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Les diagrammes suivants illustrent la mAthode. 1 2 3 1 2 3 4 5 6 E Rl BE YOUR OWN LAWYER OR, SECRETS OF THE LAW OFFICE. aiVINQ IN CONCISE FORM THE MERCANTILE OR BUSINESS LAWS OF CANADA, THE TECHNICAL POINTS AND MAIN FEATURES OF THE LAW, With Hundreds of Hints, Cautions, Warnings and Suggestions, TOQETHER WITH ALL THE IMPORTANT LEGAL AND BUSINESS DOCUMENTS, PORMINa A WORK OP READY-REFERENCE FOR MAGISTRATES, PROFESSIONAL AND BUSINESS MEN, LANDOWNERS, CONTRACTORS, Etc. LAWYERS will also find it invaluable as a condensation of most vital legal points. BY A BARRISTER-AT-LAW. PUBLISHED BY W. H. ANQER, B.A., TORONTO, 1896. 9/^/6" Entered according to Act of the Parliament of Canada, in the year one thousand eight hundred and ninety-aix, by William Hknry AN(iKR, at the Department of Agriculture. r .H A / a(^ O^'Lh^ V-y\v\> K- 7 PREFACE. The subject treated in this volume is one to which no class of readers in the Canadian Commonwealth can be indifferent, for it is incumbent upon every man to be acquainted with those laws with which ho is immediately concerned, lest he incur the censure, as well as the inconvenience, of living in society without knowing the obligations resting upon him. No man can properly discharge the duties he owes to the public, or to himself or his family, without, in some degree, possessing a definite knowledge of the laws by which all are bound, and the obligation resting upon each as an individual. Men of liberal education should find a peculiar attraction for its study, and he as well versed in its general principles as they are in science or history. Teachers ought at least to know as much about the laws governing society as they do about astronomy. (iontlemen of independent means cannot afford to be deficient in this branch of learning. It is their landed property, with its varied interests, voluminous train of conveyances, settle- ments and incumbrances, that forms the most extensive object of legal knowledge, and they should possess a full understanding of the leading principles in connection with estates, agenc}', conveyancy, tenancy, master and servant, and of the municipal laws in general, which would serve as an effectual check upon their agents, and preser\'e themselves from gross and notoriou" "iiposition. Clergymen cannot perform the duties required at their hands without a knowledge of the laws governing the people whom they seek to lead, and for whom they are frequently required to act as legal advisers. Living continuously before the public, and acting almost invariably in a representative capacity, pledging their own honor and sometimes the credit of those for whom they act in heavy financial obligations, they surel}' ougl^t to be learned in the law, and thus imitate Him who, with unerring wisdom, could answer wlien it was "lawful to give tribute to Cicsar," and when to withhold. Merchants and other business men who, in every hour of the day, are entering into contracts binding themselves and others, ought to know clearly in each case the extent of the liabilities they are assuming or evading and the rights they are acquiring or bartering away, just as fully as they etween master antl servant, principal and agent, unfjciuivocal and plain, the obliga- tions of each unmistakable, and the penalties for a breach of contract a definite thing, so that all who read may understand. All men in a normal state of mind are ambitious, and co\ ^ place and influence. Those especially who seek the honor of a i-epresentative position, either at Council Board, Legis- lative Assembly or House of Commons should, by every consideration of propriety, under- stand the laws alreatly existing before they assume to exercise a power to change, or to modify, or to abrogate any of them, or to enact a new one. Lastly it often occurs that persons, either througii choice or nef^ossity, write their own wills. As the law has made certain forms necessary in the wording of last wills and testa- ments, and fixed the numljer of witnesses to their execution that are essential to their validity, tliese few requirements should lie understood by all who would save their families from being torn asunder by litigation and their estates wasted in the law courts. INDEX TO CHAPTERS. ACCEPTANCE CHATTEL MORTGAGES . . CONTRACTS CARRIERS AND BAILMENT DUE BILLS, ORDERS, RECEIPTS EXTRADITION GUARANTY AND SURETYSHIP GUARDING AGAINST FRAUD INDORSEMENTS INSOLVENT DEBTORS INSURANCE INTRODUCTION JOINT STOCK COMPANIES LANDLORD AND TENANT MARRIED WOMEN'S PROPERTY MASTER AND SERVANT MECHANICS' LIEN LAW . . MORTGAGES NEGOTIABLE PAPER PARTNERSHIP PAYMENTS .. .. PRINCIPAL AND AGENT PROPERTY RAILWAYS STATUTE OF LIMITATIONS WILLS RIGHTS tAW .. 42 .. 61 6 .. 121 .. 56 .. 131 .. 86 .. 128 .. 46 .. 140 .. 125 .. 5 .. 107 .. Ill .. 83 .. 95 .. 136 .. 67 .. 26 .. 100 .. 18 .. 91 *.. 72 .. 123 .. 24 .. 132 ! L. PAoa 42 61 6 121 56 131 86 128 46 140 125 5 107 111 83 95 136 67 26 100 18 91 72 123 24 132 INTRODUCTORY. LA#. I. Definition of Law. Law is a rule of action. As in this volume only municij}al laio will be dealt with, law will be defined as embracing all those rules of action, whether written or unwritten, which have been established by the community for the guidance of its inliabitants. U. Sources of Law. Throughout the British Empire and the United States the people are the source of all law. In Great Britain every Act passed by the people's representatives must have the assent of the Sovereign before it becomes law. In the various Colonies the signature of the Governor-General, Lieutenant-Governor, or other representative of the Crown nuist be obtained, and in the United States that of the Presi- dent or State Governor, as the case may be. 3. Representative Bodies^ In Great Britain, the Imperial Parlia- ment, including the House of Commons and the House of Lords. In Canada, the Dominion Parliament, including the House of Commons and Senate and the Legislatures of each Province. In the United States, Congress and the various State legislatures. 4. Divisions of Law. (1) TJommon Law. (^) Statute Law. 5. The Common Law is what is called the imwritten law. It had its origin in the early days of Britain. The various races from which have sprung the English people brought with thein when they invaded and settled in the country their respective customs and rules of action which, after the various provinces became united under one government, CJiused considerable confusion for a time, until a uniform body of law was established for the whole kingdom, and thus called the cummon law. Owing to the fact that but few of the early inhabitants were able to read or write, the laws were for a long tin»e simply preserved in memory, hence called the ■unwritten lair. The term unwritten does not now apply in tile same sense that it did then, because every principle of the corfimon law has long since found its waj' into print through the thousands of volumes of reports giving the rulings and decisions of the various courts, thus furnishing precedents for guidance in all future cases equal to any written law as to uniformity and definiteness. 0. Statute Law is sometimes called the written law, in contradis- tinction to the unwritten or common law. .It is a law that has been formally written out and introduced into Parliament as a Bill, which being passed, becomes a law of the land under the name of Statute Law. 6 CONTRACTS. T. Other Divisions of Law are: (1) Civil Law; (2) Criminal Imw; (3) Mercantile Law ; (4) Marine Law ; (5) Constitutional Law ; (G) Inter- national Law. TheHe diviHion« are uhccI because of the clifl'erent objects to which the law applies. 8. Uniformity of Laws. The laws in Oreat Britain, Canada and the United States ai'e very similar, owinjj to the fact that all the States of the Union, except Louisiana, adopted the old connuon law of Enjjland, thus making it a fundnjj'.ciitil law of the Enjjlish-speaking people of the world ; and it prev;>ils in uU cases where it has not been abrogated or modified by Statute Law. CHAPTER L CONTRACTS. 9. Definition of Contract " A contract is an agreement between two or more persons upon sufficient conmhraiion to do or not to do some particular thing." Contracts are the bnsis of all business ti'ansactions. A man buys a carriage, it is a contract ; he hires a man, leases a farm, borrows money on a note, each one is a contract. A railroad t)r steamboat company agrees to carry 500 tons of coal, it is a contract. You write a letter askmg a person to come and clerk for you at S30 per month, ho accepts and comes, it is a contract. So contracts include all business transactions, whether great or small. 10. Three Classes of Contracts. (1) Simple ; (2) Under Seal ; (3) Of Record. 1. Simple Contracts include promissory notes, drafts, cheques, buying and selling, erecting buildings, hiring, and all the manifold transactions taking place each day in community, except those agreements under seal, as deeds, mortgages and bonds. 2. Contracts Under Seal must of necessity be in writing. They do not require a consideration to make them valid. The seal indicates greater delibei'ation and solemnity in executing such contracts, and a person is presumed to enter into them with a full knowledge of their contents, hence debarred from afterward pleading " insufficient considera- tion." 3. Contracts of Record are the entries in the rolls of a court of its proceedings. 11. Oral Contracts are those made by spoken words, and are usually called verbal. They are binding for the sale of personal property for any amount under $40, but w^orthless for S40 and upwards. They are also good for a lease of property for under three years, but in regard to other things they are limited in time to one year. \%. Written Contracts maybe printed or written, or partly printed and partly written. They may be formal, using the legal phraseology CONTRACTS. containing th« details of tlie whole contract, what was to be done, when, where and how to be done, and the consideration. Or they may be informal, merely contained in letters that have pjwsed between the parties. 13. Express Contracts are those wliere the agreenient is distinctly stated and the things to be done or not to be done definitely declared. Example : A farmer purchases a self-binder for S130.00, to be delivered on or before the 5th day of June, and to be paid for on the 5th day of October. Here the terms are all expressed. 14. Implied Contracts are those where the terms are not definitely stated, but are presumed to be understood. Example : A customer leaves his order with a grocer to have delivered at his residence five dozen of eggs and S2.00 worth of sugar. Nothing is said about the price of eggs or the number of pounds of sugar sold for a dollar, or anything about payment, but the parties themselves and the law presumes a tacit under- standing as to the prices and the time of payment. 15. Executed Contracts are those wliich are completed at the moment the agreement is made. Example : A person enters a carriage shop, buys a carriage and pays for it ; the contract is finished. 16. Executory Contracts are those which are not completed at the time the agreement is made. Example ; A person leaves his order for a carriage to be completed in two months ; or he buys it now and agrees to pay for it at a certain date in the future. . The contract is not completed until the carriage is finished and the purchase price paid. The larger part of contracts are of this class. IT. Void Contracts are those which from their beginning have no legal effect, except in so far as a party to them may incur a penalty. Example : A contract made on Sunday is void. 18. Voidable Contracts are those which take thoir full and proper legal effect unless they are set aside by some one entitled to do so. Example : Fraudulent c it. S4. Assent Obtained Through Force is not binding. If assent is obtained tlu'ough threat of bodily harm, imprisonment, or any similar illegal pressure, it is void, bec'iuso umler duress. *45. Assent Through a Mutual Mistake fta— ~-— CONTIUCTS. )f the iiinds otherwise it is too hite. Withdrawal maj' be made l»y teleijraph or by telephone, but the latter would not be sate unless there were u witness. *ay be .something of value given or promised to be given to the person making the promise, or an inconvenience to the person to whom the pro- nn.se is made. Any of these would' constitute a sufficiet;t consideration. Examples: (1) A benefit to the promissor — A tailor promises to make a .suit of clothes for a person for .^20.00, or for one month's labor. (2) In- convenience to the promisee — A person might lose a goM watch and tell another pei-son he would give it to him if he could find it. The loss of time and inconvenience experienced in hunting for it would be sufficient consideration to make tlie promise binding. lit. Mutual Promises are a valid consideration if made at the same time. At a different hour, even on tiie .same day, they wouM not he binding. Example : Smith promises to dig a well for Jones and Jones promises to pay Smith fifty dollars. One promise is a consideration for the other pi'omise, and the contract is valid. «J?J. A Conditional Promise is a .sufficient consideration for a direct promi.se, but the conditional promi.se is not binding unless the considera- tion is complied with. Example : A horse is purcha.sed for 8125.00 on the condition that he proves true in harness ; both parties are bound if the 10 CONTRACTS. ' condition is met, but if tlie condition fails the purchaser is free to rescind the contract. 33. Gratuitous Promises, or promises witliout a con8i. Insufficient Consideration. An agreement upon no considera- tion, or insufficient con.sideration, cannot be legally enforced. In.sufficient consideration, as a legal term, does not mean too little cash or value. A person making a contract is left to judge for himself whether he receives a sufficient value or not. If a person sells a horse for S20.00 that is worth $50.00, or agrees to do .i piece of work for S15.00 that is worth S45.00; he must stand by his bargain. The law will not interfere. Insufficient consideration can only be used us a plea in ca.ses where there is fraud, where the party has been deceived and the insufficiency is caused by the fraud, or in cases like the following: A farmer pi'omises his hired men an addition to their wages in consideration of their making extra exertions to get in the mown hay before a threatening storm ; or a vessel captain promises his sailors an addition to their fixed wages if they will make extraordinary efforts during a storm. In either case the promise is gratuitous and not enforceable, the employees being bound to .so act in their respective services. A promise to pay another's debt, already incurred in like manner, is gi-atuitous, and cannot be enforced. IS 31. Illegal Consideration is where the act to be performed forbidden by law, as smuggling goods into the country, buying a lottery ticket, publishing or selling immoral literature. In all such cases the party making the promise is not bound to keep it. 38. Impossible Consideration is an agreement to perform some- thing which from its very nature is impossible. Example : A man might agree, as the consideration of some contract, to walk from Buffalo to Montreal in six hours, but he would not be held by law, as it would be impossible of fulfilment. A man might, however, agree to build a certain CONTRACTS. 11 house in three days and be utterly unable to accomplish it ; still he would be held for damages because it would be possible to have men and material enough ot liand to perform it. 39- Moral Obligation is binding in honor, but not in law. Here is where most men make their mistake who say that common sense is all that a man needs to guide him in law. Common sense will teach a sensible man what ought to be done, but what the law will undertake to enforce is quite a dift'erent thing. Legal obligation is one thing and moral obligation is another, and sometimes just the opposite. 40. Failure of Consideration voids the contract. Example: A person agi'ees to give S300.00 for a certain interest in a patent to manufacture gas and afterwards the patent is found to be void. The contract carmot be enforced, and, if a note were given, it cannot be collected. Partial failure of consideration dues not void the contract, and the other party may obtain damages only for the part that failed. 41- Who may Contract. Persons competent to contract, that is, those who can bind themselves in a contract, include all persons over twenty-one years of age, and of sound mind. Persons not competent to contract then are : minors, idiots, insane, and persons wholly intoxicated ; also Indians, who are regarded as wards of the Crown. 42. Requisites of a Contract. From what has been given, the requisites of a valid contract may be summed up as follows: (1) It must be possible. (2) It must be legal, (3) It must be made by persons who are competent to contract. (4) It must be assented to by each and all the parties. (5) It retjuires a consideration, except for those under seal. (6) It must be without fraud. (7) Some require to be in writing and some under seal. 43. Minors, called in the law books Infants, are, in Canada, all per.sons, male or female, under twenty-one years of age. In a few of the States of the United States females are of age at eighteen years, but not so in Canada. The law in Canada is very fair and just in regard to minors as to their personal liability for debts, and also as to their parents or guardians, and business men should clearly understand it. 44. Minors may Contract for Necessaries. Whatever things are necessary for him in his station and condition in life he may contract for, if he is not living with his parents or guardians, who are able and willing to support him. Minors not at home, and supporting themselves and collecting tlieir own wages, do not bind their parents even for necessaries. A minor purchasing anything held to be a nece-ssary for him in his station in life, and refusir>" to pay for it, the merchant from whom he purchased the article can sue and recover from him as though he were of age. If, however, the parents should sometimes pay part of the minor's bills for necessaries, they also become liable for the whole of them. Minors not at home and supporting themselves, may sue and recover for wages earned 12 CONTlfACTS. by themselves, no matter liow young they are. They are also liable for any damage clone or wrong committed by them; also for any criminal oftence. 45. Necessaries for Minors are usually reckoned Iward, clothing, education and medical attendance, unless unnecessary talent is called. A suit of tweed clothing for a son of a mechanic, or any person in a similar station of life, would be regarded as a necessary, but a fur overcoat or a gold watch would not be. A fur overcoat or a gold watch might be held a necessary for the son of a judge or bank manager. 4C Luxuries for Minors would be anything beyond what the law classes as necessaries. For any such article bought on account the merchant cannot compel the minor to pay : if, however, the original goods are in his possession, tlie merchant has the power to replevy' and take them back. 41. A Minor's Note, given even for necessaries, cannot be collected. If a merchant should cliauce to take such a note for necessaries, he could not sue on the note ; but he could hold the note until matiu-ity and then sue on the onen account and present the note as evidence of the debt. He could not sue until the note matured, as that would be the date of payment. If there were an endorser or joint nuiker, he C(juld enforce payment against other party. , 48. A Minor as Agent. A iiinor uuiy act as agent for another in any capacity, and bind liis principal in contracts made on iiis behalf. But a minor cannot appoint another person as agent to represent him, because the otlier party could not bind the minor in a contract. 49. A Minor May Ratify His Contract. When a minor comes of age he may ratify his contract made before age, and thus maki^ it valid and binding. The ratification must be in writing to bind him. 50. Repudiating His Contract. A minor having made a contract, which is yet to be executed, has a reason.ible time afti r reaching his majority in which to declare it void. He may also rescind a contract that has been executed, but in such a case he must restore to the other party the consideration if it be within his power to do so. If it be impossible to restore the ct)nsideration, as in the case of buying liv«' stock that had died, or other goods that had been destroyeil by tire, he may still rescind the contract and recover the full purchase price. Although a minor cannot bind himself in a contract, still he can hold the other party to his agreement who makes a contract with him. The same is trut to an idiot or an insane person. 51. Parents Liable for Minors. While the minor is living at home and supported by his parents or guardians, they an- liable for neces,saries purchased by the nunor, unless notice has been given to the contrary. They cannot be held liable on luxuries. They ai'e also liable in case the minor is not living at home, but is supporting himself and collecting his own wages if they should pay part of his bills or accounts. They then render themselves lialtle for all of them. in regard CONTRACTS. 13 ible for riminal lie law nt the goods 1 take m 3/S. Idiots- Persons having so little intellect as to be unable to perform the ordinary affairs of life cannot bind themselves in a contract. An idiot is a person who never had sufficient reason or intellect to under- stand the nature and effect of a contract. 53- Lunatics. Persons who have lost their reason are manifestly incompetent to contract. But unless the insanity is of such a nature as to be patent to everybody, it must be established by legal proceedings to be relieved from a contract he may have entered into. To be adjudged insane it is necessary to be so adjudged by a Committee on Lunacy. A person who makes a contract with a lunatic is bound by it as though he were dealing with a person competent to contract. No person but the lunatic or his legal representatives can void a contract that he has made. Contracts for necessaries for him the law holds binding. 54. Lucid Intenrals. In some cases of insanity, persons have intervals during which they are perfectly sane. These are called lucid intervals, and contracts made during such periods are binding. 55. Drunken Persons. A person merely strongly under the influ- ence of liquor is not legally, although he may be morally, incompetent to. contract. To be relieved from liability on a contract he may have entered into, he must be wholly intoxicated, so as to be unable to use his reason. Drunkenness will not relieve from criminal prosecution. Indians. Our Indians are wards of the Crown, ai... thus pi'otected from fraud and ileception by being placed in a similar position to minors and rendered incapable of binding themselves in a contract. A person who makes a contract with them is bound, but the Indian is not bound, not even for necessaries. 51. Alien Enemies. According to International Law all commerce between two nations at war is suppressed and contracts rendered illegal and void. 58. lileg^al Contracts. There are several classes of illegal contracts — illegal because the thing to be done or rot to be done is illegal. An agreement to do anything unlawful is void and no court will attempt to enforce it. Even if one party hjis performed liis part or paid his money the law M'ill not help him, as the contract is regarded as wholly vicious and utterly void. 51>. Those Against Public Policy. The policy of every community or state is to advance the public good, hence whatever contracts are opposed to the general good are said to injuriously aftect public policy, and are, therefore, void. Among such may be mentioned : 00. Contracts in Restraint of Trade ; as where a merchant would sell out his business and agree not to engage in business again of any kind, it would be void, because lawful trade is considered for the public good. He could, however, bind himself not to engage in business again in a particular locality, or in a certain line of business, as it would only be a partial i-estraint of trade. Partial restraint, however, if the nature of the 14 CONTRACTS. case makes it questionable, can only be determined by the court after reviewing all the circumstances in that particular case. The agreement that thus binds a merchant not to engage in a certain line of business again, or in a particular locality should contain a fixed sum as damages for a breach of the contract. All combines as among manufacturers by which prices are forced up are illegal. Organized strikes by which the action of others is to be coerced are also illegal. 61. In Restraint of Marriage. Marriage is held to be in the public good, hence any contract which wholly restrains marriage is void. The condition in a bequest in a will to a child that he or she does not marry is void, but, nevertheless, the bequest is good. A partial restraint of nmrriage, where it is reasonable, may be valid, as where a bequest is left to a child on the condition that marriage should not be effected until the age of twenty-one, or say twenty-five years, it would be valid because it would merely fix a date when there would be less danger of contracting an ill-advised marriage. But if the time fixed should be, say fifty years of age, it would be void because that would be unreasonable. A husband's bequest to his wife on the condition that she does not marry again is legal because she has once been married, hence not in restraint of marriage. 6S. A Marriag^e Broker. A contract to pay an agent for contract- ing a desirable marriage is void ; and even the money paid upon such a contract may be recovered if the broker is worth it. 63. Contracts to Obstruct the Course of Justice are void. An agreement of a public official to do something contrary to his duty cannot be enforced, and money promised him to use extra exertions in the discharge of his duty in a particular course cannot be recovered. 64. Immoral Contracts are void. A contract to lead an immoral life is void. But after an immoral course has been begun and a note or other obligation has been given as compen.sation for da,mages, the obligation can be enforced. Contracts to publish, sell or forward obscene literature are void. Contracts made on Sunday are void, because that day has been set apart as a day of rest and business pui-suits prohibited. All bets, wagers, gambling, lotteries, raffles, buying on margin, and pronjises to pay for votes, are void. Contracts to defraud the Government by smuggling, or to give an incorrect invoice, are void, and all money promised for such service cannot be collected. 6$. Fraudulent Contracts are voidable — not void. A definition cannot be given that would cover all the forms of fraud, but the following will make sufficiently clear what would constitute fraud : A statement of facts that the party making the statement knows to be false. A conceal- ment of facts that are known to one and not readil}' discernible by the other, and yet such as should be revealed. The misrcpiesentation must actiiAxlly deceive in order to make a case of fraud. To sustain an action of deceit there must be proof of fraud, and nothing short of that will suflSce. Fraud is proved when it is known that a false representation has £ CONTRACTS. 16 certain edsum been made either, (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. A mei*e expression of an opinion which turns out to be unfounded will not invalidate a contract. There is a difference between a man saying that an article is worth so much, and saying he paid so much for it. Example of mis-statement of fact: A person selling a horse to another and representing him to be gentle in harness and true to draw, when as a matter of fact he was not. This would be fraud. The fraud may be practiced by one party upon another to induce him to make a contract ; or bj' two or more persons to defraud a third party. As stated above, a fraudulent contract is voidable but not void. The party who has been defrauded may void the contract if he wishes, or he may affirm it and compel the other party to perform it. If he wishes to void it, two things are necessary: (1) He must not accept any benefit derived from it, or continue to act under it after he has discovered the fraud. (2) He must give prompt notice of the fraud after he has discovered it. The dishonest party cannot dis-affirm the contract, but in all cases is bound to carry it out if the other party demands it. If both parties practice fraud, neither one can enforce the contract against the other. A promissory note obtained through fraud cannot be collected by the party who obtained it, but upon coming into hands of a third party, before maturity, for value, and who did not know of the fraud, would be valid and good against the maker. 06. Fraud by Insolvent Persons- An insolvent pei-son representing himself as solvent in order to obtain goods on credit, is guilty of a fraudulent act. The seller discovering it, may cancel the contract, or recover the goods if they have been shipped. An insolvent person need not disclose that fact to a creditor from whom he is purchasing goods unless he is questioned as to his financial standing. 07. Fraud by Underbidders. Underbidders at auction sales, employed secretly to run up prices higher than the real value of fhe articles, are fraudulent towards thii'd parties. A purchaser whose bid has been forced up by such fictitious bidding inunediately preceding his last bid, may void his purchase. If underbidders are employed, and that fact publicly announced before the sale, it is not fraudulent. Tiie owner may also fix a price below whicli the goods will not be sold, or lie may reserve one bid for himself. 08. Selling Property Obtained by Fraud. A person obtaining goods, or a promissory note, or any other property through fraud, and transferring them to an innocent tlurd party for value, gives them a good title. i»9. Statute of Frauds and Perjuries. This famous Statute was passetl in the twenty-ninth year of the reign of Charles II. of England, and still exists there, in this country and in the United States, with but slight change. It was designed to prevent the frequent commission of frauds and perjuries in regard to the enforcing of old claims, and various kinds of promises to answer for the debts of others, and providing that 16 CONTRACTS. ^! certain conti'acts had to be in vvritinjj to be binding. The following are the reciuirenients of the Statute which come within the scope of this work as they have been varied by our Statutes : 1. That leases of land for more than three years must be in writing. 2. Contracts for the sale of lands, or for any interest in lands, must be in writing and under seal. ;j. Every agreement that by its terms is not to be performed within one year must be in writing. 4. Every special promise to answer for the debt, default or miscarriage of another, must be in writing. h. Every agi'eement, promise or untlertaking made upon considerations of marriage, except mutual promises to marry (engagement), must be in wi'iting. 6. Where any contract is made respect ig real estate, or any interest in real estate, it must be in writing and under seal. 7. Contracts made for the sale of personal property, of S40.00 and tipwards, must be in writing, unless part or all of the goods have been delivered, or a part of the purcha.se price paid. Each of these divisions will be treated under appropriate chapters. TO. Interpretation of Contracts. Although it is supposed that parties entering into a contract fully luiderstand its terms, and will use language in expressing them that will explicitly give their meaning, yet it often happens that such is not the ca.se ; hence cert F. E. MiSENER. j 2 James Henderson. Charles Summers. 18 PAYMENTS. CHAPTER II. PAYMENTS 13. Payments. Tlie consideration in every contract is money un- less otherwise provided. T4. Payment in Money. Unless otherwise stated every deljt is payable in money. If in gold, it must be in jjold ; it' at a certain place, it must be there ; if to be sent by letter or by express, it must be that way. If the dii-ections are complied with and the «)the, party fails to receive the mone}', the debt is paid. 15. Payment in Property. When the a<;reement is such, any debt or contract may be paid in goods, or other property or in service. If such articles are not tendei-ed at the time and place a<,reed upon, the debt becomes payable in money. Or if any property other than the kind agreed upon is tendered, it may be I'efused and the debt collected in money. 16. Payment by Notes- A promissory note (»;• acceptance being merely a promise to pay is not an absolute payment, and if they are not paid at maturity the debt stands the same as before. The case is diti'erent, however, if the note of a third party is given in payment for goods or on a debt. For instance, Jones gives Smith a note he held against Brown in payment for goods or on a debt. This note pays the debt. Of course if Jones indorsed the note so as to make himself liable when he transfei'red it, then Smith can proceed against him on the note but not for the original debt. 77- Counterfeit Money and Forged Paper. Counterfeit money, a forged note or checjue given and received in good faith does not dis- chai'ge a debt. The person receiving it nmst return it to the party who paid it to him within reasonable time. The debt still remains and may be collected as though no such payment had been made. 18. To Whom Payable. Payments should always In; made to the person mentioned in the crmtract, unless it ))e a negotiable instnnnent then to the holder. If nothing is said, then it must be to the creditor, himself, or to his legal representative, such as an agent or attorney. Care must be exercised when making payment to his representative that said party is authorized to receive tlie money. 19. Place of Payment. The maimer and place of payment are often definitely stipulated, as in the following : " Payable only at A's office in gold to ' A ' personally and not otherwise or elsewhtire." If a place of payment is stipulated it must be at that place. If no place is mentioned then it is the debtor's duty to find the residence or place of business of the creditor and pay it there. PAYMENTS. 19 80. Presumption of Payment. A note, acceptance due bill or receipt in the hands of a debtor is presumptive evidence that the debt is paid, and will so hold unless there is other positive evidence to the con- trary. If there has been a great lapse of time without any demand being made the presumption is that the debt has been paid, hence the Statute of Limitations. 81. Application of Payment- The person making the payment has the right to make the application. Where a debtor owes more than one debt to the same creditor, and they are all due, the debtor has the right to say on which debt the payment shall be applied. If the debtor does not say on which debt it should be placed, then the creditor may apply it as he may desire. Wlien neither tlie debtor nor creditor makes tlie application, but credit is merely given for the receipt of so much money, in case the business matters were settled in court the court would apply the payment on the debt that is considered the most burden- some to the debtor. If the debts were a book account, an endorsed note, a chattel mortgage and a judgment, the court would apply it on the judg- ment. If the debt were a book account only, the court would apply the jjayment on the earliest items. 814. Compromise. A large debt may be paid by a very much smaller one where there is an agreement to that effect. A disputed claim may be paid by any sum where there is an agreement to accept such sum in satisfaction for the claim. The agreement should be in writing, or have a witness. Accord and satisfaction are terms used in settlement of dis- puted claims by compromise. 83. Composition Deed. In case of an insolvent person where the creditors accept a certain rate on the dollar and give him a discharge, the release is called a Composition Deed. 84. Arbitration and Award. In case of any dispute where parties agree to leave the settlement to arbitration, they are obliged to accept the award as final, providing the arbitrators keep within the limits ijrescribed for them. 85. Legal Tender of Payment. A legal tender is the attempted performance of a contract, whether it is to do something or to pay some- thing. If payable in goods, then goods of that kind and (juality must be offered at the exact place and on the time called for in the contract. If payable in money, it must be in the lawful money of the country, if that is demanded. A creditor cannot be forced to accept a cheque as payment. If payment is not accepted when a legal tender is offered, interest stops at that date, and no law costs or other expenses can thereafter be re- quired of the person making the tender. 86. Refusing Part Payment. The refusal to accept part payment on a note or debt does not affect the debt in any way. The refusal to accept payment tendered in full does not cancel the debt, but it stops all interest and expense thereafter. 20 PAYMENTS. r 81. Merger. Tlie liigher Hccmity merges the lower. Wluno one person wouM be owing another on a book account or note ane no longca- binding. If there were an endorser on the note he would be relieved. If it is desired that the mortgage should not merge the note, it nnist be stated in the mortgage that it is given as collateral security ; then the note would still be l)inding. A note or bond on which judgment has been obtained is no longer binding as a note or bond. Where parties have entered into a simple contract, either written or oral, and then afterwards enter into the same contract by an instrument under .seal, the simple contract is no longer binding, but is nieiged into the higher. Where a mortgage would be given as collateral security for a note, the payment of either one discharges both. 88. Legal Tender Money. In Canada copper coins are legal tender for the payment of a debt up to twenty-five cents, silver for !?10.00, and gold, Dominion or bank notes for any amount. 89. Breach of Contract is a failure to do what was re(|uired, or the doing or what was forbidden. It is necessary to have a clear idea of what constitutes a binding contract in the particular case being considered in order to know definitely whether thei-e has been a violation or breach of contract. 90. Remedies are the means which the law provides for the enforcement of the rights created by the contract. Remedies are divided into two classes — civil and criminal. The criminal are for the punishment of crime and the protection of society, and are dealt with by Government ; the civil belong to the individual and enable him to eni'orce his personal rights and obtain compensation for his private wrongs. His remedy is by suit for damages. There are diflerent classes of damriges: (1) Compensation for the actual loss sustained. (2) Nominal, where the refusal to perform the contract is not regarded as intentional, but merely through inability to do so. (8) Liipiidated, w here the amount is previously agreed upon in case damages should be awarded. (4) Speculative, where the prbfits that would have resulted fi'om the performance of the contract can be estimated, they may be recovered. (5) Exemplary, where for a malicious violation of a contract a sum in excess of the actual loss is awarded as a punishment. 91. Judgment is the decree of a court delivered after a case has been heard. It may be on a suit to recover a debt, or it may be for a breach of contract. When a contract has been broken the amount of the injury sustained by the one willing to fulfil his part of the contract may be proven in court. The decree of the court ordering the party in default to pay the other a certain sum of money is called a judgment, and comes under the heading of a Contract of Record. The sum of money ordered to be paid is called damages. A judgment that is not satisfied outlaws in six years unless renewed. 1 PAYMENTS. 21 OH. Execution. If the Judgment or amount of tliiinagcs in iu)t nair the usual letters " L.S.," the seals may be put on any time afterwards. Properly the seal should be touched by the person signing his name and acknowledged to be his seal. In acknowledging the seal, whether it is put on before or after signature, words something like the following may be used: "I acknowledge this to be my hand and seal." Some persons after signing their name will with pen and ink put their initials on the seal, thus practically indentifying it. All corporate bodies and joint stock companies are re(iuired by law to have a ccjrporate seal, which the officers nuist attach to or impress on all contracts signed by them in order that they may be binding on the corporation or company. All instruments under .seal are good for twenty years except a mortgage on real estate, which outlaws in ten years after maturity or last payment. 100. Signing by Mark. A person who cannot sign his own name must request some other party to do it for him. The following will illustrate the usual form : Ail Witness: Charles Summers. W. x Winters. mark. 24 STATUTE OF LIMITATIONS. A person signing liis name this way may take 1k)I<1 of the pen while his name is being written, or he may not ; he may make his own cross or he may not, just as he wislies. There mtist, liowever, be a witness to the signature. 101. Reading and Explaining. When a person who cannot read is executing an instrument it is required that it be read over and explained to him in the presence of the witness so that he may fully understand wnat he is doing. The witness in signing such an iiistrument should mention the fact in .some such words as the following : " Signed, sealed and delivered, after first having been read o\'er and explained, in the presence of Charles Summers." 103. Erasures and Corrections. If any such should become necessary to make it should be done before the document is executed. In making the corrections do not use a knife or rubl)er, but simply draw a line through the words with pen and ink so that the original words may be clearly seen. Then write the correct words lietween the lines, using a caret to show where they should be read in. The witness should put his initials on the margin opposite eveiy such correction or interlineatlun as evidence that they were made before the execution of the document. 103. Various Sheets. When a document is written on more than one sheet they should be fastened together and paged l)efore lieing signed. Some who are extraordinarily formal will use a ribbon and put a seal over the tie of the ribbon. The witness sometimes places his initials on each sheet and mentions the number of sheets with his signature. 104. Various Documents- When an agreement is composed of two or more separate documents they are usually marked with the letters of the alphabet as, A, B, C, etc., and referred as .schedule A, sclu'tlule B, etc. Example : Contracts for the erection of large structures are usually accompanied by plans and specifications marked A, H, etc., which are attached to and form a part of the agreement. It CHAPTER III. STATl^TE OF LTMITATIOXS. 105. The time within which the various kinds ot debts must be paid is fixed by Statute, and if not paid within that time they are said to bo outlawed. The debt is not cancelled, but the creditor loses his right to sue and recover payment by legal process. The Statute limiting the time within which an action at hiw must be commenced for the collection or enforcement of a claim is called the Statute of Limitations. The time limit for the various kinds of ilebt is as follows : J 1 •4 ■| \l STATUTE OF LIMITATIONS. 25 106. Promissory Notes and Acceptances outlaw in six years after maturity or last payment made on either interest or principal. The date of maturity is the last day of the three days of grace, hence the time commences to count the day after the third day of grace. Any payment, or written acknowledgnient of the debt, will keep the paper alive six years from that date as against the party making the payment or the acknowledgment, but not against any other person whose name is on the paper. lOT. Book Accounts outlaw in six years from date of purchase or last payment. Accounts are, with regard to outlawing, " itemized," that is, each item or purchase is treated as a separate account, and all moneys paid on it are, unless otherwise specified, applied to the oldest items. This particular feature of accounts should be remembered. A debtor has the right, when making a payment, to say on what particular account it shall be applied. In case he neglects to do this, the creditor has the privilege of applying it to any part he likes. In case neither one applies it to any particular debt, it is by law, in case of personal accounts, applied to the oldest items. The various purchases on different dates being put into one bill and rendered to the debtor do(is not merge them into one debt so as to change tiie time for outlawing of any particular purchase, but they all remain entirely separate and six years from the date of purchase of each item it is outlawed, unless there has been a part payment on that individual purchase, or a written acknowledgment. A part payment on a running account does not keep the whole alive. The itejus of an account may, however, be merged into a single debt b}' what is called •'" "Account Stated." To form an "account stated," an agreement must be come to l)etween the debtor and creditor by which the whole account is acknowledged. Where this has not been done, if the merchant wants a part payment to keep all the items of the account alive, he nmst apply part on every individual purchase, even if it is not more than twenty-Hve cents on each. This can be done by a day book entry without saying anything to the debtor. The following or similar words would answer : " Received from James Smith .54.50 on account, an ecjual amount to be applied on each purchase up to date." Give the customer the ordinary receipt on account without any reference to the special application you have made of the payments. A definite formal settlement in writing between the parties, even though no money is paid, will serve to extend the time six years. It always pays to keep an account alive, even though there is not much hope of receiving payment. 108. Mortgfage on Real Estate will outlaw in ten years from maturity or last payment on either principal or interest. 100- Chattel Mortg^ages are good for twenty years as between the debtor and creditor, and will hold the claim that long. As to other creditors, however, it will only hold the property as security for one year, unless renewed, which must be done yearly. THE PROP'^hTY of THE LAW SOCIETY 1 T 26 NEGOTIABLE PAPER. 110. Reviving Outlawed Debts- In promissory iiote.s, acceptances, and book accounts, a part payment or a loritten acknowletlgment will revive them and keep them alive again for six years from tliat date, and in case of mortgages ten years. Money also paid by the debtor to the creditor on account without any instructions as to what debt it should apply to, may be applied by the creditor to any such debt that has been debarreri by Statute, and thus reduce it. This cannot be done by a third party to whom such debt may have been transferred, neither docs it revive the balance. 111. Exceptions to Outlawing. 1. Bank bills, or bank notes, or other evidences of debt issued by banks never outlaw by lapse of time. 2. Also where there "s a legal disability on the part ai the creditor so that he cannot sue when the claim is due, the time does not begin to count until the disability is removed. Examples : A minor coming of age or an insane person becoming sane, the disability ceases. The disability, of whatever nature it is must be in existence at the time when the debt became due. 3. When the debtor is living outside the Province or State at the time the debt was due the time for outlawing would not connnence to count until his return. If he left the country after the . Place of Payment. It is not necessary to the validity of a note to mention in it any place of payment ; but it is desirable, for various 28 SKOOTIABLE PAPEK. li ■ If th-rr*r i- T:.' W-.-r^i-i tfc-^ jir>.>W WT.-rT :. : .' U'-.<T A* be •wc'ol-i Lavr I-r-s» •i!^:^jiiirv>i in •jr»i^r to L-.-i-i ih-r i&j'.-rsrr >To hi ;:. : .r-^r>. -rn^ =m:. l:i*-> • Bat wh-er^ therr i^ n-y i&ior-r-r •:•? D«'xie tfcai tr.T :„^;.>r '--ir^ts to h-Zid t'Or fAV-ia p-^'i-r :' • i . . -rit i» vj^nuou^i in the O'Xrr tLt LvMrr i« un-ir-r n-:- l-r-gal o'f.Iii'ar.: rl *. .• : r-r^^^rit ih* n«'j<«r for ^ym^nt at maturity. Ii L? th^ uiik^r * pirt to sr* i Li- u-At ^d-I pay it. Bn: if tber-r i- a placv- of ptax-mriit ?p«ec:n-e»i in xh^ DOCfT. th-rn th-i hokUr mu^t «rrv tLat th-e u-x-e i-? pr^-^nT-^i th-rr-r. or hv woait -i^ti Li- •:-^rn mun^ to ^ i.Vi'r ••T;:h LL- owii r.ai.i. ■■ 'ir. it L- -nffici-rit if Li- -iiiiAturv i- writte-n th-^Tf^Ai by '^jiti^ oih^r p^rr-»>n by. <>r uniTr hi- aathorlty. In fA.**r of a oorp»>ration it i^ *^affici•rnt if th.r e»>rporat«r -ru»r into ir>rn«fral praetic*? "'.m acc.-unt of thrr rra.*^ bv whif-h for;'^r\- ojuII tak«r plac-»r. It i« not n^vs«ar\- to attach th*? *»?al to ^ not»r <>r bin if thf c-orpjirat'- nam-r « a'S^i 1^1 . Ink or Pencii A not-r or aocvptanct drawn with Irad f-r-ncil woul'i r^ valid : -'> would an indorsfrni'rnt in prncdl ^rr binding' - but no p-rrron of oriinarj- pmd-rnce woald u.-* a p^^rncil. a> it can V«e lo«;i trasily erased and chan^'^ made. l*i*J Value Received Tlir-^ wori<- are u>TiaIly invert oil in a promise .;rv note, but th»:\- are not n^->^-ar\- to it- \aliditv. Inr^irarl to nejrotiaV.le [*iprr. value Ls j're^UTr>^:d. Acc«jmm>lation X«»t«f. <'n-»rrit of ail tht^ pirtier« liable on it, the bill i» void, e-xc-frpt a- against the [.•^r-'-n who rnadr. or who as^nt*^] to the alt»-ration-. and al-.> again^^t r value. >uch li">ldt-r will enforce paym^^nt of it ac-cc'rling to it< original tenor a- if it had not been alt»rrer date, the >uui |:iayabl«f. the time of fjayment. and the place of [•ayui'rnt. aLs«,> in ca*-^ < l»-^n accepter I g'-iitrrally. the addition of a plac»r of paym*rnt witliout th^- as-».-nt rptance payable at a tixe»] pyrio-l aft«.-r .'^iglit i-^ is-iu<^l without dat*- of acc»-ptance. any holder may in.sert th»-rein the true date of is>u»r or acc»rpt- ance. and the instrument will V»r |>;iyabl»r acconiingly. If in this ca.-*?. however, the holder in g<»l faith but In- mi.stakf ins»-rt»-d a wrong dat^, and the bill f»ubsei^uently ci^^meas into the hand.** of an innocent holder for H ii I if XEGOTIJLBLE PAPER 29 ':.:'A-:T it r:cilrv in r-r '.Tv :. :.r that W:.-r- r.:. ;rrv. or h-r > wnttrD •traiiKrW. thr •r^'^ -a'i f»-neil r: but no t'T'l iu a r'ri'ani to src, 127. iny not"? e f. ha.* h»-vn ?h h"..i«if-r ha-l n.jt • th^ bill. . aii'l the vijf- rally, ptor In r aft^r n ctrptanee liT- an ca.-^, ng .lat^, skier for value, it will W payable a.s though the date s*-^ insierte«i had been the tnie dale. I'i5. Defects that do not Invalidate. A bill is not invalid by rea*i<:>n that it is not dated, ur that it is tlateil by mistake on Sunday; that it does not specify that value has l»een given, or name the place when.- ir was drawni or where it is payable. It might l>e dated either forwanl -ir Ix^ckwai""!. If thnnigh ovei"sight no date were placeer date acconling to the intention of the parties at the time the instrument was made. ri6. Innocent Holder for Value. An • inmxvnt holder for v a hu- " is the sjinie as another expression used by lawyers. ■ a holder iu due course." and means one who took a note or accep>tance which was ct.»mplete and regular on the fa*.^ of it. unei-son who negotiated it to him. Any pei-son thus becoming the holder of a note or acceptance for value on i;)r lx*fore maturity, and who assed through the hanarty is liable on the instrument to any holder fi>r value, whether such holder, when he to«5k the note or acceptance, knew such party to W an aceommo- datii>n party or not. They other notes ov acceptances, and no legal cautions are necessuiry. The ]ieiNon who assumes such an obligation should have substantial rea.>on receipt of the payment. Serious los.ses are constantly occurring by a neglect oi this plain business pnxiedure. Payment even to the supposed holder who has not the note in his jx)ssession is not paying the note, but is simply placing that much money in his hands and trusting to his honor to apply I » 30 NEGOTIABLE PAPER. it to the note. The note, however, nmy have been transferred and the true holder could collect it over again, or it may be in the bank and the party to whom payment was made may be on the eve of bankruptcy, hence the note would have to be paid over again. Paying money to an agent of a firm who has not the note to hand over is simply trusting to the honesty of the agent. His receipt would be worthless as a set ofi' ii the agent kept the money and the firm sued the note. VZ9. Cancelling Signature. When a note is paid the name .should never be torn off, as is u.sually done, but simply draw one or two lines through the signature of both maker and indorser, and file the note away as a voucher. There is the same necessity for preserving a redeemed note as there is a receipt. 130. Surety is the person who agrees to pay in case the maker fails to do so. If he puts his name on the back of the note he is an indorser only, and the holder of the note must meet the recjuirements of the law in regard to pre.senting the note for payment (sec. 193). If he writes his name on the face, \\ ith that of the maker, he becomes one of the makers, and is, therefore, held for payment, whether the holder presents the note for payment or not. 131. A Minor's Note cannot be collected, either from him or his parents or guardians (see sec. 47). If a minor, or any other person or corporation not competent to contract issues a bill having an indorser or joint maker, the holder can enforce payment from the other party. 13!S. Note Obtained through Fraud is void in the hands of the original holder, but if he transfers it to another person before matiu'ity, who gives value for it and does not know of the fraud, then this third party will collect it. No difference what the fi-aud may have been, or deception, or even if it had been stolen, this innocent iiolder for value has a good title and will collect it. After a note or acceptance has once been purged of its infirmity by passing into the hands of a holder in due course, it becomes immaterial whether any subsecjuent holder had notice or not of the prior defects or illegality connected with it. If, however, it is transferred after maturity, then the purchaser does not, in that case, obtain any better title than the original owner possessed. 133. A Forged Note is void, and cannot be collected under any circumstances. 134. Various Forms of Notes. An individual note is written, " I promise to pay," and signed 1)y one person. A joint and several note may be written " I promise to pay," or " we or either of us promise to pay," or " we jointly and severally pi'omise to pay," and signed by two or more persons. In any one of these cases they are all jointly liable, and each one is individually liable as well, so that the holder of the note, in case he has to sue, may proceed against all of them at once, or against as many, or against either one of them he thinks best. A joint note is written " we promise to pay," or " we jointly promise to pay," and signed by two or more persons. NEGOTIABLE PAPER, 31 ISi^ Individual Note. Tlie ordinary fonn of tlie individual note is well understood, but where there in no place of payment mentioned in it considerable annoyance may be occasioned. See foUowinjif form : i?40.00. CoLLiNOWOOD, August 27th, 1896. Sixty days after date J promise to ^^^-y to W. li. Henderson or order Forty Dollars, tvith interest at six 'per cent, for value received. W. L. Montague. Witli the above form of note, which is not supposed to have any indorst^j. on it, tliere are only two parties to tlie paper, the maker and payee. At maturity, October 29th, the holder, W. H. Henderson, is not recjuired to present the note for payment, but tlie maker is under obliga- tion to hunt up his note and pay it. Mr. Henderson may have transferred it, and if the maker did not find it and redeem it on the 29th October, the present holder could any time after that date put it in suit. 130. Partnership Note is also usually written "we" promise to pay, but in that cjise it is not a joint note, altliougli it has that form, but is a joint and several note. Althougli three or four may sign, they are all individually liable for payment of the whole note on account of the partnership laws, by which each one is liable for the whole debts of the firm. IJJl. Joint and Several Note is one signed by two or more pei-sons, who thus promise to pay either jointly or individually, if necessary. There are sevei'al forms for the wortling in general use, as : " We, or either of us," promise : or " We, jointly and .severally," promise ; or simply " I " promise to pay ; and let as manj' sign it as are interested, it being an " I promise " for each one. The latter form is preferable, because shorter. 8100.00. St. Catharines, July 29th, 1890. Three months after date we or either of us promise to pay James Smith or order One Hundred Dollars, at the Bank of Toronto here, for value received. John Winters J. H. White. In the above note each one i.s liable for the whole amount, and if the holder found it necessarj^ to sue in order to njcover payment, he could sue both or either one, just as he thoifght best. If he sued one and collected the whole amount from him, then that one could sue and collect from the other party, that is if the one first sued were only a surety. Both of the preceding notes are negotiable by indorsement only as they are made payable to James Smith or order ; hence if he wished to dispose of them he would be compelled to write his name across the back, that is, indorse them. If they were written payable to James Smith or hearer, then he could dispose of them simply by delivery or passing them over to the purchaser. It is far better to use order instead of hearer, because in that ease a note lost or stolen before it had been transferred could not be dis- posed of. l.'roceeds thereof to be applied upon that part of purchase price yet unpaid. I agree to these terms and conditions and hereby acknow- ledge having received a copy of this lien note. Witness : J. Bell. Wm. Winter' 159. Instalment Note. It does not affec^> the negotiability of a note to make it payable in instalments, but it cannot be sued until the last instalment is due, whether the {.receding instalments be paid or not. This is guarded against sometimes by adding a clause like the following : " In the event of default in making any of the above payments at the time mentioned, the whole amount of this note shall become due and payable forthwith." The followinjr lien instalment note will illustrate the form : S60.00. HUMBERSTONE, September 1st, 1896. On the first day of each month hereafter for four months consecutively, I promise to pay to Messrs. Augustine A Kil- mer the sum of Fifteen Dollars, the ivhole amounting to Sixty Dollars, the first of such payments to be made on the First of October next. Interest after maturity until paid at the rate of eight per cent, per annum. In event of the sale or other disposal of my land or personal property, or of defaidt in making any of the above payments at the time mentioned, the tvhole amount of this note shall there- upon become due and payable forthwith. The right and title to the possession of the projyerty in the democrat waggon for which this note is given to remain in the said Augustine li- Kilmer until this note or any renewal thereof is paid in full. 1) .'■•*'■ I] t-i \\i^ m >< 9. m 'H Witness: George Neff. James Hardy. 42 ACCKPTAN'CES. if ': 160. Interest- The lei;al rate of interest in Canada is six per cent., but we liave no usury law. A note drawn where nothing is said about interest will not draw interest until maturity, but if not paid at maturity it will then connnence to draw six per cent. A note drawing a higher rate than six per cent., if not paid at maturity will drop to six, and a note drawing a lower rate than six, if not paid at maturity will rise to six per cent. Any rate of interest that a man agrees to pay, and is written in the note or mortgage, will be collected. If the rate is over or under six per cent., and it is desired that it should remain at that rate after maturity also, a clause nmst be added like the following : " With interest at (the i*ate desired) until maturity, and thereafter at same rate, until paid." Compound interest cannot be collected unless it is agreed in the con- tract to be paid. Book Accounts differ from notes. A book account overdue will not draw interest unless the merchant has it printed on his invoices and bills he gives with the goods that interest will be charged after a certain date. Then it can only be six per cent, unless the debtor is willing to pay more. Simply having eight or ten per cent., as the case might be, pi-inted on the invoices does not make the charge legal, and the debtor may refuse to pay anything over six. Judgments also draw six per cent, interest. Chartered banks are allowed seven per cent, and collect it, but there is no penalty if they charge more. CHAPTER V. ACCEPTANCES. 101. Acceptance is the name given to a draft after it has been accepted. A draft is an unconditional written order from one person, called the drawer, to pay a certain specified sum of money, at a specified time, to a third party, called the payee. Drafts are also called Bills of Exchange. Bills of Exchange are divided into two classes, viz.. Inland or Domestic, and Foreign, Those payable in the same country in which they are drawn are called Inland, and those payable in another country are Foreign. The Inland or Domestic have three days' grace allowed on all except those drawn " on demand." If a draft is payable in anything but money, or if it orders some- thing to be done in addition to the payment of money, it is not a bill. But to order that it should be paid out of a particular fund, or to indicate a particular fund out of which the drawee is to re-imburse himself, or to name a particular account to be debited with the amount, or to include a statement of lyhat gives rise to the bill, would not be conditional, hence would not affect the bill. ACCEPTANCES. 48 The foreign are usually sent in sets of three, called a set of exchange, and each sent by a different route, or on a different date, so as to guard against delays in case of accident, one of the three being almost certain to reach its destination. Bankers, lawyers, etc., would not need this explanation, but the general reader will notice that in this work a draft, after it has been accepted, is referred to as a bill, or acceptance. 1658. Parties to a Draft- The Drawer is the name of the person who makes or draws the draft. He signs his name in the lower right- hand comer, where the maker of a note would sign. The Drawee is the one on whom the draft is drawn, and corresponds with the maker of a note, that is, the one who has to pay it. His name is placed in the lower left-hand corner. The Payee is the one in whose favor the draft is drawn, the pei'son who is to receive the money. The same name applies to both notes and drafts. A bill or note may be made payable to two or more payees jointly, or it may be to one of two, or to one or more of several, or it may be to the holder of an office for the time being. When the payee is a fictitious or non-existing person the bill may be treated as payable to bearer. 103- Payable to Bearer or Order. A bill is payable to bearer when it is so expressed, or when the only or last indorsement is an indorsement in blank. A bill is payable to order which is so expressed, or which is made payable to a particular person and does not contain words prohibiting transfer, or indicating an intention that it should not be transferred. A note or bill is negotiable notwithstanding that the word bearer or order is omitted. Before 1890 a note or bill not payable to order or bearer was absolutely non-negotiable, but not so since that date. Merely striking out the word order or bearer does not make the bill non-negotiable. 1454. Acceptance of Drafts. A draft is not binding until it has been accepted any more than an ordinary order on a merchant would be until he has accepted it. In accepting a draft the mere signature of the acceptor is sufficient without the usual words being added. A draft is usuall}'^ acci^pted by wi-iting across the face of it the word " accepted," giving the date, stating where it is to be payable, and then signing the name immediately under. With drafts drawn payable at sight, or a certain time after sight, or a demand draft that is not paid when presented should have the date of " acceptance " given, but a draft drawn payable a certain time after "date" need not have the date of acceptance given ; but even with these it is as well to give the date of acceptance, too. Where a draft is accepted it is said to be " honored," and where acceptance is refused it is said to be " dishonored." When a draft is presented for acceptance the drawer may demand two days for acceptance, and it cannot be protested until after that time. ill 1^1 ii il 44 ACCEPTANCES. V ir j M: 105. General Acceptance is the name used when a draft is accepted in the ordinary way as described above. 106. Qualified Acceptance is when the " acceptance " in express terms varies the effect of the draft as it was originally drawn. The acceptor has that privilege within certain limits. This may be done by what is called the Conditional acceptance, or a Partial acceptance, or one qualified as to Time, or by the acceptance of one or moi'e of the Drawees, but not oi ..■' Ittl. : tfi ;.ional Acceptance is one in which the acceptor makes the payment conditional upon something contained in it, as : " Accepted, payable out of the funds of Amity Lodge, No. 32, A. F. Sc A. M. M. Vv INFERS, TV' surer." In sucli a ciu\. W. x'liifei^ would not make him.self personally liable. 168. Partial Acceptance is where the acceptor only agrees to pay part of the amoimt stated in the draft, as : " Accepted September 4th, 1896, for fifty dollars.. W. Johnson." In this case say the draft was for S75, the drawer and endorser would have to be notified that it was only accepted for part. 169. Acceptance Changing Time- An acceptor may change the time, as, for instance, from sixty to ninety days, but in all such cases where the original conditions of the draft' are changed, the drawer and all endorsers are I'elieved, unless they are uotifiod. If, after receiving such notice, they do not, within a reasonable time, express their dissent, they are held to have given their assent to the change, and thus remain bound. The change of place for payment does not affect the draft, but the change of amount or time does. The holder also may refuse a (jualified acceptance and treat the draft as dishonored, in which case he must have it protested. lYO. Mistake in Drawee's Name. Wherever in a draft the drawee is wrongly designated or his name misspelled, he may accept the bill as described, adding, if he thinks best, his proper signature, or he may simply accept it by his proper signatui-e only. 171. Accepting Overdue Bills. Where a bill is accepted or endorsed when it is overdue it is as regards the acceptor who so accepts or the endorser who so endorses it, deemed as payable on demand. 113. Negotiating Overdue Bills. In negotiating an overdue bill it is subject to any defect of title affecting it at maturity. The absence of consideration will not likely be admitted a defect. 113. Kinds of Drafts. Drafts are divided into four classes, accord- ing to their wording, which fixes the time they are to run and the way in which the time is to be counted: (1) Demand Draft; (2) Sight Di'aft; (3) Drafts payable a certain time after sight; (4) Drafts payable a certain time after date. The following sections will give a form for each kind and the law governing it : ACCEPTANCES, 45 1T4. Time Draft after Sight. SIOO.OO. Hamilton, August 26th, 1896. Three months after sight pay to the order of James Henderson, at the Imperial Bank here, One Hundred Dollars, value received, and charge to the accotmt of R. Olmsted. To W. Jennings, St. Cathai'ines. When the above draft would be presented, say August 28th, to W. Winters for acceptance, he would write across the face pretty well towards the upper end, which is the left hand side, the words " Accepted August 28th, 1896. Payable at my office. W. Winters." He could make it payable at the Imperial Bank or any other bank if he wished. This draft, being accepted August 28th, would fall due three months after that, including the three days of grace, thus making it mature August 31st. 115. Time Draft After Date. SIOO.OO. Mount Forest, August 16th, 1896. Ninety days after date pay to the order of myself, at the Bank of Commerce here. One Hundred Dollars, for value received, and charge to account of James Smith. To W. Hunter, Georgetown, Ont. In accepting the above draft, which is payable after " date," W. Hunter need not write the date of acceptance, as the time when it will mature is fixed in the draft, being made payable ninety days after its date. In the first form it was necessary to insert the date of acceptance, as it is payable three months after " sight," that is after it was presented for acceptance. This draft W. Hunter made payable at the Bank of Montreal : A bill drawn payable after date need not necessarily be presented for acceptance until presented for payment, but it is generally presented as eai'ly as convenient. ITO. Sight Draft. .$100.00. Ingersoll, August 24th, 1896. At sight pay to the order of Martin Henderson, One Hundred Dollars, for value received, and charge to the account of To A. Smith, J. S. Williamson. Niagara Falls, Ont. The above draft is supposed to be paid when presented, but if IMr. Smith would need a little time he may accept it in the usual way, and take the tlu'ee days of grace. It will be noticed that we have varied the expression of the payee in the above drafts, the first and third being payable to thii'd parties and the W' I:: m I 46 INDORSEMENTS. r » ill » second to myself. The acceptor also changed the place of payment in the second one. lYY. Demand Draft. ^100.00. Acton, August 31st, 189G. On demand pay to the order of Brown Bros., One Hundred Dollars, value received, and charge to account of To W. WiNTER.S, Welland, Ont. H. P. Moore. The above form of draft has no days of grace allowed, but is payable when demanded. If it is not paid when presented, the holder has the privilege of giving time. In that case it would be accepted as other drafts, placing the date of acceptance upon it. It would not commence to draw interest until it was presented, but would commence at that date to draw six per cent. Demand drafts outlaw as to the acceptor in six years from date of the bill, but in regard to the drawer and indorsers the time commences to count from the time of presentment. CHAPTER VI. INDORSEMENTS. 118. Negotiation of Bills, Notes, Etc Negotiable paper has been treated in the previous chapter, and the various paper classed under that heading given in section 112, which see. A bill payable to bearer is negotiable simply by delivery as it is pay- able to any person who carries it. A bill payable to order is negotiable by the indorsement of the payee or holder and is completed by delivery. 119. Purposes of Indorsement. Indorsements are for the purpose of negotiation, or for additional security, or for the acknowledgment of a partial payment of the instrument. 180. Requisites of Indorsement. (1) It must be made on the bill itself. (2) It must be the indorsement of the entire bill or note and not merely of a part of it. (3) If payable to two or more persons who are not partners, all must indorse, unless one has authority to indorse for all. 181. Methods of Indorsement. There are several ways of indors- ing a note or draft in general use : (1) Indorsement in Blank. (2) Indorse- ment in Full. (3) Indorsement without Recourse. (4) Restrictive Indorse- ment — various forms. (5) Indorsement of Guarantee. 18%. Indorsement in Blank is where the name onlv is written across the back of the instrument. Such an indorser becon' -s responsible for its payment, and the note or draft negotiable simply by transfer. INDORSEMENTS. 47 183. Indorsement in Full is where the imlorser restricts the pay- ment of the bill or note to some particular person. There are several ways in which this indoi-senient may be worded, and the effect varied in each case. He may write across the back " Pay A. B. or order," and sign his name underneath. In this case A. B. cannot sell the paper without in- dorsing it. If such a note were lost no one could collect it but A. B. or the one to whom he endorsed it over. 184. Restrictive Indorsement is one which prohibits the further negotiation of the bill, or expresses that it gives merely the authority to deal with the bill as thereby directed, and not a transfer of the ownership thereof, as for example, if a bill, as indorsed, " Pay D. only," which pro- hibits its further negotiation, or " Pay D. for the account of H ," or " Pay D. or order for collection." These last two authorizes the further transfer of the bill, and all subsequent indorsees take the bill with the same rights and subject to the stune liabilities as the first indoi-see under the restric- tive indorsement. That is, they are merely agents and not holders in due course, and therefore any defence against the first restrictive indorsee is available against them. The restrictive indorsement gives the indorsee the right to receive payment of the bill, or to sue any party thereto that his indorser could have .sued, but gives him no power to transfer his right as endorser unless it expressly authorizes him to do so, as in the last two forms given above. A note or bill payable to bearer, or to a certain person or bearer can- not have its negotiability restricted by indorsement, but those using the word order may be so restricted as shown above. 183. Indorsement Without Recourse is where the note or draft is made transferable, but the indorser evades liability for its payment. The following is the usual form, " Without recourse to me," and the name written underneath as in other indorsements. No subsequent holder can have any claim against such an indorser. Such in. Relation between Indorsers. Where two or more persons indorse a paper at the same time as security, and the maker fails to pay, the holder may sue all or he may sue and recover from either one he thinks best. In case he collects the note from one, then that one may collect a proportionate share from each of the others. If there were three of them, he could collect one-third from each of the other two ; and if only two, then he would collect half from the other party. If the indorsements were at different dates, as they naturally would be where paper is indorsed as transferred, then the first endorser is security for all after him, etc. If the maker of such a note failed to pay, the holder could sue all the indorsers, or any one of them he might choose. Say there were three; if he sued and collected from all, the last two could each collect his share from the first, thus making him pay all, because he indorsed first, hence was security for both. If the first indorser, however, proved to be insolvent, and the second and third had to pay the whole 50 INDORSEMENTS. ) debt, tlien No. 3 would collect what he paid from No. 2, hecauHo ho endorsed before No 3. hence was hi.s Hurety. No. 2 wo»iM have to pay the whole debt and then look to No. 1 and the maker, who are liable to him, and might sonuttime be in a position to pay. No. 1 coulil only look to the maker. Where two or more indorsements ai'e on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill until the contrary is proved. 190- Collection of Notes and Acceptances. Notes and drafts made payable at a certain jilace should be presented there for payment on the third day of j^race, even if there is no indor.ser on them. Where no place of payment is specified in a bill, it is not necessary to present it for payment to render the acceptor or maker liable. If thex'o are indorsers on the paper, and it is not presented on the third day of grace, l)oth the drawer and indorsers are discharged. If the bill is payable at a bank then it must be presented durin banking houi-s, but if not at a bank then the holder has the ordinary business day. If there are no indorsers then it need not neces-sarily be presented on the (late of maturity, but must be presented for payment before any action is taken, or the holder would likely be saddled Avith the costs, and possibly lose the interest after maturity as well (see sec. 150). The failure of the holder to present a note or acceptance for payment at date of maturity will not discharge the maker or acceptor. A note payable at a bank is authority for the bank to apply the cus- tomer's funds in payment of the bill. If in such a case the maker could show that he had suffered loss by the omission to present the bill on the day of its maturity, he would probably be discharged. 191. Place of Presentment. A bill or note must be presented : 1. At the place specified. 2. If no place of payment is specified, then at the address of the acceptor. 3. If no address is mentioned in the bill, then at his place of business, if known ; if not known, then at his ordinary place of residence. 4. If neither is known, then at his last know place of business or re.sidence, or wherever he may be found. 5. Where the place of payment specified in the acceptance is any city, town or village, and no place therein specified, the bill will be pre- sented to the drawees, or p '•ceptors' known place of business or residence, and if there is no such place found, then at the post-office, or principal post-offlce is sufficient. Many a holder has lo.st his security by not pre- senting the paper for payment as the law requires, and many an indorser has paid a note from which he was legally discharged by the holder failing to comply with the legal requirements. 19%. Presentment Delayed or Dispensed With. When circum- stances beyond the control of the holder prevent presentation, it is excused ; but it must be presented os soon as the hindrance ceases. Also, when presentment has been waived by the parties liable on the instrument. ,il'5 If^ INDORSEMENTS. 51 193. To Hold Indorsers Liable. To lioM an indorser liable for payment on a note or bill that is not paid at maturity, it is necessary : 1. To present the note or hill for payment on the third day of grace (for place of presentment, see sec. 191). If this is not done the indorsers are free. i. If it is not paid, then the paper may be protested, and a notice of the protest .sent to each of the indorsers. .'i In most cases it is not neces.sary to protest, but if it is not pro- tested the notice of the dishonor must be sent just the same. This notice must contain the following three facts : 1. That the note or bill (giving its date, amount, name of maker, indorsei-H, etc.) had been presented for payment. 2. That payment was refused. 3 That the holder looks to him (the indoiser) for payment. This notice may be sent Vjy a notary, or the holder himself may send it. An oral notice is also legal, but it is always better that it be put in writing. It may be sent merely as a letter, but stating clearly the three facts above mentioned. If the letter is not registered, it would be advisable to have a witness to its contents and delivery to the post-office. If the note or draft is made payable at a certain place it must be pre- sented there for payment. If it is not mentioned in the paper whore it is payable, then it must be at the place of business or private residence of the maker of the note or acceptor of the draft, as the case may be. If his place of residence cannot be found after due diligence, or if he has left the country, the holder then may present it at the post-office where he lived. It must be presented on the third day of grace during business hours, and not on any other day either before or after. If these things are not complied with the indorser is free. The indorser might not receive the notice for several days or weeks after, but that would not make any difference so long as it was mailed to his sup- posed addres.s. The notice should be sent within twelve hours. A similar notice is also sent to the maker. 194. Discharge of Indorsers. 1. Payment of the instrument by the maker or acceptor discharges all the indorsers. 2. Failure to make a legal presentment of the note or bill for payment. 3. Giving time to the principal aischarges the sureties unless their consent has been obtained. 4. Any act which discharges the principal debtor discharges the sureties, unless the holder expressly reserves his rights against them, and in that case the principal debtor would still be liable to the claims of the sureties. 5. Any party to a bill is discharged by the intentional cancellation of his signature by the holder or his agent. 195. Protest, is a notice sent by a notaiy public, who is also usually a lawyer, to the maker and indorsers on a note or acceptance not paid at 52 INDORSEMENTS. maturity. It must contain the followinjif three facts. (1) That the note or acceptance (giving its date, amount, by wlioni 7. Then thksk puksknts, and every niatti-r and thing herein contained, shall cease, determine, and he utterly void tu all intents and purposes, anything herein contained to the contrary thereof in any wise notwithHtanding. Ami the INIortgagor, for himself, his executors and mlministrators, shall and will warrant and forever defend by those presents all and hinoulah the said goods, chattels and property unto the Mortgagee, executors, administrators and assigns against him, the Mortgagor, his executors, administrators and assigns, and against all and every other pi-rson or persons whomsoever. Anii the Mortgagor doth hereby for himself, his executors and administrators, COVENANT. PROMISE and AGREE to and with the Mortgagee, his executors, administrators and assigns that the Mcjrtgagor, his executors or administrators; or some or one of them, shall and will well and truly pay, or cause to be paid, unto the Mortgagee, his executors, administrators or assigns, the said sum of money in the said proviso mentioned, with interest for the same as aforesaid, on the day and time, and in the manner above limited for the payment thereof : And also in cake default shall BE made in the payment of the said sum of money in the said proviso mentioned, or of the interest thereon, or any part thereof ; or in case the Mortgagor shall attemi>t to aell or dispose of or in any way part with the possession of said goods and chattels or any of them, or to remove the same or any part thereof out of the County of Welland, or suffer or permit the same to be seized or taken in execution without the consent of the Mortgagee, his executors, administrators or assigns to such sale, removal or disposal thereof, first had and obtained in writing, then and in such case it shall and may be lawful for the Mortgagee, his executors, administrators or assigns, with his or their servant or servants, and with such other assistant or assistants as he or they may require at any time during the day to enter into or upon any lands, tenements, houses' and premises wheresoever and whatsoever where the said goods and chattels or any part thereof may ^e, and for such persons to break and force open any doors, locks, bars, bolts, fastenings, hinges, gates, fences, houses, buildings, enclosures and places for the purpose of taking possession of and removing the goods and chattels. And upon and from and aftor the taking possession of such goods and chattels ivs aforesaid, it shall and may be lawful, and the Mortgagee, his executors, administrators and assigns, and each or any of them, is, and are hereby authorized and empowered, to sell the said goods and chattels, or any of them or any part thereof, at public auction or priviite sal< , as to them or any of them may seem meet. And from and out of the proceedK '' ^^ h sale in the first place to pay and reimburse himself or themselves all such su .ms of money for principal, interest, insurance and expenses as may then be t liiese presents, and all such expenses as may have been incurred by the M<> L;ue, his executors, administrators or assigns in consequence of the default, neglect ui lilure of the Mortgagor, his executors, administi itors or assigns in payment of the said Hum < f money, with interest thereon as above mentioned, or in consequence such sale < . removal as above mentioned, and in the next place to pay unto the Mortgagor, his executors, administrators and assigns all such surplus as may remain after such sale and after payment of such sum or sums of money and interest thereon as may be due by virtue of these Presents at the time of such seizure and after payment of the costs, charges and expenses incurred by such seizure and sale as aforesaid. Provided always, nevertheless, that it shall not be incumbent on the Mortgagee, his executors, administrators and assigns to sell and dispose of the said goods and chattels, but that in case of default of payment of the said sum of money, with interest thereon as aforesaid, it shall and may be lawful for the Mortgagee, his executors, administrators or assigns peacefully and quietly to have, hold, use, occupy, possess and enjoy the said goods and chattels without the let, molestation, eviction, hindrance or interruption of him the Mortgagor, his executors, administrators or assigns, or any of them, or any other person or persons whomsoever. And the Mortgagor doth hereby further COVENANT, PROMISE and AGREE to and with the Mortgagee, his executors, administrators and assigns that in case the sum of money realized under such sale as above mentioned shall not be sufficient to pay the whole amount due at the time CHATTEL MORTOAOES, 05 of such sale, tlint the Mortgagor, Iuh exucutors and adniinistrAtorB shall and will forth- with pay, or cauiie to be {wid, unto the Mortgagee, his uxucutorN, adminiatratorH iind aHsigns all huuIi sum or sums of money, with inturuxt thereon, ati may then be remaining due. And the Mortgagor doth put the Mortgagee in the full possession of said gootJH and chattels by delivering to him, the Mortgagee, this Indenture of Mortgage in the name of all the said goods and chattels at the sealing and delivery hereof. And the Mortgagor COVENANTS with the Mortgagee that he will, during the continuance of this mortgage, and any or every renewal thereof, INSURE THK CHATTELS hereinafter mentioned against hiss or damage by fire in some insurance ottice (authorized to transact business in Canada) in the sum of not less than Five Himdred Dollars, and will pay all premiums and moneys necessary for that purpose as the same becomes due, and will, on demand, assign and deliver over to the said Mortgagee, his executors and administrators the policy or policies of insurance and receipts thereof appertaining. Provided that if on default of payment of said premiiuu or sums of money by the Mortgagor, the Mortgagee, his executors or adminiatratorH may pay the same, and such sums of money shall be added to the debt hereby secured (and shall bear interest at the stime rate from the day of such payment), and shall be repayable with the principal sum hereby secured. In witness whekeof the parties to these presents have hereunto set their hand and seals, Signed, Sealed and Delivered In the presence of Charles Summer. James Smith. Walter Winters. id,) lisj- Walter Winters. a J. Charles Summers. Witness, \ Charles Summers./ 6 James Smith. # Affidavit of Mortgagee — PROVINCE OF ONTARIO: I I, Walter Winters, of the Township of Stamford, County of Welland, > County of Welland, yeoman, the Mortgagee in the fore- TO WIT. j going Bill of Sale, by way of Mortgage named, make oath and say : That James Smith, the mortgagor in the foregoing Bill of Sale by way niortgage named is justly and truly indebted to me this deponent, Walter Winters, the mortgagee therein named, in the sum of five hundred dollars mentioned therein. That the sitid Bill of Sale by way cf mortgage was executed in good faith and for the express purpose of securing the payment of the money so justly due or accruing due as aforesaid, and not for the purpose of protecting the goods and chattels mentioned in the said Bill of Sale by way of mortgage against the creditors of the said James Smith, the mortgagor, from obtaining payment of any action against HiM. Sworn before me at Welland, in the County of Welland, th 4th day of January, 1896. James Brown, a cimimiimioner for taking affidavits in H. ■A I, Charles Summers, of the Township of Stamford, rCounty of Welland, mechanic, make oath and say : That J I was personally present, and did see the within Bill of Affidavit of witness — PROVINCE OF ONTARIO: •Bounty of Welland, TO wit : Sale l>y way mortgage duly signed, sealed and delivered by James Smith and Walter Winters, the parties thereto, and that the name Charles Summers set and subscribed as .■\ witness to the execution thereof, is of the proper handwriting of me, this deponent, and that the same was executed at the Town of Welland, in the said County of Welland. Sni)KN before me at Welland, in the Coi iity of Welland, this 4th day of January, in the year of our Lord, 1896. . James Brown, a commissioner for taking affidavits in H, C. J. Received on the day of the date of this Indenture from the mortgagee the sum of five hundred dollars mentioned. 66 CHATTEL MORTGAGES. If:, ISS41- Form of Discharge of Chattel Mortgage — Dominion of Canada. To the Clerk of the County Court of the County of Welland, I, Walter Winters, of the Township of Stamford, County of Welland, yeoman, do certify tltat James Smith, of the Township of Stamford, County of Welland, Province of Ontai io, hath satisfied all money due on or to grow due on a certain Chattel Mortg..ge made by James Smith, aforesaid, to Walter Winters, of the Township of Stamford aforesaid, which mortgage bears date the fourth day of January, A.D. 1892, and was registered in the office of the Clerk of the County Court of the County of Welland on the fifth day of January, A.D. 1895, as No. 4287. That such Chattel Mortgage has not been assigned, and that I am the person entitled by law to receive the money, and that such mortgage is therefore discharged. Witness my hand this fifteenth day of December, A.D. 1890. Witness, Charles Summers, | Walter Winters. Stamford, residence, i Student, occupation. J ONTARIO : \ I, Charles Summers, of the Township of Stamford, County of County of Welland. j- Welland, student, make oath and say : to wit : J 1. That I was personally present and did see the within certificate of Discharge of Chattel Mortgage duly signec'. sealed and executed by Walter Winters, one of the parties thereto. 2. That the said certificate was issued at the Township of Stamford. 3. That I know the said parties. 4. That I am a subscribing witness to the said certificate. Sworn before me at Welland, in the County "j of Welland, this fifteenth day of December, in !- Charles Sumjiers. the year of our Lord, 1896. J James Brown, a commissioner for taking affidavits in the H. C. J. %A% Renewal of Chattel Mortgage. statement exhibiting the interest of Walter Winters in the property mentioned in a Chattel Mortgage dated the fourth day of January, 1895, made betv en James Smith, of the Township of Stamford, County of Welland, of the one part, ami Walter Winters, of the Township of Stamford aforesaid, of the other part, and filed in the office of the Clerk of the County Court of the County of Welland, on the fifth day of January, 1895, and of the amount due for principal and interest thereon, and of all payments made on account thereof. The said Walter Winters is still the mortgagee of the said property and has not assigned the said mortgage. One payment has been made on the said mortgage. The amount still due for principal and interest (jn the .said mortgage is tlie sum of three hundred dollars, computed as follows : Principal $600 00 Interest 1 year, ending J unuary 4, 1896 35 00 §535 00 By cash January 4, 1890 235 00 Balance due $300 00 Affidavit of mortgagee as to correctness of statement and the balance. County of Welland, \ I, Walter Winters, of the Township of Stamford, County of TO wn : j Welland, the mortgagee named in the Chattel Mortgage men- tioned in tht annexed statment, make oath and say : 1. That the annexed statement is true. 2. That the Ciiattel Mortgage mentioned in the said statement has not been kept on foot for any fraudulent purpose. Sworn before me at the Town of "j Welland, County of Welland, this \ Walter Winters. 4th day of January, 1896. J James Brown, a commissioner for taking affidavits in II. C. J. r., tj! p^l MORTGAGES. C7 CHAPTER IX. MORTGAGES. 843. A Mortgage on real estate is a deed or conveyance of the property by the debtor to the creditor to secure the payment of a certain sum of money, with a " proviso " that it shall become void upon the pay- ment of the debt and accumulated interest. 844 Registration of Mortgages. A morgage is binding on the property as soon as it is executed, but the first moi'tgage registered is the one that has first claim. Of three mortgages that might be given on the same property the same week or day, the first one that is recorded is first mortgage, no dift'erence whether it was written first or last. 845. Be Certain of Titles. Before paying over the money there should be an abstract of title procured ; then sign and register the mortgage and have the abstract continued so as to include the mortgage, thus making certain that nothing has been entered in the meantime. At the same time this is being done the Sheriff's office should be searched to see if there are any judgments, and the Treasurer's office to see if taxes are all paid. With these precautions a safe title would oe secured. 840. Various Mortgage Clauses- There are various clauses in a mortgage that should be noticed. One provides that if interest is not paid it may be compounded ; another, that if taxes ai'e not paid the lender may pay them and charge the same rate of interest that the mortgage draws ; another one provides that if the borrower does not keep the buidings insured for a certain specified sum the lender may insure them and charge the same rate of interest the mortgage draws.' Loan companies an3. Joint Ownership is where two or more persons own a piece of property jointly. All have a right to it at the same time. This class of ownership occurs where a syndicate of persons combine to purchase and hold for speculative or other purposes a portion of land or other property. Also when a person dies without a will, his heirs have a joint interest. Joint walls built by two parties on the dividing line between two properties would be an illustration of joint property. Neither one could take it down without the consent of the other. 2454. Life Ownership is where a person has the use of property during his natural life. It may be acquired by gift or will. He cannot sell or mortgage such property. He cannot decrease its value by removing buildings, etc., or make any disposition of it at his death He may use and enjoy it for himself, or rent it to others and enjoy the proceeds, or he could sell or mortgage the use of it during his life-time. 805. Ownership by Possession. Ten years peaceful possession from the time that the real owner's right accrues gives the possessor a right to the property. If the real owner should be an heir who was in a foreign country and did not know of the property falling to him, or if the heir were insane or suffering under any other similar disability, then the time would not commence to count until the heir's return or other disability were removed. 200. Dower is where the husband dies possessed of an estate and leaves no will. The wife has her one-third interest in the lands and tenements if there ai-e children, and one-half if there are no children. A dower, of course, is only axailable after the husband's death. 201. Property in Trust is what has been conveyed to a pei-son in trust for the use and benefit of another person. Such person is called a trustee. He is empowered by the conveyance to carry out its provisions, whatever they may be, as to collection of rents, sale of property, etc., and for investment of the funds. He cannot use the property for his own pei-sonal benefit. The pei-son for whose benefit the trust is held cannot exercise any authority over it. 208. Sale of Personal Property. In the sale of personal property, as in all other contracts, the parties themselves must be competent to con- tract. The seller must have a valid title to the property sold ; the property must be something legal to be handled, and the sale must be without fraud. 11 ilM ! I!fr I 74 PROPERTY. Selling personal propei'ty, which is still retained in possession, is bind- ing as between the parties themselves, but is not binding against creditors or subsequent pui'chasers, unless a Bill of Sale is recorded. The price is either paid in nionev or promised to be so paid, for if it were paid in goods or service it /ould be a barter, and not a sale. *ii1S9. The Property Sold Must Exist. Jones sells Smith a certain horse at a certain price, but after the sale is concluded it is discovereil that the horse is dead, both parties Jiaving been ignorant of the fact. There is no sale, even though the money had been paid. 310. Property may have a Potential Existence. The natxiral products of the soil, the increase of live stock or other property may be sold in advance. For instance : A farmer may sell his apple, peach or oear crop before the buds even began to show, or the wool clipped from his sheep the following spring, etc. They are not yet in existence, but they are possible ; hence they may be sold. 811. Without Fraud. There must be no fraud, either through misrepresentation or through concealment of facts which ought to be known and which the other party cannot readily discover for himself. 8158. The Limit of an Oral Sale. The sale of personal property for any amount under $40.00 may be made orally and be binding: but for $40.00 and upwards the contract must either be in writing, or a part of the goods delivered, or a pai't payment made. Any of these throe things make the contract for the sale of personal property to any amount binding. 813. Penalty for Breach of Contract. If either party should violate such a contract as above, he would incur a penalty to the amount of damages the other party could prove he had suffered by the breach of contract, which amount would naturally be the price of the article. Illustration : A cattle buyer agrees to purchase ten head of cattle from a stock raiser and pays $20 to bind the bargain, and is to take them within ten days. After he goes away, he sees the market quotations show a great depression in foreign prices and he concludes not to carry out his contract. He cannot recover his $20, but the stock raiser can sue him for the balance of the pux'chase money. 814. Executed Sales. In sales that have been completed thei'e must be a delivery of the property and a continued change of possession. Goods yet in charge of a railway or in a warehouse may be delivered by handing over the bill of lading or warehouse receipt. This is called a constructive delivery. 815. Bill of Sale. If the goods are not delivered, but still left in the possession of the former owner, a bill of sale must be registered at the office of the Clerk of the County Court in order to make such a sale legal and binding against creditors and subsequent purchasers. fA ^w PROPERTY. 76 '/SY6. Form of Bill of Sale. VLuld 3^^^^^'WrC made the fourth day of April in the year of our Lord one tliuusand eight hundred and ninoty-six, between James Smith, of the Town of VVelland, in the County of Welland, and Province of Ontario, merchant, vendor of the first part, atid Walter Winters, of the City of Toronto, County of York, and Province of Ontario, gentleman, the vendee of the second part. Whekeam the said party is possessed of the stock of dry goods and groceries and store and ofKce fixtures hereinafter set forth, described and enumerated, and hath contracted and agreed with the said i)arty of the second part for the absolute sale to him of the same, for the sum of six hundred dollars. Jifow THIS Indenture Witnemmeth, that in pursuance of the said agreement, and in consideration of the sum of six hundred dollars of lawful money of Canada, paid by the said party of the second part, at or before the sealing and delivery of these presents (tiio receipt whereof is hereby acknowledged), he, the said party of the first part, hath bargained, sold, assigned, transferred, and set over and by these presents doth bargain, sell, assign, transfer and set over, unto the said party of the second part, his executors, administrators and assigns, All Those the said dry goods and groceries and store and ottice fixtures, as per inventory hereunto attached and marked "A." And all the right, title, interest, property, claim and demand whatsoever, both at law and eiiuity, or otherwise howsoever, of him the said party of the first part, of, in, to, and out of the same and every part thereof. To Have and to Hold the said hereinbefore assigned dry goods, groceries and store and ottice fixtures and every of them and every part thereof, with tlie appurten- ances, and all the right, title and interest of the said party of the first part thereto and therein, as aforesaid, unto and to the use of the said party of the second part, his executors, administrators and assigns, to and for his sole and only use forever. And the said parly of the first part doth hereV)y, for his heirs, executors, and administrators, covenant, promise and agree with the said party of the second part, his executors and administrators, in the manner following, that is to say : That he, the said party of the first part, is now rightfully and absolutely possessed of and entitled to the said hereby assigned dry goods, groceries and store and office fixtures, and every part thereof ; and that the said party of the first part, now hath in his good right to assign the same unto the said party of the second piin, his executors, administrators and assigns, in manner aforesaid, and according to the true intent and meaning of these pres- ents; and that the said party here, of the second p'^rt, his executors, administrators and assigns, shall and may from time to time, and at all times hereafter, peaceably and quietly have, hold, possess, and enjoy the said hereby assigned goods and fixtures and every of them, and every part thereto, to and for his own u.se and benefit, without any manner of hindrance, interruption, molestation, claim or demand whatsoever of, from or by him the said party of the first part, or any person or persons whomsoever, and that free and clear, and freely and absolutely released and discharged, or otherwise, at the cost of the said party of the first ]»art, effectually indemnified from and against all former and other bargains, sales, gifts, grants, titles, charges, and encumbrances whatso- ever. And moreover, that he the said party of the first part, and all persons rightfully claiming, or to claim any estate, right, title or interest of, in, or to the said hereby assigned goods and fixtures and every of them, and every part thereof, shall, and will from time to time, and at all times hereafter upon every reasonable request of the said party of the second part, his executors, administrators or assigns, but at the cost and charge of the said party of the second part, make, do and execute, or cause or jn ocure to be made, done and executed, all such further acts, deeds and assurances for the more effectually assigning and assuring the said hereby assigned goods and fixtures unto the said party of the second part, his executors, administrators and assigns, in manner afore- said, and according to the true intent and meaning of these presents, as by the said ])arty of the second part, his executors, adminsitrators or assigns, or his counsel shall be reasonably advised or required. In witness whereof the said parties to these presents have hereunto set their hands and seals the day and year first above written. Signed, sealed and delivered in| James Smith. ♦ the presence of V Walter Winters. ^ Charles Summers. J • V ■■ • i m'. ^ 76 PROPERTV. I ■■ 1 I Walter Winteks. Affidavit of purchase as to the sale being hona-fide for value : County of York, ) I, Walter Winters, of the City of Toronto, in the County of York, TO WIT : j the vendee in the foregoing iJill of Sale named, make oath and Hay : That the sale therein made is bona-fide, anl for good con8iduratihi:r for Uikhuj iiffidavHn in H. C. J. Affidavit of witness proving the signing, sealing and delivery of the Bill of Sale : County of York, \ I, Charles Summers, of the City of Toronto, in the County of TO wit : f York, make oath and say : That I was personally present, and did see the within Bill of Sale duly signed, sealed, and executed by James Smith and Walter Winters, the parties thereto. And that I this deponent am a subscribing witness to the same. And that the name Charles Hummers, set and subscribed as a witness to the execution titereof, is of the proper handwriting of me this deponent, and that the same was executed at the City of Toronto. Sworn before me at the City of 1 Toronto, County of York, this - Charles Summers. 4th day of April, 1896. J James Brown, a commiaxioner for taking affidaritn in II. C. J. 311. Sales on Trial. Wlien articles nw. purcliaHCMl on trial at a certain price they must be rejected before the time expires it' they do not suit, or the sale is complete and the party bound to keep them. ?818. Guaranteeing Machinery. The descriptions of machinery as to manner and excellence of work, etc , that appear in newspaper adver- tisements and circulars cannot be made a bindinjj guarantee to protect the purchaser. To have an effective {guarantee of excellence, or that the machine or instrument will do what is claimed for it in the circulars it must either be in a definite form of guarantee, or in a written or type- written lettojr. The courts allow for a good deal of what may be called exaggeration in mere advertisements, hence as an instrument or machine may always be tested before being paid for there is not much chance afterwards to recover damages for misrepresentation except on a written guarantee. 31!>. Sales by Sample or Description are made on the warranty that the goods when delivered will correspond in kind and Iy, Nix ent, to it is common to sell tlien» on the " instalment plan," the buyer obtaininjjf the possession and use, hut the seller retaining the ownership until the article is paid for. In all such cases the manufacturer's name and addi-esa must he shown on the article or a copy of the lien filed at the otHce of the County Court Clerk, and also a copy of the Hen left with the purchaser. The fee for filing the lien is ten cents. On live stock, household furniture, waggons, etc., this is not required, the lien being valid without either the name being on the article or the lien filed. (See section 150.) /888. Sale of Book Accounts is effected by assign.nent. The following brief instrument is sufficient : Fur value received, I hereby assign to (person's name) the accompanying accounts and claims against the persons whose names are enumerated {enumerate the names and amounts). (Signed) 3. Winter.s. /883. Goods Stopped in Transit. Goods not yet paid for, having been shipped to the purchaser, but before their delivery word being received of the purchaser's insolvency, may be stopped by ordering the company in whose possession they are not to deliver them, providing the bill of lading has not been delivered. If it should turn out, however, that the pui-cha.ser is not insolvent, then the seller who unlawfully stops the goods in transit may be required to indenniify the purchaser's loss, or to deliver the goods and pay damages sustained by the delay in delivery. 884. Goods Sold by Order. With all implements and machinery sold by order, the party giving the order should recjuire a duplicate of the order to be left with him. The law does not compel an agent to leave a copy of the order with the person giving the order, but the person himself has the right and the ptnver to demand it or refuse to give an order. Care should be taken to see that the copy reads exactly like the orignal. 885. Auction Sales. At every auction sale the " terms of sale " are always well advertised. If nothing were said about the terms they would be cash. The proprietor may have various conditions, as well as the terms of credit announced by the auctioneer before the sale commences, such as, that the first bid nuist be above n certain sum named, and even the amoimt to be advanced at each bid, an anderbidder, and a certain amount to be deposited at the time of sale. 880. The Auctioneer is the agent for both the seller and buyer ; hence binds both by his acts. When he is selling he is acting as agent for the seller, but in the act of " knocking down " the article to a certain bidder he is the agent of the purchaser, and in the memorandum of the sale he makes in his book he acts for both parties and binds both. Auctioneers' licenses are granted by counties and cities, who may charge a fee aneration whekbop and on payment of the said sum of money with interest thereon as aforesitid, the said party of the first part doth for himself, his heira, executors, administrators and aHsigns, cui'eittmt vromine and uyirc to and with the said party of the second part, his heirs, executors, aaministrators, or assigns, to convey and assure or cause to be conveyed and assured to the party of the second part, his heirs, or assigns, by a good and sutHcient deed in fee simple. All that the said piece and parcel of land above described, together with the appurtenances thereto belonging or appertaining, freed and discharged from all dower or other encumbrances, but subject to the conditions and reservations expressed in the original ^rant thereof from the Crown, and such deed shall be prepared at the expense of the said party of the tirst part, and shall contain the usual statutory covenants for perfect title and quiet enjoyment. And alho shall and will suffer and permit the Hnid party of the second part, his heirs and assigns, to occupy and enjoy the same until default be made in payment of the said sum of money or the interest thereof or any part thereof, or the day and time and manner hereinbefore mentioned, subject nevertheles.s to impeachment for voluntary or permissive waste. And it is expressly understood that time is to be considered the essence of this agreement, and unless the payments are punctually made at the time and in manner hereinbefore mentioned, the said party of the tirst part shall be at liberty to resell the said land. In Witness Whereof the said parties to these presents have hereunto set their hands and seals the day and year first above-mentioned. 1 James Gray. ^ In presence of J. W. Leith. William Franklin. /890. Deeds. There are various kinds of doetls in common use, as Warranty Deed witli full covenants, Warranty Deed with abbreviated covenants, Quit Claim Deed, a Deed-Poll, and Trust Deed. /SOU. Warranty Deed with full covenants is one that guarantees a jerfect tiMe and quiet enjoyment of property to the purchaser and his leirs and nssigns after him. The covenants are all written out at length Dut owing to the expense in registering they have been legally " boiled down " so as to express all the covenants in fewer words and thus called a Warranty Deed with abbreviated covenants. That is the form shown in this work, section 259. 893. Quit Claim Deed is made by a person who does not hold a perfect title to a property in favor of some one that has a claim to the property. It is much like an ordinary deed without the covenants. It conveys only the party's interest in the property without any guarantee of title. It would be used when a mortgagee purchases the land already mortgaged to him, the covenants being already made in his favor in the mortgage. It would also be used when heirs in common of an estate quit their claim to one another and to executors. /893. Deed-Poll is a deed made by one person, as in case of a Sheriff Deed. 894. Trust Deed is one made to a person called a trustee, conveying • property to him to be held in trust for some other person. 1-1 [' i> »- m W .1 ": t 80 PUOPERXr. Ill f It ■p- 295. Form of Statutory Deed. Tlie following is the short form or Statutory or Warranty Deed wiih abbreviated covenants: Vlbld 3^^^^'^'^^^^ made (in duplicate) tho first day of April, in the year of our Lord one thousand eight hundred and ninety-six, in puhsuanoe of the act kesfect- ING SHOUT FORMS OF CONVEYAN«!ES. Beiween James Smith, of the Township of King, County of York, and Province of Ontario, merchant, of the first pan, and Mary Jane Smith, wife of the party of the first part, of the second pare, and Walter Winters, of the Township of King, County of York, and province aforesaid, yeoman, of the third part. Witnesseth that in consider.) tion of Three Thousand Dollars (?3,000) lawful money of Canada, now paid by the said party of the third part to the said party of the first part (the receipt whereof is hereby acknowledged), he, the said party of the first part, DOTH GRANT unto the Said party of the third part, in fee simple, All and singular that certain parcel or tract of land and premises situate, lying and being in the Township of King, County of York, and Province of Ontario, contain- ing by admeasurement one hundred acres, be the same more or less, being composed of the South part of lot Number 19 in the 7th Concession of the township of King afore- said. To HAV^ AND TO HOLD unto the Said party of the third part, his heirs and assigns, to and for his .and their sole and only use forever, srB.iEOT nevertheless, to the reservations, limitations, provisos and conditions expressed in the original grant made thereof from the Crown. (Note. — The Jive following items are the covennnts that make a Watranty Deed of thin.) The said party of the first part covenants with the said party of the third part, THAT he has the right to convey the said lands to the said party of the third part, not- withstanding any act of the said party of the first part. And that the said ])arty of the third part shall have quiet possession of the said lands, free from all encumbrances. And the said party of the first part covenants with the said party of the third part, that he will execute such further assurances of the said lands as may be reiiuisite. And the said party of the first part covenants with the said party of the tiiird part that he ha^ done no act to encumber the said lands. And the said party of the first part releases to the said party of the third part, ALL HIS CLAIMS Upon the said land. An I Mary Jane Smith, the party of the second part, hereby bars her dower in the said lands. 1\ VVitne.s.s Whereof the said parties have hereunto set their hands and seals. Signed, Sealed and Delivered"! .Ta«.,u Sm.t.« ^ in presence of Charles James Smith. Mary Jane Smith. SUM.MER.-. / Mary Jane Smith. % County of York, 1 I, Charles Summers of the Township of King, County of York, TO WIT : ' J and Province of Ontario, gentleman, make oath and say : 1. That I was personally present and did sec- the within instrument and duplicate thereof duly signed, sealed and executed by James Smith and Mary Jane Smith, two of the parties thereto. 2. That the said instrument and duplicate were executed in the Township of King, 3. That I know the said parties, 4. That I am a subscribing witness to the said instrument and duplicate. Sworn before me in Toronto, \ in the County of York, this !- fourth day of April, A.D. 1890. J John H. Williams, A commimoner for takimj affidavits in the Coimlij of York. Charles Summers. TW PROPERTY. 81 396- Who Should Sign. Any person who has anythinjif yet to 8. A Deed of Gift of property from father to son, etc., is usually drawn in the parts that relate to the consideration, " Witnesseth that in consideration of the natural love and affection and the sum of one dollar," thus giving both a good and valuable consideration. 8!M>. Writing Deeds. Any person may write a deed who is capable of describing the property. The Chi'istian names of the various parties must all be given in full. The deed should be written in duplicate, one for registration and one retained by the purchaser. There must be a witness who makes an affidavit that he saw the insti'ument signed. See form above. The afHdavit may be made l)efore a Registrar, Deputy Registrar, Supreme or County Judge, a Commissioner for taking affidavits, or a Magistrate. 300. Delivery. An agreement or deed may be signed and sealed, but it has no binding effect on the maker until it is delivered into the hands of the parties in whose favor they are drawn. 301. Registration. All instruments respecting titles of real estate should be registered in the Registry Office of the County in which the property is situate, as all documents take precedence according to priority of registration. Also, if a deed or mortgage should be lost or destroyed a duly certified duplicate can be liad at any time from the Registrar for a small fee. For twentj'-five cents the title of any propertj'^ may be examined and copies taken from every mortgage or agreement respecting it. If the Registrar makes a certified copy of any document, he is entitled to a reasonable fee therefore. The fees for registering are: $1.40 for the first 700 words or under, and fifteen cents for each additional hundred from 700 to 1,400, and ten cents for each additional hundred over 1,400. 6 m m ■ Ir k / F 82 PROPERTY, As stated above, documents take precedence according to priority of registration. For instance : two mortgages made on the same property, one dated June 10th, 1895, and not registered until June 30th, 1895, and another dated June 29th, and registered June 29tli, 1895, the latter one, being registered first, would have first claim on the property and would have to be satisfied before the other one, although it was written second. It is desirable that all documents should be registered as soon ,iv possible after their execution. 303. Corporation Deefds, Etc When land is conveyed to a cor- poration it is made to " their successors " instead of their heirs, and to their " successors in office," where a conveyance is made to trustees. Coi'poration deeds do not need the affidavit of the witness, as the affixing of the corporate seal of the corporation or company is sufficient evidence of genuiness when signed by their chief officers. 303. Searching Titles. (1) Search the Court's Registry Office or get an abstract from the Registrar to see if there are any mortgages, liens or dowers against it. (2) Search the office of the Sheriff of the County to see if there are any judgments recorded against the owner. (3) Search the town or city or County Treasurer's office to see if there are any unpaid taxes against the property. 304. Form of Quit Claim Deed. This Indenture, made (in dupli- cate) the first day of April, in the year of our Lord one thousand eight hundred and ninety-six. Between James Smith of the Township of Stamford, County of Welland, Province of Ontario, merchant, of the first part, and Mary Jane Smith, wife of the party of the first part, of tlie second part, and Walter Winters of the Township of Stamford, County of Wellaiifl, Province aforesaid, yeoman, of the third part. Witnesseth that the said party of the first part, for and in consideration of the sum of three thousand dollars (3,000) of lawful money of Canada, to him in hand paid by the said party of the third part, at or before the sealing and delivery of these presents (the receipt whereof is heveV)y acknowledged). Has granted, released, and (juitted claim, and by th< sc pn^sents doth gi'ant, release and quit claim unto the said party of the third part, his heirs and assigns, all estate, right, title, interest, claim and demand whatsoever, both at law and in ecjuity or otherwise howsoever, and whether in possession or expectancy of hini the said party of the first part, of, in, to or out of All and Singtilar that certain parcel or tract of land premises situate, lying and being in the Township of Stamford, in the County of Welland, Province of Ontario, containing by admeosurement one hundred acres, be the same more or less, being composed of the soutli part of Lot No. 19, in the 7th Concession, in the Township of Stamford aforesaid. To have and to hold the aforesaid land and premises, with all and singular the appurtenances thereto belonging and appertaining unto and to tile use of the said party of the third part, his heirs and assigns for(!ver. \ If MARRIED women's PROPERTY RIGHTS. 88 James Smith. Subject Nevertheless, to the reservations, limitations, provisos and con- stitutions expressed in the original grant thereof from the Crown. And Mary Jane Smith, the said party of the second part, hereby bars her dower in the said land. In witness whereof, the said parties hereto have hereunto set their hands and seals. . Signed, Sealed and Delivei-ed ^ j g ♦ CHTKErSUMML, \ M«VJ«. SMITH,* Received on the day of the date of this indenture, the sum of Three Thousand Dollars ($3,000). Witness : ) Charles Summers. J Affidavit of witness to the execution. County of Welland \ I, Charles Summers, of the Township of Stam- y ford. County of Welland, Province of Ontario, TO WIT : j gentleman, make oath and say : 1. That I was per.sonally present, and did see the w^ithin Instrument and the Duplicate thereof duly Signed, Sealed and Delivered by James Smith and Mary Jane Smith, two of the parties thereto. 1. That the said Instrument and Duplicate were executed in the Township of Stamford. 3. That I personally know the said parties. 4. That I am a subscribing witness to said Instrument and Duplicate. Sworn before me in Stamford, County of') Welland, Province of Ontario, this fourth V Charles Summers. day of April, AD. 1896. j John H. Williams, a coviviissioner for taking affi,davit8. CHAPTER XL ■iHi MARRIP:D W0MEN8 PROPERTY RIGHTS. 305. An unniiiirit^d woman, either a spinster or a widow, is as free to contract as a man. A married woman in Ontario now may contract in regard to her own propei-ty just as frcoly as a man. She can buy and sell, engage in trade and connnoice, sue and ho sued in her own name, and her separate pro- perty only be liable for her debts. A woman married brfore the 4th May, 1859, may hold the property that had not then been reduced to the possession of her liusband, whether belonging to her before marriage or acquired by her after marriage, entirely free from his debts and obligations contracted since that date. V i: 84 MARRIED WOMEN .S PROPERTY RIGHTS. A woman married between May 4th, 1859, and March 2nd, 1872, may hold all her separate property whether belonging to her before marriage or acquired bj' her since, entirely free from any debts and con- trol of her husband. This does not apply to property received from her husband after marriage. A woman married since the 2nd of March, 1872, may hold all her own separate property free from the debts and obligations or control of her husband, and free from any estate therein of her husband during her lifetime. A woman married on or since the first day of July, 1884, may not only hold her own separate personal and real property, but also may dis- pose of her personal and real property without even the consent or signa- ture of her husband. Any shares or stock in any Bank, Stock or Loan Companj^ or any debentui'es standing in the name of a woman married since July 1st, 1 884, are deemed her own separate property, unless otherwise shown ; and she has a right to all dividends and profits arising therefrom, and to trans- fer the same Avithout the concurrence of her husband. But if a married woman should pui'chase such shares or stocks with her husband's money, without his consent, the husband may procure an order from the court to have such investments and the dividends thereof transferred to him. If, also, a mai-ried woman made such investments with her husband's money, to defraud his creditors, such investments may be followed by the ci'editors and taken to satisfy their claims. A married woman has the same remedies for the protection of her separate estate against her husband that she has against other parties. In any proceeding concerning their property, the husband and wife are competent to give evidence against each other. A married woman is liable after her marriage for the debts she con- tracted before marriage, and for all contracts entered into or wrongs committed before marriage, and all sums recovered against her for such contracts or cost incurred therefor are payable out of her separate estate 30(5. The Husband's Liability- The husband is liable for the debts of his wife >?ontracted and for all contracts entered into and wrongs committed by her before marriage, and for wrongs committed by her after marriage to the extent of the property he has come into possession of through his wife. A husband and wife may be sued Jointly in respect of any such debt or liability contracted or incurred by tlio wife, as mentioned in previous paragraph, but if the plaintiff fails to establish the liusband's liability in respect to the property he may have ac(|uired through his wife, the husband will obtain judgment for the costs of defence, whatever may be the result of the action against the wife. If the plaintiff succeeds in establisliing the husbands's liability, he will obtain joint judgment against the husband personally, and again«*^, the wife as to her separate property, and if the husband's liability does not extend to the amount of the claim or damages, the residue will be against the wife's separate estate. I • w MARRIED WOMEN S PROPERTY RIGHTS. 85 30T. Wife not Liable for Family Debt. For in.stance, a wife keeping boardei'H and buying goods on ci*edit for the general family expt^nso does not render her separate estate liable for the debts. The hus- band and the husband's property only are liable. If the merchant wishes to render the wife liable he must make the contract with her by having her purchase in her own name, or to guarantee the payment. A married woman, however, engaged in business in her own name, any goods which her husband orders and she accepts are chai-geable against her, the husband being merely an agent. JJ08. Mortgage and Wife's Property. The husband cannot mort- gage any goods that belong to the wife, obtained either Ijy purchase with her own money, or gifts from other persons. The wife need not sign a chattel mortgage unless she owns part of the goods, and desires to mort- gage them. $09. Wife's Future Property not Liable. A wife indorsing or signing notes with her husband I'enders liable whatever property she has in possession at the time or may accjuire afterwards. But if she has no separate estate, that is no property in possession at thr to ex[)ross the consideration as in the following forms. It may be nominal, as one dollar, or the actual consideration umy V»c e.xprossed as in section 321. 319. Guarantee of Debt Already Incurred. In consideration of One Dollar, the receipt of which is he eby acknowledged, I guarantee that the debt of One Hundred and Twenty-tive Dollars now owing to James Forsyth by Henry Johnson shall be paid at maturity. Forest, Aug. 11th, 1896. W^iLLiAM Jennings. This guaranty' might be addressed to James Forsyth in the form of a letter, and closed with " yours respectfully," etc., or made as above. f •■ 1 ii| 11::^ ■s if M s'f li ■1 lit hi THF PROP^ 'TY OF ■fHc LAW iioCIEry 88 GUARANTY AND SURETYSHIP. I I 3S0. Guaranteeing Future Purchases. This is what would be called a " continuing guarantee." Toronto, August 31st, 1896. In consideration of One Dollar, I hereby guarantee the payment of all goods purchased by John Dillon from Alfred Freeman during the remainder of the year 1890, said purchases not to exceed One Hundred and Fifty Dollars. Walter Jone.s. This guarantee might be exhausted in a single purcliase, or during the first month, or by numerous purchases during the whole period, to January 1st, 1H97. IVZi. Guaranteeing: a Horse. Berlin, August 31st, 1896. In consideration of Seventy-five Dollars for a bay horse, I hereby guarantee him to be only four years old, sound, (juiet in harness and true to draw. James Smith. tViH. Guarantee Insurance. There are companies that guarantee the honesty and fidelity of persons engaged in responsible positions as clerks, bookkeepers or managers in any moneyed institution or cor- poration. A company receiving a clerk under such guarantee must not change his employment from that for which his fidelity was guaranteed, as that would change the contract and release the guai-antor. Private individuals also sometimes guarantee the fidelity of a clerk or other employee. 323. Form of Fidelity Bond. I^now all fiDen b^ tbese jpreeents, That we, Henry a. stone, of the Town of Welland, in the County of Welland, Province of Ontario, bookkeeper; Robert E. DufF, of the Township of Pelham, in the said County, farmer, and Edmund Miller, of the Township of Bertie, in the said County of Welland, farmer. Are held and firmly bound to the Ontario Silver Co. (Limited), hereinafter called the Company, in the sum of Three Thousand Dollars to be paid to the said Ontario Silver Co. (Limited) and their assigns, for which payment, well and truly to be made, we bind ourselves and every of us, and every two of us, and every of our heir,s, executoi's and adminis- trators, and the heirs, executors and administrators of every two of ua, jointly and severally, by these presents, sealed with our respective seals. Dated this thirty-first day of August, one thousand eight hundred and ninety-six. Whereas, the said Company have agreed to take the said Henry A. Stone into their service as bookkeeper, or to act in any such other capacity for the Company as Leonard McGlashan, of the village of Stonebridge, manager of the said Company, or the Board of Directors of the said Company, may from time to time recjuire, or appoint, or as may GUARANTV AND SURETYSHIP. 89 III d be uring •d, to mtee ns as cor- lange that clerk tone, ;ario, said 1 the ted), rs to , for very inis- F us, Is. Jred yA. ther i of •s of nay be from time to time agreed upon with the said Henry A. Stone, upon the said Henry A. Stone and the said Robert E. Dutt" and FMmund Miller as sureties for liiin, entering into the above written bond or obligation for the fidelity of tlie said Henry A. Stone while in such employment as aforesaid. And whereas, it is intended and agreed that this security shall be in force during the wliole of the time during which the said Henry A. Stone shall be in the service of or employed by the said Company in such capacity, or in any other capacity. Now the conditions of the above written Bond or Obligation is such tliat if the said Henry A. Stone shall at any time hereafter, so long as he shall be in the service or employment of the said Company, as clerk or in any other capacity, faithfully, honestly and diligently perform and dis- charge the said service and all the duties which may devolve upon the said Henry A. Stone as such clerk or otherwise as aforesaid, and sliall whenever required, duly account to the said Leonard McCjIlashan, or other I)erson or persons for the time being acting as Manager of the said Company, or to the said Board of Directors of the said Company, for all money, goods and property whatsoever for or with which the said Henry A. Stone may be in any wise accountable for or chai'gable to, or by him or them as such clerk, or otherwise as aforesaid, and shall, whenever requii-ed, duly pay or deliver all such moneys, goods and property to liim or them, or in case the said Henry A. Stone, Robert E. Duft" or Edmund Miller, or any of them, their or any of them, their or any of their heira, executors or administrators shall, when required, make satisfaction to the said Leonard McGlashan, or sucli other person or persons for the time acting as Manager of the said Company, or the Board of Directors of the said Company, for all such moneys, goods or property which may be lost, misplaced or unlawfully disposed of by the said Henry A. Stone, or shall not be duly accounted for, or paid or delivered as aforesaid, and shall keep the said Leonard McGlashan, or such other person or persons aforesaid of the said Company indemnified against all losses, damages, and expenses whatsoever by reason or in conseiiuence of any such act or default of the said Henry A. Stone. And so that any forgiveness or forbearance on the part of the said Leonard McGlashan, or the person or persons aforesaid, or the said Company towards the said Henr}' A. Stone in respect of his failure or neglect to perform such services or duties, or make such payments as aforesaid shall not in any way release or exonerate the said Robert E. Duft' or Edmund Miller, either of them, their or either of their respective heirs, executors or administrators in respect of their or his liability under the above written bond, and so also that the .said Robert E. Duflf or Ednuind Miller, or their respective heirs, executors or administrators shall not separately or individually be liable to pay more than Fifteen Hundred of the above written Bond. Then the above written Bond or Obligation shall be void and of no effect, or otherwise shall be and remain in full force and virtue. Henry A. Stone, ^' Robert E. Duff, <% Edmund Miller. ^ Signed, Sealed and Delivered, "j in the presence of !- Curtis Augustine.) ■Ill ■ 5S m 90 GUARANTY AND SURETYSHIP. 3/S4. Creditor's Obligations to Guarantor. 1. To give notice of default witiiiii reasonable time after it is known. 2. To give the guarantor, as soon as lie has made good the default, all his rights against the debtor. If any property of the debtor or other collateral security is in his hands, to turn it over to the guarantor. The guarantor, after making good the default, takes the place of the creditor, and may recover from the debtor not only the original debt, but also all expenses and costs incurred. 3/S5. Discharge of Guarantor or Surety. 1. If the guarantee is given for a certain specified time, then at tiio expiration of that time the guarantor is released. 2. If the guarantor gives notice that he will not be surety after a certain date, he is then relieved from any default after that time. Of course this would not apply on a negotiable instrument not yet due, or any contract the time for which to be executed had not yet expired. 3. Any alteration of the agreement withotxt his knowledge or con- sent will discharge the surety. The erasure or interlineation of any words that have the effect of changing the liability creates a new and different agreement from the one wliich the surety had guaranteed. Such alterations can only be legally made by the surety giving his consent in writing. 4. An extension of time given by the creditors to the debtors by valid agreement releases the surety unless he gives his consent. A mere promise to extend the time would not release the surety, because the pro- mise would not be legally binding, and if the surety refused to allow the extension the creditor could sue the debtor or accept payment from the surety and invest him with all his rights and remedies. In order to be a discharge to the surety, the agreement with the debtor must be one that Innrh the creditor to an extension of time for payment, so that he is prevented from proceeding against the debtor himself during that time, and which consequently prevents the sui'ety from exercising his right of paying the creditor and suing the debtor upon the claim. 5. Fraud, either in respect to the contract itself, or some fraud or deception practiced by the creditor himself or by the debtor with the creditor's consent, by which the s\irety was induced to guarantee the debt, releases the surety from his obligation. 326. Rights Between Sureties. When several sureties unite in a guaranty, each one is required to contribute equally to the satisfaction of the claim should the debtor fail to make payment. If one were found to be insolvent the others would be bound to bear the burden equally. In case one paid all he could recover from his co-sureties their equitable share of the loss. This e(piitable distribution of the liability holds unless there is an agreement between the sureties that changes it. If the last surety, as with indorsei's on a note, were to add to his signature, " surety for the above names," or words of similar import, he would not become a co- surety, but would merely be liable in case the others fail. "The respective liabilities among indorsers on a promissory note has been noticed in that chapter. PRINCIPAL AND AGENT. 91 own. 'ault, >ther the but the an CHAPTER XIII. PKINCIPAL AND A(JENT. 3?JT. Agency is where one person transacts business for nnotlier. The errand boy, the clerk, the conductor, engineer, switchman, the com- mission merchant and the farm laborer are all agents as much as those engaged in selling machinery or fruit trees on commission or salary In all branches of business where one person acts for another there is an agency. JI28. The Principal is the one who engages another to act or do business for him. Anyone competent to contract may act as principal, and he may delegate to another the authority to do for him anything that he can do for himself. JiUO. The Agent may be any person the principal may employ — a minor or any person with intelligence enough to follow instructions. A minor, although not competent to contract for himself, can, as an agent, make any contract his principal could make. 330. Agent's Appointment. An agent may be appointed simply by word of mouth or by Power of Attorney, or it may only be gathered from facts. A principal who ratifies an act which his agent was not authorized to do becomes responsible for that act, and also for all similar acts though they are not ratified by him. To evade liability, or to refuse to make the transaction his own is merely to i-efuse to accept the benefits accruing from the transaction. He may ratify it either by express words, or by resolution of the directors if a stock company, or it may be by simply accepting the benefits accruing from the unauthorized business so transacted. 331. Appointment by Power of Attorney. When the business to be performed by the agent is of such a natin-e that it requires him to sign notes, accept drafts, issue che(|ues, sign deeds, mortgages, etc., or to enter into other contracts under seal, a formal document under seal, called a Power of Attorney, is usually given. This Power of Attorney may be general — giving the agent power to transact all the usual business of the principal ; or it may be specific — giving authority only to one or more particular acts, and no more. A Power of Attorney may also be proved by being executed in the presence of a notary public who places thereon his attestation of its execution. 33^. Form of Power of Attorney. Know all men by these Presents, that I, James Everingham, of the town of Strathroy, in the County of Middlesex, and Province of Ontario, i lerchant, do nominate, constitute and appoint James Marion, of the City of Chatham, County of Kent, my true and lawful attorney, for f i ill VI itt Mi. IMAGE EVALUATION TEST TARGET (MT-3) 1.0 ^^ ta ■tt Itt ■2.2 S HA ■" £ li& 12.0 I.I il-25 iU 116 lllll^^^s HHI^^s MI^^B 6" Photographic Sdmoes Gorparation 13 «mT lAVH STRHT WIMTK,N.Y. 14SaO (71*)S7a-4S03 92 PRINCIPAL AND AGENT. me, in my name and on my behalf to (give in full the work to be done by Marion for Everingham). And for all and every of the said purposes hereinbefore mentioned, I do hereby give and grant unto the saicf James Marion, full and absolute power and authority to do and execute all acts, matters and things neces- sary to be done for the full and proper carrying out of all said mattei-s entrusted to him and do hereby ratify and confirm, and agree to ratify and confirm and allow all and whatsoever the said James Marion shall law- fully do by virtue thereof. In witness whereof I have set my hand and seal this 31st day of August, 1896. Signed, Sealed and delivered . in the presence of >- James Everingham. # A. L. Jones. } 333. Limit of Authority. A signature by procuration (as agent) operates as a notice to the public that the person so signing has but a limited authority, and the principal is bound by such signature only so far as the agent is acting within the actual limits of his authority. As a usual thing the instructions given by the principal to an agent are to do a specific business, also how it is to be done ; but in carrying out the details the agent is allowed considerable latitude. He must follow his instruc- tions. If he exceeds his authority he renders himself liable. If he is to sell goods for cash he must not sell on credit or accept notes ; if to collect money on accounts this would not authorize him to issue notes or accept drafts in his principal's name. 334. General Ag^ents ai'e those who have authority to act in all capacities in the place of their principal, or all in a certain kxjality, or all of a certain kind. A commission merchant would be a general agent, so also are Secretaries, Treasurers and Managers of Stock Companies. The acts of general agents bind their principals with respect to third parties even for fraud or negligence on the part of the agent. 335. Special Agents are those who are limited to a certain class of action, and their principal is not responsible for what they do outside of this. On this account parties dealing with any special agent should be careful that their contract comes within the agent's authority if it is important to them that the principal should be held responsible. 33«. Agent's Obligations to Principal.— 1. To use the same care and foi-ethought in the management of the business that he would if it were his own. 2. To follow implicitly the principal's or.y damage that may occur through his negligence, and for any loss tliat may arise through his failure to carry out his instructions. If he departs from his instructions and thereby secures any gain the principal has the benefit of it, but if his deviation produces a loss the agent is liable for it. He is liable to third parties if he goes beyond his authority. In that case he does not bind his principal, but he renders himself personally liable. A person assuming to act when he has no authority renders him- self liable for damages. He is also liable to third parties for any wilful injury committed against them. The fact of his being an agent does not relieve him from his obligations as a citizen, hence even while in the discharge of his principal's business if he wantonly commits any injury he alone is liable. He is also liable for any criminal action of which he may be guilty. . He also makes himself personally liable to third parties if he should improperly sign a note or accept a draft by signing his own name as agent. If, say, W. Winters, as an agent, were to accept a draft by writing W. Winters, Agent, he would be personally liable for its payment. The same is true of Secretaries, Treasurers and Managers of Stock Companies. They should in every case, when signing for their company or their principal, sign the name of the company or principal in conjunction with their own. The following are suitable foi'ms : James Smith, Per W. Winters, Agent. W. Winters, For James Smith. James Smith, Pro Con W. Winters. Dominion Transportation Co. (Ltd.), Per W. Winters, Manager. W. Winters, Manager, Signed for and on behalf of Domiv ion Transportation Co. (Ltd.). An agent may describe liimself either by the term " per," " pro," " pro con," or the word " for.'" He must always disclose the fact that he is only an agent, or he may be held personally liable ; and he must sign his prin- cipal's name as well as his own either before or after it. 338. Principal's Liability. General agents bind their principals, rendering them liable to third parties even for the fraud or neglect ot the agent. The employees of Railroad and Steamboat Companies, etc., are all I 11 94 PRINCIPAL AND AGENT. general agents. When passengers are injured through an accident they do not enter an action against the captain or engineer, whose negh- gence may have caused the accident, but they sue the company — the principal. Special agents do not bind their principal only in so far as they keep within the limits of thoir authority. If they pass beyond this, or are guilty of a fraudulent act, they only render themselves liable. Third parties should ascertain the authority possessed by special agents if they would protect themselves when contracting with such. An agent should always have the evidence of his authority with him, and if he has it not no important transaction should he performed with him. Money paid to an agent who has no authority to receive it cannot be recovered from the principal. Money should never be paid to an agent for a note unless he has the note to deliver over. A contract made with a special agent who is exceeding his authority cannot be ."enforced against his principal. An agent's authority dies with his principal; if, however, he acts after the death of the principal innocently, both are relieved. Notice given by the agent to third parties is notice given by the principal, and notice given by third parties to the agent is notice given to the principal. 339. Sub-Ag^ent is one who acts under another agent, either general or special. The same principles and laws rule between the agent and his sub-agent as exist between himself and the principal. The agent is the principal to the sub-agent. 340. Termination of Agency.— 1. By lapse of time. At the expiration of the time for which the agent was appointed the agency ceases unless there has been a re-ap- pointment. The re-appointment need not necessarily be formal, but by any of the means already mentioned for the creation of an agency. 2. Completion of the undertaking terminates the authority of the agent. 3. A legal revocation of the principal terminates the agency. Where the agency would not be for any definite time, or the completion of a specific work, the principal could withdraw the powers he had granted ; but if it were a definite time not yet expired or a specific work not yet completed there must be sufficient cause before a revocation could take piace. An agent exceeding his authority, guilty of fraud, or becoming incapacitated for his duties would be sufficient cause for his dismissal. 4. Death or incapacity of either principal or agent terminates the agency. Insanity or death of either principal or agent, or the insolvency of the principal dissolves the agency. If an agent's appointment was by a document under seal it would require a seailed instrument to cancel it. 341. Effect of Notices, Tenders, etc. Notice given to the agent is deemed to be given to the principal at the same time it was given to MASTER AND SERVANT. 95 the agent, and payments tendered to the agent is payment tendered to the principal. Notice or payment tendered by the agent to the third parties IS tendered by the principal. 34S. Ratification and Disaffirmance- If an agent should do business for the principal which he is not authorized to do and the principal accepts it, he thereby ratifies it, and thus becomes responsible, not only for that particular transaction but for all similar acts. Ratifi- cation of an act has the same effect as prior authority. Ratifications may be effected in two ways : (1) By express words. In case of corporations and stock companies it is usually done by resolution. (2) By accepting the benefits accruing from the act. By refusing to make the transaction his own, either by express words or by refusing to accept the benefits accruing from it is disaffirming the act. 11 CHAPTER XIV. MASTER AND SERVANT. 343. The Relation subsisting between Master and Servant is in many respects the same as that subsisting between principal and agent, so that what has been given in the previous chapter will in nearly every particular apply here. The master is the employer and the servant the employee. In order to constitute a contract of hiring and service there must be either an expressed or implied mutual engagement binding one party to hire and remunerate and the other to serve for some determinate time. In cases where the employer only agrees to pay as long as the servant remains, leaving it optional either with the servant to serve or the master to employ, there is no contract of service and hire. 344. Contract of Service and Hire. Oral as well as written agreements between master and servant, and between master and journey- man or skilled laborer in any trade or calling are binding unless the term exceeds one year. If for a longer period than one year it should be in writing, and if for a shorter period than one year, but which does not commence in time to be completed within the year, it is required to be in writing. No voluntary contract of service shall be binding on either party for a longer time than nine years from date of contract. If no express contract has been made for hire between the parties a contract will be presumed if the service is performed, unless it is with near relatives, as with parent or uncle. If service has been performed without anything being said about wages the law presumes that the parties agreed for the customary wages for that kind of service paid in that community. But the law will not presume either a contract of hire or an agreement to pay wages where I < I U 96 MASTER AND SERVANT. service is rendered with near relatives, as a parent or uncle. In such cases an express hiring must be proved in order to support a claim for wages. Where it is not specially agreed to the contrary, wages would be payable at the end of the time. A person agreeing to serve as a laborer or clerk cannot be compelled to fultil his agreement, but damages may be recovered for breach of the contract. A person agreeing to hire another for a day, week, or month cannot be compelled to fi.rnish work, but if the one hired presents himself for service each day he can collect his wages. 345. Form of Agreement for Hire. This Agreement, made the 3rd day of April, 1896, between John Smith of Grantham, yeoman, of the first part, and James Robinson, of St. Catharines, laborer, of the second part. Witnesseth that the party of the second part agrees with the party of the first part to serve him as a farm laborer and general servant for the period of one year from this date, and in all things to faithfully observe and do all the reasonable wishes and commands of the party of the first part. And the party of the first part agrees to pay the party of the second part one hundred and fifty dollars and to board and lodge the party of the second part during said period, and to cause all necessary laundry wash to be done for him. Said money to be paid as follows : Fifty dollara in six months, and the balance at the expiry of said service. Witness our hands the day and year above written. Witness : Charles Summers. James Robinson, John Smith. 346. Contract of the Employee. . a employee must fulfil the agreement, whatever that may be, and to do this faithfully requires not only diligence, but his careful attention, skill and forethought. The implements, machinery or other propertj' with which he may be working, or which fall under his care, require not only proper use by himself, but also his care that they be not stolen. The live stock that may be entrusted to him, humanity as well as his agreement requires that he sees to it that they have food and water and proper care in general. His master pays for his skill as well as he does for his time, also his diligent forethought in planning or executing his work. He is expected to obey all reasonable orders from the master, to be punctual and courteous. A flagrant violation of the implied agreement in any of these particulars renders him liable for damages or for discharge as the case may be. 341. Notice to Leave. A servant hired for a definite period, either for a day, a week, a month, or a year, may, on the termination of the time, leave, or the master may discharge him withont giving any notice. Where the hiring is for no definite time and the wages paid so much ■•^, li MASTER AND SERVANT. 97 per day, week, month, or year, when either party wishes to terminate tlie contract the other party is entitled to notice : If paid by the day A day's notice. If paid by the week A week's notice. If paid by the month A month's notice. If paid by the year Three months' notice. The notice need not be in writing, but where the time is longer than a day it would be much better to give a written notice. 348. Causes for Discharge Without Notice. The employee is E resumed to give due diligence to the discharge of the duties assigned to in*, to be punctual as to time, to obey all reasonable commands, and to be responsiole for all damage caused by his negligence. If, therefor, he violates the agreement by habitually neglecting his duties, by taking absences without permission, or in any of the following ways, he may be discharged withoxit notice by paying him the wages due : 1. Wilful disobedience of any lawful order of the master. 2. Gross moral misconduct. 3. Ilrtb'tual negligence in business, or conduct calculated seriously to injure the master's business. 4. Inconjpetence in the higher service where special knowledge or skill is recjuired, or permanent disability through illness. Temporary illness would not be sufficient cause for discharge. The wages to be paid in case of a discharge for cause are not neces- sarily in proportion to the time the servant has labored. The wages that are due must be paid, but the wages that may have been earned may not yet be due, and these need not necessarily be paid. 349. Discharge with Notice. Persons employed on a weekly or monthly service may (juit or be discharged by giving a week's or a month's notice ; or at a moment's notice by payment of a week's or a month's wages. 330. Cause for Leaving. The master's commands are presumed at time of contract to be reasonable, legal, and to be within the limit of work the servant was employed to perform. The implements and machinery are supposed to }>e suitable for that kind of work and so pro- tected as to be reasonal)ly free from danger. If, therefore, the master gives unreasonable commands and endeavors to enforce them the servant has cause for lea^•ing. If the machinery or any particular machine u. d by the employee is not considered suitably protected and he gives notice to the employer, who still requires work to be done with the dangerous machine, it is a cause for leaving. If any accident occurs after giving of such notice the employer is liable fo: damages. If the servant used the machine without giving any notice of its danger he cannot claim damages for an accident. If the master does not pay the wages as per agreement the servant 7 III I M \ i 98 MASTER AND SERVANT. may procure a discharge and wages due by placing the matter in the hands of a Justice of the Peace. 351. Master Liable on Servant's Contracts. If a master holds out his servant as an authorized and accredited representative he is responsible for his action. This liability may arise in three ways : 1. By adoption by the master of the servant's contracts. If the ser- vant as agent contracts for his master and the master adopts and ratifies the contract, he will be liable on it. 2. By giving express authority to contract either by deed, writing or word of mouth. 3. By creating an implied authority to contract. The servant's usual employment is regarded as the measure of his authority. Where the master holds his servant out as his general agent by making contracts, purchasing goods on his credit, etc., the master is liable so long as the servant acts within the scope of that authority, and he will be liable within that scope even should the servant act contrary to his orders. 35%- Master Liable for Servant's Acts. The master's liability is not boundless, but justice and common sense fix certain well-defined limits. In general terms the master is liable for all those acts which are brought about through his instrumentality. 1. He is liable for the acts of his servant performed within the scope of his employment, however wrongful they may be, but he is not responsible for the wrongful act if it is not done in the execution of his authority and in the course of his employment. 2. Where a servant is driving a horse, which runs away and does damage, if on the master's business. 3. Where in executing his orders with reasonable care and does damage. 4. Where he does an injudicious act and does damage. 5. When the servant even wantonly does injury if acting within the scope of his employment. 6. For injury done by the servant through drunkenness, if acting within the scope of his employment. 7. If he orders the servant to commit a trespass, or if the trespass results from the action to be done. He would not be liable for a wrong done b}' the servant that was contrary to his orders, or if the master were absent. 8. The master may be criminally liable for a criminal act of his ser- vant which he expressly authorized, or co-operated in its commission, but not otherwise. The master is liable for the act of his domestic wr menial servant whether it be one of omission or commission, neglect, fraud, deceit, or even of misconduct, if it Ije done within the scope of his employment or M'ith the express direction or assent of his master, no matter how much he may abuse his authority. 353. The Master is not Liable in any case for the injurious acts of his servant unless they are wilful or the result of negligence. Where there is no express or implied authority to do the act, or MASTER AND SERVANT. 09 the act of the servant is an act of his own, the master is free from liability. If the master does not give any express or implie 1 authority for the servant to pledge his credit, he is not liable for any contracts made by the servant in his name. The master is not liable for the contracts of his servant where they have an express authority and exceed it ; or where they have an implied authority and act beyond the scope of their employment. The servant acting outside his authority does not bind his master. 'J 'he master is not liable after he has given notice that he has termin- ated his servant's authority to pledge Ins credit. The notice must be brought home to third parties, to whom he has by his acts given an implied authority. !I54. Servant's Liability. A servant may render himself liable : 1. On contracts made on behalf of his master if he does not disclose the fact of his agency. When contracting in his own name he should always use words describing his capacity, as " agent for." or " per," " pro," etc. 2. For damages committed on behalf of his master he is liable as well as his master, and to all third parties he stands as a principal. H. He is also liable for a joint fraud committed with his master ; for no contract of service compels a legal obligation to commit a fraud or do a wrong. 4. In crimes as well as in injuries he is liable, and cannot evade responsibility by saying that he was only a servant and acting under his master's orders. n. For any criminal action of the servant not expressly authorized by the master the servant only is liable. 355. Termination of Service. A contract of service is terminated by lapse of time. By tliC death of the hirer. The servant must be paid wages up to that time. By the death of the servant. His legal representatives will collect his wages for the time during which service was rendered. A domestic or other yearly servant wrongfully quitting his master's service forfeits all claim to wages for that part of the current year during which he has served. If a domestic be wrongfully dismissed his remedy is an action for damages against his master for the breach. Temporary illness is not a sufficient cause for a discharge, unless the contract has been rescinded. A domestic servant wrongfully quitting his master's service forfeits that part of his wages due since the last day of paymeut. 356. Lesral Proceedings. If any disagreement exists between master and servant, proceedings must be taken before a Justice of the Peace within one month after the engagement has ceased. If the Justice receives the evidence of the plaintift" he must also receive that of the defendant. .lii, ill II 'II 100 PARTNERSHIP. When wages are not paid by the master to the servant, the servant may, within one month after the engagement ceased, or within one month after the last instalntent of wages was due, go before a Justice for a hearing of the case, and if furnishing sufficient proof of the cause of his comphiint, secure a discharge and obtain an order for payment of wages to the amount of $40.00 und costs. Either party may appeal from the Magistrate's decision to the Division Court by giving notice of appeal to tlie other party within four days after the decision, and at least eight days before tlie holding of the Division Court; also, within the four days to enter into a bond with the opposite pai-ty with two sureties, approved by the Clerk of the Court, for $100.00 ; as a guarantee to appear and to cover the costs. Where masters and workmen establish a Board for the settlement of their difficulties that may arise, it has by statute all the powers that arbitrator possess, and its decisions are binding. (See Revised Statutes of Ontario, Chap. 140.) CHAPTER XV. PARTNERSHIP. 35T. Partnership is a contract between two or more persons who join together for the purpose of conducting a certain business, with an understanding to participate in certain proportions in the profits or losses accruing. They may join their money, goods, labor and skill, or any or all of them. What mutually constitutes a partnership is a " comnmnity of pro- fits." Firm, Company, House and Co-partnership are all synonymous terms u.sed to represent a partnership business. 358. There are Three Classes of general partners : 1. Donnant, .silent or .sleeping partner; that is one who has an interest in the business but whose name does not appear. It is repre- sented in the firm name by " & Co." 2. Ostensible partner is one who lends his name to the firm for the sake of its reputation, but who has no financial interest in the btisiness. 3. Actual partner is one who has both an interest and whose name appears in the firm name. As regards th^r respective liability to the public, they are all equally liable. 359. Partner's Liability. In a general partnership each member is not only liable to the public for his particular interest in the business, but also for the whole debts of the firm. :i.\ PAUTNEIISHIP. 101 360. Special Partner is one who takes a certain interest only in the business, and who. also only undertakes to share a certain aniount of the gains or losses. The amount of losses which he assumes liability for' must not be less than the amount of capital he invests. This special partnership arrantjement nmst be inserted jn the partnership ajijreement and filed at the ofHce of the County Court Clerk. This special or limited partner must not have anything whatever to do with the management of the business, and takes no part in the work. He may give counsel to the firm, but if he takes any part in its manage- ment he makes him.self a general partner, and thus liable for all the debts of the firm. :I0I. Partnership Agreement A large number of partnerahips are unwisely fornuHl, simply by an oral agreement, and thus a wide oppor- tunity left for future disagreements and much friction. Sometimes two parties will engage in business together without any definite .stipulations other than the division of the profits, thus having only an implied agreement. Properly, every partnership agreement should be reduced to writing, with a great deal of deliberatitm and caution. It may also be sealed, which gives it a still greater sanctity. 36%. The Articles of Co-Partnership should contain : 1. The names in full of each member. 2. The nature of the business to be conducted. 3. The place where it is to be conducted. 4. The amount of capital that each partner invests. .5. If any partner makes no cash investment, but whose experience or skill, etc., is his investment, that should also be inserted. 6. The date of commencement and duration of the contract, if it is for a definite period. 7. If a division of work is agreed between the ^ 'artners, such as for one partner only to sign all orders for goods, accept all drafts, issue the notes, etc., it should be clearly revealed in the agreement. 8. Provision for settlement in case of the death of a partner. Besides these, there are vario-. > other things which could profitably be embodied in the agreement, such as that neither should be a candidate for a municipal office or an active political partisan without the consent of the firm ; also, that neither partner should indorse paper for others, or become bail for any pei-son, without consent of the firm, or to engage in any other business that would require investment and possibly incur loss. Also a provision for winding up the business in case of a dissolution. 363. Registration of Partnership. Every partnership must be registered at the County Registry Office where the business is carried on. The registration must be made within six months after the partner- ship is formed. The penalty for not registering is a fine of $100 — one-half to go to the informer and the other half to the Crown. I i 102 PARTNERSHIP. 364. Form for Registration. Province of Ontario, "j We, James Smith and JamcH Robinson, of > tlie City of Guelph, County of Wellin^on, County of Wellington, j Province of Ontario, hereby certify : 1. That we have carried on and intend to carry on the trade and business of Carriage Building and General Blacksmithing at Guelph in partnership, under the name of the firm of Smith & Robinson. 2. That the said partnership has subsisted since the 15th day of June, 1896. 3. That we are and have been since the said day the only members of the said partnei-ship. Witness our hands at Guelph, ) James Smith. this 2nd day of June, 1896. j James Robinson. 3H5. Formation of Partnership. Partnerships are formed by agreement of the parties, either expressed or implied. The expressed may be either Oral, Written, or Under Seal. The test of partnership is " a community of proiits." In any case where parties are associated m busi- ness, if it is necessary to prove the existence of a partnership, all that is necessary to lo is to prove that there is a common fund for the parties concerned, and that there is also a community of profits. With this feature in mind, it can be unerringly known in all cases whether there is a part- nership in a legal sense or not. Parties may be associated in business arrangements without this " community of profits " to be shared. Parties may also, without any specific agreement, be proved to be partners by implication. For instance : Jones buys apples and ships them to Brown to sell, they divide the profit accruing from the transaction, there is a partnership by implication, subject to all the laws and liabilities of part- nership. 3<»6. Partnership Capital. The capital a partner contributes to the partnership may be in cash real estate, personal property, or secret process of manufacture, a patent right, copyright, labor, skill, or time in management, good- will of an established business, etc., and in each case be subject to the same liabilities, and possess equal privileges. 34SY- Form of Articles of Partnership. Articles of Agreement made the tenth day of September, in the year of our Lord one thousand eight hundred and ninety-six. Between James Carlisle, John Adams and Charles Andrews, all of the Town of Acton, in the County of Halton, Province of Ontario. Whereas the said parties hereto respectively are desirous of entering into a Co-partnership, in the business of the Manufacture and Sale of Furniture, at Acton aforesaid, for the term, and subject to the stipulations hereinafter expressed. Now, therefore, these Presents witness, that each of them the said parties hereto, respectively, for himself, his heirs, executors and administrators, hereby covenants, with the other of them, his executors and administrators, in manner following, that is to say : PAHTNER8UIP. 103 1. That the 8ai«l particH hereto respectively shall henceforth be, ami continue partners together in the .Maid business of the Manufacture and Sale of Furniture, for the full term of Five Years, to be computed from tlie tenth day of Septeinlier, one thouband eight hundred and ninety-six, if the said partners shall so long live, subject to the provisions hereinafter con- tained for determining the said partner8hi[). 2. That the said business Khali bo cau i»d on under the firm name of The Acton Furniture Co. 3. That the said partners shall 'nvest capital as follows: — JameH Carlisle, Eight Hundred Dollai's, cash : John Adams, Fiv(> Hundred Dollars, cash; and Charles Andrews, Five Huidred Dollars and Tools valued ut Two Hundred Dollars. 4. That the said partners shall be entitled to a salary in lieu of services, as follows : James Carlisle, as foreman of factory, Teii Dollars per week; John Adams, as liookkeeper, Twelve Dollars per week; and Charles Andrews, as salesman in the store, Nine Dolhirs per week. 5. That the said partnera shall be entitled to the p.-ofits of the said business in the proportions following, that is to say: According to investment the first year and according to the net credit of each at the beginning of each subsequent year : And that all losses in the said business shall be borne by them in the same proportion (unless the same shall be occasioned by the wilful neglect or default of either of the said partners, in which case the same shall be made good by the partner through whose neglect the same shall arise). 6. That the said partners shall each be at liberty, from time to time during the said Partnership, to draw out of the said business, for pri\ ate use, any sum or sums not exceeding for each, the sum of thi-ee Hundred Dollars per annum, such sums to be duly charged to each of them, respectively, and no greater amount to be di-awn by either of the said partners except by mutual consent; and interest at five per cent, per annum shall be charged to each partner for such withdrawal from the date of withdrawal until it is I'epaid, or until next annual settlement. 7. That all rent, taxes, salaries, wages and other outgoing expenses incurred in respect of the said business, shall be paid and borne out of the profits of the said business. 8. That the said partners shall keep, or cause to be kept, proper and correct books of account of all the partnership moneys received and paid, and all business transacted on partnership account, and of all other matters of which accounts ought to be kept, according to the usual and regular course of tlie said business, which said books shall be open to the inspec- tion of all the partners, or their legal representatives. A general balance or statement of the said accounts, stock in trade and business, and of accounts between the said partners, shall be made and taken on the firat day of March in each year of the said term, and oftener if required. 9. That the said partners shall be true and just to each other in all matters of the stiid co-partnership, and shall at all times, during the con- tinuance thereof, diligently and faithfully employ themselves respectively in the conduct and concerns of the said business, and devote their whole time exclusively thereto, and neither of them shall transact or be engaged in any other business or tratle whatsoever : And the said partners, or either \h II 104 PARTNERSHIP. of them, during the continuance of the said co-partnership, shall not, either in the name of the said partnership or individually in their own names, draw or accept any bill or bills, promissory note or notes, or become bail or surety for any pei-son or persons, or knowingly or wilfully do, commit or permit any act, matter or thing by which, or V»j' means of which, the said partnership money, j or effects shall be seized, attached or taken in execu- tion ; and in case either partner shall fail or make defaidt in the perform- ances of any of the agreements of articles of said partnerahip, in so far as the same is or are to be observed by him, then the other jmrtner shall represent in writing to such pai'tner offending, in what he may be so in default ; and in case the same shall not be rectified l>y a time to be specified for that purpose by the partner so representing, the said partnership shall thereupon at once, or at any other time to be so specified as aforesaid by the partnex's offended against, be dissolved and determined accordingly. 10. That in case either of the said partners shall die before the expira- tion of the term of the said co-partnership, then the surviving partners shall, within the six calendar months after such decease, settle and adjust with the representative or representatives of such deceased partner, all accounts, matters and things relating to the .said co-partnership, and that the said survivors shall continue to carry on thenceforth, for their sole benefit, the co-partnership business. In witness whereof the said pai*ties hereto have hereunto set their hands and seals. Signed, Sealed and Delivered ^ In the presence of |- W. Sweetman. 3 James Carlisle. John Adams. Charles Andrews. 368. The Firm Name. There are no restrictions placed upon the choice of a Firm name for a partnership as in case of a stock company. Any individual who wishes to add " & Co." to his name, or to use any special name other than his own may do so by registering a declaration to that effect, the same as though a number of persons were united. In signing any documents the firm name should always be used without the least variation. In many cases the partners would not be liable if the name of the firm is varied, nor if the person signing is not acting within the scope of his authority. 360- Non-Trading Firms. Firms that are not trading firms, such as a law firm, do not come under the partnership laws , neither can they give a note as a firm. They may all sign it, but it is only as a joint and several note, the same as thongh they were not associated personally. 310. Church Trustees may be held per.sonally liable if they sign their names to any document for church purposes, as there is no Act of Parliament giving them power to act as such, or authority to bind others whom they may chance to represent; but this does not apply to mortgages on property of the church congregation. The same is true of the officers of the various social and benevolent associations. PARTNERSHIP. 105 3TI. Powers and Limitations of Partners. Each general partner, unless prohibited in the articles of co-partnership, becomes a general agent of the firm and has power to act for the firm. He may bind the firm in all matters that come within the limits of the business unc'.ertaken by the firm. For instance : If a firm were engaged in the grocerj' business a partner could bind the firm in such transactions as would properly belong to the grocexy trade ; but he could not for anything pertaining to a coal business, or in real estate, etc. Each partner can act for the firm unless he is prohibited in the partnership agreement. He may receive payment of bills and accounts, compromise with a debtor, or represent the firm in a suit at court, or borrow money necessary to carry on the firms business. He may make a note or accept a draft for the firm in the regular course of business, or do any other act he deems necessary in the interest of the firm. If a bill or note is signed by ono of the firm, the firm can be held liable, providing that two things can be proved, viz. : That it was for the firm purposes, and that the person signing it had proper authority to do so. A promissoiy note or acceptance bearing the firm name signed by a partner, although not given for firm purposes, will be collected if it passes before maturity into the hands of an innocent holder for value. A partner not invested with the right, and binding his co-partners, renders himself liable to them. One partner cannot bind the firm by an instiniment under seal iihleas he has been empowered by an instrum..nt under seal to do so. 318. Acts a Partner Must Not Do. One member of a firm has no right to sign the firm nauie for purposes of sui'etyship or on private account. He must not employ the property of the firm for his own private use. He must not use the credit of the firm for his own personal benefit. He must not give a firm note in payment of a private debt. He must not issue a firm cheque in payment of a private account, unless he makes the chefjue payable to his own or'ier, and then indorses it before delivery. In general, he must not do anything contrary to the partnership agi'eement or anything pi'ejudical to the interests of the firm. 3?3. Liabilities in Case of Insolvency. A partnership firm becoming insolvent, the entire partnership property would be taken first to satisfy the firm debts. If this did not satisfy the claims, then the private property of all or any of the general partners would, subject to priority of the partner's private creditors, be taken to satisfj' the debts. The special or limited partner in such case would only be liable to the amount of interest he has in the business. If he had previously withdrawn part of his capital, and had not eflected a new registration, he would still be liable for the amount withdrawn. 314. Partnei Cannot Sue the Firm, as that would be in reality suing himself, for the firm does not exist without him. If, however, he has a private debt or claim against the firm which the firm will not pay, he may assign it to a third party. 106 PARTNERSHIP. 3T5. Partner Selling His Interest. A partner cannot sell his interest without the consent of his associates. If he should sell without such consent it voids the partnership agreement and a dissolution must take place. The remaining partners may accept the new member, but it makes a new partnership even though no other change may be made in the articles of agreement or registration. 3Y6. Bankruptcy, Incapacity or Death of a Partner. A partner in a firm becomes insolvent in his private business, his interest in the partnership passes to his creditors, who are not partners — hence dissolu- tion follows. A partner dies, his heirs, etc., are not partners — hence dissolution follows. A partner becomes insane, or an invalid, hence cannot fulfil the partnership agreement, and a dissolution follows. 317. Retiring Partner. A retiring partner from a partnership firm, in order to protect himself from the future liabilities of the firm, must, in addition to the advertisements already mentioned, register a declaration of the dissolution at the County Registry Office. This, of coui'se, does not free him from previous liabilities thus incurred while he was a member. Nothing but a release from the individual creditors can free him from the past liabilities. But for all business interpi'ises intended to be permanent and of large dimensions, it would be far better to form a stock company instead of a partnership. (See next chapter.) 318. Dissolution of Partnership. The following are among the things that call for a dissolution of partnership : 1. Insolvency of one of the partners. 2. Insanity of one of the partners. 3. Death of one of the partners. 4. Mutual consent. 5. Marriage of a female partner. The above events do not necessitate a dissolution, but they are a sufficient cause, and if any of the firm should demand a dissolution it must be complied with. They are also dissolved by expiration of time, by the completion of the work for which they were formed, or by a decree of the Court. In the case of a dissolution notice must be given to the public in the following manner : For persons whose business has been conducted in Ontario, notice must be given in the Ontario Gazette. For -persons whose business extends to the other provinces, notice must be given in the Canada Gazette. It is also customaiy to give notice in the local press and to send circulars to each individual firm with whom business has been done. 3T9. Dissolution by Decree of Court. Sometimes partners fail to agree and by continual quarrelling or pulling in opposite directions the business of the partnership suffers. If they cannot agree on a dissolution JOINT STOCK COMPANIES. 10? they may apply to a competent court and obtain an order for dissolution. The following would be grounds upon whicJi such an order may be obtained : 1 . Fraudulent conduct by a partner. 2. Violation of the articles of partnership. 3. Unreasonable exclusion of partner from sharing in the manage- ment of the business. 4. Quarrelling to an extent to render it impossible to properly and successfully carry on the business of the firm. 5. Inability of the partner to act, on account of permanent illness, or being otherwise disabled. 6. Intemperance or immorality of a partner that would have the effect of injurmg the business or impairing the credit of the firm. 380. Registration of Dissolution. A notice of dissolution of a partnership is also required to be recorded in the County Registry Office. The following form will answer : Province of Ontario : ) I, James Robinson, formerly a member of the County of Lincoln. / firm carrying on the business of Carriage Build- ing and General Blacksmithing at Guelph, County of Wellington, under the name and firm of Smith & Robinson, do hereby certify that the said partnership was, on the 2nd day of September, dissolved. Witness my hand at Guelph, this the third day of September, 1896. James Rob'*"on. 381. Business after Dissolution. After dissolution no partner has a right to sign the firm's name without a power of attorney. If a note has to be given the only alternative is for each partner to sign his name separately. A partner, after dissolution, has power to demand that the assets be used exclusively to pay off the firm's liabilities before anything can be appropriated by the partners. ill HI lit CHAPTER XVI. JOINT STOCK COMPANIES. 38?{. A joint stock company is an association of individuals possessing corporate powex's, enabling them to transact business as a single individual. The incorporation of a joint stock company may be effected either under Dominion or Provincial Legislation. Under the Dominion Legislation it may be either by Special Act of Parliament or by Letters Patent under the Joint Stock Companies' Act. Banking, railway, telegraph and insurance companies must be incor- porated by Special Act, as the powers they seek are so extensive that special legislation is necessary to determine their limit. 108 JOINT STOCK COMPANIES. 1 ! II Under the Ontario Legislature incorporation is secured under the Joint Stock Companies' Letters Patent Act, found on page 1,443 of the Revised Statutes of Ontario for 1887, or by Special Act. :I83. Advantages of Incorporation are many, the following of which are chief : 1. The business can be conducted on a much more extensive scale, as many more people can be interested in it than would be possible in an ordinary partnei'ship. 2. The liability of shareholders is limited to the amount of stock they hold, an advantage of great consideration when compared with the dangers of partnership. 3. Property in the business is more easily transferred than in partnership. Paid up stock may be sold at any time. On the death of any of the stockholders, their shares pass to their heirs and the business is unchanged. 4. Employees can be interested in the business, and thus rendered permanent and their services more valuable. 1(84. Corporate Bodies include many that are not trading firms, such as townships, counties, incorporated villages and towns, cities and provinces. Also ecclesiastical, educational and charitable institutions may be incorporated. All such can buy and sell property, enforce their by- laws, sue and be sued for debt. 385. How to Form a Company. The first thing to be done is to open a Stock Book in which the subscribers enter their names for the number of shares they wish to take. When one-half the stock has been taken and ten per cent, thereof paid in, then the application may be made for Letters Patent. If under Provincial Legislation, application should be made " To the Honorable Provincial Secretary," Toronto. If it is under Dominion Legislation, application should be made " To the Honorable Secretary of State," Ottawa. If the business of the company would be confined to Ontario the charter would be obtained from the Ontario Government, but it it would extend to the other provinces as, for instance, a steamship line between Toronto and Monti-eal, then the charter would be taken from the Dominion Government. 386. The Petition. About the first step taken either by the solicitor or any person doing the official correspondence is to communicate with the Provincial Secretary or the Secretary of State, as the case may be, concerning the formation of the company, who will forward a copy of the Act, together with the necessary instructions, and also a blank petition for the signatures of the applicants. Then this petition is filled out according to the instructions and forwarded to the Provincial Secretary or Secretary of State, as the case may be, accompanied by the Government fee, affidavits, etc. Upon receipt of this, notice will be immediately given in the official Gazette of the letters patent, when the parties named therein and their JOINT STOCK COMPANIES. 109 successors become a body corporate and politic by the name mentioned in the same. 381. Advertising in the Official Gazette. Before the application can be made for incorporation the applicants must publish in the Ontario Gazette or the Canada Gazette, as the case may be, for four consecutive numbers, their intention to apply for the same, giving the proposed name of the company, its purposes, amount of capital, number of shares, place of business, name, address and calling of the applicants, and the names of the Provisional Directors. Permi-ssion may be obtained to dispense with the advertisement if the capital of the company does not exceed S3,000. 388. The Name of the company must not be the same, or even similar, to that of any other company, whether incorporated or not. Under Ontario legislation the name of the province or some locality therein must constitute part of the name of the company being incorpor- ated, except in cases where the Lieutenant-Govemer-in-Council otherwise permits or directs. 389. The Government Fee may vary at different times and according to the nature of the company, the amount of capital, etc. The present tees for Ontario are : When the capital is less than $40,000, $30 ; !|40,000 and under 8100,000, S50 ; *100,000 and under $200,000, $100; $200,000 and under $500,000, $150 ; $500,000 and upwards, $200. The lowest fee is $10, for a company the capital of which is not over $3,000. 390. Board of Directors- The directors, consisting of not less than three nor more than fifteen, are appointed by vote of the stockholders each year, and the directors have the whole management of the business during their term. 391- Books to be Kept. The law requires cei'tain books to be kept, giving the names of the stockholders and the shares owned by each, the amounts paid in on stock, the names and addresses of the directors. These books are always to be open for inspection by creditors or the public in general. 39!8- Unpaid Stock. Stock that has been subscribed for but not paid up stands as a resource, and is a security to the public, and if the company became insolvent each stockholder would have to pay up the balance of his unpaid shares. 393. Limited Liability- In stock companies a shareholder is only liable to creditors to the amount of stock he has subscribed for. If that has been paid he is not liable to creditors for anything in case of bankruptcy of the company. This is one great advantage of a stock company over a partnership. 394. Double Liability applies only to chartered banks. A stock- holder in a chartered bank is liable to creditoi-s for double the amount of stock he subscribed for. If it has all been paid up, and the bank fails, he is liable to be called i f ti! !i- li: 110 JOINT STOCK COMPANIES. upon for just that miich more. If tlie stock has not all been paid up, he will have to pay the balance, and then another sum of same amount as the stock he owned. 395. Transfer of Stock. Shares in a stock company are personal property. They may be sold or transferred if they have been paid up. If they are not paid up they can only be sold by the consent of the ,• ', "iased to be such director. 400. Liability of Directors for lUeg^al Dividends lue directors are prohibited from paying dividends when the company is actually insolvent, or to pay dividends out of the capital. If any director present when such dividend is declared, does forth- with, or any director then absent within twenty-four hours after he becomes aware thereof nnd is able to do so, enters on the minutes of the Board of Directoi-s his protest against the same, and within eight days thereafter causes such protest to be published in at least one newspaper as near as possible to the office or chief place of business of the company, he may thereby, but not otherwise, exonerate himself from liability. 401. Annual Statements. The Government each year furnishes the company with blank forms to be filled in by the officers of the company, giving detailed information concerning company aflTairs, stockholders, transfers, etc.; one copy of which must be forwarded to the LANDLORD AND TENANT. Ill Government and the other to be posted up in tlie head office of the company before the first day of February. If this is not done by the above date the company incurs a penalty of .f 20 for every day durin^r which the default continued. And every director, manager, or secretary of the company who knowingly or willfully permits such default incurs the like penalty. 40^. Forfeiture of Charter. If the company does not go into actual operation within three years after its incorporation the charter shall be forfeited. Also, the charter shall be forfeited by non-user during three consecutive yeara at any one time. 40!l. Liquidation. A joint stock company may be forced into liquidation by its creditors when a demand for a debt amounting to ^200 has remained unpaid for sixty days. I CHAPTER XVII. LANDLORD AND TENANT. 404. The relation subsisting between landlord and tenant is that which subsists between the owner of houses and lands and the person to whom he grants the use of them for a specified time for a stipulated consideration, called rent. In the law books the landlord is called the lessor and the tenant the lessee. The same class of persons who can contract in regard to notes and bills can contract as i-egards landlord and tenant ; that is, those of the full age of twenty-one years and of sound mind 403. Lease is the name given to the contract between landlord and tenant. It may be either oral or written, or under seal. Oral, verbal and parole all mean the same thing, viz., by word of mouth. In this chapter, oral will be the term used. In Ontario an ■ oral lease for one year and under is valid, and the lessor may bring action and recover the rent though the lessee has not entered. Oral leases for a term not exceeding three years from the making thereof when completed by entry and payment of rent need not be in writing. t'^But an oral agreement or a writing not under seal to lease premises for three years from a future time, thus making the tenancy last for more than three from date of making, is void. If written it must be under seal to Ke valid. An oral or a written lease not under seal for an original term of less than three years may give the lessee the right on notice to continue the holding beyond the three years from the making of the lease. But an oral agreement for a lease of three years where the tenant has ! I 112 LANDLORD AND TENANT. not entered upon the premises will not support an action to compel the tenant to enter or to pay rent, nor the landlord to give possession. A lease for a term exceeding three years and up to seven, must be in writing and under seal. Ninety-nine years is longest term of lease. A lease for over sevtsn years must be in writing, under seal and recorded. If not registered a person buying the property without notice of this lease could, by giving six months legal notice, eject the tenant. A tenancy " from year to year, so long as both shall please," may be terminated at end of first year by giving six months' notice. But where it reads " one year certain and so on from year tc year," it will be for two yeare at least and cannot be terminated at end of first year, except by mutual consent. The lease should state all the conditions and agreements, for oral promises do not avail much in law where there I.^ a written instrument. The tenant mi^ht sue the landlord on a separate and distinct verbal agreement, that the house should have certain things done by the landlord in consideration of the tenancy being created by the written lease, but it should be in the lease to make it un(|uestionable. If a lease is given prior to a mortgage the mortgagee takes subject to the lessee, and vice versa if the mortgage is given prior to the lease. There must be something of a transfer of possession to create a lease. A person working a farm on shares and having the exclusive possession becomes a tenant; but if he were to work it on shares, perhaps each furnishing part of the seed and dividing the profits, both parties being equally in possession, there is no lease, and the owner, in case the laborer had agreed to pay a certain amount in money, could not distrain for it. 406. Lease by Minors, Idiots, Lunatics, etc. A lease by a minor is not void but voidable. He cannot void it until he comes of age, neither can the lessee. Leases to minors are not absolutely void, but may be voided when they come of age. If the rent falls due after they attain their majority and they have not repudiated the lea.se they will be liable for the rent. During their minority they are liable for necessary lodgings, according to their station in life. Idiots and lunatics may also make leases that are necessary, but cannot be made to take a house that is unneces.sary i-f the landlord was aware of their condition and took advantage of it. In Manitoba a habitual drunkard cannot make a valid lease. In Ontario and the other provinces if he were so drunk as not to be capable of knowing that he was making a lease, he may void it when he becomes sober, or he may ratify it and make it binding. 407. Tenant's Privileges. The execution of the lease vests the tenant with all the rights incident to possession. He has the exclusive use of the property, and exercises all the rights of the owner for the time being, and may even eject the landlord should he trespass. If a lease of a farm contained no reservation of a crop of wheat growing at the time of executing the lease, the tenant would be entitled to it. He has a right to a legal notice to quit from the landlord if his lease is for an uncertain time. LANDLORD AND TENANT. 113 ^ il i> Also to the crops tliat are on the ground if his tenanny i . terminated. Also to sublet the premises or a portion of them to otiiers unless his contract prohibits it. The tenant, in case of fire, is free from rent until the premises are again made tit for the purposes of the lessee ; and no proceedings can be commenced for the recovery of any such rent until the premises are rebuilt or made fit for the purposes of the lessee. 408. Tenant's Obligations and Liabilities. He is liable for pay- ment of the rent agreed upon ; also for any voluntary or permissive injury to the property, and for the perfoi*mance of provisions and agree- ments in his contract. A tenant on a farm must, unless otherwise agreed upon, repair fences, and is liable to adjoining land-owners for any damage occasioned by non-repair. In the Short Forms of Lease now in general use throughout the country the term, " and to repair," has a very broad meaning ; so much so, in fact, that unless modified a tenant may be compelled to rebuild in case of fire. Also the clause, " to leave the premises in good repair," must be modified in the same manner. This is best done in the following, or similar language; "Ordinary wear and tear, and accidents by fire and tempest excepted." A tenant must, however, even in this case, leave the premises in as good repair as he found them, "ordinary wear and tear," of course, " excepted." Tenants cannot sub-let the premises if the landlord objects. If he does the landlord may eject ; it also renders his lease voidable. 409. Taxes- In all ordinary written or oral leases the landlord must pay the taxes, unless some express provision is made to the contrary. The fact of a landlord agreeing to pay the taxes does not relieve the goods on the premises, though they belong to the tenant. If the tenant's goods should be seized for such taxes, he must pay them and deduct the amount from subsequent rent. The tenants exemptions cannot be seized for the landlord's taxes. 410. The Landlord's Covenant- The only covenant the landlord makes is to give the tenant quiet enjoyment. If evicted by another person, who has a prior or better claim to the property, the tenant may recover from the landlord any damages that he may sustain. The tenant must look after the sanitary conditions of the house before he enters, for he cannot avoid paying rent even though the house would be unsafe to occupy, unless he had a special guarantee from the landlord that the sanitary conditions were good. 411- Rent-— When Payable- Rent may be payable in any way agreed upon, either in advance or at the end of the term. It might be a monthly tenancy, and yet the rent payable weekly ; or a yearly tenancy, with the rent payable monthly or quarterly. Whatever the agreement may be for payment, the tenant has the whole day on which the rent falls due in which to pay it, and no expense can be incurred until the day after the rent is due. I ' ! jl 114 LANDLORD AND TENANT. § 41%. Landlord and other Creditors' Rights. Where there are other creditors, the landlord can only recover, prior to them, for one year's rent. After that he must take his share rateanly with the rest. As far as distress is concerned, where there are no other creditors, he may distrain for six years' rent. After that he has a further remedy by way of action (or suit), and this action may be brought any time within twenty years on a lease under seal. Rent cannot be sued or distrained for until it is due, even though the tenant may be leaving the premises. If the tenant were leaving the country, with the intent to defraud, the gootls could be attached. If a tenant removes goods fraudulently and clandestinely the land- lord may follow for thirty days and distrain ; otherwise he jnust distrain on the premises. The assignirient of a lessee cancels the tease. In case of the assign- ment of the lessee the landlord has preferential claim for one year last previous to, and three months following the execution of such assignment, and thereafter so long as the assignee shall retain possession of the premises. 4i:i. Distraining For Rent. If a tenant does not pay hir^ rent the landlord may distrain. In this case any person may act as bailiff. The landlord may distrain for rent the day after it is due, whether it is payable in advance or at the end of the month, «juarter, or year, as the case may be. It must be done after sunrise and before sunset. The person seizing cannot break open outside doors, nor open windows to enter. He may raise the latch or turn the key of the door to open it, but he could not put his arm through a hole to unlock the door or to draw a bolt. He could not raise a window, but if he found a window partially r.aiscd he could raise it far enough to admit his body. After he once legally gains admission to the building he may then break open any inside doovs, Imt those of sub-tenants, that are not opened for him. Distress may be made any time within six months after tho expira- tion of the lease if the landlord still "holds possession of the premises. If he has sold the property he cannot distrain ; neither can the new owner ; but it may be recovered by suit. Distress nmy be for six years' rent if no other creditors are interested. A tenant's goods cannot be seized if they are removed from the premises unless the bailiff saw them being taken away, or unless they have been removed fraudulently and clandestinely to prevent seizure for rent. That is, taken away in the night or in any other secret way. Every person who serves a distress shall give a copy of all costs and charges of the distress to the peraon on whose goods and chattels the distress is levied. Furniture, sewing machines, musical instruments, etc., purchased on a lien agreement or not, are liable to .seizure for rent if there is not enough other goods to satisfy the claim, but the landlord must pay balance of the lien. If the landlord distrains, or any other creditor seizes under an execution, the tenant or debtor has the legal right to select and point out LANDLORD AND TENANT. 115 the goods and chattels an to whicli he claims exemptions. For instance, there are six chairs named au^ong the exemptions; hence the debtor, instead of taking six common chn'r, may select the best in the house, and the same all through the list. When a landlord has issued a distress he loses his right by aban- doning it or withdrawing il, and cannot make a second seizure of the same goods for the same debt. 414. Resistance, A tenant may resist the entrance of a bailiff or other person who may come with a landlord's warrant. Any time before the bailiff makes a list of the goods the tenant may retake them from him. After the bailiff makes a list of the goods seized and delivers it to the tenant, then the goods are said to be impounded, and resistance must cease. If after a bailiff has legally gained admissioii and is ejected, he may return and demand admission, and then break in if necessary. 415. Penalty for Illegal Seizures. If a landlord distrains for more than the amount due, the tenant can enter an action and recover treble the amount of over-seizure ; and in ca«e of distraining before rent is due the tenant may recover double the amount of goods distrained. If the landlord were to enter the house after sunset and prevent the removal of the goods, this will be illegal, and the tenant may recover the full value of the goods distrained. The landlord must wait until the next day, and then follow the goods if they have been removed. A distress on Sunday is also illegal. The landlord is not liable for any illegal acts committed by the bailifl' unless the acts were authorized or subsequently ratified by him. Therefore, if the bailiff is authorized to seize the tenant's goods and he sc'izes those of a stranger, or to seize on the premises and he seizes ofi' the 'premises, or if he breaks into the premises, the bailiff only is liable. Also, if he were to seize and sell the exemptions illegally, the bailiff would be liable. 41<». Exemptions from Seizure. The li.st of exemptions from landlord's warrant or under any execution is given in section 93, which see. The goods belonging to third parties, not relatives, as visitors, boarders, or lodgers, ai'e also exempt; also goods that may be on the premises for repair, or for any other purpose, if they are not in use by the tenant. But goods claimed by the husband, wife, son, daughter, daughter- in-law, son-in-law of the tenant are not exempt, nor those of other relatives if they live on the premises with the tenant. Implements of trade, if they ai"e not in actual use, may be distrained upon if there is not sufficient other goods to satisfy the debt. Buildinffs and fixtures which the tenant has no right to remove, cannot be distrained upon, although there may be no other goods on the premises. The floor of a skating rink could not be distrained. 411. Monthly Tenancy and Exemptions- On a monthly tenancy the exemptions only hold against two months arrears of rent. If the 116 LANDLORD AND TENANT. monthly tenant owes for a longer pfriod than two months, the hinillorcl can distrain and sell to recover what in (hie over the two montiis. 418. Giving up Possession- The tenant who ciaimH the benefit of the exemptions in cane of a landlord ilistraining for rent, must yive up po8.sesHion of the premises forthwith, or he ready and oft'er to do so. The offer must be made to the landlord or his agent, anil the person making the seizure is considered his agent for this purpose. The surrender of the po-ssession in pursuance of the landlord's notice is a termination of the tenancy, and the tenant has the option of paying the rent and costs and moving out, or to take his exemptions and move out without paying the rent. See section 93 for list of exemptions, and also section 417 for a monthly tenancy as to exemptions. 419. Seizing the Exempted Goods. If the tenant neither pays the rent nor gives up possession after being legally notified to vacate, the landlord may give him another written notice similar to the following, after which he can seize and sell the exempted goods to recover the amount of rent due and the costs. The notice must be something like the following : Take notice, that I claim S for rent due to me in respect of the premises which you hold as my tenant, namely : (here briefly de.scribe them, giving the number and street, or lot, conces-sion, etc.); and unless the said rent is paid I demand from you immediate possession of the said premises ; and I am ready to leave in your possession such of your goods and chattels as in that case only you are entitled to claim exemption for. Take notice, further, that if you neither pay the said rent nor give me up possession of the said premises after the service of this notice, I am by law entitled to seize and sell, and I intend to seize and sell all your goods and chattels, or such part thereof as may V)e necessary for the payment of the said rent and costs. This notice is given under the Act of the Legislature of Ontario respecting the Law of Landlord and Tenant. Dated this day of AD, 18 To C. D. (Tenant). A. B. (Landlord). After giving the above notice, if the tenant still remains in possession, the landlord can .seize and sell the last article on the premises to recover the amount due and costs. If the tenant does not wish to lose his exemptions he must take them and move out innnediately. 480. Goods Seized for Other Debts. If a tenant's goods have been seized for other debts the landlord cannot seize them again, nor sell them, but he may hold them until his claim is paid. 431. Notice to Quit. In case of a yearly tenancy, six clear months' notice must be given to quit. The.se must be calendar months, as in all other cases where months are used in contracts. In case of a (juarterly tenancy three months' notice must be given ; and if the tenancy is monthly, then one clear month's notice must be given. If by the w^eek, then a weo'.'s notice. There is no half-yearly lease. If a LANDLORD AXD TENANT. 117 poi-son I'entfd pieiniHes for six months, it would simply ho six consecutive months, and if he hold over that time one month's notice wassed and the tenant still remains in possession, he then hecomes a "Tenant at Will," and then, after that, when he wishes to vacate, or the landlord desires him to vacate, this notice must he jjivi^n. A notice to (luit, ^ivt-n either l)y the landlord or tenant, should he in wrltivg. An oral notice is sufiicient, but it is hotter to give the notice in writinjj, as it is more easily proved. An ordinary letter contuininjj the facts, handed to the other party, or sent by mail, will answer as well as a formal notice. Notice to (|uit may be given by the agent as well as the principal; but an agent cannot appoint an agent to give notice. 4'Vi. Form of Notice by Landlord. Please take notice that you aro hereby requin.'d to surrender and deliver up possession of the house and lot known as No. 4 James street, in the village of Merritton, which you now hold of me ; and to remove therefi'om on the first day of June next, pursuant to the provisions of the statute relating to the rights and duties of landlord ami tenant. Date. Notice Claiming Double Rent- To W. WiNTEUS, St. Catharines, Ont. I hereby give you notice that if you do not deliver up possession of the house and premises situate No. 10 Queen sti'eet, in the city of St. Catharines, on the first day of June next, according to my notice to quit, dated tlie 25th day of April, I shall claim from you double the yearly value of the premises for so long as you keep possession of them after the expiration of the said notice, according to the statute in that case provided. Dated the 20th day of May, 1896. Witness: James Smith, J. Saundeks. Landlord. 4*i7- Raising the Rent. Simply giving notice to a tenant that at such a time the rent will be increased is not sufficient. The notice must be to vacate ; that is, order the tenant out. Then after that the notice may be given for an advance in rent. 438. Fixtures must be something of a personal character. Any- thing that is affixed to the freehold so that it cannot be separated without doing serious damage to the freehold becomes a part of it. Anything that is sunk into the ground, as a well, trees, buildings of stone or brick are the same as the soil itself, and therefore, a part of the freehold. But buildings placed on stone boulders, or posts, or plate, are fixtures, and may be removed without injury to the soil. The machinery of a manufactory is also a fixture, and can be removed. Where there is doubt as to whether a certain fixture should be regarded as a fixture or be held as part of the freehold, the presump- tion is always in favor of the freehold. It is an axiom in law " that the expression of one thing is an omission of all the rest," and for this reason if anything is mentioned as a fixtui'c, other things, though of a kindred nature, would be supposed to be on)itted, and therefore remain a pnrt of the freehold. A tenant claiming anything as a fixture must remove the article promptly and make it known tliat he claims it, otherwise he waives his right to it. As between the heir and the pei-sonal rejiresentative, the heir occupies the same position as the landlord and his right is, of course, prior. A creditor can seize and sell imi lediately anything that has not become freehold, but any fixtures that have become freehold are governed by the same laws as real estate, and thei-efore cannot be sold until the execution has been in the hands of the sheritt" at lest one year. 458J>. Repairs necessitated by natural decay the landlord is suj/posed to make, also to keep in repair the roof, outside doors and locks : but all breakages are to be made good by the tenant. 430. Boarders and Lodgers. Lodgers are temporary lessees, and are subject to the same laws and have similar privileges in respect to the rooms they occupy as a regular tenant. Their goods are not liable to seizure for their landlord's rent. LANDLORD AND TENANT. 119 i I 5sioii of of St. to (|uit, yearly "ter tlia iit case be In case a boarder's or lodger's goods are distrained for rent due by his landlord, he must serve the superior landlord or bailiff, or other person levying the distress, with a written declai'ation that the tenant has no right of property or beneficial interest in the goods or chattels distrained, or threatened to be ilistrained, and that they are the property or in the lawful possession of such boarder or lodger; and if he should owe the tenant for board or otherwise, he may state this amount and pay it over to the superior landlord or tlie bailiff" or enough of it to discharge the landlord's claim if the boarder should owe more than that. With this declaration must be given an inventory of the articles referred to. If the superior landlord or bailiff, after receiving this declaration and inventory, and after the boarder or lodger has paid over to him that nmch money, or offered so to do, still proceeds with the distress, he is guilty of an illegal distress, and the boarder may replevy such goods ; and the superior landlord shall also be liable to an action. Any such payment made by a boarder to the superior landlord is a valid payment on account due from him to the tenant. 431- Short House Lease. ^bi0 3^^^^lltUrC, made the fourth day of April, in the year of our Lord one thousjind eight hundred and ninety-six, in pursuance of the Act respecting Short F'orms of Leases, between James Smith, of the town of Thorold, in the County of Welland, gentleman, hereafter called the lessor, of the first part, and Walter Winters, of the same place, merchant, herein- after called the lessee, of the second part ; WITNESSETH, that in consideration of the yearly rents, covenants and , conditions hereinafter respectively reserved and contained by the snid lessee, his executors, administrators, and assigns, to be respectively paid, observed and ^ n-formed, the said lessor has demised and leased, and hy these presents doth demise and lease unto the said lessee all the store and premises on Front Street, in the Town of Thorold, in the County of Welland, known as !No. 1. in the Battle Block, including basement or cellar, and lately occupied by James Walsh & Co. as a boot and shoe store. Together with all the rights, members and appurtenances whatsoever to the said premises belonging and appertaining; to have and to hold the said hereby demised premises with their appurtenances, unto the said lessee, his executors, administrators and assigns for the term of three years, to be computed from the fourth day of April, one thousand eight hundred and ninety-six. Yielding and paying therefoi*, unto the said lessor, his heirs or assigns, the clear yearly rent or sum of three hundred dollars of lawful money of Canada, in even portions of ([uarterl}' instalments, on the fourth days of July, October, January and April, in each and every year during the continuance of the said term, without any deduction, defalcation or abatement whatsoever ; the first payment to be made on the fourth day of July next. And the said lessee for himself, his heirs, executors, administrators, and assigns, hereVty covenant with the said lessor, his heirs and assigns, to pay rent, and to pay taxes, and to repair ; and that the said lessor may t m 'i i 'l: •1 il m ( il 120 LANDLORD AND TENANT. enter and view state of repair; and that the said lessee will repair according to notice; and will not assign or sub-let without leave; and will not carry on any business that shall be deemed a nuisance on the said premises ; and that he will leave the premises in good repair. And also, that if the term hereby granted shall be at any time seized or taken in execution, or in attachment, by any creditor of the said lessee, or if the said lessee shall make any assignment for the benefit of creditors, or becoming bankrupt or insolvent shall take the benefit of any Act that may be in force for bankrupt or in.solvent debtoi-s, the then current quarter's rent shall immediately become due and payable, and the said term shall immediately become forfeited and void. And it is hereby declared and agreed that in case the premises hereby demised or any part there :)f shall at any time during the term hereby granted be burned down, or damaged by fire, so as to render the same unfit for the purposes of the said lessee, then, and so often as the same shall happen, the rent thereby reserved, or a proportionate part thereof, according to the nature and extent of the injury sustained, and all remedies for recovering the same shall be suspended and abated until the said premises shall have been rebuilt or made fit for tlie purposes of the said lessee. Proviso for re-entry by the said lessor on non-payment of rent, whether lawfully demanded or not ' or on non-performance of covenants ; or seizure or forfeiture of the said term for any of the causes aforesaid. The said lessor covenants with the said lessee for quiet enjoyment. In witness whereof, the said parties have hereunto set their hands and seals. James Smith. [L. S.] Waltp:r Winters. [L. S.] Signed, Sealed and Delivered"! in the presence of Charles Summers, j 43*4. Farm Lease- In a Farm lease other clauses are usually inserted, siniiliir to the following, defining particulai-ly how the land is to be tilled, crojis to be raised, disposition of straw, etc. : And that the .said leH,see will, during the said term, cultivate, till, manure and employ such part of .said deniiscid premises as is now, or shall hereafter l^e brought under cultivation, in a gooil husband-like and jiroper manner, so as not to impoverish or injure tlni soil, and plough said land in each year during said term (seven) inches deep and at the end of said term will leave the land so manunMl as aforesaid. And will crop the same during the sai. If* 124 HAILWAYS, A railroad is not responsible for the life of any person walking on the track. A railroad company must give a check for all personal baggage up to one hundred pounds weight for one person or two hundred pounds for man and his wife, provided there is a loop or handle on which to fasten it, under a penalty of eight dollars, and refunding the passenger's fare each time they refuse. Railroad companies are liable for damages in case of any unreasonable delay. Not for any imaginary damages, but for what loss can be shown to have been suffered. They must at every station write, or cause to be written, in a con- spicuous place, the time when, to the best of their knowledge, any ovci'due train will be likely to arrive. This does not, however, relieve them of their liability for damage, in case any is sustained through the delay. A man buying his ticket after the train is due cannot, of course, sue the company for damages, as he is aware of the train being late just as nmch as the company was. Railroad companies are also obliged to provide I'ooms for their passen- gers to wait in, and also to keep these rooms free from tobacco smoke and other kindred nuisances. Trains must not be run at a gi-eater speed than six miles an hour through a city or any thickly-populated community. If anything of value, as a gold watch, is in th(; baggage, the company must be informed, so that due care and caution may bo taken vith it. The company would not be responsible if they were not informed of it being included with their ordinary baggage. A man paying his fare on the train must present a reasonable amount that the conductor c^uld be expected to change. Every conductor is obliged to have a badge on his cap, or a passenger is not obliged to give his ticket to him. A passenger who refuses to pay his fare, or who for any other cause for which he may be put off the train, can be put ofl' at anj' station or ordinary stopping place, or near any dwelling-honsc. The company is liable in damages for any injury sustained by a pei-son getting oft' a train while in motion, under the countenance of the conductor. If a person jumps off a moving train without the knowledge of the conductor, or contrary to his will, the company is not liable for any damages. But if a person jumps off a train when a collision is liable, and gets hurt, the company is responsible, even though he could not have been injured had he remained in his seat. A person who has a ticket and cannot find it, is being put off, and offers to pay his fare, and is still ejected, may collect damages. A ticket bought at a station for a certain place is a contract that the train next leaving that station stops at that place. This is the reason why a ticket agent will not sell a passenger a ticket if the train does not stop at that station, at which the ticket is wanted, as the company would be liable for damages unless that train stopped there. A return ticket purcha.sed at regular rates is good for a continuous INSURANCE. 125 the trip each way, until used, no matter how long after date, if you are able to /iglit the company. A return ticket which cannot be used for the retui'n within the time, may be returned to the head^ office, and the dift'erence between its price and the single fare will be refunded. 445. Telegraph Companies agree not to divulge the contents of any message to any except to tlie person to whom it is addressed. The company does not hold itself responsible for accuracy in trans- mitting the message unless the sender pays for repeating back the messiige. The company would then he responsible. 446. Promptness. The company is responsible for any loss sus- tained by an unnecessary delay. Never put " in haste " on a telegraph message, for it would only be laughed at by the operators. Never pay anything extra for having a message quickly transmitted, for it does nor hasten it any. CHAPTER XX. INSURANCE. 447* There are four general classes of insurance : Fire, Life, Marine and Accident, that will be treated in this work. 448* Fire Insurance. The Principle of fire insurance is indemnity. In this case there is the greatest necessity for good faith, and there- fore the insured should be very careful to disclose all facts material to the risk. 44J>. Cases that Destroy or void the insurance policy. 1. If the building being insured is vacant at the time, and the owner does not disclose the fact, the policy is void from its inception. If it should become vacant afterwards, and the company is not noti- fied, the policy would be vitiated. 2. If there were an incumbrance on the property, and the owner said there was not, the policy would be void. If any were placed on afterwards, the company must be informed. :}. If the building were closer to other buildings than was stated in the application, or if considerable quantities of coal oil, gunpowder or other iriHammable material were on the premises, and these facts not dis- closed in the application, it would destroy the policy. 4. Chanoes on Building. Where any considerable change is made in the building, that requires the presence of mechanics, the company must be notified before beginning, otherwise, in case of fire, the company would be free. A mechanic's risk may be secured for a small extra fee. 5. Change of Ownership. In case of a change of ownership, the name of the new pi'oprietor must be given and accepted, and the old one 1 ''W: 126 INSURANCE. released. If the company prefers not to take the risk under the new owner, it may cancel the risk by repaying the unearned portion of the premium that had been paid. If the old owner does not want the policy transferred, he may have the unearned jtremium returned to him. In this case it would not be a proportionate sum to the whole premium, but the company will charge the regular rate for the shorter term and refund the balance. 6. Two OR More Policies. If property is insured in more than one company without the consent of all the companies, no insurance whatever would be paid by any of them in case of fire. 450. Change of Goods- If goods are changed from one building to another the consent of the company must be obtained. Then the insur- ance remains in force in the new building. 451. The Insurance Agent is regarded as the agent of the insured, and not that of the company, hence the insured must be very careful what answers are given to the various questions in the application. The company will stand rigidly on the printed conditions on the application you have the agent fill out, and may be expected to evade pay- ment of a loss if there is a reasonable chance. Therefore, the insured must see that all the facts material to the risk are honestly and truly set forth in the application. 458. Floating Policies. When "floating" policies are taken out, the amount of insurance paid is the loss at the time of the fire, limited, of course, by the amount of insurance. This policy holds good so long as the (juantity is kept up, no matter whether it is the identical goods insured or not. 453. Notice of Fire. In cast, of tire occuring, according to the rules of most companies notice must be given immediately, but the exact mean- ing of that term has not yet been decided. Whei-e nothing is said by the company, the statutory condition is one year, but whatever the company's printed conditions are will hold if reasonable. In any case the company should be notified immediately. 454. Adjustment of Losses. Usuallj' the amount of rcual loss is paid in full to the amount insured. Some companies use what is called an " average clause," by which the company only pays two-thirds of the loss. Insurers should be careful that they do not take a policy of that form unless the rate of premiinn is also one-third lower than other companies. As soon as the company is notified of the loss it will send an agent or adjuster to inspect the premises and estimate the loss. The onus of proof of what was in the building at the time of the fire rests with the insured. The value of the articles, itemized, has to be verified by affidavit, and a false statement would endanger the claim against the company. The company may cither rebuild or repair the articles injured, or pay the loss in money. 455. Marine Insurance. A marine policy is taken out by the owner or charterer of a vessel when it is ready to start on a voyage. INSURANCE. 127 new the but und Sometimes the insurance is for a certain number of voyages, some- times for a month, six months, or for a year. The cargo is necessarily insured just for the voyage. In marine insurance there must be a guarantee that the ship is seaworthy ; that is, that she is properly equipped and manned, and also capable of resisting an ordinary storm on the route on which sha runs. A partial crew, or the want of an anchor, would render a vessel unseaworthy. The burden of proof of seaworthiness lies with the party seeking to insure. The cargo of a vessel, or her earnings, sometimes called " freight," can also be insured. In cose of a ship being in distress, and a part or the whole of her cargo having to be thrown overboard, where there is no insurance, the loss is divided between the vessel, the cargo and the freight, each bearing its proportionate amount. Marine insurance indemnifies for all the various losses which may result from the perilous sea voyages, as well as of fire. These include storms, theft, and even piracy and capture in time of war ; also where a portion of the cargo may be thrown overboard in time of danger so as to save the remainder. 45^. Amount of Loss Paid. All marine policies have the average clause, which leaves them liable to pay the loss only in the proportion that the insurance bears to the value of the vessel or cargo insured. A cargo worth ^12,000 insured for $8,000, in case of loss the company would only pay two-thirds of $8,000. 451. When at Sea. A ship may be insured while she is on her voyage, and it is not known whether she is safe or whether lost. The insurance is valid, even though the vessel were lost at the time. 458. Life Insurance. The principle of life insurance is investment. There are various forms of companies doing a life insurance business : 1. The stock companies. 2. The mutual companies. 3. The assessment societies. 451>. Who may Insure. Any person may insure his own life, and also insure for as large a sum as he can afford to pay for, and in as many companies as he pleases. A husband may insure the life of his wife or child, or vice versa. A creditor may insure the life of a debtor. In the latter case the creditor can only recover to the extent of his debt, the remainder going to the deceased's legal representatives. Members of a partnership firm may insure the different partners. 400. The Beneficiary. The person to whom the policy is made payable is called the beneficiary. 1. The insured may make it payable to himself. In this case he may 128 GUAHDING AGAINST FHAUD. borrow money on it without any other person signinj^ the a.sHi{jnn»ent ; also, in this case it is liahU' to be seized for debt in case of insolvency. 2. If niaile payable to a wife or ehikl, or other person, then it cannot be assif^ned without that person's sijfuature. Such a policy caiuiot be touched by creditors, except in certain eases, to tiie extent of premiums paid, in case of the insolvency of the insureil. 8. If the IxMieticiary is not a natural heir, but souie other person, and the insured dies without a will, the money cannot be paid to the bene- ficiary, unless a creditor, as the laws of heinshi,) will {jive it to his rifjhtful and legal heirs, notwithstanding the wording of the policy. 4HI. What Voids a Policy. Certain misrepresentations will void a policy. An untrue statement in regard to the age, or the causes of death of brothers or sisters, parents or grandparents, etc., also are material, and void the policy. For instance, if several members of the family had died with consumption, or with cancer, etc., and other causes were given, it would void the policy, if the insured subsequently died by or through the effects of such disease ; and even to state an untruth in regard to the insured being married or single has been held to void the policy. 46/8. Notice of Death should be given as soon after the event occurs as would be seemly. 4« « "« "^" aq !-* %^ § 'A ' • K ^ ^» >4 s 1 i Q 8 s 8 1*3 • S ¥ Co ^ ^ t En ■Sk •v ;> o ? k H TV s ^ 1 1 ■5 1 S :s « 1^ ^ Si -^ ^ <8 .-a ■^ "^ ^ :^ •<: ■«^ K^ . ! ! !| 180 GUARDINO AGAINST FRAUD. -^ \ 5 into an iij^rei'nient i*i'(|uir- ing Nucli an instnniii>nt, it should not he Hijrnod ex- cept in the presunco of a witneHH. EviMi then, in- stead of signinjf their print- ed forms, it would Ik? safer to write out the ajyreenient on plain paper. 4«M. Note Preventing Fraud. The form of note shown on this p^jje is the best protection against the frauds and swindles that have caught even the shrewdest of men that can be devised. In purchasing a uiacliine or any line of goods from a strange firm without opportunity for a sutRcient test, write out such a note as this on plain Caper instead of using their lanks. This note is valid antl can be collected as well as any other form, provided there is no fraud, but if there is fratid in connection with the transaction, it could not be collected. It is made non-negotiable, so that the payee cannot trans- fer it to an innocent holder for value to be collected. It can be transferred !)}'• assignment, but in that case the purchaser does not get an}'^ better title to it than had the original hold- er, hence the maker is safe. The words "and not other- wise or elsewhere " are not absolutely necessary, but (like the words " value re- ceived") it is better to use them, as they are evidence that there was a decided intention that the note should not be transferred, and that it should not be payable at any other place than the one specified. EXTRADITIOX. 131 X CHAPTER XXII. EXTRADITION. 4«». Extradition. The followii.K are the cases for which a person limy be extradited from the United States to Canada, or vice verm-. 1. Murder, or attempt or conspiracy to murder. 2. Manslaufjhter. 3. Counterfeiting or altering money, and uttering counterfeited or altered money. 4. Forgery, counterfeiting or altering, or uttering what is forced, counterteited or altered. 5. Larceny. (). EmbeKzlement. 7. Obtaining money or goods, or valuable securities, by false pretences. 8. Crimes against Bankruptcy or Insolvency Law. 9. Fraud by a bailee, banker, agent, factor, trustee, or by a director, meiuber,or officer of any company, which fraud is made criminal by any act for the time being in force. 10. Rape. 11. AV)duction. 12. Child stealing. 13. Kidnapping. ■ 14. False imprisonment. 15. Burglary, housebreaking or shopbreaking. 10. Arson. 17. Robbery. IH. Threats, by letter or otherwise, with intent to extort. 19. Perjury or subornation of perjury. 20. Piracy by Municipal Law or Law of Nations, committed on board or against a vessel of a foreign State. 21. Criminal scuttling or destroying such a vessel at sea, whether on the high sea or on the great lakes of North America, or attempting to do so. 22. Assault on board such vessel at sea, whether on the high seas or on the great lakes of North America, with intent to destroy life or to do grevious bodily harm. 23. Revolt, or conspiracy to revolt by two or more persons on board such a vessel at sea, whether on the high seas or on the great lakes of North An.arica, against the authority of the master. 24. Any offence under either of the following Acts, and not included in any forgoing portion of this scliedule : (a) An Act respecting Offences against the Peraon; {It) The Larceny Act; (c) An Act respecting Forgery; ((/) An Act respecting Offences relating to the Coin; (e) An Act respecting Malicious Injuries to Property. 25. Any offence which is, in the case of the principal offender, included in any foregoing portion of this schedule, and for which the fugitive criminal, though not the principal, is liable to be tried or punished as if he were the principal. (40. V. C. 25, 2nd schedule part.) 132 WILLS. CHAPTER XXIII. WILL8. 410. A Will is a written instrument left by a person in which he gives directions for the disposal of his property after his death. A person to make a valid will must be of tlie age of twenty-one years, of sound mind and free from constraint or any undue influence. The lawyer's toast, " here's to the man who writes his own will," should not be for- gotten by laymen. No! evnyone is fit to write a will. A will should not be the last act ot u man's life. No wonder that so many of them are broken in the courts ; dictated under intense excitement, drawn in haste, they do not represent the deliberate judgment of the testator or meet the requirements of natural justice. Soldiers in service may dispose of their efTects by simply signing a written statement of how they wish their property to be disposed of. Salloi-s at sea may also, in the same way, without any of the formali- ties of a will, bequeath their effects as they wish. 411. Executor is the person named in the will as the one who is to carry out its provisions and look after the property until its distribution among the heirs. An executor may enter at once upon the work of carrying out the provisions of the will, as .soon as it i^as been publicly read, before being proved. It was formerly the rule that if a debtor were appointed executor, his debt was forgiven, but this is no longer the case. An executor, who is believed by the hell's to be acting unwisely or unjustly, may be compelled to show his books before the County Judge by any of the heirs who is twenty-one years of age. An executor that is found to be wasting the estate or committing acts of injustice against the heirs, may be removed by proceedings in the Surrogate Court. 41/8. Administrator is the one appointed by the Surrogate Coin-t to settle the affairs of the estate of a person who dies without making a will. An administrator may apply for authority to act in that capacity fourteen days after the death of the owner of the estates, and settlement must be made within one year or the administrator becomes personally liable for any loss that may occur. Where the wife administers on her deceaseil husband's estate, she cannot be compelled to do so uniler one year. Where a man, unmarried, dies without leaving a will, the father or mother, if living, and if they be dead the eldest brother, is entitled to administer. A person administrating must first obtain the consent of all the heirs ; that is, if he be not the father, wife, brother, sister or child of deceased. 41JJ. Heir or Legatee is the one who receives property under the will. A legacy to a friend who dies before the testator, lapses. A legacy to the testator's child who may have children, will go to those children if the legatee should die before the testator. f WILLS. 133 A pecuniary legatee, who is also a debtor to the testator, must account for the debt on payment of his legacy. If the debt has been outlawed it would be optional with the executor whether to deduct it from the legacy or not. 414. Who may Draw a Will. The testator may write his own will if he desires to do so, and every man should be able to write his will. Any other person who can wi'ite clearly the desires of the testator, but prudence would dictate that none but a person of experience and ability should be entrusted wnth so important a matter. 415. Requisites to be Observed. It should contain : 1. The name in full of the testator, his address and calling. 2. It should plainly state that this is his last will and testament. 8. That it revokes all former wills and bequests. 4. How debts and expenses are to be provided for. 5. A clear and 0. When Liens Cease. Every lien which has been duly registered absolutely ceases to exist after ninety days from the time when the work or service ended, or the materials were furnished, or the expiry of the period of credit, unless in the meantime an action to realize the claim under the provisions of this Act has been instituted and a certificate thei'eof duly registered. The x-egiatration of a lien ceases to have any eftect after the expira- tion of six months from the registration thereof unless the lien shall be again registered within that time, or proceedings have been commenced to realize the claim and a certificate thereof been dulj'^ recorded. 4!H. Priority of Lienholders. Liens have priority over all judg- ments, executions, assignments or garnishments issued after .such lien ari.ses, and over all payments made cm account of the sale of the property or a mortgage thereon after notice in writing of such lien to the person making such payments or after the registration of the lien. Among the lienholders themselves eacii class shall share the proceeds recovered pro rata according to their several classes and rights. 41>!4. Priority for Wages. Every mechanic or laborer wliose lien is for wages shall, to the extent of thirty days' wages, have priority over all other classes of liens to the extent of the twenty or fifteen percentage reserved from the contract price. All such mechanics or laborers share pro rata in the sum recovered. Wage-earners may also enforce a lien before the contract is completed. In case of a contractor or sub contractor making default in finishing his contract the percentage due such contractor or sub-contractor for work done or materials furnished at the time when the lien is claimed by wage-earners cannot be used for any other purpose, or for payment of damages for the non-fulfillment of the contract to the prejudice of the wage-earners. 138 mechanics' and vvage-earneus' lien act. if Every device by any owner, contracter, or sub-contractor to defeat the priority thus given to wago-eai'ners for their wages is null and void. 493. Transfer of Lien. A lienholder may assign his right of a lien by an instrument in writing. A lienholder dying, his right of lien passes to his personal representative. 494. Discharge of Lien. A lien may be discharged by a receipt Slgnee! bv ledgui;'" ' register!) i ' ' fjaimant or his agent duly authorized in writing acknow- if it and verified by afiidavit, and registered. The fee for ^ . icharge is the same as for registering the claim. 495. Vacating a Lien. Upon payment into Court or receiving sufficieui .sLt:nrity, (v upon other grounds, the Court or Jmlge may vacate the regisiratioi. iftir. i-jn. 494S. Lienholders Demanding Terms of Contract, etc If the owner or his agent refuse to give information concerning the terms of the contract, or knowingly falsely state the terms, or the amount due and unpaid thereon when demanded by a lienholder who suffers any loss thereby shall be liable to him in an action to the amount of such losa 497- Mode of Enforcing a Lien. An action to enforce a lieu may be tried by a Judge of the High Court of Justice at any sittings .or trial of actions, and also by the Master in Ordinary, a Local Master of the High Court, an Official Referee, or a Judge of the County Court. It is not necessary to issue a writ of isummons, but merely to file in the proper office a statement of the claim verified by affidavit. Any number of lienholders having a claim on the same property may join in the action. An action brought by any lienholder is deemed to be brought on behalf of all other lienholders on the property in question. Any lienholder for an amount not exceeding SI 00, or any lienholder not a party to the action, may attend the trial in person or be represented by an agent or solicitor. 498. Cost of Entering Action. Wage-earners have nothing to pay upon entering action to enforce a lien. Persons other than wage- earners are required to pay in law stamps one dollar on every SlOO or fraction of $100 of the amount of his claim up to SI, 000. 499. Appeal or New Trial. In actions were the amount of judg- ment is SlOO or less there is no appeal, but application may be made to the same Trial Judge within foui'teen days after the judgment is pro- nounced for a new trial. In actions where the judgment exceeds SlOO and not more than S200 an appeal may be made to the Divisional Court whose judgment shall Ije final. In all other cases the right of appeal is the same as in actions without a jury in the High Court. 500. Payments to Defeat Lien Claims. No payment made for the purpose of defeating a claim for a lien is legal. MECHANICS' AND WAGE-EARNERS' LIEN ACT. 139 .101. Contracts to Waive Remedies, Void. Every agreement, verbal or written, expressed or implied, by which any workman, laborer, Huryant, mechanic, or other person employed in any kind of manual labor waives the application of the various Acts which provides remedies for the recovery of wages by such employee, is void. 50/5. Removing: Property Affected by Lien. During the continu- ance of a lien none of the property affected by the lien can be removed t(j the prejudice of the lien ; and the attempt at such removal may be restrained on application to the High Court, or to a judge or other officer having power to tiy an action to realize a lien, the amount cf costs to be at the discretion of the Court or Judge. 50J{. Lien on Articles Repaired. Every mechanic or other person who has bestowed labor, money or matei'ial upon any chattel or thing, as a waggon, organ, or other article, has a lien upon the article for the amount of his claim, and may hold it until it is paid. In case the amount due is not paid within three months from the time it should have been paid he may sell it by auction on giving one week's notice in a newpaper published in the municipality in which the work was done, or if there is no news- paper published in that municipality, then in a newspaper published nearest thereto, stating the name of the person indebted, the amount of the debt, a description of the article to be sold, the time and place of sale and the name of the auctioneer, and leaving a like notice in writing at the last known place of residence (if any) of the owner, if he be a resident of such nninicipality. After applying the proceeds of the sale to the payment of the debt and the costs of advertising and sale, the surplus must on application be paid over to the person entitled thereto. In respect to all kinds of chattels the ai'ticle must be kept in posses- sion in order to retain a lien. It must also be properly cared for as though it were in a warehouse. The existence of the lein does not prevent the party holding it from collecting the debt in court. 504- Laborers on Public Works. In case any contractor or sub- contractor for any public work makes default in payment of wages of any foreman, workman, or laborer, or for a team employed on the work, the claim for wages must be Hied in the office of the member of the Execu- tive Council who let the contract not later than two months after the claim became due, and payment will be made to the extent of any securities or moneys for securing performance of the contract in the hands of the Crown at the time of filing the claim. 505. Priority of Wages Respecting Insolvents. In the assign- ment of estates for the benefit of creditors the assignee must pay in priority to general creditors the claims for three months' wages or salaries for all persons in the employment of such person at the time of or one month previous to the assignment, and then after that they are io rank as general creditors for the residue of their claims. It is the same when winding up a joint stock company as with an execution debtor. 140 INSOLVENT DEBTORS. 506. Garnishee. When any debt or money demand, not being a claim for damages, and which comes within the jurisdiction of a Division Court, is due one pei-son by another, money or a debt due the debtor by another pai'ty may be attaclied while in the hands of the third party l)y a garnishee summons. Money due any mechanic, workman, laborer, servant, clerk or em- ployee for wages cannot be garnisheed unless the sum due exceeds S25, and then only to the extent of the excess. In a case, however, where the debt was contracted for board or lodg- ing, and in the opinion of the Judge the exemption of ^25 is not neces- sary for the maintenance of the debtor's famil}', then the amount to be secured by the garnishee will be in the option of the Judge. A single man with no one depending on him for support has not any amount reserved to him by law against a garnishee. 501. Form for Claim of Lien. A. B. (name of claimant) of (residence of claimant), under the Mechanics' and Wage-earners' I.ien Act, claims a lien upon the esttite of (name and residence of owner of the land upon which the lien is claimed), in the undennentioned land in respect to the following work (service or materials) ; that is to say, (give a short description of the work done or materials furnished) which work (or service) was (or is to be) done (or materials were furnished) for (name and residence of person upon whose credit the work was done or materials furnished) on or befoi-e the day of The amount claimed as due (or to become due) is the sum of S The following is the description of the land to be charged (give number of lot, street, or concession, etc., sufficient for the purpose of registration). When cre'Ht has been (jivcn, insert : The said work was done (or materials furnished) on credit, and the period of credit agreed to expired (or will expire) on the day of IH Dated at this day of A.D. 18 . (Signature of claimant.) In a claim for wages, simply substitute "wages," etc., for " materials" in the above form. CHAPTER XXV. INSOLVENT DEBTORS. 508. Assignment. We have no In.solvency Law in Canada, hence no one can be forced to make an assignment. A person who finds himself unable to meet his obligations may make an assignment for the benefit of his creditors. The Act contemplates that an assigmnent siiouhl be made to the Sheriff of the County in which the insolvent's goods are located, but the creditors may consent to some other individual acting us assignee that would be cho.sen by the debtor. They may also make as many subsefjuent changes as they fin i necessary. INSOLVENT DEBTORS, 141 If an assignment is made it must be advertised — four insertions in a county paper and one insertion in the Ontario Gazette. Inspectors appointed liy the creditors give authority to the assignee to act. In nieetings called for the purpose of appointing the inspectors, creditors to the amount of ^100 have one vote ; those of over $100 ami under 8500 have two votes; those to the amount of $1,000 have three votes and one additional vote for each $1,000. The assignee's salary is fixed by the inspectors appointed by the creditors. An insolvent person may sell his property to pay with cash what debts he can any time before being declared insolvent, but he cannot sell by Bill of Sale on the eve of insolvency. The sale or transfer of personal property by an insolvent debtor within sixty days before making an assignment, either through force or voluntarily, may be set aside by an action brought for that pui'pose hy any creditor injured thereby. SOU. Creditor's Relief Act. Under the present Act, if a creditor gets judgment against a debtor, this judgment must be entered in the ooks by the Sheriff of the County where the debtor resides; also all moneys made by the seizure must be deposited with the Sheriff. Tliese books are open free 'f chai'ge for thirty days, and any person entering their claims within this time are entitled to a rateable division of the debtor's estate, the first creditor's law expenses having first been paid. 510. Fraudulent Preference. Any gift or transfer of property or any security, such as a chattel moi'tgage, given within thii'ty days of insolvency, is consideretl a fraudulent preference, ami may be set aside by an action brought for that purpose. It is valid as between the parties themselves, but not as to creditors. 511. Priority of Claims. As soon as a person is declared insolvent the first thing to be paid is taxes; second, rent for one year; third, salaries for three months ; fourth, mortgages ; fifth, general creditors. As to the priority of creditors to the effects of a partnership firm, the partnership creditors come first for all partnership effects, and indi\idual creditors first for all individual property ; after this the remainder is rateably divided. Sri. Absconding Debtors- The goods of a debtor moving out of the place, but not out of the country, cannot be stopped by a creditor unless under an execution. In case a per.son being indebted to a sum not exceeding SI 00 nor less than S4, and ab.sconds from the Province leaving personal property liable to seizure under an execution, or attempts to remove such personal pi'operty either out of Ontario or from one county to another, or keeps concealed to avoid service of process, the creditor may file an affidavit to that effect with the clerk of the Division Court, who will issue a warrant to attach the goods that are liable to seizure for debt. Any County Judge or Justice of the Peace for the county could take the affidavit nd issue the warrant. Care must be taken, however, in this case, as in all others, not co seize the exemptions, or to stop their removal, or there would be a case for damages. 142 SUNDRY ITEMS. An absconding debtoi" leaving tlie country may be arrested and lield in custody for bail by a person having a claim against him of SlOO or upwards. A debtor leaving Canada, and going into the United States, may be followed and suit brought in the American court. The Canadian law j^reiuiila in the cane, but the " homestead e.xemptions " over there are so numerous that in the majority of cases nothing could be recovered. 513. Jurisdiction of Canadian Courts. There are three classes of persons over whom the courts here have jurisdiction: (1) In case of residence, the person living here. (2) In case the contract was made here, although the work was to be performed in another country. (3) If the person has property here, although his residence might be in another country. SUNDRY ITEMS. 514. Receiving Goods Not Ordered. A merchant receiving an invoice of a shipment of goods in which are some articles that he had not ordered, and yet with this knowledge takes them from the express office or bonded warehouse without receiving permission from the shipper to do so for the purpose of examination, cannot afterwards return them if shipper objects, providing the goods in other respects are free from defects. 515. Money for Betting^. Money Itorrowed for the purpose of betting, "the lender knowing it to be borrowed for that purpose, cannot e collected. Money deposited with a stakeholder on a wagering contract may be recovered back any time after the event before the money has actually been paid over, but not if the stakeholder has paid it over before his authority was revoked. The payment of a wager is in all cases voluntary, but if paid the money cannot be recovered back. 516. Replevin. A pei-son who.se goods, chattels or personal property of any description or land have been wrongfully detained may obtain a Judge's order for a Writ of Replevin. In case where the claimant can show that the delay in waiting for a Judge's order would materially pre- judice his rights to such property, a Writ of Replevin may i°sue without a Judge's order. In such case the Sheritt" would take and detain the property until a Judge's order or rule of the Court is obtained. Before the Sheriff acts upon a Writ of Replevin the claimant is required to give him a bond to treble the amount of the property that he will prosecute the suit without deit*y, or make return of the property if a return is adjudged, and pay such damages to the defendant as he may have sustained through the proceedings. If the value of the goods for which the Writ of Replevin is obtained does not exceed S()0, the writ may issue from the Division Coui't ; if over S60 and up to !!!»200, the writ may is.sue from the County Court. A copy of the writ is not served on the defendant until after the pro- perty has been replevied, or as much of it as is possible. 517- Right of Way for Vehicles and Pedestrians. One person or vehicle meeting another on the highway must turn to the right, or be SUNDRY ITEMS. 143 liable for claina{,'e8. Pedustrians have the "rijjht of way" on public streets, and if drivers of vehicles run them down or do them injury by colliding with them, they are liable to fine and also for damages. 518. Entering Cases in Division Court. Merchants or other per- sons who have accounts they wish to sue, can enter their own cases as well as any solicitor would for them. Make out an itemized account for each, or if it is a note, take the note itself and go to the Clerk of the Division Court for suit, and the Clerk will do the rest. If the account is under $10, the cost right through to judgment will be only 81.25 for clerk's fees, or $1.6.') including the bailiff's fees for service of the summons, exclusive of his mileage. Where the amount exceeds $10, the costs increase according to the amount of the bill, but in no case will exceed $2.50. Actions may be taken in the Division Court on any sum up to $100 for accounts, or $200 on notes and written instruments. 5lt>. Copyright. In Canada a copyright may be obtained by the author or publisher of any book, picture, drawing, map, chart, etc., which holds for 28 years from date of copyright. The fee is $1 for registra- • tion and 50 cents for a certificate of registration, which is forwarded to the author. TweScopies of the work must be forwarded to the Depart- ment of Agriculture, except in case of a painting or sculpture, etc., a vritten description will do instead of the -fcw^ copies. Every article copyrighted must contain a notice of the copyright. Any person who inserts such notice without having a copyright, is liable to a penalty of $.S00. An infringement of a copyright incurs a heavy penalty and the confiscation of the works. To secure a copyright write To the Minister of Agriculture, {Copyright Branch), Ottawa, who will forward a copj' of the Copyright Act and full information, so that any person of on^inary intelligence may do all the correspondence. No postage is i-erjuired, as the letters go free. tV^O. Trade Marks. A general trade mark, such as " Pure Gold," which a merchant or manufacturer uses to distinguish his goods of various kinds from those of others, may be registered for $30. There is no limit to its duration. A specific trade mark, which is used for only one kind of goods, as " B.B.B." (Burdock Blood Bitters), may be registered for $25, and .stands for 25 years. Industrial designs, as letter heads, labels, etc., may be registered for $5, which secures its exclusive use for 5 years. A copy of tlie Act may be obtained from the Minister of Agriculture (Trade Mark Branch). 5/81. Patentright. Nearly any ai-ticle or machine that is new and useful may be patented. The fee for five years is $20 ; for 10 years, $40 ; for 15 years, $60. For full information write to the Commissioner of Patents, Department of Agriculture, Ottawa, who will forward a copy of the Act with full details. INDKX. BFX-TION Absconding ilcbtorH 51*2 Acceptance IBI Uf contnict^ '21 Of draft 1(14 Of overdue Wills 171 By mail 'M By telegrajili '2(1 (iencral Klfl Conditional 1B7 Qualified l(Ml Partial I(J8 Changing time in Kill Accident insurance 4(Jn Accommodation paper l'J7 AccountH 180 Selling Imok 28i Suing ills Administrator 472 Agency (hco principal and agent) 327 Agreement l)> Not to engage in business 60 To sell personal property. . .268, 272, 275 Til sell real estate 287, 288 Form of 28» For service and hire 344 lonn of 345 To build a house 72 Alteration of notes 123 Alien enemies 57 Application of payments 81 Arbitration an-72 . 10 . 11 . 12 . 13 . 14 . 15 . 16 . 17 . 18 10 . 10 43, 44 . 58 , . 65 ,. 64 . . <» . . 61 . . 50 . 63 .. 41 . . 4-2 .. 07 . . 08 . . !«» .. 100 CunlrautH Conliunrd. »bctio!« Keiiiliiiu and expluinin); 101 rdriuetions 102 Breach of 89, 273, 278 Contract for building a hoiwc 72 Co'pai'tnerHhip (hco partnurghip) 357 Copyriglit 519 Corporate bodieH ,S84 Coupon Honda .... 112 DavH of (iraoo 116 DelttH, collection of 186 (Guaranteeing of 313-326 Outlawing of 105-109 Deeds '290 Deed poll 293 Trust deeil 294 Warranty 291 Form of warranty ... 295 Quit claim 292 Form of (juit claim . . 304 Who Hhould sign 296 Delivery of 300 Deeayment of note — Con. Nwnio* Soundness ot a horse 321 Guarantor, Discharge of 320 Creditor's obligatiuns to 324 Rights between sureties 326 Guaranty and suretyships 313 Binding oral guarantee 314 When It must bo in writing 315 The consideration in 318 Letters of recommendation 316 Guarantee insurance 322 Form of fidelity liond 323 (lUarding against fraud 466 Form of swindling note 467 Note preventing fraud 468 Heir 473, 482 Idiots 62 Indians 56 Indorsenu'iits 178 Purposes of 179 Requisites of 180 Methods of 181 In blank 182 In full 183 Restrictive 184 Without recourse 185 Guarantee 186 Fourteen forms of 187 Indorsers, Contract of 188 Relation between 189, 326 To hold indorsers 193 Five things that free 194 Holding previous 196 Waiving presentment and protest. . . 187 Injunction 96 I. O. U 209 Insurance, Fire 448 Six things that void a policy 449 Removing the goods 450 Agent represents the insured 451 Floating policies 452 Notice of fire 453 Adjustment of losses 454 Insurance, Marine 455 When at sea 457 Amount of loss paid 456 Insurance, Life 458 Three classes of companies 458 Who may insure 459 The beneficiary 460 The beneficiary if not an heir 460 When creditors cannot seize 460 Things that void a policy 461 Notice of death 462 Suing, if company refuses to pay . . . 463 Suicides 464 Insurance, Accident 465 Death by sickness 465 Death by murder 465 Death as manslaughter 465 Innocent holders for value 115 Instalment note 159 Insolvent debtors 508 Assignment of 508 Sales for cash by 508 Sales by bill of sale by 275, 508 Creditors' Relief Act 609 Fraudulent preference by 510 146 INDEX. \ Insolvent debtors — Continued. sEcriou Fraud by 66 Priority among creditors 511 Absconding debtors 512 When goods may be seized 512 When person may be arrested 512 Following debtor to United States . . 512 Interest 160 Legal rate of 160 Compound 160 After maturity 146 Intestate 482 Heirs of 482 Invoice containing gooils not ordered .... 514 Joint stock company 382 Advantages of incorporation 383 Various corporate bodies 384 How to form a company 385 Advertising in Oasette 387 The petition 386 Corporate name 388 Government fee . . 389 Board of directors 390 Books to be kept .... 391 The unpaid stock 392 Limited liability 393 Double liability 394 Transferring stock 395 Dividends 396 Penalty if " limited " is omitted 398 Liability of directors 399,400 Annual statement compulsory 401 Forfeiture of charter .... 402 Liquidation of 403 Judgment 91 Judgment summons 94 Jurisdiction of Canadian courts 513 Landlord and tenant 404 The lease 405 Form of house lease 431 Form of farm lease 432 When oral agreement binds 405 When oral agreement does not bind . 405 Written lease with seal 405 Lease to be registered 406 Lease by minors 406 Short form blanks, caution 408 When rent is payable 41 1 The landlord's covenant 410 Landlord and other creditors 412 Who pays the taxes 409 Distraining for rent 413 Exemptions from seizure 416 List of exemptions 93 Exemption and landlord's taxes ... 409 Monthly tenant and exemptions .... 417 Resistance by tenant 414 Goodsoft'the premises 413 Penalty for illegal seizure 415 Seizing the exemptions 419 Form of notice 419 Goods seized by other creditors 420 Evicting and doubling the rent ... 425 Raising the ront by notice 427 What are fixtures 428 Who makes repairs 429 Landlord's notice to quit 422 Landlord's notice to double the rent 426 Landlord and Tenant — Continued. bhctiow Notice to quit not acted upon 424 TENANT 406 Three classes of . 405 Privileges of 407 Obligations of 408 Resisting seizure by 414 Monthly tenant, caution 417 Moving out with exemptions .... 418 Notice to (juit by tenant 421 Form of notice 423 Law, Definition of 1 Divisions of 6-7 Law of heirship 482 Lease (see landlord and tenant) t04 Legal holidays 148 Legatee 473 Legal tenders, money 88 Of payment 85 Lien notes 151 Special form of 158, 159 Registering of 152 Lien sales 151-157 Loaning property (see bailment) 436 Lost notes 145 Lunatics 53 Lucid intervals of 54 Marriage, Restraint of 61 Marriage broker 62 Master and servant 343 Contract for service an«l hire 344 Form of agreement 346 Agreement for one year 344 .Agreement for over one year 344 Agreement limited to nine years 344 Contract with near relatives ........ .344 The wages, if not agreed upon .344 Obligations of employee 346 Legal notice to leave < 347 D'lcharge without notice . . .348 Discharge with notice 349 Cause for leaving without notice. . . . 350 Master liable for acts of servant. . . . 352 Master liable for contracts of servant 351 How to uvaS53 Master liable to servant for injuries. .350 Employee's personal liability .354 Termination of service 355 i'rocess for collecting wages S.W Mechanics' and Wage- Earners' Lien Act. 484 Who has a lien on property 484 Liens on several properties 486 Several liens uniting 486 Limit of owner's liability 486 Owner's safeguard 487 Registration of lien 488 Time for registering 489 Fee for registering 490 Form for registration 607 Time when Rens cease 490 Priority of lien holders 491 Priority for wages 492 Transfer of lien 493 Discharge of lien . . 494 Vacating a lien 495 Lienholders' right to know tenns of contract 496 Mode of forcing a lien 497 Mi, INDEX. 147 HRCTIOM .. 424 . 405 . 405 .. 407 . . 408 .. 414 .. 417 .. 418 . . 421 .. 423 1 . . 5-7 . . 482 . . ;04 .. 148 .. 473 .. 88 .. 85 .. 161 58, 159 .. 152 151-157 . 436 .. 145 .. 53 .. 54 .. 61 .. 62 .. 343 .. 344 . 345 . . 344 .. 344 ..344 .. 344 . . 344 . . 346 . . 347 . . 348 . . 349 ... 350 . .. 352 mt 351 . .. 353 es. 350 ...364 . .. 355 . .. 356 ct. 484 . . 484 .. 486 .. 486 ...486 . .. 487 ... 488 . .. 489 ...490 ...507 ...490 ... 491 ...492 ... 493 ...494 ...496 8 of ...496 ... 497 Mechanics' Lien Act — Continued. bbction Cost of entering action 498 Appeal, or new trial, when 499 Payments to defeat liens illegal 600 Laborer's agreement to waive reme- dies, void 501 Removing property affected by lien . 502 Lien on articles repaired 503 Sale of repaired article if not paid . . 503 Wages due on government works . . 504 Wages and insolvent persons 505 Garnishee of wages 506 Merging securities 87 Minors 13 Contracts of 43 Necessaries for 44, 45 Luxuries for 46 Note of 47 As agent 48 May ratify contracts 49 Enforcing contracts 50 Repudiating contracts 50 When parents are liable 51 Money for betting 515 Moral obligation 39 Mortgage 243 Form of 249 Registration of i;44 Writing of 245 Special clauses of 246 Discharge of 247 Outlawing of 248 Repayment clause ol 250 Sinking fund 251 The power to sell 252 Foreclosure of 253 Other property liable 254 Personal covenant in 256 Prepayment of 256 Transfer of 257 Form of assignment 258 tJnsatisfied 254 Negotiable paper 112 See promissory notes 113 See drafts 161 See cheques 202 Negotiating overdue bills , 172 Notes, promissory .... 113 Forms of VM Parties to 114 Acconmiendation notes 127 Bank notes Ill Minors' notes 131 Forged notes 133 Lost notes 145 Individual notes 135 Partnership notes . 1 36 Joint and several notes 137 Joint notes 142 Non-negot'.ttl)le notes 138 Chattel n.)te8 141 Patent right notes 143 Lien notes 151-160 Collateral notes 149 Instalment notes 159 Swindling notes 467 Note preventing fraud ... 418 Innocent holders of 116, 126 Notes, promissory — Continued. sbotion Maturity of 1 17 Maturing on Sunday 118 Place of payment , ' 1 19, 150 Presentment of 191 Presentment delayed 190 Collection of 190 Renewal of 147 Payment of 128 Signature of 120 Signature by pencil 121 Signature by mark 140 Signature by married women 144 Cancelling signature 129 Alterations of 123 Defects in 124, 125 Value received in 122 Surety on 130 Outlawing of 106 Obtained by fraud 132 Interest after maturity 146 Oi-ders, various forms 210 Outlawing of debts 105-1 1 1 Overdue paper 171 , 172 Parents liability for minor children 51 Partners, three classes 358 Liability of general 358, 373 Liability of limited 359 Powers of 371 What partners must not do 372 Partner suing the firm 374 Partner selling his interest 275 Bankruptcy or death of 376 Protection for retiring 377 Partnership .357 Partnership agreement 361 \V hat the agreement should state . . 362 Form of agreement 367 Registration of partnership 363 Penalty for not registering 363 Form for registration 364 (Contribution of capital 366 The firm name ... 368 How formed 365 Non-trading firms 369 Church trustees and social orders . . . 370 Insolvency 373 Dissolution 378 Dissolvetl by decree of court 379 Registration of dissolution 380 Business after dissolution . . 381 Passengers, railway 444 Patents, Sale of 143, 521 Patciii; . ight notes 143 Pawnbi'oker 443 Payments 73 In money 74 In property .... 75 In notes 76 By forged paper >»77 By counterfeit money 77 To whom 78 Place of 79 Presumption of 80 Tender of 86 Application of 81 Refusal of 86 Place of suit 71 148 INDEX. 8IICTI0II Principal and asent 327-341 Principal, bound b^ general agents. .334, 338 Bound by special agents 335 Bound by ratifying agent's acts 342 Bound by accepting the benefits ... 342 AGENT 327 General 334 Appointment of 330, 331 Power of Attorney for 332 Authority of 333 Obligation to principal 336 Personal liability of 337 Signature of 337 Notices and tenders to 341 Termination of agency 340 Special agents . . 335 Sub-agents 339 Promises, Gratuitous 33 Conditional 32 Mutual 31 Property 259 Division of 260 Owner's Authority 261 Rights owr others 262 Joint ownership of 263 Life ownership 264 Ownership by possession 265 Property held in trust 267 Sale of personal property '268-286 Sale of real property 287 Widow's dower in 266 Oral agreement to sell personal .... 272 Proposition 20 By mail, when closed 26 Withdrawal of 27 Time for acceptance of 22, 26 Assenting to a 21-25 Protest By notary 195 Fees for 198 Noting for 197 By Magistrate 199 Form for Magistrate 200 Itailwayfl 444 Alarm at crossings 444 Persons walking on tiacks 444 Baggage for man and wife 444 Damages for delay 444 Jumping oH° moving trains 444 Return tickets not used 444 Real estate (see property) 259 Sale of 287 Binding agreement for sale 288 Form of agreement 289 ; Deeds (see deeds) 290 Mortgages (see mortgages) 243 Ownership of 261-265 Receipt, every form 211-227 For projierty held in trust 225 For payment of legacj' 227 Releases 228, 229 Rent (see landlord and tenant) 404 Replevin 616 Representative ))odies 3 Restricting place of uayment in notes . . . 150 Right-of-way for peilestrians 517 Reviving outlawed debts 110 Sale of personal property 268 Executed sale 274 Of future crops 270 Of bill of sale -.275, 276 On trial 277 By sample 279 By order 284 By auction 285 Under guaranty 278 Of stolen goods 280 Conditional sales 281 Of book accounts 282 Of property under ^40. 272 Limit of oral sale 272 Binding agreement to sell 272 Penalty for breach of agreement .... 273 Goods stopped in transit 283 Sale under lien 151-159 Registration of 152 Retaking property 153 Notice of sale 155 Redeeming the property 154 Forms of lien notes 140, 151 Leaving copy of lien 167 Sale of real estate 287 Binding agreement to sell .... 288 Form of agreement 289 Seal 99 Signing by mark 100, 140 Statute of frauds 69 Statute of limitations 106 Applying to notes 106 Applying to accounts 107 Applying to mortgages 108 Applying to chattel mortgages 109 Succession duties 483 Suing 518 Surety 130 Sureties, as indorsers 179 Rights l>etween 326 Relations l«twecn 189 Things that free sureties 194 Swindling note 467 Telegraph companies 446 Tenant (see landlord and tenant) 404 Tender of payment ...... 85 Legal tender 88 Trade Marks 520 Wills 470 Executor «71 Removal of executor 47 1 Administrator 472 When wife administers 472 Heir an^ V »