such orders binding without the signature of 
 the firm they (the firm) not being privy to the transaction ? Assum- 
 ing your answer to be in the affirmative, would a circular sent to fac- 
 tors and agents notifying them that "all orders placed by heads of 
 departments are not binding without the signature of the firm to each 
 order, " be held good in the future ? 
 
 A. Parties are bound by the act of tlicir agent on cither 
 of two grounds. One of these is that they have given to the 
 agent express authority to perform the act for them ; the other 
 is that by tlieir own words or acts they have justified the 
 belief of others that the agent liad this authority. Houses who 
 send a buyer or clerk in their employment out to make purchases 
 and contracts for them and invariably accept the same without 
 question, will very soon be liable to all who thus deal with them 
 for whatever the agent may do within the scope of this apparent 
 authority. 
 
 A notice, such as is suggested above, if duly served, will coun- 
 teract this presumption, and after such notice dealers rely on his 
 representations as to his authority at their own peril. But even 
 in this case, if the firm has authorized a special purchase or con- 
 tract, and this can be established by legal proof, the principals 
 are held by the order of the agent precisely as if they had subse- 
 quently confirmed it themselves. 
 
 26. hire our help in month of April, and it is understood that 
 we are to keep them for one year, and they are to remain in our em- 
 ploy one year, wages paid w^eekly. Now what we w^ant to know is 
 this : If on account of dull times, we are compelled to stop our ma- 
 chinery on an average of two days in the week, and have no work for 
 the employees, are we legally bound to pay them full time, work or no 
 work ? No agreement was made, or nothing said to that effect at 
 commencement of the year. 
 
 A. If the contract was absolute for a year, and the laborer 
 presents himself for work, the employer is bound to pay him, 
 wiiether he has work for him or not. There should be so good 
 an understanding, however, that a readjustment is possible 
 although the year has actually commenced, if the contract was for 
 full work, and this cannot really be furnished. 
 
 27. A is Brooklyn salesman for B & G, and sells goods of a dif- 
 ferent line for C, on 30 days, to F, a grocer. At the expiration of said 
 time C's collector called on F for amount due, and is informed that A 
 
432 
 
 f 
 
 PniXCIPAL AXD AGENT. 
 
 had collected it, after informing F that he had authority froin C to 
 collect, and since that time A has disappeared from the citj. and as A 
 was not authorized to collect by C, cannot C collect it from F, or must 
 C lose it ? 
 
 A, "An agent employed to make, or negotiate, or conclude a 
 contract, is not, as of course, to be treated as having an inciden- 
 tal authority to receive payments wliicli may become due under 
 feucli contract. " (Story on Agency, sec. 98.) Such an implica- 
 tion may arise in some cases from usage, or the previous dealings 
 of the parties, but not from the statement of the agent liimself, 
 unsupported by such circumstances. It has been held in some 
 cases that a power to sell goods includes a power to receive pay- 
 ment, at the same time, on the sale, but other cases hold that 
 this authority does not extend to receiving payment at a subse- 
 quent time, unless there be some other proof of it than a mere 
 power of sale. (Seiple v. Irvin, 30 Penn., sec. 513 ; Low v. 
 Stokes, 32 X. J. [Law], 249.) In Higgins v. Moore, 34 New 
 York, 417, the New York Court of Appeals held that a broker 
 commissioned to sell grain, and who, as in the above case, repre- 
 sented that he had authority to receive payment, was not so au- 
 thorized, though the referee found that such a course was justified 
 by mercantile usage in New York. The Court refused to allow 
 the usage to control, tlie decision being based mainly upon the 
 ground that the broker had not possession of the property. For 
 this reason the decision seems to apply to the case of the com- 
 mercial agents, who merely carry samples, and we should con- 
 sider it good authority against the right of such agent to receive 
 payment, without express authority, or authority implied from 
 previous dealings of the same sort without objection. 
 
 28. Has a man to work on the Fourth of July, Thanksgiving, 
 Christmas, New Year's, and Washington's Birthday, and to do chores 
 on Sunday, if he works on a farm by the month for one year ? 
 
 A. The above is evidently from a laborer or his friend. We 
 answer that a man who engages to work on a farm is bound to 
 perform all necessary service on Sundays and holidays. The cows 
 must be milked, the stock fed and watered, stables cleaned, 
 horses groomed and harnessed (if the family must ride to church 
 or elsewhere), wood brought in, fires kindled, paths cleared of 
 
PRINCIPAL AND AGENT. 
 
 433 
 
 snow, and such other duties attended to as cannot well be neg- 
 lected. This is understood to be part of the contract when one 
 engages by the month for such service. 
 
 29. One of our traveling salesmen takes an order on credit from 
 a firm in Missouri. On face of this order, under signature of the 
 purchaser, our salesman writes accepted, goods to be shipped at 
 once/' signing our name thereto. Under the laws of this State oi 
 Missouri would we be liable for damages (if any could be proven), were 
 we nevertheless to decline to fill said order ? 
 
 A. If the salesman had no real or apparent authority to con- 
 firm a sale until it was approved by his principal, such an in- 
 dorsement would not legally bind his employers. 
 
 30. We manufacture cotton yarn and are merchants. A party 
 claiming to represent a wholesale house calls to sell us a bill of goods. 
 We tell him we will give him an order if he will take our yarn in pay- 
 ment for the bill at a certain price. He agrees to do so. We give him 
 an order. In due time the goods arrive. We write to the agent (who 
 is known to us personally and in a neighboring town) that the goods 
 have arrived and the yarn is subject to his order. He directs us to 
 ship to A B one bale of yarn, which is worth about one-fourth our bill 
 with his house. We do so, and wait for further instructions regarding 
 the balance ; hearing no more from him we write to him, but have no 
 reply. We then write to the house direct in Philadelphia. They claim 
 that they had no such trade, and refuse to allow credit for the bale of 
 yarn sent to A B, or to take yarn for the bill. The agent personally 
 is insolvent , so is A B. How are we to settle this ? 
 
 A. If " the party claiming to represent " the wholesale house 
 really was the authorized agent of such house, the case in law 
 and equity is very clear, and the sellers of the goods can be held 
 to the contract. But if, as appears likely from the narrative, the 
 agent acted without due authority, his claim having no proper 
 foundation in fact ; or if he was an agent, but there is no availa- 
 ble evidence of this claim, our correspondents are in either case 
 without redress. They must pay for the merchandise and lose 
 the yarn. 
 
 31. If our salesman takes an order for goods at a lower price than 
 authorized, are we compelled to fill the same, or are we liable for 
 damage in case we decline to do so ? 
 
 A. The salesman having general authority to transact the 
 business in question, any private instruction as to price would 
 28 
 
434 
 
 PRINCIPAL AND AGENT. 
 
 not affect the validity of his sales, and the firm is bound by his 
 contract, and must either fill it or pay damages. 
 
 32. If we do not choose to fill any order taken by our salesman 
 for any reason whatever, are we legally holden for damage ? 
 
 A. A traveling salesman who solicits orders for a commis- 
 sion, and is not held out as the special agent of a particular 
 house, would not necessarily bind the latter to execute his con- 
 tracts ; but for one who is in the regular service of a firm, and 
 so presented to the public, the principals are as much bound 
 within the scope of his apparent authority , as for their own 
 undertakings. 
 
 33. A buys through B, who is a broker, from C, who is agent for 
 D, who is a manufacturer, 100 barrels of merchandise for future de- 
 livery. Three days after C has confirmed the sale, and B has given 
 certificates of purchase and sale to A and C, C notifies A that as D 
 w^ould not confirm the sale the goods would not be delivered. From 
 whom is A to claim damages in case of non-delivery of the merchan- 
 dise? 
 
 A. If D gave to C as his agent real or apparent authority to 
 make the contract in question, then he is bound by it, and cannot 
 thus repudiate it ; or if he does, can be made to respond in 
 damages for its violation. If C had no such real or apparent 
 authority, then the contract is void ; but if, through his under- 
 taking in excess of his lawful authority, he has inflicted any loss 
 or damage thereby on A, then C can be held liable to A for what- 
 ever he may suffer directly from the failure. 
 
 34. Is there any law in this State which renders necessary the 
 giving of notice to quit as between an employer and domestic servant, 
 who "is hired (verbally) by the month ; and if so, will you state its 
 provisions ? 
 
 A. "A hiring at so much a day, week, month or year, 
 no time being specified, is an indifferent hiring, * * * 
 and is determinable at the will of either party." (Wood's 
 Master and Servant, 272.) We know of no New York statute 
 changing this rule ; but generally speaking our civil justices are 
 a law unto themselves in disputes between employers and their 
 servants, the former having little chance where there is any sort 
 of a leg for the servant's case to stand upon. It is therefore 
 
PRINCIPAL AND AGENT. 
 
 435 
 
 wise to give a notice that will be accepted as sufficient by the 
 servant, or to have some agreement before witnesses concerning 
 the termination of the contract. 
 
 35. A needy borrower applies to the treasurer of a savings bank, 
 who is also its attorney and counsel, for a loan of money. This treas- 
 urer and counsel agrees to furnish the bank's money at legal interest 
 on the borrower paying all legal expenses (examining and searching 
 the title to the land offered as security, drawing the bond and mortgage 
 and recording the same), and also paying him, the treasurer and coun- 
 sel, a bonus (called a commission) of 5 per cent on the amount loaned. 
 The bank itself gets none of this bonus ; but its treasurer and coun- 
 sel, its agent for loaning its funds, gets all of it. The bank knows 
 nothing about it. If the bank shares in the commission the loan would 
 clearly be tainted with usury, which if pleaded all the money lent 
 would be lost. But how is it where its treasurer and attorney, its 
 agent, demands and receives such commissions ? 1 hear that the 
 courts have recently decided such a case, but don't hear when or where. 
 
 A. We have seen no report of such a decision as that indicated 
 by our correspondent, and so far as we know the question raised 
 has never been directly decided. In the case of an agent, it has 
 been held in this State and elsewhere that usury taken without 
 the knowledge of the principal does not affect the security. 
 (Condit V. Baldwin, 21 N. Y., 219.) On the other hand, with re- 
 spect to corporate officers, it is said that " if the officer or agent 
 of a corporation is clothed with a certain power, either by char- 
 ter, statute, or by the lawful act of the corporation, and if he 
 uses that power for an unauthorized or even prohibited purpose, 
 or fraudulently, yet the corporation will be answerable for his 
 action to any innocent third person affected thereby." (Morse 
 on Banking, 106.) In the case specified, something would pro- 
 bably depend upon the extent to which the business in hand was 
 left to the treasurer and counsel, and this may have been so 
 complete as to make it easy for a court to decide, in accordance 
 with our citation, that his act was that of the bank, notwith- 
 standing that he alone received the profit of the usurious exac- 
 tion. We have no doubt that the so-called commission would be 
 held to constitute usury, in harmony with existing adjudications. 
 
 36. Ct. — In April, 1879. wo hired a man to work on our farm for 
 a year, we to furnish him rent and fuel and a certam sum in money 
 per month besides. There was no written agreement. A few daya 
 
436 
 
 PRINCIPAL AND AGENT, 
 
 ago he said he had found another job and was going to leave, which 
 he did two days afterward. He does not deny that he was hired for a 
 year, nor had he found any fault with his position. 
 
 1. Is he liable for the loss and inconvenience arising from his 
 leaving without notice ? 
 
 2. Is he liable for the rent of a house, which may be unoccupied 
 the remainder of the year ? 
 
 3. While he was with us he lost some 20 days, visiting and other- 
 wise. Can he be charged with fuel and rent during this time, as his 
 family occupied the house all the time ? 
 
 4. Is he entitled to his wages for the last month ? He worked 
 only three weeks of it. 
 
 5. If the conditions had been reversed, and we had turned him off 
 without notice, how far should we have been liable ? 
 
 6. If there had been a written agreement would it occasion differ- 
 ent answers to the above questions ? 
 
 A. Where a servant improperly leaves his employment during 
 the currency of the week, month, quarter or year by which he 
 is paid, he is not entitled to wages for any part of that week, 
 month, quarter, or even year, though there has been a strong 
 judicial protest in New Hampshire against the hardship of this 
 rule when applied to a yearly hiring and payment, and the Con- 
 necticut courts may ultimately decide to follow the exception 
 rather than the rule. They have already decided that if one is 
 wrongfully discharged during the term, he may treat the contract 
 as rescinded, and sue for the labor actually rendered. (Ryan v. 
 Dayton, 25 Conn., 194.) This decision furnishes an answer to 
 query No. 5. As the law now stands, the answer to query No. 
 4 is that no part of the last month's wages are due. In accord- 
 ance with the reason of the rule first above stated, our corres- 
 pondent's third question should be answered in the affirmative ; 
 but we know of no direct adjudication on the point. As to Nos. 
 1 and 2, it may be said that the delinquent employee can be 
 charged with direct actual damages arising out of his breach of 
 contract, but we are inclined to think it doubtful if he could be 
 made responsible for the house rent beyond the period of his 
 occupancy. These answers Avould not be different if the con- 
 tract had been in writing. 
 
 37. Ct. — ''Can a man collect wages for services rendered on 
 Sunday." 
 
 A. The Sunday laws are variously interpreted in the different 
 
REAL PROPERTY. 
 
 43T 
 
 States. In Connecticut only " works of necessity and mercy " 
 can be legally performed " on tlie Lord's day." If the wages were 
 fairly earned by the performance of any such works as are within 
 the exception, they can be legally collected. 
 
 KEAL PROPEETY. 
 
 1 . Can a foreigner hold and transfer real estate in this State, he 
 never having declared his intentions of becoming a citizen ? 
 
 A. An unnaturalized alien cannot hold and is not authorized 
 to convey real estate in New York without making a declaration 
 of his intention to become a citizen. But a law was passed in 
 1877 declaring that the title of any citizen to real estate shall 
 not be questioned by reason of any alienage of former owners, 
 so that a title from an alien would seem to be good if given to a 
 citizen. 
 
 2. Some 70 years ago a native of New York settled in one of the 
 British West India Islands, married and had issue there a son and 
 daughter, who settled in England, married there and have children. 
 
 Query : Can these children born in England inherit or take by de- 
 vise real estate in this State ? Further, does the last treaty between 
 the United States and Great Britain, negotiated by Mr. Reverdy 
 Johnson, alter the statutes of claims relative to bequests or inheritance 
 of real estate, and supersede State law ? 
 
 A. The statutes of New York provide that aliens may inherit 
 real estate and take such property by devise. The son and 
 daughter first in descent above noticed would be citizens of the 
 United States, and if they were ever in that country their child- 
 ren would also have the same right. 
 
 3. A B has sold to Y Z a plot of ground on which to build two houses, 
 to be paid for, with interest and taxes within one year from date of 
 sale, or as soon as the houses are completely finished. Now supposing 
 that after the houses are partly built Y Z fails, and a mechanic's lien 
 is established for the benefit of the dealers who supplied the building 
 materials, will the lien attach to the land as well as to the buildings, 
 the fee being still in A B, who by his contract is only to give a deed 
 on actual payment of the purchase money ? And if so, how can he 
 protect himself ? 
 
 A. By the New York county lien law (chap. 379, Laws of 
 1875) it is expressly provided that the land on which a building 
 
438 REAL PROPERTY. 
 
 may be erected, shall be subject to the lieii only to tlie extent of 
 tlie interest which the person who caused the building to be con- 
 structed has therein, if he has less than fee simple estate. In 
 this case his interest in the land would be nothing whatever, after 
 forfeiture of his right to have it conveyed to him. 
 
 4. I purchased 100 acres of land in Illinois, and my wife's brother, 
 then being in Chicago, informed me that he could sell it for a good 
 price if 1 would deed it to him. I did so, naming the consideration 
 $1,000. He, after a few months, informed me that he could not sell 
 it, and would deed it back to me, but did not do it ; but deeded it to 
 my wife (who is his sister) and my three children, without any con- 
 sideration only nominally $1,000. I did not know of this until last 
 summer ; a gentleman wished to buy it, and discovered that the title 
 was not in me. Have I lost the ownership of that land ? I have 
 never received a cent for it. Is the conveyance legal without some 
 consideration ? I wish to get it back to give my youngest daughter, 
 who was then unborn, an equal interest in it. 
 
 A. An application to a court of competent jurisdiction, with 
 proof of the facts, will, undoubtedly, result in an order cancel- 
 ling the deed to the wife and children, and compelling the trustee 
 to rcconvey to the husband and father according to the condi- 
 tions of the trust. 
 
 5. Does the land carry the buildings on it ? I buy apiece of ground 
 for which I hold the deed, and afterward some buildings are erected 
 on it, do land and houses belong to me in the eye of the law, by virtue 
 of my possession of the deed for the former, provided there is no 
 writing in existence showing who is the actual owner of the latter ? 
 
 A. The land carries the buildings on it, unless some other 
 person by lease, lien, or other right can claim an interest. 
 
 6. A, who is possessed of real estate, marries B, who is not pos- 
 sessed of any ; B dies, leaving children by A. Does her dower right 
 in A's property descend to her children, or does it revert to A ? If to 
 the former, can A dispose of it ? The real estate is situated in New 
 Jersey and Pennsylvania. 
 
 A. The " dower right " alluded to, is the right of a widow in 
 the real estate of her deceased husband ; as he is living at her 
 death, there is nothing to descend from her to the children. 
 
 7. In 1867 I purchased real estate in this city (N. Y.) ; in 1869 
 the grantor died. Now his widow, not having joined in (and perhaps 
 without previous knowledge of) the conveyance, claims dower. The 
 
REAL PROPERTY. 
 
 439 
 
 consideration was $3,000, less a mortgage of $1,500, then and now on 
 the property, and the gross income therefrom has only amounted to 
 enough to pay the interest on the mortgage. Please say how much 
 she should receive. 
 
 A. The widow's dower is one-third the value of the property 
 in 1867, at the time of its sale, less the incumbrance, if it ex- 
 isted before the marriage or she joined in it. If the annual 
 rents and profits have been only enough to keep down the inter- 
 est on the mortgage, as stated, the above is all she can receive ; 
 if more, she could recover one-third of. this net amount for a 
 period of six years prior to her making claim. 
 
 8. Some years ago my father, now deceased, erected a house with 
 a party wall, said to be on the centre of the line dividing his lot from 
 the adjoining vacant lot. The vacant lot has passed through several 
 hands, and the present owner is building on this lot and using the party 
 wall. Can we collect from the party for use of wall ? 
 
 A. When one owner set his house so as to cover a portion of 
 the land of an adjacent owner, who thereupon erected a house 
 adjoining this, and inlaid its beams into this w^all to the line 
 which divided the two estates, it was held not to constitute it so 
 far a party wall that the first could call upon the other to pay 
 for any part of it. Having placed it upon the second man's 
 land, it gave him a right to use so much of it as stood upon his 
 land, unless this was done by some agreement between them.^ 
 Orman v. Day, 5 Flor., 385 ; Sherred v. Cisco, 4 Sandf., 480. 
 And where by agreement between two adjacent owners of lots 
 that one might erect a wall for building partly on liis lot, and 
 partly on the adjacent lot, and the other was to pay for half the 
 wall when he, his heirs, or assigns, should build on his lot and 
 use it as a party wall, it was held to be a personal covenant, and 
 did not bind the assigns of the one, or give the assigns of the 
 other the right to recover for the half of the wall when occupied 
 by the erection of a building. — Cole v. Hughes, 54 N. Y., 444. 
 
 9. A party sold a house in the city. In making sale nothing was 
 said about chandeliers ; has the seller the option of taking or leaving 
 them ? 
 
 A. Gas fixtures are not part of the liouse, but go with the 
 furniture, and may be removed unless there is something ex- 
 
440 
 
 REAL PROPERTY. 
 
 pressed or implied in the sale, by which they can be claimed as 
 included in it. A man who should sell a house empty of every- 
 thing but the chandeliers, might fairly be held to have sold it as 
 it stood, these to go with the house. 
 
 10. A buys a parcel of real estate of B and receives a warrantee 
 deed of B : B is a trustee for a railroad company and holds the land 
 in trust. B neglects or refuses to have his deed recorded. A loses a 
 sale thereby ; what is A's redress ? What is the first step ? Three 
 years have passed since making of the deed. B promised to attend 
 to it immediately. 
 
 A. If A has the deed in his possession, as he should have, he 
 can have it recorded himself. We infer, however, that he has 
 not, and such being the case, he will find it necessary to go to a 
 lawyer, who may bring an action to compel B to perfect the title, 
 or sue for damages for breach of covenant for titles, as A may 
 prefer. 
 
 11. L bought real estate of B and wife, the property being in the 
 name of the wife. L received warranty deed signed by B and wife, 
 with names of two witnesses, one being the notary who attached the 
 usual certificate. Afterward B and wife claimed that one witness 
 signed the deed before the wife, and not in her presence, and that in 
 consequence the title did not pass. L of course knew nothing of this 
 fact, but received the deed as correct. Now the Judge decides " no 
 title passed, " although he was himself the attorney of L and delivered 
 the deed as being correct. What redress has L ? 
 
 A. There must be something: more in the case than is set 
 forth in the statement. If B and wife actually executed the 
 deed, and delivered it, the irregularity quoted would hardly viti- 
 ate the title. If the case is fairly presented above, and there is 
 really a cloud on the title, we do not see why B and wife may 
 not be compelled to remove it and to perfect the conveyance. 
 
 12. I am a large owner of land in the Adirondack country, and 
 as there is a great noise of silver and gold discoveries in that section 
 and hundreds of claims entered, etc., I should much like to know what 
 the laws of our State, (N. Y.,) are regarding such entries, and what 
 title they can make on my property which 1 have owned for more than 
 20 years, and taxes paid, if such discoveries should be made? 
 
 A. All mines of gold and silver, and with certain qualifica- 
 tions other mines also, though discovered upon private property 
 in this State, (N. Y.,) belong to the State and not to the land- 
 
REAL PROPERTY. 
 
 441 
 
 owner. The discoverer of any gold or silver mine, however, has 
 tlie privilege of working it for 21 years and taking the entire 
 product. If the landowner refuses his consent to enter upon and 
 break up his land for the purpose of mining the ore, commission- 
 ers will be appointed by the Supreme Court to assess damages 
 for such use of the land. 
 
 13. I am the owner of a three story house 42 feet deep, which 
 was connected by a party wall of eight inches with a house of the 
 same depth. About three years ago my neighbor tore down his house, 
 and put up a five-story house 60 feet deep. A short time ago I had my 
 lot surveyed, and find that my neighbor has encroached on my lot to 
 the extent of 1^ inches in front and 5^ inches in the rear of my lot, 
 on which he built the extension of 18 feet. Can I compel my neigh- 
 bor to remove his wall ? 
 
 A. The facts stated are not sufficient to decide the question. 
 The line built upon may have been established by prescription, 
 through the existence of a line fence for 20 years, so that it is 
 now too late to correct the error ; and this prescription may 
 have taken place either during the present ownership or prior to 
 it. On the other hand, if our correspondent knew that his 
 neighbor was building over the line, and permitted the work to 
 go on without objection, he is now estopped from raising the 
 point. But if there has been no prescription, and the true line 
 has only now been discovered, the law doth give, and the court 
 must award it, at whatever cost to the intruding party. 
 
 1 4. The side wall of my house (built last year) encroaches one and 
 a half inches on my neighbor's lot, and he will listen to no kind of ar- 
 rangement. Must I remove the wall ? 
 
 A. It is an admirable principle that " where a man has been 
 silent when in conscience he ought to have spoken, he shall be 
 debarred from speaking wlicn conscience requires him to be 
 silent. " Therefore, if a man sees another building over his line, 
 knows that the builder is cncroacliing, but permits him to go on 
 without notice of his mistake, a court of equity would do the 
 highest justice in forbidding any subsequent rectification of the 
 error at the expense of the innocent party. But the application 
 of the principle has been subject to very rigid limitations. In 
 one case in Massachusetts (Brewer v. Boston and W. R. Co., 5 
 
442 
 
 REAL PROPERTY. 
 
 Met., 478), the parties verbally agreed on a line, not the true 
 one, and the plaintiffs stated to a purchaser from the defendant 
 that he (plaintiff') did not claim beyond it. Nevertheless, the 
 true line having been subsequently discovered, the Court held 
 the plaintiff entitled to recover it, though it embraced the de- 
 fendant's improvements. Bigelow says — " The principle upon 
 which these cases proceed is that there must have been, when 
 the incorrect line was acted upon, a knowledge of the true bound- 
 ary by the one party, and an ignorance of it by the other, in 
 order to estop the party from asserting it within the period of 
 limitation ; and this, though it may have been the intention that 
 the incorrect line should be fixed as the true one, and acted upon 
 accordingly. " In a New York case, decided by the Court of 
 Errors (Adams v. Rockwell, 16 Wend., 285), there was a dictum 
 by Chancellor Walworth to this effect — " The party whose right 
 is to be thus barred must have silently looked on, and seen the 
 other party doing acts, or subjecting himself to expenses in re- 
 lation to the land on the opposite side of the line which would 
 be an injury to him, and which he would not have done if the 
 line had not been so located ; in which case ferliain a grant 
 might he presumed within the twenty years. " In an earlier New 
 York case (Wendall v. Van Rensaler, 1 John Ch., 344), Chan- 
 cellor Kent said with much greater positiveness — " There is no 
 principle better established in this court, nor one founded on 
 more solid considerations of equity and public utility, than that 
 which declares that if one man, knowingly, though he does it 
 passively, by looking on, suffers another to purchase and expend 
 money on land, under an erroneous opinion or title, without mak- 
 ing known his claim, he shall not afterward be permitted to ex- 
 ercise his legal right against such person. " All the cases which 
 we have examined, however, demand that the party encroached 
 upon should know of the encroachment, and this in fact is no 
 more than just. A man ought not to lose his land by his neigh- 
 bor's error, Avhere he has not been in fault himself. In the 
 above case, it is probable that neither party was aware of the en- 
 croachment, while the wall was going up. In that case, we think 
 the party encroached on can compel its removal. 
 
REAL PROPFAITY. 
 
 443 
 
 15. A purchases a valuable house of B on leased grounds, Novem- 
 ber 1, title to pass and balance of purchase money to be paid February 
 1. Nothing was said in the agreement about insurance. Of course 13 
 holds the policies. Now we will suppose the building burns down in 
 January, what is A's position in regard to the insurance ? And ought 
 not A to have insurance effected on his account ? And in that case 
 how much of the insurance would be payable, and to whom ? 
 
 A. A's claim could only be upon B for fulfillment of contract, 
 inasmucli as tlie insurers of the latter not having notice, prior 
 to the fire, of A's inchoate interest in the property, would not 
 recognize that interest. 
 
 B having allowed A an interest in the property, would not find 
 it difficult to prove an " entire, unconditional, and sole owner- 
 ship, " as provided for in the insurance contract, and hence, 
 could not have trouble in collecting his loss from the companies. 
 
 Due notice to B's companies when sale of the property was 
 begun, with a recognition of A's interest by indorsement on the 
 policies, w^ould avoid any difficulty after the fire, and enable each 
 party to obtain indemnity according to their respective interests. 
 
 1 6. Can a man buy a house in a respectable neighborhood, and 
 transform it into a wholesale and retail liquor store, without the con- 
 sent of his neighbors ? If he does establish himself without consult- 
 ing them, can they not draw up a petition stating that his place is a 
 nuisance, lay it before the proper authorities, and have it closed ? 
 
 A. If a liquor store becomes a nuisance, and the fact can be 
 legally establislied, it can be suppressed. But the mere fact that 
 a dwelling house has been altered into a liquor store, is not a 
 sufficient cause of action. 
 
 17. A leaves B, his son, a house and lot during his natural life, 
 with remainder to his children (four now living) provided that B pays 
 into the estate $100 for equalization of shares, etc. B pays the $100, 
 takes possession of the premises, and has enjoyed the rents, etc., etc., 
 ever since. B has the house insured (in his own name), and claims 
 that if the house is burnt down the insurance money must be paid to 
 him absolutely, and that his children have no claim upon it whatsoever, 
 thus virtually leaving them with nothing but an interest in the bare 
 lot. If wrong, what disposition should be made of the fund, and how, 
 by whom, and by what authority ? 
 
 A. B having paid tlie insurance premium out of his own 
 means, tlie insurance money in case of loss must, we suppose, 
 
4U 
 
 REAL PROPERTY. 
 
 if the law is strictly constructed, be paid to liim, and belongs to 
 him. But there is another question involved, viz : whether or 
 no B is not liable to rebuild the house. If there is nothing in 
 the will to settle tliis question, it cannot be answered in as 
 positive language as we should like to use, considering the clear 
 equities of the case. An English law writer, describing the lia- 
 bilities of the tenant for life under such circumstances, remarks 
 that " the law on this point is not in a satisfactory state. " (Gib- 
 bons on Dilapidations, 133.) Chancellor Kent goes so far as to 
 lay down the rule that if the building is destroyed by fire 
 through the negligence of the life tenant he is answerable, and 
 must rebuild. (4 Kent's Com., 82.) But this statement was 
 founded on the same authorities discussed by Gibbons ; and Kent 
 goes on to say that "there does not appear to have been any 
 question raised and judicially decided in this country respecting 
 the tenant's responsibility for accidental fires as coming under 
 the head of this species of (permissive) waste. " So far as we 
 have been able to ascertain, tliis observation is as true now as 
 when Kent wrote. The question, therefore, seems to be an open 
 one ; but the equities so strongly demand a remedy in favor of 
 the cliildren, that if the courts should find themselves obliged to 
 declare against B's liability to rebuild, we are disposed to think 
 they would strain a point to hold that the insurance money 
 should stand in place of the destroyed building. The will, how- 
 ever, may render all speculation unnecessary, and that should be 
 studied for the conditions, it any besides that above mentioned 
 imposed on the life tenant. A condition that he should sur- 
 render the premises without diminution or dilapidation except 
 ordinary wear and tear would probably be construed so as to 
 make him liable to rebuild in case of fire, and perhaps a require- 
 ment that he should keep the building in repair would carry the 
 same liability. 
 
 18. Two men own two adjoining properties. One of them raises 
 his ground say feet, but in so doing all the natural water, rain or 
 snow that falls upon his ground so raised up, goes down on his neigh- 
 bor's property, damages it. and even goes in the basement of his house. 
 I wish to know whether the injured man can recover damages, or at 
 least compel his neighbor to build a wall sufficient to keep the water 
 from the low ground ? 
 
REAL PROPERTY. 
 
 445 
 
 A. No man can change the natural grade of his land so as to 
 drain it upon his neighbor's estate, and thereby damage it. He 
 is liable for all accruing damages until he takes steps to prevent 
 the result. 
 
 19. A buys one of two frame houses in Brooklyn, which were 
 built together, the studding between the two forming the party wall. 
 A wishes to pidl down his house in order to rebuild of brick. Adjoin- 
 ing owner refuses to permit the removal of the studding on his side 
 of the line. It being impracticable to split the studding, how can A 
 obtain his line ? 
 
 A. The decision in the Court of Appeals in a case where the 
 party was created under the same circumstances as in the above 
 instance, was that each party had an easement in the whole wall, 
 at least as long as it continued sufficient to support the existing 
 buildings. Only in case one of the buildings became so dilapi- 
 dated as to be unsafe and unfit for occupation, and the removal of 
 the front and rear beams Avould occasion the destruction of the 
 whole wall, could one owner, on reasonable notice to the other, 
 take down the whole Avail. (Partridge v. Gilbert, 15 X. Y., 601.) 
 
 20. A buys of B a piece of real estate in Virginia, for wliich he 
 agrees to pay a certain amount in cash and residue in deferred pay- 
 ments. He makes the cash payment, but before the maturity of the 
 deferred payments becomes financially embarrassed and is unable to 
 meet the payments at maturity. Can B sell and give a legal title to 
 the property without the consent of A ? or, will he not be required first 
 to institute legal proceedings for the unpaid balance, as there was no 
 forfeit expressed or implied in the agreement of sale ? 
 
 A. The question of title depends on the record. If the agree- 
 ment to sell with its conditions has been recorded, B cannot give 
 a subsequent conveyance to another party with a clear title with- 
 out further proceeding against A to settle the original contract. 
 He can sell the land, however, transferring to the new purchaser 
 exactly liis own interest and substituting him in his stead, leaving 
 him to wait on a settlement with A, the first contractor. 
 
 21. A responsible party sold me a house in course of construction ; 
 there was water in the cellar at the time, and under the representation 
 that this was "surface" water, that it was retained there for the pur- 
 pose of mixing mortar, and the seller's verbal promise that it should be 
 drained and the cellar made dry, I bought the house. Since, it has 
 been discovered that springs are the cause, and the seller will go to 
 
446 
 
 REAL PROPERTY. 
 
 no further expense, having tried twice to remedy the trouble. Have 
 I not a just claim on the seller, and also a cause of action if he refuse 
 to drain my cellar ? 
 
 A. If the statement respecting the water in the cellar was a 
 positive representation, and not a mere expression of opinion, 
 and was a material inducement to the purchase, the buyer can at 
 least receive damages, though the contract itself may not be set 
 aside. " If the vendor of land knowing that the purchaser is 
 unacquainted with it, makes a false representation as to any 
 matters which, if true, would materially enhance its value, he is, 
 in equity, bound to make good his representation." Bradley v. 
 Bosley, 1 Barb., eh. 125. The misrepresentation might not afford 
 ground for the rescission of the contract, (see Story's Equity 
 Jurisprudence, sec. 200, p. 199, svpra and infra^ but we think 
 suit for damages could be sustained, and the buyer recover. 
 But he must be very sure tliat the seller's statements regarding 
 the water were affirmations of fact, and not a mere guess or 
 opinion. 
 
 22. Is a boiler that was put in a building after said building was 
 built, a part of the real estate and subject to the mortgage thereon, or 
 is it personal property and subject to sale by the sheriff under judg 
 ment ? 
 
 A. The courts have made some nice distinctions in regard to 
 boilers and steam engines. If put in as trade fixtures by a lapse 
 they may be regarded as personal chattels and removed by him 
 at the expiration of his lease. If put in by the owner of the fee, 
 to be used for the purpose to which the building is applied, a sub- 
 sequent mortgage will hold them as part of the realty. But if 
 the boiler was put in after the mortgage was given, and inserted 
 in such a way that it can be removed without material injury to 
 the building, it may be held subject to a judgment as the personal 
 property of the owner. 
 
 23. A made a will, then died and left an estate of $50,000, giving 
 his widow the income during her life. At her death it goes to his two 
 sons and his daughter. Before the mother's death a judgment was en- 
 tered up against one of the sons. That son sold his interest in the 
 estate to his daughter-in-law, who transferred it back to his wife. Will 
 that transfer prejudice the judgment ? 
 
 A. If the debt for wdiich the judgment was obtained existed 
 
REAL PROPERTY. 
 
 447 
 
 'at the time the son transferred his interest in tlie estate, the 
 transfer is prima facie fraudnlent, and can be set aside so as to 
 allow the judgment creditor to levy on the property, whether in 
 possession or expectancy. 
 
 24. A sells his clear real estate to his son-in-law, giving him a 
 clear title ; son-in-law resells the same to A's wife, making title in her 
 name ; A dies possessed only of personal property ; can any creditor 
 of A bring suit and claim on the property sold to A's wife ? 
 
 A. If A was insolvent when the deed was given, and the 
 transfers were made to evade the pursuit of his property by his 
 creditors, no consideration being given by his purchases, the 
 courts would probably set aside the conveyance in behalf of per- 
 sons whom he owed at the time of the transfer. But if A was 
 solvent when the transfer was made, and it was done in good 
 faith to settle the property on his wife, the conveyance will stand, 
 and the property will not be subject to his debts. 
 
 25. Ills. — I have in view the purchase of half interest in property 
 in Illinois, but upon writing to the County Clerk find that the property 
 now is and has been in possession of squatters since 1837. Will you 
 kindly inform me in regard to squatters' rights in this State, and in 
 case my title was good, what I would be obliged to do to dispossess the 
 above parties, and probable cost ? 
 
 A. It would be necessary to bring an action of ejectment to 
 dispossess the " squatters," if they refused otherwise to vacate 
 the premises, but the probable cost cannot be foretold. The 
 intending purchaser should moreover be sure that the so-called 
 squatters do not occupy the land under something that purports 
 to be a deed or grant, constituting what is called by the Illinois 
 statute a paper title — since if so, it is quite likely that, however 
 worthless it may have been at the beginning, it is now placed 
 beyond dispute by the statute of limitations. 
 
 26. Miss. — In 18G0 I bought one of a row of two-story brick stores 
 72 feet long by 24 feet 7 inches wide, meaning from the centre of one 
 wall to the centre of the other, the walls on both sides being party 
 walls. On March 19, 1879, a fire originated in the second store north 
 of mine, which totally destroyed mine and damaged the upper portion 
 of the one next south. The upper stories of these buildings have only 
 9 inch walls, which was the cause of the fire spreading — the joints of 
 the different stories meeting each other. 
 
448 
 
 REAL PROPERTY, 
 
 The wall on the south side of my building is of course a party wall ; 
 my neighbor's side was not as much damaged as mine ; the entire wall 
 was condemned by two competent builders under oath, the insurance 
 companies paid it ; my neighbor commenced to rebuild on this burned 
 and condemned 9-inch wall without my consent ; I enjoined him, had 
 eight of the best builders and contractors whose characters cannot be 
 questioned, who swore the wall was unsafe ; my neighbor brought up a 
 number of men who were partly interested in the repairing of the 
 building who swore the wall was safe. Our judge dissolved the in- 
 junction. My neighbor's store is used as a bar-room : I use my build- 
 ing as a hardware store, and consequently require a good wall I am 
 unable to lay my joist on the wall, as my neighbor's joists nearly 
 reached through. What must I do ? Must I abandon the ground on 
 which stands a wall I cannot use, or are there laws in the country by 
 which I can recover my rights ? Is not a judge bound in his decision 
 to take into consideration the fact that the wall was lawfully con- 
 demned by the insurance companies and paid for by them ? Is not 
 the judge bound by his oath of office to take into consideration the 
 characters of the witnesses ; especially as all of them are personally 
 known to him ? 
 
 A. The law relating to party walls is not to be found in any 
 single book, but is scattered through the legal text books, re- 
 ports and State statutes. The Mississippi statute law governs 
 only a few points, and is laid down in sections 1,916 to 1,920 
 inclusive, of the revised code. 
 
 The vice-chancellor was calmly bound to take into considera- 
 tion all the evidence, and to weigh the character and credibility 
 of the witnesses, but if he failed to do so there is no remedy, 
 save an appeal. The demand of an injunction however does not 
 end our correspondent's case. If he cannot make use of the re- 
 built party wall as before, whatever damages he may sustain are 
 recoverable in an action at law, triable by a jury upon all the 
 evidence. 
 
 27, N. J. — Can an alien hold and convey real estate in New 
 Jersey ? 
 
 A. An alien can hold and convey real estate in New Jersey. 
 
 28. N. J.— In the State of New Jersey A sells to his son B a 
 parcel of land and executes a warranty deed therefor. At the same 
 time there is a mining title, well known, covering the property. B sells 
 to C and executes a warranty deed also. A is dead ; B is insolvent ; 
 can C look to the estate of A, which i? good, fo-r redress ?_ And also 
 is a mining title which has not been worked for 22 years invalidated 
 
REAL PROPERTY. 
 
 449 
 
 in consequence ? C desires to sell the property, but cannot on account 
 of this existing mining title. 
 
 A. If the deed contains a covenant that the guarantee sliall 
 quietly enjoy, and that the grantor will warrant and defend 
 the title, the right of action against the original warrantor runs 
 with the land into the hands of whoever becomes the grantee. 
 (Carter v. Executors of Denman, 3 Zabriskie, 260.) C can 
 therefore look to A to make good the covenant, provided he is 
 disturbed in his profession, or there is an attempt made to assert 
 the title. Its mere existence, however, is not sufficient to enable 
 him to maintain an action against A. Attention must be paid 
 to the precise form of the covenant of warranty, as above stated, 
 since a covenant against incumbrances merely would not vest 
 any right of action in C as against A. If the holder of the 
 mining title, being of age and sane, has not been in possession 
 within 20 years, he cannot now assert it, but if an intending 
 buyer cannot otherwise be satisfied on this point, it may be 
 necessary for C to bring a bill in chancery to quiet the title. It 
 would indeed be the part of prudence in a purchaser to require 
 this, as we cannot, without the evidence in detail before us, 
 undertake to say whether or no the land has been held adversely 
 to the mining title long enough to defeat it by prescription. 
 
 29. Pa. — Is the perpetual lease of an oil well in Pennsylvania, with 
 royalty, real estate or personal property ? 
 
 A. Supposing the lease in question to be in the common form, 
 for a certain term, with covenants to renew, it would in our 
 opinion constitute nothing more than an estate for years, which 
 by New York law is denominated a " chattel real," and goes to 
 the administrator. If the Pennsylvania law on the subject how- 
 ever is sought, it may be considered a question which, so far as 
 we can ascertain, is undecided, whether the estate would not be 
 treated as realty, the Pennsylvania courts having decided that 
 such is the nature of the ground rent. 
 
 30. S. C. — Would right of dower attach to property of an insol- 
 vent against whom judgment were on record prior to his marriage, 
 and property sold under execution ? 
 
 A. Prior to 1873 judgments were not, before levy, a lien on 
 29 
 
450 
 
 RECEIPTS. 
 
 real estate in Soiitli Carolina, and if the marriage took place 
 before these concurrent events, the right of dower would attach. 
 Since 1873 judgments constitute a lien, and if the marriage took 
 place since, the right of dower does not attach until after the 
 judgment lien has been discharged. 
 
 EECEIPTS. 
 
 1 . Does the law compel a person to give a written receipt for 
 money received in payment of a bill ? 
 
 A. In this State, unless as satisfaction of mortgage upon real 
 estate, no receipt has been demanded. It is not a good legal 
 tender to offer payment on condition of a receipt. If the payee 
 is so piggish that he refuses to accept, the debtor must furnish 
 his own evidence of payment by attesting witnesses. The cred- 
 itor need do nothing but pocket the money. 
 
 2. Would a receipt admitted to be genuine calling for the full 
 payment of an account, be accepted in a coiu-t of law as suflScient evi- 
 dence of payment, or would it be necessary to produce the check with 
 which pa}Tnent was made ? 
 
 A. No such document is " sufficient evidence " of payment 
 to stand against positive testimony that no payment has been 
 made. The United Slates Government exacts duplicate and 
 sometimes triplicate receipts to be formally executed and trans- 
 mitted with the vouchers, before any order for payment is issued. 
 Our advertising and subscription bills against Government offi- 
 cials are receipted in this way a considerable period before the 
 check for payment is issued. A written receipt is not therefore 
 full evidence of payment. 
 
 3. Is a receipt for money written and signed in pencil legal and 
 vahd, and can it be put in evidence in a court of law ? Or must the 
 receipt be written and signed in ink ? 
 
 A. A receipt written and signed with a pencil, if its author- 
 fillip and integrity can be established, is just as authoritative in 
 evidence as if done in ink. The only difference is that if the 
 writing is disputed, or there is a claim that it has been altered, 
 there is more difficulty in the nature of the case in establishing 
 the genuineness and originality. 
 
RECEIVERS.— SELLER AND PURCHASER. 
 
 451 
 
 KECEIVEKS. 
 
 1 . A man in business without partners becomes insane ; how can 
 the business be settled up or carried on ? 
 
 A. Insanity of a partner established beyond question dis- 
 solves the partnership. Story on Part., 295 ; Isler vs. Baker, 6 
 Hump., 85. If he has no |)artners the courts will appoint a 
 receiver or committee to manage the estate. 
 
 2. Judgment was obtained against me for $2,000 ; subsequently 
 my property, consisting of a house and lot, where I reside, was placed 
 in the hands of a receiver ; the plaintiff's attorney notified me by a 
 pencil memoranda on the back of the notice of the appointment of the 
 receiver, that the rents of my tenants would be collected and also that 
 I would be compelled to pay rent, and stated the amount. Now can 
 the receiver or any one else collect rent from myself when I am owner 
 of the property ? In the absence of my attorney in Europe I have 
 consulted three lawyers and the receiver (also a lawyer) on this point 
 and all four seem to be befogged ; the latter party is of the opinion that 
 I must pay ; the three others that I am not compelled to pay rent. 
 
 A. The property being in the hands of a receiver, he has the 
 right to collect for its use, no matter who occupies it. We pro- 
 ceed, of course, on the supposition that the owner had not taken 
 any steps previous to the judgment to secure a legal homestead 
 right in his residence. 
 
 SELLER AND PURCHASER. 
 
 ASSIGNMENT. 
 
 1. A of New York makes a sale to a party residing in England, 
 and ships the goods, but the money does not come as soon as antici- 
 pated, and A is compelled to sell his claim. He makes an assignment 
 of it, signs and affixes his seal in presence of some one who witnesses 
 the signature. Is that sufficient, or must it be acknowledged before a 
 notary ? The party buying the claim is a friend of A's and takes his 
 representation that it is good. He also says, You need not notify 
 the party in England of the sale, but receive the draft as though 
 nothing had been done, and when you get it indorse it over to me." 
 Is that safe in case another party should have a claim against A and 
 want to attach the claim on the other side ? Could the third party 
 attach a claim there ? And is it necessary the party owmg the sum 
 should be notified of the sale of the claim ? 
 
 A. Neither acknowledgment before a notary, nor a seal, is 
 necessary to. make a valid assignment in such a case. T^ut the 
 
452 
 
 SELLER AND PURCHASER. 
 
 proceeds of the sale miglit be attached in England by a debtor 
 of A, and without notice to the party the assignee may find him- 
 self involved in trouble and cost. 
 
 2. A sells a bill of goods and hands the order to us. We fill 
 the order from our stock in A's name, A rendering his own bill to the 
 party to whom he sold the goods. On the same day on which the 
 goods go out of our store, A assigns the amount of the bill to us. 
 When the bill becomes due the party remits to A (as the party is ig- 
 norant of the assignment), and A afterwards pays us. The question 
 now is : Is it a criminal offense if A retains the amount of the bill 
 (previously assigned to us) and refuses to hand it over to us ? 
 
 A. A's act is not criminal in the popular sense, but it is a 
 conversion in the legal sense, and in a civil action, upon recovery 
 of judgment, we think his person would be liable to be taken on 
 execution, that is, he could be imprisoned. 
 
 3. I buy a lot of goods of a dealer, and he fails in business, and I 
 wish to remit a check for the said goods, could any legal trouble result 
 in sending a check to his order ? 
 
 A. If the bankrupt is settling his estate under the old bank- 
 rupt act, or had made an assignment, or has otherwise empow- 
 ered any one else to collect his assets, and our correspondent has 
 had notice of his condition, he may run the risk of having to pay 
 the debt twice. 
 
 4. A customer of mine bought 100 barrels of flour, paying for half, 
 I delivering half, leaving the balance to be delivered afterward at his 
 option, paying on account generally as he buys. In a week or two he 
 fails. Can he by law make me his creditor for the balance, or can I 
 retain it to secure my debt ? 
 
 A. The seller can retain the flour, unless the buyer tenders 
 the money and demand delivery. 
 
 CONTRACTS, DELIVERY. 
 
 5. A buys a lot of goods with the understanding if any are sold 
 less, price is made less to him ; and later the remainder of the lot is 
 sold to him at a less price. Is he entitled to prior purchase at the 
 same price as last sale ? 
 
 A. If the contract is precise and is so drawn that a sale of 
 any portion of a stock of similar goods to any one at a less price 
 is to operate to reduce the original price to correspond ; and the 
 
SELLER AND PURCHASER. 
 
 453 
 
 first purchaser takes the remainder at a lower rate without any 
 waiver of this condition, he is entitled to his reduction. But it 
 might be sharp practice to claim it, since the ordinary under- 
 standing under these circumstances would be that the sale to the 
 first purchaser of the remainder of the lot exempted it from the 
 condition mentioned. 
 
 6. A of Savannah buys of B of Xew York 5,000 sacks of salt 
 upon the following conditions : $1 per sack, delivered in Savannah, 
 cost, freight, and insurance. In case of loss or damage by sea, who is 
 bound for the loss to A, the party B from whom he purchased, or the 
 insurance company in which B is insured ? 
 
 A. A has purchased the salt deliveraljle in Savannah, " cost, 
 freight, and insurance," and has no interest in the property until 
 delivered. If tendered in a damaged condition, he may reject 
 it, or receive it and make reclamation on B, the seller. If B has 
 it properly insured he can make his claim and recover of the 
 underwriter ; but he would be liable to A, even if he could not 
 recover his insurance. 
 
 7. ^^'e are agents for an Apple Evaporator on the line of the Xew 
 York Central Railroad. A broker wanted to purchase for a Boston 
 merchant 50 boxes. He bought five and ordered them shipped with 
 the privilege of 50. The merchant on receipt of the five telegraphed 
 us to " ship but 45 by Stonmgton line to-night. " As the broker 
 knew our stock was all stored at evaporator, we keeping only samples 
 in the city, did not notify either party, could not ship by Stonington 
 that night, but telegraphed to Evaporator to ship direct to Boston via 
 Albany. They were ordered on the 2d and shipped on the 3d. Five 
 days after shipment received telegraphic dispatch order counter, 
 manded, do not ship apples. " Apples had arrived in Boston previous 
 to dispatch being received countermanding order. Consignee refuser 
 to accept apples and holds subject to our order. It was a bona 
 fide sale and delivery ; are we to blame for the manner of delivery, 
 or only the difference in freight if any ? They were not shipped via 
 Stonington line nor that night, but by as good a line and as soon as 
 possible after order received. 
 
 A. The order to ship by " Stonington line to-night" appears 
 to us to be absolute as to the time and method of shipment and 
 a condition to be complied with to render the order valid. The 
 seller should have notified tlie buyer by telegraph that the goods 
 would be ordered directly from Albany, leaving him the option 
 to comitermand at once if that would not meet his requirement. 
 
SELLER AND PURCHASER. 
 
 If lie had done that and no reply had been received he could have 
 collected his bill. As it is, although equity would seem to be on 
 the side of the seller who has acted fairly throughout, the courts 
 will doubtless liold that there was no legal contract, and the 
 buyer is not obliged to take the goods. 
 
 8. I sold to a party some goods to be delivered, 20 casks a month 
 for five months, payable at 30 days from delivery at a certain price. 
 The first delivery is made ; the party finds fault — finds the cask not 
 large enough, and raises question about the quality of the goods. Am 
 I obliged to deliver all the future goods at 30 days, or can I offer to 
 deliver the goods providing I am paid c. o. d., with deduction of the 
 interest for 30 days ? If the party does not pay my first bill, or raises 
 objection and wants to pay only something on account, does that not 
 vitiate the contract ? Can I not then oblige him to pay me on de- 
 livery, or give me a bond to guarantee me to be paid at 30 days ? 
 
 A. The seller cannot depart from his contract before an 
 actual previous breach by the buyer. It is not a breach of con- 
 tract to complain about the character of the merchandise de- 
 livered, or even to refuse payment in full, if it can be established 
 that the goods are deficient in quantity or different in quality 
 from those described in the contract. But if our correspondent 
 'S sure that he has himself fully conformed to its terms, and the 
 ouyer makes default in payment of the first bill when due, the 
 former may then exact what new terms he pleases, or throw up 
 the bargain altogether, and refuse to deliver any more goods. 
 
 9. 1 received an offer by wire from Boston of a car of flour from 
 the agent of a Milwaukee mill October 17th. I wired an acceptance 
 of the offer to Boston at once. The flour was not shipped from Mil. 
 waukee till October 27th. and then flour had declined 50 cents per 
 barrel. I claim it is optional with me to take the flour or not on ac- 
 count of the delay in filling the order. The miller claims I am bound 
 to take the flour and pay the price agreed. Which is right ? 
 
 A. If the offer implied that the flour was in Boston, and 
 ready for immediate delivery, the fact that it had not left Mil- 
 waukee, and was not shipped thence until ten days thereafter, 
 proves an unreasonable delay, and we think that the buyer might 
 properly refuse to accept it. But if there was no such im})lica- 
 tion and no time as to the date of shipment, the contract would 
 still be binding notwithstanding the delay. 
 
SELLER AND PURCHASER. 
 
 455 
 
 10. A New York merchant ordered some goods from the agent 
 of a Boston house about three months ago, it being understood that 
 they be delivered as soon as possible. Five or six weeks after, the 
 goods not having arrived, he told the agent to cancel the order, ex- 
 plaining that he did not need them then, and that he could get the 
 same kind of goods cheaper. The agent went away apparently intend- 
 ing to cancel the order. A week ago the New York merchant received 
 a notice from the steamboat company that the goods were on the pier 
 awaiting removal by him. He did not send for them. Two days 
 later he met the agent and told him of the arrival of the goods ; the 
 latter pretended not to remember being told to cancel the order, and 
 tried to induce the merchant to take the goods, saying he need not pay 
 for them until they were all sold ; this the merchant refused to do. 
 Can the New York merchont be held responsible, or, should the Bos. 
 ton house recall the goods ? The merchant has received another notice 
 to-day, saying that the goods are still on the pier, and requesting their 
 removal. 
 
 A. If the above statement includes the whole case and can 
 be verified, we do not think the buyer can be held to take the 
 goods. Wc assume that the delay in the delivery of the goods 
 was such a violation of the contract to deliver " as soon as pos- 
 sible " as to support a revocation of the order, without the agent's 
 assent. 
 
 11. On the 1st inst. I bought a bill of goods, the seller agreeing 
 to deliver them on the same date. The goods arrived on the 3d, and 
 I lost the sale of said goods by their not being delivered as agreed ? 
 Am I justified in returning the goods ? 
 
 A. If it was part of the contract that the goods were to be 
 delivered on the day of purchase, the buyer could have refused 
 to receive them when tendered at a later date ; or have notified 
 the seller at once to take them away. But if he has been several 
 days making up his mind about it, we are afraid that it is now 
 too late to reject them. 
 
 12. We shipped by order of a house in San Francisco five cases 
 of merchandise on July 17, 1877, and sent them bill and bill of lad- 
 ing ; they made no objection as to price, etc , except terms, which they 
 claimed at that time should have been 60 days ; we drew upon them, 
 which was not paid, they claiming that the goods were destroyed in 
 Pittsburg. Have we good claim against the parties who bought the 
 goods ? 
 
 A. If the order was given to have the goods shipped Avith the 
 understanding, as usual in such cases, that they were at the risk 
 
456 
 
 SELLER AND PURCHASER. 
 
 of the buyer wliile on the way, the seller can recover although 
 the i)roperty may be lost. 
 
 13. A, in North Carolina, orders a bill of goods from B, in New 
 York, and does not direct by what hne goods to be shipped. 
 
 B ships goods, but sends no bill of lading to A. The goods are 
 never received by A. Can B recover tlie price from A or must he 
 look to the carrier ? 
 
 A. B can recover of A, on proof that, as customary, he ship- 
 ped the property by a responsible carrier. A can ihcn recover of 
 the carrier. It requires no bill of lading to hold a common car- 
 rier responsible. Proof that the property was received by him 
 is sufficient to establish his liability. 
 
 14. I consign a case of samples to party in interior of Texas, 
 marked simply with consignee's name and address, or inclosed form of 
 bill of lading, which is headed a through bill of lading. The case is 
 lost. The steamer line shows railroad receipt. Ami to look to steamer 
 Hne or railroad ? 
 
 A. The owner can hold the contractors here for the value of 
 the package, leaving them to collect it of the railroad. 
 
 15. A bought in October one bag St. Jago coffee at 26 cents per 
 pound, 60 days, and it was so invoiced to him ; but on receiving it he 
 finds that Rio coffee was sent instead, and consequently he leaves it 
 subject to the seller's order. In February A agreed to keep the Rio 
 coffee at an allowance of two cents per pound. When should the bill 
 become due, from the date of the first purchase, or from the date he 
 agreed to keep the goods at the reduced price ? 
 
 A. The date of settlement depends on the new agreement. 
 We should infer that the terms were an allowance of two cents 
 a pound for an immediate cash payment, but this is the very 
 question to be settled. Not being present at the conference we 
 cannot decide. 
 
 16. A has to arrive 1,000 bags of merchandise by a certain vessel, 
 which he offers to B, who buys 400 bags of it. C afterward buys 400 
 bags, and D takes balance 200 bags. No contract passes between 
 buyer and seUer, but price paid is full market value lor sound goods at 
 that time, and seller assures buyer that the merchandise is of best 
 quality. The vessel arrives and the cargo is partly damaged. Is B 
 entitled to 400 bags sound out of the 1000 (he being the first pur- 
 chaser) or must he take it as it comes out, say 400 bags first landed, and 
 accept that for his purchase. And if so, is he entitled to any claim 
 on seller for difference in value between sound and damaged, on any 
 
SELLER AND PURCHASER. 
 
 457 
 
 damaged he may find among the 400 bags delivered him ? Or, market 
 having advanced considerably so that the seller offers to take back 
 from B any damaged bags, would A be required to make good the re- 
 jected bags out of the cargo ? 
 
 A. If the sale was made by a certain lot " to arrive," and 
 was not a positive contract to deliver, without regard to such 
 arrival, a certain amount of merchandise of a given quality, then 
 all the buyer can claim is the option of accepting or rejecting 
 the goods on arrival. This would be simple enough if there were 
 but one buyer. In regard to the division of tlie offer between 
 the different buyers, neither can claim any precedence on account 
 of privity of contract, inasmuch as the whole lot sold was to ar- 
 rive at the same time. If the seller divided the entire lot with equal 
 proportions of sound and damaged and tendered each buyer his 
 share, all they can do, in our judgment, is to accept or reject the 
 offer thus made. Tliey cannot take part and reject part, nor can 
 either of them claim damages for the failure, provided the sale 
 was made to arrive, as we infer from the statement. It is op- 
 tional with either party to abide by the contract, as being 
 verbal, it cannot be legally enforced. 
 
 17. Jones sells a lot of say 5,000 barrels apples to Smith, the 
 latter to take them at the rate of 1,000 barrels per week. The lot is 
 in storage at Jones's place of business, when a fire destroys the re- 
 mainder, say 3,000 barrels. The question is, who is the owner of the 
 goods in store, the seller or the buyer, the latter having purchased 
 them but the former holding in store to accommodate him (Smith) ? 
 It may be put thus : does the delivery of a part constitute the delivery 
 of the whole ? 
 
 A. The goods in this case are held by the seller for account 
 of the buyer, and at the latter's risk ; and if the former takes 
 ordinary and reasonable care of them, the loss, if any, will fall 
 upon the latter. 
 
 18. A sold 50 packages of merchandise to arrive, and delivered 40 
 on the contract. A makes a demand for payment for part delivered. 
 B refuses to pay the same on the plea of non-fulfilment of contract. 
 
 If A refuses to deliver the entire lot sold, has he a legal claim for 
 the portion delivered ? B refuses payment for the part received on 
 the pretext noted. Are you aware of any decisions in similar case ? if 
 so, can you cite them ? 
 
 A. If the merchandise was sold " to arrive " by any i)articu- 
 
458 
 
 SELLER AND PUnCnASER. 
 
 lar vessel, and the requisite quantity did not arrive, the contract 
 was at an end. (Parsons on Contracts, vol. 1, p. 554.) In that 
 event, we are disposed to tliink that B would be compelled to })ay 
 for the merchandise received and retained. If, however, the full 
 quantity demanded by the contract did arrive, but was not 
 delivered, it seems to be the harsh rule of law in the State of 
 New York, contrary to that generally prevalent, that the seller 
 cannot recover anything for the part actually delivered and 
 accepted. This doctrine is supported by the following cases in 
 the Xew York courts : Champlain v. Rowley, 13 Wend., 258; 18 
 id., 187 ; Mead v. Degolyer, 16 Wend., 632 ; McKnight v. Dunlap, 
 4 Bard, 36; Paige v. Ott, 5 Denio, 406; Oakley v. Morton, 1 
 Kein, 25 ; Soloman v. Neidig, 1 Daly, 200 ; Catlin v. Tobias, 26 
 N. Y., 217. The same ruling has been made in Ohio, but in 
 England and Massachusetts, the buyer under the circumstances 
 stated, would be required to pay the actual value of the merchan- 
 dise delivered and retained, and Professor Parsons thinks that a 
 similar rule would be adopted, as equity no doubt requires, by a 
 majority of the courts in this country. 
 
 19. A & Co., commission merchants in New York, sell for custom- 
 ers at the South to B & Co., New York, one thousand bales cotton 
 to arrive, basis low middling. Part of the cotton has been delivered, 
 and owing to a sharp advance in the price of the staple A & Cos 
 friends South are unable to furnish cotton to complete the sale to B & 
 Co. B & Co. bill A & Co. for the difference betw^een the market price 
 on the day when they called upon A & Co. to complete the contract and 
 the price at which the cotton was bought. A & Co. refuse to recognize 
 the claim, saying that the cotton was sold to arrive, and when the sale 
 was made by them for their customers, they supposed it was on the 
 way or would be shipped immediately, and as the cotton did not arrive, 
 the buyers have no claim on them. Now, have we a legal claim 
 against A & Co. and do you think judgment could be had through the 
 courts ? 
 
 A. The buyers of cotton " to arrive " have no legal claim on 
 the agent if the cotton does not arrive. 
 
 20. We sell for future delivery say, " about 2,000 tons " old iron for 
 shipment from Europe during certain months by ship or ships, in vari- 
 ous quantities, as freight-room may be engaged. After various ship- 
 ments the weight of the whole lot so shipped foots up say, 1,940 tons, 
 and the original parcel being exhausted we have no more. Can our 
 
SELLER AND PURCHASER. 
 
 459 
 
 buyer at whatever cost to us, call on us for the extra 60 tons, or, are 
 we covered by the legal significance of the word "about " in our con- 
 tract. 
 
 A. Under the circumstances the delivery as stated will legally 
 fulfill the contract, and the buyer will have no further claim. 
 
 21. We bought 30 bags of coffee from C, D & Co., and received 
 from them an order on the storekeeper for its delivery. W e sent this 
 order for the coffee by our dairyman ; he returns empty, with the 
 information from the storekeeper that the coffee is not skimmed, and 
 that there is no order to have it done. Being in need of the coffee for 
 immediate shipment we return the order to C, D & Co., the sellers, 
 who contend that we have no right to cancel the sale, and if we will take 
 the coffee they have no doubt that they will be able to have it put up 
 in merchantable order by next morning. With this assurance we send 
 on the next morning for the coffee ; the dairyman again returns empty 
 with the mformatiou from the storekeeper that the order for skimming 
 must come from the original owner of the coffee, from whom D & 
 Co., purchased. They were informed of this fact and promised to 
 see it rectified, and shortly afterward informed us in writing mes- 
 senger just returned from the wharf says they are now skimming the 
 coffee.'' After sending three or four times a distance of about 2^ 
 miles, our dairyman late in the evening, as they were about closing up 
 the warehouse, succeeded in obtaining 18 bags, the balance not being 
 ready. Being sick and tired of the entire matter we informed C, D 
 & Co., that we would not tike the remaining 12 bags. C. D & Co., 
 contend that we must take it. that the coffee is now constructively in 
 our possession, and th it if the same burns up it is our loss. What are 
 the rights of buyer and seller in this case ? Can we be made liable 
 for the loss of the coffee after having sent for it three or four times ? 
 or has C, D & Co. the right to compel us to take it ? 
 
 A. If there was nothing in the contract of sale relative to 
 the time when the coffee should be ready for delivery, a " rea- 
 sonable time " would be allowed the seller, and what is rea- 
 sonable time," in any particular case, is for the court and jury 
 to determine. The buyer having here virtually extended the 
 time of delivery to the day on which the greater part was actually 
 ready, and then having accepted a part, we incline to the opinion 
 that his acceptance and waiver of the delay was so far complete 
 as to bar a recision of the sale, and leave the undelivered goods 
 in the warehouse at the buyer's risk. 
 
 22. On IGth October we offered to sell a party in New York a 
 number of bales of sheetings at a certain price. On 26th October we 
 received a letter dated 2 2d and post marked 24th October, accepting 
 
4G0 
 
 SELLER AND PURCHASER. 
 
 our offer. In the meantime these goods have advanced in price, and so 
 has cotton. Should not our letter have been answered in a day or two, 
 in order to secure the goods at the price named ? Are we bound to 
 deliver, and can the party fairly claim them ? It takes two days for a 
 letter to reach New York from this Fayetteville, N. C. 
 
 A. We do not think the offer to sell made on the 16tli, which 
 reached the buyer on the 18th, was binding on the 24th, after 
 both raw materials and goods had advanced. 
 
 23. We sell to a party who visits our store and examines the 
 goods, 50 bales of rags at a certain price, f. o. b. The customer is 
 w^ell enough pleased with the goods to order two weeks later 50 bales 
 more of the same thing, same price and terms ; on receipt of which 
 he rejects the lot, saying that they are not the same kind, and writes 
 us to take them away. The fact is the second lot is precisely like the 
 first, and part and parcel of the same lot. The point is whether he 
 can reject those rags at his will 500 miles away, and compel us to pay 
 freight and cartage both ways, or whether he should return them to 
 us free of expense ? 
 
 A. He cannot reject them at all, if the statement above made 
 can be legally established. But as he wdll have a lot of work- 
 men and clerks to sw^ear that the second lot is not as good as the 
 first, the issue of the suit is doubtful. If his side can be proved, 
 he has the right to compel the seller to bring them back at his 
 own expense. 
 
 24. In September we sold here to a firm 30 cases of goods to ar. 
 rive per ship W, from Hongkong, China, and told the purchaser the 
 ship had sailed in the latter part of May. We now find the ship left 
 July 16. Our bill of lading is signed 20th of May, on which we based 
 our representation. The demand for the goods sold is best here at this 
 time of year ; at the end of November the sale is not so good for this 
 class of goods. Can we be held liable to pay damages ? 
 
 A. Parsons on Contracts, vol. 1, page 559, settles this ques- 
 tion as follows : " A statement in contract of sale of goods to 
 arrive by a particular vessel, that the vessel sailed on or about 
 a day named, is considered as a representation, rather than a 
 condition or warranty as to the time of sailing ; and if made 
 witliout fraud, though the vessel in reality sailed at a day con- 
 siderably later than the day named, and her arrival in port is 
 thereby delayed, the })urchaser is bound to accept and pay for 
 the goods. " The same question lias been decided by the Court 
 of Appeals in this State, in Hawes v. Lawrence, 4 Comst., 346, 
 
SELLER AND PURCHASER. 
 
 4G1 
 
 affirming the contract in spite of the untrue representation as to 
 the time of sailing, so tliat there is not only no damage to be 
 claimed of the seller, but the buyer must accept and pay for the 
 goods if they are in accordance with the contract, and are ten- 
 dered to him on arrival. 
 
 25. Suppose that A has bought to arrive a list of goods, contract 
 reading : " To deliver alongside vessel in good order and condition, 
 and to be accepted or rejected on dock before removal. " Said vessel 
 arrives, say. May 1, and discharges part of her cargo, keeping A's 
 goods in hold until she takes in ballast, which she does not do until 
 say, June 1 . Can A compel the ship to deliver his goods, or, can he 
 claim damages in case of a fall in the market ? 
 
 A. The buyer has the right to demand his goods within a 
 reasonable time after their arrival, and to claim damages if his 
 demand is refused. 
 
 26. A drummer passes through the country, offering a few lead- 
 ing articles below the market value. A merchant buys them, and 
 some other goods are sent, and the leading articles arc not. Is the 
 merchant under any moral or legal obligation to take them ? 
 
 A. Where an order is given on the condition expressed or 
 fairly imi)lied, that it shall be filled entirely or not at all, the 
 buyer would not be obliged to take a part unless the whole was 
 tendered. He should notify the seller at once of his refusal, and 
 the better way would be to return the portion actually sent, col- 
 lecting from the carrier the charges already paid. The trick de- 
 scribed (that of offering well-known standard goods below their 
 value, to sell others above their value) is very common, and the 
 failure to deliver the former is a great presumption upon the for- 
 bearance of the customer. 
 
 27. When an invoice of merchandise is purchased of a firm doing 
 business in a distant city, who is supposed to assume the marine risk 
 when the sellers use such phrases as '* we will deduct the freight, " or 
 " we will deliver them in New York ? " We were under the impress 
 sion that the sellers when agreeing to deduct the freight or deliver 
 them in New York, were virtually thereby assuming the risk of the 
 transfer. 
 
 A. If goods are bought deliverable by the seller in New 
 York, the latter is bound to guaranty such delivery ; but if the 
 seller simply deducts the freight, having sold the goods deliver- 
 
462 
 
 SELLER AND Pl'liCHASER. 
 
 able from his own place of business, the transfer is at the risk 
 of the buyer. 
 
 28. An indenture between a dealer and myself calls for a payment 
 of S'240.'27. After it was signed, he added articles costing $11.50 
 which he said, he left out by mistake. On April 7, I made payment of 
 S5, which made a total payment of S245. In May I went to him and 
 handing S6.77 I asked him to give me bill of sale receipted in full. 
 After looking over his books he said there was a mistake, as I owed 
 him S15.87 more for articles he forgot to put down, making $22.64 
 due instead of $6.77. 1 withdrew the $6.77 and told him I would 
 look into it. I moved last May without notifying him and he says he 
 could not find my new place of residence until he had inquired once or 
 twice at the old place, which I suppose he construes " secretion of 
 goods with intent to defraud. " He now sends me notice which I in- 
 close and I am threatened with forcible removal of the goods. Will 
 you be kind enough to tell me if he can hold me for more than 
 amount stated in body of the agreement. $240.77, or at the furthest 
 $251.77 ; and if he has a right to send to my house and remove all 
 goods. 
 
 A. The dealer aforesaid will not dare to meddle with that 
 fm'uiture if he is wise. Only the 8240.27 can be included in the 
 indentm^e, as the dealer cannot add any thing to it after our 
 correspondent has executed it. If the ^22 64 really represents 
 articles actually purchased and accidentally omitted from the 
 schedule in the indenture the dealer is entitled to his pay for 
 them ; but he cannot seize them nor take them away, and has 
 only a legal claim for the amount due him for them. 
 
 29. A lot of iron of a certain grade is purchased by manufactur- 
 ers and used in making castings, which, owing to the mferior quality 
 of the iron, are worthless. Its character was not discovered when the 
 iron was melted, nor until considerable expense had been incurred in 
 attempting to drill, dress, and plane the castings. If the iron had 
 been of the quality ordered, no difficulty would have been experienced 
 in the matter, but as it is, new castings of different iron from that re- 
 ceived wall have to be made. This of course entails loss, and the 
 question is, not only the measure of it, but upon whom it should fall. 
 The difference between the value of the iron received and the value of 
 the iron ordered and paid for, if returned to the manufacturers, will 
 still involve a loss to them of the time, expense, etc., incurred in mak- 
 ing the castings, which are useless, unless these matters form a proper 
 charge against the sellers of the iron ? 
 
 A. The rule of damages in cases of this sort was thus laid 
 down by Judge Selden, of the New York Court of Appeals, in 
 
SELLER AND PURCHASER. 
 
 463 
 
 the leading case of Griffon v. Colver, 16 N. Y., 489 : " The 
 party injured is entitled to recover all his damages, including 
 gains prevented as well as losses sustained, and this rule is sub- 
 ject to but two conditions : The damages must be such as may 
 fairly be supposed to have entered into the contemplation of the 
 parties when they made the contract, that is, they must be such 
 as might naturally be expected to follow its violation ; and they 
 must be certain, both in their nature and in respect to the cause 
 from which they proceed." The seller of the iron, under this 
 rule, would be clearly liable, it seems to us, not only for the dif- 
 ference in value between the article contracted for, and that sup- 
 plied, but for the expense involved in making the castings, 
 provided these were not of any extraordinary pattern or value, 
 of which the seller was not notified. 
 
 30. "We refer you to inclosed order sheet, according to which we 
 promised to furnish a lot of buttons not later than May 1 to 11, but 
 though our manufacturer had promised to deliver by that time, he was 
 delayed. The goods arrived in July and were offered to our custo- 
 mer, who not only refused the same, which of course he had the right 
 to do, but he claims damages to the amount of $150, while the whole 
 order only amounted to $346.86, leaving us a small commission. We 
 offered to have the matter settled by your decision, or by other arbi- 
 ters, but were refused, he claiming that the goods were sold to a third 
 party, which would have left a profit as above stated. 
 
 The following is a copy of the order : 
 
 New York, March 18, 1880. 
 
 & Co., St. 
 
 Order of Present. 
 
 Date, February 26. 
 
 Price in gold. Terms, cash less 5 per cent. 30 days. 
 
 Subject to any alteration in the United States tariff and revenue laws. 
 Delivery of goods not later than May 1 to 10. 
 300 gross like sample given to us. 
 (Prices here named). 
 
 Dear Sir : We beg to acknowdedge receipt of above order, which has been 
 accepted by our manufacturer at your limited prices. Thanking you for the 
 same, we are yours truly. Signed, W. & Co. 
 
 A. Under the New York rule, as defined in Courtright v. 
 Stewart, 19 Barb., 455, the above was an executory contract for 
 the sale of goods, and required a writing signed by the party to 
 be charged. The acceptance signed by W. & Co., is capable of a 
 construction by which they appear to stand merely as agents 
 for the manufacturer, but we gather from the story of the trans- 
 action that they were in fact principals, and the manufacturer 
 
464 
 
 SELLER AND PUIICIIASER. 
 
 was substantially a sub-coiitractor with tlicinselves. Such being 
 the case, there may be some doubt whether W. & Co. actually 
 bound themselves by the statement that the order " has been ac^ 
 cepted by our manufacturer, " but we think that by fair, rational 
 construction they did bind themselves, and are, therefore, liable 
 for non-delivery of the o-oods within the specified time, in such 
 damages, legitimately flowing from the breach of contract, as the 
 buyer can prove that he sustained. 
 
 31. A lumber mercliant contracts to deliver some lumber here in 
 sixty days. The lumber is loaded at the South in due time, and if it 
 had not been for a gale in which the vessel was lost, would have been 
 delivered in time. Now the merchant claims they are reheved frcm the 
 contract, as it was an act of Providence which prohibited them from 
 delivering in time. Now we claim they are hold en, as the lumber can 
 be bought here (which of course will cost the merchant much more 
 than he gets), and that the contract says nothing about " dangers of 
 the seas, " or coming from the South. 
 
 A. If a dealer sells a cargo of lumber to arrive and it fails to 
 arrive he is absolved from the contract. But if he engages to de- 
 liver a certain quantity of lumber within a given time, he must 
 do it or respond with whatever damages directly results from 
 his failure. 
 
 32. A purchases of B 25 barrels of sugar. B refuses to deliver 
 the goods. Can A compel B to deliver them, or can A compel B to 
 pay the difference on the advance of the goods ? 
 
 A. If the order and acceptance were verbal, and no consid- 
 eration passed, B cannot be compelled either to deliver the 
 sugar or to pay any damages for his refusal. If B sold the sugar 
 and has no good reason for the non-delivery, he cannot honestly 
 avail himself of the statute of frauds as an excuse for failing in 
 his contract, but the law in the case supposed will not compel 
 its performance. If the contract of sale was in writing or any 
 consideration for it was given and received, then it may be 
 legally enforced, and judgment recovered for all proven damages. 
 
 33. A buys a cow of B, price $25. A says, " Keep her until next 
 Wednesday, feed same as you have, and I will then come for her." 
 Before Wednesday, however, the animal dies — no fault or carelessness 
 of B. On whom does the loss fall ? 
 
 A. There having been, as far as stated, not even a construe- 
 
SELLER AXD PURCHASER. 
 
 465 
 
 tive delivery of the cow, tlie loss will fall on the seller. A gen- 
 tleman we know very well, sold a horse on Saturday, for 82,000, 
 the buyer to take him from tlie sale stable where he was kept, on 
 Monday. In the interval the horse died from a sudden conges- 
 tion of the lungs. The seller made no claim on the buyer for 
 the money. 
 
 34. If I buy goods of a wholesale merchant on a credit of 4 
 months, and after I reach home (Albany) he sends me the goods with 
 the bill marked ''30 days," does my acceptance of the goods and bill 
 without calling the merchant's attention at the time that the bill should 
 read four months, make the contract due in thirty days instead of 4 
 months ? 
 
 A. If the 4 months' contract can be proved, the entry upon 
 the bill of " 30 days " will not legally shorten the term. 
 
 35. A & Co., of New York, sell B & Co., of Boston, a parcel of 
 goods of a refuse nature, "delivered at Boston," no delivery date 
 mentioned on contract, but goods to be delivered when collected. 
 Goods cannot be procured readily in the open market, their production 
 being dependent upon the manufacture of other goods, but some can 
 be had when produced. Goods to fill contract are shipped, and lost in 
 transit. Cannot B & Co. require delivery of A & Co. as though no 
 shipment had been made, and is there any law or usage which would 
 justify A & Co. in refusing to make further deliveries under the con- 
 tract ? It is claimed by some that A & Co. having sold goods to be 
 shipped when collected, and shipment having been made, they are 
 thereby relieved from further deliveries under contract. 
 
 A. The answer to this will depend somewhat on the terms of 
 the contract. If its fair interpretation simply require A & Co. 
 to collect a given quantity of a certain article within a reasona- 
 ble time and ship it to Boston, paying the cost of its delivery, 
 then the shipment of the required amount with prepayment or 
 provision for the freight, will fulfill the obligation, and no further 
 shipment could be required in case the property is lost on the 
 way. If on the other hand A & Co. have undertaken absolutely 
 to deliver to B <fe Co. in Boston a certain quantity of goods at a 
 certain fixed price, they must do it at whatever cost, or respond 
 for the failure in the damages that result. 
 
 36. X, in New York, sells a lot of seed to Z in Rotterdam, with 
 the conditions of cost, freight, and insurance. X insures the goods in 
 New York, subject to 10 per cent, particular average, these being the 
 
 30 
 
466 
 
 SELLER AXD PURCHASER. 
 
 best obtainable conditions. The vessel carrying the seed meets with 
 an accident, and the seed is damaged to the extent of 8 per cent. Z 
 claims this amount of damage from X. Can X be held responsible 
 for this amount, or for any damage at all ? 
 
 A. The damage not amounting to tlie per centum limited by 
 the policy of insurance, i. e., 10 per cent, in the sum insured, no 
 claim can be made on the underwriter. The insurance having 
 been effected on the best terms obtainable, i. e., subject to parti- 
 cular average if amounting to 10 per cent., the seller cannot be 
 held responsible for any loss or damage falling short of these 
 terms. 
 
 MISCELLANEOUS. 
 
 37. Having purchased at auction a number of barrels of eggs, 
 which were sold as "fresh State eggs," 1 find upon examination, and 
 after sending a portion of them to some of my customers direct from 
 the auction room, that they prove to be rotten and unsalable, and most 
 ,of them have been returned to me, very much injuring my trade. Let 
 me know to whom I am to look for redress ? While the auctioneer 
 admits they w^ere sold as I have stated above, and acknowledges that 
 it ought to be made right, he claims that they were sold as represented 
 hy the consignee to him, and refers me to them. They (the consignees) 
 ;refer me to the shipper. Of the three parties who, in your opinion, are 
 liable ? 
 
 A. Unless the representation amounted to a warranty, the 
 buyer has no redress. The old rule of caveat emptor (let the 
 buyer beware) applies to such transactions. But if the goods 
 were sold as merchantable, and the buyer discovered their unmer- 
 chantable character within a reasonable time, the auctioneer is 
 liable. 
 
 38. A man asks the price of certain goods, which is given him. 
 He then asks the terms, and is told 30 days, with a discount of 5 per 
 cent. He then purchases the goods. Now if he does not pay for them 
 until 60 days has expired is he entitled to the 5 per cent ? 
 
 A. If he is indulged without notice to the extent of 60 days 
 he would have a plausible right to consider the conditions as 
 waived in his case, and to claim the discount ; but a formal 
 notice at the end of 30 days w^ill defeat such a claim. 
 
 39. A French vessel condemned in a foreign port was sold at 
 public auction to an American citizen, who obtained for her a provis- 
 ional register from the United States Consul, to reach an American 
 
SELLER AND PURCHASER. 
 
 467 
 
 port under the United States flag. Cargo was given by parties disin- 
 terested in the ownership of the vessel. Invoice for the same was duly- 
 legalized as required by law by the Consul. On arrival here the vessel 
 was seized, together with the cargo, by the United States shoriif for 
 aa infringement of the navigation laws, but was released on bonds 
 being given by the owner of the vessel and the consignees for the 
 cargo, the owner and the consignees becoming surety for each other on 
 the bonds. The Government having now released the vessel and cargo 
 upon payment of $250 fine conjointly, we wish to know if the vessel 
 cannot be held responsible for one-half the fine supposed to be due from 
 the cargo ? The owner of the vessel has since failed, and the other 
 half due from the vessel is claimed from the surety on the bond. Can 
 the surety not hold the vessel again liable for this part of the fine ? 
 The decision of the G-overnment, insomuch that it does not sustain the 
 act of the Consul, seems strange. The question now, however, is who 
 shall pay the imposed fine, the vessel or the cargo ? 
 
 A. We doubt if the vessel can be held to pay the portion of 
 the fine levied on the cargo under the circumstances narrated. 
 
 40. A sells to B a bill of goods to be delivered in bond at a certain 
 price, less estimated duty. In the interval between the date of con* 
 tract and stipulated delivery the duty on the article (25 per cent.) has 
 been abohshed. Who is entitled to the profit created by the unex- 
 pected legislation ? If the duty, instead of being abolished, had in 
 the same period been raised 25 or 50 per cent., would the purchaser be 
 bound to abide by the previous and lower rate ? 
 
 A. The seller is merely bound to deliver in either case at a 
 price that will enable the buyer to receive the goods duty free. 
 
 41. A owns a storehouse on navigable waters and is a buyer and 
 seller of grain, usually shipping by canal to the New York market and 
 occasionally selling at his storehouse. B, C, D, and E are farmers, and 
 not being satisfied with the price that A is willing to pay them for their 
 grain, conclude to put it in store with A, and do so. F is a grain 
 buyer from New York and buys of A at his storehouse a boat load of 
 grain, A representing the grain as his own, and F pays A for the 
 grain. Two years after the transaction B, C, D, and E notify F that 
 a portion of the grain that he paid A for was theirs and demand pay 
 of F. A in the meantime has failed. Is F holden to B, C, D, and E 
 for their grain stored with A ? 
 
 A If F is notified within a reasonable time he can be made 
 to pay for the grain, since A cannot give a good title to the grain, 
 it belonging to B, C, D, and E, sent to him for storage and not for 
 sale. The lapse of time leaves it a question of due diligence. 
 If the owners of the grain knew that F had bought it, and waited 
 
y 
 
 468 SELLER AXD PURCHASER. 
 
 two years before they laid any claim to the proceeds, flierc may 
 be some question whether they are entitled to recover. 
 
 42. Suppose A to buy a bill of goods on July 12, and to be dated 
 as August 20, would all subsequent bills (by the general rules of busi- 
 ness) necessarily be as August 20 ? 
 
 A. The agreement to date a single bill thus far ahead would 
 not carry with it the date of all intermediate bills, unless there 
 was some agreement or understanding to this effect. 
 
 43. A, B & C are parties having mutual business relations. A has 
 been in the habit of buying goods of B and paying cash for same wher 
 payment has been due. I\'ow C holds some notes made by B anc" 
 offers the same to A at a good discount. Has A the right, withouf 
 any understanding to that effect, to turn over said notes to B in pay* 
 ment for merchandise, and can he compel B to accept same ? 
 
 A. If the notes given by B to C are negotiable, he has the 
 right to sell them to A ; and when due in A's hands they are a 
 legal offset to A's indebtedness to B up to their face value. This 
 is " the law of the case ;" but if A purchased goods of B with 
 the distinct understanding that he would pay him the money, 
 and there is anything in the purchase of the notes that looks 
 like a trick or device, by sharp practice, to take advantage of the 
 seller in the matter of payment, the moral right would not be 
 quite as clear. 
 
 44. In the sale or mortgaging of vessels does the law require that 
 a wife shall relinquish her dower when the vessel is in name of hus- 
 band, or if in name of wife must the husband join in the execution of 
 conveyance ? 
 
 A. A ship is not real estate, and a wife has not a right of 
 dower in the property. 
 
 45. Is it a law of the customs department that all bills of sale of 
 vessels must have a notary's certificate attached ? . For instance, a 
 merchant and shipowner well known to the custom officers where he re- 
 sides and does business, and who buys and sells vessels frequently, 
 sells a vessel to a party who is also known to these officers. Is not the 
 merchant's signature, done in presence of the Collector, sufficient with- 
 out the notarial certificate ? 
 
 A. The merchant's signature is not sufficient, and the act of 
 Congress is imperative : " No bill of sale, mortgage, hypotheca- 
 tion, conveyance, or discharge of mortgage, or other incum- 
 
SELLER AND PURCUA8ER. 
 
 469 
 
 brance, of any vessel, shall be recorded unless the same is duly 
 acknowledged before a notary public or other officer authorized 
 to take acknowledgments of deeds." 
 
 46. D orders from V 20 reams of paper, 20x24 to weigh 24 lbs. 
 to the ream, at eight cents, to be delivered in bundles, strongly wrapped 
 up ; the paper being intended for shipment to a distant port. The 
 paper arrives in exceedingly heavy wrappers, the 20 reams weighing 
 gross 463 pounds, while several sheets of the paper taken from the 
 paper bundles indicate on the paper scales only 22 pounds to the ream. 
 D promises to pay at the rate of $1.7G per ream (22 x 8 cents), while V" 
 pretends that he has a right to charge 453 pounds at eight cents, thus 
 charging for the common wrapper the same price as for the paper. 
 On shipping this paper D runs the risk of having it rejected by his 
 client as too light, and this fact alone should induce V to be less 
 obstinate. Now please state if V has a legal right to claim pay for the 
 463 pounds. 
 
 A. It is customary to include the wrappers and cord in the 
 weight of printing paper, although it ouglit to weigh enough to 
 clear all such tare. D can take the lot at 463 pounds, or reject 
 it as not coming up to the weight ordered. 
 
 47. Contracts have been made in the United States for arms, am- 
 munition, leather, metals, provisions, etc.. for the use of the armies of 
 Russia and Turkey, and the articles have been shipped direct to their 
 ports ; but in case of war they will be shipped to a port of France, 
 Belgium, or Germany, to be forwarded by rail across their territory. 
 Arms and ammunition are ready for use, also provisions ; leather and 
 metals are for them to make war material. These contracts are made 
 with individuals, but it is known that they are for these governments. 
 The ownership is in citizens of the United States until they arrive at 
 their destination. Do tliey infringe any neutrality laws by shipping 
 these articles to neutral ports, and are they liable to capture on the 
 ocean ? 
 
 A. If really intended for the use of Russia, under a contract, 
 the goods would be liable to seizure provided they Avere shipped 
 after the war begun, although the contract was made before the 
 war. But if actually shipped before the war, the legal title be- 
 ing still in the shipper, they would be exempt. Such a shipment 
 would not be a violation of any statute in this country. 
 
 48. A sells to B an invoice of merchandise stored at a United 
 States bonded warehouse, renders invoice to B, but as the invoice can. 
 not be transferred in bond (according to a new regulation), it remains 
 in the bonded warehouse until delivered at a later indefinite period, in 
 
470 
 
 SELLER AND PURCHASER. 
 
 A's name. A holds an insurance policy for the value of the goods, 
 reading as usual, " on merchandise, etc., his own property or held by 
 him in trust, or on commission, or sold but not delivered, and agrees 
 to keep the goods insured under this policy, without transferring the 
 policy to B. " Now the question is, whether A (the seller) can recover, 
 in case of loss by fire, under the circumstances (of course to indemnify 
 the buyer), or whether the rendition of invoice is considered an actual 
 delivery ? 
 
 A. Under the conditions named, the insurance would apply 
 to the goods in case they were burned or otherwise damaged 
 by fire. 
 
 49. If we sell a bill of merchandise and stamp on the contract of 
 sale and our bill, " payable in legal-tender notes, commonly known 
 as greenbacks, " can we compel the payment in greenbacks, or can 
 the buyer pay in legal tender silver dollars or silver certificates ? 
 
 A. If the mode of payment is specified in, and made part of 
 the contract, it can be enforced ; but the mere stamping of such 
 a clause on the paper will not make it a legal part of the agree- 
 ment. 
 
 PURCHASEE. 
 
 50. A salesman visited me last Saturday and showed me a sample 
 of goods on which I gave Inm a verbal order. The goods were de- 
 livered to me JNlonday ; on examination they turned out not equal to 
 sample. I immediately returned them to the manufacturer, who re- 
 fused to take them back. I wrote to him that the goods not being 
 equal to sample 1 held them subject to his orders and at his risk. Am 
 I right ? Can he make me pay for the goods, and w^hat course am I 
 to follow ? 
 
 A. The statement being substantiated by sufficient evidence, 
 our correspondent can keep the goods on storage until called for. 
 The seller may sue for his pay, when the facts stated may be 
 proved and he cannot recover. 
 
 51. A friend in Canada did last year three transactions with a 
 house in Pennsylvania, always for cash ; that is. the buyer had to send 
 the cash after the receipt of the goods. This year he sends an order 
 to Canada under the same conditions ; the goods were shipped on 
 March 8, and arrived at the end of March. A few days after this the 
 consignee assigned his property, and his attorney wrote to my friends 
 in Canada saying that he offers 10 per cent, to the creditors I In Can- 
 ada and in France there are laws saying that a merchant has no right 
 to buy when he is behind, and has to refund or give back all goods 
 received within 30 days of his failure. It is clear that it is a fraud to 
 
SELLER AND PURCHASER. 
 
 471 
 
 receive goods three to four days before you assign, and offer 10 per 
 cent, in payment. But has the creditor a right to take back his goods, 
 or can he have the man indicted for a fraud ? Or has he to be satis- 
 fied, and take the 1 per cent, offered ? 
 
 A. If there were no other circumstances attending the trans- 
 action, indicating an intention to give credit, the law interprets 
 such a sale to mean cash on delivery. (Southwestern Freight, 
 etc., V. Plant, 45 Wisconsin, 517.) Where payment and delivery 
 are agreed to be simultaneous, and payment is evaded, omitted, 
 or refused by the purchaser on getting possession of the goods, 
 the seller may immediately claim them. This statement is sup- 
 ported by numerous authorities, among them the Pennsylvania 
 case of Henderson v. Lauck, 21 Penn. St., 359. In Adams v. 
 O'Connor, 100 Mass., 515, Judge Gray said : " The sale to the 
 defendants liaving been found by the jury to have been for cash, 
 was a conditional sale, and vested no title in the purchasers 
 until the terms of sale had been complied with." See Benja- 
 min on Sales, second American edition, sec. 320, and copious 
 notes. In Backentoss v. Speicher et ux., 31 Penn. St., 324, the 
 Pennsylvania Supreme Court said : " A sale of goods for cash 
 is, strictly speaking, a sale on condition, * * yet if the vendor 
 acquiesce in a possession obtained in disregard of the condition, 
 he waives it, and though he may recover the price by action, he 
 cannot recover the goods in specie." In the same case the 
 Court said that in Pennsylvania, contrary to the rule in New 
 York, " where there is a sale of goods and delivery of possession, 
 even though the buyer intends at the time not to pay for them, 
 and conceals his insolvency from the vendor, it is not a cheat 
 that will avoid the sale. " 
 
 The Canadian Insolvent act makes the purchase of goods 
 under such circumstances a crime punishable by imprisonment, 
 provided that in suit for the recovery of the money due on tlie 
 contract, it shall be the judgment of the court the transaction 
 was fraudulent in intent. (Clark's Insolvent Acts, 352, sec. 
 336.) 
 
 On the wliole, our conclusion is that the case is not free from 
 doubt as tlie result of an attempt to follow up the debtor, but if 
 the creditor is willing to take some risk for sake of punishing 
 
472 
 
 SELLER AND PURCHASER. 
 
 the fraud, and possibly recovering his property, there is suf- 
 ficient ground upon which to proceed. 
 
 52. A sells B a bill of goods January 8, on half four and half six 
 months' time from February 1. Goods are shipped and billed January 
 8, with terms half four and half six months from February 1. " B 
 receives goods a day or two afterward, and writes, January ] 2, that 
 the goods should not have been shipped before February 1, and also 
 claims a reduction on some of the goods. The reduction is granted, 
 and B keeps the goods and pays for them in due time. Was not B a 
 debtor to A for amount of bill, less the allowance, on the day the con- 
 cession was made, or did he only commence owing it February 1 ? 
 
 A. The date of B's indebtedness is the day of sale and de- 
 livery. The fact that the credit is to be extended to the 1st of 
 February does not fix the latter as the date when the obligation 
 begins ; nor does the date of the concession alter the terms of 
 the original credit. 
 
 53. Our salesman sells by sample to a firm in Chicago 20 casks 
 Cadiz wine. Wines are shipped and promptly paid for. Just two 
 months subsequently, when market price of the wine has fallen at least 
 50 per cent., the Chicago house reship the goods to us, with the request 
 that we take them back and remit check for amount of invoice, they 
 claiming goods to be impure and not like sample. Our invoice plainly 
 read that all claims for damage or deduction must be made witliin five 
 days after receipt of goods. Can we be legally compelled to take back 
 goods and refund money after so great a lapse of time ? 
 
 A. Unless some satisfactory explanation of the delay can be 
 given, the lapse of time is sufficient to prevent any recovery by 
 the Chicago house. 
 
 54. We sold to a party a lot of goods, 60 days' note. On our re- 
 peated demand for it, we do not get a satisfactory reply. Must we 
 wait until the 60 days are gone, or have we a right to enforce the con- 
 tract before the bill becomes due ? 
 
 A. If the contract to give the note is clearly proved the same 
 may be demanded, and if it is refused, the purchaser may be sued 
 for the debt, and thus be compelled to tender the note and cost 
 or pay the money. 
 
 55. A, a merchant in London, agent for several houses abroad^ 
 sells to B, also of London, a cargo of wheat, in the name of C, a comr 
 mission merchant here, without the latter's consent, and at a price be- 
 low the current rate here, hoping that the market would decline later 
 
SELLER AND PURCUASER. 
 
 473 
 
 on. Prices, on the contrary, having advanced considerably, and the 
 shipment not being effected, has not B a right to claim damages from 
 C, from the mere fact that A is in the habit of selling cargoes as C's 
 agent, though the latter can show that he did not authorize A to sell 
 the cargo in question ? 
 
 A. The buyer B has no claim whatever on C, under the cir 
 cumstances described. 
 
 56. A sells B, through a broker, goods to arrive, and which are 
 guarantied to be equal to sample shown, which B retains. On arrival 
 of the goods, it being impracticable to break bulk and examine con- 
 tents of packages, B ships the goods to his customer, who is a con- 
 sumer, and there the packages are opened, showing the quality of the 
 goods to be inferior to the sample, as well as having all appearance of 
 false packing. 1, Does not the act of the broker in selling the goods 
 by a sample handed him by A bind A ? 2. If A refuses to adjust 
 the damage has not B good cause for action ? 
 
 A. The above statement being duly established in every par- 
 ticular would give B a good cause of action. But if the proper 
 examination of the goods was not wholly impracticable, " only 
 inconvenient, and a longer time elapsed before the claim was 
 made than the buyer was fairly entitled to, then he has legally 
 waived his right to a reclamation. He might still claim, how- 
 ever, for a false quantity, if this is what is meant by false 
 packing. 
 
 57. A called on B and asked to be given some samples to sell on 
 commission. A sold some merchandise to C which is delivered by B. 
 A again calls on C and is paid the value of the merchandise delivered 
 to C, but fails to hand same over to B. Can C be compelled to pay for 
 the merchandise to B after having once paid A for same, although no 
 notice is given to C that A has any authority to collect ? 
 
 A. Authority to sell by sample is not necessarily authority to 
 collect the proceeds of the sale. The proper way is for a buyer 
 to pay in a check to the order of the principal. In the case de- 
 scribed if B has not in any manner given to A any color of 
 authority to receive the money, C must pay for his purchase 
 again. 
 
 58. We shipped a case of goods on the S and fi-om the 
 
 fact that the vessel sunk, have every reason to believe that tlie goods 
 are lost. On whom does the loss for the value of the goods fall, in the 
 event of no responsibility being attached to the owners ? The goods 
 were sold on the terms as previous shipment, viz. : dehverable on dock. 
 
474 SELLER AND PURCHASER 
 
 A. If the goods were deliverable on the dock here with no 
 obligation to insure, the loss falls on the buyer, the water transit 
 being at his risk. 
 
 59. Does the acceptance of a purchase note and order from 
 brokers of a lot of coffee stored in warehouse place any risk upon us 
 until the goods are taken away, provided we have no notice regarding 
 storage and insurance ? 
 
 A. If the buyer accepts the order on a warehouse as the de- 
 livery of the goods he is then the owner and responsible for 
 them ; but if he does not, the seller is responsible until the buyer 
 has had a reasonable time in which to remove them. 
 
 60. If I buy at any place of business, in good faith and in the 
 regular way, according to samples shown to me by some party, a lot of 
 produce lying at some depot here at the time, take this in and pay 
 for it, can I be forced to give up my right in said goods and deliver 
 them up to some other party who claims to have a chattel mortgage on 
 farm or acres on which said produce was raised ? Can I not justly 
 presume that the^ party who has the goods here at the depot and has 
 control of them, is the rightful owner, or am I obliged to make a long 
 and tedious inquiry first at the place where the goods came from in 
 order to be safe ? If such was the case, would it not make safe pur- 
 chases of the nature above stated almost impossible ? 
 
 A. The buyer of everything but negotiable securities (which 
 are excepted from the rule) must beware for himself. If the 
 seller has no title, and no authority to sell, he cannot give title 
 to the buyer. A man goes to a jewelry store and buys a watch 
 which the jeweler did not own (say it was stolen or left Avith 
 him for repairs) and pays his money for it, the real owner can 
 come and take it away from him, and unless he can recover of 
 the seller the money he paid is lost. A produce dealer receives 
 two cargoes of grain, one on storage and the other for sale. If 
 he sells both cargoes, the owner of the one left on storage can 
 recover the property or its value of the buyer. 
 
 61. A party sells to us a lot of goods ; shortly afterward we are 
 notified by the patentees (third parties) that we must not sell the 
 articles because they are patented. Can we be compelled to keep and 
 pay for the goods, or should we return them ? 
 
 A. If the articles are really subject to the claim of a paten- 
 tee, so that the buyer cannot sell them, he may return them and 
 refuse to pay for them. But if the claim is fictitious, then it is 
 
SELLER AND PURCHASER. 
 
 475 
 
 a serious question whether the seller may not insist on the fulfill- 
 ment of the contract, the notice to the contrary notwitlistanding. 
 A very few years ago all the dealers in a certain trade had un- 
 wittingly purchased into a lawsuit in this way. They laid in a 
 stock of articles about which there was a dispute between two 
 rival patentees. After the goods had been sold by one claimant, 
 the purchasers were served with a notice from the other claunant. 
 Some had resold part of the property ; others offered to return 
 them, and were refused, the seller declining to take them back, 
 but undertaking to defend for his customers. At last, after 
 several hundreds of suits and cross suits and actions of all kinds 
 had been inaugurated, the case was settled. 
 
 62. We have been executing the orders of a customer for a certain 
 class of goods of our manufacture, at uniform rates. Early last month 
 we received from him a similar order, but with a discount specified 
 thereon, which we could not rllow, and if this had been noticed at the 
 time, he would have been at once notified to that effect and execution 
 of the order withheld, but our order clerk overlooked the said discount 
 specification, and goods with invoices were forwarded under previt)us 
 conditions. About ten days later we received the customer's remit- 
 tance for the invoice with the said discount deducted, which directed 
 our attention to the omission of our order clerk. We immediately re- 
 turned the remittance, with the proper explanation, but it was returned 
 to us the party insisting upon the discount being allowed. On the 21st 
 ult., we again returned the remittance with a full explanation why we 
 could not accept it and offered the alternative of returning the goods. 
 We did not hear from the party again until to-day, when the original 
 remittance is again sent us and the discount insisted upon. We 
 shall again have to refuse it, as for certain reasons we cannot accept it 
 unless legally compelled. We claim morally, that our customer is in 
 the wrong, because on receipt of the invoice he should have returned 
 it for correlation, and in case of our refusal, place the goods at our dis- 
 posal ; failing to do this, he accepted the goods and invoice on our 
 conditions. 
 
 A. If there were no other elements of contract than such as 
 are stated in the above recital, the minds of the parties never 
 met, no contract was formed, and the customer must pay for the 
 goods at the invoice rate if he does not accept the option of- 
 fered him to return them. 
 
 63. A lady bought a sofa of a dealer. She bought it on install- 
 ments. She paid her dues every month to the dealer, but before she 
 had the amount paid up she sold the sofa to another dealer ; but this 
 
476 
 
 SELLER AND PURCHASER. 
 
 dealer she sold it to did not know she bought on installments, and did 
 not know that the amount due on the sofa was not- paid up yet ; sc 
 that when the original dealer heard that the sofa was sold to another 
 he seized it from his store, and told him if he wanted to keep it he had 
 to pay $ 1 0. Did he have a right to seize it from his store, and 
 make him pay $10 for it, this dealer not knowing it was bought on 
 installments ? 
 
 A. In a conditional sale of this kind the property in the goods 
 docs not pass until the conditions are performed. The lady, 
 therefore, had no title to the sofa, and the seller had the right 
 to reclaim it wherever found, just as if it had been stolen. (Ben- 
 jamin on Sales, sec. 320, note d.) The original OTvncr may be 
 forced to his action at law for the recovery of his property, if the 
 present holder chooses to contest the claim. 
 
 64. I bought $100 worth of goods on the installment plan, and 
 trusted entirely to the seller. I have paid about half the amount, and 
 I now find I am swindled. Is there any way I can have the goods 
 valued, and compel him (the seller) to accept what is just and fair ? I 
 want to do right, but don't like being swindled. He holds a chattel 
 mortgage, and if I stop payment I suppose he can take away the 
 goods. 
 
 A. If the victim can prove that the goods delivered are not 
 equal in value to those exhibited to him when the purchase was 
 made, he may stand a suit and set up that defense ; but if the 
 goods are the same, lie has no remedy, unless the fault was 
 latent, that is, not discoverable on mere inspection, or unless 
 there was some warranty, actual or implied. An implied war- 
 ranty might arise if the article was designed to accomplish a 
 specific purpose, and w^as unfit therefor. But it must be specific 
 and not a general use on w^liich such a warranty can be founded. 
 The seller of a cheap piano, for example, does not warrant by 
 implication that it will produce endurable music, and the buyer 
 of such an instrument has no remedy when he gets his purchase 
 home and finds that it is practically worthless. 
 
 65. What kind of a statement should we ask of a customer in 
 order that we may be able to punish him in case his representations to 
 us were false concerning his condition ? Would a verbal statement be 
 sufiQcient, and entered in statement book at the time ? 
 
 A. The verbal statement would be sufficient if its terms were 
 distinctly recorded, and legal proof can be made of the exactness 
 
SELLER AND PURCHASER. 
 
 477 
 
 of tlie record ; but a written statement is less liable to be con- 
 tested. The items of capital, assets, debts, and all the evidence 
 of solvency should be made as positive and explicit as possible. 
 
 66. A buys a horse of C's wife while C is away from home, which 
 horse C wants to sell. A takes the horse home with him. The next 
 morning C comes with B and demands the horse or $10 more, claim- 
 ing that he had sold the horse to B the morning before and received 
 $10 on account. To whom does the horse belong? 
 
 A. As between A and C, the former can legally hold the 
 horse ; as between A and B he also has title, unless there has 
 been some constructive delivery to the latter before A took pos- 
 session. 
 
 67. ^Ve are buying wheat direct from farmers, and have verbally 
 agreed with a number (on their promise to hold their wheat for us) to 
 give them as much when they are ready to sell as will any other dealer. 
 Since the rapid decline in wheat, other dealers have been in the market, 
 and on, the 2 2d of January offered a farmer (with whom we had the 
 above promise or agreement), a certain price for his wheat, which he 
 refused to accept, and immediately wrote to us stating that if we would 
 give him a certain advance on the above price he would sell to us. 
 We received the letter on the 24th January, when wheat had materially 
 declined. We immediately wrote, informing him of the decline in 
 wheat, and stated that we could not give him the price he was offered 
 on the 22d, and offered him the market price on that day the 24th, 
 which he refused, and claims that we are bound to pay him the price 
 he was offered on the 22d inst. In making the promise we intended 
 to convey the idea that we would give as much for wheat as would any 
 other dealer on the same day. Are we honorably bound to take the 
 farmer's wheat at the price he was offered two days previous to the day 
 he informed us he was ready to sell ? 
 
 A. All that the buyers are honorably bound to do is to pay 
 the market price on the day the wheat is delivered, this being 
 ascertained under the rule by the highest rate at which the same 
 wheat then and there can be sold to any other bona fide buyer. 
 
 68. B purchases of A an article for $100, but has not the money 
 to pay for it at the time, and says to A, "I have sold these goods and 
 will take them to my customer who will pay me and I will be back in 
 an hour and pay you." Upon these representations A let him take the 
 goods, knowing at the same time B was bankrupt, with no credit or 
 means. During the day B returns and says he did not receive the 
 money. Accidentally A meets B's customer, who says that he paid 
 him cash, on delivery of the article, and up to this time B has not paid 
 
478 
 
 SELLER AXD PULiCUASER. 
 
 A. Has B by this transaction made himself liable to arrest and 
 punishment ? 
 
 A. The swindler has not made himself legally liable to arrest 
 and imprisonment. He did not make false and material misre- 
 presentations to obtain the goods ; but he obtained them by false 
 promises, which are not actionable. 
 
 69. A sells a bill of Havanna tobacco in bales to B on three 
 months' time. B examines the tobacco in the warehouse, accepts it, 
 and it is then reshipped in bond to California, Two or three days be- 
 fore the bill is due B tells A that two or three of the bales are dam- 
 aged, and awaits further particulars before making a claim. A makes 
 no promises, and B pays the bill at maturity, stating that he is instructed 
 by his partners not to do so. Ten or twelve days afterward B receives a 
 specimen of the damage, which he shows to A, and reads to him a 
 letter received from his partners in California, claiming damage on 
 thirty bales (nearly half the lot), and offering to sell them for account 
 of A. This A declines to accept, and furthermore, refuses to allow 
 any claim, on the ground that to the best of his belief the tobacco was 
 sound when sold, that it was examined and accepted by B, and .that the 
 seller cannot be held liable for goods that are perishable in their nature 
 three months after he has ceased to have any control of them. B con. 
 tends that the clai.n is morally and legally just. A asserts that he is 
 not liable. 
 
 A. If the case is fairly presented in the above statement, we 
 see no proper ground on which B can base any claim upon the 
 seller. 
 
 SELLER. 
 
 70. TTe receive an order by telegraph to sell a certain quantity of 
 wheat to arrive at a certain price. We reply that we cannot get that 
 price but can sell at a certain lower price. Later we do sell at limit 
 but the owner of the wheat claims that our reply canceled his order 
 to sell and that therefore we had no authority to make a sale until we 
 had consulted further with him. 
 
 A. The reply suspends the original order, and tlie person ad- 
 dressed must obtain fresh authority, or he sells at his own risk. 
 
 71. If we sell a bill of goods " as are, " said goods supposed to be 
 sound, and a reasonable time having passed, the goods are examined 
 and found damaged, can the buyer be forced to take the goods and 
 pay for the same as if sound ? The goods were known to be liable to 
 damage. 
 
 A. If the quality of the goods was misrepresented by tlie 
 seller the sale " as are " will not protect him ; but if there was 
 
SELLER AXD PURCHASER. 
 
 479 
 
 no such misrepresentation, and the goods were sold " as they 
 are " the buyer cannot reject them for damage if delivered to 
 him in specie. 
 
 72. We ship certain goods to a distant city, having an understand- 
 ing that we are to draw at sight, with biU of lading attached to 
 draft. We ship the goods marked with our customer's address, 
 and make a sight draft accompanied by the bill of lading. The 
 draft was not honored, and the goods were delivered to the consignee, 
 who proved to be a swindler and irresponsible. Have we recourse 
 upon the freight line who delivered the goods without presentation of 
 the bill of lading ? 
 
 A. Our correspondents have no recourse. The way to secure 
 the draft by the bill of lading is to ship the goods to order and 
 then to indorse the bill of lading deliverable to the ultimate 
 consignee on payment of the draft. But if the goods are ship- 
 ped to John Smith, and the carrier delivers the property to John 
 Smith, he has done all that he undertook to do, and the fact 
 that Smith did not possess or deliver the bill of lading in such a 
 case is of no account. 
 
 73. A living here buys an engine of B in New York, pays $300 
 cash and gives notes for the balance $900, and takes a receipted in- 
 voice. B learns soon after shipping the engine (consigned to A) that 
 A has failed and made an assignment. B comes here to look after his 
 interest, and finds that the engine has not been delivered to A, but is 
 in the railway company's possession, subject to freight charges. B pays 
 the charges and reships the engine consigned to himself in Xew York. 
 Other creditors claim that the engine was the property of A, that the 
 railway company had no right to deliver it to B, and that B is a credi- 
 tor to A to the amount of $900, and must take his chances with the 
 others. Evidently B has ''nine points" in his favor, but how about 
 the tenth as claimed by the other creditors ? 
 
 A. B has the legal right to stop the engine in transitu, and 
 to reclaim the property as his own at any time before the de- 
 livery has been completed. 
 
 74. A sells B through a broker a bill of goods ; the broker sends 
 both A and B a contract ; the goods are delivered and A renders B 
 an itemized bill for the same ; A receives B's check for the amount of 
 bill, giving a receipt in full. Two or three days later A discovers that 
 a mistake has been made in the bill rendered ; a portion of the sound 
 goods having been charged at the damaged price, which was two-thirds 
 of the price of the sound goods. As soon as the error was discovered, 
 
480 
 
 SELLER AND PURCHASER. 
 
 A sent B a corrected bill, with the request that he (B) would pay the 
 difference. This difference B refused to pay, saying that he liad al- 
 ready disposed of the goods to C, to whom he had shown A's first bill, 
 and that C had agreed to give him (B) a certain percentage of the face 
 of A's first bill for his (B's) profit. Be good enough to tell me if you 
 think A's claim a just one, or your opinion on the case generally. 
 
 A. KB still holds the goods he would be bound to rectify 
 the error ; and if he can obtain a readjustment of C, both B and 
 C would be morally bound to make the correction. But if the 
 property has gone beyond B's control, and C will not consent to 
 readjustment, A cannot enforce it. It is a settled rule that 
 where one of two parties must suffer from an error, the one who 
 made it must bear the burden. 
 
 75. A bought a bill of goods of B, understood to be sound at 
 market price. When the goods were retailed to customers they were 
 returned as being unfit for use. A sent the goods back to B with a 
 check for what had been used, but neither would be received, and suit 
 has been brought in the case. 
 
 A. If the defect in the goods existed beyond controversy 
 when they were bought, it then becomes a question whether it 
 might have been discovered at once by due diligence on the part 
 of the buyer, so that he could have made his claim within a 
 proper limit of time. If so, then he should not have left it for 
 his customers to find out the unfitness, but ought to have ascer- 
 tained it himself. But if the defect existed and could not be 
 discovered until the goods were retailed for consumption, we 
 think the buyer may then return them and make a legal claim. 
 
 76. I purchased in a neighboring State a pair of horses, second- 
 hand buggy and harness, the seller assuring me of the perfect sound- 
 ness of the horses, and of their ages at six and seven respectively. 
 Not having cash sufficiently to pay for them, I gave my check, which 
 was accepted ; I then left, intending to drive home. I met on my way 
 a man who had been in charge of the horses, and who knev\^ nothing 
 of the transaction. I asked him the ages of tlie horses and condition 
 of the same, and I had certain proof that I was grossly deceived, and 
 the seller was guilty of misrepresentation. Could I have refused to 
 pay the check, and would that have been honorable in me ? Could he 
 compel me to take the horses and pay the price agreed upon ? If I 
 was on the road could he have caused my arrest on learning that I 
 had ordered the bank to stop payment ? I may mention here that the 
 seller had telegraphed to my bank to know if check was good, which 
 was answered in the afiQrmative. 
 
SELLER AXD PUIl CHASER 
 
 481 
 
 A. If the horses were warranted as described, our corres- 
 pondent on learning that he liad been deceived would liave been 
 justified in stopping payment of the check, and returning the 
 property. At any rate he could not be arrested legally for tak- 
 ing such a course. 
 
 77. A, an importer, receives notice from his correspondents in 
 China that they have bought for his account and will ship by certain 
 vessel named 100 cases cassia. B, a broker, sells to C the 100 cases 
 cassia to arrive by certain vessel named, deliverable on arrival. Next 
 vessel from China brings A word that cassia was inferior quality and 
 has been rejected, and therefore is not shipped by said vessel. Is A 
 bound to deliver C the 100 cases cassia on arrival of said vessel, or pay 
 C difference in market value ? 
 
 A. The seller, in the case cited, is only under obligation to 
 deliver the cassia in case it arrives as named in the agreement. 
 It is not a wager (all the authorities say) that tlie goods will 
 arrive, but a contract to sell and deliver them when they arrive. 
 " A sale on arrival by a certain vessel, is held to mean on the 
 arrival of the goods, and not tlie vessel only ; and this construc- 
 tion will always be put upon the conditions, unless tlie language 
 used in the contract is so plain to the contrary as not to admit of 
 it. For tlie courts are unwillino- to assume that the contractins" 
 parties meant to enter into a mere wager. In fact tlie arrival of 
 the goods by that particular vessel is held to be a condition pre- 
 cedent to the vendor's obligation to deliver." — Lovatt v. Hamil- 
 ton, 5 Mee. & W., 639; Shields v. Pattee, 2 Sandf. 262, 4 Coms., 
 122. Tlie latter was a sale of a certain quantity of pig iron 
 " On board the ship S," then at sea. It turned out to be another 
 quantity of pig iron. The court held that the writing was not a 
 sale, but an agreement to sell conditional on the arrival of the 
 iron ; and the iron not being of the quality required the bargain 
 was at an end. 
 
 78. A gives B a quotation for a lot of goods. B promises to con- 
 sider the olfer, and let A know in case he decides to accept. Shortlv 
 after the interview between the parties A learns by cable that the 
 market has advanced, and immediately writes B a note withdrawing 
 his offer. Meanwhile B's messenger is on the way with a note to A 
 accepting the goods. The messenger crossed. Is A obliged to let B 
 have the goods at the price quoted ? 
 
 31 
 
482 
 
 SELLER AND PURCHASER. 
 
 A. A is not obliged, under those circumstances, to let B have 
 the goods at the first quotation. 
 
 79. A sends to B at his request a lot of goods, which were deliver- 
 able to an employee of B (in his absence), who says 1 do not think 
 these goods will suit Mr. B, but I will show them to him and if they 
 suit he will keep' them." The next day another employee of B calls at 
 the store of A for some other goods, as is frequently his cu&tom, and 
 is asked by A, ''How about those goods; did they suit B ?" This 
 employee answers, " Oh, yes, they are all right ; he will keep them, as 
 they are scarce and he can get no better." The next day, B having 
 seen the goods, and not desiring to keep them, returns them to A, who 
 declines to take them back under the circumstances, and insists on B 
 keeping them. And A has incurred legal expense to a small amount, 
 and says that B should pay that also, or a portion of it Is it right 
 that B should keep the goods, and if so, should he pay the legal ex 
 pense mcurred by A ? 
 
 A We cannot of course tell what special or implied authority 
 B's employee may have had to convey B's acceptance of the 
 goods ; if there was such authority B is bound by it, and will be 
 lield to pay the price, though not, we tliink, any part of the legal 
 expenses mentioned, that being a damage wliicli would be legally 
 classified as too remote. But if B's employee, as appears most 
 likely, had no authority to give his employer's acceptance, then 
 the question depends somewhat upon the nature of the goods, 
 which would influence the legal conclusion whether or no tlie 
 two days they were retained before rejection was a reasonable 
 time" for their examination. If it was more than a reasonable 
 time in point of law, then B is bound to keep and pay for the 
 goods ; otherwise he had the right to reject and return them. 
 
 80. A, a merchant of New York, authorizes his brokers C and D 
 to buy a lot of goods held by E of Philadelphia, if they can get them 
 at five cents per pound. C and D forward the offer to E by mail, subject 
 to a reply before noon the following day by wire. On the following 
 morning C and D receive a telegram from E accepting the offer, and 
 about ten minutes after the receipt of this telegram, and before A has 
 been notified of said acceptance, a second telegram is received from E 
 saving, if sale is not closed advance price one cent per pound. Is A 
 entitled to the goods in accordance with E's acceptance contained in 
 the first telegram, or does the second telegram following so soon after 
 the first annul the first, and should the goods only be sold at the ad- 
 vance of one cent per pound ? 
 
 A. The seller E has the right to revoke his acceptance at any 
 
I 
 
 SELLER AND PURCUASER. 483 
 
 time before it has been comnmiiicatcd to A, and tlie bargain 
 closed thus. 
 
 81. A firm of commission merchants here order from a commis- 
 sion merchant in an adjoining city a lot of merchandise, such being re- 
 ceived by him daily on consignment from his country shippers. This 
 and other orders are given, with instructions to make good selections, 
 bill same at selling price of that day and send bill of lading and make 
 sight draft for same. These orders were filled as above, goods were 
 received and paid for upon representation. Upon sending a similar 
 order the following week the goods were sent forward as before by the 
 same house, but to the charge for goods and cartage is added 2^ per 
 cent, upon the amount of bill. This was new, no such charge being 
 mentioned in any prior transaction, the goods shipped being those re- 
 ceived by the seller on commission. The reason now assigned for such 
 charge is that if buyers bought the same goods in that market through 
 broker they would have to pay him 2^ per cent for buying the same. 
 Is such a charge of 2^ per cent, by seller just and legal, the same not 
 having been mentioned in any prior transaction ? 
 
 A. We are not prepared to say that if the sellers were 
 obliged to exercise any unusual care in the selection, and were 
 actually troubled more to fill such an order than to make the sale 
 of the goods consigned to them in the ordinary way, they would 
 not be entitled to a brokerage sufficient to compensate them for 
 the difference. We think, however, that after filling a similar 
 order for which there was no such charge they ouglit not now to 
 make it without previous notice. We doubt if it could be legally 
 collected, and it hardly seems equitable, unless, as we have said, the 
 " selection " gave much additional trouble. 
 
 82. A orders goods of Bfor C, A requesting B to send goods and 
 attach bill of lading and draw through a bank. The goods having 
 been received by C, C having paid A and A to the bank, the bank 
 fails after A has paid and before the bank pays B, A does not guar- 
 anty B but simply requests B to attach and draw. The question is : 
 Does A or B lose in the above case ? 
 
 A. The loss will fall upon B unless he can collect of the 
 bank. 
 
 83. We order from a house in London some goods, which they 
 ship, and without any instructions from us get insured and charge us 
 with insurance. The goods are damaged on voyage by shifting of 
 cargo. When we ascertain the damage we send the necessarv docu- 
 ments to the shippers with which to collect insurance. They present 
 them to the insurance company, who call their attention to a'^ clause in 
 
484 
 
 SETTLEMENT OF ACCOUNTS. 
 
 the policy by wliich they are insured only in case of tlie vessel being 
 wrecked or burnt. Now whose loss is it? We supposed by their 
 charge for insurance without any qualification that they were fully in- 
 sured against any disaster. 
 
 A. If the damage resulted from negligent stowage, or from 
 any cause not excepted in the bill of lading, the ship is liable. 
 Without instructions the London house was not bound to insure ; 
 and it was not legal negligence on its part, therefore, to take out 
 a policy which, if its terms are correctly stated, excludes various 
 risks usually covered by marine insurance. If, however, caljle 
 advices were sent, that the goods were insured, and the consignee 
 was thus led to suppose them fully covered, and to neglect in- 
 surance on his own account, this might inyolve the London 
 house in responsibility for the damage. Otherwise, and the ship 
 cannot be held as above suggested, we do not see but the con- 
 signee w^ill have to stand the loss himself. 
 
 84. A purchased of B July 1st 50 lambs at $4 per head, paid $^() 
 on them, and agreed to take them away September 1st, and pay the 
 balance. On September 1st A went after the lambs and 20 of them 
 were dead. Now is A or B the loser ? 
 
 A. If there was an actual sale and change of ownership, the 
 Iambs being selected or so identified that they became at once 
 the property of the buyer, they remain with the seller at the 
 buyer's risk. " Leaving the property in the hands of the seller — 
 if the pledge perish without the fault of the seller — he cannot 
 be called on to return the pledge, but may still call on the l)uycr 
 to pay his del)t." — Parsons on Contraots, volume 1, page 529. 
 " The seller is to keep the thing sold until the time for delivery 
 with ordinary care, and is liable for the want of that care, or of 
 good faith ; but if he does so keep it he is not liable for its loss." 
 —Ibid, 532. 
 
 SETTLEMENT OF ACCOUNTS. 
 
 1 . Two parties agree to order goods from abroad, each taking one- 
 half interest in the importation. . One of the parties attends to the 
 ordering, providing funds, etc. The goods arrive, and by agreement 
 an interest in them is sold to a third party at a stipulated price, and 
 the whole quantity then sold on joint account, resulting in a proht. 
 Statements are rendered by the orderer and receiver of proceeds to 
 each of the parties, showing net profits to their credit. It so happens 
 
SETTLEMENT OF ACCOUNTS. 
 
 486 
 
 there is a running account between tlie orderer and the third party, 
 who, in the meantime fails, and is unable to pay a debit balance against 
 him. What is the proper relation of this credited amount, between 
 the two original parties ? 
 
 A. If No. 3 has paid for the interest which has resulted in a 
 profit that stands to his credit in the hands of No. 1, we do not 
 see that No. 2 has any further connection with it. The question 
 tlien is, how far No. 1 may use it as a set off to the debt which 
 No. 3 ow^es him. If the debt has matured, and both debt and 
 credit are in the same name, we see no reason why this may not 
 be done. 
 
 2. In settling account by note is it customary to inclrfde the inter- 
 est on the three days' grace ? 
 
 A. If the account bears interest it is reckoned on the grace ; 
 but if the note matures when the account is due, the debtor ob- 
 tains the three days' extra time as a bonus for executing the 
 \vritten obligation. 
 
 3. If we buy a bill of goods, say $1,000, terms four months or 6 
 per cent, off for cash, and we pay cash, $500, for what amount should 
 our account be credited ? 
 
 A. The buyer should be credited such a sum of the principal 
 as at 6 per cent, discount will net -^500, and this is 1531.91. 
 
 4. I buy a bill of goods from a firm and they deduct 2tV per cent, 
 from the amount for cash. The goods are delivered without a demand 
 for payment. Two weeks later I voluntarily pay the bill, when they 
 refuse to allow the '2-| per cent. Should I lose the discount, when I 
 stood ready to pay at any time on demand ? I accept the bill as ren. 
 dered, and it is through no fault of mine that the terms are not com- 
 plied with. 
 
 A. Tlie wdiole question turns on a single point not stated, viz. : 
 AYhon was the l»ill payable to secure the benefit of the discount ? 
 Our correspondent is mistaken in supposing that because no de- 
 mund was made for tlie money, it was not his fault that the terms 
 Avere not complied with. A debtor who knows where his credi- 
 tor is to be found is bound to tender him the money to secure 
 the benefit of a discount limited to a given date. Indeed, in all 
 cases, the debtor, whether he owes rent, interest, or principal, is 
 bound to seek out his creditor and i)ay the money to him, witli- 
 
486 
 
 SETTLEMEXT OF ACCOTXTS. 
 
 out waiting for a deinaiid. While this is its legal aspect, the 
 ordinary custom is to allow the cash discount where payment is 
 made within a few days of the purchase, and on the first demand 
 for it, and it seems as if a little sharp practice had been used by 
 the sellers, unless the time was absolutely and positively limited 
 to the day of purchase, or within 24 or 48 hours of it. 
 
 5. A, of Chicago, sells to B, of New York, a quantity of merchan- 
 dise. The price is made delivery in New York, less 5 per cent, for 
 prompt cash. B pays the freight. In settlement B i^emits amount of 
 invoice less 5 per cent., and less freight. A claims that the 5 per cent, 
 should be deducted from amount of invoice after deduction of freight. 
 Who is correct ? 
 
 A. If A had himself paid freight in advance, would he have 
 deducted it from his invoice before taking off the five per cent. ? 
 It is clear that he could not, and B is right» 
 
 6. We are buying goods from an English house through an agent 
 in this city, and we pay in sterling bills ; during the summer the agent 
 called upon us and asked for payment on account in dollars. We gave 
 him 84,000. Some two months later we get an account current and 
 find (for the first time) that the agent had converted the dollars into 
 sterling at the rate then current. To this we objected on the ground 
 that we had not authorized him to buy the exchange and that it takes 
 a mutual agreement for such conversion. We claim that therefore the 
 conversion has yet to be made. 
 
 A. If the money was given as a payment, we think our cor- 
 respondent is wrong, and the price of sterling on the day the 
 money was paid fixes the rate, unless there was some stipulation 
 to the contrary. If the money was lent to the agent, the same 
 to be converted into sterling and credited on the order of the 
 lenders and at their option, then the latter have the right to say 
 when the conversion shall take place. 
 
 7. Will you please decide when an open account falling due on 
 Sunday, or on a legal holiday, becomes due ? One of your leading 
 sugar refiners writes that " all bills or debts of any kind (on open ac- 
 count) falling due on Sunday or legal holiday, are payable on the next 
 following secular day. " Another large refiner of your city writes, 
 
 ■ " bills falling due on Sunday are payable on Saturday. " We think 
 that you have heretofore decided that open accounts due on Sunday 
 are payable on Monday. 
 
 A. All drafts, ])romissory notes, and other negotiable securi- 
 
SHIPPING. 
 
 487 
 
 tips, maturing in this State (N.Y.) on Sunday or other holiday, are 
 payable the previous secular day. All interest coupons, rents, and 
 open accounts, falling due on a holiday, are payable the following 
 secular day. We presume that the person above referred to, who 
 wrote that " bills falling due on Sunday are payable on Satur- 
 day, " used the word bill " in its English sense, defined by 
 Webster to be " an obligation or security given for money, under 
 the hand, and sometimes the £eal, of the debtor, without a con- 
 dition or forfeiture of non-payment. " To " give a bill " in 
 England is equivalent to giving a promissory note or acceptance. 
 
 SHIPPING. 
 
 BILLS OF LADING. 
 
 1. Last July a ship was chartered for London under a charier con. 
 taining the following conditions : 
 
 It is further agreed between the parties to this instrument, that the said party 
 of tlie second part shall be allowed for the loading and discharging of the ves- 
 sel at the respective ports aforesaid, lay days as follows, that is lo say, 2.5 run- 
 ning days for loading at New York, to be discharged with customary dispatch 
 at port of discharge. And in case the vessel is longer detained, tlie said party 
 of the second part agress to pay to the said party of the first part demurrage at 
 the rate of 2!3 pounds British sterling per day, day by day, for every day so de- 
 tained, provided such detention shall happen by default of said party of the 
 second part or their agent. 
 
 Bills of lading to be signed as presented without prejudice to this charter. 
 Any difference to be settled before the vessel sails. If in favor of the vessel, 
 casii, at current rate of exchange, less insurance. If in favor of the party of 
 the second part, by draft of captain upon his consignees, payable ten days after 
 the arrival of vessel at port of discharge. 
 
 The vessel having laid out her lay days, presented by her agents a 
 bill for one day's demurrage to her charterers, and so continued to do 
 each day for 1 1 days, when she was loaded and cleared, and bills of 
 lading were presented to the master for his signature by the charterers, 
 they having neither paid any demurrage nor acknowledged in any 
 way the claim. Had the master a right to refuse to sign the bills of 
 lading till the demurrage was paid ? What position can the master 
 take in the event of the charterers declining to say anything about de- 
 murrage till their bills of lading are signed ? 
 
 A. The master was bound to sign the bills of lading as pre- 
 sented, but was entitled to his demurrage before sailing. 
 
 2. A vessel is chartered to load a cargo of deals for Belfast, Lon- 
 don, or Cardiff, as ordered on signing bill of lading. The cargo is 
 loaded and bill of lading signed for Belfast. Subsequently, and before 
 vessel had moved from her loading berth or in any way commenced 
 her voyage, the captain is requested by both shipper and consignee of 
 
488 
 
 SHIPPING. 
 
 cargo to cancel bill of lading for Belfast and sign no-^- ones for Lon- 
 don. The captain refuses and in spite of remonstrances sails for Bel- 
 fast. Now is the captain justified in this course ? Is not the shipper 
 of a cargo of this description entitled to name another port of dis- 
 charge at any time before the vessel has commenced her voyage ? It 
 is understood that such change of destination would in no way entail 
 any additional expense at port of loading. 
 
 A. It seems to us that the captain was obstinate and disoblip:- 
 ing, but he had the legal right to refuse, the contract Ijeing com- 
 plete on signing the bills. If the charter had simply stipulated 
 for either port at the election of the shipper, the destination 
 could be changed at any time before sailing ; but the captain was 
 only bound to go to the port named when he signed the bills of 
 lading. Belfast w^as then named, and no change could be made 
 afterward except by mutual agi'cement. 
 
 CHARTER PARTY— DEMURRAGE. 
 
 3. A charters a vessel to take a cargo of lumber, with ten lay-days 
 for loading. 
 
 The vessel is detained six days over her loading time, and the cap- 
 tain, when called upon to sign bills of lading, claims six days' demur- 
 rage. The shipper, without disputing the justice of the claim, or 
 alleging any fault upon the part of the vessel, replies, "I will pay you 
 two days' demurrage and no more ; if you do not accept that amount 
 and give me a clear bill of lading, I will not clear jomt vessel." 
 
 The captain endeavors to clear his own vessel, but is informed by 
 the Collector that he is not allowed to give him a clearance unless the 
 manifest is signed by the shipper. 
 
 What is the captain's remedy under these circumstances ? He is 
 anxious to collect the demurrage wdiich is fairly due him, but cannot 
 get his vessel cleared at the Custom House without sun-end ering the 
 greater part of it, and cannot afford to go to lav\^ to enforce his de- 
 mand on account of the loss of time involved. Several vessels under 
 such circumstances have submitted to the loss in order to get to sea. 
 but there must be some remedy for shipmasters against such injustice. 
 \V hat is it ? 
 
 A. The charterer who refuses to clear and thus detains the 
 vessel is lia])le for such detention, and by the terms of the cliar- 
 ter all the cargo he ships is held to meet this claim. The cap- 
 tain may, therefore, await the shipper's pleasure and pay himself 
 to the full value of all that is on board. 
 
 4. A charters a vessel to take a cargo of timber or lumber, the 
 charter party containing the customary clause, " Cash for ship's ordi- 
 
SHIPPING. 
 
 489 
 
 nary disbursements to be advanced at port of loading by charterers, 
 subject to 'Ih per cent, commission." 
 
 It sometimes happens that masters do not call upon the charterers 
 for any advances, being furnished with money by their owners, or hav- 
 ing outward freight money. It is contended by some shippers that 
 they are entitled to collect the 2^ per cent, commission upon the 
 amount of ship's disbursements, whether the money is advanced by 
 them or not. 
 
 They contend that the commission is one of the perquisites of the 
 charter, which w^as taken into account in making it ; that as they were 
 prepared to make the necessary advance, they arc entitled to the com- 
 mission whether they make it or the master obtains his money from 
 some other source. In deciding this question, please notice carefully 
 the wording of the clause where the words "as required by the mas- 
 ter " are added, as is sometimes the case no such claim is made, but it 
 is contended that when this proviso is not expressed the master is obliged 
 to draw his disbursements from charterers, or if he does not do so, 
 should pay them for the use of the money which they are ready and 
 willing to advance him. Is this position tenable in law ? 
 
 A. It frequently happens that the captain has money in his 
 pocket, and uses it expressly to save the commission to be al- 
 lowed on sucli advances as he may require. The consignee or 
 charterer, without some express stipulation to a contrary effect, 
 can only collect his commission on the actual cash furnished. 
 
 5. I am the cliarterer of a vessel loaded for a foreign port and 
 ready to sail. Tlie captain has not sufficient funds to pay for repairs, 
 supplies, etc., and the vessel owners are in the same plight. Conform- 
 ably to charter I liave already made 50 per cent, advance on freight, 
 which, however, only meets by half the charges due. The captain can- 
 not, or will not, raise the amount needed by bottomry bond. What 
 course must I pursue to force him to action of some kind ? Have I 
 any means of forcing the vessel to be sold subject to my charter ? 
 She is American. 
 
 A. The master cannot give a good bottomry bond in such a 
 case, this not being a foreign port. If the owners refuse to pro- 
 vide the funds the charterer has remedy against the ship. 
 
 6. A steamship's charter calls for delivery of cargo at rate of say 
 250 tons per day. Demurrage over and above the lay days to be paid 
 except in case of strikes, etc., or any other cause beyond control of tlie 
 charterers which may hinder the loading or discharging. The usual 
 general clause excepting acts of God, restraints of rulers, etc., is also 
 in charter. Can the captain or owners under these circumstances 
 rightfully claim demurrage from the charterers because .the United 
 States customs system of weighing cargo as dehvered outside prevents 
 
490 
 
 SHIPPING. 
 
 discharge at the rate stipulated, consignees being ready and willing to 
 receive cargo as fast as it could be delivered ? 
 
 Also, when charter stipulates that vessel shall load and discharge as 
 rapidly as possible by night as well as by day, whose duty is it to ar- 
 range for night permit and pay customer's charges for night work on 
 vessels ? 
 
 A. The custom house rule if imperative will come within the 
 exceptions which limit the demurrage. 
 
 If a vessel undertakes to discharge at night it cannot call on 
 the consignee of cargo for any extra compensation on that 
 account. All increased expenses of a kind properly belonging 
 to the ship must be paid as part of its own disbursements. 
 
 7. We charter a vessel, promising to give the captain an advance 
 on the freight to meet his disbursements here. On the amount of the 
 advance we are to receive 5 per cent, commission. As accommodation 
 to the captain he asks us to pay his bills, which we do, amounting to 
 $1,297 66. We now claim that this is only 95 percent, of the advance, 
 and that the other 5 per cent, is our commission. Are we not right 
 in so claiming ? The captain thinks we are entitled to only 5 per cent, 
 on the amount actually disbursed for him, although he agrees that if 
 he had asked for S 1,500 he would have had to pay $75. 
 
 A. We agree with the captain, and do not allow 5 per cent, 
 on the commission, that forming no part of the advance under 
 the contract. The advance is ^1,297.66, wiiich with 5 per cent, 
 makes the charge against the captain 11,362.54. 
 
 8. A charters a vessel from B and agrees to give the vessel at the 
 rate of 15,000 feet of lumber per day, but fails to do so, and according 
 to charter party has to pay B the sum of $35 day by day — so reads 
 the charter. The following clause is printed in the charter party : A 
 to give the vessel tlie amount of lumber per day, Sundays and legal 
 holidays excepted. Now after the vessel gets on demurrage can B col- 
 lect for Sundays, or does Sunday and legal holidays cover the grounds 
 while on demurrage as well as during lay days ? And should the 
 master of the vessel make demands for demurrage day by day, or at 
 the expiration of each day ? 
 
 A. Demurrage is for the extra time consumed in loading, and 
 if Sundays and holidays are expressly excepted in the lay days, 
 they will not count in reckoning demurrage. 
 
 9. A vessel comes from the other side with 600 tons of iron. 
 Charter party stipulates 16 days for loading and discharging. Of 
 these 12 have been consumed loading, thus leaving four days for dis- 
 
SHIPPING. 
 
 401 
 
 charging. Of course this is not sufficient to discharge the GOO tons, 
 hence the questions : Cannot the vessel claim demurrage, discharging 
 as fast as she can, for days consumed over and above the four days left 
 her ? Is the master obliged to put on extra force of hands ? 
 
 A. Where no provision for the payment of demurrage is in 
 the bill of lading, no such charge can be made against the con- 
 signee of the goods. Gage v. Morse, 12 Allen R., 410. If the 
 charterer has control of the loading and unloading the owner 
 may have a claim on him for detention beyond the stipulated 
 time ; but if the work is done under stipulation by the master, 
 and it was possible to discharge within the given time, we do not 
 believe the claim would be allowed. 
 
 10. Will you favor us with your opinion as to whether one firm 
 verbally authorizing another to sign a charter party, in which both 
 agree and are admittedly interested, can be held liable as a partner in 
 the transaction, in case of the failure of the party who executed the 
 contract to fulfill the conditions therefor ? 
 
 A. We do not think such an interest would render the other 
 firm liable. 
 
 11. In case a charter party calls for customary dispatch in dis- 
 charging, and bears no clause exempting either of the signers from 
 the contingencies of war, is any extraordinary delay consequent upon 
 war at the risk of vessel or charterer. 
 
 A. The answer depends somewhat upon the character of the 
 act of war by which the discharge is hindered. If by a blockade 
 of the port, the blockade, if effective, dissolves the charter party, 
 Avitliout reference to any exceptions it may contain, and tlms 
 frees both parties from its obligations. So, at least, it has been 
 held by the New York Supreme Court, and the same principle 
 has been assumed in the English courts. If the delay is caused 
 by a temporary embargo, the execution of the contract is sus- 
 pended by the force of that intrinsic circumstance. If war 
 breaks out, and the voyage becomes illegal, after the charter is 
 signed, that again dissolves the contract, and leaves both parties 
 free. 
 
 12. I charter my boat to a party for a specified time, he agreeing 
 to pay all bills of coal, labor, repairs, wharfage, grub, etc. Can 1 not 
 protect myself and my boat against the payment of such sales (fearing 
 he should default), by advertising that neither myself nor my boat are 
 
492 
 
 SHIPPING. 
 
 to be held liable or responsible for such claims during said period of 
 charter ? If so, how much publicity does tlie law require mc to give 
 in order to exempt myself and boat from the payment of such claims ? 
 
 A. The owner cannot protect himself against a lien in the 
 manner described, as the law expressly gives it, Avhether the 
 debt is contracted by the master or the owner, or the charterer, 
 builder, or consignee, or the agent of either of them. The 
 owner must protect himself, either by refusing to charter his 
 vessel to a doubtful customer or requiring security to indemnify 
 himself. 
 
 13. One of our vessels loaded a cargo of sugar in Cuba, and the 
 master on requiring an ordinary bill of lading therefor, was informed 
 by the shipper that certain sugar refiners would receive the cargo at 
 their sugar house in Brooklyn. Accordingly the master proceeded 
 from sea directly to the wharf indicated by the shipper in Cuba, and 
 placed his vessel in a discharging berth. On reporting to the consign- 
 ees of the cargo he was informed that he must make way for certain 
 cargoes of melado, which tlie sugar refinery required before it could 
 take the sugar, but they would pay the vessel full demurrage for every 
 day they detained her over and above the customary dispatch for dis- 
 charging a cargo of sugar. Had the master a legal right to refuse the 
 offer of demurrage (there being no charter party) ? And, having been 
 dispossessed of his discharging berth at the refinery, had he a right to 
 take the vessel elsewdiere and discharge her under general order, the 
 permit for his cargo not having been taken out by the consignees ? 
 
 A. The master is not required to wait and accept demurrage. 
 After the h^iial limit of time has been reached, he can give notice 
 to the consignees and discharge under general order. It is 
 always. better, however, to be accommodating, and give all rea- 
 sonable time for a reasonable compensation. 
 
 14. Our parent house in London, England, charters a vessel to 
 proceed to tliis port and there take in cargo of deals. The vessel 
 arrives here consigned to us, but the captain does not report himself. 
 Is there a law compelling him to do so, or is it our business to look 
 after him ? 
 
 A. AVe know of no special law compelling the master to re- 
 port his vessel to the charterer, but it is quite plain to us on 
 general principles that he is bound to do so. It is his duty to 
 give notice to the consignee of his arrival witli cargo, and the 
 analogy is too strong to leave it doubtful that he must also re- 
 port the arrival of his ship, where that alone is consigned. It 
 
SHIPPING. 
 
 493 
 
 was substantially so held in the case of Ledget y. Williams, 4 
 Hare, 45G. 
 
 15. A steamer collides with a fishing smack at sea, and the smack 
 sinks. Admitting the blame to be on the side of the steamer, which 
 raises and repairs the smack, state if the steamer is liable for cargo 
 under following circumstances : The smack was loaded with live fish 
 in a well ; the well was not touched or injured by the collision, but 
 their hatches were not secured, consequently they floated of! and the fish 
 escaped. Also, is the steamer liable for delay or demurrage to the 
 smack, which was bound into port ? Also, is the steamer liable for 
 sailors' personal effects ? 
 
 A. The contributory negligence which would relieve the 
 vessel at fault from her liability it is said must be connected 
 with the cause of the collision (Mills v. The National Homes, 1 
 Bond, 352 ; West. Ins. Co. v. The Goody Friends, ib. 459 ; 
 Kilby V. Thompson, 1 Low, 125 ; Chamberlain v. Ward, 21 
 How., 539). In this case the fact that the hatches were not 
 secured had nothing to do with the question of collision, and 
 cannot be called contributory negligence. Damages for delay 
 or demurrage are recoverable, except where full damages for 
 a total loss are awarded. The authorities on this point are too 
 numerous for citation, and they also generally declare that in 
 measuring the damages all the direct and immediate consequen- 
 ces are to be considered, that we have no doubt the loss of sailors' 
 personal effects would be included. 
 
 16. If a vessel has been chartered to arrive, say on the 20th of Octo- 
 ber, with the clause " Now lying in the harbor of Liverpool to pro- 
 ceed to Baltimore with dispatch," -and such vessel only left Liverpool 
 on the 19th of November, is the merchant bound to accept the vessel, 
 knowing from subsequent stitemonts that on the 20th of October the 
 vessel had not yet finished discharging, and that, as per Maritime Register 
 many other vessels sailed from Liverpool before the 19th of Novem.ber ? 
 The captain states that he took in a cargo of salt as ballast, which was 
 only completed on the 19th of November. Had the captain a right to 
 detain the vessel so long in Liverpool if the charter does not men- 
 tion anything in this regard, but only to proceed with dispatch ?" 
 Does not the clause as above imply that the captain had no other action 
 to take than to proceed with dispatch, and was he consequently at 
 liberty to load salt for about twenty days ? Furthermore, had he a 
 right to discharge yet on the 20th of October ? 
 
 A. There is nothing more vague in the announcement of a 
 vessel's movement than the phrase " with dispatch." Ships are 
 
494 
 
 SIIIPPIXG, 
 
 continually advertised to load and sail " with dispatch," even 
 before they have begun to discharge. In the case cited, if the 
 owner or his agent knew the facts, he can hardly be said to have 
 acted in good faith ; but the terms are so proverbially ambiguous 
 that we doubt if the merchant can throw up the charter on this 
 account. 
 
 1 7. Will you kindly inform us whether when option of canceling 
 charter party is given to charterers should vessel not be ready for cargo 
 at a stipulated date, charterers retain that option until vessel is ready 
 for cargo, or whether the charterer must declare his intention 24 hours 
 after notice of arrival of ship in port ? 
 
 X. There is unfortunately no well settled rule on this subject. 
 In our judgment the charterer can legally hold his option and 
 reserve his decision until he is informed that the vessel is ready 
 for cargo. 
 
 1 8. Who loses on account of rainy days, in a case where a vessel 
 is chartered with 25 running " days, to load cotton, and the captain 
 refuses to receive on account of wet weather ? The charter party 
 specifies demurrage to be paid if detention is caused by default of the 
 charterer. Is he, the charterer, responsible for rain, or is it the mis- 
 fortune of the vessel ? 
 
 A. The stipulation as to " running " days throws the risk 
 of the weather upon the charterer. The time runs through Sun- 
 days and holidays, storm and sunshine alike. The captain need 
 not receive the goods in stormy weather, and such are the mis- 
 fortune of the shipper. This is easily avoided, if the ship-owner 
 consents, by substituting " working days " for running days." 
 The charterer must then have his 25 days (or whatever the limit 
 is) of good weather in secular time. 
 
 1 9. A ship is chartered by A for a voyage from Liverpool to New 
 York for a lump sum. A afterward recharters a portion of the ton- 
 nage to B ; B loads the vessel in accordance with his contract with A. 
 The vessel after being loaded remains in Liverpool an unusual time, 
 and against the protest of B, being as alleged libelled ; the result being 
 that on account of delay in departure of the vessel B suffers heavy 
 loss. The question is, who is responsible to B, the vessel and owners, 
 or A , with whom B contracted ? 
 
 A. There have been too many nice distinctions drawn, de- 
 pendent upon the terms of charters purporting to let the entire 
 
SIIIPPIXG. 
 
 495 
 
 sliip^ to make it safe to define the liabilities of the parties in 
 such a case as tlie above, without details, including copies of all 
 documentary evidence. It may be said, however, that if the 
 terms of the charter i)arty constituted the charterer owner for 
 the voyage, and B's contract was with him alone, then A alone 
 can be held responsible to him. But if the entire control and 
 management of the ship remained with the owner, and the 
 master issued bills of lading to B for goods shipped, in the al> 
 sence of any other circumstances, not brought to our notice, to 
 rebut tlie conclusions authorized by these facts, the owner may 
 be held directly to B. 
 
 20. Will you kindly give us your opinion in an early impression on 
 the following point relating to charter parties. Assuming that A in 
 a British port concludes a charter to B in America with the following 
 clause : That B has the option of canceling or maintaining the 
 charter provided the vessel does not arrive by a given d^^^te. The 
 vessel does not arrive until after that date and B cancels the charter 
 and the vessel is chartered by other parties. Is A entitled to claim his 
 commission for chartering, seeing that the vessel has failed to carry the 
 cargo for which B required her ? 
 
 A. The contract is concluded and mutually accepted, and A 
 both in law and by custom is entitled to his commission, whether 
 or not the vessel arrives in time. 
 
 21. A vessel is chartered to be cleared on or before the 10th of 
 August. Charterers do not hand in papers until Saturday, just before 
 three o'clock, but in time to clear from the Custom House, but not in 
 time to clear from the consul ; so vessel docs not finish clearing till 
 ^londay. Does Sunday count as a demurrage day ? 
 
 A. Where the stipulation is to load and clear in a given time, 
 the claim for demurrage will hold not only until the date when 
 the vessel has finished loading, but also until she has had ample 
 time to clear. If there was not time to finish clearing on Satur- 
 day, the charterers must pay one more day. 
 
 22. The bark Adriatic, under charter, finished loading late on 
 Saturday, 4th inst. (the days for loading expiring on Friday." Sd inst.) 
 The cargo and vessel are cleared Monday. Is the vessel entitled to 
 demurrage for Saturday only, or for Saturday and Sunday ? 
 
 A. The demurrage ceases Avhen the vessel is loaded. As this 
 was on Saturday, she can claim but one day. It is her misfor- 
 tune that the next day was Sunday. 
 
496 
 
 SHIPPING, 
 
 23. In chartering vessels to freight lumber it is generally stipulated 
 by the charterer that he will deliver the lumber to the vessel at the rate 
 of 15,000 feet per running lay days (Sunday excepted). Suppose a 
 vessel should be given a proper berth at a dock where her cargo was 
 piled, and a stormy season was to set in, lasting more or less for two 
 weeks. As the lumber would injure if loaded in the rain, could the 
 charterer be held responsible for time lost on account of bad weather, 
 and would it make any difference if the vessel had been stopped by 
 the charterer from loading in the storm, fearing if she continued the 
 cargo would be damaged ? Is the vessel not bound to receive a cargo 
 in proper weather ? 
 
 A. If the lumber was on hand and ready for delivery, the 
 fact that the vessel could not properly receive it on account of 
 the storm would not involve the charterer in any claim for de- 
 mui-rage. If the charterer ordered the vessel to desist when she 
 might have been loading, he would be liable to that extent. 
 
 24. A charters a vessel to bring cedar wood, sugar, honey, etc., 
 from a port in Mexico to New York. The charter party reads as 
 usual : -'and for discharging in New York quick dispatch." The ves- 
 sel in question arrived June 30. Invoice and bill of lading were de- 
 livered to A in the afternoon of July 1. Entry was made July 2, and 
 permit was received on board on the 3d, in the morning. The 4th and 
 5th were holidays. Four vessels which had arrived a few days pre- 
 vious, were at the wharf awaiting their turn for discharging ; in con- 
 sequence thereof A's vessel did not get into a bertli until July 7 in the 
 mornin<jr, and began discharp:ing at noon of same day, and finished on 
 the 13th of July. The vessel is about 200 tons register, but loaded 
 395 tons cargo. It takes generally four or five days to discharge a 
 vessel of 200 tons. One afternoon the mate of the vessel stopped the 
 stevedore for about three to four hours. All the cedar arriving at this 
 port is discharged at the inspector's wharf, foot of Sev^•nth street, E. R., 
 the usual storage place for wood, as it is impossible to sell a log of 
 cedar stored at any other place. The captain now claims five days 
 demurrage, which A refused to pay. Is the vessel entitled to any de- 
 murrage, and if so, to how many days ? 
 
 A. In our opinion there has been no unnecessary delay, and 
 the vessel has had all reasonable dispatch in discharging the 
 cargo. We decide that no demurrage is due. 
 
 25. A shipper engages room on a vessel for goods to be delivered 
 by lighter. The goods are ordered to be delivered, and the shipper 
 loads a lighter with dispatch. 
 
 The stevedore who loads the vessel represents that he is waiting for 
 the goods, and, to insure prompt delivery, the lighter is towed to the 
 vessel, the delivery being accomphshed with unusual quickness. 
 
SHIPPING. 
 
 497 
 
 The lighter could have been discharged in one working day, but the 
 vessel delays receiving the goods for three days after that time, and 
 the lighter-man makes a claim on the shipper for demurrage. There 
 is no dispute as to the facts stated above. The question is, who is liable 
 for the demurrage ? 
 
 A. It seems to us that the demurrage would be a fair claim 
 against the ship under such conditions. 
 
 26. Will you kindly furnish your views on the following question, 
 caused by the new custom of masters of freight steamers chartered for 
 a direct voyage from American Atlantic ports to a port in Europe, of 
 stopping at Sydney, C. B., for coals without giving previous notice to 
 the shippers of the cargo of their intended deviation from the voyage 
 laid out ? 
 
 1. Is not the steamer obliged to have a full supply of coals and sup- 
 plies to meet the necessities of an average trip to the port of destina- 
 tion ? And is not this obligation caused by the clause, said steamer 
 being tight, staunch and strong, and in every way fitted for the voyage, 
 
 proceeded to , there to load a full cargo of grain, and being so 
 
 loaded, shall therewith proceed to discharge at a safe port in as 
 
 ordered." 
 
 2. Does the clause inserted in charter parties, Steamer to have 
 liberty also to call at any ports or port for coals and for other supplies," 
 refer to any other case than one of necessity occasioned by the dangers 
 of the sea, and does it give the master the right to deviate from his 
 route at his pleasure ? 
 
 A. As far as the vessel is concerned, the clause in the cliarter 
 party giving her permission " to call at any port or ports for coal 
 and other supplies," would free her from all liability if she stop- 
 ped at Sydney or any other convenient port for this purpose. 
 
 2. If there was no such clause in the contract, we do not 
 think the custom is so well established that the steamer would 
 have the right to call at an intervening port, as a matter of 
 course, for her supply of coal. But any unexpected delay, or sea 
 })eril, rendering the prosecuting of the foreign voyage perilous 
 without a further supply than the original outfit, would justify 
 the deviation and absolve the steamer from liability. 
 
 CONSIGNEE. 
 
 27. Given, a bill of lading from a foreign port for say, A B 100 
 cases of brandy, 12 bottles each," and stamped above the captain's 
 signature, " contents unknown." 
 
 1. Has consignee of goods the right to examine such cases that he 
 32 
 
498 
 
 SHIPPING. 
 
 may deem light, tliis examination of course on wliarf in presence of 
 master of vessel ? 
 
 2. Finding one case to contain but nine bottles, lias lie a just claim 
 upon the vessel for the three bottles short ? 
 
 A. 1. Tlio consignee has a right to examine the goods before 
 receiving tliem. 
 
 2. If our correspondent has an}- proof that the packages were 
 full and in good order when they were shipped, lie has a fair 
 claim on the vessel for the deficiency, which can only be met by 
 evidence that the goods were delivered precisely as received. In 
 the case cited there is reasonable ground for the belief that the 
 missing bottles were taken by some person connected with the 
 ship, or through their negligence, and in such case the ship is 
 responsible. 
 
 28. Suppose I ship merchandise to a foreign party, and while it is 
 on the wharf in transit from the vessel to the warehouse it is destroyed 
 by fire ; the consignees had not provided insurance covei'ing the risk 
 on the wharf, and now assert that insurance could not be procured. 
 Who should suffer the loss, the consignee or the shipper, who pays a 
 commission for the care of his interest ? 
 
 A. If the consignee was instructed to insure in transit, he 
 must show that he failed after using due diligence, or he is liable. 
 If he had no such instructions he is not responsible. 
 
 29. A vessel arrives in port laden with a general cargo. For the 
 convenience of the ship's owner or agent, her cargo is at once dis- 
 charged under general order, and allowed to remain on the dock for 
 the space of 48 hours before being sent to warehouse. Suppose 
 the dock takes fire and the goods are burned up, who is responsible for 
 the loss ? 
 
 A. If the discharge takes place before the consignees can be 
 legally compelled to receive their goods, or ])e held responsible 
 for their safety, the ship would be liable ; after that the con- 
 signee on due notice of discharge is responsible. 
 
 30. Please inform me whether the master of a ship discharging 
 goods from a foreign port has a legal right to send to public store after 
 6 o'clock p. M., cargo remaining on the wharf which has been dis- 
 charged all day. And having sent such goods to the store, is it his 
 duty to insure the same against loss by fire ? And is he in a position 
 to compel consignees of cargo to pay all expenses incurred thereby ? 
 Or, what is the proper and most effective method of compelling con- 
 
sinppiXG. 
 
 490 
 
 signees of cargo to receive tlieir goods when landed ? And tliey fail- 
 ing to remove their merchandise, how then can a shipmaster keep the 
 wharf clear ? 
 
 A. The master would have the legal right to send to the 
 public store goods legally discharged and remaining on the wharf 
 all day, the consignees having had due notice ; and he is not 
 obliged to insure them ; but it is wiser to be a little patient, keep 
 the goods protected, and save the consignees the extra expense. 
 
 31. A sells B a quantity of iron to arrive to be delivered at a 
 desiixnated wharf. The vessel with the iron arrives, but there is no 
 berth at the wharf named. Whose place is it to furnish a berth, the 
 buyer or seller ? 
 
 A. If the receiver cannot wait until there is a berth disen- 
 gaged, he has the right to designate another wharf to which the 
 vessel must proceed. It is the part of the harbor masters to 
 provide the vessel with a berth. 
 
 32. A charter was made with the owner of the brig Lord Duf- 
 ferin, then at Belfast, Ireland, to load, etc., and being so loaded shall 
 proceed to within the harbor of New York or Baltimore, and deliver 
 the same (cargo) in regular turn as directed by the consignee or his as- 
 signs. " Penalty for non -performance is named at £50. The ship 
 arrived at New York on or about the 1st day of November. The 2d 
 day of November being a closed day, on the morning of the 3d of 
 November the consignee sent orders to the ship's agent for her dis- 
 charge, stating that the permit would be found at the place designated 
 by the consignee for discharge, to which answer was returned to the 
 consignee all right. " The consignee entered the cargo at Custom 
 House, paid duty and sent permit to the place of discharge as stat^ed to 
 do. On or about the 6th of November the consignee found the ship 
 had not reported to discharge, and applied to the ship's agent to know 
 why ? Answer was returned to the consignee that the ship had gone 
 to Baltimore. Upon arrival of the ship at Baltimore the consignee 
 offered to receive the cargo there upon the ship's paying the extra ex- 
 pense which was 60 cents per ton. The captain refused to allow any 
 expense, and demanded a place to discharge. Whereupon the con- 
 signee received the cargo under a protest served upon captain and 
 agents of the said ship, claiming the damage sustained. Meantime the 
 Government made seizure of the said ship for evasion of the laws in 
 not entering at the port of New York, and assessed a fine upon the 
 said ship. 
 
 The questions are : W^as not the ship by her charter bound to de- 
 liver at New York upon her arrival and receiving orders? And is she 
 not liable to the consignee for damages incurred ? Is not the fact pre- 
 cedent that the Government held the ship by law bound to enter at 
 
500 
 
 SHIPPING. 
 
 New York, and fined her for evasion of the law, conckisive as to the 
 rights of the consignee to recover ? The cost of delivery of the cargo 
 from Baltimore was 60 cents per ton more than from New York, 
 where the consignee engaged to deliver the cargo upon the arrival of 
 the ship at New York. 
 
 A. If the facts affecting the case are all stated, we think the 
 ship is liable to the consignee for the damages thus sustained. 
 
 33. A vessel is chartered in New York for an unfrequented port 
 in Cuba. The bills of lading call for the freight to be prepaid in New 
 York, ten days allowed for discharging cargo, and demurrage $50 a 
 day. 
 
 Five days are consumed. Is the shipper at this port liable for that 
 demurrage ? 
 
 A. It has been settled (Abbott on Shipping, 8th edit., 303 ; 
 Dixon's Law of Shipping, 217) that where a special provision is 
 made in the bill of lading for demurrage at tlie port of delivery 
 *' the person claiming and receiving the goods under the bill of 
 lading is answerable for the paying, " and not the person who 
 shipped the goods. 
 
 CONSIGNOR. 
 
 34. A merchant agrees with the agent of a New York steamship 
 line upon a through rate on timber, to be shipped by river steamer to 
 Jacksonville, thence on by ocean steamship. The transfer at Jackson, 
 ville involved a delay of several days, during which the timber re- 
 mained on the wharf of the New York steamship. To make up a last 
 shipment, a lot is shipped from the way station, with orders to delay 
 its shipment until followed by a further parcel. Accordingly, the tim- 
 ber is stacked on the wharf as usual, when a fire breaks out in broad 
 daylight and the timber is, together with other goods, either consumed 
 or thrown into the river. This happened close to the New York steam- 
 ship, which also sustained damage. No insurance is effected on the 
 timber. Who has to bear the loss ? 
 
 A. If the orders to delay the shipment were given by the 
 sliipper, as would appear to be the case, the storage of the tim- 
 ber upon the wharf was in the nature of a gratuitous bailment, 
 in which the bailee is held only to ordinary care. If the fire oc- 
 curred, therefore, while the steamship company was exercising 
 such care over the property, and not through negligence on their 
 part, they are not responsible for the loss. 
 
 MISCELLANEOUS. 
 
 35. A vessel lies at a dock and pays wharfage, but to insure 
 greater safety in moving, fastens a line to another dock adjoining. 
 
SHIPPING. 
 
 501 
 
 "What may the wharfinger of the second clock rightfully collect of ves- 
 sel for this line tied to his wharf per day ? — half, quarter, or less wharf- 
 age, or nothing ? 
 
 A. Only a personal inspection of the dock and the situation of 
 the vessel would allow a positive answer to this question. If the 
 line fastened to an adjoining dock prevented the occupancy of it 
 by another vessel, then full wharfage ought to be })aid for the 
 priviiege. If it did not interfere at all with tlie use of the dock, 
 then a merely nominal sum would be a fair compensation for the 
 privilege. And between tliese two extremes, the proportion of 
 the dock which was occupied would regulate the charge. 
 
 36. Can an American buy and give an American hailing and new 
 name to a foreign built vessel wrecked in American waters, sold by 
 order of American or foreign underwriters ? 
 
 A. An American citizen may buy the wrecked vessel, but he 
 cannot secure an American register for her until she is repaired 
 by a citizen of the United States, nor unless the repairs are equal 
 to three-fourths of her cost when so repaired. 
 
 37. Please give international law as to shipment from this country 
 or England, under the flag of either, of articles contraband of war, for 
 a belligerent whose enemy overhauls them on the high sea. Can the 
 " contraband " be seized ? and how about the balance of cargo and 
 vessel ? An English steamer puts into blank port with contraband 
 bound to an enemy's port. Can blank port seize them ? or in either 
 case can they only be seized in attempting to run a blockade ? and if 
 so, how about balance of cargo and vessel ? 
 
 A. Contraband of war expressly designed for a belligerent, 
 may be seized on the high seas, or in the ports of the other bel- 
 ligerent, but the remaining cargo, the property of an innocent 
 party, is not liable if bound to an open port. All property, ves- 
 sel and cargo, seeking to evade an actual blockade, is liable to 
 be confiscated if caught in the act. 
 
 38. A steamship discharges her cargo upon the regular wharf of 
 the company ; no part of tlie goods is removed on account of de- 
 lay caused by the Government weighers. Supposing the w^harf gives 
 way under the pressure of the load, who is responsible for the dam- 
 age ? Has the marine insurance anything to do with it ? 
 
 A. By the i)hrase usually contained both in the English poli- 
 cies and our own, marine insurance continues on cargo only 
 
502 
 
 SHIPPING. 
 
 " until landed, " or "safely landed. " If the policy in (he present 
 case, therefore, is in the usual form, tlie insurers will not be 
 liable for the loss. Neither does the ship continue responsible 
 for damage to cargo after its delivery on the wharf, the consignee 
 having been duly notified, unless it should appear that the wharf 
 was not a safe place for such delivery. But as the consignee is 
 bound, as between himself and the ship, to remove his goods as 
 fast as they are delivered from the vessel's side, it is doubtful 
 whether a delay in their removal, for wliich the ship was not re- 
 sponsible, would extend the owners liability. Recourse can only 
 therefore be had, it would seem, against the owner or lessee of 
 the wharf. 
 
 39. A customer in this city buys from me 100 barrels of Virginia 
 flour, and requests me to mark them and ship per brig Blank to Cuba. 
 He is to pay cartage in New York city, but 1 am to pay the freight 
 from Richmond. On arrival I ship as directed, but before I can hand 
 him the invoice and shipping receipt the brig Blank is destroyed by 
 fire. On whoni does the loss fall ? AVill it make any diiference if the 
 shipping receipt is in my name instead of his ? 
 
 A. Delivery of goods by the seller to a carrier, in accordance 
 with the specific request of the purchaser, is a delivery to the 
 purcliaser. Glen v. Wliitaker, 51 Barb., 451 ; Bradley v. Wheeler, 
 4 Rob., 13 : Hills v. Lyncli, 3 Rob., 52. The goods are, there- 
 fore, at the risk of the buyer, and if he lias made no provision 
 for their safe delivery, and the brig cannot pay for them, the loss 
 falls on him. It will make no difference in whose name the 
 shipping receipts Averc taken, if the delivery Avas for the buyer. 
 
 40. Vessels loading at this port are not unfrequently obliged, ow- 
 ing to their draft of water, to drop down from the city loading berths 
 to positions in the river or harbor where there is more water, in order 
 to complete cargo ; lighterage in such cases has always been paid by the 
 vessel, the matter only now having been called in question. Will you 
 please give your opinion on this point, and also any law applicable to 
 such cases, should you know of any ? 
 
 A. A letter from the same correspondent, subsequent to the 
 above, adds that " there is plenty of Avatcr at our wharves, the 
 shoals beino: some miles lower. " If we had not been asked for 
 a law applicable to the case, thus calling for a search, which we 
 have made without finding any, we should have answered at once, 
 
SlIIPPIXG. 
 
 603 
 
 as wc do now, tliat wc consider the qnestion to depend wholly 
 on the contract of affrciglitment, or charter party. If the agree- 
 ment is to load so many tons of cargo, without reservation, we 
 think it must be interpreted to mean that the vessel shall take it 
 from the wharf, or if she cannot do so and get to sea with it, on 
 account of shoals, her master or owner must be at whatever ex- 
 pense may be necessary. Some shipmasters, wlio liave their 
 eyes opened to their liabilities in this respect, make a reserva- 
 tion in their contract to relieve them in case the depth of the 
 water shall be insufficient. 
 
 41. The owners of a foreign vessel under libel for salvage in an 
 American port desire to give security for her release, but as the case 
 may not be decided finally for several years, are reluctant to place the 
 funds either in the hands of a merchant (to guarantee him in giving 
 personal stipulation) or in the hands of the clerk of the court, who is 
 liable to removal. Now, have not cases occurred where the district 
 judge will receipt for amount in the name of the United States, 
 depositing it in his turn with the United States Treasurer, to be held 
 subject to the judgment finally rendered in the case ? 
 
 A The owners might pay the amount into court, and the 
 judge will order it invested or deposited where it Avill be secure. 
 
 42. Be kind enough to inform me whether a pilot's responsibility 
 over a trans-atlantic steamship, destined to New York Harbor, com- 
 mences at the moment he is taken on board, or after such steamship 
 has passed the first light ship ? 
 
 A. Where no offshore or outside pilotage is paid, the pilot 
 only has charge from the inshore line, and is only responsible 
 for that. 
 
 43. Are small steam yachts on tlie small lakes in this State, sub- 
 ject to the navigation laws of the United States, or of this State, (N. 
 Y.) — yachts which are used for pleasure purposes only ? 
 
 A. Vessels or yachts wholly on inland lakes not open to com- 
 merce, are not subject to the United States revenue laws. They 
 are subject to certain of the State regulations, wliich apply to all 
 tlie lakes and rivers in the State. 
 
 44. A schooner loaded at New York for Richmond with salt, and 
 on arrival here some of the salt was found damaged by sea- water, and 
 the captain consulted a ship-broker as to what was best to be done in 
 regard to the matter. As a settlement of the damage by sea- water it 
 
504 
 
 SHIPPING. 
 
 was agreed by ship-broker and owner of the salt that the vessel pay a 
 certain sum, and that all salt damaged by dirt or from neglect on. part 
 of the vessel the vessel would pay for. The captain of the vessel was 
 aware of this agreement, and after discharging nearly all the salt, some 
 300 sacks were found damaged by dirt and neglect, and the owners of 
 salt made an olior to the captain to settle the damage by dirt and 
 all other causes at a certain sum, which the captain agreed to. After 
 making this settlement the captain told the ship-broker, but he took no 
 steps to stop it, and the damaged salt was taken out of the vessel and 
 part sold and delivered. After the vessel had been discharged three 
 or four days, the ship-broker called on the owners for a settlement and 
 said captain had no right to make any settlement with them as he 
 (broker) was the agent for the owner of the vessel. The ship-broker 
 never informed the owners of the salt that he was agent for owners of 
 vessel and that all settlement must be made with him until after all 
 the salt was out the vessel, and the owners of salt claimed that as they 
 had always settled matters of this kind with captains where terms 
 could be agreed upon, they considered the contract binding, and as 
 they had not been informed as to who was the agent or owner of ves- 
 sel, the salt owner refused to make any other settlement. The salt 
 owner can prove that the settlement they made with captain was less 
 than the damage amounted to, and never regarded the ship-broker as 
 the owners' agent or captain's agent, but simply regarded him as as- 
 sisting the captain to get his business straight, and to prevent the owner 
 of salt from taking undue advantage of the master of the vessel. 
 Please let us know if the captain's contract will stand in law, or can it 
 be upset ? 
 
 A. The captain has authority in behalf of the owners to set- 
 tle all claims against them on the vessel, growing out of its usual 
 employment, while he is in command, at all places where the 
 owners have no general agent. The solution of the above de- 
 pends upon two questions of fact. Had the shi})-broker authority 
 to act as general agent of the vessel ? and were the consignees 
 who made the bargain with tlie captain aware that the broker 
 held such an appointment ? If these questions are answered in 
 the affirmative, the ship cannot be held to the bargain. But if 
 not, and tlie consignees make the bargain with the master in good 
 faith, and the agreement itself was an equitable one, we see no 
 reason why it should not stand. 
 
 45. A buys a vessel of B, and receives a clean bill of sale, after 
 search at Custom-house for any claims against vessel without finding 
 any. Fifteen months after, C presents bill against vessel to A for pay- 
 ment. Is A or vessel bound to pay the bill ? Does search of title of 
 vessel protect a buyer as search of title of real estate ? 
 
SHIPPING. 
 
 505 
 
 A. The custom-house is not as good a place as the County 
 Clerk's office to search for the record of a claim against a vessel. 
 Even if none was filed there, the purchaser might still be held 
 for a lien on the ship, and especially in other ports where the 
 vessel may have left a record against her. A bill against a ves- 
 sel may not be a good claim, but if it is, a mere change of own- 
 ership will not extinguish it. 
 
 46. If a contract is made for goods, say April shipment, the goods 
 being put on the lighter 28th April, and through some obstacle do 
 not reach the ship till after May 1, is the buyer bound to accept the 
 cargo, or has he a right to cancel the contract ? Does the word ship 
 ment mean the moment the goods leave shore in a lighter, or the mo- 
 ment the goods are on board the ship ? 
 
 A. To constitute an April shipment, the goods must be placed 
 in possession of the ship, i. e., subject to its control or within 
 reach of its tackles, during that month. If the master of the 
 ship will acknowledge delivery on the lighter as delivery to him, 
 and sign a receipt as of that date, it would technically be within 
 the contract, but otherwise it would not. 
 
 47. We have a schooner discharging lumber at a bulkhead. It 
 being necessary to lay head on, and to secure her we had to run lines 
 from each quarter to the docks on both sides. Now the bulkhead and 
 two piers are leased by three separate parties, and each one claims full 
 wharfage. Are we bound to pay more than a full day's wharfage for 
 every day that we lay there ? 
 
 A. Wharfage is collectible (we quote the statute of 1860) 
 " from every vessel that uses or makes fast to any pier, wharf, or 
 bulkhead, within the cities of New York or Brooklyn, for every day 
 or part of a day's use of the same. " By a strict construction 
 of this statute, our correspondents seem liable to pay a day's full 
 wharfage to each pier or bulkhead owner or lessee. 
 
 48. If I deliver measurement goods (cases weighing about 7,900 
 pounds each), for which I have engaged room on a steamship, on the 
 deck of a canal boat alongside the steamship, or the steamship's dock, 
 in readiness to go alongside the vessel and bring my goods within easy 
 reach of the ship's tackle, must the steamship company accept this de- 
 livery, or can they demand delivery upon their dock ? Are there any 
 legal or customary limits to the charges of stevedores for taking goods 
 from canal boats on the docks ? If a canal boat is chartered for a cer- 
 tain trip and no special agreement made, is its delivery complete by 
 
500 
 
 SHIPPING. 
 
 merely stopping alongside the appointed dock and getting its freight 
 ready for discharge, or must it place the goods vpon the appointed 
 dock ? 
 
 A. Questions relating to delivery to the carrier have generally 
 been decided with reference to the responsibility of the carrier 
 for the safe carriage and delivery of the merchandise. So far 
 as we know, text books and decided cases are silent as to what 
 •constitutes sufficient delivery to bind the carrier to accept the 
 goods. Equity seems to require that placing them within reach 
 of the ship's tackle, whether on the wharf, or on a barge alongside, 
 should be enough. But usage is an important element in deter- 
 mining the question, and if it is the established usage that all 
 merchandise shall be delivered on the wharf, we suppose that 
 would make such delivery obligatory. It would also be necessary 
 to prove a usage to make delivery to the consignee complete by 
 mooring the boat to the wharf and giving him notice, for without 
 such a custom, clearly established, the cargo must be discharged 
 upon the wharf, but there are customary charges, dependent upon 
 the class of goods. 
 
 The wages of stevedores are not regulated by law. 
 
 49. Charlestox, S. C. — Has any legal decision been given de- 
 fining the responsibility of a tow boat ahead of a vessel for damages ? 
 If so where to find it, and if not what is such responsibility, especially 
 as it relates to towing up rivers and through bridges ? 
 
 A. The principal decisions say that the tug is responsible for 
 the navigation of both vessels. (The Merrimac, 2 Survy., 587 ; 
 the W. H. Clark, 5 Biss., 307 ; The Mabey v. Cooper, 14 Wall, 
 212.; Sturgis vs. Bowyer, 24 How., 110, etc.) Another decision, 
 however, is that a tug will not be responsible for damages done 
 by her tow except it can be proved that the injury was owing 
 to want of care or skill on the part of the tug. (The Express, 
 1 Low, 258.) Where the tow is lashed to the side of the tug 
 and depends upon it entirely for motion, the responsibility is 
 wholly with the tug. (The Olive Baker, 4 Ben., 173 ; Phila- 
 delphia, etc.', R. R. Co. vs. The J. II. Gautier, 5 Ben., 469, etc.) 
 The tug is liable for damages occasioned by taking a tow round 
 a dangerous point with a long hawser. (The Cayuga, 16 Wall., 
 177). But where the accident to the tow was occasioned bj a 
 
SHIPPING. 
 
 507 
 
 sudden gust of wind the tug was held not liable. (The Lady 
 Pike, 3 Biss., 113,) or where the damage was caused by a sudden 
 and unexpected sheering of the tow. (The Stranger, 1 Brown 
 Adm., 285; the Angelina Coming, 1 Ben., 109.) Where a 
 steamer undertook to tow a barge, and ran the barge on a sunken 
 pier, the master of the tug being aware of its existence, the tug- 
 was held liable for the loss. (Cunnie v. The Deer, 4 Ben., 352 ; 
 Home Ins. Co. v. The Mollie Hopler, 4 Am. L. T., 145.) So 
 where the tow struck against a wharf (The Workmen, 1 Low, 
 504). These and other similar decisions are scattered through 
 the various United States and States Court Reports. 
 
 OWNER. 
 
 50. We are the owners of a small interest in a steamer worth 
 $5,000. She, through the carelessness of her officers, sinks a vessel 
 worth $100,000. Can we be held for damages beyond the value of 
 our steamer ? 
 
 A. The act of Congress of 1851 limits the liability of ship- 
 owners for any loss, damage, or injury by collision occasioned or 
 incurred without the privity or knowledge of the owner to their 
 interest in the ship and her freight then pending. 
 
 61. If a foreign ship contracts bills for stores and outfits, and seller 
 takes agents' notes and receipts bills, and the agents subsequently fail, 
 can the vessel be held liable ? 
 
 A. In transactions of this kind there is usually some evidence 
 that the intention of the parties was to furnish the supplies on 
 the personal credit of the agent, or at the time of settlement to 
 discharge the vessel from all obligation, and to accept instead the 
 personal liability of the agent. But if there is no evidence 
 whatever of such intention beyond the mere signing of the note, 
 and the supplies were obtained in such a way as to create a lien 
 on the ship in the first place, the taking of the agent's note in 
 settlement will not discharge it, and the vessel can be held if the 
 note is not paid. The brig Xestor, 1 Summer's Rep., 72 ; the 
 bark Chusan, 2 Story's Rep., 155. 
 
 62. In July, 187G. the captain and owner of a British schooner, 
 then in this port, bought a lot of provisions in the vessel's name, giving 
 in payment an ordei* on his consignee, which was dishonored. In the 
 
508 
 
 SHIPPING. 
 
 summer of 1877 the vessel having changed owners in the meantime, 
 returned to this port and was not molested, though the seller of the 
 stores knew of her arrival. She again returned and was libelled for 
 the debt. 
 
 If tlie vessel is clearly liable for the debt contracted by her former 
 o-^mer and was not released by the failure to libel in 1877 we will 
 advise her owner to pay without contest. 
 
 A. The accei)taiicc of the order on the consignee did not ex- 
 tinguish the lien, unless such was the manifest intention of the 
 material man. (The CImsan, 2 Story C. Ct., 455 ; Harris v. the 
 Kensington, 8 Am. Law. Reg., 144 ; the Gate City, 5 Biss., 200.) 
 The lien given by the State law is lost by the departure of the 
 vessel from the State, but here the vessel being foreign the gen- 
 eral maritime law, and not that of the State, governs the case. 
 (The Chusan, supra.') Nevertheless the line of a material man 
 must be taken advantage of within a reasonable time after the 
 debt was due or it will not be enforced against a hoy)a fide pur- 
 chaser without due notice. ''Generally a lien of this character 
 should be enforced soon after the expiration of the first voyage, 
 after supplies or materials furnished, and it is only under peculiar 
 circumstances that it will be extended beyond such time." (The 
 General Jackson, 1 Sprague, 554.) In the case just cited, there 
 was a delay of two years, and there was opportunity, monthly, to 
 enforce the lien. We think there can be no doubt that if the 
 change of ownership had not occurred until after the first return 
 of the ship in 1877, the lien would have been discharged as to 
 the present owner. In Leland v. the shipMedora, 2 Woodb. and 
 Minot, 104, it was held that liens for wages should in no case ex- 
 tend beyond the next voyage, if they are unknown to the public, 
 and new interests of third persons as to the vessel intervene 
 without notice. But if there was no opportunity to enforce the 
 lien, after the dishonor of the order, before the sale of the vessel, 
 an equity exists in favor of the material man which may perhaps 
 overcome the effect of his neglect to pursue his remedy in the 
 summer of 1877. We very much doubt it, however, and we in- 
 cline to the belief that the lien on the vessel no longer exists. 
 
 53. Do the receipted bills of a vessel known as vouchers belong to 
 the master or owner ? Also, can an owner compel a master to de- 
 liver the receipted vouchers to him in case of a settlement ? Again, 
 
SIIIPPTNG. 
 
 609 
 
 if a master leaves a ship, and is in possession of the receipted vouchers, 
 how is an owner to prove payment of the various bills, or any bill, 
 should it be presented for payment a second time ? 
 
 A. The master not being tlic charterer of the ship, and the 
 owner being responsible for the payment of its bills, the vouch- 
 ers are the property of the latter upon settlement of the master's 
 accounts, and their surrender can be compelled by legal process. 
 It might be less expensive, however, in case of a suit to collect 
 claims already paid, to call the master as a witness, on a snl> 
 poena requiring him to bring with him the receipted bills. 
 
 54. We have been for the past year recei\"ing from Hamburg, 
 through a certain steamship company, a large quantity of glass-ware, 
 packed in cases or crates, and we always found that for causes unknown 
 to us, the breakage of goods received by said line was excessive, and 
 above any proportion to similar goods brought over by other steamship 
 companies or sailing vessels, and yet we had no redress against said 
 company, as their bill of lading contains the clause "not accountable 
 for breakage." Two weeks ago, a lot of 49 cases came in, and 11 
 cases of the number were taken out of the steamer, the boards of the 
 cases smashed in and the cases falling almost to pic<;es, and showing ap- 
 parently that some extra heavy packages had been piled on top of 
 them, and leaving no doubt that the breakage of the packages must 
 be very exorbitant. Our cartman declined to receive the said 1 1 broken 
 cases without specifying on the receipt required from the company, 
 " received in bad condition, " a remark which the delivery clerk of the 
 company refused to have on the receipt, and our cartman had conse- 
 quently to leave the goods in the hands of the ster.mship company. 
 We have offered to the company to receive the goods in their present 
 condition, to take them to our place of business, have them unpacked, 
 the cases put in good condition, and the service glass-ware repacked 
 again, and all these operations to be done under the supervision of one 
 of their operatives, and that they should reimburse us for the value of 
 the breakage resulting from utter carelessness on their part ; but all 
 our endeavors have been in vain, as the agent here pretends that he 
 has no authority in the matter ; that he has to refer it to his company 
 in England, and here the matter stands. We need the goods, but we 
 do not want to take them unconditionally, as we believe that the com- 
 pany is responsible in such a case. Inform us whether we have any 
 rights in the matter, and what course we have to pursue. 
 
 A. The facts stated beipg duly established, the company is 
 responsible for the damage. You can sue for the detention of 
 the goods, or receive them and prosecute for the damage. 
 
 55. The schooner French was lost off Green Run, Virginia. The 
 captain was sailing her on a share, he receiving 60 per cent, of the 
 
510 
 
 .SIIIPPIXG. 
 
 earnings and agreeing to furnisli men and provisions, or in other words 
 to victual and man the vessel. There was saved from the wreck about 
 $100 worth of material, which was sold on the shore, the wreckers claim- 
 ing and receiving one-half for salvage, the owners giving the balance 
 to the captain. The mate and cook have since claimed that there was 
 due them for services rendered prior to the loss of vessel some $75 each. 
 Please inform us where the liabilities cease so far as the owners indi- 
 vidually are concerned. And is there any statute law holding the own- 
 ers responsible for said wages ? Or is their claim good only as against 
 the vessel ? Xeither of them made any claim on the material or pro- 
 ceeds. 
 
 A. The owners are liable for seamen's wages not by virtue of 
 statute, but by general maritime law. Tlieir remedy is threefold, 
 viz. : against the master, the owner, and the ship. (Dixon on 
 Shipping, etc., 327.) The mate and cook might have laid claim 
 to the proceeds of the wreck material, but their neglect to do so, 
 whatever effect it might have had if there could have been sub- 
 sequent purchasers or incumbrancers without notice, we think 
 could not in any w^ay affect the liability of the ownefs. 
 
 5G. An invoice of merchandise wai shipped via Stonington line to 
 Boston. . Part was delivered to the consignee in Boston, the balance 
 was never accounted for. The presumption is that it was on the 
 steamer which was sunk. The steamship company claim that in ac- 
 cordance with an old United States statute they are liable only for the 
 amount the vessel sold for. What are the shippers' rights in this 
 matter ? 
 
 A. Section 4283 of the United States Revised Statutes reads 
 as follows : 
 
 " The liability of 'the owner of any vessel for any embezzle- 
 ment, loss, or destruction, by any person, of any property, goods 
 or merchandise, shipped or put on board of such vessel, or for 
 any loss, damage, or injury by collision, or for any act, matter 
 or thing lost, damage or forfeiture done or occasioned or incur- 
 red, without the privity or knowledge of such owner or owners, 
 shall in no case exceed the amount or value of the interest of 
 such ovv^ier in such vessel, and her freight then pending. " 
 
 Section 4235 provides that the slT»ip owner may free himself 
 from all further liability by transferring his interest in vessel 
 and freight to a trustee for the benefit of claimants. 
 
 57. I was agent of sever.il vessels, ono of them the captain run 
 on five-eighths lay, he paying all port charges. Last December he left 
 
SHIPPING. 
 
 oil 
 
 ttie schooner, informing me that all the bills were paid. I have re- 
 ceived a bill for towi-ng while he was in her (on lay), the parties claim- 
 ing it was never paid. It was certified by the mate (who was lust in 
 the schooner Alex. Young). The bill was sent me in September, 1876, 
 and I gave it to the captain, w4io said he would see it paid. The ves- 
 sel we sold January 5, 1878, and every bill w^e knew of paid, and the 
 money divided. If the bill had been returned last year I should have 
 made the captain pay it. Can they collect, and from what parties, the 
 late owners or the late captain ? Can the late owners have any redress 
 of the captain for the bills he left unpaid ; if so, how ? 
 
 A. " Owners of a vessel are not liable for supplies for navi- 
 gating and victualing the vessel furnished the master, who is 
 sailing her on shares, for he is owner pro liac vice. " (Tucker v. 
 Stimson, 12 Gray, 487 ; 5 Gray, 596.) Abbott on Shipping, 
 11th ed., p. 27, also takes the position that " the question in such 
 cases is one of principal and agent, and he only, whether owner 
 or charterer, or intended purchaser, by the authority of whom, 
 as his agent, the master gave the orders, is liable upon them." 
 These conclusions may perhaps be defeated by positive evidence 
 that the bills were contracted on the credit of the owners and 
 the vessel ; on this point, of course, 'we cannot speak. But even 
 in that event, tlie master is liable, and can be made to pay the 
 bill at last, even though it should be first collected l)y following 
 up the lien on the ship itself. 
 
 58. Can parties collect from owners after the loss of the vessel, 
 such bills as come under the head of port charges, viz. : Towage, pilot- 
 age, commissions on freights, etc., or insurance on advances to captain 
 to pay port charges, w^hen the vessel is sailed by the captain on half 
 shares ? 
 
 A. If the ship was formerly chartered by the master, render- 
 ing to the owners a lialf share of her earnings as the liire, it 
 appears that they might not be liable personally, but if, as more 
 likely was the case, the master's relation to the shij) and owners 
 was the usual one, except that he \vas paid by receiving a share, 
 the owners as w^ell as the master remain personally liable after 
 the loss of the ship for the obligations incurred in tlie usual 
 course of her employment. 
 
 59. A steamer which su^Tered general avcracre on her trip to this 
 port, landed a shipment of ours in damaged condition. 
 
 1. Are we obliged to look over every piece of goods to separate 
 
512 
 
 SHIPPING. 
 
 the sound from the damaged, and must we keep broken packages of 
 sound goods at invoice prices, even though they do not command same 
 price as original packages ? 
 
 2. Have we to contribute the great amount of labor it involves to 
 overhaul a shipment of ours, without remuneration ? 
 
 3. Could we be obliged to keep all damaged goods at an apraise- 
 ment, although a market for such goods could be found by auction 
 only ? 
 
 4. If a shipment is damaged to a certain percentage, have we a 
 right to abandon it, and would the market price of the goods here or 
 the amount insured with addition of duty and freight bo the sum we 
 are entitled to ? 
 
 A. 1. It is the duty of the assured to separate the damaged 
 goods from the sound, as they can claim loss under a policy of 
 insurance only for the damaged portion ; and their claim will be 
 upon the insured value as fixed by the policy for that portion. 
 
 2. The assured must perform the necessary labor to prove 
 their claim. 
 
 3. If the appraisement is not satisfactory to the assured, 
 they have the right to sell the goods- at public auction to prove 
 their claim, unless otherwise provided for by the policy. 
 
 4. There can be no abandonment of the goods to the under- 
 writer after arrival at destination, or for simple damage. An 
 abandonment must be made while the goods are in peril of a 
 total loss, and it must ])e then sustained by a loss of 50 per cent. 
 If the underwriter is willing to accept an abandonment of the 
 goods by mutual arrangement with the assured, the assured will 
 be entitled to claim as for a total loss of the damaged portion, at 
 the valuation fixed by the policy, and the underwriter will be en- 
 titled to the goods or the proceeds thereof, with all the benefits 
 of the return duty. 
 
 If the claim is against the vessel in the nature of " general 
 average," the consignors are entitled to claim the sound market 
 value of their goods at the port of destination. 
 
 60. In the absence of a stipulation, has a vessel the right to com- 
 press cotton ? 
 
 A. We know of no judicial decision on this point, and in a 
 litigated case of the kind, the intention of the parties would 
 have to be gathered from the custom of the port, the previous 
 transactions, if any, of the parties, and the rate of freight agreed 
 
SHIPPING. 
 
 513 
 
 on. Where it has become the common practice at the port for 
 the ship to send the cotton to the press, and a higher rate would 
 be made for unpressed bales, these circumstances must be taken 
 into consideration in endeavoring to interpret the actual con- 
 tract, and in the absence of evidence that the shipper would 
 suffer any damage, we are inclined to think would be held to 
 form, by implication, the basis of the agreement. 
 
 6 1 . Are the owners of a ship liable for damages done to freight 
 by shipworms, which bored through new cases and the merchandise in 
 them ? 
 
 A. The United States Court for the Second Circuit, Judge 
 Nelson, decided this question in the case of the Miletus, 5 
 Blatch., 335. The Court said : " The rule must be regarded as 
 settled, in this conrt, that damages occasioned by vermin on 
 board of a ship, to cargo, in the course of a voyage, are not the 
 result of a peril of the sea, or any of the dangers or accidents 
 of navigation, within an exception to that effect in a bill of lad- 
 ing, but are damages for which the ship and its owner are 
 liable, as insurers of the safe conveyance of the cargo. 
 
 62. 1. Is a merchant bound to receive goods brought to the place 
 of destination so deteriorated during the course of the voyage, as to 
 be of no value to him, or is he at liberty to abandon the same to the 
 ship for freight ? 
 
 2. Will passing entries at the Custom House by the consignee with- 
 out his knowledge of the condition of such goods, constitute his ac- 
 ceptance of the same, and affect the abandonment — it must be borne 
 in mind that in accordance with the laws of the port of discharge the 
 delivery of goods or cargo is made at the public wharf, and the land- 
 ing cannot be proceeded with before the necessary documents are 
 passed by the consignees at the Custom House — and on landing, can 
 he only ascertain the condition of the goods ? 
 
 3. Can a merchant abandon certain goods for the freight, say, for 
 instance, potatoes (spoiled) and accept others, say, for instance, flour 
 (sound), although shipped by one party, and in one bill of lading ? 
 
 4. If a ship is chartered for a specific sum for the voyage, and the 
 charterers relet her or take freight of various descriptions from vari- 
 ous parties, and some of the goods are landed at the port of discharge 
 in a rotten condition, and are abandoned for the freight, who bears 
 the loss, the ship or the charterers ? 
 
 5. Is there any difference between the American and Enghshlaws, 
 bearing on the above points ? If so, state such. 
 
 33 
 
514 
 
 SHIPPING. 
 
 A. A very simple answer will solve all the questions : >incc 
 the shipowner is responsible only for the transportation of the 
 cargo, the freight will be due on its delivery at the port of desti- 
 nation, and in whatever degree goods may be diminished in value 
 by decay, or damage from perils of the sea, and although they 
 may have become of no value on arrival at the port of destina- 
 tion. " Hugg V. Augusta Ins. Co., 7 Howard, U. S. Sup. Court 
 R., 595 ; Steelman v. Taylor, 19 Law Rep., 36. The same ruk 
 holds in England ; and if the goods are refused by the consignee 
 (as with rotten oranges and lemons), and payment of freight 
 cannot be enforced from him, the master can return and collect 
 the amount of the shipper. 
 
 63. A received from B an order to ship certain goods, and en- 
 gaged freight under deck. For vessel's convenience she stows a por- 
 tion on deck, without A's knowledge, although A learns it before bill 
 of lading was signed. If ship will give clean bill of lading is A justi- 
 fied in accepting it ? Or, should he note the facts thereon ? If B 
 insured without such knowledge, and insurance company learned the 
 :facts, would the company be released on the on deck portion in case of 
 loss ? If yes, who suffers loss, B or ship ? 
 
 A. If goods are stowed on deck without the consent of 
 the shipper, they are not protected by an ordinary policy of in- 
 Burance, and are at the risk of the shipowner or master. If the 
 shipper knew nothing of this storage before he received the bill 
 of lading, he could hold the ship liable in case of loss, as a 
 clean bill of lading (except for goods which custom or the 
 consent of the owner makes it proper to load on deck) implies a 
 contract to carry under deck. How far the knowledge of the 
 owner concerning the storage before his receipt of the bill of 
 lading, and the absence of his protest against it would be taken 
 ag an implied consent Ave cannot say, as the decision \vould be 
 governed by the circumstances. If the owner distinctly pro- 
 tested against such carriage of his goods, and held a clean bill 
 of lading, even in this case we are confident the vessel could be 
 held for the loss of the deck load, unless under circumstances 
 that left no distinction between the cargo on or under deck. 
 
 64. A has a claim on a schooner for money loaned to repair said 
 schooner ; B has a claim on the schooner for provisions furnished. A 
 takes judgment on the schooner and advertises her sale to satisfy same. 
 
SHIPPING. 515 
 
 Is there a distinction made in claims on a vessel ? If the schooner 
 under the judgment does not bring enough to satisfy A's claim what 
 recourse has B ? If she brings more than enough to satisfy A, but 
 not enough to pay B, v/hat recourse has B ? Or, in other words, does 
 the buyer of a vessel at a judgment sale become as he would under an 
 open sale, responsible for claims on the vessel ? 
 
 A. If the lender of the money has taken, as he ought to have 
 done, a bottomry or respondentia! bond in return for the money 
 advanced, his lien on the vessel supersedes all others, except that 
 of seamen for wages. (1 Conkling's United States Admiralty, 
 290.) Otherwise it seems to be doubtful whether he has any 
 lien at all, but only an action in personam against the owner. 
 (The Fortitude, 3 Sumner's R., 228.) In order to determine 
 this question, and put himself into position to enforce his lien, 
 if he has one, the lender must intervene by petition to the court 
 in which the other lienors are asserting their claims ; and there- 
 upon the court will order the proceeds of the sale of the vessel 
 to be distributed in accordance with the legal priorities. The 
 sale of the vessel under a decree in admiralty discharges it from 
 all liens or liabilities for the debts of the owner. (1 Conkling's 
 United States Admiralty, 48.) 
 
 * SALVAGE— GENERAL AVERAGE. 
 
 65. In case of a vessel loaded with cotton, hence to Bremen, char- 
 ter rates 11 -3 2d., bill of lading rates 7-16d., captain's note payable ten 
 days after arrival, given for the difference. Vessel puts into Ireland, 
 refits and proceeds to destination, making a general average. Please 
 inform me whether the vessel should contribute on the amount of 
 charter party or of bills of lading, and if the latter, has owner of 
 vessel a valid claim on the shipper here for his contribution on the dif- 
 ference, as represented by the captain's note, said owner having paid 
 in the larger amount as represented by the bills of lading, which in- 
 clude both charter party and captain's note ? 
 
 A. We have sought in vain for any precedent or principle on 
 which the shipowner can found a claim to be reimbursed by the 
 shipper for any portion of the contribution made by the freight 
 in the adjustment of general average. The principle upon which 
 the freight contributes is of course the same as that applicable 
 to the cargo ; the one is due from the shipowmer, as the other 
 from the shipper, because it is his interest at risk. The manner 
 in which the net value of the freight is obtained in adjusting a 
 
516 
 
 SHIPPING. 
 
 general average is in any case a somewhat arbitrary one, and the 
 rule is variable, according to the country in wliicli tlie adjustment 
 is nvide. But the text books on maritime law are very emphatic 
 in their statements, that " a foreign adjustment, made at any 
 port at which it ouglit for sufficient reason to be made, is binding 
 upon all the parties to it." Parsons, Marvin, Dixon, Abbott, and 
 Flanders all agree on this point. Exceptions have been allowed 
 by the courts, both in England and in this country, but we know 
 of none such the principle of which could be made to apply to 
 the case before us. We have no doubt that the charter rate of 
 freight should have been taken by tlie Bremen adjusters as the 
 basis of their estimates, since contribution was fairly due from 
 net freight only, but we do not think the adjustment can be re- 
 opened for that error, admitting it to be such. 
 
 66. We have a cargo of 280 tons, more or less, of plaster in vessel 
 at our wharf. The masts of the vessel were struck by lightning on 
 Friday and split so that they will be compelled to put in new ones. 
 The captain claims a proportionable average on the cargo for damages. 
 Plaster is billed to us at 90 cents a ton, and freight $2.50. 
 
 A. There was no sacrifice to call for general average. The 
 vessel being at her destination, the cargo must be discharged and 
 delivered to the consignee on payment of freight. The damage 
 to the masts is not " general average," but " partial loss," and 
 must be borne by the owners of the vessel, unless she is insured 
 against it. 
 
 67. A vessel bound for Brazos goes ashore on Brazos Island on 
 entering the harbor. There are 3,000 packages on board, 1,000 of which 
 are landed on the beiich. She then gets off and is again blown ashore, 
 when another 1,000 packages are landed. She then floats and at- 
 tempts to enter the harbor, strikes the bar, and jettisons balance of 
 cargo and is saved. The question is, do the landed goods contribute 
 in general average to jettisoned cargo, and in making the adjustment 
 are the three disasters considered as one ? Is there any contribution 
 to the damage to the vessel, nothing having been cut away ? 
 
 A. In the practice of underwriters here this would be reck- 
 oned as one continuous disaster, and ajl the property saved will 
 contribute to the general average. Nothing having been cut 
 away or sacrificed by vessel there would be nothing to contribute 
 for on that account. 
 
SHIPPING. 
 
 517 
 
 68. Last montli we shipped a bill of goods without insurance to a 
 southern customer by schooner. In your shipping news a few days 
 after, I read the schooner had been compelled to put into another port in 
 distress. We have received a note from a down town firm asking us 
 for a bill of items of our goods in order to assess damages for our custo- 
 mer to pay. What is the justice of the law (if there is any) in com- 
 pelling owners of freight to pay for repairs on a vessel injured w^hile 
 the goods are in transit, and how does their liability as a common car- 
 rier differ from a railroad ? Were we to refuse to send a duplicate 
 invoice, could we be compelled to furnish it, and what safety is there 
 that unprincipled parties might not furnish bills under the correct 
 amount, and we in sending a correct bill w^ork an injury to our custo- 
 mer ? 
 
 A. All goods shipped on a sea voyage are subject to the laws 
 of general average. If any of the cargo is thrown over to save 
 the ship, the rest of the cargo and the ship must be assessed to 
 pay for it. If the ship by stress of weather is driven into an 
 intermediate port for repair, all the expenses of entering port, in 
 loading and loading again where this is necessary, and such re- 
 pairs and refitting as are rendered necessary to complete the voy- 
 age, can be assessed on the whole ship and cargo. Where the 
 goods are insured the underwriters pay this charge ; where they 
 are not insured, the goods must pay before they are delivered, 
 and this assessment is upon their value. If the seller may not 
 furnish a copy of the invoice the adjusters may examine the 
 property and assess its value. 
 
 69. What is the law which governs salvage ? What per cent, is 
 it of the property saved, etc. ? 
 
 A. The principle of law is that salvage in each case is to be 
 governed by its peculiar circumstances. The damage to property, 
 value, risk of life, skill, labor, and the duration of the service, 
 are all to be taken into account, and no fixed percentage or pro- 
 portion of the value saved or recovered is recognized by any 
 court. 
 
 70. A vessel loaded with sugar on her voyage from the West 
 Indies to the United States puts into a port on the coast in distress. 
 She is repaired, without discharging her cargo, and after three weeks' 
 delay proceeds on her voyage. Are the owners of her cargo entitled 
 to compensation, in general average, for the extra loss in weight (over 
 and above the usual loss in weight on the voyage) resulting from the 
 delay produced by going into a port of refuge ? Such compensation 
 
518 
 
 STATUTE OF LIMITATIONS. 
 
 is usual wlien the cargo is discharged and reshipped. As the drainage 
 is Hkely to be greater in the vessel's hold than when landed and re- 
 stored, why should not the same usage prevail in the case in question ? 
 
 A. The extra drainage while the goods remain in the vessel, 
 and it is perfectly natural, not being caused by any disturbance 
 of the cargo, will not entitle the shippers or consignees to allow- 
 ance in general average. 
 
 STATUTE OF LIMITATIONS. 
 
 1 . I failed in business some eight years ago, and at present see no 
 prospect of paying off my indebtedness. Is there any period fixed by 
 statute law by which my debts are obliterated ? There are no judg- 
 ments against me, nor have I ever been through bankruptcy. 
 
 A. The statute of limitations in this State (X. Y.) applies to all 
 debts six years after they are due, if the promise to pay has not 
 been renewed. This only applies to debts held by residents of this 
 State. If our correspondent owes to citizens of other States, 
 and should remove to the place of their residence, he may be sued 
 there, but they cannot prosecute him here after six years. 
 
 2. Is a note given on demand in 1860, on which payment has never 
 been demanded, outlawed, or does it still hold good ? 
 
 A. A note on demand is evidence of a debt then due, and tlic 
 statute of limitations begins to run from the day it is made and 
 delivered. 
 
 3. In 1871 a person residing in this State (N". Y.) borrowed a consid- 
 erable amount of money v/hich has never been repaid, nor were the debts 
 put in judgment. The borrower removed in 1873 to some western State. 
 Are not the debts still good against him, and until he shall have re- 
 turned to this State and resided here six years ? My attorney advised 
 me that such was the case. Will you give your opinion and possibly 
 a reference or two ? 
 
 A. The New York statute of limitations is six years. The 
 debtor has lived long enough (probably) in the State where he is 
 at present to avoid legal process there ; but if he returns to this 
 State, or can be found at any time within it, he may be served 
 with legal process, and judgment may then be recovered against 
 him. 
 
 4. I lent a relative in Boston, May, 1866, $300. Shortly after he 
 gave me his note on demand, at 7 per cent. No interest or any part 
 
STATUTE OF LIMITATIONS. 
 
 519 
 
 of the principal has ever been paid or demanded, or has the note been 
 renewed. As the party is now worth money, I desire to know if the 
 note will hold good in law ? 
 
 A. If, since the note was due the party has not resided six 
 years in this State, (N. Y.,) and can now be found at any time 
 within this State, and served with process here, the debt is 
 still collectible. In Massachusetts it is outlawed by the statute 
 of limitations, and he cannot be sued there. 
 
 5. What is the law in regard to limitation of debts, especially 
 cash loans ? What steps have to be taken to prevent a cash loan from 
 being outlawed, and to renew the Hability on such for a number of 
 years ? 
 
 A. The statute of limitations in this State, (N. Y.,) applies 
 after six years to simple contracts. The simplest method of ex- 
 tension is to obtain a new written promise, as the term will be- 
 gin to run from the new date. If the debtor refuses this he may 
 be sued and the judgment renewed and continued indefinitely. 
 
 6. Suppose an account current between merchants or a principal and 
 his banker, A and B. A renders his account with a balance due B, 
 payable on demand. When does the statute begin to run upon the 
 balance ? 
 
 A. The statute of limitations begins to run against an obli- 
 gation when it is due, that is, when the credit expires ; but 
 section 386 of the new code provides that " in an action brought 
 to recover a balance due upon a mutual, open, and current ac- 
 count, where there have been reciprocal demands between the 
 parties, the cause of action is deemed to have accrued from the 
 time of the last item, proved in the account on either side." 
 
 7. A, B & Co. made a joint note in favor of D, due in September, 
 1871 ; the note was not paid at maturity, nor was ever suit brought 
 against the maker. After the lapse of eight years, A writes to D that 
 he is willing to pay one- third of the original amount, although the 
 claim is outlawed. Would this written acknowledgment of the in- 
 debtedness at this date enable D to bring suit against A for the whole 
 amount of the note, notwithstanding the lapse of more than six years 
 since its maturity ? 
 
 A. Such an offer would not constitute a revival of the claim 
 so as to take it out of the statute of limitations, if there was in 
 it an express refusal to recognize a further debt, or to renew the 
 
520 
 
 STATUTE OF LIMITATIONS. 
 
 promise of payment. Neither would part j)ajment, under the 
 above offer, revive the remainder of the debt, provided a receipt 
 shoukl be taken " in full of all demands. " So decided in Ber- 
 rian v. Mayor, etc., 4 Robt., 538. 
 
 8. A and B gave a joint note for $200, payable one year after 
 date. A paid the interest for eight years, but has now failed. B 
 never paid any interest, and now claims that the note as far as he is 
 concerned is outlawed, and not collectible from him. Can I hold him ? 
 
 A. The statute of limitation applies as to B, and the sum 
 cannot be collected of him. 
 
 9. Is it true that under the statute of limitations the payment of a 
 mortgage note cannot be enforced after the expiration of six years? 
 I was previously informed that a note accompanying real estate mort- 
 gage was good for all time when interest is duly paid thereon. If 
 there is such a rule, does it differ in States, and how would it act in 
 Wisconsin ? 
 
 A. The payment of interest on a note, or other obligation, 
 almost universally prevents the statute of limitations from run- 
 ning against it, California making the only exception we know 
 of to this rule. In Wisconsin a sealed note, if the cause of action 
 thereon accrues within that State, will run for twenty years with- 
 out a payment, while it is barred in six years if the cause of 
 action accrues without the State, or if it is unsealed. If the note 
 is unsealed, the fact that it accompanies a real estate mortgage 
 will not prevent the statute bar from taking effect in six years 
 upon the note itself when no payment is made thereon ; but in 
 this (N. Y.) and other States, the creditor may still have his 
 remedy on the mortgage. The rule is otherwise in Illinois 
 (Harris v. Mills, 28 111., 44), and in a Wisconsin case, decided by 
 the United States Supreme Court (Leffingwell v. Warren, 2 
 Black, 599), the language of Judge Swayne has been understood to 
 be in accordance with the Illinois decision ; but the questions in 
 the cases were not parallel, and the Wisconsin courts themselves, 
 in several cases, have expressly decided that the expiration of the 
 time limited by law for commencing an action on a promissory 
 note does not bar the remedy on the mortgage given to secure 
 such note, by action to foreclose it. (Whipple v. Barnes, 21 
 Wis., 337 ; Kennedy v. Knight, id., 340 ; Knox v. Galligan, 
 id., 470. 
 
STATUTE OF LIMITATIONS. 
 
 521 
 
 10. A customer owes us some money on book account for nearly 
 six years. He made a payment this spring. Does this carry the bal- 
 ance of the account along for six years longer, or must we commence 
 action in order to hold him on balance ? 
 
 A. A part payment of a debt has always been held to take 
 it out of the statute of limitations. Whipple v. Stevens, 2 Fos- 
 ter, 219. But the payment must be made on account of a larger 
 existing debt, and not of a special item or particular deljt, and 
 to be effective must not be accompanied with a denial that any 
 more is due. If a book account has been made up and the debt 
 acknowledged, and a part payment is afterward made on account 
 of it, the date is thus renewed, and the six years will begin to 
 run from the date of the last payment. 
 
 1 1 . Twenty years ago a stock company was formed to produce 
 oil. They bought 1,800 acres of land in one of the now principal 
 oil-producing districts of Pennsylvania, and the land is now worth 
 $1,000 per acre. Not being able to commence work they put the 
 property into the hands of a private individual, and into his name, to 
 be held in trust. This party got into financial difficulties and the land 
 was seized (being in his name") and sold. Can it be reclaimed by suit 
 or not ? 
 
 A. If the present possessors of the land and those from whom 
 they claim have held it for twenty years, we do not think they 
 can be disturbed by any legal proceedings. 
 
 12. Thirty years ago a father gave to his son a trust deed of a 
 farm, to remain his as long as he lives. At his (the son's) death the 
 farm was to become the property of the grandson. The trustee never 
 qualified or acted as such, and died 1 5 years ago, and the grandson has 
 since died ; but the father still lives, became involved and mortgaged 
 the farm, and being foreclosed the farm has been sold at sheriff's sale. 
 The party purchasing the same never knew of the trust deed until 
 action was commenced to recover by the son to whom it was originally 
 deeded. Can he recover, and would a judgment dated previous to the 
 mortgage be a lien upon the farm ? 
 
 A. The statute of limitations would seem to be a sufficient bar 
 to the establishment of the son's title ; at all events, an unre- 
 corded deed could not defeat the riglit of the purchaser under 
 foreclosure sale. A judgment docketed prior to the mortgage 
 would remain a lien in preference to the latter for ten years, 
 after wliich time, no levy having been made, the lien would be 
 raised in favor of incumbrances or purchasers in good faith. 
 
522 
 
 STATUTE OF LIMITATIONS. 
 
 13. Ct. — Please answer how long it is, according to the laws of 
 Connecticut, before a note becomes outlawed ? 
 
 A. If it is a negotiable note, and the debtor is a resident of 
 the State, and the creditor is under no liability to sue, it is bar- 
 red in six years. But the time during which the debtor is absent 
 from the State is not counted ; and if the note is non-negotiable 
 it will run for seventeen years. If the creditor is legally incapa- 
 pable of bringing an action when the right accrues, he has four 
 years in the case of a sealed instrument, and three in that of a 
 simple contract, after the disability ceases, in which to briiig his 
 action. 
 
 14. Gi-A. — We have an open account against A, beginning in the 
 year 1871 and ending 1875. The account has never been balanced. 
 The last debit is within a period of four years. We have entered 
 account for suit, and are now informed by an attorney that all of 
 the account which exceeds four years is barred by statute limitation. 
 Laws in Georgia are so numerous, and are altered and amended so 
 often, that we really do not know where we stand. Please give us 
 your decision in this matter. 
 
 A. The Supreme Court of Georgia, in the case of Schall v. 
 Eisner (58 Ga. Rep., 190), held that where, as in that case, there 
 were " mutual debts between the parties the statute of limita- 
 tions would not bar the suit for any part of the account if the 
 last item was not barred." But though the point does not aj)- 
 pear to have been expressly decided by the Georgia Supreme 
 Court, the general rule elsewhere established, is that in order 
 thus to take the items of an account out from the operation of 
 the bar, there must be mutual debts and credits, and not a mere 
 demand of one party against the other. So held in Alabama, 
 Tennessee, Texas, South Carolina, New York, Massachusetts, 
 California, and other States, and we presume the rule would be 
 followed in Georgia. 
 
 « 
 
 15. Ills. — How long after the date of sealed instruments before 
 the statute of limitations begins to run in the State of Illinois ? 
 
 A. An apparent conflict of authority in the case of the 
 application of the Illinois statute of limitations to mortgages, 
 has delayed our answer to the above inquiry ; but relying upon 
 the Revised Statutes, edition of 1877, we answer that the statute 
 
SURETIES. 
 
 523 
 
 begins to run on sealed instruments generally from the clue date, 
 or that of a payment or new promise, and bars an action after 
 ten years from such period, except in the case of judgments re- 
 covered within the State, which may be kept alive 20 years. 
 
 16. Ills. — On the 1st of January, 1867, I took a mortgage (indue 
 form according to the laws of lUinois) for the purchase price of real 
 estate payable in installments all of which were paid as they became 
 due, excepting the last three, which remain unpaid, and were due as 
 follows: March 1st, 1872, March 1st, 1873, March 1st, 1874. At 
 what time will I be prohibited by the statute of limitations (of Illinois), 
 from collecting the same by foreclosure ? 
 
 A. We have the impression that the limitations for suit upon 
 a sealed instrument in Illinois is twenty years, the same as in 
 this State (N.Y.). At any rate, the lien on the real estate Avill liold 
 untilthe bond is paid, and probably long after the patience of our 
 correspondent is exhausted. 
 
 17. Pa. — What length of time is required by the laws of Pennsyl- 
 vania to outlaw an ordinary business note made in that State ? From 
 some dates I have I am under the impression that an act of the Penn- 
 sylvania Assembly dated March 27, 1813, under the head of statute of 
 limitation, plaintiffs were debarred from suing on a promissory note 
 after six years, unless they were beyond seas," in which case they 
 had only six years after their return. By an act of July 30, 1842, the 
 provisions of the act were not to extend to cases where defendants 
 were " beyond the seas," and that suit could be brought within six 
 years after the return of the defendant. It is my impression that the 
 Supreme Court of Pennsylvania decided that " beyond seas " meant 
 
 without the United States." (2 Dallas, 217 ; 1 Yates, 329 ; 33 Penn- 
 sylvania Statute Reports, 374.) Have you any information showing 
 that a note dated April, 1861, is not outlawed, the maker of the note 
 having been a resident of the State of New Jersey since 1861 ? 
 
 A. It was decided by the Pennsylvania Supreme Court, in 
 Gonder v. Estabrook (1859), that the statute of limitations is 
 not prevented from running in favor of a defendant by his resi- 
 dence without the State, unless he is " outside the United States." 
 The note in question therefore seems to be barred by the statute. 
 
 SURETIES. 
 
 1 . As an interested party I would ask as to the law or the custom 
 regarding the responsibility of a co-bondsman ; what would the effect 
 be if the directors of a bank knowing of the failure of one of the bonds- 
 men by his bankruptcy proceedings neglected to obtain a substitute ? 
 
524 
 
 TAXATION. 
 
 Are they not bound to have another without delay ? Do they not by 
 neglect of their duty in not heeding the public announcement lose both 
 bondsmen ? 
 
 A. Tlie solvent bondsman might insist on his name being 
 withdrawn, or a solvent party being substituted for the bankrupt, 
 but the bank if it chooses to run the risk may go on with the 
 case as it stands. The solvent man is not released by such a 
 course. 
 
 2. A buys a restaurant, paying partly in cash for it and giving notes 
 and chattel mortgage for the balance. B indorses these notes and 
 takes a second chattel mortgage on the business for his security. After a 
 while (six months) B fearing to lose money, forces A to turn over every 
 thing to him (E) by bill of sale, and releasing A from further respon- 
 sibility by satisfpng both mortgages and carrying on the business 
 himself, B also paying A's notes indorsed by B, as they came due, 
 and finally sells the business, keeping proceeds for himself. B claims 
 to have lost money by the transaction and sues A for such. The ques- 
 tion now arises : Can B lawfully sue A for any possible damage he 
 may have sustained ? or rather, has not B, by securing himself by 
 mortgage, and afterward releasing A by canceling the mortga,ue and 
 carrying on the business himself, and disposing of it, lost all claim 
 against A ? 
 
 A. This question cannot be positively answered without exact 
 information as to the terms upon which the business was conveyed 
 by A to B. If the expressed consideration of the transfer was 
 that B should discharge the first mortgage and pay the notes 
 upon which he was indorser, then he has no further claim upon 
 A, even if he did lose money. But unless this, or something 
 equivalent, was the bargain. B may be able to hold A to further 
 liability on the notes. 
 
 TAXATION. 
 
 1. Can a State tax merchandise imported and on which duty has 
 been paid, as long as said merchandise is sold in original packages ? 
 In other words, can a State put a tax on the sale of a case of imported 
 wine when sold in the original package ? 
 
 A. The Supreme Court of the United States has decided that 
 no State can tax or prohibit the sale of imports in original 
 packages. 
 
 2. Has a country merchant (commission or other) the right to re- 
 ceive deposits subject to check at sight, and issue therefor exchange on 
 
TAXATION, 
 
 525 
 
 New York, free of charge, without being subject to the government 
 tax as a banker, a regular national bank paying government tax being 
 located in the same place ? 
 
 A. The Internal Revenue act defines the business to which 
 the tax applies as follows : 
 
 Sec. 3,407. Every incorporated or other bank, and every person, firm, or 
 company having a place of business where credits are opened by the deposit or 
 collection of money or currency, subject to be paid or remitted upon draft, 
 check, or order, or where money is advanced or loaned on stocks, bonds, 
 bullion, bills of exchange, or promissory notes, or where stocks, bonds, bullion, 
 bills of exchange, or promissory notes are received for discount or for sale, shall 
 be regarded as a bank or as a banker. 
 
 This is very plain, and if a merchant has a place of business 
 
 where money is received on deposit subject to be paid upon a 
 
 check at sight, he comes within the definition. 
 
 3. A considerable amount of money owned in New York has been 
 for some time past loaned in Illinois and other w^estern States on real 
 estate security. Can you refer us to a decision in the United States 
 Courts, or in your own State Courts, in which such loans are held not 
 to be taxable in New York, it being supposed that the money is taxed 
 in the States where loaned ? 
 
 A. The Supreme Court in 1868, in The People v. Gardner, 51 
 Barb., 352, decided that a resident of this State (N.Y.) cannot be as- 
 sessed here for money invested on bond and mortgages in Wis- 
 consin and Illinois. And the Attorney-General, in an opinion 
 given as recently as April 24, 1879, quotes this as the recognized 
 law in this State. 
 
 4. I have invested $10,000 on bond and mortgage in Wisconsin, 
 for the estate of a deceased person, formerly a resident of this State 
 (N. Y.). Is it taxable in this State ? 
 
 A. In the case of Trowbridge ex rel. Commissioner of Texas, 
 4 Hun., 595, the Supreme Court of this State declared the taxa- 
 bility of North Carolina State bonds owned here, on the ground 
 that they were " evidence of a fixed indebtedness," at the same 
 time exempting shares of foreign corporations as being " simple 
 representatives of capital or property employed in business in 
 other States." The Court of Appeals affirmed this decision. 
 Upon the principles here laid down, and on the statute requiring 
 " all personal property within the State " to pay tax, the bond 
 and mortgage above specified appears to be taxable here. We 
 assume that the heirs or legatees beneficially interested in the 
 estate are resident here. 
 
526 
 
 TAXATION. 
 
 5. Are corporations liable for State tax whose entire capital is in- 
 vested in real estate on which they are already heavily taxed by the 
 city ? The blanks for returns under the new tax law give no oppor- 
 tunity to deduct for real estate. 
 
 A. A case of this kind is one of double taxation, but the new 
 law does not seem to provide any remedy, and on the contrary 
 specifically requires that the real estate shall pay local taxes, 
 while tlie tax on capital shall be transmitted direct to the State 
 Treasury. 
 
 6. I have been rendered a bill for personal tax in Brooklyn. Please 
 inform if it can be legally collected. If so, what constitutes personal 
 tax ? 
 
 A. Our correspondent must have had notice several months 
 ago that he was assessed a certain sum as personal tax, because 
 this is served on every one thus named in the list. If he 
 w^as not Avorth that amount above his personal liabilities, he 
 could have had it reduced, or wholly vacated by a timely call on 
 the assessors. It is now too late, and he must pay it. The rate 
 per cent, is precisely the same as that levied on real estate in the 
 same ward. 
 
 7. John Doe owns 30 shares bank stock and real estate free from 
 incumbrance. He gives his note for two thousand dollars, and buys 
 railroad stock. Does this constitute a debt which should be deducted 
 from assessment of bank stock ? 
 
 A. A taxpayer's just debts are to be deducted at all events, 
 and his bank stock cannot be made to pay tax unless the deduction 
 can be made and leave it as personal property over and above 
 such just debts. A different rule would be at Avar with the spirit 
 of the recent United States Supreme Court decision, that Ijank 
 shares must not be subjected to any greater rate of taxation than 
 other property, the Court expressly holding that this prohibition 
 applies to the assessment as \vell as to the rate of tax. 
 
 8. Are the deposits of Savings banks in this city (N. Y.) liable to 
 taxation as personal property of the depositor. 
 
 A. All of a man's personal property over and above his indebted- 
 ness, not invested in United States securities is liable to taxation in 
 this State (N.Y.), but only a small portion of such personal property 
 
TAXATION. 
 
 627 
 
 is actually taxed, the owners not being required to make any re- 
 turn of it, and the assessors not being* very sharp to include it. 
 There is also gross favoritism in this respect. 
 
 9. Some 12 years since I was appointed administrator to a small 
 estate, which I closed up and paid over the amounts to the widow and 
 orphans. Somebody now, calling himself an internal revenue collector, 
 in looking over the records of the Surrogate's office, finds I gave bonds 
 in $15,000, and notifies me there has been no legacy tax paid on said 
 estate. Am I personally liable ? The widow is dead and left nothing. 
 I am guardian for the orphans and only have a little. 
 
 A. This collector may have overlooked the provisions of the 
 act imposing the legacy tax, "tliat property passing by will or 
 the laws of any State or Territory to the husband or wdfe of the 
 person who died possessed, shall be exempt from tax or duty." 
 Also, that any such legacy or share passing to a minor child shall 
 only be taxable on the amount above $1,000. Only in case tlie 
 amount which went to the orphans, therefore, exceeded that sum, 
 is any duty payable ; but, in that case, hard as it is, the tax is 
 collectible at any time within 20 years after it became due, and 
 the collector may bring suit against the person having custody of 
 the property. The administrator is not personally liable, though 
 as the law made it his duty to pay the tax, we are afraid that if 
 the matter went to suit the court would impose the costs upon 
 him. 
 
 1 0. Is there a law in force in this State (N. Y.) taxing all church prop- 
 erty ? If not, please state the exemptions. 
 
 A. Every building used for public worship in this State, the 
 lots on which they are situated, and the furniture belonging to 
 each of them, are exempt from taxation in this State. Colleges, 
 academies, school-houses, court-houses, jails, poor-houses, alms- 
 houses, houses of industry, etc., are also exempt from taxation. 
 
 11. A resident of this city possessing no other personal property 
 than furniture, etc., necessary for his family, can he be taxed if such 
 is worth no more than about $500 ? The tax commissioner told me I 
 had to pay, but such ruling is against common sense, as I cannot be 
 without such furniture, while my earnings are hardly sufficient to sup- 
 port my family. 
 
 A. All personal property exempted by law from execution is 
 exempted from taxation. If our correspondent is worth no per- 
 
628 
 
 TAX A riox. 
 
 sonal property above his debts but that named in his statement 
 we doubt if the assessors have any right to tax liim. 
 
 12. I received notice yesterday of a summons from a city marshal 
 to call and pay taxes on my personal property for 1877, with accrued 
 costs for delayed payments. My personal property consisted of effects 
 and furniture to the value of $500. The tax was charged at $13 and 
 costs $3.55. Please inform me if this is correct, and whether no per- 
 sonal effects or furniture are exempt from taxation ? 
 
 A. The same personal property is exempt from tax as from 
 execution, including a sewing machine, family Bible, pictures and 
 books not exceeding 850 in value, and in addition necessary 
 wearing apparel, cooking utensils, etc., and necessary furniture, 
 professional instruments, etc., to the value of 8250, when owned 
 by a householder. But it is too late for " A Clerk " to claim this 
 exemption for 1877 ; he must make it before the assessors at their 
 meetings for the purpose, before the tax is confirmed. Personal 
 taxes in arrears the first day of January after they are payable 
 are increased 3 per cent., and interest at the rate of 12 per cent, 
 per annum (in the case of real property taxes 8 per cent.) also 
 accrues from the time the books are placed in the receiver's 
 hands ; in addition to which are the marshal's fees. 
 
 13. I am a resident of Westchester county, State of New York, 
 where I resided in my own furnished house a portion of the year in- 
 cluding the summer months. In that county I have continually voted, 
 and continually paid school, county, and other taxes on both my real 
 and personal property. For convenience of business I reside in New 
 York during the cold months. Am I in consequence of such residence, 
 liable to pay taxes in New York on personal property ? 
 
 A. You are not liable to pay taxes if you are not in business 
 here on your own account and own no taxable property here. 
 
 14. I loan say $10,000, taking as collateral security a bond and 
 mortgage duly recorded on a property already heavily incumbered. 
 Can the mortgage on other personal property held as above be as- 
 sessed to me and taxes collected on the same ? 
 
 A. The loan is the personal property of the lender, but it and 
 the collateral security cannot be both assessed, thus duplicating 
 the tax on a single 810,000. 
 
 15. Are railroad securities and Government bonds exempt from 
 State taxation in this State (N. Y.), and are they also exempt in the State 
 of Massachusetts? Or, do they come under the head of personal property? 
 
TAXATION. 
 
 529 
 
 A. United States Government bonds cannot be taxed any- 
 wbero in the United States under any State or municipal author- 
 rity. Railroad securities can be taxed, unless they represent a 
 corporation out of the State. 
 
 16. What, if any, is the State tax on incorporated companies ? 
 A. The capital is taxed at the same rate as all other assessed 
 
 property. That which is invested in real estate is put under a 
 different heading, but both pay the same rate. 
 
 17. A firm consists of two general partners, one of whom has 
 money, the other none. The partner having the money in the firm re- 
 sides out of New York State, and is assessed 810,000 as personal estate 
 at the place of business. Is it right for the firm to pay the tax, or the 
 partner assessed ? 
 
 A. We think that there is some mistake about this. The 
 personal property is doubtless entered as that employed by the 
 firm, or the partner assessed, in business here. This tax is 
 usually considered in such a case as a partnership expense, to be 
 borne by the firm. 
 
 18. I am taxed for $20,000 as " premium on United States bonds." 
 That is. these bonds are worth that much over par. Believing it was 
 illegal, and that all money invested in government bonds is exempt, 
 I protested against the as^ssment and have not yet paid it. Have the 
 assessors any right to do this ? I bought these many years since at 
 about par, and they have appreciated on my hands. T trust you will 
 use your able pen against all injustice and. oppression on the part of 
 officials. 
 
 A. Our courts have decided with the assessors that while the 
 principal of government bonds is exempt from taxation, any 
 premium they may be worth is subject to assessment. In the 
 above case the tax, by his decision, is legally collectible. 
 
 19. Owning a farm in another town, should it be assessed to me 
 here or in the town where it is situated, or to the tenant ? 
 
 A. Real estate of this character can only be assessed in the 
 place where it is located. It is there assessed in the name of the 
 non-resident owner, and is a lien on the property. 
 
 20. In Mount Vernon, Westchester county. New York, the village 
 claim that by special act of Legislature, passed for their benefit, the 
 Sheriff of the county is empowered to collect unpaid taxes on property 
 
 84 
 
530 TAXATION. 
 
 (real estate), by seizure of and sale of household or other property 
 lound on the land. Thus a tenant is made liable for his landlord's in- 
 debtedness, and incase of the owner's failure to pay the usual taxes the 
 tenant's property is confiscated to satisfy the village claim. In one in- 
 stance the working tools of a carpenter, and in another case the horse 
 and buggy of a pliysician visiting a patient, were seized. The seizure 
 and sale of household effects are of common occurrence. The only 
 remedy a tenant has is to get out of his landlord the amount of his 
 loss, minus, of course, the mortification, ex]_>ense, inconvenience, and 
 damages consequent upon such an outrage. 
 
 Are such proceedings, whether authorized by the Legislature or not, 
 constitutional, and if not, what course is best to pursue in order to ob- 
 tain redress ? 
 
 A. Tlie law, applicable to all the State (N. Y.) , forbids an action 
 of replevin to recover property seized for a tax, assessment, or 
 fine ; and no claim of property is allowed to defeat the seizure and 
 sale of property, taken by an officer under such circumstances, 
 though it actually belongs to a third person. We have not found 
 any law on the subject specially applicable to Mount Yernon. 
 Eut there is a remedy for the injustice specified, and in a case in 
 the Supreme Court (Fuller v. Allen, 7 Abb. Pr. Rep., 12), relief 
 was afforded, tliougli with hesitation, by an injunction against 
 the officer, the Court at the same time saying that the party 
 in such a case had an ample remedy 1)y on action for trespass 
 against the officer making the wrongful seizure. If this were 
 not the case, it might be Avell argued, that the article of the Con- 
 stitution which forbids the deprivation of a citizen's life, liberty 
 or property without due process of law, would be infringed. 
 It is not due process of law " to take one man's goods by pro- 
 cess against another man. 
 
 21. Mr. A died in 1863, leaving a wife and three children ; the 
 wife was made executor with another party ; the will entitles the wife 
 to the use of the property as long as she lives, then all goes to the 
 children. Tlie wife died in 1867. Do the children have to pay a suc- 
 cession tax on their father's estate, consisting mostly of real estate ? 
 
 A. If a succession tax was paid by th(5 widow on the real 
 estate, none is due from the children, as it has to be paid but 
 once. Otherwise the tax w^as due when they became entitled to 
 possession, though its lien on the property is now lost. The tax 
 is also due on the personal estate, upon the amount above $1,000, 
 
TAX A TION. 
 
 531 
 
 unless the children were minors when they succeeded to it ; in 
 the latter case the personal is exempt. 
 
 22. A B died in August, 1870. He left a will by which he gave 
 to his wife for life, the use of $30,000, and after her death this sum was 
 to be divided among his children. Mrs. B died in October, 1872, and 
 it is now claimed that though no revenue or income tax was to be paid 
 by the wife, yet the moment she died the fund became liable in the 
 hands of the children. 
 
 A. Legacies passing to husband and wife of the testator are 
 exempt, while in all other cases a tax was imposed. 
 
 23. A owns a farm with a hotel on it. B hires it from A. C 
 comes along and stops over night with a horse. A refuses to pay the 
 taxes. Can a collector of taxes levy on the horse that belongs to 
 and sell it for taxes ? 
 
 A. Under the law in this State (N. Y.) any goods and chattels in 
 the possession of the person taxed when a levy is made for taxes 
 is subject to seizure and sale. When real estate is rented, and 
 the owner fails to pay the taxes, all the goods and chattels and be- 
 longings found upon the estate when the levy is made, may be 
 included in the seizure. The tenant if thus compelled to pay, or 
 if any of his property is taken, has his remedy against the 
 owner ; and any other person owning property in the hand of the 
 tenant as bailee, has his remedy against both owner and tenant. 
 
 24. Where can I ascertain what class of property is liable to a 
 personal tax in New York city, and what a person can deduct in the 
 way of debts that he may owe or that may be owed to him ? 
 
 A. The revised statutes, the annual session laws, and the re- 
 ports of court decisions must all be consulted in order to gain 
 the information desired. In brief, the revised statutes declare 
 that " all personal estate within this State " shall be liable to 
 taxation. What is comprehended under this description has 
 been the subject of various decisions. Capital loaned in other 
 States, the securities being held there in the hands of agents, and 
 any personal property owned within but actually situated outside 
 of the State, have been held to be exempt from taxation. Capi- 
 tal continuously invested liere by a non-resident is taxable, but 
 goods merely sent here for sale, the proceeds not to 1)0 reinvested, 
 are not. Neither are incorporal hereditaments, such as the right 
 
632 
 
 TAXATION. 
 
 to receive wharfage ; nor United States bonds or other securities, 
 or legal-tender notes. But other money in bank or in hand is 
 taxable, as well as debts due from solvent debtors, whether on 
 account, note, bond or mortgage ; municipal or State stocks and 
 stocks in moneyed corporations, including state and national 
 banks, but excepting shares of stock in corporations organized 
 under tlie laws of other States ; household furniture, silver, 
 pictures, goods and cliattels of every description. All debts 
 owed are to be deducted from the amount of taxable personal 
 property of the debtor, but solvent debts due him are taxable, as 
 already stated. 
 
 25. What is understood by personal property for which I have to 
 pay tax. Is the money which 1 have invested in business subject to 
 above tax and at what rate ? 
 
 A. The capital over and above outstanding debts invested in 
 business is subject to taxation as personal property, and wlien 
 legally assessed and placed in the list, is subject to the same rate 
 of taxation as real estate and other assessments. 
 
 26. Ct. — Is money loaned on bond and mortgage out of this State, 
 by its citizens, liable to taxation here ? Suppose a taxpayer has handed 
 in his sworn list (as the law directs) to an assessor, and the official 
 should afterwards add to said list as money at interest a sum supposed 
 by him to be thus invested by taxpayer, and should hand to taxpayer 
 a written notice of said addition to his list, 21st of December (one day 
 too late) ; also, if said official was treasurer, and as such held such 
 bonds equally liable with those he had added to my list, and should 
 neglect to properly place and assess them ; also, suppose my son, who 
 has just become of age, should tell him upon his inquiry that he had 
 no estate, and he should then assess him a large amount, what would 
 be the remedy for such grievances, if they exist ? 
 
 A. Debts due from solvent debtors are taxable under tlie law, 
 and the fact that such del)t is secured l)y a mortgage outside the 
 State is not enough to make it exempt. This is our conclusion 
 from the decision in Trowbridge against the Tax Commissioners, 
 wliere it was held that shares in foreign corporations are not 
 taxable here, but bonds of a State^ being evidence of a fixed 
 indebtedness, as a mortgage is, are so taxable. If the taxpayer 
 does not have timely notice of his assessment so as to give him 
 an opportunity to correct errors, the Supreme Court held, in 
 
TAXATION. 
 
 533 
 
 Wheeler v. Mills, 40 Barb., lliat the assessors are deprived of 
 jurisdiction, and that the tax cannot be collected. If the asses- 
 sor wilfully omits taxable property from his list, he is liable to 
 criminal punishment. Any person improj)erly assessed is entitled 
 to go before the assessors, and to make affidavit as to his taxable 
 property, and thus get an erroneous assessment corrected. 
 
 27. Ind. — Our board of county commissioners employed an expert 
 to ascertain if any taxables had been omitted from the county tax 
 duplicates as handed to the county treasurer for collection. The county 
 commissioners, upon evidence furnished by the expert, call upon Mr. 
 B for the payment of taxes due on $5,000 not listed in 1874, predicat- 
 ing the claim upon the following facts : In January, 1 874. Mr. B Landed 
 to the county assessor his list of taxables (personal property), placing 
 $5,000 as the valuation, B handing at the same time like list and valua- 
 tion to the city assessor. The county board of equalization had Mr. 
 B assessed on the tax duplicate the amount as stated on his schedule, 
 $5,000. Taxes on said amount were paid the county by Mr. B. The 
 expert now discovers that the city board of equahzation rejected the 
 schedule of .$5,000 and had Mr. B's taxables placed on the tax dupli- 
 cate at $10,000, on which latter amount B paid taxes, and entered pro- 
 test. The county commissioners now demand of B that he pay taxes 
 on the additional $5,000 that he paid to the city, but not to the county 
 at the time (1874). Can the claim of the county be collected by law ? 
 
 A. The Indiana tax laws provide that whenever any real or 
 personal property shall be omitted in the assessment in any year, 
 the same, when discovered, shall be listed and assessed, and the 
 average of tax with 10 per cent, interest, may be collected. If, 
 therefore, the demand in the above case rests upon the omission 
 to list and assess a specific parcel of taxable property, it appears 
 that the tax may still be assessed and collected, no statute 
 of limitations running against such a demand. But if the prop- 
 erty was truly listed, and the alleged error consists in too low a 
 valuation, we do not believe that the county board of the asses- 
 sors have now the power to re-open the assessment. 
 
 28. Minn. — Is there any law of exemption on real estate that a 
 mortgage cannot be a lien on all the property covered by said mort- 
 gage ? 
 
 A. The Minnesota law exempts from taxation a homestead 
 of eighty acres of farming land, Avith the dwelling, etc., or one 
 lot with dwelling in an incorporated town, city, or village. But 
 it is provided that " Such exemption shall not extend to any 
 
634 
 
 TELEGRAPH. 
 
 mortgage thereon lawfully obtained, but sueh mortgage or other 
 alienation of isucli land by the owner thereof, if a married man, 
 shall not be valid without the signature of the wife to the same, 
 unless such mortgage shall be given to secure the payment of the 
 purchase money, or some portion thereof ; and such exemption 
 shall not extend to any contract for a lien, or upon which a lien 
 would arise under the lien laws of this State, for work done or 
 material furnished in the erection or repair of a dwelling-house 
 or other building on said land." Bissell's Stat, at Large, Tit. V., 
 sec. 166. 
 
 29. Pa. — A few days ago a warrant was served on me for the pay. 
 ment of taxes for the years 1877-8. Now, the question arises to me, 
 can a collector of taxes compel me to pay costs on the same, if I had 
 not been notified ? 
 
 A. The Pennsylvania law contemplates personal notice not 
 only to the taxpayer, but " demand " of payment, before proceed- 
 ing to enforce collection by distress. See Brightly's Purdon s 
 Digest, vol. 2, p. 1,364. 
 
 30. Va. — The Constitution of the State of Virginia says all prop- 
 erty shall be taxed equally, and exempts investments in United States 
 bonds ; but by the acts of Legislature the market value of the national 
 bank stock is taxed, whether owned in or out of the State, and the 
 bank is required to pay said tax, so that the State may thereby collect 
 the tax from non residents. Please let me know if it is constitu- 
 tional to tax the stock of non-residents. The capital of the banks is 
 not taxed, as they have it invested in United States bonds deposited 
 for their circulation. 
 
 A. This question is answered in the opinion of the Chief 
 Justice of the Supreme Court of the United States, in the case 
 of Tappan v. Merchants' National Bank, in the following lan- 
 guage : "The State within which a national bank is situated 
 has jurisdiction, for the purposes of taxation, of all the share- 
 holders of the bank, both resident and non-resident, and of all 
 its shares." (19 Wall., 490.) 
 
 TELEGPvAPH. 
 
 1. Have the telegraph companies the right to go on the 
 roofs of private buildings in this city for the purpose of stretching and 
 
TELEGRAPH. 
 
 535 
 
 fastening their wires ? Should such be their riglit under the law, are 
 they not liable for any damage done by their employees to said roofs ? 
 
 A. They have no right to enter upon the roof, much less 
 attach anything to it without permission of the owner. 
 
 2. If telegraph companies once succeed, without my knowledge or 
 consent in spiking a support to my house or store, and running their 
 wires across it, am I thereafter prohibited, under penalty of fine and 
 imprisonment, from removing the incumbrance from my property ? 
 
 A. Cap. 491, laws of 1870, which forbids any person to 
 " injure, molest, or destroy any of said lines, posts, pier or abut- 
 ments, or property belonging thereto," under penalty of fine or 
 imprisonment, unless in case of necessity, such as the removal 
 of a house, when the telegraph company must have 2-1 hours 
 notice. The invasion of private property is in fact thus pro- 
 tected by law. Ciiapter 471, laws of 1853, provide for compen- 
 sation to owners of land " upon which telegraph structures 
 shall be placed, the county court being required, on application, 
 to appoint commissioners who shall appraise the loss or damage. 
 We suppose that telegraph companies will insist that buildings 
 come within the legal definition of the term land, and that the 
 only remedy of the injured householder therefore is an inade- 
 quate award of compensation. If such a construction of the law 
 can be maintained, it is no worse indeed than the confiscation 
 of private property for the use of the elevated railroads, but it 
 is no less an outrage, the commission of which upon any merely 
 plausible construction of the statute, or anything short of un- 
 equivocal legislative enactment, the courts should interfere to 
 prevent. 
 
 3. Is there any law in existence in the United States, or have any 
 decisions ever been given in relation to the following question ? A 
 telegraphs an order to B in cipher; the telegram reaches in a mutilated 
 condition, or with an important word different from the one used by 
 the sender, and the order, in consequence, is wrongly executed. Who 
 is responsible or eventually has to bear the loss ? 
 
 A. The courts have decided that due diligence on the part of 
 the telegraph company is consistent with an occasioiuil error, and 
 that unless gross carelessness, or a want of due diligence can 1)6 
 established, no damages can be collected of the line over which 
 
536 TELEGRAPH. 
 
 the message came. Besides, the companies all stipulate that they 
 shall not be held for correctness unless they are called on to 
 repeat the message. As between the sender and receiver, the loss 
 is adjusted by tlie circumstances in each case. 
 
 4. Is a Telegraph Company responsible for loss, arising from a 
 mistake as follows : 
 
 A message distinctly directed to New Orleans is sent from New 
 York, on the 15th of December, and is not received in New Orleans 
 mitil the 18th, the message in the meantime having been sent by the 
 company's mistake to Memphis ? 
 
 A. The form of blank upon which Western Union telegraph 
 messages are sent is skillfully drawn to protect the company in 
 cases of this kind from liability beyond the cost of sending the 
 message unless repeated, or fifty times the cost if the message is 
 repeated, and the current of decisions now sets so strongly to- 
 ward the maintenance of these conditions, when brought home to 
 the notice of the sender, as they are in the Western Union blanks, 
 that we should have little hope of recovering anything beyond the 
 stipulated ar.iount in damages. It is high time, however, that 
 the legislature should intervene and put a limit to the immunity 
 secured by this entire class of one-sided contracts, at least so far 
 as to determine that no one can, even by contract, protect liim- 
 self from a just degree of responsibility for negligence, either his 
 own or that of his servants. 
 
 5, We received orders from several firms for some European goods. 
 As these parties were anxious to get these goods as soon as possible, we 
 cabled for them and paid the amount charged us by the cable company, 
 having paid an additional rate, as the dispatch was intended for Ger- 
 many. We had still more calls for these goods, and sent, a week later, 
 another dispatch, ordering the manufacturer to send us all the goods he 
 could finish up to a certain time. As usual, we notified the party in 
 Europe by letter that we had sent him an order by telegraph. To our 
 surprise we were notified that they never received the first dispatch, 
 only the second one. Not having received our first dispatch, they sent 
 us goods which we did not want and which are unsalable in this mar- 
 ket. Owing to the neglect of the cable company we are heavy losers, 
 as we not only lost the" profits on the first lot we had ordered, besides 
 the trouble and annoyance not to be able to deliver the ordered goods, 
 but we have now on hand a quantity of goods not wanted in this mar- 
 ket. We apphed to the cable company for redress, but cannot get any 
 satisfaction. Is the company not responsible for this neglect ? It is 
 
TRADE MARKS. 
 
 537 
 
 not an error on their part (they accept dispatches under the condition 
 that to avoid error a dispatch ought to be repeated), but utter neglect 
 to send the dispatch. 
 
 A. If this is not in the stipulation as to repeating the mes- 
 sage, the company can be held in damages if the neglect can be 
 established ; but it is of very little use to sue such a rich corpo- 
 ration, as the remedy is worse than the original evil. Some time 
 ago it was legally held that the stipulation concerning repeating 
 the message did not apply to a failure to send it, and it may be 
 that tlie new conditions are so w^orded as to apply as well to non- 
 delivery as to a mistake in the text. 
 
 6. We cabled for a certain line of goods, and on the same day con- 
 firmed our order by mail. Our correspondent had the goods manu- 
 factured for us in accordance with the mutilated cable he received, but 
 before making us a shipment, he was in possession of our letter. A 
 considerable loss resulting from this transaction, we would like to know 
 if we have to stand it or our correspondent ? 
 
 A. There has been no legal adjudication of this question, as 
 
 far as we know ; but as in this case the sender employs the cable, 
 
 the latter like a clerk who makes an error, may be regarded, we 
 
 think, as his agent, and the loss will fall on the employer. 
 
 TRADE MARKS. 
 
 1, A in Ohio submits us the following: " In the faU of 1876 we 
 went into the business of manufacturing shirts, drawers and other 
 articles, in this State, and adopted the name of ' Peerless ' for our pro- 
 ductions, using also our monogram in connection with the word • Peer- 
 less ' upon our labels. We did not consider it necessary to register the 
 name in tRe clerk's office, and have used it uninterruptedly until a firm 
 in New Jersey (manufacturers of white shirts) wrote us that they were 
 the only parties entitled to the word 'Peerless,' having registered the 
 same, and that we were infringing upon their rights. Will you please 
 ascertain whether we are obliged to discontinue this word on white 
 shirts, or have we a right under the Centennial decision to use a plain 
 English word as a title by which our goods may be designated?" 
 
 A. If our correspondents had used the name as a trade-mark 
 before the New Jersey firm used or registered it, they can con- 
 tinue to use it. But if it was registered when they first adopted 
 it, they have innocently infringed on the right of the other parties 
 and can be stopped in its further use. 
 
638 
 
 TRADE MARKS. 
 
 2. I p;ave a tobacco manufacturer in Virginia an order to put me up 
 a quantity of goods to fill an order for a foreign market, and supplied 
 him with my brand (which I own and have copyrighted) to put on the 
 goods in question. On examining the goods sent to me prior to for- 
 warding the same, I found them of inferior quality and not equal to 
 samples or agreement, and rejected the same. Can the manufacturer 
 or his agent sell the damaged lot of goods, to the injury of my brand, 
 or can I compel him to change the brand before he can make a resale, 
 even if at an additional expense to him? 
 
 A. If the contract was properly drawn the manufacturer can 
 be prevented from selling the tobacco with the brand ui)on it. 
 
 3. What effect has the decision of the United States Supreme Court 
 on trade marks ? 
 
 A. It declares the law as fai as it applies to trade marks reg- 
 istered at Wasliington, wholly unconstitutional, and thus wipes 
 out all that has been done under it, leaving our citizens subject 
 to the several State laws and State courts, precisely as if the act 
 of Congress had not been passed. 
 
 4. A and B in Vienna manufacture certain goods, and put on as 
 their trade m^ark "A & B, Vienna." They send their goods iviili this 
 trade mark only to C in this country, but sell the same goods to other 
 parties under any other trade mark said parties may elect. A and B 
 subsequently consolidate with other houses (making the same goods) 
 forming a single concern, with A as the head or manager, and continue 
 the same arrangement as to trade mark with the goods of the consol- 
 idated company. C registered the old trade mark above mentioned in 
 his own name in this country under the United States laws (since pro- 
 nounced unconstitutional) and has it put upon goods not manufactured 
 by the firm who originally owned it, nor by the consolidated company 
 who succeeded and owned the trade mark of the old firms. Has C any 
 right to use it against the will of the consolidated companies, and of 
 their manager A (whose original trade mark it was) to draw away their 
 business to another house by the reputation attaching to their own 
 trade mark? 
 
 A. The trade mark in the above case, being one which indi- 
 cates the origin and ownership of the manufacture, belongs to a 
 class which is protected by our State laws, and C can be restrained 
 by injunction from an unauthorized use of the symbol, as well as 
 made to respond in damages if any can be shown. 
 
 5. A merchant in the United States (B) buys goods of a merchant 
 in Europe (C), which goods bear a trade mark, or label, that a mer- 
 chant in Europe (D) claims to be an infringement of his own trade 
 
TRESPASS. 
 
 539 
 
 mark or label, but whicli trade mark or label is not registered in the 
 United States. Can D maintain an action in our State Courts against 
 B for such alleged infringement ? 
 
 A. If D has introduced his trade marks in this country he can 
 sue in the State Courts for an injunction and an accounting, not- 
 withstanding the want of registry. So decided by the Court of 
 Errors 1846^ (Taylor vs. Carpenter, 2 Sandf. Ch., 603). The 
 Federal legislation with respect to registry does not take away 
 the common law right of action for infringement. 
 
 TRESPASS. 
 
 1 . I own (or lease for a term of years) a private dock (and grounds 
 adjoining) on the waters of Long Island Sound, the Hudson, or Xew 
 Jersey coast, remote from any village or town. A steamboat lands an 
 excursion party at this dock and grounds without my knowledge or 
 permission. To what extent is said boat and owners or agents, or 
 which party, liable to me and what is my remedy ? Or, should I first 
 notify them that it is my property, and that they must apply to me for 
 permission to use the same ? 
 
 A. The general principle applicable to the above inquiry 
 seems to have been well stated by appellant's counsel in Gould 
 against Hudson River Railroad Company, 6 N. Y., 522, in 
 which it was argued that the riparian land owner " has the ex- 
 clusive right to the shore down to the water's edge at high-water 
 mark, and the exclusive right of embarkation from his own land, 
 and of using the natural shore as a landing place for his own 
 private profit and convenience, or of erecting a wharf for that 
 purpose. " (Chapman v. Kimball, 9 Conn., 41 ; East Haven v. 
 Hemingway, 7 Conn., 186 ; Bowman's Devisees v. Wathen, 2 Mc- 
 Lean, 381.) In Bird v. Smitli, 8 Watts, 434, it was held that 
 tlie owner of a private ferry had no right to land boats and pas- 
 sengers even at the terminus of a public highway, between high 
 and low-water mark, on the opposite margin of the river, witli- 
 out the consent of tlie owner. See also Post v. Pearsall, 22 
 Wend., 425, where similar views were laid down. Our conclusion 
 is, that the right simply to stop at a private wharf on navigable 
 water may not be denied, but without dedication to public use, 
 or legislative grant, no person can use such a wharf to disem- 
 bark passengers or freight without the consent of the owner. 
 
640 
 
 TRUSTEES. 
 
 Siicli an unlicensed use of it would accordingly be a trespass, for 
 which an action would lie against the owner of the vessel, unless 
 it was under exclusive control of a charterer, in whicli case the 
 action would be against him. But the owner of the private 
 wharf should first notify the public against using it, or he could 
 not probably recover more than nominal damages — not enough 
 to pay the expenses of a law suit. 
 
 2. The next house to mine discharges the water from the front 
 slope of the roof on a shed over a piazza, which in turn discharges the 
 combined droppings through a leader on the sidewalk, a few inches be- 
 yond the dividing line, the water therefrom flooding nearly half my 
 sidewalk. In cold weather it freezes, and my sidewalk is half covered 
 with ice from this source. Have I any remedy, and can I compel the 
 owner to divert the flow from my sidewalk, and in case of accident by 
 falling on the ice, who is responsible therefor ? 
 
 A. The maintenance of a leader or projection which casts 
 water from one person's building upon that of the land of his 
 neighbor, is a trespass, and the latter can compel its discontinu- 
 ance. In case of accident arising from the accumulation of ice 
 formed on the sidewalk, the numerous decisions imposing liability 
 upon the city, lead to the conclusion that the claim should be 
 primarily against the corporation. (Wallace v. !Mayor, etc., 2 
 Hilt., 440 ; Rechard v. Mayor, etc., 2 Daly, 243 ; Davenport v. 
 Euckman, 37 N. Y., 568 ; Morey v. City of Troy, 61 Barb., 580.) 
 
 TRUSTEES. 
 
 1. A & B are partners. A and wife and B and wife convey all 
 the partnership real estate to C, in trust to pay the partnership debts, 
 and to re-convey what remained after payment of the debts, there be- 
 ing no power of revocation expressed in the deeds from A and wife 
 and B and wife to C. C held the property about three weeks, and re- 
 conveyed the same to A and B. Then A and B on application to the 
 court, had D appointed as receiver, but C was not made a defendant in 
 the matter of appointing the receiver. The court was not aware that a 
 deed of trust had been made to C. Now, will a deed from D, the 
 receiver, pass a good title to the property, and did C, the trustee, have 
 a right to re-convey the property to A and B before executing the 
 trust ? Please quote authorities. 
 
 A. The rule of law is that where a trustee in such a case ac- 
 cepts the trust, he cannot surrender it or discharge himself of 
 it, without the consent of the cestui que trust or direction of the 
 
TRUSTEES. 
 
 541 
 
 court, unless there is a power to that effect given in the instru- 
 ment creating tlie trust. Sheppard v. M'Evers, 4 Johns, ch. 
 136 ; Lewin, Trusts, 457 ; Conger v. Halliday, 11 Paige, ch. 319 ; 
 Drane v. Gunter, 19 Ala., 731 ; Gilchrist v. Stevenson, 9 Barb., 
 9 ; Lalor, Real Estate, 195. 
 
 2. A trustee for the benefit of creditors, uses ten thousand dollars 
 of the trust fund in AVall street, and makes twenty thousand dollars 
 profit. To whom does this profit belong, the trustee or the creditors ? 
 
 A. " Trustees cannot make a profit from the trust fund com- 
 mitted to them, by using the money in any kind of trade or 
 speculation, nor in their own business ; nor can they put the 
 funds into the trade or business of another, under a stipulation 
 that they shall receive a bonus or other profit or advantage. In 
 all such cases, the trustees must account for every dollar received 
 from the use of the trust money, and they will be absolutely re- 
 sponsible for it if it is lost in any such transaction. By this rule, 
 trustees may be liable to great losses wliile they can receive no 
 profit ; and the rule is made thus stringent that trustees may 
 not be tempted from selfish motives to embark the trust fund 
 upon the chances of trade and speculation. " Again, " All per- 
 sons who stand in a fiduciary relation to others must account for 
 all the profit made upon money in their hands by reason of such 
 relation. " (Perry on Trusts, sec. 429 and 430.) 
 
 3. A, as trustee and executor of an estate, loans $5,000 to B, who 
 fails soon after. The Surrogate decides that A is responsible for the 
 money lost. After the account has been filed in the Surrogate's Court, 
 the legatees demand their money, but cannot get any satisfaction 
 from A, who has in the meantime transferred his real estate to his 
 son. Is this transfer legal, and cannot A be prosecuted for misappro- 
 priation of the funds ? What would be the best course for a legatee 
 who cannot afford to spend much money in this case ? 
 
 A. There is a sharp remedy for this case. On petition the 
 Surrogate may issue an attachment against the delinquent execu- 
 tor, and unless the latter can show that the transfer of his 
 property was in good faith, and he is now unable to pay the 
 legacy, he may be locked up. 
 
 4. A little boy came to this country 1 1 years ago and is now within 
 a month or two of his majority. His mother died IS years ago and 
 
542 
 
 TRUSTEES, 
 
 left him a few hundred pounds sterhng. The sum was intrusted to a 
 gentleman of means, and the woman's two brother. A and R, were at 
 her request appointed trustees. The boy now applies to his uncles, 
 reminding them of his coming birthday and asks for a settlement. 
 Trustee B says " I find that I was a minor at the time and am there- 
 fore out of court, " etc., and to make matters still worse he furnishes 
 the following information : A forged the signature of B, secured and 
 squandered the bulk of the money, and is now bankrupt and penni- 
 less. B is comfortably off, but is disposed to repudiate all Habijity. 
 The gentleman to whom the money was intrusted is also well to do. 
 Does the possession of A's signature and the forged signature of B 
 release said custodian from liability ? B having ceased to be a minor 
 and not having relinquished the said trust is he not liable ? 
 
 A. The payment to one of the trustees by the holder of the 
 fund is a payment to both, and the fact that one of the signatures 
 was forged will not render the custodian liable, if the other sig- 
 nature was genuine. 
 
 With respect to B's liability in the above case, we find author- 
 ity for the following propositions : 
 
 1. That infancy did not incapacitate him from being a 
 trustee. 
 
 2. That if a trustee is cognizant of any breach of trust com- 
 mitted by a co-trustee and conceals it, or does not immediately 
 take measures to protect the interest of the cestui que trust, he 
 will be deemed guilty of a breach of trust himself, and held an- 
 swerable for the consequences. (Tiffany &, Ballard's Law of 
 Trusts and Trustees, 552 ; Tyler on Infancy, 158 ; Carow v. 
 Mowett, 2 Edw. Ch., 57.) 
 
 Accordingly, that B seems to be liable, at least to some extent, 
 in the above case ; exactly ho^v far, it "would require further de- 
 tail of the facts to determine. 
 
 5. I have been appointed trustee under a will by the court. The 
 amount is small and the parties are poor. I therefore take this method 
 of obtaining some information in regard to a question that has arisen 
 concerning the trust. 1 am to invest the sum say, of $5,000 on bond 
 and mortgage on improved real estate, in New York or Brooklyn. 
 The interest to be paid a certain gentleman during his life, on his death 
 the principal to be equally divided between his children, James, Peter, 
 and Paul, or the survivor or survivors, that is to say, should James 
 and Peter die, Paul would get all of the principal. Now one of the 
 children who is suffering from consumption, wishes to get, say. $1,000 
 of the principal ; the father and all of the children are willing to sign 
 
USURY. 543 
 
 a receipt for the amount. Would I be justified in giving liira the 
 amount, and what form of receipt should I get to hold me harmless in 
 the matter ? 
 
 A. Wc would not advise our correspondent to make the de- 
 sired disposition of the funds without petitioning the court by 
 which he was appointed, and the investment of the funds or- 
 dered. Even with the consent of all the parties, the act might 
 be held to be a contempt of court. A petition should be pre- 
 sented, with the consent of the parties annexed, and an order 
 obtained. 
 
 6. Is it legal and the duty of a trustee lending gold or its market 
 equivalent, to stipulate that payment should be made in United States 
 gold coin of the present standard of weight and fineness or its market 
 equivalent, and thus protect the trust funds from that loss or deprecia- 
 tion which payment in lawful money (silver) may produce ? 
 
 A. It certainly would be legal and highly proper for the trus- 
 tee to make such a stipulation in the loans from the estate, if he 
 cherished any apprehensions of such a result. 
 
 7. Doe conveys land to Roe in trust (among other trusts) to use 
 one-fifth of the rents for Roe's own use ; to pay one-fifth of the rents 
 to Roe's wife for her own exclusive use ; and to pay one-fifth of the 
 rents to Doe annually during Doe's life. If there is nothing fatal in 
 the provisions of the trust not mentioned, would the trust be good ? 
 Can one take a title in trust for himself ? Can he for his wife ? 
 
 A. The trust would be good as to the wife. As to the grantor 
 it would be rather a legal than an equitable estate. As to the 
 grantee the interest could be held by him as against all claimants 
 but his creditors ; but it could hardly be called a trust. 
 
 USURY. 
 
 1 . A person sells a note which he has received in the regular course 
 of business to a broker, with his indorsement ; in case the maker of 
 the note fails, can the indorser plead usury, as he sold it at the rate of 
 15 per cent.? 
 
 A. A note which is once good in the hands of any holder, may 
 be sold thereafter at any rate of discount without incurring the 
 taint of usury. 
 
 2. A owes to B the sum of S300. B takes A's note at 60 days for 
 $325, being the principal and a bonus of $25. Is this paying usury, 
 and can A refuse to pay the note ? 
 
544 
 
 USURY. 
 
 A. This is a very plain case of usury. The debtor, A, can 
 refuse to pay the note on that account. Some men are rogues, 
 and the Usury hiw is operative only to give facilities to the dis- 
 honest, and not to })rotect the innocent. There is one very im- 
 portant thing to be remembered in such a case as the one above 
 described. Where the note is given for a pre-existing debt, the 
 note being void by this defence, the original claim may be revived. 
 A may prove to be a rogue, and refuse to pay that 8325 ; but if 
 he is solvent he can be made to pay that $300 which he owed 
 before he gave tlie note. 
 
 3, Section 5,198 of Revised Statutes of the United States provides 
 
 in case the greater rate of interest has been paid, the person to whom 
 it has been paid, or his legal representatives, may recover back in an 
 action, in the nature of an action of debt, twice the amount of the in- 
 terest thus paid," etc. 
 
 In a State where the legal rate is 6 per cent, and a national bank 
 receives 1 per cent., what amount could be recovered back in an action 
 (brought within two years) — 20 per cent, or 8 per cent.? In other 
 words, is the penalty for usury under the above section twice the 
 whole amount of the interest paid, or twice the amount of the excess 
 over legal interest ? 
 
 Have any decisions been given by our United States Supreme Court 
 on this point ? 
 
 A. The law is very clear and has never been disputed here. 
 Section 5,198 declares that "the taking, receiving, reserving, 
 or charging a rate of interest greater than is allowed by the pre- 
 ceding section, when knowingly done, shall be deemed a forfeiture 
 of the entire interest which the note, bill, or other evidence of 
 debt carries with it, or which has been agreed to be paid thereon. 
 In case a greater rate of interest has been paid, the person to 
 whom it has been paid, cr his legal representatives, may recover 
 back * * twice the amount of the interest thus paid." This 
 is in two parts: 1. Where there is agreement to pay a higher 
 than the legal rate, not yet paid, all interest is forfeited, and only 
 the principal can be recovered. 2. Where a higher than the 
 legal rate has been actually paid, twice the said payment, what- 
 ever it has been, may be sued for and recovered. In the case 
 above cited, where the national bank has received interest at the 
 rate of 10 per cent., twice the said sum so received may be re- 
 covered by suit at any time within two years. 
 
WAREHOUSE. 
 
 545 
 
 4. Would it be usury to charge 1 per cent, interest, 5 per cent, 
 commission, and ^ per cent, brokerage, in discounting commercial 
 paper ? 
 
 A. It is usury to charge the borrower anything, even the 
 smallest fraction, over six per cent, for the loan or forbearance 
 of money upon his own obligation. But the discounting of com- 
 mercial paper which is already a valid obligation against the 
 makers thereof, at any rate of interest with any charge for com- 
 mission and brokerage agreed upon, is not usurious. 
 
 5. Mass. — When money is hired for a specified time, and a note 
 given without interest, (the interest and usury being added to the note,) 
 and a written agreement given to pay two per cent a month interest 
 after maturity, can the note, the legal interest, and usury, or either of 
 them be collected, if secured by mortgage, under the laws of Massa- 
 chusetts ? 
 
 A. Any written contract for the loan or forbearance of money 
 in Massachusetts, between parties capable of making such con- 
 tracts, is valid, and may be enforced in the courts. Money is 
 free as potatoes in Ma:;sachusetts, capital flows thither, no poor 
 man is oppressed for want of a usury law, and everybody but the 
 swindler is satisfied. 
 
 WAREHOUSE. 
 
 1 . Property being delivered by transfer of warehouse receipt in- 
 dorsed blank, will the following notice, printed on invoice, be of any 
 avail, the certificate having been transferred to a third party for value 
 and without notice of claim stated by original holder ? While nomin- 
 ally sold for cash on delivery, and the seller has the right to demand 
 immediate payraent, the custom of the trade is to surrender the docu- 
 ments and the amount of invoice the following day. 
 
 Notice. — Terms of sale, cash on delivery, and the merchandise hereby billed 
 is not to be deemed and taken as delivered, nor title passed, until paid for with- 
 out regard to possession. 
 
 "John Jones, Consignee." 
 A. It has been settled in England, not without complaint and 
 criticism, that the assignment of documents there known as dock 
 warrants, warehouse warrants and certificates, does not amount 
 to a delivery of the property until the document lias been pre- 
 sented to and accepted by the warehouseman. Mr. Benjamin, 
 the eminent English barrister, and author of the text book on 
 Sales, considers it unfortunate that such a distinction has been 
 35 
 
546 
 
 WAREHOUSE. 
 
 drawn between this class of commercial papers and bills of 
 lading, the transfer of which is equivalent to the sale and deliv- 
 ery of the property, and it is quite possible that our American 
 courts, being free to follow or disregard the English authority, 
 may prefer to ado})t Mr. Benjamin's suggestion. Meanwhile, we 
 know of no adjudication by our courts on the exact point in- 
 volved. If it should be held, in accordance with the English rule, 
 Ih it the delivery of the property is not complete until the ware- 
 houseman has consented to hold it subject to the transferee's 
 order, then the vendor's lien, asserted in the notice, would hold 
 good, if enforced before delivery was thus completed, but we 
 think not otherwise. 
 
 2. A party places $7,000 of merchandise on storage and obtains a 
 loan of S5,000 on the same. The party has disappeared and no trace 
 of his whereabouts can be obtained ; the goods are perishable. Am 1 
 compelled to hold the goods for 12 months before I can dispose of 
 them to obtain the amount of loan ? 
 
 A. If the owner of the property cannot be found, and the 
 goods are perishable, the warehouseman should give notice by 
 advertisement and then make the best possible public sale of the 
 whole invoice, retaining the balance of the proceeds, if any, for 
 account of the depositor. 
 
 3. If goods landed and placed on any city wharf by a vessel pay- 
 ing regular wharfage remain on dock, and no notice to remove said 
 goods be served on the consignee, or attached to the goods, can any 
 charge for storage be collected after removal of goods ? 
 
 A. Chapter 320, laws of 1870, authorizes wharf owners or 
 lessees to collect 5 cents per ton on all goods, merchandise, or 
 material remaining on the pier, wharf, or bulkhead, for every day 
 after the expiration of the 24 hours from the time such goods 
 shall have been deposited thereon. It appears to make no dif- 
 ference whether the consignee has notice or not, and the charge 
 is in addition to the wharfage fees due from the vessel itself. 
 
 4<. Can a warehouseman who has taken goods on storage at usual 
 market rates, without special written contract or verbal agreement, 
 beyond rendering bills and receiving payment for deliveries at such 
 rates, advance prices on g0")ds remaining in store, by giving 30 days' 
 notice of such advance ? Is he obliged to store the goods at old rates 
 as long as they are left in warehouse ? 
 
WILLS. 
 
 547 
 
 A. A man who takes goods on storage, with no specification 
 as to time, has the right to raise the rates of storage on giving 
 notice to the owner, who must take the property away or pay the 
 new charge. 
 
 5. How long is a warehouseman required to keep goods before he 
 may legally sell them to pay charges for storage ? Is he not bound to 
 advertise a certain length of time for the owner ? Also, what course 
 ought he to pursue in case the goods are of little value and have been 
 unclaimed for several years ? 
 
 A. The safest, perhaps the only entirely safe way in such 
 cases, where no power of sale is reserved, according to the pre- 
 sent practice where collaterals are pledged, is to bring suit 
 against the owner for storage, and have the stuff sold on execu- 
 tion. The costs of the proceeding will be added to the judgment 
 and collected with it. Such a proceeding can be taken at any 
 time after storage is due. 
 
 WILLS. 
 
 1 , A dies leaving a will : attached to said will is a statement of 
 " advances" made to his children B, C, and D, " which are to be charged 
 to them on final distribution, and the sums so charged are in lieu of 
 ail accounts, notes, and indebtedness." Now B holds a receipt dated 
 about two years after the will was executed, which reads as follows : 
 
 " Received on settlement of all accounts between me and my son B, 
 
 up to one dollar in full. This does not include note against B 
 
 secured by mortgage. Signed A, June 1878." 
 
 Now is this receipt an offset against the " advance " in the statement 
 attached to will ? 
 
 A. Unless it can be shown that the advances were returned 
 or actually discharged by payment in the settlement referred to, 
 we do not think it would affect the charges attached to the will. 
 
 2, Ts by law a testator prohibited from leaving to a church more 
 than one-half of his or her property, when the testator has kindred 
 Uving after his or her death ? 
 
 A. The statutes of New York forbid any charitable bequest 
 of more than one-half part of the estate, after all debts arc paid, 
 where the testator has left living husband, wife, child, or parent. 
 
 3, A dies and leaves a will as follows : 
 
 I give and bequeath all my real estate to my sons James, John, and 
 Robert, respectively, to be divided in equal shares between them, to 
 them and their heirs forever. 
 
648 
 
 WILLS. 
 
 I order and ordain that my above named sons, or either of them, 
 dying without issue, shall give and bequeath his share aforesaid at his 
 option or choice to either of my remaining sons, or to their child or 
 children, or to any one of them, 
 
 I order and ordain that no part or parcel of my real estate shall be 
 sold without the written consent of all my above named sons. 
 
 Query : Is the bequest to the three sons a deed or gift to them in 
 fee giving them full and complete ownership ? Does the order that 
 they shall bequeath the property in a certain way debar them from 
 selling and make their interest a simple life estate ? In case a portion 
 of the undivided property be destroyed by fire, would two of the heirs 
 have the legal right to mortgage their share for the purpose of 
 rebuilding ? 
 
 A. " Conditions that are repugnant to the estate to which 
 they are annexed are absolutely void. Thus, if a testator, after 
 giving an estate in fee, proceeds to qualify the devise by a proviso 
 or condition which is of such nature as to be incompatible with 
 the absolute dominion and ownership, the condition is nugatory, 
 and the estate absolute." (Jarman on Wills, ii, 15.) In the 
 case of our correspondent the first clause conveys an estate in fee 
 simple, and the subsequent conditions are in our opinion repug- 
 nant and void. The devisees may therefore deal with it as their 
 absolute property, and a mortgage by two would cover and bind 
 their respective interests. 
 
 4. A man having no children wishes to will to his wife all his real 
 and personal property, mostly cash. He does not wish to limit her in 
 the use of the money, or even prevent her from selhng the real estate, 
 but at the same time he desires that at her death whatever be left 
 should revert to his and not to her relatives, as she had nothing of her 
 own before marrying. State whether he can so dispose, and how the 
 disposition should be worded, to prevent interference with the wife in 
 spending the money while living, and with his relatives in inheriting 
 what she leaves at her death. Also, she being named executrix, are 
 her rights in any way restricted by naming and appointing also an 
 executor ? 
 
 A. You may leave your property to your wife, both principal 
 and interest to her use, with remainder at her death to the heirs 
 desired. There might be a little restriction on unnecessary 
 waste in the appointment of an additional executor, but nothing, 
 perliay s, to which the widow would object. 
 
 5. Can a married man, having minor children, make a will leaving 
 his entire estate (personal only) to his wife ? In making her sole ex- 
 
WILLS. 
 
 549 
 
 ecutrix is it understood that no bonds shall be required, or must it be 
 so mentioned in the will ? 
 
 A. A will of the kind described can be legally made, and 
 tlioiigli perhaps not essential where the executrix is sole legatee, 
 it would be better to insert a direction in the will that bonds 
 shall not be required. 
 
 6. A will written by myself would be valid if simply witnessed by 
 my two sisters, who are not mentioned in it as receiving anything, or 
 must it also be acknowledged before a notary, or either or both, and is 
 one person sufficient to name to administer the will ? 
 
 A. Only two witnesses are necessary to a will in this State, 
 (N. Y.), while in some others tliree are required. The two sis- 
 ters would answer, but if the matter is of any importance, the 
 better selection is of persons outside the family. They must 
 sign in the presence of the testator and in each other's presence, 
 and at the testator's request, and these facts should be stated 
 above the signature. It is important that they certify that the 
 testator declared the document, when he signed it, to be his last 
 will and testament, and there is a penalty, in this State, if the 
 witnesses fail to affix their residences to their names. No notary 
 is required. 
 
 7. Is a will in a person's own handwriting legal without being sub- 
 scribed to by a witness ? 
 
 A. In this State, (N. Y.,) the statute restricts the right of 
 making nuncupative wills to sailors and soldiers in service and 
 in peril. All other wills must be signed by the testator and at 
 least two witnesses, in whose presence the testator must publish 
 and declare it to be his last will and testament. 
 
INDEX. 
 
 A 
 
 Assignment (See also Insolvency). 
 
 Ques. Page. 
 
 Compromise without surrender of notes 1 9 
 
 Creditor's right to compel foreclosure of mortgage as collateral, 2 9 
 
 " " " retain negotiable paper, .... 3 9 
 
 Unclaimed dividend in the hand of assignee, . . . . 4 10 
 
 When judgment precluded by, 5 10 
 
 Mich. — Elf ect of, on failure to file assignee's bond, . . . 6 10 
 
 Attachment. 
 
 Unearned wages not attachable, 1 11 
 
 What property attachable, ....... 2 11 
 
 Assignment of wages to creditor, , 3 12 
 
 R. 1. — Mariner's wages exempt until voyage completed, , , 4 12 
 
 B 
 
 Banks (National and State). 
 
 Checks, Drafts, and Notes. 
 
 Bank not required to hold note till close of banking hours before 
 
 protesting, .112 
 
 Cancelled check not returned to depositor, , . . . 2 12 
 
 Certified check charged to depositor's account, . . . 3 13 
 
 Certifying forged or raised checks 4 13 
 
 Decisions as to checks deposited in drawee bank, . . . 5 13 
 
 Drawee bank may sue and recover on raised check, . . . 6 14 
 
 Extent of liability of, for certification 7 15 
 
 Indorsement of check, " for deposit only," is guaranteed by, . 8 15 
 
 " " " may be required before certification, . 9 15 
 
 Liability of, on payment of check stopped by written notice, . 10 16 
 
 " " for directing payment of depositor's draft, . 11 16 
 
 " " on raised check, 12 16 
 
 " " for indorsement on check, 13 17 
 
 " " for loss of check, 14 18 
 
 *' " accepting notification stopping check, . . .15 18 
 
 Method of payment on check in excess of depositor's credit, . 16 18 
 
 Right to demand indorsement of holder of check, ... 17 20 
 
 " hold check a reasonable time for examination, . .18 20 
 
 " " refuse payment of check drawn against deposit of same day, 19 20 
 
 " " " " " " on notice of maker, . . ' 20 21 
 
 Steps to be taken by, on presentation of note past due, . .21 21 
 
 When payment of certified check can be refused, ... 22 22 
 
 Wortliless checks credited may be charged back, ... 23 22 
 
 C551) 
 
Collection. 
 
 Ques. Page. 
 
 Liability of, on accepting check instead of money, „ , . 25 23 
 
 Liability of, for deposit of draft for collection, .... 26 23 
 
 Time within which to collect drafts, 27 24 
 
 When liable for delay in collection, 28 24 
 
 Deposit and Depositors. 
 
 Action of, on failure of depositor, . . . . . 29 25 
 
 Depositor not entitled to interest, 30 25 
 
 Information by as to dejDositor's account, 31 26 
 
 Liability of, for cashier's guaranty and indorsement of depositor, 32 26 
 
 Not liable for failure to notice rejection of deposit, ... 33 26 
 
 Va. — Deposit an offset against note, on failure of bank, . . 34 27 
 
 Directors and StocJcholders. 
 
 Directors are not officers, 35 27 
 
 " of, may act as proxies for stockholders, . . .36 27 
 
 Duties and privileges of directors, 37 28 
 
 Liability of stockholders to depositors, 38 28 
 
 " " " 39 29 
 
 " " " transferring stock for assessment, . 40 29 
 " " " for deficit to extent of their stock, . 41 30 
 " " " on redaction of capital, . . .42 30 
 Prohibited from lending on their shares of stock, . . . 43 31 
 Stockholders may apply to department at Washington when in- 
 secure, 44 31 
 
 Transfer of stock, 45 31 
 
 When director is not allowed to vote, 46 32 
 
 Authorities applicable to, for usury, 47 32 
 
 Bank account attached by judgment creditors, .... 48 33 
 
 Miscellaneous. 
 
 Bank's right to demand bond of indemnity on loss of certificate 
 
 of deposit, 49 34 
 
 Judgment in hands of national, formerly state, valid, . . . 50 35 
 
 Law in regard to foreign banking capital, .... 51 35 
 
 Liability of, for outside transactions, 52 36 
 
 " " " sale of worthless bonds, 53 37 
 
 " " " payment on circular letter of credit without in- 
 dorsing it, 54 37 
 
 " " money sent on forged telegram, .... 55 38 
 
 " " cashier's acts, 56 38 
 
 Method of computing time on loans, ...... 57 39 
 
 Penalty for charging more than legal rate of interest, . . .58 39 
 
 u u u . 59 39 
 
 Rate of United States bonds on returns for internal revenue, , 00 40 
 
 Reduction of capital, . . . . . . . .61 40 
 
 Refusal of, on telegraph order, 62 40 
 
 " " to honor certificate of deposit, 63 41 
 
 Removal of suit from state to federal court, .... 64 42 
 
 Right of, under bank act to become surety on municipal bonds, 65 42 
 
 " " to issue or obtain letters of credit, . . . .66 42 
 " to reduce rate of interest on certificate of deposit payable 
 
 on demand, 07 43 
 
 When not responsible for cashier's breach of trust, . . 68 43 
 
INDEX. 
 
 553 
 
 Savings Banks. 
 
 Qnes. Page. 
 
 Loss of pass book, - . ^ , 69 43 
 
 Not liable to depositor for payment to finder of bank Dook^ c 70 44 
 
 Relusal to pay note payable at, c 71 44 
 
 Restrictions of, as to interest and dividends, . . » = 72 44 
 
 Time within which receiver of, to account, ... o 73 44 
 
 Trustees, removal of, . , . . . o . ^ 73 44 
 
 " elected by the board to fill vacancies, . :> = 74 45 
 
 Verbal notice sufiicient to withdraw under 60 days clause, . 75 45 
 
 Mass. — Officers of, cannot borrow money from, . , . 76 45 
 
 Bills of Exchange (See also Drafts). 
 
 Acceptor liable for payment, 1 46 
 
 Bill of lading attached to, must be delivered, on acceptance of, 2 47 
 
 Documentary, may be paid by third party, on consent of holder, 3 47 
 
 Drawee of. refusing to accept, property of surety attachable, . 4 47 
 " " may accept and pay, although notified of death of 
 
 drawer, ......... 5 48 
 
 Drawer's liability to pay for collection, . , . . 6 48 
 Drawer and endorser successively liable, notice being given, . 7 48 
 liable to innocent holder, on failure of previous purchas- 
 er of, to remit, ..o ....<>. 8 49 
 
 Law regulating acceptance of, ....... 9 49 
 
 Method of payment, &c., of, „ ... .o. 10 50 
 
 " " settling rate of, = 11 50 
 Right to refuse acceptance of, without stamps when required by 
 
 law of foreign country, . . . . c » .12 51 
 
 Time allowed for presentation of, for acceptance, . . .13 51 
 
 What constitutes, ........ o 14 51 
 
 When draft, with bill of lading attached, is lost, . c . 15 53 
 
 " drawer and drawee fail, 16 52 
 
 With clause " in case of need," . . . . o • o 17 52 
 
 Bills of Ladlng. 
 
 Day of signing of, date of shipment, . , o . • i 52 
 
 . . . o . o 2 53 
 Designation of quantity, by " more or less," .... 3 53 
 Drawer of bill of exchange liable on failure of acceptor al- 
 though documents attached have been delivered, . . 4 53 
 Efi"ect of indorsement without recourse," o » . . 5 54 
 " . . „ „ 6 55 
 How to obtain, when shipping receipt lost, . . = c 7 55 
 In absence of instructions b. of 1. maybe surrendered on accept- 
 ance of draft, . o . 8 55 
 
 Liability of vessel, on fraudulent, . . . . o . 9 55 
 
 Master of vessel obliged to sign, c o .... 10 56 
 
 Meaning of " primage and average," 11 56 
 
 Owner may require shipper to prepare, 12 56 
 
 Rate of exchange on foreign, o . . o . . . i3 57 
 
 Responsibility of indorser of, ....... 14 57 
 
 Ship may demand, on delivery of cargo, 15 57 
 
 " " " 16 57 
 
 Signed before delivery of goods, not binding on vessel, , .17 58 
 
 When captain may refuse to sign, on sub-charter, . . » 18 58 
 
 When signed before delivery, 19 59 
 
554 
 
 INDEX. 
 
 Ques, Page. 
 
 Book Keeping (See also Settlement op Accounts), 
 
 Contribution of note by one partner, when articles require cash, 1 60 
 
 Distribution of profits in association, divided into series, . 2 61 
 
 iMethod of taking stock, . o . . , . , 3 63 
 
 Trial balance, merchandise acc't showing balance on credit side, 4 63 
 
 Brokers and Brokerage. 
 
 Brokerage fixed by usage, . . = o . . 1 63 
 
 " on goods in and out of bond, . o . ^ ^ 2 63 
 
 Commission earned, although an allowance made on sale, = 3 63 
 
 " " when property offered for sale, is voased^ 4 63 
 
 " by Olio of several, who perfects the contract, 5 64 
 
 4( (( C5 U it U U ^ 
 
 " although goods sold ^' to arrive" not deliv- 
 ered, . , . 7 65 
 
 ** " by real estate broker, on refusal of seller to 
 
 contract, , . „ o o 9 65 
 " " although goods sold for account of under- 
 writers, . c . „ o 10 66 
 " " when instrumental in letting premises, □ 11 66 
 " of, not considered profit, on a joint speculation, o 13 66 
 " to, does not make loan usurious, . c c <> 13 67 
 Customer entitled to benefit of purchase at a lower figure, o 14 67 
 Is the agent of the party by whom originally emjDloyed, „ o 15 67 
 
 Liability of note broker, o o 16 68 
 
 " for sale of exchange, c o . . = . . 17 68 
 " " " forged note, . . o . . ^ 18 68 
 " of, for sale against instructions, , . , o 19 69 
 Not responsible to seller, purchaser declining on account of mis- 
 carried telegram, o = . o . , . . 20 69 
 Payment to, entrusted with delivery of bills of exchange, .21 70 
 Purchaser's claim against assignee for undelivered stock, . . 23 70 
 When IjrokeragG not earned, . . , „ . . » 23 71 
 
 . o ..... 24 71 
 
 " principals not bound by the action of their brokers, . 25 71 
 
 " selling is limited, .. c ..... 26 71 
 
 " sub-broker not entitled to commission, .... 27 73 
 
 c 
 
 Carriers (Common). 
 Agents not obliged to insure shipper's cargo, unless by agree- 
 ment, . o . o ....... 1 72 
 
 Commuter without his ticket, obliged to pay full fare, . . 2 73 
 
 Contents of cargo should be stated on receipt, . . c . 3 73 
 
 Delivery of goods by steamer regulated by custom, . . . 4 73 
 
 Express Co. obliged to deliver to person named as consignee, . 5 73 
 
 " Co's right for extra charge, ...... 6 74 
 
 Liability of R. II. Co. for delay in notifying owners on loss of 
 
 goods, 7 74 
 
 " " " " u u a a u g i^f^ 
 
 " " until delivered, or reasonable notice to consignee, 9 75 
 
 *' for shortage of goods, while in its custody, . .10 75 
 
 " for mistake in delivery, 11 76 
 
INDEX. 555 
 
 Ques. Page. 
 
 Liability of vessel, on deliveiy of goods, w itlioiit production of 
 
 bill of lading, / 12 76 
 
 a a " for miscarriage of goods, 13 77 
 
 " " for goods damaLTcd or lost, on through bill of lad- 
 ing over different roads, .... 14 77 
 
 " " u u u a u u u u (( u 25 77 
 
 " " on refusal to deliver goods overcharged for freight, IG 78 
 
 " " carriers by water, 17 78 
 
 " may be limited to amount in receipt, ... 18 70 
 
 " " distinguished, 19 79 
 
 Liable in damages, for delay in delivery, .... 20 79 
 
 Limitation of liability by, . . . " 21 79 
 
 Loss of goods in transitu on lighter, 22 80 
 
 Market price must be paid for goods lost, .... 23 80 
 Not liable for damage by fire or collision, without negligence, . 24 80 
 " " " prospective profits on goods lost, ... 25 80 
 " when shipment of goods contracted for, is prohib- 
 ited, 2G 81 
 
 Passenger must comply with conditions on ticket, . . .27 81 
 
 a u u u " " . . . 28 82 
 
 R. R, Co., compelled to furnish passengers with seats, . . 29 82 
 " selling several tickets to one passenger only obliged 
 
 to furnish one seat, 30 82 
 
 " not liable for goods temporarily out of its custody, . 31 82 
 
 Right of. to demand surrender of bill of lading, . . . 16 57 
 
 Ship liable for goods negligently damaged by water, . . 32 83 
 
 u u u u u u u ^ ^ 33 g3 
 
 Shipper liable for extra freight and damages, for shipping by 
 
 wrong line, ' . 34 83 
 
 " " to, for misrepresenting class of freight, . . 35 84 
 
 Vessel liable to shipper for unwarrantable delay, ... 36 84 
 
 u a u u . . . 37 84 
 
 When consignee liable to, for storage, 38 85 
 
 " " for package lost, 39 85 
 
 liable for damage to freight, 40 86 
 
 " " u u u 42 
 
 *' " " goods destroyed on deck, .... 42 86 
 
 " " as warehousemen, 43 87 
 
 Checks. 
 
 Certification. 
 
 Authorities citing responsibilities oi parties on raised checks, 
 
 before and after certification, 1 89 
 
 Bank may require indorsement before certification, . . 9 15 
 
 Liability of bank on certification of, 7 15 
 
 " drawer and holder after certification of, . . 2 90 
 
 t« « u tk u u tfc u 3 
 
 Refusal by bank to certify when indorser unknown, . . 4 90 
 
 " " " " honor certified, 5 91 
 
 Forged,, Raised,, and Lost. 
 
 Altered amount of, can be recovered from payee, ... 6 91 
 
 Drawee bank may sue and recover on raised 6 14 
 
 Drawer liable to innocent holder, when indorsed in blank and lost, 7 91 
 
 ^ 't *t tc u a u i( u g Q.-) 
 
55G ^NDEX. 
 
 Ques. Page. 
 
 Drawer not liable for forged signature, 9 93 
 
 Liability of bank for loss of, 14 18 
 
 ' " *' on raised 12 16 
 
 " drawee, when indorsement forged, . . .10 92 
 
 " " " " " " . . . o 11 92 
 
 " " payee on loss of, 12 93 
 
 Method of securing duplicate on loss of, 13 93 
 
 " " U U U 93 
 
 Protection of drawer of original and duplicate, ... 15 94 
 
 When drawer may issue duplicate, without bond of indemnity, 16 94 
 
 " indorsement is forged, 17 94 
 
 Indoi'sement. 
 
 Bank may refuse payment of, for irregular indorsement, . .18 95 
 
 Extent of liability of indorser, 19 95 
 
 Guaranty of last indorser, 20 95 
 
 Holder of, not required to indorse, when previously indorsed in 
 
 blank, 17 20 
 
 Indorsement, "in full for all demands" is surplusage, . . 21 96 
 
 Length of time of indorsees liability, 22 96 
 
 Liability of bank for indorsements, 13 17 
 
 " " " " correct indorsements, .... 23 96 
 
 " indorser of, 24 96 
 
 " " last indorser for correctness of prior indorsements, 13 17 
 " " maker for issuing worthless check, indorser of same 
 
 liable for payment, 25 97 
 
 No indorsement required when drawn to bearer, ... 26 97 
 
 Proper indorsement on, 27 98 
 
 Restrictive indorsement, 28 98 
 
 Miscellaneous. 
 
 Absence of name " to order," 29 98 
 
 Amount in figures, differing from amount in body, . . 30 99 
 Bank may require identification when payable to bearer and 
 
 indorsed, " .... 31 99 
 
 Bank's right to hold check a reasonable time for examination, 18 20 
 
 Bank will honor check, altered by drawer, .... 32 100 
 
 Date may be supplied when omitted from, . . . .33 100 
 
 Dated on Sunday, payment cannot be refused, ... 34 101 
 
 Death of drawer of, does not invalidate, .... 35 101 
 
 Debtor remitting check, liable until collected, .... 36 101 
 
 Definition of the term "check," 37 101 
 
 Drawer's account chargeable at maturity of post-dated, . .38 102 
 
 Drawer stopping payment of, liable to innocent holder, . , 39 102 
 
 " " " " " " " " . . 40 102 
 
 " u u (( u a a (( ^ 42 102 
 
 Drawer of not criminally liable for issuing check, when account 
 
 is overdrawn, 42 103 
 
 Drawer's right to stop payment, 43 103 
 
 Drawn to own order, 44 103 
 
 Liability of bank for payment of, stopped by written notice, 10 16 
 
 " " drawer for protest fees on post-dated, . . .45 104 
 
 Method of payment of, in excess of drawer's deposits, . .16 18 
 
 Payable in " current funds", 46 104 
 
 " on a certain day, is without grace, .... 47 104 
 
 " to bearer and post-dated is negotiable, . . .48 104 
 
INDEX. 
 
 557 
 
 Ques. Page. 
 
 Payee of, must comply with terms of check, when " payable 
 
 through clearing-house," . . o = , c .49 105 
 
 Payee not liable on payment of, account being overdrawn, «, 50 105 
 
 of, a right to lill in accidental blanks, .... 51 105 
 
 Time within which to present, to hold drawer, . o .52 106 
 
 " " " " " " o o . . 53 106 
 
 When worthless check is given in payment, . o o . 54 107 
 
 City Authorities. 
 
 Extent of liability for municipal bonds, o o . . , 1 107 
 
 Health Board, duties of, , . . ^ . . o . 2 108 
 
 Liability for damage by rioters, . . . o , » 3 108 
 
 Coin, Weights and Measures. 
 
 Coin. 
 
 Conversion of bullion into foreign coin by a citizen, . , 1 109 
 
 Mutilation of, punishable by U, S. statute, . . . . 2 109 
 
 Weights and Measures, 
 
 Chinese, . • , . . 3 109 
 
 Kilogramme, 4 109 
 
 Number of pounds to the ton, 5 no 
 
 Collaterals. (See also Loans.) 
 
 Application of several, on failure of maker of note, . . 1 110 
 
 Assignment of, by pledgor, 2 110 
 
 Creditors paying off loan, can recover, 3 m 
 
 Degree of care varies, 4 \\\ 
 
 Disposal of, when unredeemed, 5 112 
 
 Liability of holder for safe keeping of, • .... 6 112 
 
 Offset of, against other indebtedness, 7 112 
 
 Transfer of stock, not customary, 8 113 
 
 Unrecorded mortgage as, 9 114 
 
 When loss of, will fall on original owner, . . , .10 114 
 
 Collection. 
 
 Bank accepting check in payment of, 1 114 
 
 " entitled to make reasonable charge for, . . . . 2 114 
 
 " liable for acts of its agent, 3 115 
 
 " " " accepting check instead of money, ... 25 23 
 
 " " on delivery of bill of lading, before payment of draft, 4 115 
 
 u u a u u (( li u u a n u ^ 
 
 " " to depositor if negligent, 6 118 
 
 " may accept part payment, 7 us 
 
 " not liable for delay in returning unpaid draft, . . 8 119 
 
 " " " on failure of agent, 9 119 
 
 " receiving certified check in payment of, before suspension, 10 119 
 " right to charge back a collection credited, . . .11 120 
 Banker not criminally liable on failure to remit proceeds of, . 12 120 
 Collector entitled to commission on amounts personally col- 
 lected only, in absence of agreement, .... 13 121 
 Creditor shares with others, on failure of bank after collecting draft 14 121 
 
 u U U . U U u J5 J21 
 
 u " u u u u u u u u a |g jf)2 
 
 Draft with "no protest" for, and accepted, cannot be protested 
 
 for non-payment, 17 122 
 
INDEX. 
 
 0,11 es. Page. 
 
 Drawee cannot refuse payment, on account of printed indorsement, 18 123 
 
 Drawee must paj' exchange, . , o : . . , 19 123 
 
 Drawer liable for charges, o c . o . 6 48 
 
 Duty of agent to present note on failure of bank, . , . 20 123 
 
 Failure to protest, . . c . c . . . . 21 123 
 
 Right of agent to limit his liability by contract, . » . 22 124 
 
 Unmatured draft can be stopped on failure of collector, . 23 124 
 When aireuts authorized to send proceeds in bill of exchange 
 
 are liable, , , . , = . o , . , 24 124 
 When a remittance for, made by mistake, . » c o 25 125 
 " bank liable for, . o . c o . . o 26 125 
 " collecting bank liable for loss, » . . „ 27 125 
 " no protest " written on face of draft, no fees can be col- 
 lected, . o c o . 28 126 
 
 Commercial Terms. 
 
 Alongside, . > . . 
 Average bond. 
 Bill of exchange. 
 Carload, . . <, » . 
 Cash— net cash — prompt cash, 
 
 -line — bracket of tea, 
 
 Check, 
 
 Chop — invoice- 
 Draft, . . , . 
 
 " at sight — on demand, 
 Failure and suspension, 
 Finland ton and Finland last, 
 Flat and and interest, 
 F. O. B.— C. F. L, 
 For every day or part of day, 
 General average, 
 Law merchant. 
 Limited, .... 
 
 " partnership, 
 Loan on call, . . , 
 More or less. 
 
 Preferred and common stock, 
 Promissory note. 
 Primage and average, 
 Put — call — spread, 
 Quintal, .... 
 Total loss. 
 Warehouse receipt. 
 Working days in charter party, 
 
 Consignment and Commission Accounts. 
 
 Consignee. 
 
 Agent invoicing in his own name, liable to purchaser. 
 Agent's liability in England, ...... 
 
 Agent no redress for sales to his customers by consignor, . 
 Cash discounts to be deducted, before commission charged, 
 Commission earned when goods destroyed by fire — insured, 
 " " on sub-consignment by consignee, 
 
INDEX. 
 
 551) 
 
 ~ Qnes. Page. 
 
 Commission earned on death of consignee, . . . . 8 I'dS 
 
 *' " by consignee, although sold by consignor, . 9 138 
 
 " on goods, in and out of bond, . . . 2 63 
 Consignee can recover expenses and prospective profits on breach 
 
 of contract, 10 138 
 
 " liable after expiration, of contract, for guaranty, . 11 139 
 
 " " for sub-consignment without authority, . . 12 139 
 
 " " gross neglect of instructions, ... 13 139 
 
 " " " selling to irresponsible party, ... 14 140 
 
 " " " hypothecation, . . . . . .15 140 
 
 " not liable for loss by fire not covered by insurance, . 16 141 
 
 U u U u u u u a u _ 
 
 (4 u (( u a u u a a a o 18 141 
 
 " " " on advances returned by order of consign- 
 or, ....... 19 142 
 
 " " " for not insuring without instructions, . 20 142 
 
 " " " in absence of carelessness, .... 21 142 
 
 " of liquors, must obtain license, .... 22 143 
 
 " no lien on property pledged by agent without author- 
 ity, . / . 23 143 
 
 Consignee's right to sell at market price, when no limit fixed, . 24 143 
 
 " hypothecate „ . 25 143 
 
 Consignee subject to authority of consignor's assignee, . . 26 144 
 
 Degree of care imposed on agents, 27 144 
 
 Draft against sales may be refused, when proceeds do not cover 
 
 indebtedness, ......... 2o 145 
 
 Duties of commission agent as to delivery and price of goods, . 29 145 
 Insolvency of consignee, does not deprive him of commission 
 
 on guaranty, . = » ,o .... 30 1.46 
 
 Rates of commission on portion of goods withdrawn, , CI 146 
 
 Returns to be made at actual sellmg price, , » c . 32 147 
 
 What commission earned, on dissolution of consignees, o c 33 147 
 
 When consignee may hypothecate goods, . » ^ . 34 147 
 
 " " as charter party not liable for damage, . . 35 148 
 
 " " failing to pay consignor is not criminally liable, 66 149 
 
 " notes between consignee and consignor may be offset, 37 C49 
 
 Consignor^ 
 
 Adjustment of profits on joint account by three parties, contin- 
 ued by two, ..00.. 38 "ix9 
 
 Consigned goods cannot be seized for other debts than .eai es- 
 tate taxes, ..... c o . 39 '.50 
 
 Consignor': right to property on consignee''^ assignment, . 40 L50 
 
 Customary charges for commission on goods transferred, 41 ^o'C 
 
 ,c 42 -^51 
 
 Owner liable for claims on goods, . . o . . : 43 151 
 
 Position of consignor on failure of consignee, , . . .44 151 
 
 Purchaser liable for additional duty on import order, . , 45 152 
 
 Title to goods remains m consignor until sold, . ... 46 152 
 
 Contracts. 
 
 Conflicting offers mailed, when closed, = . = . . 1 1>2 
 
 " u 4t u 2 15;} 
 
 Contractee not liable to contractor for extra work, caused by in- 
 evitable accident, „ ^ 3 153 
 
5G0 
 
 INDEX. 
 
 Quee. Page. 
 
 Effect of verbal, c c . 4 154 
 
 Goods not shipped on time under, may be rejected, . - . 5 154 
 
 Material held until charges paid, • . • . . 6 155 
 
 Made on Sunday, . « . . . ... 7 155 
 
 What constitutes acceptance of, ...... 8 156 
 
 When verbal contracts are void, . . . , • . 9 156 
 
 Corporations. 
 Directors, Officers, and Stockholders. 
 
 Law in regard to residence of officers and deposit of books, . 1 156 
 
 Liability of directors, bond and stockholders, . . . . 2 157 
 
 u a u u u u .... 3 157 
 
 " " trustees, company having defaulted, when without 
 
 the State, 4 157 
 
 " " " neglecting to file statement, statute of lim- 
 itation having run, . . . . 4 158 
 Officer or notary of, cannot take its acknowledgments, . . 5 158 
 
 President of, may convey property, 6 158 
 
 Publication of names of directors not required by law, . . 7 159 
 
 Removal of officers before expiration of term, , . . 8 159 
 
 Stockholders not liable for debts of, after disposal of shares, . 9 160 
 
 " a u u u a u a u u ^ 160 
 
 Stockholders of a joint stock company, not individually liable, 41 30 
 
 " right to examine books, . o . c .11 161 
 
 " vote on pledged stock, . o . . . 12 161 
 Terms of office of first trustees — annual meetings, inspection ol 
 
 stock-register, = . . . . . . o 13 162 
 
 Trustee'^ right to vote on unsold shares, 14 163 
 
 E. Z— Liability of stockholder and directors, . . . .15 163 
 
 (7^— Limited liability act, ;t6 164 
 
 J. — Stockholders right to examine books, , o . . l7 164 
 
 N. C. — Liability of officers of chartered, unorganized, o . 18 165 
 
 Ohio. — " " stockholder on assigned stock, . . 19 166 
 
 W Vac — Rightc of members of building associations, . . 20 166 
 
 Miscdlaneous. 
 
 Before receiving charter, members liable for its debts, o . 21 167 
 Dissolution of, effected bv order of court or surrender of char- 
 ter, . . *^ . , . , o . . . 22 167 
 Guaranty oi R. R. Co. for bonds of another, .... 23 168 
 Method of obtaining new certificates of stock, on loss of old, . 24 168 
 Not liable for interest on unpaid coupons, . . . , . 25 168 
 R. R. CoVj right to take lands hecessary, by act of law, . 26 169 
 Relation between holders of convertible and consolidated bonds, 27 169 
 Representation by proxy to decide quorum, . . o .28 169 
 Use of, for advertising, by private persons, » , r .29 170 
 
 Custom-house and Post Office. 
 
 Custom-Twuse. 
 
 Appraisement conclusive unless appealed from, o p . 1 170 
 
 Duty not collected on goods in bond, stolen, . c 2 170 
 
 Empty casks withdrawn from bond subject to duty, » 3 171 
 
 Entry must be made by original consignee, » . . 4 171 
 
 Goods to be invoiced at cost, but not less than market price, . 5 171 
 
 i( a i{ a n it n u u u n ^' . 6 171 
 
INDEX. 561 
 
 Qnes. Page. 
 
 Government not responsible for goods in its custody, . . 7 172 
 
 Laws of, on clearance of goods shipped on vessel, ... 8 172 
 
 No duty collected on goods in bond, destroyed by fire, . . 9 173 
 
 u u u u a u u u u a ^ ^ 
 
 What personal effects exempt from duty, 11 173 
 
 " steps to be taken, when rate of duty is in dispute, . . 12 174 
 
 Post Office. 
 
 Mailed letter may be recovered by order of court orproof by fac- 
 simile, 13 174 
 
 JMethod of obtaining duplicate money order, when lost, . .14 175 
 
 D 
 Debts. 
 
 Creditor cannot sell debtor's seat in Stock exchange, . . 1 175 
 
 Creditors option, when secured by collaterals, . . , . 2 175 
 
 Liability of former owner of vessel, for debts prior to sale, . 3 176 
 
 Money lost at cards, not collectible, 4 177 
 
 Proof of debt in another State, by certificate of notary, sufficient 
 
 in most States, 5 177 
 
 What debts cannot be offset, 6 177 
 
 " is not a legal tender, 7 177 
 
 When collateral is good against creditors, . . . , 8 177 
 
 " debtor's assurance to pay, is not a misrepresentation, . 9 178 
 
 Fla. — Interest on open accounts, . . . . . .10 178 
 
 Deeds. 
 
 By wife, of her separate estate, without husband joining, . . 1 179 
 
 Containing lease for life, is a covenant running with the land, . 2 179 
 
 Delivered in escrow, . 3 179 
 
 Drawn in New York, conveying property in Indiana, . . 4 180 
 
 Grantee's liability for note, given as consideration, . . . 5 180 
 Grantee not entitled to insurance in case of loss, before delivery 
 
 of, 6 180 
 
 Grantor's priority over mortgage of grantee, . . . . 7 181 
 
 Husband of heir need not join, 8 181 
 
 May be recorded after death of grantor, . . , , o 9 181 
 
 Record necessary to give prioritj', 10 182 
 
 Divorce. 
 
 Dower cut off by, o 1 182 
 
 Effect of decree forbidding re-marriage of guilty party, . . 2 182 
 
 Imprisonment for four years no ground for, . . . . 3 184 
 
 S. C— Law of, 4 184 
 
 Drafts (See also Bills op Exchange). 
 
 Acce'ptance. 
 
 Acceptance of, bill of lading attached, without instructions, . 1 185 
 
 " " by one of a firm 2 185 
 
 " " protested draft excludes costs, . . . . 3 186 
 " " under a wrong name and when drawee is not 
 
 found, 4 186 
 
 Acceptor may retain letter of credit on acceptance of, . . 5 186 
 
 " of, liable, although overdue, 6 186 
 
 " " " if in hand of bona fide holder, ... 7 187 
 
 a u (I K 4( (( (( u g j^g>ji 
 
 36 
 
562 lyPEX. 
 
 Qnes. Page. 
 
 Drawee's demand for bill of lading on acceptance of, . . 9 187 
 
 Drawer's riuht of action against acceptor, 10 188 
 
 Law regulating acceptance of, 9 49 
 
 Presentation of payable afterdate for acceptance, op- 
 tional 11 188 
 
 Time allowed within which to accept, 12 188 
 
 " 13 189 
 
 When holder not justified to protest for non-acceptance, . . 14 190 
 
 Drawee. 
 
 Drawee bound to follow instructions of drawer, ... 15 190 
 not liable for exchange, on change of holder's residence, 16 191 
 Liability of drawee for protest fees, when office closed on semi- 
 legal holiday, 17 191 
 
 Liability of drawee to payee, 18 192 
 
 When drawee has 24 hours in which to pay sight draft, . . 19 192 
 
 " " liable for non-acceptance, 20 192 
 
 " " not liable to holder — rule as to damages, . 21 193 
 
 Indorsement. 
 
 Collector of, liable to refund on irregular indorsement, . . 22 193 
 
 Indorsed by minor, 23 194 
 
 Unnecessary to add " or order" to indorsement, ... 24 194 
 
 Miscellaneous. 
 
 At sight — on demand, 37 101 
 
 Definition of the term " draft," 13 189 
 
 Grace on sight draft forbidden by statute, . . . .25 194 
 
 Holder may fill in blanks of, 26 195 
 
 of, neglecting to collect or protest, relieves draAver, . 27 195 
 
 Issue of duplicate, on loss of original, 28 195 
 
 Must be protested where made payable, . . . . .29 195 
 
 Presentation of, cannot be made on a religious holiday, . . 30 196 
 
 Protested for non-acceptance, need not be presented for payment, 31 198 
 
 Protest necessary, when bill of lading attached, ... 32 199 
 
 Revenue stamps necessary, wlien drawn on banks or bankers, 33 199 
 
 Sight draft, post-dated, cannot be protested before date, . 34 199 
 
 Steps to be taken by drawer, on raised draft, . . . .35 199 
 
 What states allow grace on sight dralts, .... 36 200 
 
 When bank liable for its concession on 13 189 
 
 When drawer cannot charge protest fees to drawee, ... 37 200 
 
 " " is released by act of payee, 38 200 
 
 Payment. 
 
 Draft must be presented where made payable 39 201 
 
 Drawn to own order, indorsement omitted, when presented for 
 
 payment, 40 201 
 
 Drawer and indorser respectively liable to holder, on non-payment, 41 201 
 
 Holder liable, not presenting in time, 42 202 
 
 Must be presented at residence or place of business before protesting, 43 202 
 
 Notary need only accept legal tender on presentation of, . 44 203 
 
 Payee liable, on payment of forged, without guaranty of signature, 45 203 
 
 Payment of, in legal tender only, in absence of agreement, . 46 203 
 
 " " may be required in legal tender or certified check, 47 204 
 
 Kate of exchange is fixed on day of presentation of past due, 48 204 
 
 Surrender of, properly indorsed, is full receipt, ... 49 204 
 
IXDEX. 
 
 563 
 
 When foreign draft is paid in foreign exchange after close of mail 
 
 " grace is disallowed, 
 
 " ijayment may be stopped by drawer, 
 
 Ala. — Drawee to accept or pay, what time allowed for consider- 
 ation, 
 
 3fass. — Sight drafts carry grace, 
 
 0?ii(?. — Days of grace, on one day's sight. 
 
 Ques. 
 50 
 
 Employeu and Employee — (See Principal and AoE^iT), 
 Executions — (See Judgments). 
 
 Executors and Administrators. 
 
 Administrator can sue and set up counterclaims, 
 " does not control realty, 
 
 " must obtain order of court to obtain realty 
 
 Advertisement for claims against estate, . 
 Appointment of administrator, on refusal of widow, 
 Cannot sell liquors without license, .... 
 Commission paid from the principal of the estate, . 
 
 Duties of executors, 
 
 Executor as heir, must account for rents and profits of premises 
 
 partly devised to and occupied by him, 
 Executor bound by indorsement on subscription of testator, 
 
 can only claim property possessed by testator at his 
 
 death, 
 
 " compelled to pay legacy at the time stated in will, 
 " liable for loaning on note, 
 
 (4 U U 
 
 " may require physician to tender bill of items, . 
 
 " purchasing U. S. Bonds, should have them issued in 
 the name of the estate, 
 Executor's right to sell testator's interest in i)artnership. 
 Executor to account yearly to heirs, .... 
 
 Extent of responsibility of, 
 
 Fees allowed to executor, 
 
 Liability of administrator, ..... 
 Liable to pay joint note of decedent, 
 !Method of signing instruments, .... 
 
 lyiust be of age, to act, 
 
 Protected by order of Surrogate to advertise for claims, against 
 
 estate, 
 
 Rate of interest required on investment, . 
 Right of administrator to sell land taking purchase money 
 
 mortgage, 
 
 Time within to settle estate, 
 
 When a non-resident executor need not give bonds, 
 
 executors need not account, 
 
 " distribution by administrator can be made, . 
 Ilh. — Time within which, and manner to settle, 
 Md. — Commission of, and time within which to render account 
 K.J. — Liability of executor for trust funds, 
 
 Time within which to settle 
 
 Va.— " u a u 
 
 1 
 
 207 
 
 2 
 
 208 
 
 3 
 
 208 
 
 4 
 
 209 
 
 5 
 
 209 
 
 D 
 
 
 7 
 
 210 
 
 8 
 
 210 
 
 9 
 
 210 
 
 10 
 
 211 
 
 11 
 
 211 
 
 12 
 
 211 
 
 13 
 
 212 
 
 U 
 
 212 
 
 15 
 
 213 
 
 16 
 
 214 
 
 65 
 
 411 
 
 17 
 
 214 
 
 18 
 
 215 
 
 19 
 
 215 
 
 20 
 
 215 
 
 21 
 
 215 
 
 22 
 
 216 
 
 23 
 
 216 
 
 24 
 
 216 
 
 25 
 
 217 
 
 26 
 
 217 
 
 27 
 
 217 
 
 28 
 
 218 
 
 29 
 
 218 
 
 30 
 
 218 
 
 31 
 
 219 
 
 32 
 
 219 
 
 33 
 
 220 
 
 34 
 
 220 
 
 35 
 
 221 
 
564 
 
 INDEX. 
 
 Exports and Imports. 
 
 Ques. Page. 
 
 Calculation of profits on imports, 1 221 
 
 Seller not liable to exporter for excess of duty, on over-state- 
 ment of weight, 2 221 
 
 When seller liable for goods deliverable against letter of credit, 3 221 
 
 Freight. 
 
 Consignee not liable for payment of, unless contract completed, 1 222 
 
 Earned on goods damaged by perils of the sea, ... 2 222 
 
 Liability of carrier, to deliver goods overcharged for, . . 14 77 
 
 Method of disposing of goods held for charges, ... 3 222 
 
 Not earned on cargo jettisoned, 4 223 
 
 Owner of vessel lost, liable for freight prepaid, ... 5 223 
 Payment of overcharges of, when rate stijDulated in bill of 
 
 lading, 6 223 
 
 Payment of, to master on delivery of bill of lading, . . 7 224 
 
 Rate of, according to weight, at place of shipment, . . 8 224 
 
 " " exchange on foreign bill of lading, , . , .11 56 
 
 Reckoning of " quintal," ........ 20 132 
 
 Settlement of incorrect measurement, ..... 9 225 
 
 Shipper liable for, if consignee fails to pay, .... 10 226 
 
 What freight money earned on loss of part of cargo, . . 11 226 
 
 Gifts. 
 
 Causa mortis void as against creditors — delivery by holder to 
 
 donee on death of donor, 1 227 
 
 When invalid, 2 228 
 
 Guaranty. 
 
 Etfect of, on change of name of guarantor, .... 1 228 
 
 Failure of one or two sureties to sign, releases both, . . 2 228 
 
 Goods delivered on, makes guarantor liable for payment, . 3 229 
 Guaranty of bond includes regular payment of interest to 
 
 holder, 4 229 
 
 Information given, does not constitute, 5 230 
 
 Liability of guarantor to date of revocation, .... 6 230 
 
 " " " on accommodation paper, ... 7 231 
 
 " " " for indorsement, pending an action, . 8 231 
 
 " " consignee to consignor, after expiration of contract, 10 138 
 
 Method of, by wife, 9 231 
 
 " " for payment of purchases, 10 232 
 
 Not applicable to other than the stipulated transaction, . • 11 232 
 
 Verbal guaranty of an account, binding, 12 232 
 
 When guarantor bound for his indorsement on note, . . 13 232 
 
 " not atfected by indorsement of note, .... 14 233 
 
 Guardian. 
 
 Application by a minor for, 1 233 
 
 Duty of, to invest moneys of ward, 2 233 
 
 How and when appointed by deed, 3 234 
 
 Liability of sureties on bond of, 4 234 
 
 Marriage of a female ward terminates guardianship, . . 5 234 
 
 Powers of, to invest and borrow money, 6 235 
 
 When required to furnish an additional bond, .... 7 235 
 
INDEX. 
 
 565 
 
 Heirs and Legatees. 
 
 Ques. Page. 
 
 Distribution of estate by statute, 1 235 
 
 Heir's inheritance from father dying intestate leaving second 
 
 wife, 2 235 
 
 Heir liable to extent of share, on foreclosure of real estate, . 3 236 
 
 " " " mortgagee, . 4 236 
 
 Inheritance and release of cemetery lot by heirs, ... 5 236 
 
 Intestate's parents and their children take equal share, . . 6 237 
 Lease under dower right good for full term, if children are of 
 
 age and join, 7 237 
 
 Residuary legatee is entitled to profits on investment, . . 8 237 
 
 Right of heirs to property of minor, ...... 9 238 
 
 " " on liquidation of partnership, .... 10 238 
 
 Step-brothers and step-sisters share alike, father dying intestate, 1 1 239 
 
 Ills.— " " " " " " " " 12 239 
 
 Ky. — Distribution of estate by statute, 13 239 
 
 La. — Statute of distribution, 14 240 
 
 S. C. — When an alien heir can take property by will, . . 15 240 
 
 PIOMESTKAD. 
 
 How obtained, 1 241 
 
 Lands obtained by patent grant, 2 242 
 
 Rights of pre-emptor under, 3 242 
 
 Va. — Exemption from execution under, 4 242 
 
 Husband and Wife. (See also Married Women.) 
 
 Claim of husband, for improvement on wife's property, . . 1 243 
 
 Conveyance of property through third party, .... 2 243 
 
 Gift to wife, 3 243 
 
 Husband's liability for wife's business transactions, ... 4 244 
 
 Suit against husband for wife's debts before marriage, . . 5 244 
 When conveyance of property from husband to wife valid 
 
 against creditors, 6 244 
 
 When husband's life insurance cannot be attached, ... 7 244 
 
 Wife may convey her own property without joining husband, 8 244 
 
 a u u a " • - " " . 1 179 
 
 " liable for signing note in blank, 9 245 
 
 " need not join in purchase money mortgage, ... 10 245 
 
 " " " u u a " . . . . 11 246 
 
 " of mortgagor liable on foreclosure 12 246 
 
 Wife's separate estate liable if so indorsed on note, . . .13 246 
 
 Written guaranty by wife, for husband, 9 231 
 
 Ct. — Transfer of property by wife, 14 246 
 
 Mass. — Wife can convey property as if single, . . . .15 247 
 
 N.J. — Both must join to create a lien on real property, . . 16 247 
 
 iV; J. — Wife can devise estate, as if single, . . . .17 247 
 Va. — Husband must join wife in contracts relating to real and 
 
 personal property, 18 247 
 
 Infants. 
 
 Age of majority of, 1 248 
 
 Liability of, 2 248 
 
 May act as attorney, 3 248 
 
 Notes of, made payable on obtaining majority, are voidable, . 4 248 
 
 Parent liable for necessaries furnished to, .... 5 249 
 
 Passport not necessary for, 6 2 19 
 
5G6 
 
 INDEX. 
 
 Insolvency. (See also Assignments.) 
 
 Ques. Page. 
 
 Acceptance of a dividend does not discharge the debt, . , 1 249 
 
 Actions against maker and indorser of note, .... 2 249 
 
 Assets — omission of — interest in life policies, .... 3 250 
 
 Buyer not a preferred creditor, 4 251 
 
 Creditors may pay off loan and recover collaterals, . . . 3 111 
 
 Eftect on sale, when goods in possession of seller, ... 5 251 
 
 Foreign debts not discharged by proceedings in, . . . 6 251 
 Fraudulent assignment of real estate can be set aside in favor 
 
 of creditors, ......... 7 251 
 
 Individual and firm's assets applied to principal first and then 
 
 to interest 8 252 
 
 Insolvent's right to prefer creditors, 9 252 
 
 Liability of for property acquired before discharge of assignee, 10 253 
 
 Method of collecting, when security has been given, . . 11 253 
 
 Isote may be a counterclaim of one of two mutual debtors, . 12 253 
 
 Payment of dividend by assignee, not a renewal, ... 13 254 
 Receiver entitled to real estate as an asset against preferred 
 
 creditor, 14 254 
 
 Release of one of several partners by creditors, does not preju- 
 dice their claims against the others, 15 254 
 
 Release of one of several partners by creditors, does not preju- 
 dice their claims against the others, 16 255 
 
 Rights of creditors before settlement, . . . . .17 255 
 Sale contracted abroad, creditor's action barred by debtor's 
 
 discharge, 18 255 
 
 Title of insolvent to paid-up policy given as collateral, . . 19 256 
 
 Wages not a preferred debt by statute, 20 257 
 
 When assignment can be set aside, 21 257 
 
 Insurance. 
 Fire. 
 
 Bailee not liable for loss unless insurance contracted for, . 15 140 
 
 u u a a u u a u ^ ^ -J6 141 
 
 u u u n u a (( a u irj- ^41 
 
 Company having delivered policy without collecting premium, 
 
 liable for loss 1 257 
 
 Company having delivered policy without collecting premium, 
 
 liable for loss, ......... 2 258 
 
 Company not liable to holder of policy, as collateral, unless 
 
 assigned 3 258 
 
 Company's rights, on failure of broker to pay over premium 
 
 received, 4 258 
 
 Company's right to charge short rates on cancellation of policy, 5 259 
 
 Delivery of deed in escroio^ payment on loss, to owner, . . 6 259 
 
 Extent of responsibility, property not in«;ured for full value, . 7 260 
 Floating policy will cover goods to which marine policy did 
 
 not apply, 8 260 
 
 Uouse when not considered unoccupied," .... 9 260 
 
 Indorsement on policy necessary to secure mortgagee, . . 6 259 
 Liability of, for contribution to general average, when vessel 
 
 damaged by fire, 10 261 
 
 Obligation of company on loss, . . . . . .11 261 
 
 On ordinary policy, company liable for face of policy, . . 12 262 
 
INDEX. 567 
 
 " " Qaes. Page. 
 
 Premium notes given to company by policy-holder, . . o 13 262 
 
 Proof of loss by owner, compelled by mortgagee, ... 14 263 
 
 Protection of hoider from acts of other tenants, ... 15 264 
 
 u a u a u it " . . . . 16 264 
 
 Safe may be included among household furniture, ... 9 260 
 Seller, how far protected under clause " goods sold but not 
 
 delivered," 17 264 
 
 Seller, how far protected under clause " goods sold but not 
 
 delivered," 18 266 
 
 Seller, how far protected under clause " goods sold but not 
 
 delivered," 19 266 
 
 Valuation of goods when destroyed by fire, . . . . 6 lo7 
 
 When company not liable for damage by explosion, . . 20 267 
 
 Written consent necessary to leave premises unoccupied, . . 21 267 
 
 Life. 
 
 Assignment of policy to creditor, 22 268 
 
 Change of name of beneficiary, .23 268 
 
 Eff"ect of the " suicide " and " sane or insane " clause in policy, 24 268 
 
 On life of husband for benefit of wife, 25 269 
 
 Payment of, after disappearance of insured, .... 26 269 
 Policies are assignable, by husband on consent of wife as the 
 
 beneficiary, _ . . 27 269 
 
 Policy making wife the assured, descends to her heirs on her 
 
 death, 28 270 
 
 Premium due on Sunday or legal holiday, payable day previous, 29 270 
 
 " prepaid, not retumalDle, ...... 30 270 
 
 Right of insured to paid-up policy, 31 271 
 
 When beneficiary dies, leaving no children, .... 32 271 
 
 " husband's policy cannot be attached, .... 7 244 
 
 Marine. 
 
 Cargo insured " free of particular average " landed although 
 
 damaged, .......... 33 271 
 
 Company liable for the face of policy, 34 272 
 
 Damages payable in Europe, agent there is served with notice 
 
 of suit, 35 272 
 
 Efi'ect on policy of, steamer chartered for direct voyage, stop- 
 ping at intervening port for coal 36 272 
 
 Insurance at market price, can be collected irrespective of cost, 37 273 
 Insured entitled to profits based on value between sound and 
 
 damaged goods, 38 273 
 
 Insuring freight when vessel touches several ports, ... 39 274 
 
 Liability of company for taking fire risks," .... 40 274 
 
 Not liable for goods destroyed by fire on wharf, ... 41 275 
 
 Owner's liability for loss on failure to instruct shipper to insure, 42 276 
 Policy covers all risks, w^hen vessel is obliged to discharge 
 
 cargo, 43 276 
 
 Sound value of damaged goods, determined on day of sale, . 44 276 
 
 Underwriters may direct the loading of ship, . . . . 45 277 
 
 What constitutes " total loss," 21 133 
 
 When vessel after loading found " unseaworthy," • . • 46 277 
 
 Interest. 
 
 Calculation of, on note, c 1 278 
 
 Compound, cannot be collected, . ..... 3 278 
 
-568 INDEX. 
 
 Qnc3. Page. 
 
 Computation of, 3 279 
 
 " " on bonds bouglit at premium, ... 4 279 
 
 " " u u u ... 5 280 
 
 Interest on interest overdue, not usurious, .... 6 280 
 
 Leg-al rate of, on loans to party in another state, ... 7 280 
 
 Method of computing, on R. R. coupon bonds, .... 8 281 
 
 " " time, 9 281 
 
 " " 10 281 
 
 " " " 56 38 
 
 " " " 11 281 
 
 *' " time,when obligations mature on Sunday, 12 282 
 
 " deducting discount, 13 282 
 
 " " " 14 282 
 
 Number of days making one year in calculation of, . . . 15 283 
 Oi^en account maturing on a legal holiday, if paid on preced- 
 ing day, 16 283 
 
 Rate of, computed at place of performance of contract, . . 17 284 
 
 " u « a a ^ ^ 13 284 
 
 Fla. — ^Interest on open accounts, 3 176 
 
 Ohio. — Excessive rate of, 19 285 
 
 Internal Revenue ant) License. 
 Internal Bevenue. 
 
 Cultivation of tobacco, exempt from, 1 285 
 
 Drawback allowed on cigars exported, 2 285 
 
 Goods once taxed are subject to, when re-manufactured, . . 3 285 
 Internal revenue only required for dealing in liquors and 
 
 cigars on commission, 4 285 
 
 LiquT)rs used in compounding drugs from prescriptions, not 
 
 subject to, 5 286 
 
 Medicines not patented exempt from, 6 286 
 
 il u a a a ^ ^ 286 
 
 Stamping and gauging of distilled liquors, .... 8 287 
 
 What articles subject to, 9 287 
 
 License. 
 
 Administrators to sell liquors must have license, ... 6 209 
 
 Consignee of liquors must obtain license, 21 142 
 
 License for execution officer on sales of liquors, etc., . . 10 287 
 
 " " traveling agents in different states, . . . .11 287 
 
 " necessary to peddle medicine in packages, ... 7 286 
 
 " not necessary for use of carts for private business use, . 12 288 
 
 To whom grower of tobacco may sell without license, . . 13 288 
 
 Vender can be removed from street by city authorities, . , 14 288 
 
 Intestacy. 
 
 Distribution of property, 1 289 
 
 " " unmarried son's estate, 2 289 
 
 Husband's right to personal property of deceased wife, . . 3 290 
 
 When step-son is not an heir, ....... 4 290 
 
 Wife living only, distribution of, ...... 5 290 
 
 Ct. — Widow's portion of property, without children, . . 290 
 
 N. J. — Distribution of property, 7 291 
 
INDEX. 
 
 5G9 
 
 Judgment and Execution. 
 Execution. 
 
 Qnes. Pa<fe. 
 
 Levy on pledged stock by judgment creditor, . . . . 1 201 
 
 " property of debtor without the state, .... 2 291 
 
 Marslial liable for levy on property of innocent person, . . 3 292 
 Method to collect, when property of debtor is in foreign 
 
 country, 4 292 
 
 Patent can be taken on execution, 5 292 
 
 Sheriff can levy on vested future estate of debtor, . . . 6 293 
 
 What articles exempted from execution, 7 293 
 
 Va. — Exemption under homestead, act, 4 242 
 
 Judgment. 
 
 Debtor must pay taxable costs on, 8 294 
 
 Judgment a lien on property prior to assignment, ... 9 294 
 " against maker and indorser, may be collected of 
 
 either, 10 295 
 
 Judgment obtained in England against one in the United States, 11 295 
 
 Rights of one of several debtors on judgment against him, . 12 295 
 
 When dower of wife, superior to judgment of creditor, . . 13 296 
 
 When renewal of judgment becomes a junior lien to mortgage, 14 296 
 
 Ills. — Requisites of judgment notes, 15 296 
 
 Landlord and Tenant. (See also Lease.) 
 Landlord. 
 
 Landlord can be compelled by board of health to make neces- 
 sary repairs, 1 297 
 
 Landlord can hold mortgagee on sale of chattel, for use of 
 
 premises, 2 297 
 
 Landlord cannot enforce lease of sub-tenant, .... 3 297 
 
 Landlord's claim for rent against estate of deceased tenant, . 4 298 
 
 Landlord liable in damages on his verbal contract, ... 5 298 
 
 " obliged to repair premises under agreement, . . 6 298 
 
 " not compelled to furnish chandeliers, ... 7 298 
 
 " " liable for repairs, 8 299 
 
 " " " " 9 300 
 
 *' " protected in fire policy from acts of tenants, . 10 300 
 
 " " responsible for irregular supply of water, . . 11 300 
 " " " " loss caused by defective roof, 
 
 notice being given, 12 301 
 
 Landlord not responsible for loss caused by defective roof, 
 
 notice being given, 13 301 
 
 Landlord, when liable for bursting of pipes, .... 14 301 
 " " " " damages to goods caused by bursting 
 
 of pipes, 15 302 
 
 Landlord without power to remove anything on premises, . IG 302 
 N. J. — Landlord liable for distraining goods of wife for rent 
 
 due from husband, 17 302 
 
 Miscellaneous. 
 
 Acts of agent without full power, not binding on landlord, . 18 303 
 Covenant to make " tenantable repairs does not include 
 
 elevator, 19 303 
 
570 INDEX. 
 
 Ques. Page. 
 
 Payment of rent to agent, 20 303 
 
 Regulations between, on monthly lease, 21 304 
 
 Removal of fixtures, 22 304 
 
 " 23 304 
 
 " " 24 305 
 
 Rent not due, belongs to heirs, 25 305 
 
 Written authority necessary for agent to execute lease for more 
 
 than one year, 26 306 
 
 TeTiant. 
 
 Privileges of lessee of field, » . 27 306 
 
 Propertv of, cannot be seized for rent, 28 307 
 
 Protection of, by recording lease, ...... 29 307 
 
 Rights of, on foreclosure of premises, 30 307 
 
 on refusal of landlord to repair premises, . . 31 308 
 
 Tenant bound by his accustomed method of paying rent, . 32 308 
 
 " " lease, against act of others causing nuisance, 33 308 
 " cannot vacate premises on failure of landlord to make 
 
 slight repairs, 34 309 
 
 Tenant cannot vacate premises on failure of landlord to make 
 
 slight repairs, 35 309 
 
 Tenant can terminate lease on destruction of premises, . . 36 309 
 
 " carrying on an illegal business, renders lease void, . 37 309 
 
 " liable for damages caused by removal of fixtures, . 38 310 
 
 " " full term of renewed lease, . . . .39 310 
 
 " " to landlord for breach of lease, .... 40 310 
 
 " " for rent of entire term for " holding over," . 41 311 
 
 « « a u u « " . 42 311 
 
 Tenant's position as to payment of rent on foreclosure of 
 
 premises, 43 312 
 
 Tenant's right, on failure of landlord, on overpaid rent, . . 44 312 
 
 " " to cancel lease in malarial district, . . . 45 313 
 
 What erections are removable by tenant, 46 313 
 
 When no notice required to tenant, 47 313 
 
 " tenant not liable to restore premises on assignment of 
 
 lease, 48 314 
 
 When tenant dispossessed by mortgagee, on foreclosure, . . 49 314 
 iV^. — Tenant's remedy against landlord on failure of latter to 
 
 pay taxes, 50 314 
 
 Tex, — Efi"ect on tenant, on destruction of premises by fire, . 51 315 
 
 Leases. (See also Landlord and Tenant.) 
 
 Expiration of, on Jewish Sabbath, 1 315 
 
 Expires on May first, if rent paid monthly, .... 2 315 
 
 Lease of mortgaged premises, . . . . . • . 3 315 
 
 " under dower-right, good during life of landlady, . . 7 237 
 
 " voidable, caused by fire, 4 316 
 
 " when afiected by receiver of landlord's property, . . 5 316 
 
 Notice of renewal necessary before expiration of lease, . . 6 316 
 Premises leased by the month, the time is computed from date 
 
 of renting, • • • 317 
 
 Renewal of lease optional, 8 317 
 
 Restriction in, for use of part of premises, . . . . 9 317 
 
 Verbal lease good for one year, 10 318 
 
 " " is a valid contract, 11 318 
 
 " renewal of, good for one year, 12 318 
 
INDEX. 
 
 571 
 
 When lease expires on a holiday, .... 
 N. J. — Verbal lease good for three years, . 
 
 Loans. (See also Collaterals.) 
 
 Assignment of security by pledges, . 
 Collaterals as offset against other indebtedness. 
 Creditor paying olf loan, can recover collaterals. 
 Date of loan not included in computing interest. 
 Debtor not obliged to accept draft of creditor, . 
 Degree of care of creditor varies, on deposit of collateral 
 Disposal of collateral security unredeemed by borrower, 
 Effect of unrecorded mortgage given as collateral, 
 Legal rate on, to party in another state, . 
 Method to recover property loaned, . 
 Transfer of stock for collateral, not customary, 
 When loan does not constitute partnership, 
 
 M 
 
 Marriage. 
 
 Acknowledgment without solemnization sufficient to constitute, 
 
 Between first cousins, 
 
 Contracted by filling of blanks, attested by witnesses. 
 
 Who are authorized to perform, 
 
 Married Women. (See also Husband and Wife.) 
 
 Can dispose of property by will, subject to husband's life estate. 
 
 Intestate dying, leaving husband only, distribution of property, 
 
 Liability of, for signing note in blank, 
 
 " husband, for wife's business transactions. 
 
 May act under power of attorney, without interference of hus- 
 band, ........ 
 
 Rights of, in respect to real and personal property, 
 
 Widow binds her property by her signature, 
 
 Wife's heirs inherit the property conveyed by her husband, 
 husband retains a life estate in it, 
 
 Wife may convey property of her own, without joining husband, 
 
 U U U U U U U U (( U 
 
 Wife's separate estate liable, if so indorsed on note, 
 Ct. — Law in regard to transfer of real and personal property of, 
 Mass. — Can convey her property as if singte, .... 
 N. J. — May devise her separate estate as if single, 
 N. J. — Not liable on note given for debt of another, . 
 
 Miscellaneous. 
 
 Age of majority of female, 
 
 Annuities are proportionable, 
 
 Bondholder's course, when coupons are not paid, 
 Certificate of U. S. consul attached to power of attorney, ad 
 
 visable, 
 
 Children compelled to support indigent parents. 
 Citizen cannot sue a state in the federal courts. 
 
 Church liable for water rent, 
 
 Effect of statement to commercial agency. 
 Finder of property lost, becomes trustee and should advertise, 
 
 Ques. 
 13 
 14 
 
 311) 
 319 
 
 110 
 112 
 111 
 320 
 320 
 111 
 112 
 114 
 280 
 320 
 113 
 321 
 
 821 
 321 
 
 322 
 322 
 
 323 
 290 
 245 
 244 
 
 323 
 323 
 324 
 
 324 
 179 
 181 
 246 
 246 
 247 
 247 
 324 
 
 248 
 325 
 325 
 
 326 
 326 
 326 
 327 
 327 
 328 
 
INDEX. 
 
 ^ . . , , „ Q,ncB. Page, 
 Genuine money innocently exchanged for counterfeit, can be 
 
 recovered, 9 320 
 
 Hotel proprietor liable for baggage of absent guest, . . .10 32£ 
 Liability of acceptor of circular letter of credit on neglect to 
 
 indorse payment, ........ 53 37 
 
 Liability of purchaser of stolen matured receiver's certificate, . 11 330 
 
 " towns to erect bridge, 12 331 
 
 Method of obtaining new certiticate of stock, on loss of old, . 23 168 
 
 to dispose of unclaimed goods, 13 331 
 
 Movable property in factory is personalty, . . . .14 331 
 
 Notary's tecs for protest, . . . . . . . .15 333 
 
 Newspapers sent without request no charge can be made, . 16 333 
 Opening of window overlooking adjoining property prevented 
 
 by injunction, . . . 17 333 
 
 Ordinances as to fences, . . . . . . . .18 334 
 
 Owner of money stolen, without redress against innocent 
 
 holder, 19 334 
 
 Parties receiving and selling goods belonging to another liable 
 
 in damages, 25 80 
 
 Party receiving parcel to be packed with other goods, not 
 
 responsible for same, 20 334 
 
 Property in fences between adjoining owners, .... 21 335 
 
 Recipient of a letter, is the owner, 22 335 
 
 Removal signs of out-going tenant, ...... 23 335 
 
 Right of boarder to leave in absence of contract, ... 24 336 
 
 Sale of lottery tickets is a misdemeanor, 25 336 
 
 Service of juror's notice, 26 336 
 
 " process in a U. S. court on resident on another cir- 
 cuit, 27 336 
 
 State may sue its citizens in federal courts 28 337 
 
 Stolen bonds in possession of innocent holder cannot be re- 
 claimed by former owner 29 338 
 
 Tailor not liable to customer for property stolen, ... 30 338 
 
 Tare on raw sugars, 31 338 
 
 Treasures found in the ground belong to the owner, . . 32 339 
 
 U. S. and bank officials ret]uired to stamp counterfeit money, . 33 340 
 
 What constitutes a highw^ay, 34 340 
 
 When purchaser of stock entitled to dividend, .... 35 340 
 
 u u u u u c. u .... 36 341 
 
 " subscriber to a book not ])ound to continue, ... 37 341 
 
 " suit can be brought against non-resident, . . • 38 341 
 
 Pa.— Rights of pewholder 39 341 
 
 S, C. — What constitutes a counterclaim, 40 343 
 
 Mortgages. 
 Chattel. 
 
 Covers only goods in store, when lien was created, ... 1 343 
 
 ElTcct of neglect to renew, 3 343 
 
 Method of cancellation, 3 343 
 
 Mortgagor liable for selling goods pledged when recorded, . 4 343 
 
 Must ])e renewed before expiration of each year, ... 5 344 
 
 On stock in hands of mortgagor with privilege to sell, . . 6 344 
 
 When invalid against creditors, ...... 7 345 
 
 Mass.—AimnaX renewal of record not required, ... 8 345 
 
* 
 
 INDEX, 573 
 
 Real. — Miscellaneous, 
 
 Qaee. Page. 
 
 Agreement executed with mortgage voidable on non-payment 
 
 of interest, 9 345 
 
 Date of, governs the maturity, 10 346 
 
 Compound interest cannot be legally enforced but does not 
 
 vitiate, 11 346 
 
 Effect of agreement to assign, . . . . . . .12 346 
 
 " " verbal agreement on, to continue at same rate of inter- 
 est, 13 347 
 
 Liability of subsequent grantee on purchase money mortgage, . 14 348 
 
 Principal and interest unpaid for 20 years will outlaw, . . 15 348 
 
 Purchase money mortgage executed by husband alone, . . 10 245 
 
 " " " " " " . . 11 246 
 Usury makes it void against all parties having lien on same 
 
 property, 16 349 
 
 What is covered by, 17 349 
 
 When executed by trustees, 18 350 
 
 " judgment a lien on equity of redemption, ... 19 350 
 
 " mechanic's lien is superior to, 20 350 
 
 " receiver may be appointed, 21 350 
 
 " usur^/ cannot be pleaded, 22 351 
 
 Mortgagee. 
 
 Indorsement on policy of insurance by underwriters necessary 
 
 to secure mortgagee, 6 259 
 
 Mortgagee may foreclose after it becomes due, although inter- 
 est has been paid, 23 351 
 
 Mortgagee obliged to give satisfaction piece on payment of, . 24 352 
 
 " remedy against estate of deceased mortgagor, . 4 236 
 
 " taking bonus on loan, 25 352 
 
 " to have lien on insurance, should have policy as- 
 signed to him, 26 352 
 
 Reasonable traveling expenses of mortgagee does not render 
 
 usurious, • . . 27 353 
 
 Right of mortgagee against wife of mortgagor, on foreclosure, 12 246 
 
 " " " on setting sale aside on foreclosure, . . 28 354 
 
 Mortgagor. 
 
 Expenses of mortgagor's funeral, take precedence over, . 29 354 
 Judgment for deficiency enforced against other property of 
 
 mortgagor, 30 355 
 
 Mortgagor bound to remove cloud on title, .... 31 355 
 
 " liable for deficiency on foreclosure, .... 32 356 
 
 " " on bond, " 33 356 
 
 " may require indorsement of payments on bond, . 34 356 
 " on foreclosure liable for unpaid taxes and assess- 
 ments then on bond, . 35 356 
 
 (^.—Liability of grantee to mortgagee, . . . . ,36 357 
 (7^.— Mortgagor's liability on judgment for deficiency for his 
 
 property, . 37 357 
 
 Ct. — Service of foreclosure paper on non-resident bondsman, . 38 357 
 
 N. J.— Wlicn presumed to be paid, ...... 39 358 
 
 N. J.— '* priority of record gives no preference, . . . 4C 358 
 
574 
 
 IXDEX. 
 
 N 
 
 Naturalization. 
 
 Qiies. Page. 
 
 Alien may obtain passport from resident consul, . , . 1 359 
 
 Child of U. S. citizen born abroad, 2 359 
 
 Naturalized citizen returning temporarily to his native country, 
 
 protected, ' 3 359 
 
 Naturalized citizen returning temporarily to his native country, 
 
 protected, " 6 249 
 
 Son of alien, 18 years of age, ........ 4 3(>0 
 
 Steps necessary to be taken, to procure papers of, . . . 5 360 
 
 Negligexce. 
 
 Liability of holder for safe-keeping of collateral, . . 6 112 
 
 Person causing damage by, liable, ...... 1 360 
 
 Notes. 
 
 Holder. 
 
 Acceptance of certified check instead of money, releases maker, 1 361 
 
 Accommodation notes, good in hands of innocent holder, . 2 361 
 
 Effect of alteration of date by holder, 3 361 
 
 Holder's choice of remedies against indorser, .... 4 362 
 
 Holder of, must suffer on failure to procure proper indorsement, 5 362 
 
 " " neglecting to present, loses recourse to indorsers, . 6 362 
 
 " " not obliged to give maker notice of sale, ... 7 363 
 
 Holder's right to insert date of, 8 363 
 
 Indorsc7nent. 
 
 Bank discounting, can hold indorser, also collaterals deposited, 9 364 
 
 Effect on releasing one of several indorsers 10 364 
 
 " of separate agreement on subsequent purchaser to re- 
 lease indorser of, 11 364 
 
 Extension of time will release indorser of, .... 12 364 
 
 Form of demand note, holding indorser or surety, . . .13 365 
 
 How indorser can stop payment of, 14 365 
 
 Indorsement of monthly interest on, . . . . . .15 365 
 
 " "without recourse" does not release subsequent 
 
 indorsers, 16 365 
 
 Indorsement " without recourse " does not release subsequent 
 
 indorsers, . . . . • • • . . . 17 366 
 
 Indorser liable, if maker fails to pay, 18 366 
 
 " " although note was dated subsequently by maker, 19 366 
 
 " " on forged note, ....... 20 366 
 
 Indorser's remedy against preceding indorser, .... 21 367 
 
 Indorser released by maker's settlement with creditors, . . 22 367 
 
 Last indorser liable for correctness of prior indorsements, . 23 367 
 Note payable in three installments, indorser should have notice 
 
 of each default, . . c 24 367 
 
 Release of maker, w^ill release indorser, 25 367 
 
 Steps to be taken on indorser's death, 26 368 
 
 Surety liable as long as principal, 27 368 
 
 When indorsement by wife, binding, 13 246 
 
 " " 28 368 
 
 " " by third party makes him a guarantor, . 29 368 
 
 Wife's " on, » 30 369 
 
INDEX. 
 
 Maker. 
 
 Actions against maker and indorser, on failure of maker, 
 Consent necessary to extend or renew secured note, . 
 Death of maker before maturity operates as extension, 
 Loser of, must give bonds to protect maker, .... 
 INIaker's duty to seek holder of, when overdue, .... 
 Maker of, liable, although liolder fails to present when due, 
 " " for payment, when lost or stolen, . 
 " " without value, liable to holder, .... 
 " not liable for protest, if not presented where payable, . 
 Must be presented at place of business or residence of maker in 
 
 absence of stipulation, 
 
 Must be presented at place of business or residence of maker in 
 
 absence of stipulation, 
 
 Must be presented at place of business or residence of maker in 
 
 absence of stipulation, 
 
 Protection of maker, on loss of, 
 
 When maker on discount of, may deduct interest on grace, 
 " signature of one partner on, may be rejected, . 
 
 Miscellaneous. 
 
 Accommodation note only good in hands of third party, . 
 
 Application of check given in payment of, to other purposes, . 
 
 Broker liable, on selling forged note, 
 
 Dated on Sunday, 
 
 Infant's note payable on obtaining majority, voidable, 
 
 Judgment against maker and indorser, collectible of either, 
 
 Maturing on holiday, payable on business day next preceding. 
 
 Method of collecting joint note, 
 
 Money must be tendered to stop interest, 
 
 Kote carries days of grace, unless otherwise stated, . 
 
 Payment of, before maturity, can be made only by consent of 
 both debtor and creditor, 
 
 Payment of, before maturity, can be made only by consent of 
 both debtor and creditor, ..... . . 
 
 Payment of interest, will prevent the running of statute of limi- 
 tation, 
 
 Payment of interest, will prevent the running of statute of limi- 
 tation, 
 
 Purchase of stolen, after advertisements, 
 
 Rate of interest stipulated is collectible only for period fixed, . 
 
 Right of savings bank to refuse to honor, 
 
 Rules and calculation of maturity of, 
 
 Rules and calculation of maturity of, 
 
 Sealed note not negotiable, 
 
 Seller can sue on original debt, on surrender of, . . . 
 " of, liable to purchaser for false statement of maker's 
 standin*, . . . 
 
 Steps to be taken by bank, on presentation of past due, . 
 
 What are negotiable and how assigned, 
 
 " constitutes a promissory note, 
 
 When debtor can offset note of creditor, 
 
 " original is destroyed, a copy may be used, 
 
 part payment is computed in adjusting final payment, . 
 
 Widow's dower liable on her signature, . . . . 
 
 575 
 
 Ques. Page. 
 
 2 249 
 
 31 809 
 
 32 309 
 
 33 370 
 
 34 370 
 
 35 370 
 30 371 
 
 37 371 
 
 38 371 
 
 39 373 
 
 40 373 
 
 41 373 
 
 42 373 
 
 43 374 
 
 44 374 
 
 45 374 
 
 46 374 
 18 68 
 
 47 375 
 4 248 
 
 10 295 
 
 48 375 
 
 49 375 
 
 50 375 
 
 51 376 
 
 38 371 
 
 52 376 
 
 53 376 
 
 54 376 
 
 55 377 
 
 56 377 
 70 44 
 
 57 377 
 
 58 378 
 
 59 378 
 
 60 379 
 
 61 379 
 21 21 
 
 62 379 
 18 132 
 
 63 380 
 
 64 380 
 
 65 381 
 4 324 
 
576 
 
 INDEX. 
 
 Qucs. rage. 
 
 Protest. 
 
 Bank not required to liold until close of banking hours before 
 
 protesting, 1 12 
 
 Omission of place of payment does not affect protest, . . GG 381 
 
 Protest of, after maturity, when valid, ..... G7 382 
 
 " enforced only at place of payment, .... 68 382 
 
 Right to protest immediately, ....... 69 383 
 
 Tender of money by indorser, will avoid protest, ... 70 383 
 
 Umry. 
 
 Innocent holder of accommodation note at usurious rate, can 
 
 recover from maker, 71 383 
 
 Innocent purchaser of, tainted with usury, not liable, . . 73 384 
 
 When note becomes usurious, 73 384 
 
 " " " " 74 384 
 
 Miscellaneous. 
 
 Ct. — Drawn and delivered on Sunday, void, .... 75 385 
 
 Ills. — Requisites of judgment notes, 15 296 
 
 Ky. — Notice of non-payment to be given and may be protested, 76 385 
 iV". J. — Married w'omen not liable on note given for debt of 
 
 another, 6 324 
 
 Alteration of date of, 77 386 
 
 Pa. — Elfect of, containing a warrant to confessed judgment, . 78 386 
 
 W. Va. — Protest of non-negotiable, not necessary to hold indorser, 79 387 
 
 P 
 
 Partnerships. 
 Capital. 
 
 Application of property, 1 387 
 
 Contribution of notes by one partner, w^hen articles require cash, 1 60 
 
 Firm responsible for loss of money by a partner, ... 2 388 
 
 Funds of, not liable for individual debts, 3 388 
 
 Method of charging money drawn for private use, . . . 4 389 
 Partners purchasing real estate, own according to their respect- 
 ive interests, 5 389 
 
 Partner's right to compel co-partner to make good deficit in 
 
 latter's account, 6 389 
 
 Party contributing money to prospective partnership cannot be 
 
 excluded, 7 390 
 
 Rate of interest on investment, in absence of agreement, . . 8 390 
 
 When loan does not constitute, 3 111 
 
 Dissolution, Liquidation,, Withdrawal. 
 
 Assignment of partnership effects to remaining partner, . . 9 390 
 Changes in, should be published, although retiring partner's 
 
 name did not appear, 10 391 
 
 Dissolution of, by advertisement 11 392 
 
 " " 13 392 
 
 Liability for firm's debts on withdrawal without giving notice 
 
 of dissolution, 13 393 
 
 Liquidation perfected save a purchase in transitu, disposition of, 14 393 
 
 Notice of withdrawal by retiring partner, . . . .15 393 
 
 On liquidation of, losses in proportion to share of profits, . 16 393 
 " " " partners share in proportion to their capital 
 
 accounts, 17 394 
 
INDEX. 577 
 
 Ques. Page. 
 
 Partner having sold liis interest, not entitled to share in old 
 
 claims, 18 394 
 
 Retired j^artner is only liable for debts contracted while a 
 
 member of, 19 394 
 
 Retired partner liable for transactions of old concern, . . 20 395 
 
 " not liable for debts of new firm, . . .21 395 
 
 Retiring partner entitled to whatever interest he ma}^ have in, 23 395 
 " having agreed not to continue in same busi- 
 ness in same city, liable for damages on breach of contract, 23 306 
 
 Seller's claim against retired partner, 24 396 
 
 Settlement between, on dissolution, 25 396 
 
 Firm-name. 
 
 Firm-name need not be changed, on admission of new partners, 26 307 
 
 Liability of all partners when using firm-name company," , 27 397 
 
 Right of successors to use old firm-name, 28 397 
 
 " " " 29 398 
 
 Stvle of firm-name, 30 398 
 
 31 398 
 
 " 33 399 
 
 Use of corporate name, 28 169 
 
 Miscellaneous. 
 
 Compromise of, with creditors — balance of assets then equally 
 
 divided, 33 399 
 
 Contribution between partners, when debts of firm are paid 
 
 by one, 34 400 
 
 Creditor must exhaust assets of, before proceeding against pri- 
 vate estate of partners, 35 400 
 
 Eff'ect of trust deed given as security to co-partner, ... 36 400 
 
 Extent of individual liability 37 401 
 
 Husband's liability for wife's business transactions, ... 4 244 
 
 Intention is an element to constitute, 38 401 
 
 Interest charged to individual accounts, ..... 39 401 
 Liability of firm to bank, one partner overdrawing account for 
 
 individual purposes, 40 401 
 
 Liability of, for indorsement by one partner,for business purposes, 4 1 403 
 
 " partner of difterent concerns, 43 403 
 
 " to creditors, regardless of arrangement as to divi- 
 sion of profits, 43 403 
 
 Losses shared at the same ratio as profits, 44 403 
 
 Meaning of "limited as applied to, 15 131 
 
 Method of adjusting profits, when one partner's salary depend- 
 ent on profits 45 403 
 
 Partners not liable for private speculations of one, ... 46 404 
 Person interested in the profits, does not constitute him a 
 
 partner, 47 404 
 
 Release of one of several partners is valid, .... 48 405 
 
 " " " . . . . 49 405 
 
 What constitutes a partner (by advertisement), ... 50 405 
 
 When firm liable for purchase of one partner in his own name, 51 405 
 
 one partner is not held liable for partnership indorsement, 53 406 
 
 " release of one partner by creditor, releases all, . . 53 406 
 
 " signature of one partner on note, may be rejected, . . 44 374 
 
 37 
 
578 
 
 INDEX. 
 
 Special. 
 
 Qaes. Page 
 
 Acts of special creating liability as general partner, ... 54 407 
 
 Business negotiated by special not binding on general partner, 55 407 
 
 Liability of special, to partners and creditors, .... 56 407 
 
 Rights of special, 57 408 
 
 58 409 
 
 " " : 59 409 
 
 Special partner debarred from his profits, until the loss of his 
 
 capital is made good, GO 409 
 
 Special partner liable for amount inTCsted only, ... 61 410 
 partnership allowed in all save banking and insurance 
 
 business, 62 410 
 
 Special partnership dissolved by death of general partner, . 63 410 
 " prohibited in banking and insurance busi- 
 ness, ........... 64 411 
 
 Surcivors. 
 
 Death of partner will dissolve, 65 411 
 
 Executor s right to sell testator's interest in partnership, . . 66 411 
 Liability of deceased partner's estate — no notice of continu- 
 ance or dissolution 62 410 
 
 Liquidation on death of partner — rights of heirs, ... 10 238 
 On death of partner, survivor can give good title on sale of 
 
 vessel (a firm asset), recorded only in name of deceased, 67 412 
 
 Regulation of partnership by terms of will, on death of testator, 68 412 
 Surviving partner accepting note from debtor in liquidation of 
 
 account, 69 413 
 
 Surviving partner's rights and duties, 65 411 
 
 " " to continue, ... . .70 414 
 
 " " " 71 415 
 
 Time within which to liquidate on death of partner, . . 65 411 
 
 Patents and CopYRionT. 
 
 Articles patented in the U. S. can be manufactured abroad, 
 
 but not sold here 1 415 
 
 Assignment of, should be recorded in the patent-office, . . 2 415 
 
 Copyright not granted on foreign works, 3 416 
 
 Infringement on, 4 416 
 
 Liability of patentee and dealer pending litigation, . . 5 416 
 Manufacturing a patented article for one's own use is an in- 
 fringement, . . . . 6 416 
 
 Not exempted from execution, 5 292 
 
 - - - 7 417 
 
 Owner of machine may repair but not reconstruct, . . . 8 417 
 
 Patentee permitting general use of his patent, . . . . 9 417 
 
 Period of protection of, 10 418 
 
 Requirements for . . .11 418 
 
 Royalty recovered, when patent proves defective, . . . 12 418 
 Sale of article manufactured abroad on machine patented in 
 
 the U. S 13 419 
 
 The word patented " must be affixed to articles, ... 14 419 
 
IXDEX, 
 
 579 
 
 Power of Attorney. 
 
 Quee. PaL'e. 
 
 Attorney should also affix his signature, 1 419 
 
 Effect of, on death of principal, 2 419 
 
 Liability of agent for sub-agent, 3 419 
 
 Method of signing by attorney, 4 420 
 
 5 420 
 
 " " 6 421 
 
 Minor may act as attorney, 3 248 
 
 "When principal becomes insane, 7 421 
 
 Principal and Agent. 
 
 Agent not allowed profits incidentally made, .... 1 421 
 
 " " liable to principal for default of fellow-employee, . 3 422 
 
 " " responsible for defective purchase without negligence, 3 422 
 Agent's share of profit in lieu of commission, does not constitute 
 
 him a partner, . 46 404 
 
 Agent's share of profit in lieu of commission, does not constitute 
 
 him a partner, ......... 4 423 
 
 Agent's share of profit in lieu of commission, does not constitute 
 
 him a partner, 5 423 
 
 Agent's share of profit in lieu of commission, does not constitute 
 
 him a partner, 6 423 
 
 Commission by seller to agent may be recovered by principal, . 7 424 
 
 " not earned by agent on goods returned, . . 8 424 
 
 " pavable on gross sales, ...... 9 424 
 
 " . ^ 10 424 
 
 Correspondence and papers in possession of agent belong to 
 
 principal, . . . . . . . . . .11 42o 
 
 Dismissal before expiration of year, . . ... .12 425 
 
 " " 4 316 
 
 " " « u u g 
 
 Domestic can claim wages for full term, on dismissal without 
 
 strong reason, . . 13 425 
 
 Emplover not bound to pav for work not performed on legal 
 
 holiday, ..." 14 425 
 
 Fines imposed, .......... 15 426 
 
 Lawyer cannot charge for employing another without authori- 
 zation, . . . 16 426 
 
 Method of computing commission on sales, .... 17 427 
 
 u u .... 18 427 
 
 Principal demanding of agent other work than specified, liable 
 
 for breach of contract, . 19 428 
 
 Principal liable for collection on sales by agent, ... 20 428 
 
 " " damages, for act of employee, ... 21 429 
 
 " u u u ii u u ... 22 429 
 
 « " " " " " " . . 23 430 
 
 " " " " u u u ... 24 430 
 
 " " " *' " K ... 25 430 
 
 a u u u u u ^4 154 
 
 " " " full term, although insufficient work is fur- 
 nished to agent .26 431 
 
 Wages not a preferred debt by statute, . . . . .20 257 
 
 When agent entitled to collect on sales, 27 4;U 
 
 ** " obliged to work on Sundays and legal holidays, . 28 432 
 
580 IXDEX. 
 
 Ques. Page. 
 
 When employer liable for sales of employee, .... 20 4^3 
 
 u u a 4. .... 30 433 
 
 u u u u .... 31 433 
 
 u u u u u u u .... 33 434 
 
 " " " .... 33 434 
 
 " notice of dismissal of domestic not legally required, . 34 434 
 
 " usury taken by agent, will not affect principal, . . 35 435 
 
 Ct. — Breach of verbal agreement by employee, ... 36 435 
 Ct. — Wages for work done on Sunday, of necessity, legally 
 
 earned, 37 436 
 
 R 
 
 Real Property. 
 
 Agent cams commission when instrumental in letting premises, 11 66 
 
 Alien cannot transfer, without declaring his intention, . . 1 437 
 
 c. . . 2 359 
 
 Aliens may inherit and take by devise, 2 437 
 
 Builder s lien attaches to extent of interest of owner, . . 3 437 
 
 Conveyance of, by husband through third party to wife, . . 2 243 
 Conveyed to trustee, can be reconveyed to grantor by order of 
 
 court 4 438 
 
 Deed of, includes erections subsequently made, . . . 5 438 
 
 Dower of wife is only a life estate, 6 438 
 
 " valued and applied, 7 438 
 
 Effect of party wall agreement, 8 439 
 
 Fraudulent assignment of, can be set aside in favor of creditors, 7 251 
 
 Gas fixtures not necessarily part of house, .... 9 439 
 
 Grantor liable, on refusal to deliver deed, 10 440 
 
 Irregularity in deed can be removed, 11 440 
 
 Law in regard to minerals found in private property, . . 12 440 
 
 Liability for building partly on another's land, ... 13 441 
 
 " u u u ... 14 441 
 
 " of subsequent grantee on purchase money mortgage, . 14 348 
 
 Loss by fire, during pendency of sale of, payable to grantor, . 15 443 
 
 Nuisance created by owner of premises, can be suppressed, . 16 443 
 
 Obligation of tenant for life to rebuild, 17 443 
 
 Opening of windows overlooking adjoining property, prevented 
 
 by injunction, 17 333 
 
 Owner of, liable for damages caused by flow of water on land 
 
 of neighbor, . . . . " 18 444 
 
 Removal of party wall by one of two owners 19 445 
 
 Sale of, can be niade subject to unfulfilled conditions, . . 20 445 
 
 Seller liable for damages for false representations, . , ^ . 21 445 
 Separate estate of married woman conveyed without joining 
 
 her husband 8 244 
 
 Title by annexation of personal property, between mortgagor 
 
 and mortgagee, ... 22 446 
 
 Transfer by one in debt can be set aside by judgment creditor, 23 446 
 When conveyance of, from husband to wife, valid against credi- 
 tors, . 6 244 
 
 When transfer of, may beset aside by creditors, . . .24 447 
 
 Ills. — Rights of grantee, when squatters are in possession, . 25 447 
 Miss. — Liable in damages caused by erection of irregular party 
 
 wall, ........ t . . 26 447 
 
INDEX. 581 
 
 Ques. Page. 
 
 i\r. J — Alien can hold and convey, 27 448 
 
 N. J. — Grantor's liability in \varranty deed, .... 28 448 
 
 Pa. — Perpetual lease of an oil well 29 449 
 
 S. C. —Right of dower does not attach until judgment lien is 
 
 discharged, , 30 449 
 
 Receipts. 
 
 Debtor no right to demand receipt, 1 450 
 
 Not conclusive evidence of j^ayment, 2 450 
 
 Written in pencil, valid, ........ 3 450 
 
 Receivers. 
 
 Appointed by court to manage estate of lunatic, . . 1 451 
 
 Entitled to real estate as an asset against j^relerred creditor, , 14 254 
 
 Owner occupying property in hands of, liable for rent, , 2 451 
 
 s 
 
 Seller and Purchaser. 
 
 Assig?i7ne}it. 
 
 Effect of assignment without notice to debtor, . . . , 1 451 
 Proceeds withheld after assignment of bill by purchaser, . 2 452 
 Purchaser liable for payment to insolvent seller, ... 3 452 
 Sellers right to retain undelivered goods on failure of pur- 
 chaser, 4 452 
 
 Contracts, Delivery. 
 
 Agreement guarantying price, binding 5 452 
 
 " to deliver at certain place, makes seller liable, until 
 
 delivered, 6 453 
 
 Contract voidable, when goods not shipped as directed, . . 7 453 
 Defiiult in first payment, releases seller from further deliveries 
 
 under contract, 8 454 
 
 Delay in filling order, 9 454 
 
 10 455 
 
 " " " '\ 11 455 
 
 Goeds lost in transitu^ 12 455 
 
 " " " " 13 456 
 
 " " " '\ 14 456 
 
 " sold " to arrive " under verbal contract, ... 15 456 
 
 New agreement will alter day of maturity, .... 16 456 
 
 Part delivery gives title to purchaser to the whole, ... 17 457 
 
 " of goods sold "to arrive,'' docs not bind purchaser,. 18 457 
 Purchaser has no claim against agent, if goods sold to arrive " 
 
 are not delivered, . . . . . . . . 19 458 
 
 Purchaser has no claim when quantity described by about,'' . 20 458 
 
 may cancel contract for delay in delivery, . . 21 459 
 
 u u u a a ^ ^ 22 459 
 
 " " reject goods of inferior quality and not ILible 
 
 for freight, " \ ... 23 400 
 
 Purchaser must accept goods, although vessel has sailed later 
 
 than represented, . 24 4G0 
 
 Purchaser's right to demand delivery within reasonable time 
 
 after arrival, 25 461 
 
582 
 
 INDEX. 
 
 Qnos. Pa?e. 
 
 Purchaser's right to reject part delivery, 26 4(51 
 
 Seller does not guaranty delivery, on agreement to pay freight, 27 461 
 
 " Jias claim to goods omitted from agreement, . . . 28 463 
 
 liable for delivery of inferior article, . . , .29 462 
 
 " in damages for non-delivery of goods, . , , 30 468 
 
 " on failure to deliver within specified time, . . 31 464 
 
 What makes a sale binding, 32 464 
 
 " u 33 
 
 When goods are sold on four months and billed on 30 days' 
 
 time . 34 465 
 
 "When seller liable for loss of goods in transitu, ... 35 465 
 " not liable for damage to goods insured for particu- 
 lar average, 36 465 
 
 Miscellaneous. 
 
 Auctioneer liable for his warranty on the goods sold, , , 37 466 
 
 Cash discounts on overdue accounts, 38 466 
 
 Foreiun vessel in foreign port sold to American citizen, . . 39 466 
 Goods sold in bond, and duty abolished before delivery, . . 40 467 
 License for traveling agents in dificrent states, .... 11 287 
 Meaning of " cash " — " net cash " — prompt cash," . , . 4 127 
 " " "... 5 12S 
 Owners right when property stored, is sold witliouthis knowl- 
 edge, ' 41 467 
 
 Person receiving and selling goods belonging to another, liable, 25 80 
 
 Post-dating of bill does not carry date of intermediate bills, . 42 468 
 Purchaser's right to tender seller's note when due, as offset 
 
 against purchase, . 43 468 
 
 Sale of ship by married man, 44 468 
 
 " " not recorded unless duly acknowledged, . . 45 468 
 Seller can sue on original debt on surrender of note, , . 60 379 
 Tare included in weight of paper by seller, .... 46 469 
 War materials shipped before war, title is in shipper and ex- 
 empt from seizure, 47 469 
 
 When insurance applies to goods sold and in warehouse, . . 48 469 
 
 " payable in legal tender, 49 470 
 
 Purchaser. 
 
 Method to pursue on refusal of seller to receive goods rejected, 50 470 
 
 Purchase when not deemed fraudulent 51 470 
 
 Purchaser becomes debtor on day of delivery, on bill post-dated, 52 472 ♦ 
 
 " cannot return goods beyond stipulated time, . . 53 472 
 
 " failing to give note as agreed, may be sued at once, . 54 472 
 *' from agent without authority, has no claim against 
 
 principal, .......... 55 472 
 
 Purchaser has a claim w^ithin reasonable time for inferior 
 
 quality _ . . .56 473 
 
 Purchaser having paid unauthorized person, is liable to seller, 57 473 
 
 " liable for goods lost, when delivered as instructed, . 58 473 
 
 " " on acceptance of order on warehouse, . . 59 474 
 
 " must beware of title of goods bought, . . 60 474 
 
 " may return goods when subject to a claim by patentee, 61 474 
 
 " must pay at invoice rate, unless claim made in time, 62 475 
 
 " on installments has no title, until contract performed, 63 475 
 
 Purchaser s right on the installment plan, .... 64 476 
 
INDEX. 
 
 583 
 
 ■ Ques. Paf,'e. 
 
 Purchaser's statement of solvency, (55 470 
 
 Rights of innocent purchaser, Go 477 
 
 When and for what purchaser bound by his offer, ... 67 477 
 
 " false promises do not criminate purchaser, ... 68 477 
 
 " purchaser has no claim for damage, 69 478 
 
 SeUer, 
 
 Failure to sell at limit, cancels order, 70 478 
 
 Goods sold " as are," 71 478 
 
 Method to dispose of unclaimed goods, 13 331 
 
 Principal liable for agent collecting on sales, .... 20 428 
 
 bound by acts of agent, having general authority, . 31 433 
 
 u u u u u u u u 32 
 
 Protection of consignor by indorsement on bill of lading, . 72 479 
 
 Seller can stop goods in transitu,'^ 73 479 
 
 " has no claim for error when purchaser has disposed of 
 
 goods 74 479 
 
 Seller liable for delivery of non-merchantable article, . . 75 480 
 
 " false warranty, 76 480 
 
 " on goods " to arrive," 77 481 
 
 '* may withdraw^ offer before receipt of acceptance, . . 78 481 
 
 Seller's claim against retired partner, 23 396 
 
 right on purchaser rejecting goods, previously accepted 
 
 by his employee, ........ 79 482 
 
 Seller s right to revoke his acceptance before close of sale, . 80 482 
 
 When seller has right to make charge for additional trouble, . 81 483 
 
 " instructed to collect through bank which fails, . 82 483 
 
 " " liable for neglect to insure 83 483 
 
 " " not liable for loss before delivery, . ... 84 484 
 
 Settlement of Accouxts. (See also Book-keeping.) 
 
 Amount credited may be considered an offset against a ma- 
 tured debt, 1 484 
 
 Computation of interest when settled by note, .... 2 485 
 
 " cash discount on part-payment, ... 3 485 
 
 Del)tor to secure cash discount must make tender, ... 4 485 
 
 Deduction of cash discount, before deducting freight, . . 5 486 
 
 Foreign account paid to agent in dollars 6 486 
 
 Obligations maturing on Sunday or legal holidays, ... 7 486 
 
 Shipping. 
 of Bills Lading. 
 
 Bills of lading signed before delivery, ..... 19 59 
 
 Date of signing bill of lading, date of shipment, ... 2 53 
 
 Liability of vessel on fraudulent bill of lading, . ... 9 55 
 Master must sign bills of lading under charter party, although 
 
 demurrage not paid 1 487 
 
 Master obliged to sign bill of lading, 10 56 
 
 Master's right to refuse to change port, bills of lading being 
 
 signed 2 487 
 
 Nature of cargo should be stated on receipt, .... 3 73 
 
 Owner may require sliipper to prc])are bills of lading, . . 12 56 
 
 When master may refuse to sign bills of lading on sub-charter, 18 58 
 
584 TXBEX. 
 
 Charter Party. Demurrage. 
 
 Qiics. Paj^e. 
 
 Agents as charter party not liable for damage by improper 
 
 loading, 34 147 
 
 Charterer liable on refusal to clear, 3 4biS 
 
 Charterer's commission on cash furnished, .... 4 488 
 remedy against ship, on failure to equip, . . 5 489 
 Charter party not liable for demurrage, for delay by custom- 
 house, . . 6 489 
 
 Commission on advances must be charged on actual disburse- 
 ments ... 7 490 
 
 Days excluded in "laydays" apply to demurrage, ... 8 490 
 
 Demurrage chargeable to whom, 9 490 
 
 Firm not liable in case of failure of one authorized to sign char- 
 ter party, 10 491 
 
 How contingencies of war will effect charter, . . . .11 491 
 
 Liability of charter party for disbursements 12 491 
 
 Master not obliged to accept demurrage, in absence of charter 
 
 party, 13 492 
 
 IMaster should report arrival of vessel to charterer, ... 14 492 
 
 Meaning of the term " working daj-s" in charter, ... 23 133 
 Vessel causing collision, not liable for demurrage, when full 
 
 damages awarded, . . 15 493 
 
 When charter reads to proceed with dispatch, . . . . 16 493 
 
 " charterer mui-t decide on cancellation of charter party, . 17 494 
 
 " " is liable for demurrage, 18 494 
 
 " " lial)le to shipper for delay, . . . . 19 494 
 
 " charter party liable for commission, . . . . 20 495 
 
 " demurrage mav be claimed, 21 495 
 
 « u ^ u 22 495 
 
 *' loading will not affect charter, 23 496 
 
 " no demurrage is due, 24 496 
 
 " ship is liable for demurrage, ,25 496 
 
 " steamer chartered for direct voyage and stopping at in- 
 tervening port for coal, 26 497 
 
 Consignee. 
 
 Consignee's right to examine goods before receiving claim for 
 
 shortage, 27 497 
 
 Loss by fire on dock— liability of consignee, • ... 28 498 
 
 <• " " " — notice of discharge, .... 29 498 
 
 Master's right to store goods, if not removed on day of notice, 30 498 
 
 Receiver may designate another wharf, than expressed in con- 
 tract 31 499 
 
 Vessel liable to consignee for discharging freight at port, other 
 
 than designated in charter, 32 499 
 
 ' When assignee liable for demurrage, 33 500 
 
 Consignor. 
 
 Goods not shipped on time on contract, may be rejected, . 5 154 
 Marine insurance company not liable for goods destroyed on 
 
 wliarf, 41 275 
 
 Sliipper liable for loss by fire on wharf, when goods detained 
 
 by his orders, . . . * . . - - .34 500 
 
 Shipper liable to carrier for misrepresenting class of freight, • 35 &4 
 
INDEX, 
 
 585 
 
 Miscellaneous, 
 
 Charge for use of wharf, , . 
 
 Computation of wharfiige, 
 
 Conditions to i:)rocure American register for foreign-built ves 
 
 sel, wrecked, . 
 
 Contraband goods on vessel running blockade can be seized, 
 Damage to goods by defective wharf, .... 
 Goods shipped as specified, is a delivery, .... 
 
 Loading dependent on contract, 
 
 Meauinij of the term " alongside," 
 
 Method of disposing of goods, held for charges, 
 
 giving security for libelled foreign vessel, 
 
 Pilot's responsibility, 
 
 Pleasure boats on inland lakes and rivers, subject to state laws 
 
 only 
 
 Right of captain to settle claims against vessel, 
 
 Sale of foreign vessel in foreign port to American citizen, 
 
 Search for record of claims against vessel for sale, . 
 
 Time of shipment according to contract, .... 
 
 Wharfage when and from whom chargeable, . 
 
 What constitutes delivery of merchandise for shipment, , 
 
 Whsn tug-boat having a tow is liable for damages, . 
 
 Owner. 
 
 Extent of owner's liability for damages by collision. 
 Freight is earned on goods damaged by the perils of the sea, 
 " not earned on cargo jettisoned 
 
 " prepaid may be recovered from owner of lost vessel, 
 Liability of vessel for supplie-i, 0:1 agent's failure. 
 Lien of material-man should bj enforced within reasonable 
 
 time against owner of vessel, ..... 
 Owner can compel master to surrender vouchers, 
 
 '* liable for breakage or detention, .... 
 
 " seaman's wages, 
 
 " of vessel liable to the extent of his interest, for lost 
 
 freight, 
 
 Owner of vessel not liable, master sailing her on shares, 
 Port-charires, liability of owner after loss of vessel, . 
 Rights and duties of owner, ship having suflFercd general average, 
 
 " of vessel to compress cotton 
 
 Ship liable for damage to frei<;ht by vermin, . 
 
 " owner not liable for decay or for the perils of the sea, 
 Vessel liable for goods stowed on deck, without consent, . 
 
 *' to sliipper for unwarrantable delay. 
 
 When several claims exist against vessel, .... 
 
 Salvage^ General Average. 
 
 Adjustment in contribution by freight in general average. 
 Damage to masts is not general average, .... 
 Goods landed contribute in general average to goods jettisoned 
 Liability of consignees for general average. 
 Meaning of the term " general average," .... 
 
 0.) 
 66 
 67 
 68 
 12 
 
 515 
 516 
 516 
 517 
 130 
 
586 INDEX. 
 
 Qaes. Page. 
 
 Salvage governed by each case, Gi) 517 
 
 Wliartreight money earned on loss of part of cargo, . . 11 2'26 
 
 When shipper not entitled to allowance in general average, . 70 517 
 
 Statute of Limitations. 
 
 Applied to debt^, 1 518 
 
 Date and delivery of demand note, mark time of, ... 2 518 
 
 Does not run against a non-resident of the state, , . . 3 518 
 
 ... 4 518 
 
 How to prevent the running of, 5 519 
 
 On accounts " mutual,'' open," and " current," ... 6 519 
 
 Part payment does not constitute a revival of the clrim, . . 7 519 
 
 Payment of dividend by assignee, not a renewal, ... 13 254 
 '* interest by one on joint note, is outlawed against 
 
 the other after six years, 8 520 
 
 Payment of interest on^iote, will take it out of, ... 9 520 
 
 "... 53 376 
 
 *' on account will take debt out of, . . . . 10 521 
 Principal and interest on mortgage unpaid for twenty years, is 
 
 barred by, 15 348 
 
 Rights of ])erson in possession of land for twenty years, . . 11 521 
 
 AViun judgment is barred by 12 521 
 
 Ct.—On notes 13 522 
 
 Ga. — Time runs from date of last item of account, ... 14 522 
 
 Ilh. — of running of, on sealed instruments, ... 15 522 
 
 Ills.— " u u u ... 16 523 
 
 P«.— On notes, 17 523 
 
 Sureties. 
 
 Liability of, on bond of guardian, 4 234 
 
 Not released by insolvency of co-surety, 1 523 
 
 Rights of, against the principal, on transfer of property to him, 2 524 
 
 Taxation. 
 
 Articles imported and sold in original packages, exempt from 
 
 state, J. 524 
 
 Banks and banking houses, 3 524 
 
 Bond and mortgage on property without state, ... 3 525 
 
 " " "... 4 525 
 Capital of corporation invested in real estate taxed by state 
 
 and city, . . - . 5 526 
 
 Church property exempt, 6 327 
 
 Collection and reduction of personal tax, 6 526 
 
 Debts deducted from taxable property, . . . , . 7 526 
 
 Deposit in savings bank, 8 526 
 
 Estate liable to, ^ 
 
 Exempt, what property, 10 527 
 
 - " " 11 527 
 
 " " . , 12 528 
 
 Liable for, business in one county and residence in another, . 13 528 
 
 Loan assessed, but not mortgage given as collateral, • . 14 528 
 
 On bonds and R. R. securities, 15 528 
 
 On incorporated companies, . 16 529 
 
 Partnership property, 17 529 
 
 Premium on government bonds taxable, ..... 18 529 
 
INDEX. 587 
 
 Ques. Page. 
 
 Heal estate assessed wliere it is situated, 19 529 
 
 Remedy auainst seizure of property for, . . , , . 20 529 
 
 Succession tax on real estate, paid but once, .... 21 530 
 
 What legacies exempt, 22 531 
 
 " may be levied on for unpaid taxes, 23 531 
 
 personal property subject to, 24 531 
 
 25 532 
 
 Ct. — Assessor's right to change statement, adding mortgage, . 26 532 
 
 Ind. — When omission in assessments may be collected, . . 27 533 
 
 Minn. — What real estate and mortgage exempt, ... 28 533 
 N. J. — Tenant's personal property liable, on landlord's failure 
 
 to pay, 50 314 
 
 Pa. — Notice and demand necessary to enforce collection, . 29 534 
 
 Va. — Bank stock of non-resident liable for, .... 30 534 
 
 Telegraph. 
 
 Attachment of wires to building by company, • . , . 1 534 
 
 " " '* " .... 2 535 
 
 Company's mistake in sending message, 3 535 
 
 " " " 4 536 
 
 Non-delivery of message, ........ 5 536 
 
 Not liable for forgery unless company guarantees signature, . 54 37 
 
 Sender must bear loss, on mutilated message, .... 6 537 
 
 Trademarks. 
 
 Infringement of, . 1 537 
 
 Owner of. protected, on rejection of goods, .... 2 538 
 
 State courts only, have jurisdiction, ...... 3 538 
 
 4 538 
 
 When introduced and unregistered in United States^ . , 5 538 
 
 Trespass. 
 
 Owner of vessel liable for landing at private dock, . . . t 539 
 
 Water flooding neighbor's land, . 2 540 
 
 Trustees. 
 
 Cannot discharge trust without consent of parties interested or 
 
 by order of court, 1 540 
 
 Liability of, for speculating with the funds 2 541 
 
 " " "to legatees, 8 541 
 
 " ' 4 541 
 
 Petition by all parties necessary, to divide estate, ... 5 54-2 
 
 Protection of funds, against depreciation of silver coin, . . 6 543 
 
 When a beneficiary, . 7 543 
 
 u 
 
 Usury. 
 
 Authorities applicable to banks, 40 32 
 
 Commission to broker, does not make loan usurious, . , 13 67 
 
 Indorser "selling" note, cannot plead 1 543 
 
 Innocent holder of usurious accommodation note, can recover 
 
 of maker 69 383 
 
 Mortgage not rendered usurious by reasonable charge for trav- 
 eling expenses, 26 352 
 
588 
 
 IXJDEX, 
 
 Qnea. Page. 
 
 Mortgage void for, against parties having liens on same prop- 
 
 ertv, IG 349 
 
 On notes 2 543 
 
 Purchaser of note tainted with, not liable for, .... 70 383 
 
 Recovery under the revised statutes, 3 544 
 
 AVhat is not, in discounting notes, 4 545 
 
 AV hen creditor cannot plead, against mortgagor, , , .2] 350 
 
 note becomes usurious, , . 71 383 
 
 " " " 73 384 
 
 Juass.— On notes, . 5 545 
 
 WAREnOUSK. 
 
 Consent necessary on transfer of receipt, 3 545 
 
 Duties of, when owner cannot be found, ..... 2 546 
 
 Fees chargeable for goods not removed within 24 hours, , . 3 546 
 
 Goods stolen from, . . . 2 170 
 
 Right of owners of, to raise rate of storage on notice, . . 4 546 
 
 Unredeemed goods can be sold on execution alter judgment, . 5 547 
 
 Wills. 
 
 Advances, settlement of, by agreement, i 547 
 
 Bequests to charitable institutions, 2 547 
 
 Conditions in, repugnant to estate devised, are void, . . 3 547 
 
 Drawn in Xew York — real estate in Indiana 4 180 
 
 Husbmd's right to will all his property to his wifCj with re- 
 
 iT^ainder to his heirs, • . . 4 548 
 
 IMay relieve executor of iriving bonds ,5 548 
 
 Re<;ulution of partnership by terms of will on death of testatoi, 67 412 
 
 Ream -ements of attestation clause, 6 549 
 
 ^ ** 7 549 
 
BUSINESS FORMS. 
 
 689 
 
 BUSINESS FORMS. 
 
 GENERAL FORM OF AGREEMENT BY SUBMISSION. 
 
 Whereas controversies exist, and for a long time have existed, between us, A. B., of 
 , and Y. Z., of , in relation to divers subjects: 
 
 Now therefore, we, the undersigned A. B. and Y. Z., do hereby mutually covenant 
 and agree, to and with each other, to submit all and all manner of actions, cause and 
 causes of actions, suits, c(mtroversies, claims, and demands whatsoever, now pending, 
 existing, or hold by and between us, to M. N., of , as arbitrator, Avho shall [o?-, 
 
 to M. N.. O P. and Q. R., all of , as arbitrators, who, or any two of whom, 
 
 shall] arbitrate, award, order, judge, and determine of and concerning the same. {Here 
 insert, if 'hsired, With power to award the payment of the costs (and of the expenses) 
 incurred in such arbitration.] And we do mutually covenant and agree to and with each 
 other that the award to be made by the said arbitrator [or, arbitrators, or any two of 
 them] shall, in all things, by us and each of us, and by the executors, administrators, 
 and assigns of us and each of us, be well and faithfixlly kept, observed, and performed. 
 Provideci, hoicever, that such award be made in writing, under the hand of the said arbi- 
 trator [or, hands of the said arbitrators, or any two of them], ready to be delivered to 
 us, or either of us, on or before the day of ,18 
 
 Witness our hands and seals, this day of 18 
 
 In presence of A. B. [seal.] 
 
 [Signature of witnesses.] Y. Z. [seal.] 
 
 ASSIGNMENT OF AN ACCOUNT. 
 
 Know all Men by these Presents: That I, A. B., of , in consideration of 
 
 dollars, lawful money of the United States [to me paid before the sealing 
 and delivery of these presents, the receipt whereof is hereby acknowledged], have sold, 
 assigned, transferred, and set over, and by these presents do sell, assign, transfer, and set 
 over unto Y. Z., of , his executors, administrators, and assigns, to his and their 
 
 own proper use and benefit [all my right, title, and interest in and to], any and all sura 
 or sums of money now due or to grow due upon the annexed account, or upon the sales 
 [or, services, or, loans, or whatever transactions may be the basis of the account'] therein 
 mentioned. And I do hereby give the said Y. Z., his executors, administrators, and 
 assigns, the full power and authority, for his or their own use and benefit, but at his or 
 their own cost, to ask, demand, collect, receive, compound, and give acquittance for the 
 same, or any part thereof, and in my name or otherwise to prosecute and withdraw any 
 suits or proceedings at law or in equity therefor. 
 
 In witness whereof, I have hereunto set my hand and seal, this day of , 18 . 
 
 In presence of [Signature.] [seal.] 
 
 ''Signature of witness or witnesses.] 
 
 BILL OF SALE — Describing the Chattels. 
 
 Know all Men by these Presents: That I, A. B., of , in the county of 
 
 , and State of , farmer, party of the first part, in consideration of the sum 
 
 of dollars, to me paid by Y. Z., of " aforesaid, merchant, party of the second 
 
 part, the receipt whereof I do hereby acknowledge [or state other consideration — e. g., thus: 
 in consideration of the sum of dollars, to me to be paid by Y. Z , of , etc., 
 
 etc., in equal quarterly installments, secured by his notes at three, six, nine, and twelve 
 months respectively], have bargained, sold, granted, and conveyed, and by these presents 
 do bargain, sell, grant, and convey unto the said party of the second part, his executors, 
 administrators, and assigns [here make a list of the articles sold, thus.] all the hops gi'ow- 
 ing on my farm in said town, one yoke of oxen, red and white, heretofore on said farm, 
 and one bay horse, with farm wagon and harness, now in the keeping of ^I. N., at , 
 To have and to hold the same unto the said party of the second part, his executors, 
 administrators, and assigns, forever. And I do for myself, my heirs, executors, and 
 administrators, covenant and agree, to and with the said party of the second part, to 
 warrant and defend the said described goods hereby sold, unto the said party of the 
 second part, his executors, administrators, and assigns, against all and every person and 
 persons whatsoever. 
 
 In witness whereof, I have hereunto set my hand and seal, the day of , 18 . 
 
 Signed, sealed, and delivered in ( A. B. (seai*-] 
 
 presence of ^ 
 lSignatu7'e of witness.'] 
 
590 
 
 BUSm^ESS FORMS. 
 
 CHECKS, DRAFTS, NOTES. 
 [Check.] 
 
 Hartford, Conn., 18 
 First National Bank. 
 
 Pay to A. B., or order, (or bearer,) dollars. 
 '3 
 
 {Signature.) 
 
 [Sight Draft.] 
 
 81,000. Chicago, III., April 27, 1885. 
 
 At sight pay to the order of {name of payee) one thousand dollars, value received, 
 and charge the same to account of 
 To {name or address of party on whom draft is made). 
 
 {Signature of drawer.) 
 
 [Time Draft.l 
 
 31,000. ' Chicago, III., April 27, 1885. 
 
 Ten days {or whatever time is desirable) after date pay to the order of {name of payee) 
 one thousand dollars, value received, and charge the same to account of 
 To {name and address of party on whom draft is made). 
 
 {Signature of drawer," 
 
 [Negotiable Note.] 
 
 81,000. Philadelphia, Pa., January 1, 1866. 
 
 Sixty days after date [or, on the day of 18 , or, on demand], I promise [or, 
 wepromise,'or, we jointly and severally promise] to pay to A. B., or order [or, to A. B. or 
 bearer], one thousand dollars \insert\\il\\ interest, if it is to bear interest], for value 
 received. 
 
 [Signature of maker.] 
 
 [Non-negotiable Note.] 
 81,000. Philadelphia, Pa., January 1, 1861. 
 
 Sixty days after date [or othencise, as above], I promise to pay to A. B. one thou- 
 sand dollars,' for value received, [insert with interest, tfit is to bear interest.] 
 
 [Signature oj maker.] 
 
 CONTRACT — With Provision for Liquidated Damages. 
 
 This agreement, made the day of , one thousand eight hundred 
 
 and , by and between A. B., of the town of , in the county of 
 
 , manufacturer, of the first part, and Y. Z., of , merchant, of' the second 
 
 part, Witnesseth: That the said party of the second part covenants and agrees, to and 
 with the party of the first part, to [here insert the subject matter of the agreement]. And 
 the said party of the first part covenants and agrees to pay unto the said party of the 
 second part, Ifor the same, the sum of dollars, lawful money of tlie' United 
 
 States, as follows: the sum of dollars, on the day of , 
 
 18 , and the sum of dollars, on the day of , 18 , 
 
 with the interest on the amount due pavable at the time of each payment. 
 
 And for the true and faithful performance of all and every of the covenants and 
 agreements above mentioned, the parties to these presents bind themselves, each unto 
 the other, in the penal sum of dollars, as liquidated damages, to be paid by the 
 
 failing: partv- , , . , , r ^ 
 
 In Avitncss Avhereof, the parties to these presents have hereunto set their hands [and 
 
 seals, if desired], the day and year first above written. 
 
 [Signatures, with or without seals.] 
 
 [If attested by u-itnesses, add:] 
 
 Signed, sealed, and delivered in j 
 the presence of 
 [Signature oj witnesses^ 
 
BUSmESS FORMS. 
 
 591 
 
 DECLARATION OF TRUST IN PERSONAL PROPERTY. 
 
 I, A. B., of , in consideration of , hereby acknowledge and declare, 
 
 that I am possessed of [ten shares of the capital stock of the'C. I). Company, numbered 
 from one to ten inclusive], in trust, and for the only benefit and advantage of Y. Z., of 
 , his executors, administrators, and assigns, the same having been purchased 
 with the moneys of the said V. Z., and my name, as to the said shares, and all the 
 income thereof, 'from hencefortli to grow due 'or accrue, is used only in tru.-t for the said 
 Y. Z. And I, for myself, my executt)rs, and administrators, hereby covenant with the 
 said Y. Z., his executors, administrators, and assigns, that I and they shall and will, at 
 any time hereafter, at the request and costs of the said Y. Z , his executors, adminis- 
 trators, and assigns, assign and transfer the said shares to him, or them, or order. 
 
 [Date.] [Signature.] 
 
 GUARANTY OF PERFORMANCE OF CONTRACT. 
 
 In consideration of the sum of one dollar to me in hand paid by Messrs. A. B. & 
 Company, the receipt whereof is hereby acknowledged, I do hereby guarantee, promise, 
 and agree to and Avith tnem, that the above-named N. will well and faithfully per- 
 form and fulfill everything by the foregoing agreement on his part and behalf to be per- 
 formed and fulfilled at the times and in the manner above provided. And I do hereby 
 expressly waive and dispense with any demand upon the said M. N~., and any notice of 
 any non-performance on his part. 
 
 \Date.\ \_Sifj nature.] 
 
 POWER OF ATTORNEY— General. 
 
 Know all Men by these Presents: That I, A. B., of , in the county of 
 
 , and State of " , have made, constituted and appointed, and by these presents 
 
 do make, constitute, and appoint Y. Z., of , my true and lawful attorney, for 
 
 me, and in my name, place, and stead, and to my use [here state the suhject~matter of 
 the power], giving my said attorney full power to do everything whatsoever, requisite and 
 necessary to be done in the premises, as fully as I could do if personally present, with 
 full power of substitution and revocation, hereby ratifying and confirming all that my 
 said attorney, or his substitute, shall lawfully do, or cause to be done, by virtue hereoi. 
 In witness whereof, I have hereunto set my hand and seal, the day of 
 
 , in the year one thousand eight hundred and 
 
 Signed, sealed, and delivered in] re * i 
 
 "presence of ^ [Signature.] 
 
 [Signature of witness.] 
 
 POWER OF ATTORNEY TO TRANSFER STOCK. 
 
 Know all Men by these Presents: That for value received, have bargained, 
 
 sold, assigned, and transferred, and by these presents do bargain, sell, and transfer unto 
 of shares of the capital stock of standing in name 
 
 on the books of said and do hereby constitute and appoint 
 
 of true and lawful attornej' irrevocable, for and in name 
 
 and stead to sell, assign, transfer, and set over unto said all or any part of 
 
 the said stock, and for that purpose, to make and execute all necessary acts of assignment 
 and transfer, and one or more persons to substitute with like power, hereby ratifying 
 and confirming all that said attorney or substitute or substitutes shall lawfully 
 
 do by virtue hereof. 
 
 In witness whereof, have hereunto set hand and seal, the 
 
 day of A. D. 18 
 
 Signed, sealed, and delivered in ) 
 presence of ) 
 Signature of witness.] [Signature.] 
 
 PROXY FOR VOTING ON STOCK. 
 
 Know all Men liy these Presents: That I, of the town of , and 
 
 State of , do make, constitute, and appoint , of the town of , 
 
 and State of , my true and lawful attorney, with power of substitution, for me 
 
 and in my name, to vote at a meetin^of the stockholders of the to be holden 
 
 on the " day of , A. D. 18 , on the stock standing in my name, on 
 
 the books of said corporation, in the choice of officers of said corporation, and in the 
 transaction of any other business at said meeting, hereby revoking all other powers by 
 me heretofore executed, for the purposes aforesaid. 
 
 In testimony whereof, I have hereuuto set my hand, at , this dav of 
 
 ,'A.D. 18 
 
 [Signature.] 
 
692 
 
 BUSINESS FORMS. 
 
 RELEASE OF ALL DEMANDS. 
 
 Know nil Men by these Presents : That I, A. B., of the city of for and in 
 
 consideration of the sum of one dollar to me in hand paid by Y. Z., of do 
 hereby release and forever discharge the said Y. Z., his heirs, executors, and adminis- 
 trators, of and from all actions, causes of action, suits, controversies, claims, and 
 demands whatsoever, for or by reason of anv matter, cause, or thing, from the beginninc^ 
 of the world down to the day of , 18 . » = 
 
 In witness whereof, I have hereunto set my hand and seal, this day of 
 
 one thousand eight hundred and 
 In presence of [Signature and seal.] 
 
 [S if/nature of witness.'] 
 
 LEASE. 
 
 ^ _ This is to Certify, That have let and rented unto of 
 
 w \insert description of jjroperty] for the term of [insert length of time] 
 
 g from the day of 18 , at the annual [or otherwise] rent 
 
 g of dollars, payable [insert terms of 2)ayment]. The premises are 
 not to be used or occupied for any business deemed extra hazardous on account of 
 
 < fire, nor shall the same or any part thereof be let, underlet, or assigned, without the 
 
 K written consent of the landlord, under penalty of forfeiture and damage. 
 
 o Given under hand and seal at this day of A.D.l^ 
 
 g 
 
 ^ [Landlord's signature.] [seal.] 
 
 This is to Certify, That have hired and taken from of 
 
 [insert description of the tenement] for the term of [insert length of time] 
 
 from the day of 18 , at the annual [or otherwise] 
 
 rent of dollars, payable [insert terms of payment]. 
 
 ^ And hereby promise to make punctual payment of the rent in the manner 
 
 aforesaid; and quit and surrender the premises at the expiration of said term, or 
 g sooner termination of this lease, in as good state and condition as reasonable use and 
 ^ wear thereof will permit, damages by the elements excepted; will do no waste; and 
 g engage not to let or underlet the whole or any part of the said premises without the 
 a written consent of the landlord, under penalty of forfeiture and damages, and also 
 ^ not to occupy the said premises for any business deemed extra hazardous, without 
 the like consent, under the like penalty.' And provided said rent shall remain unpaid 
 ^ ^ clays after the same tails due, or if lessee shall fail to do any act herein 
 
 g stipulated, or if the said premises or any part thereof shall be underlet^or occupied 
 < for any business deemed extra hazardous, without the written consent of the lessor, 
 H or those having his interests in the premises, then this lease shall become void at the 
 option of the lessor, without notice, and demand of rent and re-entry, notice to quit 
 possession, and every other formality is hereby expressly waived ; and all loss of 
 rent accruing in consequence of re-entry and re-renting the premises shall be borne hy 
 the lessee, and the occupant shall be deemed to be a trespasser, and be dealt with as such« 
 Given under hand and seal at this day of A.D. 18 
 
 [Tenant's signature.] [seal.] 
 
 In Consideration, of the letting of the premises above described; and for the sum 
 of one dollar hereby become surety for the punctual payment of the rent, 
 
 ^ and performance of the covenants in the above-written agreements mentioned, to be 
 >-* paid and performed by ; and, if any default shall be made therein, 
 
 ^, hereby promise and agree to pay unto " such sum or sums of money as 
 
 « will be suflicien; to make up sucn deficiency and fully satisfy the condition of the 
 (/2 said agreement, without requiring any notice of non-payment or proof of demand 
 ^ being made. 
 
 Given under hand and seal at this day of A. D. IS 
 
 [Surety's signature.] [seal.]