i> i>. IMAGE EVALUATION TEST TARGET (MT-3) 7^ // ^/ <■ Cx €'<^,4 w. A ^ 1.0 I.I 1.25 ' ■- Ilia 1.6 1.4 ..^ (9^ / ^l ^ m: O O / ///. Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. M580 (716) 872-4503 it iV <^ "^ ^ 1. A ^ W^ ^^ 4 . agree to exchange horses. A actually delivers his horse over and B tliereupon promises to deliver his horse in one week, this contract is executed as to A and executory as to B. 9 Mutual Promises.— It will be noticed from the above that in Execu- tory contracts tliere must be promises by both parties. In the above example A [)romises to build a house for B, and B promises to pay A $400 for doing it. The promises therefore are mutual, each depending on the other, and being the consideration for the other in the meantime. 10 Requisites.- The following are the requisites to a valid contract. (i) It must be possible. V : ; (2) It must be legal. 'v (,5) It must be made by competent parties, Contracts— I, K<;Ar, and it.i.KCAr',. ti (4) It must be assented to by each party. (5) It re(iuires a consideration, (generally), (6) It must be without fraud. (7) la many cases it must be in writing, signed by the parties chargeable therewith, and some written contracts must be under seal. 1 1 Possibility. — A Contract to do an imi)o.ssihility is void, because it can- not be fulfilled. If a person were to agree to move a farm from one country to another the contract could not be enforced. The thing to be done, how- ever, must be impossible from the nature of tilings. Su[)pose A agrees to build a house for B and complete it by a certain date. A strike among the mechanics he employs renders him unable to finish his work by specified time. This would not make it a void contract as the circumstances were external and might have been foreseen or prevented. X agrees to build boat for Y, but is unable from lack of skill. This would not void the contract, nor would the sickness of one of the parties be excuse to void the contract. Because other persons could be hired who had skill to build the boat if the contractor was not skilled or was prevented by sickness. CHAPTER 2. CONTRACTS, Legal and Illegal Ii.i,i;(;ai,. To 00 AN Immoral Act. Madk on Sun'dav. AcAiNST Rkvenuk Laws A(iAi\.sT Common Laws. CJOMI'OIINDINC A KkLONV. In Rkstkaint ok Tradk 1 Legal Contracts. — Are those where neither the thing to be done nor the consideration for it is forbidden by law. If either is forbidden by law it. is considered hurtful to the general public, hence neither parties can enforce it. P>en if one party has performed his part or paid his money the law will not help him, as the contract is considered wholly vicious. 2 Illegal Contracts.— Are those in which the parties undertake to do what the law positively commands people not to do, or any contract which has for its purpose the furtherance of any object contrary to justice or common morality. This is the general principle. This subject may perhaps be best presented by taking up a number of specific cases. HS ^!^ M CONTRACTS—I.Kd.M, AND ILI.KCAL It ■ r 3 Cantracts to do any Immopal Act are void. Among these may be mentioned Contracts. (i) To lead an immoral life. (2) To publish, sell or transmit by mail, innnoral and oI)sccnc pictures or publications, cr Seditious publication, (3) Of bribery in case of elections. (4) Sunday desecration either for purpose of business or pleasure. (5) Bets and wagers. (6) (lambling. (7) Lotteries and raftlcs. ' (8) lUiying stocks on margins. 4 Contracts Made on Sunday. -.'Vccording to our laws Sunday is a day of rest and not for work except works of necessity or .iiercy, hence business done on that day is done contrary to statute law and on that account illegal. 5 Contracts Agrainst Revenue Laws.— .\ few of these cases may be mentioned. (.'ontracts in violation oi the revenue law defraud the public of the revenue due which is used for the support and maintenance of govern- ment. A contract to smuggle dutiable articles into a country or to make in- correct returns of li(iuor or tobicco n^'anufactured, could not be enforced nor could pay fordoing them be collected. 6 Contracts agrainst other Laws.— Among these we might mention contracls to sell liquor with(«ut license, to burn buildings, to destroy property, i.S:c. 7 Compounding* a Felony. — if a person guilty ofsome crime makes any agreement to p;iy anotlier person or to do anything for his benefit as a con- sideration for not prosecuting him, it oaimot be enforced. Suppo.se A has em- be/./.kd IVs funds, and he or his friends agree to pay B a sum of money to forbear prosecution, the payment cannot be enforced. Even though a promis- ory note or l)ond be given it cannot be collected by B. Thepiomise not to prosecute is itself a crime that is punishable. 8 Contracts in Restraint of Trade. A general contract whereby a person agrees not to carry on a certain trade or business or profession is diegal. 'I'his of course is gene al and not limited to a community. An agreement not to carry on a particular business is valid upon the following conditions. 1. It must be founded on a valuable consideration. 2. The restriction must not go, as to its extent in space or otherwise, beyond what in the judgment of the court is reasonably necessary for the protection tHE I'AUTIKS TO A CONIUACI. *5 of the other party. A contract made l)y A, selling out his trade to 15, agree- inj, not to start thj sa'iu h.nincss in that co n na.iity is n,)l in restraint of trade as^A may go to another place ar.d begin ig lin. A contract by which A w juld engage not to carry on a business in any phive would be illegal. Combines that limit the (juantity to be manufactured of any goods or commodity and in this way do away with ordinary competition so as t« \'\\ values on the goods to suit tiiemselves, are illegal. CHAPTER 3. THE PARTIES TO A CONTRACT. CoMl'fCTKNT I'AUriES. Incomi'ktkn I' I'aktif.s iNcOMPi'.ri.Nr Hind ('oMrF.TKNi Pakiiks. NkCKSSAKIKS lOl; iNCOMrKIKNI Paimiks. Idiots. I.l'NATKS. •j IN'IOXK AlKD ri'.KSONS. I Rathtcaiion ok Coni KAt is. Ln'I-ANIS. - DlSAiriRMANCE OK CoN IKACTS. [Aokncv. In'dians. Markikd Women. * cori'orations. 1 Competent Parties. — Kvery contract requires two or more competent parties to it. Competent parties must be: (i) Of legal age. (2) Of sound mind. (3) If women, unmarried except in cjrt un ctses. (4) If aliens, their nation must be friendly. (5) If Corporations, the contract must be such as is specially allowed in their charter, or from the nature and operations of the Corjioration. 2 Incompetent Parties. — Oiliers than those possessing the foregoing qualifications are, generally speaking, incajjable of binding themselves in con- tract, hence they are called incompetent parties. Exceptions to this are men- tioned under their appropriate headings. Those incompetent to contract may be classified as follows: 1(1 ) Idiots. (2) Lunatics. {3) Intoxicated Persons. ( 1 ) Infants. ' (2) Indians. (3) Married Women. (4) .'Mien Enemies. \^( 5) Corporations limited by their Charter. By Reason of Natural or Personal Inability. By Reason of Legral Inability. '.-.'^ -■ ■■■* -»1-.-"^ ■».■-. 1 6 CONTRACTS— THR PARTIKS TO. 3 Incompetent Parties Bind Competent Parties.— A Contract is made between an incompetent person and a competent person. The compe- tent person can generally be compelled to carry out his part, but the incompe- tent person's part cannot be enforced against him. He really has a choice as to whether he will or will not carry out his part. He cannot enforce a contract tract against a competent party to his own advantage and refuse to carry out his part. He can not use the law that protects him for the purpose of defrauding others 4 Necessaries for Incompetent Parties.— The general exception to the rule that infants, lunatics, iS:c., are unable to make contracts is in the case where they bind themselves for the necessaries of life, ( 1 ) I'ood. (2) Clothing. (.^) Medical attendance. ■ (4) III case of Infants, for Education. ICach of the foregoing items must be suitable to the person's station in life. For example, a yonng man under twenty-one years of age in circum- stances of an ordinary mei:hanic could not bind himself for expensive luxuries of living or dress but only for such as are necessary for ordinary com- fort and protection. A contract for necessaries supplied to such persons, charged at exorbitant prices could not be enforced. Only the intrnisic value of the articles could be collected. 5 Idiots. — An idiot is a person that never had reason or intellect. He is therefore incapable of understanding the nature and effect of any contract. He is therefore incapable of doing the business pertaining to the ordinary affairs of life. If he is the owner of property by inheritance it must be managed by others for him. 6 Lunatics. A lunatic is a [)erson who had reason and intellect but has lost them. Some lunatics have lucid intervals when they are sane enough and are, during that time, i)erfectly capable of contracting. Contracts with or by a lunatic are voidable at his choice, if at the time of making the contract it can he shown that he was absolutely incapable of understanding what he was doing and tluit the other party knew 0/ his condition. 7 Intoxicated Persons. An intoxicated person may be considered in the same way as a lunatic having lucid intervals. Intoxication by licjuor or drugs must be so complete that the person is deprived of his capacity to act and think. The rule in the foregoing section 6 applies to the contract of an intoxicated person the same as to that of a lunatic. CONTKACTS~THK I'AH'I'IKS Tf). n 8 Infants. -A pcrion under Iwcnty-one years of af,'e is called an infant or minor. Legally a person comes of age the day before the twenty first anniversary of his birthday. The laws are very carefully framed to protect the ri'Jthts of those incai)ab'e of caring for them selves. The theory of the law is "That before the age of twenty-one the human faculties are immature, undis- ciplined and incompetent to guard against artificial or subtlety and it therefore extends to them its protection and guardianshi[),'' The infant who is living with a parent or guardian has not power to make contracts and bind even for theneces- saries of life. The parent or guardian is liai)Ie for such supi)lied to the child under his protection. If the child is separated entirely from parent or- guirdian he has power to contract lor necessaries. Although infants are generally speaking, not amenable to law on contracts, they are, however, an- swerable able to law for all criminal offences, trespass, assault, etc. Exceptions. — An infant becoming owner of shares in a Stock Company IS liable durir^g minority for all calls accruing due on the same unless there was an express agreement to the contrary at the time of purchase. An infant that is a partner may rescind his partnersriii) at his majority. He cannot however rid himself ot the liabilities of the business, contracted during his continuance as a partner. Ratification.— An infant making an executory contract may ratify it on coming of age, ( 1 ) Hy doing in express words or writing. (2) By performance or part performance of.it. (3) l^y retaining the benefits accruing t j him from it. It will be noticed that the first is really a new contract and the second and third are new contracts l)y implication, if not really expressed in words. If not rescinded within reasonable time they may i)e considered as ratified. Disaffirmance. .\n infant may, on becoming of age, disaffirm his con- tracts that are executory. This must be done within reasonable time. It will not do to wait six months or a year and then rescind them. If he di.saf- firms a contract on becoming of age he must restore to the other party what ever proi)erty or consideration he may have received, as far as lies in \m power. Agency and Infants,— An infant maj' not appoint another person as agent as the agent could not bind the infant. An infant may however, act as agent for another person capable of making contracts and bind him in contracts made on his behalf. i8 ( ONTRACTS -THE I'ARTIKS TO. i! i ! Indians. "Phc Noblf Red Man" is a ward of the (lovemment, is cared for, and inainlaincd by the Ciuvcrnmcnt, and is considered incapable of car- ing lor himself or prolectin^j; liis own iiitercsls. He is a sort of permanent in- f nt, and is incapable of binding; himself in a contract even for necessaries. Married Women, - A woman unmarried — a spinster or widow — may make contracts as freely as a man. At common law a contract made by a married woman was void, the theory being that the husband and wife were one persoi , her legal jiersonality being merged into that of her husband at marriai"^'. This has, however, been modified, very materially, [see Revised Statutes )f Onta'-io, 1887, CJhai)ter 132, and Revised Statutes of Manitoba, Chapter 95.]/ A married woman may contract as freely as before marriage in reference to her own property, or Separate Instate, as it is called. She may also engage in business or trade on her own account. A married woman's property is all that she owned before marriage, all gifts, legacies, property received as heir at law of intestate estates, also all her earnings, profits in trade on her own account, tVc. This does not include gifts from her hus- band. She may also take and enjoy all the earnings of her children, by getting an order from the judge when separated from her husband, or dese rted by him or if he is confined in prison as a criminal. Alien Enemies.- -Under ordinary circumstances contracts made with or by citizens of other countries are as binding as those made by natural-born subjects in our own country. An alien enemy cannot, during time of war, make a fresh contract, or enforce any existing contract without a license from the Crown. As to contracts made before war commenced, his rights are only suspended, and the contract can be enforced upon peace being declared. It is, however, a well recognized law of nations that whenever war is declared between two ccuntries they are enemies and all contracts existing between their citizens are suspended, and all contracts made after declaration of war are void. Commerce is suspended as the manufacturers of a country might be supplying their enemies with arms and other articles that were needed at home. Corporations. — A Corporation is an artificial person created by law and really composed of a numljor of persons joined together and endowed with the capacity of perpetual succession. For the present purposes we will divide them into (1) 'I'rading Corporations. (2) Non-Trading Corporations. 'I'he former are principally Joint .Stock Companies formed for the purpo.se of carr}ing on some particular trade or business. Their charter only allows them CONI'RAC 1 S - CONSIGN r. »0 to make contracts in their own line of trade. Tliose made relative to other mat- ters would he void. Non-trading C()r[)or.itions are such as 'I'owns, C'ities, 'I'own- ships, iV'f., formed for cirrying on public business. If a Non-'I'rading cor- poration were to engage in manufacturing implements it could not n)ake a binding contracU as it exceeds the privileges granted in its charter. The general rule as to Cor|)oralion <'ontracts is that a Cor|)oration can only be bound by contra(;ts under the seal of the Corporation. The exceptions to this rule are 1. TPading" Corporations may by their agents enter into sini[)le con- tracts wiiliout seal when such contracts relate to the objects and purposes of the Corporation. 2. Non-Tradingf Corporations may enter into sim[)le contracts (without seal.) (d) In matters of trilh'ng iii[)ortance or daily necessity, e. g., the hire of a servant or su|)ply of coal. (h) In matters of urgent necessity admitting no delay. CHAPTER 4. CONSENT. 'MUTU.M. CON.SKNT — DkFINITION. .Si'Kcii'ic Okkek. ("iKNER.M. Offer. Act KIT.ANl I'.. actki'tancic kv an act. Duress. 'I'l.MK. Proposal iiv Mah,. ACCEI'TANCE HV MaIL. Mistakes. ,Cusrt)M OR L'.SACE. 1 Mutual Consent nuy bedefmed as a meeting of minds. 'I'hey must meet or be a unit on the same ihmg, else there can be no contract. The parties to every contract, however extensive or trivial, shew their willingness to make a contract by what we might term the elements of a contract, vi/., (i) Offer by one party. (2) Acceptance by the other party. Example. If A, a merchant, offers a coat to B for $10, and B .says ''I id CONTR Afl'S CONSKN'I'. ^"ii H H- will accept your ofTcr," or ollior words of similar effect, we have a contract. 'I'ljis may be done (i) Orally, hy i.peakinK to one another. (a) By writing (informal) e. g., letters to one another. (3) Formal or S[)ecialty, by writing out, signing and adding a seal to L'ach signature. 2. Spociflc Offer. 'I'he beginning of every contract is made by one person making an offer of some kind to another. This is sometimes called making a proposal. For example, -A says to B, I will sell you this horse for $100 This is an offer. B says, I will not do that but I will offer you my cow and $50 for your horse. Here we have a seconil offer. i'here was no contract in the first case as the [)arties failed to tujree. The second will be continued under section No. 4. 3. General Offer. A general offer is one made to no one in [)articular, but to every person. l')x imple, -I'roperty offered for S.ile in an advertisement or at auction. A railway or other common carrier makes a general offer to carry passengers or freight. 4. Acceptance. — The agreement or willingness of a party to take the offer of the other, expressed or written to the person making the offer, is ac- ce[)tance. In the example section 2 B has offered his cow and $50 for A's horse. It A says I will acce[)l your offer, a contract id made, Rules respecting Proposal and Acceptance. 1. 'i'he acceptance must be unconditional and identical with the terms of the proposal. 2. A proposal may be revoked before acceptance, but not after. — An ac- ceptance cannot be revoked. If the parties are contracting orally in each other's presence a proposal may be revoked wiilK»ut notice. If the parties communicate by correspondence, notice of revocation of proposal must reach the party to whom proposal is made before he has ac- cei)ted it. 3. It matters not whether the offer is specific or general the acceptance must in all cases be specific. • 5. Acceptance by an Act.— Acceptance need not always be made in words, it may be given by an act. A goes into a shop and says to the proprietor, I will give you $4 for this hat. The proprietor hands hini the hat, thus accepting by an action. A sends goods to B's house, and B uses the 11 CONTRACTS — CONSKNT. «l goods. 11 will 1)0 liaMe on an implied conlract for their price. A rctpiesls li, a wholesale merchant, to send him certain goods. It is understood or implied, though not expressed, that A will \u\y a fair market price for the goods to IJ. A proposal ne-.'d not he imdc to a specificil individiia', hut no contract can 1)0 formed until it has boon aiC(.[)lod by a spociliod individual : e. ;/., A advertises a reward of $io for the recovery of iiis lost doy -the nffor is not to any particular person hut t>) every person. If 1! Ilnds and restores the dog the contract is made and he <^ni claim the reward. 6. Duress. - It is the theory of the law that all competent i)crsonr, are free to make as many contr.icts as they may see proper, and of wliitevor kind they may desire, so long as wilhin the limits of the law, hence ii is illegal to re- strain a pers)n from making a contract, and likewise illegal to compel a person in any way to make a contract. Any contract, made because of any threat or constraint, may be voided at the option of the [)arty who has entered into it under Duress. 7. Time. — .'\n offer made orally, unless ctherwise specified, is supposed to be accepted immediately and in this case may be revoked or wiihdraNvn any time belore it is accepted. An offer may be made, however, giving time for acceiHance, if there be a specified sum paid by tiie second party as a con- sideration for the privilege of extended time. I']x.\Mi'i,K I — .\ offers to sell to Y his business for$iooo, payable half cash and half in a year's time. \ says I will give you $5 for the privilou'e of considering your offer and accepting or rejecting it any time within a week. The $5 are paid and a memorandum made and a receipt accordingly given by X. Here is a case of a conlract wilhin a contract, the consideration for the $5 beintj that V has the exclusive right to [)uichaso the business any time within a week if he elects to do so. 8. Proposal by Mail.^.\ proriosal may be made by mail or telegraph. Such offei continues valid until it is revoked unless the time prescribed foi ac- ceptance has lapsed, or there is lapse of reasonable time before acceptance. The acceptance of an offer is the consummation of a contract, hence a letter or telegram revoking it is of no avail unless received by the sojond party be fore acceptance. 9. Acceptance by Mail, &C. An offer is accepted by mail when the letter containing it is placed in the post otilicc, or by telegraph when the tele- graphic despatch is delivered to the Company, hence any revocations of an ofter must be received before the letter of acceptance is mailed or the telegram of acceptance is sent, or the offer will be enforceable. !i 3a fONIKACIS CONSKNT. KwMi'i.K. A writes to II Aiij;. 12, o(Tcrir»g him 1000 IiiisIr-Is t*f wlic.it at $1.35 per hiishcl. A writes u> 15 Aii^^ 15 revoking ihc olTcr. I( re«;cive(l the letter on llie 141!) Au^ and posted acceptance on the I'ttli and received the revocation on the 17th. IS can enforce the contract. 10. Mistake. ^VIhtc ihc panics may not have meant the same thin^ or one or both may have ft)rnicd iniiriie cunclusions as to llie siilijcl m ilier of the agreement. Where tiierc is a mistake in the terms of agreement, and one of the par- ties heing aware of the error seeks to take advantage of it, (he contrart is void. I'AAMi'i.K. — Mvery jierson making a contract is supposed to understand the meaning of the wonls he u-.es. If I inleml to order 20 iliesls of tea and by mistake write 220 chests in my letter, the party 1 order from may, if he chooses, com|)el mo to accept and pay for the 220 cliests. 11. Custom or Usagfe. -The custom at the tiiue and place where a con- tract is made lias great weight in determining llie meaning of the contract. lOxA.Mi'i.i;. A agrees to build a stone house for l> at the rate of 50 cents per perch. In Sv>mc places a perch of stone work is considered as lO'.. cubic feel of wall ; in other places 24*^ cubii- feet. If any dispute arose the t:us- tom of the locality would have to be ascertained to s-.'ltle the disputed point !iri CONSIDERATION. CHAPTER 5. DiiiiNirioN. I'komisis WrnioiT a ('(in.sii»i:ka rioN. lv\(i;i'ii()Ns. Division or C^oNsiUKUAiioNs. CiOOh ('ONSIItKKAIIo.N. N'Al.t'AI'.l K CoNSIIUUA I ION. % InsI'I I IC IKNr CoNslDKKAl ION. Ii.i.i:i;ai, Considkka i ion. Imi'ossii'.i.i. (!on>ii>I' u \i ion. .AsMCNMKN r 01 A ClIOSK IN A( HON. MoUAl. OlllKlV I IONS. I'-xia r 1 !• I) (!oNsii)i,i suretyship. I'romisks IN Consideration ok Mar- RiA(;i';. Real ICsiaie. TiMi';. ' ■ f ■ ' l*ARTi,v (1rai,, I'auii.y WkinEN. 1 Division — Contracts are divided into — (i) Oral. , (2) Written (informal.) , - • (3) Written (formal.) , . ' • : ' (4) Si)ecialty Contracts. In this chapter we will look at them as thus divided. 2 Writings, Printing, &C. — Written contracts may he written wjver, X makes a contract with Y and agrees to cut for him sixty cords of wood and Y agrees to pay him a dollar a cord each Saturday night for all cut during the week, this contract is collectible weekly. 'l"he payment is not contingent on the entire performance of the work, and is therefore severable into weekly portions 12 Liberal Construction— If a contract is so indifferently worded that it may mean cither something or nothing, the common sense construction will be placed on it to give effect to the original intention of the parties. The Court will even supply words and exi)unge inconsistent clauses to give effect to the intention of the parties at the time of making the agreement. 13 Construction as to Time— When an agreement states that certain things are to be done in a certain time the conditions must be complied with. There is one exception. If the last day of [)erlormance is on Sunday or a legal holiday, the time is extended to the day following. The day on which a document is dated is not counted in reckoning the time, but the last day of performance is counted. If the running lime is in ilays, as "thirty days afier date," the gxacl days must be counted. If ihe running time is in months. Calendar months will be counted. If there is no time menlioned in llie con- tract it is always presumed that it is to be executed forthwith or within a rea- sonable time. , . In case it is work that cannot, from the nature of it, be [)erformed at once, reasonable time would be determmed by the Court and would depend entirely on the nature of the work to be done; not on a particular person's capabilities or incapabilities for doing such work, CONTRArrs — I'AYMKNT, SKITI.KMKNT, \.'C 35 14 Construction as to Place— Contracts are usiKilIy to I)c iKTformcd where llicy arc made unless (i) The contract itself states that the performance is to be in another place. (2) In case of Real Instate. It is immovable and has to take place where the [iropcriy is situated. Contracts made at any place to be [jcrformed there must be in compliance with the laws existing in that place If they are contrary to the laws of the province, state or country where they are to be performed they cannot be en- forced though the parties live in other provinces or coinlries where the contract would be legal A contract is not com|)lete until both parties sign it, hence the place where it is assented to is the place ol perforin.ince unless otherwise specifu;d. If a contract is made by letter the place of that contract is the placj where the letter is signed that comfjleted the contract. It is of importance in case of breach of contract where the contract is made as that determines the place where the suit will be tried if it is settled in the courts. CHAPTER 9. CONTRACTS-PAYMENT, SETTLEMENT, &c. i Payment- vided, is money, wise agreed upon 1'\v.mi:nt. ("ouni kukki monkv. F()K(;i;i) N(vii;s, tSjc. PaSMKNI' in I'kOl'lCUTV. I'aVMKNT IIV No IK OK DUAIT. M.WNKK OK MaKINO l*AVMKNT, I'kksu.mi'tion ok Pavmknt. .AlM'I.ICATION OK I'aVMKNTS. I PAUIIAI. TaYMKNT. I (^oMi'osnioN l)i:iii). I Ria.KASK.S. I .Xkori) and SAri.sKAcriKiN. I MhKOIOK, j AkIJII RATION AND AWARIi. I l.KOAI. TkNUKK. * I 'I'kndkk. * -The consideration in every contract, unless otherwise pro- Every debt or obligation is payable in money unless other- 2 Counterfeit Money will not discharge any debt even if paid in good faith by one party and received in good faith by the other parly, not knowing p' 36 CDNTKACTS- I'WMKNT, SKTTI.KMKNr, \*C. it to Ijcrountcrfeil. The person rcrcivinj,' it must ntiirn it to the person who paid it to hitn within rcasonal)le time. 'l"he claim or del)t for wircli it was paid remains as before and miy Ije sued or collected as if such payuienl had not been made 3 Forged Notes, Drafts. Cheques, &C -When any of these is jjiven in payment, even in g(jo(l faith, it does not tiisrhar^e the obligation anymore than counterfeit money. .Such pai)er must l)u returned within reasonable time. 4 Payment in Property When it is so agreed, a contract or debt mny be paid in property of any kind either real or chattel. When a particular kind of property isstipulated as payment, and that kind is not given as agreed upon any other kind may be refused and the debt collected in money. If a tielii is payable in money and a mortgage or lii n is al.'-o taken as collateral security, such mortgage or lien does not cancel the debt, but in case of default of pay- ment, if the mortgage or lien be enforced and i)roperty of sutficienl value oold to pay the debt, it is discharged. 5 Payment by Note op Draft does not usually discharge the debt. It simply defers the time of payment to some future time. If, however, A would pay to H a note he held against C for goods or a debt, the note of the third party would pay the del)t. H would become an innocent holder for value of C's note, and could enforce payment against C regardless of any claims of C against A. ' 6 Manner of Making* Payments— I'ajments must be made in the way and manner provided for in the agreement. If a place of [layment isstipulated it must be made at that [)lace. Restrictions ; r< ( "ten placed as to manner of payment, such as "I'ayable only at .\'s office in p )ld coin to A personally and not elsewhere or otherwise." If X directs Y to pay a debt due him by sending the money by mail, and if V follows his directions exacUy, he di>ch:irnes the debt even if the money is lost on the way and X never receives it. The creditor's directions were complied with. If no place of payment is mentioned it is the duty of the debtor to find the residence or office of the creditor and pay it there. Pay- ment to a credit(5r's attorney, or agent, in case of a suit at law, is sufficient to discharge the debt, if the attorney or agent is specifically authorized to receive payment and give a discharge. cowTRArrs — i>AVMi:.vr, sktti.kmf.ns v"tc. .U 7 Presumption of Payment Payment may l)c presumed to have heen made under some circumslaiices unless tliere is evidence to the contrary. (i) If the document creating; the liahility is in the hands of the delitor. ExAMi'i.E— A promissory note is made l)y X in favor of V but is now in X's possession. It is presumi-d that X has paid it. (2) If an order or draft drawn on M is in liis possession, it is |)resinned that lie has paid il or dehvered the goods it (ailed for. (.^) If a dehtor has a reteii)t from the creditor the presumption is that he has paid the debt. (4) If there has been a 1,'roaf lapse of time without any demand, the pre sumption is that the debt has been paid. Twenty years cancels any debt, even if under seal. (5) Subsc(pient dealinj^s between parties rinining accounis with f)nc an- other after a previous settlement by note, the [)r€sumption is that the accounts were adjusted when tiic note was given. 8 Application of Payments— Where several debts are owing by the same person to one creditor, if all are due the debtor may direct how the money is to be applied. If, however, it is not sufficient to discharge one debt and is sufficient for another, the ('redilor may reipiire one fully discharged. When no directions are given by the debtor as to how the money is to be applied the ( reditor may ap[)ly it to any debt he jilcases, even to one barred i»y the Statute of Limitations. Incase a payment is made where there is both princi[)al and interest, the interest must firsi be paid. If any balance remains it should be applied to reduce princi[)al. • 9 Partial Payment riie payment of a smaller sum of money in satis- faction of a larger does not usually discharge a debt that is undis[)uted. A mere agreement is not sufficient to release such a person as the smaller sum was not enough for satisfaction of the larger, hence there is nothing left for a consideration for a new contract. So^ Cluipter on lleveipts and /ttlcams. 10 Composition Deed Any debt may be paid i)y a smaller sum if there is an agreement luulcr .seal to that effect, 'i'he most common case is that of an insolvent who pays his creditors at a certain rate on the dollar. The release is called a Composition Dee '. See Chapter on Receipts and lieleancs. 11 Releases Any debt, liability or obligation mav be discharged by a release under seal. In cases of this kind there may be a nominal considera- tion of one dollar or some such sum. It often occurs that if two parties have .. I' 3^ CONTRACTS, — I'AVMKNT, SETTLEMENT, &C. been running ccounts for some time and they come to settlement, though not agreeing with either of their hcoks, they give one another a mutual release each giving a nominal consideration. See form in Chapter on Receipts and Jirleases. i 1 2 Accord and Satisfaction— A disputed claim may be settled i)y accepting a less sum in satisfaction of the debt. Accord and satisfaction sim[)ly means agreement to accept a certain sum, article, service or benefit in satisfaction for a disputed claim. This differs from a settlement by compo- sition as follows; — (i) The amount of the debt claimed by the creditor is not acknowledged by the debtor but is disputed. (2) The settlement is m:\de by agreeing upon a certain sum as the amount due, which is in effect an acknowledgement on the part of the creditor that his claim was incorrect. RxAMi'iJC—X renders an account to Y showing him in his debt $60.00. Y in turn renders his account showing only $35.00 due. If they agree to settle the claim at $45.00 or some amount less than the $60.00 claimed by X, it is Accord and Satisfaction. I, 13 MergeP is the extinction of a lesser security in a higher security, e. g. where two parties have entered into a simple contract (not under seal) and afterwards enter into the same contract under seal, the simple contract merges in the specialty contract. When a security und'ir seal, such as a mortgage is taken in payment of a debt it is called a Merger, because the lower form of security, such as note or book account, is merged into a higher form of security. A mortgage taken as a collateral security does not merge the debt. A judgment is a higher form of security. A note or bond that judgment has been given on, is merged into a judgment, and is no longer binding as a note or bond. 14 Arbitration and Award— I", cases where there is a dispute as to the amount due on a contract the s<:ttlemont may be left to persons chosen by the parties, for that pur[)ose. The disputants usually choose one each. If tliLise arl)itrators fail to agree they choose a third party to help them. The decision of the arbitrators is called an Award and is binding on the pnrties so long as the arbitrators have kept within the limits prescribed for them. In large contracts of building and other work it is usual to specify that the value of any extras is to be settled by arbitration. The Architect or Engineer on the work is sometimes sole Arbitrator. CO.VTRACT;-;— RICIITS, DEFF.NCr.S, i^'C. i^ 15 Legal Tender is an attempted performance of a contract. Is is of two kinds, (i) An attempted performance oi'a promise to do something. (2) All attenii)ted performance of a promise to pay something. 16 Tender is an offer of money, services, pro[)erty or goods in satisfaction of a debt. In case of goods, property, t^vc, it must be the goods or property specified in the contract. If tlio contract is not payable in money and dons not call for goods, etc., it is payable in money, and money — legal lender — Dominion (Government Notes or (lold — must be offered without condition ex- cept that of discharge of the debt. Tf money or goods be tendered it must not be withdrawn but be delivered when required or paid into court if nec- essary. Tender operates ( 1 ) To stop interest at the time of tender, and (2) Tn prevent thf; person tendering from being held liable for law costs, in case of suit on the debt. The Tender of money or goods does not cancel or discharge the debt, nothing but the payment of a debt discharges the obligation. CHAPTER 10. CONTRACTS-RluHTS, DEFENCES 6iC. RiC.IITS, JUIHIMKNT. COMI'KNS.XTORV DaMAC.KS • ' Nominal DAMAfiKS, '.KjUIDATKI) DaNIACKS. Si'IXIUI.ATIVK DaMACKS. ' KxEMI'I.AkV DaMACES. KXKCUTION. • iNJUNCriON 1)K1'KNCK.1. ' . I'KKI'OKMANCK. NoN-l'i;Ul()KM ANC K. STATUrK OK l.lMll AI'IONS. . S!.;r Oik Rl'.CE.SSIiJN OK CONTKACTS. 1 Rights —Whenever a contract has :)ecr. made, each ot the parties has acquired son, ,■ right under it. .'. agrees to cw twf Pty cords of wood for 15. In return B promises to allow A lO liv«; iv x housj of his for a year. I) has a right to require the wood to be ci:f .or hiir, and A has acfpn'red a right to live in B's house. If either party refubCb \n p ;fforn) lis part the other may sustain 46. CONTRACTS— RIGHTS, DEFENXES, &C. ': k loss on that account, hence one would have a right to damage from the other. Such rights, when enforced at law, are called remedies, of which there are two classes. (i) Penal. (2) Civil. The first is dealt with by government, the Queen being the plaintiff, the latter kind, only, is dealt with here. 2 Judgement - When a contract is broken the value of the injury to the party willing to fulfil, may be proven in court. The decree of the court order- ing the party in default to pay a sum of money to the other party, is called a Judyinent, sometimes called a Cnnlvdct of Record. The certain sum ordered to be paid is called Pamagcs and is estimated by jury in view of all the facts of the case. 1 )amages are of various kinds. (1) Compensator!/ Ddinnxjes, being the value of the actual loss sustained by th:.> person injured by the breach of contract. (2) Nominal Damages, where the breach of contract resulted, not from unwillingness to perform, but from inability. (3) Liquidated Damages, where the amount is agreed upon be- forehand by the parties should damages be awarded. The court settling who is liai)le for the c^amages. (4) Specnhitire Damages, where the profits in a certain business or trade expected to result from goods bought under a con- tract can be estimated they may be recovered as speculative damages. {5) Exemplary Damages. When a person has wil'fully and maliciously committed a wrong, damages much greixter than the monetary value are sometimes granted by way of punish- ment. I'his is sometimes called "smart money." 3 Execution — If the amount of damages is not satisfied within the time set in the judgment, a written order is given to the sheriff by the court to seize and sell the property of the person against whom the judgment has been given. If property caimot be found to satisfy the debt, the debtor himself may be brought before the court and examined as to his property. (If he has none he is ordered to pay a sum monthly, or weekly, according to his earning power.) This power, however, is limited to certain courts. The courts of Manitoba do not now direct payment of a weekly or monthly or other sum towards liquid- ation of a judgment debt. Formerly it was so in the county courts, bi'l that power has been abrogated. CONTRACTS — RIGHTS, DEFENX'liS, &C. 4f |e time seize Igiven. lay be >ne he )wer.) [ba do liquifl- 1: that 4 Injunction— In case a person is doing something he has agreed not to do, or is infringing on rigiits of otliors, an order may l)e given by the court restraining such a person from continuing such a course of action. 'This order is called an Injunction. 5 Defences— In any suit for breach of contract it very seldom happens that the wrong is ail on one side. The person against whom the action is brought— the defendant— usually has some plea to set up against the claims made against him. . 6 Performance— 'I'he defendant may set up a defence that he has per- formed his part and that the other [nny refused to acce[)t it. In order that such performance be a valid defence, it must Inve been completed according to the terms of the contract in style of w,ir'r:mxnshi|), materials and time, and in case of personal skill, performan :e by a substitute would not fulfil the con- tract. • 7 Non-Performance may be excused when it is caused ;-- (i) By the act of (iod, that is; such as lightning, earthquake, inun- dation, fire, or any accident from physical causes, or the death of tiie person. (2) By public enemies, that is; foreign enemies, armies, etc., of a hostile country in case of war. This does not apply to rob- bers or theives, resident within the country. 8 Statute of Limitations— The law allows certain time in which to ^01 ' ( <: debts — six years in most cases for notes and book accounts, ten and ti'-:.i!ty yfiat-s for contracts by deed. If a debt is barred by the statute limiting \ . time in which it may be collected, it may be a good defence in such a suit. 9 Sit Off — ^Vherc a person is sued for some debt or claim it very often hn.ppens that he has some counter claim against the person instituting the suit against him. Such counter claim, or contra account, loss or damage may be entered by the defendant, and if found correct by the court, will be deducted from any damage proved l)y the one entering the suit. 10 Recession of Contracts When one [)any is bound to do'some act. or thing before the other party performs his part, if the other party utterly fails or refuses to perform his part, which is a condition precedent to what is to be done by the second parly, the second [larty may rescind the contract, as tiie purpose of the contract has utterly failed. He cannot rescind part and con- sider part binding. In case of rescinding a contract on account of fraud, the party rescinding must be without fault. 3l.l>. •*.*,' himm 4i CONtRACrS. THE STATUTE Of LI.\fITATroNS. CHAPTER II. 1. 1 A i t STATUTE OF L!'"TATIONS,i Limitation. Rkasons. l^XCKl'TION. The Time. Ti.MK Bkcins to Run. ICXCKI'TIONS as to TiME. Change ok Ownership. * Mktension ok Time. New Tromise in V/riting. Partial Payment. 1 Limitation — In the section on Presumption of Payment, one of the presumptions that a debt was paid was a long lapse of time without a demand of payment. The statute limiting the time when an action at law may be commenced for the collection of a debt or claim is called the Statute of Limitations. It does not cancel the claim but it takes away the remedy for the recovery of the debt at law. The obligation to pay remains the same but the power to collect is removed. 2 Reasons— (i) Old claims are supposed to be doubtful or ill founded. The presumption is that if they wore good and just, they would be paid or en- forced within reasonable time. {2) The law is said to detest litigation and hence the law quieting old claims. It is thought inexpedient and unjust that a person should be troubled with an old stale claim after years of silence as to the collection of it. 3 Exceptions — The limitation does not extend to Bank Bills or Bank Notes, Bank Deposits and other evidences of debt issued by banks. They are never outlawed by lapse of time. It does not apply to capital in a partnership or Joint Stock Company or to Dividends or profits earned on capital invested 4 The Time — The time within which a suit must be begun on all specialty contracts, which includes bonds, leases, agreements under seal, etc., is ten to twenty years. Actions on verbal or written contracts not under seal, notes, book accounts, &:c., must be commenced within six years after duedate. Actions for penalties, damages, etc., must begin within two years after the cause for such|action arose. The contracts under seal are considered much more solemn and are supposed to be entered into with deliberation, hence the longer time if * CONTkACVS. THE STATUTE OK LIMITATIONS. 4i le of the a demand w may be Statute of •medy for the same given for the release by the statute. After the debt has run the time set forth ill the statute it is said to l)e outlawed. In Ontario liic time for beginning an action on a specially contract usually is Twenty years. In Manitoba tlie time on all specialty contracts is fixed at ten years. In Ontario the time, on certain specialty contracts respecting real estate, is limited to six and ten years, so that the titles of land may be (juieted within reasonable time. (See R. S. O. Chapter in.) Section 4 provides that no person shall bring any action to recover land or rent but within tkn years after the right to br ing the action first accrued to some one competent to enforce it. Section 16 provides that no arrears of dower shall be recovered by any action for a longer period than six years prior to said action. yVny action must l)e brought within ten years from tlie death of the testator. Section 17 provides that no arrears of interest or of rent or in respect to a legacy shall be recovered by any actio.i but within si.c years ne.xt after the same has become due or after an acknowledgement thereof 5 Time Begins to Run when a debt is due. A suit may be entered for the collection of a claim, note, debt or demand the ne.xt day after it is due, hence the time of limitation begins to count the day following the due date. In promissory notes, bills of exchange the next day after the last day of grace; in accounts the day following the due date of the last transaction, either pur- chase or payment. lis or Bank They are partnership [1 invested hi specialty is ten to teal, notes, |te. Actions cause for lore solemn anger time 6 Exceptions — (i) Where there is a disability on the part of the creditor and he caimot sue the claim when it is due, the time begins to count when the disability ceases. Examples; persons under 21 years, insane, &c., on the infant's coming of age or die insane person's becoming sane, the disability ceases. This disability must be in existence at the time when the del)t be- comes due. (2) When the debtor lives outside of the province or stite at the time when the debt is due, tlie six to twenty years, as the case may be— begins to count at the time of his return. , 7 Cliange of Ownership —A change in the ownership of the claim does not extend the time. If X has a claim on a note against Y four years overdue, and transfers it to 7., it will be outlawed two years after Z becomes owner, just the same as if X was still the owner. p ■nw iill '■'Ji m i i\ 4\ CONTRACTS— t)RAWr\0 ANT) EXKCUTfON. 8 Extension of Time— A debt barred by the Statute of Limitations may be revived (i) By a new promise to pay it in writing- {2) By partial payment. In some of the States a verbal promise to pay the debt is sufficient to re- vive it. Such is not the case in Canadian Provinces. In no case will a simple acknowledgment of a debt operate. There must be a direct promise to pay it. 9 New Promise in Writing*— A new promise in writing to pay a debt barred by the Statute of Limitations will revive it for six years from date (in case of negotiable paper, from due date,) of such promise in writing or ten to twenty years if the writing is under seal. As noted in a former section, the stat- ute does not extit\.' ti the del)t but simply suspends the means of collecting it, hence the old debt is a valuable consideration for the new promise to pay it. 10 Partial '^'Vm* l -A voluntary payment on account of either prin- cipal or interest 01 botli, of a debt barred by the Statute of Limitations re- vives it for six years from, date of such payment. Such payment must, [i] Be understood to be on account of the debt, or [2] Be applied by the creditor on ouch debt when received from the debtor without instructions as to how it is to be applied. This voluntary payment on account of the debt is an acknowledgement of the correctness and validity of the claim by the debtor and of his willing- ness to pay it. CHAPTER 12. DRAWING AND EXECUTION OF CONTRACTS. 'Dkfinition. Drawing ok contracts. Pkscrii'iion ok Parties. TllK SUINATURK, Thk Skai.ini;. " THK VVlTXKSS. . • . Si(;xiN<; HV A X M\RK. RkADINC. AM) KXI'I.AININC. Erasi'kks ani> Corrkctions. Narious Shkkts. Variols Documkntp 1 Definition— The drawing of a contract is the composition and writing of the terms and conditions to be contained in •'.. The execution includes the signing, sealing and delivery of the document. The principles stated in this chapter apply not only to simple written contracts but to all formal specialty contracts, such as deeds, mortgages, discharges, etc. CONTRACTS- DRAWING AND KKKCUTFON. 45 2 Drawinff ContPactS— In drawint,' up contracts of all kinds it is necessary to be very definite, not only in all the terms and conditions of the agreement, but to have a proper description of the parties to the contract. 3 Description of Parties -A proper description will comply with the following points; — [ij The full name ofthc i)erson. If he has half dozen names before the surname, include all of them. [2] The smallest corporation or municipality in which lie resides, which will be, — , [a] A Township, or [h] A Milage, or [f] A Town, or [d] A City. [3] The county in which the municipality is situate. [4] The Province or State containing the county. [5J The person's occupation or calling. In case he has no particular trade or business he is usually called a "gentleman." [6] The pni't he takes in the agreement. The person agreeing to do work or to sell an article is usually the party the first part, and the party paying, the party of the second part. 4 The Sig'nature to every contract should be in presence of a witness who i? not interested in the contract, and the witness should sign immediately using such words as "Signed, Sealed and Delivered in the presence of W. J. Wilson." If the document i'-- already signed the person may acknowledge his signature before the witness. This will do as well as seeing it signed. He will acknowledge in such words as the following "I acknowledge the signature to this document to be my act and deed. 5 The Sealing" — All contracts of importance should be under seal. After signing, the {)erson should place on the docmncnt after his signature a seal, or if the seal is already there, he should touch the seal and in either case re- peat some such words as "This is my act and deed,'' or " I acknowledge this to be my hand and seal." It is proper (or the person signing to indentify his seal permanently by putting his initials on it with pen and ink at the time he signs his name. -TwmTtufMirwirai 4''' Cf)NTKAC IS DKAWrNC AND i:\l.(UIION. 6 The WitnSSS— The witness should be, — [i] A disinterested person. [2] Of sufficient age to understand what he is doin.5. He should exercise j^reat care, es[)ecially where the person executing tlie document cannot read or write. In all documents to i)e registered, such as Deeds, Mortgages, Jiills of Sale, etc., it is necessary for ihe witness to verify his witnessing and signature ".)y an aftiJ^ivit whicn may be written on or attached to the document. If two or more witnesses are for different signatures an affidavit for each must be attached. 7 Sigrning" by a Mark — If a*party cannot sign his name he should rc- qxu'st some one else to do it for him. The first name should be seperated from the surname sufficient to allow a mark to be placed between them, thus; bis ^ , John X Wil.son. mark • The person signing must make the X mark himself, or at least touch the pen when it is being guided for him to do it. No matter how simple the agreement signed by an X mark there should be a witness to it. 8 Reading' and Explaining— When a person who cannot read is executing an instrument it must be read over and explained to him in presence of the witness so that he fully understands what he is doing. The witness in signing such an instrument should write such words as the following over his signature: "Signed, sealed and delivered, after having first been read over and explained, in the presence of John F. McBride witness." This furnishes evi- dence that the maker of the contract was given an understanding of what he was signing before it was done. 9 Erasures and Corrections— should be made before the execution of a document. If it is necessary to make any erasures or corrections in any instru- ment, do not use a knife or rubber or anything that will disturb the surface of the paper; draw a line through it with [)en and ink. If one or more words have to be interlined between either print or writing use a caret to show where they should be read in. . The jw/fnes.s' should put his initials on the margin opposite every such erasure, correction or interlineation to indicate that all corrections and changes were made before the executing of the document. If there is any consider- able change made the witness Khould state the number of words inserted or left out at each place with his initials. KORMS OK COVTRACrS' 47 10 Various SllBBtS. — When a (lociinient is written on two or more d-- tached sheets they should be fastened toi^cthcr and paged before they aie signed. Sometimes the fastening is done with a ribbon and a seal put over the tie of the ribbon. Sometimes the witness places his initials on each sheet and mentions the number of sheets with his sigrature. 11 Various DocumsntS— If an agreement is composed of two or more documents they may be marked A. />. C D. etc., and referred to as Schedule marked A., Schedule marked B., etc. Example — A contract for building a house might be a short form with plans marked A. and specifications mark- ed B. attached and really firmin:; a part of the agreement. On each separate Schedule there should be an identification indicated by the witness similar to the following: — "This paper writing is Schedule .\ referred to in clause no — of agreement made between X and Y on Jan. 2i6t 1898." GENERAL FORM OF CONTRACT. Memorandum of Agreement made and entered into this 22nd day of January, A. D. 1897, Between John J. Cooper, of the Town of Listowel, County of Perth and Province of Ontario, Student, of the first part, and lames Coghill, of the Town of Listowell, County of Perth and Province of Ontario, Tailor, of the second part. WiTNRSSETH that the said parties hereto do hereby mutually consent, promise and agree to and with each other in manner and form following, that is say : I. That S:c. (Iiei'e odd the particular agreement entered into between the parties) As Witness the hands and seals of the said parties the day and year first above written. Signed, Sealed and Delivered f . John J. Cooper (I, S) in the presence of I James Coghill (L S) Henry Brown CONTRACT TO BUILD A HOUSE. Be it rememmkred that on this day i6ih day ol uiary, A. D. 1897, it is agreed by and between A. B., of the village of AUenlord in the county of, Bruce, province of Ontario, (lentleman. and C. 1)., of the village of Hepworth, in the County of Bruce, aforesaid Con- tractor in manner and form following, vi/ ; The said C. D., for the considerations hereafter mentioned, doth for himself, his executors and administrators, promise and agree, to and with the said A. B., his executors, and administrators and assigns, that he, the said C. D. or his assigns, shall and will, within the space of two months next after the date '{: : I I i t \ il 48 Nr,f;nTiArii.K papkr. hereof, in good and workmanlike manner and according to the best of his art and skill, on Lot 4, Scrope Street, in the town of Parry Sound, well and sub- stantially erect, huilt, set up and finish one house or messuage, according to the draught or scheme and specifications hereunto annexed and marked A and H, respectively, and to com[)ose the same with suc^h stone, brick, timber hardware, i)aint and other materials as the said A. B., doth or his as- signs, shall find and provide for the for the same: in consideration whereof the said A. B. doth for himself, his executors and administrators, promise and agree to and with the said C. I )., his executors, administrators, and assigns well and truly to pay or cause to be paid, unto the said C. I\, or his assigns the sum of $900,00 in manner following, that is to say , the sum of $300 wiien stone and brick work are completed; the sum of $300 when plastering and carpentering work are complete, and tlie sum of $300, thirty-one days after the work shall be- completely finished; andulso that he the said A. 15., his executors, administrators or assigns, shall and will, at his and their own proper expense, find and provide all the stone, brick, tile, timber, and other materials necessary for building the said house. And for the performance of all and every the articles and agree- ments at)ove mentioned, the said A. B. and, C. 1). do hereby bind them- selves, their executors, iVc., each to the other, in the penal sum of $400. firmly by these presents. In witness whereof, the parties hereto have hereunto set their hands the day and year first above written. E. F. fA. B. (L. S.) • ■ Witness. \C. L). (L. S.) CHAPTER 13. NEGOTIABLE PAPEP. l)Hii>:niON. Cl.ASSl'S OK NllCiOTIAI'.I.K I'APER. 'i'lii': Paktiks. Thk 1'kin( ii'AL Dkhtou. 'I'm; Si'KKiv. I)a\s ok (Irack. MArLi35-5o- ■ ■ ■ ' St. C.'VTHarines, Jan. 18, 1897. Sixty days after date we jointly promise to \yAy \Vi 1.1,1AM RoiiER'i'soN, or order, at his offico, ij One Hundred, 'i'liirty i'ive I'u", Dollars. \ 3 N'alue Received. Thomas Wilson, Henry Mandkrs, - » :zzzzxzzxxxxzzzzxzixxxxzxzzzizxxzzzxzxzzxxxxzxzzxizx:nzzzzzir:zxzzxzzzzzzzzzzzzizxzzixxxxxxzzzzzx:czzjz: 13 Joint and Several Note is one in which the makers agree to |)ay it jointly, and each one severally [jiomises to ])ay the whole note himself if neces- sary. A suit at law to recover |)ayment may be entered against any (jiie of the parties or against each one separately or against all jointly. n UfiCdTlAfiLE PAPfek— SPfiClAL NOTfeS. SS The following is a common form : (|xxxii:xzizxzzxzxzxzxzxxzzzxxzxxxxzzi2xzxzzzxzxxzixzxzzizzxxxxxzxixzxxxzxzxizxxixx:xzzxxxixxxzxixzi:iiiz $165.25. CoLLiNowooD, Jan. 26, 1897. Sixty days after date we jointly and severally promise to pay George Roc.ers, or order, at the liank of Toronto, n One Hundred, Sixty l-ive iVo I dollars. Value Received. , H.J. Hiix, J. J. WlTIIROW. Ezzn:zzxzzzzzzzzinixxzzzzxzzzzzzzzz]czzizzzzzzxzxzzzzzzzxzzxxzzzzzzzzxzxxxxzzzzz:tzzzzxzzxzzzxzxxzzzzzt 14 Various Forms of Joint and Several Notes— The same thing is accomplished by using the words "we, and each for himself promise to pay, etc' A joint and several note may also be made by drawing the note '' 1 [pro- mise to pay." When two or more persons sign a note of this kind each one becomes a principal debtor for the whole amount. 15 IntePest-bearing" Notes — if nothing is said in a note regarding interest, no interest can be collected on it for the time it runs, — from its date to maturity. If it is not paid when due, Six per cent, interest is collectable for the time elapsing between the due date and the date of payment. A note may be drawn, (i) Two bear a certain rate from date till paid. To effect this a clause similar to the following should be inserted: "With interest at Eight per cent, per annum, from date as well after as before maturity and until paid." (2) To bear different rates before and after maturity, the interest clause should read as follows: "With interest from date till maturity at Eight per cent, per annum, and twelve per cent, per annum after maturity till paid." (3) To bear a higher rate after it is due than six per cent., insert a clause as follows: "With interest after maturity until paid at one per cent, per month." 16 Legal Interest— In many places there are laws prohibiting lenders from charging a rate higher than fixed by law. In Canada, the legal rate is Six per cent. This is only a provision enabling any person to collect six per cunt, on a debt or note after it is due, where no agreement has been S^' NfiGOTJAliLE PAI'ftR— SPECIAL NOTES. made regarding interest. This is only ehargeal)le on negotiable paper from its due date and on aceounts from tlu- date on whieh they are rendered. 'Ihe law does not provide that no higher rale can he agreed ui)on. (^n the contrary, two |)ersons may agree as to any rate between themselves and the law will not interfere. The price of the use of money (IiUerest) fluctuates according to, and depending upon, (i) The value of the use of money. (2) The supply and demand. (3) '!"he value of the risk of losing it on account of poor security. In Ontario the debtor must have notice that interest will be charged on an overdue account or it cannot be collected in Division Court which is commonly called "The poor man's court". It is necessary to prove in court that notice has been given ; and interest could only be collected from the date notice was served. 'I'his applies only to accounts and not to negoti- able paper. CHAPTER 15. SPECIAL NOTES. ; Accommodation Notks. I'ORM OK Accommodation Note. AcXOMMODAIlON NoTES I.IKE ( !usTOMERS NOTES. ('ustomers Notes, vs. Accommodation Notes. l-LiEN Notes. [•'OKM.S OK I>IEN. AuTHORii'v I'OR Liens. Provisions o>' ihe .Xtr. The Lien Noie Law in .\L\nitoi!A. 1 Accommodation Notes X\'hen one person lends his name to another to enable the second |)arty to borrow money on the strength of the financial standing of the first jjarty, the note thus made is called an accommodation note. If Alex. Wilson is going to lend his name to 'I'hos. Woolfe, Thos. Woolfe makes a note in favor of Wilson, and Wilson writes his name across the back of it (indorses it) thus : — ,, ,, ^^^ , . NEGOTIABLE PAPER.— SPECIAL NOTES. 57 2 Form of Accommodation Note- |,iiiiiiit>ii riiiiiiiiiii«iiiiiiiiiii>iiiiiii: iiiiiiiiiiiiiiiiiiiiiiiiiiiiiii r iiiiiiiiiiiiiiii'iiiii«iiiiiiiii|i ii^nmuil (Back of Note.) *4>Jtl|n|!l|ri|ll|ll|ll|ll|ll|l'rill|II|l||»|lil|||l|l||l||l4l«ll'>l'tlf|lllM|ll|ll|n|''|>l|^|l|;|ll|ljn|ii|ll|li|il|ll|!l|l!|. |1|ii|l||l1|<|l!|ll|ll|ll||l|ll|(!|ll|!l|ll|-;| )|II|II|I'|I^ is i , !§ ■ . ' I i ' ^ ' , i !Rllilll|:'l. I'|:i|.ill:|i:l»|ii|li|ii|li|ii|i|,'i|li|li|ii|ii|,i|ii|ii|if|ii|n| |iiBi|ii|<'|iiliiliJ|ii|ii|liril>i|ii|llli!|il|lilllln|ll|ri|illl.|'lllllillllll|iilli|'llli|li|li|il| :|li|ll|»llllli|ll|i!|i||li|llliil - ■ It will be noticed that the al)ove form does not differ from the ordinary note. It is easy for Mr. \\'ilson to write his name there hut not so easy to pay it should Mr. Woolfe fail to ])ut up the necessary amount. The accommo- dated party is the princijial debtor, hence he should pay the note at maturity. The holder may enforce payment by the indorser but the accommodated per- son cannot enfoce payment from the person lending his name. 3 Accommodation Notes like Customers' Notes- Sometimes Accom- modation Notes are made in such a way as to show the person lending his name as the {)rinci])al debtor and the person borrowing the money as the surety. In the case of \\'ilson and Woolfe in the former section, the places would be reversed, Wilson signing the note as maker and principal debtor, and Woolfe endorsing it and borrowing money on it by discounting it like a note received in the regular course of trade from one of his customers. This plan is sometimes adopted to keep the banker in ignorance of the fact that he is discounting accommodation paper and of the fuiancial circum- stances of the borrower, 'i'his is usually nn unwise proceeding, as the banker 58 NEOOTIAIU.K PAPER. — SriCCIAF, NOTES. H a could srarccly be cxjK'cted to help a ])erson tlirough "a tiglit place" with a tL'm])orary loan if he had been kept in ignorance as to the real nature of former transactions. A business man who is always ])erfectly frank with his banker, can e\i)ect financial assistance in time of neetl. 4 Customers' Notes, vs. Accommodation Notes I'he indorsement of customers' |)aper is wry different from intlorsing accommodation paper. \\'hen you indorse your customer's paper, you get the value of it from the bank, and use it in your business paying liabilities or buying goods, and you a'^e really not running any additional risk - you have already incurred the risk of losing when you made the sale to your customer. W'iien you lend your name to another on accommodation paper, ist, you get no value, and, 2nd, you incur a liability to pay it. 3rd, you place the con- tingency of loss altogether in the hands of a third party, and altogether beyond your own control and management. Hunilreds of men are ruined financially every year by this simple process. 5 Lien Notes A lien note is one tliat is given for some arti<-le which is being purchased, but where the Oirtiership of the article docs not pass to the person bu\ing until all ])ayiiients have been made. The ])urchaser, however: has the use of the article and is given possession of it. N.ii.- Lien Notes have been held not to be promissory notes nor negotiable instruments. Receipts or agreements sometimes take the i)lace of notes. Occasionally both a lien agreement and a lien note are made. Lien notes are in common use among the agents of manufacturers of organs, pianos, sewing machines, agricultural implements, machinery, etc. 6 Forms of Lien Notes Form paj able in monthly instalments. ^I'li'lkli lnlillil'4. r'li'lnlillirll.l l.'l 'I Tli IJ i I I 1. 1 |.i: I I' I l"l ri i. IhI |i:ll.|.>|r|'i|ll|lllli|.!|il|:i| .lilllilnlnlijllli |ii|uri|i:l 1. 1 |i lll<;| I. |.'|.l|rl:i|:.l^ z $3°-oo . No. 36275. : 2 LisTowi'.i,, Ont,, Jan. 28, 1895. I 2 On the 28th day of each month hereafter for Six Months * ? cjnsecutively, I promise to pay to Micssus Bonni:tt & Bowver at Z - their office the sum of Live Dollars, the whole amounting to Thirty 2 Z Dollars, tlie first of sucli payments to be made on the 2Sth day of Feb- Z Z ruary next. Interest to be paid at tiie rate of Ten per cent, per annum. ; ; 111 tlie I'veiit of Sale or otlier disposal ol my iaiul or peisonal property, iir of - Z d«'l;nill in iiiaiiinj^ any ol liie abovo p.iynieiits at tlie time mi'iitioned, the whole - ; amount of this Note siiall tlioroiipon liecome due ;iik! p.iyable forthwith. The - ; title and rig'lit to the possession of the property for which this Note is given, r 2 One "I'orest King" Cooking Stove No o> manufactured by VVm. Copp, of ; ; llamillon, shall remain in HoNNKir & Bo\vyi-;R until tliis Note or any renewal ; 2 thereof is fully paid. - I Witness, 1). Harder. Tiio.m.vs Wilso.n. i ^llllMUlUl lil:|'|i l"|i|/|.l|l'|l»:|ii| |.| L l^ .|m|,.|:,|..|:<|, | || J ■< |. |U|||| lli|lll< |N|l|||'||||,.|jg NEr.OTIAIiLE PAPER — SPECIAL NOTES. Form of ordinary Lien Note : 59 VtH |ii|!i|ll|i'll>|ll|liri|l l<:|l:»t|l:|!i|l>rtll|n|l'|it|i I' l"l"ll l'i|i'l''|IJ"l>'l"l< I 'I'll I 1. 1 |i I 'lc| i|' I lij .1 Jl IJ II ir l:|:ill:|:i|:!r!lij I'llillillllliltlllllilliiniiir lli|il|il|n|ll|:'llillil.'llllllli'lll|tlllliil'l|ill»llll; |r|li|ii|l,l:i|«|Hi,|i.ll!|ii|(i|]i||||i||iA 7 Authority for Liens— On the first day of January, i889,an Act l)assed in the session of the Ontario Legislature for 1888, came into force; we give a few of the principal provisos: — Sec. 1 provides that the note, receipt or agreement in writing will hold the property in the case of manufactured goods and chattels, even if sold or mortgaged by the purchaser to other parties, if the name and address of the seller is painted, printed, engraved on or attached to the article. Sec. 2 provides that the purchaser is entitled to full information as to his claims within five days of his asking for it. Sec. 4 provides that goods re-taken by the seller may be redeemed, by the purchaser paying arrears, interest and costs within twenty days from the time possession was re-taken. Sec. 5 provides that if goods worth $30 or more are re-taken, five days notice must be given the purchaser before they are sold. Sec. 6 and 7 provide that this Act shall not apply to ordinary household furniture; it will apply to organs, p'anos, sewing machines, implements, etc. and that a copy of the lien may be fylcd, at a cost of ten cents, with the Clerk of the County Court. Sec 8 requires the seller to leave a copy of the lien with the purchaser of the article within twenty days. 6o lUI.LS OF KXCHANCE. i 1%'} Is (if ' I 8 The Lien Note Law of Manitoba— The law regarding Lien Notes for the Province of Manitoba is different from that in Ontario. "The Act respect- ing Lien Notes" Revised Statutes of Manitoba, Chapter 87 is subjoined as follows; — (i) This Act may be cited as the "Lien Notes Act." (2) On and after the twenty-seventh day of July in the year one thousand eignt hundred and eighty six, receipt notes, hire receipts and orders for chattels given by bailee of chattels, where the condition of the bailment is such that the possession of the chattel should pass with- out any ownership therein being accpiired by the bailee, were and shall be only valid in the case of manufactured goods or chattels which at the time the bailment is entered Into, have the manufac- turer's name printed, painted, or stamped thereto; and no such bailment shall be valid unless it be evidenced in writing signed by the person thus taking possession of the chattel 46 V., c. 32, S. L. (3) Every manufacturer and his agents shall forthwith, on- application furnish to any applicant full information respecting the balance due , on any such manufactured goods or chattels and the terms of pay- ment of such balance, and in case he or they refuses or refuse, neg- • lects or neglect to furnish the information asked for, such manufac- turer or agent shall be liable to a fine of not less than ten dollars not more than fifty dollars on conviction before any justice of the peace. CHAPTER 16. BILLS OF EXCHANGE. i r PkI'INIIION. An Inland Bill or Dp.ait. A Fokki(;n Bill. A Chk(juk. Division as to Time. -{ The Demand Drakt. Thl Drawer, • ' • The Drawee, The Payee. The Sioht Drakt. Acceptance (Ieneral, Partial, Qualieied. Foreign Bills in Sets. 1 Definition — "A Bill of Exchange is an unconditional order in writing addressed by one party to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or deter" BILLS OF EXCHANGE. 6l tes for ^spect- ijoined lousand i orders » of the ss With- ere and cliattels iianufac- no such edby the . L. pplication Llance due t»s ofpay- efuse, neg- h manufac- doWars not the peace. tALIFlED. ier in writing it, requiring ixed or deter- minable time in the future, a sum certain in money, to, or to the order of a specified person, or to bearer." Bills of exchange have been divided into three classes : — Inland Bills, commonly known as Drafts ; Foreign Bills, commonly known as Bills of F^xchange ; ChcHjues on Banks or Bankers. 2 An Inland Bill op Draft is one that is drawn and payable within one country ; for example, X of Chicago draws on Y of New York for $600, or A of Toronto draws, on B of Hamilton for $125. 3 A Foreigrn Bill is one drawn in one country and payable in another A in Toronto draws on B in Paris, (France,) for 6500 francs. Bills of Exchange, (P'oreign Bills,) are usually drawn up in sets of two or three. The ori'^inal being called the "i-'irst of Exchange'' the copies being called the Second of Exchange, 'I'hird of Exchange &<:. 4 A Cheque is a Bill of Exchange in form and effects, drawn on a bank or banker. It is drawn without mention of time of payment, consequently and by usage, is payable imiviediatcly. 5 Division as to Time— Drafts may be divided into four kinds, accord- ing to the w.iy in which the time they have to run is counted, and the due dale ascertained, as follows: — (i) Demand Drafts. (2) Sight drafts; (3) Drafts payable a specified time after sight; (4) Drafts payable a specified time after date. 6 The Demand Draft is one drawn payable on demand, that is, when ever it is presented. »xnn:zxxzxzzzxzzxxzzxxxxxixxzxizzzzixzzizxzzxzxzzzxxxzxzzzzzxzzzzzxx:Ezzxzzxzxzxxxzxz]:i:czzi::z:zxz2zzxzu $62.24 Dover, Ont. Jan. 15, 1897. On demand pay to the order of J. W. Masson, at the Traders I i I Bank, the sum of Sixty Two ,-„',, dollars, value received, and charge to \ i the account of To Henkv Swii'TKoor, Colborne, Ont. J. W. Frost. S IZZZUIZZXZXXXZXXXZZXXZXXZZZZZZZZZZZZZXXZXXXXXXZXXZXZZZXXXZXXZXXXXXXXIZXXZZZZZXZZZZZZZZZZZZZZZZZZZIZZXZZ The above draft is payable on presentation. There is no time for it to run. It does not require acceptance; I i: 62 DILLS or EXCHANOE -ACCEPTANCE. 7 The Drawer is the name given to the person who "makes" or "draws" the draft. The party who signs his name at the bottom in the above draft, J. W. Frost, is tlie drawer. 8 The Drawee is tlic party on whom a draft is drawn, or to whom it is addressed — thai is the person who i)ays it. In the above demand draft, Henry Swiftfoot is the drawee. The Drawee's address should always be on the draft so that the IJanker may know where to present it for acceptance and payment. 9 The Payee is the person in whose favor the draft is made. 'I'he per- son that receives the payment, J. W. Masson in the aljovc demand draft, is the payee. 10 The Sight Draft is one that is drawn payable at sight. It is not payable immediately, as is the demand draft. There are three days of grace, after acceptance, before it matures. i i - I iHi: I FORM. axxxTmmmtxmzxmzxzmmKii tx iu uzxxz x ixitxtiti z m zzxxKtxxxmxrxm $<'^f>.4o Barrik, Jan. 30, 1S97. At sight pay to the order of Joseph Lang at the Merchants Dank, Darrie, the sum of Eighty Six /o"„ Dollars value received, and charge to the account of John RuTiiKRKOki). To J AS. H. Little, Ivsq., j Meaford, Ont. (zxzz3zzzzzzxxzxxxzzzzzzxzzuxzxxxxxxzzxxzizzznzzzzxzzzzxzznzxxzzuxzzznz:txixxizr The above draft was drawn Jan. 30th. was accepted Feb. 4th and would mature Feb. 7lh. 'I"he three days of grace count after the date of the acceptance. 1 1 Acceptance GeneraL A Bill is said t;i be accepted generally when the drawee agrees to all the conditions in the bill ; an acceptance that changes the place of payment is not conditional, but general, lixample of General Acceptance. Accepted payable at Farmers Bank. J. H. Little. V -^ a J I ^'1 E III l-H M-1 7) gQ "O r •c * .> a. rt ^^ ^m f2^ < c CO Rl in ^^ \ ! iiri.r.s or ExcirANcr:— ACCF.PTAVcr,. ^•3 12 Acceptance Parlial. A Mill is i)artialiy accepted when the acceptor only agrees to pay a |)arl of the amount. l'',xam[)le or[)artiai accci)tance. Accepted (o^ Thirty dollars, payable at I'armers Hank J. II. l.M ri.K. This placed on a draft for $86,40 would he a partial acceptance. . 13 Acceptance Qualifled. A (pialified acceptance is one in which the acceptor does not agree to all the condilious in the hill, but varies them. ■'(i| 14 Foreign Bills in Sets- Foreign ISills are commonly called "Hills of Exchange," though the title really includes Inland Bills as well. The i''orcign IJills are usually drawn up in sets of two or three. This is done by making two or three co|)ies of the same bill, and indicating in each that there are other copies, and the number of such copies. The payment of one copy cancels the others. The reason bills are drawn in duplicate is to make pro- vision in case of one getting lost when sent a long distance. It is customaiy to send one by one boat or line or route and another by another boat or line or route. [^ KCiRM. xxznx:xxzxxzxizzxxzxxzxxxzzxnzxxuxzxxzzxxzzzixizxxxxzxizxxzixzxxxxiiiixxtzzitxzxxxzxzxxxzxxxx::izxzz ^^650. ' Toronto, Dec, 20, 1897. At sight of this my first of Exchange, (second and third ofl ^fhe same date and tenor un^Jfu'c^J pay tothe order of W. E. (llad- I stone, Six Hundred and Fifty Pounds Sterling, and charge to the account a 'of RoHERT Pen ri.v. To Glen Mh.t.s & Co., London. iMigland. axxxn;xxzxixxxxxxzzxxxxxixxxxxxxxxzxxxxixxxxxxzxixxxxxxxixxxixzxxxxizxxxxxxxxxixx!tzxtxxxxxxxxxzxx!txxxxn 2nd Form. Same as ist, except to put numbers in italic type in the follow- ing order second, first and third. 3rd Form. Same as ist, except to put numbers in italic type in the follow- ing order, third, first and second. J 64 HILLS OF KXCirANCE— ACCEPTANCE. CHAPTER 17. i ! ' m Bills of Exchang-e- Acceptance. f The Accei'iance. I Place ok I'avmknt. I'UINC ll'AL AND SURETY. 'I"l\ik Dkait Drawn am ek Sir.iir. 'i'lMK Dkaki Drawn akter Date. DiiKERENT Due Dates. Dating ok IJills and Acceptances. Neclkit to date Acceptance. (Conditional. Qualified as to Time. Partial. Pkesenta'iion kor Acceptance. Slips ok Instruction. 1 The Acceptance — The foregoing draft, Chapter 16 Section 10 is drawn by John Rutherford in favor of Joseph Lang. It is not binding on James H. 1-ittle in any way, until he has signified his wilh'ngness to pay it by writini; the word "accepted" across the face of it, and his signature. Any other word or words that convey the same meaning will do just as well, but the above is the customary form. The date in this acceptance is necessary as the time does not begin to count until the draft has been "seen" by J. H. Little. The evidence of this sight of the draft is the acceptance. The above draft matures Feb. 7, 1 89 1. When a draft is accepted it is said to be ''honored," and when acceptance is refused it is ''dishonored.'^ An acceptance may be classified as follows: ' (i) General, Conditional. ,j Partial. ' (Qualified as to time. Acceptance by one or more drawers but not of all. 2 Place of Payment — in the acceptance p.'ige 62, Sec. 10, Jas. H. Little^ has mentioned a place where he desires it made payable. This is a general acceptance, unless it were expressly stated in the draft "and not elsewhere." — viz. At The Merchants Bank, Barrie. In such a case the acceptance for Molsons Bank, Meaford would be Qiiah'Jied and not General. Bu' iness men for convenience usually make their drafts payable at the bank v ' j do business, or at their own office. This saves the remitting to differ- nks to retire their drafts when due. 3 Principal and Surety— in the foregoing draft, page 62, Section 10. John Rutherford is the principal debtor until it is accepted by Mr. Little, then J. H. Little, becomes principal debtor, and Jno. Rutherford becomes surety. (2) Qualified 6s mt.I.S OF F.XCIlANCiE- ACCKPTANCE 4 Time Draft Drawn after Slgrht— In this draft the time i)c«ins to count from the date of the acceptance. There arc three days of grace after the sixty days mentioned in the draft, have expired. KOKM. fTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT »TTTfTTTTTTTtTT»fTTTTTTttTTTTTTT»»l'TtfI rTTTf* •S « iT t 3 * " ;i ui r $47-25. Milton, Mar. 4, 1897. i 1 ^ o [ ^'^^y ^^^y^ ^^^^^ ^'t?'^^ l^^y ^^ ^^^ order of \V. A. 3 S « - o^ • t Mr I -can & Co. I'orty-seven ,"A Dollars, 3 gl ^ -'~' E value received, and charge to the account of 2 2 So E I). Mki,vii,le& O . 3 'I'o John Toi.mii:, E.s(,)., Kincardine, Ont. '1 I li kiiUi lllillililiilililltilillillllillliliilliiiliiiiimill'iiiiliiiliill UliiHii' 5 Time Draft Drawn after Date— In the following draft time begins to count from its date, regardless of the time of acceptance, hence an acceot- ance on this draft does not refjuirc a date. •3 o. S 3 I'ORM. pTTTrtTTTTTTTT TTTTTTTTTl rTTTT f » rtTTTTTTTTTTTTT TTTfTTI fTTTTT T1 T TTTTTTTTTTfTT rTT TTTTT" 2: E y. f $92.80 Fi-ESHKRTON, Mar. 4, 1897. Sixty days after date pay to John Dickson or "l^ I '-^ t order Ninety Two ."(^'^ Dollars, rt a. •ca v. <5 j»« _• E value received, and charge to thc^ account of .^8 o-a Joseph Milligan. ► To J. W. Simpson, , t Markdale, Ont. j kimimiimiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii 111 iiii till iiiii^ 6 Different Due Dates — The foregoing time drafts are drawn Mar. 4th at 60 days, both drawn the same day, and have the same running time, yet there will be five days of difference in their due dates, because the last one be- gins to count the sixty days immediately, whereas the former one is five days before it is accepted, and time only begins tocount from the timeof acceptance. 7 Dating^ of Bills and Acceptances— A hill is valid though dated back, 01 forward, or on a legal holiday, or on a Sunday. ' 111^ 66 mi.LS OK EXCIIANGE — ACCEPTANCE, 8 Neglect to date Acceptance— if by neglect the date he left out of an acceptance where it is re(iiiired, the holder of the draft may insert the date on which the acceptance was made, or any subsequent date to carry out the intention ot the parties and give effect to the document. 9 Qualifled Acceptance— When an acceptance in express terms varies the effect of the draft as originally drawn, it is called a (jualified acceptance. (Qualified acceptances may be (i) Conditional; (2) Partial; (3) (^)ualified as to time; (4) The acceptance of one or more of the drawees but not of all. 10 Conditional Acceptance is one in which the acceptor makes pay- ment dependent upon the fulfilment of some condition contained therein. Kxamim.e:— Accepted payable out of the United Presbyterian Church Build- ing I'und. J. Harris, Treasurer. 1 1 Partial Acceptance is one in which the acceptor agrees to pay part only of the amount for which the draft is drawn. If a draft were drawn for ninety dollars the following acceptance would be partial. Example :Accepted Feb. 14 1891, lor Sixi_, Dollars. H. Mandeks. 12 Acceptance Qualified as to Time is one in which the date of maturity is changed, as where a draft is drawn payable at sixty days' sight and is accepted payable at ninety days sight. Notice, however, that such an accept- ance varied from the original conditions of the draft, and that the drawer and all previous indorscrs are discharged, unless their assent, either expressed or implied, is obtained either before or after the acceptance. Where a drawer or indorser receives notice of a (]ualified acceptance, and does not within reasonable lime express his dissent, he shall be deemed to have assented thereto. . ' Example :— The following acceptance placed on a thirty day draft would be qualified as to time Accepted l'"eb. 4, 1891, payable at sixty days sight. Robt. Marr. These remarks do not apply to partial acceptance. It is not necessary in ihcir case to obtain the drawer's and indorser's consent, but they must be notified. NEGOTIATION OP lilLLS, NOTES, ETC. 67 The holder may, if he likes, refuse a qualified acceptance and treat the bill as dishonored, in which case he must protest the bill. Acceptances containing a local qualification are not considered (}ualified acceptances, and the foregoing rules do not apply to them. 13 Presentation for Acceptance. The following drafts mu=;t be presented for payment or the drawer and indorsers will be discharged, (i) Drafts drawn at sight and after sight. (2) Drafts payable elsewhere than at the residence or place of business of the drawer. (3) Drafts that expressly stipulate that they shall be presented for acceptance. m 14 Slips of instructions. When drafts are forwarded for Accept- ance in the regular course of trade, slips of instructions to the bank or banker are usually attached to them. i n r5i 3 No Protest for Non- Acceptance. \ L PLEASE DETACH BEFORE PRESENTING. \ TTTTTTTTTTr'TTTTTTTTrTTTTTTTTTTTTnrrTTTTTTnrTTTTt TTTTTTTTTTTTTTTTTrTTTTTTTTTS Sometimes the initials of the above or other words of instructions only are used N. P. N. A. meaning no protest for non-acceptance. N. P. means no protest, that is, do not protest in any case either for Non- Acceptance or Non-Payment. The following form of slip is sometimes attached for use in case a draft is not honored. IF REFUSED CROSS REASON THUS X Will pay less cash disct. . . Canrn)t pay at present Will not pay exchang'e. . . . No authority to draw Has contra account Goods not received Refused, no reason Does not owe this Will write drawer Amount incorrect , Written to, but 1 no response / Cannot be found. . . . Wants more time.. Has remitted Already ppid Not in Town Closed up Will remit Failed DETACH THIS WHEN DRAFT IS ACCEPTED. I :i 68 NEGOTIATION OF BILLS, NOTES, &c. NEGOTIATION OF DILLS, NOtES, ETC. CHAPTER 18. ' Definition. Requisites of Indorsement. Puki'osES of Indorsement. Methods of Indorsement. J Change of Blank Indorsement. ] Full Ikdorsement- Restrictive Indorsement. Qualified Indorsement. Full Qualified Indorsement. Summary of Indorsements. 1 Negotiation — The negotiation of a note, draft, cheque, or bill of ex- change consists in the transferring of it from one to anolher, so as to make the transferee the holder thereof. (i) A bill payable to bearer is negotiable by delivery as it is payable to whoever carries it. (2) A bill payable to order is negotiable by indorsement of the holder and completed by delivery, briefly stated indorsement and delivery. 2 Requisites of Indorsement for negotiation : (i) It must be made on the bill itself and signed by the indorser. A signature alone is sufficient (2) It must be an indorsement of the entire bill and not of a part of it, (3) If payable to two or more persons not partners all must indorse, un- less one has authority to indorse for all. (3) It is usually written across the back of the instrument, [j 3 Purposes of Indorsement— Indorsements are made (i) For the purpose of negotiation. (2) For additional security, as in case of accommodation paper and discounted by banKS and individuals. * (3) For the purpor.c of acknowledging a partial payment of the instrument. 4 Methods of Indorsement — The following are common ways of in- dorsing:— (i) Illank Indorsement. (2) Full Indorsement. (3) Restrictive Indorsement. . (4) (^)ualified Indorsement. (5) Full (Qualified Indorsement, (6) Indorsement for Specific Purposes. (7) Indorsement for Guarantee. m NEGOTIATION OK r.II.l.S NOTES, KTC. 69 The following diagrams show the five common forms of indorsement as they would appear on the back of notes or hills (In Ulan k. ) (In Full. ) ( Restrictive. ) ( Qualified. ) ( Full Qualified. ) John Bayne. Pay to W. H. Dunn, or order, John Hayne. Pay to W. H. Dunn only. J^jhii lJ.iyne. Without re- course to ine. jolui Ka>ne. Pay to W. H. Dunn, ^r order, williout recourie. lohn Uayne. 5 Blank Indorsement is simpiv signing the name unconditionally, in blank, without any accompanying words, across the back of a note, draft, cheque, etc. Effect on Note —h is afterwards a negotiable instrument just as if it were payable to bearer. Effect on Indorser — The indorser is held responsible for the payment in case the maker fails to pay it. If 6 Chang-e of Blank Indorsement —By the Bills of Exchange Act of 1890, 53, Vic, cap. 33, s. 34, s. s. 4, respecting bills of exchange and promissory notes, any holde*" of a note, etc., indorsed in blank, may write above the blank indor- sement any words to make a special indorsement of it so as to make the bill payable to liimselfor to any other person specially. A holder of a note or other negotiable instrument that is indorsed in blank may change it to any other form of indorsement by writing such form a!)ove the indorsement The blank indorsement is the highest form of uidorsenient, lience any restriction placed on it by change of form does not enlarge the contract or liability of the indc rser. I 7 Full Indorsement -The form. (Form i) Pay W. H. Dunn, or order. John Bavne. (Form 2) Pay W. H. Dunn. John Bayne. B ! i'i 70 NEGOTIATION OF BILLS, NOTES, ETC. Effect on Note — The above indorsement only passes the title of the bill to VV. H. Dunn. In order for Dunn to pass a title to some other person he must indorse it. Effect on Indorser — Mr. Bayne would be held responsible for payment of the above bill in case of the failure of the maker. 8 Restrictive Indorsement— (Form i) (Torm 2) Pay W. H. Dunn only. John Bavne. Pay W. H. Dunn only at Henry Thompson's office and not elsewhere or otherwise. John Bayne. Effect on Note — Such indorsements as the above pass the title of the bill from Bayne to Dunn and restrict the negotiation of it afterwards. It gives Dunn no power to transfer. If it were afterwards negotiated the subse- ( lent holders would have to take it subject to all defects in its title and to all offsets, etc., between the parties to such indorsement, as on its face, it shows evidence that some other transactions may be depending on it and that the in- tention of the parties is that no further negotiation take place. Effect on Indorser failure of maker. -He is held responsible for payment in case of 9 Qualified Indorsement— (Form) Without recourse to me. John Bayne The above indorsement is for the purpose of negotiation only, as it docs not hold the indorser responsible for payment and it makes the bill as negoti- able as if it were payable to bearer. 10 Full Qualified Indorsement— (Form) Pay W. H. Dunn or order, wiiiiuut recourse to me, John Bayne. Effect on Note — By tliis form of indorsement the note is transferred from Bayne to 1 )unn. Effect on Indorser —It does not hold him responsible for payment in case the maker fails NtOOTIATION OF lilM ■;, NO! KS, ETC. 71 11 Summary of Indorsements, Forms, Liabilities, &c. Name. Form. Effkct on Bill. Efkhct on Inuorser. Blank. Joiin Bayne. Makes it negotiable. Mollis him responsible if maker fails. Full. Pay W. M. nunn or order. John Bayne. Transfers tide of hill from John Bayne to \V. H. Dunn, subject to transfer by him a^ain. Jlolds him responsible if maker fails. Restric- tive. Pay W. H. Dunn only. John Bayne. Transfers title of Bill to W. H. Dunn only — notinteiuled for fur- ther transfer. Holds him responsible if maker fails. Qualified. Without recourse to inc. Jvjjin Bavne. Makes it nejjoliable. Does lU't incur any lia- bility on him. Full Qualified. Pay VV. H. Dunn, or order, without recourse to me. John Bay -3. Transfers title of bill to W. H Dunn, subject transfer again by him. Does not incur any lia- bility on him. SPECIAL INDORSEMENTS. CHAPTER 19. 'Inuorskments for Si'iccii'ic Purposes. Indorsemknt for iDF.xru'icAriON ok Payee. InOORSKMKNTS ok CjUARANTEE. Indorsement Guaranteeing Collfxtion. The Indorser's Contract. The Conikact Amon(; Indorsers. RiLSTRicTiNt; Neootiaiw.e Bills. Nec'.otlviion ok Overdue Ijili.s. Patent RitiiiT Uills. 1 Indorsements for Specific Purposes. The fcjllowing are useful forms. Forms of indorsement for bills sent for collection: (I'onn I.) For collection and remittance to IJank of Montreal, Toronto. ^' 1>. Hrouch, Manager (Form 2) For collection only on account of Miller iV Tiio.mi'.son, Form for indorsement on bills sent for discount: For discount only to credit of Miller & Evans. NKCaXlATION OK NOTKS, HILLS, ETC. Forms for Cheques, Bank Drafts^ etc., sent for deposit: (Form I.) For deposit only to the credit of (Form 2 ) Credit my account 72 J, H. Little, R. J. Doyle. (Form 3.) Fof deposit only in the Trader's Bank, to the credit of Anderson & Wilkinson. 2 Indorsement for Identification of Payee— The following is the form for identifying the payee of a bill. Suppose the bill were in favor of John Brown, who is not known at the bank. (Form.) John Brown is hereby identified by Thomas Thompson & Sons. If an indorsement in blank were put on the bill in place of the above, the endorser would guarantee (i) The payment of the bill, • ' / (2) The identity of the payee, whereas in most cases of identification, only the identity of the payee is re- quested, and no guarantee required of either the validity of the bill or the fi- nancial ability of the maker to meet it. 3 Indorsements of Guarantee of Payment— When bills are subject to protest; this may be saved by the endorser writing a form of guarantee over his signature, waiving protest. (Form I.) I hereby guarantee payment of within note, and waive protest and notice of protest. William Brown. The above is open to objection, as there is a contract made without a con- sideration. The following are better forms: the second being for a «|i|ji|ji|i,|j|i,|ii|ii|ti|ii|ii|uiii|ii|ii|n|ii| lilllll.liili.liiliiliiliiliiliii lii|liliillilii|«liilii|iiliilii|.il;:|;l|iiliiliillilllllilllll.lilll«lllll'lullillillj»lllilllllj|iiiniiK^ CdKliVE^. IS 1. It is ;hascr of r "holder r in due jiness or »nt for a 'given for I are void, he knows exceeding eir infirm- , the first It will he noticed that the cheques do not dilTcr much in form, from ordinary drafts, except that they areahvays drawn on a bank or banker. 3 Use of Cheques — The practice of making payment by chctiue is daily growing — the giving of a cheque instead of cash — (i) Saves time in counting. (2) Saves any risk of mis counting. (3) Saves from liability of loss of money by theft or robbery. (4) When a cheque is returned to the drawer after it is paid, it is the best voucher or receipt or evidence of payment a man can have, as the payment was made by a disinterested party — the Bank. Hundreds of thousands of dollars change hands daily in the cities by checjue, without the cash beinn iiandlcd and without risk. ):r?l 4 Usage by Stock Companies, etc. -Many stock Companies, Corpo- rations, As.sociations, and Manufixcturers, etc., lay down the rule that every pay- ment be made by cheijue. They deposit all their receipts of Cash, Che(|ues Bank drafts, Post-office orders, etc., daily. A much closer watch can be put on ttie cashier or c.-jnlidential clerk when no payments are made except by the bank. The officers ot the conpany always have the cancelled chetjue as a receipt for their payment. i i m h \nk payable ;nt of a sum banker. , 1897- \ ly dollars ; KRISCN kiiiiiMiiiiiinii'i"'''*'" li 5 NegfOtiability. — Checjues, like Bills of Exchange, are subject to the same laws and conditions of indorsements and transfer as 15ills of Exchange. Banks usually have their blank forms printed payable to bearer, as they wish to avoid the responsibility of paying to the wrong payee. Most business men change the word bearer to order, befpre signing. In making this change in the form, it is proper for the person signing to [mt his initials beside the change. It is not safe to do business w ith cheques payable to bearer, as, should one be dropped or mislaid, it is as negotiable as a bank note and may pass into the hands of an innocent holder for value, and be paid by the bank and lost to the proper holder. 6 Forged Cheques. — If a bank pays a forged cheque it must stand the loss, unless it can be shown that the drawer of the cheque is so indifferent, careless a'ld variable in his signature and methods of drawing, that it was im- possible to tell the forged from the genuine cheque by exercise of due diligence on the part of the bank. Then the erratic and versatile drawer would be at the loss. i I! I •■■ 16 Cff F-OITES. 7 Local Payments. — Cheques are generally used for nuking local pay- ments, and not for sending by mail or otherwise to distant parts in payment of debts. Occasionally banks grant large firms and corporations whose busi- ness transactions cover a large section of country, the rignt to have their cheques paid at par, at any branch of their bank without any charge for ex- change on them. 8 Presentment Within Reasonable Time— When a cheque is given in payment of a debt, it is not intended by the drawer that the payee shall keep it six months or a year before collecting it. It should be presented within a rea- sonable time. In determining reasonable time, regard must be had to the custom at the place, and to special, circumstances of the case. In some places reasonable time has been decided to be 24 hours. 9 CePtiflcation or Malcing* "Good"— A che(iue is not commonly "ac- cepted" as a draft is, as it is payable immediately on presentation at the bank It sometimes happens that a person wishes to send one to a distance, or that the payee does not know, or is doubtful of the financial standing of the drawer then the drawee may get the checjue "accepted," or as it is usually called "certified" or ''marked good" by the ledger keeper of the bank, 'i'he bank then undertakes to pay the che(iue, and it is charged at once against the drawer's account in the bank, and the following, or its equivalent, written across the face of the che(}ue, the same as an acceptance. I I (Form I.) "Certified." Merchants Bank of Canada, Stratford. J. E. McCkk Ledger Keeper. (Forma.) "Good." Merchants Bank of Canada, Stratford. J. E. McGee, ■ ■ Ledger Keeper t 10 Payment of Raised "Cheques"-- if a banker pays a cheque that has been raised from a smaller sum to a larger sum, he is responsible, and can- not charge the drawer of the cheque with the increased amount, unless it can be shown that the drawers carelessness in drawing the cheque, facilitated the forgery. For instance: If you write a cheque for five dollars thus — » Five Dollars, leaving a blank before the "five" or between "five" and "dollars," and some per- CROSSKI) CHK(,)irKS. 77 son writes in a luindrcd or thousand between them, the banker who paid such a checiue would not be held accountable, the careless maker would lose it because he put a premium on the raising and was accessory to the forgery by leaving said space that it could readily be done — he is an accessory to the crime. His punishment is the loss of the amount of the raising of the che(|ue. The same is true also regarding all negotiable paper. Do not leave any blank spaces either before, in the middle, or at the end of an amount in negotiable paper. 1 1 Revocation of Payment— The duty of a bank to pay a cheque drawn on it by its customers are terminated by: — (a) A countermand of Payment. (b) Notice of the Customers' death. Chc(|ues are sometimes lost or stolen, or the dr.iwer wishes to withdraw a cheque issued, he should give written notice to the bank countermanding pay- ment. Such notice should contain a full description of the checjue. H ; > CHAPTER 21 CROSSED CHEQUES. rnKflNlTION. USK OF CROSSlNf;. Crossed (Iknkrai.lv. Crosski) Specially* Forms ok Crossing.' , Special Points. 1 Definition The drawing of two parallel lines across a cheque with, or without the addition of words is called "Crossing a Cheque". Sections 72-81 of the Bills of Exchange Act of 1890 introduce this practice from (ireat Britain and gives it legal status in Canada. Those who are familiar with foreign invoices have freriuently seen on the invoice heading the notice of the sender, as to how Cheques should be crossed and giving the name of the firm's banker such as following. "All cheques should be crossed Alliance Bank." 2 Use of Crossing" a Cheque. A Checjue that has been crossed can- not be paid in cash over the counter of the bank. It must be put through the deposit account. (i) of the payee if marked non-negotiable or (2) of the payee or endorser if crossed without the words non- negotiable. Crossing is used to place on record in the books of the Bank or Banker, (an independent record,) the name of the person actually getting the payment for the cheque for one or both of two purposes, viz : U 78 CROSSKI) CKKOUES. (i) As evidence that the payee has been [aid the amount of the che(iiie. (2) To prevent unauthorized or fraudulent c;ishing of the checjue in case it is lost. 3 Crossed Generally. A chcciuc is said to ho croHfiedgcnernlhj if the name u4 a bank is not uu nlioned in the form of crossnig. 4 Crossed Specially. A che(|ue is said to be crossed specially when the name of a bank is mentioned in the form of crossing. FORMS OF CROSSING. I Form I Clieque crossed geiia'dlly. ZXXXXKZZXZZZIZZXZZIXZXZtZXIZIZXXIXZXZXXXXXZXXXZXZXIIXXZZXZXIXUUXIZIUXZZXZZZZXXUUXZZXZZXTZZXZ] czzxr « 8 I txxxx:!zxzzzzizzxxxzxzxzxzixxxxzzxzxxzxzzzxxxzxzxzxzxzxzzzxxx:xzzx:(xxixzzxxzxzxixz'tzzzzzxzzxxxxxxzuxxxx: Form 2— Chc(|ue crossed fjenerally to a Bank when the Bank of the payee is not known to the drawer. :zzzzi:zzzzxxxxxxzzzzzxxxzxxxxxxxixxxx]:xxxxxxxxzxxixzx]:xxxxxxzzxzzzzxxxzxxxzzzzzxxxzzz:tzzxi xxziExxziEZZZzzj Si CM c:B IZZZniZZZZXZZXXXZZZXZZZZXZXIXZZZZZZZZXZZZZXXXXXXXXXXXXXXXXXXXXXXZZIZXXXZXlIXXXlIXZZUXXXXZXXXXXXXXXXXXZZZ Kfi CROSSRO ClIKfJl'ES.. 79 Form 3— Chc(iuc crossed grrwrnlly but colIcctaI)lc only through the deposit account of the original i)ayec. :zmxnxumnxizuiiuu>nxuui»uuu»xxiiixuxiiziixixnnxxzxxxttixzzxxxxuu.iix) ixz) ixxzi cuzix S s =2 axxxzxzxxxttxxxxxixxxrxxxxxxzxxxxxxxxzxxxxxxxxixxxixxzxzxxxzxxxzxi]izxxxxxxxixxxzxxxxxxxxxxxzxxxxxxixxiizxzx2xx:cxxxxzxxxzxxxzxxxxxzx; P'orm 5 — Cheque crossed upeciaUy when the Bank ol the payee is known and the dr'^wer wished it passed through his account and not to be»otherwise negotiated by him. TITTIi:iIlTTITIITITTITTrTIIIITtITITTIIi:TXIIIIUIIIIIXl«IXirTliriIIlTIlIXITIirTlITTIITl UXZ'(XXX:iXXX:UXXX: s lXIIgIXXXXXXXlZXXXXII«XTXmTTTIXTTniIt«TTT TTITXTXIT XTn:iTTirXXIlItItTTVTTTltTTrTIT HH i m »):TTHlim: i Ul I :l ; 8e , MISC'-LLANKOirs HINTS. Special Points ( 1 ) A Cheque may be crossed by the drawer either generally or specially. (2) A Cheque that is uncrossed, may be crossed either generally or specially by the holder. (3) A crossed chetiue may be re-opened or uncrossed, by the drawer by writing between the transverse lines the words "i)ay cash," and his initials. (4) A bank may iross specially to another bank for collection the following: — {a) A che(]ue crossed specially to itself {/>) A cheiiue crossed generally. {c) An uncrossed cheque. (5) The crossing on a cheque is a material part of the cheque and it is unlawful to obliterate or change it, except by the maker. CHAPTER 22. Miscellaneous HINTS and FORMS. Coi.i.KCTioN OK Accounts. .ACCKI'TANCK HY MaII.. Honor and Dishonor. Accommodation Drakts. "Kuk l''i,viN(;.'' Pl.ACK OK I'aVMKNT. DaV.s ok ('iRACE. Nkckssarv Conditions. . 1 N'ai.i'k Rkckivkd. LiAiiiMTV ok Resi-ectivk Parties. Hank Drakts. Post Okkice Orders. Bank Notes. Dei'osii Receipt. Coupon Bond. Registered Bond. LiviTER ok Credit. Warehouse Receipt. Bii.E ok I.adinc. 1 Collection of Accounts — Almost all business houses now draw drafts on their custoinei.'^ for the collection of accounts and debts due them. The drawer may make a draft on the drawee — (1) In fiivor of a lliird party, or (2) In favor of himself The wholesale merclianl or manufacturer may either draw in favor of his MISCKI.LANEOUS HINTS. 8l "rafts iThe banker or in favor of a creditor, or draw it in his own favor, being drawer and payee on the one draft, • 2 Acceptance by Mail— A draft should not be sent by mail to the drawee for acceptance. It is not Hke a promissory note unsigned. It is an order, and should the drawee choose to keep the draft, he tvould have the e of, or particulars of the draft. He accepts by empowering an ofificial of the bank to act as his attorney for the purpose of accepting the draft described. Form. 2l'i|ank ok Canada. i i ■ • - I "■ Brockvii.le, Dec. 24, 1897 ; I To John Jones, Chatsworth. ■. ,| I The Bank has received for acceptance and collection the undar- : t mentioned Draft drawn on you. If it is your desire to accept the draft. : : kindly sign th.e Power of Attorney hereon ; if not, please state your : ; reason for declining. - ; No. 4568 drawn by \Vm. Richmond of ]5rockville for $800, dated * 5- Dec. 24, 1897, payable 60 days after date. | ; Due Feb. 25, 1898. W. J. Patteuson, \ \ Manager. ^ 'iiiliilinj:ertiRe:i cheque, j'" ^" accepted draft. |In a certified cheque. (i) Acceptor. i (i) The Hank. '2) Drawer. 1 (2) ist Indorser. (3) I Indorser. ' (3) 2n(l Indorser. In a note. (i) Maker. (2) ist indorser. {^) 2nd indorser. (4) 3rd indorser, &c. (i) Drawer. (2) ist indorser. (3) 2nd indorser. (4) 3rd indorser, &c. (^) 2nd Indorser, 1 (4) 3rd Indorser, t.Vc. i\:c. 1 1 Bank Drafts are drafts in the ordinary form drawn by one bank or banker on another bank or ijanker payable immediately without days of grace, to third parties. If you desire to remit money to Winnipeg you may send the bills or gold by ex[)ress or registered letter, or you may buy a draft — pay your money to your banker and something extra for his trouble, (i, ], or i; of one per-cent.,) and he will give you a draft on a Winnipe'r !)anker in favor of your creditor. You remit the draft, without the risk attending the transmission of current funds. The bankers usually settle with (jne another every three months. The percentage paid to the banker for h.is troulile is called exchange or commission. 12 Post Orice Orders A post oflice order is really a C.overninent draft drawn hv- one post office on another and payable to a third [)ariy. The amount paid the govermuent through the post master for his trouble is called commission. 13 Banl< Notes are promises to [)ay issued l)y Ciovcinments and lianks. They are used instead of gold and silver, being lighter to carry. They are not sultject to the statute ef limitations. 'Vhv\ are iiever oiulawctl as to time. 84 miscki,lane:ous hints. 14 Deposit Receipt— A "deposit receipt" or "certificate of deposit" is a receipt given by a bank for money deposited in the bank. It is usually pay- able to the order of the depositor and bears interest. It is, when drawn to a person or his order, negotiable by indorsement. It is equivalent to a certified che(iue. If part of the money or interest is wanted, the money must be drawn and the balance re-deposited; or in other word?, the receipt surrendered, and another issued for part, and cash issued for the remainder. , • • . rORM OF DEPOSIT RECEIPT. rTTTTT'TTTTTTTTTTTTTTTTTTTTItTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTrfTfTTrTTrTTTTTTTTTTTTTTrTT TTTf ,TTTr< i E 3 $200. i Nu. 693. TiiK Homestead Banking and Savings Society. 3 Incorporated i88t). Authorized Capital, $1,000,000 in 5000 Shares of 5 C 5 $200 each. 3 ^3 ' Kingston, Jan. 15, 1897. 3 Received from S. J Parker, Esq., the sum of Two Hun- 3 t kJ 3 dred I'go Dollars, which sum will be accounted 3 \ ^ : for by the Society to the said, S. J. Parker or his order upon the 3 t hi ^ J f.i-,. ^-._.:c.._., -..1.. -..J ..-11 I • . .,-_.,_ i ^ :: surrender of this Certificate only, and will bear interest from the W 3 15th day of Jan., 1S97, until within fifteen days of time of with- ^. 3 drawal, at the rate of five per cent, per annum. No interest will 3 be paid on this deposit unless it remains three months. George Meir, Mgr. Homestead Banking and Savings Society. 14 A Coupon Bond sometimes simply a "bond," sometimes a "de- benture," is the written promise to pay made and issued by a corporation or company, with small promises to pay for each half-yearly payment of interest attached. They are used — ( 1 ) By corporations to borrow money and create a dr^bt for some public work or improvement. The money to repay the principal of the debt is collected in equal yearly sums as taxes and invested so that the bond may be retired at maturity. These annual investments to meet principal are called a "sinking fund." (2) By companies, such aa banks and loan companies, when they borrow at home or abroad, ai a low rate of interest for a long term and loan out at a higher rate of interest. The interest in each case is paid usually half yearly on presentation of the proper coupon. ulAWiaWMisHt***'"^'*-' MfS(?ELLANE0Lfi5 UlUfi,. 8 = 16 Registered Bonds — Bonds are sometimes issued without coupons attached. They are known as Registered Bonds, because they are made pay- able to a certain person, and the payee's name is recorded in the office of the corporation or company that issues the bonds. The interest is paid in cash or by chetjue to the p>erson whose name is recorded as the owner, or to his agent or legal representative. A registered bond is the same in form as a coupon bond without the coupons. Bonds when considered from an investor's stand-point are known as T'irst Mortgage Bonds, Second Mortgage Bonds, Third Mortgage Bond.-; iVc, ac- cording to their priority of lien on the assets of the corporation or company. The bonds of a company may be a safe investment when the stock is not. You migiit be safe in lending a firm money on their paper, when you would not care to incur the liability of being a partner. The stock of a prosperous company frequently sells higher than its l)onds because of its high rate of div- idend and large rest-rve fund when the bonds only pay a nominal rate of interest- FORM OF COUPON BOND. le- lor :st |ne i,t Ibe led :nZXXXXXXXXXZZXXXXI]CIXrXXZZIZXXXXZIUXZXXZZZZXZTXZXXXZZXZIZZZIXIZZZZ]IXIZZZXZZ2XZZIIXXIXZ:tIXX!I!IZZXXI{ THE ONTARIO LOAN AND DEBENTURl': C:OMPANV. l.ONUON, Omark). a M M ISSUpl) UNDER AUTHORITV OF THE ACT OF THE PKOVINCK OF ON'IARIO. 3 DEBENTURE NO. 2366. TRANSFERABLE- » The President and Directors of th'j Ontario Loan and Debenture" " Company acting for and on behalf of the said Corporation, promise to pay to Timothy [ones or bearer, the sum of Fifty Pounds Sterling, on C the first day of March, in the year of our Lord 1908, at the Counting House of Messrs. Borthwick, Wark & Co., Barlholomew House, Bartholomew Lane, London, E. C, with interest at the rate of five and one half per centum, to be paid half yearly, on presentation of the proper coupons for the same as hereunto annexed, on the first day of Ai)ril, and the first day of October, in each year at the said office. SKA I. I 1 M'.Al Dated at London, Ont., first day of March, 1898. For the President and Directors of the Ontario Loan and Debenture Co. ;; 1 Hos. SvMES, Manager. &n-fyyTTiT»xzxxzxxzxzzxxxzxxzzxzzzzxzxzzzzxzxxzzzxzxzzzxxizzixTxizxxx]mzzxxTiTiTTTiT; uzz u cizz iz czxui: J.W. Smith, President i I &6 MlSCKLf.ANEOttS HINTS'. J « I i h COUPON. (so of iliese woiilil Iju nllaclied to llie forciiolnK de'Denlure, one for each lialf years interest.) uzixi]:ixzzixiixxjiixx:izxzxiiixzixxzzi:(ixzxxxizxzziixtxzxixzxxzizxxixzxxiixziiixxzxzxzj!X]:z:x::x:cxxrtixzt^ 'I'liK Oniarki Ix)\n and 1 )i:i;kn rrki', (Iomi'anv. London, Ont. ,/,■'• 7^. f'ti-, ^tg- I lalf yearly iiitcrisi due October i. iSijS, lor ^/,'5o Stg. at five and one half per cent, pi'r annum, payable at liie Counting House of Messrs. lJ(jrlh\vick, Wark tS: Co., 15arlholomew iIou.se, London, E. C. Lor the President and Directors. DEBENTURE NO. 2365. COUPON NO. 20. TiioM.xs Sv.MKs, ^L1nager. kzzxxYxxixzxxxxxzixxxxxxxxzxxxsizxzzxxxxxzixzxxxxxxxzxxzxxxxxxxxzxzxz:izzzzzxzxxxxxxzii:xxzxx:cxzx::i cxxxxl 15 Letter of Credit is re. illy a (haft from which sums may be drawn by the holder from lime to time as he requires them, the whole sum not e.xceeding the amount mentioned in the letter. They are used by parties travelHng in foreign countries, usually, to save carrying much cash on the person. LouM oi (Iknkk.m. OR Circular Lkiter ok Crkdit. LET TKR OF CRLDIL No. 2364. Woodstock, Ont. Dec. 2, 1897. To flic Correspondents of the Merchants Bank of Canada. /:8oo. Gent[.emi:n, — We have the pleasure of introducing to you Mr. A. L. Mclntyre of this place, who purposes visiting England, Scotland and Ireland and desires to open a credit with you. Vou will please furnish him with such funds as he may reijuire, in the aggregate not more than Eiijht Hundred Pounds Sterling, on his sight draft drawn on (Hen Mills it- Co., IJankers, i,on- don, each draft to be plainly marked as drawn on the Merchants Uank, Let- ter of Credit No. 23('.4. We guarantee such draft shall meet with due honor in London within six months from this ilale, and you are rcjucsteJ to buy them at current rates of exchange, deducting y(>ur commission, if any. The amount of each draft mu.st be endorsed on the back of this letter, and the letter itself taken up and attached to the last draft. Kinoly have all drafts signed in your presence, and carefully compare with signature below. 1\ W. 1). Hrodkrick, Manager. Signature of |)ayce. J. K(;an ALxgee, Accountant. A. L. Mclntyre. WJilOfiLLANfiOL'S MST^. ^1 iix lof la ft lid PORM OP INDOUSEMENTS OK DRAFTS ON LETTER OF CREDIT. fiankers paying drafts on the within I-etter of Credit will carefully indorse hereon such payments in the order made. Dale of I'ayiiient. Jan. 15, 98. Keb 6, II Mai 24, II Apr. 4, » By whom paid. Stuckev, Woods & Co. Glon Mills & Co. I.ondoiii^ Provincial Bank'jf Co Alliance Haiik. Place pHid. I Amount i., words, l-^"'"""^ i" /^ J figures. Dublin jOne Hundred P'dsi /iio'. ^ l'"dinbnro' {Throe Hund'd l''ds A" 100. Manch'sl'r iOne t lundred l''ils! /'"loo! Leeds. iKiglily i'ounds. /i'So. Letter No. 2364 of Merchants Bank of Canada, Woodstock, Out. ^ Warehouse Receipts are Receipts given by the owners of warehouses, storehouses, elevators, yards, etc., acknowledging the possession of chattel proj)erty stored, or kept for the owners of such cliattel property. The owner- siiipoflho properly niay be changed on purchase, by the indorsement and de- livery of the warehouse receipt. The.se receijjts are used largely as collateral security. They are given to bankers by grain buyers and others along with their notes, as security for further advances of money. 17 Bill of Lading* is the receipt of a boat, or master of a boat or the agent of a railway station, acknowledging that goods mentioned therein are in possession for transit from one [)lace to another. The bill of lading may be endorsed the same as a warehouse receipt. It is sometimes called a shipping receipt. . CHAPTER 23. DiSCHAROE OF NEGOTIAIU-E FaI'ER Caxcki.i.ation of Bill or Note. Alsereu Bill OR Note, Dishonor. Presentment for Act eptance. Presentment for Panment. Presentment Delayed or Dispensed WITH. The Indor.ser's Contract. I'ROTESr. 1 )A.\L\f;ES ON Dishonored IxsTRrMKNTS. I'OR.M OF Proiksi. I'ORM OF Notice of Protest. Indorser held without Ptotest. 1 Discharg'e (a) A bill or note is discharged by payment of it by the maker or acceptor, or any person in their bt;half, at or before maturity. (b) Where a bill is payable to the order of the third party, and the drawer DISCHARGE, DISHONOR, ETC. u DISCHARGE, DISHONOR, tTC. pays it instead of the drawee, the drawer may enforce payment of the bill, but not re-issue it. (c) Where a hill is paid by an ind.:)rscr, he may enforce payment of it against former endorsers, hut not against those who endorse after him. (d) If an acronunodation bill is paid by the parly accommodated, it is dis- chart^ed, as he is the party who got the value for it in the first place. (f ) When the acceptor of the bill, or the maker, becomes the owner of his bill payable for value, it is discharged. For example: A might owe a bill for $ioo; he may exchange a horse for it, and thus become the holder of value. (/) If the holder of a bill or note absolutely and unconditionally renounce his rights against the acceptor or maker in writing, the bill is discharged. 2 Cancellation of a Bill or Note- If a holder or his agent intentional- ly cancels a bill or note, it is discharged. If a holder or his agent unintentionally cancels a bill or note, it is not discharged. He should write on it "cancelled in error" and sign his name or initials. 3 Altered Bills and Notes— If a bill or note is materially altered, it is voided except, as against — • (i) The person assenting to such changes; {2) Subsecjuent endorsers. Bills and notes that have been altered are good in the hands of "an iimo" cent liolder of value," unless the alteration is apparent. The following are the material alterations: — it [i] Of the date; [2] Of the sum payable ; ■ [3] Of the time of payment ; [4] Of the place of payment ; [5] Of the addition of the place of payment without consent, when no such place was mentioned in the acceptance. 4 Dishonor— Bills are dishonored by ;— [i] Non-acceptance: [2] Non-payment. Promissory notes are dishonored by non-payment. Before a bill can be said to be dishonored, it must have been presented for acceptance or payment; presentment must be made by the holder, or on his be- half within reasonable hours. If a bill is not presented for payment, the drawer and the endorsers arc released. I no [for Ibe- Ihe DISCIIAKCK, DISHONOR, ETC. 6 Presentment for Acceptance -A bill must be i)reHented :— «j To tilt- person on whom the draft is drawn ; or To his representive, if he is dead ; 3 J If there are two more drawees not partners— present to each. 6 Presentment for Payment Bills or notes must be presented for payment ; — [i] At the place specified in them for payment ; [2] If no place of payment is mentioned, but the address of the drawer or acceptor is given — present at the address given ; [3] If neither place of payment, nor acceptor's nor maker's address is given — present for payment at business office, or residence of maker or accept- or. [4] If there arc two or more drawers or acceptors, and no place of payment mentioned— present to each at his office or residence. [5] If a bil! or note ispayal:)le at a village, or town, or city, and no particular place mentioned, it may be presented at the post office if authorized by custom or usage and if the maker's or acceptor's place of business cannot be found. 7 Presentment Delayed or Dispensed With— When circumstances beyond the control of the holder prevent presentation, it is excused, but it must be presented as soon as the hindrance ceases. Presentment is dispensed with ; [i] When after the exercise of the due diligence it cannot be done ; [2] When presentment have been waived by the parties liable on the instrument. Failure of presentment does not in any way relieve the maker of a note or the acceptor of a draft, of liability to pay it. 8 The Indorser'S Contract— An indorser of a note or draft and the drawer of the accepted draft, only become responsible for the time the bill has to run. For example: .\ indorses a note drawn payal)le in three months. His contract does not call for him to guarantee the debt for three years — only for the time it has to run — ^that is three months, and tiiree diys of grace. If a note or draft is not paid when due, the holder has an itnmediate rufht against the drawer and indorsers -not a right a year or three years afterwards- The drawer or indorser's contract ceases, unless he receives notice that the bill has been dishonored, and such notice must be given by, or on behalf of the holder. Notice of dishonor may be given verbally or in writing, and must be given on the day of dishonor, or the next business day thereafter. Such notice may be affeclually given : — [i] By delivering to them personally; [2J By placing them in the post office, post paid, addressed to the 1 w ■ A. ■ m I I Uii . 90 linj,.S OF K.KCHANdK— ACCEl'TAM'Cfe. drawers, makers and indcjrsersat their last known addresses ; if such address- es are not know.i, addressed to them at the post office where tiie bill is dated. 10 Damages on Dishoncred Instruments are called "liciuidated damages," as they arc fixed or determinable from the instrument, and are as foUowa: — I J The amount of the bill ; 2 Interest thereon from time of presentment to time of payment ; 3 Ivxpense of protest. 11 Form of Protest for Promisory Note:— j;ji»rjrr i ii «iiin|.iMuiui 1 1 n 1 1 rn 1 1 I I 1 1 I i ».|niiiiiii<>iiiiiiiiii«r'»r:M»iiii>i'l I • I I I I I I I I I I I I I I I I I ■ I I It"! I I I I I IHiilMnri' lllllilnlll i|ii|ll|li|lll.illllli|:l|Hii I I I I I I I I I I I I I I. l!l l>l'l I I I I I I I I I I I I I I I I I I I I I I I I I I I |M| INIillilinilH I I.I »lililli|iiiil ItilHi illiini • rRO'iM':sT. : On this 6th day of January, in the year 1898, 1 John i-ogie, in the j i Province of Ontario, at the re(|ucsl of Jas. McLaren, did exhibit the : : original promissory note, whereof a true copy is above written, unto the ; : teller of the Merchants' }}ank, Milton, and speakmg to himself, did de- : \ mand payment thereof; unto which demand he answered, "No funds." \ " Wherefore, 1 the said notary, at the reciuest aforesaid have protested, : ^ and by these presents do protest against the acceptor, drawer, and in- - : dorsers, (or drawer and indorsers,) of the said bill, and other parties 5 2 thereto and tlierein concerned, for all exchange, re-exchange, and all 1 Z costs, damage,; and interests, present and to come, for want of payment § Z of the said promissory note. . I T^.T^ I All of which I attest by my signature. I vj_ !_!. ' John Logic, Notary Public. ^ Mill|ill>.|illi'lli|i I I I i I I I li I K'KiliiiKliilliriliilillllliil 'lnliilii|li|ill!i|ii|ir|i.illlli» iKiiil.illilnliiliilliliilillilli i|iilli|i:illiii|ii|n|ii|nliil;il i|ll|;lll 'llllill i|lll"lilim 12 Notice of Protest: Mr. John Smith, Milton, Ont. Milton, Ont., Jan. 1898. Sir,— Mr. W. J. Patterson's promissory note for $60, dated at Milton, Nov. 3, 1897, payable two months alter date, to John Smith or order, and indorsed by you, was this day at the request of Jas. Mc- J^aren duly protested by me for non payment. John Loo ie, Notary Public. I i 'I Various spf.cial roRAts. 9« 13 Indorser held without Protest -'riit> l)aiikcrs always im)tcst dis- honored paper tliat is their proporty, unless instriictcil l)y tiu" inclo,scr to charge it hack to him. They d j so to liave official proof of notice l)eing given the indorser. It is not necessary, however, to formally jirotest by a Notary. If the holder of the dishonored paper gives notice of dishonor to the indorser, either [)ersonaliy, or in such other manner that he can prove, if necessary, that notice has been given, it will serve the same [lurpose us protest- ing viz — to hold the indorser res[)onsible after maturity of [)a[iur. CHAPTER 24. )te in ic- I II l\)l'K r)ll,l, AND I, o. u. XT A nT<%TTr. cnr^oT . t I'OKMS OK AI'.OVE I'AVAIil.K IN CaSH AND CiOODS. VARIOUS SPECIAL qk^kks. FORMS. I'OKMS Ol' OrDKRS I'AVAIILE IN CaSH ANIj GOOUS. CnATiici. Noi'KS. v^. FOKMS OK SaMK. '^ 1 Due Bill and I. 0. U.— A due bill is a written acknowledgement of a debt. It is not a promise to i)ay, hence not payable at a certain time. A debt that is evidenced in this way is not liable to dispute. It is an ackiiOiV' ledc/ed debt. It should comply with the following points : — [i] It must be dated. [2] There must be words acknowledging the indebtedness. [3] The amount payable or the articles payable should be specified. [4] It must be signed by the person making it. 2 Form [i] Payable in cash. jj^imiiliili lii|ll|i|nllllu|ji|il|ii|illlililrl:ilii|i| I I I I I I I I I I I I I I I I i I I I I I I • I I I I I I I I I I I I I I ■ I lii-«|il< luliilUllilHliilHiiliilnla I 3 Brampton, Jan. 15, 1897. ^ Due W. J. Patterson Fifty Dollars. I! J. W. SmM H. : 9 liilhliiliililliiliilliliilllliir ■ti|iiliilif|:illili:|ii|ii|li|iil"liili>lnll I' I I I I I I I I I I I I I I I I I I I I I • I I I I lnlll|lllll|IJIII,:|ll|l4lir.| Illlll|ll|ll|l'lllllilllll1|ll|l,ll llilul»lnlli|lllll»lll!lllllll lllilH|ll|l!| I Orii.i.ia, Jan. 30, 1897 : ; (lood to Thos. Masson & Co. for Forty 'J'wo Dollars. | i Arthur B. Cole. ; 9l(ilbiniiiltiiiiii:iiiiiiiiiiii|iiiu|iiiuii|iiii'|iil|[|iii»lti|i« * Photographic Sciences Corporation V S ^v 23 we; main street webster, ny. 14580 (716)872-4503 >c i/ji 9* VAftlOOs S^E(iIAL fORJlg. Form (3) Of what is commonly called an I. O. U., payable in cash. Weston, Feb. 13, 1897. ► t i Milton J. Davis. t TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTfr»TTTTTTTTTTTT1TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTtT TTTTTTTTTTTTTTTT m Tft Form (4) payable in goods. TTTTTnTTTTTTnTTTTTTTTrrTTTTTTTTTTTTTTTTTTTTTTTTITTTrTTTTTtTTTTTTTTTTTTTTTTTrTTTTTTTTTTTTTTTTTTTTTTTTT Berlin, March 26, 1897. Due J. S. Williams Fourteen Dollars in goods from our store. W. K. Ireland & Co. Form (5) payable in specific articles. UAIAA miHiiA.lklllXilXMimLliii^mi.LlllX^immHLliHlllllllilAlkimilHllklkllliilHiHllilH, 3 Barrie, April 30, 1897 t : Due W. H, Cooper sixty bushels of No. 1 spring wheat. t Fred A. Bale. I TTTrrTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT»TTTTTTTTTt»TTTTTT»TTTTTTTTT»TTTTTTTTTTtITTTTTTTTTTTTTTrTTTTTTT»t 3 Orders — An order is a written retiucst made by one person asking a second person to deliver to a third person certain goods or money and charge the same to the person signing the order. It is the same in form as a draft, but usually payable in goods or chattels. 4 Form (No. i) — »TTTTT trtTTTTTTTTTfTTTTTTTTTTTTTTT' 'TTTTTTTTTTT\ fTTTTT fT'tt TTTTf TTTTTT TTTTTTTTTTTTTTTt TTTTTTTTTTTrt rTT^ I "^ Detroit, Mich. May 17, 1897. 5 I E. J. Morrison & Co. a F (iENTLEMKN, — Pleasc deliver to Jas. J. Reith or order 3 I Fifteen Dollars worth of goods such as he may select, and chaij^e the 3 ► same to the account of C. Culuertson. 3 I < • VARIOUS SPKCIAL FORMS. Form (2) Payal)Ie in cash. 93 TTTTTTTTTTTTtTTTTTTTTTTTTTTTTTTttTWrTTTTTTTrtTTTTtTTtTTTTTTTTTTTTTTtTTTTTTTTTfTTTtTTTTTTTTTTTTTTT fTTTTJ 99 York Street, Hamilton, Jan. 14 1897. 3 J. S. Brett, Esq., 3 Dear Sir, — Please pay the bearer, Mr S. Howes, 3 E Sixteen Dollars from the funds left with you this morning. i »E John Giiison. j 5 Chattel Notes— A promissory note is Payable in money. A chattel note is not payable in money. A chattel note is, — ( i ) payable in some specified goods or personal property. (2) It is not negotiable paper. (3) It must be used in the name of the payee. (4) No days of grace are allowed. It is the duty of the maker of such a note to deliver the specified articles mentioned in the note at the time, and in the manner directed in the note or at the place directed by the payee. If he neglect to pay the goods at the time and in the manner as agreed upon, the payee may demand payment in money. He may tender the articles if they are portable. If cuuibersome he may offer to deliver. If the payee refuses or neglects to receive them, the debt is discharged by the tender of the articles. If they are refused and left in the hands of the maker of the note, he may hold them as a bailee for the other party, giving them ordinary care at the expease and risk of the payee. If afterwards the payee requests delivery of the goods, they must be given up to him if he pays the expenses incurred en them in the meantime. Form i. ZZZZZZZZZXXXXZZXZZXXIZ agxnxuiiixiiro $40 Manilla, July 20, 1897. On or before the I St day of December next, I promise to pay Samuel J. Ferrell, at his storCj one hundred bushels of good White El- ephant Potatoes, at forty cents per bushel. W. J. Hammill. Form 2. iiimxuxiiTHixixiixxngimn ozzzs Preston, March 15, 1897. Six months after date I promise to deliver to Thomas Gibson, at his storehouse, 45 p.ickages of first-class Lake Trout, "and 55 packages of No. I White Fish. J. J. Ball. fTTTTTTTTTTTTTTTlriTTTITTIITITITTIITTITITTTTIIITTTTTTTTTIItTITTTTirTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTf 94 ACCOUNTS, INVOICES, &C. ACCOUNTS, INVOICES, &c. CHAPTER 25. Book Account. Book ok Okkunai. Entry. Entries ok Transactions. Entries— How Made. Mistakes ani> Corrections. Invoices with Forms. A Bill with Form. Invoice ok Shipment. An Account with Form. Creiut Note with Form. A Month Ev Statemeni with Form. The Terms. An Account ok Pitrchase with Form. An Account ok Saees with Form. Enkorcing Collection ok Book Ac- [ counts. 1 A Book Account is a collection of business transactions with one per- son consisting of, either debits or credits or both debits and credits. These transactions may be sales of goods, payments, services rendered, etc., or all or any of them. These are usually gathered together in one place in a book called the Ledger, 2 A Book of Original Entry is the one in which the entries are first made and is the one which is really evidence at law. There may be a number of books of original entry in a business. The stubs of cheque and receipt books, counter foils of bills and invoices, letter press copies of invoices, day books etc., are all books of original entry. 3 Entries of Transactions— It is important that the first entry of the transaction be clear, definite and complete. It should state: — (i) The date on or about which the transaction was made. (2) The person with whom the business was done and his residence and any special circumstances as to whether it was done with him personally or with his agent. (3) The particulars of the transactions, such as stating whether it be a purchase, or sale, or payment, and the items of charge or credit and the value of same. (4) The terms of payment. i ACCOUNT??, I.VVOtCES, t^T. 95 M. ORM. Ac- per- hese ill or 300k first cipt day the nee fith be or I I (5) Any items of s|>ecial interest, such as tie person to whom the delivery was made, etc. 4 Entries— How Made— It is necessary that the entry of the transaction be made. (i) As near the time of its occurrence as possible so that there may be no slip of memory. t (2) In the case of sales of goods entries should be made when goods are ready for delivery. (3) The particulars should be of a specific nature, not general, as a general charge would be lacking in evidence to support it. (4) Entries should not be mere memoranda, but should be made for the purpose o( charging the debtor. (5) Entries should be made by the person who made the bargain v;hether he bt: a principal or an agent. 5 Mistakes and Corrections -The entries in a book of original entry should never be scraped or rubbed out, nor should anything be interlined between them. A person may scrape or rub as he pleases in the books he carries the transactions to, without invalidating or injuring the books as evidence, but he must leave the original entries as they were made. If a mis- take has been made, simply rule out the transaction with red ink, leaving it that it can still be read, or write "Void," or some such word, before it or across it. To correct the mistake, write out the transaction afresh, correctly, in the book, and make reference to the correct entry on the incorrect one. 6 Invoices — Sale^ of goods are usually accompanied by a detailed state- ment of the goods, called, an invoice. Such statement should be very explicit giving ' (i) Date of purchase and name of purchaser. (2) The term upon which the property was sold. (3) A full list of the goods, giving numbers, marks, brands, quantity, such as weight measurement or number, the price of each and the total price. (4) The number of cases in which it is packed, the marks or ad- dress and the particulars of transportation. The invoice head- ing should contain such words as "Bought, of," or *'Sold to," The following is an oidinary form of invoice; .H-TaC-Xaiuii. I ■ i i TTihT ii 'TlWCTnil i Mmk> ill' 96 ACCOtTNTS, INVOICES, SlC. FORM OF INVOICE. Montreal, Mar. i, 1897. Messrs. J. R. Boyd & Co., Bowmanville, Ont. Bought of WILSON BROS. & CO., Wholesale Dealers in Groceries, &c. Terms : 30 days or 2% off for cash. A 25 D. S. c= X 3 1 2 3 Chests Y.H. Tea, Bag. -"Rio Coffee, Boxes P. G. Starch, Bbls. W. G. Sugar, 120-20 117 -19 123 - 20 Shipped per C.P.R., in 5 boxes, I bag and 3 bbls. 2iolbs. loolbs. i5olbs. - 360 - 59 3iolbs. 50C. 24c. 04c. 8.lc. 105 00 24 25 60 00 25 59 214 84 7 A Bill is a list of goods purchased or services rendered, giving the par- ticulars, etc. It is usually made out at the time of the transaction and contains only debits or credits, not usually both. The particulars are not generally given as fully as in an Invoice. The heading should be in the form "John Smith to J. W. Jones Dr." FORM OF BILL. TiiORNHURv, Jan. 19, 1897. Mr. F. C. McDowall, To J. H. NOTTER, Dr. Dealer in Groceries, Crockery, Glassware, &c. lbs. Cheese, II Bacon, II Raisins, Cans Salmon, Broom, Lamp Chimneys, Qi Received payment, J. H. Notter. 1 6c. 48 I2-JC. 5° IOC 20 i8c. 36 30 c8c. 16 $2 00 ACCOUNTS, INVOICES, i^'C. 97 = 48 50 20 36 30 16 00 Form of Invoice of a shipment of goods sent to a commission merchant for sale on account and risk of shipper. FORM OF INVOICE OF SHIPMENT. Wai.kerton, Jan. 5th, 1897, Invoice of Shipment of Wheat sent to John Wilson, Toronto, Ont., to be sold on account and risk of Wm. Stkarns, Consignor. bush. 400 500 Red Wheat No. 1 Hard, White .1 I. Paid freight on same, 900 bu. C" I 05 («. I 1 <& 05 $420 00 550 00 45 00 $1015 00 8 An Account is a detailed statenunt of all the transactions with a per- son, either debits or credits, or both, during"; a certain time. It will include all kinds of transactions, sales, purchases, Veturns, payments, allowances, labor services, etc., etc. The heading should have such words in it as "In account with," and a balance due one person or the other is usually written on it. FORM OF ACCOUNT. Durham, Feb. 21, 1897. Mr. W. B. Hill, Town, In Account with CHRISTIE & AGAR. Jan. Mar. Sept. July Aug. To !0 00 Pipes, I Coal Stove, I Platform, Putting up Stove, Repairs to Water Pipes, 4 hours of man, 13 feet half-inch pipe, Qi 5c. 1 Bath and fittings per contract, 2 hours of man and helper repairing furnace Cr. By Cash II Note at 3 months, from Mar. Balance due. 25 90 I 00 75 I 00 65 14 50 I 20 8 00 20 00 44 'o 28 00 $16 10 9 Credit Note — A credit note, sometimes called "Credit Memo," or 'Credit Invoice," is a statement crediting a person with goods returned or 98 ACCOUNTS, INVOICES, SiC. reductions or abatement) in prices of goods already invoiced and charged to him. It is the converse of an ordinary invoice. It is the custom to have the Credit Note forms printed or written in red ink that they way l)e readily distinguished from an ordinary invoice in checking off a monthly statement, FORM OF CREDIT NOTE. Hamilton, Jan. 12, 1897. Charles F. Ferguson, CREDITED BY W. M. WILSON & CO. By I chest of Y. H. Tea returned, 80 lbs. (a 25c. $20 00 10 A Monthly Statement is a synopsis of an account, a brief enumer- ation of the different purchases during the month, together with any payments or credits on the purchases. It is sent out monthly to persons who purchase on credit, so that any necessary correction may be made before settlement. The average due date of the purchases in the statement is usually found by equation, and a draft drawn for the balance, dated at the equated due date. FORM OF STATEMENT. Hamilton, Jan. 31, 1897. Mr. Chas. T. Fer(;uson, Hanover, Ont. In account with W. M. WILSON & Co. Jan. Jan. 3 10 20 To Invoice 30 days M M 60 days, II II 10 days. Cr, By Cash .1 Credit Note (returns) 11 Note 90 days Balance due, our favor Due by equation Feb. 19, 1897. We have drawn on you for balance at 30 days from January 19. Kindly honor on presentation and oblige, W. M. Wilson & Co. 140 00 228 69 '85 80' 554 49 100 00 20 00 200 00 320 00 234 00 i ACCOUNTS, INVOKKS, 9n: 99 11 The Terms — When sales ofgrjods are nude on credit the terms are usually named and mentioned in the invoice or l)ill of j^oods sent at the time of shipment. It frequently happens that accounts are allowed to run, consist- ing of numerous small charges for goods, services, etc. In the absence of other agreement, these are usually considered due when an account of them is rendered. Many tradesmen and merchants have special statements of terms printed on their account forms, such as "AccoiintH due when rendered;" or "Interest charged (it the rate of one pfvceut. j>er inunth after the date of this account." Such terms when printed or written on the account are binding on the debtor unless he ohjects to them. In that case special terms would be agreed ujjon. 12 An Account of Purchase is a statement of goods purchased by one person for another, giving a full list of the articles purchased, who pur- chased from, the terms of purchase, the manner of shipment and the total cost, including commission expenses, etc. FORM OF ACCOUNT OF PURCHASE. Coi,MN(;\vooi>, Jan. 7 1897. Account of purchase of Wheal made by John Wilson, Commission Merchant, Collingwood, for account and risk of A. F. Gi.enn, Toronto, Ont. bush. M 600 300 White Wheat Red It ■Charges- 1 15 1. 00 690 00 300 00 990 00 I 25 19 80 21 05 $1011 05 Cartage Commission 2% Charged to your account E. & O. E. 13 An Account of Sales is a statement made by a commission mer- chant of goods sold by him, on account and risk of another. It should give a list of the sales, to whom sold, the price and terms of sale, also all charges paid on the goods, also charges for commission, storage, advertising, etc., and the net proceeds shown as the difference between the sales and expenses, also how net proceeds are sent or credited. lOO ACXrOUNTS, INVOICKS, ETC. FORM OK ACCOUNT SALES. Hamilton, Jan. 25, 1887 Account of Sales of 900 bushels of Wheat received Jan. 9, 1897, to be sold by John Wilson, Commission Merchant, Hamilton on account and risk of William Stearns, Walkerton. Consignor. Jan II II Jan. Sold 200 bu. W. Wheat II 400 It R. Wheat II 300 II W. Wheat ■Charges- Paid Cartage, 900 bu Storage, 900 bu. Commission, i.\% of sales Net proceeds placed to your credit E. & O. E. John Wilson, ® ® 1.25 250 00 125 1.30 J 500 00 390 00 4 50 28 00 1 1 40 00 46 50 1093 13 Enforcing^ Collection of a debt on the evidence of a book ac- count is usually accomplished by suing in a court of competent jurisdiction and placing in court a statement duly sworn to before a magistrate or com- missioner on the following points: — /t) That the foregoing copy of account is taken correctly from the book of original entry. (2) That the charges were made at or about the time of their respective dates. (3) That the goods were sold and delivered, or the services rendered at or about the time the charges were made. (4) That the charges are correct and the account just. ftfiCti:il>TS AND RKLEASKS. i6t CHAPTER 26. RECEIPTS AND RELEASES. 'A Rkceipt. ICxi'iJciTNEss Necessary, i'reskrvation ok sluils ov receipts. Various. Forms of Receipts. Rki.ease. Form ok Mutual Release. Composition Deed. Form ok Composition Deeo. 1 A Receipt is an acknowledgement in writing, that the person by whom it was signed has received from a party named in the receipt, something of value, such as money, negotiable paper, goods, services, etc. \s a rule a receipt is strong evidence, th^t such money, goods, services, etc., have been given. It is not conclusive evidence, however, as the receipt might have been obtained by fraud, or misrepresentation, or mistake. The receipt may be contradicted by other evidence, and thus rendered invalid. There are many kinds of receipts. The following are a few of the kinds in use. (i) Receipt for money, or services, or goods paid, in e.Uireor partial settlement of an account or debt. (2) Deposit Receipt, as per page 84. (3) Warehouse Receipts. (4) Shipping Receipts. (5) Bills of lading. I 2 Explicitness Necessary — The carelessness of many business men in the drawing out of receipts is simply surprising. 'I'hey are fretjuently noth- ing more than a simple acknowledgement of money paid, without regard to the purpose or reason for which it was paid, or to the application of such payment. Every receipt should state explicitly the intention of the parties respecting the application of the payment, and should give all reasonable particulars re- garding it. For example : Smith pays $10 to Jones for rent. Now the re- ceipt given by Jones should not only state that the $10 was for rent, but should state what particular month the rent was for ; also the property on which the rent was paid. Too much care cannot be exercised in drawing business papers of this class. tdi VKCV.U'V, AND REJ.EASES. 3 Preservation of Stubs of Receipts -Kvery careful business man will net his receipts printed and bound in book form, with a stub attached on wljich to write p.irti'-'i!:!>'s of the receipts given, such us : — (i) The date and number. (2) The name and adiuxixxuxixxuKxxxxxxxxxxxzxxxxxxxxxzxxxxxxxxxi (iixxxxxxxxxxfxxiUTmx xx xx xxxxxi xxnj.li rxxxixp No. 29. K ADV, May i, 1S97. Received from Alex, (larvic his promissory lote in my favor, dated j March 1 5th, for Sixty Two ,V,'o 1 )()llars, payable three months after date at the Merchants Bank, Owen Sound, in full of account. L$^>2.4o- VVm. Beaton. XXX3tXlXXXXXXXXXXXlXlXXXXXXXlXXXlXXXXXXXlXllXXlXXXlX HXllXXXXHlXXlXmiXXXXXXX XlXXX>CXXX.CXXXXXl (zxxzi (Endorsement receipt for money paid on a note. To be written across the back of the note.) Kkaoy, Aug. 1, 1897. Received on the within note 'J'hirty Dollars. $30. Wm. Bkaton. Receipt fof\- title deeds ; Desiioro, Jan. 30, 1897. Received from Alex. Sinclair the following title deeds of lot No. 10, con' cession 7, in the township of Derby, for safe keeping, said deeds to be re turned to him on demand : — Deed, John Smith to Alex. Leslie, dited March 4, 1878. „ Alex. Leslie to Thos. Sloan, dated July 9, 1882. „ Thos. Sloan to Paul Wardell, dated Feb. 4, 1886. „ Paul Wardell to Alex. Sinclair, dated March 4, 1 896. Wm Douglas. fo4 ACCOUNTS, RKLEASES, ETC. 5 Releases — A release is a written discharge of a claim, debt or demand held against one person by another. It is given under seal, and will cancel any debt, whether acknowledged or not. No special form of words is necessary, all that is necessary is that the words convey the intention to release, ac(iait and discharge the person from the debt. Releases are nude (i) [ndividaal—By one person releasing another from a debt or demand. (2) Mutual — Where two persons have been trading with one another, and have contra accounts. When a settlement is made they frequently release one another from all demands. ' 6 Form of General Release g-iven Mutually— This Indkn 1 ukh, ni.ide llic isilidayof M,irch. A. D- i'''j\, between Henry liall.ir.l of the first part ; and J.Tines Knirfield of the !.ecuiul part. Whereas, there have been (li\ers .nccoiints, dealings .ind trans.-ictions between the said parties liereto respect" ively, all of wnicn have iijw been li.ialiy adjiisle I, settled and dispo^ed of, and the said parties hereto havi respectively agreed 10 give e.ich other the inutiiul releases and discharges hereinafter contained in manner heieinufter expressed. Now therelore these Presents witni'ss, that in cunsideration of the premises and of the snm jf one dollai, of lawful money of Canada tu each of them, the said parlies hereto respe jtively paid by each of them at or before the sealing aiid delivery bere^»f, (the receipt whereof is herfby acknowledged), each of them the said parties hereto respectively, diiih hereby for himself ai.d ln.rself respecti\elv, his and her lespective heirs, executors, administrators and assigns, lemise, release, and forever acc|uit and discharge the other of tbcuu his and her heirs, administrators and assigns, and all his, her and their lands and tenements, goods; chattels, estate and effects respectively whatsoever and wheresoever, uf and from all debts sum and sums ot money, accounts, reckonings, .actions, suits, cause and causes o( action and suit, claims and demands whatsoever, either at law or in ecpiity, or otherwise howsoever, which either of the said parties now h.ave, or has, 01 ever had, or m ight or could have against the other uf them, or any account wnatsocver, of and concerning any matter, cause or thing whatsoever between them, the said pari.es hereto respectively, from the beginning 01 the world down to the ilale of these presents. In witness whereof thi said parties have hereunto set their hands and seals. Signed. -Sealed and Delivered / HENRY liALEARD. |L, S.| in the presence of / JOEL KR! BBS. I JAMES KAIRKIEED. [L. S I 7 Composition Deed — When a person who is insolvent settles with his creditors for smaller sums than his debts to each one, the creditors grant him a release from such debts under seal. The release is called a Composition Deed. The following is a common form. To All. Pkrso.ss to vhoin these Presents may come, we wIut have hereunto set onr hands and seals, cred- itors ol lohn Shrivcr of the town of lirockville, send greeting. \\ heieas ihe said John bhri\er is indebitd to us his said creditors, in .-everal sums cjf money, which lie is nd able fully lu satisfy and discharge : we therefore have agreed, and du hereby agree, to accept ihe sum of Two Hundied iJollars in full pajmeni aid satisfaction of all ihe debts, owing to lis respectively at the date heieof, by and from the said John Shr.vcr, which is paid by or for the said John Shriver to .Andrew Stoims, Sidney Warntr and I'illa Klii.t, lur ihe use of, and to the inte.it that the same may be shared and divided aniong.st us bis said creditors, in propoition and- ttccodiing tn the debts to lis severally ilue aJid ij^v-ing. Now tlierefoie kno* je, thai fur ilie consideration aforesaid, e.acb of ns, the said i leditcrs who have here unto set our hands and seals, for him and lierseif, his and her heirs, e.vecutors and co-partners, doth by the e presents, remise, release, aiul fure\er discharge the said Jt.>hn Sinner, his heirs, e.\ecuiors ar,d administrators, of and from our said several debis, ,ind all, and all manner ol action and actions, claim or demand, which against the said John Shri\er, each and every of us the said creditors now hath, or which each and every of our heirs, executors or administrators, respectively, hereafter may, can, or ought to have, claim, or demand for, ujion, or by reason of the saiit se\er.il anil iespecti\e debts to us severalty due and owing, or for or by reason 01 any other matter, cause, or thing whatMievcr from the beginning of the world. in witness wheieol the said parties hereto have hereunto set their hands and .seals this 15th day of Match, A, I). iSyi. Signed, Sealed and Delivered ANDREW SIORMS. (L. S.) in the presence of .' SIDNEY WARNER. (US.) MOSES EKY. I , iJlLLA bLib'T, (L. S. INTEREST. 105 CHAPTER 27. cred- liittl to we In ai.d Jii.ver, lise of, |i and- here [the e |ntors, vhich biy of 1 for, bason 5.) INTEREST. Definition. Thk Elkments ok Cost. On What Allowed. Le(;.\i. Rate. .\nv Rate May me A(;reei) Upon, ('dm POUND Interest. Discount. • 1 Peflnition— The popular definition of Interest is "Money paid for the use of money. " To be a little critical, we might observe that the money paid is cash, from a Book-keeper's view point, and this cash is paid for something just the same as cash is [jaid for merchandise or anything else. It would be incorrect to call cash bread^ because it was paid for a loaf of bread. VVe pay cash for interest— for the use of money. The use of money is interest, strictly speaking. It is usually calculated at a certain rate per cent, per year. 2 The Elements of Cost— The elements that rci^ulate the price of inteiest at any particular time or place are, — (i) The real worth of the use of the money at the time. The standard for this element can be reckoned as the rate on (lovernment or Municipal bonds or debentures where the security is unquestionable and the interest paid regularly. (2) The risk attending the lending, of it. If there is any risk of losing it, the lender, who runs the risk, would expect pay for the risk, over and above ordinary rates. (3) The supply and demand. Plenty of money and no person wishing to borrow will produce a low rate. Scarcity of money and many persons want- ing it, will produce a high rate. 3 On What Allowed — There are three classes of cases where interest is allowed, as follows : — (i) Where it has been especially agreed upon. Example — an interest bearing note. (2) Where money is borrowed or a delit is contracted or money detained, although there is no ex[)ressed agreement, it is customary to pay interest in such casus, at six per cent. (3) Where a debt is not i)aid when it becomfs due it will bear interest after maturity at six per cent. io6 INTRRF.ST. U': ', l! ::; Pi ^^1 ■ !" .' I' 4 Legral Rate The legal rate in Canada is six per cent. The meaning of this is, ' (i) That in case interest is provided f(ir, in a contract or bargain and no rate mentioned, the rate will he six per cent. (2) If a debt is not paid when due, interest will be collectible at six per cent, from the due date till .paid. If a promissory note is not [)aid when due, and there is no interest stipulated in it, six percent, is collectible after maturity. (3) If a note or bill of exchange stii)ulates for interest without naming a rate, it will bear interest from its date at six per cent, until it is paid. If it shows an agreement for a higher rate liian six [ler cent., by such words as, "with interest from date at ten percent, i)er aunun),"this will bring interest at ten per cent, till due, but only six per cent, till after maturity, (4) If a note or bill is to draw interest from its date until it is [)aid at a higher ryite than six per cent., the agreement for such must be evidenced by such words as "with interest from date, both before and after maturity, until it is paid at ten per cent, per annum." >» . 5 Any Rate May be Agreed Upon between the parties, and such an agreement is enforceable at law. 'i'here are no restrictions as to what persons may agree upon in the way of interest. If I agrcp to pay you two per cent. per month, that is 24 per cent, per annum, you can collect this amount as there are no usury laws in Canada. 6 Compound Interest — On Mortgage or Real Estate, interest may be collected on ititensl in arrear, but not at any higher rate than what the mort- gage itself bears. This must be agreed upon in the mortgage. 7 Discount is interest allowed for the payment of a debt before it is due. Ahhough known by the name of "Discount, " there is no difference between it and Interest, and the m.ijority of hjok kee[)ers put both into one account. If Smith holds a note against Jones for $100, due a year hence, and he sells it to Jones or any other person now, for $90. he simply g.'ts tlie use of the money for a year and pays for ii with .$10 for the note. It is the use of the money he pays for, the same as in interest. There are two kinds of Discount differing according to the mode of calculation. (l) Bank Discounf. which is the simple interest taken off the face of the debt for ])aynient before it is due the. amount remaining is called the Present ■ Worth. (2) True Discount whei-e Interest on the present worth only, i-: t.iken off the debt for jiaymeni l)cfore it is due. my be niort- i SALES OF PEKSON.M, I'ROI'KRTY. 107 CHAPTER 2?. SALES OF PERSONAL PROPERTY. ' Okkinm HON. , Vendok. ^ , Vkndki;. ^ Sai.k \ KKsrs Bakter. NlXKSSAKV 1 '01 NTS. Thk I'RoricRTV Must Exist. Thk I'Koi'KUTv MrsT i;k LtcAi.i.v Saleaki.e. Co.Mi'iyi K.NT Pariiks. Ml'I L'AI. AsSKNI. 'I'm I'kK I.. Wniiour I''raui>. The St.\tu IK ok Frauds. EviDKNCK or A Sale. j Sale Must ue Bona Fide. [ 1)11,1, OK Sale Form, 1 Definition — A sale of personal i)roperty is a transfer of ownership for a price payable in money. The money paid is the consideration. Since the law of contracts is largely the found.ition of all commercial law, frecjuent ref. erences will be made to the foregoing chapters on contracts and some of the principles repeated. 2 The Vendor is the name often given to the seller of property. t-\\ w ill s due. ^veen it count, le sells of the of the ^scount face of called [• taken 3 The Vendee is the name for the purchaser or buyer of any property. 4 Sale versus Barter- The consideration for the property transferred in ca^e of a sale is tnoney. If.\. exchanges five cords of wood with B for a suit of clothes, it is a barter— not a sale. Money is the only standard of value, therefore no value can be established in a trade. 5 Necessary Points — The seven requisites to a contract may be re- called and app'ied to sales of personal property. See Chapter i Section 10. (i) It must he possi!)le by existence of the propeity. (2) It must i)e Ic^al. (3) The parties must be com[)etent. (4) It must be assented to by both [)artics. (5) There must be a consideration or price. r, (6) There must be no fraud. ' . ■ " II '\ loS SALRS OK I'KUSOVAI, PROPERTY. (7) It must conform to the statute of frauds as to being evidenced by being in writing in some cases., or by a partial payment or partial delivery of the goods. . 6 The Property Must Exist— A sale of property can not take place unless the pro|)erty actually exists. If it is dentroyed, and the parties, not knowing anything of its destruction, sell and buy it, the sale is void. A sells B a certain piano. If the piano has already been burned the sale is an impossibility. 7 The Property Must be Leg-ally Saleable— Any sale of property prohibited by statute is void. A sale of goods smuggled into the country, or manufoctured in the country secretly, without paying excise to which they are subject, is void. Stolen goods are not .saleal)le, as the seller is not the owner and cannot give a better title than he has himself. The lawful owner can claim them wherever he finds ihem. 1 8 Competent Parties -The giods must be the property of the seller, and he must be of legal age and sound mind, or the sale would be voidable. 9 Mutual Assent— B aU parties must be willing to transfer the property, and must agree as to the price. This is usually accomplished by an offer and an acceptance. 10 The Price is the consideration that moves the seller to part with his property. It must be payable in money. 1 1 Without Fraud -As in any contract, so in a sale of property, fraud by misrepresentation or concealment, renders the sale voidable. 12 The Statute of Frauds provides that all sales of personal property under l-'orty Dullars ($40) may be made verbalhj. Over that amount they must bj evid.inced in some one of the following ways, by— * (i) A partial payment, (earnest money,) or (2) A partial delivery of the goods, or (3) Some memorandum of the bargain in writing to be signed by the parties chargeai)le therewith. The memorandum may be of the simplest, yet if signed by the parties it will comjjly with the statute. The following is a simple form; — ,'d by ry of place ;s, not A sells IS an iroperty ntry, or they are e oNvner rner can le seller, dable. property, ojfer with his rty, fraud property )unt they |ed by the parlies it S.U.KS OK I'KKSONAL PROr'KRTV. tot) KiisYTii, Jan., 15, 1897. I). Milts buys from James Agncw sixty colonics of Italian bees at six dol. lars per colony. - I). Hilts. J as. Agnew. 13 Evidence of a Sale -Kvcry sale of personal property should be evidenced in one of two ways:-- \'iz: either (i) By an actual, immediate, and continued change of possession, or (2) The registration of a bill of sale within five days of the execution of bill of sale in the office of the Clerk of the County Court of the district This applies to Ontario. The limitation of the time tor registration or filing of a bill of sale to five days has been dispensed with in Manitoba, so that now filing and registration may be effected at any time. The instrument, however, taking effect from the date of filing or registration only, as against execution, creditors, subseiiuent mortgages or purchasers. Suppose A sells to 15 a horse for .$80. It is expected that the horse would be removed forthwith from .\'s stable to B's stable, every person may then know of the change of ownership. If however the horse is to remain in A's stable, people generally could not know of the sale. If in any way the sale is not appaient by the property changing hands, it is necessary to register a bill of sale so that interested persons may be able to find out any change of owner- ship. This is especially necessary in case of a person selling out a stock of goods in a shop to another person and still remaining in the shop and carrying on the business as usual. If the seller retain possession of an article after the sale of it, unless a bill of sale were registered, the statutory law presumes that there is fraud in the sale. 14 Sale Must be Bona Fide— There have been so many cases of at- tempt at fraud, before tiie courts on account of ;)ersons transferring their prop- erty to their friends, to save it from creditors, that the legislation has been made very stringent to prevent all pretended transfers. (i) The purchaser must make affidavit that the sale is bona fide for a consideration that is named in the affidavit, and not for the purpose of secur- ing the property against the creditors of the seller. (2) The witness to the execution of the bill of sale must make affidavit as to the proper signing, etc., of the document and as to the date of the execution thereof. ■i'l TIO SALtS OF PERSONAL PROPKRTV. 15 Form of Bill of Sale- Tms Indf.nturk made the 24111 day of January, in the year of our Lord one thousand eij^ht hundred and ninety seven. IJktwkkn William Kyle Ireland (jf the lown of Nfeaford, in the County of Oey and Province of Ontario, liookseller and Stati(jner, the vendcjr of the l""irst I'art, and Henry Peter Adair, of the Town of Meaford aforesaid, sales- man, the vendee of the Second I'.irt. Whkrkas the said party of the I'irst i'arl is possessed of the Stock of Books and Stationery and shop fixtures herein set forth described and enumerated, and hath contracted and ai,need with tiie said party of the Second I'art for the absolute Sale to him of the same, for the sum of Nine Hundred Dollars. Now THIS Indhni'I'ki. wiiNKssKiH, that in pursuance of the said agree- ment, and in consideration of the sum of Xine Hundred Dollars of lawful money of Canada, paid by the said party of the Second Part to the party of the First Part, at or l)efore the sealin;^ and delivery of these Presents; (the receipt whereof is hereby acknowledged,) he, the said party of the l-'irst Part, Hath Haro.mnkd, sold, assigned, transferred, and set over, and by these Presents Doth B.\ri;.\in, sell, assign, transfer, and set over unto the said party of the Second Part, his executors, administrators and assigns. All those the said Stock of Books and Stationery and shop fixtures as per inventory hereto attached and marked "A." And all the right, title, interest, property, claim and demand whatsoever, both at Law and in Equity, cr otherivise howsoever, of him the said party of the First Part, of, in, to, and out of the same, and every [)art thereof; To HAVK AND TO HOLD the Said hereinbefore assigned books. Stationery, and shop fixtures, and every of them, and every part thereof, with the appur- tenances, and all the right, title, and interest of the s.iid 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 and their sole and only use FOREVER: And the said party of the First Part, Doth hereby, for his heirs, executors, and administrators, COVENANT, PROMLSE and agree with the said party of the Second T'art, his executors and arhiiinistrators, in manner following, that ie to say, Th.\t he, tlie said party of the !• irst Part, is now rightfully and absolutely possessed of, and entitled to, the said hereby assigned Books and Stationery, and shop fixtures, and every of them, and every part thereof: And that the said party of the l-'irst Part, now hath in himself good right to assign the same unto the said party of the Second Party, his executors, admin- istrators and assigns, in manner aforesaid, and according to the true intent and meaning of these presents: ,\nd that the said party hereto, of the Second I'art, his executors, administrators and assigns, shall and may from time to time, and at all times hereafter, peaceably and (juietly have, hold, pos.sess, and enjoy the sa.d hereby assigned property, and every of them, and every part thereof, to and for his own use and benefit, without any manner of hindrance, interruption, molestation, claim or demand whatsoever of, from or by him the said party of the F^irst Part, or any [jcrson 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 Part, effectually idemnified from and k 1 SALES OF PERSONAL PROPLRTV. Itl flgainst all former and otht;r l)argaiiis, sales, gifts, grants, titles, charges and iiicumbraiiccs wliatsoevcr : And moreover, that he the said party of the I-'irst I'art, and all persons rightfully chiming, or to claim any estate, right, title, or interest of, in, or to the said hereby assigned goods and fixtm'es, and every of them, and every part thereof, shall and will from time U) time, and at all times hereafter upon every reasonable rcqiH'.it of the said party of the Second i'art, his executors, administrators or assigns, hut at the cost and charges of the said party of the Sccoiid i'art, make, do and execute, or cause or procure to be made, clone and executed, all such further acts, dci-ds nnd assurances for the more effectu- ally assigning and assuring the said hereby assigned goods and fixtures unto the said party of the Secmid Part, his executors, administrators and assigns, in manner aforesaid, and ai cording tn the true iment and meaning of these Pres- ents, as by the said party of the .S^>cond i'art, his executors, administrators or assigns, or his Counsel shall be reasonably advised or rei|uired. In WrrM.ss W'hkri.oi', the said parties to these i'rcscnts Iiave hereunto set their hands and seals, the day and year first above written. Sk.nI'.h, Si:\i.i:ii AND Dki.ivi.kki) | ^\'. K. Ikioi.and. (P. S.) IN Tilt; I'Rt.sKNCK OK .- \V. J.CuAV. J H.l'. Adaik. (i,. S.) Affidavit of the purchaser as to the sale being bona fide for value: — anery, i|)ur- First ty of and utors, party owing, y and Ks and ghtto . dm in- intent econd ime to s, and y part prance, lim the 11) that ;rwise, |m and County oi' Gkev. ] I, 1 Icnry I'eter Adair, of the Town of Mcaford, in the C!ounty of drey, the vendee in the foregoing Bill 'IT) WIT. I of Sale, make oath and say: That the sale therein made is />o//(7 fidi\ and for good consideration, namely: — The sum of Nine Hundred Dollars, and not for the pur[)ose of holding or enabling me, this deponent, to hold the goods mentioned therein against the creditors of the said bargainor. Sworn before me at Mealord, ] in the Countv of Grev, this 24th ,- in the l.ounty 01 lirey, tnis 24th j- H.P.Adair. day of Januaiy, A. D. 1897, | b. R. SiN(;, A contniiisioncr for taking ajj'idavits in //. C. J. Afildavit of Witness All P.ills ot Sale, Chattel and Real K.tate Mort gages, deeds of land, ^:c., require an affidavit of the person who witnessed the signatures, covering the following points as proof of the proper and regular execution of tlie document:— ' ^ (i ) That the witness was present and saw the signing, sealing, &c. (2) The place where such execution was done, and date of execution. (3) That he knows the parties to the contract. (4) That he is the witner ; to the document, r 112 SAI.F.S OF PERSONAf, PRnPF.RTV. Affidavt of witness proving, signing, sealing and delivery of the Rill of Sale. ON'l'ARK): | I, William James dray, of thcTown of Meaford, in I the County of Clrey, gentleman, make oath and say: (.OUNTV ov UKES. \ Ti, at I was personally present, and did See the within •|., > \\iT : I '^'" "f^ ^'^'•-' ^iJ'y signed, sealed and executed hy Wm. J Kyle Ireland and Henry I'eter Adair the parties thereto.' Anu that I, this deponent, am a subscribing witness to the same: And that the name W. J. (Iray, set and subscribed as a witness to the ex- ecution thereof, is of the proper handwriting of me the deponent: and that the same was executed at the Town of Meaford, on the twenty fourth day of J an nary, A. 1), 1897. Sworn before me, at Meaford,] in the County of drey, this 24th - W. J. Gu.w, day of January, A. I). 1897. j C. R. Sing, a Conuiiissioner for taking affitiai'ifs in II. C.J. Note. A full inventory of the stoc/c of goals would he attached to the Hill of Sale. If only a few articles are sold, then they woidd be fully described in the Bill, of Sale itself. u II i *\- 5 ' CHAPTER 29 SALES OF PERSONAL PROPERTY. f I'lME OF PeRKORMANCK. I EXKCUTKD SALFiS.. KXKCUTORV SaLKS Sai.ks on Triai.. Sai.ks hv Sample or Description. Sai.ks ok Goods in Transit. CRKItlT. Conditional Sales. Warranty — Definition. Warranty as to 'I'itlk. Warranty as to Quality. Implied W'arranty. Stoppaok in Transitu. [ Annullment of Sales. Time of Performance— A sale of property may be E.vecutcd, if the articles sold are immediately transferred to the purchaser, and paid for, or ('^f EjL'ecutory, if the property is to be delivered or transferred at some future time. An executory sale is simply an agreement to sell. It is com. pletcd by the delivery of the goods. Its time of completion depends on the terms of the bargain It may depend on the happening of some event such as the payment of the goods. 1 ill SAl,f:s OF PI'.kSONAI. PROPKUTV. It? 2 Executed Sales -In executed sales there must be a delivery of tlie property which may be (I) An Actual Delirery, where the property is portable and can be easily handled, or (;.V A Uon.stnicfive Delivery, where the article cannot be handled and something is handed to the purchaser that takes the place of the goods. The following are e\ami)les :— (i) A Hill of Lading to represent goods in the hands of a Railway or Shii)ping Company. (2) A warehouse receipt representing goods stored. (3) 'l"he key of the storehouse where the goods are kept. In case of delivery hy bill of lading or warehouse receipt an assignment should be endorsed on it. 3 Executory Sales are those not performed at the time of making an agreement to sell. It was noted in the previous chapter that the property must e.v.ist when the contract is made. I might agree to sell you a mowing machine to be delivered on the loth of June, next. If that machine is now in existence it is an agreement to sell. If I agree to make a machine, and deliver it to you on the loth of June, next, you have made a contract with me for labor and material and not a contract of sale. In an executory sale, the seller runs all risk until he has transferred the title to the buyer. If the mowing machine above referred to, were destroyed by fire before I deliv- ered it to you, it would be my loss. Executory sales are frequently conditional. Of these we might mention (i) Sales on trial, (2) Sales by sample or description, (3) Sales of goods in transit. In a conditional sale; the title of the property does not pass to the pur- chaser until the conditions are fulfilled. to the Lt some lis com- on the lit such 4 Sales on Trial — Very fre([uently sales are made, conditioned on the article suiting the purchaser, or doing some specified kind of work. 'I'hcre should be a specified time for trial mentioned in the agreement. The loss by wear or consumption during the period of trial falls upon the seller as he is still the owner. Though the prospective purchaser has posscsnion, he has not any title. If he does not approve of the article he must return it to the seller or notify the seller to remove it. If he does not return it or give notice that it does not suit, within the specified time, the sale is completed. A offers to sell to B a sewing machine for $30, but to give it to him on trial for a month . 1> must reject the machine within the month or he is bound to keep it. ti4 SALES OF Pf.RSONAI, PROPF.RTV. 6 Sales by Sample or Description Sales aiv often made by sample. X shows N' a sample bushel ol apples ami sells him i ooo bushels of such ap[)1es. There is an ex[)ress wariaiUy, tiial the looo busliel of ai)i)]es when delivered, will bo just such ap|)les as shown, in kind and ipiality. This ex pressed or imi)lied warranty is tlv ctuKlilio)!. of tile sale. If X trios to de- liver another kind or (pialily ol Iriiil, N' may refuse it or i^ive notire to tlic seller to that effect. In sales by de.scri|)tion, writtiii or vcrlial, goods must eorrespiind to the description. ( 'onnner<"i,il lr,i\ellers make almost all tlic wholesale sales either by sam|)le or description. 6 Sale of Goods in Transit -Cioods in transit by bo.it or rail may be sold, the condition beini; th.it the Lfo )ds arrive as expected. If the title of the goods has been transferred by indor-iem jiit of a 1);11 of kulinj^, the sale is not a conditional sale but a sale absolute. 7 Credit -Unless otherwise provided the [trice in any sale is payal)Ie in cash iminedialel;-. If cretlit is given it mu>t be a condition of the bargain. In an ordinary sale on credit, such as M selling X a suit of clothes at $20, to be paid in a month, the ownership passes from .\I to N innnediately, M receiving in return the right tcj charge N on his oooks. iM has no further claim or lien u[)on the clothes. They become N's property. M could not recover the clothes from X for non payment. 8 Conditional Sales There are a great many sales of machines, etc., by maiuilacturers and their agents on the "instalment plan." The seller gives the purc'haser p isscssion but not ownershi|) ; he retains the title until the prop- erly is all paid for. Such piymeiUs or instalments to oe considered a rental until the whole purchase money is paid, then the owner relini, so th it any luililT or ofti'-er could identify tlieni from liie description. In de-.cri lin;,' ;in ininiil, j;ivo a^e, color, sex, n.ime, strain of hreed, nnd any piiticniir ni.irks or spots. In de- scribing a machine or implement give m nulla lurer'.s ii.ime ami niiinlier, color, condition etc. Fa :'nple(i) One grey I'en^heron horse, i(i\ hands high, 5 years old, with both ■ ul icet white, and sm ill wliiie sp >t on f.rehoad, named Hob, l''-xaniple(j) One self-binder, 1 1 irvcst (^)ueen, nianufaotiirfii In iSi^y, by Massey Manufacturing Company, pain'.cd brown and grey with red stripes, in first class condition, numbered ^'1^7. 4 Must be Bona Fide Transaction l^vry chattel Mortgage must be proved to be fio/ia Jit/f mkI not f(jr the |)inp )se of defraii ling creditors, by the mortgagee taking an affiJ.ivit, relative to i', covering the fo'.lijwing [)oints. (i) That the moriuigor is truly indebted to the mortgagee in the whole sum mentioned in the mortgage. (2) That it is nude in good laith, for the express purpose of securing the debt due. (3) That it is not fvK the purpose of securing the g)ods against the creditors of the mortgagor. 5 Regfistration livery chattel mortgage must be registered in the of- fice of the Clerk of the County Court, in th.: County where the profoerty is, within five days after its execution, or it will be elTjctuil to hold the pro[)erty against any siibse(pient [)un:hasjr, iV •. It would be go'jd only as evidence of a debt between the parties. In M.initoba there is no li:nitation as tothe time for the filing or registration of a Chattel .\I )rtgige. It may be done any time. If a chattel Mortgage ij not registered or filed it is g 10 I as betw>;en the mortgagor and mortgagee. 6 Limitation as to Place - Chattel mortgages only hold the property in one county, viz., the county where they are registered ; and every chattel mortgage contain! a covenant that the property will not be removed from the county where it is situate. If it is agreeable to both jiarties that the property be removed to another county, then the mortgage should be transferred to I ^ ii8 CHATTEL MORT{;.\OES. the office of the Clerk of the County Court where the property has been taken to. If property is removed svithout consent, it may be seized and sold to satisfy the mortjj;ai;c. 5^, 11 7 Limitation as to Time A chattel mongige, in Ontario holds the property for one year only. At the end of tliat time the property is free, unless a new mortgage is made, or a renewal of the old one registered by the mort- gagee within a year of the registration of the mortgage. In Mmitoba a chattel mortgage liolds tlie property for two years and a renewal extends the mortgagee's rights for Two years longer. • i i:X 8 Limitation as to a Debt— Though the chmtcl mortgage holds the property for one year only in Ontario and two years in Manitol)a, ye^ it is good as evidence of a debt for twenty yenrs in Ontario and ten years in ^[ani• toba because it is under seal. Oreat care should bo exercised in drawing a chattel mortgage, as very slight mistakes render it inoperative in holding the property. n I; 9 Form of Cliatlei Mortg-ag-e— This iNPKNTruK iiirulc (in iluplU-.ito) tlio Isveiity-scventh day of Februarv, one tliousaiui oii^'lit liuiuliod ;iiul niiioly sovon. Bkt\VK"-:n Rii'liard Kirhv oi' tlio Townslup of Nonnnnhy, in the County of Grey, and Province of Ontario, sludi-iil, hon'inaflor i-.illeil the MOIkTC'.AGOR, of the Kirst Part, ant! John llenrv Moore, ol the Townsliip of N'oinianhy afores;iid, gentleman, herein- after called (he MORTG.VCIKE, of the Second T.-irt: WfrNKSSKTll lh;ir the Mi)rlt;;ij^or f()r ;md in consiiler:ilion of One Hunilred Dollars of lawful money of C;mada, lo hi^i in h.iiul well and truly p.tiJ by the Mortt;a:^ee at or before the sealinijf and delivery of il acknowledtred,) Hath granteil, b;u\i;;rnu't: Dom i>rant, bar>;^ain. sell, anil assi^-nuiUO the r 1, solil and as>,iirniHl, .intl hv these I'resent- resenls, (the receipt whereof is hereby Morit his executors, ailministra- toi s, anti assiv^ns, All. AVI) SlMin.AK llu Roo.i iltels, { urniturc J h ild stulT hereln.'ifter p.irlicul.-irly mentioned and describeil, yi/: — One bl.icU horse with sm.dl while spot on forehead, four j-oars old, fifteen li.inds hitrh. nanieil nen One luiiiher waijon in j;;'">od condition with ruuulni'' ifear jiainted red and box greer with spring' seat, sliclving whi ppletrees, and neck \\ike, M mul.'ictuiin ;-r f onipanv o f M.irkh,- iiul nimibcred iimifactured by the Speight jy, all of which saiil goods anil ch.ittels are now lying and being im^ the prenii-.es situate in the Township ot Normanby aforesaiil, on lot number seven, in the lourih concession of the said to\>"i- ship. TiiHwR AM) TO Hi)i.n all and singular, the saiil goods anil chattels, furniture and household stulT, unto the Moru ,igce, his exucutors, adniiiiisl rators anil assigns ToTiii: I1NI.N PROi'KK tsi: AND iu:ii,ioi' \ii' the tors and assigns, I'OREX'liR: .Morii his IS executors. ad mim!>tra< ' '.'.i CHATTEL MORTGAGES. IT9 |l irs of at or ei-eby ;sents hist ra- le hold lliaiulij jreeii, foods flip ot Itowi- liUire listra* PROVlDEn Ai, WANS, and tlursi- Prfsonls aro iipoii lliis oxpri-ss condition, lliat if the Mortj.,'-agor, his oxiUMilors or adniinislralors, d»> anil shall well and Irnlv pay or cause to be paiil unto the M.irtvf'ipfoo, his ox>culors, administrators or assii^ns, Ihi; full sum of One Hundred Dollars, with interest for lln^ same at the rat^ i>f eijjht per centum per annum, on the thirty-first day of October, 181)7. Turn tiiksi-: 1'ki:si;nts, anil every matter an>l thiner lintr.iry thereof in anvwiso notwithstandiii:^- And the Morten ijor for himself, hi>^ executors ami admiiiisl rators, sh.'ill and will warrant and for ever ilefeml hv these Prese'ils Ai.i. AM) Sisia i.\k the saiil j^'Ootls, cbattelsanil property, unto the Morltjat^ee, his .■xecuiors, administrators anil assij^ns, against him the Mortjjag-or, his executors ;ind adii'iaistrators, and ajjfainsi all and every other person or persons And the Morti', wn.ims lever. ""or (loth heri'hv lor Inmsi Ills execu tors and .administrators, CO\'r-:N'A.\T, rkOMlSI-: and AC, RICK to and with the Morlgag-ee. his executors, .administrators and assiifus, that the Mv>rl!i['-ii;-or, his executors or administrators or, some or one of them, sh.all and will well .nul truly pay, or cause to be paid unto the Mortgajjee, his executors, administrators or .issii^ns, the s.iiil sum o( money in the saitl proviso meiitioncd, with interest lor I he same as alores.iid, on the ilav and lime aiui in the m.inner above limited !or the payment llierefor : And AI,s,> in iasr dk- FAll.T SIIAI.I. HI-: MADl". IN lilK I'AV.MKNr of the said sum of money in the s.aid proviso ;iny pari thereof, or in casi- the Mortj^a^or lereon, or mentionrd, or of the interest t sh.all attempt to sell or dispose of, or in .'inv wav part with tin- possession of the saiil g-oods and challels or ;iny of Ihem, or to reino\'e the s imi" or ;iry part thereof out of the County of Grey, or siilVer or permit the same to he seize 1 or taken in execution without the consent >ftlie Mortt;aj<'ee, his exeiiitors, adniinislralors or assis;-ns to such sale, re: loval or spo- il th f first had and ohi.iined in wrilmif, Tiir.N and in such case ii sh.all and aiav he l.a^vl'iil t'(ir tliij M >riica\jee, his er .anv break ;inil fori-e open anv doors, l.icks. bars, b.^l's, faslenin2;s, hintifes, i^.iles, ^fences, nifs, enclosnu's .rul places lor tin- purpose of t.akin^' possession of .and ch'.'lels: And upon .and from .an.laflerlhe takinir ho uses. Dm ri-movmj;- the sa d t;oo(ls anil possession of such n'oods .a id cli.illels .is ,al\ire-aid, it shall .and mav be lawful, .and the Mort,t;airee, his executo's. .adinini'-lr.alors oi- assigns, d e.acli or anv of them, is, and .are hi'reby aulhori/ed and empowered to sell the siid s^.iods anil chattels, or any of thorn, or .any pari thereof, .it public .lurliin or priv:ile s.ale, .as to llieni or Tiiy oftbemm.av seem ni^^el .And from -fi! U! pr.H'ee.ls ol'sucli saU the first place to p.av .and reimburse himselfor Ihemsilves, all such sums, ;iuil sum of money for princip.al, interest, insurance, and costs .mil expenses .as mav then be iliie by virtue ot these I' .and .ill SMcli I'xpeiises ;is ina\- li.ave been incurreil by the MortlJa_^;ei^ his exciailors, .adininistr.itors or ;issiL;ns, in conseipuMice of tlu' default, neiflect or failure of the Mori K-'.tf' IIS executors. Iniimsti'.itors or .issij^ns, m pay- ment of the said sum of '^oney, with interest thereon as .above mentioned, or in consequence of such s.ile or removal .as .above hum .ioned, .anil in the next pi.ice to pay unto the Mortgai|or, his executors, P'.''"'.!'istrr.(oi> and assigns, all such surplus f. p^v r,.'j •^^^ I30 CHATTEI, MORTGAGES as may'remain after such sale, and after payment of all such sums ol 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 : Providkd always nevertheless that it shall not be incumbent on the Mortgagee, his executors, administrators or assigns, to sell and dispose of the said goods and chattels, but that in case of defauU of the said sum of money with interest thereon as aloresaid, it shall and may be lawful for the Mortgagee, his executors, adminis- trators or assigns, peace.ibly 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 other person or persons whomsoever : And the Mortgagor doth hereby further COVENANT, PROMISE and AGREE to and with the Mortgagee his executors, administrators .ind assigns, that in case the sum of money realized under any such sale as above mentioned, shall not be sufficient to pay the whole amount due at the time of such sale, that the Mortgagor, his executors, administrators shall and will forthwith pay or cause to be paid unto the Mortgagee, his executors, administrators and assigns, all such sum or sums of money with interest thereon as may then be remaining due : And the Mortgagor doth put the Mortgagee in the full possession of said goods and chattels by delivering to him, this 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 and every renewal thereof, INSURE THE CHATTELS hereinbefore mentioned against loss or damage by fire in some insurance office (authorized to transact business in Canada) in the sum of not less than One Hundred Dollars, and will pay all premiums and moneys necessary for that pu'-pose 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 receipt thereto appertaining ; Providkd that if on default of payment of said premi- um or sums of money by the Mortgagor, the Mortgagee, his executors or adn\inis- trators may pay the same, and such sums ol money shall be added to the debt here- by secured, (and shall bear interest at the same rate from the day of such payment ) and shall be repayable^ with the principal sum hereby secured. In U'lTNKss Wiii-:e{1':oi' the parties to these Presents have hereunto set their hands and seals. SiiiNicD, Shai.ed and Delivered ] J / In tlie Presence of R. B Cochrane. Richard Kirijv. (L. S.) Affidavit of Mortgagee that the ti'ansaction is a bona fide one. ONTARIO COINTV OF Gl lO WIT ; :,.. Ic. I, John Henry Moore, of the Township of Normanby, in the .'ounty of Grey, gentlemi'ii, the Mortgagee in the foregoing I Bill of Sale by way of Moiigage named, make oath and say: Tl-at Richard Kirby, the Mortgagor in the foregoing Bill of Sale by way ofMorigage named, is justly and truly indebted to me, this deponent, John 1 Icnry Moore the Mortgagee therein named, in the sum of One Hundreil Dollars mentioned therein. That the said Bill of Sale by way of Mortgage was executed in CHATTEL MORTUVGES. 121 pood faith, and for the express purpose of securing the payment of the money so justly due or accruiiij; dui- as aforesni'l, and n U for iho purpose of proteetinj^ the jfoods and chattels mentioned in tha Bill of Sale by way of M,)rt>rat take ly get s been jcharge rge, be- kEAL Ks'I'aTE. Affidavit of witness as to execution of Discharge. ii5 County 01' Grey, I I, Andrew (Jreer, of the Township of Normanl)y, TO WIT: -County of Grey, Province of Ontario, Student at Law, J make oath and say : 1. That I was personally present, and did see the within Instrument duly signed, sealed and executed by John Henry Moore, one of the parties thereto. 2. That the said Instrument was executed at the Township of Normanby. 3. That I know the said parties. 4. That I am a subscribing Witness to the said Instrument. Sworn before me at Normanby, in the \ County of Grey, this twenty-fifth day - Andrew Greer. of May, A. I). 189S. j .S. lir-AKE, A Commissioner for taking Affidavits in H. C. J. i I; ii: ; record. 3 cancel le Clerk jounty of County )n, or to [foresaid, Ih Mort- and was lounty of Ich Mort- Ihat such Real Estate. CHAPTER 32. Definition. " ' Rights 10 Real Estate. Owners' Ric.hts. RicHTs ovKR other Persons' Property. Fee Simple. Joint Ownership. Dower. No Dower in Mamitop.a. Like Ownership. Future Ownership. ' . \ Ri(;hts ok Wav. Rkstrictive Rights. 1 In Trust. 1 Definition — Real Estate is such property as is permanent, fixed and immovable, comprising lands, tenements and corporeal hereditaments thereon The word land comprises all substantial and permanent objects, including not only all soil and earth, but all houses, castles, <&c., and also all things which grow naturally and without cultivation in soil, as well as water covering the soil. Growing crops, such as wheat, corn, potatoes, and all crops or fruit, the result of annual labor, are chattels. Trees sold to be removed forthwith, such as trees sold to lumbermen, are chattels. If trees are sold to be removed any time at the purchaser's option, they are real estate. Coal in a mine in its natural con dition is real estate, but what has been mined is a chattel. $ ■■#1 Mi 4 I Mi I :p 126 REAL EsTATfi. Rig-hts to Real Estate arc of two kinds :— ( 1 ) Those the owner has over his own land. See No's, i , 2, 3, 4, below (2) Those a person has over the land of others. See No's 5, 6, 7, 8. below Rights in Possession. Rights in Property of Others. (1) Fee simple, (2) Joint ownership. (3) Dower interest. (4) Life ownership. ■(5) I'uture ownership. (/)) Rights of way, etc. (7) Restrictive rights. .(8) In trust. Br3 Owner's Rights — The right over one's own property includes not only the land itself, but everything built or growing thereon, or firmly fixed thereon, as a fence, etc. the right of the owner to use them and all their appurtenances, such as keys, windows &c. It also includes his right to enjoy them for him- self, and to expel any other persons from them, and to use force if necessary, to put them off. 4 Rig"hts over other persons' Property— This includes such as the right of vvay over an other's property for use as a road, lane, etc., the right to cut wood, draw water from a spring, fish in a stream, etc. 5 Fee Simple is where a man holds land, tenement?. Sec, to himself and his /ie«Vs without condition. He can sell it, or give it away by deed, or give it away by will, or allow his heirs to enjoy it after him. He can destroy or pull down the buildings so long as he does not interfere with the rights, or injure the property of his neighbors. 6 Joint Ownership— Wiicrc two or more parties own a piece of property jointly, there is a joint ownership, and all persons owning jointly have a right to it at the same time. 1 his class ownership occurs: — (i) Whore a syndicate of persons combine to purchase and hold, • speculatively, a portion of land. (2) Where a person dies without a will his heirs have a jcrint interest. The several persons who are joint owners have equal shares unless pro- vided for otherwise in the document creating the joint ownership. Joint walls built by two parties on the dividing line between two properties is another example of joint ownership. Neither can take away, even the part on his own land, without the consent of the other party. RKAL ESTATE. 127 hold, Interest. ^s pro- iperties [he part 7 Dower -Where the husb.ind dies possessed of an estate or inheritance, his widow sliall have ' .\ of said lands and tenements, to iiold during the term of her natural life. This is called Z)ofrfc!*'. A dower is only available after the death of a husband, and is not subject to will, by the wife before ilie husband's decease. 8 No dower in Manitoba— The Province of Manitoba is an cxcepti^' i in dower law, as no married women has a dower interest in her husbands lands- He may convey property without her consent. A married woman may hold real estate in her own name and convey it without the concurrence of her husband. All deeds mortgagee and leases in Manitoba are made in pursuance of of the Act respecting short forms of Indentures. In Ontario such documents are made m pursuance of acts respefcting short forms of "Conveyances," "Mortgages" or ''Leases" 9 Life Ownership is one where the person has the use of property dur- ing liis natural life. An ownership of this kind is usually acciuired by gift or will, which provides for the disposal of the property at the death of the owner of the life interest. It is an ownership sometimes retained by a father for his life time, in his homestead, when giving a son a future ownership in the property. (i) He cannot sell or mortgage the property. (2) He cannot destroy or decrease the value of it by removal of buildings, etc. (3) He cannot control the disposition of it at death. He may, during his life-time: — [i] Use and enjoy it himself. [2] Rent it to others, and enjoy the rents and profits and emoluments derivable therefrom. [3] Sell the use of the property for his life-time only. At the death of such a holder the property passes on to the next holder. 10 Future Ownership is one where the possession and enjoyment of property depends on some cv'ent in the future. .Suppose a person has a life interest on the property, as outlined in the next proceeding section, and that at his death the property is to pass to F. VV. Bale, Mr. Bale would have a future ownership until the event shall happen. He could only convey such an interest as he had, not a full title. This is called an Estate in remainder, or reversion. 11 RigchtS of way — A person has a piece of property removed from roads or streets, he may pay a neighbor a sum for the use of a part of his pro. i ::i :i iW i ■\ I lid REAL tSTAtt'. perty, to use as a lane for ingress and engress to his property, ffe acquired rights over the other's properly that arc valuea )Ie — a ight of way. They are restrictive over the other person, as he cannot build on or obstruct the passage over such land. 12 Restrictive Rights— Property is sometimes conveyed with rights reserved to the owner, such as, that houses built on the property must be placed a certain distance from the street, or built of certain materials, or of certain value, etc. 'I'his is a restrictive ownership that is exercised over the property of others. Other examples, those that bar the sale of alcholic liijuors on the premises or execlude Chinese or Colored People from occupying, or owning the land. 13 In Trust— Property is frequently conveyed to a person in trust, for the use and benefit of another [jcrson. Such a person is called a trustee. He is only holding property for others, and his wile, if he has one, does not actiuire, any dower in the lands. The trustee may have power to collect rents, or sell the property, invest such rents or purchase money. He does nothing with the property for his own personal benefit. The person for whose benefit the trust is held cannot exercise any power of conveyance over it, not even sell the right to receive the income from it. CHAPTER 33. REAL ESTATE. Sales of Real Estate. Definition. i EviDKiiciL OF Contract. Dkscru'tion of 1>and. pAR'IIliS. In Duplicate. ExKcuTORv Sale. Form OK AGREEMENT FOR Sale. Sealinc;. Corporation Deei>s, Etc Dklivkrv. Affidavit. RKlilSTRATION. Orufr of Registrations. Abstract OF Title. .' - Searching a Title. 1 Definition— A sale of Real Estate cannot, like a sale of a chattel, such as a coat or a spade, be compeled by the .actual delivery of the article,— by the actual, immediate and continued change of possession. Therefore, like UEaL feSTATt:. ti() tho sale of personal property not delivered, it must be evidenced by a written agreement. The transaction must l)e completed by a document commonly known as a deed. Sales are of two kinds: — (i) Kxecutory, when [)()ssession is passed by agreement for sale, but title is not passed uniil full payment has been made. (2) I'Aecuted, where the sale has been completed by the execution and delivery of deed. Uy deed we mean what is popularly understood as a deed, an absolute conveyance, not the leijal use of the word which would mean any document under seal. 2 Evidence of Contract — No verb.d or ordinary written agreement is binding, when made respecting Rerd Kstate or any interest in Real ICstate. Iwery such contract must be evidenced by a Contract in ivritivg and un- der se(d. A verbal agreement, even where earnest money is paid, will not hold real property. bl, such Ire, like 3 Description of the Land— An essential part of the deed is the des' cription of the land. If the piece of land is a whole lot in town or township very little trouble will be experienced in making a clear description. ExAMi'MC — "All and singular that certain parcel or tract of land and premises situate lying and being in the Township of Derby, in the County of Grey, containing admeasurement Two Hundred acres more or less, composed of lot nuuiber ten on the sixth concession of the Township of Derby aforesaid.' If half or a quarter of a lot is to be described, the foregoing can be easily arranged to suit by writing "the North half of, etc.," or "the South half of, etc.," or "North West quarter, etc. If the piece of land is somewhere in lot, a sur- veyor's description should be procured that will give the meets and bounds and magnetic bearings, — If a surveyor's description cannot be had, a piece of land, the boundaries of which run parallel to theboundries of the lot frjni which it is taken, may be described thus; "All and singular, that certain Ir.ict or parcel of land situate, lying and being in the Township of Derby, in the County of Crey, Province of Ontario, containing by admeasurement one (juarterof an acre more or less, and described as follows; Beginning at a point in the southern boundary of lot number ten on the sixth concession of the Township of Derby, ten chains from the south-west corner of said lot, thence proceeding in a northerly direction two chains fifty links, parallel to the western boundary of raid lot, thence in the easterly direction, parallel to the southern boundary one chain, thence in a I ,1. -teir ijo KEAI. F.SIATK, southerly {lirection, pirallel to llio wt'stcrn boundary two chains fifty hnks 10 the southern Ijound.iry of said lot, ihcncc along the southern boundary one chain to the place of beginning." North. uiiii)iiiittxixiximmiiiiiiixiiiitiiiiJiixixtiiiiii"iiin""«»«»"'"'"*'*' West. Lot No lo, (!oii. (), Derby, t I'-ast. lO IXXXIlIXXIXXXXXXXXXIIXZXIIXXXXXXXIXIXXXXXXXXXXXIXTXXUZZXXnxXXXXUXXXXXXUZXXX Soutl f 4 Parties The parties to the deed are usuaiiy called the Cirantor and Cirantee. The grantor is the seller and the grantee the purchaser. The grantor's wife, if he has one, must be a party to the deed, for the purpose of b.irring her dowjr except in the province of Manitoba where a wife has no dower in her husband's [)r()perty. It is only necessary to suggest that great care should be had in properly describing the parties. The firs; parly is the seller, ' The second party, the wife of the seller if he has one, The third i)arty the purchaser. If the seller, or grantor is a single person, bachelor, widower, spinster, or widow, the purchaser becomes the party of the seccnd part as in all cases in the i)rovince of Manitoba. 5 In Duplicate All documents respecting a sale of Real Estate or any interest therein should be in duplicate, so th.ii. wh:n the contract is recorded in a registry office, there may be one copy left (p Jie registry oflfice and one kept by the puich;iser. 'I'he two copies must be .'hkc, word for word, ex( ept that the copy retained by the purchaser is legal without the affidavit of the witness. It is customary for both copies to have the witness's affidavit on them. 'I'he commissioner's charge for taking the affidavit in dup'i.ate is the same as for one copy. 6 Executory Sale When a bargain is mac' j respecting a sale of a Real Estate that cannot be immediately completed, a memorandum of it sh^uld be written out and signed and sealed l)y the parites. This is done, kt.vL KstATt!. Hi (i) When, on acroiint of some defect in the title or some other such con- tingency tlie title ( iUinot he given until sonje future time. (2) Where the [)arty purchasing is to have credit for the payment of the purchase monrs. Such a document is called an Agreement for sale ol land. It need not l>o very formal in its character so long as it is under seal. It does not convey the title, it is simply an evidence of the intrnlion of the parties to complete the transfer by deed at some future time. ' 7 Form of agreement for Sale The following is the ordinary form of agreement for sale of land. It may be proved hy affiilavit of witness and registered by the purcha.ser. ' <| any :orded : kept lat the 5. It The as for Real Uild be ARTICI-KS OF ACRI'IsMKNI. made this Kifdi day of Jann.iry, in the year of our I-ord one thousand eight hundred and ninety seven. Hkiukkn William James dray, of the 'Township of Oro, in the County of Simcoe, Province of Ontario, carpenter of the first part. And Franklin Cullis, of the Township of Oro aforesaid, farmer, of the second part, Whereas, the said party of the First Part has agreed to sell to the party of the Second Part, and the party of the Second Part has agreed to purchase of and from the said party of the First Part, the lands, hereditaments and premises hereinafter mentioned, that is to say: Ai.i, and SiN(;i.'i,Ai< that certain parcel or tract of Land, being composed of I.ot Number Six on the Fourth Concession of the Township of Oro, aforesaid, containing by admeasurement One Hundreil acres more or less. Together with all the privileges and appurtenances thereto oelonging at or for the price cr sum of One Thousand Dollars of lawful money of Canada, payable in manner and on the days and times hereinafter mentioned, that is to say : The sum of Five Hundred Dollars to be jiaid at or t)efore the sealing and delivery of this agreement: the remaining Five Hundred Dollars to be due and payable in five eipial annual instalments of One Hundred Dollars each, with interest on the unpaid principal at six per cent per nninun payable with each instalment. The first of such instalments of principal and interest to be due and i)ayable one year from the date of this agreement. Now tf IS iii'.KKiiv Ac.UKKD between the parties aforesaid, in the manner following that is to say: The said [)atty of the .St-cond Part, for himself, his heirs, executors and adminstrators, Ahf/i Covenant^ Promise and Aj^rte to and with the said party of the First Part, his heirs, executors, ndminrstrators and assigns, that he or they shall and will well and truly pay or cause to he paid to the said party f f tie First Part, his heirs, executors administrators and assigns, the said .sum of money above mentioned together with the interest thereon, at the rate of six per cent, per annum on the days and times and in the manner above mentiorKd: And also shall and will pay and discharge all taxes, rates and assessments wherewith the said land niay be rated or charged from and after this date. \i ^ t^i fif.AL feStAf f! In consideration whereof, and on payment of the said sum of money, with interest thereon as aforesaid, the said party of the First Pait, ', to convey andassure or cause to be conveyed and assur- ed to the party of the Second Part, his heirs or assigns, by a good and suffi- cient deed in fee simple. Ai.K THAT the said piece or parcel of land above described, together with the a|)purtenancc tiiereto belonging or appertaining, freed and discharged from all dower or other encumbrances but subject to liie conditions and reservations expressed in the origuial grant thereof from the Crown, and such Deed shall be prepared at the expense ot the said party of the First Part, and shall contain the usual statutory covenants for perfect title and quite enjoyment. And also shall and will suffer and pei^mit the said party to the Second Part, his heirs and assigns, to occu[)y and enjoy the same until default be made in [)ayment of tlie saitl sum of money, or the interest thereof, or any part there- of, on the days and time.', and the manner hereinbefore mentioned, Suhject, NEVER iHKi.Kss, 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 the manner hereinbefore mentioned, the said party of the First Part shall be at liberty to resell the said land. In Wri'NK.ss wherkok, the said parties to these presents have hereunto set their hands and seals the day and year first mentioned. Signed and Sealed \ W. J. Gray, In the presence of F. CULLIS. - J. J. Reith. J ONTARIO, ] CotTNTV oi' SiMcoE - I> Jamcs John Reith, of the Township of Oro m the to wit: ' ) County of Simcoe, make oath and say : 1. That I was personally present, and did see the within Instrument and Duplicate duly signed, sealed and delivered by William James Gray and Franklin Cullis, the parties thereto. 2. That the said Instrument and Duplicate were executed at the Town- ship of Oro. 3. 'I'hat I know the said parlies. ' 4. That I am a subscribing witness to the said Instrument and Duplicate Sworn before me at the Township of Oro. in the .said County of Simcoe, this Fifth day of January, in tne year of our Lord - J, J. Reith. one thousand eight hur.drcdand ninety- seven. J ^ Lewis Ludi.gw, A Commissioner, &c. [seal,] [seal.] ?1 lit REM, ESTATE. U3 8 Sealing^, Etc. — The sealing of a document co..,ists in affix'ng after the signature a small piece of paper, usually a round wafer of paper, or some seal- ing wax, or some material different from the document, and acknowledging it to be your seal. If any device is written or printed after the signature at tlie time of signing or the letters L. S. placed there, a seal may be put on afterwards. 9 Corporation Deeds Etc.,— Do not need the afBdavit of the witness ; the afifi.xing of the corperate seal C)f the Com|)nny or the Corporation is suffi- cient attestation for all purposes, when the do( ument is signed by the chief officers. When land is conveyed lo a corporation, it should be made to their successors, instead of then- heirs, and to successors in office where a convey- ance is made to trustees. in the Town- nlicatc 10 Delivery — An agreement or deed may be signed and sealed but still kept in possession of the maker. It is of no effect until it has been delivered to another person. The delivery is usually accompanied by such words as "I deliver this as my act and deed." It rc(iuires the delivery of such documents into the hand.-^ of the parties in whose favor they are drawn to give them bind- ing effect on the maker. 11 Affidavit of Execution— Every document that is to be registered or recorded should be attested to by the affidavit of the witness who saw it signed, as to the following particulars: (i) 'J'hat he saw them sigred, sealed and delivered. (2) That theactv/sd^ e in a certain place. {3) That he knc ^s tt.v pi,ru«.s tolhe document. (4) That Ih' ;.s witness to the documunt. Such affidavit shou'd i'^ on the contract, or firmly attached to it. The only exception to the abc e ; that of corporations meiUi.. . '. '^ovc, where the corporate seal is suffii cut alteUation. Tne affi lavit may be taken before a Registrar, Dei)uty Regii-trar, Suproine or County Court Judge, a Commis- sioner for taking affidavits, or a Magistrate. 12 Registration— All documents respecting titles oi Real Instate siiould be registered in the Registry Office o^ the Coi.nl)' in v.iii.'h the property is situated The coi;tract is then a inat-e. of puhVc rec^A'd It is rrcogni/ed at law, and all documents take precedence ic-orjui^ to priority of registration. Should a deed, mortgage, etc., that i.s regi .lereJ be lost or destroyed, a certified copy can be had any time fro!;i ihe ' vCjistCA'-, which h just as good as the original. •w 1^4 REAL KSTATE. Il The Registry Offices are established for the prevention of fr.iud, so that any person buying Real Estate may find all the history of the title of the pro- perty and know if it is clear. The title of any property may be examined, and deeds, mortgages or agreements lespecting the lot read over and copies made from them. If the Registrar makes a certified copy or any document, he charges a reasonable fee for it. The fees for registering are $i 40 for the first 700 words or under, and 15 cents per 100 for all from 700 to 1400 and 10 cents per 100 for all over 1400. 13 Order of Reg'istPationS -Documents take effect in the oider of the registration. Suppose two mortgages were made on a property, one dated January 10, iHi;7, and not registered till May 30, 1897, and a second mortgage made April 6, and registered .\pril 10; the mortgage registered first, although made second, would have the first claim on the property and would have to be satisfied before the other drawn Jan. 10 and not registered until M.iy 30. It is desirable that documents be registered as soon as possible after their execution. 14 Abstract of Title— Every Registrar is required to keep books Inown as "abstract books," with a special space devoted to each lot of land in the registration district. Every transaction respecting a lot must be put in the proper place. The abstract book must contain the following information : (i) Number of instrument (Registration No.) (2) Name of instrument, such as Patent, Deed, Mortg.ige, etc. (3) Date of instrument. '' • (4) Date of registry. • . (5) (irantor's name. (6) (Irantee's name. . (7) Quantity of land. . • (8) Consideration, price or amount of mortgage. 'rhc Registrar for a small fee will lurnish a copy of the abstract book that refers to any lot or part of lot so that the title may he looked up hundreds of miles away from tlie registry office. This is called an abstract of title. 15 Sear3hingf a Title — There are three kinds of clouds on a title that must be looked nfter, v hen searching the title to a pierc of property : (i) Has the seller a proper ownership of ihe land and the right to convey it ? Are there any mortgages or liens against it ? Search the County Registry Office or get an abstract from the Registrar snd Ipck it up. t 111 REAL KSTATE. '35 (2) Are there any judgments against the owner? Make a search in the office of the Sheriff of the County. (3) Are there any taxes unpaid on the lot? Search the town or city treasurer's office and collectors roll if in a town or a city, or the County Treasurer's office and collectors roll if the land is in a township or village. CHAPTER 34. ttc. 3k that reds of lie that |ght to :h tho loch it REAL ESTATE DEEDS. i Definition Varieties ok deeds. Warranty deeds — Fui.i, Covenant. Warranty deed — AwiREviATEi) Covenant. (JuiT Claim Deed. A Deed Poll. A Trust Deed. Form (1)01 Warranty Deed — Auhkeviated Covenant Form (2) ok Warranty Deed. Who Should Skin. Deed hy a Sinc.le Person. A Deed Sui!.iect to a .Mortc^ge. Additions to Form when Sui'.^ect to Mortoage. A Deed ok Gut. ' (^)itt Claim Deed. [Form ok (Jun Claim Deed. 1 Deflllition — A deed is a formal document in writing on paper or parch- ment, signed, sealed and delivered between the parties. (I) The form in the previous chapter, theagreeme it for sale of land was sim- ply a contract to convey land after certain payments had hjenmide. It did not convey a title. It was only a promise to convey. .\ djed of land must be under seal, and should be drawn up in sets of two, or if there be a mutual contribution of land for the common use of both, such as a common lane, the land b'_ing given half by each person , the deed should be in triplicate — one for ''ch of the parties, and one for the registry office. I Itib:' the most solemn and binding act that a man can perform in the dis- posal of his property. (?) If nude between two or more parties having different interests, it is called an ''Indenture". If made by one person it is called a '"Deed Poll". V a I I- I i ■ 136 REAL ESTATE. 2 Varieties of Deeds — There are very many different kinds of deeds in common use, varying according to the circumstances of the case. The follow ing are in common use; (i) Warranty deeds with full covenants. Warranty deeds with abbreviated covenants. Quit claim deed. (2) (3) (4) (5) A deed poll. Trust deed. A deed of land is frequi. abstract books in the Regisi ■ called in law a "Bargain and Sale," and in the 0''^i. & S. 3 A Warranty Deed— Full J* 'i^enant, Is one that guarantees a perfect title and quiet enjoyment of the property to the purchaser and his heirs and assigns after him. The covenants are written out at great length, but on account of the length of time required for writing them out, and tlie extra expense of registering.') the covenants have been shortened down by statute known as the Act respect- ing Short Forms of Conveyances in Ontario. In Manitoba the word Indent- ures is used instead of Conveyances. 4 Warranty Deed— Abbreviated Customs, is one that guarantees a perfect title and quiet possession. It is the same in effect as the Full Cov- enant Deed, but much shorter in words. It has been legally "boiled down" from the I'ull Covenant J)eed. It contains all of the covenants, but in few words. The toims given in chapter 34 contain the abbreviated covenants 5 Quit Claim Deed is made by a person that does not hold a perfect title to a property. It is sometimes made in favor of some one that has a claim to the property, For example: Smith has mortgaged his premises to Brown. He afterwards wishes to sell to Brown who holds the mortgage, and has already a claim. He will use a Quit Claim Deed. It is very much like an ordinary deed wiUiout the covenants. It conveys only the/ar/fs inleresi in ihe property, be the interest great or small. 6 A Deed-Poll, is a deed made by one person —such as a Sheriffs Deed 7 A Trust Deed, is one made to a person called a trustee, for the ben- efit of some oilier person. It does not give the p.rson who is trustee any personal claim, nor his wife any dower in the property. 8 Form (1)— The following is the ordinary short form of Statutory Deed with abbreviated covenants. REAL ESTATE. »37 the Ueres! in Deed I the bcn- llee any ry Deed Tnis Indenture made (in duplicate) the first day of December, in the year of our Lord One Tliousand I'jght Hundred and Ninety Seven. In I'UR- RUANCK OK Till", AcT kE.SI'KCIIN(; ShoRT KoKMS OI' CON VEVANCKS. Bkiwkkn Joiin James Reitli of the Township of Luther, County of Dufferin, Province of Ontario, Merchant, of the first part, and Maria Jane Reitli, wife of tiie party of the first part, of the second part, and William James ( Iray of the Township of Oro, County of Simcoe, Province of Ontario, merchant, of the third part. WriNKSsKiH that in consideration of the sum of Five Hundred Dollars ($500) of lawful money of (Canada, now paid by the said party of tlie 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 (Irant unto the said party of the third part, in fee simple. All and Sincui.ar that certain parcel or tract of land and premises situate, lying and being in the Town of Harrie, in the County of Simcoe, Province of Ontario, containing by adtneasurement one ([uarter ( '4^) of an acre, be the same more or less, being composed of 1-ot No. four (4) on west side of Scrope Street, in the Town of liarrie aforesaid To Have and to Hfn.i) unto the said party of the third part, his heirs and assigns, to and for his and their sole and only use Forever. Suisject never- theless, to the reservations, limitations, provisos and conditions expressed in the original Grant thereof from the Crown. (Noi'i'. The five foUoiving items are the covenants that make a warranty deed of this.) 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, notwithstanding any act of the said party of the first part. And that the said party of the- third part shall have quiet possession of the said lands, free from all incumbrances. 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 requisite. And the said party of the first part, Covenants with the said party of the third part, that he has done no act to incumber the said lands. And Maria Jane Reith, the party of the second part, hereby bars her dower in the said lands. In Witness Whereok the said parties have hereunto set their hfinds and seals. SuiNED, Sealed and Demvkred ~| John Reith. (L. S.) in the presence of '- Johns. Howes. I Maria Jane Reith. (L. S.) County OK Simcoe: \ I, John Samuel Howes of the township of Minto, County of Wellington, Province of Ontario, manufac- TO wit: I turer, make oath and say: T That I was personally present and did see the within Instrument and Duplicate thereof duly signed, sealed and executed by John James Reith and Maria Jane Reith, two of the parties thereto. m 'M ■' m i i38 REAL EStATK. 2 That the said Instrument and Duplicate were executed at the Town of Barrie. 3 That I know the said parties. 4 That I am a subscribing Witness to the said Instrument and Duphcatc. Sworn before me at the Town of 15ar ric, in the County of Simcoe, this first day of December, A. D. 1897. John JamilsGiisson, I John S. Howks. A Commissioner for taking affidavits in H. C. /. i Form (2) — Tiie following is a still shorter form of deed, made possible in Ontario by tiie "Dcvoiv r. of Estates Act of 1886 " It will be noticed that the five covenants in the foregoing deed when "boiled down," arc equivalent to the two covenants in this. This Indenture maJe (in duplicate) the first day of December, in the year of our Lord, One Thousand Eight Hundred and Ninety seven. In Pur- suance ok the Act REsi'KcnNc. Short Forms of Conveyances, AxNu ok the Conveyancing and Law ok Property Act, 1896 : Between John James Reith of the Township of Luther, County of Dufferin, Province of Ontario, merchant, of the first part, and Maria Jane Reith, wife of the party of the first part, of the second part, and William James Cray of the Township of Oro, County of Simcoe, Province of Ontario, merchant, of the third part. WITNESSETH that in consideration of the sum of Five Hundred Dollars ($500) of lawful money of Canida, now paid by the said party of the third part to the said party of the first part, (the receipt whereof is hereby by him acknowledged,) he, the said party of the first part, who conveys as beneficial owner, Doth Orant unto the said party of the third part, in fee simple, Ai-L AND SiNcuLAK that Certain parcel or tract of land and premises situate, lying and being in the Town of Barrie, in the County of Simcoe, Province of Ontario, containing by admeasurement one quarter (}^) of an acre, be the same more or less, being composed of lot No. four (4) on the west side of Scrope Street, in the Town of Barrie aforesaid. And the said party of the first part Covenants with the said party of the third part, that he has done no act to encumber the said lands. And the said party of the first part Releases to the said party of the third all her dower in the said lands. And Maria Jar.e Reith, the said party of the second part, hereby bars her dower tothe said lands. In \VrrxEss Whereof the said parties hereto have hereunto set their hands and seals. SuiNED, Sealed and Delivered in the presence of John J. GinsoN. ) John J. Reith. (L. S.) Maria Jane Reith. (L. S.) / kKAL ESTATE. ii9 wn of Ucatc. VES. isible in ;ed that uivalcnt -, in the In Pur- D OK THK Dufferin, part, and Province _ Dollars Ithe third ly by him Ibeneficial iple, bs situate, ovince of [e, be the ;st side of [rty of the the third bars her leir hands (L. S.) (L.S.) CoVNTX oi' Dull KKiN : ) I, John James Clihson of the Township of Luther, ■jowri'; j County of Dufferin I'rovince of Ontario, miller, make oath and say : 1 TiiAi' I was personally present and did see the within Instrument" and Duplicate thereof duly signed, sealed and executed by John James Reith and Maria Jane Reilh, two of the parties thereto. 2 'I'hat the said Instrument and Duplicate were executed at the Township ofl-uther. 3 That I know the said parties. 4 'I'nAP I am a subscribing witness to the said Instrument and Duplicate. Sworn before me at the 'i'ownship ofj .uther, in the County of Dufferin this, '- John J. GmsoN. I first day of December, A. I). 1897. J F. C. McDowAi.L. , " -'/ Coiinnissioner for takiii;^ afjidavih in FI. C. /. 10 Who Should Sign — The answer is, every party who has anything yet to do. In the ordinary cases the party of the third part does not sign. He has paid his money, and he has nothing further to do. If, however, there is any covenant that binds him in the future to pay off a mortgage, or claim, or to allow a part of the property to be used as a lane, or if there is any restric- tive claim in the deed, he must sign to bind himself. 1 1 Deed by a Singfle Person^In a deed by an unmarried person such as a spinster, bachelor, widow or widower, it is proper to mention the fact in section three, of the affidavit to the execution, which should read as follows: "I know the said party, that he is an unmarried man, being a bachelor." This often saves the trouble and expense of proving this, years afterwards when a title is being looked up. 12 A Deed Subject to a Mortgage— Property is often sold subject to an existing mortgage, the [)urchaser agreeing to pay off the mortgage as part of his purchase tnoney. To accomplish this, the following clause, or some words of similar effect should be written in, either after the description of the land or after the clause that ends up with the words, "subject to the reserva- tions, limitations, provisos and conditions expressed in the original grant from the Crown'" 13 Additions to Ordinary Form— (1) Form of clause for deed subject, to mortgage. "Subject however, to a certain mortgage made by the parties of the first and second parts to Henry Swinton, dated January 20, 1897. securing the payment of the sum of five hundred dollars, with interest at 7 per cent, per annum, which mortgage the 111 \ V ' l;l * ; i - < I i 140 REM, EStATE. party of the third part agrees to pay, satisfy and discharge, as pArt of his pur- chase money and save harmless therefrom the party of the first part. {2) Add to three of the clauses requiring it, the modifying words, "ex- cept ns aforesaid," so as to make them harmonize with the encumbrance of the mortgage provided for in the foregoing clause. 14 A Deed of Gift—A Deed of Gift of property from father to son, etc., is usually drawn as follows in the parts that relate to the consideration, "VVit- nesseth that in consideration of the natural love and affection, and the sum of oric dollar," thus including both a good and a valuable consideration. 15 The Quit Claim Deed— As mentioned in a {jrevious section, the Quit Claim Deed is one that does not give any guarantee of title. The words conveying the title arc different, as the seller is only parting with his interest in the property. It is given (i) When a person's title is defective and he only wants to con- vey such title as he really possesses. (2) Where a mortgagee purchases the land mortgaged to him, he having the covenants of guarantee already in his mortgage in his favor. (3) When heirs in common of an estate, (juit their claim to one another. ^ , II' I? 16 Form of Quit Claim Deed— This Indknture, made in duplicate the first day of December, in the year of our Lord one thousand eight hundred and ninety seven. Bktwf'.kn John James Rcilh of the T(>wnship of Luther, County of Dufferin, Province of Ontario, yeoman, of the first part, and M.iria Jane Reich, wife of the pxrty of the first part, of the second p.irt, and William Jimt's Cray of the Township of Oro, County of Simcoe, Province of Ontario, merchant, of the third part. Witnk.ssktu that the said party of the first part, for and in consideration of the sum of Five Hundred Dollars ($500) of lawful money of Canada, to him in hand paid by the said party of the third part, at or before the scaling and delivery of these presents, (the receipt whereof is hereby acknowledged,) Has granted, released and quitted claim, and by these presents. Doth (Irant, Rk- LEAsn AND ()v\r ('laim unto the said party of the third part, his heirs and assigns. All estate right, title, interest, claim and demand whatsoever, both at i.iw and in equity or otherwise howsoever, and whether in posseseion or ex- pectancy of him he said pirty of the first part, of, in, to, or out of All and SiNfiULAR, that certain parcel or tract of land and premises, sit- uate, lyintj and i)eing in the Town of IJarrie, in the County of S mcoe, Prov- ince of Ontario, containing by admeasurement one quarter ( ^) of an acre, be pur- "ex- cc of etc., "Wit- Lim of m, the words nterest to con- -vim, he . to one the year Pufferin, »3rt, and Province Iration of , to him [i'ing and ied,)HAS |\NT, Rb- leirs and |ver, both Ml or ex- liiisos, sit- ae, Prov- acre, be REAf, ESTATF. T4T the same more or less, heing rnmposcd of lot No. four (4) on the west side of Scrope Street, in the Town of Harrie aforesaid, Tocktiikk with the appurte- nances thciCto belonj)rever. SuHjECT NKvERTHELEss to the reservations, limitations, provisos and con- ditions expressed in the original grant thereof from the Crown. And Maria Jane Keith, the said party of the second part, hereby bars her dower in the said lands. In witness whereof the said parties hereto have hereunto set their hands and seals. Signed, Sealed and Delivered "i in the presence of |- JoHN S. Howes. J Affidavit of witness to the execution. John J. Reith. (L. S.) Maria Jane Reith .{L. S.) CouNTV OK Simcoe: "j I, John Samuel Howes of the Town of Harriston, \ County of Wellington, Province of Ontario, manu- TO wit; j facturer, make oath and say : 1. That I was personally present, and did see the within Instrument and the Duplicate thereof duly signed, sealed and executed by John James Reith and Maria Jane Reith, two of the parties thereto. 2. That the said Instrument and Duplicate were executed at the Town of Barrie. 3. That I personally know the said parties. 4. That I am a subscribing witness to the said Instrument and Duplicate. Sworn before me at Barrie, in thel County of Simcoe, this first day of - December, A. D. 1897. j John S. Howes. F. C. McDoWALL. A Com»iissiort(r for fakhig affidavits in H. C. J. i t^ am 1 ii I! 'ii M» REAL KSTATE. CHAPTER 35. REAL ESTATE. MORTGAGES, ETC. DKi'iNrnoN. KokM OK MoKTOAGKS. 'riii; Rk-1'ay.mknt C.'i.ausk. SiNKiNt; Fund Mortcaciks. ( Si'ECiAi, Insurance Clause. Tenantat wiij. Clause. Trovision EOK I'OKECLOSURE. Provlsion for payment 01- Taxes, ETC. Provisions eor Compounding un- I'Aii) Interest. PowKKs oi' Sale. Additional Clauses, KecISIRAITON ok MORniAOES. Making Sure ok the 'I'itle. 1 Deflnition -A Mortgage is a grant or conveyance of Real Ivstate by a borrower or a debtor to a lender or creditor to secure the repayment of a loan or debt. The property is pledged, in fact really conveyed, such convey- ance contains a condition that the mortgagor may buy it back again by repay- ing certain sums at certain times. The person giving the Mortgage is called the Mortgagor. The person in whose favor it is made is called the Mortgagee. It will be noticed that in form a mortgage is very like a deed with a "proviso" for n payment added. 2 Form of Mortgage— THIS INDICNTURE, made in duplicate, the First day of February, one thousand eight hundred and ninety seven. In pursuance of an Act respect- ing Short Forms ok morhiages, Between Henry Richard Manders, of the Township of Smith, in the County of Peterboro', Province of Ontario, Farmer of the First Part, hereinafter called the Mortgagor, Mary Ann Manders, wife of the party of the First Part, cf the Second Part, And William James Clark, of the Township of Smith aforesaid, Centle- man, of the Third i'art, hereinafter called the Mortgagee, WITNESSETH tha'. in consideration of Six Hundred ($600. co) Dollars of lawful money of Canada, now paid by the said Mortgagee to the said Mortgagcir, (the receipt whereof is hereby acknowledged) The said mortgagor doth <;R,\Nr and Mortgage unto the said Mortgagee, liis heirs and assigns FORFVJCR, All and Singular, that certain parcel or tract of land and premises situate, lying and being in the Township of Smith aforesaid, containing by admeasurement 'I'wo Hundred Acres more or less, being composed of lot Number ICight (8) on die tenth (10) Concession of the Township of Smith aforesaid; and Mary Ann Manders of the Second Part hereby bars her dower in said lands. Paxes, 4G UN- itc by a nt of a convey- f repay- is called )rtgagee. proviso" ary, one KsrECi- : County n- called |nd Tart, (Icntle- lollars of hrtgagor, \\ CRANr KR, Ale |e, lying lurenient light (8) Mary REAL KSTATK »43 Pkovidki) this Mortgage to lie void on payment of Six Inindrcd Dollars of lawful money of Canada, with interest at seven per cent, per annum, as follows: The said principal sum of Six Hundred Dollars to he due and payu'>le five years from the date hereof with interest thereon at Seven per cent, per atL-xim. payable yearly. 'I'he first of such payments ol interest to be due and payabi*. on the first day of I'ebuary, 1S98, and taxes pnd performance of Statute Labor. The said Mortgagor Convenants with the said Mortgagee, That the Moitjagor will pay the Mortgage Money and Interests, and observe the above proviso. That the Mortgagor has a good title in fee simple to the said lands. And that he has the right to convey the said lands to the said Morlgigee. And THAT on detault or non-observance of any of the provisions or stipu lations herein contained, the Mortgagje shall have (juiet possession of the said lands free from all incumbrances. And that the s-aid Mortgagor will execute such further assurances of the said lands as may be recjuisite. And that the said Mortgagor has done no act to encumber the said lands. .\nd TH.vi'the said Mortgagor will insure the buildings on the said lands to the amount of not less than Five Hundred Dollars currency: Provided that the Mortgagee may insure the .same without reference to the Mortgagor and charge any moneys, with interest at the rate aforesaid, paid by him i:i respect thereof on the said lands. And the said Mortgagor doth Release to the said Mortgagee all his claims upon the sairl lands, subject to the said proviso. PRovided that the said Mortgagee may distrain for arrears of Interest. Provided that in the default of payment of the Interest or of any portion of the moneys hereby secured, the principal hereby secured shall become due and payable. Provm)ED that untill default of payment the Mortgagor shall have quiet possession of the said lands. In Witness Whereof the said parties hereto have hereunto set their hands and seals. Signed, Sealed, AND Delivered ] ^^^^^, ^ Manders. In the presence of 1- ^j_,^^^. ,^^^ ,,.,^^,^5. prest R. B. Cochrane. J Received on the day of the date of this Indenture the sum r . dred (500.00) Dollars mentioned as consideration. Witness: "i SEAL SEAL e Hun- R. B. Cochrane. Henry R. Manders. Countvof Peterhoro," TO wit; I, Richard Bernard Cochrane, of the Township of Smith, in the County of Peterboro', Gentleman, make oath and say : I. That I was personally present and did see the within Instrument, and the Duplicate thereof duly signed, sealed and executed by Henry Richard Manders and Mary Ann Manders, two of the parties thereto. i W Ml 'f 1 i li 1. 'i! M4 KKAI. t'.STATF. 2. That llio said InslriiiiK-iU aiid niiplicilc were cxcculed at tliu 'I'owii ship of Smith. 3. 'I'hat I know the said parties. 4. Tliat I am a .suhscribiij;^ Witness to the said InstrmueiU and Diiplieate Sworn before meat the 'I'ownship of j SniitI) in the County of IVterl)i)r()' I ,, „ r',...., ..,. this I'lrst day of I'ehnia.y, A. I ). 1.S97. W.J. dray. | .-/ Comiiiissioner for takinsiaJJidinHts in If. C. /. 3 The Re payment Clause of a morlgage is tliat clause that provides when and how the loan or del)t is to l)e repaid. 'I'he rights of the Mortgagor in a repayn.enl clause is called an "eijuity of redein[)tion." Tlu; clause in the foregoing form makes the |)rincipal payable at the end of a term of years and the interest payable annually. (Ireat care should betaken in the composition of these clauses so that they may be made so exi)licit, that there cannot be a doubt or (juibble as to the time and manner of re-payment. Many persons desire to have the principal of their mortgages [layable in annual instalments and the interest on all tho principal [)aid up to date. The following is the form ; — "Provided this mortgage be void on payment of .Six Hundred Doilarsof lawful money of Canada with interest thereon at the rat>j of Six per cent, as follows; — that is to say, the said principal sum of Six Hundred Dollars to be due and payable in six cnual annual instalments of One Hundred Dollars each with interest at the rate of Six per cent, per annum on the unpaid principal payable annually with each uistalment of inincipal. The first of such pay- ments of principal and interest to be due and jiayablc on tlie first day of Feb- ruary, A. D. i.Sy8 and taxes and performance of statute labor " In case the instalments are irregular either as to amount or dates of pay- ment, it is better to give the amount of eacii instalment and its exact due dale. Very little trouble will be experienced in varying the foregoing to suit half- yearly interest. - 4 Sinking Fund MOPtag-es -A Sinking I'und Moitgage is one in which the principal and interest together, are divided into a number of etjual yearly or half-yearly or monthly payments. Tiiis form of re-payment clause was used very extensively in Canada until recent legislation almost abolishc I them by making them illegal, unless they gave the following particulars in the repayment clause. (1) The amount of the loan. • (2) The rate of interest. (3) The part of each annual payment that is for interest. (4) The part of each annual payment that is for principal \ RKAI, KliTATK M5 'own licate •oviclcs rtL;am)r in Uic irs and )osili()n 1)1 l)c a [)crsons almcnts ; is the lollars of cent, as ) be due rs each principal i-h pay- ot l*"cb- lof pay- jvic dale, lit half- In which Icarly or Ise was Ijolishc I h in the l'"()rmiMly i1k'-.c niortgigcs wort' used to covor m]> oxorMi.ml rates of iiUori-st charged by gr.is[)in^,' or iinscrupiilous loan coin|)anics and private leiuiers • Everything has now to be pi, in and a!) ive board. 'That borrower who //w//j,'/// he was paying six per cent., and who was realK (uying somewhere between twelve and twenty per tent., can no longer be (le< eivei! or left in the dark as to the obliga'ion he incnrs wiien h'-' i;ives a Hen on his properly. lUiiiding s.)cielies are ab:)ut tiie only institalioas that no.v iiuran('e applications, premium notes or undertakings for payment of the insurai ce premium moneys : and and provided also that in the event of any loss by fire iiapiiening, either before or after default sliall have been made in payiiKiil of the moneys in the above proviso, or herein elsewhere mentioned, or in iloing or keeping of any of the covenants or agreements herein contained, on the nart o( tiie mort- gagor, the company may ap|)ly the money to be derived from said insurance, either towards reconstructing tiie desiro)ed buildings or towartl payment of the said money hereby secured, as they may deem b.'st. 7 Tenant-at-will Clause -Ami the said m )rtgigor dolh Ri:i,i;.\sK to the said compinyall his claims upon the said lanJs, and do h aitorn i(j and become Tenant-at-Will to the said company, su!)ij(;t to the .said proviso at the rent e(|ual to the interest hereinbjfore irenlioned. 8 Provision for Foreclosure— iVovitied tiiat such notice may be effectually given either by leaving the .same on the door of the dwelling house or other conspicuous part of the premises, if unoccuiMed, or at lie option of the company or their assigns, iiy [lublishing the same for four ^« mmmmi ■^ 146 REAL ESTATE consecutive times in some newspaper publislied in the county in whicli the lands are situated, and provided that the said lands may be sold, either by public auction or by private sale, and either for cash or credit; and that the company or their assigns may vary or rescind any contract or sale by virtue of said power, and may buy in and re-sell the said land:., or any part thereof, either by private sale or public auction, without being responsible for any loss or deficiency for, or on account of such estate; and that no purchaser under such power of sale, shall be bound to inquire into the legality or regularity of any sale under the said power, or to see to the application of the purchase money. 9 Provision for Payment of Taxes, &C.— And is hereby agreed be- tween the parties hereto, that the company may pay all taxes and rates which shall from time to time fall due and b; unpaid in respect of the mortgaged premises; and charge such payment, with interest at the rate foresaid, on the mortgaged premises, and that in case the company satisfy any charge on the said lands, the amount paid in respect thereof shall be payable forthwith wiih interest at the rate foresaid, and in default tlie power of sale hereby given may be exercised. And that neither the execution nor registration of this mortgage shall bind tlie company to advance the money. 10 Provision for Compounding" Unpaid Interest— And that all in terests in the arrear upon tliis mortage shall bear interest at the rate of eight per cent, per annum, from the time of its accruing due and payable, and that the principal money secured shall bear interest at tlie said rate until said principal monrvs and interests are paid. 11 Power of Sale — Every mortgage contains a clause to the following effect : "I'rovided tliat the mortgagee on default of payment for three months may one month's notice, enter on and lease or sell the said lands," iSrc. This clause enables the m jrtagee, after strictly conplying with the terms of the notice, to sell the mortgaged lands. 12 Reg-istration of M0Ptag"eS— The registration of a mortgage is very essenti.ll. If two mortgages are given, the one registered first will be satisfied first, in case the property has to be sold. Suppose S nith makes a m,)rtg.)ge to Jqnes, Tanui.ry 15th. It is registered July lolh. Anotiier to Moore on May 20th, which is registered .May 22nd, .\ judgment is given against him July I St, and taxes become due, iioy. October ist. » (i) Taxes are first claim a and come ahead of everything else. REAL FSTATE. 147 The second in ■ ;gage comes next for a share, because register- The judgment co-n3s if anything rcnxin-. If there is anything left, the first mortgage takes it. It might (2) ed earliest. (3) (4) have been first after the taxes if only registered promptly. 13 Makin^f Sura of th3 Title -BL?fore advancing imney on a mort- gage the loan companies are very careful to senrcii the til'e as indicated in a previous section. They get an abstract of the title first of all, then draw the mortgage, have it signed and registered, and the abitract or the title continued so as to show the martgige on it. They, by this means, see that there are no others anead of theirs After all thi.n they search the Stieriff's office for judg- ment, and the Treasurer's for back taxes. If there are any ola-ms in either office they pay them and deduct their expenses, and hand the balance to the mortgagee. This is about the only safe way for all cases, and private individ- uals would do well to take like orecaulions. CHAPTER 36 m!1 Hip uUowing months This Is of the [e is very [satisfied liortg-ige loore on Inst him REAL ESTATE MORTGAGES. Assig-nment and Dischargee. 'I'"oRKCI,(1SV'KK. TkansI'-kk Of A IMo'kk; Aci;. f"(>l-;M 6V .ASSIC.NMKNT. DlSCHAKliK OK .MoKTC.AC.K. i'"oKM oi' DiscHARc.K OK Moirrc.ACE. UnsAI'ISKIKI) MoRTdAOES. Rki'an.ment ok Mortcac.es. else. 1 FoPecloSUre — If a mortgagor fails to pay hih mortgage and interest, the ])rocess of enforcing the claim by ajjpropriating or selling the land, is popularly called Foreclosure. The mortgagor is deprived of his ownership. Though the mortgagee may legally ajjpropriale the land under his mortgage; in jmictice that is not done. .\ sale is always held so as to make the title surer and establish a value so as anything left over after satisfying the mort- gage and expenses, may be returned to mt)rtgagor. 2 Transfer of a fllortgSLge .\ mortgage is not negotiable jiaper and is not transferal>le by indorsement. It is a sealed and registered contract, and retjuires a sealed and registered contract to ciiange the ownership. This doe- i!! smm 148 REAL ESTATE. ument is called an Assij^nmcnt of Mortgage. It should he drawn in dupli- cate, aud registered where the mortgage is registered. \ m : 3 Form of Assigrnment— THIS INDENTURE, made in dui)licatc the First day of August in the year of our Lord one thousand eight hundred and ninety nine, Betwken William James ("lark, of the Town of Peterhoro', in the ''^^unty of Peterhoro', Province of Ontario, Student, of the First Part, he .after called the Assignor, and James John Reith, of the Township of Lu.ner, in the County of Wellington, Province of Ontario, Merchant, of the Second Part, hereinafter called the Assignee, ^VnKkK.\s by a mortgage dated on the l"'irst day of I'Y'bruary, in the year of our Lord one thousand eight hundred and ninety seven. Henry Richard Man- ders, of the Township of Smith, County of Peterhoro', Province of Ontario, farmer, and wife, did grant and Mortgage the land and premises therein and hereinafter described to William James Clark aforesaid, his heirs and assigns for securing the payment of Six Hundred Dollars of lawful money of ("anada, and there is now owing ui)on the said Mortgage the sum of Six Hundred and Twenty-one 1 )ollars. Now THIS Indenitrk WITNESSETH, that in consideration of Six Hundred and Ten Dollars of lawful monjy of Canada now paid by the said Assignee, to the said .Assignor [the receipt whereof is hjreby acknowle:! j;ed], the said As- signor Doth Herei'.v Assuin and set over unto the said Assignee, his executors, administrators and assigns Au. that the said before in part recited Mortgage, and also the said sum of Six Hundred and Twenty-one Dollars now owing as aforesaid together with all moneys that may hereafter become due or owing in respect of said Mortgage and the full benefit of all powers and of all covenants and provisos contained in said Mortgage. And also full power and authority to use the name or names of the Assignor, his heirs, executors, administrators or assigns for enforcing the performance of the covenants and other matters contained in the said Mortgage. And the said Assignor Doth Heremv Crant and Convkv unto the said Assignee, his heirs and assigns, Ai.i, and Sincui.ar that certain parcel or tract of land and premises situate lying and being in the Township of Smith in the ('ounty of Peterhoro', Province of Ontario, containing by admeasurement Two Hundred Acres, be the same more or less, being composed of Lot Number Eight [8] on the Tenth Concession of the Township of .Smifli aforesaid. To Have and 10 Hold the said Mortgage and all moneys arising in respect of the same and to accrue thereon, and also the said land and premises thereby granted and mortgaged To the rsK of the said .Assignee, his heirs, executors, administrators and assigns, absolutely and for ever; but suliject to the terms contained in such Mortgage. And the sau) .\ssi(;nor for himself, his heirs, executors, administrators and assigns doth hereby covenant with the said .\ssignee, his heirs, executors, ad- ministrators and assigns, That the said Mortgage hereby assigned is a good and valid Security and that the said sum of Six Hundred and Twenty-one Dollars is now owing and unpaid, .Vnd that he hath not done or permitted REAL KsTaTE. U9 undred ^iil'l:, to ^aid As- icc, his rucited 1 )oll;vrs Ibeconvj CIS and iilso full Ivoirs, of the he said livje, his nd and untv of undred light [S] ising in |ii;;nises [s hc-irs, |)ject to lors and iirs, ad- ;i good hr.v-one Irinittcd any act, matter or thing whereby the said Mortgage has been released or dis- charged either partly or in entirety; And that he will upon reijuest do, perfoim and execute every act necessary to enforce the lull performance of the ccjven- ants and other matters contained therein. In Witnkss wHiiREOK, the said [)arties hereto have hereunto set their hands and seals. SlC.NKIi, SeALKI) ANnDia.IVKKKD ] In the presence of W.M. NOTTEK. j Wll.l.IAM J. Ci.AKK. [L. S.J County ok Peteki!Oko', \ I, William Notter, of the Town of Peterboro', •in the County of iVterboro', Province of Ontario, TO WIT: j gentleman, make oath and say: 1. That I was personally present, and did see the within Instrument and Dujjlicate thereof duly, signed, sealed and executed by William James ("lark, one of the parties thereto, 2. That the said Instrument and Duplicate were executed at the Town of Peterboro', 3. 'I'hat I know the said party to be of the full age of twenty-one years. 4. That I am a subscribing witness to the said Instrument and Duplicate. SwoKN before me at Peterboro', in the' County of Peterboro' this first day of ^^.^^ ^^^^^ August, in tlieyear of our Lord 1.S98. John (^kkasok, A Coininiisioiier for taking affidavits in II. C. /. 4 Discharge of MoPtgragfe is a legal and statutory form of receipt showing that a mijrlgage lias bjeii p.iid. It requires to be a registx:reil instru- ment to cancel a registered mortgage. It must be signed in presence of a witness !)y t. 'I'he Mortgagee or his representative or 2. 'I'he Assignee of the mortgage in case it has been sold. The Mortgagee must not refuse to sign a discharge after a mortgage has been paid. If the mortgage has been assigned the assignment should be as accurately described in the discharge as the mortgage itself. All the particulars as to date, registration, etc., should be taken from the registrar's certificate on the assignment. A ilischarge operates as a re-conveyance of the lands to the Mortgagor or his representatives. ; i$^ REAL fiS'i'Af if. 5 Form of Discharg-e of Mortg-age— Province oi' Ontakio, \ County ok I'eterhoko', !- Dominion ok Canada, 'ro wrr. J 1'othc! Rcgistnir of the North Ridinj: of tlie County of Pcterboro', I, W'illimii janic's Cluik, of tlie 'I'ownshii) of Smith, in tlie County of I'ctcrboro', Province of Ontario, Do Ckriiiv tliat Henry Richard Mandcrs, of the Township of Sniitii afort'said, hath satisfied all money due on or to grow due on a certain Mortgage made hy Henry Ricliaril Manders and wife of the Township of Smith aforesaid, to \\ illiam James (."lark aforesaid, which Mort- gage bears date the First day of February, A. D. 1891, and was registered in the Registry Office for the North Riding of I'eterboro', on the third day of I'ebruary, A. D. iScji, at twenty minutes |)ast One o'clock in the afternoon in Liber ^^7 for the Township ol' Smith as No. 5755. 'I'liAT sucli Mortgage has not I )e(.'n' assigned. And that I am thi' person entitled l)y law to receive the money and that such Mortgage is therefore discharged. W'iinkss my hand this CwA day of February, A.I). i8y6. SlONED, St'.AI.KD AND DkI.I VKRKD | Signed, in the presence of W'm. Noi tkk. \V. J. Cl.ARK. (L. S.) ONTARIO, 1 I, William Notter, of the Town of Peterboro', County ok i';:TKRi!ORo', -in the County of Peterboro', Province of Ontario, TO WIT J Student, make oath and say : - 1. That I was personally present and did see the within Certificate of Discharge of Mortgage duly signed and executed by William James Clark, one of the i)arties thereto. 2. That the said Instrument was executed at the Town of IV'terboro', 3. That I know the said [)arty. 4. 'I'liat I am a subscribing witness to the said instrument. Sworn betore me at Peterboro', in the"! (!ounty of Peterboro', this I'irst day | ' of February, A. 1). 1S99. j John Creasor, J ■ \ A Commissioner for taking ajidavits in H. C.J. W'sx. Notter. 6 Unsatisfied Mortgagees Suppose Smith mortgages his farm to Jones as security for the payment of One Thousand Dollars. If the mortgage is foreclosed and sold, and only brings say, $800 over the expenses, the mort- gage is still good as an evidence of a debt for 20 years or 10 years in Manitoba, being under seal. If the Mortgagor is ever worth the $200 lacking in the mort- gage the Mortgagee may sue him and recover the amount with interest and costs. fiflAf. ESTAf L. i5i ity of L-rs, of grow of the Mort- red in day of oon in lid that erboro', )ntario, ficate of Clark, )ro', \c./. larni to [ortgage lie mort- anitol)a, ke mort- Icst and 7 Repayment of Mortg'ag'es— in mortgages made since July ist, 1888 in Ontario, where default has l;Li.n n.ade in jiayingany principal according to the terms of the mortgage, said prinri[;al may he paid at any time thereafter without notice or payment of interest in lieu of notice unless there be an ex- jjress agreement in the mortgage to the contrary. _ CHAPTER 37. The Torrens Systenf. Used in M.\Nnoi!A. How TO (;et a Torrens Title. An Ai!Soi,ute Title. Necessary A kit davits. I'ORM OK CeRTIKICATE OK TllLE. Form okTransker ok Title KoRM OF Mortgage. REAL ESTATE. The Torrens System. 1 The Torrens System of conveying real estate and of recording land titles, has been introduced into various provinces in Canada. In Ontario it was made applicable to the City of Toronto and to the new district of Algoma etc., lying to the north and west. Other parts of the province can bring it into operation by complying with the provisions of the Act. Although the titles to property are perfected when brought under this system, and transfers are easily made, it has been very little used in this province. 2 Used in Manitoba— Since the introduction into Manitoba of the Tor- rens system, a great portion of the lands, especially those in Cities, Towns and Villages, have been brought under its operation. The operation of the system is the same in all places, hence a description of its operation in Manitoba, and the forms used in connection with it there, will be applicable to all provinces and sufficient for the purposes of this volume. 3 How to Get a Torrens Title— The owner of lands under the old system, desiring to bring his title under the operation of the Real Propcity Act, as it is entitled under the Statute, makes an application in writing, in form prescribed by the Act, showing himself to be owner, what encumbrances there- on, what adjoining owners, &c., and this is duly verified by his affidavit. Ex- aminers appointed for the purpose by the Lieutenant Governor in Council, make a thorough examination of the title and upon their being satisfied, a Certificate of Title is issued by the District Registrar to the owner. m ■i^i 'I ''ii ^5^ ftEAL ES'I'ATE. 4 An Absolute Title— 'I'lie effect of aTorrcns Title by the Statute, is, that the production of a registered Certificate of Title shall be held in every Court of Law or Eciuity, to be an absolute bar and estoppel of any action against the person named therein, as seized of or as registered owner or lessee of the land described therein, ::ny rule of Law or lujuity to the contrary; with, however, only a few exce[)ti'.ns which are specifically mentioned in the Statute. The forms used under this Act are simple and brief and save a great deal of expense involved in repeated examinations of Titles under the old system. In- stead of the word "Deed"' being used under this system, it is termed a "Transfer." 5 Necessary Affidavits —Under the Real property Act, it is necessary that the witm^ss to tlie execution of the Mortgage or Transfer should make an afhdavit, verifying tlic execution, and also that the Mortgagor or Transferror make an affidavit, to the effect tlial he is twenty one years ot age and tiie owner of the land beirg transferred or mortgaged. 6 Form of Certificate of Title— Wilbert Mclntyre of the City of Win- nipeg, in the i'rovinceof Manitoba, Medical Doctor, is now seized of an estate in fee simple, subject to such incumbrances, liens and interests as are notified by memorandum underwritten in that i)iece or parcel of land known or des- cribed as follows: — ■ That is to say the North Half of Section Number Seven in Township NumbcT Thirteen, Range Numl)er Seven, east of the principal meridian in tlie Province of Manitoba containing by admeasurement Three Hundred and 'I'wenty Acres more or less. In witness whereof I have hereunto signed my name and affixed my seal this twenty fifth day of August, A. 1). iSqy. Signed in the presence of ) H. E. BlCRKIDCK. / U. R. Bkll. [seal] •';! ::^i: J )istri'jt Registrar for the Land Titles District of 7 Form of Transfer of Title— From registered owner to purchaser, with accompanying affidavits. I, Wilbert Mclntyre of the City of Winnipeg, in the Province of Man- itoba, Medical Doctor, being registered owner of an estate in fee simple subject however to such incumbrances liens and interests as are notified by memoran- dum underwritten, in all that landcontaining by admeasurement Three Hundred and Twenty acres, more or less, and more particularly described as the North half of section Number Seven, in Township Number Thirteen, Range Nuniber Seven, east of the principal meridian in the Province of Manitoba, do hereby il !'. RKAL ESTATK. '53 i, IS, ivery ction essee with, atute. .eal of . Tn- iiicd a in consideration of the sum of Nine Hundred Dollars paid to me by (leorge William Donald, of the city of Winnipeg, Accountant, the receipt of which sum I hereby acknowledge, transfer to the said (ieorge William Donald my estate and interest in the said piece of land. In witness whereof I have hereunto subscribed my name, this twenty fifth day of August, A. D, 1897. SioNKi) on the day above named by the said Wilbert Mclntyre in VVn,i!ERT McIntvre. the presence of Allan RuxnERFORn. ;cssat y ake an isferror e owner of Win- ,n estate notified n or des- ownship in in the red and my seal urcbascr, of Man- subject lemoran- iHundrcd Ihe North Number 10 hereby Manitoda. "I I, Wilbert Mclntyre of the city of Winnipeg in the Province TO wit: J of Manitoba, Medical Doctor, make oath and say; — 1. 'I'han I am the within named Transferror and that I am of the full age of twenty one years. 2. That I am the registered owner of the lands mentioned in the within Transfer. Sworn before me at the city of Win-"! u, this I Wii.i!ERT McIntrve. nipcg, in the Province of Manitoba twenty fifth day of August, A. D. 1897. j Clifford Sifton, J A Commissioner in B. R. -' '54 RF.AL KSTATE. ment ThrLC IlunJred and Twenty Acres more or less, and more particularly described the North Half of section number seven, in Township Number Thirteen, Range Number Seven, east of the princijjal meridian, in the Province of Manitoba, in consideration of the sum of Six Hundred Dollars lent to me by (leorge William Donald of the city of Winnipeg, Accountant, the re- ceipt of which sum I do hereby acknowledge, covenant with the said George William Donald. First, that I will pay to him the said George William Donald the above sum of Six Hundred Dollars, on the twenty fifth day of August, A. D. Nineteen Hundred and Two Secondly, that I will pay interest on the said sum at the rate of six per cent, on the dollar per year by equal payments on the twenty fifth day of August in every year. Thirdly, that I will pay taxes, and perform statute labor and insure the buildings on said land in favor of the said George William Donald at their full insurable value. And for the better securing to the said George William Donald the repay- ment in the manner aforesaid of the Principal sum and interest, I hereby mortgage to the said George William 1 )onald, my estate and interest in the land above described. In witness whereof I have hereunto signed my name this twenty fifth day of August, A. 1). 1897. SioNEU by the above named Wilbert Mclntyre as mortgagor, this twenty fifth day of August, A. D. 1897, in the presence of , Allan Rutherkoru. WlLKERT McInTVRK. (L. S.) 1' Manitoba. ] I, \Vilber,t Mclntyre of the city of Winnipeg, in the province TO wir; j of Manitoba, Medical Doctor, make oath and say ; — 1. Than I am the within named Mortgagor and that I am of the full age of twenty one years. 2. That I am the registered owner of the lands mentioned in the within Mortgage. Sworn before me at the city of Win- \ IS ( nipeg, in the Province of Manitoba, this [^ twenty fifth day of August, A. D. 1897. f Clifford Sifton, ) A Commissioner in 15. R. &c. Wii.hert McIntvke. MANrror.A] I, Allan Rutherford, of the city of Winnipeg, in. the Province of TO WIT ; I Manitoba, Teacher, make oath and say; (1) That I was present and did see Wilbert Mclntyre, the within named Mortgagor, execute the within Mortgage. AOENCY. »55 (2) Tliat I know llic said Will)erl, Mclnt)re tliat he is of the age of twenty one years. (3) That the said Mortgage was executcJ at the city of Winnipeg, and that I am a subscribing witness thereto. Sworn before me at the city of Winni"! peg, in the province of Manitol)a, this - twenty fifth day of August, A. 1). iSyy Clifford Sifton. Allan Rutherford. A Commissioner in B. R. I'tc. CHAPTER 38. 7t;- • irovince full age within [ntyke. hnce of named DlsKlNITION. The pRiNciPAi,. Thk Agent. Thiru Partiics. Ai'i'oiNTMKNT Orally. Appointment by Letter. Appointment 1!Y Power oi' Attorney. Form ok Power oe Attorney. , AGENCY. -, Proving Authority. Who may 1!e Principal. Who may act as Agent. Extent ok Authority. Termination ok Agency. Suit-Ar.ENTS. General Agents. Special Agents. 1 Definition — Agency is that condition of affairs where one person at- tends to business for another person. It is difficult to get a full view of this comprehensive department of Commercial Law. If you send a boy to pur- chase a postage stamp for you, he is your special agent to attend to that busi- ness. You have a man employed in your workshop to do work for you ; he is your agent for that work. You engage a clerk to sell and buy, to pay and re. ccive payments, etc., for you in your grocery store ; he is your agent. You appoint a person to sign notes, drafts, cheques, deeds or mortgages for you ; he is your agent. How very small would be the business houses, and how meagre the commerce, without agency. How would our great lines of railway, or our steamboats be worked without it ? Every engineer, brakeman, firemin, conductor, etc., is an agent in his own department for the railway, or stearai- boat company. m p 'i i I 4 '56 ARKNf.V. 2 The Principal is the name given to the person that gels another to do business for him. He may be any person capable of making ordinary con- tracts, and he can employ another, to do for him anything that he may do himself. 3 The Agfent is the person who does business for another. He may be any person who has sufficient understanding to do as he is directed by his principal. Alhough a minor cannot usually bind himself in a contract, he can, as agent, bind his principal ; so may a married woman, in cases where she could not do business on her own account. ICxamples of agents are : com- mission merchants, brokers, auctioneers, lawyers, etc. 4 Third Parties are those persons with whom the agent does business on account of the princi|)al. They and the principal are the i)ersons con- cerned in the business transacted. 5 Appointment Orally I'or ordinary business, agents are frecjuently appointed orally —by speaking to the agent or employee, and giving him di- rections. 6 Appointment by Letter, etc. — When the agent lives at a distance, or is going away some distance to do the business, a letter of authority is given to him. Such letter will usually, (i) Grant authority to do business. (2) Specify the business to be done. (3) ("live lull directions as to how it shall be carried out. 7 Appointment by Power of Attorney— When the business is of such a nature that the agent is retjuired to sign notes, drafts, checjues, deeds, mortgages, etc., or to enter into contracts under seal, a formal document un- der seal is usually given him, called a Power of Attorney. Such Powers of Attorney may be (i) (leneral— giving the agent full power to transact all the usual bus- iness of the principal, or (2) Specific — giving authority to do one or more particular acts, and no more. 8 Form of Power of Attorney— Know all men by tiiese Presents, that I, Thomas Denton, of the Town of Barrie, County of Simcoe, and Province of Ontario, gentleman, do nominate, constitute, and appoint John Smith, of the City of Stratford, in the County of Perth, manufacturer, my true and lawful attorney, for me, in my name and on my behalf to — {Here give fall detail of the work to he done by John Smith for Denton.) And for all and every of the said purposes hereinbefore mentioned, I do Ji« ACENCV. hereby ^rfve ^^j '' tZJ '" tne presence of I ^'• ^- f- AfclNl Vi' '"'^>' '^e proved l.v I. • ^''^'^ '^^ ^•«" clo personally '"^f,^' ^^ -^'^y I^crson can do an art bv . 12 Extent of Authority a '" '^ '-^^^^ ^^ agent. """S 'n each particular 13 Termination of Affencv a ' ""^''l, „ , ^"'^~'^^"^^-^'-'-inatedinanu.ber I'; '*y lapse of ti,n,'-~ir \ ^ 'nsan.ty, or where the agent ! 11 ii »S8 ACfiNCV. becomes incompetent through insinity, or by any other cause where cithcf principal i)r agent dies, llic agency is dissolved. 14 Sub-AgfentS arc those who act under otlicr agents. .\ appoints H his agent to do certain acts. B may appoint C to do some of them or all of them for him. The agent is principal to the sub-agent, and is governed by just the same rules of principal and agent, as exist between the original i)rin- cipal and him. If the sub-agent acts fraudulently the agent suffers. 1 5 General Agfents are such as are entrusted with all their principals' busi- ness in a certain line or for a certain district. Their authority is usually of a general nature, and not usually restricted except by territorial or depart- mental lines. 'I'he manager of a Joint Stock (.'ompany, or a Mutual Insurance (Company, is usually called the "general agent" or "chief agent '' of the com- piny. 16 Special AgfentS arc those appointed to do certain acts. Their au- thority limits them. If A gives B authority to sign a note payable in three months, and he signs one payable in two months, he exceeds his authority, and he only binds his principal as far as the authority goes. r' i! I' m if fliii CHAPTER 39. n'KINCIPAI.'s I.IAIill.lTV TO Af.F.NT. i DUTIKS OK AdENT TO PUINCIPAI.. ' I'kiNcii'Ai, AND TiiiKi) Parties. .\(!KNT's I,IAI{II,1T\. AGENCY. "^ Extent OK Acent'.s AuTMORiTV. ' E I- KF.CT OK Notices etc. Raiikicaiton AND Disakkirmance. ^ ■ Commission Merchani or Factor. Brokers. 1 Principal's Liability to Agfent— The principal is liable to his ajrenf for (0 (2) tra le. (3) For all damage sustained by the agent when following his principal's directions. All advances and expenses lawfully incurred about the agei For all commissions or salary agreed upon according to the ;c of 2 Duties of Agfent to Principal— An agent is bound, [i] To use reasonable care, skill and forethought for his principal in the discharge of his business, just such as he would use if it were his own. A'. Hi fii It- M i\ 1 i i !.) t6o AGENCV. The Secretaries, Treasurers, Managers, etc., of Stock Companies, Corpufa- tions, etc., are simply chief or general agents for the companies or corpora- tions, and should be careful in signing negotiable paper, etc. If they sign s\m[)\y ^' IV. y^. S/e//iffis, A/ci/ia^rr," they are personally liable. He should sign " Credit Valley (Quarrying Company (Limited), per VV. B. Stephens, Manager," unless he is authorized by the Company to sign his name. 5 Extent of Ag-ent's Authority — When instructions are given he must follow them. If he is to receive cash in payment of debts he has no authority to take notes or merchandise in payment. Cicneral authority to do business or to collect debts, and give discharges for debts, does not give authority to accept bills and sign notes. Special authority is necessary to incur such liability. The usual employment of the agent sometimes gives him power to charge his principal with goods. If I sometimes send my servant for goods with instructions to have them charged and should at another time give him the money to pay for some goods, and he puts the money in his pocket and has the goods charged to me, I am liable> because it has been done before on my order. If my servant should buy goods for himself from the same man, and have them charged to me, the seller, not knowing but they are for me, I am liable to the third party. The servant is, however, liable to me. 6 Effect of Notices, Tenders, Etc—Notice given to my agent is deemed to be given to me at the same time it is given to the agent, and pay- ment tendered to my agent is payment tendered to nie. Notice or tender made by my agent to third parties is made by me. 7 Ratiflcation and Disaflirmance— If an agent does business for his principal, that he is not authorized to do, his principal ratifies it if he accepts it, and disaffirms it if lie refuse to make the transactions his transactions. Ratification of an act is equivalent to prior authority. Ratification may be made in two ways — [i] l>y express words. In case of Stock Companies, Corporations, it is usually done by resolution of Directors, etc. [2J IJy accepting the benefits accruing from the act. 8 Commission Merchant or Factor is an agent employed to sell i;(H)ds for a principal. [ij The goods are in his poseession. [2J He may sell for cash, but on credit only when so instructed by his principal. [3 1 If lie sells the goods in the name of his principal a purchaser cannot set off a peiboiial dcbi against ll e factor as payment for the goods. ssss for his [accepts iclions. (may be Ins, it is ito sell by his I cannot AGENCY. 1^1 [4] He has a lien on the goods for advances made on them, and for storage and all legitimate expenses in connection witii them. [5] He lias not a lien on the goods wlien they arc in transit for bills of exchange accepted as advances on them, unless the goods have been con- structively delivered to him by assignment of the bill of lading. 9 A Broker is a person who does business, or buys or sells for anotlier. A i)roker differs from a fa.ctor or commission merchant, in this, tiiat lie does not have the goods in iiis possession. He is simply a sort of middle man who makes bargains for pcoplii who a>-e, i i] Ignorant to a greater or less extent of the business they intend to have done, and they find that the broker understands it and can do it better than they can or [2] 'I'he Droker has better business connections than they have, and can procure better rates or i)rices for them, or [3 1 They do not wish to be known personally in the business until the transaction is complete. He cannot act for both buyer and seller at once. He can act for one only, If he acted for both, he would be placed in a position to perpetrate fraud on one or both parties. IJrokers differ in name according to the kind of business they do. A Stock Broker buys and sells stocks, bonds and securities. A Real ICslate Broker deals in houses, lands, etc. An Insurance Broker effects insurances at best rates for his customers, (S:c. Their relations and liabilities to principals and third parties are the same as agents under similar circumstances, and their pay, a commission on the value of the transaction. ^ CHAPTER 40. f l)i;i-iNrriON. 1 ^'ARIOUS Na.mks. COMMUNM V OF I'KOKIT. 1 DiU'iNirioN ()[■■ Tkrms. I Who Mav iik a Paktnkr. Cil'.NKKAI, PaRTNKKS. PARTNERSHIP Sll.KNr PARTNKk.S. LlMllEIi I'AUrNKRS. NoMiN .1, Parinkks. How Formkd. Parinkr iiv Implication. . j Partnkr i;v Orm. Contract. [Partner liv Written Contract. 1 Deflnition - Partnership is a voluntary contract between two or more persons to contribute their properly, labor, skill, knowledge or credit or some r* If ¥ : 1 1 i 1 1 1 j 1 1 li m \62 PARTNI'.RSHir'. or all of them into some lawful business enterprise for the purpose of making profit, and to divide any profit or hear any loss they may make in course of tlie business, in hucli proportions as have been agreed upon. 2 Various Names— A Partnership is also known as a Co-partnership, a Firm, a House, a Company, these several names are synonymous and refer to the Partnership collectively. When the persons com[)i)sing the partnership are referred to individually, each one is called aj^arimr. 3 ComTTlunity of Profit —The central idea in all partnerships is to make profit, and the legal test of any partneishi[) is a '•'■community of profit ^^ that is, all the profits made by the firm go into one common fund, and are divided after the losses and expenses have been deducted. In case it is de- sirable to [)n)ve the existence of a p:xrlnershi[) at law, all that is necessary is to show that there is a community of [jrofit, tiial is, a common [jrofit fund for the parties concerned. 4 Definition of Terms - Ciipital is the property, real or personal, invested in the business. This is sometimes called the im^cstinent. Jiesourccs, sometimes called the assets, are, all property, money, etc., held by the firm, and all debts due them either on negotiai)le pajjcr or book account. Liabilities nre all debts owing by the firm either on negotiable papers or book account, or on non-negotial)le contracts, such as mortgages, etc. Net Capital is the balance of resources over the liabilities at any time. Such a balance at the beginning of a business is called the Net Investment. Net Tnsnlcenc]! is the excess of the liabilities over the resources. Gross Gain or profit, is the total gains without deducting any losses or expenses. Net Gain or profit, is the balance remaining when the losses and ex- penses are deducted from the profits. Gross Lois is the total loss without deducting any gains. Net Loss is the excess of losses and expenses over the profits in any business. 5 Who May be a Partner -Any person capable of doing business that is, any person of age and able to make ordinary contracts. According to the nature of their agreen.>ents partners may be divided into,— [i ] (leneral Partners, [2) Silent Partners, ' 1,^1 Limited Partners, [4 J Nominal Partners. f'AfiTNKkSHlR 1^3 This . held ^ses or Ind ex- si ness. siness_ ling to 6 A General Partner, sometimes calkd an ostensible partner, is one that i.^ known to the pul)Hc as a partner. [i] He generally appears at tlie place of l)usinc.ss, and takes an active interest in tiie conduct of its affairs. [2] He is represented in the firm name either l)y having his name ap- pear in it, or by the term "Co." (Company.) 7 A Silent Partner, sometimes called a sleeping or dormant partner, is one whf) contributes capital and has an interest in the business. [i] He is not known to the public generally as a [lartncr. [2) He does not lake any active interest in the affairs of the firm. If you wanted to do business with the firm you would not find him in the office to attend to your wants. [,5] He is not represented in the firm name by anything more definite than Co. (("onipany). 8 A Limited Partner, sometimes called a special partner, is a silent partner, who, at the making of the partnership contract, stipulates that he will not agree to be liable for losses beyond a certain amount. This sum must not be less than his capital invested. It should be noticed in this connection : — I i] Th.it a general partner cannot limit his liability to a fixed sum be. cause he has the working of the business and knows all about it and might take this way of defrauding creditors. [2] That any agreement as to limited liability must be in the articles of agreement when the partnership is formed, and in the declaration or certi- ficate of the partnership that is registered. 9 A Nominal Partner s one who has no financial interest in the busi- neiss but who lends his name and credit to the business. He may be liable for the firm debts though he gets no profit. l^XAMi'LK. — Jones is a member ot the firm of Jones i^t Brown. He sells his interest in the business to Smith but allows his name to remain in the firm name so as not to make known to the public generally that the po[)ular and wealthy Mr. Jones has severed his connection wi:li the firm. Jones is held out to the public as a partner. Any person giving credit to the firm in good faith, believing Jones to be a partner, can hold him responsible for the debt in case of failure to [)ay by the firm. Any person doing busine-s with the firm and knowing that Jones was only a partner in name, could not hold him for the firm debts. 10 How Formed— Partnership contracts are formed as all other con- tracts — by agreement of the parties. An agreement may be in express words pm 164 PARTNERSHIP. i n or by persons simply engaging in business together without any definite stip- ulations. 'I'hc agreement is, therefore either, [ij Implied, I [(/] Oral Contract, [2] Expre.ss, < [/'] W^ritten simple Contract, [ [c-\ Written sealed Contract. 1 1 Partner by Implication— It was mentioned in a preceding section [No. 3] that sharing m a common proht fund is the primary element of a partnership. W i)crsons do business together without any agreement they may be proved partners. A, in Ontario, migiit buy horses and ship to 15, in Win- nipeg ; B sells the horses, they divide the profit made on the transaction — they are partners by im[)lication. 12 Partners by Oral Contract— Many partnerships are formed by the parties simply meeting and agreeing among themselves -the terms are not always stipulated in full. Such contracts are not desirable, as many disputes arise out of an imperfect understandnig of the /crms of the contract. Oral contracts should not be depended on when the business of the firm is of any consecjuence, and, besides, oral contracts, under the Statute of Frauds, are good for only one year. . • 13 Partners by Written Contract When any large amount is in- volved the articles of agreement should always be in writing. A seal added to make it a specialty contract, makes it better and more binding. Such written agreements are called " Partnership Contracts," "Articles of Partner- ship," " Partnership Deeds," l^c. They should contain — [i] The descri[)tion of the parties and firm name. [2J I'he nature of the business and the place where it is to be carried on. This is called the undertaking. [3] The investment of each partner and the mode of division of profits and losses. [4 J The date of commencement and the duration of the partnership. [15J Limitations of powers of partners and their duties to one another. [6 1 I'rovisions for keeping accounts and settlement of partnership affiiirs. [7 1 I'rovisions for dissolution and final adjustment of partnership affiiirs. [8j i'rovisions for settlement in case of death of a partner. [9] It is very proper to make provision for the signing of the firm name, who shall do it and who shall not. [lo] It is very proper to include a provision binding all partners not to indorse paper for any other firms personally, or become surety or bail for any one without consent of the others, as a sudden withdrawal of a partner's in- terest mi^ht cause the firm to ^oliapse^ if it occurred at a critical period. ■ m I'ARTNKR-Sim'. 1 65 CHAPTER 4i. 1 name, not to [or any Icr's ia- PARTNERSHIP. CoNTRIIiUTION OK CaPITAT,. Division ok I'KOKns. Form of Artici.ks ok 1'artnersiiip. 1,K(;ai, Rki'ukskm ativks. I'rovisiON KouI)is.soi.uri()N. I'ou.M OF Provision for Dissolution. KKCISIRAIION of a I'ARI'NI.RSIIIK. I'OK.M FOR RkCISTRATION. Salary I!aski) on TROFirs. OWNKKSIIII' OF INVLSIKI) CArilAL. 1 Contribution of Capital.— l^adi i)artncr contributes in some way to the capital or aiaintenanco of tlie firm. He mav contrihute, — (i) A capital of cash, real estate or personal property; (2) A secret of some [iroccss of manufacturing, a patent right or some- thing of use to the firm ; (3) Labor, or skill, or work, or experience, or knowledge, or time in man- agement ; (4) Good will of an established business ; (5) Credit — the use of his name in indorsements, i\:c., for the firm. A partner may contribute any one or ail of the foregoing to the Partnership and draw the profits on account of the i)cnefits the firm derives from him. 2 Division of Profits—Profits are freipiently divided, (i) According to a fixed proportion, say one-third to each of three part- ners, era half to one, a third to another and a sixth to the tliird ; (2) According to ca[)ital invested in the business; (3) IJy allowing eacii a salary and dividing profits remaining according to a fixed proportion, or according to capital invested ; (4) By giving each partner interest on iiis capital and dividing the remain- der according to some fixed [)roportion ; (5) By a salary to each for service, interest to each on cai)ital invested, and remainder to be divided according to serine fixed proportion, sayecjually, or two thirds to one and one third to the other. In many firms it is necessary to adopt tlie fifth method of three fold di- vision that ;jives; — (a) Pay for personal service, skill, lKic. , _ (b) Pay for capital invested. (c) A general sharing up of the remaining profits to every member of the firm, whether active, silent or limited partner. 1 tl f i ! I i66 PARTNERSHIP. 3 Form of articles of Partnership— ARTICI.KS OK AClRICEMENTmade the first day of March, in the year of our Lord one thousand cij^ht lumdred and ninety-seven, Between John Henry Christie, James Christie and Andrew A^ar, all of the Town of Meaford in the County of Crey, i'rovince of Ontario, Tinsmiths. Whereas tlie said [)arties hereto respectively are desirous of enterinj^ into a Co-partnership, in the business of Hardware, I'insmithm^, Steam Fitting, Plumbing, ivrc., at Meaford aforesaid, for the term, and s:i)ject to the stipu- lations hereinafter expressed. Now THKREKOKK, THKSK PRESENTS WITNESS, that cach 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: First.— That the said parties hereto respectively shall henceforth be, and continue partners together in the said business of Hardware, Tinsmithing, Steam Fitting, Plumbing, iV-c, for the full term of Five Years, to be comput- ed from the first day of Marcii, one thousuid eight hundred and ninety-seven if the said partners shall so long live, subject to the [irovisions hereinafter containe 1 for determining the said partnership. Second. - 'I'hat the said business shall be carried on under the firm name of "Christie cV' Agar." Third — Tliat the said jiartners shall mvest capital as follows: — John Henry Christie Six Hundred Dollars, cash, James Christie Four Hundred Dollars, cash, and Andrew Agar Five Hundred Dollars, and Tools valued at One Hundred Dollars. l""oui the partners. A partnership, whither for a definite or irdefinite term, may l)e dissolved any time by mutual consent. If it is the desire or intention that a partner be relieved from a partnership when lie desires, tlien somi;lhing like the subjoined clause should be added, as mutual consent means the consent of all partners and if one withheld his consent, he could block dissolution, even if the agree- ment plainly expressed that it could be dissolved by mutual consent. 6 Form of provision fOf Dissolution. — "And it is hereby agrtvd, in the case of dissatisfaction on the part of any or all of the partners, any one of them may terminate this partnership on giving three ukjuiIis notice in writing, and the person giving such notice shall be i)rc[)ared, either to l;uy out his [lart- ners share or sell his interest in tiie business at an agreed or arbitrated value. 7 RegriStration of Partnersllip It is not sufficient to draw up a part- nership deed to com[)ly witli the laws of Ontario, and almost all Canadian Provinces and American Stales. It is necessary to register a declaration of the formation of such partnership, so that a person who dcaires to do business with such partnership may be able to find out, leadilyand surely, who are to be financially responsible to him for contracts he may Uiake. It is also necessary to be able to know the members of a firm in case a suit at law is to be brought against them. The Revised Statutes of Ontario, Cap. 130, provides: — (1) That a declaration setting torth the names of all of the partners, and the firm-name, etc., be registered in the County Registry Office where the firm business is carried on, (2) That any individual who wi'-;lies to add "i\;Co." to his name, or to use any special name other than his own, must register a declaration to this tffec. kinds ^Partnership. 1^9 (4) III case 0/ nfL'lert fn r • 'o-- the Judicial District. ^ '^ '''^';'' "^ "'^ '^'"own and Common pleas -"•y Keg..,) Office "" "' ""'""^"'P "-'-«»„ ,„, .eg,-s,cnng l„ ,he ) County Registry Ortice I'Hovmc. o,. Ontakio, Countv '•" the County T/ZrcV' in 'iLp"""' ^''"■'''"''' ""^ ^"^rew Agar of Mn.f ^ ^^- '^-'-.ehavect e t Xr:,"^^ Ha^^o, Tinsmithing. St:^,^^^ H^r'"^^^-"^ '--ss of '"^^^'^'^^'^-^"-•-d Since the «.t day or March, -apa.;:::r^""^^^--''---^-^-.^^eon,^ ^""^ t;,1^7":/r^s at Meaford 1 2 ist day of March, [ J^h^ Henrv Christie. A- I>. 1897. JAMKSCHKrsTIl.' Col ^ Andrew A(;ar. » Salary Based on Profits in ^h.efclerk a percentage ofZllrtryr " ''^ '^-tomary to give a profits without being liable .. "'^ ^'^'^ ^^here a person m. T ' tn ^^,^. cr . ^ 'laoie as a partner Tk f'crson may share P-'ner "TZTedT/ '"™"''' "aPital-As soon as .he 'n case one contributes cinitpl oT ^""^ '^°"^'''buted pronertv H. ^ " '"^ property of his tn. il ( I fill '^ I ill I ( ! I!) 3r II > > m ii i ] 170 PARTNERSHIP. PA'.lTNEBSHfP. CHAPTER 42. f POWKRS OK I'aRINKR.S. Acts a Partnkk Musr Nor Do. ICl'KKCT OK Ac.KKKMI'N'I liKIWKKN PaRTNKRS. I'ARTNKKS CA>!NnTSUK HIK FiRM OR OnE ANOTHER. I-i Aiiii.niKS IN Cask ok Insoi.vkncy. Dl.SSOI.UTION OK I'Akr.NEUsmi' — HV I')XI'IKATI0N OK TlMI'.. 11 ('o.Mi'LKTiON OK Work. ^ M NfiTTUAL Consent. M Sai.kok I'aktnkk's Interests n I)KAI'f{ OR iNCAl'ACnV OK PARTNER. ti Bankruptcy ok Partner. n Decree of the Court. Division ok Assets. I.iAiiii.iTiES ok Retiring Partner. Advertising Dissolution. Registration OK Notice ok Dissolution. Power of Partners .'\fter Dissolution. (>) (2) (3) (4) (S) m (7) 1 Powers of Partners — Each general partner, unless prohibited in the articles of partnership, is the general agent of the firm, and it is within his power to act for the firm. (i) He may bind the firm in all matters that come within the limits of the undertaking of the firm. For example: A firm is in the grocery busi- ness; a member of the firm could properly bind the firm in such transactions as properly belong to the grocery business — he could not in the real estate or hardware business. (2) He may receive payment of debts due to the firm, or compromise them, or represent the firm in a suit at law. (3) He may make, sign and accept negotiable paper for the firm, in the regular course of its business. (4) He may borrow money necessary for the carrying on of the firm's trade. 2 Acts a Partner Must Not Do— (i) Generally speaking he must not do anything contrary to the agreements in the articles of co-partnership, nor du anything prejudicial to the best interests of the firm for his own personal advantage. (2) He must not use the property of the firm for his own use. (3) He must not use the credit of the firm for his own personal l)enefit. 81 ■!■ HER. R. d in the thin his le limits ry busi- isaclions ;state or promise firm, in le firm's ■y to the jdicial to xl benefit. fAkTNKRSHIP. tit (4) He cannot bind the firm Ijy giving the firm's note in payment of his personal debt. The consent of the firm to any of the foregoing prohibitions, makes the act the act of the firm and not ol the individual. 3 Effect of Agreement between Partners— Partners may make such agreements among themselves as they think desirable, and all of them are bound by such agreements as among theinticlvcs. These promises cannot be imposed on outside parties. , 4 Partners Cannot Sue the Firm or One Another— If one partner sued the firm, he would in reality be suing himself, as the firm does not exist without him. Should he bring an action against one of the partners, it would have the effect of dissolving the partnership. 5 Liabilities in Case of Insolvency— In case a partnership becomes insolvent, the entire partnership property would be taken to satisfy the firm's del)ts. If a portion of the debts remained unsatisfied, the private property of the partners, that they had not put into the concern, would, subject to priority of the partner's private creditors, be taken until the debts were fully satisfied, in case enough could be found to satisfy them. The only exception to this is in the case of a limited or special partner — his liability is not greater than the capital invested. In case he had withdrawn part of his capital, he would be liable for the amount withdrawn. 6 Dissolution of Partnership is the separating of partners and the ending of their business relations together. This may be accomplished in various ways. (i) By expiration of time. (2) By completion of work for which it was formed. (3) By mutual consent. (4) By sale of partner's interest. (5) By death or incapacity of a partner. 1 (6) Bankruptcy of the firm or a partner. (7) Decree of the court. 7 Dissolution by Expiration of Time.— The majority of partnerships are made for a definite length cf time — one year, two years, five years, etc. Immediately upon the completion of the time, the concern is dissolved. It may be continued by a new agreement. If no stated period is mentioned in the written agreement, the partners may have an agreement among themselves as to the time the contract is to end. ^1. 1 iff r ^ 'i III 1 '72 f'ARTNr.RSfflP. 8 Dissolution on Completion of Work-It is not uncommon for persons lo become iKirtners for one simple contract. A. & B might become paitners t(j l)iiild six miles of railroad. At the completion of the work the parlnorship woiikl be dissolved, because the piir[i»)se for which it was formed w IS accomplished, llimigh ihey may not specify, in tiic agreemcr.t. the terminat- ing of the contract. A di>solulion, or) completion of the work, is implied. 9 Dissolution by Mutual Consent— This is the common method of ending a partnerslii|) contract. Tiic partntrs entered into the partnership contract of their own free will and accord for their mutual benefit, and ihey can, by another new agreenKiit, just as freely, cancel the old contract and be separated. It must be wiib the con.sent of all the parties, and if the partner- slii[) contract is under seal, tl.c agreement for diijsolution should also be under seal. 10 Dissolution by Sale of Partner's Interest— A partner may, with the consent of his associate partners, sell his interest or share in the business. It would not be proper for him to be able to sell without consent, as he might put a partner in his place who would not be agreeable or congenial to the re- maining partners. Just as soon as a partner sells his interest, the agreement is voided, the new man cannot simply take the place. There must be a new agreement between the remaining old partners and the new one, which means new articles of partnership. It may be in identical terms with the old. It is however new because of the new partner. 11 Dissolution by Death op Incapacity of Partners— A partner dies, there is no agreement between his heirs and the remaining partners, and the partnersiiip is dissolved. By a new agreement one or more of the personal re[)resentatives of the deceased partner may take his place, but it is a new partnership by a new contract. The same is true in case of insanity of a partner. 12 Dissolution by Bankruptcy of a Partner— When a partner in a firm l)ecomes bankrupt personally, the partnership is dissolved, his share in the business passes to his creditors, and they of course are not partners. 13 Dissolution by .Decree of the Court— If partners are continually cjuarrelling or disagreeing and pulling in different directions, and they cannot agree to dissolve, application may be made to a competent court, and an or- der obtained dissolving it. The following are common grounds for gninting an order for dissolution, (i) Improper or fraudulent conduct by a partner. (2) Violation of articles of partnership. (3) Exclusion of partner from sharing in the carrying on of the business. 0J1 for ecome rk the foriwcd rniinat- icd. thod of ner^hip nd Uiey : and be partner- e under ay, with msiness. le might o the re- rreement be a now 'h means d. It is partner liers, and ersonal s a new ity of a tner in a re in the tinually cannot Id an or- • ition. business. I'AHI NI.USIIII'. »7.1 • (4) ('ontiniicd (|ii:irri;Iling so as to render it im;)»)ssil)ie to carry on properly ilie business of the tirm. (5) Inability of partner to act on account of permanent illness, or by being (lisabled. (6) Intemperance, immorality or dissipation of a partner that will tend to impair the credit or business of the firm. 14 Division of Assets -In cise of disso'ution the basin 3sh is very fre- quently carried on by a new partncrshi[) formed from the rem lining' part of the firm, or perhaps a new partner may be taken in, in place of the retiring one, In the first case, a pirt of the assets of the firm, such as cash, b'lls re- ceivable, real estate, etc., are handed to the retiring partner for his interest. If a new partner takes the place of an old one, he fretiuently [)ays him a sum and takes his |)lace In some cases the liabilities of the firm arc paid off, and the remaining as- sets divided am )ng the partners. Sjuietimes theie are all converted into cash before a division is made. 1 5 Liabilities of Retiring^ Partner —A partner retiring from a firm is personally liable to outside parties for all debts contracted while he was in the firm. Credit was given the firm [)artly on the strenglii cf his name, and he continues to be liable until that debt is paid, unless the creditor agrees to ac- cept the new firm for the debt, thus dischargmg the one retiring, 16 Advertisin{( Dissolution— When a partner retires from a firm it is customary to give public notice by advertisement in the local papers, and by sending a circular letter announcing the dissolution, to all persons who give credit to the firm. If this is not done, any person giving the firm credit, not knowing of such dissolution, may hold the retired partner liable for dtbts con- tracted by the new firm in good faith, on the standing of the partner that claims to have retired. 17 Rejistpation of Njtica of D!s>Dlution -Not only must the firm register the Articles of Partnership, but a retiring partner must also register a declaration of dissolution of partnership if he wishes to free himself from being responsible for the debts that the firm may contract after he leaves them. The following is a form suitable for Registration. Province of Ontario, County f I, John Henry Christie, formerly a mem- OF Grey. (ber of the firm carrying on the business of Hardware, Tinsmithing, Steam l''itting, Plumbing, ounly. As examples, we have hospitals, homes for the aged, infirm, etc. cer- tain schools -in fact, all such corpcrat ions as have for their object the care, assistance, relief and help of the poor, and needy, or unfortunate. 7 Joint Stock Companies— -are formed by private enterprise for pur- pose of carrying on some business such as manufacturing, banking, railroading, insurance, etc., with the express intention of making profit for the members who are called stockholders or shareholders. 'I'hese companies are creited by the statutes of the country or province where orgxni/.eJ, and derive their powers from such country or province, and are responsible, and, in most cases, are compelled to report annually at least to such country or province the status of their capital stock, and frequently, a full statement of their business. They are created in two ways, (t) By act of Parliament or Legislature, (2) Under the provisions of the General Statute. The document issued under the Great S:;il of the country or province which sets forth the powers and privileges granted, is called a Charter, or Letters Patent. Whether issued by special .Act of Parliament or under the general statute, it forms a contract between the country or province and the corporation. 8 Incorporated by Act of Parliament— When a number of persons desire to enter into such a business as banking, railroading, and other enter- prises in which the public are largely and specially interested, it is necessary to apply directly to Parliament for an act of incorporation. A special act is passed and a charter is granted. The charter will refer to the Joint .Stock Co's Cliuses Act for the general principles ot o-gxnization and government, mik-'n.^ such act a pxrt of the contract between the pjwer that grants the charter and the company. . 9 Incorpopated under General Statute— The organizing of Joint Stock Companies has become so common that it has been fou d nt ces^ary by the Federal Parliament, as well as the I'rovincial Legislatures, to allow of the formation of companies for mercantile, manufacturing and other purpo.ses at any time, subject only '.0 the sanction of the Governor in Council. |ii'f '■ COirT»r»RATIONS AM) lOINT STOCK COMI'ANIK.S •77 'I'he principles of organization and gov'einmcnt of all such concerns arc- so much ah"ke that a Joint Stock ('ompanies' Act has lieen passed by not only Federal but Provincial Legislatui-es, which gives the general powers and privi- leges to su :h c )mpanies as have received their chirters directly from the (iovernor in Council. T.iere is now no delay caused by waiting fruui one session of Parliament until another, to get an act jiassed. 10 Federal or Provincial Charter— TIh- Dominion I'.irliament resirves the right to legi.-^late on all matters that have to do with the general interests of all ^.anadian people,— Commerce, for instance, -therefore only the Domin- ion Parliament grants charters to Banks. If the business is one, for which branch offi -es or agencies are only to be established in theProvince where the head office is, then, it is only necessary to apply to the Provincial Legislature for incorporation. If the Corporation will have agencies or offices in more thin one Province a charter should beo!)tained from the Dominion Government. For Example — An Insurance Compnr-.y, that only intends doing business in Ontario, need only apply to the i^rovincial Legislature of Ontar.o for a charter. If, however, they desire to do business in other provinces, their charter should be from the Dominion Parliament. 1 j i persons enter- ;essary act is Ik Co's ik-n,.^ th.irter Joint [ary by lof the Ises at 11 Associations, Societies, &C.- Provisions have been made by general acts of Parliament for the forming of Associations for mutual insurance, co- operative associations for carrying on mercantile business, m i uifacturing, etc. by registering in the office of the clerk ot the [x.ice of the country a statement of the business intended to be carried on, together with the corporate name and the rules and by-laws for the govenmient of the society, duly sworn lo belore a Notary or Magistrate, also sending to the Government, at the same time, a copy of tie document so rcgistersd. 12 Laws fcr Government — All cor[)orations arc the cre.ntion of s(>me legislative body, and the body that gives them i)ower to do business likewise makies la\",s for their goverrmient. The following is a short summary of such laws as they affect Joint Stock Companies in (Janada: — (i) There must be at least five members before they can become incor- porated. The officers at the beginning are ciUed provisional directors. When organization is complete regular officers are appointed. (2) Offi::ers should be elected once a year at a general meeting of Stock- holders. (3) A general statemj;.t of the affairs shouli be subuiitted to the S!iare- liolders once a year at least. J ' li P 178 JOINT STOCK COMPANIFS (4) The Company must report to the Ciovernment that Incorporated It at least once a year, and ofioner, if recjuire:!. (5) Proper books of Account shall be kept for the ordinary business transactions of the Company. (6) Special books shall be kept for the capital of the Stockholders, show- ing clearly all transactions, transfers,, etc. (8) When a dividend is paid it must be paid out of profits and not out of capital. (9) To have a chief office and to keep a sign board with ttie name of the Company painted thereon at such head office. (to) The word "limited" spelled out In full must be in the nartie of every such company in all advertisements and documents issued by it. CHAPTER 44. JOINT STOCK COMPANIES. 'J'ni-: Organization. Shares. " Authorized Capital. SuiiscRiiiKD Capital. ,■ Paid ui' Capital. Prkficrknck Stock. C/UARANTICED OR DePENTURE StOCK. Calls. Internal Management— Form ok Proxy. ', cikneral i'owers of stockholders. ('ori'orations act through their. officers. Power to Contract. Limited Ltahility. DoUliLE LlAlilLITV. • 7 The Organization— The first steps to be taken In the organization of a company arc — ' ( I ) Te advertise in the Gazette that it Is the intention to apply to the Provincial or Dominion (lovernment for Letters Patent of incorporation. {?■) To issue a prospectus, which should give full particulars regard- ing the company to he organized. ((7) The name of the company. (/') The amount of c tpital, nnd the number and value of the shares into which it is to be divided. (c) The name:-: of the provisional officers. ((/) The nature of tlie undertaking of the company, that is, what busi- ness the company will do, * I JOINT STOCK COMPANIES. '79 It ;ss )W- out the 'ery ' (e) The advantages, profits, dividends or emoluments to he giincd l)y stockholders. (/) The conditions on which the stock is sold, including terms of payment of same. (3) To get a number of signatures to the stock I)ook (not less than five persons.) (4) To apply to the Provincial or Dominion Government for a char ter. There must not be less than five applicants. (5) On the issue of the Letters Patent by the Ciovernment, call a meeting of the provisional directors and proceed to allot stock, and otherwise push the organization of the company. (6) (let out by-laws, rules, etc., for the government of the management of the company (7) When sufficient stock is subscribed and the calls pa'd on it so that there is working capital enough to begin lousiness, the provisional directors should call a gcnerjl meeting of the stockholders, and have regular officers elected to carry on the work of the company. The com;)any is tlicn ready to carry on their regular business, which is sometimes called their undertaking. )n of 8 Shares — The capital stock of every company is divided in!o n number of equal portions called "shares," and every sluckhoklLT shall have one or more of these shares. A partner's capital in an ordinary partnership may be any sum. In a stock company each shareholder must hold an even amount, and no cents or fraction bhares. The amount of the shares into which the capital of many of the larger companies are divided is $100 each. The capital of smaller undertakings, and those of a local nature, is divided into smaller shares — $50, $25, $20, $ro, and even $1 shares. The shares in mining and development companies are usually $1 each. _ ■ • . vl y to Lion, 'ard- kares )uai- 9 Authorized Capital— This is the amount allowed by the charter of the company as the maximum limit of the stock that can betaken up. Au- thorized Capital, $5000, means that the stockholders may subscribe to the ex- tent of $5000. This maybe increased any time by obtaining a supplemen- tary charter. 10 Subscribsd Capital— This is the amount of the authorized capital that the stockholders have signed their names for — the amount of the stock taken. This might be all the Authorized Capital, or it might be a very small portion of it. , ill i8o JOINT STOCK COMTANIKS. 1 1 Paid up Capital — I'his is the actual working capital of the company, sometimes called "cash capital." This may be all the authorized capital if it is all sul)scribcd, or it may be all the subscribed capital, or it might l)e only I o per cent, of the subscribed capital. A company might have authorized capital $5000, subscribed capital $5000, (if all signed for), and paid up capit-il $5000, (if all paid up), or the authorized capital $5000, the subscribed capital $100, and the paid up or working capital $10. 12 Preference Stock -Is such as is issued to procure additional work- ing capital, and is given, (by agreement with the original stockholders,) a right to the first division of profits every year. Each subsequent issue of preference stock has a preference to profits over all previous issues ; a fourth preference stock would get dividends before a third ; a third before a second, etc., and all the preference stock before the original stock holders get any. 13 Guaranteed OP Debenture Stock— Is such that dividends at a cert;. in rate must be paid every year, even out of the stock of the previous stockholders who stand as guarantors, if there is no profit. 14 Calls — When the management of a company asks the stockholders to pay up a certain per cent, of their subscribed stock, it is denominated "making a call.'" Internal Management — The management of any company is very much the same as an ordinary society. Officers are chosen under powers given in the charter. The acts of the whole body corporate, as well as the acts of the managing ot'ticers, are in the form of resolutions, by-laws, etc., and are ref'orded in a minute book. The officers of a Company are called Direc- tors, and the Directors appoint officers among themselves, such as President, Vice-President, Secretary, Treasurer, Manager, etc. The b>-laws of the com- pany will specify the duties of each officer. The directors are usually elected by ballot. Each shareholder has one vote for each share he holds in his o>vn name. If he cannot attend the meeting he may a[)point another shareholder to vote for him by giving him a short form of Power of Attorney, usually called a Proxy. The following is about the usual form. Form of Pro.vi/: Know all men by these presents that I, deorge Rogers of the city of Toronto, gentleman, being the holder of ten shares in the capital stock of the Mono (^)iiarr)in:j; Company, limited, do hereby nominate, constitute and appoint I'red Arthur Pale, my attorney for me in my place and stead, to vole as my i JOINT STOCk COMPANIES. l8f very )\vers the and »irec- Ident, com- lected o>vii )lder ailed Ion to, llono Ipoint my Proxy at the election of the Directors, and on all other business that shall come before the annual ineeting of the said Company to be held at Orangevillo on the 2oth day of March, 1897, and at every adjournment of said meeting. Signed, Sealed and Delivered | in the presence of D. Vanuusen. J Geok(;e Rogers. (L. S.) 2 General Powers of Stockholders —The Stockholders have power to elect officers to act as the agents of the Company, and to make by-laws for their direction. They may also give general directions to officers what to do, and how to do it. All of these acts must, of course, be in accordance with the laws of the land, and consistent with the charter. Practically however, the shareholder expends his voting powers in accepting the annual f\nancial statement and in electing directors. 3 Corporations Act through their Oflicers-— When such officers are appointed, the power of the stockholders to do business is really exhausted. It IS placed in the hands of the Directors who are agents of the company and bind such company by their acts. If officers are guilty of fraud, misapplication of funds, etc., they are liable to the stockholders and amenable to the laws of the land. If they are guilty of negligence, they are liable to the shareholders. If they are incompetent or unworthy of confidence, others can be elected in their place, at the close of their term of office.' 4 Power to Contract — A corporation may contract as freely as any in- dividual so long as the contract is legal and within the povvers granted it by government in the charter. A gas company would not be justified in supplying electric light, nor a banking company in running a steamboat. The business is done by its officers, and the assoat is given to a contract by the signature of the chief officers, and the affixing of the corporate seal. 5 Limited Liability — In many com[janies the word "limited" appears as part of the corporate name. The Trust and Loan Company (limited,) the National Produce Company (limited). The presence of this word shows that the stockholders are only liable for the amount of stock that they subscribe for. That is, if John Smith subscribes for $1000 of stock, he is lial)le to the company and its creditors for the amount, until it is paid. If it is all paid up, he can not be called on to pay any more, even if the company is insolvent. The word 'Tmited'' should be spelled oat in full, not abbreviated. if' ii if if 'If 182 JOINT STOCK COMPANIES. 6 Double Liability —AH chartered banks in Canada have a clause in their ch;irtcr by which each siiarehjlder is held liable for all the stock he sub- scribes for, and in ca«e of insolvency as much more. If Mr. Smith subscribes for $500 of bank stock and i)ays it all up, he is still liable for $500 more in case the bank goes into li(juidation. CHAPTER 45 f Form of ArPLicATioN for Sharks. IssuK OK Stock. | ,, „ In.stai,mkn-|' Scrii-. [ << n Stock Ckrtificate. Stock Rook and Form of Stock ]>ook. SiCNATURK i;V AtTORNKV AND FORM OK POWER OF AiroRNEV. Transkkr ok.Siock AND FoRM OK Transkkr Ckrjikicate Dividends. Canxei.i.ation ok Stock. DlSSOI.lJIlON. I.lAlilLKIIt.S. • 1 JOINT STOCK COMPANIES. 1 Issue of Stock — When a i)erson desires to become a stockholder in a company, he usually makes application for a number of shares as follows:— AppUvatton for Shares: Toronto, Feb. 4, 1897. The Directors of the Homestead Loan c^v: Savings Company will please allot to me ten shares in the capital stock of the said company. AV. H. Cooper. At a meeting of the directors of the company this application would be con- sidered, and if Mr. Cooper is a desirable person to become a shareholder, the directors, by a by-law, will set apart ten shares for him. He will then pay in a sum of money on them, being such sum as is agreed upon, and an instalment s:rip will be issued to him similar to the following: — ' Instalment Scrip: xzx);xxzixzir:xxxxzzuxixzxzxizxzixzxziixzzxzzxixxxx:[zzzizzzxxxzzixz:txxzzzzzznzxiir:x::i:[xzzazx:cxzxz^ No. 75. $50. 'J'hc Homestead Loan iV Savings Company (Limited.) — Instalment Scrip. London, Feb. 4, 1897. Received from \V. H. Cooper the sum cf $50, being for first call y of ten [)er cent, on ten shares in the capital stock of this company, said b shares being Nos. 72 to 81 inclusive. g W Rov, President. [seal.] W. P. Telford, Manager. I axzzx!tzxxizzziixzzziz:czzzzzxzzzxzzzzz:czzzxzxzxTXZxxzx»iixizzzzzxzizzx:azz:gzzexzz.Txxzzzzzzzx zzx zzazxnj JOrNT STOCK COMPANIES. 18.? [11 Id When the stock is fully paid up, or when all is collected on it that the com- pany deems desirable, ii stock cerlilicate is issued. Form of Stock Certifivnte: xn:zxzzxzxuzxzziizzxxxixzxzzixxzixzzixzxixzxiizxz:[XXzxxixxzxxixzzxzxRxzx-/Z'.;x;:zzzxixixixxxxiixiiixr No. 45 $500. [ The Homestead I-oan (S: Savings Company (Limited.) — Stock Cer- [ tificate. I T|iis is to certify that W. H. Cooper of London is the holder of ten [ shares in the capital stock of this comjiany fully paid up, in the sum of $500., said shares being numbered 72 to 81 inclusive, and are transfer- able on the books of the company by him or his attorney duly consti- tuted. Dated at London this 4th day of Feb., 1898. W. Rov, President [skai,] W. T. Telkord, Mj/iager. txxxzi xxzzxxzxxxzxzxz:(zzzzzzzzzzzzzzzzzzzzzxzzzxxxxxx:;xxxxxxzzzzzzzzz>zizzzzzrzzzr.zzzzzxizzzzzzzzi:zzzxx1 2 The Stock Book— -The book first in importance in a stock company, is called the "Stock Book," or " Stock Subscription Book." It is the basis of the company's organization. It is the subscription list to which each per- son becoming a shareholder, signs his name, and binds himself to pay up his stock, and be bound by the rules and by-laws that may be made from time to time, for the government and management of the concern. From it the liabilities of the shareholder are determined in case of insolvency of the company. Form of Stock Book ; THE HOMESTE.'VD LOAN & SAVINCS COMPANY (Limited.) Incorporated under the Ontario Joint Stock Company's Letters Patent Act. Capital $500,000, Divided into 10,000 Shares of $50 each. We, the undersigned, do hereby severally subscribe for and agree to take the number of shares in the capital stock ol the Homestead Loan (!<: Savings Co. (limited,) set opposite our respective names and seals, as hereafter and hereunder written, each share being of the amount of $50; and we do cov- enant and agree each with tho other, to pay the amount so snl)scril)ed as the same may be called in by (he Directors of the Company: and we do further covenant and agree to abide l)y and observe the provisions of the Letters Pat- ent Act of .said incorporation, and the by-laws, rules and regulations of the said Comi)auy, made in pursuance of its charter and of the said Joint Stock Co iipany letters Patent Act. Sigr.ature. John A. McDonald Edward Blake.. Jean Gibson. Bessie Ferguson. S. Doiland. Geo. Davy. Seal.!__ X Feb Date. X X X X X 4, iSc)7. I Feb. 5, 1877. jFob 4, i«()7. I Feb. 4, kS()7. May I, iSf/j May 15,1887: R«>sidence. Ottawa. Torotito. VVroxeler. Meatord. Meaford. Whitby. No. of shares. Twenty. Twenty. Ten. Ten. Fifteen. Ten, Ann. $1000. $1000. $500. $Soo. $750- $500. Witness. C. Tupper. C Tupper. C Mej^iiire \V, ILKobb W. Clegg. H. Roper. m m ■ 'I 1^4 JOINT STOCK COMPANIES. 3 Signature by Attorney- -In case a sliarcholdcr cannot go to the place where the stock l)i)uk is, he can empower another to sign for him by gr.mting a I'owor of Altoriicy under seal to ilie person he wishes to sign for luMi. 'I'he signature would be made — Ol.lVEK I'WIST, per his attorney David Coi'i'iiKKiKi-D. * Form of Power of Attorney fo subscribe for Slock: Know all nun by these presents that I, Oliver Twist, of the City of (luelph County of Wellington and Province of Ontario, gentleman, do nominate, con- stitute and a|)[)oini David CopiJerfield, of the City of Ottawa, in the said Prov- ince of Ontario, broker, my true anil lawful attorney for me, in my name, and on my behalf, to subscribe for twenty shares of fifty dollars each in th<*capital stock of the Homestead Loan iV Savings Company (Limited), and to do all other acts necessary for the proper carr>ing out of the same, and I hereby ratify and confirm all the acts of my attorney hereby appointed in reference to the same. In witness whereof I have set my hand and seal this 5th day of March, 1897. NIC HOl.AS NlCKt.lTA. j OUVER 1 WIST. (L. S.) The signature of the witness to the power of attorney may be proved by an affidavit similar to the affidavit of the witness in a Deed, Mortgage or Agreement for Sale of Land. . ■fr 4 Transfer of Stock— Shares in the capital of a company are personal property, transferable from one to another at pleasure, subject, however, to the approval of the dir'Xtors of the company. The retiring stockholder must sur- render his stuck ceruficatc and sign a certificate or short form of Power of Attorney, either on the back of a stock certificate, or on an accompanying paper, authorizing the transfer at his shares. W. H. Cooper is the holder of the stock m the foregoing stock certificate on page 183 If he desired to sell it to Robert Watson, he would write out and sign a certificate like the one subjoined. It will be noticed that these transfers are always completed by sanction of the directors of the company, otherwise per- sons might get into the company who are not responsible, financially, for the payment of their stock, or who were re[)ugnant to the officers and stockholders of the company, and whose desire in getting sur-h shares might be to subvert or ruin the undertaking of the company or play into the hands of rival in- stitutions. Stock on which there are unpaid calls cannot be transferred. Transfers of fully paid up shares are almost always sanctioned by directors. St I- jOrNT STOCK COM PA NIKS. »«5 Form of Tranufcr Cvrtifivate: itxixjixiixxxxiiixnxxnixixxxiiixxxizxxiiixiiixtxiizrxizizxiiixzxxiiiixiinixiiiiiiixxixxiiiTttii cxxzxx i V Wv. it known that I, Wm. llonry (.\)o()cr, of the town of C)ranj;cvillc County of Diificrin, farmer, the lioldcr of ten slvres in tho capital stock of the Homestead Loan iV Savings (!oiii[)any, niiinl)ered 72 to Hi in elusive, represented hy the within certificate, di) hereby irrevocably nomi- nate, constitute and apjioint Henry liaker, of the t(jwn of Uarrie, my true and lawful attorney to transfer the said ten shares of stock to Robert Watson, of the city of Corbetton, hereby ratifying that all that my attor- ney shall do for the proper carrying out of the said transfer. Signed, sealed and witnessed this 3olh day of June, A. I). 1897. ^^''""'r w c I W. H.Cooi.KR(l„S.) JohnW. Smith./ ^ ' CoKiiin TON, June ^r, 1897. I, Robert Watson, of the city of Corbetton, do hereby accept tlie above : transfer of shares. John W. Smith. / ;xxxx2xixxxxxxnxxxxxxixxxxxxxxuxxxxxxxxxxxxxzxxxxxxzxTxxixzxzxxxzxxzixzxxxx:ixxxxxzi:zxxzzzzi.zxzi cxxxx:^ ul 5 Dividends — The profits of a company are divided among the stock- holders according to their interest in the capital stock — usually a certain per cent, on the paid up stock. All such dividends must be paid out of profits and not out of capital, nor in such a way as to impair the capital of the company. Any officer paying a dividend out of the capital, is personally responsible for the amount of such dividend, in case the company goes into liquidation. . • , 6 Cancellation of Stock —The cancellation of stock is the taking of it back from a stockholder by the company. (i) In case he will not pay up his calls, nor abide by and obey the rules, bylaws, etc., of the company. (2) The capital of the company has been impaired by losses, and the shareholders desire to put back the amount of such impairment into the com- pany, and sell it to new stockholders, and so leave the part they retained fully paid up and unimpaired. Example:— The Ontario bank cancelled one-third of its capital stock in 1896. A shareholder holding a number of shares surrendeied every third share. A shareholder holding one share had it re- duced to two thirds of a share. IMAGE EVALUATION TEST TARGET (MT-3) 4 P^ /^ 1.0 I.I ^ i^ 112.2 14 11111 2.0 IHil 1.25 II 1.4 1 1 /s II — 11111== ^ 6" ► V2 v5 / :^ ? O 7 Photogr^hic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 ^ iV <^ rv i^S^ v\ ^ «■ <<^. ^ ■^ '^ •% ^ ^^> . ^^A ^^^.% :/u ^ ^ \ s \ i86 JOINT STOCK COMPANIES. 7 Dissolution— A company may be dissolved in several ways: — (1) By expiration of Charter. Example : The Canadian Banks are incorporated for 20 years from May ist 1891 On May ist 1911 all the banks will be liquidated unless the charters are renewed. (2) By compfetiov of the tvorh: Example: Suppose a company is chartered to build 40 miles of the Crow's Nest Pass Railway. When that work is finished the company would be dissolved. (^) By forfeiture of charter. A company may forfeit its charter by failure to use it within two years of the lime it was granted, called "Non- user," and by exceeding the rights and privileges granted in the charter, called "Misuser." These cases are settled in court or by government. (4) By voluntary surrender of charter. A company may vol- untarily give up the charter granted them by the government. When this is accepted by the government it is dissolved. (6) By Act of Parliament. A parliament that granted powers may revoke these powers. This is sometimes the case with charters granted to public corporations, such as towns, cities, etc. (6) By General Act. When a stock company becomes insolvent, it goes into liquidation under the "Joint Stock Companies,' Winding Up Act." A receiver is appointed whose duty it shall be to settle up the affairs of the compaiij. He shall not, however, enter in*o new undertakings; only close- up old business. I 8 Liabilities of Companies — There is an old saymg that a corpora- tion has "no soul to be saved, no body to be kicked, nor any personality to be imprisoned." Hence the punishment inflicted on a corporation will not be of a criminal nature. It cannot be punished by confinement. It may be — (i) By imposition of a fine. (2) By assesment of damages. It is punishable by fine for misappropriation of proi)erty, etc., and for negligence, failure of performance, etc, by assessment of daniuges, just the same way as an ordinary person. The property of the corporation is liable for taxation just the same as that held by private parties. an Banks I [ all the »mpnny ts that work ts charter ed "Non- ter, called y may vol- hen this is ed powers rs granted insolvent, Up Act." airs of the nly close- a corpora - ionality to will not may be — and for p,, just the is liable CUARANTliK ANU SURt.i'/SHIP CHAPTER 46. »87 GUARANTEE AND SURETYSHIP. Definition. Statutk ok Frauds. Thk Partiks. Discrimination ok (Guarantee The Consideration. The Extent ok the Contract. CiUARANTKE OK PaY.MENT. ; ClUARANTEE OK CoM.ECTION. Guarantee ok Kidei.itv with Form ok Bond. A Continuinc; Guarantee. Guarantor's Richts. Creditor's Richts. Rights Between Sureties. Di.schar<;e ok Surety. 1 Definition— Guaranty or Suretyship is a promise to a person to answer for the payment of a debt or the performance of a duty by another person in case he should fail to perform his duty, or it is a contract whereby on e person agrees to answer for the debt, default, or miscarriage (failure of full perform- ance) of another. Under the term "debts," we include all ordinary debts on note or book account, due bill, etc., in the ordinary course of trade or business Under the term "default," we include all forms 0"" bo ids whereby one per- son, a number of persons, or a Company agrees in a bond to make good any loss through the dishonesty of an employee. A bond of this kind guarantee- ing the honesty of a clerk, book-keeper or other employee, is usually cal'ed a " fidelity bond." Under the term " miscarriage," we include all such contracts where one person agrees and binds himself in a certain sum to assure another person that a third person will complete a work by a certain date or in a certain manner. The failure to complete a contract in the time or in the manner agreed upon is termed " miscarriage." 2 Statute of Frauds- it will be noticed that one of the sections in the Statute of Frauds, (page 29), imposes a restriction on contracts of guarantee, that is, that they must be in writing, signed by the party chargeable therewith, hence a contract of guarantee made orally is legally no use. (See R. S. O. Cap. 123, as to written promises). 1 88 r.UARANTEE AND SURETYSKFP. V IP w 3 The Parties- It will be noticed that there are at least three parties concerned in a contract of guarantee, (i) The Debtor, sometimes called the principal debtor. (2) The Creditor, (3) The Guarantor, sometimes known as the surety. The principal contract is made between the debtor and creditor, and an additional contract between the guarantor and the creditor. 4 Discrimination of Guarantee — For example, suppose Smith goes with Wilson into Brown's store and says to Brown : " (iive Mr. Wilson all the goods he wants up to sixty dollars. I will guarantee him all right. If he does not pay them I will." This would be legally void because spoken. If written and signed by Smith he would be retjuired to pay the g)ois in case .Wilson failed to pay them. Another example very similar requires a nice discrimination. If Mr. Smith had said "Give Mr. Wilson what goods he desires, not exceeding sixty dollars and charge them to my account. If he does not pay them I will." The au- thority to charge them to Smith's account chinges him from surety to princi- pal debtor. It would not be necessary to have the last example in writing, as Smith would not be answering for another's debt but for his own debt, charged to him by his own authority. The goods were sold to Smith but delivered to AVilson. 5 The Consideration — Guarantee is a contract, and, like all other con- tracts, requires a consideration to support it, and such consideration should be expressed. (i) When the guarantee is a collateral contract, the consideration in the principal contract is the consideration for the collateral contract of guarantee, and it should be so stated. (2) The consideration for the contract of guarantee is often a nominal sum of money, such as one dollar. (3) Contracts of guarantee are often made with consideration acknowl- edged by some such words as "value received." 6 Extent of Contract — The terms of a contract determines the liabi- lities of the parties. The sum named in the contract is the greatest sum the guarantor is liable for. If the amount of the debt, default or miscarriage of the person guaranteed is less than the specified amount, the liability would be limited by the extent of the dcljt. For example — A has his house insured for $1000 ; the insurance is one form of guarantee. If teh house were worth $3000, no more than $1000 could be claimed if it ill GUARANTEE AND SURETYSHIP. 1^9 were conip'etely de.stro}'ed. If, huwever, it were only damaged to the extent of $200, no more than $200 could be collected from the Company. 7 Guarantee of Payment— The contract of the indorser of negotiable paper has been fully discused under " Negotiable Paper." The guarantee of an indorser is (or a limited time. The following are common forms of guar- antee on negotiable paper placed on them to avoid the necessity of protesting Form I. Nominal Consideration — In consideration of One Dollar I hereby guarantee payment of the n'ithin note and waive protest and Notice of Protest. J. VV. Smithson. Form 2, Acknowledged Consideration — For value received I hereby guarantee payment of the within note and waive protest. J. W. Smiihson. It is proper to mention that notes, etc., are frequently guaranteed without the consideration being mentioned, a proceeding that is, to say the least, slip- shod and unsatisfactory. icknowl- lie lial)i- Isuin the rriage of lould be larantee. led if it 8 Guarantee of Collection differs very Uttle in form from a guarantee of payment, but it is widely different in its effiect. Form — For value received I hereby guarantee the collection of the within note. J. W. Smithson. (i) When the form of guarantee of payment is I'sed the grantor is liable as soon as there is a default of payment ; that is, if the obligation is not paid when due. (2) In the guarantee of collection the grantor is not liable until a process of law has been had, and the attempt has failed. The inability to collect must De proved, 9 Guarantee of Fidelity, sometimess called " Guarantee Insurance," is a very common form of guarantee. One or more persons, or a Company guarantees the honesty and fidelity of a clerk, bookkeeper or other employee. The following is an example: — Form of Fidelity Bond : — Know all men hv these Presents, that we,' Robert A. Kells, of the Town of Listowel, in the County of Perth, Province of Ontario, book-keeper ; James Grieves of the Township of Elma, in the said county, farmer, and. 1 90 r.UARANTEE AND SURETYSHIP. George Fallis of the Township of Wallace, in the said Connty of Perth, farmer, t-^^' Arc held and firmly bound to the Homestead Loan & Savings Company, (Limited), hereinafter called the Company, in the sum of Two Thousand Dol- lars to paid to the said Homestead Loan & Savings Company (Limited), and their a:^signs, 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 heirs, executors and ad- ministrators, and the heirs, executors and administrators of every two of us jointly, and severally, by these presents, sealed with our respective seals. Dated this niruh day of May, A. D. one thousand eight hundred and ninety eight. \\'hereas the said Company have agreed to take the said Robert A. Kells into their service as clerk, or to act in any such other capacity for the Com- pany as John (1. Hay, of the said Town of Listowel, Manager of the said Company, or Board of Directors of the said Company may frotn time to time recjuire or appoint, or as may be from time to time agreed upon with the said Robert A. Kells upon the said Robert A. Kells and the said James Cirieve and (leorge Fallis as sureties for him entering into the above written Bond of Obligation for the fidelity of the said Robert A. Kells while in such employment as aforesaid : And whereas it is intended and agreed that this security shall be in force during the whole of the time during which the said Rol)ert A, Kells shall be in the service or employed by the said Company in such capacity or in any other capacity. Now the condition of the above written Bond or Obligation is such that if the said Robert A. Kells shall, at all times hereafter so long as he shall be in the service of or employment of the said Company, as clerk or in any other capacity, faithfully, honestly and diligently perform and discharge the said service and all the duties which may devolve upon him the said Robert A, Kells as such clerk or otherwise as aforesaid, and shall, whenever required, duly account to the said John G. Hay or other person 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 Robert A. Kells may be in anywise accountable or chargeable to or by him or them as such clerk or otherwise as aforesaid, and shall, whenever re- (juircd, duly pay or deliver ail such moneys, goods and property to him or tliem, or in case the said Rol)ert A. Kells, James Grieves or George Fallis or any of them, their or any of them, their or any of their heirs, executors or ad- ministrators shall, when rctiuired, make satisfaction to the said John G. Hay or such 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 Robert A. Kells or shall not be duly accounted for or paid or deliv- ered as aforesaid, and shall keep the said John G. Hay, or such other per- son or persons aforesaid, and the said Company, indemnified against all losses, damages and expenses whatsoever by reason or in consequence of any such act or default of the said Robert A. Kells : And so that any forgiveness or forbearance on the part of the said John G. Hay, or the person or persons aforesaid or the said Company to. wards the said Robert A. Kells in respect of his failure or neglect to per. C.VAkAKTEk AND SURET\SklP. igt form such services or duties or make such payments as aforesaid shall not in any way release or exonerate the said James Grieves or George Falhs, either of them, their or either of their respective heirs, executors or ad- ministrators, in respect of their or his iiabihty under the above written Bond, and so also that the said James Grieves or George Fallis or their respective heirs, executors or administrators shall not separately or indi- vidually l)e liable to pay more than One Thousand Dollars each by virtue 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. Signed, Sealed and Delivered 1 Robert A. Kells, (L. S.) In the presence of I Jas. Grieves, (L. S.) RoiiERT McMillan. I Geo. Fallis. (L. S.) 10 A Continuing' Guarantee is not an uncommon form of contract. The grantor becomes security for several successive acts. Form — In consideration of One Dollar I hereby guarantee the pay- ment of all goods purchased during the year 1897 by A. .G McKay, of Sydenham, from Alfred Frost, of Meaford, said pur- chases not to exceed in the aggregate seven thousand five hun- dred dollars. Jan. I, 1897. ^' J- Creighton. This guarantee might be exhausted by one purchase of the entire amount or by numerous purchases, or might only be partially exhausted during the year of its currency. IS or or ad- Hay said oneys, of by deliv- per- osses, such said ly to. per. 1 1 Guarantor's Rig^htS — The Guarantor, or Surety, has rights against both the debtor and the creditor. From the cre:'.itor he has a right — (i) To receive notice of default within reasonable time after it is known to the debtor. (2) To receive from the creditor all his rights against the debtor when he has made good the default, so that he (the guarantor) can go on and recover. (3) To receive from the creditor all property pledged to the creditor by the debtor for the payment of such debt, and any other property of the debtor that the creditor has. From the debtor he has a right to recover, if he can, the entire amount of the default made good by him together with all costs and expenses connected therewith that he has paid, in a word, to be placed in the Creditor's position as to the Debtor. 12 Creditor's Rights — The creditor has no rights against the surety until default has been made by the debtor, and even then he may not have iga' r.lfARANTKF, AND SURF.TVSrflP. suc!i rights until some condition has been fiilfillcfl. Usually he has a claim against l)oih iht-, principal (U'l)tor and the surely after default, until the surety has paid him, then his rights shall pass to tiie surety. 13 Rights between Sureties -Very often there are two or more per- sons tint are cosureties lor the one debt. For example — the Fidelity Bond o 1 page iSg is such a ca-e. In case of default they would all contribute their proportions of the amount of the default and would be entitled to a similar pro|)oriion of the effects of the defaulter, and in case ont' of them paid all, he could recover from his co-sureties their proportion of the loss. There are many caves where there are two or more sureties for the same debt, and they are not co-sureties. If Z, being the last name, were to add to his signature, " surety for above persons," he would only be liable in case of failure on the part of all that guaranteed before him. As an example of this we might < ite that of indorsers. If the amount of a note were recovered from the last indorser he could collect the entire am )unt he paid from any one that indorsed l)efo'-e him. He guaranteed on the strength of their guarantee. If however, the amount of the default were collected from the first indorser, he would not have any rights against those that indorsed after him, as when he indorsed, he did so atisolutely and not on the strength of those who would follow him. The following is a classification of suretyship. [ {a) Independent of each other. -[ {/') Joint and several (<•) Jointly. (i) Collateral (2) Consecutive, that is, one after another, the second being only liable after the first is exhausted. 14 Discharge of Surety — The sureties may be discharged from liabil- ity in various ways. (i) Ihj E-ipirntion of Time. If a guarantee is given for a definite time -for example, the year i.Sq;, in the "Continuing duarantee," page 191, the surety is released at the end of the year from liability for purchases made afterwards but not from the guarantee of any of the purchases made within the period. . . (2) Ihj Notice by the Guarantor. The surety may terminate a con- tract of guarantee by giving notice to the creditor that he will not be surety after a certain date. He is not released from liability for default before that dale, but he is from any that may occur after that date. INSURAVCK. f9i lefinite F 191. made Iwithin lacon- Isurety Ve that ^^ (3) By chnnqo of Agrvemsnt. When an a^^roement has hoen al- tered so as to clianj^e the liability, the surely is relicvcii. Siipj) )se that Smiih guarantees the fidelity of Adam Weir, an employee of |. II. l-iltle, as sales nnii —if Mr. Little makes Mr. Wier his cashier, Mr. Smith would l)e relieved fro 11 liability in case of default beciusc the contract has been changed and the liability increased. (4) E.rtennion of time hy the Cirdilnrs. If a creditor agrees to give a debtor an extension of time for the p.iyment of a guaranteed debt, he releases the guarantor unless the said extension is given with his consent. If X indorses Y's note payable to '/., and Z gives V a month's extension of time after the note matures without consent of .\, then X would be free. (5) Fraud upon the surety in contracts of guarantee will make this class of contract voidable, just as any other contract tainted with fraud, is voidable CHAPTER 47. Dekinition. TlIK Al'I'MC.VTION. Thk Policy. > Thk I'kemium. ] ■ Thk Ratk. Vakiktiks ok Insimnn of Prorisionttl lifccipt. No. 24,570 NORWICH INION l-'IKI'. LNSlkANCI'. SOCII'-TV. f Isad niTic;!!* : N..rwii li .iii'l i.'iniloti, l'.nk;liiri. Uoljh tlie sum of Three Dollars, ()eing a deposit for an Insurance a:;.iinst I'ire for $^00,00, sii!)ject to tiie Society's |)rinted ("oti- dilions, on Household furniture, in house on lot 7, Patterson street, for which (if a|)proved of, on further particulars heini? received), a I'olicy will be issued in terms of A^sured's I'loposal of March ii), |S()7. This protection not to esti'm! beyoiul Thirty Days from the date herecjf, and previous to the issue of a I'olicy maybe cancelled by notice from the .Agent, and a pro[)or- tionite part of the premium (if any is due), returned to the Assured. Tremium (" I -$,?.oo. R. ( ■|iuisrii;, Agent, fiili-^s spi'ii.illy ;illi)woil l»y llu" l")IVu-i' ii) wrilini,'- iuM\'iin, llu! iim! is strieily pro- tiiMifil, ()t .'iiiv Sii'.im l'",iiijiiu' Mill-wiirk, ;\pp.ir;itiis lor pnnlueiii^ licit, as also t lie sior.ij.jf i>r .my I l.i/.iriliuis liiHuls ; ;i!ul iliir I'rupDscr must ileiiaru if there are any I l.i/ariloiis Risks in or lui llio ailjoiiiiiij;^ premises. 3 The Policy is the written obligation of the company agreeing to pay the insured peison a sum of money in case of loss of the insured property. Policies m.iy lie divided into three kinds : — (1) (Ui)snl, or Wiliii'd I*()licy, where a certain definite property is insured for a lived sum. (2) Flixtlin;/ Policy, one that covers goods being manufiictured, as they are moved about from one part of a factory to another. (3) An ()}>i',n Policy, is such as would be put on a warehouse when goods are constantly being received and given out. All goods coming in are entered in the policy at the time they come in and a slight premium paid on all goods entered. • . . ... ... INSlIRANri-. IIKK. t«)7 ('U)stfd pdlii'ics may l)c stih tliviclod afrordinj^ In llir rontracl info — (i) Sin'cijic Pttlicit's, wlurc |Kirli.rui:i», $300.00. NORWICH L'.NION MRi: INSUK.XNCK .SOCIICTY. Hon, ("i. \V. .\i,i,.\n, T (!. I*\i ikson, Ksi.i , President. Nice President. Al.K\ANhi;iN I^lxoN, CieiU' .' AgiiU. In CoNsiKKU.vrioN of tlie sum of rhne Dollai 1, and of the representations, conditions and warranties hcreinalu-r inention'.d or re(err(. I , (hereinafter called the "assured ) aj^ain it ' .;. or (lanianf hy I ire to 'he projierty heieinafter descril .d (but subject I" (h. coiuli'ions and ,lii)ulations contained in ihis Policy) to the amount of 'rhvie Hundred hollars, namely: On Household l''urniture, $30000, all owned by 'he Assured, and coriaiiud in house on lot No. 7, i'atierson street, Pnry .Sound, Out. And it is hereby agreed and declared between the said Norwich L'nion I'ire Irtsuranci, Society, (hereinaftei called the ".Society" or the " ('oin|)anv ") and the .Assured, ,'sub- ject, nevertheless, to all the saiil conditions ami stipuhiiiotis) that i( the prop erty ai)ove described, or any part tluri-oi, shall be destroyed or vlain.aned by fire at any time between twelve oclock at noon of the nineteenth day of .March, 1S97, and twelve o'clock at noon of the nincttenth day of .Marc li. 1000, the Ca|)ital Stock, I'unds and Property of the said .Society shall, accfirding to the Laws, Regulations ami Provisions of the .Society alone, be liable to pay or make good unto the Assured, his executors, lulinuiislralois or assij^ns, .ill such immediate loss or damage, to an amount not e.\ieeding in respect of each of tile several matters above specified the sum set opposiie thereto, or the inter est of the .Assured therein, and not e.xceeding in the wliolt? the sum oi Three Hundred Dollars, subject to the conditions and slipul.iiioiH of Assurance printed on the back of tlvs Policy. In witne.ss wherecf, I, the undersigned (leneral .Agent, being duly autlujr- ized l)y the Directors of the saitl .Society, have hereunto set my hand this Thirty-firal day of March, i-Sijy. Ai.KNANin K Dixo.N, (Jeneral .\gent. Countersigned, T. C. P.miison. This Policy will not be valid unless countersigned by one of the Society's Local Board of Management for Canada. N. B.- I'or all future paymenis upon this I'olicy, printed receipts, bearing the Embossed Stamp of the Society, will be given. l''S ? 'A: 1 li 198 INSURANCE— riRE. 4 Statutory «Tid Other Conditions— in the foregoing form of ivlicy the contract only is given. There are always a number of conditions in the policy made necessary by law at the place where the Imsiness is done. There are also various stipulations and conditions ihat the Company make and print in red as part of their policy. It is not necessary to insert any of these here as they vary considerably in different places and in different companies. 5 Extra Risks — Buildings are frequently insured during their construc- tion. For a payment of a small extra premium the company will take the ex- tra risk caused by the mechanics, carpenters, etc., that are working on them. These are variously termed "Mechanic's Risks," "Carpenter's Risks," etc. 6 Chang^es on Building's— If insured buildings are tf) be changed, re- fitted, remodelled, etc., and mechanics are to be put at work on it. (i) (live the Insurance Company notice before you begin, or your policy will be void. (2) Pay a small extra sum and secure a mechanic's risk on it. 7 Cancellation of Policies — if a person disposes of the property in- sured, or for any other reason desires to discontinue his policy, he may have the company cancel the policy and return part of the |)remium to him. The part of the money refunded is called the unearned premium, be- cause the company has not earned it all by carrying the risk to the end of the term of contract. I'he amount retained by the company is called the earned premium. On a policy cancelled at the re(]uest of the insured, the company would charge the short term rate and refund the balance. If, however, the Insurance Company wished to cancel the policy, the Company would refund a proportionate part of the premium. If the insurance had run half of its time, half the premium would be returned. 8 Two or More Insurances on the same property without consent of all the companies concernfid, is literally no insurance, as not one cent of in. surance would be paid in case of loss. If consent of all parties is obtained, the same property might be insured in a dozen different companies so long as the total sum of all the insurances together did not exceed the insurable value of the property. The insurable value of property is usually about two-thirds of the cash value. , . 9 Re-insurance "Every company sets a limit as to the amount of risk it will carryjon any one property. Suppose a company sets such a limit at $5,000, and they are offered a risk on a building of $12,000. They would msURANCK FIRK. 199 take the risk and immediately re-insure at least $7,000 witii other companies' so that the loss from any one particular fire would not be so large as to cripple a company either for the time being or permanently. end of ed the red, the If, ompany ;e had 10 Assigrnment of Policy —A jK.licy mny ho assigned from one person to another by writing across it such clause as the following : — " For value receive 1, I hereby assign, transfer and set over unto John Smith all ii.y right, title, and interest in the within policy. Witness, . . (Signed) Henry Brown, [V.. S.] i\r. K McNm?. I John Smith do hereby accept the transfer to me of the within policy. Witness, John Smith, [L. S.] M. E. McNai!. The policy is then forwarded to the head office of the Company, together with a fee and the conseiit of the Company obtained and the names changed in the books. Such assignment of policy is made — ■ (i) To the purchaser when the property is sold, (2) To the mortgagor when property is iriortgagjd. 11 Renewal -Insurance Companies frc(iuently continue a policy from year to year by simply giving a renewal receipt for the yearly premium each year when it is paid. This continues the original contract between the com- pany and the insured with all its conditions for another year or term. If the premises are changed to any great extent, or the buildings or businesses near it are changed so as to increase the risk, a new policy would have to be issued. The following is a form of Renewal Receipt : — No. 11,824. NORWICH UNION I'lRE INSURANCE SOCIETY. Head Offices : Norwich and London, Knnland. > . Cliief OfTice for Canada : Tcronio. Parry Sound Agency, March 19, 1900 Policy No. 1,491,007. Received of William 15. Robb, Esc]., the sum of Three Dollars, for the Renewal Premium on this Policy, from March 19, 1900, to March 19, 1903. Amount Insured, $300.00. R. Christie, Premium, 300. Agent. When any alteration tatces place in the property insured, or in llie tiuiicling-s in which .-(ny insured property is contained, or if the nature of the rislc he in oilier ro- specte chang-ed ; if t'le property insured has been reinovetl t<» other premises, or the interest of the Policy has been transferred ; the same niiisl be ni.-iile known to the Of- fice and allowed by intlorseinent on the Policy, and an uilditiunal premium, if required, be paid ; otherwise the Policy will be void. ' 200 INSURANCE — KIRR. 12 Transfer from One Place to Another— If chattel property is moved from one building to another, the consent of the company must l)e ol)- tained and the property will be held insured in its new place. If the new place is moie dangerous than the old place, an additional premium may have to be paid besides a fee for the transfer. 13 Misrepresentation — If the insured party makes any misreprescn rations regarding the property, either in regard to the character of the property 01 uie risk to which it is exposed, the policy will be voidable, as it is tainted with fraud. 14 Negfligrence on the part of the person insuring property, or on the part of his servants, is just what he desires to provide against; hence, the company is called on to pay, even if there has been carlessness. If the in- sured wilfully sets fire to his own building he gets no insurance, and is pun- ishable for arson besides. If insured property is on fire, or in imminent dan- ger from fire, the owner must do his best to save it, or his policy would be void. 15 Adjustment of Losses— Generally the full amount of the loss is paid on the insured property so long as that amount does not exceed the amount of the insurance. Some [)olicies contain an ^^ average clause" and under such, only such proportion of the loss is paid as the insurance bears to the value of the property. For example — A insures his house worth $1500 for $1000. If the policy contained an " average clause " and the property were damaged $600, only two-thirds of loss would be paid as in this "'average clause " i)olicy the company is supposed to carry two thirds of the risk and the owner one-third : hence he would only get $400 for his $600 loss. The profits on goods are not insured unless specially provided for, nor is the loss or inconvenience resulting from the interruption of business by the fire made uf) by the Insurance Company. The loss of property only is dealt witli. In case of loss by fire, notice should be given the company immediately, and the company will send an Adjuster, or Agent to inspect the loss. The v.ilue of the articles destroyed must be verified on oath, and false or fraudu- lent statements nullify the claim against the company. The company always reserves the right to pay the money for the loss, or have the article or build- ing repaired, us they choose. Ml MARINE INSURANCE. 201 operly is si he oh- the new nay have ireprcscn properly is lainted or on the ;nce, ihe If the in- id is pun- lent dan- i be void. he loss is xceed the 'use," and ; bears to ;ained an •thirds of ;upposcd luld only r, nor is ss l)y the is dealt [ediately, ss. The fraudu- |y always lor build- CHAPTER 49. MARINE INSURANCE. I'nKKINITION. Thk Time. Thk Risk. PoMciKs AND Premium. 'I'he Amount. Insurance in Sicverai, Companies. AsSir.NMENT OK INSURED PROPERTY. .\li.\NI)ONMKNT. >^LosT OK Nor Lost. 1 Definition —Marine Insurance is a contract made between the In. surance Company and the owner of a vessel oj cargo of merchandise, whereby the company agrees to indemnify the owner for the whole or a certain por- tion of any loss or damage at sea to vessel or cargo. 2 Th9 Tim3, for which such insurance is nude, varies very much: — (i) It might be for a year, or a month, or six months, or any speci- fied time. This is the way in which vessels are usually insured. (2) For f) certain number of voyages between certain places. This class of policy is frequently taken out by owners of vessels on the lakes, as the season of navigation only lasts a few months of the year. (3) For ore particular voyage. Vessels are sometimes insured in this way, and cargoes are almost always insured in this way from the time they are taken aboard until they are safely delivered on the dock at their destin- ation. 3 The Risks— In Marine Insurance the property is not only insured against loss by fire,but against losses from the extraordinary perils of the sea voyage. This does not include natural decay, breakage or leakage of liquids, as they are ordinary losses. The risks assumed are against: — (1) Loss or damage by fire, or the water used in putting out the fire, or the smoke, etc. from the fire. (2) The Sea. Damage from water, etc., caused by rough or stormy passages. (<"}) Piracy. There is very little risk from piracy now. There are some pirates (sea robbers) in existence, but the danger is slight. (4) Theft. This includes theft by persons belonging to the ship, such as passengers, sailors, or by others. (•5) Capture, arrest, and detention. This refers particularly to the taking of a vessel or cargo by the men of war of a nation at war with the nation the insured belongs to. m I f ' 202 MARINE INSURANCE. (0) Barratry. — That is loss occasioned by any fraud or wrongful acts of captain or sailors, such as sailing out of port without papers or without pay- ing dues, engaging in smuggling, deserting or sinking the ship, etc. (T) General a rem ge. If a vessel and cargo are in danger, and g Kids or [)arts of the ship are thnnvn overboard or sacrificed to save other p.irts for the general good, then all the owners of the ca-go and ship share the loss (SJ Sairaf;e is compensation made to those by whose exertions a ship or cargo has lieen saved from impending peril, or recovered after loss. 4 Policies and Ppemium — The policies in Marine Insurance are either open or closed. The closed policy is sometimes called a valued policy, be- cause the amount of the policy is determined at the time of issue. The open policy is such as is taken out for a season for goods being shipped. The in- sured notifies the company of all shipments; they are entered on the policy or in the Company's books, and a premium is collected or all goods so in- sured. Such premium may be paid in cash or notes. The premium is said to be "earned" when the goods are safely deposited on the dock or in the warehouse at the end of the voy.age. If the shipper decides not to ship his goods after an insurance has been effected, he may get his insurance cancelled if the voyage has not been begun. In such a case the premium is said to be "unearned," and is returned to the one who paid it. 5 The Amount — All Marine Insurance policies contain an average clause which provides for the payment, in case of loss, only in the proportion that the insurance bears to the value of the property. Thus if goods worth $8oo were insured for $500, the co:npany would only pay five-eighth of the loss, it being held thit the insured carried three eighth of the risk himself. If the loss were $200, then the company would only pay five-eighths of $200 — or $125. It will be noticed that if the msurer wishes to get full value for the slightest or greatest loss that may occur, he must insure the goods for full value. He may also insure the estimated profits that may arise from the goods. 6 Insurance in Several Companies— (loods may be insured in sev- eral companies in either of two ways: — (i) Consecutively or Successively. That is one to come after the other The second company pays only the loss that remains after the first has paid to the full extent of its policy. (2) ConcuiTently. That is the companies all take the risk propor- tionately to their policies. If A insures property worth .1i6oo in Company M, lor $300, and in Company N, for $200, it is evident that the owner the A, carries ^ful acts )ut pay- ;er, and ve other : the loss irtions a lObS. ire either licy, be- ^he open The in- je policy ds so in- m is said or in the ) ship his cancelled laid to be ige clause tion that |rth $830 loss, it If the 200 — or |e for the "ull value, lods. Id in scv- after the first has |k propor- ipany M, carries MARINF, INSURANCE ioi one sixth of the risk himself; that Company M, carries half the risk, and Com- pany N carries one-third of the risk. If a loss of $240 happened, N would pay $80, and M $120, leaving $40 of a loss to the owner. 7 Assigfnment of Insured Property— Goods are sometimes sold dur- ing the voyage, and transferred by indorsing the bill of lading. If the policy is payable specifically to the first owner, he could have the policy transferred to the purchaser. Many such policies are drawn payable "to whom it may concern," and may be transferred by delivery. 8 Abandonment— Property may be entirely lost, or only partially lost or damaged. If the loss is less than half the value, the company pays the proportionate part of the insurance. If the loss is more than half the value, the insured may, if he wishes, abandon the property entinly— that is, turn it over to the insurance company and collect the full amount of the policy. The company in such a case, may sell the remaining property tor what it will bring. The insured need not abandon the property unless he wishes. He may keep the property and obtain payment for a proportionate part of the loss under the ordinary average clause. 9 Lost or Not Lost — This phrase occurs in policies where the insurance is effected when the ship is at sea, and it is not known whether the ship is safe or not. Tho'i^h the ship were lost days or weeks before, if unknown to the parties, the insLs.ancc is valid and binding. CHAPTER 50. LIFE INSURANCE. Definition. ' iNsuR.Mii.E Interest. The Beneficiakv. Frai'I) and Concealment. CoNurrioNS of Policy. The 1ni>emnitv. " Accident Insurance. • . , Notice of Death or Accident. Claims for Inde.mnitv. 1 Definition — Life insurance is a contract between two parties — the insurer (usually a company) and the insured. The contract, in consideration of the payment of an annual premium, provides for the payment of a certain sum at the death of the insured, or when he arrives at a certain age The person to whom a policy is payable is called a beneficiary. The companies that undertake life insurance are divided into two kinds: 204 INSURANCE— LIFE. (i) Mutual, where all the members contribute to the funds of the compu.;y, either by assessments on the death of members or a fixed sum monthly oi yearly, sufficient to pay death rates and expenses of management. (2) The Stuck Coinpany system, where companies go into the busi- ness of life insurance for the purpose of making profits for their shareholders. With regard to the time of payment, life insurance is divisible as follows : (i) St might Life, or whole life, where the payment is to be made at the death of the insured. (2) Endowment, where the payment is to be made in a certain number of years —or at death, should it happen before the close of the endowment period. VVith regard to the way in which the premium is paid, it is divided in manner following, viz: (1) Level Premium, where the insured pays the same amount of premium every year. (2) Natural Prem.iu7n, where the insured pays a premium that is in. creased every year as he grows older; the risk of his demise, naturally being greater. (3) The Assessment Sy stein, where each member contributes, say $1.00, on the death of a member, and so the claim is paid; or where regular monthly assessments are made, and the death claims and expenses are paid and the balances invested to meet future losses. The level premiums are also payable in a variety of ways, to suit different circumstances. (1) Annual Premium, where a sum is paid every year during life. (2) Premium for a term of Fears, where the insured pays a certain sum each year for a fixed number of years and then pays no more, For example, a ten payment life policy is one where one payment is made each year for ten years and the policy is paid up. (3) Single Premium. Where one large premium is paid down at the time of insurance and no other premium is ever asked for, the policy is paid up in one premium. ^ 2 Insurable Interest— (0 The owner of an article is always a compe- tent party to insure it: therefore, a person may always insure his own life, and, unlike fire or marine insuranqe, he may insure in as many companies as ne pleases without consent of the others, and for just as large a sum as he likes to pay a premium op. (2) Any person who has a financial interest in the life of another may insure that person's life. Of these we might mention the following: •y._, i of the ed sum genient. he busi- :holders. lollows : made at number lowment divided mount of :hat is in. lUy being )Utes, say re regular are paid different ng life, a certain ire, For is made down at policy is la compe- Ihis own )mpanies im as he llher may INSURANCE -I.IKK 205 (a) A creditor may insure the life of a debtor, because his death might le: ive the claim unpaid. (h) A person may nsure his pirtnerS i life. (c) A husband ma V insure a wife's life, or a wife a husi )and's life: a father a son's or diughter's life, or a child a parent's life, because the removal of such a relative by death might be a very serious pecuniary loss. (d) A young woman engaged to be married has an insurable interest in the life of the man who is to be her husl)and, and 7'/ce versa. The conditions of good health existing at the time of the insurance need not continue, it being sufficient that these conditions ex'sted when the con- tract was made. In the case of a marine or afire insurance, a change in the conditions would prevent a continuance of the insurance. 3 The Beneficiary is the person to whom a policy is payable — he may be either the insured persiti or any other person. (i) When a person insures his life in his own favor he may give his policies as collateral security for money he may borrow by assigning them to his creditor. (2) Where the policies are payable to the insured he can dispose of his insurance by will the same as any other property. (3) When a person insures in his owt\ favor, the policies may be taken by creditors in case of insolvency, the same as other assets. (4) If a person insures in favor of another person, say a wife, or child, the policy belongs to such wife or child and cannot be touched by creditors in case of insolvency, 4 Fraud and Concealment— The application of the person to the company should be true in fact, and should state all the facts. Fraud in making such representations as are not true, or failure to furniih information that the company should know, will taint the contract with fraud aud render it voidable. In many policies now issued, there is a clause to the effect that no mis- statement or concealment of fact will be operative against the insured alter the policy has run over three years. In other words, the policy is said to be incontestable after three years, except as to age being incorrectly given . 5 Conditions of Policy— Premiums are usually hascd on the risk carried, and persons in a hazardous occupation are charged a higher rate and, under many policies, a journey on the sea or into the Southern .States would vitiate a policy for the time being. Persons who commit suicide vitiate their policy, as they kill themselves willingly. If, however, the suicide of m ^■f i: f ; L ; !i! ao6 INSURANCK -LIFE. the insured is the result of temporary or permanent insanity the suicide is not criminal, and, therefore, does not vitiate the pohcy. 6 The I'demnity is the sum paid to the insured, or his heirs, (i) A fixed sum at his death, or at a certain period during Ufe, or (2) A weeVly, monthly or yearly idemnity or pension. 7 Accident Insurance insures a person against injury by accident of any kind. It docs not insure against sickness, hut provides for (1) the payment of a fixed sum if the insured is killed by accident, or (2) the payment of a certain sum weekly during illness that is the result of accident. In case of death afterwards resulting from such accident, any sums tint have been paid weekly will be deducted from the total amount of the insurance. In some companies an accident policy provides for the payment of a fi.xed sum if the accident disables the insured, or if he lose a limb. . 8 Notice of Deatll Oi' Accident should be given as soon af'er such event happens as possible. It must be within reasonable time — the usage at the place and the special circumstances of the case will decide what is reasonable time. 9 Claims for Idemnity — If the insured under a policy die, it is neces- sary to give such proof to the insurance company as will show them: (i) That deceised was the person insured under a certain policy; (2) When he died, and from what disease. CHAPTER 51. r . ''Definiiion. Contract ok the Emim.ovek. Contract oe the Employee. Care. Skill. • Diligence and Forethought. Lien oI' Servant. Loss ok Articles iseing Built or Repaired. Time OF Employment. Discharge. ^ J.EAVING. * * 1 Definition — if one person agrees to do work for another for a consid- eration or recompense, we find, in that contract for services to be rendered, the relation of Master and Servant. The Mister is the employer, the Servant the employee. Contracts for personal services are of two kinds ; — MASTER AND SERVANT. \' ;ED. MASTKR ANP SKRVAVT. 207 a coiisid- ^ered, the j rvant the , (1) Parlivuhiv-yihcTe the employee is hired to do some particular kind of work — say, build a boat or draw plans for a house. The work is special and the agreement calls a certain annunt of this work. (2) Crewera/— where one person takes another into his em{)loy to do general work—example, a clerk, a carpenter, a baker, a farm laborer, or a do- mestic servant. (N. B. — The greater part of the chapter on Principal and Agent will be ap- plicable under the head of Master and Servant.) 2 The Contract of the Employer— In every contract for personal services there is something to be done and .something to be paid for it. In every properly made contract there is an agreement in advance regard, ing the compensation (the consideration), for the services, and in absence of any agreement it is presumed that the person accepting services is pre- pared to pay for such services what they are usually worth. If there is no specific agreement to the contrary, it is implied that payment is to be made at the end of the time. 3 The Contract of the Employee— It is necessary for the employee to do all that his agreement calls for, and // is ahv.iys implied that such services 7vill be rendered and work performed honestly and with proper care, skill, diligence and forethought. 4 Care applies usually to those who have the property of others in their hands, such as tradesmen when articles are left with them for repair, and warehousemen who receive property for storage. Care embraces not only the safekeeping or custody of the articles, but the protection of them from rob- bery, theft ; and in case of live animals that require food, water, etc., to give I him such attention as the owner would give. 5 Skill — Where a man is engaged in any trade or business it is presumed that his workmen or clerks have ordinary skill retpjired for that particular trade or business. He is not expected to possess all possible skill, but is expected to possess ordinary skill in his trade or calling. 6 Dilig-ence and Forethought apply particularly to the exercise of the mind in looking after articles placed in custody and getting them shipped when necessary, or, in case of work to be done, to do ic at the [)roper time so nothing will waste or suffer from neglect. They are the.,opposite of neglect and carelessness. \\ ^ii; I' '! M^ i 1 20S MASTER AND SICRVANT. 7 Lien— A person employed to do work for another, such as to repair an article or build a house, etc., has a right to keep the article uniil he is paid ; in other words, he has a lien on the property for his pay. If a blacksmith re- pairs my carriaj^e he has a rigt t to keep the carriage till I j)ay him for his work. A warehouseman may keep goodi until freight, storage, and other charges are paid. If he leis the goods go his lien is at an end. He cannot take the articles back, he only holds a personal debt against the owner. 8 Loss of Articles being* Built, Repaired, etc.— (0 Suppose Urown hires Smith to build a boat for him, and he, (Urown) furnishes the materials — the work to be paid for when completed. If the boat were accidentally de- stroyed by fire, Hrown would lose his material and Smith his work, because Smith had agreed to complete a certain work ; he may have a profit out of it besides wages, therefore he has the risk. (2) If Hrown had engaged Smith to work by the day on the boat, then the whole risk would fall upon Hrown. If the boat were destroyed IJrown would lose both materials and labor because Smith did not promise any defi- nite result o*" finished work. He could have no profit out of it save the pay for his ordinary day labor. (3) Suppose Thompson agreed to build a carriage for Henderson and furnish all materials himself for a specific sum, say $100. If the carriage were destroyed any time before completion and delivery to Henderson, then the entire loss would happen to the builder, Mr. Tliompson. 9 Time of Employment— All contracts of hiring where all the services are not to be rendered within one year, should be in writing. Suppose X agrees on January 10, 1897, to work for one year for Y, said year to begin on May I, 1897. There should be some memorandum of the same in writing, signed by the parties, because it i? not to be performed within one year, which would end at January 10, 1898. If 1 engage a man for a day, a week or a month, at the termination of this period I may discharge him or he may leave me without notice. At the end of the time there is no further contract ; it is dissolved by lapse of time. If a person is hired for no particular lime and he is paid so much a day, a week, a month or a year, he is entitled to notice from his employer before being dis- charged, and his employer is entitled to notice before the employee leaves him If paid by day — a day's notice. If paid by week — a week's notice. If paid by the month a month's notice. If paid by the year— three months' notice. ^Ji- ■r -fi: MVSTKK AND SKKVANT. 209 repair an c is paid ; ksmith rc- im for his ind other io cannot icr. 3se Urown laterials — entally dc- k, because it out of it l)oat, then ^ed Brown e any defi- ve tlic pay derson and rriage were 1, then the le services uppose X >egin on lin writing, [ear, which lination of At the pe of time, iiy, a week, being dis- leaves him If there Is good reason for (h'srharge or leaving, such as careless work, etc., notice is not recpiired by eitlier i).".riy. If a person agrees to work, say, lliree months, and works only two months, he is not entitled to anything, because he does not fulfil his part of the con- tract. If it is the fault of the emplojer he can collect wages fur the full time. 10 Dlschargfe— A serv.int is expected to serve his master honestly, cheer- fully and faithfully, to enter upon his duties at tlie pr^^per time, to o!)ey all law- ful commands, to be resi)onsible for loss or damage occurring to his mailer's property on account of his negligence : therefore, wilful disobedience and ha- bitual negle:l, absence without leave, refusal to perform work recjuested by the employer (unless such work is illegal) are g')od causes for discharge. If a ser- vant is discharged for good and sufficient cause, he cannot claim wages previ ously earned and not due at the time of discliarge. 11 Leaving"— The master is e.xpected to give reasonable commands, and commands that are not illegal and that are within the limits of the work the employee agreed to perform. If the master gives commands contrary to the foregoing, and endeavors to enforce such commands, the servant has just cause for leaving. The employer is expec'ed to furnish suitable tools, machines, etc., and such machine.s, engines, etc., should be reasonably protected so as not to sub- ject the employee to unnecessary danger or accident. If the employer required the employee to work with such dangerous machines after due notice of the danger, the employee has just cause for leaving ; and should any accident happen to the employee after his giving such notice, the employer is responsi- ble for such damage resulting from such unsafe machines. If, however, the servant accei)ts such risks voluntarily, he, and not the employer, is responsible for the accident. Foi Ontario legislallun respectinR M.tsters anil .Servants anil Worl.men, see R. S. O., Caps. 139, 14U, and «8, and for .Manitoba legislation sec R. S. M. Cap. yrt. i'J 2ro LANDLORD AND TKNANT CHAPTER 52. LANDLORD AND TENANT nKKINITION. TlIK I.ANIil.OKD. TiiK 'Iknant. Tmk I-kask and l'"okM ok Samk. lv\KM I,KASE. Sl'KClAI, Al'.RKK.MKNTS. TlIK 'I'IMK. \<\:Sr WllKN I'AVAIll.K. Ski/1' KK KOK Kkni. l'",VICTION. I.OIKiKKS. • ImI'KOVKMKNIS AND I''lXTl'Rl;S. RkI'AIRS. (Ikoi'nd Rknt. 1 Definition — When tlu' owiht of n-al estate in consideration of certain payments to Ik- made to liim, lends or liires this real estate to another, we have the relation of landloril and tenant siihsistinj^ between the parties. 'I'his rela- tion exists in all such transactions, from the letting of a single room to the etting of factories, farms, railroads, etc. The amount paid to the owner for Mic use of such premises is usually called i^<'«/. , 2 The Landlord— The owner of the property is called the F.analord or Lessor. 'I'he landlord gives the tenant full use of the i)remises, and, imless otherwise agreed u|)on, has no more right on the |)remises than any other per- son. L'sually there is a i)rovision in the agreement tiiat the landlord may enter and view the state of re|)air at stated periods. The landlord, unless otherwise agreed upon, is liable for all taxes, rates, and assessments collectible from the [)remises, likewise all interest on mortgages, etc. 3 The Tenant — The person who hires the projierty for his own use is called the Tenant or Lessee. He pays his rent, and obtains full control of the premises. lie has a right to eject the owner or any other person, the same as if lie were absolute owner. He exercises all the rights of an owner for the time being. The Rent is the consideration or price of such powers and privileges. He is not liable, unless sjjccially provided for in his contract, for the payment of (i) 'iaxes, assessments, interest, etc., (2) I'or ordinary depreciation of ti.e [iroperty by natural wear and tear, decav, etc., (t,) I'or loss of the property by fire, etc., He is liai)le, however, for the folIowii;g :- .,■ (i) I'or the payment of rent a^rec'd upon, ' ^ I.ANHI.OKI» ANI» TKNANT. 31 I of cfrtaiii ;r, wc have This rda- )ni to the owner for jiKi/orti or 1(1, unless other per- niay enter otherwise from the hvn use is trol of the same as Ir the time privileges, xynient of kvcar and (j) l''or voluntary or permissive waste or distruetion of thi- projxrty {},) I'or perform nice of special |)rovisions anil agrecmenls in his ciintrai t. 'I'he tenant has a right (i) To reasonahli' notiee to -piit from th • lamllnrd if his tenancy is f«jr an unspttifii-d linu', (j) To possess and enjoy all rrops grown on the ground, and all Ui.il are on the ground if his lease is terminated, (3) 'I'o necessary wood for fuel, if on a larni where tluie is lind)er standing, hut not for wood to sell. (4) To suhli't the premises or part of them to others, unless his con tract provides to the contrary. 4 The Lease is the name given to the contract lietwei-n the t.nidlord and tenant If it is for a year or more it should be in writing, if for three years or over i ■ msl he in writing and under seal. If tor more than sevi'n years the lease must he registered. When a lease for over se\en years is registered it gives the Lessee a right to vole on fmancial (|Ueslions the same as an owner. Leases should he made in duplicate, oni- co|)y for each person and all the lifovisions for the agreement should he carefully writieii down and signed by the parties to prt'vent litigation. The following is llu' ordinary lorm of lease iLuially called a ".Statutorv Lease." It will do for either farm or town property. A lease may he made to commence from any day in the pas; or fuiiire, as well as from the date of the lease. Form of Stafaiary Lease: TIILS INDI'INTL'KI''., made the Twentieth day of I'ehruary, in the year of our Lord one thousand eight luindreil and ninety-seven, In i'IK.si'ancio William McTavish, of the town of Harrie, aforesaid, liarher, the i)arly of the Second I'art, Wll'NivSSK'l'li, that in consideration of the Rents, ( 'oveiiants and Agreements hereinafter reserved and contained on the part of the said party of the Second I'art, his executors, administrators and assigns to he paid, oliserxeil and |)er- formed, the said party of the l-'irsl I'art hath demisi'd and leased, anill of l/adiiig is usually made out in triplicate (set of three,) and signed by the master of the ship; one for the shipper, one for the person the goods are sent to; the third is retained by the vessel. The person sending the goods is known as the "consignor" or "shipper." The person that they are sent to is called the "consignee." 6 Transfer of Bill of Lading*— The Bill of lading is a receipt for the goods that calls for their delivery at a certain port in good condition. It is a negotiable instrument, and may be transferred from one person to another- The transfer of the Bill of Lading by indorsement, transfers the goods that it represents. When the Bill of Lading is given instead of the goods it calls for, there is said to be a "constructive delivery" of the goods. (tnewhat and the in prox- oe Baird !s of the lortgagcs the Col- the Col- powcr to sirti'PiNc. 123 pay the oods, etc. jsiness of therefore le vessel ition, and one port id signed le goods ing the they are jt for the It is a another- ds that it calls for, Fonn (tf mil of LiuUuii. (iK.()Ri;i\N IJaS I kANSI'OKTAI ION ('oMIVWV 'rilROl'CH I, INK. NO, 507. CiiK \(;(i Ai.i;n( \, July 28, i8i;7, Siiii'i"Ki>, in good order and cnndition, l)v I ). M. 1. instead, as agont and tor- waider, fur account and at llic risk of whom it may coikhtii, on hoard the l*ro[)cllL'r "(!anada," whereof John M((iiffin is Mnster for tin- i)rcsent voyage, now in the Port ofC 'hicii^o, aiul hoinul lor I'arry Sound, the follcnving articles as herein m irked and desi.-rihed, to i)o dehvered in good order and condition as addressed in the margin, or to his or their assigns or assignees (dangers of navigation and colhsion, explosion of boilers, and fui' alloat excepted), upon paying the freight and charges as noted below. All del'u ieiicy in the cargo to be paid for by the carrier and deducted from the height, and any excess in the cargo to be paid for to the carrier by the consignee. In case grain he- t:onu's healed winle in transit, tiie carrier shall deliver his entile cargo, and pay only for deficiency exceeding live bushels h)r etch 1000 bushels. And it is also exjjressly agreed that in case of lo-is or d.im.ige of any of the goods named in this Ihll of l.iding, for which any c.irrier under the same may be liable, that they shall hive the benefit of any insurance by or for account of the owners of said goods. In W'ii'NKss \Viii;kEOK, thesaid Master or .^gent of said vessel hath affirmed 10 three liiils of this tenor and date, one of which being accomplished the others to stand void. Address Win. Cuthbert. No. I Description of goods. Hales (if Broom Corn. Weight. I Rate. .'Vmonnt. 1650 ! 30c. $4 95- n. H. LiNSTKn, Afrcnt. *1 The Charterer of a Vessel, is the person who hires it for a limited time: — (i) l''or a single load or a specified number of trips, the owner reserv- ing pcssession of it, and navigating it for the person who has hired it, or (2) For a season or any other specifieil time, the owner giving up possession, and the charterer ti;king posse.'tsion and managing and navigiting the ship. 8 Charter Party, is the name given to the contract between the owner and the person hiring the vessel. It will vary accordingly to the agreement between the parties. If for a single trip, it \s\\\ ,s[)ecify tlu length of the trip, the limit of time allowed for loading and unloading, etc. What goods are to be carried, the amount to be paid for such work, and who is to load and un- load the vessel. The following is a simple form of (,'harler Tarty where the vessel is let for a term, to be run and managed Ijy the hirer, Form of Chnrtcr Piirti/. Articles of agreement made and entered into this ist day of .\[)ril, .\. 1). 1987, between Frederick Henry Lummis, of the port of Meaford, Ontario, gen- .( SIIII'I'INO, ' tliMuan, of llic first part, iin>l f'.iptain N>'il Nfi-Ki'ii/io, of tli? City of- KiinMr- diiir, (.'iiiDty of ISnici', Ont.uio, u( tin- 'ii.'ioud pmi, WuiR-ssLth llial l''c parly of the firsi part has this day chartered and iiired urUo tiie pirty of the second part, tile s'eainship ' i'avorilc" of MiMJord, Ontario, (jf Ooo tons Ixirilen, with all the ap|)iirteiiaiu'es tliereto helon^ui;^, and all chauH, cal)les, hawsers, an- chors, tacltiing, eic, tliat l)elong to iier, for tiie term of eiyht months, to l)e coni|)ntc(i from the first day of April, nistanl, said sliip to he delivered at the wiiarf at Mcafonl at the sealin.L; and delivery of thi-> aj^rerinent. In consider- ation whereof the i)ariy of the second part agrees to |)ay to the party of the first part, the sum of One Thousand Si\ Ihuuh-ed Dollars i" e([ual portions of Two Hundred Dollars at the end of each moiuli, during the continuance of this a^tueinjnt, and to deliver the said vessel to ihj party of the lirst part, at the wharf aforesaid, on the ist day of Deceni!)er next, in as good condition and repair as she now is, exce|)linj^ onhnary wear and tear. In witness whereof the parties hereto have set their hands and seals the day and year lirst above written. Ih'OlCSS. 1 1'. If. 1,1 MM Is (I,. S.) I'"ki:i) M(I)()\\ 1,1.1.. / Ni.ii. M( Kkn/ik. (1- S) 9 DemUPrage \Vhcn a vessel is chartered for a certain voyage, a speci- fied time is allowed the charterer for loadinj,' and unloading. If the vessel is detained longer than the time agreed upon, the owner will charge a certain amount })t;r day for such detention. This amount charged for over time is called Demurrage. I' ■ 10 Primag'e, is a small fee paid to the Master or Captain of a vessel by the shipper over and above the ordinary freight for his care and trouble in looking after the goods while aboard his ship. 1 1 Towag'e, is any amount paid by a vessel in distress or in need of help to another vessel for assistance in getting alloat when aground, or for drawing a vessel into or out of port. Towage has to be [laid whether the ef- forts are successful or not. 12 Salvage, is the sum paid for rns'uing properly abandoned or in im- minent peril at sea. The compensation fur such services varies according to the difticLilly. It is somelime-s as nnuh as half the value of the properly saved. Salvage is nqt paid for unsuccessful efforts at saving goods. 'ft f ! 13 Loss or Injury — The owners of vessels are responsible for loss or damage to freight when occasioned by negligence on their part or on the part of their .servants, the seamen, etc. They are not liable for damage occasioned by some extraordinary peril at sea, suc'i as a violent storm, a fire at sea, piracy, etc. Hence goods should be insured by the owners against such perils. ■ Kiiii-ar- tl'c party soil mil K'li, willi fseis, aii- tlis, to 1)0 oil at tlic coiisidcr- f tlio first )rlii)iis of luancc of a part, at condilioii s tliu cl.iy ,. S.) -. S) c, a speci- vessel is ; a certain ,cr time is vessel by trouble in 11 need of id, or for er the ef- |or m im- rordiiig to property )r loss or the part :casioned [•e at sea, [ch perils. SMIITINC. "5 14 Qeneral Average \VlK'n there is I'xlr.iorilimry p.Mil at se.i on ar rouiU of a violent storm, it is sometinies found necessary to lighten the ship by sacrificing some properly'in order to save the ship and the reinaintler of the property. Someliines the ship's anchors, masts, spar-; or ringing; have to be cut away. All siirli losses must be shared liy the owners o; the property .saved by such saci fice. Such loss must be: - * (i) Necessary {2) N'oluntary. (.5) I'or the express purpose and in'enti )n of savinf? sotncthing else, and such effort to save nuist be successtiil. Cioods thrown overboard are said to be "Jettisoned." They should be such as are i)est calcufited to save tiie shi|). This is not an ordinary loss; it is an expense iiuHincd for ihe benefit of all, and all must share it acordint; to their res[)cclive values, (loods washed overboard do not come under (leneral Average. 15 Adjustment of Loss of Jettisoned Property -The general rule is that all goods carried as freight, including that thrown ov(;rboard, together with the vessel must share the loss according to the value. Su[)pose the steamer .Vthab.isca, [)roceeding on her vuy.ige from Fort Arthur to Parry .Sound is c.iught in a violent storm. The vessel is worth say . . . . . . . $300,000 The cargo consists of 40,000 busiiels of wheat belonging to Messrs. Ogilvie iV (,.").. Montreal, valued at . . . . 5o,ono 10,000 sacks of Hour l)el()nging to Ogilvie i^ Co. .. .. 30,000 20,000 sacks of Hour belonging to [. McLauchlan iV Sons, Hamilton, .. .. .. .. .. .. 60,000 300 head of cattle on deck, owned by H. Kennedy iv Co., Port Aurthur, . . . . . . . . 20,000 Machinery for Foundry, owned by (ieo. Corbet iV Son, Toronto : . . . . . . . . . . . . 40.000 Total .$500,000. Suiipose the 300 head of cattle were jettisoned to save the remainder of the property, the loss would be shared in proportion to the value of the several items above. We find the property sacrificed is 4 per cent, of the total value of the vessel and cargo, therefore, the owners share the loss as follows: The vessel owners $12,000, Ogilvie (.*v: Co. $3,200, J. McLauchlan & Sons $2,400, H. Kennedy ncd by the habits or the instincts of the particular animals transported. > or example : a railroad company transports a car load of cattle, and during the time, one animal gores and kills another, the Coni- pany is not responsible for the loss that might have been prevented by ordinary care or diligence of the attendant. '1^1 9 Failure to Remove Freigrht — When freight arrives at its destination the carrier gives notice to the consignee of its arrival. If the consignee fails to take it away wuhin a reasonable time, the Company may charge for storage. The carrier is not responsible for destruction by vermin, etc. When freight is shipped by the car, to be unloaded by the consignee, if he fails to unload with- in reasonable time, he may be charged demurrage for such time as he unrea- sonably detains the car. i !■ CHAPTER 57. HOST AND GUEST. t The Host. ThK C'll'EST. Thk Host's Duties. The Host's Liaiui.ities, The Guest's Duties. The Host's Lien Boarding Houses. ' ■■;! ' 1 The Host — The law of host and guest applies to keepers of hotels, inns, taverns, pi.il)lic houses, etc. These are synonymous terms for persons who are engaged in supplying board and lodging to travellers. The proprietor or keeper of such a place of entertainment is called a host or landlord. ^renience to is not how- owner, or or n powers at iss is usually i^ater the an y from — le particular ts a car load ;r, the Coni- [ by ordinary s destination )nsignee fails e for storage, len freight is unload with- as he unrea- MOST ANf) GUESf. Ht 2 The Guest is any person who is absent from home travelling on business or pleasure, and who comes to an hotel seeking board or lodging or both. As soon as he is accepted he becomes a guest. Hacon says "that "inns are for passengers and wayfaring men." A friend or neighbor can have no action against the landlord as a guest. Any person who leaves his baggage at an hotel and lodges elsewhere is not a guest, and the landlord, not receiving any compensation, is not responsible to any great extent for the baggage left with him. It is a bailment for the benefit of the bailor only. Il a traveller leaves his horse at the hotel for entertainment, the traveller is a gaest, and the hotel-keeper is responsible for the baggage left with him. If the guest ceases to be a traveller and agrees with the landlord for board for a definite time, he ceases to be a guest, and becomes a boarder. 3 The Host's Duties — The inn-keeper being in the business of supplying board and lodging to travellers, and his offers being general, they may be accepted by any person ; hence he is bound to accept all travellers that demand entertainment, the only exceptions being: — [r] That his premises are already full, or [2] That the person is drunk or disorderly, or [3] That he has some infectious or contagious disease that would be dangerous to other guests, or [4] That the guest refuses payment in advance for such entertain- ment, or [5] That the person wishing to be a guest is a reputed thief or burglar who would endanger the property or persons of his guests. 1^1 hotels, inns, ons who are tor or keeper 4 The Host's Liabilities — The host is bound to exercise extraordinary care over baggage, money, or property of his guests, and is responsil)le for the acts of his servants and his guests. If a guest's property is stolen, the landlord is responsible for it, no matter whether it was in the guest's room or under the host's especial care, so long as the guest did not by special agreement assume the liability himself. If the host asks the guest to place his property under hi» charge, or under lock and key, and his guest refuses to do so, the landlord is relieved of liability. Hotels frequent'y have safes or vaults where the guests are requested to store their valuables. If they neglect to do so, the property will be at their own risk. The hotel keeper is responsible for loss by fire or in any other way except by "alien enemies or an act of God," or by the servant or companion of the guest. i^i WOST AND Gl/ESl'. 5 The Guest's Duties art: to behave in a proper and seemly mannei', to place his propi^rty, . baggage or money under the landlord's control, if re(iuested, and to p;iy the compensation reijuired by the landlord in advance, or whenever re'iuested. 6 The Host's Lien — The host has a lien on tlie goods, baggage, horses and rigs, etc., of the guest lor the payment for all board, lodging, etc., su])plied to him or to his family or servants, that may be travelling with him. He may detain such articles until the bill is paid. 'I'he host may kee|j the pro[)erty of third persons that is in possession of the guest for his expenses, unless it was known at the time of making the contract for lodgings that the {)roperty was not owned by the guest. 7 Boarding' Houses differ from hotels in several particulars : — (t) 'I'lu'y are not open to the ])ul)lir, imd (2) Til .re not intended for travellers or transient guests, but for per- manent boarders. (3) They are not bound to receive any person unless they wish to. (4) Tlv- are .lOt responsible for the care of baggage and pro[)erty, and would not be liable for the loss of them unless such were caused by gross negligence. (6) Boarding house keepers have no lien on tiie property of their board'.-rs for their board and lodging as the hotel keeper has. 'J"he majority of hotel keepers are Ixjarding house keepers as well, because they usually have a number of permanent l)oarders wl^o reside in the house. The relation of the lantllord to such boarders is the same as any other boarding house kec])er, and not the same as the relation sustained towards his travelling guests. In the province of Manit(jl)a a boarding house keeper is given a lien on the luggage of a i)oarder for arrears of b(jard. See R. S. M. (]ap 73. I I f CHAPTER 58. TELEGRAPHS. ( Thk I'ARriics. I TiiK Tkrms. j Ac:cuRACV. \ Promptness. 1 The PaPties -In the sending of a telegram there is a contract, and two parties to the contract: - (i) 'J'he sender of the message. • • (2) The Telegraph Company that transmits it ' tEI,tGRAf'HS, 2.U mannef, iitrol, if ixdvaiicc, c, horses su[)i)litjd He may operty of :ss it was pcrty was ut for per- il! to. [)erty, and I by gross of their 1, because he house. Ijoardir.g IravcUiiig ell a Hen The sender may be any person who tenders a message for transmission, and offers to pay for it. The second party in the contract in America is a 'I'elegraph Company— a stock company that is in the business of telegraphing for the purpose of making profit. In England and some other countries, the (lovcrnment is tiie owner and operator of the telegraph system, in the same way that the ( lovernment is the owner and operator of the postal s)stem in Canada. 2 The Terms are usually printed on the telegraph blank on which the message is written. Such are the terms u[)on whicli the Company offers to take the message; the sender acce[)ts them by writing his message on the blank containing the terms. The ordinary terms are : (i) 'I'he sender agrees to pay for the message at the p.'guL'r rate. (2) The Company may refuse to transmit the despatch unless it is paid for in advance. (3) 'I'he Company agrees to send the message by its telegraph lines with promptness, and deliver it to the person it is addressed to. (4) The Company likewise agrees not to reveal any of the contents of the message to any peroon except to the person it is addressed to. It is a secret or confidential messenger for its patrons. 3 Accuracy — The Company usually does not hold itself responsible for the accuracy of the despatch unless the sender will pay for the message being repeated back to the place it is sent from. Then it is held responsible for mistakes. 4 Promptness — The Company is bound to send all messages as soon as possible, and to send in the order in which they were received. If tliere is any unnecessary delay on the part of the ("ompany, they are responsible for any loss occasioned by the delay. AUCTIONEERS AND AUCTIONS. and two CHAPTER 59. Dei iNiTioN. The Auctioneer an Acient. Terms of Sale. 'I'he Hiddinc. The .Auctioneer's Lien. The Auctioneer's License. ■W I 1 DEFINITION —An auctioneer is a person who is authorised to sell mer- chandise or lands, by public auction. He cannot buy; he can only sell. If he i 234 AUCrrONKERS AND AUCTIONS. V,) il 'i ' ^ wants an article that is being sold, he must purchase it from some person who has purchased it at the sale, or make known publicly before taking any bids, that he wishes to bid on liie article himself 2 The Auctioneer an Agent— ^^'hile the auctioneer is selling an article, he is the agent of the seller, Wiicn he knocks the article down, the act of knocking down is on behalf of the purchaser, and he is agent for such pur- chaser. He is also agent for both when he makes a memorandum of the sale in his book, as he binds both parties. 3 Terms of Sale— Unless otherwise stated, goods sold at auction are sold for cash. If there is credit to be given, the terms of credit should be stated in the written or printed ''terms of sale." The terms of sale should also be read or stated by the auctioneer at the time of sale. They may contain con- ditions such as: — (i) The terms of credit of which the articles are sold. (2) That the first bid must be above a sum named. (3) The amount to be advanced at each bid. (4) That there may be a reserve bid, or a set price (5) The amount of deposit to be paid down at the time of sale. 4 The Bidding— .\n auction sale is one conducted publicly, for every offer is made public. Every /w/ia fide bid should be accepted by the auc- tioneer, and the sale conducted with the greatest of fairness. The bidding may be either: — (i) Widi an increase of price at each bid, such as is usually the case, or (2) With a decreise in price at each bid. Example: The back taxes on a farm are, sa>'$6o. The auctioneer asks for bids in acres to pay the taxes A bids 20 acres; B bids, say 18 acres; C bids, say 15 acres. In other words, he offers to pay the $60 due, for 15 acres -the b^st offer for the seller. The letting of contracts of work is often done in this way. An auctioneer is not bound to sell on one bid. It takes two bids to make competition. A second bid may make it compulsory on the part of the auctioneer to sell unless there is an upset price. ' ' 5 The AuctionSBP's Lien— T'he auctioneer's compensation is usually a commission on the amount of the goods or lands sold. He has a lien on the goods for his commission until they are delivered to the purchaser. He may sue the purchaser for his commission 6 The Auctioneer's License -Each county and city may charge a fee for the licensing of persons who may sell by public auction within their borders. They may make special rules governing the auctioneer and his sales. son who ang any n article, c act of aicli pur- the sale ction are be stated 1 also be itain con- le. for every the auc- bidding case, or •ark taxes the taxes er words, er. The eer is not A second ess there usually a jii on the He may irge a fee |r borders. fiANKING. CHAPTER 60. ^is I The Business Banks May Do. The Business Banks May Not Do. Banks ARE Incori'orated Companies. Uouiu.E LiAintn Y. The Name. The Officers. Deposits. Deposits on Current Account. Savings Bank Accounts. BANKING. J Deposit Receipts. The LoANiNd ok Money. The Security (Iiven. Collateral Security with Form of Hs pothecation. The Issue of Bank Notes. Bank Circul.\tion Redemption Funi>. Bank Drafts,Bills of Exchange, etc. Making Collections. Exchange, etc. Statute of I^imitations. ^ Dominion Government Cheques. 1 The Business Banks May Do— Banking consists principally in deal- ing in money. The following are different departments of the business : — (i) The receiving of money on deposit. ■ (2) The loaning of money. (3) The issue of Bank Notes or Bills for use, instead of gold and silver. (4) Exchange, — the drawing of drafts tor the payment of money at a distance instead of remitting the currency. (5) The collection of negotiable paper for customers. (6) The purchase and sale, etc., of Bonds, Debentures, Gold, Silver, and Foreign Currency, etc. 2 The Business Banks May Not Do -Banks are incorporated for carrying on the ordinary business of banking and are prohibited from carrying on other kinds of business, either directly or indirectly. They shall not — (i) Deal in buying or selling, or the bartering of goods, wares, mer- chandise, or engage in any such trade or business whatsoever. (2) They shall not, directly or indirectly, deal in or lend money, or make advances upon the security or pledge of any share of its own capital or t he capital of any other bank. 236 nANKtNC. I'fln (3) They sh ill not, directly or indirectly, lend" money on mortgage, on Real Mstate. Sliijjs, Wares, Merchandise, etc. 3 Banks are Incorporated Companies -Under the iJank Art of 1890, banks must be Joint Stock Com[>anies, chartered by special Act of Do- minion Parliament, as the Dominion Parliament has control of all matters and things that pertain directly to the commerce and trade of the country The ch ir ers of the existing Canadian 15 inks ex|)ired in 1891. The Act of 1890 continued the charters for 20 years. Hanks must have a certificate from the Treasury Hoard of the i'lnance Department of the Dominion before begin- ning banking 0|)erations, and this certificate cannot be obtained until a depos- it of at least $250,000,00 has been left with the Kecc'iver (leneral. 4 Double Liability — The l-anking Companies are formed and governed similarly to other Stock Companies, i)ul the liability of the shareholder is dif- ferent on account of the nature of the business the integrity recjuired for the great trusts reposed in the banks. On account of this every person who Kakes Stock in a Hank is liable for all the stock he subscribes for, and for as much more. For example— Alfred l''rost subscribes for stock to the amount of $1,000 in the Traders Hank. He is liable to pay the $1000 as called up by the Di- rectors just the same as in any other St(H:k Com[)any. If, however, the bank went into li(iuidalion, the Directors would call up Irom him another $1000, payable 2o'y{^ every 30 days until all is paid. 5 The Nam3 -No person, or persons, Company or Association may take any such title as "Bank,'' "Hanking Company," "Banking House," "Bank- ing Association," or "Hanking Institution," without obtaining a certificate from the Treasury Hoard. Any private partnership or concern, though they do a banking business, is not allowed to assume a name like any of the fore- going, descriptive of its business as a banker, under penalty of $1000 fine, or imprisonment not exceeding 5 years, or both. * 6 The Officers — The officers of a i)ank are called "Directors." The Directors elect among themselves a President, Vice-President, Secretary, Gen- eral Manager, etc. The management of the bank, generally, is left wit h them. A majority of the Directors of every bank must be British subjects by birth or naturalization. No person is eligible for a Director of a bank unless he has consider- able financial interest in the bank. The property qualification required by the ortgage, Art of u( 1)0- tcrs and ry 'IMie Act of :ate from re hegin- a dopos- ;overned or is dif- c1 for the son who id for as if $1,000 y the Di- the IkuiIc r $1000, on may IJank- lertificate t^h they the fore- looo fine, IS.' The ry, Gen- eft with Ijects by Donsider- ed by the JIANKINC. «37 Statute is ^3000 of paid up stock if the capital of tlu; i)ank is not more than One Million Dollars; $4000 paid u|) if the cipitai is over One Milli )n, am! not more than Three Million. If the cn|)iial is over Three .Million, paid up stock of $5000 is the necessary (pialifica'.ion fur a iliroctor. , 7 DapDSitS — V deposit is in reality a lori to tlu b.n'v. 'i'heic lo.ins to the bunk are of three kinds, differing according U) their terms: — (1) Ourrent account. (2) Saving bank. (3) Deposit recei[)t. The act of opening an account with the bmk bjgins the contract. The banker states his terms an J the djp;)sit()r accepts thjm and makes his deposit. The l)ank may use the depositor's m )ney for any legitimate purpose but must pay it back to him when he desires it. 8 Deposit on Current Account— This is the jilan on which merchants and traders deposit their funds. I'hey use the ijank for two purposes : — ( I ) To keep iheir money safely, and ■(2) To pay out their money on cheque as they order it, so takins; from every person the best evidence of the making of a payment —a checjue drawn to their order and paid by a dirinteresttd party — the I)ank. The banker receives the use of the money for his trout)le. Occasionally the banker pays the depositor a low rate of interest on his lowest monthly balance. The depositor receives from the bank a pass book as an evidence of his deposit. All the deposits made and chc(|ues charged are entered in this pass book and a balance struck monthly, and all the cheques that have been paid are returned to the depositor. (For form and laws regarding checiues, see Chap. 20 — 21, pp. 74 — 80.) The depositors in a bank have a third claim on the assets of an insolvent bank, the bank notes having a first claim, the amount due the Oovernment being the second charge. 9 Saving" Bank Accounts are ^ho^ie kc])t with de[)ositors who deposit their earnings for the purpose of accumulating diem. It is customary for such accounts to increase steadily. (1) The funds are subject to chec|ue by tiie deposilor. (2) 'I'he depjsitor receive-; from tiie baiik a small rate of interest, which is added to tlie account yearly or half-yearly, according to agree- ment. ( y; '- ..n.dl pass 000k in which the account is kept, is the evidence of the amount on deposit. It differs from the current account as there is usually a steady increase in the amount of the account, while in t he 338 IlANKINfi. '! I m ■. current aooount method there might be ten thousand dollars to the de- positor's credit to clay, and not icn rents to morrow. (4) l)i.'[)osits may be received from any person without regard to age or station in life. • 10 Deposit Receipt — Wlien a depositor has a sum of money that he can leave at interest fur a time, he usually deposits it on "Deposit Receipt," r ""•"»- times called "Certificate of Deposit." (I'or form, etc, see page 84 ) Deposit Receipt is the evidence of the amount of his deposit with the bank. 1 1 The Loaning of Money is the second department of the business of the bank. .\s noted previously in" this chapter, the banks are not allowed to invest their funds in Real l-'-state Mortgages. The principal business is done in discounting negotiable paper, such as notes, drafts, bills of exchange, etc. These may be either — (i) Customers' paper discounted by the holder: that is, notes, drafts, etc., that have been given in the ordinary course of trade, or (2) Accommodation paper, in which one person has become security of another (without receiving value) for the purpose of borrowing. (See .pages ,0 5S, and Si -82.) 12 Th( Security Given — Money is not borrowed from a bank op " e strength or >i'i:iirity of one name. In either of the foregomg cases, cust( or accommodation paper, there are two names, one as principal debtoi . ^ the other as surety. The bank in each c.ise is an "innocent holder for value," and therefoie can collect from all others liable on the paper. No bili or note in the hands of a b.iiik, as an innocent holder, can be held void on account of drawing usurious interest or on account of being tainted by fraud. ' The b.mk may stipulate for, and take any rate of interest, not exceeding 7 per cent, per annum, and may pay any rate agreed upon on deposit. It may charge as high as one-half of one per cent, as commission for collecting the paper, of its customers. 13 Collateral Security— Many persons very rightly refuse to indorse paper for others, and in turn do not ask for indorsement. They give their own note to the bank and place valuables along with it as collateral security. The collateral security may consist of any one or more of the following; — (1) Customers' Paper left wiih the owner's note to secure it. (2) Warehouse Receipt representing grain in an elevator, goods in a Storehouse; lumber, ties, laths, etc., in a yard; logs, poles, etc., in a bay, cove or Ijootti, etc. to the de- rcgard to lat he can 3t " r ""^'>'*- U) the bank. business illowed to is is done ange, etc. ;es, drafts, le security ing. (See ink OP ' e |cust( ebtoi . ^ "or value," can be of being exceeding It may ecting the to indorse their own unity. wing;— ;oods in a in a bay, IIANKrNf!. •39 (;) Kill .)f l.idiiiL; or Shipping; Rccci[)t th;u roprosonls floods in transit. (4) Hypothecation of goods by wholcsalL' dealer, als(» by a manufac- turer, while ill course of construction, under .Section 74 of the lianking Act of iHi)o. (Sec following form.) (5) MortgugcM or I. lens on Kc.il I'"-st;itc or cinttcl properly. NoTK. These are taken only as aclJitional or collateral security and not as the primary obligation of the maker. Form of fJi/pof hectil inn under '^iccuou 74, U.inkin;j Act ut" i.S(;o. In consideration ot an advance of $600 made by the Merchants Hank lo James M''i,uiclilan, for whirh the said bank holds the following note, dated I'arry Soiiiul, March i, iS(;7, for $0od f(jr three months at 7 per cent., the goods, wares and merchandise mentioned below are hereby assigned to the said hank as security for the payniL-nt, on or before the 4th day of June next, of the said advance, together with interest thereon at the rate of 7 per cent, per annum from the ist day of March. This security is given under the provisions of section 74 of the "Hank Act." and is su'iject to all the |)rovisio;is of tlie said .\ct. The said goods, wares and merchandise are now owned by James McLauch- lan and are now in his possession, and free from any mortgage, lien or charge thereon, and are in his warehouse, No yj I'oulett Street, in the Town of Parry Sound, and are the following: — 'l\vo chests Oolong Tea; 50 lbs. Java Coffee; 25 lbs. Myrtle Navy Tobacco; 20olbs. ("andies; 200 lbs. Nuts; 10 box Soda Biscuits. Dated at Parry Sound this 15th day of March, 1.S97. Ja.mes McLauchi,.\n. (L. S.) 14 The Issue of Bank Notes— IJanks in Can.ada, with two exceptions are allowed to issue Hank Notes to the, full extent of their unimpaired paid up capital. Example— If a bank has $2,000,000 of paid up capital and n )ne of it has been lost in any way, they can keep in circulation $2,000,000 of their bmk notes. All Bank Notes issued must be either $5 or .some multiple of $5. All bills under $5, such as I's, 2's, and 4's, are issued by the Dominion Ciovern- ment, and every bank is rc(|uired to hold at least 40 [)er cent, of its cash re- serves in the Douiinini (Jovernment notes. Every bank must receive its own bank notes at any of its offi'^es at par inpayment for any de^it or nci^ tiab'e pi[)i'r due them. A i)ank must not pledge its own notes as security for a loin. 15 Th9 Bank Circulation Redemption Fund, is a fund created un- der the .\ctof iSip in the hands of the Receiver Oeneral, by each bank djing business in Canada contributing to it an amount ec;ual to five per '}^ 340 n.ANKrNn. r ; 1 i 1 I 1 1 1 ' '1 1 ^'t 1 ' cent, of its average circulation The amount of each bank's contribution to be adjusted annually on the basis of the average circulation for the past year. This fund is to he n ed by the Finance Minister, in case of suspension of any bank, to take up the notes of that bank at once, so that they may not be sold or paid off at a loss to the holders, nor the holders be inconvenienc- ed by the n )ks not being negotiable on account of such suspension. 16 Bank Drafts and Bills of Exchange— Banks arrange with one another for lires of credit, so that one branch may draw a draft on another bank or branch of bank, for a customer who wishes to remit money to any place at a distance. The draft is made in favor of the person that the custom- er wishes to pay the deln to, and is remitted usually by mail to the creditor. The banks settle periodically, say every three months, among themselves. Drafts for foreign countries are known as Bills of Exchange. 17 Waking Collections— Business men and others frequently leave their negotiable paper in the hands of their banker for collection. The bank charges from one-eighth to one-half of one per cent, commission for their work. See form of indorsement for collection, page 71, section i. 18 Exchange, Etc. — Besides the foregoing line of business, banks fre- quently purchase and sell for customers all kinds of securities, such as stocks, bonds, debentures, etc., charging usually one-eighth of i per cent, on the par value of tiie security sold or bouglit. Another line of business is that of exchanging foreign money brought into the country by persons coming into the country, giving them current funds for what is not current funds. A commission according to agreement is charged for this work. ' 19 Statute of Limitations is inoperative in case of liability by any bank as to • , (i) Its bank notes issued. (2) Its deposits from customers. (3) Its dividends due stockholders. Unlike any ordinary debts, these never become incollectible by the Statute of Limitations. 20 Dominion Government Cheques are to be paid at par by any bank where they mny he presented. They are not iubject to any commission or discount lor collection. -^ bution to the past aspension 1 may not ivenienc- with one another ;y to any e custom- creditor. etnselves. fitly leave The bank heir work. aanks fre- as stocks, the par ight into funds for Is charged by any |e Statute by any iximission PATENTS. CHAPTER 6i. 24 I PATENTS. \ Dkfinition. i ThK PURl'OSK. I How Ohtainkd. I What May he PArENTr.n. J Patents May he Rei used. Sale ok Patent. Infringement. To Mark " Patented'' on Each .\rtici.e. ^ Forfeiture. 1 Definition — A patent is a document issued by the Dominion Govern- ment granting to an inventor the exclusive right to make some article, machine^ or part of an article or machine, compound or mixture, that he has invented. This patent prevents others from making and using the article without permis- sion, thus keeping it for his own use and benefit. 2 The Purpose of granting a patent is to encourage inventors to make research, and so perfect machines and other articles that busmess and manufac- turing interests may be extended and improved. If an invention is a good one, many persons will be found anxious to use the improved article, and unless the inventor takes the precaution to patent his invention, many p( r.sons would be selfish enough to use the labors of the inventor without giving him any remuneration for his trouble and, in fact, com- pete with him in making and selhng the article. The patent protects the inventor and enables him to fix his prices, and so reap the reward of his labors. If an improvement on an article is patented, the patent does not give the patentee a right to make the original article, nor yet does it give the owner of a patent for the article improved on, a right to make the improvement. 3 How Obtained — Applications should be made to the Commissioner of Patents, Department of Agriculture, Ottawa, accompanied by the followmg : (1) A working model of the article to be patented. (2) A drawing, or a series of drawings, showing the various parts of the article, one copy on bristol board and two copies on tracing linen. (3) Complete descriptive specifications of the invention. • (4) A fee of $60 if patent is required for eighteen years, $40 if for twelve years, and $20 if for six years. 242 PATENTS. 4 what May be Patented— Almost anything may be patented that is new and useful. We emi'nsize the woid " new," because anything that is gen- erally known to the ; iihiic cannot be said to be new. It may be a whole ma chine, a part of a machine, a medicine, a mixture, a process ot manufacture, n fact, a,ny kind of new invention, contrivance or plan may be patented : — [i] The patentee must have domicile in Canada. [2] The article must be new, and not in use or for sale for more than a year before the date of the application. [3] If patented in a foreign country it must not be more than a year patented, before the application is made in Canada.. 5 Patents May be Refused— The Commissioner refuse to grant a patent in any of the following cases : — [i] When he is of the opinion that the alleged invention is not patent- able in law. [2] When it appears to him that the invention is already in the possess- ion of the public, with the consent or allowance of the inventor. [3] When it appears to him that the invention has been described in a book or printed publication before the date of the application, or is otherwise in the possession of the public. [4] When it appears to him that there is no novelty in the invention. [5] When it appears to him that the invention has already been patented in Canada, or if the Commissioner has doubts as to whether the applicant is the first inventor. 6 Sale of Patents— Any person who has obtained a patent for an article may disuose of his ri^ht to make the article, either entirely or partially. When an inventor sells a partial right or a partial interest in his patent and takes notes or bills of exchange therefor, they are subject to special law.s, see page 74. 7 Infringfement— When a person makes or sells a patented article with- out consent of the patentee, he is liable for infringement : — [[] To pay the patentee for the loss sustained. [2] To be stopped in the manufacture and sale of the article. [3] To have any of the articles he has made confiscated. [4] To be fined, and to be the cause of his customers being fined for using the patented article without leave. 8 To Mark " Patented " on Each Article— Every patentee must pii nt or affix the word " patented " and the date of the patent, to all of his articles made under the patent, thus — "Pat.;nted 1897 "— rso as to give due notice to H COPYRIOHT. 243 ited that is that is gen- whole ma anutacture, nted : — lore than a than a year ise to grant not patent- the possess- scribed in a is otherwise nvention. ;en patented applicant is )r an article illy. When takes notes bage 74. larticle with- |ig fined for 1 must p li nt his articles lie notice to all that his rights are protected by a patent. The penalty for neglect is a fine of not more than $100 or two months' imprisonment. 9 Forfeiture — The patentee, or some person for him, or some assignee of his, must within two years from date of the jiatent, begin to n)inufaciure the patented article in Canada, and continue to manufacture it in Canada, or the patent will be forfeited for non user. CHAPTER 62. COPYRIGHT. Dkfinitiov. Who May Coi'Vric.ht a Wokk. Conditions ok Copyright. I Pknai.tiks. I^Fees, Etc. 1 Definition— A copyright is the exclusive right given by the Covern- ment to any person who is the author of any bjjk, m ip, chart, musical composition, painting, drawing, engraving, to print, pulilish, and sell such booW, map, chart, etc., for his own benefit during 28 years from the date of the copyright. The author or his legal representatives may within one year after the ex- piration of the 28 year term, renew the copyright for fourteen years. 2 Who May Copyrigrht a Work. .Any person living in Canada or any part of Great Britain or her colonies, in a country having an international co[»y right treaty with the United Kingdom, who has written, engraved, drawn, or invented such book, map, chart, etc., or his assignee. If a book is published anonymously, it is suffi:ient to enter the name of the first publisher instead of the author. 3 Conditions of the Copyrlg-ht — The following are the principal con- ditions in reference to obtaining and holding copyright in Canada : — (i) The work must be published, printed, or reproduced in Canada. (2) Three copies of the work must be deposited with the Department of Agriculture at Ottawa. One of such copies is deposited in the Parliamen- tary Library of Canada, and one is sent to the British Museum. (3) In the case of a painting, drawing, statuary, sculpture, etc., a writ- ten description will do instead of the copies of the work. (4) The author must insert in all books, etc., on the face or back of the the title page, the notice of copyright, " Entered according to Act of Parlia- \ 244 COPYRir.HT. ment of Canada, in tlie year 1897, l)y A B , in the Office of the Min- ister of Agriculture." Tiiis must be put on the face of drawings, maps, charts, etc. The signature of the artist on a painting is sufificient. (5) Copyright is for 28 years, and an extension of 14 years more may be had on application by the author or his legal representatives. (6) Nothing of immoral, treasonable, licentious or irreligious character may be copyrighted. 4 Penalties -Every author who fails to comply with the regulations loses his copyright. Any person infringing upon the rights of the author is guilty of misdemeanor, and miy be punished by fine, pirt of which goes to the Crown and part to the author. All such works as are infringements of copyrights are also confiscated. 5 The Fee for registering a copyright is $r, for certificate of regis- tration of copyright 50 cents, copies of documents extra. The correspondence with the Minister of Agriculture is carried on free of postage. All business may be done by correspondence. All applications, specifications, etc., should be legibly written on foolscap. CHAPTER 63. TRADE MARKS, INDUSTRIAL DESIGNS, and TIMBER MARKS. ATrade Mark. A GiiNERAr, Trade Mark. A Specific Trade Mark. Refusal of Trade Mark. Industrial Deskjns. Timber Marks. l-r 1 A Trade Mark is any device or name used by a manufacturer or mer- chant to distinguish his own particular goods from those of other merchants and manufacturers. All marks, brands, labels, names, packages or business devices used by a person to mark his goods, may be entered in the trade mark branch of the Department ot Agriculture for his own exclusive use and ben- efit. Trade marks are of two kinds — General and Specific. 2 A General Trade Mark is one that the firm uses on all the goods manufactured or sold by them. Example : The Pure Gold Manufacturing Company of Toronto uses the trade mark " Pure Gold ''on all groceries, spices etc., put up by them. This is a general trade mark. The fee lor registering $30. The duration of a general trade mark is not limited. TRADE MARKS ANP INDUSTRIAr. DESIGNS. =»45 of the Min- laps, charts, s more may IS character 3 A Specific Trade Mark is one used for only one kind of goods. Ex- ample : " R. R. R " is the specific trade mark for Radwuys Ready Rehef, and not for any other preparations, medicines or mixtures made by the same firm. The fee for registering a specific trade mark is $25. The duration of a 'specific trade mark is 25 years. The specific trade mark may be continued indefinitely 25 yeirs at a time. regulations le author is lich goes to igements of ite of regis- ried on free pplications, 4 Refusal of Trade Mark— The Minister of Agriculture may refuse to register a trade mark : — [1] If the proposed trade mark is identical with or similar to a trade mark already registered. [2] If it appears that the trade mark is designed to deceive or mislead the public. [3] If the trade mark contains any immoral or scandalous figures. [4] If the proposed trade mark does not contain the essentials necessary to constitute a trade //lar/:. 5 Industrial Desig'ns— The proprietor of any design may have it regis- tered, and thus secure the exclusive use of the design. Many firms have a special design or drawing tor letter headings, labels, patterns for goods, etc., that they desire the exclusive use of ; they register the design. .-Ml registered designs must be designated by the word " registered," or the letters " Rd." be- ing on the design in some place, to warn others of the fact of its registration. The fee for registering is $5, and the term five years. The design may be refused registration if it contains any figure that is contrary to public order or morality. rer or mer- merchants 3r business trade mark e and ben- 6 Timber Marks— Every lumberman floating or rafting timber on in- land waters of Ontario and Quebec, must register a mark or design that he will stamp in a conspicuous place on all timbers floated by him. The fee for registration is $2. The registration gives him exclusive use of the mark. Et'ery lumberma'n must register his mark within one month of beginning bus- iness. the goods lufacturing "les, spices registering N. 246 AfFlDAVlfS AND DECLMLATtOtfS. CHAPTER 64. AFFIDAVITS AND DECLARATIONS. An Affidavit. The Statement OF Facts. Oaths or Affirmations. Form OF Affidavit. Form of Affirmation. Administration of Oath. „ OF Affirmation. Statutory Declarations. I Form of Statutory Declaration in Proof of Age 1 An Affidavit is a written statement of facts taken in some legal proceeding, sworn or affirmed to by the person or persons making the statement. To prevent the ordinary form of oath or afifirmation being used outside of judicial business, an Act was passed by the Dominion Parliament, limiting the use of the affidavit to strictly judicial work. Any other verifications necessary are made by Statutory Declarations under the Act. 2 The Statement of Facts should be a clear and unequivocal expression in the first person in the narrative form, and divided up into paragraphs, so as to bring out each particular, separately. When drawn up in reference to a suit they are usually headed " In the matter of Smith vs. Jones." 3 Oaths or Affirmations — AH persons having conscientious scruples in reference to taking an oath are allowed to make an affirmation. Such are Quakers, Mennonites, Tunkards, Moravians, etc. The only difference is in form. The crime is the same in each case if a false statement is made, viz., perjury. The oath or affirmation should be taken with due solemnity, stand- ing with the head uncovered. There is one exception — a Jew takes an oath on the Old Testament with covered head. The Magistrate, Notary or Com- missioner should satisfy himsilf that the person taking the oath (the deponent) fully understands what he is swearing to, or affirming to, and if necessary, ex- plain it to him : — (1) When a Gentile takes an oath he should kiss the New Testament. {2) When a Jew takes an oath he should kiss the Old Testament. (3) When any person makes an affirmation he should hold up his right hand. AFFIDAVITS AND DECLARATIONS. H )FOF Age ome legal lakiiig the tion being Dominion ork. Any under the expression phs, so as rence to a fcruples in Such are fence is in lade, viz., tty, stand- b an oath or Com- leponent) Issary, ex- kament. Int. his right 4 Form of Affidavit- Province of Ontario, j I, Edward Henry Horsey, of the township of County of Grey. I Derby, County of Grey, Physician, make oath and TO WIT : (say ist. That — {//ere staie the facts plainly in one or more short clear para^^raphs, numbered jst, 2nd, etc.) Sworn before me at the township of \ Derby, County of Grey, this fifth day \ E. H. Horsey. of March, A. D. 1897. j James Masson, a Commissioner for taking Affidavits in //. C.J. 6 Form of Affirmation- Province of Ontario, { I, David Creighton, of the City of Toronto, County of Grey, \ County of York, Province of Ontario, Publisher, do TO WIT : [solemnly and sincerely afifirm, ist that — {//ere state the facts to be affirmed to, clearly and concisely in paragraphs numbered /, 2, j, etc.) Afifirmed before me at Parry Sound, "1 in the County of Grey, this fifth day |- of June, A. D. 1897. J James Cleland,/. P. for the County of Grey. D. Creighton. 6 Administration of Oath— The Magistrate, Notary or Commissioner says to the deponent : — " You swear that the statements made by you in this affidavit, now signed by you, are true, so help you (Jod." The deponent should answer in some such words as " I'hese statements are true," and then kiss the Testament in confirmation of his statement. 7 Administration of Affirmation -The Magistrate, Notary or Com- rr.issioner says to the deponent : — " You do solemnly and sincerely affirm as you shall answer to Almighty God at the Great Day of Judgment, that the statements made by you in this declaration, now signed by you, are true." The person making the affirmation should answer with his riglit hind up- lifted, " 1 declare the statements to be true." 8 Statutory Declarations are made regarding things that are not at the time subject to judicial incjuiry. They are used for preserving evidence as to the title of land, such as to who had possession at rcrtain ti'nes. when certain persons were born or died, proofs of age, als) di' u i i > 1 >t' newsijipcrs, the accuracy of statements of account or claim, and an ruti i ^>i variety of other 248 SUr.lECTS AND AUV.JiS. |,:i il i ifti' matters. The following is a form such as is used by I nsurance Companies for getting proof of the age of a policy holder. The declaration is administered similarly to the affirmation in such words as — '•You do solemnly declare that the statements made in this declaration subscribed to by you are true." The assent is given thus : "The statements are true." 9 Form of Declaration in Proof of Ag^e— I, Robert IJyron Miller, of the Township of Ivcppel, in the County of Grey, Province of Ontario, \'eoman, Do soi.emni.v Dfxi-are: (i) That I know Krasius Silas Miller, of the City of St. Thomas, County of Elgin, Province of Ontario, whose life is proposed to be insured with the Temperance and (leneral Life Insurance Company of Toronto by Policy No. 6742. (2) 'I'hat being the father of the said Erastus Silas Miller I know his age and history. (3) From my said means of knowledge I know the said Erastus Silas Miller was born in the township of Keppel aforesaid, on or about the tenth day of June, A.l). i860. AnJ I make this solemn decliration, conscientiously believing it to be true, and knowing it is of the same force as if made under oath and by virtue of the ' Canada Evidence Act 1893.'' Declared before me at Keppel, 1 R. B. Miller. in the (Jounty of Orey, this fifth - day of March, A.D. 1897. J John RuTHiiRKORD, /. F. for the County of Grey. CHAPTER 65. j 'Thk Suhject. The Alien. Subjects by Birth. ri BY Marriage. ti i!Y Naturalization. Oath ok Residence. Oath of Allegiance. Rights ok Aliens. DisAiiH.iTiES OK Aliens. Expatrlvtion. Repatriation. The Alien's Relation to the Laws 1 The Subject In Canada a subject is a person who lives in Canada and is under protection of the British Crown, and owes his or her allegiance SUBJECTS AND ALIENS. AND THE NATURALIZATION OF ALIENS. ipanies for ministered leclaration statements County of , Thomas, t>e insured foronto by [ know his astus Silas the tenth to be true, irtue of the M ILLER. E Laws Canada lUegiance !?tfHjfiC'fS AND ALIENS. 249 to the ruling Sovereign of dreat IJrilain, and to the representative of the Sov- ereign/in Canada. British subjects arc such: (i) By birth. (2) By naturalization. ^ Brifish subjects may either be resident in British r)ominions or in a foreign country. Those residint; in this country need no reference. Those residing in other countries may be:— (i) Consuls or agents of the Government residing in foieign coun- tries as Representatives of the Covernment. (2) Persons living in other countries or engaged in trade or com- merce there, either as agent or principal. (3) Those travelling in foreign countries whose residence is only temporary. 2 An Alien is a subject of a foreign country who does not claim protec- tion from (Ireat Britain, nor owe any allegiance to the reigning Sovereign They are of three kinds: — (i) Consuls, officers, agents, etc., of other countries living in Canada and acting for their own country officially. (2) All persons living in Canada who are resident for purposes of trade, or are living and holding property here, but are still in allegiance to a foreign power. (3) All persons living in other countries who are not British subjects are aliens. 3 Subjects by Birth— All persons born within the British Domains, except those born of alien parents that are agents and consuls for other countries, are British subjects. Childern born of parents who are British Subjects, who are British consuls or agents, residing abroad, though born in foreign countries, are subjects by birth. 4 Subjects by Marriage — When a woman that is an alien marries a British Subject, she becomes a British subject by marriage. A woman who is a British subject and marries a foreigner, becomes expatriated, that is, be- comes a foreigner, an alien, the same as her husband. 6 Subjects by Naturalization— Those persons who are subjects of other countries who come to reside in Cunada may, after three years residence in the country, take the oath of allegiance to the British Sovereign, and enjoy all the rights and privileges of a natural born subject. The following are the i!»' ?]|' ' 250 SUnjECTS AND AI.IKNS. forms of oaths of residence and allegiance. They may be administered by a Judge or Justice of the I'cace, and a CLTlificate is granted and fi'cd in court. He then becomes a subject by naturalization. 6 Oath of Residence. Dominion of Canada. County of Bruce. TO wit: resident in any foreign country. Sworn before me at Walkerton, in the County of Hruce, this 5th day of March, f I, Herman ^fackinson, of the Township of I Kklerslie, County of liruce, gentleman, make J oath and say, that I have resided three years in I this Dominion with the intent to settle therein, without having been, during that time, a stated A. 1). 1897. J H. Mackinson. J. W. Bowman, J. P. for the Ccunfy of Bnicf. 7 Oath of Allegiance. Dominion of Canada. County of Bruce. TO WIT : I, Herman Mackinson, of the Township of Elderslie, in the County of Bruce, gentleman, make oath and say, that 1 do sincerely promise I and swear that I will be faithful and l)ear true I allegiance to Her Majesty Queen Victoria (or reigning Sovereign for the time being) as lawful Sovereign of the United King- dom of Creat Britain and Ireland, and of this Dominion of Canada, depend- ent on and belonging to the said Kingdom, and that I will defend her to the utmost of my power against all traitorous cons[)iracies or attempts whatsoever which shall be made against her person, crown, and dignity, and that I will do my utmost endeavor to disclose and make known to Her Majesty, her heirs or successors, all treason or traitorous conspiracies and attempts which I shall know to be against Her or any of them, and all this do I swear without any equivocation, mental evasion or secret reser^-ations. H. Mackinson. Sworn before me at Walkerton,^ in the County of Bruce, this fifth - day of March, A. D. 1897. j J. W. Bowman, /. J\ for the County of Bruce. 8 Rights of Aliens — livery alien may act in the same capacity as a sub- ject, and enjoy the same rights as a subject so far as the holding of Real Es- tate and Chattels are concerned. He may buy, and sell, and trade with equal freedom. He can sue and be sued. He can convey and transmit Real Es- tate, and hold shares in Building Societies and Joint Stock Companies, etc., the same as a subject. He is just as free in all matters of trade and com- merce as a subject, except in the ownership of ships, and occupying the po- sition of a director of a bank. stcrcd hy a ;d in court. Dwn?hip of nan, make ee years in tie therein, le, a stated CKINSON. Htuce. fownship of gentleman, rely promise id hear true Victoria (or Tiled King- a, depend- her to the whatsoever lat I will do , her heirs ith I shall without any CKINSON. Bruce. ty as a suh- f Real Es- w'ith equal nit Real Es- panies, etc., e and com- ing the po- wir.l.s. ?S' 9 Disabilities of Aliens --'I'hough Aliens enjoy frtedoni of trade almost as much as subjects, they have some disadvanlages. of which are the following; (i) An alien cannot hold shares in any liritLsh ship or vessel, ncr be a dirictor o'" a Tank. (2) He cannot serve as a juryman. (3) He cannot vote at an election. (4) Jle cannot hold .Municipal or I'arliainentary ollices. 10 Expatriation takes place when a British subject renounces his allegi- ance to the British Sovereign and becomes a subject (jf a Icireign I'mver. 11 Repatriation takes place when a person, who was once a British sub- ject and was expatriated and became an alien, takes the oath of allegiance and becomes, once more, a liritish subject. 12 Tlie Alien's Relation to the Laws— .Miens residing in Canada are subject to all the laws of the country, just the same as subjects, with one ex- ception. They may sue and be sued, and may be punished for all crimes against society the same as a subject. An alien can never be found guilty of treason as a subject can. What would be treason in a subject would be sim- ply a felony in an alien. CHAPTER 66. WILLS. Dr.i'iNrnoN. NA.Mr:s.\ND Definition ok I\\rtie.s. Who May Draw a \\\\\.. Wn HN A ^\'IM.TAK^;sl^M■Kc r AS A Conveyance. i'RovisioNs or A W II.I.. Revocation of a Wii.i,. cokkkctions ina wli.i.. (JUAKITAl;I,E HkcJUKST.S, Etc. -j In Lieu of Dower. F(9rm of a Wii.i,. Provisions ac.ainst Liticatiox. 'I'lIF, SiG.MXO AND AtTICSTATION OF A \Vll.I.. Readinc; AND Filing of a \\\\.\.. Sundry Points. Setting Aside A \Vii, I.. ^ /■ CiiANGiNf; A Wii.i.. Form of Conicii,. / 1 Definition — A ^Vill is a written instrument by which a person gives directions as to how his property is to be disjjosed of after his death. Al »$» WILLS. manner of real estate, debts, accounts, personal pr(j|ierty rhoses in action, etc., may be disposed of by will, in just sucli niunner as the owner desires. In order to make a will, llu' following,' coiidilions must exist: [ij 'I'lie person must be of tlie full aj^e of twenly-oni' years. [2] I le nuist be the owner of the property he intends disposing of. [3] He must be of sound mind and not otherwise incapable of making a contract, [4J He must be free from constraint, restraint, or undue influence. 2 Names and Deflnition of Parties — I'lie relation of the various parties should be clearly in the mind (jf every |)erson so that he can draw a will either for himself or another on the shortest notice. The Testator [feminine, 'iestatrixj, is the name given to the person who makes a will, i.e., the person wlio signs it and disposes of his property by it. An Intestate is a person vho dies without making a will, and whose pro- perty has to be distributed by an administrator ai)pointed by the Surrogate Court. 7'/ie //eir, Legatee, a7ul Devisee are names of any person who receives property under a will. The Witnesses are the persons who are present and see the will executed by the testator, and sign their names after he does and in his presence and in the presence of each other. [1] There must be at least two witnesses. [3] A legatee should not be a witness as he would then lose his legacy 3 Who May Draw a Will?— Any person who can write in a plain straightforward maiuier. the desires of the testator. No legal officer is re(iuired — simply ht'o or more witnesses who are not interested parties, 'ihe testator may draw his own will if he chooses. Tw(j things only recjuire special atten- tion in connection with the drawing of a will: [1] That it give a clear, explicit statement of how the property is to be divided. [2] Have the statement witnessed by at least tsvo witnesses, who slgu in the presence of the testator and of each other. ^ 4 When a Will Takes Effect as a Conveyance will is not binding or valid during the life of the testator; it is only after in luatf .liat it goes into effect. tion, etc., In order in of". )r nmking ,'nce. L' various 111 draw 11 ;rson who y l)y it. hose pro- Surrogate o receives executed e and in lis legacy n a plain re(iuired e testator :ial atten- y is to be \\IU ' -!{■ IS not .tl iial it WM,I,H. •53 5 Provisions of a Will -It should si.ue,— [ 1 1 Tiie full name, address and calling of the testator. I .' I That this is the /ait will and testament. I^l 'I'hat it revokes former wills made. [4] It should give directions as to [layment of debts, expenses, etc. [5] The divi.>«ion or conveyance giving full particulars of every separate bequest. [7) Executors should be appointed. [7] It should be dated, signed and [irofierly witnessed. The dating is a very important item, as by the date it can be shown which is the last and binding will. 6 Revocation of a Will -A will onre made, continues to subsist unless: [il It be destroyed. It is not sufficient to tear the name off, as the ([uestion might arise, Who tore the name off? To burn it, is [jcrhaps the best. If however, the testator wishes to preserve it, let him write across it a revocation witnessed by two persons. [2] A will is revoked in Ontario by the subsequent marriage of the testator unless it is declared in the will that it is made in contemplation of such marriage. A will revoked by marriage may afterwards be confirmed and made legal such confirmation should be signed and witnessed by two credible witnesses. 7 Corrections- (Ireat care should Le exercised at the time of signing a will, the witnesses putting their initials opposite every word either interlined or erased with the pen. In no case should anything be scraped out or rubbed out— the surface of the paper should not be disturbed. If the will consisted of several sheets the Witness should initial each sheet. 8 Charitable Bequests— In Ontario all bequests for charitable purposes and for churches, etc., should be made at least six months before the death of the testator, if not they can be set aside in the courts. 9 In Lieu of a Dower — When a specific beijuest is made to a wife it is customary to state in it that it is in lieu of dower. 10 Form of Will This is ihe last Will and Testament nfmc, Lewis l.udlow, of the Town of Orilliii, in the County of Simc.je, and I'rovince of Ontario, ('iciitleman, mnde this first Hay of Dei-embcr, in the year of our Lt^rd, one thousand eight hun- dred and niiieiy leven. Kl til m 254 WILLS. T Rkvokf. all former Wills or other Testamentary Dispositions by me at any time heretofore n.ade and declare this only to be and contain my last Will and 'J'estanient. I DiKKCT all my just del)ts, funeral and Testamentary expenses to be paid and satisfied by my I'^xecutors hereinatier named, as soon as conveniently may be after my decease. I GIVE DEVisK AND iiEnUKAin all my Real and Personal Property of which I may die possessed in the manner following, that is to say: I CIVIC, Dkvisk anii i;i:(,iUKAi'ii to my son, Robert Ludlow, Lot No. 4 in the fifth (Concession of the 'i'owiisiiip of Arteinosia, in the County of (irey, and Province of Ontario, containin;j; by admeasurement One Hundred acres, be the same more or less, subject to a certain legacy of Eight Hundred Dollars ($800) to be paid to my daughter, Louisa Ludlow, in eight ecjual annual in- stalments of One Hundred Dollars eacii without interest, the first of such payments to become due and payable one year after my decease, said Legacy to be considered the first charge on the said lot. I r.iVK, DKVISK, AND hkqim'-ATII to my daughter Louisa Ludlow aforesaid a legacy of Light Hundred Dollars hereinl)efore provided for, also my Horse, Carriage, Cutler Harness and Robes, and all other articles pertaining thereto. I GIVE, DKVisE AND HEQUEATH to my beloved wife, Maria Jane Ludlow, Lot No. 12 on the West side of Division Street in the town of Orillia, County of Simcoe, Province of Ontario, containing by admeasurement One quarter of an acre, be the same more or less, which is my [)rescnt residence, together with all the ajipurtenances belonging thcret*.), with all my Household Stuff, Wearing Apparel, etc , of whirh I die possessed. I GivK, DKVisK AND iiKiju K ATii to the Congregation of the Methodist Church of Canada, worsiiii)iMng on West Street in the said town of Orillia, the sum of One Thousand Dollars, and the receipt of the treasurer and pastor for the time being shall be sufficient discharge to my ICxecutors for the same. .•\i,i, the residue of iny estate not hereinbefore disposed of I give, devise and beiiueath unto my beloved wile, Maria Jane Ludlow. And I nominate and appoint Robert McDowall and D.ivid Williams, both of the Town of Orillia aforesaid. Gentlemen, to be Executors of this my last Will and Testament. In WrrNKss whereof I have hereunto set my hand the day and year first above written. Lewis Ludlow. Signed, published and declared by the said Lewis~ Ludlow, the Testator, as and for his last Will and 'i'es- tament in the presence of us who both present to- gether at the same time in his presence at his request and in the presence of each other have hereunto sub- scribed our names as witnesses. I. W. M( Garvev, Fred. Barher, Witnesses. 1 1 Provision against Litigation -Many wills are dragged into court by dissatisfied or coveteous friends and relatives for the purpose of getting a share in an estate contrary to the wish of the testator. Others who are not by me at last Will be paid iveniently of which . 4 in the ;irey, and acres, be d Dollars innual in- t of such id Legacy foresaid a ly Horse, g thereto. dlow, Lot County of irter of an ither with ', >\'caring St Church he sum of r the time cvise and ims, both my last year first i,o\v. RVEY, lER, tnesses. nto court getting a are not wii,r,s. 255 remembered will set up a claim that "the testator was not in his right mind, or he would have remembered me," and on this i)retext seek to break the will. It is a very wise provision to jjut a clause in a will providing that any person who is the cause of any litigation or dispute in icfcrcnce to the will should get nothing. Form of Pro r is ion Preventin'] Liti-jation. I fjrther provide that should any person or persons mentioned in this will, or any otiior person or persons not mentioned Iicrein, commence, institute or ])rosecute any suit or action at law, either on behalf of the said parties mentioned or not mentioned, or on belialf of any other |)erson or persons, for the purpose of changing any of the provisions of tliis will, or fot tho purpose of securing to any such person or persons any benefit not expressly provided for herein, such person or persons sliall not receive any such benefit whatever, and should such person or jxTsons be granted any legacy or emolument here- in, then such becitiest shall be void and of none effect, and such legacy shall be divided e(pially among the remaining legatees. 12 The SigTling- and Attestation— Special attention is called to the form of signature and attestation of the foregoing form of will. Notice care- fully: [i] That the testator should sign in the presence of at least two wit- nesses. [ 2] That they should sign in his presence and in presence of each other. [3] That they siiould sign at his rcfpiest, and both testator and wit- nesses sign at the same lime. [4] The witnesses ma) be any persons of sutificient age to understand what they are doing, so long as they are not receiving any direct benefit from the will. They may or may not be executors. 13 Reading" and Filing" of a Will -As soon as conveniently may be after the decease of the testator, the will should be read in the presence of the interested parties, and then filed in tlie .Surrogate Court for the county in which deceased resided. The will should be accompanied by:— (1) An af'filavit of one or moie of tlie witnesses as to the execution of the will. (2) A full inventory of all the assets and eff^'Cts of the deceased show- ing their estimated value duly verified by alhdavi'. (3) An aftidavit ih.it jjueh person or persons appo:i ted by the will as executors are willing to act as such and that they will divide the estate accor- ding to will, -I i 1 m' HI I 256 wiLr,s. (4) An affidavit of pUglit. Tliis is usually made by a witness or some person who had the will in custody, to the effect that the will is now in the same condition as when siji;nfd by the testator. The necessary forms for the above will be furnished by any clerk of the Surrogate Court. 14 Sundry Points— (i) Soldiers and seamen in actual service may betjueath their personal property by simply signing a written statement of how it is to be disposed of, without the usual formalities regarding attestation. (2) A legacy to a friend lapses, or is void, if he dies before the testator. (3) A legacy to the testator's child is not void if he dies before the testator if he has any living children. In such a case the property would go to the grandchildren. 15 Setting Aside a Will -A will may be set aside or "broken" for the following reasons, viz: . (i) If it was made under duress or undue influence. (2) If the testator's mind was unsound at the time of making it. 16 Changing" a Will— If a will has been made and does not suit the maker, it is better to make a new one and revoke the old one. If, however, the testator wishes to make a few minor changes, he may do so by adding a codicil to his will. 'I'here may be several codicils, so long as not inconsistent with one another. The codicil should very clearly state: — (1 / That it is a codicil and describe accurately the will it belongs to by giving date and other particulars of the will. (2 I It should be signed and witnessed exactly as a will is, using the word "codicil'' where "will" is used. (3) If it gives a legacy to one who already has a legacy it should state whether t'us is a second beciuest or simply a confirmation of the first. (41 If adv.mces have been made during lifetime to a child on account of a legacs', such amounts should be carefully noted in the codicil or indorsed on the will itself if no codicil is made. (5) It may make provision for the disposal of property acquired after a will was made, or regulate the bequest in a will where some property mentioned in the will was lost or disposed of. (6; It should also confirm the parts of the will that it does not change. 17 Form of Codicil This is a codicil to the last will and testament of me, Louis Ludlow, of Orillia, Countv of Simcoe, Province of Ontario, gentleman, which will bears I 3 or some ow in the erk of the r personal sposed of, le testator. before the would go ;n" for the git. lot suit the ", however, y adding a iconsistent belongs to g the word ould state 1st. n account >r indorsed red after a mentioned ot change. .udlow, of will bears EXECUTORS AND ADMINISTRATORS. 257 i.iiwis Ludlow. .Samuel J. Somkrville. VViLi.ARD B. Stone. lowlinesses. date the first day of December, A. 1). 1897, I revoke the becjuest to my daughter, Louisa Ludlow, of my horse, carriage, cutter, harness, robes and other articles belonging thereto, and give and be(|ueath them to my grandson, Thomas Ludlow, eldest son of Robert Ludlow, for his own absolute use and benefit forever. In all other respects I do hereby confirm my said will this tenth day of September, A. D. 1 89S. Signed, published and declared by the said L-wis A Ludlow, the testator, as and for a codicil to his last will and testhment, in the presence or" us whj both present together, at the same time, in his presence, at his request, and in presence of each other have hereunto subscribed our names as witnesses. CHAPTER 67. Executor. Intestate. Administraior. Who Mav lu-: an Executor. Who May he an Administrator. Administrators vor Intestates. Administrators with a Will Annexed. Thk Executor's Trust. '1'he Administrator's Trust. LlAMILlTIES OF ExECUTORS, ETC Duties oe Executors, etc. 1'aVMENT ok LlAUILlTIES. EXECUTORS. AND ADMINISTRATOmS. 1 Executor (Feminine, Executrix), is a person appointed by the Will of a testator to manage the estate of the said testator after his decease. If one person only is named, he is sole executor. Usually two or more per- sons are named. They attend to all the business of the estate such as payment of debts, sale of property and division of property according to the Will. 2 An Intestate is a person who dies without making any disposition of his property by will. 3 An Administrator is a person ap[)ointed by the Surrogate Court to manage and settle up the affairs of a deceased person. .Administrators are of two kinds, viz : — (i) Administrators of estates of intestates. (2) "Administrators with a Will annexed." Administrators and executors are fome times called "personal representa- tives." They are special agents acting for the deceased person in the settlement of his business affairs. 258 EXECUTORS AND ADMINISTRATORS. 4 Who May be Executor? — Any person who could be appointed to act as his agent during his lifetime, may be appointed by the testator to be his executor. He may l^e one of the heirs or legatees named in the VVill, or any other person having the confidence of the testator. In Ontario there are a number of Joint Stock Companies, known as "Trust Corporations," authorized to act as executors. They are incorporated for that purpose. They are in that business for the purpose of making profit. Idiots and lunatics are perhaps the only persons incapable of being executors or administrators. n « '! SSr i llli- 5 Who May be Administrators?— The Surrogate Court has consider- able discretion in making the appointment; usually, however, the nearest ot kin is named. "Trust Corporations" are frequently appointed as administrators. 6 Administrators for Intestates draw their authority to act from the Surrogate Court and take their instructions from the court, and use their best endeavors to beneficially realize on the assets of the estate, pay the liabilities and expenses and distribute the net amount of it according to law. 7 Administrators with a Will Annexed are such as are appointed by the Surrogate Court to manage an estate and distribute it according to a Will. It is necessary to make such an appointment under the following cir- cumstances, viz: — (i) When the testator does not appoint executors in his Will. (2) When the executors named in a will refuse or neglect to act. (3) When the executors die or become incapable of acting as execu- tors before the death of the testator. 8 The Executor's Trust— An executor derives his powers from the test- ator through the Will. His appointment is evidence that the testator had implicit confidence in his ability and integrity and no bonds are required from him for the faithful performance of his duties, unless the testator requires them by stating so in the Will. His trust is a matter of honor, except, that he is required on entering on his duties, to make oath that he will discharge his du- ties faithfully, and distribute the estate in accordance with the desires of the testator expressed in the Will, so far as they are not contrary to law. 9 The Administrator's Trust— An Administrator derives his authority from the Surrogate Court, and is required to give bonds for the faithful dis- charge of his duties in the settlement of the affairs of the estate and the distri- bution of it according to law. \m EXKCUTORS AND ADMINISTRATORS. 259 )pointed to )r to be his /ill, or any there are a authorized ley are in ire perhaps IS consider- arest ot kin nistrators. ct from the e their best le liabilities s appointed wording to a )llowing cir- 11. ■^i to act. as execu- )m the test- stator had uired from uires them that he is rge his du- ires of the s authority aithful dis- the distri- 10 Liabilities of Executors, &c. In Chapter 7 sec. 3 subsec. i, it is stated that; — "No action shall be brought whereby to charge an executor where an executor or administrator promises to answer for d uuages out of his own estate unkss. the promise is in writing, signed by him." An executor or administrator should be careful tluit he does not bird him- self unwittingly to pay the dobl of an e"Jt.ite from his own pro[)erty. In Chap- ter T,i) sec. 4 subsec. 4, special directions were given regarding the signature of an agent. These are applicable here. The Executor or .Adminis-trator will be- come personally liable on the contracts and obligations, bills and notes of the estaie unless he gives notice to ihe payee by such words as "I [)romise to pay from the funds of the estate of A 15 if they are sul'ficient."' 1 1 Duties of ExGGutors and Administrators may be summarized as follows : — (i) To have the deceased decently buried. (2) To have will admitted to prob.ite as outlined in section 13 of Chapter 67. (3) To take possession of the property of the testator. (4) To collect all debts due the estate. (5) To pay funeral and testamentary expenses and all liabilities of the deceased. (6) To distribute the estate, having regard to bequests of special articles as well as the general distribution of the estate. (7) To render a full account to the court, of the affairs and business, of the estate when it is wound u[>, or at different times during the winding up, if the time e.xtends over a number of jears. The duties of an administrator with will annexed, are the same as an execu- tor, and those of administrator of an intestate are much the same except that he distributes the estate according to law. 12 Payment of Liabilities — The various claims against an estate rank as follows: — (i) Charges of last sickness and funeral and testamentary expenses. (2) Expenses of winding up, including executors' or administrators' fees. (3) Debts due the Province. (4) Mortgages and Liens on property. (5) The ordinary unsecured creditors. jl li' ; t ,11 ff I'! INDEX. Abstracts, 1,^4. Acceptance of contract, 20. of drafts, 64, by mail, 81. classification of, 64. conditional, 66. forms of, 65, 66, partial, 66. qualified, 63, 66. Accomodation drafts, 81. notes, 57. Accord and satisfaction, 38. Account, 9.;, 95, 96. current account — Deposit on, 237. of purchase, 99. of sales, 100. Saving's Bank, 237. Administration of oaths, 247. Administrator, 258, 259. Administrators for Intestates, 258. with Will annexed, 258. Affidavits, 246. Affirmations, 246, 247. Agency, 155, 157, 158. Aliens, 18, 249. naturalization of, 249, 250. Annulment of sales of personal prO' perty, 116. Arbitrations, 38. Associations, 177. Assignment of Mortgage, 148. Attorney, Power of, 156. Average, general, 225. Awards, 38. Auctions, 233. Bailment, 217. for hire, 220. Baggage, 227. Bank circulation redemption fund, 239. drafts, 83, 240. notes, 83. Banking, 235—240. Bequests, charitable, 253. Bidding at auctions, 234. Bill, 96. Bills of Exchange, foreign, 60, 64, 65. inland — see drafts. of Lading, 87, 222. of Sale, 1 10. Boarding houses, 232. Bonds, coupon, 84. Broker, 161. Ca'-rier, common, 226. Carrier's liability, 227. responsibility, 229. Certificate of deposit, 84, 238. Changing of Wills, 256. Charter of Joint Stock Companies, 177. Charter Party, 223. Cheques, certification of, 76.^ definition of, 61, 74. Dominion Government cheques, 240. forged, 75. form of, 74. negotiability of, 73. "raised," 76. use of, 75. crossed, 77, 78, 79. Collection, 24c. Commission, 219. merchant, 160. Companies, Joint Stock, 178, 182. dissolution of, 186. liabilities of, 186. management of, 180. organization of, 178, powers of, 181. Compounding a Felony, 14. Contract, 11, 47. indorser's, 73. by corporations, 18. by married women, 18. consideration in contracts, 22. executed, 25. failure of, 25. gold, 24. illegal, 24. impossible, 25. insufficient, 24. valuable, 24. n » II consent, 19. corrections, erasuies, &c., 46. description of parties, 45. disaffirmance of, 17. drawing of, 45- erasures in contract, 46. executed, 12. execution of, 40, 41. executory, 12. forms of, 47. fraudulent, 26. illegal, 13. immoral, 14. interpretation of, 32. in restraint of trade, 14. joint, 1 1, joint and several, 12, legal' '.V made on Sunday, 14. mutual consent in, ig. oral, 29. 11 *.'4l,. INDEX. 26] inies, 177. cheques, 240. 182. :ts, 22. ed, 25. of, 25. 24. 24. ibie, 25. ient, 24, e, 24. kc.,46. 45- Contracts, parties to, 15. n n — competent, 15. tt ff —incompetent,' 15, possibility, 13. payment of, 35. ratification of, 17, recession of, 41. requisitefi of, 12. rights, defences, &c , 39. sealing^ of, 45. settlement of, 35. severable, 34. signature, 45. signing by mark, 46. specialty, 30. time on, 21, void, 1 1. voidable, 11, 26. witness to, 46. written, 30, Co-partnership— see partnership. Copyright, 215. Corporations, 19, 174. associations, 177. capacity for contracting, 19. ecclesiastical, 175. eleemosynary, 176. incorporation of, 176, Joint Stock Companies, 174, 178. municipal, 175. non-trading, 19, 175. trading, 19, 175. Credit, letter of, 86. " note, 97. Days of Grace, 49. Debts, collection o/, 100. Declaration, statutory, 247. Deed— Composition Deed, 37, 104. form of, 136, 138, of gift, 140. Poll Deed, 136. Quir Claim Deed, 136, 140. Real Estate Deed, 136. Trust Deed, 136. Warranty Deed, 136. Demurrage, 224. Deposits, 237. Deposit receipt, 84, 238. Devisee, 2.^2. Disabilitiesof aliens, 257. Designs -industrial, 245. Discount, 106. Dissolution of Joint Stock Company, 186. Dividends, 185. Dower, 127. in Manitoba, 127. Drafts, or Bills of Exchange, 60, 61, 62. acceptance of-see "Acceptance," accommodation drafts, 81, bank drafts, 83, 240. dassitication uf drafts, Ji. Drafts'definition of drafts, 60, demand draft, 61. . parties to, 62. sight draft, 62. Drawee, 62, Drawer, 62. Due Bills, 91. Duress, 20. Entries in Merchants' books. 04. Estate— real, 135. ^ Eviction, 215. Exchange, 240, Executor, 257. duties of. 259. who may act as, 258. Expatriation, 251. Factor, 1 60, Fee— simple, 126. Filing of Wills, 25 s. Form of contract to build a house, 47 general— of contract, 47, l*orm of account, 97. accouut of purchase, 99, » of sales, 100. accommodation note, 57. acceptance, 65. // conditional, 66, i> qualified as to time, 66. " partial, 66. »' by mail, 81. affidavit, 247. " of witness, iii, " to Bill of Sale, iii. affirmation, 247. agreement for sale of land, 131. application for shares, 182. articles of partnership, 166. " " registnitionof, 168. assignment of mortgage, 148. It of policy, 199. bill of sale, no. bill of lading, 223. bill, 96. certificate of Torrens Title, 152. chattel note, 93. chattel mortgage, u8. charier party, 223. clause in will preventing litiga- tion, 255. clause in de.d subject to mort- gage, 139. codicil to will, 258, composition deed, 104. contract to build a house, 47. coupon, 86 bond. 85. crossing of cheques, 78, 79. declaration in proof ( f age, 248 deeds, 137, 138, 140. depoitit receipt, 84, 262 mnEx. ^'1 "1 form ofdischarge of morfgage- -chattel, 12, II of morlffjige, 150. draflH— (JiMiiaiul, bi. II — sin-lit, (ii. ilue bill, i}2. farm lease, 2\2, foreign bill of exeliange, 6,3. guarantee of pa)-ment, 181). II I'oilei'tion, i8g. II fidelity, i8c). II continuing, 191. hypothecation, 211. 1. O. U., <)i. indorsement, 69, II blai.k, 70. II full, 70. // full qualified, 70. indorsement, i|(ialifi>'d, 70. II restrictive, 70. II for specific purposes, 71. II of guarcintee, 72. invoice, 95 invi)ice of shipment, 97. joint note, 54. ^ " ^and several note, 55. letter of credit, 86. lien notes, 58. monthly statement, 98. mortjiages, chattel, 118. /' Real Kstate, 142. note — negotiable, 52. n — negotiable by indorsement. // — non-negotiable, 53. notice of protest, 90. oath of allegiance, 2-;o. oath of residence, 250. order, 92. policy of insurance, 197. power of attorney to subscribe for slock, 184. power of attorney, 156. pnUest, 90. provisional receipt, 196. proxy, I So. will, 253, receipt, 102, registration of dissolr.:ion of part- nership, 173. release, 104, renewal of policy, igg. " " chattel mortgage, 123, II II Torrens Sy stum, 153. s'ips of instruc'ion re non-accept a ice of draft, 67. statutory le.'ise, 211. ' ■ stock book, 183. II certificate, 183, transfer certificate, 183. If of Torrens Title, 153. Frauds— statute of, 27, 28, 108. Freight— transportation of, 228. 4G''''>L«?, days of, 49. Guarantee, 187, igi. continuing, 191. tif colleclii>n, 189, of fidelity, 189. of payment, 189. Guarantee, 30. Guest, 231. duties of, 232. Heir, 252. Host and Guest, 230, 232. Houses -boarding, 232. Hypothecaliori, 239. Host's duties, 231, * liabilities, 231. Idiots -incapable of contracting, 16. Indians « ,1 « 17. Immoral contracts, 14. Inlanis incapable of contracting, 17. Intoxicated persons incapable of contract- ing, 16. Indemnity, 206. Inilorstment, ()8, 71. < bl;ink, (k). for s''<-.-cific purposes, 71. full, 69. II qualified, 70. methods ut', 68. of guarantee, 72. •' purposes of, 68. qualified, 70. restrictive, 70. rciiuisites of, 68, summary, 71. Injimc'ion, 41. I. o. u.,91. ■ Insurance, 193, 201. accident, 206. fire, 195. in several companies, 202. life, 203. marine, 201. Interest, 105. bank rate, 238. compound, 106. ' insurable. 2C14. , 'egal, 55, 106. { Intestate, 222. Invoices, 915. ' . , . of sliipment, 97, ' Jettisoned property, 225 Joint Stock Companies- Judgments, 40. , Lading — Hill of, 87, 222. transfer of, 222. Landlord and Tenant, 211 Law— common law, 10. definition of law, 9. merchant, to. see companies. INDEX. 26s ing, 16. 17. ting, 17. i of contract- ion. companies. Law — sources of, g. statute, 10. Leaj^e, 211. Legatee, iji. Letter of Credit, 86, 87. L ability— agents', 159. Ciirriers', 227. ' double in banks, 182, 236. of host, 2.31. of Joint Stock Companies, 186. of parties to drafts, &c., 83. of principals to agents, 158. "f " to third parties, 1 159. of stockholders, 181, 182. License, auctioneers', 234. Lien auctioneers', 234. II carriers', 229. II hosts', 2;\2. II on property, 208. Lien notes, 58. authority for, 59 Limitations -statute'of, 42, 240. Live stock— carriage of, 230. Loaning of money, 238. Loans — maritime, 225. Lodgers, 216. Losses— adjustment of, 200. Losses— adjustment of losses in jettisoned property, 225. Lunatics, 16. Notes, promissory interest bearing, 55. " joint note, 54. II joint and several note, 54. " lien note, 58. II lien note of Manitoba, 60. II negotiable by delivery 52 » negotiable by indorse- ment, 53. " non-negotiable, 53. « parties to, 52. forged, 36. chattel, 93. O^ths, 217, 218. Uath of allegiance, 250. Oath of residence, 250. Order, 92. Orders— P. O., 83. Overdue bills. 73. Marks— trade, 243. Marriage -promises in consideration of, 31. Married women, 18, 206. Master and servant, 206. Merger, 38. Mortgages— chattel, 116, 142,220. assignment of chattel, 124. discharge of, „ 1 24. Form of, 118, 153. limitation of, 117. renewal of, 122. registration of, 117, 146. real estate, 125. II assignment of, 147. II discharge of, 149. II foreclosure, 145, II provisions of, 1^46, 147. II sinking fund, 144. II transfer of, 147. II Torrens System, 151, Mutual promises. 12. Naturalization, 250. Negotiable paper) see paper. Notes, promissory, 51. II accommodation notes 56. // customers' notes, 57, 5,^ II bank notes, 211, 83. // definition of, 51. n individual note, 54. n innocent holder o£, 53, paper, negotiable,8i. It definition of, 48. II cheques— see cheques. « compuiationof lime, 50. « classes of, 49. " discharge of, 87. II dishonor, honor, 81,88. // indorsement — see In- dorsement. n indorsers' contract, 73. II ''kite flying," 82. II maturity of, 50, 51. n necessary conditions of, 82. // negotiation of, 68. ff overdue bills, 73. n ,Jarties,49. II patent rights bills, 74. II place of payn)ent, 82. II presentment, 89. // promissory notes — see notes. a title. 51. Parties to a will, 252. Partner— by implication, 169. by oral contract, 164, by written contract, 164. general, 163. limited, 163. nominal, 163. silent, 163, Partnership, f6i, 165. articles of, 166. contribution of capital, 165. definition of terms, 162. different kinds of partners, 162. division of profits, 165. dissolution of, 171. how formed, 163. powers of partners, 170. Passengers— transportation of, 226. Patents, 242. 3^4 tSDP.X. Patent, forfeiture of, 243. sale of, 242. Pawnbroker, 220. Payoe, <)2. Policy-- assiffnnient of, ic)6. canceilalioti of, i(>8, insurance, 19,?, 19O, 202. transfer of, 200, Primajfe, 2J4. Promises niutual, 12. Property -finding of, 218. personal, 1 1, 107. II sales of 107, 1 12. plt'dffe of, 2 1 (). real, 10. rights of, 10. Protest, 90. notice of, <)o. no protest, 67. pate of insurance, 194. Real estate. 125, i.'S, 151. deeds — see 'deed." mortgages, 142, [57. ownershiii, 12b, 1J7. rights to, 12O, 128. sales of, 128, 135. Recf^pts, loi. deposit receipts, 84, 238. provisional receipts, i()6. renewal of Insurance, 199. warehouse receipt, 87. Reden)ption fund, 240. Registration of articles of partnership, 168. chattel mortgages, 1 1 7. " II renewal, 124. discharge of chattel mort- gage, 124., documents respecting titles of real estate, 1,^4. notice of dissolution of part- nership, 1 7 J. order of, 134. Releases, 37, 104. Rent, 214. distress for, 214. ground rent, 216. Repatriation, 25 i. Revocation cf wills, 253. Rights of aliens, 250. between sureties, 192, creditors' rights, 191, 220. ilebtors' rights, 220. guarantors' rights, 191. of way, I 26. gale— auction, '233. bill ot\ I II). Sales — conditional 114 ofgood> in transit. 1 15 Sule.sof, patents, 242. personal property, 107, 112. II II annulment of, 1 16. II II by sample, 1 14. II " executed, 1 13. I' II executory, 113. 11 II on trial, >. 13. Salvage, 224. Seal, 30, 45, 133. Secui ily— collateral, 219. Servant— mat-ter and, 2c6. Set otr, 41. Shipping, 221 — 226. Societies, 177. Statement monthly, 98. Statute of frauds, 28, 187. Statutory declaration, 248. Slock Book, 183. cancoU«tion of, 185. guaranteed, 180. issue of, 182. joint stock companies — see com- panies, preference stock, 182. tr.iiisfer of stock, 184. Stoppage in transitu, 1 15. Subjects' 249. Surely, 49, discharge of, 192. Suretyship, 30, 187. Telegraphs, 232. Tenant at will, 145. Tenant -landlord and, 210. Tender, 39. 'egiil. .19- Terms — technical terms in contracts, 32. Testator, 252. Tickets — passengers, 227. Time — computation of time in negotiable paper, 50. Title ot negotiable paper, 51, searching of, 134. Towage, 224. Trade Tiiarks,' 244. Torrens System, 151. Usage, 33- yesscls, 221. Warrant}', 1 15. Wills — changing of, 253, 256. couicil to, 257. form of, 252. parlies to, 252. provisions of, 253. reading and filing of, 255. revocat'on, 253. signing and attestation of, 255. FINIS. ^ •7,112. iiient of, ii6. tuple, 1 14. itod, I i,v itory, 1 1 J. al, '.13. ■ see corn- tracts, 32. negotiabie 5- 'f. 2SS- ^