^, ^f^"^- IMAGE EVALUATION TEST TARGET (MT-3) // ^ ,^^. ^ ^^> "A^ ^ ^ ^ 75 ^> 1.0 I.I iM 12.0 us IL25 III 1.4 4" Photograiiiic Sdences Corporation 1.6 23 WIST MAIN STREIT WiBSTIR,N.Y. 14SM (716) t73-4S03 7 CIHM/iCMH Microfiche Series. CIHIVl/ICMH Collection de microfiches. Canadian Institute for Historical IVIicroreproductions / Institut Canadian de nticroreproductions historiques C } Technical and Bibliograr;'hic Notas/Notas tachniquat at bibliographiquaa Tha Inatituta haa anamptad to obtain tha baat original copy availabia for filming. Faaturaa of thia copy which may ba bibliographically uniqua. which may altar any of tha imagaa in tha raproduction. or which may significantly changa tha usual mathod of filming, ara chackad balow. 0Colourad covars/ Couvartura da coulaur n~l Covars damagad/ D D D D D D Couvartura andommagte Covara rastorad and/or laminatad/ Couvartura raataurAa at/ou pallicul4a I — I Covar titia miasing/ La titra da couvartura manqua I — I Colourad mapa/ Cartaa giographiquaa m coulaur Colour^ 'ik (i.a. othar than blua or black)/ Encra (e ;oulaur (i.a. autra qua blaua ou noira) Colourad plataa and/or illuatrations/ Planchaa at/ou illustrationa 1% coulaur □ Bound with othar matarial/ Rail* avac d'autras documonts Tight binding may causa shadows or distortion along intarior margin/ La r^ liura sarria paut causar da I'ombra ou da la diatorslon la long da la marga intftriaura Blank laavas addad during rastoration may appaar within tha taxt. Whanavar poaaibia, thasa hava baan omittad from filming/ II sa paut qua cartainaa pagaa blanchaa ajoutias lors d'una raatauration apparaiaaant dana la taxta. mala, lorsqua cala Atait poaaibia. caa pagaa n'ont paa *t4 filmiaa. Additional commants:/ Commantairas suppKmantalras: L'Institut a microfilmA la maiilaur axampiaira qu'il lui a ttt poasibia da sa procurer. Las details da cat axampiaira qui aont paut-Atra uniquas du point da vua bibliographiqua. qui pauvant modifiar una imaga raproduita. ou qui pauvant axigar una modification dana la m^thoda normala da filmaga sont indiquAs ci-daaaous. n~| Colourad pagaa/ n Pagaa da coulaur Pagaa damagad/ Pagaa andommagias Pagaa raatorad and/01 Pagaa raatauriaa at/ou pallicultes Pagaa diacoioutad. stainad or foxai Pagas dAcolortea. tachatAas ou piquias Pagaa datachad/ Pagas dAtachtes Showthrough> Transparanca Quality of prir Qualit* inigaia da I'imprassion Includaa supplamantary matarii Comprand du material supplimantaira Only adition availabia/ Saula Mition disponibia r~~| Pagaa damagad/ r~~l Pagaa raatorad and/or laminatad/ r~~| Pagas discoioutad. stainad or foxad/ I I Pagas datachad/ r~^ Showthrough/ I I Quality of print varias/ r~n Includaa supplamantary material/ |~n Only adition available/ Pagaa wholly or partially obscured by errata slips, tissues, etc., have been refilmed to ensure the best possible Imege/ Les psges totalement ou partiellement obscurcies par un feuillet d'errata. une pelure, etc., ont At* filmAes A nouveau da fapon A obtenir la meilleure image possible. This item is filmed at the reduction ratio checked below/ Ce document est filmi au taux da reduction indiqu* ci>das80us. 10X i4X 18X 22X 26X 30X y 12X 16X aox 24X 28X 32X nv Th« copy filmed h«r« has bMn rtjprodueMl thanks to th* ganarosity of: Seminary of Quebec Library Tha imagas appaaring hara ara tfia baat qMality poaaibia conaidaring tha condition and lagibility of tha original eopy and in kaaping with tha filming contract apacif icationa. Original eoplaa in printad papar covara ara filmad baginning with tha front covar and anding on tha laat paga with a printad or iiluatratad impraa- sion, or tha back covar whan appropriate. Ail othar original copiaa ara filmad baginning on tha firat paga with a printad or iiluatratad impraa- sion, and anding on tha laat paga with a printad or iiluatratad impraaaion. Tha laat racordad frama on aach microflcha •hail contain tha aymboi —»•( moaning "CON- TINUED"), or tha aymboi T (moaning "END"), whichavar appilaa. IMapa. plataa. charta. ate., may ba filmad at diffarant reduction ratios. Thoae too ierge to be entirely included in one expoeure are filmed beginning in the upper left hand comer, left to right and top to bottom, aa many framea aa required. The following diegrama illustrate the method: 1 2 3 L'exemplaira filmi fut reproduit grice i ia gAniroait* da: SAminaire de Quttiec ^<- Bibliotli«que L«s images suhrantae ont 4t4 raproduitea avac la plua grand soin. compta tenu de la condition at de ia nettetA de rexemplaira film*, et en conformKA evec lea conditiona du contrat de filmaga. Lee exemplairaa origlnaux dont la couverture en papier eat imprimte aont fiimto en commenpant par la premier plat et en terminent soit par ia darnlAre paga qui comporta una empreinte d'impreaaion ou d'iiluatration. soit par ia second plat, salon la eaa. Toua lea autrae axemplairas origlnaux aont fiimte en commen9ant par la pramlAre page qui comporte une empreinte dimpreeaion ou d'iiluatration at en terminent per la damiftre page qui comporte une telle empreinte. Un dee aymboiae auh/anta apparattra sur ia damlAre image de cheque microfiche, selon le caa: la aymbola — »> signifle "A SUiVRE". le symbols ▼ signifle "FIN". Les cartae. planchea. tabieeux, etc.. peuvent *tre fiimte i dee taux de rMuction diff Arents. Lorsque le document est trop grand pour Atre reproduit en un soul cHchA. ii est filmA A partir de i'angle aupArieur gauche, de gauche A droite. et de hMut en bee. en prenant la nombre d'imagea nAcassaire. Las diagrammes suivants iiluatrant le mAthode. 1 2 3 4 5 6 1^4 >» "*S^^ COMMEm. " <«i Vf ^- % BY F. Oampbel Advoo ^ \^ SHERBEOOKE, P. Q. 1886. '^eryC£ '^?!raw»'»!W^»ff^BW''l?BPPP' f V I \ HAND BOOK OF COMMERCIAL LAW BY F. Campbell, LL,B. Advocate, SHEEBKOOKE, P. Q. 1886. \ PEBPACE. In this small volume setting forth the es- sential principles of commercial law, the au- thor*s only design is to supply those preparing for business, as well as those already engaged in business, with a book which will enable them to understand its laws, and thus protect their interests in all commercial transactions wherein they might be parties. Respectfully, F. Campbell. Sherbrooke, 21 Dec. 1886. *■*» INTRODUCTION. Commercial Law is that part of the law which regulates commercial transactions; it grew out of the customs and necessities of business. It is unnecessary to state that the know- ledge of the principles of this part of the law is of the highest importance to all classes of men, and especially to business men. m it is invoked, excepting where theie is a partial deliverv in the case of personal property, and this kind of property, also called moveable property is the one to which commercial r^ — 12 — law applies almost entirely; or pa\^ment of an account on the price thereof. I If ! \ of an — 13 ~ CHAPTEE II. Sale of personal prorerty. A pale is a contract by which one party transfers to another his title and right as owner in a certain thing, in consideration of some price paid by the person acquiring. Parties competent to contract are here ne- cessary the same as in all other kinds of con- tracts. The thing sold must have either an actual or a potential existence at the time of the sale. A horse is sold, which the parties believe to be alive, but which was in fact dead, the contract is void. An expectation founded upon mere chance may be the subject of sale, such as the product of a certain field. The contract of sale is pei-fected by the sole consent of the parties, although the thing sold be yet undelivered ; but, of course, the seller has a lien, that is a right of retention, on the goods and can withhold them so long as their price is not paid ; except where time is given, in other words, when the goods are sold on credit, when the buyer is entitled to immed- iate possession, unless indeed, subsequently to the sale and pi-ior to delivery, the buyer should — 14 — become insolvent, in which event the sellei' would not be obliged to deliver except for cash or on being sufficiently secured. In the case of goods sold by the measure or weight, etc., the contract of sale is completed only when their quantity has been establit^hed by the weighing or measuring of the same ; but the buyer can always claim delivery, and in the event of refusal or failure to deliver, he may obtain damages. The law will enforce all sales, provided every part of the agreement is entered into in good faith and in the absence of all fraud or mistake. The mistake would have to be o the fact and not of the law, as every citizen is bound to know the latter. However, where a party voluntarily chooses to remain in igno- rance, when ample opportunities of informa- tion are afforded him, he can hardly expect relief, should he later discover defects. The law certainly expects every man to be reasonably careiul in his dealings; and al- though it will not allow any one to be cheated into giving assent to any agreement, yet it will not exact disclosure of such defects as are equally open to the observation of all parties. Bar keepers or liquor dealers of any kind, selling intoxicating liquors to be drunk on the premises to any other but travellers, haAO in I \ seller pt for n the eight, only ed by ; but md in 3r, he Dvided nto in lud or o the zen is here a igno- Torma- expect to be id al- leated yet it ts as of all kind, 9n the AC in ~ 16 — law no action to recover the price of such liquora. There can be no contract of sale between husband and wife. Tutoi*s and Curators cannot purchase the property of those under their care, except in sales by judicial authority ; nor can mandata- ries or agents purchase such property as is entrusted to them for sale. In fact the same rule applies whenever parties are so situated with regard to property, as to create a strong presumption that tney would favor themselves to the prejudice of the public or any particu- lar individual. The sale of a thin^ which does not belong to the Vendor is null, excepting in commercial matters when the Vendor acts as agent, etc., or where it aftei'wards happens to become the Vendor^s property. In the case of a thing lost or stolen, if pur- chased in good faith at a fair, market, puolic sale or from tradera in things similar, the owner cannot revendicate or reclaim it with- out reimbursing the buyer the price paid for it. This does not apply to judicial sales when there is no revendication possible. Should the buyer become insolvent before the ^oods have been delivered, the seller may retain them, and in the case where they have been shipped, the seller has the right to stop them before they reach destination. — 16 — Warranty. Is either express or implied. The express may consist of any positive written or oral affirmation made by the vendor at the time of the sale in relation to the goods sold. Implied warranty consists in the interpreta- tion which law and custom give to the per- formance of certain acts. For an example, if I sell you an article of any kind, there is im- plied warranty that I am owner of this article, or at least; that I have a right or tit^e in the same sufficient to allow me to sell it. v — 17 — implied, positive I vendor ? goods erpreta- he per- tnple, if is im- article, in the ^1 CHAPTER III. Negotiable Paper. Is a species of personnal property,, possess- ing a peculiar mercantile property found in its t! ansferable quality. It is in commerce an instrument of the greatest help and importance. It originated chiefly from the customs, usages and require- ments of ti'ade. There are several kinds of such paper, the best known and the most in use being the Bill of Exchange, the Promissory Note, the Check, Bonds, Bills of Lading, etc. The Bill of Exchange is an order or request from one person to another for the payment of a sum of money, without any condition and at all events to a third party. The necessity of providing some safe and eas}^ way of trans- mitting money or making payments fjom one place to another was felt by traders as far back as Uill, and it was found in the Bill of Exchange. The bill of exchange must necessarily be in writing, payable at all events, and contain the name of the drawer, that is the party writing or making the bill. The person to whom the ietter is directed is termed the drawee and the — 18 — person in whose favor it is made the payee^ New parties may subsequently be adcled to the bill, as where the payee endorses the same by writing his name on the back to transfer it to another party who becomes the endorsee, more generally known as the hold- er. He also may do the same thing to another and so on ad infinitum. Other parties may be warrantors upon the face of the bill, as generally expressed par avalj as when one puts his name on the bill to strengthen its worth simply as a warrantor, for any one of the parties on the paper j as well as acceptors an hesoin^ to whom the payee is referred in case the intended acceptor s ac- ceptance could not for some reason or other be obtained ; and supra protest, who accepts to save the credit of the drawer as a mere act of fiiendship or courtesy. The bill of exchange can bo made payable to tha parly therein named, to his order, to the drawer's order or to bearer, for it is the great object of commercial paper that it be almost as easily transferable as bank notes, and it is only in that manner that it can facilitate the ends of trade in the way it does, by securing the most perfect, rapid and safe method of trans- fering the large sums of money such paper represents from one hand to another, from city to city, in fact, from country to countr3^ ] ' payee, cicfed to •ses the back to nes the e hold- another )on the Jed par i bill to •ran tor, )er J as 5 payee )rs ae- ther be 'pts to act of ayable to the gi^eat lost as sonly ends ^ the rans- 3aper from — 19 — If the name of the payee should happen to be left in blank, its legal holder may nil it up. If no time be specified in the bill for its pay- ment, it is held to be payable on demand, and if no place for such payment is specified, it is pfiyable generally. Bills of exchange ai-o of two kinds: foreign and inland. By foreign is meant one drawn by a person in one country upon one in an- other country ; the Foreign are generally drawn in sets of several parts all of which the drawer is bound to deliver to the payee. The Inland bill i<» one drawn by a person of a country upon another also in the same coun- try. The transfer of a bill of exchange is accom- plished by endorsement, when made to order; when payable to bearer, it is of course trans- ferred by simple delivery. The transfer by endorsement is either in blank or in full. The endorsement is in blank when maue by the endorser's only writing his name on the back of the bill and no more. This endorser must of course be the person to whose order the bill is made payable. The endorsement in full is a i^estrictive one, and occurs when the paper is endorsed as made payable to the endorsee or his order, and then signed by the endorser. By the first mode of endorsement, the bill, f made payable to order, is after the first 1 — 20 — {)ayce or endorsee's endorsement, transferable )y mere delivery ad infinitum. By the second, it can only be transferred through the endorsement of the endorsee. The transfer may de made before or after the maturity of the bill j but with this great difference which no one should ignore, that in the first case the holder acquires a perfect title free from all liabilities and objections which any parties may have against it in the hands of the endorser ; while in the other it is open to all the liabilities and objections which could have been raised against it, when in the hands of the former holder. The person receiv- ing the bill before maturity does so upon, the credit of the paper alone, and is not bound to inquire into any equities or defences which might be raised by prior parties. The neces- sities of commerce require it to be so. But if it be received after due, the matter is altoge- ther changed, for the bill is then disgraced and this gives rise to the presumption that there must have been some reason why it was not duly honored. Such reason in fact as makes it incumbent upon the party receiving it to look into the merits of this cause or reason. But here as ever}^ where else the law exacts good faith. An endorsement may be restrictive, quali- fied or conditional, and the rights of the hold- er under such endorsement, ai'e regulated ac- / -21 — cordingly; but no endorsement other than that Ly the payee can stop the negotiability of ihe bill. The endorsement may be so worded as to restiain the negotiability of the instrument, but in such case there must bo an unequivocal intention to restrain. Acceptance.— Bills of exchange payable at sight, or at a certain period of time after sight or after demand must bo presented for accept- ance. The presentment is made by the holder or in his behalf to the drawee or his repre- sentative, at his domicile or pl^ce of business, or if the drawee be dead or cannot bo found and is not represented, presentment is made at his last known domicile or place of busi- ness. If there be also a drawee au besoin, pre- sentment must be made to him in the same manner. By drawing and delivering the bill, the drawer is understood to contract with the payee and every subsequent holder, that the drawee will, upon presentment and demand of payment thereof, accept and pay the bill ac- cording to its tenor. This presentment for acceptance when ne- cessary, must be made within a reasonable time from the making of the bill. Thr acceptance must be in writing upon the bill. No particular form is necessary. The law holds expressions indicating an intention to pay the bill when duo, sufficient. It must — 22 — be absolute and unconditional ; however, if the holder agrees to a conditional or qualified acceptance the acceptor is bound by it. By acceptance the drawee becomes the principal debtor and liable towards any bona fide holder receiving the bill in the ordinary course of business. In the case of refusal or inability to accept by the drawee mentioned in the bill, there can be a particular kind of an acceptance known as " Acceptance for honor," which happens when, }fi order to secure the negotia- bility of the bill or save the credit of it* drawer or of any of the endorsers thereon, some friend steps forward, and with the hold- er's consent, accepts the bill in the place and stead of the intended drawee. This accept- ance only benefits the parties who are subse- quent to the one for whose honor it is made. This acceptor for honor is bound to give im- mediate notice to the party he so accommo- dates, for this is really an accommation ac- ceptance, of his acceptance as well as to all parties who may be held liable to him on the bill. When this acceptance for honor is made after the bill has been protested, it is called acceptance supra protest. Noting and protest for non acceptance. —If the drawee refuses or fails to accept the bill, it ma}^ be forthwith protested for non ac- — 23 — ceptanco, and after due notice of such protest has been given to the parties liable upon the bill, the holder may demand immediate paj - ment of it from such parties exactly as if the bill had become due, and been protested for non payment instead of for non acceptance. This frees the holder from the obligation of presenting the bill for payment, or if he does so to give notice of dishonor. The law provides also that instead of pro- testing for I'efusal to accept, the holder has the option of having the bill noted for non ac- ceptance only ; when no notice to the parties secondarily liable is necessary. Although the student, from what has been already said, very likely understands what is meant by parties secondarily liable, I might as well add hero, that the law distinguishes two classes of parties in negotiable paper. Those who are primarily liable, who are the real debtors, such as the acceptor in the case of a bill of ex- change, and the maker in that of a promisso- ry note ; and those who are secondarily liable, whose liability is contingent, conditional upon the failure of those primarily liable to pay, such as the drawer and endorser of a bill, and endorser of a note. I should here also mention another division of negotiable paper into business and accom- modation. The former is where the acceptor of a bill of exchange or the maker of a note fj' H I — 24 — is really indebted ; and the latter, on the con- trary, when there is no indebtedness, the pa- per being given or accepted simply to oblige, to enable the party to whom it is given to raise money. In the first case, the payee or holder has a right of action against the ac- ceptor or the maker as well as any subse- quent party in whose hands the paper may have come; in the second case, those only to whom the paper is transferi-ed for value and in due course of law can exercise this right. The noting and protest must be done by a Notary Public, and in case the services of none can be procured, any justice of the peace is empowered to do the same. The only object of these formalities is to secure the holder's recourse against the draw- er and endorsers. Payment.— Every bill of exchange not protested for non acceptance, as already said, must be presented for payment by the holder or in his behalf to the drawee or acceptor, in the afternoon of the third day of its maturity, or after presentment for acceptance if drawn at sight ; should this day happen to be a legal holiday, then on the next following juridical day. This presentment must be made wherever the bill is made payable either by indication therein or by qualified acceptance. If it be payable generally, the presentment must be made to the drawee or accentor, as the case i M — 25 — the con- tbe pa- 3 oblige, ^iven to >ayee or the ac- Y subse- )er may only to liie and right, le by a vices of be peace )8 is to e draw- ge not iy said, holder sptor, in aturity, drawn a legal uridical herever lication f it be fiust be be case may be, eithei* personally or at his residence," office or usual place of business; in the case of absence, or of no such places being known, then the prese'ntment can be made at any of such places where the drawee or acceptor was last known to reside, where thea cceptance, or if there be nore, where the bill bears date. Should the maker in the case of a note, or acceptor in that of a bUl, be a firm, the de- mand of payment is made of one of the mem- bers. In case of death, the demand is made of their heirs or legal repi'esentatives. Payment of a lost bill of exchange may be recovered upon satisfactory pi oof of the loss being made by the holder, and by giving secu- rity to the parties if the bill be negotiable. The party paying the bill should be careful to have it delivered up to him, or have his payment endorsed upon it so as to avoid the risk of paying a second time to some one who was a holder before maturity. Payment of a bill may be enforced by action against the drawee, if he have accept- ed ; against the drawer and endorsers in the event of deshonor, by refusal to acceptor pay. All these parties being jointly and severally liable, they may be included in one suit. Protest for non-payment.— If not paid when presented for payment, the bill must be protested for non payment on the last day of grace which is, as has been already said, the \m <' "Mi liii .t: — 2G — third after maturity, and notice thereof be given to any party on the bill whose liability the holder wishes to keep alive ; and as in the case of non acceptance, should 'this formality be omitted, the parties liable other than tho acceptor will be discharged. Still tho drawer can only avail himself of the want of protest and notice if he can establish that he had duly provided for the payment of the bill. Protest and notice thereof is rigorously re- quired by the law and nothing but impossi- bility by inevitable accident or irresistable force will excuse it. It can of course be waived bj' any party to the bill in so far as his rights are concerned. The object of the performance of these for- malities is te secure xull and perfect remedy against drawer and endorsers who are only secondarily liable ; their obligation being con- tingent upon the principal debtor's default to pay. By his action the holder can recover the amount mentioned in the paper with in- terest and all expenses cccasioned by non ac- ceptance and non payment. ^ii; -^m — 'be given ility the i in the brmality than tho drawer F protest had duly Dusly re- irapossi- resistable lourse be 10 far as hese for- j remedy are only eiug con- lefault to 1 recover with in- r non ac- CHAPTEE IV. Promissoby Notes. ^ A promissory note is a wi-itten promise to . pay a certain sum of money absolutely. It ,; must be signed by the party who promises, 1 who is called the maker. His obligations are I similar to those of the acceptor of a bill of ? exchange. ^ The party to whom the promise is made, in whose favor the note is made, is called the payee. The promissory note, unlike the bill of ex- I change, is a pi'omise and not an order. Yet although they differ in form, still in the hands of the payee and every subsequent holder, they are precisely alike and are consequently governed by the same principles of law. The Civil Code of our Province says that: *' The provisions concerning bills of exchange ap])ly to promissory notes when they relate : lo. To the indication of the payee; 2o. The time and place of payment ; 3o. The 3xpression of value ; 4o. The liability of the parties; 5o. Negotiation by endorsement or delivery ; 6o. Presentment and payment ; 7o. Protest for non payment and notice, a — 28 -. Promissory notes perfoi^m as great a mrt in the business world as bills of oxohanr and perhaps a greater; for of the two forms^of no gotmble papo.. thoy aie the most in use ,M •>() _ te through Lt a part in iange and I'ms of ne- use. CHAPTER V. Cheques. The cheque is a written order upon a bank or banker for the payment of money. It may be made payable to a partieuhir person or to order, or to bearer, and is negotiable in the same manner as bills of exchange and pro- missory notes. They are payable on present- ment and need not be presented for acceptance apart from payment. Nevertheless if accepted, the holder acquires a direct action against the bank or banker, without prejudice to his claim against the drawer, either upon the cheque in case of re- fusal to pay by the bank or banker and with- out protest, or for the debt it represents ; in the latter case, after retui-ning it to the draw- er with reasonable diligence. If the cheque be received from any other party than the di-awer, the holder may in like manner retui-n it to such party, or he may re- cover from the parties whose names it bears. The rules which apply to bills of exchange also apply to a great extent to cheques, for in its form the cheque is ve>'y analogous to the bill of exchange; the differences between them being partic^lai'ly as we have seen :. ' 'I lo. Thai cheques are always drawn upon a Bank or banker ; 2o. That they are payable on presentment, w^ithout days of grace; 3o. That they a»'e not required to be presented for ac- ceptance, but only for payment. Cheques arc not due until presented for pay- ment ar 1 can be negotiated at any time pre- vious to that. They should be presented as soon as possi- ble, for the law says that : If the cheque be not presented for payment within a reason- able time, and the bank should fail between the delivery of the cheque and such present- ment, the drawer br endorser will be dischar- ged to the extent of the loss he suflPers there- by. ^ i I I •r ;2i -•81 n upon a 5ayable on 3o. That (1 for ac- 'd for pay- time pre- as possi- heque be a reason- between present- (lischar- rs there- CHAPTEE VI. Interest. B}^ interest is meant the remuneration or compensation paid by one party to another for the use or detention of his money. It oc- curs in the case of a loan of a sum of money at a stipulated rate of interest, also on a debt overdue, or from its creation if there is an un- derstanding to that effect. A judgment will most always carry interest from the time the party against whom it is given has been sum- moned to answer the Plaintiffs demand. It was for a long time considered to be usu- ry for any one to loan money at a high rate of interest, at all events above that fixed by statute ; but now the Courts would not refuse to grant any such interest as might fairly be agreed upon. The legal rate of interest is generally un- derstood to be six per cent and, if not men- tioned, it is the rate collectable. For instance, if a note be payable, let us say at three months from the date it bears without in- terest and is not honored at maturity, the holder can along with the amount of the note exact interest at six per cent from its maturi- lil III -^32 — On running accounts interest is allowed from the demand of payment, which is gene- rally judicially made, that is by summoning the debtor before the Courts ; still when the time of crc'lit is limited and there is an agree- ment eithe express or implied to pay at a certain tinu', intei-est certainly begins to run fi'om the expiration of such time. Interest allowed on judgments is also at the rate of six per cent, unless it be rendered upon a claim or obli";ation beai'inii: a different rate according to stipulations. Compound interest, i.e., interest upon in- terest, is allowable when there is a contract to that effect, either express or implied. ,j*. ,*^' 33 — .''i v^ HAPTBE VII. Agency. Agency which is known in our Code as Mandate, is a stipulation wherein a person called the Principal or Mandator commits a lawful business to the management of another who is called the Agent or Mandatary. In a few words, the agent is an authorized person to do some act or series of acts in the name and place of another who is the agent's prin- cipal : it is a substitution of the agent for the principal. For it is a recognized principle of law, that : whatever a man can do in his own right, he may generally speaking appoint an- other to do for him. Agents are also known under other names according to the business they do, such as the Factor, who is an agent for the sale of proper- ty ; and the Broker who simply negotiates sales without the property being placed into his hands. Agency may be express or implied. Ex- piess, when there is a special delegation of au- thority ; and implied, when the agent acts to the knowledge and with the apparent consent and approval of the principal. i) ^ fu^ w — 34 — It is cssontially a gratuitous contract, but in general business is of'tener than not, under- taken for a remunoiation, the amount of which is reguhited by usage or by an agree- ment between the parties. It may be for a special undei'taking or for the management of the principal's aft'airs gen- erally. But in the latter case, it only eompre- hends acts of administration. For acts of alienation or which tend to transfer owner- ship, in real state particularly, the mandate or power must l)e special and express to that effect. The agent must never exceed the limUs of his mandate, unless it be in things incidental and immediately connected with the affairs he is empoweied to administer, and then only if he cannot communicat3 with his principal. Subject to the rules concerning them, mi- nors and married women may be agents. I might say that the only disability here is in the case of natural defects either physical or mental. The agent is strictly and under penalty of damages bound to fulfil the obligi;tions of his mandate faithfully and to the be?kt of his ability, the law will expect him to care for his principal's interests even after the expiration of his authoi'ity for a reasonable time, unless it be revoked by the Pi'incipal, when the com- pletion f some urgent busincvss oi' the absence \ - 35 — of his principal or other like causes require it. Ho is also answerable for any person whom he should substitute to himself in the manage- ment of the business to wlilch he is appointed. So strictly does the law interpret the good faith which should exist in the agent, that it forbids him becoming in any way personally interested in the business he manages; should for instance, the agent's employment be to sell or buy goods for his principal, the Courts would invalidate any sale or purchase which he would make to or from the principal, act- ing as agent of course The agent's liability is always construed after his agreement with the principal, and he is answerable to him for all his acts. He is bound to render him a true account of his administration whenever called upon to do so and particularly at the expiration of the man- date. So long as he acts within his powers, and third parties have ample opportunity to know thf»t he is acting simply as agent, he renders his principal alone accountable towards them, but if he should exceed them, then he alone is answerable, unless he does so to the principal's knowledge who either tacitly or expressly ratifies the act. Should the third party know that the agent is exceeding his powers, then the third party deals with him at his risks ; but if in good faith, and when the principal im . , ■ ,m, — 3(3 — has given him good cause to believe the agent empowered to act as he does, the principal is then liable to him The principal is bound to indemnify the agent for all obligations, liabilities, expenses and losses which he might incur when acting strictly within the limits of his powers, as well as to pay the salary due him for his ser- vices, for which the law grants him the right of lien or retoiition upon whatever property of the principal he might have in his possess- ion, however pi'ofitable the business con- fided to him might prove for the prinv-ipal so long as no fault would be imputable to him. The agent must be very careful and not forget that when his instructions are explicit, he must strictly follow them, unless such un- foreseen necessity or circumstances should arise as would warrant any prudent man in deviating from them, or where such instruct- ions would be contrary to law and ordei*. In the absence of instructions the agent must persue the accustomed course of that bu- siness entrusted to him. As already stated the agent is bound to use ail ordinary attention, skill and care in the execution of his mandate. A Factor for instance, is liable to a certain extent for the safety of the goods put in his possession and is expected to look after them as carefullv as he would after his own. B agent ipal is fy the pensea acting Qrs, as is ser- ) right 'operty , 'Jssess- is con- ipal so him. [id not xplicit, ch un- should nan in 1 struct- • agent hat bu- to use in the certain in his • them -3t- We have already seen that the principal would be rendered responsible towards third parties by his agent acting within the scope of nis authority, he is moreover, liable towards them for the negligence or un.-^kilfulness of the agent while in the execution of his man- date. So closely does the law identify the person of the agent with thai of his principal that it even seems to hold the latter responsi- ble for the former's wilfully wrongful acts, un- less the principal can satisfactorily establish that he was unable to prevent the act. I might here add that our Code applies this rule to parents for the acts of their minor children, to tutors and curators for the dam- ages which the parties under their custod}^ might cause ; as well as to teachers and pa- trons for their pupils and apprentices, pro- vided always. that they might have prevented the evil. As already stated, brokers are a class of agents whose particular business is to nego- tiate purchases and sales between parties. Factors, also known as commission meachanta, are agents to buy or sell goods for another, either in their own name or in that of the principal. They can be both parties' agents, that is, in a sale for instance, they can be the seller's as well as the buyer's agent, and bind them both by their acts. The fector can con- duct the business either in his own name or in ~- 38 — that of his principal ; but if the latter be ab- sent in a foreign country, the factor is person- ally liable lo the third parties with whom he contracts. From the foregoing principles we under- stand, that: any person can safely contract with any agent for goods in his possession, or of which he is entrusted with the documents of title, such as bills of lading,, warehouse keeper^s receipts or orders for delivery of goods etc. The principal may at any time revoke his agent's mandate, but here it must be remarked, that ho cannot do so to the agent's detriment or damage without indemnifying him. This revocation must be made reasonably public, if not, third parties who in ignorance of it have contracted with the agent since it was made, have a full recourse against the principal, whose duty it was to give sufficient notice of the revocation The agent can also renounce his mandate, after giving bis principal reasonable notice of bis intention to do so, but must do so at a time when such renunciation will not be inju- rious to the pi'incipal, unless there be a rea- sonable cause for it ; otherwise he will be liable towards him for all damages which h» might suifer thereby. H Im 39 — CHAPTER YIII, Partnership. Partnership is the relation existing between persons who have agi'eed to combine their property, labor or skill in some undertaking or business, and to share between them the profits as well as the losses, arising therefrom. It is strictly essential to this agreement that it should be for the common profit of each of the j)artners who must contribute to it, in all or some of the things stated. The receipt of a share of the piofits or of an income varying with the profits made, does not necessarily in- dicate the existence of a partnership, for this might be simply the salary offered the re- cipient for his services as servant ; but it is perfectly lawful, (and often happens.) for a partner to stipulate that he will simply devote his time, skill and experience to the common undertaking. As legards third parties, any agreement tending to exclude one or more of the part- ners from losses, is null. The business may be carried on under any business-name which the partners choose to adopt, care being taken not to assume any ,^ » — 40 — style already borne or adopted by some other firm. Partnerships are either Universal or Part- icular. They are also Civil or Commercial. Universal partnership may be either of all the proi)ertyy or of all the gains of the part- ners. In universal partnership of property, all the property of the partners moveable and . immoveable, and all their gains, as well pre- sent as future, are put in common ; but unless the contrary is expressly stipulated, universal partnerships are presumed to be only of gains. Particular partnerships are those which ap- ply only to certain determinate objects. Partnebships contracted for a single en- terprise. —Commercial partnerships are those which are contracted for carrying on any trade, manufacture, or other business of a commercial nature. All others are civil part- nerships. Commercial partnerships are divided into: General, Anonymous, En commandite or Limh ited and Joint Stock Companies, Before explaining these different kinds of partnership, I will mention and define the dif- ferent kinds of ]>artner8, which are : lo. the Nominal, who have no actual intei'est in the business or profits, and therefore ai-e not part- ners as between them^selves, but as they allow their names to be given out to the public as suehy and thereby stiengthen the credit of the m — 41 - firm, they render themselves liable towards third persons. 2o. The real, who are in every way truly partners. 3o. The dormant, who also are in every res- pect partners, but who attempt to evade the obligations cf the partnership, by concealing the fact of their interest. So long as they remain unknown they are safe, but the mo- ment their names are disclosed, they become equally liable as the rest ot the partners, whether the firm was trusted on the strength of their membership or not. There is also the Limited Pai-tner, who is simply a contributor in a certain amount to the funds of a partnership in which his liabili- ty towards its creditors is limited to the sum contributed. His name does not appear in the firm, nor can he transact business on its ac count. General partnerships are those formed for the purpose of carrying on business under a collective or firm name, consisting ordinarily of the names of the partners, or of one of them. All of whom are jointly and severally liable for the obligations of the partnership. The partners may make such stipulations among themselves concerning their i-espective powers in the management of the partnership business, as they see fit, but with respect to third persons dealing with them in good faith, — 42 — ■! each partner has an implied power lo bind the partnership for all obligations contracted in its name, and in its usual course of dealing and business. . Anonymous partnerships are those having no particular name or tii m. The partners' liabilities here are the same as in partnerships unde:' a <3ollective name. The partnership En comi^andite or Limited par*ne /^j, is one wherein \here are one or more ] : ons called general partners, and one oj' more persons called special partners, who contribute m t o payments a specific sum or capital to the coiiimon stock. The general paitners who are jointly and severally respon- sible, being alone authorized to transact the business of the firm and bind the same. The special partner is entitled to a certain share of the profits, according to stipulations and is liable for the debts of the partnership only to the extent of his conti'ibution. Joint Stock Companies are those which, on account of the great number of pai'tners, re- quire the adoption of certain peculiar regu- lations. They are formed either under the authority of a royal charter, or of an act of legislature when they ai'e governed by its provisions, it formed otherwise, they generally come under the same rules as partnerships under a collective name. .sum or The contract of partnership, as well as its stipulations are generally evidenced by art- icles formally executed, although it can be formed by verbal agreement, and if no time be designated for its coinmencemont, it takes effect from the date of the contract. If no mention is made of the period of its duration, it is presumed to be life long, that is, as long as every one of the partners live. I must here mention, that our Code makes it a strict obligation for partnerships formed to carry on certain trades and traffics, to deliver to the Protonotary of each district, and to the Eegistrar of each county in which they carry on such business, a declaration in writing, stating the object of their partnership, the names of its members, and the time from which it dates ; the omission to yjerform this duty will subject the parties contravening to certain penalties. The object of this provision of the law, being to afford the public a certain protection, a source from which they can derive such in- formation as will enable them to ascertain who they are dealing with, when transacting business with such firms. No partner, whether he has signed or not this declaration, will be deemed to have ceased to be '^uch untill a new declaration, showing the change, has been made. — 44 — Partners who-^e names would bo omitted in the declaration could not thereby disclaim lia- bility for any of the firm's obligations. The moment any one by conduct, or by words written or spoken, leads another to be- lieve that he is a member of the fii'm, he rend- ers himself responsible to him as such. Each partner is bound to contribute to the partnership all he has agreed to, and owes in- terest upon the same from the day he is in default of paying in his share ; being liable as well towards his co-partners for all damages he might cause them by such default, which is also a valid reason for the dissolution of the partnership. As well as the capital promised, every member of the partnership must devote to the common undertaking, the skill and industry which he has agreed to contribute' without the least deviation. The principle being that the contract once formed must be strictly adhered to, and can only be rescinded or varied by the con .ent of all the partners and not otherwise, and that the partners are bound to carry on the busi- ness of the film for the greatest common ad- vantage; to be true and faithful to each other, and to render true accounts and full informa- tion of all things affecting the partnership to any partner or his legal representatives, when reasonably requested. So that if a partner, -45 — without the knowledge and consent of his co- partners, carries on any business competing or interfeiing with that of the fiim, he must ac- count to the firm for all the profits made in such business, and must make compensation to the firm for any loss occasioned thereby. To show to w^hat extent the law exyjects the faithfulness of co-partners to be carried out botween them, 1 will quote article 1843 of our Civil Code which suys, that: " When a part- *' ner is credit|)r individually of a person who ** is also indedted to the partnership, and both " debts are actually payable, the imputation of " any payment received by him from the " debtor is made upon both debts in proportion *' to their respective amounts, although by the *' receipt he may have imputed it upon his *' pi'ivate debt onlj- ; if by the receipt he im- " pute the payment wholly upon the partner- " ship's debt, such im})Utation is to be main- " tained." Each partner is liable to the partnership for damages caused by his fault, and on the other hand, can recover moneys disbursed and be indemnified for obligations contracted in good faith for the firm. When there is no agreement concerning the shai'es, the partners participate equally in the profits and losses. In the absence of any special stipulation as to management of the firm business, it is pre- — 4 the special partners for the management of the firm's business, as oi'dinary partners under a collective name. In case of insolvency, the special partners have no claim against the partnership until all its other creditors have been satisfied. Limited partnerships, 1 must not omit to say, cannot be formed to carry on the business of banking or insurance, and their dissolution cannot take place but at the tim ; stated in the certificate required for their formation, unless certain regulations requii'ed by law are com- plied with; and which are: a notice fyled in the office or at the place where the certificate mentioned was registered, and publication of the same notice during a certain time, in cer- tain papers. Joint Stock Companies. -In this species of partnership which is usually formed, in this Province, under a special statutory charter or under a certain act known as: the "General Joint Stock Companies Act." In either of which cases the liability of the shareholders does not exceed or go beyond the mere loss of the stock held by them, should the Company become insolvent. When not coming under any of these cases, then the partners' liabili- ties toward third persons are generally gov- 50 -■ ' i orned by the same rules and principles which regulate the common commercial partnership In these partnerships, the stock is gen- erally divided into shares, made transfer- able by assignment or delivery, and the busi- ness is conducted by a choosen board of di- rectors. Under certain restrictions any part- ner may transfer his shares, but no partner acts personally in the affairs of the Company, the execution of their business being entrusted to officers for whom the partnership is respon- sible, though the superintendence of such offi- cers is frequently committed to directors choosen from the body at large. Partnership is dissolved by various causes, such as by the expiration of the time fixed for its duration ; by the loss of its property or the accomplishment of its object, bankruptcy, death, etc. Those which are not limited as to duration can be dissolved at the will of any one of its members, by his giving notice to his co-part- ners of his intention to withdraw, provided he does so in good faith and at such a time as will not be unfavorable to the partnership. A failure^o fulfil his duties, gross miscon- duct or physical or intellectual infirmity on the part of one of the partners, will also be a cause of dissolution of the partnership. The death of one of the j^artners will also be a — 51 — cause for dissolution, unless there be some provision to the contrary. After dissolution, excepting for the comple- tion of business begun during its existence, the partners' powers to act for the partnership cease, still a partner acting in ignorance of the dissolution and in good faith, binds the others. Upon dissolution, each partner or his legal representatives may demand an account and division of the partnership property. The partnership creditors have a privilege upon its property for their claims, and have a right to be paid out of it in preference to its members, private creditors also have a recour- se against the partners* private property, when that of the firm is not sufficient to cover their claims, but then they only rank after such partners' private creditors. CHAPTER IX. Lease and Hire. This is a contract wherein a price or com- pensation is to be given for the use of personal property, oi* for labor, or both combined. There is als4 the hire of houses and farms which is to a ceriain extent governed by rules particular to such contract. In the lease or hire of things, one party called the Lessor grants another party called the Lessee or hirer, the use of a thing for a certain time, in consideration of a certain sum or rent. In that of labor or services, the less- or undertakes to perform certain work for the lessee, on the same condition, i.e., for consider- ation. Our Code says, that : " The principal kinds of work which may be leased or hired are : '* lo. Personal services of workmen, servants and others; " 2o. The work of carriers, by land and by '' watei", who undertake the con^'^eyance of persons or things ; " 3o. That ot builders who undertake work b}^ estimate or contract." In the first case, the employer is bound to pay the j)rice stipulated, and conform to all K (< U ii ^gj^£2 •■bSfJf.-aaflJBfcB mugm — 53 — : the stipulations of the agreement with his em- ployee. The workman on his side must perform his work faithfully, diligently and well, and also act up to the agreement. In the case of carriers who undertake the conveyance of persons or things, such as pro- prietors of railroad cars, steamboats, canal boats, stage coaches, as well as truckmen, teamsters, carters, etc., who make it their bu- siness to carry people or goods from one place to another for compensation ; the law declares them, in the case of property delivered to them for transportation, responsible for loss or damage caused in any way whatever, except- ing where a theft would be committed by force of arms, or the damage would happen through inevitable accident or the owners own acts of carelessness, or from defects in the thing itself. The carrier may qualify his liability by a general notice to all who employ him, of any reasonable requisition to bo observed on their part in regard to the manner of delivery and entry of goods, etc., but he cannot limit his responsibility imposed upon him by law, for his own gross neglect or misconduct. This res- ponsibility begins when the goods are delive- red to the carrier, or to his proper servant, authorized to receive them for carriage. They are bound to carry for all pei'sons that apply, — 54 — unless they have good reasons to refuse ; but they are not obliged to receive goods which it is not their custom to carry, nor when their means of conveyance are all taken up, or before they are ready to depart. They may demand their charges in advance, and these charges, for the same service, must be the same to all customers. The delivery of the goods at the station or point where shipped, must be done within the stipulated time, if any is stipulated, and at least according to the ordinary and reasonable course of business, under penalty of damages, unless there is some reason of fortuitous event, or irresistible force. The carrier is neither bound to deliver to the consignee personally, nor to give notice of the arrival of the goods, unless they arrive before or after time. Tne reception of the goods transported and the payment of freight upon them, without protest, extinguishes all right against the cai*- rier; unless there should be damage or loss such as could not have been known or dis- covered at the time when such receipt or pay- ment was made, in which case a claim must be fyled immediately the loss or damage is ascertained. ■ The goods shipped are generallj^ mentioned and described in a document or paper called the bill of lading, and whieh is evidence of the ( contract entered into by the carrier and con- signor. Carriers of passengers are only liable for their negligence. Their undertaking being that as far as human care and foresight goes they will carry safely. But a v^ery small degree of negligence is sufficient to render them liable. Thoy are liable in damages if their trains do not start accoi-ding to time table. But special damages must be proved. They must carry all that offer unless they have some reasonable excuse. For instance they are not bound to receive passengers who refuse to confoim with reasonable regulations, or are not of a quiet and peaceful behaviour, or for any i*eason are not fit associates for the other passengei-s : as if affected b}^ contagion, 01' in any way oifensive in person or conduct. Pessengers must produce their tickets when they are called for by a conductor having the official cap and badge, who may put off the train a passenger i-ef using to do so ; but the carrier's servants cannot arrest a passenger for non-production of his ticket. Passengers must be allowed reasonable time to alight at destination. The carrier is bound to give warning or signal on leaving stations, and his neglect to do so will subject him to damages towards parties left behind thereby. --5() — I"'-. In the case of stoppage by snow blockade, the carriers are bound to make all i-easonable exertion to forward the passengers. Carriers of passengers are liable as common carriers for their ordinary baggage, and a check is evidence against the carrier of the re- ceipt of such baggage. Checking however, is but an extra precaution to prevent the bagga- ge being given to the wrong persons, as the carrier will be in the same manner responsi- ble for the loss of unchecked articles. If a check be refused when demanded, the carrier will be liable to a fine. If the passenger choose to take the exclu- sive control of his own baggage, the carrier will not be liable for the loss, unless caused by the carrier's own negligence or fault. The responsibility of the carrier for a pas- senger's baggage, after it has reached destina- tion, continues until the owner has had reason- able time and opportunity to take it away. After that, the carrier is only bound to give it tne same care as any prudent man would to his own property and no more. The carriers would not be held liable for large sums of money or other securities ; or for gold, silver, precious stones or other arti- cles of an extraordinary value, contained in any package received for ti'ansportation, un- less it is declared to them that the package contains such valuables. — 5T The hire of work by estimate and con- tract.— Is that wherein a part}" undertakes the construction of a building or other work, as a whole, for a fixed price. It may be agreed that this party shall furnish labor and skill only, or that he shall also furnish materials. In the foimer case the loss of the thing worked upon, before the work is perfected, fal Is upon the lessee ; and as for the work it- self, if it is to be perfected and delivered us a whole, and the thing perish before the work has been received, the owner not being in de- fault of so receiving it, the workman has no claim, unless the loss is due to some defect in the mateiials or the owner's fault. In the latter case if the workman's contract is to fur- nish and deliver the work as a whole its loss before delivery falls upon him; again unless it is caused by the lessee's fault or he should be in default of receiving it. It is fitting here to mention a few impor- tant provisions of law relating to the building of houses. Article 1688 of our Code states that : If a building should wholly or partially perish, within ten years from the time it was erected, from some defect in the construction, or even from the unfavorable nature of the ground, the architect sr»erintending the work, and the builder will be hold jointly and sever ally liable for the loss. If the architect only furnishes the plan and — 68 — doeH not suporintend the work, he will then only be liable for such loss as might happen through defects in the plan. In a case of St-Louis vs Shaw it was decided that : *' A builder is liable for damage occa- " sioned to his work by fiost, if he agreed to " execute the work at a season when it was " liable to injury from that cause." A builder undertaking to put up a building or perform some other work by contract upon a plan and specifications, for a certain price, cannot claim additional charges for any devia- tion from such plan and specifications, or for any increase in the labor or materials unless such changes are authorized in writing and their value be fixed upon with the employer. Architects, builders and other workmen have for the payment of their labor, as well as for the matei'ials they furnish, a privilege upon the Work they construct. Pn Int Coi Sal Nei Pro Che Jnu Age Pan Leai CONTENTS. Preface ^"^ Introduction Coniracts ^ Sale of personal property jo Negotiable paper V/./....'.* ' '* ' itr Promissory notes ^^ ^^eques ..............! 29 Interest -Agency... 3. "..... ll Partnership ' ^^ Lease and Hire * / -„